• Water - International & Automation FZE • L&T Electrical Corporation • Henikwon Systems) Subsidiaries ⚫TAMCO Group (Medium Voltage Automation • Control & Systems & Equipment Fabrication Yard • L&T Modular Electromech • Larsen & Toubro • Larsen & Toubro Kuwait Construction ATCO Saudia • Larsen & Toubro •L&T-Gulf • L&T - Chiyoda • PT Larsen & Toubro Hydrocarbon Engineering Indonesia • Larsen & Toubro Arabia Offshore • L&T Sapura Shipping • L&T Electrical and Automation Saudi Arabia Company Limited •Servowatch Systems • Kana Controls • Industrial Rail, Automotive, Truck and Off- Highway) • Transportation (Aerospace & Development Transit Oriented Retail • High Street • Integrated Malls Retail Commercial Buildings Standalone • L&T Sapura Campuses • Build to Suite Commercial • Luxury Housing • Elite Housing Residential Development Verticals: Integrated Mixed Use Development • Slum Rehabilitation Authority Projects Development • Joint Venture Development • Land Office Products • L&T - Valdel •Electrical • L&T Cutting Tools Subsidiaries • Rubber Processing Machinery Petrochemicals • Chemicals & • Defence • Nuclear Power • Thermal Power • Mining Machinery Development Types: • Onshore • Oil & Gas Machinery Products • Offshore Valves for • Construction L&T Infotech Technology Services L&T L&T Realty Electrical & Hydrocarbon Automation Engineering L&T ⚫L&T Kobelco EWAC ALLOYS • Maintenance Subsidiaries & Projects Systems Protection • Metering & Standard Products ⚫ Electrical • Engineering Services Fabrication • Modular Services Associates • Construction Systems and • Hydraulic making Machinery & Road • Construction Construction Equipment • L&T Subsidiaries • Services • Wear Plates Welding Components L&T Valves • Medical Devices •Process Industry (CPG, Chemicals, Oil & Gas) • Solar & Power Distribution •Transmission Lines ⚫ EHV Substation Domestic Power Transmission & Distribution • L&T Oman LLC Subsidiary • Factories Mass Housing • Affordable & • Elite Housing Residential Buildings & Factories • Public Space • Health • IT, Office Space, Airports Commercial Buildings & Airports Buildings & Factories of Mining Equipment • Manufacturing Equipment of Steel Plant • Manufacturing Handling Equipment International • Middle East • Africa • ASEAN Business Management Information Analytics & • Social • Mobility •Cloud Digital Testing Services(IMS) Management of Material Systems • Industrial & Distribution •Waste Water • Water Supply & Water & Effluent Treatment Pty. Ltd. • L&T T&D SA Joint Venture • L&T Qatar LLC Arabia LLC • L&T Saudi Subsidiaries Large Water • Telecom & Hi-Tech • Manufacturing MMH - Middle East ⚫ Pharmaceutical & Retail Packaged Goods Consulting • Consumer Consumer & Industrial Machinery • Plant Equipment Manufacturing • Process • Oil & Gas Aerospace • Automotive & (TSIC) • Solution Center engg. (CAE, MES, Sourcing, EPS) Mechanical ⚫PLM and V&V, Apps Engg., Engineering Analytics, IOT, M2M) (ASIC Design, Board Design, Application Engineering • Embedded and Horizontals & Life Sciences • Travel & Logistics • Utilities Handling Speciality Conveyors Bulk Material • Non Ferrous • Ferrous Minerals & Metals Metallurgical & Material- Handling Infrastructure •Cloud Apps • Oracle • SAP Solutions Products Enterprise Application Development & (Horizontals) Service Lines Insurance Financial Services Banking & Entertainment • Media & • Hi-Tech • Communications Technology Maintenance Construction & Mining Machinery Platforms Machinery and attaining global benchmarks. L&T shall foster a culture of caring, trust and continuous learning while meeting expectations of employees, stakeholders and society. LARSEN & TOUBRO A. M. Naik Group Executive Chairman LARSEN & TOUBRO Dear Shareholders, The year 2015-16 saw the Indian economy charting a measured course towards objectives set out by the Government two years ago. While investment momentum is still muted in some sectors, the positives to have emerged are the incremental but important steps taken by the Government in fiscal correction, inflation containment, subsidy reduction, efforts to reinvigorate tax administration and a thrust on increased investment in key infrastructure sectors. Private sector and industrial capex, however, remains subdued on account of paucity of funds in the private sector. The global scenario offers less cause for cheer. The world economy encountered challenges at many levels last year. These include significant volatility, Eurozone instability, depression in crude oil and commodity prices, currency depreciation in emerging markets, and a lingering slowdown in China. India's GDP growth - 7.6% as compared to 7.2% in the previous year - and reduced fiscal deficit of 3.9% sends out encouraging signals for the future. I believe that the forthcoming year holds promise of improvement as far as investment momentum is concerned. The Government's focus on a slew of recent initiatives places your company in a favourable position. Our capabilities in high-tech design and manufacture are unmatched in industry. This enables us to extend the 'Make in India' theme to the upper end of the technological spectrum, as well as to the strategic sectors of defence, nuclear power and aerospace. Our three-decade long association with national defence 1 organisations ensures that we have the credentials to partner with them in the design and manufacture of defence equipment. We also possess in-house capabilities to design, equip and build the habitats of the future - Smart Cities. Performance Overview While new order acquisitions have been muted due to your Company's focus on disciplined bidding on infrastructure projects, the financial performance, as a whole, has been encouraging and has been lauded by Capital Markets. Order Inflows, which are the mainstay of your Company's dominance in the project business, clocked in at 136,858 crores at the Group level, which represents a decline of 12% over the corresponding inflows of the Previous Year. The muted inflows were the outcome of increased competitive price pressures in the power generation and hydrocarbon sectors. The unexecuted Order Book stood at an all-time high of * 249,949 crores and represents a 7% growth over the Order Book at the end of the Previous Year. This robust Order Book position provides your Company with multi- year forward visibility on Revenues and Margins. The Company grew revenues in 2015-16 to 102,632 crores, despite challenges faced in project execution in the form of delayed clearances and tardy progress payments from customers. This represents a 12% growth over revenues in the Previous Year. Losses incurred on Hydrocarbon projects in 2014-15 were largely avoided in 2015-16 and Profits after Tax at the Group level grew to 5,091 crores representing a growth of 7% over the corresponding Profit in 2014-15. It gives me pleasure to announce that your Company has recommended a Dividend of 18.25 per equity share on a face value of 2 per share for the year. The corresponding dividend during the previous fiscal was at 16.25 per equity share. Internationalisation GCC countries, our staple international markets, are experiencing fiscal stress due to low oil prices, and opportunities in the hydrocarbon space have been reduced. Core infrastructure such as power transmission & distribution, hospitals, urban infrastructure, roads and rail networks, however, continue to see investment and these areas have yielded significant order wins for us. We are also focusing on select countries in Africa and some parts of South East Asia. We believe that the opportunity basket that is likely to be provided to us in international markets will still be sufficiently large enough to enable a healthy, geographically-diversified revenue mix. The unexecuted Order Book from international markets stood at over 70,000 crores, which translates to 28% of the total Order Book. This largely comprises orders from diverse infrastructure areas such as metro rail, power transmission & distribution, road & expressways and hydrocarbon sectors. Going Digital at L&T Larsen & Toubro is implementing solutions using digital technologies to make quantum improvements in all key areas of work. A major step in this direction has been the setting up of a Digital Group which will ideate, initiate and implement solutions to deliver results to the business. L&T-ites shall be an innovative. entrepreneurial and empowered team constantly creating value committed to total customer satisfaction and enhancing shareholder value. L&T shall be a professionally-managed Indian multinational, VISION 8-9 Organisation Structure 7 Company Information CONTENTS 6 5 Group Executive Chairman A.M.Naik انسيسه Thank You The areas where solutions are being developed and deployed are Tracking and Monitoring performance on all equipment deployed at construction sites by installing sensors and gateways; improving productivity and safety of workmen through tracking and tagging; optimising logistics and material consumption through GPS and RFID; project monitoring & control through data and visuals captured in real-time, and use of modern geospatial technologies including LiDAR and UAVs for surveys. In conclusion, I would like to thank my fellow Board Members, L&T-ites, customers, vendors and other stakeholders who have collectively enabled sustainable and profitable growth of the business. • Monetisation of road, port and power assets within the plan period • Exit from the General Insurance business • • Consistently growing revenues over the plan period Steady reduction of Net Working Capital levels • Gearing up to tap emerging opportunities in the Defence, Railways, Mining, Smart Cities and Digital business • Focus on execution of the large Order Book in hand, while selectively participating in new bids TECHNOLOGY LEADERSHIP LARSEN & TOUBRO 71st Annual Report 2015-2016 H. HOLCK-LARSEN S.K. TOUBRO These steps are expected to result in improved Free Cash Flows, Profit after Tax and Return on Equity. Leadership Team Another key area is Analytics that will pull in the data from all these initiatives into an Analytics engine to deliver trends, actionable insights and forecast scenarios for proactive and corrective action. Talent Management 5) Defence Sector: The current Government has made the most credible effort so far, to indigenise the manufacture of defence equipment. For L&T, with its long-standing association with the Ministry of Defence, extensive R&D and manufacturing muscle, this presents a major opportunity. We are participating in several bids for ships and artillery guns, among other programs. Any order wins for naval vessels will help improve the capacity utilisation at the Kattupalli Shipyard. 6) Heavy Engineering: The domino effect of the fall in crude prices has led to shrinking orders for oil & gas projects globally and under-utilisation of manufacturing facilities for hydrocarbon equipment. The integrated steel-making & forging facility set up to meet the needs of the hydrocarbon and nuclear power sectors has also been negatively impacted. The Civil Liability for Nuclear Damages Act has been a major roadblock and the same is now being resolved with the formation of a 1,500 crore insurance pool, thus opening up opportunities for establishing new nuclear power plants in the near future, for which your Company is well placed. This could spark a resurgence in nuclear power investments which would augur well for your Company's heavy engineering business. 7) Metallurgical & Material Handling: With global overcapacities in steel and a fall in commodity prices, investment in the ferrous and non-ferrous sectors in India has shrunk considerably. This has adversely affected a business which is already impacted by underutilisation. Fortunately, the outlook is more positive. The green shoots of recovery in the mining sector is expected to provide a fillip to the Material Handling segment. The business expects to improve utilisation in 2016-17. 8) Electrical & Automation (E&A): The Electrical & Automation business has registered muted growth in 2015-16 due to sluggish demand from the industrial, agriculture and building sectors. The Company's array of best-in-class low-voltage and medium-voltage products continues to provide a LARSEN & TOUBRO competitive edge, enabling the company to make the most of the expected revival of domestic demand. During the year, your Company launched a series of contemporary Final Distribution products in the categories of MCBS (Miniature Circuit Breakers), RCCBS (Residual Current Circuit Breakers), Control Accessories and Distribution Boards as well as a full programme of Bus-bar trunking systems for modern buildings and Intelligent Controllers for agricultural markets. With a focus on operational excellence, the business expects to continue delivering profitable growth 9) Realty: This business, which was launched by your Company a few years ago, continues to contribute to revenues and margins through delivery of superior quality projects. Projects under execution in Mumbai and Navi Mumbai are progressing well and a residential housing project launched recently in Bangalore has been received favourably by way of advance bookings. The business is slated to shortly launch another project in Chennai as well as the second phase of its project in Powai, Mumbai. With a substantial land bank for development in hand, this business is expected to deliver steady and profitable revenues over the next few years. 10) Information Technology and Technology Services (IT&TS): The IT&TS business vertical continues to grow and prosper and your Company intends to list these businesses through Public Offerings in 2016-17. With the focus on client mining and growth seen in multiple verticals such as BFSI, Automotive, Aerospace, Industrial Products and Process Engineering sectors, the business is slated to register continued growth and profitability. 11) Financial Services: This business, which was listed in 2011, continues to grow and had a loan book of over 57,000 crores at the end of FY16. The business is focusing on portfolio rationalisation, right-sizing of manpower, and improving the quality of assets in an effort to enhance Return on Equity. 12) Development Projects: Your Company currently has a portfolio of concession assets in the areas of roads, power generation & transmission, and a metro rail. Most of these projects are operational and as such, the infrastructure projects portfolio is going through a major restructuring exercise for the Company to continue its efforts to become more asset light. The metro rail project in Hyderabad, which is one of the largest 'transit-oriented-development' projects in the country, is progressing satisfactorily and is likely to be fully comissioned in FY19. 13) Strategic Plans: & Products Your Company has recently concluded deliberations on the strategy for the next 5 years and has finalised the contours of this plan. Highlights of this plan include: processing and associated pipeline networks in the Middle East. We are also eyeing opportunities in the domestic fertiliser sector, as plants opt for capacity augmentation. On the international front, your Company is eyeing opportunities in gas production, With India's commitment made in Paris on climate change, investment in clean fuel projects is likely to give opportunities to the Hydrocarbon business. Low oil prices have dampened investments in oil production facilities. Some Government enterprises, however, continue to invest in oil production with a view to bolstering India's fuel security, offering opportunities for your Company to leverage its EPC capabilities. Your Company views its people as the cornerstone of business and its Human Resources policy is geared towards developing individuals along with the organisation. The Company has a 7-step leadership development program which aims to build a leadership pipeline at various levels of management. Sustainable Development Your Company is committed to conserving natural LARSEN & TOUBRO resources and enhancing social equity to achieve sustainable progress, while creating value for stakeholders. Significant initiatives have been undertaken in the areas of climate change and water conservation. Your Company's sustainability performance in energy conservation and carbon emission intensity reduction was showcased in the UN - Paris Climate Change Summit 2015. The Company's campuses in different parts of the country are focused on becoming water-positive and zero wastewater discharge units. Your Company's CSR programmes focus on health, education, skill development and water & sanitation interventions to contribute to a better quality of life for the needy. The total spends on CSR initiatives in 2015-16 by your Company amounted to 120 crores under eligible items as defined in the Companies Act which translates to 2.36% of the average annual net profits of the Company over the last 3 years. Outlook The thrust given by the Government on core infrastructure and 'Make in India' initiatives continues to give us a healthy basket of opportunities to tap. Increased allocations by the Centre and States on infrastructure spending, higher levels of outlay by cash-rich Public Sector enterprises and significant funding of infrastructure projects by bi-lateral and multi-lateral lending agencies is propelling the investment momentum forward. Several upcoming projects provide us with a broad perspective of the opportunity horizon opening up for us in 2016-17. Segments that hold promise in FY17 include - 1) Infrastructure: a) Roads - The new political dispensation at the helm of affairs has kick-started investment in roads and FY16 saw a significant uptick in ordering of EPC road contracts by the National Highways Authority of India. We expect this impetus to continue and to be augmented by investments in specialised bridges and tunnels as well as highway orders in some Middle East countries. As technologies and business processes evolve, the group will continue to develop breakthrough solutions and evangelize the digital transformation. b) Railways - In FY16, your Company continued to build on its success in bagging orders for the Dedicated Freight Corridor program currently being piloted by the Indian Railways. The balance of d) Urban Infrastructure - While private sector investments in Urban Infra have seen lower investments, particularly in residential real estate, your Company continues to see a healthy pipeline of prospects in affordable housing, hospitals, office space for IT majors and facilities for educational institutions. e) Smart World and Communication - Larsen & Toubro has consistently aligned its capabilities to national priorities. Presently, there is a growing need for creating Digital India and smarter, secure and intelligent solutions to enhance quality of life. This has led to the rise of smart cities, advanced security solutions and communication infrastructure. In response to this, L&T has integrated its range of comprehensive offerings in this sector to set up a dedicated Smart World & Communication business vertical which offers end-to-end solutions as a Master Systems Integrator in the areas of Security Solutions, Communications Network and Telecom Infrastructure and Smart Infrastructure. With adequate data and superior analytics, these smart world solutions will empower city leaders and planners to make better, more informed decisions, anticipate problems to resolve them proactively, coordinate resources to operate more effectively and efficiently, thereby enhancing the overall quality of life. 3 f) Water Infrastructure - This area has seen relatively poor investments over the last decade and such under-investment in basic water management resources is leading to seasonal water shortages across the country. Recognising this critical need, the Government has increased allocations in this essential sector recently and your Company expects to see a surge in revenues from the increased spends. This will be augmented by the opening up of fresh investment avenues in the allied segments of Waste Water Management and Lift Irrigation programs. 2) Thermal Power Generation: This sector has been constrained with overcapacity in the manufacturing of boilers and turbines, delayed environmental clearances, dearth of fuel availability, increased difficulty in obtaining water linkages as well as long-term funding. FY16, however, saw a number of projects being ordered which your Company could not win due to intense price competition. FY17 is likely to witness ordering of projects aggregating around 8-10 GW and your Company is hopeful of garnering a significant share. 3) Power Transmission & Distribution: FY16 continued to see strong ordering by Central and State power transmission utilities as well as by countries in the Middle East. Your Company has secured major orders in this sector and expects the investment momentum to continue into FY17. 4) Hydrocarbon: orders in this program are likely to be ordered out in FY17 and your Company will participate in those bids as well. Some Middle East countries are also planning investments in conventional rail networks and your Company will participate in those programs as and when the opportunity arises. c) Metro Rail - Your Company has been successfully executing Metro Rail projects in multiple cities over the last few years. Urban development authorities are increasingly viewing metro rail networks as the ideal solution to urban traffic decongestion and our assessment is that this area is likely to see increased spending in FY17 and beyond, through the launch of new projects in a number of cities across the country. Execution of 2 large metro rail projects won in Saudi Arabia and Qatar in FY14 is progressing well. 10 2 12-13 Nominee of Life Insurance Corporation of India Independent Director Independent Director Independent Director Independent Director Independent Director Registrar & Share Transfer Agents Solicitors Auditors Registered Office Company Secretary MR. NARAYANAN KUMAR MRS. NAINA LAL KIDWAI MR. SANJEEV AGA MRS. SUNITA SHARMA MR. THOMAS MATHEW T. MR. AJAY SHANKAR MR. SUBRAMANIAN SARMA MR. BAHRAM N VAKIL MR. AKHILESH KRISHNA GUPTA MR. SUSHOBHAN SARKER MR. ADIL ZAINULBHAI MR. VIKRAM SINGH MEHTA MR. M. DAMODARAN MR. SUBODH BHARGAVA MR. M. M. CHITALE Whole-time Director & Sr. Executive Vice President (Buildings, Minerals and Metals) Whole-time Director & Sr. Executive Vice President (Infrastructure) (Power, Heavy Engg. & Defence) Independent Director Independent Director Verticals Manufacturing Independent Director Industrial L&T Nationwide Network & Global Presence Verticals S Rajavel T Madhavadas Dy. Managing Director & President S N Subrahmanyan A M Naik Group Executive Chairman M V Satish SC Bhargava Shrikant Joshi Keshab Panda Sanjay Jalona S R Subramanian A K Garg NV Venkatasubramanian Whole-time Director & Sr. Executive Vice President Subramanian Sarma 7 71st ANNUAL GENERAL MEETING AT BIRLA MATUSHRI SABHAGAR, 19, MARINE LINES, MUMBAI - 400 020 ON FRIDAY, AUGUST 26, 2016 AT 3.00 P.M. Karvy Computershare Private Limited M/s. Manilal Kher Ambalal & Co. M/s. Sharp & Tannan and M/s. Deloitte Haskins & Sells LLP L&T House, Ballard Estate, Mumbai - 400 001 Mr. N. Hariharan Independent Director Independent Director Independent Director Non-Executive Director 8 Whole-time Director & Chief Financial Officer Nominee of Life Insurance Corporation of India Independent Director Group Executive Chairman 229 Statement of Profit and Loss 228 Balance Sheet 221-227 Auditors' Report 135-220 Management Discussion & Analysis 64-134 Directors' Report AGM Notice Cash Flow Statement 40 38 - 39 Graphs 37 Consolidated Financials - 10 Year Highlights 36 Standalone Financials - 10 Year Highlights 18-35 Annual Business Responsibility Report (ABRR) 2015-16 Deputy Managing Director & President 14-17 Corporate Social Responsibility Route Map to the AGM Venue 230-231 41-63 232-310 MR. M. V. SATISH MR. D. K. SEN MR. SHAILENDRA ROY Notes forming part of Accounts MR. S. N. SUBRAHMANYAN MR. R. SHANKAR RAMAN MR. A. M. NAIK BOARD OF DIRECTORS L&T HOUSE 403 - 404 401 - 402 390-399 320 - 389 COMPANY INFORMATION Consolidated Statement of Profit and Loss Information regarding Subsidiary Companies Proxy Form Notes forming part of Consolidated Accounts 318-319 Auditors' Report on Consolidated Financial Statements 317 316 Consolidated Cash Flow Statement 312-315 Shareholder's Satisfaction Survey Form - 2016 Consolidated Balance Sheet 2,581 0.25 74,99,56,669 80.51 TOTAL ABOVE 2.13 1,540 2,851 0.28 5001 - 10000 10001 & 69,57,960 0.75 0.15 10,28,540 100.00 93,14,78,845 100.00 1,98,17,891 I) Categories of Shareholders is as under: - i) Registrar and Share Transfer Agents (RTA): Till 31st May 2016: Sharepro Services (India) Private Limited, Unit Larsen & Toubro Limited Samhita Warehousing Complex, Bldg. No. 13 A B, 2nd Floor, Off Sakinaka Telephone Exchange Lane, Andheri Kurla Road, Sakinaka, Mumbai - 400 072. From 1st June 2016: Karvy Computershare Pvt. Ltd. 4001 - 5000 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 15 15 15 15 15 15 15 15 15 16 16 16 Daily Closing Price 86,04,177 0.92 1000 2,468 1300 7000 1200 6500 1100 6000 NSE NIFTY No. of Shares Upto 500 Shareholders Number 9,53,125 92.67 Shareholding % Number % 7,58,02,734 8.14 501-1000 41,339 4.02 2,93,65,987 1001-2000 18,779 1.83 2,64,24,188 3.15 2.84 2001-3000 5,857 0.57 1,45,49,239 1.56 3001 - 4000 0.24 Category 100.00 % 2.06% LARSEN & TOUBRO m) Dematerialization of shares & Liquidity: The Company's Shares are required to be compulsorily traded in the Stock Exchanges in dematerialized form. The Company had sent letters to shareholders holding shares in physical form emphasizing the benefits of dematerialization. The number of shares held in dematerialized and physical mode is as under: No. of shares % of total capital issued Held in dematerialized form in NSDL 87,20,91,818 93.63 Held in dematerialized form in CDSL Physical Total 3,97,81,963 4.27 1,96,05,064 2.10 93,14,78,845 Shares held in Demat / Physical Form as on March 31, 2016 CDSL 3,97,81,963 4.27% Physical 1,96,05,064 2.10% NSDL 87,20,91,818 93.63% Except for 11,47,52,281 shares which are held by L&T Employees Welfare Foundation, the remaining shares are freely tradeable in the market. n) Outstanding GDRs/ADRs/Warrants or any Convertible Instruments, conversion date and likely impact on equity: The outstanding GDRs are backed up by underlying equity shares which are part of the existing paid-up capital. 1400 Shares underlying GDRs 16.25% Investors -Foreign Institutional 31.03.2015 % No. of Shares Financial Institutions 27,55,72,334 29.58 28,00,34,611 30.12| Foreign Institutional 15,13,62,292 16.25 15,61,72,982 16.80 Investors Shares underlying GDRs Mutual Funds Bodies Corporate Directors & Relatives L&T Employees Welfare Foundation General Public TOTAL 1,92,13,684 2.06 2,12,66,473 2.29 7,67,74,808 8.24 5,44,05,173 5.85 6,50,66,088 6.99 7,29,24,831 7.85 14,49,515 0.16 25,11,947 0.27 11,47,52,281 12.32 11,16,06,174 12.01 22,72,87,843 24.40 23,06,39,870 24.81| 93,14,78,845 100.00 92,95,62,061 100.00 31.03.2016 No. of Shares Categories of Shareholders General Public 24.40% Karvy Selenium Tower B, Plot 31-32, Gachibowli, Financial District, Nanakramguda, Hyderabad, Telengana - 500 032 j) Share Transfer System: The share transfer activities under physical mode are carried out by the RTA. Shares in physical mode which are lodged for transfer are processed and returned within the stipulated time. The share related information is available online. L&T Employees Welfare Foundation 12.32% Directors & Relatives 0.16% Bodies Corporate: 6.99% Mutual Funds 8.24% Financial Institutions 29.58% as on March 31, 2016 7500 g) Stock Code/Symbol: 8000 BSE SENSEX High Low Month High Low Month Close Close August 30, 2016 2015 6. Second Quarter results During last week of October 2016 * April May 7. Third Quarter results During last week of January 2017 * June Tentative c) Book Closure: The dates of Book Closure are from Saturday, August 20, 2016 to Friday, August 26, 2016 (both days inclusive) to determine the members entitled to the dividend for 2015-2016. d) Listing of equity shares/shares underlying GDRs on Stock Exchanges: The shares of the Company are listed on BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE). 1820.00 1626.75 1632.50 29094.61 26897.54 27011.31 1668.35 1545.35 1655.35 28071.16 26423.99 27828.44 1816.90 1642.10 1782.75 27968.75 26307.07 27780.83 July 1886.25 1741.05 1789.55 28578.33 27416.39 28114.56 August 1844.15 1575.00 1605.30 28417.59 25298.42 26283.09 September 1630.00 1413.15 1466.70 26471.82 24833.54|26154.83 October 1610.40 1400.00 1411.15 27618.14 26168.71 26656.83 November 1404.00 1325.55 1374.05 26824.30 25451.42 26145.67 December 1383.00 1265.50 1275.65 26256.42 24867.73 26117.54 2016 January 1291.25 1070.00 1102.20 26197.27 23839.76 24870.69 February 1174.65 1016.60 1079.25 25002.32 22494.61| 23002.00 March 1248.15 1081.00 1216.20 25479.62 23133.18 25341.86 GDRs are listed on Luxembourg Stock Exchange and traded on London Stock Exchange. e) Listing Fees to Stock Exchanges: f) The Company has paid the Listing Fees for the year 2016-2017 to the above Stock Exchanges. Custodial Fees to Depositories: The Company has paid custodial fees for the year 2016-2017 to National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). Month L&T-BSE (*) h) Stock market data for the year 2015-2016: L&T BSE Price (*) :LTOD LARSEN & TOUBRO C. The eligible shareholders are entitled to claim the shares from the said account upon giving necessary documents. GENERAL SHAREHOLDERS' INFORMATION a) Annual General Meeting: The Annual General Meeting of the Company has been convened on Friday, August 26, 2016 at Birla Matushri Sabhagar, Marine Lines, Mumbai - 400 020 at 3.00 p.m. b) Financial calendar: 1. Annual Results of 2015-16 2. Mailing of Annual Reports 3. First Quarter Results 4. Annual General Meeting 5. Payment of Dividend May 25, 2016 Third week of July, 2016 During the last week of July 2016 * August 26, 2016 The Company has the following Foreign Currency Convertible Bonds outstanding as on March 31, 2016: The Company's equity shares/GDRs are listed on the following Stock Exchanges and admitted for trading in London Stock Exchange: BSE Limited (BSE) National Stock Exchange of India Limited (NSE) ISIN Reuters RIC Luxembourg Exchange Stock Code London Exchange Stock Code Scrip Code 500510 Scrip Code -LT : LART.BO : 005428157 The Company's shares constitute a part of BSE 30 Index of the BSE Limited as well as NIFTY Index of the National Stock Exchange of India Limited. 2000 Stock Performance L&T BSE (*) BSE SENSEX Month L&T NSE Price (₹) NIFTY High Low Month High Low Close Month Close 2015 April May 1819.95 1625.60 1631.30 1669.75 1543.60 1654.45 8844.80 8144.75 8181.50 8489.55 7997.15 8433.65 June July August 1817.00 1643.00 1782.80 8467.15 7940.30 8368.50 1888.00 1737.85 1791.25 8654.75 8315.40 8532.85 1844.20 1575.00 1602.90 8621.55 7667.25 7971.30 September 1629.60 1412.35 1466.25 8055.00 7539.50 7948.90 October 1610.00 1400.00 1410.75 8336.30 7930.65 8065.80 November 1404.00 1326.00 1374.60 8116.10 7714.15 7935.25 December 1382.90 1264.50 1275.45 7979.30 7551.05 7946.35 2016 January 1291.00 1069.10 1101.65 7972.55 7241.50 7563.55 February 1174.95 1016.05 1076.00 7600.45 6825.80 6987.05 March 1249.00 1081.00 1216.70 7777.60 7035.10 7738.40 Physical shares received for dematerialization are processed and completed within a period of 21 days from the date of receipt. Bad deliveries are promptly returned to Depository Participants (DP's) under advice to the shareholders. As required under Regulation 40 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, a certificate on half yearly basis confirming due compliance of share transfer formalities by the Company from Practicing Company Secretary has been submitted to Stock Exchanges within stipulated time. k) Distribution of Shareholding as on March 31, 2016: Stock Performance 2000 L&T NSE (*) - NSE NIFTY 9500 1900 9000 1800 8500 1700 1600 L&T-NSE (*) 90 BSE SENSEX 89 32000 1900 31000 1800 30000 1700 1600 29000 1500 28000 1400 27000 1300 1500 1200 1100 25000 1000 24000 900 23000 800 22000 700 600 21000 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 15 15 15 15 15 15 15 15 15 16 16 16 Daily Closing Price 26000 0.675% USD 200 million Foreign Currency Convertible Bonds due 2019 92 (ii) 63.72 West Bengal (Kolkata, Sultanpur) Chennai), Uttar Pradesh (Lucknow), (Viluppuram, Kancheepuram, Andhra Pradesh(Hyderabad, Visakahapatnam), Bihar (Purnia), Chandigarh, Himachal Pradesh (Solan), Gujarat (Vadodara, Vyara, Kutch), Jharkhand (Sahibganj, Jamshedpur), Karnataka (Magadi), Kerala (Ernakulam), Madhya Pradesh (Khandwa), Maharashtra (Pune, Mumbai, Nagpur, Palghar), New Delhi, Odisha (Angul, Jajpur, Sambalpur), Punjab (Ludhiana), Rajasthan (Banswara, Jaipur, Chittorgarh), Tamil Nadu New Delhi, Odisha (Bhubaneswar), Puducherry, Rajasthan (Jaipur, Jaiselmer, Banswara, Pali, Sojat, Jhunjhunu, Churu, Udaipur), Tamil Nadu (Noombal, Dindigul, Pudukkottai, Katpadi, Tiruchirappalli, Thoothukudi), Uttar Pradesh (Lucknow), West Bengal (Birbhum, North 24 Parganas) Visakahapatnam, Anantapur), Bihar (Patna), Gujarat (Surat, Ahmedabad, Mahesana, Surendranagar), Jharkhand (Jamshedpur), Karnataka (Mysore, Ramanagar), Kerala (Ernakulam), Madhya Pradesh (Bhopal, Raisen), Maharashtra (Ahmednagar, Pune, Raigad) 31.42 Education Education Providing educational aids to children-books, stationary, sports equipments, uniforms, school bags, shoes, wollen clothes, raincoats etc" of school buildings, providing furnitures and light fittings, donation of computers, upgradation of libraries, playground development)" classrooms, water proofing facilities, renovation of (drinking water and sanitation 4 Andhra Pradesh (Hyderabad, 4.48 35.90 Direct 46 Amount (In Lakh) wise (In programs programe projects or project or where projects or program was undertaken covered (budget) 2. Specify the state and district project is 1. Local Area or other which the Projects or Programes S. No. CSR Project or activity identified Sector in 97 support for education Providing infrastructre 3 376.94 Direct Thane), Faridabad, Bijapur), Maharashtra (Mumbai, 559.88 Implementing agencies Karnataka (Bangalore, Mysore, 64.76 495.11 513.94 Gujarat (Surat, Vadodara), Education Lakh) reporting implementing period (In agency Lakh) upto the or through Cumulative Amount expenditure spent: direct wise (In programs programe projects or Odisha (Kansbhal, Sundergarh, Direct Rayagada), Tamil Nadu (Coimbatore, 2 43.72 333.22 374.54 grades and providing nutritional supplements par with their mainstream education, developing the learning levels of children at and hygienic environment for for developing pre school foundation, promoting healthy 174.75 Implementing agencies 20.46 154.29 155.76 Karnataka (Bangalore), West Bengal (Kolkata), Maharashtra (Mumbai, Thane, Pune), Tamil Nadu (Chennai), Assam (Guwahati) balwadis/anganwadis run programmes-Study Centres/ Education Community based Cuddalore, Nilgiris), Uttar Pradesh (Mirzapur) Overhead outlay expenditure (In Lakh) on 9 Delhi, Orissa (Kansbhal), Rajasthan (Jaipur), Tamil Nadu (Chennai, Kancheepuram), West Bengal (Kolkata) (Mumbai, Pune, Palghar), New Pradesh (Bhopal), Maharashtra (Bangalore), Kerala (Kochi), Madhya (Mohali), Gujarat (Surat), Karnataka awareness 56.36 Implementing agencies Visakahapatnam), Chandigarh dental, vaccinations) and health 6.84 49.52 69.58 Andhra Pradesh (Hyderabad, Health Health Camps (general, eye, 8 Blood donation camps Singbhum, Jamshedpur), Karnataka (Bengaluru), Madhya Pradesh (Sidhi, Khandwa), Maharashtra (Mumbai, Nagpur, Ahmednagar), New Delhi (Faridabad), Orissa (Bhubaneswar), Rajasthan (Jaipur, Banswara, Churu, Udaipur), Tamil Nadu (Coimbatore, Vellore, Thoothukudi), Uttar Pradesh (Lucknow, Lalitpur), West Bengal (Kolkata) Health Visakahapatnam), Chandigarh 98 (Ahmednagar), Kerala (Kannur) 18.54 Direct 2.49 16.05 16.50 New Delhi, Maharashtra Health Infrastructure support to medical centres 10 7.57 Implementing agencies 1.23 6.35 7.40 (Chennai, Coimbatore), Uttar Pradesh (Lucknow), West Bengal (Kolkata) (Bhopal, Udaipura), Maharashtra (Ahmednagar, Pune, Thane, Nagpur), Orissa (Bhubaneswar), Tamil Nadu (Chandigarh), Gujarat (Baroda), Jharkhand (Jamshedpur), Karnataka (Bangalore), Madhya Pradesh Andhra Pradesh (Hyderabad, project or Ahmedabad), Jharkhand (East 7.69 Community Health Centres 6 development) career guidance, personality 0.59 Implementing agencies and hygiene, road safety, 0.41 0.18 3.50 Maharashtra (Pune), Kerala (Kannur) Education Awareness programmes (health 5 Lakh) reporting implementing period (In agency Lakh) upto the or through Cumulative Amount expenditure spent: direct Health 63.76 Direct Maharashtra (Mumbai, 298.95 56.07 80.92 Andhra Pradesh (Hyderabad, Visakahapatnam), Chhattisgarh (Raigarh), Gujarat (Vadodara, awareness dental, vaccinations) and health Health Health Camps (general, eye, 7 services at free / nominal cost to the community) ophthalmic consultation, dialysis services, HIV/AIDS awareness, detection, treatment, counseling gynecological, pediatric, immunization, chest & TB, including family planning, offering diagnostic services Ahmednagar), Gujarat (Surat, Dang) (running multi-specialty center 338.21 Direct 39.26 333.60 where projects or program was undertaken covered on Employees across the Company as well as the group are being sensitized about the various policies and governance practices of the Company. The Company had designed in-house training workshops on Corporate Governance with the help of an external faculty covering basics of Corporate Governance as well as internal policies and compliances under Code of Conduct, Whistle Blower Policy, Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, SEBI Insider Trading Regulations, etc. Workshops were conducted during the last year to create a batch of trainers across various businesses. These trainers have in turn conducted training/ awareness sessions within their business and covered more than 41,000 employees in supervisory and above cadre since last year. A similar session was also conducted for senior management by external experts on Compliance & Governance. The Company has appointed Mr. Arnob Mondal, Vice President (Corporate Accounts & Investor Relations), as Chief Investor Relations Officer. The Company also formulated Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information which is available on Company's Website www.larsentoubro.com. u) Awareness Sessions/Workshops on Governance practices: Mr. N. Hariharan, Company Secretary has been designated as the Compliance Officer. of the Company during the next six months following the prior transactions. Directors and designated employees are also prohibited from taking positions in the derivatives segment of the Company's shares. Pursuant to the SEBI (Prohibition of Insider Trading) Regulations, 2015, the Company has suitably modified its Securities Dealing Code for prevention of insider trading with effect from May 15, 2015. The objective of the Code is to prevent purchase and/or sale of shares of the Company by an Insider on the basis of unpublished price sensitive information. Under this Code, Designated Persons (Directors, Advisors, Officers and other concerned employees/persons) are prevented from dealing in the Company's shares during the closure of Trading Window. To deal in securities beyond specified limit, permission of Compliance Officer is also required. All the Designated Employees are also required to disclose related information periodically as defined in the Code. Directors and designated employees who buy and sell shares of the Company are prohibited from entering into an opposite transaction i.e sell or buy any shares t) Securities Dealing Code: The Company has designated an exclusive e-mail id viz. IGRC@LARSENTOUBRO.COM to enable investors to register their complaints, if any. The Company strives to reply to the complaints within a period of 3 working days. s) Investor Grievances: Tel: (022) 6623 5454/5412/5427 - Mumbai 400 023. Ground Floor, Ambalal Doshi Marg, Behind BSE Limited, Fort, Karvy Computershare Pvt. Ltd. Unit Larsen & Toubro Limited 24-B, Raja Bahadur Mansion, Website: www.karvycomputershare.com E-Mail einward.ris@karvy.com Fax: (040) 2342 0814 Toll free number: 1-800-3454-001 The Company will continue to conduct such workshops/sessions on a regular basis. Tel: (040) 6716 2222 v) ISO 9001:2008 Certification: w) Secretarial Audit as per SEBI requirements: As stipulated by SEBI, a Qualified Practicing Company Secretary carries out Reconciliation of Share Capital Audit to reconcile the total admitted capital with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and the total year; (i) that there were no significant changes in internal controls over financial reporting during the (ii) that there were no significant changes in accounting policies made during the year; and (ii) that there were no instances of significant fraud of which we have become aware. (c) We accept responsibility for establishing and maintaining internal controls for financial reporting. We have evaluated the effectiveness of internal control systems of the Company pertaining to financial reporting and have disclosed to the Auditors and the Audit Committee, deficiencies, if any, in the design or operation of such internal controls of which we are aware and steps taken or proposed to be taken for rectifying these deficiencies. (d) We have indicated to the Auditors and the Audit Committee: (b) There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year which are fraudulent, illegal or in violation of the Company's code of conduct. (ii) these statements present a true and fair view of the Company's affairs and are in compliance with current accounting standards, applicable laws and regulations. We have reviewed the consolidated financial statements, read with the consolidated cash flow statement of Larsen & Toubro Limited for the year ended March 31, 2016 and that to the best of our knowledge and belief, we state that; (a) (i) these statements do not contain any materially untrue statement or omit any material fact or contain statements that may be misleading; [Issued in accordance with provisions of Regulation 17(8) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015] Sub: CEO/CFO Certificate Dear Sirs, To the Board of Directors of Larsen & Toubro Limited 93 33 experienced professionals. The Company has a system to review and audit its secretarial and other statutory compliances by competent professionals, who are employees of the Company. Appropriate actions are taken to continuously improve the quality of compliance. The Company also has adequate software and systems to monitor compliance. The secretarial department of the Company at Mumbai is manned by competent and issued and listed capital. This audit is carried out every quarter and the report thereon is submitted to the Stock Exchanges. The Audit confirms that the total Listed and Paid-up capital is in agreement with the aggregate of the total number of shares in dematerialized form and in physical form. LARSEN & TOUBRO 22 The Company's Secretarial Department which provides secretarial services and investor services for the Company and its Subsidiary and Associate Companies, is ISO 9001:2008 certified. and Financial District, Nanakramguda, Hyderabad, Telengana-500 032 1. Karvy Computershare Pvt. Ltd. Unit Larsen & Toubro Limited Karvy Selenium Tower B, Plot 31-32, Gachibowli, q) Plant Locations: Ballard Estate, Mumbai - 400 001. 17, R. Kamani Marg, IDBI Trusteeship Services Limited Ground Floor, Asian Building, p) Debenture Trustees (for privately placed debentures) The redeemable Non-Convertible debentures issued by the Company are listed on the Wholesale Debt Market (WDM) of National Stock Exchange of India Limited (NSE) and/or BSE Limited (BSE). o) Listing of Debt Securities: These Convertible Bonds are listed on the Singapore Exchange Securities Trading Limited. 63,46,986 shares may be issued pursuant to conversion notices in respect of (iii) above (v) Underlying Equity Shares/GDR's that above pursuant to conversion as per (ii) (iv) Underlying Equity Shares/GDR's issued NIL (iii) Principal Value of Bonds outstanding USD 200 million as at March 31, 2016 USD 200 million NIL Principal Value of Bonds converted to GDRs since issue. The L&T Group's facilities for design, engineering, manufacture, modular fabrication and production are based at multiple locations within India including Ahmednagar, Ankleshwar, Bengaluru, Chennai, Coimbatore, Faridabad, Hazira (Surat), Kattupalli (near Chennai), Kanchipuram, Mumbai, Navi Mumbai, Mysuru, Pithampur, Puducherry, Rajpura, Kansbahal (Rourkela), Talegaon and Vadodara. L&T's international manufacturing footprint covers the Gulf (Oman, Saudi Arabia, U.A.E), South East Asia (Malaysia and Indonesia) and the U.K. The L&T Group also has an extensive network of offices in India and around the globe. 2. r) Address for correspondence: L&T House, Ballard Estate, Mumbai - 400 001. Tel. No. (022) 6752 5656, From June 1, 2016: Fax: (022) 2282 5484 912, Raheja Centre, Free Press Journal Road, Nariman Point, Mumbai 400 021. Tel: (022) 6613 4700 Unit Larsen & Toubro Limited 2. Sharepro Services (India) Private Limited 91 Tel No. (022) 6772 0300/6772 0400 Fax No. (022) 2859 1568/2850 8927 E-Mail Lnt@shareproservices.com; Sharepro@shareproservices.com 400 072. - Mumbai - Andheri Off Sakinaka Telephone Exchange Lane, Kurla Road, Sakinaka, 1. Sharepro Services (India) Private Limited Unit Larsen & Toubro Limited Samhita Warehousing Complex, Bldg. No. 13 A B, 2nd Floor, Till May 31, 2016: Shareholder correspondence may be directed to the Company's Registrar and Share Transfer Agent, whose address is given below: Fax No. (022) 6752 5893 Larsen & Toubro Limited (i) Principal Value of the Bonds issued Yours sincerely, A. M. Naik Group Executive Chairman The Company has duly formulated a CSR Policy Framework which includes formulation of a CSR Theme, CSR budget and roles and responsibilities of the Committee as well as the various internal committees formed for implementation of the CSR policy; CSR Committee Responsibility Statement: The CSR Committee hereby affirms that: 96 7. 95 ΝΑ given in the Governance section on the Reasons for not spending the amount during the financial year. As per table enclosed the financial year is detailed below: Manner in which the amount was spent in The detailed CSR Policy Framework is 6. Governance, Technology and Innovation would be the Key enabling factors across all these verticals. C. Nil b. The Company has constituted a mechanism to monitor and report on the progress of the CSR programs; Skill Development - may include but not limited to vocational training such as skill building, computer training, women empowerment, support to ITI's, support to specially abled (infrastructure support & vocational training), Construction Skills Training Centres and providing employability skills to women and youth. The activities undertaken by the Company as well as the implementation and monitoring mechanisms are in compliance with its CSR objectives and CSR policy. VIKRAM SINGH MEHTA (budget) 2. Specify the state and district project is Overhead (*In Lakh) outlay expenditure 1. Local Area or other which the Direct Amount Projects or Programes LARSEN & TOUBRO running for children from underprivileged backgrounds (teachers training, play way methods, support for English and Mathematics, capacity building, promoting extra curricular activities) education and learning levels in government schools/ schools School support programme- Enhancing the quality of 1 S. No. CSR Project or activity identified Sector in Chairman CSR Committee S. N. SUBRAHMANYAN Deputy Managing Director R. Shankar Raman Chief Financial Officer Amount unspent, if any: 101.46 crore during the financial year 2015-16. As against this mandate, the Company spent 119.89 crore towards various activities for the benefit of the community. This exceeds the required spend by 18.43 crore. The CSR spend for FY 2015-16 is 2.36% of the average net profit under Section 198 of the Companies Act, 2013. 1. CSR ACTIVITIES FOR 2015-16 Annexure 'C' to the Board Report LARSEN & TOUBRO 94 Membership No. 38332 Partner SHARP AND TANNAN Chartered Accountants Firm's Registration No. 109982W by the hand of FIRDOSH D. BUCHIA Mumbai, May 25, 2016 We state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company. In our opinion and to the best of our information and according to the explanation given to us, we certify that the Company has complied in all material respects with the conditions of corporate governance as stipulated in the Regulations. The compliance of conditions of corporate governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of corporate governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. We have examined the compliance of conditions of corporate governance by Larsen & Toubro Limited for the year ended 31 March 2016 as stipulated in Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations 2015 ('the Regulations'). To the members of Larsen & Toubro Limited Auditors Certificate on Compliance of Conditions of Corporate Governance Date: May 25, 2016 Place: Mumbai A brief outline of the Company's CSR policy, including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs. In addition to the above spend, a contribution of 3.78 crore was made by the Company towards the Prime Minister's National Relief Fund towards earthquake relief efforts at Nepal. The Company's CSR Policy framework details the mechanisms for undertaking various programmes in accordance with Section 135 of the Companies Act, 2013 (the Act) for the benefit of the community. - a. Total amount to be spent for the financial year: The Company was required to spend Details of CSR spent during the financial year: The Company was required to spend an amount of 101.46 crore as CSR expenditure during the financial year 2015-16. Prescribed CSR expenditure (two percent of the amount as in item 3 above). The average net profit of the Company for the last three financial years is 5073 crore. 5. 4. 3. Average net profit of the Company for the last three financial years. The present Committee comprises of Mr. Vikram Singh Mehta as Chairman, Mr. R. Shankar Raman and Mr. D.K. Sen as members and Mr. N. Hariharan as the Secretary of the Committee. The CSR Committee of the Board was re-constituted on September 21, 2015 on account of the vacancy arising due to retirement of Mr M.V. Kotwal and Mr. D.K. Sen was appointed in his place. It comprises of one Independent Director and two Executive Directors. The Company Secretary acts as Secretary to the Committee. 2. Composition of the CSR Committee. website of the Company. Please see the link http://investors.larsentoubro.com/Listing-Compliance.aspx Health may include but not limited to community health centres, mobile medical vans, dialysis centres, general and specialized health camps and outreach programs, support to HIV/ AIDS, Tuberculosis control programs. - Education may include but not limited to education infrastructure support to educational Institutions, educational programs & nurturing talent at various levels. - Water & Sanitation may include but not limited to watershed development -making clean drinking water available, promoting rain water harvesting, soil and moisture conservation, enhancing ground water levels by facilitating community management of water resources for improving conditions related to sanitation, health, education and livelihoods of communities through an integrated approach. The Company will primarily focus on 'Building India's Social Infrastructure' as part of its CSR programme which will include, amongst others, the following areas, viz. (In Lakh) : INE018A01030 The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act. i. The Companies Act, 2013 (the Act) and the rules made thereunder and the applicable provisions of Companies Act, 1956; g. ii. The Securities Contracts (Regulation) Act, 1956 ('SCRA') and the rules made thereunder; iii. The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder; The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client - Not Applicable as the Company is not registered as Registrar to Issue and Share Transfer Agent during the financial year under review; The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 Not applicable as the Company has not delisted/proposed to delist its equity shares from any Stock Exchange during the financial year under review; 104 LARSEN & TOUBRO h. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 - Not applicable as the Company has not bought back/proposed to buy-back any of its securities during the financial year under review. vi. The Company has informed that there are no laws, which are specifically applicable to the Company. We have also examined compliance with the applicable provisions of the following: (i) Secretarial Standards with regard to Meetings of Board of Directors (SS-1) and General Meetings (SS-2) issued by The Institute of Company Secretaries of India and made effective 1st July 2015; (ii) The Listing Agreements entered into by the Company with National Stock Exchange of India Limited and BSE Limited and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 made effective 1st December 2015. During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above. We further report that: - Adequate notice is given to all Directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent atleast seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting. f. Unanimous decision is carried through hence there are no dissenting members' views to be captured and recorded as part of the minutes. e. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 - Not Applicable as the Company has not issued further capital during the financial year under review; SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2016 [Pursuant to section 204(1) of the Companies Act, 2013 and rule No. 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014] To, The Members, Larsen & Toubro Limited CIN: L99999MH1946PLC004768 L&T House, Ballard Estate, Mumbai-400 001 We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Larsen & Toubro Limited (hereinafter called 'the Company'). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon. Based on our verification of the Company's books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on 31st March 2016, complied with the statutory provisions listed hereunder and also that the Company has proper board-processes and compliance- mechanism in place to the extent, in the manner and subject to the reporting made hereinafter: We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31st March 2016 according to the provisions of: iv. Foreign Exchange Management Act, 1999 and V. the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings; The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 ('SEBI Act'):- a. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; b. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 upto 14th May 2015/Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 (effective 15th May 2015); C. d. The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014; Form No. MR-3 We further report that based on review of compliance mechanism established by the Company and on the basis of the Compliance Certificate(s) issued by the Company Secretary and taken on record by the Board of Directors at their meeting(s), we are of the opinion that there are adequate systems and processes in place in the Company which is commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines: - For S. N. ANANTHASUBRAMANIAN & CO. Company Secretaries PUBLIC LIMITED COMPANY vi) Address of the Registered office and contact L&T HOUSE, N. M. MARG, BALLARD ESTATE, MUMBAI - 400 001 details vii) Whether listed company viii) Name, Address and Contact details of Registrar and Transfer Agent, if any TEL: 022-6752 5656 FAX: 022-6752 5893 LISTED SHAREPRO SERVICES (INDIA) PRIVATE LIMITED; UNIT-LARSEN & TOUBRO LIMITED, SAMHITA WAREHOUSING COMPLEX, BLDG. NO. 13 A B, 2ND FLOOR, OFF SAKINAKA TELEPHONE EXCHANGE LANE, ANDHERI KURLA ROAD, SAKI NAKA, MUMBAI - 400 072. TEL: 022-6772 0300/6772 0400 FAX: 022-2859 1568/2850 08927 PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY All the business activities contributing 10 % or more of the total turnover of the company shall be stated:- SI. No. 1 Name and Description of main products/ services Construction of Buildings 2 Construction of Roads and Railways 3 LARSEN & TOUBRO LIMITED As informed, the Company has responded to notices for demands, claims, penalties etc., levied by various statutory/regulatory authorities and initiated actions for corrective measures, wherever found necessary. We further report that the Company has on 24th September 2015, issued and allotted 10,000 Unsecured Non-Convertible Debentures aggregating to 1000 crore. February 7, 1946 v) Firm Registration No.P1991MH040400 S. N. ANANTHASUBRAMANIAN Partner C.P No: 1774 Date: May 12, 2016 Place: Thane 105 Annexure 'F' to the Board Report FORM NO. MGT-9 EXTRACT OF ANNUAL RETURN as on the financial year ended on March 31, 2016 [Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014] REGISTRATION AND OTHER DETAILS: I. i) CIN ii) Registration Date iii) Name of the Company Sub-Category of the Company II. iv) Category L99999MH1946PLC004768 Construction of Utility Projects 103 Date: May 12, 2016 3.57 @@ Subramanian Sarma Non-Executive Director NIL NIL Naina Lal Kidwai Independent Director NIL NIL N Hariharan Company Secretary 0.98 N.A. 9.66 $ # ## Ratio of remuneration of director to the median remuneration is calculated on pro-rata basis for those directors who served for only part of the financial year 2015-16. Details not given as K Venkataramanan was a Director for only part of the financial year 2015-16 i.e. upto 30.09.2015. Details not given as M V Kotwal was a Director for only part of the financial year 2015-16 i.e. upto 26.08.2015. 0.23 ### Details not given as Bahram N Vakil was a Director only from 16.03.2015. Independent Director @ 14.29 Independent Director 0.09 1.32 ### Swapan Dasgupta Sunita Sharma^ Non-Executive Director 0.20 2.96 #### Nominee of Life Insurance 0.17 2.54 #### Corporation of India 50,000/- for Board meetings and 25,000/- for Committee meetings during the year. The remuneration policy is given in Annexure 'B' of this Board Report. Please refer to page 84 of the Annual Report. Thomas Mathew T Independent Director 0.38 5.77 Ajay Shankar Place: Thane #### Details not given as Swapan Dasgupta and Sunita Sharma was a Director from 01.04.2015. Details not given as Thomas Mathew T was a Director for only part of the financial year 2015-16 i.e. w.e.f. 03.04.2015. @@ Details not given as Ajay Shankar was a Director for only part of the financial year 2015-16 i.e. w.e.f. 30.05.2015. CIN L99999MH1946PLC004768 L&T House, Ballard Estate, Mumbai-400 001. Our Secretarial Audit Report of even date is to be read along with this letter. Management's Responsibility 1. It is the responsibility of the management of the Company to maintain secretarial records, devise proper systems to ensure compliance with the provisions of all applicable laws and regulations and to ensure that the systems are adequate and operate effectively. Auditor's Responsibility 2. Our responsibility is to express an opinion on these secretarial records, standards and procedures followed by the Company with respect to secretarial compliances. 3. We believe that audit evidence and information obtained from the Company's management is adequate and appropriate for us to provide a basis for our opinion. 4. Wherever required, we have obtained the management's representation about the compliance of laws, rules and regulations and happening of events etc. Disclaimer 5. The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company. For S. N. ANANTHASUBRAMANIAN & CO. Company Secretaries Firm Registration No. P1991 MH040400 S. N. ANANTHASUBRAMANIAN Partner C.P No: 1774 Larsen & Toubro Limited @ The Members, Annexure 'E' to the Board Report Λ Part of the remuneration has been paid to the financial institution he/she represents. * ** Details not given as D K Sen was a Director for only part of the financial year 2015-16 i.e. w.e.f. 01.10.2015. Details not given as M V Satish was a Director for only part of the financial year 2015-16 i.e. w.e.f. 29.01.2016. 101 B) Percentage increase in the median remuneration of all employees in the financial year 2015-16: The median remuneration of employees of the Company during the financial year was ₹ 6.58 lakh. In the financial year, there was an increase of 9.35% in the median remuneration of employees; C) Number of permanent employees on the rolls of Company as on 31st March 2016 There were 43354 permanent employees on the rolls of Company as on March 31, 2016; D) Explanation on the relationship between average increase in remuneration and company performance The average increase in remuneration per employee was 7.2%. The Profit after Tax for the year 2015-16 increased by 5.0%. The average increase in remuneration per employee is in line with normal pay revisions and variable component forming integral part of remuneration which is linked to individual performance apart from Company's performance. E) Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company The remuneration of Key Managerial Personnel for the year increased by 93.6% and the Profit after Tax increased by 5.0%. The remuneration to Key Managerial Personnel is designed to be competitive in the market for highly qualified executives. F) Variations in the market capitalisation of the company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer in case of listed companies The market capitalisation as on 31st March, 2016 was 1,11,097 crore (1,59,791 crore as on 31st March, 2015). The price earnings ratio of the Company was 21.31 as at 31st March, 2016 and was 31.56 as at 31st March, 2015. The Company had made a public issue of fully convertible debentures in November 1989 @ 300 per debenture. These debentures were fully converted into 5 equity share of 10 each in tranches in 1992. Taking into consideration the adjustments for the demerger of the cement business in June 2004, bonus issues in 1:1 ratio in October 2006 and October 2008 and bonus issue in 1:2 ratio in July 2013, the closing share price of the Company at BSE Limited on 31st March 2016, at ₹ 1216.20 per equity share of face value 2 each is 243 times the price of the share issued in 1992. G) Average percentile increase already made in the salaries of the employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in managerial remuneration Average percentage increase made in the salaries of employees other than the managerial personnel for the year 2015-16 was 7.5% whereas there is increase in the managerial remuneration by 93.6% because a substantial portion of managerial remuneration is linked to Company performance during the financial year 2015-16 and also includes perquisite value of employee stock options exercised during the year. As stated above, the Profit after Tax for the year 2015-16 increased by 5.0% directly impacting the variable component of managerial remuneration. H) The key parameters for any variable component of remuneration availed by the directors The key parameters for the variable component of remuneration availed by the Key Management Personnel are (a) profit after tax of the Company and (b) profit after tax of the respective business divisions (including subsidiary and associate companies of those business divisions) and (c) leadership initiatives undertaken during the year. The variable component of remuneration also includes perquisite value of employee stock options granted by the company (including subsidiary companies). These parameters are approved by the Board of Directors based on the recommendations of the Nomination & Remuneration Committee and resolution passed by Annual General Meeting as per the Remuneration Policy for Key Management Personnel. The variable component of remuneration of Key Management Personnel is subject to maximum limit approved by the shareholders in the Annual General Meeting. The non-executive directors are paid remuneration by way of commission & sitting fees. The Company pays sitting fees of 50,000 per meeting of the Board and 25,000 per meeting of the Committee to the non-executive directors for attending the meetings of the Board & Committees. The commission is paid as per limits approved by shareholders, subject to a limit not exceeding 1% p.a. of the profits of the Company (computed in accordance with Section 198 of the Companies Act, 2013). The commission to non-executive directors is distributed broadly on the basis of their attendance, contribution at the Board, the Committee meetings, Chairmanship of Committees and participation in meetings of the business divisions. In the case of nominees of Financial Institutions, the commission is paid to the Financial Institutions. 102 LARSEN & TOUBRO To, NIC Code of the Product/ service 410 MOUNT POONAMALLE L&T BPP TOLLWAY LIMITED 17 MAHARASHTRA - 400001 LIMITED N M MARG, MUMBAI, SERVICES PRIVATE 100.00 Section 2(87)(ii) SUBSIDIARY U62100MH2009PTC196917 L&T HOUSE, BALLARD ESTATE, L&T AVIATION 16 MAHARASHTRA - 400001 LIMITED N M MARG, MUMBAI, HYDROPOWER 100.00 Section 2(87)(ii) SUBSIDIARY U40300MH2010PLC204778 L&T HOUSE, BALLARD ESTATE, U45203TN2011PLC080786 L&T ARUNACHAL SUBSIDIARY ROAD, POST BOX NO 979, L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 L&T CASSIDIAN LIMITED 20 MAHARASHTRA - 400001 66.71 Section 2(87)(ii) SUBSIDIARY U67190MH2013PLC240261 L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, L&T CAPITAL MARKETS LIMITED 19 MAHARASHTRA - 400001 N M MARG, MUMBAI, COMPANY LIMITED 100.00 Section 2(87)(ii) SUBSIDIARY U67190MH2000PLC125653 L&T HOUSE, BALLARD ESTATE, L&T CAPITAL 18 CHENNAI-600089 MANAPAKKAM, 97.45 Section 2(87)(ii) U29253MH2011PLC216258 15 MANAPAKKAM, LIMITED L&T - GULF PRIVATE 12 DELHI-110075 97.45 Section 2(87)(ii) SUBSIDIARY U40106DL2012GOI245339 BUILDING NO. 3, 2ND FLOOR, SUDEEP PLAZA, MLU SECTOR-II, POCKET 4, DWARKA, NEW LIMITED TRANSMISSION KUDGI 11 95.00 Section 2(87)(ii) SUBSIDIARY U27100GJ2009PTC055901 L&T ENERGY CENTRE, NEAR CHHANI JAKAT NAKA, VADODARA, GUJARAT - 390002 PRIVATE LIMITED KESUN IRON AND STEEL COMPANY 10 COMPANY WLL & CONTRACTING L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, CHENNAI-600089 U74140MH2008PTC177765 50.0002 Section 2(87)(ii) LIMITED ROAD, POST BOX NO 979, MALIYA TOLLWAY 97.45 Section 2(87)(ii) SUBSIDIARY U45203TN2008PLC069211 MOUNT POONAMALLE L&T AHMEDABAD- 14 CHENNAI-600089 MANAPAKKAM, SERVICES LIMITED ROAD, POST BOX NO 979, 66.71 Section 2(87)(ii) SUBSIDIARY U65100TN2011PLC083348 MOUNT POONAMALLE DISTRIBUTION L&T ACCESS 13 MAHARASHTRA - 400001 SUBSIDIARY SUBSIDIARY 74.00 Section 2(87)(ii) 21 3 CONSUMER UNIT NO.505 & 506, DLF TOWER U67120DL2001PLC199088 SUBSIDIARY 66.71 Section 2(87)(ii) FINANCIAL SERVICES B, DISTRICT CENTRE, JASOLA, LIMITED NEW DELHI-110025 4 EWAC ALLOYS L&T HOUSE, BALLARD ESTATE, U74999MH1962PLC012315 SUBSIDIARY 100.00 Section 2(87)(ii) LIMITED NM MARG, MUMBAI, MAHARASHTRA - 400001 Holding/ Subsidiary/ Associate U65910WB1993FLC060810 SUBSIDIARY CHENNAI-600089 LARSEN & TOUBRO MANAPAKKAM, 100.00 Section 2(87)(ii) 421 422 III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES - S.No Name of the Address of the Company CIN/GLN U74899DL1995PLC070704 Holding/ Subsidiary/ Associate SUBSIDIARY % to total turnover of the company % of Shares Applicable Section held 106 Company 1 BHILAI POWER SUPPLY COMPANY LIMITED 2 CHENNAI VISION DEVELOPERS 9TH FLOOR, AMBADEEP BUILDING, 14, KASTURBA GANDHI MARG, CONNAUGHT PLACE, NEW DELHI-110001 MOUNT POONAMALLE ROAD, POST BOX NO 979, 99.90 Section 2(87)(ii) U70101TN2008PTC068877 SUBSIDIARY PRIVATE LIMITED % of Shares Applicable Section held 66.71 Section 2(87)(ii) U72200TZ1997PLC008145 ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI 600089 OFFICE NO. 14, 5TH FLOOR, AL-FARWANIYA, BLOCK NO. 44, BLDG. NO. 6, GHASHAM FAHED AL-BASMAN, KUWAIT SUBSIDIARY 100.00 Section 2(87)(ii) U14290TN2008PLC065900 SUBSIDIARY 100.00 Section 2(87)(ii) 9 KANA CONTROLS 10292 SUBSIDIARY S.No Name of the 108 107 ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI 600089 TOLLWAYS LIMITED 97.45 Section 2(87)(ii) SUBSIDIARY U45309TN2008PLC066938 MOUNT POONAMALLE L&T CHENNAI TADA MOUNT POONAMALLE 41200, KLANG, SELANGOR, MALAYSIA 4A, BANDAR BUKIT TINGGI, 161535-W SUBSIDIARY 94.96 Section 2(87)(ii) S. No Name of the Address of the Company CIN/GLN Company 5 FAMILY CREDIT LIMITED 6 GDA TECHNOLOGIES LIMITED 3.69 7 BHD 8 HI-TECH ROCK PRODUCTS & CORPORATION SDN. AGGREGATE LIMITED GENERAL TRADING TECHNOPOLIS, 7TH FLOOR, A-WING, PLOT NO. - 4, BLOCK - BP, SECTOR - V, SALT LAKE, KOLKATA-700091 NO.9-A, CHINTHAMANI NAGAR, K.K. PUDUR, COIMBATORE-641038 2A-03-2, LORONG BATU NILAM HENIKWON 0.24 Independent Director 40.00 SUBSIDIARY U45203TN2011PLC083661 MOUNT POONAMALLE L&T DECCAN 24 100.00 Section 2(87)(ii) SUBSIDIARY U28920MH1952PLC008893 L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 L&T CUTTING TOOLS LIMITED 23 MAHARASHTRA - 400001 100.00 Section 2(87)(ii) held % of Shares Applicable Section SUBSIDIARY U29119MH1997PLC109700 Subsidiary/ Associate Holding/ L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, L&T CONSTRUCTION EQUIPMENT LIMITED 97.45 Section 2(87)(ii) 22 TOLLWAYS LIMITED MANAPAKKAM, SUBSIDIARY 2050051589 100.00 Section 2(87)(ii) SUBSIDIARY 107673 97.45 Section 2(87)(ii) SUBSIDIARY U45203TN2010PLC075491 WAREHOUSE NO. FZS2AB05 262158, JEBEL ALI FREE ZONE, DUBAI, UNITED ARAB EMIRATES MH-4, PLOT NO. 17+19, IIND INDUSTRIAL CITY, DAMMAM, P.O. BOX 77186, AL KHOBAR 31952, KINGDOM OF SAUDI ARABIA CHENNAI-600089 MANAPAKKAM, L&T ELECTRICAL AND AUTOMATION SAUDI ARABIA COMPANY LIMITED LLC L&T ELECTRICAL & AUTOMATION FZE 27 26 ROAD, POST BOX NO 979, MOUNT POONAMALLE L&T DEVIHALLI HASSAN TOLLWAY LIMITED 25 25 CHENNAI 600089 ROAD, POST BOX NO 979, 75.00 Section 2(87)(ii) Company Address of the Company 2530.49 446.48 2976.97 Direct Orissa (Cuttack), Tamil Nadu (Kanchipuram, Pulicat), Delhi (Pilkhuwa), West Bengal (Kona, Srirampore) 12 Computer training for youth Skill Building Andhara Pradesh (Visakhapatnam), Gujarat (Surat) 29.00 28.16 4.06 32.22 Implementing agencies 13 Vocational Training Skill Building Gujarat (Vadodara), Madhya 91.79 91.37 12.28 Pradesh (Malwa), Rajasthan (Jaipur), Tamil Nadu (Chennai, Nilgiri), Uttar Pradesh (Lucknow), West Bengal (Kolkata) 103.64 Implementing agencies 3456.12 CIN/GLN Skill Building Andhara Pradesh (Hyderabad), Gujarat (Ahmedabad), Maharashtra (Panvel), Karnataka (Bangalore), 11 LARSEN & TOUBRO S. No. CSR Project or activity identified Sector in which the Projects or Programes 1. Local Area or other project is covered 2. Specify the state and district where projects or program was undertaken Amount Direct Overhead (*In Lakh) on outlay expenditure (budget) project or projects or programe programs wise (In (In Lakh) Cumulative Amount expenditure spent: direct upto the or through reporting implementing period (In agency Lakh) Lakh) Construction Skill Training Institute - CSTI 28 L&T ELECTRICALS L&T HOUSE, BALLARD ESTATE, PRIVATE LIMITED L&T HOWDEN 36 NEW DELHI-110025 B, DISTRICT CENTRE, JASOLA, FINANCE LIMITED 66.71 Section 2(87)(ii) SUBSIDIARY UNIT NO.505 & 506, DLF TOWER U45200DL1994PLC198639 L&T HOUSING 35 LIMITED SHIMLA-171001 HYDROPOWER 100.00 Section 2(87)(ii) SUBSIDIARY U40102HP2010PLC031697 RAMA COTTAGE, KANLOG, L&T HIMACHAL 34 CHENNAI-600089 37 MANAPAKKAM, L&T HYDROCARBON LIMITED 310000400714060 (JIADING) 97.45 Section 2(87)(ii) SUBSIDIARY 201326418G 100.00 Section 2(87)(ii) SUBSIDIARY U11200MH2009PLC191426 50.10 Section 2(87)(ii) SUBSIDIARY U31401MH2010PTC204403 8 CROSS STREET, #10-00, PWC BUILDING, SINGAPRE (048424) ROOM 1100, BUILDING 2, NO. 1388, XINGXIAN ROAD, JIADING DISTRICT, SHANGHAI L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 (SHANGHAI) CO., LTD. SERVICES TECHNOLOGY L&T INFORMATION MANAGER PTE. LTD. 39 L&T IDPL TRUSTEE 38 ENGINEERING 97.45 Section 2(87)(ii) SUBSIDIARY U45203TN2008PLC069210 SUBSIDIARY U65990MH1994PLC083147 L&T HOUSE, BALLARD ESTATE, L&T FINANCE 30 MAHARASHTRA - 400001 N M MARG, MUMBAI, HOLDINGS LIMITED 66.71 Section 2(87)(ii) SUBSIDIARY L67120MH2008PLC 181833 L&T HOUSE, BALLARD ESTATE, L&T FINANCE 29 MAHARASHTRA - 400001 LIMITED N M MARG, MUMBAI, AND AUTOMATION 100.00 Section 2(87)(ii) SUBSIDIARY U31501MH2007PLC176667 66.71 Section 2(87)(ii) LIMITED N M MARG, MUMBAI, MAHARASHTRA - 400001 MOUNT POONAMALLE ROAD, POST BOX NO 979, SHAMLAJI TOLLWAY LIMITED MAHARASHTRA - 400001 L&T HALOL- COMPANY LIMITED 33 100.00 Section 2(87)(ii) SUBSIDIARY U66030MH2007PLC177117 L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, 14 INSURANCE 32 MAHARASHTRA - 400001 N M MARG, MUMBAI, LIMITED 66.71 Section 2(87)(ii) SUBSIDIARY U65910MH1997PLC108179 L&T HOUSE, BALLARD ESTATE, L&T FINCORP 31 L&T GENERAL 49.00 Section 2(87)(i) Women empowerment through Skill Building Andhra Pradesh (Hyderabad), vocational training 9.58 657.70 # Director M V Kotwal Whole-time Director & President 26.59 403.89 ## (Heavy Engineering) S N Subrahmanyan Deputy Managing Director & 22.12 336.04 72.44 President R Shankar Raman Whole-time Director & Chief 13.69 208.01 Financial Officer Shailendra N Roy 43.30 Whole-time Director & Senior Chief Executive Office & Managing 142.14 6000.00 0 6000.00 12504.32 11189.35 799.46 11988.81 LARSEN & TOUBRO Annexure 'D' to the Board Report A) Ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year 2015-16, the percentage increase in remuneration of each Director & Company Secretary during the financial year 2015-16 and comparison of the remuneration of each of the Key Managerial Personnel against the performance of the company crore Name of the Director/ KMP Designation 2015-16 Total Remuneration Ratio of remuneration of director to the median remuneration $ Percentage increase in Remuneration Comparison of the Remuneration of the KMP against the performance of the Company A M Naik Group Executive Chairman 66.14 1004.77 K Venkataramanan 6000.00 10.05 Executive Vice President (Power, M Damodaran Independent Director 0.44 6.61 2.33 Vikram Singh Mehta Independent Director 0.40 6.11 (16.67) Sushobhan Sarker^ Nominee of Life Insurance 0.28 4.31 (9.68) The siting fees were Corporation of India Adil Zainulbhai Akhilesh Gupta Bahram N Vakil Independent Director 0.49 7.44 16.98 152.66 9.39 Independent Director 32.12 Profit before tax decreased by 0.2% and Profit after tax 27.26 increased by 5.0% in the financial year 2015-16 Heavy Engineering & Defence) D K Sen Whole-time Director & Senior 3.29 50.01 Executive Vice President (Infrastructure) M V Satish Whole-time Director & Senior 1.17 17.74 ** Executive Vice President (Buildings, Minerals & Metals) M M Chitale Independent Director 0.52 7.90 15.56 Subhodh Bhargava 0.62 51.90 Direct 6.33 45.58 (Ahmednagar, Nagpur), Orissa (Jharsuguda), Rajasthan, Tamil Nadu (Dindigul, Thoothukudi), Uttarakhand (Rudra Prayag, Neemuch) 17 **Integrated Community Development Programme Community Rajasthan (Rajsamand, Udaipur), 651.00 643.98 83.46 Development Maharashtra (Ahmednagar), Tamil 727.44 Implementing agencies Nadu (Coimbatore) 18 Development of gardens and maintenance of public spaces Environment Karnataka (Bangalore), Maharashtra 319.55 159.26 21.10 180.36 Direct (Ahmednagar, Nashik, Mumbai, Thane), Gujarat (Surat, Vadodara) 99 (Benguluru), Maharashtra S. No. CSR Project or activity identified Sector in (Jamshedpur), Karnataka 130.34 Direct 1.65 Gujarat (Vadodara), Faridabad, Orissa (Kansbhal, Sundagarh) 11.23 Implementing agencies 15 Skill building for differntly abled Persons with disabilities Andhra Pradesh (Visakahapatnam), 67.39 61.07 8.34 Gujarat (Surat), Faridabad, 69.41 Implementing agencies Jharkhand (East Singbhum, Serikela, Kharswan), Karnataka (Bangalore), Kerala (Ernakulam), Madhya Pradesh (Khandwa), New Delhi (Faridabad), Orissa (Kansbhal, Puri), Rajasthan (Jaipur), Tamil Nadu (Chennai, Coimbatore), Uttar Pradesh (Lucknow), West Bengal (Kolkata) 16 Basic infrastructure support in the community (Water, Health, Sanitation, roads etc.) Community Andhra Pradesh (Visakhapatnam), Development Gujarat (Kutch, Vadodara, 134.42 114.99 15.35 Surendranagar), Jharkhand Projects or Programes which the 1. Local Area or other Ahmedabad), Karnataka (Bangalore), Kerala (Ernakulam), Madhya Pradesh (Udaipura, Khandwa, Bhopal), Maharashtra (Mumbai, Ahmednagar, Palgarh, Pune, Nagpur), New Delhi, Orissa (Bhubaneswar), Rajasthan (Jaipur, Baran), Tamil Nadu (Kalpakkam, Chennai, Cuddalore), Uttar Pradesh (Lucknow) Environment Jharkhand (East Singbhum, Serikela, 20 Awareness programmes- environment, energy Kharswan), Tamil Nadu (Chennai), conservation, road safety Maharashtra (Nagpur) 21 Employee Volunteering Employee volunteering PAN India 22 Donation to Prime Minister's Fund for Swachh Bharat Abhiyan 100 Total 1.15 1.04 0.54 1.58 Implementing agencies 47.31 Surendranagar, Jamnagar, Gujarat (Narmada, Kutch, (Hyderabad, Visakahapatnam), 71.22 Direct project is covered 2. Specify the state and district where projects or program was undertaken (budget) project or projects or programe programs wise (In (In Lakh) Amount 11.35 Direct outlay expenditure (In Lakh) on Cumulative Amount expenditure spent: direct upto the or through reporting implementing period (In agency Lakh) Lakh) 19 Tree plantation and environment Environment Andhra Pradesh protection 75.78 62.67 8.55 Overhead SUBSIDIARY 94.96 Section 2(87)(ii) 75926562 0.00 0.00 0 0 0 0.00 0 0 0 d) Banks/Fl 0.00 0.00 0.00 0.00 00 0 0 0.00 0 0 0.00 e) Any Other.... 00 0 0 0.00 0 0 0 Total shareholding of 0.00 0.00 0 0 0 0.00 0 0 0 Sub-total (A)(2):- 0.00 0.00 0 0 0 0.00 0 0 0 Bodies Corp. 0 0.00 0 0.00 0.00 0 0 0 0.00 0 000 0 Sub-total (A)(1):- 0 f) Any Other.... 0 e) Banks/Fl 0.00 0.00 0 0 0 0 0.00 0.00 c) 0 0 b) Other Individuals 0.00 0.00 0 0 0 0.00 0 0 0 a) NRIs -Individuals (2) Foreign 0.00 0.00 0 0 0 0.00 0 0 0 0 0.00 0.00 0.00 0 0 0 0.00 0 0 0 Capital Funds h) Foreign Venture -5.92 10.88 40,068 101,374,234 16.80 101,334,166 40,068 156,172,982 156,132,914 g) Flls -0.19 4.41 0 41,071,676 Sub-total (B)(1):- 2. Non-Institutions 491,546,293 88,583 491,634,876 Individual b) Individuals 0.00 0.00 3,432 -0.91 7.12 305,763 66,300,865 3,432 0 65,995,102 41,071,676 8.03 0.00 304,497 74,650,532 3,432 0 ii) Overseas 74,346,035 i) Indian a) Bodies Corp. -3.75 49.14 84,983 457,718,999 52.89 457,634,016 3,432 0 4.59 42,708,526 609,148 0 609,148 c) Central Govt -0.43 25.46 0.17 8.24 3,738 76,774,808 41,177 237,183,566 25.58 237,142,389 43,205 237,739,047 237,695,842 b) Banks/Fl 5.85 76,771,070 5,310 54,405,173 54,399,863 a) Mutual Funds 1. Institutions B. Public Shareholding Promoter (A)(A)(1)+(A)(2) 0.00 0.07 1,314,715 0 1,314,715 0.14 0.08 Insurance Companies f) 0.00 0.00 0 0 0 0.00 0 0 0 42,708,526 0 0.00 0.00 0 0 0 0.00 0 0 0 d) State Govt(s) e) Venture Capital Funds 0.00 0 0 1 RECHTSANWALTE GMBH, KARLSPLATZ, 3/1, VIENNA c/o, OBERHAMMER, N M MARG, MUMBAI, MAHARASHTRA - 400001 L&T HOUSE, BALLARD ESTATE, L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 AUSTRIA GMBH LLC L&T INFOTECH 124 L&T POWERGEN LIMITED 123 L&T NATURAL RESOURCES LIMITED 122 SOCIEDAD LIMITADA L&T INFORMATION TECHNOLOGY SPAIN 121 B87472072 C/JOSE ABASCAL, 56 2ND FLOOR, MADRID CHENNAI 600089 MOUNT POONAMALLE ROAD, MANAPAKKAM, L&T CONSTRUCTION COMPLEX, FEEDBACK INFRAPRIVATE LIMITED Holding/ Subsidiary/ 3 INDUSTRIES LIMITED GUJARAT LEATHER 2 16.89 Section 2(6) ASSOCIATE U74899DL1990PTC040630 311, 3RD FLOOR, VARDHAMAN PLAZA, POCKET 7, PLOT NO. 6, SECTOR 12, DWARKA, NEW DELHI-110078 94.96 Section 2(87)(ii) SUBSIDIARY GROUND FLOOR, TC 1 BUILDING, U74999TN2016PTC103769 FN435491D SUBSIDIARY U40103MH2010PLC209313 100.00 Section 2(87)(ii) SUBSIDIARY U74900MH2008PLC182601 SUBSIDIARY 100.00 Section 2(87)(ii) % of Shares Applicable Section held SUBSIDIARY Associate 100.00 Section 2(87)(ii) INDIRAN LIMITED INFRASTRUCTURE 775268-H ACN006140512 100.00 Section 2(87)(ii) SUBSIDIARY U72200KA1995PTC018112 100.00 Section 2(87)(ii) SUBSIDIARY 2159287 75.50 Section 2(87)(ii) SUBSIDIARY U13203OR1999PTC005673 95.00 Section 2(87)(ii) SUBSIDIARY AHU-0110258.AH.01.09 UNIT C508, BLOCK C, KELANA SQUARE, JALAN SS7/26, KELANA JAYA 47301, PETALING JAYA SELANGOR DARUL EHSAN, MALAYSIA 31, KITCHEN ROAD, DANDENONG, VICTORIA 3175, AUSTRALIA THE WOODROPE BUILDING, WOODROLFE ROAD, TOLLESBURY, MALDONESSEX CM9 8SE, UNITED KINGDOM L&T HOUSE, 38, CUBBON ROAD, BANGALORE, KARNATAKA-560001 ANNAPURNA COMPLEX, 559, LEWIS ROAD, BHUBANESWAR, ODIHSA-751014 THE CITY TOWER, 12TH FLOOR, UNIT 1-N, J1.MH., THAMRIN NO.81, CENTRAL JAKARTA, INDONESIA 10310 TAMCO ELECTRICAL INDUSTRIES AUSTRALIA PTY LTD TAMCO SWITCHGEAR (MALAYSIA) SDN BHD 117 SUBSIDIARY 100.00 Section 2(87)(ii) SUBSIDIARY 100.00 Section 2(87)(ii) MARINE Company 120 CIN/GLN Address of the Company S.No Name of the 114 113 100.00 Section 2(87)(ii) SUBSIDIARY DEVELOPER PRIVATE CL2106 HOLDINGS LIMITED L&T GLOBAL 119 INDUSTRIAL ESTATE, HOLLOWAY ROAD, MALDON, ESSEX, C9 4ER, UNITED KINGDOM 100.00 Section 2(87)(ii) SUBSIDIARY 01201246 ENDEAVOUR HOUSE, BENTALLS THALEST LIMITED 118 UNIT 7, LEVEL 3, GATE PRECINCT, BUILDING 2, DUBAI INTERNATIONAL FINANCIAL CENTRE, P.O BOX 63671, DUBAI, UAE ☐ m ENGINEERING POST BOX 1267, NEHA APARTMENT, BAZAAR-E- 0 0.00 0 0 0 a) Individual/HUF (1) Indian Demat % of Total Shares Total % Change during the year % of Total Shares Total Physical No. of Shares held at the end of the year LARSEN & TOUBRO Physical Demat A. Promoters No. of Shares held at the beginning of the year Category-wise Share Holding Category of Shareholders 0 0 0.00 0.00 0 d) Bodies Corp. 0.00 0.00 0 0 0 0.00 0 0 i) 0 0.00 0.00 0 0 0 0.00 0 0 0 b) Central Govt c) State Govt (s) NO 3001, GIDC INDUSTRIAL ESTATE, ANKLESHWAR, GUJARAT IV. SHARE HOLDING PATTERN 23.87 Section 2(6) P. O. BOX 44357, DUBAI, UNITED 600640 ARAB EMIRATES L&T CAMP FACILITIES LLC 5 STREET, KOLKATA 700016 KOHINOOR BUILDING, 105, PARK SEAPORTS (HALDIA) PRIVATE LIMITED 21.74 Section 2(6) ASSOCIATE U45205WB1999PTC090733 FLAT NO. 27, 5TH FLOOR, INTERNATIONAL 4 SYSTEMS KISH (LLC) DANOOS, KISH ISLAND, IRAN PROJECTS AND 50.00 Section 2(6) ASSOCIATE 3744 50.00 Section 2(6) ASSOCIATE U18104GJ1978SGC003134 ASSOCIATE 49.00 Section 2(6) 6 L&T-CHIYODA ASSOCIATE 402, 36 TURNER ROAD, BANDRA U65923MH2007PTC168721 WEST, MUMBAI - 400050 INDIA PRIVATE GRAMEEN CAPITAL 9 42.85 Section 2(6) ASSOCIATE U02520TZ1989PTC002458 NO. 58-C, SIPCOT INDUSTRIAL COMPLEX, HOSUR, TAMIL NADU 635126 8 LIMITED 24.50 Section 2(6) 28634 P. O. BOX 1362, DOHA, QATAR L&T HOUSE, BALLARD ESTATE, NM MARG, MUMBAI, MAHARASHTRA - 400001 MAGTORQ PRIVATE LIMITED LARSEN & TOUBRO QATAR & HBK CONTRACTING LLC 7 LIMITED 50.00 Section 2(6) ASSOCIATE U28920MH1994PLC083035 ASSOCIATE 163,550,672 19,885,971 183,436,643 19.73 182,938,555 18,745,440 201,683,995 2 L&T EMPLOYEES WELFARE FOUNDATION Date wise Increase / Decrease in Share holding during the year specifying the reasons for increase/decrease (e.g. allotment /transfer/bonus/ sweat etc.) year At the beginning of the year 29.01.2016 31.03.2016 111606174 12.01 3146107 114752281 12.32 114752281 12.32 At the end of the year At the beginning of the year 75925962 8.17 3 ADMINISTRATOR OF THE SPECIFIED UNDERTAKING OFTHE UNIT TRUST OF INDIA Date wise Increase / Decrease 10.04.2015 16.44 153172007 At the end of the 16.44 (303305) 154120373 16.57 allotment /transfer/bonus/ 26.06.2015 (584014) 153536359 16.50 sweat etc.) 30.06.2015 (114510) in Share holding during the 153421849 10.07.2015 (138774) 153283075 16.48 17.07.2015 (111068) 153172007 16.46 31.03.2016 153172007 16.49 19.06.2015 17.04.2015 22.05.2015 75926562 8.15 117 118 SI. 12 Name of shareholer No. Date of transaction Shareholding at the beginning (01.04.2015) / end of the year 31.03.2016 No. of shares % of total Shares of the In crease / Decrease in No. of shares Company shareholding Cumulative Shareholding during the year (01.04.2015 to 31.03.2016) % of total Shares of the Company 4 8.15 75926562 8.16 500 for increase/decrease (e.g. 29.05.2015 allotment /transfer/bonus/ 05.06.2015 sweat etc.) 31.03.2016 At the end of the year 114752281 12.32 year specifying the reasons 600 8.17 (600) 75925962 8.16 600 75926562 8.16 (500) 75926062 8.16 75926562 HDFC TRUSTEE COMPANY LIMITED-HDFC EQUITY FUND for increase/decrease (e.g. 154423678 to total shares Shareholding No. of Shares at the end of the year % of total Shares of the company NIL % change %of Shares Pledged/ encumbered to total shares in share holding during the year NIL (iii) Change in Promoters' Shareholding (please specify, if there is no change) SI. No. Shareholding at the beginning of the NIL Cumulative Shareholding during the year year No. of shares % of total shares of the Company No. of shares % of total shares of the Company NIL Total 4 3 (B)=(B)(1)+ (B)(2) C. Shares held by 21,266,473 0 21,266,473 2.29 19,213,684 0 19,213,684 2.06 -0.23 Custodian for GDRs & ADRs Grand Total (A+B+C) At the beginning of the year Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/ 908,791,211 20,770,850 929,562,061 19,605,064 931,478,845 100.00 0.00 (ii) Shareholding of Promoters SI Shareholders Name Shareholding at the beginning of the No. of Shares % of total Shares of the company year %of Shares Pledged/ encumbered 1 2 100.00 911,873,781 16.60 transfer/bonus/sweat equity etc): NIL 17.04.2015 (127466) 155114819 16.68 22.05.2015 (60000) 155054819 16.67 29.05.2015 Date wise Increase / Decrease (75000) 154979819 16.66 in Share holding during the 05.06.2015 (163000) 154816819 16.64 year specifying the reasons 12.06.2015 (393141) 16.69 (280000) 155242285 10.04.2015 of the year NIL NIL NIL LARSEN & TOUBRO (iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs): SI. Name of shareholer No. Date of transaction Shareholding at the beginning (01.04.2015) / end At the End of the year of the year 31.03.2016 No. of shares % of total Shares of the 1 LIFE INSURANCE CORPORATION OF INDIA At the beginning 155522285 Company 16.73 In crease / Decrease in shareholding No. of shares % of total Shares of the Company Cumulative Shareholding during the year (01.04.2015 to 31.03.2016) 116 At the beginning 2.07 0 0.00 0 0.31 12.32 17,766 114,752,281 0.11 0.94 8,781,318 426,504 0.83 8,354,814 12.01 114,734,515 447,627 7,735,698 17,766 111,606,174 0 0 vi) Qualified Foreign 111,588,408 v) Trust 7,288,071 iv) Non-Residents 2.95 5.37 0 49,988,226 0 0 0.00 0.00 30.09.2015 187625 20139476 2.16 09.10.2015 (96194) 20043282 2.15 16.10.2015 (4906) 0.00 20038376 23.10.2015 0.23 97.94 3.97 48.80 44.82 435,026,081 19,520,081 454,546,162 97.71 892,660,097 19,605,064 912,265,161 395,978,445 20,682,267 416,660,712 887,524,738 20,770,850 908,295,588 Total Public Shareholding Sub-total (B)(2):- Investor 2.15 2.14 0.04 20,826 Total % Change during the No. of Shares held at the end of the year 11,172,991 0 11,172,991 1.50 0 13,911,234 13,911,234 Physical Demat Total % of Total Shares Physical Demat No. of Shares held at the beginning of the year ii) Individual shareholders holding nominal share capital in excess of 1 lakh Category of Shareholders 116 115 1.92 21.65 % of Total year Shares 1.20 392,713 49,988,226 2.41 0 22,419,444 0.04 385,608 20,826 364,782 22,419,444 iii) Foreign Portfolio Investors ii) Foreign Nationals -0.11 413,539 0.16 350 1,449,165 0.27 2,511,947 2,148 2,509,799 Directors & Relatives i) c) Others (specify) -0.30 1,449,515 19251170 19951851 25.09.2015 1073 20057774 2.16 29.05.2015 1883 20059657 2.16 05.06.2015 28 20059685 2.16 12.06.2015 25865 20085550 2.16 19.06.2015 1957 20087507 2.16 26.06.2015 31864 22.05.2015 2.16 20056701 159990 of the year 10.04.2015 376784 19627954 2.11 17.04.2015 (50000) 19577954 2.11 24.04.2015 20119371 2165 2.11 01.05.2015 296592 19876711 2.14 08.05.2015 20000 19896711 2.14 15.05.2015 19580119 36 2.16 15000 2.13 year specifying the reasons 28.08.2015 (1279) 19784436 2.13 for increase/decrease (e.g. 04.09.2015 20352 19804788 2.13 allotment /transfer/bonus/ sweat etc.) 11.09.2015 144729 19949517 2.14 18.09.2015 2298 19951815 2.14 19785715 (36625) 14.08.2015 in Share holding during the 20134371 2.16 10.07.2015 15058 20149429 2.17 17.07.2015 (174125) 19975304 2.15 30.06.2015 24.07.2015 19879246 2.14 31.07.2015 (50000) 19829246 2.13 Date wise Increase / Decrease 07.08.2015 (6906) 19822340 2.13 (96058) INFOTECH PRIVATE LIMITED 94.96 Section 2(87)(ii) 115 U45206TN2013PLC093395 MOUNT POONAMALLE L&T SAMBALPUR - 65 CHENNAI-600089 MANAPAKKAM, TOLLWAY LIMITED ROAD, POST BOX NO 979, SUBSIDIARY 97.45 Section 2(87)(ii) U45203TN2010PLC074501 MOUNT POONAMALLE L&T SAMAKHIALI GANDHIDHAM 64 100.00 Section 2(87)(ii) SUBSIDIARY U74200MH2007PLC176358 L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 SUBSIDIARY L&T REALTY LIMITED 97.45 Section 2(87)(ii) ROAD, POST BOX NO 979, 60.00 Section 2(87)(ii) SUBSIDIARY U61100TN2010PTC077217 MOUNT POONAMALLE L&T SAPURA 67 CHENNAI 600089 MANAPAKKAM, ROURKELA TOLLWAY LIMITED ROAD, POST BOX NO 979, 60.00 Section 2(87)(ii) SUBSIDIARY U11200TN2010PTC077214 MOUNT POONAMALLE L&T SAPURA 66 CHENNAI-600089 MANAPAKKAM, OFFSHORE PRIVATE LIMITED SHIPPING PRIVATE LIMITED 63 SUBSIDIARY N M MARG, MUMBAI, DEVELOPMENT 100.00 Section 2(87)(ii) SUBSIDIARY U40101MH2007PLC174071 L&T HOUSE, BALLARD ESTATE, L&T POWER 59 LIMITED CHENNAI 600089 LIMITED ROAD, POST BOX NO 979, KACHCHIGARH 97.45 Section 2(87)(ii) SUBSIDIARY U45203TN2008PLC067551 MOUNT POONAMALLE L&T PORT MANAPAKKAM, 100.00 Section 2(87)(ii) MAHARASHTRA - 400001 L&T POWER LIMITED 02 01 05714 EXECUTIVE SUITE, P.O.BOX 121576, SAIF ZONE,SHARJAH, U.A.E. L&T REALTY FZE 62 CHENNAI-600089 97.45 Section 2(87)(ii) SPECTRUM U45203TN2008PLC069184 60 MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, L&T RAJKOT- 61 MAHARASHTRA - 400001 N M MARG, MUMBAI, 100.00 Section 2(87)(ii) SUBSIDIARY U40100MH2006PLC160413 L&T HOUSE, BALLARD ESTATE, VADINAR TOLLWAY LIMITED 58 ROAD, POST BOX NO 979, CHENNAI-600089 SUBSIDIARY U72900MH2012PLC232169 74.00 Section 2(87)(ii) % of Shares Applicable Section held SUBSIDIARY Holding/ Subsidiary/ Associate STEELS AND HEAVY U27109MH2009PTC193699 100.00 Section 2(87)(ii) L&T SPECIAL Company CIN/GLN Address of the Company Name of the S. No 200, WEST ADAMS STREET, CHICAGO, ILLINOIS-60606 N M MARG, MUMBAI, MAHARASHTRA - 400001 L&T HOUSE, BALLARD ESTATE, 72 N M MARG, MUMBAI, MAHARASHTRA - 400001 0479598-9 100.00 Section 2(87)(ii) MANAPAKKAM, INFRASTRUCTURE ROAD, POST BOX NO 979, TRANSPORTATION 98.12 Section 2(87)(ii) SUBSIDIARY U45203TN1997PLC039102 74.00 Section 2(87)(ii) SUBSIDIARY SUBSIDIARY RR V TOWER, 6TH FLOOR, 33A, DEVELOPED PLOTS, SIDCO INDUSTRIAL ESTATE, GUINDY, CHENNAI-600032 MOUNT POONAMALLE SERVICES PRIVATE LIMITED TECHNOLOGY L&T THALES L&T 76 75 U72200TN2006PTC059421 MANAPAKKAM, L&T HOUSE, BALLARD ESTATE, SERVICES LLC 70 CHENNAI-600089 BUILDING, L&T CONSTRUCTION CAMPUS, MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, 97.00 Section 2(87)(ii) SUBSIDIARY U74900TN2007PLC065356 GROUND FLOOR, TC-1 L&T SHIPBUILDING LIMITED L&T SOLAR LIMITED 69 N M MARG, MUMBAI, 100.00 Section 2(87)(ii) SUBSIDIARY U45203MH2008PLC180029 L&T HOUSE, BALLARD ESTATE, L&T SEAWOODS LIMITED 88 68 MAHARASHTRA - 400001 FORGINGS PRIVATE LIMITED L&T HOUSE, BALLARD ESTATE, SUBSIDIARY L&T TECHNOLOGY 74 L&T TECHNOLOGY SERVICES LIMITED 73 LARSEN & TOUBRO CHENNAI-600089 MANAPAKKAM, ROAD, POST BOX NO 979, U40109MH2010PLC205058 PROJECTS LIMITED SUBSIDIARY U70101TN2006PLC058866 MOUNT POONAMALLE L&T SOUTH CITY 71 MAHARASHTRA - 400001 N M MARG, MUMBAI, 100.00 Section 2(87)(ii) 51.00 Section 2(87)(ii) LIMITED CHENNAI-600089 LIMITED 100.00 Section 2(87)(ii) SUBSIDIARY U74140TN 1998PLC039864 MOUNT POONAMALLE - 600089 L&T 46 PROJECTS LIMITED INFRASTRUCTURE ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI SUBSIDIARY U65993TN2001PLC046691 MOUNT POONAMALLE 93.44 Section 2(87)(ii) SUBSIDIARY N(PVS)45877 NO.5 - 4/1, 19TH LANE, COLOMBO - 03, SRI LANKA 3B, LAXMI TOWERS, C - 25, 'G' BLOCK, BANDRA - KURLA COMPLEX, BANDRA (EAST), MUMBAI-400051 97.45 Section 2(87)(ii) DEVELOPMENT ENGINEERING MANAPAKKAM, U45203TN2006PLC058735 MOUNT POONAMALLE L&T INTERSTATE 48 CHENNAI-600089 LIMITED MANAPAKKAM, FINANCE COMPANY ROAD, POST BOX NO 979, ROAD, POST BOX NO 979, 66.71 Section 2(87)(ii) SUBSIDIARY U67190TN2006PLC059527 MOUNT POONAMALLE L&T 47 CHENNAI-600089 LIMITED INFRASTRUCTURE SUBSIDIARY INFRASTRUCTURE 45 3B, LAXMI TOWERS, C - 25, 'G' BLOCK, BANDRA - KURLA COMPLEX, BANDRA (EAST), MUMBAI-400051 94.96 Section 2(87)(ii) % of Shares Applicable Section held LARSEN & TOUBRO FUND LIMITED 2810, MATHESON BLVD EAST SUITE 500, MISSISSAUGA, ONL4W 4X7 CANADA L&T INFRA DEBT FINANCIAL SERVICES TECHNOLOGIES INC U67100MH2013PLC241104 L&T INFOTECH SUBSIDIARY 770556-5 40 Holding/ Subsidiary/ Associate CIN/GLN Address of the Company Name of the Company S. No 41 L&T SUBSIDIARY 3B, LAXMI TOWERS, C - 25, 'G' BLOCK, BANDRA - KURLA COMPLEX, BANDRA (EAST), MUMBAI-400051 INFRASTRUCTURE DEVELOPMENT PROJECTS LANKA (PRIVATE) LIMITED L&T 44 PRIVATE LIMITED PARTNERS TRUSTEE INVESTMENT L&T INFRA PARTNERS ADVISORY PRIVATE LIMITED 66.71 Section 2(87)(ii) INVESTMENT 43 42 66.71 Section 2(87)(ii) SUBSIDIARY U65900MH2011PTC220896 66.71 Section 2(87)(ii) SUBSIDIARY U67190MH2011PTC218046 L&T INFRA MANAPAKKAM, 97.45 Section 2(87)(ii) ROAD, POST BOX NO 979, S.No Name of the 110 109 66.71 Section 2(87)(ii) SUBSIDIARY U65993MH1996PLC211198 65.00 Section 2(87)(ii) SUBSIDIARY Address of the Company 1001910 SUBSIDIARY U45300AP2010PLC070121 97.45 Section 2(87)(ii) SUBSIDIARY U45203TN2010PLC075446 L&T HOUSE, BALLARD ESTATE, NM MARG, MUMBAI, MAHARASHTRA - 400001 PO BOX 236, P.C 322, FALAZ AL QABAIL, SOHAR, SULTANATE OF OMAN 1-Q4-A1, CYBER TOWER, HITEC CITY, MADHAPUR, HYDERABAD, ANDHRA PRADESH-500081 97.48 Section 2(87)(ii) ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI 600089 CIN/GLN Holding/ Subsidiary/ ROAD, POST BOX NO 979, ELEVATED CORRIDOR 97.45 Section 2(87)(ii) SUBSIDIARY U45203TN2005PLC056999 100.00 Section 2(87)(ii) MOUNT POONAMALLE L&T PANIPAT Company 57 601723 252E, MURI OKUNOLA STREET, VICTORIA ISLAND, LAGOS, NIGERIA LIMITED PROJECTS NIGERIA L&T OVERSEAS 56 Associate % of Shares Applicable Section held SUBSIDIARY ROAD CORRIDOR MOUNT POONAMALLE LLC L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 LIMITED MACHINERY PRIVATE L&T KOBELCO 50 MAHARASHTRA - 400001 LIMITED N M MARG, MUMBAI, U29253MH2010PTC210325 MANAGEMENT SUBSIDIARY U65991MH1996PLC229572 L&T HOUSE, BALLARD ESTATE, L&T INVESTMENT 49 CHENNAI-600089 MANAPAKKAM, LIMITED 66.71 Section 2(87)(ii) L&T MUTUAL FUND TRUSTEE LIMITED SUBSIDIARY 51 L&T MODULAR FABRICATION YARD LIMITED L&T METRO RAIL (HYDERABAD) TOLLWAY LIMITED L&T KRISHNAGIRI WALAJAHPET 55 54 54 51.00 Section 2(87)(ii) 53 CHENNAI 600089 MANAPAKKAM, 97.45 Section 2(87)(ii) SUBSIDIARY U45203TN2005PLC057930 MOUNT POONAMALLE ROAD, POST BOX NO 979, THOPUR TOLL ROAD LIMITED L&T KRISHNAGIRI 52 CHENNAI-600089 SUBSIDIARY L&T TRUSTEE 0067 OFFICE LOB 16 G 08, POST LARSEN & TOUBRO 98 1220, N. MARKET ST., SUITE 806, 270596763 WILMINGTON, DE 19801, USA INFOTECH LLC LARSEN & TOUBRO 97 MAHARASHTRA - 400001 N M MARG, MUMBAI, 94.96 Section 2(87)(ii) SUBSIDIARY U72900MH1996PLC104693 L&T HOUSE, BALLARD ESTATE, 96 96 94.96 Section 2(87)(ii) SUBSIDIARY HRB 15958 94.96 Section 2(87)(ii) SUBSIDIARY SUBSIDIARY 94.96 Section 2(87)(ii) SUBSIDIARY 100.00 Section 2(87)(ii) ZIP CODE-19711, U.S.A COUNTRY OF NEW CASTLE, G56 CENTRE, NEWARK CITY, 100.00 Section 2(87)(ii) SUBSIDIARY 113, BARKSDALE PROFESSIONAL 6 DEL.C 18-101 LARSEN & TOUBRO LLC 100 LIMITED LIABILITY COMPANY, WITH 1415026 CONTRACTING CONSTRUCTION 49.00 Section 2(87)(i) SUBSIDIARY 117668 PLOT NO. 3, BUILDING NO.1, SHARQ, KUWAIT TOUBRO KUWAIT LARSEN & 99 BOX 41558, HAMRIYAH FREE ZONE, SHARJAH, UNITED ARAB EMIRATES INTERNATIONAL FZE GENERAL EURO-ASIA BUSINESS CENTRE, MESSE-ALLEE 2, D-04356, LEIPZIG, GERMANY 2810, MATHESON BLVD EAST SUITE 500, MISSISSAUGA, ONL4W 4X7 CANADA LARSEN & TOUBRO INFOTECH LIMITED 75.00 Section 2(87)(ii) SUBSIDIARY 2050055625 AL-TURKI BUILDING, KING KHALED STREET, P.O. BOX 91, DAMMAM ATCO SAUDIA LLC LARSEN & TOUBRO 90 30.00 Section 2(87)(i) SUBSIDIARY 390357-T 91 SUITE 702, 7TH FLOOR, WISMA HANGSAM, JALAN HANG LEKIR, 50000 KUALA LUMPUR, MALAYSIA 89 77 Holding/ Subsidiary/ Associate Company CIN/GLN Address of the Company S.No Name of the 112 111 100.00 Section 2(87)(ii) LARSEN & TOUBRO (EAST ASIA) SDN. BHD 101 LARSEN & TOUBRO P.O. BOX 1999, RUWI, POSTAL CODE 112, MUSCAT LARSEN & TOUBRO INFOTECH GMBH 95 LARSEN & TOUBRO INFOTECH CANADA LIMITED 94 LIMITED LLC 100.00 Section 2(87)(ii) SUBSIDIARY 2051053464 P.O. BOX 6391, AL KHOBAR 34423, KINGDOM OF SAUDI ARABIA HYDROCARBON INTERNATIONAL ELECTROMECH LLC LARSEN & TOUBRO 70.00 Section 2(87)(ii) SUBSIDIARY 1042928 P.O. BOX 281, POSTAL CODE 325, W LIWA, SULTANATE OF OMAN HEAVY ENGINEERING LLC LARSEN & TOUBRO 92 65.00 Section 2(87)(ii) SUBSIDIARY 1/04445/1 93 LARSEN & TOUBRO OMAN LLC P.O. 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LARSEN MOUNT POONAMALLE 112 SUBSIDIARY C2-18.177.HT.01.01.HT 94 JALAN RAYA PASAR SERANG, NO. 15, KANDANG RODA, CIKARANG BEKASI 17330, INDONESIA PT TAMCO INDONESIA 111 - 600089 MANAPAKKAM, CHENNAI ROAD, POST BOX NO 979, 72.77 Section 2(87)(ii) SUBSIDIARY 100.00 Section 2(87)(ii) SUBSIDIARY 2011/007226/07 SOUTH AFRICA (PTY) LIMITED INDUSTRIES LLC ASPHALT CONCRETE JEBEL ALI, DUBAI 49.00 Section 2(87)(i) SUBSIDIARY 583119 JEBEL ALI INDUSTRIAL AREA, LARSEN & TOUBRO READYMIX AND 103 DOHA, QATAR 104 JAIDAH FLYOVER, B RING ROAD, BLDG., MEZZANINE FLOOR, 49.00 Section 2(87)(i) SUBSIDIARY P.O. BOX 24399, SH. THAMOUR 27454 LARSEN & TOUBRO QATAR LLC 102 OMAN CODE 112, SULTANATE OF 65.00 Section 2(87)(ii) SUBSIDIARY AL-HANDASA AREA, NEAR 6TH FLOOR, 119 HERTZOG BOULEVARD, FORESHORE, CAPETOWN, LARSEN & TOUBRO P.O. BOX NO.20, RIYADH 11351, 1010154437 KINGDOM OF SAUDI ARABIA TOUBRO INFOTECH LARSEN AND 106 SOUTH AFRICA 4019 72.50 Section 2(87)(ii) SUBSIDIARY 2010/018159/07 2ND FLOOR, 4 PENCARROW CRESCENT, LA LUCIA RIDGE OFFICE ESTATE, LIMITED LARSEN & TOUBRO TANDD SA (PTY) SAUDI ARABIA LLC 105 Subsidiary/ Associate Holding/ CIN/GLN Address of the Company Name of the Company S. No LARSEN & TOUBRO 11351 100.00 Section 2(87)(ii) SUBSIDIARY % of Shares Applicable Section held U74210KA2004PLC035094 % of Shares Applicable Section held SUBSIDIARY ENGINEERING L&T-VALDEL 88 MAHARASHTRA - 400001 N M MARG, MUMBAI, LUNDY LIMITED 50.0001 Section 2(87)(ii) SUBSIDIARY U74210MH1995PLC088099 L&T HOUSE, BALLARD ESTATE, L&T-SARGENT & 87 MAHARASHTRA - 400001 LIMITED N M MARG, MUMBAI, SUBSIDIARY U31101MH2006PTC166541 L&T HOUSE, BALLARD ESTATE, MAHARASHTRA - 400001 N M MARG, MUMBAI, 51.00 Section 2(87)(ii) SUBSIDIARY U29119MH2006PTC165102 L&T HOUSE, BALLARD ESTATE, PRIVATE LIMITED L&T-MHPS TURBINE L&T-MHPS BOILERS PRIVATE LIMITED GENERATORS 51.00 Section 2(87)(ii) NO 19, PRIMROSE ROAD, BANGALORE, KARNATAKA 560025 295 SUBSIDIARY 100.00 Section 2(87)(ii) 79 2.24 20839283 34661 08.01.2016 2.23 20804622 85112 31.12.2015 2.22 20719510 301606 25.12.2015 2.19 20417904 127326 18.12.2015 2.18 20290578 9156 11.12.2015 2.18 20281422 829 04.12.2015 2.18 20280593 86 U31401UR2006PLC032329 85 CHENNAI-600089 U74999MH1961PLC012188 L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 L&T VALVES LIMITED 80 - 600089 ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI BHARUCH TOLLWAYS LIMITED 97.45 Section 2(87)(ii) SUBSIDIARY U45203TN2005PLC058417 MOUNT POONAMALLE L&T VADODARA 20280298 SUBSIDIARY 9915 2.15 30.10.2015 157151 20205442 2.17 06.11.2015 69500 20274942 2.18 13.11.2015 1444 20276386 2.18 20048291 100.00 Section 2(87)(ii) 81 L&T VISION 97.45 Section 2(87)(ii) SUBSIDIARY U45203TN 1999PLC042518 MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, L&T WESTERN INDIA TOLLBRIDGE LIMITED 84 CHENNAI-600089 97.45 Section 2(87)(ii) SUBSIDIARY U45203TN2005PLC057931 MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, - 600089 L&T WESTERN ANDHRA TOLLWAYS LIMITED 83 66.71 Section 2(87)(ii) 27.11.2015 U70200TN2011PLC081100 MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI L&T VRINDAVAN PROPERTIES LIMITED 82 CHENNAI 600089 MANAPAKKAM, ROAD, POST BOX NO 979, VENTURES LIMITED 68.00 Section 2(87)(ii) 2.18 SUBSIDIARY U74210TN2006PLC061845 MOUNT POONAMALLE 55 20.11.2015 VILLAGE BEDUBAGAR, P.O. AUGUSTMUNI, RUDRAPRAYAG, UTTARAKHAND - 246421 HYDROPOWER LIMITED L&T HOUSE, BALLARD ESTATE, U74990MH2009PTC193936 SUBSIDIARY 100.00 Section 2(87)(ii) 3912 LIMITED N M MARG, MUMBAI, MAHARASHTRA - 400001 78 L&T UTTARANCHAL COMPANY PRIVATE 7803302 0.84 10.07.2015 (89098) 7714204 Date wise Increase / Decrease in Share holding during the 17.07.2015 53000 7767204 0.83 (50859) 7854161 0.84 (5722) 26.06.2015 0.84 7859883 25830 19.06.2015 0.84 7834053 (26044) 12.06.2015 0.84 30.06.2015 0.83 24.07.2015 10644 Date wise Increase / Decrease 04.12.2015 (119632) 8839282 7626636 32748 28.08.2015 0.82 7593888 34988 21.08.2015 0.81 year specifying the reasons for increase/decrease (e.g. allotment /transfer/bonus/ 7558900 14.08.2015 sweat etc.) 0.82 7613791 (184897) 07.08.2015 0.84 7798688 20840 31.07.2015 0.84 7777848 (54891) 7860097 0.85 05.06.2015 HDFC STANDARD LIFE INSURANCE COMPANY LIMITED 11 % of total to 31.03.2016) during the year (01.04.2015 Cumulative Shareholding 0.94 8758786 0.94 8758786 0.94 8758786 year At the beginning 7899 8750887 25000 0.94 8725887 24601 0.93 8701286 30000 Company shareholding Shares of the No. of shares 0.94 (67647) 7838382 of the year 7927744 16775 0.85 7910969 33058 15.05.2015 0.85 7877911 (8829) 08.05.2015 0.85 7886740 0.84 67355 0.84 7819385 (43560) 24.04.2015 0.85 7862945 20092 17.04.2015 0.84 7842853 4471 10.04.2015 01.05.2015 29.05.2015 (24900) 0.96 10 THE NEW INDIA ASSURANCE COMPANY LIMITED At the end of the year At the beginning 9062715 0.97 9012316 0.97 0.97 of the year (5000) 9007316 0.97 22.05.2015 (35000) 8972316 0.96 17.04.2015 9062715 31.03.2016 0.97 7973991 0.86 26.02.2016 (19788) 7954203 0.85 04.03.2016 (30245) 7923958 0.85 18.03.2016 526742 8450700 0.91 25.03.2016 612015 9062715 29.05.2015 (158500) (36000) 0.96 Date wise Increase / Decrease (40000) 8677316 0.93 in Share holding during the 24.07.2015 (2500) 10.07.2015 8674816 year specifying the reasons 31.07.2015 (2894) 8671922 0.93 for increase/decrease (e.g. 07.08.2015 0.93 0.94 8717316 (25000) 05.06.2015 (44691) 8891625 0.96 12.06.2015 (11809) 8879816 0.95 19.06.2015 (67500) 8812316 0.95 26.06.2015 (70000) 8742316 0.94 30.06.2015 8936316 05.02.2016 sweat etc.) allotment /transfer/bonus/ 0.93 8671286 12500 31.12.2015 0.93 8658786 28266 LARSEN & TOUBRO 11.12.2015 8630520 7500 04.12.2015 0.93 8623020 11234 27.11.2015 0.93 SI. 12 Name of shareholer 8647022 In crease/ Decrease in At the end of the sweat etc.) 31.03.2016 29.01.2016 for increase/decrease (e.g. allotment /transfer/bonus/ 22.01.2016 year specifying the reasons 15.01.2016 in Share holding during the 08.01.2016 Date wise Increase / Decrease of the year 31.03.2016 No. of shares % of total Shares of the Company Shareholding at the beginning (01.04.2015) / end Date of transaction No. 0.92 8611786 28000 20.11.2015 allotment /transfer/bonus/ 0.93 in Share holding during the 15.01.2016 10166 8849448 0.95 year specifying the reasons 22.01.2016 78043 8927491 0.96 for increase/decrease (e.g. 29.01.2016 (795000) 8132491 0.87 14.08.2015 0.95 (18833) 0.93 0.92 8583786 25000 13.11.2015 0.92 8558786 (36903) 18.09.2015 0.92 8595689 (20000) 11.09.2015 0.93 8615689 (12500) 21.08.2015 sweat etc.) 8628189 8958914 1.37 27.11.2015 1.33 year specifying the reasons 24.07.2015 (281269) 12046035 1.29 for increase/decrease (e.g. 07.08.2015 12327304 19921 1.30 allotment /transfer/bonus/ sweat etc.) 14.08.2015 10732 12076688 1.30 21.08.2015 12065956 13240 (617204) in Share holding during the 1.39 19.06.2015 68799 12994297 1.40 26.06.2015 (59918) 12934379 17.07.2015 1.39 (74925) 12859454 1.38 Date wise Increase / Decrease 10.07.2015 85054 12944508 1.39 30.06.2015 12089928 1.30 28.08.2015 11510436 1.24 16.10.2015 (256168) 11254268 1.21 23.10.2015 (8555) (47713) 11245713 30.10.2015 35401 11281114 1.21 06.11.2015 (5158) 11275956 1.21 1.21 09.10.2015 1.24 (14746) 11558149 205050 12294978 1.32 04.09.2015 (442863) 11852115 1.27 11.09.2015 117200 11969315 1.29 18.09.2015 (279020) 11690295 1.26 25.09.2015 (117400) 11572895 1.24 30.09.2015 12925498 (138719) 12.06.2015 1.40 04.03.2016 for increase/decrease (e.g. 2.18 20352291 381 26.02.2016 year specifying the reasons 2.18 173803 20351910 19.02.2016 in Share holding during the 2.20 20528633 171640 12.02.2016 Date wise Increase / Decrease 2.19 (176723) 20526094 2.20 allotment /transfer/bonus/ 20473057 31.03.2016 2.20 20473057 1397 31.03.2016 2.20 20471660 (6769) 25.03.2016 2.20 20478429 (49531) 18.03.2016 2.20 20527960 1866 11.03.2016 sweat etc.) 20356993 13.11.2015 (280181) 2.22 Name of shareholer 125 SI. LARSEN & TOUBRO 589488 13359207 1.44 22.05.2015 No. 33054 1.44 29.05.2015 (87326) 13304935 1.43 05.06.2015 (240718) 13064217 13392261 Date of transaction Shareholding at the beginning (01.04.2015) / end of the year 31.03.2016 No. of shares % of total Shares of the 20637174 1090 29.01.2016 2.22 20636084 25339 22.01.2016 2.21 20610745 (228538) 15.01.2016 Company shareholding Shares of the No. of shares % of total to 31.03.2016) Cumulative Shareholding during the year (01.04.2015 In crease/ Decrease in Company 05.02.2016 2.20 15639 1.21 344 6360874 0.68 allotment /transfer/bonus/ sweat etc.) 12.02.2016 Date of transaction (64519) 05.02.2016 6296355 19.02.2016 (71196) 6225159 0.67 26.02.2016 (312608) 5912551 0.63 0.68 04.03.2016 for increase/decrease (e.g. 6360530 0.71 08.01.2016 (300689) 6351459 0.68 Date wise Increase / Decrease 15.01.2016 39809 0.68 6391268 in Share holding during the 22.01.2016 (10738) 6380530 0.69 year specifying the reasons 29.01.2016 (20000) 0.69 (128085) 5784466 0.62 SBI LIFE INSURANCE CO. LTD year At the beginning 6831696 0.73 of the year 10.04.2015 33273 6864969 12 0.74 (356178) 6508791 0.70 24.04.2015 (85263) 6423528 0.69 01.05.2015 17.04.2015 0.62 5751166 At the end of the 11.03.2016 (34597) 5749869 0.62 18.03.2016 20901 5770770 0.62 25.03.2016 396 5771166 0.62 31.03.2016 (20000) 5751166 0.62 31.03.2016 5751166 0.62 6652148 200118 31.12.2015 0.69 0.80 09.10.2015 (9214) 7468556 0.80 16.10.2015 56 7468612 7477770 0.80 (3040) 7465572 0.80 30.10.2015 (19855) 7445717 0.80 06.11.2015 23.10.2015 (61640) 30.09.2015 0.81 121 122 12 SI. No. Name of shareholer (20742) 7605894 0.82 11.09.2015 33535 7639429 0.82 18.09.2015 (4865) 7634564 0.82 25.09.2015 (95154) 7539410 (67234) 11291595 7378483 125 15792 7288924 0.78 04.12.2015 231 7289155 0.78 11.12.2015 20.11.2015 (54096) 0.78 18.12.2015 (562878) 6672181 0.72 25.12.2015 (220151) 6452030 7235059 0.78 7273132 (105351) 126 12 SI. No. Name of shareholer Date of transaction Shareholding at the beginning (01.04.2015) / end of the year 31.03.2016 Cumulative Shareholding during the year (01.04.2015 to 31.03.2016) No. of shares % of total Shares of the In crease / Decrease in No. of shares % of total Shares of the Company shareholding Company 13.11.2015 0.79 5 GENERAL INSURANCE CORPORATION OF INDIA At the end of the year At the beginning 18.12.2015 1.25 11626550 481718 11.12.2015 1.20 11144832 166163 1059589 04.12.2015 10978669 57259 27.11.2015 1.17 10921410 588967 20.11.2015 1.11 1.18 10332443 12686139 25.12.2015 15944867 1147196 22.01.2016 1.59 14797671 1184520 15.01.2016 1.46 1.36 13613151 08.01.2016 1.41 13175942 489361 31.12.2015 1.36 12686581 442 437209 717308 13.11.2015 1.03 in Share holding during the 0.77 7171460 700157 30.09.2015 Date wise Increase / Decrease 0.70 6471303 09.10.2015 500714 0.64 5970589 507302 18.09.2015 0.59 5463287 48564 11.09.2015 25.09.2015 184262 7355722 0.79 9615135 2074733 06.11.2015 0.81 7540402 191738 30.10.2015 sweat etc.) allotment /transfer/bonus/ 0.79 7348664 (65288) 23.10.2015 for increase/decrease (e.g. 0.80 7413952 58230 16.10.2015 year specifying the reasons 1.71 29.01.2016 (137443) 15807424 1.57 14633805 1.57 14633805 1.57 14633805 28251 1.57 12360295 14605554 1.60 14905360 (318361) 1.63 15223721 (25772) Company shareholding (299806) 1.33 INSURANCE COMPANY LTD of the year 12769719 280765 08.05.2015 1.34 12488954 (80396) 01.05.2015 1.35 12569350 46581 24.04.2015 1.35 12522769 77739 17.04.2015 1.34 12445030 84735 10.04.2015 % of total Shares of the 0.58 No. of shares At the end of the year At the beginning 04.03.2016 1.64 15236398 (193838) 26.02.2016 1.66 15430236 190378 13095 19.02.2016 15239858 42273 12.02.2016 1.63 15197585 (609839) 05.02.2016 1.70 1.64 15249493 1.64 LARSEN & TOUBRO ICICI PRUDENTIAL LIFE 7 31.03.2016 31.03.2016 for increase/decrease (e.g. allotment /transfer/bonus/ sweat etc.) 25.03.2016 year specifying the reasons 18.03.2016 in Share holding during the 11.03.2016 Date wise Increase / Decrease Cumulative Shareholding during the year (01.04.2015 to 31.03.2016) of the year 31.03.2016 No. of shares % of total Shares of the Company Shareholding at the beginning (01.04.2015) / end Date of transaction No. Name of shareholer 12 SI. In crease/ Decrease in 5414723 351730 04.09.2015 17120000 31.03.2016 1.84 17120000 (40000) 31.03.2016 1.84 17160000 1.84 (60000) 1.85 17220000 (110000) 18.03.2016 1.86 17330000 (150000) 11.03.2016 25.03.2016 At the end of the 17120000 1.84 (52718) 24.04.2015 year specifying the reasons for increase/decrease (e.g. allotment /transfer/bonus/ 0.63 5899804 (100000) 17.04.2015 in Share holding during the Date wise Increase / Decrease 0.65 5999804 (318995) 10.04.2015 of the year 0.68 6318799 year At the beginning ICICI PRUDENTIAL VALUE DISCOVERY FUND 6 sweat etc.) 5847086 1.88 (10681) 16.10.2015 1.87 17381186 (48000) 26.06.2015 1.87 17429186 (50000) (31186) 19.06.2015 17479186 (2000) 12.06.2015 of the year 1.88 17481186 2.20 20473057 1.88 17350000 1.86 23.10.2015 04.03.2016 1.88 17490681 25000 26.02.2016 1.88 17465681 43751 19.02.2016 year specifying the reasons for increase/decrease (e.g. allotment /transfer/bonus/ 1.87 17421930 101930 12.02.2016 in Share holding during the Date wise Increase / Decrease 1.86 17320000 (30000) 17480000 (185554) 0.63 25261 17.07.2015 0.59 5469289 (40751) 10.07.2015 0.59 5510040 (76826) (118) 30.06.2015 5586866 (153248) 26.06.2015 0.62 5740114 (481943) 19.06.2015 0.67 0.60 5469171 0.59 31.07.2015 0.54 5062993 116122 28.08.2015 0.53 4946871 (102926) 21.08.2015 0.54 5049797 (379677) 14.08.2015 0.58 5429474 27303 07.08.2015 0.58 5402171 (67000) 6222057 01.05.2015 (15994) 0.67 Shareholding at the beginning (01.04.2015) / end Date of transaction Name of shareholer SI. No. 12 120 119 0.67 of the year 31.03.2016 6236962 15.05.2015 sweat etc.) 0.67 6201958 329611 08.05.2015 0.63 5872347 35004 No. of shares % of total Shares of the Company In crease/ Decrease in 6238051 (40844) 05.06.2015 0.68 6278895 41062 29.05.2015 0.67 6237833 871 22.05.2015 Company shareholding Shares of the % of total to 31.03.2016) during the year (01.04.2015 Cumulative Shareholding No. of shares 12.06.2015 (324689) 6237974 08.05.2015 340697 13592491 1.46 11.09.2015 (136564) 13455927 1.45 30.09.2015 04.09.2015 79455 1.45 09.10.2015 285710 13821092 1.49 23.10.2015 (4814) 13816278 13535382 1.49 1.42 231981 04.09.2015 year specifying the reasons 31.07.2015 (128114) 12906979 1.39 for increase/decrease (e.g. 07.08.2015 13251794 127183 1.40 allotment /transfer/bonus/ sweat etc.) 21.08.2015 (14349) 13019813 1.40 28.08.2015 13034162 SI. 125 Name of shareholer 13417793 1.44 13.11.2015 239574 13657367 1.47 20.11.2015 (7614) (10678) 13649753 27.11.2015 (145344) 13504409 1.45 04.12.2015 32751 13537160 1.46 1.47 06.11.2015 1.44 13428471 No. Date of transaction Shareholding at the beginning (01.04.2015) / end of the year 31.03.2016 No. of shares LARSEN & TOUBRO Cumulative Shareholding during the year (01.04.2015 to 31.03.2016) % of total % of total Shares of the In crease/ Decrease in No. of shares Shares of the Company shareholding Company 30.10.2015 (387807) 1.40 13035093 (36919) 24.07.2015 26.02.2016 39292 13742359 1.48 04.03.2016 15091 13757450 1.48 1.47 11.03.2016 13814356 1.48 18.03.2016 4140 13818496 1.48 25.03.2016 178629 56906 13703067 584132 19.02.2016 22.01.2016 218520 11845247 1.27 for increase/decrease (e.g. 29.01.2016 75309 11920556 1.28 allotment /transfer/bonus/ 05.02.2016 269028 12189584 1.31 sweat etc.) 12.02.2016 929351 13118935 1.41 13997125 11.12.2015 1.50 27276 08.05.2015 (58351) 12806186 1.38 05.06.2015 51385 12857571 1.38 1.38 12.06.2015 12851160 1.38 Date wise Increase / Decrease 10.07.2015 220852 13072012 1.41 in Share holding during the (6411) 12864537 (128461) 01.05.2015 14024401 1.51 At the end of the 14024401 1.51 8 GOVERNMENT OF SINGAPORE year At the beginning 12951043 1.39 of the year 10.04.2015 45835 12996878 1.40 24.04.2015 (3880) 12992998 1.40 31.03.2016 year specifying the reasons (21093) 1.45 13391 10124545 1.09 sweat etc.) 31.07.2015 (112500) 10012045 1.08 14.08.2015 24.07.2015 46178 1.08 28.08.2015 (38397) 10019826 1.08 04.09.2015 (124561) 9895265 10058223 1.06 allotment /transfer/bonus/ 10111154 Date wise Increase / Decrease 19.06.2015 8385 9989893 1.07 in Share holding during the 26.06.2015 (7696) 1.09 9982197 year specifying the reasons 10.07.2015 73899 10056096 1.08 for increase/decrease (e.g. 17.07.2015 55058 1.07 18.09.2015 (37435) 9857830 Company 16.10.2015 (69991) 9276865 1.00 30.10.2015 59334 9336199 shareholding 1.00 (32076) 9304123 15.05.2015 1.00 20.11.2015 (20520) 9283603 1.00 13.11.2015 % of total Shares of the Decrease in No. of shares 1.06 25.09.2015 (510974) 9346856 1.00 123 124 12 SI. No. Name of shareholer Date of transaction Shareholding at the beginning (01.04.2015) / end of the year 31.03.2016 Cumulative Shareholding during the year (01.04.2015 to 31.03.2016) No. of shares % of total Shares of the Company In crease / 1.07 9981508 90991 12.06.2015 1.44 sweat etc.) 29.01.2016 290947 13723401 1.48 05.02.2016 338508 13432454 14061909 12.02.2016 (51506) 14010403 1.51 19.02.2016 (132591) 13877812 1.49 1.51 113894 22.01.2016 allotment /transfer/bonus/ 18.12.2015 Date wise Increase / Decrease (247683) 13268384 1.43 in Share holding during the 31.12.2015 (25647) 13242737 1.42 year specifying the reasons 08.01.2016 80472 13323209 1.43 for increase/decrease (e.g. 15.01.2016 (4649) 13318560 1.43 04.03.2016 13516067 (77996) 1.48 10189138 1.10 24.04.2015 201200 10390338 1.12 22.05.2015 (42900) 7500 10347438 29.05.2015 (312595) 10034843 1.08 05.06.2015 (144326) 9890517 1.06 1.11 10.04.2015 of the year AUTHORITY -BEHAVE 11.03.2016 (63994) 13735822 1.48 31.03.2016 40645 13776467 1.48 31.03.2016 13776467 1.48 At the end of the 13776467 1.48 9 ABU DHAABI INVESTMENT year At the beginning 10181638 1.10 13799816 1.25 11626727 (16389) 0.56 09.10.2015 128475 5359494 0.58 16.10.2015 25360 5384854 5231019 0.58 127706 5512560 0.59 30.10.2015 (44914) 5467646 0.59 06.11.2015 23.10.2015 (123086) (5617) 0.56 44033 5714157 0.61 04.09.2015 (33394) 5680763 0.61 11.09.2015 30.09.2015 (259021) 0.58 18.09.2015 (22432) 5399310 0.58 25.09.2015 (162674) 5236636 5421742 5344560 0.57 13.11.2015 allotment /transfer/bonus/ 18.12.2015 66873 5720242 0.62 sweat etc.) 25.12.2015 1582 0.61 5721824 31.12.2015 9155 5730979 0.62 08.01.2016 11606 5742585 0.62 0.62 5653369 (24205) for increase/decrease (e.g. 207729 5552289 0.60 20.11.2015 59996 5612285 0.60 Date wise Increase / Decrease 27.11.2015 101350 5713635 0.61 in Share holding during the 04.12.2015 (36061) 5677574 0.61 year specifying the reasons 11.12.2015 28.08.2015 0.61 5670124 Shareholding at the beginning (01.04.2015) / end allotment /transfer/bonus/ 12.06.2015 50015 6134905 0.66 sweat etc.) 19.06.2015 (2731) 0.65 6132174 26.06.2015 7321 6139495 0.66 30.06.2015 (22) 6139473 0.66 0.66 6084890 245159 05.06.2015 (240790) 5997184 0.64 15.05.2015 Date wise Increase / Decrease (63089) 5934095 0.64 in Share holding during the 22.05.2015 24013 5958108 0.64 year specifying the reasons 29.05.2015 (118377) 5839731 0.63 for increase/decrease (e.g. 10.07.2015 15.01.2016 (22044) 0.66 No. of shares Shares of the Company shareholding Company 31.07.2015 (118251) 5811987 In crease/ Decrease in 0.62 (91140) 5720847 0.62 14.08.2015 (10108) 5710739 0.61 21.08.2015 07.08.2015 % of total Shares of the % of total to 31.03.2016) 17.07.2015 (64160) 6053269 0.65 24.07.2015 (123031) 5930238 0.64 SI. 125 Name of shareholer No. Date of transaction Shareholding at the beginning (01.04.2015) / end of the year 31.03.2016 No. of shares LARSEN & TOUBRO Cumulative Shareholding during the year (01.04.2015 6117429 111300 5853885 0.63 M. V. SATISH Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): At the End of the year 55,350 0.01 As on date of appointment as Director 30,703 0.00 Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): At the End of the year As on date of appointment as Director 0.00 42,875 0.00 At the End of the year 42,875 0.00 of the year 31.03.2016 Cumulative Shareholding 30,703 D. K. SEN Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): 0.01 At the beginning of the year 159,000 0.02 27.08.2015 (ESOP Exercise) 15,000 0.00 174,000 0.02 At the End of the year 174,000 0.02 SHAILENDRA N. ROY At the beginning of the year 45,350 0.00 27.08.2015 (ESOP Exercise) 10,000 0.00 55,350 during the year (01.04.2015 0.01 to 31.03.2016) % of total Shares of the Company 186257 11604260 1.25 25.12.2015 (6071) 11598189 1.25 31.12.2015 18.12.2015 99439 1.26 08.01.2016 Date wise Increase / Decrease (54512) 11643116 1.25 in Share holding during the 15.01.2016 11697628 1.23 11418003 (125) In crease / No. of shares Decrease in % of total Shares of the shareholding Company 20.11.2015 (18582) 11273013 1.21 27.11.2015 87324 11360337 1.22 04.12.2015 57791 11418128 1.23 11.12.2015 No. of shares 0.67 72,056 0.01 0.59 04.03.2016 (76907) 5373546 0.58 11.03.2016 (94109) 5279437 5450453 0.57 (84251) 5195186 0.56 25.03.2016 2411 5197597 0.56 31.03.2016 18.03.2016 (112230) 26.02.2016 0.60 22.01.2016 214513 6068398 0.65 29.01.2016 148777 6217175 0.67 05.02.2016 (284906) 5932269 0.64 12.02.2016 (310004) 5622265 0.60 19.02.2016 (59582) 5562683 (126238) At the End of the year 5071359 31.03.2016 5 6 A. M. NAIK Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): S. N. SUBRAHMANYAN Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): R. SHANKAR RAMAN Date wise Increase/Decrease 4 in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): 1,025,000 0.11 At the beginning of the year 27.08.2015 (ESOP Exercise) 37,056 0.00 35,000 0.00 72,056 At the end of the year 3 2 of the Company 5071359 0.54 At the end of the 5071359 0.54 year 127 128 (v) Shareholding of Directors and Key Managerial Personnel: SI. No. 1 For Each of the top 10 shareholders Shareholding at the beginning of the year No. of % of total shares Shares of the Company 0.11 At the Beginning of the year 1,025,000 Cumulative Shareholding during the year No. of shares % of total Shares 0.55 0.82 (40615) 2.992 17.96 3.37 1.82 9.90 6.90 4.40 2.11 0.73 47.19 others, specify... 5 Others 5.75 22.43 15.35 3.06 2.18 1.47 0.69 0.24 51.17 (Contribution to Provident Fund & Superannuation - as % of profit Fund) Commission 0.00 0.00 0.00 of salary under section 17(3) Income tax Act, 1961 2 Stock Option 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3 Sweat Equity 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4 0.00 Total (A) Ceiling as per MEHTA 1 Independent Directors Fee for attending board/ 0.065 0.063 0.060 0.050 0.055 0.045 0.338 committee meetings Commission 0.455 0.555 0.375 0.352 0.435 0.198 2.370 Others, please specify Total (1) 0.520 GUPTA 66.14 ZAINULBHAI ADIL 43.30 26.59 22.12 13.69 10.05 3.29 1.17 186.35 615.88 the Act Retired as a Director on September 30, 2015 ^ Retired as a Director on August 26, 2015 @Appointed as a Director w.e.f October 1, 2015 # Appointed as a Director w.e.f January 29, 2016 B. REMUNERATION TO OTHER DIRECTORS Sl. no. Particulars of Remuneration MM CHITALE SUBODH BHARGAVA DAMODARAN M LARSEN & TOUBRO Crore Name of Directors Total Amount VIKRAM SINGH SUSHOBHAN SARKER* AKHILESH 0.618 0.00 0.00 Indebtedness deposits financial year Addition Reduction 8417.70 8572.52 Exchange gain/(loss) (11.32) 19621.89 19270.17 (463.48) Interest accrued but not due 0.08 Net Change (143.42) 38.57 853.77 | | | | | Indebtedness at the end of the financial year i) Principal Amount 520.54 13087.75 ii) Interest due but not paid iii) Interest accrued but not due Total (i+ii+iii) Loans 188.03 13275.78 Total Unsecured excluding Unsecured Loans deposits 664.04 12272.55 ii) Interest due but not paid iii) Interest accrued but not due 8.62 Total (i+ii+iii) 672.66 149.46 12422.01 23,140 0.00 Deposits crore Total Indebtedness 12936.59 158.08 13094.67 131 Change in Indebtedness during the crore Secured Loans Deposits 0.00 VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL 8.70 529.24 0.44 0.15 31.64 provisions contained in section 17(1) of the Income-tax Act, 1961 (b) Value of 38.85 2.77 0.84 7.53 3.23 3.03 0.06 0.05 56.36 perquisites u/s 17(2) Income-tax Act, 1961 (c) Profits in lieu 0.00 0.00 0.00 0.00 1.15 REMUNERATION TO MANAGING DIRECTOR, WHOLE-TIME DIRECTORS AND/OR MANAGER: 1.38 8.58 132 28039.59 27842.69 (474.80) 38.65 710.35 13608.29 196.73 13805.02 A. Crore Sl. no. Particulars of Remuneration Name of MD/WTD/Manager Total AM NAIK K VENKATARAMANAN* MV KOTWAL^ SNR SHANKAR SUBRAHMANYAN RAMAN SHAILENDRA DK SEN@ MV SATISH# Amount ROY |1 Gross salary (a) Salary as per 3.58 14.73 1.63 0.435 0.402 0.490 C. OTHER OFFICERS IN DEFAULT Penalty Punishment Compounding Section of the Brief Companies Act Description 0.905 0.008 0.063 0.976 Details of Penalty/ Punishment/ Compounding fees imposed NIL NIL NIL Not Applicable 0.905 0.008 0.063 0.976 Authority [RD/ NCLT/COURT] Appeal made, if any (give Details) Compounding LARSEN & TOUBRO Punishment B. DIRECTORS 3 Sweat Equity 4 Commission - as % of profit - others, specify... 5 Others (Contribution to Provident Fund & Superannuation Fund) Total Crore Key Managerial Personnel CEO Company Secretary CFO Total (N. Hariharan) Not Applicable VII. PENALTIES/PUNISHMENT/COMPOUNDING OF OFFENCES: 134 Туре A. COMPANY Penalty Punishment Compounding Penalty Stock Option Management Discussion and Analysis 2015-16 The world economy is witnessing subdued corporate profits and investments, sluggish exports and manufacturing activities, and lower commodity prices. Credit growth is tepid and accommodative policies adopted by central The Indian E&C sector continues to remain highly pro-cyclical. On an aggregate level, some improvements have been witnessed after many quarters of stagnant or negative growth however, interest cost remains high. Government-led CAPEX has just started to pick up through disbursement of new orders. The construction industry appears to be at the far end of the recovery curve with delays for Government investments to trickle down as revenue. Competitive Landscape: Many companies have resorted to the sale of assets to tide over debt obligations. Overall, the industry CAPEX upturn continued to be elusive, given the existing overcapacity and inability to invest further. Overall competition among existing players has become more intensive. Going forward, there is a strong possibility of the CAPEX cycle recovering within 2-3 quarters. Companies with strong balance sheet and execution capabilities are likely to sail through the current scenario. Middle East: Middle East economies are posting lower growth figures. The sustained low and falling oil prices 137 have affected their economies adversely and continue to pose a challenging scenario. Almost all GCC countries are resorting to fiscal consolidation measures, trying to diversify the economy and increase their revenue streams. With oil fiscal breakeven point for balance budget for GCC countries like Saudi Arabia, Oman and UAE hovering around $90-$100/bbl, and Qatar and Kuwait between $50 $55/bbl, most of the Middle East countries are raising debt from domestic and international sources while preserving their currency peg. Geopolitical uncertainties continue to be the worry spot. However, most of the GCC players including Qatar, UAE, and Oman continue to pursue long term infrastructure development programs which augers well for the construction industry. DLF Mall of India, near Delhi. Global: Current trend shows that the global Construction Industry could continue to perform modestly. There have been marked cancellations of a number of projects in the Middle East owing to lower oil revenues. Global contractors are focusing outside home markets and consequently flocking to select growth markets, resulting in fierce competition. MENA order awards have seen only a moderate pick-up during Q1 of calendar 2016 Y-o-Y and some sluggishness remains. Impact of Digital technologies: Digital technologies have the potential to create new business models, dramatically alter business processes and improve operations. While this has been demonstrated and visible in many consumer facing sectors, the opportunities in construction projects and manufacturing are also significant. L&T proposes to implement digital technology solutions to make significant improvements in the key areas of work. The 'Digital Group' has been formed which will extensively focus on conceiving, initiating and implementing digital solutions to facilitate desired business results. Digital solutions are being developed for better project monitoring and controls by installing sensors and gateways on all the equipment deployed at project sites for tracking and monitoring the performance. Other major areas where digital solutions would be implemented are improvement in workmen productivity and safety through tagging and tracking, use of GPS and RFID for tracking to optimise logistics and material consumption, capturing of real-time data and visuals from the project sites through the use of mobile application and modern geospatial technologies including LiDAR & UAVs for surveys, analysis of data pulled in from all the initiatives into digital engine to deliver trend, actionable insights and forecast scenarios. The Group will continue to develop breakthrough solutions for business transformation with the evolving technologies and business processes. BUILDINGS AND FACTORIES Overview: L&T's Buildings & Factories (B&F) is a business vertical that has the requisite expertise to undertake Engineering, Procurement and Construction (EPC) of airports, IT parks, office buildings, institutional spaces, hospitals, stadiums, hotels, elite residential buildings, high rise structures, mass housing complexes, factory structures, cement plants and industrial warehouses. The business is pioneer in offering Total engineering solutions right from concept to commissioning across all the business lines cited above. The competitive advantages of the business include dedicated engineering design centres, competency cells, advanced formwork systems, mechanised project execution, wide network of consultants and vendors, digitised project control and a talented pool of employees. Business Environment: Year 2015-16 continued to be challenging for the construction industry. Many of the customers of the business deferred their investment plans due to the liquidity crunch and low demand in the realty sector. In the international arena, the dip in crude oil prices had a major impact on investments in GCC region. The slowdown in China due to excess inventory has 138 Infrastructure Business Scenario - India: Overview of World Economy: World economic output is recovering at a slow pace with the expectations of achieving sub 3% growth in calendar year 2016. Though emerging economies from Asia could continue to drive growth, there is a potential downside risk in terms of continued slow growth in China, weak domestic consumption in Japan, volatile currency movements and sustained level of low commodity prices. There is an uncertainty over the future growth prospects of commodity driven economies like Brazil and Russia. GCC countries are also facing fiscal weakening from low crude oil prices. Terminal 2, Mumbai International Airport - an iconic structure which integrates world-class design, architecture and operational efficiency. L&T has built several airports in India and in the Middle East. 136 bankers have not yet yielded the desired outcome. Prevailing fragile business sentiment is also adversely impacted by geopolitical tensions, protectionist policies adopted by some of the countries and climate & environmental concerns. Overview of Indian Economy: Amidst the low global growth environment, the Indian economy showed resilience and grew by 7.6% for the year 2015-16, driven I mainly by the service sector. Agriculture, Forestry and Fishing sector, which employs more than 50% of labour force of the country grew by 1.2%. Despite a muted agricultural growth occasioned by poor monsoons, India's domestic consumption remains strong on the back of favorable demographics. India has been a beneficiary of low oil prices which has helped to improve the Government's fiscal position and has improved the profitability of PSU oil & gas marketing companies. Decline in the oil prices also underpinned lower Inflation by offsetting higher food inflation caused by poor monsoon in the previous year. Consequently, RBI has reduced interest rates by 75 basis points during 2015-16 as compared to 50 basis points in 2014-15. The INR has depreciated against the US Dollar by around 6.5% (from a level of 62 to a level of 66) during 2015-16. Fll flows were net negative in Debt & Equity markets in 2015-16 echoing the anticipation of interest rate hikes by the US Fed. China's currency devaluation stance added to weakness of the INR. The fall in commodity prices has also had a negative impact on the Indian economy in terms of reduced profitability of metal and mining companies leading to financial stress of several businesses. This has resulted in a curtailment of fresh capital investments and some defaults in servicing debt obligations. Capital investment spending in India has been muted. There is a strong intent from the Government to push investments and growth. However, policy implementation is progressing at a measured pace. 2016-17 appears more promising mainly due to the expectations of a good monsoon and revival of the investment cycle led by favorable government policies such as increased budgetary allocations on infrastructure projects, pushing investment through cash rich PSUs, thrust on 'Make In India', increased drive on building a strong domestic manufacturing base for Defence equipment, emphasis on increasing investments in nuclear power, initiatives to revive weak state power distribution utilities through the 'UDAY' scheme, focus on build out of Smart Cities, 'Power for All' programs and robust plans to increase investments in metro rails and roads. It is also expected that the GST Bill will be passed in parliament in 2016-17. Business Scenario: The Company sees good prospects in the domestic economy with the thrust on infrastructure development. The Company has invested in building up the capacities over the years and has also mapped the emerging opportunities with the internal capabilities. Increase in the pace of implementation of various initiatives by the government and revival of the investment cycle would be 135 conducive for achieving the growth aspirations of the Company. The Company has identified key focus areas and strategic initiatives to make the most out of the upcoming opportunities. Major thrust areas are enumerated below: Key performance themes and focus areas for 2016-17. • Cost competitiveness through operational efficiency: The Company is analysing all the aspects of its operations to improve efficiency and competitiveness on an ongoing basis. Operational Excellence programs are underway for identified areas of cost reduction and productivity improvements without compromising on quality of products and services. Employees and subcontractors play a very vital role in Company's endeavor on performance improvements and are well sensitised, motivated and connected through a collaborative approach. Working capital reduction: Working capital requirements have been on the rise given the tight liquidity position and tepid business environment. Special efforts are being taken to release cash blocked in working capital. The aim is to make each project cash positive and self-funded during the execution cycle. The focus will be on faster collections from the customers. • Maximise benefits to the stakeholders through business value unlocking: The Company has invested in building capacities in nuclear power forgings, shipbuilding as well as in some business segments having longer gestation periods such as power plants, ports and roads concessions. It also has • created a significant scale in service businesses in the areas of financial services and information technology. All these businesses I have a potential to generate promising returns as the growth cycle of Indian economy picks up. The company is continuously exploring opportunities to unlock value from these businesses to maximise returns to its stakeholders. Project execution within time schedule and costs: The Company has a large order book of close to 2500 billion to be executed over the next few years. On-going projects are led by proficient project managers, project directors and sponsors, ensuring timely project execution within targeted costs. Improved monitoring of projects under execution for achieving profitable growth is one of the major thrust areas. Infrastructure Business 2 1961 section 17(3) Income tax Act, Total Amount BAHRAM VAKIL SWAPAN SUNITA DASGUPTA* ! SHARMA* THOMAS AJAY SUBRMANIAN MATHEW T@ SHANKAR# SARMA$ NAINA LAL KIDWAI^ 1 Independent Directors Fee for attending board/ 0.020 committee meetings Commission 0.067 0.060 0.030 0.320 0.205 0.000 0.110 0.000 0.592 Others, please specify Total (1) Name of Directors 0.087 Particulars of Remuneration Crore 0.243 2.708 2 Other Non-Executive Directors Fee for attending board/ committee meetings Commission * 0.055 0.229 0.055 0.229 Others, please specify Total (2) Total (B)=(1+2) 0.284 0.284 0.520 0.618 0.435 0.402 0.284 0.490 0.243 Sl. no. 0.380 0.235 0.000 0.000 1.064 190.406 Remuneration (A) + (B) Overall Ceiling as per the Act @Appointed as a Director w.e.f. April 3, 2015 # Appointed as a Director w.e.f. May 30, 2015 $ Appointed as a Director w.e.f. August 19, 2015 ^ Appointed as a Director w.e.f March 1, 2016 * Commission is payable to the respective Institutions they represent ! Ceased to be a Director w.e.f May 15, 2016 677.48 133 C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD SI. Particulars of Remuneration no. 1 Gross salary (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 (b) Value of perquisites u/s 17(2) Income-tax Act, 1961 (c) Profits in lieu of salary under 0.000 0.235 0.380 0.167 0.702 2 Other Non-Executive Directors Fee for attending board/ committee meetings Commission * 0.045 0.040 0.150 0.127 0.000 Secured Loans 0.000 0.277 Others, please specify Total (2) Total (B)=(1+2) Total Managerial 0.195 0.167 0.000 0.362 0.087 0.195 0.085 i) Principal Amount excluding 0.00 8 Date wise Increase/Decrease 9 10 11 in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): M. DAMODARAN Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): VIKRAM SINGH MEHTA Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): SUSHOBHAN SARKER jointly with Life Insurance Corporation of India Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): 12 ADIL ZAINULBHAI Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): LARSEN & TOUBRO Shareholding at the beginning of the year No. of shares % of total Shares of the Company 0.00 Cumulative Shareholding during the year No. of shares % of total SUBODH BHARGAVA Shares in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): M. M. CHITALE 0.00 4,441 0.00 101 11.11.2015 0.00 4,340 0.00 700 0.00 3,640 At the beginning of the year 29.05.2015 200 At the End of the year 0.00 200 At the beginning of the year Company of the Company Shares % of total SI. No. For Each of the top 10 shareholders 7 Date wise Increase/Decrease At the End of the year As on date of appointment as Director of the Company year At the beginning of the year 100 0.00 At the End of the year 100 0.00 129 130 SI. No. No. of shares Cumulative Shareholding during the year of the No. of % of total shares Shares Shareholding at the beginning of the year 16 financial year 15 Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): BAHRAM VAKIL in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): 14 Date wise Increase/Decrease AKHILESH GUPTA 13 0.00 At the beginning of the 150 0.00 1,629 At the End of the year 1,629 0.00 At the beginning of the year 750 0.00 At the End of the year 750 0.00 At the beginning of the year 150 0.00 At the End of the year 150 0.00 At the beginning of the year 885 0.00 At the End of the year 885 0.00 At the beginning of the year 150 At the End of the year 0.00 4,441 % of total Shares 0.00 100 0.00 21 Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): N. HARIHARAN Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): At the End of the year 100 100 0.00 0.00 23,140 For Each of the top 10 shareholders 0.00 At the End of the year V. INDEBTEDNESS Indebtedness of the Company including interest outstanding/accrued but not due for payment % of total At the beginning of the year during the year Shares No. of shares 0.00 100 At the End of the year As on date of appointment as Director NAINA LAL KIDWAI 20 0.00 100 0.00 100 of the Company 0.00 100 At the End of the year As on date of appointment as Director 07.10.2015 (Market Purchase) Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): SUBRAMANIAN SARMA 0.00 100 0.00 100 10.07.2015 (Market Purchase) 0.00 Cumulative Shareholding 25.03.2016 (Market Purchase) No. of shares At the End of the year 0.00 100 0.00 100 0.00 100 0.00 0.00 100 100 100 15.05.2015 As on date of appointment as Director At the End of the year 15.05.2015 Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): w.e.f May 15, 2016 SUNITA SHARMA jointly with Life Insurance Corporation of India @ceased to be a Director SWAPAN DASGUPTA jointly with specified undertaking of the Unit Trust of India @ Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): 0.00 0.00 0.00 THOMAS MATHEW T. Shareholding at the beginning of the year of the Company 0.00 As on date of appointment as Director LARSEN & TOUBRO Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): 19 AJAY SHANKAR 18 Indebtedness at the beginning of the shareholders For Each of the top 10 No. SI. 0.00 100 At the End of the year Date wise Increase/Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc): 0.00 100 As on date of appointment as Director 17 . . LTO, set up in collaboration with Zubair Corporation LLC, has been providing engineering, construction and contracting services for nearly a decade in the Sultanate of Oman. The Company has an excellent track record in civil projects and continues to enjoy customer preference in the country. L&T, through its wholly- owned subsidiary L&T International FZE, holds a 65% stake in the Company. The business increased its market share in both the Metros and Special Bridges segments. The business grew faster than its competitors in the sector. A major order from the Bihar State Road Development Corporation Limited (BSRDCL) for the Design & Construction of a Greenfield Six-Lane extra-dosed cable bridge over the river Ganga near Kachchi Dargah (Bihar) was a crowning achievement. Rising healthcare quality and awareness are expected to generate more investments. Strong IT & BPO industry growth will drive commercial space requirements. In the international arena, though falling oil prices may have some impact on the Middle East economy, the business is hopeful that infrastructure spending will continue 140 Oberoi Sky City at Borivali, Mumbai. L&T builds elite, mass and affordable housing complexes on a turnkey basis. for stadiums, metro systems and healthcare related projects. The business is poised for sustained growth in the forthcoming years against the backdrop of a reviving economy, an improving business climate, a healthy order book, a wide customer network, a strong organisational setup, an efficient supply chain management, requisite resources and a skilled workforce. Larsen & Toubro Oman LLC (LTO): Subsidiary Company One of the goals of the business as part of the new medium term business plan is to revitalise and reinforce core construction operations. Being adaptable to meet market shifts, the business has established a sound construction work system to raise productivity levels. The business plans to leverage the development of an automated system in the construction sector. This will reinforce the competitive advantage of the business and expand the portfolio. Against stiff competition from international players, LTO successfully secured a major airport project. HEAVY CIVIL INFRASTRUCTURE Overview: Heavy Civil Infrastructure business undertakes Design, Engineering, and Construction of projects in the Metro, Nuclear, Hydel, Ports, Special Bridges, Tunnels and Defence segments. The goal of the business is to become a total infrastructure solutions provider, not just in India, but overseas as well. The in-house design strength and unique Construction Methodology Cell gives the business an edge over its competitors and help it serve the customers needs from concept to commissioning. LARSEN & TOUBRO L&T's construction expertise has been offered for the elevated and underground sections of the Chennai Metro, including ballastless track work and a massive depot. Business Environment: The current year witnessed a mixed performance by the business. Revenue and order book remained strong regardless of a low-spirited market. Margins have improved overall, driven by strong cost cutting, restructuring and efficiency improvement initiatives. Despite the Gol's attempts to boost growth through several measures in the infrastructure segment, there was a slump faced primarily due to distressed demand from the infrastructure sector. However, major orders materialised in the third and fourth quarter with the Gol's boost on foreign funding. The Oil price impact has limited the investment plans in the country. LTO is witnessing limited business prospects in segments like hospitals and commercial buildings. However, considering company's past performance, it is confident of maintaining the business portfolio in the region. • The 'Make in India' initiative is expected to bolster the manufacturing industry. People Power: Growth in operations is helping the business to grow people internally and moving towards a role-based organisation. All talent investments are focused on increasing productivity, efficiencies, building a robust leadership pipeline and an orientation towards mega projects. The Frontline Supervisor Trainees program has taken root and continues to add value to the business. • The realty sector will stimulate growth in view of easing out of interest rates, relaxation in FDI norms and revival of investor sentiments. LARSEN & TOUBRO The 1600-bed multi-specialty Safdarjung Hospital, Delhi. impacted the manufacturing sector in India. Initiatives like 'Make in India' and 'Housing for All' have led to major investment plans. However, the pace of development has been far from satisfactory. Against all odds, Buildings & Factories has registered a steady growth and has continued to maintain its leadership position in the industry and have also expanded footprint in the Middle East to diversify the business portfolio. Significant Initiatives: The business implemented operational excellence initiatives across all levels to enhance profitability, like the introduction of value engineering techniques to cut down costs and improve productivity. Project cycle times were brought down by embracing technology and mechanised execution. The organisation was strengthened to improve the operational efficiency. Safety is imbibed as a 'way of life' and implemented across all projects to educate and sensitise all stakeholders on hazardous project activities and corresponding preventive measures. A safety innovation school was set up to impart the EHS related training. This school is the first-of-its-kind by any construction company in India. A team of experts has been formed to study futuristic businesses and formulate suitable strategies for a competitive edge. The projects executed by the business continued to bag various awards and recognitions during 2015-16. Four projects secured Cognizant Technology Solutions, Chennai. awards from The Royal Society For Prevention of Accidents (ROSPA). Four projects secured awards from the British Safety Council. Ten projects secured awards from the National Safety Council, India. Two projects secured awards from the Indian Concrete Institute. Two projects secured the Construction Week Smart Project of the Year award. Major Orders Secured and Under Execution: The business has secured prestigious projects in almost all their business lines like IT parks, office buildings, residential, factories, etc. Leadership has been maintained in the construction of IT parks and office spaces in the country. Major projects were secured in the northern and southern parts of India. Major orders were secured from its esteemed customers for the construction of elite high rise residential towers in western and southern India. Some of the key projects commissioned by the business 139 this year are IT facilities and campuses for IT companies, international airports at Chandigarh and Cochin, hospitals and medical colleges for ESIC, NMC and the Government of West Bengal, high rise residential towers in various parts of the country and cement plants for Orient and Wonder Cement. Outlook: In the International market - more particularly in the Middle East - the The Gol has a deep focus towards improving the country's infrastructure and has taken some good measures for improving the country's economy. The business is upbeat on this scenario and well positioned to capture the momentum. A few positive factors are as follows: 'Housing for all' coupled with rapid urbanisation and a rising middle class will drive demand for affordable houses. infrastructure industry did not show robust growth due to decline in oil prices. Moreover, GCC is promoting participation of the private sector via PPPs to compensate for the deficit. Bhutan and Bangladesh have proved promising for the Hydro Power and Special Bridge segments. • Precast elements lifting strategy was launched with inputs from all stakeholders and training workshops were held at relevant projects to facilitate implementation. The Chennai Elevated Metro, the Delhi Badarpur to Faridabad Corridor and the Hyderabad Metro Stage 2 have been successfully handed over. POWER TRANSMISSION & DISTRIBUTION On the International front, drop in oil prices has affected the construction business. However, it is expected that Qatar and Kuwait will continue to invest in infrastructure development and GCC will invest in rail infrastructure such as long distance rail projects. Metro Rail Projects in Tier 2 cities and high speed railway lines between Ahmedabad and Mumbai will provide more business opportunities for this segment. The Railway Budget has announced fast tracking of projects like track laying (new/doubling/tripling projects), Railway Electrification projects, gauge conversion, last miles connectivity projects and emphasis on decongesting existing routes mainly targeting port connectivity. Commissioning of the 2,600 Km of Broad Gauge track and 2,000 Km of Railway Electrification is also proposed in 2016-17. Three more new freight corridors (North -South, East - West and East coast) totalling about 5,700 Km with an estimated value of 2.7 Lakh crore have been proposed in the Railway Budget. In the Railway Budget, the capital expenditure for 2016-17 has been pegged at 1.21 Lakh crore. The Ministry of Road Transport & Highways has taken up a detailed review to improve road connectivity to coastal border areas, backward areas, religious places and tourist places under 'Bharat Mala' program. In addition, there are Connectivity Improvement Programs for Char- Dham (Kedarnath, Badrinath, Yamunothri and Gangothri in Uttarakhand). Prospects of Navi Mumbai, MOPA Goa and Dholera are also on the horizon. 17 Km per day currently to 40 Km per day and the Government has plans of awarding 1,00,000 Km of National Highways which is a 20% rise over last year. Overview: LARSEN & TOUBRO With signs of a recovery in the Roads sector, new projects are being awarded. On the domestic front, the prospects for pipeline looks bright. The Government has given a thrust to accelerate the development of infrastructure. Lower oil prices have fulled the growth of the domestic market. The rate of road construction has been targeted to increase from the current rate of Outlook: On the international front, the business is exploring new markets such as East Africa and Kuwait through business tie-ups with local partners. Special focus is being given to the selection of international consortium partners to be pre-qualified for mega projects in the GCC countries. Various strategic initiatives have been undertaken in the international business to strengthen procurement, asset management & cost control teams to provide immediate onshore support to projects. Inclinometers, Compactometers, GPS system and LIDAR surveys etc. Metro electrification & signaling project. The thrust on operational excellence continued through digitalisation of equipment for quality improvement, timely completion, cost optimisation, efficient resource utilisation and enhancement of safety measures by adopting improved engineering models like Significant Initiatives: 146 L&T's Power Transmission and Distribution business is a leading EPC player in the field of Power Transmission and Distribution and Solar businesses, offering integrated solutions and end-to-end services ranging from design, manufacturing, supply, installation and commissioning of Transmission Lines, Substations, Underground Cable Networks (both Power and Control), Distribution Networks, Infrastructure Electric Projects, Solar PV plants in both domestic and international markets. Extra High Voltage Substation Systems & Power Distribution Business Unit focuses on providing turnkey solutions for Extra High Voltage Air Insulated / Gas Insulated Substations for Utilities and Power Plants, EHV Cable Networks, and Utility Power Distribution and Power Quality Improvement works, complete Electrical, Instrumentation & Communication (El&C) solutions for various infrastructure projects such as airports, metros, OFC networks, etc. Transmission Line business offers turnkey EPC solutions in Overhead lines for Power Evacuation and Transmission, bolstered The large scale investments made in improving the T&D network in Odisha providing opportunities for major orders for the domestic segment of the business. It could secure several packages in different phases of the Odisha Distribution System strengthening project related works. The urban and rural electrification orders from Uttar Pradesh, West Bengal and Odisha under the erstwhile Restructured Accelerated Power Development and Reforms Program (RAPDRP) and Rajiv Gandhi Grameen Vidyutikaran The efforts by the business in the ASEAN market for T&D business yielded results providing breakthrough orders in Malaysia and Thailand. The ASEAN market is steadily opening up opportunities for the business with new power generation and evacuation schemes to meet the electricity demands in the region. Sub-Saharan region, with the business establishing its presence in Algeria, Kenya, Malawi and Ethiopia and selectively pursuing identified focus countries. The African market has started opening up in northern and In the Middle East, though the macro economic and political scenarios were mixed during 2015-16, the business witnessed significant investments aided by FIFA 2022 related investments in Qatar, Expo 2020 related plans in UAE and stable T&D investment plans by Kuwait and Oman. Key focus on Saudi Arabia has resulted in substantial growth for its T&D business as its central power utility has gone ahead with its vast expansion plans so as to meet its demand forecast. Spend cuts induced by the oil price drop and continuing unrest in neighbouring regions caused a sense of anxiety in the business climate. However, the business secured 51 substations, 633 Km of overhead lines and 624 Km of cabling projects in the year. take up projects at various voltage levels and is presently executing various projects at 765kV AC, 400kV AC & 800kV HVDC levels across the country. India's first 1200 kV Air-insulated Substation at Bina in Madhya Pradesh. The business has dedicated and experienced construction teams to Transmission line projects have been executed for the Central Transmission Utilities like PGCIL, NHPC, etc. and for various State Transmission Utilities like those in Uttar Pradesh, Chhattisgarh, West Bengal, Punjab, Tamil Nadu, etc. The interest shown by major players in transmission corridors awarded through the Tariff based Competitive Bidding (TBCB) process marks the advent of changing clientele from utility-based to investor-based. State Utilities are increasingly concentrating on strengthening the transmission network aided by funding from multilateral agencies. The EHV substation related opportunities in 400kV & 765kV GIS/AIS segments were steady as central and select state utilities were concentrating on Power System Strengthening Schemes to meet their demands. Though there were positive signs on the policy front, the general lack of investments in conventional power generation and industry segments continued. In 2015-16, the distribution sector in India maintained the momentum it gained during the past two years backed by several governmental initiatives. Supported by central funding agencies, state utilities have laid emphasis on strengthening their respective distribution networks for better efficiency, accountability and management. The business did well to capitalise on these opportunities and was successful in maintaining its leadership position. Business Environment: 147 The international units of the business in Middle East, Africa and ASEAN offer complete solutions in the field of Power Transmission and Distribution including High Voltage Substations, Power Transmission Lines, Extra High Voltage Cabling and Electrical, Instrumentation and Controls (EI&C) works for Infrastructure projects such as Airports, Oil & Gas Industries etc. in UAE, Qatar, Kuwait, Oman, Saudi Arabia, Bahrain, Algeria, Kenya, Ethiopia, Malaysia and Thailand. Solar business provides single point EPC turnkey solution for solar PV related projects. Experience spans across all terrains (sandy, rocky, etc.), all technologies (Thin Film Frameless and Framed, Crystalline, Tracker, etc.) and various contract structures including Turnkey EPC, Integrated Lump sum Turnkey (ILSTK) and Balance of Systems (BOS) Contracts. The business unit provides the Optimised Power Plant Design and are channel partners of MNRE with the highest Rating in the System Integrator and Renewable Energy Service Company (RESCO) categories. by its state-of-the-art tower manufacturing units at Puducherry and Pithampur supplying over 1.3 lakh tones of tower components annually. Further capacity enhancement is envisaged at Kanchipuram which is expected to be operationalised by mid of 2016- 17. The Testing and Research station at Kanchipuram accredited by NABL is one of the largest in Asia and is also amongst renowned testing centre in the world. (NABL: National Accreditation Board for Testing and Calibration Laboratories) During the year, the business secured 8 International Safety awards 2 ROSPA Gold, 2 ROSPA Silver, 4 British Safety Council awards and 2 prestigious safety awards from National Safety Council (NSC), India. 148 The new track construction machine is capable of laying 2 km of tracks per day, setting a benchmark in high-speed rail construction on the Western Dedicated Freight Corridor project. The projects successfully completed during the year include Hosur- Krishnagiri Road Project (60 Km, 6 Lane Highway in Tamil Nadu), Kandla-Mundra Road Project (71 Km, 4 Lane highway in Gujarat), Samakhiali-Gandhidham Road Project (56 Km, 6 Lane Highway in Gujarat), Manmad-Rahuri - Daund Railway Electrification Project (334 TKm), Rajpura composite works Project (48 TKm), DMRC CE07 Line 2 & 6 OHE (37 Km), KMDA 4 ROBS and Flyover (1.1 km) in Kolkata and Chennai Metro Stage 1 Track works (38 Km). Bulk Terminal Ltd, plastic cut-off wall for Polavaram dam, Andhra Pradesh (secured by Bauer-L&T Geo JV), LNG marine facilities at Ennore for IOCL and General Cargo berth II at Ennore, Tamilnadu. Major orders secured in 2015-16 by LTGS include Multi-cargo berth at Ennore for Chettinad International Major Subsidiary Company L&T Geostructure LLP (LTGS): L&T GeoStructure LLP (LTGS) is a subsidiary entity - a Joint Venture with Transworld Infraprojects Private Limited. The Company has a strong and professional foundation specialist team with the knowledge of design, equipment and methods to execute and supervise sophisticated works. L&T Geostructure was formed in 2012-13 to focus on marine foundations, deep foundation- supported bridges, deep shafts and other ground-related business. LTGS also has expertise in the areas of large diameter piling, diaphragm walls, cut-off walls, secant pile walls, sheet piles, intake structures, ground improvement, hard-rock boring and water retaining structures. 2016-17 backed by a strong order book. The business is resilient on efficiency and cost control which remain key drivers of profit and performance. LARSEN & TOUBRO 144 The business is confident of achieving the revenue targets for LTGS has achieved 4.5 million safe man-hours during 2015-16. The business has executed first-of-its-kind multi chamber cellular intake well for the river linking using diaphragm wall technology in Pattisam project in Andhra Pradesh. Successful installation of 80 T reinforcement cage was done for a diaphragm wall which is first-of-its-kind in the country. The business also executed shore protection works for a length of 2.2 km using sheet piles for the river Tapti. The business is focusing on increased diversity in man power. Diversity is the key to increased involvement, commitment, and a better understanding of the needs of clients and society. The Indian nuclear market has picked up pace both in the implementation of Indigenous PHWR and imported LWR programs. The special bridges market continues to boom. Good business prospects are seen in On the domestic front, the Union Budget 2016 indicated a positive outlook towards the Infrastructure sector. The budget included the formation of a National Investment and Infrastructure Fund with an annual allocation of USD 3.25 bn. The international market has truncated, particularly in the Middle East, which continues to face its adverse impact because of declining oil prices. Unless the GCC countries revamp their business strategies, the construction sector might do a volte-face on its growth plan. Outlook future-ready business. 65 employees have been identified as part of the leadership building initiative for tackling mega projects. Year 2016-17 will be the Year of the People with special focus on engagement and building the leadership pipeline. The Ganga riverfront project in Bihar. The Organisation Transformation initiative through OD Labs continues and till date, the business has covered around 500 employees. The business has also started the Institution-building initiative 'THIRD-i', which aims to build a the Western and Eastern parts of India. The elevated metros market has become commoditised. Though the business sees ample opportunities in Tier-Il cities, its participation will be very selective on large size orders. Underground Metros will be the main playing field of the business. The thrust of the Government of India on Defence spending continues and there is an expectation that prospects will materialise. The prospects of hydropower market on the domestic front continues to be bleak with growing concerns of environmental issues, land acquisition problems and local agitations. The underground space is going to be the key market for the business in the years to come. The business expects increased domestic investments for "All Weather Tunnels". TRANSPORTATION INFRASTRUCTURE Overview: Transportation Infrastructure business comprises Roads, Runways (Airside Infrastructure) & Elevated Corridors (RREC), Railways Construction, Railways Systems & On International front, the Railway Business Group has secured the first external order of Riyadh Metro Line 1&2 Track works for 152 TKm. The Railway Business has been awarded a major order by DFCCIL (Dedicated Freight Corridor Corporation of India Limited) for laying of tracks from Iqbalgarh to Vadodara, a total of 725 TKm (CTP 3R project) and electrification of 897 Tkm from Vadodara to JNPT, Mumbai (EMP 16 project). The Railways business has also secured a major order from DFCCIL for signalling and telecommunications works from Vadodara to JNPT (STP 17) for a length of 897 Tkm. 145 Artist's impression of the Al Wakrah Bypass Road in Qatar. city. infrastructure for Dholera smart • Development of road project (length 63 Km). • Addahole to Bantawal road • 4-Lane road from Yadgiri to Warangal (length 96 Km). • From Kanyakumari to Mukkola (length 87 Km). Major orders received by the road business are: The Road business (RREC) has been successful in expanding its customer base during the year by securing various orders for the construction of highways. Business environment: it has a Competency Development centre at Kanchipuram, and also undertakes training of workmen at CSTI, Ahmedabad. The business has vast experience in Project Management, Engineering Design and Construction Management which gives it a competitive edge over its competitors. The business has a pan India presence and also in GCC countries. It has multiple projects, Engineering Design Centres in Mumbai, Faridabad and Chennai and an Offshore Engineering Centre in Mumbai to cater to international projects besides Area Offices in India/GCC countries. In addition, International Infrastructure. It has sustained growth over the past years by securing some prestigious orders in the Roads & Railways sectors despite a slightly sluggish domestic economic growth. A flyover built by L&T. Metro Rail and Defence Sectors: Metro rail projects in India are booming rapidly, especially in Tier 2 cities, but the environment is becoming more challenging due to commoditisation of the elevated metro projects. This has influenced the strategic outlook towards the business resulting in enhanced focus towards underground metro projects. Training is a necessary parameter for growth and the business has prioritised the training of its staff on the latest QMS. Also, the setting up of an in-house facility for welder's qualification instead of testing by external providers has been initiated. Research Centre: On the Engineering front, the business undertook key initiatives towards digitisation, automation and adoption of modular techniques for construction. Building Information Modelling (BIM) and design automation are being implemented across business segments to provide optimal solutions. Modular construction techniques were successfully implemented in Nuclear Power Plant construction resulting in significant time optimisation. Risk Management: The business emphasises on achieving the corporate strategic objectives by following best practices in Risk Management. A paradigm shift has occurred in the way the business views risk management and the trend has moved towards a holistic view of risk management. The business has developed an efficient Conflict Management System which expedites resolution of issues with clients. The business has also initiated an analysis of mitigated activities depending on project specifics and disputes. The business believes in the re-evaluation of the project status when significant changes occur (scope, delivery method and schedule). Environment Health & Safety (EHS): Striving to achieve a goal of 'zero harm', the business has launched the Corporate EHS Strategic Plan 2015-16 with key EHS deliverables that have been implemented across all its operations. As part of the EHS Strategy, the following significant initiatives were taken up during 2015-16: • Successful recertification of EHS Integrated Management Systems conforming to international standards: OHSAS 18001 & ISO 14001. . Key EHS training initiatives include IOSH Managing Safely certification courses for Project Engineering Design and Heads, NEBOSH certification and online EHS certification courses for all technical employees. • EHS Risk Management is an integral part of the EHS management system and the business has revamped the IMS procedure and introduced monthly EHS Risk Management audits to facilitate and monitor implementation across all its projects. Many EHS awards and honours are received at different levels and categories from national and internationally renowned organisations. Workmen Management Centre: During 2015-16, the business trained 8045 subcontractors' workmen at various sites through 'On Job Training' (OJT) programs on form work, bar bending and masonry by experienced trainers to enhance their skill level for speedy and effective execution of jobs while emphasising on safety, quality and productivity. Quality Department: The business aims for excellence in quality, increasing the satisfaction of customers and other stakeholders through effective goal deployment, cost reduction and process improvements. 143 The business has started the Quality Management System transition to ISO 9001: 2015, which allows the implementation of best practices in the industry. Monthly direct customer feedback on product quality from projects has been its praxis. A new product of polycarbonate- based admixture for water conservation in concreting, in-house resistance heating techniques for preheating of pipe joints of massive sizes and the use of semiautomatic welding processes in nuclear projects such as GMAW (Gas Metal Arc Welding) were added into its standard practices. courses for Project EHS In-charges Significant Initiatives During the year, IC has taken several initiatives to improve operational efficiency as a prime focus as under: The bridge over the river Ganga in Patna, Bihar, once constructed, will be the longest extra-dosed bridge in India. The business has entered the international market by winning the contract for the construction of the Rupsha Bridge in Khulna, Bangladesh. Tunnel on the Beawar-Pali-Pindwara road project. 141 held by the Indian Armed Forces suggests the Government needs to make serious efforts towards upgrading defence resources, by the modernisation, upgradation and maintenance of the existing setup and that has helped the business to see immense opportunities. With massive investments planned by the Ministry of Defence, opportunities are abundant and the business is well placed and well equipped to offer turnkey design and build proposals for the entire Defence sector. The business has recently bagged an order for a project to resurface and extend the Air force runway at Hyderabad. Nuclear and Special Bridges: India is fast-tracking its shift towards nuclear power. The Government of India has planned to source 25 percent of its electricity from nuclear reactors by 2050. The nuclear business of the company has seen some potential orders - IGCAR for the construction of a Fast Reactor Fuel Cycle Facility at Kalpakkam. There have been developments on the tie-ups of the business with global players since India's nuclear power agency has cleared a long-delayed nuclear policy for reactors, marking a significant leap in the country's ambitious plans to become one of the world's top nuclear power generators. L&T is building the Kakrapar Nuclear Power Plant in Gujarat - the latest in its 5-decade association with India's nuclear power programme. In the coming years, this segment is poised for further growth. Many bridge projects are expected across India. Hydel, Ports & Tunnels sector: Hydel: Domestic Hydro projects are stuck at various levels due to pending clearances and local protests. However, some opportunities pertaining to construction of barrages are expected in Telangana. A conducive working environment is available at Bhutan where existing projects are progressing well. In Nepal, public sector undertakings and private players are showing interest for the development of Hydro Projects. Tunnels: The Gol is focusing on developing strategic and all weather tunnels. Opportunities may also arise for Underground Storage Caverns for crude oil storage and "Under Sea Tunnels". Opportunities also exist in the Middle East region but low oil prices may delay these projects. Ports: The Gol has launched the 'Sagar Mala Project' initiative and is focusing on the upgradation and development of new ports. Opportunities are expected for Marine Infrastructure projects involving Dry-docks, Marine intake structures and Defence Naval Base projects as well. આ વલણનો ઉ The majestic 9.76-km Kachi Dargah Bridge across the mighty Ganga The barrage being built on the Kharkai river in Eastern India. in Bihar will be India's longest extradosed bridge. 142 Riyadh and Doha Metro projects which are being operated with a JV structure are progressing reasonably. LARSEN & TOUBRO Tunnel-boring on the Doha Metro. The Indian Defence industry is a strategically important sector. The current profile of infrastructure India Limited (PGCIL) and the state utilities of Bihar, Madhya Pradesh and West Bengal, the business has emerged as one of the largest market share holders in 2015-16. The Middle East business sustained its winning streak by securing major EHV GI substation orders in Qatar including 3 packages from its key customer, KAHRAMAA. Another significant order was for design and build of 5 substations with associated cabling from Lusail. The business has also secured several Substation and Transmission Line projects at the 132kV level in Saudi Arabia. EHV GIS orders from private customers were secured in UAE. In the Transmission Line business, major orders have been secured from the private sector in Chattisgarh and Telangana regions. Another major order from KPTCL for the 400kV D/C Quad line in the Bellary region also involves design and testing of towers. An order has been secured from the Tamil Nadu Transmission Corporation Limited (TANTRANSCO) for a 107Km long 400kV D/C Quad line from Kamudhi to Karaikudi. The Kanchipuram Testing centre has been booking orders from reputed global customers like Dominion Virginia Power from USA, Rohas from Malaysia, etc. Having secured orders from Power Grid Corporation of in cyclone affected areas, there is continued focus on converting overhead lines to underground cables. Further, the business expects continued investments in the Extra High Voltage substation segment from PGCIL and select state utilities especially in 765kV & 400 kV levels with thrust on GIS. Some of the states are planning EHV cable links too. Power quality improvement projects such as STATCOM, new clientele out of TBCB players, state utilities strengthening their networks with funding from multilateral funding agencies etc. are expected to provide much needed impetus. LARSEN & TOUBRO The business continues to make good strides in its Africa initiative. The business received two major substation orders in the East African market: one for constructing a 400kV Al Substation (AIS) in Addis Yojna (RGGVY) schemes too are noteworthy. Apart from securing the 765kV Aligarh GIS order, the business also secured a STATCOM order which is a breakthrough project in terms of technology. Ababa, the capital city of Ethiopia from Ethiopian Electric Power and the other for a 400kV Substation at Lilongwe in Malawi from Millenium Challenge Account, an organisation funded by US Government. There were breakthroughs in the ASEAN market through four major orders. In Malaysia, a 500kV Transmission Line order from Tenaga Nasional Berhad (TNB) and two 275kV GI & Al substations from Sarawak Energy Berhad (SEB) were secured. In Thailand, a 500kV Transmission Line order from Electricity Generating Authority of Thailand (EGAT) was received. The business is proud to have been given an opportunity to light up thousands of households in economically backward areas and electrify hundreds of villages. In a large number of towns, it has improved the power quality • British Safety Council Awards for 6 projects. Outlook: The business expects a stable political and economic scenario in Oman with growing opportunities in the T&D segment. Major Subsidiary Company: Larsen & Toubro Oman LLC (LTO) LTO, set up in collaboration with Muscat Trading Company (Zubair Corporation Group), provides engineering, construction and contracting services in the Sultanate of Oman. LTO made its maiden venture into Oman in 1994 and has completed 22 years, emerging as one of the leading construction companies. During the past year, the Company managed to bag a slew of projects including a major 400kV cabling and OHL project and maintained a healthy order inflow. L&T's capability in executing projects for power distribution includes switchyards. LARSEN & TOUBRO L&T's rural electrification expertise has brought electricity to over 24,000 Indian villages. The overall outlook for the PT&D sector remains promising on both the domestic and international fronts. The business looks forward to consolidate its position in established markets and gain significantly in new growth areas; ably supported by its initiatives on cost leadership and smart delivery. Power Infrastructure is being ramped up by the ASEAN countries driven by growth prospects attributable to regional economic integration and strategic location. The rising power demand paves the way for significant investments in grid interconnections, grid development and strengthening in countries such as Malaysia, Thailand, Myanmar and Indonesia. sponsor infrastructure projects either directly through utilities or through infrastructure developers bodes well. The business has established its presence in some of the key growth economies of Africa and is currently executing Transmission and Distribution projects. The business is concentrating on key economies of Africa that have a clear road map to build Substations and Transmission Lines to meet increasing demand. • ROSPA Safety Awards for 9 projects. Africa's economic growth has been impressive and is predicted to remain robust. To sustain and support high growth rates expected for sub-Saharan Africa through economic diversification and industrial development, closing the current gap in power infrastructure will be crucial. Regional integration, such as power pools, system strengthening projects and promotion of renewable generation could shape the energy landscape in sub-Saharan Africa. There are visible commitments from Governments to expand installation capacity and increase electrification access rates substantially. The eagerness from multilateral funding institutions to 152 The focus of the Central government on visible results in key programs such as 'Electricity for All', 'Make in India', etc., augur well for the growth for The business is poised to pursue opportune prospects in Solar PV plants in the backdrop of GWs of planned solar capacity addition, solar parks being created by states like Telangana and Karnataka, favourable policy changes through Renewable Energy Act, etc. With its experience and expertise, the business is in an ideal position to exploit opportunities in both transmission and distribution. parks and lift irrigation schemes, reconductoring packages and multi circuit lines with High Transmission Low Sag (HTLS) conductors are expected to provide new opportunities. Statutory changes in land acquisition will have an impact on the Right of Way clearances in transmission line projects. Commodity prices having bottomed out late in 2015-16, the emerging upward trend may exert pressure on costs. and reverse auction in PGCIL projects may become a dampener, Transmission Lines for solar 151 While intensified competition, strategic median packaging In the Transmission Business, while the state and central utilities will continue to award routine packages for grid strengthening, major transmission packages shall also be witnessed through Tariff based Competitive Bidding. However, Gol's push towards mobilisation of major equipment and material for distribution projects in a centralised manner may significantly reduce the package size available for the EPCs and increase the physical scatter of work scope for a given package size. opportunities may unfold with Aramco's stock divestment plans. Though the de-subsidising of oil prices may increase the input costs in medium term, such expectation hastens decision making on project awards to take advantage of lower commodity prices. While competition from European players may intensify, the established credentials of the business in terms of prequalification and project delivery will help maintain its leadership position. Power Transmission & Distribution business. The improving financial health of State Utilities thanks to the Ujwal DISCOM Assurance Yojana will mean increased distribution opportunities through Integrated Power Development Scheme (IPDS) and Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) schemes. To reduce AT&C losses in general and especially ⚫ Best Infrastructure Project of the Year Award from Dossier Awards Oman 2015. • Earth Care Award for Innovations in Climate change from JSW - TOI. Plaque of Honor for successful completion and appreciation certificate for implementation of safety norms from Bengal Aerotropolis Projects Limited (BAPL). 230 kV double-circuit transmission line at Abu Ali, Saudi Arabia. L&T is the industry leader in turnkey construction of power transmission and distribution systems in India and the Middle East. 149 One of the many 400 kV Gas-insulated Substations installed by L&T. and significantly reduced AT&C losses through distribution reform projects. The key substation projects commissioned include major EHV substations viz. 765kV GIS at Varanasi, 400kV GIS at Nagapattinam and Narendra for PGCIL; 400 kV AIS at Karamadai and Karavalur for TANTRANSCO; 220kV GIS for HPPTCL. In the Transmission Line business, a major portion of India's first +/-800kV HVDC corridor project viz. 800kV HVDC TL from Biswanath Chariyali to Tangla was commissioned. 400 kV D/C RAPP - Sujalpur Transmission Line for Sterlite Power Grid Ventures Limited (202Km) was commissioned well ahead of schedule. Other projects commissioned include 765kV Gwalior to Jaipur Transmission Line (TL) of PGCIL (128Kms), 400kV D/C (Quad) Barh - Gorakhpur TL of PGCIL (178Km), 400kV D/C (Quad) Kurukshetra - Jalandhar TL of PGCIL (133Km), 400kV D/C Kutta- Kozhikode TL of PGCIL (99Km) over an extremely hilly and difficult terrain, 220kV D/C Varahi - Kavoor TL of PGCIL (117Km), 220kV Gadag- Bagalkot TL of KPTCL (102Km) and 220 kV & 132kV Lines for MPPTCL (225Km). The TLTRS facility at Kanchipuram achieved a major milestone by successfully testing the Saudi Electricity Company's tower measuring 101.3m high, the tallest tower ever to be tested. - The Solar business commissioned 200 MWp a rare feat to be accomplished by an EPC in a year. It commissioned India's largest tracker based solar PV plant in Tamil Nadu. In the International market, the Middle East business commissioned 18 substations, 2 cable projects and an Overhead Transmission Line. Having qualified for the highest voltage levels in its lines of business, it also added five new customers. Significant Initiatives: Appreciation Certificate for quality from Karnataka Power Transmission Corporation Limited (KPTCL). Having identified Digitalisation as a key enabler, the business rolled out mobility device based project monitoring tools in its Saudi Arabia projects. Several operational excellence initiatives in the areas of on-time delivery, profitability enhancement, effectiveness checks of process implementation, working capital management and risk management were pursued. The domestic back office for engineering and design to cater to international projects has been strengthened. A new Transmission Line Tower manufacturing facility is also proposed. 150 LARSEN & TOUBRO India's first 765 kV Gas-insulated Substation, at Pune. Bridge (Stringing Working Platform) technique and the use of motorised winch machines in place of tractors, in final sag activities and enhanced training on Behavior-based Safety, Safety Audit and Training the trainers. The Solar business rolled out tracker technology on a large scale in one of its projects. It also tested other technological advancements such as Seasonal Tilt technology and E-W technology. As part of its internationalisation strategy to expand into key African and ASEAN economies, the business has strengthened its talent base to execute ongoing jobs, vigorously pursuing emerging potential and creating corporate brand awareness and preference. The business intends to develop long-term relationships with its customers and fosters strategic partnerships and alliances with key vendors and OEMs. Such initiatives promptly earned awards and recognitions for the business during the year. These include: • Utkrishtata Puraskar award from PGCIL. • To enhance safety in its operations, the initiatives undertaken include upgrading Safe Operating Procedures (SOPs) for Transmission Lines, EHV Substations and Distribution projects to reflect changing work methods and mechanisation, adoption of Sagging In the Middle East, the business is cautiously optimistic in its outlook. The slow recovery of the oil price is not expected to hamper investments in the T&D sector though there may be policy measures like taxation and currency de-pegging. Infrastructure development will continue as part of diversifying the economy and aided by events like FIFA 2022. GCC grid formation, upgradation to higher voltage levels, integration of renewable energy sources to the existing power grid and interconnections of transmission networks are expected to fuel growth in power distribution throughout the Middle East. New investment LTSA is a wholly-owned subsidiary providing engineering, construction and contracting services in the sphere of T&D in the Kingdom of SMART WORLD & COMMUNICATION • Foray into Specialised WTP & Desalination with Technology Partnerships. Participation in Mega Lift Irrigation System tenders, in which water is not transported by natural flow but is lifted with pumps or by other means. • Focus on Zero Liquid Discharge (ZLD) process as along with combined effluent treatment packages in various states and industries across India. • • Upcoming medium to large scale STP tenders will improve the quality of urban life. Outlook: Large investments have been proposed by multi-lateral funding agencies for irrigation, integrated urban utilities and CETPs in India. The Gol is committed to accord high priority to water conservation and its management. Nearly 500 Water-treatment plant for Vellore Water Supply Scheme, Tamil Nadu. cities and towns are expected to be covered under the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) for the development of urban infrastructure. Coming to irrigation, mega projects have been proposed across major states along with proposals to connect rivers with 15,000 Km of canals. The government has already set in motion an integrated Ganga conservation plan - 'Namami Gange' which envisages investments for sewage infrastructure across several urban habitations along the river. Stringent implementation of pollution norms is in place to encourage setting up of common effluent treatment plants. To this effect Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) has been formulated with the vision of extending the coverage of irrigation 'Har Khet ko Pani' and improving water use efficiency 'More Crop per Drop' in a focused manner with end-to-end solutions for source most ambitious infrastructure program aiming to develop new industrial cities as 'Smart Cities' and converging next generation technologies across infrastructure sectors. The program envisages the development of infrastructure linkages like power plants, assured water supply, high capacity transportation and logistics facilities. In the International market, opportunities have been identified for desalination and sewage treatment plants in GCC. FIFA 2022 in Qatar and Expo 2020 in UAE are triggering water infrastructure prospects in the Middle East. Similar water infrastructure prospects are also visible in KSA, Kuwait and African countries. (SWC) Overview: The world is seeking smarter, more secure and intelligent solutions to enhance quality of life. This has led to the rise of smart cities, advanced security solutions and communication infrastructure in several advanced economies. India is also rapidly gearing up to create smart infrastructure that will soon be the backbone of the economy. The Smart World & Communication business provides turnkey services and Operations & Maintenance as a Master Systems Integrator in the areas of city surveillance, intelligent traffic management systems, 155 P₁ creation, distribution, management, field application and extension activities. The Delhi - Mumbai Industrial Corridor (DMIC) is India's LARSEN & TOUBRO 154 Hanamapur Lift Irrigation Project, Karnataka. Saudi Arabia. During the past year, the Company had secured orders for a sizeable number of projects involving 15 Substations and 2 Overhead Lines from SEC. With a stable political environment and the continuing need for strengthening of Transmission & Distribution network, LTSA is well poised to garner sizeable opportunities in the coming year. WATER & EFFLUENT TREATMENT Overview: The Water & Effluent Treatment (WET) business caters to turnkey infrastructure projects including water supply and distribution, desalination plants, water management systems, wastewater networks, water and wastewater treatment plants, industrial and large water systems, lift irrigation and canal rehabilitation. Over 20 million people in India have benefited from L&T's water infrastructure projects. With an experience of constructing over 51,000 Kms of water and wastewater pipeline networks and more than 4,000 MLD of water, wastewater and effluent treatment plants, the business is India's largest water infrastructure organisation. Business Environment: The per capita water availability in the country is rapidly decreasing due to increase in population and consumption. The Gol has plans to prevent the contamination of surface water bodies by stopping the untreated wastewater flowing into it. It also plans to adopt modern irrigation techniques so that the dependency on monsoon can be reduced. Industries are planning to recycle and reuse their effluents by adopting advanced treatment 153 Water pre-treatment plant for a power plant in Sagardighi, West Bengal. technologies thereby reducing the consumption of fresh water requirement for their day to day processes. Projects Commissioned and Orders Received: The Water & Effluent Treatment business has commissioned several important water projects in 2015-16. These include Vellore Combined Water Supply Scheme -(Pkg I) with a 181 MLD Water Treatment Plant for Vellore Corporation which will provide drinking water to 24 lakh people in Vellore District, Jawai Cluster Project comprising water supply from five offtakes which will benefit 5 lakh people; State-of-the-art STP at the President Estate of The President of India for re-use of 20 lakh litres of water for horticulture works, upgradation and rehabilitation of Bhagirathi Treatment Plant (500 MLD) at Delhi; Storm Water Project at Varanasi and Mathura for Uttar Pradesh Jal Nigam Limited, Raw Water Intake & Pipeline Package for Jai Prakash Power Ventures Ltd, and the 241 MLD Doha South Sewage Treatment Plant, Qatar for Public Works Authority (ASHGHAL). The business has also been successful in securing orders from various domains like lift irrigation, drinking water supply, plant water systems, common effluent treatment plants, municipal wastewater collection and treatment and integrated urban infrastructure. On the International front, the business has secured orders in Qatar and Oman. Significant Initiatives: With huge opportunities in integrated water supply prospects, lift irrigation, sewage and effluent treatment space, significant initiatives have been taken to ensure that the business continues to be ahead of the competition, both in terms of market share and profitability. Some of these initiatives are:- Thermal desalination plant. Public Safety Management SECURITY SOLUTIONS Larsen & Toubro Saudi Arabia LLC (LTSA) Smart Ustrong This business segment secured the comprehensive Metro communication package for the Lucknow Metro and is also executing the TETRA communication network for the Delhi Metro. Smart Infrastructure Business: This business segment, as a Master Systems Integrator, offers both infrastructure creating expertise, backed by state-of-the-art IT capabilities. The business has executed many projects that include most of the sub systems of the SMART city offerings like CCTV systems, VMS, Video Analytics, Access Control Systems, Telecom Systems and Command Control Centre Systems. These projects, which were being executed independently, have now been brought under one umbrella to create smart infrastructure. The business commissioned India's First Smart City Project - Jaipur Smart City with Wi-Fi, Cameras, Interactive Kiosks, REGS and Parking Information Systems at selected locations with a central command and control centre. Outlook: Year 2016-17 looks promising for the business, as the new Government has provided a fillip to safe and smart cities and other digital initiatives. Systems Communication Network & Telecom Infrastructure Business: The Bharat Net program plans to connect 2.52 lakh Gram Panchayats across the country through high speed digital network. Seven states have offered to come up with a State or SPV approach to take this initiative forward. Apart from this, the plan outlay for the Department of Telecom for 2016-17 includes funds for an OFC based network for the Defence services. This, together with other initiatives of various government departments will provide future opportunities. The Union Budget has a healthy allocation for Metro projects where the business has made an entry with the LMRC project here. The focus here is on communication systems such as Radio equipment, FOTS, PA&PIDS, Clock and other surveillance equipment. The business will be active in this segment. Allied to the communication elements is the 'Automatic Fare Collection system' that requires tie-ups with a few technology players. Metro projects are funded by agencies such as JICA and DMRC, which improves the level of safety in undertaking these jobs. Smart Infrastructure Business: The Plan outlay in the Union Budget 2016 of the Ministry of Urban Development is 21100 crore which includes 7205 crore for Smart Cities and Atal Mission for Rejuvenation & Urban Transformation (AMRUT). The Government has already unveiled the list of cities under the 157 'Smart Cities Mission'. Apart from the Government's Smart Cities Mission, many cities like Naya Raipur and different SEZ corridors have plans for implementation of smart elements. Some of these cities are focusing on pilot smart city projects to secure a qualification. Countries like USA, Japan, Germany and France are eager to provide investments and technological support for the development of many of these smart cities across India. Leveraging the diversity and depth of L&T Construction's expertise in water supply, wastewater, solar, etc., the Smart Infrastructure business plans to get into new areas like solid waste management and all other smart elements like parking systems, intelligent traffic management systems, etc. The business is well positioned to collaborate with State level municipal corporations and governments to share its experiences in Jaipur which include the safe city initiative and dedicated surveillance projects. 158 pan India level for IAF connecting 131 Air Force locations. High-technology surveillance systems ensure 24x7 security. Security Solutions Business: The trigger for the surveillance business, will essentially come from the initiatives taken by State Police Departments and State Industrial Development Authorities given that the safety of people is a State subject. Central Government assistance is also committed by MoH to those state governments which take up the 'safe' initiative. Good inroads have been made into this segment in the last three years. 156 SMART CITIES LARSEN & TOUBRO Water Management Citizen Cantre APPS COMMUNICATION Smart Digital E To create smart cities, L&T offers integrated capabilities from L&T Construction, L&T Electrical & Automation, L&T Infotech and L&T Technology Services. Managemen Business Environment: Security Solutions Business The various solutions offered by this business includes City Surveillance Systems, Intelligent Traffic Management Systems (ITMS), Border/Coastal Security Systems, Security and Management Systems for Critical Infrastructure - ports, airports, metros, IT parks and public buildings. transport & logistics, border security, communication networks, telecom infrastructure, building management systems, smart grids and smart city development. The business has huge experience in optical fiber cabling projects and enjoys excellent track record of installation of telecom towers and other associated works on a turnkey basis. The business has proven expertise in providing state-of-the-art IT & communication systems for airports, metros, power plants and factories. The business is currently executing the first-of-its- kind communication network at a Communication Network & Telecom Infrastructure Business: This business offers total solutions in areas of Wired and Wireless Networks including OFC, Emergency Response Systems, Fixed Broad Band, Satellite and Microwave RF Links, ICT / Data Centre Infrastructure, Emergency Response Systems including Dial-100, Early Warning Dissemination System and Communication Network for Metro It has also secured the first standalone Intelligent Traffic Management Project implementation for Hyderabad. Rails. City Surveillance & Intelligent Traffic Management Systems for three cities - Ahmedabad, Gandhinagar and Vadodara. The business also executed a unique project facilitating better surveillance and management of critical infrastructure at Sabarmati Jail in Gujarat. The business is currently executing India's largest city surveillance project comprising 6,000 cameras at over 1,500 locations in Mumbai City. The business commissioned the prestigious project for the Home Department, Gujarat by installing Several of these systems have been executed by the infrastructure business in various projects across the country. The Security Solutions business segment has secured the largest surveillance project in respect to camera installation for Hyderabad and Cyberabad City. The project is city's first step towards a Safe Smart City. Significant Initiatives: During the year, the business also initiated groundwork for firming up technology partnerships in new areas like Flue Gas Desulphurisation (FGD) and Selective Catalytic Reduction (SCR) and is well placed to take advantage of emerging opportunities. Power Business - An aggressive cost reduction exercise has been initiated under this plan, to improve the profitability of its current project portfolio and improve its competitiveness for future bids. Natural-gas-fired combined-cycle power plant built by L&T at Vemagiri in Andhra Pradesh. The business has recently drawn up Lakshya 2021 - its 5 year strategic plan. Under this exercise, major strategic initiatives have been identified which will lead the business to greater success under the plan period. These initiatives have been drawn up after detailed deliberations and reviews both internally as well as with external consultants to maximise the benefits to the company. The execution of the current coal and gas-based projects on hand also progressed satisfactorily in 2015-16, with internal execution records being surpassed in terms of time taken for achievement of major project milestones like erection of boiler structures and ceiling girder jack-up. The domestic market witnessed a sharp increase in tendering activity bidding or nomination route. Out of this, close to 10 GW were awarded out, with formal orders for the rest yet to be placed. This increased activity was, however, marred by severe competitive pressures with aggressive pricing by competitors. The year also saw the rise of a trend of multiple state-owned utilities placing orders on nomination basis (Close to 6 GW) bypassing the established norm of inviting competitive bids. in 2015-16. Projects worth 21 GW were decided either through 159 Business Environment: The business environment was a mixed bag during the year with promising as well as challenging developments. headway in Bangladesh by winning three prestigious projects for gas-based plants, one each in the last three years. During the year, capacity worth 2,228 MW built by the business achieved commercial operation. The business has also made significant Outlook: During the year, the business fully established its footprint in Bangladesh by securing its third EPC order in as many years for BPDB 400 MW Bibiyana CCPP. In the previous years, it won orders for NWPGCL 360 MW Bheramara CCPP and BPDB 225 MW Sikalbaha CCPP in Bangladesh. Exports of products, services and projects have been selected as another major focus area. The business has made significant progress in cultivating overseas customers for its engineering wing as well as supply of boiler and turbine components. The power sector in the country is in a state of flux today. The country's growth and proactive government policies are expected to provide much needed boost Notwithstanding the emergence of these alternative sources, coal will remain the mainstay of the domestic power sector. The primary concern, however, will continue to be the supply glut in the coal power segment. There are prospects worth ~7 GW in the domestic coal market for 2016-17, against the annual domestic manufacturing capacity of 24 GW. While this overcapacity will continue to keep prices under pressure, the business expects the irrational pricing to finally ebb, as competitors may bid responsibly because of the mounting financial distress evident from their books in 2015-16. opportunities for the material handling sector. All these initiatives are expected to provide a lot of opportunities for MMH business. The Power sector has an investment potential of more than USD 200 Bn. in the next five years. 35-45 GW coal based thermal power capacity order finalisation is expected by 2021. Retrofits and replacement of old sub-critical units by super- critical units are also planned by various power producers. Stringent environmental norms will provide prospects in Zinc will follow steel investments. Coal under the purview of the environmental concerns, efficiency improvement pressures and mining clearances is going to see investments in 2016-17. Mining clearances and environmental concerns will pave way for Alumina refineries in 2016-17. 165 Focus on capacity utilisation, improving efficiency, securing raw material availability and environmental factors are exerting a positive pressure on the steel companies, triggering investment in steel sector (rebuilds and de-bottlenecking). As Zinc has traditionally followed steel, the The Steel sector is currently facing sectoral challenges with global steel prices yet to stabilize and a high level of industry debt across steel players. Some of the positive regulatory interventions such as allocation of coal mines and imposition of SGD and MIP on steel have, however, started to show signs of improvement in the domestic steel sector. The Introduction of the 5:25 refinancing scheme has given some confidence and given a breather to the steel industry. All these factors have raised hopes of an improving profitability trajectory for Indian steel players in Q3 and Q4 of 2016-17. Outlook: Human Resources: During the year, the business continued its thrust to bring in Operation excellence in the areas of site execution and supply chain management. Interventions for advancing the skill levels of the employees were implemented through a string of strategic training programs, both technical and behavioural at various project sites. Going forward, these initiatives will enhance organisational capabilities for meeting emerging challenges on all fronts. customer needs and further increase its business potential. Key success factors for the business are customer satisfaction, operational efficiency and consistent performance. The business has also established offices in the Gulf (UAE, Oman and KSA), Africa and South East Asia to address international The business envisages During the year, the business completed the restructuring of its operations by closing cluster offices. The business aggressively pursued optimisation of resources like staff, equipment, materials and formwork along with cost reduction measures to create a lean organisation and improve operational performance. Operational excellence initiatives continued to enhance productivity. As part of a business augmentation drive, MMH has envisaged opportunities in Ash Handling, EPC support for MDO (Mining, Development and Operation) and Material Handling systems. The ferrous business has taken strategic initiatives in certain parts of the value chain to develop in-house technology capabilities and position itself as a LSTK player for those process plants. The non- ferrous sector has started to expand its portfolio into by-product plants for Zinc and Copper. technologists as a part of its business line diversification across various segments. The business has made strategic alliances with leading global Significant Initiatives: The fabrication shop at Kanchipuram continues to provide the support and strength of critical and heavy fabrication and assembly works for Material Handling Equipment like Stackers, Reclaimers and a host of other mid precision level equipment catering to the Steel, Mining, Power and other process plants. L&T Kansbahal introduced the very first surface miners in Northern Coalfields Limited (NCL) coal mines in 2015-16. It also continued to maintain its dominance in supplying Limestone Crushing plants to major cement plants in India. In the year 2015-16, Kansbahal received a repeat order from Rio Tinto for a 1600 TPH rotary breaker type crusher for Mount Thorley Mines at Singleton, Australia. This was based on satisfactory performance of the first machine supplied in 2014-15. Another prestigious international order from Awam Minerals, Oman for custom-built skid mounted gypsum crushing plant was successfully commissioned. The Product business is fully equipped to manufacture high- end equipment involving heavy fabrication, precision machining and critical assembly and testing. Zawawi Minerals at Oman, NCL at Block-B; Bucket Wheel Excavators at Neyveli, CHP for NTPL-Tuticorin, UPRVUNL-Anpara, GCEL-Raikheda and BIDCO-Lalitpur. Kansbahal's manufacturing facility is strategically planning to further augment its product portfolio with the introduction of new products like advanced sand manufacturing plants, cone crushers and mobile crushers. opportunities overseas in material handling and downstream metal in the near future. 166 Heavy Engineering Business 2x800 MW supercritical thermal power plant at Krishnapatam, Andhra Pradesh. L&T has manufactured critical equipment for supercritical power plants across India. Overview: Power business provides integrated concept-to-commissioning of coal and gas-based power plants on turnkey basis. The business has project management centres in Vadodara, Faridabad and Chennai along with state-of-the-art manufacturing facilities in Hazira for ultra- supercritical/supercritical Boilers, Turbines & Generators, Axial Fans, 168 Considering the long procurement cycle time, the benefits of the impact of the new DPP would be realised from the year 2017-18 Defence and Aerospace is a strategic segment, and Government of India's (Gol) procurement in this segment follow the Defence Procurement Procedure (DPP). With an aim to achieve self-reliance as well as boost in defence exports in the medium and long term, the Gol has driven several initiatives in fiscal year 2015-16 aimed at attracting investments from both foreign and Indian companies and creating a level playing field for Indian private sector companies in defence. Through structured and detailed consultations with all stakeholders, a simplified DPP 2016 has been released in March 2016, which addresses the requirements of the Ministry of Defence and Industry. under-recovery of fixed expenses. In addition cost over-runs on certain jobs also impacted the profitability of the SBG. vis-à-vis USD, financial market uncertainty, deferred capital investment plans, geo-political situations and delayed policy implementation in India. The sudden and steep drop in oil prices has resulted in the cancellation, suspension and deferment of capital expenditure projects of oil-producing countries. Competitors having idle capacities offered very aggressive pricing in a shrunk market. Localisation policies, preference to local suppliers and mandatory requirement of sourcing equipment from the Export Credit Agencies (ECA) financing countries by EPCs also impacted the Process Plant Equipment business. International sanctions on Russia and Iran deprived the SBG of business opportunities. The nuclear business was affected by the delay in matters related to nuclear liability and insurance as per The Indian Civil Liability for Nuclear Damage Act. PP&N SBG's order inflow and revenues were therefore adversely impacted. This caused under- utilisation of facilities resulting in End shields for a nuclear power plant being fabricated at L&T's Hazira facility. Business Environment: During the year 2015-16, the Process Plant Equipment segment has been impacted by a weak global economic scenario triggered by slump in the oil prices, falling commodity prices, depreciation of emerging markets' currencies The Defence and Aerospace (D&A) SBG is involved in design, development and realisation of Naval Platforms, Artillery systems, Land & Naval Weapon systems, Fire Control systems, Naval equipment and systems, Engineering systems for Land and Marine forces, Military Bridging systems, Communication systems, Missile sub systems and Rocket Motors for Space launch vehicles. The SBG's operations span three dedicated work-centres at Talegaon near Pune, Coimbatore and Bengaluru besides production facilities at Hazira for manufacture of critical units for the strategic program, Ranoli for Advanced Composites and Powai for prototype development and testing, besides the site at Vishakhapatnam operated as a GOCO model for a strategic program. chemical sectors (for high-pressure, temperature and corrosive services) was brought within the purview of the Heavy Engineering business, while it was earlier within the purview of Power business. The Piping business unit has a track record of export of piping spools to USA and Canada and forecasts good opportunities in supplies to EPCs in USA, Canada, Japan and Europe. Vadodara manufacturing facility. During the year, the business of fabricating critical piping spools for applications in the power, refinery, petrochemical, fertiliser and 167 The Process Plant Equipment and Nuclear (PP&N) SBG is involved in the manufacture of large complex equipment such as hydro-processing reactors and high-pressure heat exchangers for process plants and equipment for the nuclear power sector. Heavy manufacturing is undertaken at work centres located in Mumbai, Hazira and Sohar in Oman. Precision fabrication in stainless steel and titanium on the process plant side is handled by the Defence and Aerospace • Process Plant Equipment and Nuclear The business is structured into two Strategic Business Groups (SBGs): in-house engineering, equipped fabrication facilities, R&D centres, an experienced project team and a safe work culture. The Heavy Engineering (HE) business designs, fabricates and integrates custom designed, engineered critical equipment and systems to core sector industries like Fertiliser, Refinery, Petrochemical, Chemical, Oil & Gas, Thermal & Nuclear Power, Aerospace and for Defence applications. The business has a track record of executing large size and complex projects with capabilities that include Overview: A coal-gasifier being transported. L&T has built the world's largest coal-gasifier, for export to China. LARSEN & TOUBRO 164 Plants commissioned across various business units during the year 2015-16 are Blast Furnace, Coke Oven Battery, Sinter Plant, Steel Melt Shop, Hot Strip Mill, Material Handling Package and Power Distribution System for Tata Steel at Kalinganagar; Material Handling Package for Tata Steel at Jamshedpur; Sinter Plant for SAIL at Bhilai, Emirates Steel HSM storage at Abu Dhabi; Drywall Gypsum Board plant for USG and Handling packages for RRVUNL at Chhabra, NTPC Khargone, NTPC Tanda, MPPGCL Malwa, Reliance Jamnagar, for Adani at Kandla and Mundra, Northern and Mahanadi Coal field jobs at Nighai, Khadia and Lingaraj and 10 other packages are concurrently under execution for various other customers. GCC projects under execution cover customers like ORPIC, EGA, joint venture by SENAAT & JFE and others. supercritical coal-based projects LTSL offers the complete gamut of Power Plant Engineering and Consultancy services - from concept to commissioning. Its experience list includes overseas projects in USA, Middle East, Africa, and South East Asia. Besides having considerable expertise in gas-based and sub-critical coal based power projects, LTSL is also involved in engineering of ultra-supercritical/ The Company is a joint venture of L&T and Sargent & Lundy LLC, USA (S&L), a global consulting firm in power industry. L&T's stake is just over 50% in the joint venture. LTSL's main Design Centres are located in Vadodara and Faridabad. (LTSL): L&T-SARGENT & LUNDY LIMITED standards and competitiveness being appreciated. The Company has also been on the lookout for additional revenue streams like spares and services, which is bearing fruit and is well-poised to grow in future. 161 Export has become a thrust area for the Company with its high quality year saw satisfactory execution progress as planned for the projects on hand - both domestic and exports. The company has made consistent efforts to reduce costs, product improvisation of bringing in more efficient models, indigenization and optimization of facilities. Today the company is much better equipped to meet the competitive market. The L&T-MHPS TURBINE GENERATORS PRIVATE LIMITED (LMTG): LMTG is a joint venture incorporated in India of L&T and Mitsubishi Hitachi Power Systems Limited (MHPS), Japan and Mitsubishi Electric Corp. (MELCO). L&T has a 51% stake in the joint venture, with MHPS holding 39% and MELCO holding 10% stake. The company has a state-of-the-art manufacturing facility at Hazira, Gujarat for the manufacture of STG equipment of capacity ranging from 500 MW to 1000 MW. The company is engaged in the engineering, design, manufacture, erection and commissioning of ultra-supercritical/ supercritical turbines and generators in India. The Company further strengthened its position in export market with prestigious orders from MHPS, Japan for supplying pulverizers, proving its cost competitiveness while matching global quality standards. LMB is committed to execute the current jobs within schedule and is also focusing on increasing exports jobs for pulverizers and pressure parts. hanger tubes used in super heater and reheater coils of boilers. The manufacturing facility at Hazira has installed and commissioned its first robotic system for boiler component welding. The robotic system is being used to manufacture Projects under execution have achieved several milestones with stamp of quality and performance this year. LMB is a joint venture incorporated in India of L&T, with a 51% stake and Mitsubishi Hitachi Power Systems Limited (MHPS) Japan, with 49% stake, for the engineering, design, manufacture, erection and commissioning of ultra-supercritical/ supercritical boilers in India. The manufacturing hub of LMB is at Hazira, Gujarat; while it has established design and engineering centers at Faridabad and Chennai. The company can manufacture ultra-supercritical/supercritical boilers up to a single unit of 1000 MW at its Hazira complex. Major Subsidiary Companies: L&T-MHPS BOILERS PRIVATE LIMITED (LMB): The domestic gas-based power plant market is not expected to revive in the near future considering the already stranded commissioned capacity. However, the South East Asian market is expected to generate opportunities for gas based plants in the coming year. With the good experience of three Bangladesh projects under execution, the company is preparing to enter these new markets in South East Asia. of coal-based power plants. These are expected to open up new high-value business opportunities for FGD and SCR. The company is getting geared to offer these as part of its product portfolio. The Ujjwal Discom Assurance Yojana (UDAY) implemented by the Central Government is also expected to provide relief to the sector by de-stressing the discom balance sheets and reviving demand. The Government also plans to bid out at least two UMPPs during 2016-17 to developers. This will generate sizeable market for the business in subsequent periods. Supercritical turbine being assembled at L&T's Hazira Campus. LARSEN & TOUBRO 160 For 2016-17, the situation is expected to improve on policy and economic fronts. On the policy side, the Government has issued rules on environmental protection relating to curbing the emissions and forms the engineering base for L&T's thrust on turnkey execution of ultra-supercritical/supercritical technology. As of now, it has engineered around 21,000 MW of generation capacity of gas-turbine based power plants and around 22,000 MW of generation capacity of coal-based power plants across the globe. to the sector. On the other hand, the increasing focus on nuclear power and renewables like solar can fundamentally alter the power source mix in the nation. New customers added to its client list this year included a well-known IPP based in Singapore, S. Korean EPC contractor, Turkish EPC contractor, a major European institutional investor, a power investor based in Singapore, two cement manufacturers based in Saudi Arabia and a major Infrastructure player based in Japan. Substation Engineering and Renewables (Solar) and R&M segments. The business is currently executing major metallurgical projects for Tata Steel Limited at Jamshedpur, for SAIL at Rourkela and Bokaro and for SK Mines near Udaipur. Material Major orders booked and executed during the year: The business managed to stay ahead of its competitors in major bids in 2015-16 which include Beneficiation Plant for SK Mines near Udaipur, Large Tank Package for Emirates Global Aluminium at Abu Dhabi, AHP for NTPC at Tanda and Petcoke handling package for IOCL Paradip and ORPIC Oman. A thrust on ordering Ultra Mega Power Projects (UMPPs) of 6000- 8000 MW is expected in 2016-17. This will provide opportunities to MMH for Coal Handling Plants (CHPs) and AHPS. lead to investments in rebuilds and de-bottlenecking. L&T offers eco-friendly sand-making machinery and systems in consortium with Japanese major Kemco. The emphasis of all steelmakers will be on improving operational efficiencies. This is expected to India's iron ore production is expected to reach 199 million MT by 2020, opening opportunities in beneficiation and material handling sectors. Investments are planned for iron ore handling and beneficiation plants by the operators of captive mines namely SAIL and TATA. Coal India has been able to achieve the production of 536 million MT in 2015-16. The Coal Ministry plans to become self-sufficient in power plant fuel in next two to three years. Major investments in Coal Handling and Washery are likely in the near future by CIL, SCCL, MDOS, etc. Recent Government initiatives like Safe Guard Duty (SGD), Minimum Import Price (MIP) and bringing transparency in mining allocation, coupled with an upward trend in global steel prices have brought some hope for the steel and power sectors and investments in the mining sector have commenced. However, there are risks associated with the positive sentiment on steel which include raw material and steel price volatility, removal of regulatory support by the Government under the pressure from WTO, significant rise in domestic utilisation rates and weak demand which can all play spoil sport. concern in the year 2015-16 for a majority of the steel and power companies. All these factors have impacted investments in new projects with no major steel and power plant expansions announced by companies. 163 Business Environment: Stagnant growth in demand, coupled with the onslaught of cheap imports from China and East Europe had highly stressed profit margins for Indian steel producers in spite of the low raw material prices. Debt serviceability had been a major other industrial sectors. These manufacturing facilities are located at Kansbahal (Odisha) and Kanchipuram (Tamil Nadu). solutions to the power plants sector. It has comprehensive and robust design and engineering capabilities to cater to EPC needs across all disciplines. It also has in-house facilities which design, manufacture and supply large range of products like surface miners, crushing systems, apron feeders and sand manufacturing plants. It also undertakes customised manufacturing of critical machinery for the steel, power, mining and Metallurgical and Material Handling (MMH) business provides EPC (Engineering, Procurement & Construction) solutions for ferrous (beneficiation, iron & steel making), non-ferrous (aluminium, copper, lead and zinc) as well as bulk material handling systems in the power, port, steel and mining sectors. The business also offers specialised conveying systems and Ash Handling Plant (AHP) Overview: TTTL Integrated Steel Plant, Kalinganagar, Odisha. Metallurgical & Material Handling Business 162 In addition to LMB orders, the Company has bagged major orders from other Boiler OEMs. The Company will continue to pursue fresh equipment prospects from boiler OEMs as well as aftermarket orders from utilities. The recent environmental rules requiring FGDs will further boost demand for the Company's axial fans. The Company is a joint venture of L&T and Howden Group, UK. L&T has 50.1% stake in the joint venture. The company supplies high end fans and air pre-heaters for thermal power plants. The Company has a state-of-the-art facility for manufacture of fans and air pre-heaters at Hazira, Gujarat along with a fan testing facility. It also has a design and engineering center at Faridabad. L&T HOWDEN PRIVATE LIMITED (LTH): Breakthrough orders were received in new areas of business in international Lender's Engineering Assignment funded by IFC, Transmission & Distribution, Air-Preheaters and Electrostatic Precipitators. These factories, coupled with talented staff and decades of unparalleled experience in executing complex projects, are its competitive advantage in building the best-in-class power assets in India and abroad. During the year, Electrical Standard Products Business put its thrust on ramping up its capabilities to increase the production of its new products such as its new range of modular products and other MCCBs. The two major developments for the year were introduction of AHF (Automatic Harmonic Filter) and the 'Smart Comm' solution (powered by iVisionmax - Indigenous automation software). Smart Comm is a unified software platform for supporting all the products of the business including meters, MCCBs, MCBs, relays, releases, ac drives, soft starters, IO modules and building automation products, communicating to a control room through Ethernet, Modbus TCP/IP, IEC 61850 and BACNet. Smart Comm is scalable to meet requirements of all sizes of facilities and plants and it allows integration of third party devices on open standard protocols. Kana Controls is approved with most customers in Kuwait and provides a good platform to serve the control and automation business opportunities in Kuwait. LTEAFZE acquired the Kuwait-based Kana Controls General Control & Trading Company in September 2013. Kana Controls established in 1990, offers systems for all type of automation including Field Instruments & Sensors, Flame Detection & Combustion, Termination & Wiring devices, Panel Mounted Instruments & devices, Interface devices, Power Supplies, Panels & Enclosures. Kana Controls General & Trading Contracting Company W.L.L., Kuwait 178 In 2015-16, the Metering & Protection System business introduced new products like New 1-phase Meter with IrDA, 3-Phase Meter with IrDA, 1-Phase Pre-Paid Meter (Taurus), 3-Phase Pre-Paid Meter (Atria), 1-Phase Smart Meter (Aurora), 3-Phase Smart Meter (Regor), 3-Phase Digital Panel Meter New initiatives like Dindayal Upadhyaya Gram Jyoti Yojana, UDAY, Smart Cities, Smart Grid, Pradhan Mantri Krishi Sinchai Yojana & increased focus on renewable energy taken by government show a promising future. But these initiatives will take time to take root and start generating business for E&A. These initiatives will see incremental revenue for coming five years. Product & Technology Development Centres, within Heavy Engineering, focus on new product development and development of improved The overall market will remain competitive as liquidity with major customers continues to be a cause of worry. The business has also witnessed a financial crunch at major industrial houses due to which new plants/expansion are not being announced. Overall the industrial sector shows a muted trend. However, the business sees an upward trend in the infrastructure sector (Metro, Airports, Railways, Even with the new reforms initiated by the government, the core sectors continue to show no signs of pickup. However, with the launch of schemes like DDUGJY and IPDS which target central procurement of meters throughout the country, there is a hope for a movement toward premium products like AMR, Prepaid and Smart Meters in the coming years. Also, Scheme UDAY will improve health of DISCOMS and will lead to higher investment by the utilities. Outlook: sector. During the year, the Control and Automation business made an entry into the Solar business with help of a tie-up with an Italian Company for L&T-branded Solar inverter completing the portfolio for solar solution. Also, Electrical System and Equipment business developed L&Ts Outdoor Compact substation -N-Qube which will cater to the rapidly growing infrastructure LARSEN & TOUBRO onwards. In fiscal year 2015-16, the continuing linkage to earlier procedures and resultant slower pace of decision making resulted in deferment of repeat orders for Very Low Frequency (VLF) Transmitter project, Pinaka Artillery Systems and Weapons and Equipment package for Indian Navy's warships, thus resulting in reduced order inflow. However, significant progress has been achieved in certain other programs, orders for which are likely to be concluded in the near term. During the year, the SBG also embarked upon a drive for reducing capital employed in operations with added focus on productivity improvement and efficient execution to shorten the order to cash cycle, resulting in better cash generation. Significant Initiatives: etc.) and is optimistic that its efforts in launching products for infrastructure sector in 2015-16 will yield result although the margins in infrastructure sector are negligible due to competition from local players. In order to maintain leadership position in the Process Plant and Defence sectors, focussed team initiatives are taken under Organisational Excellence (OE). Sustainability and CSR is enshrined in the Vision of the business and has long been a part of its way of giving back to society at large. The sustainability and CSR initiatives are undertaken at each of the units of the business based on the local needs. Developmental programs are identified in keeping with its thrust areas like global warming, conservation of electricity, fuels, water and reuse and recycle of material and resources. More than 50,000 people from underprivileged and economically backward communities have been benefitted through health check-up campaigns and medical care. Over 20,000 children have gained from its education promotion programs by way of building school infrastructure and providing educational aids. Environment, Health and Safety policies and programs help in increasing awareness amongst employees, community and its stakeholders. 173 The inclined Brahmos missile launcher adds another dimension to the country's fire power. L&T has developed several launchers and weapons systems. 169 manufacturing technology. These Centres are engaged in deploying technologies related to process industries, manufacturing, mechanical systems, defence electronics and submarine designs. The Centres focus specifically on the following technology domains -welding and metallurgy, composite material, heat transfer, hydrodynamics, computational fluid dynamics, stress analysis, drives, microwave and RF, embedded systems, high availability systems and military communication. The steering group, comprising the top management of the business, plans, oversees and monitors all these initiatives through regular review meetings. For the D&A segment, the Product & Technology Development Centres focus on development of niche products and solutions either for internal development projects or through participation in opportunities presented under 'Make' & 'Buy & Make Indian' category programs. The SBG has also successfully partnered with foreign Original Equipment Manufacturers for engineering, development and realisation of artillery gun systems customised for the requirement of Indian Army. The OE team facilitates the implementation of identified improvement programs across Heavy Engineering. Initiatives like Productivity Management, Total Productive Maintenance of machines, Six Sigma for process improvements, Workplace Management Systems, Knowledge Management, creation and update of Standards and Procedures and Cost Control measures harness the technical and business acumen of the business. The culture of continuous improvements in operations helps the business attain global benchmarks. In-house competency and leadership development are undertaken through Employee Engagement and Talent Development Programmes. The business also sees an improvement in demand from agro / food processing industries. The Marine business sees a positive sentiment through the 'Make in India' initiative taken by the government which emphasises on indigenous content, giving the business an edge over foreign suppliers. Also the Indian Navy has reckoned the company as a strategic partner resulting in thrust on setting up Life Cycle Support facilities in its Navi Mumbai factory. With continuous low oil prices, the business sentiments are being affected on the international front. Projects are expected to be deferred or delayed further. However, social infrastructure projects like hospitals and metros are expected to continue as planned and new high end infrastructure projects are being announced in the Dubai market for Expo 2020 and the Qatar market for FIFA 2022. The dedicated focus of the business on GCC metro projects is expected to yield results in 2016-17. Also, pursuant to unrest in the Middle East and Africa regions, respective government priorities are shifting toward defence related initiatives. The South East Asia market looks attractive as major investments are seen in the building sector in Indonesia and the power sector in Bangladesh. Healthcare, Transport, Power Generation and key event driven development viz. FIFA 2022 in Qatar and EXPO 2020 in Dubai would continue to generate business opportunities through 2016-17. While some countries like UAE show some investment slowdown in energy and infrastructure sector, others like Qatar and Kuwait continue to move forward with earlier announced projects finalised in 2015 and 2016 and have announced new projects that will give opportunities to LTEAFZE in 2017. Projects focused on any process Improvement, Security, Surveillance and / or Environment friendly practices will generally Building Management System along with Extra Low Voltage (ELV), Electronic Security (ESS) and Telecommunication (TCom) Systems. The Automation Product OEMs continue to lobby with end clients/consultants for restricting competition to limited participants through direct OEM bidder nomination or novation. The Company has had a bad year in terms of achievements. The costs surpassed the estimation on the projects, leading to a negative bottom line. With increasing number of System Integration companies in the market, the markets have become extremely competitive. As a result, LTEAFZE saw drop in Process Automation project opportunities from the O&G and Utility industries. However, it saw considerable scope for Infrastructure Automation with leading to shortfalls in budgeted incomes for all oil economies in the region compounded with heightened security concerns due to increased political disturbance in the region, there is a general slowdown in pace of O&G project investment. Nevertheless, O&G investments continued in Kuwait and Oman, while Qatar and KSA governments primarily are committed to improving their infrastructure. Airport, Metro Railway, Hospital related investment continued to gain importance. L&T powers Mumbai International Airport's Network Operations Centre. LARSEN & TOUBRO 176 With the period 2015-16 seeing a steady decline in oil revenues L&T Electrical & Automation FZE (LTEAFZE) is a 100% subsidiary of L&T International FZE based in UAE. The company provides Systems Integration solutions in the Oil & Gas, Power, Water and Waste Water and Infrastructure space like Airports, Hospitals, Stadiums and Transportation segment like Metro and Rail. The solutions are centered around Process Automation and Telecommunication applications catering to customers / contractors in the Middle East, Africa, CIS and Turkey markets. It has a state-of- the-art integration facility in Jebel Ali Free Zone and is accredited with ISO 9001, 18001, 27001 and TUV for functional safety. L&T ELECTRICAL & AUTOMATION FZE (LTEAFZE): U DB East Asia countries like Vietnam following an OEM model. The Malaysian economy is showing signs of recovery. The local utility is coming out with a few tenders in the coming year and the Company expects to benefit from this opportunity. Also the outlook for Indonesian economy looks encouraging and a large numbers of infrastructure and power projects are seen in the pipeline. With projects drying up in core markets like UAE, Qatar and Malaysia, the Company saw a need to develop a retrofit solution for these geographies where its product and solution population is high. With some concrete efforts, the Company has developed retrofit solutions to cater to these requirements. Another key strategy for TAMCO would be to foray into European markets, Iran and other South- separation of all employees was carried out except the service engineers. Switchboard installation at a power plant. L&T provides power distribution and control solutions across the value chain, from generation to end user. The business environment in 2015-16 was tough with the steep fall in oil prices as TAMCO's main markets are in oil producing nations. Even the Malaysian market was badly affected with projects getting delayed and the government cutting its OPEX budget. Jobs were few and this affected the price levels too. However, the depreciation of the local currency (Ringgit) gave the company an advantage in the global market and it could protect its market share and margins. The Chairman of Saudi Electricity Company visited the company and encouraged it to build the switchgears in KSA. Consequently TAMCO invested 25% stake in LTEASA and have completed type tests to get its products approved. Also UK approved for the E&A business to opening doors to utility market in the UK. The company's Australian operations were not able to generate business and were making losses over the last two years. Accordingly, operations in Australia were stopped and Major Subsidiary Companies TAMCO GROUP OF COMPANIES: TAMCO is the leading manufacturer of Medium Voltage switchgear in South East Asia with manufacturing facilities in Malaysia and Indonesia. Its products are widely used in the power, oil & gas, construction and manufacturing industries. Through extensive R&D and advanced manufacturing technology, TAMCO has been able to deliver high quality, safe, reliable and cost effective products and solutions. Its strength lies in the flexibility to develop and adapt products to meet customers' needs and, therefore, it has a high reference list across the globe. 175 In the Defence segment, the business has collaborated with national laboratories such as DRDO and ISRO as technology partners for indigenous technology development for the various defence and space launch programs, besides in-house programs such as the Autonomous Underwater Vehicle. The business is also a partner to defence public sector undertakings such as Bharat Electronics Limited, Bharat Dynamics Limited, Mazgaon Docks Limited, continue to get implemented across industries. LTEAFZE is fast aligning with the new A&T arena with delivery capability as Main Automation or Telecom Contractor, and is poised to leap forward into the next league. 170 Garden Reach Shipbuilders and Engineers Limited etc. for detailed engineering & production of various weapon delivery & engineering systems. This augurs well for the business in future, as it aligns with the Gol's 'Make in India' initiative. The Company is focusing on stabilising the production processes and improve manufacturing efficiencies so as to remain competitive in the market. A series of initiatives have been initiated in the area of cost control and improving process efficiencies. A total focus on reduction of fixed costs has brought down the fixed costs by over 30%. The Company has embarked on establishment of Quality Systems in the new facility, complying with ISO 9001. The Company has been accredited by NABL certification for laboratories and also received the U, U2 stamps from ASME, USA. This will help company in getting shop approvals from prospective reputed customers. The strategic focus of the Company, in line with its vision, is to fill the technological and resultant manufacturing gap in the country for critical heavy forgings for the nuclear and other strategic sectors like defence. The Company has demonstrated its capability to manufacture critical forgings for the Indian Pressurized Heavy Water Reactor (PHWR) plants. It has also taken up the development of the critical forgings for the next generation IPWR - nuclear plants. Discussions are at an advanced stage with foreign technology partners for possible development of forgings to meet their specifications for future Indian nuclear installations. L&T's nuclear-grade forge shop at Hazira (near Surat), one of Asia's largest. It offers a wide range of finished forgings for the nuclear, hydrocarbon and power sectors. SPECTRUM INFOTECH PRIVATE LIMITED (SIPL): SIPL is a wholly-owned subsidiary of Larsen & Toubro Limited. SIPL undertakes technology development and manufacture of avionics Line Replaceable Units (LRUs) for military applications. SIPL concentrates largely on product development in embedded solutions, sensors, control and signal processing. SIPL is certified by Centre for Military Airworthiness and Certification (CEMILAC) of the Ministry of Defence, India for the same. SIPL has obtained AS9100 Rev C, ISO 9001 and ISO 27001 certifications. SIPL is developing a Frequency- Modulated Continuous-Wave (FMCW) based radar system, which can be utilised in a variety of military and land security applications. The company continues to work with the Ministry of Defence and Hindustan Aeronautics Limited to jointly develop new products. fertiliser plants and heavy shafts for the mining segment. The Company has made successful supplies of Blow out Preventers (BOP) and forged blocks required for oil & gas segment. The announcement of new programs in the aircrafts and helicopter domains have opened new business opportunities in avionics. However, increased LARSEN & TOUBRO HEAVY ENGINEERING LLC: Larsen & Toubro Heavy Engineering LLC is a Joint Venture with Zubair Corporation, established in Sohar, Sultanate of Oman. L&T, through its wholly-owned subsidiary Larsen & Toubro International FZE, holds 70% in the Company. The heavy engineering facility was commissioned in October 2009. The Company focuses on business in the Middle East, mainly GCC countries and supplements manufacturing and fabrication facilities located in India. The company seeks to leverage the geographical advantage with Oman Government's in-country-value requirements, Oman's expected large value investments in the hydrocarbon sector, and revamp prospects in certain ageing refinery projects offer good potential for the facility which has already established itself by producing a variety of complex equipment. 172 Electrical & Automation Business L&T offers India's widest range of switchgear to a variety of sectors - agricultural, industrial, building and commercial. Overview: The Electrical & Automation (E&A) business of Larsen & Toubro Limited offers a wide range of products and solutions for electricity distribution and control in industries, utilities, infrastructure, buildings and agriculture sectors. Its basket of offerings includes Low and Medium Voltage Switchgear components, Electrical Systems, Marine Switchgear systems, Industrial & Building Automation Solutions, Surveillance Systems, Energy Meters and Protection Relays. The business is supported by its five decades of experience in in-house design and development that facilitates the introduction of contemporary products and a high precision tool manufacturing facility which is a pre-requisite for high quality manufacturing. The business runs six Switchgear Training Centres across the country that impart competition from smaller firms and entry of new players have resulted in a very challenging business environment. 171 The Company has also made heavy forgings shells, tube sheets, dished ends required for refineries, The Company has been successful in getting approvals and qualifications from many key customers. This opens a window of opportunities going forward in various segments. The Company has been successful in manufacturing of high quality Stainless Steel grade forgings required for International Thermonuclear Experimental Reactor (ITER). In yet other major milestone, the Company has successfully manufactured most of the heavy forgings for steam generators, pressurizers of 700 MW PHWR reactors for NPCIL designed nuclear plants. Outlook: The business outlook for Process Plant sector looks challenging due to uncertain macro-economic environment coupled with dropping oil prices and cut on capital expenditure across the sector. The overall investment climate remains cautious with the overhang of excess capacity. However, the recent financial distress of Korean and Chinese fabricators may force EPCS to explore other low-cost countries including India. Given its execution capabilities and proven track record, the PP&N SBG is prepared to harness business prospects as they emerge and stay focused on profitable execution. In the refinery space, oil supply has outpaced oil demand growth in 2015-16, putting significant pressure on oil prices. The declining trajectory seems likely to continue in 2016-17 and will gradually rebalance boosting demand and dampening supply. The majority of the investments are likely to be in Asia and Middle East region. However, opportunities are seen in the medium term due to implementation of clean fuel norms in India- Bharat IV by 2017, Bharat VI by 2020 and announcement to set-up new greenfield refinery by PSU oil majors. Overseas opportunities include KNPC-Al Zour Refinery Project in Kuwait, Dangote Refinery Project in Nigeria, Hengli Refinery Project in China, PMB Hengyi Refinery Project in Brunei, TAKREER Refinery Project in the UAE, BAPCO Refinery Project in Bahrain, PEMEX Refinery projects in Mexico, etc. In the petrochemical sector, the uncertainty in the investment is prevailing due to fall in oil prices. US Shale gas has the advantage of lower and shorter investment cycles compared to conventional oil, which makes US shale more responsive to oil prices. Availability of cheap LNG and US shale gas as a feedstock will boost investment in the petrochemical sectors (ethylene capacity additions). LARSEN & TOUBRO In the Fertiliser space, global fertiliser demand is forecasted to expand marginally in fiscal year 2016-17. Greenfield and brownfield projects are expected in USA, Saudi Arabia, Indonesia, Nigeria, Algeria and Russia. Expected domestic greenfield and brownfield investments in the fertiliser sector shall provide business opportunities. Also, opportunities to export for upgradation projects in Iran seem to be opening up. In the Nuclear space, the Indian Nuclear Insurance Pool (INIP) launched in June 2015 and the draft Operator's Policy and Supplier's Special Contingency Policy (against 'Right of Recourse') is being reviewed by the concerned parties (including foreign technology providers). Further, the government approved the Nuclear Liability Fund of 2000 crore which is an addition to INIP. The Company has entered into strategic teaming agreement / MoU with the concerned foreign technology suppliers and can look forward to a global presence in this industry. Due to stiff competition in international markets, foreign OEMs are looking at cost effective solutions through plant upgrades and de-bottlenecking, and this opens up opportunities for the business. In view of the same, procurement process (re-tendering) for critical equipment is expected to begin in 2016-17. A track record spanning three decades of the D&A SBG with emphasis on indigenous technology development distinctly positions the Company as a market leader, on its own steam and in the forefront in the defence and aerospace sector. With the DPP 2016 coming into effect from 1st April, Defence procurement is expected to gain traction and programs worth 200000 crore are expected to be ordered with preference to the Indian industry. The preference to buy Indigenously Designed Developed and Manufactured (IDDM) products will also result in opportunities in newer domains. With FDI at 49%, competition in the form of foreign OEMs with Indian industry is likely to be increased. Over the next 2 to 3 years, significant opportunities are envisaged in programs for new- build naval platforms, refit of conventional submarines, artillery and air defence guns, close-in- weapon system, military bridging systems, missile programs and sub- systems for space launch vehicles. The business is future-ready to play a proactive role towards self-reliance of our nation through a successful 'Make in India' initiative. Major Subsidiary Companies L&T SPECIAL STEELS AND HEAVY FORGINGS PRIVATE LIMITED (LTSSHF): L&T Special Steels and Heavy Forgings Private Limited (LTSSHF) is a joint venture (JV) of Larsen & Toubro Limited (L&T) and Nuclear Power Corporation of India Limited (NCPIL), with L&T and NPCIL holding 74% and 26% stakes respectively. The JV was formed to set up a fully integrated forging facility (from steel scrap to finished forgings of alloy steels, carbon steel & stainless steels) with a capacity to produce a single piece ingot up to 300 MT and forgings up to 120 MT in the first phase. These are required for critical equipment in nuclear power and hydrocarbon industry, for rotors in power industry, blocks for oil & gas segment and for general engineering applications. The JV is a major strategic step towards achieving India's independence from imports of heavy forgings for hydrocarbon industry and ensuring timely supply of heavy forgings for nuclear power plants. Business Scenario: The demand for heavy forgings is a derived demand dependent on the outlook of the end use segments comprising refineries, petrochemicals, thermal and nuclear power, wind and hydro power and other industries like steel. The Company has been witnessing fierce competition from global established players having excess capacities. This has been aggravated post the Fukushima nuclear disaster. Due to very low crude oil prices, the forging demand from oil & gas sector has also diminished. K 9 Vajra T 155/52-calibre self propelled howitzer, designed for all terrains. training and learning on good electrical practices to engineers, consultants, contractors, technicians and electricians. L&T ELECTRICALS AND (LTEASA): the business won the prestigious National IP Award 2015 in the category 'Top Organizations for Designs', from the Department of Industrial Policy & Promotion and Intellectual Property Office, Govt. of India, in association with CII. The honor recognises and rewards organisations across India for their contribution in harnessing the country's intellectual capital and creating an eco-system that boosts creativity and innovation. LARSEN & TOUBRO During the year, E&A filed application for as many as 114 patents, 12 trademarks, 37 designs and 1 copyright in India, as well as 2 foreign patent applications (PCT National Phase applications - in Europe and China). This was the 9th consecutive year of filing more than 100 patent applications. Also The business continued to devote its resources and capabilities to Research & Developmental endeavors, which is one of its core strengths. Its in-house design & development capabilities are rated among the best in the industry. The facilities at Powai-Mumbai, Ahmednagar, Mysuru, Mahape and Coimbatore are approved by the Department of Scientific & Industrial Research, Ministry of Science & Technology. These centers network with international labs, testing centers and academic institutions to keep abreast of new technology trends and introduce them to customers in different segments. AUTOMATION SAUDI ARABIA COMPANY LIMITED, LLC Significant Initiatives: been stalled or cancelled). This has inturn affected the price-realisations for whatever opportunities existed in these markets. The infrastructure sector sees a gradual growth over the coming years, however, the impact of lower oil prices is seen on future OPEX plans cancelled by all oil-producing nations (Middle East projects have In the International market, huge Infrastructure opportunities are seen in the ASEAN region especially in Indonesia and Thailand. Major investments are seen in Infrastructure development. Also there are opportunities in Infrastructure segment in the Qatar, Saudi Arabia and UAE (metros, airports and hospitals) in the wake of FIFA 2022 (Qatar) and EXPO 2020 (UAE). Rising investment in alternative sources of energy is expected to contribute to the growth of MV and LV switchgear used for switching and general protection. Moreover, this application area will also trigger demand for Miniature Circuit Breakers (MCBs) and Molded Case Circuit Breakers (MCCBs). The LV Switchgear market is expected to grow at CAGR of 6.5% and is expected to reach * 7600 crore in 2020. L&T's U-Power Omega ACB range offers enhanced protection in a compact package. 174 The LV switchgear market has been growing at slow pace over the last two years due to a muted investment cycle, weak macroeconomic environment, and a downward trend in the industry and restricted investments in infrastructure and utility projects. (Nova), New Trip Supervision Relay (TCS01-nX) & Motor Protection Relay (MPR200). The introduction of the Smart and Prepaid meter will show results in the coming years as India is implementing 'Smart Cities' a key initiative taken by the Government. Currently, E&A has manufacturing facilities at Navi Mumbai (Mahape and Rabale), Ahmednagar, Vadodara, Coimbatore and Mysuru in India as well as in Saudi Arabia, Jebel Ali (UAE), Kuwait, Malaysia, Indonesia and the UK. Business Environment: During the year global economic growth has slowed down from 3.4% to 3.1% on the back of slowdown in China, meltdown of oil prices across globe and concerns of European market still continuing. However, India's GDP grew by 7.6% notwithstanding the contraction of global exports and two consecutive years of a deficient monsoon on the back of an excellent performance by the services sector. 177 The Company had a bad year in terms of achievements. During the year 2015-16, LTEASA saw lower order inflow in view of deferment and cancellation of projects which lead to drying up of the order book and lower sales, leading to a negative bottom line. L&T Electrical & Automation Saudi Arabia Company Limited was established in 2006 as Limited Liability Company, where, 75% of shares are held by Larsen & Toubro International FZE and 25% by TAMCO Switchgear Malaysia Sdn. Bhd. It manufactures of LV/ MV switchgear/control gear panels of all sorts and undertakes installation and commissioning of these products along with associated products viz., PLCs, Drives, Transformers, cables, etc., to offer a one window solution to customers. The company been approved by almost all major end users in the Kingdom eg SABIC and Saudi Aramco. HENIKWON CORPORATION SDN BHD, MALAYSIA: Established in 1982, Henikwon Corporation is leading manufacturer of Low Voltage (LV) & Medium Voltage (MV) bus duct systems. The Henikwon acquisition brought strong customer base of large corporations to E&A's business and complements its portfolio to make comprehensive offerings for the building and infrastructure segments. It further enhances L&T's presence in South East Asia, India and Middle East markets. Henikwon offers high quality products that comply with international quality standards. The 12,300 sq.mt. manufacturing unit is located in Selangor state of Malaysia. The Saudi economy is expected to grow slowly at 1.9 % in calendar year 2016 down from 3.4% in calendar year 2015. The non-oil private sector will continue to grow albeit at a slower pace, as reduced government spending will most likely have a negative impact on The Company is working to stabilise 'S-line' range of bus duct systems, and has initiated marketing efforts in select countries. Further, it is working on development of non-segregated variants, for the LV segment, which is being specified by the oil & gas industry. Qatar remains in focus due to less dependency on oil and the FIFA World Cup 2022. The Company will continue to focus on its existing range (SCM) and strengthen its ADDC and SEWA segment projects. The constituents of E&A business are two Strategic Business Groups (SBGS) and designated subsidiaries. In India both the SBGs have under them two Business Units(Bus) each. The Products SBG includes Electrical Standard Products (ESP) and Metering & Protection System (MPS) business units while Projects SBG comprises Electrical Systems & Equipment (ESE) and Control & Automation (C&A) business units respectively. The overall business environment and market sentiment is cautious. Most of the regional economies are yet to get into higher growth orbit and are presently in the band of 4-5% GDP growth. Significant local opportunities are seen in oil & gas and metro segment. The Company is working on a few metro projects locally as well as within India (Delhi, Chennai) and international markets (Doha, Riyadh). Going into the new financial year, the business is set to consolidate on the financial position achieved during previous year. The business is planning to restructure its sales team to focus on select geographies. Also a permanent business development professional is deployed in its major market of South Korea and the Far East. Products have been aligned/ introduced and priced to meet the market requirements for all sectors. business activity. However, growth in all sectors in the non-oil private economy will remain positive. The fiscal year 2016-17 will be a tough year for LTEASA. The key focus areas for LTEASA during the year would be getting LV and MV approvals from SEC, Aramco and other consultants in KSA, providing better reach in Saudi market. As major growth opportunities will be generated from non-oil markets, the key focus area would be the infrastructure sector, especially mega metro and airport projects. During the year, Servowatch successfully completed FAT for MARS Project (Tankers for Re-fuelling UK Royal Navy built by DSME in South Korea) using indigenous software Winmon 9. The projects included a total of four vessels, first of which underwent sea trials. Successful commission of the first vessel will give Servowatch a huge reference for large naval vessel systems and open doors to other markets. Servowatch partners with leading manufacturers of hardware and software to allow flexibility in meeting project requirements, and providing full through life product support capability. SERVOWATCH SYSTEMS LTD, UK Servowatch is marine automation company based in Maldon Essex UK, acquired by L&T in April 2012. Servowatch is recognized as a world leading system integrator for modern naval platforms, super yacht installations and commercial marine operators. its unique software design allows integration of third-party software into a common operator platform environment. 'Task Orientation' for specific user profiles with portability from station to station creates a highly redundant multifunctional operating environment. Typical applications include machinery, navigation, radar, electronic charting, internal and external communications, tactical sensors, auxiliary ship systems, camera networks, mission logging and playback functionality. The highly trained and professional teams at Servowatch offer an extensive range of services. Which L&T Infotech's global headquarters in Mumbai. The Company's solutions focus on the convergence of the physical and digital worlds, improving efficiencies for its clients. The Group's Information Technology business housed in L&T Infotech Limited ('L&T Infotech') forms part of the IT & Technology Services segment of Larsen & Toubro. L&T Infotech is one of India's global IT services and solutions companies. In 2015, NASSCOM ranked the Company as the sixth largest Indian IT services company in terms of export revenues. The company was amongst the top 20 IT service providers globally in 2015 according to the Everest Group's PEAK Matrix for IT service providers. Its clients comprise some of the world's largest and well-known organisations, including 49 of the Fortune Global 500 companies. L&T Infotech offers an extensive range of IT services to its clients in diverse industries such as banking and financial services, insurance, energy and process, consumer packaged goods, retail and pharmaceuticals, media and entertainment, hi-tech and consumer electronics and automotive and aerospace. Its range of services includes application development, maintenance and outsourcing, enterprise solutions, infrastructure management services, testing, digital solutions and platform-based solutions. The company serves its clients across these industries, leveraging 187 its domain expertise, diverse technological capabilities, wide geographical reach, an efficient global delivery model, thought partnership and 'new age' digital offerings. L&T Infotech was incorporated in 1996 and is headquartered in Mumbai, India. It leverages the strengths and heritage of its promoter. The L&T Group provides access to professionals with deep industry knowledge in the sectors in which the Company does business. L&T Infotech has also inherited from L&T group its corporate and business culture and corporate governance practices, which places the Company in good stead in relation to its business. In addition, it benefits from the commonality of business verticals with its promoter. Overview: Significant Initiatives: The Company serves clients across verticals such as BFS, Insurance, Energy, CPG, Retail & Pharma, Hi-Tec, Media and Entertainment and Audit Aero & Others. Business Environment: The Global IT-BPM Market as noted by NASSCOM saw increasing number of firms using custom application development as a means to enhance customer service with tailored solutions. The need to differentiate their company and competitors and the need to comply with regulations and industry mandates are driving growth in the segment. CADM services are using cloud computing and mobility considered as a strategic tool to enhance business processes and improve customer satisfaction and acquisition. SMAC adoption across industries became all pervasive driving growth in IT services. The year was marked by spinoffs, buyouts, divestitures and focused acquisitions among service providers which helped bolster the bottom line for the vendors and their customers. Technology M&A deals in volume registered a record high of USD 713 Bn. in 2015 on a global basis. Driven by increased competition, some other firms took the restructuring of businesses route to improve profits and reduce costs. Information Technology Business • Focus on emerging technologies: L&T Infotech has established business relationships with a number of players in the digital space and, in addition to its existing capabilities, such relationships will further enable it to develop sophisticated ecosystems along with its partners as a value-added proposition to its clients. Further, it plans to invest seed capital in startups, which will allow them to benefit from their innovation capabilities and digital offerings. The Company believes this will help them enhance their digital offerings and in turn, give a platform and opportunity to scale up to startups. In addition, as part of its strategic focus in India, it is inter alia positioning itself to cater to 'Smart Cities' opportunities that it has identified therein. L&T Infotech regularly tracks new technologies, industry segments and market trends in the IT solutions market and believes that digitalisation will increasingly become systematically critical in the future. It looks to assist its clients to 'engage the future' through its focus on emerging technologies. The Company invests in new technologies and tracks new business trends, and believes that every industry will increasingly adopt digital as a key component of its overall IT solutions and services expenditure. It defines digital business as solutions and services offered to clients through the fusion of 'new age' technologies for disruptive business transformations, including as part of its Thought PartnershipⓇ program. Such transformations are enabled by creating innovative business models leading to enhancing client experiences and greater operational efficiencies. Over the past few years, the Company has aligned its areas of expertise and have created focused initiatives in developing capabilities in emerging technologies, which it eventually intends to offer under a specific brand. The Company's investment in the digital practice is focused on providing its clients with a competitive edge, as well as giving them a competitive advantage in the market. Its digital assets have received multiple industry recognitions. • Focus on a targeted client portfolio and higher total contract values: L&T Infotech continues building long-term sustainable 188 The Company's growth has been marked by significant expansion of business verticals and geographies in which it does business. Besides India, it provides services globally from North America, Europe, Asia Pacific and the rest of the world. As of March 31, 2016, the Company has 22 Delivery Centres and 44 sales offices globally. 186 The Indian Government has recently announced that Bharat Stage-VI (BS-VI) emission norms would be enforced from April 2020 In the Middle East, gas processing projects are expected to be awarded in UAE, Oman and Saudi Arabia. Large value cross country crude oil & gas pipeline prospects are expected in Saudi Arabia, Kuwait and Oman. Mega Integrated Refining cum Petrochemical Projects are expected in Saudi Arabia, and fertiliser projects in Oman. Further, with the prospective moderation of sanctions, Iran is expected to offer good growth opportunities. growth. Risk Management is an integral part of the overall governance process to identify, segregate, mitigate, control and monitor various risks at business, individual bid and operational levels. The risk management policy and guidelines incorporates global best practices and procedures which enables building the ability to anticipate challenges and opportunities for achieving strategic objectives. The major risks such as limited investments due to falling oil prices, onerous contract terms by client, tight schedule, stringent localization requirements, forex exposure, etc. are mitigated through specific actions like operational excellence initiatives, alliances, cost optimisation, improved customer relationship, compliance with stringent HSE standards, proactive forex hedging, strong contract & claims management and identification of key personnel and talent at the pre-bid stage. All projects undergo a structured pre-bid risk review by the Apex Risk Management Committee (ARMC) at business and at corporate level as per well-defined authorisation limits. This process involves a detailed assessment of risks and deliberation on mitigation measures by the ARMC. Periodically risk reviews are conducted for ongoing projects. Project managers/ selected project team members undergo a certified Risk Induction Programme conducted by ECRI (Engineering & Construction Risk Institute) on a continuous basis to become acquainted with industry's best practices. During the year, a dedicated Business Assurance Group has been established to institutionalise execution risk management on a pro-active basis. A strong Internal Control framework is an important part of operations and corporate governance. The management has established internal control systems commensurate with the size and complexity of the business. The internal control manual provides a structured approach for identification, rectification, monitoring and reporting of gaps in the internal control systems and processes. The Group follows well documented Standard Operating Procedures (SOPs) and the operating effectiveness of various controls is periodically tested and deficiencies, if any, are promptly rectified. During the year, an in-depth exercise for evaluating the adequacy of Internal Financial Controls and their Operating Effectiveness was undertaken, as per the provisions of Companies Act 2013. This activity included understanding and testing of Internal Financial Controls and evaluating its operating effectiveness based on the assessed risk factors. Human Resource Development: The Group has a set of unique mix of experienced professionals and young dynamic passionate individuals working in various disciplines. HR efforts are targeted to ensure that the right talent is sourced, selected, trained and are deployed across the organisation. In line with the business transformation, HR has also initiated its transformation exercise. The Group leverages on technology and automation by using SAP & multiple in-house IT capabilities for managing various 'Hire to Retire' processes. The specially designed 'Seven Step Leadership Development Programs' for high potential employees strengthen the leadership pipeline of the organisation at various levels. The Group utilises various state-of-art training infrastructure and resources like L&T Leadership Development Academy, Institute of Project Management and Technical training centres to train its employees on Project management skills, functional and leadership competencies. The business also has tie ups with premier institutes like IIMs, XLRI and IITs for conducting 'Core Development Programs', EMBA, M. Tech and e-learning programmes (Harvard, DDI and other certification programme) at regular intervals. The Group continues to foster a high performance culture by recognising and rewarding good performers, and providing them with career development opportunities. The CEO & MD periodically interacts with employees through various forums like 'Town Hall', webcast, video conferencing and emails. Various other interventions and initiatives like ICONS, Long Service Awards, Team Building Workshops, non- monetary recognition events, etc. are periodically undertaken to enhance employee motivation. Health Safety Environment (HSE) & Sustainability: Health, Safety & Environment is the cornerstone of the Group's business philosophy. The business strives for continuous improvement for 184 LARSEN & TOUBRO the protection and development of health, safety, and environmental assets of its employees and stakeholders. During the year, five projects were safely commissioned without any significant incidents. The business actively participated in Global HSE Conference and Golden Jubilee celebration of Directorate General, Factory Advice Service and Labour Institutes (DGFASLI). During the year, as a part of Corporate HSE Plan, cross-functional HSE audits were initiated across all business units. All HSE Systems and procedures were IT enabled to make them more user friendly. Senior Management involvement and visibility was reinforced through systematic senior management site safety observation. To spread safety awareness, various theme based campaigns were observed on various important dates during the year. Lessons learnt during project execution were shared throughout the organisation by way of well documented HSE Learnings and HSE alerts. Various HSE training programs were held, and motivational schemes were instituted. with section 135 of the Companies Act 2013. In-line with Group's theme "Building India's Social Infrastructure" L&T Hydrocarbon is committed to implementing projects that will contribute to the quality of life, including schools, hospitals, skill training institutes, water supply and distribution and sanitation facilities. During the year, the business won several national and international accolades from eminent institutions and clients like National Safety Council - Maharashtra Chapter, British Gas, Petronas Carigali Myanmar, Frost and Sullivan (F&S) & The Economic Times India Manufacturing Excellence Award (IMEA). Outlook: Oil prices are expected to hover in the range of USD 40 to 50 per barrel in the near future. In the 900 TPD Ammonia plant modernisation project for National Fertilizers Limited - one of many onshore projects executed on a License+EPC basis. 185 domestic offshore sector, ONGC has indicated that it will be investing close to USD 5 billion in next 4 years on development of its deepwater field KG/98-2 on the east coast of India. This will provide significant opportunities to the Group's offshore and fabrication verticals over the medium term, given its strategically located Kattupalli yard on the east coast and the recent tie-up with McDermott to develop cost effective subsea solutions. The Long Term Agreement signed with Saudi Aramco is expected to provide large offshore project wins in Middle East in the near future. which is a year earlier than the planned roll-out target of 2021. The Government has decided to altogether skip Stage-V and directly adopt BS-VI which are equivalent to Euro 6 norms. To meet these norms, the Public Sector refineries will need to spend an estimated * 68000 crore on upgradation projects, providing visibility of order prospects for the next 2 years. The Government has also cleared a comprehensive Urea Policy 2015 which will incentivize indigenous production of urea and promote energy efficiency by encouraging units to adopt the latest technology. Under the policy, the Government has also announced revival of closed Public Sector urea units having capacity of 26 lakh tonnes located across the country like Talcher, Ramagundam, Barauni, Gorakhpur, etc. Private sector companies are also expected to initiate brownfield expansion projects which will provide opportunities over medium term. Habshan-Ruwais-Shuweihat gas pipeline project built on an EPC basis for GASCO, Abu Dhabi. The Company has released its Sustainability Report - "Journey Begins" in December 2015 which covers various initiatives taken across the Company and highlights need to enhance performance across all sustainability parameters - safety, energy, water conservation and productivity. As a responsible Corporate Citizen, the Group is aware of its responsibility towards social upliftment which is an integral part of the corporate culture. The Group's CSR Framework lays down the principles and programs for the community at large, in accordance The business has repeatedly delivered, large, critical and complex projects, globally, by virtue of its experienced and highly skilled Hydrocarbon Construction Services: Upgrade project executed on an EPC basis for export gas compression facilities of Dolphin Energy, Qatar. global companies such as ONGC, GSPC, British Gas, ADMA OPCO, Bunduq, Qatar Petroleum, Maersk Oil Qatar, PTTEP, Petronas and Songas. The joint ventures with Sapura Crest Petroleum Bhd., Malaysia, viz., L&T Sapura Shipping Private Limited, owns and operates a Heavy Lift Pipe Lay Vessel, and L&T Sapura Offshore Private Limited provides offshore installation services. LTHE'S wholly owned subsidiary, L&T-Valdel Engineering Limited, Bengaluru, renders dedicated engineering services for offshore projects. The business has made a foray into the deepwater segment with a long term co-operation agreement with McDermott International to develop cost-effective solutions for subsea projects off the east coast of India. The Consortium of McDermott and LTHE bagged an offshore contract for development of ONGC's Vashishta and S1 deepwater fields involving supply and installation of subsea structures in the seabed at water depths ranging from 200 to 700 metres. During the year, the business also secured an EPCI contract from ONGC involving new process platform, well head platform, topside modifications, associated subsea pipelines and a living quarters platform in Bassein Field off India's west coast. In consortium with EMAS AMC, a Singapore based installation contractor, the Company has signed a six year Long Term Agreement with Saudi Aramco, under which the consortium will execute offshore projects in Kingdom of Saudi Arabia. This will enable the Company to tap the large value opportunities in Saudi Arabia over the medium term. Hydrocarbon Onshore: The business provides EPC solutions for a wide range of hydrocarbon projects covering Refining, Petrochemical, Fertiliser (ammonia & urea complexes), On-shore Oil & Gas Processing plants, and cross country pipelines. 180 LARSEN & TOUBRO FCC reactor regenerator section for IOCL at its Paradip Refinery. The business has a track record of successful simultaneous execution of multiple mega projects having diverse technologies from process licensors like UOP, Axens, Haldor Topsoe, CB&I Lummus, Black & Veatch, Ortloff, ExxonMobil, BOC Parsons, Invista & Davy Process Technologies. The vertical's in-house Engineering Centres along with joint venture companies - L&T-Chiyoda Limited for onshore engineering and L&T-Gulf Private Limited for Pipeline engineering enable the vertical to offer complete spectrum of FEED, process and detailed engineering to clients. The Company's subsidiary Larsen Toubro Arabia is registered as In-Kingdom EPC ('IK-EPC') company in Saudi Arabia and addresses onshore In-Kingdom opportunities. The business has executed Lump- Sum Turnkey(LSTK) projects in on-shore Oil & Gas Processing, Refinery & Petrochemical applications for various Indian oil majors like IOCL, MRPL, ONGC, OMPL, BPCL, HPCL, Reliance Industries etc., as well as fertiliser companies like NFL, GNFC, RCF and others. In recent years, the business has also diversified into related areas like Cryogenic Terminal projects, LNG tanks and Regasification plants. Internationally, the business group is prequalified by major international oil & gas producers such as Saudi Aramco, Kuwait Oil Company (KOC), Kuwait National Petroleum Company (KNPC), SOCAR, PETRONAS, CNPC, Dragon Oil in Turkmenistan, Lukoil in Uzbekistan and Sonatrach in Algeria. It has a successful track record of project execution with international bellwethers like Abu Dhabi Gas Industries (GASCO), Petroleum Development Oman (PDO), Petronas, Chemanol, KNPC, etc. During the year, the business has received an EPC contract from Gujarat State Fertilisers & Chemicals Limited for setting up 40k MTA Melamine Plant at Vadodara using process technology from Casale SA. Internationally, the business has bagged twin EPC orders from Petroleum Development Oman LLC (PDO) i.e. Saih Nihayadah Depletion Compression Phase 2 & Kauther Depletion Compression Phase 2 in The business offers turnkey solutions to the Global Offshore Oil & Gas industry encompassing well- head platforms, process platforms and modules, subsea pipelines, brown field developments, jack-up rig refurbishment, floating production storage & off-loading (FPSO) topsides and subsea projects. For more than two decades the business has been successfully executing large offshore platforms and pipeline projects in east and west coasts of India, the Middle East, South East Asia and Africa, for central Oman, to overcome pressure depletion and maintain potential to sustain production. Hydrocarbon Offshore: provides 'design to build' turnkey engineering, procurement and construction solutions for the global Oil & Gas Industry including oil & gas extraction, petroleum refining, chemicals & petrochemicals, fertiliser sectors and cross country pipelines. The existing in-house capabilities enable it to deliver complete end-to-end solutions from front end design through project execution team, world- class HSE practices and culture of excellence. The business has a fully integrated capability chain including in-house engineering, R&D centre, engineering joint ventures, world class modular fabrication facilities and offshore installation capabilities. The principles of Company's business philosophy are striving for excellence in corporate governance, safety standards and quality standards, state-of-the-art IT 179 security practices, on-time delivery and cost competitiveness. The geographic reach of the business spans across Asia, covering Middle-East and South-East Asia. Major facilities in India include Engineering & Project Management Centres at Mumbai, Vadodara, Chennai and Faridabad and Fabrication Yards at Hazira (Surat) and Kattupalli (Chennai). Overseas facilities are located across the Middle East including in UAE (Sharjah), Saudi Arabia (Al-Khobar), Kuwait, Oman (Muscat) and Qatar (Doha). The business also has a major Modular Fabrication Facility at Sohar in Oman held through a subsidiary. The business caters to clients across the hydrocarbon value-chain through its following business verticals: Hydrocarbon Offshore • • Hydrocarbon Onshore . . Hydrocarbon Construction Services Hydrocarbon Engineering Services detail engineering, procurement, fabrication, project management, construction and installation up to commissioning services. The hydrocarbon business is primarily housed in a wholly owned subsidiary, L&T Hydrocarbon Engineering Limited (LTHE) Hydrocarbon Modular Fabrication Services The vertical's major capabilities include heavy lift competency, advanced welding technologies and Quality systems. The business has also invested in strategic construction equipment, a range of pipeline spread equipment, automatic welding machines and other plant and machinery for electro-mechanical construction works. The business has executed projects for major private sector customers like Cairn Energy, Reliance Industries, HPCL Mittal Energy as well as major oil PSUs like BPCL, IOCL, ONGC and international customers like In the domestic sector, the government announced a new Hydrocarbon Exploration & Licencing Policy (HELP) providing for unified open acreage licensing policy, i.e. allowing producers to exploit conventional and unconventional hydrocarbons (CBM/ shale/hydrates) under a single license. Simultaneously, a new gas pricing formula was announced providing for market linked prices for deepwater & Ultra deepwater fields to incentivise exploration activity. During the year, ONGC continued its capex projects notwithstanding the fall in crude prices. However, predatory pricing was seen from a few South East Asian players with idle capacity. On the flip side, lower crude prices have led to a boost in refining and petrochemical expansion plans. Reduced naphtha and gas prices I have also led to the revival of LNG Re-gasification Terminal projects & fertiliser projects, primarily, in the nature of upgradation and energy efficiency. In light of the above challenging external environment and multiple headwinds, the business has done well to maintain order inflow at previous year levels of approx. 10000 crore. Significant Initiatives: Fiscal year 2015-16 has been a year of transformation and turnaround for the hydrocarbon business. There were several top leadership changes starting with appointment of Mr. Subramanian Sarma, a veteran in global oil & gas contracting industry, as the CEO & MD of L&T Hydrocarbon Engineering Limited. A business re-organisation and transformation plan was unveiled during the year with a view to avoid silos, reduce costs, improve competitiveness and aid profitable execution. The entire hydrocarbon business operations have been re-grouped as five business verticals with targeted revenue streams, catering to global opportunities across the hydrocarbon value chain, including creation of two new verticals, viz., Modular Fabrication Services & Engineering Services to provide growth impetus for the future. Consolidation of erstwhile geographically dispersed operations into India-centric verticals has been accomplished. A new risk/reward sharing model has been adopted to create better alignment amongst verticals and rationalisation of profit centers. Tie-ups with global majors are under negotiation to address Indian deepwater projects, subsea manifolds, engineering services, augment utilisation of yards, etc. Manpower rationalisation and relocation initiatives are expected to result in annualised savings of over 200 crore from 2016-17 onwards. The business development set-up has been consolidated with distinct focus groups for product as well as geographies. The proposal and estimation group has been centralised and the estimation process has been streamlined to improve bid-win ratio. Initiatives have also been undertaken for consolidating key resources to create centres of excellence and identifying and addressing leadership gaps. As a result of these initiatives, the hydrocarbon segment is poised to improve its bottom-line significantly from 2016-17 onwards. Risk Management & Internal Controls: Pro-active Risk Management has been identified as a key strategic initiative to ensure sustainable 183 The Hydrocarbon business Overview: Mumbai High North (MHN) complex of ONGC, executed on EPCI basis. The massive complex comprises a process platform (26,500 MT topside + 13,500 MT jacket) a living quarters platform (6,500 MT topside + 13,500 MT jacket), two flare platforms and four bridges. PLATFORM Hydrocarbon Business Business Environment: The volatility and sharp fall in crude oil prices during the year created an environment of investment uncertainty for the entire hydrocarbon industry, with international offshore segment being affected the most. New field development plans were deferred and most of the private sector players announced reduction in capex spends. This shrinkage of market opportunities is less pronounced in the Middle East. Gas-based projects have been relatively less affected by the decline in oil prices and national oil companies continue to tender these type of projects. However, there is an increasing thrust on local 'in-country' value add by governments and national oil companies. The vertical renders turnkey construction services for refineries, petrochemicals, chemical plants, fertilizers, gas gathering stations, crude oil & gas terminals and underground cavern storage systems for LPG and cross country oil & gas pipelines. sector. The Engineering Services vertical has a large resource pool of over 3.5 million engineering man hours. A large portfolio of industry- standard software tools, robust IT infrastructure and in-house R&D facility further augment its capabilities. Benchmarked through leading certification 181 Abu Dhabi Company for Onshore Oil Operations (ADCO), Abu Dhabi Oil Refining Company (TAKREER). The Company's country specific joint ventures with local partners render construction support to international onshore projects - Larsen & Toubro Electromech LLC in Oman, Larsen & Toubro ATCO Saudia LLC in Saudi Arabia, Larsen & Toubro Kuwait Construction General Contracting WLL in Kuwait. During the year, the business received an order for construction of onshore Gas Pipelines & Associated facilities including Pipe-laying works in western part of India. Hydrocarbon Modular Fabrication Services: The Modular Fabrication Services vertical offers comprehensive Engineering, Procurement, Fabrication (EPF) modular solutions primarily in oil & gas and petrochemical sectors, and renders fabrication support to offshore and onshore verticals. The vertical's two strategically located state-of-the-art fabrication facilities in India, ensure round the year delivery of process platforms, wellhead platforms, modular structures, heavy jackets and oil rigs. The Hazira yard near Surat caters to the west coast of India and Kattupalli yard near Chennai caters to the east coast of India and South East Asia. The Company's Oman subsidiary caters to opportunities in Middle East arising from UAE, Oman, Qatar and Saudi Arabia. The three yards altogether have a total fabrication capacity of about 150000 MT per year. During the year, the business has received a number of orders for fabrication and supply of Piping systems, Manifold Skids, etc. for supply to international locations ranging from Middle East to the Americas. Hydrocarbon Engineering Services: The Engineering Services vertical offers comprehensive solutions covering the entire spectrum of engineering across the oil & gas value chain, from two Centres of Excellence within India: the Technology Centre in Mumbai and the Engineering Centre at Faridabad near Delhi within the National Capital Region (NCR). The Mumbai Centre primarily focuses on Front End Engineering Design (FEED), advanced engineering solutions, specialised studies and engineering for special applications (such as reformers, cryogenic systems and modular solutions) while the Faridabad Centre specialises in a broad range of detailed engineering and project management functions. 3-D CAD model of a petrochemical complex executed by L&T Hydrocarbon Engineering. 182 LARSEN & TOUBRO and accreditation systems, the engineering work processes offer consistent product quality with on-time delivery. Backed by decades of experience and rich domain knowledge, the team is geared to provide value-added services to customers across the hydrocarbon CHENNAI KANCHEEPURAM KATTUPALLI Learning prepares gen-next for the future. Architectural and engineering activities and related technical consultancy 18 Smart World & Shipbuilding Hyderabad Metro Heavy Civil Transportation Heavy Infrastructure Infrastructure Engineering Power Affairs Real estate activities with own or leased property Corporate Power Corporate Infrastructure Corporate Corporate Development Finance & Development HR Accounts Projects Defence • Metros • Defence EPC Projects • Development • Finance • Roads Centre of Thermal Construction / erection and maintenance of power, telecommunication and transmission lines Construction and maintenance of industrial facilities such as refineries, chemical plants, etc. Wholesale of construction and civil engineering machinery and equipment Construction and maintenance of railways and rail-bridges Description Manufacture of electric motors, generators, transformers and electricity distribution and control apparatus Manufacture of parts and accessories for machinery / equipment used by construction and mining industries Building of commercial vessels, passenger vessels, ferry boats, cargo ships, tankers, tugs, hovercraft (except recreation type hovercraft), etc. Construction of floating or submersible drilling platforms 410 421 4100 4210 30112 30114 41001 42101 Construction and maintenance of power plants Building of warships and scientific investigation ships, etc. 42102 4220 42201 42202 42901 465 4659 46594 681 6810 68100 711 7110 71100 Construction of buildings carried out on own-account basis or on a fee or contract basis Construction and maintenance of motorways, streets, roads, other vehicular and pedestrian ways, highways, bridges, tunnels and subways. 422 30111 • Ports Solutions Defence & Aerospace • Special Projects, Equipments & Systems •Weapon & Land Systems • Flight Systems and help the nation to reap the benefits of the demographic dividend of having a large young population, L&T has set up vocational institutes and has in place programmes that impart skills in several trades to enhance the employability of underprivileged youth. Subsidiaries • Conventional Submarines Joint Ventures • L&T • Railway Construction •Railway Systems • Qatar Metro Job JV • Arriyadh Metro Project Package Civil Group UJV Infrastructure Engineering Ltd. • Hitech Rock Products & Aggregates Ltd. Subsidiaries • L&T Cassidian Gold Line Underground • Security (Middle East) • Roads Runways & Elevated Corridors (Domestic) • Communication Network & Telecom Infrastructure • Smart Infrastructure • Surface Ships (New Construction & Refit) • Transportation • Conventional Subsidiary •L&T Shipbuilding • Special Projects (Hydel, Ports, Tunnels & Mega Projects) • Nuclear Construction • Special Bridges L&T Geostructure LLP Submarines (Refit) 3011 301 2824 28246 LARSEN & TOUBRO 14 Our Integrated Community Many villages in India have to struggle for water and sanitation. The unavailability of safe drinking water leads to increasing morbidity and mortality rates. It also negatively impacts educational attainments, migration and livelihood opportunities. The Joy of Clean Water others is our gift to ourselves. Life is a circle, and the joy we give - and ensure their success. sanitation, education, health and skill development. For our CSR programmes, the implementation process is as critical as our goals and their impact. We view our beneficiaries as partners on a journey towards betterment. Developmental plans are devised in consultation with NGOs who understand their needs best. Architects of their own future, the disadvantaged are intensely motivated to sustain our programmes Development Programme has been launched in three states, to begin with, and focuses on holistic development in water and sanitation, education, health and skill development, based on need-assessment. We are working towards enabling water-stressed rural communities to be self-sufficient in water for drinking, sanitation and agriculture. Since the Company's inception, care and concern for the underprivileged communities has been a core value at L&T. Reaching out to the disadvantaged with a view to positively impacting the quality of their lives is a spontaneous and natural process across L&T's establishments. Through our CSR programmes, we contribute to the nation's developmental agenda as well as align with the UN Social Development Goals and address the most pressing needs - water, Corporate Social Responsibility LARSEN & TOUBRO Note: Map is broadly representative of L&T's presence in markets worldwide. For details of establishments within India, please refer to 'Nationwide Network'. ■ Agents ◆ Manufacturing / Fabrication Facilities ▲ Product & Equipment Supply Engineering & Construction Projects ✰ Offices 13 Education and skill development are the foundations upon which self-sufficient livelihoods are built. Global Presence In several of Maharashtra's drought-prone agricultural areas, The Joy of Learning शिवण 16 To empower the marginalized youth of the country with marketable skills The Joy of Self-sufficiency By putting smiles on the faces of mothers and children, by preventing, detecting and curing disease, by educating people on matters pertaining to health, we help spread joy. Artificial kidney dialysis centres for the underprivileged have been set up at L&T's Health Centres at Chennai, Mumbai, Thane and Vadodara. initiatives include awareness camps (particularly for high-risk groups), Anti-Retroviral Therapy, counselling and testing. L&T's HIV/AIDS management Regular health check-up camps are held in schools and pre-schools. we have built check dams to ensure water supply during the dry months. Cultivating two crops a year instead of one, the villagers now need not migrate to cities for seasonal work. By helping meet the basic need for water and sanitation, we lay the foundation for progress and development. We have set up community health centres at our facilities at Ahmednagar, Chennai, Coimbatore, Kansbahal, Mumbai, Surat and Vadodara. They focus on reproductive health, and conduct diagnostic and clinical camps and programmes that support maternal and child healthcare, immunisation and health education. Timely access to quality health care The Joy of Good Health We believe that education is best imbibed when presented in ways that spark interest. We, therefore, infuse joy into learning in many small ways. Our Science-on-Wheels van visits schools, giving children the opportunity to experience the thrill of hands-on experiments. Summer camps and sports activities help pupils develop social skills. Extra-curricular outings help widen children's horizons. Teacher' schools help children improve their learning rates. We support pre-schools, set up computer laboratories, provide teaching aids and uniforms and augment teacher capacity. Our initiatives in mother-and-child care, women's health and skill development help empower underprivileged women. 15 We enrich education in primary schools through innovative learning methodologies. We enrich the school environment by providing infrastructure ranging from building classrooms and playgrounds as well as equipping them with digital learning tools, benefitting rural and urban schools serving impoverished communities. After-hours 'Single providing education, developing infrastructure and enhancing the learning experience. Our social interventions covering educational initiatives focus on can be the core differential that enables families to lead productive and prosperous lives. Often, economically backward communities are further pushed into poverty due to poor health and the rising costs of medical care. Part of L&T's Corporate Social Initiatives * 'Campus' denotes facilities for design and manufacture ▲ Construction Skills Training Institutes* cause. L&Teers dedicatedly teach English and Maths to children at Community Learning Centres and have been mentoring them as well, encouraging them to realise their potential despite the odds. Short science films have been dubbed into regional languages so that many more children can access quality science education. Educational trips and creativity workshops organised by L&Teers are both entertaining and educational. Blood donations and community health camps saw the participation of many employees. L&T-ites passionately supported various causes through Marathons and melas in which items made by the underprivileged are displayed. Volunteering activities help our people to relate better to each other as well as to the organisation, and gives them a sense of deep satisfaction. 17 ANNUAL BUSINESS RESPONSIBILITY REPORT 2015-16 Sustainability is our constant endeavour to create products, services and environs that will enable all L&T stakeholders, society and the planet to thrive, today and tomorrow. The Company is focused on meeting the needs of the future with the resources of the present. This report conforms to the Business Responsibility Reporting (BRR) requirement of the Securities & Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('SEBI LODR') and the National Voluntary guidelines (NVG) on Social, Environmental and Economic Responsibilities of Business released by the Ministry of Corporate Affairs, India. Furthermore, L&T publishes its sustainability performance in a Sustainability Report which is prepared in accordance with Global Reporting Initiative (GRI) guidelines and is externally assured. All the Sustainability Reports published till date can be accessed at www.Lntsustainability.com. SECTION A: GENERAL INFORMATION ABOUT THE COMPANY We are proud of our employees, our L&Teers, who contribute resources such as time and skills for the benefit of the underprivileged. All across our facilities, we have been providing employees with more and more opportunities to volunteer and boost employee engagement with a social 1. Corporate Identity Number (CIN) of the Company: L99999MH1946PLC004768 3. Registered address: L&T House, Ballard Estate, Mumbai 400 001, India 4. Website: www.Larsentoubro.com 5. E-mail id: sustainability-ehs@Larsentoubro.com 6. Financial Year reported: 1st April 2015 - 31st March 2016 7. Sector(s) that the Company is engaged in (industrial activity code-wise): Group Class Sub-Class 271 2710 27104 282 2. Name of the Company: Larsen & Toubro Limited The Joy of L&T-eering Vocational training enables these people to become self-sufficient, elevates their social standing and fills their lives with joy. Our Construction Skills Training Institutes at nine locations impart free training to rural and urban youth in basic construction trades. To empower underprivileged women, we organise vocational training programmes in the areas of tailoring, beautician skills, home nursing and food processing. Trade in hand, they are able to supplement their family income as well as invest in the education and health of their families, especially the children. A Leadership Development Academy Knowledge City • Offices Shipyards Power Plant ■Campus* Registered Office GUWAHATI KOCHI PUDUCHERRY LARSEN & TOUBRO K Venkatesh Yogi Sriram Hasit Joshipura Corporate Shailendra Roy R Shankar Raman D K Sen B Kannan Shivanand Nimbargi Audit Corporate Secretarial Services Communication • Spectrum Infotech Process Plant • Military Communication Systems • Nuclear Power S. N. Subrahmanyan Dy. Managing Director & President Leadership Team A. M. Naik Group Executive Chairman R. Shankar Raman Chief Financial Officer S. N. Roy Sr. Executive Vice President (Power, Heavy Engineering & Defence) Subramanian Sarma CEO & Managing Director (L&T Hydrocarbon Engineering) D. K. Sen Sr. Executive Vice President (Infrastructure) M. V. Satish Sr. Executive Vice President (Buildings, Minerals & Metals) S. C. Bhargava Sr. Vice President (Electrical & Automation) Hasit Joshipura Head Corporate Centre www.Larsentoubro.com 10 Engineering Change Partnering Growth 6 Subsidiary Companies Welfare & Community Services • Corporate Technical Training ⚫ CSR • Corporate Strategy & Lakshya 2021 & Nuclear Acquisitions • Legal Corporate Brand Management & Communi- cations • Corporate Travel & Aviation Corporate Functions Health, L&T partners the nation, industry and people to build a newer, brighter future. In critical sectors, we provide the technology and the engineering and construction expertise to rewrite the rules. And transform glorious vision into glittering reality. LARSEN & TOUBRO SERAMPORE JAMSHEDPUR KOLKATA ⚫ ■ ROURKELA CUTTACK▲ ◆ NAGPUR ⚫ RAIPUR BHUBANESWAR ⚫ AHMEDNAGAR TALEGAON ● PUNE ▲ HYDERABAD BENGALURU MYSORE COIMBATORE PULICAT ● VARANASI Technology | Engineering | Projects Construction | Manufacturing ● LUCKNOW MUMBAI PANVEL O Regd. Office: Larsen & Toubro Limited, L&T House, N. M. Marg, Ballard Estate, Mumbai - 400 001, INDIA CIN: L99999MH1946PLC004768 12 Nationwide Network This pictorial representation does not purport to be the political map of India. RAJPURA ● CHANDIGARH ▲ NEW DELHI FARIDABAD ⚫ JAIPUR ▲ AHMEDABAD VADODARA ANKLESHWAR HAZIRA ● BHOPAL PITHAMPUR LONAVALA • Employee • Mergers & Precipitators Mills • Heavy Foundry • Axial fans & Preheaters • Enviro Systems - Flue Gas Desulfurization & Selective Catalytic Reduction Joint Venture • L&T MHPS Boilers • L&T MHPS Turbine Generators • L&T Howden Engineering & Design for Gas & Coal-based Plants Subsidiary • L&T Sargent & Lundy Thermal Power Plant Construction • Pulverising and Hydro Power Plants Nabha Power Limited ⚫ Electrostatic Supercritical and Supercritical Boilers Equipment & Systems Refinery, Cracker, Oil & Gas and Gasification ⚫ Fertilizer, Petrochemicals & Thermal Power • High-Pressure Piping Subsidiaries • L&T Special Steels & Heavy Forgings • L&T Heavy Engineering LLC, Oman • Coal-based Projects • Gas-based Projects Manufacturing • Ultra • Ultra Supercritical and Supercritical Turbines & Generators • Accounts •Treasury LARSEN & TOUBRO Management • Risk Relations Industrial Corporate Management Administrative Services •General & of Powai Campus & Transmission • Power • Metros • Insurance • Taxation Relations • Investor • Corporate Infrastructure Of particular note is the level of new business done by the L&T IDF during 26% 29% 60%- 28% 18% 48% 32% 37% 32% On the assets quality front, the Wholesale Platform's management has remained pro-active in dealing with the stressed assets portfolio. However, given the rather slow economic revival coupled with the highly leveraged position of promoters/ borrowers, the challenges being faced by all lenders are not expected to abate in the near term. Nevertheless, the Wholesale Platform's on-going strategy of pursuing resolutions through closer co-ordination with both promoters and co-lenders such that credit costs are brought down will be continued. 22% 17% 100%-5% 4% 2% 5% 3% 3% The Wholesale Platform has evolved from being a corporate lender to a specialised project financier and focused on operating projects to balance the overall risk of the portfolio. - 29% element of underlying risk in the portfolio. 80%- 40%- 0%+ 47% • Zinnov says, 'most important aspect of LTTS' success story is nurturing curiosity towards technology innovation within the organisation and among During the year, the Company's strategy of building scale in core funds, both on the equity and debt side paid rich dividends as the number of funds with AUM of more than 1000 crore (ex-Liquid and Ultra) increased to 7 (5 equity and 2 debt) from 3 in the previous year. 2015-16 with an overall market share of 2.01%. During 2015-16, the Investment Management business of the Company continued the momentum from 2014-15 and managed to grow at a better pace than the industry. The growth was contributed by equity assets which grew 21% over the previous year while debt assets grew at an encouraging 13%. The equity mix for the company increased to 44% (Equity and Arbitrage) this year from 42% in the previous year thereby leading to an increase in equity market share to 2.59% from 2.4%. The asset growth and increase in market share was a result of strong gross and net sales, acceptance amongst the investor community as well as quality fund performance. The company closed as compared to 22497 crore for the corresponding period in the previous year. This was achieved through a combination of consistent fund performance, building scale in existing product offerings and improving acceptance in various distribution channels. The Investment Management business of the Company is carried out through L&T Investment Management Limited (L&TIM), a wholly-owned subsidiary. During the period under review, average assets under management (AAUM) grew by 15% to 25945 crore for the quarter ended March, 2016 Investment Management Business: Equity & Investments 27% Operational Projects U/C Projects Corporate FY11 FY12 FY13 FY14 FY15 FY16 T Consequently, renewable energy, annuity and toll road and transmission projects - which constitute the Wholesale Platform's niche business areas - accounted for a major part of the disbursements made during 2015-16. Further, the focus has been on ensuring that operational projects comprise a significantly high proportion of total loan assets so as to contain well the 21% 37% 35% 31% 20%- 61% the year. Its book has recorded a sharp growth wherein the business assets as at March 31, 2016 crossed the 2350 crore mark as compared to a modest 350 crore as the end of previous year. This was attributable inter alia to more number of operational PPP projects now becoming eligible to seek assistance from L&T IDF consequent to RBI's decision to include additional sectors that can be financed by L&T IDF without execution of a tripartite agreement. Notwithstanding this liberalised regulation, it would be L&T IDF's endeavour to ensure an optimal blend of operational PPP projects in its portfolio so as to preserve its AAA rating. L&T Infra Finance has emerged as one of India's leading financiers in key sectors, including renewable energy. In the mid and large corporate segment, the Company adopted a selective strategy for its corporate loans and leases and offered credit only to well-rated companies with tight monitoring of loan usage. The Wholesale Platform team, which possesses the requisite skill set and experience, has over the years, honed its project appraisal skills such that it has emerged as a preferred choice for mid-sized infra players particularly those setting up solar and wind power projects. Its robust, internally developed risk assessment framework enables the Platform to offer to underwrite entire term debt needs of meritorious renewable power projects. Given that implementation timelines for such projects are rather fine, this offering of one-stop-debt funding solution - with suitably structured tenors, reflective of realistic assessment cash-flows - enables the developers compress their project gestation periods and thus enhance their equity returns. Similarly, under L&T IDF's lead, successfully operating road projects are offered optimally priced refinance packages - often having extended tenures that are based on conservative estimates of the (residual) economic life of projects. 39% 34% 35% 41% Mutual fund investments are subject to market risks, read all scheme related documents carefully. Wealth Management Business: The Company's Wealth Management business is carried 198 loans (S&LCV) Car loans Commercial assets (CE & CV) loans The Company has been realigning its portfolio towards B2C businesses as compared to B2B businesses. The Company believes that through this L&T Housing Finance fulfills the desire for home ownership in 44 markets across the country. 196 LARSEN & TOUBRO Our micro-finance business has uplifted and empowered over 8,00,000 rural women. be able to deliver an enhanced customer experience. It has already considerably advanced its credit delivery processes by developing parameterised lending models that ensure a fast turnaround time. 60%- 40% 4% 8% 2% 11% 10% 40% 40% 42% and financing structure. The FAS Group, which has been consistently stepping up the range and depth of offerings to clients, works in close coordination with the Debt Capital Market (DCM) Desk. The latter provides structured funding solutions to select clients in the form of innovatively structured Non Convertible Debentures (NCDs)/ Bonds that are initially subscribed in full by one or more entities within the Wholesale Platform and subsequently sold down in smaller tranches to eligible investors. During the year, the FAS Group and DCM Desk together generated an income of 100 crore by way of fees and capital gains. Wholesale Platform: The Wholesale Platform of the Company comprises infrastructure financing and non-infra wholesale financing through three lending entities viz. L&T Infrastructure Finance Company Limited (L&T Infra Finance), L&T FinCorp Limited and L&T Infra Debt Fund Limited (L&T IDF). The Company's Wholesale Platform offers both fund based and fee based products and services. They are designed to efficiently meet term finance needs of infrastructure and industrial projects/ players in India. The Financial Advisory Services (FAS) Group provides advisory services to customers enabling the raising of debt and equity capital from market sources. The team also provides financial structuring solutions to customers to optimise their capital raise liabilities to match growth aspirations in a timely manner, gives the Company a unique market advantage in this segment. processes and the ability to The Microfinance segment is another flagship business of the Company. Robust risk control In the Housing Finance segment, the Company has undertaken several initiatives with an objective to diversify distribution channels, improve customer experience and overall focus on process improvement. It also scaled up the business by increasing geographical spread as well as by increasing its market share in existing markets. Commercial Finance 330 197 The SME segment, especially the supply chain segment, has been fast emerging as another flagship segment for the Company. During the year under review, the Company undertook appropriate investment in technology for this business to During the year 2015-16, with deficient monsoons and mounting delinquencies, the tractor market posed severe challenge to growth. Although the tractor market shrank by 11%, the Company's market share decreased by 3%. Despite a strong tie-up with notable manufacturers, the slowdown in the tractor market let to this decline in market share. To counteract this, Rural Products MFI FY11 FY12 FY13 FY14 FY15 FY16 Housing 2W/Cars Mid-Market+SME CE/CV 15% 19% 19% 23% 25% 19% 0% - 20% 3% 1% -2% 17% 24% 12% 1% 11% 9% the Company focussed on financing pre-owned tractors and refinancing opportunities. This constituted more than 15% of disbursements during the year. In the area of two-wheeler loans, while the industry volume increased by 3% during 2015-16, the Company's volumes grew by 14%, leading to an increase in its market share. This performance was facilitated by better penetration in existing locations and active efforts to extend reach to new markets. In a strategic move, the Company de-emphasised its focus on S&LCV and car loans. Given the extant mismatch in the risk-return paradigm of these products, the Company believes that they are not suited to management's vision of delivering superior return on equity to shareholders. Vehicles' The Company has identified Germany, France and the Nordic region as important markets going forward and it would like to enhance its capabilities and address gaps in language capability, industry expertise, technical expertise and geographic coverage in these 80% Quality Excellence for Product development at the World Quality Congress. • . • 'Certificate of Excellence' from NASSCOM. 'Key vendors in the loT Embedded Space'. Recognised by Gartner among . 193 The Golden Globe Tigers Award for Excellence in Training & Development. ⚫IT: EMC Transformation Award and 'Dataquest Business Technology award'. Awards and Accolades in 2015 - 16: initiatives include an Online Learning Portal and Leadership Development Programs to groom potential leaders right from operational to strategic levels. The state-of-the-art learning centre at Lonavala specialises in personal leadership, building organisational knowledge and ethical business practices. This has created a rich leadership pipeline that supports the fast paced business growth of the company. In the area of talent retention, there is a relentless effort towards developing competencies in technology, domain and processes aligned to customer requirements that helps the Company's employees to stay relevant and realise their potential. Continuous learning Wins Supplier of the Year Award from UTC Aerospace Systems; The employee strength of the Company has grown from 9327 employees in fiscal year 2015 to 9406 employees in 2016. The Company has one of the lowest attrition rate in the industry at around 12%. With the belief system that reflects 'People are our greatest assets', HR practices are focused on creating performance driven environment where innovation and collaboration is encouraged, performance is recognised and employees are motivated to realise their potential. HR is at the core of the Company, influencing change, building culture and developing capabilities. The HR Key HR initiatives: Employees are at the heart of L&T Technology Services' success. The Company has partnered with the Great Place to Work TM institute to transform the workplace and create the perfect culture in which big ideas flourish. The Company has also initiated 'Techleap' a technical career path program for encouraging in-house engineering talent. Engineering services that enhance efficiency, while reducing time-to-market and costs. LARSEN & TOUBRO G 192 Expansion to new geographies and investments in Infrastructure: The Company has established new onshore and nearshore delivery centres in the US and the Middle East. Investing in new Lab facilities: In line with its philosophy to invest in state-of-the-art for concept design and innovation, the Company has set up a number of cutting edge labs including Smart Manufacturing Lab, Global Internet of Things (IoT) Solutions Centre and Material Testing Lab at its facilities. Expanding Services footprint: While the Company is focused on growth verticals like Automotive and Consumer Electronics, it is creating competencies in next-gen Computing and ISV which will give it a scalable growth. It is tapping the enormous market potential in digital engineering and green energy that are driving usage of new age technologies across industries. • . • LTTS is addressing opportunities in the marketplace through a multi-vertical strategy. Key initiatives include: processes are continuously evolving and aligning with the changing business requirements. The HR team is structured into specialised units to respond quickly to the needs of the organisation. also wins ÚTC Supplier Gold title. Celebrates a decade of strong partnership with Danaher. • "LTTS' testing framework is a unique offering to test the interoperability of multiple systems": IDC. customers'. • Company has 'very diversified portfolios among the service providers in terms of industry verticals, service offerings and geographical spread': ARC Advisory. Outlook: With growth of 'loT' in both product and plant segments, the market offers huge opportunities for Smart Products, Smart Manufacturing and Smart Services. This market is to set to reach USD 1.7 Tn. by 2020 according to research firm IDC. With the investments LTTS is making in this space, it is all set to tap and capture this market and be one of the leading engineering service providers globally. With its marquee client base across industry segments, the Company is confident of continuing to grow at a robust pace and increasing its market share across geography and industry segments. 194 Financial Services Business L&T Financial Services' offerings span the geo-socio-economic spectrum and comprise four core business groups - Retail Finance, Wholesale Finance, Investment Management and Wealth Management. The Financial Services business segment comprise retail and corporate finance, housing finance, infrastructure finance, investment and wealth management business carried through the subsidiaries of L&T Finance Holdings Limited. The Financial Services business also includes general insurance which is housed in a wholly-owned subsidiary, L&T General Insurance Company Limited. L&T Finance Holdings L&T Finance Holdings' business organised under verticals structured as the Retail and Wholesale Platform, Investment Management and Wealth Management business, is carried out through its wholly- owned subsidiaries. The Management's focus is to achieve a healthy return on equity (ROE) on a sustainable basis. It has been a conscious decision of the Management to have diversified businesses to protect the overall profitability from the cyclicality of individual businesses. Hence, the Company has focused on comprehensive product offerings. Some of these products have been developed as flagship products. While creating the product-mix, three parameters are taken into account: profitability, scalability and the Company's ability to have clear market advantage in a 195 particular product segment. These three parameters influence the ultimate choice of the Company's product offerings, for which it has earned admiration in the wider marketplace. Business Environment Retail Platform - Retail, Corporate & Housing Finance Business: The business of the retail platform including retail, corporate and housing finance businesses is carried out by the Company's wholly-owned subsidiaries, L&T Finance Limited, Family Credit Limited and L&T Housing Finance Limited. These comprise loans for income generation as well as for the purchase of consumer assets, working capital loans for SMEs, term loans for medium and large companies, loans under micro-finance, loans for purchase of homes and loans against property. The product portfolio under the Retail Platform includes: Mid and Housing Large Enterprises Corporations Microfinance Consumer and Auto Small and Medium Finance Loans Farm 36% equipment chain Loans and leases Home loans Joint liability The Company has been agile in adopting new technology trends and addressing business challenges of customers. This has resulted in a faster growth trajectory compared to peers in the engineering services industry. Investment in new technologies and labs, account mining, operation improvement programs, global delivery models and continued focus on the multi- vertical strategy have proven to be a great success. Significant initiatives: Supply Energy & Efficiency - Power Electronics, Energy Management and WAGES (Water, Air, Gas, Electric, Steam) Engineering. opportunities with large total contract values. It intends to originate large engagements by either identifying opportunities with its client accounts or by targeting new clients whose existing engagements with IT vendors will be up for renewal. It plans to achieve a higher value client portfolio by focusing on annuity applications and infrastructure management service deals, which tend to be long-term in nature. L&T Infotech The Company is targeting clients who have the potential to offer business relationships with its clients to generate greater revenues. This involves inter alia increasing the scope of engagements with its existing clients; selling additional services to them; deploying project managers, delivery specialists and other professionals to provide value-added business solutions; and eventually become a thought partner with them in terms of their existing and future business needs by identifying priority solutions in consultation with industry experts.It has a track record of high client retention and as its client relationships matures and deepens, it seeks to expand the scope of services offered to those clients to achieve incremental revenue growth. Its ability to establish and strengthen client relationships and expand the scope of services it offers to clients will help grow its revenues and profits. L&T Infotech's facility in Bengaluru. LARSEN & TOUBRO loans loans finance Two-wheeler Term loans Loan against Loan Micro loans securities Expand focus on infrastructure management service (IMS) offerings: against loans Small Warehouse Loans for & Light Receipt construction shift, it will increase yields while at the same time dispersing the risk that is inherent in B2B businesses of being lumpy. 100% 8% 5% 16% 27% Imaging & video - Imaging Algorithms, Edge Detection, Video Surveillance and ADAS (Advanced Driver Assistance Systems). individual L&T Infotech's IMS service practice offers a wide spectrum of end-to-end services covering IT infrastructure consulting, design, managed services, migration services, operational support, desktop support, and Cloud enablement, hosting and migration. It aims to leverage its 'Business 1stTM' approach with respect to IMS, which provides extensive services to property Expand geographical presence: L&T Infotech markets and distributes its solutions directly through its global delivery model. It has historically been dependent on North America and Europe for most of its revenues. While it intends to continue expanding its presence in the United States and Europe, it also plans to expand its geographical reach in other markets that it has identified as having potential, including Australia, Singapore, Japan, South Africa, India and the Middle East. It is in the process of augmenting its teams in these markets to • Smart Services, Smart Products & Smart Manufacturing - Condition based Monitoring, Remote Guided Services and Smart Wearables, Smart Home Products, Connected Vehicle, Industrial IoT, Augmented Reality and Smart Supply Chain and Logistics. clients inter alia using application development, maintenance, support and testing services, which collectively help its clients automate their business processes through customised service delivery plans that are aligned with their business needs and objectives. Similar to its approach in relation to emerging technologies, the Company has agreements with a number of players in delivering its IMS service offerings in a technologically-agnostic way. This approach is beneficial to clients and helps establish its credibility with them with a view to eventually becoming their thought partners and long-term service providers. In addition, the Company is currently looking for strategic acquisition opportunities in relation to its IMS business. It is specifically looking to acquire a complementary business, technology, service or product that can provide it with access to new markets, capabilities or assets in relation thereto. As technologies converge and find applications across industries, some mega-trends in the ER&D space have emerged. These include: Business Environment: India as an engineering services destination has witnessed enormous growth and has become the global hub for outsourced engineering services. As per NASSCOM, the Engineering Research & Development spend has seen a double-digit growth in recent times and is expected to touch total spends worth USD 850-900 Bn. with exports worth USD 30-38 Bn. by 2020. Further, the addressable market for ER&D Globalisation and Services is expected to increase at a CAGR of 4.3% till 2020. Engineering innovation in digitisation, product life-cycle management, and value- engineering services is creating a plethora of new opportunities and business models across industries. addition to technology horizontals like Mechanical Engineering Services and Embedded Systems. In the Global R&D Service Providers Rating 2015, Zinnov Consulting has placed L&T Technology Services in the leadership zone in eleven categories. The Zinnov survey also placed eight of the Company's verticals in the leadership zone - Automotive, Aerospace, Telecommunication, Energy & Utilities, Industrial Automation, Transport, Construction & Heavy Machinery and Medical Industries in With around 19% CAGR (Financial year 2012 to 2016) and over 170 global customers, the company added 17 new clients to its portfolio while maintaining focus on expanding business among existing clients. Of its total client base, 53 clients are Fortune 500 companies. L&T Technology Services has a global reach to its customers through its 12 delivery centers and 25 sales offices. It also has set up domain specific labs that replicates customer's work environment and works closely with the customer R&D wings on product innovation through technology infusion. Its global delivery model of Offshore, Nearshore, Onshore and Client Proximity centres, combined with these labs, provides customers with high quality solutions in reduced timeframes that deliver operating efficiencies and better value for its shareholders. 191 The Company is investing significantly in new age technologies like Engineering Analytics, Digital Engineering and Internet of Things (IoT). A well- defined Digital Engineering strategy leverages its unique strengths along with best-of-breed partners and delivers differentiated solutions for building Smart Products, Smart compared with the other Indian ER&D service providers. product conceptualisation, design and engineering to prototype and certification support services. It has long term engagements with a large number of marquee clients across multiple industry segments like Industrial Products, Medical Devices, Transportation, Telecom and Hi-Tech Computing and Product Software and Process industries. It also has differentiated offerings in the Plant Engineering and Sustenance Services which is unique when A leading player in the global Engineering, Research and Development ('ER&D') space, L&T Technology Services Limited (LTTS) is a wholly-owned subsidiary of Larsen & Toubro Limited and forms part of Group's IT & Technology Services business segment. With L&T's engineering heritage, the Company provides, 'one-stop shop' to its customers across the product engineering life cycle from Overview: Manufacturing and enabling Smart Services. As part of this, the Company has developed IP led solutions like UBIQWeise, i-BEMS that have been launched in the global market. The Company has also filed around 260 patents, some owned by itself and some co-authored with its customers. Technology Services Business further explore the opportunities therein. Headquartered at Knowledge City, Vadodara, L&T Technology Services has delivery centres in Europe, USA and India. It helps clients gain the competitive edge by building smart products, enabling smart manufacturing and offering smart services. With respect to the Company's operations in South Africa, the Nordic region and the Middle East, the Company views these regions as gateways to the rest of Africa, Eastern Europe/the Baltic region and the Middle East/ North Africa region, respectively. As such, it intends to allocate resources to these markets not only for pure-play market opportunities therein, but also as stepping-stones to other client opportunities that it can identify through greater regional experience, expertise and client referrals. viz., in South Africa, it recruits local nationals to assist in market penetration efforts, in addition to complying with local regulatory requirements. In the Middle East, the Company intends to leverage the strong presence of the L&T Group, which is engaged in the oil and gas, construction and transportation sectors. countries. As such, it is also currently contemplating pursuing strategic acquisitions in these markets. L&T Infotech plans to continue developing and investing in frameworks, accelerators, in-house proprietary solutions and customised software processes to drive efficiencies internally. It also plans to increase its profitability by streamlining cost structure with a focus on high employee utilisation and optimising resource mix. To this end, business process digitalisation is important in streamlining cost structure to make them more operationally efficient. It plans to automate various project delivery processes as well as internal IT service processes to enhance human productivity and once various tools are developed in relation thereto, it plans to institutionalise their usage across its business units, which will provide them with the appropriate business platform to be more efficient. The company also plans to introduce specific business process digitalisation initiatives in relation to its business verticals and service lines for them to realise operational cost savings. It believes that the foregoing initiatives will allow them to move up the value chain with respect to services offered. • Focus on greater internal operational efficiency: Outlook Enterprise applications are becoming increasingly consumer oriented with mobile and 'on-the-go' applications' delivery mechanism shifting to cloud-based environment. Demand for migration, porting and re-platforming of traditional on premise application to SaaS from both clients and ISVs provide significant opportunity. Agile testing is growing in acceptance even though it is yet to fully mature. Crowd-sourced testing is gaining popularity and testing automation as well as data management are adapting to the new technology demands. Key drivers for third party and GICs are cloud based testing, IP-led testing, testing-as-a-service, automated testing and testing in domain-specific niche services along with transformational programs using SMAC and IoT. (Source: NASSCOM Report) With the appropriate mix of initiatives in emerging technologies, client focus and geography expansion, L&T Infotech is optimistic of its prospects in the near to medium term. 190 189 crore Order book as at March 31, 2016: 249949 crore Revenue from Operations The Group revenue rose by 11.6% y-o-y to 103522 crore during the year 2015-16. The growth was largely contributed by Infrastructure and Power segments on the back of project execution from opening order book. Financial Services, L&T Infotech and L&T Technology Services recorded healthy y-o-y increase in the Revenue. International revenue contributed 32.2% to revenue as compared to 27.9% in the previous year. HE 207 Others 92762 110000- 11.6% 95000- 85889 25926 ΜΜΗ 80000- Gross Revenue from Operations Power Hydrocarbon 48290 Infra 127236 23954 39116 120000 43956 80000 78946 E&A 116251 40000 0 2013-14 2014-15 2015-16 Domestic International 92902 65000- Exceptional items of 343 crore in the Statement of Profit and Loss in current year mainly represent gain on sale of (a) part stake in L&T Finance Holdings Limited, (b) stake in Salzer Electronics Limited and (c) gain on sale of Foundry business. 50000- -73.0% (73.1%) Mfg. Construction & Operating Expenses Staff Expenses Sales, Administration & Other Expenses Operating Profit (PBDIT) [Figures in brackets relate to previous year] Staff expenses for the year 2015-16 at 9205 crore increased by 14.2% as compared to the previous year mainly on account of annual pay revisions and headcount additions especially in international operations. Sales, Administration & Other expenses increased by 12.7% y-o-y to 6138 crore mainly due to higher provisions towards doubtful debts and non-performing assets (NPAs) and expenses on account of increased international business. The Group operating profit (PBDIT) grew by 9.6% y-o-y at 12343 crore for the year 2015-16, while the operating margin for the year declined by 20 basis points to 12.0%. Depreciation & Amortisation charge 12.0% (12.2%) Profit after Tax The interest expense for the year 2015-16 at 3041 crore was higher by 7.1% in comparison to 2840 crore for the previous year with increase in the level of borrowings and cessation of capitalisation of borrowing costs on certain road projects becoming operational. The average borrowing cost for the year 2015-16 was contained at 9.8% p.a. through effective refinancing and judicious selection of type & tenor of the fresh borrowings. Finance cost 1183 crore grew by 10.1% over 1075 crore of the previous year. This consists largely of the profit on sale of liquid investments, interest and dividend income from treasury investments. Other income for the year 2015-16 amounting to Other Income Depreciation & Amortisation charge for the year 2015-16 higher by 5.1% at 2756 crore as compared to * 2623 crore in the previous year on account of amortisation on newly commissioned road projects during the year. The Depreciation & Amortisation charge for the year also includes impairment charge on the terminated road project. 136858 Exceptional Items H✓ 6.0% (5.9%) 9.0% (8.8%) 61935 35000- 66836 20000- 5000+ 2013-14 2014-15 Operating Expenses and Profitability 2015-16 Domestic Operating Cost and PBDIT 103522 33302 70220 Consolidated Profit after Tax (PAT) at 5091 crore for the year 2015-16 rose by 6.8% over the previous year. Earnings per share 2015-16 Manufacturing, Construction and Operating (MCO) expenses increased by 11.5% y-o-y at ₹74946 crore, in line with revenue growth. These expenses mainly comprise cost of construction material and other raw materials, subcontracting expenses, manpower costs and interest expenses. On a relative basis, the MCO expenses reduced marginally from 73.1% to 73.0% of net revenue led by softer commodity prices during the year. International 11.9% capital of 3439 crore and Viability Gap Fund from Government of 1458 crore. The Company has tied up the entire debt and achieved financial closure on 1st March, 2011. 155367 L&T 74 Arunachal Pradesh Tagurshit Hydro Limited Hydro Electric Project Detailed Hydropower Uttaranchal stage of Hydropower construction Advanced L&T Arunachal 99 Uttarakhand 208 Name of Current Subsidiary Status Name of Project Singoli- Bhatwari Hydel Power Projects Hydel projects with an aggregate capacity of 870 MW are in various stages of development. A brief status is depicted below: L&T Power Development Limited (L&T PDL), a wholly owned subsidiary of L&T, has been incorporated as its Power Development arm with an objective of developing, investing, operating and maintaining power generation projects. Currently, L&T PDL portfolio comprises projects in thermal and hydel power generation. Overview: L&T Power Development Group of the road projects during the year. Once the termination matters are resolved, the Company is expected to participate in the bids coming up in the road and transmission line sectors. The Group is expecting to improve toll revenues by replacing the old tolling system in some of the plazas with more robust systems and by implementation of weight-based tolling in a few more projects. Improvement in traffic is also expected on account of the revival in the economy. However, WPI has been in the negative territory in the second year which has led to reduction in toll rates in some of the projects. The negative trend in WPI is expected to partially offset the benefits accrued from traffic growth and lower interest costs. The Company will also actively participate in policy advocacy to improve and strengthen the PPP sector. The Company will continue to look for opportunity to churn its portfolio and would refinance some The recovery in the sector is likely to be gradual as most players are still burdened with leveraged balance sheets even as the volume of stalled or slow moving projects remains sizeable. In addition, aggressive bidding in the past and inability or limited ability to raise equity for Build-Operate-Transfer (BOT) projects have impacted the viability of infrastructure projects and reduced the risk appetite of developers for new projects. Further, structural constraints like uncertainty in land acquisition, delays in approvals and inadequacy of long-term funding avenues, if not tackled expeditiously, can slow down recovery in the infrastructure sector. The pace of recovery in the construction sector is likely to be slow and will be linked to the ground impact of the policy measures taken as well as the availability of funds. Capacity State (MW) Outlook: Electric Limited L&T General Insurance More than 55,000 consumer and auto finance loans originated through tablets. of products was critically studied on parameters of industry attractiveness and our ability to create a distinctive position. As a result, three businesses have been identified as the key growth drivers rural finance (farm equipment finance, two-wheeler finance and microfinance), housing finance (home loans, loans against property and developer finance) and wholesale finance (infrastructure finance and structured corporate lending). The other products in the portfolio would be de-emphasised. With this strategy, the Financial Services business is expected to deliver top-quartile RoE to shareholders by the year 2019-20. 199 The Financial Service businesses have implemented a strategy called 'Transform. Focus. Deliver'. The crux of the strategy is to transform the portfolio by focussing on key businesses in order to deliver superior returns on equity (ROE). The entire portfolio As the norms for recognition of Non-Performing Assets in the coming year gets advanced to 120 days of delinquency as against 150 days of delinquency as per RBI norms, credit costs may remain elevated in the coming year. Indian rural economy is dependent on monsoon to a large extent. With the expectation of a good monsoon, consensus outlook on the farm industry remains positive for the year 2016-17. There is also a growing trend in the levels of rural income and therefore, demand for ownership of personal vehicles is also rising. The Company is confident of capitalising the expectation of growth in rural economy for its three key retail products farm equipment finance, two-wheeler finance and microfinance. In the infrastructure space, GOI has taken several steps to speed up decision making and fast-tracked project clearances. Nevertheless, concerns on the asset quality still remain which may take several quarters to resolve. Outlook: convenience as central themes were embedded into routine business as well as new initiatives during the year. Back-office operations are now consolidated into two hubs viz. Mumbai and Chennai through extensive workflow automation and centralisation to make the branches hub for sales and service. Productivity, maximising cost efficiency and customer • A mobile based rule engine, with a predictable and steady approval rate, has been developed to improve TAT. Minimising human handoff reduces the chances of error based on minimum human underwriting interventions. Project in the Consumer and Auto Finance as well as Microfinance business are completely based on mobility solutions. Loan origination is carried out through Android based tablets/ mobile handsets that aim to drive sales effectiveness through use of technology for reducing turnaround time. Collections are carried out through mobile phones coupled with thermal Bluetooth printers to issue receipts. . Significant Initiatives: During the year 2015-16, the Company undertook several initiatives with an objective to enhance market reach and customer centricity, build scalability, manage risks effectively, attain process excellence, business continuity, aid cost flexibility and result in providing shareholder their fair returns. Markets Limited, DIFC Branch will be regulated by DFSA to offer Wealth Management Solutions by way of arranging deals in credit and investments, providing advice on financial products and services, including equities, debt, structured products, investments in alternate asset classes etc., to the High Net Worth Individuals based in the UAE and the neighbouring countries. L&T Mutual Fund offers investments for every kind of customer through a well-differentiated range of equity and debt funds. The business has been progressing well led by a robust model built on the fundamental tenets of client centricity, intellectual property and execution efficiency. Average assets under service for the quarter ended March 2016 grew to 9315 crore, accounting for an increase of 33% from 6996 crore for the corresponding period in the previous year. The Wealth Management business has a client base of over 4600 and is operational in Mumbai, Delhi, Bengalure, Chennai, Kolkata, Hyderabad, Ludhiana, Ahmedabad, and Dubai. The Dubai Financial Services Authority ('DFSA') granted an upgrade from a Representative Office License to a Category 4 license whereby, L&T Capital out through L&T Capital Markets Limited - it's wholly-owned subsidiary, offering services to Ultra High Net worth (UHNI) and High Net Worth Individual (HNI). The Company is present in eight locations in India and one in Dubai. 85 experienced and high skilled relationship managers service clients on their investment needs across asset classes and the spectrum of products in local and international markets. LARSEN & TOUBRO 267 Himachal Pradesh Hydro Sach-Khas Mobility solutions: Loan origination and collection The Company has entered into a Share Purchase Agreement on April 4, 2016 for sale of its stake in L&T Infrastructure Development Projects Lanka (Private) Limited. The divestment was completed in May 2016 and has received the sale proceeds. Pursuant to the Investment Agreement of June 2014, the Canada Pension Plan Investment Board (CPPIB) made an initial investment of 1000 crore in L&T IDPL in December 16, 2014 and the second tranche of 1000 crore was made in December 15, 2015 by way of subscription to compulsorily convertible preference shares. To provide a safe highway to users and to reduce maintenance costs due to overloaded vehicles, Weigh-in-Motion (WIM) system was implemented during December 2015 at L&T BPP Tollway Limited. This calculates the load of each axle of the vehicle which moves on the platform. A penalty is charged at Pay Axis (Toll Booth) if the vehicle is found to be overloaded. No. of Projects Capacity Total Project Cost : 1 : 2,400 MW :14 Bn Transmission System for Power evacuation from NTPC Kudgi (3x800 MW) to Madhugiri in Karnataka 3 sections comprising a total length - 470 Km Total No. of Projects : 20 Estimated Project Cost: * 371 Bn Business Environment The high economic growth witnessed by India during the last decade was accompanied by realisation of the need for enhanced investment in infrastructure. Rapid urbanisation and industrial growth led to demand for basic infrastructure such as water supply and sanitation, transportation and energy. Rapid growth in purchasing power in the rural areas simultaneously meant a need for improving connectivity and services for attaining a seamlessly integrated network of logistics and facilities. In order to augment economic growth, the government initiated several policies and enabling measures to support the creation of high-quality infrastructure and efficient delivery of services to its citizens. The recent slowdown of PPP projects could be attributed to a combination of events, namely the global economic slowdown, weak regulatory and institutional frameworks, delay in issue of clearances by authorities, financing issues (over-leveraged debt and paucity of equity), acquisition of land, aggressive bidding by developers, contractual issues, including long drawn out dispute resolution arising in a maturing PPP landscape, inadequate diligence and appraisal by lenders, and lack of flexibility in contractual arrangements. Transmission Line: Road Sector - The Beawar Pali - Pindwara road in Rajasthan is a mega highway project covering a stretch of 244.12 Km traversing three districts in Rajasthan. It provides crucial connectivity between North India and Gujarat. BPP achieved COD on June 11, 2015 for the entire length. L&T Devihalli Hassan Tollway Limited (DHTL) has obtained COD for the residual 2.976 km vide letter dated October 6, 2015 from the independent engineer. With this, the total project length of 77.228 kms is now fully operational and tolled. Construction is in full swing on Deccan Tollways Limited (DTL) in Telangana and Sambalpur Rourkela (SRTL) in Odisha. The two road projects are expected to commence tolling in the financial year 2017-18. L&T Metro Rail (Hyderabad) Limited L&T Metro Rail (Hyderabad) Limited (L&T MRHL) was incorporated on 24th August, 2010 as a special purpose vehicle to undertake the business to construct, operate and maintain the Metro Rail System including the Transit Oriented Development in Hyderabad under Public-Private Partnership model on Design, Build, Finance, Operate and Transfer (DBFOT) basis. The Company entered into a Concession Agreement with the erstwhile 202 LARSEN & TOUBRO Government of Andhra Pradesh on 4th September, 2010. The Metro Rail system is being constructed on three elevated corridors from Miyapur to L.B.Nagar, Jubilee Bus Station to Falaknuma and from Nagole to Shilparamam covering a total distance of 71.16 Km. The concession period of the project is for 35 years including the initial construction period of 5 years. The concession period is extendable for a further period of 25 years subject to the fulfillment of certain conditions by the Company as set out in the Concession Agreement. The estimated project cost is L&T BPP Tollway Limited (BPP)> LTIDPL is having 21% stake in Berth No. 4A of Haldia : 4.5 MTPA 1 Bn 1 Significant initiatives: environment for commercial real estate with a few major IT and IT enabled companies announcing big plans during past few months to set up shops or expand their business plans. This would help the project to market its real estate products in retail and office segments at better prices. There is an encouraging Government. This confirms the certainty of Central Government participating in the project in the form of VGF. 203 Kudgi Transmission Limited (a subsidiary of L&T IDPL) is developing the transmission assets required to evacuate power from NTPC's Kudgi Thermal Power plant in Karnataka. During the year 2015-16, the Company successfully obtained two tranches of Viability Grant of Funding (VGF) amounting to around 660 crore from the Central Concession Agreement and has expended 50% of the project cost by 5th July, 2015. The Company is executing the project covering a total distance of 71.16 Km in three different corridors. This entire distance is further sub-divided into six stages for ease of implementation. CMRS (Commissioner of Metro Rail Safety) approval has been obtained for Stage 1 of the project and is fully ready for commissioning. Stage 2 is expected to be ready by October 2016. The overall physical progress of the project as at 31st March, 2016 is 61%. Construction works in Stages 3, 4 and 5 are going on at a brisk pace. The Company has achieved its 4th Project milestone as per the In terms of the Concession Agreement, both the Government of Telangana (State Govt) and L&TMRHL are required to comply with certain conditions precedent for the occurrence of appointed date which shall be the date for commencement of concession period. The State Govt has declared the appointed date as 5th July, 2012 upon fulfillment of the condition precedents (CP) from both the parties i.e., L&T Metro Rail (Hyderabad) Limited and the State Govt. : 17 : 7,800 Km 186 Bn 3 Projects under Termination Metro: No. of Projects Length of Rail Line 1 : 71 Km Total Project Cost 170 Bn Development of Metro Rail and Transit Oriented Development in Hyderabad Port: No. of Projects Capacity Total Project Cost Overview: L&T General Insurance's Gross Written Premium (GWP) grew from 344 crore in 2014-15 to * 483 crore in 2015-16, thereby registering a growth of 40% over the previous year. Motor remains the largest contributor to the GWP with a share of 63%. Health and other Commercial lines of the business (primarily Fire and Engineering) contributed 14% and 23% of the total GWP respectively. L&T General Insurance has a pan India presence with 28 branches. Business Environment: General insurance industry (excluding specialised insurers such as AIC and ECGC) has reported a growth of 13.63% in the top line from 80584 crore in 2014-15 to 91564 crore in 2015-16. The growth in premium has improved from 9.83% to 13.12% in 2015-16 for private players and from 10.3% to 12.1% in 2015-16 for PSUs. The market share of private players increased marginally from 47% to 48% in 2015-16. All lines of the business except Marine and Fire have shown improvement in the growth rate compared to the previous year. Health, PA and Liability have grown at a higher rate than the market growth rate. The motor segment continues to dominate the market with a 46% share in the overall premium and the share of Health has increased from 25% to 27%. While the top line grew, profitability of the industry was negatively impacted by the devastating floods in Tamilnadu. L&T Shipbuilding Limited: Kattupalli Port Operations L&T Shipbuilding Limited is a joint venture between L&T and Tamil Nadu Industrial Development and Corporation Limited (TIDCO) wherein L&T holds 97% and TIDCO holds 3% in the Company to develop shipyard-cum-minor port complex. Both the shipyard and the port have SEZ status. Kattupalli port at Chennai has a container terminal with two container berths. Major focus areas for NPL in coming year are maximising plant availability, improving operational efficiency, enhancing fuel quality and settling the regulatory issues. Focus area for the hydel business would be expediting construction activities at its Singoli-Bhatwari hydel project. Punjab is expected to witness a flat growth of around 5% in demand for electricity during 2016-17. NPL is likely to remain the lowest cost power producer amongst the IPPs in the state which will translate into a higher plant load factor in fiscal year 2016-17 at around 70%. consumption continues to promise robust long term demand. On the fuel side coal production capacity is expected to further increase in 2016-17 up to around 600 million tonnes registering 11% growth over the preceding year. Increased private participation in the power sector is expected to play an important role in future capacity additions. Lower per capita Outlook: • CSR initiatives in the area of development of village infrastructure, education, skill building, gender equality, health and environment were implemented during the year. • Effective financing strategies and refinancing iterations helped to maintain Interest costs at sub 9% • 99% of dry fly ash disposal achieved • NIL availability loss on account of shortage of coal During the year 2015-16, the Company entered into an agreement with Adani Group (a port operator) to demerge the port business and divest the stake in the resulting company. Pending formalities of the demerger process, the operations of the port have been handed over to the operator for a fixed share in revenue. It is planned to complete the transfer of the port ownership in entirety during financial year 2016-17. • Achieved 87% materialization of linkage coal during large part of 2015-16 The 56.17-km six-lane stretch of NH 8A between Samakhiali and Gandhidham in Gujarat connects the important port towns of Kandla and Mundra to north India. • ISO 9001, 14001 and 18001 certification awarded • Unit start-up procedure optimised to reduce the time and cost Operational efficiency measures implemented and monitored to improve efficiency Railway siding operational on 4th February, 2016 • • 91.79% availability achieved Significant Milestones & Initiatives: Regulatory environment continued to pose challenges to the IPPS (Independent power producers) particularly in tariff related areas. than preceding year. However, the output was short of targeted production by 2.4%. SECL, which supplies coal to NPL, registered a production of 135.6 million tonnes with a growth of 5.8%. Availability of railway rakes for transportation of coal from SECL to NPL's plant in Punjab improved during the year. 205 206 LARSEN & TOUBRO Financial Review 2015-16 Order Inflow crore 187373, 75% * crore 8% 19252 4% 10368, 7507, 1% 3% 3% 6% 3055, 15622, 6773, Order Book Composition The Group has a robust order book of 249949 crore as at March 31, 2016, at 2.4 times of current revenue providing revenue visibility for next few years. Infrastructure segment contributed 75% of the consolidated order book, comprising mainly Buildings & Factories 22.7%, Transportation Infrastructure 15.8%, Heavy Civil Infrastructure 15.3%, Power Transmission & Distribution 12.3% and Water, Smart World & Communication 8.9%. The order book grew by 7.4% over the previous year. International orders constitute 28.3% of the order book as at March 31, 2016 as compared to 26.2% in the previous year. 20.1% y-o-y, as the investment climate remained subdued during the year. While capital spending by private sector was muted on account of lower commodity prices, weak demand and large excess capacities, investments in infrastructure development picked up in the second half of the year. The International segment grew 12.4% y-o-y and contributed 32.1% of total order wins during the year as compared to 25.2% in previous year. Order inflows of Power, Metallurgical & Material Handling and Heavy Engineering businesses were adversely affected. Infrastructure segment contributed 62% of total order inflow during the year at 84817 crore, marginally lower by 1.1% as compared to the previous year. L&T group secured new orders worth 136858 crore for the year 2015-16, reflecting a decline of 11.9% over the previous year. Domestic order inflow was lower by Order Inflow & Order Book As at March 31, 2016, L&T Group comprises of 125 subsidiaries, 8 associates and 22 joint venture companies. Most of the group companies are strategic extensions of the project and product businesses of L&T. Majority of the subsidiaries support L&T's core businesses and enable access to new geographies, products and business segments. While certain distinct service businesses such as Information Technology, Technology Services, Developmental Projects and Financial Services are housed in separate subsidiary and associate companies of L&T, project business catering to the hydrocarbon sector is also housed in a separate group of companies to provide the sector specific focus. The Company has been focusing on conversion of order book and achieving operational excellence, cash conservation and monetising Company's non-core assets to maximise shareholder value. The Company's performance during the year has been satisfactory driven by revenue growth with stable margins despite testing business conditions characterised by global slowdown, declining commodity prices, volatile currency movements and geopolitical uncertainties. Indian economy though growing at relatively faster pace did not witness pick up in investment cycle. A. PERFORMANCE REVIEW I. L&T CONSOLIDATED Coal India Limited ended the financial year with an output of 536.5 million tonnes, 8.6% higher 160000 16375 crore which includes the cost of rail system and 6 million Transit Oriented Development (TOD) which is to be funded by a term loan of 11478 crore, equity share with a technical plant availability of over 90%. NPL has been the most reliable source of power for the state of Punjab and has supported the state with an uninterrupted supply during peak season. NPL also happens to be the lowest cost power producer in Punjab with benchmark operational efficiency which is amongst the best in the country. Roads & Bridges: L&T IDPL's portfolio of infrastructure assets also includes the Hyderabad Metro Rail project, a transmission line project in Karnataka, a port berth in Haldia and windmills in Tamil Nadu. business interests across Roads and Bridges, Ports, Metro Rail, Wind energy and emerging sectors such as Power Transmission Lines. As of March 2016, L&T IDPL has a portfolio of 17 projects with 7,800 Km at an estimated project cost of over 186 Bn. 201 L&T Infrastructure Development Projects Limited (L&T IDPL) is a major player in the Public-Private Partnership projects in India with Overview: L&T IDPL Group: under the current business model which are being explored for monetisation on a continuous basis in order to maximise value creation for the benefits of stakeholders. The operations of developmental projects business segment primarily involves development, operation and maintenance of basic infrastructure projects in the Public Private Partnership (PPP) format, toll collection including annuity based road projects, power development and power transmission, development and operation of port facilities and providing related advisory services. Significant cash generating assets have been created Developmental Projects business segment comprises (a) Infrastructure projects executed through L&T Infrastructure Development Limited and its subsidiaries and associates (L&T IDPL Group); (b) Power Development Projects executed through L&T Power Development Limited and its subsidiaries (L&T PDL Group) and (c) Kattupalli Port operations of L&T Shipbuilding Limited. No. of Projects The Hyderabad Metro Rail Project - the world's largest public-private project in the urban transportation sector extends 71 km across three corridors. 45 Developmental Projects Business 200 Improving macro parameters, legislative reforms along with above normal rainfall this year are expected to drive the industry growth in 2016-17. With Motor and Health lending support to the current growth drivers, L&T General Insurance is poised to leverage the opportunities on the back of its operational efficiencies supported by its state-of-the-art technology platform. Laws (Amendment) Act 2015, this year saw many foreign partners increasing their stake in their joint ventures, thereby showing commitment to expand their presence in India. IRDAI has issued several regulations including some revisions aimed at driving the transparency, improving accountability, increasing penetration and creating a favourable ecosystem for all the stakeholders. These regulations amongst others include regulations on corporate agency, point of sale person, insurance marketing firms, expenses of management, surveyor and loss assessor, dismantling of the declined pool, implementation of Indian accounting standards etc. With increase in the permissible FDI under the Insurance Outlook: efficiencies resulted in a better productivity levels for the Company. This will further help the Company to optimise its operating costs in future. The extensive use of the robust technology platform coupled with the improvement in process Significant Initiatives: The Company entered into certain significant arrangements which will help it in augmenting the business in the Motor segment. It also succeeded in improving the portfolio mix for Motor and Health. 65 Lane Km Total Project Cost 12 Operational Projects The power plant has been running successfully for over two years The plant sources its fuel from South Eastern Coalfields Ltd. (Subsidiary of CIL - Coal India Limited) under a 20 year Fuel Supply Agreement (FSA). The Company also secured approvals to arrange coal from alternative sources to make up for any shortage in supply of coal under the FSA. Bhakra-Nangal distributary is the perennial source of water for the plant under an allocation by the state irrigation. The plant is operated by an in-house experienced team of operations and maintenance professionals. Punjab. This is the first development project and the first power plant to be owned and operated by L&T. All the power generated from this plant is contracted with Punjab State Power Corporation Limited (PSPCL) for a period of 25 years under a Power Purchase Agreement (PPA). The plant is built on super critical technology of Mitsubishi, Japan. It is the first 'Made in India' supercritical power plant to be commissioned and operational in India. LARSEN & TOUBRO 204 NPL is a 2X700 MW supercritical thermal power plant at Rajpura, Thermal Power Projects - Nabha Power Limited (NPL) Himachal Limited submitted Hydropower Report 870 Total Hydropower Limited Project Electric L&T 430 Himachal Pradesh Reoli-Dugli Hydro Project Electric Himachal Project L&T 2 Implementing Projects Business Environment: Fiscal year 2015-16 witnessed muted growth in demand for power with an all India plant load factor at around 62%. Punjab state also registered a modest growth in demand. PSPCL undertook power banking transactions creating an additional demand during lean seasons. Punjab joined 'Ujwal DISCOM Assurance Yojana' scheme of the Central Government during the year. UDAY scheme is aimed at operational and financial turnaround of the DISCOMS. Consolidated Earnings per share (EPS) including exceptional and extraordinary items for the year 2015-16 at 54.69 recorded an increase of 6.5% over the previous year. Liquidity and Gearing 1527 99 Domestic International Sources of Funds 10866 14349 209 * crore 60000 Infrastructure Segment Gross Revenue 12.3% 50387 45000- 44854 70 38021 7325 Others 2014-15 51256 67299 60618 Net (investment)/ divestment * 424 1811 20000 Payment (to)/from minority interest (net) 1583 1871 Treasury and dividend income 627 471 0- 2013-14 2015-16 14524 10790 30000- International 2013-14 82.1% 2702 2014-15 2015-16 Infrastructure segment clocked gross revenue of *50387 crore for the year 2015-16 registering 12.3% growth over the previous year. Revenue growth was driven by Transportation Infrastructure, Power Transmission & Distribution and Water, Smart World & Communication businesses on the back of the execution of the jobs from the opening order book. Revenue from international operations constituted 28.8% of the total revenues of the segment during the year as compared to 24.1% in the previous year. Infrastructure Segment operating profit was higher by 18.6% y-o-y at ₹ 5684 crore for 2015-16. Operating margins improved by 60 basis points at 11.7% during the year 2015-16 owing to improved project execution and settlement of variation claims. crore 6000 Infrastructure Segment EBITDA 4791 4500- 4035 0+ 2015-16 2014-15 4000- 15000- 30696 34064 35863 0 2013-14 Domestic 4478 16000- Order Inflow 15125 12000- * crore Hv 8000- 4409 Power Segment 1159 Borrowings (net of repayments) HV 40000- 16.0 (Increase)/Decrease in cash balance Utilisation of Funds (128) (1759) (10866) (14349) *crore 60000 13.7 12.1 12.0 40000 12.0 20000 8.0 37712 40909 (3926) (3678) Interest paid (1603) LARSEN & TOUBRO Net Worth, Capital employed and Returns The Net Worth of the shareholders at 43992 crore as at March 31, 2016 increased by 3083 crore as compared to the position as at March 31, 2015. Return on Net Worth (RONW) for the year 2015-16 was stable at 12%. Capital employed increased to 92331 crore as compared to 86407 crore as at March 31, 2015. Net Worth and Returns Fund Flow Statement Particulars Capital expenditure (net) crore 43992 FY 15-16 (5058) (6095) (Purchase)/Sale of other investments (124) (966) Dividend paid (1878) FY 14-15 3000 0. 2013-14 84817 80000- 18464 24199 Fund Flow Statement Particulars crore 30084 FY 15-16 FY 14-15 Operating activities 7003 5619 * crore 60000- 81340 85763 1.1% 100000 Order Inflow 2014-15 Net worth 2015-16 ― RONW % Liquidity and Gearing Percentage Stronger underlying business performance contributed higher cash from business operations at 7003 crore. Net borrowings during the year stood at ₹1159 crore, mainly attributable to Developmental projects business. L&T IDPL raised additional 1000 crore by issuance of compulsorily convertible preference shares to Canada Pension Plan Investment Board (CPPIB) during December 2015. Stake sales in subsidiary companies have also contributed 424 crore largely attributable to divestment of CSJ infrastructure Limited & L&T Infocity Limited. Dividend and treasury income rose to 627 crore during the year owing to efficient treasury management. 4.0 5058 crore 128 crore in the cash balances as at March 31, 2016 as compared to the beginning of the year. *This includes (acquisition)/divestment of businesses, consideration received on disposal of subsidiaries/Joint ventures and net cash flows on loans/deposits made with associate companies & third parties. The total borrowings as at March 31, 2016 stood at 101307 crore as compared to 90571 crore. The gross Debt Equity ratio is 2.30:1 as at March 31, 2016 as compared to 2.21:1 at March 31, 2015. B. SEGMENT WISE PERFORMANCE (GROUP) 1. Infrastructure Segment Infrastructure segment bagged fresh orders worth * 84817 crore for the year 2015-16 reflecting marginal drop of 1.1% over the previous year. International order wins led by Power Transmission & Distribution business constituted 28.5% of the total order inflow during the year up from 21.5% in the previous year. The order inflow declined marginally as certain anticipated domestic project awards in Heavy Civil and Transportation Infrastructure were deferred. Buildings & Factories business, though witnessed muted prospects, constituted major portion of the order intake of the Infrastructure segment. Infrastructure Segment The Group incurred capital expenditure of during the year 2015-16 vis-à-vis 6095 crore in the previous year, mainly due to lower spend in L&T Hyderabad Metro Rail project. There has been a net increase of 1500 18.6% H LARSEN & TOUBRO MMH Segment EBITDA 40.0 30.0 20.0 Hv 400 332 16.6 10.0 200 10.5 130 5.5 600- 800 909 1000 6000- 5732 4000- 2000- 0+ 2013-14 MMH Segment Gross Revenue 0+ 3427 2837 2014-15 2015-16 Order Inflow of 3661 crore for the year was lower by 40.3% y-o-y due to sluggish domestic business environment. The soft commodity prices that prevailed through 2015-16 impacted the Capex outlay of MMH segment. MMH segment recorded gross revenue of 2837 crore for the year ended March 31, 2016, a decline of 17.2% over the previous year, due to depleted order book and slower implementation of projects by customers. The Group Segment operating margins for the year declined sharply by 500 basis points to 5.5% due to under recoveries, slower project execution and cost overruns in certain projects. * crore 17.2% 8000 0.0 2014-15 3519 1000 0 2013-14 Domestic 883 2014-15 2015-16 International Heavy Engineering Segment Gross Revenue 5000 4525 4000- 3624 2273 1412 2000 2295 EBITDA 2015-16 OPM % Funds employed by the segment at 3191 crore as at March 31, 2016 remained at elevated levels due to delay in collecting milestone payments from customers. 4. Heavy Engineering Segment (HE) Heavy Engineering segment recorded order inflow of *2295 crore during 2015-16 reflecting a reduction of 54% y-o-y as domestic order prospects in Process, Plant & Nuclear (PP&N) and Defence & Aerospace (D&A) businesses did not materialise. International orders constituted 62% of the total order inflow. Heavy Engineering Segment Order Inflow 2013-14 *crore 4989 1470 4000- 3688 3000- 1415 54.0% 5000 8.3% 2015-16 2013-14 47.4% 7011 2015-16 Segment revenue grew 47.4% y-o-y at 7011 crore, as the jobs under execution achieved substantial progress during the year. Revenue from International projects at 1870 crore represented 26.7% of total revenue. Operating profit margins declined 450 basis points to 11.6% during the year ended March 31, 2016 as compared to 16.1% in 2014-15. Drop in margins reflects changing job mix and the relative status of the stage of completion of the projects. 16001 0- 5.0 2013-14 2014-15 EBITDA 2015-16 - OPM % Power Segment EBITDA 30.0 The Funds employed by the segment at ₹ 18101 crore as at March 31, 2016 increased by 28.0% vis-à-vis March 31, 2015, largely representing net working capital. 2014-15 4756 Gross Revenue Power Segment 11.1 5684 20.0 15.0 11.7 11.1 10.0 2. Power Segment Percentage 8000- 6155 6000- 4000- 2000- 0+ 2013-14 * crore 2014-15 crore - 25.0 MMH Segment Order Inflow 6136 * crore 7000- 6000- 5000- 4000- 3000- 2696 2000- 40.3% 3661 1000- 0+ 3. Metallurgical and Material Handling Segment (MMH) The Funds employed by Power segment remains elevated at 2801 crore as at March 31, 2016 higher by 36.7% as compared to the position as at March 31, 2015. This is mainly due to the increase in the construction work-in-progress, pending completion of contractual billing milestones. crore Percentage 25.2 811 758 800- - 20.0 400- 16.1 1200- Power segment bagged orders worth 2702 crore as compared to 15125 crore in the previous year. The segment was challenged by intense competition for rather limited opportunities. 2013-14 2014-15 EBITDA 210 11.6 2015-16 - OPM % - 15.0 10.0 0. 1542 Funds employed by the segment at 2037 crore as at March 31, 2016 decreased by 10.3% as compared to March 31, 2015. The reduction was aided by lower working capital. * crore 10723 55548 7597 55000- 57558 60415 65000- Gross Revenue from Operations * crore The Company achieved Revenue of 60415 crore vis-à-vis *57558 crore in the previous year. Revenue growth was delivered by Power segment and Infrastructure segment inspite of challenging execution conditions and delays in customer clearances. Other major traditional businesses such as Heavy Engineering and Metallurgical and Material Handling had significant decline in the revenue as order book depleted. Electrical & Automation business witnessed sluggish industrial demand and has reported marginal growth in revenue for 2015-16 over the previous year. Revenue from Operations Figures for 2013-14 exclude IES business to enable appropriate comparison Order Book as at March 31, 2016 stood at 199040 crore, 78.5% of which is contributed by Infrastructure segment. International orders constituted 16% of the current order book. Order book to revenue ratio at 3.29, gives a good revenue visibility over the next few years. Order wins during 2015-16 were ₹85052 crore recording a decline of 22.5% y-o-y, as domestic opportunities have delayed/deferred. Order inflow during the year is mainly contributed by Infrastructure segment at 82.7% as compared to 70.6% in the previous year. Power, Metallurgical & Metal Handling and Heavy Engineering businesses saw significant drop in order intake during the year. International business clocked growth of over 22% with the order inflow at 18693 crore aided by success in commercial buildings space and power transmission & distribution projects. International orders are at 22% of the total order inflow for 2015-16. As the headwinds continued to slow economic revival in the country and in most major global markets, the Company focused on profitable execution, optimising working capital and monetisation of non-core assets. Order Inflow & Order Book The Company's standalone financials capture performance of Infrastructure, Power, Heavy Engineering, Electrical & Automation, Metallurgical and Material Handling, Construction & Mining equipment and Industrial Machinery and a part of Shipbuilding and Realty businesses. Realty *Not to scale PERFORMANCE REVIEW II. L&T STANDALONE 2014-15 Industrial Machinery, Products & Others 2015-16 820 4318 1997 799 2013-14 Shipbuilding 619 3546 3937 9258 45000- 35000- 25000- Other income for the year 2015-16 amounted to *2406 crore as against 2283 crore for the previous year. It consists of dividend from group companies 1008 crore (previous year: 851 crore), interest on temporary investments in government securities and bonds 198 crore (previous year: 212 crore), interest on inter- corporate deposit given to group companies 268 crore (previous year: 293 crore), profit on sale of long term investments 249 crore (previous year: Nil) and cost recoveries from group companies 323 crore (previous year: 301 crore). Other Income Depreciation & Amortisation charge for the year 2015-16 at 999 crore was broadly in line with the previous year charge of 1008 crore. The operating profit margin for the year at 10.3% declined by 110 basis y-o-y. Consequently, Profit before depreciation, interest and tax (PBDIT) stood at 6171 crore for the year, lower by 4.9% over the previous year. Depreciation & Amortisation charge Sales, Administration & Other expenses for the year at *2500 crore increased by 25.9% y-o-y due to increased provision for doubtful debts and advances, outlay on operational excellence initiatives and higher spend on CSR activities. The Staff expenses for the year at 4480 crore increased by 7.6% y-o-y due to annual pay revisions, manpower additions and increased international operations. The Company's manpower strength stood at 43354 as compared to 44081 as at March 31, 2015. [Figures in brackets relate to previous year] Sales, Administration & Other Expenses Operating Profit (PBDIT) Mfg. Construction & Operating Expenses Staff Expenses 2015-16 7.5% (7.3%) 4.2% (3.5%) (11.4%) 1327 10.3% increase of 5.1%. These costs represent 78% of revenue, an increase of 20 basis points over the previous year. Operating Expenses and Profitability 215 Manufacturing, Construction and Operating (MCO) expenses comprising cost of construction material, manufacturing materials, components and subcontracting expenses amounted to 46629 crore registering an Domestic Figures for 2013-14 exclude IES business to enable appropriate comparison Operating Cost and PBDIT 2015-16 International 2014-15 2013-14 5000+ 15000- 49692 48300 47951 78.0% (77.8%) 5492 1929 6665 severely affected by time/cost overruns and under-recovery of overheads due to low capacity utilisation. 208 crore in the previous year as performance was Shipbuilding business recorded revenue of 820 crore for the year. The business suffered operating loss of *328 crore for 2015-16 as against operating loss of Realty business recorded growth of 3.5% in revenue at 1997 crore for the year 2015-16 and achieved operating profit of 1130 crore. Other Segment covers Realty, Shipbuilding, Construction & Mining equipment and Industrial Machinery businesses. L&T IDPL raised 1000 crore by way of compulsorily convertible preference shares subscribed by Canada Pension Plan Investment Board (CPPIB) during December 2015 taking the total investment by CPPIB to 2000 crore. 10. Others Segment The Funds employed by the DP segment increased by 14.8% y-o-y at 31060 crore as at March 31, 2016 owing to higher capex outlay for Hyderabad Metro Rail, Transmission and Road projects. 214 line project & 1 metro rail project. Power projects are developed by L&T Power Development Limited, Kattupalli The Group has acquired concessions through competitive bidding process for the development of Power projects, Roads, Bridges, Hyderabad Metro Rail, Ports and Power Transmission Lines. Total portfolio of the group consists of 5 power projects, 14 roads & bridges projects (excluding projects under termination), 2 ports, 1 transmission Percentage 9. Developmental Projects (DP) - NIM % Construction & Mining equipment and Industrial Machinery businesses recorded growth of 9.7% EBITDA 2014-15 2013-14 - 2.5 13000 5.0 5.67 5.68 -7.5 5.47 H 26000 crore H✓ 2015-16 Finance cost in revenue at 4318 crore for the year 2015-16. Operating profit declined marginally to 551 crore due to unfavorable product mix, sluggish demand & cost pressures. 3323 7135 Others Segment Gross Revenue* * crore 2015-16 International 2014-15 Domestic 2013-14 0+ 20000- 66359 94473 63117 Segment funds employed reduced by 12.6% to HV 40000- * crore 14961 18693 85052 78078 80000- 15265 22.5% 109738 Order Inflow 100000 120000- LARSEN & TOUBRO 60000- The interest expenses for the year at 1449 crore were higher by 2.1% vis-à-vis ₹1420 crore for the previous year. The increase in the interest expenses is attributable 3. Reputation and Brand: Corporate Governance and Compliance policy is in place mandating adherence to Code of conduct and Internal Controls. Regular knowledge sharing across the organisation and review & upgradation of appropriate controls ensure the 4. same. Competition: It has been observed that competition from foreign and domestic players has considerably increased in the past few years. The Company's engineering, procurement, and construction business derives its competitive strength from its excellence in executing projects of varying sizes, reputation for quality, technology, cost-effectiveness and project management expertise. This helps in gaining an edge over competition. 5. Other Operational Risks: a. b. C. d. e. Execution challenges: Company faces execution challenges like geological developments, availability of work front, land acquisition & right of way (ROW), pending approvals and clearances from Government agencies, working in difficult/ harsh weather conditions/terrains, skilled manpower availability etc. The Company closely tracks the key risks for each project to effect timely mitigation. Partner risks: Company partners with different contractors (Joint Venture/consortium projects) across businesses based on technical requirements/local market conditions. Partner's performance and financial strength is crucial for project success. Learnings from the past projects are incorporated in the inter-se agreement with the partners and clauses on liability of each partner are carefully drafted after a legal due diligence. Fall in oil price: It has resulted in budget constraints in Middle Eastern Countries leading to decline/delay in investment with some projects being put on hold. The Company has started focusing on domestic business and selectively foraying into new markets like Africa & South East Asia. Working capital challenges: Project delays and adverse contractual payment terms lead to increased working capital requirements. Company has strengthened the process for close monitoring of cash flows at the project level. Company ensures regular follow up for delay in payments by client. Improvement in working capital is a key lever for achieving better ROE. Claims management: Company maintains a strong documentation and follow up with clients/ sub-contractors/vendors for claims that are submitted. Legal teams and insurance teams are constantly consulted to ensure a robust process of claims management. The Company has institutionalised the risk management processes to map and monitor the risks across the businesses and respond effectively to achieve the strategic objectives. The Company has been successful in tapping the opportunities both in domestic and international markets. The Company sees risk management as a business enabler and believes that risk is an integral part of every business 218 Return on Net Worth (RONW) including the extraordinary items for the year 2015-16 is 13.7% as against 14.3% for the previous year. Return on Capital Employed (ROCE) for the year 2015-16 at 11.9% is lower compared to 12.5% of the previous year. The funds deployed in the group companies in capital intensive businesses in the last few years have not yet started yielding adequate returns, resulting in decline in ROCE and RONW. Percentage 10.0 2013-14 2015-16 Funds Employed RONW % - ROCE % 11.9 10000 2014-15 12.5 14.9 20000 15.0 Talent Management: It is critical to fill leadership roles in every project being executed by the Company. Proper processes are in place across the Company for hiring the best talent across the Company and suitable retention policies are constantly reviewed to minimise attrition. 13.7 2. The top Enterprise level risks for the Company and the mitigation measures being implemented are: 3118 1015 Fund Flow Statement crore Particulars Operating activities Borrowings (net of repayments)/ 2015-16 3256 233 2014-15 (Repayments) Dividend from group companies and 1551 1413 Treasury income 1. Slow recovery of key sectors: Growth in some of the sectors like Power, Metals & Minerals etc. has been hampered by a number of constraints like fuel shortages, environmental clearances, restrictions on mining etc. Being a diversified conglomerate helps mitigate the risk of such slowdown in some sectors as we see compensating growth in certain other sectors. Government initiatives like Project UDAY, Make in India, revised Defence Procurement Policy (DPP), renewed impetus to Infrastructure sector namely roads and railways provide growth opportunities in the near future. Sale (purchase) of investments (916) Others 70 5898 99 4729 Sources of Funds The total borrowings as at March 31, 2016 stood at 13608 crore as compared to 12937 crore in the previous year. The loan portfolio of the Company comprises a mix of domestic and suitably hedged foreign currency loans. The gross debt equity ratio marginally decreased to 0.33:1 as at March 31, 2016 from 0.35:1 as at March 31, 2015. The Company has a healthy net debt equity ratio of 0.18:1 as at March 31, 2016 after excluding short term investments in liquid funds from debt. III. RISK MANAGEMENT L&T has a comprehensive Enterprise Risk Management (ERM) framework in place for identification, assessment, treatment and reporting of risks. The Company's risk management processes ensure that the Company accepts risks as per the boundary conditions based on the risk appetite of the organisation. The Audit Committee of the Board oversees the efficacy of the risk management processes. Business level risks and the mitigation plans for each vertical are reviewed periodically by the respective top management/Boards. The Corporate Risk Management Committee appraises critical risks impacting the Company and ensures adherence to policies. The Company is predominantly in project business and has developed robust project risk management processes. The key processes include country clearance for entry into a new country, Pre-bid risk reviews, Execution risk reviews and project close out risk reviews. Pre-bid reviews are carried out based on a bid authorisation matrix as determined by the Risk Management Committees. Execution risk reviews of the projects are held at regular intervals for tracking the project performance, movement of risks in the project and effectiveness of mitigation measures. Close out risk reviews are held to capture key learnings from the projects and what went right/wrong analysis which helps in factoring the learnings in future bids. The Company has been conferred the prestigious 'Golden Peacock Award for Risk Management' for 2015 by the 217 Institute of Directors (loD) in the 'Diversified' category. The Company emphasises on continuous learning and has initiated several knowledge based initiatives to improve risk awareness across the organization. One such initiative is launching of an e-learning training program on Enterprise Risk Management (ERM) for employees to enhance capabilities on risk management which will lead to better business performance. It covers topics related to basics of risk management, global risk management frameworks, processes in L&T, case studies on risk management etc. Periodic workshops on risk management are also held across the company to spread awareness & share learnings. 789 39000 14.3 17.5 Funds Employed and Returns revenue as on March 31, 2015. Higher net working capital is mainly on account of unbilled construction work-in- progress, pending completion of contractual milestones and delay in realising customer receivables. During the year, investments in and loans to subsidiary and associate companies increased by 2218 crore (net of proceeds from divestment). Major investments have been made in subsidiary companies operating in Power Development, Heavy Engineering and Shipbuilding businesses to support the operations of group companies. LARSEN & TOUBRO 216 Funds Employed by the Company at 54530 crore as at March 31, 2016 increased by 4146 crore during the year. The Company incurred 643 crore (net) towards capital expenditure during the year, largely on procurement of plant and equipment for the Infrastructure segment. At the segment aggregate level, net working capital as on March 31, 2016 at 16870 crore increased to 27.9% of revenue as compared to 14938 crore at 26.0% of Funds Employed and Returns The Earnings per share (EPS) for the year 2015-16 at 57.07 grew by 4.8% over the previous year. Earnings per share Figures for 2013-14 exclude IES business to enable comparison 2015-16 5311 2014-15 5056 Fund Flow Statement Particulars Profit After Tax 0+ 1500- 3000- 4500- 5266 6000- *crore Profit after Tax (PAT), including exceptional items, for the year 2015-16 grew by 5% to 5311 crore as compared to 5056 crore in the previous year, contributed by higher divestment gains. Profit after Tax The Company has impaired its investment in its subsidiary engaged in the general insurance business. Exceptional items of 560 crore in the Statement of Profit and Loss for the current year mainly includes gain on part stake-sale in L&T Finance Holdings Limited, gain on transfer of the Company's stake in a few subsidiary companies to its wholly-owned subsidiary L&T Hydrocarbon Engineering Ltd as a part of restructuring, gain on divestment of stake in associate Company and gain on sale of Foundry business. Exceptional Item to incremental borrowings during the year to finance the working capital needs of the businesses. The average borrowing cost for the year 2015-16 was lower by 50 basis points at 9.0% p.a. led by refinancing of loans and efficient cash management. 2013-14 30000 crore 2014-15 40000 45531 50000 50384 20.0 25.0 54530 30.0 60000 crore (4729) (5898) Utilisation of Funds 2015-16 203 (Increase) / decrease in cash balance (1401) (1647) (1150) (1223) Interest paid Dividend paid divestment) (1480) (2218) Investments in Group Cos. (net of (901) (643) Capital Expenditure (166) 44728 * 9423 crore due to improved customer realisation in Realty business and customer advances in Shipbuilding business. 52562 5133 5446 9778 10000- 0.2% 5460 6000 10447 2.5% 10716 Order Inflow 12000 E&A Segment Gross Revenue Hydrocarbon Segment Hydrocarbon segment secured fresh orders aggregating to *10447 crore during the year maintaining the level similar to that of the previous year. Low oil prices, geopolitical uncertainties and currency volatility created a challenging business environment in which capex investments by oil producing companies were either slashed or deferred. Consequently, International orders accounted for 32.8% of total order inflow for 2015-16 as compared to 64.0% in the previous year. Big ticket orders for fertilizer plant and offshore oil field development helped domestic order flows during the year. 6. Hydrocarbon Segment Funds employed by the E&A segment at 2856 crore were contained at previous year's levels. Percentage 2015-16 → OPM % EBITDA 2014-15 2013-14 5.0 0 10.0 200- 13.9 52000 5000- 8000- 1737 2015-16 2014-15 2013-14 0- International Domestic 2015-16 2014-15 2013-14 1000 3853 2000- 2000- 14.2 4861 3753 3723 7024 4000- 3000- H✓ Hv 6000- 4000- 1671 6863 4917 1693 3462 14.8 15.0 - 20.0 600- - 25.0 644 646 710 8001 30.0 E&A Segment EBITDA Segment operating profit for the year fell 9% y-o-y to 646 crore. Consequently operating profit margins declined by 90 basis points y-o-y to 13.9%. Group's profitability was adversely impacted by competitive pressures on pricing and losses incurred by Middle East subsidiary companies. Heavy Engineering Segment The segment incurred operating loss of 21 crore for the year against an operating profit of 418 crore in the previous year, due to cost & time overruns in certain jobs in PP&N business, provision for debts doubtful of realisation and continued under-recoveries in Forgings joint venture. Reflecting depleted order book, the segment gross revenue of 3323 crore fell 8.3% compared to the previous year. Revenue from international operations constituted 42.6% of the total revenue. Percentage * crore 211 Domestic 2015-16 2014-15 2013-14 1000 1908 2485 2998 2000 1415 1139 3000 re International Domestic EBITDA 800 400- * crore E&A segment recorded gross revenue of 5446 crore for 2015-16. Stable top line in conditions of weak demand, tight liquidity and deferment of projects underscored the market acceptability of the products suite. Revenue from international operations continued to be around 31.1% of the total revenue of the segment, same as compared to 31.8% in the previous year. 5. Electrical & Automation Segment (E&A) Funds employed by the segment decreased by 21.5% y-o-y at 3230 crore as at March 31, 2016 aided by growth in customer advances and higher vendor credit. Percentage 2015-16 ― OPM % EBITDA 2014-15 2013-14 - -5.0 -200- -0.7 20.0 0.0 -21 5.0 200 H✓ 10.0 15.0 12.3 400 418 15.8 600 L 692 0 International 3423 Hydrocarbon Segment 5181 6000- 7541 17.8% 6401 FS Segment Gross Revenue 8000- 10000- the previous year. The General Insurance business reported Gross Written Premium (GWP) of 483 crore up by 40% as compared to Asset management business increased 16.7% y-o-y aided by growth in equity assets with Assets Under Management of 24772 crore as at March 31, 2016. and roads and retail products. Net interest margins at 5.67% remained stable. 213 H4000- Loan book of Finance business expanded by 22.4% y-o-y to 57831 crore as at March 31, 2016, driven by healthy disbursements in operational projects in renewable energy Financial Services segment comprises of asset financing, mutual funds and asset management businesses housed in L&T Finance Holdings Limited and its subsidiaries. The segment also includes general insurance business. Segment revenue grew 17.8% y-o-y at 7541 crore during the year ended March 31, 2016 aided by good momentum across various businesses. 8. Financial Services (FS) The Funds employed by the segment at 3142 crore as at March 31, 2016 is lower by 6.9% as compared to March 31, 2015 at 3377 crore. 2015-16 - OPM % EBITDA 2014-15 2013-14 10.0 500 18.0 20.4 21.6 26.0 Percentage 34.0 * crore 212 2015-16 2014-15 ― EBITDA Gross Revenue 618 2013-14 0 1367 2147 1500- 1543 5146 5155 3000- 4500- port operations are housed in L&T Shipbuilding Limited, a subsidiary company & other projects are developed by L&T Infrastructure Development Projects Limited. The total estimated cost of projects pegged at 53050 crore as at March 31, 2016, requiring equity commitment of 12976 crore of which equity infusion of 9543 crore I was done as at March 2016. 6000 10.0 63365 65000 Total Assets and NIM % FS Segment Disbursal of fresh loans and advances of 41765 crore during 2015-16, recorded a growth of 29% over the previous year. Gross Non-performing Assets (GNPA) of the segment at 3.05% of loan assets as at March 31, 2016 improved marginally over March 31, 2015. 2015-16 2014-15 2013-14 0 2000- Gross Revenue & EBITDA DP Segment < crore 1938 The segment recorded revenue of 5146 crore for the year ended March 31, 2016 as compared to 5155 crore in the previous year. Lower toll collections and loss of Dhamra Port revenues (business sold in 2014-15) was compensated by higher revenue from Rajpura power plant. The segment clocked operating profit at 1367 crore for the year 2015-16 declining by 36.3% y-o-y due to lower toll collections as also Dhamra Port divestment gains counted in the previous year. H 1000 3667 4718 4002 3000 6450 7654 8000- H✓ 5000 19.1% 3765 9117 4122 2013-14 6130 crore Gross Revenue IT & TS Segment 7432 18.9% 8840 9000 10132 11000 Manpower strength was reduced to 9406 as compared to 9596 as at March 31, 2015, however, utilisation had improved. LARSEN & TOUBRO Gross Revenue 42.0 7000- 2014-15 10000- 6000- 25.2% *crore 900 22.2 1300 1409 1548 1700 EBITDA 2100 crore The Segment Operating profit rose by 25.2% y-o-y to 1938 crore for the year 2015-16 with operating margin improvement of 120 basis points on account of higher manpower utilisation and favorable currency movement. 2015-16 2014-15 IT & TS Segment The segment posted an operating profit of 197 crore as compared to operating loss of 1128 crore in the previous year. Close-out costs in international projects coupled with under-recoveries contained the margin improvement. 0+ 2000 L&T Technology Services group achieved growth of 17.5% in revenue for 2015-16 at 3042 crore mainly in industrial products and process engineering vertical group. In USD terms the revenue recorded a y-o-y growth of 9.5%. About 62% of revenue are contributed by North America region as compared to 57% in the previous year. L&T Infotech group recorded gross revenue of 6075 crore during the year ended March 31, 2016, registering 19.9% growth over the previous year. The revenue in USD terms increased by 9.5%. Geographical composition of the revenue includes 69% from North America, 17% from Europe, 8% from India & Asia and 6% from rest of the world. Total manpower as at March 31, 2016 stood at 20072 vis-à-vis 19479 as at March 31, 2015. 7. IT & Technology Services (IT & TS) IT & TS segment comprises L&T Infotech group of companies and L&T Technology Services group of companies. Segment recorded gross revenue of 9117 crore for the year ended March 31, 2016 with robust growth of 19.1% over the previous year. Most of the revenues of the segment are from international customers. 2015-16 Business operations generated cash flows of 3256 crore during the year higher than 3118 crore in the previous year. Borrowings during the year (net of repayments) were 233 crore. Dividend and treasury income flows contributed 1551 crore to the cash along with divestment proceeds of 789 crore. Segment revenue grew by 18.9% y-o-y at 8840 crore for the year as jobs under execution progressed on expected lines. International revenue contributed 47% of the total revenue of the segment as compared to 51% in the previous year. International Domestic 2013-14 H4000- 1515.80 1680.91 66283.56 97069.71 H(IV) 23051.11 H(V) 10205.15 TOTAL H(VI) 21529.33 18574.16 57282.84 86903.76 26309.19 6490.97 H(III) 65.97 1888.00 G(III) CONTINGENT LIABILITIES 113.12 Current assets Current investments Inventories 2270.72 Trade receivables Short term loans and advances Other current assets H(I) 4670.98 5380.08 H(II) Cash and bank balances COMMITMENTS (Capital and others) (DIN 00041197) OTHER NOTES FORMING PART OF THE ACCOUNTS Company Secretary M. No. A3471 J R R. SHANKAR RAMAN A. M. NAIK N. HARIHARAN Group Executive Chairman (DIN 00001514) Chief Financial Officer & Whole-time Director (DIN 00101004) (DIN 00019798) VIKRAM SINGH MEHTA SUSHOBHAN SARKER (DIN 00088276) SUNITA SHARMA (DIN 02949529) Directors Other non-current assets M. M. CHITALE SIGNIFICANT ACCOUNTING POLICIES 228 Membership No. 038332 In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm's Registration No. 117366W/W-100018 by the hand of P. R. RAMESH Mumbai, May 25, 2016 Partner For SHARP & TANNAN Chartered Accountants Firm's Registration No. 109982W by the hand of FIRDOSH D. BUCHIA Partner Membership No. 70928 75.43 1995-96 to 2012-13 G(II) (i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (b) The Company has a program of verification of fixed assets to cover all the items in a phased manner over a period of 3 years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, certain fixed assets were physically verified by the Management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification. (c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed / transfer deed / conveyance deed provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings (including land whose title deed have been pledged as security against debentures issued by the Company), are held in the name of the Company as at the balance sheet date, except the following: crore Type of asset Total no. of cases Leasehold / freehold Land 2 Freehold Gross block as at March 31, 2016 0.27 Net block as at March 31, 2016 Remarks 0.27 Buildings 16 Freehold (Referred to in paragraph 2 under 'Report on Other Legal and Regulatory Requirements' section of our report of even date) ANNEXURE "B" TO THE INDEPENDENT AUDITORS' REPORT 223 (Membership No. 38332) Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors' judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company's internal financial controls system over financial reporting. Meaning of Internal Financial Controls Over Financial Reporting A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Inherent Limitations of Internal Financial Controls Over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. For DELOITTE HASKINS & SELLS LLP 3.94 Chartered Accountants P. R. RAMESH (Partner) (Membership No. 70928) MUMBAI, May 25, 2016 For SHARP & TANNAN Chartered Accountants (Firm Registration No. 109982W) FIRDOSH D. BUCHIA (Partner) (Firm Registration No. 117366W/W-100018) Conveyance deed pending to be executed. 1.43 Conveyance deed pending to be executed. Central Sales Tax Act, Local Taxability of sub-contractor turnover, rate of tax for declared goods, Supreme Court 1991-92, 1995-96, 1997-98, 1999-00 to 2006-07 15.53 3.19 High Court 1986-87 to 1999-00, 2005-06 to 2010-11, 2012-13 Unpaid (* crore) 65.23 Sales Tax/ VAT Tribunal 1989-90 to 2012-13 373.09 326.54 Sales Tax Acts and Works Contract Tax Act inter-state sales and non-submission of forms Dispute regarding question of law, non-submission of forms, classification dispute, tax deducted at source at lower rate, sales in transit, high seas sales, labour turnover, local VAT, rate of tax on declared goods and other matters. Non-submission of forms, classification disputes, disallowance of sales occasioning import, arbitrary demand raised, sub-contractors turnover disallowed, pumping and freight charges, inter-state sales turnover, tax deducted at source disallowed, rates of tax of declared goods, classification dispute, disallowance of Entry tax and other matters. 48.51 Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. (crore) Amount Relates In respect of immovable properties of land and buildings that have been taken on lease and disclosed as fixed asset in the financial statements, the lease agreements are in the name of the Company, where the Company is the lessee in the agreement. (ii) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals and no material discrepancies were noticed on physical verification. (iii) According to the information and explanations given to us, the Company has granted loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013, in respect of which: (a) The terms and conditions of the grant of such loans are, in our opinion, prima facie, not prejudicial to the Company's interest. (b) The schedule of repayment of principal and payment of interest has been stipulated and repayments or receipts of principal amounts and interest have been regular as per stipulations. (c) There is no overdue amount remaining outstanding as at the balance sheet date. (iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of grant of loans, making investments and providing guarantees and securities, as applicable. (v) According to the information and explanations given to us, the Company has not accepted any deposit during the year and hence reporting under clause (v) of CARO 2016 is not applicable to the Company. (vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Companies Act, 2013. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete. (vii) According to the information and explanations given to us, in respect of statutory dues: Involved (a) The Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Employees' State Insurance, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues applicable to it to the appropriate authorities. LARSEN & TOUBRO (b) There were no undisputed amounts payable in respect of Provident Fund, Employees' State Insurance, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues in arrears as at March 31, 2016 for a period of more than six months from the date they became payable. (c) Details of dues of Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, and Value Added Tax which have not been deposited as on March 31, 2016 on account of disputes are given below: Name of Statute Nature of Dues Forum where Dispute is Pending Period to which Amount Amount 224 Auditors' Responsibility The Company's management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013. Management's Responsibility for Internal Financial Controls Chartered Accountants Indiabulls Finance Centre, Tower 3 27th - 32nd Floor, Senapati Bapat Marg Elphinstone Road (West) Mumbai 400013. LARSEN & TOUBRO SHARP & TANNAN Chartered Accountants Ravindra Annexe 194, Churchgate Reclamation Dinshaw Vachha Road Mumbai 400 020. DELOITTE HASKINS & SELLS LLP INDEPENDENT AUDITORS' REPORT Report on the Standalone Financial Statements We have audited the accompanying standalone financial statements of Larsen & Toubro Limited (the "Company"), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information. Management's Responsibility for the Standalone Financial Statements The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (the "Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards prescribed under section 133 of the Act, as applicable. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder and the Order under section 143 (11) of the Act. We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. TO THE MEMBERS OF LARSEN & TOUBRO LIMITED An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors' considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements. 220 The Company has Disaster Recovery (DR) systems which rescued the businesses from disruptions during the heavy rains in Chennai in December 2015. 74.77 LARSEN & TOUBRO and promotes a culture of building the ability to anticipate and manage risks effectively and converting them into opportunities. FINANCIAL RISKS Capital Structure, Liquidity and Interest Rate Risks The Company continues its policy of maintaining a conservative capital structure which has ensured that it retains the highest credit rating even amidst an adverse economic environment. Low gearing levels also equip the Company with the ability to navigate business stresses on one hand and raise growth capital on the other. This policy also provides flexibility of fund raising options for future, which is especially important in times of global economic volatility. Given the continuing tough economic conditions in 2015-16, there has been an increase in the working capital levels of the Company. The Company has been investing capital into subsidiaries as scheduled and in some cases to provide for deficits caused by the economic/ business/performance downturn, and also to optimise overall Group interest rate risks and costs. The Company continues to maintain adequate liquidity to deal with economic cycles. The Company judiciously deploys its periodical surplus funds in short term investments in line with the corporate treasury policy. The Company constantly monitors the liquidity levels, economic and capital market conditions and maintains access to the lowest cost of sourcing liquidity through banking lines, trade finance and capital markets. In line with above, the Company continued to use a mix of short term and long term funding sources for its working capital funding. The Company further optimised the cost of debt by using subsidised export financing scheme of RBI and issuing more of short dated CPs. The Company dynamically manages interest rate risks through a mix of fund raising products, investment products and derivative products across maturity profiles and currencies within a robust risk management framework. Foreign Exchange and Commodity Price Risks The various businesses of the Company are exposed to fluctuations in foreign exchange rates and commodity prices. Additionally, it has exposures to foreign currency denominated financial assets and liabilities. The business related financial risks, especially involving commodity prices, by and large, are managed contractually through price variation clauses, while the foreign exchange and residual commodity price risks are managed by an appropriate choice of treasury products for balancing risks and at the same time optimising the hedging costs. The financial year 2015-16 was characterised by a strong USD against most of the asset classes (currency/ commodities) as well as increased volatility on account of sharp movements in commodity prices and Asian currencies including more particularly the Chinese Yuan. The rupee moved from 62.50 to 68.80 per US Dollar during the year though it ended the year at 66.25. In spite of the two way exchange rate volatility, the impact on the Company was, however, muted given the robust financial risk management process in place. Benign commodity prices along with the analytical risk management framework has benefited the Company. IV. INTERNAL CONTROLS The Company has a program to do a comprehensive review of its security systems and processes to address growing IT/cyber security threats. The corporate IT function of the Company has acquired Certification of ISO 27001 for Information Security Management. ISO 27001 (formally known as ISO/IEC 27001:2005) is a specification for an information security management system (ISMS). An ISMS is a framework of policies and procedures that includes all legal, physical and technical controls involved in an organisation's information risk management processes. The Company continued its efforts in providing an effective internal control environment where ethical behavior, accountability, controls and assurance are practiced. The Company has a robust framework for Internal Controls, commensurate with the size and complexity of its business. There is a system of periodically apprising the senior management and the Audit Committee of the Board on the internal processes of the Company with respect to Internal Financial Controls, Statutory Compliances and Assurance. Employees are guided by the Company's 'Code of Conduct'. The Company's 'Whistle Blower' policy enables the employees to have direct access to the members of the Board of Directors without interference from management. Heads of businesses and support functions are primarily responsible for design, establishment of internal controls and its operating effectiveness in their respective areas. Operating framework and procedures are in place in individual businesses of the Company in the form of Internal Control Manuals, Standard Operating Procedures, Accounting Guidelines and Authorisation Matrix for financial transactions including regular management reporting and monitoring thereof. Policies and procedures 219 are reviewed periodically and updated to factor in changes in business processes as well as improvements necessitated to strengthen the internal control systems. Internal Control department at the corporate formulates procedures and guidelines for areas of weaknesses which are identified during internal audit or as triggered by process owners or management based on internal or external risk factors. The Company also periodically engages independent professional firms to carry out review of effectiveness of various control processes in businesses and support functions. The assurance function is carried out by the Corporate Audit Services (CAS) which makes independent assessment by conducting audit of all units of the Company and its major subsidiaries at regular intervals. The audit inter alia covers assessment of financial and operational efficiency as part of the process. Further, it conducts operating effectiveness testing of the internal financial controls with the objective of providing an independent and reasonable assurance to the Audit Committee and the Board of Directors. The entire process is reviewed periodically by the senior management and the Audit Committee which oversees the internal audit function. The Company continually aligns to the best practices in the areas of control and compliance, to ensure high standards of governance in both domestic and international businesses. V. INFORMATION TECHNOLOGY The Company recognises the strategic imperative of Information Technology (IT) for efficient conduct of its business operations. The Company leverages IT as a key enabler to improve productivity through collaboration and integrate internal controls with business processes. The Company implemented Enterprise Resource Planning (ERP) and other solutions to run the various business processes. Niche bolt on systems are being deployed for Vendor Invoice Management, CRM on cloud, Advance Planning and Optimisation to provide edge to Business. Simultaneously, IT infra is continuously upgraded to deploy the latest and best in class IT assets and technology. The Company has initiated various 'Digital & loT' projects, in the areas of risk mitigation and manufacturing to make its business processes LEAN and contribute to the Company's bottom line in today's ever challenging business scenario. L&T's dedicated Cloud infrastructure, created a few years ago, is widely deployed across the Group companies. The Company has taken steps to embrace 'Public Cloud', and the latest office automation and collaboration applications are being rolled out. Increasing focus on control and compliance requirements under the Companies Act, 2013 and the new SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 have led to reviewing the control design and effectiveness across the organisation. The Company has laid down Internal Financial Controls as detailed in the Companies Act, 2013. These have been established at the entity and process levels and are designed to ensure compliance to internal control requirements, regulatory compliance and appropriate recording of financial and operational information. The Company has reviewed and ensured sustained effectiveness of internal financial controls by adopting a systematic approach to assess design and operating effectiveness. Dispute regarding question of law, non-submission of forms, classification dispute, disallowance of setoff, sales in transit and high seas sales, and other matters. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2016, and its profit and its cash flows for the year ended on that date. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts-refer note C(II), D(IV) and Q(6)(a) to the financial statements; and There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company. As required by the Companies (Auditor's Report) Order, 2016 ("the Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in "Annexure B" a statement on the matters specified in paragraphs 3 and 4 of the Order. For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm Registration No. 117366W/W-100018) P. R. RAMESH (Partner) (Membership No. 70928) The Company has disclosed the impact of pending litigations on its financial position in its financial statements - refer notes (I), note (II) in Q(14) and Q(15) to the financial statements; MUMBAI, May 25, 2016 Chartered Accountants (Firm Registration No. 109982W) FIRDOSH D. BUCHIA (Partner) (Membership No. 38332) ANNEXURE "A" TO THE INDEPENDENT AUDITORS' REPORT (Referred to in paragraph 1 (f) under 'Report on Other Legal and Regulatory Requirements' of our report of even date) Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (the "Act") We have audited the internal financial controls over financial reporting of Larsen & Toubro Limited (the "Company") as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date. 222 LARSEN & TOUBRO For SHARP & TANNAN Opinion iii. With respect to the other matters to be included in the Auditors' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: Other Matters Standalone financial statements include the financial statements/information of 9 jointly controlled entities whose financial statements/ financial information reflect the Company's share in net assets of 474.73 crore as at March 31, 2016 and share in profit (net) *221.15 crore for the year ended on that date. The financial statements/information of these jointly controlled entities have been audited by the auditors of jointly controlled entities whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these jointly controlled entities, is based solely on the report of such auditors of jointly controlled entities. 221 Standalone financial statements include the financial statements/information of 7 jointly controlled entities whose financial statements/ financial information reflect the Company's share in net assets of 296.62 crore as at March 31, 2016 and share in profit (net) * 24.79 crore for the year ended on that date. These financial statements/information have been furnished to us by management and our opinion on the standalone financial statements, in so far as it relates to the amounts and disclosures included in respect of these jointly controlled entities is based solely on such financial statements/information certified by management. In our opinion and according to the information and explanations given to us by the management, these financial statements are not material to the Company. Our opinion is not modified in respect of this matter. Report on Other Legal and Regulatory Requirements 1. As required by Section 143 (3) of the Act, we report that: a) i. 2. e) f) g) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books. The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account. In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards prescribed under section 133 of the Act, as applicable. On the basis of the written representations received from the directors as on March 31, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016 from being appointed as a director in terms of Section 164 (2) of the Act. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure A". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company's internal financial controls over financial reporting. b) Non Submission of Forms and other matters. ii. Commissioner C(I) Q(13) 8339.27 8508.60 203.36 362.99 C(II) 152.54 119.62 C(III) 37084.58 370.23 9065.40 9336.04 Current liabilities Short term borrowings D(I) 3881.87 Current maturities of long term borrowings D(II) 1387.15 344.83 3791.08 636.91 40718.33 186.30 40532.03 Chartered Accountants (Firm Registration No. 109982W) FIRDOSH D. BUCHIA (Partner) (Membership No. 38332) 227 Balance Sheet as at March 31, 2016 Note As at 31-3-2016 crore 185.91 36898.67 As at 31-3-2015 crore crore EQUITY AND LIABILITIES: Shareholders' funds Share capital Reserves and surplus Non-current liabilities Long term borrowings Deferred tax liabilities (net) Other long term liabilities Long term provisions AB crore For SHARP & TANNAN Trade payables Due to micro enterprises and small enterprises Capital work-in-progress E(I) 250.69 Intangible assets under development E(II) 158.91 Non-current investments F Long term loans and advances 138.40 G(I) 3031.73 7402.20 85.16 304.54 189.50 7981.40 17672.82 3825.30 (Appeal) Cash and bank balances 7668.59 19897.94 D(III) E(II) 7120.59 134.32 117.05 Due to others 21984.48 18733.55 Other current liabilities D(IV) 14681.55 Short term provisions Intangible assets D(V) 2523.00 47285.98 97069.71 40483.14 86903.76 TOTAL ASSETS: Non-current assets Fixed Assets Tangible assets E(I) 2693.62 MUMBAI, May 25, 2016 17204.54 (Partner) The Central Excise Act, 1944, Service Tax under Finance Act, 1994 Income-tax Act, 1961 Non-submission of forms, disallowance of sales occasioning imports, rate of tax dispute, deficiency in documents, sales in transit, high seas sales and other matters. Excise Duty dispute on site mix concrete & PSC grinder. Export rebate claim, service tax on commercial construction services, service tax liability against rate change and penalty imposed for wrong availment of CENVAT credit. Demand of excise duty on Fabrication of Cable tray supports/ ED exemption/ Export rebate disallowance / Service Tax on Business Auxiliary Services/ Valuation Dispute pertaining to Excise/ Duty on Supply of Bolts & nuts/ GTA services, site jobs, export rebate disallowance, MRP valuation disputes, CENVAT credit availed, non-maintenance of separate records, and other matters. Nature of Dues Disallowance of CENVAT credit, excise duty refund, excise duty on site jobs, short payment of service tax, service tax rate dispute, valuation dispute and other matters. Assessment under section 143(3), Assessment under section 143(3) read with section 147, Assessment under section 143(3) read with section 144C(13) and demand of tax deducted at source on Internet Charges, Reimbursement of Data card expenses and Bank Guarantee Charges. Forum where Period to which Amount Amount Dispute is Amount Relates Involved Unpaid Disallowance of CENVAT Credit. Pending Name of Statute 1,493.20 2003-04 to 2011-12 16.42 (Membership No. 70928) 15.77 Commissioner 2008-09, 2010-11, 2011-12 7.01 4.57 Additional/ Assistant Commissioner 225 16.32 Joint 1994-95 to 2013-14 139.92 91.71 Commissioner Dispute regarding question of law, non-submission of forms, classification dispute and disallowances made for credit notes and occasioning imports, Input credit reversals, sales in transit, high seas sales, deficiency in documents, local VAT, rate of tax on declared goods and other matters. Non-submission of forms, additional demands for pending forms, rate of tax dispute, disallowance of branch transfer, sub-contractors turnover, considering supply agreement as Works Contract Tax, disallowance of sales in transit, stock transfer and other matters. Deputy Commissioner (Appeal) 1,541.53 15.11 (*crore) 1996-97 to 2013-14 Assessing/ Commissioner 2003-04 to 2011-12 (Appeal) ITAT P. R. RAMESH 3.94 3.80 2002-03, 2003-04, 2006-07 to 2010-11 1,462.11 833.77 (viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to financial institutions, banks and government and dues to debenture holders. (ix) In our opinion and according to the information and explanations given to us, the Company has not raised money by way of initial public offer or further public offer (including debt instruments) and money raised by way of the term loans have been applied by the Company during the year for the purposes for which they were raised. (xi) In our opinion and according to the information and explanations given to us, the Company has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013. 226 LARSEN & TOUBRO (xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the CARO 2016 is not applicable. (xiii) In our opinion and according to the information and explanations given to us the Company is in compliance with Section 188 and 177 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards. (xiv) According to the information and explanations given to us, during the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of CARO 2016 is not applicable to the Company. (xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or persons connected with him and hence provisions of section 192 of the Companies Act, 2013 are not applicable. (xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. (*crore) For DELOITTE HASKINS & SELLS LLP Chartered Accountants Commissioner 2015-16 (x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company by its officers or employees has been noticed or reported during the year. (Firm Registration No. 117366W/W-100018) 486.02 Additional/ Assistant 484.76 Commercial Tax Officer 0.97 0.27 Supreme Court 1997-98 2003-04, Oct 2005 to Aug 2007 42.48 High Court CESTAT 4.55 4.73 42.48 Commissioner 2006-07 to 2014-15 (Appeal) 0.14 0.14 1999-00 to 2015-16 611.84 1991-92 to 2014-15 608.98 9 Redeemable at face value at the end of 10th year from the date of allotment. Redeemable at face value at the end of 10th year from the date of allotment. 8.40% p.a. payable annually Total Less: 2200 2600 550 2050 Redeemable at face value at the end of 10th year from the date of allotment. 1000 September 24, 2015 10,00,000 Terms of repayment for debentures outstanding as on 31-3-2016 300 7.80% p.a. payable annually 10,00,000 8 11, 2014 December 10,00,000 7 350 9.15% p.a. payable annually August 22, 2014 10,00,000 6 payable annually Redeemable at face value at the end of 10th year from the date of allotment. February 2, 2015 350 Terms of repayment for debentures outstanding as on 31-3-2016 Redeemable at the end of 10th year from the date of allotment. Redemption value will be calculated as per the following formula: [{Average reference WPI $ (on Maturity Date)/Average reference WPI (on Issue Date)} * Face Value] with Floor Rate as 3% and Cap Rate as 12%. Redeemable at face value at the end of 2nd year from the date of allotment. 0.675% US$ denominated 5 years & 1 day Foreign Currency Convertible Bonds (FCCB) carried at 1325.10 crore as on March 31, 2016 (previous year: 1250 crore) represent 1000 bonds of US$ 2,00,000 each. The bonds are convertible into the Company's fully paid equity shares of 2 each at a conversion price of 1916.50 per share at the option of the bond holders at any time on and after December 1, 2014 up to October 15, 2019. The bonds are redeemable, subject to fulfillment of certain conditions, in whole but not in part, at the option of the Company, on or at any time after October 22, 2017 but not less than seven business days prior to the maturity date, at the principal amount together with accrued interest (calculated up to but excluding the date of redemption) on the date fixed for redemption, unless the bonds have been previously redeemed, converted or purchased and cancelled. Details of term loans (unsecured): foreign currency loans: 300 8.42% p.a. Foreign currency convertible bonds: C(I)(b) Notes forming part of the Accounts (contd.) 237 The principal amount has been calculated as [{Average reference WPI (as at 31-3-2015)/Average reference WPI (as at 23-5-2013)} * Face Value] The principal amount has been calculated as [{Average reference WPI (as at 31-3-2016)/Average reference WPI (as at 23-5-2013)} * Face Value] $ WPI here refers to Wholesale Price Index 1.65% p.a. payable on inflation adjusted principal as on the date of coupon payment Interest for the year 2015-16 10,00,000 1 31-3-2015 crore 109.76 # 31-3-2016 * crore 108.81* Date of allotment May 23,2013 debenture () Face value per Sr. no. # * (iii) Unsecured redeemable non-convertible inflation linked debentures: 600 Current portion of long term borrowings [Note D(II)] 1600 Long term borrowings as disclosed in [Note C(I)] Redeemable at face value at the end of 5th year from the date of allotment. Redeemable at face value at the end of 366th day from the date of allotment. Redeemable at face value at the end of 368th day from the date of allotment. 1250 Bonds redeemable at face value at the end 712th day from date of allotment & 750 bonds redeemable at face value at the end 731st day from date of allotment. 200 9.20% p.a. payable annually 400 200 Face value per debenture (*) Sr. no. 1 (ii) Unsecured redeemable non-convertible fixed rate debentures (privately placed): C(I)(a) (contd.) Notes forming part of the Accounts (contd.) LARSEN & TOUBRO Security: The debentures are secured by way of a first charge having pari passu rights on the immovable property at certain locations and part of a movable property of a business division, both present and future. 236 Terms of repayment for debentures outstanding as on 31-3-2016 Redeemable at face value at the end of 10th year from the date of allotment. 400 Total Date of allotment year 2015-16 31-3-2015 crore 400 crore 400 31-3-2016 Date of allotment January 5, 2009 10,00,000 1 Face value per debenture (*) no. Sr. (i) Secured redeemable non-convertible fixed rate debentures (privately placed): C(I)(c) 9.15% p.a. payable annually Interest for the 31-3-2016 crore 31-3-2015 crore August 21, 10,00,000 5 200 8.80% p.a. payable annually 2010 200 April 13, 10,00,000 4 300 9.15% p.a. payable annually 2010 300 May 11, 10,00,000 3 300 8.95% p.a. payable annually 2010 300 May 26, 10,00,000 2 payable annually 2012 Interest for the year 2015-16 250 9.75% p.a. 250 April 10, 10,00,000 2014 Sr. Weighted average 31-3-2016 crore (i) Options granted and outstanding at the beginning of the year 77,08,842 362.74 98,66,116 374.42 (ii) Options granted during the year 4,95,265 282.57 12,72,990 297.48 (iii) Options allotted during the year 19,16,784 (₹) (iv) Options lapsed during the year 4,94,281 57,93,042 (vi) Options exercisable at the end of the year out of (v) supra 28,52,010 364.76 366.57 368.74 354.10 77,08,842 32,32,795 26,49,403 373.74 5148.22 Long term borrowings as disclosed in [Note C(I)] 36.46 Current portion of long term borrowings [Note D(II)] 5184.68 5291.89 836.81 4455.08 Total Less: (v) Options granted and outstanding at the end of the year exercise price exercise price (₹) No. of stock options Options vested C(I)(a) 25200 25200 32250 32250 59550 59550 47178 47178 Options yet to vest 96458 100390 257366 304656 2334008 2663571 430461 484894 2510571 3991153 9 Weighted average remaining contractual life of options (in years) Nil Nil Nil Nil Nil Nil Nil Nil 5.16 5.38 Nil 0.03 2.18 3.95 c) The number and weighted average exercise price of stock options are as follows: 2015-16 2014-15 No. of stock Particulars options Weighted average Repayable in 6 equal installments payable annually from September 18, 2013 to September 18, 2017 with the final installment due on June 18, 2018 Repayable on October 19, 2018 USD LIBOR + Spread USD LIBOR + Spread 312.50 Fixed Interest Rate 6 Repayable on July 14, 2017 USD LIBOR + Spread 156.25 165.64 5 Repayment due on September 27, 2017 USD LIBOR + Spread 125.00 132.51 4 Repayment due on July 2, 2018 Repayable in 3 installments on (i) November 3, 2018 (ii) November 3, 2019 and (iii) November 3, 2020 USD LIBOR + Spread 312.50 331.28 3 Repayment due on October 21, 2019 USD LIBOR + Spread USD LIBOR + Spread 625.00 662.55 2 Terms of repayment of term loan outstanding as on 31-3-2016 Rate of interest 31-3-2015 crore 1250.00 1325.10 1 292.94 no. 276.34 7 165.63 13 145.83 115.95 12 11 238 Repayable in 2 installments on (i) August 30, 2016 and (ii) August 30, 2017 Repayable in 3 installments on (i) August 30, 2016 (ii) August 30, 2017 and (iii) June 28, 2018 Repayable in 3 installments on (i) August 30, 2016 (ii) August 30, 2017 and (iii) June 28, 2018 Repayable in 3 installments on (i) August 30, 2016 (ii) August 30, 2017 and (iii) June 28, 2018 Repayable in 3 installments on (i) August 30, 2016 (ii) August 30, 2017 and (iii) June 28, 2018 USD LIBOR + Spread 349.74 370.75 10 USD LIBOR + Spread 625.00 662.55 9 USD LIBOR + Spread 625.00 662.55 8 USD LIBOR + Spread 381.52 404.44 USD LIBOR + Spread Loans guaranteed by directors or others Nil (previous year: Nil) crore 8508.60 As per last Balance Sheet Revaluation reserve: 400.01 406.51 150.00 143.51 256.50 156.50 Add: Transferred from Surplus Statement of Profit and Loss Less: Transferred to general reserve 400.01 As per last Balance Sheet Debenture redemption reserve: 7944.99 15.57 8126.02 (0.62) Premium on inflation linked debentures (net of tax) 15.13 0.87 Less: Share/bond issue expenses (net of tax) 7963.03 8126.27 225.23 181.28 7737.80 7944.99 Addition during the period 2.91 19.25 Less: Transferred to Statement of Profit and Loss Less: Transferred to general reserve 1.59 (99.94) (135.53) (86.74) 96.65 71.68 Deduction during the year (46.00) Addition during the year (125.62) As per last Balance Sheet Deferred employee compensation expense: 378.18 300.22 11.60 156.19 459.23 86.74 114.12 9.84 46.00 378.18 Deduction during the year Transferred to general reserve Addition during the year As per last Balance Sheet Employee stock options outstanding: Share options outstanding account: 15.57 15.18 2.09 0.39 As per last Balance Sheet Securities premium account [Note Q(5)(b)] Capital reserve crore 10.52 (ii) Weighted average expected life of options (i) Weighted average risk-free interest rate Particulars no. Sr. j) The fair value has been calculated using the Black-Scholes Option Pricing Model and the significant assumptions and inputs to estimate the fair value of options granted during the year are as follows: 1190.22) per option i) h) Weighted average fair values of options granted during the year is 965.39 (previous year: (v) Diluted EPS after extraordinary items would have decreased from 56.80 (previous year: 54.10) per share to ₹ 56.72 (previous year: 54.00) per share (iv) Diluted EPS before extraordinary items would have decreased from 56.80 (previous year: 54.10) per share to ₹ 56.72 (previous year: 54.00) per share (iii) Basic EPS after extraordinary items would have decreased from 57.07 (previous year: 54.46) per share to ₹ 57.00 (previous year: 54.37) per share (ii) Basic EPS before extraordinary items would have decreased from 57.07 (previous year: 54.46) per share to 57.00 (previous year: 54.37) per share The employee compensation charge debited to the Statement of Profit and Loss for the year 2015-16 would have been higher by 6.13 crore (previous year: 9.10 crore) [excluding 2.61 crore (previous year: 2.05 crore) on account of grants to employees of subsidiary companies] (i) Had fair value method been adopted for expensing the compensation arising from employee share-based payment plans: During the year, the Company has recovered 11.75 crore (previous year: 14.60 crore) from its subsidiary companies towards the stock options granted to their employees, pursuant to the employee stock option schemes. (ii) Expense on Employee Stock Option Schemes debited to the Statement of Profit and Loss during 2015-16 is 53.51 crore (previous year: 49.11 crore) net of recoveries of 1.16 crore (previous year: 2.56 crore) from its group companies towards the stock options granted to deputed employees, pursuant to the employee stock option schemes (Note N). The entire amount pertains to equity-settled employee share-based payment plans. In respect of stock options granted pursuant to the Company's stock options schemes, the intrinsic value of the options (excess of market price of the share over the exercise price of the option) is treated as discount and accounted as employee compensation over the vesting period. f) e) (i) d) Weighted average share price at the date of exercise for stock options exercised during the year is 1543.13 (previous year: 1554.71) per share. Notes forming part of the Accounts (contd.) 233 368.52 362.74 (iii) Weighted average expected volatility (125.62) (iv) Weighted average expected dividends over the life of the option (vi) Weighted average exercise price 10.52 crore crore Of which As at 31-3-2015 As at 31-3-2016 LARSEN & TOUBRO Particulars Reserves and surplus NOTE [B] Notes forming part of the Accounts (contd.) 234 Provision for final dividend has been made in the books of account for 93,14,78,845 equity shares outstanding as at March 31, 2016 amounting to ₹ 1699.95 crore. A(IX) The Directors recommend payment of final dividend of 18.25 per equity share of 2 each on the number of shares outstanding as on the record date. The balance in share option outstanding account as on March 31, 2016 is 200.28 crore (net) (previous year: 252.56 crore), including 125.92 crore (previous year: 135.98 crore) for which the options have been vested to employees as on March 31, 2016. Expected volatility is based on the historical volatility of the Company's share price applicable to the total expected life of each option. 313.49 per share 1444.51 per option 57.18 per option 4.01 years 33.92% 8.57% 2014-15 282.57 per share 1211.45 per option 7.66% 3.86 years 30.52% 62.69 per option 2015-16 (vii) Method used to determine expected volatility (v) Weighted average share price * Hedging reserve (net of tax): [Note Q(13)] (198.25) * Total As at 31-3-2015 Unsecured Secured * Total Unsecured Secured Note As at 31-3-2016 Sales tax deferment loan Term loans from banks C(I)(a)(i) & (ii) 0.675% Foreign currency convertible bonds Redeemable non-convertible fixed rate debentures Particulars Long term borrowings NOTE[C(I)] 3429.11 36898.67 6737.08 40532.03 1903.57 1999.48 134.33 140.88 Additional tax on dividend 1510.54 Redeemable non-convertible inflation linked debentures crore 400.00 crore 2050.00 crore 2450.00 0.62 0.62 8108.60 400.00 8339.27 7939.27 400.00 0.28 5148.22 5148.22 4455.08 4455.08 0.28 C(I)(d) C(I)(c) 1250.00 1250.00 1325.10 1325.10 C(I)(b) 109.76 109.76 108.81 108.81 C(I)(a)(iii) crore 2000.00 1600.00 crore crore 400.00 1699.95 Proposed dividend [Note A(IX)] 256.50 156.50 Particulars Reserves and surplus (contd.) NOTE [B] Notes forming part of the Accounts (contd.) 235 25044.16 33469.56 33794.95 Carried forward 25204.39 150.00 Add: Transferred from debenture redemption reserve 2.09 11.60 9.84 Add: Transferred from ESOP Outstanding 0.39 Add: Transferred from Revaluation reserve 25030.47 25044.16 As per last Balance Sheet General reserve: (198.25) (167.95) 79.25 (155.25) 30.30 Addition/(deduction) during the year (net) Transfer pursuant to scheme of arrangement/business transfer agreement (122.25) Brought forward As per last Balance Sheet Surplus Statement of Profit and Loss crore Transfer to debenture redemption reserve 0.32 0.36 Additional tax on dividend paid for previous year 1.88 1.79 Less: Dividends paid for previous year 5332.68 8736.56 5056.18 5311.46 Profit for the year 29.33 2.13 retained earnings Reversal of deferred tax on depreciation charged against 333.45 (86.28) (6.14) Depreciation charged against retained earnings 3429.11 As per last Balance Sheet 33469.56 crore crore As at 31-3-2015 33794.95 crore As at 31-3-2016 47178 526919 585284 257366 304656 4844579 6654724 0.23 47178 Cash flow from operating activities: Profit before tax (excluding extraordinary and exceptional items) Adjustments for: 6128.83 6344.06 Dividend received (1121.35) Depreciation, amortisation, impairment and obsolescence (net) 998.88 (854.19) 1008.15 Exchange difference on items grouped under financing/investing activities 71.80 59.80 A. Effect of exchange rate changes on cash and cash equivalents (1.48) Interest expense 1449.04 1419.65 Interest income (513.32) (565.91) (83.97) (29.19) (232.49) (406.63) 54.67 2.00 Operating profit before working capital changes Adjustments for: Provision/(reversal) for diminution in value of investments Employee stock option-discount forming part of staff expenses by the hand of FIRDOSH D. BUCHIA Partner Membership No. 038332 Mumbai, May 25, 2016 N. HARIHARAN Company Secretary M. No. A3471 OR R. SHANKAR RAMAN A. M. NAIK Group Executive Chairman (DIN 00001514) M. M. CHITALE Chief Financial Officer & Whole-time Director (DIN 00101004) (DIN 00019798) VIKRAM SINGH MEHTA (DIN 00041197) SUSHOBHAN SARKER (DIN 00088276) SUNITA SHARMA (DIN 02949529) Directors 229 Cash Flow Statement for the year ended March 31, 2016 2015-16 2014-15 crore crore Profit on sale of fixed assets (net) Profit on sale of investments (net) 51.67 Firm's Registration No. 109982W 10.15 6764.24 Sale of long term investments 106.65 (Purchase)/Sale of current investments (net) 681.89 Deposits/Loans (given)-subsidiaries, associates, joint venture companies and third parties (12498.99) (915.51) (5084.44) Deposits/Loans repaid-subsidiaries, associates, joint venture companies and third parties 9790.42 5980.74 Advance towards equity commitment (addition) (5.25) 434.55 (866.03) Interest received 1070.15 87.56 429.18 558.31 Dividend received from subsidiaries 1007.91 850.70 Dividend received from other investments 113.44 3.49 Consideration received on transfer of Foundry Business unit Advance towards equity commitment refund (952.90) 51.75 (2581.79) 2289.43 7014.21 (Increase)/decrease in trade and other receivables (8082.09) (5124.36) (Increase)/decrease in inventories 355.14 (288.17) Increase/(decrease) in trade payables and customer advances 5867.62 3241.35 Cash (used in)/generated from operations 4904.91 4843.03 Direct taxes refund/(paid)-net (1649.19) (1725.05) Net cash (used in)/from operating activities 3255.72 3117.98 B. Cash flow from investing activities: Purchase of fixed assets (775.85) Sale of fixed assets (including advance received) Investment in subsidiaries, associates and joint ventures Divestment of stake in subsidiaries, associates and joint ventures 132.46 (2943.20) (11.72) Chartered Accountants For SHARP & TANNAN Membership No. 70928 60415.00 635.39 57558.07 540.66 L 59779.61 2405.97 57017.41 2283.37 62185.58 59300.78 M 7396.35 17805.37 1129.18 1448.90 K 5496.79 1296.75 1831.46 14066.80 13240.77 114.98 4667.51 (215.61) 4303.44 46629.09 44380.43 NOP 4480.20 4162.46 18426.83 crore crore 2014-15 7,80,861 LARSEN & TOUBRO Statement of Profit and Loss for the year ended March 31, 2016 REVENUE: Revenue from operations (gross) Less: Excise duty Revenue from operations (net) Other income Total revenue EXPENSES: Manufacturing, construction and operating expenses: Cost of raw materials, components consumed Construction materials consumed Purchase of stock-in-trade Stores, spares and tools consumed Sub-contracting charges Changes in inventories of finished goods, work-in-progress and stock-in-trade Other manufacturing, construction and operating expenses Employee benefits expense Sales, administration and other expenses Finance costs Depreciation, amortisation, impairment and obsolescence Less: Transfer from revaluation reserve 2015-16 Note crore crore 2505.07 2000.99 1449.04 1419.65 Q(12) 57.07 54.46 56.80 54.10 2.00 2.00 Less: Overheads charged to fixed assets Total expenses Profit before exceptional and extraordinary items and tax Exceptional items Q(3) Profit before extraordinary items and tax Profit before tax Extraordinary items Tax expenses Current tax Deferred tax Profit for the period carried to Balance Sheet Basic earnings per equity share before extraordinary items (*) Diluted earnings per equity share before extraordinary items (*) Basic earnings per equity share after extraordinary items (*) Diluted earnings per equity share after extraordinary items (*) Face value per equity share (*) OTHER NOTES FORMING PART OF THE ACCOUNTS SIGNIFICANT ACCOUNTING POLICIES In terms of our report attached For DELOITTE HAŠKINS & SELLS LLP Chartered Accountants Firm's Registration No. 117366W/W-100018 by the hand of P. R. RAMESH Partner 54.10 79.70 56.80 57.07 998.88 1009.74 1.59 998.88 56062.28 1008.15 5.53 56056.75 6128.83 560.28 52971.68 14.96 52956.72 6344.06 357.16 6689.11 6701.22 6689.11 6701.22 Q(5) Q(13) 1551.19 1628.74 (173.54) 16.30 1377.65 1645.04 5311.46 5056.18 54.46 Cash received on transfer of Integrated Engineering Services business 549.49 Cash (used in)/from investing activities As at 31-3-2015 Number of shares 15,55,22,285 11,16,06,174 Shareholding % 16.73 12.01 7,59,26,462 8.15 8.17 7,59,25,962 A(V) Shares reserved for issue under options outstanding as at the end of the year on un-issued share capital: 232 As at 31-3-2016 Number of As at 31-3-2015 Number of 15.72 12.32 crore Particulars equity shares to (At face value) equity shares to (At face value) be issued as be issued as Employee stock options granted and outstanding # 0.675% 5 years & 1 day US$ denominated foreign currency convertible bonds (FCCB) ## fully paid 57,93,042 1.16 * fully paid 77,08,842 63,46,986 1.27 ** 63,46,986 1.54 * crore 11,47,52,281 14,64,19,088 % crore Issued, subscribed and fully paid up equity shares outstanding at the beginning of the year 92,95,62,061 185.91 92,69,12,658 185.38 Add: Shares issued on exercise of employee stock options during the year 19,16,784 0.39 26,49,403 0.53 Issued, subscribed and fully paid up equity shares outstanding at the end of the year 93,14,78,845 186.30 92,95,62,061 185.91 A(III) Terms/rights attached to equity shares: The Company has only one class of share capital, i.e., equity shares having face value of 2 per share. Each holder of equity share is entitled to one vote per share. A(IV) Shareholders holding more than 5% of equity shares as at the end of the year: Name of the shareholders Life Insurance Corporation of India L&T Employees Welfare Foundation Administrator of the Specified Undertaking of the Unit Trust of India As at 31-3-2016 Number of Shareholding shares 1.27** * The equity shares will be issued at a premium of 203.97 crore (previous year: Grant price () 2 Grant dates 3 Vesting commences on 1-6-2000 1-6-2001 19-4-2002 19-4-2003 14 Options granted and outstanding at the beginning of the year 25200 25200 32250 32250 59550 59550 5 Options lapsed during the year 6 Options granted during the year 19-4-2002 19-4-2003 23-5-2003 onwards 23-5-2003 onwards 23-5-2004 onwards 23-5-2004 onwards 1-9-2006 onwards 1-7-2007 onwards 1-9-2007 onwards 1-7-2008 onwards 47178 47178 585284 499543 304656 510181 6654724 8692214 40611 68450 11270 35625 442400 676786 150400 337800 344865 935190 7 Options exercised during the year 8 Options granted and outstanding at the end of the year 25200 25200 32250 32250 59550 59550 1 Number of shares no. Sr. 278.09 crore) ** The equity shares will be issued at a premium of by the bond holders 1215.13 crore (previous year: 1215.13 crore) on the exercise of options # Note A(VIII) for terms of employee stock option schemes ## Note C(1)(b) for terms of foreign currency convertible bonds LARSEN & TOUBRO Notes forming part of the Accounts (contd.) A(VI) The aggregate number of equity shares allotted as fully paid up by way of bonus shares in immediately preceding five years ended March 31, 2016 are 30,82,94,576 (previous period of five years ended March 31, 2015: 30,82,94,576 shares) A(VII) The aggregate number of equity shares issued pursuant to contract, without payment being received in cash in immediately preceding five years ended on March 31, 2016: Nil (previous period of five years ended March 31, 2015: Nil) A(VIII) Stock option schemes a) Terms: i. ii. The grant of options to the employees under the stock option schemes is on the basis of their performance and other eligibility criteria. The options are vested equally over a period of 4 years [5 years in the case of series 2006(A)], subject to the discretion of the management and fulfillment of certain conditions. Options can be exercised anytime within a period of 7 years from the date of grant and would be settled by way of issue of equity shares. Management has discretion to modify the exercise period. b) The details of the grants under the aforesaid schemes under various series are summarised below: 2000 2002 (A) 2002 (B) 2003 (A) 2006 2003 (B) 2006 (A) 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15 2.30 2.30 2.30 2.30 2.30 2.30 11.70 11.70 11.70 11.70 400.70 400.70 400.70 400.70 Series reference 168154 183609 36020 169900 1712610 2295894 crore Particulars (78.12) (1223.47) (1150.01) (2567.21) (1436.55) 166.45 (202.65) 1591.46 1794.12 1757.91 1591.46 1. Cash Flow Statement has been prepared under the indirect method as set out in the Accounting Standard (AS) 3: "Cash Flow Statements" as specified in the Companies (Accounting Standards) Rules, 2006. (134.69) 2. Purchase of fixed assets includes movement of capital work-in-progress during the year. 3. For cash and cash equivalents not available for immediate use as on the Balance Sheet date, see Note G(II)(a). 2015-16 2014-15 crore 1680.91 crore 1515.80 74.77 1755.68 75.43 1591.23 2.23 1591.46 (a) Cash and cash equivalents disclosed under current assets [Note H(IV)] 4. Cash and cash equivalents included in the Cash Flow Statement comprise the following: (1322.73) (1512.33) (164.97) (522.06) (1884.08) 230 LARSEN & TOUBRO Cash Flow Statement for the year ended March 31, 2016 (contd.) 2015-16 crore 2014-15 * crore C. Cash flow from financing activities: Proceeds from fresh issue of share capital Proceeds from long term borrowings Repayment of long term borrowings (Repayments)/Proceeds from other borrowings (net) Dividends paid Additional tax on dividend Interest paid (including cash flows from interest rate swaps) Net cash (used in)/ from financing activities Net (decrease)/increase in cash and cash equivalents (A + B + C) Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year Notes: 70.19 1589.22 98.89 (1420.79) 5109.83 (3929.44) 64.66 (b) Cash and cash equivalents disclosed under non-current assets [Note G(II)] Total cash and cash equivalents as per Balance Sheet (c) Unrealised exchange (gain)/loss on cash and cash equivalents Total cash and cash equivalents as per Cash Flow Statement 231 Notes forming part of the Accounts NOTE [A] Share capital A(1) Share capital authorised, issued, subscribed and paid up: Authorised: Equity shares of 2 each Particulars As at 31-3-2016 Number of As at 31-3-2015 crore shares Number of shares crore 1,62,50,00,000 325.00 1,62,50,00,000 325.00 Issued, subscribed and fully paid up: Equity shares of 2 each 93,14,78,845 186.30 92,95,62,061 185.91 A(II) Reconciliation of the number of equity shares and share capital: 2015-16 2014-15 Directors Number of shares SUNITA SHARMA (DIN 02949529) SUSHOBHAN SARKER 5. Previous year's figures have been regrouped/reclassified wherever applicable. 1757.91 In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm's Registration No. 117366W/W-100018 by the hand of P. R. RAMESH Partner Membership No. 70928 For SHARP & TANNAN Chartered Accountants Firm's Registration No. 109982W by the hand of FIRDOSH D. BUCHIA Partner Membership No. 038332 Mumbai, May 25, 2016 N. HARIHARAN Company Secretary M. No. A3471 R. SHANKAR RAMAN A. M. NAIK Group Executive Chairman (DIN 00001514) M. M. CHITALE Chief Financial Officer & Whole-time Director (DIN 00101004) (DIN 00019798) VIKRAM SINGH MEHTA (DIN 00041197) (DIN 00088276) 366.60 Useful life as per Schedule II (in years) year* Deductions * Includes *6.14 crore transferred to Retained Earnings pursuant to Schedule II of Companies Act, 2013 1. 2. 242 Cost/valuation of freehold land includes ₹ 0.27 crore for which conveyance is yet to be completed. Cost/valuation of buildings includes ownership accommodation: (i) (a) in various co-operative societies, shop-owners' associations and non-trading corporations 99.84 crore, including 2,570 shares of 50 each, 232 shares of 100 each and 1 share of * 250 each. (b) in various apartments 11.20 crore. (c) in various co-operative societies 12.88 crore for which share certificates are yet to be issued. (d) in proposed co-operative societies 0.53 crore. LARSEN & TOUBRO Notes forming part of the Accounts (contd.) NOTE [E(I)] (contd.) 3. (ii) of 3.94 crore in respect of which the deed of conveyance is yet to be executed. (iii) of 8.45 crore representing undivided share in properties at various locations. Additions during the year and capital work-in-progress include 5.91 crore (previous year: 18.50 crore) being borrowing cost capitalised in accordance with Accounting Standard (AS) 16 on "Borrowing Costs". Asset wise break-up of borrowing costs capitalised is as follows: Class of assets #Impairment up to 31-3-2016 6.93 crore. During the year * Nil Building (owned) 7706.74 304.54 38.02 33.10 38.02 (3.07) (3.07) Total 12062.07 807.81 Previous year 11403.58 1010.37 296.12 12573.76 351.88 12062.07 4649.87 960.38 167.08 5443.17 3832.77 1036.54 219.44 4649.87 6.93 7120.59 7402.20 6.93 Add: Capital work-in-progress 250.69 7371.28 33.10 Plant & equipment (owned) Furniture and fixtures (owned) In respect of asset components, whose useful life has expired as on April 1, 2015, the carrying amount of 6.14 crore before tax (4.01 crore net of tax of 2.13 crore) has been adjusted against retained earnings as on April 1, 2015. 9. Details of assets where useful life is different from that specified in Schedule II: Sr. Category of assets Sub-category of assets no. 1. Non-factory buildings (RCC Frame Structure) Useful life as per Schedule II (in years) Useful life adopted (in years) 60 20-60 2. Non-factory buildings (other than RCC Frame Structure) Out of its lease hold land at Hazira, the Company has given certain portion of land for the use of its subsidiary company. The lease deed in respect of leasehold land given to the subsidiary company is under execution. Office equipment (owned) Cost/valuation as at April 1, 2015 of individual assets has been reclassified wherever necessary. 8. 4. |Capital work-in-progress Total 2015-16 3.13 2.78 5.91 Depreciation for the year includes obsolescence amounting to ₹ 10.45 crore (previous year: * 30.68 crore). * crore 2014-15 26.30 0.30 0.02 (8.15) 18.50 5. 6. 7. Own assets given on operating lease have been presented separately in the schedule as per Accounting Standard (AS) 19 on "Leases". 30 103.26 103.26 60.02 64.25 60.02 64.25 equipment Furniture and fixtures Owned 238.23 23.81 8.14 253.90 Sub total - Furniture & 238.23 23.81 8.14 253.90 132.16 22.53 132.16 22.53 7.44 147.57 147.25 156.31 156.31 Office equipment Owned 223.38 27.97 5.78 245.57 Sub total - Office 223.38 27.97 5.78 245.57 159.13 159.13 31.34 31.34 4.92 185.55 4.92 185.55 147.57 113.67 7.44 106.65 | 0.25 Ships 68.41 68.41 30.39 Sub total-Other assets 68.66 68.66 30.64 4.92 4.92 35.31 35.56 Lease Adjustment ☐ ☐ | | | | 113.67 0.25 147.25 0.25 Railway sidings 106.07 106.65 106.07 fixtures Vehicles Owned Sub total-Vehicles 218.36 46.40 218.36 46.40 24.19 24.19 240.57 240.57 115.10 28.71 115.10 28.71 16.91 126.90 16.91 126.90 Other assets Owned 0.25 | | | 10-30 Ownership flats 3. Air conditioning and refrigeration equipment - 4. Photographic equipment Assets used in Power business: Air conditioning and refrigeration equipment deployed at project sites Photographic equipment - deployed at project sites 15 3 15 3 Sr. Category of assets Sub-category of assets no. Useful life adopted (in years) 1. 3 Plant and equipment 5 Office equipment 5 2. Sr. Photographic equipment Assets used in Metallurgical & Material Handling business: Category of assets Sub-category of assets no. Useful life as per Schedule II (in years) Useful life adopted (in years) 1. Plant and equipment used in civil construction Minor plant & equipment of construction activity 12 5 2. Office equipment - deployed at project sites 5 Site facilities 4 116.54 18.85 1.95 133.44 48.23 49.70 Technical knowhow 19.09 3.94 23.03 15.41 1.38 16.79 6.24 3.68 New product design and development 181.67 15 2.08 166.24 NOTE [E(II)] Intangible assets *crore Cost/valuation Amortisation Class of assets As at 1-4-2015 Additions Deductions As at 31-3-2016 Up to 31-3-2015 For the period Deductions Up to 31-3-2016 Book value As at 31-3-2016 As at 31-3-2015 Specialised softwares 17.51 3. 12 15 Plant and equipment used in civil construction 8 8 7 Assets used in Heavy Engineering and Shipbuilding business: Sr. Category of assets no. 1. Factory buildings 2. Plant & equipment general Sub-category of assets Boring/Rolling/Drilling/Milling machines Modular Furnace Other Furnaces Horizontal Autoclaves Load bearing structures 15 3. 8 12 4. Office equipment Building portion - RCC Frame Structure Multifunctional devices 60 50 5 4 5. Air conditioning and refrigeration equipment 6. Laboratory equipment 7. Canteen equipment 8 Motor vehicles 15 10 Minor plant & equipment of construction activity Roads Useful life adopted 1. Plant & equipment general Assets used in Construction business: Category of assets Sub-category of assets Specialised machine tools, dies, jigs, fixtures, gauges for electrical business DG sets above 30 kva Useful life as per Schedule II (in years) 15 15 Useful life adopted (in years) 5 12 Sr. Sub-category of assets no. Useful life as per Schedule II (in years) Useful life adopted (in years) 1. Category of assets Useful life as per Schedule II (in years) no. Assets used in Electrical & Automation business: (in years) 30 15-50 15 10-30 5-15 5-30 10-30 50 10-30 Cranes Carpeted Roads-other than RCC 5 5-15 243 Notes forming part of the Accounts (contd.) NOTE [E(I)] (contd.) Sr. 398.88 398.88 22.11 0.08 22.19 3527.04 3791.08 * Loans guaranteed by directors or others Nil (previous year: Nil) D(I)(a) Loans repayable on demand from banks include fund based working capital facilities viz. cash credits and demand loans. The secured portion of loans repayable on demand from banks of ₹120.54 crore (previous year: 57.79 crore), short term loans and advances from the banks of Nil (previous year: 206.25 crore), working capital facilities and other non-fund based facilities viz. bank guarantees and letters of credit, are secured by hypothecation of inventories, book debts and receivables. NOTE [D(II)] Current maturities of long term borrowings Particulars Unsecured: Redeemable non-convertible fixed rate debentures [Note C(I)(a)(ii)] Term loan from banks [Note C(I)(c)] Sales tax deferment loan [Note C(I)(d)] * Loans guaranteed by directors or others Nil (previous year: Nil) NOTE [D(III)] Trade payables Particulars Due to micro enterprises and small enterprises [Note Q(22)] Due to others Acceptances 240 264.04 Due to related parties: 3881.87 120.54 120.54 120.54 Short term loans and advances from banks [Note D(I)(a)] Commercial Paper Loans from related parties (subsidiary companies) 3252.54 3252.54 499.54 499.54 9.25 crore 57.79 206.25 crore crore 57.79 2484.04 2690.29 985.75 985.75 9.25 57.25 57.25 3761.33 Loans repayable on demand from banks [Note D(I)(a)] Subsidiary companies Joint venture companies Due to others 22.81 81.37 15918.73 21984.48 18733.55 22118.80 18850.60 Notes forming part of the Accounts (contd.) NOTE [D(IV)] Other current liabilities LARSEN & TOUBRO Particulars Interest accrued but not due on borrowings As at 31-3-2016 crore 196.73 As at 31-3-2015 5.35 36.81 19024.92 Associate companies 1782.16 crore 117.05 As at 31-3-2016 *crore* As at 31-3-2015 *crore* 550.00 836.81 0.34 1387.15 600.00 36.46 0.45 636.91 As at 31-3-2016 crore crore 134.32 660.83 As at 31-3-2015 crore 928.48 2256.57 crore 158.08 crore crore 0.62 1.07 Less: 0.34 0.45 0.28 0.62 NOTE [C(II)] Other long term liabilities Particulars Forward contract payable Others NOTE [C(III)] Long term provisions Particulars LARSEN & TOUBRO Terms of repayment as on March 31, 2016 Total Repayable in 3 annual installments of 0.08 crore ending April 26, 2018 0.10 0.28 Notes forming part of the Accounts (contd.) C(I)(d) Sales tax deferment loan (unsecured): 1 Sr. As at 31-3-2016 no. crore As at 31-3-2015 *crore Rate of interest 0.24 0.33 2 0.24 0.36 Interest Free 3 0.14 4 crore Repayable in 2 annual installments of 0.12 crore ending April 26, 2017 Current portion of long term borrowings [Note D(II)] Long term borrowings as disclosed in [Note C(I)] Interest rate guarantee-provident fund [Note Q(8)(ii)(a)] 4.86 370.23 344.83 239 Notes forming part of the Accounts (contd.) NOTE [D(I)] Short term borrowings As at 31-3-2016 Particulars Secured Unsecured Total* Secured As at 31-3-2015 Unsecured Total* 137.89 Repayable in 1 annual installment of 0.14 crore on April 26, 2016 143.45 202.08 As at 31-3-2016 As at 31-3-2015 crore crore 125.15 86.07 27.39 33.55 152.54 119.62 As at 31-3-2016 As at 31-3-2015 crore crore Provision for employee benefits: Employee pension scheme [Note Q(8)(ii)(a)] 226.78 Post-retirement medical benefits plan [Note Q(8)(ii)(a)] Unclaimed dividend 39.33 33.59 Leased out Sub total -Buildings 124.31 2963.98 70.57 68.29 2.28 49.96 49.96 2858.00 126.59 2984.59 505.74 103.25 13.39 4.15 519.13 107.40 11.63 597.36 2260.64 2333.93 17.54 109.05 110.92 11.63 614.90 2839.67 2369.69 2444.85 Owned 488.52 Sub total -Land 495.66 1.38 4.10 91.40 492.94 7.14 1.49 8.63 7.14 1.49 8.63 | | | 401.54 404.99 82.77 83.53 484.31 Buildings 0.73 Plant and equipment 7337.57 equipment Computers Owned 493.22 87.05 25.08 555.19 Taken on lease 0.08 0.08 Sub total- Computers 493.30 87.05 25.16 555.19 345.65 0.08 345.73 75.34 75.34 4006.40 6.33 4012.73 Owned 3799.91 5.17 550.63 178.79 Leased out 22.93 Sub total- Plant & 7360.50 550.63 178.79 7709.41 22.93 7732.34 3331.17 9.67 3340.84 687.49 1.16 688.65 103.99 103.99 3914.67 10.83 3925.50 3794.74 6.93 # 6.93 90.67 Leasehold 401.54 As at 31-3-2016 As at 31-3-2015 crore crore crore crore Gratuity [Note Q(8)(ii)(a)] 44.27 Compensated absences 502.10 34.01 486.02 Employee pension scheme [Note Q(8)(ii)(a)] 16.82 13.26 Post-retirement medical benefits plan [Note Q(8)(ii)(a)] 11.30 10.04 Particulars 574.49 Provision for employee benefits: D(IV)(a) Other payables include due to directors 47.83 crore (previous year: 50.61 crore). NOTE [D(V)] Due to customers (construction related activity) 4795.33 4008.46 Due to customers (property development projects) 222.18 365.27 Advances from customers 10712.22 9054.19 Forward contract payable 369.37 347.75 Other payables (including sales tax, service tax, excise duty and others) [Note D(IV)(a)] 869.38 714.21 17204.54 14681.55 Short term provisions 543.33 Others: Current tax [Net of payment made 1529.13 crore] Impairment Book value Class of assets As at Up to 1-4-2015 Additions Deductions 31-3-2016 31-3-2015 As at For the Up to 31-3-2016 31-3-2016 As at As at As at 31-3-2016 31-3-2015 Land Freehold 404.99 0.65 4.10 Depreciation Cost/valuation crore Tangible assets 2.07 75.69 Proposed equity dividend 1699.95 1510.54 Additional tax on dividend 140.88 134.33 42.96 Other provisions (AS 29 related) [Note Q(15)] 259.11 2119.13 1979.67 2693.62 2523.00 241 Notes forming part of the Accounts (contd.) NOTE [E(I)] 276.23 66.11 0.03 11.18 10 2.12 10 4.50 100 9,000 0.56 4.42 10 2.70 10 16.33 4.98 30.63 4.42 0.56 7,35,000 10 Utmal Multi purpose Service Co-operative Society Limited (B Class) (non-trade investments) [30,000 (previous year: 30,000)] Less: Provision for diminution in value Total (A)(a)+(b)+(c) (B) Investments in preference shares of subsidiary companies L&T Shipbuilding Limited -12% Cumulative redeemable preference shares, October 22, 2028 LARSEN & TOUBRO Number of units Face value per unit ₹ As at 31-3-2016 As at 31-3-2016 As at 31-3-2015 crore crore 0.56 R 0.56 30.07 20.00 43.00 15.90 15.90 4.10 27.10 0.00 13676.43 10 9,00,00,000 90.00 90.00 L&T Shipbuilding Limited -12% Non-convertible cumulative redeemable preference shares, June 24, 2029 10 14826.86 0.00 300 100 10000 15,899 15.90 15.90 10 40,00,000 4.00 4.00 2 23.00 10 1,00,000 0.10 0.10 100 4.42 5,00,00,000 BBT Elevated Road Private Limited International Seaport Dredging Limited 43.97 Raykal Aluminum Company Private Limited 10 37,750 0.04 0.04 22.42 Spectrum Infotech Private Limited 4,40,000 6.80 6.80 L&T Infrastructure Engineering Limited 10 36,00,000 10 2,24,22,660 10 PNG Tollway Limited 11.08 Larsen & Toubro Hydrocarbon International Limited LLC SAR 1000 450 0.68 0.68 Larsen & Toubro LLC USD 1 50,000 0.23 0.23 Larsen & Toubro (Saudi Arabia) LLC SAR 1000 625 1.06 21.85 Astra Microwave Products Limited (quoted) 21.85 1000 Notes forming part of the Accounts (contd.) NOTE [F] Non-current investments (at cost unless otherwise specified) (contd.) Particulars (b) Associate companies: Gujarat Leather Industries Limited 14769.69 JSK Electricals Private Limited Magtorq Private Limited Rishi Consfab Private Limited Salzer Electronics Limited (quoted) Less: Provision for diminution in value (c) Other investments: Tidel Park Limited L&T-Chiyoda Limited 14769.69 13802.91 135.00 13667.91 Less: Provision for diminution in value 68,000 0.30 0.30 L&T Global Holdings Limited USD 100 1,000 0.67 Marine Infrastructure Developer Private Limited 10 9,900 0.01 LTH Milcom Private Limited 10 1,13,340 0.11 L&T Cutting Tools Limited 50.00 50.00 L&T Shipbuilding Limited -12% Non-convertible cumulative redeemable at par preference shares, April 16, 2030 L&T Uttaranchal Hydropower Limited - 10% Non-cumulative optionally convertible redeemable at par preference shares, October 16, 2030 2 3,20,00,000 32.00 ☐ L&T Uttaranchal Hydropower Limited - 10% Non-cumulative optionally convertible redeemable at par preference shares, January 10, 2031 7.00 2 7.00 L&T Uttaranchal Hydropower Limited - 10% Non-cumulative optionally convertible redeemable at par preference shares, March 17, 2031 2 1,92,50,000 19.25 L&T Realty Limited - 12% Non-convertible non-cumulative redeemable at par preference shares, May 26, 2025 70,00,000 70,00,000 2 L&T Uttaranchal Hydropower Limited - 10% Non-cumulative optionally convertible redeemable at par preference shares, July 21, 2030 10 13,00,00,000 130.00 L&T Hydrocarbon Engineering Limited -12% Non-cumulative optionally convertible redeemable preference shares, March 30, 2031 10 13,00,00,000 130.00 L&T Uttaranchal Hydropower Limited - 10% Non-cumulative optionally convertible redeemable at par preference shares, May 10, 2030 2 109.07 523.00 L&T Uttaranchal Hydropower Limited - 10% Non-cumulative optionally convertible redeemable at par preference shares, June 8, 2030 2 1,65,00,000 16.50 10 L&T Hydrocarbon Engineering Limited -12% Non-cumulative optionally convertible redeemable preference shares, October 19, 2030 64,83,00,000 2426.00 107.72 L&T-Hochtief Seabird Joint Venture 23.72 23.72 L&T Shanghai Urban Construction (Group) Corporation Joint Venture 13.46 106.74 13.27 15.49 14.90 Carried forward 172.43 174.41 248 Metro Tunneling Group L&T-AM Tapovan Joint Venture 5.21 5.51 Less: Provision for diminution in value Total (B) 5403.16 2426.00 (C) Investments in integrated joint ventures Desbuild-L&T Joint Venture 0.05 0.07 HCC-L&T Purulia Joint Venture 0.28 0.28 International Metro Civil Contractors Joint Venture 7.18 9.24 L&T-Eastern Joint Venture 648.30 5403.16 500.00 500.00 50,00,00,000 L&T Shipbuilding Limited -9% Non-convertible non-cumulative redeemable at par preference shares, February 4, 2031 10 21,60,00,000 216.00 L&T Technology Services Limited -10% Non-convertible non-cumulative redeemable preference shares, February 14, 2024 10 259.00 40,00,00,000 400.00 L&T Technology Services Limited -10% Non-convertible non-cumulative redeemable preference shares, September 21, 2024 10 35,00,00,000 350.00 350.00 400.00 25,90,00,000 10 L&T Shipbuilding Limited -9% Non-convertible non-cumulative redeemable at par preference shares, December 8, 2030 10 11,00,00,000 110.00 L&T Shipbuilding Limited -9% Non-convertible non-cumulative redeemable at par preference shares, May 28, 2030 10 42,18,60,000 421.86 L&T Shipbuilding Limited -9% Non-convertible non-cumulative redeemable at par preference shares, August 10, 2030 10 25,00,00,000 250.00 L&T Shipbuilding Limited -9% Non-convertible non-cumulative redeemable at par preference shares, September 29, 2030 10 7,50,00,000 75.00 Carried forward 2221.86 890.00 247 1036.00 L&T Seawoods Limited -10% Non-cumulative optionally convertible redeemable at par preference shares, May 12, 2022 2 4,80,00,000 48.00 L&T Seawoods Limited -10% Non-cumulative optionally convertible redeemable at par preference shares, July 14, 2022 2 4,22,50,000 42.25 L&T Seawoods Limited -10% Non-cumulative optionally convertible redeemable at par preference shares, September 3, 2022 2 4,20,00,000 42.00 L&T Hydrocarbon Engineering Limited -10% Non-convertible non-cumulative redeemable preference shares, February 6, 2029 10 1,03,60,00,000 1,036.00 11.08 2 2221.86 Notes forming part of the Accounts (contd.) NOTE [F] Non-current investments (at cost unless otherwise specified) (contd.) Particulars (B) Investments in preference shares of subsidiary companies (contd.) Brought forward L&T Seawoods Limited -10% Convertible non-cumulative and redeemable preference shares, March 30, 2022 Number of units Face value per unit As at 31-3-2016 V As at 31-3-2016 As at 31-3-2015 v crore v crore 890.00 7,500 52,30,00,000 Larsen & Toubro Arabia LLC 50,000 0.05 0.05 Kesun Iron & Steel Company Private Limited 10 9,500 10 0.01 Larsen & Toubro Consultoria E Projeto Ltda R$ 1 0.27 L&T-Gulf Private Limited 10 4.00 0.01 Hi-Tech Rock Products & Aggregates Limited 150.24 150.24 crore Trade investments (unless otherwise specified) (A) Investments in fully paid equity instruments (a) Subsidiary companies: L&T Valves Limited Bhilai Power Supply Company Limited EWAC Alloys Limited 100 18,00,000 201.54 10 49,950 0.05 201.54 0.05 100 8,29,440 L&T Ahmedabad-Maliya Tollway Limited [1000 (previous year: * 1000)] crore 10 L&T Aviation Services Private Limited 10 100 L&T Construction Equipment Limited 10 12,00,00,000 84.32 L&T Chennai-TADA Tollway Limited [1000 (previous year: * 1000)] 84.32 ₹ 10 100 10 70,50,00,000 705.00 L&T Devihalli Hassan Tollway Limited [1000 (previous year: * 1000)] L&T General Insurance Company Limited 1575.15 1468.18 1,16,97,09,304 10 4,56,00,000 45.60 45.60 L&T Capital Company Limited (Capital reduction and face value reduced from 4,400 to 10 per share) 10 L&T Cassidian Limited 10 50,000 37,000 0.05 22.00 0.04 0.04 L&T Finance Holdings Limited (quoted) 10 100 As at 31-3-2015 As at 31-3-2016 As at 31-3-2016 68.67 228.29 145.64 27.64 30.15 143.13 37.33 ₹ # Impairment during the year Nil (previous year: 1.16 crore) 158.91 # 189.50 297.31 ₹ 244 Add: Intangible assets under development 259.63 Previous year 85.16 SAR 1000 13.96 25.14 83.93 31.78 Total 228.29 87.56 2.08 313.77 143.13 34.19 1.95 175.37 138.40 Notes forming part of the Accounts (contd.) NOTE [F] Non-current investments (at cost unless otherwise specified) Particulars 151.46 16.46 13676.43 14826.86 (B) Investment in preference shares of subsidiary companies 5403.16 2426.00 (C) Investment in integrated joint ventures 5403.16 818.35 19897.94 2426.00 419.96 17672.82 Non-current investments (at cost unless otherwise specified) Particulars Number of units Face value per unit Less: Provision for diminution in value 620.00 43.00 30.63 Long term investments (Trade Investments unless otherwise specified) As at 31-3-2016 crore crore LARSEN & TOUBRO As at 31-3-2015 crore crore (A) Investment in equity instruments (a) Subsidiary companies 13802.91 14769.69 (b) Associate companies (c) Other investments 4.98 20.00 L&T Halol-Shamlaji Tollway Limited [1000 (previous year: 1000)] L&T Howden Private Limited 274.66 10 1999.55 1999.55 L&T Shipbuilding Limited 10 81,86,80,000 818.68 1,99,95,50,000 818.68 10 0.05 L&T Special Steels and Heavy Forgings Private Limited 10 41,92,84,000 419.28 L&T Solar Limited 10 L&T Seawoods Limited 95.31 L&T Realty Limited 10 4,71,60,700 47.16 47.16 L&T Samakhiali Gandhidham Tollway Limited 10 13,000 0.01 0.01 L&T Sapura Offshore Private Limited 10 0.01 L&T Sapura Shipping Private Limited 10 419.28 L&T Electricals and Automation Limited 10 50,000 300.00 300.00 L&T-Valdel Engineering Limited 10 23.89 Larsen & Toubro Infotech Limited 1 16,12,50,000 134.25 134.25 Larsen & Toubro International FZE AED 1147.40 ₹ 550500 7,50,00,000 100 40 1000.05 0.05 0.05 L&T Transportation Infrastructure Limited 10 1,08,64,000 10.86 10.86 L&T-Sargent & Lundy Limited 10 27,82,736 0.82 0.82 L&T Hydrocarbon Engineering Limited 10 1,00,00,50,000 1000.05 10 L&T Technology Services Limited* (see page 249) 0.05 Notes forming part of the Accounts (contd.) NOTE [F] Non-current investments (at cost unless otherwise specified) (contd.) 246 Number of units Particulars 245 Face value per unit As at As at 31-3-2016 31-3-2015 crore crore As at 31-3-2016 5450.62 2696.48 2696.48 5386.90 10 100 L&T Rajkot-Vadinar Tollway Limited [1000 (previous year: * 1000)] 1,50,30,000 15.03 15.03 L&T Infocity Limited 10 16.02 L&T Metro Rail (Hyderabad) Limited L&T Infrastructure Development Projects Limited 2,03,06,623 10 31,28,69,096 20.31 19.82 Carried forward (a) Subsidiary companies (contd.) Brought forward 10 5450.62 L&T Natural Resources Limited 10 0.05 L&T Power Development Limited 10 3,11,27,00,000 3112.70 L&T Power Limited 10 51,157 0.05 10 5386.90 0.05 L&T Powergen Limited 362.41 362.41 2729.30 L&T Krishnagiri Walajahpet Tollway Limited [26000 (previous year: *26000)] L&T-MHPS Boilers Private Limited 36,24,06,000 25.50 25.50 10 2,600 10 10 2,55,00,000 11,93,91,000 119.39 119.39 L&T-MHPS Turbine Generators Private Limited L&T Kobelco Machinery Private Limited 10 Raw materials [Includes goods-in-transit ₹ 111.96 crore (previous year: * 72.87 crore)] 74.80 116.39 Construction material 304.27 394.34 Components Manufacturing work-in-progress [Note Q(24)(e)] [Includes goods-in-transit 7.10 crore (previous year: 21.59 crore)] [Includes goods-in-transit 7.98 crore (previous year: 17.73 crore)] 140.07 261.20 582.78 Finished goods 161.68 Property development related work-in-progress [Note Q(6)(b)] Stock-in-trade (in respect of goods acquired for trading) 159.77 161.13 [Includes goods-in-transit 34.80 crore (previous year: 35.95 crore)] 448.71 Stores and spares 104.41 [Includes goods-in-transit 2.69 crore (previous year: 6.34 crore)] Loose tools 372.18 356.63 2342.93 crore 4670.98 2661.87 0.20 3037.42 5380.08 7.84 Particulars As at 31-3-2016 As at 31-3-2015 crore crore (a) Aggregate amount of quoted current investments and market value thereof; Book Value crore Market Value 2255.94 (b) Aggregate amount of unquoted current investments; Book Value 2661.88 3124.14 (c) Aggregate provision for diminution in value of current investments is 13.72 crore (previous year: 3.57 crore) 254 Notes forming part of the Accounts (contd.) NOTE [H(II)] Inventories (at cost or net realisable value whichever is lower) As at 31-3-2016 As at 31-3-2015 2009.10 2092.35 304.83 0.46 6.66 201.03 3.85 27157.42 23612.79 848.74 566.39 26308.68 26309.19 23046.40 23051.11 H(III)(a) Other debts includes 17698.43 crore (previous year: 15105.86 crore) contractually not due. 255 Notes forming part of the Accounts (contd.) NOTE [H(IV)] 20811.33 Cash and bank balances Balance with banks Particulars Cheques and drafts on hand Cash on hand As at 31-3-2016 crore crore 1029.18 26.90 3037.62 446.82 2.28 Cash and cash equivalents: 1888.00 23024.69 2801.00 2270.72 NOTE [H(III)] Trade receivables Particulars Secured: Debts outstanding for more than 6 months: Considered good Unsecured: Debts outstanding for more than 6 months: Considered good Considered doubtful Other debts [Note H(III)(a)]: Considered good 4.71 Considered doubtful As at 31-3-2016 As at 31-3-2015 crore crore crore crore 3283.99 844.89 4128.88 0.51 2235.07 565.93 Less: Allowance for doubtful debts 12.00 2662.67 0.80 Notes forming part of the Accounts (contd.) Total current investments 10 50.00 1,000 10,86,336 400.00 100.00 1,000 1,000 1,000 | | | 100.00 100.00 50.00 1013.71 2713.03 253 NOTE [H(I)] Current investments (contd.) Particulars Face value per unit ₹ Number of units As at 31-3-2016 As at 31-3-2016 As at 31-3-2015 100.00 1,000 50.00 10 JM Arbitrage Advantage Fund - Direct Plan - Bonus L&T Business Cycles Fund - Direct Plan - Growth DSP BlackRock India Tiger Fund - Reg - Growth IDFC Sterling Equity Fund - Regular Plan - Growth JPMorgan India Liquid Fund - Super IP - Growth L&T Emerging Businesses Fund - Direct Plan - Growth As at 31-3-2015 BNP Paribas Overnight Fund - Growth DWS Treasury Fund - Cash - Reg - Growth Reliance Liquid Fund - TP - Growth Taurus Liquid Fund - Super IP - Growth UTI Liquid Fund - Cash Plan - IP - Growth LIC Nomura MF Liquid Fund - Growth Carried forward 100 82,46,063 200.00 100.00 * crore 1,000 10 1,00,00,000 13.71 13.71 10 487.31 10 12.44 10 5.23 10 10.41 20.00 crore (3) Mutual funds: (contd.) Brought forward 300.00 1,000 7,68,317 130.00 10 1,03,83,438 10.76 JM Arbitrage Adv Fund - Ann Bonus - Principal - Direct 10 47,90,04,370 499.29 JM Balanced Fund - Quarterly Dividend Payout 12,09,623 10 453.68 JM Equity Fund Half Yearly Dividend Payout 10 14,38,03,762 211.50 | | | | L&T Business Cycles Fund - Direct Plan - Dividend Payout 10 10 99,99,700 Less: Provision for diminution in value Mutual funds-Total 40,95,42,385 Details of quoted/unquoted investments: 1,000 UTI Money Market - IP - Growth DWS Ultra Short Term Fund - Direct Plan - Growth ICICI Prudential Money Market Fund - Regular Plan - Growth HSBC Cash Fund - Growth 1013.71 2713.03 10 50.00 10 100.00 1,000 100.00 L&T Resurgent India Corporate Bond Fund - Direct Plan-Growth L&T Resurgent India Corporate Bond Fund - Dividend 10 HDFC Small & Midcap Fund - Growth 10 1,22,80,335 31.73 33.00 L&T Arbitrage Opportunities Fund - Growth 10 21.26 Birla Sun Life Manufacturing Equity Fund - Direct - Dividend 10 10.14 Kotak Floater ST - Growth 10.19 crore 8723.55 921.66 NOTE [1] Contingent liabilities (contd.) Notes: 766.94 897.87 200.87 144.33 103.24 145.35 292.75 205.77 76.91 71.85 59.78 252.64 Q(14)(b) 33.39 77.57 0.36 Miscellaneous income exchange contract Premium earned (net) on related forward Income from services to the Group companies Lease rentals ventures Company's share in profit of integrated joint Notes forming part of the Accounts (contd.) 257 9201.96 8847.53 10.21 48.68 30.57 46.83 230.48 203.37 24.33 24.63 21529.33 18574.16 As at 31-3-2016 As at 31-3-2015 Technical fees crore 1025.52 883.06 156.72 132.13 60.73 55.41 (d) Income tax liability (including penalty) that may arise in respect of which the Company is in appeal 531.84 826.44 (e) Corporate guarantees for debt given on behalf of subsidiary companies 7327.31 (f) Corporate and bank guarantees for performance given on behalf of subsidiary companies crore Income from hire of plant and equipment 258 Other operational revenue: 2014-15 2015-16 2738.00 1281.00 crore 294.40 crore 196.60 As at 31-3-2015 As at 31-3-2016 Note Particulars Revenue from operations (a) Estimated amount of contracts remaining to be executed on capital account (net of advances) (b) Estimated amount of committed funding by way of equity/loans to subsidiary companies NOTE [K] crore Particulars NOTE [J] 5. Contingent liability with respect to interest in joint ventures [Note Q(14)] In respect of matters at (f), the cash outflows, if any, could generally occur up to four years, being the period over which the validity of the guarantees extends. In respect of matters at (e), the cash outflows, if any, could generally occur up to eleven years, being the period over which the validity of the guarantees extends, except in a few cases where the cash outflows, if any, could occur at any time during the subsistence of the borrowing to which the guarantees relate. of the arbitration/appellate proceedings. Further, the liability mentioned in (a) to (d) above excludes interest and penalty in cases where the Company has determined that the possibility of such levy is remote. It is not practicable to estimate the timing of cash outflows, if any, in respect of matters at (a) to (d) above pending resolution 4. 3. 2. 1. The Company does not expect any reimbursements in respect of the above contingent liabilities. Birla Sun Life Cash Plus - Regular Plan - Growth Pramerica Liquid Fund - Growth Commitments 18250.65 crore Sales & service: 56791.13 59517.13 108.78 137.30 Q(24)(a)(v) Commission 507.93 473.64 Q(24)(a)(iv) Servicing 3.59 44.74 crore Q(24)(a)(vi) 946.94 5743.51 49480.38 843.64 Q(6)(b), Q(24)(a)(ii) Property development activity 5995.07 Q24(a)(i) Manufacturing and trading activity 52022.74 Q(6)(a), Q(24)(a)(iii) Construction and project related activity Engineering and service fees crore crore 21233.74 Advances recoverable Joint Ventures: Others Others considered good: As at 31-3-2016 As at 31-3-2015 crore crore crore crore 0.79 73.00 0.89 70.00 3696.03 1723.21 1544.22 1036.06 5.82 3.65 45.11 69.33 Security deposits 286.89 259.85 Associate companies: Others Inter-corporate deposits [Note Q(1)(a)] Subsidiary companies: 159.74 90.52 175.04 Fixed deposits with banks (maturity less than 3 months) Other bank balances: Fixed deposits with banks (including interest accrued thereon) [including Nil of bank deposits with more than 12 months maturity (previous year: * Nil)] 4.64 3.00 Earmarked balances with banks-unclaimed dividend 39.33 Margin money deposits 4.66 Earnest money deposits 33.59 Cash and bank balances not available for immediate use [Note G(II)(a)] 127.10 122.56 175.73 1680.91 168.84 1515.80 NOTE [H(V)] Short term loans and advances Particulars Secured considered good: Loans against mortgage of house property Inter-corporate deposits-others Loans and advances to related parties: 9.69 50.79 63.12 Advances recoverable in cash or in kind 104.45 140.26 168.09 170.80 10373.24 6661.77 Less: Allowance for doubtful loan and advances 168.09 10205.15 170.80 6490.97 NOTE [H(VI)] 4.55 Other current assets Particulars Due from customers (construction and project related activity) Due from customers (property development activity) [Note Q(6)(b)] Interest accrued on investments Interest accrued on inter-corporate deposits Unamortised expenses NOTE [I] Contingent liabilities Particulars (a) Claims against the Company not acknowledged as debts (b) Sales tax liability that may arise in respect of matters in appeal (c) Excise duty/service tax/customs duty liability that may arise including those in respect of matters in appeal/challenged by the Company in Writ As at 31-3-2016 crore Other current assets: As at 31-3-2015 36.09 Security deposits 4411.30 3178.11 Balances with customs, port trust etc. 91.20 86.75 Carried forward 10205.15 6490.97 256 Notes forming part of the Accounts (contd.) NOTE [H(V)] Short term loans and advances (contd.) Other loan and advances LARSEN & TOUBRO Brought forward As at 31-3-2016 crore crore 10205.15 As at 31-3-2015 crore crore 6490.97 Considered doubtful: Deferred credit against sale of ships 27.55 25.99 Particulars 20.00 1.63 Principal Cash Mgmt Fund - Regular Plan - Growth Other non-current assets Particulars Unamortised expenses Interest accrued on inter-corporate deposits NOTE [H(I)] Current investments LARSEN & TOUBRO As at 31-3-2016 As at 31-3-2015 crore crore 26.28 52.43 86.84 13.54 113.12 65.97 As at 31-3-2016 As at 31-3-2015 Particulars crore crore crore crore Current investments NOTE [G(III)] Notes forming part of the Accounts (contd.) 75.43 74.77 250 74.77 74.77 75.43 75.43 crore Particulars As at 31-3-2016 As at 31-3-2015 1 2 (1) Government and trust securities Amount received (including interest accrued thereon) from customers of Property Development business - to be handed over to housing society on its formation. Contingency deposit (including interest accrued thereon) received from customers of Property Development business towards their sales tax liability - to be refunded/ adjusted depending on the outcome of the legal case. 20.72 20.79 16.73 3 Other bank balances (including interest accrued thereon) not available for immediate use being in the nature of security offered for bids submitted, loans availed etc. Total 159.58 160.54 201.87 197.99 Less: Amount reflected under current assets [Note H(IV)] Amount reflected under non-current assets [Note G(II)] 127.10 122.56 21.50 1068.61 Less: Provision for diminution in value 2.58 Current investments: (1) Government and trust securities: 8.28% Government of India Bonds 2032 (quoted) 7.16% Government of India Bond 2023 (quoted) 100 5,00,000 5.14 4.91 100 81.56 8.15% Government of India Bonds 2022 (quoted) 100 20.29 crore 8.15% Government of India Bond 2022 (quoted) 20,00,000 20.36 8.33% Government of India Bonds 2026 (quoted) 8.28% Government of India Bond 2027 (quoted) 8.28% Government of India Bond 2027 (quoted) 9.20% Government of India Bond 2030 (quoted) 100 75,00,000 79.77 79.77 100 103.75 100 1,24,00,000 128.03 100 G(II)(a) Particulars of cash and bank balances not available for immediate use crore As at 31-3-2016 1066.03 1484.77 2.53 1482.24 (2) Debentures and bonds (a) Subsidiary companies 22.75 (b) Others 930.67 Less: Provision for diminution in value 10.34 943.08 As at 31-3-2015 22.95 838.31 0.84 (3) Mutual funds Less: Provision for diminution in value 2662.67 0.80 2661.87 4670.98 3037.62 0.20 3037.42 5380.08 Other particulars in respect of current investment mentioned in H(I) are as follows: Particulars Number of units Face value per unit ₹ As at 31-3-2016 860.42 100 crore As at 31-3-2015 Market Value Book Value (a) Aggregate amount of quoted investments and market value thereof; Particulars Details of quoted/unquoted investments: Pursuant to the Scheme of Arrangement approved by the Hon'ble High Court of Bombay vide order dated April 1, 2016, the face value per equity share has been reduced to 2 each from 40 each. 17672.82 19897.94 419.96 818.35 11.29 Total Non-current Investments (A+B+C) L&T-AL-Sraiya LRDP 6 Joint Venture 14.28 144.76 Total (C) Larsen & Toubro & NCC Limited L&T Delma Mafraq Joint Venture 57.12 267.79 Civil Works Joint Venture 21.64 28.32 Larsen & Toubro Limited - Shapoorji Pallonji & Co. Limited Joint Venture 44.95 (b) Aggregate amount of unquoted investments; As at 31-3-2016 crore As at 31-3-2015 crore 2.36 1.15 1.24 crore crore As at 31-3-2015 As at 31-3-2016 Capital advances Unsecured considered good: Other loans and advances (KMPs) Inter-corporate deposits-others Capital advances 23.23 Loans against mortgage of house property Particulars Long term loans and advances NOTE [G(I)] Notes forming part of the Accounts (contd.) 249 (c) Aggregate provision for diminution in value of investments is ₹ 151.46 crore (previous year: 16.46 crore) 16058.34 18429.76 Book Value 1614.48 8060.92 7468.59 1468.18 Secured considered good: 65.26 119.10 L&T-Shanghai Urban Construction (Group) Corporation Joint Venture CC 27 Delhi Metro Tunneling Chennai - L&T Shanghai Urban Construction (Group) Corporation Joint Venture 1986.84 Inter-corporate deposits [Note Q(1)(a)] 779.72 43.97 Joint venture companies: Others Other loans and advances: Security deposits Earnest money deposits Advances recoverable in cash or in kind NOTE [G(II)] Cash and bank balances 5.25 Particulars Cash and bank balances not available for immediate use [Note G(II)(a)] 11.87 12.01 90.02 68.75 0.63 0.46 2105.84 1648.81 3031.73 3825.30 As at 31-3-2016 Cash and cash equivalents: crore Advances towards equity commitment Loans and advances to related parties: 56.58 37.15 174.41 172.43 Metro Tunneling Delhi - L&T Shanghai Urban Construction (Group) Corporation Joint Venture Brought forward (C) Investments in integrated joint ventures (contd.) crore crore 31-3-2015 31-3-2016 As at Subsidiary companies: As at per unit Face value LARSEN & TOUBRO Particulars Non-current investments (at cost unless otherwise specified) (contd.) NOTE [F] Notes forming part of the Accounts (contd.) 3.00 60415.00 0.01 36.01 57.46 Number of units As at 31-3-2016 1,000 4,22,84,000 290.10 Other debentures and bonds-Total Debentures & bonds-Total (3) Mutual funds: DWS Short Maturity Fund - Direct Plan - Annual Bonus JM Money Manager Fund - Super Plus Plan - Bonus -Bonus Units DWS Treasury Fund - Investment Plan - Direct Plan - Bonus HDFC Liquid Fund - Growth LARSEN & TOUBRO Number of units Face value per unit ₹ As at 31-3-2016 As at 31-3-2016 As at 31-3-2015 crore crore 377.64 838.31 10,000,000 25 25.00 10,000,000 25 25.00 10,000,000 25 25.00 Less: Provision for diminution in value 6.86% IIFCL Tax Free Bonds Mar 26, 2023 7.18% IRFC Ltd. Tax Free Bonds Feb 19, 2023 ECL Finance Ltd. NCD SR-C7C601B Mar 22, 2017 ECL Finance Ltd. NCD SR-C7C601C Mar 22, 2017 ECL Finance Ltd. NCD SR-C7C601D Mar 22, 2017 ECL Finance Ltd. NCD SR-C7C601E Mar 22, 2017 ECL Finance Ltd. NCD SR-C7C601F Mar 22, 2017 Edelweiss Finance & Investments Ltd. NCD K6K501A Nov 04, 2016 Edelweiss Finance & Investments Ltd. NCD SR-K6K502A Nov 14 ECL Finance Ltd. NCD SR-B7B601A Feb 15, 2017 ECL Finance Ltd. NCD SR-B7B601B Feb 15, 2017 (b) Other debentures and bonds: (contd.) Brought forward 10,000,000 10,000,000 7.40% Syndicate Bank TI-2 SR-8 NCD Apr 20, 2015 (quoted) ECL Finance Ltd. NCD SR-D6D502A-Apr 26, 2016 ECL Finance Ltd. NCD SR-E6E501A - May 11, 2016 ECL Finance Ltd. NCD SR-C7C601A Mar 22, 2017 Carried forward 1,000,000 1,000,000 10,000,000 10,000,000 10,000,000 25 25 25 │222 25.00 10,000,000 26.28 29.85 27.20 26.86 15.16 2.99 32.56 28.90 25.00 377.64 838.31 Notes forming part of the Accounts (contd.) NOTE [H(I)] Current investments (contd.) Particulars 29.69 25 25.00 10,000,000 10 360.12 10 10 IDFC Cash Fund - Reg - Growth 1,000 | | | 21.43 50.00 200.00 L&T Floating Rate Fund Direct Plan - Growth 10 118.26 25.54 1,000 14,47,599 300.00 581.09 SBI Premier Liquid Fund - Regular Plan - Growth 1,000 4,21,417 100.00 100.00 DWS Ultra Short Term Fund - Direct Plan - Annual Bonus 10 37.49 L&T Liquid Fund Growth 10,000,000 10 943.08 25 25.00 10,000,000 25 25.00 2,500,000 95 23.75 10,000,000 25 25.00 10,000,000 860.42 25 1,000 2,50,000 25.00 1,000 30,00,000 304.28 930.67 838.31 10.07 0.84 920.60 837.47 25.00 466.27 10,000,000 10,000,000 (1) Government and trust securities: (contd.) Brought forward 8.83% Government of India Bond 2023 (quoted) 6.90% Oil Marketing Companies GOI Special Bonds 2026 (quoted) 9.23% Government of India Bond 2043 (quoted) 8.17% Government of India Bond 2044 (quoted) 8.27% Government of India Bond 2020 (quoted) Less: Provision for diminution in value 100 100 88888 1068.61 596.01 238.70 12.04 100 346.02 100 31.26 100 260.74 1068.61 2.58 1484.77 2.53 1066.03 1482.24 Government and trust securities -Total crore crore 31-3-2015 31-3-2016 8.32% Government of India Bond 2032 (quoted) 100 15,00,000 15.48 15.63 6.90% Oil Marketing Companies GOI Special Bonds 2026 100 13,00,000 12.04 9.23% Government of India Bond 2043 (quoted) 100 3,00,00,000 (2) Debentures and bonds: 341.52 1068.61 596.01 251 Notes forming part of the Accounts (contd.) NOTE [H(I)] Current investments (contd.) Particulars Face value per unit Number of units As at 31-3-2016 As at As at Carried forward (a) Subsidiary companies: L&T Finance Limited - 10.24% Secured Redeemable Non Convertible Debenture September 17, 2019 (quoted) 1,000 8.46% PFC Ltd. Tax Free Bonds Aug 30, 2028 8.46% PFC Ltd. Tax Free Bonds Aug 30, 2028 (quoted) 1.44% Inflation Indexed Bonds Jun 05, 2023 (quoted) 1,000,000 227 25.33 1,000,000 25.32 100 50,00,000 41.79 41.79 64.89 10.05% HDB Financial Services Ltd. Bonds SR-I/1/5 Dec 20, 2023 (quoted) 28.04 10.20% HDB Financial Services Ltd. Bonds Aug 09, 2022 (quoted) 8.41% NTPC Ltd. Tax Free Bonds SR-1A Dec 16, 2023 (quoted) 8.46% REC Ltd. Tax Free Bonds SR-3B Aug 29, 2028 (quoted) ECL Finance Ltd. NCD SR-J5K403 Nov 04, 2015 (quoted) ECL Finance Ltd. NCD SR-L5L402 Dec 15, 2015 (quoted) Edelweiss Finance & Investments Ltd. NCD SR-A6A501 Jan 06, 2016 Edelweiss Finance & Investments Ltd. NCD SR-A6A502 Jan 08, 2016 Edelweiss Finance & Investments Ltd. NCD SR-A6A503 Jan 11, 2016 Edelweiss Finance & Investments Ltd. NCD SR-K5L401 Dec 17, 2015 (quoted) 8.70% PNB Housing Finance Ltd. Bonds SR-III Nov 24, 2024 (quoted) 1,000,000 2.27 1,000 79,162 8.54 8.54 1,000,000 370 41.56 41.56 1,000,000 10,000,000 6,04,355 8.20% PFC Ltd. Tax Free Bonds Feb 01, 2022 2,15,770 22.75 22.95 22.75 22.95 Less: Provision for diminution in value Subsidiary companies-Total (b) Other debentures and bonds: 0.27 22.48 22.95 252 1,000 6.86% IIFCL Tax Free Bonds Mar 26, 2023 (quoted) 7.18% IRFC Ltd. Tax Free Bonds Feb 19, 2023 (quoted) 10.75% The Tata Power Co. Ltd. NCD Aug 21, 2072 (quoted) 25.00 1,000 304.28 1,000,000 1,037 109.07 109.08 8.00% Indian Overseas Bank Bonds Mar 13, 2016 (quoted) 8.20% PFC Ltd. Tax Free Bonds Feb 01, 2022 (quoted) 1,000,000 4.51 1,000 64.89 1,000 57558.07 * crore LARSEN & TOUBRO Particulars Nature of the transaction (loans given/investment made/ no. guarantee given/security provided) Larsen & Toubro Infotech Limited L&T Technology Services Limited L&T Electrical & Automation FZE Larsen & Toubro Heavy Engineering LLC Larsen & Toubro (Saudi Arabia) LLC Spectrum Infotech Private Limited L&T Hydrocarbon Engineering Limited L&T-MHPS Boilers Private Limited LARSEN & TOUBRO crore Purpose for which the loan/ guarantee/security is proposed to be utilised by the recipient As at 31-3-2016 As at 31-3-2015 Corporate guarantee for subsidiary's project performance 238.68 231.18 Corporate guarantee for subsidiary's project performance (It includes corporate guarantee given for L&T Technology Services LLC) 589.79 522.09 Corporate guarantee for subsidiary's 19.75 42.06 project performance Corporate guarantee for subsidiary's Sr. NOTE [Q] (contd.) Notes forming part of the Accounts (contd.) 923.31 Corporate guarantee given for 233.97 261.21 subsidiary's debt L&T-MHPS Turbine Generators Private Limited Corporate guarantee given for 548.32 516.80 subsidiary's debt L&T Shipbuilding Limited Corporate guarantee given for 1331.00 2881.00 subsidiary's debt Nabha Power Limited Larsen & Toubro ATCO Saudia LLC Larsen & Toubro Arabia LLC Corporate guarantee given for 5157.00 5000.00 subsidiary's debt Corporate guarantee for subsidiary's 909.51 752.30 project performance Corporate guarantee for subsidiary's project performance 1013.25 1197.86 1004.97 project performance Corporate guarantee for subsidiary's project performance ₹ (i) ₹ (ii) *6.09 crore (previous year: Nil) in respect of income tax payable outside India. 13.77 crore (previous year: Nil) in respect of income tax for earlier years. 265 Notes forming part of the Accounts (contd.) NOTE [Q] (contd.) (b) Tax effect of 0.13 crore (previous year: 9.29 crore) on account of debenture/share/foreign currency convertible bond issue expenses and premium on inflation linked debenture has been credited to securities premium account. Q(6) (a) Disclosures pursuant to Accounting Standard (AS) 7 (Revised) "Construction Contracts": crore Particulars Q(5) (a) Provision for current tax includes ii) Aggregate amount of contract costs incurred and recognised profits (less recognised losses) as at the end of the financial year for all contracts in progress as at that date iii) Amount of customer advances outstanding for contracts in progress as at the end of the financial year 2015-16 52022.74 2014-15 49480.38 202884.53* 180512.61* 9888.46 8338.91 iv) Retention amount by customers for contracts in progress as at the end of the financial year 6459.87 5761.50 * includes provision for foreseeable loss: 108.82 crore (previous year: ₹ 117.64 crore) (b) Disclosures pursuant to Guidance Note on Accounting for Real Estate Transactions (Revised 2012) issued by the Institute of Chartered Accountants of India: crore Particulars Contract revenue recognised for the financial year [Note (K)] (c) on other intangible assets of 0.55 crore (previous year: 0.69 crore). (b) on intangible assets being expenditure on new product development of 48.19 crore (previous year: 56.93 crore) [Note R(5) (b)]; and (a) on tangible assets of 5.19 crore (previous year: 6.50 crore); 2693.04 1339.22 Corporate guarantee for subsidiary's 2.90 2.90 project performance Corporate guarantee for subsidiary's project performance 2173.23 4374.65 Guarantees issued by bank out of the Company's sanctioned limits to customer of subsidiary for project performance 9.52 9.28 16174.84 17925.51 4 Investments in fully paid equity instruments and current investments # the shares since allotted Q(3) Exceptional Items [Note R(4)]: (a) Exceptional items for the year ended March 31, 2016 include the following: (i) [Note F and Note H(I)] Gain of 540.90 crore on sale of the Company's stake in subsidiary companies viz. L&T-Valdel Engineering Limited - * 36.59 crore, L&T-Gulf Private Limited - 6.74 crore, L&T Sapura Shipping Private Limited- 9.18 crore and on sale of the Company's part stake in L&T Finance Holdings Limited - 488.39 crore; (ii) Gain of 105.86 crore on sale of the Company's stake in associate companies viz. Salzer Electronics Limited - 57.46 crore and L&T-Chiyoda Limited - ₹ 48.40 crore; (iii) Gain of 48.52 crore on sale of the Company's Foundry Business unit and (iv) Provision for impairment of investment in L&T General Insurance Company Limited - 135.00 crore. (b) Exceptional items for the year ended March 31, 2015 included gain of 357.16 crore on sale of the Company's part stake in L&T Finance Holdings Limited, a subsidiary company. Q(4) The expenditure on research and development activities recognised as expense in the Statement of Profit and Loss is ₹149.62 crore (previous year: 139.44 crore). Further, the company has incurred capital expenditure on research and development activities as follows: L&T-MHPS Boilers Private Limited subsidiary's debt 64.54 57.01 263 Notes forming part of the Accounts (contd.) NOTE [Q] (contd.) Q(2) Disclosure pursuant to section 186 of the Companies Act, 2013: 264 Sr. no. Nature of the transaction (loans given/investment made/ guarantee given/security provided) Purpose for which the loan/ As at crore As at Note: Loans to employees (including directors) under various schemes of the Company (such as housing loan, furniture loan, education loan, etc.) have been considered to be outside the purview of disclosure requirements. guarantee/security is proposed to be utilised by the recipient 31-3-2015 1 Loan and advances: * (i) Subsidiary companies: L&T Realty Limited L&T Seawoods Limited L&T Shipbuilding Limited L&T Special Steels & Heavy Forgings Private Limited PNG Tollway Limited EWAC Alloys Limited Nabha Power Limited Project funding 31-3-2016 # Previous year figures have been regrouped for interest accrued on inter-corporate deposits and shown under other non-current assets 13.54 crore and other current assets 203.37 crore as separate line items. *Long term loans and advances [Note G(I)] - 779.72 crore (previous year: 43.97 crore) and short term loans and advances [Note H(V)]-3696.03 crore (previous year: 1723.21 crore). 43.97 5.50 9 L&T Hydrocarbon Engineering Limited 506.18 148.60 2158.33 1253.23 10 L&T Technology Services Limited 107.50 11 L&T Valves Limited 12 Nabha Power Limited 878.61 15.00 110.00 15.00 60.00 3225.76 13 L&T Power Development Limited 1549.70 41.50 14 L&T-MHPS Turbine Generator Private Limited 179.00 Total 4475.75 * 1767.18* (b) Loans and advances in the nature of loans where repayment schedule is not specified/is beyond 7 years: PNG Tollway Limited Total 57.51 57.51 185.24 i) Amount of project revenue recognised for the financial year [Note (K)] 563.41 189.00 (principal amount). 2 Other advances: Subsidiary companies: L&T Power Development Limited L&T Realty Limited Towards capital contribution Towards capital contribution 379.40# 648.29# L&T Shipbuilding Limited Towards capital contribution 421.86# 1840.18 L&T Uttaranchal Hydropower Limited 5.25# 523.00# Larsen & Toubro (Saudi Arabia) LLC Towards capital contribution 14.29 5.25 1986.84 3 Guarantees: Subsidiary companies: L&T Aviation Services Private Limited Corporate guarantee given for Towards capital contribution 4548.75 73.00 73.00 Working capital and project funding 1921.00 371.00 Working capital and project funding 779.72 515.20 Project funding 43.97 Short term funding 16.00 Working capital 506.18 148.60 878.61 110.00 15.00 4475.75 1767.18 L&T Hydrocarbon Engineering Limited Project funding Short term funding L&T Valves Limited (ii) Others: Boyance Infrastructure Private Limited Total (i+ii) * Loans & advances represent Inter-corporate deposits General corporate purpose Project funding 2015-16 843.64 2014-15 946.94 234567 Interest cost 32.55 30.52 12.05 9.49 16.44 1.45 16.40 Expected (return) on plan assets (25.15) (21.98) Actuarial losses/(gains) 4.45 (5.15) 39.74 12.46 72.66 154.87 (154.87) 28.67 (28.46) (23.97) 83.66 134.54 (134.54) Past service cost 0.14 0.14 10.23 0.11 Amount not recognised as an asset 2.08 25.26 (7.88) 6.29 10.00 35.04 Net liability/(asset) - Current 74.12 93.79 Net liability/(asset) - Non-current 93.79 154.75 11.30 143.45 147.93 243.60 215.34 10.04 16.82 13.26 137.89 226.78 202.08 22.29 27.61 22.29 # 22.75 # 4.86 b) The amounts recognised in Statement of Profit and Loss are as follows: crore Gratuity plan Post-retirement Company pension Particulars medical benefit plan plan Trust-managed provident fund plan 1 Current service cost 2015-16 48.63 2014-15 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15 7 74.12 Actuarial gain/(loss) not recognised 28.46 Amount capitalised on new product development 0.11 0.02 0.01 IV Amount recovered from S&A Companies 0.12 0.19 1.15 Total (I+II+III+IV) (22.69) 50.88 14.31 55.66 43.58 46.63 72.66 60.97 Actual return on plan assets 31.95 53.69 165.42 140.60 261.20 70.92 45.12 17.45 38.20 1.28 Total (1 to 7) 50.88 70.92 14.31 55.66 43.58 46.63 72.66 60.97 | Amount included in "employee benefits expense" 49.04 57.30 1.21 17.46 26.13 0.36 72.66 83.66 || III Amount included as part of "interest" 1.61 13.41 13.09 in books 16.00 Net liability/(asset) 27.61 51% stake for 5 years from the date of commercial operation or end of construction of the project, whichever is later; and 51% stake during operational period. not to divest the stake in L&T Infrastructure Development Projects Limited until the aforesaid undertakings are valid. To National Highway Authority of India, to hold along with its associates minimum 51% stake in L&T Samakhiali Gandhidham Tollway Limited for a period of 2 years after the construction period. 266 LARSEN & TOUBRO Notes forming part of the Accounts (contd.) NOTE [Q] (contd.) e. f. g. To National Highway Authority of India, that L&T Infrastructure Development Projects Limited will remain as associate of the Company for the entire duration of the Concession Agreement with respect to the six laning of Pimpalgaon-Nasik- Gone section of NH 3 project. To National Highway Authority of India, to hold together with its associates in L&T Devihalli Hassan Tollway Limited, minimum 51% equity stake for a period of 2 years after construction period. 100% stake during the construction period; To National Highway Authority of India, to hold together with its associates in L&T Krishnagiri Walajahpet Tollway Limited: (ii) minimum 33% stake for 3 years from project completion date and (iii) minimum 26% or such lower stake as may be permitted by National Highway Authority of India during remaining concession period. To the Security Trustee of: h. (i) i. j. k. I. the lenders of PNG Tollway Limited, to hold along with L&T Infrastructure Development Projects Limited and Ashoka Buildcon Limited minimum 51% equity stake in PNG Tollway Limited, until the financial assistance received from the term lenders is repaid in full by PNG Tollway Limited. The aforesaid minimum stake can, however, be disposed off before final settlement date with prior approval of lenders; (ii) the lenders of L&T Krishnagiri Walajahpet Tollway Limited, to hold along with L&T Infrastructure Development Projects Limited minimum 51% equity stake in L&T Krishnagiri Walajahpet Tollway Limited, until the financial assistance received from the term lenders is repaid in full. The aforesaid minimum stake can, however, be disposed off before final settlement date with prior approval of lenders; (iii) the lenders of L&T Samakhiali Gandhidham Tollway Limited, to hold along with L&T Infrastructure Development Projects Limited minimum 51% equity stake in L&T Samakhiali Gandhidham Tollway Limited, until the financial assistance received from the term lenders is repaid in full by L&T Samakhiali Gandhidham Tollway Limited. The aforesaid minimum stake can, however, be disposed off before final settlement date with prior approval of lenders; (iv) the lenders of L&T Metro Rail (Hyderabad) Limited, to hold along with L&T Infrastructure Development Projects Limited minimum 51% equity stake and retain management control in L&T Metro Rail (Hyderabad) Limited until the financial assistance received from the term lenders is repaid in full. The aforesaid minimum stake can, however, be disposed off before final settlement date with prior approval of lenders; minimum 51% equity stake during the construction period; to hold in L&T Ahmedabad-Maliya Tollway Limited, L&T Halol-Shamlaji Tollway Limited and L&T Rajkot-Vadinar Tollway Limited alongwith L&T Infrastructure Development Projects Limited: d. ii. ii) Aggregate amount of costs incurred and profits recognised as at the end of the financial year 2228.77 1464.96 iii) Amount of advances received iv) Amount of work-in-progress and the value of inventories [Note (H(II)] 15.73 304.83 31.40 201.03 v) Excess of revenue recognised over actual bills raised (unbilled revenue) [Note (H(VI)] 10.21 48.68 (c) As part of the periodic review of estimates used in determining the cost of completion of projects, the Company revised certain estimates used in civil construction jobs under execution as on March 31, 2016. As a result, the revenue and profit before tax for the year increased by 395.73 crore. Q(7) Disclosures pursuant to Accounting Standard (AS) 13 "Accounting for Investments" 1. The Company has given, inter alia, the following undertakings in respect of its investments: a. Jointly with L&T Infrastructure Development Projects Limited (a subsidiary of the Company), to the term lenders of its subsidiary companies L&T Transportation Infrastructure Limited (LTTIL): b. i. not to reduce their joint shareholding in LTTIL below 51% until the financial assistance received from the term lenders is repaid in full by LTTIL and ii. C. i. to jointly meet the shortfall in the working capital requirements of LTTIL until the financial assistance received from the term lenders is repaid in full by LTTIL. To the lenders of L&T Krishnagiri Thopur Toll Road Limited (KTTL), not to dilute Company's shareholding in L&T Infrastructure Development Projects Limited below 51% until the borrowings received from the lenders is repaid in full by KTTL. To Gujarat State Road Development Corporation Limited: (v) L&T Aviation Services Private Limited, to hold atleast 51% stake, directly or indirectly, in L&T Aviation Services Private Limited, until any amount is outstanding under the credit facility agreement. Assets To the Government of Telangana (erstwhile Government of Andhra Pradesh) with respect to shareholding in L&T Metro Rail (Hyderabad) Limited, to hold and maintain along with L&T Infrastructure Development Projects Limited - (ii) 33% stake till the third anniversary of the COD of the project and 148.90 283.25 148.90 283.25 Less: Fair value of plan assets 385.85 364.71 1986.97 215.64 9.87 215.64 1996.84 1990.14 1856.97 27.78 1884.75 1857.15 Less: Unrecognised asset (2.08) Less: Unrecognised past service costs Amount to be recognised as liability or (asset) 74.12 34.01 155.57 456.42 155.57 93.79 0.97 147.93 39.65 0.30 243.60 215.34 6.70 27.60 B) Amounts reflected in the Balance Sheet Liabilities 74.12 93.79 154.75 147.93 243.60 215.34 22.29 0.82 154.75 459.97 44.27 -Wholly unfunded (iii) 26% stake or such lower proportion as may be permitted by the Government of Telangana (erstwhile Government of Andhra Pradesh), till the remaining concession period. To hold certain minimum stake in its subsidiary companies namely, L&T-MHPS Boilers Private Limited and L&T-MHPS Turbine Generators Private Limited. These undertakings have been given to the customers/potential customers of the Company and customers/potential customers of L&T-MHPS Boilers Private Limited. The undertakings will remain valid till the end of defect liability period or till such period as prescribed in the related bid documents/contracts. To City and Industrial Development Corporation of Maharashtra Limited (CIDCO) that it shall continue to hold not less than 51% stake in L&T Seawoods Limited (LTSL) until CIDCO executes the lease deed for land in favour of L&T seawoods Limited. To the debenture trustee of L&T Shipbuilding Limited, to maintain atleast 26% stake in L&T Shipbuilding Limited, until any amount is outstanding towards the debentures. m. n. To the lender of L&T Shipbuilding Limited, to maintain minimum 76% stake in L&T Shipbuilding Limited, until any amount is outstanding towards the working capital loan. To the Joint Venture partner in L&T Howden Private Limited, to not sell, transfer or dispose off any stake in L&T Howden Private Limited till December 17, 2017 (90 months from date of incorporation). 267 Notes forming part of the Accounts (contd.) NOTE [Q] (contd.) Q(8). Disclosure pursuant to Accounting Standard (AS) 15 (Revised) "Employee Benefits". i. ii. Defined contribution plans: [Note R(6)(b)(i)] Amount of 102.98 crore (previous year: * 82.64 crore) is recognised as an expense and included in "employee benefits expense" (Note N) in the Statement of Profit and Loss. Defined benefit plans: [Note R(6)(b)(ii)] a) The amounts recognised in Balance Sheet are as follows: 268 crore Gratuity plan Particulars Post-retirement Trust-managed medical benefit plan provident fund plan As at As at As at As at As at As at As at 31-3-2016 31-3-2015 | 31-3-2016 31-3-2015 31-3-2016 31-3-2015 31-3-2016 31-3-2015 Company pension plan As at A) Present value of defined benefit obligation -Wholly funded 415.70 422.41 (i) 51% stake till the second anniversary of the commercial operation date (COD) of the project; 16.00 161.68 43.97 Repairs to plant and equipment 49.50 52.42 Repairs to buildings [Note O(1)] 8.08 8 EWAC Alloys Limited 7.19 General repairs and maintenance [Note O(1)] 263.17 221.89 Bank guarantee charges 123.68 652.14 106.93 422.12 501.55 4667.51 4303.44 46629.09 44380.43 260 Notes forming part of the Accounts (contd.) NOTE [N] Employee benefits expense Particulars Salaries, wages and bonus Miscellaneous expenses [Note O(1)] 759.95 Travelling and conveyance [Note O(1)] 217.72 Other manufacturing, construction and operating expenses: Excise duty (4.91) 10.35 Power and fuel [Note O(1)] 831.98 631.14 Royalty and technical know-how fees 20.62 6.39 Packing and forwarding [Note O(1)] 310.78 338.41 Hire charges - plant & equipment and others 573.16 575.38 Engineering, technical and consultancy fees 474.91 499.98 Insurance [Note O(I)] 148.18 149.53 Rent [Note O(1)] 395.78 332.42 Rates and taxes [Note O(1)] 290.51 Contribution to and provision for: (215.61) Provident funds and pension fund Gratuity funds [Note Q(8)(b)] crore crore crore 3863.60 crore 3423.41 116.96 116.79 36.86 11.83 49.04 57.30 202.86 2014-15 185.92 51.67 70.49 41.43 527.66 508.96 (239.08) (48.93) 4480.20 4162.46 2015-16 2014-15 crore 54.67 2015-16 LARSEN & TOUBRO Carried forward Expenses on Employee Stock Option Schemes [Note A(VIII)(e)(ii)] Insurance expenses-medical and others [Note O(1)] Staff welfare expenses Recoveries on account of deputation charges NOTE [O] Sales, administration and other expenses Particulars Power and fuel [Note O(1)] Packing and forwarding [Note O(1)] Professional fees Audit fees [Note Q(17)] Insurance [Note O(1)] Rent [Note O(1)] Rates and taxes [Note O(1)] Travelling and conveyance [Note O(l)] Repairs to buildings [Note O(1)] General repairs and maintenance [Note O(I)] Directors' fees Telephone, postage and telegrams Advertising and publicity Stationery and printing Commission: Distributors and agents Others Bank charges Contribution to political parties [Note Q(25)] Miscellaneous expenses [Note O(1)] Superannuation/employee pension schemes crore 114.98 3604.08 Manufacturing, construction and operating expenses NOTE [M] Notes forming part of the Accounts (contd.) 259 2283.37 2405.97 375.88 414.94 51.57 39.90 29.19 83.97 Particulars Miscellaneous income (net of expenses) 406.63 232.49 406.63 (16.04) Current investments (net) 248.53 Long term investments (net) Net gain/(loss) on sale of investments: 854.19 1121.35 0.84 110.91 Net gain/(loss) on sale of fixed assets Lease rental 2015-16 2014-15 crore Work-in-progress Stock-in-trade Finished goods Closing stock: stock-in-trade and property development: Changes in inventories of finished goods, work-in-progress and Sub-contracting charges 13240.77 1831.46 1296.75 14066.80 1129.18 1448.90 Stores, spares and tools consumed 1296.75 1145.67 (16.49) Value of stock-in-trade transferred on sale of business Purchase of stock-in-trade [Note Q(24)(c)] 5496.79 18426.83 7396.35 17805.37 Construction materials 5601.40 104.61 57.49 7453.84 Raw materials and components [Note Q(24)(b)] Less: Scrap sales Materials consumed: crore crore 853.35 3388.47 1010.44 2.15 From current investments: Interest income: Other Income (b) Shipbuilding subsidy Nil (previous year: Nil) and reversal of shipbuilding subsidy of 4.16 crore (previous year: Nil) NOTE [L] customers. (a) 544.04 crore (previous year: 1443.57 crore) for price variations net of liquidated damages in terms of contracts with the Revenue from sales & service include: NOTE K (I) Notes forming part of the Accounts (contd.) LARSEN & TOUBRO 159.77 161.13 Particulars 3167.65 3489.10 3604.08 Less: Opening stock: Finished goods 261.20 203.17 Stock-in-trade 161.13 117.21 Work-in-progress 3181.75 3068.09 3181.75 2015-16 2014-15 crore 0.58 0.38 850.70 1007.91 From current investments Other trade investments Associate companies Subsidiary companies From long term investments: Dividend income: 565.91 513.32 57.73 44.66 Others 292.74 268.24 Subsidiary and associate companies From others: 3.00 212.44 198.20 2.22 Others Subsidiary companies crore crore crore 2.07 crore crore 65.83 24.87 8 General repairs and maintenance 263.17 210.98 474.15 221.89 205.25 427.14 9 Miscellaneous expenses 422.12 17.68 Total 70.49 392.46 1276.02 814.58 4777.06 501.55 382.15 883.70 3051.99 41.43 1187.15 4280.57 NOTE [P] Finance costs 3430.55 7.19 17.03 8.95 4 Rent 395.78 147.38 543.16 332.42 123.55 455.97 5 Rates and taxes 290.51 46.37 336.88 217.72 34.80 252.52 6 Travelling and conveyance 759.95 261.36 1021.31 652.14 229.13 881.27 7 Repairs to building 8.08 Particulars 231.50 2015-16 2014-15 3 L&T Infrastructure Development Projects Limited L&T Realty Limited 524.04 185.24 563.41 563.41 807.36 4 L&T Finance Holdings Limited 200.00 5 L&T Shipbuilding Limited 2 1921.00 371.00 6 L&T Special Steels & Heavy Forgings Private Limited 779.72 515.20 779.72 515.20 7 PNG Tollway Limited 43.97 43.97 crore 2588.00 656.63 246.00 189.00 crore Interest expenses 1291.65 1289.70 Other borrowing costs 27.74 22.08 Exchange loss (attributable to finance costs) 129.65 107.87 1449.04 1419.65 262 Notes forming part of the Accounts (contd.) NOTE [Q] Q(1) Particulars in respect of loans and advances in the nature of loans as required by the listing agreement: LARSEN & TOUBRO crore Balance as at Maximum outstanding during Name of the company 31-3-2016 31-3-2015# 2015-16 2014-15 (a) Loans and advances in the nature of loans given to subsidiaries: 1 L&T Seawoods Limited crore 40.54 371.00 149.53 31.08 21.26 59.17 52.89 11.00 392.46 1842.99 382.15 1644.55 261 Notes forming part of the Accounts (contd.) NOTE [O] 3.09 Sales, administration and other expenses (contd.) 2014-15 Particulars crore crore crore crore Brought forward 1842.99 1644.55 Bad debts and advances written off 121.19 10.58 2015-16 2.75 18.17 28.33 54.46 41.43 104.02 99.59 289.40 184.37 4.38 3.80 40.54 147.38 123.55 46.37 34.80 261.36 229.13 8.95 17.68 210.98 205.25 0.59 0.52 96.03 90.63 45.72 52.60 40.60 40.33 Less: Allowance for doubtful debts and advances written back 12.96 38.67 108.23 Note M Note N Note O Total 1 Power and fuel 831.98 65.83 897.81 631.14 54.46 685.60 Total 2 310.78 104.02 414.80 338.41 99.59 438.00 Insurance 148.18 70.49 257.34 4.08 38.67 Packing and forwarding Note O 3 Note M Note N 25.05 35.81 45.01 Allowance for doubtful debts and advances (net) 293.07 114.02 Provision/(reversal) for foreseeable losses on construction contracts Provision/(reversal) for diminution in value of investments (net) Exchange (gain)/loss (net) 9.85 13.99 10.15 6.50 (11.72) 75.77 116.61 Nature of expenses Sr. no. 151.36 2014-15 2015-16 crore Company's share in loss of integrated joint ventures [Note (14)(b)] Discount on sales Aggregation of expenses disclosed vide notes M, N and O in respect of specific items as mentioned in schedule III to the Companies Act, 2013, are as follows: NOTE [O(1)] 2000.99 5.46 19.36 2505.07 Other provisions [Note (15)(a)] ended ended For the year For the year For the year ended ended For the year For the year ended ended For the year Overseas Total 12.38 Domestic crore 2.13 1.74 61.17 62.24 Others 31-3-2016 31.92 Particulars b) Secondary segments (geographical segments): 53549.47 31-3-2016 Segment reporting: segment identification, reportable segments and definition of each reportable segment: 853.34 729.88 4.41 76.36 88.30 776.98 641.58 Cost incurred on acquisition of tangible and intangible fixed assets 55719.04 63787.22 31-3-2015 7857.44 47861.60 of assets 57558.07 60415.00 31-3-2015 31-3-2016 31-3-2015 9257.88 10723.42 48300.19 49691.58 External revenue by location of customers Carrying amount of segment assets by location 10237.75 4.09 19.22 123.10 Infrastructure 31-3-2015 31-3-2016 31-3-2015 31-3-2016 31-3-2015 31-3-2016 ended ended ended For the year ended ended For the year Other Information For the year For the year expense Non-cash expenses other than depreciation included in segment crore ended Amortisation, Impairment & Obsolescence included in segment expense For the year For the year i) Depreciation, Capital expenditure 471.45 419.25 431.94 21.52 222.35 142.95 Electrical & Automation 3.18 2.64 124.33 110.84 80.30 55.85 Heavy Engineering 4.05 136.33 3.19 88.91 64.39 10.45 Metallurgical & Material Handling 3.95 2.65 53.88 58.31 35.13 36.80 Power 92.90 Primary/secondary segment reporting format: 10 [b] In respect of secondary segment information, the Company has identified its geographical segments as (i) domestic and (ii) overseas. The secondary segment information has been disclosed accordingly. Yes Subsidiary* PNG Tollway Limited### [Note Q(27)(c)] 18 L&T Rajkot-Vadinar Tollway Limited 16 L&T Special Steels and Heavy Forgings Private Limited 17 Yes Yes Wholly owned subsidiary of L&T Capital Company Limited Wholly owned subsidiary 14 L&T Natural Resources Limited ^ [Note Q(27)(a)] 15 L&T Hydrocarbon Engineering Limited Yes Subsidiary* 13 Raykal Aluminium Company Private Limited Yes Subsidiary* 12 L&T-MHPS Turbine Generators Private Limited Yes Subsidiary* L&T-MHPS Boilers Private Limited 11 Yes Subsidiary of L&T Hydrocarbon Engineering Limited L&T-Gulf Private Limited @ Yes 19 Kesun Iron & Steel Company Private Limited Subsidiary of L&T Infrastructure Development Projects Limited # Subsidiary of L&T Infrastructure Development Projects Limited # Subsidiary* Yes Yes Subsidiary of L&T Realty Limited ** LARSEN & TOUBRO Wholly owned subsidiary Wholly owned subsidiary of L&T Capital Company Limited Wholly owned subsidiary Subsidiary* Subsidiary of L&T Hydrocarbon Engineering Limited Subsidiary of L&T Hydrocarbon Engineering Limited 30 Chennai Vision Developers Private Limited 28 L&T Asian Realty Project LLP 27 L&T Realty Limited 26 L&T Kobelco Machinery Private Limited 24 L&T Powergen Limited ^ [Note Q(27)(a)] 25 EWAC Alloys Limited 23 L&T Sapura Offshore Private Limited @ [Note Q(27)(b)] Wholly owned subsidiary L&T Sapura Shipping Private Limited @ 29 Yes Wholly owned subsidiary of L&T Capital Company Limited L&T Solar Limited ^ [Note Q(27)(a)] 21 Yes Subsidiary* L&T Howden Private Limited 20 2222 Yes L&T Parel Project LLP [a] The risk-return profile of the Company's business is determined predominantly by the nature of its products and services. Accordingly, the business segments constitute the primary segments for disclosure of segment information. L&T Seawoods Limited Yes Transaction entered during the Relationship no. Sr. Name of the related party 274 i. Others segment includes realty, shipbuilding, marketing and servicing of construction & mining machinery and parts thereof, manufacture and sale of rubber processing machinery & castings (up to the date of sale). Q(10) Disclosure of related parties/related party transactions pursuant to Accounting Standard (AS) 18 "Related Party Disclosures" List of related parties over which control exists and status of transactions entered during the year Electrical & Automation segment comprises manufacture and sale of low and medium voltage switchgear components, custom built low and medium voltage switchboards, electronic energy meters/protection (relays) systems and control & automation products. Heavy Engineering segment comprises manufacture and supply of custom designed, engineered critical equipment & systems to core sector industries like Fertiliser, Refinery, Petrochemical, Chemical, Oil & Gas, Thermal & Nuclear Power, Aerospace and Defence. NOTE [Q] (contd.) Notes forming part of the Accounts (contd.) 273 Metallurgical & Material Handling segment comprises turnkey solutions for ferrous (iron & steel making) and non-ferrous (aluminium, copper, lead & zinc) metal industries, bulk material & ash handling systems in power, port, steel and mining sector including manufacture and sale of industrial machinery and equipment. Power segment comprises turnkey solutions for coal-based and gas-based thermal power plants including power generation equipment with associated systems and/or balance-of-plant packages. Infrastructure segment comprises engineering and construction of building and factories, transportation infrastructure, heavy civil infrastructure, power transmission & distribution, water & effluent treatment and smart world & communication projects. • • • iv) Segment composition: Reportable segments have been identified as per the criteria specified in Accounting Standard (AS) 17 "Segment Reporting". iii) Reportable segments: Business segments have been identified on the basis of the nature of products/services, the risk-return profile of individual businesses, the organisational structure and the internal reporting system of the Company. ii) Segment identification: year (Yes/No) 1 L&T Cutting Tools Limited 2 Bhilai Power Supply Company Limited Wholly owned subsidiary Hi-Tech Rock Products & Aggregates Limited 8 Yes Wholly owned subsidiary 7 L&T Electricals and Automation Limited Yes Subsidiary* L&T Shipbuilding Limited 6 Yes 9 Wholly owned subsidiary of L&T Hydrocarbon Engineering Limited 5 Yes Wholly owned subsidiary Spectrum Infotech Private Limited 4 Yes Subsidiary* Yes Yes Wholly owned subsidiary Subsidiary* 3 L&T-Sargent & Lundy Limited L&T-Valdel Engineering Limited @ NOTE [Q] (contd.) 2795.49 49819.18 231.82 3070.91 2756.49 377.43 2379.06 | Metallurgical & Material Handling 4458.95 6.72 40651.96 538.55 40113.41 4452.23 6451.29 1.32 6449.96 Power 42175.28 409.50 41765.78 Infrastructure Revenue including excise duty Total External Inter-segment Total 3302.73 For the year ended 31-3-2015 Heavy Engineering 156.32 Total (1112.19) (1112.19) (1286.08) (1286.08) Elimination 2827.94 32.45 3154.80 32.82 3121.99 Others 4129.42 257.47 3871.95 4228.36 308.69 3919.67 Electrical & Automation 3299.26 45.18 3254.08 2934.86 2778.54 For the year ended 31-3-2016 External Inter-segment Particulars crore 23.21 (2.79) (0.22) 184.03 198.36 188.52 215.34 5.45 11.45 Experience adjustment plan liabilities Trust-managed provident fund plan (funded) 4 243.60 Defined benefit obligation Post-retirement pension plan (unfunded) 3 (0.45) 13.01 (8.72) 31.29 6.80 Experience adjustment plan assets 30.52 26.26 Yes Defined benefit obligation 1996.84 Plan assets Surplus/(deficit) 272 Primary segments (business segments): a) Q(9) Disclosures pursuant to Accounting Standard (AS) 17 "Segment Reporting" NOTE [Q] (contd.) Notes forming part of the Accounts (contd.) 271 The interest payment obligation of trust-managed provident fund is assumed to be adequately covered by the interest income on long term investments of the fund. Any shortfall in the interest income over the interest obligation is recognised immediately in the Statement of Profit and Loss as actuarial loss. Any loss/gain arising out of the investment risk and actuarial risk associated with the plan is also recognised as expense or income in the period in which such loss/gain occurs. Further, the provision of 4.86 crore as on March 31, 2015 based on actuarial valuation towards the future obligation arising out of interest rate guarantee associated with the plan has been reversed in the current year as the balance in surplus account of the fund is higher than the interest obligation of 9.87 crore as on March 31, 2016. The Company manages provident fund plan through a provident fund trust for its employees which is permitted under the Employees' Provident Fund and Miscellaneous Provisions Act, 1952. The plan envisages contribution by employer and employees and guarantees interest at the rate notified by the provident fund authority. The contribution by employer and employee together with interest are payable at the time of separation from service or retirement whichever is earlier. The benefit under this plan vests immediately on rendering of service. Trust-managed provident fund plan: In addition to contribution to state-managed pension plan (EPS scheme), the Company operates a post-retirement pension scheme, which is discretionary in nature for certain cadres of employees. The quantum of pension depends on the cadre of the employee at the time of retirement. 60415.00 Company's pension plan: The Company operates gratuity plan through a trust wherein every employee is entitled to the benefit equivalent to fifteen days salary last drawn for each completed year of service. The same is payable on termination of service or retirement whichever is earlier. The benefit vests after five years of continuous service. The Company's scheme is more favorable as compared to the obligation under Payment of Gratuity Act, 1972. A small part of the gratuity plan, which is not material is unfunded and managed within the Company. The unfunded obligation towards gratuity also includes gratuity payable to employees outside India under the applicable local laws. Post-retirement medical benefit plan: Gratuity plan: 4. 3. 2. 1. h) General descriptions of defined benefit plans: 1791.21 1675.94 1544.72 1784.96 1648.23 1507.47 (6.25) (27.71) (37.25) 1884.75 1857.15 (27.60) 1990.14 (6.70) The post-retirement medical benefit plan provides for reimbursement of health care costs to certain categories of employees post their retirement. The reimbursement is subject to an overall ceiling sanctioned based on cadre of the employee at the time of retirement. 60415.00 57558.07 57558.07 Heavy Engineering 1723.93 1972.31 4927.07 5141.14 | Metallurgical & Material Handling 5796.29 6992.16 6020.23 7267.54 Power 21010.27 24099.06 33963.23 40544.47 Infrastructure As at 31-3-2015 As at 31-3-2016 As at 31-3-2015 31-3-2016 Segment liabilities Segment assets As at Other information 4943.50 4931.39 3294.36 2510.35 56351.38 86903.76 97069.71 Total assets/liabilities 16054.18 16949.04 31184.72 33282.49 Unallocable corporate assets/liabilities 33765.00 39402.34 crore 55719.04 Total 1338.97 1730.31 2795.71 2874.76 Others 1385.19 1314.13 3081.41 3015.81 Electrical & Automation 63787.22 Notes forming part of the Accounts (contd.) 5056.18 (16.30) 5056.18 | Inter-segment margin on capital jobs 6376.61 6292.64 Total 653.36 555.80 Others 503.87 501.01 Electrical & Automation 336.11 (74.60) Heavy Engineering 238.78 42.40 | Metallurgical & Material Handling 201.49 231.42 4443.00 5036.61 Power Infrastructure Result (11.02) (3.04) 6281.62 6373.57 5311.46 173.54 Profit after tax (after extraordinary items) Profit from extraordinary items Profit after tax (before extraordinary items) Provision for deferred tax (1628.74) 6701.22 565.91 (1551.19) 6689.11 5311.46 Provision for current tax 513.32 Interest income (1419.65) (1449.04) Interest expense 7554.96 7624.83 Operating Profit (PBIT) 1181.39 1343.21 Unallocated corporate income/(expenditure) (net) Profit before tax (PBT) Yes Sr. Name of the related party Yes Yes Wholly owned subsidiary of Tamco Switchgear (Malaysia) SDN. BHD Wholly owned subsidiary of L&T Finance Holdings Limited Wholly owned subsidiary Yes Yes *** Subsidiary** Yes Yes Subsidiary of Larsen & Toubro International FZE # Wholly owned subsidiary of Thalest Limited No Subsidiary of Larsen & Toubro International FZE Yes Yes Yes No Wholly owned subsidiary of Larsen & Toubro International FZE Wholly owned subsidiary of Larsen & Toubro International FZE Subsidiary of Larsen & Toubro International FZE # Subsidiary of Larsen & Toubro International FZE # Wholly owned subsidiary of Larsen & Toubro International FZE Wholly owned subsidiary of L&T Housing Finance Limited Wholly owned subsidiary of L&T Finance Holdings Limited Wholly owned subsidiary of L&T Finance Holdings Limited Wholly owned subsidiary of L&T Finance Holdings Limited Wholly owned subsidiary of L&T Vrindavan Properties Limited Subsidiary of Larsen & Toubro Infotech Limited Wholly owned subsidiary Subsidiary* 134 LTH Milcom Private Limited Marine Infrastructure Developer Private Limited 133 L&T Infotech Austria GmbH LLC 132 L&T Global Holdings Limited Yes 131 Yes Yes Yes Yes No 22 Wholly owned subsidiary of Larsen & Toubro Infotech Limited 135 L&T Information Technology Spain SL Subsidiary* Wholly owned subsidiary Wholly owned subsidiary of Larsen & Toubro Infotech Limited Wholly owned subsidiary Yes Wholly owned subsidiary of L&T Infrastructure Development Projects Limited Yes Wholly owned subsidiary of L&T Infrastructure Development Projects Limited Yes Wholly owned subsidiary No No Wholly owned subsidiary of Larsen & Toubro International FZE Subsidiary* No Yes Yes Yes Yes Yes 130 L&T Sambhalpur Rourkela Tollway Limited 128 L&T Construction Equipment Limited 129 Kudgi Transmission Limited 127 L&T Hydrocarbon International LLC Relationship no. 5.49 NOTE [Q] (contd.) Notes forming part of the Accounts (contd.) Yes Yes Yes Subsidiary of Larsen & Toubro International FZE ## Yes Wholly owned subsidiary of Larsen & Toubro International FZE Yes Subsidiary of Larsen & Toubro International FZE ## Yes No Yes Yes Yes Yes Yes Yes No Wholly owned subsidiary of L&T Realty Limited LARSEN & TOUBRO Transaction entered during the year (Yes/No) Yes 106 126 Thalest Limited Larsen & Toubro Infotech South Africa (PTY) Limited 125 124 Mudit Cement Private Limited 123 L&T Infra Debt Fund Limited 122 L&T Capital Markets Limited L&T Technology Services Limited Consumer Finance Services Limited Family Credit Limited L&T Valves Limited 121 120 119 Yes 118 116 Henikwon Corporation SDN. BHD 115 Larsen & Toubro Arabia LLC L&T Geostructure LLP 114 113 112 Larsen & Toubro T&D SA Proprietary Limited Servowatch System Limited Larsen & Toubro Consultoria E Projeto Ltda $$$ 111 110 L&T Electrical & Automation FZE 109 Larsen & Toubro Heavy Engineering LLC Tamco Switchgear (Malaysia) SDN. BHD 107 Tamco Electrical Industries Australia Pty Ltd. 108 PT Tamco Indonesia 117 L&T Housing Finance Limited No * The Company holds more than one-half in nominal value of the equity share capital Larsen & Toubro Limited and NCC Limited Joint Venture 17 L&T-Delma Mafraq Joint Venture 16 Aktor-Larsen & Toubro-Yapi Merkezi-stfa-Al Jaber Engineering 15 Civil Works Joint Venture 14 International Metro Civil Contractors Joint Venture 13 Metro Tunneling Delhi-L&T Shanghai Urban Construction (Group) Corporation Joint Venture 12 Larsen & Toubro Limited-Shapoorji Pallonji & Co. Limited Joint Venture 11 Corporation Joint Venture CC27 Delhi L&T-Eastern Joint Venture $ 10 L&T-Shanghai Urban Construction (Group) 9 L&T-Shanghai Urban Construction (Group) Corporation Joint Venture HCC-L&T Purulia Joint Venture 8 6 @ The Company has sold its stake on October 19, 2015 to a wholly owned subsidiary @@ The Company has sold its stake in July and August, 2015 @@@ The Company has sold its stake on March 29, 2016 $ The Joint Venture is in the process of dissolution ## Appointed w.e.f. January 29, 2016 # Appointed w.e.f. October 1, 2015 **Retired on August 26, 2015 * Retired on September 30, 2015 Mr. M. V. Satish (Whole-time Director) ## 8 Mr. D. K. Sen (Whole-time Director) # 7 Mr. S. N. Roy (Whole-time Director) 6 Mr. S. N. Subrahmanyan (Whole-time Director) Construction (Group) Corporation Joint Venture 5 4 ** Mr. M. V. Kotwal (Whole-time Director) 3 * Mr. K. Venkataramanan (CEO & Managing Director) Mrs. Jyothi Venkataramanan (wife) 2 Mr. A. M. Naik (Group Executive Chairman) 1 Key management personnel & their relatives: ii (b) Names of the key management personnel and their relatives with whom transactions were carried out during the year: Mr. R. Shankar Raman (CFO & Whole-time Director) Subsidiary of Larsen & Toubro International FZE ## Subsidiary of Larsen & Toubro International FZE Metro Tunneling Chennai-L&T-Shanghai Urban L&T Hochtief Seabird Joint Venture $$$ The company is dissolved w.e.f. June 9, 2015 $$ The company has sold its stake on November 16, 2015 $ Subsidiary is merged with Larsen & Toubro Infotech Limited with retrospective effect from October 17, 2014 Companies merged with L&T Capital Company Limited with effect from April 1, 2015 ΛΛ Λ The Company has sold part stake to a subsidiary ### The Company, together with its subsidiaries controls the composition of the Board of Directors ## # The Company's subsidiary/wholly owned subsidiary holds more than one-half in nominal value of the equity share capital @@@ The Company has sold its stake on March 31, 2016 in its subsidiary and consequently the stake in sub-subsidiary also does not exist @@ The Company has sold its stake on March 31, 2016 The stake has been sold to wholly owned subsidiary @ The Company controls the composition of board of directors or governing body as the case may be *** The Company, together with its subsidiaries holds more than one-half in nominal value of the equity share capital ** The Company is dissolved w.e.f. November 6, 2015 277 Notes forming part of the Accounts (contd.) NOTE [Q] (contd.) 2 L&T ASTCC JV-Doha 7 L&T-AM Tapovan Joint Venture 5 Desbuild-L&T Joint Venture 3 Metro Tunneling Group 1 Joint ventures (other than associates): JSK Electricals Private Limited @@@ 4 5 4 Feedback Infra Private Limited 3 Salzer Electronics Limited @@ 2 L&T-Chiyoda Limited @ 1 278 Associate companies: (a) Names of the associates and joint ventures with whom transactions were carried out during the year: ii Magtorq Private Limited Wholly owned subsidiary of Larsen & Toubro International FZE Subsidiary of Larsen & Toubro International FZE # Subsidiary of Larsen & Toubro International FZE ## Wholly owned subsidiary of L&T Global Holdings Limited Subsidiary of Larsen & Toubro International FZE # Subsidiary of Larsen & Toubro International FZE # Subsidiary of Larsen & Toubro International FZE # Subsidiary ## 48 Yes Wholly owned subsidiary of L&T Finance Holdings Limited L&T Finance Limited 47 Yes Yes Wholly owned subsidiary of Larsen & Toubro Infotech Limited Subsidiary* Yes Subsidiary* Yes Subsidiary of L&T Infocity Limited # 46 L&T Finance Holdings Limited 44 Larsen & Toubro Infotech Limited 43 Hyderabad International Trade Expositions Limited @@@ GDA Technologies Limited 45 Yes Subsidiary of L&T Infocity Limited # Yes Yes Wholly owned subsidiary Subsidiary L&T Hitech City Limited @@@ 49 L&T Investment Management Limited L&T Mutual Fund Trustee Limited 50 L&T FinCorp Limited 63 L&T Infrastructure Development Projects Limited 64 L&T Panipat Elevated Corridor Limited 62 Nabha Power Limited L&T Himachal Hydropower Limited 61 L&T Arunachal Hydropower Limited 60 59 L&T Uttaranchal Hydropower Limited 57 L&T Trustee Company Private Limited 58 L&T Power Development Limited L&T Access Distribution Services Limited 56 L&T Capital Company Limited 55 L&T Vrindavan Properties Limited 42 54 Wholly owned subsidiary of L&T Infrastructure Finance Company Limited Yes Yes Yes No Yes Wholly owned subsidiary of L&T Finance Holdings Limited Wholly owned subsidiary of L&T Finance Holdings Limited Wholly owned subsidiary of L&T Finance Holdings Limited Wholly owned subsidiary of L&T Finance Holdings Limited Wholly owned subsidiary of L&T Infrastructure Finance Company Limited 53 L&T Infra Investment Partners Trustee Private Limited 52 L&T Infra Investment Partners Advisory Private Limited L&T Infrastructure Finance Company Limited 51 No Wholly owned subsidiary of L&T Finance Holdings Limited Wholly owned subsidiary of L&T Finance Holdings Limited Wholly owned subsidiary L&T Infocity Limited @@ 40 L&T Aviation Services Private Limited no. Sr. Name of the related party NOTE [Q] (contd.) Notes forming part of the Accounts (contd.) Yes Subsidiary of L&T Realty Limited # L&T Vision Ventures Limited 33 Yes Subsidiary of L&T Realty Limited # L&T South City Projects Limited 32 No Yes Wholly owned subsidiary of L&T Realty Limited Subsidiary of L&T Technology Services Limited L&T Thales Technology Services Private Limited 31 Yes ** Subsidiary of L&T Realty Limited Yes Yes Yes Relationship LARSEN & TOUBRO Transaction entered during the year (Yes/No) Yes Wholly owned subsidiary L&T General Insurance Company Limited 39 Yes Subsidiary* L&T Cassidian Limited 38 Yes Subsidiary* L&T Power Limited 41 37 No Wholly owned subsidiary of Larsen & Toubro Infotech Limited* 36 Information Systems Resource Centre Private Yes Yes Wholly owned subsidiary of L&T Realty Limited* Wholly owned subsidiary CSJ Infrastructure Private Limited $ 35 L&T Infrastructure Engineering Limited 34 Limited ^^ Yes Wholly owned subsidiary of L&T Capital Company Limited Wholly owned subsidiary Yes No No Yes No Yes Subsidiary of L&T Infrastructure Development Projects Limited # Subsidiary* Yes Wholly owned subsidiary of L&T Infrastructure Development Projects Limited Yes Yes 90 Kana Controls General Trading & Contracting Company W.L.L. 89 L&T IDPL Trustee Manager Pte Ltd. 88 PT Larsen & Toubro Hydrocarbon Engineering Indonesia 87 L&T Infrastructure Development Projects Lanka (Private) Limited 85 L&T Infotech Financial Services Technologies Inc. 86 L&T Technology Services LLC 84 Larsen & Toubro Infotech LLC 83 Larsen & Toubro Infotech Canada Limited 82 Larsen & Toubro Infotech, GmbH L&T Samakhiali Gandhidham Tollway Limited 81 Larsen & Toubro LLC 80 79 L&T Deccan Tollways Limited Yes Yes No Yes No No Larsen & Toubro Saudi Arabia LLC 105 Larsen & Toubro ATCO Saudia LLC 103 Larsen & Toubro Readymix and Asphalt Concrete Industries LLC 102 Larsen & Toubro (Qingdao) Rubber Machinery Company Limited $$ 101 Larsen & Toubro Kuwait Construction General Contracting Company, W.L.L. L&T Overseas Projects Nigeria Limited L&T Electricals & Automation Saudi Arabia Company LLC 97 Larsen & Toubro (East Asia) SDN.BHD 98 Larsen & Toubro Qatar LLC 96 L&T Modular Fabrication Yard LLC 95 Larsen & Toubro Electromech LLC Larsen & Toubro International FZE 94 Larsen & Toubro (Oman) LLC 92 L&T Realty FZE 104 Yes 100 93 No Wholly owned subsidiary of Larsen & Toubro Infotech Limited L&T Information Technology Services (Shanghai) Co. Ltd. 91 No Subsidiary of L&T Electrical & Automation FZE ## Wholly owned subsidiary of L&T Infrastructure Development Projects Limited Wholly owned subsidiary of Larsen & Toubro Infotech Limited Wholly owned subsidiary of Larsen & Toubro Infotech Limited Wholly owned subsidiary of Larsen & Toubro Infotech Limited Wholly owned subsidiary of Larsen & Toubro Infotech Limited Wholly owned subsidiary of L&T Technology Services Limited Subsidiary of L&T Infrastructure Development Projects Limited Subsidiary* No 20 99 Wholly owned subsidiary of L&T Power Development Limited Wholly owned subsidiary of L&T Power Development Limited Wholly owned subsidiary of L&T Power Development Limited Wholly owned subsidiary of L&T Power Development Limited Subsidiary* Yes Yes L&T Transportation Infrastructure Limited L&T Western India Tollbridge Limited 69 68 Yes Wholly owned subsidiary of L&T Infrastructure Development Projects Limited 67 L&T Vadodara Bharuch Tollway Limited Yes Wholly owned subsidiary of L&T Infrastructure Development Projects Limited 66 L&T Western Andhra Tollways Limited Yes Wholly owned subsidiary of L&T Infrastructure Development Projects Limited 65 L&T Krishnagiri Thopur Toll Road Limited Yes Wholly owned subsidiary of L&T Infrastructure Development Projects Limited Yes Yes Yes Yes Yes Yes Yes Yes Yes Subsidiary of L&T Infrastructure Development Projects Limited # Wholly owned subsidiary of L&T Infrastructure Development Projects Limited Yes Yes 275 Yes Subsidiary of L&T Infrastructure Development Projects Limited # Subsidiary of L&T Infrastructure Development Projects Limited # Subsidiary of L&T Infrastructure Development Projects Limited # Subsidiary of L&T Infrastructure Development Projects Limited # Subsidiary of L&T Infrastructure Development Projects Limited # Subsidiary of L&T Infrastructure Development Projects Limited # Wholly owned subsidiary of L&T Infrastructure Development Projects Limited Wholly owned subsidiary of L&T Infrastructure Development Projects Limited Wholly owned subsidiary of L&T Infrastructure Development Projects Limited 78 L&T BPP Tollway Limited L&T Chennai-Tada Tollway Limited 77 L&T Metro Rail (Hyderabad) Limited 76 L&T Devihalli Hassan Tollway Limited 75 Yes 74 L&T Krishnagiri Walajahpet Tollway Limited 71 L&T Port Kachchigarh Limited 70 L&T Interstate Road Corridor Limited year (Yes/No) during the Transaction entered 276 Relationship no. Sr. Name of the related party NOTE [Q] (contd.) Notes forming part of the Accounts (contd.) 72 L&T Ahmedabad-Maliya Tollway Limited 73 L&T Halol-Shamlaji Tollway Limited 22.73 415.06 Experience adjustment plan liabilities # Employer's contribution due towards provident fund (previous year: 67.07 crore) towards its trust-managed provident fund plan during the year 2015-16. 60.06 crore) towards its gratuity plan and ₹ 79.93 crore The Company expects to fund 32.31 crore (previous year: The trust formed by the Company manages the investments of provident funds and gratuity fund. Expected return on plan assets is determined based on the assessment made at the beginning of the year on the return expected on its existing portfolio, along with the estimated increment to the plan assets and expected yield on the respective assets in the portfolio during the year. [Note Q(8)(ii)(f)(7)] infra. Basis used to determine the overall expected return: Notes: The fair value of the plan assets under the trust-managed provident fund plan has been determined at amounts based on their value at the time of redemption, assuming a constant rate of return to maturity. 1857.15 1990.14 364.71 149.45 (281.25) (277.84) Amount transferred pursuant to transfer of Integrated Engineering Services Business employees to wholly owned subsidiary L&T Technology Services Limited (30.06) Closing balance of the plan assets Less: Benefits paid 173.58 5.61 (12.20) 63.39 66.22 29.37 68.47 6.06 10.55 31.71 (79.28) 385.85 269 Notes forming part of the Accounts (contd.) NOTE [Q] (contd.) Equity shares of listed companies 8% 9% 30% 34% Corporate bonds 15% 16% 11% 18% State government securities 24% 25% 31% 23% Government of India securities As at 31-3-2015 31-3-2016 As at As at 31-3-2015 31-3-2016 As at Particulars Trust-managed provident fund plan Gratuity plan The major categories of plan assets as a percentage of total plan assets are as follows: e) 6.80 2% 1784.96 134.54 21.98 iii) ii) Employee Employer i) Add: Contribution by plan participants 184.25 1884.75 1791.21 1.45 72.66 83.66 16.40 154.87 134.54 103.57 215.64 6.29 4.45 16.44 9.49 12.05 32.55 Add: Interest cost 456.42 376.15 148.90 48.63 35.04 10.00 Transfer-in/(out)~ Add: Current service cost Trust-managed provident fund plan As at As at 31-3-2016 31-3-2015 Company pension plan As at As at As at 31-3-2015 | 31-3-2016 31-3-2015 Post-retirement medical benefit plan As at As at As at 31-3-2016 31-3-2015 31-3-2016 Particulars Gratuity plan crore The changes in the present value of defined benefit obligation representing reconciliation of opening and closing balances thereof are as follows: c) NOTE [Q] (contd.) LARSEN & TOUBRO Notes forming part of the Accounts (contd.) 0.45 Opening balance of the present value of defined benefit obligation Add/(Less): Actuarial losses/(gains) Less: Benefits paid Add: Past service cost 25.15 Add: Contribution by plan participants Add/(Less): Transfer in/(out)~ Add: Contribution by the employer Add/(Less): Actuarial gains/(losses) Add: Expected return on plan assets* As at 31-3-2015 As at 31-3-2015 As at 31-3-2016 1857.15 323.91 As at 31-3-2016 364.71 Opening balance of the fair value of the plan assets Trust-managed provident fund plan Particulars Gratuity plan crore 459.97 456.42 155.57 148.90 283.25 215.64 1996.84 1884.75 d) Changes in the fair value of plan assets representing reconciliation of the opening and closing balances thereof are as follows: defined benefit obligation Closing balance of the present value of (15.12) (277.84) (281.25) 28.66 (17.91) (17.91) 12.47 (15.33) 49.58 56.97 (7.88) 39.74 (30.06) (7.50) (6.44) 1.65 (79.28) 174.50 174.70 5.61 (3.75) (12.20) 154.87 2% 30.52 central government for provident funds Post-retirement medical benefit plan (unfunded) 1 As at 31-3-2012 31-3-2013 As at As at 31-3-2014 As at 31-3-2015 As at 31-3-2016 Particulars * crore LARSEN & TOUBRO g) The amounts pertaining to defined benefit plans are as follows: Defined benefit obligation NOTE [Q] (contd.) (3.04) (14.57) (3.15) (15.54) 4.01 18.35 19.61 Effect on defined benefit obligation 4.09 Effect on the aggregate of the service cost and interest cost 2014-15 2015-16 2014-15 2015-16 Particulars Notes forming part of the Accounts (contd.) Experience adjustment plan liabilities 154.75 (6.14) 147.93 13.58 (49.41) Fixed deposits under special deposit scheme framed by (52.65) (27.53) (93.79) (74.12) (2.08) Less: Amount not recognised as an asset Surplus/(deficit) 291.66 311.80 364.71 385.85 Plan assets 341.07 364.45 351.44 456.42 459.97 Defined benefit obligation Gratuity plan (funded/unfunded) 2 (6.60) 1.62 14.10 87.01 105.31 102.46 Effect of 1% decrease Effect of 1% increase 323.91 A one percentage point change in assumed healthcare cost trend rates would have the following effects on the aggregate of the service cost and interest cost and defined benefit obligation: Salary growth rate: 4. Annual increase in healthcare costs (see Note 8 infra) 3. Post-retirement medical benefit plan Expected return on plan assets b) Company pension plan 2. c) Gratuity plan a) Discount rate: 1. f) Principal actuarial assumptions at the Balance Sheet date (expressed as weighted averages): 270 1% 1% 8% 42% 39% 14% 9% Public sector unit bonds Others 1% Insurer managed funds crore 10% 10% a) Gratuity plan 17% 31-3-2016 As at The interest payment obligation of trust-managed provident fund is assumed to be adequately covered by the interest income on long term investments of the fund. Any shortfall in the interest income over the interest obligation is recognised immediately in the Statement of Profit and Loss as actuarial losses. 9. 8. For gratuity plan, the attrition rate varies from 1% to 6% (previous year: 1% to 6%) for various age groups. The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. 6. b) a) For post-retirement medical benefit plan & Company pension plan, the attrition rate varies from 2% to 8% (previous year: 2% to 8%) for various age groups. 6.00% 6.00% 5.00% 5.00% Attrition rate: 7. 5. b) Company pension plan 7.79% 7.83% 7.83% 7.79% 7.83% 7.79% 7.50% 5.00% The obligation of the Company under the post-retirement medical benefit plan is limited to the overall ceiling limits. At present, healthcare cost, as indicated in the principal actuarial assumption given above, has been assumed to increase at 5% p.a. 5.00% 7.50% As at 31-3-2015 93.18 86.91 Henikwon Corporation SDN. BHD 477.15 653.99 533.50 628.73 Total L&T-Chiyoda Limited Larsen and Toubro Infotech Limited Associates & joint ventures: Total Subsidiaries, including: 3 Purchase/lease of fixed assets Larsen & Toubro Limited and NCC Limited Joint Venture Metro Tunneling Delhi - L&T-Shanghai Urban Construction (Group) Joint Venture Metro Tunneling Chennai - L&T-Shanghai Urban Construction (Group) Corporation Joint Venture Joint Venture CC27 Delhi L&T-Shanghai Urban Construction (Group) Corporation Civil Works Joint Venture Associates & joint ventures, including: L&T Construction Equipment Limited Tamco Switchgear (Malaysia) SDN. BHD L&T Technology Services Limited 4.51 1.37 34.00 2015-16 280 L&T Seawoods Limited NOTE [Q] (contd.) Notes forming part of the Accounts (contd.) 279 11.14 0.11 0.11 12.49 1.55 2.15 3.29 11.03 15.49 15.49 5710.35 4864.59 10.64 10.50 9.58 33.41 19.09 50.12 L&T Infrastructure Development Projects Limited Amount Amounts for major parties 618.03 no. Sr. Nature of transaction/relationship/major parties 2014-15 2015-16 * crore LARSEN & TOUBRO Disclosure of related party transactions: iii. NOTE [Q] (contd.) Notes forming part of the Accounts (contd.) Amount Amounts for major parties Note: Potential equity shares that could arise on conversion of FCCBs are not resulting into dilution of EPS. Hence, they have not been considered in working of diluted EPS in accordance with Accounting Standard (AS) 20 "Earnings per share". 54.10 56.80 2 54.10 2 2 Face value per share (*) 56.80 93,45,68,060 93,45,68,060 | 93,51,23,728 2014-15 D=B+C | 93,51,23,728 A/D 2 1 Purchase of goods & services (including commission paid) Subsidiaries, including: 2760.99 2080.94 661.06 1395.17 5623.44 4771.41 Larsen and Toubro Saudi Arabia LLC Nabha Power Limited L&T Metro Rail (Hyderabad) Limited 2 Sale of goods/contract revenue & services Subsidiaries, including: 2494.31 2835.53 Total 123.81 24.04 37.33 27.99 JSK Electricals Private Limited 153.46 74.54 484.72 1105.64 536.02 1256.68 Salzer Electronics Limited Associates & joint ventures, including: L&T-MHPS Boilers Private Limited L&T-MHPS Turbine Generators Private Limited 2340.85 L&T Deccan Tollways Limited crore 442.60 Amount Amounts for major parties crore LARSEN & TOUBRO Metro Tunneling Chennai - L&T-Shanghai Urban Construction (Group) Corporation Joint Venture Decrease in investment, including: no. Sr. Nature of transaction/relationship/major parties NOTE [Q] (contd.) Notes forming part of the Accounts (contd.) 57.12 52.60 2015-16 164.43 144.76 210.67 37.48 164.43 547.50 53.84 2428.61 3461.13 604.75 648.30 442.60 2014-15 Amount Amounts for major parties Amount Amounts for major parties Diluted EPS (*) 9 Sale of investments to 4280.66 4234.01 Total 4280.66 4233.64 L&T Capital Company Limited 4280.66 4234.01 Subsidiary, including: 8 Purchase of investments from 31.30 44.21 19.43 Total Metro Tunneling Delhi - L&T-Shanghai Urban Construction (Group) Corporation Joint Venture Larsen & Toubro Limited - Shapoorji Pallonji & Co. Limited Joint Venture 17.18 12.89 21.72 31.30 44.21 1331.86 Sr. Nature of transaction/relationship/major parties 1529.55 383.40 L&T Shipbuilding Limited L&T Technology Services Limited L&T Power Development Limited L&T Seawoods Limited Subsidiaries, including: 6 Subscription to equity and preference shares (including application money paid) L&T Finance Limited Total Subsidiary: Sale of Receivables L&T Realty Limited 5 M. V. Kotwal ** K. Venkataramanan * Key management personnel Larsen and Toubro (Oman) LLC L&T-MHPS Turbine Generators Private Limited Larsen and Toubro Infotech Limited Subsidiaries, including: 4 Sale of fixed assets no. Amount Amounts for major parties Total L&T Uttaranchal Hydropower Limited Total 7 Investment in Integrated joint ventures [Note (R)(21)] 3461.13 276.16 44.83 276.16 44.83 276.16 44.83 15.78 11.30 0.44 8.85 9.29 1.07 0.26 10.34 15.78 2.01 L&T-Delma Mafraq Joint Venture Civil Works Joint Venture L&T-Shanghai Urban Construction (Group) Corporation Joint Venture CC 27 Delhi Metro Tunneling Delhi - L&T-Shanghai Urban Construction (Group) Corporation Joint Venture Total Increase in investment, including: 2428.61 62,19,750 L&T Seawoods Limited 62,19,750 45.00 57.25 Total L&T Cutting Tools Limited L&T Construction Equipment Limited 9.25 Subsidiaries, including: 6 Unsecured loans (including lease finance) 1986.84 5.25 9.25 Total 5.25 L&T Uttaranchal Hydropower Limited 379.40 L&T Power Development Limited 648.29 L&T Realty Limited 421.86 L&T Shipbuilding Limited 1986.84 5.25 523.00 Subsidiaries, including: 12.25 57.25 68.84 L&T Infrastructure Development Projects Limited 96.03 36.97 82.95 223.24 129.40 586.12 266.75 As at 31-3-2015 Amount Amounts for major parties 9.25 As at 31-3-2016 Amount Amounts for major parties Subsidiaries, including: L&T Metro Rail (Hyderabad) Limited Subsidiaries, including: 7 Advances received in the capacity of supplier of goods/services classified as "advances from customers” in the Balance Sheet no. Sr. Nature of transaction/relationship/major parties crore LARSEN & TOUBRO NOTE [Q] (contd.) Notes forming part of the Accounts (contd.) L&T Deccan Tollways Limited 3106.29 0.01 0.01 L&T Realty Limited L&T Shipbuilding Limited L&T Special Steels and Heavy Forgings Private Limited L&T-MHPS Boilers Private Limited 6339.66 Loans & advances recoverable (including interest accrued) Subsidiaries, including: 4 22.95 22.75 Total Nabha Power Limited 22.95 L&T Finance Limited 22.95 22.75 Subsidiary: Amount Amounts for major parties As at 31-3-2015 major parties Amount Amounts for As at 31-3-2016 3 Investment in debt securities 22.75 Associates & joint ventures, including: L&T-AM Tapovan Joint Venture Larsen & Toubro Limited - Shapoorji Pallonji & Co. 14.96 43.48 27.94 23.39 6402.46 12.01 11.87 84.99 62.80 918.15 710.90 400.18 564.02 304.77 3021.29 877.47 2275.23 5 Advances against equity contribution Total K. Venkataramanan * & Mrs. Jyothi Venkataramanan Key management personnel L&T-Delma Mafraq Joint Venture L&T-Shanghai Urban Construction (Group) Corporation Joint Venture CC27 Delhi Limited Joint Venture 122.24 43,62,080 Total 586.12 Before extraordinary items 2014-15 2015-16 Particulars 288 Q(12) Basic and diluted earnings per share [EPS] computed in accordance with Accounting Standard (AS) 20 "Earnings per Share". iv. Contingent rent recognised in the Statement of Profit and Loss: Nil (previous year: * Nil). Lease rental expense in respect of operating leases: 76.97 crore (previous year: 87.14 crore). iii. The lease agreements provided for an option to the Company to renew the lease period at the end of the non- cancellable period. There were no exceptional/restrictive covenants in the lease agreements. b. After extraordinary items 21.55 Total Payable later than 5 years 3. 8.99 19.93 12.56 17.60 As at 31-3-2015 As at 31-3-2016 Minimum lease payments 37.53 crore 2015-16 Basic 43,62,080 C 5311.46 5056.18 5056.18 92,83,48,310 93,07,61,648 92,83,48,310 5311.46 93,07,61,648 B A Profit after tax as per accounts (crore) Weighted average number of shares outstanding Add: Weighted average number of potential equity shares on account of employee stock options Weighted average number of shares outstanding for diluted EPS Diluted 54.46 2014-15 57.07 57.07 A/B 5056.18 92,83,48,310 5311.46 93,07,61,648 5056.18 92,83,48,310 5311.46 93,07,61,648 B Weighted average number of shares outstanding Basic EPS (*) A Profit after tax as per accounts (crore) 54.46 a. The Company had taken certain assets like cars, technology assets, etc. on non-cancellable operating leases, the future minimum lease payments in respect of which were as follows: Payable later than 1 year and not later than 5 years 2. 4.91 2.04 7.39 3.77 18.19 17.96 50.61 47.83 # Appointed w. e. f. October 1, 2015 **Retired on August 26, 2015 9.90 *Retired on September 30, 2015 D. K. Sen # S. N. Roy R. Shankar Raman S. N. Subrahmanyan M. V. Kotwal ** K. Venkataramanan * A. M. Naik Total Key management personnel 8 Due to Whole-time Directors M. V. Satish ## 8.73 6.90 6.91 Payable not later than 1 year 1. Particulars ii. i. The Company had taken various commercial premises and plant & equipment under cancellable operating leases. Those lease agreements were normally renewed on expiry. Operating leases: Where the Company is a lessee: Q(11) Disclosure in respect of leases pursuant to Accounting Standard (AS) 19 "Leases": NOTE [Q] (contd.) Notes forming part of the Accounts (contd.) 287 The financial impact of the aforesaid arrangement has been included in/disclosed vide Note Q(10)(iii) supra. The Company has a marketing and selling arrangement with L&T Construction Equipment Limited, a subsidiary company. As per the terms of the arrangement, the Company is an agent of L&T Construction Equipment Limited to market construction equipment and hydraulic equipment & parts manufactured by L&T Construction Equipment Limited and to provide after sales product support for construction equipment. Pursuant to the aforesaid arrangement, L&T Construction Equipment Limited is required to pay commission to the Company at specified rates on the sales effected by the Company. Notes to related party transactions: V. "Major parties" denote entities accounting for 10% or more of the aggregate for that category of transaction during respective period. ## Appointed w. e. f. January 29, 2016 50.61 47.83 0.73 2.13 4.48 4.40 266.75 5542.28 25.35 L&T Capital Company Limited 4.52 16.98 549.49 549.49 549.49 3.09 3.09 3.09 36.19 Amount Amounts for major parties 4.22 Amount Amounts for major parties 2015-16 crore M. V. Satish ## D. K. Sen # S. N. Roy R. Shankar Raman Total S. N. Subrahmanyan M. V. Kotwal ** K. Venkataramanan * 2014-15 A. M. Naik 15.19 9.60 8.76 11.09 12.57 6.24 2.31 9.38 4.28 23.10 22.81 64.27 4.20 59.93 36.19 0.24 0.61 2.22 2.31 1.59 1.70 1.74 2.02 3.01 16.98 Key management personnel 22 Commission to directors @ M. V. Satish ## 2.35 4.11 4.70 17.76 3.89 1.98 6.31 14.67 17.76 295.74 1.54 9.32 31.50 90.62 104.48 33.57 76.00 286.42 69.94 52.58 270.46 Total 9.32 4.76 1.72 14.67 D. K. Sen # S. N. Roy R. Shankar Raman S. N. Subrahmanyan M. V. Kotwal**^^ K. Venkataramanan *^$ A. M. Naik Total 21 Payment of salaries/perquisites (other than commission) Key management personnel Total L&T Technology Services Limited Subsidiary: 20 Transfer of business to Total Larsen and Toubro (Qingdao) Rubber Machinery Company Limited Subsidiary: 19 Amount provided for bad debts no. Sr. Nature of transaction/relationship/major parties 284 NOTE [Q] (contd.) Notes forming part of the Accounts (contd.) 4277.56 8.78 L&T Cutting Tools Limited 5.59 2.68 1042.25 555.34 L&T-MHPS Turbine Generators Private Limited L&T-MHPS Boilers Private Limited 1782.16 2256.57 2 Accounts payable (including acceptance & interest accrued) Subsidiaries, including: 1443.50 1591.49 Total 57.64 830.70 18.91 256.39 1443.50 36.82 128.95 297.98 202.25 1462.54 Metro Tunneling Chennai - L&T-Shanghai Urban Construction (Group) Corporation Joint Venture Metro Tunneling Delhi - L&T-Shanghai Urban Construction (Group) Corporation Joint Venture Civil Works Joint Venture Associates & joint ventures, including: L&T Metro Rail (Hyderabad) Limited Larsen and Toubro Saudi Arabia LLC Nabha Power Limited 253.41 Subsidiaries, including: 547.20 42.16 no. Sr. Nature of transaction/relationship/major parties crore 286 NOTE [Q] (contd.) Notes forming part of the Accounts (contd.) 285 1886.35 2298.73 5.56 Associates & joint ventures, including: Total 25.20 27.73 18.78 31.77 Joint Venture L&T-Shanghai Urban Construction (Group) Corporation Salzer Electronics Limited Construction (Group) Corporation Joint Venture Larsen & Toubro Limited and NCC Limited Joint Venture Metro Tunneling Chennai - L&T-Shanghai Urban Construction (Group) Corporation Joint Venture Metro Tunneling Delhi - L&T-Shanghai Urban 104.19 18.54 1 Accounts receivable Amount Amounts for major parties Amount Amounts for major parties Sr. Particulars Commission to director comprises: @ NOTE [Q] (contd.) Notes forming part of the Accounts (contd.) ^^ Includes leave encashment payment on retirement of 7.89 crore 0.75 crore) from L&T Hydrocarbon Engineering Limited which has ## Appointed w. e. f. January 29, 2016 ** Retired on August 26, 2015 21.95 21.95 no. 21.95 ^ Includes leave encashment payment on retirement of 13.53 crore # Appointed w. e. f. October 1, 2015 * Retired on September 30, 2015 L&T Capital Company Limited Total Subsidiary: 23 Capital reduction by 64.27 59.93 0.93 $ Out of the above, the company has recovered Nil (previous year: been included in Note Q(10)(iii)(15) supra 1 Commission 2 no. Sr. Nature of transaction/relationship/major parties As at 31-3-2015 As at 31-3-2016 crore Amount due to/from related parties: iv. "Major parties" denote entities accounting for 10% or more of the aggregate for that category of transaction during respective period. 64.27 59.93 7.59 7.08 6.07 5.04 50.61 47.81 crore 2014-15 2015-16 LARSEN & TOUBRO Total Contribution to superannuation fund on commission 3 Contribution to provident fund 5.68 Nabha Power Limited 283 L&T Infrastructure Development Projects Limited major parties Amount Amounts for Amount Amounts for major parties 2014-15 2015-16 crore L&T-Chiyoda Limited Associates & joint ventures, including: L&T Parel Project LLP Subsidiary, including: L&T Realty Limited 12 (b) Charges recovered for deputation of employees to related parties Larsen and Toubro (Oman) LLC PT Tamco Indonesia Larsen and Toubro Infotech Limited L&T Electrical and Automation FZE L&T Electricals and Automation Saudi Arabia Company LLC L&T Hydrocarbon Engineering Limited Subsidiaries, including: 12 (a) Charges incurred for deputation of employees from related parties no. Sr. Nature of transaction/relationship/major parties 282 Total NOTE [Q] (contd.) 11.19 1.84 69.20 132.21 32.30 Total L&T-Delma Mafraq Joint Venture Civil Works Joint Venture Aktor- Larsen & Toubro-Yapi Merkezi-stfa-Al Jaber Engineering Joint Venture 21.06 21.12 252.91 2.18 22.15 79.49 11.19 1.20 1.28 13.70 2.59 3.48 4.43 1.27 2.18 77.99 Notes forming part of the Accounts (contd.) 281 1.83 2.48 16.49 33.71 27.37 23.91 84.93 89.94 152.49 11 Rent paid, including lease rentals under leasing/hire purchase arrangements Total Civil Works Joint Venture 1.04 Feedback Infra Private Limited L&T-Chiyoda Limited L&T Technology Services Limited Larsen & Toubro Infotech Limited L&T Aviation Services Private Limited Subsidiaries, including: 10 Charges paid for miscellaneous services 4277.56 5542.28 Total 4277.56 4232.03 1147.40 L&T Global Holdings Limited Associates & joint ventures, including: 0.77 0.23 0.59 1.69 Total 0.01 0.01 K. Venkataramanan * & Mrs. Jyothi Venkataramanan 0.01 0.01 Key management personnel 0.30 0.23 0.35 0.37 0.98 0.86 1.82 1.68 PT Tamco Indonesia L&T Infocity Limited L&T Electrical & Automation FZE Subsidiaries, including: 90.98 154.97 1.89 332.40 99.11 13.70 Subsidiaries, including: 18.18 Subsidiaries, including: 649.63 553.81 1.06 32.02 72.63 28.57 5.60 139.45 9.12 6.66 96.83 68.64 69.89 84.71 77.23 510.18 547.14 Amount Amounts for major parties Amount Amounts for major parties 2014-15 105.86 Nabha Power Limited 9.90 6.36 L&T Construction Equipment Limited L&T Hydrocarbon Engineering Limited Subsidiaries, including: 18 Interest paid to The Dhamra Port Company Limited Total Associates & joint ventures: Nabha Power Limited L&T Shipbuilding Limited L&T Realty Limited L&T Special Steels and Heavy Forgings Private Limited L&T Hydrocarbon Engineering Limited 270.46 Subsidiaries, including: 17 Interest received from 9.12 18.18 Total 1.06 6.02 L&T Hydrocarbon Engineering Limited 1.21 13 Dividend received 2015-16 crore Larsen and Toubro Saudi Arabia LLC 16 Guarantee charges recovered from 14 Commission received, including those under agency arrangements 851.28 1008.29 0.40 0.38 Total Magtorq Private Limited Salzer Electronics Limited 0.58 0.38 Associates & joint ventures, including: 96.68 L&T Finance Holdings Limited 219.93 480.52 526.48 302.00 L&T Technology Services Limited Larsen & Toubro Infotech Limited 850.70 1007.91 LARSEN & TOUBRO Subsidiaries, including: Total 0.18 L&T Construction Equipment Limited Total L&T-Chiyoda Limited L&T-Delma Mafraq Joint Venture Civil Works Joint Venture Aktor-Larsen & Toubro-Yapi Merkezi-stfa-Al Jaber Engineering Joint Venture L&T Hydrocarbon Engineering Limited L&T Kobelco Machinery Private Limited L&T Technology Services Limited Larsen & Toubro Infotech Limited 15 Rent received, overheads recovered and miscellaneous income Subsidiaries, including: no. Associates & joint ventures, including: 2.64 NOTE [Q] (contd.) Notes forming part of the Accounts (contd.) 3.73 7.49 1.49 4.84 2.24 Sr. Nature of transaction/relationship/major parties 3.73 7.49 Press Releases, Infodesk - an online service, dedicated email id for investor grievances AGM (Shareholders interaction) Investors meet and shareholder visits to works A corporate website that presents an updated picture of capabilities & activities Access to the business media Employee engagement surveys for further improvement in employee- engagement and respond to queries For Internal Stakeholders Employee- satisfaction Periodic feedback mechanism surveys to provide information Regular business interaction, supplier, dealer and stockist meets PRINCIPLE 4: BUSINESSES SHOULD RESPECT THE INTERESTS OF, AND BE RESPONSIVE TOWARDS sessions engagement Stakeholder- For External Stakeholders The Company has a dedicated Corporate Brand Management & Communications department which facilitates an on-going dialogue between the organisation and its stakeholders. Communication channels include: Further details of our CSR programmes and approach are listed in Principle 8. The CSR programmes run by the Company are focused primarily on those sections of the local communities which are disadvantaged, vulnerable and marginalized. We are conscious of the impact of our operations on the communities around and strive to contribute positively to improve their standard of living; through our interventions in water & sanitation, heath, education and skill development. As one of India's most widely held companies with diverse and transparent shareholding, the Company recognizes that its stakeholders form a vast and heterogeneous community. Our customers, shareholders, employees, suppliers, community, etc., have been guideposts of our decision-making processes. The Company engages with its identified stakeholders on an ongoing basis through business-level engagements and structured stakeholder engagement programmes. We maintain our focus on delivering value to all our stakeholders, especially the disadvantaged communities. 25 25 ALL STAKEHOLDERS, ESPECIALLY THOSE WHO ARE DISADVANTAGED, VULNERABLE AND MARGINALIZED processes Client- satisfaction surveys Circulars, As a part of a Company-wide effort to protect the environment, and in accordance with the circular issued by the Ministry of Corporate Affairs, Corporate Social initiatives Our 'Working on Wellness' programme is targeted at employee health interventions in six critical areas - - cancer, diabetes, cardiac disease, obesity, ergonomic issues and stress. Through counselling, awareness sessions, diagnostic camps and workshops across locations we increase awareness on these topics. The Health Risk Index questionnaire is an important tool used to assess employees' perspective and design preventive healthcare interventions. The Company constantly innovates to be an employee-friendly brand, and, last year, was ranked among the top companies to work for by a Business Today survey. PRINCIPLE 7: RESPONSIBLE PUBLIC ADVOCACY The Company actively participates in industrial forums and professional bodies to put forth the larger interest of industry. The senior leadership team offers their expertise and insights during public 27 L&T's solar solutions help harness the unlimited power of the sun. The Company's Board of Directors has complete access to the information within the organisation. This includes reports on effluents or pollution issues. All manufacturing units and service sites are encouraged to develop and maintain a management system based on ISO 14001 and OHSAS 18001. During the financial year, there are no pending show cause/ legal notices from CPCB/SPCB. to Central Pollution Control Board (CPCB) State Pollution Control Boards (SPCB) whereever applicable. The Company has more than 25 Bureau of Energy Efficiency (BEE) Certified energy managers and energy auditors to conduct energy audits at its units. The Company adheres to all pollution control standards set by regulatory bodies like Central and State Pollution Control Boards. Environmental regulatory approvals are sought prior to commencement of operations at units and project sites. Regular checks are conducted by internal and independent auditors / assessors to ensure compliance with relevant environmental regulations, and compliance reports are submitted footprint across businesses. Our other environment preservation initiatives are promotion of green building construction, enhancement of green cover, provision of solar and renewable energy solutions to customers and capacity-building for environmental management. Since 2009, the Company has been annually reporting its carbon emissions to the Carbon Disclosure Project. We are committed to the eight missions of the National Action Plan on Climate Change (NAPCC) instituted by the Government of India. Progressively, we have been investing in products and processes that promote sustainable growth enhancing energy security, developing low-carbon technologies for building infrastructure, spreading sustainability knowledge and increasing our green cover. The Company is focused on maximising energy-efficiency and reducing greenhouse gas (GHG) emission intensity. Our pursuit of renewable energy solutions has helped us to reduce our carbon The Company recognises the importance of bringing about an equitable future which is in greater harmony with the environment. Our Corporate Environment Health and Safety policy spells our commitment to conserve the environment in all areas of our operations. The Company has established a comprehensive system to identify and assess potential environmental risks and opportunities in its operations and that of its Subsidiary and Associate Companies. Its key suppliers are also encouraged to follow its practices. PROTECT, AND MAKE EFFORTS TO RESTORE THE ENVIRONMENT PRINCIPLE 6: BUSINESS SHOULD RESPECT, There were no reported complaints related to human rights violations during the year. and social performance helps in identification of various resource- saving opportunities, in addition to compliance with applicable environmental and social regulatory requirements. LARSEN & TOUBRO 26 We propagate our values across the supply chain through our 'Environmental & Social Code of Conduct' for our suppliers. The assessment of our key suppliers based on their environmental We ensure that human rights clauses (including those that deal with child or forced labour) are extended to our sub-contractors as part of their contract documents, and are strictly adhered to within our Subsidiary and Associate companies. Employees are sensitized on human rights through induction training programmes, interactive sessions, intranet, policy manuals and posters. The Company is also a member of the Global Compact Network India and is committed to honouring human rights within its operations. Apart from this, the Company complies with the applicable local laws and regulatory requirements, such as the Factories Act 1948, The Building & Other Construction Workers (Regulation of Employment & Conditions of Service) Act 1996, the Central Rules 1998 and the Industrial Disputes Act 1947. The Policy for Protection of Women's Rights at the Workplace sets out objectives, applicability and structure of committees and process to redress complaints. The Corporate Human Resource Policy of the Company is in line with the Universal Declaration of Human Rights, the ILO Core Conventions on Labour Standards and the UN Global Compact. PRINCIPLE 5: BUSINESSES SHOULD RESPECT AND PROMOTE HUMAN RIGHTS L&T Helpdesk, toll-free number A large bouquet of print and on-line in-house magazines - Some location- specific, some business-specific, a CSR programme newsletter. Online News Bulletins to convey topical developments Welfare initiatives for employees and their families messages from Corporate and Line Management permanent employees. The safety performance of the Company is reviewed by Board of the Company on a quarterly basis. 2a. Principle-wise (as per NVGS) BR Policy/policies (Reply in Y/N) Safety is a thrust area for the Company. Regular safety training, tool-box talks, mock drills and specific safety interventions help build a safe work culture within the organisation. New employees are given training in multiple disciplines including environment, health and safety, human rights, climate change and sustainable development. All contract workmen receive mandatory safety training before commencing work. Over 2.77 million man-hours of training was provided in FY 2015-16 to the Has the policy been formulated in 2 Y Y Y Y Y Y Y Y Do you have a policy/policies for 1 (Reply in Yes/No) P9 P8 P7 P6 P2 - Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle P3 - Businesses should promote the well-being of all employees P4 _ Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalized P5 - Businesses should respect and promote human rights consultation with the relevant P6 - Businesses should respect, protect, and make efforts to restore the environment S. No (A) Details of Compliances P1 P2 P3 P4 P5 P7 - Businesses, when engaged in influencing public and regulatory policy, should do so in a responsible manner P8 - Businesses should support inclusive growth and equitable development P9 - Businesses should engage with and provide value to their customers and consumers in a responsible manner P1 - Businesses should conduct and govern themselves with Ethics, Transparency and Accountability Y Y Questions 7 6 5 S. No LARSEN & TOUBRO Chairman 20 20 Signed by the Group Executive Y Y Y Y Y Y Y Y Y Y Y Y Y Y stakeholders? Does the policy conform to any national/ Yes. The policies are aligned with the principles of NVG guidelines and 4 Board? Yes. Has it been signed by MD/Owner/CEO/ Appropriate Board Director? 3 Does the Company have a specified Name of principles: Head Corporate Infrastructure & Administrative Services +91-22-67052447 4. Total Spending on CSR as a % of Profit after tax (%): 2.25%. 3. Profit after taxes: 5311.46 Crores 2. Total Turnover: 60415 Crores 1. Paid up Capital (INR) : 186.295 Crores SECTION B: FINANCIAL DETAILS OF THE COMPANY 10. Markets served by the Company - Local/State/National/International/: All ii. Number of National Locations: 100 i. Number of International Locations: 35 9. Total number of locations where business activity is undertaken by the Company 3. Engineering services 2. Manufacturing and trading activity 1. Construction and project-related activity 8. List three key products/services that the Company manufactures/provides (as in balance sheet) This year, the Company planted 3.09 lakh trees across its campuses and project sites, taking its tally to 1.5 million trees in the last five years. The Company has released a guidance document on tree plantation and maintenance for its campuses and project sites. The Company understands the importance of biodiversity and need to protect nature's precious resources. Studies conducted at six campuses showed that 1565 tonnes of carbon per year are sequestered at these campuses. Several initiatives have been taken to protect biodiversity in and around units, with emphasis on growing native tree species. Fostering Biodiversity water and sanitation for the impacted communities. All our campuses have a green cover. Safety techniques need to be scientifically disseminated. L&T has set up a one-of-a- kind Safety Innovation School in Hazira. Government of India, shareholders have been given the option of receiving documents related to general meetings, Audited Financial Statements, etc., through e-mail instead of printed copies. Salient features of the Company's green initiatives include: Increasing use of renewable energy Power Purchase Agreements at our Powai, Hazira and Chennai campuses are in place with Renewable Energy Power Producers to draw renewable energy as a substitute to fossil-fuel-generated electricity. Carbon footprint mapping and reduction - i. Life cycle assessment - from cradle to gate has been conducted for products manufactured by the Heavy Engineering business, Powai. Results show that 40% of the total carbon footprint is generated during the in-house fabrication process. The rest is caused by activities outside Company premises. Initiatives taken at the Powai campus include: investments in renewable energy, reduction in material consumption and enhancing the product's energy efficiency. revenue. Water Conservation The Company's water consumption 28 intensity has declined steadily over the years. Across all the Company's manufacturing locations, various water management initiatives are in place, such as water auditing & footprint mapping, rainwater harvesting, industrial and domestic wastewater treatment and reuse. Eight of the Company's campuses have been certified as 'Water Positive' by an independent assurance provider. All 28 major units continue to be zero- wastewater-discharge units. The Company's efforts in water conservation are supplemented by its CSR programmes and the Larsen & Toubro Public Charitable Trust by focusing on water management projects in tribal and drought- prone regions of India. Over 200 check dams were constructed in the Dahanu and Talasari blocks of Maharashtra, in collaboration with voluntary organisations. The Company's Integrated Community Development (ICD) Programmes identified water-stressed locations in Rajasthan, Maharashtra and Tamil Nadu, and initiated watershed development activities in over 30 villages to provide access to drinking The Company plans to conduct similar studies for the green buildings constructed by its construction business, and plans to extend it to other products and services. In addition to reducing its own carbon footprint, it offers customers a bouquet of green products and services. Sales of green products and services are contributing an increasingly larger share to the Company's total sustainability-ehs@Larsentoubro.com Health iii. Skill Development Major General Gautam Kar (Retd.) Details Not Applicable Email ID 5 Telephone Number 4 Designation 3 Name 2 DIN Number (If applicable) 1 Particulars S. No b) Details of the BR head • Designation: Head - Corporate Centre & Member of the Executive Management Committee (EMC) • iv. Water & Sanitation LARSEN & TOUBRO SECTION C: OTHER DETAILS 1. Does the Company have any Subsidiary Company/ Companies? Yes. 2. Do the Subsidiary Company/Companies participate in the BR Initiatives of the parent company? If yes, then indicate the number of such subsidiary company(s): Yes. The Business Responsibility (BR) initiatives of the Company are extended to the Subsidiary/Associate Companies and they are also encouraged to carry out various activities independently. Major subsidiaries such as Larsen & Toubro Infotech Limited, L&T Hydrocarbon Engineering Limited participate in our Business Responsibility initiatives. ii. Education 3. Do any other entity/entities (e.g. suppliers, distributors, etc.) that the Company does business with participate in the BR initiatives of the Company? If yes, then indicate the percentage of such entity/entities. [Less than 30%, 30-60%, More than 60%]: 19 SECTION D: BR INFORMATION 1. Details of Director/Directors responsible for BR a) Details of the Director/Directors responsible for implementation of the BR policy/policies • DIN Number: NA • Name: Dr. Hasit Joshipura Yes. The Company promotes BR initiatives in its value chain. At present, less than 30% of its suppliers/ distributors participate in BR initiatives. committee of the Board/ Director/Official 5. List of activities in which expenditure in point 4 above has been incurred: Indicate the link for the policy to be viewed online? LARSEN & TOUBRO 22 22 of direction. Codified policies publicly affirm the organisation's commitment, govern actions and provide clarity AM NAIK dial LARSEN & TOUBRO 30 2014 Adopt sustainable and resource efficient processes and provide value added products and services Partner with communities towards social interventions in the identified thrust areas in our engagements with stakeholders, and advocate responsible business practices -Continue to ensure good governance, ethics and transparency Foster a culture of trust and caring to enhance safety and well-being of employees Reduce adverse impact of climate change, augment energy efficiency and promote renewable energy usage Incorporate environmental and social considerations in our business operations Towards this we shall, (b) Does the Company publish a BR or a Sustainability Report? What is the hyperlink for viewing this report? How frequently it is published? Yes, the Company has been publishing its Sustainability Report annually as per the Global Reporting Initiative (GRI) framework since 2008. The sustainability reports are externally assured. We are following GRI - G4 (Fourth Generation) guidelines and the 2015 report is 'In Accordance - Comprehensive' report. The reports can be accessed at www.Lntsustainability.com 21 221 SECTION E: The Company's Whistle Blower Policy encourages and enables employees to report, without fear, any wrongdoings or unethical or improper practice which may adversely impact the image and/ or the financials of the Company, through a written report to Whistle Blowing Investigation Committee's address. The Company has established a vigil mechanism for employees and directors to report concerns about unethical behaviour, actual or suspected fraud or violation of the Company's CoC or ethics policy. The management assures maintaining anonymity of the whistleblower at all times. The policy also provides for access to the Chairman of the Audit Committee. PRINCIPLE 1: BUSINESSES SHOULD CONDUCT AND GOVERN THEMSELVES WITH ETHICS, TRANSPARENCY AND ACCOUNTABILITY L&T-ites are guided by the Code of Conduct (CoC), which is featured on the Company's Intranet. Every new employee is introduced to the CoC through a detailed online module of the Company's Any Time Learning (ATL) System. The critical areas of the CoC are also included in the HR Orientation Training. In a unique initiative, each individual employee of the Company is required to confirm his/her acceptance of the Code of Conduct, Corporate Governance policies and guidelines in writing or online. This is a 'once a year' requirement, which creates awareness on the CoC, policies and guidelines, and encourages employees to take responsibility for their actions. The Board members and senior management complies with the CoC. The Group Executive Chairman makes an Annual Declaration to the shareholders on compliance with the Company's CoC by the senior management. The CoC Apex Committee, constituted by the Executive Management Committee (EMC) of the Company, functions as the Apex Body to interact, inform, advise and coordinate with the EMC on all issues relating to the CoC. It consists of a minimum of five senior members and is required to meet at least twice a year. The Compliance Officer acts as the Ex-Officio Secretary of the Apex Committee. Sustainability Policy The key function of the Committee is to ensure implementation of the CoC across the Company and deal with instances of non-compliance, apart from overseeing the functioning of the unit-level CoC Committees and advising the EMC. Unit-level CoC Committees consist of at least four members, headed by the Unit Head, along with Head of Accounts, Head of HR and a senior member from Operations. The Unit-level Committees are required to meet at least once in a quarter. The role of the Committee is to create awareness of the CoC, motivate employees to follow it, monitor compliance and investigate instances of non-compliance. At Larsen & Toubro, we are committed to fulfilling our economic, environmental and social responsibilities while conducting business. We will conserve natural resources and enhance social equity to achieve sustainable growth while serving all our stakeholders L&T is a professionally managed Indian multinational, committed to total customer satisfaction and enhancing value for all stakeholders. The Company's philosophy on corporate governance is built on a rich legacy of fair and transparent governance and disclosure practices. This includes respect for human values, individual dignity and adherence to honest, ethical and professional conduct. Our commitment to these values is articulated through the Company's Vision and policies, which are extended to the operations of all subsidiaries and associate companies. (a) Indicate the frequency with which the Board of Directors, Committee of the Board or CEO meet to assess the BR performance of the Company: Within 3 months, 3-6 months, Annually, More than 1 year: Annually The Company has formulated an 'Environmental & Social Code of Conduct for Suppliers' covering specific clauses on Ethics and Transparency. More than 400 Suppliers are signatory to this code. Details relating to stakeholder complaints are included in the Director's Report Section of this Annual Report. PRINCIPLE 2: BUSINESSES SHOULD PROVIDE GOODS AND SERVICES THAT ARE SAFE AND CONTRIBUTE TO SUSTAINABILITY We provide employees with continuous training in functional and behavioural areas to groom them for the challenges of tomorrow and help realize leadership potential. Our Leadership Development Academy (LDA) at Lonavala, a unique corporate university in India, collaborates with the world's most reputed institutions to provide a global perspective for L&T's multi-tier leadership process. Apart from this, a wide range of technical, functional as well as managerial training programmes are held for the employees at Technical Training Centres in Mumbai (Madh, Mahape) and Mysuru, and at Project Management Institutes (Vadodara and Chennai). to oversee the implementation of the policy? Yes. Total workforce Contract 3,01,311 workmen employees women permanent Number of 2,036 L&T Refer "Standalone employees financials - 10-year Highlights" section of Annual Report The Company is a merit-based organisation, and believes in an inclusive approach to employment. No discrimination is made on the basis of caste, religion, region, gender or physical disability. The Company complies with the principles of the United Nations Global Compact, and human rights clauses are also included in the contracts with vendors and partners. The Company directly employs 93 differently-abled persons. The value chain also employs 31 differently-abled persons. The Company recognises Employee Unions and associations affiliated with different trade unions at its manufacturing facilities. 8.34% of permanent employees are covered under this category. During the year, no complaints were received relating to child labour, forced labour, involuntary labour or sexual harassment at the workplace. The Leadership Development Academy at Lonavala near Mumbai is one of the few institutions of its kind in India. It provides the springboard for Team L&T to attain the next level of professional growth. LARSEN & TOUBRO 24 L&T's range of AC Drives helps industries maximize energy-efficiency. Our employees are the force powering the Company's growth engines. It is the creative energy of our people that powers the Company, and we nurture our people with a continuous loop of training, motivation, leadership development, and growth. The Company's Corporate Human Resource Policy has a robust framework which inspires innovation and creativity. Apart from this, we have the Corporate Environment, Health & Safety (EHS) Policy, Whistle Blower Policy, Policy for Protection of Women's Rights at the Workplace and Code of Conduct covering human rights protection. PRINCIPLE 3: BUSINESS SHOULD PROMOTE THE WELL-BEING OF EMPLOYEES The Company promotes recycling and the use of alternative materials. Our products are 'engineered to order' based on specific customer requirements, limiting the scope for material recycling. We utilise alternative materials such as fly ash, crushed sand and blast furnace slag. Steel scrap, zinc waste, etc., are reclaimed as well. As a part of our sustainability roadmap, we are increasing recycling of products and industrial waste at campuses and project sites. THROUGHOUT THEIR LIFE CYCLE Our portfolio includes products and services for the Infrastructure, Power, Heavy Engineering, Electrical & Automation (E&A), Metallurgical & Material Handling (MMH), Hydrocarbon, IT & Technology Services and Financial Services segments. In all our businesses, it is our endeavour to extend safe goods and services that contribute to sustainability throughout their life- cycle. We ensure that sustainability aspects, risks and opportunities are integrated into our engineering and design. Our construction and infrastructure projects ensure minimal environmental impact and safe operations. All our campuses work towards reducing our environmental footprint, building a culture of safety and enhancing community value. We have 15 Green Buildings, one Green Factory, 8 water-positive campuses, and all 28 major campuses have achieved zero waste-water discharge status. Energy-efficiency and carbon footprint reduction are given substantial importance during the course of production. All the products and projects are accompanied by adequate labels and signage systems as well as Operation & Maintenance manuals. The Company offers comprehensive training to customer personnel as well. The Larsen & Toubro Group of Companies has set benchmarks in implementing good Corporate Governance practices. Imbibed by its employees as a way of life, these practices have created a high governance culture in the Company. Sustainability begins at home. Our facility at Kattupalli is one of the many LEED (Leadership in Energy and Environmental Design) certified green buildings across L&T's campuses. Apart from these initiatives, the Company has a dedicated and expanding green products and services portfolio which is aimed at helping its customers 'Go Green'. The portfolio covers Green Buildings, Mass Rapid Transit Systems like metro and mono rail, solar power plants built on EPC basis, fuel switch projects, coal gasifiers, supercritical thermal power plants & equipment, power transmission & distribution systems, energy-saving electrical & automation solutions, etc. The Company's construction business builds Green Buildings, sourcing most construction material locally, and helps customers to reduce energy and water consumption, and utilise recycled material. Energy-efficient products and systems from the Company's Electrical & Automation business include Power Management Systems, AC drives, smart metering systems, etc. The Heavy Engineering business manufactures coal gasifiers, utilising coal efficiently. With the aim of extending our sustainability practices to our 5000 000 0306 value chain, we have formulated an Environment and Social Code of Conduct for our suppliers. It advocates environmental footprint reduction, occupational health and safety and socially-responsible business practices. The Company conducted an environmental and social assessment of selected suppliers to help them identify energy, water and resource-saving opportunities. It also conducts capacity-building programmes for vendors and sub-contractors, and provides training and technical expertise to improve operational efficiency. In an effort to enhance local sourcing, around 80% of the Company's requirements are met by local suppliers. It evaluates various options for cost-effective and sustainable transportation of products and services, and has initiated the capture of carbon emission from material transportation. The Company works with its vendors and sub- contractors to improve and build their capacity and capability in manufacturing complex products Ex2000 23 3. Governance related to BR and equipment. Introducing sustainability practices in the supply chain is a key step towards improving their environmental and social performance. This year, the Company's Heavy Engineering business initiated a business-wide environmental and social supplier assessment programme. Any other reason (please specify) Y Y Y Y Y Y Y Y redressal mechanism related to the policy/ Does the Company have a grievance 9 Does the Company have in-house struc- ture to implement the policy/policies? 8 YYYYYYYYY YYYYYYYYY www.Lntsustainability.com communicated to all relevant internal and external stakeholders? ་་་་་་་་ ་ ་ P1 Has the policy been formally Not Applicable P2 12 33 Y 55 P4 P5 P7 P8 P9 10 P3 policies to address stakeholders' griev- ances related to the policy/policies? P6 Has the Company carried out independ- The Company is not at a stage where it finds itself in a position to formulate and implement the policies on specified principles Not Applicable 3. The Company does not have financial or Not Applicable manpower resources available for the task 1 year It is planned to be done within next 6 months Not Applicable 5. It is planned to be done within the next 6. 10 Not Applicable Not Applicable P1 P2 P3 P4 P5 P6 P7 P8 P9 4. The Company has not understood the principles Y ent audit/evaluation of the working of this Y policy by an internal or external agency? Y Y Y Y Y Y 2b. If answer to question at Serial No. 1 against any principle, is 'No', please explain why. (Tick up to 2 options) S. No 1 2. Questions Y 769.47 2014-15 1178.96 1074.52 120.88 219.69 crore Particulars 2015-16 7562.21 126.97 32.90 Q(20) Dividends remitted in foreign currency: 5.67 104.75 NOTE [Q] (contd.) 127.52 170.32 385.10 408.68 295 Notes forming part of the Accounts (contd.) 6224.63 1262.50 Construction material 473.56 1.25 (ii) Other services including certification work Particulars 0.51 0.88 * e. For reimbursement of expenses 0.14 0.20 * Note: The above figures include fees paid for FCCB issue amounting to Nil (previous year: 0.08 crore) charged to securities premium account during the year. Q(18) Value of imports (on C.I.F. basis): 643.38 Raw materials Capital goods Q(19) Expenditure in foreign currency: On overseas contracts Royalty and technical know-how fees Interest Professional/consultation fees Other matters Particulars crore 2015-16 2014-15 Components and spare parts crore 187.51 2014-15 0.00 * 378.22 Q(22) The Company has amounts due to suppliers under The Micro, Small and Medium Enterprises Development Act, 2006, [MSMED Act] as at March 31, 2016. The disclosure pursuant to the said Act is as under: crore Particulars 2015-16 2014-15 Principal amount due to suppliers under MSMED Act 121.14 106.94 Interest accrued, due to suppliers under MSMED Act on the above amount and unpaid Payment made to suppliers (other than interest) beyond the appointed day during the year Interest paid to suppliers under MSMED Act (other than Section 16) 2.90 4.17 264.03 193.61 Interest paid to suppliers under MSMED Act (Section 16) Interest due and payable towards suppliers under MSMED Act for payments already made Interest accrued and remaining unpaid at the end of the year to suppliers under MSMED Act Amount of further interest remaining due and payable even in the succeeding years 0.01 0.45 7.83 2.52 1.30 13.16 0.87 * * 9652 Other receipts Interest received Dividend for the year ended March 31, 2015 to: i. 11 non-resident shareholders on 20,826 shares held by them (previous year: 11 non- residents on 20,826 shares) on September 2, 2015 0.03 0.03 ii. Custodian of global depositary receipts on 2,19,62,105 shares (previous year: 2,10,12,316 shares) on September 2, 2015 35.69 29.94 Q(21) Earnings in foreign exchange: crore Particulars 2015-16 2015-16 Export of goods [including 846.77 crore on FOB basis (previous year: 672.93 crore)] Construction and project related activities 878.06 687.45 9693.94 8431.36 Export of services 129.33 128.71 Commission 8.61 5.69 2014-15 Limited review of standalone and consolidated financial statements on a quarterly basis Provision for litigation related obligations represents liabilities that are expected to materialise in respect of matters in appeal. For Other services: 8.27 125.75 276.23 # & b) includes provision used during the year 1.84 crore (previous year: 4.58 crore) includes sale of foundry business 0.39 crore (previous year: * Nil) ₹ Nature of provisions: i. ii. Product warranties: The Company gives warranties on certain products and services, undertaking to repair or replace the items that fail to perform satisfactorily during the warranty period. Provision made as at March 31, 2016 represents the amount of the expected cost of meeting such obligations of rectification/replacement. The timing of the outflows is expected to be within a period of two to five years from the date of Balance Sheet. Expected tax liability in respect of indirect taxes represents mainly the differential sales tax liability on account of non-collection of declaration forms. iii. iv. Contractual rectification cost represents the estimated cost the Company is likely to incur during defect liability period as per the contract obligations in respect of completed construction contracts accounted under Accounting Standard (AS) 7 (Revised) "Construction Contracts". Disclosure in respect of contingent liabilities is given as part of Note (I) to the Balance Sheet. Q(16) In line with the Company's risk management policy, the various financial risks mainly relating to changes in the exchange rates, interest rates and commodity prices are hedged by using a combination of forward contracts, swaps and other derivative contracts, besides the natural hedges. a) The particulars of derivative contracts entered into for hedging purposes outstanding as at March 31, 2016 are as under: crore 294 Category of Derivative Instruments i) For hedging foreign currency risks and interest rate risks a) Forward contracts for receivables including firm commitments and highly probable forecasted transactions Amount of exposures hedged As at 31-3-2016 131.60 As at 31-3-2015 10.62 259.11 170.79 (153.66) 4.03 no. in respect of indirect Class of Provisions Litigation related obligations Contractual rectification Total cost- construction taxes contracts 123 Balance as at 1-4-2015 Additional provision during the year 10.72 93.42 8.27 146.70 10.25 39.33 121.21 Provision used/reversed during the year # & (10.35) (1.15) (142.16) 4 Balance as at 31-3-2016 (4=1+2-3) 5067.38 4501.34 b) Forward contracts for payables including firm commitments and highly probable forecasted transactions 39082.98 27042.70 32145.54 26158.82 Note: As per the Royal Monetary Authority of Bhutan, Bhutan's national currency is pegged to the Indian rupee at parity. Accordingly, the unhedged foreign currency exposures reported above excludes exposures [(Receivables amounting to *2385.28 crore (previous year: 1646.07 crore) and payables amounting to 1801.09 crore (previous year: with respect to currencies such as Bhutan Ngultrum (BTN). Q(17) Auditors' remuneration (excluding service tax): 1142.08 crore)] Particulars a. For Audit fees b. For Taxation matters C. For Company law matters crore 2015-16 2014-15 1.70 1.25 0.48 0.30 0.25 d. As at 31-3-2015 31-3-2016 As at i) Receivables including firm commitments and highly probable forecasted transactions ii) Payables including firm commitments and highly probable forecasted transactions 14922.13 10825.77 c) Currency and interest rate swaps 2848.01 2958.95 d) Option contracts a) Commodity futures 204.23 ii) For hedging commodity price risks 457.38 242.52 (i) iii) For hedging Investment in mutual fund and bonds b) Interest rate swaps 671.58 900.00 200.00 Notes forming part of the Accounts (contd.) NOTE [Q] (contd.) b) Unhedged foreign currency exposures as at March 31, 2016 are as under: LARSEN & TOUBRO crore Unhedged Foreign Currency Exposures a) Stock market index futures 1.20 1151.28 296 958.88 Less: Sale value of scrap Total [Note M] 7453.84 57.49 7396.35 5601.40 104.61 5496.79 ii) Classification of goods: Classification of goods Imported (including through canalising agencies) Indigenous Total Purchases of stock-in-trade: Class of goods | Electronic, medical & other instruments, accessories and spares | Earthmoving & agricultural machinery and spares Industrial machinery Others Sub-total Less: Value of stock-in-trade transferred on sale of business Total [Note M] Stores and spare parts consumed: Classification of goods Sub-total Imported (including through canalising agencies) Others 35.01 Power plant & machinery components 4033.91 crore 2196.20 Chemical plant components 102.37 147.04 Nuclear equipment components, including items for oil & gas etc., industries, in aggregate Steel 12.46 19.70 831.09 891.25 Switchgear components 687.10 708.52 Electronic devices, test & measuring instruments and industrial electronic control panel components 40.89 33.60 Non-ferrous metals 175.49 195.73 Metering & protection systems and medical equipment and components Industrial machinery components 384.24 386.41 64.07 Indigenous Total 2015-16 40.79 102.72 1145.67 16.49 1129.18 1296.75 1296.75 2015-16 2014-15 % to total consumption crore % to total consumption crore 16 189.12 18 258.17 84 987.01 82 1189.99 100 1176.13 100 1448.16 11.22 16.12 354.20 355.49 2014-15 % to total consumption * crore % to total crore consumption 19 1422.32 25 1390.20 81 2014-15 5974.03 4106.58 100 7396.35 100 5496.79 2015-16 2014-15 crore crore 733.27 828.61 75 2015-16 crore Class of goods Class of goods: 66.78 77.20 Steel structural fabrication 80.48 33.55 Plant & equipment and modules for nuclear power projects, heavy water projects, nuclear and space research and allied projects, including items for chemical, oil & gas, etc. industries 12.94 21.65 Defence equipment, all types 7.79 110.92 Parts and accessories for prime movers, boilers, steam generating plants and nuclear reactors 134.68 107.63 Transmission line tower 180.68 73.86 Design, development and manufacturing of airborne assemblies, system and equipment for aircrafts, helicopters & unmanned aerial vehicles and equipment for the aviation sector Ship auxiliaries and components of mechanised sailing vessels 1.81 14.05 Nuclear purpose equipment, de-aerators, ultra high pressure vessels including multiwall vessels, high pressure heat exchangers and high pressure heaters in aggregate Power plant & machinery components 1.01 1.94 Industrial electronic control panels 35.92 27.17 Chemical plant & machinery, including pharmaceutical, dyestuff, distillery, brewery, solvent extraction plants, evaporator and crystallizer plants and pollution control equipment in aggregate LARSEN & TOUBRO Notes forming part of the Accounts (contd.) NOTE [Q] (contd.) Q(24) Details of sales, raw materials and components consumed, manufacturing work-in-progress and purchase of stock-in-trade: a) Sales: Class of goods 2015-16 * crore 2014-15 crore (i) Manufacturing and trading activity: Switchgear, all types 2434.48 88.81 2446.26 876.22 807.55 Industrial machinery 323.51 353.08 Electricity meters 427.99 416.28 Rubber processing machinery and accessories 310.85 193.96 Earthmoving and agriculture machinery and spares Q(23) There are no amounts due and outstanding to be credited to Investor Education & Protection Fund as at March 31, 2016. Others (ii) Property development activity Others Total (iv) Servicing (v) Commission (vi) Engineering and service fees Total sales & service (i) to (vi)-[Note K] 33.73 113.82 936.97 871.09 52022.74 49480.38 473.64 507.93 137.30 44.74 108.78 59517.13 3.59 56791.13 297 Notes forming part of the Accounts (contd.) NOTE [Q] (contd.) b) Raw materials and components consumed: 298 i) Expected tax liability Ship auxiliaries and components of mechanised sailing vessels Commercial ships 6.78 1.13 1005.82 1063.71 5995.07 5743.51 843.64 946.94 (iii) Construction and project related activity: Civil/infrastructure/mechanical/electrical construction 42754.40 Thermal/hydro/gas based power plants 6211.82 Total 41930.17 4264.89 1018.48 1212.37 Chemical plant & machinery, including pharmaceutical, dyestuff, distillery, brewery, solvent extraction plants, evaporator and crystallizer plants and pollution control equipment in aggregate 281.53 559.82 Defence equipment, all types 645.18 517.37 Nuclear purpose equipment, de-aerators, ultra high pressure vessels including multiwall vessels, high pressure heat exchangers and high pressure heaters in aggregate Design, development and manufacturing of airborne assemblies, system and equipment for aircrafts, helicopters & unmanned aerial vehicles and equipment for the aviation sector Parts and accessories for prime movers, boilers, steam generating plants and nuclear reactors 25.68 117.89 Plant & equipment and modules for nuclear power projects, heavy water projects, nuclear and space research and allied projects, including items for chemical, oil & gas, etc. industries Particulars 3 늙은 NOTE [Q] (contd.) Notes forming part of the Accounts (contd.) LARSEN & TOUBRO Qatar 75 Execution of the Roads and Infrastructure in Doha Industrial Area L&T-AL-Sraiya LRDP 6 Joint Venture 19 of 2 parallel 2100 mm diameter steel gravity mains conduit pipes from Palra to Bhureka) India 55 18 India 50 India Sr. 60 no. Name of Joint Venture 50 Malaysia Country of residence 82.30 interest % Proportion of ownership EPC for construction of Greenfield six-Lane Extradosed Cable Bridge over Ganga River Design and construction of special bridge across narmada river structure for Dedicated Freight Corridor Corporation Execution of 500 KV Transmission Line Tender in Malaysia Description of interest 22 L&T Sojitz Consortium 22 Daewoo and L&T UJV 21 PESB and Larsen & Toubro Joint Venture 20 India UAE Jointly Controlled Entity (Improvement of Mafraq to AL Ghwaifat Border Post Highway Section No.4A) Jointly Controlled Entity (Implementation of residual joint works for monorail system in Mumbai) India @ Jointly Controlled Entity (Design and Construction of Tunnel for Delhi MRTS Project of Phase-III) (Group) Corporation Joint venture- CC27 Delhi L&T-Shanghai Urban Construction 12 Construction of TCS SEZ at Kolkata, West Bengal) India 50 Larsen & Toubro-Shapoorji Pallonji & Jointly Controlled Entity (Design & Build work for Co. Limited Joint Venture 11 Corporation Joint Venture India @ Jointly Controlled Entity (Construction of Delhi Metro Corridor- Tunnel Project-Phase-CC5) 13 60 Civil Works Joint Venture 29 Larsen & Toubro Limited and NCC Jointly Controlled Entity (Supply and construction Limited Joint Venture | Jointly Controlled Entity (Operation and Maintenance of monorail system) Larsen & Toubro Limited-Scomi Engineering BHD Consortium-O&M Joint Venture Larsen & Toubro Limited-Scomi Engineering BHD Consortium- Residual Joint Works-Joint Venture L&T Delma Mafraq Joint Venture 17 16 15 Qatar 22 Jointly Controlled Entity (Contract for Design & Build Package 3, Gold Line Underground, a part of the construction of the Qatar integrated Railway Project) Aktor-Larsen & Toubro-Yapi Merkezi-stfa-Al Jaber Engineering Joint Venture 14 Arabia Saudi Jointly Controlled Entity (Contract for Detail Design, Construction and Commissioning of Package 2 of The Riyadh Metro Project) India 23 L&T-KBL (UJV) Hyderabad 0.01 0.01 47.75 71.47 L&T-Hochtief Seabird 1 (Note O) (Note K) Net loss Net profit Tax Expenses Income Liabilities For the Year 2015-16 Joint Venture As at March 31, 2016 Assets (71.47) (-) (3.82) (13.06) Civil Contractors Joint 0.03 0.09 0.08 0.14 2.55 9.73 International Metro 2 (0.01) (-) (-) (0.01) (47.75) Name of Integrated Joint Ventures/Jointly Controlled Entities Sr. no. Company's share India 27 India Jointly Controlled Operations (Transmission of 735 Mld treated water associated with all Civil, Electrical & Mechanical works at Hyderabad) L&T-KBL-MAYTAS UJV 26 India Jointly Controlled Operations (Lift Irrigation Project at Hyderabad) L&T-SVEC Joint Venture 25 India Jointly Controlled Operations (Parbati Hydro Electric Project) 24 Patel-L&T Consortium India Jointly Controlled Operations (Investigation, Design, Supply and Erection of necessary lift systems with all electrical and mechanical components including surge protection systems) 28 Larsen & Toubro Limited & Bharat Rail Automation Pvt Limited Joint Venture (package II) Larsen & Toubro Limited & Bharat Rail Automation Pvt Limited Joint Venture (package III) 29 crore 292 Financial interest in jointly controlled entities (to the extent of the Company's share) b) NOTE [Q] (contd.) Notes forming part of the Accounts (contd.) 291 Metro Tunneling Delhi-L&T-Shanghai Urban Construction (Group) India L&T and Scomi Engineering BHD Joint Venture 30 India India Jointly Controlled Operations (design, supply, erection, testing & commissioning of 25 KV, 50HZ, single phase, traction over-head equipment, switching stations, and other associated works, in the state of Karnataka and Andhra Pradesh, India) Design & Construction of 8 Special Steel Bridges over water main and railways and across creek & rivers including ulhas damanganga, par & tapi rivers, involving bridge structure, approaches in formation in embankments with 1 major bridge, 3 minor bridges and 1 RUB, guide bunds and protection works including testing and commissioning on design-build lumpsum price basis for JNPT Vadodara section of western dedicated freight corridor (Phase-2) Jointly Controlled Operations (design, supply, erection, testing & commissioning of 25 KV, 50HZ, single phase, traction over-head Equipment, switching stations, SCADA and other associated works, in the state of Karnataka and Andhra Pradesh, India) IIS-L&T Consortium Jointly Controlled Operations (Implementation of monorail system in Mumbai) (-) $ 10 75 (89.40) 20.23 (109.63) purposes in the year of transfer to the Statement of Profit and Loss Loss on derivative transactions to be claimed for tax (345.11) (108.72) (236.39) Provision for doubtful debts and advances debited to the Statement of Profit and Loss Deferred tax (assets): 873.82 (4.19) (2.13) (65.90) 946.04 Unpaid statutory liabilities/provision for compensated absences debited to the Statement of Profit and Loss Total (173.52) (63.51) (2.13) (173.54) (670.46) 20.23 (107.64) (38.61) 24.90 (23.82) (48.88) 409.92 Previous year 362.99 Net deferred tax liability/(assets) (583.05) Total Other items giving rise to timing differences 16.04 172.36 233.54 Charge/ (credit) to Charge/ (credit) to Statement of Profit & Loss out* Transfer Less: Deferred tax liabilities/ (assets) as at 31-3-2015 Gain on derivative transactions to be offered for tax purposes in the year of transfer to the Statement of Profit and Loss Difference between book and tax depreciation Deferred tax liabilities: Particulars Q(13) Major components of deferred tax liabilities and deferred tax assets pursuant to Accounting Standard (AS) 22 "Accounting for Taxes on Income": NOTE [Q] (contd.) Notes forming part of the Accounts (contd.) LARSEN & TOUBRO warranties Charge/ (credit) to (61.18) opening reserves $ crore Deferred tax liabilities/ (assets) as at Other items giving rise to timing differences 113.65 13.17 100.48 deduction for tax purposes but not debited to the Statement of Profit and Loss Disputed statutory liabilities paid and claimed as 0.52 (4.19) 4.71 587.29 (2.13) (17.89) 607.31 31-3-2016 reserve** hedging 203.36 16.30 (29.33) Jointly Controlled Entity (Construction of Delhi Metro Corridor-Phase II Tunnel Project) Metro Tunneling Group 5 Country India 49 residence interest % of Proportion of ownership Jointly Controlled Entity (Renovation of US Consulate, Chennai) Description of interest Desbuild-L&T Joint Venture 4 Name of Joint Venture 26 no. India L&T-AM Tapovan Joint Venture UAE 65 Jointly Controlled Entity (Construction and maintenance of 295 Residential Units at Dubai) Jointly Controlled Entity (Construction of UG Stations at Nehru Park, KMC and Pachiyappas College and associated tunnels for CMRL) Metro Tunneling Chennai-L&T- Shanghai Urban Construction (Group) Corporation Joint Venture (CMRL) 9 L&T-Eastern Joint Venture 8 India 51 Jointly Controlled Entity (Construction of Twin Tunnel between IGI Airport and Sector 21 for DMRC) L&T-Shanghai Urban Construction (Group) Corporation Joint Venture 7 India 65 Jointly Controlled Entity (Construction of Head Race Tunnel for Tapovan Vishnugad Hydro Electric project in Uttaranchal state) 6 Sr. 290 NOTE [Q] (contd.) Proportion of ownership Description of interest Name of Joint Venture no. Sr. Q(14) Disclosures in respect of joint ventures pursuant to Accounting Standard (AS) 27 "Financial Reporting of Interests in Joint Ventures" a) List of Joint Ventures Reversal of deferred tax on depreciation charged against opening reserves as on April 1, 2015, pursuant to Schedule II of Companies Act, 2013, 2.13 crore [previous year: (29.33 crore)]. Instruments: Recognition and Measurement". The amount is after considering the net deferred tax liability of 16.04 crore (previous year net deferred tax asset: 82.78 crore). The amount of (167.95 crore) [previous year: (198.25 crore)] represents net gains/(losses) on effective hedges recognised in hedge reserve, applying the principles of hedge accounting set out in the Accounting Standard (AS) 30 "Financial Net deferred tax assets of 48.88 crore was transferred pursuant to transfer of business to wholly owned subsidiaries in previous year. $ ** * 362.99 (82.78) Country interest % 1 L&T-Hochtief Seabird Joint Venture Jointly Controlled Entity (Construction of breakwater, Karwar) Notes forming part of the Accounts (contd.) 289 India 43 Jointly Controlled Entity (Construction of Pumped Storage Project) HCC-L&T Purulia Joint Venture 3 India Metro Corridor-Phase | Tunnel Project) India 26 Jointly Controlled Entity (Construction of Delhi International Metro Civil 2 of residence India 90 Contractors Joint Venture (0.11) (197.34) (-) (0.54) 0.64 6.81 (25.45) 7.45 (27.56) (2.14) (2.14) Joint Venture-Main 3.50 (1.57) 3.50 16 (Note O) (Note K) Net loss Net profit Tax Expenses Income L&T Scomi Monorail Liabilities (-) L&T Scomi Monorail 158.15 97.62 111.90 Larsen & Toubro Limited 18 (14.41) (-) (-) 17 (21.52) (7.60) (7.60) Joint Venture-O&M 7.03 14.83 7.80 8.76 8.76 (7.11) 143.87 For the Year 2015-16 Name of Integrated Joint Ventures/Jointly Controlled Entities (-) 'I (-) 1005.85 694.85 1005.85 (553.11) (-) (553.11) Yapi Merkezi-stfa-Al 694.85 (-) Aktor-Larsen & Toubro- Venture-CC27 Delhi (1.19) (-) (-) 1.85 189.22 (384.73) (261.99) Construction (Group) Corporation Joint 13 As at March 31, 2016 Assets (-) 14 no. Sr. Company's share * crore LARSEN & TOUBRO NOTE [Q] (contd.) Notes forming part of the Accounts (contd.) 'I ' I Jaber Engineering Joint Venture 15 L&T Delma Mafraq Joint 32101) 176.25 380.15 349.92 30.23 (57.10) (-) (-) 204.51 1363.96 1823.47 1568.47 (1742.36) (57.10) 2091.26 (1799.47) Civil Works Joint Venture (-) 14.28 & NCC Limited Joint (72.10) *₹ 2634, $ ₹ 3352, Q₹ 8258 Previous year: 8416, #8416, Current year: Amounts less than 0.01 Crore: Controlled entities (-) I @: On scope of respective activities under the contract as mutually agreed between Joint Venture partners I Net Assets in Jointly 818.33 Entities Share of (35.81) (59.78) (0.53) (1041.87) (3009.99) (1066.37) (420.24) (3430.23) Notes: ii. Sr. (-) Product crore Q(15) Disclosures pursuant to Accounting Standard (AS) 29 "Provisions, Contingent Liabilities and Contingent Assets": a) Movement in provisions: NOTE [Q] (contd.) Notes forming part of the Accounts (contd.) 293 i. Capital commitments, if any, in relation to interest in Joint Ventures as at March 31, 2016 is Nil (previous year: Nil) Share in capital commitments of Joint Ventures themselves for which the Company is contingently liable as at March 31, 2016 is 2.61 crore (previous year: 159.34 crore) Share in contingent liabilities of Joint Ventures themselves for which the company is contingently liable as at March 31, 2016 is ₹ 58.18 crore (previous year: * 80.13 crore) crore (previous year: 3248.49 crore) and share in contingent liabilities incurred jointly with other ventures as at March 31, 2016 is Nil (previous year: Nil) Contingent liabilities, if any, incurred in relation to interest in Joint Ventures as at March 31, 2016 is ₹ 4170.76 ₹ Figures in brackets ( ) relate to previous year, figures in (( )) represents negative amounts in previous year, figures in {( )} represents negative amounts in the current year vi. V. iv. iii. Contingent liabilities in respect of liabilities of other ventures' of Joint Ventures as at March 31, 2016 is 8006.19 crore (previous year: 10840.81 crore) 25.05 252.64 1.45 (-) (-) (-) and Al Sraiya Trading & 0.05 24.34 24.29 165.71 (-) 177.00 19 Venture (-) (-) (-) (41.35) (41.35) (72.10) Larsen & Toubro Limited (-) Contracting Company Joint Venture 3359.07 3588.11 3354.26 4172.59 (-) (-) (-) (-) (-) (-) (-) Total (-) Venture Daewoo-L&T Joint 21 Toubro Joint Venture PESB and Larsen & 20 209.23 12 L&T-Shanghai Urban 90.13 191.07 (196.73) (383.54) (0.54) # Venture (0.04) ((0.3)) (-)22 ((0.02)) (0.02) (-) Λ 8 18.55 13.04 0.30 0.30 Venture (17.79) (12.57) (0.23) L&T-Eastern Joint (-) {(0.01)} Desbuild-L&T Joint L&T-AM Tapovan Joint 145.61 38.87 0.17 0.89 Venture (148.68) (40.96) 0.04 (1.26) I I (0.22) (-) 0.72 (-) (-) 7 (1.26) 9 I 9 (-) (1.25) Construction (Group) Corporation Joint Venture 11 Larsen & Toubro Limited- Shapoorji Pallonji & Co. 49.27 0.29 20.96 (75.16) (53.51) (82.55) 36.82 (96.94) 4.97 (-) (-) (14.39) Ltd Joint Venture 31.85 (0.31) T 104.57 Metro Tunneling Chennai 110.91 -L&T-Shanghai Urban (109.62) 87.69 106.44 (64.67) (216.66) 117.51 (221.20) 0.87 11.94 (141.69) (-) Construction (Group) Corporation Joint Venture-CMRL 10 Metro Tunneling Delhi -L&T Shanghai Urban 104.53 (128.51) 67.39 104.28 (71.94) (140.44) (4.14) (-) ((0.40)) (2.69) L&T-Shanghai Urban 4 (0.76) (0.36) ((*)) (7.30) (22.20) 0.64 0.41 0.03 1.08 7.55 23.04 Metro Tunneling Group Venture (0.11) (0.22) 18.95 5.49 (1.12) 0.35 0.62 2.69 2.98 5 HCC-L&T Purulia Joint Venture 0.01 (-) (0.11) (0.05) Venture (0.45) (2.98) (5.12) (18.39) Construction (Group) Corporation Joint 0.19 0.08 (0.29) 0.01 2014-15 crore * crore Industrial machinery Defence equipment, all types Steel structural fabrication 34.25 58.43 43.52 6.95 42.96 51.31 41.44 2015-16 Switchgear, all types Class of goods Inventories are valued after providing for obsolescence, as under: e) Details of manufacturing work-in-progress: 46.87 13. Inventories Purchase and sale of investments are recognised based on the trade date accounting. Current investments are carried at lower of cost and fair value. The determination of carrying amount of such investments is done on the basis of weighted average cost of each individual investment. Long term investments including trade investments are carried at cost, after providing for any diminution in value, if such diminution is other than temporary in nature. Investments in integrated joint ventures are carried at cost net of adjustments for Company's share in profits or losses as recognised. Investments, which are readily realisable and are intended to be held for not more than one year from the date of acquisition, are classified as current investments. All other investments are classified as long term investments. Trade investments comprise investments in subsidiary companies, joint ventures, associate companies and in the entities in which the Company has strategic business interest. LARSEN & TOUBRO 12. Investment in the case of a cash generating unit (a group of assets that generates identified, independent cash flows), at the higher of the cash generating unit's net selling price and the value in use. in the case of an individual asset, at the higher of the net selling price and the value in use; b. a. Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is determined: Notes forming part of the Accounts (contd.) NOTE [Q] (contd.) (Value in use is determined as the present value of estimated future cash flows from the continuing use of an asset and from its disposal at the end of its useful life). Transmission line tower Servicing of construction machinery 73.88 Q(25) Contribution to political parties include: 7.46 6.44 111.41 13.17 12.28 2.96 2.79 0.63 0.47 26.13 41.37 372.18 582.78 Contribution to political parties aggregating to * Nil (Previous year: 11.00 crore made during the year as follows: Indian National Congress: *5.00 crore, Bharatiya Janata Party: 5.00 crore and Shiv Sena: 1.00 crore). Q(26) a) Amount required to be spent by the Company on Corporate Social Responsibility (CSR) related activities during the year: 101.46 crore. b) Total [Note H(II)] 57.25 Others AC drives, DC drives, programmable logic controllers Chemical plant & machinery, including pharmaceutical, dyestuff, distillery, brewery, solvent extraction plants, evaporator and crystallizer plants and pollution control equipment in aggregate 0.82 6.50 Low voltage and medium voltage switchboards and panels 65.69 100.41 Plant & equipment and modules for nuclear power projects, heavy water projects, nuclear and space research and allied projects, including items for chemical, oil & gas, etc. industries Casting products Rubber processing machinery and accessories 16.62 29.76 20.51 11.20 21.48 Nuclear purpose equipment, de-aerators, ultra high pressure vessels including multiwall vessels, high pressure heat exchangers and high pressure heaters in aggregate Ship auxiliaries and components of mechanised sailing vessels a. Raw materials, components, construction materials, stores, spares and loose tools at lower of weighted average cost or net realisable value. However, these items are considered to be realisable at cost if the finished products in which they will be used, are expected to be sold at or above cost. Meters and protection systems b. Expenses (net of tax) incurred on issue of debentures/bonds Manufacturing work-in-progress at lower of weighted average cost including related overheads or net realisable value. In some cases, manufacturing work-in-progress are valued at lower of specifically identifiable cost or net realisable value. In the case of qualifying assets, cost also includes applicable borrowing costs vide policy relating to borrowing costs. Notes forming part of the Accounts (contd.) NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) e. Forward contracts, other than those entered into to hedge foreign currency risk on unexecuted firm commitments or highly probable forecast transactions, are treated as foreign currency transactions and accounted accordingly as per Accounting Standard (AS) 11 "The Effects of Changes in Foreign Exchange Rates". Exchange differences arising on such contracts are recognised in the period in which they arise. f. g. Gains and losses arising on account of roll over/cancellation of such forward contracts are recognised as income /expense of the period in which such roll over/cancellation takes place. All the other derivative contracts, including forward contracts entered into to hedge foreign currency risks on unexecuted firm commitments and highly probable forecast transactions, are recognised in the financial statements at fair value as on the Balance Sheet date, in pursuance of the announcement of the Institute of Chartered Accountants of India (ICAI) dated March 29, 2008 on accounting of derivatives. In addition, the derivative arrangements embedded in the contracts entered in the course of business are accounted separately if the economic characteristics and risks of the embedded derivatives are not closely related to economic characteristics and risks of the host contract. 307 The Company has adopted Accounting Standard (AS) 30 "Financial Instruments: Recognition and Measurement" for accounting of such derivative contracts, not covered under Accounting Standard (AS) 11 "The Effects of Changes in Foreign Exchange Rates", as mandated by the ICAI in the aforesaid announcement. The premium paid/received on a foreign currency forward contract is accounted as expense/income over the life of the contract. 19. Segment accounting a. b. Segment accounting policies Segment accounting policies are in line with the accounting policies of the Company. In addition, the following specific accounting policies have been followed for segment reporting: i. Accordingly, the resultant gains or losses on fair valuation/settlement of the derivative contracts (including embedded derivatives) covered under Accounting Standard (AS) 30 "Financial Instruments: Recognition and Measurement" are recognised in the Statement of Profit and Loss or Balance Sheet as the case may be after applying the test of hedge effectiveness. Where the hedge in respect of off-balance sheet items is effective, the gains or losses are recognised in the "hedging reserve" which forms part of "reserves and surplus" in the Balance Sheet. The amount recognised in the "hedging reserve" is transferred to the Statement of Profit and Loss in the period in which the underlying hedged item affects the Statement of Profit and Loss. Gains or losses in respect of ineffective hedges are recognised in the Statement of Profit and Loss in the period in which such gains or losses are incurred. ii. The amount recognised as expense in the Statement of Profit and Loss on CSR related activities is 119.89 crore, which comprises of: iv. Net revenues at the average rate for the year. The reporting currency of the Company is Indian rupee. Foreign currency transactions are recorded on initial recognition in the reporting currency, using the exchange rate at the date of the transaction. At each Balance Sheet date, foreign currency monetary items are reported using the closing rate. Non-monetary items, carried at historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction. Exchange differences that arise on settlement of monetary items or on reporting of monetary items at each Balance Sheet date at the closing rate are: i. b. the reversal of impairment loss recognised in previous periods, if any. ii. Financial statements of foreign operations comprising jobs contracted on or after April 1, 2004, are treated as integral operations and translated as in the same manner as foreign currency transactions, as described above. Exchange differences arising on such translation are recognised as income or expense of the period in which they arise. adjusted in the cost of fixed assets specifically financed by the borrowings contracted up to March 31, 2004 to which the exchange differences relate iii. recognised as income or expense in the period in which they arise, in cases other than (i) and (ii) supra. Financial statements of foreign operations comprising jobs contracted prior to April 1, 2004, are translated as follows: i. Closing inventories at rates prevailing at the end of the year. ii. Fixed assets as at April 1, 1991 at rates prevailing at the end of the year in which the additions were made. Subsequent additions are at rates prevailing on the dates of the additions. Depreciation is accounted at the same rate at which the assets are translated. d. iii. Other assets and liabilities at rates prevailing at the end of the year. adjusted in the cost of fixed assets specifically financed by borrowings contracted between the period April 1, 2004 to March 31, 2007 and to which the exchange differences relate, provided the assets are acquired from outside India iii. iv. V. Expenses incurred on issue of shares i. The following expenses are written off against securities premium account: b. ii. The discount allowed, if any, in respect of shares allotted pursuant to Stock Options Scheme NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) Notes forming part of the Accounts (contd.) ii. 306 Securities premium includes: a. 15. Securities premium account Cash and bank balances also include fixed deposits, margin money deposits, earmarked balances with banks and other bank balances which have restrictions on repatriation. Short term and liquid investments being not free from more than insignificant risk of change in value, are not included as part of cash and cash equivalents. 14. Cash and bank balances d. Completed property/work-in-progress (including land) in respect of property development activity at lower of specifically identifiable cost or net realisable value. Finished goods and stock-in-trade (in respect of goods acquired for trading) at lower of weighted average cost or net realisable value. Cost includes related overheads and excise duty paid/payable on such goods. i. The difference between the market value and the consideration received in respect of shares issued pursuant to Stock Appreciation Rights Scheme LARSEN & TOUBRO iii. Premium (net of tax) on redemption of debentures/bonds 16. Borrowing Costs vi. Segment revenue includes sales and other operational revenue directly identifiable with/allocable to the segment including inter segment revenue. Expenses that are directly identifiable with/allocable to segments are considered for determining the segment result. Expenses which relate to the Company as a whole and not allocable to segments are included under "unallocable corporate expenditure". Income which relates to the Company as a whole and not allocable to segments is included in "unallocable corporate income". Segment result includes margins on inter-segment capital jobs, which are reduced in arriving at the profit before tax of the Company. Segment assets and liabilities include those directly identifiable with the respective segments. Unallocable corporate assets and liabilities represent the assets and liabilities that relate to the Company as a whole and not allocable to any segment. Segment non-cash expenses forming part of segment expenses includes the intrinsic value of the employee stock options which is accounted as employee compensation cost [see Note R(17)] and is allocated to the segment. Inter-segment transfer pricing Segment revenue resulting from transactions with other business segments is accounted on the basis of transfer price agreed between the segments. Such transfer prices are either determined to yield a desired margin or agreed on a negotiated basis. 308 C. b. a. 18. Foreign currency transactions, foreign operations, forward contracts and derivatives In respect of stock options granted pursuant to the Company's Stock Options Scheme, the intrinsic value of the options (excess of market price of the share over the exercise price of the option) is treated as discount and accounted as employee compensation cost over the vesting period. The amount recognised as expense each year is arrived at based on the number of grants expected to vest. If a grant lapses after the vesting period, the cumulative discount recognised as expense in respect of such grant is transferred to the general reserve. 17. Employee stock ownership schemes Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalised/inventorised as part of cost of such asset till such time the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognised as an expense in the period in which they are incurred. Borrowing costs include interest, commitment charges, amortisation of ancillary costs, amortisation of discounts/premium related to borrowings, finance charges in respect of assets acquired on finance lease and exchange differences arising from foreign currency borrowings, to the extent they are regarded as an adjustment to interest costs. C. * crore the provision for impairment loss, if any; and Sr. vi. V. LARSEN & TOUBRO iv. The Company has intention to complete the intangible asset and use or sell it The Company has ability to use or sell the intangible asset iii. The manner in which the probable future economic benefits will be generated including the existence of a market for output of the intangible asset or intangible asset itself or if it is to be used internally, the usefulness of intangible assets The availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset and ii. NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) Notes forming part of the Accounts (contd.) 302 i. The technical feasibility of completing the intangible asset so that it will be available for use or sale Development expenditure on new products is capitalised as intangible asset, if all of the following can be demonstrated: Revenue expenditure on research is expensed under respective heads of account in the period in which it is incurred. 6. b. The Company has ability to measure the expenditure attributable to the intangible asset during its development reliably. The development expenditure capitalised as intangible asset is amortised over its useful life. Employee benefits Long term employee benefits: C. settlement occurs. Past service cost is recognised as expense on a straight-line basis over the average period until the benefits become vested. Gains or losses on the curtailment or settlement of any defined benefit plan are recognised when the curtailment or In case of funded plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans to recognise the obligation on a net basis. The interest element in the actuarial valuation of defined benefit plans, which comprises the implicit interest cost and the impact of changes in discount rate, is classified under finance cost. The balance charge is recognised as employee benefit expenses in the Statement of Profit and Loss. Other development costs that do not meet above criteria are expensed in the period in which they are incurred. Defined benefit plans: The employees' gratuity fund schemes, post-retirement medical care scheme, pension scheme and provident fund scheme managed by trust are the Company's defined benefit plans. The present value of the obligation under such defined benefit plans is determined based on actuarial valuation using the Projected Unit Credit Method. The obligation is measured at the present value of the estimated future cash flows. The discount rate used for determining the present value of the obligation under defined benefit plans, is based on the market yield on government securities of a maturity period equivalent to the weighted average maturity profile of the related obligations at the Balance Sheet date. Actuarial gains and losses are recognised immediately in the Statement of Profit and Loss. ii. i. Post-employment benefits: All employee benefits falling due wholly within twelve months of rendering the service are classified as short term employee benefits. The benefits like salaries, wages, short term compensated absences etc. and the expected cost of bonus, ex-gratia are recognised in the period in which the employee renders the related service. b. a. Short term employee benefits: Defined contribution plans: The Company's superannuation scheme, state governed provident fund scheme, employee state insurance scheme and employee pension scheme are defined contribution plans. The contribution paid/payable under the schemes is recognised during the period in which the employee renders the related service. The obligation for long term employee benefits such as long term compensated absences, long service award etc. is recognised in the similar manner as in the case of defined benefit plans as mentioned in (b)(ii) supra. a. On certain occasions, the size, type or incidence of an item of income or expense, pertaining to the ordinary activities of the Company, is such that its disclosure improves an understanding of the performance of the Company. Such income or expense is classified as an exceptional item and accordingly disclosed in the notes to accounts. Revenues from construction/project related activity and contracts executed in joint ventures under work-sharing arrangement [being jointly controlled operations, in terms of Accounting Standard (AS) 27 "Financial Reporting of Interests in Joint Ventures"], is recognised on the same basis as similar contracts independently executed by the Company. Revenue from contracts for the rendering of engineering design services and other services which are directly related to the construction of an asset is recognised on similar basis as stated in (iv) supra. Expected loss, if any, on the construction/project related activity is recognised as an expense in the period in which it is foreseen, irrespective of the stage of completion of the contract. While determining the amount of foreseeable loss, all elements of costs and related incidental income not included in contract revenue are taken into consideration. Government grants in the nature of subsidy related to customer contracts are recognised as revenue from operations in the Statement of Profit and Loss, on a prudent basis, in proportion to work completed when there is reasonable assurance that the conditions for the grant of subsidy will be fulfilled. vii. vi. Revenue from service related activities is recognised using the proportionate completion method. V. Notes forming part of the Accounts (contd.) 301 Fixed price contracts: Contract revenue is recognised only to the extent of cost incurred till such time the outcome of the job cannot be ascertained reliably. When the outcome of the contract is ascertained reliably, contract revenue is recognised at cost of work performed on the contract plus proportionate margin, using the percentage of completion method. Percentage of completion is the proportion of cost of work performed to-date, to the total estimated contract costs. b. a. Cost plus contracts: Contract revenue is determined by adding the aggregate cost plus proportionate margin as agreed with the customer. Revenue from construction/project related activity and contracts for supply/commissioning of complex plant & equipment is recognised as follows: NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) Research and development viii. Commission income is recognised as and when the terms of the contract are fulfilled. X. Income or expenses that arise from events or transactions that are clearly distinct from the ordinary activities of the Company are classified as extraordinary items. Specific disclosure of such events/transactions is made in the financial statements. Similarly, any external event beyond the control of the Company, significantly impacting income or expense, is also treated as extraordinary item and disclosed as such. d. Other items of income are accounted as and when the right to receive arises. Extraordinary and exceptional Items Other Government grants, which are revenue in nature and are towards compensation for the related costs, are recognised as income in the Statement of Profit and Loss in the period in which the matching costs are incurred. C. 5. 4. ix. Revenue from engineering and service fees is recognised as per the terms of the contract. Dividend income is accounted in the period in which the right to receive the same is established. a. Interest income is accrued at applicable interest rate. Other Income B. Other operational revenue represents income earned from the activities incidental to the business and is recognised when the right to receive the income is established as per the terms of the contract. b. Other operational revenue Profit/loss on contracts executed by Integrated Joint Ventures under profit-sharing arrangement [being Jointly Controlled Entities, in terms of Accounting Standard (AS) 27 "Financial Reporting of Interests in Joint Ventures"] is accounted as and when the same is determined by the joint venture. Revenue from services rendered to such joint ventures is accounted on accrual basis. b. The costs incurred on property development activities are carried as "Inventories" till such time the outcome of the project cannot be estimated reliably and all the aforesaid conditions are fulfilled. When the outcome of the project can be ascertained reliably and all the aforesaid conditions are fulfilled, revenue from property development activity is recognised at cost incurred plus proportionate margin, using percentage of completion method. Percentage of completion is determined based on the proportion of actual cost incurred to the total estimated cost of the project. For this purpose, actual cost includes cost of land and developmental rights but excludes borrowing cost. Expected loss, if any, on the project is recognised as an expense in the period in which it is foreseen, irrespective of the stage of completion of the contract. d. Termination benefits such as compensation under Voluntary Retirement cum Pension Scheme are recognised as expense in the period in which they are incurred. ii. Lease charge comprising statutory depreciation and lease equalisation charge is provided for assets given on lease over the primary period of the lease equal to recovery of net investment in the lease. Accordingly, while the statutory depreciation on such assets is provided for on straight line method as per Schedule II to the Companies Act, 2013, the difference is adjusted through lease equalisation and lease adjustment account. Lease transactions entered into prior to April 1, 2001: i. Leased assets: b. Lease transactions entered into on or after April 1, 2001: Depreciation charge for impaired assets is adjusted in future periods in such a manner that the revised carrying amount of the asset is allocated over its remaining useful life. iii. Depreciation for additions to/deductions from, owned assets is calculated pro rata. Extra shift depreciation is provided on a location basis. Where cost of a part of the asset ("asset component") is significant to total cost of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part is determined separately and such asset component is depreciated over its separate useful life. In respect of asset components, whose useful life has expired as on April 1, 2015, the carrying amount as on April 1, 2015 has been charged to the retained earnings as on April 1, 2015. Depreciation on assets carried at historical costs is provided on straight line method on the basis of useful life as specified in Schedule II to the Companies Act, 2013 except in respect of certain assets where the useful life was determined by technical evaluation. The carrying amount of the assets as on April 1, 2014 is depreciated over the remaining useful life. Where the useful life of the asset has expired, the carrying amount as on April 1, 2014 has been charged to the retained earnings as on April 1, 2014. ii. Assets carried at historical cost: NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) Notes forming part of the Accounts (contd.) iv. LARSEN & TOUBRO Assets acquired under finance leases are depreciated on a straight line basis over the lease term. Where there is reasonable certainty that the Company shall obtain ownership of the assets at the end of the lease term, such assets are depreciated based on the useful life prescribed under Schedule II to the Companies Act, 2013 or based on the useful life adopted by the Company for similar assets. Land acquired under long term lease is classified under "tangible assets" and is depreciated over the period of lease. 10. Intangible assets and amortisation As at each Balance Sheet date, the carrying amount of assets is tested for impairment so as to determine: a. 2014-15 11. Impairment of assets NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) Notes forming part of the Accounts (contd.) iii. Leasehold land 305 Administrative and other general overhead expenses that are specifically attributable to acquisition of intangible assets are allocated and capitalised as a part of the cost of the intangible assets. Development costs for new products: over a period of five years. C. b. Technical know-how: over a period of six years in case of foreign technology and three years in the case of indigenous technology. a. Specialised software: over a period of six years. Intangible assets are stated at original cost net of tax/duty credits availed, if any, less accumulated amortisation and cumulative impairment. Intangible assets are recognised when it is probable that the future economic benefits that are attributable to the asset will flow to the enterprise and the cost of the asset can be measured reliably. Intangible assets are amortised over their useful life as follows: Intangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as "intangible assets under development". Amortisation on impaired assets is provided by adjusting the amortisation charges in the remaining periods so as to allocate the asset's revised carrying amount over its remaining useful life. Termination benefits: With effect from April 1, 2015 the difference between depreciation provided on revalued amount and on historical cost is transferred from revaluation reserve to general reserve. 304 Assets leased out are stated at original cost. Lease equalisation adjustment is the difference between capital recovery included in the lease rentals and depreciation provided in the books. Lease transactions entered into prior to April 1, 2001: a. 9. The determination of whether an agreement is, or contains, a lease is based on the substance of the agreement at the date of inception. Leases Lease rentals in respect of assets acquired under leases are charged to Statement of Profit and Loss. Tangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as "capital work-in-progress". (Also refer to policy on leases, borrowing costs, impairment of assets and foreign currency transactions infra.) Administrative and other general overhead expenses that are specifically attributable to construction or acquisition of fixed assets or bringing the fixed assets to working condition are allocated and capitalised as a part of the cost of the fixed assets. Tangible fixed assets are stated at original cost net of tax/duty credits availed, if any, less accumulated depreciation and cumulative impairment and those which were revalued as on October 1,1984 are stated at the values determined by the valuers less accumulated depreciation and cumulative impairment. Assets acquired on hire purchase basis are stated at their cash values. Specific know-how fees paid, if any, relating to plant & equipment is treated as part of cost thereof. 8. 7. Tangible fixed assets Notes forming part of the Accounts (contd.) 303 Own manufactured assets are capitalised at cost including an appropriate share of overheads. Depreciation on assets carried at revalued amount i.e., values determined by valuers is provided on straight line method on the basis of useful life as specified in Schedule II to the Companies Act, 2013 except in respect of certain assets where the useful life was determined by technical evaluation. b. Finance leases: Revalued assets: i. a. Owned assets: Depreciation (Also refer to policy on depreciation, infra) term. Lease transactions entered into on or after April 1, 2001: ii. Assets leased out under operating leases are capitalised. Rental income is recognised on accrual basis over the lease Initial direct costs relating to assets given on finance leases are charged to Statement of Profit and Loss. Operating leases: Assets given under a finance lease are recognised as a receivable at an amount equal to the net investment in the lease. Lease income is recognised over the period of the lease so as to yield a constant rate of return on the net investment in the lease. Assets acquired under leases where the Company has substantially all the risks and rewards of ownership are classified as finance leases. Such assets are capitalised at the inception of the lease at the lower of the fair value or the present value of minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the outstanding liability for each period. iii. ii. i. i. Assets acquired on leases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals are charged to the Statement of Profit and Loss on accrual basis. Atleast 10% of the total revenue as per the agreements of sale or any other legally enforceable documents are realised at the reporting date in respect of each of the contracts and it is reasonable to expect that the parties to such contracts will comply with the payment terms as defined in the contracts. NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) a reasonable level of development is treated as achieved only if the cost incurred (excluding cost of land/ developmental rights and borrowing cost) is atleast 25% of the total of such cost; NOTE [Q] (contd.) Notes forming part of the Accounts (contd.) 299 76.54 9.39 67.15 Q(27) During the year, the Company transferred at book value the equity investments held by it: 119.89 115.33 Total 15.76 15.76 14.31 0.22 4.56 14.09 a) to facilitate the merger with wholly owned subsidiary company viz. L&T Capital Company Limited: (₹) Book value Face value per share No. of shares L&T Solar Limited 3 b) L&T Powergen Limited L&T Natural Resources Limited 1 no. Name of the company Sr. Details of investments 2 (crore) 47.64 40.68 cash paid in paid in Total Yet to be In Cash cash Total In Cash 2015-16 Atleast 25% of the saleable project area is secured by contracts or agreements with buyers; Disclosed under no. Particulars Yet to be 6.96 i) Note O 99.72 4.01 95.71 Note O For purposes other than (i) above ii) Construction/acquisition of assets Profit and Loss 13.14 2.43 10.71 5.86 0.33 5.53 charged to the Statement of 50,000 Note N 50,000 3. Revenue recognition NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) Notes forming part of the Accounts (contd.) LARSEN & TOUBRO 300 The Balance Sheet and the Statement of Profit and Loss are prepared and presented in the format prescribed in the Schedule III to the Companies Act, 2013 ("the Act"). The Cash Flow Statement has been prepared and presented as per the requirements of Accounting Standard (AS) 3 "Cash Flow Statements". The disclosure requirements with respect to items in the Balance Sheet and Statement of Profit and Loss, as prescribed in the Schedule III to the Act, are presented by way of notes forming part of accounts along with the other notes required to be disclosed under the notified Accounting Standards and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Revenue is recognised based on nature of activity when consideration can be reasonably measured and there exists reasonable certainty of its recovery. Presentation of financial statements The Company maintains its accounts on accrual basis following the historical cost convention, except for the revaluation of certain fixed assets, in accordance with generally accepted accounting principles ["GAAP"] in compliance with the provisions of the Companies Act, 2013 and the Accounting Standards as specified in the Companies (Accounting Standards) Rules, 2006 read with Rule 7(1) of the Companies (Accounts) Rules, 2014 issued by the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. Further, the guidance notes/announcements issued by the Institute of Chartered Accountants of India (ICAI) are also considered, wherever applicable except to the extent where compliance with other statutory promulgations override the same requiring a different treatment. 2. Basis of accounting 1. NOTE [R] SIGNIFICANT ACCOUNTING POLICIES Q(28) Figures for the previous year have been regrouped/reclassified wherever necessary. The preparation of financial statements in conformity with GAAP requires that the management of the Company makes estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. Examples of such estimates include the useful lives of tangible and intangible fixed assets, allowance for doubtful debts/advances, future obligations in respect of retirement benefit plans, etc. difference, if any, between the actual results and estimates is recognised in the period in which the results are known. A. Revenue from operations a. Sales & Service C. d. b. 50,000 When the stage of completion of the project reaches a reasonable level of development i.e., contract costs for work performed bears a reasonable proportion to the estimated total contract costs. For this purpose, iv. All critical approvals necessary for commencement of the project have been obtained; a. Revenue from those property development activities which have the same economic substance as that of a construction contract is recognised based on the 'Percentage of completion method' (POC) when the outcome of a real estate project can be estimated reliably upon fulfillment of all the following conditions: Revenue from property development activity which are in substance similar to delivery of goods is recognised when all significant risks and rewards of ownership in the land and/or building are transferred to the customer and a reasonable expectation of collection of the sale consideration from the customer exists. Revenue from sale of manufactured and traded goods is recognised when the substantial risks and rewards of ownership are transferred to the buyer under the terms of the contract. Sales and service include excise duty and adjustments made towards liquidated damages and price variation, wherever applicable. Escalation and other claims, which are not ascertainable/acknowledged by customers, are not taken into account. iii. ii. i. 21.54 10 Amounts in the financial statements are presented in Indian Rupees in crore [1 crore = 10 million] rounded off to two decimal places in line with the requirements of Schedule III. Per share data are presented in Indian Rupees to two decimals places. 2,15,43,340 Book value (crore) (₹) no. Face value per share No. of shares Sr. 1 Details of investments 0.05 10 0.05 10 0.05 10 to a wholly owned subsidiary company viz. L&T Hydrocarbon Engineering Limited: L&T Sapura Offshore Private Limited Name of the company 1 6,000 Face value per share No. of shares PNG Tollway Limited no. Name of the company (₹) Book value (crore) Details of investments to a subsidiary company viz. L&T Infrastructure Development Projects Limited: c) 0.01 10 Sr. 574.38 D(I) Short term borrowings Current liabilities 70858.81 87409.02 411.15 Other long term liabilities C(III) Long term provisions 1276.11 1615.98 C(II) 539.56 17007.98 788.32 16729.39 166.33 of fixed assets Q(13) 29224.64 151.86 Other current liabilities Short term provisions Due to micro enterprises and small enterprises D(III) Trade payables TOTAL 127.23 8304.17 10544.91 D(II) Current maturities of long term borrowings 210.50 Q(20) Current maturities of deferred payment liabilities for acquisition Deferred tax liabilities (net) (Firm Registration No. 109982W) 10839.86 crore As at 31-3-2015 As at 31-3-2016 crore Note Consolidated Balance Sheet as at March 31, 2016 315 (Membership No. 38332) crore (Partner) Chartered Accountants For SHARP & TANNAN MUMBAI, May 25, 2016 (Membership No. 70928) ASSETS: (Partner) P. R. RAMESH FIRDOSH D. BUCHIA 2931.58 crore Shareholders' funds Q(20) Deferred payment liabilities for acquisition of fixed assets 65537.18 73753.71 C(I) Long term borrowings Non-current liabilities EQUITY AND LIABILITIES: 40909.07 4998.62 Minority interest 185.91 40723.16 186.30 43805.43 B Reserves and surplus A Share capital 43991.73 6768.78 Non-current assets 5756.21 Tangible assets Inventories 7965.32 8105.67 H(I) Current investments Current assets 724.20 3525.78 43932.02 99.31 369.41 1646.80 460.36 G(III) Other non-current assets 101.58 G(II) Cash and cash equivalents 53441.03 Trade receivables H(II) 5361.95 6508.40 H(VI) (Firm Registration No. 117366W/W-100018) 11434.85 12368.41 H(V)(a) Short term loans and advances towards financing activities Other current assets 7679.22 G(l)(b) 9383.19 Short term loans and advances 5901.59 H(IV) Cash and cash equivalents 30089.37 35989.94 H(III) H(V) Long term loans and advances towards financing activities 4517.99 G(I)(a) Capital work-in-progress 18810.53 13712.53 23724.84 E(II) Intangible assets 17385.08 E(I) E(I) 77039.13 193805.63 89355.19 3543.81 3690.04 D(V) 24497.78 23684.89 28510.79 D(IV) 227524.72 Fixed assets 6486.21 Intangible assets under development Long term loans and advances 802.96 Q(13) Deferred tax assets (net) 1974.36 F Non-current investments 4883.03 2215.00 E(III) Goodwill on consolidation 47515.84 58599.85 10109.75 11003.72 E(II) 2171.67 Chartered Accountants Jointly controlled entities Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting insofar as it relates to 1 subsidiary and 2 associates incorporated in India, whose financial statements / financial information are unaudited and our opinion on the adequacy and operating effectiveness of the internal financial controls over financial reporting of the Group is not affected as these financial statements / financial information are not material to the Group. d. Other non-cancellable commitments, if any, to the extent they are considered material and relevant in the opinion of management. Funding related commitment to subsidiary, associate and joint venture companies and, C. b. Uncalled liability on shares and other investments partly paid, a. Commitments are future liabilities for contractual expenditure. Commitments are classified and disclosed as follows: Estimated amount of contracts remaining to be executed on capital account and not provided for, 23. Commitments Other commitments related to sales/procurements made in the normal course of business are not disclosed to avoid excessive details. NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) 309 Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date. a possible obligation arising from past events where the probability of outflow of resources is not remote. Contingent assets are neither recognised, nor disclosed. a present obligation arising from past events, when no reliable estimate is possible a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation C. b. Notes forming part of the Accounts (contd.) a. 24. Operating cycle for current and non-current classification 25. Cash Flow Statement 27th - 32nd Floor, Senapati Bapat Marg Elphinstone Road (West) Indiabulls Finance Centre, Tower 3 Chartered Accountants DELOITTE HASKINS & SELLS LLP Consolidated Financial Statements 2015-16 311 LARSEN & TOUBRO Operating cycle for the business activities of the Company covers the duration of the specific project/contract/product line/service including the defect liability period, wherever applicable and extends up to the realisation of receivables (including retention monies) within the agreed credit period normally applicable to the respective lines of business. NOTES Cash and cash equivalents (including bank balances) are reflected as such in the Cash Flow Statement. Those cash and cash equivalents which are not available for general use as on the date of Balance Sheet are also included under this category with a specific disclosure. iii. items of income or expense associated with investing or financing cash flows. any deferrals or accruals of past or future operating cash receipts or payments and, transactions of a non-cash nature, ii. i. Cash flow statement is prepared segregating the cash flows from operating, investing and financing activities. Cash flow from operating activities is reported using indirect method. Under the indirect method, the net profit is adjusted for the effects of: 310 Mumbai 400013. Contingent liability is disclosed in case of the amount of the obligation can be reliably estimated. Share of the assets, according to nature of the assets, and share of the liabilities are shown as part of gross block and liabilities respectively. Share of expenses incurred on maintenance of the assets is accounted as expense. Company's share of revenues, common expenses, assets and liabilities are included in revenues, expenses, assets and liabilities respectively. Accounting treatment Jointly controlled assets Type of joint venture Jointly controlled operations Interests in joint ventures are accounted as follows: 21. Accounting for interests in Joint Ventures Monetary benefits, if any, from use of the assets are reflected as income. Other deferred tax assets are recognised and carried forward to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. Deferred tax is recognised on timing differences between the income accounted in financial statements and the taxable income for the year, and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date. Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act 1961, and based on the expected outcome of assessments/appeals. 20. Taxes on Income NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) Notes forming part of the Accounts (contd.) LARSEN & TOUBRO 28344.17 Deferred tax assets relating to unabsorbed depreciation/business losses/losses under the head "capital gains" are recognised and carried forward to the extent there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. Reimbursement expected in respect of expenditure required to settle a provision is recognised only when it is virtually certain that the reimbursement will be received. a. Integrated joint ventures: C. a probable outflow of resources is expected to settle the obligation and b. a. the Company has a present obligation as a result of a past event Provisions are recognised for liabilities that can be measured only by using a substantial degree of estimation, if 22. Provisions, contingent liabilities and contingent assets Joint venture interests accounted as above, other than investments in incorporated jointly controlled entities, are included in the segments to which they relate. i. Investment in such joint ventures is carried at cost after providing for any diminution in value which is other than temporary in nature. i. b. Income on investments in incorporated jointly controlled entities is recognised when the right to receive the same is established. Incorporated jointly controlled entities: Investments in integrated joint ventures are carried at cost net of Company's share in recognised profits or losses. Company's share in profits or losses of integrated joint ventures is accounted on determination of the profits or losses by the joint ventures. ii. ii. For DELOITTE HASKINS & SELLS LLP SHARP & TANNAN Ravindra Annexe (Membership No. 38332) FIRDOSH D. BUCHIA (Partner) (Firm Registration No. 109982W) Chartered Accountants For SHARP & TANNAN (Membership No. 70928) (Partner) MUMBAI, May 25, 2016 P. R. RAMESH Chartered Accountants For DELOITTE HASKINS & SELLS LLP There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Holding Company and its subsidiary companies, associate companies and jointly controlled entities incorporated in India. Provision has been made in the consolidated financial statements, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - refer notes C(II), D(IV), Q(7)(a) to the consolidated financial statements; and iii. ii. 313 (Firm Registration No. 117366W/W-100018) of the Group, its associates and jointly controlled entities - refer notes I, Q(15)(VI), Q(16) and Q(21) to the consolidated financial statements; ANNEXURE "A" TO THE INDEPENDENT AUDITORS' REPORT (Referred to in paragraph "f" under 'Report on Other Legal and Regulatory Requirements' of our report of even date) Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act") Management's Responsibility for Internal Financial Controls Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting insofar as it relates to 24 subsidiaries and 3 associates incorporated in India, is based on the corresponding reports of the other auditors of such companies incorporated in India. Other Matters In our opinion to the best of our information and according to the explanations given to us, the Holding Company, its subsidiaries, its associates and jointly controlled entities incorporated in India, have, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. Opinion Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Inherent Limitations of Internal Financial Controls Over Financial Reporting A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. In conjunction with our audit of the consolidated financial statements of the Company as of and for the year ended March 31, 2016, we have audited the internal financial controls over financial reporting of Larsen & Toubro Limited (hereinafter referred to as the "Holding Company") and its subsidiaries (the Holding Company and its subsidiaries together referred to as "the Group"), its associates and jointly controlled entities incorporated in India, as of that date. Meaning of Internal Financial Controls Over Financial Reporting LARSEN & TOUBRO 314 We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditors of the subsidiaries, associates and joint controlled entities, incorporated in India, in terms of their reports referred to in the Other Matters paragraph below, Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors' judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the Institute of Chartered Accountants of India and the Standards on Auditing, prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Auditors' Responsibility The respective Board of Directors of the Holding Company, its subsidiaries, its associates and jointly controlled entities incorporated in India, are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Group considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the respective group's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013. is sufficient and appropriate to provide a basis for our audit opinion on the Company's internal financial controls system over financial reporting. Chartered Accountants The consolidated financial statements disclose the impact of pending litigations on the consolidated financial position With respect to the other matters to be included in the Auditors' Report in accordance with Rule 11 of the Companies (Audit and Auditor's) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: LARSEN & TOUBRO 312 In our opinion and to the best of our information and according to the explanations given to us, the aforesaid consolidated financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the Opinion We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in sub-paragraph (a) of the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the consolidated financial statements. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the consolidated financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Holding Company's preparation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Holding Company's Board of Directors, as well as evaluating the overall presentation of the consolidated financial statements. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. accounting principles generally accepted in India, of the consolidated state of affairs of the Group, its associates and jointly controlled entities as at 31st March, 2016, and their consolidated profit and their consolidated cash flows for the year ended on that date. Other Matters Our responsibility is to express an opinion on these consolidated financial statements based on our audit. While conducting the audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. The Holding Company's Board of Directors is responsible for the preparation of these consolidated financial statements in terms of the requirements of the Companies Act, 2013 (hereinafter referred to as the "Act") that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Group including its associates and jointly controlled entities in accordance with the accounting principles generally accepted in India, including the Accounting Standards prescribed under Section 133 of the Act, as applicable. The respective Boards of Directors of the companies included in the Group and of its associates and jointly controlled entities are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated financial statements by the Directors of the Holding Company, as aforesaid. Management's Responsibility for the Consolidated Financial Statements We have audited the accompanying consolidated financial statements of LARSEN & TOUBRO LIMITED (hereinafter referred to as the "Holding Company") and its subsidiaries (the Holding Company and its subsidiaries together referred to as the "Group"), its associates and jointly controlled entities, comprising of the Consolidated Balance Sheet as at 31st March, 2016, the Consolidated Statement of Profit and Loss, the Consolidated Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as the "consolidated financial statements"). Report on the Consolidated Financial Statements TO THE MEMBERS OF LARSEN & TOUBRO LIMITED INDEPENDENT AUDITORS' REPORT 194, Churchgate Reclamation Dinshaw Vachha Road Mumbai 400 020. Auditors' Responsibility i. (a) The consolidated financial statements include the financial statements of 66 subsidiaries, and 9 jointly controlled entities, whose financial statements reflect total assets of 39,471.90 crore as at 31st March, 2016, total revenues of 14,391.76 crore and net cash flows amounting to ₹746.23 crore for the year ended on that date which have not been audited by us. The consolidated financial statements also include the Group's share of net profit of 7.93 crore for the year ended 31st March, 2016, as considered in the consolidated financial statements, in respect of 7 associates, whose financial statements have not been audited by us. These financial statements have been audited by other auditors whose reports have been furnished to us by the Management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, jointly controlled entities and associates, is based solely on the reports of the other auditors. Our opinion on the consolidated financial statements, and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and the financial statements / financial information certified by the Management. With respect to the adequacy of the internal financial controls over financial reporting and the operating effectiveness of such controls, refer to our Report in "Annexure A", which is based on the auditors' reports of the Holding Company, subsidiary companies, associate companies and jointly controlled entities incorporated in India. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Holding Company's, subsidiary companies', associate companies', jointly controlled entities' incorporated in India, internal financial controls over financial reporting. On the basis of the written representations received from the directors of the Holding Company as on 31st March, 2016, taken on record by the Board of Directors of the Holding Company and the reports of the statutory auditors of its subsidiary companies, associate companies and jointly controlled entities incorporated in India, none of the directors of the Group companies, its associate companies and jointly controlled entities incorporated in India is disqualified as on 31st March, 2016, from being appointed as a director in terms of Section 164 (2) of the Act. In our opinion, the aforesaid consolidated financial statements comply with the Accounting Standards prescribed under Section 133 of the Act, as applicable. The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss, and the Consolidated Cash Flow Statement dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated financial statements. In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated financial statements have been kept so far as it appears from our examination of those books and the reports of the other auditors. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated financial statements. g) (b) The consolidated financial statements include the financial statements / financial information of 5 subsidiaries and 8 jointly controlled entities, whose financial statements / financial information reflect total assets of 766.86 crore as at 31st March, 2016, total revenues of 437.92 crore and net cash flows amounting to 148.54 crore for the year ended on that date which have not been audited by us. The consolidated financial statements also include the Group's share of net loss of 0.27 crore for the year ended 31st March, 2016, as considered in the consolidated financial statements, in respect of 4 associates, whose financial statements / financial information have not been audited by us. These financial statements / financial information are unaudited and have been furnished to us by the Management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, jointly controlled entities and associates, is based solely on such unaudited financial statements / financial information. In our opinion and according to the information and explanations given to us by the Management, these financial statements / financial information are not material to the Group. f) d) c) b) a) 1. As required by Section 143(3) of the Act, we report, to the extent applicable, that: Report on Other Legal and Regulatory Requirements e) 24343.90 Due to others 105454.92 227524.72 Exchange difference on items grouped under financing/investing activities 2622.95 (79.56) (198.86) 2755.99 Depreciation (including obsolescence), amortisation and impairment Dividend received Adjustments for: 6869.54 crore crore 2015-16 7728.55 Profit before tax (excluding minority interest, exceptional and extraordinary items) A. Cash flow from operating activities: 2014-15 194.31 51.92 Effect of exchange rate changes on cash and cash equivalents (20.07) (1381.76) (276.69) (Profit)/loss on sale of stake in subsidiary and joint venture companies of Developmental Projects and Realty Segments (444.23) (386.52) (Profit)/loss on sale of investments (net) (19.58) Consolidated Cash Flow Statement for the year ended March 31, 2016 (62.79) (404.74) (418.24) Interest income 2840.05 3041.22 Interest expense 39.06 (Profit)/loss on sale of fixed assets (net) 317 N.HARIHARAN Company Secretary M. No. A3471 Mumbai, May 25, 2016 SUNITA SHARMA SUSHOBHAN SARKER (DIN 00088276) (DIN 00041197) VIKRAM SINGH MEHTA Chief Financial Officer & Whole-time Director (DIN 00101004) (DIN 00019798) M.M.CHITALE Group Executive Chairman (DIN 00001514) (DIN 02949529) A. M. NAIK OR 2.00 2.00 50.98 54.44 51.33 54.69 R. SHANKAR RAMAN Employee stock option-discount forming part of staff expenses Directors OTHER NOTES FORMING PART OF ACCOUNTS Membership No. 038332 Partner FIRDOSH D. BUCHIA by the hand of Firm's Registration No. 109982W Chartered Accountants For SHARP & TANNAN Diluted earnings per equity share after extraordinary items (*) Face value per equity share (*) Membership No. 70928 P. R. RAMESH by the hand of Firm's Registration No. 117366W/W-100018 Chartered Accountants For DELOITTE HAŠKINS & SELLS LLP In terms of our report attached SIGNIFICANT ACCOUNTING POLICIES Partner 51.69 68.47 Provision/(reversal) for diminution in value of investments Dividend received from other investments 4.24 5.63 Dividend received from associates 387.07 422.06 Interest received 198.86 579.53 Loans/deposits made with associate companies and third parties (net) (976.96) 68.05 (Purchase)/sale of current investments (net) 841.41 333.28 Sale of long term investments (0.58) (830.03) 79.56 79.70 TOTAL 318 (4778.15) (4131.99) (11.60) (33.14) Cash & cash equivalents discharged pursuant to disposal of subsidiaries/joint ventures Net cash (used in)/from investing activities (after extraordinary items) Consideration received on transfer of Foundry Business Unit 8.76 (106.78) (32.36) Consideration paid on acquisition of subsidiaries 1120.51 220.80 410.30 Consideration received on disposal of subsidiaries (including advance received) Consideration received on disposal of joint venture Cash & cash equivalents acquired pursuant to acquisition of subsidiaries Basic earnings per equity share after extraordinary items (*) (525.57) 157.80 Cash generated from operations before financing activities 9119.69 9528.52 Increase/decrease) in trade payables and customer advances (982.56) 117.58 (Increase)/decrease in inventories 10321.71 (9736.74) (Increase)/decrease in trade and other receivables Adjustments for: 10197.51 12486.51 Operating profit before working capital changes 35.39 77.92 (11810.90) Purchase of long term investments 8597.90 (10232.34) 205.89 (6252.46) (5264.11) (1365.38) (3228.90) (2979.24) (3318.27) (Increase)/decrease in loans and advances towards financing activities 1613.86 Sale of fixed assets Purchase of fixed assets B. Cash flow from investing activities: Net cash (used in)/from operating activities Direct taxes refund/(paid) (net) Cash generated from operations (6984.04) 89.37 Q(12) Other manufacturing, construction and operating expenses 54.44 Other income 93079.32 1074.74 92004.58 102631.69 1183.03 103814.72 L 92761.66 757.08 Total revenue 890.54 K crore 2014-15 crore crore crore Note 2015-16 103522.23 Revenue from operations (net) EXPENSES: Cost of raw materials, components consumed 20091.51 10451.17 20036.82 13546.91 M Less: Transfer from revaluation reserve Depreciation, amortisation, impairment and obsolescence Manufacturing, construction and operating expenses: Finance costs Employee benefits expense Finance cost of financial services business and finance lease activity Staff expenses for software development business Changes in inventories of finished goods, work-in-progress and stock-in-trade Sub-contracting charges Stores, spares and tools consumed Purchase of stock-in-trade Construction materials consumed Sales, administration and other expenses 1333.44 Revenue from operations (gross) Less: Excise duty Consolidated Statement of Profit and Loss for the year ended March 31, 2016 Membership No. 70928 Partner P. R. RAMESH by the hand of Firm's Registration No. 117366W/W-100018 Chartered Accountants For DELOITTE HAŠKINS & SELLS LLP For SHARP & TANNAN In terms of our report attached 1¬OR SIGNIFICANT ACCOUNTING POLICIES OTHER NOTES FORMING PART OF THE ACCOUNTS COMMITMENTS (capital and others) CONTINGENT LIABILITIES 93777.27 193805.63 50.98 J REVENUE: Chartered Accountants by the hand of LARSEN & TOUBRO Directors SUNITA SHARMA (DIN 02949529) SUSHOBHAN SARKER (DIN 00088276) (DIN 00041197) VIKRAM SINGH MEHTA Chief Financial Officer & Whole-time Director (DIN 00101004) (DIN 00019798) Firm's Registration No. 109982W M.M.CHITALE A. M. NAIK R. SHANKAR RAMAN N.HARIHARAN Company Secretary M. No. A3471 316 Membership No. 038332 Partner FIRDOSH D. BUCHIA Group Executive Chairman (DIN 00001514) 1426.56 Mumbai, May 25, 2016 2501.80 5538.17 Profit after tax 2253.24 2548.48 (408.67) (215.71) Q(13) 4964.00 Deferred tax (net) 2764.19 Q(6) Current tax Tax expense: 7217.24 8086.65 Profit before tax 2661.91 Extraordinary items Less: Additional tax on dividend distributed/proposed by subsidiary companies 5537.99 51.33 Diluted earnings per equity share before extraordinary items (*) 1935.55 54.69 Basic earnings per equity share before extraordinary items (*) 4764.82 5090.53 0.18 Profit for the year attributable to the shareholders of the Company (444.95) Add/(less): Minority interest in (income)/losses 4966.14 5535.48 (2.51) Add: Share in profit/(loss) (net) of associate companies 4964.00 (201.32) 7217.24 2.14 Profit before extraordinary items and tax 6146.68 8059.89 9204.84 NOP 67240.45 74946.28 3871.42 5471.40 4611.32 8026.38 8224.78 (712.68) 8086.65 19565.57 17426.16 862.98 4828.91 3041.22 4158.13 2755.99 6869.54 2840.05 358.10 347.70 86209.78 24.96 7728.55 Profit before exceptional and extraordinary items and tax Exceptional items 86234.74 Total expenses 2624.54 1.59 2755.99 2622.95 8.84 96086.17 Q(4) 96095.01 Less: Overheads charged to fixed assets 13.50 32.00 6.89 Add: Transferred from retained earnings Tonnage tax reserve As per last Balance Sheet 11.75 11.61 Add: Transferred from retained earnings 20.39 As per last Balance Sheet 9.98 1.77 16.27 11.75 Foreign currency translation reserve 489.83 Addition during the year (net) 65.77 571.42 (81.53) Add/(less): Transferred to Statement of Profit and Loss on dissolution of stake in subsidiaries 20.39 (6.26) (0.06) 4.52 Reserve u/s 29C of National Housing Bank Act, 1987 As per last Balance Sheet 722.52 140.76 11955.24 73.17 549.34 (138.04) (87.77) 98.37 (102.21) (127.44) Reserve u/s 45 IC of the Reserve Bank of India Act, 1934 As per last Balance Sheet Add: Transferred from retained earnings Carried forward 863.28 359.21 1222.49 11955.24 863.28 11245.92 325 Notes forming part of the Consolidated Accounts (contd.) NOTE [B] Reserves and surplus (contd.) As at 31-3-2016 As at 31-3-2015 Particulars crore crore crore Brought forward crore 11245.92 489.83 10.17 As per last Balance Sheet 0.39 38.54 4764.82 31436.83 (354.70) 2.09 Employee share options outstanding account 11.66 Reserve u/s 45 IC of the Reserve Bank of India Act, 1934 (359.21) (140.76) Reserve u/s 29C of National Housing Bank Act, 1987 (11.61) (13.50) Tonnage tax reserve (4.52) (1.77) Reserve u/s 36(1)(viii) of Income Tax Act, 1961 (113.13) (47.98) Less: Other appropriation: Dividend paid for previous year Deduction during the year Revaluation reserve Reserve u/s 36(1)(viii) of Income Tax Act, 1961 (281.60) Add/(less): Transferred from/(to): Add: Transferred from retained earnings Hedging reserve (net of tax) [Note Q(13)] As per last Balance Sheet Addition/(deduction) during the year (net) 251.50 113.13 203.52 47.98 364.63 251.50 (382.27) (101.15) (631.10) 248.83 (483.42) (382.27) Retained earnings As per last Balance Sheet Depreciation charged against retained earnings 26749.05 (115.58) 326 29086.04 (6.14) Reversal of deferred tax on depreciation charged against retained earnings 2.13 Profit for the year 5090.53 34172.56 Debenture redemption reserve (47.94) As per last Balance Sheet (127.44) Particulars As at 31-3-2016 crore crore As at 31-3-2015 crore * crore Capital reserve 1.79 967.00 964.89 Addition during the year (net) Reserves and surplus (19.49) 947.51 967.00 Capital reserve on consolidation As per last Balance Sheet 270.63 Addition during the year Deduction during the year Capital redemption reserve As per last Balance Sheet Securities premium account [Note Q(6)(b)] As per last Balance Sheet 0.41 270.57 0.06 2.11 NOTE [B] Notes forming part of the Consolidated Accounts (contd.) LARSEN & TOUBRO Weighted average share price f) Weighted average exercise price Method used to determine expected volatility 2015-16 2014-15 7.52% 7.90% 3.68 years 4.34 years 31.78% 2.94 per option 65.73 per option 33.15% 3.47 per option 67.84 per option 44.20 per option 67.63 per option Expected volatility is based on the historical volatility of the subsidiary's shares price applicable to the expected life of each option. The balance in share option outstanding account as on March 31, 2016 is ₹ 6.20 crore (net) (previous year: 6.31 crore), including 4.16 crore (previous year: 4.16 crore) for which the options have been vested to employees as on March 31, 2016. A(XI) Had fair value method been adopted for expensing the compensation arising from employee share-based payment plans: (i) The employee compensation charge debited to the Statement of Profit and Loss for the year 2015-16 would have been higher by 30.31 crore (previous year: 11.15 crore) (ii) Basic EPS before extraordinary items would have decreased from 54.69 (previous year: 51.33) per share to ₹ 54.37 (previous year: 51.21) per share (iii) Basic EPS after extraordinary items would have decreased from ₹54.69 (previous year: 51.33) per share to 54.37 (previous year: 51.21) per share (iv) Diluted EPS before extraordinary items would have decreased from 54.44 (previous year: 50.98) per share to * 54.10 (previous year: 50.86) per share (v) Diluted EPS after extraordinary items would have decreased from 54.44 (previous year: 50.98) per share to ₹54.10 (previous year: 50.86) per share 324 1.07 269.97 270.63 3.27 15.57 19.25 Less: Transferred to Statement of Profit and Loss 1.59 Less: Transferred to retained earnings 0.39 2.09 15.18 15.57 Share options outstanding account Employee share options outstanding account As per last Balance Sheet 432.54 Addition during the year 48.34 514.83 87.77 Less: Transferred to retained earnings 10.17 Deduction during the year 155.38 11.66 158.40 315.33 432.54 Deferred employee compensation expense As per last Balance Sheet As per last Balance Sheet Addition during the year Revaluation reserve 1157.68 3.27 3.27 3.27 7944.99 Addition during the year 181.28 7737.80 225.23 8126.27 7963.03 Less: Share/bond issue expenses (net of tax) 0.87 Premium on inflation linked debentures (net of tax) (0.62) 15.13 2.91 8126.02 7944.99 Debenture redemption reserve As per last Balance Sheet 876.08 521.38 Less: Transferred to retained earnings 175.37 Add: Transferred from retained earnings 456.97 354.70 876.08 Additional tax on dividend paid for previous year Others [Note C(II)(a)] 1.88 0.32 30.00 1231.13 4564.31 5795.44 7819.10 7819.10 1200.00 1200.00 1490.96 3716.93 5207.89 8958.40 8958.40 89.50 89.50 3128.83 13879.15 17007.98 3222.04 500.00 67.23 13507.35 500.00 67.23 16729.39 * Loans guaranteed by Directors or others Nil (previous year: * Nil) NOTE [D(II)] Current maturities of long term borrowings As at 31-3-2016 As at 31-3-2015 Particulars Secured Unsecured Total* Secured Unsecured 1965.87 Total* 234.79 30.00 2073.94 30.00 Notes forming part of the Consolidated Accounts (contd.) NOTE [D(I)] Short term borrowings Particulars Loans repayable on demand: From banks Loans from related parties Other loans and advances: From banks Commercial paper Redeemable non-convertible fixed rate debentures From others As at 31-3-2016 Secured Unsecured Total* As at 31-3-2015 Secured Unsecured Total* crore * crore crore crore crore crore 1897.70 176.24 30.00 1731.08 327 crore 4794.24 8304.17 * Loans guaranteed by Directors or others Nil (previous year: Nil) NOTE [D(III)] Trade payables As at 31-3-2016 As at 31-3-2015 crore crore 166.33 crore crore 151.86 Particulars Due to micro enterprises and small enterprises Due to others: Acceptances 951.46 Due to related parties: Associate companies Due to others 15.19 28257.99 328 1447.42 31.88 23018.48 29224.64 29390.97 0.45 Redeemable non-convertible fixed rate debentures 0.16 7486.08 crore 550.00 Term loans from banks 3886.64 1142.36 Term loans from others 130.51 crore 5344.24 5029.00 130.51 crore 2318.46 5100.52 crore 600.00 217.48 crore 2918.46 5318.00 Loans from financial institutions 40.71 40.71 67.10 67.10 Finance lease obligation [Note Q(11)(ii)(a)(ii)] 0.11 0.11 Sales tax deferment loan 0.34 0.34 8721.59 1823.32 10544.91 0.16 0.45 818.09 0.36 574.38 186.05 Term loans from banks 31607.64 13376.72 Term loans from others 337.22 57.85 crore 26052.97 220.00 108.81 1325.10 44984.36 395.07 crore 14847.58 190.00 crore 8540.00 crore 23387.58 190.00 109.76 109.76 1250.00 1250.00 28366.05 10888.72 39254.77 337.25 72.53 409.78 Loans from financial institutions 216.95 Long term maturities of finance lease obligations Sales tax deferment loan 108.81 1325.10 Perpetual debts 0.675% Foreign currency convertible bonds 220.00 Proposed dividend 1699.95 1510.54 Additional dividend tax [Note Q(19)] 339.58 293.09 31371.37 43805.43 29086.04 40723.16 LARSEN & TOUBRO Notes forming part of the Consolidated Accounts (contd.) NOTE [C(I)] Long term borrowings As at 31-3-2016 As at 31-3-2015 Particulars Secured Unsecured Total * Secured Unsecured Total * crore Redeemable non-convertible fixed rate debentures 14834.47 crore 11218.50 Redeemable non-convertible floating rate debentures Redeemable non-convertible inflation indexed debentures 788.32 47216.28 466.95 1615.98 1276.11 Advance of 14.30 crore received from M/s. Sical Logistics Limited (SLL) against sale of 1,43,00,000 equity shares of 10/- each in M/s Sical Iron Ore Terminals Limited (SIOTL) at cost to SLL vide Agreement for Share Sale and Purchase dated December 17, 2008. The sale is subject to the condition that it can be completed only after three years from the date of commencement of commercial operations by SIOTL as per clause 18.2.2 (i) (d) of the License Agreement dated September 23, 2006 between SIOTL and M/s. Ennore Port Limited (EPL). SIOTL has not been able to commence commercial operation as of March 31, 2016 due to the ban of export of iron ore from the State of Karnataka. SIOTL has sought necessary approvals from EPL and Government of India for handling alternate commodities. NOTE [C(III)] Long term provisions Particulars Provision for employee benefits: Employee pension schemes [Note Q(8)(ii)(a)] Post-retirement medical benefit plan [Note Q(8)(ii)(a)] Interest rate guaranteed-provident fund [Note Q(8)(ii)(a)] Others Others: Periodic major maintenance [Note Q(16)] As at 31-3-2016 As at 31-3-2015 crore crore 231.08 207.70 175.27 165.53 0.61 10.43 11.53 4.67 369.83 497.63 250.00 0.17 0.28 200.00 26537.43 586.17 749.86 484.39 250.00 734.39 0.17 0.28 200.00 73753.71 0.28 0.28 44225.27 0.62 200.00 21311.91 0.62 200.00 65537.18 * Loans guaranteed by Directors or others Nil (previous year: Nil) NOTE [C(II)] Other long term liabilities Particulars Forward contract payable Interest accrued but not due e) C(II)(a) Other long term liabilities - others include As at 31-3-2016 As at 31-3-2015 * crore crore 279.95 205.47 573.01 Weighted average expected dividends Options exercised and shares allotted during the year Options granted and outstanding at the end of the year of which c) Weighted average expected volatility Name of the shareholder Life Insurance Corporation of India L&T Employees Welfare Foundation Administrator of the Specified Undertaking of the Unit Trust of India As at 31-3-2016 Number of Shareholding shares % 14,64,19,088 15.72 12.32 As at 31-3-2015 Number of shares 15,55,22,285 11,16,06,174 A(IV) Shareholders holding more than 5% of equity shares as at the end of the year: Shareholding 8.15 8.17 11,47,52,281 7,59,26,462 7,59,25,962 A(V) Shares reserved for issue under options outstanding as at the end of the year on un-issued share capital: 320 Particulars As at 31-3-2016 Number of crore As at 31-3-2015 Number of % 16.73 12.01 The Company has only one class of share capital, i.e., equity shares having face value of 2 per share. Each holder of equity share is entitled to one vote per share. A(III) Terms/rights attached to equity shares: 185.91 185.91 A(II) Reconciliation of the number of equity shares and share capital: 2015-16 2014-15 Particulars Number of crore shares Number of shares crore Issued, subscribed and fully paid up equity shares outstanding at the beginning of the year 92,95,62,061 185.91 92,69,12,658 185.38 Add: Shares issued on exercise of employee stock options during the year 19,16,784 0.39 26,49,403 0.53 Issued, subscribed and fully paid up equity shares outstanding at the end of the year 93,14,78,845 186.30 92,95,62,061 crore equity shares to (At face value) equity shares to (At face value) be issued as be issued as fully paid * Options can be exercised anytime within a period of 7 years from the date of grant and would be settled by way of issue of equity shares. Management has discretion to modify the exercise period. The details of the grants under the aforesaid schemes under various series are summarised below: 2000 2002 (A) 2002 (B) 2003 (A) Sr. Series reference No. 1 Grant price - 2 Grant dates 3 Vesting commences on 1-6-2000 1-6-2001 2006 (A) 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15 2015-16 2014-15 2.30 2.30 2.30 2.30 2.30 2.30 11.70 11.70 11.70 11.70 400.70 400.70 400.70 400.70 19-4-2002 19-4-2002 23-5-2003 onwards 23-5-2003 onwards 1-9-2006 onwards 1-7-2007 onwards 19-4-2003 19-4-2003 23-5-2004 onwards 23-5-2004 onwards 1-9-2007 onwards 1-7-2008 onwards 2003 (B) 2006 4 Options granted and outstanding at the beginning of the year 25200 25200 32250 32250 59550 59550 The grant of options to the employees under the stock option schemes is on the basis of their performance and other eligibility criteria. The options are vested equally over a period of 4 years [5 years in case of series 2006(A)], subject to the discretion of the management and fulfillment of certain conditions. 92,95,62,061 ii. Terms: The equity shares will be issued at a premium of Employee stock options granted and outstanding # 0.675% 5 years & 1 day US$ denominated Foreign Currency Convertible Bonds (FCCB) 63,46,986 203.97 crore (previous year: 57,93,042 1.16 * fully paid 77,08,842 1.27 ** 278.09 crore) 63,46,986 1.54' 1.27 ** ** The equity shares will be issued at a premium of by the bond holders 1215.13 crore (previous year: 1215.13 crore) on the exercise of options # Note A(VIII) for terms of employee stock option schemes LARSEN & TOUBRO Notes forming part of the Consolidated Accounts (contd.) A(VI) The aggregate number of equity shares allotted as fully paid up by way of bonus shares in immediately preceding five years ended March 31, 2016 are 30,82,94,576 (previous period of five years ended March 31, 2015: 30,82,94,576 shares) A(VII) The aggregate number of equity shares issued pursuant to contract, without payment being received in cash, in immediately preceding last five years ended on March 31, 2016 - Nil (previous period of five years ended March 31, 2015: Nil) A(VIII) Stock option schemes of Parent Company:- a) b) i. 47178 47178 585284 499543 304656 510181 6654724 8692214 186.30 Equity shares of 2 each Net (decrease)/increase in cash and cash equivalents (A + B + C) Cash and cash equivalents at beginning of the year 127.58 1759.33 5845.90 4086.57 Cash and cash equivalents at end of the year 5973.48 5845.90 Notes: 1. Cash Flow Statement has been prepared under the indirect method as set out in the Accounting Standard (AS) 3 "Cash Flow Statements" as specified in the Companies (Accounting Standards) Rules, 2006. 2. Purchase of fixed assets includes movement of capital work-in-progress during the year. 7902.86 3. For cash and cash equivalents not available for immediate use as on the Balance Sheet date, see Note G(II) and H(IV). 4. Cash and cash equivalents are reflected in the Balance Sheet as follows: 2014-15 * crore crore (a) Cash and cash equivalents disclosed under current assets [Note H(IV)] Cash and bank balances available for immediate use Others 5745.99 5607.12 155.60 149.09 5901.59 5756.21 (b) Cash and cash equivalents disclosed under non-current assets [Note G(II)] Cash and bank balances not available for immediate use 2015-16 7488.47 (3926.14) (3678.25) 24497.78 LARSEN & TOUBRO Consolidated Cash Flow Statement for the year ended March 31, 2016 (contd.) 2014-15 2015-16 crore crore C. Cash flow from financing activities: Proceeds from issue of share capital 70.19 Proceeds from long term borrowings 32721.06 Repayment of long term borrowings Proceeds from other borrowings (net) (21445.82) 116.19 98.89 29480.30 (20836.14) 2817.68 Payment (to)/from minority interest (net)- including sale proceeds on divestment of part stake in subsidiary companies and issue of preference shares by subsidiary companies to external parties Dividends paid 1582.68 1871.10 (1512.33) (1322.73) Additional tax on dividend Net cash (used in)/from financing activities (365.25) (280.10) Interest paid (including cash flows on account of interest rate swaps) 101.58 99.31 Total cash and cash equivalents as per Balance Sheet 6003.17 Chief Financial Officer & Whole-time Director (DIN 00101004) (DIN 00019798) VIKRAM SINGH MEHTA (DIN 00041197) SUSHOBHAN SARKER (DIN 00088276) SUNITA SHARMA (DIN 02949529) Directors 319 Notes forming part of the Consolidated Accounts NOTE [A] Share capital A(I) Share capital authorised, issued, subscribed and paid up: Authorised: Particulars As at 31-3-2016 Number of As at 31-3-2015 crore shares Number of shares crore Equity shares of 2 each 1,62,50,00,000 325.00 1,62,50,00,000 325.00 Issued, subscribed and fully paid up: M.M.CHITALE 93,14,78,845 R. SHANKAR RAMAN A. M. NAIK 5855.52 (c) Unrealised exchange loss/(gain) on cash and cash equivalents (29.69) 5973.48 (9.62) 5845.90 Total cash and cash equivalents as per Cash Flow Statement 5. Previous year's figures have been regrouped/reclassified wherever applicable. In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm's Registration No. 117366W/W-100018 by the hand of P. R. RAMESH Partner Membership No. 70928 For SHARP & TANNAN Chartered Accountants Firm's Registration No. 109982W by the hand of FIRDOSH D. BUCHIA Partner Membership No. 038332 Mumbai, May 25, 2016 N.HARIHARAN Company Secretary M. No. A3471 Group Executive Chairman (DIN 00001514) 5 Options lapsed during the year 18,80,484 5 Options granted during the year 6 Options cancelled/lapsed during the year 34,000 7 8 18,51,855 82,660 3,93,003 10,64,326 64,07,483 23,50,106 18,73,467 7,017 Options vested 93,67,335 4,54,580 82,660 Options yet to vest 3,40,666 20,09,440 9,70,917 9,02,550 * The subsidiary had lapsed unvested options with the employees who had resigned from the company. Based on legal advice, the subsidiary has exercised its discretion in determining that the former employees in the United States will LARSEN & TOUBRO Notes forming part of the Consolidated Accounts (contd.) 2. be allowed to exercise their deferred options and accordingly, 2,58,080 options at face value of 1 (erstwhile 51,616 options at face value of 5) exercisable by such former employees have been reinstated and vested. The subsidiary had erroneously lapsed 2,00,000 options at face value of 1 (erstwhile 40,000 options at face value of 5). Subsequently, the subsidiary has decided that these options be restored and vested. b) Employees Stock Ownership Scheme - 2006 U.S. Stock Option Sub-Plan ('Sub-Plan') 3,93,003 3,500 * Options reinstated during the year Provision for final dividend has been made in the books of accounts for 93,14,78,845 equity shares outstanding as at March 31, 2016 amounting to 1699.95 crore. A(X) Stock ownership schemes of subsidiary companies: 1. Larsen & Toubro Infotech Limited a) Employee Stock Ownership Scheme ('ESOS Plan') Under the Employee Stock Ownership Scheme (ESOS), 24,32,766 options are outstanding as at March 31, 2016. The grant of options to the employees under ESOS is on the basis of their performance and other eligibility criteria. Each option entitles the holder to exercise the right to apply for and seek allotment of one equity share of 1 each. All vested options can be exercised on the First Exercise Date. The Nomination & Remuneration Committee had decided September 28, 2015 as the First Exercise Date. The details of the grants under the aforesaid scheme are summarised below: 322 Sr. I, II & III ESOP Series No. 2015-16 2014-15 IV - XXI 2015-16 2014-15 1 Face value (*) 1 2 Grant price (*) 5 3 Options granted and outstanding at the beginning of the year 19,65,015 5 25 3,93,003 1 2 5 10 4 The subsidiary had instituted the Employees Stock Ownership Scheme - 2006 U.S. Stock Option Sub-Plan ('Sub-Plan') for the employees and Directors of its subsidiary, GDA Technologies, Inc, USA. The grant of options to the employees under this Sub- Plan is on the basis of their performance and other eligibility criteria. The term of options shall be 5 years from the date of grant. The options are vested over a period of five years, subject to fulfillment of certain conditions specified in the respective option agreement. Each option entitles the holder to exercise the right to apply for and seek allotment of one equity share of * 1 each at an exercise price of USD 2.4 per share. Under the said plan, options granted and outstanding as at the end of the year are 1,43,650, all vested. Employees Stock Options granted and outstanding as at the end of the year on unissued share capital represent options 25,76,416 (previous year: 1,17,82,850) at face value of ₹ 1 each. L&T Finance Holdings Limited Stock option scheme (ESOP 2010 & ESOP 2013) 7,17,181 28,00,000 18,36,925 6 Options granted and outstanding at the end of the year of which 61,08,998 68,02,519 2,35,50,000 2,63,50,000 Options vested 40,95,548 43,39,694 Options yet to vest 20,13,450 24,62,825 2,35,50,000 2,63,50,000 7 Weighted average remaining contractual life of options (in years) 5.40 5.95 6.56 6.57 Weighted average fair value of options granted during the year is 32.02 (previous year: 25.40) per option. 323 Notes forming part of the Consolidated Accounts (contd.) The fair value has been calculated using the Black-Scholes Option Pricing Model and the significant assumptions and inputs to estimate the fair value of options granted during the year are as follows: Sr. Particulars No. a) Weighted average risk-free interest rate b) Weighted average expected life of options 12,75,680 A(IX) The Directors recommend payment of final dividend of 18.25 per equity share of 2 each on the number of shares outstanding as on the record date. Options exercised and shares allotted during the year 3,17,841 The subsidiary has formulated Employee Stock Option Schemes 2010 (ESOP Scheme-2010), 2010-A (ESOP Scheme 2010-A) and 2013 (ESOP Scheme 2013). The grant of options to the employee under the Stock Options scheme is on the basis of their performance and other eligibility criteria. The options are vested over a period of 4 years, in ratio of 15%, 20%, 30% and 35% respectively from the date of grant, subject to the discretion of the management and fulfillment of certain conditions. Options can be exercised within a period of 7 years from the date of grant for schemes 2010 and 2010A. The options granted under scheme 2013 can be exercised within a period of 8 years from the date of grant and would be settled by way of equity. Management has discretion to modify the exercise period. The details of the grants under the aforesaid schemes are summarised below: Sr. No. 2010 2010-A 2013 Series reference 2015-16 2014-15 2015-16 2014-15 1 Grant price (*) 44.20 67.85 2 Options granted and outstanding at the beginning of the year 68,02,519 91,06,625 2,63,50,000 3 Options granted during the year 9,00,000 2,50,000 2,63,50,000 4 Options cancelled/lapsed during the year 5 The balance in share option outstanding account as on March 31, 2016 is ₹200.28 crore (net) (previous year: 252.56 crore), including 125.92 crore (previous year: 135.98 crore) for which the options have been vested to employees as on March 31, 2016. Expected volatility is based on the historical volatility of the Company's share price applicable to the total expected life of each option. 313.49 per share Weighted average remaining contractual life of options (in years) Nil Nil Nil Nil Nil Nil Nil Nil 5.16 5.38 Nil 0.03 2.18 3.95 The number and weighted average exercise price of stock options are as follows: 2015-16 2014-15 No. of stock Particulars options Weighted average exercise price (₹) No. of stock options 9 Weighted average 96458 100390 257366 304656 2334008 2663571 430461 484894 2510571 3991153 59550 47178 47178 6 Options granted during the year 40611 68450 11270 35625 442400 676786 150400 337800 344865 935190 7 Options exercised during the year 168154 183609 36020 169900 1712610 2295894 8 Options granted and outstanding at the end of the year 25200 25200 32250 32250 59550 59550 47178 47178 526919 585284 257366 304656| 4844579 6654724 Of which Options vested 25200 25200 32250 32250 59550 Options yet to vest d) exercise price (i) Options granted and outstanding at the beginning of the year f) g) h) In respect of stock options granted pursuant to the Company's stock options schemes, the intrinsic value of the options (excess of market price of the share over the exercise price of the option) is treated as discount and accounted as employee compensation over the vesting period. Weighted average fair value of options granted during the year is 965.39 (previous year: 1190.22) per option. The fair value has been calculated using the Black-Scholes Option Pricing Model and the significant assumptions and inputs to estimate the fair value of options granted during the year are as follows: Sr. No. Particulars (i) Weighted average risk-free interest rate (ii) Weighted average expected life of options (iii) Weighted average expected volatility (iv) Weighted average expected dividends over the life of the option (v) Weighted average share price (vi) Weighted average exercise price (vii) Method used to determine expected volatility 2015-16 2014-15 7.66% 3.86 years 30.52% 62.69 per option 1211.45 per option 282.57 per share 8.57% 4.01 years 33.92% 57.18 per option 1444.51 per option e) (₹) Notes forming part of the Consolidated Accounts (contd.) 1554.71) per share. 77,08,842 (ii) Options granted during the year 4,95,265 (iii) Options allotted during the year 19,16,784 362.74 282.57 12,72,990 366.57 98,66,116 374.42 297.48 26,49,403 373.74 (iv) Options lapsed during the year 4,94,281 368.74 7,80,861 (v) Options granted and outstanding at the end of the year 57,93,042 354.10 77,08,842 362.74 (vi) Options exercisable at the end of the year out of (v) supra d) Weighted average share price at the date of exercise for stock options exercised during the year is ₹1543.13 (previous year: 28,52,010 364.76 32,32,795 368.52 321 366.60 24649.64 D(IV)(a) Other current liabilities - other payables include 13.26 0.10 141.20 68.08 24.88 0.10 93.06 127.84 48.14 59.76 Development 86.60 77.89 0.74 0.45 164.78 30.24 18.84 New product design and Technical knowhow As at Up to As at 1-4-2015 subsidiaries of Foreign currency As at Additions fluctuation Deductions 31-3-2016 Pursuant to acquisition Up to of 31-3-2015 subsidiaries Foreign Specialised softwares 990.32 99.39 13.76 3.35 1100.12 577.16 163.27 7.45 3.13 744.75 For the currency As at As at period fluctuation Deductions 31-3-2016|31-3-2016# 31-3-2016 31-3-2015 355.37 413.16 0.23 Pursuant to acquisition Customer contracts and 131.24 214.30 23128.34 13095.20 Utility right to use Total 1.53 1.53 0.38 15388.70 10889.49 1400.30 20.93 10729.61 11.92 4751.01 (60.14) 10.98 26288.14 43.70 15388.70 1312.76 1676.17 0.15 667.85 10.04 0.53 1.00 1.15 10.45 Previous year 76.12 86.90 61.45 1553 6.33 137.57 44.34 14.85 22 0.40 440 48.91 115.87 56.36 2.26 Toll collection rights 14051.17 10698.95 7.18 24742.94 955.97 445.86 1.53 relationship 408.04 Particulars Impairment 173.58 65.88 239.46 1402.27 1468.15 Breakwater structures 637.72 0.84 1641.73 638.56 46.22 59.78 578.78 591.50 Leasehold Improvements 23.53 53.54 Sub total Other assets 13.56 1641.73 Dredged channel 551.08 591.33 0.25 0.25 0.25 25 Aircraft 119.08 119.08 26.32 6.67 03 0.25 32.99 86.09 92.76 Ships 787.11 787.11 195.78 40.25 236.03 3209.42 Book value 54.38 26.68 Add: Asset held for sale Add: Capital work-in-progress @Includes 6.14 crore transferred to retained earnings pursuant to Schedule II of Companies Act, 2013. # Impairment upto 31-3-2016 13.51 crore, 0.37 crore pertains to foreign currency translation adjustments, 0.01 crore deductions during the year. 330 25.03 25.01 17385.08 18810.53 13.15 6486.21 4883.03 LARSEN & TOUBRO Notes forming part of the Consolidated Accounts (contd.) NOTE [E(II)] Intangible assets Cost/valuation Amortisation *crore 23871.29 23693.56 13.51 #17360.05 18785.52 531.49 10463.40 655.75 9068.53 1877.14 49.21 21.53 2181.97 12.52 4.10 31.07 40.62 15.04 153.04 4.10 599.58 2658.84 2758.78 Lease adjustment (239.36) (239.36) Total 28106.57 1970.44 Previous year 28562.37 25.55 1837.60 104.26 50.45 2369.41 28106.56 2104.95 28076.32 9068.54 7508.26 5.38 71.69 8.49 5.38 3258.42 450.64 (17.96) 5.06 2349.00 214.30 23724.84 13712.53 37.12 1676.17 Add: Intangible assets under development As at 31-3-2015 crore crore Fully paid equity shares of associate companies 67.81 85.05 Add/(less): Accumulated share in profit/(loss) of the associate companies at the beginning of the year crore 61.87 Adjustment pursuant to an associate becoming subsidiary (14.43) Adjustment pursuant to divestment of stake in associates (11.55) 4.50 118.13 149.69 74.57 crore As at 31-3-2016 Investments in associates: [Note F(I)] | Capital work-in-progress 318.20 505.84 Intangible assets under development 755.16 816.84 Total 1089.69 1352.98 LARSEN & TOUBRO Notes forming part of the Consolidated Accounts (contd.) NOTE [F] Non-current investments (at cost unless otherwise specified) Long term investments: Particulars Trade investments: Investments in equity instruments Add/(less): 3.65 Share in profit/(loss) (net) of associate companies- during the period 2.14 20.00 43.00 Less: Provision for diminution in value 15.90 15.90 4.10 27.10 Fully paid equity shares Other investments: Less: Provision for diminution in value Investments in cumulative redeemable preference shares Investments in Government and trust securities Less: Provision for diminution in value Investments in debentures and bonds Less: Provision for diminution in value Investments in mutual funds Investments in security receipt Investment in units of fund Investments in equity instruments Investments in others: 147.79 109.93 Share in depreciation, net of deferred tax, charged against accumulated profits (0.64) Share in non-statutory reserves of associate companies-during the period (3.32) Commitment to fresh infusion of equity 3.82 2.73 Dividend received from associate companies during the period (5.63) (4.24) Unrealised profits in respect of transactions with associate companies (1.33) Provision for diminution in value (0.56) (0.56) (2.51) 13.20 Toll collection rights 0.03 As at 31-3-2016 As at 31-3-2016 As at 31-3-2015*| 48.10 # 2171.67 2215.00 48.10 As at 31-3-2016* 2219.77 2263.10 2215.00 # Impairment upto 31-03-2016 48.10 crore, during the year * Nil. * Goodwill represents consideration paid in excess of share in net worth of subsidiaries acquired during the year. It also includes goodwill purchased on acquisition of business of 60.30 crore (previous year: 39.61 crore). Notes: 1 Cost/valuation of: (i) Freehold land includes: (a) 1.17 crore for which conveyance is yet to be completed. 2136.17 73.75 5.10 (29.73) Deductions # Impairment upto 31-3-2016 214.30 crore, during the year 214.30 crore. 11003.72 10109.75 34728.56 23822.28 ₹ NOTE [E(III)] Goodwill on consolidation crore Cost/valuation Impairment Book value Particulars As at 1-4-2015 Goodwill on consolidation 2263.10 Previous year 2184.27 Additions 25.32 108.56 Foreign currency fluctuation (ii) Leasehold land includes: (a) 414.54 crore representing 1148.40 acres of land taken on lease from M/s Tamilnadu Industrial Development Corporation Limited (TIDCO) on various dates for development of port and shipyard. (b) 0.47 crore representing 4.728 hectares of forest land in dist. Rudryaprayag, State of Uttarakhand, taken on lease for 30 years w.e.f. 10.09.2007. (c) 0.77 crore representing 34.341 hectares of forest land in dist. Rudryaprayag, State of Uttarakhand, taken on lease for 30 years w.e.f. 24.09.2009. Cost/valuation as at April 1, 2015 of individual assets has been reclassified, wherever necessary. In respect of asset components, whose useful life has expired as on April 1, 2015, the carrying amount of 6.14 crore before tax (4.01 crore net of tax of 2.13 crore) has been adjusted against retained earnings as on April 1, 2015. Additions during the year and capital work-in-progress/intangible assets under development include 1089.69 crore (previous year: 1352.98 crore) being borrowing cost capitalised in accordance with Accounting Standard (AS) 16 "Borrowing Costs" as specified under Section 133 of the Companies Act, 2013, read with rule 7 of the Companies (Accounts) Rules, 2014. Asset wise break-up of borowing costs capitalised is as follows: 332 Asset Class 2015-16 crore 2014-15 Tangible Building owned Plant & equipment owned Office equipment owned 3.13 26.30 0.30 0.02 Furniture and fixture owned 7 Railway sidings 6 Owned assets given on operating lease have been presented separately under tangible assets [Note E(I)] as per Accounting Standard (AS) 19 "Leases". (d) 73.92 crore added during the year in respect of which lease agreements are yet to be executed. 331 Notes forming part of the Consolidated Accounts (contd.) 2 Cost/valuation of buildings includes ownership accommodation: (i) (a) in various co-operative societies and apartments and shop-owners' associations: 127.58 crore, including 2595 shares of 50 each, 232 shares of 100 each and 1 share of 250 each. (b) in various apartments: 11.20 crore. 3 (c) in proposed co-operative societies: (d) 0.53 crore. in various co-operative societies and apartments and shop-owners' associations: 14.60 crore, for which share certificate are yet to be issued. (ii) of 4.07 crore in respect of which the deed of conveyance is yet to be executed. (iii) of 8.48 crore representing undivided share in a property at a certain location. Depreciation, amortisation, impairment and obsolescence for the year on fixed assets includes 13.26 crore (previous year: *30.27 crore) on account of obsolescence and 214.30 crore (previous year: 138.60 crore) on account of impairment. 4 5 296.35 Owned 338.98 358.44 *crore Book value of 1-4-2015 subsidiaries Additions fluctuation Deductions 31-3-2016 31-3-2015 subsidiaries period @ fluctuation Deductions 31-3-2016 31-3-2016 Up to As at As at As at 31-3-2016 31-3-2015 Land Freehold Impairment 1058.85 Leasehold 763.00 7.29 Sub total - Land 1821.85 8.58 2289 1.29 currency For the of 2552.66 3690.04 3543.81 329 Notes forming part of the Consolidated Accounts (contd.) NOTE [E(I)] Tangible assets Cost/valuation Particulars Pursuant to acquisition As at Foreign currency Depreciation Pursuant to acquisition Foreign As at Up to 1.40 406.08 1.36 2646.46 655.46 648.88 1052.64 4399.92 4366.05 Leased out 687.13 20.16 533.11 174.18 48.80 12.46 36.82 1053.65 24.44 638.33 Sub total - Buildings 5918.39 416.34 22.78 729.76 5627.75 914.01 221.72 149.74 28.68 7.86 209.26 771.65 52.04 13.66 0.71 66.41 705.24 710.96 2.76 406.08 1427.11 52.04 13.66 0.71 66.41 6.58 1354.12 1763.60 Buildings Owned 5231.26 396.18 22.78 196.65 5453.57 865.21 6.58 7.86 477.29 Other provisions [Note Q(16)] 5776.24 4497.65 Due to customers (property development projects) 768.58 637.70 Advances from customers 15413.21 Due to customers (construction and project related activity) 13366.26 669.02 731.10 Other payables (including sales tax, service tax, excise duty and others) [Note D(IV)(a)] 3808.55 3101.19 28510.79 23684.89 Forward contract payable 10.31 17.22 33.59 LARSEN & TOUBRO Notes forming part of the Consolidated Accounts (contd.) NOTE [D(IV)] Other current liabilities Particulars As at 31-3-2016 crore As at 31-3-2015 crore 1300.16 Interest accrued but not due on borrowings Interest accrued and due on borrowings Unclaimed dividend Unclaimed interest on debentures 1977.68 40.96 6.93 39.33 Due to Directors 47.83 crore (previous year: 460.48 50.61 crore) Short term provisions 0.13 1043.58 991.15 Others: Current taxes [net of payments made 2152.52 crore (previous year: 2057.49 crore)] 91.15 260.84 14.59 Proposed dividend [Note A(IX)] 1510.54 Additional tax on dividend 172.46 148.35 Reserve for unexpired risks 222.42 155.64 1699.95 13.47 819.06 143.90 Particulars Provision for employee benefits: As at 31-3-2016 As at 31-3-2015 crore crore crore crore Gratuity [Note Q(8)(ii)(a)] 145.00 Compensated absences 864.54 Employee pension schemes [Note Q(8)(ii)(a)] 16.82 Post-retirement medical benefit plan [Note Q(8)(ii)(a)] 17.22 Provision for interest rate guarantee NOTE [D(V)] 65.50 1078.09 4549.66 5004.38 Plant & equipment Owned 630.73 71.06 6.79 65.73 642.85 329.72 70.48 3.49 Furniture and fixtures 48.67 287.83 301.01 Leased out 18.98 4.01 ' 4.30 18.69 6.63 355.02 154.60 151.60 408.69 2.78 ཚ 0.86 1.92 0.84 0.45 0.19 1.10 0.82 1.94 Sub total Office equipment 514.56 75.09 3.95 33.31 560.29 359.95 74.66 3.66 29.58 1.82 Leased out 0.23 10.47 12.35 296.66 59.03 6.97 235.57 221.22 24.89 60.99 177.67 76.55 50.86 561.97 27.77 103.41 137.22 110.38 9.46 111.85 739.64 373.21 86.80 6.97 66.32 400.66 30.06 74.26 9.46 85.49 ཆེཆེ Sub total - Furniture & 649.71 75.07 6.79 70.03 661.54 336.35 72.30 3.49 48.90 363.24 298.30 313.36 fixtures Vehicles Owned 517.88 Leased out 213.77 Sub total - Vehicles 731.65 | | | 8.22 150.78 152.66 29.39 407.59 3.66 235.14 1085.27 25.04 267.35 6600.50 66 6.93 287.35 293.67 0.22 6.93 equipment Computers Owned 1111.37 179.31 2.10 51.76 7932.80 8364.41 11.00 0.42 529.42 224.36 694.44 14540.23 5757.54 56.42 Owned 13603.92 1044.49 56.42 694.02 14010.81 5533.18 1074.27 25.04 267.13 6365.36 7645.45 8070.74 Leased out 524.96 4.88 Sub total - Plant & 14128.88 1 1049.37 1241.02 804.29 169.08 1.48 47.40 927.45 54.10 1261.34 824.80 169.69 1.48 49.74 946.23 315.11 307.31 Office equipment Owned 511.78 75.09 3.95 32.45 558.37 359.11 I 74.21 2.10 Other assets 181.23 Sub total-Computers 313.57 307.08 Leased out 18.27 1.92 20.19 18.07 0.58 18.65 1.54 0.20 Taken on lease 2.47 2.34 0.13 2.44 0.03 2.34 0.13 0.03 1132.11 67.80 36.26 326.40 28.32 0.51 Considered good Debts outstanding for more than 6 months: Secured: crore As at 31-3-2015 crore crore As at 31-3-2016 crore Particulars Trade receivables Trade receivables NOTE [H(III)] Notes forming part of the Consolidated Accounts (contd.) LARSEN & TOUBRO 336 6508.40 5361.95 2211.39 91.81 14.37 18.41 1526.41 [including goods-in-transit 0.04 crore (previous year: * 0.05 crore)] Property development projects (including land) [Note Q(7)(c)] Completed property [Note Q(7)(c)] Loose tools Other debts: [including goods-in-transit 3.54 crore (previous year: * 7.66 crore)] Considered good 4.71 Fixed deposits with banks including interest accured thereon [includes 5.91 crore (previous year: 3.40 crore) of bank deposit with more than 12 months maturity] Earmarked balances with banks-unclaimed dividend Fixed deposits with banks (maturity less than 3 months) Other bank balances: Cash on hand Cheques and drafts on hand Particulars Balance with banks Cash and cash equivalents: Cash and bank balances NOTE [H(IV)] Less: Allowance for doubtful debts Considered doubtful Considered good Other debts: 6267.77 1044.09 Considered doubtful 5223.68 Considered good Debts outstanding for more than 6 months: 13.56 5.11 8.85 4.60 Unsecured: 30761.15 327.87 Stores and spares 7.56 34.00 14.38 7.56 Investment property Preference shares (b) Current portion of long term investments: Share application money Other investments 5104.69 23.19 2.40 5608.91 18.49 33.47 0.20 0.80 Less: Provision for diminution in value 5104.89 5609.71 Mutual funds 1262.38 1361.51 1263.22 0.84 10.07 Less: Provision for diminution in value 1371.58 Debentures and bonds 8105.67 347.34 48.38 7965.32 Inventories (at cost or net realisable value whichever is lower) [including goods-in-transit 34.82 crore (previous year: 36.02 crore)] 178.02 179.99 [including goods-in-transit 0.04 crore (previous year: Nil)] Stock-in-trade (in respect of goods acquired for trading) 403.80 295.11 Finished goods 1145.74 912.55 [including goods-in-transit 113.43 crore (previous year: 75.60 crore)] Manufacturing work-in-progress 344.70 374.71 [including goods-in-transit 15.84 crore (previous year: 24.10 crore)] Construction materials 639.22 * crore 1151.48 As at 31-3-2015 637.79 1069.64 crore As at 31-3-2016 [including goods-in-transit 46.10 crore (previous year: *45.26 crore)] Components Raw materials Particulars NOTE [H(II)] 1482.73 4.55 1048.64 52.52 Earnest money deposit 523.01 Security deposits Considered good: Others: 10.37 3.17 8.79 0.67 Advances to suppliers 0.35 Advance recoverable Joint ventures: 0.83 0.32 6.37 7.45 70.90 73.86 70.00 73.00 0.90 434.92 64.71 0.86 Advances recoverable in cash or in kind 6879.51 0.61 7679.22 9383.19 7597.95 9300.54 217.19 215.98 Less: Allowance for doubtful loans and advances 7815.14 9516.52 186.62 152.12 Other loans and advances 4.58 36.31 Security deposits 25.99 27.55 Deferred credit against sale of ships Considered doubtful: 218.81 176.51 Balance with customs, port trust, etc. 8548.50 37033.47 crore crore Earmarked balances with banks-others 33.59 39.39 794.48 497.28 850.44 119.60 272.27 3526.15 439.72 46.79 544.40 4161.01 crore As at 31-3-2015 crore crore 30075.81 30089.37 30749.76 673.95 0.46 26566.78 4182.52 As at 31-3-2016 crore 35984.83 35989.94 17.40 crore 10.59 155.60 * crore As at 31-3-2015 As at 31-3-2016 338 Others Advance recoverable Associates: Considered good: Loans and advances to related parties: Unsecured: Inter-corporate deposits including interest accrued Others Loans against mortgage of house property: Particulars Secured considered good: Short term loans and advances NOTE [H(V)] Notes forming part of the Consolidated Accounts (contd.) 337 987.75 5756.21 5901.59 709.67 149.09 Cash and bank balances not available for immediate use including margin money deposits 1485.30 2.57 3509.03 673.49 2.62 3.01 3206.74 3.01 4240.72 0.34 0.34 212.20 392.18 261.17 604.50 2472.17 2915.28 254.24 3.95 323.63 4.79 17.73 18.79 17.73 18.79 267.97 226.08 0.01 3.00 30.97 2.37 1.24 31.50 crore 4240.38 4517.99 As at 31-3-2015 crore 3203.73 3525.78 crore Less: Provision for standard assets 119.02 60.88 Less: Contingent provisions against standard assets 386.22 528.13 Less: Allowance for non-performing assets 33455.74 42089.28 386.22 528.13 30487.13 68.31 2514.08 32.46 3873.05 Term loans [Note G(l)(b)(i)] Considered doubtful: Debentures Finance lease 37655.64 Term loans Considered good: Secured loans: crore As at 31-3-2015 crore As at 31-3-2016 crore 369.85 crore Particulars 333 1646.80 1974.36 138.43 221.05 245.85 237.96 1.70 13.32 772.72 806.56 54.96 772.72 861.52 179.98 213.98 0.02 0.03 180.00 214.01 39.48 93.75 1066.51 295.74 71.72 Notes forming part of the Consolidated Accounts (contd.) As at 31-3-2016 F(I) Investments in associates include goodwill of 23.90 crore (previous year: 23.95 crore) and is further net of capital reserve of Nil (previous year: * 0.25 crore). Long term loans and advances Long term loans and advances towards financing activities NOTE [G(I)(b)] Less: Allowance for doubtful loans and advances Other loans and advances Considered doubtful: Minimum Alternate Tax (MAT) credit entitlement of 637.21 crore (previous year: 426.42 crore)] Income tax receivable of current year [net of provision for tax Advances recoverable in cash or in kind Earnest money deposits Security deposits Other loans and advances: Advances recoverable Associate companies: Loan and advances to related parties: Capital advances Unsecured considered good: Other loans and advances (KMPs) Inter-corporate deposits including interest accrued Capital advances Loans against mortgage of house property Particulars Secured considered good: NOTE [G(I)(a)] 290.79 crore 32659.71 crore Particulars As at 31-3-2016 8.65 369.41 460.36 22.34 97.20 79.89 263.56 358.13 crore crore As at 31-3-2015 As at 31-3-2016 99.31 99.31 101.58 101.58 crore crore As at 31-3-2015 As at 31-3-2016 Current investments As at 31-3-2015 crore crore (a) Current investments: Fully paid equity shares Less: Provision for diminution in value 1069.13 41130.42 Government and trust securities crore 41.55 As at 31-3-2015 * crore * crore 9.22 crore As at 31-3-2016 Particulars Brought forward NOTE [H(I)] Current investments (contd.) Notes forming part of the Consolidated Accounts (contd.) 335 41.55 9.22 Carried forward 41.55 9.22 73.15 31.60 72.57 Less: Provision for diminution in value 81.79 NOTE [H(I)] Others crore crore 32659.71 440.20 9805.89 2073.91 Considered doubtful: Debentures Finance lease Term loans Considered good: Unsecured loans: As at 31-3-2015 crore crore 41130.42 crore As at 31-3-2016 Particulars Brought forward Long term loans and advances towards financing activities (contd.) NOTE [G(l)(b)] Notes forming part of the Consolidated Accounts (contd.) LARSEN & TOUBRO 334 Unamortised expenses 32659.71 41130.42 31.09 12351.09 Term loans [Note G(1)(b)(i)] Less: Allowance for non-performing assets Interest accrued on investments and others Particulars Other non-current assets NOTE [G(III)] Cash and bank balances not available for immediate use Cash and cash equivalents: Particulars Cash and bank balances G(1)(b)(i) Loans and advances towards financing activities are classified as doubtful to the extent of provision made following prudential norms for provisioning of assets prescribed by the Reserve Bank of India. 43932.02 11272.31 12310.61 53441.03 NOTE [G(II)] Carried forward 4.08 54.34 11333.66 54.34 293.22 1341.10 9645.00 2.93 9.39 Less: Contingent provisions against standard assets Less: Provision for standard assets 31.09 India 94.96 94.96 100.00 94.96 43 India Larsen & Toubro Infotech Limited 94.96 100.00 100.00 GDA Technologies Limited 66.71 51.72 51.72 India Hyderabad International Trade Expositions Limited ** 41 65.86 65.86 India L&T Hitech City Limited ** 100.00 40 89.00 42 44 India India 89.00 72.95 72.95 66.71 Family Credit Limited 47 72.95 72.95 66.71 66.71 India L&T Finance Holdings Limited Consumer Financial Services Limited 72.95 72.95 66.71 66.71 India L&T Housing Finance Limited 45 72.95 72.95 66.71 66.71 46 India 100.00 39 India CSJ Infrastructure Private Limited * 34 68.00 68.00 68.00 68.00 India L&T Vision Ventures Limited 33 51.00 100.00 51.00 51.00 India L&T South City Projects Limited 32 100.00 100.00 100.00 India 48 Chennai Vision Developers Private Limited 31 51.00 100.00 35 L&T Power Limited 100.00 100.00 100.00 100.00 India L&T Aviation Services Private Limited 38 100.00 100.00 100.00 100.00 India L&T General Insurance Company Limited 37 74.00 74.00 74.00 74.00 India 36 L&T Cassidian Limited 99.99 99.99 99.99 99.99 India L&T Infocity Limited ** L&T Finance Limited L&T Trustee Company Private Limited 66.71 72.95 72.95 66.71 66.71 India L&T Vrindavan Properties Limited 57 72.95 72.95 66.71 66.71 58 India 56 72.95 72.95 66.71 66.71 India L&T Infra Investment Partners Advisory Private Limited 55 72.95 72.95 66.71 L&T Infra Investment Partners Trustee Private Limited L&T Access Distribution Services Limited India 66.71 100.00 62 100.00 100.00 100.00 100.00 India 61 100.00 100.00 100.00 100.00 India L&T Capital Company Limited 60 72.95 72.95 66.71 66.71 India Mudit Cement Private Limited 59 72.95 72.95 66.71 66.71 India L&T Infra Debt Fund Limited 54 interest (%) held (%) As at 31-3-2015 Proportion Proportion of of ownership voting power Proportion of voting power As at 31-3-2016 Proportion of ownership interest (%) Country of incorporation As at 31-3-2016 Proportion of ownership interest (%) No. Name of subsidiary company Sr. NOTE [Q] (contd.) Notes forming part of the Consolidated Accounts (contd.) LARSEN & TOUBRO 346 72.95 72.95 66.71 66.71 India L&T Capital Markets Limited 49 72.95 72.95 66.71 held (%) India 50 India 72.95 72.95 66.71 66.71 India L&T Infrastructure Finance Company Limited 53 72.95 72.95 66.71 66.71 India L&T FinCorp Limited 52 72.95 72.95 66.71 66.71 India L&T Mutual Fund Trustee Limited 51 72.95 72.95 66.71 66.71 L&T Investment Management Limited 100.00 Name of subsidiary company 100.00 100.00 100.00 100.00 India Hi-Tech Rock Products & Aggregates Limited 8 100.00 100.00 100.00 100.00 India 100.00 L&T Electricals and Automation Limited 97.00 97.00 97.00 97.00 India L&T Shipbuilding Limited 6 100.00 100.00 100.00 100.00 7 9 L&T Seawoods Limited India 51.00 51.00 51.00 51.00 India L&T-MHPS Turbine Generators Private Limited 12 51.00 51.00 51.00 51.00 India L&T-MHPS Boilers Private Limited 11 50.0002 50.0002 50.0002 50.0002 India L&T-Gulf Private Limited 10 100.00 100.00 100.00 100.00 India L&T-Valdel Engineering Limited 5 100.00 held (%) of ownership voting power of ownership interest (%) Proportion Country of incorporation Proportion of voting power As at 31-3-2015 Proportion Proportion of As at 31-3-2016 No. L&T Power Development Limited Sr. Q(2) The list of subsidiaries, associates and joint ventures included in the Consolidated Financial Statements are as under:- NOTE [Q] (contd.) Notes forming part of the Consolidated Accounts (contd.) 345 The notes including significant policies to the CFS are intended to serve as a guide for better understanding of the Group's position. In this respect, the Company has disclosed such notes and policies which represent the required disclosure. The Consolidated Financial Statements (CFS) are prepared in accordance with Accounting Standard (AS) 21 "Consolidated Financial Statements", Accounting Standard (AS) 23 "Accounting for Investments in Associates in Consolidated Financial Statements" and Accounting Standard (AS) 27 "Financial Reporting of Interests in Joint Ventures", as specified in the Companies (Accounting Standards) Rules, 2006 [Note R(1)]. The CFS comprises the financial statements of Larsen & Toubro Limited (L&T), its subsidiaries, associates and joint ventures. Reference in these notes to L&T, Company, Parent Company, Companies or Group shall mean to include Larsen & Toubro Limited or any of its subsidiaries, associates and joint ventures, unless otherwise stated. b) 2840.05 3041.22 150.06 166.24 25.59 interest (%) 13 held (%) 12 100.00 100.00 100.00 India Spectrum Infotech Private Limited 4 50.0001 50.0001 50.0001 50.0001 India L&T-Sargent & Lundy Limited 3 99.90 99.90 99.90 99.90 India 2 Bhilai Power Supply Company Limited 100.00 100.00 100.00 100.00 India L&T Cutting Tools Limited Domestic Subsidiaries 100.00 Raykal Aluminium Company Private Limited 75.50 26 51.00 51.00 51.00 51.00 India L&T Kobelco Machinery Private Limited 25 100.00 100.00 100.00 L&T Geostructure LLP 100.00 Ewac Alloys Limited 24 100.00 100.00 India L&T PowerGen Limited @@ 23 60.00 60.00 60.00 60.00 India India 74.00 74.00 India L&T Parel Project LLP 30 55.00 50.00 100.00 100.00 India L&T Asian Realty Project LLP 29 100.00 100.00 100.00 100.00 India L&T Realty Limited 28 100.00 100.00 100.00 100.00 India 27 L&T Valves Limited 74.00 74.00 India L&T Sapura Offshore Private Limited 22 60.00 India PNG Tollway Limited 17 74.00 74.00 74.00 74.00 India L&T Special Steels and Heavy Forgings Private Limited 16 100.00 100.00 100.00 100.00 India L&T Hydrocarbon Engineering Limited 15 100.00 100.00 India L&T Natural Resources Limited @@ 14 75.50 75.50 75.50 72.11 India 72.11 72.77 60.00 60.00 60.00 India L&T Sapura Shipping Private Limited 21 100.00 100.00 India L&T Solar Limited @@ 20 50.10 50.10 50.10 50.10 India L&T Howden Private Limited 19 95.00 95.00 95.00 95.00 India Kesun Iron & Steel Company Private Limited 18 72.77 India 94 LTH Milcom Private Limited ^^ 100.00 100.00 100.00 100.00 UAE Larsen & Toubro International FZE 11 100.00 100.00 100.00 100.00 UAE 100.00 L&T Realty FZE 97.45 97.45 97.45 97.45 Singapore L&T IDPL Trustee Manager Pte Ltd. 9 93.47 93.47 93.48 93.48 10 12 Larsen & Toubro Hydrocarbon International Limited LLC Kindgom of Saudi 65.00 65.00 65.00 Sultanate of Larsen & Toubro (Oman) LLC 15 100.00 100.00 100.00 100.00 UK Servowatch Systems Limited 14 100.00 100.00 100.00 100.00 UK Thalest Limited 13 Arabia 100.00 100.00 100.00 100.00 Sri Lanka 65.00 100.00 94.96 100.00 94.96 94.96 Canada Larsen & Toubro Infotech Canada Limited 3 100.00 100.00 94.96 94.96 Germany 100.00 Larsen & Toubro Infotech GmbH 100.00 100.00 100.00 100.00 USA Larsen & Toubro LLC 1 Foreign subsidiaries held (%) Proportion of voting power As at 31-3-2015 Proportion of ownership interest (%) 2 4 Larsen & Toubro Infotech LLC USA 94.96 China L&T Information Technology Services (Shanghai) Co. Ltd. L&T Infrastructure Development Projects Lanka (Private) Limited 8 ∞ 7 74.90 74.90 71.12 71.12 South Africa Larsen & Toubro Infotech South Africa (PTY) Limited 6 100.00 100.00 94.96 94.96 Canada No. L&T Infotech Financial Services Technologies Inc. 5 100.00 100.00 94.96 94.96 100.00 Oman 16 Larsen & Toubro Electromech LLC Larsen & Toubro ATCO Saudia LLC ## 27 Arabia 75.00 75.00 75.00 75.00 Kindgom of Saudi Larsen Toubro Arabia LLC 26 Arabia Kindgom of Saudi 100.00 100.00 100.00 Kindgom of Saudi Larsen & Toubro Saudi Arabia LLC 25 100.00 49.00 100.00 49.00 UAE Larsen & Toubro Readymix & Asphalt Concrete Industries LLC ## 100.00 75.00 75.00 75.00 33.00 348 100.00 100.00 100.00 100.00 Australia Tamco Electrical Industries Australia Pty Ltd. 30 100.00 100.00 100.00 100.00 Malaysia Henikwon Corporation Sdn. Bhd. 29 100.00 100.00 100.00 100.00 Malaysia Tamco Switchgear (Malaysia) Sdn. Bhd. 28 Arabia 75.00 24 75.00 49.00 75.00 49.00 Qatar Larsen & Toubro Qatar LLC ## 19 100.00 30.00 100.00 30.00 Malaysia Larsen & Toubro (East Asia) Sdn.Bhd. ## 18 Oman 65.00 65.00 65.00 65.00 Sultanate of L&T Modular Fabrication Yard LLC 17 Oman 65.00 65.00 65.00 65.00 Sultanate of 100.00 Proportion of 49.00 20 49.00 Kuwait Larsen & Toubro Kuwait Construction General Contracting Company, WLL ## 23 Arabia 75.00 75.00 100.00 100.00 Kindgom of Saudi L&T Electricals & Automation Saudi Arabia Company LLC 22 95.00 95.00 95.00 95.00 Indonesia PT Larsen & Toubro Hydrocarbon Engineering Indonesia 21 100.00 100.00 100.00 100.00 Nigeria L&T Overseas Projects Nigeria Limited 100.00 held (%) voting power Name of subsidiary company 97.45 97.45 India 74 L&T Interstate Road Corridor Limited 97.45 97.45 97.45 97.45 India L&T Western India Tollbridge Limited 73 97.45 98.12 98.12 98.12 India L&T Transportation Infrastructure Limited 72 97.45 97.45 97.45 97.45 India L&T Vadodara Bharuch Tollway Limited 98.12 97.45 75 L&T Port Kachchigarh Limited 97.45 97.45 97.45 97.45 India L&T Krishnagiri Walajahpet Tollway Limited 78 97.45 97.45 97.45 97.45 India L&T Halol-Shamlaji Tollway Limited 77 97.45 97.45 97.45 97.45 India 76 L&T Ahmedabad-Maliya Tollway Limited 97.45 97.45 97.45 97.45 India 71 97.45 97.45 97.45 India 66 Nabha Power Limited 100.00 100.00 100.00 100.00 India L&T Himachal Hydropower Limited 65 100.00 100.00 100.00 100.00 India L&T Arunachal Hydropower Limited 64 100.00 100.00 100.00 100.00 India L&T Uttaranchal Hydropower Limited 63 100.00 100.00 100.00 79 100.00 100.00 97.45 India L&T Western Andhra Tollways Limited 70 97.45 97.45 97.45 97.45 India L&T Krishnagiri Thopur Toll Road Limited 69 97.45 97.45 97.45 97.45 India L&T Panipat Elevated Corridor Limited 68 97.45 97.45 97.45 97.45 India L&T Infrastructure Development Projects Limited 67 100.00 100.00 L&T Devihalli Hassan Tollway Limited 97.45 L&T Thales Technology Services Private Limited 91 100.00 100.00 100.00 100.00 India L&T Infrastructure Engineering Limited 90 100.00 100.00 India 100.00 India L&T Construction Equipment Limited 89 100.00 100.00 100.00 100.00 India L&T Technology Services Limited 88 97.45 100.00 74.00 74.00 74.00 Sr. NOTE [Q] (contd.) Notes forming part of the Consolidated Accounts (contd.) 347 ^^ The company is incorporated on August 17, 2015 ^ The company is incorporated on January 22, 2016 @@ The subsidiary is merged with L&T Capital Company Limited w.e.f. April 1, 2015 @ The subsidiary is merged with Larsen & Toubro Infotech Limited w.e.f. October 17, 2014 The Group sold its stake on March 31, 2016 ** *The Group sold its stake on November 16, 2015 56.67 56.67 India 100.00 100.00 India Marine Infrastructure Developer Private Limited ^ 93 100.00 100.00 India Information Systems Resource Centre Private Limited @ 92 74.00 97.45 97.45 97.45 India 83 97.45 97.45 97.45 97.45 India L&T BPP Tollway Limited 82 97.45 97.45 97.45 97.45 India L&T Chennai-Tada Tollway Limited 81 97.48 97.48 97.48 97.48 India L&T Metro Rail (Hyderabad) Limited 80 97.45 97.45 97.45 L&T Rajkot-Vadinar Tollway Limited India India 97.45 L&T Sambalpur-Rourkela Tollway Limited 87 97.45 97.45 97.45 97.45 India Kudgi Transmission Limited 86 97.45 97.45 97.45 97.45 India L&T Samakhiali Gandhidham Tollway Limited 85 97.45 97.45 97.45 97.45 India L&T Deccan Tollways Limited 84 97.45 97.45 97.45 2664.40 Country of incorporation crore It is not practicable to estimate the timing of cash outflows, if any, in respect of matters at (a) to (d) above pending resolution of the arbitration/appellate proceedings. Further, the liability mentioned in (a) to (d) above excludes interest and penalty in cases where the Company has determined that the possibility of such levy is remote. Particulars of contingent liabilities in respect of joint ventures is given in Note Q(15). NOTE [J] Commitments Particulars As at 31-3-2016 As at 31-3-2015 3 crore Estimated amount of contracts remaining to be executed on capital account (net of advances) * * * Particulars of capital commitments in respect of joint ventures are given in Note Q(15). 9041.92 23044.13 NOTE [K] Revenue from operations Particulars crore 2015-16 2 1 (a) (b) Particulars Claims against the Company not acknowledged as debts Sales tax liability that may arise in respect of matters in appeal Excise duty/service tax/custom duty/entry tax/stamp duty/ municipal cess liability that may arise, including those in respect of matters in appeal/challenged by the Company in Writ (d) Income tax liability (including penalty) that may arise in respect of which the Company is in appeal As at 31-3-2016 crore 2462.02 The Company expects reimbursements of 27.09 crore in respect of the above contingent liabilities. 222.34 767.85 As at 31-3-2015 crore 1596.25 217.42 227.24 1170.01 Notes: 881.16 Contingent liabilities 2014-15 crore Toll collection and related activity 1477.65 1006.41 Servicing 626.66 693.01 Commission 155.00 1559.17 140.10 88.54 100.15 Charter hire income 91.81 199.39 169.16 Investment/portfolio management and trusteeship fees 340.80 Income from port services crore 1444.76 7050.69 crore crore Sales & service: Construction and project related activity [Note Q(7)(a)] 68620.17 60702.03 Manufacturing and trading activity 10091.25 Property development activity [Note Q(7)(c)] 9514.69 3017.55 2592.42 Software development products and services 5824.66 4941.83 Income from financing activity/annuity based projects and finance income from lease of power plant 8081.97 Engineering and service fees 139.17 NOTE [I] 339 Less: Contingent provision against standard assets NOTE [H(VI)] Other current assets Particulars Due from customers (construction and project related activity) Due from customers (property development activity) [Note Q(7)(c)] Interest accrued on investments and others Interest accrued on inter-corporate deposit Unbilled revenue Debentures Unamortised expenses Billed interest and other receivable Others As at 31-3-2016 crore crore As at 31-3-2015 crore crore 7625.67 7830.08 Accrual of fee income 45.48 Finance lease Considered good: 862.98 6732.39 7445.07 284.62 310.23 Property development land 120.11 Notes forming part of the Consolidated Accounts (contd.) Term loans NOTE [H(V)(a)] Secured loans: Considered good: Term loans Finance lease Debentures Particulars Less: Contingent provision against standard assets Unsecured loans: Short term loans and advances towards financing activities Notes forming part of the Consolidated Accounts (contd.) 63.66 59.78 crore 26526.43 178.64 22854.72 129.88 778.28 711.89 2.62 545.09 325.75 crore 69.21 1.71 118.80 123.39 28344.17 2.13 147.85 105.66 24343.90 66.02 123.73 As at 31-3-2015 11434.85 7794.88 7953.52 132.53 32.53 7662.35 7920.99 4369.76 3189.63 As at 31-3-2016 345.08 18.23 40.00 4733.07 27.01 3525.38 11.52 4706.06 3513.86 12368.41 295.75 Fees for operation and maintenance of power plant 1960.36 1531.79 crore crore crore Materials consumed: Raw materials and components Less: Scrap sales 13644.22 97.31 10596.92 145.75 crore Construction materials consumed 10451.17 20091.51 Purchase of stock-in-trade 1349.93 1426.56 Value of stock-in-trade transferred on sale of business (16.49) 1333.44 Stores, spares and tools consumed 13546.91 20036.82 1935.55 2014-15 Particulars (0.47) 444.70 386.52 444.23 Net gain/(loss) on sale of fixed assets (net) 62.79 19.58 Lease rental 2.18 2015-16 0.62 114.44 1183.03 126.01 1074.74 341 Notes forming part of the Consolidated Accounts (contd.) NOTE [M] Manufacturing, construction and operating expenses Miscellaneous income (net of expenses) 300.08 Sub-contracting charges 19565.57 6582.09 7445.07 Less: Opening stock: Finished goods 403.80 Completed property 1658.63 1901.16 310.23 Work-in-progress 4193.05 4560.05 Work-in-progress 126.67 178.02 Stock-in-trade 349.31 2841.98 Cost of built up space and property development land: Change in inventories of finished goods, work-in-progress and 323.73 91.81 1426.56 2501.80 17426.16 stock-in-trade: Closing stock: Finished goods 295.11 403.80 Property development land Stock-in-trade 178.02 4586.33 4560.05 Cost of built up space and property development land: Work-in-progress 1196.93 1901.16 Completed property 179.99 Current investments (net) 86.44 Long term investments (net) Lease rentals Property maintenance recoveries 102226.59 crore 90346.76 27.34 0.45 191.92 Income from hire of plant & equipment 242.22 14.02 Facility management income 34.54 47.86 Premium earned (net) on related forward exchange contract 401.97 262.11 Profit on sale of SPVS of Developmental Projects and Realty Business Miscellaneous income 14.23 276.69 Other operational revenue: crore Premium earned (net) 297.83 206.14 102226.59 90346.76 Carried forward 102226.59 90346.76 Brought forward 340 Notes forming part of the Consolidated Accounts (contd.) NOTE [K] Revenue from operations (contd.) Particulars 2015-16 crore 2014-15 crore LARSEN & TOUBRO 1381.76 348.95 466.48 10.33 147.12 418.24 404.74 Dividend income: Trade investments Others 2.15 2.07 163.86 82.54 84.69 76.81 From current investments 114.17 2.75 198.86 79.56 Net gain/(loss) on sale of investments: 74.74 10.05 Joint venture & associate companies Others Interest income on others: 1295.64 103522.23 2414.90 92761.66 K(I) Revenue from sales and service includes 403.61 crore (previous year: 1324.37 crore) for price variations net of liquidated damages in terms of contracts with the customers. NOTE [L] Other income 2015-16 2014-15 Particulars crore crore crore crore Interest income: Interest income on long term investments 44.97 Interest income on current investments 199.36 34.88 212.41 (712.68) Other manufacturing, construction and operating expenses: Work-in-progress (1.40) NOTE [O(1)] Aggregation of expenses disclosed vide notes M, N, O and P in respect of specific items is as follows: Notes forming part of the Consolidated Accounts (contd.) LARSEN & TOUBRO 344 5471.40 247.67 56.57 175.39 crore 35.39 383.39 5.84 433.97 6146.68 208.75 97.29 Other provisions [Note Q(16)(a)] Provision/(reversal) for standard assets 170.24 Exchange (gain)/loss (19.34) 77.92 2015-16 Sr. 2 1335.87 123.06 1212.81 Power and fuel 1 Total Note P 2014-15 Note O Note M Total Note P Note O Note N Note M No. Nature of expenses Note N Packing and forwarding Provision/(reversal) for diminution in value of investments (net) Provision/(reversal) for foreseeable losses on construction contracts 119.74 235.90 72.73 75.36 179.60 187.96 202.44 218.10 6.49 2.43 598.59 586.46 399.47 417.63 22.04 21.50 556.10 631.25 3.21 77.82 15.10 134.84 778.91 Allowances for doubtful debts, advances and non-performing assets (net) 379.17 12.63 Receivable discounting charges-non-recourse 8.78 14.86 Less: Allowances for doubtful debts and advances written back 392.17 242.39 394.03 766.08 686.62 Miscellaneous expenses [Note O(1)] 75.78 45.29 Discount on sales 121.13 128.73 Bad debts and advances written off 388.41 186.56 968.23 574.97 414.65 1260.96 Miscellaneous expenses 11 4828.91 Finance costs 10 13706.26 3871.42 7989.25 I 3041.22 9094.94 Employee benefit expenses 9 399.47 352.05 793.66 417.63 376.03 maintenance 4611.32 General repairs and 7870.13 1947.58 1677.34 2443.42 NOTE [P] Finance costs Interest expenses Other borrowing costs Particulars Exchange loss (attributable to finance costs) NOTE [Q] 4158.13 Q(1) Basis of preparation 2015-16 2014-15 crore Excise duty 766.08 2840.05 6998.18 11860.67 751.52 a) 8 48.19 22.04 520.22 517.81 Rent 4 437.23 128.83 70.64 237.76 1038.03 408.08 419.83 109.90 200.48 Insurance 3 607.79 193.14 1074.48 106.25 109.45 449.98 858.06 5 26.15 43.02 21.50 21.52 Repairs to buildings 7 1523.59 556.10 1706.72 967.49 631.25 1075.47 Travelling and conveyance 6 397.46 143.09 507.44 254.37 160.16 347.28 Rates and taxes 143.09 160.16 686.62 520.22 352.05 376.03 General repairs and maintenance [Note O(1)] 26.15 21.52 Repairs to buildings [Note O(1)] 18.14 91.25 Port operation expenses Repairs to plant & equipment 1075.47 254.37 347.28 Rates and taxes [Note O(1)] 408.08 517.81 Rent [Note O(I)] 51184.52 967.49 crore 12.62 Operating cost of shipping business Contribution to and provision for: 3634.90 4356.11 Salaries, wages and bonus Staff expenses for software development business: [Note O(1)] 4158.13 4828.91 4158.13 41.28 4828.91 Finance cost of financial services business and finance lease activity: 8026.38 8224.78 1677.34 1260.96 Miscellaneous expenses [Note O(1)] 59.37 51.14 Interest and other financing charges [Note O(1)] Provident fund and pension fund crore 4222.11 4470.70 1149.76 1268.75 Engineering, professional, technical and consultancy fees 147.65 Insurance claim incurred (net) Power and fuel [Note O(1)] 1212.81 Royalty and technical know-how fees Insurance [Note O(1)] 48.58 388.41 Hire charges-plant & equipment and others 999.78 Bank guarantee charges 134.33 1116.73 146.47 449.98 Packing and forwarding [Note O(1)] *crore 57281.27 200.48 Carried forward Brought forward crore Particulars 2014-15 2015-16 Manufacturing, construction and operating expenses (contd.) NOTE [M] Notes forming part of the Consolidated Accounts (contd.) 237.76 LARSEN & TOUBRO 218.96 414.65 22.14 18.72 968.23 51184.52 4222.11 57281.27 4470.70 342 53.77 Travelling and conveyance [Note O(l)] Superannuation/employee pension schemes Power and fuel [Note O(1)] crore crore crore Particulars 2014-15 2015-16 8059.89 Packing and forwarding [Note O(l)] 9204.84 (159.67) 841.97 839.72 70.64 LARSEN & TOUBRO 109.90 64.18 62.67 (48.93) 309.61 Insurance [Note O(I)] Rates and taxes [Note O(I)] 109.45 193.14 186.56 106.25 123.06 Bank charges Employees and others Distributors and agents Rent [Note O(1)] Commission: Advertising and publicity Telephone, postage and telegrams 47.94 Directors' fees Professional fees General repairs and maintenance [Note O(1)] Repairs to buildings [Note O(I)] Travelling and conveyance [Note O(I)] Stationery and printing 345.85 crore 101.75 Employee benefits expense NOTE [N] Staff welfare expenses 343 67240.45 74946.28 3871.42 105.40 Salaries, wages and bonus 5.21 Gratuity funds [Note Q(8)(ii)(b)] 14.54 19.61 Expenses on employee stock option scheme [Note A(VIII)(e)] (10.98) 4611.32 160.21 192.67 4.47 Particulars Notes forming part of the Consolidated Accounts (contd.) Provident fund and pension fund 178.06 26.15 57.45 186.65 crore 6822.42 crore crore 8006.37 128.83 crore 2014-15 2015-16 Contribution to and provision for: NOTE [O] Sales, administration and other expenses 4.29 Superannuation/employee pension schemes Recoveries on account of deputation charge Gratuity funds [Note Q(8)(ii)(b)] Expenses on employee stock option scheme [Note A(VIII)(e)] Employee medical & other insurance premium expenses [Note O(1)] Staff welfare expenses 26.15 23.18 1.82 14.54 88.08 2.36 III Amount included as part of "finance cost" 19.00 25.71 I 19.61 Il Amount included as part of "manufacturing construction and operating expenses" 105.94 134.27 16.05 4.56 Actual return on plan assets 154.81 131.65 47.77 42.06 61.56 20.61 9.25 118.76 development 0.01 0.11 IV Amount capitalised on new product 47.73 45.95 15.91 38.38 Total (I+II+III+IV) 105.40 10.22 Amount included in "employee benefits expense" 0.53 9 Actuarial gain/(loss) not recognised in books (0.89) (0.53) 8 Business Combination (0.16) 7 Adjustment for earlier years 6 Effect of any curtailment or settlement 0.11 0.14 0.14 0.53 0.06 5 Past service cost 48.99 2.14 101.75 35.43 10 Translation adjustments | 154.81 131.65 47.77 42.06 61.56 20.61 134.27 118.76 Total (1 to 11) (0.60) (0.93) 11 Amount capitalised out of the above (0.30) (0.34) 0.10 66.00 0.66 210.50 0.53 0.16 Add: Past service cost (7.12) (8.25) (45.28) (143.75) Less: Benefits paid 10.33 38.80 (9.30) 69.27 9.54 Add/(less): Actuarial losses/(gains) Transfer-in/(out) (15.32) 49.57 iii) 29.25 (17.60) (22.25) (15.11) (388.17) (343.40) employees 739.31 193.31 771.08 (24.99) 5.51 Add/(less): Translation adjustments Closing balance of the present value of defined benefit obligation (0.83) (11.19) (2.12) 1.40 Add: Adjustment for earlier years 0.33 (1.19) Add: Business combination/acquisition (0.14) 0.39 0.51 Add: Liabilities assumed on transfer of 313.24 350.52 Employee ii) defined benefit obligation Opening balance of the present value of As at As at Company pension plan Post-retirement Trust-managed medical benefit plan provident fund plan As at As at As at As at As at 31-3-2016 31-3-2015 | 31-3-2016 31-3-2015 | 31-3-2016 31-3-2015 31-3-2016 31-3-2015 As at Particulars Gratuity plan crore The changes in the present value of defined benefit obligation representing reconciliation of opening and closing balances thereof are as follows: c) NOTE [Q] (contd.) Notes forming part of the Consolidated Accounts (contd.) LARSEN & TOUBRO 739.31 Add: Current service cost 111.43 583.41 181.09 85.42 Employer i) Add: Contribution by plan participants 1.58 131.96$ 180.76$ 16.82 237.71 201.44 16.90 12.19 14.91 258.42 44.58 Add: Interest cost 4.61 10.42 14.86 188.93 2830.66 2465.71 221.47 126.93 48.16 (34.37) 221.47 221.47 10.33 178.64 v) 2303.20 1526.41 Amount of work-in-progress and the value of inventories [Note H(II)] iv) 62.86 129.88 60.27 4005.78 ii) Aggregate amount of costs incurred and profits recognised as at the end of the financial year iii) Amount of customer advances received 1559.17 1444.76 i) Amount of project revenue recognised for the financial year [Note K] 2014-15 2015-16 2510.94 Excess of revenue recognised over actual bills raised (unbilled revenue) [Note H(VI)] Q(8) Disclosure pursuant to Accounting Standard (AS) 15 (Revised) "Employee Benefits" Defined contribution plans: [Note R(7)(b)(i)] Amount of expense. Out of above, 156.49 crore (previous year: the Statement of Profit and Loss and ₹ 1.76 crore (previous year: 1.42 crore) is included in capital work-in-progress. i. 158.25 crore (previous year: 110.69 crore) is recognised as an 109.27 crore) is included in "employee benefits expense" [Note N] in A) Present value of defined benefit As at As at 31-3-2016 31-3-2015 As at 31-3-2015 As at 31-3-2016 Trust-managed provident fund plan crore Company pension plan Post-retirement medical benefit plan As at As at As at As at 31-3-2016 31-3-2015 31-3-2016 31-3-2015 Gratuity plan Particulars 352 a) The amounts recognised in Balance Sheet are as follows: Defined benefit plans: [Note R(7)(b)(ii)] ii. NOTE [Q] (contd.) Notes forming part of the Consolidated Accounts (contd.) 351 Particulars crore (c) Disclosures pursuant to Guidance Note on Accounting for Real Estate Transactions (Revised 2012) issued by the Institute of Chartered Accountants of India iv) Retention amounts by customers for contracts in progress as at the end of the financial year *Includes provision for foreseeable loss - 288.89 crore (previous year: 212.32 crore) (b) As part of periodic review of estimates used in determining cost of completion of projects, the Company revised certain estimates used in civil construction jobs under execution as on March 31, 2016. As a result, the revenue and profit before tax for the year increased by 395.73 crore. 6413.80 251.14 6664.94 Elimination (3260.21) (3260.21) (2665.35) (2665.35) Total Revenue 103522.23 103522.23 92761.66 92761.66 RESULT Infrastructure 181.08 5274.05 Provision for income tax in respect of earlier years 48.98 crore (net loss) [previous year: 0.06 crore (net gain)] Credit for Minimum Alternate Tax (MAT) entitlement obligation 198.25 crore (previous year: 96.76 crore) under section 115JB Tax effect of 0.13 crore (previous year: 9.29 crore) on account of debenture/share/foreign currency convertible bond issue expenses and premium on inflation linked debentures has been credited to securities premium account. 6431.24 12432.59 26600.83 9206.14 Amount of customer advances outstanding for contracts in progress as at the end of the financial year iii) 222933.58 256239.21 Aggregate amount of contract costs incurred and recognised profits (less recognised losses*) as at the end of the financial year for all contracts in progress as at that date ii) 60702.03 2014-15 2015-16 68620.17 Contract revenue recognised for the financial year [Note K] i) Particulars crore Q(7) (a) Disclosures pursuant to Accounting Standard (AS) 7 (Revised) "Construction Contracts": iii) Translation effect on account of non-integral foreign operation ₹ 0.66 crore (net gain) [previous year: 0.10 crore (net loss)] 29.25 Wholly funded Less: Fair value of plan assets 4.61 10.42 14.86 85.42 111.43 1 Current service cost 31-3-2016 31-3-2015 1.58 31-3-2016 31-3-2015 31-3-2016 31-3-2015 31-3-2016 Company pension plan Trust-managed provident fund plan Post-retirement medical benefit plan Particulars Gratuity plan crore The amounts recognised in Statement of Profit and Loss are as follows: 31-3-2015 131.96 180.76$ 2 Interest cost 48.16 38.80 (9.30) 36.39 (2.83) 4 Actuarial losses/(gains) (202.50) (239.08) (33.00) (36.63) 3 Expected (return) on plan assets 201.44 237.71 16.83 16.90 12.20 14.91 44.58 b) 10.43 0.61 8.58 221.17 180.12 247.90 225.04 192.49 202.91 Amount to be recognised as liability or (asset) asset (limit in para 59(b)) 10.48 4.33 4.76 0.30 39.66 0.96 0.82 Less: Unrecognised past service costs Add: Amount not recognised as an 12.19 30.89 3095.78 2830.66 3102.10 2811.65 3083.59 2799.77 626.08 595.41 145.00 143.90 193.31 181.08 287.56 771.08 739.31 193.31 181.08 287.56 572.93 518.60 4.16 Wholly unfunded 19.01 Sheet 3.55 19.01 4.16 221.17 192.49 180.12 247.90 17.22 14.59 16.82 13.47 175.27 165.53 231.08 207.70 Net liability/(asset) - non-current 202.91 225.04 202.91 225.04 Net liability/(asset) - current Net liability/(asset) 19.01 4.16 221.17 192.49 180.12 247.90 225.04 202.91 Assets Liabilities B) Amounts reflected in the Balance 287.56 184.03 2830.66 Particulars As at 31-3-2016 As at 31-3-2015 As at 31-3-2014 As at 31-3-2013 As at 31-3-2012 * crore 1 Defined benefit obligation Experience adjustment plan liabilities 192.49 (6.69) 180.12 12.60 125.82 14.76 117.70 0.69 92.64 (6.62) Post-retirement medical benefit plan (unfunded) The amounts pertaining to defined benefit plans are as follows: NOTE [Q] (contd.) g) Notes forming part of the Consolidated Accounts (contd.) A one percentage point change in assumed healthcare cost trend rates would have the following effects on the aggregate of the service cost and interest cost and defined benefit obligation: crore Effect of 1% increase Particulars 2015-16 2014-15 Effect of 1% decrease 2015-16 2014-15 Effect on the aggregate of the service cost and interest cost 5.83 Effect on defined benefit obligation 25.94 5.54 23.88 (4.30) (19.61) (4.27) (18.94) LARSEN & TOUBRO 2 The obligation of the Company under the post-retirement medical benefit plan is limited to the overall ceiling limits. At present, healthcare cost, as indicated in the principal actuarial assumption given above, has been assumed to increase at 5% p.a. Gratuity plan (funded/unfunded) 771.08 30.18 Experience adjustment plan assets 7.11 34.41 (8.11) (13.96) (0.19) 26.18 3 Defined benefit obligation 247.90 Experience adjustment plan liabilities 11.45 221.17 5.13 188.52 198.36 Post-retirement pension plan (unfunded) 1.42 19.88 4.18 739.31 558.11 512.49 432.29 Plan assets 572.93 518.60 456.76 382.83 322.04 Surplus/(deficit) (198.15) (220.71) (101.35) (133.64) (110.39) Experience adjustment plan liabilities Defined benefit obligation The interest payment obligation of trust-managed provident fund is assumed to be adequately covered by the interest income on long term investments of the fund. Any shortfall in the interest income over the interest obligation is recognised immediately in the Statement of Profit and Loss. For gratuity plan the attrition rate varies from 1% to 6% (previous year: 1% to 6%) for various age groups. The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors, such as supply and demand the employment market. 9. 2% Fixed deposits under special deposit scheme framed by central government for provident funds Insurer managed funds Public sector unit bonds 354 9% 2% 10% 14% 17% 39% 42% Others 9% 8% 1% Equity shares of listed companies 8% 9% 4247.26 As at 31-3-2015 Trust-managed provident fund plan As at 31-3-2016 As at 31-3-2015 Government of India securities 23% 31% 25% 24% State government securities 18% 11% 16% 15% Corporate bonds 34% 30% 1% 1% f) Principal actuarial assumptions at the Balance Sheet date (expressed as weighted averages): 4 Salary Growth rate: a) Gratuity plan b) Company pension plan 5. Attrition Rate: 5.00% 5.00% 6.00% 6.00% a) For post-retirement medical benefit plan & Company pension plan, the attrition rate varies from 2% to 8% (previous year: 2% to 8%) for various age groups. b) 6. 7. 8. + (0.22) 5.00% 3 Annual increase in healthcare costs (see Note 8 below) As at 31-3-2016 As at 31-3-2015 b) Company pension plan 1 Discount rate: Gratuity plan Post-retirement medical benefit plan 2 Expected return on plan assets: 7.79% 7.83% 7.79% 7.83% 7.79% 7.83% 7.50% 7.50% 5.00% (2.79) 23.21 4 The major categories of plan assets as a percentage of total plan assets are as follows: NOTE [Q] (contd.) e) Notes forming part of the Consolidated Accounts (contd.) 353 $ Employer's contribution to provident fund # Employer's and employees' contribution paid in advance 145.15 crore (previous year: 198.84 crore) towards its trust-managed provident fund plan during the year 2015-16. Gratuity plan The Company expects to fund ₹ 66.85 crore (previous year: 91.43 crore) towards its gratuity plan and The trust formed by the Company manages the investments of provident funds and gratuity fund. Expected return on plan assets is determined based on the assessment made at the beginning of the year on the return expected Basis used to determine the overall expected return: based on their value at the time of redemption, assuming a constant rate of return to maturity. * Notes: The fair value of the plan assets under the trust managed provident fund plan has been determined at amounts 2811.65 3102.10 on its existing portfolio, along with the estimated increment to the plan assets and expected yield on the respective assets in the portfolio during the year. [Note 10(ii)(f)(7)] infra. Particulars 7134.72 321.61 7654.41 Financial Services 7540.08 1.08 7541.16 6393.07 7.43 6400.50 Developmental Projects 5137.32 8.78 5146.10 5148.03 7.38 5155.41 Others 6813.11 518.60 (18.17) 0.23 12.05 32.99 12.36 Add/(Less): Actuarial gains/(losses) 2444.74 As at 31-3-2015 Trust-managed provident fund plan As at 31-3-2016 2811.65 As at 31-3-2015 456.76 33.00 36.63 Add: Expected return on plan assets* 518.60 Opening balance of the fair value of the plan assets As at 31-3-2016 Particulars Gratuity plan crore Changes in the fair value of plan assets representing reconciliation of the opening and closing balances thereof are as follows: d) 239.08 19.34 65.78 202.50 Add: Contribution by the employer 0.82 (324.49) (396.03) (42.14) (143.75) (0.20) 1.36 572.93 Closing balance of the plan assets Add: Adjustment for earlier years Add: Business combination/disposal (net) Less: Benefits paid 322.15 309.27 Add: Contribution by plan participants Add/(less): Transfer in/(out) 158.75 124.91 36.94 147.93 8.00 221.47 3095.78 7588.63 160.70 The interest payment obligation of trust-managed provident fund is assumed to be adequately covered by the interest income on long term investments of the fund. Any shortfall in the interest income over the interest obligation is recognised immediately in the Statement of Profit and Loss as actuarial loss. Any loss/gain arising out of the investment risk and actuarial risk associated with the plan is also recognised as expense or income in the period in which such loss/gain occurs. Further, an amount of 9.87 crore (previous year: provision of 28.80 crore) has been reversed based on actuarial valuation towards the future obligation arising out of interest rate guarantee associated with the plan. 355 Notes forming part of the Consolidated Accounts (contd.) NOTE [Q] (contd.) Q(9) Disclosure pursuant to Accounting Standard (AS) 17 "Segment Reporting" a) Primary segments (business segments) 356 The Company manages provident fund plan through a provident fund trust for its employees which is permitted under the Provident Fund and Miscellaneous Provisions Act, 1952. The plan envisages contribution by employer and employees and guarantees interest at the rate notified by the provident fund authority. The contribution by employer and employee together with interest are payable at the time of separation from service or retirement whichever is earlier. The benefit under this plan vests immediately on rendering of service. crore For the year ended 31-3-2016 External Inter-segment Total For the year ended 31-3-2015 External Inter-segment Total REVENUE Infrastructure 48797.10 Particulars Trust managed provident fund plan: 4. In addition to contribution to state-managed pension plan (EPS scheme), the Company operates a post retirement pension scheme, which is discretionary in nature for certain cadres of employees. The quantum of pension depends on the cadre of the employee at the time of retirement. Trust managed provident fund plan (funded) Defined benefit obligation 3095.78 Plan assets Surplus/(deficit) 3102.10 (4.16) 2830.66 2465.71 2058.91 1833.45 2811.65 2444.74 2027.93 1791.04 (19.01) (20.97) (30.98) (42.41) General descriptions of defined benefit plans: h) 1. 2. 3. Gratuity plan: The Company operates gratuity plan through a trust wherein every employee is entitled to the benefit equivalent to fifteen days salary last drawn for each completed year of service. The same is payable on termination of service or retirement whichever is earlier. The benefit vests after five years of continuous service. The company's scheme is more favourable as compared to the obligation under Payment of Gratuity Act, 1972. A small part of the gratuity plan, which is not material is unfunded and managed within the Company. The unfunded obligation towards gratuity also includes gratuity payable to employees outside India under the applicable local laws. Post-retirement medical care plan: The Post-retirement medical benefit plan provides for reimbursement of health care costs to certain categories of employees post their retirement. The reimbursement is subject to an overall ceiling sanctioned based on cadre of the employee at the time of retirement. Company's pension plan: 1589.77 50386.87 43426.31 1428.10 3623.78 Electrical & Automation 4960.84 485.48 5446.32 5060.81 398.81 5459.62 Hydrocarbon 8786.55 53.23 8839.78 7351.41 80.11 7431.52 IT & Technology Services 8955.92 164.44 9116.62 3459.34 199.40 44854.41 Power 6992.85 17.83 7010.68 4738.49 17.43 4755.92 Metallurgical and Material Handling 2414.66 422.33 2836.99 3181.77 244.73 3426.50 Heavy Engineering 3123.80 3323.20 Power L&T-SVEC Joint Venture 539.48 90.00 90.00 India 26.00 26.00 India 43.00 India 43.00 49.00 49.00 India 26.00 26.00 India 65.00 India 65.00 51.00 India India L&T-Shanghai Urban Construction (Group) Corporation Joint Venture CC27 Delhi Larsen and Toubro Limited-Scomi Engineering BHD Consortium-Residual Joint Works Joint Venture 12 a) 11 50.00 50.00 India 51.00 Larsen and Toubro Limited-Shapoorji Pallonji & Co. Ltd. Joint Venture 60.00 60.00 India Metro Tunneling Delhi-L&T Shanghai Urban Construction (Group) Corporation Joint Venture 9 75.00 75.00 10 India interest (%) Proportion of ownership # The Group has sold its stake on March 29, 2016 ** The Group has sold its stake in July and August 2015 *The Group has sold its stake on March 31, 2016 ^ The group has acquired stake in July, 2015. Investment in the associate company has been accounted in accordance with Accounting Standard (AS) 13, "Accounting for Investments" and not as per Accounting Standard (AS) 23, "Accounting for Investments in Associates in Consolidated Financial Statements", as the associate company operates under severe long term restrictions that significantly impair its ability to transfer funds to the Company. @The company is under liquidation 23.87 23.87 $ The Group has sold its stake on December 21, 2015 India 42.85 42.85 42.85 42.85 India Magtorq Private Limited 11 12 Grameen Capital India Limited ^ 349 L&T-Hochtief Seabird Joint Venture L&T-Shanghai Urban Construction (Group) Corporation Joint Venture As at 31-3-2015 Proportion of ownership interest (%) As at 31-3-2016 Country of incorporation Metro Tunneling Group HCC-L&T Purulia Joint Venture Desbuild-L&T Joint Venture International Metro Civil Contractors Joint Venture L&T-AM Tapovan Joint Venture Jointly controlled entities - Indian joint ventures No. Sr. Name of joint venture 1234567∞ NOTE [Q] (contd.) Notes forming part of the Consolidated Accounts (contd.) Metro Tunneling Chennai-L&T Shanghai Urban Construction (Group) Corporation Joint Venture 8 68.00 26.00 68.00 60.00 3226282≈≈≈3 Jointly controlled operations - Indian joint ventures 8811 82.30 Malaysia PESB and Larsen & Toubro Joint Venture $$ 75.00 L&T Sojitz Consortium 60.00 UAE Qatar L&T-AL-Sraiya LRDP 6 Joint Venture $ 21 22.00 22.00 Qatar Aktor- Larsen & Toubro-Yapi Merkezi-STFA-Al Jaber Engineering Joint Venture L&T-Delma Mafraq Joint Venture 60.00 20 India L&T-KBL (UJV) Hyderabad 31 India India India Larsen and Toubro Limited & Bharat Rail Automation Pvt. Ltd. Joint Venture (part 2) Larsen and Toubro Limited & Bharat Rail Automation Pvt. Ltd. Joint Venture (part 3) IIS L&T Consortium 30 29 24 India 27 India 31-3-2016 India Patel-L&T Consortium 25 India L&T-KBL - MAYTAS Joint Venture 19 2222 Arabia India Bauer-L&T Geo Joint Venture * 55.00 55.00 India Larsen & Toubro Limited & NCC Limited Joint Venture 50.00 50.00 50.00 Larsen and Toubro Limited-Scomi Engineering BHD Consortium-O&M Joint Venture 12 b) 2345 15 14 13 60.00 India DAEWOO and L&T Joint Venture India 50.00 29.00 29.00 Kingdom of Saudi Civil Works Joint Venture 50.00 50.00 Iran Indiran Engineering Projects and Systems Kish PJSC 17 65.00 65.00 UAE L&T-Eastern Joint Venture @ 678 18 16 Jointly controlled entities - Foreign joint ventures India 26.00 India Rishi Consfab Private Limited $ 100.00 USA L&T Technology Services LLC 37 72.50 72.50 72.50 100.00 72.50 Larsen & Toubro T&D SA (Proprietary) Limited 36 100.00 100.00 Brazil Larsen & Toubro Consultoria E Projeto Ltda * 35 South Africa 100.00 100.00 38 94.96 94.96 Spain L&T Information Technology Spain SL $ 41 UAE L&T Global Holdings Limited ^^ 100.00 40 L&T Infotech Austria GmbH LLC ^ 39 of China 100.00 100.00 Peoples Republic Larsen & Toubro (Qingdao) Rubber Machinery Company Limited ** Austria 49.00 100.00 49.00 100.00 Indonesia PT Tamco Indonesia 31 Proportion of voting power held (%) As at 31-3-2015 Proportion of ownership interest (%) Proportion of voting power held (%) 100.00 As at 31-3-2016 Country of incorporation No. Name of subsidiary company Sr. NOTE [Q] (contd.) Notes forming part of the Consolidated Accounts (contd.) LARSEN & TOUBRO Proportion of ownership interest (%) 100.00 100.00 32 Kuwait Kana Controls General Trading & Contracting Company W.L.L. ## 34 100.00 100.00 100.00 100.00 UAE L&T Electrical & Automation FZE 33 Oman 70.00 70.00 70.00 70.00 Sultanate of Larsen & Toubro Heavy Engineering LLC 100.00 100.00 94.96 94.96 50.00 50.00 50.00 Qatar Larsen & Toubro Qatar & HBK Contracting LLC 6 26.06 50.00 26.06 Salzer Electronics Limited ** 5 23.14 23.14 India Vizag IT Park Limited * 4 India 7 L&T Camp Facilities LLC UAE 10 26.00 26.00 India JSK Electricals Private Limited # 9 16.89 16.89 15.74 15.74 India Feedback Infra Private Limited 8 49.00 49.00 49.00 49.00 21.74 L&T and Scomi Engineering BHD. Joint Venture 21.74 21.74 Proportion of voting power of ownership As at 31-3-2015 Proportion Proportion of voting power As at 31-3-2016 Proportion of ownership Country of incorporation interest (%) No. Sr. $ The company is incorporated on February 1, 2016 ^^ The company is incorporated on February 24, 2016 ^ The company is incorporated on June 18, 2015 **The company is dissolved on June 9, 2015 * The company is dissolved on November 6, 2015 ## The Parent Company, together with its subsidiaries controls the composition of Board of Directors Name of associate company held (%) interest (%) held (%) India International Seaports (Haldia) Private Limited 3 50.00 50.00 50.00 50.00 India Gujarat Leather Industries Limited @ 2 50.00 50.00 50.00 50.00 India L&T-Chiyoda Limited 1 21.74 India Consortium of L&T Hydrocarbon Engineering Limited & Toyo Engineering Company Consortium of L&T Hydrocarbon Engineering Limited and Pipavav Defence & India 2872.09 Electrical & Automation 4607.25 4792.55 1750.93 1906.94 Hydrocarbon 3730.87 6609.29 4572.61 4400.50 IT & Technology Services 4926.99 4660.58 1784.74 1284.04 6670.56 Financial Services 6986.53 Heavy Engineering As at 31-3-2015 Infrastructure 48366.19 39552.78 30265.13 25407.53 Power 6960.42 9905.93 7105.18 6280.23 |Metallurgical & Material Handling 5227.02 4966.66 2035.53 1738.63 8329.70 63365.38 52561.84 55227.64 193805.63 176764.21 147897.94 Capital Expenditure Depreciation, amortisation, impairment & obsolescence included in segment expenses For the year For the year ended ended 41628.15 crore expenses For the year ended For the year Other information For the year ended For the year ended Non-cash expenses other than depreciation included in segment 43527.49 9895.77 10309.09 227524.72 44822.09 Developmental Projects 52972.79 40436.86 21912.37 13390.88 Others 14274.37 14951.80 4851.72 4166.86 217215.63 183909.86 133236.72 106269.79 Unallocable corporate assets/liabilities Total assets/liabilities Segment liabilities As at 31-3-2016 As at 31-3-2015 31-3-2016 Segment assets As at Others 1130.08 1192.13 Total Segment 10664.85 9657.98 Inter segment margin on capital jobs 1674.40 (68.86) 10595.99 9594.91 Unallocated corporate income/(expenditure)(net) 113.64 Operating Profit (PBIT) 10709.63 57.65 (63.07) 621.88 Developmental Projects 1015.84 | Metallurgical and Material Handling 40.11 238.98 Heavy Engineering (192.03) 227.00 Electrical & Automation 498.90 549.23 Hydrocarbon (15.43) (1342.80) IT & Technology Services 1698.25 1316.46 Financial Services 1028.46 9652.56 ended Interest expenses (2840.05) (0.18) | subsidiary companies | Share in profit/(loss) of associate companies (2.51) 2.14 | Minority interest in (income)/losses Profit after tax, minority interest and share in profit of associates Additional tax on dividend distributed/proposed by (444.95) 5090.53 4764.82 LARSEN & TOUBRO Notes forming part of the Consolidated Accounts (contd.) NOTE [Q] (contd.) * crore Other information (201.32) 4964.00 5538.17 Profit after tax Interest income 418.24 Profit before tax(PBT) (before extraordinary 8086.65 404.73 7217.24 items) Profit from extra ordinary items Profit before tax(PBT) (after extraordinary 8086.65 7217.24 items) Provision for current tax (2764.19) (2661.91) Provision for deferred tax 215.71 408.67 (3041.22) 580.58 31-3-2016 31-3-2016 NOTE [Q] (contd.) (c) Segment reporting: segment identification, reportable segments and definition of each reportable segment: Primary/secondary segment reporting format: i) ii) ii) a] b] Notes forming part of the Consolidated Accounts (contd.) The risk-return profile of the Company's business is determined predominantly by the nature of its products and services. Accordingly, the business segments constitute the primary segments for disclosure of segment information. Segment identification Business segments have been identified on the basis of the nature of products/services, the risk-return profile of individual businesses, the organisational structure and the internal reporting system of the Company. Reportable segments Reportable segments have been identified as per the criteria specified in Accounting Standard (AS) 17 "Segment Reporting". iv) Segment composition • Infrastructure segment comprises engineering and construction of building and factories, transportation infrastructure, heavy civil infrastructure, power transmission & distribution and water, smart world and communication projects. In respect of secondary segment information, the Company has identified its geographical segments as (i) domestic and (ii) overseas. The secondary segment information has been disclosed accordingly. Power segment comprises turnkey solutions for coal-based and gas-based thermal power plants including power generation equipment with associated systems and/or balance-of-plant packages. 357 15227.94 ended 31-3-2016 31-3-2015 External revenue by location of customers 70220.17 Carrying amount of segment assets by location of assets 192306.88 7314.48 66835.47 164851.54 31-3-2015 25926.19 103522.23 92761.66 19058.32 217215.63 183909.86 31-3-2016 31-3-2015 Cost incurred on acquisition of tangible and intangible fixed assets 14668.27 6733.23 559.67 581.25 31-3-2016 33302.06 24908.75 Metallurgical & Material Handling segment comprises turnkey solutions for ferrous (iron & steel making) and non-ferrous (aluminium, copper, lead & zinc) metal industries, bulk material & ash handling systems in power, port, steel and mining sector including manufacture and sale of industrial machinery and equipment. Heavy Engineering segment comprises manufacture and supply of custom designed, engineered critical equipment & systems to core sector industries like fertiliser, refinery, petrochemical, chemical, oil & gas, thermal & nuclear power, aerospace and defence. . Electrical & Automation segment comprises manufacture and sale of low and medium voltage switchgear components, custom built low and medium voltage switchboards, electronic energy meters/protection (relays) systems, control & automation products. Electrical & Automation also included medical equipment business in the previous year (upto the date of sale). C. Profit on divestment of the Group's stake in an associate company 45.69 crore (previous year: Nil) b. a. Profit on divestment of the Group's part stake in a subsidiary 263.89 crore (previous year: 203.81 crore) Q(4) Exceptional items [Note R(5)]: NOTE [Q] (contd.) Notes forming part of the Consolidated Accounts (contd.) d. LARSEN & TOUBRO Q(3) Reserves and Surplus shown in the Consolidated Balance Sheet include the Group's share in the respective reserves of subsidiaries and proportionate reserves of joint ventures. Reserves attributable to minority stakeholders are reported as part of minority interest in the Consolidated Balance Sheet. Retained earnings comprise Group's share in general reserve and Statement of Profit and Loss. $$ The joint venture has been entered into on April 29, 2015 $ The joint venture has been entered into on August 30, 2015 ** The joint venture has been entered into on November 7, 2015 The joint venture has been entered into on January 16, 2015 @The joint venture is in process of liquidation Offshore Engineering Company 350 Profit on sale of Foundry Business Unit 48.52 crore (previous year: ₹ Nil) Exceptional items for the previous year ended March 31, 2015 included profit on sale of shares held as equity investment by a subsidiary 143.89 crore Q(5) The expenditure on research and development activities recognised as expense in the Statement of Profit and Loss is 187.33 crore (previous year: 165.07 crore). Further, the Company has incurred capital expenditure on research and development activities as follows: • • . Hydrocarbon segment comprises complete EPC solutions for the global Oil & Gas Industry from front-end design through detailed engineering, modular fabrication, procurement, project management, construction, installation and commissioning. IT & Technology Services segment comprises information technology and integrated engineering services. Financial Services segment comprises retail and corporate finance, housing finance, infrastructure finance, general insurance, asset management of mutual fund schemes and related advisory services. Developmental projects segment comprises development, operation and maintenance of basic infrastructure projects, toll collection including annuity based projects, power development, development and operation of port facilities and providing related advisory services. Others segment includes realty, shipbuilding, manufacture and sale of industrial valves, welding and cutting equipment, manufacture, marketing and servicing of construction equipment and parts thereof, marketing and servicing of mining machinery and parts thereof, manufacture and sale of rubber processing machinery & castings, ready-mix concrete, asphalt & paving materials, mining and aviation. 358 b) of the Income Tax Act, 1961 ii) i) Q(6) a) b) on tangible assets ₹ 5.68 crore (previous year: 7.41 crore) a) on intangible assets being expenditure on new product development 48.19 (previous year: 56.93 crore) [Note R(6)(b)] and on other intangible assets ₹ 6.80 crore (previous year: 5.79 crore) Provision for current tax includes: ended For the year For the year For the year ended 93.01 3.19 4.05 Heavy Engineering 73.23 127.93 171.17 89.72 191.04 3.35 Electrical & Automation 187.98 269.28 146.93 160.77 4.09 2.79 64.38 10.45 Metallurgical & Material Handling 31-3-2015 31-3-2016 31-3-2015 Infrastructure 874.55 439.27 479.28 607.22 19.22 21.52 Power 96.72 68.23 230.78 218.72 4.92 7.14 4.37 31-3-2015 Hydrocarbon 129.29 Others 1408.22 615.71 223.37 223.21 1.83 2.09 472.51 (b) Secondary segments (geographical segments) Domestic Particulars For the year ended For the year ended Overseas For the year Total ended crore 744.93 5202.18 12142.03 212.88 214.62 4.18 5.73 IT & Technology Services 256.70 281.20 239.71 231.66 Financial Services 137.04 117.00 114.21 110.00 1.33 0.92 Developmental Projects 41.01 As at 16.29 Provision for litigation related obligations represents liabilities that are expected to materialise in respect of matters in appeal. 18.91 36.82 40.00 128.95 Metro Tunneling Chennai - L&T Shanghai Urban Construction (Group) Corporation Joint Venture Metro Tunneling Delhi - L&T Shanghai Urban Construction (Group) Corporation Joint Venture Civil Work Joint Venture Associates & joint ventures, including: Accounts Receivable 1 Amount Amounts for major parties Amount Amounts for major parties Nature of transaction/relationship/major parties Sr. No. 2014-15 57.64 2015-16 "Major parties" denote entities accounting for 10% or more of the aggregate for that category of transaction during respective period. Amount due to/from related parties 64.27 59.93 7.59 7.08 6.07 5.04 50.61 47.81 2014-15 2015-16 Total Contribution to superannuation fund on commission crore Feedback Infra Private Limited Total 128.95 Loans & advances recoverable (Including loans and advances towards financing activities) 4 30.00 30.00 Total 30.00 30.00 Metro Tunneling Group 30.00 30.00 Joint ventures: Unsecured loan 3 31.87 18.54 31.87 Total Salzer Electronics Limited 8.19 6.42 7.79 Magtorq Private Limited L&T- Chiyoda Limited 31.87 15.19 Associates & joint ventures, including: Accounts Payable (including acceptance & interest accrued) 2 40.00 40.00 3 Associates & joint ventures, including: Contribution to provident fund Commission 12.57 6.24 2.31 ** M. V. Satish ## D. K. Sen # S. N. Roy R. Shankar Raman S.N. Subrahmanyan M.V. Kotwal 9.38 4.28 K. Venkataramanan * 11.09 23.10 A.M. Naik Key management personnel: 64.27 59.93 Commission to directors @ 13 16.98 36.19 Total 0.24 M. V. Satish ## 0.61 D. K. Sen # 22.81 8.76 8.78 5.59 1 No. Particulars Sr. iii. 362 Commision to Directors comprises: @ NOTE [Q] (contd.) Notes forming part of the Consolidated Accounts (contd.) 361 Includes leave encashment payment 7.89 cr. Appointed w. e. f. January 29, 2016. 64.27 Retired on August 26, 2015. 59.93 ^^ Includes leave encashment payment 13.53 cr. Λ ## Appointed w. e. f. October 1, 2015. # ** Retired on September 30, 2015. * Total 0.93 2.68 5.68 2 L&T Camp Facilities LLC L&T- Chiyoda Limited 87.58 363 9292.61 9525.87 Present value of minimum lease payments receivable 19065.23 18319.95 Less: Unearned finance income 28357.84 27845.82 Gross investment in lease (1+2+3) 20390.00 19696.08 Receivable later than 5 years Notes forming part of the Consolidated Accounts (contd.) 3. 6644.52 Receivable later than 1 year and not later than 5 years 2. As at 31-3-2015 973.64 1505.22 Receivable not later than 1 year 1. As at 31-3-2016 Particulars crore The total gross investment in these leases as on March 31, 2016 and the present value of minimum lease payments receivable as on March 31, 2016 is as under: ii) The Company has given certain assets on finance leases. The leases have a primary period that is fixed and non- cancellable and a secondary period. There are no exceptional/restrictive covenants in the lease agreement. 6994.20 NOTE [Q] (contd.) (b) Operating leases: i) The Company has given assets under non-cancellable operating lease, the future minimum lease payments receivable in respect of which, as at March 31, 2016 are as follows: As at Particulars Present value of minimum lease payments Minimum lease payments crore The minimum lease rentals as at March 31, 2016 and the present value as at March 31, 2016 of minimum lease payments in respect of assets acquired under finance leases are as follows: ii) i) Assets acquired on finance lease comprises of motor vehicles. The leases have a primary period, which is fixed and non-cancellable. The Company has an option to renew the lease for a secondary period. The agreements provide for revision of lease rentals in the event of changes in (a) taxes, if any, leviable on the lease rentals (b) rates of depreciation under the Income Tax Act, 1961 and (c) change in the lessor's cost of borrowings. There are no exceptional/restrictive covenants in the lease agreements. 189.01 142.96 13.99 9.68 100.53 74.66 74.49 58.62 crore As at 31-3-2015 As at 31-3-2016 (a) Finance leases: Where the Company is a Lessee: ii. Total Receivable later than 1 year and not later than 5 years Receivable later than 5 years 3. 2. Receivable not later than 1 year 1. Particulars 364 i) (a) Finance leases: Where the Company is a Lessor: i. Amount Amounts for major parties Amount Amounts for major parties No. Nature of transaction/relationship/major parties Sr. 2014-15 2015-16 crore K. Venkataramanan * A.M. Naik (Key Management Personnel) NOTE [Q] (contd.) Notes forming part of the Consolidated Accounts (contd.) LARSEN & TOUBRO 28.11 87.59 Total 0.01 0.01 K. Venkataramanan * & Mrs. Jyothi Venkataramanan 0.01 0.01 Key management personnel 60.00 Feedback Infra Private Limited 6.73 17.92 19.18 28.10 5 2.22 Due to Whole-time Directors 50.61 Q(11) Disclosure in respect of Leases pursuant to Accounting Standard (AS) 19 "Leases": "Major parties" denote entities who account for 10% or more of the aggregate for that category of transaction during respective period. ## Appointed w. e. f. January 29, 2016. ** Retired on August 26, 2015. # Appointed w. e. f. October 1, 2015. Retired on September 30, 2015. Total M. V. Satish ## D. K. Sen # S.N. Roy R. Shankar Raman S.N. Subrahmanyan M.V. Kotwal ** 50.61 47.83 0.73 2.13 4.48 4.40 6.91 6.90 8.73 9.90 4.91 2.04 7.39 3.77 18.19 17.96 47.83 2.31 1.59 1.70 93.18 Associates & joint ventures, including: Sale of goods/contract revenue & services 2 Amount Amounts for major parties Amount Amounts for major parties Nature of transaction/relationship/major parties Sr. No. 2014-15 2015-16 crore 360 NOTE [Q] (contd.) 87.33 Notes forming part of the Consolidated Accounts (contd.) 187.56 99.29 10.16 123.81 24.04 23.42 37.33 27.99 16.96 187.56 99.29 major parties Amount Amounts for 359 Larsen & Toubro Limited and NCC Limited Joint Venture 10.64 Civil Work Joint Venture 0.44 M. V. Kotwal ** 8.85 K. Venkataramanan * 9.29 Key management personnel 0.11 0.11 0.11 Sale of fixed assets L&T- Chiyoda Limited Total 4 Associates & joint ventures, including: Purchase/lease of fixed assets 3 Total 87.33 93.18 9.58 33.41 34.00 50.12 19.09 10.50 Metro Tunneling Chennai - L&T Shanghai Urban Construction (Group) Corporation Joint Venture Joint Venture CC27 Delhi Construction (Group) Joint Venture Metro Tunneling Delhi - L&T Shanghai Urban L&T-Shanghai Urban Construction (Group) Amount Amounts for major parties 2014-15 2015-16 crore 7 Mr. D. K. Sen (Whole-time Director) # Retired on September 30, 2015. 5 Mr. S. N. Subrahmanyan [Deputy Managing Director and President] ** 3 Mr. M. V. Kotwal (Whole-time Director) 1 Mr. A. M. Naik (Group Executive Chairman) Key management personnel & their relatives: $$ The Joint Venture has been entered into on August 30, 2015 $ The Joint Venture is in the process of dissolution 17 Larsen & Toubro Limited and NCC Limited Joint Venture 13 International Metro Civil Contractors Joint Venture 15 Aktor- Larsen & Toubro-Yapi Merkezi-stfa-Al Jaber Engineering Joint Venture 11 Larsen & Toubro Limited - Shapoorji Pallonji & Co. Limited Joint Venture 9 Metro Tunneling Chennai - L&T Shanghai Urban Construction (Group) Corporation Joint venture 7 L&T ASTCC Joint Venture - Doha$$ 5 L&T-AM Tapovan Joint Venture 3 Desbuild-L&T Joint Venture 1 Metro Tunneling Group @ The Group has sold its stake on March 29, 2016. Joint ventures: * The Group has sold its stake on July and August 2015. 9 Rishi Consfab Private Limited@@ 7 International Seaports (Haldia) Private Limited 5 Vizag IT Park Limited ** 3 Magtorq Private Limited 1 L&T-Chiyoda Limited Associate companies: ii. Q(10) Disclosure of related parties/related party transactions pursuant to Accounting Standard (AS) 18 "Related Party Disclosures": i. Names of the related parties with whom transactions were carried out during the year and description of relationship: NOTE [Q] (contd.) Notes forming part of the Consolidated Accounts (contd.) LARSEN & TOUBRO # Appointed as DMD w. e. f. October 1, 2015. Total Disclosure of related party transactions: 4 Magtorq Private Limited Salzer Electronics Limited Total JSK Electricals Private Limited L&T- Chiyoda Limited Purchase of goods & services (including commission paid) Associates & joint ventures, including: Nature of transaction/relationship/major parties 1 No. Sr. ## Appointed w. e. f. January 29, 2016. ** Retired on August 26, 2015. 8 Mr. M. V. Satish (Whole-time Director) ## 6 Mr. S. N. Roy (Whole-time Director) 4 Mr. R. Shankar Raman (CFO & Whole-time Director) 2 Mr. K. Venkataramanan (CEO & Managing Director) * Mrs. Jyothi Venkataramanan (wife) 18 Indiran Engineering Projects and Systems Kish PJSC 16 L&T-Delma Mafraq Joint Venture 14 Civil Works Joint Venture 12 L&T Shanghai Urban Construction (Group) Corporation Joint Venture CC27 Delhi 10 L&T-Eastern Joint Venture $ 8 Metro Tunneling Delhi - L&T Shanghai Urban Construction (Group) Corporation Joint Venture 6 HCC-L&T Purulia Joint Venture 4 L&T-Shanghai Urban Construction (Group) Corporation Joint Venture 2 L&T-Hochtief Seabird Joint Venture ** The Group has sold its stake on March 31, 2016. @@ The Group has sold its stake on December 21, 2015 8 L&T Camp Facilities LLC 6 Feedback Infra Private Limited JSK Electricals Private Limited @ 2 Salzer Electronics Limited * 31-3-2016 9.29 Receiving of services from related parties Total 28.57 5.60 Aktor-Larsen & Toubro-Yapi Merkezi-stfa-AL Jaber Engineering Joint Venture 32.02 L&T Delma Mafraq Joint Venture 72.63 Civil Work Joint Venture 8.78 3.85 L&T-Chiyoda Limited 143.21 9.45 9.45 Rent received, overheads recovered and miscellaneous income Associates & joint ventures, including: 4.24 5.63 Total 0.40 Salzer Electronics Limited 0.94 2.22 Vizag IT Park Limited 0.76 0.57 1.97 2.46 International Seaports (Haldia) Private Limited Feedback Infra Private Limited 10 143.21 11 Interest Received 1.74 2.02 3.01 9.60 4.20 15.19 4.22 4.52 S. N. Roy R. Shankar Raman S.N. Subrahmanyan M.V. Kotwal **^^ K. Venkataramanan *^ A.M. Naik 16.98 36.19 Payment of salaries/perquisites (other than commission) Key management personnel: 12 15.67 7.69 Total 6.32 7.69 Feedback Infra Private Limited 9.32 The Dhamra Port Company Limited 15.67 7.69 Associates & joint ventures, including: 4.24 5.63 Associates & joint ventures, including: Dividend received Rent paid 7 0.23 1.04 2.48 1.89 0.59 Total Civil Work Joint Venture L&T-Chiyoda Limited 0.77 Feedback Infra Private Limited 1.04 2.48 Charges paid for miscellaneous services 6 3.01 8.49 Total 1.89 Civil Work Joint Venture 0.77 Feedback Infra Private Limited 2.21 6.60 L&T-Chiyoda Limited 3.01 8.49 Associates & joint ventures, including: 0.01 5 0.01 0.01 9 Amount Amounts for major parties Amount Amounts for major parties Nature of transaction/relationship/major parties Sr. No. 2014-15 2015-16 crore NOTE [Q] (contd.) Notes forming part of the Consolidated Accounts (contd.) LARSEN & TOUBRO 21.12 252.91 132.31 69.20 32.30 L&T-Delma Mafraq Joint Venture Civil Work Joint Venture Aktor- Larsen & Toubro-Yapi Merkezi-stfa-Al Jaber Engineering Joint Venture L&T-Chiyoda Limited Total 21.06 21.12 252.91 Charges for deputation of employees to related parties Associates & joint ventures, including: 8 0.01 0.01 Total 0.01 K. Venkataramanan * & Mrs. Jyothi Venkataramanan Periodic major maintenance represents provision made for resurfacing obligations in accordance with the terms of concession agreement with National Highway Authority of India (NHAI). 1. Payable not later than 1 year As at 31-3-2015 0.18 Short term loans and advances 1437.16 1831.10 Cash and bank balances 376.19 657.11 Trade receivables 12.44 67.12 Inventories 14.38 7.56 Current investments 543.47 123456 0.02 3 Long term loans and advances 0.45 Deferred tax assets (net) 2 81.19 1.20 Capital work-in-progress (c) 0.18 (b) Intangible assets 205.25 448.91 Current assets 583.58 6 Other current assets III 0.02 0.24 Short term provisions 2317.57 2183.90 Other current liabilities 4 732.88 1202.78 Trade payables 33.84 Current maturities of long term borrowings 247.39 346.04 Short term borrowings 123 45 Current liabilities 1.39 9.88 115.14 Other long term liabilities 2 Long term borrowings 1 2 Non-current liabilities Liabilities || 710.34 691.37 Tangible assets (a) Fixed Assets 1 (0.05) 0.09 Larsen & Toubro Consultoria E Projeto 3 Machinery Company Limited 2.00 0.23 (6.11) (1.77) Larsen & Toubro (Qingdao) Rubber 2 247.36 245.11 16.61 (2.25) CSJ Infrastructure Private Limited 1 (during 2015-16) 2014-15 2015-16 31, 2015 as at March Net assets crore Net Assets/ (liabilities) as at the date of disposal ended March 31 minority interest for the year Effect on Group profit/(loss) after Name of company (0.05) Reserves Ltda L&T Infocity Limited Non-current assets Assets | 31-3-2015 31-3-2016 crore Particulars Q(15) The Company's share in respect of the assets, liabilities, reserves, income and expenses, related to its interests in the jointly controlled entities, incorporated in the Consolidated Financial Statements are: 466.96 484.80 10.78 Total Expositions Limited 28.01 38.41 1.82 5.38 Hyderabad International Trade 6 54.11 57.48 (1.41) 2.22 L&T Hitech City Limited 5 135.53 143.62 5.29 7.20 4 Sr. No. 1 7.42 Additional provision during the year 2 663.34 cost- construction contracts 186.55 213.72 10.35 111.73 140.99 Balance as at 01-04-2015 1 damages indirect taxes Total Contractual rectification 97.31 major maintenance respect of liquidated Periodic Litigation Expected tax liability in Particulars Product warranties/ No. Sr. Class of provisions crore 368 a) related obligations 46.52 182.65 148.49 Expected tax liability in respect of indirect taxes represents mainly the differential sales tax liability on account of non-collection of declaration forms for the period prior to five years. iv. iii. ii. i. Product warranties/liquidated damages: The Company gives warranties on certain products and services, undertaking to repair or replace the items that fail to perform satisfactorily during the warranty period. Provision made as at March 31, 2016 represents the amount of the expected cost of meeting such obligations of rectification/replacement. The timing of the outflows is expected to be within a period of five years from the date of Balance Sheet. Liquidated damages represent the estimated cost the Company is likely to incur due to delay in delivery as per its contract obligations and accrued on the basis of advice from distributors/customers. Nature of provisions: b) # includes provision used during the year 42.26 crore (previous year: 171.36 crore) 0.48 830.31 167.88 373.43 10.03 156.95 122.02 Balance as on 31-03-2016 (5=1+2-3+4) 5 0.14 0.04 0.30 Translation adjustments 4 474.97 (308.48) (167.30) (22.94) (0.36) (1.30) (116.58) Provision used/reversed during the year # 3 Q(16) Disclosures pursuant to Accounting Standard (AS) 29 "Provisions, Contingent Liabilities and Contingent Assets": Movement in provisions: 159.34 2.61 10840.81 2 Staff expenses 1463.90 2774.59 Operating expenses 1 Expenses V crore 31-3-2015 31-3-2016 Particulars NOTE [Q] (contd.) Notes forming part of the Consolidated Accounts (contd.) 367 6.78 21.04 Other income 1987.80 3593.69 1 Revenue from operations 105.62 348.25 Retained earnings (0.25) 0.17 2 Hedging reserve 23-2 Income IV 1.10 422.17 Foreign currency translation reserve 196.90 Sales, administration and other expenses 8006.19 Capital commitments, if any, in relation to interests in joint ventures Share in capital commitments of joint ventures themselves for which the Company is contingently liable 1 Commitments 2 VII Capital 3 Contingent liabilities in respect of liabilities of other venturers of joint ventures 80.13 58.18 Share in contingent liabilities of joint ventures themselves for which the Company is contingently liable 2 ventures 3248.49 4170.76 Contingent liabilities, if any, incurred in relation to interests in joint 1 Contingent Liability VI (0.88) 1.53 Provision for tax 6 165.96 (1.48) 5 Depreciation 53.64 11.76 Interest expense 4 107.13 178.39 3 0.12 Disposals: NOTE [Q] (contd.) Weighted average number of shares outstanding for diluted EPS 92,83,48,310 62,19,750 92,83,48,310 93,07,61,648 43,62,080 62,19,750 43,62,080 C Add: Weighted average number of potential equity shares on account of employee stock options 93,07,61,648 B Weighted average number of shares outstanding 4764.82 5090.53 4764.82 D=B+C 5090.53 Profit after tax as per accounts (crore) Diluted 51.33 54.69 51.33 54.69 A/B Basic EPS (*) 92,83,48,310 92,83,48,310 93,07,61,648 93,07,61,648 B Weighted average number of shares outstanding A 93,51,23,728 93,45,68,060 93,51,23,728 93,45,68,060 Diluted EPS (*) Difference between book and tax depreciation Deferred tax liabilities: reserve earnings* 31-3-2016 reserve** currency translation retained Charge/(credit) to reserves Deferred tax liabilities/ (assets) as at Foreign Hedging disposal opening Charge/ Effect due to (credit) to acquisition/ Charge/ (credit) to Statement of 31-3-2015 Profit and Loss Deferred tax liabilities/ (assets) as at Particulars crore Q(13) Major components of deferred tax liabilities and deferred tax assets pursuant to Accounting Standard (AS) 22 "Accounting for Taxes on Income”: Note: Potential equity shares that could arise on conversion of FCCBs are not resulting into dilution of EPS in the current year. Hence, they have not been considered in workings of diluted EPS in accordance with Accounting Standard (AS) 20 "Earnings per Share". 2 2 50.98 54.44 2 50.98 2 54.44 A/D Face value per share (*) 4764.82 5090.53 4764.82 5090.53 1. Particulars iv) iii) ii) [a] The Company has taken certain assets on non-cancellable operating leases, the future minimum lease payments in respect of which, as at March 31, 2016 are as follows: The Company has taken various commercial premises and plant & equipment under cancellable operating leases. These lease agreements are normally renewed on expiry. i) (b) Operating leases: 0.44 0.28 Present value of minimum lease payments 0.05 0.03 Less: Future finance charges 0.44 0.28 0.49 0.31 Total 3. Payable later than 5 years 0.28 0.17 0.31 0.19 2. Payable later than 1 year and not later than 5 years 0.16 0.11 As at 31-3-2015 As at 31-3-2016 Payable not later than 1 year Gain on derivative transactions to be offered for tax purposes in the year of transfer to Statement of Profit and Loss 2. 3. A Profit after tax as per accounts (crore) Basic 2014-15 2015-16 2014-15 2015-16 After extraordinary items Before extraordinary items Particulars Q(12) Basic and Diluted Earnings per share [EPS] computed in accordance with Accounting Standard (AS) 20 "Earnings per Share": NOTE [Q] (contd.) Notes forming part of the Consolidated Accounts (contd.) LARSEN & TOUBRO Lease rental expense in respect of operating leases: 262.54 crore (previous year: 173.78 crore) Contingent rent recognised in the Statement of Profit and Loss: 0.60 crore (previous year: 0.30 crore) [b] The lease agreements provide for an option to the Company to renew the lease period at the end of the non-cancellable period. There are no exceptional/restrictive covenants in the lease agreements. 396.54 335.26 115.43 94.07 190.11 171.30 91.00 69.89 As at 31-3-2015 As at 31-3-2016 crore Total Payable later than 5 years Payable later than 1 year and not later than 5 years b) 1210.79 (2.13) (64.86) (184.64) (0.85) (8.33) (39.39) (408.67) 337.46 Previous year (391.81) 75.93 (0.47) (64.79) (2.13) (215.71) *Represents reversal of deferred tax on depreciation charged against opening retained earnings as on April 1, 2015, pursuant to Schedule II of Companies Act 2013. (184.64) (2381.22) 84.76 (1.68) 18.64 (600.91) (1882.03) Total (118.26) (1.68) 0.77 (117.35) Other items giving rise to timing differences (6.70) Net deferred tax liability/(assets) ** The amount of *483.42 crore (previous year: 382.27 crore) representing net losses on effective hedges is recognised in hedge reserve, applying the principles of hedge accounting set out in Accounting Standard (AS) 30 "Financial Instruments: Recognition and Measurement". The amount is after considering the net deferred tax liability of 75.93 crore during the year (previous year: deferred tax asset (net) ₹ 64.86 crore). Q(14) The effect of acquisitions (including newly incorporated subsidiaries) and disposals during the year on the Consolidated Financial Statements is as under: a) Acquisitions (including newly incorporated entities): Notes forming part of the Consolidated Accounts (contd.) LARSEN & TOUBRO 0.78 (0.67) 0.30 (0.06) 0.11 (0.05) 0.15 (0.51) 0.01 0.21 (0.05) crore Net Assets/ (liabilities) as at March 31, 2016 year ended March 31, 2016 Effect on Group profit/(loss) after minority interest for the Total L&T Information Technology Spain SL 5 LTH Milcom Private Limited 4 L&T Global Holdings Limited 3 2 Marine Infrastructure Developer Private Limited L&T Infotech Austria GMBH LLC 1 Name of company Sr. No. 366 3.61 371.22 (10.31) (1096.88) Particulars NOTE [Q] (contd.) Notes forming part of the Consolidated Accounts (contd.) 365 1989.41 (8.83) 1.21 (83.43) (2.13) 385.20 1697.39 Total 339.47 1.21 2.34 (10.08) 346.00 Other items giving rise to timing differences 116.11 14.00 102.11 deduction for tax purposes but not debited to Statement of Profit and Loss Disputed statutory liabilities paid and claimed as 39.72 (8.83) 1494.11 10.06 38.49 (85.77) Deferred tax liabilities/ (assets) as at 31-3-2015 Difference between book and tax depreciation Charge/ (credit) to Statement of Profit and Loss opening retained earnings* 17.88 (333.64) (781.12) Unabsorbed depreciation/brought forward business losses (272.62) 0.05 | (35.07) (237.60) compensated absences debited to Statement of Profit and Loss Unpaid statutory liabilities/provision for (138.66) 84.76 (credit) to (0.01) Loss on derivative transactions to be claimed for tax purposes in the year of transfer to Statement of Profit and Loss Charge/ Effect due to acquisition/ disposal Charge/(credit) to reserves Deferred tax Foreign currency translation Hedging reserve** liabilities/ (assets) as at 31-3-2016 (223.41) reserve Provision for doubtful debts, advances and non-performing assets debited to Statement of Profit and Loss (512.24) (236.57) 0.71 (748.10) Deferred tax (assets): Key management personnel Notes forming part of the Consolidated Accounts (contd.) LARSEN & TOUBRO consolidated (0.00%) 0.30 0.00% L&T Information Technology Spain SL (0.05) (0.00%) 0.21 0.00% L&T Infotech Austria GmbH 5.68 0.11% 28.18 0.06% Larsen & Toubro Infotech GmbH LLC 0.52 0.01% 2.07 0.00% Larsen & Toubro Infotech South Africa (PTY) Limited 1.25 0.02% 11.26 0.03% Larsen & Toubro Infotech LLC 3.08 0.06% 10.03 0.02% Larsen & Toubro Infotech Canada Limited (0.06) 19.35 Larsen & Toubro LLC 0.01% L&T Infrastructure Development Projects Lanka (Private) (0.80) (0.02%) 0.89 0.00% L&T IDPL Trustee Manager Pte Ltd. Developmental projects: profit or loss net assets (crore) consolidated Amount As % of Amount (crore) As % of consolidated Name of the entity Share in profit or loss Net Assets, i.e., total assets minus total liabilities 374 NOTE [Q] (contd.) Notes forming part of the Consolidated Accounts (contd.) 373 (16.74) (0.33%) (22.07) (0.05%) 0.06 0.00% 2.43 L&T Technology Services LLC 0.38% 327.10 0.74% (31.87) (0.63%) (102.16) (0.23%) L&T Modular Fabrication Yard LLC (0.36) (0.01%) (0.24) (0.00%) Larsen & Toubro Hydrocarbon International Limited LLC Hydrocarbon: (9.03) (0.18%) (20.15) (0.05%) Larsen & Toubro Heavy Engineering LLC Heavy Engineering: (0.03) (0.00%) 2.29 0.01% Larsen & Toubro T&D SA (Proprietary) Limited 122.22 2.40% (19.16) (0.04%) Larsen & Toubro Saudi Arabia LLC (0.33) (0.01%) L&T Overseas Projects Nigeria Limited Larsen Toubro Arabia LLC 0.00% 0.05 L&T Infotech Financial Services Technologies Inc. 0.29 0.01% 0.52 0.00% L&T Information Technology Services (Shanghai) Co. Ltd. IT & Technology Services: PT Larsen & Toubro Hydrocarbon Engineering Indonesia (4.54) (0.09%) (0.94) (0.00%) Company, WLL Larsen & Toubro Kuwait Construction General Contracting Limited (61.01) (126.37) (0.29%) Larsen & Toubro Electromech LLC (128.96) (2.53%) (484.12) (1.10%) Larsen & Toubro ATCO Saudia LLC (149.95) (2.95%) (169.63) (0.39%) (0.01) (0.00%) (1.20%) 0.15% 67.54 Realty: 0.03% International Seaports (Haldia) Private Limited Gujarat Leather Industries Limited (10.16) (0.20%) 42.31 0.10% L&T-Chiyoda Limited Indian Associates 899.82 (444.95) (8.74%) (6768.78) (15.39%) Minority interests in all subsidiaries 40650.76 Total Subsidiaries 0.69 0.01% (16.02) (0.04%) Larsen & Toubro Readymix & Asphalt Concrete Industries LLC (0.51) (0.01%) 0.15 0.00% L&T Global Holdings Limited (404.82) (7.95%) 838.75 14.67 (0.00%) (0.25) Vizag IT Park Limited 0.00% L&T Camp Facilities LLC 0.31 0.01% Larsen & Toubro Qatar & HBK Contracting LLC Foreign Associates 6.00 0.01% Grameen Capital India Limited 0.09 0.00% 5.88 0.01% Magtorq Private Limited 1.91% (0.24) Rishi Consfab Private Limited 2.27 0.04% Salzer Electronics Limited 0.22 0.00% JSK Electricals Private Limited 0.96 0.02% 38.96 0.09% Feedback Infra Private Limited 0.52 0.01% (0.00%) 0.28 Larsen & Toubro International FZE (0.02) L&T Electricals & Automation Saudi Arabia Company LLC (50.74) (1.00%) 138.48 0.31% L&T Electrical & Automation FZE (2.14) (0.04%) (1.27) (0.00%) Kana Controls General Trading & Contracting Company W.L.L. 2.94 0.06% (9.88) (0.02%) Henikwon Corporation Sdn. Bhd. Electrical & Automation: (1.77) (0.03%) (1.77) (0.00%) Larsen & Toubro (Qingdao) Rubber Machinery Company Limited (Valves and Welding Equipment): Construction Equipment and Others (0.10) (0.00%) 9.55 0.02% L&T Realty FZE 0.01% 5.83 (0.46%) (23.27) (0.00%) 0.63 0.00% Larsen & Toubro (East Asia) Sdn. Bhd. Others: (0.30) (0.01%) 8.13 0.02% Thalest Limited 67.18 1.32% 574.41 1.31% Larsen & Toubro Consultoria E Projeto Ltda Tamco Switchgear (Malaysia) Sdn. Bhd. (0.22%) 13.49 0.03% Tamco Electrical Industries Australia Pty Ltd. 1.49 0.03% (5.99) (0.01%) Servowatch Systems Limited (5.79) (0.11%) (45.70) (0.10%) PT Tamco Indonesia (11.25) 0.00% Larsen & Toubro Qatar LLC 75.13 (2.94) (0.06%) (17.43) (0.04%) L&T Western Andhra Tollways Limited 7.85 0.15% (285.22) (0.65%) L&T Vadodara Bharuch Tollway Limited 20.27 0.40% 156.57 0.36% L&T Transportation Infrastructure Limited (1.08) (0.02%) 213.40 0.49% L&T Sambalpur-Rourkela Tollway limited (58.64) (1.15%) 63.80 0.15% L&T Samakhiali Gandhidham Tollway Limited (56.64) (1.11%) (41.74) (0.09%) L&T Western India Tollbridge Limited 0.07% 32.78 0.04% 196.21 3.85% 2959.29 6.73% Nabha Power Limited 0.69 0.01% 772.04 1.75% L&T Uttaranchal Hydropower Limited 0.80 0.02% 3115.71 7.08% L&T Rajkot-Vadinar Tollway Limited L&T Power Development Limited (0.01%) 195.81 0.45% L&T Himachal Hydropower Limited 40.21 0.09% L&T Arunachal Hydropower Limited Power Develoment: (144.67) (2.84%) (76.92) (0.17%) PNG Tollway Limited 1.95 (0.26) Realty: (0.03) (0.44) 24.23 0.06% L&T Halol-Shamlaji Tollway Limited (14.66) (0.29%) 238.63 0.54% (1.13) (0.02%) 150.30 0.34% L&T Devihalli Hassan Tollway Limited L&T Deccan Tollways Limited profit or loss net assets (crore) consolidated (crore) consolidated Amount As % of Amount As % of Name of the entity Share in profit or loss Net Assets, i.e., total assets minus total liabilities 372 NOTE [Q] (contd.) Notes forming part of the Consolidated Accounts (contd.) (1.90%) (96.91) L&T Infrastructure Development Projects Limited 11.34% (0.00%) L&T Port Kachchigarh Limited (29.06) (0.57%) (219.69) (0.50%) L&T Panipat Elevated Corridor Limited (7.14) (0.14%) 2024.18 4.60% L&T Metro Rail (Hyderabad) Limited (4.85) (0.10%) (0.00%) 78.18 L&T Krishnagiri Walajahpet Tollway Limited 10.55 0.21% (23.64) (0.05%) L&T Krishnagiri Thopur Toll Road Limited (17.67) (0.35%) 67.03 0.15% L&T Interstate Road Corridor Limited (558.94) (10.98%) 4987.01 0.18% 2.11 Chennai Vision Developers Private Limited (0.01) Others: L&T Shipbuilding Limited Shipbuilding: 34.40 0.68% 95.88 0.22% Ewac Alloys Limited 137.91 2.71% 520.64 1.18% L&T Valves Limited profit or loss net assets Amount (crore) consolidated As % of Amount (crore) consolidated total liabilities As % of Name of the entity Share in profit or loss Net Assets, i.e., total assets minus NOTE [Q] (contd.) Notes forming part of the Consolidated Accounts (contd.) LARSEN & TOUBRO 3.63 0.07% Bhilai Power Supply Company Limited 0.23% 100.32 (13.54%) 1.48% 369.11 0.84% Larsen & Toubro (Oman) LLC Infrastructure: Foreign Subsidiaries (0.03) (0.00%) 0.41 0.00% Raykal Aluminium Company Private Limited 0.09 0.00% 44.17 33.21 0.10% (0.25) (0.00%) Kesun Iron & Steel Company Private Limited 0.21 0.00% 4.64 0.01% L&T Power Limited 0.03 0.00% L&T Electricals and Automation Limited 0.05 0.00% (689.08) L&T Aviation Services Private Limited (0.00%) 0.08% 16.55 0.25% 8.09 0.16% 8.09 0.02% L&T Parel Project LLP L&T Infocity Limited 3.37 0.07% 3.37 0.01% L&T Hitech City Limited (0.26) (0.01%) (1.49) (0.00%) L&T Asian Realty Project LLP 10.40 0.20% 10.40 0.02% Hyderabad International Trade Expositions Limited (2.25) (0.04%) (2.25) (0.01%) CSJ Infrastructure Private Limited 0.01 0.00% 110.30 1.60% 81.50 L&T Realty Limited 0.33% 36.87 0.08% L&T Cutting Tools Limited 0.59 0.01% 235.88 0.54% L&T Construction Equipment Limited Welding Equipment): Construction Equipment and Others (Valves and (0.02) (0.00%) (4.60) L&T Kobelco Machinery Private Limited (0.01%) 5.70 0.11% 134.06 0.30% L&T South City Projects Limited 11.41 0.22% 3178.96 7.23% L&T Seawoods Limited 282.06 5.54% 747.27 1.70% L&T Vision Ventures Limited 371 0.07% Total Associates Marine Infrastructure Developer Private Limited 0.00% 0.01 Hydrocarbon: L&T Hydrocarbon Engineering Limited 2.90% 1275.87 1.70% 86.47 L&T Sapura Offshore Private Limited L&T Sapura Shipping Private Limited L&T-Gulf Private Limited L&T-Valdel Engineering Limited IT & Technology Services: 0.00% 0.87 0.02% 0.96 0.45% 198.41 0.43% 22.05 0.05% 22.68 0.04% 1.99 0.16% 71.41 0.22% 11.36 (0.09) GDA Technologies Limited (0.00%) 0.00% 16.69 LARSEN & TOUBRO Notes forming part of the Consolidated Accounts (contd.) NOTE [Q] (contd.) Net Assets, i.e., total assets minus Share in profit or loss Name of the entity total liabilities As % of consolidated Amount (crore) As % of Amount (crore) net assets profit or loss Heavy Engineering: L&T Cassidian Limited 0.00% 0.04 L&T Special Steels and Heavy Forgings Private Limited (1.16%) (508.17) (5.58%) (284.27) Spectrum Infotech Private Limited 0.04% 17.79 0.02% 1.26 LTH Milcom Private Limited 0.11 0.08% 37.08 0.04% 4.17 L&T Capital Markets Limited 0.02% 6.96 (0.47%) (23.73) L&T Finance Holdings Limited 11.79% 5187.34 7.43% 378.04 L&T Finance Limited 4.85% 2134.87 4.07% 207.22 L&T FinCorp Limited 2.32% 1019.47 3.60% 183.37 L&T General Insurance Company Limited 0.32% 142.29 (2.00%) (102.02) L&T Housing Finance Limited 1.35% 594.40 0.08% 6.40 0.01% L&T Capital Company Limited 1.84 Larsen & Toubro Infotech Limited 4.24% 1863.27 18.43% 938.13 L&T Technology Services Limited 2.54% 1116.25 8.53% 434.24 L&T Thales Technology Services Private Limited (0.01%) (3.16) 0.33% (0.04%) Financial Services: Consumer Financial Services Limited 0.00% 0.39 Family Credit Limited 1.44% 631.97 1.72% 87.40 L&T Access Distribution Services Limited (0.03%) (11.24) (0.09%) (4.65) (1.85) 57.03 0.13% L&T-Sargent & Lundy Limited 289.36 iii) For hedging investment in mutual fund and bonds: a) Stock market index futures b) Interest rate swaps b) Unhedged foreign currency exposures as at March 31, 2016 are as under: 671.58 900.00 200.00 crore As at As at Unhedged foreign currency exposures 31-3-2016 31-3-2015 i) ii) Receivables, including firm commitments and highly probable forecasted transactions Payables, including firm commitments and highly probable forecasted transactions 62936.93 43427.97 53132.13 40724.60 Note: As per Royal Monetary Authority of Bhutan, Bhutan's national currency is pegged to the Indian rupee at parity. Accordingly, the unhedged foreign currency exposures reported above excludes exposures [Receivables amounting to *2385.28 crore (previous year: 1646.07 crore) and payables amounting to 1801.09 crore (previous year: 1142.08 crore)] with respect to currencies such as Bhutan Ngultrum (BTN). Q(18) a) The Group has undertaken various projects on Design-Build-Finance-Operate-Transfer (DBFOT)/Build-Operate-Transfer (BOT) basis as per the concession agreements with the government authorities. Under the agreements, the concession period for toll collection or annuity payments ranges from 15 to 35 years. At the end of the said concession period, the entire facilities are transferred to the concerned government authorities. b) c) The aggregate amount of revenues and profits before tax (net) recognised during the year in respect of construction services related to BOT/DBFOT projects is ₹1741.44 crore (previous year: 2659.37 crore) and ₹ 174.61 crore (previous year: *324.20 crore) respectively [Note R(3)(A)(a)(ix)]. 486.90 Commodity futures For hedging commodity price risks: ii) NOTE [Q] (contd.) c) V. Contractual rectification cost represents the estimated cost the Company is likely to incur during defect liability period as per the contract obligations in respect of completed construction contracts accounted under Accounting Standard (AS) 7 (Revised) "Construction Contracts". Disclosures in respect of contingent liabilities are given as part of Note [I] to the Balance Sheet. Q(17) In line with the Company's risk management policy, the various financial risks mainly relating to changes in the exchange rates, interest rates and commodity prices are hedged by using a combination of forward contracts, swaps and other derivative contracts, besides the natural hedges. a) The particulars of derivative contracts entered into for hedging purposes outstanding as at March 31, 2016 are as under: * crore Category of derivative instruments Amount of exposures hedged As at 31-3-2016 As at 31-3-2015 i) 293.43 crore (previous year: 305.05 crore) being For hedging foreign currency and interest rate risks: Forward contracts for receivables including firm commitments and highly probable forecasted transactions 16813.93 16665.89 b) Forward contracts for payables including firm commitments and highly probable forecasted transactions 19381.84 15338.11 c) Currency and interest rate swaps 3528.69 3931.51 d) Option contracts 285.36 578.48 a) 1.14% Long term loans and advances towards financing activities include cumulative construction costs incurred including related margins in respect of annuity based Build-Operate-Transfer (BOT) projects. Notes forming part of the Consolidated Accounts (contd.) 5.01 0.05% 2.38 L&T Geostructure LLP 0.00% 1.98 0.95% 48.37 L&T Infrastructure Engineering Limited 0.08% 35.01 0.02% 0.87 Power: L&T-MHPS Boilers Private Limited 1.71% 754.08 5.06% 257.53 L&T-MHPS Turbine Generators Private Limited 0.46% 201.65 (1.70%) (86.67) L&T Howden Private Limited 0.08% 36.33 0.32% 16.16 0.01% Hi-Tech Rock Products & Aggregates Limited Infrastructure: Indian Subsidiaries NOTE [Q] (contd.) d) Short term Loans and advances towards financing activities include 41.28 crore (previous year: 75.48 crore) being cumulative construction costs incurred including related margins in respect of annuity based Build-Operate-Transfer (BOT) projects. Q(19) In terms of provisions of sub-section 1A of section 1150 of the Income Tax Act 1961, dividend distribution tax payable by the Parent Company of 140.88 crore, is net of dividend distribution tax paid by its subsidiary companies amounting to 198.70 crore, relating to dividend of 1007.91 crore declared by them. Q(20) Deferred payment liability of 11050.36 crore (previous year: 3058.82 crore) represents: (a) Negative grant/additional concession fee of 11017.96 crore (previous year: 2999.47 crore) payable to National Highway Authority of India (NHAI), as per the concession agreement entered into with NHAI. (b) Commitment payable to National Housing Development Authority (NHDA) amounting to * 32.40 crore (previous year: * 34.40 crore) as per the joint venture agreement entered into with NHDA. (c) Deferred conversion fee liability of Nil (previous year: 24.94 crore) towards conversion of land from Industrial to commercial use as per the approval from Chandigarh Housing Board (CHB). (d) In respect of the total amount of 11050.36 crore, an amount of 210.50 crore (previous year: 127.23 crore) is payable within a period of one year. Q(21) One of the subsidiaries, which has been awarded a Build-Operate-Transfer (BOT) project for construction of a bypass toll road and a bridge over the River Noyyal in Coimbatore District of Tamil Nadu State, under the Concession Agreement dated October 3, 1997, had received a termination notice from the Ministry of Road Transport and Highways, Government of India, (MORTH). The ground of termination was Government of India's subsequent intention to go for four-laning of the existing two lane road. The subsidiary had obtained injunction from Delhi High Court against the said notice of the Government and is accordingly continuing to collect the toll. The tolling rights of the subsidiary are protected under the aforesaid concession agreement. The subsidiary had also filed an application opting for arbitration for resolution of disputes and an Arbitral Tribunal had been constituted as provided in the concession agreement. The Arbitral Tribunal has pronounced the award on December 12, 2014 in favour of the Company. The Tribunal has also awarded, interalia, compensation to be paid to the Company for loss of revenue at Athupalam Bridge and suitable extension of the concession period. The MORTH has challenged the award of March 12, 2015 seeking stay of the aforesaid Tribunal award before the Delhi High Court. Since the matter is sub-judice, the compensation has not been recognised in the financial statements. Q(22) There are no amounts due and outstanding to be credited to Investor Education & Protection Fund as at March 31, 2016. Q(23) Additional information pursuant to Schedule III to the Companies Act, 2013 370 369 Name of the entity Share in profit or loss Amount As % of Amount (crore) consolidated (crore) net assets profit or loss 92.56% 40718.33 104.34% 5311.46 Larsen and Toubro Limited Net Assets, i.e., total assets minus total liabilities As % of consolidated 58.04 L&T Infra Debt Fund Limited 1.64% L&T-Eastern Joint Venture Jointly controlled entities - Foreign joint ventures 0.15 0.00% 0.15 0.00% Bauer-L&T Geo Joint Venture DAEWOO and L&T Joint Venture 14.28 0.28% 14.28 0.03% Larsen & Toubro Limited & NCC Limited Joint Venture (7.03) (0.14%) (21.44) (0.05%) Consortium-O&M Joint Venture Larsen and Toubro Limited-Scomi Engineering BHD 0.64 0.01% 2.21 0.01% Consortium-Residual Joint works Joint Venture Larsen and Toubro Limited-Scomi Engineering BHD 1.84 0.04% 4.56 0.01% 0.01% 5.51 0.01% 0.30 (31074.74) 43991.73 Total (70.64%) CFS adjustment and elimination 227.77 356.23 Total Joint Ventures 0.02 0.00% (0.13) (0.00%) Indiran Engineering Projects and Systems Kish PJSC PESB and Larsen & Toubro Joint Venture (0.05) Joint Venture CC27 Delhi (0.00%) (0.00%) L&T-AL-Sraiya LRDP 6 Joint Venture 30.23 0.59% 30.60 0.07% L&T-Delma Mafraq Joint Venture Engineering Joint Venture Aktor- Larsen & Toubro-Yapi Merkezi-stfa-Al Jaber 204.52 4.02% 267.60 0.61% Civil Works Joint Venture (0.05) (17.70%) L&T-Shanghai Urban Construction (Group) Corporation (0.10%) 0.69 0.00% (0.03) (0.00%) (0.09) (0.00%) (0.72) (0.01%) (38.84) (0.09%) Desbuild-L&T Joint Venture International Metro Civil Contractors Joint Venture L&T-AM Tapovan Joint Venture Jointly controlled entities - Indian joint ventures profit or loss net assets Amount (crore) consolidated (crore) As % of Amount Share in profit or loss Net Assets, i.e., total assets minus total liabilities As % of consolidated Name of the entity NOTE [Q] (contd.) Notes forming part of the Consolidated Accounts (contd.) LARSEN & TOUBRO (2.51) 109.93 HCC-L&T Purulia Joint Venture 0.01% 3.89 (0.00%) (15.05) (0.03%) Larsen and Toubro Limited - Shapoorji Pallonji & Co. Ltd. Joint Venture (0.29) (0.01%) 0.78 0.00% Metro Tunneling Delhi - L&T Shanghai Urban Construction (Group) Corporation Joint Venture (11.94) (0.23%) 2.62 0.01% Metro Tunneling Chennai - L&T Shanghai Urban Construction (Group) Corporation Joint Venture Venture (4.96) 0.19 7.90 0.02% L&T-Shanghai Urban Construction (Group) Corporation Joint (0.01) (0.00%) 74.84 0.17% L&T-Hochtief Seabird Joint Venture 0.64 0.01% 16.20 0.04% Metro Tunneling Group (0.01) 0.00% 3.77 (901.06) Q(24) Figures for the previous year have been regrouped/reclassified wherever necessary. Mudit Cement Private Limited (0.02%) (8.15) (0.11%) (5.66) Developmental projects: Kudgi Transmission Limited 0.43% 190.45 (0.01%) (0.60) L&T Ahmedabad-Maliya Tollway Limited 0.14% 62.80 (1.06%) (54.01) L&T BPP Tollway Limited 0.44% 195.75 (0.94%) (47.66) L&T Chennai-Tada Tollway Limited 0.10% 378 Claims (net of amounts receivable from reinsurers/co-insurers) are recognised on the date of intimation based on estimates from surveyors/insured in the respective revenue accounts. Estimated liability for outstanding claims at Balance Sheet date is recorded net of claims recoverable from/payable to co-insurers/reinsurers and salvage to the extent there is certainty of realisation. Estimated liability for outstanding claims is determined by management on the basis of ultimate amounts likely to be paid on each claim based on the past experience. These estimates are progressively revalidated on availability of further information. IBNR represents that amount of claims that may have been incurred during the accounting period but have not been reported or claimed. IBNR provision also includes Claims incurred comprise claims paid, estimated liability for outstanding claims made following a loss occurrence reported and estimated liability for claims Incurred But Not Reported ('IBNR') and claims Incurred But Not Enough Reported ('IBNER'). Further, claims incurred also include specific claim settlement costs such as survey/legal fees and other directly attributable costs. Profit commission under reinsurance treaties, wherever applicable, is recognised in the year of final determination of the profits. Commission on reinsurance ceded is recognised as income on ceding of reinsurance premium. xvii. Insurance premium (net of service tax) is recognised as income over the contract period or period of risk, as appropriate, after adjusting for unearned premium (unexpired risk) and premium deficiency, if any. Premium deficiency, if any, is recognised if the sum of expected claim costs and related claim management costs exceed related reserve for unexpired risk for every line of business. Reserve for unexpired risk is recognised net of reinsurance ceded and represents premium written that is attributable and to be allocated to succeeding accounting periods for risks to be borne by the Company under contractual obligations on a contract period basis or risk period basis, whichever is appropriate. It is calculated on a daily pro-rata basis, written on policies during the twelve months preceding the Balance Sheet date for fire, marine cargo and miscellaneous business (excluding project related engineering insurance contracts) and 100% for marine hull business, on all unexpired policies at Balance Sheet date, in accordance with Section 64 V(1)(ii)(b) of the Insurance Act, 1938. The reserve for unexpired risk is computed for project related engineering insurance contract through the usage of Cubic Curve Method. A reserve for unexpired risks is recorded at 50% of the net premium retro-ceded to the Company from India Motor Third Party Insurance Pool (IMTPIP) during the year. Reinsurance premium ceded is accounted in the year in which the risk commences and over the period of risk in accordance with the treaty arrangements with the reinsurers. Reinsurance premium ceded on unearned premium is carried forward to the period of risk and is set off against related unearned premium. Premium on excess of loss reinsurance cover is accounted as per the terms of the reinsurance arrangements. (24.30) (0.48%) 90.34 0.21% 721.50 0.77% 39.29 L&T Infra Investment Partners Advisory Private Limited 0.02% 8.18 0.12% 5.91 L&T Infra Investment Partners Trustee Private Limited 0.00% 0.05 0.00% 0.01 L&T Infrastructure Finance Company Limited Revenue from operation and maintenance services of power plant receivable under the Power Purchase Agreement is recognised on accrual basis. 6.51% 4.72% 240.04 L&T Investment Management Limited L&T Mutual Fund Trustee Limited L&T Trustee Company Private Limited L&T Vrindavan Properties Limited 1.11% 490.45 (1.02%) (51.90) 0.00% 1.57 0.00% 0.03 2863.36 5090.53 Revenue from charter hire is recognised based on the terms of the time charter agreement. XV. b. All critical approvals necessary for commencement of the project have been obtained; a. Revenue from those property development activities which have the same economic substance as construction contract is recognised based on the 'Percentage of Completion method' (POC) when the outcome of a real estate project can be estimated reliably upon fulfillment of all the following conditions: Revenue from property development activity which are in substance similar to delivery of goods, is recognised when all significant risks and rewards of ownership in the land and/or building are transferred to the customer and a reasonable expectation of collection of the sale consideration from the customer exists. Revenue from sale of manufactured and traded goods is recognised when the substantial risks and rewards of ownership are transferred to the buyer under the terms of the contract. Sales and service include excise duty and adjustments made towards liquidated damages and price variation, wherever applicable. Escalation and other claims, which are not ascertainable/acknowledged by customers, are not taken into account. iii. ii. i. a. Sales & service Revenue from operations A. 376 Revenue is recognised based on nature of activity when consideration can be reasonably measured and there exists reasonable certainty of its recovery. Amounts in the financial statements are presented in Indian Rupees in crore [1 crore = 10 million] rounded off to two decimal places in line with the requirements of Schedule III. Per share data are presented in Indian Rupees to two decimal places. Revenue recognition The Balance Sheet and the Statement of Profit and Loss are prepared and presented in the format prescribed in the Schedule III to the Companies Act, 2013 ("the Act"). The Cash Flow Statement has been prepared and presented as per the requirements of Accounting Standard (AS) 3 "Cash Flow Statements". The disclosure requirements with respect to items in the Balance Sheet and Statement of Profit and Loss, as prescribed in the Schedule III to the Act, are presented by way of notes forming part of accounts along with the other notes required to be disclosed under the notified Accounting Standards and the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. Presentation of financial statements The accounts of Indian subsidiaries, joint ventures and associates have been prepared in compliance with the Accounting Standards as specified in the Companies (Accounting Standards) Rules, 2006 read with Rule 7(1) of the Companies (Accounts) Rules, 2014, prescribed by the Central Government, and those of the foreign subsidiaries, joint ventures and associates have been prepared in compliance with the local laws and applicable Accounting Standards. Necessary adjustments for differences in the accounting policies, wherever applicable, have been made in the Consolidated Financial Statements. The preparation of financial statements in conformity with GAAP requires that the management of the Company makes estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. Examples of such estimates include the useful lives of tangible and intangible fixed assets, allowance for doubtful debts/advances, future obligations in respect of retirement benefit plans, etc. Difference, if any, between the actual results and estimates is recognised in the period in which the results are known. 3. 2. NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) Notes forming part of the Consolidated Accounts (contd.) 375 The Company maintains its accounts on accrual basis following the historical cost convention, except for the revaluation of certain fixed assets, in accordance with generally accepted accounting principles ["GAAP"] in compliance with the provisions of the Companies Act, 2013 and the Accounting Standards as specified in the Companies (Accounting Standards) Rules, 2006 read with Rule 7(1) of the Companies (Accounts) Rules, 2014 issued by the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. Further, the guidance notes/announcements issued by the Institute of Chartered Accountants of India (ICAI) are also considered, wherever applicable except to the extent where compliance with other statutory promulgations override the same requiring a different treatment. Basis of accounting 1. NOTE [R] SIGNIFICANT ACCOUNTING POLICIES C. d. When the stage of completion of the project reaches a reasonable level of development i.e. contract costs for work performed bears a reasonable proportion to the estimated total contract costs. For this purpose, a reasonable level of development is treated as achieved only if the cost incurred (excluding cost of land/ developmental rights and borrowing cost) is atleast 25% of the total of such cost; Atleast 25% of the saleable project area is secured by contracts or agreements with buyers; xiv. Revenue from port operation services is recognised on completion of respective services. xiii. Income from investment management fees is recognised in accordance with the Investment Management Agreement and SEBI regulations based on average Assets Under Management (AUM) of mutual fund schemes over the period of the agreement in terms of which services are performed. Portfolio management fees are recognised in accordance with Portfolio Management Agreement entered with respective clients over the period of the agreement in terms of which the services are rendered. Trusteeship fees are accounted on an accrual basis in accordance with the Trust Deed and are dependent on the net asset value as recorded by the respective mutual fund schemes. Revenue from engineering and service fees is recognised as per the terms of the contract. Commission income is recognised as and when the terms of the contract are fulfilled. In respect of information technology (IT) and technology services, revenue from contracts awarded on time and material basis is recognised when services are rendered and related costs are incurred. Revenue from fixed price contracts is recognised using the proportionate completion method. xii. xi. X. NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) Notes forming part of the Consolidated Accounts (contd.) 377 Revenue relatable to construction services rendered in connection with Build-Operate-Transfer (BOT) projects undertaken by the Group is recognised during the period of construction using percentage of completion method. After the completion of construction period, revenue relatable to toll collections of such projects from users of facilities are accounted when the amount is due and recovery is certain. Licence fees for way-side amenities are accounted on accrual basis. Revenue from annuity based projects is recognised in the Statement of Profit and Loss over the concession period of the respective projects based on the implicit rate of return embedded in the projected cash flows. Such income is duly adjusted for any variation in the amount and timing of the cash flows in the period in which such variation occurs. ix. viii. Income from hire purchase and lease transactions is accounted on accrual basis, pro-rata for the period, at the rates implicit in the transaction. Income from bill discounting, advisory and syndication services and other financing activities is accounted on accrual basis. Income from interest-bearing assets is recognised on accrual basis over the life of the asset based on the constant effective yield. Loan origination income i.e. processing fees and other charges collected upfront, are recognised at the inception of the loan. Income including interest or any other charges on non-performing asset is recognised only when realised. Any such income recognised before the asset became non-performing and remaining unrealised is reversed. xvi vii. Revenue from software development is recognised based on software developed or time spent in person hours or person weeks, and billed to customers as per the terms of specific contracts. Unbilled revenue represents value of services performed in accordance with the contract terms but not billed. Government grants in the nature of subsidy related to customer contracts are recognised as revenue from operations in the Statement of Profit and Loss, on a prudent basis, in proportion to work completed when there is reasonable assurance that the conditions for the grant of subsidy will be fulfilled. Expected loss, if any, on the construction/project related activity is recognised as an expense in the period in which it is foreseen, irrespective of the stage of completion of the contract. While determining the amount of foreseeable loss, all elements of costs and related incidental income not included in contract revenue are taken into consideration. Revenue from contracts for rendering of engineering design services and other services which are directly related to the construction of an asset is recognised on similar basis as stated in (iv) supra. Fixed price contracts: Contract revenue is recognised only to the extent of cost incurred till such time the outcome of the job cannot be ascertained reliably. When the outcome of the contract is ascertained reliably contract revenue is recognised at cost of work performed on the contract plus proportionate margin, using the percentage of completion method. Percentage of completion is the proportion of cost of work performed to-date to the total estimated contract costs. Cost plus contracts: Contract revenue is determined by adding the aggregate cost plus proportionate margin as agreed with the customer. b. a. Revenue from construction/project related activity and contracts for supply/commissioning of complex plant & equipment is recognised as follows: The costs incurred on property development activities are carried as "Inventories" till such time the outcome of the project cannot be estimated reliably and all the aforesaid conditions are fulfilled. When the outcome of the project can be ascertained reliably and all the aforesaid conditions are fulfilled, revenue from property development activity is recognised at cost incurred plus proportionate margin, using percentage of completion method. Percentage of completion is determined based on the proportion of actual cost incurred to the total estimated cost of the project. For this purpose, actual cost includes cost of land and developmental rights but excludes borrowing cost. Expected loss, if any, on the project is recognised as an expense in the period in which it is foreseen, irrespective of the stage of completion of the contract. vi. V. iv. NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) Notes forming part of the Consolidated Accounts (contd.) LARSEN & TOUBRO Atleast 10% of the total revenue as per the agreements of sale or any other legally enforceable documents are realised at the reporting date in respect of each of the contracts and it is reasonable to expect that the parties to such contracts will comply with the payment terms as defined in the contracts. Revenue from construction/project related activity and contracts executed in joint ventures under work-sharing arrangement [being jointly controlled operations, in terms of Accounting Standard (AS) 27 "Financial Reporting of Interests in Joint Ventures"], is recognised on the same basis as similar contracts independently executed by the Company. 41.81 388 Notes forming part of the Consolidated Accounts (contd.) The reporting currency of the Company is Indian Rupee. a. 20. Foreign currency transactions, foreign operations, forward contracts and derivatives In respect of stock options granted pursuant to the Company's Stock Options Scheme, the intrinsic value of the options (excess of market price of the share over the exercise price of the option) is treated as discount and accounted as employee compensation cost over the vesting period. The amount recognised as expense each year is arrived at based on the number of grants expected to vest. If a grant lapses after the vesting period, the cumulative discount recognised as expense in respect of such grant is transferred to the general reserve. 19. Employee stock ownership schemes Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalised/inventorised as part of cost of such asset till such time the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognised as an expense in the period in which they are incurred. Borrowing costs include interest, commitment charges, amortisation of ancillary costs, amortisation of discounts/premium related to borrowings, finance charges in respect of assets acquired on finance lease and exchange differences arising from foreign currency borrowings, to the extent they are regarded as an adjustment to interest costs. b. 18. Borrowing costs Expenses (net of tax) incurred on issue of debentures/bonds; and ii. Expenses incurred on issue of shares; i. The following expenses are written off against securities premium account: b. The discount allowed, if any, in respect of shares allotted pursuant to Stock Options Scheme. iii. Premium (net of tax) on redemption of debentures/bonds. ii. Foreign currency transactions are recorded on initial recognition in the reporting currency, using the exchange rate at the date of the transaction. At each Balance Sheet date, foreign currency monetary items are reported using the closing rate. Notes forming part of the Consolidated Accounts (contd.) Other assets and liabilities at rates prevailing at the end of the year. Fixed assets as at April 1, 1991 at rates prevailing at the end of the year in which the additions were made. Subsequent additions are at rates prevailing on the dates of the additions. Depreciation is accounted at the same rate at which the assets are translated. iii. ii. i. Closing inventories at rates prevailing at the end of the year. Financial statements of foreign operations comprising jobs contracted prior to April 1, 2004, are translated as follows: recognised as income or expense in the period in which they arise, in cases other than (i) and (ii) supra. 385 iii. adjusted in the cost of fixed assets specifically financed by the borrowings contracted upto March 31, 2004 to which the exchange differences relate; i. Exchange differences that arise on settlement of monetary items or on reporting of monetary items at each Balance Sheet date at the closing rate are: Non-monetary items, carried at historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction. d. C. NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) ii. adjusted in the cost of fixed assets specifically financed by borrowings contracted between the period April 1, 2004 to March 31, 2007 and to which the exchange differences relate, provided the assets are acquired from outside India; The difference between the market value and the consideration received in respect of shares issued pursuant to Stock Appreciation Rights Scheme; and i. Securities premium includes: Current investments are carried at lower of cost and fair value. The determination of carrying amount of such investments is done on the basis of weighted average cost of each individual investment. Long term investments (other than associates) including trade investments are carried at cost, after providing for any diminution in value, if such diminution is other than temporary in nature. Investments, which are readily realisable and are intended to be held for not more than one year from the date of acquisition, are classified as current investments. All other investments are classified as long term investments. Trade investments comprise investments in entities in which the Company has strategic business interest. 13. Investments (Value in use is determined as the present value of estimated future cash flows from the continuing use of an asset and from its disposal at the end of its useful life). in the case of a cash generating unit (a group of assets that generates identified, independent cash flows), at the higher of the cash generating unit's net selling price and the value in use. Investment in associate companies is accounted using "equity method" [Note R(4)(b)]. Purchase and sale of investments are recognised based on the trade date accounting. b. a. Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is determined: b. the reversal of impairment loss recognised in previous periods, if any. a. the provision for impairment loss, if any; and As at each Balance Sheet date, the carrying amount of assets is tested for impairment so as to determine: 12. Impairment of assets Amortisation on impaired assets is provided by adjusting the amortisation charges in the remaining periods so as to allocate the assets' revised carrying amount over its remaining useful life. in the case of an individual asset, at the higher of the net selling price and the value in use; 14. Inventories Inventories are valued after providing for obsolescence, as under: a. Raw materials, components, construction materials, stores, spares and loose tools at lower of cost or net realisable value. However, these items are considered to be realisable at cost if the finished goods in which they will be used, are expected to be sold at or above cost; a. 17. Securities premium account Grants received/receivable from NHAI in the nature of "promoter contribution" are credited to "capital reserve". 16. Government grant of capital nature Cash and bank balances also include fixed deposits, margin money deposits, earmarked balances with banks and other bank balances which have restrictions on repatriation. Short term and liquid investments being not free from more than insignificant risk of change in value, are not included as part of cash and cash equivalents. 15. Cash and bank balances Cost of inventories is computed either on a weighted average or on First-in-First-out (FIFO) basis. Completed property/work-in-progress (including land) in respect of property development activity at lower of specifically identifiable cost or net realisable value. Finished goods and stock-in-trade (in respect of goods acquired for trading) at lower of cost or net realisable value. Cost includes related overheads and excise duty paid/payable on such goods; and Manufacturing work-in-progress at lower of cost including related overheads or net realisable value. In some cases, manufacturing work-in-progress is valued at lower of specifically identifiable cost or net realisable value. In the case of qualifying assets, cost also includes applicable borrowing costs vide policy relating to borrowing costs; d. C. b. NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) Notes forming part of the Consolidated Accounts (contd.) LARSEN & TOUBRO 384 iv. Net revenues at the average rate for the year. Financial statements of foreign operations comprising jobs contracted on or after April 1, 2004, are treated as integral operations and translated as in the same manner as foreign currency transactions, as described supra. Exchange differences arising on such translation are recognised as income or expense of the period in which they arise. Financial statements of overseas non-integral operations are translated as under: e. a. Reimbursement expected in respect of expenditure required to settle a provision is recognised only when it is virtually certain that the reimbursement will be received. Contingent liability is disclosed in case of the amount of the obligation can be reliably estimated C. a probable outflow of resources is expected to settle the obligation and b. a. the Company has a present obligation as a result of a past event b. Provisions are recognised for liabilities that can be measured only by using a substantial degree of estimation, if Foreign companies recognise tax liabilities and assets in accordance with the applicable local laws. Foreign companies: b. Other deferred tax assets are recognised and carried forward to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. Deferred tax assets relating to unabsorbed depreciation/business losses/losses under the head "capital gains" are recognised and carried forward to the extent there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) Notes forming part of the Consolidated Accounts (contd.) 23. Provisions, contingent liabilities and contingent assets C. a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation a present obligation arising from past events, when no reliable estimate is possible LARSEN & TOUBRO The obligation towards additional concession fee payable to NHAI is recognised as deferred payment liability when the Company, in its capacity of Concessionaire, becomes entitled to exercise the right and collect toll in accordance with the terms of the concession agreement on Commercial Operations Date. 26. Deferred payment liabilities Operating cycle for the business activities of the Company covers the duration of the specific project/contract/product line/service including the defect liability period, wherever applicable and extends up to the realisation of receivables (including retention monies) within the agreed credit period normally applicable to the respective lines of business. 25. Operating cycle for current and non-current classification Other commitments related to sales/procurements made in the normal course of business are not disclosed to avoid excessive details. d. Other non-cancellable commitments, if any, to the extent they are considered material and relevant in the opinion of management. Funding related commitments to associate and joint venture companies and C. b. Uncalled liability on shares and other investments partly paid a. Estimated amount of contracts remaining to be executed on capital account and not provided for Commitments are classified and disclosed as follows: Commitments are future liabilities for contractual expenditure. 24. Commitments Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date. Contingent assets are neither recognised, nor disclosed. a possible obligation arising from past events, where the probability of outflow of resources is not remote 387 Intangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as "intangible assets under development". Deferred tax is recognised on timing differences between the income accounted in financial statements and the taxable income for the year, and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date. Indian companies: h. Notes forming part of the Consolidated Accounts (contd.) LARSEN & TOUBRO 386 Accordingly, the resultant gains or losses on fair valuation/settlement of the derivative contracts (including embedded derivatives) covered under Accounting Standard (AS) 30 "Financial Instruments: Recognition and Measurement" are recognised in the Statement of Profit and Loss or Balance Sheet as the case may be after applying the test of hedge The Company has adopted Accounting Standard (AS) 30 "Financial Instruments: Recognition and Measurement" for accounting of such derivative contracts, not covered under Accounting Standard (AS) 11 "The Effects of Changes in Foreign Exchange Rates", as mandated by the ICAI in the aforesaid announcement. All the other derivative contracts, including forward contracts entered into to hedge foreign currency risks on unexecuted firm commitments and highly probable forecasted transactions, are recognised in the financial statements at fair value as on the Balance Sheet date, in pursuance of the announcement of the ICAI dated March 29, 2008 on accounting of derivatives. In addition, the derivative arrangements embedded in the contracts entered in the course of business are accounted separately if the economic characteristics and risks of the embedded derivatives are not closely related to economic characteristics and risks of the host contract. effectiveness. Where the hedge in respect of off-balance sheet items is effective, the gains or losses are recognised in the "hedging reserve" which forms part of "reserves and surplus" in the Balance Sheet. The amount recognised in the "hedging reserve" is transferred to the Statement of Profit and Loss in the period in which the underlying hedged item affects the Statement of Profit and Loss. Gains and losses in respect of ineffective hedges are recognised in the Statement of Profit and Loss in the period in which such gains or losses are incurred. Gains and losses arising on account of roll over/cancellation of forward contracts are recognised as income/expense of the period in which such roll over/cancellation takes place. Exchange differences arising on translation of non-integral foreign operations are accumulated in the foreign currency translation reserve until the disposal of such operations. Revenues and expenses at yearly average exchange rates prevailing during the year. Assets and liabilities at the rate prevailing at the end of the year. Depreciation and amortisation is accounted at the same rate at which assets are converted. ii. g. f. i. Forward contracts, other than those entered into to hedge foreign currency risk on unexecuted firm commitments or highly probable forecasted transactions, are treated as foreign currency transactions and accounted accordingly as per Accounting Standard (AS) 11 "The Effects of Changes in Foreign Exchange Rates". Exchange differences arising on such contracts are recognised in the period in which they arise. The premium paid/received on a foreign currency forward contract is accounted as expense/income over the life of the contract. 21. Segment accounting a. a. Segment revenue resulting from transactions with other business segments is accounted on the basis of transfer price agreed between the segments. Such transfer prices are either determined to yield a desired margin or agreed on a negotiated basis. 22. Taxes on income vi. Segment non-cash expenses forming part of segment expenses include the intrinsic value of the employee stock options which is accounted as employee compensation cost [Note R(19)] and is allocated to the segment. Inter-segment transfer pricing Unallocable corporate assets and liabilities represent the assets and liabilities that relate to the Company as a whole and not allocable to any segment. Segment assets and liabilities include those directly identifiable with the respective segments. In respect of (a) financial services segment, and (b) certain projects under developmental projects segment viz. power generation projects & power transmission system projects which are classified as finance lease and annuity based road projects, segment liabilities include borrowings as the interest expenses on borrowings are accounted as segment expenses in respect of the segment and projects. Segment result includes margins on inter-segment capital jobs, which are reduced in arriving at the profit before tax of the Company. Income which relates to the Company as a whole and not allocable to segments is included in "unallocable corporate income". Expenses that are directly identifiable with/allocable to segments are considered for determining the segment result. In respect of (a) Financial Services Segment and (b) certain projects under Developmental Projects segment viz. power generation projects & power transmission system projects which are classified as finance lease and annuity based road projects, the interest expenses on borrowings are accounted as segment expenses. Expenses which relate to the Company as a whole and not allocable to segments are included under "unallocable corporate expenditure". Segment revenue includes sales and other operational revenue directly identifiable with/allocable to the segment including (a) inter segment revenue and (b) profit on sale of stake in the subsidiary and/or joint venture companies under Developmental projects segment and Realty business grouped under "Others" segment. V. iv. iii. ii. i. Segment accounting policies are in line with the accounting policies of the Company. In addition, the following specific accounting policies have been followed for segment reporting: Segment accounting policies b. Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961 and based on the expected outcome of assessments/appeals. Administrative and other general overhead expenses that are specifically attributable to acquisition of intangible assets are allocated and capitalised as a part of the cost of the intangible assets. NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) full through successful exploration and development of the area of interest or alternatively, by its sale; or when exploration and evaluation activities in the area of interest have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically available reserves and active and significant operations in relation to the area are continuing or are planned for the future. Exploration assets are re-assessed on a regular basis and these costs are carried forward provided that at least one of the conditions outlined above is met. All other exploration and evaluation expenditure is recognised as expense in the period in which it is incurred. The availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset and The manner in which the probable future economic benefits will be generated including the existence of a market for output of the intangible asset or intangible asset itself or if it is to be used internally, the usefulness of intangible assets vi. V. iv. The Company has ability to use or sell the intangible asset iii. The Company has ability to measure the expenditure attributable to the intangible asset during its development reliably The development expenditure capitalised as intangible asset is amortised over its useful life. The Company has intention to complete the intangible asset and use or sell it 380 7. i. The technical feasibility of completing the intangible asset so that it will be available for use or sale Revenue expenditure on research is expensed under respective heads of account in the period in which it is incurred. Development expenditure on new products is capitalised as intangible asset, if all of the following can be demonstrated: b. a. Research and development ii. Other development costs that do not meet above criteria are expensed in the period in which they are incurred. Employee benefits a. Short term employee benefits: All employee benefits falling due wholly within twelve months of rendering the service are classified as short term employee benefits. The benefits like salaries, wages, short term compensated absences etc. and the expected cost of bonus, ex-gratia are recognised in the period in which the employee renders the related service. Termination benefits: d. The obligation for long term employee benefits such as long term compensated absences, long service award etc. is recognised in the similar manner as in the case of defined benefit plans as mentioned in (b)(ii) supra. Long term employee benefits: C. Gains or losses on the curtailment or settlement of any defined benefit plan are recognised when the curtailment or settlement occurs. Past service cost is recognised as expense on a straight line basis over the average period until the benefits become vested. The interest element in the actuarial valuation of defined benefit plans, which comprises the implicit interest cost and the impact of changes in discount rate, is classified under finance cost and balance charge is recognised as employee benefit expenses in the Statement of Profit and Loss. In case of funded plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans to recognise the obligation on a net basis. The obligation is measured at the present value of the estimated future cash flows. The discount rate used for determining the present value of the obligation under defined benefit plans, is based on the market yield on government securities of a maturity period equivalent to the weighted average maturity profile of the related obligations at the Balance Sheet date. Actuarial gains and losses are recognised immediately in the Statement of Profit and Loss. Defined benefit plans: The employees' gratuity fund schemes, post-retirement medical care scheme, pension scheme and provident fund scheme managed by trust are the Company's defined benefit plans. The present value of the obligation under such defined benefit plans is determined based on actuarial valuation using the Projected Unit Credit Method. ii. NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) Notes forming part of the Consolidated Accounts (contd.) LARSEN & TOUBRO Defined contribution plans: The Company's superannuation scheme, state governed provident fund scheme, employee state insurance scheme and employee pension scheme are defined contribution plans. The contribution paid/payable under the schemes is recognised during the period in which the employee renders the related service. Post-employment benefits: i. b. On certain occasions, the size, type or incidence of an item of income or expense, pertaining to the ordinary activities of the Company, is such that its disclosure improves an understanding of the performance of the Company. Such income or expense is classified as an exceptional item and accordingly disclosed in the notes to accounts. Termination benefits such as compensation under voluntary retirement cum pension scheme are recognised as expense in the period in which they are incurred. Income or expenses that arise from events or transactions that are clearly distinct from the ordinary activities of the Company are classified as extraordinary items. Specific disclosure of such events/transactions is made in the financial statements. Similarly, any external event beyond the control of the Company, significantly impacting income or expense, is also treated as extraordinary item and disclosed as such. The Company's interest in jointly controlled entities are proportionately consolidated on a line-by-line basis by adding together the book values of assets, liabilities, income and expenses, after eliminating the unrealised profits/losses on intra-group transactions. a. The financial statements of the Parent Company and its subsidiaries have been consolidated on a line-by-line basis by adding together the book values of the like items of assets, liabilities, income and expenses, after eliminating intra-group balances and the unrealised profits/losses on intra-group transactions, and are presented to the extent possible, in the same manner as the Parent Company's independent financial statements. Other items of income are accounted as and when the right to receive arises. Principles of consolidation Other Government grants, which are revenue in nature and are towards compensation for the related costs, are recognised as income in the Statement of Profit and Loss in the period in which the matching costs are incurred. d. C. 4. Dividend income is accounted in the period in which the right to receive the same is established. b. b. Other income B. Other operational revenue represents income earned from the activities incidental to the business and is recognised when the right to receive the income is established as per the terms of the contract. b. Other operational revenue provision, if any, required for claims IBNER. Estimated liability for claims Incurred But Not Reported ('IBNR') and claims Incurred But Not Enough Reported ('IBNER') is based on actuarial estimate duly certified by the appointed actuary of the Company. IBNR/IBNER has been created on reinsurance accepted from Indian Motor Third Party Insurance Pool (IMTPIP) based on actuarial estimates received from the IMTPIP. NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) Utility right to use costs are amortised over the period of 'agreement to use', but not exceeding 10 years. a. Interest income is accrued at applicable interest rate. C. d. e. Share of the assets, according to nature of the assets, and share of the liabilities are shown as part of gross block and liabilities respectively. Share of expenses incurred on maintenance of the assets is accounted as expense. Monetary benefits, if any, from use of the assets are reflected as income. Company's share of revenues, common expenses, assets and liabilities are included in revenues, expenses, assets and liabilities respectively. Accounting treatment Jointly controlled entities | Jointly controlled operations Type of joint venture The Company's interests in joint ventures are consolidated as follows: f. 6. 5. NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) Notes forming part of the Consolidated Accounts (contd.) 379 The gains/losses in respect of part dilution of stake in subsidiary companies pursuant to issue of additional shares to minority shareholders are recognised directly in capital reserve under reserves and surplus in the Balance Sheet. The gains/losses in respect of part divestment of stake in subsidiary companies pursuant to sale of shares by the holding company are recognised in the Statement of Profit and Loss. Minority interest represents that part of the net profit or loss and net assets of subsidiaries attributable to interests which are not owned, directly or indirectly, by the Group. Further, Preference shares issued by the subsidiaries to stakeholders outside the Group together with dividend accruals thereon also form part of minority interest in the Consolidated Financial Statements. Goodwill on consolidation represents the difference between the Group's share in the net worth of a subsidiary, an associate or a joint venture, and the cost of acquisition at each point of time of making the investment in the subsidiary, the associate or the joint venture as per Accounting Standard (AS) 21 "Consolidated Financial Statements". For this purpose, the Group's share of net worth is determined on the basis of the latest financial statements, prior to the acquisition, after making necessary adjustments for material events between the date of such financial statements and the date of respective acquisition. Capital reserve on consolidation represents negative goodwill arising on consolidation. Goodwill arising on consolidation as per Accounting Standard (AS) 21 "Consolidated Financial Statements" is not amortised, however, it is tested for impairment. In the event of cessation of operations of a subsidiary, associate or joint venture, the unimpaired goodwill is written off fully. Investments in associate companies have been accounted for, by using equity method whereby investment is initially recorded at cost and the carrying amount is adjusted thereafter for post-acquisition change in the Company's share of net assets of the associate. The carrying amount of investment in associate companies is reduced to recognise any decline which is other than temporary in nature and such determination of decline in value, if any, is made for each investment individually. The unrealised profits/losses on transactions with associate companies are eliminated by reducing the carrying amount of investment. Joint venture interests accounted as above are included in the segments to which they relate. Extraordinary and exceptional items 8. Jointly controlled assets 9. B. Leasehold land: iv. Leasehold improvements are amortised over the period of lease. Leasehold improvements: Assets acquired under finance leases are depreciated on a straight line basis over the lease term. Where there is reasonable certainty that the Company shall obtain ownership of the assets at the end of the lease term, such assets are depreciated based on the useful life prescribed under Schedule II to the Companies Act, 2013 or based on the useful life adopted by the Company for similar assets. iii. Land acquired under long term lease is classified under "tangible assets" and is depreciated over the period of lease. Lease transactions entered into on or after April 1, 2001: Lease charge comprising statutory depreciation and lease equalisation charge is provided for assets given on lease over the primary period of the lease equal to recovery of net investment in the lease. Accordingly, while the statutory depreciation on such assets is provided for on straight line method as per Schedule II to the Companies Act, 2013, the difference is adjusted through lease equalisation and lease adjustment account. i. Lease transactions entered into prior to April 1, 2001: Leased assets b. NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) Notes forming part of the Consolidated Accounts (contd.) LARSEN & TOUBRO ii. Foreign companies Depreciation has been provided on methods and at the rates required/permissible by the local laws so as to write off the assets over their useful lives. 11. Intangible assets and amortisation g. Tangible fixed assets Notes forming part of the Consolidated Accounts (contd.) 383 Exploration and evaluation expenditure incurred for potential mineral reserves is recognised and reported as part of "intangible assets under development" under "intangible assets" when such costs are expected to be either recouped in Toll collection rights in respect of road projects are amortised over the period of concession using the revenue based amortisation method prescribed under Schedule II to the Companies Act, 2013. Under the revenue based amortisation method, amortisation is provided based on proportion of actual revenue earned till the end of the year to the total projected revenue from the intangible assets expected to be earned over the concession period. Total projected revenue is reviewed at the end of each financial year and is adjusted to reflect changes in earlier estimate vis-à-vis the actual revenue earned till the end of the year so that the whole of the cost of the intangible asset is amortised over the concession period. Toll collection rights obtained in consideration for rendering construction services represent the right to collect toll revenue during the concession period in respect of Build-Operate-Transfer (BOT) projects undertaken by the Group. Toll collection rights are capitalised as intangible asset upon completion of the project at the cumulative construction costs including related margins (refer to policy on revenue recognition supra) plus obligation towards negative grants payable to National Highway Authority of India (NHAI), if any. Till the completion of the project, the same is recognised as intangible assets under development. The revenue towards collection of toll/other income during the period of construction is reduced from the cost of intangible asset under development. f. e. Customer contracts and relationships: over a period of seven to ten years; d. Development costs for new products: over a period five years; C. Technical know-how: over a period of three to seven years; b. a. Specialised software: over a period of three to ten years; Intangible assets are stated at original cost net of tax/duty credits availed, if any, less accumulated amortisation and cumulative impairment. Intangible assets are recognised when it is probable that the future economic benefits that are attributable to the asset will flow to the enterprise and the cost of the asset can be measured reliably. Intangible assets are amortised as follows: iv. Depreciation charge for impaired assets is adjusted in future periods in such a manner that the revised carrying amount of the asset is allocated over its remaining useful life. iii. Depreciation for additions to/deductions from owned assets is calculated pro-rata. Extra shift depreciation is provided on a location basis. NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) Depreciation on assets carried at historical cost is provided on straight line method on the basis of useful life as specified in Schedule II to the Companies Act, 2013 except in respect of certain assets where the useful life was determined by technical evaluation. The carrying amount of the assets as on April 1, 2014 is depreciated over the remaining useful life. Where the useful life of the asset has expired, the carrying amount as on April 1, 2014 has been charged to the retained earnings as on April 1, 2014. iii. ii. NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) Notes forming part of the Consolidated Accounts (contd.) 381 i. Lease transactions entered into on or after April 1, 2001: Finance leases: between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the outstanding liability for each period. b. a. Lease transactions entered into prior to April 1, 2001: The determination of whether an agreement is, or contains, a lease is based on the substance of the agreement at the date of inception. Tangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as "capital work-in-progress". (Also refer to policy on leases, borrowing costs, impairment of assets and foreign currency transactions infra). Leases Own manufactured assets are capitalised at cost including an appropriate share of overheads. Administrative and other general overhead expenses that are specifically attributable to construction or acquisition of fixed assets or bringing the fixed assets to working condition are allocated and capitalised as a part of the cost of the fixed assets. Where cost of a part of the asset ("asset component") is significant to total cost of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part is determined separately and such asset component is depreciated over its separate useful life. In respect of asset components, whose useful life has expired as on April 1, 2015, the carrying amount as on April 1, 2015 has been charged to the retained earnings as on April 1, 2015. Tangible fixed assets are stated at original cost net of tax/duty credits availed, if any, less accumulated depreciation and cumulative impairment and those which were revalued as on October 1, 1984 are stated at the values determined by the valuers less accumulated depreciation and cumulative impairment. Assets acquired on hire purchase basis are stated at their cash values. Specific know-how fees paid, if any, relating to plant & equipment is treated as part of cost thereof. Assets leased out are stated at original cost. Lease equalisation adjustment is the difference between capital recovery included in the lease rentals and depreciation provided in the books of account. Lease rentals in respect of assets acquired under leases are charged to the Statement of Profit and Loss. Assets given under leases where the Company has transferred substantially all the risks and rewards of ownership to lessee, are classified as finance leases. Where under a contract, the Company has agreed to manufacture/construct an asset and convey, in substance, a right to the beneficiary to use the asset over a major part of its economic life, for a pre-determined consideration, such arrangement is also accounted as finance lease. Assets acquired under leases where the Company has substantially all the risks and rewards of ownership are classified as finance leases. Such assets are capitalised at the inception of the lease at the lower of the fair value or the present value of minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated iv. Initial direct costs relating to assets given on finance leases are charged to the Statement of Profit and Loss. Operating leases: With effect from April 1, 2015, the difference between depreciation provided on revalued amount and on historical cost is transferred from revaluation reserve to retained earnings. Assets given under a finance lease are recognised as a receivable at an amount equal to the net investment in the lease. Wherever the asset is manufactured/constructed by the Company, the fair value of the asset, representing the net investment in the lease, is recognised as sales revenue in accordance with the Company's revenue recognition policy. Lease income is recognised over the period of the lease so as to yield a constant rate of return on the net investment in the lease. ii. 382 Revalued assets: i. a. Indian companies Owned assets A. 10. Depreciation (Also refer to policy on depreciation infra). Assets carried at historical cost: Assets leased out under operating leases are capitalised. Rental income is recognised on accrual basis over the lease term. ii. i. Assets acquired on leases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals are charged to the Statement of Profit and Loss on accrual basis. Depreciation on assets carried at revalued amount i.e., values determined by valuers is provided on straight line method on the basis of useful life as specified in Schedule II to the Companies Act, 2013 except in respect of certain assets where the useful life was determined by technical evaluation. Have you advocated/lobbied through above associations for the advancement or improvement of public good? pursuit of the policy related to Principle 8? AR 29 AR Does the company have specified programmes/initiatives/projects in Principle 8: Inclusive Growth Are the programmes/projects undertaken through in-house team/own foundation/ external NGO/government structures/any other organisation? Principle 7: Policy Advocacy AR Page Number Section Reference LARSEN & TOUBRO Is your company a member of any trade and chamber or association? If Yes, Name only those major ones that your business deals with: Question 28 29 34 Number of show cause/legal notices received from CPCB/SPCB which are pending (i.e. not resolved to satisfaction) as on end of Financial Year. 29 Have you done any impact assessment of your initiative? AR AR 2015-16 crore Statement of Profit and Loss Description STANDALONE FINANCIALS-10 YEAR HIGHLIGHTS 35 31 AR 31 AR What is your company's direct contribution to community development projects - Amount in INR and the details of the projects undertaken. The details related to stakeholder complaints are included in the Director's Report Section of this Annual Report. Does the company display product information on the product label, over and above what is mandated as per local laws? What percentage of customer complaints/consumer cases are pending as on the end of financial year. Principle 9: Customer Welfare 29-30 AR AP Have you taken steps to ensure that this community development initiative is successfully adopted by the community? 31 AR 29-30 Is there any case filed by any stakeholder against the company regarding unfair trade practices, irresponsible advertising and/or anti-competitive behavior during the last five years and pending as of end of financial year? Are the Emissions/Waste generated by the company within the permissible limits given by CPCB/SPCB for the financial year being reported? How many stakeholder complaints have been received in the past financial year and what percent was satisfactorily resolved by the management? Principle 6: Environment AR AR Has the company mapped its internal and external stakeholders? Principle 4: Valuing Marginalized Stakeholders 25 AR What percentage of your undermentioned employees were given safety and skill upgradation training in the last year? 25 AR Please indicate the Number of complaints relating to child labour, forced labour, involuntary labour, sexual harassment in the last financial year and pending, as on the end of the financial year. 25 AR Page Number Section Reference What percentage of your permanent employees is members of this recognized employee association? Do you have an employee association that is recognized by management? Number of permanent employees with disabilities Number of permanent women employees. Total number of employees. Total number of employees hired on temporary/contractual/casual basis. 2014-15 2013-14 2012-13 2011-12 2010-11 26 28 Out of the above, has the company identified the disadvantaged, vulnerable & marginalized stakeholders? 26 Has the company undertaken any other initiatives on - clean technology, energy efficiency, renewable energy, etc.? Y/N. No 27 AR Does the company have any project related to Clean Development Mechanism? Does the company identify and assess potential environmental risks? 27 AR ☑ Does the company have strategies/ initiatives to address global environmental issues such as climate change, global warming, etc? 27 AP AR Does the policy related to Principle 6 cover only the company or extends to the Group/ Joint Ventures/Suppliers/Contractors/NGOs/others? 26-27 AR 26 AR Does the policy of the company on human rights cover only the company or extend to the Group/Joint Ventures/Suppliers/Contractors/NGOs/Others? Principle 5: Human Rights Are there any special initiatives taken by the company to engage with the disadvantaged, vulnerable and marginalized stakeholders? AR 2009-10 2008-09 2007-08 2006-07 2078 Gross revenue from operations 11459 12936 13609 Loan funds 40 61 48 77 263 133 290 410 363 203 Deferred tax liability (net) 5768 9555 12460 18312 21846 25223 8478 29291 9896 6801 10.60 Principle 3: Employee Well Being 11.78 11.38 10.32 operations @ PBDIT as % of net revenue from Ratios and statistics 7886 13200 19064 25190 29270 35252 38059 45531 50384 54530 Capital employed 3584 6556 7161 33662 37085 40718 1784 2969 3922 4816 5640 6283 5473 6667 6488 6171 17938 25342 34337 37356 44296 53738 52196 57164 57558 60415 PBDIT^^ Profit after tax (excluding extraordinary/exceptional items) 4766 4699 Net worth Balance Sheet 1403 2173 3482 4376 3958 4457 4384 5493 $$ 5056 extraordinary/exceptional items) Profit after tax (including 1385 2099 2709 3185 3676 4413 4169 4905 5311 Question Regular health check-up camps are held in schools and pre-schools. customers save on the energy bills and contribute to reduction of GHG emissions from consumption of indirect energy. Corporate Identity Number (CIN) of the Company Section A: General Information about the Company 6. 5. Website 4. 3. Name of the Company 2. 1. Page Number Section Reference Question ANNEXURE: MAPPING TO THE SEBI FRAMEWORK 31 Our R&D efforts focus on meeting customer requirements. Regarding unfair trade practices, irresponsible advertising and or anti-competitive behavior, no stakeholder has filed a case against the Company in the last five years, and there are no pending cases as on 31st March 2016. All norms, standards and voluntary codes and guidelines related to marketing communication are adhered to. The brand management guidelines institutionalised by L&T's Corporate Brand Management & Communications department authenticate communications and help customers identify and distinguish the Company's products. All our channel partners, i.e. stockists and dealers, are briefed about new product features and components. The high percentage of repeat orders is a reliable indication of customer satisfaction and confidence in L&T's products, projects and services. Electro-technical Commission. An established system of addressing customer complaints, comments and suggestions ensures regular personal interaction with clients. The system consists of regular customer meets, customer satisfaction surveys, training programmes for customer representatives and market-based research. Registered Address Organization for Standardization and the International Email id AR Markets served by the Company - Local/State/National/International ii. Number of National Locations i. Number of International Locations (Provide details of major 5 Total number of locations where business activity is undertaken by the Company 9. (as in balance sheet) 19 AR List three key products/services that the Company manufactures/provides 8. Sector(s) that the Company is engaged in (industrial activity code-wise) 7. 18 AR 18 AR 18 AR 18 AR 18 Financial Year Reported Health and safety concerns are integrated at the product design stage. Our products carry suitable labeling and are accompanied by Operation & Maintenance manuals in line with relevant codes and specifications. Similar clarity is maintained across all our projects. Products are tested and benchmarked against stringent national and international standards such as the Bureau of Indian Standards, the International We believe our leadership position in most of our major businesses rests on our ability to consistently improve the value we offer to our customers. We engage with our clients to understand requirements, and anticipate needs. We invest in R&D, design facilities, superior manufacturing and testing processes, and set up training centres for our own personnel as well as those of our customers. PRINCIPLE 9: ENGAGE WITH AND PROVIDE VALUE TO CUSTOMERS Skill Development Education The inclusive growth and development of communities around us are integral to our Corporate Social Responsibility Policy. The Company has identified the following thrust areas: • Health Goals, and addresses the most pressing needs - water, sanitation, education, health and skill development. The Company's CSR policies are structured around the theme 'Building India's Social Infrastructure' with the objective of maximising their impact. Our Integrated Community Development (ICD) Programme is aligned with the UN's Sustainable Development PRINCIPLE 8: SUPPORT INCLUSIVE GROWTH The Company also interacts regularly with the Indian Institute of Corporate Affairs (IICA) on CSR-related aspects and with the the Confederation of Indian Industry Centre of Excellence for Sustainable Development on sustainability policies and regulations. We are also part of the working teams on the Environmental & Recycling Council of CII, BCCI - Environment, Health & Safety (EHS) Committee. • National Safety Council (NSC) • National Fire Protection Institution (NFPI) • Indian Institute of Chemical Engineers (IIChE) • Indian Electrical and Electronics Manufacturers Association • CII - Green Business Centre (GBC) • Federation of Indian Chambers of Commerce and Industry (FICCI) • Confederation of Indian Industry, Centre of Excellence for Sustainable Development (CII-CESD) Development Council (CIDC) • Construction Industry • Bureau of Indian Standards (BIS) • Bombay Chamber of Commerce & Industry (BCCI) Commerce and Industry of India (ASSOCHAM) Communicators of India • Associated Chambers of • Association of Business policy formulation. The Company actively partners with a number of institutions and associations, including: LARSEN & TOUBRO • Water & Sanitation CSR projects are identified and implemented by unit-level CSR teams, area/branch offices and project sites, with guidance of the CSR Committee of L&T Board. The Ladies Clubs, formed by the wives of L&T Employees and Employee volunteers known as 'L&Teers' participate in the implementation of the Company's CSR projects. The Company collaborates with NGOs and society at large to identify the requirements of local communities before initiating any social welfare programme. Periodic impact- assessment helps monitor the benefits received by the community, and leads to augmentation of the CSR project. The Community Development Programmes are either fully adopted or supported by the Company as per the need, on a case-to-case basis. Capacity- building programmes for local administrations are also conducted to successfully run the programmes. Our CSR Snapshot LARSEN & TOUBRO The Company spent a sum of 119.89 Crores in FY 2015-16 towards CSR as per the Companies Act, 2013. Vocational training programmes in tailoring, beautician's courses, home nursing and food processing for women are enabling them to become self-reliant. Through the CSTIS and other vocational training programmes, we have reached out to over 45,000 youth and women from underprivileged backgrounds and have provided them with viable skills. Currently, the Company runs CSTIS on its own, and has collaborated with 27 ITIS. The CSTIS provide free training in construction skills to rural and urban youth in various trades, such as bar-bending, formwork, carpentry, masonry, scaffolding and welding, etc. This training improves the skill sets of the underprivileged youth and enhances their employability. Units set up in collaboration with ITI impart industry-oriented training. Skill Development The Company has set up Construction Skills Training Institutes (CSTIs) at eight locations to impart free training to rural and urban youth in basic construction trades. In addition, the Company has set up vocational institutes and has in place programmes that impart skills in several trades to enhance the employability of underprivileged youth. Artificial kidney dialysis centres for the underprivileged have been set up at the Company's three Health Centres. Our Community Health Centres reach out to over 3 lakh beneficiaries annually. At 13 locations we cater their needs through mobile health vans. The Company's HIV/AIDS management initiatives include awareness camps (particularly for high-risk groups), Anti-Retroviral Therapy, counselling and testing. 11.82 To help the economically weak stay healthy despite the high cost of healthcare, the Company has launched initiatives to provide affordable health and welfare. The Company has set up seven Community Health Centres near its key campuses. They focus on reproductive health and conduct diagnostic and clinical camps to enhance health-seeking behavior of the community. Health Section B: Financial Details of the Company Extra-curricular outings help widen children's horizons. The distribution of colorful school kits is one more step in ensuring that children have resources to study at home. Employees volunteer their time and talent to mentor these children. Currently, the Company is supporting over 250 schools across India and reaching out to over 2 lakh underprivileged children in addition to undertaking interventions in over 100 balwadis and anganwadis. 30 30 29 Our Science-on-Wheels van visits schools, giving children the opportunity to experience the hands-on experiments. Summer camps and sports activities help pupils develop social skills. We enrich education in primary schools through innovative learning methodologies. We provide infrastructure support to schools. After-hours 'Single Teacher' schools help children improve their learning levels. We support pre-schools, set up computer laboratories, provide teaching aids and uniforms and augment teacher capacity. Our educational initiatives focus on providing primary education, developing infrastructure and enhancing the learning experience in the vicinity of our units across India. Education To begin with, districts and tehsils were identified in the States of Tamil Nadu, Maharashtra and Rajasthan. In these States, ICD Programmes were launched. Replicable and indigenous methods for augmenting water supply are being adopted, such as building check dams, field bunds, and soil and water conservation interventions. In addition, through the Larsen & Toubro Public Charitable Trust, we have constructed 200 check dams, which help in irrigation and ground water recharge at Talasari Block near Mumbai. The programme will also enable the community to build and utilise sanitation facilities. interventions were identified as water-stressed on the basis of water availability, quality and uncertainty. Further access to sanitation, health, education, availability of drinking water and Human Development Index (HDI) were also taken into consideration. Water & Sanitation The unavailability of safe drinking water results in increasing morbidity and mortality rates. It also negatively impacts educational attainments, migration and livelihood opportunities. For our ICD programmes, locations for The social infrastructure we seek to build covers a wide spectrum - water, sanitation, education, health and skill development. AR 19 AR The details related to stakeholder complaints are included in the Director's Report Section of this Annual Report AR 21 AR Page Number Section Reference How many stakeholder complaints have been received in the past financial year and what percentage was satisfactorily resolved by the management? Does the policy relating to ethics, bribery and corruption cover only the company? Does it extend to the Group/Joint Ventures/ Suppliers/Contractors/NGOs /Others? Principle1: Ethics, Transparency and Accountability Section E: Principle-wise Performance Does the Company publish a BR or a Sustainability Report? What is the Hyperlink for viewing this report? How frequently it is published? Question LARSEN & TOUBRO 21 AR 32 Indicate the frequency with which the Board of Directors, Committee of the Board or CEO to assess the BR performance of the Company. Within 3 months, 3-6 months, Annually, More than 1 year 3. Governance Related to BR • e-mail ID • 22-23 Principle 2: Sustainable Products and Services List up to 3 of your products or services whose design has incorporated social or environmental concerns, risks and/or opportunities. For each such product, provide the following details in respect of resource use (energy, water, raw material etc.) per unit of product (optional): and locally source most of construction material. The Company is a leading EPC solution provider for Solar Photo Voltaic (PV) based power plants helping utilize recycled material Building & Factories business part of Construction Business help customers to reduce energy and water consumption, constructed by the 23-24 Green buildings 23-24 AR 23-24 AR • 23-24 P 23-24 AR 23-24 AR Does the company have a mechanism to recycle products and waste? If yes what is the percentage of recycling of products and waste (separately as <5%, 5-10%, >10%). Also, provide details thereof, in about 50 words or so. If yes, what steps have been taken to improve their capacity and capability of local and small vendors? Has the company taken any steps to procure goods and services from local & small producers, including communities surrounding their place of work? |(including transportation)? Does the company have procedures in place for sustainable sourcing AR 33 Telephone number • Name AP AR List of activities in which expenditure in 4 above has been incurred: - Section C : Other Details 5. 19 AR Total spending on Corporate Social Responsibility (CSR) as percentage of profit after tax (%) 4. Total profit after taxes (INR) 3. 19 AR 19 AR Total Turnover (INR) 2. Paid up Capital (INR) 1. 19 AR 19 19 1. Does the Company have any Subsidiary Company/ Companies? 2. ⚫ DIN Number (if applicable) b) Details of the BR head Designation • • Name • DIN Number Details of the Director/Director the BR policy/policies a) 20 AR Designation Details of Director/Directors responsible for BR Section D: BR Information [Less than 30%, 30-60%, More than 60%] Do any other entity/entities (e.g. suppliers, distributors etc.) that the Company does business with, participate in the BR initiatives of the Company? If yes, then indicate the percentage of such entity/entities. 3. company(s) 19 AR 19 AR Do the Subsidiary Company/Companies participate in the BR Initiatives of the parent company? If yes, then indicate the number of such subsidiary 1. 12.84 10.26 11.56 -5000 5091 96000- -5100 crore 98000- Percentage -7.0 7.3 7.6 -7.5 70000- 90000- 110000- -5200 -8.0 100000- 130000- -5300 103522 102000- 94000- 136858 92762 92000- L&T CONSOLIDATED - PBDIT AS % OF NET REVENUE FROM OPERATIONS PAT including exceptional and extraordinary items Gross revenue from operations L&T CONSOLIDATED - ORDER BOOK India GDP growth Order Inflow 2015-16 2014-15 2015-16 2014-15 -4600 86000 6.0 30000 -4700 4765 88000- -6.5 50000 90000- -4800 -4900 -8.5 150000- -5400 5.67 7.00 8.33 9.67 18.25 16.25 14.25 12.33 11.00 Dividend per equity share (*) ## 80.92 232.04 158.84 122.87 472.12 439.93 406.65 366.59 319.64 273.97 Book value per equity share (*) ## 26.73 26.96 56.53 51.21 49.04 61.27 43.17 52.97 54.69 51.33 Basic earnings per equity share (*) # 0.90:1 1.08:1 1.32:1 1.12:1 1.61:1 1.31:1 1.85:1 2.13:1 4.33 ^^ @ Profit before depreciation, interest and tax [PBDIT] is excluding extraordinary/exceptional items and other income. PBDIT as % of net revenue from operation = [(PBDIT/(gross revenue from operation less excise duty)]. 104000- 155367 -5500 106000 -9.0 170000- FROM OPERATIONS AND PAT L&T CONSOLIDATED - GROSS REVENUE L&T CONSOLIDATED-ORDER INFLOW crore 13000 * crore 38 37 After considering issue of bonus shares/restructuring during the respective years. ## # Basic earnings per equity share has been calculated including extraordinary/exceptional items and adjusted for all the years for issue of bonus shares/ restructing during the respective years. RONW [(profit available for appropriation including extraordinary/exceptional items)/(average net worth excluding revaluation reserve and miscellaneous expenditure)]. PAT as % of net revenue from operation = [(PAT including extraordinary/exceptional items)/(gross revenue from operation less excise duty)]. ** $ HV 2.21:1 260000- 7% ☐ Developmental 2% Financial Services 2295- 8787 8% Services IT & Technology Hydrocarbon ☐ ☐ 5175 4% 8% 8956- 9% ☐ Electrical & Automation 10447 7540-― 7% 48797 47% 5137 5% Infrastructure Power ☐ Metallurgical & Material Handling Heavy Engineering ☐ ☐ 8956- 6% 62% 3661 84817 4961 5% ☐ ☐ HV crore Total segment wise revenue 103522 crore Total segment wise order inflow 136858 crore ☐ Others Developmental Projects ☐ Financial Services Services IT & Technology Heavy Engineering Electrical & Automation Hydrocarbon Metallurgical & Material Handling Power Infrastructure -6993 7% 2% 2415 3% 3124- Projects Others 2702 2% 3% ☐ ☐ 5% 7540- 4% 7000 160000- -10.0 8000. crore 180000- 12.0 9000- 12.2 200000- -12.0 10000 220000- 11000 -14.0 12343 -16.0 232649 11258 240000- 12000 Percentage -8.0 140000- 120000- 13.00 6813 7% 6128 4% 5137 crore L&T CONSOLIDATED - SEGMENT-WISE REVENUE 2015-16 L&T CONSOLIDATED - SEGMENT-WISE ORDER INFLOW 2015-16 Net revenue from operations and PBDIT exclude exceptional/extraordinary items 2015-16 PBDIT as % of net revenue from operations 2015-16 249949 2014-15 2014-15 -4.0 3000 4000 -6.0 5000 6000- 60000- 80000- 100000- PBDIT 2.30:1 crore 38.01 ^^ 44,081 54,579 50,592 48,754 45,117 38,785 37,357 31,941 27,191 43,354 No. of employees 8,14,678 9,31,362 5,78,177 4,28,504 8,53,824 8,32,831 8,54,151 9,26,719 8,53,485 10,28,541 No. of equity shareholders 67.43 108.63 141.54 202.46 398.78 362.95 317.09 274.35 238.96 436.97 Book value per equity share (*) ## 16.74 25.20 39.67 49.18 43.55 48.61 @ 53.33 Profit before depreciation, interest and tax (PBDIT) is excluding extraordinary/exceptional items and other income PBDIT as % of net revenue from operations = [(PBDIT)/(gross revenue from operations less excise duty)] * 103522 2008-09 2007-08 2006-07 2015-16 2014-15 2013-14 2012-13 2011-12 2010-11 2009-10 crore Profit attributable to shareholders of Parent Company (including extraordinary/exceptional items) Profit attributable to shareholders of Parent Company (excluding extraordinary/exceptional items) PBDIT^^ Gross revenue from operation Statement of Profit and Loss Description CONSOLIDATED FINANCIALS-10 YEAR HIGHLIGHTS LARSEN & TOUBRO 36 Figures for the year 2006-07 to 2011-12 include Hydrocarbon business which has been transferred w.e.f April 1, 2013 to a wholly owned subsidiary $$ After considering issue of bonus shares/restructuring during the respective years ## Basic earnings per equity share have been calculated including extraordinary/exceptional items and adjusted for all the years for issue of bonus shares/restructuring during the respective years Profit After Tax (PAT) as % of net revenue from operations = [(PAT including extraordinary/exceptional items)/(gross revenue from operations less excise duty)] # RONW [(PAT including extraordinary/exceptional items)/(average net worth excluding revaluation reserve and miscellaneous expenditure)] $ 59.36 54.46 57.07 19.73 18.95 16.06 17.46 14.30 13.66 RONW % * 7.97 8.69 11.82 9.01 8.38 8.50 9.71 8.87 8.89 operations $ PAT as % of net revenue from 10.14 11.87 Gross debt:equity ratio 28.49 31.71 29.21 27.19 Basic earnings per equity share (*) # 4.33 5.67 7.00 8.33 9.67 11.00 12.33 14.25 16.25 92762 85889 75195 64960 52470 44310 18.25 0.36:1 0.38:1 0.53:1 0.37:1 0.33:1 0.39:1 0.29:1 0.34:1 0.35:1 Gross Debt: Equity ratio Dividend per equity share (*) ## 40932 29819 0.33:1 12343 121558 99369 78372 59186 44887 33578 23996 13875 136294 151676 Capital employed 6200 22656 18400 12120 32798 47150 62672 80330 90571 101307 Loan funds 107 122 131 153 311 82 184 337 Ratios and statistics (392) (185) PBDIT as % of net revenue from operations @ 12.24 12.60 13.33 13.81 14.75 14.61 31.23 30.64 26.92 20877 19.38 16.47 17.26 13.71 12.13 12.00 RONW % ** 10.92 7.89 9.35 12.40 8.56 7.30 5.76 5.18 4.96 PAT as % of net revenue from operations $ 12.75 12.58 12.40 12.03 Deferred tax liability (net) 6.99 923 5206 4902 4765 5091 1810 2304 3007 3796 4238 4649 4694 4911 4470 2615 3706 5024 6423 7677 8884 646 11258 10730 9929 4547 4456 4748 3789 1026 1087 5451 1059 1753 2653 3179 Minority Interest 6922 10831 13988 6769 4999 29387 25051 33860 37712 2325 40909 43992 Net worth 20991 Balance Sheet 2240 Share capital (including share application Private 1 financial year Exchange rate on the last day of Currency 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 Financial year ending on 2233.20 Limited Limited 31-Mar-16 8.00 945.76 710.60 3 (0.26) Private (369.14) (1074.77) 0.36 (508.95) 234.10 519.98 Reserves 2 money pending allotment) 0.01 292.22 566.60 0.05 14.68 Forgings 9 L&T & Steel no. Sr. Particulars Sr. no. 100.00 100.00 97.00 8 100.00 100.00 50.0001 99.90 100.00 % of share holding Liabilities 15 Seawoods Limited Company 10 L&T-Gulf Private Limited 12 Tollway Limited Heavy Company Private Limited Steels and Aluminium Kesun Iron PNG L&T Special Raykal L&T-MHPS Turbine Generators Private Limited L&T-MHPS Boilers Private Limited 16 15 14 13 11 383.18 (0.03) 2669.02 105.33 1.05 3.10 Provision for taxation 9 (144.67) (0.31) (284.27) 362.86 3.04 14.51 Profit before taxation 8 84.90 (86.98) 10 Profit after taxation 11.41 - Proposed dividend - preference 14 Proposed dividend - equity 13 Interim dividend - Preference 12 Interim dividend equity 11 (144.67) (284.27) (0.03) (86.67) 257.53 1.99 94.63 718.27 1711.70 19.33 0.01 1660.83 1611.82 0.94 2642.10 3423.10 28.80 3562.14 Total liabilities 4 0.26 1737.75 2119.99 0.53 2440.45 5 6.12 Total assets 28.80 229.21 Turnover 7 0.09 457.34 0.39 0.64 Investments 6 0.01 1660.83 1611.82 0.94 2642.10 3423.10 3562.14 Proposed dividend preference 31-Mar-16 Proposed dividend - equity Exchange rate on the last day of Currency Limited Aggregates Products & and Automation Limited 31-Mar-16 financial year 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 Financial year ending on Rock Hi-Tech 31-Mar-16 1 Share capital (including share application 6.80 (2215.54) 70.23 17.35 51.47 30.07 Reserves 2 money pending allotment) 0.05 0.05 2315.86 1.18 0.44 5.57 0.05 L&T Electricals Infotech Engineering Shipbuilding Private Limited Limited Limited L&T L&T-Valdel Part A: "Subsidiaries" Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures 389 Cash and cash equivalents (including bank balances) are reflected as such in the Cash Flow Statement. Those cash and cash equivalents which are not available for general use as on the date of Balance Sheet are also included under this category with a specific disclosure. items of income or expense associated with investing or financing cash flows C. b. any deferrals or accruals of past or future operating cash receipts or payments and transactions of a non-cash nature a. Cash flow statement is prepared segregating the cash flows from operating, investing and financing activities. Cash flow from operating activities is reported using indirect method. Under the indirect method, the net profit is adjusted for the effects of: 27. Cash flow statement NOTE [R] SIGNIFICANT ACCOUNTING POLICIES (contd.) Notes forming part of the Consolidated Accounts (contd.) LARSEN & TOUBRO 15 crore (0.02) Sr. no. 2 Spectrum L&T-Sargent & Lundy Limited Supply Company Limited Power Tools Limited no. Bhilai L&T Cutting Sr. Particulars 8 7 6 5 4 3 1 4.27 3 Liabilities 3.97 Provision for taxation 9 3.33 (689.08) 18.34 1.89 24.14 20.52 Profit before taxation 8 145.87 548.05 123.23 17.04 7.45 131.29 0.63 1.27 13 Interim dividend - Preference 12 (19.16) (14.28) Interim dividend equity 11 2.06 (689.08) 11.44 1.26 16.69 16.55 Profit after taxation 10 6.90 14 159.00 7 98.55 31.10 129.62 8.86 81.69 Total liabilities 4 43.85 0.03 4873.58 27.14 13.31 72.58 8.81 44.82 4973.90 Turnover 0.06 5 8.39 0.35 64.90 0.01 Investments 6 48.17 0.06 4973.90 98.55 31.10 129.62 8.86 81.69 Total assets 48.17 398 Not Considered in Consolidation Sr. no. USD CAD ZAR CNY Exchange rate on the last day of 66.16 75.37 31-Dec-15 51.22 51.22 4.49 10.23 financial year 1 Share capital (including share application 1760.05 66.25 0.35 31-Mar-16 31-Mar-16 87 Larsen & Toubro Technologies Infotech South Africa 88 L&T Information Technology Inc. (PTY) Limited Services (Shanghai) 31-Mar-16 Co. Ltd. 31-Mar-16 31-Dec-15 31-Mar-16 Currency USD EURO 31-Mar-16 CAD Financial year ending on 0.11 280.00 0.27 Total liabilities 5626.34 2.94 38.68 15.27 11.80 353.55 1.91 24.33 Total assets 5626.34 2.94 38.68 15.27 11.80 353.55 2.41 22.26 26.44 0.54 1.10 money pending allotment) 234567 Reserves (484.17) 2.07 28.07 10.04 11.26 47.11 1.80 (0.60) Liabilities 4350.46 0.52 10.50 5.23 Financial Services 24.33 & Toubro Infotech LLC & Toubro Infotech GmbH Private Limited Private (Haldia) Rishi Vizag IT Park | JSK Electicals Limited Consfab Seaports Facilities LLC Limited Private L&T Camp 7 6 5 4 3 2 Limited Feedback L&T-Chiyoda International Infra Private Limited 1 2,450 98,30,000 45,00,000 37,90,000 Number company at the year end Shares of Associate/Joint Ventures held by the Limited 2 31-Mar-16 31-Mar-15 31-Dec-15 31-Mar-15 31-Mar-16 31-Mar-16 Latest audited Balance Sheet date 31-Mar-15 Name of Associates/Joint ventures Sr. no. 1 Proposed dividend - equity 13 Interim dividend - Preference 12 Interim dividend equity 11 (0.06) 14 (0.09) (0.05) (16.74) (0.03) (2.14) (50.84) Profit after taxation 10 (0.51) Proposed dividend - preference 15 % of share holding Sr. no. Part B: "Associates/Joint ventures" Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures 397 94.96 56.67 100.00 8│ 8 100.00 94.96 100.00 72.50 49.00 |||| | | | | 8 100.00 & Toubro Infotech Canada Limited 2.41 Investments 228.74 financial year Exchange rate on the last day of Currency 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 1 31-Mar-16 Limited Limited Private 24 Chennai Vision Developers 23 L&T Realty Limited L&T Valves Limited L&T Kobelco Machinery Private Financial year ending on Limited Share capital (including share application 158.85 51.81 502.64 (16.79) 87.59 0.86 39.56 6.33 30.00 Reserves money pending allotment) 0.01 695.46 18.00 50.00 8.29 0.01 2 Limited Private Private 74.00 (0.02) 0.01 0.81 Provision for taxation 9 (0.08) 72.11 (0.09) (0.04) (15.93) (0.03) (2.14) (50.84) 8 Profit before taxation 184.86 (0.51) 95.00 390 LARSEN & TOUBRO L&T Sapura Ewac Alloys Limited Offshore Shipping L&T Sapura L&T Howden Private Limited 22 21 20 19 18 17 no. Sr. Particulars Sr. no. * crore Part A: "Subsidiaries" (contd.) Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures (0.02) 3 Liabilities 126.10 18.01 0.26 0.52 11.37 Provision for taxation 9 0.01 0.01 328.17 3.64 52.41 1.22 22.57 27.53 Profit before taxation 8 208.75 70.84 46.11 10 7 Turnover 7111.24 7.95 93.41 67.56 13.35 235.50 56.41 4.19 8 Profit before taxation 127.02 0.25 22.05 16.16 Profit after taxation 294.85 Amount of Investment in Associates/Joint 1465.32 220.64 1045.03 1259.82 91.78 170.76 14.63 689.68 162.43 0.01 Total liabilities 0.02 297.76 739.18 58.57 74.88 13.76 491.27 4 5 Total assets 162.43 6.28 198.93 137.98 Turnover 7 80.25 2.00 20.42 Investments 6 0.01 1045.03 1259.82 91.78 170.76 14.63 689.68 100.08 37.90 4.50 9.83 97.45 97.48 97.45 97.45 97.45 Sr. no. 73 97.45 74 76 77 78 79 80 Sr. Particulars L&T Deccan 75 L&T 97.45 % of share holding (54.01) (96.91) (4.85) (14.66) (7.14) (47.66) (56.64) 97.45 11 12 Interim dividend - Preference 13 Proposed dividend equity 14 Proposed dividend - preference 15 Interim dividend equity Kudgi L&T L&T Private 31-Mar-16 31-Mar-16 31-Mar-16 Limited 31-Mar-16 Currency Exchange rate on the last day of financial year Limited 1 152.50 126.03 192.60 215.85 1050.00 120.00 3.60 Share capital (including share application Services Equipment Engineering Limited Services Limited L&T L&T L&T Thales no. Tollways Limited Samakhiali Gandhidham Transmission Sambalpur- Technology Construction Infrastructure Technology Limited Rourkela Financial year ending on 31-Mar-16 Tollway Limited 31-Mar-16 31-Mar-16 Tollway Limited 31-Mar-16 Profit after taxation 10 0.02 0.03 3 Liabilities 1375.99 1208.75 1046.58 317.25 8080.89 (269.78) 390.80 1036.98 4 Total liabilities 1438.79 1232.98 1124.76 555.88 10381.57 (51.45) (0.19) (6.48) 1 Share capital (including share application 346.32 389.52 90.00 90.00 2030.66 42.00 247.20 228.04 money pending allotment) 2 Reserves (283.52) (365.29) (11.82) 148.63 10105.07 2.05 432.61 995.24 74.80 124.28 37.68 242.37 100.00 8 Profit before taxation 152.84 (53.98) (4.85) (14.64) (7.14) (47.66) (56.64) 9 Provision for taxation (96.91) Turnover 7 1.21 5 Total assets 1438.79 1232.98 1124.76 555.88 10105.07 432.61 10577.32 995.24 6 Investments 40.19 4.80 1.80 29.26 26.72 10577.32 20.62 money pending allotment) Reserves Part A: "Subsidiaries" (contd.) crore Sr. no. 81 Sr. Particulars L&T 82 Larsen & Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures 83 84 Larsen 85 Larsen 86 L&T Infotech no. Hydrocarbon Toubro LLC Larsen Engineering LARSEN & TOUBRO 74.00 Proposed dividend equity - 14 Proposed dividend preference 15 % of share holding 97.45 394 97.45 (227.00) (75.00) 97.45 97.45 100.00 100.00 100.00 | | | | 5 Limited 25 0.94 50.00% 15.74% 81,54,000 90,00,000 5,000 1,04,00,000 90,00,000 4,40,58,020 1,63,61,704 21.74% Reason why the Associate/Joint Venture is not consolidated influence Description of how there is significant 3 Extent of Holding % Total No of shares Venture (Crore) 4.42 4 49.00% Refer Note 1 Refer Note 5 3.75 (0.92) 5.85 3.26 (20.33) 12.60 Considered in Consolidation Profit/Loss for the year (Crore) 6 1.70 15.32 41.63 11.88 Networth attributable to Shareholding as per latest audited Balance Sheet (Crore) 5 Refer Note 5 Refer Note 5 13 Interim dividend - Preference 12 Interim dividend equity 679.73 1822.73 529.19 55.75 25.72 5 Total assets 1346.16 803.23 1346.16 679.73 1822.73 529.19 55.75 25.72 6 3486.98 3486.98 803.23 Total liabilities Liabilities (2.20) (62.23) (2.15) (2.45) 66.25 115.88 31.41 (5.21) 652.93 3423.18 1155.71 466.33 706.48 293.31 20.74 28.88 Investments 234 7.05 7.47 Provision for taxation 0.01 117.77 0.43 0.54 10 Profit after taxation 9 (1.13) (0.60) (1.08) 434.24 0.59 0.83 (1.82) 11 (58.64) (1.82) 1.37 1.02 2.63 61.63 35.30 7 Turnover 110.68 2894.04 460.51 39.79 36.75 8 Profit before taxation (1.13) (58.64) (0.59) (1.08) 552.01 0.14 275.43 Turnover 1136.29 101 100 99 Larsen & L&T Modular Larsen & no. Sr. Particulars 102 98 Sr. no. 103 crore Part A: "Subsidiaries" (contd.) Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures 395 65.00 97 8 Larsen & L&T Overseas Larsen & Contracting Company LLC General Saudi Arabia Limited Construction Automation L&T Nigeria Toubro Kuwait Electricals & Projects Toubro Qatar Toubro (East Asia) Sdn. Bhd. Fabrication Yard LLC Toubro Electromech LLC LLC 100.00 81 100.00 (0.51) 0.34 (389.88) (0.80) 1.12 Profit after taxation 10 2.04 (0.30) 0.06 Provision for taxation 9 3.81 1.49 (0.24) (0.51) 0.34 (389.88) 0.06 1.49 1.77 11 100.00 100.00 100.00 |||| 18 5 97.45 8 | | | 93.48 Proposed dividend - preference % of share holding 15 14 Proposed dividend - equity 13 12 Interim dividend - Preference Interim dividend equity Company, WLL Financial year ending on 31-Dec-15 275.85 Total assets 33.65 132.44 0.08 1.46 5.54 255.44 255.44 Total liabilities 33.91 126.61 0.03 0.78 4.91 361.55 275.85 5.54 1.46 0.08 (21.23) 0.02 (0.39) (36.97) (16.31) Profit before taxation 8 72.23 0.65 2.31 342.24 479.05 Turnover 7 Investments 33.65 132.44 366.63 (0.80) Liabilities (25.95) 16.88 KWD SAR NGN QAR MYR 31-Dec-15 18.17 31-Mar-16 31-Dec-15 31-Mar-15 31-Dec-15 OMR 171.83 171.83 Exchange rate on the last day of financial year OMR Currency 31-Dec-15 0.34 17.66 217.54 (0.29) 0.32 (0.64) (155.68) (95.93) Reserves 23456 allotment) 43.51 31.78 0.34 0.36 1.27 49.57 5.15 Share capital (including share application money pending 1 (43.77) (6.66) 1.18 8 95 94 93 92 91 90 89 96 Sr. no. | | | |2 71.12 94.96 6 94.96 6 94.96 94.96 94.96 Sr. Particulars no. (Private) International (Oman) LLC Larsen & Toubro Servowatch Systems Limited Hydrocarbon Limited L&T Toubro Larsen & Larsen & Toubro International FZE L&T Realty FZE L&T IDPL Trustee Manager Pte Ltd. Projects Lanka Development Infrastructure Thalest 100.00 100.00 % of share holding 0.98 0.82 0.05 40.55 Provision for taxation 9 0.22 7.74 0.79 1.25 4.06 6.50 75.50 51.00 51.00 50.0002 27.09 0.27 10 Profit after taxation 15 Proposed dividend - preference 14 Proposed dividend - equity 13 Interim dividend - Preference 12 Interim dividend equity 11 0.22 0.52 19.35 1.25 3.08 5.68 0.20 86.47 Limited LLC Limited Financial year ending on 31-Mar-16 0.92 94.43 Total liabilities 2436.57 48.86 0.06 5.98 10.14 461.43 0.04 26.89 Liabilities 313.47 (30.33) 6.85 (0.93) 0.13 1296.94 5.93 8.19 2930.84 87.67 Turnover 7 382.29 Investments 2775.08 42.87 8.19 5.93 1296.94 10.14 0.92 94.43 Total assets 2775.08 42.87 (981.99) Profit before taxation (6.20) (2.71) 0.46 Exchange rate on the last day of 31-Dec-15 OMR GBP 31-Mar-16 31-Mar-16 GBP SAR 49.24 USD SGD LKR Currency 31-Dec-15 31-Mar-16 31-Dec-15 31-Mar-16 AED 18.01 66.25 17.64 Reserves 234569∞ money pending allotment) 25.04 24.34 1.28 0.88 1817.50 16.21 6.16 70.25 Share capital (including share application 1 financial year 171.83 95.45 95.45 (5.28) financial year 9 0.16 L&T Larsen & Kana 118 117 116 115 L&T Infotech 114 * crore no. Sr. Particulars Sr. no. Part A: "Subsidiaries" (contd.) Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures LARSEN & TOUBRO 113 L&T Electrical 396 Marine 120 Developer GMBH LLC Information Private Holdings Austria Infrastructure Technology Services LLC 119 L&T Global T&D SA FZE Toubro Controls & Automation L&T LTH Milcom 121 General 8 70.00 8 11 (15.21) 4.83 (11.25) 2.94 67.18 217.96 Interim dividend equity 9.02 (45.82) Profit after taxation 10 1.49 0.12 0.02 9.44 2.77 0.85 ☐ 12 Interim dividend - Preference 100.00 81 100.00 8 100.00 100.00 75.00 8 75.00 100.00 49.00 % of share holding 15 Proposed dividend - preference 14 Proposed dividend - equity 13 Limited Limited Technology Trading & 1159.59 0.04 124.06 0.40 21.36 240.08 Total assets 0.09 Total liabilities (0.06) (0.09) (0.51) (0.05) (22.13) (1.08) (3.47) Liabilities 0.11 378.12 20.08 Investments 0.42 0.20 1159.74 0.01 0.25 102.00 2.69 20.08 378.12 0.42 0.20 1159.74 0.01 0.25 102.00 2.69 136.24 Provision for taxation 2 Reserves money pending allotment) USD ZAR KWD AED Currency 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 Exchange rate on the last day of financial year Financial year ending on Company Limited Limited Contracting Spain SL Private (Proprietary) W.L.L. 18.03 219.31 4.49 0.37 0.20 0.66 0.01 0.26 0.07 3.37 2.19 1.80 Share capital (including share application 1 75.37 66.25 EURO USD EURO 75.37 66.25 234567 Provision for taxation 9 4.95 Concrete LLC Pty Ltd. Heavy Engineering Australia & Toubro Larsen Industries PT Tamco Indonesia Sdn. Bhd. (Malaysia) Sdn. Bhd. 112 111 110 109 108 Tamco Tamco Electrical Industries Henikwon & Toubro Switchgear Corporation ATCO Saudia LLC LLC 31-Mar-16 AUD MYR MYR SAR SAR 17.64 17.64 18.03 Financial year ending on Exchange rate on the last day of 31-Dec-15 31-Mar-16 31-Dec-15 31-Mar-16 31-Mar-16 31-Dec-15 31-Dec-15 SAR AED Currency 31-Dec-15 & Asphalt Arabia LLC Arabia LLC Larsen 15 14 Proposed dividend - equity 13 Interim dividend - Preference 12 Interim dividend equity Proposed dividend - preference 11 (21.23) 0.02 (0.39) (36.97) (16.47) Profit after taxation 10 (6.66) % of share holding 81 65.00 Larsen Toubro 107 106 105 Larsen & Toubro Saudi Readymix Toubro no. Larsen & Sr. Particulars 104 Sr. no. 49.00 100.00 100.00 49.00 30.00 65.00 IDR OMR 17.64 16.99 6 444.65 59.35 17.89 19.28 898.29 288.20 Investments 440.42 90.87 444.65 59.35 17.89 19.28 898.29 288.20 832.05 7 Turnover 115.85 (11.25) 2.96 76.62 217.96 (45.82) 11.79 0.85 Profit before taxation 8 266.72 52.56 10.89 55.49 787.50 312.89 775.61 1621.27 440.42 (13.72) 832.05 464.63 97.34 0.25 83.92 10.96 169.87 1.76 17.64 money pending allotment) 25.36 Share capital (including share application 1 financial year 171.83 0.01 50.95 16.99 1.80 2 3 4 5 Reserves Liabilities 102.68 4.40 29.16 323.89 723.77 493.89 969.47 106.73 (117.32) (43.58) (70.43) (20.84) 404.53 (162.78) (71.11) (437.33) (17.66) Total assets Total liabilities 90.87 - 91.76 Currency 13 (162.07) Interim dividend - Preference 12 (301.98) (0.06) Interim dividend equity 11 0.03 (51.90) (23.73) Proposed dividend - equity 207.22 58.04 378.04 Profit after taxation 10 0.01 110.37 46.92 31.25 (9.95) Provision for taxation 9 87.40 0.04 (140.27) Proposed dividend preference Limited Infrastructure no. L&T L&T FinCorp Sr. Particulars 48 47 46 45 44 43 14 42 Sr. no. 66.71 66.71 66.71 66.71 66.71 66.71 66.71 66.71 % of share holding 15 41 (51.90) (23.73) 317.59 7581.43 5954.85 Total assets 1.60 521.23 14.55 15242.08 5403.53 0.39 7581.43 5954.85 0.39 Total liabilities 30.78 7.59 13107.21 4771.56 6987.03 767.52 Liabilities 1.42 238.63 (40.79) 1896.45 0.03 5403.53 15242.08 14.55 134.32 89.29 368.09 Profit before taxation 8 0.05 245.19 28.97 2338.45 776.22 0.01 657.85 348.50 Turnover 7 1.34 79.37 5.28 143.07 43.61 638.83 5571.01 Investments 1.60 521.23 Finance L&T Infra Debt Fund Limited L&T Infra L&T infra 2037.34 325.26 Investments 6 36.43 4.53 501.49 0.07 10.73 2617.53 36.43 181.75 4.53 0.07 10.73 2617.53 44.58 15.77 411.15 0.02 2.55 1896.03 (10.25) (17.24) 501.49 8.59 0.07 19.10 95.69 Provision for taxation 9 (3.95) (0.41) (21.70) 0.01 8.56 39.29 353.51 279.06 Profit before taxation 8 4.87 10.87 0.03 11.88 0.96 Exchange rate on the last day of 34.40 81.47 2382.00 773.19 Turnover 7 71.59 427.66 (0.05) 150.53 Currency Financial year ending on Private Private Limited Limited Limited Limited Trustee Advisory Company 31-Mar-16 Private Properties Partners Partners Cement Distribution Vrindavan Investment Investment Mudit L&T Access L&T Services 31-Mar-16 31-Mar-16 Limited 31-Mar-16 Limited 2017.11 746.50 6398.38 21367.89 7417.85 24231.25 7417.85 24231.25 Total assets 5 Total liabilities 4 Liabilities Reserves 23 money pending allotment) 2.10 6.00 18.75 0.10 5.00 570.97 846.25 272.97 Share capital (including share application 1 - - Exchange rate on the last day of financial year 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 3.18 113.47 (0.61) 2102.47 0.04 4.71 6.24 342.98 37.09 3238.03 106.82 723.52 0.04 4.71 6.24 723.52 342.98 1374.76 62.65 581.23 0.07 10.84 208.92 Total assets Total liabilities Liabilities 36.91 1846.29 0.01 (1.43) 106.82 37.09 (0.06) (11.25) Provision for taxation 9 1.91 1153.17 0.03 (102.02) 0.21 (0.02) (5.55) 3238.03 Profit before taxation 5569.52 27.58 288.69 0.74 Turnover 7 36.19 322.36 595.11 4.69 Investments 8 (562.71) (0.01) 4.59 Limited Infotech Services & Toubro Technologies Aviation Insurance Company GDA 32 31 Larsen L&T L&T General Limited L&T Cassidian Limited L&T Power Limited L&T Vision Ventures City Projects Limited no. L&T South Sr. Particulars 30 29 28 27 26 Limited Private Limited Limited (4.65) 77.58 Reserves 23456c money pending allotment) 0.17 16.98 45.60 705.00 0.05 0.05 0.05 56.48 Share capital (including share application 1 financial year - Exchange rate on the last day of Currency 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 Financial year ending on 215.04 0.07 10 Profit after taxation Limited Services Limited Limited Limited Credit Financial Finance Holdings L&T Mutual L&T Limited 40 38 L&T Capital Family L&T Finance Consumer L&T Finance L&T Housing 37 36 35 34 33 no. Sr. Particulars 39 Markets Investment Limited Management Limited Fund Trustee Limited Reserves 23456 money pending allotment) 0.15 251.82 47.75 238.42 204.31 1.00 121.40 3084.86 Share capital (including share application 1 financial year - - - Exchange rate on the last day of Currency 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 Financial year ending on Sr. no. 473.00 crore Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures 13 Proposed dividend - equity 14 Proposed dividend - preference 15 % of share holding 50.10 60.00 60.00 100.00 51.00 Interim dividend - Preference 100.00 100.00 (546.73) Interim dividend equity 11 1.84 938.13 0.09 (102.02) 0.21 (0.02) 5.70 100.00 12 (25.05) - 391 94.96 94.96 100.00 100.00 74.00 12 99.99 8 68.00 51.00 % of share holding 15 Proposed dividend preference 14 (44.15) Proposed dividend - equity 13 12 Interim dividend - Preference 3.63 137.91 282.06 0.01 11 Interim dividend equity Part A: "Subsidiaries" (contd.) 2.65 % of share holding 4.24 250.64 (557.01) 9 Provision for taxation 1.06 0.47 0.06 54.43 1.93 10 Profit after taxation 4.17 0.80 0.69 (0.26) 196.21 (558.94) 11 Interim dividend equity (0.26) 0.75 1.27 5.23 40.75 196.78 11365.80 6161.34 Investments 5.56 3105.40 1.51 0.05 - 0.06 7 Turnover 2.97 Proposed dividend - preference 11.41 3298.35 1013.50 8 Profit before taxation 4652.83 803.27 12 13 L&T L&T Western L&T Vadodara L&T L&T Western L&T L&T Port no. Elevated Corridor Krishnagiri Thopur Toll Andhra Bharuch Transportation India Interstate Kachchigarh Tollways Tollway Infrastructure Tollbridge Road Corridor Limited L&T Panipat Sr. Particulars 64 63 Proposed dividend - equity 14 Proposed dividend - preference 15 % of share holding 100.00 100.00 100.00 100.00 Interim dividend - Preference 100.00 100.00 97.45 Sr. no. 57 58 59 60 61 62 100.00 3117.63 12.97 Total assets 53 54 55 56 no. Company Limited Private Company Development Limited Limited Uttaranchal Hydropower Limited L&T Arunachal Hydropower Limited L&T Nabha L&T Himachal Hydropower Limited Power Infrastructure Limited Development Projects Limited 52 L&T L&T Power L&T Trustee L&T Capital 15 % of share holding 66.71 66.71 66.71 66.71 66.71 66.71 66.71 Financial year ending on 66.71 LARSEN & TOUBRO Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Part A: "Subsidiaries" (contd.) * crore Sr. no. 49 50 51 Sr. Particulars 392 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 0.20 (0.27) 561.69 2665.95 Liabilities 6.57 1.92 31.23 0.54 484.79 0.97 1174.33 Total liabilities 12.97 3117.63 803.27 40.75 196.78 11365.80 6161.34 8406.51 Limited 3.01 6.35 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 Currency Exchange rate on the last day of financial year 1 Share capital (including share application (0.01) 0.05 3112.70 287.25 40.01 196.08 2397.60 2321.06 money pending allotment) 23456 Reserves 0.01 Road Limited Limited Financial year ending on 97.45 97.45 97.45 97.45 98.12 97.45 97.45 97.45 393 Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures crore Part A: "Subsidiaries" (contd.) Sr. no. 65 66 67 68 69 70 % of share holding 15 | | | | Proposed dividend - preference 0.54 14 0.23 10 Profit after taxation (29.06) 10.55 (2.94) 7.85 71 20.27 (17.67) (0.03) 11 Interim dividend equity 12 Interim dividend - Preference 13 Proposed dividend - equity 14 1.95 72 Sr. Particulars L&T 31-Mar-16 31-Mar-16 31-Mar-16 31-Mar-16 Proposed dividend equity 13 Interim dividend - Preference 12 Interim dividend equity 11 31-Mar-16 31-Mar-16 (5.66) (24.30) 0.01 5.91 39.29 240.04 183.37 Profit after taxation 10 1.71 (4.65) (2.34) 31-Mar-16 Financial year ending on no. Ahmedabad L&T Halol -Shamlaji L&T Krishnagiri -Maliya Tollway Walajahpet Tollway Limited 31-Mar-16 Limited Tollway Limited L&T L&T L&T Chennai Devihalli Metro Rail -Tada Tollway Hassan (Hyderabad) Limited Limited L&T BPP L&T Rajkot Tollway -Vadinar Limited Tollway Limited Tollway Limited (5.02) 2.01 Provision for taxation money pending allotment) 2 Reserves (303.99) (102.39) (73.93) (328.72) 115.17 18.83 9.87 (4.60) 3 Liabilities 659.03 573.85 258.21 1028.22 106.54 0.15 4.16 57.16 13.95 41.40 31-Mar-16 31-Mar-16 31-Mar-16 Limited 31-Mar-16 Limited 31-Mar-16 Limited Limited 31-Mar-16 31-Mar-16 408.86 31-Mar-16 Exchange rate on the last day of - financial year 1 Share capital (including share application 84.30 78.75 56.50 43.50 Currency 0.44 4 Total liabilities 72.93 7 Turnover 59.07 128.19 63.25 282.13 25.78 86.42 0.50 8 (29.06) 13.41 (2.94) 9.86 17.93 2.49 (17.44) (0.03) 9 Profit before taxation 2.86 5.30 27.88 439.34 550.21 240.78 743.00 263.11 32.93 475.89 5 Total assets 44.37 439.34 240.78 743.00 263.11 32.93 475.89 6 Investments 14.96 29.05 550.21 2.60 Affix a M.M.CHITALE Technology | Engineering | Projects Construction | Manufacturing LARSEN & TOUBRO Regd. Office: Larsen & Toubro Limited, L&T House, N. M. Marg, Ballard Estate, Mumbai - 400 001, INDIA CIN: L99999MH1946PLC004768 Developing Smarter Technology Partnering Growth e www.Larsentoubro.com L&T partners the nation, industry and people to build a newer, brighter future. As India's largest producer of low-tension switchgear, we develop smarter solutions to meet emerging needs. And transform glorious vision into glittering reality. L&T partners the nation, industry and people to build a newer, brighter future. We offer talented young people the opportunity to grow professionally and augment our engineering and construction offerings to critical sectors, transforming glorious vision into glittering reality. Technology | Engineering | Projects Construction | Manufacturing Regd. Office: Larsen & Toubro Limited, L&T House, N. M. Marg, Ballard Estate, Mumbai - 400 001, INDIA CIN: L99999MH1946PLC004768 NOTES 408 Appoint Mr. D. K. Sen (DIN: 03554707) as a Director liable to retire by rotation. 6 Appoint Mr. A. M. Naik (DIN: 00001514) as a Director liable to retire by rotation. 5 LARSEN & TOUBRO Appoint Mr. S. N. Subrahmanyan (DIN: 02255382) as a Director liable to retire by rotation. www.Larsentoubro.com 405 Quality and Contents of Annual Report 2015-16 Please give your overall rating of our investor service (1 to 5 where 1 = highly dissatisfied and 5 = highly statisfied) Did you find the e-mail id IGRC@Larsentoubro. com for redressal of Investors' Grievances useful? Give details of outstanding grievances, if any Any suggestions? Date: Pursuing Dreams Partnering Growth Please indicate your satisfaction level Satisfied YES/NO Dissatisfied Signature Disclaimer: L&T will keep the information provided by you as confidential and it will not be used in any way that is detrimental to you. 404 NOTES Delighted 4 Appoint Ms. Sunita Sharma (DIN: 02949529) as a Director liable to retire by rotation. 3 Email ID Regd. Office L&T House, Ballard Estate, Mumbai 400 001. Tel. No.: (022) 6752 5656, Fax No.: (022) 6752 5893 Email: Igrc@larsentoubro.com, Website: www.larsentoubro.com L99999MH1946PLC004768 CIN LARSEN & TOUBRO LIMITED Registered Address Name of the member(s) Folio No./Client ID [Pursuant to Section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies (Management and Administration) Rules 2014] LARSEN & TOUBRO 400 NOTES 399 Directors SUNITA SHARMA (DIN 02949529) SUSHOBHAN SARKER (DIN 00088276) PROXY FORM DP ID I/We, being the member(s) of. shares of LARSEN & TOUBRO LIMITED, hereby appoint: Dividend on equity shares for the financial year 2015-16. 2 Adoption of audited financial statements for the year ended March 31, 2016 and the Reports of the Board of Directors and Auditors thereon and the audited consolidated financial statements of the Company and the reports of the auditors thereon for the year ended March 31, 2016. 1 Resolutions Item No. and whose signature(s) are appended below as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the Seventy First Annual General Meeting of the Company, to be held at Birla Matushri Sabhagar, 19, Marine Lines, Mumbai - 400 020 on Friday, August 26, 2016 at 3.00 p.m. and at any adjournment thereof in respect of such resolutions as are indicated below: ** I wish my above Proxy to vote in the manner as indicated in the box below: or failing him or failing him having e-mail id having e-mail id of of 3) 2) having e-mail id of 1) Company's website Presentation of information on R&T Agent personnel Interaction with Company/ (6) (5) 56 **(4) This is only optional. Please put a 'X' in the appropriate column against the resolutions indicated in the Box. If you leave the 'For' or 'Against' column blank against any or all the resolutions, your Proxy will be entitled to vote in the manner as he/she thinks appropriate. Appointing a proxy does not prevent a member from attending the meeting in person if he/she so wishes. A person can act as a proxy on behalf of members not exceeding fifty and holding in the aggregate not more than 10% of the total share capital of the Company carrying voting rights. A member holding more than 10% of the total share capital of the Company carrying voting rights may appoint a single person as proxy and such person shall not act as a proxy for any other person or shareholder. A Proxy need not be a member of the Company. This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company not less than 48 hours before the commencement of the meeting. In the case of jointholders, the signature of any one holder will be sufficient, but names of all the jointholders should be stated. (3) (1) Note: Stamp 1 Rupee Revenue Signature of shareholder : Against For (2) LARSEN & TOUBRO LIMITED Regd. Office L&T House, Ballard Estate, Mumbai 400 001. CIN: L99999MH1946PLC004768 Shareholder's Satisfaction Survey Form - 2016 403 Please indicate your satisfaction level Satisfied Issue of shares - on demerger/bonus - 2004, 2006, 2008 & 2013 Issue of Duplicate Share Certificates Transfer/Transmission/Demat/Remat of Shares ATTRIBUTES Kindly put a tick in relevant columns below. Folio No./DP ID/ Client ID Shareholder Name & Address of the M. No. A3471 Company Secretary N. Hariharan Thank You, We would be grateful, if you could spare your valuable time to fill the questionnaire given below and send it back to us at the Registered Office address mentioned above. Alternatively, a softcopy of the questionnaire can be downloaded from the Investors section on our website www.Larsentoubro.com. The duly filled in questionnaire can be sent by e-mail to IGRC@Larsentoubro.com. It has been our constant endeavor to provide best of the services to our valuable shareholders and maintain highest level of Corporate Governance in this Company. In order to further improve shareholder service standards, we seek your inputs through this survey. Dear Shareholders, Signature of proxy holder(s) (DIN 00101004) 2016 Signed this 13 Payment of commission to the Executive Chairman, Chief Executive Officer and Managing Director, if any, Deputy Managing Director and Whole-time Directors. 12 Appoint Mr. M. V. Satish (DIN: 06393156) as a Whole-time Director of the Company. 11 Appoint Mr. D. K. Sen (DIN: 03554707) as a Whole-time Director of the Company. 10 Appoint Mr. R. Shankar Raman (DIN: 00019798) as a Whole-time Director of the Company. Appoint Mr. S. N. Subrahmanyan (DIN: 02255382) as the Deputy Managing Director & President of the Company. Appoint Ms. Naina Lal Kidwai (DIN: 00017806) as an Independent Director. 8 Appoint Mr. M. V. Satish (DIN: 06393156) as a Director liable to retire by rotation. 7 Issue of duplicate dividend warrants Dividend through ECS/ Warrants/ Demand Drafts Responses to queries/complaints 9 14 Appoint Mr. Shailendra N. Roy (DIN: 02144836) as a Whole-time Director of the Company. 15 Ratification of appointment of M/s. Deloitte Haskins & Sells LLP as Joint Statutory Auditors of the Company. Ratification of remuneration payable to M/s R. Nanabhoy & Co. Cost Accountants (Regn. No. 00010) for the financial year 2016-17. ATTRIBUTES 21 20 Ratification of appointment of M/s. Sharp & Tannan as Joint Statutory Auditors of the Company. 19 Issue listed/unlisted secured/unsecured redeemable non-convertible debentures, in one or more series/tranches/ currencies, aggregating up to 6000 crore. 18 Raise funds through issue of convertible bonds and/or equity shares through depository receipts and including by way of Qualified Institution Placement ('QIP'), to Qualified Institutional Buyers ('QIB') for an amount not exceeding 3600 crore or US $ 600 million, whichever is higher. 17 Appoint Mr. Narayanan Kumar (DIN: 00007848) as an Independent Director. 16 Resolutions Item No. Against For Appoint Mr. Sanjeev Aga (DIN: 00022065) as an Independent Director. day of Dissatisfied Delighted R. SHANKAR RAMAN Chief Financial Officer & Whole-time Director (DIN 00019798) Projects and Systems Kish PJSC 31-Mar-15 31-Mar-16 1 Latest audited Balance Sheet date 31-Dec-15 31-Mar-15 Engineering 31-Mar-16 Shares of Associate/Joint Ventures held by the company at the year end Number 100 Amount of Investment in Associates/Joint 0.18 9,000 4.42 7,35,000 0.56 2 Capital India Limited Industries Limited Limited LARSEN & TOUBRO Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Part B: "Associates/Joint ventures" (contd.) Sr. no. 8 9 10 VIKRAM SINGH MEHTA (DIN 00041197) 12 13 Sr. Name of Associates/Joint ventures Larsen & Toubro Salzer Magtorq Gujarat Leather Grameen Indiran no. Qatar & HBK Contracting LLC Electronics Private Limited 21,26,000 875 11 0.39 Notes: Refer Note 5 4.58 0.30 5.66 0.21 Refer Note 4 Refer Note 3 Refer Note 2 (0.30) (0.54) (0.26) 1. Significant influence is demonstrated by holding 20% or more of the voting power of the investee (Para 4 of AS 23 - Accounting for Investments in Associates) 2. The Incorporated joint venture is not required to be audited as per regulatory laws in Iran. Hence the management certified accounts have been considered for consolidation. 3. The associate company operates under severe long term restrictions that significantly impair its ability to transfer funds to the company and hence the same has not been considered for consolidation. 4. The associate company is under liquidation process and investment is fully provided in the accounts. 5. The Group has sold its stake in the associate companies during FY 2015-16. N.HARIHARAN Company Secretary M. No. A3471 A. M. NAIK Group Executive Chairman (DIN 00001514) 2.13 Not Considered in Consolidation Considered in Consolidation Mumbai, May 25, 2016 6 Profit/Loss for the year (Crore) Total No of shares Extent of Holding % 200 Venture (Crore) 1,02,83,737 50.00% 21,003 42.85% Refer Note 1 Refer Note 4 50.00% 81,77,887 23.87% 50.00% 3 Description of how there is significant 4 influence Reason why the Associate/Joint Venture is not consolidated 5 Networth attributable to Shareholding as per (3.59) latest audited Balance Sheet (Crore) 1,750 For details of recent awards, please visit www.Larsentoubro.com Every year, L&T and its people receive a number of national and international awards that acknowledge its varied accomplishments. Presented by the media, industry associations, independent bodies and academia, they honour the Company's contribution in various spheres of business, technology, financial performance, growth and environmental protection. CBMC/07/2016/PRD AWARDS & RECOGNITION INTRO REC LED PAPE Printed by Burda Druck India Pvt. Ltd. 10% of the total share capital of the Company carrying voting rights. In case a proxy is proposed to be appointed by a member holding more than 10% of the total share capital of the Company carrying voting rights, then such proxy shall not act as a proxy for any other person or shareholder. Proxies, in order to be effective, must be received at the Registered office of the Company at L&T House, Ballard Estate, Mumbai 400 001, not later than forty-eight hours before the commencement of the AGM i.e. by 3.00 p.m. on August 24, 2016. [c] The Register of Members and [g] Members/Proxies should bring their attendance slips duly completed for attending the Meeting. [d] Members are requested to furnish bank details, Email address, change of address etc. to Karvy Computershare Private Limited, Karvy Selenium, Tower B, Plot 31-32, Gachibowli, Financial District, Nanakramguda, Hyderabad 500 032, who are the Company's Registrar and Share Transfer Agents so as to reach them latest by Friday, August 19, 2016, in order to take note of the same. In respect of members holding shares in electronic mode, the details as would be furnished by the Depositories as at the close of the aforesaid date will be considered by the Company. Hence, Members holding shares in demat mode should update their records at the earliest. [e] In order to receive copies of Annual Reports and other communication through e-mail, Members are requested to register their e-mail addresses with the Company by sending an e-mail to Lntgogreen@ Larsentoubro.com. [f] All documents referred to in the accompanying Notice and the Explanatory Statement are open for inspection at the Registered Office of the Company on all working days [except Saturdays] between 11.00 a.m. and 1.00 p.m. up to the date of the Annual General Meeting. LARSEN & TOUBRO Transfer Books of the Company will be closed from Saturday, August 20, 2016 to Friday, August 26, 2016 (both days inclusive). 46 21) To consider and ratify the a person can act as a proxy on behalf of members not exceeding 50 and holding in the aggregate not more than ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY, TO ATTEND AND VOTE INSTEAD OF HIMSELF, AND THAT A PROXY NEED NOT BE A MEMBER. Pursuant to Section 105 of the Companies Act, 2013 and Rule 19 of the Companies (Management & Administration) Rules, 2014, [b] A MEMBER ENTITLED TO [a] The information required to be provided under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Secretarial Standards on General Meetings, regarding the Directors who are proposed to be appointed/ re-appointed and the relative Explanatory Statement pursuant to Section 102 of the Companies Act, 2013, in respect of the business under items 3, 6 to 18 and 21 set out above are annexed hereto. Notes: Mumbai, May 25, 2016 N. HARIHARAN COMPANY SECRETARY M.NO - A3471 By Order of the Board of Directors For LARSEN & TOUBRO LIMITED lodging for the financial year ended March 31, 2017 to M/s R. Nanabhoy & Co. Cost Accountants (Regn. No. 00010), who are appointed as Cost Auditors to conduct the audit of cost records maintained by the Company for the Financial Year 2016-17." "RESOLVED THAT pursuant to Section 148 and other applicable provisions, if any, of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, the Company hereby ratifies the remuneration of 11 lakh plus applicable service tax and out of pocket expenses at actuals for travelling and boarding/ remuneration payable to Cost Auditors and for that purpose to pass with or without modification(s), as an ORDINARY RESOLUTION the following: [h] Pursuant to Section 205A(5) of the Companies Act, 1956, the unpaid dividends that are due for transfer to the Investor Education and Protection Fund are as follows: 46 Dividend Date of For the Due for No. Declaration year ended Transfer on 80 28.08.2009 31.03.2009 04.10.2016 The Company has appointed Mr. S. N. Ananthasubramanian, Practicing Company Secretary, (Membership No. 4206) or failing him Mrs. Aparna Gadgil, Practicing Company Secretary, (Membership No. 8430), to act as the Scrutinizer for conducting the voting and remote e-voting process in a fair and transparent manner. Members are requested to follow the instructions below to cast their vote through e-voting: 82 A. In case a Member receives an e-mail from NSDL (for Members whose e-mail addresses are registered with the Company/ Depository Participants): i. Open the e-mail and also open PDF file namely "L&T remote e-voting.pdf" with your Client ID or Folio No. as password. The said PDF file contains your user ID and password for remote e-voting. Please note that the password is an initial password. ii. Open the internet browser and type the following URL: https:// www.evoting.nsdl. com. However, members who are already registered with NSDL for remote e-voting can use their existing user ID and password for casting their vote. In case they don't remember their password, they can reset their password by using "Forgot User Details/ Password" option available on www.evoting.nsdl.com iii. Click on Shareholder - Login. V. If you are logging in for the first time, please enter the user ID and password provided in the PDF file attached with the e-mail as initial password. Click Login. vi. The Password Change Menu will appear on your screen. Change to a new password of your choice, making sure that it contains a minimum of 8 digits or characters or a combination of both. Please take utmost care to keep your password confidential. vii. Once the remote e-voting home page opens, click on Active Voting Cycles. viii. Select "EVEN" (E-Voting Event Number) of Larsen & Toubro Limited. Now you are ready for e-voting as Cast Vote page opens. iv. If you are already registered with NSDL for e-voting then you can use your existing user ID and password. on the cut-off date i.e Friday, August 19, 2016 may approach the Company for issuance of the User ID and Password for exercising their right to vote by electronic means. The Members, whose names appear in the Register of Members/list of Beneficial Owners as on August 19, 2016, i.e. the date prior to the commencement of book closure date are entitled to vote on the Resolutions set forth in this Notice. Eligible members who have acquired shares after the despatch of the Annual Report and holding shares as The remote e-voting period commences on August 23, 2016 at 9.00 A.M and ends on August 25, 2016 at 5.00 P.M. During this period, members of the Company holding shares either in physical or dematerialised form, as on the cut-off date of Friday, August 19, 2016 may cast their vote by remote e-voting. The remote e-voting module shall be disabled by NSDL for voting thereafter. 26.08.2010 31.03.2010 02.10.2017 26.08.2011 31.03.2011 02.10.2018 83 24.08.2012 31.03.2012 29.09.2019 22.08.2013 31.03.2013 27.09.2020 22.08.2014 31.03.2014 27.09.2021 84 85 86 09.09.2015 31.03.2015 15.10.2022 Members who have not encashed their dividend warrants pertaining to the aforesaid years may approach the Company/ its Registrar, for obtaining payments thereof atleast 20 days before they are due for transfer to the said fund. [i] Investor Grievance Redressal: The Company has designated an exclusive e-mail id viz. Igrc@ Larsentoubro.com to enable Investors to register their complaints, if any. [j] E-voting The businesses as set out in the Notice may be transacted through electronic voting system and the Company will provide a facility for voting by electronic means. In compliance with the provisions of Section 108 of the Act, read with Rule 20 of the Companies (Management and Administration) Rules, 2014, Secretarial Standard 2 on General Meetings and Reg. 44 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company is pleased to offer the facility of voting through electronic means, as an alternate, to all its Members to enable them to cast their votes electronically. The facility of casting the votes by the members using an electronic voting system from a place other than venue of the AGM (remote e-voting) will be provided by National Securities Depository Limited (NSDL). The facility for voting shall be made available at the AGM and the Members attending the Meeting who I have not cast their vote through remote e-voting shall be able to exercise their right at the Meeting. Please note that the voting through electronic means is optional for shareholders. 47 48 A person whose name is recorded in the register of members or in the register of beneficial owners maintained by the depositories as on the cut-off date of Friday, August 19, 2016 shall be entitled to avail the facility of remote e-voting or voting at the AGM. Persons who are not members as on the cut-off date should treat this notice for information purposes only. The Notice will be displayed on the website of the Company www.larsentoubro.com and on the website of NSDL. The members who have cast their vote through remote e-voting prior to the AGM may also attend the AGM but shall not be entitled to cast their vote again. 81 DN Road 13) To consider and, if thought fit, to pass with or without modification(s), as an "RESOLVED THAT pursuant to Sections 196,197, 203 and other applicable provisions, if any, of the Companies Act, 2013 read with Schedule V of the said Act and the rules made thereunder, approval be and is hereby granted to the appointment of Mr. S.N Subrahmanyan (DIN: 02255382) as the Deputy Managing Director and President of the Company with effect from October 1, 2015 upto and including September 30, 2020. 0. -1000 (-2%) -192 -15 -10- -20- -15.4 Total segment wise result * 10665 crore Figures in brackets represent percentage of segment result to total segment result L&T CONSOLIDATED - SEGMENT-WISE CAPITAL EMPLOYED * Earnings before interest, tax, depreciation and amortisation as percentage of net segment revenue L&T STANDALONE - GROSS REVENUE FROM OPERATIONS AND PAT 31060 20000- 15000- 10000- 5000- ☐ 3230 4114 Heavy Engineering 3191 Material Handling 3228 -0.7 Metallurgical & Power 2049 18101 14145 Infrastructure 0- 2801 Electrical & Automation 40 23 Total segment wise order book 232649 crore 60005274 (49%) 5000- 4000- 50- 2014-15 2015-16 41.7 40- 30- 26.6 20.421.6 22.9. 20.7 3000- 2000- 20- 16.1 (11%) (10%) 622 (6%) 499 (5%) 581 (5%) 1000- 10- 0- 15.415.2 12.3 11.6 10.5 1130 (16%) 1028 11.111.7 1698 Fountain 2886 2856 35000- PAT including exceptional and extraordinary items -4900 -4600 crore 39 Route Map to the AGM Venue Marine Lines Railway Station Marine Lines Flyover Maharshi Karve Road Birla Matushri Sabhagar, 19, Marine Lines, Mumbai 400 020. Gol Masjid Walter D'Souza Udyan METRO Big Cinema Kala Niketan Maidan Azad Mahatma Gandhi Road Petrol Pump Metro Cinema Mahapalika Marg 2015-16 Railway Station Bombay Hospital Maharshi Karve Road Marg UAH Khan Queens Road Maharshi Karve Road Churchgate Gross revenue from operations 2014-15 35000- Developmental Financial Services 7740 3142 Services 3377 8138 IT & Technology Hydrocarbon 2270 25000- 30000- 31.03.2016 31.03.2015 2037 L&T CONSOLIDATED - SEGMENT-WISE EBIDTA MARGINS* 27046 Projects 45000- H -5200 5311 5056 57558 Total segment wise capital employed as at 31.03.2015 * 86430 crore and as at 31.03.2016 * 92346 crore 55000- -5500 65000- crore 9423 10785 Others 60415 L&T CONSOLIDATED - SEGMENT-WISE RESULT 2015-16 ☐ Others ☐ Hydrocarbon of Capital and Disclosure Requirements) Regulations, 2009 ('SEBI Regulations'), SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, enabling provisions in the Memorandum and Articles of Association of the Company as also provisions of any other applicable laws, rules and regulations (including any amendments thereto or re-enactments thereof for the time being in force) and subject to such approvals, consents, permissions and sanctions of the Securities and Exchange Board of India (SEBI), Government of India (GOI), Reserve Bank of India (RBI) and all other appropriate and/or concerned authorities, or bodies and subject to such conditions and modifications, as may be prescribed by any of them in granting such approvals, consents, permissions and sanctions which may be agreed to by the Board of Directors of the Company ('Board') (which term shall be deemed to include any Committee which the Board may have constituted or hereafter constitute for the time being exercising the powers conferred on the Board by this resolution), the Board be and is hereby authorized to offer, issue and allot in one or more tranches, to Investors whether Indian or Foreign, including Foreign Institutions, Foreign Institutional Investors, Foreign Portfolio Investors, Foreign Venture Capital Fund Investors, Venture Capital Funds, Non- Resident Indians, Corporate Bodies, Mutual Funds, Banks, Insurance Companies, Pension Funds, Individuals or otherwise, whether shareholders of the Company or not, through an issue of convertible bonds and/or equity shares through depository receipts including by way of Qualified Institutions Placement ('QIP'), to Qualified Institutional Buyers ('QIB') in terms of Chapter VIII of the SEBI Regulations, through one or more placements of Equity Shares (hereinafter collectively referred to as "Securities"), whether by way of private placement or otherwise as the Board may determine, where necessary in consultation with the Lead Managers, Underwriters, Merchant Bankers, Guarantors, Financial and/or Legal Advisors, Rating Agencies/Advisors, Depositories, Custodians, Principal Paying/Transfer/ Conversion agents, Listing agents, Registrars, Trustees, Auditors, Stabilizing agents and all other Agencies/Advisors so that the total amount raised through issue of the Securities shall not exceed INR 3600 Crore (Rupees Three Thousand Six Hundred Crore) or US $600 Mn (US Dollars Six Hundred Million), if higher. RESOLVED FURTHER THAT for the purpose of giving effect to the above, the Board be and is hereby also authorised to determine the form, terms and timing of the issue(s), including the class of investors to whom the Securities are to be allotted, number of Securities to be allotted in each tranche, issue price, face value, premium amount in issue/conversion/ exercise/ redemption, rate of interest, RESOLVED FURTHER THAT in case of QIP issue it shall be completed within 12 months from the date of passing of this resolution. RESOLVED FURTHER THAT in case of QIP issue the relevant date for determination of the floor price of the Equity Shares to be issued shall be - i) in case of allotment of equity shares, the date of Meeting in which the Board decides to open the proposed issue ii) in case of allotment of eligible convertible securities, either the date of the Meeting in which the Board decides to open the issue of such convertible securities or the date on which the holders of such convertible securities become entitled to apply for the Equity Shares, as may be determined by the Board. RESOLVED FURTHER THAT the Equity Shares so issued shall rank pari passu with the existing Equity Shares of the Company in all respects. LARSEN & TOUBRO RESOLVED FURTHER THAT the Equity Shares to be offered and allotted shall be in dematerialized form. RESOLVED FURTHER THAT for the purpose of giving effect to any offer, issue or allotment of Securities, the Board, be and is hereby authorised on behalf of the Company to do all such acts, deeds, matters and things as it may, in absolute discretion, deem necessary or desirable for such purpose, including without limitation, the determination of the terms thereof, for entering into arrangements for managing, underwriting, marketing, listing and trading, to issue placement documents and to sign all deeds, documents and writings and to pay any fees, commissions, remuneration, expenses relating thereto and with power on behalf of the Company to settle all questions, difficulties or doubts that may arise in regard to such offer(s) or issue(s) or allotment(s) as it may, in its absolute discretion, deems fit. RESOLVED FURTHER THAT the Board be and is hereby authorised to appoint Lead Manager(s) in offerings of Securities and to remunerate them by way of commission, brokerage, fees or the like and also to enter into and execute all such arrangements, agreements, memoranda, documents, etc. with Lead Manager(s) and to seek listing of such securities. RESOLVED FURTHER THAT the Company do apply for listing of the new Equity Shares as may be issued with the BSE Limited and/or National Stock Exchange of India Limited or any other Stock Exchange(s). RESOLVED FURTHER THAT the Company do apply to the National Securities Depository Limited and/or Central Depository Services (India) Limited for admission of the Securities. RESOLVED FURTHER THAT the Board be and is hereby authorised to create necessary charge on such of the assets and properties (whether present or future) of the Company in respect of Securities and to approve, accept, finalize and execute facilities, sanctions, undertakings, agreements, promissory notes, credit limits and any of the documents and papers in connection with the issue of Securities. 20) To ratify the appointment of RESOLVED FURTHER THAT the Board of Directors or the Audit Committee thereof, be and are hereby authorized to decide and finalise the terms and conditions of appointment, including remuneration of the Statutory Auditors." Auditors) Rules, 2014 (including any statutory modifications or re-enactment thereof for the time being in force) and pursuant to the resolution passed by the members at the 70th Annual General Meeting (AGM) of the Company held on September 9, 2015 in respect of the appointment of the auditors, M/s. Sharp & Tannan, Chartered Accountants, ICAI Registration No. 109982W (S&T), till the conclusion of the 72nd AGM, the Company hereby ratifies and confirms the appointment of S&T as the Joint Statutory Auditors of the Company, to hold office from the conclusion of the 71st AGM till the conclusion of the 72nd AGM and to be jointly and severally responsible with M/s. Deloitte Haskins & Sells LLP during the said period. 5 45 'RESOLVED THAT pursuant to the provisions of Section 139 and all other applicable provisions of the Companies Act, 2013 read with the Companies (Audit and 44 of M/s. Sharp & Tannan, as Statutory Auditors and fix their remuneration and for that purpose to pass with or without modification(s), as an ORDINARY RESOLUTION the following: RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorised to do all acts and take all such steps as may be necessary, proper or expedient to give effect to this resolution." subject to the provisions of the Articles of Association of the Company, approval of the members be and is hereby accorded to authorize the Board of Directors of the Company to offer or invite subscriptions for listed/unlisted secured/unsecured redeemable non-convertible debentures, in one or more series/tranches/ currencies, aggregating up to 6000 crore (Rupees Six Thousand Crore only), on private placement basis, on such terms and conditions as the Board of Directors of the Company may, from time to time, determine and consider proper and most beneficial to the Company including as to when the said Debentures be issued, the consideration for the issue, utilization of the issue proceeds and all matters connected with or incidental thereto; "RESOLVED THAT pursuant to the provisions of Sections 42, 71 and all other applicable provisions of the Companies Act, 2013 read with the Companies (Prospectus and Allotment of Securities) Rules, 2014, SEBI (Issue and Listing of Debt Securities) Regulations, 2008, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (including any statutory modification(s) or re-enactment thereof, for the time being in force), and fit, to pass with or without modification(s), as a SPECIAL RESOLUTION the following: 18) To consider and, if thought RESOLVED FURTHER THAT the Board be and is hereby authorised to delegate all or any of the powers in such manner as they may deem fit." 19) To ratify the appointment 43 'RESOLVED THAT in supersession of the resolution no. 13 passed by the Members at the 70th Annual General Meeting of the Company held on September 9, 2015 in this regard and in accordance with the provisions of Sections 41, 42, 62 and other applicable provisions, if any of the Companies Act, 2013 (including any statutory modifications or re-enactments thereof for the time being in force) as amended from time to time, Foreign Exchange Management Act, 1999, Securities and Exchange Board of India (Issue 17) To consider and, if thought fit, to pass with or without modification(s), as a SPECIAL RESOLUTION the following: 42 RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorized to approve and fix/ revise suitably the commission payable to the Executive Chairman, Chief Executive Officer & Managing Director, if any, Deputy Managing Director and the Whole-time Directors "RESOLVED THAT pursuant to the provisions of Sections 197, 198 and all other applicable provisions, if any, of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification and re-enactment thereof, for the time being in force) and in supersession of the resolution no. 11 passed by the Members at the 68th Annual General Meeting of the Company held on August 22, 2013, consent of the Company be and is hereby accorded to pay commission with effect from April 1, 2016 to the Executive Chairman, Chief Executive Officer & Managing Director, if any, Deputy Managing Director and the Whole-time Directors of the Company which together with other remuneration will be within the overall limit of 10% of the net profits of the Company. ORDINARY RESOLUTION the following: 12) To consider and, if thought fit, to pass with or without modification(s), as an within the limits approved by the members as per the details given in the explanatory statement." LARSEN & TOUBRO "RESOLVED THAT pursuant to Sections 196,197, 203 and other applicable provisions, if any, of the Companies Act, 2013 read with Schedule V of the said Act and the rules made thereunder, approval be and is hereby granted to the appointment of Mr. M.V Satish (DIN: 06393156) as the Whole-time Director of the Company with effect from January 29, 2016 upto and including January 28, 2021. RESOLVED FURTHER THAT Mr. M.V Satish in his capacity as Whole-time Director, be paid remuneration as may be fixed by the Board, from time to time, as prescribed under the Companies Act, 2013 and RESOLVED FURTHER THAT Mr. D.K Sen in his capacity as Whole-time Director, be paid remuneration as may be fixed by the Board, from time to time, as prescribed under the Companies Act, 2013 and within the limits approved by the members as per the details given in the explanatory statement." any, of the Companies Act, 2013 read with Schedule V of the said Act and the rules made thereunder, approval be and is hereby granted to the appointment of Mr. D.K Sen (DIN: 03554707) as the Whole- time Director of the Company with effect from October 1, 2015 upto and including September 30, 2020. "RESOLVED THAT pursuant to Sections 196,197, 203 and other applicable provisions, if ORDINARY RESOLUTION the following: 10) To consider and, if thought fit, to pass with or without modification(s), as an RESOLVED FURTHER THAT Mr. S.N Subrahmanyan in his capacity as the Deputy Managing Director and President, be paid remuneration as may be fixed by the Board, from time to time, as prescribed under the Companies Act, 2013 and within the limits approved by the members as per the details given in the explanatory statement." 11) To consider and, if thought fit, to pass with or without modification(s), as an ORDINARY RESOLUTION the following: M/s. Deloitte Haskins & Sells LLP, as Statutory Auditors and fix their remuneration and for that purpose to pass with or without modification(s), as an ORDINARY RESOLUTION the following: of the Company within the aforesaid limits fixed by the shareholders." ORDINARY RESOLUTION the following: RESOLVED FURTHER THAT Mr. Narayanan Kumar be and is hereby appointed as an Independent Director of the Company to hold office upto May 26, 2021 with effect from May 27, 2016." RESOLVED THAT Mr. Narayanan Kumar (DIN: 00007848) who was appointed as an Additional Director and holds office up to the date of this Annual General Meeting of the Company, is eligible for appointment, and in respect of whom the Company has received a notice in writing from the Director under the provisions of Section 160 of the Companies Act, 2013 proposing his candidature for the office of a Director, be and is hereby appointed as a Director. ORDINARY RESOLUTION the following: 16) To consider and, if thought fit, to pass with or without modification(s), as an RESOLVED FURTHER THAT Mr. Sanjeev Aga be and is hereby appointed as an Independent Director of the Company to hold office upto May 24, 2021 with effect from May 25, 2016." "RESOLVED THAT Mr. Sanjeev Aga (DIN: 00022065) who was appointed as an Additional Director and holds office up to the date of this Annual General Meeting of the Company, is eligible for appointment, and in respect of whom the Company has received a notice in writing from the Director under the provisions of Section 160 of the Companies Act, 2013 proposing his candidature for the office of a Director, be and is hereby appointed as a Director. Flora 15) To consider and, if thought fit, to pass with or without modification(s), as an ORDINARY RESOLUTION the following: as the Whole-time Director of the Company with effect from March 9, 2017 upto and including July 7, 2020. Shailendra Roy (DIN: 02144836) "RESOLVED THAT pursuant to Sections 196,197, 203 and other applicable provisions, if any, of the Companies Act, 2013 read with Schedule V of the said Act and the rules made thereunder, approval be and is hereby granted to the re-appointment of Mr. 14) To consider and, if thought fit, to pass with or without modification(s), as an ORDINARY RESOLUTION the following: RESOLVED FURTHER THAT Mr. R. Shankar Raman in his capacity as Whole-time Director, be paid remuneration as may be fixed by the Board, from time to time, as prescribed under the Companies Act, 2013 and within the limits approved by the members as per the details given in the explanatory statement." "RESOLVED THAT pursuant to Sections 196,197, 203 and other applicable provisions, if any, of the Companies Act, 2013 read with Schedule V of the said Act and the rules made thereunder, approval be and is hereby granted to the re-appointment of Mr. R. Shankar Raman (DIN: 00019798) as the Whole-time Director of the Company with effect from October 1, 2016 upto and including September 30, 2021. RESOLVED FURTHER THAT Mr. Shailendra Roy in his capacity as Whole-time Director, be paid remuneration as may be fixed by the Board, from time to time, as prescribed under the Companies Act, 2013 and within the limits approved by the members as per the details given in the explanatory statement." ORDINARY RESOLUTION the following: "RESOLVED THAT pursuant to the provisions of Section 139 and all other applicable provisions of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 (including any statutory modifications RESOLVED FURTHER THAT the Board of Directors or the Audit Committee thereof, be and are hereby authorized to decide and finalise the terms and conditions of appointment, including remuneration of the Statutory Auditors. Total segment wise order book 249949 crore LARSEN & TOUBRO crore 15622 6772 3055 6% 3% 1% Infrastructure L&T CONSOLIDATED - SEGMENT-WISE ORDER BOOK 2015-16 L&T CONSOLIDATED - SEGMENT-WISE ORDER BOOK 2014-15 crore Infrastructure Power 13684 7200 3096 6% 3% 1% Power 7507. 3% 10368 4% -187373 75% ☐ Electrical & Automation ☐ Heavy Engineering Material Handling ☐ Hydrocarbon ☐ Others ☐ Electrical & Automation 23472- 10% crore Heavy Engineering 5% 10690 ☐ Metallurgical & -166120 71% 8387. 4% ☐ Metallurgical & Material Handling 19252- 8% crore - Mahapalika Marg the Companies Act, 2013 proposing her candidature for the office of Director, be and is hereby appointed as a Director." 4) To appoint a Director in place of Mr. S.N. Subrahmanyan (DIN: 02255382), who retires by rotation and is eligible for re-appointment; 5) To appoint a Director in place of Mr. A.M Naik (DIN: 00001514), who retires by rotation and is eligible for re-appointment; 6) To consider and, if thought fit, to pass with or without modification(s), as an ORDINARY RESOLUTION the following: "RESOLVED THAT Mr. D.K Sen (DIN: 03554707) who was appointed as an Additional Director and holds office upto the date of this Annual General Meeting of the Company, is eligible for appointment and in respect of whom the Company has received a Notice in writing from a member under the provisions of Section 160 of the Companies Act, 2013 proposing his candidature for the office of Director, be and is hereby appointed as a Director." "RESOLVED THAT Ms. Sunita Sharma (DIN: 02949529) who was appointed as a Director in casual vacancy and holds office upto the date of this Annual General Meeting of the Company, is eligible for appointment and in respect of whom the Company has received a notice in writing from a member under the provisions of Section 160 of 7) To consider and, if thought fit, to pass with or without modification(s), as an "RESOLVED THAT Mr. M.V Satish (DIN: 06393156) who was appointed as an Additional Director and holds office upto the date of this Annual General Meeting of the Company, is eligible for appointment and in respect of whom the Company has received a Notice in writing from a member under the provisions of Section 160 of the Companies Act, 2013 proposing his candidature for the office of Director, be and is hereby appointed as a Director." 8) To consider and, if thought fit, to pass with or without modification(s), as an ORDINARY RESOLUTION the following: 'RESOLVED THAT Ms. Naina Lal Kidwai (DIN: 00017806) who was appointed as an Additional Director and holds office up to the date of this Annual General Meeting of the Company, is eligible for appointment, and in respect of whom the Company has received a notice in writing from the Director under the provisions of Section 160 of the Companies Act, 2013 proposing her candidature for the office of Director, be and is hereby appointed as a Director. 41 RESOLVED FURTHER THAT Ms. Naina Lal Kidwai be and is hereby appointed as an Independent Director of the Company to hold office upto February 28, 2021 with effect from March 1, 2016." 9) To consider and, if thought fit, to pass with or without modification(s), as an ORDINARY RESOLUTION the following: or re-enactment thereof for the time being in force) and pursuant to the resolution passed by the Members of the Company at the 70th Annual General Meeting (AGM) held on September 9, 2015 in respect of the appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants, ICAI Registration No. 117366W/W-100018 (DHS) till the conclusion of the 75th AGM, the Company hereby ratifies the appointment of DHS as the Joint Statutory Auditors of the Company, to hold office from the conclusion of the 71st AGM till the conclusion of the 72nd AGM and to be jointly and severally responsible with M/s. Sharp & Tannan during the said period. 3) To consider and, if thought fit, to pass with or without modification(s), as an ORDINARY RESOLUTION the following: audited financial statements of the Company for the year ended March 31, 2016 and the Reports of the Board of Directors and Auditors thereon and the audited consolidated financial statements of the Company and the Reports of the Auditors thereon for the year ended March 31, 2016; II DN Road Municipal Corporation Building O Chatrapati Shivaji Terminus (CST) 2) To declare a dividend on equity shares; LARSEN & TOUBRO LIMITED • Email: Igrc@larsentoubro.com Website: www.larsentoubro.com Tel.: 022-67525656 • Fax: 022-67525893 LARSEN & TOUBRO Notice NOTICE IS HEREBY GIVEN THAT the Seventy First Annual General Meeting of LARSEN & TOUBRO LIMITED will be held at Birla Matushri Sabhagar, 19, Marine Lines, Mumbai - 400 020 on Friday, August 26, 2016 at 3.00 P.M. to transact the following business :- 1) To consider and adopt the Regd. Office L&T House, Ballard Estate, Mumbai 400 001. CIN L99999MH1946PLC004768 14.8 13.9 redemption period, listings on one or more stock exchanges in India or abroad as the Board may in its absolute discretion deems fit and to make and accept any modifications in the proposals as may be required by the authorities involved in such issue(s) in India and/or abroad, to do all acts, deeds, matters and things and to settle any questions or difficulties that may arise in regard to the issue(s). Except Mr. M.V Satish, being the appointee, none of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 7 & 11. Accordingly, the Resolution at Item No. 9 is proposed for approval of the members for appointment of Mr. S. N. Subrahmanyan, as the Deputy Managing Director and President as contemplated by Part Ill of Schedule V of the Companies Act, 2013 and other applicable provisions, if any. The agreement entered into by the Company with Mr. S. N. Subrahmanyan, in respect of his appointment as Deputy Managing Director & President, contains terms and conditions of his appointment including remuneration. Disclosures as required under Secretarial Standard 2 on General Meetings are provided as an Annexure to this Notice. Others Company's contribution to retirement funds, official use of car/ driver and communication facilities for Company's business, as per rules of the Company. periodically, by the Nomination & Remuneration Committee/Board. Perquisites: 18 lakh per annum excluding free furnished accommodation or house rent in lieu thereof. The above perquisites will exclude value of Stock Option benefits, if any, computed as per Income Tax Act/Rules, tax on which will be borne by the Company. Commission Upto 0.25% per annum of the operating net profits after tax of the Company from October 1, 2015. The commission for 2015-16 will be on a pro-rata basis. Such commission will be excluding extraordinary/exceptional profits or losses arising from sale of business/assets, sale of shares in Subsidiary & Associate Companies/ Special Purpose Vehicles/Joint Ventures and also from sale of strategic investments/ adjustment in valuation of strategic investments. The actual commission will be decided, based on parameters set 12,50,000 (Rupees Twelve Lakh Fifty Thousand only) per month in the scale of 10,00,000 -1,25,000 - ₹16,25,000 with the annual increment due on April 1 every year. The Agreement entered into with Mr. S. N. Subrahmanyan will be open for inspection by members at the Registered Office of the Company on all working days [except Saturdays] between 11.00 a.m. and 1.00 p.m. up to the date of the Annual General Meeting. The Board recommends approval of the appointment and remuneration of Mr. S. N. Subrahmanyan, as Deputy Managing Director and President of the Company. At the Annual General Meeting of the Company held on August 26, 2011 and August 22, 2013 the shareholders had fixed the maximum limits within which the Board was delegated authority to decide the remuneration of the Deputy Managing Director of the Company. Pursuant to this, the Board has fixed the remuneration payable to Mr. S. N. Subrahmanyan during his tenure as Deputy Managing Director and President. The Company has entered into an Agreement with Mr. S.N. Subrahmanyan appointing him as the Deputy Managing Director & President for the period from October 1, 2015 to September 30, 2020. During the period of this agreement and so long as the Deputy Managing Director and President performs his services as per the terms and conditions provided by this agreement, he shall be entitled to the following: Salary 52 62 Meeting. Part III, of Schedule V of the Companies Act, 2013 read with Secretarial Standards 2 on General Meetings provide that the appointment and remuneration of Managing Directors and Whole-time Directors in accordance with Part I and Part II of the Schedule V shall be subject to approval by resolution of the shareholders in a General Mr. Subrahmanyan's notable achievements include playing a pivotal role in securing and managing EPC contracts for construction of four major international airports in India at Bengaluru, Hyderabad, Delhi and Mumbai. The Buildings & Factories business has grown rapidly under Mr. Subrahmanyan's leadership, and has executed many prestigious jobs such as construction of ICICI Bank, National Stock Exchange Buildings and Tidel Park. He is also responsible for the activities of other businesses like Power Transmission and Distribution, Water, Smart World and Communication, Metallurgical and Material Handling and Shipbuilding. Additionally he is responsible for overseeing the IT and Technology Services business of L&T and common staff functions across the Construction business. Mr. S. N. Subrahmanyan, 55, is a civil engineer with post graduate qualifications in business management. He joined L&T in 1984 starting off as project planning engineer, and was soon handpicked for senior responsibilities. LARSEN & TOUBRO Except Mr. Subrahmanyan, being the appointee, none of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 9. Item No. 12: At the Annual General Meeting of the Company held on August 26, 2011 the shareholders had approved the overall limit for payment of remuneration to Chairman & Managing Director, Chief Executive Officer & Managing Director, if any, Deputy Managing Director, if any, and Whole-time Directors of the Company within the limits and subject to the terms and conditions set out in the resolution passed at that Meeting read with the explanatory statement. September 30, 2021, subject to the approval of the members in the Annual General Meeting. 1, 2016 upto and including On the recommendation of the Nomination & Remuneration Committee and the Board of Directors of the Company, it is proposed to re-appoint Mr. R. Shankar Raman (DIN: 00019798), as a Whole-time Director of the Company with effect from October Item No. 13: Mr. A.M. Naik, Group Executive Chairman of the Company, Mr. S. N. Subrahmanyan, Deputy Managing Director & President, Mr. R. Shankar Raman, Mr. Shailendra Roy, Mr. D.K Sen and Mr. M.V Satish who are the Whole-time Directors of the Company, may be deemed to be concerned or interested in the resolution at Item No. 12 insofar as it relates to commission payable to them. The Board recommends passing of the Ordinary Resolution set out at Item No. 12 of the Notice convening the Meeting. In the event of loss or inadequacy of profits in any financial year, the remuneration payable to the Executive Chairman, Chief Executive Officer & Managing Director, if any, Deputy Managing Director and Whole-time Directors shall not exceed the maximum limits prescribed under Schedule V of the Companies Act, 2013. Executive Chairman, Chief Executive Officer & Managing Director, if any, Deputy Managing Director and Whole-time Directors from time to time, the Board of Directors recommend passing a Resolution to authorize the Board to approve and fix/revise suitably the commission payable to the Executive Chairman, Chief Executive Officer & Managing Director, if any, Deputy Managing Director and Whole-time Directors from time to time. In order to fix/revise appropriately the remuneration payable to the Specific approval of the members will be sought for appointment/ re-appointment and other remuneration of the Executive Chairman/Chief Executive Officer & Managing Director/Deputy Managing Director/Whole-time Directors individually in General Meetings. The Board of Directors of the Company appoints/re-appoints the Executive Chairman, Chief Executive Officer & Managing Director, if any, Deputy Managing Director and Whole-time Directors on the Board after receiving recommendation from the Nomination & Remuneration Committee, subject to the approval of the members in General Meeting. The commission payable will, however, continue to be subject to the condition that the total managerial remuneration shall not exceed 5% of the net profits of the Company for each of the Managing/Whole-time Directors of the Company and 10% of the net profits of the Company for all the Managing/Whole-time Directors of the Company. Director, if any, Deputy Managing Director and Whole-time Directors based on overall performance of the Company, the concerned business and the performance of the individual director. Considering the above, it is proposed to give flexibility and authority to the Board to fix/ revise the amount of commission payable to Executive Chairman, Chief Executive Officer & Managing Director, if any, Deputy Managing Director and Whole-time Directors of the Company. 53 The Nomination & Remuneration Committee revises the commission payable to the Executive Chairman, Chief Executive Officer & Managing The Company has planned for a consistent profitable growth based on an identified strategy and strategic initiatives, including detailed assessment of portfolios, entity and capital structure. Significant opportunities across all business segments have been identified. During the strategic plan for the period 2016-2021 (Lakshya 2021) there will be transition of leadership. The Company needs to attract and retain competent leaders for sustained growth. At the Annual General Meeting of the Company held on August 22, 2013 the Shareholders had approved revision in payment of commission payable to the Executive Chairman, Chief Executive Officer and Managing Director, if any, Deputy Managing Director, if any, and Whole-time Directors. October 1, 2015 upto and including September 30, 2020, subject to the approval of the members in the Annual General Meeting. On the recommendation of the Nomination & Remuneration Committee, the Board of Directors of the Company at its Meeting held on September 21, 2015, appointed Mr. S. N. Subrahmanyan, as Deputy Managing Director & President of the Company with effect from Shareholders had approved the appointment of Mr. S.N Subrahmanyan (DIN: 02255382) as Whole-time Director of the Company for a period of five years, with effect from July 1, 2011 upto and including June 30, 2016. Item No. 9: The Company has entered into an Agreement with Mr. M.V Satish appointing him as a Whole-time Director for the period from January 29, 2016 to January 28, 2021. During the period of this agreement and so long as the Whole-time Director performs his services as per the terms and conditions provided by this agreement, he shall be entitled to the following: At the Annual General Meeting of the Company held on August 26, 2011 and August 22, 2013 the shareholders had fixed the maximum limits within which the Board was delegated authority to decide the remuneration of the Whole-time Director of the Company. Pursuant to this, the Board has fixed the remuneration payable to Mr. M.V Satish during his tenure as Whole-time Director. Oman having served as first Chief Executive of L&T Oman LLC. He is credited for having successfully executed the Salalah greenfield airport project and the NMC Hospital in Abu Dhabi. Mr. M.V Satish has played a vital role in establishing L&T's credentials in the GCC region, especially He holds a degree in Civil engineering from Bangalore University and has completed a Senior Executive programme from London Business School. Mr. M.V Satish is Senior Executive Vice President - Buildings, Minerals and Metals. Mr. M.V Satish started his career in L&T as Junior Engineer. The Board of Directors, on the recommendation of Nomination & Remuneration Committee, appointed Mr. M.V Satish as a Whole-time Director of the Company with effect from January 29, 2016 upto and including January 28, 2021, subject to the approval of the members in the Annual General Meeting. On the recommendation of the Nomination & Remuneration Committee, the Board of Directors appointed Mr. M.V Satish (DIN: 06393156) as an Additional Director with effect from January 29, 2016. In terms of Section 161(1) of the Companies Act, 2013, Mr. M.V Satish holds office as Additional Director upto the date of this Annual General Meeting. The Company has received a notice in writing from a member alongwith deposit of requisite amount under Section 160 of the Companies Act, 2013, proposing his candidature for the office of Director of the Company. Item No. 7 & 11: The Directors recommend the Resolutions for approval of the shareholders. are concerned or interested, in the resolution set out at Item No. 6 & 10. LARSEN & TOUBRO 50 Except Mr. Sen, being the appointee, none of the Directors and Key Managerial Personnel of the Company and their relatives The Agreement entered into with Mr. D.K Sen will be open for inspection by members at the Registered Office of the Company on all working days [except Saturdays] between 11.00 a.m. and 1.00 p.m. up to the date of the Annual General Meeting. The agreement entered into by the Company with Mr. D.K Sen, in respect of his appointment as Whole-time Director, contains the terms and conditions of his appointment including remuneration. Disclosures as required under Secretarial Standard 2 on General Meetings are provided as an Annexure to this Notice. Salary: Mr. R. Shankar Raman is a Commerce graduate from the University of Madras, Chennai. He qualified as a Chartered Accountant in May 1983 and became a Graduate of the Institute of Cost & Works Accountants of India in 1986. Over the past 33 years of professional work experience, Mr. R. Shankar Raman has worked for leading listed corporations in varied capacities in the field of Finance. 7,25,000 (Rupees Seven Lakh Twenty Five Thousand only) per month in the scale of 6,50,000 - Commission Upto 0.1% per annum of the operating net profits Except Ms. Kidwai, being the appointee, none of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 8. The Board considers that her association would be of immense benefit to the Company and it is desirable to avail services of Ms. Kidwai as an Independent Director. Accordingly, the Board recommends the resolution in relation to appointment of Ms. Kidwai as an Independent Director, for the approval by the shareholders of the Company. and LODR Regulations for her appointment as an Independent Director of the Company and is independent of the management. The copy of the letter of appointment of Ms. Kidwai as an Independent Director setting out the terms and conditions would be available for inspection without any fee by the members at the Registered Office of the Company on all working days [except Saturdays] between 11.00 a.m. and 1.00 p.m. up to the date of the Annual General Meeting. In the opinion of the Board, Ms. Kidwai fulfils the conditions specified in the Companies Act, 2013 and rules made thereunder On the recommendation of the Nomination & Remuneration Committee, Ms. Naina Lal Kidwai (DIN: 00017806) was appointed as an Additional Director of the Company with effect from March 1, 2016. In terms of Section 161(1) of the Companies Act, 2013, Ms. Kidwai holds office as Additional Director upto the date of this Annual General Meeting. The Company has received a notice in writing from the Director alongwith deposit of requisite amount under Section 160 of the Companies Act, 2013, proposing her candidature for the office of Director of the Company. In terms of Section 149 and any other applicable provisions of the Companies Act, 2013, Ms. Kidwai is proposed to be appointed as an Independent Director up to February 28, 2021, for a period of 5 years from the date of her appointment. Pursuant to the provisions of the Companies Act, 2013 and Reg. 25(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations), she is eligible for re-appointment after February 28, 2021. Item No. 8: The Directors recommend the Resolutions for approval of the shareholders. 1.00 p.m. up to the date of the Annual General Meeting. 51 The Agreement entered into with Mr. M.V Satish will be open for inspection by members at the Registered Office of the Company on all working days [except Saturdays] between 11.00 a.m. and The agreement entered into by the Company with Mr. M.V Satish, in respect of his appointment as Whole-time Director, contains the terms and conditions of his appointment including remuneration. Disclosures as required under Secretarial Standard 2 on General Meetings are provided as an Annexure to this Notice. Others Company's contribution to retirement funds, official use of car/ driver and communication facilities for Company's business, as per rules of the Company. The above perquisites will exclude value of Stock Option benefits, if any, computed as per Income Tax Act/Rules, tax on which will be borne by the Company. Perquisites 12 lakh per annum excluding free furnished accommodation. The actual commission will be decided based on parameters set periodically by the Nomination & Remuneration Committee/Board. after tax of the Company from the year 2015-16. The Commission for 2015-16 will be on a pro-rata basis. Such Commission will be excluding extraordinary/exceptional profits or losses arising from sale of business/ assets, sale of shares in Subsidiary & Associate Companies/Special Purpose Vehicles/Joint Ventures and also from sale of strategic investments/adjustment in valuation of strategic investments. 75,000-10,25,000 - 1,00,000 -15,25,000 with the annual increment due on April 1 every year. Others Company's contribution to retirement funds, official use of car/ driver and communication facilities for Company's business, as per rules of the Company. Mr. R. Shankar Raman joined L&T Group in 1994 for setting up L&T Finance Limited, a subsidiary of Larsen & Toubro Limited (L&T). After six successful years with L&T Finance Limited, he was inducted into mainstream L&T to oversee the Finance & Accounting functions. Mr. R. Shankar Raman is on the Board of several companies within the L&T Group. He is a member of National CFO Council of Confederation of Indian Industries. He had participated and presented papers in several conventions/ seminars both in India and abroad. At the Annual General Meetings of the Company held on August 26, 2011 and August 22, 2013, the shareholders have fixed the maximum limits within which the However, the same would be in accordance with the provisions of the SEBI Regulations, the Companies Act, 2013, or any other guidelines/regulations/ consents as may be applicable or required. In case of issue of convertible bonds and/or equity shares through As the pricing of the offer cannot be decided except at a later stage, it is not possible to state the price of shares to be issued. As per Chapter VIII of the SEBI Regulations, an issue of securities on QIP basis shall be made at a price not less than the average of the weekly high and low of the closing prices of the related shares quoted on the stock exchange during the two weeks preceding the "relevant date." The Board may, at its absolute discretion, issue equity shares at a discount of not more than five percent or such other discount as may be permitted under applicable regulations to the 'floor price' as determined in terms of the SEBI Regulations, subject to Section 53 of the Companies Act, 2013. India (Issue of Capital and Disclosure Requirements) Regulations, 2009 ('SEBI Regulations'). These securities will be allotted only to Qualified Institutional Buyers (QIBS) as per the SEBI Regulations and there will be no issue to retail individual investors and existing retail shareholders. The resolution proposed is an enabling resolution and the exact price, proportion and timing of the issue of the securities will be decided by the Board based on an analysis of the specific requirements after necessary consultations. Therefore the proposal seeks to confer upon the Board the absolute discretion to determine the terms of issue in consultation with the Lead Managers to the Issue. Accordingly, the Company may issue securities by way of a QIP in terms of Chapter VIII of the Securities and Exchange Board of The Company may also opt for issue of securities through Qualified Institutions Placement (QIP). A QIP of the shares of the Company would be less time consuming and more economical than other modes of raising capital. The fund raising may be through a mix of equity/equity-linked instruments, as may be appropriate. Members' approval is sought for the issue of equity shares, securities linked to or convertible into Equity Shares or depository receipts of the Company. The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 also provide that the Company shall, in the first instance, offer all Securities for subscription pro-rata to the Shareholders unless the Shareholders in a General Meeting decide otherwise. Members' approval is sought for issuing any such instrument as the Company may deem appropriate to parties other than the existing shareholders. Whilst no specific instrument has been identified at this stage, in the event the Company issues any equity linked instrument, the issue will be structured in a manner such that the additional share capital that may be issued would not be more than 5% of the paid-up capital of the Company (as at the date when the Board recommended passing of the Special Resolution). The equity shares, if any, allotted on issue, conversion of Securities shall rank in all respects pari passu with the existing Equity Shares of the Company. 57 defined in the resolution, in Indian or international markets. Item No. 17: Except Mr. Kumar, being the appointee, none of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 16. The Board considers that his association would be of immense benefit to the Company and it is desirable to avail services of Mr. Kumar as an Independent Director. Accordingly, the Board recommends the resolution in relation to appointment of Mr. Kumar as an Independent Director, for the approval by the shareholders of the Company. appointment of Mr. Kumar as an Independent Director setting out the terms and conditions would be available for inspection without any fee by the members at the Registered Office of the Company on all working days [except Saturdays] between 11.00 a.m. and 1.00 p.m. up to the date of the Annual General Meeting. and LODR Regulations for his appointment as an Independent Director of the Company and is independent of the management. The copy of the letter of LARSEN & TOUBRO 56 The Company requires adequate capital to meet the needs of growing business. While it is expected that the internal generation of funds would partially finance the need for capital and debt raising would be another source of funds, it is prudent for the Company to have approvals to raise a part of the funding requirements for the said purposes as well as for such other corporate purposes as may be permitted under applicable laws through the issue of appropriate securities as depository receipts the price will be determined on the basis of the current market price and other relevant guidelines. The "relevant date" for the above purpose, shall be - 58 In accordance with the provisions of Section 148 of the Companies Act, 2013 ('the Act') and the Companies (Audit and Auditors) Rules, 2014 and the Companies (Cost Records and Audit) Amendment Rules, 2014 ('the Rules') the Company is required to appoint a cost auditor to audit the cost records of the Company, for products and services, specified under Rules issued in pursuance to the above section. On the recommendation of the Audit Committee, the Board of Directors had approved the appointment of M/s. R. Nanabhoy & Co, Cost Accountants, [Regn. No. 00010] as the Cost Auditors of the Company to conduct audit of cost records maintained by the Company for the Financial Year 2016-17, at a remuneration of ₹ 11 lakhs plus applicable service tax and out of pocket expenses at actuals for travelling and boarding/lodging. M/s. R. Nanabhoy & Co., Cost Accountants, have furnished certificates regarding their eligibility for appointment as Cost Auditors of the Company. In accordance Item No. 21: None of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 18. The Directors recommend this Resolution for approval of the Shareholders. resolution and authorizes the Board of Directors of the Company to offer or invite subscription for non-convertible debentures, as may be required by the Company, from time to time for a year from the date of passing this resolution. The shareholders through a resolution passed at their Meeting held on September 9, 2015, approved issue of debentures upto an amount not exceeding 6000 crore in aggregate. However, such resolution is valid only for a period of 12 months from the date on which the approval is granted by the shareholders. Accordingly, the Shareholders' approval is sought for the period of next 12 months from the date of passing this resolution. This resolution is an enabling In order to meet the financial needs of business in a prudent manner the Company may offer or invite subscription for secured/unsecured/ redeemable/non-convertible debentures, in one or more series/ tranches/currencies on private placement, issuable / redeemable at par or otherwise. Section 42 of the Companies Act, 2013 read with Rule 14 of the Companies (Prospectus and Allotment of Securities) Rules, 2014 deals with private placement of securities by a company. Sub-rule (2) of the said Rule 14 states that in case of an offer or invitation for subscription to non-convertible debentures on private placement basis, the Company shall obtain prior approval of its shareholders by means of a special resolution only once in a year for all the offers or invitations for such debentures during the year. industrial goods, heavy engineering, infrastructure projects and other activities which require a sizeable investment and continuous expenditure. The Company intends to explore different avenues for garnering this financing requirement including by way of issuance of debt instruments. The Company is into the business interalia of manufacturing of None of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 17. Item No. 18: The Stock Exchange for the same purpose is the BSE Limited / National Stock Exchange of India Limited. The Shareholders through a resolution passed at their Meeting held on September 9, 2015, had approved issue of Securities for an aggregate sum up to US$600 Million or INR 3600 Crore, if higher. However, Shareholders' resolution for QIP issuance is valid for a period of 12 months from the date of passing of the resolution. Accordingly, the Shareholders' approval is sought for the same. The Directors recommend this Resolution for approval of the Shareholders. ii) in case of allotment of eligible convertible securities, either the date of the Meeting in which the Board decides to open the issue of such convertible securities or the date on which the holders of such convertible securities become entitled to apply for the equity shares, as may be determined by the Board. in which the Board decides to open the proposed issue in case of allotment of equity shares, the date of Meeting i) On the recommendation of the Nomination & Remuneration Committee, Mr. Narayanan Kumar (DIN: 00007848) was appointed as an Additional Director of the Company with effect from May 27, 2016. In terms of Section 161(1) of the Companies Act, 2013, Mr. Kumar holds office as Additional Director upto the date of this Annual General Meeting. The Company has received a notice in writing from the Director alongwith deposit of requisite amount under Section 160 of the Companies Act, 2013, proposing his candidature for the office of Director of the Company. In terms of Section 149 and any other applicable provisions of the Companies Act, 2013, Mr. Kumar is proposed to be appointed as an Independent Director for a term up to May 26, 2021, for a period of 5 years from the date of his appointment. Pursuant to the provisions of the Companies Act, 2013 and Reg. 25(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations), he is eligible for re-appointment after May 26, 2021. In the opinion of the Board, Mr. Kumar fulfils the conditions specified in the Companies Act, 2013 and rules made thereunder Item No. 16: Except Mr. Aga, being the appointee, none of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 15. of Mr. Aga as an Independent Director. Accordingly, the Board recommends the resolution in relation to appointment of Mr. Aga as an Independent Director, for the approval by the shareholders of the Company. On the recommendation of the Nomination & Remuneration Committee and the Board of Directors of the Company, it is proposed to re-appoint Mr. Shailendra Roy (DIN: 02144836), as a Whole-time Director of the Company with effect from March 9, 2017 upto and including July 7, 2020, subject to the approval of the members in the Annual General Meeting. The draft Agreement to be entered into with Mr. R. Shankar Raman will be open for inspection by members at the Registered Office of the Company on all working days [except Saturdays] between 11.00 a.m. and 1.00 p.m. up to the date of the Annual General Meeting. The Board recommends approval of the appointment and remuneration of Mr. R. Shankar Raman, as Whole- time Director of the Company. Except Mr. Shankar Raman, being the appointee, none of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 13. Item No. 14: The agreement to be entered into by the Company with Mr. R. Shankar Raman, in respect of his appointment as Whole-time Director, will contain the terms and conditions of his appointment including remuneration. Disclosures as required under Secretarial Standard 2 on General Meetings are provided as an Annexure to this Notice. Others Company's contribution to retirement funds, official use of car/ driver and communication facilities for Company's business, as per rules of the Company. The above perquisites will exclude value of Stock Option benefits, if any, computed as per Income Tax Act/Rules, tax on which will be borne by the Company. Perquisites: 12 lakh per annum excluding free furnished accommodation or house rent allowance in lieu thereof. Directors within the overall limits approved by the shareholders of the Company. Commission Upon the resolution in item no. 12 coming into effect, the commission will be paid as fixed by the Nomination & Remuneration Committee and the Board of 75,000 10,25,000 - ₹1,00,000 -15,25,000 with the annual increment due on April 1 every year. - Salary 11,25,000 (Rupees Eleven Lakh Twenty Five Thousand only) per month in the scale of 6,50,000 - : The Company will enter into an Agreement with Mr. R. Shankar Raman re-appointing him as a Whole-time Director for the period from October 1, 2016 to September 30, 2021. During the period of the above agreement and so long as the Whole-time Director performs his services as per the terms and conditions provided by this agreement, he shall be entitled to the following: Board was delegated authority to decide the remuneration of Whole- time Directors of the Company. LARSEN & TOUBRO 54 Mr. Roy is Senior Executive Vice President - Power, Heavy Engineering and Defence. He holds a Bachelor of Technology degree and started his career in 1975 as an Engineer with Bharat Heavy Electricals Limited's manufacturing unit at Hardwar. Part III, of Schedule V of the Companies Act, 2013 read with Secretarial Standard 2 on General Meetings provides that the appointment and remuneration of Managing Directors and Whole-time Directors in accordance with Part I and Part II of the Schedule V shall be subject to approval by resolution of the shareholders in a General Meeting. Mr. Roy's notable contribution in the Company includes the Company's Part III, of Schedule V of the Companies Act, 2013 read with Secretarial Standard 2 on General Meetings provides that the appointment and remuneration of Managing Directors and Whole-time Directors in accordance with Part I and Part II of the Schedule V shall be subject to approval by resolution of the shareholders in a General Meeting. The Board considers that his association would be of immense benefit to the Company and it is desirable to avail services In the opinion of the Board, Mr. Aga fulfils the conditions specified in the Companies Act, 2013 and rules made thereunder and LODR Regulations for his appointment as an Independent Director of the Company and is independent of the management. The copy of the letter of appointment of Mr. Aga as an Independent Director setting out the terms and conditions would be available for inspection without any fee by the members at the Registered Office of the Company on all working days [except Saturdays] between 11.00 a.m. and 1.00 p.m. up to the date of the Annual General Meeting. 00022065) was appointed as an Additional Director of the Company with effect from May 25, 2016. In terms of Section 161(1) of the Companies Act, 2013, Mr. Aga holds office as Additional Director upto the date of this Annual General Meeting. The Company has received a notice in writing from the Director alongwith deposit of requisite amount under Section 160 of the Companies Act, 2013, proposing his candidature for the office of Director of the Company. In terms of Section 149 and any other applicable provisions of the Companies Act, 2013, Mr. Aga is proposed to be appointed as an Independent Director for a term up to May 24, 2021, for a period of 5 years from the date of his appointment. Pursuant to the provisions of the Companies Act, 2013 and Reg. 25(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations), he is eligible for re-appointment after May 24, 2021. On the recommendation of the Nomination & Remuneration Committee, Mr. Sanjeev Aga (DIN: Item No. 15: The draft Agreement to be entered into with Mr. Shailendra Roy will be open for inspection by members at the Registered Office of the Company on all working days [except Saturdays] between 11.00 a.m. and 1.00 p.m. up to the date of the Annual General Meeting. The Board recommends approval of the appointment and remuneration of Mr. Shailendra Roy, as Whole- time Director of the Company. Except Mr. Roy, being the appointee, none of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 14 The agreement to be entered into by the Company with Mr. Shailendra Roy, in respect of his appointment as Whole-time Director, will contain the terms and conditions of his appointment including remuneration. Disclosures as required under Secretarial Standard 2 on General Meetings are provided as an Annexure to this Notice. Others Company's contribution to retirement funds, official use of car/ driver and communication facilities for Company's business, as per rules of the Company. The above perquisites will exclude value of Stock Option benefits, if any, computed as per Income Tax Act/Rules, tax on which will be borne by the Company. Perquisites 12 lakh per annum excluding free furnished accommodation. 55 Commission Upon the resolution in item no. 12 coming into effect, the commission will be paid as fixed by the Nomination & Remuneration Committee and the Board of Directors within the overall limits approved by the shareholders of the Company. 10,25,000 (Rupees Ten Lakh Twenty Five Thousand only) per month in the scale of 6,50,000 - * 75,000-10,25,000 - ₹1,00,000 -15,25,000 with the annual increment due on April 1 every year. Salary: The Company will enter into an Agreement with Mr. Shailendra Roy appointing him as a Whole-time Director for the period from March 9, 2017 to July 7, 2020. During the period of the above agreement and so long as the Whole-time Director performs his services as per the terms and conditions provided by this agreement, he shall be entitled to the following: At the Annual General Meeting of the Company held on August 26, 2011 and August 22, 2013, the shareholders have fixed the maximum limits within which the Board was delegated authority to decide the remuneration of Whole- time Directors of the Company. entry into Railway business, Power Development and growth of new business ventures. The above perquisites will exclude value of Stock Option benefits, if any, computed as per Income Tax Act/Rules, tax on which will be borne by the Company. Part III, of Schedule V of the Companies Act, 2013 read with Secretarial Standard 2 on General Meetings provides that the appointment and remuneration of Managing Directors and Whole-time Directors in accordance with Part I and Part II of the Schedule V shall be subject to approval by resolution of the shareholders in a General Meeting. The actual commission will be decided based on parameters set periodically by the Nomination & Remuneration Committee/Board. in the enclosed attendance slip: Initial password, is provided as below, ii. i. whose email addresses are not registered with the Company/Depository Participants): In case a Member receives physical copy of the Notice of AGM (for Members com. - Shareholders and remote e-voting user manual Shareholders, available at the downloads section of www.evoting.nsdl. - xiii. In case of any queries, you may refer the Frequently Asked Questions (FAQs) other than individuals, HUF, NRI, etc.) are required to send scanned copy (PDF/JPG format) of the relevant Board Resolution/ Authority letter etc., together with attested specimen signature of the duly authorized signatory(ies) who are authorized to vote, to the Scrutinizer through e-mail to scrutinizer@ snaco.net, with a copy marked to evoting@ nsdl.co.in. shareholders (i.e. xii. Institutional xi. Once the vote on the resolution is cast, the cast successfully" will be displayed. the message "Vote Upon confirmation, X. prompted. "Confirm" when, selecting appropriate option and click on "Submit" and also ix. Cast your vote by B. LARSEN & TOUBRO Perquisites: 12 lakh per annum excluding free furnished accommodation. EVEN (E-Voting Event Number) User ID Password Member shall not be allowed to change it subsequently. Based on the report received from the scrutinizer the Company will submit within 48 hours of the conclusion of the Meeting to the stock exchanges details of the voting results as required under Reg. 44(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. assets, sale of shares in Subsidiary & Associate Companies/Special Purpose Vehicles/Joint Ventures and also from sale of strategic investments/ adjustment in valuation of strategic investments. Please follow all steps from Sl. No. (ii) to Sl. No. (xiii) above, to cast vote. Commission Upto 0.1% per annum of the operating net profits after tax of the Company from the year 2015-16. The Commission for 2015-16 will be on a pro-rata basis. Such Commission will be excluding extraordinary/exceptional profits or losses arising from sale of business/ Salary: 7,25,000 (Rupees Seven Lakh Twenty Five Thousand only) per month in the scale of 6,50,000 - 75,000-10,25,000 - 1,00,000 -15,25,000 with the annual increment due on April 1 every year. The Company has entered into an Agreement with Mr. D.K Sen appointing him as a Whole-time Director for the period from October 1, 2015 to September 30, 2020. During the period of this agreement and so long as the Whole-time Director performs his services as per the terms and conditions provided by this agreement, he shall be entitled to the following: At the Annual General Meeting of the Company held on August 26, 2011 and August 22, 2013 the shareholders had fixed the maximum limits within which the Board was delegated authority to decide the remuneration of the Whole-time Director of the Company. Pursuant to this, the Board has fixed the remuneration payable to Mr. D.K Sen during his tenure as Whole-time Director. Part III, of Schedule V of the Companies Act, 2013 read with the Secretarial Standard 2 on General Meetings provides that the appointment and remuneration of Managing Directors and Whole-time Directors in accordance with Part I and Part II of the Schedule V shall be subject to approval by resolution of the shareholders in a General Meeting. His significant contributions are in the Railways sector by securing the CTP 1 & 2 & EMP 4 packages of the Dedicated Freight Corridor. He holds a degree in Civil Engineering from IIT Kharagpur and a Post Graduate degree in Business Management from XLRI, Jamshedpur. Mr. Sen is Senior Executive Vice President - Infrastructure. Mr. Sen started his tenure at L&T in 1989 as Senior Manager (Civil & Structural Design) in EDRC Kolkata. He is also responsible for the activities of the Transportation Infrastructure business, Heavy Civil Infrastructure business and L&T Geo Structure LLP. The Board of Directors, on the recommendation of the Nomination & Remuneration Committee, appointed Mr. D.K Sen as a Whole- time Director of the Company with effect from October 1, 2015 upto and including September 30, 2020, subject to the approval of the members in the Annual General Meeting. with effect from October 1, 2015. In terms of Section 161(1) of the Companies Act, 2013, Mr. Sen holds office as Additional Director upto the date of this Annual General Meeting. The Company has received a notice in writing from a member alongwith deposit of requisite amount under Section 160 of the Companies Act, 2013, proposing his candidature for the office of Director of the Company. 49 Prior to joining L&T, Mr. Sen worked for 12 years for a clutch of companies like M/s. Tata Steel, Jamshedpur, M/s. Development Consultants, Kolkata and was involved in a turnkey EPC Transmission line project in Malaysia. EXPLANATORY STATEMENT As required by Section 102 of the Companies Act, 2013, the following Explanatory Statement sets out material facts relating to the business under items 3, 6 to 18 and 21 of the accompanying Notice dated May 25, 2016. The Scrutinizer will submit his report to the Chairman after completion of the scrutiny. The result of the voting on the Resolutions at the Meeting shall be announced by the Chairman or any other person authorized by him immediately after the results are declared. On the recommendation of the Nomination & Remuneration Committee, the Board of Directors appointed Mr. D.K Sen (DIN: 03554707) as an Additional Director The results declared alongwith the Scrutinizer's report, will be posted on the website of the Company www.larsentoubro.com and on the website of NSDL and will be displayed on the Notice Board of the Company at its Registered Office as well as Corporate Office immediately after the declaration of the result by the Chairman or any person authorised by him in writing and will be communicated to the Stock Exchanges. Item No. 3: A Member can opt for only one mode of voting i.e. either through remote e-voting or at the Meeting. If a Member casts votes by both modes, then voting done through remote e-voting shall prevail. Except Ms. Sharma, being the appointee, none of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 3. The Directors recommend the Resolution for approval of the shareholders. Item No. 6 & 10: On the recommendation of the Nomination & Remuneration Committee, Ms. Sunita Sharma (DIN: 02949529) was appointed as a Director in casual vacancy caused due to the resignation of Mr. N. Mohanraj. Pursuant to Section 161(4) of the Companies Act, 2013 Ms. Sunita Sharma will hold office up to the date of this Annual General Meeting. The Company has received a notice in writing from a member alongwith deposit of requisite amount under the provisions of Section 160 of the Companies Act, 2013 proposing the candidature of Ms. Sunita Sharma as Director. c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; f) d) The Directors have prepared the Annual Accounts on a going concern basis; b) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period; e) The Directors have laid down an adequate system of internal financial controls to be followed by the Company and such internal financial controls are adequate and operating efficiently; It includes circulation of questionnaires to all Directors for evaluation of the Board and its Committees, Board composition and its structure, its culture, its effectiveness, its functioning, information availability, etc. These questionnaires also cover specific criteria and the grounds on which all Directors in their individual capacity will be evaluated. evaluation of the performance of the Board, Committees, Chairman and individual directors has to be made. ADEQUACY OF INTERNAL FINANCIAL CONTROL The Company has designed and implemented a process driven framework for Internal Financial Controls ("IFC") within the meaning of the explanation to Section 134(5) (e) of the Companies Act, 2013. For the year ended March 31, 2016, the Board is of the opinion that the Company has sound IFC commensurate with the nature and size of its business operations and operating effectively and no material weakness exists. The Company has a process in place to continuously monitor the same and identify gaps, if any, and implement new and/or improved controls wherever the effect of such gaps would have a material effect on the Company's operations. PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND DIRECTORS The Nomination & Remuneration Committee and the Board have laid down the manner in which formal annual The inputs given by all the Directors were discussed in the meeting of the Independent Directors held on April 11, 2016, as per Schedule IV of the Companies Act, 2013. The performance evaluation of the Board, Committees, Chairman and Directors was also reviewed by the Nomination & Remuneration Committee and the Board. a) In the preparation of Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; The Individual Directors' responses on the questionnaire on the performance of the Board, Committee(s), Directors and Chairman were analyzed by an independent consultant, to arrive at unbiased conclusions. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and were operating effectively. The Board of Directors of the Company confirms: responsibilities in the Company and the nature of the industry in which the Company operates, the business model of the Company, etc. 20 The notice convening the AGM includes the proposal for appointment/re-appointment of Directors. It is proposed to re-appoint Mr. Shailendra Roy as a Whole-time Director of the Company for the period March 9, 2017 to July 7, 2020, subject to the approval of the shareholders. DISCLOSURE OF REMUNERATION The terms and conditions of appointment of the Independent Directors are placed on the website of the Company http://investors. larsentoubro.com/Listing- Compliance.aspx. The Company has also disclosed on its website http://investors.larsentoubro.com/Listing-Compliance.aspx details of the familiarization programs formulated to educate the Directors regarding their roles, rights and NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS This information is given in Annexure 'B' - Report on Corporate Governance forming part of this Board Report. Members are requested to refer to page 79 of this Annual Report. AUDIT COMMITTEE The Company has in place an Audit Committee in terms of the requirements of the Companies Act, 2013 read with the rules made thereunder and Regulation 18 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The details relating to the same are given in Annexure 'B' - Report on Corporate Governance forming part of this Board Report. Members are requested to refer to pages 81 to 83 of this Annual Report. COMPANY POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION The Company has in place a Nomination & Remuneration Committee in accordance with the requirements of the Companies Act, 2013 read with the rules made thereunder and Regulation 19 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The details relating to the same are given in Annexure 'B' - Report on Corporate Governance forming part of this Board Report. Members are requested to refer to pages 83 to 85 of this Annual Report. The Committee has formulated a policy on Director's appointment and remuneration including recommendation of remuneration of the key managerial personnel and other employees, composition and the criteria for determining qualifications, positive attributes and independence of a Director. The Committee has formulated a policy on board diversity. The Company has received Declarations of Independence as stipulated under Section 149(7) of the Companies Act, 2013 from Independent Directors confirming that he/she is not disqualified from appointing/continuing as Independent Director. The same are also displayed on the website of the Company www.larsentoubro.com EXTRACT OF ANNUAL RETURN As per the provisions of Section 92(3) of the Companies Act, 2013, an extract of the Annual Return in Form MGT-9 is attached as Annexure 'F' to this Board Report. 67 DIRECTORS' RESPONSIBILITY STATEMENT The details of remuneration as required to be disclosed under the Companies Act, 2013 and the rules made thereunder, are given in Annexure 'D' forming part of this Board report. L&T Global Holdings Limited, United Arab Emirates exceeding 5 lakh per month or 60 lakh per annum is ₹ provided in Annexure 'G' forming part of this report. In terms of Section 136(1) of the Act and the rules made thereunder, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any Shareholder interested in obtaining a copy of the same may write to the Company Secretary. None of the employees listed in the said Annexure is related to any Director of the Company. L&T Metro Rail (Hyderabad) Limited 26,00,00,000 Preference L&T Hydrocarbon Engineering Limited Equity It is proposed to re-appoint Mr. R. Shankar Raman as a Whole-time Director of the Company for a period of 5 years from October 1, 2016 to September 30, 2021, subject to the approval of the shareholders. 1,000 L&T-Chiyoda Limited PNG Tollway Limited JSK Electricals Limited Larsen & Toubro International FZE, United Arab Emirates L&T-Valdel Engineering Limited Name of the Company L&T General Insurance Company Equity Limited Type of Shares No. of shares 8,50,00,000 Name of the company Equity The details of employees receiving remuneration 4,92,643 L&T Realty Limited COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND ANNUAL GENERAL MEETINGS The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and Annual General Meetings. PROTECTION OF WOMEN AT WORKPLACE Private Limited Marine Infrastructure Developer Equity LLC, Saudi Arabia Equity Larsen & Toubro Saudi Arabia Equity LTH Milcom Limited 38,34,00,000 64,83,00,000 13,22,50,000 133,18,60,000 60,47,50,000 Preference L&T Uttaranchal Hydropower Limited Preference L&T Shipbuilding Limited Preference Preference L&T Seawoods Limited L&T Power Development Limited Equity Mr. S. N. Subrahmanyan and Mr. A.M Naik retire by rotation at the ensuing AGM and being eligible offers themselves for re-appointment. Mrs. Sunita Sharma who was appointed as a Director in casual vacancy caused due to the resignation of Mr. N. Mohanraj holds office till the conclusion of the ensuing AGM and being eligible offers herself for re-appointment. AMOUNT TO BE CARRIED TO RESERVE The Board has appointed Mr. Sanjeev Aga as an Independent Director of the Company from May 25, 2016 to May 24, 2021, subject to the approval of shareholders. Mr. Sanjeev Aga, appointed as Additional Director, will hold office till the ensuing AGM and is eligible for appointment. L&T-Gulf Private Limited 50,000 Rishi Consfab Private Limited Salzer Electronics Limited Number of shares 11,79,000 1,829 L&T Solar Limited 2,15,43,340 45,00,000 27,04,000 26,79,808 The Company has formulated a policy on the identification of material subsidiaries and the same is placed on the website at http://investors.larsentoubro.com/Listing- Compliance.aspx. The Company does not have any material subsidiaries. C) Performance and Financial Position of each subsidiary/associate and joint venture companies: A statement containing the salient features of the financial statement of subsidiary/associate/joint venture companies is provided on pages 390 to 399 of this Annual Report. PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN OR SECURITY PROVIDED BY THE COMPANY 21,20,040 9,53,11,850 L&T Sapura Shipping Private Limited 6,000 A) Shares subscribed/acquired during the year: The Company has formulated a policy on 'Protection of Women's Rights at Workplace' as per the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. This has been widely disseminated. There were no cases of sexual harassment received by the Company in 2015-16. 1,13,340 625 9,990 B) Equity shares sold/transferred during the year: Name of the Company Number of shares L&T Finance Holdings Limited L&T Infocity Limited 8,52,26,706 2,40,30,000 L&T Natural Resources Limited L&T Powergen Limited 50,000 50,000 L&T Sapura Offshore Private Limited The Company has disclosed the full particulars of the loans given, investments made or guarantees given or security provided on pages 263 to 265 of this Annual Report. PARTICULARS OF CONTRACTS OR ARRANGEMENTS The Board has appointed Mr. Narayanan Kumar as an Independent Director of the Company at its Meeting dated May 25, 2016 with effect from May 27, 2016 to May 26, 2021, subject to the approval of shareholders. Mr. Narayanan Kumar, appointed as Additional Director, will hold office till the ensuing AGM and is eligible for appointment. WITH RELATED PARTIES The Company has a process in place to periodically review and monitor Related Party Transactions. CORPORATE SOCIAL RESPONSIBILITY The Corporate Social Responsibility Committee comprises of Mr. Vikram Singh Mehta, Mr. D. K. Sen and Mr. R. Shankar Raman as the Members. Mr. Vikram Singh Mehta is the Chairman of the Committee. The details of the various projects and programs which can be undertaken by the Company as a part of its CSR policy framework is available on its website http://investors.larsentoubro.com/Listing-Compliance.aspx. The disclosures required to be given under Section 135 of the Companies Act, 2013 read with Rule 8(1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014 are given in Annexure 'C' forming part of this Board Report. DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL APPOINTED/RESIGNED DURING THE YEAR Mr. K. Venkataramanan retired as the Chief Executive Officer and Managing Director of the Company on September 30, 2015 pursuant to his superannuation from the services of the Company. The Board places on record its appreciation of the immense contribution by Mr. K. Venkataramanan as the Chief Executive Officer and Managing Director of the Company. Mr. M. V. Kotwal retired as the Whole-time Director of the Company on August 26, 2015 pursuant to his superannuation from the services of the Company. The Board places on record its appreciation of the immense contribution by Mr. M. V. Kotwal as a Whole-time Director of the Company. Mr. Swapan Dasgupta resigned as Nominee Director of the Company on May 15, 2016. The Board places on record its appreciation of the immense contribution by Mr. Swapan Dasgupta as Director of the Company. A detailed note on risk management is given under financial review section of the Management Discussion and Analysis on pages 217 to 219 of this Annual Report. The Board has appointed Mr. Subramanian Sarma as a Non-Executive Director of the Company w.e.f. August 19, During the year the Board has appointed Mr. S. N. Subrahmanyan as Deputy Managing Director and President of the Company w.e.f October 1, 2015 for a period of 5 years, subject to approval of the shareholders. The Board has appointed Mr. D. K. Sen as a Whole-time Director w.e.f. October 1, 2015 for a period of 5 years, subject to approval of the shareholders. The Board has appointed Mr. M. V. Satish as a Whole- time Director of the Company w.e.f. January 29, 2016 LARSEN & TOUBRO for a period of five years, subject to approval of the shareholders. The Board has appointed Ms. Naina Lal Kidwai as an Independent Director of the Company from March 1, 2016 to February 28, 2021, subject to the approval of the shareholders. Ms. Naina Lal Kidwai, appointed as an Additional Director, will hold office till the ensuing AGM and is eligible for appointment. 2015. The Company has formulated a risk management policy and has in place a mechanism to inform the Board Members about risk assessment and minimization procedures and periodical review to ensure that executive management controls risk by means of a properly designed framework. The Risk Management Committee comprises of Mr. A. M. Naik, Mr. S. N. Subrahmanyan and Mr. R. Shankar Raman. Mr. A. M. Naik is the Chairman of the Committee. RISK MANAGEMENT POLICY All the related party transactions were in the ordinary course of business and at arm's length. The Audit Committee has approved all related party transactions for the FY 2015-16 and estimated transactions for FY 2016-17. There were no material transactions with related parties during the year. STATE OF COMPANY AFFAIRS 40,00,016 The gross sales and other income for the financial year under review were 62,821 crore as against 65 99 66 *59,841 crore for the previous financial year registering an increase of 5%. The profit before tax from continuing operations including extraordinary and exceptional items was 6,689 crore for the financial year under review as against 6,701 crore for the previous financial year, registering a decrease of 0.18%. The profit after tax from continuing operations including extraordinary and exceptional items of 5,311 crore for the financial year under review as against 5,056 crore for the previous financial year, registering an increase of 5%. The Company has not transferred any amount to the reserves during the current financial year. DIVIDEND The Directors recommend payment of dividend of 18.25 (912.50%) per equity share of 2/- each on the share capital. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY, BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT There are no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this report. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO Information as required to be given under Section 134(3) (m) read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is provided in Annexure 'A' forming part of this Board Report. The Audit Committee and the Board of Directors have approved the Related Party Transactions Policy and the same has been uploaded on the Company's website http:// investors.larsentoubro.com/Listing-Compliance.aspx. During the year under review, the Company subscribed to/acquired equity/preference shares in various subsidiary/ associate/joint venture companies. These subsidiaries include companies in general insurance, power, real estate, infrastructure and manufacturing sectors. The details of investments in subsidiary companies during the year are as under: DECLARATION OF INDEPENDENCE LARSEN & TOUBRO in other public 2. companies including Max Financial Services Limited private companies 3. which are subsidiaries Shakti Sustainable Energy Foundation of public companies 4. Altico Capital India Private 3. L&T Metro Rail (Hyderabad) Limited Limited (excluding foreign companies) Memberships/ Chairmanships of committees across all companies Member Audit Committee 1. Cipla Limited 2. Altico Capital India Private Limited 1. Cipla Limited Chairman Stakeholders Relationship Committee Directorships held 1. Larsen & Toubro Infotech Limited 60 LARSEN & TOUBRO (ANNEXURE TO NOTICE DATED MAY 25, 2016) DETAILS OF DIRECTORS SEEKING APPOINTMENT/RE-APPOINTMENT AT THE FORTHCOMING ANNUAL GENERAL MEETING [Pursuant to Regulation 36(3) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard 2 on General Meetings] Name of the Director Date of Birth Date of Appointment on the Board Qualifications Expertise Ms. Naina Lal Kidwai April 16, 1957 March 1, 2016 Bachelor's in Economics, Chartered Accountant and MBA Vast Experience in the area of Banking Mr. S. N. Subrahmanyan March 16, 1960 July 1, 2011 B.Sc, Engg. (Civil) & MBA Finance SUBSIDIARY/ASSOCIATE/JOINT VENTURE COMPANIES Vast Experience in Design and Build (D&B) contracts, PPP Projects, Engineering and Construction Industry 2. L&T Technology Services Limited 60 Larsen & Toubro Infotech Limited Committee Audit Committee 1. L&T Finance Holdings Limited 2. L&T General Insurance Company Limited 3. L&T Infrastructure Development Projects Limited 4. L&T Investment Management Limited 5. L&T Realty Limited 6. L&T Seawoods Limited Nomination & Remuneration Committee 1. L&T Seawoods Limited 2. L&T Realty Limited 3. L&T Investment Management Limited 4. L&T Infrastructure Development Projects Limited Stakeholder Relationship Committee L&T Finance Holdings Limited Mr. Shailendra Roy September 18, 1952 March 9, 2012 B. Tech Vast experience in Thermal Power, Heavy Engineering, Defence & Aerospace Industry 1. L&T Power Development Limited 2. L&T-Sargent & Lundy Limited 3. Nabha Power Limited 4. L&T-MHPS Boilers Private Limited 5. L&T-MHPS Turbine Generators Private Limited 6. Raykal Aluminium Company Private Limited 7. L&T Special Steels and Heavy Forgings Private Limited 8. L&T-Howden Private Limited 9. L&T Power Limited Member Nomination & Remuneration Corporate Social 9. L&T Metro Rail (Hyderabad) Limited 7. L&T Seawoods Limited 1. Max Financial Services Limited 2. Altico Capital India Private Limited Stakeholders Relationship Committee Cipla Limited Responsibility Committee Larsen & Toubro Infotech Limited Member Audit Committee Larsen & Toubro Infotech Limited Nomination & Remuneration Committee Larsen & Toubro Infotech Limited Mr. R. Shankar Raman December 20, 1958 October 1, 2011 B.Com, ACA and Grad. CWA Vast experience in the Finance, Taxation, Risk Management, Legal and Investor Relations 1. L&T Infrastructure Development Projects Limited 2. L&T General Insurance Company Limited L&T Finance Holdings Limited 3. 4. L&T Investment Management Limited 5. Larsen & Toubro Infotech Limited 6. L&T Hydrocarbon Engineering Limited 8. L&T Realty Limited Jointly with LIC * inter-se Mr. A. M. Naik June 9, 1942 November 23, 1989 Mr. D. K. Sen March 19, 1956 October 1, 2015 B.E (Mech.) Vast Experience in Insurance and Diverse and vast experience Housing Finance Directorships held in other public 2. companies including 1. LIC Housing Finance Limited LIC Nomura Mutual Fund AMC Ltd. private companies 3. which are subsidiaries LICHFL Asset Management Company Limited of public companies 4. LICHFL Financial Services Limited in general management, Technology and Engineering & Construction 1. Larsen & Toubro Infotech Limited Masters 2. L&T Technology Services Expertise on the Board LARSEN & TOUBRO with the provisions of Section 148 of the Act read with the Rules, the remuneration payable to the cost auditor has to be ratified by the shareholders of the Company. Accordingly, consent of the members is sought for the aforesaid purpose. The Directors recommend this resolution for approval of the shareholders. None of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 21. By Order of the Board of Directors For LARSEN & TOUBRO LIMITED, N. HARIHARAN COMPANY SECRETARY M.NO - A3471 Mumbai, May 25, 2016 The route map for the venue of the Annual General Meeting of the Company is given on page 40 of this Annual Report 2015-16 59 (ANNEXURE TO NOTICE DATED MAY 25, 2016) DETAILS OF DIRECTORS SEEKING APPOINTMENT/RE-APPOINTMENT AT THE FORTHCOMING ANNUAL GENERAL MEETING [Pursuant to Regulation 36(3) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard 2 on General Meetings] Name of the Director Ms. Sunita Sharma Date of Birth March 9, 1959 Date of Appointment April 1, 2015 Qualifications Limited 3. L&T Realty Limited B.Sc Engg. (Civil), MBA (Finance) Vast experience in Design and Engineering, Business Development, Tendering and construction Nil Responsibility Committee Larsen & Toubro Limited Number of Meetings attended during the year Shareholding of Non- Executive Directors 7 of 9 9 of 9 2 of 2 2 of 2 100* Not Applicable Not Applicable Not Applicable Relationships Nil Nil Nil Nil between directors 3. L&T Technology Services Limited 1. Larsen & Toubro Limited 2. Larsen & Toubro Infotech Limited Nomination & Remuneration Corporate Social Committee Member L&T Infrastructure Engineering Limited Mr. M. V. Satish February 12, 1957 January 29, 2016 BE (Civil) Vast experience in Construction, Business Development, Contracts Management and Property Development in India and GCC region Nil (excluding foreign companies) Memberships/ Chairmanships of committees across all companies 5. LICHFL Care Homes Limited 6. Bhushan Steel Limited Chairperson Member Audit Committee LICHFL Care Homes Limited Larsen & Toubro Limited Corporate Social Responsibility Committee LICHFL Care Homes Limited Member Nomination & Remuneration Committee LIC Nomura Mutual Fund AMC Limited Stakeholders Relationship Committee LIC Housing Finance Limited Corporate Social Responsibility Committee LIC Housing Finance Limited Member Stakeholders Relationship Committee Nomination & Remuneration Committee 68 Generators Private Limited Less: Provision for tax Profit before tax Add: Exceptional Items extraordinary items and tax Profit before exceptional and Reserve Add: Transfer from Revaluation 1009.74 6342.47 998.88 6128.83 Less: Depreciation, amortisation, impairment and obsolescence 7352.21 7127.71 items & tax exceptional and extra ordinary Profit before depreciation, Particulars FINANCIAL RESULTS 1.59 2014-15 crore 6128.83 560.28 6689.11 1377.65 2015-16 crore 6344.06 357.16 6701.22 1645.04 Balance Sheet 8734.41 Balance available for disposal 2.13 retained earnings depreciation charged against Add: Reversal of deferred tax on 6.14 retained earnings Less: Depreciation charged against 2.15 dividend distribution tax) previous year (Including Less: Dividend paid for the 333.45 3429.11 from previous year Add: Balance brought forward 5056.18 5311.46 Profit for the period carried to 29.33 5330.48 ended March 31, 2016. Dear Members, Nomination & Remuneration Committee 1. Bharati Infratel limited May 27, 2016 2. Entertainment Network (India) Limited 1. Mphasis Limited Audit Committee 13. Singapore India Partnership Foundation 14. Aegon Life Insurance Company Limited Chairman 11. Cubbon Road Properties Private Limited 12. Nani Palkhivala Arbitration Centre 9. N.K Trading and Consultancy Private Limited 10. Madhuram Narayanan Centre for Exceptional Children 8. Madhura Kumar Properties Private Limited 7. eG Innovations Private Limited 6. Mphasis Limited 5. Take Solutions Limited 4. MRF Limited 3. Times Innovative Media Limited 2. Entertainment Network (India) Limited 1. Bharati Infratel Limited Industrailist B.E (Electronics) 1. L&T-Sargent & Lundy Limited 2. L&T-MHPS Turbine 2. Entertainment Network (India) Limited The Directors have pleasure in presenting their 71st Annual Report and Audited Financial Statements for the year Corporate Social Responsibility Committee Bharati Infratel Limited Member Board Report 63 63 Nil 1000* * Acquired on 10th June, 2016 Nil Relationships between Executive Directors 3000 Shareholding of Non- Not Applicable Number of Meetings attended during the year 2. Aegon Life Insurance Company Limited Not Applicable 1. Times Innovative Media Limited Nomination & Remuneration Committee 2. Aegon Life Insurance Company Limited 1. Times Innovative Media Limited Audit Committee Shareholders/Investors Grievance Committee Take Solutions Limited (which the directors directors inter-se Debenture Redemption Reserve 9 of 9 100 Not Applicable Not Applicable Not Applicable Executive Directors Relationships Nil Nil Nil Nil between directors inter-se 62 62 LARSEN & TOUBRO (ANNEXURE TO NOTICE DATED MAY 25, 2016) DETAILS OF DIRECTORS SEEKING APPOINTMENT/RE-APPOINTMENT AT THE FORTHCOMING ANNUAL GENERAL MEETING Mr. Shailendra Roy [Pursuant to Regulation 36(3) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard 2 on General Meetings] 9 of 9 Not Applicable 3. L&T-MHPS Boilers Private Limited appropriate as follows) 4. L&T Power Development Limited 5. Nabha Power Limited 6. L&T Special Steels and Heavy Forgings Private Limited 7. L&T Howden Private Limited Stakeholders Relationship Committee Larsen & Toubro Limited Corporate Social Responsibility Committee L&T Power Development Limited 61 Name of the Director Ms. Naina Lal Kidwai Mr. S. N. Subrahmanyan Number of Meetings attended during the year Shareholding of Non- Mr. R. Shankar Raman Corporate Social Responsibility Committee 1. Larsen & Toubro Limited 2. L&T Seawoods Limited 3. L&T Investment Management Limited 4. L&T Infrastructure 8 of 9 Name of the Director Date of Birth Development Projects Limited Qualifications Expertise January 28, 1950 64 During the year, the Company has transferred a sum of 1,51,31,245 to Investor Education & Protection Fund, the amount which was due & payable and remained unclaimed and unpaid for a period of seven years as provided in Section 205C(2) of the Companies Act, 1956. Despite the reminder letters sent to each shareholder, this amount remained unclaimed and hence was transferred. Cumulatively, the amount transferred to the said fund was 14,56,60,404 as on March 31, 2016. The Company sends letters to all shareholders, whose dividends are unclaimed so as to ensure that they receive their rightful dues. As the members are aware, the Company's shares are compulsorily tradable in electronic form. As on March 31, 2016, 97.90% of the Company's total paid up capital representing 91,18,73,781 shares are in dematerialized form. In view of the numerous advantages offered by the Depository system as well as to avoid frauds, members holding shares in physical mode are advised to avail of the facility of dematerialization from either of the depositories. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND DEPOSITORY SYSTEM The Company does not have any unclaimed deposits as of date. All unclaimed deposits have been transferred to Investor Education & Protection Fund. As at March 31, 2016 the gross tangible and intangible assets including leased Assets, stood at 13,297.13 crore and the net tangible and intangible assets, including leased assets, at 7,668.59 crore. Capital Expenditure during the year amounted to 776 crore. DEPOSITS The Company issued Non-Convertible Debentures (NCDs) worth 1,000 crore. At maturity, repayment of NCDs worth 600 crore was also made. The Company tied up a long-term foreign currency loan of USD 25 million, and also completed part repayment of a foreign currency long term debt of USD 5.83 million as per schedule. In addition, the Company prepaid foreign currency loans worth USD 50 million. Mr. Narayanan Kumar During the year under review, the Company allotted 19,16,784 equity shares of 2/- each upon exercise of stock options by the eligible employees under the Employee Stock Option Schemes. 156.50 256.50 1699.95 1510.54 140.88 134.33 1997.33 1901.37 6737.08 3429.11 1699.95 1510.54 86.28 2.20 18.25 per share of 2/- each on 93,14,78,845 shares. The Directors recommend payment of final dividend of Balance to be carried forward Dividend Date of Appointment on the Board Dividend Tax Proposed dividend CAPITAL & FINANCE 2. Mahindra Logistics Limited CAPITAL EXPENDITURE 3. Mahindra Logistics Limited Nomination & Remuneration Committee 1. Subex Limited Directorships held in other public companies including private companies which are subsidiaries of public companies (excluding foreign companies) February 1, 1952 May 25, 2016 B.SC (Hons. In Physics), MBA Vast Experience in Telecom Sector Memberships/ Chairmanships of committees across all companies 1. UFO Moviez India Limited 2. Pidilite Industries Limited 3. Idea Cellular Limited 6. Subex Limited 4. Mahindra Holidays & Resorts Limited 5. Manjushree Technopak Limited 7. Mahindra Logistics Limited Chairman Shareholders Grievance Committee 1. Pidilite Industries Limited 2. Idea Cellular Limited 3. Subex Limited Audit Committee 1. Subex Limited 2. Mahindra Holidays & Resorts Limited Mr. Sanjeev Aga VFD Installation for Air Compressor Movement/presence detectors at shop floor. Maximizing 3rd shift Utilization. Auto switching of Plating tanks heaters to eliminate practice of keeping heaters 'ON' in 3rd shift. • Optimizing Working hours reduced from 17 hrs to 9 hrs Installation of HVLS Fan Auto Timer for Mechanical presses to avoid idle running Use of Flood light LED instead of Halogen in campuses Replacement of conventional MH Lamps by LED lamps in working areas at projects as well as for street lights Reactive power compensation to maintain Power Factor at Unity. • Conducting awareness campaign, observing 'Walk-to-Work' day on 2nd Saturday of month at Kansbahal works. Installation of dedicated portable compressor at under-carriage shop & detachment of air connection from central compressor to save air consumption. Compressed air optimization through "Tag your Leak" survey. Process cooling tower fan operation converted from manual mode to Automatic mode operation through low cost automation. Automation of shop floor, gangway, street lights to prevent energy wastages. Replacement of Memco diode based welding machines with zuper arc inverter welding machines at Kancheepuram factory. • . • Retrofitting of LED fixtures in place of CFL Fixtures • every Use of Power Management System for monitoring & control Installation of solar street lighting in Integrated Urban Utility Projects/Industrial Township Projects. Water conserved compared to previous year & power saved power. • • • Installing Solar panels on Rooftop Shift towards usage of windmill power in the place of State Electricity Board at Kancheepuram factory (ii) Steps taken by the Company for utilizing alternate sources of energy: Use of Hybrid Lighting Masts thereby saving on fuel and energy. Use of Small Solar Generating sets for area and security post lighting. Also few weigh bridges are powered by solar electric generation sets. Use of photo electric sensors for lighting control in Integrated Urban Utility Projects/Industrial Township Projects. • 71 water treatment plants instead of conventional surface aerators, which will lead to energy savings by 12-15%. Installation of diffusers and blowers in waste operation from manual mode to automatic mode operation through low cost automation. Conversion of Process cooling tower fan Introduction of VSD based compressor Replacement of rotor resistance controlled starter to Drive controller starter for EOT cranes resulting smooth operation and energy saving. Replacement of 20 years old Acid Fumes Blowers (100HPx2Nos.) with Energy Efficient Blowers of 50HPX2Nos with improved suction of Fumes. increase the combustion Efficiency of Fuel (LPG). Providing Magnetic Resonators in order to Automation in Galvanizing Furnace in order to maintain constant Air-Fuel Ratio & Maintain working Temperature Utilization of Chiller for HVAC System - Campus FMD initiated and control the chiller running hour for HVAC need during holidays and extended working hours Replacing existing aged inefficient Split AC units with energy efficient units Optimization of Air Compressor operation by connecting 200 cfm Air Compressor exclusively for Shot Blasting Operation. Synchronization of lifts for effective use Use of natural cooling during winter Close monitoring of lighting system by providing dedicated team to avoid unwanted lighting . VIGIL MECHANISM (i) Steps taken or impact on conservation of energy: Maintaining Plant power factor at more than 99% using Automatic Power Factor Correction Unit to get incentive on Energy bill. SECRETARIAL AUDIT REPORT The Auditors report to the shareholders does not contain any qualification, observation or adverse comment. Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to Section 129(3) of the Companies Act, 2013 and Regulation 34 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 and prepared in accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants of India (ICAI), in this regard. CONSOLIDATED FINANCIAL STATEMENTS During the year under review, there were no material and significant orders passed by the regulators or courts or tribunals impacting the going concern status and the Company's operations in future. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS The detailed Corporate Sustainability Report is also available on the Company's website http://www.larsentoubro.com/corporate/sustainability. As per Regulation 34 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, a separate section on Business Responsibility Report forms a part of this Annual Report (refer pages 18 to 35). The Company has been one of the first engineering and construction companies in India to publish its report on Corporate Sustainability. BUSINESS RESPONSIBILITY REPORTING the Act. The policy provides for adequate safeguards against victimisation of persons who avail the same and provides for direct access to the chairperson of the Audit Committee. The Audit Committee of the Company oversees the implementation of the Whistle-Blower Policy. The Company has disclosed information about the establishment of the Whistle Blower Policy on its website http://investors.larsentoubro.com/corporate governance.aspx. During the year, no personnel has been declined access to the Audit Committee, wherever desired. The Secretarial Audit Report issued by M/s. S. N. Ananthasubramanian & Co., Practicing Company Secretaries is attached as Annexure 'E' to this Board Report. The Company has a Whistle-blower Policy in place since 2004 to encourage and facilitate employees to report concerns about unethical behaviour, actual/suspected frauds and violation of Company's Code of Conduct or Ethics Policy. The Policy has been suitably modified to meet the requirements of Vigil Mechanism under Pursuant to the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, a Report on Corporate Governance and a certificate obtained from the Statutory Auditors confirming compliance, is provided in Annexure 'B' forming part of this Board Report. FIRDOSH D. BUCHIA Partner Membership No.38332 SHARP & TANNAN Chartered Accountants Firm's Registration No. 109982W by the hand of Mumbai, May 25, 2016 We have examined the books of account and other relevant records and based on the information and explanations given to us, certify that in our opinion, the Company has implemented the Employees Stock Option Schemes in accordance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and the resolutions of the Company in general meetings held on 26 August 1999, 22 August 2003 and 25 August 2006. AUDITORS' CERTIFICATE ON EMPLOYEE STOCK OPTION SCHEMES A certificate obtained from the Statutory Auditors, confirming compliance with the Companies Act, 2013 and the above Regulations is reproduced below : There has been no material change in the Employee Stock Option Schemes (ESOP Schemes) during the current financial year. The ESOP Schemes are in compliance with SEBI (Share Based Employee Benefits) Regulations, 2014. The disclosures relating to ESOPs required to be made under the provisions of the Companies Act, 2013 and the rules made thereunder and the SEBI (Share Based Employee Benefits) Regulations, 2014 are provided on the website of the Company www.larsentoubro.com. OTHER DISCLOSURES LARSEN & TOUBRO Solar street at ESE campus As per the provisions of Section 177(9) of the Companies Act, 2013 ('Act'), the Company is required to establish an effective Vigil Mechanism for directors and employees to report genuine concerns. The Secretarial Auditor's report to the shareholders does not contain any qualification. 69 STATUTORY AUDITORS [A] CONSERVATION OF ENERGY: Information as required to be given under Section 134(3) (m) read with Rule 8(3) of the Companies (Accounts) Rules, 2014. Annexure 'A' to the Board Report LARSEN & TOUBRO 10 70 (DIN: 00001514) A. M. Naik Group Executive Chairman For and on behalf of the Board Mumbai, May 25, 2016 Your Directors take this opportunity to thank the customers, supply chain partners, employees, Financial Institutions, Banks, Central and State Government authorities, Regulatory authorities, Stock Exchanges and all the various stakeholders for their continued co-operation and support to the Company. Your Directors also wish to record their appreciation for the continued co-operation and support received from the Joint Venture partners/ Associates. ACKNOWLEDGEMENT A proposal for ratification of remuneration of the Cost Auditor for financial year 2016-17 is placed before the shareholders. The Report of the Cost Auditors for the financial year ended March 31, 2016 is under finalization and will be filed with the MCA within the prescribed period. Pursuant to the provisions of Section 148 of the Companies Act, 2013 and as per the Companies (Cost Records and Audit) Rules, 2014 and amendments thereof, the Board, on the recommendation of the Audit Committee, at its meeting held on May 25, 2016, has approved the appointment of M/s R. Nanabhoy & Co., Cost Accountants as the Cost Auditors for the Company for the financial year ending March 31, 2017 at a remuneration of 11 lakhs. COST AUDITORS The Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Companies Act, 2013. REPORTING OF FRAUD The Auditors have also furnished a declaration confirming their independence as well as their arm's length relationship with the Company as well as declaring that they have not taken up any prohibited non-audit assignments for the Company. The Auditors have confirmed that they have subjected themselves to the peer review process of ICAI and hold valid certificate issued by the Peer Review Board of the ICAI. Sharp & Tannan and Deloitte Haskins & Sells LLP, have informed the Company that their appointment if made would be within the limits prescribed under Section 141 of the Companies Act, 2013. Both the Auditors will be jointly and severally responsible during the financial year 2016-17. In view of the mandatory rotation of auditor requirement and to ensure smooth transition during this period, M/s. Deloitte Haskins & Sells LLP [ICAI Registration No. 117366W/W-100018] was appointed as Statutory Auditors for a period of 5 continuous years from the conclusion of 70th Annual General Meeting till the conclusion of 75th Annual General Meeting of the Company. A proposal for ratifying their appointment from the conclusion of the 71st AGM till the conclusion of the 72nd AGM has been included in the Notice of the ensuing AGM. In accordance with provisions of Section 139 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, the Company had appointed them for a period of two years from conclusion of 70th Annual General Meeting till the conclusion of 72nd Annual General Meeting. A proposal for ratifying their appointment from the conclusion of the 71st AGM till the conclusion of the 72nd AGM has been included in the Notice of the ensuing AGM. The Company's auditors M/s. Sharp & Tannan, (firm registration number 109982W) have already completed more than ten years as Statutory Auditors of the Company. • • 72 • No. Imported Year of Import a) Cone Crusher from ARD (UK) 2015-16 b) Dry Sand Making Systems, Air Screens, Vertical Shaft Impactors (VSI) and Jaw Crushers (STJ) from KEMCO, Japan. Status of absorption & reasons for non- absorption, if any Under absorption - The technology transfer for manufacturing and application of cone crusher is underway. Cone crushers as per ARD technology are to be manufactured and put into operation for testing and experiment. 2013-14 Manufacturing Technology of Sand Plant has been absorbed. Application technology is in the process of absorption. Sand manufacturing plant is under manufacturing now. It is to be installed and operation is to be studied for Indian crusher dust. 76 (iv) Expenditure incurred on Research & Development: crore Capital 53.93 Recurring 149.62 Total 203.55 Technology S. (iii) Information regarding technology imported during the last 3 years: 15 Development of printed circuit switch board for CNC Gas cutting machine & assembly of components done in-house. Indigenous development of rewinding process for High frequency grinders for AG7 Model of Fein & Bosch makes. Introduction of new products like New 1-phase Meter with IrDA, 3-Phase Meter with IrDA, 1-Phase Pre-Paid Meter (Taurus), 3-phase Pre-Paid Meter (Atria), 1-Phase Smart Meter (Aurora), 3-Phase Smart Meter (Regor), 3-Phase Digital Panel Meter (Nova), New Trip Supervision Relay (TCS01-nX) & Motor Protection Relay (MPR200). Introduction of L&T's Outdoor Compact substation- N-Qube following Franchisee model. Introduction of a new variant to the GIS (Gas insulated switchgear) family. Continuous product development in the switchgear business at its various Department of Scientific & Industrial Research, Ministry of Science & Technology accredited R&D facilities in India and filing 114 Patent, 12 Trademark, 37 Design and 1 Copyright applications in India and 2 foreign patent applications. Expansion of switchgear product range and offerings to the infrastructure sector. Identification of major causes of pre-mature failure of asphalt layers of pavements and suggesting suitable preventive and rectification techniques. Development of in-house developed stockpile, all weather cold pot-hole mix which was 25% cheaper than any proprietary product available in the market. Use of Cement grouted bituminous macadam Total R&D expenditure as a percentage as a cost effective and durable solution to many Use of alternate curing techniques to reduce/ eliminate the usage of water for concrete curing. Use of Geo polymer concrete which ensures elimination of cement from construction activities. Use of the high strength self-consolidation concrete is very essential for high rise building and congested reinforced section especially in girders and segment of metro rail projects. Use of in-house developed pumpable dry mortar which is found to be 40% cheaper than proprietary products. Use of economical indigenous developed testing gadgets as worthy substitutes for costly foreign imports. Economical and cost effective piles in solar projects thus saving time. Alternate and economical connection systems connections of precast shear wall panels Stretchable PVC hose for horizontal connection of shear wall panels is cost effective and construction friendly Use of Fixed-Bed Biofilm Activated Sludge (FBAS) in Bhatpara Wastewater Treatment Plant, West Bengal. The plant has better aesthetics as the reactor is covered by the plant racks. The plant also has smaller carbon foot print and lower operating cost. Implementation of Ultra Violet (UV) disinfection system for secondary treated wastewater. This is preferred over the conventional chlorination system which has harmful side effects due to the presence of carcinogens in residual chlorine. Use of Vortex Grit Removal in Sewage Treatment Plant which is preferred over the conventional grit removal system for its high grit Stopping the loading & unloading function of Air Compressor. 75 pavement related issues like rutting, pot holes, cracking, etc. 0.34% of total turnover [C] FOREIGN EXCHANGE EARNINGS AND OUTGO: a. Board of Directors (the Board): The Directors of the Company are in a fiduciary position, empowered to oversee the management functions with a view to ensuring its effectiveness and enhancement of shareholder value. The Board also reviews and approves management's strategic plan & business objectives and monitors the Company's strategic direction. b. Executive Management Committee (EMC): The EMC plays an important role in maintaining the linkage between IC's and the Company's Board as well as in realizing inter-IC synergies and benefits across ICs. The key responsibilities of the EMC include approval of policies cutting across IC's and also at Corporate level, covering capital investments, expansions, customer and supplier synergy, Corporate Social Responsibility (CSR) and reviewing the consolidated financials and budgets before they are presented to the Company Board. 77 E. 78 C. Group Executive Chairman (GEC): d. e. The GEC is the Chairman of the Board and the Executive Management Committee. His primary role is to provide leadership to the Board and the Corporate Management for realizing the approved strategic plan and business objectives. He presides over the Board and the Shareholders' meetings. The GEC provides leadership and devotes his full attention to certain core actions which include, inter alia, focus on restructuring, mentoring of senior executives, succession planning and corporate governance. He is the interface for critical Government entities and major customers of the Company and Group Companies. He also provides support to the Company and its Group Companies, wherever necessary. Executive Directors (ED)/Senior Management Personnel: ROLES OF VARIOUS CONSTITUENTS OF CORPORATE GOVERNANCE IN THE COMPANY The Executive Directors, as members of the Board, along with the Senior Management Personnel in the Executive Management Committee, contribute to the strategic management of the Company's businesses within Board approved direction and framework. They assume overall responsibility for strategic management of business and corporate functions including its governance processes and top management effectiveness. Non-Executive Directors (NED)/Independent Directors: f. Independent Company Board (IC Board): As a part of Lakshya 2016, the Company developed an Organisation Structure to include Hybrid Holding Company. Accordingly, 10 Independent Companies (ICs) (not legal entities) were created. These ICs are managed by their internal "Board" comprising of Senior Executives, Non-Executive Director/Independent Director of the Company's Board and 2-3 Independent external Members. This structure has enabled the Company to empower people and achieve substantial growth in the business. Looking to the opportunities in International market, especially in GCC countries, Company took an additional initiative of developing the structure, processes and leadership specifically in GCC countries. BOARD OF DIRECTORS a. Composition of the Board: The Company's policy is to have an appropriate mix of Executive, Non-Executive & Independent Directors. As on March 31, 2016, the Board comprised of the Group Executive Chairman, the Deputy Managing Director & President, 4 Executive Directors, 4 Non-Executive Directors (3 representing financial institutions) and 10 Independent Directors. The composition of the Board, as on 31st March, 2016, is in conformity with the provisions of the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 in this respect. b. Meetings of the Board: The Meetings of the Board are generally held at the Registered Office of the Company at L&T House, Ballard Estate, Mumbai - 400 001 and also if necessary, in locations, where the Company operates. The Meetings of the Board have been held at regular intervals with a time gap of not more than 120 days between two consecutive Meetings. During the year under review, 9 meetings were held on April 3, 2015, April 4, 2015, May 2, 2015, May 30, 2015, May 31, 2015, July 31, 2015, September 21, 2015, October 30, 2015 and January 29, 2016. The Independent Directors held two meetings during the financial year on July 30, 2015 and September 21, 2015 primarily to discuss succession planning and functioning of the ICs and the IC Boards. The Independent Directors also met on April 11, 2016 to discuss the performance evaluation of the Board, Committees, Chairman and the individual Directors. The Company Secretary prepares the agenda and the explanatory notes, in consultation with the Group Executive Chairman and circulates the same in advance to the Directors. Every Director is free to suggest The Non-Executive Directors/Independent directors play a critical role in enhancing balance to the Board processes with their independent judgment on issues of strategy, performance, resources, standards of conduct, etc., besides providing the Board with valuable inputs. Plant) to meet specific application requirement for crushing. The four-tier governance structure, besides ensuring greater management accountability and credibility, facilitates increased autonomy to businesses, performance discipline and development of business leaders, leading to increased public confidence. (iii) Strategy & Operational Management – by the Independent Company Boards of each Independent Company (IC) comprising of representatives from the Company Board, Senior Executives from the IC and independent members. crore 2015-16 Foreign Exchange earned 11089.03 Foreign Exchange saved/deemed 916.28 exports Total 12005.31 Foreign Exchange used 11284.10 (iv) Operational Management - by the Business Unit (BU) Heads. LARSEN & TOUBRO A. CORPORATE GOVERNANCE B. Corporate Governance is a set of principles, processes and systems which govern a company. The elements of Corporate Governance are independence, transparency, accountability, responsibility, compliance, ethics, values and trust. Corporate Governance enables an organization to perform efficiently and ethically generate long term wealth and create value for all its stakeholders. The Company believes that sound Corporate Governance is critical for enhancing and retaining investor trust and your Company always seeks to ensure that its performance goals are met accordingly. The Company has established systems and procedures to ensure that its Board of Directors is well informed and well equipped to fulfill its overall responsibilities and to provide management with the strategic direction needed to create long term shareholders value. The Company has adopted many ethical and transparent governance practices even before they were mandated by law. The Company has always worked towards building trust with shareholders, employees, customers, suppliers and other stakeholders based on the principles of good corporate governance. COMPANY'S CORPORATE GOVERNANCE PHILOSOPHY The Company's essential character revolves around values based on transparency, integrity, professionalism and accountability. At the highest level, the Company continuously endeavors to improve upon these aspects on an ongoing basis and adopts innovative approaches for leveraging resources, converting opportunities into achievements through proper empowerment and motivation, fostering a healthy growth and development of human resources to take the Company forward. C. THE GOVERNANCE STRUCTURE D. The Company has four tiers of Corporate Governance structure, viz.: (i) Strategic Supervision - by the Board of Directors comprising the Executive Directors, Non-Executive Directors and Independent Directors. (ii) Executive Management - by the Corporate Management comprising of the Group Executive Chairman, the Deputy Managing Director, 4 Executive Directors, 1 Non-Executive Director, 3 Senior Managerial Personnel and one Advisor to the Chairman. Annexure 'B' to the Directors' Report Development of new range of products (Sand . • Development of newer variants of Wheel Loader and Compactors designed for ease of use, simpler handling and easier maintenance. Development of 5.5 M Sensor Asphalt Paver Development. Development of Pneumatic Tire Roller & Skid Steer Loaders. Indigenization of various components for Rubber Processing Machinery by designing, developing specifications and adapting to international conditions. Mechanistic and volumetric evaluation of asphalt layers of major highway projects in India. LARSEN & TOUBRO . • • • • • Tyre building machines for Off the road tyres. Large Truck radial Multi stage tire building Tyre plant Automation Systems. • . • Development of cement grouted bituminous macadam for high speed corridors, expressways, aprons and ports. Development of emulsion based cold mixes with recycled aggregates for base and binder courses in highway projects. Industrial scale production of stockpile, all weather cold pot-hole mix for infra project sites. Development of special testing facility for preformed fillers in rigid pavements. Development of alternate curing techniques for conventional concrete. Development air cured, no cement Geo-polymer concrete for structural applications. Development of high strength (M100) Self- Consolidating Concrete. Development of low cement and impermeable Plastic concrete for Dam structures. . Development of special testing facility for water proofing sealants. • Introduction of "SMART Comm" solution. Introduction of 52" Hydraulic Tire Curing Press, 45" Tire Curing Press (TCP), 104" Tire Curing Press and 42" Bladder Curing Press. Tie-up with Italian company for L&T branded Solar inverter. Solar Panels installed at project sites. Power generation through Solar Roof top PV installation. Annual Power Generation through 1.5 KW solar system (KWHR) & Solar Stand-alone system Shift towards usage of power generated through windmill power (iii) Capital investment on energy conservation equipments: • • • • Energy conservation initiatives to be taken in water circulating pumps Explore the opportunities for installation of • Strategic alignment with IOmniscient (Australian company) for its video analytics speciality. "Stand by Loss" Automation arrangement for critical plant and machinery Spread awareness campaign for water conservation in line with Energy conservation Proposal for replacing all lamps with LED for High mast towers Installation of Astronomical intelligent controller for light mast towers To replace old welding machines with new machines with inverter technology to reduce no load loss and overall consumption [B] TECHNOLOGY ABSORPTION: • (i) Efforts made towards technology absorption: Various models of semi-mobile skid mounted crushing unit (with Feeder Breaker, Roll Crusher & Impactor) have been developed to meet specific applications for crushing. . Separation of Sand by air classifier. Adaptation of mobile crushing technology. Development of new, cost-optimized meter platforms that offer better features, development and integration of modules to facilitate remote communication of meter data over Radio/GSM. Development of Pre-Paid Meters, Smart Meters, Protective Relays and Panel Meters. Local RMU manufacturing. Energy conservation in Air handling units Use of natural lights in cafeteria. Development of dry mortar for buildings. Mechanical Studies on light weight concrete for In-house 3D modelling of Traction Power System using AutoCAD software for electrical clearance study of traction system Automatic Generation of OHE Construction & Traction Supply Control Post Drawing and Bill of Material using Bentley-Power Rail V8i software thereby reduction of 50% of man-days as compared to conventional method and achieving 100% accuracy. Use of renewable energy for powering CCTV cameras, on pilot basis, by integration of solar photovoltaic modules with junction poles at Mumbai City Surveillance Project. Development of an Innovative Test Lab as part of a larger Center of Excellence for testing software applications at Mumbai. Development of printed circuit switch board for CNC Gas cutting machine & assembly of components done in-house. Indigenous development of rewinding process for High frequency grinders for AG7 Model of Fein & Bosch makes. Servicing of Chopper assembly which is a major spare in Hypertherm power source imported from Germany by replacing alternate indigenous spares. Introduction of Automatic loading system of 12m ISMC channels in Section shearing machine. Introduction of Common Heater arrangement and single stage regulator in CO2 gas manifold system to reduce the gas consumption. Implementation of Electrically adjustable inverter feed drive instead of mechanical variation system Installation of Impregnate Painting System for Timber Beam Development of De-coiling machine unloading rack opening automation. Simulation in Design through initiated adoption of the e-trax Simulation Software for design, analysis, optimization, operation & automation of AC railway traction power systems Development of Prima 12R & Prima 13 Plus machine fixed blade modified with split type to reduce the cost and material. Water consumption reduced to arrest the leakage and unwanted usage. (E,g. we reduce the water consumption 1,32,000 litres per month compare to previous year) Modified the Prima 12 R machine Bending gear intermediate gear to avoid the frequent breakdown and also reduced cost. Development of Boom Cylinder locking system in Pick and Carry crane to avoid the frequent breakdown and oil leakage. Use of Modular Construction Technology in Nuclear Power Plant Construction Modular construction technology is being adopted for the erection of 6mm thick carbon steel liner panels for IC wall and top dome lining for Kakrapar Nuclear Power Plant in Gujarat. This technology reduced the project duration leading to early commissioning. Development and use of Hinged Launching Girder in metro rail project. A segmental bridge launching girder with hinge mechanism has been developed and adopted in metro construction projects. This Launching girder is capable of erecting bridges in congested urban environment with sharp radius of curvature (radius up to 130m) without need for ground supports and thus leading to efficient design and LARSEN & TOUBRO construction with least disturbance to existing traffic flow. (ii) Benefits derived like product improvement, cost reduction, product development or import substitution: • Modification and fixing angular plates through use of triangular and rectangular rings to avoid damage. Development of indigenous cementitious grout for precast application. In-house Ballast less track design being successfully implemented. Developing in-house design of 70m high reinforced earth wall for Kannur International Airport project. structural application. Development of polymer modified mortar for multilevel carparks. Mechanical studies on Grouted bar coupler systems. Mechanical studies on special Macalloy and FRP Rebars. Development of SCC piles for solar power fields Development of smart measuring system for application in construction sites. Development of precast sandwich panels for buildings Seismic qualification tests on different types of horizontal connections of precast shear wall panels using splice sleeve coupler and corrugated Gl dowel tubes. Horizontal connection system with stretchable PVC hose for horizontal connection of shear wall panels. Project scale production and application of pumpable dry cement mortar at New Delhi. Use of special economical mix design of cold mix with RAP as a substitute of conventional DBM layer in Odisha Project. Mechanization of track laying implemented for faster progress of work and better quality with reduced workforce Use of in-house developed cold pot-hole mix instead of proprietary products for pavement rectification works in the CMRL project site after the Chennai Floods. Use of impermeable plastic concrete in Dam project, Andhra Pradesh. Release of a comprehensive handbook on precast construction for buildings to promote mass buildings with latest, time and cost effective precast concrete technology. Rectification of distressed concrete structure due to chemical fumes through special SCC. Application of light weight concrete in institutional buildings. Combustion air Blower control through Drive at Galvanizing by replacing the starter with drive control (VFD) so as to adjust motor speed according to the requirements. Magnetic resonators - for Streamlining LPG flow and reducing the consumption (at galvanizing) through Installation of Magnetic resonators in order to increase the combustion Efficiency of Fuel (LPG). Testing of a tower of height 101.3 metres and voltage rating of 380kV for a utility client in Saudi Arabia which stands as the tallest tower tested in India as on date. Installation of Pressure Transducer in Airline through Pressure Transducer and VFD control Air Pressure by modifying the electrical circuit, utilizing feedback of Transducer to control the RPM of Motor through VFD and maintaining 73 74 constant line pressure of 6 bar in Airline by controlling the Motor RPM. Automatic air fuel ratio & temperature control of galvanizing furnace through Human Machine Interface (HMI) system which comprise automatic LPG flow control valve, VFD controlled Combustion Air Blower, VFD controlled Flue Gas Blower & Temperature sensors Use of in-house developed self-compacting concrete in pile foundations of major 3 solar power projects of Tamil Nadu and Andhra Pradesh. Use of Emulsion based cold mixes with Reclaimed Asphalt Pavement materials as they are more environmental friendly over conventional bituminous mixes. 2015-16 Annual General Meeting held on August 22, 2014: * Investor queries shown outstanding as on March 31, 2016 have been subsequently resolved. The substantial increase in number of queries is on account of the Company's repeated reminders to shareholders regarding unclaimed shares and dividends. The Board has delegated the powers to approve transfer of shares to a Share Transfer Committee of Executives comprising of four Senior Executives. This Committee held 48 Meetings held during the year are expressed as number of meetings eligible to attend. @ceased to be a member w.e.f. 26.08.2015 % appointed as a member w.e.f. 01.10.2015 G. OTHER INFORMATION a) Directors' Familiarisation Programme: All our directors are aware and are also updated as and when required, of their role, responsibilities & liabilities. LARSEN & TOUBRO The Company holds Board meetings at its registered office and also if necessary, in locations, where it operates. Site/factory visits are organized at various locations for the Directors. The internal newsletters of the Company, the press releases, etc. are circulated to all the Directors so that they are updated about the operations of the Company. This information is also available on the website of the Company www.larsentoubro.com. b) Information to directors: The Board of Directors has complete access to the information within the Company, which inter alia, includes items as mentioned on Pages 80 to 81 in this Annexure to the Directors' Report. Presentations are made regularly to the Board/ NRC/Audit Committee (AC) (minutes of AC, NRC, SRC and CSR Committee are circulated to the Board), where Directors get an opportunity to interact with senior managers. Presentations, inter alia, cover business strategies, management structure, HR policy, management development and succession planning, quarterly and annual results, budgets, treasury policy, review of Internal Audit, risk management framework, operations of subsidiaries and associates, etc. Independent Directors have the freedom to interact with the Company's management. Interactions happen during Board/Committee meetings, when senior company personnel are asked to make presentations about performance of their Independent Company/Business Unit, to the Board. Such interactions also happen when these Directors meet senior management in IC meetings and informal gatherings. c) Risk Management Framework: Please refer to Page 66 of the Board Report. d) Vigil Mechanism/Whistle Blower Policy : Please refer to Page 69 of the Board Report. e) Statutory Auditors: f) Please refer to Page 70 of the Board Report. Code of Conduct: The Company has laid down a Code of Conduct for all Board members and senior management personnel. The Code of Conduct is available on the website of the Company www.larsentourbo.com. The declaration of Group Executive Chairman is given below: To the Shareholders of Larsen & Toubro Limited Sub: Compliance with Code of Conduct I hereby declare that all the Board Members and Senior Management Personnel have affirmed compliance 2 2 Member Mr. D. K. Sen% 7899 7632 441 Related Mr. Vikram Singh Mehta Mr. M. V. Kotwal @ Chairperson 4 4 Member 2 2 Transmission/ with the Code of Conduct as adopted by the Board of Directors. 22 1007 3 Transfer Mr. R. Shankar Raman Member 4 4 Demat/Remat 2 64 66 0 988 Date: May 25, 2016 Place: Mumbai A. M. Naik Group Executive Chairman 4. The Company has followed all relevant Accounting Standards notified by the Companies (Accounting Standards) Rules, 2006 while preparing the Financial Statements. The Company makes presentations to Institutional Investors & Equity Analysts on the Company's performance on a quarterly basis. The same is also available on our website www.larsentoubro.com. 5. There were no instances of non-compliance, penalties, strictures imposed on the 6. Company by the Stock Exchanges on any matter related to the capital markets, during the last three years. The policy for determining material subsidiaries and related party transactions is available on our website www.larsentoubro. com. 7. Details of risk management including foreign exchange risk, commodity price risk and hedging activities form a part of the Management Discussion & Analysis. Please refer to pages 217 to 219 of the Annual Report. Means of communication: Financial 3. Results News Releases Official news releases are sent to stock exchanges as well as displayed on the Company's website: www.larsentoubro.com. B. Website Filing with Stock Exchanges The Company's corporate website www.larsentoubro.com provides comprehensive information about its portfolio of businesses. Section on "Investors" serves to inform and service the Shareholders allowing them to access information at their convenience. The quarterly shareholding pattern of the Company is available on the website of the Company as well as the stock exchanges. The entire Annual Report and Accounts of the Company and subsidiaries are available in downloadable formats. The entire Annual Report and Accounts of the Company will also be made available on the websites of the Stock Exchanges. Information to Stock Exchanges is now being also filed online on NEAPS for NSE and BSE Online for BSE. Annual Report Annual Report is circulated to all the members and all others like auditors, debenture trustee, secretarial auditor, equity analysts, etc. Management Discussion & Analysis Presentations made to Institutional Investors and Analysts Quarterly & Annual Results are published in prominent daily newspapers viz. The Financial Express, The Hindu Business Line & Loksatta. The results are also posted on the Company's website: www. larsentoubro.com. 174 2. Details of all related party transactions form a part of the accounts as required under AS 18 and the same are given on pages 274 to 287 of the Annual Report. i) g) General Body Meetings: The last three Annual General Meetings of the Company were held at Birla Matushri Sabhagar, Mumbai as under: Financial Year Date Time 2014-2015 September 9, 2015 3.00 p.m. 2013-2014 August 22, 2014 3.00 p.m. August 22, 2013 1. During the year, there were no transactions of material nature with the Directors or the Management or relatives or the related parties that had potential conflict with the interests of the Company. 3.00 p.m. The following Special Resolutions were passed by the members during the past 3 Annual General Meetings: Annual General Meeting held on September 9, 2015: To approve raising of capital through QIP's by issue of shares/convertible debentures/ securities upto an amount of USD 600 million or 3600 crore. To approve raising of debentures upto 6000 crore. No special resolutions were listed in the agenda for the meeting. Annual General Meeting held on August 22, 2013: • To approve raising of capital through QIP's by issue of shares/convertible debentures/ securities upto an amount of USD 600 million or 3200 crore. To approve appointment of Statutory Auditors and remuneration payable to them. 87 88 h) Disclosures: 2012-2013 Dividend the year Queries: Mr. M. M. Chitale Mr. Subodh Bhargava Mr. M. Damodaran Mr. Vikram Singh Mehta Mr. Sushobhan Sarker Mr. Adil Zainulbhai Mr. Akhilesh Gupta Mr. Bahram Vakil NIL 0.045 0.017 0.555 0.618 0.040 0.020 0.375 0.435 0.040 0.010 0.352 0.402 0.040 0.015 0.229* 0.284 0.040 0.015 0.435 0.490 0.040 0.005 0.020 0.198 0.243 0.067 0.087 Mr. Swapan Dasgupta@0.045 - Ms. Sunita Sharma 0.045 0.020 0.455 0.520 Mr. Thomas Mathew T. Mr. Subramanian Sarma NIL 0.150* 0.195 0.035* 0.005* 0.127* 0.167 0.045 0.015 0.320 0.380 0.025 0.005 0.205 0.235 NIL NIL NIL Ms. Naina Lal Kidwai Payable to respective Institutions they represent. @ceased to be a Director w.e.f May 15, 2016 * held jointly with the Institution they represent $ 84,000 stock options were granted during the year @ceased to be a Director w.e.f May 15, 2016 3) Stakeholders' Relationship Committee (SRC): i) Terms of reference: The terms of reference of the Stakeholders' Relationship Committee are as follows: Redressal of Shareholders'/Investors' complaints Allotment, transfer & transmission of Shares/Debentures or any other securities and issue of duplicate certificates and new certificates on split/consolidation/renewal etc. as may be referred to it by the Share Transfer Committee. Mr. Ajay Shankar ii) Composition: Meeting Meeting Board 100 Mr. Subramanian Sarma$ 100 Mr. Swapan Dasgupta * @ 100 Ms. Sunita Sharma 100 Mr. Ajay Shankar 100 Ms. Naina Lal Kidwai 100 The above amounts include gratuity, leave encashment, perquisite on ESOP allotment and tax on ESOPs borne by employer Committee # retired as a director w.e.f. 26.08.2015 % appointed as a Director w.e.f. 29.01.2016 * remuneration after assuming office as Director Names Notice period for termination of appointment of Deputy Managing Director and other Whole-time Directors is six months on either side. No severance pay is payable on termination of appointment. Details of Options granted under Employee Stock Option Schemes are provided on the website of the Company www.larsentoubro.com. (b) Non-Executive Directors: The details of remuneration paid/payable to the Non-Executive Directors is as follows: crore Sitting Fees for Sitting Commission Total Fees for @retired as a director w.e.f. 30.09.2015 $ appointed as a Director w.e.f. 01.10.2015 This forms a part of the Annual Report which is mailed to the shareholders of the Company. As on March 31, 2016, the Stakeholders' Relationship Committee comprised of 1 Non- Executive Director, 1 Independent Director and 1 Executive Director. During the year ended March 31, 2016, 4 meetings of the Stakeholders' Relationship Committee were held on May 30, 2015, July 31, 2015, October 30, 2015 and January 29, 2016. 4) Corporate Social Responsibility Committee (CSR Committee): i) Terms of reference: The terms of reference of the CSR Committee are as follows: (a) formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by the Company; (b) recommend the amount of expenditure to be incurred on the activities referred to in clause (a); and (c) monitor the Corporate Social Responsibility Policy of the Company from time to time. ii) Composition: As on March 31, 2016, the CSR Committee comprised of 1 Independent Director and 2 Executive Directors. iii) Meetings: During the year ended March 31, 2016, 4 meetings of the CSR Committee were held on April 7, 2015, June 30, 2015, December 11, 2015 and March 22, 2016. The attendance of the Members at the Meetings was as follows- meetings during the year and approved the transfer of shares lodged with the Company. Particulars SEBI/Stock 1 50 49 2 Name Status No. of Exchange Shareholder No. of meetings Meetings during Attended Complaints: iii) Meetings: Opening Received Resolved Pending* Balance During the year, the Company has resolved investor grievances expeditiously except for the cases constrained by disputes or legal impediments. 85 86 The attendance of Members at the Meetings was as follows- Name Status No. of No. of meetings Meetings during Attended the year Ms. Sunita Sharma Chairperson 4 During the year, the Company/its Registrar's received the following complaints from SEBI/Stock Exchanges and queries from shareholders, which were resolved within the time frames laid down by SEBI. 2 2 2 Mr. Shailendra Roy Member 4 4 2 2 Mr. S. N. Subrahmanyan @Member Meetings held during the year are expressed as number of meetings eligible to attend. @ ceased to be a member w.e.f. 21.09.2015 # appointed as a member w.e.f. 21.09.2015 Mr. N. Hariharan, Company Secretary is the Compliance Officer. iv) Number of Requests/Complaints: Member Mr. Thomas Mathew T. The schedule of analyst/institutional investor meets and presentations made to them on a quarterly basis are displayed on the website. The Company does not have any unclaimed shares from any public issue. However certain shares resulting out of the bonus shares issued by the Company are unclaimed by the shareholders. As required under Regulation 39(4) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Company has already sent reminders in the past to the shareholders to claim these shares. These share certificates are regularly released on requests received from the eligible shareholders after due verification. The balance unclaimed share certificates will be transferred to the Unclaimed Suspense Account as required under the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 shortly. Mr. Shailendra Roy 9 3 Mr. D. K. Sen 1 Mr. M. V. Satish Mr. M. M. Chitale 9 3 4 Mr. Subodh Bhargava 7 3 1 Mr. M. Damodaran 4 5 2 Mr. Vikram Singh Mehta 6 1 - Mr. Sushobhan Sarker 2 2 7 9 Mr. R. Shankar Raman 3 GEC Group Executive Chairman ED - Executive Director NED - Non-Executive Director 1. None of the above Directors are related inter-se. 2. # retired as a director w.e.f. 26.08.2015 * Whole-time Director upto 30.09.2015 and appointed as DMD w.e.f. 01.10.2015 % appointed as a Director w.e.f. 29.01.2016 ! ceased to be a Director w.e.f 15.05.2016 - DMD Deputy Managing Director & President - CEO & MD - Chief Executive Officer and Managing Director ID - Independent Director 79 88 80 As on March 31, 2016, the number of other Directorships & Memberships/Chairmanships of Committees of the Board of Directors are as follows: Name of Director No of other company Directorships No. of Committee Membership No. of Committee Chairmanship Mr. A. M. Naik 3 Mr. S. N. Subrahmanyan None of the Directors hold the office of director in more than the permissible number of companies under the Companies Act, 2013 or Regulation 25 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. Mr. Adil Zainulbhai 7 2 The Board of Directors has complete access to the information within the Company, which inter alia includes - Annual revenue budgets and capital expenditure plans • Quarterly results and results of operations of ICs and business segments • Financing plans of the Company Minutes of meeting of Board of Directors, Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee, Corporate Social Responsibility Committee and Risk Management Committee • Details of any joint venture, acquisitions of companies or collaboration agreement • Quarterly report on fatal or serious accidents or dangerous occurrences, any material effluent or pollution problems . Any materially relevant default, if any, in financial obligations to and by the Company or substantial non-payment for goods sold or services rendered, if any Any issue, which involves possible public or product liability claims of substantial nature, including any Judgment or Order, if any, which may have strictures on the conduct of the Company F. LARSEN & TOUBRO Developments in respect of human resources Information to the Board: Compliance or Non-compliance of any regulatory, statutory nature or listing requirements and investor service such as non-payment of dividend, delay in share transfer, etc., if any The important decisions taken at the Board/ Committee meetings are communicated to the concerned departments/ICs promptly. An Action Taken Report is presented to the Board. BOARD COMMITTEES The Board currently has 5 Committees: 1) Audit Committee, 2) Nomination & Remuneration Committee, 3) Stakeholders' Relationship Committee, 4) Corporate Social Responsibility Committee and 5) Risk Management Committee. The terms of reference of the Board Committees are governed by relevant legislation and/or determined by the Board from time to time. The Board is responsible for constituting, assigning and co-opting the members of the Committees. The meetings of each Board Committee are convened by the Company Secretary in consultation with the respective Committee Chairman. The role and composition of these Committees, including the number of meetings held during the financial year and the related attendance are provided below. 1) Audit Committee i) Terms of reference: and scope of audit as well as post-audit discussion to ascertain any area of concern. Reviewing, with the management, the annual financial statements and the audit report before submission to the board for approval, with particular reference to: 1. Matters required to be included in the Directors' Responsibility Statement to be included in the Board's report in terms of sub- section (5) of Section 134 of the Companies Act, 2013 2. Changes, if any, in accounting policies and practices and reasons for the same d. Post-meeting internal communication system: ^ appointed as a Director w.e.f. 01.03.2016 The Committee Chairmanships/Memberships are within the limits laid down in Regulation 26 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. . 2 Mr. Akhilesh Gupta 1 Mr. Bahram Vakil 5 4 Mr. Swapan Dasgupta@ 1 1 Mrs. Sunita Sharma 6 1 Committee memberships include memberships of Audit Committee and Stakeholders' Relationship Committee in all public limited companies (whether listed or not) and excludes private limited companies, foreign companies and Section 8 companies. 2 4 2 Mr. Ajay Shankar 1 1 Mr. Subramanian Sarma Ms. Naina Lal Kidwai 1 2 - 2 C. @ ceased to be a Director w.e.f May 15, 2016 Mr. Thomas Mathew T. & appointed as a Director w.e.f. 19.08.2015 @retired as a director w.e.f. 30.09.2015 $ appointed as a Director w.e.f. 01.10.2015 2. Representing equity interest of SUUTI Note: 1. Representing equity interest of LIC ΝΟ ED 9 9 YES Mr. Shailendra Roy ED 9 9 YES Mr. D. K. Sen $ ED 8 2 NA Mr. M. V. Satish % ED 1 1 NA Mr. M. M. Chitale ID 9 9 YES Mr. Subodh Bhargava 2 ID 9 YES LARSEN & TOUBRO inclusion of items on the agenda. The Board meets at least once every quarter, inter alia, to review the quarterly results. Additional Meetings are held, when necessary. Presentations are made on business operations to the Board by Independent Company/Business Units. Senior management personnel are invited to provide additional inputs for the items being discussed by the Board of Directors as and when necessary. The Minutes of the proceedings of the Meetings of the Board of Directors are noted and the draft minutes are circulated amongst the Members of the Board for their perusal. Comments, if any, received from the Directors are also incorporated in the Minutes, in consultation with the Group Executive Chairman. Thereafter the minutes are signed by the Chairman of the Board at the next meeting. The following is the composition of the Board of Directors as on March 31, 2016. Their attendance at the Meetings during the year and at the last Annual General Meeting is as under: Name of Director Category Attendance at Meetings held during the year No of Board Meetings last AGM attended Mr. A. M. Naik Mr. M. V. Kotwal # DMD Mr. S. N. Subrahmanyan* GEC 9 9 YES Mr. K. Venkataramanan @ CEO & MD 7 6 YES ED 6 6 Mr. R. Shankar Raman UNCLAIMED SHARES 9 NO Mr. Swapan Dasgupta (Note 2)! NED 9 Mrs. Sunita Sharma (Note 1) NED Mr. Thomas Mathew T. ID Mr. Ajay Shankar ID Mr. Subramanian Sarma & NED 2253 ΝΟ 9 127253 9 NO YES 9 YES YES NO Ms.Naina Lal Kidwai^ ID ΝΑ Meetings held during the year are expressed as number of meetings eligible to attend. 9 9 4 ID Mr. M. Damodaran ID 9 8 NO Mr. Vikram Singh Mehta ID 9 8 YES Mr. Sushobhan Sarker (Note 1) NED 9 9 YES Mr. Adil Zainulbhai ID 9 8 YES Mr. Akhilesh Gupta ID 9 8 NO Mr. Bahram Vakil 8 4,441 Mr. Ajay Shankar # 200 Minutes of the Audit Committee Meetings are circulated to the Board of Directors and discussed, if necessary. ii) Composition: The Audit Committee of the Board of Directors was formed in 1986 and as on March 31, 2016 comprised three Independent Directors and 1 Non-Executive Director. iii) Meetings: During the year ended March 31, 2016, 8 meetings of the Audit Committee were held on April 11, 2015, May 29, 2015, July 31, 2015, October 29, 2015, November 7, 2015, January 28, 2016, February 15, 2016 and March 18, 2016. In addition to the above, the members of the Audit Committee also meet without the presence of management. The attendance of Members at the Meetings was as follows: Name Mr. M. M. Chitale Mr. M. Damodaran Status No. of No. of meetings Meetings during Attended the year Chairperson 8 8 Member 8 8 Member 3 2 Member 8 6 Member 5 0 Mr. Akhilesh Gupta # Mr. Sushobhan Sarker Mr. Bahram Vakil @ Meetings held during the year are expressed as number of meetings eligible to attend. matters. # ceased to be a member w.e.f. 31.07.2015 @ appointed as a member w.e.f.31.07.2015 All the members of the Audit Committee are financially literate and have accounting or related financial management expertise. Monitoring the end use of funds raised through public offers and related Scrutiny of inter-corporate loans and investments. 3. Major accounting entries involving estimates based on the exercise of judgment by management 5. Compliance with listing and other legal requirements relating to financial statements 6. Disclosure of any related party transactions 7. Qualifications in the draft audit report. The role of the Audit Committee includes the following: Oversight of the company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible. Recommending to the Board, the appointment, re-appointment, terms of appointment and, if required, the replacement or removal of the statutory auditor and the fixation of audit fees. Approval of payment to statutory auditors for any other services rendered by the statutory auditors. Discussion with statutory auditors before the audit commences, about the nature Reviewing, with the management, the quarterly financial statements before submission to the board for approval. Reviewing, with the management, the statement of uses/application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document/prospectus/notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter. Reviewing, with the management, performance of statutory and internal 81 82 • • auditors, and adequacy of the internal control systems. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage, frequency and performance of internal audit. Discussion with internal auditors about any significant findings and follow up there on. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors. To review the functioning of the Whistle Blower Mechanism. Approval of appointment of CFO (i.e., the Whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience & background, etc. of the candidate. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee. The recommendation for appointment, remuneration and terms of appointment of cost auditors of the company. Review and monitor the auditor's independence and performance, and effectiveness of audit process. Review the management discussion and analysis of financial condition and results of operations. Approval or any subsequent modification of transactions of the company with related parties. • Valuation of undertakings or assets of the company, wherever necessary. Evaluation of internal financial controls and risk management systems. LARSEN & TOUBRO The Whole-time Director & Chief Financial Officer and Internal Auditor are permanent invitees to the Meetings of the Audit Committee. The Company Secretary is the Secretary to the Committee. iv) Internal Audit: 7 6 Mr. Thomas Mathew Member 6 6 T. $ Names Salary Perquisites Retirement Commission crore The details of remuneration paid/payable to the Executive Directors is as follows: (a) Executive Directors: vi) Details of remuneration paid/payable to Directors for the year ended March 31, 2016: As required by the provisions of Regulation 46 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the criteria for payment to Independent Directors/Non-Executive Directors is made available on the investor page of our corporate website www.larsentoubro.com Performance Evaluation Criteria for IDs: The performance evaluation questionnaire covers specific criteria with respect to the Board & Committee composition, structure, culture, effectiveness of the Board and Committees, functioning of the Board and Committees, information availability, etc. It also contains specific criteria for evaluating the Chairman and individual Directors. In the case of nominees of Financial Institutions, the commission is paid to the Financial Institutions. The commission to Independent Directors/ Non-Executive Directors is distributed broadly on the basis of their attendance, contribution at the Board, the Committee meetings, Chairmanship of Committees and participation in IC meetings. The Independent Directors/Non-Executive Directors are paid remuneration by way of commission & sitting fees. The Company pays sitting fees of 50,000 per meeting of the Board and 25,000 per meeting of the Committee to the Independent Directors/ Non-Executive Directors for attending the meetings of the Board & Committees. The commission is paid subject to a limit not exceeding 1% p.a. of the profits of the Company as approved by shareholders (computed in accordance with Section 197 of the Companies Act, 2013). The Company pays remuneration to Executive Directors by way of salary, perquisites & retirement benefits (fixed components) & commission (variable component), based on recommendation of the NRC, approval of the Board and the shareholders. The commission payable is based on the performance of the business/ function as well as qualitative factors. The commission is calculated with reference to net profits of the Company in the financial year subject to overall ceilings stipulated under Section 197 of the Companies Act, 2013. The remuneration of the Board members is based on the Company's size & global presence, its economic & financial position, industrial trends, compensation paid by the peer companies, etc. Compensation reflects each Board member's responsibility and performance. The level of compensation to Executive Directors is designed to be competitive in the market for highly qualified executives. v) Remuneration Policy These certificates have been placed on the website of the Company. All the Independent Directors give a certificate confirming that they meet the "independence criteria" as mentioned in Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The Independent Directors comply with the definition of Independent Directors as given under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. While appointing/re-appointing any Independent Directors/Non-Executive Directors on the Board, the NRC considers the criteria as laid down in the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. in and contribution to the activities of the Board by the Director. 84 33 83 While evaluating the suitability of a Director for re-appointment, besides the above criteria, the NRC considers the past performance, attendance & participation While screening, selecting and recommending to the Board new members, the NRC ensures that the Board is objective, there is absence of conflict of interest, ensures availability of diverse perspectives, business experience, legal, financial & other expertise, integrity, managerial qualities, practical wisdom, ability to read & understand financial statements, commitment to ethical standards and values of the Company and ensure healthy debates & sound decisions. Member Mr. Adil Zainulbhai 7 7 The Company has an internal corporate audit team consisting of Chartered Accountants, Cost Accountants and Engineers. Over a period of time, the Corporate Audit department has acquired in-depth knowledge about the Company, its businesses, its systems & procedures, which knowledge is now institutionalized. The Company's Internal Audit function is ISO 9001:2008 certified. The Head of Corporate Audit Services is responsible to the Audit Committee. The staff of Corporate Audit department is rotated periodically. From time to time, the Company's systems of internal controls covering financial, operational, compliance, IT applications, etc. are reviewed by external experts. Presentations are made to the Audit Committee on the findings of such reviews. 2) Nomination & Remuneration Committee (NRC) Terms of reference: i) . . • Identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down by the Committee; Recommend to the Board appointment and removal of such persons; Formulate criteria for determining qualifications, positive attributes and independence of a director; Devise a policy on Board diversity; Formulation of criteria for evaluation of directors, Board and the Board Committees; Carry out evaluation of the Board and directors; 4. Significant adjustments made in the financial statements arising out of audit findings Recommend to the Board a policy, relating to remuneration for the Administration of Employee Stock Option Scheme (ESOS). ii) Composition: The Committee has been in place since 1999. As at March 31, 2016, the Committee comprised of 3 Independent Directors and the Group Executive Chairman. iii) Meetings: During the year ended March 31, 2016, 7 meetings of the Nomination & Remuneration Committee were held on April 3, 2015, May 30, 2015, July 31, 2015, September 21, 2015, October 30, 2015, January 29, 2016 and February 23, 2016. The attendance of Members at the Meetings was as follows: Name Mr. Bahram Vakil Status No. of No. of meetings Meetings during Attended the year Mr. Subodh Bhargava Mr. A. M. Naik Chairperson Member directors and key managerial personnel (KMP); $ appointed as a member w.e.f. 03.04.2015 iv) Board Membership Criteria: Meetings held during the year are expressed as number of meetings eligible to attend. 38.85 2.77 Mr. R. Shankar Raman No. of Shares held Names Details of shares and convertible instruments held by the Independent Directors/Non-Executive Directors as on March 31, 2016 are as follows: 9.90 3.06 7.53 1.63 Mr. S. N. Subrahmanyan 15.35 0.84 8.58 1.38 Mr. M. V. Kotwal# Salary Perquisites Retirement Commission crore Names LARSEN & TOUBRO 3.37 22.43 17.96 5.75 3.58 14.73 Mr. K. Venkataramanan@ Mr. A. M. Naik Benefits Benefits 3.23 1.82 6.90 Mr. Akhilesh Gupta 100 Mr. Adil Zainulbhai 2.18 Mr. Sushobhan Sarker * 885 Mr. Vikram Singh Mehta 0.73 0.24 0.05 0.15 Mr. M. V. Satish%* 150 Mr. M. Damodaran 150 0.69 2.11 Mr. Shailendra N. Roy 1.15 1.47 4.40 Mr. M. M. Chitale Mr. Subodh Bhargava 3.03 750 Mr. D. K. Sen$* 0.44 0.06 1,629 Management Services Engineering & Construction Plant & Equipment Defense and Government • Testing • Infrastructure Solutions • Enterprise Development Maintenance • Application Service Offerings (Horizontals) Projects Others & Aerospace • Consumer & Others • Auto, Aero High-Tech, Media & Entertainment Retail & Pharma Packaged Goods, Process • Energy and • Insurance and Financial Services • Banking • Application - Automotive Digital technologies are fundamentally changing the way the world lives and works. While these trends may be less visible in the engineering, construction and manufacturing sectors, the Company has decided to move forward in this space. Digitalization has been identified as a core theme in our Strategic Plan, and a major program to digitize processes is already underway in our Construction business. These will be progressively extended across the Company, with the aim of achieving higher efficiencies with the resultant favourable impacts on revenues and profitability. Horizontals Mobility ⚫ LTTS LLC Power Transmission •AL BALAGH- L&T JV (Al Rayyan) Joint Ventures • L&T Oman LLC Subsidiary • Factories Mass Housing • Affordable & • Elite Housing Residential Buildings & Factories • Public Space • Health • Airports Commercial Buildings & Airports ⚫IT, Office Space Buildings & Factories • Products Middle East ⚫ MMH- Handling • Bulk Material • Minerals & Metals • Platform Based Solutions Information Management (AIM), Enterprise Integration, • Mechanical Subsidiary Technology • L&T-Gulf • L&T-Chiyoda • PT Larsen & Toubro Hydrocarbon Engineering Indonesia • Larsen & Toubro Arabia Offshore • L&T Sapura Subsidiaries & Associates ⚫L&T Sapura Shipping • Engineering Services Fabrication • Modular • Construction Services • Larsen & Toubro ATCO Saudia • Onshore Retail • High Street (EPS, MDS, Systems • Servowatch Limited Company Saudi Arabia Malls • Integrated Retail Transit Oriented Development Commercial Buildings •Larsen & Toubro Construction Utilities) Energy & (CPG, Chemical, • Process Industry Consumer Electronics & Semiconductors • Telecom, • Medical Devices & Power) Electrical Drives (Building Automation, Machinery, Products Kuwait • Industrial Commercial Highway, (Aerospace & Rail, Automotive, Truck & Off • Transportation Verticals • L&T Overseas Projects Nigeria Limited Hydrocarbon International Limited LLC • L&T Fabrication Yard • L&T Modular • Larsen & Toubro Electromech Vehicles) Services Automation • L&T Electrical committed to total customer satisfaction and enhancing shareholder value. L&T-ites shall be an innovative, entrepreneurial and empowered team constantly creating value and attaining global benchmarks. L&T shall foster a culture of caring, trust and continuous learning while meeting expectations of employees, stakeholders and society. LARSEN & TOUBRO 0 LARSEN & TOUBRO A. M. Naik Group Executive Chairman Dear Shareholders, The Indian economy across the last year, has demonstrated a high order of resilience and remains an island of stability amidst global volatility. Meanwhile, setting its sights on the future, the Government has initiated a number of structural reforms whose positive outcomes should be tangible in long term growth. L&T shall be a professionally-managed Indian multinational, The global scenario is being coloured by protectionist policies in various hues adopted by a few developed countries. While such populist measures tend to impede trade and discourage revival of the investment cycle, it is up to international industry to address these challenges by reconfiguring its offerings and recasting its operations. In the Middle East, relatively low oil prices and consequent fiscal pressure has led to contraction of developmental spends. The Government's increased emphasis on infrastructure development through a number of flagship programmes has been widely welcomed. Infrastructure spends have a multiplier effect, enabling pan-industry growth, while contributing to an enhanced quality of life. Your Company is uniquely positioned to respond to these initiatives of the Government. Our capabilities in turnkey execution of large scale infrastructure are virtually unmatched, and we look forward to the speedy transition of these publicly-announced proposals into implementation mode. We also await progress the Government's Smart City programme. Our integrated capabilities, covering all aspects of security, mobility, intelligent infrastructure, etc., will help in maximizing the benefits of this initiative and ensure accelerated execution. Another significant area of interest for your Company is 'Make-in-India'. We aim to leverage our proven manufacturing capabilities at the upper end of the technological spectrum, to manufacture complex equipment and systems in sectors such as defence, aerospace and thermal and nuclear power. Performance Overview The Company has performed well in all key performance parameters during 2016-17. Despite facing delays in bidding and award processes, the Company bagged fresh orders of 142,995 crore recording a growth of 5%. Group Revenues at 110,011 crore grew by 8% during 2016-17 despite impediments due to demonetisation, tardy realisations from customers in some projects and delays in obtaining clearances and work-front availability. The Order Book of the Company stands at a robust level of 261,241 crore, providing good revenue visibility for 2017-18. The Company recorded an impressive growth of 43% in the Group Profit After Tax for the year at 6,041 crore. The Company successfully listed two of its subsidiaries, L&T Infotech Limited (LTI) and L&T Technology Services Limited (LTTS) during 2016-17 in its pursuit of creation and unlocking of value for the shareholders of the Company. It gives me immense pleasure to share with you that the Board of Directors of your Company has recommended a bonus issue in the ratio of 1:2 and a pre-bonus dividend of 21 per share. The corresponding dividend in the previous year was 18.25 per share. Internationalisation The Company continues to pursue international business opportunities in select geographies with a view to diversify geographical concentration risks. The Company has an established presence in GCC countries, predominantly in the Infrastructure and Hydrocarbon sectors. While capex spends in 1 the Middle East have generally contracted, some areas in hydrocarbon and core infrastructure are still witnessing investments and these provide a favourable opportunity basket for your Company's growth in the region. Apart from the GCC region, we are looking at selective prospects in North Africa, East Africa and some countries to the east like Myanmar, Malaysia and Vietnam. The unexecuted Order Book from international markets stood at 69,757 crore, which translates to 27% of the total Order Book. Digital Trends Against this backdrop, the projected GDP growth of India at around 7% is encouraging, despite being temporarily impacted by demonetisation. I believe that the medium term prospects in India are favourable and that the structural reform process will continue over the next few years, culminating in an uptick in the investment momentum. and VISION S.K. TOUBRO & Automation FZE Standalone VAVE, MES, CAE) • Embedded & Application Engineering (Systems & Platform Software, Application Software, ISV, Verification & Validation, System Integration & Engineering) ⚫ IT Enabled Manufacturing Services (Control & Automation, Asset Management H. HOLCK-LARSEN Services, PLM, Operations Management) Digital Engineering & Solutions (UBIQWeise™ IBEMS, Medical Imaging) Joint Venture • L&T Thales Partnering Growth LARSEN & TOUBRO 72nd ANNUAL REPORT 2016-2017 Manufacturing • Kana Controls c) Metro Rail Your Company has been successfully executing Metro Rail projects in multiple cities in India over the last few years and is also executing two such projects in the Middle East. The Government looks at Metro Rail networks as the ideal solution to decongest urban traffic. Metro Rail projects have been planned in a number of metro and non-metro cities in India as part of the urban development program and should provide a steady stream of growth opportunities for your Company. Talent Management and Succession Planning Independent Director MR. SUBRAMANIAN SARMA Non-Executive Director MRS. NAINA LAL KIDWAI MR. SANJEEV AGA MR. N. KUMAR Independent Director Independent Director Independent Director Company Secretary Registered Office Auditors Registrar & Share Transfer Agents Mr. N. Hariharan MR. AJAY SHANKAR L&T House, Ballard Estate, Mumbai - 400 001 "72nd ANNUAL GENERAL MEETING AT ST. ANDREW'S AUDITORIUM, SAINT DOMNIC ROAD, BANDRA WEST, MUMBAI - 400 050 ON TUESDAY, AUGUST 22, 2017 AT 3.00 P.M." 7 8 Subramanian Sarma Group Executive Chairman A M Naik CEO & Managing Director S N Subrahmanyan M V Satish SC Bhargava Shrikant Joshi Keshab Panda Sanjay Jalona T Madhavadas S Rajavel S R Subramanian AK Garg NV Venkatasubramanian Industrial M/s. Sharp & Tannan and M/s. Deloitte Haskins & Sells LLP Karvy Computershare Private Limited Machinery MR. THOMAS MATHEW T. Nominee of Life Insurance Corporation of India LARSEN & TOUBRO Board of Directors MR. A.M. NAIK MR. S.N. SUBRAHMANYAN MR. R. SHANKAR RAMAN MR. SHAILENDRA NARAIN ROY MR. D.K. SEN MR. M.V. SATISH MR. M.M. CHITALE MR. SUBODH BHARGAVA MR.M.DAMODARAN MR.VIKRAM SINGH MEHTA MR.SUSHOBHAN SARKER MR. ADIL SIRAJ ZAINULBHAI Independent Director MR. AKHILESH KRISHNA GUPTA Group Executive Chairman Deputy Managing Director & President Whole-time Director & Chief Financial Officer Whole-time Director & Senior Executive Vice President (Power, Heavy Engg. & Defence) Whole-time Director & Sr. Executive Vice President (Infrastructure) Whole-Time Director & Sr. Executive Vice President (Buildings, Minerals & Metals) Independent Director Independent Director Independent Director Independent Director Nominee of LIC Independent Director Independent Director MRS. SUNITA SHARMA Company Information Construction & Mining Machinery • Electrical Systems & Equipment • Control & Automation Subsidiaries • TAMCO Group (Medium Voltage Systems) • Henikwon Corporation • L&T Electrical L&T Realty L&T L&T Hydrocarbon Technology Engineering Services L&T Infotech Metallurgical & Material Handling Development Types: Projects & Distribution Verticals • Land Development • Joint Venture Development • Slum Rehabilitation Authority Projects Development Verticals: Integrated Mixed Use Development Residential • Elite Housing • Luxury Housing Commercial • Built to Suit Office Campuses • Offshore & Products • Metering & Protection Systems • Electrical • Rubber Processing Machinery Subsidiaries • L&T Cutting Tools •⚫ L&T Kobelco EWAC ALLOYS • Maintenance Welding • Wear Plates ⚫ Services • Construction Machinery • Mining Machinery Subsidiary • L&T Standard Products Construction Equipment & Road Making Machinery • Hydraulic Systems and Components L&T Valves Valves for • Oil & Gas • Thermal Power • Nuclear Power • Defence • Chemicals & Petrochemicals Electrical & Automation Products • Construction - 483 484 481-482 8) Realty This business, launched by your Company a few years ago, continues to deliver steady revenues and profits despite the sector being impacted by excess inventory, flat realisations and lower absorption rates. The Company's Realty portfolio comprises residential and commercial real estate development activity, mainly centred in Mumbai and development of own land parcels in Powai, Bangalore and Chennai. Demonetisation led to a major slowdown in retail real estate sales during 2016-17. The real estate segment is gradually recovering from this downturn and sale of apartments is nearly back to pre-demonetisation levels. The Company managed to close two major transactions of divestment from a residential project at Chennai and a retail mall at the Company's Seawoods project in Navi Mumbai. The Government has recently introduced legislation aimed at regulating the sector which augurs well for the business. 9) Information Technology and Technology Services (IT&TS) As mentioned earlier, the Company has successfully completed Initial Public Offerings of Larsen & Toubro Infotech Limited (LTI) and L&T Technology Services Limited (LTTS) during the year 2016-17. The exceptional gains of ₹1,709 crore from divestment of the Company's part stakes in these subsidiaries have accrued to the shareholders' funds. With the focus on client mining, talent management, enhanced utilisation of resources and superior service offering, these listed subsidiaries are geared to face global headwinds and increasing protectionist policies in developed 4 world markets while maintaining healthy shareholder returns. 10) Financial Services This business, which was listed in 2011, continues to grow and had a loan book of 64,500 crore at the end of FY17. The business has adopted prudential norms for provisioning of the non-performing assets and is taking efforts to reduce the cost-to-income ratio. It is focusing on portfolio rationalisation, right-sizing of manpower, and improving the quality of assets in an effort to enhance Return on Equity. 11) Development Projects Your Company currently has a portfolio of concession assets in the areas of roads, power generation & transmission, a container port and a metro rail. While the container port, a thermal power plant and most of the road projects are operational, the metro rail project at Hyderabad is under construction. This is the largest 'transit-oriented- development' project in the country and execution is progressing satisfactorily. The project is likely to be fully commissioned in FY19. As a part of its Lakshya objectives, the Company is evaluating various options of divestment and restructuring of the road concessions business. Strategic Plan Your Company has embarked on its five year strategic plan (Lakshya) for achieving improvement in key performance parameters leading to enhanced Return on Equity over the plan period. The strategic plan lays emphasis on profitable growth, harnessing emerging opportunities in defence, nuclear power and smart cities, productivity improvements through digitalisation, reduction in working capital levels and unlocking of shareholder value through divestments of non-core businesses. The Company completed the first year of its Lakshya Plan in 2016-17 and is on course to achieving various objectives of the plan. The Company divested its General Insurance business during 2016-17 in line with its stated objective of exiting non-core businesses. Apart from recording improved profitability, the Company has achieved higher Return on Equity also aided by reduction of net working capital levels. Over the next few months, I will be handing over my executive charge to the CEO & MD designate Mr. S.N.Subrahmanyan and will continue as Chairman of the Group. 7) Electrical & Automation (E&A) The Electrical & Automation business recorded stable performance in 2016-17 despite sluggish industrial demand, challenges posed by liquidity crunch and aggressive competition. The Company presents an array of best- in-class low-voltage and medium- voltage products which provide a competitive edge in the domestic market. The Electrical business has launched new products to cater to the theme of Smart Cities. It focuses on renewable and alternative energy generation by introduction of smart/ premium meters, solar solutions, a new range of Moulded Case and Modular Circuit Breakers, and a contemporary range of Bus Bar trunking solutions. With investment in R&D efforts, a number of patents to its name, a country-wide network of distributors, presence in the Middle East region through subsidiary companies and focus on operational excellence, the business expects to continue delivering profitable growth. Before I conclude, I would like to acknowledge the contributions made by team L&T and thank our customers, vendors and other stakeholders who made it possible for the Company to maintain its growth momentum and improve financial performance. I also take this opportunity to thank my fellow Board Members for their steadfast support and the confidence they have reposed in our pursuit of delivering high quality, sustainable growth. Ammail A.M.Naik Group Executive Chairman LARSEN & TOUBRO 5 Contents 6 Company Information 7 Organisation Structure 8-9 Leadership Team 10 L&T Nationwide Network & Global Presence Thank You 12-13 global over-capacity in the process plant equipment segment. Nuclear power sector is still grappling with the aftermath of the Fukushima accident, though India remains committed to the expansion of nuclear power installed capacity for developing a clean source of energy. The issues of Civil Liability for Nuclear Damages are now being resolved and would pave the way for establishing new nuclear power plants in the near future. The Company is well placed to harness the opportunities when they come up. 6) Heavy Engineering Your Company views its people as central to the success of its journey of value creation. Accordingly, our Human Resources policy focuses on creating a vibrant work environment to attract and retain talent across the organisation. The Company has a 7-step Leadership Development Program which aims to build a leadership pipeline at various levels of management. Senior executives at different levels nurture second lines of leadership. As a firm believer in leading through example, I have put in place a succession plan at the apex level of your Company. I have actively mentored the Chief Executive Officer & Managing Director (CEO & MD) designate of L&T, which has resulted in seamless transition. Sustainable Development Sustainability and Social Responsibility are an integral part of the Company's business strategy. Your Company believes in sustainable utilisation of natural resources and enhancing social equity to realise its growth objectives, while creating value for stakeholders. Significant initiatives have been undertaken in reducing carbon emissions, water management and waste water discharge. Your Company's CSR programmes also focus on health, education and skill-building to contribute to a better quality of life for the needy sections of society. Total spends on CSR initiatives in 2016-17 by your Company amounted to 101 crore under eligible items as defined in the Companies Act which translate to 2% of the average annual net profits of the Company over the last 3 years. Outlook The Government is committed to introducing structural reforms to revive the investment cycle, boosting tax revenues through widening of the tax base, strengthening indigenous manufacturing and bringing about infrastructure development in rural and urban areas. Implementation of GST is expected to have far reaching effects by inducting large parts of the informal economy into the formal system, ultimately leading to increased tax revenues. Introduction of GST is considered as progressive and a step in the right direction. Your Company does not see any adverse impact due to GST implementation. The domestic economy is expected to steadily improve in the current year on the back of structural reforms and supportive monetary policy. The Government has reiterated its emphasis on infrastructure build-out in the areas of transportation, augmentation of water resources, power, affordable housing and smart cities. Increased private sector participation in the Defence business affords strong business opportunities for your Company. Various upcoming projects provide the Company with a broad perspective of the opportunity basket opening up in 2017-18. Segments within the group that hold promise in the current year include - 1) Infrastructure a) Roads The Government has kick-started major road projects and has committed significant budgetary allocations for roads and highways development in 2017-18. The Company expects this impetus 2 LARSEN & TOUBRO to gain strength, aided by increased investments in specialised bridges and tunnels. The Heavy Engineering business has been facing shrinking prospects due to muted oil prices, coupled with b) Railways Your Company has been a major partner in the Dedicated Freight Corridor program currently being piloted by the Indian Railways. The Indian Railways has planned high levels of outlay over the next few years on track modernisation, new railway lines and supporting infrastructure. Your Company will participate in those programs as and when the opportunities arise. emerging business opportunities in the areas of city surveillance, intelligent traffic management systems, smart governance systems, transport & logistics and optical fibre cabling - all of which constitute different components of smart city infrastructure. Your Company has the unique advantage of in-house domain expertise across business verticals to provide end-to- end offerings to customers and can assume the role of a Master System Integrator for the customer. - e) Water Infrastructure The Government is actively pursuing plans to improve water management systems across the country in view of falling water tables and widespread water shortages. This is giving rise to large business opportunities which your Company is well positioned to exploit. Areas of focus include water storage and supply management, effluent treatment, sewage treatment, lift irrigation and emerging opportunities in inland waterways infrastructure. 2) Thermal Power Generation The thermal power sector has been facing multiple challenges in the last few years, which is aggravated by under-utilisation of capacity, particularly in manufacturing of turbines. Strong focus on power from renewables has also led to muted awards in the thermal power space. While the Company has state-of-the-art facilities for equipment manufacturing and excellent project management capabilities, it continues to face competition for projects bid out by central and state utilities. Though some of the Company's market share has been lost to competition on aggressive pricing, the Company continues to sight reasonably large business opportunities from state and central utilities in 2017-18. The Company is also attempting to increase manufacturing capacity utilisation by engaging with our joint venture partners for increased international business. 3) Power Transmission & Distribution Domestic power distribution sector holds significant business opportunities with the thrust of the Government on augmenting and strengthening grid infrastructure at both centre and state levels. The Company is also well established in transmission & distribution projects in Middle East countries and continues to see traction in that region. The year 2017-18 holds good prospects in the area of power transmission & distribution. 4) Hydrocarbon Despite contraction of spends in the Middle East due to lower oil prices, your Company is still seeing opportunities in the areas of gas production and downstream petrochemical projects. Strong customer connect with a few selected clients in the region has yielded some significant order wins and the outlook for the business in the region is positive. The domestic market is also seeing business potential in the areas of offshore capex, refinery upgradation and expansion, new fertilizer plants, LNG re-gasification terminals and cross country pipeline jobs. The Hydrocarbon business has turned around in the year 2016-17 on the back of close-out of challenging international legacy projects, profitable execution of on-going 3 orders on hand and increased operational excellence measures undertaken by the business. The Company has built up a good Order Book and has capabilities in harnessing upcoming prospects. 5) Defence Sector Thrust on import substitution through indigenisation of defence equipment manufacture and the Make-in-India initiative is opening up the Defence sector to significantly enhanced private sector participation, facilitated by conducive policy measures. Multiple programs earmarked for domestic private sector players are being kick-started in all branches of the armed forces. Your Company is a leading player in collaborating with the Ministry of Defence in building up indigenous expertise on various defence platforms for the past many years. The Company collaborates with technology partners wherever required and is currently well poised to participate in some large programs being launched for augmentation of defence equipment for the Army and the Navy. In 2016-17, the Company also received a large order for manufacture of tracked artillery guns, the largest such order given to the private sector till date. The Company's shipyard at Kattupalli augments the ability of the Group to bid for large naval orders. Defence is a major focus area for the Company and the business expects large prospects in the coming years. d) Urban Infrastructure - Building robust urban infrastructure and providing affordable housing are major thrust areas identified by the Government. Your Company is well placed to capitalise on major opportunities in the areas of affordable housing, hospitals, office space and facilities for educational institutions. Building Smart Cities and Digital India is a major theme pursued by the Government and your Company has been at the forefront of nation building by aligning its capabilities to meet changing needs. Your Company sees Corporate Social Responsibility 14-18 Annual Business Responsibility Report (ABRR) 2016-17 41 - 56 Balance Sheet Statement of Profit and Loss Statement of changes in Equity Cash Flow Statement Notes forming part of the Financial Statements Auditors' Report on Consolidated Financial Statements Consolidated Balance Sheet Consolidated Statement of Profit and Loss Consolidated Statement of changes in Equity Consolidated Cash Flow Statement Notes forming part of the Consolidated Financial Statements Information regarding Subsidiary Companies Proxy Form 40 Shareholder's Satisfaction Survey Form 2017 236-237 238 - 239 240 241- 242 243-341 343-347 348 - 349 350-351 352-353 354-355 356-468 471 - 480 - Our Technology companies, LTI and LTTS are significant partners in this Digitalization journey for the Group and are participating in developing solutions and implementing them. 38-39 5 - 228 19-35 ⚫ EHV Substation & Power Distribution Transmission Lines ⚫ Solar International • Middle East • Africa • ASEAN Subsidiary • L&T Saudi Arabia LLC Water & Effluent Treatment • Water Supply & Distribution 229-235 • Waste Water Large Water Systems 136- 57-135 Auditors' Report Management Discussion & Analysis Directors' Report • Industrial & AGM Notice Graphs 37 Consolidated Financials - 10 Year Highlights 36 Standalone Financials - 10 Year Highlights • Water International Route Map to the AGM Venue Domestic Andhra Pradesh (Hyderabad, | Volunteering Vishakhapatnam), Maharashtra Environment Maharashtra (Mumbai, Nasik, (Kochi), Madhya Pradesh (Bhopal), (Jamshedpur, Ranchi), Kerala 3.57 Implementing agencies 0.22 3.35 3.60 Gujarat (Vadodara), Jharkhand Andhra Pradesh (Hyderabad), Health Blood donation camps 8 (Mumbai, Ahmednagar, Talegaon), Orissa (Kansbahal, Rayagada), Rajasthan (Chhabra, Banswara, Nagaur), Tamil Nadu (Kancheepuram, Chennai), West Bengal (Kolkata) Pradesh (Singrauli), Maharashtra Karnataka (Bangalore), Madhya (Faridabad), Jharkhand (Ranchi), Ranoli, Vadodara), Haryana diagnostic and curative 222.42 Implementing agencies (Vishakhapatnam), Gujarat (Surat, (Support for preventive, 204.67 17.75 220.68 Andhra Pradesh Health Community Health Initiatives 7 (Kolkata) Maharashtra (Nagpur, Pune), Rajasthan (Jaipur, Banswara, Nagur) Tamil Nadu (Coimbatore, Chennai), Uttar Pradesh In outlay expenditure (budget) on projects 2. Specify the state and district where projects or program was undertaken project is covered 1. Local Area or other which the Direct Overhead Amount Projects or Programs S. No. CSR Project or activity identified Sector in LARSEN & TOUBRO 96 96 (Bhubaneswar), West Bengal 11 Computer training for youth skill Building Gujarat (Surat) 47.00 46.89 1.14 48.03 mementing 3,536.90 3,510.61 60.94 Maharashtra (Panvel), Karnataka (Bangalore), Orissa (Cuttack), Tamil Nadu (Kanchipuram, Pulicat), Delhi (Pilkhuwa), West Bengal (Srirampore) Skill Building Andhra Pradesh (Hyderabad), Gujarat (Ahmedabad), Telangana (Ranga Reddy), Gujrat (Karamsad), Haryana (Faridabad), Karnataka (Kudgi), West Bengal (Kolkata), Madhya Pradesh (Malwa, Jabalpur), Tamil Nadu (Chennai), Uttarakhand (Rudraprayag), West Bengal (Kolkata) Construction Skill Training Institute - CSTI 10 1,050.68 Direct 975.68 75.00 981.00 Health Infrastructure support to medical centres 9 (Lucknow), West Bengal (Kolkata) 3,571.55 Direct (Nagpur), New Delhi, Orissa health awareness Pradesh (Bhopal), Maharashtra Lakh) expenditure direct or through In Cumulative Amount spent: outlay expenditure (budget) on projects project or or programs Program- (*In Lakh) wise (In Direct Overhead Amount 2. Specify the state and district where projects or program was undertaken 1. Local Area or other Projects or Programs project is covered which the S. No. CSR Project or activity identified Sector in upto to the implementing 95 1.46 26.35 28.65 487.04 Direct 19.52 467.52 504.36 (Coimbatore, Chennai), Uttar Rajasthan (Pali), Tamil Nadu (Khargone), Maharashtra (Nagpur, Talegaon), Orissa (Sundargarh), (Bangalore), Madhya Pradesh Andra Pradesh (Hyderabad), Gujarat (Vadodara), Karnataka Telangana (Ranga Reddy, Medak), Andhra Pradesh (Visakahapatnam), Assam (Guwahati), Bihar (Patna), Gujarat (Surat, Jamnagar, Surendranagar), Punjab & Haryana (Faridabad, Chandigarh), Jharkhand (East Singhbhum), Karnataka (Bangalore), Kerala (Kochi), Madhya Pradesh (Bhopal, Khandwa), Maharashtra (Mumbai, Ahmednagar, Nagpur, Talegaon), New Delhi, Orissa (Rourkela, Sundargarh, Bhubaneshwar, Sambalpur, Cuttack), Rajasthan (Jaipur, Barmer, Pali), Tamil Nadu (Coimbatore, Chennai, Cadalore, Dindugul, Pudukottai), Uttar Pradesh (Lucknow, Allahabad, Chandoli, Rampur), West Bengal (Kolkata, Darjeeling, Murshidabad, North 24 Parganas, South 24 parganas) 27.81 Direct Lakh) reporting agency* Lakh) dental, vaccinations) and 8.53 Direct 0.49 8.04 6.50 Jharkhand (Jamshedpur), Madhya Health Health Camps (general, eye, 6 to the community) treatment, counseling services AIDS awareness, detection, dialysis services, HIV/ period (* In & TB, ophthalmic consultation, planning, gynecological, services including family centers offering diagnostic 441.98 Direct 31.82 410.16 452.37 Maharashtra (Ahmednagar, Mumbai, Thane), Gujarat (Surat) (running multi-specialty Health Community Health Centres 5 Lakh) pediatric, immunization, chest project or or programs Program- In Lakh) which the project is covered Key Implementing Agencies Employee led community initiatives 20 S. No. CSR Project or activity identified Sector in 97 (Jhunjhunun) Gujarat (Vadodara), Rajasthan safety 19 programmes environment Environment Alameda Andrade 1063 8.08 0.54 agencies in (Lucknow) Jaisalmer), Tamil Nadu (Chennai, Cuddalore), Uttar Pradesh (Naguar, Jaipur, Banswara, Cumulative Amount spent: Sundergarh, Salepur), Rajasthan Maharashtra (Talegaon), New (Kochi), Madhya Pradesh (Bhopal), (Jamshedpur, Ranchi), Kerla Surendranagar), Jharkhand (Surat, Vadodara, Jamnagar, Environment Andhra Pradesh (Hyderabad, Vishakhapatnam), Haryana (Chandigarh), Gujarat 44.21 Direct 1.59 42.62 42.70 Tree plantation and environment protection 18 Ahmednagar, Talegaon), Gujarat (Vadodara), Tamil nadu (Chennai) Delhi, Orissa (Rourkela, Cuttack, 651.44 Direct In Lakh) (Mumbai, Pune, Ahmednagar, Nagpur) Gujarat (Surat, Vadodara), Orrisa (Sundergarh), Karnataka (Bangalore), Tamil Nadu period (* In Lakh) Lakh) 193.81 182.86 14.18 197.04 Direct (Chennai), West Bengal (Kolkata), Jharkhand (Jamshedpur) Total expenditure direct or through 10,022.00 500.00 10,077.00 Arpan Seva Sansthan, Seva Mandir, Watershed Organisation Trust, National Agro Foundation, Pratham Education Foundation, Save the Children, NavNirmiti Eduquality, Angel Xpress Foundation, Children Toy Foundation, Prayas Trust, St Jude India Childcare Centre, Swami Vivekananda Rural Development Society, Balamandir Kamraj Trust, Environmentalist Foundation of India, Deaf enabled foundation of India, Tanker foundation, Swami Vivekananda Youth Movement, Sankara Nethralaya Medical Research Foundation, Deendayal Foundation, Womens India Association (Adyar Cancer Institute), Charutar Arogya Mandal. 98 Employee outlay expenditure (budget) on projects project or or programs Program- (In Lakh) wise (In Direct Overhead Amount 2. Specify the state and district where projects or program was undertaken 1. Local Area or other Projects or Programs reporting agency* upto to the implementing 9,577.00 wollen clothes, raincoats etc 596.37 55.07 Greening of public spaces 43.09 Andhra Pradesh Persons with disabilities Skill building for differently abled 14 17.92 Implementing agencies 1.59 16.33 17.89 Skill Building Orissa (Raygada), Rajasthan (Jaipur), Tamil Nadu (Chennai), West Bengal (Kolkata) through vocational training Women empowerment 13 43.74 Tamil Nadu (Coimbatore, Chennai), Uttar Pradesh (Lucknow) 143.66 Implementing agencies Lakh) reporting agency* period (In upto to the implementing Cumulative Amount spent: expenditure direct or through 15.53 128.13 137.95 Skill Building Gujarat (Vadodara), Madhya Pradesh (Malwa), Maharashtra Vocational Training 12 Lakh) wise (In (Mumbai), Rajasthan (Chhabra), 638.54 3.69 47.43 Implementing agencies 17 1,202.40 Implementing agencies 86.70 1,115.70 1,329.71 Development Rajasthan (Rajsamand, Udaipur), Tamil Nadu (Coimbatore) Maharashtra (Ahmednagar), Rajasthan (Jodhpur, Barmer), Uttar Pradesh (Lucknow), Uttarakhand (Rudra Prayag) Development Programme Community Integrated Community 16 Orissa (Kansbhal, Balangir), (Vishakhapatnam), Gujarat Maharashtra (Thane, Talegaon), (Bokaro, Jamshedpur, Ranchi), Development the community (Water, Health, Sanitation, roads etc.) 973.33 Direct 48.45 924.88 937.49 Gujarat (Surat), Jharkhand Community Basic infrastructure support in 15 Nadu (Coimbatore, Chennai), West Bengal (Kolkata) (Surat), Madhya Pradesh (Bhopal), Maharashtra (Nagpur, Pune), New Delhi, Orissa (Bhubaneswar), Tamil Madhya Pradesh (Khargone), uniforms, school bags, shoes, services, awareness & camps) children- books, 8. 7. Based on our examination of the relevant records and according to the information and explanation provided to us and representations provided by management, we certify that the Company has complied with the conditions of corporate governance as specified in regulation 17 to 27, clause (b) to (i) of regulation 46(2) and paragraphs C, D and E of Schedule V of the SEBI Listing Regulations, as applicable during the year ended 31 March 2017. We state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company. Opinion We have carried out an examination of the relevant records of the Company in accordance with the Guidance Note on Certification of Corporate Governance issued by the Institute of Chartered Accountants of India ("the ICAI"), the Standards on Auditing specified under Section 143(10) of the Companies Act, 2013, in so far as applicable for the purpose of this certificate and as per the Guidance Note on Reports or Certificates for Special Purpose issued by the ICAI which requires that we comply with the ethical requirements of the Code of Ethics issued by the ICAI. We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related Services Engagements. We have examined the books of accounts and other relevant records and documents maintained by the Company for the purpose of providing reasonable assurance on the compliance with corporate governance requirements by the Company. 6. 5. 4. 3. Our responsibility is limited to examining the procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the corporate governance. It is neither audit nor expression of opinion on the financial statements of the Company. Restriction on use Auditors' responsibility 2. Management's responsibility We have examined the compliance of conditions of corporate governance by Larsen & Toubro Limited ("the Company"), for the year ended on 31 March 2017, as stipulated in regulation 17 to 27 and clause (b) to (i) of regulation 46(2) and paragraphs C, D and E of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"). 1. To the members of Larsen & Toubro Limited Independent Auditors' certificate on corporate governance 91 Membership No.038332 Partner The compliance of conditions of corporate governance is the responsibility of management. This responsibility includes the design, implementation and maintenance of internal control and procedures to ensure compliance with the conditions of corporate governance stipulated in the SEBI Listing Regulations. FIRDOSH D. BUCHIA 9. The certificate is issued solely for the purpose of complying with the aforesaid SEBI Listing Regulations and may not be suitable for any other purpose. 92 - Health may include but not limited to Education may include but not limited to education infrastructure support to educational Institutions, educational programs & nurturing talent at various levels. - Water & Sanitation - may include but not limited to watershed development, making clean drinking water available, promoting rain water harvesting, soil and moisture conservation, enhancing ground water levels by facilitating community management of water resources for improving conditions related to sanitation, health, education and livelihoods of communities through an integrated approach. The Company will primarily focus on 'Building India's Social Infrastructure' as part of its CSR programme which will include, amongst others, the following areas, viz. The Company's CSR Policy framework details the mechanisms for undertaking various programmes in accordance with Section 135 of the Companies Act, 2013 (the Act) for the benefit of the community. The CSR projects of the Company are focused on communities that are disadvantaged, vulnerable and marginalized. We strive to contribute positively to improve their standard of living; through our interventions in water & sanitation, heath, education and skill development. A brief outline of the Company's CSR policy, including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs. Mumbai, 29 May 2017 1. Annexure 'C' to the Board Report LARSEN & TOUBRO Membership No. 038332 Partner FIRDOSH D. BUCHIA by the hand of Firm's Registration No. 109982W SHARP AND TANNAN Chartered Accountants 22 CSR ACTIVITIES FOR 2016-17 community health centres, mobile medical vans, dialysis centres, general and specialized health camps and outreach programs, support to HIV/ AIDS, Tuberculosis control programs. by the hand of Mumbai, 29 May 2017 (c) We accept responsibility for establishing and maintaining internal controls for financial reporting. We have evaluated the effectiveness of internal control systems of the Company and have disclosed to the Auditors and the Audit Committee, deficiencies, if any, in the design or operation of such internal controls of which we are aware and steps taken or propose to be taken for rectifying these deficiencies. (b) There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year which are fraudulent, illegal or in violation of the Company's code of conduct. (ii) These statements present a true and fair view of the Company's affairs and are in compliance with current accounting standards, applicable laws and regulations. We have reviewed the consolidated financial statements, read with the consolidated cash flow statement of Larsen & Toubro Limited for the year ended March 31, 2017 and that to the best of our knowledge and belief, we state that; (a) (i) These statements do not contain any materially untrue statement or omit any material fact or contain statements that may be misleading; {Issue in accordance with provisions of Regulation 17(8) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015} Sub: CEO / CFO Certificate Dear Sirs, To the Board of Directors of Larsen & Toubro Limited 89 (d) We have indicated to the Auditors and the Audit Committee: stationery, sports equipments, x) Secretarial Audit as per Companies Act, 2013: Pursuant to the provisions of section 204(1) of the Companies Act, 2013, S. The Company also has adequate software and systems to monitor compliance. The secretarial department of the Company at Mumbai is manned by competent and experienced professionals. The Company has a system to review and audit its secretarial and other statutory compliances by competent professionals, who are employees of the Company. Appropriate actions are taken to continuously improve the quality of compliance. Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and the total issued and listed capital. This audit is carried out every quarter and the report thereon is submitted to the Stock Exchanges. The Audit confirms that the total Listed and Paid-up capital is in agreement with the aggregate of the total number of shares in dematerialized form and in physical form. w) Secretarial Audit as per SEBI requirements: As stipulated by SEBI, a Qualified Practicing Company Secretary carries out Reconciliation of Share Capital Audit to reconcile the total admitted capital with National Securities The Company's Secretarial Department which provides secretarial services and investor services for the Company and its Subsidiary and Associate Companies, is ISO 9001:2008 certified. v) ISO 9001:2008 Certification: covering basics of Corporate Governance as well as internal policies and compliances under Code of Conduct, Whistle Blower Policy, Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, SEBI Insider Trading Regulations, etc. Workshops were conducted during the last year to create a batch of trainers across various businesses. These trainers have in turn conducted training / awareness sessions within their business and covered almost all employees in supervisory and above cadre since last year. A similar session was also conducted for senior management by external experts on Compliance & Governance. The Company will continue to conduct such workshops/sessions on a regular basis. LARSEN & TOUBRO N. Ananthasubramanian & Co., Company Secretaries, conducts the secretarial audit of the compliance of applicable statutory provisions and the adherence of good corporate practices by the Company. SHARP & TANNAN Chartered Accountants Firm's Registration No. 109982W (i) that there were no significant changes in internal controls over financial reporting during the year; and (iii) that there were no instances of significant fraud of which we have become aware. 8. The certificate is issued solely for the purpose of complying with the Regulations and may not be suitable for any other purpose. Restriction on use 7. Based on our examination of the relevant records and according to the information and explanation provided to us and representations provided by management, we certify that the Company has implemented the Schemes in accordance with the Regulations and the resolutions passed at the General Meetings. 6. We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and related services engagements. 5. We have carried out an examination of the schemes, books of accounts and other relevant records of the Company in accordance with the Guidance Note on Reports or Certificates for Special Purpose (Revised 2016) issued by the Institute of Chartered Accountants of India ("the ICAI"), which requires that we comply with the ethical requirements of the Code of Ethics issued by the ICAI. 4. We have examined the books of accounts and other relevant records and documents maintained by the Company for the purpose of providing reasonable assurance on the implementation of the Schemes by the Company in accordance with the Regulations and the resolutions passed at the General Meetings. 3. Our responsibility is limited to examining the procedures and implementation thereof, adopted by the Company for ensuring implementation of the Schemes in accordance with the Regulations and the resolutions passed at the General Meetings. It is neither audit nor expression of opinion on the financial statements of the Company. Auditors' responsibility 2. Management is responsible for maintaining the information and documents, which are required to be kept and maintained under the relevant laws and regulations and implementing the Schemes in accordance with the Regulations and the resolutions passed at the General Meetings. (ii) the significant changes in accounting policies made during the year pursuant to adoption of accounting standards prescribed vide Companies (indian Accounting Standards) Rules, 2015 and Management's responsibility Independent Auditors' certificate on Employee Stock Option Schemes LARSEN & TOUBRO A. M. Naik Group Executive Chairman 90 Chief Financial Officer Date: May 29, 2017 Place: Mumbai R. Shankar Raman Yours sincerely, 1. We have examined Employees Stock Option Schemes ("the Schemes") of Larsen & Toubro Limited ("the Company"), books of accounts and other relevant records to determine whether the Schemes are in accordance with the rules specified under the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (as amended) ("the Regulations") and in accordance with the resolutions passed in the general meetings held on 26 August 1999, 22 August 2003 and 25 August 2006 ("the General Meetings). Governance, Technology and Innovation would be the Key enabling factors across all these verticals. Opinion 2. Composition of the CSR Committee. anganwadis run for developing programmes- Community based 2 curricular activities) Vadodara, Ahmedabad), Karnataka (Bangalore, Mysore), Maharashtra (Pune, Mumbai), New Delhi, Orissa (Kansbhal, Sundargarh), Tamil Nadu (Coimbatore, Kancheepuram, Chennai), Uttar Pradesh (Lucknow), West Bengal (Kolkata) Punjab & Haryana (Chandigarh, Faridabad), Gujarat (Surat, building, promoting extra Mathematics, capacity pre school foundation, (teachers training, innovative teaching methodology, support for English and 755.12 Implementing agencies 706.69 48.43 721.86 Education Lakh) reporting agency* period (In Lakh) upto to the implementing Cumulative Amount spent: expenditure direct or through Lakh) School support programme- Enhancing the quality of education and learning levels in government schools/ schools running for children from underprivileged backgrounds In promoting healthy and education, developing the learning levels of children at Providing infrastructure support for education (drinking water and sanitation facilities, renovation of classrooms, water proofing of school buildings, providing furniture and light fittings, e-learning facilities, upgradation of libraries, playground development) Education 4 Providing educational aids to hygienic environment for Education The detailed CSR Policy Framework is given in the Governance section on the website of the Company. Please see the link http://investors.larsentoubro.com/ Listing-Compliance.aspx. nutritional supplements (Bulandshahr) 174.22 Implementing agencies 158.33 15.89 167.27 Maharashtra (Mumbai), Orissa (Raygada), Uttar Pradesh Education par with their mainstream grades and providing 3 In Lakh) Study Centres/balwadis/ Direct Overhead 7. 6. Reasons for not spending the amount during the financial year. 93 As per table enclosed Manner in which the amount was spent in the financial year is detailed below: Nil b. The Company was required to spend crore during the financial year 2016-17. As against this mandate, the Company spent 4. 98.97 Construction Skills Training Centres and providing employability skills to women and youth. 5. The average net profit of the Company for the last three financial years 4948.63 crore. Prescribed CSR expenditure (two percent of the amount as in item 3 above). The Company was required to spend an amount of * 98.97 crore as CSR expenditure during the financial year 2016-17. Details of CSR spent during the financial year: a. Total amount to be spent for the financial year Skill Development - may include but not limited to vocational training such as skill building, computer training, women empowerment, support to ITI's, support to specially abled (infrastructure support & vocational training), outlay expenditure (budget) on projects project or or programs C. NA CSR Committee Responsibility Statement: 100.77 crore towards various activities for the benefit of the community. This exceeds the required spend by ₹ 1.8 crore. The CSR spend for FY 2016-17 is 2.04% of the average net profit under Section 135 of the Companies Act, 2013. Amount unspent, if any The CSR Committee hereby affirms that: Program- wise (In 3. Average net profit of the Company for the last three financial years. 2. Specify the state and district where projects or program was undertaken The CSR Committee of the Board comprises of one Independent Director and two Executive Directors. The Company Secretary acts as Secretary to the Committee. The present Committee comprises of Mr. Vikram Singh Mehta as Chairman, Mr. R. Shankar Raman and Mr. D.K. Sen as members and Mr. N. Hariharan as the Secretary of the Committee. project is covered which the Projects or Programs LARSEN & TOUBRO 1. Local Area or other S. No. CSR Project or activity identified Sector in The Company has duly formulated a CSR Policy Framework which includes formulation of a CSR Theme, CSR budget and roles and responsibilities of the Committee as well as the various internal committees formed for implementation of the CSR policy; 1 The activities undertaken by the Company as well as the implementation and monitoring mechanisms are in compliance with its CSR objectives and CSR policy. S. N. Subrahmanyan The Company has constituted a mechanism to monitor and report on the progress of the CSR programs; Vikram Singh Mehta Chairman CSR Committee DIN: 00041197 94 Deputy Managing Director & President DIN: 02255382 Amount f. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 ('SEBI Act'):- a. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; b. C. d. e. · Not applicable as the Company has not delisted/ proposed to delist its equity shares from any Stock Exchange during the financial year under review; h. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015; The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 - Not Applicable as the Company has not issued further capital during the financial year under review; The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014; The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client - Not Applicable as the Company is not registered as Registrar to Issue and Share Transfer Agent during the financial year under review; The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 - g. V. [Pursuant to section 204(1) of the Companies Act, 2013 and rule No.9 of the Companies (Appointment and Remuneration of Managerial Personnel)Rules, 2014] The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder; We have not verified the correctness and appropriateness of financial records and books of accounts of the Company. For S. N. ANANTHASUBRAMANIAN & CO. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 - Not applicable as the Company has not bought back/proposed to buy-back any of its securities during the financial year under review. 6. Company Secretaries S. N. ANANTHASUBRAMANIAN PARTNER C.P No: 1774 Date: May 18, 2017 Place: Thane. 101 Form No. MR-3 SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2017 To, The Members, Larsen & Toubro Limited CIN: L99999MH1946PLC004768 L&T House, Ballard Estate, Mumbai 400 001 We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Larsen & Toubro Limited (hereinafter called 'the Company'). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon. Based on our verification of the Company's books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on 31st March 2017, complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance- mechanism in place to the extent, in the manner and subject to the reporting made hereinafter: We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31st March 2017 according to the provisions of: i. The Companies Act, 2013 (the Act), the Companies Act, 1956 and the rules made thereunder; ii. The Securities Contracts (Regulation) Act, 1956 ('SCRA') and the rules made thereunder; III. iv. Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings; vi. The Company has informed that there are no laws, which are specifically applicable to the Company. vii) Whether listed company LARSEN & TOUBRO II. ii) Registration Date iii) Name of the Company iv) Category v) Sub-Category of the Company vi) Address of the Registered office and contact details viii) Name, Address and Contact details of Registrar and Transfer Agent, if any L99999MH1946PLC004768 February 7, 1946 LARSEN & TOUBRO LIMITED PUBLIC LIMITED COMPANY COMPANY HAVING SHARE CAPITAL CIN L&T HOUSE, N. M. MARG, BALLARD ESTATE, MUMBAI - 400 001 TEL: 022-67525656 FAX: 022-67525893 Karvy Computershare Pvt. Ltd. Unit: Larsen & Toubro Limited Karvy Selenium Tower B, Plot 31 & 32, Gachibowli, Financial District, Nanakramguda, Hyderabad, Telengana 500 032. - Tel (040) 6716 2222 Toll free number: 1-800-3454-001 Fax: (040) 2342 0814 PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY All the business activities contributing 10% or more of the total turnover of the Company shall be stated:- 5. The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company. services Construction of Buildings LISTED i) I. REGISTRATION AND OTHER DETAILS We have also examined compliance with the applicable provisions of the following: (i) Secretarial Standards with regard to Meetings of Board of Directors (SS-1) and General Meetings (SS-2) issued by The Institute of Company Secretaries of India; (ii) The Listing Agreements entered into by the Company with National Stock Exchange of India Limited and BSE Limited and SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015. During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above. We further report that: - • The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors including Independent Directors and Women Directors. The changes in the composition of the Board of Directors which took place during the period under review were carried out in compliance with the provisions of the Act. Adequate notice is given to all Directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent atleast seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting. All decisions of Board and Committee meetings were carried with requisite majority. We further report that based on review of compliance mechanism established by the Company and on the basis of the Compliance Certificate(s) issued by the Company Secretary and taken on record by the Board of Directors at their meeting(s), we are of the opinion that there are adequate systems and processes in place in the Company which is commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines: - • As informed, the Company has responded to notices for demands, claims, penalties, etc., levied by various statutory/regulatory authorities and initiated actions for corrective measures, wherever found necessary. We further report that during the audit period • . The shareholders at the General Meeting convened by National Company Law Tribunal, Mumbai Bench ("NCLT") on 14th March 2017, approved a Scheme of Arrangement ("Scheme") between the Company and L&T Valves Limited and their respective shareholders and Creditors for transfer of Coimbatore Undertaking (as defined in the Scheme) of the Company as a going concern to L&T Valves Limited for a consideration 43.79 Crore, by way of a Resolution requiring requisite majority. The NCLT approved the said Scheme vide their Order dated 20th April 2017. The Board of Directors at its meeting held on 28th January 2017 have approved a Scheme of Amalgamation between the Company and Spectrum Infotech Private Limited (a Wholly owned subsidiary of the Company) and their respective shareholders and Creditors. The Company is in the process of seeking necessary statutory and regulatory approvals. For S. N. ANANTHASUBRAMANIAN & CO. Company Secretaries S. N. ANANTHASUBRAMANIAN PARTNER C.P No: 1774 Date: May 18, 2017 Place: Thane 103 Annexure 'F' to the Board Report FORM NO. MGT-9 EXTRACT OF ANNUAL RETURN as on the financial year ended on March 31, 2017 [Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014] 102 Disclaimer (13.02) We believe that audit evidence and information obtained from the Company's management is adequate and appropriate for us to provide a basis for our opinion. 0.15 Nominee of Life Insurance Corporation of India Sunita Sharma^ ** 3.41 0.24 Independent Director Sanjeev Aga ## 0.84 0.06 2.02 Non-Executive Director # 2.86 0.21 Independent Director Bahram Vakil * 1.84 0.13 Independent Director SERVICES LIMITED N M MARG, MUMBAI, Swapan Dasgupta MAHARASHTRA - 400001 Thomas Mathew T. 0.38 SI. 14.23 15.56 1.11 Company Secretary N. Hariharan @ 2.86 0.21 Independent Director Naina Lal Kidwai Independent Director NIL $ NIL Non-Executive Director Subramanian Sarma @ 3.98 0.29 Independent Director Ajay Shankar @ 5.32 NIL 66 L&T TECHNOLOGY 2035, LINCOLN HIGHWAY, SUITE 0479598-9 There were 41,466 permanent employees on the rolls of Company as on March 31, 2017; D) Average percentile increase already made in the salaries of the employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in managerial remuneration: Average percentage increase made in the salaries of employees other than the managerial personnel for the year 2016-17 was 4.54% whereas there is increase in the managerial remuneration by 11.6% because a substantial portion of managerial remuneration is linked to Company performance during the financial year 2016-17. The Profit after Tax for the year 2016-17 increased by 9% directly impacting the variable component of managerial remuneration. Further, the managerial remuneration for this purpose also includes perquisite value of employee stock options exercised during the year and the encashment of accumulated past service leave but excludes gratuity and leave encashment benefits payable on retirement; E) Affirmation that the remuneration is as per the remuneration policy of the Company: It is hereby affirmed that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees. 100 LARSEN & TOUBRO Annexure 'E' to the Board Report To, The Members, Larsen & Toubro Limited C) Number of permanent employees on the rolls of Company as on March 31, 2017: CIN L99999MH1946PLC004768 Ballard Estate, Mumbai 400 001. Our Secretarial Audit Report for the Financial Year ended 31st March, 2017, of even date is to be read along with this letter. Management's Responsibility 1. It is the responsibility of the management of the Company to maintain secretarial records, devise proper systems to ensure compliance with the provisions of all applicable laws and regulations and to ensure that the systems are adequate and operate effectively. Auditor's Responsibility 2. Our responsibility is to express an opinion on these secretarial records, standards and procedures followed by the Company with respect to secretarial compliances. 3. 4. L&T House, 99 The median remuneration of employees of the Company during the financial year was ₹ 7.17 lakh. In the financial year, there was an increase of 8.85% in the median remuneration of employees; B) Percentage increase in the median remuneration of all employees in the financial year 2016-17: SUBSIDIARY 89.77 Section 2(87)(ii) SERVICES LLC # 3002, EDISON, SQUARE WEST, EDISON, NJ 08817 67 L&T THALES RR V TOWER, 7TH FLOOR, 33A, U72200TN2006PTC059421 SUBSIDIARY Ratio of remuneration of director to the median remuneration is calculated on pro-rata basis for those directors who served for only part of the financial year 2016-17 Λ Part of the remuneration has been paid to the financial institution he/she represents @ Details not given as Mr. D. K. Sen, Mr. M. V. Satish, Mr. Thomas Mathew T., Mr. Ajay Shankar and Ms. Naina Lal Kidwai were Directors for only part of the financial year 2015-16 # Details not given as Mr. Bahram Vakil was a Director for only a part of the financial year 2016-17 i.e. upto August 1, 2016 ## Details not given as Mr. Swapan Dasgupta was a Director for only a part of the financial year 2016-17 i.e. upto May 15, 2016 * Details not given as Mr. Narayanan Kumar was a director only from 27th May, 2016 ** ~ Details not given as Mr. Sanjeev Aga was a director only from 25th May, 2016 Includes encashment of accumulated past service leave 32.21 crore and perquisite value related to employee stock options exercised during the year in respect of stock options granted over the past several years by a subsidiary company - 19.01 crore. Wherever required, we have obtained the management's representation about the compliance of laws, rules and regulations and happening of events etc. Name and Description of main products / crore 1 LIMITED MAHARASHTRA - 400001 14 L&T BPP TOLLWAY LIMITED MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI U45203TN2011PLC080786 SUBSIDIARY 97.45 Section 2(87)(ii) - 600089 15 L&T CAPITAL N M MARG, MUMBAI, COMPANY LIMITED U67190MH2000PLC125653 SUBSIDIARY 66.43 Section 2(87)(ii) 100.00 Section 2(87)(ii) MAHARASHTRA - 400001 16 L&T CAPITAL MARKETS LIMITED L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, U67190MH2013PLC240261 SUBSIDIARY 66.62 Section 2(87)(ii) L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 SERVICES PRIVATE SUBSIDIARY DISTRIBUTION 6970, 6972, VIDYANAGAR SERVICES LIMITED 11 AHMEDABAD- MALIYA TOLLWAY LIMITED MARG, CST ROAD, KALINA, SANTACRUZ (EAST), MUMBAI, MAHARASHTRA - 400 098 MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI 600089 U45203TN2008PLC069211 SUBSIDIARY 97.45 Section 2(87)(ii) 12 100.00 Section 2(87)(ii) L&T ARUNACHAL U40300MH2010PLC204778 SUBSIDIARY 100.00 Section 2(87)(ii) HYDROPOWER N M MARG, MUMBAI, LIMITED MAHARASHTRA - 400001 13 L&T AVIATION L&T HOUSE, BALLARD ESTATE, U62100MH2009PTC196917 L&T HOUSE, BALLARD ESTATE, 17 L&T CASSIDIAN LIMITED L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 105 106 SI. Name of the Address of the Company CIN/GLN No Company 22 DEVIHALLI HASSAN TOLLWAY LIMITED MOUNT POONAMALLE 97.45 Section 2(87)(ii) U45203TN2010PLC075491 L&T ELECTRICAL & AUTOMATION FZE 24 L&T ELECTRICAL AND AUTOMATION SAUDI ARABIA COMPANY LIMITED LLC L&T ELECTRICALS ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI - 600089 WAREHOUSE NO. FZS2AB05 262158, JEBEL ALI FREE ZONE, DUBAI, UNITED ARAB EMIRATES MH-4, PLOT NO. 17+19, IIND INDUSTRIAL CITY, DAMMAM, P.O. BOX 77186, AL KHOBAR 31952, KINGDOM OF SAUDI ARABIA 107673 Holding/ Subsidiary/ Associate SUBSIDIARY % of Shares Applicable Section held 97.45 Section 2(87)(ii) 23 SUBSIDIARY U45203TN2011PLC083661 MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI - 600089 U29253MH2011PLC216258 SUBSIDIARY 74.00 Section 2(87)(ii) 18 L&T CHENNAI TADA TOLLWAY LIMITED MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI U45309TN2008PLC066938 SUBSIDIARY 97.45 Section 2(87)(ii) - 600089 19 L&T CONSTRUCTION EQUIPMENT LIMITED L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, U29119MH1997PLC109700 SUBSIDIARY 100.00 Section 2(87)(ii) MAHARASHTRA - 400001 20 L&T CUTTING TOOLS LIMITED L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 U28920MH1952PLC008893 SUBSIDIARY 100.00 Section 2(87)(ii) 21 L&T DECCAN TOLLWAYS LIMITED 66.62 Section 2(87)(ii) No. SUBSIDIARY PLOT NO. 177, CTS NO. 3 EWAC ALLOYS LIMITED 4 HENIKWON CORPORATION SDN. BHD 9TH FLOOR, AMBADEEP BUILDING, 14, KASTURBA GANDHI MARG, CONNAUGHT PLACE, NEW DELHI-110001 MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI L&T HOUSE, BALLARD ESTATE, N. M. MARG, MUMBAI, MAHARASHTRA - 400001 2A-03-2, LORONG BATU NILAM 4A, BANDAR BUKIT TINGGI, 41200, KLANG, SELANGOR, MALAYSIA CIN/GLN U74899DL1995PLC070704 - 600089 Holding/ Subsidiary/ Associate SUBSIDIARY 99.90 Section 2(87)(ii) U70101TN2008PTC068877 SUBSIDIARY 100.00 Section 2(87)(ii) U74999MH1962PLC012315 SUBSIDIARY 100.00 Section 2(87)(ii) 161535-W SUBSIDIARY 100.00 Section 2(87)(ii) LARSEN & TOUBRO % of Shares Applicable Section held 6 PRIVATE LIMITED CHENNAI VISION 2 Construction of Roads and Railways 3 Construction of Utility Projects NIC Code of the Product/ service 410 421 422 % to total turnover of the Company# 17.04% DEVELOPERS 24.89% # On the basis of Gross Turnover III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES 104 SI. No Name of the Company Address of the Company 1 BHILAI POWER SUPPLY COMPANY LIMITED 2 38.49% KANA CONTROLS & CONTRACTING COMPANY WLL 7 95.00 Section 2(87)(ii) PRIVATE LIMITED VADODARA, GUJARAT-390002 8 KUDGI MOUNT POONAMALLE U40106TN2012GOI111122 SUBSIDIARY 97.45 Section 2(87)(ii) TRANSMISSION ROAD, POST BOX NO. 979, SUBSIDIARY LIMITED 600089 9 L&T - GULF PRIVATE LIMITED L&T HOUSE, BALLARD ESTATE, U74140MH2008PTC177765 SUBSIDIARY 50.0002 Section 2(87)(ii) N M MARG, MUMBAI, MAHARASHTRA - 400001 10 L&T ACCESS MANAPAKKAM, CHENNAI U27100GJ2009PTC055901 49.00 Section 2(87)(i) SUBSIDIARY KESUN IRON AND STEEL COMPANY MOUNT POONAMALLE ROAD, POST BOX NO. 979, AGGREGATE LIMITED | MANAPAKKAM, CHENNAI GENERAL TRADING - 600089 OFFICE NO. 14, 5TH FLOOR, AL-FARWANIYA, BLOCK NO. 44, BLDG. NO. 6, GHASHAM FAHED AL-BASMAN, KUWAIT L&T ENERGY CENTRE, NEAR CHHANI JAKAT NAKA, SI. 12 No Name of the Company Address of the Company CIN/GLN 5 HI-TECH ROCK U14290TN2008PLC065900 PRODUCTS & Holding/ Subsidiary/ Associate SUBSIDIARY % of Shares Applicable Section held 100.00 Section 2(87)(ii) 10292 U65100MH2011PLC284632 TECHNOLOGY L&T INVESTMENT SERVICES PRIVATE LIMITED Narayanan Kumar 2810, MATHESON BLVD EAST SUITE 500, MISSISSAUGA, ONL4W 4X7 CANADA 3B, LAXMI TOWERS, C - 25, 'G' BLOCK, BANDRA - KURLA COMPLEX, BANDRA (EAST), MUMBAI-400051 U11200MH2009PLC191426 SUBSIDIARY 100.00 Section 2(87)(ii) 201326418G SUBSIDIARY 97.45 Section 2(87)(ii) 310000400714060 (JIADING) SUBSIDIARY 8 CROSS STREET, #10-00, PWC BUILDING, SINGAPORE (048424) ROOM 1100, BUILDING 2, NO.1388, XINGXIAN ROAD, JIADING DISTRICT, SHANGHAI 84.28 Section 2(87)(ii) SUBSIDIARY 84.28 Section 2(87)(ii) U67100MH2013PLC241104 SUBSIDIARY 66.62 Section 2(87)(ii) 3B, LAXMI TOWERS, C - 25, 'G' BLOCK, BANDRA - KURLA COMPLEX, BANDRA (EAST), MUMBAI-400051 U67190MH2011PTC218046 SUBSIDIARY 66.62 Section 2(87)(ii) 37 L&T INFRA 770556-5 INVESTMENT L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 (SHANGHAI) CO., LTD. FINANCE LIMITED L&T HOUSE, NAROTTAM MORARJI MARG BALLARD ESTATE MUMBAI 400001 U45200MH1994PLC259630 SUBSIDIARY 66.62 Section 2(87)(ii) 31 L&T HOWDEN PRIVATE LIMITED L&T HOUSE, BALLARD ESTATE, NM MARG, MUMBAI, MAHARASHTRA - 400001 U31401MH2010PTC204403 SUBSIDIARY L&T INFOTECH FINANCIAL SERVICES TECHNOLOGIES INC L&T INFRA DEBT FUND LIMITED 50.10 Section 2(87)(ii) L&T HYDROCARBON ENGINEERING LIMITED 33 L&T IDPL TRUSTEE 34 L&T INFORMATION 35 36 MANAGER PTE. LTD. TECHNOLOGY SERVICES 32 L&T HOUSING PARTNERS ADVISORY 38 40 L&T 41 L&T FINANCE COMPANY LIMITED INFRASTRUCTURE ENGINEERING LIMITED INFRASTRUCTURE MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI 600089 40 U74140TN1998PLC039864 100.00 Section 2(87)(ii) MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI U67190TN2006PLC059527 SUBSIDIARY 66.62 Section 2(87)(ii) - 600089 42 L&T INTERSTATE ROAD CORRIDOR LIMITED MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI SUBSIDIARY PRIVATE LIMITED 97.45 Section 2(87)(ii) U65993TN2001PLC046691 L&T INFRA INVESTMENT PARTNERS TRUSTEE PRIVATE LIMITED PLOT NO. 177, CTS NO. 6970, 6971, VIDYANAGARI MARG, CST ROAD, KALINA, SANTACRUZ (EAST), MUMBAI, MAHARASHTRA - 400 098 U65900MH2011PTC220896 SUBSIDIARY 66.62 Section 2(87)(ii) LARSEN & TOUBRO SI. 12 SUBSIDIARY No Address of the Company CIN/GLN Holding/ Subsidiary/ Associate % of Shares Applicable Section held 39 L&T INFRASTRUCTURE DEVELOPMENT PROJECTS LIMITED MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI - 600089 Name of the Company 30 LIMITED 100.00 Section 2(87)(ii) M. M. Chitale Subodh Bhargava M. Damodaran Vikram Singh Mehta Sushobhan Sarker ^ Adil Zainulbhai Whole-time Director & Senior Executive Vice 7.40 103.23 @ President (Buildings, Minerals & Metals) Independent Director 0.46 6.43 (11.44) M. V. Satish Independent Director 7.84 (9.07) Independent Director 0.41 5.65 (6.92) Independent Director 0.38 5.32 (5.00) Nominee of Life Insurance Corporation of India 0.56 0.29 President (Infrastructure) 108.36 2016-17 Designation Total Ratio of remuneration Percentage increase Remuneration of director to the in Remuneration median remuneration S A. M. Naik S. N. Subrahmanyan Group Executive Chairman 78.91~ 1101.12 19.29 R. Shankar Raman Shailendra Roy @ Deputy Managing Director & President Whole-time Director & Chief Financial Officer Whole-time Director & Senior Executive Vice President (Power, Heavy Engineering & Defence) 330.85 7.17 14.35 200.32 4.83 12.04 168.00 19.80 D. K. Sen Whole-time Director & Senior Executive Vice 7.77 23.71 4.04 1.83 Independent Director 66.62 Section 2(87)(ii) 27 L&T FINANCE LIMITED TECHNOPOLIS, 7TH FLOOR, A WING, PLOT NO. 4, BLOCK-BP, U65910WB1993FLC060810 SUBSIDIARY 66.62 Section 2(87)(ii) SECTOR-C, SALT LAKE, KOLKATA, WEST BENGAL - 700 091 28 L&T HALOL- MOUNT POONAMALLE SUBSIDIARY U45203TN2008PLC069210 47.75 Section 2(87)(ii) SHAMLAJI TOLLWAY LIMITED ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI - 600089 29 L&T HIMACHAL HYDROPOWER RAMA COTTAGE, KANLOG, SHIMLA-171001 U40102HP2010PLC031697 SUBSIDIARY SUBSIDIARY L67120MH2008PLC181833 L&T HOUSE, BALLARD ESTATE, NM MARG, MUMBAI, MAHARASHTRA - 400001 HOLDINGS LIMITED 0.40 5.63 (17.76) Akhilesh Gupta Independent Director 0.21 2.86 (15.74) SUBSIDIARY A) Ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year 2016-17, the percentage increase in remuneration of each Director & Company Secretary during the financial year 2016-17: Annexure 'D' to the Board Report LARSEN & TOUBRO 2050051589 SUBSIDIARY 100.00 Section 2(87)(ii) 25 AND AUTOMATION L&T HOUSE, BALLARD ESTATE, NM MARG, MUMBAI, U31501MH2007PLC176667 SUBSIDIARY 100.00 Section 2(87)(ii) LIMITED MAHARASHTRA - 400001 26 L&T FINANCE U45203TN2006PLC058735 DEVELOPED PLOTS, SIDCO SUBSIDIARY 600089 97.45 Section 2(87)(ii) 60 L&T SAPURA OFFSHORE PRIVATE LIMITED MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI U11200TN2010PTC077214 SUBSIDIARY 60.00 Section 2(87)(ii) - 600089 61 L&T SAPURA SHIPPING PRIVATE LIMITED MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI SUBSIDIARY U61100TN2010PTC077217 60.00 Section 2(87)(ii) - 600089 62 L&T SEAWOODS LIMITED L&T HOUSE, BALLARD ESTATE, U45203MH2008PLC180029 SUBSIDIARY 100.00 Section 2(87)(ii) N M MARG, MUMBAI, 63 L&T SHIPBUILDING LIMITED SUBSIDIARY MAHARASHTRA - 400001 GROUND FLOOR, TC-1 U45206TN2013PLC093395 L&T SAMBALPUR - ROURKELA TOLLWAY LIMITED % of Shares Applicable Section held 56 L&T REALTY FZE EXECUTIVE SUITE, P.O.BOX 121576, SAIF ZONE,SHARJAH, U.A.E. 02 01 05714 SUBSIDIARY 100.00 Section 2(87)(ii) 57 L&T REALTY LIMITED L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 U74200MH2007PLC176358 MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI - 600089 SUBSIDIARY 58 L&T SAMAKHIALI MOUNT POONAMALLE U45203TN2010PLC074501 SUBSIDIARY 97.45 Section 2(87)(ii) GANDHIDHAM TOLLWAY LIMITED ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI - 600089 59 100.00 Section 2(87)(ii) Holding/ Subsidiary/ Associate U74900TN2007PLC065356 97.00 Section 2(87)(ii) 100.00 Section 2(87)(ii) SUBSIDIARY U74990MH2009PTC193936 L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 VILLAGE BEDUBAGAR P.O AUGUSTMUNI RUDRAPRAYAG Rudra Prayag UR 246421 LIMITED HYDROPOWER L&T UTTARANCHAL 70 COMPANY PRIVATE LIMITED L&T TRUSTEE 69 U31401UR2006PLC032329 - 600089 ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI INFRASTRUCTURE TRANSPORTATION 98.12 Section 2(87)(ii) SUBSIDIARY U45203TN1997PLC039102 MOUNT POONAMALLE L&T 68 CHENNAI-600032 INDUSTRIAL ESTATE, GUINDY, LIMITED SUBSIDIARY SUBSIDIARY 71 BUILDING, L&T CONSTRUCTION CAMPUS, MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI - 600089 64 L&T SPECIAL L&T HOUSE, BALLARD ESTATE, U27109MH2009PTC193699 SUBSIDIARY 74.00 Section 2(87)(ii) STEELS AND HEAVY NM MARG, MUMBAI, FORGINGS PRIVATE 100.00 Section 2(87)(ii) MAHARASHTRA - 400001 65 L&T TECHNOLOGY L&T HOUSE, BALLARD ESTATE, U72900MH2012PLC232169 97.45 Section 2(87)(ii) SUBSIDIARY U45203TN2005PLC058417 MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI - 600089 TOLLWAYS LIMITED BHARUCH VADODARA LIMITED Company No CIN/GLN MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI U45203TN2010PLC075446 SUBSIDIARY 97.45 Section 2(87)(ii) - 600089 47 L&T METRO RAIL U45300TG2010PLC070121 SUBSIDIARY 100.00 Section 2(87)(ii) (HYDERABAD) TOLLWAY LIMITED LIMITED 48 FABRICATION YARD LLC 49 L&T MUTUAL FUND TRUSTEE LIMITED HYDERABAD METRO RAIL ADMINISTRATIVE BUILDING, UPPAL MAIN ROAD, HYDERABAD - 500 039, TELANGANA PO BOX 236, P.C 322, FALAZ AL QABAIL, SOHAR, SULTANATE OF OMAN L&T HOUSE BALLARD ESTATES, P.O. BOX 278, MUMBAI 400001 252E, MURI OKUNOLA STREET, VICTORIA ISLAND, LAGOS, NIGERIA 1001910 SUBSIDIARY L&T MODULAR 65.00 Section 2(87)(ii) WALAJAHPET 46 43 Name of the Director/KMP MANAGEMENT L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, U65991MH1996PLC229572 SUBSIDIARY 66.62 Section 2(87)(ii) LIMITED MAHARASHTRA - 400001 44 L&T KOBELCO KRISHNAGIRI MACHINERY PRIVATE L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 U29253MH2010PTC210325 SUBSIDIARY 51.00 Section 2(87)(ii) 45 KRISHNAGIRI THOPUR TOLL ROAD LIMITED MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI - 600089 U45203TN2005PLC057930 SUBSIDIARY 97.45 Section 2(87)(ii) LIMITED U65993MH1996PLC211198 SUBSIDIARY 66.62 Section 2(87)(ii) U40101MH2007PLC174071 SUBSIDIARY 100.00 Section 2(87)(ii) LIMITED MAHARASHTRA - 400001 54 L&T POWER LIMITED L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 U40100MH2006PLC160413 SUBSIDIARY 99.99 Section 2(87)(ii) L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, 55 L&T RAJKOT- VADINAR TOLLWAY LIMITED MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI - 600089 U45203TN2008PLC069184 SUBSIDIARY 97.45 Section 2(87)(ii) 107 108 SI. Name of the Address of the Company 55 DEVELOPMENT L&T POWER 53 601723 SUBSIDIARY 100.00 Section 2(87)(ii) 50 L&T OVERSEAS PROJECTS NIGERIA LIMITED 51 PANIPAT ELEVATED MOUNT POONAMALLE U45203TN2005PLC056999 SUBSIDIARY 97.45 Section 2(87)(ii) CORRIDOR LIMITED ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI 600089 52 L&T PORT MOUNT POONAMALLE U45203TN2008PLC067551 SUBSIDIARY 97.45 Section 2(87)(ii) KACHCHIGARH LIMITED ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI - 600089 97.45 Section 2(87)(ii) 89.77 Section 2(87)(ii) 100.00 Section 2(87)(ii) SUBSIDIARY 5TH FLOOR, DCM BUILDING, 20565579 2.21 22/04/2016 180100 Transfer 20745679 2.23 22/04/2016 -2066 Transfer 20743613 2.23 29/04/2016 1415 Transfer 20745028 2.23 29/04/2016 -336 Transfer 20744692 2.23 06/05/2016 Date wise Increase / Decrease in Shareholding during the year specifying the reasons for increase 288 Transfer 183 Transfer 2.21 12.30 Shareholding at the beginning of the Year 75926562 8.15 11/11/2016 -14823702 Transfer 61102860 6.55 At the end of the year Shareholding at the beginning of the Year 15/04/2016 61102860 20473057 2.20 08/04/2016 92449 Transfer 20565506 2.21 08/04/2016 -110 Transfer 20565396 6.55 20744980 2.23 and decrease (e.g. allotment/ 2.23 115 116 Sl. Name of the Share Holder No. Date Increase/ Reason Decrease Cumulative Shareholding No of % of total 20798054 Shares in share of the holding Company 03/06/2016 550689 Transfer 21348743 2.29 03/06/2016 shares 114752281 -1501 Transfer 2.23 transfer/bonus/sweat equity etc.) 06/05/2016 -162 Transfer 20744818 2.23 13/05/2016 100218 Transfer 20845036 2.24 27/05/2016 13/05/2016 20764230 2.23 20/05/2016 35413 Transfer 20799643 2.23 20/05/2016 -88 Transfer 20799555 -80806 Transfer year At the end of the 12.32 shares Pledged/ encumbered to total shares in share holding during the year NIL NIL NIL NIL (iii) Change in Promoters' Shareholding (please specify, if there is no change): Sl. No. Shareholding at the beginning of the Cumulative Shareholding during the year year No. of shares % of total shares of the Company No. of shares % of total shares of the Company to total the Company Shares of %of Shares 1.89 -0.17 byCustodian for GDRs & ADRs Grand Total (A+B+C) 911,873,781 19,605,064 931,478,845 100.00 914,269,231 18,721,435 932,965,803 100.00 0.00 1 (ii) Shareholding of Promoters: Shareholders Name Shareholding at the beginning of the year No. of Shares 1 Total Shareholding at the end of the year % change % of total Shares of the Company % of Shares No. of Shares Pledged/ encumbered % of total SI At the beginning of the year 2 Date wise Increase / Decrease in 26/08/2016 26/08/2016 5850 Transfer 153177857 16.43 -5850 Transfer 153172007 16.43 2 3 beginning of the Year 4 L&T EMPLOYEES WELFARE FOUNDATION Date wise Increase / Decrease in Shareholding during the year specifying the reasons for increase and decrease (e.g. allotment/ transfer/bonus/sweat equity etc.) ADMINISTRATOR OF THE SPECIFIED UNDERTAKING OF THE UNIT TRUST OF INDIA Date wise Increase / Decrease in Shareholding during the year specifying the reasons for increase and decrease (e.g. allotment/ transfer/bonus/sweat equity etc.) HDFC TRUSTEE COMPANY LIMITED - HDFC EQUITY FUND At the end of the year 153172007 16.42 Shareholding at the beginning of the Year 114752281 Date wise Increase / Decrease in Shareholding during the year specifying the reasons for increase and decrease (e.g. allotment/ transfer/bonus/sweat equity etc.) -119 Transfer 16.44 Shareholding at the 3 Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer/bonus/sweat equity etc): At the End of the year NIL NIL NIL NIL LARSEN & TOUBRO 153172007 (iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs): Date Increase/ Reason Decrease in share Cumulative Shareholding during the Year No of % of total Shares shares of the holding Company 1 LIFE INSURANCE CORPORATION OF INDIA Sl. Name of the Share Holder No. 21348624 2.29 10/06/2016 23362942 2.51 30/09/2016 164100 Transfer 23527042 2.52 30/09/2016 -1299 Transfer 23525743 2.52 07/10/2016 403311 Transfer 23929054 2.57 14/10/2016 128 Transfer 23929182 2.57 14/10/2016 -407 Transfer 23/09/2016 2.51 23363349 22803498 2.45 09/09/2016 293060 Transfer 23096558 2.48 09/09/2016 -6469 Transfer 23090089 -25380 Transfer 2.48 113890 Transfer 23203979 2.49 16/09/2016 -239 Transfer 23203740 2.49 23/09/2016 159609 Transfer 16/09/2016 23903802 2.56 21/10/2016 of the holding Company 04/11/2016 550 Transfer 24218948 2.60 04/11/2016 -8284 Transfer shares 24210664 11/11/2016 1811057 Transfer 26021721 2.79 18/11/2016 1076874 Transfer 27098595 2.91 25/11/2016 2.60 -99627 Transfer in share % of total 70219 Transfer 23974021 2.57 21/10/2016 -27500 Transfer 23946521 2.57 28/10/2016 271877 Transfer Shares 24218398 LARSEN & TOUBRO Cumulative Shareholding SI. Name of the Share Holder Date Increase/ Reason No. Decrease No of 2.60 17,621,579 02/09/2016 22903125 4445 Transfer 21490427 2.31 30/06/2016 -600 Transfer 21489827 2.31 08/07/2016 150255 Transfer 21640082 2.32 08/07/2016 -100215 Transfer 21539867 2.31 15/07/2016 150090 Transfer 21689957 2.33 30/06/2016 2.31 21485982 -505 Transfer 35707 Transfer 21384331 2.29 10/06/2016 -50202 Transfer 21334129 2.29 17/06/2016 188356 Transfer 15/07/2016 21522485 17/06/2016 -46771 Transfer 21475714 2.30 24/06/2016 10773 Transfer 21486487 2.31 24/06/2016 2.31 -51180 Transfer 21638777 2.32 2.38 12/08/2016 -176 Transfer 22154296 2.38 and decrease (e.g. allotment/ transfer/bonus/sweat equity etc.) 19/08/2016 283000 Transfer 22437296 22154472 2.41 -160 Transfer 22437136 2.41 26/08/2016 -145 Transfer 22436991 2.41 02/09/2016 466134 Transfer 19/08/2016 2.46 193880 Transfer 2.36 22/07/2016 116900 Transfer 21755677 2.33 22/07/2016 -237 Transfer 21755440 2.33 29/07/2016 12/08/2016 205100 Transfer 2.36 29/07/2016 -128 Transfer 21960412 2.36 Date wise Increase / Decrease in Shareholding during the year specifying the reasons for increase 05/08/2016 180 Transfer 21960592 21960540 0 2.06 17,621,579 0 19,213,684 0 0 0.00 0.00 b) Other-Individuals 0 0 0 0.00 0 0 0 0.00 0.00 c) Bodies Corp. 0 0 0 0.00 0 0.00 0 0 0 0.00 0 0 0 0.00 0.00 Sub-total (A) (1):- 0 0 0 0.00 0 0 0 0.00 0.00 (2) Foreign a) NRIs -Individuals 0 0 0 0 0.00 0 0.00 0 0 0 0.00 0.00 Total shareholding of Promoter (A)=(A)(1)+(A)(2) 0 0 0 0.00 0 0 0 0.00 0.00 B. Public Shareholding 1. Institutions 0 0 0 0.00 0.00 d) Banks / Fl 0 0 0 0.00 0 0 0 Sub-total (A) (2):- 0.00 e) Any Other.... 0 0 0 0.00 0 0 0 0.00 0.00 a) Mutual Funds 0 0.00 IV. SHARE HOLDING PATTERN i) Category-wise Share Holding: Category of Shareholders No. of Shares held at the beginning of the year A. Promoters Demat Physical LARSEN & TOUBRO No. of Shares held at the end of the year % Change Physical during the Total % of Total Shares year Total % of Total Shares Demat (1) Indian 23.84 Section 2(6) ASSOCIATE 402, 36 TURNER ROAD, BANDRA U65923MH2007PTC168721 WEST, MUMBAI - 400050 India Private Limited ASSOCIATE 50.00 Section 2(6) LIMITED 7 LARSEN & TOUBRO QATAR & HBK CONTRACTING LLC MAGTORQ PRIVATE LIMITED P. O. BOX 44357, DUBAI, UNITED ARAB EMIRATES L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 a) Individual/HUF P. O. BOX 1362, DOHA, QATAR ASSOCIATE 50.00 Section 2(6) 8 NO. 58-C, SIPCOT INDUSTRIAL COMPLEX, HOSUR, TAMIL NADU 635126 U02520TZ1989PTC002458 ASSOCIATE 42.85 Section 2(6) 9 Grameen Capital 28634 0 0 0.00 0.00 d) Bodies Corp. 0 0 0 0.00 0 0 0 0.00 0.00 e) Banks / Fl 0 0 0 0.00 0 0 0 0.00 0.00 f) Any Other.... 0 0 0 0 0 0.00 0.00 b) Central Govt 0 0 0 0 0.00 0 0 0.00 0.00 c) State Govt (s) 0 0 0 0.00 0 76,771,070 3,738 76,774,808 8.24 218,526 19,677,652 2.11 0.91 0.00 i) Directors & Relatives 1,449,165 350 1,449,515 0.16 1,509,024 250 1,509,274 0.16 0.00 ii) Foreign Nationals iii) Foreign Portfolio 392,713 49,988,226 20,826 0 19,459,126 1.20 0 11,172,991 11,172,991 share capital upto 1 lakh 113 114 Category of Shareholders ii) Individual shareholders holding nominal share capital in excess of 2 lakh c) Others (specify) No. of Shares held at the beginning of the year No. of Shares held at the end of the year 413,539 Demat Total % of Total Shares Demat Physical % Change during the Total % of Total year Shares Physical 0.04 49,988,226 5.37 12.30 -0.02 0 0 0 0.00 0.00 Investor Sub-total (B)(2):- -0.03 435,026,081 19,520,081 454,546,162 19,605,064 912,265,161 48.80 514,395,903 18,676,230 533,047,270 97.94 896,647,652 18,721,435 915,344,224 57.13 8.33 98.11 0.17 |(B)=(B)(1)+ (B)(2) C. Shares held 19,213,684 Total Public Shareholding 892,660,097 0.00 0.91 390,360 17,766 114,752,281 372,138 140,322,703 14,470 386,608 0.04 0.00 0 140,322,703 15.04 9.67 Investors 8,454,826 iv) Non-Residents v) Trust 114,734,515 vi) Qualified Foreign 0 426,504 17,766 0 8,781,318 114,752,281 0 0.94 12.32 0.00 8,064,466 114,734,515 8,354,814 b) Individuals 0.03 0.03 e) Venture Capital Funds 0 0 0 0.00 0 0 0 0.00 d) State Govt(s) 0.00 0 0 0.00 0 0 0 0.00 0.00 f) Insurance Companies 0 41,071,676 0.06 1,874,190 b) Banks / Fl 237,142,389 41,177 237,183,566 25.46 107,273,904 67,089,940 12,822 107,286,726 11.50 3.26 31,933 0.20 67,121,873 -18.27 c) Central Govt 1,314,715 0 1,314,715 0.14 1,874,190 0 7.19 1114106 Transfer 0 4.41 457,634,016 84,983 457,718,999 49.14 382,251,749 45,205 382,296,954 40.98 -8.16 2. Non-Institutions a) Bodies Corp. i) Indian Sub-total (B)(1):- 65,995,102 0 305,763 66,300,865 3,432 3,432 7.12 66,318,379 0.00 280,167 341,383 66,634,899 7.14 0.02 23,431 303,598 ii) Overseas 41,071,676 0.00 0 185,203,662 450 185,204,112 19.85 15.44 g) Flls 101,334,166 40,068 101,374,234 h) Foreign Venture Capital Funds 0.00 0 0 10.88 0.00 20,810,053 0 20,810,053 2.23 -8.65 0 0 0 28212701 3.03 25/11/2016 81 LARSEN & TOUBRO ATCO SAUDIA LLC AL-TURKI BUILDING, KING KHALED STREET, P.O. BOX 91, DAMMAM 2050055625 SUBSIDIARY 75.00 Section 2(87)(ii) 82 LARSEN & TOUBRO ELECTROMECH LLC P.O. BOX 1999, RUWI, POSTAL CODE 112, MUSCAT 1/04445/1 SUBSIDIARY 65.00 Section 2(87)(ii) 83 LARSEN & TOUBRO HEAVY ENGINEERING LLC P.O. BOX 281, POSTAL CODE 325, W LIWA, SULTANATE OF OMAN 30.00 Section 2(87)(i) SUBSIDIARY 390357-T SUITE 702, 7TH FLOOR, WISMA HANGSAM, JALAN HANG LEKIR, 50000 KUALA LUMPUR, MALAYSIA 51.00 Section 2(87)(ii) MAHARASHTRA - 400001 78 L&T-MHPS TURBINE GENERATORS PRIVATE LIMITED L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 U31101MH2006PTC166541 SUBSIDIARY 1042928 51.00 Section 2(87)(ii) L&T-SARGENT & U74210MH1995PLC088099 SUBSIDIARY 50.0001 Section 2(87)(ii) 80 LUNDY LIMITED LARSEN & TOUBRO (EAST ASIA) SDN. BHD L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 79 SUBSIDIARY 70.00 Section 2(87)(ii) 84 1415026 SUBSIDIARY 84.28 Section 2(87)(ii) HRB 15958 SUBSIDIARY 84.28 Section 2(87)(ii) U72900MH1996PLC104693 SUBSIDIARY 84.28 Section 2(87)(ii) OFFICE LOB 16 G 08, POST BOX 41558, HAMRIYAH FREE ZONE, SHARJAH, UNITED ARAB EMIRATES 270596763 84.28 Section 2(87)(ii) 0067 SUBSIDIARY 100.00 Section 2(87)(ii) 109 110 SI. Name of the Address of the Company SUBSIDIARY SUBSIDIARY 1220, N. MARKET ST., SUITE 806, WILMINGTON, DE 19801, USA 2810, MATHESON BLVD EAST SUITE 500, MISSISSAUGA, ONL4W 4X7 CANADA EURO-ASIA BUSINESS CENTRE, MESSE-ALLEE 2, D-04356, LEIPZIG, GERMANY LARSEN & TOUBRO HYDROCARBON INTERNATIONAL P.O. BOX 6391, AL KHOBAR 34423, KINGDOM OF SAUDI ARABIA 2051053464 SUBSIDIARY 100.00 Section 2(87)(ii) LIMITED LLC 85 L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 LARSEN & TOUBRO INFOTECH CANADA LIMITED LARSEN & TOUBRO INFOTECH GMBH 87 LARSEN & TOUBRO INFOTECH LIMITED 88 LARSEN & TOUBRO INFOTECH LLC 69 89 LARSEN & TOUBRO INTERNATIONAL FZE 86 CIN/GLN U29119MH2006PTC165102 PRIVATE LIMITED ROAD, SHIVAJINAGAR, PUNE, MAHARASHTRA - 400005 84.28 Section 2(87)(ii) SUBSIDIARY U72200PN2012PTC145539 84.28 Section 2(87)(ii) SUBSIDIARY FN435491D c/o, OBERHAMMER, RECHTSANWALTE GMBH, KARLSPLATZ, 3/1, VIENNA GODREJ ETERNIA A, 5TH FLOOR, MUMBAI PUNE SCIENCES PRIVATE LIMITED AUGMENT IQ DATA 114 L&T INFORMATION TECHNOLOGY SPAIN SOCIEDAD LIMITADA LARSEN & TOUBRO INFOTECH AUSTRIA GMBH 113 84.28 Section 2(87)(ii) SUBSIDIARY B87472072 C/JOSE ABASCAL, 56 2ND FLOOR, MADRID 112 - 600089 115 L&T INFOTECH S. DE. BOSQUE DE CIRUELOS 180, RL.C.V SUITE PP 101, COL.BOSQUES N2017020633 118 PRIVATE COMPANY LIMITED 100.00 Section 2(87)(ii) SUBSIDIARY L&T HOUSE, BALLARD ESTATE, N U45400MH2017PTC292586 M MARG, MUMBAI 400001 CONTRACTORS L&T INFRA 117 PRIVATE LIMITED MANAPAKKAM, CHENNAI MUMBAI 400001 100.00 Section 2(87)(ii) SUBSIDIARY U45309MH2016PTC283661 L&T HOUSE BALLARD ESTATE SAHIBGANJ GANGES 116 DE LAS LOMAS, 11700 MEXICO CITY, MEXICO 84.28 Section 2(87)(ii) SUBSIDIARY BRIDGE-COMPANY POONAMALLE ROAD, SI. Name of the MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI U65100TN2011PLC081100 SUBSIDIARY 66.62 Section 2(87)(ii) - 600089 75 WESTERN ANDHRA TOLLWAYS LIMITED MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI - 600089 CONSULTANTS LIMITED U45203TN2005PLC057931 97.45 Section 2(87)(ii) 76 L&T WESTERN INDIA TOLLBRIDGE LIMITED MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI - 600089 U45203TN1999PLC042518 SUBSIDIARY 97.45 Section 2(87)(ii) 77 L&T-MHPS BOILERS SUBSIDIARY L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, L&T FINANCIAL 68.00 Section 2(87)(ii) Address of the Company CIN/GLN No Company 72 L&T VALVES LIMITED L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 Holding/ Subsidiary/ Associate 74 U74999MH1961PLC012188 LARSEN & TOUBRO % of Shares Applicable Section held 100.00 Section 2(87)(ii) 73 L&T VISION VENTURES LIMITED MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI 600089 U74210TN2006PLC061845 SUBSIDIARY SUBSIDIARY No Company Holding/ Subsidiary/ AUSTRALIA PTY LTD 108 TAMCO ELECTRICAL INDUSTRIES 107 INFOTECH PRIVATE LIMITED SPECTRUM 106 SUBSIDIARY 2159287 THE WOODROPE BUILDING, WOODROLFE ROAD, SYSTEMS LIMITED SERVOWATCH 105 Holding/ Subsidiary/ Associate Company No CIN/GLN Address of the Company Name of the TAMCO SWITCHGEAR (MALAYSIA) SDN BHD TOLLESBURY, MALDONESSEX CM9 8SE, UNITED KINGDOM L&T HOUSE, 38, CUBBON ROAD, BANGALORE, KARNATAKA-560001 31, KITCHEN ROAD, DANDENONG, VICTORIA 3175, AUSTRALIA 110 100.00 Section 2(87)(ii) SUBSIDIARY 01201246 ENDEAVOUR HOUSE, BENTALLS INDUSTRIAL ESTATE, HOLLOWAY ROAD, MALDON, ESSEX, C9 4ER, UNITED KINGDOM THALEST LIMITED 109 100.00 Section 2(87)(ii) SUBSIDIARY SI. 100.00 Section 2(87)(ii) 775268-H ACN006140512 100.00 Section 2(87)(ii) SUBSIDIARY U72200KA1995PTC018112 100.00 Section 2(87)(ii) % of Shares Applicable Section held LARSEN & TOUBRO UNIT C508, BLOCK C, KELANA SQUARE, JALAN SS7/26, KELANA JAYA 47301, PETALING JAYA SELANGOR DARUL EHSAN, MALAYSIA SUBSIDIARY LEWIS ROAD, BHUBANESWAR, KHORDHA-751014 75.50 Section 2(87)(ii) SUBSIDIARY - 600089 72.11 Section 2(87)(ii) SUBSIDIARY U45203TN2009PLC070741 MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI PNG TOLLWAY LIMITED 101 PUNJAB-140401 NALASH, RAJPURA, PATIALA, 102 100.00 Section 2(87)(ii) U40102PB2007PLC031039 PO BOX NO-28, NEAR VILLAGE NABHA POWER LIMITED 100 16, BARAKHAMBA ROAD, CANNAUGHT PLACE, NEW DELHI-110001 PRIVATE LIMITED 66.62 Section 2(87)(ii) SUBSIDIARY U26942DL1990PTC041941 SUBSIDIARY L&T GLOBAL PT TAMCO INDONESIA U132030R1999PTC005673 ANNAPURNA COMPLEX, 559, 95.00 Section 2(87)(ii) SUBSIDIARY NO.81, CENTRAL JAKARTA, INDONESIA 10310 THE CITY TOWER, 12TH FLOOR, AHU-0110258.AH.01.09 UNIT 1-N, J1.MH., THAMRIN CIKARANG BEKASI 17330, INDONESIA COMPANY PRIVATE LIMITED RAYKAL ALUMINIUM L& T-CHIYODA INDONESIA HYDROCARBON & TOUBRO 104 PT. LARSEN 103 100.00 Section 2(87)(ii) SUBSIDIARY C2-18.177.HT.01.01.HT 94 JALAN RAYA PASAR SERANG, NO. 15, KANDANG RODA, ENGINEERING HOLDINGS LIMITED UNIT 7, LEVEL 3, GATE PRECINCT, BUILDING 2, DUBAI INTERNATIONAL FINANCIAL CENTRE, P.O BOX 63671, DUBAI, UAE CL2106 1/40304/4 SUBSIDIARY 65.00 Section 2(87)(ii) OMAN LLC CODE 112, SULTANATE OF OMAN 93 LARSEN & TOUBRO QATAR LLC P.O. BOX 24399, SH. THAMOUR 27454 P.O. BOX 1127, RUWI, POSTAL SUBSIDIARY BLDG., MEZZANINE FLOOR, AL-HANDASA AREA, NEAR JAIDAH FLYOVER, B RING ROAD, DOHA, QATAR 94 LARSEN & TOUBRO READYMIX AND JEBEL ALI INDUSTRIAL AREA, 583119 SUBSIDIARY 49.00 Section 2(87)(i) 49.00 Section 2(87)(i) JEBEL ALI, DUBAI LARSEN & TOUBRO ZIP CODE-19711, U.S.A Associate 90 LARSEN & TOUBRO KUWAIT PLOT NO. 3, BUILDING NO.1, SHARQ, KUWAIT 117668 SUBSIDIARY CONSTRUCTION GENERAL 92 CONTRACTING COMPANY, WITH % of Shares Applicable Section held 49.00 Section 2(87)(i) 91 LARSEN & TOUBRO LLC 113, BARKSDALE PROFESSIONAL 6 DEL.C 18-101 SUBSIDIARY 100.00 Section 2(87)(ii) CENTRE, NEWARK CITY, COUNTRY OF NEW CASTLE, G56 LIMITED LIABILITY LTH MILCOM ASPHALT CONCRETE INDUSTRIES LLC LARSEN & TOUBRO LARSEN TOUBRO ARABIA LLC ALMADA TOWER, PRINCE TURKI 2051049523 STREET, AL KHOBAR, SAUDI SUBSIDIARY 75.00 Section 2(87)(ii) 99 MUDIT CEMENT LIMITED COMPLEX, MOUNT 98 DEVELOPER PRIVATE INFRASTRUCTURE 97.00 Section 2(87)(ii) SUBSIDIARY U74999TN2016PTC103769 GROUND FLOOR, TC 1 MARINE 111 100.00 Section 2(87)(ii) SUBSIDIARY BUILDING, L&T CONSTRUCTION 95 8001 SOUTH AFRICA (PTY) LIMITED SAUDI ARABIA LLC P.O. BOX NO.20, RIYADH 11351, KINGDOM OF SAUDI ARABIA 11351 1010154437 SUBSIDIARY 100.00 Section 2(87)(ii) 96 LARSEN & TOUBRO TANDD SA (PTY) LIMITED 2ND FLOOR, 4 PENCARROW CRESCENT, LA LUCIA RIDGE OFFICE ESTATE, SOUTH AFRICA 4019 CAPETOWN, SOUTH AFRICA 2010/018159/07 72.50 Section 2(87)(ii) 97 LARSEN AND 6TH FLOOR, 119 HERTZOG 2011/007226/07 SUBSIDIARY 63.12 Section 2(87)(ii) TOUBRO INFOTECH BOULEVARD, FORESHORE, SUBSIDIARY ARABIA PRIVATE LIMITED SUBSIDIARY 17/03/2017 390465 Transfer 30643583 3.28 17/03/2017 -213 Transfer 30643370 3.28 24/03/2017 38140 Transfer 30681510 3.29 24/03/2017 -2409 Transfer 30679101 3.29 31/03/2017 25807 Transfer 30704908 3.24 30253118 -31045 Transfer 10/03/2017 24/02/2017 39022 Transfer 30197914 3.24 24/02/2017 -61 Transfer 30197853 3.24 03/03/2017 3.29 55243 Transfer 3.24 03/03/2017 -673 Transfer 30252423 3.24 10/03/2017 31740 Transfer 30284163 3.25 30253096 31/03/2017 -150 Transfer 30704758 -25000 Transfer 17095000 1.83 03/06/2016 -25000 Transfer 17070000 1.83 11/11/2016 798124 Transfer 27/05/2016 17868124 13/01/2017 -83000 Transfer 17785124 1.91 Date wise Increase / Decrease in Shareholding during the year 20/01/2017 -117000 Transfer 17668124 1.89 1.92 3.23 1.84 Shareholding at the beginning of the Year 3.29 At the end of the year 30704758 3.29 117 118 Sl. Name of the Share Holder No. Date 17120000 Increase/ Reason Cumulative Shareholding No of % of total Shares shares in share holding of the Company 5 GENERAL INSURANCE CORPORATION OF INDIA Decrease 03/02/2017 30158892 17/02/2017 16/12/2016 -6067 Transfer 29071414 3.12 23/12/2016 406 Transfer 29071820 3.12 23/12/2016 -65500 Transfer 29006320 3.11 30/12/2016 267621 Transfer 29273941 3.14 06/01/2017 162602 Transfer 29436543 3.12 29077481 338 Transfer 16/12/2016 -54500 Transfer 28158201 3.02 02/12/2016 847325 Transfer 29005526 3.11 02/12/2016 -100 Transfer 3.16 29005426 09/12/2016 100717 Transfer 29106143 3.12 09/12/2016 -29000 Transfer 29077143 6 3.12 3.11 13/01/2017 224532 Transfer 29661075 03/02/2017 212950 Transfer 30069396 3.22 03/02/2017 -11819 Transfer 30057577 3.22 10/02/2017 3.20 1598 Transfer 3.22 10/02/2017 -340 Transfer 30058835 3.22 17/02/2017 100134 Transfer 30158969 3.23 30059175 -77 Transfer 29856446 27/01/2017 3.18 13/01/2017 -894 Transfer 29660181 3.18 Date wise Increase / Decrease in Shareholding during the year specifying the reasons for increase 20/01/2017 24196 Transfer 29684377 -14000 Transfer 3.18 -10413 Transfer 29673964 3.18 27/01/2017 196482 Transfer 29870446 3.20 and decrease (e.g. allotment/ transfer/bonus/sweat equity etc.) 20/01/2017 -80000 Transfer 17588124 1.89 12558826 1.35 LLC 50.00 Section 2(6) ASSOCIATE 600640 L&T CAMP FACILITIES 5 PARK STREET, KOLKATA 700016 21.74 Section 2(6) ASSOCIATE U45205WB1999PTC090733 INTERNATIONAL SEAPORTS (HALDIA) PRIVATE LIMITED 4 50.00 Section 2(6) ASSOCIATE 3744 KOHINOOR BUILDING, 105, FLAT NO. 27, 5TH FLOOR, -652 Transfer 01/07/2016 1.35 12559478 13074553 1.40 17/06/2016 1580 Transfer 13076133 1.40 24/06/2016 339 Transfer 13076472 POST BOX 1267, NEHA APARTMENT, BAZAAR-E- DANOOS, KISH ISLAND, IRAN 1.40 -18 | Transfer 13076454 1.40 30/06/2016 678 | Transfer 13077132 1.40 30/06/2016 -517654 Transfer 24/06/2016 NO 3001, GIDC INDUSTRIAL ESTATE, ANKLESHWAR, GUJARAT SYSTEMS KISH (LLC) PROJECTS AND SI. 112 111 NM MARG, MUMBAI, MAHARASHTRA - 400001 PRIVATE LIMITED 100.00 Section 2(87)(ii) SUBSIDIARY U70103MH2016PTC285466 L&T HOUSE, BALLARD ESTATE, Name of the SEAWOODS RETAIL MAHARASHTRA - 400001 100.00 Section 2(87)(ii) SUBSIDIARY U70109MH2016PTC285064 L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, PRIVATE LIMITED SEAWOODS REALTY 119 56.67 Section 2(87)(ii) 120 224 Transfer Address of the Company No ENGINEERING INDIRAN 3 INDUSTRIES LIMITED 50.00 Section 2(6) ASSOCIATE U18104GJ1978SGC003134 15.42 Section 2(6) ASSOCIATE CIN/GLN 311, 3rd Floor, Vardhaman Plaza, U74899DL1990PTC040630 Pocket 7, Plot No. 6, Sector 12, Dwarka, New Delhi-110078 % of Shares Applicable Section held Holding/ Subsidiary/ GUJARAT LEATHER 2 LIMITED INFRAPRIVATE FEEDBACK 1 Company Associate 10/06/2016 1.40 13074329 16883124 1.81 31/03/2017 -65000 Transfer 16818124 1.80 6 ICICI PRUDENTIAL CAPITAL PROTECTION ORIENTED FUND At the end of the year Shareholding at the beginning of the Year -235000 Transfer 16818124 14633805 1.57 08/04/2016 4493 Transfer 14638298 1.57 08/04/2016 -78869 Transfer 14559429 1.80 1.56 24/03/2017 17118124 specifying the reasons for increase 10/02/2017 -100500 Transfer 17487624 1.87 and decrease (e.g. allotment/ transfer/bonus/sweat equity etc.) 17/02/2017 -19500 Transfer 17468124 1.83 1.87 -100000 Transfer 17368124 1.86 10/03/2017 -120000 Transfer 17248124 1.85 17/03/2017 -130000 Transfer 03/03/2017 L & T HOUSE, BALLARD ESTATE, U74999MH2015PTC267502 MUMBAI 400001 15/04/2016 14612229 13943978 1.50 20/05/2016 -4688 Transfer 13939290 1.50 27/05/2016 1448 Transfer 13940738 -847395 Transfer 1.50 -653243 Transfer 13287495 1.43 03/06/2016 363804 Transfer 13651299 1.46 03/06/2016 -576970 Transfer 27/05/2016 52800 Transfer 13/05/2016 1.59 1.57 22/04/2016 675744 Transfer 15287973 1.64 22/04/2016 -1069213 Transfer 14218760 1.53 Date wise Increase / Decrease in Shareholding during the year specifying the reasons for increase and decrease (e.g. allotment/ transfer/bonus/sweat equity etc.) 29/04/2016 14219067 1.53 06/05/2016 -3447 Transfer 14215620 1.53 13/05/2016 575753 Transfer 14791373 307 Transfer U28920MH1994PLC083035 143162 Transfer -275 Transfer 1.20 11194635 -1945 Transfer 29/07/2016 1.20 11196580 11500 Transfer 29/07/2016 1.20 11185080 -180049 Transfer 22/07/2016 1.22 11365129 63091 Transfer 05/08/2016 22/07/2016 231500 Transfer 1.23 1.21 11280296 4615 Transfer 19/08/2016 1.21 11275681 12/08/2016 1.21 11275956 471 Transfer 12/08/2016 1.21 11275485 -150650 Transfer 05/08/2016 11426135 19/08/2016 1.21 -50512 Transfer 1.21 11240180 200 Transfer 30/06/2016 1.21 11239980 -48224 Transfer 24/06/2016 1.21 11288204 37 Transfer 24/06/2016 1.21 11288167 -51170 Transfer 30/06/2016 11302038 -9800 Transfer 1.20 15/07/2016 in Shareholding during the year specifying the reasons for increase and decrease (e.g. allotment/ transfer/bonus/sweat equity etc.) 1.22 11352550 -57876 Transfer Date wise Increase / Decrease 08/07/2016 1.22 11410426 90046 Transfer 08/07/2016 1.21 11320380 90000 Transfer 01/07/2016 11230380 17/06/2016 -65 Transfer 1.21 of the Company holding shares Shares during the Year No of % of total Cumulative Shareholding in share Decrease Increase/ Reason Date Sl. Name of the Share Holder No. 124 123 1.39 12915856 30/09/2016 123000 Transfer -220454 Transfer 1.36 12351737 -277964 Transfer 14/10/2016 1.35 12629701 7500 Transfer 14/10/2016 1.35 12622201 -155704 Transfer 07/10/2016 1.37 12777905 82503 Transfer 07/10/2016 12695402 11280231 30/09/2016 12792856 12362077 75005 Transfer 09/09/2016 1.32 12287072 -19154 Transfer 02/09/2016 1.32 12306226 838495 Transfer 02/09/2016 1.23 11467731 187500 Transfer 26/08/2016 1.33 1.37 09/09/2016 12355292 -680 | Transfer 23/09/2016 1.37 12793536 232000 Transfer 23/09/2016 1.35 12561536 -10256 Transfer 16/09/2016 1.35 12571792 216500 Transfer 16/09/2016 1.33 -6785 Transfer 1.22 11339337 -59747 Transfer 1.52 14155559 -96359 Transfer 31/03/2017 1.53 14251918 105243 Transfer 24/03/2017 1.52 14146675 344901 Transfer 17/03/2017 1.48 13801774 9304 Transfer At the end of the year 10/03/2017 14155559 9 RELIANCE CAPITAL TRUSTEE COMPANY LIMITED 270000 Transfer 15/04/2016 Date wise Increase / Decrease 1.20 11162443 -433 Transfer 08/04/2016 1.20 11162876 180000 Transfer 08/04/2016 beginning of the Year 1.18 10982876 Shareholding at the 1.52 11432443 1.48 -24708 Transfer 108758 Transfer 02/12/2016 1.46 13651830 -10745 Transfer 11/11/2016 1.47 13662575 -11194 Transfer 04/11/2016 transfer/bonus/sweat equity etc.) 1.47 13673769 293609 Transfer 07/10/2016 13760588 13792470 1.48 34173 Transfer 03/03/2017 1.48 13817178 -66029 Transfer 10/02/2017 1.49 13883207 56562 Transfer 03/02/2017 1.48 13826645 31884 Transfer 06/01/2017 1.48 13794761 30/12/2016 1.23 in Shareholding during the year 22/04/2016 -90115 Transfer 20/05/2016 1.24 11523318 4200 Transfer 20/05/2016 1.24 11519118 -135000 Transfer 13/05/2016 1.25 11654118 192 Transfer 13/05/2016 1.25 11433203 11653926 1.23 -90000 Transfer 10/06/2016 1.22 11399084 16800 Transfer 10/06/2016 1.22 11382284 -20919 Transfer 03/06/2016 1.22 11403203 60000 Transfer 03/06/2016 1.22 11343203 27/05/2016 -230 Transfer 06/05/2016 Company -2371714 Transfer 29/04/2016 1.50 13935870 2413869 Transfer 29/04/2016 transfer/bonus/sweat equity etc.) 1.24 11522001 -442 | Transfer 22/04/2016 specifying the reasons for increase and decrease (e.g. allotment/ 1.24 11522443 90000 Transfer 11564156 1.24 06/05/2016 90000 Transfer holding of the in share shares Shares No of % of total Cumulative Shareholding 1.32 Decrease No. Date Name of the Share Holder SI. LARSEN & TOUBRO 1.25 11654156 Increase/ Reason 21/10/2016 80916 Transfer 12432653 0.52 4827697 2374 Transfer 15/04/2016 0.52 4825323 -4665 Transfer 08/04/2016 0.52 4829988 113173 Transfer 08/04/2016 beginning of the Year 0.51 4716815 22/04/2016 Shareholding at the 21410 Transfer 0.52 0.52 1690 Transfer 13/05/2016 0.52 4871840 7950 Transfer 06/05/2016 0.52 4863890 -3871 Transfer 29/04/2016 0.52 4867761 18654 Transfer 29/04/2016 4849107 13/05/2016 SBI MAGNUM EQUITY FUND 0.97 10171421 -52912 Transfer 10/03/2017 1.10 10224333 286 Transfer 10/03/2017 1.10 10224047 -410548 Transfer 03/03/2017 Date wise Increase / Decrease in Shareholding during the year specifying the reasons for increase and decrease (e.g. allotment/ transfer/bonus/sweat equity etc.) 1.14 10634595 34753 Transfer 1.09 10 17/03/2017 10219856 9013335 At the end of the year 0.97 9013335 -97980 Transfer 31/03/2017 0.98 9111315 -645440 Transfer 24/03/2017 1.05 9756755 -463101 Transfer 17/03/2017 1.10 48435 Transfer -12860 Transfer 4860670 0.52 0.58 5450146 578 Transfer 15/07/2016 0.58 5449568 14355 Transfer 08/07/2016 0.58 5435213 -7615 Transfer 01/07/2016 0.58 5442828 144 Transfer 15/07/2016 01/07/2016 -297 Transfer 0.58 Sl. Name of the Share Holder No. 126 125 0.59 5475888 21606 Transfer 29/07/2016 0.59 5454282 -1211 Transfer 22/07/2016 0.59 5455493 5644 Transfer 22/07/2016 5449849 0.58 5442684 -110 Transfer 10/06/2016 in Shareholding during the year specifying the reasons for increase and decrease (e.g. allotment/ transfer/bonus/sweat equity etc.) 0.55 5105824 42472 Transfer 03/06/2016 Date wise Increase / Decrease 0.54 5063352 176408 Transfer 27/05/2016 0.52 4886944 26274 Transfer 20/05/2016 3696 Transfer 5109520 0.55 10/06/2016 30/06/2016 0.58 5442794 175758 Transfer 30/06/2016 0.57 5267036 03/03/2017 111722 Transfer 0.55 5155314 61956 Transfer 17/06/2016 0.55 5093358 -16162 Transfer 24/06/2016 and decrease (e.g. allotment/ 1.14 -438145 Transfer 12754506 -2964 Transfer 02/12/2016 1.37 12757470 160045 Transfer 02/12/2016 Date wise Increase / Decrease in Shareholding during the year specifying the reasons for increase 1.35 12597425 -49 Transfer 25/11/2016 1.35 12597474 26181 Transfer 1.37 25/11/2016 09/12/2016 12560739 230064 Transfer 30/12/2016 1.35 12600459 -3654 Transfer 23/12/2016 1.35 12604113 23/12/2016 1.34 12460951 -99788 Transfer 16/12/2016 and decrease (e.g. allotment/ transfer/bonus/sweat equity etc.) 1.35 -193767 Transfer 12830523 1.35 -8840 Transfer 58198 Transfer 04/11/2016 1.29 11992407 -75000 Transfer 28/10/2016 1.29 12067407 4254 Transfer 28/10/2016 1.29 12063153 -369500 Transfer 21/10/2016 1.33 12050605 12571293 1.29 -6000 Transfer 18/11/2016 1.35 12580133 30415 Transfer 18/11/2016 1.35 12549718 -8490 Transfer 11/11/2016 1.35 12558208 513603 Transfer 11/11/2016 1.29 12044605 04/11/2016 1.38 30/12/2016 -175 Transfer 1.18 11020438 -249121 Transfer 17/02/2017 1.21 11269559 180000 Transfer 17/02/2017 1.19 11089559 -325551 Transfer 10/02/2017 1.22 11415110 100834 Transfer 24/02/2017 10/02/2017 17549 Transfer 1.18 24/02/2017 of the Company holding in share shares No of % of total Shares Cumulative Shareholding Decrease Increase/ Reason No. Date Name of the Share Holder 12 SI. LARSEN & TOUBRO 11037987 1.21 11314276 -209705 Transfer 13/01/2017 1.39 13005238 136000 Transfer 13/01/2017 1.38 12869238 -114 Transfer 06/01/2017 1.38 12869352 39004 Transfer 06/01/2017 1.38 12830348 -74001 |Transfer 12931237 1.39 20/01/2017 03/02/2017 1.24 11523981 -943300 Transfer 27/01/2017 1.34 12467281 10599842 135000 Transfer 1.32 12332281 -810456 Transfer 20/01/2017 1.41 13142737 211500 Transfer 27/01/2017 1.44 13380160 63943 Transfer 20/01/2017 1.87 17401633 -306015 Transfer 13/01/2017 1.90 17707648 266695 Transfer 13/01/2017 1.87 17440953 -452 Transfer 06/01/2017 1.87 17441405 4845 Transfer 39982 Transfer 17406478 27/01/2017 1.93 17963056 230564 Transfer 10/02/2017 1.90 17732492 -6346 Transfer 03/02/2017 1.90 17738838 156544 Transfer 03/02/2017 1.89 17582294 175816 Transfer 1.87 Date wise Increase / Decrease 06/01/2017 holding 23/12/2016 1.81 16856202 -90000 Transfer 16/12/2016 1.82 16946202 153048 Transfer 16/12/2016 1.80 16793154 -4000 Transfer 09/12/2016 1.80 16797154 126008 Transfer Company 16982210 30/12/2016 of the in share shares Shares No of % of total Cumulative Shareholding Decrease Increase/ Reason Date Sl. Name of the Share Holder No. 120 119 1.87 17401423 419213 Transfer 1.82 10/02/2017 -2983 Transfer 17960073 31/03/2017 1.99 18574211 -9263023 Transfer 24/03/2017 2.98 27837234 9464196 Transfer 24/03/2017 1.97 18373038 -206002 Transfer 17/03/2017 1.99 18579040 24619 Transfer 1027 Transfer 18598830 At the end of the year 14121192 63264 Transfer 15/04/2016 1.51 14057928 33527 Transfer 08/04/2016 1.51 14024401 Shareholding at the beginning of the Year INSURANCE COMPANY LIMITED ICICI PRUDENTIAL LIFE 7 1.99 18598830 1.99 17/03/2017 1.99 18578013 17973288 5537 Transfer 24/02/2017 and decrease (e.g. allotment/ 1.93 17967751 -810 Transfer 17/02/2017 specifying the reasons for increase 1.93 17968561 8488 Transfer 17/02/2017 in Shareholding during the year 1.93 1.93 transfer/bonus/sweat equity etc.) 24/02/2017 -86 Transfer -1554 Transfer 10/03/2017 1.99 18579567 360850 Transfer 10/03/2017 1.95 265753 Transfer 18218717 03/03/2017 1.95 18223323 250121 Transfer 03/03/2017 1.93 17973202 -4606 Transfer 1.52 09/12/2016 16531401 12/08/2016 1.14 10670824 -41388 Transfer 05/08/2016 1.15 10712212 1810 Transfer 05/08/2016 1.15 10710402 -976591 Transfer 29/07/2016 1.25 11686993 -8701 Transfer 904 Transfer 10662123 19/08/2016 1.14 10666614 -153 Transfer 02/09/2016 1.14 10666767 802 Transfer 02/09/2016 1.14 10665965 3164 Transfer 26/08/2016 1.14 10662801 678 Transfer 1.14 09/09/2016 29/07/2016 11686089 holding of the shares in share Shares % of total No of Decrease No. Increase/ Reason Date Name of the Share Holder SI. Cumulative Shareholding LARSEN & TOUBRO Company 1.25 08/07/2016 12559412 -840889 Transfer 22/07/2016 1.34 12526978 2147 Transfer 22/07/2016 1.34 12524831 -19581 Transfer 15/07/2016 1.35 12544412 -15000 Transfer 08/07/2016 1.35 586 Transfer -1695 Transfer 10664919 1.14 11808436 209266 Transfer 04/11/2016 1.24 11599170 -216000 Transfer 28/10/2016 1.27 11815170 86391 Transfer 28/10/2016 1.26 11728779 538314 Transfer 21/10/2016 1.27 1.20 11/11/2016 15614684 -22 Transfer 02/12/2016 1.77 16531423 16228 Transfer 02/12/2016 1.77 16515195 367426 Transfer 25/11/2016 1.73 16147769 533085 Transfer 18/11/2016 1.67 3806248 Transfer 11190465 215689 Transfer 14/10/2016 23/09/2016 in Shareholding during the year specifying the reasons for increase Date wise Increase / Decrease 1.14 10661493 904 Transfer 23/09/2016 1.14 10660589 -6138 Transfer 16/09/2016 1.14 10666727 1808 Transfer 16/09/2016 -15 Transfer 10661478 1.14 30/09/2016 1.18 10974776 -8 Transfer 07/10/2016 1.18 10974784 126735 Transfer 1.77 07/10/2016 10848049 -27 Transfer 30/09/2016 and decrease (e.g. allotment/ transfer/bonus/sweat equity etc.) 1.16 10848076 186598 Transfer 1.16 Date 22/04/2016 14544113 03/03/2017 1.95 18190973 154232 Transfer 24/02/2017 1.93 18036741 -17971143 Transfer 17/02/2017 3.86 36007884 18036741 Transfer 17/02/2017 1.93 17971143 60073 Transfer 55326 Transfer 18251046 10/03/2017 1.96 18326578 -21748 Transfer 31/03/2017 1.97 18348326 60049 Transfer 24/03/2017 1.96 18288277 -728 Transfer 17/03/2017 1.96 18289005 37959 Transfer 1.96 At the end of the year 10/02/2017 17915817 17541081 373055 Transfer 06/01/2017 1.84 17168026 233675 Transfer 30/12/2016 1.82 16934351 37268 Transfer 23/12/2016 1.81 16897083 100030 Transfer 16/12/2016 1.88 1.92 13/01/2017 17609309 -88250 Transfer 03/02/2017 1.93 18004067 423396 Transfer 03/02/2017 1.88 17580671 6963 Transfer 27/01/2017 1.88 17573708 -35601 Transfer 20/01/2017 1.89 68228 Transfer 18326578 1.96 121 05/08/2016 1.44 13377782 -63838 Transfer 29/07/2016 1.44 13441620 -7303 Transfer 22/07/2016 1.44 13448923 -86734 Transfer 08/07/2016 1.45 13535657 -102391 Transfer 112383 Transfer 13275391 12/08/2016 09/09/2016 specifying the reasons for increase 1.43 13316217 77298 Transfer 02/09/2016 in Shareholding during the year 1.42 13238919 -2342 Transfer 19/08/2016 Date wise Increase / Decrease 1.42 13241261 -34130 Transfer 1.42 10/06/2016 1.44 13423274 8 GOVERNMENT OF SINGAPORE Company holding of the shares Shares No of % of total during the Year Cumulative Shareholding in share Decrease Increase/ Reason Date Sl. Name of the Share Holder No. 122 Shareholding at the beginning of the Year 08/04/2016 13776467 1.48 -97901 Transfer 146632 Transfer 03/06/2016 1.42 13276642 -133937 Transfer 06/05/2016 1.44 1.80 13410579 29/04/2016 1.45 13520770 -157796 Transfer 22/04/2016 1.47 13678566 -110191 Transfer 422921 Transfer 16797053 09/12/2016 No. Date Name of the Share Holder SI. LARSEN & TOUBRO 1.67 15573129 1.64 15309734 1.65 15356778 93636 Transfer -47044 Transfer 263395 Transfer 08/07/2016 30/06/2016 30/06/2016 Increase/ Reason 1.64 Decrease No of % of total Shares 86609 Transfer 29/07/2016 1.68 15684320 145138 Transfer 22/07/2016 1.67 15539182 -33947 Transfer 15/07/2016 Company holding of the in share shares Cumulative Shareholding 15770929 15263142 24/06/2016 20/05/2016 1.58 14764041 -110338 Transfer 13/05/2016 Date wise Increase / Decrease in Shareholding during the year specifying the reasons for increase and decrease (e.g. allotment/ transfer/bonus/sweat equity etc.) 1.60 14874379 236121 Transfer 06/05/2016 1.57 14638258 94145 Transfer 29/04/2016 1.56 617 Transfer 157302 Transfer 14764658 27/05/2016 1.62 15105840 37443 Transfer 17/06/2016 1.62 15068397 82074 Transfer 10/06/2016 1.61 14986323 80751 Transfer 03/06/2016 1.60 14905572 140914 Transfer 1.58 1.69 05/08/2016 19346 Transfer 1.78 16596502 68064 Transfer 04/11/2016 1.77 16528438 68 Transfer 28/10/2016 1.77 16528370 550645 Transfer 21/10/2016 1.71 15977725 68326 Transfer 11/11/2016 14/10/2016 -320258 Transfer 1.75 transfer/bonus/sweat equity etc.) and decrease (e.g. allotment/ 1.80 16796852 53124 Transfer 02/12/2016 1.80 16743728 127690 Transfer 25/11/2016 1.78 16616038 339794 Transfer 18/11/2016 Date wise Increase / Decrease in Shareholding during the year specifying the reasons for increase 16276244 1.71 15909399 171238 Transfer 02/09/2016 1.68 15673517 -204120 Transfer 26/08/2016 1.70 15877637 49027 Transfer 19/08/2016 1.70 15828610 38335 Transfer 12/08/2016 1.69 15790275 -47693 Transfer 15625824 1.68 09/09/2016 07/10/2016 1.69 15738161 59307 Transfer 30/09/2016 1.68 15678854 201 Transfer -82275 Transfer 1.69 15761129 -167266 Transfer 16/09/2016 1.71 15928395 302571 Transfer 23/09/2016 Increase/ Reason 4873530 during the Year No of % of total 1.02 9542924 -66233 Transfer 03/03/2017 specifying the reasons for increase 1.03 9609157 -45217 Transfer 24/02/2017 in Shareholding during the year 1.03 9654374 -31129 Transfer 17/02/2017 Date wise Increase / Decrease 1.04 9685503 880000 Transfer 11/11/2016 and decrease (e.g. allotment/ transfer/bonus/sweat equity etc.) 0.95 10/03/2017 9506255 No. SI. (v) Shareholding of Directors and Key Managerial Personnel: 0.99 9281045 At the end of the year 0.99 9281045 -51476 Transfer 31/03/2017 1.00 9332521 -56000 Transfer 24/03/2017 1.01 9388521 -117734 Transfer 17/03/2017 1.02 -36669 Transfer Name of Director / KMP 8805503 15/04/2016 1.13 10573070 609 Transfer 24/03/2017 1.13 10572461 669838 Transfer 17/03/2017 1.06 9902623 -15 Transfer 10/03/2017 Date wise Increase / Decrease in Shareholding during the year specifying the reasons for increase and decrease (e.g. allotment/ transfer/bonus/sweat equity etc.) 1.06 9902638 50960 Transfer 10/03/2017 Company holding 24/03/2017 27500 Transfer -233997 Transfer 1.11 0.94 8778003 19217 Transfer 08/04/2016 0.94 8758786 1.12 10429047 At the end of the year Shareholding at the beginning of the Year THE NEW INDIA ASSURANCE COMPANY LIMITED 11 1.12 10429047 -9581 Transfer 31/03/2017 1.12 10438628 99555 Transfer 31/03/2017 10339073 of the Shareholding at the beginning of the year 1 At the End of the year Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): M. M. CHITALE Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): M. V. SATISH Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): 0.00 30,703 At the beginning of the year 0.01 65,350 At the End of the year 0.01 55,350 10,000 26-Aug-16 (ESOP Exercise) At the beginning of the year 0.02 189,000 At the End of the year 30,703 15,000 0.00 42,875 Cumulative Shareholding 750 At the End of the year Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): SUBODH BHARGAVA 8 0.00 750 At the beginning of the year 0.00 1,629 At the End of the year 0.00 1,629 At the beginning of the year 0.00 42,875 At the End of the year 0.00 At the beginning of the year No. of % of total shares Shares 26-Aug-16 (ESOP Exercise) 174,000 107,056 At the End of the year 0.01 72,056 35,000 At the beginning of the year 26-Aug-16 (ESOP Exercise) 0.11 1,000,000 At the end of the year S. N. SUBRAHMANYAN Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/ sweat equity etc): 2 of the Company Shares Cumulative Shareholding during the year No. of % of total shares of the Company 0.11 1,025,000 (25000) At the Beginning of the year 10-Feb-17 Date wise Increase / Decrease A. M. NAIK 0.01 of the Company 0.02 127 SI. At the beginning of the year of the Company Shares No. of % of total shares Cumulative Shareholding during the year No. of % of total shares Shares Shareholding at the beginning of the year 7 6 D. K. SEN 5 Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): SHAILENDRA N. ROY Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): 4 R. SHANKAR RAMAN 3 Name of Director / KMP No. 128 shares 0.00 % of total 6466200 265731 Transfer 21/10/2016 0.67 6200469 14357 Transfer 14/10/2016 0.66 6186112 266010 Transfer 07/10/2016 0.63 5920102 -3 Transfer 30/09/2016 0.63 5920105 52882 Transfer 0.63 0.69 5867223 28/10/2016 6516988 0.73 6844791 -7400 Transfer 18/11/2016 in Shareholding during the year specifying the reasons for increase 0.73 6852191 148356 Transfer 18/11/2016 Date wise Increase / Decrease 0.72 6703835 166394 Transfer 11/11/2016 0.70 6537441 20453 Transfer 04/11/2016 0.70 50788 Transfer 25/11/2016 -3 Transfer 0.63 0.59 5515652 7226 Transfer 19/08/2016 0.59 5508426 15398 Transfer 12/08/2016 0.59 5493028 17140 Transfer 05/08/2016 of the Company holding in share shares Shares Decrease Shares 26/08/2016 23/09/2016 51168 Transfer 0.60 5867226 63313 Transfer 23/09/2016 0.62 5803913 81430 Transfer 16/09/2016 0.61 5722483 65528 Transfer 09/09/2016 0.61 5656955 90347 Transfer 02/09/2016 0.60 5566608 -212 Transfer 26/08/2016 5566820 and decrease (e.g. allotment/ 30/09/2016 6996121 9235198 10/02/2017 0.99 9235452 152485 Transfer 10/02/2017 0.97 9082967 -3592 Transfer 03/02/2017 0.97 9086559 109339 Transfer 03/02/2017 0.96 8977220 45581 Transfer 27/01/2017 0.96 0.99 8931639 17/02/2017 9363072 Cumulative Shareholding 151330 Transfer Decrease Increase/ Reason in share No. Date Name of the Share Holder SI. LARSEN & TOUBRO 1.06 9851678 167275 Transfer 03/03/2017 1.04 9684403 321331 Transfer 24/02/2017 1.00 127874 Transfer -14001 Transfer -254 | Transfer 0.96 23/12/2016 0.79 7374945 146194 Transfer 16/12/2016 0.78 7228751 -8240 Transfer 09/12/2016 300692 Transfer 0.78 7236991 78939 Transfer 09/12/2016 0.77 7158052 161931 Transfer 02/12/2016 20/01/2017 0.75 No of 7675637 transfer/bonus/sweat equity etc.) 30/12/2016 0.82 249920 Transfer 20/01/2017 0.93 8695720 93818 Transfer 13/01/2017 0.92 8601902 8945640 06/01/2017 0.92 8602993 633331 Transfer 06/01/2017 0.85 7969662 294025 Transfer -1091 Transfer CFO C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD / MANAGER / WTD LARSEN & TOUBRO NIL 657.90 0.205 0.244 0.132 4.368 148.548 crore * ceased to be a Director w.e.f. 1.8.2016 SI. Particulars of Remuneration no. (b) Value of perquisites u/s 17(2) Gross salary (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 0.223 Income-tax Act, 1961 Key Managerial Personnel CEO Company Secretary 0.000 0.000 0.496 1 0.000 Total Managerial 0.000 Total 0.050 0.108 Others, please specify Total (2) 0.290 0.060 0.146 Total (B)=(1+2) 0.461 0.562 0.405 0.382 0.290 0.404 0.205 0.205 0.060 0.146 0.382 0.285 Remuneration (A) + (B) Overall Ceiling as per the Act $ appointed as a Director w.e.f. 25.5.2016 % ceased to be a Director w.e.f. 15.5.2016 @appointed as a Director w.e.f. 27.5.2016 #Payable to respective Institutions they represent. 0.115 0.381 ما (N. Hariharan) fees imposed section 17(3) Income-tax Act, 1961 C. OTHER OFFICERS IN DEFAULT Penalty Punishment Compounding 0.99 0.05 0.07 1.11 Not Applicable Section of the Companies Act Brief Details of Description Penalty/ Authority [RD/ NCLT/COURT] Punishment/ Compounding Commission # NIL Compounding (c) Profits in lieu of salary under Punishment B. DIRECTORS 2 Stock Option Not Applicable 3 Sweat Equity 4 Commission - as % of profit - others, specify... 5 Others (Contribution to Provident Fund & Superannuation Fund) Total VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES: Туре A. COMPANY Penalty Punishment Compounding Penalty committee meetings 1.29 0.067 4.82 4.32 51.92 - others, specify... 5 Others (Retirement benefits, 38.04~ 3.51 2.38 1.93 1.57 1.44 48.87 Contribution to Provident Fund & Superannuation Fund) Total (A) 78.91 23.71 14.35 5.84 12.04 7.41 18.24 1.41 NIL 1.01 1.01 9.81 19.27~ 7.18 3.15 2.98 0.37 0.63 14.57 2 Stock Option 3 Sweat Equity 4 Commission - as % of profit 11.29 0.010 0.038 Ceiling as per the Act 7.40 144.18 0.342 0.150 0.165 0.310 0.220 NIL 0.150 0.191 0.104 3.168 Others, please specify 0.000 Total (1) 0.461 0.562 0.405 0.382 0.404 0.205 0.205 0.382 0.285 NIL 0.205 0.244 0.132 3.872 2 Other Non-Executive Directors Fee for attending board / 0.380 0.495 0.339 0.322 7.77 0.055 0.053 0.028 0.704 0.072 0.065 598.09 ~Includes encashment of accumulated past service leave 32.21 crore and perquisite value related to employee stock options exercised during the year in respect of stock options granted over the past several years by a subsidiary company - 19.01 crore. REMUNERATION TO OTHER DIRECTORS B. crore Sl. Particulars of Name of Directors Total no. Remuneration MM Subodh M Vikram Sushobhan Adil Akhilesh Chitale Bhargava Damodaran Singh Sarker Zainulbhai Mehta Gupta Bahram Swapan Sunita Vakil Dasgupta Sharma % Sarma Thomas Ajay Subrmanian Naina Lal Sanjeev Narayanan Amount Mathew T❘ Shankar Kidwai Aga $ Kumar@ 1 Independent Directors Fee for attending board/ committee meetings Commission 0.081 0.067 0.066 0.060 0.062 0.055 0.040 NIL NIL Indian Construction Sector: A major push from the Government on the roads, railways, and urban infrastructure segments has helped construction companies improve their order book position. The sector's pace of recovery is, however, likely to be modest and will be linked to the on-ground impact of the policy measures including the release of 75% arbitral award as well as the availability of funds for project development. Short term demonetisation will have a negative impact on construction activities; however, the impact should subside and the situation is expected to normalize from Q1 of FY 2017-18 onwards. Significant improvements in the liquidity profile and credit metrics of construction companies will take time and will be contingent on an improvement in the 0.05 No. of shares % of total Shares of the Company At the End of the year 150 0.00 At the beginning of the year 885 0.00 At the End of the year 885 0.00 At the beginning of the year 150 0.00 At the End of the year 150 0.00 Cumulative Shareholding during the year At the beginning of the year of the Company 0.00 At the beginning of the year 9 M. DAMODARAN 10 11 Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/ transfer / bonus/sweat equity etc): VIKRAM SINGH MEHTA Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): SUSHOBHAN SARKER jointly with Life Insurance Corporation of India Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): 12 ADIL ZAINULBHAI Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): 13 14 AKHILESH GUPTA Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): SUNITA SHARMA jointly with Life Insurance Corporation of India Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): LARSEN & TOUBRO Shareholding at the beginning of the year No. of % of total shares Shares 150 Name of Director / KMP 100 At the End of the year Shareholding at the beginning of the year No. of % of total shares Shares At the beginning of the year 100 of the Company 0.00 Cumulative Shareholding during the year No. of % of total shares Shares of the Company At the End of the year 100 0.00 At the beginning of the year 100 0.00 17 18 1.73 19 AJAY SHANKAR 0.00 16 THOMAS MATHEW T. 100 0.00 At the beginning of the year 200 0.00 At the End of the year At the beginning of the year 200 0.00 100 0.00 100 0.00 At the End of the year 129 130 SI. No. 15 Name of Director / KMP Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): 0.99 No. Global Construction Sector: The story is more mixed. Investments are projected to increase through 2018, in line with a projected rise in oil prices, but overall spending levels will remain far below the historic highs of 2012 and 2013. Market consolidation will rebound, larger firms that survived the last few years now face pressure from shareholders, analysts, and other stakeholders to continue creating value. Construction players in a) after providing for depreciation in accordance with law; b) after transferring to reserves such amount as may be prescribed or as may be otherwise considered appropriate by the Board at its discretion 2) The profits for any previous financial year(s) after providing for depreciation in accordance with law and remaining undistributed; or 3) out of 1) & 2) both. The circumstances under which shareholders may not expect dividend/or when the dividend could not be declared by the Company shall include, but are not limited to, the following: a. Due to operation of any other law in force; b. C. Due to losses incurred by the Company and the Board considers it appropriate not to declare dividend for any particular year; Due to any restrictions and covenants contained in any agreement as may be entered with the Lenders and d. Due to any default on part of the company. FACTORS AFFECTING DIVIDEND DECLARATION: The Dividend pay-out decision of any company, depends upon certain external and internal factors- External Factors: Legal/ Statutory Provisions and Regulatory concern: The Board should keep in mind the restrictions imposed by Companies Act, any other applicable laws with regard to declaration and distribution of dividend. Further, any restrictions on payment of dividends by virtue of any regulation as may be applicable to the Company may also impact the declaration of dividend. 134 LARSEN & TOUBRO State of Economy: The Board will endeavor to retain larger part of profits to build up reserves to absorb future shocks in case of uncertain or recessionary economic conditions and in situation where the policy decisions of the Government have a bearing on or affect the business of the Company. Nature of Industry: The nature of industry in which a company is operating, influences the dividend decision. Like the industries with stable demand throughout the year are in a position to have stable earnings and thus declare stable dividends. Taxation Policy: The tax policy of a country also influences the dividend policy of a company. The rate of tax directly influences the amount of profits available to the company for declaring dividends. Capital Markets: In case of unfavorable market conditions, Board may resort to a conservative dividend pay-out in order to conserve cash outflows and reduce the cost of raising funds through alternate 1) Current financial year's profit: resources. Dividend shall be declared or paid only out of- of the Company and the cash requirement for financing the Company's future growth. In line with the past practice, the payout ratio is expected to grow in accordance with the profitable growth of the Company under normal circumstances. 0.07 1.11 Appeal made, if any (give Details) 133 Annexure 'G' to the Board Report DIVIDEND DISTRIBUTION POLICY INTRODUCTION As per Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, prescribed Listed Companies are required to frame a Dividend Distribution Policy. PURPOSE The purpose of this Policy is to regulate the process of dividend declaration and its pay-out by the Company which would ensure a regular dividend income for the shareholders and long term capital appreciation for all stakeholders of the Company. AUTHORITY This Policy has been adopted by the Board of Directors of Larsen & Toubro Limited ('the Company') at its Meeting held on 22nd November, 2016. The Policy shall also be displayed in the annual reports and also on the website of the Company. FORMS OF DIVIDENDS The Companies Act provides for two forms of Dividend: • Final Dividend The final dividend is paid once for the financial year after the annual accounts are prepared. The Board of Directors of the Company has the power to recommend the payment of final dividend to the shareholders for their approval at the general meeting of the Company. The declaration of final dividend shall be included in the ordinary business items that are required to be transacted at the Annual General Meeting. Interim Dividend This form of dividend can be declared by the Board of Directors one or more times in a financial year as may be deemed fit by it. The Board of Directors shall have the absolute power to declare interim dividend during the financial year, in line with this policy. The Board should consider declaring an interim dividend after finalization of quarterly/ half yearly financial results. This would be in order to supplement the annual dividend or to reward shareholders in exceptional circumstances. QUANTUM OF DIVIDEND AND DISTRIBUTION Dividend payout in a particular year shall be determined after considering the operating and financial performance DECLARATION OF DIVIDEND SI. Internal Factors: • and cheaper borrowing cost. Emphasis of the budget proposals on growth simulation through infrastructure development, focus on affordable housing, digitalization of the economy, Make in India campaign are expected to start showing positive results in the later part of the current year. Introduction of GST will create a common market, improve tax compliance and governance, thereby boost investment and growth. Certain downside risks do persist, especially on the banking sector front. High levels of NPAs and strained balance sheets of the banks pose constraints to funding for new investments. Structural reforms for debottlenecking the economic growth, bringing fiscal prudence in the state budgets and faster implementation of various development programmes of the Government are very important for speedy revival of investment climate. Business Scenario: The performance in the current year 2017-18 lays reliance on significant pick-up in Government led expenditure on development of rural and urban infrastructure, fast tracking of some defence orders and revival of domestic manufacturing sector. Select international markets continue to hold importance for business prospects of Hydrocarbon and Infrastructure segment. The Company has identified certain key thrust areas and strategies to focus on the upcoming opportunities. . Strengthening execution and operational efficiency: The Company is focused on bringing about cost & operational efficiencies for achieving profitable growth in the competitive business environment. The emphasis is on better contract and project management. The endeavor is to lower costs while maintaining quality and managing complexity. • Business value unlocking: The Company reviews its portfolio and looks for opportunities to divest from non-core businesses for unlocking value. The Company is focused on shareholder value creation and enhancing returns through monetization of some of the road concessions and the port assets as a part of its strategic plan. • . Emphasis on improving Working capital level: The Company will continue to focus on reducing the working capital levels by emphasis on speedy customer collections, accelerating invoicing of work completed and reducing inventory levels. Digitalization: The Company has identified digitalization as a key driver to enhance its global competitiveness. Various digitalization initiatives are under way to aid project monitoring and enhancing efficiencies. The Company is threading in various digital strategies into the business model and also simultaneously building relevant capabilities to harness the true power of digital assets. 137 138 Infrastructure Business F For FIFA 2022, L&T is building the Al Rayyan Stadium, using environmentally-friendly building materials and practices. L&T has been associated with several prominent stadiums in India and abroad. Infrastructure Business Scenario working capital cycle and in the pace of execution, besides their ability to deleverage by raising long-term funds through stake sale or equity placements. Revival of private sector participation will be key to faster infrastructure development. Railways will be one of the biggest drivers of infrastructure capex over the medium term. LARSEN & TOUBRO Apart from the various external factors, the Board shall take into account various internal factors including the financial parameters while declaring dividend, which inter alia will include - In the fiscal year 2017-18 India is expected to grow to around 7.2% provided macroeconomic parameters are favourable. There is an uptick in India's exports based on global economic activity. Consumption is also expected to witness traction as the economy catches up after demonetization Overview of Indian Economy: . Magnitude and Stability of Earnings: The extent of stability and magnitude of company's earnings will directly influence the dividend declaration. Thus, the dividend is directly linked with the availability of the earnings (including accumulated earnings) with the company. Liquidity Position: A company's liquidity position also determines the level of dividend. If a company does not have sufficient cash resources to make dividend payment, then it may reduce the amount of dividend pay-out. • Future Requirements: If a company foresees some profitable investment opportunities in near future including but not limited to Brand/ Business Acquisitions, Expansion / Modernization of existing businesses, Additional investments in subsidiaries/ associates of the Company, Fresh investments into external businesses, then it may decide for lower dividend payout and vice-versa. Leverage profile and liabilities of the Company. Any other factor as deemed fit by the Board. RETAINED EARNINGS The portion of profits not distributed among the shareholders but retained and used in business are termed as retained earnings. It is also referred to as ploughing back of profit. The Company should ensure to strike the right balance between the quantum of dividend paid and amount of profits retained in the business for various purposes. These earnings may be utilized for internal financing of its various projects and for fixed as well as working capital. Thus the retained earnings shall be utilized for carrying out the main objectives of the company and maintaining adequate liquidity levels. PARAMETERS THAT SHALL BE ADOPTED WITH REGARD TO VARIOUS CLASSES OF SHARE The Company does not have different classes of shares and follows the 'one share, one vote' principle. REVIEW & AMENDMENT The Policy shall be reviewed as and when required to ensure that it meets the objectives of the relevant legislation and remains effective. The Executive Management Committee has the right to change/amend the policy as may be expedient taking into account the law for the time being in force. 135 136 MANAGEMENT DISCUSSION AND ANALYSIS Overview of World Economy: In 2016 the global economy witnessed slow pace of growth and uncertainties with developed countries adopting protectionist policies. The current year is showing signs of revival of investment climate as the capital markets gain buoyancy, signs of recovery in manufacturing and trade, likely upside in the economic activity in Japan driven by healthy net exports and European countries witnessing traction in domestic demand paving way for growth. Advanced economies are expected to make small step-ups while growth in emerging economies continue to drive the global growth projections. China is expected to showcase favourable growth with strong policy support. Oil prices have shown traction in the recent months and are expected to be range bound thus bringing down the level of budget deficits in Middle East, allowing the Governments to have additional fiscal space to increase investments. However protectionist policies by the US and geopolitical risks persist that may pose impediment in the global economic recovery. The advanced economies are facing persistent structural problems such as low productivity growth and high income inequality. Against this backdrop, economic policies have an important role to play in staving off downside risks and securing the recovery. Amidst the global backdrop, Indian economy stood steadfast on its growth trajectory. In the framework of robust macro-economic stability, the year 2016-17 was marked by a few but robust policy developments such as passage of bankruptcy code, constitutional amendments paving way for GST and demonetization of notes in the pursuit of enhancing formalization of various segments of the economy. The GDP growth for the year 2016- 17 at 7.1% was lower as compared to the previous year on account of weak investment sentiments even though Government enhanced spending and exports rose over the last few months of the year. Demonetization had a temporary adverse impact, as labour-intensive construction sector contracted. Growth in gross fixed capital formation slowed sharply in FY17 to 27.1% from 29.3% a year ago. 3.36 (3367.33) RAMAN V. SI. No. Name of Director / KMP 21 N. HARIHARAN LARSEN & TOUBRO Shareholding at the beginning of the year No. of % of total shares Shares of the At the beginning of the year 23,140 Company 0.00 Cumulative Shareholding during the year No. of % of total shares Shares of the Company Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): INDEBTEDNESS At the End of the year Indebtedness of the Company including interest outstanding/accrued but not due for payment Indebtedness at the beginning of the financial year i) Principal Amount* 23,140 0.00 crore Secured Loans excluding Unsecured Loans 0.00 Deposits 3,000 1,000 20 SUBRAMANIAN SARMA Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): ROY NAINA LAL KIDWAI Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): NARAYANAN KUMAR Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): SANJEEV AGA Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): At the End of the year At the beginning of the year 03-Feb-17 100 0.00 100 21000 0.00 At the End of the year 21,100 0.00 At the beginning of the year 100 0.00 At the End of the year As on date of appointment as Director 17-Jun-16 At the End of the year As on date of appointment as Director 13-May-16 At the End of the year 1,000 3000 100 0.00 0.00 Total Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): deposits Total (i+ii+iii) 845.95 9734.75 10580.70 * Principal amount mentioned includes interest due but not paid and interest acrrued but not due. Note 60 [C] & Note 60 [J] ^ Addition during the financial year includes interest accrued but not due 131 VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL: A. REMUNERATION TO MANAGING DIRECTOR, WHOLE-TIME DIRECTORS AND / OR MANAGER: 132 SI. Particulars of Remuneration no. 1 Gross salary (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 (b) Value of perquisites u/s 17(2) Income-tax Act, 1961 (c) Profits in lieu of salary under section 17(3) Income tax Act, 1961 crore Name of MD/WTD/Manager Total AM NAIK SN R SHANKAR D. K. SEN Indebtedness SUBRAHMANYAN M.V SATISH Amount iii) Interest accrued but not due* ii) Interest due but not paid* SHAILENDRA 9734.75 13102.08 ii) Interest due but not paid* 822.40 iii) Interest accrued but not due* 13924.48 Total (i+ii+iii) 822.40 13102.08 13924.48 Change in Indebtedness during the 10580.70 Addition^ 5595.91 7984.64 13580.55 financial year 5572.36 financial year Reduction 845.95 Indebtedness at the end of the (3343.79) i) Principal Amount* 23.55 Interest accrued but not due (79.80) (79.80) Exchange gain/(loss) 16844.54 11272.18 Net Change 2016. Implementation of these exciting solutions require a highly engaged work force and L&T Construction has been an early mover in this space. With 30,000 plus users and 2000 active groups, Workplace by Facebook has been a new and successful platform for collaboration and engagement since August All these digital solutions are throwing up a breadth of rich data at a high velocity. Big data analytics is the way forward for analyzing this data. L&T Construction is setting up an Analytics center of excellence with the right infrastructure and experienced data scientists. Project monitoring enabled by mobile technologies and advanced analytics are being rolled out across multiple project sites targeted at delivering the right insights to operations personnel to improve project progress. Immersive safety training powered by Virtual Reality is being developed. RFID technologies are being used for designing solutions for material tracking and management, and worker safety. Augmented and Virtual Reality based solutions. 3D scanning technologies such as LiDAR, Photogrammetry, satellite remote sensing are enabling accurate surveys in different terrains, resulting in better quantity estimations. Digital engineering and design have been set in motion with Building Information Management, Real time monitoring and analysis of Plant and Machinery operations powered by Internet of Things have started providing actionable data and insights that enable improvement in equipment utilization and productivity. In our endeavor to improve the workmen management system, linking of workmen database with their Aadhar and bank accounts is also being implemented. The 1600-bed multi-speciality Safdarjung Hospital in Delhi. On the whole, the business scenario has been just about reasonable. BUILDINGS AND FACTORIES Overview: L&T's Buildings & Factories (B&F) business vertical is a market leader in the arena of Engineering, Procurement and Construction (EPC) of airports, hospitals, stadiums, hotels, institutional spaces, IT parks, office buildings, elite residential buildings, high rise structures, mass housing 139 140 complexes, factory structures, cement plants and industrial warehouses. B&F has the expertise to offer 'turnkey solutions' right from 'concept to commissioning' across all the business lines cited above. B&F's competitive advantages include dedicated engineering design centers, competency cells, advanced formwork systems, mechanized project execution, wide network of consultants & vendors, digitized project control and a talented pool of employees. Business Environment Review The previous calendar year was challenging for the construction industry. Many of B&F's customers, specifically the private sector, deferred investment plans due to uncertainties caused by various economic developments. The liquidity crunch that already existed was further aggravated by demonetization and low-demand in the reality sector induced longer gestation period for various housing projects. In the international arena, the dip in crude oil prices continued to have a major impact on investments in the GCC sector. Most of the anticipated Airport projects have been deferred to the coming year. The results of the US Presidential elections & Brexit created uncertainty in the IT sector in India. The development of major hospitals and other institutional buildings have been deferred due to delays in budget allocations. L&T Construction is re-inventing its core business operations by leveraging Digital technologies. A range of solutions targeted at reducing operating costs, improving productivity, enhancing safety, and reducing execution time are being implemented. Significant Initiatives Digital is imperative for attaining competitive advantage in today's world of business. L&T Construction will continue to focus on Digital for building impactful solutions that fuel business growth. Digital in Construction Development of the Unnao Lucknow expressway 63 Km, 6 Lane Expressway in Uttar Pradesh. LARSEN & TOUBRO B&F has embraced the digital way to effectively control and monitor various aspects of operations to cut down costs and improve productivity. Value engineering, operational excellence, mechanized execution and composite construction methodologies have improved project cycle times, enhanced profitability and delivered quality. Latest technologies like Robotics in construction and 3D printing are being explored. In the road sector, the budget allocation for National Highways has been increased by 14% and stepped up to 67,000 crore in 2017-18. Outlook project monitoring, material & resource management; advanced sensors are being added to automate equipment operations to achieve better productivity and specialized P&M are being added to the fleet to improve execution process and quality. The 2D control system is being implemented on Motor Graders in a few of our projects. This system helps in controlling the blade movement so as to significantly improve the accuracy in grading while reducing the time and effort. Technology is the key to achieve operational excellence and digital technologies are the most promising to support business to optimize its functions. A lot of thrust has been put on developing and implementing digital solutions for better visibility and superior decision making. A host of solutions are being developed and are being implemented for asset management, Digital Initiatives During the year, Transportation Infrastructure business bagged 12 International Safety awards and 4 prestigious safety awards from National Safety Council (NSC), India. 3.4 Km Runway and Airside Development in Kerala - Airside works at Kannur international Airport Sambalpur Rourkela Road Project 162 Km, 4 Lane Highway in Odisha. • rapidly growing economies have spent the past decade focusing on their home markets, steadily building up cash positions and internal expertise. Now, as growth eases in their home markets, they are expanding outward and seeking to compete against established global players. • • Kanaktora Jharsuguda Road Project 66.9 Km, 2 Lane Highway in Odisha. . A few other projects which are in the final stage of completion include: • Vriddhachalam - Ariyalur Doubling project: Composite Railway Project (52 RKM). • Villupuram - Vriddhachalam Doubling project: Composite Railway Project (54 RKM). Bina-Ganj Basoda 3rd Line project: Composite Railway Project (52 RKM). • • Gr.149 Barauni - Katihar Railway Electrification Project (437 TKM). Projects completed during the year include: LARSEN & TOUBRO The major roads orders received in India are: the rehabilitation and upgradation of the Veer (Wadpale) to Bhogaon Khurd section of NH-17 from PWD and the rehabilitation and augmentation of the Helwak to Karad section of NH-166E to 2-lane for a length of 48 Kms from MORTH. BE • Maharashtra/Karnataka Border to Sangareddy Road Project 142 Km, 4 Lane Highway in Telangana and Karnataka Safety is imbibed as a 'way of culture' and is being implemented across all projects to educate and sensitize all on hazardous project activities and corresponding preventive measures. A Safety Innovation School, the first of its kind by any construction company in India, has been set up to impart safety training. A team of experts has been formed to study futuristic businesses and formulate suitable strategies to gain a competitive edge. • Secretariat for the Govt. of Andhra Pradesh 1. Two Projects were awarded the prestigious 'British Sword of Honor' from The Royal Society For Prevention of Accidents (ROSPA) more investments . High rise residential towers in various parts of the country • Rising internet usage has increased the requirement for data centers • Cement Plants 141 142 B&F is poised for steady growth in the forthcoming years against the backdrop of a reviving economy, improving business climate, healthy order book, wide customer network, strong organizational setup, efficient supply chain management, digitized work culture, requisite resources and a skilled workforce. Larsen & Toubro Oman LLC (LTO): Subsidiary Company LTO, a JV with Zubair Corporation LLC, has been providing engineering, construction and contracting services for nearly a decade in the Sultanate of Oman. The Company has an excellent track record in civil projects and continues to enjoy customer preference in the country. L&T, through its wholly owned subsidiary L&T International FZE, holds 65% in the Company. The oil price impact has limited the investment plans in the country. •Rise in medical tourism is expected to generate TRANSPORTATION INFRASTRUCTURE The Transportation Infrastructure business vertical is well-diversified in terms of its product range and geography of operations, spread across India and various GCC countries. The business offers its services in the fields of Roads, Runways (Airside Infrastructure) & Elevated Corridors (RREC), Railways Construction, Railways Systems & International Infrastructure. The business leverages its vast experience in Project Management, Engineering Design & Construction Management to achieve operational efficiency. It has Engineering Design Centers in Mumbai, Faridabad and Chennai and an Offshore Engineering Centre in Mumbai, besides Area Offices in India and GCC countries. In addition, the business has a competency development center at Kanchipuram, and undertakes workmen training at CSTI, Ahmedabad. GLARSEN & TO LIMITED L&T has deployed a new track construction machine capable of laying 2 km of tracks per day - setting a benchmark in high-speed rail construction. Business environment Transportation Business is keen to continue building a robust order book which includes orders in both Road and Railway sectors. The Railway Business has been awarded the largest ever composite package in the history of the Indian Railways by DFCCIL (Dedicated Freight Corridor Corporation of India Limited) for track laying, electrification and associated S&T works from Dadri - Rewari for 322 TKms (CTP 14) and electrification of 881 TKms from Mughal Sarai to New Bhaupur Section, Uttar Pradesh for Package CP 204. The Road business has secured various orders for the construction of highways during the year. On the International front, the business secured the extension of the Tripoli Road and Improvements of the Algeria Road project in UAE. Overview: Awards & Recognitions: Around 2000 km of coastal roads have been identified for construction which will help accelerate the development of Coastal Economic Zones. • 2. Nine Projects bagged the Gold Awards from The Royal Society For Prevention of Accidents (ROSPA) 3. Five Awards won from the Indian Concrete Institute 4. Three Projects bagged the Construction Week Awards L&T builds a wide range of residential projects, from elite towers to mass-housing complexes across the country. 5. Certificate of appreciation for Excellence in quality from Federation Of India Chamber Of Commerce & Industry (FICCI) Major Orders Secured and Under Execution B&F has secured landmark projects from prestigious clients, especially from various State Governments of India. Leadership has LARSEN & TOUBRO been maintained in the construction of various commercial and residential buildings in the country. Major orders were secured from esteemed customers for the construction of high rise Budget allocation for various AIIMS, IITs and other national institutions residential towers in western part of India. • Offices for IT companies . Airport at Cochin Technology Centre for a global oil major in Bangalore. Outlook To improve the country's infrastructure and to boost the economy, the Government has taken several good steps and B&F is optimistic and buoyant to capture the momentum. A few positive factors are furnished below: • "Housing for all" coupled with the Government's credit linked subsidy schemes and a rising middle class will drive demand for affordable houses • The GST reform should help in streamlining the manufacturing sector • Safdarjung Hospital and medical colleges for the Govt. of Odisha. Some of the key projects commissioned by B&F this year are: The Ministry has targeted constructing 15,000 km of national highways during 2017-18 that translates into 41 km of road construction daily. For Roads, Runways, (Airside Infrastructure) & Elevated Corridors (RREC) Business Indian Railways are reportedly planning its highest outlay of ₹ 1.31 lakh crore for FY 2017-18, New Orders ⚫ CC17-Metros Marquee Projects Commissioned The gamut of unique activities include execution of large diameter deep piles, marine piles, deep diaphragm walls, secant pile walls, plastic concrete cut-off walls, sheet piling, ground improvement, foundation testing and geotechnical investigation. business, with a fleet of sophisticated foundation equipment. It has expertise in the areas of river linking, marine structures and deep foundation- supported bridges, basement & underground structures, and deep shafts. L&T GeoStructure is a unique entity, focusing on deep foundations and ground engineering L&T Geostructure L&T has significantly contributed to the development of Ports by designing and executing 7000m berthing structures including Liquid Jetties, Container Terminals, Multipurpose Berths and Ferry Terminals. The company is proud to have built 14000m breakwaters and handled Armour rock of size 20T, Accropod - Max size 6.3 cum, the deepest breakwater (~18m) which is a state-of-the-art construction having adopted the innovative concept of partial replacement of rock core with dredged sand in the construction of breakwater. It has also executed other maritime structures like Shipyards, Caissons, Long Span Approach Trestles, Intake Structures which are unique in nature. The L&T Ports Business unit has been a part of building marine infrastructure that has given a great fillip to marine and waterway transportation. It is also one of the pioneers in the EPC construction of ports in India since 1950s thanks to which L&T's expertise in marine works is demonstrated all along India's coastline. Ports LARSEN & TOUBRO Specialised underground structures • Construction of Hydro Technical Structures for Ph-2 of KKNPP at Kudankulam, Tamil Nadu • Hydro-mechanical components such as gates, penstocks, etc., including erection of • • Pressure Shafts, Drop Shafts and Surge Shafts / Surge Chambers Large underground power and surface power houses Open and Underground De-silting Chambers Underground tunnels of various geometry and diameter (both concrete lined and steel lined) • • • Diversion weirs, Barrages, Concrete / Earthen / Rockfill Dams, including RCC (Roller-Compacted Concrete) dams Areas of expertise: terrains. L&T's Hydro Business is one of the most significant players in the development of Hydroelectric Power Plants and offers a comprehensive 'Water to Wire' range of services that facilitate the execution of Hydroelectric Power Projects on an Engineer- Procure-Construct basis in tough mountainous electro-mechanical equipment • 2 X 1,000 MW Kudankulam Nuclear Power Project 3&4 Kudankulam, Tamil Nadu • Construction of barrage across Godavari river near Medigadda, Mahadevpur Karimnagar District, Telangana • Cable stayed Bridge across Durgam Cheruvu Lake at Madhapur in Hyderabad in EPC. India's first 1200 kV Air-insulated Substation at Bina in Madhya Pradesh. The Transmission Line business offers turnkey EPC solutions in Overhead lines for Power Evacuation Extra High Voltage Substation Systems & Power Distribution Business Unit focuses on providing turnkey solutions for Extra High Voltage Air Insulated / Gas Insulated Substations for Utilities and Power Plants, EHV Cable & Communication backbone networks, Utility Power Distribution and Power Quality Improvement works, complete Electrical & Instrumentation solutions for various infrastructure projects such as airports, metros, etc. It offers integrated solutions and end-to-end services ranging from design, manufacture, supply, installation and commissioning of Transmission lines, Substations, Underground cable networks, Distribution networks, Power quality improvement projects, Infrastructure electrification, Solar PV plants, Battery energy storage system and Mini/ micro grid projects. Besides being a dominant player in the Indian market, the business enjoys significant share and a strong reputation in the Middle East, Africa and ASEAN markets. L&T's Power Transmission and Distribution business vertical is a leading EPC player in the field of power transmission and distribution and solar energy. Overview: DISTRIBUTION POWER TRANSMISSION & The Union budget 2017-18 has given a major boost to the infrastructure sector. In the FY18 budget, the government has allocated a record 3.96 lakh crore to the infrastructure sector which should spur economic activity. A majority of this allocation has been ear-marked to build Metros, Bridges, Hydro Power Projects and Tunnels, which form the core expertise of the Heavy Civil Infrastructure business. The Government intends to build an effective infrastructure system to make domestic economy more competitive as compared to those of other emerging countries. With macros improving, and measures to revive infrastructure sector through new forms of awarding (Hybrid Annuity Model/Swiss Challenge Mode) and new forms of financing (REITs and InVITS), it is believed there will be a revival of stranded projects and easing of cash flows which will provide long term growth visibility. Also, as ever Heavy Civil Infrastructure business is focused towards EPC projects. Outlook In order to optimise the cost and enhance productivity, Heavy Civil Infrastructure has implemented several digital initiatives including P&M tracking and Monitoring, Project monitoring & Control using mobile based applications, use of E-Measurement books, Workmen tracking using RFID, etc. BIM (Building Information Modelling) is being extensively used in Metro projects for Design and progress monitoring during execution. The Business is exploring the possibility of using Drones for survey for various projects. Digital Initiatives • LPG underground storage cavern 200 m below ground level one of the largest of its kind, and the first of its kind in South Asia • 7 Powerhouses including both underground and surface structures • 12 dams / barrages / weirs 90 km of tunnelling in difficult Himalayan terrains 148 147 • 306 km of metro (including ongoing projects) 8,315 MW of clean and green power • 8,080 MW of reactor containment structures • Part of commissioned India's first 1,000 MWe nuclear power plant of Railway Bridges under construction • 2.16 km of Railway Bridges completed, 13.89 km • 2.65 km of Cable Stay bridges completed, 11.82 km of Cable Stay bridges under construction Track Record For Railway Business . Ahmedabad Metro - UG PKG 2 Hydroelectric Power Plants L&T has built the longest Extra dosed bridge in India across river Narmada at Bharuch, Gujarat. Currently L&T is building the longest extra dosed bridge in the world at Patna, Bihar in a Joint Venture with Daewoo and is undertaking 3 other Iconic bridges across India and a major railway bridge project at Khulna, Bangladesh. Across River Mandovi in Goa, L&T is building one of India's longest cable-stayed bridges. L&T has built some of the finest bridges across challenging terrains, incorporating design features that are among the most complex of their infrastructure stimulates economic demand and creates jobs. Over the medium and longer-terms, well-designed infrastructure projects drive productivity by deepening markets and making economies more competitive. LARSEN & TOUBRO projects in india Lucknow Metro, one of the fastest completed metro rail Infrastructure is a powerful lever for economic growth, with both a positive short and long-term impact. In the short-term, investment in Business environment The business has strong presence in India, the Middle East, Bhutan and Bangladesh. In-house design strengths and unique construction methodology cells provide competent concept- to-commissioning solutions to meet customers' requirements. The Heavy Civil Infrastructure business vertical of L&T Construction undertakes design, engineering and construction of projects in several segments that are crucial to the economy: Metros, Nuclear, Hydel, Ports, Special Bridges, Tunnels and Defence. Overview: HEAVY CIVIL INFRASTRUCTURE Increased infrastructure investment, particularly in the UAE, Qatar & Kuwait, should further support the recovery in non-oil activity this year. Both UAE and Qatar have firm deadlines by which they need to deliver world class events that require substantial new infrastructure. balancing around USD 50 per barrel, the spending cuts should be less impacted. Heavy Civil Infrastructure was able to report The growth projection and development in Middle East countries is mostly driven by the oil prices. Looking at the recent prices of crude oil which is High speed Rail Project connecting Mumbai - Ahmedabad is emerging opportunity for this business. Our Railway business has opportunities in Track, Electrification and Signalling & Telecommunication (S&T) works. Upcoming metros projects will provide more business opportunities for this segment. 20,000 crore for capacity augmentation in 2017-18 backed by innovative institutional funding. In the electrification space, the business intends to participate in 'large value projects' and 'projects in EPC mode'. Indian Railways' initiative Mission Electrification envisages electrification of nearly 25,000 RKM in 5yrs (2016-21). During the current year, opportunities are expected to the tune of 3.74 lakh crore have been announced in the Budget and are likely to fructify in next 5 years. The Railway SBG will focus on the remaining packages of the Eastern DFC which includes 3 packages for systems and one package for Civil and Track. Three more New Freight corridors totaling 5773 RKM with investment of The opportunities for Railways SBG on the mainline Railways will essentially come from the tenders floated by RVNL and Zonal Railways which are of significant size and high value and will be on EPC mode with internationally accepted FIDIC conditions. crore. an increase over last year outlay of ₹ 1.21 lakh 144 143 One of the many flyovers built by L&T in India. kind. The Company has pioneered several new technologies for the construction of bridges such as incremental launching, segmental construction, cable stayed, precast, prestressed concrete, steel and concrete composite construction. Apart from a pan-India projects scape, the business has presence in Malaysia, Dubai, Oman, Jordan and Bangladesh. The business is also targeting integrated systems projects in various countries while exploring opportunities in some select African countries. Emphasis on integrated projects are in line with the long term vision of the business which is to become a full range system integrator in Railway Projects. organic growth of 25% YoY for the 5th For International business Businesses of Heavy Civil Infrastructure are the foundation of a modern economy and vital for socio-economic development. The cornerstone of Heavy Civil Infrastructure's strategy relies on strong focus for leaner construction practices and commitment to customer satisfaction with the aim to optimize the value chain of its customers and to improve their competitiveness through increased productivity and reliability. Special Bridges consecutive year, even though the general market situation remained challenging. Due to challenging markets, improving profitability, productivity and flexibility became business's core focus areas in 2016. Actions were initiated to improve cost efficiency, productivity and strengthen its future competitiveness by, among other things, re-structuring operations. The results of these actions are expected to be visible in 2017. Expertise in Modular Construction Technology including seismic qualification, procurement and construction services Design capacity for end to end civil works Expanding Engineering, Procurement and Construction capability by venturing in to EPC contracts in LWR • • EPC solutions in civil, mechanical, electrical & instrumentation in PHWR projects With such impeccable credentials, L&T is emerging as a pioneer in supporting India's plan of supplying 25% of electricity from nuclear power by 2050. market share of 64%. With its proficiency, L&T is attracting the global companies in the field of LWR as tie-up partners to set up new plants in India. It is currently executing civil works for a mega order of 2 X 1000MW from NPCIL at Kudankulam Nuclear Power Project (LWR), one of the largest projects in India's nuclear industry. An underground section of the Chennai Metro. 146 145 Areas of expertise: • Underground tunnel construction using NATM, cut and cover and TBM methods Nuclear Power The specialty of L&T Construction is to offer EPC (Engineering Procurement Construction) solutions with single-source responsibility for execution of mega projects from concept to commissioning under the realms of Infrastructure facilities for Defence bases, underground facilities, niche technologies, security & surveillance and training facilities. L&T Construction, is well geared with comprehensive range of Engineering and Construction Services to meet the specialized needs of the Defence sector. With massive investments planned by the Ministry of Defence for developing world class systems, opportunities are aplenty for L&T Construction, which is well placed and equipped for execution. Defence • Elevated metro stations with expertise in spine beam concept (lean). Metros Underground station construction using top-down and bottom-up approaches . Dome erection at the Kakrapar Atomic Power project, Gujarat • Elevated viaduct construction using segmental, U-trough, l-girder methods and balanced cantilever construction Areas of expertise: L&T is a leader in the Indian nuclear sector by constructing the majority of the country's nuclear power plants. The business has developed expertise in both Pressurised Heavy Water (PHWR) and Light Water (LWR) reactor technologies with a The Heavy Civil Infrastructure business possesses expertise in end-to-end engineering and construction of elevated and underground metros using sophisticated tunnelling techniques. It ventured into metro rail construction in 2001 with the prestigious Delhi Metro project. Since then, L&T has emerged as the leading builder of metro systems in the country, executing as many as 17 ongoing projects across 8 cities in India. L&T is also involved in building major portions of the Riyadh and Doha Metros. The business also specializes in delivering metro projects on turnkey basis. Significant Initiatives The business has gained a significant foothold and recognition in the ASEAN market. The ongoing substation and transmission line projects in Malaysia and Thailand including South East Asia's largest gas insulated substation is on track. Though new prospects in the ASEAN countries witnessed certain delays in bid finalization due to low oil prices, currency volatility and leadership changes etc., they have gained traction of late. The business has strengthened its talent base to execute ongoing jobs in the ASEAN and African markets, vigorously pursuing emerging potential and creating corporate brand awareness and preference. The business continues to develop long-term relationships with its customers and foster strategic partnerships and alliances with key vendors and OEMs. With major thrust on Digitalisation as a key enabler, the business rolled out several initiatives including deployment of drones for project progress monitoring, connecting plant & machinery for asset monitoring, using geospatial technologies for surveys, etc. It has deployed mobility device based project monitoring tools across all its active Transmission Line projects. The workmen related processes are being linked through unique identification. Several operational excellence initiatives in the areas of on-time delivery, profitability enhancement, effectiveness checks of process implementation, working capital management and risk management are being pursued. In the Middle East, though the macro economic scenario was mixed during 2016-17, the business witnessed significant investments aided by FIFA 2022-related investments in Qatar, Expo 2020 related plans in UAE and stable T&D investment plans by KSA and Oman. High voltage transmission lines and substations to improve power reliability were entrusted upon the business by Saudi Arabian customers. Despite spend cuts induced by the oil price causing a sense of anxiety in the business climate, the business has secured a major order from KAHRAMAA involving 30 substations and 560KM of EHV cabling for the expansion of the electricity transmission network in Qatar. It continued to play a vital role in the 400kV Grid Substation network in Oman by securing another order. In UAE, the business could garner orders for constructing a number of 132kV GIS Substations from DEWA and reputed private customers in UAE. The business commissioned 36 substations including two 400kV Grid Stations in Oman, 2 cable projects and an Overhead Transmission Line. Having qualified for the highest voltage levels in its lines of business, the business has also added new private customers. The business has established strong presence in select focus countries of Northern and Eastern African countries. The 400kV substation project in Algeria has been completed. The substation projects in Ethiopia and Malawi, and the Kenya-Ethiopia electrical highway are progressing at the desired pace. The business has secured 400kV Substation and Transmission Line orders from utilities in East Africa. Apart from expanding the capacity of the existing Pithampur factory, a new Transmission Line Tower manufacturing facility is also on the anvil. operations include e-learning modules, improvised safety cards for reporting unsafe acts/conditions, virtual reality based training, upgrading Safe Operating Procedures (SOPs) to reflect changing work methods and mechanization, adoption of Sagging Bridge (Stringing Working Platform) technique and the use of motorized winch machines in place of tractors, in final sag activities and enhanced training on Behavior-based Safety, Safety Audit and Training the trainers. 151 152 Initiatives undertaken to enhance safety in The Solar business rolled out tracker technology on a large scale and is currently executing more than 200MW of tracker based projects. Through a first of its kind distributed generation project in Bihar, the solar business has entered into energy storage providing solar power to 200 villages. Buoyed by the ambitious capacity addition plans and faced with declining tariff trends, the Solar business was selective and has bagged over 300MW projects in 2016-17. One of the many 400 kV Gas-insulated Substations installed by L&T. Pradesh & Telengana 400 kV D/C Jammalmadugu - Urvakonda & 400kV QDMC line Tungabhadra- Yemmiganoor (150km) and 400kV Veltoor SS to Tungabhadra (73km) were commissioned. A major project for Maharashtra State Electricity Transmission Co. Ltd (125km) for strengthening Mumbai Metro was completed. Business Environment The Transmission Line business has commissioned about 20 transmission corridors of 2400KM length in FY16-17. The projects commissioned include India's first longest 765kV D/C Kudgi TL (380 km) and 400kV Quad Moose D/C Madhugiri to Bidadi Transmission Line (94km). Yet another HVDC transmission line 800kV HVDC Champa- Kurukshetra Pkg-6 (208km) was commissioned for PGCIL. At 765kV level, Varanasi - Kanpur Transmission Line (281km), 765kV S/C Lalitpur- Agra UP line-Ckt-l & Ckt-ll (234km), ERE03 & ERE04 Srikakulam Vemagiri TL(168km) are among the major projects commissioned. Besides the 400kV Multicircuit Karamadai - Coimbatore Transmission Line, a fast track project viz. 400kV D/C Quad line-Kamudhi-Karaikudi Transmission Line (112km) was completed for Tamilnadu Transmission Corporation Limited. In Andhra As a part of its localization and diversity enhancement strategy, the business expanded The Solar business provides single point EPC turnkey solution for solar PV related projects along with Energy Storage Solutions. Its experience spans across from flat to highly undulated as well as to landfill topologies with specialized technologies including designing & executing contours following solar PV power plants. The solar business has in-house capabilities of different module mounting structure types such as Fixed Tilt, Seasonal Tilt and HSAT to choose from for most optimal solutions. As grid stability and power conditioning requirements gain significance in the wake of large scale renewable integration, standalone and PV integrated storage solutions are being offered. The international units of the business in the Middle East, Africa and ASEAN offer complete solutions in the field of Power Transmission and Distribution, including High Voltage Substations, Power Transmission Lines, Extra High Voltage Cabling and Electrical, Instrumentation and Controls (EI&C) works for Infrastructure projects such as Airports, Oil & Gas Industries etc. in UAE, Qatar, Kuwait, Oman, Saudi Arabia, Bahrain, Algeria, Kenya, Ethiopia, Malawi, Botswana, Malaysia and Thailand. In 2016-17 too, the distribution sector in India maintained the momentum it had gained during the past years backed by several governmental initiatives such as UDAY scheme. Supported by central funding agencies, state utilities have laid emphasis on strengthening their respective distribution networks for better efficiency, accountability and management. The business continued to capitalize on these opportunities and successfully maintained its leadership position 765 kV Gas-insulated Substation, Varanasi. by securing urban and rural electrification orders from West Bengal, Odisha, Bihar, Uttar Pradesh and Karnataka under the Integrated Power Development Scheme (IPDS) and Deen Dayal Upadhyay Gram Jyoti Yojana (DDUGJY) scheme. The business is privileged to be partner with the central and state governments in illuminating thousands of households in the economically backward areas and electrify hundreds of villages. In a large number of towns, it has significantly improved the quality of power and reduced AT&C losses through distribution reformation projects. LARSEN & TOUBRO The EHV substation related opportunities in 400kV & 765kV GIS/AIS segments were steady as central and select state utilities concentrated on Power System Strengthening schemes to meet their demands. Though there were positive signs on the policy front, the general lack of investments in conventional power generation and industry segments continued. Gas and Air Insulated Substation orders were received from PGCIL and state utilities including a major substation for solar power evacuation in the state of Karnataka. The key substation projects commissioned include 765kV GIS at Srikakulam and the receiving substation for Lucknow metro. 149 150 230 kV double circuit transmission line at Abu Ali, Saudi Arabia. viz. that of Uttar Pradesh, Chhattisgarh, West Bengal, Punjab, Tamil Nadu, Bihar, Karnataka etc. Major projects are also being executed for private players. With its specialized transmission line construction crew experienced in challenging terrain & weather conditions and fast track projects, the business is presently executing several projects at 765kV AC, 400kV AC & ±800kV HVDC levels across the country. A prestigious order has been received from Medinipur - Jeerat Transmission Limited which is an SPV formed by Powergrid for the execution of the Eastern Region Strengthening Scheme-XVIII. Many orders have been received from Power Grid Corporation of India Limited across states. Two significant orders were bagged from Madhya Pradesh Power Transmission Company Limited for constructing a transmission corridor from Malwa to Badnawar through Pithampur. System strengthening schemes from Jharkhand Urja Sanchar Nigam Limited have been secured. The Testing Station continues to attract orders from its global customers including from USA, KSA, China and Malaysia. Transmission line projects have been executed for PGCIL as well as major state transmission utilities 60 MWp Solar Tracker Plant, Tamil Nadu With a stable political environment and the continuing need for strengthening of Transmission & Distribution network, LTSA is well poised to garner sizeable opportunities in the coming year. Such initiatives promptly earned awards and recognition for the business during the year. These include: 154 well for the business. The business is concentrating on key African economies that have a clear road map to build Substations and Transmission Lines to meet increasing demand. The next phase of grid strengthening in Botswana and Kenya will offer further prospects. Rural Electrification, Regional Interconnection and Grid Strengthening opportunities are being pursued in Northern and Eastern African countries. Power Infrastructure is being steadily ramped up by the ASEAN countries driven by growth prospects attributable to regional economic integration and strategic location. The rising power demand paves the way for significant investments in grid interconnections, grid development and strengthening. Also, a significant part of such investments is funded by multilateral agencies opening doors for participation of global players. With each ASEAN country representing a different aspect of the electricity sector needs, the business sees immediate prospects in Malaysia, Thailand and Myanmar. The overall outlook for the PT&D sector remains promising on both the domestic and the international fronts. The business looks forward to consolidate its position in established markets and gain significantly in new growth areas ably supported by its initiatives on cost leadership and smart delivery. Major Subsidiary Company: LARSEN & TOUBRO OMAN LLC (LTO) 153 LTO, set up in collaboration with Muscat Trading Company (Zubair Corporation Group), provides engineering, construction and contracting services in the Sultanate of Oman. LTO made its maiden venture into Oman in 1994 and has completed 23 years, emerging as one of the leading construction companies. During the past year, the Company managed to bag a slew of projects including a major 400kV Grid Station project. LARSEN & TOUBRO SAUDI ARABIA LLC (LTSA) LTSA is a wholly-owned subsidiary providing engineering, construction and contracting services in the sphere of T&D in the Kingdom of Saudi Arabia. During the past year, the Company secured orders for a sizeable number of projects involving High Voltage Substations and Overhead Transmission Lines. WATER & EFFLUENT TREATMENT Overview: Water is life. Growing pressure on water resources due to rise in population, economic growth, climate change, pollution and other challenges have had a major impact on our social, economic and environmental well-being. Many of our most important aquifers are being over-pumped, causing widespread declines in groundwater levels. Sensing the huge potential in this arena, L&T Construction's Water & Effluent Treatment and Transmission, bolstered by its state-of-the- art tower manufacturing units at Puducherry, Pithampur and Kanchipuram supplying over 1.3 lakh tones of tower components annually. The Testing and Research station at Kanchipuram accredited by NABL is one of the largest in Asia and is also amongst the most renowned testing centres in the world. (NABL: National Accreditation Board for Testing and Calibration Laboratories). The business expects a stable political and economic scenario in Oman with growing opportunities in the T&D segment. its Graduate Engineering Trainee programme to educational institutions in KSA and recruited young Saudi nationals as budding engineers. Africa's economic growth has been impressive and is predicted to remain robust. To sustain and support high growth rates as expected for Africa through economic diversification and industrial development, closing the current gap in power infrastructure will be crucial. The eagerness of multilateral funding institutions to sponsor infrastructure projects either directly through utilities or through infrastructure developers bodes brought down the tariff rates. With over 12 GW of solar projects yet to be installed in India, going forward, the momentum on projects execution is expected to remain upbeat. FY 2017-18 is predicted to gain further in terms of yearly addition compared to 5.5GW of installations in FY 2016-17 with some forecasts expecting close to 10GW. Energy storage integration into solar plants will see a rise due to grid stability requirements. • Transmission Line business received 'Best Safety Practice Award' from PGCIL for 800KV HVDC Champa Kurukshetra TL • Solar business bagged prestigious awards from Dun & Bradstreet, Construction Times, India Solar Week 2016 and Solar Today Award 2016 • Two Substation projects in Oman secured ASSE GCC HSE Excellence Awards • Projects in Saudi Arabia received the highest number of awards bagged by a single contractor from National Grid - Saudi Arabia. Prestigious National Safety Council of India award received for R-APDRP Varanasi Project In the Middle East, the business is cautiously optimistic in its outlook. The slow recovery of the oil price is not expected to hamper investments in the T&D sector though there may be policy measures such as taxation and currency de-pegging. Infrastructure development will continue as part of diversifying the economy and will be aided by events such as FIFA 2022. GCC grid formation, upgradation to higher voltage levels, integration of renewable energy sources to the existing power grid and interconnections of transmission networks are expected to fuel growth in power distribution throughout the Middle East. The revival of UAE market fueled by infrastructure growth related demand is a positive sign. In KSA (Kingdom of Saudi Arabia), continued Investment in basic infrastructure such as Housing, Roads etc. is fueling the Associated Power infrastructure projects. Power system capacity expansion to cater to infrastructure growth is proceeding as per plans in Qatar. Similarly, continued investments ensure steady growth in Oman. Input costs are bound to increase with introduction of VAT and removal of subsidies on fuel, power and water. However, these will have a similar impact on all the players. Prioritization of spending / budgetary allocation and related delays in project finalization are potential risks. • ROSPA, British Safety Council awards for safety performance for multiple projects In the power distribution front, the centrally driven schemes viz. Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) and Integrated Power Development Scheme (IPDS) continue to offer substantial opportunities for rural electrification and power quality improvement projects. The increasing cost of land and acquisition related delays have led Power Grid/ State utilities to increasingly opt for GIS Substations due to the less footprint they occupy. As the power transmission / transformation capacities increase to cater to the growing demand of urban centres, new opportunities will arise for EHV (Extra High Voltage) cabling projects in large cities keeping in view of the right of way, aesthetics and Operation & Maintenance aspects. Power quality improvement projects such as STATCOM, new clientele out of TBCB players, state utilities strengthening their networks with funding from LARSEN & TOUBRO L&T's capability in executing projects for power distribution includes switchyards. multilateral funding agencies, etc. are expected to provide a much-needed impetus. However, coal based power generation is yet to revive and hence associated evacuation substations are yet to resurface. The financial health of state utilities, the political situation in several states and the availability of funding will remain key determinants. System strengthening in state utilities will provide major impetus to transmission line prospects. Several interstate and intrastate transmission lines are expected to go through the Tariff Based Competitive Bidding route. In certain states, the capacity enhancement using the already existing corridor may provide opportunities as it eliminates the need for fresh acquisition of right of way thereby reducing costs and saving time. Substantial activity with many prospects is evident in the SAARC countries viz. Bangladesh and Nepal, as they are coming up with several high value prospects. The solar power market is poised to pursue its upward growth trajectory. PV module and finance costs have fallen for solar projects, this in turn has Outlook LARSEN & TOUBRO With safety & security an imperative for modern life, video based surveillance has emerged as a fundamental element of safety & law enforcement in urban areas. L&T's core strength lies in offering a whole spectrum of sustainable & scalable systems in security solutions for city surveillance & Homeland Security systems, Intelligent Traffic Management Systems, Critical Infrastructure across ports, airports, metros, IT parks & public buildings. Management In the International market, opportunities have been identified for desalination and sewage treatment plants in GCC. The business has already set its footprint in Tanzania and Sri Lanka and more are expected from these geographies. and extension activities. The Government has already set in motion an integrated Ganga conservation plan - 'Namami Gange' which envisages investments for sewage infrastructure across several urban habitations along the river. Stringent implementation of pollution norms is in place to encourage setting up of common effluent treatment plants. The Delhi-Mumbai Industrial Corridor (DMIC) is India's most ambitious infrastructure programme aiming to develop new industrial cities as 'Smart Cities' and converging next generation technologies across infrastructure sectors. The programme envisages development of infrastructure linkages like power plants, assured water supply, high capacity transportation and logistics facilities. L&T creates smart cities by offering integrated capabilities from several of its businesses - L&T Construction, L&T Electrical & Smart Digital Connectivity Reusable Energy COMMUNICATION Citizen Centre APPS & Agency Administration Government Automation, L&T Infotech and L&T Technology Services. Uulites Management Systema Smart Warts Management Smart Infrastructure SMART CITIES Systems Public Safety Management Smart God Building Management Systems System Water LARSEN & TOUBRO SMART WORLD & COMMUNICATION Overview: The Business segment is also executing a project for the implementation of an 'Early Warning Dissemination System' for coastal districts. The system is a 'First of Its kind in India' • • The segment is executing the comprehensive metro communication package for Lucknow Metro and is also executing TETRA communication network for Delhi Metro 2016-17 had been a year of technological expansion for the segment. The Business segment forayed into new areas like Wi-Fi Systems, Digital India, Early Warning Dissemination Systems, Connected Grids, etc. For a more secure and smarter world, a robust communication network & telecom infrastructure is an imperative. L&T Construction has the capability to provide end to end solutions for a range of requirements covering - Fiber Optic Backbone; Microwave & Satellite Communication; Network & Telecom Infrastructure; Wi-Fi System; Early Warning Dissemination Sys.; Emergency Response Sys.; Metro Communication to name a few. Infrastructure Business Communication Network & Telecom • The Security Solution segment has secured the prestigious project of creating Command Control Centres for 3 Cities in Rajasthan - Bharatpur, Bikaner & Jodhpur. • The Segment conceptualized utilization of existing Surveillance Infrastructure successfully and executed & commissioned city wide Wi-Fi project for Mumbai City. • It is currently executing the largest City Surveillance & Traffic Management network for the city of Hyderabad surveillance project comprising ~5,000 cameras at over 1500 locations in Mumbai City in 2016-17 • It commissioned the India's largest city It started with the Sabarmati Jail surveillance project and development of surveillance and intelligent traffic management systems for the Gujarat government in Ahmedabad, Gandhinagar and Vadodara. Business Environment Security Solution Business With this unique positioning and a technology driven portfolio, the business has been able to attract talent from across the industry in the smart city spectrum. System Integrator (MSI) for smart city projects. The Business Unit in L&T Construction leads all business initiatives in this realm and collaborates with L&T Infotech, L&T Electrical & Automation IC and L&T Technology Services to provide end-to-end solutions to customers. Hi-tech surveillance systems ensure 24X7 security at Mumbai 158 157 With a successful track-record complemented by domain knowledge across business verticals, L&T's Smart World & Communication Business Unit (SW&C) is well positioned to be a key Master India is rapidly gearing up to create smart infrastructure that will soon be the backbone of the economy. With the mandate to build a smart and digital India being at the top of the Government's priority list, this area will be abound with huge opportunities in the near future. The potential business opportunities are in the areas of city surveillance, intelligent traffic management systems, transport & logistics, OFC cabling, communication network including backbone, telecom infrastructure, smart governance & education, Critical Infra and Smart City Development. Smart Lighting SECURITY SOLUTIONS Transport Management Systems Outlook Business Environment The per capita water availability in the country is rapidly decreasing due to an increase in population and its consumption. The average annual per capita availability of water in India was 5177 cubic meters in 1915, which decreased to 1500 cubic towns. There are mega government policies to drive water infrastructure in India that include AMRUT (Atal Mission for Rejuvenation and Urban Transformation), Namami Gange, Pradhan Mantri Krishi Sinchayee Yojana and Delhi Mumbai Industrial Corridor Development. In addition, large investments have been proposed by multi-lateral funding agencies for water supply and sewer projects to improve the urban quality of life. Desalination and Water Management projects are likely to fructify during the current year due to the prevailing water stress conditions in most parts of India. Mega lift irrigation projects have been proposed across major states along with proposals to connect rivers with 15,000 km of canals. To this effect the Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) has been formulated with the vision of extending the coverage of irrigation 'Har Khet ko pani' and improving water use efficiency 'More crop per drop' in a focused manner with end to end solutions on source creation, distribution, management, field application g) Providing 24x7 Water Supply to Tumakuru city, Karnataka h) Sewerage integration work and sewage treatment at Barrackpore, West Bengali) Improvement of Water Supply to Greater Berhampur, Odisha j) Chaigaonmakhan Lift Irrigation Scheme, Madhya Pradesh k)Integrated Wastewater Scheme at Sri Ganganagar, Rajasthan I) Lift Irrigation Scheme at Clusters IX & XII, Odisha m) Alirajpur Lift Irrigation Scheme, Madhya Pradesh n) Nandawadagi Lift Irrigation Scheme, Karnataka o) Sauni Yojana Link-2 Package-4, Gujarat. Storage Reservoir at Vizag Steel Plant, Andhra Pradesh d) Bansujara Lift Irrigation Scheme, Madhya Pradesh e) 30 MLD CETP at Ahmedabad, Gujarat f) Comprehensive Storm Water Drainage Scheme at Vijayawada, Andhra Pradesh Hanamapur lift irrigation project, Karnataka. a) NC-35, NC-36, NC-37 Water Supply Scheme, Gujarat b) Sikar, Alwar & Bhiwadi Wastewater Scheme, Rajasthan c) Construction of Water The Business has also been successful in securing orders from various business domains like lift irrigation, drinking water supply, common effluent treatment plants, municipal waste water collection & treatment and integrated urban infrastructure. Some of these include: g) Ganga River Front Development Project in Patna, Bihar Sauni Yojana Link 3 Package 3 in Gujarat f) e) Lift Irrigation Scheme in Hanamapur in Karnataka d) Plant Water Systems at Raichur for RPCL in Karnataka which is recognized as Asia's largest Micro-filtration plant Water Supply Scheme in Pudukottai & Cuddalore in Tamil Nadu Bankura Water Supply Scheme in West Bengal b) 52 MGD Water Treatment Plant at South 24 Parganas in West Bengal a) Projects Commissioned & Orders Received The Water & Effluent Treatment Business has commissioned several important water projects in 2016-17. These include: The business has built over 2600 MLD of water treatment plants; laid over 31,000 km of water and wastewater pipeline; In addition the business has also laid pipeline networks to bring more than 1 lac hectare of land into cultivation. business segment has quickly enhanced its process knowhow and detailed engineering capabilities across all streams of Water and Wastewater business in India, Sri Lanka, Middle East and Africa. The formidable in-house engineering capabilities coupled with impeccable project management skills have put this segment much ahead of competition. LARSEN & TOUBRO 181 MLD water treatment plant for Vellore Water Supply scheme. 155 156 On the International front, the Business has secured a project in Sri Lanka for Provision of New Gravity Sewer, Force Mains and Pump Stations and another project in Tanzania involving extension of water transmission pipeline from the Lake Victoria Water Supply Scheme to Tabora, Nzega and Igunga The Government of India has plans to prevent the contamination of surface water bodies by stopping untreated wastewater flowing into these bodies. It also plans to adopt modern irrigation techniques so that the dependency on monsoon can be reduced. WET projects carry various risks like ROW issues, longer O&M periods, fund constraints with client, bulk materials shortage due to mining issues at various projects. These risks are mitigated by continuous follow-ups with the client, formations of a dedicated O&M segment, detailed financial analysis of clients during the pre-bid stage and meticulous planning. Risks & Concerns Developing design models using BIM. • In geo-spatial arena, usage of LIDAR survey in some of the wastewater projects. meters as per the 2011 census. It was estimated that by 2015, the per capita availability would go down further to 1100 cubic meters. Implementation of digital solution to track the productivity of some of the key assets. • b) Linking workmen database with Aadhaar and bank accounts c) Online risk management portal d) Application to monitor the progress of the projects online. Some of the other digital initiatives include:- WET business has implemented several digital initiatives like a) Online prospects tracker Digital Initiatives • Elimination of paper log/measurement books and adoption of online work measurements. Upcoming medium to large scale STP tenders will improve the quality of urban life. • Focus on Zero Liquid Discharge (ZLD) process along with combined effluent treatment packages in various states and industries across India Participation in Mega Lift Irrigation System tenders, in which water is not transported by a natural flow but is lifted with pumps Foray into Specialized WTP & Desalination with technology partnerships. • • With huge opportunities in integrated water supply prospects, lift irrigation, sewage and effluent treatment space, significant initiatives have been taken to ensure that the WET business of L&T continues to be ahead of competition, both in terms of market share and profitability. Some of these initiatives are:- Significant Initiatives Industries are planning to recycle and reuse their effluent by adopting advanced treatment technologies thereby reducing the consumption of fresh water requirement for their day to day processes. • The business has provided water infrastructure facilities, solar powered treatment plants, desks and important aids to visually challenged and differently abled children which has resulted in bringing down the number of school dropouts and increasing enrollment in schools. of Vishakhapatnam under the Smart City Mission. The scope of work includes citywide Surveillance, Variable Message Boards, Public Address Systems, Wi-Fi Access Points, Data Centre with Disaster recovery, Command Control Centre, Collaborative Monitoring and Facility Management Systems. Apart from these the Project includes implementation of Smart Elements such as Solid Waste Management System, Smart Transport, Smart Poles, Smart Lighting, Environmental Sensors and Enterprise Resource Planning. • The segment also secured an order to implement Smart City Solutions for the city • The segment also secured a prestigious Smart City project for Pune under the Smart City Mission of the Government of India for the development of Pune as a Smart City. The Pune Smart Elements Project includes enabling Wi-Fi at around 200 strategic locations, establishing Emergency Call Boxes and Public Address Systems, putting up Environmental Sensors, Variable Messaging Displays, Network Connectivity and Video analytics Integration. The project includes a state-of-the-art Smart City Operation Centre (SCOC) to integrate all its services and applications on a single platform. • In 2016-17 Smart World Communication BU secured India's 'First Integrated Smart City' project for Nagpur City in Maharashtra. The project scope involves laying of a citywide optical fiber network backbone, creating City Wi-Fi hotspots at key locations, establishing digital interactive kiosks and developing city surveillance systems with IP based cameras. Additionally, the city has identified a strip of approximately 6 kms to be developed as a 'Smart Strip' with state-of-the-art systems powered with smart ICT interventions like smart parking, solid waste management, smart lighting etc. LARSEN & TOUBRO L&T SW&C offers multi-pronged smart solutions on a turnkey basis that are postmodern & reliable for a whole spectrum of smart infrastructure which covers Smart city solutions, Integrated Command & Control; Smart Communication; Smart Mobility; Smart Energy; Smart Lighting; Citizen Apps, etc. Smart Infrastructure Business • Communication Business aligning with the vision for a Digital India is executing projects for creating communication backbone (GPON) and providing digital connectivity (Wi-Fi) across various locations of the country Outlook The segment has successfully commissioned the Jaipur Smart City Project - India's First Smart City. Excess capacity and aggressive pricing will continue to haunt the EPC players and it would reflect in the pricing and financials. The gas-based power plants are not expected to revive in India in the near future. However, South East Asia continues to offer good opportunities for gas-based plants. The business has taken various steps to enter these markets. The target countries for gas-based projects are Bangladesh, Sri Lanka, UAE and Indonesia. 163 Security Solution Business Eight ARDS reactors, ready for despatch to the Refinery and Petrochemical Integrated Development (RAPID) Project of Petronas, Malaysia. Overview: The Heavy Engineering (HE) business designs, fabricates and integrates custom designed, engineered critical equipment & systems to core sector industries like Fertiliser, Refinery, Petrochemical, Chemical, Oil & Gas, Thermal & Nuclear Power, Aerospace and for Defence applications. The business has a track record of executing large size and complex projects with capabilities, that include in-house engineering, equipped fabrication facilities, R&D centres, an experienced project team and safe work culture. The Heavy Engineering business is structured into two Strategic Business Groups (SBGs): • Process Plant Equipment and Nuclear • Defence and Aerospace 1) Process Plant Equipment and Nuclear (PP&N) SBG is involved in manufacture of large complex equipment such as hydro-processing reactors & high pressure heat exchangers for process plants and equipment for the nuclear power sector. Heavy manufacturing is undertaken at work centres located in Mumbai, Hazira and Sohar in Oman. Precision fabrication in stainless steel and titanium on process plant side is handled from Vadodara manufacturing facility. Fabrication of critical piping spools for applications in the power, refinery, petrochemical, fertilizer and chemical sectors is done in a separate unit located at Hazira. During the year, PP&N SBG underwent significant organisational changes to LARSEN & TOUBRO strengthen the marketing and execution teams. It also focussed on cost control and zero defect manufacturing, identified core and non-core products and consolidated its operations at Hazira. 2) Defence and Aerospace (D&A) SBG, having evolved from technology and product development to serial production of equipment and systems to platforms has resulted in the emergence of L&T as India's largest private sector company in the Indian defence sector. L&T is today engaged in design-to-delivery of solutions across its chosen defence segments. For over three decades, L&T has focussed on building indigenous products and technologies with Defence Research and Development Organisation, India (DRDO), as well as with its in-house research and development. D&A SBG has developed and produces naval platforms, artillery systems, air-defence systems, land and naval weapon systems, fire-control systems, naval equipment and systems, engineering systems for land and marine forces, military bridging systems, communication systems, missile sub-systems and rocket motors for space-launch vehicles. L&T is committed to "Make in India", and has invested in multiple work centres across the country dedicated for defence business, including assembly & integration facility at Talegaon near Pune, missile sub-system manufacturing facility at Coimbatore and defence electronics facility at Bengaluru. Besides these dedicated facilities, specific work-centres are set-up at Hazira for the strategic program, Ranoli for advanced composites, at Powai (Mumbai) for prototype development & testing and a site at Vishakhapatnam operated under GOCO model for a strategic program. L&T continues to develop indigenous products, systems and solutions for the 'Indigenously Designed, Developed and Manufactured' (IDDM), 'Make' and 'Buy and Make Indian' category of programs under the Defence Procurement Policy. It shall continue to invest in its Product & Technology Development Centre at Powai and Bengaluru. Business Environment: During the year 2016-17, in the Process Plant and Nuclear space, the oil prices continued to be in the range of 40-60 $/bbl resulting in lower revenues and profits for oil companies. This led to deferment of many investment decisions as well as cancellation / suspension of many projects announced earlier. Delay in procurement in the domestic sector also impacted order inflow in the nuclear business. Surplus capacities and limited demand has resulted in aggressive competition and has put extensive pressure on pricing and deliveries. Protectionist policies and export credit agency (ECA) financing has further limited the opportunities. PP&N SBG has focused on operational excellence to deal with the challenging market scenario and regain competitiveness. K9 VAJRA-T, a 155mm/ 52 Cal Tracked Self Propelled (SP) Gun, being built in collaboration with Hanwha Techwin. Some of the major orders executed in 2016-17 were ARDS Reactors and FCC Reactor Regenerator 167 168 Launch of India's PSLV from SDSC SHAR. Over the last 40 years, L&T has built critical subsystems for all of ISRO's space launch missions. Package for RAPID in Malaysia, K-COT Converter Unit for Lotte Chemicals in Malaysia, Heat Exchanger package for KNPC in Kuwait, Synthesis Loop Waste Heat Boilers for IFFCO in India, Steam Generators for NPCIL in India, and high pressure piping for Greensville Power Project at Virginia in USA. The SBG also booked orders from international power sector players - GE and Mitsubishi Hitachi Power systems for supercritical thermal power projects. In case of the D&A SBG, the Government of India (GOI) brought about major changes and improvements in policies in the defence sector. These were in consonance with the 'Make in India' and the 'Ease of doing business' agenda of the GOI. A marked shift towards indigenous procurement is evident from the clearances granted (82% by share and greater than 3.2 lakh crore by value) by the Defence Acquisition Council in the past two and a half years for Indian companies to participate as prime bidders. The overall policy framework is being modified to offer a level playing field for the Indian private sector and the defence public sector undertakings. 818 GOI has also advised a target of USD 2 billion for defence exports. Defence exports are a part of India's foreign diplomacy initiative, particularly in the South East Asian region. GOI may grant military aid export credit financing to promote such exports. 宙 166 164 Supercritical boiler manufactured at L&T's state-of-the-art manufacturing facilities at Hazira. As we go further, the impact of GST regime on the Power sector is another major area which needs to be analysed and seen. Major Subsidiary Companies: L&T-MHPS BOILERS PRIVATE LIMITED (LMB): LMB is a joint venture incorporated in India between L&T, having 51% stake and Mitsubishi Hitachi Power Systems Limited (MHPS) Japan, having 49% stake, for the engineering, design, manufacture, erection and commissioning of ultra-supercritical/supercritical boilers in India. The manufacturing hub of LMB is at Hazira, Gujarat while it has established design and engineering centres at Faridabad and Chennai. The company can manufacture ultra-supercritical/supercritical boilers up to a single unit of 1000 MW at its Hazira complex. The company received its biggest domestic order from NUPPL for 3X660MW Ghatampur Thermal Power Project. It also received its biggest export order from MHPS for supply of Pressure parts for 2X1000MW Central Java Project in Indonesia. The Hazira factory recorded the highest production ever since the start of the operations. The company also signed Technology and License agreement with MHPS for Selective Catalytic Reduction system. This will help the company to grab market opportunities created post issuance of strict environment norms in India. The company further strengthened its position in export market and received orders over 380 crore. L&T-MHPS TURBINE GENERATORS PRIVATE LIMITED (LMTG): LMTG is a joint venture incorporated in India between L&T and Mitsubishi Hitachi Power Systems Limited (MHPS), Japan and Mitsubishi Electric Corp. (MELCO). L&T has a 51% stake in the joint venture, with MHPS holding 39% and MELCO holding 10% stake. The company has a state-of-the-art manufacturing facility at Hazira, Gujarat for manufacture of STG equipment of capacity ranging from 500 MW to 1000 MW. The company is engaged in the engineering, design, manufacture, erection and commissioning of ultra- supercritical/supercritical turbines and generators in India. The year saw major improvement in the financials of the company on the back of good orders on hand. The factory utilization also improved substantially during the year. Exports continue to be the major thrust area for the company with global customers responding to the company's high-quality standards & competitiveness. The Company has aimed to add Repairs & Services and Spares business to its existing revenue streams to enhance its business portfolio and at the same time improve its factory utilization & financials. L&T-SARGENT & LUNDY LIMITED (LTSL): LTSL is a joint venture between L&T and Sargent & Lundy LLC, USA (S&L), a global Consulting firm in Power industry. L&T's stake is just over 50% in the joint venture. LTSL's main Design Centres are located in Vadodara & Faridabad. LTSL offers complete Power Plant Engineering & Consultancy services - from concept to commissioning. Besides having considerable expertise in gas based and sub-critical coal based power projects, the company is also involved in engineering of ultra-supercritical/supercritical coal based projects and forms the engineering base for L&T's focus on turnkey execution of ultra- supercritical/supercritical technology. LARSEN & TOUBRO The company continues to focus on major EPC Players from Turkey, Korea, SE Asia etc., for future business opportunities. The company was successful in having a breakthrough in Qatar during the year. The company was also successful in bagging three orders from Nationalised Banks & PSU agencies for offering project management consultancy (PMC) services to lenders for stressed power projects. The company also received various other domestic and overseas orders during the year. The company continued its high business standards which is demonstrated by engineering of around 24000 MW of generation capacity of gas-turbine based power plants and around 22000 MW of generation capacity of coal-based power plants, across the globe. L&T HOWDEN PRIVATE LIMITED (LTH): LTH is a joint venture between L&T and Howden Group, UK. L&T has 50.1% stake in the joint venture. The company supplies high end fans and air pre-heaters for thermal power plants. The company has a state-of-the-art facility for manufacture of fans and air pre-heaters at Hazira, Gujarat along with a fan testing facility. It also has a design and engineering centre at Faridabad. The company is optimistic about receiving the orders through LMB and other Boiler OEMs. On execution front, the company focused on streamlining of engineering, it also focused on the process improvements and capacity improvement. The company achieved full load of its APH basket production line and fan testing facility during the year. The recent environmental rules requiring FGDs will further boost demand for the company's axial fans. Further, the company has aimed to improve its project delivery and optimise the cost through various initiatives to make itself more competitive. Fabrication of a turbine for a power plant. 165 Heavy Engineering Business The union budget 2017-18 projected allocations that cover the areas of business being pursued by SW&C Digital India - Bharat Net; Smart City & AMRUT; Homeland Security and Border Management System; Metro & Railway Surveillance and Telecommunication; Emergency Response & Police Modernization, etc. The GOI has received recommendations from series of Committees with respect to the selection / short listing of private sector entities as Strategic partners (SP). SPS shall be entities with track record and industrial capabilities and each shall be identified for manufacture of large and complex defence platforms in an identified domain. This shall permit long term investment by the private sector and accelerate the acquisition process. L&T through its D&A SBG has been a long term player in the defence segment in India with a wide range of technologies, products, systems and complex defence platforms. Business potential of Flue-gas desulfurization (FGD) systems to meet the environmental norms has opened new opportunities and the business is ready to capitalise on it. The business also sees the opportunities in 'replacement market'. Some plants have aged and are due for retirement. These plants run at very low PLF, less efficiency level and are non-complaint to revised emission norms. Due to these factors, the old plants will be replaced with the new ultra-supercritical/supercritical technology which is much more efficient. It is expected that around 15 GW of ordering will happen in the next three to four years in the replacement market alone. ultra-supercritical/supercritical boilers, turbines, generators, pulverisers, axial fans, air-preheaters and electrostatic precipitators. It also has design and project management centres at Vadodara, Faridabad and Chennai that ensure international standards of project management, quality, safety and on-time delivery. The business has a state-of-the-art facility at Hazira in Gujarat, where it manufactures L&T's Power business has a pan-India presence with multiple project sites, project management centres & manufacturing facilities. Power business is one of the leading EPC players that provides "design to commission" integrated solutions in the field of coal and gas-fired power projects on a Lump sum turnkey basis. The successful completion of various projects and continuous additions of capacity has made the business "a proven and complete solution provider in the Thermal Power Segment". Overview: LARSEN & TOUBRO Natural-gas-fired combined cycle power plant built by L&T at Vemagiri in Andhra Pradesh. Power Business gained in Jaipur, Nagpur, Pune and Vizag. SW&C is well positioned to leverage the diversified offerings of L&T and collaborate with the State municipal corporations and governments to create smart infrastructure based on the experience Smart Infrastructure Business Under the Central Government's Smart City Mission for developing 109 smart cities across India, 60 cities have already been shortlisted, several of which are in advanced stages of RFPS and have received Central Govt. funding. These cities will be coming up with RFPs shortly and the balance cities are also likely to follow in 2017-18. Metro Communication packages in various cities project a good market potential. Metro projects for several cities are already in the pipeline and with the experience from LMRC & DMRC projects, the business unit is well positioned to tap these emerging opportunities. The business made a breakthrough in 2016-17 in the domain of Early Warning Dissemination Systems for Coastal districts of AP & Odisha. Other coastal states are also coming up with similar requirements to issue early alerts in case of cyclones and other natural calamities. With the Government's initiatives like Digital India and thrust towards e-governance, the National Optical Fiber Network (NOFN), which faced certain delays in 2016-17, with a mandate from DoT, will be translating to a large scale opportunity for development of a robust and nationwide broadband telecom infrastructure in 2017-18. The Bharat Net program plans to connect 2.52 lakh Gram Panchayats of the country with high speed digital network. Communication Network & Telecom Infrastructure Business space. Other areas such as Airbase and Naval base security are in the RFI phase. 160 159 Homeland Security is another area of importance for the Govt. of India. Border Security and Management Systems are expected to grow and business is anticipating big opportunities in this 2018-19. With special thrust by Central and State Govt. for Highway Managements Systems, the segment envisages traction for Integrated Highway Management System opportunities in 2017-18 & Several of the tier-2 cities are planning tenders for city surveillance & intelligent traffic management systems to ensure safety and security of citizens. The trigger for the surveillance business, will essentially come from the initiatives taken by State Police Departments, State Industrial development Authorities given that safety of people is a state subject. The business has an organization structure with focused business units supported by competency- based capability centres and service functions. In the Aerospace segment, Indian Space Research Organization (ISRO) plans to involve private sector as well as public sector firms for industrialising production of Polar Satellite Launch Vehicles Business Environment: 161 Though emergence of alternative sources in the form of renewables is another challenge for the business, it is believed that coal will continue to be the mainstay of the domestic power sector for providing reliable and robust base load. Looking ahead, the Power sector is expected to unfold many positive trends in the areas of generation, transmission & distribution. The impact of UDAY scheme and 100% rural electrification, etc. will also be seen in the years to come. Power sector in the country is set to grow to meet the increased demand which is likely to be fuelled by the expected GDP growth of the country. The business expects a major thrust from the Government to boost the sector with equal focus on thermal, nuclear and renewables like solar, hydro, etc. Outlook: through risk management practices and regular reviews. The business reviewed its internal controls and ensured that the controls which are commensurate with the size of its operations exist. It also continued with its risk mitigation initiatives The full-fledged office in Dhaka to support execution of current projects and tap new opportunities in the Power sector in Bangladesh is an example of management's foresightedness to expand in the territory. On the international front, the business will continue its focus on South East Asia and Middle East markets for gas-based power projects. For coal-based power projects, select opportunities in neighbouring markets are also being pursued. In its pursuit of portfolio enhancement, the business signed long-term technology licence agreements with Chiyoda Corporation for FGD and with Mitsubishi Hitachi Power Systems for SCR. The partnership with the world's technology leaders has provided an edge over its competitors in the new job opportunities that are coming up in the thermal power sector due to new emission norms notified by the Ministry of Environment, Forest & Climate Change, Government of India. The business formulated its business strategy with three-pronged approach of cost optimisation, portfolio enhancement and internationalisation. Progress monitoring, review mechanism, timeliness, department responsibilities and accountability have been identified as the key areas to ensure successful implementation of its strategy. Significant Initiatives: The business continued its focus on enhancing competencies among its employees through Power Training Institute to further its contribution to the sector. Recognition of the institute by the Ministry of Power, Government of India, a pointer in this direction. 'total quality organisation' for sustained business results. It also received the National Safety Award for the ongoing Rajasthan Rajya Vidyut Utpadan Nigam Limited's project at Chhabra. LARSEN & TOUBRO The awards from CII-EXIM Bank for business excellence and from FICCI for quality systems excellence are proof of the business's belief in business. It planned various initiatives to achieve cost leadership and at the same time, continued its focus on execution excellence and customer delight by demonstrating high quality and safety standards. at Dhuvaran in Gujarat. With increasing competition and shrinking market, cost optimisation has been the focal point for the Tenders for Flue Gas Desulphurisation (FGD) and Selective Catalytic Reduction (SCR) business started floating in the market. The Power business is hopeful of securing sizable orders in this new segment. The business continued its foray outside India and was successful in getting export orders worth over USD 200 million through its joint venture companies. During the year, the business bagged 1.98 GW of Boiler Island order from Neyveli Uttar Pradesh Power Limited through competitive bidding, while the main plant orders of 4.6 GW materialised in 2016-17. year. This makes the business optimistic and it anticipates that there will be around 40 to 50 GW of ultra-supercritical/supercritical ordering in coal-based projects over the next five years. On EPC basis, L&T undertook the 375 MW single-shaft combined cycle power plant project for Gujarat State Electricity Corporation 162 The Power sector saw sustained momentum across the power value chain like lower power deficits, reforms in distribution, capacity addition and grid augmentation during the 2017-18 looks promising for the SW&C business given the boost the government has given for safe and smart cities and other digital initiatives. Business continued to raise its own standards on 'delivery terms' to ensure contractual commitments and customer delight by saving time and money. Synchronisation of the first unit of Rajasthan Rajya Vidyut Utpadan Nigam Limited's (RRVUNL) project in record time of 42 months and hydro test of the first unit of Madhya Pradesh Power Generating Company Limited's project, three months ahead of the schedule bore testimony to this. It also achieved open cycle synchronisation of its two gas-based power projects in Bangladesh - NWPGCL 360 Bheramara CCPP & BPDB 225 Sikalbaha CCPP. KANA CONTROLS GEN. TRADE AND CONT. CO., KUWAIT The strategic focus of the Company remains to fill the technological and manufacturing gap in the country for critical heavy forgings for nuclear, strategic, defence and other engineering sectors. The Company has demonstrated its capability to manufacture critical forgings for the Indian Pressurized Heavy Water Reactor (PHWR) plants. It has also taken up the development of critical forgings for the next generation IPWR - nuclear plants. Discussions are on with foreign technology partners for possible development of forgings to meet their specifications for future Indian nuclear installations. SPECTRUM INFOTECH PRIVATE LIMITED (SIPL): SIPL is a wholly owned subsidiary of Larsen & Toubro Limited. SIPL concentrates largely on product development in embedded solutions, sensors, control and signal processing and undertakes technology development and manufacture of avionics LRUS for military applications. SIPL is certified by Centre for Military Airworthiness and Certification (CEMILAC) of the Ministry of Defence, India for the same. SIPL has obtained AS9100 Rev C, ISO 9001 and ISO 27001 certifications. The company continues to work with the Ministry of Defence and Hindustan Aeronautics Limited and its parent Larsen & Toubro Limited to jointly develop new products and enhance market presence. The Company is taking steps towards integration of its businesses with Larsen & Toubro Limited to drive growth and cost optimisation. LARSEN & TOUBRO HEAVY ENGINEERING LLC: Larsen & Toubro Heavy Engineering LLC is a Joint Venture with Zubair Corporation, established in Sohar, Sultanate of Oman. L&T, through its wholly owned subsidiary Larsen and Toubro International FZE, holds 70% in the Company. The Heavy Engineering facility was commissioned in October 2009. The Company focuses on customers and projects in the Middle East and supplements the manufacturing and fabrication facilities of Process Plant & Nuclear SBG in India. The Company has been impacted by thinning customer project margins due to intense competition, increase in costs due to local regulations. The Company has undertaken significant cost control and right-sizing decisions in the wake of the aforesaid. In addition to its direct outreach to customers in the Middle East region, it also proposes to align with other businesses/ subsidiaries of L&T Group in the future. 171 172 Electrical & Automation Business 11 12 CC 37 L&T offers India's widest range of switchgear to a variety of sectors - agricultural, industrial, building and commercial. For over six decades, L&T has been an industry leader in power distribution systems. Overview The Electrical & Automation (E&A) business of Larsen & Toubro Limited offers a wide range of products and solutions for electricity distribution and control in industries, utilities, infrastructure, buildings and agriculture sectors. Its basket of offerings includes Low and Medium Voltage Switchgear components, Electrical Systems, Marine Switchgear systems, Industrial & Building Automation Solutions, Surveillance Systems, Energy Meters and Protection Relays. The business is supported by its five decades of experience in in-house design & development that facilitates the introduction of contemporary products and a high precision tool manufacturing facility which is a pre-requisite for high quality manufacturing. E&A runs six Switchgear Training Centres across the country that impart training and learning on good electrical practices to engineers, consultants, contractors, technicians and electricians. Currently, E&A has manufacturing facilities at Navi Mumbai (Mahape & Rabale), Ahmednagar, Vadodara, Coimbatore and Mysuru in India as well as in Saudi Arabia, Jebel Ali (UAE), Kuwait, Malaysia, Indonesia, and the UK. The constituents of E&A business are two Strategic Business Groups (SBGs) and designated subsidiaries. In India, both the SBGS have under them two Business Units (BUs) each. The Products SBG includes Electrical Standard Products (ESP) and LARSEN & TOUBRO Metering & Protection System (MPS) business units while Projects SBG comprises Electrical Systems & Equipment (ESE) and Control & Automation (C&A) business units respectively. Business Environment Global economic growth rate is projected at 3.6 percent in 2017 compared to 3.4 percent in 2016. The pickup in global activity is projected to be more gradual especially in emerging markets and developing economies. The slowdown and rebalancing of the Chinese economy, upward movement in commodity prices, and strains in some large emerging market economies will continue to weigh on growth and profitability prospects in 2017-18. Other factors such as lower prices for energy, and the gradual tightening of monetary conditions in the United States and concerns of European market post Brexit still continue to cause uncertainty. Financial markets have been adversely impacted and global trade has contracted. Amidst these global headwinds, the Indian economy has held its ground firmly. The Indian GDP has grown at a robust 7.1%. Manufacturing sector did better than expected. Due to a good harvest and good rainfall after two years of drought, there is likely to be an improvement in rural demand which will translate into opportunities for the switchgear business. The LV Switchgear market is expected to grow between 8 to 10 percent and is expected to reach 7600 crore in 2020. Various Govt. reforms have been initiated such as Make in India, Smart Cities, increased infrastructure spending, etc. to boost the economy. New Initiatives like Dindayal Upadhyaya Gram Jyoti Yojana, UDAY, Smart Cities, Smart Grid, Pradhan Mantri Krishi Sinchayee Yojana & increased focus on renewable energy taken by the government, show a promising future. But these initiatives will take time to get to ground and start generating business. These initiatives will see incremental revenue for coming 5 years. Rising investment in alternative source of energy is expected to contribute to the growth of Medium Voltage and Low Voltage switchgear used for switching and general protection. Moreover, this application area will also trigger demand for Miniature circuit breaker (MCB) and Molded case Circuit breaker (MCCB). Telecom sector looks promising with grand scale launch of Reliance Jio, which has added competition in consumer market place. Further, this sector is witnessing consolidation. We received good share of business from Reliance Jio in 2016-17 and continue to expect similar business opportunities. Huge Infrastructure opportunities are seen in ASEAN region, especially in Indonesia and Thailand. Also, there are opportunities in Infrastructure segment in Qatar, Kingdom of Saudi Arabia and UAE particularly in Metros, Airports & Hospitals in the wake of FIFA 2022 (Qatar) & EXPO 2020 (UAE). Significant Initiatives: The business continued to devote its resources and capabilities to research and development endeavours, which is one of its core strengths. Its in-house design & development capabilities are rated among the best in the industry. The facilities at Powai-Mumbai, Ahmednagar, Mysuru, Mahape and Coimbatore are approved by the Department of Scientific & Industrial Research, Ministry of Science & Technology. These centres network with international labs, testing centres and academic institutions to keep abreast of new technology trends and introduce them to customers in different segments. 58988 L&T made a critical contribution to India's first nuclear-powered submarine 995 Visual for representational purposes only LARSEN & TOUBRO LARSEN & TOUBRO (PSLV), and to this effect, a framework is under discussion. Significant Initiatives: In order to maintain leadership position in the Process Plant & Defence sectors, focussed team initiatives have been undertaken under Organizational Excellence initiatives. The businesses have drawn up their Strategic Plan with sharp focus up to 2021, and profitable growth is the aspiration. It continues to invest in intra-organisational excellence initiatives like Six Sigma, Total Productive Maintenance, Workplace Management Systems and Knowledge Management to ensure superior quality products and services. People-centric initiatives, competency build-up, talent and leadership development remain vital to the growth strategies of the business. Sustainability and CSR initiatives have been undertaken by the Sustainability and CSR team of Heavy Engineering business with significant contribution by the employees and guidance from the central co-ordination teams. These include community development, skill development initiatives, volunteering by L&T employees for community welfare programs, community infrastructure development, contribution to educational infrastructure, health camps, monitoring water and electricity consumption and greenhouse gas emission etc. Health, Safety & Environment policies and programmes help increase awareness amongst employees, the community and our stakeholders. Outlook: The business outlook for Process Plant sector looks optimistic with major investments in South East Asia, MENA and domestic market. Nuclear Power Corporation of India Limited's (NPCIL) bulk procurement program shall be major opportunity during the year. In view of increase in global demand, Investments are expected in five to six refineries all over the world. Major opportunities include - Takreer in Abu Dhabi, BAPCO in Bahrain, DUQM in Oman, KNPC in Kuwait, Pertamina in Indonesia, Thai Oil in Thailand, CPC in Taiwan, and Dung Quat in Vietnam. Investments are also seen in the domestic sector by IOCL, HPCL, HMEL, and BPCL for capacity enhancement and BS-VI up gradation to comply with the applicable fuel standards. The low oil price has attracted investments in other value added products in the petrochemical sector. Major projects include - PTTGC - USA, SABIC - Saudi Arabia, Hengli- China and GCGV-USA. In Fertilizer sector, major opportunities include revival of sick FCI and HFCL units, energy saving and capacity enhancement projects driven by New Urea Policy 2015 (NUP 2015). In Thermal Power sector, potential exists in domestic projects at Ghatampur, Obra and Jawaharpur in Uttar Pradesh. Across the globe, some major opportunities are expected from the upcoming Combined Cycle Power Plants and Supercritical Plants especially in South East Asia and Middle East regions. In Nuclear sector, the GOI has approved annual budget allocation of ₹3000 crore for expansion of Indigenous Programme viz. Kudankulam 5&6 and End shields for a nuclear power plant being fabricated at L&T's Hazira facility. 169 170 PHWR projects. On foreign technology LWR project opportunities will be in the year 2018-19. For the D&A SBG, the simplified DPP 2016 came into effect from April 1, 2016. Defence procurement is expected to gain traction and programmes worth approximately 2 lakh crore for Indian industry are expected to get converted into orders over coming two years. The preference for indigenously designed and developed products will result in opportunities in newer domains. Over the medium-term, significant opportunities are envisaged in programmes for new-build naval (surface as well as underwater) platforms, refit of conventional submarines, artillery and air defence guns, close-in weapons systems, military bridging systems, missile programmes (repeat orders) and sub-systems for space launch vehicles. L&T is prepared for a proactive role in ensuring self- reliance of our nation through a successful 'Make in India' initiative. Major Subsidiary Companies L&T SPECIAL STEELS AND HEAVY FORGINGS PRIVATE LIMITED (LTSSHF): L&T Special Steels and Heavy Forgings Private Limited (LTSSHF) is a joint venture (JV) between Larsen & Toubro Limited (L&T) and Nuclear Power Corporation of India Limited (NCPIL), with L&T & NPCIL holding 74% and 26% stakes respectively. Dished ends forged at L&T's forging facility at Hazira, Gujarat. The JV has set up a fully integrated forging facility (from steel scrap to finished forgings of alloy steels, carbon steel & stainless steels) with a capacity to produce a single piece ingot upto 300 MT and forgings up to 120 MT in the first phase. These have applications in critical equipment in nuclear power and hydrocarbon industry, for rotors in power industry, blocks for oil & gas segment and for other heavy forgings for general engineering applications. Business Scenario The demand for heavy forgings is dependent on the outlook of the industry segments comprising refineries, petrochemicals, thermal and nuclear power, hydro power and other industries like steel. The JV has been witnessing fierce competition from global established players having excess capacities. The domestic sectors in the fields of nuclear and defence are expected to grow in coming years. 'Make in India' campaign is also likely to have positive impact on domestic manufacturing sector. The JV has been successful in getting approvals and qualifications from many key customers. The Company has been successful in manufacturing of high quality Stainless Steel grade forgings required for International Thermonuclear Experimental Reactor (ITER) and all critical forgings for 700 MW domestic nuclear power program. The JV is also developing special grade steels and forgings for domestic defence strategic programs. The JV has been manufacturing heavy forgings for refineries, petrochemical and fertilizer plants. The Company has successfully supplied Blow out Preventers (BOP) and forged blocks required for oil & gas segment The JV is focusing on stabilizing the production processes and improving manufacturing efficiencies so as to remain competitive in the market. A series of initiatives have been taken in the areas of cost control and improving process efficiencies. The Company has embarked on establishment of Quality Systems in the new facility, complying with ISO 9001. The Company has been accredited by NABL certification for laboratories. 18456 45 LTEAFZE acquired the Kuwait-based Kana Controls General Control & Trading Company in September 2013. Kana Controls, established in 1990, offers systems solutions in Automation & telecom. Kana Controls is approved with most customers in Kuwait and provides a good platform to serve the control and automation business opportunities in Kuwait. Also with increased focus on implementations of security and surveillance solutions by in-kingdom companies, Kana Controls is better placed for such jobs in Kuwait. Range of Digital Panel Meters With continuous low oil prices, some projects have been deferred but going forward, market is 175 176 showing signs of improvement and is expected to show growth with projects picking up speed of execution. Social infrastructure projects like hospitals and metros are expected to continue as planned and new high end infrastructure projects are being announced in Dubai market for Expo 2020 and Qatar Market for FIFA 2022. Our dedicated focus on GCC metro projects is expected to yield result in 2017-18. Also, unrest in Middle East and Africa region is shifting respective government priorities toward defence related initiatives. South East Asia market looks attractive as major investments are seen in building sector for Indonesia and power sector in Bangladesh. TAMCO GROUP OF COMPANIES: TAMCO is the leading manufacturer of Low and Medium Voltage switchgear in South East Asia with manufacturing facilities in Malaysia and Indonesia. Its products are widely used in power, oil & gas, construction and manufacturing industries. Through extensive R&D and advanced manufacturing technology, the TAMCO group is able to deliver high quality, safe, reliable and cost effective products. TAMCO's strength has been its flexibility to develop and adapt products to meet customers need and therefore has a high reference list across the globe. TAMCO celebrated 50 years of operations this year. Mumbai International Airport's Network Operations Centre - powered by L&T's Control and Automation solutions The business environment in 2016-17 continued to be challenging as low crude oil prices negatively impacted Tamco's main export market, the Middle East. There were lesser opportunities which led to price war between competitors and brought down the market prices of our products. In addition to that, a setback in its type test for Kahramaa, Qatar, affected all Utility and private market prospects in Qatar and also led to cancellation of over 300 crore of order backlog. Even the domestic Malaysian market was adversely affected by oil prices and political turmoil, leading to delays in projects and new investments. However, the depreciation of the local currency (Ringgit) helped it maintain its profitability in export jobs, despite drop in prices. The positives for the year were approval of its Gas Insulated Switchgear, GV3N in UK Utilities and approval in KNPC, Kuwait. TAMCO concluded an agreement with Fullpower, UAE to buy kits from it to build Gas insulated switchgears in Iran. Despite delays in new projects in Malaysia, TAMCO managed to secure a large share in Utility tenders and retained its market share in this market. TAMCO was also awarded the Frost & Sullivan award for "MV Switchgear manufacturer of the year" for the second year in row. Malaysian economy is likely to grow in infrastructure with many projects planned for the upcoming year. L&T ELECTRICAL & AUTOMATION FZE (LTEAFZE): L&T Electrical & Automation FZE (LTEAFZE) is a 100% subsidiary of L&T International FZE based in UAE. The company provides Systems Integration solutions in the Oil & Gas, Power, Water and Waste Water and Infrastructure space like Airports, Hospitals, Stadiums and Transportation segment like Metro and Rail. The solutions are centered around Process Automation and Telecommunication applications catering to customers/contractors in the Middle East, Africa, CIS and Turkey markets. It has a state-of-the-art integration facility in Jebel Ali Free Zone and is accredited with ISO 9001, 18001, 27001 and TUV for functional safety. LARSEN & TOUBRO With decline in oil revenues leading to shortfalls in budgeted incomes for all oil economies in the region compounded with heightened security concerns due to increased political disturbance in the region, there is a general slowdown in pace of O&G project investment. Nevertheless, O&G investments continued in Kuwait and Oman, while Qatar and KSA governments primarily are committed to improving their infrastructure. Airport, Metro / Railway, Hospital related investment continued to gain importance. With increasing number of System Integration companies in the market, the markets have become extremely competitive. As a result, LTEAFZE saw drop in Process Automation project opportunities from the O&G and Utility industries. However, it saw considerable scope for Infrastructure Automation with Building Management System along with Extra Low Voltage (ELV), Electronic Security (ESS) and Telecommunication (TCom) Systems. The Automation Product OEMs continue to lobby with end clients/consultants for restricting competition to limited participants through direct OEM bidder nomination. Despite stiff competition, LTEAFZE won a major order worth 500 crore from Qatar Rail Company (QRail) for Phase 1 of Doha Metro for a network- wide Building Automation & Control System. This project will build a significant reference for its business and open doors for many such opportunities in the future. Healthcare, Transport, Power Generation and key event driven development viz. FIFA 2022 in Qatar and EXPO 2020 in Dubai would continue to generate business opportunities through 2017-18. While some countries show some investment slowdown in energy and infrastructure sector, Oman, Qatar and Kuwait continue to move forward with earlier announced projects finalized earlier, which will give opportunities to LTEAFZE in 2017-18. Projects focused on any process improvement, Security, Surveillance and / or Environment friendly practices will generally continue to get implemented across industries. LTEAFZE is fast aligning with the new A&T arena with delivery capability as Main Automation or Telecom Contractor, and is poised to leap forward into the next league. L&T ELECTRICALS AND AUTOMATION SAUDI ARABIA COMPANY LIMITED, LLC (LTEASA): L&T Electrical & Automation Saudi Arabia Company Limited was established in 2006 as Limited Liability Company, where, 75% of shares are held by Larsen & Toubro International FZE and 25% by TAMCO Switchgear Malaysia Sdn. Bhd. It manufactures LV/MV switchgear/ control gear panels of all sorts and undertakes installation and commissioning of these products along with associated products viz., PLCs, Drives, Transformers, Cables, etc., to offer a one window solution to customers. The company has been approved by almost all major end users in the Kingdom e.g., SABIC and Saudi Aramco. The fiscal year 2017-18 will be a challenging year for LTEASA. The key focus areas for LTEASA during the year would be getting LV and MV approvals from SEC, Aramco and other consultants in KSA, providing better reach in Saudi market. As major growth opportunities will be generated from non-oil segments, the key focus area would be the infrastructure sector, especially Mega Metro and airport projects. Due to availability of product range now, LTEASA feels confident about addressing requirements in these segments. 177 178 HENIKWON CORPORATION SDN BHD, MALAYSIA: Established in 1982, Henikwon Corporation is a leading manufacturer of Low Voltage (LV) & Medium Voltage (MV) bus duct systems. The Henikwon acquisition brought strong customer base of large corporations to E&A's business and complements its portfolio to make comprehensive offerings for the building, industry and infrastructure segment projects across regions. It further enhances L&T's presence in South East Asia, India and Middle East markets. Henikwon offers high quality products that comply with international quality standards. The 12,300 sq.mt. manufacturing unit is located in Selangor state of Malaysia. Business environment in 2016-17 was not favourable and Henikwon lost orders, mostly on account of cost. With material content being more than 70% in its products, it will be crucial to maximize penetration in new smart & cost competitive 'S-line' range in 2017-18. Significant opportunities are seen in buildings & infrastructure segment in regions relevant to its operations. Henikwon is closely collaborating with key stake holders in some of the major infrastructure and metro projects coming up across multiple locations e.g., KSA, Qatar, Malaysia, India etc. Manufacturing of the product range in India has commenced which is likely to increase competitiveness. SERVOWATCH SYSTEMS LTD, UK Servowatch is a marine automation company based in Maldon Essex UK. Acquired by L&T in April 2012, it currently has 43 personnel working within the business. Servowatch is recognized as a world's leading system integrator for Modern naval platforms, Super Yacht installations and Commercial marine operators. Unique software design allows integration of third party software into a common operator platform environment. "Task Orientation" for specific user profiles with portability from station to station creates a highly redundant multifunctional operating environment. Typical applications include machinery, navigation, radar, electronic charting, internal and external communications, tactical sensors, auxiliary ship systems, camera networks, mission logging and playback functionality. The highly trained and professional teams at Servowatch are able to offer an extensive range of services. Servowatch partners with leading manufacturers of hardware and software to allow flexibility in meeting project requirements, and providing full through life product support capability. During the year 2016-17, Servowatch successfully completed MARS Project (Tankers for Re-fuelling UK Royal Navy built by DSME in South Korea) using the new software Winmon 9. The project includes total of 4 vessels out of which 1st vessel sailed for sea trials. This will be a significant reference for large naval vessel systems and open doors to other markets. With approval & successful sailing of the Royal Navy Ship, orders are also expected from New Zealand & Thai navy. 9452 Overall market will remain competitive as liquidity with major customers continues to be a case of worry. The business witnessed a financial crunch at major industrial houses due to which new plants/ expansion are not being announced. Overall industrial sector shows a muted trend. However, the business sees an upward trend in infrastructure sector (Metro, Airports, Railways, etc.) and its efforts in launching products for infrastructure sector are expected to yield results in 2017-18. The margins in infrastructure sector, however, are negligible due to competition from local players. The business also sees an improvement in demand from Agro/food processing industries during the year 2017-18. The Marine business sees a positive sentiment through 'Make in India' initiative taken by the government which emphasizes on indigenous content giving it an edge over foreign suppliers. Also Indian Navy has reckoned L&T as a strategic partner resulting in thrust on setting up Life Cycle Support facilities in the Navi Mumbai factory. Even with the new reforms initiated by the government, the core sectors continue to show no signs of pickup. However, launch of Schemes like DDUGJY and IPDS give hope to see a movement toward premium products like AMR, Prepaid & Smart Meters in the coming years. Also scheme UDAY is expected to improve health of DISCOMS which will lead to higher investment by the utilities. During the year 2016-17, LTEASA saw lower order inflow in view of deferment and cancellation of projects which led to drying up of the order book and lower sales, leading to a negative bottom line. While it is expected that stable oil prices may lead to revival of critical projects in KSA mainly in Oil and Power, the economy is expected to grow slowly. LTEASA received order from Alstom A/C Riyadh Metro for MV and LV equipment, and going forward, it expects many opportunities in Metros, Airports and Port projects. Introduction of VAT will impact buying decision and will have a favorable impact on local manufacturing. portfolio for solar solution. C&A also made a strategic alignment with IOmniscient (an Australian company) for its video analytics specialty. During the year, C&A also embarked on a journey to launch its own manufactured MV drives which is expected to be introduced in market by end of 2017-18 and completing C&A's LV & MV drive range. These initiatives have resulted into both, and intangible benefits, like cost reduction, saving of foreign exchange, expanded product range and expansion in offerings to the infrastructure sector. 23853 Business Outlook VISY CUAND in 2374 18455 45 AQHS 100 ATTARY ( 2223 AALAY SAMSTAR A FEED PMP C25 3445 174 BUSCOUPLER 173 N60 LOB-34333 In 2016-17, the Electrical Systems & Equipment ("ESE") business unit put in a lot of effort to introduce new product and technology absorption for better penetration not only in domestic market but also in international domain. ESE has increased its Low Voltage product portfolio by introducing ODU (Outdoor Unit) & Feeder pillars which are widely used in infrastructure segment. ESE has also introduced the most compact variant in GIS (Gas Insulated Switchgear) Family. This variant will give ESE an edge to set a new foot print in Wind energy segment. In the coming year 2017-18, ESE Research and Development team is working to introduce its FRTU (Front remote terminal unit) RMU & 11KV GIS (Gas Insulated Switchgear) for strengthening its infrastructure & utility portfolio. MC345H 2016-17 marked as an important year for Control and Automation (C&A) business with introduction to new technology. During the year, Control and Automation made an entry into Solar business with help of a tie up with an Italian Company for L&T branded Solar inverter completing the The technology and design of these meters and solutions is totally in-house with a high focus on quality and reliability and compliance to specifications and standards. In addition, MPS has also worked on improving cost efficiencies through the introduction of new cost-effective platforms for the core conventional meters. LARSEN & TOUBRO In 2016-17, the business unit has focussed on the introduction and deployment of meters and solutions for new segments which include Prepaid Metering, Automated Remote Meter Reading and Smart Metering. These solutions will enable L&T to participate in the upcoming Smart Grid and Smart City initiatives of the Government of India. The Smart Metering solutions are aimed at helping Electricity Utilities improve their efficiency by reducing aggregate technical and commercial losses through prepaid collection of money, meter reading free from human intervention, on-line alarms and alerts for failure/theft of energy, remote disconnection on non-payment of dues, etc. The range also includes bi-directional meters which are capable of recording energy generated through renewable resources like Solar and Wind. The Metering & Protection Systems (MPS) business unit is engaged in the design, development and manufacture of electricity meters, protective relays and metering solutions. The product range includes Meters for every segment of consumers as well as for inter and intra utility electricity exchange residential, commercial, industrial and feeder meters. Sub-main Distribution boards, new ratings in Omega range of Air Circuit Breakers and Busbar Trunking systems. New versions in submersible pump controllers for the agriculture market and DC contactors in telecom applications were also launched. Comprehensive product portfolio to provide solution for Power Quality Management was launched. SMARTComm solution is now available to its customers. In 2016-17, various new products and variants were introduced in the areas of power distribution and motor control. Some of the notable additions are AU range of final distribution products, In 2016-17, focused R&D activities have enabled ESP to have a healthy New Product Intensity (NPI) index of >25%-an index which measures the sales of products introduced in the market in last five years to the total sales in the financial year. During the year, E&A business filed as many as 101 Patents, 3 Trademarks, 4 Design applications in India, along with 2 foreign patent applications (both in Malaysia) and 18 foreign trade mark applications (6 trademarks each applied for registration in Indonesia, Vietnam and Malaysia). This was the 10th consecutive year of filing more than 100 patent applications. The business has received grants for 50 patent applications (46 in India, 1 in USA, 1 in Australia & 2 in European Patent office) Switchboard installation at a power plant. L&T provides power distribution and control solutions across the value chain, from generation to end user. LARSEN & TOUBRO During the year, the business received a number of orders for the supply of modularized structures and process modules for ongoing refinery projects in the Middle East and Africa. The vertical offers comprehensive solutions covering the entire spectrum of engineering across the oil & gas value chain, covering services from Concept to Commissioning, Troubleshooting, EPCM, PMC, Engineering & Procurement, Field Engineering, Asset Integrity Management and Operations & Maintenance. For the first time in India, high-end technology required for deepwater operations is being transferred and embedded, through our consortium partners, for ONGC's Vashishta & S1 deepwater field development project on the east coast of India. As part of this project, 13 subsea structures were fabricated at Kattupalli yard, in addition to high-tech spool base facilities for pipe reeling. Also during the year, the Kattupalli facilities achieved the load out of 8 legged jacket within record time for ONGC's Bassein Development project. Load-out of offshore modules for ADMA-OPCO, Abu Dhabi from Sohar Yard in Oman UL 4 Hydrocarbon Engineering Services: These facilities are situated on the waterfront with easy access to clients across the globe and have load-out jetties for the dispatch of large & heavy modules via ocean-going vessels & barges. The facilities are also accredited with global certifications and pre-qualifications from major oil & gas customers and have state-of- the-art equipment to deliver complex modules & structures, duly tested at the facilities itself. The business has executed projects for major private sector customers like Cairn Energy, Reliance Industries (RIL), HPCL Mittal Energy (HMEL) as well as major oil PSUs like BPCL, HPCL, IOCL, ONGC and international customers like Abu Dhabi Company for Onshore Oil Operations (ADCO), Abu Dhabi Oil Refining Company (TAKREER), Abu Dhabi Gas Industries (GASCO), Saudi Aramco, Sadara, Dolphin Energy etc. The business successfully completed an underground Pipe-in-Pipe System for transportation of cryogenic ethane, executed for the first time in India, for RIL at Dahej and installation of cross-country pipelines and construction of Gas Gathering Stations & Well-Site Facilities for Coal Bed Methane Development Project Phase I for RIL at Shadol. During the year, the business received three new orders for pipelines and associated works in the western region of India viz. Palanpur - Pali and Barmer - Pali pipelines for GIGL and Anjar - Mundra pipeline for GSPL. The business also received an order for composite mechanical works for the Low-Cost Expansion Project of HMEL at Bathinda and an order for additional work from an existing client in India. The Company's country specific entities render construction support to international onshore projects - Larsen & Toubro Electromech LLC in Oman, Larsen & Toubro ATCO Saudia LLC in Saudi Arabia and, Larsen & Toubro Kuwait Construction General Contracting WLL in Kuwait. An aromatic complex built on LSTK basis for ONGC Mangalore Petrochemicals Limited The vertical's major capabilities include heavy lift competency, advanced welding technologies, high levels of automation, management of manpower & material in large volume at construction sites and Quality / HSE systems conforming to international practices. The business has also invested in strategic construction equipment, a range of pipeline spread equipment, automatic welding machines and other plant and machinery for electro-mechanical construction works. The vertical renders turnkey construction services for refineries, petrochemicals, chemical plants, fertilizers, gas gathering stations, crude oil & gas terminals and underground cavern storage systems for LPG and cross country oil & gas pipelines. The Engineering Services vertical has a large resource pool of over 4 million engineering man hours. A large portfolio of industry-standard software tools, robust IT infrastructure, and in-house R&D facility augment its capabilities. Benchmarked through leading certification and accreditation systems, the engineering work processes ensure consistent product quality and on-time delivery. Hydrocarbon Construction Services: Hydrocarbon Modular Fabrication Services: This business vertical offers comprehensive modular Engineering, Procurement and Fabrication (EPF) solutions for projects primarily in the offshore and onshore oil & gas segments. World-class modular fabrication facilities at Hazira (India's west coast), Kattupalli (India's east coast) and Sohar (Oman) have a combined annual capacity in excess of 150000 MT depending on the product mix. These facilities offer competitive and year-round delivery capability with robust QHSE and delivery performance. During the year, the business has signed an Enterprise Framework Agreement with Shell Global Solutions BV for providing EPCM services for Shell projects in the Middle East, South East Asia, and India and has teamed up with Parsons to deliver engineering solutions in the Americas. The business secured EPCM contracts from HPCL, GCPTCL and Haldia Petrochemicals and also secured annual rate contracts with GSFC, IOCL, HPCL, ENGEN, Exxon Mobil, and SIPCHEM. The capability building initiative is well underway. This initiative aims towards building globally-benchmarked project leadership teams for executing large international projects and developing & institutionalizing an international project capability development engine. The business has also launched a Digital transformation initiative towards further improving productivity across the business functions. The oil & gas industry outlook has shown some improvement with recovery and stabilization of crude oil prices from USD 50 to USD 55 per barrel range. However, with global crude inventory levels still remaining high, OPEC production cuts had only a limited impact on price levels. The fiscal policy shifts in the Middle East have also resulted in uncertainty. Payment terms and distribution of risk are becoming increasingly less favourable to EPC contractors, thereby, increasing pressure on costs, time and cash flow management. for Dolphin Energy (Qatar) were completed. The Midyan Gas Processing Facilities for SAUDI ARAMCO achieved mechanical completion. anticipate challenges and opportunities to achieve strategic objectives. procedures, which enable the business to incorporate global best practices and The risk management policy and guidelines Risk Management & Internal Controls: Pro-active Risk Management has been identified as a key strategic initiative to ensure sustainable growth. Risk Management is an integral part of the overall governance process to identify, segregate, mitigate, control and monitor various risks at business, prospect and operational levels. A dedicated International Business Development set-up across the business verticals was established during the year, which has started yielding results in terms of significant international order inflow and penetration into newer geographies like Algeria & Azerbaijan through pre-qualifications. As a part of company-wide LAKSHYA 2021 Strategic plan which was unveiled during the year, a number of initiatives have been taken up. The business embarked upon an Operation Excellence initiative, which is aimed towards achieving refined cost structures, alignment for timely project deliveries, and optimizing fund deployment. This initiative is progressing well and is expected to give sustainable results. 3-D CAD model of Gathering Centre (GC-30) for Kuwait Oil Company The fiscal year 2016-17 was a year of transformation and turnaround for the hydrocarbon business. The business has set a vision to "Revolutionize the Hydrocarbon Industry" and mission of "Execution Par Excellence". The Company is implementing a transformation plan with a view to offer integrated services, reduce costs, improve competitiveness and aid profitable execution. Significant Initiatives: In spite of the extremely challenging external environment, the Company did very well to achieve order inflow growth of more than 80%, over the previous financial year. While investment in GCC countries have slowed down due to budget constraints, investment in gas projects is continuing, albeit at a slower pace. Saudi Arabia continues to embark on major offshore/onshore gas field development and downstream petrochemical projects. leading to fierce pricing competition. However, this has impacted the sustainability of some of our competitors. Oil & Gas companies as well as their contractors, are adjusting to the new paradigm through reduced capex, efficiency improvement programs and cost rationalization measures. 184 183 in lower asset utilization across the board, in turn Given the depleted business opportunities, the abundance of assets in the market has resulted With the advent of de-globalisation, the adoption of increasingly protectionist policies has become a global trend. The South East Asian region continues to protect the local players under the 'Bumiputra' concept and more stringent local content requirements have become the norm in the Middle East as well, particularly in Saudi Arabia with the In-Kingdom Total Value Added (IKTVA) policy now an imperative for doing business in the Kingdom. Business Environment: 182 The business caters to clients across the hydrocarbon value chain through its following business verticals: During the year, the business successfully commissioned the world's largest Ethane- cum-LNG Storage facility at Dahej in India. Further, four international projects viz., Aviation Fuel Depot at New Abu Dhabi International Airport for TAKREER(UAE), Yibal Third Stage Depletion Compression and Saih Rawl Depletion Compression Projects for PDO (Oman) and Export Gas Compression Facilities Upgrade Project • Hydrocarbon Onshore . Hydrocarbon Offshore • The major risks such as onerous contract terms by client, tight schedule, counter-party risk, localization requirements, forex exposure, etc. are mitigated through specific actions like operational excellence initiatives, alliances, cost optimisation, improved customer intimacy, compliance with Yards at Hazira (near Surat) and Kattupalli (near Chennai), whereas, overseas presence is primarily in the Middle East in UAE (Sharjah), Saudi Arabia (Al-Khobar), Kuwait and Oman (Muscat). The business also has a major Modular Fabrication Facility at Sohar in Oman held through a subsidiary. 180 Hydrocarbon Construction Services 179 world-class modular fabrication facilities as well as onshore construction and offshore installation capabilities. The business has repeatedly delivered, large, critical and complex projects, globally, by virtue of its customer focus & responsiveness, experienced & highly skilled human resources, world-class Quality & HSE practices and culture of excellence. The principles of the Company's business philosophy are striving for excellence in corporate governance, HSE & quality standards, extensive IT enablement & state-of-the-art IT security practices, on-time delivery and cost competitiveness. The business has a fully integrated capability chain including in-house engineering and R&D centres, The Hydrocarbon business provides integrated 'design to build' turnkey solutions for the global Oil & Gas Industry including oil & gas extraction and processing, petroleum refining, chemicals & petrochemicals, fertiliser sectors and cross country pipelines and terminals. The in-house capabilities enable it to deliver complete end-to-end solutions from front-end design through detailed engineering, procurement, fabrication, project management, construction and installation up to commissioning services. The Hydrocarbon business is primarily housed in a wholly owned subsidiary, L&T Hydrocarbon Engineering Limited (LTHE). Overview: One of many mega-offshore projects executed by L&T's hydrocarbon business. Picture shows captive heavy-lift-cum-pipelay vessel LTS 3000 in the background. LARSEN & TOUBRO 17 Hydrocarbon Business Major facilities in India include Engineering & Project Management Centres at Mumbai, Vadodara, Chennai and Bengaluru and Fabrication • • Hydrocarbon Modular Fabrication Services Hydrocarbon Engineering Services During the year, the business received orders from Indian Oil Corporation for a Coke Drum System Package of Delayed Coker Unit (1.7 MMTPA) at Haldia Refinery in West Bengal as well as for setting up a 0.74 MMTPA INDMAX Fluid Cracking Unit (FCC) including a LPG Treatment Facility at Bongaigaon Refinery in Assam. The business also received an EPC contract for Paraffin & Derivative complex in Saudi Arabia from Farabi Petrochemical Company. Internationally, the business group is prequalified by major international oil & gas producers and has a successful track record of project execution with international bellwethers like Saudi Aramco, Abu Dhabi Gas Industries (GASCO), Petroleum Development Oman (PDO), KOC, KNPC, Petronas, Dolphin Energy, Chemanol, etc. Industries, etc., as well as fertilizer companies like NFL, GNFC, RCF, and others. 52"x 107 km Habshan-Ruwais-Shuweihat Gas Pipeline Project for GASCO, Abu Dhabi (UAE). The business has executed Lump-Sum Turnkey (LSTK) projects for various Indian oil majors such as IOCL, MRPL, ONGC, OMPL, BPCL, HPCL, Reliance Its Design Engineering Centres viz., L&T-Chiyoda for onshore engineering and L&T-GULF for Pipeline engineering enable the vertical to offer a complete spectrum of FEED, process and detailed engineering to clients. The Company's subsidiary Larsen Toubro Arabia is registered as In-Kingdom EPC ('IK-EPC') company in Saudi Arabia and addresses onshore IK-EPC opportunities. The business provides EPC solutions for a wide range of hydrocarbon projects covering upstream oil & gas processing, refining, petrochemicals, fertilisers (ammonia & urea complexes), cryogenic storage tanks & regasification terminals including LNG and cross country pipelines. The business has a track record of successful simultaneous execution of multiple mega projects using diverse technologies from process licensors like UOP, Axens, Haldor Topsøe, CB&I Lummus, Black & Veatch, Ortloff, Exxon Mobil, BOC Parsons, Invista and Davy Process Technologies. Hydrocarbon Onshore: Contributing to India's exploration and production activities in the Oil and Gas sector, the business has signed an exclusive Memorandum of Understanding with GE Oil & Gas to partner in the manufacture of subsea manifolds for future deepwater projects in the Krishna-Godavari basin on the east coast of India. On the domestic front, the business secured an EPCIC contract for Neelam Re-development & B173AC project of ONGC involving a new process platform, three new wellhead platforms, 32 km pipeline and clamp-on / modification of existing platforms in the Neelam Field in the western offshore basin in India. During the year, the Company successfully completed the Additional Development of Vasai East Project for ONGC. of 4 wellhead decks in the Safaniya field and the other one for upgradation of 17 platforms in various offshore fields of Saudi Arabia. LARSEN & TOUBRO 35 km pipelines and modification. Additional development of Vasai East Project for ONGC. The scope included EPCIC of 2 wellhead platforms, The business secured major EPCI awards in consortium, under a Long Term Agreement (LTA) with Saudi Aramco. These include the development of Hasbah Offshore Gas Field involving 6 wellhead topsides, 2 tie-in platforms, about 520 km of offshore / onshore pipelines followed by two separate contracts, one for supply & installation Its Offshore Engineering Centre has comprehensive engineering capabilities covering the complete project life cycle from concept studies, FEED, 3-D model based detailed engineering, and special studies to commissioning for offshore projects. The installation capability resides in the joint ventures L&T Sapura Shipping Private Limited, (which owns and operates a Heavy Lift Cum Pipe Lay Vessel - LTS 3000) and L&T Sapura Offshore Private Limited (which provides offshore installation services). has been successfully executing large offshore platforms and pipeline projects on east and west coasts of India, the Middle East, South East Asia and Africa, for global companies such as ONGC, GSPC, British Gas, ADMA-OPCO, Saudi Aramco, Bunduq, Qatar Petroleum, Maersk Oil Qatar, PTTEP, Petronas Carigali and Songas. The business offers lump sum turnkey EPCIC solutions to the Global Offshore Oil & Gas industry encompassing wellhead platforms, process platforms & modules, subsea systems & pipelines, brownfield developments, offshore drilling rigs (upgrade and new-builds), floating production storage & offloading (FPSO) topsides and offshore wind farms. For more than 25 years, the business Hydrocarbon Offshore: 181 LARSEN & TOUBRO Modular Fabrication business is also aggressively exploring alternative product lines such as wind farms & process skids as well as strategic partnerships to enhance asset utilization. All projects undergo a structured pre-bid risk review process by the Apex Risk Management Committee (ARMC) at business and at the corporate level as per well-defined authorization limits. The process involves a detailed assessment of risks and deliberation on mitigation measures by the ARMC. Periodic risk assessments of the overall business and ongoing projects are also carried out to effectively control & mitigate emerging business risks. Project managers/selected project team members undergo a certified Risk Induction Program conducted by ECRI (Engineering & Construction Risk Institute) on a continuous basis to get acquainted with industry's best practices. though the mode of execution is expected to evolve over the period. These refineries also have investment plans for integrating petrochemical projects along with refinery upgrades, which will offer opportunities to Onshore as well as Construction Services verticals. The roll-out of comprehensive Urea Policy by the Government is expected to revive Public Sector urea plants at Gorakhpur, Sindri, and Barauni. Energy efficiency improvement projects are being actively pursued in existing fertilizer units. The Government is focusing on setting up LNG infrastructure and investments in LNG receiving plants, both land-based terminals as well as Floating Storage Regasification Unit (FSRU) are on the anvil. In the Middle East, Saudi Arabia is launching ambitious Oil to Chemical projects with an investment of over USD 30 billion till 2030 and the Kingdom will be a key market for both Onshore and Offshore verticals. In the light of oil price rebound, an uptick in onshore upstream investment is expected in the UAE. The downstream sector in the region is also expected to attract additional CAPEX and is witnessing integration between refinery & petrochemical projects. Towards providing geographical risk diversification, the business is looking to explore newer markets which offer good long-term business potential and has undertaken intense & successful pre- qualifications efforts in North Africa and CIS regions. Shale gas/oil will drive petrochemical and fertilizer investment in the US, which will offer an opportunity for high-value engineering and modular fabrication services. Engineering Services reimbursable business is being expanded to de-risk the cyclical EPC business. The Enterprise Framework Agreement with Shell Global Solutions for providing EPCM services and the collaboration agreement with Parsons to deliver engineering solutions in the Americas will provide significant growth opportunities to the business. With a strong focus on building the Order Book while maintaining Cost-to-Complete at bid levels, the business is expected to show significant improvement in its performance. 187 LARSEN & TOUBRO 188 L&T Infotech's global headquarters in Mumbai. The Company's solutions focus on improving efficiencies for its clients. Overview: The Information Technology Services business of the Group is housed in L&T Infotech (LTI). In 2016, NASSCOM ranked the Company as the sixth largest Indian IT services company in terms of export revenues. The Company was rated amongst the Top 15 Sourcing Service Providers (Sourcing Standout) by Information Services Group (ISG) in 2017. It was listed among the Breakthrough 15 for the Americas region based on Annual Contract Value (ACV) won over the last 12 months according to the 4Q 2016 Global ISG Index™ Its clients comprise some of the largest and well- known corporations and Government agencies in the world, including 52 of the Fortune 500 companies. LTI offers an extensive range of IT services to its clients in diverse industries such as Banking and Financial services, Insurance, Energy and Process, Consumer Packaged Goods, Retail and Pharmaceuticals, Hi-Tech and Media and Entertainment, Hi-tech and Automotive and Aerospace. Its range of services includes Application Development, Maintenance and Outsourcing, Enterprise Solutions, Infrastructure Management Services, Testing, Digital Solutions and Platform-based Solutions. The company serves its clients across these industries, leveraging its real-world domain expertise, diverse technological capabilities, wide geographical reach, an efficient stringent HSE standards, proactive forex hedging, strong contract & claims management and identification of key personnel and talent at the pre-bid stage. LTI Gas processing facilities for Saudi Aramco near Tabuk in Saudi Arabia. Information Technology Business Following the prolonged downturn, the oil & gas industry is showing some signs of revival, with oil prices expected to be range bound in the mid-fifties per barrel in the near future. In the domestic offshore sector, the launch of Open Acreage Licensing Policy is expected to attract investment in the E&P sector and ONGC, in particular, is progressing on its USD 5 billion, 4 year investment plan for the development of deepwater field KG/98-2 off the east coast of India. This will provide significant opportunities to the Group's offshore and fabrication verticals over the medium term, given its strategically located Kattupalli yard on the east coast and the recent tie-up with McDermott & GE to develop cost effective subsea solutions. A number of brownfield and decommissioning projects are also expected to come up in the near future. Structured risk management framework will further strengthen business governance, leading to improved operational performance and setting the course towards realizing LAKSHYA 2021. The Indian Public Sector refineries are embarking on upgrades to comply with BS-VI emission norms, A strong Internal Control framework is an important part of operations and corporate governance. The management has established internal control systems commensurate with the size and complexity of the business. The internal control manual provides a structured approach for identification, rectification, monitoring and reporting of gaps in the internal control systems and processes. The Group follows well documented Standard Operating Procedures (SOPs). The operating effectiveness of various controls is periodically tested, and deficiencies, if any, are promptly rectified. An in-depth exercise for evaluating the adequacy of Internal Financial Controls and their Operating Effectiveness was carried out in the earlier years. This activity included understanding and testing of Internal Financial Controls and evaluating their operating effectiveness based on the assessed risk factors. During the year, the effectiveness of the controls was validated. Human Resource Development: The business is on a growth trajectory and has started sailing through the transformation phase. To keep abreast with the growing needs of the business, the HR team has been holding the baton for achieving excellence by being the frontrunner in various initiatives. In order to effectively percolate the transformation plan and management expectations, regular town hall sessions are conducted at various locations with the Senior Management. This has helped in enhancing the employees' morale and collaborative spirit. Health Safety Environment (HSE) & Sustainability: Health, Safety & Environment is the cornerstone of the Group's business philosophy. The business strives for continuous improvement for the protection and development of health, safety, and environmental assets of its employees and stakeholders. As part of the Corporate HSE Plan, cross-functional HSE audits were initiated across all business units. To spread safety awareness, various theme based campaigns were observed on various important dates during the year. Lessons learnt during project execution were shared throughout the organisation by way of well-documented HSE Learnings and HSE alerts. Various HSE training programmes were held, and motivational schemes were instituted. This has resulted in a marked improvement in safety statistics over the previous To realise the vision, HR function of the business is ably supporting the building of capability and capacity, towards which a multi-pronged strategy has been developed and deployed. In particular, the HR team has been at the forefront of the company-wide capability building initiative. Further, HR policies & practices have been aligned to achieve an efficient delivery model and meet dynamic business requirements. year. The Company has released its Sustainability Report - "Engineering the Transformation" in December 185 186 2016 which covers various initiatives taken across the Company and highlights the need to enhance performance across all sustainability parameters - safety, energy, water conservation and productivity. As a responsible Corporate Citizen, the business is aware of its responsibility towards social upliftment, which is an integral part of the corporate culture. The CSR Framework of the business lays down the principles and programmes for the community at large, in accordance with section 135 of the Companies Act 2013. In-line with the Group's CSR theme "Building India's Social Infrastructure", L&T Hydrocarbon is committed to implementing projects that will contribute to improving the quality of life in the communities in which it operates, including education, healthcare, skill training institutes, water supply and sanitation facilities. The consistent and ardent efforts of the business to achieve consistent safety performance have been well appreciated particularly in the international operations. The business has won several national and international accolades from eminent institutions like Frost and Sullivan (F&S) and The Economic Times (India Manufacturing Excellence Award (IMEA)) and clients like British Gas, Petronas Carigali Myanmar, Kuwait Oil Company, ADNOC/Takreer and Reliance Industries. Outlook: As on 1st July, 2017 9 R. Shankar Raman Chief Financial Officer Leadership Team CEO & Managing Director S. N. Subrahmanyan Sr. Executive Vice President (Power, Heavy Engineering & Nuclear) S. N. Roy Listed Companies A. M. Naik Group Executive Chairman Corporate Functions VADODARA Travel & Aviation • Corporate & Communi- cations Management Brand ⚫ Corporate PITHAMPUR ANKLESHWAR HAZIRA Subramanian Sarma CEO & Managing Director (L&T Hydrocarbon Engineering) Subsidiary Companies D. K. Sen Sr. Executive Vice President (Infrastructure) RAJPURA Sr. Executive Vice President (Buildings, Minerals & Metals) BHOPAL AHMEDABAD NEW DELHI FARIDABAD JAIPUR ● CHANDIGARH This pictorial representation does not purport to be the political map of India. Nationwide Network 12 Regd. Office: Larsen & Toubro Limited, L&T House, N. M. Marg, Ballard Estate, Mumbai - 400 001, INDIA CIN: L99999MH1946PLC004768 LARSEN & TOUBRO Technology | Engineering | Projects Construction | Manufacturing L&T partners the nation, industry and people to build a newer, brighter future. In critical sectors, such as security and surveillance, we provide the technology as well as the engineering and construction expertise to transform vision into reality. + www.Larsentoubro.com F |||| Technology Leadership Smart Cities As on 1st July, 2017 MUMBAI ■ PANVEL LONAVALA ⭑ Sr. Vice President (Electrical & Automation) S. C. Bhargava 10 J. D. Patil Sr. Executive Vice President (Defence) M. V. Satish Hasit Joshipura Head Corporate Centre 18 LUCKNOW Boilers • L&T MHPS Joint Ventures • Power Training Institute Technology • Engineering & Design Services Center • Plant Engg. & Capability Unit • Construction Preheaters • Axial fans & •Heavy Foundry • Pulverisers Catalytic Reduction • L&T MHPS • Selective Turbine • L&T Howden • Ports • Accounts • Roads • Finance Limited • Nabha Power Uttaranchal Hydro Power Limited • L&T and Hydro Power Plants of Thermal • Development & Lundy • L&T Sargent for Engineering & Design Joint Venture Generators Desulfurization & Flue Gas • Enviro Systems Electrostatic Precipitators • Refinery, Process Plant • ATVP • Ultra • LWR ⚫ FBR ⚫ ITER ⚫ PHWR • Gas-based Projects Projects • Coal-based EPC Projects Equipment & Systems • Nuclear Power Nuclear Cracker, Oil & Gas and Gasification • Fertilizer, • High-Pressure Piping Generators Turbines & and Supercritical Supercritical • Ultra and Supercritical Boilers • Treasury Supercritical LLC, Oman • L&T Heavy Engineering • L&T Special Steels & Heavy Forgings Subsidiaries • L&T Piping Center & Thermal Power Petrochemicals Manufacturing • Metros • Risk Management es! य Yy Learning enrichment programmes are conducted in schools through NGO partners, with a focus on science, language and maths. 'Science on Wheels' vans visit schools to provide young, enquiring minds with exciting Learning enrichment Education infrastructure: L&T provides infrastructure support to Government schools. It provides furniture, sets up and equips laboratories, libraries and playgrounds, refurbishes and digitises classrooms and builds toilet blocks for rural schools. All these lay the foundation for good education. L&T's social interventions covering educational initiatives are focused on providing primary education, infrastructure development and enhancing the learning experience for children in several schools in the vicinity of its facilities across India. - the mainstay of progress Education Children from underprivileged backgrounds are also provided with basic computer education, to prepare them for a digitalised world. Preschools or Balwadis are run in low-income communities to lay a strong foundation for many vulnerable children and facilitate enrolment in neighbourhood schools. their academic performance as they progress from one standard to the next. A toy van for children - 'Nanha Munna Express' - makes learning fun for children, and helps develop motor, cognitive and social skills. After-school support is provided to children in community learning centres by trained community teachers. These centres help children to cope with their school curriculum, thereby reducing school drop-out rates, and enhancing opportunities to perform hands-on science experiments and fire their imagination. Dialysis Centres: L&T has set up Artificial Kidney Dialysis Centres at its health centres for benefit of the underprivileged. From community learning centres to computer labs, L&T helps spread education in rural areas and around its facilities. 17 Skill-building Vocational training in skills like tailoring help boost both confidence and independence among women in rural areas. * Over one million people benefitted from L&T's social interventions in 2016-17 alone. • 32 water-stressed villages in 4 states benefited from 'Integrated Community Development' - water, sanitation, health education and improved standard of living ⚫7000 youth from underprivileged backgrounds made employable through CSTIS ⚫2.5 lakh students in 250 schools - better infrastructure, fewer dropouts, better grades Over 1 million beneficiaries dentistry, gynaecology and TB detection. Diagnostic camps are also held for specific groups, such as women and school children. Awareness camps disseminate information on critical issues such as hygienic practices and HIV/ AIDS prevention. Blood donation camps are held, usually at L&T's establishments, in partnership with hospitals or blood banks. What it all adds up to in the year gone by: Vocational training for women: To make underprivileged women self-reliant, L&T has introduced Empowering the differently- abled: L&T's 'Project Neev' initiative enriches the lives of the differently- abled by offering specially-designed training programmes that enable them to obtain gainful employment and enhance their sense of self-worth. Industry-oriented training: L&T has collaborated with 27 Industrial Training Institutes (ITIS) across the country to impart industry-oriented training. skilled, self-reliant young men, ready to join the workforce and support themselves and their families. - Construction skills: India's infrastructural demands call for quality workmanship and deployment of the latest techniques in construction methodology. L&T has set up and runs eight Construction Skills Training Institutes (CSTIs) across the country. These Institutes provide formal, free vocational training in construction skills for the largely unorganised workforce in this sector. School dropouts and illiterate village youth are taught skills like bar-bending, formwork carpentry, masonry, scaffolding and welding. A stipend, hostel facility and Certificate of Proficiency on completion, give participants an added incentive to complete the course. These short courses ranging from three to six months transform these once- unemployable youth into certified, - creating a world of possibilities vocational training programmes in the areas of tailoring, beautician skills, home-nursing and food processing. Shipbuilding Limited LARSEN & TOUBRO Health Camps: L&T organises diagnostic, clinical and awareness health camps. Diagnostic and clinical camps are held pertaining to general medicine as well as specialties such as ophthalmology, Health, • Employee Relations Industrial Corporate of Powai Campus & Administrative Services •General Management • Corporate Infrastructure & Transmission • Power • Insurance • Taxation Relations • Investor Welfare & Community Services • Corporate Technical Training • Corporate Health Centres: L&T has set up multi-specialty health centres which provide diagnostic, curative and preventive services in the areas of general medicine, gynaecology, paediatrics, pulmonology (including of society. L&T's healthcare initiatives focus on mother and child care among the disadvantaged sections Mobile Clinics: The mobile clinics operated by L&T penetrate deep into rural and tribal areas, bringing the benefits of basic health facilities and modern health technology to these marginalised communities. chest and TB) ophthalmology, orthopaedics, nephrology, psychiatry, ENT, dermatology and dentistry. Immunisation and dialysis services are also provided. Emerging lifestyle diseases, such as diabetes and cardiac problems are also addressed at these centres. The HIV/AIDS issue is addressed through diagnostic and counselling facilities, as well as distribution of the Government's free anti-retroviral therapy at L&T's Mumbai Health Centre. Counselling services are offered in the areas of mother-and- child care, as well as problems faced by teenagers. Good health is the cornerstone of social well-being. L&T is helping create healthier communities by providing the underprivileged with affordable healthcare services in various areas - with a focus on mother-and-child care. the wellspring of joy 16 - • Sanitation awareness drives among the community members and community-based monitoring committees will ensure that these villages are well on their way to becoming free of open defecation. • 30-50% of participants in all VDC and watershed interventions are women, ensuring their participation in project planning and execution. Lakshya 2021 Strategy & ⚫ Corporate ⚫ CSR Sustainability Health • L&T Subsidiary • Warships Water & Sanitation 1,07,253 Beneficiaries Launching its Integrated Community Development Programme in FY 2014-15, L&T identified locations as 'water-stressed' on the basis of availability, quality and uncertainty - meeting the bare necessities Water & Sanitation for the next 5 years to improve the overall quality of life. This is closely linked with the UN's Global Sustainable Development Goals (SDGs). These areas of activity yield returns with cascading benefits that have a ripple effect on dependents and associates. communities in a phased manner The Companies Act 2013 provided a unique opportunity for L&T to realign its CSR initiatives with the nation's developmental requirements and create more impactful community-development programmes. Weaving together the company's business vision and Enhancing impact LARSEN & TOUBRO FORT 20 VA 14 supported by the Company, thereby enhancing social impact even further. contributes to inclusive growth by empowering communities and accelerating development through interventions in water & sanitation, health, education and skill development. L&T-eering, a structured volunteering programme, encourages and enables employee volunteers or L&T-eers to contribute their spare time to community development programmes Reporting'. Building on over seven decades of social responsibility activities, the Company Health 9,93,878 Beneficiaries Education 3,32,013 Beneficiaries • Availability of fodder for livestock • Drudgery-free access to clean drinking water ensuring improved health and sanitation . • • • Watershed interventions such as construction of check dams, anicuts, contour trenches, farm bunds, farm ponds, and well restoration to increase ground water levels and soil moisture content Key deliverables as 'CSR' and 'Sustainability states Rajasthan, Tamil Nadu, Maharashtra and Gujarat. This covers 11006 households across an area of 9337 hectares. of supply to enable these locations to become water-sufficient for drinking, sanitation and agriculture. L&T envisages these communities leading better quality lives through an integrated and holistic approach which will provide access to improved healthcare, education and higher income levels. To begin with, L&T, in consultation with external domain experts, identified water-stressed village clusters that were not beneficiaries of any previous interventions in four At the grassroot level, L&T's CSR activities are aligned to specific Governmental welfare programmes and projects, strengthening the execution of projects in progress and avoiding needless duplication of effort. This ensures the judicious allocation and use of resources such as money, time and talent. L&T executes CSR projects directly or partners with Non-Government Organisations (NGOs). education, health and skill building have been planned in the same rural Towards this end, L&T began working for the development of water-stressed rural communities. It undertakes community-based interventions to make water available for drinking, sanitation and agriculture. Using an integrated approach, interventions in its responsibility towards the social sector, the CSR theme of 'Building India's Social Infrastructure' was chosen. SAILOR Skill Development 34,696 Beneficiaries 15 Empowerment of communities At L&T, the imperative of balancing financial, environmental and social interests predates industrywide acceptance of concepts such Creating a Better Tomorrow ● GUWAHATI KATTUPALLI CHENNAI KANCHEEPURAM PUDUCHERRY ⚫ KOCHI COIMBATORE MYSORE ▲ PULICAT BENGALURU ▲ HYDERABAD BHUBANESWAR ⚫ ● RAIPUR NAGPUR ■ ROURKELA CUTTACK▲ JAMSHEDPUR KOLKATA ⚫ SERAMPORE ▲ ⚫ VARANASI Registered Office Campus* Power Plant Shipyards Offices RESPONSIBILITY CORPORATE SOCIAL LARSEN & TOUBRO Note: Map is broadly representative of L&T's presence in markets worldwide. For details of establishments within India, please refer to 'Nationwide Network'. ■ Agents ◆ Manufacturing / Fabrication Facilities ▲ Product & Equipment Supply L&T is an engineering and construction conglomerate with a heart. One that resonates with the philosophy that growth is the means to achieve the greater good of the greatest number. Engineering & Construction Projects 13 Global Presence *Part of L&T's Corporate Social Initiatives * 'Campus' denotes facilities for design and manufacture ▲ Construction Skills Training Institutes* A Leadership Development Academy Knowledge City ✰ Offices TALEGAON PUNE and sustaining programme benefits through self-help groups with women's participation • • Hitech Rock Infrastructure Engineering Ltd. • L&T Subsidiaries Transportation (Middle East) • Railway Systems • Railway Construction Railway Elevated Corridors (Domestic) Roads, Runways & • ArRiyadh New Mobility Consortium- Riyadh Metro Orange Line Joint Venture ⚫ALYSJ JV Gold Line Doha Metro Geostructure LLP L&T Construction ⚫Special Bridges Products & Aggregates Ltd. Defence & Aerospace •Submarines & Underwater Platforms • Conventional Submarines (Refit) Refit) Construction & (New • Surface Ships Shipbuilding • Spectrum Infotech • Nuclear • L&T Cassidian JVs/ Subsidiaries • Weapons & Engineering Systems Communication • Military Systems & Armoured • Guns, Missiles • L&T MBDA Missiles Systems Ltd. Key highlights so far: (Hydel, Ports, Tunnels & Mega Civil Projects) • Defence LARSEN & TOUBRO Corporate Audit Services Corporate Secretarial Shivanand Nimbargi J D Patil D K Sen R Shankar Raman Shailendra Roy • Creation of community-level organisations like Village Development Committee (VDC), Self Help Groups (SHGs) and User groups for project sustainability. VDCS have been formed in all 30 villages under our coverage to cultivable, and checking of soil erosion through various watershed interventions • Increase in ground water level, conversion of land from fallow • A strong feeling of ownership and involvement instilled within community members using Participatory Rural Appraisal extensive community participation Project formulation through K Venkatesh Yogi Sriram Hasit Joshipura Smart World & Hyderabad Metro Heavy Civil Transportation Infrastructure Infrastructure • Metros Infrastructure • Smart Infrastructure Network & Telecom • Communication Solutions • Special Projects • Security Corporate Finance & Accounts Communication Power Development Corporate Affairs Power Heavy Engineering Defence Infrastructure Corporate Corporate Development HR Centre Projects AHMEDNAGAR Acquisitions • Legal • Mergers & LTI has also framed a talent strategy for adopting newer ways of hiring such as hackathons, online social media and improving learning and development by offering custom courses, conducting leadership programs and revamping fresher hiring models. ENERGY CONSTRUCTION & HEAVY MACHINERY AUTOMOTIVE TRANSPORT 5. INDUSTRIAL PRODUCTS LTTS Leadership across key industries over the years. Source Zinnov Zones 2016 Embedded systems and Mechanical, which cater to all the vertical segments. 1. Transportation: Transportation segment partners with OEMs and Tier 1 suppliers serving aerospace, automotive, rail, commercial vehicles, off- highway and polymer segments. The segment delivers end-to-end services from concept to detailed design through manufacturing and sourcing support and helps OEMs develop cost effective vehicles. 2. Industrial Products: 3. The Industrial Products engineering vertical partners with OEM customers across building automation, home and office products, energy, process control and machinery. This segment offers end-to-end product development counsel, leveraging expertise spanning software, electronics, connectivity, mechanical engineering, industrial networking protocols, user interface/user experience (UI/ UX), test frameworks and enterprise control solutions. Telecom & Hi-tech: Telecom & Hi-tech segment caters to OEM/ ODMs, Chipset vendors, Telecom carriers and ISVs, delivering end-to-end embedded software design and development, hardware platform design and development, product maintenance, enhancement & sustenance, Testing & Validation, System Integration for communication and related solutions & systems and field implementation services. Process Engineering: Process engineering segment provides end to end engineering services for leading plant operators across the globe. The industry span and services are broadly for chemical, consumer packaged goods (FMCG) and energy and utility sector clients. 2015 -O- INDUSTRIAL PRODUCTS TRANSPORT VERTICALS RATED IN LEADERSHIP ZONE VERTICALS RATED IN LEADERSHIP ZONE AEROSPACE MEDICAL DEVICES TELECOMMUNICATION CONSUMER ELECTRONICS SEMICONDUCTOR AEROSPACE MEDICAL DEVICES TELECOMMUNICATION ENERGY ENERGY CONSTRUCTION & HEAVY MACHINERY CONSTRUCTION & HEAVY MACHINERY AUTOMOTIVE AUTOMOTIVE TRANSPORT INDUSTRIAL PRODUCTS O 2014 Medical Devices: Medical Devices engineering is a dedicated practice that is revolutionizing delivery of healthcare by providing product development solutions across a variety of Class I, II and Ill devices, with concept design, embedded systems, hardware and software, mechanical engineering services, application software, value analysis and value engineering, manufacturing engineering and regulatory compliance. The medical device industry is comprised of diagnostic, life sciences, surgical, cardiovascular, home healthcare, general medical and other devices. LTTS services more than 50 of the Fortune 500 companies and over 40 of the world's top ER&D spenders. LTTS is well poised to meet future requirements of its customers by investing in new industry segments and state of the art innovation labs, adopting new technology initiatives, expanding into new geographies, and establishing alliances and partnerships. USD 37.5 Billion boole BGD Cartes $22.4 Bn $15.1 Bn $13.4 Bn $12.25 Bn 9.4% 13.3% $8.9 Ba Free MAD CH 1630) Canters 13.07 % 12.7% FY 2016 FY 2020 However, in case the Indian rupee appreciation continues for a long time, companies may have to offset the margin impact by tighter control on cost, execution and delivery-efficiency measures, etc. towards sustainable growth. FY 2020(E) 4. FY 2015 $7.9 Bn Servce The 10,000+ highly-skilled personnel of LTTS across 12 delivery centres and 27 sales offices globally enable its clients to achieve a sustainable competitive advantage. LTTS has 34 innovation labs spread across key delivery centres in India. Business Environment According to Zinnov, corporations spent a total of USD 1062 billion on research and development and engineering activities such as product and process development, manufacturing engineering and other allied engineering in 2016. Of this amount, the 500 biggest corporate spenders in ER&D globally (the "G500 ER&D spend") contributed USD 621 billion or nearly 58%. With respect to the total ER&D offshoring market for product engineering services as addressed by offshore third-party service providers and global in-house centres (the "Global Addressed Market"), the overall revenue was USD 85 billion in 2016, of which offshore in-house R&D centres and third-party service providers contributed USD 34 billion and USD 51 billion, respectively. The total R&D offshoring market revenue generated by both India-based third-party service providers and India-based in-house centres to global clients in 2016 was USD 22.3 billion. Of this, the third-party service providers and in-house ER&D centres contributed USD 8.9 billion and USD 13.4 billion of revenue in 2016, respectively. "Strong sales in emerging markets are leading to a requirement of products that are tailored to the needs of customers, thereby driving engineering towards these markets. Increased product complexity is translating into a greater need for engineering work that needs to be done. Also, the war for talent, especially engineering talent, is real in many mature markets, and this bottleneck has opened up opportunities for players with a strong, well-qualified talent pipeline. All of these trends catalyzed the ER&D industry in India," comments Dr Wilfried Aulbur, Partner, Roland Berger Strategy Consultants GmbH. India's ER&D services sector has indeed been on a growth path over the past five years. The market, which is expected to reach USD 35-40 billion by 2020, is creating deep impact in verticals such as automotive, avionics, construction and heavy engineering and telecom. All emerging currencies have seen significant volatility against the US Dollar on account of changing political and economic scenario across the globe. For Indian third party service providers in ER&D segment, any appreciation in Rupee will cause a dip in margins on a sequential basis. Short- term rupee appreciation will not have big impact considering the hedging strategies of companies. Engineering Services Growth Rate (In USD Billions) Growth rate (Expeded) FY 2015 FY 2016 Growth rate USD 22.3 Billion 13.7% USD 11% 20.1 Billion Probles 10 8 TELECOMMUNICATION like Duck Creek, Insurity, Guidewire etc., the Company is uniquely positioned to help clients co-innovate. In the Energy and Process industries, the Company is working towards creating leaner operating models for its clients. Digital supply chain and customer analytics are driving factors for the hi-tech, media and entertainment industry. In Auto/Aero industry, LTI is working as an innovation partner leveraging its manufacturing experience due its parentage. The Company is particularly targeting clients who have potential to offer opportunities with large total contract values towards transforming their business in the wake of the digital revolution. It plans to achieve a higher value client portfolio by focusing on new-age Application Management Services, PaaS and infrastructure management service deals, which tend to be long-term in nature. Building capabilities on Digital technologies: The Company has been steadily building capabilities in digital technologies. Digital businesses contribute to 26% of the revenue LTI is working towards including Analytics and Digital in Every Account (ADEA in Company parlance). It has also begun its foray in newer technologies such as virtual reality, augmented reality and the likes. LTI's proprietary digital platform Mosaic™ is an exhaustive representation of how LTI brings together the power of exponential technologies to deliver real-world business outcomes. Intellectual Property and Offerings developed by the company are housed in the following elements of the Mosaic™ platform for lot, Analytics, User Experience, Automation, Al and various other Digital technologies: • Mosaic™M Things • Mosaic™ Decisions 190 • Mosaic™M Automation • Mosaic™M Artificial Intelligence This platform houses all digital and next- generation offerings under one unified umbrella which is enabled by a four-layered ecosystem of digital-focused practices, platforms, thought- leadership and solutions. Mosaic™ is a powerful platform for creating new age solutions for clients. LTI has also established business relationships with niche players in the digital space for cloud, lot BUBLES MOSAIC THALES Welcome to MOSAICT Cente • Mosaic™M Experience March 2017 Cloud Transformation platform 189 LARSEN & TOUBRO global delivery model, thought partnership and 'new age' digital offerings solving for complex business challenges at the convergence of physical and digital world. LTI was incorporated in 1996 and is headquartered in Mumbai, India. It leverages the strengths and heritage of its Parent Company. The L&T Group provides access to professionals with deep industry knowledge in the sectors in which the Company does business. LTI has inherited from the L&T Group its corporate governance practices, which place the Company in good stead in relation to its business. In addition, it benefits from the commonality of business verticals with its Parent Company. The Company's growth has been marked by significant expansion of digital business in various verticals and geographies. It provides services globally to clients in North America, Europe, Asia Pacific and rest of the world including India. Business Environment: Global IT-BPM industry grew by 3.9% and the IT-BPM market (excluding hardware) stood at USD 1.2 trillion in 2016. Indian IT-BPM industry revenues excluding hardware stood at USD 140 billion in FY2017. The industry added USD 11 billion in incremental revenues last year, representing year-on-year growth of 7.6% in USD terms (8.6% in constant currency). IT-BPM export revenues for the industry for FY2017 were USD 116 billion, growth of ~7.4% over the past year. Domestic IT-BPM revenues were USD 24 billion, a growth of ~9% from USD 22 billion in FY16. IT-BPM export revenues are expected to grow by 7-8% in FY18 and the domestic market is likely to grow by 10-11% next year. The impact of digital technologies-Analytics, Internet of Things, Cloud, Artificial Intelligence/ Machine Learning, Cognitive Sciences and Mobility continues to be felt, with the growth in these segments higher than the rest. These technologies are expected to be the major growth segments in global IT spends going forward. Source: NASSCOM IT-BPM Strategic Review 2017 Significant Initiatives: . Client-centricity - at the heart of LTI: LTI's strong long-term business relationships with its clients (96% revenue from returning business) have helped increase scope of engagements. The Company has also partnered with clients in various industries to identify priority solutions focused on efficiencies, decisions and inferences for their respective businesses, helping clients achieve growth in a dynamic environment. The core focus of the Company is to solve complex problems at the convergence of digital and physical world for its clients. As times are changing, the line between the physical world and digital world is blurring by the day. Automation marked the start of this convergence while the future will see further amalgamation of technologies with day-to-day operations in both B2B and B2C settings. Cycle- times have reduced manifold, requiring frequent changes to the approach and decisions being made by clients. To support such needs for data driven and dynamic decisions, LTI, in conjunction with its domain knowledge and strong parentage, is working to provide a complete ecosystem right from thought-leadership, innovative approaches to business problems to development and maintenance of solutions (a balanced mix of digital and traditional offerings). Through its renewed focus on emerging technologies, the company looks to assist its clients to be 'future-ready' to engage with their 'millennial' customer segment. In Banking and Financial Services and the Insurance industries, LTI is well prepared to take advantage of emerging trends such as Robotic process Automation (RPA) and artificial intelligence. With deep expertise in leading insurance products L&T Infotech's Mosaic Experience Centre. LARSEN & TOUBRO and Automation among others with companies like Nutanix, GE Predix, Pega, Coupa etc. Combined with the domain expertise and existing capabilities of the Company, such partnerships have helped develop end-to-end offerings through sophisticated ecosystems which can solve complex problems in a digital economy, thus bringing bespoke value-added propositions to clients. Building on increasing its digital focus, in November 2016, the Company acquired AugmentIQ, a start-up offering IP-based, big data and analytics solutions that allows enterprises derive business benefits from big data. This acquisition has helped the Company increase its footprint in the analytical space. Expand geographical presence: LTI markets and distributes its solutions directly through its global delivery model. Apart from penetrating into new clients in North America and Europe, the Company is targeting further expansion in other markets with potential, such as Australia, Singapore, Japan, South Africa, Ireland, Saudi Arabia and the Middle East. It has augmented its teams in these markets to further explore the opportunities therein. The Company has allocated resources to these markets to identify opportunities through greater regional experience, expertise and client referrals. It has recruited local nationals to assist in market penetration efforts, in addition to complying with local regulatory requirements. In the Middle East, the Company intends to leverage the strong presence of the L&T Group, which is engaged in the oil and gas, construction and transportation sectors. The Company has increased presence in Germany, France and the Nordic region and will continue to enhance its capabilities and address gaps in language capability and geographic coverage in these regions. Outlook Enterprises today are facing an expanding base of demanding born-digital consumers, disruptive new entrants and intensified competition from digital-savvy competitors. As a result, Enterprises are looking for client-centric and nimble IT service providers who can deliver outcomes quickly. With our rich, real-world expertise, engineering mindset, an enviable client list and deep desire to be relevant, LTI is uniquely positioned to win in this new world order. We are committed to, and have made good progress, in our journey to become a next generation IT services and solutions company, focused on solving the challenges of physical and digital convergence. In FY2017, we delivered an industry leading revenue growth of 10% in constant currency terms and 9.3% in USD terms. With intense focus on client success and comprehensive transformation capabilities across digital, analytics, IoT, automation and cloud, we are optimistic about our future. Technology Services Business LARSEN & TOUBRO Headquartered at Knowledge City, Vadodara, L&T Technology Services helps clients gain the competitive edge by building smart products, enabling smart manufacturing and offering smart services. Overview: L&T Technology Services Limited (LTTS) is a leading global pure-play ER&D services company. LTTS offers design and development solutions throughout the product development chain and provide services and solutions in the areas of mechanical and manufacturing engineering, embedded systems, engineering analytics and process engineering. A well-defined Digital Engineering strategy helps it deliver differentiated solutions for building Smart Products, Smart Manufacturing and enabling Smart Services. As part of this strategy, LTTS has developed IP led solutions like its loT platform UBIQWeise and smart building framework i-BEMS that has been launched in the global market. The key differentiators for LTTS are its domain expertise and multi-vertical presence in industry segments like Transportation, Industrial Products, Telecom & Hi-tech, Process Engineering and Medical Devices. LTTS has been recognized as an Expansive and Established player in Zinnov Zones 2016 Product Engineering Services and features in the Leadership Zone across 10 major industries due to its best in class solutions, capabilities and offerings that combine digital technology with an innovation led orientation. LTTS operates in five industry segments namely Transportation, Industrial products, Telecom & Hitech, Process industry and Medical devices. LTTS also provides two horizontal service offerings - 193 194 VERTICALS RATED IN LEADERSHIP ZONE . Significant Initiatives Thus, Hiring, Engaging and retaining talent continues to be the major focus areas for the company. LTI added 951 professionals into its family (net new hires), through campus recruitment and lateral hiring in this fiscal year with an increase in hiring premium college graduates as well. The global headcount of the Company as on March 31, 2017 was 21,023. To support all these initiatives, the Company has upgraded its in-house IT systems to be more digital-focused. In addition to acquisitions, the Company is also investing in partnering with startups to help enhance its digital offerings and in turn, give startups a platform and opportunity to scale-up. With increased adoption of SaaS and other services components, LTI is also investing in Security as a practice, to serve clients with services to cope with large-scale migrations to the public and private clouds. The Company is actively partnering with academic institutions such as Massachusetts Institute of Technology (MIT), Indian Institute of Management Ahmedabad (IIMA), Veermata Jijabai Technological Institute (VJTI) in order to provide thought- leadership to its clients for future digital solutions. • Focus on organizational transformation: Our new quality policy reaffirms our client commitment and focus on delivering rich and meaningful experiences to customers. LTI is amongst the few IT Services firm to have such a differentiated policy, with the idea that in order to rise in the experience economy in the digital age, there needs to be a fundamental shift from the services mindset to the experience mindset. With a focus on transforming the experiences of its clients, people and systems, LTI has launched a rigorous transformation program which focuses on changing the way it works, interacts and collaborates both within and outside the organization. The Company is working towards transforming the way it works by incorporating Design Thinking in various capacities in the organization across all levels. The Company is also looking to transform the way it delivers the traditional Application Development and Application Maintenance projects by automating services and inducing a DevOps method of working with continuous, progressive changes which complement the client business landscape replacing the traditional delivery model that has rigid support cycles. Flexibility and agility are two key objectives for the Company. This will help in a non-linear growth in the company with faster and more efficient delivery of projects. • Focus on people transformation: The most crucial element of an organization is its people. LTI has transformed various aspects of work life for its people. The transformation begins with articulating five key beliefs: • Be agile • Go the extra mile • Push frontiers of innovation Keep learning • Solve for Society These five guiding principles aim for the organization to be nimble towards changes, work over and beyond the call of duty to serve its clients, innovate on a day-to-day basis to transform the approach to work, continuously enhance their way of working and keep its focus on welfare for the society. Collaboration is key to the growth of an organization. LTI not only provides digital solutions and offerings to its clients, it has also adopted digital solutions for enhancing its own approach to work. LTI was the first company to implement Workplace (the collaborative platform of Facebook for organizations) in the IT services industry. 191 192 The 20,000+ employees use this platform for collaborative discussions and sharing of directives within the firm across all geographies, levels and business units. LTI is also a global service partner for Facebook to help organizations rollout the Workplace platform. Comprehensive services from the Company offers comprehensive services for change management strategy, adoption roadmap, setup, installation, integration, use-case development, and API extension and development. The Company is also recruiting global talent in local markets particularly for high end digital competencies. LTTS aspires to continue to be a global leader in the ER&D segment. Key initiatives to achieve this objective include: LARSEN & TOUBRO • Transformation Initiatives: LTTS has initiated a few transformational projects to further strengthen its processes, systems and global delivery models to achieve operational excellence. Identifying Account Delivery Managers (ADMs) and Account Relationship Managers (ARMs) to ensure account level leadership, setting up onshore, near shore strategic and client-led centres in geographies like Poland, Western Europe (Auto), EU & US(CPG & Chemicals), building processes, governance models and leadership development plans are a few initiatives of the transformation project. LTTS will capitalize on disruptive technology trends as part of its five year strategic plan Lakshya that emphasizes profitable growth. It will harness opportunities in four critical areas - digital engineering for smart products & services, smart manufacturing & operations, perceptual engineering and pervasive technologies. LTTS took a big step in this direction with the recent acquisition of US-based Esencia Technologies, a move that will strengthen LTTS footprint in ASIC, VLSI, Embedded Design Services and Hi-Tech sectors, where it foresees growth momentum. LTTS will continue on its journey of using advanced technological solutions to delight customers and create value for all stakeholders. 197 198 Financial Services Business L&T Financial Services' offerings span the geo-socio-economic spectrum and comprise solutions in retail finance, wholesale finance, investment management and wealth management. LTTS has established a strategic presence in differentiated sectors and developed the specialized domain knowledge that should enable it to successfully help customers and gain from an economic upturn. The Financial Services business segment comprise of retail and corporate finance, housing finance, infrastructure finance, investment and wealth management business carried through the subsidiaries of L&T Finance Holdings Limited. L&T Finance Holdings' business organised under verticals structured as the Retail and Wholesale Platform, Investment Management and Wealth Management business, is carried out through its wholly owned subsidiaries. Business Environment 1. Rural Finance LTFH's strength in Rural Finance makes it one of the fastest growing NBFCs in this sector. LTFH is now a single brand under L&T Financial Services (LTFS) offering through multi channels, multiple financing products like Farm Equipment Finance, Two-wheeler Finance and Microfinance. (a) Farm Equipment Finance: The tractor industry grew -15% in the year 2016-17 after two continuous years of market contraction. The positive growth was on account of a normal monsoon cycle which has helped reinvigorate • Account Mining and Farming: As a part of its sales strategy, LTTS has decided to focus on top 30 customers, which contribute 65% of its revenues. This strategy has been christened as T-30. Under this strategy, as a client relationship matures and deepens, LTTS seeks to maximise its revenues and profitability by expanding the scope of services offered to that client with the objective of winning more business from the clients, particularly in relation to its more substantive and value-added services. L&T Finance Holdings (LTFH) While traditionally the technology services industry globally has been impacted by macro-economic factors and is sensitive to the cyclic nature of certain businesses, the potential remains as strong as ever for relevance of engineering services. For instance, global automotive OEMs are moving rapidly towards implementation of infotainment systems and autonomous vehicles. The Industrial Products market continues to offer immense growth potential, while the positivity in the Telecom & Hi-tech market is boosted by technological advancements, infrastructure availability, high customer demand and supplier push by the semiconductor industry. Medical device manufactures are aggressively looking at emerging markets and new product development. Notwithstanding volatile commodity prices and the slowdown in capex spending by manufacturing companies in the Process Industry, the potential for growth is visible in certain specific segments like the Food Industry. The Financial Services business also included general insurance which was housed in a wholly- owned subsidiary, L&T General Insurance Company Limited (L&T GICL). The group divested its stake in L&T GICL during the year. LARSEN & TOUBRO • Investment in Technologies & Innovation Engine: LTTS is focused on driving innovation Outlook 195 196 and adopting solutions in line with technological trends. Its culture of innovation since its establishment has enabled it to expand the range of its offerings to customers and improve the delivery of its solutions and products. LTTS has initiated Proofs of Concepts (POCs), which demonstrate the viability of a design concept and it has also set up labs and developed new centres of excellence, where it has invested in new technologies such as engineering analytics, power electronics, IoT and M2M, which has allowed LTTS to capitalise on key growth areas and trends. • areas. • Patents: Since inception, LTTS has filed for 57 proprietary patents and has co-authored 197 patents with its customers. Its patent portfolio covers many aspects of its products and the processes for making those products and are focused on developing mature solutions such as Ubiq Weise TM, IBEMSTM in emerging technology • Awards & Recognition: L&T Technology Services was recognized as the Company of the Year by the Indo American Chamber of Commerce (IACC) in 2016. The IACC also awarded the company as the Best Green Office Space of the year for its eco-friendly campuses. In March 2017, L&T Technology Services was conferred with the Golden Peacock National Quality Award, 2017, as a recognition of the company's consistent focus in enabling new • technologies for global businesses. LTTS has also won the Dataquest Vertical Warrior Award in IT/ITeS for innovative use of digital technology earlier in 2017. Its delivery centres are ISO 9001:2008-certified. Its Aerospace & Medical Devices practices are AS 9100C and ISO 13485:2003 certified. Also its Embedded Systems & Software activities are assessed at Maturity Level 5 of SEI's CMMI® Development. Partnerships and Alliances: The recent global alliances established by LTTS include a Digital Engineering Transformation partnership with Microsoft Corporation to deliver Microsoft Azure Engineering Solutions for global enterprises across industries. This strategic partnership enables enterprises around the world to leverage the cutting-edge IP-led Digital Engineering solutions of LTTS hosted on Microsoft's Azure enterprise cloud-first, mobile-first infrastructure. Technology Events: LTTS promotes annual technology events such as Tech Panorama, which is an initiative by its Technology Solutions and Innovation Centre team which serves as a platform for its employees to participate in technical events and forums to showcase their skill and demonstrate their ideas. Also its open- innovation initiative, TECHgium TM - co-sponsored by its customers, provides a platform for the nation's talented engineering graduates to solve real-world engineering problems and also get due recognition for it. Students are given an opportunity to use their futuristic ideas to come up with creative solutions. LTTS has also partnered with UTC Climate, Controls & Security and Otis, units of United Technologies Corp. to create an innovation laboratory focused on integrated buildings, smart homes and cold chain technologies. Other notable alliances and partnerships include AUTOSAR, Tele2, National Instruments, Sierra Wireless & Thing Worx. Engineering services that enhance efficiency, while reducing time-to-market and costs. During the year 2016-17, LTFH launched mobility solutions, aimed towards improving the operational efficiencies and making the disbursement process simpler. This move enabled LTFH to achieve the highest single-month disbursement of ~ 460 crore in September, 2016. LTFH continued its key initiatives of enhancing customer reach, building scalability, and managing risks effectively, attaining process excellence and cost excellence. Microfinance business witnessed a YoY growth of 39% in disbursement, along with a book growth of LTFH is focused on Infrastructure Project Financing (including Infra Debt Fund), Structured Corporate Finance, Debt Capital Market and Supply Chain Financing. LTFH's strength lies in strong Wholesale Finance The future strategy of LTFH is to transform Microfinance into a steady state retail business by moving further towards a technology and analytics-driven platform, expand into under penetrated new geographies to further enhance customer reach and further strengthen risk management framework, processes and systems The post demonetization period was marked with increased delays in repayments in certain geographies. While the situation has improved significantly from March onwards, LTFH expects stress in some areas to continue for some more time. In line with its conservative polices, LTFH has made adequate loan loss provisions in the year 2016-17 and will continue to do so based on how the situation develops. 59%. underwriting ability, structuring and syndication capabilities. LTFH has competitive advantage in terms of robust risk management framework, best in Industry productivity through differentiated business model, proven ability to scale rapidly and an efficient and technology enabled delivery channel. (a) Infrastructure Financing: Over the last year, the Government of India introduced several policy changes targeted at speeding up the infrastructure development in the country. The Renewable Energy sector reported a record capacity addition of over 11 GW in the year 2016-17, an increase of around 60% over 7.1 GW reported in FY16. The outlook for the road sector has improved through improvements in dispute resolution framework, focus on EPC contracts and generating financial resources for future road construction. knowledge, efficient transaction processing and management capabilities, superior advice to customers through all stages of the project life cycle, minimal turnaround time and an operational IDF platform 4000 crore. Considering the stress in the overall infra sector, LTFH proactively made accelerated provisions over and above the regulatory requirements in order to strengthen the balance sheet. Infrastructure Finance business witnessed a YoY growth of 21% in disbursement, along with a book growth of 19% L&T Infra Finance is a specialised project financier that finances renewable energy and road projects. LARSEN & TOUBRO LTFH has competitive advantage in this segment in terms of in depth sector In this segment, the future strategy of LTFH is to broaden the sectoral expertise & develop framework for new sectors, leverage successful PE interface in renewables for entry into new sectors and sharper focus on selection and structuring of project parameters (b) Structured Corporate Finance: In the year 2016-17, the bank credit slowed down to a 60 year low of 5.1% on the back of lower credit demand and increased reliance on the bond market for debt requirement. Despite the above trend, LTFH's structured corporate finance expanded its asset base in the year 2016-17 with persistent focus on both growth and profitability. The growth trajectory has been backed by robust origination ability and detailed appraisal process. The structured corporate finance asset size showed a healthy 28% growth and doubling of disbursement numbers in the year 2016-17. 2. The infrastructure book in its focus sectors of renewables, roads and transmission showed a healthy growth. The infrastructure lending platform saw its fee income doubling in the year 2016-17 through larger underwriting and advisory mandates. This was ably supported by the down-selling desk which doubled its down-sell quantum in this year. The Infrastructure Debt Fund (IDF) also increased its asset base to over 200 During the year 2016-17, NITI Ayog came out with a new policy to provide cash relief to (c) Microfinance: The microfinance industry has recorded a 26% YoY growth for the year the year 2016-17. However, there has been a trend of decrease in growth since demonetization. LTFH believes that the decrease is not entirely attributable to demonetization as other external factors and vested interests also impacted performance in certain geographies. The industry appears cautious and a pause in growth can be expected in the short term. Road subsidiaries of L&T IDPL have submitted their claims to NHAI and only about half of the total claims have been paid by NHAI so far. L&T Kudgi Transmission Limited (L&T KTL) being the first transmission line project of L&T IDPL had achieved the commencement of commercial operations (COD) in September 2016. The elements of the project are (a) Element 1: 400KV line A&B between Kudgi and Narendra (New) with a line length of 17.66 km; (b) Element 2: 765KV line between Narendra (New) and Madhugiri with a line length of 379.84 km (c) Element 3: 400KV line between Madhugiri and Bidadi with a line length of 93 km. With a total of 1169 towers across 492 km length, the project had successfully entered revenue stream. The project has reported book profits from the first period of operations. This project was also refinanced in March 2017, thereby reducing interest rates significantly. Construction work is in full swing in Deccan Tollways (DTL) in Telangana and Sambalpur Rourkela (SRTL) in Odisha. The two road projects are expected to commence tolling in the year 2017-18. Three road subsidiaries had issued notices of termination of projects owing to political force majeure and/or default by the Authorities under the respective concession agreements. In case of the two national highway projects, NHAI has taken over the project operations during the year but has not accepted the cause of termination and arbitration proceedings have been initiated for realisation of the claims for termination payments. The Company has proactively engaged with project lenders and taken legal steps wherever possible to protect the interests of the lenders. LTFH has competitive advantage in terms of robust origination ability & exhaustive appraisal process and expanded product suite with introduction of IPO funding in response to conducive market environment In the case of a state highway in Gujarat, the subsidiary of L&T-IDPL has withdrawn its notice in order to facilitate implementation of Strategic Debt Restructuring Scheme by lenders to the project. The subsidiary of L&T-IDPL and the lenders are negotiating with the state government to improve the project viability. LARSEN & TOUBRO the demand in this sector. With monsoons expected to be normal this industry is expected to grow at ~ 7-8% this year. During the year, LTFH gained market share, doubling its share of the farm equipment financing market to 8.6% in the second half of the year 2016-17 from a 4.2% in the first half. However, the business witnessed a YoY Contraction by 11% in disbursement, along with a book de growth of 6%. This trend is expected to reverse in the current year with excellent growth in both disbursements and book. LTFH has competitive advantage in this segment in terms of its proven ability to last through the cycles, differentiated value proposition for top Dealers, analytics driven business mix and channel management and technology led sourcing and credit decisioning for superior service proposition. In this segment, the future strategy of LTFH is to create a right portfolio mix across geographies, OEMs and new/refinance, digitise the entire process and provide a differentiated value proposition to LTFH The Retail Finance business participates across the income cycles of the rural economy - from farm equipment to commodity storage and more... partners to capture higher counter share at chosen dealers through a differentiated value proposition (b) Two-Wheeler Finance: The Two-wheeler industry posted a healthy YoY growth of 8%. The market in FY18 is expected to remain stable with a demand influenced by structural factors like growing middle class segment and urbanization. Technology-led sourcing along with analytics driven channel segmentation enabled LTFH to gain market share. LTFH's domain expertise and in-depth knowledge in chosen geographies have laid the foundation of its strong business growth. A well-established network and tie-ups with OEMs enabled LTFH to retain a strong market position. In FY 17, the two-wheeler finance business witnessed a YoY growth of 10% in disbursement, along with a book growth of 20%. LTFH has competitive advantage in this segment in terms of technology led sourcing and decisioning, analytics driven channel selection and differentiated value proposition for top dealers and market depth in chosen geographies In this segment, the future strategy of LTFH is to enhance TAT proposition through mobility solutions and automated credit decisioning, further increase market penetration in its chosen geographies and develop new locations and increase market depth by exploring entry into self-financed segment 199 The future strategy of LTFH is to deliver steady state high spreads along with high fee income through superior structuring of financing solutions (b) Real Estate finance: Real Estate is transitioning towards a more regulated industry with the introduction of Real Estate Regulatory Authority (RERA). Low home mortgage interest rates, Government schemes such as Pradhan Mantri Awas Yojana and State Affordable Housing Policies are providing a fillip to the real estate sector and consequently investment and portfolio management philosophy. In this segment, the future strategy of LTFH is to focus on building core assets to achieve the dual purpose of achieving higher profitability while TIME LARSEN & TOUBRO TO SAVE L&T Mutual Fund and L&T Capital Markets Limited provide investors with a range of investment and wealth management options. ensuring stability in overall AUM, increase SIP book to ensure steady flows and establish presence in key counters to gain a higher share of assets, thereby widening LTFH's reach 5. Wealth Management With a GDP growth hovering over 7-8% and a strong future outlook, India's growth story is making it an increasingly attractive market for wealth management firms. The regulatory environment too is evolving, presenting opportunities for established wealth managers to expand their offerings. - The year 2016-17 was a turnaround year for the business from a loss of 24 crore in year 2015- 16 to a profit of 5 crore in the year 2016-17, the average assets under management grew by almost 46% during the year with Q4 2016-17 AAUS being more than 13000 crore. Company's revenue witnessed a rise of 71% during the year 2016-17, being at 50 crore. LTFH has competitive advantage in this segment in terms of comprehensive services suite including Loan against shares, Mutual funds. Real estate finance complements the Company's key offerings for HNIs. Offerings like Debt Capital Markets significantly strengthen the customer value proposition. A strong track record of AUS and revenue growth ranks it high amongst the key market players and strong partnerships established since inception have enabled LTFH to service the differing needs of clients across segments, asset classes and markets. In this segment, the future strategy of LTFH is to focus on Investment advisory and family office to form new meaningful relationships and deepen existing relationships with clients to attain a higher wallet share. Acquisition of new clients will continue to remain a key area of focus for the business and increase sales strength. Significant Initiatives (a) Human Resources: LTFH have embarked upon the "Transform" journey to LTFH 2.0 with a sharp "Focus" on creating superior shareholder value by "Delivering" top quartile Return on Equity (ROE). The role of Human Resources has significantly transformed since 2016, from being a function which used to manage the human resources of LTFH to being the prime driver of the change in culture required for the successful transformation of LTFH. All the initiatives in this area have been designed for transforming the old LTFS into LTFS 2.0. LTFH firmly believes that any transformation journey needs to be sustainable. While the strategy LTFH has embarked upon for delivering a top quartile RoE is a 4 year strategy, superior value generation for the shareholders will come only if the new way of 'Results not Reasons' becomes a way of life. LTFH has competitive advantage in this segment in terms of robust performance of the Fund's equity schemes and diversified and ever-expanding reach across distribution channels During the year 2016-17, the Mutual Fund business continued its previous year's growth momentum. With YoY growth of 39%, the business outperformed the industry growth rate, while maintaining a healthy mix of core assets under equities and fixed income and a strong investment performance, supported by strong inflows into the core products. India's mutual fund industry witnessed a 35% growth during the quarter-ended March 2017, taking the Average Assets Under Management (AAUM) to 1829583 crore, as compared to 1353443 crore AAUM recorded during the quarter-ended March 2016. Mutual Fund LTFH has competitive advantage in this segment in terms of credit focussed approach to the business and large ticket size underwriting capability In this segment, the future strategy of LTFH is to aim to take sole/ anchor investor positions thereby positioning L&T financial services as a significant player (d) Supply Chain Finance: During the year 2016-17, LTFH tied up with marquee names in the distribution business of information technology and mobility segment. The supply chain business showed consistent disbursements while increasing the profitability through increase in margins and opex control. Supply chain Finance business witnessed a YoY growth of 10% in disbursement, however, along with a book degrowth of 7%. 3. Housing Finance LTFH has identified housing finance as one of its core sectors based on the long term growth prospects of this industry. LTFH's products in this sector include Home loans, Loan against property & Real estate finance. (a) Home Loans & Loan against Property (LAP): The year 2016-17 witnessed sluggish trend in real estate sector on account of high prices, inventory overhang and high interest rates. While overall price levels have largely been unchanged in most cities, luxury segment has seen some correction. Demand for housing is expected to see revival this year after a slowdown over the past 2-3 years. This is primarily on account of affordable housing segment, which includes residential units for Economically Weaker Sections, Lower Income Group and Middle Income Group segments. At beginning of the year 2016-17, LTFH realigned its focus towards disbursing loans to self-employed customers. It also focused 201 202 (c) Debt & Capital Market (DCM): LTFH's DCM business invests in select infra project issuances and financial institutions. Additionally DCM entered structured finance segment in the year 2016-17. DCM desk doubled its disbursements, sell downs and profitability to demonstrate excellent BBBB on doing a larger share of business through direct sourcing. Despite challenging market situations, LTFH's Home Loan and LAP book grew by 21% during the year, touching a new milestone of 7500 crore. LTFH has competitive advantage in this segment in terms of sharpened proposition to strengthen the product offering to self-employed customers and streamlined processes to deliver faster sanctions and disbursement TAT to the customer. In this segment, the future strategy of LTFH is to drive operational efficiencies through digitisation and automation, go digital and use analytics for direct sourcing and cross selling, focus on key locations to bring in value contributors and manpower productivity and leverage L&T ecosystem for business growth and market intelligence An Elevated Corridor sweeping over a city - one of L&T's many road development projects. 4. real estate finance business. In the commercial office segment, major metros have seen strong demand for Grade A office space leading to a higher occupancy and robust rental growth. Real estate finance business witnessed robust YoY growth of 74% in disbursement, along with a book growth of 40%. LTFH has competitive advantage in this segment in terms of comprehensive product suite to address top developers' funding requirements, robust risk management & early warning signal mechanism and strong processes to deliver faster TAT In this segment, the future strategy of LTFH is to focus on top real estate developers with the aim to build sustainable relationships, build a wider product portfolio and focus on Syndication/Sell down for risk distribution and leverage the L&T ecosystem for business growth and market intelligence L&T Housing Finance fulfills the desire for home ownership in over 40 markets across the country. Demonetization: Since almost 98% of toll collections are by way of cash, the announcement of demonetization caught both the road users and concessionaires by surprise. To avoid hardship to the public and long queues at toll plazas, the Roads Ministry and NHAI advised stoppage of toll at all National Highway toll plazas exempting all traffic from tolls across the country from November 9 - December 2, 2016 (over 23 days). The compensation payable for such a force majeure event varies under different concessions and hence NHAI came out with a Standard Operating Procedure in this regard. While the developers have sought a cash compensation for revenues lost, NHAI is looking at only reimbursing certain costs and in certain cases, extension of concession period. LTFH's endeavour is to ensure that its HR processes are completely aligned with the above three aspects and they work towards creating leadership which makes the transformation smooth and sustainable. The government, through a series of initiatives, working on policies to attract significant investor interest. The Indian government plans to develop roads under different programmes such as National Highways Development Project (NHDP), Special Accelerated Road Development Programme in North East (SARDP-NE) and Left Wing Extremism (LWE). The government has identified development of 2,000 km of coastal roads to improve the connectivity between ports and remote villages. • Garnering volunteers from the organisation (Boondein) to contribute towards CSR initiatives Outlook Major leading indicators suggest that the economic activity is gradually improving. This is driven by improving global demand and a remonetisation-led pick-up in domestic activity. IMF expects India to resume the 8% growth path in the medium term. This should happen as soon as the short-term dislocation to consumption from demonetization passes. The nation is expected to remain the fastest growing economy on the back of high private consumption levels and gradually implemented domestic reforms. LTFH sees growth picking up significantly, supported by a normal monsoon, modest costs of borrowing, pay hikes for state government employees and stronger export demand. Other growth supportive factors will be Government's continued thrust on physical infrastructure and the Real Estate Regulation Act (RERA), which will pave way for greater transparency and accountability in the real estate sector. The Goods & Services Tax, implemented in July 2017, will also have long term structural benefits, despite short-term execution and adjustment risks during the course of 2017-18. 205 Developmental Projects Business Kudgi Power Transmission Line project, Karnataka. 206 Developmental Projects business segment comprises (a) Infrastructure projects executed through its joint venture company L&T Infrastructure Development Limited and its subsidiaries and associates (L&T IDPL Group); (b) the Hyderabad Metro Rail project, executed through its subsidiary L&T Metro Rail Hyderabad Limited (c) Power Development Projects executed through its subsidiary L&T Power Development Limited and its subsidiaries (L&T PDL Group) and (d) Kattupalli Port operations of Marine Infrastructure Developer Private Limited, a subsidiary company. The operations of developmental projects business segment primarily involves development, operation and maintenance of basic infrastructure projects in the Public Private Partnership (PPP) format, toll collection including annuity based road projects, power development and power transmission, development and operation of port facilities and providing related advisory services. Significant cash generating assets have been created under the current business model which are being explored for monetisation on a continuous basis in order to maximise value creation for the benefit of stakeholders. L&T IDPL Group: Overview: L&T Infrastructure Development Projects Limited (L&T IDPL) is a major player in the Public-Private Partnership projects in India with business interests LARSEN & TOUBRO across Roads and Bridges, Ports, Wind energy and emerging sectors such as Power Transmission Lines. As of March 2017, L&T IDPL has a portfolio of 17 projects at an estimated project cost of about 17555 crore which includes 15 road projects with 7182 kms, one transmission line project and a port berth at Haldia. L&T IDPL's portfolio of infrastructure assets also includes windmills in Tamil Nadu. Transmission Line: 125 crore Total Project Cost: : 4.5 MTPA No. of Projects : 1 Capacity Port: • Initiating remedial education programmes 16,080 crore Total Project Cost: : 7,182 Km Lane Km : 15 No. of Projects Roads & Bridges: 13 Operational Projects 2 Implementing Projects Nurturing 100 Integrated livelihood development centres in villages . • Creating disaster relief shelters, towards the Tamil Nadu floods in November 2015 This gives the ability to effectively manage the Market risk (liquidity and interest rate risks) emanating from the core businesses of LTFH. A robust governance framework is setup to monitor and manage the Market Risk Operations. Treasury Risk Management Dashboards should provide cross-risk view and are anchored to LTFH's Risk Appetite Statement. It leverages risk measurement and analytics to further enhance early warning capabilities and to use those in driving decisions. EWS helps in timely identification of portfolios with increasing risk, enabling timely remedial measures (where applicable) and eventually driving lower NPAs. Risk Dashboards & Early Warning Signals (EWS) A robust RAS is setup that acts as a governing framework from board to front line to facilitate trade-offs between risk, value and growth monitors. It helps in effective risk and return management while providing greater clarity and autonomy to businesses. Risk Appetite Statement (RAS) Risk-adjusted pricing LTFH believes that this journey will become sustainable if it gets 3 aspects right: (i) Clarity and communication of Management Intent; (ii) A well-honed execution engine and (iii) A performance oriented Culture • • During the year 2016-17, LTFH engaged a leading global risk management consultancy to further strengthen its risk management framework. Based on their recommendations, LTFH is strengthening its capabilities in the four key areas to ensure that the businesses operate fearlessly within the defined risk appetite and risk tolerance levels. its chosen businesses. Having embarked on this transformational journey, LTFH recognises the criticality of risk management practices towards a longer term success. LTFH has a robust management framework covering various families of risk like credit risk, portfolio risk, market risk and operational risk. (b) Risk Management: The transformation journey embarked by LTFH involves rapid growth in 204 . No. of Projects : 1 This tool helps to track transaction level and portfolio level actual pricing vis-à-vis risk-adjusted pricing. Thus giving more clarity on value creation by products/ portfolios. This pricing tool incorporates weighted average tenor, based on behavioural maturity in order to align with expected cash-flows. LTFH has relooked at the existing architecture, to revamp it completely to achieve the digital aspiration that it thrives to achieve. The end state architecture will be modular and agile, enabling LTFH to keep pace with changing technology. A strong digital and data analytics roadmap touching every aspect of the customer journey will not only improve the customer experience but also substantially enhance efficiency and productivity Constructing water harvesting structures, known as Dohas • Some of the highlights of the CSR activities are: • Achieve Scale by collaborating with right partners Sustainable development, creating right structures Social Impact through right projects aligned with company's focussed businesses (c) Digitisation & Analytics: In line with the theme of "Grow Fearlessly", LTFH's Digital & Data Analytics roadmap encompasses achieving multi-fold increase in "Scale", "Cost Effectiveness" and "Customer Experience". In order to enable it for achieving the same, LTFH has decided on the following design principles: Biometric based data capturing, Paperless On-boarding, Transact with it on any day in the year. • Thrust areas were re-modelled to rake in the 3S approach which believes in: of financial literacy to rural India, resulting in enhanced absorption of facilities and schemes granted by the Government and other financial institutions. LARSEN & TOUBRO In addition to this, LTFH also focussed on Financial Literacy. It helped in spreading the message CSR witnessed a transformation during the year 2016-17. LTFH's overarching theme of Sustainable livelihoods was revisited to align to the larger needs of the rural ecosystem - through Integrated Water Resource Management (IWRM). LTFS committed itself to come up with long-term innovative solutions benefitting the water-deprived communities. The IWRM programme engaged with communities to implement interventions in order to address their core needs in water and facilitate the rural economy through agriculture and allied activities. (d) Corporate Social Responsibility • Significant Developments Capacity Total Project Cost: : 2,400 MW 91000 crore for 27000 road development. The road sector had exclusive allocation as the Government had identified 2000 km of coastal connectivity roads for construction and development, which would ultimately lead to better connectivity of remote villages. The union budget had allocated a substantial amount to infrastructure development and termed it as top priority of the Government. 207 208 203 The infrastructure credit has witnessed a sharp increase in stressed advances. The Reserve Bank of India (RBI) has taken steps like allowing flexible restructuring of infrastructure loans to ease cash flow pressure in the infrastructure sector. The recent slowdown of Public Private Partnership (PPP) projects could be attributed to a combination of events, namely global economic slowdown, weak regulatory and institutional frameworks, delay in issue of clearances by authorities, financing issues (over-leveraged debt and paucity of equity), acquisition of land, aggressive bidding by developers, contractual issues, including long drawn out dispute resolution arising in a maturing PPP landscape, inadequate diligence and appraisal by lenders, and lack of flexibility in contractual arrangements. The budget allocation for National Highways for the year 2017-18 is ₹64000 crore. Besides, the union budget has also earmarked crore for its rural roads development programme, Pradhan Mantri Gram Sadak Yojana (PMGSY), under the Rural Development Ministry, which together makes it more than Business Environment Infrastructure is a key sector that propels overall development of the Indian economy. The significant expansion of the economy over the past two decades has led to demand for strong infrastructure in the country. The county's capacity to absorb and benefit from new technology and industries depends on quality and efficiency of infrastructure. In order to augment economic growth, the government initiated several policy and enabling measures to support the creation of high-quality infrastructure and efficient delivery of services to its citizens. 1,300 crore Total No. of Projects Project Cost : 17 "Transmission System for Power evacuation" from NTPC Kudgi (3x800 MW) of Madhugiri in Karnataka. 3 sections comprising a total length-470 KM : * 17,555 crore LTIDPL has 21% stake in Berth No. 4A of Haldia 95000 32624 80000 50000 65000 69351 37653 72358 2015-16 (IndAS) Domestic 8243 11997- 5% 3% 13824 5% -193796 74% 7.9% Power MMH E&A 2016-17 (IndAS) International 101975 2741- 110000 5.1% 136035 120000- 41507 43383 80000- 92652 101488 40000- 0- 2015-16 (IndAS) Domestic 110011 2016-17 (IndAS) 215 L&T continues to carry a robust order book of 261341 crore as at March 31, 2017 that is higher by 4.9% as compared to the previous year. This gives multi-year revenue and margin visibility to the Company. Composition of international order book declined to 26.7% as at March 31, 2017 as compared to 28.2% in the previous year, mainly arising from contraction of infrastructure spends in the Middle East. Infrastructure segment contributed 74% of the consolidated order book, comprising mainly Building & Factories 18.3%, Transportation Infrastructure business 14.6%, Heavy Civil Infrastructure 17.0%, Power Transmission & Distribution 13.0% and Water & Effluent Treatment 10.1%. Order Book Composition 24823 10% 1% 5917 2% crore crore 125000¬ Gross Revenue from Operations International Infra 8.0 Hydrocarbon 615 0 Others 53 70 2015-16 (IndAS) Domestic 1158 2016-17 (IndAS) International 14581 9136 Capital expenditure (net) (2822) (4123) (Purchase)/Sale of other investments Sources of Funds Treasury and dividend income 971 2059 FY 15-16 60000 11979 7345 40000- Borrowings (net of repayments) (671) (69) 63781 60618 Net (investment)/ divestment * 3 204 20000 Payment (to)/from minority interest (net) Dividend paid FY 16-17 Interest paid (Increase)/Decrease in cash balance 6.7% 17679 14539 30000 4.0 36019 50558 36242 0 0.0 2015-16 (IndAS) Domestic 2016-17 (IndAS) International OPM % International order wins, led by Power Transmission & Distribution business, constituted 18.7% of the total international order inflows during the year. 53921 60000 12.0 Utilisation of Funds (22) (14581) (8079) (1322) (2093) (1842) (2462) 613 (9136) *This includes (investment)/divestment of long term investments, consideration received on sale of stake in subsidiaries/joint ventures and net cash flows on loans/ deposits made with associate companies and third parties The total borrowings as at March 31, 2017 stood at *93976 crore as compared to 88135 crore as at March 2016. The gross Debt Equity ratio is 1.75:1 as at March 31, 2017 as compared to 1.87:1 as at March 31, 2016. B. SEGMENT WISE PERFORMANCE (GROUP) 1. Infrastructure Segment Infrastructure segment bagged fresh orders worth *78492 crore for the year 2016-17, lower by 7.5% over the previous year. The segment witnessed an elongation of bid-to-award timelines in the domestic market and a reduced opportunity in the Middle East arising out of fiscal policy measures in those countries. New projects for commercial buildings did not gain traction during the year. Residential buildings prospects received major set-back due to liquidity constraints aggravated by demonetisation. Competition remained intense and some bids were lost to competitors on price. Order inflow growth was realised in Heavy Civil Infrastructure and Smart World & Communication businesses which mitigated the decline in order inflows of other businesses within the Infrastructure segment. Infrastructure segment clocked gross revenue of * 53921 crore for the year 2016-17 registering 6.7% growth over the previous year. Execution of orders in hand by Building & Factories was adversely affected due to the demonetization exercise undertaken by the Government. Execution impediments by way of customer clearances, workfront availability and right of way issues also adversely affected execution progress in some jobs of Building & Factories, Heavy Civil, Power Transmission & Distribution and WET (Water & Effluent Treatment) businesses leading to muted growth for the segment as a whole. Revenue from international operations constituted 32.8% of the total revenues of the segment during the year as compared to 28.8% in the previous year. The increase was mainly on the back of a robust opening order book position in the beginning of 2016-17 led by Transportation Infra, Heavy Civil and Power Transmission & Distribution. Infrastructure Segment operating profit was lower by 2.2% y-o-y at 5372 crore for 2016-17. Operating margins declined by 100 basis points at 10.2% during the year 2016-17 owing to cost overruns due to extended stay in a few jobs. crore 90000 Infrastructure Segment Gross Revenue & OPM % 11.2 10.2 Percentage (1565) crore 14711 24217 Staff expenses for the year 2016-17 at ₹13853 crore increased by 3.9% as compared to the previous year mainly due to increased international operations. The increase in staff cost expenses were contained through manpower rationalization, increased productivity and substitution of natural attrition through automation measures. The Company continues to lay focus on LARSEN & TOUBRO speedier and cost effective operations through higher levels of automation. Sales and administration expenses increased by 22.0% y-o-y to 7044 crore mainly due to higher provisioning by Financial Service business and increase in warranty provisions for projects entering defect liability period. The Group operating profit grew by 5.8% y-o-y at 11075 crore for the year 2016-17, however, the EBITDA margin for the year declined by 20 basis points to 10.1%. Impairment losses provided on a few commercial ships, lower margins recorded by Infrastructure segment on account of extended stay in a few jobs and increase in the provision for doubtful loans and non-performing assets by Financial Services had adverse impact on the total operating margin for the year 2016-17, as compared with the previous year. Depreciation & Amortization charge [Figures in brackets relate to previous year] Depreciation and amortization charge for the year 2016-17 was higher by 32.6% at 2370 crore as compared to 1787 crore in previous year. Apart from increase in the depreciation on additions to the fixed assets, impairment of capitalized borrowing costs in the assets of L&T Seawoods has resulted in increase in the depreciation charge for the year. Other income mainly consists of the profit on sale of liquid investments, interest and dividend income from treasury investments. Higher treasury income led by deployment of surplus funds generated through operations as well as through divestment of stake in subsidiaries resulted in boosting other income during the year at 1401 crore as compared to 904 crore in the previous year. Finance cost Tax Expense Income Tax charge for the year has declined to 2007 crore compared to 2485 crore in previous year mainly on the back of higher investment led tax incentive, variations in Dividend Distribution Tax applicable on Dividends from subsidiaries and tax impact on merger of some subsidiaries of L&T Finance Holdings Ltd. Profit after Tax & EPS Consolidated Profit after Tax (PAT) at 6041 crore for the year 2016-17 rose by 42.7% over the previous year. Consolidated Earnings per Share (EPS) including exceptional items for the year 2016-17 at 64.80 is higher by 42.5% over the previous year. Other Income ☐ Operating Profit (PBDIT) Other Expenses Sales, Administration & HE Others Operating Cost and PBDIT Manufacturing, Construction and Operating (MCO) expenses increased by 7.8% y-o-y at 78039 crore, broadly in line with revenue growth. These expenses mainly comprise cost of construction material and other raw materials, subcontracting expenses, manpower costs of Information Technology & Technology Services Segment and interest expense of Financial Services business. Operating Expenses and Profitability 2016-17 Total Order book: 261341 crore as at March 31, 2017 Revenue from Operations L&T Group achieved a revenue of ₹110011 crore during the year with a growth of 7.9% y-o-y. Revenue from international operations stood at 34.2% as compared to 32% in the previous year. The increase in revenue was achieved despite disruption in business operations for a few months due to the demonetization exercise undertaken by the Government. The increase was largely contributed by Infrastructure, Hydrocarbon and Power segments supported by project execution. Delayed payments and approvals, workfront non-availability, challenges to the right of way and customer clearances impacted the revenue accrual in Building & Factories and Power Transmission & Distribution businesses. Heavy Engineering, Electrical & Automation recorded muted revenue growth due to deferral of anticipated orders and lackluster industrial demand. Service oriented businesses housed in Financial Services group and Information Technology & Technology Services group, however, continue to perform well adding to overall growth momentum of the Company. 216 6.4% (5.6%) 10.1% (10.3%) 12.6% (13.1%) - 70.9% (71.0%) Mfg. Construction & Operating Expenses Staff Expenses Net Worth, Capital employed and Returns The Net Worth of the shareholders at 50217 crore as at March 31, 2017 increased by 6037 crore as compared to the position as on March 31, 2016. Return on Net Worth (RONW) for the year 2016-17 was higher at 12.8% as compared to 9.9% in the previous year driven by significant increase in the net earnings. Capital employed increased to 77458 crore as compared to 72729 crore as at March 31, 2016. Net Worth and Returns crore Liquidity & Gearing Cash flow from operations increased significantly to 11979 crore as compared to 7345 crore in the previous year mainly driven by healthy operational performance coupled with better working capital management. Cash flow is further improved by Company's divestment activities mainly in Technology businesses viz. Larsen & Toubro Infotech Limited and L&T Technology Services Limited. The Company deployed its surplus funds in current investments which in turn, led to increase in treasury income during the year. 217 Infrastructure Segment Order Inflow The Group incurred capital expenditure of 2822 crore during the year mainly attributable to L&T Hyderabad Metro Rail project. There was a net decrease of 22 crore in the cash balances as at March 31, 2017 as compared to the beginning of the year. Fund Flow Statement Particulars Operating activities crore 100000 84835 7.5% 78492 80000- Exceptional items of 121 crore in the Statement of Profit & Loss in current year mainly represent gain on divestment of stake in L&T General Insurance reduced by provision for impairment of road concessions portfolio housed in L&T-IDPL. 142995 Exceptional Items 2016-17 (IndAS) ― RONW % Percentage 60000 16.0 50217 44180 40000 12.8 12.0 9.9 20000 - 8.0 0 4.0 1340 crore 2015-16 (IndAS) Net worth The interest expense for the year 2016-17 at was lower by 19% in comparison to ₹ 1655 crore for the previous year. Refinancing/repayment of loans and lower exchange loss attributable to interest cost resulted in reduction of the average borrowing cost for the year 2016-17 to 7.2% as compared to 9.0% in the previous year. Order Inflow Order inflow improved in Hydrocarbon and Heavy Engineering segments on the back of a few large orders. Infrastructure segment saw a decline of 7.5 % in the order inflow due to order deferrals especially in Buildings & Factories space that witnessed weak demand and cash flow crunch. A lower level of order inflows from the Middle East also contributed to the decline. Infrastructure segment with its order intake of ₹78492 crore, however, remains a major contributor to the total consolidated order inflow for the year. 218 • • Training its upcoming Metro staff with the existing infrastructure Rigorous follow up is on with the State Government for favorable resolution of the power, sub-lease, security, compensation for delays and scope change, time-extension and other issues pending with the Government. L&T-MRHL has worked out certain models to obviate TOD related 3 LARSEN & TOUBRO The Hyderabad Metro project is the world's largest public-private-partnership in the urban transportation sector. threats, while leveraging on the various advantages of the offering like metro rail connect, strategic locational offering, etc., L&T-MRHL is also undertaking rigorous follow up with the Central Government for smooth disbursement of further tranches of VGF. L&T- MRHL has targeted to gear up to commission Stage 1 and Stage 2 of the project during the current financial year. It has also been decided to exercise strict control on costs and optimize the revenue sources. It is also pursuing to re-negotiate and mitigate the claims from contractor/vendors in the best possible way. L&T MRHL has undertaken development of 4 Grade A Retail Mall projects adding to 1.25 Mn.sft. at key locations along the Metro corridor. Development is nearing completion and launch of Malls at Punjagutta & HITEC City is planned in H1 of 2017-18, with a strong booking of about 90% at both the malls. Major brands signed up include PVR, Marks & Spencer, Lifestyle, Shoppers Stop, Pantaloons, Hyper City, Reliance Retail, etc. The other two malls at Erramanzil & Musarambagh are scheduled for completion in H2 of 2017-18, with strong customer bookings already made. The Company has a robust Risk Management Process, having identified risks and categorized them as Major, Moderate and Minor. The major risks for this Project are non-availability of required Right of Way (ROW) and delay in approvals from the Railways. Risk Mitigation measures in the form of increased liaison with Government instrumentalities to get early approvals, Stage wise implementation with focus to mobilize and execute only on available work fronts and fill up the gaps subsequently have assisted in optimization of resources with minimal cost and time overruns. L&T-MRHL has a robust internal control framework system in place which has been certified by an external consulting firm namely BDO during 2015- 16. The framework has been reviewed from time to time and found to be operating effectively. On the human resources front, L&T-MRHL implemented revised minimum wages across all sectors for its sub-contractors deployed in the • 211 category of "constructions or maintenance roads & buildings", "shops & establishments", "security services" etc. It also extended maternity leave period from 12 weeks to 26 weeks for first two children, and for contract labour, it has extended amended provisions under the Payment of Bonus Act (revised). Similarly, under ESI Act, 1948 gross limit was increased from ₹15000 to 21000 and the same is being implemented. L&T-MRHL has provided employment to 65 employees in 2016-17 Outlook L&T-MRHL is planning to open two out of three corridors of Metro (Blue & Red lines) by the end of 2017-18 with an expected ridership of approx. 12 lakh per day. Measures like fare integration with other transport modes and collaborations with various feeder services for first & last Mile connectivity are being pursued so as to strengthen fare revenue. L&T-MRHL is also exploring other Non-Fare Revenue initiatives like consultancy services with in-house competency on Metro system, Wi-Fi, Radio, etc., that will add extra revenue to the company. Buoyed by the success of Phase 1 Malls, L&T- MRHL intends to start with a 1 Million sq.ft Mall at Raidurg along with a Built-to-Suit IT Office Tower of around 1 Mn.sft for a client with whom negotiations are in advanced stage. Discussions with customers to kick start a few other developments of the portfolio are underway. L&T Power Development Group Overview L&T PDL, a wholly owned subsidiary of L&T, has been incorporated as its Power Development arm with an objective of developing, investing, operating and maintaining power generation projects. Currently, L&T PDL portfolio comprises projects in thermal and hydel power generation. Hydel Power Projects Hydel projects with an aggregate capacity of 870 MW are in various stages of development. A brief status is depicted below: Name of Project Capacity (MW) State 212 99 Uttarakhand • Leasing out space for erecting mobile towers. •Leasing out Optical Fibre With a view to reduce the OPEX cost, the company has tied-up with a solar power developer for generating captive solar power of about 15MW at a very competitive price. Though Metro commercial operations were not started during the FY 2016-17, L&T-MRHL explored various revenue generating options through resources & skills that it has developed for over a period of 5 years in Metro Industry. crore 160000- LARSEN & TOUBRO concessionaires and contractors in the Roads sector. Under this, the Authority would pay 75% of the Arbitration Award to the aggrieved concessionaire against a bank guarantee and the funds will need to be utilised for other national highway projects. The policy is applicable to two subsidiaries of the Company and while one of the subsidiaries has already received claim of 69 crore, the second project is awaiting receipt of claim of 121 crore. There are several other claims of the road projects that are under different stages of dispute resolution and they too would benefit from an early settlement. During the year 2016-17, the Company mitigated its risk in its subsidiary in Colombo by selling its stake. With a view to have direct management control over the Hyderabad Metro project and also considering its other commitments in the state of Telangana, L&T has decided to take over the stake held by the Company (L&TIDPL) in L&T Metro Rail (Hyderabad) Limited. The shares held by LTIDPL were purchased by L&T in March 2017 after receipt of necessary approvals/ consents. By divesting this large investment, L&T-IDPL is now in a good position to fund its growth. Outlook: The pace of recovery in the sector is likely to be slow and will be linked to the on-ground impact of the policy measures taken as well as the availability of funds. Aggressive bidding in the past and inability or limited ability to raise equity for Built- Operate-Transfer (BOT) projects have impacted the viability of infrastructure projects and have reduced the risk appetite of developers for new projects. The Government initiatives in rebalancing of risk sharing, resolving legacy issues, strengthening institutional capacity and scaling up finance etc., would revive the sector. With an estimated traffic growth of 8% in the new fiscal, the road subsidiaries are expected to perform better during 2017-18. The Company will continue to look for opportunities to churn its portfolio and would refinance some of the road projects during the year 2017-18 as well. A five-year business plan is under finalisation and L&T-IDPL is well poised to be on the growth trajectory. L&T-IDPL is evaluating the new models in the Roads sector (such as Hybrid Annuity Model and Toll Operate and Transfer) and is expected to participate in bids to bag projects in the road and transmission line sectors besides looking at good brownfield opportunities. L&T Metro Rail (Hyderabad) Limited Overview L&T Metro Rail (Hyderabad) Limited (L&TMRHL) was incorporated on 24th August 2010 as a Special Purpose Vehicle to undertake the business to construct, operate and maintain the Metro Rail System including the Transit Oriented Development in Hyderabad under Public Private Partnership model on Design, Build, Finance, Operate and Transfer (DBFOT) basis. The company entered into a Concession Agreement with the erstwhile Government of Andhra Pradesh on 04.09.2010. L&TMRHL has come up with following non-fare revenue generating initiatives: The Metro Rail system shall be constructed on three elevated corridors from Miyapur to L.B.Nagar, Jubilee Bus Station to Falaknuma and from Nagole to Shilparamam covering a total distance of 71.16 Kms. The concession period of the project is for 35 years including the initial construction period of years. The Concession period is extendable for a further period of 25 years subject to fulfillment of certain conditions by the Company as set out in the Concession Agreement. In terms of the Concession Agreement, both the Government of Telangana (State Govt) and 209 210 L&TMRHL are required to comply with certain conditions precedent for the occurrence of appointed date which shall be the date for commencement of concession period. The State Govt has declared the appointed date as 5th July, 2012 upon fulfillment of the condition precedent (CP) from both the parties i.e. L&T Metro Rail (Hyderabad) Limited and the State Govt. The company is executing the project covering a total distance of 71.16 Kms in 3 different corridors. This entire distance is further sub divided into 6 stages for ease of implementation. Project cost incurred during the year 2016-17 is * 2325 crore and cumulative upto 31.03.2017 is ₹ 12482 crore. The company has achieved 5th Project milestone as per the Concession Agreement having expended 75% of the project cost by 31st July, 2016. CMRS (Commissioner of Metro Rail Safety) approval has been obtained for Stage 1 & 2 of the project, which are fully ready for commissioning. The overall physical progress of the project as on 31.03.2017 is 72%. Construction works in Stage 3, 4 and 5 are going on at brisk pace. The company has filed applications with the State Government seeking grant of power at cost of service basis, longer sub-lease rights on TOD, the Government to bear the cost of Security at stations etc. which are crucial for commissioning the project. As there have been delays from the Government's side in providing continuous RoW, the company has applied to the Government for interim extension of time of scheduled completion date upto November, 2019, keeping in view the present progress of the project. The corresponding cost implications are being prepared and shall be submitted to the government upon receipt of approval for extension of time. The Company continued to successfully obtain further tranches of Viability Grant of Funding (VGF) from the Central Government during 2016-17 and the total VGF drawn stood at ₹ 957 crore as on 31st March 2017. This confirms the certainty of the Central Government participating in the project. Business Environment About 9 million transport trips are performed every day in Hyderabad city and major share is taken by Bus transport (50%). The City roads are congested with 8% road area and has a very low average speed (about 8KMPH). L&T MRHL will provide safe & punctual travel and reduce the customer pain points through Last Mile Connectivity, Digital ticketing, Mobile app, etc. join attracting the commuters. Non fare revenue generation will be achieved through cross selling of products to commuters. This will be further strengthened by Metro expansion which will result in higher ridership. The company has been granted rights for Real Estate development of 18.5 Million sq.ft., with strategically located land parcels interspersed at prime city locations, adjoining Metro Stations & Metro corridors. Developments would encompass Grade-A commercial developments for IT/ITES Office, Healthcare, Retail and Hospitality. Significant Initiatives The estimated project cost is ₹ 16375 crore which includes the cost of rail system and 6 million TOD which is to be funded by a term loan of 11478 crore, equity share capital of 3439 crore and Viability Gap Fund from Government of 1458 crore. The company has tied up entire debt and achieved financial closure on 1st March 2011. Singoli-Bhatwari Hydro Electric Project During the year 2016-17, M/s. Kudgi Transmission Ltd & L&T Krishnagiri Walajahpet Tollway Limited (L&T KWTL) refinanced their debt taking advantage of the softening of interest rates and the ratings of the projects. 74 Arunachal Pradesh • In house workshop established to optimise cost through reverse engineering • Performance linked allocation made for improvement in coal quality • Reduction in interest cost through reduction in borrowing and lower interest rate achieved through iterative financing • NIL availability loss on account of shortage of Coal • 99% of dry fly ash disposal achieved - received runners up award for Fly Ash Utilisation by Mission Energy Efficiency • Awarded the best Thermal Plant Award by Bureau of Energy Efficiency • CSR initiatives focussing on development of village infrastructure, education, skill building, gender equality, health and environment were implemented during the year 213 214 L&T-PDL is committed to generate reliable and environment friendly power under safe working conditions. A policy on Quality, Environment, Health and Safety has been put in place. Emphasis is laid on continual improvement of our processes and practices to achieve improved environmental, health and safety performance. Training on HSE for employees and stake holders is undertaken on a regular basis to foster a culture of health and safety. On the Human Resources front, L&T-PDL has built a committed team of 270 professionals experienced in the field of operations and maintenance of power plants. Special emphasis is given to training and development of the workforce through various training programs. In addition to the competency building programs the company also focusses on soft skills and leadership development. Outlook Lower per capita consumption continues to promise robust long term demand. On the fuel side coal production capacity is expected to further increase to cater to the requirements. Punjab is expected to witness a flat growth in demand for electricity during 2017-18. NPL is likely to remain the lowest cost power producer amongst the IPPS in the state which shall translate into a plant load factor in 2017-18 at ~77%. L&T-PDL has embarked on a five year strategic plan under the 'Lakshya 2021' program of the group. Major focus areas for L&T-PDL during 2017-18 would be maximising plant availability, improving operational efficiency, enhancing fuel quality, resolving the regulatory issues, cost management and HSE compliance. Reliability Centred Maintenance approach implemented Increasing global warming triggered awareness and need for long-term sustainable energy security has renewed the focus on the cleanest traditional power source hydro power. Accordingly, Government is considering policy initiatives for revival of hydro power sector. L&T-PDL expects that approval and timely implementation of these initiatives by the Government in the near future may positively impact the hydro-power development in the country. Marine Infrastructure Developer Private Limited: Kattupalli Port Kattupalli Port at Chennai is a container Port with capacity to handle 1.2 million TEUS per annum. It has a container terminal with two container berths, and has been accorded SEZ status. The port complex was earlier housed within L&T Shipbuilding Limited. In 2016-17, the business was demerged into a separate company Marine Infrastructure Developer Private Limited. During the year 2015-16, the Company (L&T) entered into an agreement with Adani Group (a port operator) to demerge the port business and divest the stake in the resulting company. The Company is in an advanced stage of divesting its ownership in the container port to a strategic investor, and has demerged that business into a separate company to facilitate the divestment. It is planned to complete the transfer of the port ownership in entirety in 2017-18. LARSEN & TOUBRO Financial Review 2016-17 I. L&T CONSOLIDATED A. PERFORMANCE REVIEW L&T continued to perform well during the financial year 2016-17 despite challenging business environment. Domestic investment climate remained sluggish and customers have been deferring capex spending in the business segments where L&T predominantly operates. The financial year 2016-17 was also marked by a few major policy developments including demonetization which led to disruption of business for a few months. The government has remained focused on structural reforms and we expect this to improve India's long-term growth potential. On the global front, uncertainties amplified as developed economies were supportive of protectionist policies and Middle East countries continued to face fiscal constraints on the face of soft oil prices. The business environment remained competitive with both domestic and international competitors looking to increase business in India which is still one of the fastest growing economies. The Company recorded satisfactory performance during the year with its presence in diverse sectors, turnaround in some of its businesses, focus on containing working capital and better funds management. As a part of L&T's goal of maximising shareholder value creation, the Company successfully listed two of its subsidiaries, Larsen & Toubro Infotech Limited and L&T Technology Services Limited during the course of the year. The Company also exited the general insurance business. The Company is in an advanced stage of divesting its ownership in a container port in Tamil Nadu to a strategic investor and has demerged that business into a separate company in 2016-17 to facilitate the divestment. for the corresponding previous year 2015-16 have been restated under IND AS for making items comparable. The reserves as on 1-4-2015 have been restated under IND AS. Up to FY 2014-15, the Financial Statements were prepared under previously notified accounting standards usually referred to as I-GAAP (Indian Generally Accepted Accounting Principles). Order Inflow & Order Book Tagurshit Hydro L&T Group achieved order inflow of ₹142995 crore during the year 2016-17, growing at 5.1% over the previous year. Domestic order grew by 9.5% while international order inflow declined by 4.3% y-o-y. International orders at 41507 crore constituted 29% of the total order inflow during the year. Middle East continues to be the key region for the Company and a large proportion of Order Inflows were obtained from that Region. Generally lower oil prices have, however, imposed fiscal hurdles on policy makers in Middle East countries and they have responded with reduced allocations on infrastructure spending, which still provide a good opportunity basket for the Company. In India, government spending did not gain momentum as expected in the areas of defence, hi-tech manufacturing and infrastructure development. Capital allocation from Indian private sector is still lacking due to a significant under-utilisation of existing capacities, diminishing returns, financial stress on account of higher debt levels and uncertain global business outlook. Focus area for hydel business would be expediting construction activities at its Singoli-Bhatwari hydel project. • Overhaul Operational efficiency measures implemented & monitored to improve efficiency • Unit Start-up procedure further optimised to reduce cost and time As at March 31, 2017, L&T Group comprises of 89 subsidiaries, 10 associates, 34 joint venture companies and 27 joint operations. Most of the group companies are strategic extensions of the project and product businesses of L&T. Project business catering to the hydrocarbon sector is housed in a separate group of companies to provide the business with focus and independent functioning. Majority of the subsidiaries support L&T's core businesses and enable access to new geographies, products and business segments. Certain distinct service businesses such as Information Technology, Technology Services, Developmental Projects and Financial Services are housed in separate subsidiary and joint venture companies of L&T. The Financial Statements for the year 2016-17 have been prepared in compliance with the new set of Indian Accounting Standards (IND AS) and the comparatives • Reduced oil consumption to 0.12 ml/kwh First supercritical coal-fired power project (full EPC) by L&T for Nabha Power Ltd. at Rajpura in Punjab. 267 Himachal Pradesh Reoli-Dugli Hydro Electric Project Electric Project 430 Himachal Pradesh Total 870 Name of Subsidiary L&T Uttaranchal Hydropower Limited L&T Arunachal Hydropower Limited L&T Himachal Hydropower Limited L&T Himachal Hydropower Limited Current Status Advanced stage of construction CEA meeting for grant of Techno-Economic Concurrence held in Oct-16 Electric Project Report submitted • 93.06% availability achieved Detailed Project Significant Milestones & Initiatives Third Party Sampling and testing through CIMFR (Central Institute of Mining and Fuel Research) has been operationalized for the rail mode to mitigate the grade slippage issue in linkage coal. Domestic Coal prices are expected to go up as the Government is considering a revision in royalty on coal and lignite. Coal India Limited(CIL) increased e-auction quota by way of reducing allocation to improve returns. Growth in demand for power during 2016-17 remained muted with all India Plant Load Factor (PLF) hovering at 60%. Thermal Power Generation continues to contribute 80% of the overall Power requirement in India. Renewables sector also made an impact where record low solar (3.3/kWh) and wind tariffs (3.46/kWh) discovered via auction route brought renewable closer to grid parity with thermal. Sach-Khas Hydro NPL also happens to be the lowest cost power producer within Punjab with benchmark operational efficiency. NPL owns and operates a 2X700 MW supercritical thermal power plant at Rajpura, Punjab. Entire power generated from this plant is sold to Punjab State Power Corporation Limited (PSPCL) for a period of twenty five years under a Power Purchase Agreement (PPA). The plant is built on super critical technology of Mitsubishi, Japan. It is the first 'made in India' supercritical power plant to be commissioned and operational in the country. Business Environment LARSEN & TOUBRO Thermal Power Projects - Nabha Power Limited (NPL) The plant sources its fuel from South Eastern Coalfields Ltd. (subsidiary of Coal India Limited) under a 20-year Fuel Supply Agreement (FSA). NPL also secured approvals to arrange coal from alternative sources to make up for any shortage in supply of coal under the FSA. Bhakra-Nangal distributary is the perennial source of water for the plant under an allocation by the State Government. The plant is operated by an in-house team of experienced operations and maintenance professionals. The power plant has been running successfully for over three years with an availability of 93% during 2016-17. NPL has been the most reliable source of power for the state of Punjab and has supported its requirements with uninterrupted supply during peak season. 8000 2500 3708 --20.0 3791 0.0 4000- 4952 --30.0 4676 3906 2015-16 (IndAS) 0 2016-17 (IndAS) Domestic International OPM % 0+ --40.0 2015-16 (IndAS) 2016-17 (IndAS) Domestic International - 4.0 OPM % 4712 -4.0 0.6 11.7% 18525 220 12392 6133 2016-17 (IndAS) International Segment revenue grew by 11.7% y-o-y at ₹ 9628 crore for the year as jobs under execution progressed. International revenue contributed 48.6% of the total revenue of the segment as compared to 45.3% in the previous year. Focused attention to costs and close out of challenging legacy projects in the Middle East resulted in an operating profit of 657 crore as compared to 53 crore in the previous year and consequent margin improvement. Hydrocarbon Segment Gross Revenue & OPM % Percentage 16.0 12.5 crore 16000 Percentage F-10.0 6.8 12.0 5401 5367 0.6% -0.0 5000 12000- 1693 1576 - 8.0 9628 8618 10.0 LARSEN & TOUBRO 9015 6. IT & Technology Services (IT & TS) 9.7% 9.0 64295 8000 60000- 8.0 - 8.0 -7.0 4000- 45000 6.0 5.86 10.0 5.75 0- 2015-16 (IndAS) 0.0 30000- - 4.0 2016-17 (IndAS) F3.0 15000 2015-16 (IndAS) 2.0 2016-17 (IndAS) -NIM % 2015-16 (IndAS) Domestic - 5.0 Funds employed by the segment at ₹ 1139 crore as at March 31, 2017 decreased by 27.7% as compared to March 31, 2016 aided by liquidation of old customer outstanding, receipt of customer advances and favourable WIP in projects under execution. 72038 crore 75000 IT & TS segment comprises L&T Infotech group of companies and L&T Technology Services group of companies. During the year, these companies have been listed. Segment recorded gross revenue of 9888 crore for the year ended March 31, 2017 with growth of 9.7% over the previous year. International revenue constitutes 93% the total revenue of the segment. The Segment Operating profit stood at 2063 crore for the year 2016-17 as compared to 1816 crore in the previous year. Operating margin improvement of 70 basis points is on account of higher manpower utilization. IT & TS Segment Gross Revenue & OPM % crore 10000- FS Segment Gross Revenue 8377 8000- 13.1% 7406 6000- 4000- Percentage 2000- 2015-16 (IndAS) 2016-17 (IndAS) Disbursal of fresh Loans and Advances in the Focus businesses, namely Rural, Wholesale and Housing Finance, amounted to 49305 crore during the year ended March 31, 2017, a growth of 29% y-o-y. In line with the disbursements, Asset Book in focused lending businesses stood at 63978 crore as at March 31, 2017 recording a growth of 20% y-o-y. Net interest margins at 5.86% remained stable. crore 16000 20.5 21.2 Percentage - 24.0 FS Segment Total Assets and NIM % 12000 9888 16.0 0+ 0 4000 5000- 1089 4000- Power Segment 2266 Gross Revenue & OPM % 2000- 1412 crore Percentage 16000 10.0 854 0- 2015-16 (IndAS) 3,5 Domestic 12000 2.7 8000 6427 8% 6939 0.0 1285 1542 7861 >100% Order Inflow Heavy Engineering Segment March 31, 2016, due to better vendor management and increase in advances on order wins by Heavy Civil business. 2. Power Segment 2866 crore as Power segment bagged orders worth compared to 2901 crore in the previous year. The sector continues to be plagued with lower levels of coal-based power plant ordering in the face of overcapacity in boiler and turbine production as well as aggressive pricing by competitors. Despite losing a number of bids in view of these challenges, the focus of the segment is on ensuring that bidding remains disciplined. crore 4500 Power Segment 3000 2901 Order Inflow 2866 645 2107 1500 The Funds employed by the segment at ₹ 4272 crore as at March 31, 2017 is higher by 58% as compared to March 31, 2016 due to increase in unbilled revenue & investments. 2221 0 2015-16 (IndAS) 2016-17 (IndAS) International Domestic Segment revenue grew 8% y-o-y at ₹6939 crore, as jobs under execution achieved substantial progress. Revenue from international projects at 1285 crore represented 18.5% of total revenue and was contributed by gas based power plant jobs under execution in Bangladesh. Operating profit margin was increased to 3.5% during the year ended March 31, 2017 as compared to 2.7% in 2015-16 on account of better execution progress and release of contingency cost. Reporting of the Power segment results has undergone important change from I-GAAP to IND AS. Power Equipment JVs which used to be accounted under line- by-line consolidation method for revenues, inter-company revenue eliminations, expenses, margins and minority interest adjustment under I-GAAP are only consolidated at the PAT level now under IND AS. As prescribed by IND AS, only the margin-light EPC / construction revenues are reported in the group level sales. Since the margin rich JV operations are consolidated only at the PAT level, margins reported under I-GAAP and under IND AS are not comparable. Thus margins of 11.6% for FY 2015-16 reported under I-GAAP have now been restated to 2.7% for the same period (FY 2015-16) under the method of accounting adopted under IND AS. However revenues of 7011 crores in FY 2015-16 under I-GAAP have reduced marginally to ₹6427 crores under IND AS since a significant portion of revenues in the nature of inter- company revenues were already eliminated under I-GAAP. The Funds employed by the segment stood at 485 crore as at March 31, 2017 lower by 16.7% as compared to the position as on March 31, 2016 with better vendor management. 3. Heavy Engineering Segment Heavy Engineering segment recorded order inflow of 7861 crore for the year ending March 31, 2017, which more than doubled vis-a-vis the previous year on the back of a major Defence order. International orders constituted 13.8% of the total order inflow. crore 8000 6000- 794 4885 5654 0 --60.0 -80.0 0- 2016-17 (IndAS) Funds employed at 2429 crore decreased by 9.9% y-o-y aided by higher provisions and taxes. 5. Hydrocarbon Segment The Hydrocarbon segment registered a turnaround in 2016-17 in terms of Order Inflows, Revenues and margins. This was achieved through stronger execution processes, close out of challenging legacy jobs in the Middle East, forging deeper customer relationship, manpower rationalization, cost containment measures and resolute attention to control on Working Capital. The segment secured fresh orders aggregating to 18525 crore during the year registering a steep growth of 81% y-o-y driven by large size international EPC orders. Consequently, International orders accounted for 66.8% of total order inflow for 2016-17 as compared to 31.4% in previous year. Hydrocarbon Segment 2015-16 (IndAS) Domestic International OPM % Funds employed by the segment decreased by 21.9% y-o-y at 1297 crore as at March 31, 2017 on account of lower construction work-in-progress and inventory. 4. Electrical & Automation Segment (E&A) 1838 E&A segment faced a difficult business environment in 2016-17 due to a prolonged period of low offtake from industrial sector even though sales from agricultural sector were strong due to a good monsoon in 2016. The business thus recorded gross revenue of 5367 crore for the year with a marginal drop of 0.6% compared with the previous year. Revenue from international operations constituted 29.4% of the total revenues of the segment during the year as compared to 31.4% in the previous year. crore 7500 E&A Segment Gross Revenue & OPM % 15.1 crore 20000- Order Inflow 15000 81.0% 10000- 10234 3209 Segment operating profit for the year improved to 15.10% y-o-y to 702 crore. Operating margins improved by 260 basis points during the year 2016-17 owing to favourable product mix and improved operational efficiencies. 7025 1000- -40.0 -10.0 2015-16 (IndAS) Domestic 2016-17 (IndAS) International OPM % 6772 2016-17 (IndAS) International Segment gross revenue of 3447 crore improved by 5.9% compared to the previous year. Revenue from international operations constituted 32.7% of the total revenue. The segment recorded significant increase in the operating profit at 615 crore for the year against operating profit of 19 crore in the previous year, on back of better execution and operational efficiencies. Last year, the 219 operating profit was adversely impacted on account of cost and time overruns on a few jobs which were also partly contributed by a prolonged labour strike at the Company's facility in Hazira. crore Heavy Engineering Segment Gross Revenue & OPM % 2319 Percentage 40001 19.9 3256 3447 0.6 5.9% 0.0 3000- 1128 1418 --20.0 2000- - 20.0 7. Financial Services (FS) 66301 Total Assets 2015-16 Operating activities 6147 3300 Divestment (Investment) in Group Cos 1306 (1820) Dividend from group companies and Treasury income 1896 1568 Others 53 70 Sources of Funds 9402 3118 Borrowings (net of repayments )/ (Repayments) (3110) 321 Sale/(purchase) of investments (2535) (473) Capital Expenditure 2016-17 Particulars crore Fund Flow Statement 12.4 20000 11.1 11.3 15.0 crore 60007 10000 2015-16 (IndAS) 5454 Funds Employed 10.0 (635) 2016-17 (IndAS) RONW % ROCE % 4500- 3000- 1500- 0+ 2015-16 (IndAS) 2016-17 (IndAS) Other comprehensive income (OCI) Other Comprehensive income as on March 31, 2017 amounted to 157 crore as compared to 83 crore in the previous year. OCI mainly comprises the gain on hedges taken towards foreign currency and interest risk exposures. Return on Net Worth (RONW) including the exceptional items for the year 2016-17 is 12.4% in line with the previous year. Return on Capital Employed (ROCE) for the year 2016-17 at 11.3% is higher as compared to 11.1% of the previous year. Capacity underutilization in some of the capital intensive businesses continues, resulting in lower returns. Liquidity & Gearing Business operations generated cash flows of ₹6147 crore during the year significantly higher than 3300 crore in the previous year mainly supported by release of working capital. Dividend and treasury income flows contributed 1896 crore to the cash along with divestment proceeds of 1306 crore. The Company used cash flows mainly for repayment of borrowings 3110 crore, and parked surplus funds in current investments 2535 crore. 224 LARSEN & TOUBRO 5000 12.4 (797) (1153) best talent. Suitable retention policies are being constantly worked upon to minimize attrition of key resources. The Company has institutionalized the risk management processes to map & monitor the risks across the businesses and respond effectively to achieve the strategic objectives. The Company has been successful in tapping the opportunities both in domestic and international markets. The Company sees risk management as a business enabler and believes that risk is an integral part of every business and promotes a culture of building the ability to anticipate and manage risks effectively and converting them into opportunities. Financial Risks Capital Structure, Liquidity and Interest Rate Risks The Company continues its policy of maintaining a conservative capital structure which has ensured that it retains the highest credit rating in a tough economic environment. Low gearing levels also equip the Company with the ability to navigate business stresses on one hand and raise growth capital on the other. This policy also provides flexibility of fund-raising options for future, which is especially important in times of global economic volatility. Despite the challenging economic environment in 2016-17, the Company managed to restrain the working capital usage, both at a gross and net level. The Company has been investing capital into subsidiaries as scheduled and in some cases to provide for deterioration in performance caused by the sluggish economic/business downturn and also to optimise overall Group level interest rate costs. The Company plans to maintain adequate liquidity on the Balance Sheet to deal with periods of slow recovery/downturn in economic conditions. The Company judiciously deploys its temporary surplus funds in short term investments in line with the corporate treasury policy. The Company constantly monitors the liquidity levels, economic and capital market conditions and maintains access to the lowest cost means of sourcing liquidity through banking lines, trade finance and capital markets. The Company further optimized the cost of debt by using subsidized export financing scheme of RBI and issuing Commercial Papers. The Company dynamically manages interest rate risks through a mix of fund-raising products, investment products and derivative products across maturity profiles and currencies within a robust risk management framework. Foreign Exchange and Commodity Price Risks The various businesses of the Company are exposed to fluctuations in foreign exchange rates and commodity prices. It also has exposures to foreign currency denominated financial assets and liabilities. The business 226 LARSEN & TOUBRO related financial risks, especially involving commodity prices, by and large, are managed contractually through price variation clauses, while the foreign exchange and residual commodity price risks are managed by an appropriate choice of treasury products for balancing risks and optimising the hedging costs at the same time. The above risk management activity is carried out under the framework of Risk Management Policy approved by Audit Committee and noted by the Board. Financial risks in each business portfolio are measured and managed centrally within the Company. These risks are reviewed periodically, quantified and managed within the acceptable thresholds as laid out in the Risk Management Policy of the Company under the aegis of the Audit Committee. The financial year 2016-17 was characterised by a relatively strong USD against developed market currencies post US presidential elections due to potential fiscal expansion which subsequently got subdued in Q4 FY 16-17. The rupee followed broader global trends with an appreciation bias with increased reform momentum in fiscal/monetary policies and political developments during 2016-17. The combination of lower exchange rate volatility with robust financial risk management processes resulted in lower financial cost and input cost volatility. IV. INTERNAL CONTROLS The Company believes that a strong internal control framework is an important pillar of Corporate Governance. It has established internal control mechanisms commensurate with the size and complexity of its business. A strong Internal Control framework is established through right tone at the top for good corporate governance which serves as a foundation for excellence and same is embedded in operations through its policies and procedures. Employees of the Company are guided by the Company's 'Code of Conduct'. As a part of good governance, the Company's 'Whistle Blower' policy enables the employees to have direct access to the Chairman of the Audit Committee without interference from other levels of management. From 2016-17, Whistle Blower policy has also been implemented for Vendors & Channel partners as well to facilitate expression of genuine concerns about unethical behaviour, improper practice, any misconduct, any violation of legal or such requirements, actual or suspected fraud by any official of the Company without fear of punishment or unfair treatment. Senior Management and the Audit Committee of the Board is periodically apprised on the internal processes of the Company with respect to Internal Controls, Statutory Compliances and Assurance. The Company has laid down Internal Financial Controls as detailed in the Companies Act, 2013 and has covered all major processes commensurate with the size of business operations. These have been established at the entity and process levels and are designed to ensure compliance to internal control requirements, regulatory compliance and appropriate recording and reporting of financial and operational information. The Company has reviewed and sustained internal financial controls by adopting a systematic approach to evaluate, control design and operating effectiveness. The Internal Control Organisation As the first line of defence, primary responsibility for design, establishment of internal controls and its operating effectiveness lies with Heads of business and support functions in their respective areas of operation. There is a Policy on Internal Controls at Corporate level and individual businesses also have Internal control frameworks and procedures documented in the form of Internal Controls Manuals, Standard Operating Procedures, Accounting Guidelines including regular management reporting and monitoring thereof. Policies and procedures are reviewed periodically for any changes required, to changing business needs as well as improvements in processes to strengthen the internal control systems. Authorisation Matrices for financial transactions are derived based on Board decisions which are delegated to individuals based on business needs within the overall limits of Corporate Authorisation Guidelines. Financial powers are vested based on business requirement and there is no automatic vesting of powers based on designation/ grade of an individual. The Corporate Internal Control (CIC) department is the second line of defence to facilitate and monitor the efficacy of the Internal controls embedded in Operations so as to assist management in establishing strong internal controls. CIC formulates procedures and guidelines for areas of weaknesses which are identified during internal audit or as triggered by process owners or management based on internal or external risk factors. Apart from the internal mechanism to review and monitor internal controls; the Company also periodically engages independent professional firms to carry out review of the effectiveness of various key control processes in businesses and support functions. Their observations and suggestions on good practices are reviewed by the management for implementation and strengthening of the controls. Corporate Audit Services (CAS) serves as third line of defence which gives assurance on Internal Controls effectiveness by carrying out independent internal audits. CAS is staffed adequately with qualified professionals 227 in both technical and financial fields. The department conducts audit of all units of L&T and its major S&A companies at regular intervals. Based on observations of CAS, respective process owners carry out necessary process/system improvements and thereby strengthen the overall control mechanism. The process of Internal Audit is reviewed by the Management and Audit Committee of the Board. V. INFORMATION TECHNOLOGY The Company views Information Technology (IT) as a key enabler for efficiency and providing competitive advantage. IT is accordingly managed through a robust governance process that covers value delivery, cost optimisation, technology management, support and education. The Information Technology systems in the Company form the backbone for carrying out all the business processes, for communication, collaboration and for providing information for effective decision making, monitoring and management control. The Information Systems at Company, implemented and refined over many years are maintained systematically to enhance capability with new features and also to remain current on technology with upgrades. These systems are geared towards improving productivity and efficiency of all our operations. Over the years, the newer systems help the Company to connect seamlessly with customers, provide better products and services and enable better execution of large projects. While ERPs are the backbone of our Business, Digitalization is identified as key driver to make the company globally competitive in future. The Company believes that the digital world will disrupt every aspect of business viz project monitoring, machines & material availability, labour & skills tracking, design work flows etc. A number of projects have been identified in almost all areas of business. A separate Big Data Analytics practice has been established with adequate resources. Data from machines and other systems is now getting accumulated in real time to facilitate analysis and decision making. Upgrade/update to IT infrastructure is being done at regular intervals to meet the growing demand of automation and digitisation. A complete scan of IT security policies, practices and technology is reviewed and a Security 'Centre of Excellence' has been commissioned with latest tools and technologies to monitor and meet the phenomenon of growing cybersecurity threats. 228 The Company actively scans the environment for talent with skill sets suited to the expanding and changing needs of the business though availability of such resources are limited. The leadership pipeline has been strengthened and proper processes are being put in place for hiring the Human resource challenges: Claims management: Company maintains a strong documentation and follow up with clients / sub- contractors/vendors for any claim that is submitted. Legal teams are consulted periodically to ensure a robust process of claims management. Working capital challenges: Project delays and adverse contractual payment terms lead to increased working capital requirements. Company has strengthened the process for close monitoring of cash flows at the project level. Company ensures regular follow up for delay in payments by client & has ensured improvement in the working capital levels. (1209) Dividend Paid (1843) (1647) (Increase) decrease in cash balance (127) Utilisation of Funds (9402) 687 (3118) The total borrowings as on March 31, 2017 stood at 10581 crore as compared to 13924 crore in the previous year. The loan portfolio of the Company comprises a mix of domestic and suitably hedged foreign currency loans. The gross debt equity ratio decreased to 0.23:1 as at March 31, 2017 from 0.33:1 as at March 31, 2016. The Company has nil net debt considering the cash & cash equivalent and short term investments in liquid funds from debt. III. RISK MANAGEMENT L&T has a comprehensive Enterprise Risk Management (ERM) framework in place for identification, assessment, treatment & reporting of risks. The Company's risk management processes ensure that the Company accepts risks as per the boundary conditions based on the risk appetite of the organisation. The Audit Committee of the Board oversees the efficacy of the risk management processes. Business level risks for each vertical are discussed in detail in the respective Top Management/ Board meetings. The Risk Management Committee is informed on the critical risks impacting the Company for their review and suggestions. Mitigation plans are drawn up and implemented as appropriate within the overall ERM framework of the Company. Interest paid The Company is predominantly in project business and has developed robust project risk management processes. The key processes of risk reviews include country clearance in case of venturing into a new country, pre-bid risk reviews, execution risk reviews and project close out risk reviews. Pre-bid reviews are carried out based on a bid authorization matrix as determined by the Risk The Company has been conferred the prestigious 'Golden Peacock Award for Risk Management' for 2016 by the Institute of Directors (loD). L&T also has been conferred the prestigious 'Best Capital Projects & Infrastructure Risk Management Award' at the India Risk Management Awards event organized by CNBC TV18. The Company emphasizes on continuous learning and has initiated several knowledge based initiatives to improve risk awareness across the organization including the launching of an e-learning training program on Enterprise Risk Management (ERM) for employees to disseminate knowledge and enhance capabilities on risk management which will lead to better business performance. Periodic training workshops on risk management are also held across the Company to spread awareness. Other initiatives include Risk Management Conclaves for Risk Officers and senior management with focus on risk management of large and mega projects, interaction with industry experts and knowledge sharing with risk management heads of global corporates. The top Enterprise level risks for the Company and the mitigation measures being implemented are: Geopolitical Risks: Unexpected Political changes in some of the Developed Countries, BREXIT, Trade barriers and increasing conflict in Middle East are some of the risks that the Company faces. The Company monitors the geopolitical risks & develops appropriate mitigation strategies from time to time. Slow recovery of key sectors: Growth in some of the sectors like Power, Nuclear, and Metals & Minerals etc. continued to be hampered by a number of constraints. Being a diversified conglomerate Diversification of the business portfolio smoothens the inherent cyclicality that individual sectors periodically face and mitigates volatility in revenue and margins at the company level. Fall in oil price: It has resulted in budget constraints in Middle Eastern Countries leading to decline/delay in investment with some projects being put on hold. The Company has started focusing on domestic business and selectively foraying into new markets like Bangladesh, Srilanka, Africa, CIS & South East Asia. 225 Competition: It has been observed that competition from foreign and domestic players has considerably increased in the past few years. Learnings from past execution of complex jobs, Joint Ventures and alliances with other global players to leverage each others strengths, and other operational excellence measures like value engineering, cost control, manpower rationalization and cost reduction through automation of process are some of the key mitigation measures that the Company takes to remain competitive in different businesses. Reputation and Brand: Corporate Governance and Compliance policy is in place mandating adherence to Code of conduct and Internal Controls. Regular knowledge sharing across the organisation and appropriate controls are implemented to mitigate reputational risk. Other Operational Risks: Execution challenges: Company faces execution challenges like geological setbacks, availability of work front, land acquisition & right of way (ROW), pending approvals and clearances from Government agencies, working in difficult/harsh weather conditions and terrain, manpower issues etc. The Company closely tracks the key risks for each project to effect timely mitigation. Partner risks: The Company partners with different contractors (Joint Venture / consortium projects) across businesses based on technical requirements/local market conditions. Partner's performance & financial strength is crucial for project success. Learnings from the past projects are incorporated in the inter-se agreement with the partners and clauses on liability of each partner is drafted after a legal due diligence. Management Committees. Execution risk reviews of the projects are held at regular intervals for tracking the project performance, movement of risks in the project and effectiveness of mitigation measures. Close out risk reviews are held to capture key learnings from the projects and what went right/wrong analysis which helps in factoring the learnings in future bids. 30000- 56308 20.0 2840 Others Segment Gross Revenue* 10862 4044 1932 2472 4112 836 2015-16 (IndAS) Shipbuilding 3644 702 2016-17 (IndAS) Industrial Machinery, Products & Others Realty MMH * Not to scale II. L&T STANDALONE PERFORMANCE REVIEW L&T's standalone financials capture the performance of Infrastructure segment, Power, Heavy Engineering, Electrical & Automation and Others segment comprising, Metallurgical and Material Handling business, a part of Realty business, Shipbuilding business and Construction & Mining Machinery business. L&T's performance during the year reinforces the capabilities of the Company to tackle the adverse market conditions and generate steady returns. L&T continues to target operating margin improvement by adopting value engineering and operational excellence initiatives, higher cash flow generation through working capital reduction and divestment of non-core assets. Order Inflow & Order Book Order inflow during 2016-17 stood at 93201 crore almost in line with previous year. Infrastructure segment 222 LARSEN & TOUBRO order inflow remained at the same levels as previous year and contributed 82.1% of the total order inflow during the year as compared to 84.3% in the previous year. Heavy Engineering reported strong order inflow led by select wins in defence sector. Sharp drop was seen in Power due to slowdown in the sectoral investment momentum and aggressive bidding by competitors for the few bids on offer, and in Others segment due to low industrial demand. International order inflow declined to 16.4% of the total order inflow for 2016-17 as compared to 23.4% in the previous year. Order Book as at March 31, 2017 stood at 224715 crore, 83.9% of which is contributed by Infrastructure segment. International orders constituted 19.9% of the current order book. L&T continues to carry healthy order book to revenue ratio at 3.39 providing visibility for achieving satisfactory growth in coming years. 9720 crore Revenue growth during the year was driven by MMH and Realty businesses. The operating margin was adversely impacted on write down of the inventories of commercial ships. MMH segment, which was reported as a separate segment last year, has now been merged under the Others segment. Accordingly figures are regrouped wherever necessary. The Gross Non-Performing Assets (GNPA) ratio increased marginally from 4.85% as at March 31, 2016 to 4.94% as at March 31, 2017. LTFH, however, has been strengthening its balance sheet throughout the year by making accelerated provisions in addition to those required under regulations. Consequently, the coverage on GNPA increased from 22.19% in the year ended March 31, 2016 to 42.82% in the year ended March 31, 2017 indicating a much stronger balance sheet. As a result of this, Net NPA ratio has reduced substantially from 3.82% to 2.89% over the same period. LTFH also witnessed strong growth in its Investment & Wealth Management businesses. Average Assets under 221 Management (AAUM) in Investment Management business increased to 39300 crore in the last quarter of the year ended March 31, 2017 - a growth of 51%. Average Assets under Service (AAUS) in Wealth Management business increased to 13623 crore in last quarter of the year ended March 31, 2017 – a growth of 46%. 8. Developmental Projects (DP) The Group has acquired concessions through competitive bidding process for the development of Power projects, Roads, Bridges, Hyderabad Metro Rail and Power Transmission Lines. Total portfolio of the group consists of 5 power projects, 15 roads & bridges projects, 1 transmission line project, 1 port & 1 metro rail project. The metro rail project is developed by L&T Metro Rail (Hyderabad) Limited (L&T MRHL) which is now a 100% subsidiary of L&T. Power projects are developed by L&T Power Development Limited & other projects are developed by L&T Infrastructure Development Projects Limited. The total estimated cost of projects pegged at *52609 crore as on March 31, 2017, involving equity commitment of ₹11106 crore of which equity infusion of *8757 crore has been completed as at March 31, 2017. In addition, the company is in the process of divesting its ownership in a container port in Kattupalli, Tamil Nadu to a strategic investor and has demerged the port business into a separate company in 2016-17 to facilitate the divestment. The segment recorded revenue of 4367 crore for the year ended March 31, 2017 lower compared to 4620 crore in the previous year due to lower construction revenue in Hyderabad Metro project partly compensated by higher revenue from Rajpura power plant. The segment clocked operating profit at 90.8 crore for the year 2016-17 declining by 69.4 % y-o-y due to non-accrual of revenues on disputed receivables in Rajpura power plant. DP Segment Gross Revenue & EBITDA 4620 4367 Revenue from Operations crore 4000 3000 2000 1000- 297 91 0 2015-16 (IndAS) 2016-17 (IndAS) Gross Revenue ― EBITDA The Funds employed increased by 15.2% y-o-y at 19309 crore as at March 31, 2017 driven mainly by capex outlay for Hyderabad Metro Rail project. 9. "Others" Segment Others Segment covers Metallurgical and Material Handling (MMH), Realty, Shipbuilding, Construction Equipment & Others, Machinery & Industrial products businesses. 5000- L&T achieved a moderate revenue growth of 3.9% at *66301 crore as compared to 63813 crore in the previous year. Infrastructure segment was particularly affected in a backdrop of tight liquidity consequent to currency demonetization event in India. Revenue was also impacted due to delay in customer clearances, availability of workfront, right of way issues and generally delayed milestone payments. Power and Heavy Engineering segment saw a revenue growth of 8.0% and 13.5% respectively led by pick up in project execution. Electrical & Automation business and Others business segment grew merely by 2.3% and 3.5% respectively due to continuing low industrial demand. crore 80000¬ Depreciation & Amortization charge Depreciation and amortization charge for the year 2016-17 increased by 21.8% at 1215 crore as compared to 997 crore in the previous year. The increase is mainly attributable to international operations of Infrastructure segment. Other Income Other income for the year 2016-17 amounted to 1972 crore as against 2341 crore for the previous year. The decline is mainly on lower dividend from group companies. However, the same is partly offset by higher treasury income aided by better investment positioning along with deployment of additional funds generated by listing of two subsidiaries on stock exchanges. 223 Other Income consists of dividend from group companies 405 crore (PY ₹ 1008 crore) and treasury income 1047 crore (PY 502 crore). Finance cost The interest expenses for the year at 1318 crore were lower by 10.8% vis-à-vis ₹ 1477 crore for the previous year. The decrease in the interest expense is attributable to repayment of borrowings along with lower borrowing rates. The average borrowing cost for the year 2016-17 was lower by 80 basis points at 8.3% p.a. Exceptional Items Exceptional items of 894 crore in the Statement of Profit & Loss for the current year mainly includes gain on part stake-sale in L&T Infotech and L&T Technology Services pursuant to the IPO of these companies partly offset by loss on stake sale in L&T General Insurance. The operating profit margin for the year at 9.7% improved by 56 bps y-o-y. Consequently, Profit before depreciation, interest and tax (PBDIT) stood at 6425 crore for the year, higher by 10.2% over the previous year. The Company has provided for impairment in its investment in L&T Infrastructure Development Projects Limited that holds portfolio of non power concessions. Profit after Tax & EPS Profit After Tax Funds Employed and Returns Funds Employed by the Company at 56308 crore as at March 31, 2017 increased by 404 crore during the year. The Company incurred 635 crore (net) towards capital expenditure during the year, largely on procurement of plant and equipment. At the segment aggregate level, net working capital as on March 31, 2017 at 14014 crore decreased to 21.14% of revenue as compared to 15286 crore at 23.95% of revenue as on March 31, 2016. Release in working capital is attributable to improved collections and better credit terms negotiated with vendors. During the year, investments in and loans to subsidiary and associate companies decreased by 1306 crore (net of proceeds from divestment). Major reduction was seen in L&T Shipbuilding - port business, General Insurance and Hydrocarbon business. However, additional funding was done in Hyderabad Metro and Nabha Power. crore 60000 Funds Employed and Returns 55904 50000- 40000 Percentage Profit after Tax (PAT), including exceptional items, for the year 2016-17 grew by 9.1% to 5454 crore as compared to 5000 crore in the previous year, contributed by increase in operating profit, higher treasury income and lower interest expenses. The Earnings per Share (EPS) for the year 2016-17 at ₹ 58.49 grew by 8.9% over the previous year. Financial Services segment comprises of Rural, Wholesale and Housing Finance as well as Investment and Wealth Management businesses housed within L&T Finance Holdings Limited (LTFH) and its subsidiaries. The segment also included general insurance business which was divested during the year ended March 31, 2017. Excluding the general insurance business, Segment revenue grew 13.1% y-o-y at 8377 crore during the year ended March 31, 2017 on a comparable basis aided by good momentum in all its businesses. Sales and administration expenses for the year at *2740 crore declined by 3.5% y-o-y due to lower provision for doubtful debts & advances and reduction in exchange losses. [Figures in brackets relate to previous year] Gross Revenue from Operation 63813 3.9% 14563 55000 13695 30000- 50118 51738 5000+ 2015-16 (IndAS) Domestic 2016-17 (IndAS) International The Staff expenses for the year at ₹ 5146 crore increased by 3.5% y-o-y due to annual pay revisions, manpower additions in international operations. The Company's manpower strength stood at 41080 as compared to 42780 as at March 31, 2016. Operating Cost and PBDIT expenses amounted to 51990 crore registering an increase of 3.6%. These costs represent 78.4% of Revenue, a decline of 21 basis points over the previous year. Reduction in MCO cost percentage to revenue is mainly driven by change in the stage and mix of projects under execution. Operating Expenses and Profitability 2016-17 78.4% (78.6%) 9.7% (9.1%) 4.1% 7.8% (4.5%) (7.8%) Mfg. Construction & Operating Expenses Staff Expenses ☐ Sales, Administration & Other Expenses Operating Profit (PBDIT) Manufacturing, Construction and Operating (MCO) expenses comprising cost of construction material, manufacturing materials, components and subcontracting The Funds employed by the segment at 16108 crore as at March 31, 2017 reduced by 2.07% vis-à-vis LARSEN & TOUBRO Dispute regarding question of law, non-submission of forms, classification dispute, tax deducted at source at lower rate, sales in transit, high seas sales, labour turnover, local VAT, rate of tax on declared goods and other matters. 13 1599.97 1494.43 255.84 Loans 14 1919.41 2432.26 Other bank balances 1381.61 15 2054.63 1880.49 1428.09 34678.32 31654.08 28138.37 Other current assets Other financial assets Group(s) of assets classified as held for sale TOTAL ASSETS 2764.78 2202.26 Inventories 9 1762.86 1955.11 2260.77 Financial assets Investments 10 2075.83 6982.08 5518.05 Trade receivables 11 19919.97 18967.75 16790.00 Cash and cash equivalents 12 4803.32 42 425 16 Financial liabilities Borrowings Current maturities of long term borrowings Trade payables Other financial liabilities Other current liabilities Provisions Current tax liabilities (net) Current liabilities Liabilities associated with the group(s) of assets TOTAL EQUITY AND LIABILITIES CONTINGENT LIABILITIES COMMITMENTS (capital and others) NOTES FORMING PART OF THE FINANCIAL STATEMENTS In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm's Registration No. 117366W/W-100018 classified as held for sale Other non-current liabilities Provisions Other financial liabilities 33263.70 33481.95 28454.83 388.00 141.79 102196.82 99620.95 89345.78 236 Balance Sheet as at March 31, 2017 (contd.) EQUITY AND LIABILITIES: Equity Equity share capital Other equity Total equity Liabilities Non-current liabilities Financial liabilities Borrowings Current assets by the hand of 1450.22 2222.67 Chartered Accountants (Firm Registration No. 109982W) FIRDOSH D. BUCHIA (Partner) (Membership No. 38332) 235 Balance Sheet as at March 31, 2017 Note For SHARP & TANNAN As at 31-3-2017 crore crore * crore * crore As at 1-4-2015 crore crore ASSETS: Non-current assets As at 31-3-2016 Property, plant and equipment MUMBAI, May 29, 2017 (Partner) ITAT 2003-04, 2006-07 to 2011-12 1616.42 491.16 LARSEN & TOUBRO (viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to financial institutions and banks and dues to debenture holders. The Company has not borrowed any funds from the government. (ix) In our opinion and according to the information and explanations given to us, the Company has not raised any money by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under paragraph 3 (ix) of the Order is not applicable to the Company. (x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company by its officers or employees has been noticed or reported during the year. (Membership No. 70928) (xi) In our opinion and according to the information and explanations given to us, the Company has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the (xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company and hence reporting under paragraph 3 (xii) of the Order is not applicable to the Company. (xiii) In our opinion and according to the information and explanations given to us, the Company is in compliance with Section 177 and 188 of the Act, where applicable, for all transactions with the related parties and the details of related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards. (xiv) According to the information and explanations given to us, during the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under paragraph 3 (xiv) of the Order is not applicable to the Company. (xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or persons connected with him and hence provisions of section 192 of the Act are not applicable to the Company. (xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm Registration No. 117366W/W-100018) P. R. RAMESH Act. Capital work-in-progress Investment property Other intangible assets 19187.86 17446.14 1770.54 7 500.33 2797.52 474.09 3002.86 346.46 19776.81 22047.68 20795.46 Deferred tax assets/(liabilities) [net] 49(e) 285.22 156.14 (95.97) Other non-current assets 8 22459.47 189.50 158.91 201.25 Intangible assets under development Financial assets Investments Loans Other financial assets 223 44 569 6522.85 7129.89 7068.96 302.53 253.22 385.73 396.70 446.90 471.18 125.04 138.58 84.94 1786.70 Demands arising out of Regular Assessment/ Reassessment P. R. RAMESH Membership No. 70928 7370.57 7397.55 Excise duty Construction materials consumed 577.49 635.39 18493.31 18804.70 Cost of raw materials components consumed Purchase of stock-in-trade 1129.45 Stores, spares and tools consumed 1446.67 1349.23 Sub-contracting charges 16770.61 15567.87 Changes in inventories of finished goods, work-in-progress and stock-in-trade and property development 1390.84 Other manufacturing, construction and operating expenses 33 66153.69 Revenue from operations Other income Total income EXPENSES: 2016-17 2015-16 Note crore Manufacturing, construction and operating expenses crore crore 31 66301.35 63812.65 32 1971.85 2341.04 68273.20 crore 131.59 76.57 5808.52 Total expenses 62409.33 60458.35 Exceptional items Profit before exceptional items and tax 46 5863.87 5695.34 5.53 46 560.28 Profit before tax 6757.84 6255.62 Carried forward 6757.84 6255.62 238 893.97 1.51 Less: Overheads capitalised 60463.88 5208.33 51989.60 50169.09 Employee benefits expense 34 5146.47 4974.80 Sales, administration and other expenses 35 2741.55 2845.77 Finance costs 36 1318.03 1476.82 Depreciation, amortisation, impairment and obsolescence 1215.19 997.40 62410.84 INCOME: Partner Statement of Profit and Loss for the year ended March 31, 2017 SANJEEV AGA (DIN 00022065) 46012.74 42135.31 38552.53 10 19 20 7134.28 88.57 8312.47 72.45 185.91 38366.62 8430.81 102.00 21 22 7222.85 470.68 3.86 8384.92 371.50 5.83 8532.81 346.10 0.81 42 3222 2334.84 22 4175.98 186.30 41949.01 18 For SHARP & TANNAN Chartered Accountants Firm's Registration No. 109982W by the hand of FIRDOSH D. BUCHIA Partner Membership No. 038332 Mumbai, May 29, 2017 45826.15 LARSEN & TOUBRO As at 31-3-2017 crore crore As at 31-3-2016 crore crore As at 1-4-2015 crore crore 17 Taxability of sub-contractor turnover, rate of tax for declared goods, inter-state sales and non-submission of forms Note 24 1111.59 1436.03 75.83 37.22 102196.82 99620.95 89345.78 29 30 1 to 60 N. HARIHARAN Company Secretary M. No. A3471 801.42 R. SHANKAR RAMAN Chief Financial Officer & Whole-time Director (DIN 00019798) A. M. NAIK Group Executive Chairman (DIN 00001514) M. DAMODARAN (DIN 02106990) SUNITA SHARMA (DIN 02949529) M. M. CHITALE (DIN 00101004) SUSHOBHAN SARKER (DIN 00088276) VIKRAM SINGH MEHTA (DIN 00041197) Directors SUBODH BHARGAVA (DIN 00035672) 26.53 897.29 24213.08 16785.98 25 24031.83 22215.92 26 1572.65 1319.68 29050.91 282 42 27 28 18297.72 1092.15 45.91 3998.58 647.93 18376.00 1190.57 29147.61 18651.96 237 12.49 186.59 0.33 Net block as at March 31, 2017 Gross block as at March 31, 2017 1.27 Freehold 3 Land Leasehold / freehold Total no. of Type of asset crore (c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed / transfer deed / conveyance deed provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings (including land whose title deed have been pledged as security against debentures issued by the Company), are held in the name of the Company as at the balance sheet date, except the following: (b) The Company has a program of verification of its fixed assets to cover all the items in a phased manner over a period of 3 years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its fixed assets. Pursuant to the program, certain fixed assets were physically verified by the Management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification. (i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (Referred to in paragraph 2 under 'Report on Other Legal and Regulatory Requirements' section of our report of even date) ANNEXURE "B" TO THE INDEPENDENT AUDITORS' REPORT MUMBAI, May 29, 2017 FIRDOSH D. BUCHIA (Partner) (Membership No. 38332) (Firm Registration No. 109982W) Chartered Accountants For SHARP & TANNAN (Membership No. 70928) (Partner) P. R. RAMESH (Firm Registration No. 117366W/W-100018) Remarks Chartered Accountants 1.27 2 Nature of Dues Name of Statute (c) Details of dues of Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, and Value Added Tax which have not been deposited as on March 31, 2017 on account of disputes are given below: (b) There were no undisputed amounts payable in respect of Provident Fund, Employees' State Insurance, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues in arrears as at March 31, 2017 for a period of more than six months from the date they became payable. (a) The Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Employees' State Insurance, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues applicable to it to the appropriate authorities. (vii) According to the information and explanations given to us, in respect of statutory dues: (vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Act. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended and prescribed by the Central Government under sub-section (1) of Section 148 of the Act, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete. (v) According to the information and explanations given to us, the Company has not accepted any deposit during the year and hence reporting under paragraph 3 (v) of the Order is not applicable to the Company. (iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Act in respect of grant of loans, making investments and providing guarantees and securities, as applicable. LARSEN & TOUBRO 232 (c) There is no overdue amount remaining outstanding as at the balance sheet date. (b) The schedule of repayment of principal and payment of interest has been stipulated and repayments or receipts of principal amounts and interest have been regular as per stipulations. (a) The terms and conditions of the grant of such loans are, in our opinion, prima facie, not prejudicial to the Company's interest. (iii) According to the information and explanations given to us, the Company has granted loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Act, in respect of which: (ii) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals and no material discrepancies were noticed on physical verification between the physical stock and the book records. In respect of immovable properties of land and buildings that have been taken on lease and disclosed as fixed asset in the financial statements, the lease agreements are in the name of the Company, where the Company is the lessee in the agreement. to be executed. Conveyance deed pending 0.94 Conveyance deed pending to be executed. 3.54 Freehold Buildings Central Sales For DELOITTE HASKINS & SELLS LLP reporting insofar as it relates to a joint operation which is a Company incorporated in India, is based on the corresponding report of the other auditor of such Company incorporated in India. P. R. RAMESH (Firm Registration No. 117366W/W-100018) Chartered Accountants For DELOITTE HASKINS & SELLS LLP As required by the Companies (Auditor's Report) Order, 2016 ("the Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in "Annexure B" a statement on the matters specified in paragraphs 3 and 4 of the Order. To the best of our information and according to the information and explanations given to us and having regard to the nature of business and size of its operations and cash payments made by the Company in the ordinary course of business and based on the Company's practices for recording such transactions, the Company has provided the requisite disclosures in its financial statements as to holdings as well as dealings in Specified Bank Notes as defined in the Notification S.O. 3407(E) dated the 8th November, 2016 of the Ministry of Finance, during the period from November 8, 2016 to December 30, 2016. Based on audit procedures performed and the representations provided to us by the management, we report that the disclosures are in accordance with the relevant books of account maintained by the Company and as produced before us and other auditor by the management. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company; and The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements; The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts; iv. iii. ii. i. With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us: With respect to the adequacy of the internal financial controls over financial reporting of the Company and joint operation which is a Company incorporated in India and the operating effectiveness of such controls, refer to our separate Report in "Annexure A". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company's and it's joint operation's internal financial controls over financial reporting; and On the basis of the written representations received from the directors as on March 31, 2017 taken on record by the Board of Directors and the report of the statutory auditor of its joint operation company incorporated in India, none of the directors is disqualified as on March 31, 2017 from being appointed as a director in terms of Section 164(2) of the Act; In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act read with relevant rules issued thereunder; The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Cash Flows and Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account; In our opinion, proper books of account as required by law have been kept by the Company and its joint operation so far as it appears from our examination of those books and the reports of the other auditors; g) f) e) c) b) (Partner) Our opinion is not modified in respect of this matter. (Membership No. 70928) For SHARP & TANNAN Chartered Accountants Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial Other Matters 231 In our opinion, to the best of our information and according to the explanations given to us and based on the consideration of the report of the other auditor on internal financial controls system over financial reporting of the joint operation referred to in the Other Matters section of our report of even date, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting criteria established by the respective Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion Inherent Limitations of Internal Financial Controls Over Financial Reporting A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Meaning of Internal Financial Controls Over Financial Reporting We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditor of the joint operation which is a Company incorporated in India, in terms of their report referred to in the Other Matters section of our report of even date, is sufficient and appropriate to provide a basis for our audit opinion on the Company's internal financial controls system over financial reporting. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. The Board of Directors of the Company and those charged with governance of its joint operation which is a Company incorporated in India are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to respective company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013. Auditor's Responsibility Management's Responsibility for Internal Financial Controls We have audited the internal financial controls over financial reporting of Larsen & Toubro Limited (the "Company") as of March 31, 2017 in conjunction with our audit of the standalone Ind AS financial statements of the Company as at end for the year ended on that date which includes internal financial controls over financial reporting of the Company's joint operation which is a Company incorporated in India. Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act") (Referred to in paragraph 1 (f) under 'Report on Other Legal and Regulatory Requirements' section of our report of even date) ANNEXURE "A" TO THE INDEPENDENT AUDITORS' REPORT LARSEN & TOUBRO 230 (Membership No. 38332) (Partner) FIRDOSH D. BUCHIA (Firm Registration No. 109982W) MUMBAI, May 29, 2017 a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit; Tax Act, Local 2015-16 to 2016-17 40.82 Sales Tax Acts and Works Contract Tax Act 0.33 Additional 2011-12 to 2012-13 2.59 2.58 Commissioner 233 234 Name of Statute Nature of Dues Forum where Period to which Amount Amount Amount Dispute is Relates Involved Unpaid (crore) (*crore) 27.18 43.44 4.02 2000-01, 2003-04 to 2012- 13, 2014-15 to 2015-16 2008-09, 2012-13 360.28 Non-submission of forms, classification disputes, disallowance of sales occasioning import, arbitrary demand raised, sub-contractors turnover disallowed, pumping and freight charges, inter-state sales turnover, tax deducted at source disallowed, rates of tax of declared goods, classification dispute, disallowance of Entry tax and other matters. Dispute regarding question of law, non-submission of forms, classification dispute, disallowance of setoff, valuation of goods, sales in transit and high seas sales, and other matters. Non Submission of Forms and other matters. Forum where Dispute is Pending Period to which Amount Relates Amount Amount Involved Unpaid (* crore) (*crore) Supreme Court 2000-01 to 2006-07 12.13 3.14 High Court 1986-87 to 1987-88, 74.62 65.49 1993-94, 1994-95, 1998- 99 to 2002-03, 2005-06, 2006-07 to 2012-13 Sales Tax/ VAT Tribunal 1989-90 to 2013-14 417.09 Commissioner (Appeal) Commissioner 12.49 2006-07, 2009-10, 2011-12 to 2015-16 02 to 2007-08, 2009-10 to 2012-13 High Court 2005-06 to 2007-08, 42.48 40.74 2009-10 to 2012-13 CESTAT 1991-92, 2001-02 to 2011-12 1025.48 1001.52 Commissioner (Appeal) 2006-07 to 2012-13, 2015-16 13.87 13.57 Commissioner 2005-06 to 2013-14 78.69 77.58 Tribunal 2006-07 to 2009-10, 2011-12 to 2012-13 78.97 78.12 Directorate General of Foreign Trade Officer Commissioner Commercial Tax 7.97 Assistant / 1998-99, 2000-01 to 2014-15 1219.32 1128.36 Dispute regarding question of law, non-submission of forms, sales in transit, local VAT and other matters. Non-submission of forms, additional demands for pending forms, rate of tax dispute, disallowance of branch transfer, sub-contractors turnover, considering supply agreement as Works Contract Tax, disallowance of sales in transit, stock transfer and other matters. Sales in transit, local VAT and other matters. Pending Joint Deputy/Joint Commissioner - Appeals The Central Excise Act, 1944, Service Tax under Finance Act, 1994 and Customs Act, 1962 Income-tax Act, 1961 Export rebate claim, service tax on commercial construction services, service tax liability against rate change and penalty imposed for wrong availment of CENVAT credit. Demand of excise duty on Fabrication of Cable tray supports/ ED exemption/ Export rebate disallowance / Service Tax on Business Auxiliary Services/ Valuation Dispute pertaining to Excise Duty on Supply of Bolts & nuts/ GTA services, site jobs, export rebate disallowance, MRP valuation disputes, CENVAT credit availed, non-maintenance of separate records, and other matters. Disallowance of CENVAT credit, excise duty refund, excise duty on site jobs, short payment of service tax, service tax rate dispute, valuation dispute and other matters. Disallowance of CENVAT credit, short payment of service tax, service tax rate dispute, valuation dispute and other matters. Disallowance of CENVAT credit, short payment of service tax and other matters. Non fulfilment of Export Obligations under Export promotion scheme Assessing/ 1996-97 to 1998-99, 2001- 7.13 As required by Section 143(3) of the Act, based on our audit and on the consideration of the reports of the other auditor on the separate financial statements / information of the joint operation, referred to in the Other Matters paragraph above we report, to the extent applicable that: cases 1. Management's Responsibility for the Standalone Ind AS Financial Statements We have audited the accompanying standalone Ind AS financial statements of Larsen & Toubro Limited (the "Company"), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information, which includes 25 Joint Operations (herein after referred to as "standalone Ind AS financial statements"). Report on the Standalone Ind AS Financial Statements TO THE MEMBERS OF LARSEN & TOUBRO LIMITED INDEPENDENT AUDITORS' REPORT 194, Churchgate Reclamation Dinshaw Vachha Road Mumbai 400 020. SHARP & TANNAN Chartered Accountants The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (the "Act") with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company including its joint operation in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards ("Ind AS") prescribed under section 133 of the Act. The Boards of Directors of the Company and those charged with governance of its joint operation are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and its joint operation and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. LARSEN & TOUBRO Elphinstone Road (West) - 27th 32nd Floor, Senapati Bapat Marg Indiabulls Finance Centre, Tower 3 Chartered Accountants DELOITTE HASKINS & SELLS LLP 2. Mumbai 400013. Auditor's Responsibility Ravindra Annexe In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. Report on Other Legal and Regulatory Requirements Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit. Our opinion on the standalone Ind AS financial statements, and our report on Other Legal and Regulatory Requirements below, is not modified in respect of these matters with respect to our reliance on the work done and the reports of the other auditors and the financial information certified by the Management. The comparative financial information for the year ended March 31, 2016 in respect of 16 joint operations included in this standalone Ind AS financial statements prepared in accordance with the Ind AS have not been audited by their auditors and have been furnished to us by the Management. The comparative financial information for the year ended March 31, 2016 in respect of 4 joint operations included in this standalone Ind AS financial statements prepared in accordance with the Ind AS have been audited by the other auditors. The comparative financial information of the Company for the transition date opening balance sheet as at 1st April 2015 included in these standalone Ind AS financial statements, are based on the statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by one of the joint auditors whose report for the year ended March 31, 2015 dated May 30, 2015 expressed an unmodified opinion on those standalone financial statements, and have been restated to comply with Ind AS. Adjustments made to the previously issued said financial information prepared in accordance with the Companies (Accounting Standards) Rules, 2006 to comply with Ind AS have been audited by us. b) 229 operations located outside India from accounting principles generally accepted in their respective countries to accounting principles generally accepted in India. We have audited these conversion adjustments made by the Company's management. Our audit report in so far as it relates to the balances and affairs of such joint operations located outside India is based on the reports of other auditors and the conversion adjustments prepared by the management of the Company and audited by us. We did not audit the financial statements / information of 16 joint operations included in the standalone Ind AS financial statements of the Company whose financial statements reflect total assets of 3,647.41 crore as at March 31, 2017, total revenues of 4,360.69 crore, total profit after tax (net) of 268.96 crore and total comprehensive income (net) of 269.03 crore for the year ended on that date, as considered in the standalone Ind AS financial statements. The financial statements of these joint operations have been audited by the other auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these joint operations and our report in terms of subsection (3) of Section 143 of the Act, in so far as it relates to aforesaid joint operations, is based solely on the reports of such other auditors. a) Other Matters In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of reports of the other auditors on separate financial statements of joint operations referred to in the Other Matters paragraph below, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2017, and its profit, total comprehensive income, cash flows and the changes in equity for the year ended on that date. Opinion An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements. We believe that the audit evidence obtained by us and other auditors in terms of their reports referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements. We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement. Out of above, there are 7 joint operations which are located outside India whose financial results have been prepared in accordance with accounting principles generally accepted in their respective countries and which have been audited by other auditors under generally accepted auditing standards applicable in their respective countries. The Company's management has converted the financial statements of such joint 2015-16 Repayment of non-current borrowings crore crore C. Cash flow from financing activities: Proceeds from fresh issue of share capital Proceeds from non-current borrowings (Repayments)/proceeds from other borrowings (net) Additional tax on dividend 53.32 378.26 (1643.23) 70.19 1589.29 (1420.79) (1845.06) 152.59 (1701.51) (1512.33) 2016-17 Dividends paid Statement of Cash Flows for the year ended March 31, 2017 (contd.) Interest received (1522.25) (141.20) 5.25 1070.15 830.53 446.58 Dividend received from subsidiaries 405.47 241 994.16 659.63 127.19 Consideration received on transfer of Foundry Business Unit 83.65 79.70 Net cash (used in)/from investing activities [non-cash transaction: Note (51(c)#), (51(c)##)] 31.13 Dividend received from other investments (134.69) 3. Cash and cash equivalents included in the Statement of cash flows comprise the following: (1152.54) Total cash and cash equivalents as per Balance Sheet Add: (i) Unrealised exchange (gain)/loss on cash and cash equivalents Less: (ii) Other bank balances disclosed under current assets [Note 13] Less: (iii) Cash and cash equivalents disclosed under non-current assets [Note 7] Total cash and cash equivalents as per Statement of Cash Flows 4. Previous year's figures have been regrouped/reclassified wherever applicable. F. E. D. the company has ability to use or sell the intangible asset; (c) Cash and cash equivalents disclosed under non-current assets [Note 7] C. B. 246 A. the technical feasibility of completing the intangible asset so that it will be available for use or sale; (ii) Development expenditure on new products is capitalised as intangible asset, if all of the following can be demonstrated: Expenditure on research is expensed under respective heads of account in the period in which it is incurred. Research and development expenditure on new products: Intangible assets are recognised when it is probable that the future economic benefits that are attributable to the asset will flow to the enterprise and the cost of the asset can be measured reliably. Intangible assets are stated at original cost net of tax/duty credits availed, if any, less accumulated amortisation and cumulative impairment. Administrative and other general overhead expenses that are specifically attributable to acquisition of intangible assets are allocated and capitalised as a part of the cost of the intangible assets. the company has intention to complete the intangible asset and use or sell it; Interest paid (including cash flows from interest rate swaps) (b) Other bank balances disclosed under current assets [Note 13] Advance towards equity commitment refund (1208.59) Net cash (used in)/from financing activities (6051.96) (2464.33) Net (decrease)/increase in cash and cash equivalents (A + B + C) 126.54 (686.72) (a) Cash and cash equivalents disclosed under current assets [Note 12] Cash and cash equivalents at beginning of the year 2764.78 Cash and cash equivalents at end of the year 2204.60 2078.06 Notes: 1. Statement of cash flows has been prepared under the indirect method as set out in the Ind AS 7 "Statement of Cash Flows" as specified in the Companies (Indian Accounting Standards) Rules, 2015. 2. Purchase of fixed assets represents additions to property, plant and equipment, investment property and other intangible assets adjusted for movement of (a) capital-work-in-progress for property, plant and equipment and investment property and (b) intangible assets under development during the year. 2078.06 (5.25) 305.65 5985.83 9790.42 B. Cash flow from investing activities: Purchase of fixed assets Sale of fixed assets (including advance received) Investment in subsidiaries, associates and joint ventures Divestment of stake in subsidiaries, associates and joint ventures Sale of non-current investments (Purchase)/sale of current investments (net) Net cash (used in)/from operating activities Change in other bank balance and cash not available for immediate use 2016-17 2015-16 crore crore 5863.87 5695.34 (1065.10) Deposits/loans (given) - subsidiaries, associates, joint ventures and third parties Direct taxes refund/(paid) [net] Cash (used in)/generated from operations Increase/(decrease) in trade payables and customer advances LARSEN & TOUBRO Statement of Cash Flows for the year ended March 31, 2017 A. Cash flow from operating activities: Profit before tax (excluding exceptional items) Adjustments for: Dividend received Depreciation, amortisation, impairment and obsolescence (net) Exchange difference on items grouped under financing/investing activities Effect of exchange rate changes on cash and cash equivalents Interest expense Interest income Profit on sale of fixed assets (net) Profit on sale of investments (net) [including fair valuation] Employee stock option-discount forming part of employee benefits expense Operating profit before working capital changes Adjustments for: (Increase)/decrease in trade and other receivables (Increase)/decrease in inventories (1121.35) (6.35) 1215.19 0.11 4916.09 (1616.23) 3299.86 (749.02) 114.35 (3375.61) 3348.24 (1087.23) 290.00 (2545.89) 2289.55 (i) Intangible assets 106.65 (2304.55) (230.92) (1261.18) (1085.78) (12498.99) Deposits/loans repaid - subsidiaries, associates, joint ventures and third parties Advance towards equity commitment (addition) 2336.24 681.89 (7781.31) 6147.37 7666.66 (1519.29) 997.40 59.47 2.00 1318.03 (539.31) 1476.82 (530.72) (23.70) (82.51) 72.44 (150.87) 61.77 60.34 6835.90 6405.92 (1343.12) 192.26 1981.62 (67.40) An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss arising on derecognision of property is recognised in the Statement of Profit and Loss in the same period. An item of income or expense which by its size, type or incidence requires disclosure in order to improve an understanding of the performance of the company is treated as an exceptional item and the same is disclosed in the notes to accounts. For transition to Ind AS, the company has elected to adopt as deemed cost, the carrying value of investment property as per I-GAAP less accumulated depreciation and cumulative impairment as on the transition date of April 1, 2015. In respect of revalued assets, the value as determined by valuers as reduced by accumulated depreciation and cumulative impairment, is taken as cost on transition date. measurements are observable and the significance of the inputs to the fair value measurement in its entirety: Fair value measurements under Ind AS are categorised as below based on the degree to which the inputs to the fair value The Company maintains accounts on accrual basis following the historical cost convention, except for certain financial instruments that are measured at fair value in accordance with Ind AS and certain items of property, plant and equipment that were revalued in earlier years in accordance with the I-GAAP principles. The carrying value of all the items of property, plant and equipment and investment property as on date of transition is considered as the deemed cost. (b) Basis of accounting The company's financial statements have been prepared in accordance with the provisions of the Companies Act, 2013 and the Indian Accounting Standards ("Ind AS") notified under the Companies (Indian Accounting Standards) Rules, 2015 issued by Ministry of Corporate Affairs in respect of sections 133 read with sub-section (1) of Section 210A of the Companies Act, 1956 (1 of 1956). In addition, the guidance notes/announcements issued by the Institute of Chartered Accountants of India (ICAI) are also applied except where compliance with other statutory promulgations require a different treatment. The financials for the year ended March 31, 2017 of the company are the first financial statements prepared in compliance with Ind AS. The date of transition to Ind AS is April 1, 2015. The financial statements upto the year ended March 31, 2016, were prepared in accordance with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 ( "I-GAAP") and other relevant provisions of the Act. The figures for the year ended March 31, 2016 have now been restated as per Ind AS to provide comparability. These financials statements have been approved for issue by the Board of Directors at their meeting held on May 29, 2017. (a) Statement of compliance Significant Accounting Policies • NOTE [1] LARSEN & TOUBRO Directors 242 VIKRAM SINGH MEHTA (DIN 00041197) N. HARIHARAN Company Secretary M. No. A3471 Mumbai, May 29, 2017 Membership No. 038332 Notes forming part of the Financial Statements Partner • Level 2 inputs are inputs, other than quoted prices included in level 1, that are observable for the asset or liability, either directly or indirectly; and Notes forming part of the Financial Statements (contd.) 243 1. significant risks and rewards of ownership of the goods are transferred to the buyer; Revenue from the sale of manufactured and traded goods is recognised when the goods are delivered and titles have been passed, provided all the following conditions are satisfied: Sale of goods A. Revenue includes excise duty and adjustments made towards liquidated damages and price variation wherever applicable. Escalation and other claims, which are not ascertainable/acknowledged by customers are not taken into account. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the company can access at measurement date; (i) Revenue from operations (e) Revenue recognition Operating cycle for the business activities of the company covers the duration of the specific project/contract/product line/service including the defect liability period wherever applicable and extends up to the realisation of receivables (including retention monies) within the agreed credit period normally applicable to the respective lines of business. (d) Operating cycle for current and non-current classification Amounts in the financial statements are presented in Indian Rupees in crore [1 crore = 10 million] rounded off to two decimal places as permitted by Schedule III to the Companies Act, 2013. Per share data are presented in Indian Rupees to two decimals places. The Balance Sheet and the Statement of Profit and Loss are prepared and presented in the format prescribed in the Schedule III to the Companies Act, 2013 ("the Act"). The statement of cash flows has been prepared and presented as per the requirements of Ind AS 7 "Statement of Cash flows". The disclosure requirements with respect to items in the Balance Sheet and Statement of Profit and Loss, as prescribed in the Schedule III to the Act, are presented by way of notes forming part of the financial statements along with the other notes required to be disclosed under the notified Accounting Standards and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. (c) Presentation of financial statements • Level 3 inputs are unobservable inputs for the valuation of assets/liabilities Revenue is recognised based on nature of activity when consideration can be reasonably measured and recovered with reasonable certainty. Revenue is measured at the fair value of the consideration received or receivable and is reduced for estimated customer returns, rebates and other similar allowances. FIRDOSH D. BUCHIA by the hand of Firm's Registration No. 109982W 98.18 223.56 1494.43 1599.97 crore 2075.83 crore 2202.26 2015-16 4025.79 2016-17 Partner P. R. RAMESH by the hand of Firm's Registration No. 117366W/W-100018 Chartered Accountants For DELOITTE HASKINS & SELLS LLP In terms of our report attached Membership No. 70928 3668.44 2.34 1599.97 Chartered Accountants SANJEEV AGA (DIN 00022065) For SHARP & TANNAN SANJEEV AGA (DIN 00022065) SUSHOBHAN SARKER (DIN 00088276) (DIN 00101004) M. M. CHITALE SUNITA SHARMA (DIN 02949529) M. DAMODARAN (DIN 02106990) A. M. NAIK Group Executive Chairman (DIN 00001514) SUBODH BHARGAVA (DIN 00035672) R. SHANKAR RAMAN Chief Financial Officer & Whole-time Director (DIN 00019798) 2078.06 2204.60 98.18 223.56 2.23 1494.43 NOTE [1] Significant Accounting Policies (contd.) 2. the company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the good sold; 244 A. Interest income is accrued on a time basis by reference to the principal outstanding and the effective interest rate. Dividend income is accounted in the period in which the right to receive the same is established. (ii) Other income Other operational revenue represents income earned from the activities incidental to the business and is recognised when the right to receive the income is established as per the terms of the contract. Commission income is recognised as and when the terms of the contract are fulfilled. Revenue from contracts for rendering of engineering design services and other services which are directly related to the construction of an asset is recognised on the same basis as stated in (B) supra. Unbilled revenue represents value of services performed in accordance with the contract terms but not billed. Stage of completion is determined by the proportion of actual costs incurred to-date, to the estimated total costs of the transaction B. 4. the costs incurred or to be incurred in respect of the transaction can be measured reliably. G. F. the stage of completion of the transaction at the end of the reporting period can be measured reliably; and 3. it is probable that the economic benefits associated with the transaction will flow to the company; 2. 1. the amount of revenue can be measured reliably; H. C. Other government grants, which are revenue in nature and are towards compensation for the qualifying costs incurred by the company, are recognised as income in the Statement of Profit and Loss in the period in which such costs are incurred. D. Other items of income are accounted as and when the right to receive such income arises and it is probable that the economic benefits will flow to the company and the amount of income can be measured reliably. Properties, including those under construction, held to earn rentals and/or capital appreciation are classified as investment property and measured and reported at cost, including transaction costs. (h) Investment property Freehold land is not depreciated. Assets acquired under finance leases are depreciated on a straight line basis over the lease term. Where there is reasonable certainty that the company shall obtain ownership of the assets at the end of the lease term, such assets are depreciated based on the useful life prescribed under Schedule II to the Companies Act, 2013 or based on the useful life adopted by the company for similar assets. Depreciation charge for impaired assets is adjusted in future periods in such a manner that the revised carrying amount of the asset is allocated over its remaining useful life. Depreciation on additions to/deductions from, owned assets is calculated pro rata to the period of use. Extra shift depreciation is provided on a location basis. Where cost of a part of the asset ("asset component") is significant to total cost of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part is determined separately and such asset component is depreciated over its separate useful life. Significant Accounting Policies (contd.) NOTE [1] Notes forming part of the Financial Statements (contd.) 245 PPE not ready for the intended use on the date of the Balance Sheet are disclosed as "capital work-in-progress". (Also refer to policies on leases, borrowing costs, impairment of assets and foreign currency transactions infra). Depreciation is recognised using straight line method so as to write off the cost of the assets (other than freehold land and properties under construction) less their residual values over their useful lives specified in Schedule II to the Companies Act, 2013, or in the case of assets where the useful life was determined by technical evaluation, over the useful life so determined. Depreciation method is reviewed at each financial year end to reflect the expected pattern of consumption of the future economic benefits embodied in the asset. The estimated useful life and residual values are also reviewed at each financial year end and the effect of any change in the estimates of useful life/residual value is accounted on prospective basis. Own manufactured PPE is capitalised at cost including an appropriate share of overheads. Administrative and other general overhead expenses that are specifically attributable to construction or acquisition of PPE or bringing the PPE to working condition are allocated and capitalised as a part of the cost of the PPE. For transition to Ind AS, the company has elected to adopt as deemed cost, the carrying value of PPE measured as per I-GAAP less accumulated depreciation and cumulative impairment on the transition date of April 1, 2015. In respect of revalued assets, the value as determined by valuers as reduced by accumulated depreciation and cumulative impairment is taken as cost on transition date. PPE is recognised when it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably. PPE is stated at original cost net of tax/duty credits availed, if any, less accumulated depreciation and cumulative impairment, if any. Property, plant and equipment acquired on hire purchase basis are recognised at their cash values. Cost includes professional fees related to the acquisition of PPE and for qualifying assets, borrowing costs capitalised in accordance with the company's accounting policy. (g) Property, plant and equipment (PPE) (f) Exceptional items Revenue from rendering services is recognised when the outcome of a transaction can be estimated reliably by reference to the stage of completion of the transaction. The outcome of a transaction can be estimated reliably when all the following conditions are satisfied: Depreciation is recognised using straight line method so as to write off the cost of the investment property less their residual values over their useful lives specified in Schedule II to the Companies Act, 2013 or in case of assets where the useful life was determined by technical evaluation, over the useful life so determined. Depreciation method is reviewed at each financial year end to reflect the expected pattern of consumption of the future benefits embodied in the investment property. The estimated useful life and residual values are also reviewed at each financial year end and the effect of any change in the estimates of useful life/ residual value is accounted on prospective basis. Freehold land and properties under construction are not depreciated. E. NOTE [1] it is probable that the economic benefits associated with the contract will flow to the company; ii. the amount of revenue can be measured reliably; i. The estimated outcome of a contract is considered reliable when all the following conditions are satisfied: Fixed price contracts: Contract revenue is recognised only to the extent of cost incurred till such time the outcome of the job cannot be ascertained reliably subject to condition that it is probable that such cost will be recoverable. When the outcome of the contract is ascertained reliably, contract revenue is recognised at cost of work performed on the contract plus proportionate margin, using the percentage of completion method. Percentage of completion is the proportion of cost of work performed to-date, to the total estimated contract costs. Cost plus contracts: Revenue from cost plus contracts is determined with reference to the recoverable costs incurred during the period and the margin as agreed with the customer. iii. 2. Revenue from construction/project related activity and contracts for supply/commissioning of complex plant and equipment is recognised as follows: 5. the costs incurred or to be incurred in respect of the transaction can be measured reliably. B. it is probable that the economic benefits associated with the transaction will flow to the company; and 4. the amount of revenue can be measured reliably; 3. 1. C. D. the stage of completion of the contract at the end of the reporting period can be measured reliably; and Notes forming part of the Financial Statements (contd.) LARSEN & TOUBRO Expected loss, if any, on the project is recognised as an expense in the period in which it is foreseen, irrespective of the stage of completion of the contract. The costs incurred on property development activities are carried as "Inventories" till such time the outcome of the project cannot be estimated reliably and all the aforesaid conditions are fulfilled. When the outcome of the project can be ascertained reliably and all the aforesaid conditions are fulfilled, revenue from property development activity is recognised at cost incurred plus proportionate margin, using percentage of completion method. Percentage of completion is determined based on the proportion of actual cost incurred to-date, to the total estimated cost of the project. For the purpose of computing percentage of construction, cost of land, developmental rights and borrowing costs are excluded. at least 10% of the total revenue as per the agreements of sale or any other legally enforceable documents is realised at the reporting date in respect of each of the contracts and the parties to such contracts can be reasonably expected to comply with the contractual payment terms. at least 25% of the saleable project area is secured by contracts or agreements with buyers; and contract costs for work performed (excluding cost of land/developmental rights and borrowing cost) constitute at least 25% of the estimated total contract costs representing a reasonable level of development; 4. 3. 2. all critical approvals necessary for commencement of the project have been obtained; 1. Revenue from property development activity in the nature of a construction contract is recognised based on the 'Percentage of completion method' (POC) when the outcome of the contract can be estimated reliably upon fulfillment of all the following conditions: Revenue from property development activity which are in substance similar to delivery of goods is recognised when all significant risks and rewards of ownership in the land and/or building are transferred to the customer and a reasonable expectation of collection of the sale consideration from the customer exists. For contracts where progress billing exceeds the aggregate of contract costs incurred to-date and recognised profits (or recognised losses, as the case may be), the surplus is shown as the amount due to customers. Amounts received before the related work is performed are disclosed in the Balance Sheet as a liability towards advance received. Amounts billed for work performed but yet to be paid by the customer are disclosed in the Balance Sheet as trade receivables. The amount of retention money held by the customers is disclosed as part of other current assets and is reclassified as trade receivables when it becomes due for payment. Expected loss, if any, on a contract is recognised as expense in the period in which it is foreseen, irrespective of the stage of completion of the contract. iv. the costs incurred or to be incurred in respect of the contract can be measured reliably. Significant Accounting Policies (contd.) Rendering of services Directors 11.34 N.HARIHARAN Company Secretary M. No. A3471 2015-16 crore crore crore Note 2016-17 A. Items that will not be reclassified to Profit or Loss: Other Comprehensive Income 6757.84 Profit after tax Current tax Tax expenses Brought forward Statement of Profit and Loss for the year ended March 31, 2017 (contd.) LARSEN & TOUBRO 248 Financial assets and/or financial liabilities are recognised when the company becomes party to a contract embodying the related financial instruments. All financial assets, financial liabilities and financial guarantee contracts are initially measured at transaction values and where such values are different from the fair value, at fair value. Transaction costs that are attributable to Deferred tax (m) Financial instruments crore 6255.62 1675.20 Exchange differences in translating the financial statements of foreign operations [net of tax] (2.59) (10.25) Debt instruments through Other Comprehensive Income [net of tax] B. Items that will be reclassified to Profit or Loss: (8.44) (8.02) 49(a) Remeasurements of the defined benefit plans [net of tax] 5453.74 1256.04 1304.10 (273.97) (371.10) 49(a) 1530.01 4999.58 (Also refer to policy on depreciation, supra) Assets leased out under operating leases are continued to be shown under the respective class of assets. Rental income is recognised on a straight line basis over the term of the relevant lease. B. Significant Accounting Policies (contd.) NOTE [1] Notes forming part of the Financial Statements (contd.) 247 The obligation is measured at the present value of the estimated future cash flows using a discount rate based on the market yield on government securities of a maturity period equivalent to the weighted average maturity profile of the defined benefit obligations at the Balance Sheet date. Defined benefit plans: The employees' gratuity fund schemes and employee provident fund schemes managed by board of trustees established by the company, the post-retirement medical care plan and the company pension plan represent defined benefit plans. The present value of the obligation under defined benefit plans is determined based on actuarial valuation using the Projected Unit Credit Method. Defined contribution plans: The company's superannuation scheme, state governed provident fund scheme, employee state insurance scheme and employee pension scheme are defined contribution plans. The contribution paid/payable under the schemes is recognised during the period in which the employee renders the related service. Remeasurement, comprising actuarial gains and losses, the return on plan assets (excluding amounts included in net interest on the net defined benefit liability or asset) and any change in the effect of asset ceiling (wherever applicable) is recognised in other comprehensive income and is reflected in retained earnings and the same is not eligible to be reclassified to profit or loss. B. (ii) Post-employment benefits: Employee benefits such as salaries, wages, short term compensated absences, expected cost of bonus, ex-gratia and performance-linked rewards falling due wholly within twelve months of rendering the service are classified as short term employee benefits and are expensed in the period in which the employee renders the related service. (i) Short term employee benefits: (k) Employee Benefits When an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss is recognised for the asset (or cash generating unit) in prior years. A reversal of an impairment loss is recognised immediately in the Statement of Profit and Loss. If recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, such deficit is recognised immediately in the Statement of Profit and Loss as impairment loss and the carrying amount of the asset (or cash generating unit) is reduced to its recoverable amount. For this purpose, a cash generating unit is ascertained as the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. A. Defined benefit employee costs comprising current service cost, past service cost and gains or losses on settlements are recognised in the Statement of Profit and Loss as employee benefits expense. Interest cost implicit in defined benefit employee cost is recognised in the Statement of Profit and Loss under finance cost. Gains or losses on settlement of any defined benefit plan are recognised in profit or loss when such settlement occurs. Past service cost is recognised as expense at the earlier of the plan amendment or curtailment and when the company recognises related restructuring costs or termination benefits. In case of funded plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans to recognise the obligation on a net basis. (iii) Long term employee benefits: Lease rentals on assets under operating lease are charged to the Statement of Profit and Loss on a straight line basis over the term of the relevant lease. A. The leases which are not classified as finance lease are operating leases. (ii) Operating leases: Assets given under a finance lease are recognised as a receivable at an amount equal to the net investment in the lease. Lease income is recognised over the period of the lease so as to yield a constant rate of return on the net investment in the lease. Leases where the company has substantially all the risks and rewards of ownership of the related assets are classified as finance leases. Assets under finance leases are capitalised at the commencement of the lease at the lower of the fair value or the present value of minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the outstanding liability for each period. B. A. (i) Finance leases: The determination of whether an agreement is, or contains, a lease is based on the substance of the agreement at the date of inception. Leases (I) Termination benefits such as compensation under employee separation schemes are recognised as expense when the company's offer of the termination benefit is accepted or when the company recognises the related restructuring costs whichever is earlier. (iv) Termination benefits: Long term employee benefit costs comprising current service cost and gains or losses on curtailments and settlements, remeasurements including actuarial gains and losses are recognised in the Statement of Profit and Loss as employee benefit expenses. Interest cost implicit in long term employee benefit cost is recognised in the Statement of Profit and Loss under finance cost. The obligation for long term employee benefits such as long term compensated absences, long service award etc. is measured at present value of estimated future cash flows expected to be made by the company and is recognised in a similar manner as in the case of defined benefit plans vide (ii)(B) supra. (4.32) (The amount of value in use is determined as the present value of estimated future cash flows from the continuing use of an asset and from its disposal at the end of its useful life. For this purpose, the discount rate (pre-tax) is determined based on the weighted average cost of capital of the company suitably adjusted for risks specified to the estimated cash flows of the asset). 4.14 223.37 Firm's Registration No. 109982W by the hand of FIRDOSH D. BUCHIA Partner Membership No. 038332 Mumbai, May 29, 2017 52 Chartered Accountants 58.49 52 58.30 53.47 2.00 2.00 1 to 60 R. SHANKAR RAMAN Chief Financial Officer & Whole-time Director (DIN 00019798) 53.71 SUBODH BHARGAVA (DIN 00035672) For SHARP & TANNAN Partner Other Comprehensive Income for the year [net of tax] 157.35 82.86 Total Comprehensive Income for the year 5611.09 5082.44 Basic earnings per equity share (*) Membership No. 70928 Diluted earnings per equity share (*) NOTES FORMING PART OF THE FINANCIAL STATEMENTS In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm's Registration No. 117366W/W-100018 by the hand of P. R. RAMESH Face value per equity share (*) A. M. NAIK Group Executive Chairman (DIN 00001514) M. DAMODARAN (DIN 02106990) 185.91 19,16,784 93,14,78,845 0.39 186.30 B. Other equity (crore) Equity component of foreign crore -Reserves and surplus- Debt Foreign Particulars Capital Securities Em Cost of hedging reserve [net of tax] 78.41 Items of Other Comprehensive Income 2015-16 Number of shares 92,95,62,061 186.30 0.29 186.59 93,14,78,845 14,86,958 93,29,65,803 SUNITA SHARMA (DIN 02949529) M. M. CHITALE (DIN 00101004) SUSHOBHAN SARKER (DIN 00088276) N. HARIHARAN Company Secretary M. No. A3471 VIKRAM SINGH MEHTA (DIN 00041197) Directors SANJEEV AGA (DIN 00022065) 239 Statement of changes in Equity for the year ended March 31, 2017 A. Equity share capital Particulars 2016-17 Number of shares crore Issued, subscribed and fully paid up equity shares outstanding at the beginning of the year Add: Shares issued on exercise of employee stock options during the year Issued, subscribed and fully paid up equity shares outstanding at the end of the year Effective portion of gains and losses on hedging instruments in a cash flow hedge [net of tax] VIKRAM SINGH MEHTA (DIN 00041197) (ii) in the case of a cash generating unit (a group of assets that generates identified, independent cash flows), at the higher of the cash generating unit's net selling price and the value in use. (i) (1647.02) 153.20 10.52 8164.72 242.23 406.51 25216.49 7710.27 5453.74 (1647.02) 4.87 76.03 41949.01 5453.74 (8.02) (4.32) 179.94 (10.25) 157.35 5445.72 (35.83) (4.32) (54.59) 162.02 earnings during the year Employee share options (net) Dividend paid for the previous year (including tax on dividend) Balance as at 31-3-2017 In terms of our report attached For DELOITTE HASKINS & SELLS LLP (156.50) Chartered Accountants by the hand of P. R. RAMESH Partner Membership No. 70928 201.63 (0.07) (12.02) (54.59) 6.50 Firm's Registration No. 117366W/W-100018 179.94 (10.25) 5611.09 (DIN 00001514) M. DAMODARAN (DIN 02106990) SUNITA SHARMA (DIN 02949529) M.M.CHITALE (DIN 00101004) SUSHOBHAN SARKER (DIN 00088276) Group Executive Chairman For SHARP & TANNAN Firm's Registration No. 109982W by the hand of FIRDOSH D. BUCHIA Partner Membership No. 038332 Mumbai, May 29, 2017 240 Chartered Accountants A. M. NAIK SUBODH BHARGAVA (DIN 00035672) R. SHANKAR RAMAN Chief Financial Officer & Whole-time Director (DIN 00019798) 154.18 (0.05) 154.18 (0.05) | | (19.61) (49.75) (45.37) 157.11 (87.75) (45.37) 153.20 10.52 8318.85 177.25 356.76 25373.60 (1842.71) 11225.53 (1842.71) 0.55 144.11 65.78 45826.15 Transfer from/to general reserve/retained in the case of an individual asset, at the higher of the net selling price and the value in use; and Share issue expenses the year (c+d) reserve options (net) redemption General reserve Retained earnings currency Hedging convertible through Other translation reserve account reserve Comprehensive (43.43) reserve equity Employee share premium currency Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is determined: As at the end of each accounting year, the company reviews the carrying amounts of its PPE, investment property, intangible assets and investments in subsidiary, associate and joint venture companies to determine whether there is any indication that those assets have suffered an impairment loss. If such indication exists, the said assets are tested for impairment so as to determine the impairment loss, if any. Goodwill and the intangible assets with indefinite life are tested for impairment each year. (j) Impairment of assets Amortisation on impaired assets is provided by adjusting the amortisation charge in the remaining periods so as to allocate the asset's revised carrying amount over its remaining useful life. Intangible assets are amortised on straight line basis over the estimated useful life. The method of amortisation and useful life is are reviewed at the end of each accounting year with the effect of any changes in the estimate being accounted for on a prospective basis. Intangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as "intangible assets under development". Development expenditure that does not meet the above criteria is expensed in the period in which it is incurred. Significant Accounting Policies (contd.) NOTE [1] Notes forming part of the Financial Statements (contd.) LARSEN & TOUBRO the company has ability to reliably measure the expenditure attributable to the intangible asset during its development. the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and the manner in which the probable future economic benefits will be generated including the existence of a market for output of the intangible asset or intangible asset itself or if it is to be used internally, the usefulness of intangible assets; Debenture instruments Total other Income Issue of equity shares Balance as at 1-4-2015 10.52 82.86 4991.14 4.14 89.75 (2.59) 5082.44 201.63 (2.59) (0.07) Employee share options (net) Dividend paid for the previous year (including tax on dividend) Balance as at 31-3-2016 Profit for the year (c) Other Comprehensive Income (d) Total comprehensive income for earnings during the year 153.20 89.75 (8.44) 7963.16 308.84 400.01 25054.47 4522.65 0.73 (125.58) 78.62 4.14 38366.62 Other Comprehensive Income (b) Total comprehensive income for the year (a+b) Issue of equity shares Share issue expenses Transfer from/to general reserve/retained 4999.58 4999.58 Profit for the year (a) bonds Load bearing structures Horizontal Autoclaves 82.84 115.49 0.42 (1.61) 28.43 1918.74 103.00 6522.85 7129.89 302.53 253.22 Add: Capital work-in-progress *3.99 crore pertains to foreign currency fluctuation 6825.38 7383.11 255 Notes forming part of the Financial Statements (contd.) NOTE [2] (contd.) Cost Depreciation Book value crore Class of assets Foreign Foreign 112.00 12.20 0.09 5.89 2016-17 2015-16 Sr. no. Particulars 1. Rental income derived from investment property 149.01 153.68 2. As at Direct operating expenses arising from investment property that generated rental income 22.14 Sub-total other assets 121.89 2.63 Total 8054.70 614.57 4.39 (9.71) 0.32 124.20 110.58 8544.59 924.81 1024.39 6.40 21.12 Additions 1-4-2015 currency Deductions fluctuation 1.75 Leased out 9.76 9.76 0.55 Sub total - Buildings 2012.46 118.99 0.57 100.24 13.76 100.79 1.75 98.49 2010.01 0.55 9.21 99.04 2019.22 2012.46 2002.70 9.76 Plant & equipment Owned 4134.78 872.41 2118.26 crore 2108.50 0.57 As at 31-3-2016 Up to 1-4-2015 For the period* currency Deductions fluctuation Up to 31-3-2016 As at As at 31-3-2016 13.76 1-4-2015 4.10 360.31 360.31 363.76 Land - freehold Buildings Owned 2002.70 118.99 0.65 60 3 Maximum useful life (in years) As at 31-3-2016 41.22 1.17 40.05 40.05 41.22 422.82 4.40 35.51 31-3-2017 391.71 19.03 0.42 1.53 35.06 356.65 405.68 464.04 4.40 36.68 17.14 431.76 As at from PPE Land Buildings Total Land Buildings Total crore Cost Depreciation Up to 31-3-2017 Book Value As at 1-4-2016 Additions Transfer from PPE Deductions As at 31-3-2017 Upto 31-3-2016 For the year Transfer Deductions Class of assets 3.32 17.14 0.42 As at 1-4-2015 41.22 17.14 17.14 405.68 429.96 471.18 7.14 464.04 17.14 As at 31-3-2016 41.22 17.14 Note: Depreciation is provided based on useful life supported by the technical evaluation considering business specific usage, the consumption pattern of the assets and the past performance of similar assets: Sr. no. 1. Buildings Class of assets Disclosure pursuant to Ind AS 40 "Investment Property" a. Amount recognised in the Statement of Profit and Loss for investment property: 258 Minimum useful life (in years) 446.90 471.18 19.03 41.22 422.82 429.96 1.53 35.06 396.70 446.90 crore Cost Depreciation Book Value Class of assets 7.14 As at 1-4-2015 Transfer from PPE Deductions As at 31-3-2016 Upto 1-4-2015 For the year Transfer from PPE Deductions Up to 31-3-2016 41.22 Additions Investment property 182.50 663.75 10.02 3.02 13.65 6.15 Notes forming part of the Financial Statements (contd.) NOTE [2] (contd.) LARSEN & TOUBRO d. The average capitalisation rate for borrowing cost is 7.91% (previous year: 7.85%). e. f. g. h. i. In addition to depreciation, obsolescence amounting to 22.90 crore (previous year: ₹ 10.45 crore) and impairment amounting to 103 crore (previous year: Nil) have been recognised in Profit and Loss during the year. Owned assets given on operating lease have been presented separately under respective class of assets as "Leased out" pursuant to Ind AS 17 "Leases". Cost as at April 1, 2016 and April 1, 2015 of individual assets has been reclassified wherever necessary. Out of its leasehold land at Hazira, the Company has given certain portion of land for the use to its subsidiary company and the lease deed is under execution. Depreciation is provided based on useful life supported by the technical evaluation considering business specific usage, the consumption pattern of the assets and the past performance of similar assets. 3.13 3.63 2015-16 2016-17 i. A. C. Cost of freehold land includes 1.27 crore (previous year: 0.27 crore) for which conveyance is yet to be completed. Cost of buildings includes ownership accommodations: ii. iii. B. C. in various co-operative societies, shop-owners' associations and non-trading corporations: 88.09 crore, including 2550 shares of 50 each, 232 shares of 100 each and 1 share of 250. (Previous year: in various co-operative societies, shop-owners' associations and non-trading corporations: 86.92 crore, including 2570 shares of 50 each, 232 shares of 100 each and 1 share of ₹250). a. in various apartments: 11.20 crore (previous year: 11.20 crore). D. in proposed co-operative societies: 27.80 crore. (previous year: * 0.53 crore). ownership accommodations of 3.53 crore in respect of which the deed of conveyance is yet to be executed. (previous year: * 3.86 crore). ownership accommodations of ₹ 8.45 crore representing undivided share in properties at various locations. (previous year: 8.45 crore). Additions during the year and capital work-in-progress include 13.65 crore (previous year: ₹ 6.15 crore) being borrowing cost capitalised in accordance with Indian Accounting Standard (Ind AS) 23 on "Borrowing Costs". Asset wise break-up of borrowing costs capitalised is as follows: 256 Buildings (owned) Capital work-in-progress Total Class of assets crore in various co-operative societies: 7.94 crore (previous year: 12.88 crore) for which share certificates are yet to be issued. Sr. Asset Class Estimated useful life of the following assets is in line with useful life prescribed in schedule II of The Companies Act, 2013: Maximum useful life (in years) 7 10 7. Ships 14 14 b. Estimated useful life of following assets is different than useful life as prescribed in schedule II of The Companies Act, 2013. Assets used in Heavy Engineering and Shipbuilding Business: Sr. Owned Vehicles No Sub-category of Assets 1. Plant & Equipment General Boring/Rolling/Drilling/Milling machines Modular Furnace Other Furnaces 2. Roads 84.42 Category of Assets b. 6. 10 Minimum useful life (in years) No. 1. Owned Buildings 3 60 2. Owned Plant and Equipment 8 10 15 Computer 3 6 4. Office Equipment 4 5 5. Furniture and Fixture 3. a. 0.15 crore deduction pertains to foreign currency fluctuation 7454.69 Office equipment 68.50 29.81 0.26 1.39 97.18 32.72 0.55 32.17 157.56 149.27 65.01 Furniture and fixtures 106.52 26.00 0.04 0.61 131.95 23.14 0.08 23.06 108.89 68.50 106.52 73.97 75.95 4.91 Leased out 3.27 3.27 1.17 Sub total plant & equipment 4138.05 872.41 3.32 1.98 182.50 664.92 4.91 658.84 4169.17 4134.78 1.17 2.10 3.27 660.01 4171.27 4138.05 Computers 149.27 87.11 0.10 4.95 231.53 4831.28 4828.01 Vehicles 61.47 121.54 0.79 122.33 6.40 6.40 115.93 121.54 Total 7068.96 Sub total other assets 1197.23 216.11 8054.70 935.57 10.76 924.81 7129.89 7068.96 Add: Capital work-in-progress 253.22 385.73 7383.11 4.62 108.86 83.53 1.48 0.33 8.80 161.86 31.65 1.49 30.16 131.70 108.86 Other assets Ships 82.84 38.01 4.92 4.92 33.09 38.01 Assets taken on finance lease 83.53 0.79 84.32 1.48 38.01 NOTE [3] 363.76 j. 31-3-2017 Up to currency Deductions Foreign Book value Impairment Depreciation Trf to investment For the period* 31-3-2016 Up to As at 31-3-2017 Foreign currency Deductions property fluctuation Additions investment As at 1-4-2016 Class of assets Trf to Cost crore LARSEN & TOUBRO Up to 31-3-2017 As at As at 31-3-2017 31-3-2016 property fluctuation Land - freehold 0.60 0.60 13.02 13.02 Leased out (0.22) 1.16 187.93 0.42 91.29 98.44 Property, plant and equipment & capital work-in-progress 30.73 2182.26 4.39 113.40 2105.19 Owned Buildings 362.34 360.31 362.34 2.03 360.31 (1.21) NOTE [2] Notes forming part of the Financial Statements (contd.) 254 Commitments are future liabilities for contractual expenditure, classified and disclosed as follows: (x) Commitments Significant Accounting Policies (contd.) NOTE [1] Notes forming part of the Financial Statements (contd.) 253 Where the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under such contract, the present obligation under the contract is recognised and measured as a provision. Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date. Contingent assets are disclosed where an inflow of economic benefits is probable. a) estimated amount of contracts remaining to be executed on capital account and not provided for; a present obligation arising from past events, when no reliable estimate is possible. b) a) Provision is measured using the cash flows estimated to settle the present obligation and when the effect of time value of money is material, the carrying amount of the provision is the present value of those cash flows. Reimbursement expected in respect of expenditure required to settle a provision is recognised only when it is virtually certain that the reimbursement will be received. Contingent liability is disclosed in case of: it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and a reliable estimate can be made of the amount of the obligation. b) a) the company has a present obligation (legal or constructive) as a result of a past event; Provisions are recognised only when: (w) Provisions, contingent liabilities and contingent assets Interests in joint operations are included in the segments to which they relate. a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation; and Sub-total-buildings b) uncalled liability on shares and other investments partly paid; funding related commitment to subsidiary, associate and joint venture companies; and (iii) The estimates as at April 1, 2015 and at March 31, 2016 are consistent with those made for the same dates in accordance with I-GAAP. (ii) Ind AS 102 Share-based Payment has not been applied to equity instruments in share-based payment transactions that vested before April 1, 2015. (i) The company has adopted the carrying value determined in accordance with I-GAAP for all of its property plant & equipment and investment property as deemed cost of such assets at the transition date. The company has prepared opening Balance Sheet as per Ind AS as of April 1, 2015 (transition date) by recognising all assets and liabilities whose recognistion is required by Ind AS, derecognising items of assets or liabilities which are not permitted to be recognised by Ind AS, reclassifying items from I-GAAP to Ind AS as required, and applying Ind AS to measure the recognised assets and liabilities. The exemptions availed by the company under Ind AS 101 are as follows: (ab) First time adoption of Ind AS The preparation of financial statements in conformity with Ind AS requires that the management of the company makes estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates include useful lives of property, plant and equipment, Intangible assets, allowance for doubtful debts/advances, future obligations in respect of retirement benefit plans, expected cost of completion of contracts, provision for rectification costs, fair value measurement etc. Difference, if any, between the actual results and estimates is recognised in the period in which the results are known. (aa) Key sources of estimation Cash and cash equivalents (including bank balances) shown in the Statement of Cash Flows exclude items which are not available for general use as on the date of Balance Sheet. all other items for which the cash effects are investing or financing cash flows. c) changes during the period in inventories and operating receivables and payables transactions of a non-cash nature; non-cash items such as depreciation, provisions, deferred taxes, unrealised foreign currency gains and losses, and undistributed profits of associates; and ii. i. Statement of Cash Flows is prepared segregating the cash flows into operating, investing and financing activities. Cash flow from operating activities is reported using indirect method, adjusting the net profit for the effects of: (z) Statement of Cash Flows Non-current assets and disposal groups classified as held for sale are measured at lower of their carrying amount and fair value less costs to sell. Non-current assets and disposal groups are classified as held for sale if their carrying amount is intended to be recovered principally through a sale (rather than through continuing use) when the asset (or disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sale of such asset (or disposal group) and the sale is highly probable and is expected to qualify for recognition as a completed sale within one year from the date of classification. (y) Non-current assets held for sale Other commitments related to sales/procurements made in the normal course of business are not disclosed to avoid excessive details. d) other non-cancellable commitments, if any, to the extent they are considered material and relevant in the opinion of management. iii. 2118.21 113.40 4.39 (1.21) 38.36 162.20 Vehicles 108.95 0.24 94.99 45.88 0.33 (0.01) 23.15 (0.43) 15.98 23.07 1.09 (0.06) 132.02 10.24 Furniture and fixtures 0.01 61.88 65.38 61.60 0.23 (0.03) 32.24 29.62 Photographic equipment Carrying value of Property plant and equipment pledged as collateral for liabilities and /or commitments as at March 31, 2017 0.09 crore (0.09 crore as at March 31,2016, 0.09 crore as at April 1,2015) 123.49 184.15 (0.06) 2.53 1.48 1.05 86.95 2.63 84.32 lease Assets taken on finance 32.65 27.58 30.17 32.82 9.67 4.84 4.92 --- 0.32 37.25 37.57 Ships Other assets 132.03 127.34 6.12 56.81 0.09 The company as a joint operator recognises in relation to its interest in a joint operation, its share in the assets/liabilities held/ incurred jointly with the other parties of the joint arrangement. Revenue is recognised for its share of revenue from the sale of output by the joint venture. Expenses are recognised for its share of expenses incurred jointly with other parties as part of the joint arrangement. 0.26 26.26 0.85 0.47 2.63 2.63 Leased out (1.28) 659.08 766.64 54.73 5117.47 (7.84) 351.45 14.98 1409.46 1.32 4828.59 Plant & equipment 87.25 1907.08 2006.75 11.82 12.42 87.25 1918.90 2019.17 1.20 189.13 1.16 (0.22) 0.42 91.89 99.04 30.73 2195.28 Owned (0.13) 15.50 3692.51 4169.51 1.31 1.78 4831.22 97.62 Office equipment 151.58 157.27 5.52 142.34 (0.01) 73.96 73.91 293.92 7.47 (0.04) Sub-total-plant & 70.20 Computers equipment 15.50 3693.82 4171.29 14.98 1410.78 (1.28) 659.93 767.11 54.73 5120.10 (7.84) 351.45 231.23 (v) Interests in Joint operations 141.11 The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the company expects, at the end of reporting period, to recover or settle the carrying amount of its assets and liabilities. Financial assets: (i) The financial assets and financial liabilities are offset and presented on net basis in the Balance Sheet when there is a current legally enforceable right to set-off the recognised amounts and it is intended to either settle on net basis or to realise the asset and settle the liability simultaneously. the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from as the case may be, the fair value of such assets or liabilities, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss. In case of interest free or concession loans given to subsidiary companies, the excess of the actual amount of the loan over initial measure at fair value is accounted as an equity investment. Significant Accounting Policies (contd.) NOTE [1] Notes forming part of the Financial Statements (contd.) LARSEN & TOUBRO Cranes A. Carpeted Roads-other than RCC Schedule II (in years) Useful life adopted (in years) 10-30 5-15 5-30 15 10-30 50 10-30 Useful life as per 5 B. All recognised financial assets are subsequently measured in their entirety at amortised cost or at fair value depending on the classification of the financial assets as follows: For financial assets that are measured at FVTOCI, income by way of interest, dividend and exchange difference (on debt instrument) is recognised in profit or loss and changes in fair value (other than on account of such income) are recognised in Other Comprehensive Income and accumulated in other equity. On disposal of debt instruments measured at FVTOCI, the cumulative gain or loss previously accumulated in other equity is reclassified to profit or loss. In case of equity instruments measured at FVTOCI, such cumulative gain or loss is not reclassified to profit or loss on disposal of investments. Investments in equity instruments are classified as at FVTPL, unless the related instruments are not held for trading and the company irrevocably elects on initial recognition to present subsequent changes in fair value in Other Comprehensive Income. Investment in preference shares of the subsidiary companies are treated as equity instruments if the same are convertible into equity shares or are redeemable out of the proceeds of equity instruments issued for the purpose of redemption of such investments. Investment in preference shares not meeting the aforesaid conditions are classified as debt instruments at FVTPL. Investment in equity instruments issued by subsidiary, associates and joint ventures are measured at cost less impairment. The contractual terms of instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. The asset is held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets; and • • Debt instruments that meet the following conditions are subsequently measured at fair value through other comprehensive income (FVTOCI) (unless the same are designated as fair value through profit or loss) C. The contractual terms of instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. • Other investments in debt instruments – at amortised cost, subject to following conditions: Investments in debt Instruments that are designated as fair value through profit or loss (FVTPL) - at fair value. 6. 5. 4. 3. 2. 1. The asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and A financial asset is primarily derecognised when: 5-15 Category of Assets Sub-category of Assets Category of Assets No 1. Office Equipment Assets deployed at project site Useful life as per Schedule II (in years) 5 Useful life adopted (in years) 3 Assets used in Metallurgical & Material Handling business: 2. Assets deployed at project site 15 3 refrigeration equipment 3. Assets deployed at project site 15 3 Transaction or event which is recognised outside profit or loss, either in other comprehensive income or in equity, is recorded along with the tax as applicable. Air conditioning and Sr. NOTE [2] (contd.) 257 No Assets used in Electrical & Automation business: Sub-category of Assets Useful life as per Schedule II (in years) Useful life adopted 1. Plant & Equipment General Specialised machine tools, dies, jigs, fixtures, gauges for electrical business 15 Notes forming part of the Financial Statements (contd.) (in years) 5 Sr. Category of Assets Sub-category of Assets No Useful life as per Schedule II (in years) Useful life adopted (in years) 1. Photographic equipment 15 5 Assets used in Construction business: 1. Sr. 2. The reporting of segment information is the same as provided to the management for the purpose of the performance assessment and resource allocation to the segments. Operating segments are those components of the business whose operating results are regularly reviewed by the chief operating decision making body in the company to make decisions for performance assessment and resource allocation. (t) Accounting and reporting of information for Operating Segments all resulting exchange differences are recognised in other comprehensive income and accumulated in equity as foreign currency translation reserve for subsequent reclassification to profit or loss on disposal of such foreign operations. C. B. A. assets and liabilities for each Balance Sheet presented are translated at the closing rate at the date of that Balance Sheet; income and expenses for each income statement are translated at average exchange rates; and (iii) Financial statements of foreign operations whose functional currency is different than Indian Rupee are translated into Indian Rupees as follows: exchange differences on transactions entered into in order to hedge certain foreign currency risks. B. A. exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings; and (ii) Transactions in currencies other than the company's functional currency are recorded on initial recognition using the exchange rate at the transaction date. At each Balance Sheet date, foreign currency monetary items are reported using the closing rate. Non-monetary items that are measured in terms of historical cost in foreign currency are not retranslated. Exchange differences that arise on settlement of monetary items or on reporting of monetary items at each Balance Sheet date at the closing spot rate are recognised in profit or loss in the period in which they arise except for: (i) The functional currency and presentation currency of the company is Indian Rupee. (s) Foreign currencies Significant Accounting Policies (contd.) NOTE [1] Notes forming part of the Financial Statements (contd.) 251 The fair value of the stock options granted to employees of the company by the company's subsidiaries is accounted as employee compensation cost over the vesting period and where such fair value is not recovered by the subsidiaries, the same is treated as dividend declared by them. Segment accounting policies are in line with the accounting policies of the company. In addition, the following specific accounting policies have been followed for segment reporting: Segment revenue includes sales and other operational revenue directly identifiable with/allocable to the segment including inter segment revenue. i) ii) Deferred tax assets relating to unabsorbed depreciation/business losses/losses under the head "capital gains" are recognised and carried forward to the extent of available taxable temporary differences or where there is convincing other evidence that sufficient future taxable income will be available against which such deferred tax assets can be realised. the right to receive cash flows from the asset has expired, or Deferred tax liabilities are generally recognised for all taxable temporary differences including the temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets are generally recognised for all taxable temporary differences to the extent that is probable that taxable profits will be available against which those deductible temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the company's financial statements and the corresponding tax bases used in computation of taxable profit and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date. Significant Accounting Policies (contd.) NOTE [1] Notes forming part of the Financial Statements (contd.) LARSEN & TOUBRO 252 The stock options granted pursuant to the company's Stock Options Scheme, are measured at the fair value of the options at the grant date. The fair value of the options is treated as discount and accounted as employee compensation cost over the vesting period on a straight line basis. The amount recognised as expense each year is arrived at based on the number of grants expected to vest. If a grant lapses after the vesting period, the cumulative discount recognised as expense in respect of such grant is transferred to the general reserve within equity. Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income tax Act 1961, and based on the expected outcome of assessments/appeals. vii) Segment non-cash expenses forming part of segment expenses includes the fair value of the employee stock options which is accounted as employee compensation cost [Note 1(r) supra] and is allocated to the segment. vi) Segment assets and liabilities include those directly identifiable with the respective segments. Unallocable corporate assets and liabilities represent the assets and liabilities that relate to the company as a whole. Segment result includes margins on inter-segment capital jobs, which are reduced in arriving at the profit before tax of the company. Income which relates to the company as a whole and not allocable to segments is included in "unallocable corporate income". Most of the centrally incurred costs are allocated to segments mainly on the basis of their respective expected segment revenue estimated at the beginning of the reported period. v) iv) iii) Expenses that are directly identifiable with/allocable to segments are considered for determining the segment result. (u) Taxes on income Share-based payment arrangements viii) Segment revenue resulting from transactions with other business segments is accounted on the basis of transfer prices which are either determined to yield a desired margin or agreed on a negotiated basis. Borrowing costs include interest expense calculated using the effective interest method, finance charges in respect of assets acquired on finance lease and exchange differences arising on foreign currency borrowings to the extent they are regarded as an adjustment to interest costs. 250 amounts. (iv) Compound financial instruments issued by the company which can be converted into fixed number of equity shares at the option of the holders irrespective of changes in the fair value of the instrument are accounted by separately recognising the liability and the equity components. The liability component is initially recognised at the fair value of a comparable liability that does not have an equity conversion option. The equity component is initially recognised at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. The directly attributable transaction costs are allocated to the liability and the equity components in proportion to their initial carrying Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. Any gain or loss recognised in other comprehensive income and accumulated in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognised immediately in profit or loss. Cash flow hedges: In case of transaction related hedges, the effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in other comprehensive income and accumulated in equity as 'hedging reserve'. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss. Amounts previously recognised in other comprehensive income and accumulated in equity relating to the effective portion, are reclassified to profit or loss in the periods when the hedged item affects profit or loss, in the same head as the hedged item. The effective portion of the hedge is determined at the lower of the cumulative gain or loss on the hedging instrument from inception of the hedge and the cumulative change in the fair value of the hedged item from the inception of the hedge and the remaining gain or loss on the hedging instrument is treated as ineffective portion. In case of time period related hedges, the forward element and the spot element of a forward contract is separated and only the change in the value of the spot element of the forward contract is designated as the hedging instrument. Similarly, wherever applicable, the foreign currency basis spread is separated from the financial instrument and is excluded from the designation of that financial instrument as the hedging instrument in case of time period related hedges. The changes in the fair value of the forward element of the forward contract or the foreign currency basis spread of the financial instrument is accumulated in a separate component of equity as 'cost of hedging'. The changes in the fair value of such forward element or foreign currency basis spread are reclassified to profit or loss as a reclassification adjustment on a straight line basis over the period of the forward contract or the financial instrument. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. The fair value adjustment to the carrying amount of the hedged item arising from the hedged risk is amortised to profit or loss from that date. B. A. Fair value hedges: Changes in fair value of the designated portion of derivatives that qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. (iii) The company designates certain hedging instruments, such as derivatives, embedded derivatives and in respect of foreign currency risk, certain non-derivatives, as either fair value hedges or cash flow hedges or hedges of net investments in foreign operations. Hedges of foreign exchange risk on firm commitments are accounted as cash flow hedges. A financial liability is derecognised when the related obligation expires or is discharged or cancelled. Financial liabilities, including derivatives and embedded derivatives, which are designated for measurement at FVTPL are subsequently measured at fair value. Financial guarantee contracts are subsequently measured at the amount of impairment loss allowance or the amount recognised at inception net of cumulative amortisation, whichever is higher. All other financial liabilities including loans and borrowings are measured at amortised cost using Effective Interest Rate (EIR) method. B. (ii) Financial liabilities: Impairment of financial assets: The company recognises impairment loss on trade receivables using expected credit loss model, which involves use of a provision matrix constructed on the basis of historical credit loss experience as permitted under Ind AS 109. Impairment loss on investments On derecognition of a financial asset in its entirety, the difference between the carrying amount measured at the date of derecognition and the consideration received is recognised in profit or loss. D. NOTE [1] Significant Accounting Policies (contd.) Notes forming part of the Financial Statements (contd.) the company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a pass-through arrangement; and (a) the company has transferred substantially all the risks and rewards of the asset, or b) the company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. Borrowing costs net of any investment income from the temporary investment of related borrowings, that are attributable to the acquisition, construction or production of a qualifying asset are capitalised/inventoried as part of cost of such asset till such time the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognised in profit or loss in the period in which they are incurred. 249 LARSEN & TOUBRO Notes forming part of the Financial Statements (contd.) A. NOTE [1] The fair value of the stock options which are treated as expense, if any, in respect of shares allotted pursuant to Stock Options Scheme. B. A. The difference between the face value of the equity shares and the consideration received in respect of shares issued pursuant to Stock Options Scheme. Securities premium includes: (ii) The issue expenses of securities which qualify as equity instruments are written off against securities premium account. (q) Borrowing Costs (p) Securities premium account Cash and bank balances also include fixed deposits, margin money deposits, earmarked balances with banks and other bank balances which have restrictions on repatriation. Short term and liquid investments being subject to more than insignificant risk of change in value, are not included as part of cash and cash equivalents. (r) (o) Cash and bank balances Assessment of net realisable value is made in each subsequent period and when the circumstances that previously caused inventories to be written-down below cost no longer exist or when there is clear evidence of an increase in net realisable value because of changed economic circumstances, the write-down, if any, in the past period is reversed to the extent of the original amount written-down so that the resultant carrying amount is the lower of the cost and the revised net realisable value. (i) c) Finished goods and stock-in-trade (in respect of goods acquired for trading) at lower of weighted average cost or net realisable value. Cost includes related overheads and excise duty paid/payable on such goods. Manufacturing work-in-progress at lower of weighted average cost including related overheads or net realisable value. In some cases, manufacturing work-in-progress are valued at lower of specifically identifiable cost or net realisable value. In the case of qualifying assets, cost also includes applicable borrowing costs vide policy relating to borrowing costs. b) a) Raw materials, components, construction materials, stores, spares and loose tools at lower of weighted average cost or net realisable value. However, these items are considered to be realisable at cost if the finished products in which they will be used, are expected to be sold at or above cost. Inventories are valued after providing for obsolescence, as under: (n) Inventories Subsequent to initial recognition, the liability component of the compound financial instrument is measured at amortised cost using the effective interest method. The equity component of a compound financial instrument is not remeasured subsequently. Significant Accounting Policies (contd.) d) Completed property/work-in-progress (including land) in respect of property development activity at lower of specifically identifiable cost or net realisable value. crore 3800.28 30.07 13396.84 15004.95 4.42 3680.50 56.04 56.04 2730.25 As at 1-4-2015 crore 16381.00 crore crore crore As at 31-3-2016 crore 4.42 173.30 Face value per unit 18745.91 (A) Investments in fully paid equity instruments crore (i) Investments in fully paid equity instruments: As at 31-3-2017 crore crore As at 1-4-2015 19171.71 As at 31-3-2016 As at 31-3-2017 (a) Subsidiary companies: Number of units 45.65 17446.14 441.95 19187.86 605.10 19776.81 17400.49 As at 31-3-2017 5 Technical know-how 13 3. 2. Specialised softwares 1. Sr. no. Note: Depreciation is provided based on useful life supported by the technical evaluation considering business specific usage, the consumption pattern of the assets and the past performance of similar assets: 88.03 NOTE [5] 20.78 31.31 27.51 66.10 L&T Valves Limited* 66.10 3.80 3.80 3.80 67.25 3 Class of assets Financial Assets: Investments - non-current 3 6 3 (in years) (in years) Maximum useful life Minimum useful life New product design and development Particulars (B) Investment in preference shares of subsidiary companies (Debt portion) (d) Other companies (c) Joint venture companies (b) Associate companies (a) Subsidiary companies (A) Investment in equity instruments Particulars Details of Investments - non-current 100 311.58 161.23 45.60 45.60 4,56,00,000 10 L&T Cassidian Limited L&T Capital Company Limited L&T Aviation Services Private Limited 0.27 R$ 1 Larsen & Toubro Consultoria E Projeto Ltda 351.89 351.89 (i) Investments in fully paid equity instruments (contd.) Brought forward crore crore 45.60 10 50,000 0.05 1468.18 84.32 12,00,00,000 Total 10 L&T General Insurance Company Limited L&T Construction Equipment Limited 1,16,97,09,304 crore 10 0.04 0.04 0.04 37,000 10 22.00 0.05 L&T Finance Holdings Limited (quoted) 18,00,000 As at 1-4-2015 As at 31-3-2017 0.05 0.05 50,000 10 Hi-Tech Rock Products & Aggregates Limited 150.24 201.54 0.05 201.54 0.05 150.24 0.05 150.24 8,29,440 100 EWAC Alloys Limited 49,950 10 Bhilai Power Supply Company Limited 0.05 Kesun Iron and Steel Company Private Limited 10 9,500 As at 31-3-2017 per unit Face value Number of units LARSEN & TOUBRO Particulars Details of Investments - non-current (contd.) As at 31-3-2016 NOTE [5] 260 351.89 351.89 0.01 0.01 0.01 311.58 Carried forward Notes forming part of the Financial Statements (contd.) New product design and development 31.31 3.94 112.87 3.80 109.07 development New product design and 6.24 23.60 20.36 3.57 16.79 43.96 20.93 23.03 Technical know-how 48.41 25.14 23.03 48.17 64.70 297.49 326.29 158.91 201.25 Add: Intangible assets under development 125.04 138.58 215.00 36.74 2.55 175.67 340.04 5.51 (0.01) 314.25 Total 83.93 41.88 Cost 146.47 15.28 Book value Amortisation Cost crore Other intangible assets and intangible assets under development NOTE [4] The fair values of investment properties have been determined with the help of internal architectural department and independent valuer on a case to case basis. Fair value of properties that are evaluated by independent valuer 3012.75 crore (As at March 31, 2016: 2475.77 crore, as at April 1, 2015: 2319.23 crore). Valuation is based on government rates, market research, market trend and comparable values as considered appropriate. Fair value of investment property: 3412.55 crore as at March 31, 2017 (3220.45 crore as at March 31, 2016; 2972.86 crore as at April 1, 2015). C. b. NOTE [3] (contd.) Notes forming part of the Financial Statements (contd.) LARSEN & TOUBRO 4.90 1468.18 Class of assets Foreign Foreign As at 1-4-2016 133.74 183.21 5.51 (0.01) 6.58 182.15 Specialised softwares 2.55 As at As at 31-3-2017 31-3-2017 31-3-2016 currency Deductions fluctuation period For the Up to As at 31-3-2017 31-3-2016 currency Deductions fluctuation Additions Up to Amortisation crore Book value NOTE [4] (contd.) Notes forming part of the Financial Statements (contd.) 259 274.44 297.49 189.50 158.91 Add: Intangible assets under development 84.94 138.58 175.67 1.57 34.39 142.85 314.25 Additions during the year crore Class of assets Internal development 20.93 20.93 Technical know-how 17.99 16.84 1.15 6.58 1.57 6.58 - external Total Acquired Internal development Total 2015-16 2016-17 Acquired - external Specialised softwares 88.03 227.79 Total 1.38 15.41 23.03 19.05 116.26 1.57 182.15 Up to 1-4-2015 Foreign For the currency period fluctuation Deductions 31-3-2016 31-3-2016 1-4-2015 As at 19.09 Technical know-how 17.99 Foreign currency Additions fluctuation Deductions 31-3-2016 As at 1-4-2015 165.73 Specialised softwares Class of assets 3.94 3.94 Up to As at 31.79 83.93 25.14 13.96 11.18 109.07 66.10 As at 42.97 New product design and 3.68 6.24 16.79 49.47 48.41 1.57 133.74 development 1575.15 8.01 10 L&T Electricals and Automation Limited* 10 L&T Hydrocarbon Engineering Limited 10 74,38,796 1,00,00,50,000 40.36 1000.05 0.05 1000.05 0.05 1000.05 L&T Technology Services Limited (Face value reduced from 40 per share to 2 per share w.e.f April 1, 2016) (quoted) 2 9,12,90,392 0.05 942.62 300.00 L&T-Valdel Engineering Limited 10 23.89 Larsen & Toubro Infotech Limited (quoted) 1 14,37,50,000 119.68 134.25 134.25 Larsen & Toubro International FZE Larsen & Toubro Arabia LLC 300.00 Larsen & Toubro Hydrocarbon International Limited LLC 10 818.68 L&T Seawoods Limited 10 3,11,27,00,000 10 51,157 3112.70 0.05 3112.70 2729.30 0.05 0.05 10 0.05 L&T Solar Limited 10 47.16 47.16 47.16 10 1,99,95,50,000 1999.55 L&T Shipbuilding Limited 10 43,06,80,000 430.68 1999.55 818.68 1999.55 4,71,60,700 L&T Realty Limited AED 550500 21.85 L&T Cutting Tools Limited 1000 68,000 0.30 0.30 0.30 L&T Global Holdings Limited USD 100 80,000 53.16 0.67 21.85 Marine Infrastructure Developer Private Limited 0.01 Seawoods Realty Private Limited 10 10,000 0.01 Seawoods Retail Private Limited 10 10,000 0.01 11748.91 9995.56 10976.58 261 10 1147.40 21.85 10 SAR 1000 11.08 11.08 SAR 1000 450 0.68 0.68 0.68 Larsen & Toubro LLC USD 1 50,000 0.23 36,00,000 0.23 Larsen & Toubro (Saudi Arabia) LLC SAR 1000 625 1.06 1.06 Spectrum Infotech Private Limited 10 4,40,000 6.80 6.80 6.80 L&T Infrastructure Engineering Limited 0.23 Notes forming part of the Financial Statements (contd.) L&T Powergen Limited L&T Power Development Limited 0.82 0.82 27,82,736 10 L&T-Sargent & Lundy Limited 10.86 419.28 419.28 0.01 0.01 0.01 419.28 10.86 1,08,64,000 0.82 10 41,92,84,000 10 L&T Special Steels and Heavy Forgings Private Limited 13,000 10 L&T Samakhiali Gandhidham Tollway Limited 100 10 L&T Rajkot-Vadinar Tollway Limited [1000 (previous year: * 1000)] 362.41 362.41 362.41 L&T Transportation Infrastructure Limited 36,24,06,000 PNG Tollway Limited 2,24,22,660 6,04,355 74.83 207.19 74.22 74.37 203.12 592.26 5.99 5.77 L&T-MHPS Turbine Generators Private Limited 2.27 2.27 2.24 10 L&T-MHPS Boilers Private Limited 3793.11 3672.24 2722.24 0.04 0.04 0.04 37,750 10 Raykal Aluminum Company Private Limited 43.97 22.42 22.42 (ii) Other equity investments: L&T Power Limited 10 119.39 100 100 O o O o O 10 10 L&T Chennai-TADA Tollway Limited [1000 (previous year: * 1000)] Devihalli Hassan Tollway Limited (formerly known as L&T Devihalli Hassan Tollway Limited) [1000 (previous year: * 1000)] 10 L&T Sapura Shipping Private Limited 10 84.32 84.32 10 | | | | 570.00 L&T Infocity Limited L&T Metro Rail (Hyderabad) Limited L&T Natural Resources Limited 10 16.02 10 2,06,21,93,172 2062.19 20.31 19.82 10 0.05 620.00 L&T-MHPS Turbine Generators Private Limited 1188 0.01 119.39 119.39 11,93,91,000 10 L&T-MHPS Boilers Private Limited (previous year: 26000)] 2,600 10 L&T Krishnagiri Walajahpet Tollway Limited [26000 15.03 2696.48 25.50 2696.48 25.50 1746.48 25.50 4.00 2,55,00,000 31,28,69,096 10 L&T Infrastructure Development Projects Limited 15.03 15.03 1,50,30,000 10 L&T Howden Private Limited 100 10 L&T Halol-Shamlaji Tollway Limited [1000 (previous year: 1000)] 95.31 L&T Kobelco Machinery Private Limited NOTE [5] Details of Investments - non-current (contd.) Particulars 1,05,00,000 2 9.25 92,50,000 2 19.25 19.25 1,92,50,000 2 7.00 7.00 70,00,000 10.50 2 32.00 3,20,00,000 2 7.00 7.00 70,00,000 2 2286.00 3217.75 2467.75 crore crore 32.00 crore 2 8.00 Total (a)(i)+(ii)+(iii)+(iv) L&T Shipbuilding Limited L&T Aviation Services Private Limited (iv) Other equity investments 648.30 3931.30 2286.00 64,83,00,000 648.30 3277.80 10 L&T Realty Limited - 12% Convertible non-cumulative redeemable at par preference shares, May 26, 2025 17.50 1,75,00,000 2 L&T Uttaranchal Hydropower Limited - 10% Non-cumulative optionally convertible and redeemable at par preference shares, March 29, 2032 80,00,000 1.00 2 L&T Uttaranchal Hydropower Limited - 10% Non-cumulative optionally convertible and redeemable at par preference shares, February 20, 2032 18.70 1,87,00,000 2 L&T Uttaranchal Hydropower Limited - 10% Non-cumulative optionally convertible and redeemable at par preference shares, February 10, 2032 17.05 1,70,50,000 2 14.50 1,45,00,000 2 10,00,000 0.64 ₹ As at 31-3-2016 10 500.00 500.00 50,00,00,000 500.00 10 42.00 42.00 4,20,00,000 2 42.25 42.25 4,22,50,000 13,00,00,000 2 48.00 4,80,00,000 2 L&T Seawoods Limited -10% Non-cumulative, optionally convertible and redeemable at par preference shares, May 12, 2022 L&T Seawoods Limited -10% Non-cumulative, optionally convertible and redeemable at par preference shares, July 14, 2022 L&T Seawoods Limited -10% Non-cumulative, optionally convertible and redeemable at par preference shares, September 4, 2022 L&T Hydrocarbon Engineering Limited -10% Convertible non- cumulative redeemable preference shares, February 6, 2029 L&T Hydrocarbon Engineering Limited -12% Non-cumulative, optionally convertible, redeemable preference shares, October 19, 2030 L&T Hydrocarbon Engineering Limited -12% Non-cumulative, optionally convertible, redeemable preference shares, March 30, 2031 L&T Uttaranchal Hydropower Limited - 10% Non-cumulative, optionally convertible and redeemable at par preference shares, May 10, 2030 L&T Uttaranchal Hydropower Limited - 10% Non-cumulative, optionally convertible and redeemable at par preference shares, June 8, 2030 Carried forward 1,03,60,00,000 1036.00 1036.00 1036.00 2 L&T Seawoods Limited -10% Convertible non-cumulative redeemable preference shares, March 30, 2022 350.00 350.00 10 L&T Technology Services Limited -10% Convertible non-cumulative redeemable preference shares, September 21, 2024 400.00 48.00 As at 1-4-2015 130.00 10 As at 31-3-2017 As at 31-3-2017 per unit Face value Number of units LARSEN & TOUBRO L&T Uttaranchal Hydropower Limited - 10% Non-cumulative optionally convertible and redeemable at par preference shares, December 8, 2031 L&T Uttaranchal Hydropower Limited - 10% Non-cumulative, optionally convertible and redeemable at par preference shares, March 17, 2031 L&T Uttaranchal Hydropower Limited - 10% Non-cumulative optionally convertible and redeemable at par preference shares, May 1, 2031 L&T Uttaranchal Hydropower Limited - 10% Non-cumulative optionally convertible and redeemable at par preference shares, June 17, 2031 L&T Uttaranchal Hydropower Limited - 10% Non-cumulative optionally convertible and redeemable at par preference shares, July 19, 2031 L&T Uttaranchal Hydropower Limited - 10% Non-cumulative optionally convertible and redeemable at par preference shares, October 4, 2031 L&T Uttaranchal Hydropower Limited - 10% Non-cumulative, optionally convertible and redeemable at par preference shares, January 10, 2031 L&T Uttaranchal Hydropower Limited - 10% Non-cumulative, optionally convertible and redeemable at par preference shares, July 21, 2030 L&T Uttaranchal Hydropower Limited - 10% Non-cumulative, optionally convertible and redeemable at par preference shares, October 16, 2030 (iii) Preference shares considered equity as per terms (contd.) Brought forward Particulars 130.00 Details of Investments - non-current (contd.) Notes forming part of the Financial Statements (contd.) 2286.00 16.50 3217.75 16.50 2467.75 1,65,00,000 2 523.00 523.00 52,30,00,000 2 130.00 13,00,00,000 130.00 NOTE [5] 0.67 0.68 28.74 10 42,18,60,000 300.25 300.25 10 25,00,00,000 177.98 177.98 10 7,50,00,000 53.24 53.24 10 25,90,00,000 181.97 77.26 181.97 21,60,00,000 153.15 153.15 L&T Shipbuilding Limited - 9% Non-cumulative optionally convertible and redeemable at par preference shares, March 28, 2032 10 38,80,00,000 276.23 1324.91 1048.68 104.84 (iii) Preference share considered equity as per terms L&T Technology Services Limited -10% Convertible non-cumulative redeemable preference shares, February 14, 2024 262 10 10 10 400.00 77.26 10 (ii) Preference shares - (equity portion) L&T Shipbuilding Limited -12% Cumulative redeemable preference shares, October 22, 2028 Number of units Face value per unit ₹ As at 31-3-2017 31-3-2017 As at As at 31-3-2016 As at 1-4-2015 crore crore 11,00,00,000 crore 9,00,00,000 67.77 67.77 67.78 L&T Shipbuilding Limited -12% Non-convertible cumulative redeemable preference shares, June 24, 2029 10 5,00,00,000 37.06 37.06 37.06 L&T Shipbuilding Limited -12% Non-convertible cumulative redeemable at par preference shares, April 16, 2030 L&T Shipbuilding Limited - 9% Non-convertible, non-cumulative redeemable at par preference shares, May 28, 2030 L&T Shipbuilding Limited - 9% Non-convertible, non-cumulative redeemable at par preference shares, August 10, 2030 L&T Shipbuilding Limited - 9% Non-convertible, non-cumulative redeemable at par preference shares, September 29, 2030 L&T Shipbuilding Limited - 9% Non-convertible, non-cumulative redeemable at par preference shares, December 8, 2030 L&T Shipbuilding Limited - 9% Non-convertible, non-cumulative redeemable at par preference shares, February 4, 2031 10 L&T Sapura Offshore Private Limited 10 100 As at 31-3-2017 per unit ₹ Face value Number of units (c) Joint venture companies: Salzer Electronics Limited (quoted) Rishi Consfab Private Limited Magtorq Private Limited JSK Electricals Private Limited L&T-Chiyoda Limited Gujarat Leather Industries Limited (b) Associate companies: Particulars As at 264 NOTE [5] Notes forming part of the Financial Statements (contd.) I 263 13396.84 15004.95 16381.00 29.42 29.41 29.38 28.74 28.74 Details of Investments - non-current (contd.) As at 31-3-2017 31-3-2016 10 L&T-Gulf Private Limited Ahmedabad-Maliya Tollway Limited (formerly known as L&T Ahmedabad- Maliya Tollway Limited) [1000 (previous year: * 1000)] (i) Investments in fully paid equity instruments 30.07 4.42 4.42 16.33 2.70 4.42 4.42 4.50 2.12 10 10 4.42 9,000 100 | | | 10 10 7,35,000 10 crore crore crore As at 1-4-2015 1000 4.60 10.86 136.26 0.45 Secured long term loans and advances to related parties [KMPS] 0.01 Unsecured long term loans and advances to related parties: Subsidiary companies: Advances towards equity commitment [Note 38(B)] Inter-corporate deposits [Note 37 & 38(A)(i)] Joint venture: Inter-corporate deposits [Note 37 & 38(A)(i)] Other secured loans, considered good: 6.35 512.00 5.25 1921.00 0.45 518.35 Loans against mortgage of house property Other inter-corporate deposits 0.74 Other unsecured loans, considered good: Advance recoverable in cash Other loans unsecured, doubtful: Doubtful other loans and advances 2.28 Less: Allowance for doubtful advances 2.28 NOTE [7] Other financial assets - non-current 1167.22 1926.25 0.74 0.45 0.45 Book value 17246.33 17719.68 15737.41 (c) Aggregate amount of impairment in value of investments is 966.46 crore (As at 31-3-2016: 151.46 crore, as at 1-4-2015: 16.46 crore) * The scheme of arrangement between L&T Valves Limited and L&T Electrical & Automation Limited was approved by National Company Law Tribunal on April 27, 2017 with appointed date as November 1, 2016. Pursuant to the scheme L&T Electrical & Automation Limited issued 73,88,796 shares to Larsen & Toubro Limited as a consideration towards transfer of certain assets by L&T Valves Limited. The value of shares issued is derived based on fair value of assets transferred to the total value of assets of L&T Valves Limited as at appointed date. Accordingly the value of investment in L&T Electrical and Automation Limited was increased by 40.31 crore and reduced in L&T Valves Limited by ₹ 40.31 crore during the year 2016-17. 265 Notes forming part of the Financial Statements (contd.) NOTE [6] Financial Assets: Loans - non-current As at 31-3-2017 As at 31-3-2016 Less: Provision for doubtful security deposits As at 1-4-2015 crore crore crore crore crore Unsecured security deposits, considered goods: 84.20 90.29 crore 66.80 Unsecured security deposits, doubtful: 0.45 0.45 Particulars (b) Aggregate amount of unquoted investments; 0.03 1.24 0.23 Premium receivable on financial guarantee contracts 3.01 5.85 12.09 500.33 474.09 346.46 266 Notes forming part of the Financial Statements (contd.) 7(a) Particulars of cash and bank balances not available for immediate use Sr. 2.38 no. 2. 3. NOTE [8] Particulars Amount received (including interest accrued thereon) from customers of property development business – to be handed over to housing society on its formation Contingency deposits (including interest accrued thereon) received from customers of property development business towards their sales tax liability - to be refunded/adjusted depending on the outcome of the legal case Other bank balances (including interest accrued thereon) not available for immediate use being in the nature of security offered for bids submitted, loans availed etc. Total Less: Amount reflected under current assets [Note 13] Amount reflected under other financial assets - non-current [Note 7] Other non-current assets Capital advances: Particulars 1. 1770.54 Embedded derivative receivables 75.59 2.85 2.85 779.72 1986.84 371.00 2357.84 572.71 2.36 3.00 1.24 5.36 0.02 2797.52 2.28 2.28 0.14 258.55 3002.86 As at 31-3-2016 As at 1-4-2015 Particulars Cash and bank balances not available for immediate crore * crore crore use [Note 7(a)] 1000000 223.56 273.76 98.18 367.68 As at 31-3-2017 8060.92 7468.59 31883.81 55.94 Total (A) = (a)+(b)+(c)+(d) 56.04 19171.71 56.04 173.30 18745.91 17400.49 Notes forming part of the Financial Statements (contd.) NOTE [5] Details of Investments - non-current (contd.) Particulars (B) Investments in preference shares of subsidiary companies (Fair value debt portion): 55.94 LARSEN & TOUBRO Face value per unit As at 31-3-2017 As at 31-3-2017 31-3-2016 As at crore crore As at 1-4-2015 crore L&T Shipbuilding Limited -12% Cumulative redeemable preference shares, October 22, 2028 10 9,00,00,000 35.23 Number of units 30.84 117.26 55.94 8.26 7.17 - Total (c) = (i) + (ii) 2730.25 3680.50 3800.28 (d) Other companies: International Seaport Dredging Limited 10000 BBT Elevated Road Private Limited 10 | | $| 15,899 1,00,000 | O 0.10 0.10 Utmal Multi purpose Service Co-operative Society Limited (B Class) (non-trade investments) [30000 (previous year: 30000)] 100 300 Astra Microwave Products Limited (quoted) 2 Tidel Park Limited [Note 45(f)] 10 40,00,000 0.10 29.91 L&T Shipbuilding Limited -12% Non-convertible cumulative redeemable preference shares, June 24, 2029 10 21,60,00,000 68.71 61.73 L&T Shipbuilding Limited - 9% Non-cumulative optionally convertible and redeemable at par preference shares, March 28, 2032 Total - (B) Total investments non-current (A)+(B) 10 38,80,00,000 112.28 605.10 19776.81 441.95 19187.86 45.65 17446.14 10 Details of quoted/unquoted investments: As at 31-3-2017 crore As at 31-3-2016 crore As at 1-4-2015 crore (a) Aggregate amount of quoted investments and market value thereof; Book value 2530.48 1468.18 1708.73 Market value Particulars L&T Shipbuilding Limited - 9% Non-convertible, non-cumulative redeemable at par preference shares, February 4, 2031 75.02 83.48 5,00,00,000 18.53 16.38 15.74 L&T Shipbuilding Limited -12% Non-convertible cumulative redeemable at par preference shares, April 16, 2030 10 11,00,00,000 37.41 33.65 L&T Shipbuilding Limited - 9% Non-convertible, non-cumulative redeemable at par preference shares, May 28, 2030 10 42,18,60,000 142.09 127.80 L&T Shipbuilding Limited - 9% Non-convertible, non-cumulative redeemable at par preference shares, August 10, 2030 10 25,00,00,000 82.81 74.45 L&T Shipbuilding Limited - 9% Non-convertible, non-cumulative redeemable at par preference shares, September 29, 2030 10 7,50,00,000 24.56 22.08 L&T Shipbuilding Limited - 9% Non-convertible, non-cumulative redeemable at par preference shares, December 8, 2030 10 25,90,00,000 Secured Unsecured Forward contract receivables Current tax receivable (net) 8.15% Government of India Bonds 2022 100 20,00,000 21.65 20.91 Advances recoverable other than in cash 8.33% Government of India Bonds 2026 100 75,00,000 81.86 79.33 78.94 83.75 8.28% Government of India Bonds 2027 24,00,000 25.84 128.74 103.92 9.20% Government of India Bonds 2030 8.32% Government of India Bonds 2032 100 1,77,84,000 204.56 467.16 291.77 100 15,00,000 100 16.47 100 5.23 1148.71 22.49 1022.67 23.00 942.82 1171.46 1045.16 965.82 5031.03 2680.28 3041.48 6982.08 4803.32 5518.05 5.22 Number of units per unit As at 31-3-2017 As at 31-3-2017 As at 31-3-2016 As at 1-4-2015 crore crore crore 8.28% Government of India Bonds 2032 7.16% Government of India Bonds 2023 100 5,00,000 5.36 Face value 22.75 15.73 6.90% Oil Mktg Cos GOI Special Bonds 2026 1510.75 7.59% Government of India Bonds 2029 Total - (A) (B) Debentures and bonds (quoted) (i) Subsidiary companies: L&T Finance Limited - 10.24% Secured redeemable non-convertible Debenture, September 17, 2019 1000 2,15,770 22.75 22.49 23.00 Total - - (i) 22.75 1077.88 22.49 (ii) Other debentures and bonds: 6.86% IIFCL Tax Free Bonds March 26, 2023 268 7.18% IRFC Ltd. Tax Free Bonds February 19, 2023 10.75% The Tata Power Co. Ltd. NCD August 21, 2072 8.00% Indian Overseas Bank Bonds March 13, 2016 8.20% PFC Ltd. Tax Free Bonds February 1, 2022 Carried forward 1000 27.68 1000 349.35 1000000 1,037 132.36 128.90 23.00 15.85 102.36 779.59 100 100 13,00,000 12.71 12.44 12.05 9.23% Government of India Bonds 2043 100 2,45,00,000 298.13 348.34 8.83% Government of India Bonds 2023 100 1,00,00,000 246.07 100 353.33 8.17% Government of India Bonds 2044 100 32.10 8.27% Government of India Bonds 2020 7.59% Government of India Bonds 2026 100 266.92 100 10,00,000 10.65 9.23% Government of India Bonds 2043 crore 1510.75 20.81 779.59 Inventories (at cost or net realisable value whichever is lower) Particulars Raw materials [includes goods-in-transit 1.86 crore 1.15 1.63 66.06 2108.85 36.01 57.46 1713.30 1365.28 47.76 2222.67 36.24 1786.70 crore 25.85 1450.22 As at 31-3-2016 As at 1-4-2015 crore 328.80 crore 356.63 * crore 438.52 (As at 31-3-2016: 7.10 crore, as at 1-4-2015: 19.96 crore)] Components [includes goods-in-transit 16.30 crore 264.40 As at 31-3-2017 304.27 crore As at 1-4-2015 NOTE [9] LARSEN & TOUBRO * crore As at 31-3-2017 As at 31-3-2016 As at 1-4-2015 23.51 21.50 20.72 23.09 20.79 16.73 crore 342.12 228.55 388.72 286.85 266.00 165.16 188.67 190.41 223.56 1077.88 75.59 As at 31-3-2017 As at 31-3-2016 244.56 394.34 98.18 7.98 crore, as at 1-4-2015: 281.83 304.82 6.48 201.11 1762.86 1955.11 2260.77 Note: During the year 17.92 crore (previous year: 35.36 crore) was recognised as expense towards write-down of inventory. 267 Notes forming part of the Financial Statements (contd.) NOTE [10] Financial Assets: Investments - current Particulars (A) Government and trust securities (B) Debentures and bonds (C) Mutual funds Details of current investments Particulars (A) Government and trust securities (quoted): As at 31-3-2017 As at 31-3-2016 As at 1-4-2015 crore crore crore crore (As at 31-3-2016: crore 7.79 3.31 (i) Subsidiary companies (ii) Others Property development related work-in-progress Construction materials [includes goods-in-transit [Note 48(c)(iv)] 61.59 117.85 76.27 55.70 crore (As at 31-3-2016: 113.42 crore, as at 1-4-2015: 74.34 crore)] Manufacturing work-in-progress 372.18 571.94 Finished goods 221.52 161.68 360.01 * 17.73 crore)] Loose tools 261.20 149.78 170.12 3.59 crore (As at 31-3-2016: 2.69 crore, as at 1-4-2015: 6.34 crore)] Stores and spares [includes goods-in-transit 71.72 (As at 31-3-2016: 34.80 crore, as at 1-4-2015: * 35.95 crore)] 161.13 159.77 169.68 Stock-in-trade [includes goods-in-transit 18.77 crore Debenture redemption reserve (DRR): The Company has issued redeemable non-convertible debentures and created DRR out of the profits of the Company in terms of the Companies (Share capital and Debenture) Rules, 2014 (as amended). The Company is required to maintain a DRR of 25% of the value of debentures issued, either by a public issue or on a private placement basis. The amounts credited to the DRR may not be utilised by the company except to redeem debenture. # Λ NOTE [19] General Reserve: The Company created a General Reserve in earlier years pursuant to the provisions of the Companies Act wherein certain percentage of profits were required to be transferred to General Reserve before declaring dividends. As per Companies Act 2013, the requirement to transfer profits to General Reserve is not mandatory. General Reserve is a free reserve available to the Company. Capital Reserve: It represents the gains of capital nature which mainly includes the excess of value of net assets acquired over consideration paid by the Company for business amalgamation transaction in earlier years. 45826.15 Other equity (contd.) NOTE [18] Notes forming part of the Financial Statements (contd.) 38366.62 (125.58) 78.62 Financial Liabilities: Borrowings - non-current 41949.01 * 277 crore Particulars Redeemable non-convertible fixed rate debentures [Note 19(a)(i) & (ii)] 76.03 crore crore Total As at 1-4-2015 Secured Unsecured *crore As at 31-3-2017 crore crore crore crore Total As at 31-3-2016 Secured Unsecured Total Secured Unsecured crore 65.78 352.60 (110.37) Debt instruments through Other Comprehensive Income 242.23 406.51 356.76 Debenture redemption reserve^ 177.25 450.40 (141.56) 275.26 (98.01) Deferred employee compensation expense Employee share options outstanding Employee share options (net) [Note 1(r)] 10.52 7963.16 crore 153.20 10.52 8164.72 10.52 8318.85 408.55 Securities premium account [Note 1(p)] 308.84 General reserve# 25373.60 25216.49 (35.83) 144.11 (99.17) (26.41) (20.76) (15.07) 202.60 (58.49) Cost of hedging reserve Cash flow hedging reserve [Note 1(m)] Hedging reserve [Note 1(m)] 4522.65 400.01 25054.47 7710.27 4.87 0.55 11225.53 Foreign currency translation reserve [Note 1(s)(iii)] Retained earnings 0.73 2179.48 2588.03 2764.78 408.49 April 10, 2012 1000000 1. As at 31-3-2017 Date of allotment Face value per debenture (*) no. Sr. 19(a)(ii) Interest for the year 2016-2017 As at 1-4-2015 crore 408.49 Redeemable at face value at the end of 10th year from the date of allotment. immovable property at certain on 31-3-2017 debentures outstanding as Terms of repayment for crore 273.39 As at 31-3-2016 crore 273.48 As at 1-4-2015 Interest for the year 2016-2017 Capital reserve* crore 1383.51 278 Redeemable at face value at the end of 10th year from the date of allotment. Redeemable at face value at the end of 10th year from the date of allotment. Terms of repayment for debentures outstanding as at 31-3-2017 8.95% p.a. payable annually Unsecured redeemable non-convertible fixed rate debentures (privately placed): 9.75% p.a. payable annually 322.35 322.51 322.52 May 26, 1000000 2. crore 273.37 2011 408.31 2180.12 2588.43 Security: The debentures are secured by way of a first charge having pari passu rights on the locations and part of a movable property of a business division, both present and future. As at 31-3-2016 crore 408.31 0.08 0.08 4422.51 4422.51 3230.58 1190.86 1190.86 1201.78 1201.78 3230.58 Term loan from banks [Note 19(c)] Sales tax deferment loan [Note 19(d)] Finance lease 0.675% Foreign currency convertible bonds [Note 19(b)] 111.30 111.30 110.32 110.32 113.61 113.61 Redeemable non-convertible inflation linked debentures [Note 19(a)(iii)] 1716.68 2125.17 0.28 0.28 1089.81 1089.81 5103.91 0.62 5103.91 0.62 As at 31-3-2017 crore 408.55 January 5, 2009 1000000 Date of allotment Face value per debenture (*) Secured redeemable non-convertible fixed rate debentures (privately placed): 19(a)(i) 9.15% p.a. payable annually 408.49 8022.32 8430.81 7904.16 408.31 408.55 6725.73 7134.28 0.07 0.07 0.20 0.20 8312.47 As at 1-4-2015 * crore 13,200 25,200 32,250 32,250 59,550 153.20 Brought forward (ii) Other debentures and bonds: crore crore crore As at 1-4-2015 As at 31-3-2016 31-3-2017 As at As at 31-3-2017 per unit ₹ 8.46% PFC Ltd. Tax Free Bonds August 30, 2028 Face value LARSEN & TOUBRO Particulars Details of current investments (contd.) NOTE [10] Notes forming part of the Financial Statements (contd.) As at 31-3-2016 crore 1259.94 As at 1-4-2015 crore 22.15 46.61 Number of units 1.44% Inflation Indexed Bonds June 5, 2023 207.19 203.12 70 10.11 10.10 10.23 732 1000000 79,162 1000 2.43 1000000 29.20 1000000 10000000 10.05% HDB Financial Services Ltd. Bonds SR-I/1/5 December 20, 2023 10.20% HDB Financial Services Ltd. Bonds August 9, 2022 8.41% NTPC Ltd. Tax Free Bonds SR-1A December 16, 2023 8.46% REC Ltd. Tax Free Bonds SR-3B August 29, 2028 ECL Finance Ltd. NCD SR-J5K403 November 4, 2015 ECL Finance Ltd. NCD SR-L5L402 December 15, 2015 Edelweiss Finance & Investments Ltd. NCD SR-A6A501 January 6, 2016 Edelweiss Finance & Investments Ltd. NCD SR-A6A502 January 8, 2016 Edelweiss Finance & Investments Ltd. NCD SR-A6A503 January 11, 2016 Edelweiss Finance & Investments Ltd. NCD SR-K5L401 December 17, 2015 8.70% PNB Housing Finance Ltd. Bonds SR-III November 24, 2024 7.40% Syndicate Bank TI-2 SR-8 NCD April 20, 2015 ECL Finance Ltd. NCD SR-D6D502A- April 26, 2016 ECL Finance Ltd. NCD SR-E6E501A - May 11, 2016 ECL Finance Ltd. NCD SR-C7C601A March 22, 2017 ECL Finance Ltd. NCD SR-C7C601B March 22, 2017 ECL Finance Ltd. NCD SR-C7C601C March 22, 2017 43.12 47.49 51.62 50,00,000 100 31.50 31.50 3.83 27 1000000 592.26 39.33 9.92 33.59 6.49 crore 305.29 crore crore 266.08 crore crore 266.62 3.69 3.31 5.69 3.69 3.31 5.69 crore parties: Inter-corporate deposits [Note 37 & 38(A)(i)] Associate companies Advances Joint ventures 1595.67 1984.69 1000.86 3.65 39.51 Inter-corporate deposits [Note 37 & 38(A)(i)] 18.20 Subsidiary companies As at 1-4-2015 As at 31-3-2016 As at 31-3-2017 9.69 NOTE [13] Financial Assets - current: Other bank balances As at 31-3-2017 Particulars Fixed deposits with banks Earmarked balances with banks - unclaimed dividend Margin money deposits with banks Cash and bank balances not available for immediate use [Note 7(a)] 272 165.16 188.67 190.41 1599.97 1494.43 255.84 LARSEN & TOUBRO Notes forming part of the Financial Statements (contd.) NOTE [14] Financial Assets: Loans - current Particulars Unsecured security deposits, considered good Unsecured security deposits, doubtful Less: Provision for doubtful security deposits Unsecured long term loans and advances to related 4.69 105.04 51.37 10000000 10.86 100 1000000 264.42 2,500 1000000 - Total (B)=(i) + (ii) 7.18% IRFC Ltd. Tax Free Bonds February 19, 2023 Total - (ii) 6.86% IIFCL Tax Free Bonds March 26, 2023 Indiabulls Housing Finance Limited 9 LOA June 28, 2018 1000 8.60% LTIDPL NCD December 26, 2016 10000000 ECL Finance Ltd. NCD SR-B7B601B February 15, 2017 23.12 10000000 22.46 2500000 23.68 10000000 25.24 25 10000000 23.12 1000 2,50,000 30,00,000 28.64 10 HSBC Cash Fund - Growth LIC Nomura MF Liquid Fund - Growth HDFC FRIF-STF - WP - Growth JP Morgan India Liquid Fund - Super IP - Growth SBI Premier Liquid Fund - Regular Plan HDFC Liquid Fund - Growth (C) Mutual funds (unquoted): crore 31-3-2017 As at As at 31-3-2017 per unit Face value Number of units Particulars Details of current investments (contd.) NOTE [10] Notes forming part of the Financial Statements (contd.) 269 965.82 1171.46 1045.16 942.82 359.67 351.08 1148.71 1022.67 27.88 24.40 51.35 25 24.40 24.28 10000000 24.28 10000000 24.28 10000000 28.90 10000000 32.56 10000000 3.17 ECL Finance Ltd. NCD SR-C7C601D March 22, 2017 1000000 1000000 26.89 10000000 27.23 10000000 29.88 10000000 29.73 26.31 10000000 24.16 15.50 10000000 24.28 ECL Finance Ltd. NCD SR-C7C601E March 22, 2017 25 10000000 24.40 25 10000000 24.40 25 10000000 Edelweiss Finvest Private Limited SR-B8B702A BR NCD March 26, 2018 Edelweiss Finvest Private Limited SR-B8B702B BR NCD March 26, 2018 Edelweiss Finvest Private Limited SR-B8B702C BR NCD March 26, 2018 Edelweiss Finvest Private Limited SR-B8B702D BR NCD March 26, 2018 Edelweiss Finvest Private Limited SR-B8B702E BR NCD March 26, 2018 Edelweiss Finance & Investments Ltd. NCD K6K501A November 4, 2016 Edelweiss Finance & Investments Ltd. NCD SR-K6K502A November 14, 2016 ECL Finance Ltd. NCD SR-B7B601A February 15, 2017 24.29 22 10000000 ECL Finance Ltd. NCD SR-A8L601C 27.61 25 10000000 ECL Finance Ltd. NCD SR-A8L601B 27.61 10000000 ECL Finance Ltd. NCD SR-A8L601A 24.90 10000000 ECL Finance Ltd. NCD SR-C7C601F March 22, 2017 24.25 10000000 10000000 Other secured loans, considered good: Loans against mortgage of house property Other inter-corporate deposits 0.24 14,86,958 93,29,65,803 186.30 0.29 186.59 92,95,62,061 19,16,784 93,14,78,845 185.91 0.39 186.30 (c) Terms/rights attached to equity shares: 274 The Company has only one class of share capital, i.e., equity shares having face value of 2 per share. Each holder of equity share is entitled to one vote per share. Notes forming part of the Financial Statements (contd.) NOTE [17] Equity share capital (contd.) Issued, subscribed and fully paid up equity shares outstanding at the end of the year (d) Shareholder holding more than 5% of equity shares as at the end of the LARSEN & TOUBRO As at 31-3-2017 Name of the shareholders Number of Shareholding shares % As at 31-3-2016 Number of Shareholding shares As at 1-4-2015 Number of Shareholding Life Insurance Corporation of India 14,64,24,938 15.69 L&T Employees Welfare Foundation year: 93,14,78,845 Add: Shares issued on exercise of employee stock options during the year Issued, subscribed and fully paid up equity shares outstanding at the beginning of the year As at 1-4-2015 Number of shares crore 325.00 1,62,50,00,000 325.00 1,62,50,00,000 325.00 Authorised: Equity shares of 2 each 1,62,50,00,000 Issued, subscribed and fully paid up: Equity shares of 2 each 93,29,65,803 186.59 93,14,78,845 186.30 92,95,62,061 185.91 (b) Reconciliation of the number of equity shares and share capital: 2016-17 Particulars Number of shares crore 2015-16 Number of shares crore 11,47,52,281 crore 12.30 % 15.72 57,93,042 1.16* 77,08,842 1.54* 0.675% 5 years & 1 day US$ denominated foreign currency convertible bonds (FCCB) ## 63,46,986 1.27** 63,46,986 1.27** 63,46,986 1.27** 0.85* * ** The equity shares will be issued at a premium of on the exercise of options by the bond holders 146.71 crore (as at 31-3-2016: 203.97 crore and as at 1-4-2015: 278.09 crore) 1215.13 crore (as at 31-3-2016: 1215.13 crore and as at 1-4-2015: 1215.13 crore) # Note 17(h) for terms of employee stock option schemes ## Note 19(b) for terms of foreign currency convertible bonds (f) The aggregate number of equity shares allotted as fully paid up by way of bonus shares in immediately preceding five years ended March 31, 2017 are 30,82,94,576 (previous period of five years ended March 31, 2016: 30,82,94,576 shares) (g) The aggregate number of equity shares issued pursuant to contract, without payment being received in cash in immediately preceding last five years ended on March 31, 2017 - Nil (previous period of five years ended March 31, 2016: Nil) (h) Stock option schemes * crore 153.20 The equity shares will be issued at a premium of 42,47,360 Employee stock options granted and outstanding # crore (at face value) shares % 15,55,22,285 16.73 12.32 11,16,06,174 12.01 Administrator of the Specified Undertaking of the Unit Trust of India 6,11,02,860 6.55 7,59,26,462 8.15 7,59,25,962 8.17 (e) Shares reserved for issue under options outstanding as at the end of the year on un-issued share capital: As at 31-3-2017 Particulars Number of equity shares * crore (at face value) to be issued as fully paid As at 31-3-2016 Number of equity shares to be issued as fully paid crore (at face value) As at 1-4-2015 Number of equity shares to be issued as fully paid 14,64,19,088 11,47,52,281 As at 31-3-2016 Number of shares shares crore Advances recoverable in cash Premium receivable on financial guarantee contracts 706.04 3.96 67.49 597.18 5.83 46.02 46.91 777.49 1188.73 6.82 649.03 1082.35 528.91 878.32 Joint venture companies 15.54 81.59 133.57 12.10 Embedded derivative receivable Doubtful advances: Deferred credit sale of ships Other loans and advances 26.97 131.35 158.32 Less: Allowance for doubtful loans and advances 8.76 Associate companies Subsidiary companies 482.00 0.79 0.89 75.62 70.00 0.24 76.41 70.89 Other unsecured loans, considered good: Others 0.01 1919.41 0.04 2432.26 0.08 1381.61 NOTE [15] Other current financial assets As at 31-3-2017 Particulars crore crore As at 31-3-2016 crore crore As at 1-4-2015 crore crore Advances to related parties: 158.32 2054.63 27.55 133.74 7286.65 6158.59 Balances with excise customs port trust 86.52 91.20 3701.94 4188.96 86.75 3168.79 Advances recoverable other than in cash Government grants receivable Others NOTE [17] Equity share capital (a) Share capital authorised, issued, subscribed and paid up: Particulars 45.57 45.57 1.49 5.12 49.73 6.51 33263.70 33481.95 28454.83 As at 31-3-2017 Number of 8027.61 As at Unbilled revenue including retention money 10.24 161.29 161.29 1880.49 25.99 136.32 162.31 162.31 1428.09 273 Notes forming part of the Financial Statements (contd.) NOTE [16] Other current assets Particulars As at 31-3-2017 As at 31-3-2016 As at 1-4-2015 crore crore crore Due from customers (construction and project related activity) Due from customers (property development activity) [Note 48(c)] 21329.29 71.28 21854.21 18935.75 48.71 31-3-2016 25 crore 275 Options can be exercised anytime within a period of 7 years from the date of grant and would be settled by way of issue of equity shares. Management has discretion to modify the exercise period. The grant of options to the employees under the stock option schemes is on the basis of their performance and other eligibility criteria. The options are vested equally over a period of 4 years [5 years in the case of series 2006(A)], subject to the discretion of the management and fulfillment of certain conditions. B. A. As at 1-4-2015 2202.26 175.80 26.90 12.11 90.81 Notes forming part of the Financial Statements (contd.) 168.77 As at 1-4-2015 2.43 1.78 456.40 365.13 crore 1590.10 1823.24 crore As at 31-3-2016 As at 31-3-2017 Fixed deposits with banks (maturity less than 3 months) crore 2329.40 NOTE [17] Equity share capital (contd.) (ii) The details of the grants under the aforesaid schemes under various series are summarised below: 5 25,200 25,200 32,250 32,250 59,550 the beginning of the year Options granted and outstanding at 4 2006 (A) 2006 2003 (B) 2002 (A) 2016-17 2015-16 2016-17 2015-16 2016-17 2015-16 2016-17 2015-16 2016-17 2015-16 2016-17 2015-16 2016-17 2015-16 2.30 2.30 2.30 2.30 2.30 2.30 11.70 11.70 11.70 11.70 400.70 400.70 400.70 400.70 1-6-2000 19-4-2002 23-5-2003 onwards 23-5-2003 onwards 1-9-2006 onwards 1-7-2007 onwards 23-5-2004 onwards 23-5-2004 onwards 1-9-2007 onwards 1-7-2008 onwards 19-4-2003 19-4-2002 19-4-2003 1-6-2001 Vesting commences on 13 Grant dates 2 Grant price - () 1 по. Series reference Sr. 2003 (A) 2002 (B) 2000 276 Cash on hand Options lapsed during the year Cheques and drafts on hand Balance with banks crore crore As at 31-3-2017 Considered good Unsecured: Secured, considered good Particulars Financial Assets - current: Trade receivables NOTE [11] Notes forming part of the Financial Statements (contd.) 271 As at 31-3-2016 crore 3041.48 5031.03 2476.57 2123.04 2476.57 2123.04 1951.05 1951.05 * crore crore As at 1-4-2015 As at 31-3-2016 As at 31-3-2017 * crore 2680.28 As at 1-4-2015 crore crore Financial Assets - current: Cash and cash equivalents NOTE [12] 16790.00 18967.75 19919.97 16785.29 18967.25 19919.97 1008.78 1568.79 1916.66 Less: Allowance for doubtful debts 17794.07 20536.04 21836.63 1008.78 1568.79 1916.66 Considered doubtful 16785.29 18967.25 19919.97 4.71 0.50 crore Particulars 6 Options granted during the year 7 Particulars no. Sr. viii. The fair value has been calculated using the Black-Scholes Option Pricing Model and the significant assumptions and inputs to estimate the fair value of options granted during the year are as follows: LARSEN & TOUBRO Equity share capital (contd.) NOTE [17] Notes forming part of the Financial Statements (contd.) (vii) Weighted average fair values of options granted during the year is 1056.73 (previous year: 965.39) per option. (vi) During the year, the Company has recovered 13.81 crore (previous year: 14.28 crore) from its subsidiary companies towards the stock options granted to their employees, pursuant to the Employee Stock Option Schemes. B. Expense on Employee Stock Option Schemes debited to the Statement of Profit and Loss during 2016-17 is ₹60.35 crore (previous year: 59.18 crore) net of recoveries of 1.42 crore (previous year: ₹ 1.16 crore) from its group companies towards the stock options granted to deputed employees, pursuant to the employee stock option schemes (Note 34). The entire amount pertains to equity-settled employee share-based payment plans. (A) Weighted average risk-free interest rate A. In respect of stock options granted pursuant to the Company's stock options schemes, the fair value of the options is treated as discount and accounted as employee compensation over the vesting period. (F) Options exercisable at the end of the year out of (E) supra (iv) Weighted average share price at the date of exercise for stock options exercised during the year is ₹1386.19 (previous year: 1543.13) per share. 364.76 28,52,010 359.04 21,51,241 354.10 57,93,042 347.41 42,47,360 (E) Options granted and outstanding at the end of the year 368.74 (v) (B) Weighted average expected life of options (C) Weighted average expected volatility (D) Weighted average expected dividends over the life of the option As at 31-3-2016 crore crore As at 31-3-2017 crore Equity component of foreign currency convertible bonds [Note 60(J)] Particulars Other equity (k) The Board of Directors has recommended for approval of shareholders, the issue of bonus equity shares in the ratio of 1:2 (one bonus equity share of 2 each for every 2 equity shares of 2 each held). On May 29, 2017, the Board of Directors has recommended the final dividend of 21 per equity share on the pre-bonus share capital for the year ended March 31, 2017 subject to approval from shareholders. On approval, the total dividend payment based on number of shares outstanding as at March 31, 2017 is expected to be 1959.23 crore and the payment of dividend distribution tax is expected to be 316.31 crore. NOTE [18] (j) During the year ended March 31, 2017, the Company paid the final dividend of 18.25 per equity share for the year ended March 31, 2016 amounting to 1701.51 crore and dividend distribution tax of 141.20 crore. The Company continues its policy of a conservative capital structure which has ensured that it retains the highest credit rating even amidst an adverse economic environment. Low gearing levels also equip the Company with the ability to navigate business stresses on one hand and raise growth capital on the other. This policy also provides flexibility of fund raising options for future, which is especially important in times of global economic volatility. The gross debt equity ratio is 0.23:1 (as at 31-3-2016: 0.33:1 and as at 1-4-2015: 0.34:1) ix. The balance in share options (net) account as at March 31, 2017 is ₹ 177.25 crore (previous year: 242.23 crore), including 117.36 crore (previous year: ₹ 155.87 crore) for which the options have been vested to employees as at March 31, 2017. (i) Capital management: Expected volatility is based on the historical volatility of the Company's share price applicable to the total expected life of each option. 282.57 per share 1211.45 per option 62.69 per option 30.52% 7.66% 3.86 years 2015-16 * 327.51 per share 74.52 per option 1355.66 per option 2075.83 6.72% 4.08 years 30.79% 2016-17 (G) Method used to determine expected volatility (F) Weighted average exercise price (E) Weighted average share price 4,94,281 370.25 5,32,274 (D) Options lapsed during the year Nil Nil Nil Nil Nil Nil Nil 17,44,680 25,10,571 3,51,439 4,30,461 47,178 75,692 96,458 1,76,584 2,57,366 17,46,787 23,34,008 59,550 47,178 Weighted average remaining 9 Options yet to vest Options vested Of which 59,550 47,178 47,178 4,27,131 5,26,919 1,76,584 2,57,366 34,91,467 48,44,579 13,200 25,200 32,250 32,250 59,550 the end of the year Options granted and outstanding at 8 1,47,226 1,68,154 45,035 36,020 12,82,697 17,12,610| 59,550 47,178 47,178 5,26,919 5,85,284 2,57,366 3,04,656 48,44,579 66,54,724 41,662 40,611 35,747 11,270 4,54,865 4,42,400 89,100 1,50,400 3,84,450 3,44,865 12,000 Options exercised during the year Nil Book value (accounted based on NAV) 4.98 5.18 Nil 3.48 3.61 366.57 19,16,784 358.97 14,86,958 |(C) Options allotted during the year 282.57 4,95,265 327.51 4,73,550 (B) Options granted during the year 362.74 77,08,842 354.10 57,93,042 | (A) Options granted and outstanding at the beginning of the year (₹) Weighted average exercise price No. of stock options Weighted average exercise price (₹) options No. of stock Particulars 2015-16 2016-17 contractual life of options (in years) (iii) The number and weighted average exercise price of stock options are as follows: Nil (b) Aggregate amount of unquoted current investments; Terms: (a) Aggregate amount of quoted current investments and market value thereof; Book value 26.55 53,87,931 1000 DSP BlackRock Small and Midcap Fund - Reg - Growth 5.23 10 DSP BlackRock India Tiger Fund - Reg - Growth 10.19 10 L&T Resurgent India Corporate Bond Fund - Direct Plan - Growth 12.44 IDFC Sterling Equity Fund - Regular Plan - Growth 10 307.59 98,79,555 10 ICICI Prudential Flexible Income - Regular Plan - Growth 487.77 10 JM Arbitrage Advantage Fund - Direct Plan - Bonus 14.57 14.24 10 20.01 L&T Business Cycles Fund - Direct Plan - Growth 10 10.42 BNP Paribas Overnight Fund - Growth DWS Ultra Short Term Fund - Direct Plan - Growth 100.05 400.37 1000 Reliance Liquid Fund - TP - Growth 50.03 10 DWS Treasury Fund - Cash - Reg - Growth 100.04 1000 ICICI Prudential Money Market Fund - Regular Plan - Growth 100.05 1000 UTI Liquid Fund Cash Plan - IP - Growth 100.04 1000 Taurus Liquid Fund - Super IP - Growth 50.01 3,16,046 10 100.05 100.03 4,01,559 10 Indiabulls Liquid Fund - Growth 1000 10 100.07 100.03 360.94 10 JM Money Manager Fund - Super Plus Plan - Bonus 118.47 ☐ 10 (i) DWS Short Maturity Fund - Direct Plan - Annual Bonus 10,33,31,866 358.46 1000 Reliance Medium Term Fund Direct Plan - Growth DWS Treasury Fund - Investment Plan - Direct Plan - Bonus 100.06 50.02 10 56.39 1,99,47,661 10 50.02 10 11,78,787 300.08 1000 50.02 crore 10 10 21.49 IDFC Cash Fund - Reg - Growth 38,39,652 100 L&T Emerging Businesses Fund - Direct Plan - Growth Birla Sun Life Cash Plus - Regular Plan - Growth Pramerica Liquid Fund - Growth 20.01 1000 Principal Cash Mgmt Fund - Regular Plan - Growth 37.55 10 DWS Ultra Short Term Fund - Direct Plan - Annual Bonus 100.05 100.13 1951.09 76,64,299 1000 SBI Premier Liquid Fund - Regular Plan - Growth 581.54 Market value 1000 L&T Liquid Fund - Growth 25.57 10 L&T Floating Rate Fund Direct Plan - Growth 200.13 1000 200.19 50.45 300.27 10 688.04 29,13,16,266 1000 52.54 98,69,116 10 25.15 2,06,34,724 10 26.52 75,48,765 10 Kotak Emerging Equity-Direct-Dividend Reinvestment 52.98 20,13,288 10 JM Equity Fund Quarterly Dividend Payout-Regular BSL Pure Value Fund - Growth - Direct Axis Enhanced Arbitrage Fund Direct Growth ICICI Pru Multicap Plan - Direct - Growth 52.72 1,23,49,155 10 Reliance Mid & Small Cap Fund - Direct -Growth 53.12 JM Balanced Fund - Direct -Quarterly Dividend 1,00,77,922 1000 134.60 Particulars HDFC Small & Midcap Fund - Growth Details of quoted/unquoted investments: 5518.05 4803.32 3041.48 2680.28 5031.03 6982.08 Total current investments (A)+(B)+(C) Total - (C) 11.19 10 L&T Business Cycles Fund - Direct Plan - Dividend Payout 211.50 10 JM Equity Fund Half Yearly Dividend Payout 453.68 10 JM Balanced Fund - Quarterly Dividend Payout 10 JM Arbitrage Adv Fund - Ann Bonus - Principal - Direct 400.56 34,16,26,312 1000 JM Arbitrage Advantage Fund-Regular Plan-Quarterly Dividend 6,80,64,962 10 515.43 129.25 Carried forward 62,00,166 10 DSP BlackRock India Tiger Fund - Direct - Growth 21.26 10 L&T Arbitrage Opportunities Fund - Growth 10.99 12.00 1,08,25,229 10 L&T Resurgent India Corporate Bond Fund - Dividend 130.12 1000 300.27 100.03 3,75,507 1000 Kotak Floater -ST - Growth 10.14 10 Birla Sun Life Manufacturing Equity Fund - Direct - Dividend 31.89 Tata Infrastructure Fund - Direct - Growth 32.80 53.31 3451.57 1488.48 UTI Money Market - IP - Growth 270 64,41,412 10 3041.48 Birla Sun Life Floating Rate Fund - LTP-Direct Plan - Growth 3041.48 1488.48 3451.57 (C) Mutual funds: crore crore crore As at 1-4-2015 As at 31-3-2016 Brought forward As at 31-3-2017 NOTE [10] LARSEN & TOUBRO Number of units Notes forming part of the Financial Statements (contd.) Particulars Face value per unit ₹ As at 31-3-2017 Details of current investments (contd.) Disclosure pursuant to section 186 of the Companies Act, 2013: Above figures include interest accrued NOTE [38] Sr. Loans to employees (including directors) under various schemes of the Company (such as housing loan, furniture loan, education loan, etc.) have been considered to be outside the purview of disclosure requirements. Subsidiary classification is in accordance with the Companies Act, 2013 crore Notes forming part of the Financial Statements (contd.) Particulars in respect of loans and advances in the nature of loans to related parties as required by the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (contd.) NOTE [37] 287 4790.45 179.09 Nature of the transaction (loans given/investment made/guarantee no. given/security provided) Total 3293.09 Notes: Purpose for which the loan/ 16.56 As at 31-3-2017 2018.01 L&T Special Steels & Heavy Forgings Private Limited 15.07 3240.44 512.00 Working capital and project funding 190.82 Project funding guarantee/security is proposed to be utilised by the recipient 269.98 L&T Shipbuilding Limited L&T Seawoods Limited L&T Realty Limited Subsidiary companies: (i) (A) Loan and advances: As at 31-3-2016 Project funding 1827.99 300.08 1167.22 J PNG Tollway Limited E 870.54 866.55 1167.22 L&T Special Steels & Heavy Forgings Private Limited D 18.20 2680.62 249.20 341.20 397.41 2651.87 2018.01 512.00 L&T Shipbuilding Limited | Working capital and project funding C 644.44 L&T-MHPS Turbine Generators Private Limited 18.20 62.17 902.99 1576.88 Nabha Power Limited | L&T Valves Limited H 2163.55 18.20 16.00 507.90 2.23 L&T Hydrocarbon Engineering Limited G 16.00 EWAC Alloys Limited F 16.00 511.74 1167.22 Corporate guarantee given for PNG Tollway Limited subsidiary's debt 1331.00 2781.00 L&T Shipbuilding Limited subsidiary's debt 548.32 472.36 Nabha Power Limited Corporate guarantee given for subsidiary's debt 233.97 120.61 Corporate guarantee given for L&T-MHPS Boilers Private Limited subsidiary's debt 57.01 L&T-MHPS Turbine Generators Private Limited 44.64 Larsen & Toubro ATCO Saudi LLC Larsen & Toubro Infotech Limited 269.98 project performance 238.68 202.26 Corporate guarantee for subsidiary's project performance 1013.25 Larsen & Toubro Arabia LLC 5369.27 project performance 909.51 Corporate guarantee for subsidiary's subsidiary's debt 5157.00 5032.00 Corporate guarantee given for Corporate guarantee for subsidiary's 866.55 Corporate guarantee given for L&T Aviation Services Private Limited 16.00 Short term funding 4866.07 3293.09 Total (i)+(ii) 75.62 General corporate purpose Working capital Boyance Infrastructure Private Limited (ii) Nabha Power Limited EWAC Alloys Limited L&T Hydrocarbon Engineering Limited 18.20 18.20 Project funding Others: 288 2.23 Project funding Subsidiary companies: (C) Guarantees: 5.25 6.35 6.35 Towards capital contribution L&T Metro Rail (Hyderabad) Private Limited 507.90 5.25 L&T Uttaranchal Hydropower Limited Subsidiary companies: (B) Other advances: 4790.45 3293.09 902.99 1576.88 Towards capital contribution 16.56 31.07 B 23(a) Loans guaranteed by directors Nil (previous year Nil) 23(b)Loans repayable on demand from banks include fund based working capital facilities viz. cash credits and demand loans. The secured portion of loans repayable on demand from banks, short term loans and advances from the banks, working capital facilities and other non-fund based facilities viz. bank guarantees and letter of credit, are secured by hypothecation of inventories and trade receivables. Amount of inventories and trade receivables that are pledged as collateral: 6149.71 crore as at March 31, 2017; 6188.72 crore as at March 31, 2016; 6098.53 crore as at April 1, 2015. 3998.58 3549.07 449.51 57.25 997.08 997.08 57.25 499.54 499.54 9.25 9.25 414.09 3761.89 4175.98 2334.84 442.71 5.52 442.71 5.52 1897.43 437.41 281 Loans from related parties 2485.80 2877.52 289.02 3253.10 3542.12 391.72 1449.20 1665.26 216.06 Short term loan and advances from banks [Note 23(b)] 66.73 8.94 crore crore crore 57.79 crore 125.07 Commercial paper Notes forming part of the Financial Statements (contd.) NOTE [24] Financial liabilities: Current maturities of long term borrowings As at 31-3-2016 As at 31-3-2017 Embedded derivative payables Financial guarantee contracts Due to others [Note 26(a)] Unclaimed dividend Particulars Other financial liabilities - current NOTE [26] Due to others Micro and small enterprises [Note 57] Joint venture companies Associate companies Subsidiary companies Due to related parties: Particulars Acceptances Financial liabilities - current: Trade payables NOTE [25] 24(a) Loans guaranteed by directors Nil (previous year Nil) Finance lease obligation Sales tax deferment loan [Note 19(d)] Term loans from banks [Note 19(c)] [Note 19(a)(ii)] Redeemable non-convertible fixed rate debentures Unsecured: Particulars crore crore 221.35 crore crore 221.35 crore As at 1-4-2015 As at 31-3-2016 180.39 290.29 crore As at 31-3-2017 102.00 72.45 88.57 13.36 21.51 27.34 24.66 16.93 11.83 19.24 22.46 44.74 34.01 26.94 crore crore crore As at 1-4-2015 crore As at 1-4-2015 227.08 144.42 Loans repayable on demand from banks [Note 23(b)] Total Secured Unsecured Total As at 1-4-2015 As at 31-3-2016 Secured Unsecured Total Secured Unsecured Particulars As at 31-3-2017 Financial Liabilities: Borrowings - current NOTE [23] 0.81 5.83 crore crore crore 3.86 As at 1-4-2015 As at 31-3-2016 As at 31-3-2017 346.10 371.50 470.68 4.86 138.86 202.38 As at 31-3-2016 crore crore Notes forming part of the Financial Statements (contd.) 16785.98 1260.54 11147.06 365.21 crore 4013.17 18651.96 1177.13 * crore 4733.71 222.17 12518.95 As at 1-4-2015 As at 31-3-2016 NOTE [28] 18297.72 12628.78 57.88 crore 4231.98 As at 31-3-2017 282 Other payables Advances from customers Due to customers (property development projects) Due to customers (construction related activity) Particulars 1190.57 1379.08 Current liabilities: Provisions Particulars Provision for employee benefits: 22.46 486.02 502.10 518.64 35.85 52.70 71.94 crore As at 1-4-2015 crore crore crore crore crore As at 31-3-2016 As at 31-3-2017 LARSEN & TOUBRO Particulars Contingent liabilities NOTE [29] Other provisions (Ind AS 37 related) [Note 54] Others: Post-retirement medical benefits plan [Note 50(a)] Employee pension scheme [Note 50(a)] Compensated absences Gratuity [Note 50(a)] Other current liabilities 26(a) Due to others include due to directors 55.58 crore (as at 31-3-2016: 51.30 crore; as at 1-4-2015: 53.83 crore) NOTE [27] 1132.73 1319.68 379.38 22.81 601.89 5.35 1674.82 1836.93 638.02 4.16 crore 920.16 As at 1-4-2015 crore crore 660.83 399.78 crore crore crore As at 31-3-2016 As at 31-3-2017 647.93 1436.03 1111.59 0.50 0.45 0.34 0.20 36.46 836.81 1110.89 611.02 598.88 1412.95 crore 2479.11 124.08 1815.14 1112.78 13.07 11.18 18.03 149.54 33.59 39.33 crore * crore As at 1-4-2015 As at 31-3-2016 1572.65 1405.93 8.88 111.23 46.61 crore As at 31-3-2017 18376.00 22215.92 15525.24 19138.71 24031.83 21028.86 115.46 2282.06 134.32 56.17 As at 31-3-2017 Particulars 0.675% US$ denominated 5 years & 1 day Foreign Currency Convertible Bonds (FCCB) carried at 1201.78 crore as at March 31, 2017 (previous year: ₹ 1190.86 crore) represent 1,000 bonds of US$ 200000 each. The bonds are convertible into the Company's fully paid equity shares of 2 each at a conversion price of 1916.50 per share at the option of the bond holders at any time on and after December 1, 2014 up to October 15, 2019. The bonds are redeemable, subject to fulfillment of certain conditions, in whole but not in part, at the option of the Company, on or at any time after October 22, 2017 but not less than seven business days prior to the maturity date, at the principal amount together with accrued interest (calculated up to but excluding the date of redemption) on the date fixed for redemption, unless the bonds have been previously redeemed, converted or purchased and cancelled. @ The principal amount has been calculated as [{Average Ref WPI as at reporting period / Average Ref WPI (as at 23/5/2013)} x Face Value] 19(b) Foreign currency convertible bonds: Redeemable at the end of 10th year from the date of allotment. Redemption value calculated as [{Average Ref WPI (on Maturity Date)/Average Ref WPI (on Issue Date)} x face value] with Floor Rate as 3% and Cap Rate as 12%. WPI here refers to Wholesale Price Index Terms of repayment for debentures outstanding as at 31-3-2017 Current maturity of long term borrowings [Note 24)] Borrowings non-current [Note 19] Redeemable at face value at the end of 5th year from the date of allotment. 1.65% p.a. payable on inflation adjusted principal as on the date of coupon payment Interest for the year 2016-2017 crore 111.30 @ As at 1-4-2015 As at 31-3-2016 crore 110.32@ 279 crore 113.61@ 1000000 31-3-2017 As at Date of allotment debenture (*) Face value per 19(a)(iii) Unsecured redeemable non-convertible inflation linked debentures: 1716.68 2180.12 2179.48 May 23, 2013 Notes forming part of the Financial Statements (contd.) NOTE [19] (contd.) 19(c) Details of term loans (unsecured): Foreign currency loans: 5. USD LIBOR + Spread 124.34 131.95 129.51 4. USD LIBOR + Spread 311.82 330.75 323.96 3. USD LIBOR + Spread USD LIBOR + Spread Rate of interest As at 1-4-2015 crore 1235.31 616.36 654.77 642.97 2. 1312.64 1288.32 1. crore crore As at 31-3-2016 As at 31-3-2017 Sr. no. 611.02 2327.70 2779.00 598.88 2179.48 5. 8.80% p.a. payable annually 2010 216.64 216.83 216.83 April 13, 1000000 4. Redeemable at face value at the end of 10th year from the date of allotment. Redeemable at face value at the end of 10th year from the date of allotment. Terms of repayment for debentures outstanding as at 31-3-2017 9.15% p.a. payable annually Interest for the year 2016-2017 2010 As at 1-4-2015 crore 323.91 As at 31-3-2016 crore 324.13 crore 324.14 May 11, 1000000 3. As at 31-3-2017 Date of allotment Sr. Face value per no. debenture (₹) Unsecured redeemable non-convertible fixed rate debentures (privately placed) (contd.) NOTE [19] 19(a)(ii) 1000000 162.14 August 21, 211.13 Less: Total 8.40% p.a. payable annually 24, 2015 1042.87 1042.60 September 1000000 9. 303.51 February 2, 2015 1000000 8. 11, 2014 307.51 December 1000000 7. 2014 369.28 369.52 August 22, 1000000 6. 2014 229.66 LARSEN & TOUBRO 165.64 USD LIBOR + Spread 0.28 Total 0.10 4. 0.28 0.14 3. Interest Free 0.36 0.24 0.12 0.62 2. 0.24 0.16 1. Terms of repayment as at March 31, 2017 Rate of Interest As at 1-4-2015 crore crore crore As at 31-3-2016 As at 31-3-2017 Sr. no. 0.33 1.07 Less: 0.20 Other payables Other non-current liabilities NOTE [22] Provision for interest rate guarantee Post-retirement medical benefits plan [Note 50(a)] Employee pension scheme [Note 50(a)] Particulars Provisions - non-current NOTE [21] Due to others Financial guarantee contracts Embedded derivative payables Forward contract payables Particulars Other financial liabilities - non-current NOTE [20] Notes forming part of the Financial Statements (contd.) Current maturities of long term borrowings [Note 24] Borrowings non-current [Note 19] Repayable on April 26, 2017 Repayable in 2 annual installments of 0.08 crore ending April 26, 2018 0.62 0.28 0.08 0.45 0.34 280 19(d) Sales tax deferment loan (unsecured): Loans guaranteed by directors - Nil (previous year Nil) 36.46 Current maturities of long term borrowings [Note 24] 5103.91 Borrowings non-current [Note 19] USD LIBOR + Spread 346.73 369.40 193.22 10. USD LIBOR + Spread 619.62 658.91 549.57 9. USD LIBOR + Spread 619.62 659.34 452.61 8. USD LIBOR + Spread 378.15 402.83 203.87 7. USD LIBOR + Spread 273.96 291.65 157.56 6. 11. 156.26 312.50 12. Repayable on October 19, 2018 Repayable in 2 equal installments on (i) September 18, 2017 and (ii) June 18, 2018 Repayable on August 30, 2017 Repayable in 2 installments on (i) August 30, 2017 and (ii) June 28, 2018 Repayable in 2 installments on (i) August 30, 2017 and (ii) June 28, 2018 Repayable in 2 installments on (i) August 30, 2017 and (ii) June 28, 2018 Repayable in 2 installments on (i) August 30, 2017 and (ii) June 28, 2018 Repayable on July 14, 2017 Repayable on September 27, 2017 Repayable in 3 installments on (i) November 3, 2018 (ii) November 3, 2019 and (iii) November 3, 2020 Repayable on July 2, 2018 Repayable on October 21, 2019 Terms of repayment of term loan outstanding as at 31-03-2017 5140.37 USD LIBOR + Spread 165.64 5259.32 836.81 4422.51 3230.58 4341.47 1110.89 Less: Total 162.13 13. USD LIBOR + Spread 145.70 115.80 75.61 Fixed Interest Rate L&T Realty Limited 13.26 11.16 57.70 67.30 47.57 (4.40) 116.39 114.67 4282.55 4554.79 crore crore crore 177.57 crore 2016-17 Sales, administration and other expenses NOTE [35] Recoveries on account of deputation Staff welfare expenses Insurance expenses - medical and others Expenses on employees stock option schemes [Note 17(v)(B)] Gratuity funds [Note 50(b)] Superannuation/employee pension schemes Provident funds and pension fund Contribution to and provision for: 2015-16 221.66 61.77 60.34 292.75 224.58 104.75 91.05 Audit fees [Note 55] Packing and forwarding 65.83 59.26 Professional fees Power and fuel crore crore crore crore Particulars 2015-16 2016-17 4974.80 5146.47 (239.08) (343.55) 574.08 618.72 75.25 77.17 Salaries, wages and bonus Particulars Employee benefits expense NOTE [34] 340.15 20.62 15.75 (4.91) 911.55 1041.49 16.30 76.57 131.59 3644.03 3567.46 3221.70 3246.01 161.13 159.77 261.20 161.68 3567.46 3435.87 3246.01 3044.67 159.77 169.68 161.68 221.52 Miscellaneous expenses 316.38 5.33 1015.13 761.70 Notes forming part of the Financial Statements (contd.) 285 50169.09 51989.60 5208.33 5808.52 458.45 372.48 144.67 151.15 254.88 303.18 8.08 6.10 49.65 56.54 771.58 759.81 307.84 366.42 418.24 415.25 167.53 187.07 676.35 707.42 Bank guarantee charges 4.40 Rent 203.35 (22.40) 594.93 (5.93) 395.29 (0.01) crore 2087.75 2171.25 crore crore crore 9.47 134.58 2015-16 LARSEN & TOUBRO NOTE [37] Exchange loss (attributable to finance costs) Other borrowing costs Particulars Interest expenses Finance costs NOTE [36] Other provisions [Note 54(a)] Exchange (gain)/loss (net) Provision/(reversal) for foreseeable losses on construction contracts 2016-17 19.04 2741.55 2845.77 190.82 L&T Seawoods Limited A Loans and advances in the nature of loans given to subsidiaries: Maximum outstanding during 2015-2016 2016-2017 31-3-2016 31-3-2017 no. Name of the company Balance as at Sr. * crore Particulars in respect of loans and advances in the nature of loans to related parties as required by the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015: 1476.82 1318.03 129.65 64.69 1.19 0.56 1345.98 * crore crore 1252.78 2015-16 2016-17 Allowance for doubtful debts and advances (net) Particulars Discount on sales Brought forward 98.86 104.84 0.59 0.82 213.51 229.67 8.97 9.53 284.27 280.10 49.41 50.91 219.72 229.51 33.16 37.86 Commission: Stationery and printing Advertising and publicity Telephone, postage and telegrams Directors' fees General repairs and maintenance Repairs to buildings Travelling and conveyance Rates and taxes 77.80 Insurance 61.96 41.76 Sales, administration and other expenses (contd.) NOTE [35] Notes forming part of the Financial Statements (contd.) 286 2087.75 2171.25 Carried forward 108.23 42.43 121.19 12.96 45.05 Less: Allowance for doubtful debts and advances written back 87.48 Bad debts and advances written off 403.68 64.83 32.15 57.96 599.05 Miscellaneous expenses Bank charges 2.74 4.88 Others 28.33 27.27 Distributors and agents 38.40 5.25 General repairs and maintenance Repairs to plant and equipment Revenue from operations NOTE [31] 159.34 2.61 2738.00 1281.00 1063.20 294.40 As at 1-4-2015 As at 31-3-2016 196.72 533.49 Particulars As at 31-3-2017 Funding committed by way of equity/loans to subsidiary/joint venture companies (c) Share in capital commitments, of joint operations for which the company is contingently liable (b) (a) Estimated amount of contracts remaining to be executed on capital account (net of advances) Particulars no. Sr. Commitments NOTE [30] Notes forming part of the Financial Statements (contd.) 283 In respect of matters at (g) to (i), the cash outflows, if any, could generally occur upto completion of projects undertaken by the respective joint operations. crore 2016-17 2015-16 crore Other operational income: 63265.83 65396.00 137.30 140.81 760.57 597.88 Commission Servicing 44.74 24.73 Engineering and service fees 843.60 403.18 Property development activity [Note 48(c)(i)] 5957.40 5730.98 Manufacturing and trading activity 55522.22 58498.42 Construction and project related activity [Note 48(a)(i)] Sales and service: crore crore crore In respect of matters at (f), the cash outflows, if any, could generally occur up to three years, being the period over which the validity of the guarantees extends. In respect of matters at (e), the cash outflows, if any, could generally occur up to ten years, being the period over which the validity of the guarantees extends except in a few cases where the cash outflows, if any, could occur any time during the subsistence of the borrowings to which the guarantees relate. of the arbitration/appellate proceedings. Further, the liability mentioned in (a) to (d) above excludes interest and penalty in cases where the company has determined that the possibility of such levy is remote. It is not practicable to estimate the timing of cash outflows, if any, in respect of matters at (a) to (d) above pending resolution 460.55 (d) Income tax liability that may arise in respect of which the Company is in appeal 55.41 60.73 69.20 132.13 883.06 crore * crore 1025.52 156.72 * crore 1743.95 141.50 As at 1-4-2015 As at 31-3-2016 As at 31-3-2017 801.42 897.29 1092.15 256.25 275.16 473.86 including those in respect of matters in appeal/challenged by the Company in Writ (a) Claims against the Company not acknowledged as debts (b) Sales tax liability that may arise in respect of matters in appeal (c) Excise duty/service tax/customs duty liability that may arise 545.17 622.13 618.29 10.04 531.84 Income from hire of plant and equipment 826.44 8450.61 5. 4. 3. 2. The Company does not expect any reimbursements in respect of the above contingent liabilities. 1. Notes: 10840.81 8006.19 6230.96 (i) Contingent liabilities in respect of liabilities of other joint operators of joint operations 80.13 58.18 53.24 (h) Share in contingent liabilities of joint operations for which the Company is contingently liable 3248.49 4170.76 7018.24 (g) Contingent liabilities, if any, incurred in relation to interests in joint operations 9201.96 8847.53 16384.12 (f) Corporate and bank guarantees for performance given on behalf of subsidiary companies 8723.55 7327.31 (e) Corporate guarantees for debt given on behalf of subsidiary companies/joint venture companies Repairs to buildings 80.28 Technical fees 1145.94 (16.49) Value of stock-in-trade transferred on sale of business 1390.84 Purchase of stock-in-trade 635.39 18804.70 7397.55 7370.57 577.49 18493.31 Construction materials consumed Excise duty 7455.04 57.49 7444.84 74.27 Stores, spares and tools consumed Less: Scrap sales Materials consumed: crore crore crore crore Particulars 2015-16 2016-17 LARSEN & TOUBRO Manufacturing, construction and operating expenses NOTE [33] Raw materials and components Sub-contracting charges 1390.84 1446.67 1129.45 Travelling and conveyance Rates and taxes Rent Insurance Engineering, technical and consultancy fees - Hire charges plant and equipment and others Packing and forwarding Royalty and technical know-how fees Power and fuel Excise duty Other manufacturing, construction and operating expenses: Work-in-progress Stock-in-trade Finished goods Less: Opening stock: Work-in-progress Stock-in-trade Finished goods Closing stock: stock-in-trade and property development: Changes in inventories of finished goods, work-in-progress, 15567.87 16770.61 1349.23 Notes forming part of the Financial Statements (contd.) 2341.04 1971.85 415.69 Interest income: crore crore * crore crore Particulars 2015-16 2016-17 Other income NOTE [32] 63812.65 66301.35 546.82 905.35 38.02 246.89 538.09 48.45 Premium earned (net) on related forward exchange contracts Miscellaneous income 112.16 170.74 Income from services to Group companies 71.85 67.79 Lease rentals 0.36 Subsidiary and associate companies Others 77.54 325.62 268.24 262.48 345.70 39.90 70.48 82.51 23.70 150.87 (72.44) 1121.35 1065.10 113.06 659.63 994.16 0.38 13.75 284 Miscellaneous income (net of expenses) Net gain/(loss) on sale of property, plant and equipment Lease rentals Net gain/(loss) on sale or fair valuation of investments Others Joint venture companies Associate companies 405.47 Subsidiary companies From investments - non-current Dividend income: 530.72 539.31 213.69 crore 125.07 Notes forming part of the Financial Statements (contd.) LARSEN & TOUBRO At L&T, we understand the importance of biodiversity. Every year we plant trees at our manpower resources available for the task Not Applicable The Company does not have financial or 3. Not Applicable Not Applicable it finds itself in a position to formulate and implement the policies on specified principles The Company is not at a stage where 2. The Company has not understood the principles 1 Questions S. No P1 P2 P3 P4 P5 P6 P7 P8 P9 2b. If answer to question at Serial No. 1 against any principle, is 'No', please explain why. (Tick up to 2 options) Y Y Y Y 4. It is planned to be done within next 6 months Not Applicable 5. This committee also functions as the Apex Body to interact, inform, advice and coordinate with the Executive Management Committee (EMC) on all issues relating to the Code of Conduct. The committee constitutes of a minimum of five senior members and meets at least twice a year. The Compliance officer acts as the Ex-Officio Secretary of the Apex Committee. At the unit level we have Unit Level CoC Committee consisting of at least four members, headed by the Unit Head with Head of Accounts, Head of HR and a senior person from Operations. The Unit Level Committee meets at least once in a quarter. The Role of the Committee is creating awareness, motivating employees to follow Code of Conduct, monitoring compliance of Code of Conduct and investigating instances of non-compliance. The Code of Conduct (CoC) Apex Committee has the responsibility to ensure implementation of the Code of Conduct across the Company, deals with the instances of non-compliance, and oversees the functioning of the Unit Level CoC Committees. All our employees are guided by the L&T Code of Conduct, including the Board Members and Senior Management. The Group Executive Chairman makes an Annual Declaration to the shareholders on compliance with the Company's CoC by the senior management. L&T is committed to the philosophy of conducting business in an ethical manner with respect for human values, individual dignity and professional conduct. The Code of Conduct is featured on the Company's website - www.larsentoubro.com and Intranet. New employees are introduced and trained on the Code of Conduct through a detailed online module of the Company's Any Time Learning (ATL) System. The critical areas of the Code of Conduct are also included in the HR Orientation Training Swagat and Prayag for GET/PGET. In a unique initiative, each employee of the Company is required to confirm their acceptance of the 'Code of Conduct' through a web-portal, this 'once a year' mandatory requirement creates awareness on the Code of Conduct, policies and guidelines and imbibes a sense of responsibility in employees for their actions. Larsen and Toubro stands on a strong base built by our founders and continues a rich legacy of fair & transparent governance system, disclosure practices and integrity. L&T is a professionally managed Indian multinational, committed to total customer satisfaction & enhancing stakeholders' value. The Company's Vision and Policies extend to its commitment to fair practices. These are applicable to all our operations, subsidiaries and associate companies. PRINCIPLE 1: BUSINESSES SHOULD CONDUCT AND GOVERN THEMSELVES WITH ETHICS, TRANSPARENCY AND ACCOUNTABILITY LARSEN & TOUBRO SECTION E 22 22 Yes, the Company has been publishing its Sustainability Report annually as per the Global Reporting Initiative (GRI) framework since 2008. The sustainability reports are externally assured. We are following GRI- G4 Standard and 2016 report is 'In Accordance - Comprehensive' report. The reports can be accessed at www.lntsustainability.com and sustainabilityreport.larsentoubro.com (b) Does the Company publish a BR or a Sustainability Report? What is the hyperlink for viewing this report? How frequently it is published? (a) Indicate the frequency with which the Board of Directors, Committee of the Board or CEO meet to assess the BR performance of the Company: Within 3 months, 3-6 months, Annually, More than 1 year: Annually 3. Governance related to BR Not Applicable Any other reason (please specify) 6. 1 year Not Applicable It is planned to be done within the next Y Y Y Y Y Y Y Y communicated to all relevant internal and Has the policy been formally 7 viewed online? www.Lntsustainability.com ་་་་་་་་་ 90 P9 P8 P6 P7 P5 P4 55 13 P3 Y Sustainability Policy Y Y Y Has the Company carried out independent audit/evaluation of the working of this policy by an internal or external agency? 10 Y Y Y Y Y Y Y Y Y ture to implement the policy/policies? Does the Company have a grievance redressal mechanism related to the policy/ policies to address stakeholders' griev- ances related to the policy/policies? 6 YYYYYYYYY Does the Company have in-house struc- 8 external stakeholders? Y Y At Larsen & Toubro, we are committed to fulfilling our economic, environmental and social responsibilities while conducting business. We will conserve natural resources and enhance social equity to achieve sustainable growth while serving all our stakeholders Towards this we shall, Incorporate environmental and social considerations in our business operations Periodic feedback mechanism Press Releases, Quarterly Results, Annual Reports, Sustainability Reports, AGM (Shareholders interaction), Access information & respond to queries Regular supplier, dealer and stockiest meets Press Releases, Info desk - an online service, dedicated Email Id for investor grievances, Quarterly Results, Annual Reports, Sustainability Reports, AGM (Shareholders interaction), Investors meet and shareholder visit to works, corporate website. Engagement Modes TIME FOR ACTION ROAD LARSEN & POURRO Government Community Customers Media Suppliers/ Contractors Shareholders and investors Stakeholders External Stakeholders programme in which we are working to improve the overall quality of life of the people living in the most water stressed regions of India. We work on providing clean drinking water, sanitation, education, health and skill building. L&T is a pioneer in launching an anti-depression help-line for its employees in India, in collaboration with TISS. LARSEN & TOUBRO We run specific programs under our "Corporate Social Responsibility (CSR)" umbrella focused on benefitting the disadvantaged, vulnerable and marginalized communities. Our CSR projects not only run around our operations, but are extended much beyond that. One of our key focus areas is the 'Integrated Community Development' The Company has mapped its internal and external stakeholders along with the disadvantaged, vulnerable & marginalized stakeholders. This mapping gives us an understanding that our stakeholders form a vast and heterogeneous community with wide-ranging expectations. It is our constant endeavor to match these. Our stakeholders are at the core of our decision-making process and the Company engages with them regularly through various engagement programs. At L&T we conduct business professionally to create value for all stakeholders ensuring that we are a responsible partner that serves the wider interests of society. The Company has a dedicated Corporate Brand Management & Communications department which facilitates an on-going dialogue between the organization and its stakeholders. Regular business interactions, Client satisfaction surveys PRINCIPLE 4: BUSINESSES SHOULD RESPECT THE INTERESTS OF, AND BE RESPONSIVE TOWARDS ALL STAKEHOLDERS, ESPECIALLY THOSE WHO ARE DISADVANTAGED, VULNERABLE AND MARGINALIZED Press Releases, Quarterly Results, Annual Reports, Sustainability Reports Workforce taking the Safety Pledge at one of L&T's campuses. PRINCIPLE 6: BUSINESS SHOULD RESPECT, PROTECT, AND MAKE EFFORTS TO RESTORE THE ENVIRONMENT We propagate our human rights values across the supply chain through our 'Environmental & Social Code of Conduct' for our suppliers and extend the same to our sub-contractors as part of their contract documents. We ensure that employees are sensitized to human rights clauses through training programs, interactive sessions, Intranet, policy manuals and posters. Apart from this, the Company complies with the applicable local laws and regulatory requirements such as the Factories Act 1948, Building & Other Construction Workers (Regulation of Employment &Conditions of Service) Act 1996, Central Rules 1998 and Industrial Disputes Act 1947. There were no reported complaints related to human rights violations during the year. 28 27 Human rights are an important part of the Code of Conduct and Corporate Human Resource Policy of the Company. Human Rights cover the issues of prohibition of child labour, prohibition of forced & compulsory labour, nondiscrimination, freedom of association and collective bargaining. We also have the Policy on Protection of Women's Rights at workplace for addressing sexual harassment at workplace. We follow the Universal Declaration of Human Rights, the ILO Core Conventions on Labour Standards and the UN Global Compact. With global activities and customers in over 30 countries around the world, L&T will inevitably be confronted with human rights issues. The Company is a member of the Global Compact Network India and commits to honor human rights within its operations. Further, the Human Rights policies are extended and strictly adhered to within our Subsidiary and Associate companies. PRINCIPLE 5: BUSINESSES SHOULD RESPECT AND PROMOTE HUMAN RIGHTS L&T Helpdesk, toll free number A large bouquet of print and on- line in-house magazines some location-specific, some business-specific, a CSR program newsletter. Online news bulletins to convey topical developments Welfare initiatives for employees and their families Corporate Social initiatives Corporate and Line Management Circulars, Messages from Employee engagement surveys for further improvement in employees' engagement process Employee satisfaction surveys For Internal Stakeholders Employees ROAD SAFETY-TIME FOR ACTION Working on Wellness is our exclusive platform through which we offer programs, counselling, awareness sessions, diagnostic camps, workshops, activities targeted at employee health and wellness at office. The interventions are grouped in six critical areas - cancer, diabetes, cardiac disease, obesity, ergonomic issues and stress. training before commencing work. More than 3.7 million man hours of safety training was provided in FY 2016-17 to our workforce. The safety performance of the Company is reviewed by the L&T Board during the quarterly Board meetings. Safety is another area of significance and we work towards continuous improvement for Zero Harm. With 'Zero Harm' we aim to build a workplace environment which supports the health and safety of our people and minimises the impact our business has on the environment. Zero harm means no harm to anyone, anytime, anyone associated with us. Regular safety training, tool box talks, mock drills and specific safety interventions are undertaken to build a safe work culture within the organization. New employees are introduced on the aspects of safety and all contract workmen receive mandatory safety At L&T, in all our businesses, it is our constant endeavour to extend safe goods and services that contribute to sustainability throughout their Life cycle. Our portfolio includes projects, products and services covering Infrastructure projects, Power projects, Heavy Engineering products, Electrical & Automation (E&A) products, Metallurgical & Material Handling (MMH) products and services, Hydrocarbon Projects, IT & Technological Services, and Financial Services. We ensure that sustainability aspects, risks and opportunities are integrated into our engineering and design. L&T also offers comprehensive training to our customer's personnel. PRINCIPLE 2: BUSINESSES SHOULD PROVIDE GOODS AND SERVICES THAT ARE SAFE AND CONTRIBUTE TO SUSTAINABILITY THROUGHOUT THEIR LIFE CYCLE The brand L&T has been built by implementing good Corporate Governance practices; which are imbibed by our employees as a way of life and create an elevated governance culture. suppliers are required to follow the same. Since 2016 the Company has initiated the environment assessment of suppliers along with organizing awareness sessions on sustainability for suppliers and transporters. The Company conducts capacity-building programmes for vendors and sub-contractors and provides training on safety, business efficiency and sustainability. In line with the Company's Green Supply Chain Policy, we formulated an 'Environmental & Social Code of Conduct for Suppliers' covering specific clauses on environmental management and compliance, human rights, labour practices, prohibition of child labour, freedom of association & collective bargaining, prohibition of forced & compulsory labour, ethics and transparency, and impact on society. This was applicable during the period 2012-16, since 2016-17 the 'Environmental & Social Code of Conduct for Suppliers' has been integrated with the business code of conduct for suppliers. All new and existing vendors/ The Company has established a vigil mechanism for employees and directors to report concerns about unethical behaviour, actual or suspected fraud or violation of the company's code of conduct or ethics policy. The Whistle Blower Policy facilitates employees to report without fear, any wrongdoings or unethical or improper practice which may adversely impact the image and/or the financials of the company to Whistle Blowing Investigation Committee. The management assures maintaining anonymity of the whistle-blower at all times. During the year 2016-17 a total of 15 complaints were received, 100% of these were investigated and dealt with in accordance with the Company's protocol and none are under review. Details relating to stakeholder complaints are included in the Director's Report Section of this Annual Report. Artist's impression of football stadium being built in Qatar, incorporating design and processes to minimize environmental impact 23 Codified policies publicly affirm the organisation's commitment, govern actions and provide clarity of direction Gave Executive Crainman AM NAIK danil LARSEN & TOUBRO 20 November, 2014 • Adopt sustainable and resource efficient processes and provide value added products and services Partner with communities towards social interventions in the identified thrust areas • Continue to ensure good governance, ethics and transparency in our engagements with stakeholders, and advocate responsible business practices Foster a culture of trust and caring to enhance safety and well-being of employees Reduce adverse impact of climate change, augment energy efficiency and promote renewable energy usage Our construction & infrastructure projects along with our campuses ensure minimal environmental footprint and safe operations and enhance community value. At our campuses we currently have 17 green buildings including one Green Factory, all our 24 campuses are now water positive and have achieved zero waste water discharge status. Energy efficiency and carbon footprint reduction are given substantial importance during the course of production. 24 24 LARSEN & TOUBRO L&T's Leadership Development Academy (LDA) at Lonavala is recognised as a unique corporate university in India, collaborating with the world's most reputed institutions to provide a global exposure. Apart from this, a wide range of technical, functional as well as managerial training is imparted to the employees through Technical training centres at Mumbai (Madh, Mahape) & Project Management Institute (Vadodara & Chennai). At L&T regular training and exposure to the challenges of tomorrow are important elements of an employee's career graph. Employees are provided with adequate continuous trainings on functional and behavioural areas. L&T offers its employees with opportunities to pursue higher education through corporate tie-ups and sponsorships with reputed colleges. L&T's Learning & Development Academy is a one of its kind destination, designed to power corporate training at various levels. 26 45 25 282,311 Contract workmen employees 22 Terminal 2 - Mumbai Airport built by L&T has won numerous awards for user-friendliness, sustainability and innovative construction techniques. 2,029 Refer "Standalone financials 10-year Highlights" section of Annual Report Number of L&T employees L&T is a merit-based organisation and discrimination of any form based on caste, religion, region, gender or physical disability is not permitted. We remain committed to the United Nations Global Compact principles and Human Rights clauses are also included in the contracts with vendors and partners, extending these to our supply chain. L&T directly employs 85 persons with disabilities. The value chain also employs 48 persons with disabilities. The Company recognizes employee unions and associations affiliated with different trade unions at its manufacturing facilities and 7.82% of permanent employees are covered under this category. No complaints were received during the year, relating to child labour, forced labour, involuntary labour or sexual harassment at the workplace. Our people are the key to truly leveraging the potential of the Company's growth. The continuous zeal and commitment of our people powers L&T and we nurture this with training, motivation, leadership development and performance rewards. The Company's Corporate Human Resource Policy sets a robust framework for people management. Apart from this, we have the Corporate Environment, Health & Safety (EHS) Policy, Whistle Blower Policy, Protection of Women's Rights at Workplace Policy, and code of conduct for protection of human rights. PRINCIPLE 3: BUSINESS SHOULD PROMOTE WELL-BEING OF EMPLOYEES The Company promotes recycling and use of alternate materials. As a part of sustainability roadmap of increasing recycling of products and industrial waste are practiced at our campuses and project sites. We utilize alternate materials such as fly ash, crushed sand, blast furnace slag, steel scrap, zinc waste etc. Our products are 'engineered to order' based on specific customer requirements, limiting the scope for material recycling. Apart from these initiatives, the Company offers products and services focused on sustainability and infrastructure with low environmental impact. These include technology solutions with lower carbon emissions, less water consumption, lesser air pollution, energy efficiency improvement, clean energy and resource conservation. These products help reduce the customers environmental impact. The portfolio covers Green Buildings, Mass Rapid Transit Systems like metro and mono rails, Solar power plants built on EPC basis, fuel switch projects, coal gasifiers, super critical thermal power plant & equipment, power transmission & distribution systems, energy saving electrical & automation solutions etc. Energy efficient products and systems from the Electrical & Automation business cover Power Management Systems, AC drives, smart metering systems etc. permanent women P2 L&T is leading the way in renewable energy as India's largest solar power systems integrator Indicate the link for the policy to be 1. Paid up Capital: 186.59 Crores SECTION B: FINANCIAL DETAILS OF THE COMPANY 10. Markets served by the Company - Local/State/National/International/: All ii. Number of National Locations: 100 i. Number of International Locations: 35 9. Total number of locations where business activity is undertaken by the Company 3. Engineering services 2. Manufacturing and trading activity 1. Construction and project-related activity 8. List three key products/services that the Company manufactures/provides (as in balance sheet) 19 Architectural and engineering activities and related technical consultancy Construction / erection and maintenance of power, telecommunication and transmission lines Construction and maintenance of industrial facilities such as refineries, chemical plants, etc. Wholesale of construction and civil engineering machinery and equipment 7110 71100 711 Real estate activities with own or leased property 6810 68100 681 4659 46594 2. Total Turnover: 66301.35 Crores 465 3. Total Profit After Taxes: 5453.74 Crores 5. List of activities in which expenditure in 4 above has been incurred: • Name: Dr. Hasit Joshipura • DIN Number: Not Applicable, being an EMC member a) Details of the Director/Directors responsible for implementation of the BR policy/policies 1. Details of Director/Directors responsible for BR SECTION D: BR INFORMATION LARSEN & TOUBRO 20 20 Yes. The Company promotes BR initiatives in its value chain. At present, less than 30% of its suppliers/ distributors participate in BR initiatives. 3. Do any other entity/entities (e.g. suppliers, distributors, etc.) that the Company does business with participate in the BR initiatives of the Company? If yes, then indicate the percentage of such entity/entities. [Less than 30%, 30-60%, More than 60%]: Yes. The Business Responsibility (BR) initiatives of the company are extended to the Subsidiary/Associate Companies including major subsidiaries like L&T Hydrocarbon Engineering. In addition, these subsidiaries are also encouraged to take various other initiatives. L&T Infotech made its stock market debut on July 21, 2016 at the National Stock Exchange in Mumbai and its shares have been listed on NSE and BSE. Since 2016-17 L&T Infotech will have a separate Business Responsibility Report as part of its annual report. 2. Do the Subsidiary Company/Companies participate in the BR Initiatives of the parent company? If yes, then indicate the number of such subsidiary company(s): 1. Does the Company have any Subsidiary Company/ Companies? Yes. SECTION C: OTHER DETAILS iv. Skill Development iii. Education ii. Health i. Water & Sanitation Our focus areas in Corporate Social Responsibility are as follows: 4. Total Spending on Corporate Social Responsibility (CSR) as percentage of profit after tax: 1.85 %. As per the Section 135 of The Companies Act 2013, the CSR spend is 2.04% of average Net Profit of the previous three financial years • 42202 42901 42102 42201 7. Sector(s) that the Company is engaged in (industrial activity code-wise): 6. Financial Year reported: 1st April 2016 - 31st March 2017 5. E-mail id: sustainability-ehs@Larsentoubro.com 4. Website: www.Larsentoubro.com 3. Registered address: L&T House, Ballard Estate, Mumbai 400 001, India 2. Name of the Company: Larsen & Toubro Limited 1. Corporate Identity Number (CIN) of the Company: L99999MH1946PLC004768 SECTION A: GENERAL INFORMATION ABOUT THE COMPANY L&T's Sustainability Reports can be accessed at www.Intsustainability.com. This report conforms to Business Responsibility Reporting (BRR) requirement of Securities & Exchange Board of India (SEBI) based on the National Voluntary Guidelines (NVG) released by the Ministry of Corporate Affairs, India. Furthermore, L&T publishes comprehensive sustainability performance in it's Sustainability Report, which is prepared in accordance with Global Reporting Initiative (GRI) guidelines and is externally assured. At L&T we believe Sustainability is an important element of the way we work. We continue to be resource efficient and put efforts towards better environment management. People are our assets and their safety and well-being is of prime importance. Through our projects, products and services, we aim to build a better society, while maintaining that delicate ecosystem balance and helping communities prosper. ANNUAL BUSINESS RESPONSIBILITY REPORT 2016-17 LARSEN & TOUBRO L&T recognizes the importance of environment preservation. Our Corporate Environment, Health and Safety (EHS) Policy plays a vital role in defining the choices we make. Since 2009, we have been setting measurable targets and developing action plans for successive three-year Sustainability Roadmaps covering efforts to mitigate our impact. The Company identifies potential environmental risks and opportunities in its operations and its Subsidiary and Associate Companies and acts towards these. Key suppliers are also encouraged to follow our practices. With all our efforts across the years, we are able to achieve a 'Water Positive' Status for all 24 campuses of L&T in India. Water Assessment was conducted for all campuses, rain water harvesting structures, and community based water harvesting structures covering check dams and other water storage structures. We were able to demonstrate significant water conservation efforts at campuses along with well-planned and implemented community water harvesting, benefitting society. Also, all our campuses continue to be zero wastewater discharge units since 2014. The Company works in compliance with applicable laws. Regular checks are conducted by independent auditors to ensure compliance with environmental regulations and compliance reports are submitted to Central Pollution Control Board (CPCB) State Pollution Control Boards (SPCB) as applicable. During the financial year, there are no pending or unresolved show cause/legal notices from CPCB/SPCB. We strive to increase the share of renewable energy in our overall energy mix. Three campuses are sourcing wind energy from external suppliers, while 18 campuses are generating renewable energy on-site. P1 Group Class Sub-Class Construction and maintenance of power plants 271 282 4220 422 42101 4100 41001 4210 421 410 Construction and maintenance of railways and rail-bridges Construction of buildings carried out on own-account basis or on a fee or contract basis Construction and maintenance of motorways, streets, roads, other vehicular and pedestrian ways, highways, bridges, tunnels and subways. Building of warships and scientific investigation ships, etc. Construction of floating or submersible drilling platforms Building of commercial vessels, passenger vessels, ferry boats, cargo ships, tankers, tugs, hovercraft (except recreation type hovercraft), etc. Manufacture of parts and accessories for machinery / equipment used by construction and mining industries Manufacture of electric motors, generators, transformers and electricity distribution and control apparatus Description 30114 30112 30111 3011 301 2824 28246 2710 27104 Designation: Head - Corporate Centre & Member of the Executive Management Committee (EMC) We are committed to the eight missions of the National Action Plan on Climate Change (NAPCC) instituted by the Government of India. Progressively, we have been investing in products and processes that promote sustainable growth - enhancing energy security, developing low-carbon technologies for building infrastructure, spreading sustainability knowledge and increasing green cover. The Company annually reports its carbon emissions to the Carbon Disclosure Project since 2009. S. No 3 stakeholders? Y Y Y Y Y Y Y Y Y consultation with the relevant Has the policy been formulated in 2 Y Y Y Y Y Does the policy conform to any national/ international standards? If yes, specify. (50 words) Y Yes. The policies are aligned with the principles of NVG guidelines and conform to international standards of ISO 9001, ISO 14001, OHSAS 18001 and ILO principles. Has the policy been approved by the Board? b) Details of the BR head Does the Company have a specified 6. 5 S. No 21 21 Chairman Y Y Y Y Y Y Y Y Y Has it been signed by MD/Owner/CEO/ Appropriate Board Director? Signed by the Group Executive Yes. 4 Y Questions Y 2a. Principle-wise (as per NVGs) BR Policy/policies (Reply in Y/N) Name of principles: sustainability-ehs@Larsentoubro.com Head Corporate Infrastructure & Administrative Services +91-22-67052447 Major General Gautam Kar (Retd.) Not Applicable Details Email ID Telephone Number 5 UT 4 Designation 3 Name 2 DIN Number (If applicable) Y 1 Particulars P1 Businesses should conduct and govern themselves with Ethics, Transparency and Accountability P2 - Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle committee of the Board/ Director/Official to oversee the implementation of the policy? Yes. P4 P3 - Businesses should promote the well-being of all employees 1 (Reply in Yes/No) P9 P8 P7 P6 P5 P4 P3 Do you have a policy/policies for P1 P2 Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalized P5 - Businesses should respect and promote human rights P6 - Businesses should respect, protect, and make efforts to restore the environment - (A) Details of Compliances S. No P9 - Businesses should engage with and provide value to their customers and consumers in a responsible manner P7 - Businesses, when engaged in influencing public and regulatory policy, should do so in a responsible manner P8 - Businesses should support inclusive growth and equitable development 605.10 Other disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": (a) Category-wise classification for applicable financial assets: Sr. no. I. Particulars LARSEN & TOUBRO crore As at 31-3-2017 As at 31-3-2016 As at 1-4-2015 (i) Investment in equity instruments 56.04 (ii) Investment in preference shares Measured at fair value through Profit or Loss (FVTPL): NOTE [45] (6.96) 1568.79 The Company's customer profile include public sector enterprises, state owned companies and large private corporates. Accordingly, the Company's customer credit risk is low. The Company's average project execution cycle is around 24 to 36 months. General payment terms include mobilisation advance, monthly progress payments with a credit period ranging from 45 to 90 days and certain retention money to be released at the end of the project. In some cases retentions are substituted with bank/corporate guarantees. The Company has a detailed review mechanism of overdue customer receivables at various levels within organisation to ensure proper attention and focus for realisation. The company is making provisions on trade receivables based on Expected Credit Loss (ECL) model. The reconciliation of ECL is as follows: 294 Opening balance Particulars Changes in loss allowance (Provision for doubtful debts): Loss allowance based on ECL Additional provision Write off as bad debts Notes forming part of the Financial Statements (contd.) Closing balance [reported under Note 11] 2016-17 1568.79 2015-16 56.04 441.95 220.71 345.66 167.14 221.31 (39.98) 1916.66 crore 1008.78 164.19 45.65 2397.63 (ii) Trade receivables (iii) Advances recoverable in cash 19919.97 796.49 18967.75 16790.00 954.51 631.25 5224.53 (iv) Cash and cash equivalents and bank balances 3668.44 3096.21 (v) Other receivables 787.33 Sub-total (II) 29213.17 (c) Credit Risk Management: 670.43 29485.66 4025.79 3683.59 Loans (i) (iii) Investment in mutual funds 5031.03 2680.28 3041.48 (iv) Investment in bonds 202.33 300.13 (v) Derivative instruments not designated as cash flow hedges 6.08 1.31 18.41 (vi) Embedded derivatives not designated as cash flow hedges Sub-total (I) 78.97 5979.55 131.64 3611.35 10.39 II. Measured at amortised cost: 173.30 3453.42 119.60 The Company manages liquidity risk by maintaining sufficient cash and marketable securities and by having access to funding through an adequate amount of committed credit lines. Given the need to fund diverse businesses, the Company maintains flexibility in funding by maintaining availability under committed credit lines to meet obligations when due. Management regularly monitors the position of cash and cash equivalents vis-à-vis projections. Assessment of maturity profiles of financial assets and financial liabilities including debt financing plans and maintenance of Balance Sheet liquidity ratios are considered while reviewing the liquidity position. Net exposure to foreign currency risk in respect of recognised financial assets/ (recognised financial liabilities) Derivatives including embedded derivatives for hedging receivable/ (payable) exposure with respect to firm commitments and forecast transactions Receivable/(payable) exposure with respect to forward contracts and embedded derivatives not pegged currencies designated as cash flow hedge (397.06) (366.03) (933.60) (190.65) (206.00) (1587.07) (104.70) (206.44) 3664.22 (1085.56) 604.27 3027.96 (1729.90) (855.69) 105.37 2787.36 (1069.82) Yen Japanese 549.76 23464.85 Notes forming part of the Financial Statements (contd.) NOTE [44] (contd.) future cash flows and net investments in foreign subsidiaries. In addition, the Company has entered and may enter in the future, into non-designated foreign currency contracts to partially offset the foreign currency exchange gains and losses on its foreign-denominated debt issuances. The Company's practice is to hedge a portion of its material foreign exchange exposures with tenors in line with the project/business life cycle, however, the Company may choose not to hedge certain foreign exchange exposures for a variety of reasons. The net exposure to foreign currency risk (based on notional amount) in respect of recognised financial assets, recognised financial liabilities and derivatives is as follows: crore US Dollars As at 31-3-2017 EURO including Particulars Japanese Yen pegged currencies US Dollars including pegged currencies As at 31-3-2016 EURO Japanese Yen US Dollars As at 1-4-2015 EURO including 94.63 752.13 (5.42) As at 31-3-2017 As at 31-3-2016 Indian Rupee Interest rates - increase by 0.25% in INR interest rate Interest rates decrease by 0.25% in INR interest rate * US Dollar * (0.55) (0.32) 0.55 2015-16 0.32 (0.32) 0.32 Interest rates increase by 0.25% in USD interest rate * Interest rates decrease by 0.25% in USD interest rate * *Holding all other variables constant (b) Liquidity risk management: (6.77) 6.77 (9.88) 9.88 (6.77) 6.77 (9.88) 9.88 (0.55) 0.55 2016-17 Particulars Impact on equity (27.30) 7.00 21.33 To provide a meaningful assessment of the foreign currency risk associated with the Company's foreign currency derivative positions against off-Balance Sheet exposures and unhedged portion of on-Balance Sheet financial assets and liabilities, the Company uses a multi-currency correlated value-at-risk ("VAR") model. The VAR model uses a Monte Carlo simulation to generate thousands of random market price paths for foreign currencies against Indian Rupee taking into account the correlations between them. The VAR is the expected loss in value of the exposures due to overnight movement in spot exchange rates, at 95% confidence interval. The VAR model is not intended to represent actual losses but is used as a risk estimation tool. The model assumes normal market conditions and is a historical best fit model. Because the Company uses foreign currency instruments for hedging purposes, the loss in fair value incurred on those instruments are generally offset by increase in the fair value of the underlying exposures for on Balance Sheet exposures. The overnight VAR for the Company at 95% confidence level is 59.80 crore as at March 31, 2017 and 27.60 crore as at March 31, 2016. Actual future gains and losses associated with the Company's investment portfolio and derivative positions may differ materially from the sensitivity analysis performed as at March 31, 2017 due to the inherent limitations associated with predicting the timing and amount of changes in foreign currency exchange rates and the Company's actual exposures and position. (ii) Interest rate risk: The Company's exposure to changes in interest rates relates primarily to the Company's outstanding floating rate debt. While most of the Company's outstanding debt in local currency is on fixed rate basis and hence not subject to interest rate risk. A major portion of foreign currency debt is linked to international interest rate benchmarks like LIBOR. The Company also hedges a portion of these risks by way of derivative instruments like interest rate swaps and currency swaps. The exposure of the Company's borrowing to interest rate changes at the end of the reporting period are as follows: Floating rate borrowings Particulars crore As at 31-3-2017 As at 31-3-2016 4470.01 6570.15 As at 1-4-2015 5958.86 A hypothetical 25 basis point shift in respective currency LIBORS on the unhedged loans would result in a corresponding increase/decrease in interest cost for the Company on a yearly basis. 293 Notes forming part of the Financial Statements (contd.) NOTE [44] (contd.) *crore Impact on Profit and Loss after tax The Company's investment policy and strategy are focused on preservation of capital and supporting the Company's liquidity requirements. The Company uses a combination of internal and external management to execute its investment strategy and achieve its investment objectives. The Company typically invests in money market funds, large debt funds, government of india securities, equity funds and other highly rated securities under a limits framework which governs the credit exposure to any one issuer as defined in its investment policy. The policy requires investments generally to be investment grade, with the primary objective of minimising the potential risk of principal loss. To provide a meaningful assessment of the price risk associated with the Company's investment portfolio, the Company performed a sensitivity analysis to determine the impact of change in prices of the securities that would have on the value of the investment portfolio assuming a 0.25% movement in debt funds and debt securities and a 5% movement in the NAV of the equity funds. Based on the investment position a hypothetical 0.25% change in the fair market value of debt securities would result in a value change of +/- 4.08 crore as at March 31, 2017 and +/- 14.83 crore as at March 31, 2016. 5% change in the equity funds NAV would result in a value change of +/- 17.14 crore as at March 31, 2017 and +/- 2.87 crore as at March 31, 2016. The investments in money market funds are for the purpose of liquidity management only and are held only overnight and hence not subject to any material price risk. III. (204.30) Measured at fair value through Other Comprehensive Income (FVTOCI): Investment in government securities, bonds and debentures (831.25) (ii) Unclaimed credit balances written back 130.71 57.11 Sub-total (C) 407.99 (774.14) Total [I] = (A+B+C) 277.28 (399.62) ။ Net gains/(losses) on financial assets and financial liabilities measured at fair value through Other Comprehensive Income: A (i) Financial assets measured at fair value through Other Comprehensive Income: Gains/(losses) recognised in Other Comprehensive Income: 1. Gains/(losses) on fair valuation or sale of government securities, bonds, debentures 103.82 (29.81) (1171.94) exchange difference gains/(losses) on re-valuation or settlement of items denominated in foreign currency (trade payables, borrowings availed etc.) (i) Financial liabilities measured at amortised cost: B (i) exchange difference gains/(losses) on revaluation or settlement of items denominated in foreign currency (trade receivables, loans given etc.) (173.03) 291.03 (ii) (Allowance)/reversal for ECL recognised during the year in the Statement of Profit and (220.71) (345.66) Loss (iii) Provision for doubtful debts (other than ECL) (net) (167.14) (221.31) (iv) Bad debts written off (net) (42.43) (108.23) Sub-total (B) (603.31) (384.17) C etc. (13.63) 2. (129.42) (16.14) (414.41) D = III Other income/expense: A Dividend income: (i) Net gain recognised in Other Comprehensive Income [II] = [(i)-(ii)] Dividend income from investments measured at FVTPL 113.06 B Interest income: (i) Financial assets measured at amortised cost 380.28 330.27 (ii) Financial assets measured at fair value through Other Comprehensive Income (iii) Financial assets measured at fair value through Profit or Loss Sub-total (B) 659.63 248.18 (33.48) Sub-total (ii) (146.14) 3. Gains/(losses) on fair valuation or settlement of embedded derivative contracts designated as cash flow hedges (24.02) 9.72 Sub-total (i) (49.62) (166.23) Less: (ii) Gains/(losses) reclassified to Profit and Loss from Other Comprehensive Income: 1. On government securities, bonds, debentures etc. upon sale 112.99 (25.94) 2. On forward contracts upon hedged future cash flows affecting the profit or Loss or related assets or liabilities (142.39) 274.12 3. On embedded derivative contracts upon hedged future cash flows affecting the profit or loss or related asset or liability (4.08) Gains/(losses) on fair valuation or settlement of forward contracts designated as cash flow hedges (i) LARSEN & TOUBRO 9.93 (ii) Embedded derivatives not designated as cash flow hedges 83.26 Sub-total (I) 91.79 141.09 159.70 14.99 7.10 22.09 II. 18.61 Measured at amortised cost: Borrowings 10580.01 (ii) Trade payables 24031.83 13924.41 22215.92 13077.32 18376.00 (iii) Others 1217.12 (i) 8.53 Derivative Instruments not designated as cash flow hedges (i) (ii) Derivative financial instruments designated as cash flow hedges (iii) Embedded derivatives designated as cash flow hedges Sub-total (III) 1748.72 659.92 2.62 2411.26 37603.98 1822.91 494.21 4.31 2321.43 35418.44 2312.38 487.21 1.94 2801.53 29719.80 Total (I+II+III) (b) Category-wise classification for applicable financial liabilities: Sr. Particulars no. As at 31-3-2017 As at 31-3-2016 1-4-2015 crore As at I. Measured at fair value through profit or loss (FVTPL): 1057.15 (0.16) Sub-total (II) 37197.48 2015-16 Particulars no. | Net gains/(losses) on financial assets and financial liabilities measured at fair value through Profit or Loss and amortised cost: A Mandatorily measured at fair value through Profit or Loss: (i) 2016-17 Gains/(losses) on fair valuation or sale of investment 11.98 (ii) Gains/(losses) on fair valuation or settlement of forward contracts not designated as cash flow hedges (33.57) (25.45) Sub-total (A) (iii) Gains/(losses) on fair valuation or settlement of embedded derivative contracts not designated as cash flow hedges Financial assets measured at amortised cost: (180.66) Sr. crore 296 853.81 32307.13 III. Derivative instruments (including embedded derivatives) through Other Comprehensive Income: (i) Derivative Instruments designated as cash flow hedges (ii) Embedded derivatives designated as cash flow hedges Sub-total (III) IV. Financial guarantee contracts Total (I+II+III+IV) 279.60 50.43 330.03 20.71 36271.49 130.29 8.45 138.74 34.96 37530.88 353.97 23.32 377.29 37.73 32744.24 295 Notes forming part of the Financial Statements (contd.) NOTE [45] Disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures" (contd.) (c) Items of income, expense, gains or losses related to financial instruments: 35828.96 292 Disclosure pursuant to Ind AS 1 "Presentation of financial statements": In general, the Company is a net receiver of foreign currency. Accordingly, changes in exchange rates, and in particular a strengthening of the Indian Rupee, will negatively affect the Company's net sales and gross margins as expressed in Indian Rupees. There is a risk that the Company may have to adjust local currency product pricing due to competitive pressures when there have been significant volatility in foreign currency exchange rates. Sr. Particulars no. 1. Receivable not later than 1 year 2. Receivable later than 1 year and not later than 5 years 3. crore Receivable later than 5 years (b) Where the Company is a lessee: (i) Finance leases: As at 31-3-2017 As at 31-3-2016 48.69 46.42 Total The Company has given a building under non-cancellable operating lease, the future minimum lease payments receivable in respect of which are as follows: Operating leases: (a) Where the Company is a lessor 14.09 0.22 14.31 Total 86.70 14.07 100.77 115.33 4.56 119.89 NOTE [40] The expenditure on research and development activities recognised as expense in the Statement of Profit and Loss is 145.98 crore (previous year: 149.62 crore). Further, the company has incurred capital expenditure on research and development activities as follows: on tangible assets of 9.43 crore (previous year: 5.19 crore); (a) (b) on intangible assets being expenditure on new product development of 43.01 crore (previous year: 48.19 crore) [Note 1(i)(ii)] and on other intangible assets of 1.09 crore (previous year: 0.55 crore). (c) 289 Notes forming part of the Financial Statements (contd.) NOTE [41] Disclosures pursuant to Ind AS 17 "Leases": As at 1-4-2015 20.02 19.46 34.41 12.28 Payable later than 1 year and not later than 5 years 0.16 0.02 0.14 3. Payable later than 5 years 0.15 2. 0.15 0.07 Total (1+2+3) 0.87 0.18 0.70 0.07 Less: Future finance charges 157.84 0.06 As at 1-4-2015 payments As at 31-3-2016 As at 31-3-2017 0.50 83.10 113.89 32.30 290 (A) Assets acquired on finance lease comprises plant and equipment and land. The leases have a primary period, which is fixed and non-cancellable. The company has an option to renew the lease for a secondary period. (B) The minimum lease rentals and the present value of minimum lease payments in respect of assets acquired under finance leases are as follows: crore Present value of minimum lease Minimum lease payments Sr. Particulars no. As at 31-3-2017 1. Payable not later than 1 year 0.56 As at 31-3-2016 0.01 As at 1-4-2015 67.47 0.11 0.43 Note 34 19.75 project performance Corporate guarantee for subsidiary's 1172.46 1197.86 project performance Corporate guarantee for subsidiary's 3272.69 Corporate guarantee for subsidiary's 2693.04 Corporate guarantee for subsidiary's 2.90 2.90 project performance Corporate guarantee for subsidiary's project performance Guarantees issued by bank out of the Company's sanctioned limits to customer of L&T-MHPS Boilers Private Limited for Project performance 5418.32 2173.23 28.60 project performance Technology Services LLC) corporate guarantee given for L&T project performance (It includes Notes forming part of the Financial Statements (contd.) NOTE [38] Disclosure pursuant to section 186 of The Companies Act 2013 (contd.) Sr. Nature of the transaction (loans given/investment made/guarantee no. given/security provided) L&T Technology Services Limited Purpose for which the loan/ guarantee/security is proposed to be utilised by the recipient Corporate guarantee for subsidiary's L&T Electrical & Automation FZE Larsen & Toubro Heavy Engineering LLC Larsen & Toubro (Saudi Arabia) LLC Spectrum Infotech Private Limited L&T Hydrocarbon Engineering Limited L&T-MHPS Boilers Private Limited LARSEN & TOUBRO crore As at 31-3-2017 As at 31-3-2016 917.62 589.79 9.52 19.03 24834.73 [Note 5 and Note 10 ] 6.19 3.30 9.49 5.53 0.33 5.86 ii) Other revenue expenses: Note 35 charged and shown under sales, Note 35 61.48 10.34 71.82 95.71 4.01 99.72 benefits expense administration and other expenses charged and shown under employee and other expenses and shown under sales, administration Construction/acquisition of assets charged (D) Investments in fully paid equity instruments and current investments Note: Subsidiary classification is in accordance with the Companies Act, 2013 NOTE [39] Amount required to be spent by the Company on Corporate Social Responsibility (CSR) related activities during the year is 98.97 crore (previous year: 101.46 crore). (a) The amount recognised as expense in the Statement of Profit and Loss on CSR related activities is 100.77 crore (previous year: 119.89 crore), which comprises of: Sr. no. Particulars crore Disclosed under In Cash 2016-17 Yet to be paid in Total In Cash 2015-16 Yet to be paid in Total cash cash i) 16174.84 The Company may enter into foreign currency forward and option contracts with financial institutions to protect against foreign exchange risks associated with certain existing assets and liabilities, certain firmly committed transactions, forecasted Present value of minimum lease payments 0.07 months months months months Inventories 9 1706.03 56.83 1762.86 months 1914.84 11 19527.21 Loans current 14 Other financial assets 15 1914.37 1949.83 Other current assets Trade receivables months Total twelve crore As at 31-3-2017 As at 31-3-2016 As at 1-4-2015 Particulars Note Within After Within After Within After twelve twelve Total twelve twelve Total twelve 16 Current assets expected to be recovered within twelve months and after twelve months from the reporting date: 23972.84 24.58 2260.77 556.14 16790.00 26 Other current liabilities 27 Provisions 28 1529.91 12184.01 963.70 months 1252.61 24031.83 21223.65 42.74 1572.65 1280.68 6113.71 18297.72 13186.78 128.45 1092.15 821.76 twelve months Other financial liabilities Total twelve Total months NOTE [44] Disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": Market risk management (a) Foreign exchange rate and interest rate risk: The Company regularly reviews its foreign exchange forward and option positions and interest rate swaps, both on a standalone basis and in conjunction with its underlying foreign currency and interest rate related exposures. The Company follows cash flow hedge accounting for Highly Probable Forecasted Exposures (HPFE) hence the movement in mark to market (MTM) of the hedge contracts undertaken for such exposures is likely to be offset by contra movements in the underlying exposures values. However, till the point of time that the HPFE becomes an on Balance Sheet exposure, the changes in MTM of the hedge contracts will impact the Balance Sheet of the Company. Further, given the effective horizons of the Company's risk management activities which coincide with the durations of the projects under execution and could extend across 3-4 years and the business uncertainties associated with the timing and estimation of the project exposures, the recognition of the gains and losses related to these instruments may not always coincide with the timing of gains and losses related to the underlying economic exposures and, therefore, may affect the Company's financial condition and operating results. Hence, the Company monitors the potential risk arising out of the market factors like exchange rates, interest rates, price of traded investment products etc. on a regular basis. For on Balance Sheet exposures, the Company monitors the risks on net unhedged exposures. (i) Foreign exchange rate risk: twelve months 992.27 22215.92 17215.21 1160.79 18376.00 39.00 1319.68 1159.37 31.20 1190.57 5465.18 18651.96 11149.24 5636.74 16785.98 75.53 897.29 754.28 47.14 801.42 22779.22 25 Trade payables (b) Current liabilities expected to be settled within twelve months and after twelve months from the reporting date: crore As at 31-3-2017 As at 31-3-2016 As at 1-4-2015 Within After Within After Within After Particulars Note twelve twelve Total twelve months months 40.27 1955.11 2236.19 392.76 19919.97 18516.81 450.94 18967.75 16233.86 5.04 1919.41 2432.23 0.03 2432.26 1377.11 4.50 1381.61 104.80 2054.63 1772.38 108.11 1880.49 1318.01 110.08 1428.09 9290.86 33263.70 23418.54 10063.41 33481.95 19909.13 8545.70 28454.83 0.70 (a) Notes forming part of the Financial Statements (contd.) 38.32 22.32 76.97 crore) (C) Lease rental expense in respect of operating leases: 109.10 crore (previous year: (D) Contingent rent recognised in the Statement of Profit and Loss: Nil (previous year: Nil) Notes forming part of the Financial Statements (contd.) NOTE [42] Disclosure pursuant to Ind AS 105 "Non-current assets held for sale and discontinued operations": Particulars 45.46 LARSEN & TOUBRO As at 31-3-2017 As at 31-3-2016 As at 1-4-2015 Investments held for sale (A) Assets of disposal group classified as held for sale (B) Group(s) of assets as classified as held for sale Liabilities of disposal group classified as held for sale (B) 388.00 crore 9.23 crore As at 1-4-2015 13.09 18.05 20.27 0.70 0.07 (C) Contingent rent recognised in the Statement of Profit and Loss: Nil (previous year: Nil) (ii) Operating leases: (A) The Company has taken various commercial premises and plant and equipment under cancellable operating leases. These lease agreements are normally renewed on expiry. (B) Assets acquired on non-cancellable operating lease comprises commercial premises, cars and technology assets, the future minimum lease payments in respect of which are as follows: Sr. Particulars No. 1. Payable not later than 1 year 2. Payable later than 1 year and not later than 5 years 3. Payable later than 5 years Total As at 31-3-2017 18.33 As at 31-3-2016 27.13 388.00 NOTE [43] 141.79 37.22 Other current liabilities Total liabilities of disposal group classified as held for sale crore 75.53 0.22 22.42 34.63 0.11 Provisions 8.88 (iii) The assets and liabilities of the disposal group are presented in assets and liabilities of construction equipment & others segment reported under "Others" segment. [Note 47(a)]. crore 0.01 32.89 0.46 3.86 37.22 291 141.79 Trade payables Borrowings Liabilities directly associated with assets classified as held for sale: The Company has identified the above as held for sale to optimise the capital allocation and focus on core business. The sale is envisaged through transfer of title deeds for identified assets held for sale and through divestment of stake/business transfer agreement in case of disposal group held for sale. The proposed sale are expected to be completed within 12 months from the respective reporting dates. (A) Investments held for sale: (i) Through a scheme of arrangement of demerger, the Port business in L&T Shipbuilding Limited (effective date March 22, 2017) is transferred to Marine Infrastructure Developer Private Limited (MIDPL). As a shareholder L&T has received 38,80,00,000 equity shares of ₹10 each. L&T is planning to divest its stake in MIDPL to an identified strategic partner. Accordingly, the investment in MIDPL is presented as assets held for sale. (ii) The Investment held for sale forms part of the unallocable corporate assets. [Note 47(a)]. (B) Assets and Liabilities of disposal group classified as held for sale: (i) Pursuant to Board of Directors decision on November 7, 2014, to sell Company's Foundry Business Unit a definitive agreement with M/S Bradken Operations Pty Limited was executed on November 11, 2014. The associated assets and liabilities are consequently presented as held for sale as at April 1, 2015. The Foundry Business was subsequently sold on March 31, 2016. (ii) Details of assets and liabilities of disposal group classified as held for sale as at April 1, 2015: Particulars Assets classified as held for sale: Property, plant and equipment Other intangible assets Inventories Trade receivables Cash and cash equivalents Other current assets Total assets of disposal group classified as held for sale Particulars 141.79 0.17 (832.36) L2* 605.10 5031.03 2680.28 10 5031.03 (ii) Mutual fund units 605.10 56.04 56.04 56.04 5 5 (ii) Preference shares those held in subsidiary & associate companies) (i) Equity shares (other than Investments at FVTPL Total Level 3 As at 1-4-2015 Level 2 Level 1 Total Level 3 As at 31-3-2016 Level 2 Level 1 Total Level 3 Level 2 Level 1 As at 31-3-2017 Note crore Financial assets: Particulars Note: The carrying amounts of trade and other payables are considered to be the same as their fair values due to their short term nature. The carrying amounts of borrowings with floating rate of interest are considered to be close to the fair value. * Valuation technique L2: Future cash flows discounted using G-sec/LIBOR rates plus corporate spread. Fair value hierarchy of financial assets and liabilities measured at fair value: 441.95 4210.78 (iv) Bonds 56.04 117.26 441.95 2680.28 3041.48 300.13 164.19 NOTE [45] Notes forming part of the Financial Statements (contd.) 297 10.39 10.39 131.64 131.64 78.97 78.97 7,15 as cash flow hedges instruments not designated (vi) Embedded derivative 18.41 18.41 1.31 1.31 6.08 6.08 7,15 hedges designated as cash flow (v) Derivative instruments not 164.19 3041.48 45.65 45.65 173.30 56.04 10 202.33 (e) Fair value hierarchy of financial assets and liabilities measured at fair value (contd.) L2* 4471.41 (27.85) 5.69 (1227.88) (29.05) (A+B+C) = Total [III] (iii) Financial liabilities measured at fair value through Profit or Loss Sub-total (C) (863.84) (528.20) (401.21) Financial liabilities measured at fair value through Other Comprehensive Income (ii) Financial liabilities measured at amortised cost (i) Interest expense C no. Particulars Sr. 2015-16 2016-17 crore LARSEN & TOUBRO Items of income, expense, gains or losses related to financial instruments (contd.) (c) NOTE [45] Notes forming part of the Financial Statements (contd.) 530.69 539.20 1.29 1.08 199.13 (1419.89) 2736.19 2789.39 315.18 314.93 4141.18 (776.14) (i) 4378.17 3899.59 3789.81 Total Foreign currency non-resident loan 3234.66 3187.31 2677.39 2588.03 rate debentures Redeemable non-convertible fixed L2* 1089.81 1106.46 1236.75 1190.86 1222.20 1201.78 convertible bonds 0.675 % Foreign currency crore Fair value hierarchy As at 1-4-2015 Carrying Fair value amount Fair value As at 31-3-2016 Carrying amount amount As at 31-3-2017 Carrying Fair value Particulars (e) (ii) Financial liabilities measured at amortised cost: The carrying amounts of trade receivables and cash and cash equivalents are considered to be the same as their fair values due to their short term nature. The carrying amounts of long term loans given with floating rate of interest are considered to be close to the fair value. (d) Fair value of financial assets and financial liabilities measured at amortised cost: Financial assets measured at amortised cost: (f) 202.33 300.13 Particulars 20,26 cash flow hedges instruments designated as (b) Embedded Derivative financial 353.97 353.97 130.29 130.29 279.60 279.60 20,26 cash flow hedges instruments designated as (a) Derivative financial derivatives) (including embedded (ii) Derivative instruments 7.10 7.10 141.09 141.09 83.26 83.26 20,26 as cash flow hedges instruments not designated (b) Embedded derivative 14.99 14.99 298 50.43 8.45 8.45 25 bps change in capitalisation rate would result in +/- 0.78 crore 1% change in net realisation would result in +/- 0.38 crore Sensitivity 2. Capitalisation rate 12% 55.94 1. Lease realisation: Net realisation per month * 30 per sq/ft. 1-4-2015 Fair Value Significant unobservable inputs as at 55.94 as at 31-3-2016 Fair Value crore 55.94 as at 31-3-2017 Equity investment in Tidel Park Limited 18.61 Particulars Level 2: (a) Derivative instruments - Present value technique using forward exchange rates at the end of reporting period. (b) Preference shares - Future cash flows are discounted using G-sec rates as at reporting date. Significant unobservable inputs used in level 3 fair value measurements and sensitivity of the fair value measurement to changes in unobservable inputs: Level 1: Mutual funds, bonds, debentures and government securities - Quoted price in the active market. B. A. Valuation technique and key inputs used to determine fair value: 399.38 399.38 298.44 298.44 421.82 421.82 Total 23.32 23.32 Fair Value 18.61 50.43 8.53 instruments designated as (iii) Embedded derivative financial 7,15 cash flow hedges instruments designated as 1748.72 10 10 Total Level 3 Level 2 Total Level 3 cash flow hedges As at 1-4-2015 Level 1 Total Level 3 Level 2 Level 1 As at 31-3-2017 Note crore (ii) Derivative financial debentures etc. government securities, bonds, (i) Debt instruments viz. Investments at FVTOCI As at 31-3-2016 Level 2 Total Level 1 Financial liabilities at FVTPL 8.53 Financial liabilities: hedges designated as cash flow (a) Derivative instruments not 56.04 6254.95 563.60 5635.31 56.04 5932.78 1.94 1.94 4.31 4.31 1073.42 4803.32 2.62 56.04 8390.81 20,26 7,15 2.62 6982.08 1352.69 1748.72 1822.91 659.92 659.92 1822.91 2312.38 (i) Designated as at FVTPL 494.21 - 2312.38 487.21 487.21 494.21 43.93 89.90 21.86 (22.99) 108.62 2.19 1.08 (1.29) 2016-17 132.82 6.00 Retained earnings: (2.29) Current income tax (a) Income tax expense reported in retained earnings (b) Reconciliation of tax expense and the accounting profit multiplied by domestic tax rate applicable in India: (133.40) 133.40 306 Sr. (c) GOOOOO Particulars no. Profit before tax (b) Corporate tax rate as per Income Tax Act, 1961 (d) 26.54 Deferred tax (14.47) 1515.58 14.43 (14.47) * crore 2015-16 1671.58 3.62 1675.20 1530.01 Tax expense on origination and reversal of temporary differences (349.24) (273.97) Effect of previously unrecognised tax losses used to reduce tax expense (21.86) (371.10) (273.97) Income tax expense reported in Profit or Loss [(i)+(ii)] Other Comprehensive Income (OCI) section: 1304.10 1256.04 26.54 Items not to be reclassified to profit or loss in subsequent periods: Current tax expense/(income): On remeasurement of defined benefit plans (ii) Items to be reclassified to profit or loss in subsequent periods: (A) Current tax expense/(income): Forward covers settled, retained in hedging reserve (B) Deferred tax expense/(income): Net gain/(loss) on cost of hedging reserve On MTM of cash flow hedges On gain/(loss) on fair value of debt securities. On foreign currency translation of joint operations Income tax expense reported in Other Comprehensive Income [(i)+(ii)] (4.25) (4.47) (4.25) (4.47) (i) 6757.84 Provision for impairment of investment in L&T General Insurance Company Limited - 135 crore. 34.61% Total effect of tax adjustments [(i) to (vii)] (e) Tax expense recognised during the year (f) Effective tax Rate (18.83) 5.94 (133.99) (1034.65) (908.90) (e)=(c)-(d) 1304.10 1256.04 (f)=(e)/(a) 19.30% (vii) Tax effect on various other items 20.08% NOTE [49] Disclosure pursuant to Ind AS 12 "Income Taxes" (contd.) (c) i. Unused tax losses for which no deferred tax asset is recognised in Balance Sheet LARSEN & TOUBRO As at 31-3-2017 Base Deferred Particulars amount tax Expiry date (Assessment Base As at 31-3-2016 Deferred (ii) Deferred tax: Notes forming part of the Financial Statements (contd.) 42.99 46.72 328.78 (21.86) 34.61% (B) Tax on Accounting profit (i) Tax on income exempt from tax: (A) Dividend income (B) Long term capital gains exempt from tax (C) Interest on tax free bonds (ii) Tax on expenses not tax deductible: (A) CSR expenses Expenses in relation to exempt income (C) Tax on employee perquisites borne by the Company (iii) Weighted deduction on R&D expenditure and deduction u/s 801A (c)=(a)*(b) 2338.75 2164.94 (368.61) (v) Effect of previously unrecognised tax losses used to reduce tax expense (vi) Tax effect of losses of current year on which no deferred tax benefit is recognised (iv) Tax effect on impairment losses recognised and on which deferred tax asset is not recognised 2.93 (269.36) (368.93) 3.28 50.24 6255.62 19.83 34.87 (11.76) (10.58) (253.24) (675.59) (388.08) 41.70 Tax expense of prior periods 2639.59 crore 2015-16 349.91 380.78 189.38 Total foreign countries (ii) 585.76 686.71 332.05 Total (i)+(ii) 9771.04 9914.20 9650.53 (c) Revenue contributed by any single customer in any of the operating segments, whether reportable or otherwise, does not exceed ten percent of the Company's total revenue. (d) The Company's reportable segments are organised based on the nature of products and services offered by these segments. (e) Basis of identifying operating segments, reportable segments, segment profit and definition of each reportable segment: (i) Basis of identifying operating segments: 142.67 Operating segments are identified as those components of the Company (a) that engage in business activities to earn revenues and incur expenses (including transactions with any of the Company's other components; (b) whose operating results are regularly reviewed by the Company's Executive Management Committee (EMC) to make decisions about resource allocation and performance assessment and (c) for which discrete financial information is available. (ii) Reportable segments: An operating segment is classified as reportable segment if reported revenue (including inter-segment revenue) or absolute amount of result or assets exceed 10% or more of the combined total of all the operating segments. (iii) Segment profit: Performance of a segment is measured based on segment profit (before interest and tax), as included in the internal management reports that are reviewed by the Company's EMC. 304 LARSEN & TOUBRO Notes forming part of the Financial Statements (contd.) NOTE [47] Disclosure pursuant to Indian Accounting Standard (Ind AS) 108 "Operating Segment" (contd.) (iv) Segment composition: NOTE [48] (a) • Infrastructure segment comprises engineering and construction of building and factories, transportation infrastructure, heavy civil infrastructure, power transmission & distribution, water & effluent treatment and smart world & communication projects. The Company has four reportable segments as described under "Segment Composition" below. The nature of products and services offered by these businesses are different and are managed separately given the different sets of technology and competency requirements. Power segment comprises turnkey solutions for Coal-based and Gas-based thermal power plants including power generation equipment with associated systems and/or balance-of-plant packages. 305.93 Other countries ended 31-3-2016 50117.59 As at 1-4-2015 2178.17 2897.95 1916.57 4655.59 4056.36 1317.00 1440.76 3052.57 4103.20 14562.70 235.85 13695.06 63812.65 crore Non-current assets Particulars As at 31-3-2017 As at 31-3-2016 As at 1-4-2015 9185.28 9227.49 9318.48 India (i) Foreign countries: Qatar 66301.35 Current income tax expense Heavy Engineering segment comprises manufacture and supply of custom designed, engineered critical equipment and systems to core sector industries like Fertiliser, Refinery, Petrochemical, Chemical, Oil & Gas, Thermal & Nuclear Power, Aerospace and Defence. Others segment includes metallurgical & material handling systems, realty, shipbuilding, manufacture, marketing and servicing of construction equipment and parts thereof, marketing and servicing of mining machinery and parts thereof, manufacture and sale of rubber processing machinery & castings (upto the date of sale). None of the businesses reported as part of others segment meet any of the quantitative thresholds for determining reportable segments in the year ended March 31, 2017, the year ended March 31, 2016 or as at April 1, 2015. Amount of project revenue recognised for the financial year [Note 31] 403.18 843.60 Not applicable ii) Aaggregate amount of costs incurred and profits recognised (less recognised losses) as at the end of the financial year 2332.26 iii) Amount of advances received 19.16 iv) Amount of work-in-progress and the value of inventories [Note 9] Excess of revenue recognised over actual bills raised (unbilled revenue) [Note 16] 281.83 2228.80 15.73 304.82 1464.99 31.40 201.11 i) 71.28 48.71 305 Notes forming part of the Financial Statements (contd.) NOTE [49] Disclosure pursuant to Ind AS 12 "Income Taxes" (a) Major components of tax expense/(income): Sr. no. (a) Profit or Loss section: Particulars (b) (i) Current income tax: 2016-17 10.24 Electrical & Automation segment comprises manufacture and sale of low and medium voltage switchgear components, custom built low and medium voltage switchboards, electronic energy meters/protection (relays) systems, control & automation products. no. * crore 1-4-2015 Disclosures pursuant to Ind AS 11 "Construction Contracts": Sr. Particulars no. i) Contract revenue recognised for the financial year [Note 31] 2016-17 2015-16 crore 1-4-2015 58498.42 55522.22 Not applicable ii) Aggregate amount of contract costs incurred and recognised profits (less recognised losses) as at end of the financial year for all contracts in progress as at that date Particulars 217253.39* iii) Amount of customer advances outstanding for contracts in progress as at end of the financial year 12205.69 11791.52 10431.14 iv) Retention amounts by customers for contracts in progress as at end of the financial year 6981.26 6506.01 5767.20 *includes provision for foreseeable loss: 121.66 crore (2015-16: 127.83 crore and 1-4-2015: 118.36 crore) (b) The Company has revised certain estimates used in determining the cost of completion of projects, as a part of periodic review of estimates. As a result, the revenue and profit before tax for the year increased by 121.46 crore (previous year: 395.73 crore). (c) Disclosures pursuant to Guidance Note on Accounting for Real Estate Transactions issued by the Institute of Chartered Accountants of India: Sr. 2016-17 2015-16 210231.40* 184245.08* Expiry date (156.14) Deferred Expiry date 82.55 95.58 185.64 155.58 148.90 B) Amounts reflected in Balance Sheet Liabilities 78.12 82.55 95.58 185.64 155.58 148.90 Assets 78.12 Net liability/(asset) 82.55 95.58 185.64 155.58 148.90 Net liability/(asset) - current 78.12 82.55 95.58 5.25 11.16 10.04 Net liability/(asset) - non-current 180.39 78.12 144.42 Amount to be recognised as liability or (asset) Add: Amount not recognised as an asset (limit in para 64(b)) crore Particulars As at 31-3-2017 Gratuity Plan As at 31-3-2016 As at 1-4-2015 Post-retirement medical benefit plan As at 31-3-2017 As at 31-3-2016 As at 1-4-2015 A) Present value of defined benefit obligation Wholly funded 445.79 415.70 422.36 Wholly unfunded 2.08 71.94 35.85 185.64 155.58 148.90 517.73 468.40 458.21 185.64 155.58 148.90 Less: Fair value of plan assets 439.61 385.85 364.71 52.70 308 138.86 A) Present value of defined benefit obligation 6.70 27.60 B) Amounts reflected in Balance Sheet Liabilities 312.75 283.25 215.64 23.33 22.29 27.60 Assets Net liability/(asset) 312.75 283.25 (9.74) 215.64 22.29 27.60 Net liability/(asset) - current # 22.46 56.17 13.26 23.33 22.29 22.74 Net liability/(asset) - non-current 290.29 227.08 202.38 4.86 23.33 Particulars 215.64 312.75 crore Company pension plan Trust-managed provident fund plan As at 31-3-2017 As at 31-3-2016 As at 1-4-2015 As at 31-3-2017 As at 31-3-2016 As at 1-4-2015 Wholly funded 2146.56 - Wholly unfunded 312.75 283.25 283.25 1986.97 9.87 1856.97 27.78 312.75 283.25 215.64 2146.56 1996.84 1884.75 Less: Fair value of plan assets 2156.30 1990.14 1857.15 Amount to be recognised as liability or (asset) 215.64 (a) The amounts recognised in Balance Sheet are as follows: Defined contribution plans - Note 1(k)(ii)(A): Amount of ₹118.34 crore (previous year: 102.98 crore) is recognised as an expense. (II) Defined benefit plans - Note 1(k)(ii)(B): (1) As at 1-4-2015 Base amount Deferred tax for diminution in value of investments on which DTA not created 1019.47 243.23 204.47 55.19 46.04 15.65 (b) Temporary differences arising out of revaluation of tax base of assets (on account of indexation benefit) 4736.69 Total 5756.16 Deferred tax 1092.85 1336.08 855.06 910.25 3832.28 3878.32 868.39 884.04 (d) Components of deferred tax (assets) and liabilities recognised in Balance Sheet and Statement of Profit or Loss: crore Balance Sheet Sr. Particulars As at no. 31-3-2017 (a) (b) Disputed statutory liabilities claimed on payment basis u/s 43B of the Income Tax Act, 1961 Items disallowed u/s 43B of the Income Tax Act, 3706.06 3910.53 150.54 Base amount As at 31-3-2016 amount tax (Assessment amount tax (Assessment (crore) (crore) year) (*crore) (*crore) year) (crore) (crore) year) Tax losses (capital loss on which no tax Deferred tax asset is created) 1336.82 247.71 31-3-2026 Assessment Year 2016-17 Total 1149.58 265.23 31-3-2025 1149.58 2486.40 512.94 1149.58 265.23 31-3-2025 265.23 ii. Unrecognised deductible temporary differences for which no deferred tax asset is recognised in Balance Sheet Sr. no. Particulars (a) Deductible temporary differences towards provision crore As at 31-3-2017 Base amount Assessment Year 2017-18 As at 31-3-2016 113.65 As at 1-4-2015 100.48 Statement of Profit or Loss 2016-17 Net deferred tax (assets)/liabilities (e) Reconciliation of deferred tax (assets)/liabilities: (371.10) (273.97) (285.22) (156.14) 95.97 Sr. no. Particulars (a) Opening balance as at April 1 (b) Tax (income)/expense during the period recognised in: (i) statement of Profit and Loss in Profit or Loss section Deferred tax expense/(income) (ii) statement of Profit and Loss under OCI section Closing balance as at March 31 crore 2016-17 2015-16 (156.14) 95.97 (371.10) 108.62 133.40 (285.22) (273.97) 21.86 ended 31-3-2017 51738.65 307 Notes forming part of the Financial Statements (contd.) NOTE [50] Disclosure pursuant to Ind AS 19 "Employee Benefits": (iii) retained earnings (32.17) (191.26) 79.59 2015-16 36.89 13.17 (213.79) (197.34) (173.52) (16.45) (23.82) 1961 (c) Provision for doubtful debts and advances (740.19) (616.97) (403.72) (123.21) (213.26) (d) (112.03) (91.20) 48.43 18.80 (10.80) (f) Other temporary differences Gain/(loss) on derivative transactions (e) Base ef (17.89) (77.07) 605.17 587.29 510.22 Difference between book depreciation and tax depreciation NOTE [47] For the year Revenue 122.62 111517.20 122.62 13.45 123.25 357981.55 80.59 120551.00 37373.00 13.45 123.25 80.59 43.19 28.47 41.83 3053.00 Disclosure pursuant to Ind AS 108 "Operating Segment" 18.45 42.07 8.33 16.86 5526.00 16.86 9.53 46.56 121345.00 8.20 46.56 316014.00 282.83 30.99 As at 31-3-2016 Average As at 1-4-2015 Within rate twelve (₹) months months (crore) (crore) After twelve Nominal amount (*crore) Average Within After rate twelve twelve (₹) months months (*crore) crore) Silver (Kg) Copper (Tn) Aluminium (Tn) Iron Ore (Tn) Coking Coal (Tn) Zinc (Tn) Lead (Tn) 30.99 290443.90 8.20 112943.72 71.66 3592.00 50.40 11494.00 9.53 177153.00 0.23 150777.00 282.83 Nominal amount (*crore) 0.23 13.16 6.55 0.06 316.29 3.54 Non-current: Asset Other financial assets 105.25 3.34 27.62 Liability Other financial liabilities 46.76 1.39 22.67 | | 57.24 53.41 (ii) Swap contracts Current: Asset Other financial assets 123.06 (1.38) Liability Other financial liabilities 0.69 205.96 13.16 121104.00 128.74 115.43 286.77 17.15 135003.00 10.65 112455.00 17.15 10.65 (i) Carrying amounts of hedge instruments for which hedge accounting is followed: Cash flow hedge crore Particulars Currency exposure exposure As at 31-3-2017 Interest rate Commodity price As at 31-3-2016 Currency Interest rate exposure exposure Commodity price As at 1-4-2015 Currency Interest rate exposure exposure Commodity price Forward contracts Current: Asset Other financial assets 236.80 Liability Other financial liabilities 29.03 (4.89) After Within rate twelve twelve (₹) months months (crore) (crore) (*crore) 71.76 18.17 71.76 299 Notes forming part of the Financial Statements (contd.) NOTE [45] (contd.) (B) Options taken to hedge exchange rate risk and accounted as cash flow hedge: As at 31-3-2017 Particulars Nominal amount (crore) Average Within After Nominal rate twelve twelve amount months months (crore) (crore) (crore) Receivable hedges US Dollar As at 1-4-2015 After Nominal Average Within After As at 31-3-2016 Average Within rate twelve twelve amount (₹) months months (crore) (crore) (crore) rate twelve twelve months months (crore) (crore) 17.22 175.69 -148.53 175.69 18.57 7.24 Swiss Franc 266.74 18.11 7.24 67.51 266.74 7.33 Chinese Yuan British Pound Japanese Yen Kuwaiti Dinar 63.51 9.63 63.51 2.97 81.81 2.97 385.36 0.61 385.36 4.40 219.94 4.40 104.77 10.61 10.61 614.50 0.59 614.50 9328.85 1934.13 7.33 18.20 299.54 74.49 219.68 79.86 160.06 69.43 160.06 104.77 10.70 2.21 10.06 2.21 101.00 16.61 97.34 16.61 110.06 63.71 3889.00 3845.12 73.42 2062.80 73.14 0.57 110.06 Qatari Riyal Saudi Riyal 244.46 244.46 63.54 148.53 (C) Forward covers taken to hedge exchange rate risk and accounted as net investment hedge: Particulars twelve (crore) months (crore) Nominal amount (*crore) Average Within After rate twelve twelve (%) months months (crore) (crore) Floating interest rate borrowings 1433.26 8.00 672.70 760.56 1614.52 8.01 181.30 1433.22 1614.52 8.01 1614.52 (iii) Outstanding commodity price hedge instruments: Commodity Forward Contract Nominal As at 31-3-2017 Average Particulars amount rate twelve (%) months After As at 1-4-2015 As at 31-3-2016 Average Within Nominal amount (crore) As at 31-3-2017 Average Within rate twelve (₹) months (crore) After Nominal twelve amount months (crore) (crore) As at 31-3-2016 Average Within After Nominal rate twelve twelve amount (₹) months months (crore) (crore) (crore) As at 1-4-2015 Average Within After rate twelve twelve (₹) months months (crore) (crore) Receivable hedges Saudi Riyal 785.74 19.44 | | 27.79 757.95 584.21 584.21 366.36 19.54 366.36 (ii) Outstanding interest rate hedge instruments: Interest rate swaps taken to hedge interest rate risk and accounted as cash flow hedge: As at 31-3-2017 Particulars Nominal amount (crore) Average Within After Nominal rate twelve twelve amount (%) months months (*crore) (crore) (crore) 20.81 0.58 │ Non-current: (0.13) 0.05 (0.08) Changes in fair value of swaps 55.38 (19.18) 36.20 (15.22) 5.26 (9.96) Amount reclassified to Profit or Loss 346.79 Amount included in non-financial assets/liabilities (115.56) Closing balance 309.97 (120.11) 40.02 (107.37) 226.68 (93.71) 32.36 (61.35) Changes in intrinsic value of option contracts (75.54) 202.60 (31.74) (14.74) (22.52) Gross (31.74) Tax Net of tax 10.98 (20.76) Gross (151.65) Tax 52.48 Net of tax (99.17) Changes in the spot element of the forward contracts which is designated as hedging instrument for time period related hedges (209.15) 72.44 (136.71) 231.72 (80.12) 151.60 Changes in fair value of forward contracts designated as hedging instruments 264.25 (91.52) 172.73 7.78 19.77 (6.83) 12.94 (89.45) 91.34 (172.58) (68.35) 129.16 30.96 (58.49) (330.27) 347.61 (23.04) 114.37 (120.37) 7.97 (215.90) 227.24 (15.07) NOTE [46] Exceptional items for the year ended March 31, 2017 include the following: (i) Gain of 1947.89 crore on sale of the Company's part stake in subsidiary companies viz. Larsen & Toubro Infotech Limited - 1191.70 crore and L&T Technology Services Limited - 756.19 crore; (ii) Loss on divestment of stake in L&T General Insurance Company Limited - 92.84 crore; (iii) Loss on sale of company's full stake in subsidiary company L&T Arabia LLC - and 11.08 crore to a wholly owned subsidiary company (iv) Provision for impairment of investment in Infrastructure Development Projects Limited - 950 crore. Exceptional items for the year ended March 31, 2016 include the following: (i) Gain on sale of the Company's part stake in L&T Finance Holdings Limited - 488.39 crore, (ii) Gain on divestment of stake in L&T-Valdel Engineering Limited - 36.59 crore, L&T-Gulf Private Limited - 6.74 crore and L&T Sapura Shipping Private Limited - 9.18 crore to a wholly owned subsidiary company. (iii) Gain of 105.86 crore on sale of the Company's stake in associate companies viz. Salzer Electronics Limited - 57.46 crore and L&T-Chiyoda Limited - 48.40 crore; (iv) Gain of 48.52 crore on sale of the Company's Foundry Business Unit and (v) Closing balance 197.51 Amount reclassified to Profit or Loss (263.92) 10.98 (20.76) 301 Notes forming part of the Financial Statements (contd.) NOTE [45] (I) Movement of hedging reserve and cost of hedging reserve (contd.) crore 2016-17 2015-16 Cost of hedging reserve Gross Opening balance Tax (23.04) 7.97 Net of tax (15.07) Gross (40.38) Tax Net of tax 13.97 (26.41) Changes in the forward element of the forward contracts where changes in spot element of forward contract is designated as hedging instrument for time period related hedges Opening balance Arab Emirates Dirham Hedging reserve 2016-17 Commodity price exposure exposure price Current: Asset Other financial assets 1.47 Non-current: Asset Other financial assets 63.75 Breakup of cash flow hedging reserve and cost of hedging reserve: Particulars 15.22 29.17 * crore As at 31-3-2017 Cash flow As at 31-3-2016 hedging Cost of hedging Cash flow As at 1-4-2015 Currency Interest rate hedging Currency Interest rate Commodity exposure exposure Currency Interest rate Commodity exposure exposure Asset Other financial assets 116.91 (15.69) 328.98 (2.73) Liability Other financial liabilities 0.52 167.74 (6.70) 22.49 10.23 | | 300 Notes forming part of the Financial Statements (contd.) NOTE [45] (i) Carrying amounts of hedge instruments for which hedge accounting is followed (contd.) Net Investment Particulars (i) Forward contracts LARSEN & TOUBRO crore As at 31-3-2017 As at 31-3-2016 price hedging Cost of Cash flow Revenue from operations Manufacturing, construction and operating expenses Finance costs Sales, administration and other expenses (1) Movement of hedging reserve and cost of hedging reserve: crore Hedge reserve 2016-17 2015-16 (9.69) 43.85 118.94 (19.59) 43.53 (14.68) (133.47) (141.36) (401.21) (528.20) (46.84) 386.31 crore Progress billing Hedged expected future cash flows affecting profit or loss: Sales, administration and other expenses Future cash flows are no longer expected to occur: hedging reserve reserve reserve reserve As at 1-4-2015 reserve Cost of hedging reserve 186.68 2015-16 (58.49) (15.07) (21.99) (26.41) 15.92 (25.22) (77.18) Balance towards continuing hedges Balance for which hedge accounting discontinued (k) Reclassification of hedging reserve and cost of hedging reserve to Profit or Loss: Particulars 4.46 For the year 67.54 5508.25 3820.60 7734.12 75.92 1876.46 57.67 2135.94 1907.72 2907.22 3007.54 Electrical & Automation 2533.52 3318.20 3270.32 5023.67 5017.80 4868.03 6126.57 7382.07 6362.49 6158.33 7470.09 6241.46 23933.86 27176.56 29858.24 As at 1-4-2015 31-3-2016 As at 3005.70 As at 31-3-2017 1530.93 1410.52 14021.90 14968.64 11730.87 31924.50 34515.85 36742.92 Unallocable corporate assets/liabilities 37362.65 43102.58 44989.17 58012.58 65690.68 65989.86 Total 3358.18 3887.56 3967.19 8013.04 8011.28 7940.91 Others 1338.19 Inter-segment assets/liabilities As at 1-4-2015 35811.84 43931.92 Profit from exceptional items Profit after tax (before exceptional items) Provision for deferred tax Provision for current tax Profit before tax (PBT) Interest income Interest expense (1476.82) 6641.44 6642.59 1116.01 783.78 5525.43 5858.81 (11.02) (32.83) Total For the year ended 31-3-2016 External Inter-segment Total For the year ended 31-3-2017 External Inter-segment * crore Profit after tax (after exceptional items) 42284.29 (1318.03) 5863.87 Heavy Engineering Power Infrastructure 31-3-2016 31-3-2017 Segment liabilities Segment assets As at As at Particulars crore 4999.58 5453.74 560.28 4439.30 (1530.01) 273.97 5695.34 530.72 893.97 4559.77 371.10 (1675.20) 539.31 (535.96) (585.58) Total assets/liabilities (166.44) Inter-segment 130.37 567.07 21.23 29.20 123.55 220.18 Unallocable corporate 2268.71 998.10 39.11 32.57 873.85 995.01 Total 131.22 75.04 5.61 4.45 151.06 (514.43) 122.60 Total 997.40 crore Particulars Total (i)+(ii) Total foreign countries (ii) Other countries Bangladesh Qatar United Arab Emirates Kingdom of Saudi Arabia Foreign countries: India (i) (b) Geographical information Disclosure pursuant to Indian Accounting Standard (Ind AS) 108 "Operating Segment" (contd.) NOTE [47] Notes forming part of the Financial Statements (contd.) 303 Note: There is no impairment in non-financial assets of the segments. Unallocable corporate expenses include impairment loss of 103 crore for the year ended March 31, 2017 (previous year: Nil). 1884.65 1398.73 60.34 61.77 1215.19 Others 297.63 165.38 For the year ended 31-3-2017 For the year ended 31-3-2016 Additions to non-current assets For the year ended 31-3-2016 For the year ended 31-3-2017 Other non-cash expenses included in segment expense ended 31-3-2016 31-3-2017 ended included in segment expense For the year For the year Depreciation, amortisation, impairment & obsolescence Particulars crore 50793.25 57485.64 (591.30) (585.58) (535.96) (591.30) 89345.78 56184.08 99620.95 102196.82 Infrastructure 591.45 430.54 19.81 4.87 3.83 123.10 130.81 Electrical & Automation 231.09 92.98 3.31 2.49 110.84 LARSEN & TOUBRO 105.75 450.04 100.17 3.23 1.99 58.31 44.40 Power 1158.73 564.53 22.09 Heavy Engineering Operating Profit (PBIT) Unallocated corporate income/(expenditure) (net) Inter-segment margin on capital jobs 387.95 56.63 297.83 119.10 146.75 170.75 444.58 289.85 37.23 37.23 327.08 156.33 328.03 170.75 12.78 340.81 49.69 377.72 23.07 35.85 72.76 413.57 (h) Details of outstanding hedge instruments for which hedge accounting is followed: (i) Outstanding currency exchange rate hedge instruments: (A) Forward covers taken to hedge exchange rate risk and accounted as cash flow hedge: As at 31-3-2017 Particulars Nominal amount (crore) Average Within After Nominal rate twelve twelve amount (₹) months months (*crore) (crore) (crore) As at 31-3-2016 Average Within After Nominal rate twelve twelve amount (₹) months months (*crore) (crore) (crore) Total As at 1-4-2015 Average Within 30.21 26.42 20, 26 Borrowings 19, 23, 24 3731.18 Trade payables 25 22776.80 Other financial liabilities 20, 26 Total 1160.08 27668.06 7797.02 11528.20 5947.08 1255.03 24031.83 21217.48 81.09 1241.17 1007.55 9133.14 36801.20 28172.11 9295.07 15242.15 5040.48 998.44 22215.92 17215.16 89.79 1097.34 819.72 10383.30 38555.41 23075.36 9403.71 14444.19 1160.83 18376.00 72.69 10637.24 892.41 33712.60 B. Derivative liabilities Forward contracts 20, 26 267.62 Embedded derivatives 120.33 After rate twelve twelve (₹) months months (crore) (crore) (a) Receivable hedges 1184.17 0.66 467.82 220.92 164.74 15.58 1061.92 Bahraini Dinar 377.68 262.44 0.64 23.15 141.21 228.69 122.25 1681.41 19.07 18.98 158.12 2.35 94.05 2.35 159.10 103.34 207.39 0.70 0.16 207.23 118.06 23.15 165.75 211.81 165.75 1317.65 363.76 1477.36 17.78 1314.38 162.98 18.98 Particulars Nominal amount (crore) (₹) As at 31-3-2017 Average Within After Nominal rate twelve twelve amount months months (*crore) (crore) (crore) As at 31-3-2016 rate Average Within twelve months (crore) After Nominal twelve amount months (crore) (crore) As at 1-4-2015 Average Within After rate twelve twelve (₹) months months (*crore) (crore) (b) Payable hedges US Dollar 7232.88 EURO Qatari Riyal 187.89 Kuwaiti Dinar 845.50 US Dollar EURO Malaysian Ringgit 2817.69 66.87 2185.09 723.40 84.61 507.79 331.20 14.86 331.20 632.60 215.61 Saudi Riyal Omani Riyal Arab Emirates Dirham 324.75 172.04 309.74 15.01 1229.22 199.75 17.59 1029.47 A. Non-derivative liabilities 141.48 42.94 17.14 42.94 65.82 137.55 65.82 1149.04 17.78 1010.21 138.83 Canadian Dollar 9.41 50.29 9.41 British Pound 6.12 81.60 6.12 Japanese Yen 2572.61 66.75 1988.31 584.30 2026.73 66.34 1624.77 401.96 926.50 86.04 495.64 430.86 785.34 86.69 298.22 487.12 258.49 18.57 45.24 213.25 63.65 18.34 63.65 44.67 176.63 44.67 1097.11 18.83 955.63 62.41 6082.60 1150.28 71.72 1799.42 108.30 months months 6115.81 483.17 5632.64 4183.35 308.69 3874.66 4281.34 223.15 4058.19 2935.49 156.32 2779.17 3331.77 233.39 3098.38 6426.81 1.33 45646.44 409.50 45236.94 6425.48 46894.42 6938.79 5496.40 321.07 410.24 (1260.78) Particulars Disclosure pursuant to Indian Accounting Standard (Ind AS) 108 "Operating Segment" (contd.) NOTE [47(a)] Notes forming part of the Financial Statements (contd.) 5536.45 5891.64 384.36 492.07 436.59 520.39 (98.48) 530.88 112.84 201.18 4701.14 4147.12 63812.65 63812.65 (1286.08) (1286.08) (1260.78) 66301.35 66301.35 5906.64 46573.35 6938.79 Total For the year ended 31-3-2016 External Inter-segment As at 31-3-2016 Within After Within After Within As at 1-4-2015 After Particulars Note twelve twelve Total twelve twelve Total twelve twelve Total months months months As at 31-3-2017 crore LARSEN & TOUBRO (g) Maturity profile of financial liabilities: Total For the year ended 31-3-2017 External Inter-segment crore Total Others Electrical & Automation Heavy Engineering Power Segment result [Profit/(Loss) before interest and tax] Infrastructure Particulars months Total Others Electrical & Automation Heavy Engineering Power Infrastructure Revenue 302 (a) Information about reportable segment Notes forming part of the Financial Statements (contd.) NOTE [45] (contd.) Elimination 23.38 14.96 519.50 771.42 221.92 551.91 Sr. Executive Director no. no. 1. Mr. A. M. Naik (Group Executive Chairman) 2. Mr. K. Venkataramanan (CEO & Managing Director) Mrs. Jyothi Venkataramanan (wife) Executive Director * 3. Mr. M. V. Kotwal (Whole-time Director)** 4. Mr. S. N. Subrahmanyan (Whole-time Director) Mr. R. Shankar Raman (CFO & Whole-time Director) 6. Mr. Shailendra Roy (Whole-time Director) 7. 3 5 7 Mr. D. K. Sen (Whole-time Director) # Sr. Larsen & Toubro Gratuity Fund Provident Fund Trust no. 1. The Larsen & Toubro Officers & Supervisory Staff Provident Fund 2. The Larsen & Toubro Limited Provident Fund of 1952 3. The Larsen & Toubro Limited Provident Fund (iv) Name of key management personnel and their relatives with whom transactions were carried out during the year: 4. 5. L&T Kansbahal Staff & Workmen Provident Fund Sr. Gratuity Trust no. 1. Larsen & Toubro Officers & Supervisors Gratuity Fund 2. L&T Kansbahal Officers & Supervisory Provident Fund 8. Mr. M. V. Satish (Whole-time Director) ## 317 8. Mr. Akhilesh Krishna Gupta 9. Ms. Sunita Sharma *** 10. Mr. Bahram Vakil @@@ 11. Mr. Ajay Shankar $ Ms. Naina Lal Kidwai $$$ 12. 13. Mr. Sanjeev Aga @ 14. Mr. Narayanan Kumar @@ 15. Mr. Adil Zainulbhai 16. Mr. Swapan Dasgupta - *Retired on September 30, 2015 Mr. Subramanian Sarma $$ 7. Mr. Thomas Mathew T. ### 6. Notes forming part of the Financial Statements (contd.) NOTE [51] (iii) Name of key management personnel and their relatives with whom transactions were carried out during the year (contd.) Sr. Independent/Non-executive Director Sr. Independent/Non-executive Director no. no. 1. Mr. Subodh Bhargava 2. Mr. Vikram Singh Mehta 3. Mr. Sushobhan Sarker 4. Mr. M. M. Chitale 5. Mr. M. Damodaran Sr. (iii) Name of post-employment benefit plans with whom transactions were carried out during the year: L&T Kobelco Machinery Private Limited 32. Larsen & Toubro Electromech LLC 2. L&T-Sargent & Lundy Limited 3. L&T IDPL Trustee Manager Pte. Ltd. 4. L&T Chennai-Tada Tollway Limited 5. 1. L&T BPP Tollway Limited L&T Rajkot-Vadinar Tollway Limited 7. L&T Deccan Tollways Limited 8. L&T Samakhiali Gandhidham Tollway Limited 9. Kudgi Transmission Limited 10. 6. no. no. Joint ventures 1 L&T-Chiyoda Limited 2 Feedback Infra Private Limited 3 Salzer Electronics Limited* 4 JSK Electricals Private Limited # 5 Magtorq Private Limited * The Company has sold its stake in July and August, 2015 # The Company has sold its stake on March 29, 2016 Notes forming part of the Financial Statements (contd.) NOTE [51] (contd.) (ii) Names of joint ventures with whom transactions were carried out during the year: LARSEN & TOUBRO Sr. Joint ventures Sr. L&T Sambalpur-Rourkela Tollway limited **Retired on August 26, 2015 11. 12. 23. L&T Howden Private Limited 24. 25. L&T Sapura Offshore Private Limited 26. 27. L&T-MHPS Boilers Private Limited Devihalli Hassan Tollway Limited (formerly known as L&T Devihalli Hassan Tollway Limited) 28. Raykal Aluminium Company Private Limited 30. L&T Sapura Shipping Private Limited L&T-Gulf Private Limited L&T-MHPS Turbine Generators Private Limited L&T Special Steels and Heavy Forgings Private Limited 31. PNG Tollway Limited 29. 22. L&T Krishnagiri Walajahpet Tollway Limited 21. Panipat Elevated Corridor Limited (formerly known as L&T Panipat Elevated Corridor Limited) 13. Krishnagiri Thopur Toll Road Limited (formerly known as L&T Krishnagiri Thopur Toll Road Limited) 14. Western Andhra Tollways Limited (formerly known as L&T Western Andhra Tollways Limited) 15. Vadodara Bharuch Tollway Limited (formerly known as L&T Vadodara Bharuch Tollway Limited) 16. L&T Transportation Infrastructure Limited 17. L&T Western India Tollbridge Limited 18. L&T Port Kachchigarh Limited 19. Ahmedabad-Maliya Tollway Limited (formerly known 20. L&T Halol-Shamlaji Tollway Limited as L&T Ahmedabad-Maliya Tollway Limited) L&T Infrastructure Development Projects Limited no. # Appointed w.e.f. October 1, 2015 Appointed w.e.f. April 1, 2015 Subsidiary L&T Infocity Limited** 10 Yes Subsidiary Kesun Iron and Steel Company Private Limited 9 Yes Yes Wholly owned subsidiary 8 Yes Wholly owned subsidiary Hi-Tech Rock Products & Aggregates Limited 7 Yes Wholly owned subsidiary L&T Electricals and Automation Limited L&T Seawoods Limited 6 11 Subsidiary of L&T Infocity Limited Wholly owned subsidiary Wholly owned subsidiary Subsidiary L&T Realty Limited 16 L&T Valves Limited 15 L&T Geostructure LLP L&T Hitech City Limited** 14 Wholly owned subsidiary EWAC Alloys Limited 13 Yes Subsidiary of L&T Infocity Limited Hyderabad International Trade Expositions Limited** 12 Yes Yes Yes Subsidiary L&T Shipbuilding Limited Sr. (a) List of related parties over which control exist and status of transactions entered during the year: Related Party Disclosures". Disclosure of related parties/related party transactions pursuant to Ind AS 24 All the above defined benefit plans expose the Company to general Actuarial risks such as Interest rate risk and market (investment) risk. The interest payment obligation of trust-managed provident fund is assumed to be adequately covered by the interest income on long term investments of the fund. Any shortfall in the interest income over the interest obligation is recognised immediately in the Statement of Profit and Loss as actuarial loss. Any loss/gain arising out of the investment risk and actuarial risk associated with the plan is also recognised as expense or income in the period in which such loss/ gain occurs. The Company manages provident fund plan through a provident fund trust for its employees which is permitted under the Provident Fund and Miscellaneous Provisions Act, 1952. The plan mandates contribution by employer at a fixed percentage of employee's salary. Employees also contribute to the plan at a fixed percentage of their salary as a minimum contribution and additional sums at their discretion. The plan guarantees interest at the rate notified by Employees' Provident Fund Organisation. The contribution by employer and employee together with interest are payable at the time of separation from service or retirement whichever is earlier. The benefit under this plan vests immediately on rendering of service. 4. Name of the related party NOTE [51] NOTE [50] Notes forming part of the Financial Statements (contd.) LARSEN & TOUBRO In addition to contribution to state-managed pension plan (EPS scheme), the Company operates a post retirement pension scheme, which is discretionary in nature for certain cadres of employees. The quantum of pension depends on the cadre of the employee at the time of retirement. The plan is unfunded. Employees do not contribute to the plan. The Post-retirement medical care plan provides for reimbursement of health care costs to certain categories of employees post their retirement. The reimbursement is subject to an overall ceiling sanctioned based on cadre of the employee at the time of retirement. The plan is unfunded. Employees do not contribute to the plan. Company's pension plan: Post-retirement medical care plan: The Company operates gratuity plan through a trust wherein every employee is entitled to the benefit equivalent to fifteen days last salary drawn for each completed year of service. The same is payable on termination of service or retirement whichever is earlier. The benefit vests after five years of continuous service. The Company's scheme is more favourable as compared to the obligation under Payment of Gratuity Act, 1972. The defined benefit plan for gratuity of the Company is administered by separate gratuity funds that are legally separate from the Company. The trustees nominated by the Company are responsible for the administration of the plan. There are no minimum funding requirements of these plans. The funding of these plans are based on gratuity funds actuarial measurement framework set out in the funding policies of the plan. These actuarial measurements are similar compared to the assumptions set out in (g) supra. A small part of the gratuity plan, which is not material, is unfunded and managed by the Company. Employees do not contribute to any of these plans. 3. Disclosure pursuant to Ind AS 19 "Employee Benefits" (contd.) Trust managed provident fund plan: Nature of relationship no. Transaction entered during the year 5 Limited ADDA Yes Wholly owned subsidiary of L&T Hydrocarbon Engineering L&T-Valdel Engineering Limited %% 4 Yes Wholly owned subsidiary Spectrum Infotech Private Limited 3 Yes Yes Wholly owned subsidiary Subsidiary Bhilai Power Supply Company Limited 2 L&T Cutting Tools Limited 1 (Yes/No) Yes Yes Yes 17 L&T-MHPS Turbine Generators Private Limited Associates, including: JSK Electricals Private Limited Total Salzer Electronics Limited Feedback Infra Private Limited L&T-Chiyoda Limited Magtorq Private Limited L&T-MHPS Boilers Private Limited crore 2015-16 Amount Amounts for major parties Amount Amounts for major parties 1121.13 850.31 428.06 169.61 249.71 142.12 2016-17 Joint ventures, including: Larsen & Toubro Readymix and Asphalt Concrete Industries LLC L&T Geostructure LLP $ Appointed w.e.f. May 30, 2015 $$$ Appointed w.e.f. March 1, 2016 @@ Appointed w.e.f. May 27, 2016 ~ Appointed w.e.f. April 1, 2015 and Separated w.e.f. May 15, 2016 (c) Disclosure of related party transactions: ## Appointed w.e.f. January 29, 2016 ### Appointed w.e.f. April 3, 2015 $$ Appointed w.e.f. August 19, 2015 @ Appointed w.e.f. May 25, 2016 @@@ Separated w.e.f. August 1, 2016 318 Sr. Nature of transaction/relationship/major parties no. i. Subsidiaries, including: Purchase of goods & services (including commission paid) L&T Shipbuilding Limited Hi-Tech Rock Products and Aggregates Limited 172.14 *** 96.07 1910.69 Subsidiary of L&T Realty Limited L&T Vision Ventures Limited 21 Yes Subsidiary of L&T Realty Limited L&T South City Projects Limited % 20 Yes Yes Wholly owned subsidiary of L&T Realty Limited 19 Yes Subsidiary of L&T Realty Limited L&T Parel Project LLP 18 Yes Subsidiary of L&T Realty Limited L&T Asian Realty Project LLP Chennai Vision Developers Private Limited 22 L&T Power Limited Subsidiary 1675.16 530.79 1256.68 536.02 7.01 74.54 27.99 37.33 2.58 1.10 3.33 3452.06 2835.54 Subsidiary L&T Cassidian Limited 24 Yes Wholly owned subsidiary of L&T Realty Limited CSJ Infrastructure Private Limited* 23 Yes 2323.92 316 Sr. Associate companies (b) (i) Names of associates with whom transactions were carried out during the year: Yes Yes Yes 53 L&T Metro Rail (Hyderabad) Limited Wholly owned subsidiary Yes 54 Yes L&T Technology Services Limited Yes 55 L&T Construction Equipment Limited Wholly owned subsidiary Yes 56 L&T Infrastructure Engineering Limited Wholly owned subsidiary Subsidiary Yes Yes Yes 47 48 L&T Power Development Limited 49 L&T Uttaranchal Hydropower Limited L&T Arunachal Hydropower Limited Wholly owned subsidiary Wholly owned subsidiary of L&T Capital Company Limited Wholly owned subsidiary à à à à à à à Wholly owned subsidiary of L&T Power Development Limited 51 L&T Himachal Hydropower Limited Wholly owned subsidiary of L&T Power Development Limited 662 52 Nabha Power Limited Wholly owned subsidiary of L&T Power Development Limited Yes Wholly owned subsidiary of L&T Power Development Limited 57 L&T Thales Technology Services Private Limited Subsidiary of L&T Technology Services Limited Subsidiary of L&T Infotech Limited No LARSEN & TOUBRO 70 71 72 Notes forming part of the Financial Statements (contd.) NOTE [51] AugmentIQ Data Sciences Private Limited ## (a) List of related parties over which control exist and status of transactions entered during the year (contd.) Name of the related party no. 64 65 L&T Infra Contractors Private Limited ### Larsen & Toubro LLC 66 Larsen & Toubro Infotech, GmbH 67 Larsen & Toubro Infotech Canada Limited Sr. 63 Yes Subsidiary Yes 58 L&T Hydrocarbon Engineering Limited Wholly owned subsidiary Yes 59 Sahibganj Ganges Bridge-Company Private Limited^ Wholly owned subsidiary of L&T Capital Limited Yes 60 Seawoods Retail Private Limited^^ Wholly owned subsidiary Yes 61 Seawoods Realty Private Limited^^^ Wholly owned subsidiary Yes 62 Marine Infrastructure Developer Private Limited L&T Capital Company Limited 46 L&T Trustee Company Private Limited 50 Transaction entered during the year (Yes/No) Wholly owned subsidiary 43 L&T Infra Investment Partners Trustee Private Limited 42 L&T Infra Investment Partners Advisory Private Limited 41 L&T Infra Debt Fund Limited Yes 40 39 L&T FinCorp Limited ~ 38 L&T Mutual Fund Trustee Limited 37 L&T Investment Management Limited 36 L&T Capital Markets Limited L&T Infrastructure Finance Company Limited Yes Yes No Yes Yes Wholly owned subsidiary of L&T Finance Holdings Limited Wholly owned subsidiary of L&T Financial Consultants Limited (formerly known as L&T Vrindavan Properties Limited) Yes Wholly owned subsidiary of L&T Finance Holdings Limited No Yes Yes Yes Yes Wholly owned subsidiary of L&T Infrastructure Finance Company Limited Wholly owned subsidiary of L&T Finance Holdings Limited Wholly owned subsidiary of L&T Finance Holdings Limited Wholly owned subsidiary of L&T Finance Holdings Limited Wholly owned subsidiary of L&T Finance Holdings Limited Wholly owned subsidiary of L&T Finance Holdings Limited Wholly owned subsidiary of L&T Infrastructure Finance Company Limited Wholly owned subsidiary L&T Financial Consultants Limited (formerly known as L&T Vrindavan Properties Limited) No Yes Yes Yes Yes 35 68 L&T Finance Limited ~ 33 28 L&T Aviation Services Private Limited 27 Yes Wholly owned subsidiary L&T General Insurance Company Limited*** 26 Yes Larsen & Toubro Infotech Limited Wholly owned subsidiary of L&T Housing Finance Limited 25 Yes 44 L&T Access Distribution Services Limited 45 Mudit Cement Private Limited 314 50 Consumer Financial Services Limited %%% Wholly owned subsidiary Subsidiary Yes Yes L&T Infra Investment Partners # 32 L&T Housing Finance Limited 31 L&T Finance Holdings Limited 30 GDA Technologies Limited @@@ 29 L&T Finance Limited (formerly known as Family Credit Limited) Wholly owned subsidiary of L&T Finance Holdings Limited Wholly owned subsidiary of L&T Finance Holdings Limited Subsidiary of L&T Infrastructure Finance Company Limited Wholly owned subsidiary of Larsen & Toubro Infotech Limited Subsidiary Nature of relationship no. Name of the related party Sr. (a) List of related parties over which control exist and status of transactions entered during the year (contd.) NOTE [51] Notes forming part of the Financial Statements (contd.) 313 34 Larsen & Toubro Infotech LLC 69 L&T Infotech Financial Services Technologies Inc. Subsidiary of Larsen & Toubro International FZE Yes 315 Notes forming part of the Financial Statements (contd.) NOTE [51] (a) List of related parties over which control exist and status of transactions entered during the year (contd.) Sr. Name of the related party Yes no. Transaction entered during the year (Yes/No) 96 L&T Electrical & Automation FZE Wholly owned subsidiary of Larsen & Toubro International Yes FZE 97 Kana Controls General Trading & Contracting Company WLL Subsidiary of L&T Electrical & Automation FZE Nature of relationship Subsidiary of Larsen & Toubro International FZE Larsen & Toubro Heavy Engineering LLC PT Tamco Indonesia 90 Henikwon Corporation SDN. BHD Wholly owned subsidiary of Tamco Switchgear (Malaysia) SDN. BHD Yes 91 Larsen & Toubro Consultoria E Projeto Ltda @ Subsidiary of Larsen & Toubro International FZE No 92 Larsen & Toubro (Qingdao) Rubber Machinery Company Limited @@ Wholly owned subsidiary of Larsen & Toubro International FZE Yes 93 Tamco Electrical Industries Australia Pty Ltd. Wholly owned subsidiary of Larsen & Toubro International FZE No ཙ$ 94 95 No Yes 98 Subsidiary of Larsen & Toubro International FZE Yes Wholly owned subsidiary of L&T Capital Company Limited Wholly owned subsidiary of L&T Capital Company Limited Wholly owned subsidiary of L&T Capital Company Limited * The Company through its subsidiary has sold its stake on November 16, 2015 ** The Company through its subsidiary has sold its stake on March 31, 2016 *** The Company has sold its stake on September 9, 2016 @ The Company is dissolved on November 6, 2015 @@ The Company is dissolved on June 9, 2015 @@@ The Company is merged with Larsen & Toubro Infotech Limited w.e.f. April 1, 2016 Yes ~ The Company is merged with Family Credit Limited (subsequently renamed as L&T Finance Limited) w.e.f. April 1, 2016 ^^ The Company is incorporated on September 2, 2016 ^^^ The Company is incorporated on October 23, 2016 # The Fund is incorporated on August 22, 2013 ## The Company through its subsidiary acquired stake on November 30, 2016 ### The Company is incorporated on March 17, 2017 % The Company through its subsidiary has sold its stake on March 20, 2017 %% The Company is merged with L&T Hydrocarbon Engineering Limited w.e.f. April 1, 2016 %%% The Company is merged with L&T Housing Finance Limited w.e.f. April 1, 2015 %%%% Companies merged with L&T Capital Company Limited with effect from April 1, 2015 ^ The Company is incorporated on July 14, 2016 Yes No L&T Powergen Limited %%%% Yes 99 L&T Technology Services LLC Wholly owned subsidiary of L&T Technology Services Limited Yes 100 L&T Infotech Austria GmbH Wholly owned subsidiary of Larsen & Toubro Infotech Limited No 101 L&T Global Holdings Limited Wholly owned subsidiary 102 L&T Information Technology Spain SL Wholly owned subsidiary of Larsen & Toubro Infotech Limited 103 L&T Natural Resource Limited %%%% 104 L&T Solar Limited %%%% 105 Larsen & Toubro T&D SA (Proprietary) Limited 2. Wholly owned subsidiary of Larsen & Toubro International FZE 89 75 Larsen & Toubro Hydrocarbon International Limited LLC Thalest Limited Wholly owned subsidiary of L&T Global Holdings Limited Subsidiary Yes No Wholly owned subsidiary of Larsen & Toubro International No FZE 74 17 Servowatch Systems Limited Wholly owned subsidiary of Thalest Limited Yes 77 Larsen & Toubro (Oman) LLC Subsidiary of Larsen & Toubro International FZE Yes 78 76 Larsen & Toubro International FZE 73 No Larsen & Toubro Infotech South Africa (PTY) Limited L&T Information Technology Services (Shanghai) Co. Ltd. L&T Realty FZE Nature of relationship Wholly owned subsidiary of L&T Capital Limited Subsidiary Wholly owned subsidiary of Larsen & Toubro Infotech Limited Wholly owned subsidiary of Larsen & Toubro Infotech Limited Wholly owned subsidiary of Larsen & Toubro Infotech Limited Wholly owned subsidiary of Larsen & Toubro Infotech Limited Subsidiary of Larsen & Toubro Infotech Limited Subsidiary Transaction entered during the year (Yes/No) No No Yes No 은은 No No No No Wholly owned subsidiary of L&T Realty Limited L&T Modular Fabrication Yard LLC Tamco Switchgear (Malaysia) SDN. BHD Subsidiary of Larsen & Toubro International FZE 79 Larsen & Toubro Kuwait Construction General Contracting Company WLL Subsidiary of Larsen & Toubro International FZE Yes 85 Larsen & Toubro Readymix & Asphalt Concrete Industries LLC Subsidiary of Larsen & Toubro International FZE Yes 86 84 Larsen & Toubro (Saudi Arabia) LLC Larsen Toubro Arabia LLC Subsidiary Subsidiary Yes Yes 88 Larsen & Toubro ATCO Saudia LLC Subsidiary of Larsen & Toubro International FZE Yes 87 LLC Yes No Larsen & Toubro (East Asia) SDN. BHD 80 Larsen & Toubro Qatar LLC 81 L&T Overseas Projects Nigeria Limited 82 PT Larsen & Toubro Hydrocarbon Engineering Indonesia 83 L&T Electricals & Automation Saudi Arabia Company Limited Subsidiary Subsidiary of Larsen & Toubro International FZE Wholly owned subsidiary of Larsen & Toubro International FZE Subsidiary of Larsen & Toubro International FZE Subsidiary of Larsen & Toubro International FZE Yes Yes No Á Z Yes (h) Characteristics of defined benefit plans and associated risks: Gratuity plan: Yes 28.10 (79.29) (64.99) 439.61 Closing balance of the plan assets Less: Benefits paid 173.58 170.01 Add: Contribution by plan participants 5.61 (251.04) (277.84) 3.64 66.22 64.75 68.41 44.77 Add: Contribution by the employer 10.55 10.02 (2.49) Add/(less): Transfer in/(out) 46.42 385.85 2156.30 1990.14 The Trust formed by the Company manages the investments of provident funds and gratuity fund. Interest income on plan assets is determined by multiplying the fair value of the plan assets by the discount rate stated in (g)(i) below both determined at the start of the annual reporting period. 2.41 2.41 Cash and cash equivalents Total As at 1-4-2015 Unquoted Quoted Total As at 31-3-2016 Quoted Unquoted Basis used to determine interest income on plan assets: Total Quoted Particulars Gratuity plan crore The fair value of major categories of plan assets are as follows: (e) # Employer's and employees' contribution due towards Provident Fund. The Company expects to fund ₹ 6.18 crore (previous year: 29.85 crore) towards its gratuity plan and 73.21 crore (previous year: 79.93 crore) towards its trust-managed provident fund plan during the year 2017-18. As at 31-3-2017 Unquoted Difference between actual return on plan assets and interest income Add/(Less): Actuarial gains/(losses) * 312.75 155.58 185.64 468.40 517.73 benefit obligation Closing balance of the present value of defined 0.18 283.25 2146.56 1996.84 (0.18) (15.65) (251.04) (277.84) 49.58 13.13 6.83 (17.74) 0.18 (1.57) (6.14) (79.29) (8.14) (7.51) 0.97 Add: Past service cost (64.99) Less: Benefit paid 0.09 Add/(less): Translation adjustments 309 Notes forming part of the Financial Statements (contd.) NOTE [50] Add: Interest income on plan assets Opening balance of the fair value of the plan assets 154.87 168.78 34.51 27.56 1857.15 385.85 As at 31-3-2016 Trust-managed provident fund plan As at 31-3-2017 As at 31-3-2016 31-3-2017 As at Particulars Gratuity Plan crore (d) Changes in the fair value of plan assets representing reconciliation of the opening and closing balances thereof are as follows: 310 Disclosure pursuant to Ind AS 19 "Employee Benefits" (contd.) 0.41 0.41 0.78 0.78 1.20 1.15 1.15 Other (payables)/receivables Advances taken Special deposit scheme Fixed deposits 0.10 1.20 0.10 0.50 0.50 0.50 0.50 0.50 0.50 Debt Mutual funds Mutual funds Others 3.05 3.05 1.46 385.85 83.66 302.19 100.24 439.61 | Closing balance of the plan assets 339.37 10.42 10.42 (15.40) (15.40) (115.00) (115.00) (175.00) (175.00) (175.00) (175.00) 1.46 1.46 1.46 1.46 1.46 83.35 adjustments 83.35 54.55 135.01 government bonds Debt instruments - Central 136.44 21.63 114.81 185.30 71.88 113.42 216.77 135.01 150.47 Debt instruments - Corporate bonds 7.13 7.13 6.71 6.71 14.89 14.89 Equity instruments 66.30 128.16 128.16 145.21 63.87 63.87 Mutual funds - Equity 36.08 36.08 76.70 76.70 70.68 70.68 Debt instruments PSU bonds 53.49 53.49 95.44 95.44 123.17 123.17 government bonds Debt instruments - State 145.21 54.55 from changes in experience i) Actuarial (gains)/losses arising (17.91) 19.89 7 Actuarial gain/(loss) not recognised in Books 49.58 0.97 6 Past service cost (10.55) (10.02) 2.49 28.46 (46.42) 5 Actuarial losses/(gains) - difference between (17.91) (9.87) 14.14 23.63 (5.09) 15.69 1.37 actual return on plan assets and interest income 8 Translation adjustments 0.19 9 Amount capitalised out of the above/ 57.70 67.30 expense" Amount included in "employee benefits i 72.66 66.55 83.26 47.24 14.18 38.19 57.08 40.61 Total (1 to 9) (0.01) (0.01) (0.20) (0.10) recovered from S&A 19.37 10.82 4 Actuarial losses/(gains) - others (168.78) 2015-16 2016-17 2015-16 2016-17 2015-16 2016-17 Trust-managed provident fund plan Company pension plan 2016-17 Post-retirement medical benefit plan Gratuity Plan crore LARSEN & TOUBRO (b) The amounts recognised in the Statement of Profit and Loss are as follows: Disclosure pursuant to Ind AS 19 "Employee Benefits" (contd.) NOTE [50] Notes forming part of the Financial Statements (contd.) 1. Particulars 2015-16 1 Current service cost 67.21 (34.51) (27.56) 3 Interest income on plan assets 154.87 168.78 16.30 21.14 11.27 11.68 30.03 27.92 2 Interest cost 72.66 66.55 3.24 2.47 7.04 10.83 57.90 (154.87) 227.46 8.00 52.82 30.03 27.92 Add: Interest cost 72.66 66.55 3.24 2.47 1884.75 11.68 1996.84 148.90 7.04 10.83 57.90 67.21 Add: Current service cost 155.58 458.21 468.40 283.25 215.64 11.27 21.14 16.30 (9.87) 1.01 16.80 1.05 17.26 1.19 19.28 assumptions from changes in financial i) Actuarial (gains)/losses arising Add/(less): Actuarial losses/(gains) 5.61 174.70 171.66 3.64 ii) Transfer-in/(out) i) Employee Add: Contribution by plan participants 154.87 168.78 benefit obligation 2.47 Opening balance of the present value of defined Trust-managed provident fund plan As at 31-3-2017 Total (i + ii + iii) 14.14 23.63 (5.09) 15.69 3.86 (27.05) comprehensive income" Actual return on plan assets iii Amount included as part of "other 21.14 11.27 11.68 (4.48) 0.36 ii Amount included as part of "finance cost" 72.66 66.55 16.30 40.61 73.98 57.08 38.19 As at 31-3-2016 As at 31-3-2017 As at 31-3-2016 benefit plan As at 31-3-2017 As at 31-3-2016 As at 31-3-2017 Particulars Post-retirement medical Company pension plan Gratuity Plan crore (c) The changes in the present value of defined benefit obligation representing reconciliation of opening and closing balances thereof are as follows: 165.42 178.80 31.95 72.66 66.55 83.26 47.24 14.18 As at 31-3-2016 12.22 137.25 364.71 1990.14 364.71 As at 31-3-2017 As at 31-3-2016 As at 1-4-2015 i) Discount rate: (a) Gratuity plan 7.19% 7.79% 7.83% (b) Company pension plan 7.19% 7.79% 7.83% (c) Post-retirement medical benefit plan 7.19% 7.79% 7.83% ii) Annual increase in healthcare costs (see note below) 5.00% 5.00% 5.00% iii) Salary Growth rate: Particulars (g) Principal actuarial assumptions at the Balance Sheet date (expressed as weighted averages): 18.55 15.85 204.55 204.55 207.65 1151.75 838.39 1990.14 990.24 866.91 207.65 1857.15 (f) The average duration of the defined benefit plan obligations at the end of the reporting period is as follows: Plans 1. Gratuity plan (a) Gratuity plan 2. Company pension plan Post-retirement medical benefit plan As at 31-3-2017 As at 31-3-2016 As at 1-4-2015 7.53 7.19 7.06 8.02 8.04 9.60 16.65 3. (b) Company pension plan 5.00% 5.00% (B) One percentage point change in actuarial assumptions would have the following effects on the defined benefit obligation of company pension plan: Particulars Impact of change in discount rate crore Effect of 1% increase 2016-17 (25.62) 2015-16 (21.60) Effect of 1% decrease 2016-17 26.15 2015-16 25.04 (C) One percentage point change in actuarial assumptions would have the following effects on the defined benefit obligation of post-retirement medical benefit plan: 32.22 crore Effect of 1% decrease Particulars Impact of change in health care cost 2016-17 22.91 2015-16 18.19 Impact of change in discount rate (27.42) (21.97) 2016-17 (18.36) 35.33 2015-16 (14.66) Effect of 1% increase 199.83 2156.30 36.29 (32.01) 5.00% 6.00% 6.00% 6.00% iv) Attrition Rate: v) (a) For post-retirement medical benefit plan and Company pension plan, the attrition rate varies from 2% to 8% (previous year: 2% to 8%) for various age groups. (b) For gratuity plan the attrition rate varies from 1% to 6% (previous year: 1% to 6%) for various age groups. The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. vi) The interest payment obligation of trust-managed provident fund is assumed to be adequately covered by the interest income on long term investments of the fund. Any shortfall in the interest income over the interest obligation is recognised immediately in the statement of Profit and Loss. 311 2015-16 (28.77) Notes forming part of the Financial Statements (contd.) vii) The obligation of the Company under the post-retirement medical benefit plan is limited to the overall ceiling limits. At present, healthcare cost, as indicated in the principal actuarial assumption given above, has been assumed to increase at 5.00% p.a. viii) (A) One percentage point change in actuarial assumptions would have the following effects on the defined benefit obligation of gratuity plan: 312 Particulars 12.22 crore Effect of 1% increase 2016-17 36.73 (31.16) Effect of 1% decrease 2015-16 2016-17 32.84 (27.81) NOTE [50] Disclosure pursuant to Ind AS 19 "Employee Benefits" (contd.) 1.30 Impact of change in salary growth rate Impact of change in discount rate 12.14 Disclosure pursuant to Ind AS 19 "Employee Benefits" (contd.) LARSEN & TOUBRO crore Trust-managed provident fund plan Particulars Quoted As at 31-3-2017 Unquoted As at 31-3-2016 As at 1-4-2015 Total Quoted Unquoted Total Quoted Unquoted Total Cash and cash equivalents 8.77 8.77 6.95 6.95 8.98 8.98 Debt instruments - Corporate bonds 225.16 83.05 308.21 93.47 81.23 174.70 1.30 Notes forming part of the Financial Statements (contd.) NOTE [50] Mutual funds - Debt 97.07 137.79 Debt instruments - Central government bonds 433.43 40.72 433.43 494.73 494.73 451.10 451.10 Debt instruments - State government bonds 451.64 252.00 Mutual funds Equity 7.37 Debt instruments - PSU bonds Special deposit scheme 773.83 276.50 311.63 276.50 2.70 14.02 14.02 12.14 451.64 311.63 698.47 251.92 446.47 45.88 2.70 199.83 786.70 1369.60 Closing balance of the plan assets 53.25 77.32 102.69 256.39 65.55 L&T-MHPS Boilers Private Limited 435.67 535.68 396.97 Joint ventures, including: Nabha Power Limited Larsen and Toubro (Saudi Arabia) LLC 115.04 crore 324 146.45 10.35 21.42 4.06 As at 31-3-2017 *** 63.49 117.65 4.06 4.37 (d) Amount due to/from related parties: ^ Represents fair value of employee stock options granted during 2015-16 to be vested over a period of time. The fair value of the stock options is being recovered from L&T Hydrocarbon Engineering Limited over the period of vesting. 51.19 253.41 Sr. Amount 297.99 202.25 L&T Infrastructure Development Projects Limited 212.29 L&T Metro Rail (Hyderabad) Limited 1007.57 926.92 Nature of transaction/relationship/major parties 535.22 Accounts receivable Amounts for major parties As at 1-4-2015 Amount As at 31-3-2016 Amount Amounts for major parties Amounts for major parties no. Subsidiaries, including: 78.42 0.98 111.56 1.19 94.99 97.38 L&T Geostructure LLP 108.78 Tamco Switchgear (Malaysia) SDN BHD 75.54 Joint ventures, including: 1843.77 1676.32 1414.86 L&T-MHPS Boilers Private Limited L&T-MHPS Turbine Generators Private Limited 1171.07 605.53 1042.25 555.34 830.70 547.20 Assosiates, including: 1.99 5.35 22.81 Feedback Infra Private Limited Magtorq Private Limited 1.27 0.57 118.89 129.61 Larsen and Toubro (Oman) LLC Hi-Tech Rock Products and Aggregates Limited L&T Samakhiali Gandhidham Tollway Limited 43.30 3.18 Represents encashment of past service accumulated leave 58.20 89.13 L&T Deccan Tollways Limited 125.63 139.21 90.97 L&T Krishnagiri Walajahpet Tollway Limited 44.68 Total 932.19 1462.60 1443.24 ii. Accounts payables, including other payables Subsidiaries, including: 635.25 601.89 379.38 Larsen and Toubro Infotech Limited 77.60 103.27 $$ Appointed w.e.f. January 29, 2016 0.93 $ Appointed w.e.f. October 1, 2015 59.73 60.00 48.15 11.85 60.00 "Major parties" denote entities account for 10% or more of the aggregate for that category of transaction during respective period. # The scheme of arrangement between L&T Valves Limited and L&T Electrical & Automation Limited was approved by National Company Law Tribunal on April 27, 2017 with appointed date as November 1, 2016. Pursuant to the scheme L&T Electrical & Automation Limited issued 73,88,796 shares to Larsen & Toubro Limited as a consideration towards transfer of certain assets by L&T Valves Limited. The value of shares issued is derived based on fair value of assets transferred to the total value of assets of L&T Valves Limited as at appointed date. Accordingly the value of investment in L&T Electrical and Automation Limited was increased by 40.31 crore and reduced in L&T Valves Limited by 40.31 crore during the year 2016-17. ## Pursuant to the scheme of demerger approved by National Company Law Tribunal (NCLT), the existing share capital of Marine Infrastructure Developer Limited held by L&T Shipbuilding Limited stands cancelled. The Company has now acquired 38,80,00,000 equity shares of Marine Infrastructure Developer limited for a consideration of 388 crore from L&T Shipbuilding Limited. The acquisition has been completed on March 31, 2017. Further, 38,80,00,000 equity shares of L&T Shipbuilding Limited held by the Company have been extinguished and 38,80,00,000 9% non-cumulative, optionally convertible and redeemable preference shares of 10 each have been issued to the Company in lieu of the same on March 29, 2017. 323 Notes forming part of the Financial Statements (contd.) NOTE [51] (contd.) xx. Compensation paid to key management personnel: crore 2016-17 Key Management Personnel Short term Post- employee employment Other long term short term post- 2015-16 Other share-based Total employee employment long term Total benefits benefits benefits 29.85 12.00 6.26 47.73 51.52 52.05 6.64 6.65 Total 59.68 60.26 (ii) Towards advance contribution: 0.43 The Larsen & Toubro Limited Provident Fund Total 0.43 0.43 (iii) Subscription or purchase by the fund of the debt securities issued by the company: benefits benefits The Larsen & Toubro Officers & Supervisory Staff Provident Fund 25.00 25.00 Total (b) Transaction with approved gratuity fund (i) Towards Employer's contribution: Larsen & Toubro Officers & Supervisors Gratuity Fund Larsen & Toubro Gratuity Fund Total (ii) Towards advance contribution: Larsen & Toubro Officers & Supervisors Gratuity Fund Larsen & Toubro Gratuity Fund Total 29.85 59.73 23.59 25.00 benefits payments Mr. A. M. Naik 1.93 10.06 6.43 1.47 7.90 Mr. D. K. Sen $ 6.20 1.57 7.77 2.60 0.69 3.29 Mr. M. V. Satish $$ 5.96 8.13 1.44 Total 0.24 1.17 Mr. Subramanian Sarma (Non-executive director) 10.35^ 10.35 Other non-executive directors 4.37 Total 68.78 16.66 32.21 * Retired on September 30, 2015 7.40 ** Retired on August 26, 2015 Mr. Shailendra Roy 2.19 21.86 *** 5.83 32.21 59.90 21.57 5.76 27.33 Mr. K. Venkataramanan* 4.74 22.43 13.53 40.70 Mr. M. V. Kotwal** 10.47 3.35 7.89 26.59 Mr. S. N. Subrahmanyan 13.26 3.51 16.77 11.53 3.06 14.59 Mr. R. Shankar Raman 9.00 2.38 11.38 8.28 15.35 L&T-Chiyoda Limited 441.95 2481.01 17.96 18.24 53.83 51.30 55.58 Mr. M. V. Satish Mr. D. K. Sen Mr. M. V. Kotwal** Mr. Shailendra Roy Mr. R. Shankar Raman Mr. K. Venkataramanan* Mr. S. N. Subrahmanyan (Key management personnel) Mr. A. M. Naik Due to whole-time directors #: viii. 586.11 266.74 113.33 Total 13.46 21.54 L&T-MHPS Boilers Private Limited 96.03 36.97 L&T Deccan Tollways Limited 122.24 18.19 3.77 7.39 11.29 1.51 5.30 L&T Construction Equipment Limited 1.77 1.51 8.93 Subsidiaries, including: ix. (a) Capital commitments given Total 53.83 51.30 55.58 68.84 0.73 2.13 4.93 4.91 2.04 4.48 4.40 5.84 6.91 6.90 7.41 8.73 9.90 4.32 L&T Infrastructure Development Projects Limited 228.85 119.26 57.25 12.25 45.00 9.25 5.52 Total L&T Construction Equipment Limited 9.25 L&T Cutting Tools Limited 5.52 L&T Hydrocarbon Engineering Ltd 57.25 9.25 325 5.52 Unsecured loans (including lease finance) vi. 1986.84 5.25 6.35 Total 6.35 L&T Metro Rail (Hyderabad) Limited 421.86 L&T Shipbuilding Limited The Larsen & Toubro Officers & Supervisory Staff Provident Fund The Larsen & Toubro Limited Provident Fund of 1952 648.29 Subsidiaries: 0.24 Notes forming part of the Financial Statements (contd.) (d) Amount due to/from related parties: (contd.) 23.21 Joint ventures, including: 223.24 82.95 L&T Seawoods Limited 129.40 73.15 L&T Metro Rail (Hyderabad) Limited 357.26 147.48 90.12 Subsidiaries, including: the Balance Sheet NOTE [51] vii. Advances received in the capacity of supplier of goods/ services classified as "advances from customers" in Amount Amount Amounts for major parties Amounts for major parties no. Amount Nature of transaction/relationship/major parties Sr. As at 1-4-2015 As at 31-3-2016 As at 31-3-2017 crore 326 Amounts for major parties Salzer Electronics Limited Larsen and Toubro (Oman) LLC L&T Technology Services Limited Total 627.85 464.43 68.64 iv. Loans and advances recoverable Subsidiaries, including: L&T Shipbuilding Limited L&T Hydrocarbon Engineering Limited Nabha Power Limited 1587.64 3197.90 4738.83 1357.61 932.58 2275.52 582.43 412.50 199.32 918.16 L&T Realty Limited 710.90 Joint ventures, including: 1667.61 1631.55 1682.91 23.00 45.65 605.10 68.64 2283.56 18.54 1817.05 Notes forming part of the Financial Statements (contd.) NOTE [51] (d) Amount due to/from related parties: (contd.) LARSEN & TOUBRO crore As at 31-3-2017 As at 31-3-2016 Sr. Nature of transaction/relationship/major parties L&T Special Steels and Heavy Forgings Private Limited Amount Amounts for major parties Amount Amounts for major As at 1-4-2015 Amount parties Amounts for major parties iii. Investments in debt securities Subsidiaries, including: L&T Shipbuilding Limited L&T Finance Limited 627.85 464.43 no. 1184.98 877.59 564.15 1986.84 L&T Uttaranchal Hydropower Limited 5.25 523.00 L&T Power Development Limited 379.40 L&T Realty Limited Industries LLC Larsen & Toubro Readymix and Asphalt Concrete 35.81 209.32 1655.69 1260.35 5.25 L&T Shipbuilding Limited 324.79 1775.11 1660.62 Subsidiaries, including: ix. (b) Revenue commitments given 1.77 1.51 8.93 Total 1.99 L&T Hydrocarbon Engineering Limited 1.60 Henikwon Corporation SDN. BHD 1.31 6.35 Advances against equity contribution L&T-MHPS Boilers Private Limited 215.18 431.85 606.23 L&T-MHPS Turbine Generators Private Limited 210.22 282.66 421.59 Associates, including: 4.36 5.83 3.16 Subsidiaries, including: L&T-Chiyoda Limited 5.83 3.16 Key management personnel: 0.01 Mr. K Venkataramanan* and Mrs Jyothi Venkataramanan 0.01 Total 4869.87 6376.21 3043.69 V. 3.96 60.26 4234.01 Towards Employer's contribution: 0.59 0.19 7.07 3.62 7.23 3.64 16.49 23.91 23.74 84.93 101.42 145.26 139.13 Total L&T-Chiyoda Limited Feedback Infra Private Limited Associates, including: L&T-Sargent & Lundy Limited Joint ventures, including: L&T Technology Services Limited L&T Aviation Services Private Limited Larsen & Toubro Infotech Limited Subsidiaries, including: Charges paid for miscellaneous services X. 0.17 142.96 0.59 153.08 Key management personnel: L&T Infrastructure Development Projects Limited Joint venture: PT Tamco Indonesia L&T Infocity Limited 0.86 0.79 L&T Electrical & Automation FZE 1.66 1.37 Subsidiaries, including: Rent paid, including lease rentals under leasing/hire purchase arrangements Total xi. Amount Amounts for major parties no. Nature of transaction/relationship/major parties Sr. 2015-16 2016-17 crore LARSEN & TOUBRO Disclosure of related party transactions: (contd.) (c) NOTE [51] Notes forming part of the Financial Statements (contd.) Amount Amounts for major parties 0.37 21.95 21.95 L&T Capital Company Limited 388.00 Subsidiaries, including: Purchase of investments from vii. 3074.09 1262.59 Total 1.09 (0.03) (0.22) L&T-MHPS Turbine Generators Private Limited L&T-MHPS Boilers Private Limited 1.09 (0.25) Joint ventures: 604.75 L&T Uttaranchal Hydropower Ltd 648.30 943.84 750.00 276.24 L&T Realty Limited L&T Shipbuilding Limited L&T Technology Services Limited 383.40 3073.00 4233.64 L&T Shipbuilding Limited 388.00## Joint venture: 5542.27 21.54 21.54 11.08 4232.03 1147.40 42.50 5520.73 11.08 L&T Capital Company Limited Subsidiary: ix. Capital Reduction by L&T Infrastructure Development Projects Limited 21.95 Total L&T Hydrocarbon Engineering Limited L&T Global Holdings Limited L&T Capital Company Limited 11.08 Subsidiaries, including: viii. Sale of investments to 4234.01 2429.57 Total 2041.57 L&T Infrastructure Development Projects Limited 2041.57 Joint venture: 0.31 0.23 0.01 2016-17 crore 322 (c) Disclosure of related party transactions: (contd.) NOTE [51] Notes forming part of the Financial Statements (contd.) 321 1008.29 405.47 0.38 0.38 13.75 13.75 100.39 93.58 302.00 99.05 526.48 149.48 994.16 405.47 Total Salzer Electronics Limited Associate: L&T-Sargent & Lundy Limited 2015-16 Sr. Nature of transaction/relationship/major parties no. 77.23 67.78 Larsen & Toubro Infotech Limited 538.26 423.18 Subsidiaries, including: Rent received, overheads recovered and miscellaneous income XV. 7.48 6.47 Total 2.64 Joint venture: 0.65 2.64 0.65 Joint venture: 4.84 5.82 L&T Construction Equipment Limited 4.84 5.82 xiv. Commission received, including those under agency arrangements Subsidiary: major parties Amount Amounts for Amount Amounts for major parties L&T Kobelco Machinery Private Limited L&T Finance Holdings Limited L&T Technology Services Limited Larsen & Toubro Infotech Limited 84.47 xii. (b) Charges recovered for deputation of employees to related parties Subsidiaries, including: 13.70 12.65 Total 1.55 PT Tamco Indonesia 2.59 Larsen and Toubro Infotech Limited 4.43 6.16 2.18 77.04 1.38 2.18 L&T Hydrocarbon Engineering Limited 13.70 12.65 xii. (a) Charges incurred for deputation of employees from related parties Subsidiaries, including: 1.37 Total Mr. K. Venkataramanan* and Mrs. Jyothi Venkataramanan 1.68 0.01 0.01 0.01 L&T Electricals and Automation Saudi Arabia Company Limited LLC L&T Electrical and Automation FZE 1262.84# L&T Parel Project LLP 25.35 Subsidiaries, including: xiii. Dividend received 98.22 106.47 Total 18.72 18.01 L&T-Chiyoda Limited 18.72 18.01 Associate: 2.14 22.39 L&T Infrastructure Development Projects Limited 1.21 L&T Special Steels and Heavy Forgings Private Limited 0.58 0.64 L&T-MHPS Boilers Private Limited 2.46 3.99 Joint ventures, including: 8.96 L&T Construction Equipment Limited 8.54 L&T Electrical and Automation FZE 1.87 L&T Power Development Limited Subsidiaries, including: Amount Amounts for major parties 2.77 1.06 Key management personnel: 0.07 Mr. D. K. Sen$ 0.07 516.02 620.80 Total xvi. Guarantee charges recovered from Subsidiaries, including: Nabha Power Limited L&T Shipbuilding Limited L&T Hydrocarbon Engineering Limited Larsen & Toubro (Saudi Arabia) LLC Larsen Toubro Arabia LLC Total 30.98 22.58 9.45 9.90 3.45 6.02 6.40 4.64 L&T-Chiyoda Limited 1.06 2.77 10.00 (c) NOTE [51] Notes forming part of the Financial Statements (contd.) L&T Technology Services Limited 49.04 69.89 L&T Hydrocarbon Engineering Limited L&T Geostructure LLP L&T Capital Company Limited Joint ventures, including: 90.99 96.83 5.53 77.44 90.00 81.48 L&T-MHPS Boilers Private Limited 35.50 23.42 L&T-Sargent & Lundy Limited 17.70 17.64 L&T-MHPS Turbine Generators Private Limited 9.64 10.31 L&T Special Steels and Heavy Forgings Private Limited Associate: 72.65 30.98 22.58 xvii. Interest received from Sr. Nature of transaction/relationship/major parties no. Amount Amounts for major parties Amount Amounts for major parties xviii. Interest paid to Subsidiaries, including: 45.38 13.88 L&T Hydrocarbon Engineering Limited Nabha Power Limited 40.04 2015-16 L&T Construction Equipment Limited L&T Infrastructure Development Projects Limited Total 45.38 6.31 4.70 1.98 3.89 3.89 17.77 xix. Contribution to post-employment benefit plan (a) Transaction with trust managed provident fund (i) Joint venture: Disclosure of related party transactions: (contd.) 2016-17 LARSEN & TOUBRO Subsidiaries, including: L&T Realty Limited 248.30 L&T Shipbuilding Limited 71.21 Nabha Power Limited 62.41 212.60 69.94 90.62 31.50 Marine Infrastructure Developer Private Limited crore 69.64 79.54 57.86 L&T Special Steels and Heavy Forgings Private Limited 78.98 52.58 Total 327.84 270.46 Notes forming part of the Financial Statements (contd.) NOTE [51] (c) Disclosure of related party transactions: (contd.) Joint ventures, including: 59.68 LARSEN & TOUBRO 2016-17 9.29 0.05 0.19 0.26 0.50 6.56 45.01 Mr. M. V. Kotwal** Mr. K Venkataramanan* Key management personnel: L&T Howden Private Limited L&T Special Steels and Heavy Forgings Private Limited L&T-MHPS Turbine Generators Private Limited Joint ventures: L&T Shipbuilding Limited L&T Valves Limited L&T Electrical and Automation FZE Larsen and Toubro (Oman) LLC 0.16 1.07 1.51 58.68 Subsidiaries, including: Sale of property, plant and equipment iv. 8.85 0.44 11.30 Total Amount Amounts for major parties 2015-16 2016-17 crore Investments including subscription to equity and preference shares (including application money paid) vi. no. Nature of transaction/relationship/major parties Sr. 320 (c) Disclosure of related party transactions: (contd.) NOTE [51] 15.49 Notes forming part of the Financial Statements (contd.) 44.83 297.01 Total 44.83 297.01 L&T Finance Limited 44.83 297.01 Subsidiary: Sale of Receivables V. 58.68 319 26.47 Total 0.04 L&T Infrastructure Development Projects Limited 1314.49 1070.75 Joint ventures, including: 364.41 Nabha Power Limited 380.75 L&T Parel Project LLP 477.52 281.62 L&T Seawoods Limited 623.78 544.27 Larsen and Toubro (Saudi Arabia) LLC 1231.51 3452.08 2359.81 L&T Metro Rail (Hyderabad) Limited Sale of goods/contract revenue & services Subsidiaries, including: ii. Amount Amounts for major parties Amount Amounts for major parties no. Nature of transaction/relationship/major parties Sr. 2015-16 1395.17 crore 653.99 394.35 0.02 L&T Infrastructure Development Projects Limited 0.04 0.02 Joint venture: 11.42 L&T Hydrocarbon Engineering Limited 9.38 L&T Construction Equipment Limited 12.49 15.45 Larsen and Toubro Infotech Limited L&T Deccan Tollways Limited 26.45 Purchase/lease of property, plant and equipment iii. 4766.57 3430.70 Total 0.14 L&T-Chiyoda Limited 0.14 Associate: 124.02 L&T-MHPS Boilers Private Limited 533.50 Subsidiaries, including: L&T Geostructure LLP i. Joint ventures, including: 100.00 100.00 100.00 India Spectrum Infotech Private Limited 3 100.00 99.90 99.90 99.90 99.90 99.90 India Bhilai Power Supply Company Limited 99.90 100.00 100.00 4 97.00 97.00 97.00 97.00 97.00 97.00 India L&T Shipbuilding Limited 5 100.00 100.00 100.00 100.00 India L&T-Valdel Engineering Limited %% 2 100.00 100.00 100.00 Note: On May 29, 2017, the Board of Directors has recommended for the approval of shareholders, the issue of bonus equity shares in the ratio of 1:2 (one bonus equity share of 2 each for every two equity shares of 2 each held). The effect of the said bonus issue will be given in the year 2017-18 post approval by shareholders. 63,46,986 63,46,986 Weighted average number of potential equity shares on account of conversion of foreign currency convertible bonds 2015-16 2016-17 Particulars The following potential equity shares are anti-dilutive and are therefore excluded from the weighted average number of equity shares for the purpose of diluted earnings per share: 2 2 Face value per share (*) 53.47 58.30 A/D Diluted EPS (*) NOTE [53] 6 Disclosure pursuant to Ind AS 27 "Separate Financial Statements" Sr. 100.00 100.00 100.00 India L&T Cutting Tools Limited 1 Indian subsidiaries As at 1-4-2015 Effective proportion proportion of of ownership voting power Interest (%) held (%) Effective As at 31-3-2016 Effective Effective proportion proportion of of ownership voting power Interest (%) held (%) As at 31-3-2017 Effective Effective proportion proportion of of ownership voting power Interest (%) held (%) business no. Principal place of Name of subsidiary company Investment in following subsidiary companies, joint venture companies and associates is accounted at cost. Subsidiaries: L&T Electricals and Automation Limited India 100.00 13 100.00 100.00 100.00 100.00 100.00 100.00 India L&T Valves Limited 12 100.00 100.00 100.00 100.00 100.00 L&T Realty Limited 100.00 India 100.00 290.20 328 99.99 99.99 99.99 99.99 99.99 99.99 India L&T Power Limited 14 100.00 100.00 100.00 100.00 100.00 93,55,09,430 93,50,63,913 India 11 India L&T Seawoods Limited 8 100.00 100.00 100.00 100.00 100.00 100.00 Hi-Tech Rock Products & Aggregates Limited India 7 100.00 100.00 100.00 100.00 100.00 EWAC Alloys Limited 100.00 100.00 89.00 89.00 India L&T Infocity Limited 10 95.00 95.00 95.00 95.00 95.00 95.00 Kesun Iron and Steel Company Private Limited India 9 100.00 100.00 100.00 D=B+C 100.00 43,02,265 L&T Metro Rail (Hyderabad) Limited L&T Uttaranchal Hydropower Limited L&T Seawoods Limited Subsidiaries, including: Commitment to Fund X. Joint venture: Amounts for major parties As at 1-4-2015 Amount Amount Amounts for major Amounts for major parties no. Amount Nature of transaction/relationship/major parties parties Total L&T Infrastructure Development Projects Limited xi. Revenue commitments received Subsidiaries, including: 2738.00 1281.00 1443.41 405.00 1443.41 405.00 442.75 620.45 546.00 734.40 413.00 459.00 1294.59 876.00 1063.20 1063.20 Sr. As at 31-3-2016 crore LARSEN & TOUBRO 0.80 Feedback Infra Private Limited 5.82 3.53 3.89 Associates, including: 300.05 177.16 2254.94 1066.91 2232.20 1086.15 L&T-MHPS Turbine Generators Private Limited L&T-MHPS Boilers Private Limited 517.08 3385.37 Weighted average number of equity shares outstanding for diluted EPS 3386.85 1.59 2261.68 L&T-Chiyoda Limited 1.29 (d) Amount due to/from related parties: (contd.) NOTE [51] Notes forming part of the Financial Statements (contd.) 847.69 5164.01 5051.36 1.67 Salzer Electronics Limited Total 3.10 JSK Electricals Private Limited 0.65 2.13 Magtorq Private Limited 0.78 0.96 3550.18 As at 31-3-2017 L&T Metro Rail (Hyderabad) Limited A 2016-17 Basic EPS (*) Weighted average number of equity shares outstanding Profit after tax as per accounts (* crore) Basic earnings per share Particulars Basic and Diluted Earnings per share [EPS] computed in accordance with Ind AS 33 "Earnings per Share": NOTE [52] Notes forming part of the Financial Statements (contd.) 327 $ Appointed w.e.f. October 1, 2015 **Retired on August 26, 2015 # Includes commission due to non-executive directors 3.55 crore (As at 31-3-2016: 3.47 crore; as at 1-4-2015: 3.22 crore) * Retired on September 30, 2015 "Major parties" denote entities account for 10% or more of the aggregate for that category of transaction during respective period. B 0.77 5453.74 93,23,49,030 A/B 31,60,400 C 5651.12 Add: Weighted average number of potential equity shares on account of employee stock options 93,07,61,648 93,23,49,030 B Weighted average number of equity shares outstanding 4999.58 5453.74 A Profit after tax as per accounts ( crore) Diluted earnings per share 53.71 58.49 4999.58 93,07,61,648 0.77 2015-16 Joint ventures, including: L&T BPP Tollway Limited L&T Krishnagiri Walajahpet Tollway Limited L&T Infrastructure Development Projects Limited L&T Deccan Tollways Limited L&T Seawoods Limited Larsen and Toubro (Saudi Arabia) LLC 237.62 L&T Asian Realty Project LLP 665.80 397.04 L&T Parel Project LLP 3299.75 0.77 1396.43 2650.68 775.01 138.67 621.93 2400.35 xii. Capital commitments received Total 7876.51 4550.78 1000.60 26.27 Subsidiary: 13.65 883.80 350.30 593.65 60.00 25.95 Total 2225.39 1236.11 L&T Shipbuilding Ltd 100.00 100.00 100.00 100.00 100.00 100.00 2 100.00 UAE 100.00 100.00 100.00 100.00 100.00 USA 100.00 Larsen & Toubro International FZE Larsen & Toubro LLC * Foreign subsidiaries 3 Limited 100.00 The Company has sold its stake on September 9, 2016 %% The Company is merged with L&T Hydrocarbon Engineering Limited w.e.f. April 1,2016 ^^ The Company is incorporated on September 2, 2016 ^^^ The Company is incorporated on October 23, 2016 1 Sr. Principal no. place of business As at 31-3-2017 Effective Effective proportion proportion of of ownership voting power Interest (%) held (%) As at 31-3-2016 Effective Effective proportion proportion of of ownership voting power Interest (%) held (%) Effective As at 1-4-2015 Effective proportion proportion of of ownership voting power Interest (%) held (%) Name of subsidiary company Larsen & Toubro Hydrocarbon International Limited LLC 100.00 Saudi Arabia 75.00 75.00 75.00 75.00 75.00 Saudi Arabia 6 75.00 Larsen & Toubro Consultoria E Projeto Ltda 7 L&T Global Holdings Limited UAE 100.00 100.00 100.00 100.00 Brazil Kindgom of Kindgom of 5 100.00 100.00 100.00 100.00 100.00 100.00 4 Larsen Toubro Arabia LLC Larsen & Toubro (Saudi Arabia) LLC 100.00 100.00 100.00 100.00 100.00 100.00 Saudi Arabia Kindgom of 100.00 22 100.00 100.00 100.00 100.00 24 L&T Construction Equipment Limited India 100.00 100.00 100.00 100.00 100.00 100.00 25 L&T Infrastructure Engineering Limited India 100.00 100.00 100.00 89.77 India 100.00 100.00 100.00 100.00 100.00 100.00 L&T Metro Rail (Hyderabad) Limited 89.77 India 100.00 97.48 97.48 97.48 97.48 23 L&T Technology Services Limited 100.00 100.00 100.00 100.00 L&T Natural Resources Limited India 30 L&T Powergen Limited India 31 L&T Solar Limited 29 India Marine Infrastructure Developer Private India 97.00 97.00 100.00 118 100.00 32 100.00 100.00 India 100.00 26 L&T Hydrocarbon Engineering Limited India 100.00 100.00 100.00 100.00 100.00 100.00 27 Seawoods Retail Private Limited^^ India 100.00 100.00 28 Seawoods Realty Private Limited^^^ 100.00 100.00 13 Notes forming part of the Financial Statements (contd.) 98.12 98.12 98.12 6 Ahmedabad - Maliya Tollway Limited India 97.45 India 97.45 7 L&T Halol-Shamlaji Tollway Limited India 47.75 97.45 97.45 8 97.45 L&T Krishnagiri Walajahpet Tollway Limited L&T Transportation Infrastructure Limited 97.45 L&T Rajkot-Vadinar Tollway Limited India 97.45 97.45 97.45 3 L&T Samakhiali Gandhidham Tollway Limited 5 India 97.45 97.45 4 L&T Infrastructure Development Projects Limited India 97.45 97.45 97.45 India 97.45 97.45 India 60.00 60.00 60.00 100.00 L&T-Gulf Private Limited India L&T Sapura Offshore Private Limited 50.00 50.00 14 L&T-MHPS Boilers Private Limited India 51.00 51.00 51.00 50.00 12 60.00 60.00 97.45 9 Devihalli Hassan Tollway Limited India 97.45 97.45 97.45 10 L&T Howden Private Limited India 50.10 50.10 50.10 11 L&T Sapura Shipping Private Limited India 60.00 2 329 97.45 97.45 50.00 50.00 50.00 50.00 2 Gujarat Leather Industries Limited @ India 50.00 50.00 50.00 50.00 50.00 50.00 3 Salzer Electronics Limited India 50.00 26.06 50.00 L&T-Chiyoda Limited NOTE [53] (contd.) Associate companies: Sr. Name of associate company Principal no. place of India business As at 31-3-2016 Effective Effective proportion proportion of of ownership voting power Interest (%) held (%) As at 1-4-2015 Effective Effective proportion proportion of of ownership voting power Interest (%) held (%) 1 As at 31-3-2017 Effective Effective proportion proportion of of ownership voting power Interest (%) held (%) 26.06 4 JSK Electricals Private Limited As at 31-3-2016 As at 1-4-2015 Sr. Name of joint venture no. Principal place of business Effective proportion As at 31-3-2017 Effective proportion of interest (%) ownership interest (%) Effective Proportion of ownership interest (%) 1 L&T Chennai-Tada Tollway Limited India of ownership Joint ventures: The Company is under liquidation @ India 26.00 26.00 5 Rishi Consfab Private Limited India 26.00 26.00 6 Magtorq Private Limited India 42.85 42.85 42.85 42.85 42.85 42.85 97.45 India 50169.09 21 Statement of reconciliation of total comprehensive income for the period ended March 31, 2016: NOTE [60] (contd.) Notes forming part of the Financial Statements (contd.) 337 82.86 82.86 4999.58 (f) (311.89) 5082.44 (229.03) 5311.47 Total comprehensive income N, P D, G Other Comprehensive Income [net of tax] 5311.47 Profit after tax Sr. no. Other comprehenvice income [net of tax] VIII Net Profit after tax as per Ind AS Deferred and current taxes VII Others VI Particulars V Impact of fair valuation of investments III Provision for employee benefits based on constructive obligations || Impact of provision for expected credit loss | Net Profit after tax as per I-GAAP IV Increase in borrowing cost pursuant to application of effective interest rate method Reclassification of net actuarial loss on employee defined benefit obligations to OCI Total comprehensive income as per Ind AS 1256.04 1377.65 3776.37 56687.51 5.53 Deferred tax Current tax Tax expenses Profit before tax Exceptional items 60463.88 Profit before exceptional items and tax Less: Overheads capitalised 997.40 (1.48) 998.88 A Depreciation, amortisation, impairment and obsolescence 1476.82 Total expenses (121.61) 5.53 3776.37 (273.97) (100.43) (173.54) 1530.01 (21.18) 1551.19 A, G A, G 56681.98 6255.62 6689.12 560.28 560.28 5695.34 (433.50) 6128.84 60458.35 (433.50) (g) Effect of Ind AS adoption on Statement of Cash Flows for the period ended March 31, 2016: Particulars Net cash flows from operating activities ASSETS: crore crore crore crore As at 1-4-2015 As at 31-3-2016 Non-current assets 338 2078.06 570.64 1507.42 A 2764.78 1417.60 1347.18 (h) Following assets and liabilities of joint operations have been consolidated in standalone financials on a line by line basis under Ind AS as against a single line item accounted under I-GAAP (Note A). (686.72) Property, plant and equipment 448.91 327.79 494.10 Carried forward 25.85 36.25 Other non-current assets 1.13 Capital work-in-progress Deferred tax assets (net) Other intangible assets 14.38 7.56 Investment property 81.19 1.20 205.24 0.18 (846.96) 160.24 (2464.33) (24.57) C (71.46) D (25.85) K (302.06) P H crore Note Cash and cash equivalents as at March 31, 2016 Cash and cash equivalents as at April 1, 2015 Net increase/(decrease) in cash and cash equivalents Net cash flows from financing activities Net cash flows from investing activities 5311.46 12.90 E, J, N, O (23.78) 102.88 (2567.21) A 3299.86 (1522.25) crore Ind AS Ind AS Adjustments 27.14 (976.98) (545.27) A 3272.72 A I-GAAP Note 82.86 5082.44 D, G, N, P 4999.58 122.94 G 27.78 1449.04 A, C Finance costs business As at 31-3-2017 Effective Effective proportion proportion of of ownership voting power Interest (%) held (%) As at 31-3-2016 Effective Effective proportion proportion of of ownership voting power Interest (%) held (%) As at 1-4-2015 Effective Effective proportion proportion of of ownership voting power Interest (%) held (%) Indian subsidiaries 15 L&T Cassidian Limited no. India 74.00 74.00 74.00 74.00 74.00 16 L&T General Insurance Company Limited* 74.00 India Principal place of Sr. NOTE [60] (contd.) Notes forming part of the Financial Statements (contd.) 42135.31 359.49 153.20 109.51 J, E, N G 1840.83 Name of subsidiary company 172.49 (53.91) Н H K D CLIE 40718.33 crore Notes forming part of the Financial Statements (contd.) NOTE [53] (contd.) LARSEN & TOUBRO (785.56) (379.07) 100.00 100.00 100.00 India 66.62 66.62 66.71 66.71 72.95 72.95 L&T Finance Holdings Limited 20 India 100.00 100.00 100.00 100.00 100.00 100.00 L&T Capital Company Limited 19 100.00 100.00 100.00 17 L&T Aviation Services Private Limited India 100.00 100.00 100.00 100.00 100.00 100.00 18 Larsen & Toubro Infotech Limited India 84.28 84.28 94.96 94.96 LARSEN & TOUBRO L&T Power Development Limited (e) Effect of Ind AS adoption on the Statement of Profit and Loss for the period ended March 31, 2016: I-GAAP 76.57 (38.41) 114.98 A work-in-progress and stock-in-trade 15567.87 1501.07 Other manufacturing, construction and operating 14066.80 Sub-contracting charges 1349.23 (99.67) 1448.90 A Stores, spares and tools consumed 1129.45 A 0.27 A 4667.51 2845.77 350.86 2494.91 А, Н Sales, administration and other expenses O, P 4974.80 expenses 494.60 A, K, Employee benefits expense 15 2904.61 47264.48 5208.33 540.82 4480.20 1129.18 A Purchase of stock-in-trade 2395.82 A, D 60415.00 A, N Total income Other income Revenue from operations 62810.82 INCOME crore crore crore crore crore Ind AS Ind AS Adjsutments crore 3397.65 63812.65 (54.78) 18804.70 999.33 17805.37 A, N Construction materials consumed 635.39 7397.55 1.20 7396.35 635.39 Excise duty A Cost of raw materials components consumed Manufacturing, construction and operating expenses EXPENSES 66153.69 3342.87 2341.04 Note L&T-MHPS Turbine Generators Private Limited Changes in inventories of finished goods, 51.00 60.94 E, F 8486.18 C, J تان Other financial liabilities Borrowings (173.71) 11.51 Financial liabilities Liabilities Total equity 42135.31 1416.98 40718.33 186.30 41949.01 1416.98 Non-current liabilities 40532.03 Provisions (162.20) 1.27 5.25 21391.11 A Trade payables term borrowings 4175.98 1436.03 294.11 3881.87 1436.03 8547.12 370.23 0.58 Current maturities of long Borrowings Financial liabilities Current liabilities F Other non-current liabilities 8384.92 371.50 5.83 8312.47 72.45 A, C 824.81 186.30 Equity share capital 33481.95 881.14 32600.81 A, C, H, N TOTAL ASSETS Other current assets 31654.08 96570.85 1988.97 1880.49 167.17 1713.32 A, E, I, N Other financial assets 2432.26 14.43 29665.11 Other equity 3050.10 335 Equity EQUITY AND LIABILITIES: crore crore crore crore crore 99620.95 crore Ind AS Ind AS Adjustments I-GAAP Note (c) Effect of Ind AS adoption on Balance Sheet as at March 31, 2016 (contd.) NOTE [60] Notes forming part of the Financial Statements (contd.) Particulars 22215.92 Other financial liabilities A, E, K, N 3998.58 Current maturities of long term borrowings C 648.31 Trade payables A, M 194.37 17838.72 647.93 Note Equity as per Ind AS Deferred and current taxes VIII Others VII (0.38) 537.28 Equity component of other financial instruments (FCCB) 3804.21 Borrowings Borrowings Other financial liabilities تدان C, J E, F 8596.85 78.21 (166.04) 23.79 A Provisions (142.25) 1.27 0.81 8430.81 102.00 8532.81 346.10 0.81 Other non-current liabilities F Current liabilities Financial Liabilities 8675.06 344.83 VI Reversal of Dividend & DDT V 18651.96 2121.50 16530.46 TOTAL EQUITY AND LIABILITIES A Current tax liabilities (net) A, L, O 2703.11 Provisions Other current liabilities 29147.61 1472.22 27675.39 1319.68 353.30 966.38 A, N (1805.82) 897.29 25.63 Increase in borrowing cost pursuant to application of effective interest rate method IV Gain on fair valuation of investments ||| Provision for employee benefits based on constructive obligations Provision for expected credit loss Equity as per I-GAAP no. Particulars Sr. 336 (d) Statement of reconciliation of equity under Ind AS and equity reported under I-GAAP as at March 31, 2016: 99620.95 3050.10 96570.85 26.53 0.90 2417.83 A Loans 1494.43 37084.58 (483.50) Н H K DU. crore Note Equity as per Ind AS Deferred and current taxes (353.22) VIII VII Equity component of other financial instruments (FCCB) 5 VI V Reversal of Dividend & DDT Increase in borrowing cost pursuant to application of effective interest rate method IV Others Gain on fair valuation of investments 247.83 L Investment property Capital work-in-progress Property, plant and equipment Non-current assets ASSETS: Particulars (c) Effect of Ind AS adoption on Balance Sheet as at March 31, 2016: (29.34) NOTE [60] (contd.) 38552.53 267.02 G 21.09 J, E, N, O 153.20 1644.87 Notes forming part of the Financial Statements (contd.) ||| Provision for employee benefits based on constructive obligations || 2447.31 A, L, M 24213.08 16785.98 1033.47 2168.67 14617.31 A, M, N Provisions (1645.89) Other current liabilities 1190.57 302.20 888.37 A, E, K, N Other financial liabilities 18376.00 India 23179.61 801.42 Current tax liabilities (net) Liabilities associated with group(s) of assets classified as held for sale Provision for expected credit loss | Equity as per I-GAAP no. Particulars Sr. 334 (b) Statement of reconciliation of equity under Ind AS and equity reported under I-GAAP as at April 1, 2015: 89345.78 37.22 2921.25 37.22 86424.53 TOTAL EQUITY AND LIABILITIES M 75.83 75.83 Other intangible assets Financial Liabilities Intangible assets under development Investments Inventories Current assets A, C Other non-current assets G Deferred tax assets/(liabilities) [net] 1955.11 A, C 67.11 1786.70 11.04 1775.66 156.14 359.49 (203.35) 22459.47 1888.00 (716.56) Financials assets 4701.55 1257.13 237.30 A Other bank balances 2075.83 570.64 1505.19 D A 18967.75 4803.32 (122.17) 101.77 19089.92 A, H Trade receivables Cash and cash equivalents 23176.03 474.09 2797.52 crore crore crore crore crore Ind AS Ind AS Adjustments crore I-GAAP A A, B A, C, N A, B Note Other financial assets Loans LARSEN & TOUBRO 7120.59 9.30 7129.89 19187.86 (710.08) (12.19) 5.71 468.38 E 2809.71 A, F 19897.94 A, D, E 158.91 138.58 446.90 446.90 0.18 158.91 138.40 253.22 2.53 250.69 Financial Assets Non-current liabilities Investments 38552.53 0.25 0.25 d. For Other services: (i) Limited review of standalone and consolidated financial statements on a quarterly basis (ii) Other services including certification work 1.30 1.30 0.48 0.58 e. For reimbursement of expenses 0.27 0.13 NOTE [56] Contribution to political parties during the year 2016-17 is Nil (previous year ₹ Nil). 331 0.54 0.48 1.70 2.45 iv. Product warranties: The Company gives warranties on certain products and services, undertaking to repair or replace the items that fail to perform satisfactorily during the warranty period. Provision made as at March 31, 2017 represents the amount of the expected cost of meeting such obligations of rectification/replacement. The timing of the outflows is expected to be within a period of two to five years from the date of Balance Sheet. Expected tax liability in respect of indirect taxes represents mainly the differential sales tax liability on account of non- collection of declaration forms. Provision for litigation related obligations represents liabilities that are expected to materialise in respect of matters in appeal. Contractual rectification cost represents the estimated cost the Company is likely to incur during defect liability period as per the contract obligations in respect of completed construction contracts accounted under Ind AS 11 "Construction Contracts". (c) Disclosure in respect of contingent liabilities is given as part of Note 29 to the Balance Sheet. NOTE [55] Auditors' remuneration (excluding service tax): crore 2016-17 2015-16 Sr. Particulars no. a. For Audit fees b. For Taxation matters C. For Company law matters Notes forming part of the Financial Statements (contd.) NOTE [57] The Company has amounts due to suppliers under The Micro, Small and Medium Enterprises Development Act, 2006, [MSMED Act] as at March 31, 2017. The disclosure pursuant to the said Act is as under: crore NOTE [59] Disclosure on Specified Bank Notes (SBN) pursuant to MCA notification 308(E) dated March 30, 2017: crore SBNs Other Total Particulars denomination notes Closing cash in hand as on 08.11.2016 5.39 8.73 14.12 (+) Permitted receipts 15.71 15.71 (-) Permitted payments There are no amounts due and outstanding to be credited to Investor Education & Protection Fund as at March 31, 2017. iii. NOTE [58] 8.20 Particulars Principal amount due to suppliers under MSMED Act, 2006 2016-17 2015-16 106.28 121.14 Interest accrued, due to suppliers under MSMED Act on the above amount, and unpaid Payment made to suppliers (other than interest) beyond the appointed day during the year Interest paid to suppliers under MSMED Act (other than Section 16) Interest paid to suppliers under MSMED Act (Section 16) 3.39 2.90 187.48 264.03 0.01 Interest due and payable towards suppliers under MSMED Act for payments already made Interest accrued and remaining unpaid at the end of the year to suppliers under MSMED Act Amount of further interest remaining due and payable even in the succeeding years 3.60 7.83 14.08 13.16 1.20 ii. i. (b) Nature of provisions: 19 L&T Kobelco Machinery Private Limited India 51.00 51.00 51.00 20 L&T-Sargent & Lundy Limited India 50.00 50.00 50.00 330 Notes forming part of the Financial Statements (contd.) NOTE [54] Disclosures pursuant to Ind AS 37 "Provisions, Contingent Liabilities and Contingent Assets" (a) Movement in provisions: 72.77 Class of provisions 72.11 India 51.00 Liabilities 51.00 16 Raykal Aluminium Company Private Limited India 75.50 75.50 75.50 17 L&T Special Steels and Heavy Forgings Private Limited India 74.00 74.00 74.00 18 PNG Tollway Limited 72.11 0.02 LARSEN & TOUBRO Sr. no. Provision used/reversed during the year # (1.38) (5.22) (94.10) (100.70) 4. Additional provision for unwinding of interest and change in discount rate 0.30 0.44 0.74 5. Balance as at 31-3-2017 (5=1+2+3+4) 21.25 181.89 263.34 473.86 # includes provision used during the year * 5.39 crore 3. crore 298.66 54.75 Particulars Product warranties Expected tax liability in respect of indirect taxes Litigation related obligations Contractual rectification cost - construction Total contracts 1. Balance as at 1-4-2016 10.09 132.36 6.94 125.77 275.16 2. Additional provision during the year 12.24 231.67 20.09 7.38 (-) Amount deposited in Banks 255.84 Loans A 1368.04 13.57 1381.61 Other financial assets A, E, I, N 1281.40 146.69 1428.09 1587.84 28138.37 27554.18 900.65 19.90 235.94 A Other bank balances Financial assets Investments D 5426.91 91.14 5518.05 Trade receivables 28454.83 A, H, M (101.29) 16790.00 Cash and cash equivalents A, M 1346.95 1417.83 2764.78 16891.29 2260.77 Other current assets M, N crore crore crore EQUITY AND LIABILITIES: Equity Equity share capital Other equity Total equity 185.91 36898.67 1467.95 185.91 38366.62 20.11 37084.58 1467.95 crore crore crore Ind AS Group(s) of assets classified as held for sale M TOTAL ASSETS 141.79 141.79 86424.53 2921.25 A, C, H, 89345.78 Notes forming part of the Financial Statements (contd.) NOTE [60] (a) Effect of Ind AS adoption on Balance Sheet as at April 1, 2015 (contd.) Note Particulars I-GAAP Ind AS Adjustments 333 (9.95) 26550.53 A, C, M Ind AS crore crore crore crore crore crore A, B, M Ind AS Adjustments 7402.20 7068.96 A 304.54 81.19 385.73 A, B 471.18 471.18 (333.24) I-GAAP LARSEN & TOUBRO Note 5.37 0.03 5.40 Closing cash in hand as on 30.12.2016 4.32 2270.72 332 Notes forming part of the Financial Statements (contd.) NOTE [60] Disclosure pursuant to Ind AS 101 "First time adoption of Indian Accounting Standards" (a) Effect of Ind AS adoption on Balance Sheet as at April 1, 2015: Particulars ASSETS: Non-current assets Property, plant and equipment Capital work-in-progress Investment property Other intangible assets Intangible assets under development Financial Assets M 85.16 4.32 84.94 (95.97) 1450.22 (0.22) 44.50 1405.72 267.02 (362.99) Current assets Other non-current assets A, G Deferred tax assets/(liabilities) [net] Inventories 20795.46 (229.51) 21024.97 346.46 A, C (14.52) 11.70 189.50 3002.86 Investments A, D, E 17672.83 (226.69) 17446.14 Loans 189.50 A, F, M 3017.38 334.76 E Other financial assets 7494.19 696.85 1583.37 1779.16 4412.57 3806.54 16 Loans towards financing activities 17 Other financial assets 3793.33 18 22254.43 480.84 234567% 7353.81 194726.15 26024.98 27969.60 13799.39 651.14 2298.67 24927.38 212059.67 TOTAL ASSETS 1671.35 1579.46 1649.37 52 34972.91 40453.65 40366.11 19 12 Group(s) of assets classified as held for sale Other current assets 51711.29 Loans 60565.23 75453.28 2128.97 2703.58 14322.02 18706.34 542.64 15 Current assets 14 46673.67 53074.36 55336.44 480.60 Loans 7 1473.82 1037.65 806.43 Deferred tax assets (net) Loans towards financing activities 563.55 47133.86 47888.27 41431.60 Other financial assets 9 775.12 1888.39 171121.80 8 50(d) 1736.15 1371.91 Cash and cash equivalents 13 Trade receivables 12 Investments 5981.16 4854.21 4139.74 11 Financial assets Inventories 2395.00 2737.19 3238.16 10 Other non-current assets 236.27 553.99 165.37 Non current assets for current tax (net) 1009.90 Other bank balances 348 1257.13 3578.64 14.43 13.57 135.20 123.07 2575.11 1944.70 1060.49 1145.90 4196.82 Other financial assets 3430.78 TOTAL (A) LIABILITIES Current liabilities Financial Liabilities Borrowings Trade payables Other financials liabilities 293.55 194.37 Other current assets 863.12 Loans Other bank balances Financials assets 2327.01 12.39 67.12 crore 327.79 crore crore 494.10 As at 1-4-2015 LARSEN & TOUBRO 19.90 crore Inventories Current assets Brought forward Trade receivables 597.82 371.00 Cash and cash equivalents 570.53 1417.16 As at 31-3-2016 652.99 519.69 304.43 Other income Total Income EXPENSES: Manufacturing,construction and operating expenses Employee benefits expense Sales, administration and other expenses Finance costs Depreciation,amortization, impairment and obsolescence Total expenses Revenue from operations Profit before exceptional items and tax Profit before tax Tax expenses Current tax Deferred tax Profit after tax recognised under Ind AS Company's share of profit accounted under I-GAAP Notes: crore crore Exceptional items INCOME: (i) Following items of income and expenses of joint operations have been consolidated in standalone financials on a line by line basis under Ind AS as against a Company's share of profit or loss accounted under I-GAAP (Note A). NOTE [60] (contd.) 1676.36 1151.79 Other current Liabilities 2158.52 2145.37 Provisions 8.65 1.87 Current tax liabilities (net) 0.90 TOTAL (B) 3844.43 3299.03 Net assets recognised under Ind AS [C = (A)-(B)] 352.39 131.75 Presented as a part of investments in Integrated Joint Ventures under I-GAAP 352.39 131.75 339 Notes forming part of the Financial Statements (contd.) 11.88 3180.74 L. Other investments Auditors' Responsibility The Parent's Board of Directors is responsible for the preparation of these consolidated Ind AS financial statements in terms of the requirements of the Companies Act, 2013 (hereinafter referred to as the "Act") that give a true and fair view of the consolidated financial position, consolidated financial performance (including other comprehensive income), consolidated statement of cash flows and the consolidated statement of changes in equity of the Group including its joint operations, joint ventures and associates in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act. The respective Boards of Directors of the companies included in the Group and of its joint operations, joint ventures and associates are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group, and of its joint operations, joint ventures and associates and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated Ind AS financial statements by the Directors of the Parent, as aforesaid. Management's Responsibility for the Consolidated Ind AS Financial Statements We have audited the accompanying Consolidated Ind AS financial statements of LARSEN & TOUBRO LIMITED (hereinafter referred to as the "Parent") and its subsidiaries (the Parent and its subsidiaries together referred to as the "Group") its joint ventures and associates, comprising the Consolidated Balance Sheet as at March 31, 2017, the Consolidated Statement of Profit and Loss (including Other Comprehensive Income), the Consolidated Statement of Cash Flows, and the Consolidated Statement of Changes in Equity, for the year then ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "the consolidated Ind AS financial statements") and which also includes Joint operations of the Group. Report on the Consolidated Ind AS Financial Statements LARSEN & TOUBRO LIMITED TO THE MEMBERS OF INDEPENDENT AUDITORS' REPORT 194, Churchgate Reclamation, Dinshaw Vachha Road Mumbai 400 020. Our responsibility is to express an opinion on these consolidated Ind AS financial statements based on our audit. In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. Ravindra Annexe SHARP & TANNAN 27th - 32nd Floor, Senapati Bapat Marg Elphinstone Road (West) Mumbai 400 013. Indiabulls Finance Centre, Tower 3 Chartered Accountants DELOITTE HASKINS & SELLS LLP INDEPENDENT AUDITORS' REPORT ON THE CONSOLIDATED IND AS FINANCIAL STATEMENTS OF A GROUP UNDER THE COMPANIES ACT, 2013 AND THE RULES THEREUNDER Consolidated Financial Statements 2016-17 LARSEN & TOUBRO 342 Chartered Accountants We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated Ind AS financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the consolidated Ind AS financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the consolidated Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Parent's preparation of the consolidated Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating 343 (e) On the basis of the written representations received from the directors of the Parent as on March 31, 2017 taken on record by the Board of Directors of the Parent and the reports of the statutory auditors of its subsidiary companies, associate companies and joint venture companies incorporated in India, none of the directors of the Group companies, its associate companies and joint venture companies incorporated in India is disqualified as on March 31, 2017 from being appointed as a director in terms of Section 164 (2) of the Act. (b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated Ind AS financial statements have been kept so far as it appears from our examination of those books, returns and the reports of the other auditors. (c) The consolidated Balance Sheet, the consolidated Statement of Profit and Loss (including other comprehensive income), the consolidated Statement of Cash Flows and consolidated Statement of Changes in Equity dealt with by this report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated Ind AS financial statements. (d) In our opinion, the aforesaid consolidated Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act. (a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated Ind AS financial statements. As required by Section 143(3) of the Act, based on our audit and on the consideration of the report of other auditors on separate financial statements and the other financial information of joint operations, subsidiaries, joint venture and associate companies incorporated in India, referred in the Other Matters paragraph above we report, to the extent applicable, that: Report on Other Legal and Regulatory Requirements Our opinion on the consolidated Ind AS financial statements above, and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and the financial statements/information certified by the Management. The consolidated Ind AS financial statements also includes the comparative financial statements/information for the year ended March 31, 2016 in respect of 16 joint operations, 22 subsidiaries, 3 joint ventures and 10 associates included in consolidated Ind AS financial statements prepared in accordance with the Ind AS have not been audited by their auditors. These financial statements/information are unaudited and have been furnished to us by the Management and our opinion on the consolidated Ind AS financial statements, in so far as it relates to the amounts and disclosures included in respect of these joint operations, subsidiaries, joint ventures and associates, is based solely on such unaudited financial statements/ information. In our opinion and according to the information and explanations given to us by the Management, these financial statements are not material to the Group. (d) The comparative financial statements for the year ended March 31, 2016 in respect of 4 joint operations, 37 subsidiaries and 4 joint ventures included in this consolidated Ind AS financial statements prepared in accordance with the Ind AS have been audited by other auditors and have been relied upon by us. statements/information are unaudited and have been furnished to us by the Management and our opinion on the consolidated Ind AS financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, joint ventures and associates, is based solely on such unaudited financial statements/information. In our opinion and according to the information and explanations given to us by the Management, these financial statements/information are not material to the Group. LARSEN & TOUBRO 344 (c) The consolidated Ind AS financial statements include the financial statements/information of 14 subsidiaries, whose financial statements reflect total assets of 70.15 crore as at March 31, 2017, total revenues of 333.18 crore and net cash outflows amounting to 31.38 crore for the year ended on that date, as considered in the consolidated Ind AS financial statements which have not been audited by us. The consolidated Ind AS financial statements also include the Group's share of profit (net) 7.37 crore for the year ended March 31, 2017, as considered in the consolidated Ind AS financial statements, in respect of 2 joint ventures and 6 associates, whose financial statements/information have not been audited by their auditors. These financial The above include 28 subsidiaries and a joint venture which are located outside India whose financial statements have been prepared in accordance with accounting principles generally accepted in their respective countries and which have been audited by other auditors under generally accepted auditing standards applicable in their respective countries. The Parent's management has converted the financial statements of such subsidiaries and joint venture located outside India from accounting principles generally accepted in their respective countries to accounting principles generally accepted in India. We have audited these conversion adjustments made by the Parent's management. Our opinion in so far as it relates to the amounts and disclosures included in respect of said subsidiaries and joint venture located outside India is based on the report of other auditors and the conversion adjustments prepared by the management of the parent and audited by us. (b) The consolidated Ind AS financial statements include the financial statements of 34 subsidiaries, whose financial statements reflect total assets of 55,693.16 crore as at March 31, 2017, total revenues of 15,300.27 crore and net cash outflows amounting to 343.25 crore for the year ended on that date, as considered in the consolidated Ind AS financial statements which have not been audited by us. The consolidated Ind AS financial statements also include the Group's share of loss (net) of 561.10 crore for the year ended March 31, 2017, as considered in the consolidated Ind AS financial statements, in respect of 4 joint ventures, whose financial statements have not been audited by us. These financial statements have been audited by other auditors whose reports have been furnished to us by the Management and our opinion on the consolidated Ind AS financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, joint ventures and associates, and our report in terms of sub-section (3) of Section 143 of the Act, in so far as it relates to the aforesaid subsidiaries and joint ventures is based solely on the reports of the other auditors. The above includes 7 joint operations which are located outside India whose financial statements have been prepared in accordance with accounting principles generally accepted in their respective countries and which have been audited by other auditors under generally accepted auditing standards applicable in their respective countries. The Parent's management has converted the financial statements of such joint operations located outside India from accounting principles generally accepted in their respective countries to accounting principles generally accepted in India. We have audited these conversion adjustments made by the Parent management. Our opinion in so far as it relates to the amounts and disclosures included in respect of said joint operations located outside India is based on the report of other auditors and the conversion adjustments prepared by the management of the Parent and audited by us. (a) The consolidated Ind AS financial statements include the financial statements of 16 joint operations included in the standalone financial statements of the Parent included in the Group whose financial statements reflect total assets of 3,647.41 crore as at March 31, 2017 and total revenues of 4,360.69 crore for the year ended on that date, as considered in the standalone financial statements of the Parent included in the Group. The financial statements of these joint operations have been audited by the other auditors whose reports have been furnished to us and our opinion in so far as it relates to the amounts and disclosures included in respect of these joint operations, and our report in terms of sub section (3) of Section 143 of the Act, in so far as it relates to the aforesaid joint operations is based solely on the report of such other auditors. Other Matters In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of reports of the other auditors on separate financial statements of joint operations, subsidiaries, joint ventures and associates referred to below in the Other Matters paragraph, the aforesaid consolidated Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the consolidated state of affairs of the Group, its joint operations, joint ventures and associates as at March 31, 2017, and its consolidated profit, consolidated total comprehensive income, consolidated statement of cash flows and consolidated statement of changes in equity for the year ended on that date. Opinion We believe that the audit evidence obtained by us and other auditors in terms of their reports referred to in sub-paragraphs (a) and (b) of the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the consolidated Ind AS financial statements. the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Parent's Board of Directors, as well as evaluating the overall presentation of the consolidated Ind AS financial statements. NOTES (f) With respect to the adequacy of the internal financial controls over financial reporting and the operating effectiveness of such controls, refer to our separate Report in "Annexure A", which is based on the auditors' reports of the Parent, joint operation companies, subsidiary companies, associate companies and joint venture companies incorporated in India. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Parent's internal financial controls over financial reporting. (g) With respect to the other matters to be included in the Auditors' Report in accordance with Rule 11 of the Companies (Audit and Auditor's) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to 341 Actuarial gains and losses pertaining to defined benefit obligations and re-measurement pertaining to return on plan assets are recognised in Other Comprehensive Income in accordance with Ind AS 19 and are not reclassified to profit or loss. Further, there are certain other items (as presented in OCI) that are accounted in Other Comprehensive Income and subsequently reclassified to Profit or Loss in accordance with Ind AS requirements. Under Ind AS 23 borrowing cost is calculated following effective rate of interest (EIR) method as described under Ind AS Pursuant to Ind AS requirements, investment property is presented separately. Under I-GAAP the same was presented as part of tangible assets. Tangible assets have been now divided into two categories under Ind AS viz. Property, plant and equipment and Investment property. The Company is executing some of the projects through unincorporated joint ventures (UJV). Such arrangements have been classified as joint operations pursuant to Ind AS 111 and accordingly Company's share in assets, liabilities, income and expenses of UJVS has been consolidated in standalone financials on a line by line basis. Under I-GAAP the investment in UJVs was being presented as a single line item in the Balance Sheet and the Company's share in the net profit or loss was accounted as a single line item in the Statement of Profit and Loss. D. C. B. A. NOTE [60] (contd.) 227.42 109. Under I-GAAP borrowing cost was computed by applying the coupon rate to the principle amount for the period with consequential impact in the asset items where borrowing cost is capitalised/inventorised. Borrowings are recognised at fair value at the inception and subsequently at amortised cost with interest recognised based on EIR method. 227.42 0.45 1.18 229.05 229.05 3361.47 (1.48) 11.76 146.46 422.16 1.63 All Investments except investments in group companies have been fair valued in accordance with Ind AS 109. Investments in debt securities are fair valued through OCI and reclassified to profit or loss on their sale. Other investments are fair valued through profit or loss. Under I-GAAP the current investments were carried at cost net of diminution in their value as at the Balance Sheet date. The long term investments were carried at cost net of permanent diminution, if any. E. Financial guarantee contracts have been recognised at fair value at the inception in accordance with Ind AS 109 along with accrued guarantee charges. Under I-GAAP financial guarantee given was disclosed as contingent liability and commitments. 340 Past service cost arising out of modifications in the post-retirement benefits is recognised in Profit or Loss pursuant to Ind AS 19. Under I-GAAP the past service cost was amortised over a period. Change in fair value of derivative instrument taken to hedge off-Balance Sheet item is accounted in the hedging reserve. Under I-GAAP the premium on these derivative instrument was recognised on accrual basis in the Statement of Profit and Loss. P. O. N. M. In accordance with Ind AS 105 group of assets held for sale and liabilities associated with such group is presented separately. Under I-GAAP there was no such requirement. Under Ind AS the final dividend including related tax is recognised in the period in which the obligation to pay is established on its approval, post reporting of financial statements. Under I-GAAP a provision was required to be made in the financial statements for the proposed final dividend in the period to which the liability related. Provision is made under Ind AS towards constructive obligations of the Company related to payment of performance linked rewards to the employees and tax on ESOP benefits, wherever applicable. Under I-GAAP the cost was recognised on actual payments. Pursuant to Ind AS 32, Foreign Currency Convertible Bonds (FCCB) issued by the Company is split into equity and liability component and presented accordingly. The measurement of liability component is done at fair value at the inception and subsequently at amortised cost. Under I-GAAP FCCB was accounted at cost and presented as borrowing. ESOP charge is accounted using fair value method. The portion of ESOP charge recoverable from the group companies is accordingly measured and recognised at fair value. Under I-GAAP ESOP charge was calculated based on intrinsic value method. K. J. I. The provision is made against trade receivables based on "expected credit loss" model as per Ind AS 109. Under I-GAAP the provision was made when the receivable turned doubtful based on the assessment on case to case basis. H. Deferred tax under Ind AS has been recognised for temporary differences between tax base and the book base of the relevant assets and liabilities. Under I-GAAP the deferred tax was accounted based on timing differences impacting the Statement of Profit and Loss for the period. G. F. Under Ind AS financial assets and liabilities are measured at fair value at the inception and subsequently at amortised cost or at fair value based on their classification. Under I-GAAP the financial assets and liabilities were measured at cost. NOTE [60] (contd.) Notes forming part of the Financial Statements (contd.) LARSEN & TOUBRO Q. The previous year I-GAAP figures have been reclassified/regrouped to make them comparable with Ind AS presentation. 6 us: ii. Intangible assets under development Other intangible assets Goodwill Investment property Capital work-in-progress Property, plant and equipment crore As at 1-4-2015 crore crore 223 455 As at 31-3-2016 crore As at 31-3-2017 crore Note Non-current assets ASSETS: Consolidated Balance Sheet as at March 31, 2017 347 (Membership No. 38332) (Partner) FIRDOSH D. BUCHIA crore 11242.66 12172.17 13669.78 2066.65 1257.88 2772.90 55(e) Investments in joint ventures and associates Financial assets 6473.66 9183.92 11353.23 568.47 556.57 432.59 1536.98 1446.96 1398.66 2768.70 4386.00 3429.72 1452.66 1790.53 2118.19 (Firm Registration No. 109982W) i. Chartered Accountants MUMBAI, May 29, 2017 ANNEXURE "A" TO THE INDEPENDENT AUDITORS' REPORT (Membership No. 38332) FIRDOSH D. BUCHIA (Partner) (Firm Registration No. 109982W) Chartered Accountants For SHARP & TANNAN MUMBAI, May 29, 2017 (Membership No. 70928) (Partner) (Referred to in paragraph "f" under 'Report on Other Legal and Regulatory Requirements' section of our report of even date) Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (the "Act") P. R. RAMESH Chartered Accountants For DELOITTE HASKINS & SELLS LLP To the best of our information and according to the information and explanations given to us, we report that, except where, for reasons explained in note no. 59 to the consolidated financial statements, the disclosures by certain subsidiaries in the financial services segments of the Group with regard to the Specified Bank Notes ("SBNs") were restricted to readily available information and also considering that certain amounts directly deposited into the bank accounts of those entities by their customers for which information relating to SBNs was not available with those entities were classified as "Permitted receipts/Other Denomination Notes", the Parent Company has provided requisite disclosures in the consolidated financial statements as regards the Group entities' holding and dealings in SBNs, as defined in the Notification S.O. 3407(E) dated 8th November, 2016, of the Ministry of Finance, during the period from November 9, 2016 to December 30, 2016. Based on audit procedures performed by us and the representations provided to us by the management, we report that the disclosures are in accordance with the relevant books of accounts maintained by those entities for the purpose of preparation of the consolidated Ind AS financial statements which, as the case may be, were produced before us or other auditors by the managements of the respective Group entities. iv. 345 There has been no delay in transferring amounts required to be transferred, to the Investor Education and Protection Fund by the Parent and its subsidiary companies, associate companies and joint venture companies incorporated in India. Provision has been made in the consolidated Ind AS financial statements, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts. The consolidated Ind AS financial statements disclose the impact of pending litigations on the consolidated financial position of the Group, its associates and joint ventures. iii. (Firm Registration No. 117366W/W-100018) In conjunction with our audit of the consolidated Ind AS financial statements of the Company as of and for the year ended March 31, 2017, we have audited the internal financial controls over financial reporting of LARSEN & TOUBRO LIMITED (hereinafter referred to as the "Parent") and its subsidiary companies (hereinafter referred to as the "Group"), which includes internal financial controls over financial reporting of the joint operations which are companies incorporated in India, its joint ventures and associate companies, which are companies incorporated in India, as of that date. Management's Responsibility for Internal Financial Controls The respective Boards of Directors of the Parent, its joint operations, its subsidiary companies, its joint ventures and its associate companies, which are companies incorporated in India, are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the respective Companies considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India ("ICAI"). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the respective company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013. (Membership No. 70928) (Partner) P. R. RAMESH (Firm Registration No. 117366W/W-100018) Chartered Accountants For DELOITTE HASKINS & SELLS LLP Our opinion is not modified in respect of the above matters. Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting in so far as it relates to 1 joint operation, 4 subsidiary companies, and 2 joint venture companies, which are companies incorporated in India, is based solely on the corresponding reports of the auditors of such companies incorporated in India. Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting in so far as it relates to 7 subsidiary companies and 4 associate companies, which are companies incorporated in India, whose financial statements/information are unaudited and our opinion on the adequacy and operating effectiveness of the internal financial controls over financial reporting of the Group is not affected as these financial statements/information are not material to the Group. Other Matters In our opinion, to the best of our information and according to the explanations given to us and based on the consideration of the reports of the other auditors referred to in the Other Matters paragraph below, the Parent, its subsidiary companies, its joint operations, its joint ventures and associate companies, which are companies incorporated in India, have, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting criteria established by the respective companies considering the essential components of internal control stated in the Guidance Note. Opinion Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Inherent Limitations of Internal Financial Controls Over Financial Reporting A Company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Meaning of Internal Financial Controls Over Financial Reporting We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditors of the subsidiary companies, joint operations, joint ventures and associate companies, which are companies incorporated in India, in terms of their reports referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting of the Parent, its subsidiary companies, its joint operations, its joint ventures and associate companies, which are companies incorporated in India. on the auditors' judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. LARSEN & TOUBRO 346 Our responsibility is to express an opinion on the internal financial controls over financial reporting of the Parent, its subsidiary companies, its joint operations, its joint ventures and its associate companies, which are companies incorporated in India, based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the ICAI and the Standards on Auditing, prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend Auditors' Responsibility For SHARP & TANNAN Notes forming part of the Financial Statements (contd.) 3590.52 2782.57 Deferred tax liabilities (net) Depreciation, amortisation, impairment and obsolescence 2369.93 1786.73 Exchange difference on items grouped under financing/investing activities (80.51) 45.56 Effect of exchange rate changes on cash and cash equivalents 34.92 (7.42) Interest expense 1339.84 1655.06 Interest income (422.62) (426.85) (Profit)/loss on sale of property, plant and equipment (net) (17.88) (60.55) (Profit)/loss on sale/fair valuation of investments (net) (34.22) (65.73) (Profit)/loss on sale of stake in subsidiary and joint venture companies of Developmental Projects (196.12) (748.63) Other non-current liabilities LARSEN & TOUBRO 25 50(d) 24 67340.58 191.33 23 22 23 41208.09 1970.62 44180.36 2892.84 50216.52 3563.60 185.91 41022.18 186.30 43994.06 186.59 50029.93 21 20 220 crore As at 1-4-2015 crore *crore As at 31-3-2016 * crore crore * crore Note As at 31-3-2017 and Realty Segments (95.81) (236.53) Employee stock option-discount forming part of employee benefits expense (3214.69) (3239.59) B. Cash flow from investing activities: Purchase of fixed assets Sale of fixed assets (including advance received) Purchase of non-current investments (2978.71) 156.33 (1551.99) (4321.63) 198.25 (575.05) Sale of non-current investments 6234.85 67.00 (Purchase)/sale of current investments (net) (6273.01) (171.25) Change in other bank balance and cash not available for immediate use (321.17) (909.11) Investment in joint ventures (2010.36) Deposits/ loans made with associates, joint ventures and third parties (net) (212.35) 333.08 (3201.67) Net cash (used in)/from operating activities Direct taxes refund/(paid) [net] 88.17 65.33 Operating profit before working capital changes 11199.12 10484.88 Adjustments for: (Increase)/decrease in trade and other receivables (2078.84) (9449.56) (Increase)/decrease in inventories 1509.77 216.60 Increase/(decrease) in trade payables and customer advances 4550.32 9308.11 Cash generated from operations before financing activities 15180.37 (Increase)/decrease in loans and advances towards financing activities (5743.85) 10560.03 (10584.93) Cash generated from operations 9436.52 (24.90) 67531.91 526.59 610.95 172.14 61223.84 141.40 P. R. RAMESH by the hand of Firm's Registration No. 117366W/W-100018 Chartered Accountants For DELOITTE HASKINS & SELLS LLP In terms of our report attached 1 to 63 STATEMENTS NOTES FORMING PART OF THE FINANCIAL 33 Partner 32 COMMITMENTS (capital and others) CONTINGENT LIABILITIES 171121.80 194726.15 212059.67 1123.81 13.88 1495.60 52 62 33 Membership No. 70928 R. SHANKAR RAMAN Chief Financial Officer & Whole-time Director (DIN 00019798) SUBODH BHARGAVA (DIN 00035672) Other income Revenue from operations INCOME: 2015-16 crore Consolidated Statement of Profit and Loss for the year ended March 31, 2017 349 SANJEEV AGA (DIN 00022065) Directors VIKRAM SINGH MEHTA (DIN 00041197) N.HARIHARAN Company Secretary M. No. A3471 Mumbai, May 29, 2017 Membership No. 038332 Partner FIRDOSH D. BUCHIA Firm's Registration No. 109982W by the hand of Chartered Accountants For SHARP & TANNAN SUSHOBHAN SARKER (DIN 00088276) M.M.CHITALE (DIN 00101004) SUNITA SHARMA (DIN 02949529) M. DAMODARAN (DIN 02106990) (DIN 00001514) A. M. NAIK Group Executive Chairman 299.55 (242.25) 83.49 TOTAL EQUITY AND LIABILITIES 10078.90 27 15897.14 14896.75 16556.79 26 2222 Other financial liabilities Trade payables Current maturities of long term borrowings 12014.90 Borrowings Current liabilities 211.93 181.14 659.49 635.48 385.35 424.66 52931.76 61365.24 52709.64 222.12 Financial liabilities 8122.87 28 29774.25 held for sale Liabilities associated with group(s) of assets classified as Current tax liabilities (net) 1676.85 2303.52 2658.34 20804.60 24407.89 23444.74 ww 31 30 Provisions Other current liabilities 49849.75 58237.65 61598.99 3772.85 4322.44 5189.05 29 22056.89 27003.56 240.29 Interest received 408.84 402.31 (d) Basis of consolidation (i) The consolidated financial statements incorporate the financial statements of the Parent Company and its subsidiaries. For this purpose, an entity which is, directly or indirectly, controlled by the Parent Company is treated as subsidiary. The Parent Company together with its subsidiaries constitute the Group. Control exists when the Parent Company, directly or indirectly, has power over the investee, is exposed to variable returns from its involvement with the investee and has the ability to use its power to affect its returns. (ii) Consolidation of a subsidiary begins when the Parent Company, directly or indirectly, obtains control over the subsidiary and ceases when the Parent Company, directly or indirectly, loses control of the subsidiary. Income and expenses of a subsidiary acquired or disposed off during the year are included in the consolidated Statement of Profit and Loss from the date the Parent Company, directly or indirectly, gains control until the date when the Parent Company, directly or indirectly, ceases to control the subsidiary. (iii) The consolidated financial statements of the Group combines financial statements of the Parent Company and its subsidiaries line-by-line by adding together the like items of assets, liabilities, income and expenses. All intra-group assets, liabilities, income, expenses and unrealised profits/losses on intra-group transactions are eliminated on consolidation. The accounting 356 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [1] (contd.) policies of subsidiaries have been harmonised to ensure the consistency with the policies adopted by the Parent Company. The consolidated financial statements have been presented to the extent possible, in the same manner as Parent Company's standalone financial statements. Amounts in the financial statements are presented in Indian Rupees in crore [1 crore = 10 million] rounded off to two decimal places as permitted by Schedule III to the Companies Act, 2013. Per share data are presented in Indian Rupees to two decimal places. Profit or loss and each component of other comprehensive income are attributed to the owners of the Parent Company and to the non-controlling interests and have been shown separately in the financial statements. (v) The gains/losses in respect of part divestment/dilution of stake in subsidiary companies not resulting in ceding of control, are recognised directly in other equity attributable to the owners of the Parent Company. (vi) The gains/losses in respect of divestment of stake resulting in ceding of control in subsidiary companies are recognised in the Statement of Profit and Loss. The investment representing the interest retained in a former subsidiary, if any, is initially recognised at its fair value with the corresponding effect recognised in the Statement of Profit and Loss as on the date the control is ceded. Such retained interest is subsequently accounted as an associate or a joint venture or a financial asset. (e) Investments in joint venture and associates (f) When the Group has with other parties joint control of the arrangement and rights to the net assets of the joint arrangement, it recognises its interest as joint venture. Joint control exists when the decisions about the relevant activities require unanimous consent of the parties sharing the control. When the Group has significant influence over the other entity, it recognises such interests as associates. Significant influence is the power to participate in the financial and operating policy decisions of the entity but is not control or joint control over the entity. The results, assets and liabilities of joint venture and associates are incorporated in the consolidated financial statements using equity method of accounting after making necessary adjustments to achieve uniformity in application of accounting policies, wherever applicable. An investment in associate or joint venture is initially recognised at cost and adjusted thereafter to recognise the Group's share of profit or loss and other comprehensive income of the joint venture or associate. Gain or loss in respect of changes in other equity of joint ventures or associates resulting in dilution of stake in the joint ventures and associates is recognised in the Statement of Profit and Loss. On acquisition of investment in a joint venture or associate, any excess of cost of investment over the fair value of the assets and liabilities of the joint venture, is recognised as goodwill and is included in the carrying value of the investment in the joint venture and associate. The excess of fair value of assets and liabilities over the investment is recognised directly in equity as capital reserve. The unrealised profits/losses on transactions with joint ventures are eliminated by reducing the carrying amount of investment. The carrying amount of investment in joint ventures and associates is reduced to recognise impairment, if any, when there is objective evidence of impairment. When the Group's share of losses of an associate or a joint venture exceeds the Group's interest in that associate or joint venture (which includes any long term interests that, in substance, form part of the Group's net investment in the associate or joint venture), the Group discontinues recognising its share of further losses. Additional losses are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture. Interests in joint operations When the Group has joint control of the arrangement based on contractually determined right to the assets and obligations for liabilities, it recognises such interests as joint operations. Joint control exists when the decisions about the relevant activities require unanimous consent of the parties sharing the control. In respect of its interests in joint operations, the Group recognises its share in assets, liabilities, income and expenses line-by-line in the standalone financial statements of the entity which is party to such joint arrangement which then becomes part of the consolidated financial statements of the Group when the financial statements of the Parent Company and its subsidiaries are combined for consolidation. Interests in joint operations are included in the segments to which they relate. (g) Goodwill on consolidation (iv) Non-controlling interest represents that part of the total comprehensive income and net assets of subsidiaries attributable to interests which are not owned, directly or indirectly, by the Parent Company. The Balance Sheet and the Statement of Profit and Loss are prepared and presented in the format prescribed in the Schedule III to the Companies Act, 2013 ("the Act"). The Statement of Cash Flows has been prepared and presented as per the requirements of Ind AS 7 "Statement of Cash Flows". The disclosure requirements with respect to items in the Balance Sheet and Statement of Profit and Loss, as prescribed in the Schedule III to the Act, are presented by way of notes forming part of the financial statements along with the other notes required to be disclosed under the notified Accounting Standards and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. (c) Presentation of financial statements • Level 3 inputs are unobservable inputs for the valuation of assets or liabilities M.M.CHITALE (DIN 00101004) SUBODH BHARGAVA (DIN 00035672) N.HARIHARAN VIKRAM SINGH MEHTA Company Secretary (DIN 00041197) M. No. A3471 SUNITA SHARMA (DIN 02949529) SUSHOBHAN SARKER (DIN 00088276) Directors SANJEEV AGA (DIN 00022065) 355 Notes forming part of the Consolidated Financial Statements NOTE [1] Significant Accounting Policies (a) Statement of compliance The Group's financial statements have been prepared in accordance with the provisions of the Companies Act, 2013 and the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 issued by Ministry of Corporate Affairs in exercise of the powers conferred by section 133 read with sub-section (1) of section 210A of the Companies Act, 1956. In addition, the guidance notes/announcements issued by the Institute of Chartered Accountants of India (ICAI) are also applied except where compliance with other statutory promulgations require a different treatment. The financials for the year ended March 31, 2017 of the Group are the first financial statements prepared in compliance with Ind AS. The date of transition to Ind AS is April 1, 2015. The financial statements upto the year ended March 31, 2016, were prepared in accordance with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 ( "I-GAAP") and other relevant provisions of the Act. The figures for the year ended March 31, 2016 have now been restated under Ind AS to provide comparability. These financials statements have been approved for issue by the Board of Directors at their meeting held on May 29, 2017. (b) Basis of accounting The Group maintains its accounts on accrual basis following historical cost convention, except for certain financial instruments that are measured at fair value in accordance with Ind AS and certain items of property, plant and equipment that were revalued in earlier year in accordance with the I-GAAP principles. The carrying value of all the items of property, plant and equipment as on the date of transition is considered as the deemed cost. Fair value measurements under Ind AS are categorised as below based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety: • Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at measurement date Level 2 inputs are inputs, other than quoted prices included in level 1, that are observable for the asset or liability, either directly or indirectly; and Goodwill on consolidation as on the date of transition represents the excess of cost of acquisition at each point of time of making the investment in the subsidiary over the Group's share in the net worth of a subsidiary. For this purpose, the Group's share of net worth is determined on the basis of the latest financial statements, prior to the acquisition, after making necessary adjustments for material events between the date of such financial statements and the date of respective acquisition. Capital reserve on M. DAMODARAN (DIN 02106990) 357 NOTE [1] (contd.) Fixed price contracts: Contract revenue is recognised only to the extent of cost incurred till such time the outcome of the job cannot be ascertained reliably subject to the condition that it is probable such cost will be recoverable. When the outcome of the contract is ascertained reliably, contract revenue is recognised at cost of work performed on the contract plus proportionate margin, using the percentage of completion method. Percentage of completion is the proportion of cost of work performed to-date, to the total estimated contract costs. The estimated outcome of a contract is considered reliable when all the following conditions are satisfied: i. the amount of revenue can be measured reliably; ii. it is probable that the economic benefits associated with the contract will flow to the Group; iii. the stage of completion of the contract at the end of the reporting period can be measured reliably; and iv. the costs incurred or to be incurred in respect of the contract can be measured reliably 2. Consolidated Balance Sheet as at March 31, 2017 (contd.) Equity Equity share capital Other equity Equity attributable to owners of the Company Non-controlling interest Liabilities Non-current liabilities Financial liabilities Borrowings Other financial liabilities EQUITY AND LIABILITIES: 1. Cost plus contracts: Revenue from cost plus contracts is recognised by reference to the recoverable costs incurred during the period plus the margin as agreed with the customer. Revenue from construction/project related activity and contracts for supply/commissioning of complex plant and equipment is recognised as follows: B. consolidation represents excess of the Group's share in the net worth of a subsidiary over the cost of acquisition at each point of time of making the investment in the subsidiary. Goodwill arising on consolidation is not amortised, however, it is tested for impairment annually. In the event of cessation of operations of a subsidiary, the unimpaired goodwill is written off fully. Goodwill on consolidation arising on acquisitions on or after the date of transition represents the excess of the cost of acquisition at each point of time of making the investment in the subsidiary, over the Group's share in the fair value of the net assets of a subsidiary. Goodwill on consolidation is allocated to cash generating units or group of cash generating units that are expected to benefit from the synergies of the acquisition. (h) Operating cycle for current and non-current classification (i) Operating cycle for the business activities of the Group covers the duration of the specific project/contract/product line/service including the defect liability period, wherever applicable and extends up to the realisation of receivables (including retention monies) within the agreed credit period normally applicable to the respective lines of business. Revenue recognition Revenue is recognised based on nature of activity when consideration can be reasonably measured and recovered with reasonable certainty. Revenue is measured at the fair value of the consideration received or receivable and is reduced for estimated customer returns, rebates and other similar allowances. Revenue from operations Revenue includes excise duty and adjustments made towards liquidated damages and price variation wherever applicable. Escalation and other claims, which are not ascertainable/acknowledged by customers are not taken into account. 358 A. Sale of goods Revenue from sale of manufactured and traded goods is recognised when the goods are delivered and titles have passed, provided all the following conditions are satisfied: 1. 2. significant risks and rewards of ownership of the goods are transferred to the buyer; the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the good sold; 3. the amount of revenue can be measured reliably; 4. it is probable that the economic benefits associated with the transaction will flow to the Group; and 5. the costs incurred or to be incurred in respect of the transaction can be measured reliably Notes forming part of the Consolidated Financial Statements (contd.) A. M. NAIK Group Executive Chairman (DIN 00001514) R. SHANKAR RAMAN Chief Financial Officer & Whole-time Director (DIN 00019798) 3789.51 crore crore C. Cash flow from financing activities: Proceeds from issue of share capital 53.32 Proceeds from non-current borrowings 30900.44 70.19 30224.75 Repayment of non-current borrowings (27531.88) Proceeds from other borrowings (net) 2015-16 1704.64 Payment (to)/from non controling interest (net)- including sale proceeds on divestment of part stake in subsidiary companies 2058.82 970.58 Dividends paid (1701.51) (1512.33) Additional tax on dividend (391.54) (329.91) (19753.06) 44.07 2016-17 Consolidated Statement of Cash Flows for the year ended March 31, 2017 (contd.) LARSEN & TOUBRO Dividend received from associates 0.57 16.93 Dividend received from other investments 748.63 196.12 Consideration received on transfer of foundry business unit 83.65 79.70 Consideration received on disposal of subsidiaries (including advance received) 2169.01 410.30 Consideration received on disposal of joint venture 21.54 Consideration paid on acquisition of subsidiaries (7.07) (32.36) Cash & cash equivalents discharged pursuant to disposal of subsidiaries/joint ventures Net cash (used in)/from investing activities (19.61) (33.14) (9740.24) (4626.56) 354 Interest paid (including cash flows from interest rate swaps) (1565.20) (2461.59) Net cash (used in)/from financing activities Chartered Accountants Firm's Registration No. 109982W by the hand of FIRDOSH D. BUCHIA Partner Membership No. 038332 Mumbai, May 29, 2017 2016-17 2015-16 crore 3793.33 crore 3806.54 1779.16 1583.37 223.56 98.18 5796.05 5488.09 17.88 (17.03) 1779.16 1583.37 223.56 98.18 3811.21 For SHARP & TANNAN Total income Membership No. 70928 P. R. RAMESH 3527.09 7252.70 Net (decrease)/increase in cash and cash equivalents (A + B + C) 21.70 (613.45) Cash and cash equivalents at beginning of the year 3789.51 4402.96 Cash and cash equivalents at end of the year 3811.21 3789.51 Notes: 1. Statement of Cash Flows has been prepared under the indirect method as set out in the Indian Accounting Standard (Ind AS) 7 "Statement of Cash Flows" as specified in the Companies (Indian Accounting Standards) Rules, 2015. 2. Purchase of fixed assets represents additions to property, plant & equipment, investment property and intangible assets adjusted for movement of (a) capital work in progress for property, plant & equipment and investment property and (b) Intangible assets under development during the year. 3. Cash and cash equivalents included in the Statement of Cash Flows comprise the following: (a) Cash and cash equivalents disclosed under current assets [Note 14] (b) Other bank balances disclosed under current assets [Note 15] (c) Cash and cash equivalents disclosed under non-current assets [Note 9] Total Cash and cash equivalents as per Balance Sheet Add: (i) Unrealised exchange (gain)/loss on cash and cash equivalents Less: (ii) Other bank balances disclosed under current assets [Note 15] Less: (iii) Cash and cash equivalents disclosed under non-current assets [Note 9] Total Cash and cash equivalents as per Statement of Cash Flows 4. Previous year's figures have been regrouped/reclassified wherever applicable. In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm's Registration No. 117366W/W-100018 by the hand of Partner tion reserve EXPENSES: Note (12.35) 671.93 (659.58) (74.67) Increase in non-controlling interest non-controlling interest Net gain/loss on transaction with Dividend paid for the previous year (including tax on dividend) Employee share options (net) during the year Transfer from/(to) retained earnings (0.66) Impact of business combination (74.67) 201.63 (0.07) (0.66) (0.66) (0.07) (0.07) 201.63 201.63 I I 315.05 4703.75 4388.70 Share issue expenses (0.69) (75.36) (1805.90) (1805.90) M. DAMODARAN (DIN 02106990) SUNITA SHARMA (DIN 02949529) M.M.CHITALE (DIN 00101004) SUSHOBHAN SARKER (DIN 00088276) VIKRAM SINGH MEHTA (DIN 00041197) Directors SANJEEV AGA (DIN 00022065) 353 Consolidated Statement of Cash Flows for the year ended March 31, 2017 2015-16 A. Cash flow from operating activities: 8765.93 2016-17 crore crore 7925.40 Adjustments for: Dividend received due to dilution/ divestment/ 262.85 (262.85) 262.85 (57.77) (1863.67) (2.59) (DIN 00001514) 95.91 3.23 159.05 Balance as at 1-4-2015 Particulars 352 Other equity B. 186.30 186.59 93,14,78,845 93,29,65,803 Issued, subscribed and fully paid up equity shares outstanding at the end of the year 0.39 Profit for the year (a) 19,16,784 14,86,958 Add: Shares issued on exercise of employee stock options during the year 185.91 92,95,62,061 186.30 93,14,78,845 Issued, subscribed and fully paid up equity shares outstanding at the beginning of the year crore Number of shares shares 0.29 Other comprehensive income (b) Total comprehensive income for the year (a+b) 4232.88 311.82 4544.70 (2.59) 155.82 (8.86) 71.36 95.91 78.62 41022.18 1970.62 42992.80 29703.20 538.23 (51.90) 4232.88 281.06 7963.16 369.24 1987.37 153.20 income Debt instruments through other comprehensive tion reserve bonds transla- options (net) convertible account currency Total Items of other comprehensive income Total other Non- Foreign Hedging equity controlling interest earnings currency reserve Retained Capital Securities Employee Statutory reserve premium share reserves Reserves and surplus. Equity component of foreign (crore) Issue of equity shares 4224.02 71.36 A. M. NAIK Group Executive Chairman SUBODH BHARGAVA (DIN 00035672) R. SHANKAR RAMAN Chief Financial Officer & Whole-time Director (DIN 00019798) 928.48 acquisition through other comprehensive Balance as at 1-4-2016 Profit for the year (c) Other comprehensive income (d) Total comprehensive income for the year (c+d) Issue of equity shares 153.20 928.48 280.40 282.22 2659.30 31724.59 609.59 6041.23 44.01 (20.72) (131.35) 303.51 income 76.03 43994.06 2892.84 46886.90 6041.23 444.27 6485.50 (5.06) 146.38 31.40 177.78 6020.51 (131.35) 303.51 (5.06) 6187.61 475.67 6663.28 Share issue expenses 154.18 (0.05) 8164.72 Balance as at 31-3-2016 153.20 280.40 8164.72 282.22 2659.30 bonds (net) convertible transla- instruments interest Total (crore) Debt equity controlling Items of other comprehensive income Total other Non- Foreign Hedging earnings currency reserve premium share reserves options account reserve Retained Capital Securities Employee Statutory -Reserves and surplus- Equity component of foreign currency Particulars Consolidated Statement of Changes in Equity for the year ended March 31, 2017 (contd.) LARSEN & TOUBRO 76.03 43994.06 2892.84 46886.90 31724.59 609.59 44.01 154.18 154.18 (0.05) (0.05) (92.14) (2162.14) 1721.66 1721.66 (1721.66) 1988.93 1988.93 153.20 280.28 8318.85 303.25 2742.30 37335.32 478.24 347.52 70.97 50029.93 3563.60 53593.53 In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm's Registration No. 117366W/W-100018 by the hand of P. R. RAMESH Partner Membership No. 70928 For SHARP & TANNAN Chartered Accountants Firm's Registration No. 109982W by the hand of FIRDOSH D. BUCHIA Partner Membership No. 038332 Mumbai, May 29, 2017 N.HARIHARAN Company Secretary M. No. A3471 (2070.00) crore (2070.00) (0.30) Impact of business combination (0.12) (0.12) (0.12) Transfer from/(to) retained earnings during the year Employee share options (net) Income tax charged against retained earnings Dividend paid for the previous year (including tax on dividend) Net gain/loss on transaction with non-controlling interest Increase in non-controlling interest due to dilution/ divestment/ acquisition Balance as at 31-3-2017 (21.86) 42.89 83.00 (61.14) 42.89 19.96 62.85 (0.30) (0.30) 2016-17 Number of 2015-16 Tax expense: 8019.62 94.22 7925.40 8887.36 121.43 8765.93 Profit before tax 42 Exceptional items Current tax Profit before exceptional items and tax 102646.08 Total expenses 5.77 1.51 Less: Overheads capitalised 94960.06 102647.59 1786.73 2369.93 Depreciation, amortisation, impairment and obsolescence 94954.29 50(a) 2976.31 2817.69 4544.70 6485.50 Carried forward 4544.70 6485.50 (990.16) (395.27) 55(f) Add: Share in profit/(loss) of joint ventures/associates (net) Profit for the year 5534.86 6880.77 47.80 (141.96) Less: Additional provision/(reversal) of tax on dividend distributed by subsidiaries 5582.66 6738.81 Profit after tax 2436.96 2148.55 (380.73) (827.76) 50(a) Deferred tax (net) 1655.06 350 1339.84 Finance costs Purchase of stock-in-trade 20256.77 20732.39 852.86 699.19 Construction materials consumed Excise duty 13729.98 14320.98 Cost of raw materials, components consumed 1610.57 36 102879.69 904.35 101975.34 crore 111412.01 110011.00 1401.01 35 34 crore * crore Manufacturing, construction and operating expenses: 1333.44 Stores, spares and tools consumed 2090.42 5778.52 7045.50 38 Sales, administration and other expenses 13330.84 13853.07 37 Employee benefits expense 72408.91 78039.25 4967.11 5362.09 Finance cost of financial services business and finance lease activity 9160.56 10583.48 Other manufacturing, construction and operating expenses (514.86) 84.00 Changes in inventories of finished goods, work-in-progress and stock-in-trade and property development 20788.86 22556.13 Sub-contracting charges 1834.19 39 LARSEN & TOUBRO Consolidated Statement of Profit and Loss for the year ended March 31, 2017 (contd.) 2016-17 Partner P. R. RAMESH by the hand of Firm's Registration No. 117366W/W-100018 Chartered Accountants For DELOITTE HASKINS & SELLS LLP In terms of our report attached 1 to 63 45.27 2.00 2.00 Membership No. 70928 64.58 NOTES FORMING PART OF THE FINANCIAL STATEMENTS Face value per equity share (*) Diluted earnings per equity share (*) 45.48 64.80 49 Basic earnings per equity share (*) 4703.75 6663.28 315.05 49 For SHARP & TANNAN Chartered Accountants Firm's Registration No. 109982W by the hand of 2016-17 A. Equity share capital Consolidated Statement of Changes in Equity for the year ended March 31, 2017 351 SANJEEV AGA (DIN 00022065) Directors SUSHOBHAN SARKER (DIN 00088276) SUNITA SHARMA (DIN 02949529) M.M.CHITALE (DIN 00101004) M. No. A3471 Company Secretary (DIN 00041197) VIKRAM SINGH MEHTA N.HARIHARAN SUBODH BHARGAVA (DIN 00035672) M. DAMODARAN (DIN 02106990) (DIN 00001514) Group Executive Chairman A. M. NAIK R. SHANKAR RAMAN Chief Financial Officer & Whole-time Director (DIN 00019798) Mumbai, May 29, 2017 Membership No. 038332 Partner FIRDOSH D. BUCHIA 475.67 4388.70 6187.61 - Non-controlling interests 382.94 Total comprehensive income for the year Other comprehensive income for the year [net of tax] Cost of hedging reserve [net of tax] a cash flow hedge [net of tax] Effective portion of gains and losses on hedging instruments in 68.93 (130.83) (2.59) (6.41) Debt instruments through other comprehensive income [net of tax] Exchange differences in translating the financial statements of foreign operations [net of tax] B. Items that will be reclassified to profit or loss: (10.42) (25.35) A. Items that will not be reclassified to profit or loss: Remeasurements of the defined benefit plans [net of tax] Other comprehensive income Brought forward crore 4544.70 crore crore 6485.50 crore Note 2015-16 91.78 Particulars (42.57) 177.78 - Owners of the Company Total comprehensive income for the year attributable to: 159.05 177.78 3.23 31.40 - Non-controlling interests 155.82 146.38 - Owners of the Company Other comprehensive income for the year attributable to: 4544.70 6485.50 311.82 444.27 - Non-controlling interests 4232.88 6041.23 - Owners of the Company Profit for the year attributable to: 4703.75 6663.28 159.05 11.35 Profit before tax (excluding non-controlling interest and exceptional items) Provisions Stage of completion is determined by the proportion of actual costs incurred to date to the estimated total costs of A. All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets as follows: 1. 2. Investments in debt instruments that are designated as fair value through profit or loss (FVTPL) - at fair value Other investments in debt instruments - at amortised cost, subject to following conditions: B. • • The asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and The contractual terms of instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. 3. Debt instruments that meet the following conditions are subsequently measured at fair value through other comprehensive income [FVTOCI] (unless the same are designated as fair value through profit or loss) 4. 5. 6. Financial assets • The asset is held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets; and The contractual terms of instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Debt instruments at FVTPL is a residual category for debt instruments, if any, and all changes are recognised in profit or loss. Investments in equity instruments are classified as FVTPL, unless the related instruments are not held for trading and the Group irrevocably elects on initial recognition to present subsequent changes in fair value in other comprehensive income. The group has elected to measure the investments in associates and joint ventures held through unit trusts at FVTPL. For financial assets that are measured at FVTOCI, income by way of interest, dividend and exchange difference, if any, (on debt instrument) is recognised in profit or loss and changes in fair value (other than on account of such income) are recognised in other comprehensive income and accumulated in other equity. On disposal of debt instruments at FVTOCI, the cumulative gain or loss previously accumulated in other equity is reclassified to profit or loss. In case of equity instruments at FVTOCI, such cumulative gain or loss is not reclassified to profit or loss on disposal of investments. C. A financial asset is primarily derecognised when: 1. the right to receive cash flows from the asset has expired, or 2. D. the group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a pass-through arrangement; and a) the group has transferred substantially all the risks and rewards of the asset, or b) the group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. • (i) NOTE [1] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Remeasurement, comprising actuarial gains and losses, the return on plan assets (excluding amounts included in net interest on the net defined benefit liability or asset) and any change in the effect of asset ceiling (if applicable) is recognised in other comprehensive income and is reflected in retained earnings and the same is not eligible to be reclassified to profit or loss. Defined benefit costs comprising current service cost, past service cost and gains or losses on settlements are recognised in the Statement of Profit and Loss as employee benefit expenses. Interest cost implicit in defined benefit employee cost is recognised in the Statement of Profit and Loss under finance cost. Gains or losses on settlement of any defined benefit plan are recognised when the settlement occurs. Past service cost is recognised as expense at the earlier of the plan amendment or curtailment and when the Group recognises related restructuring costs or termination benefits. In case of funded plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans to recognise the obligation on a net basis. 363 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [1] (contd.) (iii) Long term employee benefits: The obligation recognised in respect of long term benefits such as long term compensated absences, long service award etc. is measured at present value of estimated future cash flows expected to be made by the Group and is recognised in a similar manner as in the case of defined benefit plans vide (ii) B above. Long term employee benefit costs comprising current service cost and gains or losses on curtailments and settlements, remeasurements including actuarial gains and losses are recognised in the Statement of Profit and Loss as employee benefit expenses. Interest cost implicit in long term employee benefit cost is recognised in the Statement of Profit and Loss under finance cost. (iv) Termination benefits: Termination benefits such as compensation under employee separation schemes are recognised as expense when the company's offer of the termination benefit is accepted or when the Group recognises the related restructuring costs whichever is earlier. (p) Leases The determination of whether an agreement is, or contains, a lease is based on the substance of the agreement at the date of inception. Power generation projects executed under long term Power Purchase Agreements (PPA) with state utilities that are in substance finance leases are classified accordingly. (i) Finance leases: A. B. Leases where the Group has substantially transferred all the risks and rewards of ownership of the related assets are classified as finance leases. Assets under finance lease are capitalised at the commencement of the lease at the lower of the fair value or the present value of minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the outstanding liability for each period. Assets given under a finance lease are recognised as a receivable at an amount equal to the net investment in the lease. Lease income is recognised over the period of the lease so as to yield a constant rate of return on the net investment in the lease. (ii) Operating leases: The leases which are not classified as finance lease are operating leases. A. Lease rentals on assets under operating lease are charged to the Statement of Profit and Loss on a straight line basis over the term of the relevant lease. B. Assets leased out under operating leases are continued to be shown under the respective class of assets. Rental income is recognised on a straight line basis over the term of the relevant lease. (Also refer to policy on depreciation, above) (q) Financial instruments Financial assets and/or financial liabilities are recognised when the Group becomes party to a contract embodying the related financial instruments. All financial assets, financial liabilities and financial guarantee contracts are initially measured at transaction values and where such values are different from the fair value, at fair value. Transaction costs that are attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from, as the case may be, the fair value of such financial assets or liabilities on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss. A financial asset and a financial liability is offset and presented on net basis in the balance sheet when there is a current legally enforceable right to set-off the recognised amounts and it is intended to either settle on net basis or to realise the asset and settle the liability simultaneously. 364 LARSEN & TOUBRO On derecognition of a financial asset in its entirety, the difference between the carrying amount measured at the date of derecognition and the consideration received is recognised in profit or loss. Impairment of financial assets: The Group recognises impairment loss on trade receivables using expected credit loss model which involves use of a provision matrix constructed on the basis of historical credit loss experience as permitted under Ind AS 109. In respect of financial services business, the Group applies a separate model of the expected credit loss for recognising impairment loss on financial assets measured at amortised cost, debt instruments at FVTOCI, lease receivables, trade receivables and other contractual rights to receive cash or other financial asset, and financial guarantees not designated as at FVTPL as follows: Expected credit losses are the weighted average of credit losses with the respective risks of default occurring as the weights. Credit loss is the difference between all contractual cash flows that are due to the Group in accordance with the contract and all the cash flows that the Group expects to receive (i.e. all cash shortfalls), discounted at the original effective interest rate (or credit-adjusted effective interest rate for purchased or originated credit-impaired financial assets). The Group estimates cash flows by considering all contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) through the expected life of that financial instrument. Securities premium includes: A. The difference between the face value of the equity shares and the consideration received in respect of shares issued pursuant to Stock Option Scheme. B. The fair value of the stock options which are treated as expense, if any, in respect of shares allotted pursuant to Stock Options Scheme. (ii) The issue expenses of securities which qualify as equity instruments are written off against securities premium account. (u) Borrowing Costs Borrowing costs include interest expense calculated using the effective interest method, finance charges in respect of assets acquired on finance lease and exchange differences arising from foreign currency borrowings, to the extent they are regarded as an adjustment to interest costs. Borrowing costs net of any investment income from the temporary investment of related borrowings, that are attributable to the acquisition, construction or production of a qualifying asset are capitalised/inventoried as part of cost of such asset till such time the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognised in profit or loss in the period in which they are incurred. 367 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [1] (contd.) (v) Share-based payment arrangements The stock options granted to employees pursuant to the Group's Stock Options Schemes, are measured at the fair value of the options at the grant date. The fair value of the options is treated as discount and accounted as employee compensation cost over the vesting period on a straight line basis. The amount recognised as expense in each year is arrived at based on the number of grants expected to vest. If a grant lapses after the vesting period, the cumulative discount recognised as expense in respect of such grant is transferred to the general reserve within equity. (w) Foreign currencies The functional currency and presentation currency of the Group is Indian Rupee. Functional currency of the Group and foreign operations has been determined based on the primary economic environment in which the Group and its foreign operations operate considering the currency in which funds are generated, spent and retained. (ii) Transactions in currencies other than the Group's functional currency are recorded on initial recognition using the exchange rate at the transaction date. At each Balance Sheet date, foreign currency monetary items are reported at the prevailing closing spot rate. Non-monetary items that are measured in terms of historical cost in foreign currency are not retranslated. Exchange differences that arise on settlement of monetary items or on reporting of monetary items at each Balance Sheet date at the closing spot rate are recognised in the Statement of Profit and Loss in the period in which they arise except for: A. exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings; B. exchange differences on transactions entered into in order to hedge certain foreign currency risks; and C. exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur (therefore forming part of the net investment in foreign operation), which are recognised initially in other comprehensive income and reclassified from equity to profit or loss on repayment of the monetary items. (iii) Financial statements of foreign operations whose functional currency is different than Indian Rupees are translated into Indian Rupees as follows: A. assets and liabilities for each Balance Sheet presented are translated at the closing rate at the date of that Balance Sheet; income and expenses for each income statement are translated at average exchange rates; and B. C. all resulting exchange differences are recognised in other comprehensive income and accumulated in equity as foreign currency translation reserve for subsequent reclassification to profit or loss on disposal of such foreign operations. The portion of foreign currency translation reserve attributed to non-controlling interest is reflected as part of non-controlling interest. (x) Accounting and reporting of information for Operating Segments Operating segments are those components of the business whose operating results are regularly reviewed by the chief operating decision making body in the Group to make decisions for performance assessment and resource allocation. The reporting of segment information is the same as provided to the management for the purpose of the performance assessment and resource allocation to the segments. Segment accounting policies are in line with the accounting policies of the Group. In addition, the following specific accounting policies have been followed for segment reporting: Segment revenue includes sales and other operational revenue directly identifiable with/allocable to the segment including (a) inter segment revenue and (b) profit on sale of stake in the subsidiary and/or joint venture companies under Developmental projects segment and Realty business grouped under "Others" segment (ii) Expenses that are directly identifiable with/allocable to segments are considered for determining the segment result. In respect of (a) Financial Services segment and (b) Power Generation projects under Developmental Projects segment which are classified as assets given on finance lease, the interest expenses on borrowings are accounted as segment expenses. (i) The obligation is measured at the present value of the estimated future cash flows using a discount rate based on the market yield on government securities of a maturity period equivalent to the weighted average maturity profile of the defined benefit obligations at the Balance Sheet date. (t) Securities premium account (s) Cash and bank balances 365 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [1] (contd.) The Group measures the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition. If the credit risk on a financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses. 12-month expected credit losses are portion of the lifetime expected credit losses and represent the lifetime cash shortfalls that will result if default occurs within the 12 months after the reporting date and thus, are not cash shortfalls that are predicted over the next 12 months. When making the assessment of whether there has been a significant increase in credit risk since initial recognition, the Group uses the change in the risk of a default occurring over the expected life of the financial instrument instead of the change in the amount of expected credit losses. To make that assessment, the Group compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition and considers reasonable and supportable information, that is available without undue cost or effort, that is indicative of significant increases in credit risk since initial recognition. (ii) Financial liabilities A. B. Financial liabilities, including derivatives and embedded derivatives, which are designated for measurement at FVTPL are subsequently measured at fair value. Financial guarantee contracts are subsequently measured the amount of impairment loss allowance or the amount recognised at inception net of cumulative amortisation, whichever is higher. All other financial liabilities including loans and borrowings are measured at amortised cost using Effective Interest Rate (EIR) method. A financial liability is derecognised when the related obligation expires or is discharged or cancelled. (iii) The Group designates certain hedging instruments such as derivatives, embedded derivatives and in respect of foreign currency risk, certain non-derivatives as either fair value hedges, cash flow hedges, or hedges of net investments in foreign operations. Hedges of foreign exchange risk on firm commitments are accounted as cash flow hedges. A. Fair value hedges: Changes in fair value of the designated portion of derivatives that qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. The fair value adjustment to the carrying amount of the hedged item arising from the hedged risk is amortised to profit or loss from that date. B. Cash flow hedges: In case of transaction related hedges, the effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in other comprehensive income and accumulated in equity as 'hedging reserve'. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss. Amounts previously recognised in other comprehensive income and accumulated in equity relating to effective portion are reclassified to profit or loss in the period when the hedged item affects profit or loss, in the same head as the hedged item. The effective portion of the hedge is determined at the lower of the cumulative gain or loss on the hedging instrument from inception of the hedge and the cumulative change in the fair value of the hedged item from the inception of the hedge and the remaining gain or loss on the hedging instrument is treated as ineffective portion. In case of time period related hedges, the forward element and the spot element of a forward contract is separated and only the change in the value of the spot element of the forward contract is designated as the hedging instrument. Similarly, wherever applicable, the foreign currency basis spread is separated from the financial instrument and is excluded from the designation of that financial instrument as the hedging instrument in case of time period related hedges. The changes in the fair value of the forward element of the forward contract or the foreign currency basis spread of the financial instrument is accumulated in a separate component of equity as 'cost of hedging'. The changes in the fair value of such forward element or foreign currency basis spread are reclassified to profit or loss as a reclassification adjustment on a straight line basis over the period of the forward contract or the financial instrument. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. Any gain or loss recognised in other comprehensive income and accumulated in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognised immediately in profit or loss. 366 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [1] (contd.) (iv) Compound financial instruments issued by the Group which can be converted into fixed number of equity shares at the option of the holders irrespective of changes in the fair value of the instrument are accounted by separately recognising the liability and the equity components. The liability component is initially recognised at the fair value of a comparable liability that does not have an equity conversion option. The equity component is initially recognised at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. The directly attributable transaction costs are allocated to the liability and the equity components in proportion to their initial carrying amounts. Subsequent to initial recognition, the liability component of the compound financial instrument is measured at amortised cost using the effective interest method. The equity component of a compound financial instrument is not remeasured subsequently. (r) Inventories Inventories are valued after providing for obsolescence, as under: (i) Raw materials, components, construction materials, stores, spares and loose tools at lower of weighted average cost or net realisable value. However, these items are considered to be realisable at cost if the finished products in which they will be used, are expected to be sold at or above cost. (ii) Manufacturing work-in-progress at lower of weighted average cost including related overheads or net realisable value. In some cases, manufacturing work-in-progress are valued at lower of specifically identifiable cost or net realisable value. In the case of qualifying assets, cost also includes applicable borrowing costs vide policy relating to borrowing costs. (iii) Finished goods and stock-in-trade (in respect of goods acquired for trading) at lower of weighted average cost or net realisable value. Cost includes related overheads and excise duty paid/payable on such goods. (iv) Completed property/work-in-progress (including land) in respect of property development activity at lower of specifically identifiable cost or net realisable value. Assessment of net realisable value is made in each subsequent period and when the circumstances that previously caused inventories to be written-down below cost no longer exist or when there is clear evidence of an increase in net realisable value because of changed economic circumstances, the write-down, if any, in the past period is reversed to that extent of the original amount written-down so that the resultant carrying amount is the lower of the cost and the revised net realisable value. Cash and bank balances also include fixed deposits, margin money deposits, earmarked balances with banks and other bank balances which have restrictions on repatriation. Short term and liquid investments being subject to more than insignificant risk of change in value, are not included as part of cash and cash equivalents. Defined benefit plans: The employees' gratuity fund schemes and employee provident fund schemes managed by board of trustees established by the company, the post-retirement medical care plan and the Parent Company pension plan represent defined benefit plans. The present value of the obligation under defined benefit plans is determined based on actuarial valuation using the Projected Unit Credit Method. B. A. Defined contribution plans: The Group's superannuation scheme, state governed provident fund scheme, employee state insurance scheme and employee pension scheme are defined contribution plans. The contribution paid/payable under the schemes is recognised during the period in which the employee renders the related service. NOTE [1] (contd.) F. G. H. I. J. K. L. In respect of information technology (IT) business and technology services business, revenue from contracts awarded on time and material basis is recognised when services are rendered and related costs are incurred. Revenue from fixed price contracts is recognised using the proportionate completion method. Revenue from contracts for rendering of engineering design services and other services which are directly related to the construction of an asset is recognised on similar basis as stated in (i) B above. Income from hire purchase and lease transactions is accounted on accrual basis, pro-rata for the period, at the rates implicit in the transaction. Income from bill discounting, advisory and syndication services and other financing activities is accounted on accrual basis. Income from interest-bearing assets is recognised on accrual basis over the life of the asset based on the constant effective yield. Revenue on account of construction services rendered in connection with Build-Operate-Transfer (BOT) projects undertaken by the Group is recognised during the period of construction using percentage of completion method. After the completion of construction period, revenue relatable to toll collections of such projects from users of facilities are accounted when the amount is due and recovery is certain. License fees for way-side amenities are accounted on accrual basis. Commission income is recognised as and when the terms of the contract are fulfilled. Income from investment management fees is recognised in accordance with the contractual terms and the SEBI regulations based on average Assets Under Management (AUM) of mutual fund schemes over the period of the agreement in terms of which services are performed. Portfolio management fees are recognised in accordance with the related contracts entered with the clients over the period of the agreement. Trusteeship fees are accounted on accrual basis. Revenue from port operation services is recognised on completion of respective services or as per terms agreed with the port operator, wherever applicable. Revenue from charter hire is recognised based on the terms of the time charter agreement. M. Revenue from operation and maintenance services of power plant receivable under the Power Purchase Agreement is recognised on accrual basis. N. Other operational revenue: Other operational revenue represents income earned from the activities incidental to the business and is recognised when the right to receive the income is established as per the terms of the contract. (ii) Other income A. Interest income is accrued on a time basis by reference to the principal outstanding and the effective interest rate. B. Dividend income is accounted in the period in which the right to receive the same is established. C. Other Government grants, which are revenue in nature and are towards compensation for the qualifying costs, incurred by the Group, are recognised as income in the Statement of Profit and Loss in the period in which such costs are incurred. D. Other items of income are accounted as and when the right to receive arises and it is probable that the economic benefits will flow to the group and the amount of income can be measured reliably. (j) Exceptional items An item of income or expense which its size, type or incidence requires disclosure in order to improve an understanding of the performance of the Group is treated as an exceptional item and the same is disclosed in the notes to accounts. Notes forming part of the Consolidated Financial Statements (contd.) (k) Property, plant and equipment (PPE) 359 4. the costs incurred or to be incurred in respect of the transaction can be measured reliably LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [1] (contd.) C. D. E. Expected loss, if any, on a contract is recognised as expense in the period in which it is foreseen, irrespective of the stage of completion of the contract. For contracts where progress billing exceeds the aggregate of contract costs incurred to date plus recognised profits (or recognised losses as the case may be), the surplus is shown as the amount due to customers. Amounts received before the related work is performed are included in the consolidated Balance Sheet, as a liability towards advance received. Amount billed for work performed but yet to be paid by the customer are disclosed in the consolidated Balance Sheet as trade receivables. The amount of retention money held by the customers is disclosed as part of other current assets and is reclassified as trade receivables when it becomes due for payment. Revenue from construction/project related activity and contracts executed in joint arrangements under work-sharing arrangement [being joint operations, in terms of Ind AS 111 "Joint Arrangements"], is recognised on the same basis as adopted in respect of contracts independently executed by the Group. Revenue from property development activity which are in substance similar to delivery of goods is recognised when all significant risks and rewards of ownership in the land and/or building are transferred to the customer and a reasonable expectation of collection of the sale consideration from the customer exists. Revenue from those property development activities in the nature of a construction contract is recognised based on the 'Percentage of completion method' (POC) when the outcome of the contract can be estimated reliably upon fulfillment of all the following conditions: 1. 2. 3. 4. all critical approvals necessary for commencement of the project have been obtained; contract costs for work performed (excluding cost of land/developmental rights and borrowing cost) constitute at least 25% of the estimated total contract costs representing a reasonable level of development; at least 25% of the saleable project area is secured by contracts or agreements with buyers; and at least 10% of the total revenue as per the agreements of sale or any other legally enforceable documents is realised at the reporting date in respect of each of the contracts and the parties to such contracts can be reasonably expected to comply with the contractual payment terms. The costs incurred on property development activities are carried as "Inventories" till such time the outcome of the project cannot be estimated reliably and all the aforesaid conditions are fulfilled. When the outcome of the project can be ascertained reliably and all the aforesaid conditions are fulfilled, revenue from property development activity is recognised at cost incurred plus proportionate margin, using percentage of completion method. Percentage of completion is determined based on the proportion of actual cost incurred to the total estimated cost of the project. For the purpose of computing percentage of construction, cost of land, developmental rights and borrowing costs are excluded. Expected loss, if any, on the project is recognised as an expense in the period in which it is foreseen, irrespective of the stage of completion of the contract. In the case of the developmental project business and the realty business, revenue includes profit on sale of stake in the subsidiary and/or joint venture companies as the divestments are inherent in the business model. Rendering of services Revenue from rendering services is recognised when the outcome of a transaction can be estimated reliably by reference to the stage of completion of the transaction. The outcome of a transaction can be estimated reliably when all the following conditions are satisfied: 1. the amount of revenue can be measured reliably; 2. it is probable that the economic benefits associated with the transaction will flow to the Group; 3. the stage of completion of the transaction at the end of the reporting period can be measured reliably; and the transaction. Unbilled revenue represents value of services performed in accordance with the contract terms but not billed. (iii) Most of the centrally incurred costs are allocated to segments mainly on the basis of their respective expected segment revenue estimated at the beginning of the reported period. PPE is recognised when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. PPE is stated at original cost net of tax/duty credits availed, if any, less accumulated depreciation and cumulative impairment, if any. PPE acquired on hire purchase basis are recognised at their cash values. Cost includes professional fees related to the acquisition of PPE and, for qualifying assets, borrowing costs capitalised in accordance with the Group's accounting policy. LARSEN & TOUBRO the Group has ability to use or sell the intangible asset; the manner in which the probable future economic benefits will be generated including the existence of a market for output of the intangible asset or intangible asset itself or if it is to be used internally, the usefulness of intangible assets; the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and F. the Group has ability to reliably measure the expenditure attributable to the intangible asset during its development. Development expenditure that does not meet the above criteria is expensed in the period in which it is incurred. Intangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as "intangible assets under development". Intangible assets are amortised on straight line basis over the estimated useful life. The method of amortisation and useful life are reviewed at the end of each accounting year with the effect of any changes in the estimate being accounted for on a prospective basis. The estimated useful life for major categories of the intangible assets are as follows: (i) specialised software: over a period of three to ten years; (ii) technical know-how: over a period of three to seven years; (iv) customer contracts and relationships: over a period of the contract which generally is over seven to ten years; (v) intangible assets with indefinite useful life that are acquired separately are carried at cost less accumulated impairment losses; (vi) fare collection rights obtained in consideration for rendering construction services represent the right to collect fare during the concession period in respect of Build-Operate-Transfer (BOT) projects undertaken by the Group. Fare collection rights are capitalised as intangible asset upon completion of the project at the cumulative construction costs including related margins. Till the completion of the project, the same is recognised as intangible assets under development. Fare collection rights are amortised using the straight line method over the period of concession; and (vii) exploration and evaluation expenditure incurred for potential mineral reserves is recognised and reported as part of "intangible assets under development" under "intangible assets" when such costs are expected to be either recouped in full through successful exploration and development of the area of interest or alternatively, by its sale; or when exploration and evaluation activities in the area of interest have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically available reserves and active and significant operations in relation to the area are continuing or are planned for the future. Exploration assets are re-assessed on a regular basis and these costs are carried forward provided that at least one of the conditions outlined above is met. All other exploration and evaluation expenditure is recognised as expense in the period in which it is incurred. Amortisation on impaired assets is provided by adjusting the amortisation charge in the remaining periods so as to allocate the asset's revised carrying amount over its remaining useful life. (n) Impairment of assets As at the end of each accounting year, the Group reviews the carrying amounts of its PPE, investment property and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If such indication exists, the 362 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [1] (contd.) PPE, investment property and intangible assets are tested for impairment so as to determine the impairment loss, if any. Goodwill and the intangible assets with indefinite life are tested for impairment each year. Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is determined: (i) in the case of an individual asset, at the higher of the net selling price and the value in use; and (ii) in the case of a cash generating unit (the smallest identifiable group of assets that generates independent cash flows), at the higher of the cash generating unit's net selling price and the value in use. (The amount of value in use is determined as the present value of estimated future cash flows from the continuing use of an asset and from its disposal at the end of its useful life. For this purpose, the discount rate (pre-tax) is determined based on the weighted average cost of capital of the company suitably adjusted for risks specified to the estimated cash flows of the asset). If recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, such deficit is recognised immediately in the Statement of Profit and Loss as impairment loss and the carrying amount of the asset (or cash generating unit) is reduced to its recoverable amount. For this purpose, the impairment loss recognised in respect of a cash generating unit is allocated first to reduce the carrying amount of any goodwill allocated to such cash generating unit and then to reduce the carrying amount of the other assets of the cash generating unit on a pro-rata basis. When an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit), except for allocated goodwill, is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss is recognised for the asset (or cash generating unit) in prior years. A reversal of an impairment loss (other than impairment loss allocated to goodwill) is recognised immediately in the Statement of Profit and Loss. (o) Employee benefits (i) Short term employee benefits: Employee benefits such as salaries, wages, short term compensated absences, expected cost of bonus, ex-gratia, and performance linked rewards falling due wholly within twelve months of rendering the service are classified as short term employee benefits and are expensed in the period in which the employee renders the related service. (ii) Post-employment benefits: E. 360 D. the Group has intention to complete the intangible asset and use or sell it; Notes forming part of the Consolidated Financial Statements (contd.) NOTE [1] (contd.) For transition to Ind AS, the group has elected to adopt as deemed cost, the carrying value of PPE measured as per I-GAAP less accumulated depreciation and cumulative impairment on the transition date of April 1, 2015. In respect of revalued assets, the value as determined by valuers as reduced by accumulated depreciation and cumulative impairment is taken as cost on transition date. Own manufactured PPE is capitalised at cost including an appropriate share of overheads. Administrative and other general overhead expenses that are specifically attributable to construction or acquisition of PPE or bringing the PPE to working condition are allocated and capitalised as a part of the cost of the PPE. PPE not ready for the intended use on the date of the Balance Sheet are disclosed as "capital work-in-progress". (Also refer to policy on leases, borrowing costs, impairment of assets and foreign currency transactions below). Depreciation is recognised using straight line method so as to write off the cost of the assets (other than freehold land and properties under construction) less their residual values over their useful lives specified in Schedule II to the Companies Act, 2013, or in case of assets where the useful life was determined by technical evaluation, over the useful life so determined. Depreciation method is reviewed at each financial year end to reflect expected pattern of consumption of the future economic benefits embodied in the asset. The estimated useful life and residual values are also reviewed at each financial year end with the effect of any change in the estimates of useful life/residual value is accounted on prospective basis. Where cost of a part of the asset ("asset component") is significant to total cost of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part is determined separately and such asset component is depreciated over its separate useful life. Depreciation for additions to/deductions from, owned assets is calculated pro rata to the period of use. Extra shift depreciation is provided on a location basis at rates specified in Schedule II to the Companies Act, 2013. Depreciation charge for impaired assets is adjusted in future periods in such a manner that the revised carrying amount of the asset is allocated over its remaining useful life. Assets acquired under finance leases are depreciated on a straight line basis over the lease term. Where there is reasonable certainty that the Group shall obtain ownership of the assets at the end of the lease term, such assets are depreciated based on the useful life prescribed under Schedule II to the Companies Act, 2013 or based on the useful life adopted by the Group for similar assets. Freehold land is not depreciated. (I) Investment property Properties (including those under construction) held to earn rentals and/or capital appreciation are classified as investment property and are measured and reported at cost, including transaction costs. For transition to Ind AS, the group has elected to adopt as deemed cost, the carrying value of investment property as per I-GAAP less accumulated depreciation and cumulative impairment on the transition date of April 1, 2015. In respect of revalued assets, the value as determined by valuers as reduced by accumulated depreciation and cumulative impairment is taken as cost on transition date. Depreciation is recognised using straight line method so as to write off the cost of the investment property less their residual values over their useful lives specified in Schedule II to the Companies Act, 2013, or in the case of assets where the useful life was determined by technical evaluation, over the useful life so determined. Depreciation method is reviewed at each financial year end to reflect the expected pattern of consumption of the future benefits embodied in the investment property. The estimated useful life and residual values are also reviewed at each financial year end and the effect of any change in the estimates of useful life/ residual value is accounted on prospective basis. Freehold land and properties under construction are not depreciated. An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss arising on de-recognition of property is recognised in the Statement of Profit and Loss in the same period. (m) Intangible assets Intangible assets are recognised when it is probable that the future economic benefits that are attributable to the asset will flow to the enterprise and the cost of the asset can be measured reliably. Intangible assets are stated at original cost net of tax/duty credits availed, if any, less accumulated amortisation and cumulative impairment. Administrative and other general overhead 361 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [1] (contd.) expenses that are specifically attributable to acquisition of intangible assets are allocated and capitalised as a part of the cost of the intangible assets. Research and development expenditure on new products: (i) Expenditure on research is expensed under respective heads of account in the period in which it is incurred. (ii) Development expenditure on new products is capitalised as intangible asset, if all of the following can be demonstrated: A. the technical feasibility of completing the intangible asset so that it will be available for use or sale; B. C. 368 (iii) development costs for new products: over a period of five years; 2.20 Other loans unsecured, doubtful: Advance recoverable in cash Other unsecured loans, considered good: 5.36 1.24 0.74 2.36 3.00 1.24 0.74 Doubtful other loans and advances 572.71 1297.63 572.71 779.72 32.79 1167.22 130.41 17.73 18.79 18.40 17.73 18.79 812.51 2.29 Less: Provision for doubtful advances 2.29 As at 31-3-2017 crore Term loans Considered doubtful: Particulars Debentures Finance lease Term loans Considered good: Secured loans: Financial assets: Loans towards financing activities - non-current NOTE [8] Notes forming part of the Consolidated Financial Statements (contd.) 377 806.43 0.61 5.29 5.29 1037.65 0.08 3.19 3.19 1473.82 0.12 18.40 As at 31-3-2016 0.01 Other secured loans, considered good: 32.92 2327.01 3180.74 111.86 218.15 196.37 505.27 1.69 13.77 17.06 25.89 941.54 1875.64 179.97 213.98 172.36 157.62 70.88 348.79 482.53 600.03 1229.82 1888.39 As at 31-3-2017 As at 31-3-2016 Amount receivable Inter-corporate deposits Joint Ventures: Advances Associates companies: Unsecured long term loans to related parties: Secured long term loans to related parties [KMPS] 0.45 0.45 0.45 0.45 0.45 0.45 crore 210.01 *crore *crore 205.03 156.93 Unsecured security deposits, considered good Unsecured security deposits, doubtful: Less: Provision for doubtful security deposits crore crore crore Particulars As at 1-4-2015 Loans against mortgage of house property Other inter-corporate deposits crore As at 1-4-2015 crore crore As at 1-4-2015 As at 31-3-2016 41431.60 11015.18 13.55 11028.73 13.55 47888.27 crore 12070.42 12080.78 10.36 223.56 crore As at 31-3-2017 12060.80 47133.86 12060.80 293.22 461.48 10.36 98.18 75.59 1.68 Leased out 36.26 Sub total - Buildings 3410.61 373.76 35.60 409.36 14.92 14.92 166.93 3596.10 5.10 172.03 3662.86 480.60 563.55 775.12 17.59 43.84 44.56 6.39 4.81 10.74 378.15 411.39 494.58 2.88 5.33 706.04 crore 9339.95 9229.02 1163.76 1264.32 2488.74 Less: Allowance for expected credit losses 31580.18 37082.17 37561.80 1163.76 1264.32 35073.06 2488.74 2697.50 68.31 27650.61 31672.86 32.46 4112.53 4044.53 44.36 30984.17 * crore crore crore 35817.85 30416.42 Unsecured loans: 1382.01 2096.48 2125.74 378 Other receivables Embedded derivative receivables Forward contract receivables (maturity more than 12 months) Fixed deposits with banks immediate use Cash and bank balances not available for Particulars Other financial assets - non-current NOTE [9] Less: Allowance for expected credit losses Term loans Considered doubtful: Debentures Finance lease Term loans Considered good: 9512.46 crore crore As at 1-4-2015 Up to of currency 31-3-2016 subsidiaries For the year fluctuation Deductions 157.69 (11.60) 132.29 8.19 (0.06) 2.18 27.72 (3.31) 48.91 164.81 (7.83) 7.86 164.78 New product design and development | 29.40 64.91 Customer contracts and relationship 2.18 20.93 46.22 Technical know-how 721.74 988.30 (16.50) 133.65 68.94 0.01 1069.50 (0.06) 137.57 0.29 (6.13) As at Class of assets Book value Amortisation Cost *crore 11353.23 9183.92 11785.82 9740.49 Add: Intangible assets under development Up to As at As at 31-3-2017 31-3-2017 31-3-2016 735.54 252.76 347.76 35.35 29.56 16.82 73.32 91.49 115.87 72.95 58.78 76.12 917.16 432.59 556.57 134.47 (18.48) 208.61 861.50 1349.75 98.02 (30.52) 135.83 0.01 1418.07 Total 15.01 (3.51) 61.45 131.73 Specialised softwares Pursuant to acquisition of Additions fluctuation Deductions 31-3-2017 Foreign 4.95 16.48 Goodwill on consolidation Previous year Class of assets crore NOTE [4] Goodwill Notes forming part of the Consolidated Financial Statements (contd.) 375 (f) Impairment during the year and upto 31-3-2017 is 403.71 crore out of which 270.22 crore pertained to assets disposed off. Cost Foreign As at currency Up to 1-4-2016 Additions* fluctuation Deductions 31-3-2017 31-3-2016 1495.06 2.83 (44.61) 6.52 1446.76 1585.08 1495.06 (e) The fair values of investment property have been determined with the help of internal architectural department and independent valuer on a case to case basis. Fair value of property that are evaluated by independent valuer is amounted to ₹ 4106.49 crore (*3569.51 crore as at March 31, 2016; 2428.42 crore as at April 1, 2015). Valuation is based on government rates, market research, marked trend and comparable values as considered appropriate. 5.57 105.44 74.82 2.57 2015-16 2016-17 crore Direct operating expenses arising from investment property that generated rental income 2. Rental income derived from investment property (d) Fair value of investment property: 5598.86 crore as at March 31, 2017 (6124.48 crore as at March 31, 2016;4397.36 crore as at April 1, 2015). Amortisation Foreign Impairment Book value Pursuant to acquisition Foreign currency of As at 1-4-2016 subsidiaries Pursuant to acquisition Class of assets Book value *crore Amortisation Cost Other Intangible assets and intangible assets under development NOTE [5] #Impairment upto 31-3-2017 48.10 crore, during the year Nil. * Refer Note 51(c) As at As at 31-3-2017 31-3-2016 48.10 # 1398.66 1446.96 48.10 1446.96 1536.98 111.45 Up to Up to currency year fluctuation Deductions 31-3-2017 31-3-2017 For the As at As at Foreign currency As at Up to 92.82 Capital work-in-progress (PPE) 3.13 285.09 3.63 137.01 Investment Property Buildings (owned) 2015-16 2016-17 Class of assets 414.92 crore (a) Notes: Addition to other intangible assets include internally developed: 34.99 crore (previous year: 102.50 crore) 9183.92 6473.66 9740.49 7042.13 Add: Intangible assets under development 861.50 556.57 568.47 3.94 10.06 200.40 Borrowing cost capitalised in accordance with Indian Accounting Standard (Ind AS) 23 "Borrowing Costs" is as follows: Intangible assets under development 784.79 507.46 As at 31-3-2016 As at 31-3-2017 Financial assets: Loans - non-current NOTE [7] Units of fund Security receipts Mutual funds Debentures or bonds Government or trust securities Preference shares Equity instruments Particulars Financial assets: Other Investments - non-current NOTE [6] Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 376 (b) The average capitalization rate for borrowing cost is 10.26%. (previous year: 9.42%) 1210.60 1018.25 Total 654.98 6.10 1418.07 20.93 179.79 0.10 3.94 42.18 Technical know-how 721.74 347.76 406.33 3.54 7.47 160.71 557.10 1069.50 5.65 97.96 13.76 963.43 Specialised softwares Up to As at As at 31-3-2016|31-3-2016 1-4-2015 1-4-2015 subsidiaries For the year fluctuation Deductions Additions fluctuation Deductions 31-3-2016 1-4-2015 subsidiaries currency Foreign Pursuant to acquisition of 46.22 3374.35 23.30 0.10 1223.45 Total 61.45 76.12 86.90 2.26 14.85 137.57 44.34 6.33 131.24 Customer contracts and relationship 48.91 115.87 56.36 0.40 0.23 18.84 30.24 164.78 0.45 0.74 77.89 86.60 New product design and development 29.40 16.82 18.88 6.00 ייי Owned 1059.32 1223.88 280.11 Owned Furniture and fixtures 148.15 152.94 0.01 9.80 116.95 0.45 0.81 0.57 147.70 152.13 0.01 0.01 758 (0.22) 63.53 63.44 265.11 9.81 (0.74) 0.01 52.88 222.77 9.75 116.38 0.05 40.52 (1.16) 15.05 304.43 47.31 Cost Foreign currency As at Up to For the Depreciation Foreign currency year fluctuation Deductions 31-3-2016 31-3-2016 Impairment Book value (1.16) 16.06 316.24 48.90 40.91 0.01 292.54 Sub-total - Furniture & 1.59 1.01 11.81 0.39 12.43 Leased out 215.85 240.42 0.24 11.26 88.34 (0.30) 52.59 Sub-total- Office equipment Class of assets 0.36 1.02 0.01 0.03 0.04 0.04 Taken on lease 0.60 1.53 301.95 281.12 82 0.04 1.27 0.58 1.87 0.24 2.11 Leased out 258.00 (0.15) 48.96 151.44 0.09 0.69 0.01 Sub-total-Computers 458.73 0.05 1.07 Leased out 63.17 (0.22) 63.18 264.09 9.76 (0.74) 0.01 52.88 221.70 Owned Office equipment 281.72 303.49 259.31 (0.15) 48.96 152.14 0.09 541.03 156.19 49.21 (1.34) 0.11 132.74 0.26 155.58 crore Notes forming part of the Consolidated Financial Statements (contd.) 12.98 85.04 211.05 218.32 47.29 58.91 103.41 71.35 (0.21) 12.98 132.33 269.96 321.73 Other assets Owned 51.83 (0.21) 19.52 Aircraft 43.53 49.23 6.67 6.67 183.84 Ships 37.57 0.32 37.25 4.92 4.84 92.76 65.63 (1.22) 56.82 402.29 74.17 394.70 Sub-total-Vehicles 0.30 3.49 8.32 16.94 54.79 (0.30) 11.56 91.83 0.24 224.17 257.36 fixtures Vehicles Owned 263.52 I Leased out 131.18 63.80 (1.22) 30.01 296.09 46.40 1.83 26.81 106.20 27.77 I 6.52 NOTE [2] (contd.) 0.09 169 Total 13657.38 0.13 979.44 (0.23) 46.97 1141.56 (40.47) 387.40 14209.08 86.74 1485.21 6.20 (0.14) 2.59 23.23 73.79 (0.14) 9.20 151.19 20.77 1.61 990.37 1071.51 9.94 0.09 (5.27) 218.98 2863.42 103.00 11242.66 12172.17 Add: Capital work-in-progress 2118.19 1790.53 372 13360.85 13962.70 LARSEN & TOUBRO 1602.37 1178.82 Sub-total - Other assets 3.12 44.00 19.76 69 6.82 9.67 18 42.41 86.09 27.58 33.09 Dredged channel and Breakwater structures 1006.11 4.97 1011.08 55.39 56.08 111.47 899.61 950.72 Leasehold Improvements 42.38 4.97 (0.23) 28 539.12 48.97 (1.34) changes during the period in inventories and operating receivables and payables transactions of a non-cash nature; ii. i. Statement of Cash Flows is prepared segregating the cash flows into operating, investing and financing activities. Cash flow from operating activities is reported using indirect method adjusting the net profit for the effects of: (ac) Statement of Cash Flows Non-current assets and disposal groups classified as held for sale are measured at lower of their carrying amount and fair value less costs to sell. Non-current assets and disposal groups are classified as held for sale if their carrying amount is intended to be recovered principally through a sale (rather than through continuing use) when the asset (or disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sale of such asset (or disposal group) and the sale is highly probable and is expected to qualify for recognition as a completed sale within one year from the date of classification. (ab) Non-current assets held for sale Other commitments related to sales/procurements made in the normal course of business are not disclosed to avoid excessive details. non-cash items such as depreciation, provisions, deferred taxes, unrealised foreign currency gains and losses, and undistributed profits of associates and joint ventures; and d) other non-cancellable commitments, if any, to the extent they are considered material and relevant in the opinion of management. b) uncalled liability on shares and other investments partly paid; a) estimated amount of contracts remaining to be executed on capital account and not provided for; Commitments are future liabilities for contractual expenditure, classified and disclosed as follows: (aa) Commitments Where the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under such contract, the present obligation under the contract is recognised and measured as a provision. Contingent assets are disclosed where an inflow of economic benefits is probable. Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date. a present obligation arising from past events, when no reliable estimate is possible. a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation; and (ii) funding related commitment to associate and joint venture companies; and 370 iii. all other items for which the cash effects are investing or financing cash flows. Cost Class of assets Property, plant and equipment and capital work-in-progress NOTE [2] Notes forming part of the Consolidated Financial Statements (contd.) 371 (viii) The estimates as at April 1, 2015 and at March 31, 2016 are consistent with those made for the same dates in accordance with the I-GAAP. (vii) The Group has not elected the option to reset the cumulative translation differences on foreign operations that exist to zero as of the transition date. (v) The Group has applied the impairment requirements of Ind AS 109 retrospectively; however, as permitted by Ind AS 101, it has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial instruments were initially recognised in order to compare it with the credit risk at the transition date. Further, as permitted by Ind AS 101, the Group has not undertaken an exhaustive search for information when determining, at the date of transition to Ind ASS, whether there have been significant increases in credit risk since initial recognition, (vi) The Group has elected not to apply Ind AS 103 Business Combinations retrospectively to past business combinations that occurred before the transition date. (iv) The Group has determined the classification of debt instruments in terms of whether they meet the amortised cost criteria or the FVTOCI criteria based on the facts and circumstances that existed as of the transition date. (iii) The Group has applied the derecognition requirements of financial assets and financial liabilities prospectively for transactions occurring on or after April 1, 2015. (ii) Ind AS 102 "Share-based Payment" has not been applied to equity instruments in share-based payment transactions that vested before April 1,2015. (i) The Group has adopted the carrying value determined in accordance with I-GAAP for all of its property plant and equipment and investment property as deemed cost of such assets at the transition date. The Group has prepared opening balance sheet as per Ind AS as of April 1, 2015 (transition date) by recognising all assets and liabilities whose recognition is required by Ind AS, derecognising items of assets or liabilities which are not permitted to be recognised by Ind AS, reclassifying items from I-GAAP to Ind AS as required, and applying Ind AS to measure the recognised assets and liabilities. The exemptions availed by the Group are as follows: (ae) First time adoption of Ind AS The preparation of financial statements in conformity with Ind AS requires that the management of the Group makes estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates include useful lives of property, plant and equipment & intangible assets, allowance for doubtful debts/advances, future obligations in respect of retirement benefit plans, expected cost of completion of contracts, provision for rectification costs, fair value measurement etc. Difference, if any, between the actual results and estimates is recognised in the period in which the results are known. (ad) Key sources of estimation NOTE [1] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO Cash and cash equivalents (including bank balances) shown in the Statement of Cash Flows exclude items which are not available for general use as on the date of Balance Sheet. (i) Pursuant to acquisition Provision is measured using the cash flows estimated to settle the present obligation and when the effect of time value of money is material, the carrying amount of the provision is the present value of those cash flows. Reimbursement expected in respect of expenditure required to settle a provision is recognised only when it is virtually certain that the reimbursement will be received. Contingent liability is disclosed in case of: (i) an entity has a present obligation (legal or constructive) as a result of a past event; and As at 1-4-2015 Additions fluctuation Deductions 31-3-2016 31-3-2015 Land Freehold 613.41 Taken on lease 610.47 4.01 11.79 Sub total - Land 1223.88 As at As at 31-3-2016 1-4-2015 15.80 601.79 613.41 12.79 1.45 11.34 457.53 610.47 1070.66 12.79 1.45 11.34 0.49 16.12 601.79 0.66 154.05 468.87 1.15 170.17 Up to Up to LARSEN & TOUBRO Provisions are recognised only when: (z) Provisions, contingent liabilities and contingent assets NOTE [1] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) 369 Transaction or event which is recognised outside profit or loss, either in other comprehensive income or in equity, is recorded along with the tax as applicable. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets relating to unabsorbed depreciation/business losses/losses under the head "capital gains" are recognised and carried forward to the extent of available taxable temporary differences or where there is convincing other evidence that sufficient future taxable income will be available against which such deferred tax assets can be realised. Deferred tax assets in respect of unutilised tax credits which mainly relate to minimum alternate tax are recognised to the extent it is probable of such unutilised tax credits will get realised. Deferred tax assets are generally recognised for all taxable temporary differences to the extent that is probable that taxable profits will be available against which those deductible temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax liabilities are generally recognised for all taxable temporary differences including the temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Dividend distribution tax payable on profits of subsidiary companies which are proposed to be distributed in foreseeable future, is recognised as deferred tax liability with corresponding effect in the Statement of Profit and Loss in the period in which such profits are proposed to be so distributed. Such liability is reversed in the period in which the profits are distributed by the subsidiary company. Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the Group's financial statements and the corresponding tax bases used in computation of taxable profit and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date. Dividend distribution tax paid on profits distributed by the subsidiary company during the period is treated as an item of expense and recognised in the Statement of Profit and Loss. The dividend distribution tax paid in earlier years for which set off is available against the tax liability arising out of the dividend distribution by the Parent Company is recognised as an item of income in the period in which such set off is availed with corresponding effect in the equity to the extent of such set off. Both the recognition of expense and income as aforesaid are separately disclosed in the Statement of Profit and Loss as provision/reversal of additional tax on dividend distributed by subsidiaries. Tax on income for the current period is determined on the basis of taxable income (or on the basis of book profits wherever minimum alternate tax is applicable) and tax credits computed in accordance with the provisions of the Income Tax Act 1961, and based on the expected outcome of assessments/appeals. (y) Taxes on income (viii) Segment revenue resulting from transactions with other business segments is accounted on the basis of transfer price which are either determined to yield a desired margin or agreed on a negotiated basis (vii) Segment non-cash expenses forming part of segment expenses includes the fair value of the employee stock options which is accounted as employee compensation cost [see Note 1(v) above] and is allocated to the segment. Unallocable corporate assets and liabilities represent the assets and liabilities that relate to the Group as a whole. (vi) Segment assets and liabilities include those directly identifiable with the respective segments. In respect of (a) Financial Services segment, and (b) Power Generation projects under Developmental Projects segment which are classified as assets given on finance lease, segment liabilities include borrowings as the interest expenses on borrowings are accounted as segment expenses in respect of the segment and projects. Investment in joint ventures and associates identified with a particular segment are reported as part of the segment assets of those respective segments. (iv) Income which relates to the Group as a whole and not allocable to segments is included in "unallocable corporate income". (v) Segment result includes margins on inter-segment capital jobs, which are reduced in arriving at the profit before tax of the Group. NOTE [1] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) (ii) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and (iii) a reliable estimate can be made of the amount of the obligation of Foreign currency Depreciation (3.22) 979.46 112.64 6660.79 851.55 (22.00) 484.39 6311.04 Owned Plant & equipment 3349.47 3480.47 80.78 18.38 352.71 87.25 189.66 182.41 39.66 3789.43 (11.79) 178.06 3662.82 Sub-total-Buildings 59.87 63.52 3289.60 3416.95 (0.98) 1747.01 15.50 4898.28 5462.26 0.11 132.74 456.58 Owned Computers equipment 33.87 55.10 4932.15 5517.36 15.50 1755.29 91.41 987.90 (3.22) 8.28 10.63 8.44 10.47 23.10 42.15 135.74 6702.94 862.02 (22.00) 484.39 6376.29 Sub-total-Plant & 65.25 Leased out 17.37 344.60 87.25 1.01 8.11 3.82 5.30 15.74 67.98 1070.71 Sub-total - Land 2.74 468.86 Taken on lease 12.15 (1.46) 3.41 609.13 601.85 Freehold Land As at As at 31-3-2017 31-3-2016 Up to Up to currency year fluctuation Deductions 31-3-2017 31-3-2017 As at 1-4-2016 subsidiaries Additions fluctuation Deductions 31-3-2017 31-3-2016 subsidiaries Book value Impairment crore For the of As at Up to Foreign Pursuant to acquisition 14.89 Buildings (0.53) 29.72 441.35 (1.99) 33.13 1050.48 11.34 13.70 70.02 Leased out (0.98) 185.84 177.11 23.92 3721.45 (11.79) 164.36 3592.80 Owned Buildings 1046.67 1067.31 437.54 465.52 1. 601.79 609.13 ☐☐ 16.69 3.81 3.81 155 9.21 (0.05) 9.21 (0.05) 16.69 11.34 Particulars 6.68 (c) Amount recognised in the Statement of Profit and Loss for investment property: | || 232.75 228.23 10.84 12.72 243.59 240.95 Vehicles Owned 194.09 85.89 1.68 18.48 263.18 50.65 4.25 46.40 216.78 194.09 Leased out 137.21 24.89 30.92 131.18 27.77 27.77 48.90 103.41 137.21 4.18 0.23 Owned 228.25 62.35 0.83 11.37 280.06 0.02 51.24 Leased out 12.72 4.01 4.30 12.43 1.82 Sub total - Furniture & fixtures 240.97 66.36 0.83 15.67 292.49 0.02 53.06 | | | 3.95 47.31 1.59 Sub total - Vehicles 331.30 110.78 1.68 55.39 950.72 2059.65 Leasehold Improvements Sub total - Other assets Total 1.18 42.37 2191.60 43.21 13670.26 1924.84 49.81 1.18 42.37 1055.56 1179.25 1987.53 13657.38| 20.94 1.18 19.76 22.61 1.18 111.97 0.48 1581.39 (0.01) 25.23 86.74 1092.51 2191.60 96.65 1485.21 - 12172.17 13669.78 Add: Capital work-in-progress 1790.53 1452.66 Notes: 13962.70 15122.44 (a) Carrying value of property, plant and equipment pledged as collateral for liabilities and/or commitments as at March 31, 2017 *1855.94 crore (* 1867.29 crore as at March 31, 2016; ₹ 3354.87 crore as at April 1, 2015) (b) Carrying value of property, plant and equipment having restriction on title as at March 31, 2017 2240.12 crore (2086.27 crore as at March 31, 2016; 3715.71 crore as at April 1, 2015) 24.05 79.44 1054.38 1006.11 0.84 49.40 394.36 78.42 4.25 74.17 320.19 331.30 Other assets Owned Aircraft 92.76 Furniture and fixtures 92.76 6.67 86.09 92.76 Ships 38.01 38.01 4.92 4.92 33.09 38.01 Dredged channel and Breakwater structures 2059.65 6.67 (c) Cost of: 156.73 160.51 3.48 Sub total - Plant & equipment 5813.68 1031.62 29.50 495.22 6379.58 898.81 36.79 862.02 I Computers Owned 297.46 172.16 0.60 14.36 455.86 0.44 164.80 9.66 155.58 Leased out 0.19 1.92 2.11 10.79 0.58 0.21 9.13 65.89 177.16 3418.94 3374.35 66.76 10.18 4.93 5.25 194.02 11.61 182.41 I Plant & equipment Owned 5743.54 1026.74 Sr. no. 29.50 486.09 6313.69 887.81 36.58 851.23 Leased out 70.14 4.88 11.00 Taken on lease 0.04 0.04 219.10 0.02 66.46 (0.01) 3.29 63.18 155.92 158.58 Leased out 1.93 0.86 1.07 0.45 0.19 0.26 0.81 1.93 Sub total - Office equipment 160.53 73.63 1.13 15.12 220.17 0.02 66.91 (0.01) 14.26 1.13 73.63 158.60 0.03 Sub total - Computers 297.69 174.08 0.60 14.36 458.01 0.44 165.41 9.66 $+ | 63.44 0.58 61.51 36.26 5462.46 5743.54 55.10 70.14 5517.56 5813.68 300.28 297.02 1.53 0.19 0.01 0.04 156.19 301.82 297.25 Office equipment Owned 0.03 (i) 3480.45 3410.61 2.30 crore (previous year: 1.17 crore) for which conveyance is yet to be completed. Notes forming part of the Consolidated Financial Statements (contd.) NOTE [3] Investment Property Cost Depreciation crore Book Value Transfer from Transfer Class of assets Foreign Foreign As at 1-4-2016 inventories As at Upto from inventories Additions currency Deductions and owner- 31-3-2017 31-3-2016 LARSEN & TOUBRO For the year 10 50 30 3 35 9 15 3 7 3 30 3 13 3 15 6 6 5 5 18 14 14 9 50 50 2 fluctuation currency fluctuation Deductions 15.55 58.41 58.41 73.41 Buildings 279.98 138.13 141.85 5.14 0.09 Total 353.39 0.55 153.68 200.26 5.14 0.09 Add: Capital work-in-progress 5.05 136.80 279.98 5.05 195.21 353.39 4190.79 2415.31 4386.00 2768.70 Notes: (a) Carrying value of Investment property pledged as collateral for liabilities and/or commitments and having restriction on title as at March 31, 2017 0.16 crore (0.16 crore as at March 31, 2016; 0.16 crore as at April 1, 2015) Freehold land includes: 0.55 42.72 200.26 Total and owner- Up to 31-3-2017 As at As at 31-3-2017 31-3-2016 occupied occupied property property Land 58.41 (0.19) 18.15 10 40.07 58.41 Buildings 141.85 42.72 4.40 56.64 132.33 5.05 6.40 0.42 3.00 40.07 61 (b) Useful life of building included in investment property: 20 to 60 years 999 currency fluctuation For the year Foreign Upto 31-3-2015 As at 31-3-2016 and owner- Deductions currency fluctuation Additions inventories As at 1-4-2015 Foreign Class of assets from Transfer Book Value Depreciation Cost crore 3266.19 4190.79 3429.72 4386.00 8.87 123.46 136.80 8.87 163.53 195.21 Add: Capital work-in-progress 88 Transfer from inventories and owner- Deductions Up to 31-3-2016 As at 31-3-2016 5 373 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [2] (contd.) (ii) Leasehold land includes: • • • 258.85 crore (previous year: 258.85 crore) taken on lease from M/s Tamilnadu Industrial Development Corporation Limited (TIDCO) on various dates for development of port and shipyard. 0.35 crore (previous year: 0.35 crore) representing 4.728 hectares of forest land in district Rudryaprayag, State of Uttarakhand taken on lease for 30 years w.e.f. 10-9-2017. 3.00 0.63 crore (previous year: 0.63 crore) representing 34.341 hectares of forest land in district Rudryaprayag, State of Uttarakhand taken on lease for 30 years w.e.f. 24-9-2009. 71.45 crore (previous year: executed. 73.92 crore) added during the year in respect of which lease agreements are yet to be (d) Cost of buildings includes ownership accommodation: (i) (ii) 73.41 Land occupied property property occupied As at 1-4-2015 • 0.42 • 5.05 Leased out buildings 4. 18 Owned plant and equipment 5. 7. Leased out plant and equipment Computers 8. Furniture and fixtures 15 6.40 Maximum useful life (in years) Minimum useful life (in years) Class of assets 16. Leasehold improvements 15. Breakwater structures 14. Dredged channel 13. Ships 12. Aircraft 11. Railway sidings 10. Leased out vehicles Owned vehicles Office equipment 3. Owned buildings 9. 6. Impairment during the year and upto 31-3-2017 is 111.86 crore out of which ₹ 8.86 crore transferred to held for sale. 8.48 crore) representing undivided share in a property at a certain location. 25.42 crore (previous year: 27.58 crore) on account of obsolescence. ~ m 6 N 3.86 crore) in respect of which the deed of conveyance is yet to be executed. (f) (e) Depreciation for the year includes of 3.53 crore (previous year: (iii) of 8.48 crore (previous year: in various co-operative societies and apartments and shop-owners' associations: ₹ 7.94 crore (previous year: ₹ 14.60 crore), for which share certificate are yet to be issued. in proposed co-operative societies ₹27.80 crore (previous year: 0.53 crore). • (0.19) in various co-operative societies, shop-owners' associations and non-trading corporation: 88.09 crore (previous year: *86.92 crore), including 2550 (previous year: 2570) shares of 50 each, 232 (previous year: 232) shares of 100 each and 1 (previous year: 1) share of 250. 74.79 (g) Owned assets given on operating lease have been presented separately under respective class of assets as "Leased out" pursuant to "Indian Accounting Standard (Ind AS) 17 "Leases". 2. (h) Cost as at April 1, 2016 and April 1, 2015 of individual assets has been reclassified, wherever necessary. (i) 172.40 Amount transferred from property, plant & equipment to group(s) of assets classified as held for sale: 70.21 crore (previous year: 1573.63 crore) (j) Range of useful life of property, plant and equipment is as below: 374 4.40 1. Leasehold land Sr. no. 325.00 325.00 325.00 1,62,50,00,000 Equity shares of 2 each 1,62,50,00,000 Issued, subscribed and fully paid up: Number of shares Equity shares of 2 each 760.31 310.52 49.73 136.47 Others 40453.65 34972.91 NOTE [20] Equity share capital 1,62,50,00,000 (a) Share capital authorised, issued, subscribed and paid up: As at 31-3-2017 Number of crore shares As at 31-3-2016 Number of shares As at 1-4-2015 crore crore Authorised: Particulars 40366.11 186.30 186.59 93,29,65,803 186.59 93,14,78,845 186.30 (c) Terms/rights attached to equity shares: The Company has only one class of share capital, i.e., equity shares having face value of 2 per share. Each holder of equity share is entitled to one vote per share. 383 Name of the shareholder Shareholding Notes forming part of the Consolidated Financial Statements (contd.) (d) Shareholder holding more than 5% of equity shares as at the end of the year: As at 31-3-2017 Number of shares % 45.57 As at 31-3-2016 Number of shares Issued, subscribed and fully paid up equity shares outstanding at the end of the year 0.39 19,16,784 0.29 93,14,78,845 186.30 92,95,62,061 185.91 (b) Reconciliation of the number of equity shares and share capital: 2016-17 2015-16 Particulars 93,29,65,803 Number of shares Number of shares crore Issued, subscribed and fully paid up equity share outstanding at the beginning of the year 93,14,78,845 92,95,62,061 185.91 Add: Shares issued on exercise of employee stock options during the year 14,86,958 * crore 45.57 LARSEN & TOUBRO 4249.90 197.75 204.56 Less: Allowance for doubtful loan and advances 197.75 204.56 25.99 177.01 179.01 205.00 Billed interest and other receivable 382 2703.58 24.93 2298.67 55.15 205.00 170.78 27.55 26.97 crore 7.87 129.37 7.78 102.50 21.02 74.35 137.24 2348.04 1.06 197.23 110.28 2018.62 0.43 144.41 95.37 1916.58 0.43 61.44 Doubtful advances: Deferred credit sale of ships Other loan and advances 2128.97 Shareholding Notes forming part of the Consolidated Financial Statements (contd.) NOTE [19] 7461.44 Unamortised expenses 10.13 2.94 Accrual of fee income 0.16 1.71 2.13 Balance with customs, port trust etc. 199.55 175.81 216.80 Advance recoverable other than in cash 4484.40 5216.09 9546.85 Government grant receivable 11023.56 129.94 Other current assets As at 31-3-2017 As at 31-3-2016 As at 1-4-2015 Particulars * crore crore crore Due from customers (construction and project related activity) [Note 44(a)] 23751.38 24975.43 22723.51 Due from customers (property development activity) [Note 44(d)] 91.05 178.73 Unbilled revenue (including retention money) % # Shareholding 32,250 32,250 59,550 59,550 47,178 5 Options lapsed during the year 6 25,200 25,200 Options granted during the year 384 27-08-2016 Total Expiry date 27-07-2023 26-08-2023 Exercise price 47,178 5,26,919 5,85,284 2,57,366 3,04,656 48,44,579 66,54,724 41,662 40,611 35,747 11,270 4,54,865 4,42,400 89,100 1,50,400 3,84,450 3,44,865 at the beginning of the year Options granted and outstanding 4 2003(B) 2016-17 2015-16 2016-17 2015-16 2016-17 2015-16 2016-17 2015-16 2016-17 2015-16 2.30 2.30 2.30 2.30 11.70 11.70 11.70 11.70 1-6-2000 19-4-2002 23-5-2003 onwards 23-5-2003 onwards 1-6-2001 19-4-2003 23-5-2004 onwards 23-5-2004 onwards (ii) Sr. 2006 2006(A) Series reference no. 1 Grant price-() 2 Grant dates 3 Vesting commences on 2.30 2.30 19-4-2002 19-4-2003 2016-17 2015-16 2016-17 2015-16 400.70 400.70 400.70 400.70 1-9-2006 onwards 1-7-2007 onwards 1-9-2007 onwards 1-7-2008 onwards Share options 2003 (A) (₹) 2.00 vi Weighted average expected price volatility of company's share Weighted average expected dividend yield over life of option vii Weighted average risk-free interest viii Method used to determine expected volatility 2016-17 * 2.00 V 28-07-2016 and 27-08-2016 27-07-2023 and 26-08-2023 18.5% * The first vesting is due on 27-07-2017. 6.95% The expected price volatility is based on the historic volatility (based on the remaining life of the options), adjusted for any expected changes to future volatility due to publicly available information. # As the Company was not listed on the date of grant, price at grant date has been taken as per the valuation done by a category 1 merchant banker. * crore * 281.00 25.17% Weighted average share price at grant date # iv Expiry date 20,00,000 2.00 19,80,000 39,80,000 Options granted on July 28, 2016 includes 15,00,000 and 5,00,000 options allotted to non-executive directors and key managerial personnel respectively. Options granted on August 28, 2016 includes 50,000 options allotted to key managerial personnel. Weighted average remaining contractual life of options outstanding at the end of period is 2.32 years (B) Fair value of options granted: The fair value at grant date of options granted during the year ended 31-03-2017 was 281.00 (31-03-2016 - Nil). The fair value of grant date is determined using the Black-Scholes Model which takes into account the exercise price, term of option, share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option. The model inputs for options granted during the year ended 31-03-2017 included: Sr. No. Particulars i Weighted average exercise price* ii Grant date !!! 31-03-2017 2002 (B) 2002 (A) 2000 6,11,02,860 6.55 7,59,26,462 8.15 7,59,25,962 8.17 (e) Shares reserved for issue under options outstanding as at the end of the year on un-issued share capital: the Unit Trust of India Particulars 0.675% 5 years & 1 day US$ denominated foreign currency convertible bonds (FCCB) As at 31-3-2017 Number of crore equity shares (at face value) to be issued as fully paid Employee stock options granted and outstanding # Specified Undertaking of Administrator of the 12.01 % Life Insurance Corporation of India 14,64,24,938 15.69 14,64,19,088 15.72 15,55,22,285 16.73 L&T Employees Welfare Foundation 11,47,52,281 12.30 11,47,52,281 12.32 11,16,06,174 42,47,360 As at 31-3-2016 Number of crore equity shares (at face value) (at face value) 1.54 * 63,46,986 1.27 ** 1215.13 crore) on the exercise of options (f) The aggregate number of equity shares allotted as fully paid up by way of bonus shares in immediately preceding five March 31, 2017 are 30,82,94,576 (previous period of five years ended March 31, 2016: 30,82,94,576 shares) (g) years ended The aggregate number of equity shares issued pursuant to contract, without payment being received in cash in immediately preceding last five years ended on March 31, 2017 - Nil (previous period of five years ended March 31, 2016: Nil) (h) Stock option schemes of Parent Company (i) Terms: • The grant of options to the employees under the stock option schemes is on the basis of their performance and other eligibility criteria. The options are vested equally over a period of 4 years [5 years in the case of series 2006(A)], subject to the discretion of the management and fulfillment of certain conditions. Options can be exercised anytime within a period of 7 years from the date of grant and would be settled by way of issue of equity shares. Management has discretion to modify the exercise period. The details of the grants under the aforesaid schemes under various series are summarized below: crore As at 1-4-2015 Number of shares 77,08,842 As at 1-4-2015 Number of equity shares to be issued as fully paid 0.85 * 57,93,042 1.16* 63,46,986 146.71 crore (previous year: 1215.13 crore (previous year: 63,46,986 1.27 ** * The equity shares will be issued at a premium of ** The equity shares will be issued at a premium of by the bond holders Note 20(h) for terms of employee stock option schemes 1.27 ** 203.97 crore) to be issued as fully paid crore 2.99 crore Particulars (A) Weighted average risk-free interest rate (B) Weighted average expected life of options (C) Weighted average expected volatility (D) Weighted average expected dividends over the life of the option (E) Weighted average share price (F) Weighted average exercise price no. (G) Method used to determine expected volatility 2015-16 6.72% 7.66% 4.08 years 30.79% 74.52 per option 1355.66 per option 327.51 per share 3.86 years 30.52% 2016-17 Sr. (vii) The fair value has been calculated using the Black-Scholes Option Pricing Model and the significant assumptions and inputs to estimate the fair value of options granted during the year are as follows: (vi) Weighted average fair values of options granted during the year is 1056.73 (previous year: 965.39) per option (D) Options lapsed during the year 5,32,274 370.25 4,94,281 368.74 (E) Options granted and outstanding at the end of the year 42,47,360 347.41 57,93,042 354.10 (F) Options exercisable at the end of the year out of (E) supra 21,51,241 359.04 28,52,010 364.76 (iv) Weighted average share price at the date of exercise for stock options exercised during the year is 1386.19 (previous year: 1543.13) per share. (v) In respect of stock options granted pursuant to the Company's stock options schemes, the fair value of the options is treated as discount and accounted as employee compensation over the vesting period. 62.69 per option 1211.45 per option * 282.57 per share Expected volatility is based on the historical volatility of the Company's share price applicable to the total expected life of each option. As at 31-3-2017 Advance recoverable other than in cash Unsecured Secured Capital advances: Particulars Other non-current assets NOTE [10] Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 28-07-2016 Grant date Shares options outstanding at the end of the year have the following expiry date and exercise prices. 39,80,000 1,65,000 41,45,000 2.00 As at 31-3-2016 366.57 crore crore (viii) The balance in share options (net) account as on March 31, 2017 is 177.25 crore (previous year: 242.23 crore), including 117.36 crore (previous year: 155.87 crore) for which the options have been vested to employees as on March 31, 2017. (i) During the year ended March 31, 2017, the Company paid the final dividend of 18.25 per equity share for the year ended March 31, 2016. 385 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [20] (contd.) The Board of Directors has recommended for approval of shareholders, the issue of bonus equity shares in the ratio of 1:2 (one bonus equity share of 2 each for every 2 equity shares of ₹2 each held). On May 29, 2017, the Board of Directors has recommended the final dividend of 21.00 per equity share on the pre-bonus share capital for the year ended March 31, 2017 subject to approval from shareholders. On approval, the total dividend payment based on number of shares outstanding as on March 31, 2017 is expected to be 1959.23 crore and the payment of dividend distribution tax is expected to be * 398.85 crore. (j) Capital Management The Group continues its policy of a conservative capital structure which has ensured that it retains the highest credit rating even amidst an adverse economic environment. Low gearing levels also equip the Group with the ability to navigate business stresses on one hand and raise growth capital on the other. This policy also provides flexibility of fund raising options for future, which is especially important in times of global economic volatility. The gross debt equity ratio is 1.75:1 (as at 31-3-2016: 1.87:1 and as at 1-4-2015: 1.78:1). (k) Stock ownership scheme of subsidiary companies: Larsen & Toubro Infotech Limited Employee Stock Ownership Scheme ('ESOS Plan') (A) The grant of options to the employees under ESOS Plan is on the basis of their performance and other eligibility criteria. Sr. no. U.S. Stock Option Sub-plan 2006 ESOP As at 1-4-2015 * crore crore crore option () 19,16,784 As at 1-4-2015 12,000 1,47,226 1,68,154 45,035 36,020 12,82,697 17,12,610 8 Options granted and outstanding at the end of the year 13,200 25,200 the year 32,250 32,250 59,550 59,550 47,178 4,27,131 5,26,919 1,76,584 2,57,366 34,91,467 48,44,579 Of which Options vested 13,200 25,200 32,250 32,250 59,550 59,550 47,178 Options yet to vest 47,178 Options exercised during 7 2015-16 2016-17 2015-16 2016-17 2015-16 2016-17 2015-16 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [20] (contd.) 2000 2002 (A) 2002 (B) 2003 (A) 2003(B) 2006 2006(A) Sr. Series reference no. 2016-17 2015-16 2016-17 2015-16 2016-17 2015-16 2016-17 47,178 75,692 96,458 1,76,584 2,57,366 17,46,787 23,34,008 3,51,439 4,30,461 17,44,680 25,10,571 9 Weighted average remaining contractual life of options (in years) No. of stock options Weighted average exercise price (₹) exercise price (₹) (A) Options granted and outstanding at the beginning of the year 57,93,042 354.10 77,08,842 362.74 (B) Options granted during the year 4,73,550 327.51 4,95,265 282.57 (C) Options allotted during the year 14,86,958 Weighted average 358.97 options No. of stock Nil Nil Nil Nil Nil Nil Nil Nil 4.98 5.18 Nil Nil 3.48 3.61 (iii) The number and weighted average exercise price of stock options are as follows: 2016-17 2015-16 Particulars crore price per share 31-03-2017 47,000 1,43,650 82,660 2,23,760 3,40,666 36,720 out of (ix) Options vested at the end of the year X 1,43,650|35,96,300 xi 47,000 36,720 end of the year Options granted and outstanding at the ix 61,700 11,830 18,51,855 7,25,445 64,07,483 17,650 3,06,850 34,110 34,000 1,73,936 10,64,326 79,000 viii Options lapsed/cancelled during the year 82,660 14,50,725 23,50,106 Options unvested at the end of the year out of (ix) - 12,26,965 20,09,440 25,76,416 Options granted and outstanding at the beginning i options Particulars No. of stock no. 2015-16 2016-17 Sr. The number and weighted average exercise price of stock options are as follows: 6.2 2.7 1.7 life of options (in years) xii Weighted average remaining contractual 35,96,300 Options allotted during the year vii 36,58,000 _ 15 March 2007 onwards 1 October 2001 onwards 1 April 2001 onwards USD 2.4 USD 2.4 2 2016-17 2015-16 2016-17 72 2015-16 5 2016-17 5 Grant Dates ¡¡ Grant Price i ESOP Series ESOP scheme 2000 IV - XXI I,II & III 2015-16 Weighted average exercise price 11.14 scheme 2015 2016-17 10 June Options granted during the year vi 1,43,650 4,50,500 82,660 19,65,015| 23,50,106 93,67,335 4,54,580 3,500 Options reinstated during the year V Options granted and outstanding at the beginning of the year iv 2017 onwards 10 June 2016 onwards 15 March 2008 onwards 1 October 2002 onwards 1 April 2002 onwards Vesting commences on iii 1 Average exercise Number of options No. of stock Weighted options average exercise price 8.70 115.56 19.23% 3 years 7.10% 2016-17 Method used to determine expected volatility vii * 407.74 1 Weighted average exercise price Weighted average share price V iv Weighted average expected dividends over the life of option Weighted average expected volatility !!! ii Weighted average expected life of options Weighted average risk-free interest rate vi The expected volatility has been calculated entirely based on historic volatility IT Index, as historical data of the Company is not available being an unlisted company. (ii) L&T Technology Services Limited (A) Employee stock option plan (ESOP) No options expired during the periods covered in the above table Particulars Vested and exercisable Forfeited during the year Closing balance Lapsed during the year Exercised during the year Granted during the year Opening balance 388 other period as may be decided by the Board. In case of voluntary or pre-mature retirement, the eligible employee will exercise only the vested options within 180 days from the last date of employment. All other unvested options will lapse. However, the Board will have the discretion to vest the unvested options in deserving cases and where the employee has crossed the age of 55 years. The retiring age for non-executive directors shall be 75 years or as may be decided by Board and on attainment of which, all the unvested options of the non-executive directors shall be vested with them immediately. In event of death of the eligible employee, unvested options shall be vested immediately in the nominees or legal heirs, as the case may be, and in the event of death of any of the nominees, his share shall vest in the surviving nominees or legal heirs, pro-rata NOTE [20] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) 387 Further, on resignation / termination of the eligible employees, only the vested options would be exercisable. All other grants if unvested for any reason whatsoever shall be deemed lapsed. Such eligible employee is required to exercise the options within a period of 90 days from the last date of employment or such other period as may be decided by the Board at the time of such separation. In the event an eligible employee retires or is permanently incapacitated, all unvested options will vest in the said employee immediately. The eligible employee has to exercise options within a period of three years from the date of retirement or the date of permanent incapacitation, as the case may be, or such The vesting of options granted under the ESOP Scheme, 2016 will commence one year after the date of grant of options at the rate of 20.0% of options granted each year, or at such other rates as may be fixed by the Board and may extend up to five years from the date of grant of options, unless otherwise varied in accordance with the employee stock option rules to be framed under the ESOP Scheme, 2016. The exercise period for the options granted under the ESOP Scheme, 2016 would be seven years from the date of grant of options or six years from the date of first vesting or three years from the date of retirement/death, whichever is earlier, subject to any change as may be approved by the Board. The exercise price may be decided by the Board, in such manner, during such period, in one or more tranches and on such terms and conditions as it may deem fit, provided that the exercise price per option shall not be less than the par value of the equity share of our Company and shall not be more than the market price as defined in the SEBI ESOP Regulations and shall be subject to compliance with accounting policies under the ESOP Regulations. The number of shares to be allotted on exercise of options should not exceed the total number of unexercised vested options that may be exercised by the employee. The objective of the ESOP Scheme, 2016 is to reward those employees who contribute significantly to the Company's profitability and shareholder's value as well as encourage improvement in performance and retention of talent. The establishment of the ESOP scheme, 2016 was done pursuant to the resolutions passed by the Board and the Shareholders on January 21, 2016 for issue of options to eligible employees which may result in issue of not more than 60,00,000 equity shares. In terms of the ESOP Scheme, 2016, the Company can grant options aggregating to not more than 8.0% of the paid up equity share capital of the Company as on April 1, 2016. The eligible employees include permanent employees (including executive directors and non-executive directors, but excluding the independent directors) of the Company, its subsidiaries, or holding company. However, unless otherwise decided by the Board, in the event the subsidiaries or the holding company have implemented a stock option scheme, the employees of such entities will not be eligible for grant of options under the ESOP Scheme, 2016. Further, the employees (i) holding 10.0% of the outstanding share capital of the Company at any time after the commencement of the ESOP Scheme, 2016, or (ii) who are promoters or persons belonging to promoter group, or directors, who either by themselves or through their relatives or any body corporate, directly or indirectly, hold more than 10.0% of the outstanding equity shares of the Company, will not be eligible for grant of options under the ESOP Scheme, 2016 i Particulars Sr. no. (F) The fair value has been calculated using the Black-Scholes Option Pricing model and significant assumptions and inputs to estimate the fair value options granted during the year are as follows: Options lapsed/cancelled during the year V 8.46 29,16,181 5.64 7,54,925 iv Options allotted during the year 1.00 35,96,300 Options granted during the year iii 2.02 4,58,080 - Options reinstated during the year ii of the year 3,48,746 1,14,76,000 vi 51,30,745 (D) Weighted average share price at the date of exercise for stock options exercised during the year is 621 per share. (E) Weighted average fair value of options granted during the year is ₹ 407.39. (C) The aggregate number of equity shares issued pursuant to contract, without payment being received in cash in immediately preceding five years ended 31-3-2017 – Nil (previous period of five years ended 31-3-2016 - Nil) (B) The aggregate number of equity shares allotted as fully paid up by way of bonus shares in immediately preceding five years ended 31-3-2017 are Nil (previous period of five years ended 31-3-2016 - Nil) NOTE [20] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 43.51 5,66,976 25.84 3,07,480 vii Options vested at the end of the year out of (vi) the year 11.14 25,76,416 2.09 64,41,483 36.92 2.73 Options granted and outstanding at the end of ESOP scheme 2000 386 Financial assets - Cash and cash equivalents As at 31-3-2017 NOTE [16] Cash and bank balances not available for immediate use including margin money deposits Earmarked balances with banks-others Earmarked balances with banks - unclaimed dividend Fixed deposits with banks Particulars Financial assets - current: Other bank balances NOTE [15] Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 380 4412.57 3806.54 3793.33 As at 31-3-2016 689.13 crore 1557.59 crore 1328.46 As at 31-3-2017 Financial assets: Loans - current 696.85 1583.37 1779.16 216.90 198.12 174.65 10.59 17.40 33.59 39.39 435.77 crore As at 1-4-2015 46.92 285.30 251.49 Fixed deposits with banks (maturity less than 3 months) 26024.98 27969.60 22245.97 26020.14 27951.76 1311.52 1961.09 2465.29 Less: Allowance for doubtful debts 23557.49 27981.23 30417.05 1311.52 1961.09 2465.29 22254.43 NOTE [14] 0.14 As at 31-3-2017 113.10 35.09 64.48 Cash on hand 271.16 crore 3339.18 As at 1-4-2015 As at 31-3-2016 543.40 Cheques and drafts on hand crore 2942.75 2905.51 Balance with banks crore Particulars As at 31-3-2016 571.85 As at 1-4-2015 Particulars crore Considered good: Particulars Secured loans: 176.80 Financial assets - current: Loans towards financing activities NOTE [17] Notes forming part of the Consolidated Financial Statements (contd.) 381 542.64 651.14 480.84 0.55 0.32 0.32 70.89 Term loans Finance lease Debentures Considered doubtful: 13736.23 25.85 18212.95 crore As at 1-4-2015 crore * crore As at 31-3-2016 crore 76.47 crore As at 31-3-2017 Finance lease Debentures Term loans Considered good: Unsecured loans: Less: Allowance for expected credit losses Term loans crore 22245.97 0.31 75.62 5.70 3.44 3.74 Less: Provision for doubtful security deposits 5.70 3.44 3.74 crore 428.01 469.31 462.01 Unsecured security deposits, considered good Unsecured security deposits, doubtful crore crore crore crore Unsecured long term loans to related parties: Associates companies: Advances Joint Ventures: 0.89 0.85 Others Other unsecured loans, considered good: 0.31 Loans against mortgage of house property Other inter-corporate deposits Other secured loans, considered good: 70.00 39.51 18.20 39.51 105.04 18.20 3.68 3.68 Inter-corporate deposits 105.04 46.30 26020.14 Considered doubtful crore As at 1-4-2015 As at 31-3-2016 As at 31-3-2017 Raw materials [includes goods-in-transit 38.52 crore Particulars Inventories (at cost or net realisable value whichever is lower) NOTE [11] 2395.00 2737.19 3238.16 2098.91 2489.12 296.09 248.07 crore 172.89 3065.27 crore 45.88 crore, as at 1-4-2015: 164.03 55.70 crore (as at 31-3-2016: 113.43 crore, as at 1-4-2015: 75.60 crore)] Construction materials [includes goods-in-transit 588.15 527.53 518.24 * 24.00 crore)] 14.68 crore, as at 1-4-2015: (as at 31-3-2016: 23.72 crore 998.81 842.45 576.51 Components [includes goods-in-transit * 42.58 crore)] (as at 31-3-2016: 30.89 265.20 217.54 30.53 3482.99 14322.02 NOTE [18] Other current financial assets Particulars Inter-corporate deposits - unsecured Advances to related parties: Associate companies Joint venture companies Advances recoverable in cash Premium receivable on financial guarantee contracts Embedded derivative receivables As at 31-3-2017 * crore crore 20.01 As at 31-3-2016 3222.72 220.27 40.00 10839.03 5.95 10844.98 26.47 146.42 86.74 19291.06 14046.07 0.14 86.74 19290.92 261.58 13959.33 303.81 6.98 4424.99 303.79 18.23 5636.46 24927.38 4747.01 18706.34 10678.00 65.00 96.03 5.95 5325.67 265.93 Manufacturing work-in-progress 828.36 4347.17 4847.73 10227.85 1370.71 1506.31 2592.27 1511.23 1078.36 780.10 51.15 crore 43.30 199.17 As at 1-4-2015 As at 31-3-2016 crore 50.36 18.49 23.19 13799.39 Considered good Unsecured: 8.46 * crore As at 1-4-2015 crore crore 4.84 As at 31-3-2016 crore crore crore 17.84 crore Particulars As at 31-3-2017 Financial assets - current: Trade receivables NOTE [13] 7353.81 7494.19 Secured, considered good 27951.76 As at 31-3-2017 Preference shares Loose tools [includes goods-in-transit * 0.09 crore (as at 31-3-2016: 0.04 crore, as at 1-4-2015: *0.05 crore)] 305.60 363.70 248.34 Stores and spares [includes goods-in-transit 5.09 crore (as at 31-3-2016: 3.05 crore, as at 1-4-2015: * 7.56 crore)] 178.02 179.99 188.59 Stock-in-trade (in respect of goods acquired for trading) [includes goods-in-transit * 18.77 crore (as at 31-3-2016: 34.82 crore, as at 1-4-2015: * 36.02 crore)] 403.10 284.99 340.82 Finished goods 1098.15 886.41 15.09 18.35 14.20 Property development projects (including land) Mutual funds Debentures and bonds Government and trust securities Equity shares Particulars Financial Assets: Investments - current NOTE [12] Other investments Notes forming part of the Consolidated Financial Statements (contd.) Note: During the year ₹746.21 crore (previous year: 41.80 crore) was recognised as expense towards write-down of inventory. 5981.16 4854.21 4139.74 2129.20 1489.21 1259.76 379 1052.12 3. Do any other entity/entities (e.g. suppliers, distributors etc.) that the Company does business with, participate in the BR initiatives of the Company? If yes, then indicate the percentage of such entity/entities. 20 5. List of activities in which expenditure in 4 above has been incurred: - Section C Other Details AR 20 1. Section D: BR Information Does the Company have any Subsidiary Company/ Companies? [Less than 30%, 30-60%, More than 60%] Do the Subsidiary Company/Companies participate in the BR Initiatives of the parent company? If yes, then indicate the number of such subsidiary company(s) AR 20 AR 20 22 AR 3. Governance Related to BR 1. AR • e-mail ID • • Telephone number Designation • Name • DIN Number (if applicable) Details of the BR head Designation • • Name ⚫ DIN Number Details of the Director/Director the BR policy/policies a) 21 Details of Director/Directors responsible for BR 2. Regarding unfair trade practices, irresponsible advertising and or anti-competitive behavior, no stakeholder has filed a case against the Company in the last five years and there are no pending cases as on 31st March, 2017. 4. Summer camps, sports activities & Extra Science-on-Wheels van • . • Innovative learning methodologies, computer laboratories, teaching aids and build teacher capacity. Enhancing learning experience & learning rates Developing infrastructure • curricular outings to widen children's horizons. Providing primary education Education Enabling the community to build and utilize sanitation facilities. water conservation structures. Building check dams, field bunds, and soil and Programme Nadu, Maharashtra and Rajasthan. Integrated Community Development • • • . . SMG HOSPITAL Collaboration with ITIS. Skill Development Mobile health vans. • Artificial kidney dialysis centres Focus on reproductive health, diagnostic and clinical camps, maternal and child health care, immunization and health education, HIV/AIDS management Affordable community health centres • Employee volunteering . EAST MARIS SES GLOBAL H IN ASSOCIATION T MUMSAL LAND MARKE SUREN ROAD, OPEC HEALTH CENTRE, LARSEN AND TOUBRO MOBILE MEDICAL CAMP Health • Working in water-stressed communities of Tamil . Efforts to provide access to safe drinking water Water & Sanitation Confederation of Indian Industry (CII), Centre of Excellence for Sustainable Development (CESD) Construction Industry Development Council (CIDC) . . • . . . Bureau of Indian Standards CII Green Business Centre (GBC) Bombay Chamber of Commerce & Industry (BCCI) • • . Association of Business Communicators of India L&T actively participates in industrial forums and professional bodies to engage in proactive dialogue and have an understanding of policies and expectations of stakeholders. The senior leadership team offers their expertise and insights during public policy formulation. Following are some of the Institutes and industrial forums where L&T actively participates. PRINCIPLE 7: RESPONSIBLE PUBLIC ADVOCACY LARSEN & TOUBRO campuses and engage with organisations to conduct plantation at National Parks within the Country. This year we have planted more than 1.85 lakh trees across L&T's campuses and project sites, taking the tally to 5 lakh trees in last five years. Also, the Company has embarked on a journey towards creating self-sustaining forests through the Miyakwaki Technique and has planted its first forest. Indicate the frequency with which the Board of Directors, Committee of the Board or CEO to assess the BR performance of the Company. Within 3 months, 3-6 months, Annually, More than 1 year Associated Chambers of Commerce and Industry of India (ASSOCHAM) - Federation of Indian Chambers of Commerce and Industry (FICCI) Indian Electrical and Electronics Manufacturers Association 30 29 It is an integral part of L&T's business model to plough back a portion of the wealth generated into the society. The Company's CSR Programs are derived from the theme 'Building India's Social Infrastructure' with an objective to contribute to society and make a meaningful, sustainable and positive impact. We work in 4 thrust areas: water & sanitation, education, health and skill-building. Code of Conduct Corporate Social Responsibility (CSR) Policy Corporate Human Resource Policy Corporate Environment, Health & Safety (EHS) Policy Sustainability Policy • • . . L&T has the following corporate policies that support inclusive growth and equitable development: PRINCIPLE 8: SUPPORT INCLUSIVE GROWTH The Company also interacts regularly with Indian Institute of Corporate Affairs (IICA) for CSR related aspects, Confederation of Indian Industry Centre of Excellence for Sustainable Development (CII-CESD) on Sustainability policies and regulations. We are also part of the working teams on Environmental & recycling council of CII, CII – Green Business Centre (GBC), Environment, Health & Safety (EHS), energy conservation and Corporate Social Responsibility (CSR). Tree-planting is an ongoing activity at L&T - from VIP visitors to community and mass plantation initiatives. . National Fire Protection Institution National Safety Council . Indian Institute of Chemical Engineers (IIChE) . Total spending on Corporate Social Responsibility (CSR) as percentage of profit after tax (%) Free training to rural and urban youth Construction Skills Training Institutes (CSTIs) 20 AR List three key products/services that the Company manufactures/provides 8. Sector(s) that the Company is engaged in (industrial activity code-wise) 7. 19 AR (as in balance sheet) Financial Year Reported 19 AR Email id 5. Website 4. 19 AR 6. 19 9. i. Number of International Locations (Provide details of major 5 Total profit after taxes (INR) 3. 22 20 AR 20 AR Total Turnover (INR) Total number of locations where business activity is undertaken by the Company 2. Section B: Financial Details of the Company 222 20 AR Markets served by the Company - Local/State/National/International AR ii. Number of National Locations AR 1. Paid up Capital (INR) AR 19 AR The Company's Act 2013. 2016-17 towards social development as per 100.77 crores in The Company contributed education and skill-building initiatives. L&T helps build India's Social Infrastructure through health, TEL: M ROAD, OFF ANDHERI STAT LARSEN & TOUBRO Total 14,67,840 Education: 3,32,013 Health: 9,93,878 Water & Sanitation: 1,07,253 Thrust area-wise CSR beneficiaries are as follows, Tailoring, beautician's courses, home nursing and food processing Vocational institutes programs for women: • • Skill Development (Including CSTI, vocational training and Neev): 34,696 PRINCIPLE 9: ENGAGE WITH AND PROVIDE VALUE TO CUSTOMERS At L&T, we constantly innovate to offer the latest engineering, technological and service solutions, to provide value to our customers. Our offerings diversify with the changing market trends and we keep abreast with the way world moves through investment in R&D, training, design facilities, superior manufacturing and testing processes. Health & Safety concerns are integral throughout product/services life cycle. Our products carry suitable labeling and are accompanied by operation and maintenance manuals in line with relevant codes and specifications. Similar clarity is maintained across all our projects through signage systems. Products are tested and benchmarked against stringent national and international standards such as Bureau of Indian Standards, International Organization for Standardization and International Electro Technical Commission. L&T's green products and services portfolio helps customer to reduce their energy and water consumption and help then to follow low carbon approach. Registered Address Corporate Identity Number (CIN) of the Company Section A: General Information about the Company 3. Name of the Company 2. 1. Page Number Section Reference Question ANNEXURE: MAPPING TO THE SEBI FRAMEWORK 31 From engineering design to high-tech testing facilities, L&T offers end-to-end solutions that create value for our customers. Seni P SEQUENCE & PHASE CONTRE All norms, standards and voluntary codes and guidelines related to marketing communication are adhered to. The brand management guidelines institutionalized by L&T's Corporate Brand Management & Communications (CBMC) department authenticate communications and help customers identify and distinguish the Company's products. We engage with customers through regular customer meets, customer satisfaction surveys, training programs for customer representatives and market based research. Customer complaints, comments and suggestions are systematically addressed. The high percentage of our repeat orders is a reliable indication of customer satisfaction and confidence in L&T's products, projects and services. • 32 35 22 5.67 7.00 8.33 9.67 21.00 18.25 16.25 14.25 12.33 11.00 Dividend per equity share (*) ## ^ 439.93 406.65 366.59 319.64 273.97 232.04 158.84 122.87 474.30 538.25 Book value per equity share (*) ## ^ 52.97 56.53 51.21 49.04 61.27 43.17 26.96 45.48 51.33 64.80 Basic earnings per equity share (*) # ^ 1.61:1 1.31:1 1.08:1 1.32:1 1.12:1 Figures for 2016-17 & 2015-16 are as per Ind AS and for earlier periods as per IGAAP and hence not directly comparable ^^ @ Profit before depreciation, interest and tax [PBDIT] is excluding extraordinary/exceptional items wherever applicable and other income. PBDIT as % of net revenue from operations = [PBDIT/gross revenue from operations less excise duty]. 136035 150000- L&T CONSOLIDATED - ORDER INFLOW crore f crore 38 37 1.85:1 The Board of Directors has recommended for the approval of shareholders, the issue of bonus equity shares in the ratio of 1:2 (one bonus equity share of * 2 each for every two equity shares of *2 each held). Accordingly, the figures for 2016-17 are based on number of equity shares before the proposed bonus issue. ## After considering issue of bonus shares/restructuring during the respective years upto 2015-16. Basic earnings per equity share has been calculated including extraordinary/exceptional items and adjusted for all the years for issue of bonus shares/ restructing during the respective years. RONW [(profit attributable to group shareholders including extraordinary/exceptional items)/(average net worth excluding revaluation reserve and miscellaneous expenditure)]. # ** PAT as % of net revenue from operations = [PAT including extraordinary/exceptional items/gross revenue from operations less excise duty]. $ Λ 2.13:1 2.21:1 1.87:1 13.33 12.60 10.35 12.24 10.13 PBDIT as % of net revenue from operations @ Ratios and statistics 33578 23996 13.81 44887 99369 146632 134472 136294 121558 Capital employed 18400 12120 47150 32798 22656 93976 88135 90571 80330 62672 Loan funds 78372 59186 130000- 14.75 12.40 12.58 1.75:1 Gross Debt: Equity ratio 13.71 16.47 17.26 19.38 31.23 30.64 26.92 9.91 12.13 12.80 RONW % ** 7.89 14.61 9.35 7.30 6.99 5.76 5.18 4.19 5.53 PAT as % of net revenue from operations $ 8.56 12.40 110000- 90000- 7.6 -14.0 11075 -16.0 261341 10463 11000- 12000 5% 310000- PAT including exceptional items (attributable to owners of the Company) Gross revenue from operations L&T CONSOLIDATED - ORDER BOOK India GDP growth Order Inflow 2016-17 2015-16 L&T CONSOLIDATED - PBDIT AS % OF NET REVENUE FROM OPERATIONS 30000 10000- 249017 110000- 4000 -6.0 5000- AR -8.0 6000- 260000- 10.1 7000 -10.0 8000- * crore 210000- 12.0 9000 10.3 122 50000- 2016-17 6041 101975 -8.0 -6000 105000- -8.5 -6500 -7.5 110000- 142995 -7000 115000 -9.0 FROM OPERATIONS AND PAT L&T CONSOLIDATED - GROSS REVENUE 70000- 110011 -6.0 Percentage -5500 2015-16 3500 80000- -6.5 -4000 4233 85000- 100000- 7.1 90000- -7.0 Hv crore -5000 95000- crore -4500 131 153 311 9.67 11.00 12.33 14.25 16.25 18.25 21.00 8.33 141.54 108.63 274.35 317.09 362.95 398.78 452.35 493.19 Book value per equity share (*) ##^ Dividend per equity share (*) ##^ 238.96 202.46 25.20 7.00 No. of equity shareholders ## # * $ @ ΑΛ Figures for 2016-17 & 2015-16 are as per Ind AS and for earlier periods as per IGAAP and hence not directly comparable 5.67 37,357 31,941 926,719 8,53,485 8,14,678 48,754 45,117 38,785 50,592 10,28,541 8,53,824 832,831 854,151 44,081 54,579 43,354 41,466 No. of employees 923628 9,31,362 5,78,177 > 39.67 43.55 28.49 19.73 18.95 16.06 17.46 14.30 12.39 31.71 12.37 8.69 10.26 11.82 9.01 8.38 8.50 9.71 RONW % * 49.18 29.21 0.23:1 48.61 53.33 59.36 54.46 53.71 58.49 Basic earnings per equity share (*) #^ Gross Debt: Equity ratio 0.38:1 0.37:1 0.33:1 0.39:1 0.29:1 0.34:1 0.35:1 0.33:1 0.53:1 3000 Profit before depreciation, interest and tax (PBDIT) is excluding extraordinary/exceptional items wherever applicable and other income. Profit After Tax (PAT) as % of net revenue from operations = [(PAT including extraordinay /exceptional items )/(gross revenue from opertions less excise duty)]. 25051 33860 29387 44180 40909 37712 50217 Net worth Balance Sheet 2325 20991 3789 4456 4694 5206 4902 4765 4233 6041 5451 Profit attributable to Group shareholders (including extraordinary/exceptional items) 13988 Non-controlling interest 82 184 (185) 337 (736) (1125) Deferred tax liability/(asset) [net] 923 10831 1059 1026 1753 2653 3179 4999 2893 3564 1087 PBDIT as % of net revenue from operations = [(PBDIT)/(gross revenue from operations less excise duty)]. 2304 3796 110011 Gross revenue from operations Statement of Profit and Loss 2011-12 2010-11 2009-10 2008-09 2007-08 2015-16 2014-15 2013-14 2012-13 IGAAP ← Ind AS → 2016-17 101975 92762 85889 Particulars CONSOLIDATED FINANCIALS-10 YEAR HIGHLIGHTS LARSEN & TOUBRO 36 $$ Figures for the year 2007-08 to 2011-12 include Hydrocarbon business which has been transferred w.e.f April 1, 2013 to a wholly owned subsidiary. The Board of Directors has recommended for the approval of shareholders, the issue of bonus equity shares in the ratio of 1:2 (one bonus equity share of *2 each for every two equity shares of *2 each held). Accordingly, the figures for 2016-17 are based on number of equity shares before the proposed bonus issue. After considering adjustments for issue of bonus shares/restructuring during the respective years upto 2015-16. Basic earnings per equity share have been calculated including extraordinary/exceptional items and adjusted for all the years for issue of bonus shares/ restructuring during the respective years. RONW [(PAT including extraordinary/exceptional items)/(average net worth excluding revaluation reserve and miscellaneous expenditure)]. crore 3007 75195 PBDIT^^ 4238 4649 4911 4547 4470 4154 5920 64960 52470 44310 40932 29819 Profit attributable to Group shareholders (excluding extraordinary/exceptional items) 5024 6423 7677 8884 9929 10463 11258 10730 11075 3706 -4.0 160000- 2016-17 34 Question Principle 7: Policy Advocacy Is your company a member of any trade and chamber or association? If Yes, Name only those major ones that your business deals with: LARSEN & TOUBRO Reference Section Page Number AR 29 Have you advocated/lobbied through above associations for the advancement or improvement of public good? Principle 8: Inclusive Growth Does the company have specified programmes/initiatives/projects in AR 29 Number of show cause/legal notices received from CPCB/SPCB which are pending (i.e. not resolved to satisfaction) as on end of Financial Year. 28-29 AR AP AP 28-29 Does the company have strategies/ initiatives to address global environmental issues such as climate change, global warming, etc? Does the company identify and assess potential environmental risks? Does the company have any project related to Clean Development Mechanism? Has the company undertaken any other initiatives on - clean technology, energy efficiency, renewable energy, etc.? Y/N. ☑ pursuit of the policy related to Principle 8? AR AR 28-29 No AP AR 28-29 Are the Emissions/Waste generated by the company within the permissible limits given by CPCB/SPCB for the financial year being reported? 28-29 Are the programmes/projects undertaken through in-house team/own foundation/ external NGO/government structures/any other organisation? AR 30 Statement of Profit and Loss crore Ind AS IGAAP 2016-17 2015-16 2014-15 2013-14 2012-13 2011-12 2010-11 2009-10 2008-09 2007-08 $$ STANDALONE FINANCIALS-10 YEAR HIGHLIGHTS Gross revenue from operations 66301 2015-16 57558 57164 52196 53738 44296 PBDIT^^ AR Description AR Have you done any impact assessment of your initiative? What is your company's direct contribution to community development projects - Amount in INR and the details of the projects undertaken. AR 30 AR 30 Have you taken steps to ensure that this community development initiative is successfully adopted by the community? 31 AR Principle 9: Customer Welfare What percentage of customer complaints/consumer cases are pending as on the end of financial year. Does the company display product information on the product label, over and above what is mandated as per local laws? Is there any case filed by any stakeholder against the company regarding unfair trade practices, irresponsible advertising and/or anti-competitive behavior during the last five years and pending as of end of financial year? The details related to stakeholder complaints are included in the Director's Report Section of this Annual Report. AR 31 30 Does the policy related to Principle 6 cover only the company or extends to the Group/ Joint Ventures/Suppliers/Contractors/NGOs/others? 27-28 AR | (including transportation)? Has the company taken any steps to procure goods and services from local & small producers, including communities surrounding their place of work? If yes, what steps have been taken to improve their capacity and capability of local and small vendors? Does the company have a mechanism to recycle products and waste? If yes what is the percentage of recycling of products and waste (separately as <5%, 5-10%, >10%). Also, provide details thereof, in about 50 words or so. AR 24-25 AR Does the company have procedures in place for sustainable sourcing 24-25 AR 24-25 AR 24-25 AR 24-25 Green buildings P 24-25 For each such product, provide the following details in respect of resource use (energy, water, raw material etc.) per unit of product (optional): Principle 2: Sustainable Products and Services LARSEN & TOUBRO Question Does the Company publish a BR or a Sustainability Report? What is the Hyperlink for viewing this report? How frequently it is published? Section E : Principle-wise Performance Principle1: Ethics, Transparency and Accountability Does the policy relating to ethics, bribery and corruption cover only the company? Does it extend to the Group/Joint Ventures/ Suppliers/Contractors/NGOs /Others? How many stakeholder complaints have been received in the past financial year and what percentage was satisfactorily resolved by the management? List up to 3 of your products or services whose design has incorporated social or environmental concerns, risks and/or opportunities. Reference Page Number AR 22 AR The details related to stakeholder complaints are included in the Director's Report Section of this Annual Report 23-24 Section 37356 constructed by the utilize recycled material AR 25-26 Principle 4: Valuing Marginalized Stakeholders Has the company mapped its internal and external stakeholders? Out of the above, has the company identified the disadvantaged, vulnerable & marginalized stakeholders? AR 26-27 What percentage of your undermentioned employees were given safety and skill upgradation training in the last year? AR 26-27 Are there any special initiatives taken by the company to engage with the disadvantaged, vulnerable and marginalized stakeholders? Principle 5: Human Rights Does the policy of the company on human rights cover only the company or extend to the Group/Joint Ventures/Suppliers/Contractors/NGOs/Others? AR 27-28 How many stakeholder complaints have been received in the past financial year and what percent was satisfactorily resolved by the management? Principle 6: Environment AP Building & Factories business part of Construction Business help customers to reduce energy and water consumption, 25-26 Please indicate the Number of complaints relating to child labour, forced labour, involuntary labour, sexual harassment in the last financial year and pending, as on the end of the financial year. and locally source most of construction material. The Company is a leading EPC solution provider for Solar Photo Voltaic (PV) based power plants helping customers save on the energy bills and contribute to reduction of GHG emissions from consumption of indirect energy. 33 Question Principle 3: Employee Well Being Total number of employees. AR Total number of employees hired on temporary/contractual/casual basis. Number of permanent women employees. Section Page Number AR 25-26 Number of permanent employees with disabilities Do you have an employee association that is recognized by management? What percentage of your permanent employees is members of this recognized employee association? Reference 34337 63813 6425 Services IT & Technology Heavy Engineering Electrical & Automation Hydrocarbon ☐ ☐ ☐ ☐ Infrastructure Power 48% Financial Services 52923 Total revenue: 110011 crore Total order inflow: 142995 crore 2% 6% 3% -6939 3149 crore 4969- 4% ☐ Developmental Projects Percentage PBDIT as % of net revenue from operations @ 9.78 9.23 11.38 25342 10.60 11.82 ☐ Others 12.84 11.56 11.87 PAT as % of net revenue from operations $ 8.30 7.91 8.87 13.00 Ratios and statistics 9602- 9% ☐ Others 18525 7% 9731- 78492 55% 8545- 6% 4028 3% 7128 5% 13% crore L&T CONSOLIDATED - SEGMENT-WISE REVENUE 2016-17 Net revenue from operations and PBDIT exclude exceptional items PBDIT as % of net revenue from operations As at 31-3-2017 PBDIT As at 31-3-2016 60000- L&T CONSOLIDATED - SEGMENT-WISE ORDER INFLOW 2016-17 9731- 9% 10125- 9% 4028- Projects ☐ Developmental Financial Services ☐ IT & Technology Services ☐ Hydrocarbon Automation 5% 2866 Infrastructure Power 7861 5818 8% Electrical & 8545 Heavy Engineering ☐ ☐ 4% 4% 13200 11.78 25190 2099 Profit after tax (including extraordinary/exceptional items) 5454 5000 5056 5493 4384 4457 3958 19064 3482 2173 Balance Sheet Net worth 2709 3185 3676 4413 5829 6488 6667 5473 6283 5640 4816 46013 3922 Profit after tax (excluding extraordinary/exceptional items) 4560 4454 4699 4905 4169 2969 42135 4376 33662 12936 11459 8478 9896 37085 6801 6556 13924 3584 56309 55903 50384 45531 38059 35252 29270 Capital employed 10581 7161 Loan funds 29291 21846 18312 12460 9555 Deferred tax liability/(asset) [net] (285) (156) 25223 410 290 133 263 77 48 61 363 2016-17 Scheme 2013 Scheme 2010 Grant Price () 1 Series reference (iii) L&T Finance Holdings Limited (B) The details of the grants are summarised below: (A) The subsidiary has formulated Employee Stock Option Schemes 2010 (ESOP Scheme-2010), 2010-A (ESOP Scheme 2010- A) and 2013 (ESOP Scheme 2013). The grant of options to the employee under the Stock Options scheme is on the basis of their performance and other eligibility criteria. The options are vested over a period of 4 years in ratio of 15%, 20%, 30% and 35% respectively from the date of grant, subject to the discretion of the management and fulfilment of certain conditions. Options can be exercised within a period of 7 years from the date of grant for schemes 2010 and 2010A. The options granted under scheme 2013 can be exercised within period of 8 years from the date of grant and would be settled by way of equity. Management has discretion to modify the exercise period. NOTE [20] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 2015-16 Sr. no. 2016-17 Advances from customers 44.20 Property maintenance recoveries 2015-16 Premium earned (net) on related forward exchange contracts 254.56 Profit on sale of subsidiaries/associate of realty business 95.81 Technical fees Miscellaneous income 27.34 200.67 14.23 34.14 192.88 236.53 0.22 1234.46 383.63 1675.36 1089.64 110011.00 101975.34 395 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [35] Other income 2016-17 2015-16 70.89 Particulars 19.64 Income from hire of plant and equipment 8208.30 Property development activity [Note 44(d)] 2272.71 1444.81 Servicing fees 825.71 888.52 Commission 163.89 157.65 Income from port services 88.54 Charter hire income 1.66 3.67 Investment/portfolio management and trusteeship fees 451.69 340.43 Fees for operation and maintenance of power plant 2216.31 1960.36 Premium earned (net) from insurance business Other operational income: 174.73 297.83 108335.64 100885.70 Lease rentals 9064.39 crore crore 34.22 65.73 17.88 60.55 7.73 9.75 169.93 145.35 1401.01 904.35 NOTE [36] Manufacturing, construction and operating expenses 2016-17 2015-16 Particulars crore crore crore crore Materials consumed: Raw materials and components Less: Scrap sales 14425.96 104.98 13816.10 86.12 Excise duty Construction materials consumed Miscellaneous income (net of expenses) crore Net gain/(loss) on sale of property, plant and equipment Lease rentals 196.12 crore Interest income: Interest income on long term investments 22.19 44.97 Interest income on current investments Interest income on others: 205.77 199.36 Joint venture & associate companies Others 82.12 112.54 62.85 119.67 422.62 426.85 Dividend income: Trade investments Others 1.64 2.43 82.45 79.52 84.09 81.95 From current investments 664.54 114.17 748.63 Net gain/(loss) on sale or fair valuation of investments 14320.98 699.19 20732.39 Income from financing activity 6336.81 669.69 2658.34 2303.52 1676.85 NOTE [32] Contingent Liabilities Particulars (a) Claims against the Group not acknowledged as debts (b) Sales tax liability that may arise in respect of matters in appeal (c) Excise duty / service tax / custom duty / entry tax / stamp duty / municipal cess liability that may arise, including those in respect of matters in appeal / challenged by the Group in Writ As at 31-3-2017 As at 31-3-2016 As at 1-4-2015 crore 4359.98 239.66 crore 4008.18 263.64 crore 1596.37 185.37 265.37 243.90 222.44 (d) Income tax liability that may arise in respect of which the Group is in appeal 753.91 725.91 1215.92 (e) Guarantees and letter of credit and letter of comfort given 1416.72 1159.26 1268.64 1426.96 155.64 Compensated absences 999.95 918.28 848.48 Employee pension scheme [Note 45(b)(i)] 22.67 56.17 13.47 Post-retirement medical benefits plan [Note 45(b)(i)] 13.36 17.07 14.59 Others 4.09 5.00 0.48 1231.38 1144.26 1007.16 Others: Additional tax on dividend 18.94 Reserve for unexpired risks Other provisions [Note 53] 1408.02 22.42 222.42 914.42 12.75 501.30 5694.92 1297.00 7018.24 4287.99 Particulars of share in capital commitments of joint ventures and associates are given in Note 55 (g). NOTE [34] Revenue from operations Particulars Sales and service: 4441.55 8718.29 404.64 1443.41 2.61 159.34 2016-17 2015-16 crore crore crore crore Construction and project related activity [Note 44(a)] 74504.71 68838.65 Manufacturing and trading activity 9083.68 9915.25 Engineering and service fees 3239.35 3046.77 Software development products and services (c) Share in capital commitments of joint operations (f) Contingent liabilities incurred in relation to interests in joint operations companies (a) Estimated amount of contracts remaining to be executed on capital account (net of advances). 4170.76 3248.49 (g) Contingent liabilities in respect of liabilities of other joint operators of joint operations 6230.96 8006.19 10840.81 (h) Share in contingent liabilities of joint operations for which the Group is contingently liable 53.24 58.18 80.13 Notes: (i) The Group expects reimbursements of 34.01 crore (previous year: 27.09 crore) in respect of the above contingent liabilities. (ii) It is not practicable to estimate the timing of cash outflows, if any, in respect of matters at (a) to (d) above pending resolution of the arbitration/appellate proceedings. Further, the liability mentioned in (a) to (d) above excludes interest and penalty in cases where the Group has determined that the possibility of such levy is remote. (iii) In respect of matters at (f) to (h), the cash outflows, if any, could generally occur upto completion of projects undertaken by the respective joint operations. (iv) Particulars of share in contingent liabilities of joint ventures and associates are given in Note 55 (g). 394 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [33] Commitments: Particulars As at 31-3-2017 As at 31-3-2016 crore crore As at 1-4-2015 crore (b) Funding committed by way of equity/loans to joint venture 13729.98 852.86 20256.77 Purchase of stock-in-trade 1610.57 1176.73 Engineering, professional, technical and consultancy fees 218.96 152.01 Insurance claim incurred (net) 155.60 176.80 Bank guarantee charges 998.79 1375.15 Hire charges-plant and equipment and others 364.81 383.45 Packing and forwarding 17.66 16.44 Royalty and technical know-how fees (1.40) 1116.02 1309.05 Power and fuel 19.28 (514.86) 84.00 (1324.50) 809.64 7330.82 58796.10 1145.35 crore Insurance 205.52 5362.09 Finance cost of financial services business and finance lease activity: Interest and other financing charges 9160.56 10583.48 2624.22 3338.02 Miscellaneous expenses 12.62 Port operation expenses 311.76 377.86 General repairs and maintenance 20.12 25.42 Repairs to buildings 80.22 92.39 Repairs to plant and equipment 1053.88 1016.00 Travelling and conveyance 333.68 405.05 Rates and taxes 502.75 492.58 Rent 227.25 4967.11 91.81 234.26 Other manufacturing, construction and operating expenses: Excise duty Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 396 58796.10 6521.18 62009.68 6173.99 6521.18 6173.99 293.63 1191.81 4570.76 179.99 284.99 Carried forward Property development land Completed property 1259.39 Work-in-progress Cost of built up space and property development land: 4385.19 Work-in-progress 188.59 Stock-in-trade 340.82 Finished goods Closing stock: NOTE [36] 1900.34 Manufacturing, construction and operating expenses (contd.) 2016-17 Value of inventory transferred on sale of business Internal capitalisation of property development land (268.96) 352.96 6526.95 293.63 Property development land Completed property 1197.58 Work-in-progress Cost of built up space and property development land: 4570.76 Work-in-progress 179.99 Stock-in-trade 284.99 Finished goods Less: Opening stock: Brought forward 4523.29 178.02 403.10 crore 6521.18 62009.68 6173.99 crore crore 2015-16 Particulars 5362.09 4967.11 78039.25 Commission: 72.40 64.63 186.41 196.82 211.33 201.19 2.85 3.60 572.00 568.76 403.43 440.20 21.50 20.66 613.81 623.48 148.43 166.34 513.75 496.13 79.90 75.63 185.36 157.97 127.43 114.14 Distributors and agents Others crore 286.64 6.49 Bank charges Value of stock-in-trade transferred on sale of business 1349.93 (16.49) Stores, spares and tools consumed 1610.57 2090.42 1333.44 1834.19 Sub-contracting charges 22556.13 20788.86 Change in inventories of finished goods, work-in-progress, stock-in-trade and property development: 398 4429.62 4649.39 Carried forward 259.01 376.31 15.55 82.24 Less: Allowances for doubtful debts and advances written back 274.56 458.55 Bad debts and advances written off 672.28 238.82 120.91 293.13 128.45 0.51 721.44 Miscellaneous expenses Discount on sales 232.75 6.07 crore crore crore 421.83 380.63 119.84 131.78 Gratuity funds [Note 45(b)(ii)] 87.02 36.54 Superannuation/employee pension schemes 214.97 212.31 Provident fund and pension fund Contribution to and provision for: 11882.28 crore 12479.83 crore crore crore 2015-16 2016-17 Salaries, wages and bonus Particulars Employee benefits expense NOTE [37] Notes forming part of the Consolidated Financial Statements (contd.) 397 72408.91 Expenses on employee stock options scheme Employee medical & other insurance premium expenses Staff welfare expenses 88.17 2015-16 2016-17 Stationery and printing Advertising and publicity Telephone, postage and telegrams Directors' fees Professional fees General repairs and maintenance Repairs to buildings Travelling and conveyance Particulars Rates and taxes Rent 130.14 Insurance Power and fuel Sales, administration and other expenses NOTE [38] 13330.84 13853.07 (162.13) (279.94) Recoveries on account of deputation charges 980.87 1013.50 140.44 170.88 67.55 Packing and forwarding 147.74 Facility management income Gratuity [Note 45(b)(i)] crore crore Redeemable non-convertible fixed rate debentures 19633.76 9776.15 29409.91 15746.68 9685.53 25432.21 15288.02 8407.72 23695.74 Redeemable non-convertible floating rate debentures 275.00 275.00 219.28 219.28 203.26 203.26 Redeemable non-convertible inflation indexed debentures 113.52 113.52 110.32 110.32 Preference shares 1147.02 1147.02 1312.99 1312.99 0.675% Foreign currency convertible bonds Term loans from banks 1201.78 1201.78 22412.79 12741.60 35154.39 1190.86 1190.86 111.30 111.30 1456.98 1456.98 1089.81 1089.81 20553.17 12157.94 32711.11 16461.58 Total 9404.05 25865.63 As at 1-4-2015 Secured Unsecured crore crore 59.24 (15.23) (25.96) (25.94) 347.52 44.01 (51.90) Debt instruments through other comprehensive income [Note 1(q)] 70.97 50029.93 76.03 43994.06 78.62 41022.18 ^ Debenture redemption reserve (DRR): The Group has issued redeemable non-convertible debentures and created DRR in terms of the Companies (Share capital and Debenture) Rules, 2014 (as amended). A company is required to maintain a DRR of 25% of the value of debentures issued, either by a public issue or on a private placement basis (excluding private placement by non-banking finance companies). The amounts credited to the DRR may not be utilised except to redeem debenture. 390 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [22] Financial liabilities: Borrowings - non-current As at 31-3-2017 Particulars Secured Unsecured Total As at 31-3-2016 Secured Unsecured Total crore crore crore crore * crore 405.32 (57.80) Term loans from others 38.63 NOTE [23] Other financial liabilities - non-current Forward contract payables Embedded derivative payables Due to others NOTE [24] Provisions - non-current Particulars Particulars Employee pension scheme [Note 45(b)(i)] Post-retirement medical benefit plan [Note 45(b)(i)] Provision for interest rate guarantee (Provident fund) Provision for employee benefits-Others Other provisions [Note 53] As at 31-3-2017 As at 31-3-2016 As at 1-4-2015 crore crore * crore 38.39 47.81 100.72 32.48 4.85 53.99 120.46 Loans guaranteed by directors Nil (previous year: ₹ Nil) 38.63 42321.55 25019.03 67340.58 36521.71 24702.13 61223.84 31959.64 20750.00 52709.64 205.80 Loans from financial institutions 0.02 2.56 38.14 38.16 0.03 34.24 34.27 2.56 6.75 6.75 Finance lease obligation [Note 48(b)(i)(B)] Sales tax deferment loan Perpetual debts 0.25 0.25 0.23 0.23 39.48 39.48 0.08 0.08 0.28 0.28 0.62 0.62 205.84 205.84 205.80 88.74 Cost of hedging reserve Hedging reserve [Note 1(q)] Sr. Particulars 2016-17 no. a) Weighted average risk-free interest rate b) Weighted average expected life of options c) Weighted average expected volatility d) Weighted average expected dividends 3.19 per option e) Weighted average share price 75.53 per option 7.49% 3.98 years 32.53% 2015-16 7.52% 3.68 years 31.78% 2.94 per option 65.73 per option f) Weighted average exercise price 73.70 per option 44.20 per option g) Method used to determine expected volatility Expected volatility is based on the historical volatility of the Company's shares price applicable to the expected life of each option. 389 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [21] (C) Weighted average fair values of options granted during the year is ₹27.24 (previous year: 32.02) per options. (D) The fair value has been calculated using the Black-Scholes Option Pricing Model and the significant assumptions and inputs to estimate the fair value of options granted during the year are as follows: Other equity 6.56 5.40 Market Price 2 Options granted and outstanding at the beginning of the year 61,08,998 68,02,519 2,35,50,000 2,63,50,000 3 Options granted during the year 6,50,000 9,00,000 1,16,40,000 4 Options cancelled/lapsed during the year 21,36,393 5 Options exercised and shares allotted during the year 18,03,810 3,17,841 1,08,77,500 28,00,000 12,75,680 5,19,500 6 Options granted and outstanding at the end of the year 28,18,795 61,08,998 2,37,93,000 2,35,50,000 of which Options vested Options yet to vest 15,76,795 40,95,548 23,90,500 12,42,000 20,13,450 2,14,02,500 2,35,50,000 7 Weighted average remaining contractual life of options (in years) 5.05 6.29 Cash flow hedging reserve Particulars As at 31-3-2017 303.25 282.22 369.24 Statutory reserves Debenture redemption reserve ^ 1025.44 1119.98 852.20 Reserve u/s 45 IC of the Rerserve Bank of India Act, 1934 1222.89 1142.69 863.28 Reserve u/s 29C of National Housing Bank Act, 1987 Reserve u/s 36(1)(viii) of Income Tax Act, 1961 32.00 32.00 20.39 461.97 364.63 251.50 Retained earnings 2742.30 37335.32 2659.30 31724.59 1987.37 29703.20 Foreign currency translation reserve [Note 1 (w)(iii)] 478.24 609.59 538.23 (202.53) Equity component of foreign currency convertible 571.77 (292.00) As at 31-3-2016 crore crore crore * crore 153.20 153.20 As at 1-4-2015 * crore crore 153.20 bonds [Note 63(J)] Capital reserve [Note 1(g)] Capital reserve Capital reserve on consolidation Securities premium account [Note 1(t)] 10.52 269.76 10.52 269.88 10.52 270.54 280.28 8318.85 280.40 8164.72 281.06 7963.16 Employee share options (net) [Note 1(v)] Employee share options outstanding 595.25 191.31 437.03 (154.81) 67.41 Deferred employee compensation expense 141.40 NOTE [29] Other financial liabilities - current Unclaimed dividend Unclaimed interest on debentures Financial guarantee contracts Embedded derivative payables Due to others* As at 31-3-2017 As at 31-3-2016 * crore crore crore crore As at 1-4-2015 crore 390.20 756.59 crore 1170.96 18.41 1929.05 17.05 1723.21 80.88 1427.30 1947.46 142.00 27294.59 1740.26 151.92 1508.18 140.95 24354.79 19236.80 Due to others 29774.25 Micro and small enterprises Particulars Finance lease obligation [Note 48(b)(i)(B)] 0.60 0.60 0.11 0.11 0.16 0.16 Sales tax deferment loan 0.20 0.20 0.34 0.34 0.45 0.45 6175.20 3903.70 10078.90 9233.26 2781.64 12014.90 7419.54 703.33 8122.87 Loans guaranteed by directors Nil (previous year: Nil) 392 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [28] Financial liabilities - current: Trade payables Acceptances Due to related parties: Associate companies Joint venture companies 12.10 27003.56 As at 31-3-2017 * crore 6163.28 525.44 13944.29 crore 5661.02 768.53 crore 4425.28 637.65 14946.19 13084.65 2811.73 3032.15 2657.02 23444.74 24407.89 20804.60 393 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [31] Current liabilities: Provisions Particulars As at 31-3-2017 As at 31-3-2016 crore crore crore crore As at 1-4-2015 * crore crore Provision for employee benefits: 191.33 As at 1-4-2015 22056.89 As at 31-3-2016 Other payables As at 31-3-2016 As at 1-4-2015 Particulars * crore crore 46.61 39.33 crore 33.59 10.87 17.22 10.31 1.55 1.19 184.70 4945.32 181.06 4083.64 68.83 3658.90 5189.05 3772.85 4322.44 * Due to others include due to directors 55.58 crore (as at 31-3-2016: 51.30 crore; as at 1-4-2015 53.83 crore) NOTE [30] Other current liabilities Particulars Due to customers (construction related activity) Due to customers (property development projects) As at 31-3-2017 12.10 1.22 4.28 crore crore crore 44.70 47.11 39.13 127.44 134.03 172.80 172.14 181.14 211.93 As at 31-3-2017 Particulars Secured Unsecured Total As at 31-3-2016 Secured Unsecured As at 1-4-2015 Total Secured Unsecured Total crore Loans repayable on demand 1736.72 Short term loan and advances from banks 365.83 Short term unsecured loan from others As at 1-4-2015 crore crore 65.50 1802.22 1965.74 2331.57 429.05 429.05 As at 31-3-2016 Financial liabilities: Borrowings - current 222.12 4.28 As at 31-3-2017 As at 31-3-2016 As at 1-4-2015 crore 294.74 crore 231.38 crore 208.00 221.19 176.24 166.49 0.61 8.88 9.20 16.43 1.98 1.46 526.59 424.66 385.35 391 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [25] Other non-current Liabilities Particulars Other payables NOTE [26] As at 31-3-2017 crore crore crore 1590.31 176.63 1766.94 732.77 4547.72 5280.49 Deferred income on loan processing/ assignment crore crore crore crore Redeemable non-convertible fixed rate debentures 5181.37 2217.74 7399.11 5554.61 1940.83 7495.44 2727.71 647.60 3375.31 Redeemable non-convertible floating rate debentures 109.04 109.04 crore 0.54 Term loans from banks 993.20 178.82 178.82 1506.34 2499.54 3565.33 Term loans from others 840.36 4405.69 4677.74 1.45 51.86 4729.60 3.26 4.71 Loans from financial institutions crore 1605.01 234.95 1839.96 1212.27 0.63 0.63 Preference shares crore 0.54 crore Short term unsecured fixed rate debentures crore Loans from related parties Commercial Paper 526.17 526.17 11993.95 11993.95 30.23 7819.09 30.23 7819.09 37.97 2102.55 14454.24 16556.79 2323.08 12573.67 14896.75 2817.28 13079.86 15897.14 Loans guaranteed by directors Nil (previous year: Nil) 37.97 8674.94 8674.94 3605.83 4818.10 crore NOTE [27] Total As at 1-4-2015 Secured Unsecured crore As at 31-3-2016 Secured Unsecured Total Total Secured Unsecured Particulars As at 31-3-2017 Financial liabilities: Current maturities of long term borrowings crore * Inventories amounting to 95.09 crore as at 1-4-2015 is classifed under group(s) of assets classifed as held for sale [Note 52] 91.05 v) 178.73 2480.15 60.01 2224.29 129.94 Excess of revenue recognised over actual bills raised (unbilled revenue) [Note 19] Gratuity plan Notes forming part of the Consolidated Financial Statements (contd.) NOTE [45] Disclosure pursuant to Indian Accounting Standard (Ind AS) 19 "Employee Benefits" [Note 1(o)] (b) Defined benefit plans: 3837.17 60.27 1489.21 (i) The amounts recognised in Balance Sheet are as follows: crore LARSEN & TOUBRO (a) Defined contribution plans: Amount of ₹ 180.27 crore (previous year ₹ 166.35 crore) is recognised as an expense. Out of above, 178.66 crore (previous year: 165.14 crore) is included in "employee benefits expense" [Note 37] in the Statement of Profit and Loss and 1.61 crore (previous year: 1.21 crore) has been capitalised. ii) Amount of work-in-progress and the value of inventories [Note 11]* 2016-17 Particulars Particulars Sr. 2015-16 As at 1-4-2015 no. i) 1259.76 Amount of project revenue recognised for the financial year [Note 34] Aggregate amount of costs incurred and profits recognised (less recognised losses) as at the end of the financial year 1444.81 NA 4507.66 iii) Amount of advances received 65.54 iv) 2272.71 As at As at 31-3-2017 31-3-2016 221.47 (30.06) Pension plan 3348.38 3041.76 2763.21 4.80 4.76 3.90 224.61 194.39 208.69 234.55 193.31 181.08 317.41 287.55 (5.60) 19.19 221.47 3318.32 3036.16 2782.40 Liabilities Assets Net liability/(asset) Net liability/(asset) current # Net liability/(asset) - Non-current 224.61 194.39 208.69 234.55 193.31 224.61 194.39 208.69 13.36 17.07 221.19 176.24 crore 287.55 221.47 31.84 27.90 36.29 (15.94) (7.36) (9.05) 181.08 317.41 287.55 221.47 15.90 20.54 27.24 14.59 22.67 56.17 13.47 15.90 19.93 18.36 166.49 294.74 231.38 208.00 0.61 8.88 232.28 201.98 219.53 234.55 193.31 181.08 317.41 (7.67) (7.59) (10.84) Post-retirement medical benefit plan As at As at As at 1-4-2015 31-3-2017 31-3-2016 221.47 2.59 12.19 30.83 193.31 181.08 317.41 193.31 181.08 317.41 Trust-managed provident fund plan As at As at 1-4-2015 31-3-2017 As at 31-3-2016 As at 1-4-2015 As at 31-3-2017 31-3-2016 As at As at 1-4-2015 287.55 287.55 Present value of defined benefit obligation -Wholly unfunded Less: Fair value of plan assets Add: Amount not recognised as an asset [limit in para 64(b)] Amount to be recognised as liability or (asset) B) Amounts reflected in the Balance Sheet 640.87 601.75 582.29 194.66 147.74 130.14 234.55 835.53 749.49 712.43 234.55 615.72 559.86 507.64 3315.73 3023.97 2751.57 A) -Wholly funded 406 14 (b) The Group has revised certain estimates used in determining the cost of completion of projects, as a part of periodic review of estimates. As a result, the revenue and profit before tax for the year increased by ₹ 168.17 crore (previous year: 395.73 crore). (c) The Group has undertaken project for construction, operation and maintenance of the Metro Rail System on Design-Build- Finance-Operate-Transfer (DBFOT) basis as per the concession agreement with the government authorities. Under the agreement, the concession period for fare collection is 35 years (extendable by another 25 years at the option of the concessionaire, upon satisfaction of key performance indicators by the concessionaire under the concession agreement). Under the agreement, the fare can be revised on the basis of variation in wholesale price index effective from 1st of April every year. At the end of the said concession period, the entire facilities would be transferred to the concerned government authorities. The Group expects to receive viability gap funding of 1458 crore from the grantor for the project. The Group also expects to receive property development rights in respect of transit-oriented development. The arrangement has been classified as intangible assets. 15 Instalaciones Inabensa S.A.-L&T Consortium India 16 Scomi Engineering Bhd. -L&T Consortium India 17 India Consortium of M/s. J. Ray McDermott Sdn. Bhd. and M/s. L&T Hydrocarbon Engineering Limited 18 Consortium of L&T Hydrocarbon Engineering Limited and EMAS AMC Pte. Ltd. Kingdom of Saudi Arabia NOTE [41] The components of other equity shown in the Consolidated Balance Sheet include the Group's share in the respective reserves of subsidiaries. Reserve attributable to non-controlling interest is reported separately in the consolidated Balance Sheet. Retained earnings comprise Group's share in general reserve and balance of Profit and Loss. 405 Notes forming part of the Consolidated Financial Statements (contd.) India NOTE [42] Sojitz Corporation-Gayathri Projects Ltd.-L&T Consortium Sojitz Corporation-L&T Consortium # Liability for unfunded gratuity with respect to group(s) of assets classified as held for sale is included thereunder Consortium of L&T Hydrocarbon Engineering Limited & Toyo Engineering Company India 9 Consortium of L&T Hydrocarbon Engineering Limited and Pipavav Defence & Offshore Engineering Company India 10 India PES Engg P. ltd.-L&T Consortium 11 L&T Galfar Consortium India 12 L&T Oman-L&T consortium India 13 India (d) Disclosures pursuant to Guidance Note on Accounting for Real Estate Transactions issued by the Institute of Chartered Accountants of India: Exceptional items include [Note 1(j)]: (c) Exceptional items for the previous year ended March 31, 2016 included profit on divestment of group's stake in an associate company (Salzer Electronics Limited) 45.70 crore and profit on sale of Foundry Business Unit 48.52 crore. 250082.50 218581.76 iii) Amount of customer advances outstanding for contracts in progress as at the end of the financial year 13267.98 13789.93 11866.39 265885.96 iv) 8277.30 7527.55 6370.36 * Includes provision for foreseeable loss 247.41 257.02 179.58 Retention amount by customers for contracts in progress as at the end of the financial year (a) Profit on divestment of the Group's stake in a subsidiary company (L&T General Insurance Company Limited) 402.43 crore. (b) Impairment of investment in a joint venture company (Infrastructure Development Projects Limited) 281.00 crore. Aggregate amount of contract costs incurred and recognised profits(less recognised losses*) as at the end of the financial year for all contracts in progress as at that date 68838.65 NOTE [43] The expenditure on research and development activities recognised as expense in the Statement of Profit and Loss is 177.88 crore (previous year: 187.90 crore). Further, the Group has incurred capital expenditure on research and development activities as follows: (a) on Property, Plant and Equipment: 9.75 crore (previous year: * 5.68 crore) on intangible assets being expenditure on new product development: 43.01 crore (previous year: 48.19 crore) on other intangible assets: 3.20 crore (previous year: * 6.80 crore) (b) (c) NOTE [44] (a) Disclosures pursuant to Indian Accounting Standard (Ind AS) 11 "Construction Contracts": NA Sr. i) Particulars 2016-17 2015-16 crore As at 1-4-2015 Contract revenue recognised for the financial year [Note 34] 74504.71 no. (ii) The amounts recognised in Statement of Profit and Loss are as follows: 126.52 Gratuity plan 122.34 136.27 Il Amount included as part of "finance cost" 0.31 (1.92) 12.61 52.97 12.05 16.76 (8.39) III Amount included as part of "other comprehensive income" (11.85) 8.60 19.11 21.47 (6.51) 2.48 18.44 Trust-managed provident fund plan 408 Gratuity plan Particulars Post-retirement medical benefit plan Pension plan 2016-17 14.94 2015-16 2016-17 2015-16 2016-17 2015-16 Amount included in "employee benefits expense" 131.78 119.84 2016-17 2015-16 crore 23.64 Total (I+II+III) Pension plan As at 31-3-2016 As at 31-3-2017 As at 31-3-2016 Trust-managed provident fund plan As at 31-3-2017 As at 31-3-2016 Opening balance of the present value of defined benefit obligation Post-retirement medical benefit plan As at 31-3-2017 749.49 193.31 181.08 Add: Current service cost 127.65 120.61 16.47 8 712.43 12.01 As at 31-3-2016 As at 120.24 50.16 20.48 47.59 81.74 122.34 127.88 31-3-2017 Actual return on plan assets 48.10 278.26 252.90 (iii) The changes in the present value of defined benefit obligation representing reconciliation of opening and closing balances thereof are as follows: crore Gratuity plan Particulars 87.85 crore NOTE [45] (contd.) 407 42.37 14.59 13.77 21.47 16.76 259.47 233.26 3 Interest income on plan assets 44.23 (40.51) (259.47) (233.26) 4 Remeasurement - Actuarial losses/(gains) - Difference between actual return on plan assets and interest income (47.34) (2.75) (45.35) (18.79) Interest cost 127.89 $ Particulars Post-retirement medical benefit plan Pension plan 2016-17 2015-16 1 Current service cost 127.65 2 120.61 2016-17 2015-16 12.26 2016-17 2015-16 Trust-managed provident fund plan 2016-17 2015-16 2.48 3.39 122.34$ 16.47 Notes forming part of the Consolidated Financial Statements (contd.) (19.64) 35.88 10 Translation adjustments 0.91 (0.35) 11 Amount capitalised out of the above (0.46) (0.85) (0.01) 2.06 (0.01) 120.24 126.52 50.16 20.48 47.59 81.74 122.34 127.88 Total (1 to 11) 5 Remeasurement - Actuarial losses/(gains) - Others (0.39) (0.01) 9.29 19.11 (6.51) 23.64 12.01 (9.87) (17.91) 6 9 Remeasurement - Effect of the limit in para 64(b) Past service cost 49.58 7 Actuarial gain/(loss) not recognised in books 28.66 37.55 8 Adjustment for earlier years 0.27 1.49 0.97 India interest (%) 7 47 L&T Trustee Company Private Limited India 100.00 100.00 100.00 100.00 100.00 100.00 48 L&T Power Development Limited India 100.00 100.00 100.00 100.00 100.00 100.00 49 L&T Uttaranchal Hydropower Limited India 100.00 100.00 100.00 100.00 Name of subsidiary company no. Principal place of business As at 31-3-2017 Proportion Proportion of of ownership voting power interest (%) held (%) As at 31-3-2016 Proportion Proportion of of ownership voting power interest (%) held (%) As at 1-4-2015 Proportion Proportion of of ownership voting power interest (%) held (%) 45 Mudit Cement Private Limited 100.00 India 66.62 66.71 66.71 72.95 72.95 46 L&T Capital Company Limited India 100.00 100.00 66.62 Sr. 100.00 100.00 100.00 100.00 100.00 53 L&T Metro Rail (Hyderabad) Limited India 100.00 100.00 97.48 97.48 97.48 97.48 54 L&T Technology Services Limited India 89.77 89.77 100.00 100.00 100.00 100.00 100.00 100.00 100.00 India 100.00 100.00 50 L&T Arunachal Hydropower Limited India 100.00 100.00 100.00 100.00 100.00 100.00 100.00 L&T Himachal Hydropower Limited India 100.00 100.00 100.00 100.00 100.00 100.00 52 Nabha Power Limited 51 NOTE [40] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 72.95 72.95 37 L&T Mutual Fund Trustee Limited India 66.62 66.62 66.71 66.71 72.95 72.95 38 L&T FinCorp Limited ~ India 66.71 66.71 72.95 72.95 39 L&T Infrastructure Finance Company Limited India 66.62 66.71 66.71 66.62 66.62 66.71 72.95 72.95 34 L&T Finance Limited ~ India 66.71 66.71 72.95 72.95 66.62 35 India 66.62 66.62 66.71 66.71 72.95 72.95 36 L&T Investment Management Limited India L&T Capital Markets Limited 66.71 66.71 72.95 66.71 66.71 72.95 72.95 43 L&T Financial Consultants Limited (formerly India known as L&T Vrindavan Properties Limited) 66.62 66.62 66.71 66.71 66.62 72.95 44 L&T Access Distribution Services Limited India 66.62 66.62 66.71 66.71 72.95 72.95 400 72.95 55 66.62 India 72.95 40 L&T Infra Debt Fund Limited India 66.62 66.62 66.71 66.71 72.95 72.95 Private Limited 41 India Private Limited 66.62 66.62 66.71 66.71 72.95 72.95 42 L&T Infra Investment Partners Trustee L&T Infra Investment Partners Advisory L&T Construction Equipment Limited India 100.00 100.00 100.00 4 Larsen & Toubro Infotech LLC USA 84.28 84.28 94.96 94.96 100.00 100.00 5 L&T Infotech Financial Services Technologies Canada Inc. 84.28 84.28 94.96 94.96 100.00 100.00 94.96 94.96 84.28 84.28 Foreign Subsidiaries 1 Larsen & Toubro LLC USA 100.00 100.00 100.00 100.00 100.00 100.00 6 2 Germany 84.28 84.28 94.96 94.96 100.00 100.00 3 Larsen & Toubro Infotech Canada Limited Canada Larsen & Toubro Infotech GmbH Larsen & Toubro Infotech South Africa (PTY) Limited South Africa 63.12 UAE 100.00 100.00 100.00 100.00 100.00 100.00 10 Larsen & Toubro Hydrocarbon International Kingdom of Larsen & Toubro International FZE Limited LLC 100.00 100.00 100.00 100.00 100.00 100.00 11 Thalest Limited UK 100.00 100.00 Saudi Arabia As at 1-4-2015 Proportion Proportion of of ownership voting power Interest (%) held (%) 9 100.00 63.12 71.12 71.12 74.90 74.90 7 L&T Information Technology Services China (Shanghai) Co., Ltd. 84.28 100.00 84.28 94.96 100.00 100.00 8 L&T Realty FZE UAE 100.00 100.00 100.00 100.00 94.96 66.71 As at 31-3-2016 Proportion Proportion of of ownership voting power Interest (%) held (%) business L&T Hydrocarbon Engineering Limited India 100.00 100.00 100.00 100.00 100.00 100.00 Sahibganj Ganges Bridge-Company Private India Limited^ 100.00 100.00 228 60 Seawoods Retail Private Limited^^ India 100.00 100.00 61 Seawoods Realty Private Limited^^^ India 100.00 58 559 74.00 74.00 100.00 100.00 100.00 100.00 100.00 56 L&T Infrastructure Engineering Limited India 100.00 100.00 100.00 100.00 100.00 100.00 57 L&T Thales Technology Services Private India Limited 66.43 66.43 74.00 74.00 100.00 62 Marine Infrastructure Developer Private Limited India 100.00 100.00 100.00 * The Group has sold its stake on September 9, 2016 @ The company is merged with Larsen & Toubro Infotech Limited w.e.f. April 1, 2016 $ The Group has sold its stake on March 20, 2017 $$ The company is merged with L&T Hydrocarbon Engineering Limited w.e.f. April 1, 2016 $$$ The company is merged with L&T Housing Finance Limited w.e.f. April 1, 2015 ~ The company is merged with Family Credit Limited (subsequently renamed as L&T Finance Limited) w.e.f. April 1, 2016 A The company is incorporated on July 14, 2016 100.00 ^^ The company is incorporated on September 2, 2016 # The Fund is incorporated on August 22, 2013. The Group has control over its relevant activities. ## The Group acquired stake on November 30, 2016 ### The Company is incorporated on March 17, 2017 401 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [40] (contd.) Sr. Name of subsidiary company no. Principal place of ^^^ The company is incorporated on October 23, 2016 As at 31-3-2017 Proportion Proportion of of ownership voting power Interest (%) held (%) 100.00 India 97.00 97.00 100.00 100.00 63 AugmentIQ Data Sciences Private Limited## India 84.28 84.28 | | 64 100.00 L&T Infra Contractors Private Limited### 100.00 100.00 65 L&T Natural Resources Limited India 66 L&T Solar Limited India 67 L&T PowerGen Limited India 66.62 66.62 Family Credit Limited) As at 31-3-2017 Proportion Proportion of of ownership voting power interest (%) Indian Subsidiaries 1 L&T Cutting Tools Limited India 100.00 100.00 100.00 100.00 100.00 100.00 2 Bhilai Power Supply Company Limited India 99.90 99.90 99.90 99.90 99.90 99.90 3 held (%) Proportion Proportion of of ownership voting power interest (%) As at 1-4-2015 As at 31-3-2016 Proportion Proportion of of ownership voting power interest (%) held (%) 7045.50 5778.52 2016-17 2015-16 crore 1271.63 crore 1500.26 2.58 6.64 Spectrum Infotech Private Limited 65.63 1339.84 1655.06 Principal place of business NOTE [40] The list of subsidiaries, associates, joint ventures and joint operations in the consolidated financial statements are as under: Sr. Name of subsidiary company no. held (%) 148.16 India 100.00 100.00 100.00 100.00 100.00 7 Hi-Tech Rock Products & Aggregates Limited India 100.00 100.00 100.00 100.00 100.00 100.00 100.00 L&T Seawoods Limited India 100.00 100.00 100.00 100.00 100.00 100.00 9 Kesun Iron and Steel Company Private 8 71.40 100.00 India 100.00 100.00 100.00 100.00 4 L&T-Valdel Engineering Limited$$ India 100.00 100.00 100.00 100.00 100.00 L&T Shipbuilding Limited India 97.00 97.00 97.00 97.00 97.00 97.00 6 L&T Electricals and Automation Limited 5 India 227.93 50.65 (140.08) (127.70) Less: Benefits paid 6.84 (7.93) (5.38) 8.97 8.94 changes in experience adjustments iii) Actuarial (gains)/losses arising from (17.91) (9.87) 1.01 16.80 1.42 24.41 0.40 26.79 changes in financial assumptions ii) Actuarial (gains)/losses arising from (0.00) (8.93) (8.26) (17.73) Add: Past service cost 0.97 L&T and Scomi Engineering BHD. Joint Venture 287.55 3318.32 3036.16 317.41 193.31 234.55 749.49 835.53 Closing balance of the present value of defined benefit obligation 4.84 7.49 0.08 Add/(less): Translation adjustments 1.02 0.38 Add: Adjustment for earlier years (1.89) Add: Business combination/acquisition (4.10) (391.47) 11.00 (15.66) (388.56) 49.58 0.01 0.66 (0.99) Add: Liabilities assumed on transfer of employees (0.75) (0.08) 0.15 i) Actuarial (gains)/losses arising from changes in demographic assumptions Provision/(reversal) for foreseeable losses on construction contracts Exchange (gain)/loss [net] Other provisions NOTE [39] Finance costs Interest expenses Particulars Other borrowing costs Exchange loss (attributable to finance costs) 2016-17 Allowances for doubtful debts and loans and advances (net) 2015-16 crore crore 4649.39 crore 4429.62 50.90 12.63 2075.54 1093.34 (8.91) 76.48 * crore 95.05 Receivable discounting charges -non recourse Brought forward Add/(less): Remeasurement - Actuarial losses/(gains) iii) Transfer-in/(out) ii) Employee 306.84 298.11 i) Employer Add: Contribution by plan participants 233.26 127.89$ 2782.40 Particulars 221.47 3036.16 3.39 122.34$ 16.76 259.47 13.77 14.59 44.23 Add: Interest cost 287.55 2.48 12.26 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [38] Sales, administration and other expenses (contd.) 21.47 100.00 Limited 95.00 74.00 74.00 74.00 74.00 25 Consumer Financial Services Limited$$$ India 66.71 66.71 72.95 72.95 26 L&T General Insurance Company Limited* India 100.00 100.00 100.00 100.00 27 L&T Aviation Services Private Limited India 74.00 74.00 India L&T Cassidian Limited India 68.00 68.00 68.00 68.00 68.00 68.00 22 L&T Power Limited India 100.00 99.99 99.99 99.99 99.99 99.99 23 CSJ Infrastructure Private Limited India 100.00 100.00 24 99.99 100.00 100.00 100.00 72.95 31 L&T Housing Finance Limited India 66.62 66.62 66.71 66.71 72.95 72.95 72.95 32 India 36.55 36.55 36.69 36.69 40.45 40.45 33 L&T Finance Limited (formerly known as India L&T Infra Investment Partners # L&T Vision Ventures Limited 66.71 66.62 100.00 100.00 28 Larsen & Toubro Infotech Limited India 84.28 84.28 94.96 94.96 100.00 66.71 100.00 GDA Technologies Limited @ India 94.96 94.96 100.00 100.00 30 L&T Finance Holdings Limited India 66.62 29 95.00 21 51.00 Principal place of business As at 31-3-2017 Proportion Proportion of of ownership voting power interest (%) held (%) As at 31-3-2016 Proportion Proportion of of ownership voting power interest (%) held (%) As at 1-4-2015 Proportion Proportion of of ownership voting power interest (%) held (%) 13 EWAC Alloys Limited India 100.00 100.00 100.00 100.00 100.00 100.00 14 L&T Geostructure LLP India 74.00 74.00 74.00 74.00 no. Name of subsidiary company Sr. NOTE [40] (contd.) 95.00 95.00 95.00 95.00 10 L&T Infocity Limited India 89.00 89.00 11 74.00 L&T Hitech City Limited 65.86 65.86 12 Hyderabad International Trade Expositions India Limited 51.72 51.72 399 Notes forming part of the Consolidated Financial Statements (contd.) India 74.00 15 L&T Valves Limited L&T Parel Project LLP India 100.00 100.00 100.00 100.00 100.00 100.00 19 Chennai Vision Developers Private Limited 18 India 100.00 100.00 100.00 100.00 100.00 20 L&T South City Projects Limited$ India 51.00 51.00 100.00 51.00 50.00 100.00 India 100.00 100.00 100.00 100.00 100.00 100.00 16 L&T Realty Limited India 50.00 100.00 100.00 100.00 100.00 100.00 17 L&T Asian Realty Project LLP India 100.00 100.00 100.00 100.00 100.00 42.37 100.00 25 L&T Sapura Shipping Private Limited India 60.00 60.00 60.00 26 L&T Sapura Offshore Private Limited India 60.00 60.00 60.00 27 L&T-Gulf Private Limited India 50.00 50.00 50.00 28 L&T-MHPS Boilers Private Limited India 50.10 50.10 50.10 India 97.45 222 21 L&T Halol-Shamlaji Tollway Limited India 47.75 97.45 97.45 22 L&T Krishnagiri Walajahpet Tollway Limited 51.00 India 97.45 97.45 23 Devihalli Hassan Tollway Limited (formerly known as L&T Devihalli Hassan India Tollway Limited) 97.45 97.45 97.45 24 L&T Howden Private Limited 97.45 97.45 51.00 29 51.00 51.00 51.00 34 L&T-Sargent & Lundy Limited India 50.00 50.00 50.00 35 Indiran Engineering Projects and Systems Kish PJSC Iran 50.00 50.00 50.00 *The group has sold its stake on May 6, 2016 As at 31-3-2017 As at 31-3-2016 As at 1-4-2015 Sr. no. India L&T Kobelco Machinery Private Limited 33 72.77 L&T-MHPS Turbine Generators Private Limited India 51.00 51.00 51.00 30 Raykal Aluminium Company Private Limited India 75.50 75.50 51.00 75.50 L&T Special Steels and Heavy Forgings Private Limited India 74.00 74.00 74.00 32 PNG Tollway Limited India 72.11 72.11 31 97.45 Maliya Tollway Limited) India 97.45 97.45 97.45 11 L&T Infrastructure Development Projects Limited India 97.45 97.45 97.45 12 Panipat Elevated Corridor Limited (formerly known as L&T Panipat Elevated Corridor Limited) India 97.45 97.45 97.45 403 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [40] (contd.) Sr. Name of joint venture no. India L&T Sambalpur-Rourkela Tollway limited 10 97.45 L&T Rajkot-Vadinar Tollway Limited India 97.45 97.45 97.45 7 L&T Deccan Tollways Limited India 97.45 97.45 Principal place of business 97.45 L&T Samakhiali Gandhidham Tollway Limited India 97.45 97.45 97.45 9 Kudgi Transmission Limited India 97.45 97.45 8 As at 31-3-2017 Proportion of ownership As at 31-3-2016 Proportion of 98.12 98.12 98.12 17 L&T Western India Tollbridge Limited India 97.45 97.45 97.45 18 India L&T Interstate Road Corridor Limited 97.45 97.45 97.45 19 L&T Port Kachchigarh Limited India 97.45 97.45 97.45 Ahmedabad-Maliya Tollway Limited (formerly known as L&T Ahmedabad- India Name of joint operation (with specific ownership interest in the arrangement) L&T Transportation Infrastructure Limited 67802 ownership As at 1-4-2015 Proportion of ownership interest (%) interest (%) 13 Krishnagiri Thopur Toll Road Limited (formerly known as L&T Krishnagiri Thopur Toll Road Limited) India 97.45 97.45 97.45 16 14 Tollways Limited) 97.45 97.45 97.45 15 Vadodara Bharuch Tollway Limited (formerly known as L&T Vadodara Bharuch Tollway Limited) India 97.45 97.45 97.45 Western Andhra Tollways Limited (formerly known as L&T Western Andhra India Principal place of Proportion Proportion of L&T-AL-Sraiya LRDP 6 Joint Venture Qatar 75.00 75.00 19 DAEWOO and L&T Joint Venture India 50.00 50.00 20 PESB and Larsen & Toubro Joint Venture Malaysia 82.30 82.30 21 Besix - Larsen & Toubro Joint Venture^ UAE 50.00 22 Al Balagh Trading & Contracting Co. W.L.L.-L&T Joint Venture^^ Qatar 18 60.00 60.00 60.00 55.00 14 L&T-Eastern Joint Venture@ UAE 65.00 65.00 65.00 15 Civil Works Joint Venture Kingdom of 80.00 Saudi Arabia 29.00 29.00 16 Aktor-Larsen & Toubro-Yapi Merkezi-stfa-Al Jaber Engineering Joint Venture Qatar 22.00 22.00 22.00 17 L&T-Delma Mafraq Joint Venture UAE 29.00 23 LTH Milcom Private Limited India Name of joint operation (with specific proportion of activity carried out through the arrangement) no. Principal place of business 1 L&T Sojitz Consortium India 2 L&T-KBL (UJV) Hyderabad India 3 Sr. L&T-KBL-MAYTAS Joint Venture 4 Larsen and Toubro Limited & Bharat Rail Automation Pvt. Ltd. Joint Venture (Package II) India 5 Larsen and Toubro Limited & Bharat Rail Automation Pvt. Ltd. Joint Venture (Package III) India 6 IIS L&T Consortium India 100.00 India 55.00 # On scope of respective activities under the contract as mutually agreed between joint operators $ The joint operation has been entered on October 12, 2016 56.67 56.67 24 Mumbai Metro Rail Corporation Limited^^^ India 100.00 25 Bauer-L&T Geo Joint Venture India 50.00 $$ The joint operation has been entered on January 23, 2015 50.00 EMAS Saudi Arabia Ltd$$ Kindgom of 50.00 ☐ 27 Larsen & Toubro Ltd - Passavant Energy & Environment JV$ India 50.00 @ The joint operation is in process of liquidation ^ The joint operation has been entered on December 5, 2015 (started Operation in FY 2016-17) ^^ The joint operation has been entered on May 25, 2016 (started Operation in FY 2016-17) ^^^ The joint operation has been entered on February 25, 2015 26 6 55.00 Larsen & Toubro Limited and NCC Limited Joint Venture HCC-L&T Purulia Joint Venture India 43.00 43.00 43.00 5 Metro Tunneling Group India 26.00 26.00 26.00 6 L&T-Hochtief Seabird Joint Venture India 90.00 90.00 90.00 7 L&T-Shanghai Urban Construction (Group) Corporation Joint Venture India 51.00 4 49.00 49.00 49.00 of ownership business interest (%) ownership interest (%) Proportion of ownership interest (%) 1 L&T-AM Tapovan Joint Venture India 51.00 65.00 65.00 2 International Metro Civil Contractors Joint Venture India 26.00 26.00 26.00 3 Desbuild-L&T Joint Venture India 65.00 51.00 8 Metro Tunneling Chennai - L&T Shanghai Urban Construction (Group) Corporation Joint Venture 60.00 12 b) Larsen & Toubro Limited - Scomi Engineering BHD. Consortium-O&M Joint Venture India 50.00 50.00 50.00 404 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [40] (contd.) 60.00 Sr. Name of joint operation (with specific ownership interest in the arrangement) Principal place of business As at 31-3-2017 Proportion of ownership interest (%) As at 31-3-2016 Proportion of ownership As at 1-4-2015 Proportion of ownership interest (%) interest (%) 315 13 no. India 60.00 Larsen & Toubro Limited - Scomi Engineering BHD. Consortium-Residual Joint Works Joint Venture India 75.00 75.00 75.00 9 Metro Tunneling Delhi - L&T Shanghai Urban Construction (Group) Corporation Joint Venture India 100.00 # 60.00 India 10 Larsen & Toubro Limited - Shapoorji Pallonji & Co. Limited Joint Venture L&T-Shanghai Urban Construction (Group) Corporation Joint Venture CC27 Delhi India 50.00 50.00 50.00 India 100.00 # 68.00 12 a) 11 97.45 Saudi Arabia 97.45 Malaysia 100.00 100.00 100.00 100.00 100.00 100.00 26 Henikwon Corporation SDN. BHD. Malaysia 100.00 100.00 100.00 100.00 100.00 100.00 27 Larsen & Toubro Consultoria E Projeto Ltda Brazil 100.00 100.00 Tamco Switchgear (Malaysia) SDN. BHD. 25 75.00 75.00 100.00 100.00 100.00 100.00 23 Larsen Toubro Arabia LLC Kingdom of Saudi Arabia 75.00 75.00 28 75.00 75.00 75.00 24 Larsen & Toubro ATCO Saudia LLC Kingdom of Saudi Arabia 75.00 75.00 75.00 75.00 75.00 Larsen & Toubro (Qingdao) Rubber Peoples Machinery Company Limited 70.00 70.00 70.00 70.00 70.00 70.00 32 L&T Electrical & Automation FZE UAE 100.00 Oman 100.00 100.00 100.00 100.00 33 Kana Controls General Trading & Kuwait Contracting Company WLL 49.00 100.00 49.00 100.00 100.00 Sultanate of 31 Republic of China 100.00 100.00 29 Tamco Electrical Industries Australia Pty Limited Australia 100.00 100.00 100.00 Larsen & Toubro Heavy Engineering LLC 100.00 100.00 30 PT Tamco Indonesia Indonesia 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Kingdom of 65.00 65.00 65.00 65.00 15 Larsen & Toubro (East Asia) SDN. BHD Malaysia 30.00 100.00 30.00 100.00 30.00 100.00 16 Larsen & Toubro Qatar LLC Qatar 49.00 100.00 49.00 100.00 49.00 65.00 65.00 Oman Sultanate of 123 12 97.45 Servowatch Systems Limited UK 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Larsen & Toubro (Oman) LLC Sultanate of Oman 65.00 65.00 65.00 65.00 65.00 14 L&T Modular Fabrication Yard LLC 13 17 L&T Overseas Projects Nigeria Limited Nigeria 20 Larsen & Toubro Kuwait Construction Kuwait General Contracting Company WLL 49.00 75.00 49.00 75.00 49.00 75.00 75.00 21 UAE Concrete Industries LLC 49.00 100.00 49.00 100.00 49.00 100.00 22 Larsen & Toubro (Saudi Arabia) LLC Larsen & Toubro Readymix & Asphalt Saudi Arabia 75.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 18 PT Larsen & Toubro Hydrocarbon Indonesia Engineering Indonesia 100.00 95.00 95.00 95.00 95.00 95.00 19 L&T Electricals & Automation Saudi Arabia Company Limited LLC Kingdom of Saudi Arabia 100.00 100.00 95.00 49.00 65.00 402 Rishi Consfab Private Limited India 26.00 26.00 11 Magtorq Private Limited India 42.85 42.85 42.85 42.85 42.85 42.85 12 Grameen Capital India Limited^ India 23.84 23.84 23.87 23.87 13 10 26.00 26.00 India 6 International Seaports (Haldia) Private India Limited 21.74 21.74 21.74 21.74 21.74 21.74 Ardom Telecom Private Limited^^ 7 India 23.14 23.14 8 Salzer Electronics Limited India 26.06 26.06 9 JSK Electricals Private Limited Vizag IT Park Limited 16.89 India 8.08 As at 31-3-2017 Proportion of ownership interest (%) 65.00 Proportion of ownership interest (%) As at 31-3-2016 Proportion of ownership interest (%) As at 1-4-2015 65.00 65.00 93.44 93.47 97.45 97.45 4 L&T Chennai-Tada Tollway Limited India 97.45 97.45 97.45 India L&T BPP Tollway Limited 100.00 5 Singapore Sri Lanka business Sultanate of Oman Principal place of 8.11 8.11 8.94 8.94 14 KMC Infratech Road Holdings Limited^^^ India 0.09 0.09 0.09 0.09 8.08 @The company is under liquidation Larsen & Toubro Electromech LLC 2 L&T Infrastructure Development Projects Lanka (Private) Limited* 3 L&T IDPL Trustee Manager Pte. Ltd. ^ The associate company operates under severe long term restrictions that significantly impair its ability to transfer funds to the company and hence the same has not been considered for consolidation. ^^ The Company has become associate on January 3, 2015. Investment in the associate is measured at fair value through profit or loss. ^^^ The Company has become associate on September 30, 2015. Investment in the associate is measured at fair value through profit or loss. Sr. Name of joint venture no. 1 16.89 97.45 15.74 36 Larsen & Toubro Infotech Austria GmbH Austria 84.28 84.28 94.96 94.96 37 L&T Global Holdings Limited UAE 72.50 100.00 100.00 100.00 100.00 38 L&T Information Technology Spain SL Spain 84.28 84.28 94.96 94.96 Sr. 100.00 Name of associate company 72.50 100.00 100.00 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [40] (contd.) 15.74 Sr. LARSEN & TOUBRO Name of subsidiary company no. Principal place of business As at 31-3-2017 Proportion Proportion of of ownership voting power Interest (%) held (%) As at 31-3-2016 Proportion Proportion of of ownership voting power Interest (%) held (%) 72.50 100.00 held (%) Larsen & Toubro T&D SA (Proprietary) Limited South Africa 72.50 72.50 72.50 35 L&T Technology Services LLC USA 89.77 89.77 34 Principal As at 1-4-2015 Proportion Proportion of of ownership voting power Interest (%) place of 3 Larsen & Toubro Qatar & HBK Contracting Qatar LLC 50.00 50.00 50.00 50.00 50.00 50.00 50.00 4 UAE 49.00 49.00 49.00 49.00 49.00 5 15.42 no. Feedback Infra Private Limited L&T Camp Facilities LLC 50.00 49.00 50.00 business of ownership voting power Interest (%) held (%) As at 31-3-2017 Proportion Proportion of 50.00 As at 31-3-2016 Proportion Proportion of of ownership voting power Interest (%) held (%) As at 1-4-2015 Proportion Proportion of of ownership voting power Interest (%) held (%) 1 L&T-Chiyoda Limited India 50.00 50.00 India 50.00 50.00 India 50.00 Gujarat Leather Industries Limited@ 2 50.00 50.00 15.42 50.00 656.12 659.29 659.29 648.03 408.53 bonds Debt instruments - Public Sector Unit 739.23 406.36 406.36 472.41 472.41 1056.56 688.71 bonds Debt instruments - State Government 656.12 739.23 688.71 351.42 742.08 17.87 Special deposit scheme 17.87 bonds Mutual funds Others 4.11 4.11 Mutual funds Debt 1.89 406.54 1.89 20.85 20.04 0.81 67.41 12.82 Mutual funds Equity 1123.40 771.98 1148.62 268.34 80.23 As at 1-4-2015 196.01 As at 31-3-2016 Total Unquoted Quoted As at 31-3-2016 31-3-2017 Total As at As at 31-3-2017 Unquoted Quoted As at 31-3-2017 As at crore Particulars 507.64 330.72 268.34 176.92 559.86 364.75 615.72 195.11 Trust-managed provident fund plan Debt instruments Central Government 31-3-2016 Unquoted 136.17 59.84 262.93 116.00 146.93 467.41 113.96 353.45 Debt instruments Corporate bonds Quoted As at 1-4-2015 Equity instruments 12.31 12.31 9.76 9.76 12.53 12.53 1-4-2015 As at Total Cash and cash equivalents 270.94 (b) Pension plan 271.71 (D) Attrition Rate: 6.00% 6.00% 6.00% 5.00% 5.00% 5.00% (b) Pension plan (a) Gratuity plan (C) Salary Growth rate: 5.00% 5.00% 5.00% (B) Annual increase in healthcare costs (see note below) 7.84% 7.80% 7.10% Post-retirement medical benefit plan (c) (a) For post-retirement medical benefit plan & pension plan, the attrition rate varies from 2% to 8% (previous year: 2% to 8%) for various age groups. (b) For gratuity plan the attrition rate varies from 1% to 6% (previous year: 1% to 6%) for various age groups. (E) The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors, such as supply and demand the employment market. (F) The interest payment obligation of trust-managed provident fund is assumed to be adequately covered by the interest income on long term investments of the fund. Any shortfall in the interest income over the interest obligation is recognised immediately in the Statement of Profit and Loss as actuarial losses. 35.83 (31.46) (39.68) 45.65 43.51 (37.56) 395.15 (44.36) 51.69 Impact of change in discount rate Impact of change in health care cost 7.84% Post-retirement medical benefit plan Gratuity 31-Mar-16 Effect of 1% decrease 31-Mar-17 31-Mar-16 Effect of 1% increase 31-Mar-17 Particulars crore (H) A one percentage point change in actuarial assumptions would have the following effects on defined benefit obligation: (G) The obligation of the Group under the post-retirement medical benefit plan is limited to the overall ceiling limits. At present, healthcare cost, as indicated in the principal actuarial assumption given above, has been assumed to increase at 5% p.a. Impact of change in salary growth rate Impact of change in discount rate 7.80% 7.10% 7.84% 3. Post-retirement medical benefit plan 2. Gratuity 1. Plans (vi) The Average duration of the Defined Benefit Plan Obligation at the end of the reporting period is as follows: 1289.47 2763.21 95.41 Pension plan 95.41 99.15 1765.92 1275.84 3348.38 111.20 111.20 1225.58 2122.80 Closing balance of the plan assets Others Fixed deposits 271.71 99.15 3041.76 1473.74 270.94 As at 31-3-2017 As at 1-4-2015 7.80% 7.10% (a) Gratuity plan As at 1-4-2015 As at 31-3-2016 As at 31-3-2017 (A) Discount rate: (vii) Principal actuarial assumptions at the Balance Sheet date (expressed as weighted average) : NOTE [45] (contd.) As at 31-3-2016 Notes forming part of the Consolidated Financial Statements (contd.) 9.60 8.07 8.06 18.55 16.55 17.48 7.06 7.18 7.54 LARSEN & TOUBRO 220.57 40.85 22.50 1.45 1.36 0.09 1.60 1.50 0.10 4.76 4.76 Cash and cash equivalents As at 1-4-2015 As at 1-4-2015 Total Unquoted Quoted As at 1-4-2015 Total As at 31-3-2016 Gratuity plan Unquoted As at 31-3-2016 Quoted As at 31-3-2016 As at 31-3-2017 As at 31-3-2017 Equity instruments 10.97 0.65 11.62 149.35 108.50 Debt instruments - Central Government bonds 125.70 125.67 0.03 138.62 138.59 0.03 Total 160.46 0.07 - Debt instruments Corporate bonds 5.28 0.28 5.00 5.81 0.30 5.51 160.39 Unquoted Quoted As at 31-3-2017 Particulars 4.76 301.41 294.32 Closing balance of the plan assets Less: Settlements Add: Adjustment for earlier years Less: Benefits paid Add: Business combination/disposal (net) Add: Liabilities assumed on transfer of employees 13.60 Add: Contribution by plan participants 121.07 120.37 143.41 95.58 Add: Contribution by the employer 27.53 (36.17) (0.00) Add/(Less): Actuarial gains/(losses) - Others 0.00 Add/(less): Transfer in/(out) 101.52 (127.70) 0.13 (2.03) crore 54.70 crore) towards its gratuity plan and 140.68 crore provident fund plan during the year 2017-18. The fair value of major categories of plan assets are as follows: (v) $ Employer's contribution to provident fund. The Group expects to fund 37.48 crore (previous year: (previous year: 145.15 crore) towards its trust-managed The Trust formed by the Parent Company and a few subsidiaries manage the investments of provident funds and gratuity fund. Interest income on plan assets is determined by multiplying the fair value of the plan assets by the discount rate stated in (g) (i) below both determined at the start of the annual reporting period. Basis used to determine interest income on plan assets: on their value at the time of redemption, assuming a constant rate of return to maturity. (0.20) (140.08) 0.97 0.02 * 3041.76 3348.38 559.86 615.72 (18.16) (0.50) (391.47) (388.56) (0.80) Notes: The fair value of the plan assets under the trust managed provident fund plan has been determined at amounts based 36.21 137.73 92.06 0.04 0.04 0.04 0.07 0.07 Mutual funds Others 0.33 0.33 0.37 0.04 0.37 0.37 Mutual funds Debt 36.84 36.84 40.63 40.63 47.52 47.31 0.21 0.37 Mutual funds - Equity Special deposit scheme 55.38 22.50 24.83 24.83 25.03 25.03 Others 0.82 0.82 0.91 0.77 0.91 0.86 Fixed deposits 46.70 46.08 0.62 51.52 50.82 0.70 56.15 0.86 Closing balance of the plan assets 62.90 3.55 Particulars Gratuity plan 410 crore NOTE [45] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) 409 80.19 4.62 Quoted As at 75.57 5.09 83.34 103.20 5.49 97.71 bonds Debt instruments - State Government 124.89 32.83 88.43 59.35 Unquoted Quoted Unquoted 69.37 65.46 3.91 56.33 53.99 2.34 Debt instruments - Public Sector Unit bonds As at 1-4-2015 As at 1-4-2015 Total As at 1-4-2015 As at 31-3-2016 As at 31-3-2016 As at 31-3-2017 As at 31-3-2017 31-3-2017 Total Unquoted Quoted Total As at 31-3-2016 24.69 (27.93) 3815.67 (19.75) 34.87 194726.15 212059.67 Consolidated total assets/liabilities (1490.25) Inter-segment assets/liabilities 15849.36 Corporate unallocated assets/liabilities 102677.01 5921.02 6879.62 121742.83 133547.08 160931.47 183914.15 197700.56 Segment Total 6844.74 19969.41 19361.19 18459.26 12664.22 12367.74 (1852.22) (2177.41) 171121.80 26222.72 27762.34 27443.49 Power Infrastructure 2015-16 2016-17 2015-16 2016-17 Other non-cash expenses included in segment expenses Depreciation, amortisation, impairment & obsolescence included in segment expenses Other information Others crore NOTE [46] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) 413 127943.09 147652.95 158279.55 (2177.41) (1852.22) (1490.25) 414 Heavy Engineering 8373.32 8931.32 Hydrocarbon 1932.70 1774.34 1935.65 4714.69 4472.16 4364.25 Electrical & Automation 2769.97 3788.95 5424.71 5449.93 5112.41 Heavy Engineering 6118.86 7382.07 6362.49 6577.07 7964.47 6728.63 6143.98 6005.52 5589.70 22778.97 25315.31 28240.72 Developmental Projects 46316.32 56955.10 64341.27 52645.83 64212.75 8548.13 71841.82 1307.62 1606.85 1813.49 4310.12 4306.78 6085.75 IT & Technology Services 4290.42 4567.99 Financial Services Electrical & Automation 650.53 487.89 Infrastructure 2015-16 2016-17 2015-16 2016-17 2015-16 2016-17 segment result applying equity method included in Profit/(loss) of joint ventures and associates accounted crore expense Interest expense included in segment Interest income included in segment result Other information Note: Impairment loss included in other segment is 412.57 crore (previous year: Nil) and in Corporate unallocated is 103 crore (previous year: ₹ Nil). 1786.73 67.55 88.17 25.96 30.36 Power 0.00 72.61 89.11 19.64 Financial Services 7.51 4.62 IT & Technology Services 4.08 67.94 (209.15) 2.49 (39.84) 6.19 21.23 7.09 Hydrocarbon 3.44 6.71 Electrical & Automation 1.25 122.32 (186.81) 0.43 0.27 Heavy Engineering 0.14 45.09 29.21 123.61 220.46 2369.93 IT & Technology Services 5.00 7.97 147.67 148.87 Hydrocarbon 4.87 3.83 146.08 236.81 151.10 2.49 118.90 116.69 3.23 1.99 58.31 44.40 22.09 19.81 3.31 6847.03 232.07 (13.90) Consolidated total Corporate unallocated 46.32 58.96 1663.12 2149.47 Segment Total 5.73 4.62 13.46 299.95 Others 58.05 58.07 Developmental Projects 15.99 4.79 114.20 78.00 Financial Services 665.00 25646.78 30239.78 33912.75 159.56 8855.03 9887.54 156.25 9731.29 IT & Technology Services 8618.25 69.60 8548.65 9628.34 25.84 9602.50 Hydrocarbon 5401.30 460.62 4940.68 5367.27 398.71 4968.56 9014.59 Financial Services 8545.17 0.12 (3335.25) 9720.42 594.10 9126.32 10862.43 737.52 (2953.69) (2953.69) Elimination 10124.91 Others Electrical & Automation 4620.02 4336.36 4367.28 339.50 4027.78 Developmental Projects 7695.00 1.08 7693.92 8545.29 283.66 3255.87 173.12 3082.75 The Parent Company and a few subsidiaries manage provident fund plan through a provident fund trust for its employees which is permitted under the Employee Provident Fund and Miscellaneous Provisions Act, 1952. The plan mandates contribution by employer at a fixed percentage of employee's salary. Employees also contribute to the plan at a fixed percentage of their salary as a minimum contribution and additional sums at their discretion. The plan guarantees interest at the rate notified by the provident fund authority. The contribution by employer and employee together with interest are payable at the time of separation from service or retirement whichever is earlier. The benefit under this plan vests immediately on rendering of service. (D) Trust managed provident fund plan: In addition to contribution to state-managed pension plan (EPS scheme), the Group operates a post retirement pension scheme, which is discretionary in nature for certain cadres of employees. The quantum of pension depends on the cadre of the employee at the time of retirement. The plan is unfunded. Employees do not contribute to the plan. (C) Pension plan: The Post-retirement medical benefit plan provides for reimbursement of health care costs to certain categories of employees post their retirement. The reimbursement is subject to an overall ceiling sanctioned based on cadre of the employee at the time of retirement. The plan is unfunded. Employees do not contribute to the plan. (B) Post-retirement medical care plan: are no minimum funding requirements of these plans. The funding of these plans is based on gratuity fund's actuarial measurement framework set out in the funding policies of the plan. These actuarial measurements are similar compared to the assumptions set out in (g) supra. An insignificant portion of the gratuity plan of the group attributable to subsidiary companies is administered by the respective subsidiary companies and is funded through insurer managed funds. A small part of the gratuity plan, which is not material, is unfunded and managed within the group. Employees do not contribute to any of these plans. NOTE [46] NOTE [45] (contd.) The interest payment obligation of trust-managed provident fund is assumed to be adequately covered by the interest income on long term investments of the fund. Any shortfall in the interest income over the interest obligation is recognised immediately in the Statement of Profit and Loss as actuarial loss. Any loss/gain arising out of the investment risk and actuarial risk associated with the plan is also recognised as expense or income in the period in which such loss/ gain occurs. Notes forming part of the Consolidated Financial Statements (contd.) The defined benefit plans for gratuity of the Parent Company and material domestic subsidiary companies are administered by separate gratuity funds that is legally separate from the Parent Company and the material domestic subsidiary companies. The trustees nominated by the group are responsible for the administration of the plan. There The Parent Company operates gratuity plan through a trust wherein every employee is entitled to the benefit equivalent to fifteen days salary last drawn for each completed year of service. The same is payable on termination of service or retirement whichever is earlier. The benefit vests after five years of continuous service. The company's scheme is more favourable as compared to the obligation under The Payment of Gratuity Act, 1972. (viii) Characteristics of defined benefit plans and associated risks: (A) Gratuity plan: 25.26 26.68 (21.80) (26.07) Impact of change in discount rate Pension plan 411 (3335.25) All the above defined benefit plans expose the Group to general actuarial risks such as interest rate risk and market (investment) risk. 412 3446.94 297.79 3149.15 Heavy Engineering 6426.80 50558.34 1591.21 2.30 48967.13 6424.50 53920.81 6938.79 Disclosure pursuant to Indian Accounting Standard (Ind AS) 108 "Operating Segments" (a) Information about reportable segments 997.73 0.23 Power Infrastructure Revenue Total 2015-16 External Inter-segment Total 2016-17 External Inter-segment Particulars crore 52923.08 6938.56 (21.99) 46.02 Total 110011.00 101975.34 141.96 distributed by subsidiaries Additional provision/(reversal) of tax on dividend 5582.66 6738.81 Profit after tax 380.73 (2817.69) 276.51 8019.62 (1655.06) 827.76 Provision for deferred tax (2976.31) Provision for current tax 8887.36 Profit before tax 716.07 Add: Unallocated corporate income net of expenditure (1339.84) (47.80) | Share in profit/(loss) of joint venture/associate companies (net) (395.27) (990.16) 38505.15 46687.58 50020.69 As at 1-4-2015 As at 31-3-2016 As at 31-3-2017 As at 1-4-2015 As at 31-3-2016 As at 31-3-2017 Less: Interest expenses Power Other information Segment liabilities Segment assets crore 4232.88 6041.23 (311.82) (444.27) Adjustments for non-controlling interest in subsidiaries Net profit after tax, non-controlling interest and share in profit/(loss) of joint ventures/associates Infrastructure (62.15) (28.14) Less: Inter segment margins on capital jobs 201.18 4990.54 4722.54 Heavy Engineering Power Infrastructure tax] Segment result [Profit/(Loss) before interest and Total 112.84 External Inter-segment External Inter-segment Particulars 2015-16 2016-17 crore NOTE [46] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 101975.34 Total 110011.00 498.57 Hydrocarbon 9460.32 9539.27 Total 989.49 414.69 Others 238.56 32.01 1304.26 (97.47) 786.44 1825.53 (95.28) 508.42 433.06 549.89 Developmental Projects Financial Services IT & Technology Services Electrical & Automation 1584.32 18.79 0.03 47.34 9 Mr. Akhilesh Krishna Gupta Mr. Thomas Mathew T. @ 7 Mr. Adil Zainulbhai 5 Mr. Vikram Singh Mehta 3 Mr. M. Damodaran 2 8 Mr. M. V. Satish (Whole-time Director) ## 6 Mr. Shailendra Roy (Whole-time Director) 4 Mr. R. Shankar Raman (CFO & Whole-time Director) 2 Mr. K. Venkataramanan (CEO & Managing Director) $ Ms. Jyothi Venkataramanan (wife) 32 Indiran Engineering Projects and System Kish PJSC 34 L&T Port Kachchigarh Limited 30 L&T Rajkot-Vadinar Tollway Limited 28 L&T Sambalpur-Rourkela Tollway Limited 26 Ahmedabad-Maliya Tollway Limited 24 Devihalli Hassan Tollway Limited 16 L&T Sapura Shipping Private Limited 18 Panipat Elevated Corridor Limited 20 Western Andhra Tollways Limited 22 L&T Interstate Road Corridor Limited 14 L&T-Gulf Private Limited 10 L&T Krishnagiri Walajahpet Tollway Limited 12 L&T BPP Tollway Limited 11 Ms. Sunita Sharma ~ 8 L&T Samakhiali Gandhidham Tollway Limited 13 Mr. Ajay Shankar ** Mr. Sanjeev Aga ^ NOTE [47] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) 417 6 L&T Construction Equipment Provident Fund Trust 4 L&T Kansbahal Staff & Workmen Provident Fund 2 The Larsen & Toubro Limited Provident Fund of 1952 7 L&T Valves Employees Provident Fund 5 L&T Kansbahal Officers & Supervisory Provident Fund 3 The Larsen & Toubro Limited Provident Fund 1 The Larsen & Toubro Officers & Supervisory Staff Provident Fund *** 14 Mr. Subramanian Sarma *** 16 Mr. Narayanan Kumar ^^ #Appointed w.e.f. October 1, 2015 ##Appointed w.e.f. January 29, 2016 @@@ Appointed w.e.f. April 1, 2015 and separated w.e.f. May 15, 2016 Appointed w.e.f. August 19, 2015 ^ Appointed w.e.f. May 25, 2016 * 10 Mr. Swapan Dasgupta @@@ 12 Mr. Bahram Vakil 8 Ms. Naina Lal Kidwai @@ Mr. Subodh Bhargava 6 4 Mr. Sushobhan Sarker ** $$ Retired on August 26, 2015 @@ Appointed w.e.f. March 1, 2016 Appointed w.e.f. May 30, 2015 ~ Appointed w.e.f. April 1, 2015 $ Retired on September 30, 2015 @ Appointed w.e.f. April 3, 2015. Separated w.e.f. August 1, 2016 ^^ Appointed w.e.f. May 27, 2016 Provident Fund Trusts: 15 6 L&T Kobelco Machinery Private Limited 4 L&T-MHPS Boilers Private Limited 2 L&T-Sargent & Lundy Limited 3 L&T Howden Private Limited 1 L&T Special Steels & Heavy Forgings Private Limited *** The Group has sold its stake in July and August 2015. Joint ventures: * The Group has sold its stake on March 29, 2016. International Seaports (Haldia) Private Limited 9 Rishi Consfab Private Limited** 7 Magtorq Private Limited 5 L&T Camp Facilities LLC 3 L&T-Chiyoda Limited 1 Associate companies: (a) Disclosure of related parties/related party transactions pursuant to Indian Accounting Standard (Ind AS) 24 "Related Party Disclosures": Names of the related parties with whom transactions were carried out during the year and description of relationship: NOTE [47] Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 416 5 L&T-MHPS Turbine Generators Private Limited 7 L&T Infrastructure Development Projects Limited 9 L&T Deccan Tollways Limited 11 L&T IDPL Trustee Managers Pte. Ltd. 13 Larsen and Toubro Electromech LLC # The Group has sold its stake on March 31, 2016. ** The Group has sold its stake on December 21, 2015. 10 Vizag IT Park Limited# Larsen and Toubro Qatar & HBK Contracting LLC Salzer Electronics Limited*** 8 6 JSK Electricals Private Limited * 4 2 Gratuity Trusts: Feedback Infra Private Limited (b) Independent/Non-executive Directors 7 Mr. D. K. Sen (Whole-time Director) # 5 Mr. S.N.Subrahmanyan (Whole-time Director) 3 Mr. M. V. Kotwal (Whole-time Director) $$ 1 Mr. A.M. Naik (Group Executive Chairman) Key management personnel & their relatives: (a) Executive Directors 31 L&T Chennai-Tada Tollway Limited 33 L&T Western India Tollbridge Limited 29 PNG Tollway Limited 23 L&T Transportation Infrastructure Limited 25 L&T Halol Shamlaji Tollway Limited 27 Kudgi Transmission Limited 15 Raykal Aluminium Company Private Limited 17 L&T Sapura Offshore Private Limited 19 Krishnagiri Thopur Toll Road Limited 21 Vadodara Bharuch Tollway Limited 1 Mr. M. M. Chitale IT & Technology Services segment comprises information technology and integrated engineering services. Financial Services segment comprises retail and corporate finance, housing finance, infrastructure finance, general insurance (up to the date of sale), asset management of mutual fund schemes and related advisory services. Developmental projects segment comprises development, operation and maintenance of basic infrastructure projects, toll collection, power development, development and operation of port facilities and providing related advisory services. Others segment includes metallurgical & material handling systems, realty, shipbuilding, manufacture and sale of industrial valves, welding and cutting equipment, manufacture, marketing and servicing of construction equipment and parts thereof, marketing and servicing of mining machinery and parts thereof, manufacture and sale of rubber processing machinery & castings (upto the date of sale), mining and aviation. None of the businesses reported as part of others segment meet any of the quantitative thresholds for determining reportable segments for the year ended March 31, 2017. 1 Laresen & Toubro Officers & Supervisors Gratuity Fund 3 Larsen and Toubro Technology Services Ltd Eggas (b) Disclosure of related party transactions: Total Key management personnel L&T-Chiyoda Limited Associate: L&T Special Steels and Heavy Forgings Private Limited L&T Howden Private Limited 418 L&T-MHPS Turbine Generators Private Limited (iv) Sale of Property, plant and equipment Joint ventures, including: 0.04 0.02 Total 0.04 0.02 L&T Infrastructure Development Projects Limited 0.04 0.02 (iii) Purchase/lease of property, plant and equipment Joint venture: 1317.94 1108.61 Total 0.42 Mr. K. Venkataramanan $ L&T-Chiyoda Limited 2.75 Joint ventures, including: Developmental Projects 1.09 (0.25) 1.09 (0.03) (0.22) 1.09 (0.25) 9.80 0.44 8.85 9.29 0.01 0.01 0.05 0.19 0.26 0.50 | | Total L&T-MHPS Turbine Generators Private Limited L&T-MHPS Boilers Private Limited (v) Investments including subscription to equity and preference shares (including application money) 0.42 Associate : 157.14 Associates, including: Larsen and Toubro Electromech LLC 536.02 1256.68 1675.16 530.79 L&T-MHPS Turbine Generators Private Limited L&T-MHPS Boilers Private Limited 2222.85 2360.29 Joint ventures, including: Purchase of goods & services (including commission paid) (i) Amount Amounts for major parties Amount Amounts for major parties Nature of transaction/relationship/major parties Sr. no. 2015-16 2016-17 crore 4 L&T Shipbuilding Limited Employees Group Assurance Scheme 2 Larsen & Toubro Gratuity Fund L&T-Chiyoda Limited JSK Electricals Private Limited Salzer Electronics Limited Magtorq Private Limited L&T-MHPS Boilers Private Limited 533.50 394.35 L&T Deccan Tollways Limited 653.99 544.28 L&T Infrastructure Development Projects Limited 1317.94 1108.19 Joint ventures, including: 5 Nabha Power Limited Employees' Group Gratuity Assurance Scheme (ii) Sale of goods/contract revenue & services 2319.42 2421.07 10.16 37.33 27.99 16.96 52.29 96.57 60.78 304.92 Total Hydrocarbon segment comprises complete EPC solutions for the global Oil & Gas Industry from front-end design through detailed engineering, modular fabrication, procurement, project management, construction, installation and commissioning. Mr. M. V. Kotwal $$ • Heavy Engineering 420.11 (0.01) 2.11 488.42 595.57 449.81 100.17 3.04 1224.56 616.27 Power Infrastructure As at 1-4-2015 As at 31-3-2016 As at 31-3-2017 2015-16 2016-17 Investment in joint ventures and associates accounted applying equity method included in segment assets crore Additions to non-current assets Other information 96.87 NOTE [46] (contd.) 237.65 Electrical & Automation Developmental Projects 38.56 44.96 50.55 568.71 441.11 Financial Services 311.36 158.31 IT & Technology Services 284.19 320.68 334.43 48.14 111.93 Hydrocarbon 29.08 5.79 5.87 (0.00) 333.77 176.94 5.87 Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO (395.27) (990.16) Notes forming part of the Consolidated Financial Statements (contd.) NOTE [45] (contd.) (iv) Changes in the fair value of plan assets representing reconciliation of the opening and closing balances thereof are as follows: Trust-managed provident fund plan crore Gratuity plan Particulars As at 31-3-2017 As at 31-3-2017 As at 31-3-2016 Opening balance of the fair value of the plan assets Add: Interest Income on plan assets* 559.86 507.64 3041.76 2763.21 40.51 45.35 259.47 233.26 Add/(less): Remeasurement - Actuarial gains/(losses) Add/(less): Actuarial gains/(losses) - Difference between actual return on plan assets and interest income • LARSEN & TOUBRO 4.89 4777.91 647.60 4339.01 662.97 (34.87) 4967.11 (63.42) 5362.09 426.85 422.62 Consolidated total (232.72) (308.39) Inter-segment 504.64 527.66 2549.73 Corporate unallocated 0.96 (818.73) 6.14 (344.65) 0.29 (395.27) 5001.98 5425.51 154.93 203.35 Segment Total 28.46 31.56 Others 2.09 (990.16) 3027.70 As at 31-3-2016 652.84 1535.91 33378.58 27556.15 1-4-2015 As at As at 31-3-2016 30923.77 31842.67 As at 31-3-2017 Non-current Assets crore 101975.34 110011.00 32613.18 37653.49 7557.27 7157.63 4561.38 4950.40 1771.07 2968.44 2814.36 3354.10 1903.56 1545.37 32827.33 29101.52 • Others • • Electrical & Automation segment comprises manufacture and sale of low and medium voltage switchgear components, custom built low and medium voltage switchboards, electronic energy meters/protection (relays) systems, control & automation products. Heavy Engineering segment comprises manufacture and supply of custom designed, engineered critical equipment & systems to core sector industries like Fertiliser, Refinery, Petrochemical, Chemical, Oil & Gas, Thermal & Nuclear Power, Aerospace and Defence. Power segment comprises turnkey solutions for Coal-based and Gas-based thermal power plants including power generation equipment with associated systems and / or balance-of-plant packages. Infrastructure segment comprises engineering and construction of building and factories, transportation infrastructure, heavy civil infrastructure, power transmission & distribution, water and effluent treatment and smart world & communication projects. • • (iv) Segment composition 5319.09 (iii) Performance of a segment is measured based on segment profit (before interest and tax), as included in the internal management reports that are reviewed by the group's EMC. The performance of financial services segment and finance lease activities of power development segment are measured based on segment profit (before tax) after deducting the interest expense. (ii) Reportable segments The group has eight reportable segments as described under "segment composition" below which are the group's independent businesses. The nature of products and services offered by these businesses are different and are managed separately given the different sets of technology and competency requirements. In arriving at the reportable segment, the six operating segments have been aggregated and reported as "infrastructure segment" as these operating segments have similar economic characteristics in terms of long term average gross margins, nature of the products and services, type of customers, methods used to distribute the products and services and the nature of regulatory environment applicable to them. Operating segments are identified as those components of the groups (a) that engage in business activities to earn revenues and incur expenses (including transactions with any of the group's other components); (b) whose operating results are regularly reviewed by the group's executive management committee (EMC) to make decisions about resource allocation and performance assessment; and (c) for which discrete financial information is available. (i) (e) Segment reporting: basis of identifying operating segments, reportable segments and definition of each reportable segment: Basis of identifying Operating segments: NOTE [46] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) 415 (d) The group's reportable segments are organized based on the nature of products and services offered by these segments. Revenue contributed by any single customer in any of the operating segments, whether reportable or otherwise, does not exceed ten percent of the group's total revenue. An operating segment is classified as Reportable segment if reported revenue (including inter-segment revenue) or absolute amount of result or assets exceed 10% or more of the combined total of all the operating segments. 5583.41 • 7059.39 1257.88 2772.90 8343.26 5266.10 Consolidated total (515.70) (217.31) Inter-segment 149.50 579.24 Unallocable 2066.65 19.88 17.26 1257.88 1269.05 1764.72 18.72 2772.90 8709.46 4904.17 2507.76 4660.31 Segment total 2066.65 (b) Geographical Information 378.58 India (a) Other information 69362.16 72357.51 2016-17 Revenues crore 5929.70 (c) Foreign countries Total India Other information 2015-16 6580.12 United States of America Total (a+b) Kingdom of Saudi Arabia Sultanate of Oman Foreign countries (b): Kuwait Qatar Other countries Total Foreign countries (b) United Arab Emirates 15.21 10.35** 0.24 15.39 15.39 Mr. Subramanian Sarma 1.17 4.86 1.57 7.40 1.44 Mr. M. V. Satish ## 3.29 0.69 2.60 (Non-Executive Director) 7.77 0.93 5.96 133.04 4.37 ## Appointed w.e.f. January 29, 2016 #Appointed w.e.f. October 1, 2015 6.20 Represents encashment of past service accumulated leave $$ Retired on August 26, 2015 $ Retired on September 30, 2015 151.31 10.35 Other Non-Executive Directors 21.42 68.35 32.21 16.66 84.17 Total 4.06 4.06 4.37 51.19 Mr. D. K. Sen # 7.89 1.47 40.70 13.53 22.43 4.74 Mr. K. Venkataramanan $ 27.33 5.76 21.57 Mr. M.V. Kotwal $$ 59.90 payment benefits benefits benefits benefits 5.83 21.86 ** Mr. A.M. Naik 32.21* 3.35 15.35 26.59 6.43 10.06 1.93 8.13 Mr. Shailendra Roy 10.47 2.19 8.28 11.38 2.38 9.00 Mr. R. Shankar Raman 14.59 3.06 11.53 16.77 3.51 13.26 Mr. S. N. Subrahmanyan 7.90 (c) 0.01 Sr. Amounts for major As at 31-3-2016 parties Amounts for major Amounts for major parties Category of balance/relationship/major parties no. Amount parties Sr. 422 NOTE [47] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) 421 439.07 554.79 0.01 44.68 As at 31-3-2017 410.81 As at 1-4-2015 parties benefits Total Magtorq Private Limited Salzer Electronics Limited L&T-Chiyoda Limited Associates, including: Limited 830.70 Amounts for major 1042.26 1477.02 1726.56 1930.01 L&T-MHPS Turbine Generators Private L&T-MHPS Boilers Private Limited (ii) Accounts payable, including other liabilities Joint ventures, including: Amounts for major parties crore 1171.96 90.97 89.13 58.20 139.21 As at 31-3-2017 crore Total L&T-Chiyoda Limited Associate: Limited L&T Krishnagiri Walajahpet Tollway L&T Deccan Tollways Limited As at 31-3-2016 Limited Limited L&T Infrastructure Development Projects L&T-MHPS Boilers Private Limited Joint ventures, including: Accounts receivable (i) Category of balance/relationship/major parties no. L&T Samakhiali Gandhidham Tollway Amount Amounts for major parties Amounts for major 125.63 43.30 111.62 129.61 78.42 77.32 102.76 65.64 439.07 554.78 410.81 parties Amounts parties for major for major As at 1-4-2015 Amounts Amounts for major parties parties Represents fair value of employee stock options granted during 2015-16 to be vested over a period of time. Amount due to/from related parties (including commitments): Total Mr. D. K. Sen # Post- employment L&T-MHPS Boilers Private Limited 93.66 94.83 (xiii) Rent received, overheads recovered and miscellaneous income Joint ventures, including: 2.64 0.65 Total 2.64 35.50 0.65 2.64 0.65 (xii) Commission received, including those under agency arrangements Joint venture: Amount Amounts for major parties Amount Amounts for major parties Nature of transaction/relationship/major parties Sr. no. 2015-16 L&T Kobelco Machinery Private Limited 2016-17 23.50 17.70 3.85 5.23 3.85 5.23 L&T Infrastructure Development Projects Limited Joint venture: (xiv) Interest paid to Total L&T-Sargent & Lundy Limited Key management personnel: Associate: 9.83 10.02 L&T Special Steels and Heavy Forgings Private Limited Larsen and Toubro Electromech LLC 10.32 9.64 L&T-MHPS Turbine Generators Private Limited 17.67 L&T-Chiyoda Limited crore 420 NOTE [47] (contd.) 18.01 1.87 6.70 5.60 9.16 9.59 2.41 2.41 18.72 2.41 0.01 0.01 0.01 16.99 12.83 6.53 6.06 6.53 0.02 18.01 18.72 27.60 Notes forming part of the Consolidated Financial Statements (contd.) 419 19.38 0.57 0.57 0.57 2.22 2.46 5.63 13.75 13.75 Total Feedback Infra Private Limited International Seaports (Haldia) Private Limited Vizag IT Park Limited 0.57 Associates, including: L&T-Sargent & Lundy Limited Joint venture: 27.88 0.07 0.07 100.13 97.51 crore NOTE [47] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 72.42 35.61 Total 11.80 2016-17 5.15 12.00 6.26 47.73 23.59 Larsen & Toubro Officers & Supervisors Gratuity Fund Larsen & Toubro Gratuity Fund 72.42 35.61 Towards Employer's contribution Larsen and Toubro Technology Services Limited Eggas 2015-16 Sr. no. (ii) Towards advance contribution Short term employee Total Other long term 2015-16 2016-17 Post- employment Short term employee KMP crore (xvii) Compensation paid to key management personnel (KMP): "Major parties" denote entities accounting for 10% or more of the aggregate for that category of transaction during respective period. 11.85 60.00 Total 48.15 Larsen & Toubro Officers & Supervisors Gratuity Fund Larsen & Toubro Gratuity Fund 60.00 Amount Amounts for major parties Amount Amounts for major parties Nature of transaction/relationship/major parties (i) Other long Share-based term benefit 25.00 25.00 82.68 Total 0.19 0.20 L&T Camp Facilities LLC 0.19 0.20 52.58 58.23 78.98 58.04 82.48 Joint ventures, including: (xv) Interest Received from Total 3.89 3.89 3.89 L&T Special Steels and Heavy Forgings Private Limited Associate: (xvi) Contribution to post-employment benefit plan (a) Transaction with trust managed provident fund (i) Towards Employer's contribution 0.43 0.43 0.43 109.73 (b) Transaction with approved gratuity fund Total The Larsen & Toubro Officers & Supervisory Staff Provident Fund the company (iii) Subscription or purchase by the fund of the debt securities issued by Total The Larsen & Toubro Limited Provident Fund (ii) Towards advance contribution 113.35 Total 97.10 101.00 The Larsen & Toubro Officers & Supervisory Staff Provident Fund 109.73 113.35 25.00 0.01 Weighted average number of potential equity shares on account of conversion of foreign currency convertible bonds 7.07 6.00 On Mark-to-Market (MTM) of cash flow hedges 265.41 8.55 On gain/(loss) on fair value of debt securities 1.09 (1.29) On foreign currency translation (23.14) Income tax expense reported in the other comprehensive income [(i)+(ii)] 2.20 241.07 15.46 212.33 86.87 (c) Retained earnings: Current income tax (2.29) Net gain/(loss) on cost of hedging reserve (B) Deferred tax expense/(income): 75.05 (2.98) (827.76) (380.73) (b) Income tax expense reported in the consolidated Statement of Profit and Loss [(i)+(ii)] Other Comprehensive Income (OCI) section: 2148.55 2436.96 (i) Items not to be reclassified to profit or loss in subsequent periods: Current tax expense/(income): On remeasurement of defined benefit plans (5.95) (3.64) (5.95) (3.64) (ii) Items to be reclassified to profit or loss in subsequent periods: (A) Current tax expense/(income): Forward covers settled, retained in hedging reserve (22.79) 75.05 (22.79) Deferred tax Income tax expense reported in retained earnings (135.15) 134.85 (B) Long term capital gains exempt from tax (ii) Tax on expense not tax deductible: (A) Corporate Social Responsibility (CSR) expenses (B) Expenses in relation to exempt income (C) Tax on employee perquisites borne by the Group (iii) Weighted deduction on R&D expenditure and deduction u/s 801A (iv) Tax effect on impairment losses recognised and on which deferred tax asset (DTA) is not recognised (v) Effect of previously unrecognised tax losses used to reduce tax expense (244.71) (43.32) (3.27) (48.83) 42.37 46.97 20.51 50.75 3.38 2.67 (377.63) (A) Dividend income and interest on tax free bonds (60.26) 2775.43 (c)=(a)*(b) (0.30) LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [50] (contd.) (b) Reconciliation of Income tax expense and accounting profit multiplied by domestic tax rate applicable in India: crore Sr. no. Particulars Profit before tax Corporate tax rate as per Income tax Act, 1961 Tax on accounting profit |(d) (i) Tax on Income exempt from tax: 2016-17 2015-16 8887.36 8019.62 34.61% 34.61% 3075.74 (377.75) (767.50) 2817.69 2016-17 2015-16 Basic EPS Profit after tax as per accounts (crore) Weighted average number of equity shares outstanding Basic EPS (*) Diluted EPS Profit after tax as per accounts (crore) Weighted average number of equity shares outstanding А A B A/B A B A 6041.23 4232.88 93,23,49,030 93,07,61,648 64.80 6041.23 Basic and Diluted Earnings per share [EPS] computed in accordance with Indian Accounting Standard (Ind AS) 33 "Earnings per Share": Particulars 45.48 NOTE [49] D. As at 31-3-2017 Minimum lease payments As at 31-3-2016 As at 1-4-2015 226.14 219.71 125.82 695.13 815.52 374.21 290.58 351.54 358.82 1211.85 1386.77 858.85 [b] The lease agreements provide for an option to the Group to renew the lease period at the end of the non- cancellable period. There are no exceptional / restrictive covenants in the lease agreements. C. Lease rental expense in respect of operating leases: 475.34 crore (previous year: 448.35 crore) Contingent rent recognised in the Statement of Profit and Loss: Nil (previous year: Nil) (278.96) 4232.88 Add: Weighted average number of potential equity shares on account of employee stock options (a) Major components of tax expense/(income): 426 Sr. no. (a) Particulars Consolidated Statement of Profit and Loss: Profit and Loss section: (i) Current Income tax : Current income tax expense Tax expense of prior periods (ii) Deferred Tax: Tax expense on origination and reversal of temporary differences Effect of previously unrecognised tax losses and tax offsets used to reduce tax expense crore 2016-17 2015-16 2975.63 0.68 2976.31 2780.73 36.96 Disclosure pursuant to Ind AS 12 "Income Taxes" 93,23,49,030 93,07,61,648 NOTE [50] 425 C Weighted average number of equity shares outstanding for diluted EPS D=B+C 31,60,400 93,55,09,430 43,02,265 93,50,63,913 Diluted EPS (*) A/D 64.58 45.27 Face value per share (*) 2.00 2.00 The following potential equity shares are anti-dilutive and are therefore excluded from the weighted average number of equity shares for the purpose of diluted earning per share Particulars 2016-17 63,46,986 2015-16 63,46,986 Note: On May 29, 2017, the Board of Directors has recommended for the approval of shareholders, the issue of bonus equity shares in the ratio 1:2 (one bonus equity share of 2 each for every two equity shares of 2 each held). The effect of the said bonus issue will be given in the year 2017-18 post approval by shareholders. Notes forming part of the Consolidated Financial Statements (contd.) 97.25 (153.54) (103.22) (vi) Tax effect of losses of current year on which no deferred tax benefit is recognised (vii) Effect of tax paid on foreign source income which is exempt from tax in India u/s 10AA (409.98) 1.48 34.41 (1.10) 1252.20 Offsetting of deferred tax liabilities with deferred tax(assets) (991.91) (641.25) Net Deferred tax liabilities 635.48 610.95 Deferred tax (assets): Provision for doubtful debts, advances and non-performing assets debited to Statement of Profit and Loss (1037.33) (537.95) Unpaid statutory liabilities (215.72) (20.93) Unabsorbed depreciation 1627.39 (412.78) 258.50 Deferred tax liabilities: (1.10) Difference between book and tax depreciation Disputed statutory liabilities paid and claimed as deduction for tax purposes but not debited to Statement of Profit and Loss 1105.00 (315.85) 1.48 790.63 116.03 36.05 0.01 152.09 Gain on Derivative Transactions to be offered for tax purposes in the year of transfer/ settlement 6.17 4.78 34.41 45.36 Other items giving rise to temporary differences 400.19 (134.96) (0.01) 264.12 Deferred tax liabilities: Carried forward tax losses I Net Deferred tax (assets) 229.47 (19.01) 134.85 (2363.82) (417.78) 134.85 14.61 36.85 49.51 (1.20) (1.43) 379.53 206.66 (1.43) (2377.40) 991.91 (1371.91) 641.25 (1736.15) Net deferred tax liability/(assets) (736.43) (827.76) 134.85 14.61 50.99 241.07 (2.53) (1125.20) 560.50 Offsetting of deferred tax (assets) with deferred tax liabilities (323.30) 199.64 Deferred tax (assets): (32.15) Utilised MAT credit (382.57) (300.01) 14.61 8.96 (1575.28) 0.01 (236.64) 3.69 (150.59) (123.66) (659.01) Loss on derivative transactions to be claimed for tax purposes in the year of transfer/ settlement (133.56) (53.90) 207.86 │ 20.40 Difference between book and tax depreciation (88.03) 55.88 Other items giving rise to temporary differences crore 31-3-2017 31-3-2016 As at 1-4-2015 crore Expiry year Tax losses (revenue loss on which no tax asset is created) Amount of losses having expiry Amount of losses having no expiry Tax losses (capital loss on which no tax asset is created) Unused tax credits [Minimum Alternate Tax (MAT) credit not recognised] Total 2122.59 AY 2017-36 133.78 249.46 AY 2020-24 3235.46 AY 2017-38 513.33 2931.96 AY 2022-26 2824.45 AY 2017-37 336.96 1411.15 AY 2020-25 145.40 AY 2029-33 150.62 AY 2024-27 51.26 AY 2024-26 6826.15 4723.18 2557.09 (ii) Unrecognised deductible temporary differences for which no deferred tax asset is recognised in Balance Sheet Particulars As at 31-3-2016 crore Expiry year crore As at 31-3-2017 crore Expiry year Unused tax losses and unused tax credits for which no deferred tax asset is recognised in Balance Sheet 398.43 440.91 (198.61) (231.88) (viii) Effect of tax benefit on business combination under common control (228.69) (ix) Tax effect on various other Items (282.68) (173.56) Total effect of tax adjustments [(i) to (ix)] (927.19) (338.47) Tax expense recognised during the year Effective tax Rate (e)=(c)+(d) (f)=(e)/(a) 2148.55 2436.96 24.18% 30.39% (c) (i) Particulars as at Sr. no. Charge/ (credit) to Retained MAT credit utilised Effect Charge/(credit) due to to other Exchange Difference Deferred tax acquisition/ comprehensive liabilities/ Particulars (assets) of Profit Earnings disposal income (assets) as at and Loss Statement As at 31-3-2017 As at 31-3-2016 As at 1-4-2015 liabilities/ Deferred tax (a) Deductible temporary differences towards provision for diminution in value of investments on which DTA not created 350.47 69.47 46.04 (b) Temporary differences arising out of revaluation of tax base of assets (on account of indexation benefit) 2164.85 1920.13 1680.94 Total 2515.32 1989.60 1726.98 427 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [50] (contd.) (d) (i) Major components of Deferred Tax Liabilities and Deferred Tax Assets: 428 crore Charge/ (credit) to 6.42 Total 3. 23.21 119.27 228.89 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [47] (contd.) As at 31-3-2017 Sr. 13.46 Amount Category of balance/relationship/major parties Amounts for major parties (v) Due to directors* (Key management personnel) Mr. A. M. Naik Mr. K. Venkataramanan $ Mr. M. V. Kotwal $$ Mr. S. N. Subrahmanyan no. 21.54 122.24 96.03 228.89 282.66 421.59 27.24 26.96 24.62 7.87 18.97 7.78 6.71 19.18 17.92 0.01 0.01 1758.41 1753.05 1759.06 23.21 119.27 68.84 36.97 Mr. R. Shankar Raman Mr. Shailendra Roy Mr. D. K. Sen # Mr. M. V. Satish ## 8.73 7.41 6.90 6.91 5.84 4.40 4.48 4.93 2.13 4.32 0.73 55.58 51.30 53.83 Joint ventures, including: 3386.85 3385.37 517.08 L&T-MHPS Boilers Private Limited 9.90 210.22 11.29 2.04 Total (vi) Revenue commitment given As at 31-3-2016 Amounts for major parties Amounts for major parties As at 1-4-2015 Amounts for major crore Amounts for major parties parties 55.58 51.30 53.83 18.24 17.96 18.19 3.77 7.39 4.91 606.29 564.77 877.65 431.85 (ix) Rent paid, including lease rentals under leasing/hire purchase arrangements Total L&T-Chiyoda Limited Associates, including: L&T-Sargent & Lundy Limited L&T-Gulf Private Limited Joint ventures, including: (viii) Charges paid for miscellaneous services L&T Infrastructure Development Projects Limited Total Joint venture: (vii) Sale of investments to 2041.57 Total 2041.57 L&T Infrastructure Development Projects Limited 2041.57 Joint venture: Amount Amounts for major parties Joint venture: Amount Amounts for major parties L&T Infrastructure Development Projects Limited Total 3.62 2.67 2.47 10.46 6.41 21.54 21.54 21.54 (xi) Dividend received Total L&T-Chiyoda Limited Associate: L&T Special Steels and Heavy Forgings Private Limited L&T Sapura Shipping Private Limited (x)(b) Charges recovered for deputation of employees to related parties Joint ventures, including: L&T Infrastructure Development Projects Limited Total (x)(a) Charges incurred for deputation of employees from related parties Joint venture: Mr. K. Venkataramanan $ & Ms. Jyothi Venkataramanan Key management personnel 2232.20 Nature of transaction/relationship/major parties Sr. no. L&T-MHPS Turbine Generators Private Limited Associates, including: L&T-Chiyoda Limited L&T Camp Facilities LLC Key management personnel: Mr. K Venkataramanan$ & Ms. Jyothi Venkataramanan Total (iv) Advances received in the capacity of supplier of goods/services classified as "advances from customers" in the Balance Sheet Joint ventures, including: L&T Infrastructure Development Projects Limited L&T Deccan Tollways Limited L&T-MHPS Boilers Private Limited Total 1731.17 1726.09 1734.43 1185.55 215.18 L&T-MHPS Boilers Private Limited (vi) Purchase of investments from Private Limited Joint ventures, including: 2015-16 2016-17 crore NOTE [47] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 547.27 14.91 15.19 31.70 11.40 6.42 8.19 18.54 2.65 7.79 1944.92 1741.75 1508.72 (iii) Loans and advances recoverable (including loans and advances towards financing activities) L&T Special Steels and Heavy Forgings 2254.94 300.05 L&T-MHPS Turbine Generators Private 424 crore Minimum lease payments Sr. no. Particulars As at 31-3-2017 1. Payable not later than 1 year 0.67 As at 31-3-2016 0.13 As at 1-4-2015 1.76 As at 31-3-2017 0.60 Present value of minimum lease payments As at 31-3-2016 0.11 As at 1-4-2015 2. Payable later than 1 year and not later than 5 years The minimum lease rentals and the present value thereof in respect of assets acquired under finance leases are as follows: 0.22 Assets acquired on finance lease comprises of motor vehicles and land. The motor vehicles leases have a primary period, which is fixed and non-cancellable. The Group has an option to renew the lease for a secondary period. The agreements provide for revision of lease rentals in the event of changes in (a) taxes, if any, leviable on the lease rentals (b) rates of depreciation under the Income tax Act, 1961 and (c) change in the lessor's cost of borrowings. There are no exceptional/ restrictive covenants in the lease agreements. A. 1. Receivable not later than 1 year 2. 3. Receivable later than 1 year and not later than 5 years Receivable later than 5 years Total crore As at 31-3-2017 82.73 74.47 1.45 158.65 As at 31-3-2016 As at 1-4-2015 136.08 212.16 9.68 357.92 177.76 208.92 27.31 413.99 Where the Group is a Lessee: (b) (i) Finance leases: B. no. 0.21 0.19 0.34 39.64 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [48] (contd.) C. Contingent Rent recognised in the Statement of Profit and Loss: Nil (previous year Nil) (ii) Operating leases: A. The Group has taken various commercial premises and plant and equipment under cancellable operating leases. B. [a] The Group has taken certain assets on non-cancellable operating leases, the future minimum lease payments in respect of which are as follows: Sr. no. Particulars 1. Payable not later than 1 year 2. Payable later than 1 year and not later than 5 years 0.85 6.71 payments 64.71 0.17 3. Payable later than 5 years 0.13 0.15 95.88 0.06 0.06 39.64 Total (1+2+3) 1.02 0.49 104.35 0.85 0.34 39.64 Less: Future finance charges 0.17 0.15 Present value of minimum lease Payable later than 5 years Particulars The Group has given certain assets under non-cancellable operating lease, the future minimum lease payments receivable in respect of which are as follows: 3390.74 3388.90 522.90 (vii) Commitment to Fund Joint venture: Limited L&T Infrastructure Development Projects Total (viii) Revenue commitment received Joint ventures, including: L&T Infrastructure Development Projects Limited L&T Deccan Tollways Limited L&T Krishnagiri Walajahpet Tollway Limited L&T BPP Tollway Limited Total 405.00 1443.41 0.65 405.00 2.13 0.80 Limited 1086.15 1066.91 177.16 Associates, including: 3.89 3.53 5.82 L&T-Chiyoda Limited 0.96 1.29 0.78 JSK Electricals Private Limited 3.10 Salzer Electronics Limited 1.67 Feedback Infra Private Limited Magtorq Private Limited Total 1.59 Sr. 1443.41 1443.41 The total gross investment in these leases and the present value of minimum lease payments receivable are as under: crore Minimum Lease Payments Present value of minimum lease Sr. no. Particulars As at 31-3-2017 1. Receivable not later than 1 year 2. 3. Receivable later than 1 year and not later than 5 years Receivable later than 5 years Gross investment in lease (1+2+3) Less: Unearned finance income Present value of minimum lease payments receivable payments As at As at As at As at 31-3-2016 1-4-2015 31-3-2017 31-3-2016 1493.73 1553.53 1508.37 309.72 332.12 280.26 5194.38 6644.52 6994.47 771.25 923.29 1108.00 19641.82 19696.09 19855.00 8143.14 8318.78 7904.34 26329.93 27894.14 28357.84 9224.11 9574.19 9292.60 17105.82 18319.95 19065.24 9224.11 9574.19 9292.60 As at 1-4-2015 (ii) Operating leases: Assets given under leases mainly include power plant where the Group has agreed to manufacture/construct an asset and convey, in substance, a right to the beneficiary to use the asset over a major part of its economic life, for a pre-determined consideration. 405.00 Finance leases: (a) Where the Group is a Lessor: 138.67 1000.60 2225.39 60.00 25.95 593.65 350.30 1236.11 883.80 13.65 26.27 138.67 1000.60 2225.39 $ Retired on September 30, 2015 $$ Retired on August 26, 2015 #Appointed w.e.f. October 1, 2015 ##Appointed w.e.f. January 29, 2016 "Major parties" denote entities who account for 10% or more of the aggregate for that category of balance during respective period. *Includes commission due to non-executive directors 3.55 crore (as at 31-3-2016 3.47 crore; as at 1-4-2015 3.22 crore) 423 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [48] Disclosure in respect of Leases pursuant to Indian Accounting Standard (Ind AS) 17 "Leases": (i) 611.61 533.93 162.39 NOTE [53] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) 431 ** includes liquidated damages/backwork charges adjusted against revenue/manufacturing, construction and operating expenses during the year. * includes 55.32 crore on account of non-controlling interest and 200.15 crore on account of share in loss of joint ventures # includes provision used during the year *8.67 crore 1409.48 62.25 763.23 319.43 9.14 209.86 (b) Nature of provisions: 45.57 6 0.91 0.01 0.45 0.45 and change in discount rate Additional provision for unwinding of interest 5 (0.09) 0.01 (0.10) Translation adjustments Balance as at 31-3-2017 (1+2+3+4+5) 4 (i) (ii) Expected tax liability in respect of indirect taxes represents mainly the differential sales tax liability on account of non- collection of declaration forms for the period prior to five years. 33 L&T Infrastructure Development Projects Lanka (Private) Limited L&T Sambhalpur-Rourkela Tollway limited 31 29 L&T Deccan Tollways Limited 27 L&T BPP Tollway Limited 25 L&T Krishnagiri Walajahpet Tollway Limited 23 L&T Western India Tollbridge Limited 21 Vadodara Bharuch Tollway Limited 19 Panipat Elevated Corridor Limited 17 L&T Port Kachchigarh Limited 15 PNG Tollway Limited 13 L&T Halol-Shamlaji Tollway Limited* Product warranties: The Group gives warranties on certain products and services, undertaking to repair or replace the items that fail to perform satisfactorily during the warranty period. Provision made as at March 31, 2017 represents the amount of the expected cost of meeting such obligations of rectification/replacement. The timing of the outflows is expected to be within a period of five years from the date of Balance Sheet. L&T Infrastructure Development Projects Limited 7 L&T Howden Private Limited 5 Larsen & Toubro Electromech LLC 3 L&T Sapura Shipping Private Limited 1 L&T Special Steels & Heavy Forgings Private Limited 11 (a) The Group, based on shareholders' agreements and other relevant documents, has assessed that though the Group has voting power in excess of 50% in the companies listed below, it does not have unilateral control over their relevant activities (e.g. operating and financial decision making). Accordingly, these companies have been classified as joint ventures. Disclosure pursuant to Indian Accounting Standard (Ind AS) 112 "Disclosure of Interest in other entities" NOTE [54] (c) Disclosure in respect of contingent liabilities is given in Note 32. (vi) Liquidated damages represent the estimated cost the Group is likely to incur due to delay in delivery of products as per its contract obligations and accrued on the basis of advice from distributors/customers. (v) Constructive obligation represents losses absorbed by the group for share of joint venturer/ non-controlling interests in joint ventures/ subsidiaries and own share of losses over and above the investments. (iii) Provision for litigation related obligations represents liabilities that are expected to materialise in respect of matters in appeal. (iv) Contractual rectification cost represents the estimated cost the Group is likely to incur during defect liability period as per the contract obligations in respect of completed construction contracts accounted under Indian Accounting Standard (Ind AS) 11 "Construction Contracts". 9 L&T-MHPS Turbine Generators Private Limited * Effective holding 47.75% (31-3-2016: 97.45%, 1-4-2015: 97.45%) (143.13) 30.83 (10.50) NOTE [53] 1123.81 13.88 1495.60 Total 85.77 12.85 1450.08 Other liabilities 0.33 Tax liabilities (Net) 0.46 Disclosures pursuant to Indian Accounting Standard (Ind AS) 37 "Provisions, Contingent Liabilities and Contingent Assets": (a) Movement in provisions: 1.03 Provisions 34.33 19.87 Trade payables 1002.14 21.00 Borrowings Liabilities associated with group(s) of assets classified as held for sale 1671.35 1579.46 1649.37 Total 4.32 637.37 crore Sr. No. 914.42 41.92 507.76 255.47* 160.84 272.72 (114.15) (6.04) (12.44) Provision used/reversed during the year # 3 59.30 19.05 2 Additional provision during the year 8.69 Class of provisions 156.60 Balance as at 1-4-2016 1 obligation constructive towards Total Others** Provision Contractual rectification cost- construction contracts Litigation related obligations Product Expected tax warranties liability in respect of indirect taxes Particulars 38.61 16.18 2 L&T-Gulf Private Limited L&T Sapura Offshore Private Limited (0.07) 4.50 239.84 91.08 (37.13) 2394.10 2015-16 2016-17 2015-16 773.35 4042.46 2016-17 Limited) (0.65) L&T Finance Limited* crore Dividend to non-controlling interest Profit/(loss) allocated to non-controlling interest Total comprehensive income Other comprehensive income Profit/(loss) for the year Revenue Particulars 434 Summarised Statement of Profit and Loss (i) (c) Disclosure of subsidiaries having material non-controlling interest: L&T Finance Limited (formerly known as Family Credit NOTE [54] (contd.) (32.63) 239.19 (46.03) (4.88) 215.95 208.45 1153.51 (21.51) 119.71 (0.14) 120.23 (13.94) 137.30 12.10 Profit/(loss) allocated to non-controlling interest 428.50 52.47 Total comprehensive income 856.17 2016-17 2015-16 6329.75 5699.70 937.56 2016-17 2015-16 60.82 47.25 120.37 213.33 91.01 2016-17 2015-16 2695.39 2461.36 53.64 428.47 0.03 Other comprehensive income Profit/(loss) for the year Revenue Larsen and Toubro Infotech Limited L&T Finance Holdings Limited crore L&T Infrastructure Finance Company Limited Particulars * The Company is merged with Family Credit Limited (subsequently renamed as L&T Finance Limited) 79.37 28.58 196.60 (1.17) 4 Notes forming part of the Consolidated Financial Statements (contd.) Revenue from operations During the year 2015-16, the Group's continuing interest has been reduced on account of dilution due to exercise of ESOP by 5.04% in Larsen & Toubro Infotech Limited and by 1.27% in L&T Finance Holdings Limited due to exercise of ESOP and preferential allotment of equity shares. The proceeds on dilution of 248.16 crore were received. An amount of 274.09 crore (being the proportionate share of the carrying amount of the net assets of Larsen & Toubro Infotech Limited and L&T Finance Holdings Limited) has been transferred to non-controlling interests. Further, ₹ 25.93 crore being the difference between the increase in the non-controlling interest and the consideration received has been debited to other equity. During the year 2016-17, the Group's continuing interest has been reduced on account of dilution due to exercise of ESOP by 0.09% and 0.38% in L&T Finance Holdings Limited and in Larsen & Toubro Infotech Limited respectively. The proceeds on dilution of 11.93 crore were received as share issue consideration. An amount of 21.77 crore (being the proportionate share of the carrying amount of the net assets of L&T Finance Holdings Limited and in Larsen & Toubro Infotech Limited) has been transferred to non-controlling interest. Further, 9.84 crore being the difference between the increase in the non- controlling interest and the consideration received has been debited to other equity. (ii) On account of dilution During the year 2015-16, the Group has sold 4.97% stake in L&T Finance Holdings Limited. The proceeds on disposal of * 595.37 crore were received as sale consideration. An amount of 331.49 crore (being the proportionate share of the carrying amount of the net assets of L&T Finance Holdings Limited) has been transferred to non-controlling interest. Further, * 263.88 crore being the difference between the consideration received and the increase in the non-controlling interest has been credited to other equity. During the year 2016-17, the Group has sold 10.30% stake in Larsen & Toubro Infotech Limited and 10.23% stake in L&T Technology Services Limited. The proceeds on disposal of 2069.84 crore were received as sale consideration. An amount of 360.50 crore (being the proportionate share of the carrying amount of the net assets of Larsen & Toubro Infotech Limited and L&T Technology Services Limited) has been transferred to non-controlling interest. Further, 1709.34 crore being difference between the consideration received and the increase in the non-controlling interest has been credited to other equity. (i) On account of divestment of part stake (b) Change in the Group's ownership interest in a subsidiary (without ceding control) NOTE [54] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 432 34 Raykal Aluminium Company Private Limited (iii) The effect of divestment with ceding of control in subsidiaries during the period is as under: L&T IDPL Trustee Manager Pte. Ltd. 28 Western Andhra Tollways Limited 30 Kudgi Transmission Limited 26 Devihalli Hassan Tollway Limited 24 L&T Interstate Road Corridor Limited 22 L&T Transportation Infrastructure Limited 20 Krishnagiri Thopur Toll Road Limited 18 L&T Samakhiali Gandhidham Tollway Limited 16 L&T Chennai-Tada Tollway Limited 14 L&T Rajkot-Vadinar Tollway Limited 12 Ahmedabad-Maliya Tollway Limited 10 L&T Kobelco Machinery Private Limited 8 L&T-MHPS Boilers Private Limited 6 L&T-Sargent & Lundy Limited 32 433 crore Name of company Revenue from operations Revenue from operations Revenue from operations 133.43 78.45 22.97 0.86 235.71 498.24 Total Hyderabad International Trade Expositions Limited 6 L&T Hitech City Limited 5 L&T Infocity Limited 4 Sr. no. CSJ Infrastructure Private Limited Revenue from operations 95.81 L&T South City Projects Limited 2 Exceptional Items Line item in Statement of Profit and Loss in which the gain/(loss) is recognised 2015-16 Effect on consolidated profit/(loss) after non- controlling interest 402.43 L&T General Insurance Company Limited 1 2016-17 3 42.91 Other assets 21.43 0.21 | 2 3.42 (184.97) (201.23) - Unutilised MAT credit 78.06 (401.36) - Carried forward tax losses (8.63) (346.63) (57.52) (1037.33) Unabsorbed depreciation (190.24) Unpaid statutory liabilities (214.86) (822.47) Statement of Profit and Loss and non-performing assets debited to Provision for doubtful debts, advances Deferred tax (assets): 635.48 659.49 Net Deferred tax liabilities (991.91) (25.48) (705.73) (215.72) (323.30) 3.42 (670.92) (1715.63) Deferred tax (assets): 229.47 (11.44) 0.91 1.54 22.91 215.55 differences Other items giving rise to temporary (412.78) (88.03) (13.12) (85.28) depreciation Difference between book and tax (133.56) 26.35 13.17 (173.08) transfer/settlement claimed for tax purposes in the year of Loss on derivative transactions to be (382.57) 10.37 3.49 deferred tax(assets) 1627.39 depreciation Difference between book and tax 31-3-2016 (assets) as at comprehensive income disposal/Held for sale 1-4-2015 Profit and Loss (assets) as at liabilities/ crore Deferred tax Exchange Difference 807.55 Charge/ (credit) to other Effect due to MAT credit utilised to Statement of liabilities/ Deferred tax Charge/(credit) Deferred tax liabilities: Particulars (ii) Major components of Deferred Tax Liabilities and Deferred Tax Assets: NOTE [50] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 44.68 acquisition/ Offsetting of deferred tax liabilities with 323.32 1105.00 9.64 (11.80) (25.86) 290.19 1365.22 Deferred tax liabilities: 400.19 9.64 0.01 (41.52) 432.06 differences (25.87) Other items giving rise to temporary (11.80) (5.53) 23.50 transfer/settlement offered for tax purposes in the year of Gain on Derivative Transactions to be 116.03 13.92 102.11 but not debited to Statement of Profit and Loss claimed as deduction for tax purposes Disputed statutory liabilities paid and 6.17 27.26 (11.44) (2363.82) (c) The details of assets/ disposal group classified as held for sale and liabilities associated thereto are as under: (b) The Group has identified the above as held for sale to optimise the capital allocation and focus on core business. The sale is envisaged through transfer of title deeds for identified assets held for sale and in case of disposal group, through business transfer agreement/divestment of stake in the subsidiary company. The proposed sale are expected to be completed within 1 year from the respective reporting dates. NOTE [52] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO Others Others Others Net assets at Chandigarh (CSJ Infrastructure Private Limited) Foundry business (Casting manufacturing unit) Non-current assets at Talegaon (L&T Cutting Tools Limited) Reportable Segment Particulars Assets/Disposal Group Others Others Land at Vizag (L&T Realty Limited) Non-current assets at Talegaon (L&T Cutting Tools Limited) 430 2.83 3.34 3.73 7.07 crore Reportable Segment Developmental Projects Port operation (L&T Shipbuilding Limited) The Group has following non-current assets/disposal group recognised as held for sale as at April 1, 2015: Assets/Disposal Group crore As at 31-3-2016 0.74 Cash and cash equivalents 44.23 2.06 12.85 Trade receivable 117.51 1.32 2.29 Inventories 25.26 Tax assets (net) As at 31-3-2017 0.22 1.35 Other intangible assets 688.70 309.17 448.65 1573.97 1589.23 Investment property Capital work-in-progress Property, plant and equipment Group(s) of assets classified as held for sale As at 1-4-2015 2.11 The Group has following non-current assets/disposal group recognised as held for sale as at March 31, 2016: Financial Services Others Current Liabilities Trade receivables Short term loans Current Assets Non-Current Assets (b) Assets acquired and liabilities recognised on the date of acquisition: (a) On November 30, 2016, the Group acquired 100% stake in AugmentIQ Data Sciences Private Limited, a software development company in India. Disclosures pursuant to Indian Accounting Standard (Ind AS) 103 "Business Combinations": NOTE [51] Notes forming part of the Consolidated Financial Statements (contd.) 429 (736.43) Trade Payables (1.80) (22.37) 3.42 (380.73) (350.41) Net deferred tax liability/(assets) (1371.91) (1009.90) Net Deferred tax (assets) 991.91 705.73 deferred tax liabilities Offsetting of deferred tax (assets) with 15.46 Other current liabilities Deferred tax liability on acquisition Net Assets Others Infrastructure Developmental Projects Reportable Segment Non-current Assets (L&T Financial Consultants Limited) Non-current Assets (L&T Aviation Services Private Limited) Non-current assets at Talegaon (L&T Cutting Tools Limited) Ready Mix Concrete unit (Larsen & Toubro Readymix & Asphalt Concrete Industries LLC) Port operation (Marine Infrastructure Developer Private Limited) (a) The Group has following non-current assets/disposal group recognised as held for sale as at March 31, 2017: Assets/Disposal Group Disclosures pursuant to Indian Accounting Standard (Ind AS) 105 "Non-current assets held for sale and discontinued operations": 3.73 (4.11) (1.48) (2.29) (0.34) 3.50 2.48 1.02 4.34 crore NOTE [52] Goodwill (Group's share) Goodwill Less: Fair value of net assets acquired Purchase consideration paid (c) Calculation of goodwill: 810.14 11.09 1.11 46.75 Depreciation and amortisation 5.62 0.55 0.12 0.12 41.42 27.57 Interest Income 3244.48 2687.03 102.43 129.96 (55.82) 353.39 1721.39 2490.66 Revenue 2015-16 2016-17 2015-16 2016-17 2015-16 2016-17 2015-16 2016-17 Projects Limited (consolidated) 221.61 L&T Infrastructure Development (53.22) (23.28) (254.65) (61.01) (15.02) 199.01 221.28 Profit from continuing operations (5.30) 55.44 0.85 (1.76) (74.62) (110.85) (14.62) Income tax (1389.94) (153.28) (171.58) (3.70) (3.28) (46.24) (28.71) Interest expense (478.43) (356.59) (51.39) (51.10) (1527.59) (284.91) L&T Special Steels and Heavy Forgings Private Limited LLC Closing net assets (2.49) 12.89 Other Adjustments (0.05) financial instruments Equity component of other Dividends paid (0.10) (1.06) (0.48) (1.75) (4.40) 929.88 3.14 (22.51) Other comprehensive income 223.03 stake dilution retained earnings due to Adjustment in opening (506.38) (867.23) (254.65) (284.91) (61.01) (15.02) L&T Infrastructure Development Projects Limited (consolidated) As at As at As at 31-3-2017 31-3-2016 1-4-2015 1626.46 2497.24 As at 1-4-2015 0.93 Particulars Group's share in % 731.16 51.00% L&T-MHPS Boilers Private Limited Larsen and Toubro Electromech crore (c) Summarised Statement of Profit and Loss of material Joint Ventures: * indicates disclosures not applicable. 1269.05 1764.73 378.58 54.85 141.81 (2010.36) (1961.58) 393.87 600.41 600.41 33.30 33.30 16.24 170.24 73.48 474.41 284.67 39.63 51.00% 82.14 372.89 474.24 Carrying amount Other adjusments Parent investment in Group Goodwill of above Investment in subsidiary out 531.22 (138.25) (126.37) (60.96) (641.09) (384.69) (99.30) 1355.90 1626.46 2497.24 51.00% 65.00% 65.00% 65.00% 74.00% 74.00% 74.00% 97.45% 97.45% 97.45% (39.63) (474.41) (284.67) (73.48) 1321.32 1584.99 2433.56 372.89 270.92 (89.86) (82.14) 474.24 Group's share (0.27) 89.86 270.65 (506.38) (867.23) Profit for the year (g) Commitments and contingent liabilities in respect of joint ventures/associates: Total Material joint ventures Particulars Sub-total Non-material joint ventures Non-material associates Share in profits/(loss) of joint ventures/associates (net): (f) 2066.65 1257.88 2772.90 438 Total 751.47 2238.97 Material joint ventures 526.95 506.41 533.93 Sub-total 398.00 412.60 429.93 Non-material joint ventures 128.95 1539.70 93.81 | Commitments-joint ventures: crore 169.57 Share of joint ventures' contingent liabilities in respect of a legal claim lodged against the entity Contingent liabilities-joint ventures: 0.02 0.07 Share of contingent liabilities incurred jointly with other investors of the associates Contingent liabilities-associates: 13121.59 4040.73 3472.09 Commitments to provide funding for joint venture's capital commitments, if called As at 1-4-2015 Particulars As at 31-3-2016 crore (990.16) (395.27) (988.75) Dividend to non-controlling interest (1.41) 37.32 0.87 25.98 (2.28) 2015-16 2016-17 11.34 As at 31-3-2017 104.00 Non-material associates 1-4-2015 (868.29) (506.48) (285.39) (256.40) (65.41) (11.88) 199.94 198.77 Total comprehensive income (1.06) (0.10) (0.48) 437 (1.75) 3.14 0.93 (22.51) Other comprehensive income (867.23) (506.38) (284.91) (254.65) (61.01) (15.02) 199.01 221.28 (4.40) Notes forming part of the Consolidated Financial Statements (contd.) NOTE [55] (contd.) (d) Financial Information in respect of individually immaterial joint ventures/associates: As at crore As at 31-3-2016 31-3-2017 Particulars As at (e) Carrying amount of investments in joint ventures/associates: * indicates disclosures not applicable. * (1.41) * 21.11 (22.52) 35.58 1.74 37.32 year Total comprehensive income for the Other comprehensive income for the year Profit/(loss) for the year Aggregate amounts of the Group's share of: 526.95 506.41 Aggregate carrying amount of investments in individually immaterial joint venture/ associates As at 1-4-2015 As at 31-3-2016 As at 31-3-2017 Particulars crore L&T Special Steels and Heavy Forgings Private Limited As at As at As at 1-4-2015 31-3-2017 31-3-2016 (384.69) (99.30) (60.96) (432.59) As at As at As at 1-4-2015 31-3-2017 31-3-2016 crore Particulars (iii) Summarised cash flows Accumulated non-controlling interest Net assets (g)=(c) + (f) Net non-current assets (f)=(d) - (e) Non-current liabilities (e) Non-current assets (d) Net current assets (c)=(a) - (b) Current liabilities (b) Current assets (a) 3709.59 999.34 Larsen and Toubro Infotech Limited As at 31-3-2017 296.49 565.35 626.13 763.46 750.25 9862.51 7186.43 4204.18 945.90 3640.53 4924.46 3824.72 1230.79 6221.98 2261.97 379.46 (284.89) 17252.66 16662.92 5469.31 18199.52 16508.97 14547.54 1028.15 743.69 2115.38 4441.16 3005.66 2494.84 4156.27 4155.71 1453.64 1430.90 514.88 470.24 Accumulated non-controlling interest 3174.27 (3047.71) Net non-current assets (f)=(d) -(e) Net assets (g)=(c) + (f) Non-current liabilities (e) 124.12 198.11 5235.60 4863.64 1204.01 1352.16 4031.59 3511.48 15151.81 As at 31-3-2016 3073.18 2015-16 2016-17 2015-16 (1520.67) (2479.31) 2016-17 Limited) Net increase/decrease) in cash and cash equivalents Cash flows from financing activities Cash flows from investing activities Cash flows from operating activities Particulars L&T Finance Limited* As at 1-4-2015 L&T Finance Limited (formerly known as Family Credit 12.43 24.26 1110.27 1071.02 1964.13 1871.58 99.87 17.44 1110.60 2976.89 467.97 1095.28 1122.70 1128.04 800.56 853.86 1866.29 901.97 960.59 1206.89 1814.45 1702.53 crore Non-current assets (d) Net current assets (c)=(a) - (b) Current liabilities (b) 1035.63 110.68 8456.81 139.72 1872.16 15535.18 2865.67 1492.76 2755.11 645.46 19567.33 2830.63 Non-current liabilities (e) Non-current assets (d) Net current assets (c)=(a) - (b) 6000.21 6610.94 7035.84 6721.62 8900.32 As at 1-4-2015 As at 31-3-2017 L&T Finance Limited* 13500.70 Current liabilities (b) Current assets (a) Particulars * crore (ii) Summarised Balance Sheet 20.25 20.57 (126.37) 37.26 As at 31-3-2016 6409.66 7662.07 Net non-current assets (f)=(d) - (e) Net assets (g)=(c) + (f) Current assets (a) As at 1-4-2015 As at 31-3-2016 As at 31-3-2017 As at 1-4-2015 Limited As at 31-3-2016 As at 31-3-2017 Particulars L&T Finance Holdings Limited L&T Infrastructure Finance Company crore NOTE [54] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO * The Company is merged with Family Credit Limited (subsequently renamed as L&T Finance Limited) 249.13 329.63 2157.83 2273.88 2047.15 1238.25 72.20 119.22 519.12 610.42 379.40 (35.04) 4032.15 6787.26 687.71 Accumulated non-controlling interest 1275.59 (2508.89) L&T Finance Limited (formerly known as Family Credit Limited) As at As at As at 31-3-2017 31-3-2016 1-4-2015 16255.81 2503.86 1859.57 1858.40 1719.85 (47.32) 258.85 429.55 120.86 trade payables) Financial liabilities (excluding Non-current liabilities 37.97 55.41 1206.16 951.31 1123.00 1128.93 809.81 4296.77 1665.08 2089.72 57.34 1471.65 192.00 229.08 311.06 345.33 1969.79 1732.75 203.96 2389.67 1983.54 338.98 2771.88 Total current liabilities 2351.47 703.80 trade payables) 116.25 1414.31 1090.96 754.40 3090.61 713.77 966.72 119.06 419.88 250.79 135.02 420.41 trade payables) Financial liabilities (excluding Current liabilities 179.62 31.71 0.52 0.68 1.12 2931.86 137.29 180.39 166.53 162.94 175.92 2860.97 625.54 770.21 212.10 167.05 163.62 177.04 5792.83 762.83 949.83 72.27 1384.95 1441.82 1493.38 17343.46 20553.94 17244.52 6.90 137.29 144.19 40.50 30.48 473.04 460.69 Other liabilities (including 535.02 843.02 Other liabilities (including 221.28 128.88 As at As at 31-3-2017 31-3-2016 731.16 531.22 199.01 Profit for the year Opening net assets Particulars L&T-MHPS Boilers Private Limited crore (b) Reconciliation of carrying amounts of material joint ventures: NOTE [55] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 941.16 16897.96 17552.15 13222.47 1355.90 1626.46 2497.24 731.16 531.22 (138.25) (126.37) (60.96) (641.09) (384.69) 929.88 Net assets 151.94 (11.56) 15.00 Non-controlling interest 18.75 433.72 484.64 369.92 959.91 17331.68 18036.79 13592.39 17.64 18.18 721.44 861.20 47.03 17.26 276.11 476.58 120.86 Total non-current liabilities trade payables) (99.30) Total non-current assets Larsen and Toubro Electromech LLC 2923.89 2530.65 (246.16) (46.96) 144.09 34.24 765.24 1249.72 (927.63) 2016-17 2015-16 2016-17 2015-16 (126.13) 456.28 (56.02) (400.16) 2016-17 2015-16 (315.99) (2434.40) (209.83) (375.11) 2605.91 587.03 Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Net increase/(decrease) in cash and cash Larsen and Toubro Infotech Limited (816.86) L&T Finance Holdings Limited Particulars crore NOTE [54] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) 435 * The Company is merged with Family Credit Limited (subsequently renamed as L&T Finance Limited) 24.10 1411.41 97.35 5085.55 170.25 (1204.17) L&T Infrastructure Finance Company Limited 61.21 19.62 (38.06) (203.60) 3287.60 296.56 371.81 431.93 23.09 147.16 2552.08 2098.72 Other assets Cash and cash equivalents Current assets As at 1-4-2015 L&T Infrastructure Development Projects Limited (consolidated) As at As at As at 1-4-2015 31-3-2017 31-3-2016 L&T Special Steels and Heavy Forgings Private Limited As at As at As at 1-4-2015 31-3-2017 31-3-2016 Larsen and Toubro Electromech LLC As at 31-3-2016 As at As at 1-4-2015 31-3-2017 As at As at 31-3-2017 31-3-2016 2991.04 L&T-MHPS Boilers Private Limited 9.16 Particulars 75.93 (17.38) equivalents NOTE [55] Total current assets (a) Summarised Balance Sheet for material joint ventures: 436 crore Disclosures pursuant to Indian Accounting Standard (Ind AS) 112 "Disclosure of Interest in other entities" - Joint Ventures and Associates Level 1 817.04 13927.43 23208.33 13927.43 23208.33 37952.80 Discounted cash flow 37952.80 crore Level 1 Level 2 Level 3 Total Valuation technique for level 3 items 21026.90 330.36 17297.30 141.36 17438.66 38324.20 Discounted cash flow 471.72 Discounted cash flow 38795.92 774.09 Level 3 15029.71 15029.71 Level 2 18465.15 18465.15 34268.95 Discounted cash flow 34268.95 crore 817.04 21357.26 774.09 Total 15692.74 As at 31-3-2016 Financial assets (financial services business): Loans Debentures and bonds Total Financial liabilities: Borrowings Total As at 1-4-2015 Financial assets (financial services business): Loans Debentures and bonds Total Financial liabilities: Borrowings crore Level 1 Level 2 Level 3 Total Valuation technique for level 3 items 19768.98 15352.56 86.26 340.18 19855.24 35121.54 Discounted cash flow 426.44 Discounted cash flow 35547.98 Total Valuation technique for level 3 items Level 1 31894.22 Level 3 Total Level 1 Level 2 Level 3 Total Financial assets: Investments at FVTPL: (i) Equity shares 6,12 48.00 Level 2 I 6,12 (iii) Mutual fund 6,12 10244.91 I I I I Total 751.20 799.20 (ii) Preference shares 16445.61 15448.61 Level 1 Level 3 330.93 101.53 432.46 Discounted cash flow Discounted cash flow 16776.54 15550.14 32326.68 - 13325.27 13325.27 15710.95 15710.95 Total 29036.22 Discounted cash flow 29036.22 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [57] (contd.) (f) Fair value hierarchy of financial assets and financial liabilities at fair value: crore Note As at 31-3-2017 As at 31-3-2016 As at 1-4-2015 Particulars Level 2 Valuation technique Level 2: Future cash flows discounted using G-sec/LIBOR rates plus corporate spread. Borrowings (iii) Financial liabilities measured at fair value through Profit or Loss Total Interest and Other income/expense: A. Dividend Income: (i) Dividend income from investments measured at FVTPL B. Interest Income: crore 2016-17 2015-16 748.63 196.12 III. (i) Financial assets measured at amortised cost 6908.92 (ii) Financial assets measured at fair value through Other Comprehensive Income | (iii) Financial assets measured at fair value through Profit or Loss 834.75 403.04 118.15 1.59 Sub-total (B) 8079.52 7313.55 C. Interest expense: 7126.62 (i) Financial liabilities measured at fair value through Other Comprehensive Income (ii) Financial liabilities measured at amortised cost No. Sr. 112.99 27.20 (27.28) 2. On forward contracts upon hedged future cash flows affecting the Profit or Loss or related assets or liabilities (39.86) 554.54 3. On embedded derivative contracts upon hedged future cash flows affecting the Profit or Loss or related assets or liabilities (37.64) (38.88) Sub-total (ii) 35.49 Particulars 488.73 330.67 (409.60) B. Allowance/(reversal) for ECL recognised during the year in the Statement of Profit and Loss Total [II]=(A+B) (50.45) (18.04) 280.22 (427.64) LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [57] (contd.) Net gains recognised in Other Comprehensive Income [II]=[(i)-(ii)] Financial liabilities: (401.21) (528.20) (6209.77) 5.69 (6605.29) 35547.98 38324.20 466.25 471.72 38106.97 38795.92 31908.34 31894.22 426.43 432.46 32334.77 32326.68 Financial liabilities: Borrowings Total 22,26,27 37952.80 37013.30 37952.80 33466.61 34268.95 37013.30 35436.24 33466.61 34268.95 28304.58 29036.22 29036.22 Note: The carrying amounts of trade and other receivables, cash and cash equivalents, trade and other payables are considered to be the same as their fair values due to their short term nature. The carrying amounts of loans given and borrowings taken for short term or at floating rate of interest are considered to be close to the fair value. 445 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [57] (contd.) (e) Disclosure pursuant to Ind AS 113 "Fair Value Measurement" - Fair value hierarchy of financial assets and financial liabilities measured at amortised cost: 446 As at 31-3-2017 Financial assets (financial services business): Loans Debentures and bonds 28304.58 Sub-total (C) Total 431.14 (5997.66) (27.85) (6553.71) D. Fee income: Financial assets that are not at fair value through profit or loss Total [II] =(A+B+C+D) (d) Fair value of financial assets and financial liabilities measured at amortised cost: Particulars Financial assets (financial services business): 227.87 2450.73 86.02 1041.98 crore As at 31-3-2017 426.44 Note Fair value As at 31-3-2016 Carrying amount As at 1-4-2015 Fair value Carrying amount Fair value Loans Debentures and bonds 7,8,16,17 6,12 35005.10 35121.54 37640.72 Carrying amount 498.63 Financial liabilities at FVTPL: 148.07 23,29 479.71 479.71 245.98 245.98 566.39 566.39 (b) Embedded derivative financial instruments designated as cash flow hedges 23,29 83.98 83.98 35.90 35.90 78.64 78.64 Total - 719.62 - 71962 - 458.89 - 458.89 - 73769-737.69 Valuation technique and key inputs used to determine fair value: A. Level 1: Mutual funds, bonds, debentures and government securities - Quoted price in the active market B. Level 2: (a) Derivative instruments - Present value technique using forward exchange rates at the end of reporting period. (b) Preference shares – Future cash flows are discounted using G-sec rates as at reporting date. as cash flow hedges instruments designated (a) Derivative financial (ii) Designated as at FVTOCI: Level 3 Total Financial Liabilities: (i) Designated as at FVTPL: (a) Derivative instruments not designated as cash flow hedges (b) Embedded derivative instruments not designated as cash flow 23,29 22.73 (g) Movement of items measured using unobservable inputs (Level 3): 22.73 27.00 48.47 48.47 hedges 23,29 133.20 133.20 150.01 150.01 44.19 44.19 27.00 448 crore Equity shares Addition during the year 253.52 6.02 Disposal during the year (62.50) Gains/(losses) recognised in Profit or Loss (0.95) Balance as at 31-3-2017 751.20 (30.26) 70.88 858.17 1243.42 11203.09 (14.84) (5372.28) 105.06 2191.81 157.62 5372.28 7116.00 411.19 13117.24 (7.74) (5457.36) (15.62) 58.23 11203.09 617.13 14834.11 1. On government securities, bonds, debentures etc. upon sale 229.30 Level 2 498.63 83.57 Particulars Preference shares Balance as at 1-4-2015 251.87 222.72 Addition during the year 237.06 Debt instruments 625.09 139.84 Loans 2155.17 5372.28 Other investments 244.04 7.10 Balance as at 31-3-2016 Total Disposal during the year (56.03) (3.02) (2155.17) (8.52) 5756.28 (2222.74) Gains/(losses) recognised in Profit or Loss 9.70 (9.07) 96.26 (13.32) 3498.89 Level 1 Total Level 3 62.33 62.33 43.02 43.02 44.88 44.88 (vi) Embedded derivative instruments not designated as cash flow hedges 9,18 I 9,18 (vii) Other investments 204.76 140.71 140.71 617.13 617.13 18.49 229.30 247.79 I | 63.56 63.56 204.76 23.19 244.04 267.23 hedges (v) Derivative instruments not 251.87 399.94 70.88 70.88 157.62 157.62 222.72 222.72 10244.91 4861.49 4861.49 4348.86 designated as cash flow 4348.86 government securities, bonds 6,7, and debentures 12 202.33 35.66 895.35 1133.34 300.14 798.48 1098.62 164.20 595.61 759.81 (iv) Debt instruments viz. 525.83 Investments at FVTOCI government securities, bonds and debentures 3.21 3.21 12268.06 2203.30 14834.11 29305.47 7036.09 8.51 1504.58 8.51 4.27 4.27 7116.00 15656.67 6997.32 1462.40 3498.89 11958.61 447 Notes forming part of the Consolidated Financial Statements (contd.) 874.96 NOTE [57] (contd.) Note As at 31-3-2017 As at 31-3-2016 As at 1-4-2015 Particulars Level 1 Level 2 Level 3 Total Level 1 Level 2 crore (i) Debt instruments viz. 874.96 737.20 (ii) Loans (financial services business) Derivative financial instruments designated as cash flow hedges (iv) Embedded derivative financial instruments designated as cash flow hedges Total 6,7, 12 737.20 1772.82 614.25 1296.46 3683.53 1847.26 556.65 59.69 451.54 29.48 2817.21 8,17 11203.09 11203.09 5372.28 5372.28 2155.17 2155.17 18 9,18 9,18 I 1283.09 1283.09 2463.60 2336.19 (ii) Gains reclassified to Profit or Loss from Other Comprehensive Income: Impact on profit and loss after 79.13 15.42 * Holding all other variables constant (b) Liquidity risk management: The Group manages liquidity risk by maintaining sufficient cash and marketable securities and by having access to funding through an adequate amount of committed credit lines. Given the need to fund diverse businesses, the Group maintains flexibility in funding by maintaining availability under committed credit lines to meet obligations when due. Management regularly monitors the position of cash and cash equivalents vis-à-vis projections. Assessment of maturity profiles of financial assets and financial liabilities including debt financing plans and maintenance of Balance Sheet liquidity ratios are considered while reviewing the liquidity position. The Group's investment policy and strategy are focused on preservation of capital and supporting the Group's liquidity requirements. The Group uses a combination of internal and external management to execute its investment strategy and achieve its investment objectives. The Group typically invests in money market funds, large debt funds, Government of India securities, equity and equity marketable securities and other highly rated securities under a limits framework which governs the credit exposure to any one issuer as defined in its investment policy. The policy requires investments generally to be investment grade, with the primary objective of minimising the potential risk of principal loss. To provide a meaningful assessment of the price risk associated with the Group's investment portfolio, the Group performed a sensitivity analysis to determine the impact of change in prices of the securities that would have on the value of the investment portfolio assuming a 0.25% movement in debt funds and debt securities and a 5% movement in the NAV of the equity and equity marketable securities. Based on the investment position a hypothetical 0.25% change in the fair market value of debt securities would result in a value change of +/- 7.33 crore as at March 31, 2017 and +/- ₹ 15.52 crore as at March 31, 2016. A 5% change in the equity funds NAV would result in a value change of +/- 18.71 crore as at March 31, 2017 and +/- 5.48 crore as at March 31, 2016 respectively. The investments in money market funds are for the purpose of liquidity management only and are held only overnight and hence not subject to any material price risk. (c) Credit risk management: (i) Financial services business Financial services business has a risk management framework that monitors and ensures that the business lines operate within the defined risk appetite and risk tolerance levels as defined by the senior management. Risk Management function is closely involved in management and control of credit risk, portfolio monitoring, market risks including liquidity risk and operational risks. The credit risk function independently evaluates proposals based on well-established sector specific internal frameworks, in order to identify, mitigate and allocate risks as well as to enable risk-based pricing of assets. Regulatory and process risks are identified, mitigated and managed by a separate group. Risk management policies are made under the guidance of Risk Management Committee and are approved by Board of Directors. (ii) Other than financial services business The Group's customer profile include public sector enterprises, state owned companies and large private corporates. Accordingly, the Group's customer credit risk is low. The Group's average project execution cycle is around 24 to 36 months. General payment terms include mobilisation advance, monthly progress payments with a credit period ranging from 45 to 90 days and certain retention money to be released at the end of the project. In some cases retentions are substituted with bank/ corporate guarantees. The Group has a detailed review mechanism of overdue customer receivables at various levels within organisation to ensure proper attention and focus for realisation. 441 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [56] (contd.) (iii) Reconciliation of loss allowance provision for financial services business - Loans: 442 Particulars Loss allowance measured at 12-month ECL Loss allowance measured at lifetime ECL Financial assets for which credit risk has increased significantly and credit not impaired crore Financial assets for which credit risk has increased significantly and credit impaired (15.42) (12.47) 12.47 (15.42) 15.42 (12.47) 12.47 As at 1-4-2015 31391.95 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [56] (contd.) A hypothetical 25 basis point shift in respective currency LIBOR on the unhedged loans would result in a corresponding increase/decrease in interest cost for the Group on a yearly basis. crore Impact on equity tax Particulars 2016-17 2015-16 472.19 At at 31-3-2017 Indian Rupee Interest rates -increase by 0.25% in INR interest rate* Interest rates -decrease by 0.25% in INR interest rate* US Dollar 51.57 43.52 51.57 43.52 (51.57) (43.52) (51.57) (43.52) Interest rates -increase by 0.25% in USD interest rate* Interest rates -decrease by 0.25% in USD interest rate* At at 31-3-2016 Loss allowance as on 1-4-2015 259.40 Provision on new financial assets financial assets Loss allowance as on 31-3-2017 (145.03) 161.78 920.45 343.04 511.21 1634.62 (iv) Amounts written off: (v) Particulars Higher/(lower) provision on existing crore 2015-16 104.33 Amount of financial assets written off during the period but still enforceable Reconciliation of allowance for doubtful debts on trade receivables (other than financial services business): Particulars Opening balance Changes in loss allowance (Provision for doubtful debts): Loss allowance based on ECL Additional provision Write off as bad debts Closing balance [reported under Note 13] crore 2016-17 44.50 As at 31-3-2016 39177.71 35.91 76.18 176.20 450.58 24.56 12.67 Transferred to and from 12-month ECL to lifetime ECL 37.00 (55.94) 18.94 Higher/(lower) provision on existing financial assets (112.09) (212.60) 147.38 Loss allowance as on 31-3-2016 260.00 456.38 651.18 Provision on new financial assets 151.89 5.14 27.08 Transferred to and from 12-month ECL to lifetime ECL 37.18 As at 31-3-2017 37911.59 crore Floating rate borrowings 403.57 Derivatives including embedded derivatives for hedging receivable/(payable) exposure with respect to firm commitments and forecast transactions Receivable/(payable) exposure with respect to forward contract and embedded derivative not designated as cash flow hedge 8314.22 (2746.99) 262.73 9.09 592.60 583.17 98.55 (255.27) crore 367.10 Particulars EURO As at 31-3-2016 Malaysian Ringgit Canadian Dollar Japanese Yen Kuwaiti Dinar pegged currencies Net exposure to foreign currency risk in respect of recognised financial assets/(recognised financial liabilities) (4937.52) (45.39) 148.63 US Dollar including 90.87 229.37 (611.03) LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [56] Disclosure pursuant to Indian Accounting Standard (Ind AS) 107 "Financial Instruments: Disclosures": Market risk management (a) Foreign exchange rate and interest rate risk: The Group regularly reviews its foreign exchange forward and option positions and interest rate swaps, both on a standalone basis and in conjunction with its underlying foreign currency and interest rate related exposures. The Group follows cash flow hedge accounting for Highly Probable Forecasted Exposures (HPFE) hence the movement in mark to market (MTM) of the hedge contracts undertaken for such exposures is likely to be offset by contra movements in the underlying exposures values. However, till the point of time the HPFE becomes an on-Balance Sheet exposure, the changes in MTM of the hedge contracts will impact the Balance Sheet of the Group. Further, given the effective horizons of the Group's risk management activities which coincide with the durations of the projects under execution and could extend across 3-4 years and the business uncertainties associated with the timing and estimation of the project exposures, the recognition of the gains and losses related to these instruments may not always coincide with the timing of gains and losses related to the underlying economic exposures and, therefore, may affect the Group's financial condition and operating results. Hence, the Group monitors the potential risk arising out of the market factors like exchange rates, interest rates, price of traded investment products etc. on a regular basis. For on-Balance Sheet exposures, the Group monitors the risks on net unhedged exposures. (i) Foreign exchange rate risk: In general, the Group is a net receiver of foreign currency. Accordingly, changes in exchange rates, and in particular a strengthening of the Indian Rupee, will negatively affect the Group's net sales and gross margins as expressed in Indian Rupee. There is a risk that the Group may have to adjust local currency product pricing due to competitive pressures when there have been significant volatility in foreign currency exchange rates. The Group may enter into foreign currency forward and option contracts with financial institutions to protect against foreign exchange risks associated with certain existing assets and liabilities, certain firmly committed transactions, forecasted future cash flows and net investments in foreign subsidiaries. In addition, the Group has entered, and may enter in the future, into non-designated foreign currency contracts to partially offset the foreign currency exchange gains and losses on its foreign denominated debt issuances. The Group's practice is to hedge a portion of its material net foreign exchange exposures with tenors in line with the project/business life cycle. However, the Group may choose not to hedge certain foreign exchange exposures for a variety of reasons. The net exposure to foreign currency risk (based on notional amount) in respect of recognised financial assets and recognised financial liabilities and derivatives is as follows: crore Particulars 244.90 US Dollar including As at 31-3-2017 Malaysian Ringgit Canadian Dollar Japanese Kuwaiti Yen Dinar pegged currencies Net exposure to foreign currency risk in respect of recognised financial assets/(recognised financial liabilities) (6316.07) EURO 2016-17 425.05 Derivatives including embedded derivatives for hedging receivable/(payable) exposure with respect to firm commitments and forecast transactions As at 1-4-2015 Malaysian Canadian Ringgit Dollar Japanese Yen Kuwaiti Dinar pegged currencies Net exposure to foreign currency risk in respect of recognised financial assets/(recognised financial liabilities) (2030.94) (46.19) (81.87) 83.24 533.08 EURO (1.64) 5208.01 (1498.86) -- 93.91 1111.30 73.13 (368.96) To provide a meaningful assessment of the foreign currency risk associated with the Group's foreign currency derivative positions against off-balance sheet exposures and unhedged portion of on-Balance Sheet financial assets and liabilities, the Group uses a multi-currency correlated value-at-risk ("VAR") model. The VAR model uses a Monte Carlo simulation to generate thousands of random market price paths for foreign currencies against Indian Rupee taking into account the correlations between them. The VAR is the expected loss in value of the exposures due to overnight movement in spot exchange rates, at 95% confidence interval. The VAR model is not intended to represent actual losses but is used as a risk estimation tool. The model assumes normal market conditions and is a historical best fit model. Because the Group uses foreign currency instruments for hedging purposes, the loss in fair value incurred on those instruments are generally offset by increase in the fair value of the underlying exposures for on-Balance Sheet exposures. The overnight VAR for the Group at 95% confidence level is 122.21 crore as at March 31, 2017 and 74.33 crore as at March 31, 2016. Actual future gains and losses associated with the Group's investment portfolio and derivative positions may differ materially from the sensitivity analysis performed as at March 31, 2017 due to the inherent limitations associated with predicting the timing and amount of changes in foreign currency exchange rates and the Group's actual exposures and position. (ii) Interest rate risk: The Group's exposure to changes in interest rates relates primarily to the Group's outstanding floating rate debt and lending. The Group's outstanding debt in local currency is a combination of fixed rate and floating rate. For the portion of local currency debt on fixed rate basis, there is no interest rate risk. For the portion of local currency debt on floating rate basis, there is a natural hedge with receivables in respect of financial services business. There is a portion of debt that is linked to international interest rate benchmarks like LIBOR. The Group also hedges a portion of these risks by way of derivatives instruments like interest rate swaps and currency swaps. The exposure of the Group's borrowing to interest rate changes at the end of the reporting period are as follows: Particulars Derivatives including embedded derivatives for hedging receivable/(payable) exposure with respect to firm commitments and forecast transactions Receivable/(payable) exposure with respect to forward contract and embedded derivative not designated as cash flow hedge (256.55) US Dollar including crore 5844.91 (1385.86) 226.61 (34.61) 1932.29 439 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [56] (contd.) 440 Particulars Receivable/(payable) exposure with respect to forward contract and embedded derivative not designated as cash flow hedge Particulars crore Less: As at 31-3-2016 Malaysian Ringgit Canadian Dollar Japanese Yen Kuwaiti Dinar pegged currencies (87.60) (145.92) US Dollar including 2015-16 EURO 1311.52 92.66 93975.42 88135.15 76690.01 29774.25 27003.56 22056.89 4655.79 128405.46 4000.87 3252.29 119139.58 101999.19 479.71 83.98 563.69 2.20 129127.28 245.98 35.90 281.88 2.50 119600.97 566.39 78.64 645.03 177.01 2.29 102739.17 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [57] (contd.) (c) Items of income, expenses, gains or losses related to financial instruments: 444 crore Sr. 2016-17 2015-16 Particulars No. I. 443 Net gains/(losses) on financial assets and financial liabilities measured at fair value through Profit or Loss and amortised cost: 155.93 150.01 Derivative instruments not designated as cash flow hedges (ii) Embedded derivatives not designated as cash flow hedges Sub-total (1) II. Measured at amortised cost: (i) Borrowings (ii) Trade payables (iii) Others Sub-total (II) Comprehensive Income: III. Derivative instruments (including embedded derivatives) through Other 44.19 IV. (ii) Embedded derivatives designated as cash flow hedges Sub-total (III) Financial guarantee contracts Total (I+II+II+IV) As at 31-3-2017 As at 31-3-2016 crore As at 1-4-2015 22.73 27.00 48.47 133.20 (i) Derivative instruments designated as cash flow hedges Measured at fair value through Profit or Loss (FVTPL): A. (i) Gains/(losses) on fair valuation or sale of investment (ii) Unclaimed credit balances written back 276.69 132.89 (906.59) Sub-total (C) 409.58 Total [I]=(A+B+C) (2096.37) 60.67 (845.92) (1638.94) II. Net gains/(losses) on financial assets and financial liabilities measured at fair value through Other Comprehensive Income: A. (i) Exchange difference gains/(losses) on revaluation or settlement of items denominated in foreign currency (trade payables, borrowing availed etc.) Financial assets measured at fair value through Other Comprehensive Income: 1. Gains/(losses) on fair valuation or sale of government securities, bonds, debentures etc. 2. Gains/(losses) on fair valuation or settlement of forward contracts designated as cash flow hedges 107.67 (29.81) 348.54 94.54 3. Gains/(losses) on fair valuation or settlement of embedded derivative contracts designated as cash flow hedges (90.05) 14.40 Sub-total (i) 366.16 1961.09 (i) Gains recognised in Other Comprehensive Income: Mandatorily measured at fair value through Profit or Loss: Financial liabilities measured at amortised cost: (716.21) (81.96) (71.83) (ii) Gains/(losses) on fair valuation or settlement of forward contracts not designated as cash flow hedges 77.33 (1.78) (iii) Gains/(losses) on fair valuation or settlement of embedded derivative contracts not designated as cash flow hedges (36.27) (3.20) Sub-total (A) (40.90) (76.81) C. B. (i) Exchange difference gains/(losses) on revaluation or settlement of items denominated in foreign currency (trade receivables, loans given etc.) (291.96) 336.66 (1509.17) (472.97) (iii) Provision for doubtful debts (other than ECL)[net] (287.61) (320.89) (iv) Bad debts written off [net] (376.31) (259.01) Sub-total (B) (2465.05) Financial assets measured at amortised cost: Particulars (ii) (Allowance)/reversal for ECL during the year I. 222.72 (iii) Investment in mutual funds and units of fund 10356.77 4894.42 4374.75 (iv) Investment in debentures and bonds 1133.34 1098.62 759.81 (v) Derivative instruments not designated as cash flow hedges 62.33 157.62 43.02 (vi) Embedded derivatives not designated as cash flow hedges (vii) Investment in security receipts 204.76 140.71 63.56 505.27 196.37 218.15 (viii) Others 18.49 23.19 Sub-total (1) 44.88 13132.55 70.88 525.83 335.38 (i) 353.25 306.43 327.38 (137.61) (31.06) 2465.29 1961.09 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) 399.94 NOTE [57] crore Sr. no. I. Particulars As at 31-3-2017 As at 1-4-2015 Measured at fair value through Profit or Loss (FVTPL): Investment in equity instruments (ii) Investment in preference shares 799.20 Other disclosure pursuant to Indian Accounting Standard (Ind AS) 107 "Financial Instruments: Disclosures": (a) Category-wise classification for applicable financial assets: 7075.08 As at 31-3-2016 II. III. (i) Measured at fair value through Other Comprehensive Income (FVTOCI): Investment in government securities, debentures and bonds 3683.53 2463.60 2817.21 (ii) Loans 11203.09 5372.28 2155.17 (iii) Derivative instruments designated as cash flow hedges 74666.57 1283.09 (iv) Embedded Derivative instruments designated as cash flow hedges 3.21 Sub-total (III) Total (1+11+111) 16172.92 118418.86 8.51 8581.59 102486.64 4.27 5851.61 86625.18 6107.00 (b) Category-wise classification for applicable financial liabilities: Sr. no. 737.20 86829.97 874.96 Sub-total (II) (i) Loans 89113.39 Measured at amortised cost: (ii) Investment in debentures and bonds (iii) Trade receivables (iv) Advances recoverable in cash 53075.39 45282.61 466.25 426.43 26024.98 53304.05 431.14 27969.60 643.09 740.40 22254.43 (vi) Other receivables 5187.89 5493.42 967.78 5797.73 682.13 (v) Cash and bank balances 833.08 1029.53 (0.40) (9.25) (0.01%) 0.33% (0.02%) 0.48 0.00% Contracting Company WLL Kana Controls General Trading & 0.00% 0.00% (0.34%) L&T Electrical & Automation FZE Henikwon Corporation SDN. BHD. (1.06) 114.74 0.23% 0.08 Electrical & Automation: (22.91) 0.01% (0.09%) L&T Technology Services LLC 0.23 0.04% (20.68) (1.44%) (45.03) (0.40%) (24.20) 0.88% 0.35 1.29 (0.37%) L&T Realty FZE 0.02% 9.90 0.01% 0.57 (0.15%) (0.22) Realty: 0.06 As % of consolidated net assets 0.29 liabilities Name of the entity Amount (crore) As % of consolidated profit or loss Amount (crore) As % of consolidated other comprehensive income Amount (*crore) As % of consolidated Amount (crore) total comprehensive income Tamco Electrical Industries Australia Pty Limited 11.33 (0.03) 0.02% Share in total comprehensive income Share in other comprehensive income Share in profit or (loss) Net Assets, i.e., total assets minus total (2.11) (0.37%) (22.79) L&T Electricals & Automation Saudi Arabia Company Limited LLC PT Tamco Indonesia Servowatch Systems Limited (0.01%) (4.43) (0.15%) (0.07%) (33.86) (0.03%) (0.04%) (18.63) (0.24%) 0.00% (9.16) (1.76) (14.73) 2.64 (0.11%) (1.35) (0.05%) 5.20 (0.15%) (6.52) (3.11) (9.53) 457 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [60] (contd.) 1.80% (0.92%) 3.55% 0.00% (0.46) (0.03%) 0.28% 17.33 (0.31%) 0.04% 2.28 Larsen & Toubro Infotech LLC 0.02% 11.45 0.01% 0.45 (0.36%) (0.52) 0.00% (0.07) Larsen & Toubro Infotech South Africa (15.12%) (22.13) (PTY) Limited 39.46 2.74 7.25 0.00% Tamco Switchgear (Malaysia) SDN. BHD. (0.12) (0.01%) (0.63) ☐ (0.01%) (0.63) L&T Infotech Financial Services Technologies Inc. 0.68% 339.39 0.65% Larsen & Toubro Infotech Canada Limited 0.01% 0.04% 0.01% 2.80 0.01% 0.27 L&T Information Technology Spain SL 0.00% 1.74 0.03% 1.55 (0.08%) (0.12) 0.02% 1.43 Larsen & Toubro LLC 0.00% 2.40 0.00% 0.02 0.00% (0.04) (0.03%) 0.31 0.77 0.14% Larsen & Toubro Infotech GmbH 0.06% 27.93 0.04% 2.16 (0.05) (1.81%) 0.02% 0.97 (0.49) Larsen & Toubro Infotech Austria GmbH 0.00% 0.49 0.00% 0.20 (2.65) (0.01%) 1.03% 64.59 (0.02%) Thalest Limited 0.94% 474.23 1.87% 112.85 (7.84%) (11.48) 1.64% 101.37 L&T-MHPS Turbine Generators Private Limited 0.13% L&T Howden Private Limited 0.06% 29.09 L&T-Sargent & Lundy Limited L&T-MHPS Boilers Private Limited 0.06% Power: 0.08 0.02 0.02% 1.02 Total Associates 104.00 11.35 (0.19) 11.16 Jointly Operations - Indian Operations Bauer-L&T Geo Joint Venture 0.00% 0.23 0.00% 0.08 0.00% Indian Joint Ventures 27.66 0.15% 0.02% (1.25) 9.33 1.39 0.00% 0.39 0.00% (0.13) 0.00% (0.13) 458 L&T Sapur Shiping Private Limited 0.55% 277.68 0.25% 15.33 (4.20%) (6.5) 0.15% 9.18 Developmental Projects: L&T Infrastructure Development Projects Limited (Consolidated) 3.51% 1764.74 (5.71%) (344.66) (0.10%) (0.14) (5.57%) (344.80) (Shanghai) Co., Ltd. L&T Sapura Offshore Private Limited Hydrocarbon: (3.04%) (188.17) (1.30) (2.53%) (3.70) (0.08%) (4.95) (0.05%) 0.23% (0.08) 0.15% 0.01% 9.25 0.03% 1.72 Heavy Engineering: L&T Special Steels and Heavy Forgings Private Limited (3.09%) (186.87) (0.89%) 0.33 1.00 0.02% 3.04 (0.01%) (0.42) 1.35% 1.98 (0.29%) (17.84) (0.11) (0.59%) (36.53) 53.02 2697.29 Non-controlling interest in all subsidiaries (7.10%) (3563.60) (7.35%) (444.27) (21.45%) (31.40) (0.30) (0.12) (0.20%) (19.82) (36.42) (0.08%) 2644.27 (0.60%) 16.10 39485.15 0.01% 7.19 (0.03%) 1.01% 0.01% (1.83) (3.63%) 61.15 (78.94%) 0.33 (0.69%) (5.32) (0.12%) (7.15) (115.55) (0.88%) (54.40) (1.01) (0.01%) (0.68) Others: Larsen & Toubro (East Asia) SDN. BHD. (7.69%) (475.67) 0.00% Larsen & Toubro International FZE 1.63% 816.39 0.00% (0.33%) L&T Global Holdings Limited 0.03% Total Subsidiaries 0.21 516.95 Indian Associates 0.09% 0.00% 0.06 Grameen Capital India Limited 0.01% 6.00 Foreign Associates Larsen & Toubro Qatar & HBK Contracting LLC 0.00% 0.25 (0.01%) (0.01) 0.00% 0.24 L&T Camp Facilities LLC 0.01% 6.16 0.10% 0.02 0.01% 0.00% 44.54 0.06% 3.90 (0.15%) (0.22) 0.06% 3.68 Gujarat Leather Industries Limited L&T-Chiyoda Limited Feedback Infra Private Limited 44.55 0.10% Magtorq Private Limited 0.01% 5.87 0.00% 6.14 0.06 0.09% L&T Information Technology Services 7.22% (2.02) Current: Asset Other financial assets 127.37 (1.38) 8.79 - (ii) Swap contracts Liability Other financial liabilities 0.58 1.77 2.12 | | Non-current: Asset Other financial assets 20.60 119.85 0.28 174.29 232.54 0.06 501.35 3.54 Non-current: Asset Other financial assets 325.86 (0.17) 3.34 71.91 0.29 Liability Other financial liabilities 63.21 1.39 37.16 116.91 (15.69) 326.00 Liability Other financial liabilities 9.24 3.47 11.54 14.64 crore As at 31-3-2017 As at 31-3-2016 As at 1-4-2015 exposure Currency Interest rate Commodity exposure price exposure Currency Interest rate exposure exposure Commodity price exposure Currency Interest rate exposure 8.11 (4.66) (i) Forward contracts Net Investment hedge: 18 (2.73) 167.74 22.49 (6.70) 10.23 (iii) Option contracts Current: Asset Other financial assets Liability Other financial liabilities - Non-current: Asset Other financial assets Liability Other financial liabilities - Particulars exposure 479.68 - 8.34 16.86 5526.00 16.86 Zinc (Tn) 9.53 17753.00 9.53 42.07 46.56 121345.00 Lead (Tn) 0.23 150777.00 0.23 13.16 121104.00 13.16 17.15 135003.00 10.65 112455.00 46.56 50.41 11494.00 Coking Coal (Tn) 18.46 Within After Silver (Kg) Copper (Tn) 106.78 353806.93 106.78 387.10 317449.73 387.10 Aluminium (Tn) 27.96 119901.16 27.96 164.86 108788.39 164.86 13.45 37373.00 13.45 238.62 372551.79 238.62 147.74 117011.72 147.74 Iron Ore (Tn) 43.19 28.47 41.84 3053.00 23.38 17.15 10.65 451 Notes forming part of the Consolidated Financial Statements (contd.) exposure exposure price exposure (i) Forward contracts Current: Asset Other financial assets 636.15 (0.34) 29.03 309.95 0.07 4.11 467.64 0.06 6.55 price exposure Liability Other financial liabilities exposure price exposure NOTE [57] (contd.) (k) Carrying amounts of hedge instruments for which hedge accounting is followed: (A) Cash flow hedge: 452 (B) * crore As at 31-3-2017 As at 31-3-2016 As at 1-4-2015 Particulars exposure Currency Interest rate Commodity exposure Currency Interest rate Commodity Currency Interest rate Commodity exposure Average rate twelve twelve (₹) months months (crore) (crore) Commodity price Current: 21.72 (242.62) (83.60) Closing balance 405.32 59.24 (108.57) crore 2016-17 2015-16 Opening balance (15.23) (25.94) Changes in the forward element of the forward contracts where changes in spot element of forward contract is designated as hedging instruments for time period related hedges Amount reclassified to Profit or Loss Cost of hedging reserve Tax related to above Amount included in non-financial asset/liabilities (290.67) (25.96) Changes in the spot element of the forward contracts which is designated as hedging instruments for time period related hedges (207.83) 366.02 Changes in fair value of forward contracts designated as hedging instruments 676.73 73.74 | Changes in intrinsic value of option contracts Changes in fair value of swaps Amount reclassified to Profit or Loss (0.07) (0.13) 50.92 (1.88) 177.52 (261.26) (328.81) 195.55 345.52 9190.94 Cash and cash equivalents 319.97 124.16 Loans 2663.91 4991.62 197.79 3566.65 Other assets 345.54 175.96 Total inventories and current financial assets pledged as security 15141.21 15460.30 206.45 13161.83 10168.56 59.24 1400.63 10411.16 Investments Tax related to above Closing balance 23.14 (6.00) (57.80) (15.23) 453 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [58] Value of financial assets and inventories pledged as collateral for liabilities and/or commitments and/or contingent liabilities: Particulars crore As at 31-3-2017 As at 31-3-2016 As at 1-4-2015 Current: Inventories and trade receivables exposure Opening balance 2016-17 Cash flow hedging Cost of hedging As at 1-4-2015 Cash flow hedging Cost of hedging reserve Cost of hedging reserve reserve reserve reserve 347.80 (57.80) 73.76 reserve hedging As at 31-3-2016 As at 31-3-2017 Cash flow Asset Other financial assets 1.47 Non-current: Asset Other financial assets 63.75 15.22 29.17 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [57] (contd.) (1) Breakup of cash flow hedging reserve and cost of hedging reserve: Particulars Balance towards continuing hedges Balance for which hedge accounting discontinued crore (15.23) 49.87 (25.94) 57.52 (10.47) 41.50 (0.21) 214.06 (64.24) 168.63 84.21 (269.54) (132.87) (405.82) (516.38) (34.78) 460.62 (n) Movement of hedging reserve and cost of hedging reserve: Hedging reserve 50.80 crore 2015-16 73.42 2016-17 (14.52) (75.83) (m) Reclassification of hedging reserve and cost of hedging reserve to Profit or Loss: Particulars Future cash flows are no longer expected to occur: Revenue from operations Sales, administration and other expenses Other Income Hedged expected future cash flows affecting profit or loss: Progress Billing Revenue from operations Manufacturing, construction and operating expenses Finance costs Sales, administration and other expenses crore 2015-16 Non-current: As at 1-4-2015 Nominal amount (*crore) 743.40 437.33 50.42 487.75 588.38 163.50 84.16 751.88 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [57] (contd.) (j) Details of outstanding hedge instruments for which hedge accounting is followed: (i) Outstanding currency exchange rate hedge instruments: (A) Forward covers taken to hedge exchange rate risk and accounted as cash flow hedge: 450 449 659.24 Total 128.25 47.72 513.15 Embedded derivatives 23,29 193.81 36.44 230.25 235.06 202.27 45.57 280.63 4.85 517.95 105.68 623.63 207.12 70.43 57.82 As at 31-3-2017 Nominal Average Particulars 213.25 Saudi Riyal Omani Riyal 324.75 Arab Emirates Dirham 1229.22 Canadian Dollar British Pound Japanese Yen 845.50 Kuwaiti Dinar 1424.98 Qatari Riyal 1184.17 34.97 70.50 90.97 0.66 467.82 224.64 1401.83 15.58 1061.92 70.13 8870.40 5350.42 83.72 793.73 434.45 14.86 331.20 465.43 331.20 1228.18 amount (crore) (₹) Within rate twelve months (crore) After Nominal twelve amount months (crore) (crore) As at 31-3-2016 Average Within After Nominal rate twelve twelve amount (₹) months months (crore) (crore) (crore) As at 1-4-2015 Average Within After rate twelve twelve (₹) months months (* crore) (crore) (a) Receivable hedges US Dollar 14220.82 EURO Malaysian Ringgit 172.04 309.74 15.01 17.59 1029.47 199.75 52.43 34.97 70.50 23,29 B. Derivative liabilities: 157.62 55.94 1. Lease realisation: Net realisation per month * 30 per sq/ft. 2. Capitalisation rate 12% 222.72 Expected yield Debt 2191.81 70.88 858.17 instruments Loans 11203.09 5372.28 2155.17 Expected yield Other investments 625.09 Expected yield Preference shares 55.94 55.94 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [57] (contd.) (h) Sensitivity disclosure for level 3 fair value measurements Fair value as at Particulars As at 31-3-2017 As at 31-3-2016 As at Significant unobservable 1-4-2015 inputs crore Equity shares 695.26 442.69 195.93 Risk spread Sensitivity 617.13 229.30 244.04 Expected yield (i) Maturity profile of financial liabilities based on undiscounted cash flows: twelve twelve Total months months After twelve twelve months months Total A. Non-derivative liabilities: Borrowings Trade payables Other financial liabilities Total 23,29 28 28320.55 4443.36 60232.80 22,26,27 27468.89 79646.18 107115.07 1453.70 29774.25 164.83 4608.19 81264.71 141497.51 29685.56 25976.39 3780.71 59442.66 71843.94 101529.50 25812.61 61251.44 87064.05 1027.17 27003.56 20783.40 1273.49 22056.89 141.22 3921.93 3082.89 100.85 3183.74 73012.33 132454.99 49678.90 62625.78 112304.68 Total Forward contracts Within Within 2017: Increase/decrease of 5% in the fair value would result in impact on profit or loss by 19.45 crore 2016: Increase/decrease in the fair value by 5% would result in impact on profit or loss by 11.46 crore 1% change in net realisation would result in +/- 0.38 crore 25 bps change in capitalisation rate would result in +/- 0.78 crore 2017: Increase/decrease in the fair value by 5% would result in impact on profit or loss by 3.27 crore 2016: Increase/decrease in the fair value by 5% would result in impact on profit or loss by 6.10 crore 2017: Increase/decrease in the fair value by 0.25% would result in impact on profit or loss or other comprehensive income by 3.16 crore 2016: Increase/decrease in the fair value by 0.25% would result in impact on profit or loss or other comprehensive income by 1.02 crore 2017: Increase/decrease in the fair value by 0.25% would result in impact on profit or loss or other comprehensive income by 18.31 crore 2016: Increase/decrease in the fair value by 0.25% would result in impact on profit or loss or other comprehensive income by 8.78 crore 2017: Increase/decrease in the fair value by 5% would result in impact on profit or loss by 20.18 crore 2016: Increase/decrease in the fair value by 5% would result in impact on profit or loss by * 7.50 crore crore Note As at 31-3-2017 As at 31-3-2016 As at 1-4-2015 Particulars Within twelve twelve months months After After As at 31-3-2016 Average Within After Nominal rate twelve twelve amount (₹) months months (crore) (crore) (crore) 141.48 Bahraini Dinar Australian Dollar After Receivable hedges US Dollar 138.13 64.85 138.13 285.36 Within rate twelve twelve months months (crore) (crore) 66.26 144.23 141.13 522.78 375.41 147.37 (C) Forward covers taken to hedge exchange rate risk and accounted as net investment hedge: As at 31-3-2017 Particulars Nominal amount (*crore) Average Within After Nominal rate twelve twelve amount (₹) months months (*crore) (crore) (crore) 63.00 (₹) As at 1-4-2015 Average Within After Nominal rate twelve twelve amount (₹) months months (crore) (crore) (crore) Norwegian Krone 9.56 8.80 6.10 3.46 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [57] (contd.) (B) Options taken to hedge exchange rate risk and accounted as cash flow hedge: As at 31-3-2017 Particulars Nominal amount (crore) Average Within After Nominal rate twelve twelve amount (₹) months months (*crore) (crore) (crore) As at 31-3-2016 Average (₹) As at 31-3-2016 Average Within After Nominal rate twelve twelve amount months months (crore) (crore) (*crore) As at 1-4-2015 Average Within rate twelve twelve (%) months months (*crore) (crore) After Floating interest rate borrowings 2038.16 7.88 1107.11 931.05 2297.29 8.13 241.95 2055.34 2122.56 8.05 159.84 1962.72 (iii) Outstanding commodity price hedge instruments: Commodity forward Contract: As at 31-3-2017 Particulars Nominal amount (crore) Average Within After rate twelve twelve (₹) months months (crore) (crore) Average 2.21 Within After Nominal rate twelve twelve amount (%) months months (*crore) (crore) (crore) As at 31-3-2016 Average Within After rate twelve twelve (₹) months months (crore) (crore) Receivable hedges Saudi Riyal 584.21 366.36 19.54 366.36 785.74 19.44 27.79 757.95 584.21 20.81 (ii) Outstanding interest rate hedge instruments: Interest rate swaps taken to hedge interest rate risk and accounted as cash flow hedge: Particulars Nominal amount (crore) As at 31-3-2017 Average Within After Nominal rate twelve twelve amount (%) months months (*crore) (*crore) (crore) As at 1-4-2015 377.68 23.15 122.25 10.06 68.60 222.22 5.46 21.83 Danish Krone 26.64 10.66 26.64 Norwegian Krone 21.83 27.75 49.69 9.74 49.69 Swedish Krona 24.88 8.58 9.25 27.75 5.34 51.23 51.23 60.02 7682.19 69.43 5703.82 1194.71 85.75 652.24 258.49 18.57 45.24 63.65 18.34 63.65 42.94 17.14 42.94 44.67 176.63 44.67 65.82 137.55 65.82 1097.11 18.83 955.63 1149.04 17.78 1010.21 138.83 20.03 57.22 20.03 42.80 53.49 42.80 41.77 109.93 41.77 61.05 103.65 61.05 262.44 0.64 159.10 103.34 207.39 0.70 0.16 2036.88 231.00 1358.86 678.02 1814.41 215.75 1013.61 1681.41 19.07 1317.65 363.76 1477.36 17.78 18.98 158.12 18.98 1978.37 55943.00 542.47 1569.81 65.03 53288.42 2654.58 84.31 727.36 842.45 207.23 800.80 1314.38 162.98 40.62 50.78 40.62 15.39 51.29 15.39 South African Rand 139.95 5.13 79.93 24.88 57.04 9.01 57.04 (b) Payable hedges 1.55 347.71 41.15 100.70 35.72 932.23 0.74 404.80 249.56 216.15 249.56 5.43 527.43 175.69 17.22 175.69 Swiss Franc 279.05 67.45 279.05 Chinese Yuan 9.63 63.51 321.50 73.94 241.64 104.77 10.70 104.77 79.86 222.22 63.47 5245.15 4684.72 75.09 2917.37 133.48 2.21 9929.87 3050.85 Qatari Riyal US Dollar 9852.03 EURO 4030.51 Saudi Riyal Arab Emirates Dirham 7.24 British Pound 23.18 Japanese Yen 1150.03 Kuwaiti Dinar 786.31 18.11 7.24 84.46 23.18 0.72 845.92 220.22 786.31 304.11 63.29 8526.57 1325.46 13648.27 67.84 8028.44 5619.83 72.09 3883.73 146.78 2577.88 74.64 2474.52 103.36 71.76 18.17 71.76 7.33 18.20 7.33 105.45 102.86 103.90 1426.34 0.67 1078.63 352.56 225.37 352.56 244.46 18.57 244.46 IT & Technology Services: Loans 29094.68 0.46% 230.14 (0.11%) (6.87) 0.24% 0.35 L&T Construction Equipment Limited (0.11%) L&T Cutting Tools Limited 0.08% 42.40 0.27% 16.12 0.08% (6.52) Construction Equipment and Others: Valves, Welding Equipment, (0.01) (4.62) 0.00% (0.02) 0.00% Seawoods Realty Private Limited 0.00% (0.01) Seawoods Retail Private Limited 0.00% (0.01) | | │ (0.02) 0.00% (0.01) 0.00% 0.11 0.26% 16.23 L&T Valves Limited (1.65%) (829.40) (5.77%) (348.34) (10.94%) (16.01) (5.89%) (364.35) Bhilai Power Supply Company Limited 0.00% 0.05 L&T Electricals and Automation Limited 0.01% 6.54 L&T Power Limited 0.01% 4.84 (0.01%) 0.00% (0.89) 34.94 (0.01%) 0.56% 34.98 (0.03%) 1.20% 603.58 1.99% 120.54 1.52% 2.23 1.98% 122.77 EWAC Alloys Limited Shipbuilding: L&T Shipbuilding Limited Others: 0.19% 95.69 0.58% (0.04) 0.20 L&T Vision Ventures Limited 0.54% L&T Uttaranchal Hydropower Limited 1.72% 863.29 Nabha Power Limited 5.77% 2898.75 0.19 (0.43%) 0.47% 0.69 (0.41%) (25.42) Realty: Chennai Vision Developers Private Limited (26.11) 0.00% | | | 0.19 other comprehensive total income comprehensive income Power Development: L&T Arunachal Hydropower Limited 0.08% 40.48 L&T Himachal Hydropower Limited 0.39% 197.85 L&T Power Development Limited 6.20% 3115.87 0.00% 0.00% 0.01 0.00% 0.01 318.69 L&T Seawoods Limited 6.39% 3210.94 0.53% 32.13 0.01% 0.02 0.52% 32.15 L&T South City Projects Limited 0.07% 33.13 0.55% 33.13 5.15% 33.13 318.69 2.12% 1065.96 L&T Asian Realty Project LLP 1.68% 842.19 (0.01%) (0.37) 0.00% (0.37) L&T Parel Project LLP 0.13% 64.40 1.36% 81.94 1.32% 81.94 L&T Realty Limited 5.28% Amount (crore) | | | (0.89) 3.91 (0.60%) (37.36) Hydrocarbon: Larsen & Toubro Hydrocarbon International Limited LLC 2.67% 0.00% (0.13%) (1.06) (67.11) (0.01%) (0.23%) (0.86) 0.02% 0.03 L&T Modular Fabrication Yard LLC (51.69) (0.68%) (41.27) (0.10%) Larsen & Toubro Heavy Engineering LLC As % of consolidated Amount (crore) total comprehensive income Larsen & Toubro Readymix & Asphalt Concrete Industries LLC 0.04% 17.71 (0.15%) (9.24) (0.01%) (0.02) (0.15%) (9.26) Heavy Engineering: (0.01%) (0.83) (14.09) 1.82% Larsen & Toubro ATCO Saudia LLC (0.88%) (444.69) 0.32% 19.69 1.46% 2.13 0.35% 21.82 Larsen & Toubro Kuwait Construction General Contracting Company WLL PT Larsen & Toubro Hydrocarbon Engineering Indonesia (0.02%) (9.89) (0.04%) (2.34) 0.22% 0.32 (0.03%) (240.23) Amount (crore) (3.88%) 7.78% 2.67 (0.18%) (11.42) L&T Overseas Projects Nigeria Limited 0.00% 0.01 Larsen Toubro Arabia LLC (0.83%) (415.38) 0.00% (4.17%) (0.02) (0.01%) (0.02) 0.00% (0.04) (251.62) 11.39 (0.01%) As % of consolidated other comprehensive income As % of consolidated profit or loss (0.11) (0.11%) (7.10) (0.01) 0.04% 2.34 (6.99) (0.08%) 2.35 (0.01%) L&T Infra Contractors Private Limited Infrastructure: Larsen & Toubro (Oman) LLC 0.74% 373.93 1.62% Larsen & Toubro Qatar LLC Foreign Subsidiaries 0.04% 10.05 0.02% 0.00% 0.20 Kesun Iron and Steel Company Private Limited 0.00% (0.26) 0.00% (0.01) 0.00% (0.01) L&T Aviation Services Private Limited 0.07% 36.39 (0.12%) L&T Capital Company Limited 0.00% 0.55 0.00% Larsen & Toubro (Saudi Arabia) LLC 0.19 0.01% 0.33 456 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [60] (contd.) Net Assets, i.e., total assets minus total Share in profit or (loss) Share in other comprehensive income Share in total comprehensive income liabilities Name of the entity As % of consolidated net assets Amount (*crore) 0.13% Amount (crore) 0.14 2.62 0.75% 377.63 6.50% 97.95 (18.80%) (27.52) 0.29 (0.01%) 392.80 2.99% 1.14% 70.43 (0.01) 0.00% 0.28 4.37 6.42% 397.17 Larsen & Toubro T&D SA (Proprietary) Limited 0.01% 0.00% 33713.37 As % of consolidated As % of consolidated Amount (crore) As % of consolidated other comprehensive income Amount (crore) As % of consolidated Amount (crore) As % of consolidated profit or loss total Heavy Engineering: L&T Cassidian Limited 0.00% 0.03 Spectrum Infotech Private Limited 0.03% comprehensive income net assets Amount (*crore) As % of consolidated 0.51% 31.31 (0.18) 0.12% 7.16 454 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [60] (contd.) Net Assets, i.e., total assets minus total Share in profit or (loss) Share in other comprehensive income Share in total comprehensive income liabilities Name of the entity 16.53 (0.01%) (0.86) (0.01%) (0.02) 18.64% 1153.51 L&T Technology Services Limited 3.05% 1531.52 7.43% 449.01 56.55% 82.78 8.59% 531.79 L&T Thales Technology Services Private Limited 0.00% (2.72) 215.95 (0.08) 147.53% 15.52% (0.01%) (0.88) Hydrocarbon: L&T Hydrocarbon Engineering Limited 3.08% 1545.66 436.30 (45.51%) (66.62) 5.97% 369.68 IT & Technology Services: Larsen & Toubro Infotech Limited 5.93% 2976.88 937.56 0.01% 31.39 (0.05%) 7.34 (0.12%) 39.00 9.74 78.17 41.72 383.73 425.45 0.03 110.12 68.43 21.77 360.58 470.70 11.12 11.12 * includes amounts directly deposited by the borrowers into the bank accounts. The Group's Financial Services segment has subsidiaries engaged in the lending business offering a wide range of products such as micro finance, tractor loans, two-wheeler loans, mortgage lending products and other rural lending products to a large number of customers. The operations of these subsidiaries are geographically wide-spread with significant volume of transactions including cash collections. The above information covers cash received at the offices of these subsidiaries as well as direct deposits in the Group's bank accounts by the borrowers of these subsidiaries and is based on information and records available with the Group. The Group took steps not to accept Specified Bank Notes at its offices after November 8, 2016. Amounts directly deposited into the Group's bank accounts by borrowers of these subsidiaries have been classified as "Permitted receipts" and where details of denomination were not available, the same have been shown as "Other denomination notes". NOTE [60] 21.80 notes Total SBNs Other denomination 27335.67 Total non-current financial assets pledged as security 33713.37 29094.68 27335.67 NOTE [59] Disclosure on Specified Bank Notes (SBN) pursuant to MCA notification no. 308(E) dated March 30, 2017: Particulars Closing cash in hand as on November 8, 2016 (+) Permitted receipts * (-) Permitted payments (-) Amount deposited in Banks * Closing cash in hand as on December 30, 2016 crore Additional information pursuant to Schedule III to the Companies Act, 2013 for the year ended 31-3-2017: Net Assets, i.e., total assets minus total liabilities Share in profit or (loss) Indian Subsidiaries Infrastructure: Hi-Tech Rock Products & Aggregates Limited 0.02% 9.21 L&T Geostructure LLP 0.06% 32.11 0.08% 0.52% 4.89 0.08% 4.89 L&T Infrastructure Engineering Limited 0.08% Larsen and Toubro Limited 0.12% Parent Company 157.35 Share in other comprehensive income Share in total comprehensive income Name of the entity As % of consolidated Amount (crore) net assets As % of consolidated profit or loss Amount (crore) As % of consolidated other comprehensive income Amount (*crore) As % of consolidated total comprehensive income Amount (crore) 91.63% 46012.74 90.28% 5453.74 107.49% 90.68% 5611.09 Amount (*crore) 0.56 (0.02) Mudit Cement Private Limited L&T General Insurance Company Limited L&T Infra Investment Partners 0.21% 106.47 0.28% (0.03%) (13.64) (0.09%) (0.13%) (64.15) (1.06%) 1.18% 592.46 0.88% 16.67 (0.01%) (5.49) (0.01) 0.27% L&T Financial Consultants Limited (formerly known as L&T Vrindavan Properties Limited) 16.66 (5.49) (64.15) (1.04%) (64.15) 53.13 0.86% (0.09%) 0.02 0.00% (5.48) 6.32% L&T Investment Management Limited 1.02% L&T Mutual Fund Trustee Limited 0.00% L&T Trustee Company Private Limited 0.00% 1.59 (0.01) 3174.27 0.89% 512.27 (0.09%) 0.00% 53.64 (0.80%) (5.33) (0.10%) 0.02 (1.17) 0.85% 52.47 (0.15) (0.09%) 53.13 Developmental Projects: L&T Metro Rail (Hyderabad) Limited 4.06% 0.04% 2.75 455 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [60] (contd.) Net Assets, i.e., total assets minus total Share in profit or (loss) Share in other comprehensive income Share in total comprehensive income liabilities Name of the entity As % of consolidated net assets Amount (crore) As % of consolidated profit or loss Amount (crore) 0.11 Limited 0.08% 0.04% 2037.69 0.05% 2.82 (17.71%) (25.92) (0.37%) (23.10) Sahibganj Ganges Bridge-Company Private Limited 0.00% (0.01) 0.00% (0.01) Marine Infrastructure Developer Private Limited 0.80% 402.75 2.64 (0.01%) L&T Infrastructure Finance Company 0.00% L&T Access Distribution Services Limited 0.01% 3.17 (0.02%) (0.94) (0.02%) (33.87) (0.94) 0.03% 15.58 0.10% 5.78 0.15% 0.22 L&T Capital Markets Limited (0.55%) 3.26 2.23% 0.01% 0.54 AugmentIQ Data Sciences Private Limited 0.00% 1.09 0.00% 0.16 0.00% 0.16 Financial Services: L&T Finance Limited (formerly known as Family Credit Limited) 13.52% 6787.26 (0.61%) (37.13) 0.10% 6.00 L&T Finance Holdings Limited 8.28% 1.48% 89.37 (0.01%) (0.01) 1.44% 89.36 L&T Infra Investment Partners Advisory Private Limited 0.03% 13.06 0.08% 4.87 0.08% 4.87 L&T Infra Investment Partners Trustee Private Limited 720.67 0.05 1.44% 120.02 4156.28 1.99% 120.37 (0.10%) (0.14) 1.94% 120.23 L&T Housing Finance Limited 1.60% 805.30 1.98% 119.58 0.30% 0.44 1.94% L&T Infra Debt Fund Limited 71.66 3592.00 63.51 (360.77) 8122.87 (989.30) 9112.17 21752.42 A,C,N,S Trade payables A,C,D borrowings Current maturities of long term 15897.14 (646.69) 16543.83 A,C,D Borrowings Financial liabilities Current liabilities 211.93 48.13 A,F,M 446.90 (16692.83) (224.78) 52709.64 222.12 69849.37 Provisions 304.47 575.05 52931.76 385.35 539.56 119.93 659.49 163.80 (16917.61) (189.70) Other financial liabilities 22056.89 A,C,K,M Notes forming part of the Consolidated Financial Statements (contd.) 171121.80 1123.81 299.55 1676.85 1123.81 38.71 (22572.12) 193693.92 TOTAL EQUITY AND LIABILITIES C assets classified as held for sale Liabilities associated with group(s) of 260.84 A Current tax liabilities (net) (1672.37) 4030.35 (257.50) 3772.85 51438.77 (1589.02) 49849.75 Other financial liabilities Other current liabilities 21609.62 (805.02) 20804.60 Provisions A,C,L,N 3349.22 A,C,M 69402.47 A,C,D,J,P Borrowings LARSEN & TOUBRO 171121.80 (22572.12) 193693.92 TOTAL ASSETS 1671.35 1631.96 39.39 C Group(s) of assets classified as held for sale M, T A, C, H, Other current assets 34972.91 (380.05) 35352.96 51711.29 31.55 542.64 Loans towards financing activities A,H 14353.86 (31.84) Notes forming part of the Consolidated Financial Statements (contd.) 14322.02 A,C,H 2381.72 (252.75) 2128.97 53945.99 (2234.70) Other financial assets NOTE [63] (contd.) Particulars EQUITY AND LIABILITIES: 40723.16 40909.07 4998.62 299.02 299.02 (3028.00) 185.91 41022.18 185.91 41208.09 Deferred tax liabilities Other non current Liabilities A,N A,C,G,O,T A,D,F Liabilities Non-current liabilities Financial liabilities 1970.62 NOTE [63] (contd.) A,P,T crore Equity Equity share capital Other equity Equity attributable to owners of the Company Non controlling interest crore Note Ind AS Adjustments Ind AS crore crore * crore crore I-GAAP 511.09 (b) Statement of reconciliation of equity under Ind AS and equity reported under I-GAAP as at April 1, 2015: Particulars 1037.65 818.32 219.33 A,F Loans 2327.01 446.87 1880.14 A,E,S Other investments 1257.88 1147.94 109.94 A associates Investments in joint ventures and Financial assets A,Q 2171.67 (724.71) 1446.96 Other intangible assets A,C,D Loans towards financing activities 23724.84 556.57 Intangible assets under development A,D 11278.92 (2095.00) 9183.92 (23168.27) Goodwill A,H (560.94) I-GAAP Note Inventories Current assets Particulars NOTE [63] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 2737.19 (105.55) 2842.74 A,D,S Other non-current assets 553.99 (50.51) 604.50 A 47888.27 Other financial assets A,M 610.37 (46.82) 563.55 48449.21 51268.99 Deferred tax assets (net) A,G 1195.13 176.78 53074.36 1371.91 Non current assets for current tax (net) 1805.37 4386.00 4386.00 B Others VIII 1803.63 L 153.20 Equity component of other financial instruments (Foreign Currency Convertible Bonds) VII Reversal of dividend & dividend distribution tax VI (75.82) D Increase in borrowing cost due to initial fair valuation of long term financial liabilities V (122.67) D Increase in borrowing cost pursuant to application of effective interest rate method IV 555.71 E crore Note Equity as per I-GAAP 40909.07 | Provision for expected credit loss A, D, F, H, H || ||| Provision for employee benefits based on constructive obligations K (450.87) Gain on fair valuation of investments (1121.12) (68.75) I, M, N, Q IX crore crore crore ASSETS: Non-current assets Property, plant and equipment crore A,B,C,D A,B,D 17359.98 6211.01 (5187.81) (4420.48) 12172.17 1790.53 Investment property Capital work-in-progress Sr. no. crore Ind AS Deferred and current taxes ✗ Additional Tax on dividend distributed by subsidiaries A,G,V T (146.36) (227.93) crore Equity as per Ind AS (attributable to owners of the Company) (c) Effect of Ind AS adoption on Balance Sheet as at March 31, 2016: 462 Particulars Note I-GAAP Ind AS Adjustments 41208.09 Ind AS Adjustments A,C,F 696.85 473.01 16 Loans - current 3. 93.55 4139.74 492.19 27969.60 27477.41 13 Trade receivables 2. 4046.19 11 Inventories 1. months months months months Total Within As at 31-3-2016 After As at 1-4-2015 Total Within 4. After twelve twelve twelve twelve months months Total After twelve Other financial assets 2598.78 twelve twelve Total After Within Total As at 1-4-2015 As at 31-3-2016 After Within Total After twelve twelve no. Note Particulars Within Sr. 7.83 480.84 104.80 2703.58 2192.38 4602.22 25447.06 645.84 251.99 4854.21 577.92 26024.98 5.30 651.14 106.29 2298.67 5715.37 21259.27 532.76 2018.89 18 265.79 5981.16 19 30326.18 10039.93 40366.11 29478.50 10975.15 40453.65 25220.53 995.16 22254.43 9.88 542.64 110.08 2128.97 9752.38 34972.91 (b) Current liabilities expected to be settled within twelve months and after twelve months from the reporting date: crore As at 31-3-2017 5. Other current assets twelve Note Particulars Raykal Aluminium Company Private Limited Others: 1.49 0.02% 1.17 0.80% 0.32 0.01% 18.43 0.04% Construction Equipment and Others: L&T Kobelco Machinery Private Limited Valves, Welding Equipment, total comprehensive income other comprehensive income Amount (crore) As % of consolidated Amount (crore) LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [60] (contd.) Net Assets, i.e., total assets minus total Share in profit or (loss) Share in other comprehensive income 0.00% Share in total comprehensive income Name of the entity As % of consolidated net assets Amount (crore) As % of consolidated profit or loss Amount (crore) As % of consolidated liabilities 0.28 0.00% (0.03) (0.02) (0.01%) (406.62) (20.15%) (1217.32) (8.39%) 6041.23 (0.01) (20.11) (12.29) (19.87%) 0.00% (0.03) (426.73) (1229.61) 0.00% 146.38 NOTE [61] Disclosure pursuant to Indian Accounting Standard (Ind AS) 1 "Presentation of financial statements": (a) Current assets expected to be recovered within twelve months and after twelve months from the reporting date: crore As at 31-3-2017 Sr. no. Within 6187.61 twelve 0.04 2668.90 (68.67%) (34490.90) 50216.52 CFS Adjustment and elimination 0.00% (0.03) Foreign Joint Ventures Hydrocarbon: Larsen & Toubro Electromech LLC (0.23%) Total (13.92) 0.85% (0.20%) (12.67) Indiran Engineering Projects and Systems Kish PJSC 0.00% Total Joint Ventures 1.25 Loans twelve months A,G Deferred tax assets (net) 46673.67 1009.90 73.50 936.40 2172.83 44500.84 806.43 41431.60 480.60 1888.39 (83.82) 564.42 A,H,M Other financial assets (604.79) 42036.39 A,H Loans towards financing activities Investments in joint ventures and associates A 147.76 1918.89 2066.65 Non current assets for current tax Other investments 1513.75 374.64 Loans A,F 238.52 567.91 A,E,S Financial assets (net) 261.17 (356.12) 1052.97 A Other bank balances 4412.57 4773.34 A,C Cash and cash equivalents 22254.43 (617.79) 22872.22 A,C,H Trade receivables 7353.81 (646.98) 8000.79 A,E (24.90) Other non-current assets A,D,S 2477.65 (82.65) 236.27 2395.00 A,C Current assets A,C,D 6508.40 (527.24) 5981.16 Financial assets Investments Inventories 6473.66 (3581.69) 10055.35 I-GAAP Note Particulars 460 (a) Effect of Ind AS adoption on Balance Sheet as at April 1, 2015: Disclosure pursuant to Indian Accounting Standard (Ind AS) 101 "First time adoption of Indian Accounting Standards" NOTE [63] Notes forming part of the Consolidated Financial Statements (contd.) 459 There are no amounts due and outstanding to be credited to Investor Education & Protection Fund as at March 31, 2017. NOTE [62] 6602.65 20804.60 105.39 1676.85 33.96 3772.85 20793.38 1263.51 22056.89 935.34 27003.56 1439.36 29774.25 26068.22 50.77 5189.05 4280.95 41.49 4322.44 3738.89 6535.46 23444.74 18177.14 6230.75 24407.89 14201.95 192.25 2658.34 2159.85 143.67 2303.52 1571.46 28334.89 5138.28 16909.28 2466.09 months months months months 1. Trade payables 28 2. Ind AS Adjustments Other financial liabilities 3. Other current liabilities 30 4. Provisions 31 29 Ind AS crore crore 2768.70 2768.70 Goodwill A,Q 2215.00 (678.02) B 1536.98 A,C 13712.54 (13144.07) 568.47 Intangible assets under development A Other intangible assets months Investment property (3450.06) crore crore crore crore ASSETS: Non-current assets 1452.66 Property, plant and equipment 18785.51 (5115.73) 13669.78 Capital work-in-progress A,B,C,D 4902.72 A,B,C,D Ind AS 461 crore 5535.48 Profit for the year (990.16) (987.65) (2.51) A Add: Share in profit/(loss) of joint ventures and associates (net) 5534.86 (3.13) 5537.99 47.80 47.62 0.18 Less: Additional provision/(reversal) of tax T on dividend distributed by subsidiaries crore 5582.66 44.49 crore 5582.66 465 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [63] (contd.) Particulars Brought forward (990.78) Note Ind AS Adjustments Ind AS crore crore 5538.17 crore crore I-GAAP 44.49 4544.70 E, G, Non-controlling interests - Owners of the Company attributable to: Total comprehensive income for the year Non-controlling interests Owners of the Company attributable to : Other comprehensive income for the year 4544.70 (990.78) 5535.48 311.82 (133.13) 444.95 A Non-controlling interests 159.05 159.05 M, O Total comprehensive income for the year 5535.48 (831.73) Other comprehensive income [net of tax] 4703.75 - Owners of the Company 5090.53 (857.65) 4232.88 - Profit for the year attributable to: 5538.17 5582.66 44.49 (2025.50) 96985.56 1786.73 (969.26) 2755.99 and obsolescence A Depreciation, amortisation, impairment 1655.06 (1386.16) 3041.22 A,D Finance costs 5778.52 (368.15) 6146.67 A,H business and finance lease activity 4828.91 138.20 4967.11 71225.52 1183.39 94960.06 72408.91 A, I, K, 13816.16 (485.32) 13330.84 N, O Sales, administration and other expenses Employee benefits expense Less: Overheads capitalised Total expenses Profit before exceptional items and tax (67.03) 8019.62 A,V A,G,T,V 2764.19 (215.71) 53.50 (165.02) 8086.65 2817.69 2548.48 (111.52) 2436.96 Profit after tax Carried forward 5538.17 (380.73) 5090.53 94.22 196.85 (263.88) Exceptional items U Profit before tax Tax expense: Current tax Deferred tax 7925.40 A (3.07) 5.77 96976.72 (2022.43) 94954.29 7728.55 358.10 8.84 Finance cost of financial services 444.95 crore L. K. J. I. H. G. F. E. D. C. B. A. Notes: 3789.51 (264.24) 4053.75 4402.96 337.98 (3239.59) (4626.56) Net Cash flows from financing activities A 7488.47 (235.77) Some of the entities have been classified as joint ventures under Ind AS 111 based on the nature of the control exercised by the Parent Company. Accordingly, the share in net profit/loss of joint ventures is recognised in the consolidated Statement of Profit and Loss and share in the net assets is included under investment in joint ventures/associates in the consolidated Balance Sheet as per equity method. Under I-GAAP, the financials of these entities were consolidated line by line. 7252.70 (709.98) 96.53 (613.45) Cash and cash equivalents as at April 1, 2015 Cash and cash equivalents as at March 31, 2016 4763.73 (360.77) Net increase/decrease) in cash and cash equivalents (4964.54) Pursuant to Ind AS requirements, investment property is presented separately. Under I-GAAP the same was presented as part of tangible assets. Tangible assets have been now divided into two categories under Ind AS viz property plant & equipment and Investment Property. Under Ind AS 23, borrowing cost is calculated following effective interest rate (EIR) method as described under Ind AS 109. Under I-GAAP borrowing cost was computed by applying the coupon rate to the principal amount for the period with consequential impact in the asset items where borrowing cost is capitalised / inventorised. Borrowings are recognised at fair value at the inception and subsequently at amortised cost with interest recognised based on EIR method. 468 W. The previous year I-GAAP figures have been reclassified/regrouped to make them comparable with Ind AS presentation. As per Ind AS 12, unused tax credits like MAT Credit entitlement is considered as Deferred Tax. Part stake divestment in a subsidiary which does not result in ceding of control, is accounted as transaction between Parent Company and the non-controlling interest under Ind AS. Accordingly the gain or loss on part stake sale is recognised directly under equity and not accounted through the Statement of Profit and Loss. With respect of clarification dated May 15, 2017 issued by Ind AS Transition Facilitation Group, deferred tax liability has been provided by Parent Company if it is probable that the accumulated undistributed profits will be distributed in foreseeable future from subsidiary company. V. U. T. Impact of consolidation of a Trust Fund as per Ind AS 110. S. Additional construction services revenue recognised for service concession arrangement as per Ind AS 11 for Design-Build-Finance- Operate-Transfer (DBFOT) contracts with corresponding recognition of construction cost. Goodwill attributable to Cash Generating Units (CGUS) disposed of has been written down as per Ind AS 36. Under I-GAAP the same was measured at the portfolio level and was not being written down for disposal of CGUs within the overall portfolio. Preference Share Capital has been classified as financial liability as per Ind AS 32. The preference shares issued outside the group, were recognised as minority interests under I-GAAP. The minority interest is called non-controlling interest under Ind AS. Actuarial gains and losses pertaining to defined benefit obligations and re-measurement pertaining to return on plan assets are recognised in OCI in accordance with Ind AS 19 and are not reclassified to the Statement of Profit and Loss. Further, there are certain other items (as presented in OCI) that are accounted in OCI and subsequently reclassified to Profit and Loss in accordance with Ind AS requirements. Past service cost arising out of modifications in the post-retirement benefits is recognised in the Statement of Profit and Loss pursuant to Ind AS 19. Under I-GAAP the past service was amortised over a period. R. Q. Investments except investments in group companies have been fair valued in accordance with Ind AS 109. Other investments are fair valued through profit and loss. Under I-GAAP the current investments were carried at cost net of diminution in their value as on the Balance Sheet date. The long term investments were carried at cost net of diminution, other than temporary in nature, if any. Under Ind AS financial assets and liabilities are measured at fair value at the inception and subsequently at amortised cost or at fair value based on their classification. Under I-GAAP the financial assets and liabilities were measured at cost net of allowance. Deferred tax under Ind AS has been recognised for temporary differences between tax base and the book base of the relevant assets and liabilities. Under I-GAAP the deferred tax was accounted based on timing differences impacting the profit or loss for the period. The provision is made against trade receivables/loans based on "expected credit loss" model as per Ind AS 109. Under I-GAAP the provision was made when the receivable/loan turned doubtful/non performing asset based on the assessment on case to case basis and applicable regulations. ESOP charge is accounted using fair value method. Under I-GAAP, ESOP charge was calculated based on intrinsic value method. Pursuant to Ind AS 32, Foreign Currency Convertible Bonds (FCCB) issued by the Parent Company is split into equity and liability component and presented accordingly. The measurement of liability component is done at fair value at the inception and subsequently at amortised cost. Under I-GAAP, FCCB was accounted at cost and presented as borrowing. Provision is made under Ind AS towards constructive obligations of the Group related to payment of performance linked rewards to the employees and tax on ESOP benefits, wherever applicable. Under I-GAAP the cost was recognised on actual payments. In accordance with Ind AS 105, group(s) of assets classified as held for sale and liabilities associated with such group(s) is presented separately. Under I-GAAP there was no such requirement. Under Ind AS, the final dividend including related tax is recognised in the period in which the obligation to pay is established on its approval, post reporting of financial statements. Under I-GAAP, a provision was required to be made in the financial statements for the proposed final dividend in the period to which the liability related. Notes forming part of the Consolidated Financial Statements (contd.) NOTE [63] (contd.) M. Change in fair value of derivative instrument taken to hedge off-balance sheet item is accounted in the hedge reserve. Under I-GAAP the premium on these derivative instrument was recognised on accrual basis in the Statement of Profit and Loss under the respective line items to which the hedges related. N. O. P. 467 A Net Cash flows from investing activities (5.68) 5090.53 13.83 (263.88) Н Note HUKE DO Reclassification of net actuarial gain on employee defined benefit obligations to other comprehensive income VI Increase in borrowing cost pursuant to application of effective interest rate method V Impact of fair valuation of investments IV Provision for employee benefits based on constructive obligations Gain/(loss) on divestment of stake in subsidiary III || Impact of provision for expected credit loss | Net profit after tax as per I-GAAP 466 155.82 3.23 155.82 3.23 159.05 159.05 (701.83) Е (129.90) (831.73) 4703.75 Sr. crore Particulars no. 4388.70 315.05 (37.44) (147.22) (88.42) 13.88 4388.70 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [63] (contd.) (g) Effect of Ind AS adoption on Statement of Cash Flow for the year ended March 31, 2016: crore 155.82 Note Particulars Ind AS Adjustments Ind AS Net Cash flows from operating activities A (3233.91) I-GAAP 5535.48 E,G,M,O XII X X X VII Increase in borrowing cost due to initial fair valuation of long term financial liabilities IX Others D (304.74) A,F,I,M,Q 10.70 Other comprehensive income (net of tax) [attributable to owners of the Company] Total comprehensive income as per Ind AS (attributable to owners of the Company) Deferred and current taxes (8.17) Additional tax on dividend distributed by subsidiaries T (46.19) Net profit after tax as per Ind AS 4232.88 A,G,V 9160.56 (f) Statement of reconciliation of total comprehensive income for the year ended March 31, 2016: 8224.79 156.18 A,D,F Other non-current liabilities 224.33 411.15 424.66 (372.52) 797.18 A,N A,G,O,T Deferred tax liabilities (net) Provisions 61365.24 (24691.70) 86056.94 61223.84 141.40 (24448.15) (243.55) 384.95 Non-controlling interest A,P,T 43991.73 6768.78 188.63 (3875.94) 44180.36 24.96 2892.84 Non-current liabilities Financial liabilities Borrowings A,D,J,P 85671.99 Other financial liabilities A,F,M Liabilities 635.48 181.14 463 (676.37) 14896.75 Current maturities of long term borrowings A,D 13307.03 15573.12 (1292.13) Trade payables A,N,S 26202.74 800.82 27003.56 Other financial liabilities 12014.90 Company A,D Financial liabilities Notes forming part of the Consolidated Financial Statements (contd.) NOTE [63] (contd.) Particulars Note I-GAAP Ind AS Adjustments Borrowings Ind AS crore crore crore crore crore Current liabilities crore A,C,K,M 188.63 186.30 Loans 1583.37 (296.63) 1880.00 A Other bank balances 3806.54 (276.90) 4083.44 A,S Cash and cash equivalents 26024.98 (984.32) 27009.30 A,C,H Trade receivables 7494.19 935.77 crore crore crore crore A,B,C,D A,F 5361.99 4854.21 Financial assets Investments A,C,E 8179.48 (685.29) (507.78) 547.64 103.50 651.14 Group(s) of assets classified as held for sale C 25.03 TOTAL ASSETS 226797.74 40453.65 1554.43 (32071.59) 194726.15 EQUITY AND LIABILITIES: Equity Equity share capital Other equity Equity attributable to owners of the 1579.46 43805.43 (1492.94) A,H,M,T Loans towards financing activities A,H 18519.12 187.22 18706.34 Other financial assets 41946.59 А,Н (288.70) 2298.67 62806.35 (2241.12) 60565.23 Other current assets 2587.37 4397.36 186.30 43994.06 4322.44 104705.27 103522.24 1183.03 Total Income A,E Other income A,M,R Revenue from operations INCOME: crore crore crore crore crore crore Particulars Ind AS Ind AS Adjustments X Additional tax on dividend distributed by subsidiaries Equity as per Ind AS (attributable to owners of the Company) A,G,V (121.67) T (1546.90) (278.68) (1825.58) (274.10) LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [63] (contd.) (e) Effect of Ind AS adoption on the Statement of Profit and Loss for the year ended March 31, 2016: Note I-GAAP 44180.36 102879.69 EXPENSES: Manufacturing, construction and 1935.55 (101.36) 1834.19 Sub-contracting charges 19565.57 1223.29 Stores, spares and tools consumed 20788.86 862.98 (1377.84) (514.86) Other manufacturing, construction (74.92) and operating expenses Changes in inventories of finished goods, work-in-progress, stock-in- trade and property development Deferred and current taxes 1333.44 Purchase of stock-in-trade A,R operating expenses: Cost of raw materials, components consumed 13546.91 Excise duty 1333.44 890.55 13729.98 852.86 Construction materials consumed 20036.82 219.95 20256.77 183.07 (37.69) IX 101975.34 904.35 I, M, N, Q Particulars crore Sr. 464 (d) Statement of reconciliation of equity under Ind AS and equity reported under I-GAAP as at March 31, 2016: 194726.15 (32071.59) 13.88 13.88 226797.74 TOTAL EQUITY AND LIABILITIES C assets classified as held for sale Liabilities associated with group(s) of (7.66) 91.15 A 59480.25 (1242.60) 58237.65 Other current liabilities A,M 25337.63 Note (929.74) Provisions A,C,L,N 3706.75 (1403.23) 2303.52 Current tax liabilities (net) 24407.89 No. 83.49 Equity as per I-GAAP 145.19 Others VIII 2039.53 L 153.20 J Equity component of other financial instruments (Foreign Currency Convertible Bonds) VII Reversal of dividend & dividend distribution tax VI (380.56) D Increase in borrowing cost due to initial fair valuation of long term financial liabilities V (182.30) D A, D, F, H, Н | Provision for expected credit loss || Provision for employee benefits based on constructive obligations Increase in borrowing cost pursuant to application of effective interest rate method H K 43991.73 (488.31) III Gain on fair valuation of investments E 404.94 IV (1107.29) 3.54 3518.36 0.10 Provision for taxation 7.30 599.64 (0.00) 3112.54 0.04 0.29 (0.00) Profit before taxation 0.04 1562.94 (0.00) 0.00 (0.00) 33.41 | | (80.85) 12 Interim dividend preference 11 Interim dividend equity 449.01 2.82 0.00 (26.11) (0.00) 0.19 (0.00) 10 Profit after taxation 150.63 0.72 (0.00) 8.40 2.09 198.76 892.12 3117.96 0.00 Total equity and liabilities 538.67 9817.11 40.63 8040.91 0.15 3456N∞∞2-234 28.83 Liabilities 0.01 (9.66) 0.87 198.73 10939.66 11854.81 239.02 0.03 1.49 3109.31 Investments 2070.20 11854.81 10939.66 198.73 40.63 892.12 3117.96 0.00 Total assets 2070.20 Turnover 14 23-Aug-16 0.01 15 31-Mar-17 31-Mar-17 31-Mar-17 31-Mar-17 31-Mar-17 31-Mar-17 31-Mar-17 31-Mar-17 Financial year ending on Limited Private Limited Private Engineering Developer Limited Company Limited Private Currency financial year 22-Jan-16 400.00 9 money pending allotment) 02-Apr-09 1000.05 02-Sep-16 0.01 14-Jul-16 0.01 Exchange rate on the last day of 2.05 120.00 Share capital (including share application 1 09-Feb-98 04-Apr-06 29-Jul-97 Date of Acquisition 3.60 Hydrocarbon Infrastructure Marine L&T 43 42 41 Sr. No. 89.77 100.00 44 100.00 g 100.00 100.00 100.00 100.00 % of share holding 100.00 45 46 47 Seawoods Realty Private Limited Seawoods Ganges Retail Private Limited Bridge- Services Engineering Limited Technology Infrastructure Construction Equipment Limited no. Sahibganj L&T Thales L&T L&T Sr. Particulars 48 13 Proposed dividend- equity Proposed dividend - preference 8 7.74 applicable) 14 Proposed dividend - equity 13 Interim dividend preference 12 (86.00) Proposed dividend - preference Interim dividend equity 2.35 (5.49) (0.94) 16.67 0.00 4.87 11 94.11 15 66.62 Part A: "Subsidiaries” [as per Section 2(87) of the Companies Act, 2013] (contd.) Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures LARSEN & TOUBRO 472 $ Reporting as per the Companies (Accounting Standards) Rules 2006 (I-GAAP) Note: Share capital (including share application money pending allotment) includes money received against share warrants. % of share holding * 66.62 66.62 66.62 66.62 66.62 66.62 100.00 42.21 Profit after taxation 10 2.17 (0.04) 45.49 0.03 11.88 302.99 8 2648.06 7 0.75 4.26 0.07 2 13.35 Turnover Profit before taxation 18.92 94.11 0.69 0.68 0.04 (24.84) 0.00 2.67 (23.29) Provision for taxation 9 3.04 (4.81) (0.90) (8.17) 0.00 7.54 crore 7 Sr. No. 34 0.01 Share capital (including share application 1 14-Jun-12 24-Aug-10 09-Apr-07 3112.70 24-Jun-10 22-Jun-10 12-Sep-07 09-Jul-09 Date of Acquisition - - - 13-Nov-06 Exchange rate on the last day of financial year 161.05 198.13 1511.19 (30.85) 573.75 (0.27) 0.20 702.24 40.28 3.17 Other equity/Reserves and surplus (as 2 money pending allotment) 20.34 2068.55 2325.00 (0.02) Currency Financial year ending on 31-Mar-17 L&T Himachal L&T L&T L&T Power Development Company no. Private L&T Trustee 40 39 38 37 36 35 Sr. Particulars Limited Limited 31-Mar-17 31-Mar-17 31-Mar-17 31-Mar-17 31-Mar-17 Limited Limited Limited Services Technology L&T L&T Metro Rail (Hyderabad) Limited Nabha Power Limited Hydropower Arunachal Hydropower Uttaranchal Hydropower Limited 31-Mar-17 31-Mar-17 33 Other equity/Reserves and surplus (as 31-Mar-17 35.40 15.15 45.32 3.31 5.02 Total assets 1.77 12.01 11.22 12.01 15.15 45.32 3.31 5.02 Total equity and liabilities 394.33 1.99 394.33 1.77 (0.28) 1.83 30.83 258.97 9.35 88.94 11.22 92.12 4.91 10 Profit after taxation Provision for taxation Profit before taxation Turnover Investments 3.32 8.42 54.94 0.56 0.22 28-Jun-13 25-Jul-12 01-Jan-11 303.70 21-Jul-09 25-Apr-00 0.00 1.05 0.17 1.10 Share capital (including share application 1 14-Jun-99 02-Jan-01 27-Nov-12 0.34 money pending allotment) 2 Other equity/Reserves and surplus (as 7.90 17.40 0.92 3.93 Liabilities 34567822=2345 applicable) (1.27) 2.58 35.69 11.45 7.25 27.75 2.06 (0.01) 0.04 Date of Acquisition 3.73 0.45 63 Larsen & L&T Modular Servowatch Thalest Limited Toubro Hydrocarbon Larsen & 64 62 60 59 58 Larsen & Toubro International FZE no. L&T Realty 61 Sr. Particulars Larsen & Fabrication 2502.84 AED 17.66 Exchange rate on the last day of Currency 31-Mar-17 Financial year ending on Systems Limited Limited LLC International FZE LLC Toubro Qatar Toubro (East Asia) SDN. Yard LLC BHD 57 Sr. No. 84.28 0.45 2.73 2.15 0.02 (0.19) 0.32 39.38 15.43 1.58 0.02 (0.09) (0.44) 1.09 54.81 0.89 0.77 (0.44) 11 Interim dividend equity 63.12 84.28 84.28 84.28 84.28 100.00 84.28 15 14 % of share holding Proposed dividend - preference 13 Proposed dividend - equity 12 Interim dividend preference (8.80) (5.10) 3.62 110.14 financial year 4.85 (0.01) 0.48 7.61 (5.16) Profit before taxation 8 (0.01) 98.64 61.53 56.65 521.74 Turnover 1568.86 1.94 8786.61 8.96 (0.01) (35.92) (0.01) (0.01) 0.56 7.34 (6.87) Profit after taxation 703.36 10 267.04 (0.08) 0.27 1.71 Provision for taxation 9 (38.56) Investments 1943.91 6476.92 0.01 0.01 39.16 26.61 351.80 Liabilities 0.01 345678σ 2.76 545.62 (0.01) (0.01) (0.01) (4.77) applicable) 4931.25 1541.15 Total equity and liabilities 0.01 0.01 0.01 36.44 65.61 581.94 Total assets 1943.91 6476.92 0.01 0.01 0.01 36.44 65.61 581.94 (0.01) CNY 9.78 436.32 11 Technologies Technology Infotech Services Information Toubro South Africa Financial Infotech Canada Limited Toubro L&T 56 55 Larsen & L&T Infotech Toubro Infotech LLC Larsen & Inc. Services (Shanghai) Co., Ltd. ZAR 31-Dec-16 31-Mar-17 31-Mar-17 CAD 48.59 31-Mar-17 USD 64.85 31-Mar-17 CAD 48.59 (PTY) Limited 31-Mar-17 EURO 69.29 - - 31-Mar-17 Exchange rate on the last day of Currency Financial year ending on 31-Mar-17 USD 64.85 54 53 52 Larsen & 66.43 | | | |g 100.00 100.00 % of share holding 15 | | | 13 - Proposed dividend - equity 12 Interim dividend preference 234 14 13 Interim dividend equity Proposed dividend preference 100.00 100.00 100.00 Larsen & Toubro Infotech, GmbH Private Limited 51 50 Larsen & Toubro LLC AugmentIQ Data Sciences no. Sr. Particulars 49 Sr. No. crore Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] (contd.) Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures 473 97.00 100.00 2.64 Investments 3 16.86 23-Nov-61 18.00 04-Apr-62 8.29 0.01 Share capital (including share application 1 16-Jan-09 30-Nov-07 47.16 Date of Acquisition Exchange rate on the last day of 31-Mar-17 31-Mar-17 Private Limited 31-Mar-17 31-Mar-17 31-Mar-17 31-Mar-17 31-Mar-17 financial year Currency 14-Aug-08 22-Dec-06 0.05 4.79 (4.67) (0.01) 1018.80 585.58 87.39 0.01 (0.27) 2 money pending allotment) 0.05 0.05 15-Apr-11 09-Mar-06 Other equity/Reserves and surplus (as Financial year ending on Limited Private Sr. No. 100.00 100.00 100.00 | | 8 97.00 9 100.00 100.00 % of share holding 15 Proposed dividend - preference 14 Proposed dividend- equity 99.90 Sr. Particulars Kesun Iron no. L&T Cassidian Limited L&T Power Limited Ventures Limited L&T Vision Chennai Vision Developers L&T Realty Limited 16 15 14 13 12 11 L&T Valves Limited 10 EWAC Alloys Limited Company and Steel (0.02) 13 applicable) Liabilities 66.94 17.36 Provision for taxation 9 (0.00) 0.20 (59.52) (0.02) 0.01 259.17 187.48 52.34 (0.01) Profit before taxation a 8 10 (0.01) Proposed dividend preference 14 Proposed dividend - equity 13 Interim dividend preference 12 Profit after taxation (27.00) - Interim dividend equity 11 318.69 120.54 34.98 (28.20) 313.68 1503.19 210.38 0.01 1097.47 1543.44 156.50 0.02 Total equity and liabilities 6.24 0.00 10.86 0.01 31.51 939.86 60.82 0.28 0.09 4.93 0.03 Total assets Turnover 7 4.84 868.60 21.83 2.50 0.03 4.93 6.24 0.01 1097.47 1543.44 156.50 0.02 Investments 34560 15 Interim dividend preference (8.16) Date of Acquisition financial year - Exchange rate on the last day of - Currency 18-Sep-52 31-Mar-17 31-Mar-17 31-Mar-17 31-Mar-17 31-Mar-17 31-Mar-17 31-Mar-17 Financial year ending on Aggregates Limited 31-Mar-17 Seawoods Limited 11-Jul-95 17-Aug-15 35.60 2 Other equity/Reserves and surplus (as 1999.55 0.05 7.44 13-Mar-08 23-Jun-95 12-Dec-07 01-Jan-08 0.20 0.44 0.05 6.80 Share capital (including share application money pending allotment) 1 13-Nov-07 444.00 Rock Products & 8 L&T Hi-Tech Sr. No. crore Part A: "Subsidiaries” [as per Section 2(87) of the Companies Act, 2013] Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures LARSEN & TOUBRO 470 Sr. Particulars NOTES LARSEN & TOUBRO Technology | Engineering | Projects Construction | Manufacturing L&T partners the nation, industry and people to build a newer, brighter future. In critical sectors, such as defence, we provide the technology as well as the engineering and construction expertise to transform vision into reality. www.Larsentoubro.com パソコン Technology Leadership Strength for Peace Regd. Office: Larsen & Toubro Limited, L&T House, N. M. Marg, Ballard Estate, Mumbai - 400 001, INDIA CIN: L99999MH1946PLC004768 no. 1 2 7 6 L&T Electricals and Automation Limited Limited Private Shipbuilding Limited Limited Private Supply Company Limited Infotech Power Tools Limited L&T Bhilai Spectrum LTH Milcom L&T Cutting 5 4 31-Mar-17 USD 64.85 16.09 12 (0.11) (0.90) (0.89) (349.69) 1170.22 169.73 621.05 556.18 7.65 10.44 (0.02) (1.05) 25.02 Profit before taxation 16.20 167.93 2 11 Turnover 40.92 8.90 Interim dividend equity 11 32.13 4.89 (0.89) (348.34) Provision for taxation (0.02) 16.12 10 Profit after taxation 8.79 2.76 (1.35) (0.19) (0.86) 2.51 9.86 Investments 59.61 0.70 4077.29 0.02 14.37 8.81 212.48 31.91 34567∞ ∞ 2 9 8 applicable) 1211.39 9.16 Liabilities Total equity and liabilities 74.31 8.86 3423.42 68.82 7.24 3247.89 0.11 30.90 8.86 74.31 Total assets 3423.42 68.82 7.24 3247.89 0.11 30.90 (1273.40) 6 % of share holding 100.00 Debt Fund Infrastructure no. L&T Capital Mudit L&T Access Investment L&T Financial 32 31 30 29 28 27 L&T Infra L&T Infra 26 L&T Infra Investment Distribution (formerly Trustee Advisory Company Limited Company Consultants Private Limited Partners Partners Limited$ Finance Cement Services 25 L&T Sr. Particulars Sr. No. 12 Interim dividend equity 11 0.02 (25.81) 5.78 Interim dividend preference 16.04 248.66 937.56 (6.99) Profit after taxation 10 (0.01) 136.41 13 Proposed dividend - equity | | | 66.62 66.62 66.62 66.62 66.62 66.62 84.28 100.00 % of share holding 15 Proposed dividend - preference 14 (140.33) (140.33) (160.96) Limited (1.46) Limited Private 53.11 0.05 406.88 0.03 2.15 3404.19 6.81 21983.82 345 applicable) 10.00 (15.74) (18.18) 87.71 Liabilities (0.05) Total equity and liabilities 4213.11 39.48 3.22 513.34 0.08 15.20 4213.11 24864.67 24864.67 16.86 39.48 3.22 513.34 0.08 15.20 Total assets 8.05 232.95 1988.76 31-Mar-17 31-Mar-17 31-Mar-17 Limited) 31-Mar-17 31-Mar-17 31-Mar-17 31-Mar-17 Currency 31-Mar-17 Properties Vrindavan Limited Limited known as L&T Private Financial year ending on Exchange rate on the last day of financial year Date of Acquisition Other equity/Reserves and surplus (as 2 money pending allotment) 06-Apr-00 0.05 01-Nov-90 2.10 29-Nov-11 21.35 16-Jun-11 18.75 12-Aug-11 0.10 5.00 30-May-11 19-Mar-13 575.97 892.09 Share capital (including share application 1 18-Apr-06 Limited$ 95.00 12.38 (3.55) 31-Mar-17 31-Mar-17 31-Mar-17 31-Mar-17 31-Mar-17 31-Mar-17 31-Mar-17 31-Mar-17 Financial year ending on Family Credit Limited L&T Mutual Fund Trustee Investment Management Limited $ Limited (formerly known as Limited) Markets Currency financial year money pending allotment) 0.15 30-Apr-96 25-Apr-96 251.82 07-Feb-13 49.75 22-Nov-94 1440.05 Exchange rate on the last day of 31-Aug-94 129.65 23-Dec-96 17.07 45.60 Share capital (including share application 1 06-Nov-09 Date of Acquisition 01-May-08 3087.19 L&T L&T Capital L&T Finance Limited$ 74.00 99.99 68.00 (0.00) 0.20 2g 471 8 100.00 (0.02) 0.01 88. 81 100.00 100.00 Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures crore Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] (contd.) L&T Housing Finance Limited $ L&T Finance Holdings Limited *$ Toubro Infotech Limited 24 23 22 21 20 19 18 Larsen & L&T Aviation Services Private Limited no. Sr. Particulars 17 Sr. No. 2 73.80 Other equity/Reserves and surplus (as 2236.54 948.42 277.58 6182.90 25.36 Turnover 7 4082.05 1.33 5.12 3096.97 435.50 5644.17 1231.03 Investments 109.37 6 49.66 0.05 246.60 (2.71) Provision for taxation 9 0.01 (25.81) 345.94 4.32 210.21 245.11 1184.16 (9.70) Profit before taxation 8 28.42 1.64 517.80 26.65 11.07 29097.44 8010.96 1054.03 1236.00 52.56 53.17 Liabilities applicable) 1.44 212.81 (34.17) 5439.34 675.63 3 0.05 4 Total equity and liabilities 35976.83 8816.25 6377.76 4212.90 88.95 Total assets 5 1.64 517.80 26.65 35976.83 8816.25 6377.76 4212.90 88.95 (9.21) 2959.83 31-Dec-16 18 31-Mar-17 GBP 80.90 31-Mar-17 31-Mar-17 31-Mar-17 31-Mar-17 31-Mar-17 31-Mar-17 31-Mar-17 Financial year ending on Tollway Limited # Limited # Walajahpet Tollbridge Infrastructure Tollway Road Corridor Limited # Limited # Limited # Limited # 31-Mar-17 Exchange rate on the last day of 24-Sep-97 20-May-99 02-Feb-06 57.16 43.50 23-Dec-05 02-Nov-05 56.50 Currency 78.75 Share capital (including share application 1 02-Nov-05 21-Jul-05 Date of Acquisition financial year 84.30 23-Apr-10 Limited # Tollways 99 98 97 Panipat Elevated no. Sr. Particulars Sr. No. Krishnagiri crore Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures SAR 18.11 $ Reporting as per the Companies (Accounting Standards) Rules 2006 (I-GAAP) 476 Note: # Refer Note 54(a). 97.45 Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] (contd.) Limited # Western 101 Toll Road Corridor Krishnagiri India Transportation L&T L&T 100 Vadodara L&T Western Bharuch Andhra Thopur 104 103 102 L&T Interstate 13.95 41.40 90.00 156.08 123.68 187.92 41.21 35.41 10 Profit after taxation 1.24 Provision for taxation Turnover Investments 9 1103.01 254.25 104.50 Profit before taxation 433.91 58.45 66.69 0.19 0.65 (25.07) 14.17 1.25 12.60 132.90 22.31 21.06 (37.84) 133.54 25.08 48.05 265.86 10.02 790.37 226.75 425.02 Liabilities 34567822-2345 applicable) 13.16 143.28 19.71 497.97 47.59 (84.59) (156.13) (323.52) Other equity/Reserves and surplus (as 2 money pending allotment) (304.91) 502.40 254.84 1051.78 258.75 Total assets 1103.01 254.25 104.50 433.91 790.37 226.75 425.02 258.75 Total equity and liabilities 999.85 69.57 70.84 329.16 60.00 65.00 51.00 60.00 01-Jan-05 5.29 50.00 0.01 30.00 25-Nov-10 02-Sep-10 02-Sep-10 158.85 17-Jun-10 0.05 Share capital (including share application 1 23-Feb-99 Date of Acquisition financial year 01-Jul-09 566.60 31-Mar-17 26-Feb-01 money pending allotment) 0.59 Liabilities 3456 applicable) 2443.73 303.88 2321.06 (12.65) 0.64 28.07 (1207.69) 0.33 Other equity/Reserves and surplus (as 2 (13.86) 31-Mar-17 31-Dec-16 OMR 176.43 - Private Limited # Machinery Offshore Private Limited # Heavy Forgings Company Private Limited # Private Limited # L&T Kobelco L&T Howden L&T Special Steels and Aluminium no. Raykal Sr. Particulars L&T Sapura 94 Larsen and Toubro Electromech LLC # 95 96 Exchange rate on the last day of Currency 31-Mar-17 31-Mar-17 31-Mar-17 Limited #$ Private Limited # 31-Mar-17 31-Mar-17 Financial year ending on Projects Development Private Limited # Shipping Infrastructure L&T L&T Sapura 2193.08 4.60 136.53 59.72 (254.65) (0.03) Profit after taxation 0123 11 (0.31) 18.63 0.29 Provision for taxation 9 (284.83) 26.13 (50.62) 0.32 11.89 0.07 (0.22) 1.83 (52.45) 50.10 74.00 75.50 % of share holding 15 Proposed dividend - preference 0.63 14 Interim dividend preference Interim dividend equity (222.22) 25.55 (62.61) 0.58 | Proposed dividend - equity 30.52 (254.65) (0.03) Investments Total assets 5809.89 857.33 216.99 95.86 0.97 10.59 1551.99 0.97 Total equity and liabilities 1045.10 394.60 224.35 194.60 1551.99 194.60 10.59 Profit before taxation 8 571.20 138.77 142.49 44.10 157.10 129.96 Turnover 7 3371.70 5809.89 857.33 216.99 95.86 9.94 3.93 0.38 (12.92) Tollway Limited # L&T L&T Rajkot- PNG 117 116 Vadinar 115 Tollway Sambalpur Rourkela no. L&T Sr. Particulars 113 114 L&T IDPL Trustee Manager Pte. Ltd. # Sr. No. Chennai - Limited # 16-Feb-09 SGD 46.41 30-Sep-13 18-Oct-13 Date of Acquisition Exchange rate on the last day of financial year Currency Tollway Tada Tollway 31-Mar-17 31-Mar-17 31-Mar-17 31-Mar-17 Financial year ending on Limited # Limited # 31-Mar-17 crore Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] (contd.) Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures 13 Proposed dividend - equity Interim dividend preference 12 Interim dividend equity 11 21.03 14 (0.33) (0.02) (291.19) (51.48) (189.56) (3.52) Profit after taxation 10 (107.05) 15 45 Proposed dividend - preference 477 Note: # Refer Note 54(a). 97.45 G 97.45 97.45 97.45 97.45 5 97.45 5 47.75 5 97.45 % of share holding 08-Sep-08 8.92 24-Mar-08 Share capital (including share application money pending allotment) 97.45 97.45 % of share holding 15 Proposed dividend - preference 14 72.11 Proposed dividend - equity Interim dividend preference 12 Interim dividend equity 11 Profit after taxation 10 13 Provision for taxation 97.45 Note: # Refer Note 54(a). 478 (4.86) (58.02) (220.52) (0.16) (0.53) 97.45 (4.86) (220.52) (0.16) (0.53) 93.45 545.31 22.82 (58.02) 9 Profit before taxation 8 850.71 Liabilities (5.06) (122.56) (455.67) (5.42) 0.06 (2.97) 23456 42.00 110.00 169.10 6.10 290.03 Other equity/Reserves and surplus (as applicable) 1473.96 980.61 382.75 Turnover 7 Investments 419.69 968.05 1187.39 0.74 1137.77 Total assets 419.69 968.05 1187.39 0.74 1137.77 Total equity and liabilities 1 93 Provision for taxation (0.33) Tollway Limited # Limited # Tollway Maliya Shamlaji Hassan Tollway Limited # Kachchigarh Limited # no. L&T Deccan L&T L&T BPP L&T Port Ahmedabad- L&T Halol Kudgi Devihalli Tollway Limited # Exchange rate on the last day of Currency 31-Mar-17 31-Mar-17 Tollway Limited # 31-Mar-17 31-Mar-17 Samakhiali 31-Mar-17 31-Mar-17 31-Mar-17 Financial year ending on Transmission Limited # Tollways Limited # Gandhidham 31-Mar-17 Sr. Particulars 112 111 13 Proposed dividend- equity | | │ Interim dividend preference 12 11 Interim dividend equity (25.34) 14 27.09 8.67 17.71 9.83 20.41 (37.84) 0.27 0.87 Proposed dividend - preference 15 % of share holding 110 109 108 107 106 105 Sr. No. 97.45 98.12 97.45 97.45 97.45 97.45 97.45 97.45 financial year 29.95 Date of Acquisition 1 1677.25 4743.61 5.00 1360.24 1181.84 371.34 1103.02 Investments 2970.30 1103.02 1677.25 4743.61 5.00 1360.24 Total assets 1181.84 2970.30 46.55 (107.05) (0.02) (291.19) (51.48) 271.72 292.16 158.25 2.37 307.46 74.01 (189.56) (3.52) Profit before taxation 50.64 Turnover 2.25 177.01 371.34 Total equity and liabilities 2699.67 (25.97) Other equity/Reserves and surplus (as 2 money pending allotment) 30-Aug-13 192.60 20-Dec-11 218.84 (317.27) 05-Feb-10 80.54 4.16 30-Apr-08 09-Sep-08 149.00 09-Sep-08 796.34 90.00 Share capital (including share application 25-May-11 247.20 (44.95) (4.62) (246.54) 886.70 1672.31 4742.95 5.46 1256.19 702.77 307.31 Liabilities 3456-802 9 7 applicable) 78.03 (2.52) (75.60) 27-Apr-10 92 LARSEN & TOUBRO 90 28.52 27.10 122.15 0.02 Liabilities 34567∞∞22 1670.14 applicable) (466.91) (347.54) 191.37 15.97 (45.13) (34.02) 390.13 (0.19) 686.11 258.82 46.26 26.34 119.26 0.05 Total assets 795.48 633.82 168.72 1887.55 46.26 26.34 119.26 0.05 Total equity and liabilities 356.68 1887.55 Other equity/Reserves and surplus (as money pending allotment) 31-Dec-16 SAR 18.11 AED 17.66 31-Mar-17 31-Dec-16 KWD 221.87 SAR 17.29 NGN 0.22 31-Dec-16 SAR 18.11 31-Mar-17 Exchange rate on the last day of Currency Financial year ending on Industries LLC Bhd. & Asphalt Concrete 31-Dec-16 2 31-Dec-16 SAR 18.11 MYR 29-May-07 146.53 08-Jul-07 1.81 01-Jul-12 18.11 22-Jun-99 26.04 27-Jun-06 1.77 29-Nov-06 44.37 31-Mar-17 22-Aug-06 31.13 Share capital (including share application 1 15-Jul-04 Date of Acquisition financial year 14.65 0.22 356.68 168.72 795.48 Henikwon Corporation Sdn. Bhd. no. Sr. Particulars 75 74 73 Tamco Sr. No. 75.00 75.00 100.00 49.00 18 49.00 100.00 100.00 Electrical 76 Larsen & Technology Toubro T&D SA General Trading & Contracting Company W.L.L Ltd. FZE L&T PT Tamco Indonesia 80 Kana Controls 78 77 L&T Electrical & Automation Toubro Heavy Engineering LLC Australia Pty Industries 79 Larsen & 100.00 Proposed dividend preference % of share holding 45 (8.70) 10 Profit after taxation Provision for taxation 9 Profit before taxation 8 (0.49) 742.61 619.70 2626.72 94.77 62.47 Turnover Investments 35.25 (9.40) 380.73 (271.02) (17.63) 15 14 13 Proposed dividend - equity Interim dividend preference 12 11 Interim dividend equity 61.75 (17.63) (271.02) 10.49 42.10 338.63 (9.40) (0.49) (8.70) 72.24 Contracting Company, W.L.L Saudia LLC (Malaysia) Sdn. Switchgear Toubro ATCO Investments Total assets 1.50 5.54 269.11 31.76 Turnover 7.19 1590.97 10.14 Total equity and liabilities 4 5 6 7 0.89 4.91 5.63 278.11 10.14 5.63 0.12 Profit before taxation 8 2.31 455.97 35.81 1590.97 12.13 664.48 1.50 5.54 269.11 31.76 7.19 0.70 50.39 6.03 123.93 28-Aug-87 20.63 21-Feb-75 1.08 17-Jun-13 0.91 25-Sep-01 1779.16 15.89 Share capital (including share application 05-Jul-06 50.89 1 Date of Acquisition financial year 31-Dec-16 QAR 18.65 31-Mar-15 MYR 16.88 31-Dec-16 OMR 176.43 31-Mar-17 GBP 80.90 27-Jan-08 13-Jun-96 1.27 31-Mar-04 0.37 0.08 Liabilities 3 applicable) 0.24 (0.64) (59.89) (39.26) 6.11 (1.31) (312.12) (5.84) Other equity/Reserves and surplus (as 2 money pending allotment) (33.56) (Proprietary) (0.35) (14.73) L&T Electricals L&T Overseas Projects Nigeria Limited no. Sr. Particulars 66 65 & Automation Sr. No. Part A: "Subsidiaries” [as per Section 2(87) of the Companies Act, 2013] (contd.) Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures LARSEN & TOUBRO 474 49.00 8 crore 30.00 67 Larsen & Toubro Kuwait 69 Arabia LLC Tamco 72 71 Larsen & 91 Larsen & Toubro (Saudi Arabia) LLC 68 Readymix Construction Company Limited LLC Saudi Arabia Toubro Larsen & 70 General 65.00 18 100.00 6.70 (14.73) 0.33 (0.35) (33.56) 0.12 (0.39) Profit after taxation (0.06) Provision for taxation 9 (0.08) (0.39) 6.70 10 (0.08) 11 13 100.00 8 100.00 8 100.00 100.00 81 % of share holding Proposed dividend - preference Proposed dividend - equity 12 Interim dividend preference Interim dividend equity -2345 15 14 0.27 Services LLC Larsen Toubro Financial year ending on 1812.59 0.37 Liabilities 34 applicable) (527.74) 21.32 695.78 49.79 269.63 1.39 (35.78) 0.24 2 Other equity/Reserves and surplus (as 15.55 710.60 3317.60 8.29 0.85 Total assets 5 2586.32 3822.62 31.84 35.62 90.98 23.06 1828.69 0.85 Total equity and liabilities 2403.46 2892.74 3612.94 27-Dec-06 09-Oct-06 234.10 11-Jan-08 8.00 Exchange rate on the last day of Currency 31-Mar-17 Financial year ending on Limited # Private EURO 69.29 Limited # Private Turbine Boilers L&T-MHPS 88 87 L&T-MHPS Generators 31-Mar-17 USD 64.85 31-Mar-17 EURO 69.29 31-Dec-16 OMR 176.43 05-May-95 5.57 29-Jan-94 25.71 01-Feb-16 0.35 51.88 0.24 Share capital (including share application money pending allotment) 1 24-Feb-16 18-Jun-15 Date of Acquisition financial year 31-Mar-17 31-Mar-17 31-Mar-17 31-Mar-17 1828.69 86 L&T-Gulf Private Limited # 23.06 31.84 12 Interim dividend equity 11 (5.94) 221.28 2.08 Interim dividend preference 2.78 1.55 (36.42) 0.31 Profit after taxation 10 25.45 15.22 110.85 13 14 Limited 89 Sr. No. 51.00 51.00 50.0002 Proposed dividend- equity 50.0001 84.28 100.00 84.28 % of share holding 15 Proposed dividend - preference 65.00 1.40 1.05 0.01 65.78 6.07 Turnover 7 39.10 687.37 3704.49 0.70 1112.32 0.00 Investments 6 2586.32 3822.62 37.78 112.51 20.61 2490.66 0.51 0.08 Provision for taxation 9 19.51 332.13 3.48 3.83 15.23 2.06 (36.42) 0.39 Profit before taxation 8 910.26 3612.94 L&T-Sargent and Lundy Limited # 90.98 Information Technology Spain SL 0.28 22.36 219.76 266.70 104.55 8.04 132.74 21.75 345 6 x applicable) (45.10) (1.02) (3.03) 116.76 Liabilities (51.56) Total equity and liabilities 19.37 12.55 Profit before taxation Turnover Investments Total assets 8 12.55 7 87.70 2.90 21.46 338.29 359.29 66.31 6 (70.34) (18.65) Other equity/Reserves and surplus (as ZAR 4.85 31-Mar-17 31-Mar-17 31-Mar-17 KWD 212.80 31-Mar-17 AED 17.66 31-Dec-16 OMR 176.43 USD 64.85 IDR 0.01 MYR 14.65 Exchange rate on the last day of Currency 31-Mar-17 31-Dec-16 Toubro (Oman) LLC 31-Mar-17 AUD 49.58 financial year Date of Acquisition 18-May-87 2 money pending allotment) 0.06 3.64 26-Jun-14 06-Sep-10 10-Sep-13 2.13 04-Apr-08 1.77 07-Apr-08 99.95 13.32 27-Mar-92 15-Apr-83 81.67 9.45 Share capital (including share application 1 19.37 66.31 (7.36) 338.29 (24.20) 0.14 49.00 100.00 70.00 18 72.50 100.00 100.00 % of share holding 15 Proposed dividend preference 14 Proposed dividend - equity 100.00 89.77 475 Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures 85 84 Larsen & 359.29 L&T L&T Global Holdings Limited LLC L&T Infotech Austria GMBH no. Sr. Particulars 83 82 81 Sr. No. Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] (contd.) crore 13 Interim dividend preference Sg (1.83) (22.02) (19.05) (7.58) (0.74) 159.94 43.35 277.07 217.29 47.80 14.75 28.17 87.70 12 2.90 21.46 0.35 (20.59) 0.14 (1.83) Provision for taxation Interim dividend equity 1.88 3.61 11 10 Profit after taxation (0.74) 9 (7.58) (20.93) (22.02) 0.35 2 Shares of Associate/Joint Ventures held by the company at the year end Number 31-Mar-17 31-Mar-15 31-Mar-17 Latest audited Balance Sheet Date 9,000 Sr. No. 21,26,000 7,35,000 Amount of Investment in Associates/Joint Venture (crore) 1 4.42 0.39 2.13 875 PJSC 7 Industries Part B:" Associates/Joint ventures" [as per Section 2(6) of the Companies Act, 2013] (contd.) 6 0.56 8 9 Particulars Sr Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures No. Magtorq Private Limited Indiran Engineering Projects and Systems Kish Grameen Capital India Limited Gujarat Leather Limited Total No of shares A. M. NAIK 1,750 Considered in Consolidation Not Considered in Consolidation 0.14 (0.04) (0.26) Notes: 1. Significant influence is demonstrated by holding 20% or more of the voting power of the investee. 2. The Incorporated joint venture is not required to be audited as per regulatory laws in Iran. Hence the management certified accounts have been considered for consolidation. 3. There is restriction on transferring the resources to the share holder and hence the same has not been considered for consolidation 4. The associate company is under liquidation process and investment is fully provided in the accounts. Group Executive Chairman (DIN 00001514) M. DAMODARAN (DIN 02106990) 479 SUBODH BHARGAVA (DIN 00035672) R. SHANKAR RAMAN Chief Financial Officer & Whole-time Director (DIN 00019798) Profit (Loss) for the year (crore) 6 (0.14) 4.58 Extent of Holding % 42.85% 50.00% 81,77,887 23.84% Refer Note 4 50.00% 3 21,003 Description of how there is significant influence 4 Reason why the associate/joint venture is not consolidated Refer Note 2 Refer Note 3 Refer Note 4 5 Net worth attributable to Shareholding as per latest audited Balance Sheet (crore) Refer Note 1 0.02 3 3.34 LLC 1 Latest audited Balance Sheet Date 31-Mar-17 31-Mar-17 31-Mar-16 31-Dec-16 31-Dec-16 2 Shares of Associate/Joint Ventures held by the company at the year end Number Amount of Investment in Associates/Joint Venture (crore) 37,90,000 45,00,000 Contracting 98,30,000 & HBK L&T Qatar Part B:” Associates/Joint ventures” [as per Section 2(6) of the Companies Act, 2013] Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures SUNITA SHARMA (DIN 02949529) Sr. No. 1 2 4 5 Sr Particulars No. Feedback Infra Private Limited L&T- Chiyoda Limited International Seaports (Haldia) Private Limited L&T Camp Facilities LLC 2,450 100 37.90 Reason why the associate/joint venture is not consolidated 5 Net worth attributable to Shareholding as per latest audited Balance Sheet (crore) 15.65 43.85 14.32 3.04 (3.51) 60 Profit (Loss) for the year ( crore) Considered in Consolidation Not Considered in Consolidation 24.54 7.79 4 Refer Note 1 Description of how there is significant influence 3 4.50 9.83 4.33 0.18 Total No of shares 1,63,61,704 90,00,000 2.46 4,40,58,020 200 Extent of Holding % 15.42% 50.00% 21.74% 49.00% 50.00% 5,000 M.M.CHITALE (DIN 00101004) Every year, L&T and its people receive a number of national and international awards that acknowledge its varied accomplishments. Presented by the media, industry associations, independent bodies and academia, they honour the Company's contribution in various spheres of business, technology, financial performance, growth and environmental protection. SANJEEV AGA (DIN 00022065) Thank You, N. Hariharan Company Secretary M. No. A3471 Name & Address of the Shareholder Folio No./DP ID/ Client ID Kindly put a tick in relevant columns below. ATTRIBUTES Transfer/Transmission/Demat/Remat of Shares Issue of Duplicate Share Certificates Issue of shares - on demerger/bonus - 2004, 2006, 2008, 2013 & 2017 Please indicate your satisfaction level Delighted Satisfied We would be grateful, if you could spare your valuable time to fill the questionnaire given below and send it back to us at the Registered Office address mentioned above so that we will be able to implement corrective actions as a requirement of ISO 9001: 2015 standard. Alternatively, a softcopy of the questionnaire can be downloaded from the Investors section on our website www.Larsentoubro.com. The duly filled in questionnaire can be sent by e-mail to IGRC@Larsentoubro.com. Dissatisfied It has been our constant endeavor to provide best of the services to our valuable shareholders and maintain highest level of Corporate Governance in this Company. In order to further improve shareholder service standards, we seek your inputs through this survey. Shareholder's Satisfaction Survey Form – 2017 སྱེལེ (2) (3) This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company not less than 48 hours before the commencement of the meeting. A Proxy need not be a member of the Company. A person can act as a proxy on behalf of members not exceeding fifty and holding in the aggregate not more than 10% of the total share capital of the Company carrying voting rights. A member holding more than 10% of the total share capital of the Company carrying voting rights may appoint a single person as proxy and such person shall not act as a proxy for any other person or shareholder. **(4) This is only optional. Please put a 'X' in the appropriate column against the resolutions indicated in the Box. If you leave the 'For' or 'Against' column blank against any or all the resolutions, your Proxy will be entitled to vote in the manner as he/she thinks appropriate. Appointing a proxy does not prevent a member from attending the meeting in person if he/she so wishes. (5) 56 (6) In the case of jointholders, the signature of any one holder will be sufficient, but names of all the jointholders should be stated. 482 LARSEN & TOUBRO LIMITED CIN L99999MH1946PLC004768 Regd. Office L&T House, Ballard Estate, Mumbai 400 001. Tel. No.: (022) 6752 5656, Fax No.: (022) 6752 5893 Email: IGRC@Larsentoubro.com, Website: www.larsentoubro.com Dear Shareholders, 483 ATTRIBUTES Issue of duplicate dividend warrants Delighted YES/NO Signature Disclaimer: L&T will keep the information provided by you as confidential and it will not be used in any way that is detrimental to you. 484 AWARDS & RECOGNITION For details of recent awards, please visit www.Larsentoubro.com CBMC/07/2017/RDP Printed by Burda Druck India Pvt. Ltd. PRINTED ON CLED PAPER PRINTED ON LED PAPER LARSEN & TOUBRO RECYCLED Dissatisfied Please indicate your satisfaction level Satisfied Date: Any suggestions? Dividend through ECS/ Warrants/ Demand Drafts Responses to queries/complaints Interaction with Company/ R&T Agent personnel Presentation of information on Company's website Quality and Contents of Annual Report 2016-17 (1) Please give your overall rating of our investor 5 highly statisfied) = Did you find the e-mail id IGRC@Larsentoubro.com for redressal of Investors' Grievances useful? Give details of outstanding grievances, if any service (1 to 5 where 1 = highly dissatisfied and Note: Signature of proxy holder(s) Signature of shareholder: 1) of having e-mail id 2) of having e-mail id 3) of having e-mail id or failing him or failing him and whose signature(s) are appended below as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the Seventy Second Annual General Meeting of the Company, to be held at St. Andrews Auditorium, St. Dominic Road, Bandra (West), Mumbai - 400050 on Tuesday, August 22, 2017 at 3.00 P.M. and at any adjournment thereof in respect of such resolutions as are indicated below: ** I wish my above Proxy to vote in the manner as indicated in the box below: Item No. 1 shares of LARSEN & TOUBRO LIMITED, hereby appoint: I/We, being the holder(s) of DP ID Folio No./Client ID Mumbai, May 29, 2017 N.HARIHARAN Company Secretary M. No. A3471 VIKRAM SINGH MEHTA (DIN 00041197) 480 Directors LARSEN & TOUBRO PROXY FORM Resolutions [Pursuant to Section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies (Management and Administration) Rules 2014] Registered Address LARSEN & TOUBRO LIMITED CIN L99999MH1946PLC004768 Regd. Office L&T House, Ballard Estate, Mumbai 400 001. Tel. No.: (022) 6752 5656, Fax No.: (022) 6752 5893 Email: IGRC@Larsentoubro.com, Website: www.Larsentoubro.com Email ID Name of the member(s) SUSHOBHAN SARKER (DIN 00088276) Adoption of audited financial statements for the year ended March 31, 2017 and the Reports of the Board of Directors and Auditors thereon and the audited consolidated financial statements of the Company and the reports of the auditors thereon for the year ended March 31, 2017. 2 Item No. Resolutions 12 Issue listed/unlisted secured/unsecured redeemable non-convertible debentures, in one or more series/tranches/ currencies, aggregating up to 6000 crore. 13 Ratification of appointment of M/s. Deloitte Haskins & Sells LLP as Statutory Auditors of the Company. 14 Ratification of remuneration payable to M/s R. Nanabhoy & Co. Cost Accountants (Regn. No. 00010) for the financial year 2017-18. For Against Affix a 1 Rupee Revenue Signed this day of 2017 Stamp 481 Raise funds through issue of convertible bonds and/or equity shares through depository receipts and including by way of Qualified Institution Placement ('QIP'), to Qualified Institutional Buyers ('QIB') for an amount not exceeding 4000 Crore or US $ 600 million, whichever is higher. 11 Appoint Mr. Jayant Damodar Patil (DIN: 01252184) as a Whole-time Director of the Company. Dividend on equity shares for the financial year 2016-17. 3 Appoint Mr. Sushobhan Sarker (DIN: 00088276) as a Director liable to retire by rotation. 4 Appoint Mr. Shailendra Roy (DIN: 02144836) as a Director liable to retire by rotation. 5 Appoint Mr. R. Shankar Raman (DIN: 00019798) as a Director liable to retire by rotation. For Against 6 7 Appoint Mr. S.N. Subrahmanyan (DIN: 02255382) as the Chief Executive Officer and Managing Director of the Company. 8 Appoint Mr. Jayant Damodar Patil (DIN: 01252184) as a Director liable to retire by rotation. 9 Appoint Mr. Arvind Gupta (DIN: 00090360) as a Director liable to retire by rotation. 10 Re-appoint Mr. Subodh Bhargava (DIN: 00035672) as an Independent Director. 48 graduate qualifications in business RESOLVED FURTHER THAT the Board be and is hereby authorised to create necessary charge on such of the assets and properties (whether present or future) of the Company in respect of Securities and to approve, accept, finalize and execute facilities, sanctions, undertakings, agreements, promissory notes, credit limits and any of the documents and papers in connection with the issue of Securities. RESOLVED FURTHER THAT for the purpose of giving effect to any offer, issue or allotment of Securities, the Board, be and is hereby authorised on behalf of the Company to do all such acts, deeds, matters and things as it may, in absolute discretion, deem necessary or desirable for such purpose, including without limitation, the determination of the terms thereof, for entering into arrangements for managing, underwriting, marketing, listing and trading, to issue placement documents and to sign all deeds, documents and writings and to pay any fees, commissions, remuneration, expenses relating thereto and with power on behalf of the Company to settle all questions, difficulties or doubts that may arise in regard to such offer(s) or issue(s) or allotment(s) as it may, in its absolute discretion, deems fit. RESOLVED FURTHER THAT the Equity Shares to be offered and allotted shall be in dematerialized form. ii) in case of allotment of eligible convertible securities, either the date of the meeting in which the Board decides to open the issue of such convertible securities or the date on which the holders of such convertible securities become entitled to apply for the equity shares, as may be determined by the Board. RESOLVED FURTHER THAT the Equity Shares so issued shall rank pari passu with the existing Equity Shares of the Company in all respects. in case of allotment of equity shares, the date of meeting in which the Board decides to open the proposed issue i) RESOLVED FURTHER THAT in case of QIP issue the relevant date for determination of the floor price of the Equity Shares to be issued shall be - RESOLVED FURTHER THAT in case of QIP issue it shall be completed within 12 months from the date of passing of this resolution. deems fit and to make and accept any modifications in the proposals as may be required by the authorities involved in such issue(s) in India and/or abroad, to do all acts, deeds, matters and things and to settle any questions or difficulties that may arise in regard to the issue(s). RESOLVED FURTHER THAT for the purpose of giving effect to the above, the Board be and is hereby also authorised to determine the form, terms and timing of the issue(s), including the class of investors to whom the Securities are to be allotted, number of Securities to be allotted in each tranche, issue price, face value, premium amount in issue/conversion/exercise/ redemption, rate of interest, redemption period, listings on one or more stock exchanges in India or abroad as the Board may in its absolute discretion and/or equity shares through depository receipts, including by way of Qualified Institutions Placement ('QIP'), to Qualified Institutional Buyers ('QIB') in terms of Chapter VIII of the SEBI Regulations, through one or more placements of Equity Shares (hereinafter collectively referred to as "Securities"), whether by way of private placement or otherwise as the Board may determine, where necessary in consultation with the Lead Managers, Underwriters, Merchant Bankers, Guarantors, Financial and/or Legal Advisors, Rating Agencies/Advisors, Depositories, Custodians, Principal Paying/Transfer/ Conversion agents, Listing agents, Registrars, Trustees, Auditors, Stabilizing agents and all other Agencies/Advisors so that the total amount raised through issue of the Securities shall not exceed 4000 Crore (Rupees Four Thousand Crore) or US $600 Mn (US Dollars Six Hundred Million), if higher. LARSEN & TOUBRO 42 Disclosure Requirements) Regulations, 2015, enabling provisions in the Memorandum and Articles of Association of the Company as also provisions of any other applicable laws, rules and regulations (including any amendments thereto or re-enactments thereof for the time being in force) and subject to such approvals, consents, permissions and sanctions of the Securities and Exchange Board of India (SEBI), Government of India (GOI), Reserve Bank of India (RBI) and all other appropriate and/or concerned authorities, or bodies and subject to such conditions and modifications, as may be prescribed by any of them in granting such approvals, consents, permissions and sanctions which may be agreed to by the Board of Directors of the Company ('Board') (which term shall be deemed to include any Committee which the Board may have constituted or hereafter constitute for the time being exercising the powers conferred on the Board by this resolution), the Board be and is hereby authorized to offer, issue and allot in one or more tranches, to Investors whether Indian or Foreign, including Foreign Institutions, Foreign Institutional Investors, Foreign Portfolio Investors, Foreign Venture Capital Fund Investors, Venture Capital Funds, Non- resident Indians, Corporate Bodies, Mutual Funds, Banks, Insurance Companies, Pension Funds, Individuals or otherwise, whether shareholders of the Company or not, through an issue of convertible bonds for the time being in force) as amended from time to time, Foreign Exchange Management Act, 1999, Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 ('SEBI Regulations'), SEBI (Listing Obligations and fit, to pass with or without modification(s) as a SPECIAL RESOLUTION the following: "RESOLVED THAT in supersession of the resolution no. 17 passed by the Members at the 71st Annual General Meeting of the Company held on August 26, 2016 in this regard and in accordance with the provisions of Sections 41, 42, 62 and other applicable provisions, if any of the Companies Act, 2013 (including any statutory modification(s) or re-enactment(s) thereof 11) To consider and, if thought RESOLVED FURTHER THAT Mr. Jayant Damodar Patil in his capacity as Whole-time Director, be paid remuneration as may be fixed by the Board, from time to time, as prescribed under the Companies Act, 2013 and within the limits approved by the members as per the details given in the explanatory statement." any, of the Companies Act, 2013 read with Schedule V of the said Act and the rules made thereunder, approval be and is hereby granted to the appointment of Mr. Jayant Damodar Patil (DIN: 01252184) as the Whole-time Director of the Company with effect from July 1, 2017 upto and including June 30, 2022. "RESOLVED THAT pursuant to Sections 196,197,203 and other applicable provisions, if 10) To consider and, if thought fit, to pass with or without modification(s) as an ORDINARY RESOLUTION the following: "RESOLVED THAT Mr. Arvind Gupta (DIN: 00090360) who was appointed as an Additional Director with effect from July 1, 2017 and holds office upto the date of this Annual General Meeting of the Company, and is eligible for appointment and in respect of whom the Company has received a Notice in writing from a member under the provisions of Section 160 of the Companies Act, 2013 proposing his candidature for the office of Director, be and is hereby appointed as a Director." ORDINARY RESOLUTION the following: 9) To consider and, if thought fit, to pass with or without modification(s) as an RESOLVED FURTHER THAT the Board be and is hereby authorised to appoint Lead Manager(s) in offerings of Securities and to remunerate them by way of commission, brokerage, fees or the like and also to enter into and execute all such arrangements, agreements, memoranda, documents, etc. with Lead Manager(s) and to seek listing of such securities. "RESOLVED THAT Mr. Jayant Damodar Patil (DIN: 01252184) who was appointed as an Additional Director with effect from July 1, 2017 and holds office upto the date of this Annual General Meeting of the Company, and is eligible for appointment and in respect of whom the Company has received a Notice in writing from a member under the provisions of Section 160 of the Companies Act, 2013 proposing his candidature for the office of Director, be and is hereby appointed as a Director." RESOLVED FURTHER THAT the Company do apply for listing of the new Equity Shares as may be issued with the BSE Limited and National Stock Exchange of India Limited or any other Stock Exchange(s). RESOLVED FURTHER THAT the Company do apply to the National Securities Depository Limited and/or Central Depository Services (India) Limited for admission of the Securities. 10% of the total share capital of the Company carrying voting rights. In case a proxy is proposed to be appointed by a member holding more than 10% of the total share capital of the Company carrying voting rights, then such proxy shall not act as a proxy for any other person or shareholder. ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY, TO ATTEND AND VOTE INSTEAD OF HIMSELF, AND THAT A PROXY NEED NOT BE A MEMBER. Pursuant to Section 105 of the Companies Act, 2013 and Rule 19 of the Companies (Management & Administration) Rules, 2014, a person can act as a proxy on behalf of members not exceeding 50 and holding in the aggregate not more than [b] A MEMBER ENTITLED TO [a] The information required to be provided under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Secretarial Standard 2 on General Meetings, regarding the Directors who are proposed to be appointed/re-appointed and the relative Explanatory Statement pursuant to Section 102 of the Companies Act, 2013, in respect of the business under items 6 to 12 and 14 set out above are annexed hereto. Notes: Mumbai, May 29, 2017 N. HARIHARAN COMPANY SECRETARY M.NO - A3471 By Order of the Board of Directors For LARSEN & TOUBRO LIMITED financial year ending on March 31, 2018 to M/s. R. Nanabhoy & Co. Cost Accountants (Regn. No. 00010), who are appointed as Cost Auditors to conduct the audit of cost records maintained by the Company for the Financial Year 2017-18." LARSEN & TOUBRO 44 "RESOLVED THAT pursuant to Section 148 and other applicable provisions, if any, of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, the Company hereby ratifies the remuneration of 11.75 lakhs plus applicable service tax and out of pocket expenses at actuals for travelling and boarding/lodging for the 14) To consider and ratify the remuneration payable to Cost Auditors and for that purpose to pass with or without modification(s) as an ORDINARY RESOLUTION the following: RESOLVED FURTHER THAT the Board of Directors or the Audit Committee thereof, be and are hereby authorized to decide and finalise the terms and conditions of appointment, including remuneration of the Statutory Auditors." or re-enactment(s) thereof for the time being in force) and pursuant to the resolution passed by the Members of the Company at the 70th Annual General Meeting (AGM) held on September 9, 2015 in respect of the appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants, ICAI Registration No. 117366W/W- 100018(DHS) till the conclusion of the 75th AGM, the Company hereby ratifies the appointment of DHS as the Statutory Auditors of the Company, to hold office from the conclusion of the 72nd Annual General Meeting till the conclusion of the 73rd Annual General Meeting. "RESOLVED THAT pursuant to the provisions of Section 139 and all other applicable provisions of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 (including any statutory modification(s) 13) To ratify the appointment of M/s. Deloitte Haskins & Sells Statutory Auditors and fix their remuneration and for that purpose to pass with or without modification(s) as an ORDINARY RESOLUTION the following: RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorised to do all acts and take all such steps as may be necessary, proper or expedient to give effect to this resolution." of the Company, approval of the members be and is hereby accorded to authorize the Board of Directors of the Company to offer or invite subscriptions for listed/unlisted/ secured/unsecured/ redeemable/ non-convertible debentures, in one or more series/tranches/ currencies, aggregating up to 6000 crore (Rupees Six thousand crore), on private placement basis, on such terms and conditions as the Board of Directors of the Company may, from time to time, determine and consider proper and most beneficial to the Company including as to when the said Debentures be issued, the consideration for the issue, utilization of the issue proceeds and all matters connected with or incidental thereto; "RESOLVED THAT pursuant to the provisions of Sections 42, 71 and all other applicable provisions of the Companies Act, 2013 read with the Companies (Prospectus and Allotment of Securities) Rules, 2014, SEBI (Issue and Listing of Debt Securities) Regulations, 2008, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (including any statutory modification(s) or re-enactment(s) thereof, for the time being in force), and subject to the provisions of the Articles of Association fit, to pass with or without modification(s) as a SPECIAL RESOLUTION the following: 12) To consider and, if thought RESOLVED FURTHER THAT the Board be and is hereby authorised to delegate all or any of the powers in such manner as they may deem fit." 43 11 41 ORDINARY RESOLUTION the following: St. Dominic Road, Bandra (West) Mumbai - 400 050 St. Andrew's Auditorium Hill Rd Station Bandra Police Swami Vivekanand Rd Swami Vivekanand Rd Turner Rd - Bandra Talao Turner Rd St Martin Rd Hill Rd Hospital KB Bhabha St Peter's Church Hill Rd ● Oriental Bank Almeida Park Almeida Park Marg Almeida Park Marg Waterfield Rd Waterfield Rd Bandra Station (West) LARSEN & TOUBRO AGM Venue : 8) To consider and, if thought fit, to pass with or without modification(s) as an RESOLVED FURTHER THAT Mr. S.N. Subrahmanyan in his capacity as Chief Executive Officer and Managing Director, be paid remuneration as may be fixed by the Board, from time to time, as prescribed under the Companies Act, 2013 and within the limits approved by the members as per the details given in the explanatory statement." "RESOLVED THAT pursuant to Section 196, 197, 203 and other applicable provisions, if any, of the Companies Act, 2013 read with Schedule V of the said Act and the rules made thereunder, approval be and is hereby granted to the appointment of Mr. S.N. Subrahmanyan (DIN: 02255382) as the Chief Executive Officer and Managing Director of the Company with effect from July 1, 2017 to June 30, 2022. ORDINARY RESOLUTION the following: 7) To consider and, if thought fit, to pass with or without modification(s) as an of the Board of Directors, Mr. Subodh Bhargava (DIN: 00035672) who was appointed as an Independent Director of the Company for a term upto March 29, 2017 by the shareholders and in respect of whom the Company has received a notice in writing from the Director under Section 160 of the Companies Act, 2013 proposing his candidature for the office of a Director be and is hereby re-appointed as an Independent Director of the Company for a term of five years with effect from March 30, 2017 to March 29, 2022" To consider and, if thought fit, to pass with or without modification(s) as a SPECIAL RESOLUTION the following: "RESOLVED THAT pursuant to the provisions of Sections 149, 152 and any other applicable provisions of the Companies Act, 2013 and the rules made thereunder read with Schedule IV to the Companies Act, 2013 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and based on the recommendation of the Nomination and Remuneration Committee and approval 6) 5) To appoint a Director in place of Mr. R. Shankar Raman (DIN: 00019798), who retires by rotation and is eligible for re-appointment; 4) To appoint a Director in place of Mr. Shailendra Roy (DIN: 02144836), who retires by rotation and is eligible for re-appointment; 3) To appoint a Director in place of Mr. Sushobhan Sarker (DIN: 00088276), who retires by rotation and is eligible for re-appointment; Proxies, in order to be effective, must be received at the Registered office of the Company at L&T House, Ballard Estate, Mumbai 400 001, not later than forty-eight hours before the commencement of the AGM i.e. by 3.00 p.m. on Sunday, August 20, 2017. audited financial statements of the Company for the year ended March 31, 2017 and the Reports of the Board of Directors and Auditors thereon and the audited consolidated financial statements of the Company and the report of the auditors thereon for the year ended March 31, 2017; 1) To consider and adopt the THAT the Seventy Second Annual General Meeting of LARSEN & TOUBRO LIMITED will be held at St. Andrews Auditorium, St. Dominic Road, Bandra (West), Mumbai - 400050 on Tuesday, August 22, 2017 at 3.00 P.M. to transact the following business :- NOTICE IS HEREBY GIVEN Notice Email: Igrc@Larsentoubro.com Website: www.Larsentoubro.com Tel. No.: 022-67525656 • Fax No.: 022-67525893 CIN L99999MH1946PLC004768 Regd. Office L&T House, Ballard Estate, Mumbai 400 001. LARSEN & TOUBRO LIMITED Bandra (West), Mumbai - 400050 St. Dominic Road, St. Andrews Auditorium, 2) [c] The Register of Members and Transfer Books of the Company will be closed from Wednesday, August 16, 2017 to Tuesday, August 22, 2017 (both days inclusive). [d] Members are requested to i. In case a Member receives physical copy of the Notice of AGM (for Members whose email addresses are not registered with the Company/Depository Participants): com. downloads section of www.evoting.nsdl. B. - Shareholders and remote e-voting user manual - Shareholders, available at the you may refer the Frequently Asked Questions (FAQs) xiii. In case of any queries, other than individuals, HUF, NRI, etc.) are required to send scanned copy (PDF/JPG format) of the relevant Board Resolution/ Authority letter etc., together with attested specimen signature of the duly authorized signatory(ies) who are authorized to vote, to the Scrutinizer through e-mail to scrutinizer@ snaco.net, with a copy marked to evoting@ nsdl.co.in. shareholders (i.e. xii. Institutional xi. Once the vote on the resolution is cast, the Member shall not be allowed to change it subsequently. X. Upon confirmation, the message "Vote cast successfully" will be displayed. selecting appropriate option and click on "Submit" and also "Confirm" when, prompted. ix. Cast your vote by Number) of Larsen & Toubro Limited. Now you are ready for e-voting as Cast Vote page opens. (E-Voting Event viii. Select "EVEN" e-voting home page opens, click on remote e-voting> Active Voting Cycles. vii. Once the remote Menu will appear on your screen. Change to a new Password of your choice, making sure that it contains a minimum of 8 digits or characters or a combination of both. Please take utmost care to keep your Password confidential. vi. The Password Change If you are logging in for the first time, please enter the User ID and Password provided in the PDF file attached with the e-mail as initial Password. Click Login. Initial Password, is provided as below, in the enclosed attendance slip: EVEN (E-Voting Event Number) User ID Password is a civil engineer with post Mr. S. N. Subrahmanyan, 57, On the recommendation of the Nomination & Remuneration Committee, the Board of Directors of the Company at its Meeting held on April 7, 2017, appointed Mr. S. N. Subrahmanyan (DIN: 02255382), as Chief Executive Officer and the Managing Director of the Company with effect from July 1, 2017 upto and including June 30, 2022, subject to the approval of the members in the Annual General Meeting. Shareholders had approved the appointment of Mr. S.N Subrahmanyan (DIN: 02255382) as Deputy Managing Director and President of the Company for a period of five years, with effect from October 1, 2015 upto and including September 30, 2020. Item No. 7: Except Mr. Subodh Bhargava, being the appointee, none of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 6. the terms and conditions would be available for inspection without any fee by the members at the Registered Office of the Company. The Board considers that his association would be of immense benefit to the Company as it has been beneficial in the past and it is desirable to avail services of Mr. Bhargava as an Independent Director. Accordingly, the Board recommends the resolution in relation to appointment of Mr. Bhargava as an Independent Director, for the approval by the shareholders of the Company. appointment of Mr. Bhargava as an Independent Director setting out In the opinion of the Board, Mr. Bhargava fulfils the conditions specified in the Companies Act, 2013 and rules made thereunder and LODR Regulations for his re-appointment as an Independent Director of the Company and is independent of the management. The copy of the letter for The Company has received a notice in writing from the Director alongwith deposit of requisite amount under Section 160 of the Companies Act, 2013, proposing his candidature for the office of Independent Director of the Company. Pursuant to the provisions of the Companies Act, 2013 and SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015, ("LODR Regulations") an Independent Director shall hold office for a term upto five consecutive years on the Board of the Company and shall be eligible for re-appointment on passing of a Special Resolution by the Company and disclosure of such appointment in the Board Report. V. The Board of Directors at its meeting held on January 28, 2017 on the recommendation of the Nomination and Remuneration Committee, approved the re-appointment of Mr. Bhargava as Independent Director of the Company for a second and final term of five years with effect from March 30, 2017 to March 29, 2022 based on his skills, experience, knowledge and report of his performance evaluation. His re-appointment is subject to the approval of the shareholders at this Annual General Meeting by way of a Special Resolution. Item No. 6: The Company proposes to live webcast the proceedings of the AGM in collaboration with NSDL. The shareholder may view the same by logging into the link www.evoting.nsdl.com using their e-voting credentials. Questions may be raised on this platform, which will be answered appropriately. EXPLANATORY STATEMENT As required by Section 102 of the Companies Act, 2013, the following Explanatory Statement sets out material facts relating to the business under items 6 to 12 and 14 of the accompanying Notice dated May 29, 2017. The results declared alongwith the Scrutinizer's report, will be posted on the website of the Company www.Larsentoubro.com and on the website of NSDL and will be displayed on the Notice Board of the Company at its Registered Office as well as Corporate Office immediately after the declaration of the result by the Chairman or any person authorised by him in writing and will be communicated to the Stock Exchanges. 47 The Scrutinizer will submit his report to the Chairman after completion of the scrutiny. The result of the voting on the Resolutions at the Meeting shall be announced by the Chairman or any other person authorized by him immediately after the results are declared. A Member can opt for only one mode of voting i.e. either through remote e-voting or at the Meeting. If a Member casts votes by both modes, then voting done through e-voting shall prevail. Based on the report received from the scrutiniser the Company will submit within 48 hours of the conclusion of the Meeting to the stock exchanges details of the voting results as required under Reg. 44(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. No. (xiii) above, to cast vote. from Sl. No. (ii) to Sl. Please follow all steps ii. Mr. Subodh Bhargava (DIN: 00035672) was appointed as an Independent Director of the Company with effect from April 1, 2014 to March 29, 2017. As per the then prevailing listing agreement and on account of his prior term with the Company, Mr. Bhargava was re-appointed for only one term. However, the amendment to the listing agreement/listing regulations which are in line with the Companies Act, 2013 provides two terms for all Independent Directors. Hence it is proposed to appoint Mr. Subodh Bhargava for one more term of five years. St Martin Rd iv. If you are already registered with NSDL for e-voting then you can use your existing User ID and Password. com. [i] 45 45 Members who have not encashed their dividend warrants pertaining to the aforesaid years may approach the Company/ its Registrar, for obtaining payments thereof atleast 20 26.08.2016 31.03.2016 02.10.2023 87 09.09.2015 31.03.2015 15.10.2022 86 22.08.2014 31.03.2014 27.09.2021 85 22.08.2013 31.03.2013 27.09.2020 84 24.08.2012 31.03.2012 29.09.2019 83 26.08.2011 31.03.2011 02.10.2018 82 Dividend Date of For the Due for No. Declaration year ended Transfer on 26.08.2010 31.03.2010 02.10.2017 81 [h] Pursuant to Section 124 of the Companies Act, 2013 the unpaid dividends that are due for transfer to the Investor Education and Protection Fund are as follows: [g] Members/Proxies should bring their attendance slips duly completed for attending the Meeting. [f] All documents referred to in the accompanying Notice and the Explanatory Statement are open for inspection at the Registered Office of the Company on all working days, except Saturdays, between 11.00 a.m. and 1.00 p.m. up to the date of the Annual General Meeting. [e] In order to receive copies of Annual Reports and other communication through e-mail, Members holding shares in physical form are requested to register their e-mail addresses with the Company by sending an e-mail to Lntgogreen@ Larsentoubro.com. furnish bank details, Email address, change of address etc. to Karvy Computershare Private Limited, Karvy Selenium, Tower B, Plot 31-32, Gachibowli, Financial District, Nanakramguda, Hyderabad 500 032, who are the Company's Registrar and Share Transfer Agents so as to reach them latest by Monday, August 14, 2017, in order to take note of the same. In respect of members holding shares in electronic mode, the details as would be furnished by the Depositories as at the close of the aforesaid date will be considered by the Company. Hence, Members holding shares in demat mode should update their records at the earliest. days before they are due for transfer to the said fund. Investor Grievance Redressal: The Company has designated an exclusive e-mail id viz. Igrc@ Larsentoubro.com to enable Investors to register their complaints, if any. Open the internet browser and type the following URL: https:// www.evoting.nsdl. said PDF file contains your User ID and Password for remote e-voting. Please note that the Password is an initial Password. No. as Password. The ii. LARSEN & TOUBRO 46 46 Open the e-mail and also open PDF file namely "L&T remote e-voting.pdf" with your Client ID or Folio i. In case a Member receives an e-mail from NSDL (for Members whose e-mail addresses are registered with the Company/ Depository Participants): A. iii. Click on Shareholder – Login. The Company has appointed Mr. S. N. Ananthasubramanian, Practicing Company Secretary, (Membership No. 4206) or failing him Mrs. Aparna Gadgil, Practicing Company Secretary, (Membership No. 14713), to act as the Scrutinizer for conducting the voting and remote e-voting process in a fair and transparent manner. Members are requested to follow the instructions below to cast their vote through e-voting: means. forth in this Notice. Eligible members who have acquired shares after the despatch of the Annual Report and holding shares as on the cut-off date i.e Monday, August 14, 2017 may approach the Company for issuance of the User ID and Password for exercising their right to vote by electronic The Members, whose names appear in the Register of Members list of Beneficial Owners as on Monday, August 14, 2017, i.e. the commencement of the book closure date are entitled to vote on the Resolutions set The remote e-voting period commences on Saturday, August 19, 2017 at 9.00 A.M and ends on Monday, August 21, 2017 at 5.00 P.M. During this period members of the Company holding shares either in physical or dematerialised form, as on the cut-off date of Monday, August 14, 2017 may cast their vote by remote e-voting. The remote e-voting module shall be disabled by NSDL for voting thereafter. The members who have cast their vote through remote e-voting prior to the AGM may also attend the AGM but shall not be entitled to cast their vote again. The Notice will be displayed on the website of the Company www.Larsentoubro.com and on the website of NSDL. A person whose name is recorded in the register of members or in the register of beneficial owners maintained by the depositories as on the cut-off date of Monday, August 14, 2017 shall be entitled to avail the facility of remote e-voting or voting at the AGM. Persons who are not members as on the cut-off date should treat this notice for information purposes only. electronic means is optional for shareholders. The facility for voting shall be made available at the AGM and the Members attending the Meeting who have not cast their vote through remote e-voting shall be able to exercise their right at the meeting. Please note that the voting through The businesses as set out in the Notice may be transacted through electronic voting system and the Company will provide a facility for voting by electronic means. In compliance with the provisions of Section 108 of the Act, read with Rule 20 of the Companies (Management and Administration) Rules, 2014, Secretarial Standard 2 on General Meetings and Reg. 44 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company is pleased to offer the facility of voting through electronic means, as an alternate, to all its Members to enable them to cast their votes electronically. The facility of casting the votes by the members using an electronic voting system from a place other than venue of the AGM (remote e-voting) will be provided by National Securities Depository Limited (NSDL). [j] E-voting Members who are already registered with NSDL for remote e-voting can use their existing User ID and Password for casting their vote. In case they don't remember their Password, they can reset their Password by using "Forgot User Details/ Password" option available on www.evoting.nsdl.com Turner Rd To declare a dividend on equity shares; Swami Vevekanand Rd (5%) (2%) 500- 415 (8%) 499 (6%) 201 1000 508 6.8 6.8 10.9 10.1 14.6 786 550 1500. 10- 10.2 11.2 1826 (19%) 2000 2500- Linking Rd (5%) 32 5- 31.03.2017 40000- 50000- 60000- 70000- 31.03.2016 L&T CONSOLIDATED - SEGMENT-WISE TOTAL LIABILITIES * Earnings before interest, depreciation, tax and amortisation as percentage of net segment revenue 71842 64213 31.03.2017 50000- 15.1 12.5 50021 60000- 70000- 31.03.2016 L&T CONSOLIDATED - SEGMENT-WISE TOTAL ASSETS Figures in brackets represent percentage of segment result to total segment result Total segment wise result: * 9539 crore Heavy Engineering 27.35050623 0. (0.3%) (4%) 46688 56955 3000- 3500 -187354 -193796 74% 2741- 1% 3059 Power 6% Power 17153 7% 15503 14159 5% 24823 10% Infrastructure LARSEN & TOUBRO Total order book: 261341 crore Infrastructure crore crore L&T CONSOLIDATED - SEGMENT-WISE ORDER BOOK AS AT 31-3-2017 L&T CONSOLIDATED - SEGMENT-WISE ORDER BOOK AS AT 31-3-2016 10000- 20000- 30000- H✓ 40000- ☐ Heavy Engineering 1% 75% ☐ Heavy Engineering 18.4 19.9 20- 20.5 21.2 2016-17 2015-16 25- 4000- 4500 4723 5000 (50%) Total order book: 249017 crore 15- L&T CONSOLIDATED - SEGMENT-WISE EBIDTA MARGINS* ☐ Hydrocarbon ☐ Others ☐ Electrical & Automation ☐ Others 18499 8% ☐ Hydrocarbon 13824- 5% 3% ☐ Electrical & Automation 5% 11997 7449- L&T CONSOLIDATED - SEGMENT-WISE RESULT 2016-17 64341 80000- Infrastructure Apt. Betsy St Paul Rd Gymkhana The Bandra Perry Rd Others Developmental Projects Financial Services IT & Technology Services 6845 Others 0889 39 8931 Q 1936 4568 Hydrocarbon 5590 Electrical & St Leo Rd Automation 1607 Services 1813 IT & Technology Financial Services Projects Developmental 8548 Hydrocarbon St Cyril Rd Route Map to the AGM Venue Turner Rd Hill Rd St Andrew's Church Junior College Zaffran W Hill Rd N E Tava Moti Mahal Turner Rd 1st Rd 4th Rd S 1774 Mamagoto Holy Family Hospital Bank of India Manuel Gonsalves Rd St Anthony Rd 3rd Rd Manuel Gonsalves Rd 1st Rd Andora St Dominic Rd ONGC Colony Rd St Andrew's Rd St Andrew's Rd Apostolic Carmel Café Electrical & Automation Heavy Engineering Hydrocarbon 6729 IT & Technology 4307 Services 6086 Projects Developmental Total segment wise Liabilities as at 31.03.2016: 121743 crore and as at 31.03.2017: 133547 crore 25315 28241 19361 Others 18459 Financial Services 3816 30000- 20000- Total segment wise Assets as at 31.03.2016: 183914 crore and as at 31.03.2017: * 197701 crore 4364 6144 Electrical & Automation 3789 6362 Power 7382 Infrastructure Total liabilities for Financial Services and Developmental Projects predominantly comprises of borrowings 4472 10000- 7964 Power 6847 5450 Heavy Engineering 5112 1. L&T Power Development Limited 1. L&T Infrastructure Development Projects Limited Development Projects Limited 2. Corporation Bank None of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 14. 2. 1. L&T Infrastructure Mumbai, May 29, 2017 N. HARIHARAN COMPANY SECRETARY M.NO-A3471 1. Glaxo Smithkline Consumer Healthcare Limited He has held and continues to hold many important positions with various government committees and in the field of education with close association in technical and management education in India. Mechanical Engineering [University of Roorkee] Mr. Subodh Bhargava March 30, 1942 July 3, 2007 Vast experience in Finance, Taxation, Risk Management, Legal and Investor Relations B.Com, ACA and Grad. CWA Vast experience in Thermal Power, Heavy Engineering, Defence & Aerospace Industry B. Tech Mr. R. Shankar Raman December 20, 1958 October 1, 2011 March 9, 2012 September 18, 1952 Mr. Shailendra Roy Directorships held in other public companies including private companies which are subsidiaries of public companies (excluding foreign companies) Vast Experience in Insurance and Housing Finance By Order of the Board of Directors For LARSEN & TOUBRO LIMITED Expertise December 15, 2012 March 29, 1954 Mr. Sushobhan Sarker Qualifications Date of Appointment on the Board Date of Birth The Directors recommend this resolution for approval of the shareholders. Name of the Director [Pursuant to Regulation 36(3) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard 2 on General Meetings] FORTHCOMING ANNUAL GENERAL MEETING DETAILS OF DIRECTORS SEEKING APPOINTMENT/RE-APPOINTMENT AT THE (ANNEXURE TO NOTICE DATED MAY 29, 2017) 53 The route map for the venue of the Annual General Meeting of the Company is given on page 40 of this Annual Report 2016-17 B.Sc Diploma in Management Studies, Masters in Financial Management L&T-Sargent & Lundy Limited L&T Metro Rail (Hyderabad) L&T Finance Holdings Limited L&T Seawoods Limited 7. L&T Special Steels and Heavy 7. L&T Realty Limited Forgings Private Limited 8. 8. L&T-Howden Private Limited 6. Limited L&T Power Limited Member Member Member Chairman Memberships/ Chairmanships of committees across all companies Audit Committee Larsen & Toubro Limited Accordingly, consent of the members is sought for the aforesaid proposal. 9. 2. Limited L&T Hydrocarbon Engineering 2. Batliboi Limited 3. Nabha Power Limited 3. 4. L&T-MHPS Boilers Private L&T Investment Management Limited 3. 6. Raykal Aluminium Company Private Limited Nicco Parks and Resorts Limited 4. Larsen & Toubro Infotech 4. International Institute of CSR 5. L&T-MHPS Turbine Generators Limited Foundation Private Limited 5. Limited M/s. R. Nanabhoy & Co., Cost Accountants, have furnished certificates regarding their eligibility for appointment as Cost Auditors of the Company. In accordance with the provisions of Section 148 of the Act read with the Rules, the remuneration payable to the cost auditor has to be ratified by the shareholders of the Company. The agreement entered into by the Company with Mr. S. N. Subrahmanyan, in respect of his appointment as Chief Executive Officer and Managing Director, contains terms and conditions of his appointment including remuneration. In accordance with the provisions of Section 148 of the Companies Act, 2013 ("the Act") and the Companies (Audit and Auditors) Rules, 2014 ("the Rules") the Company is required to appoint a cost auditor to audit the cost records of the Company, for products and services, as specified under the Companies (Cost Record and Audit) Rules, 2014. On the recommendation of the Audit Committee, the Board of Directors had approved the appointment of M/s. R. Nanabhoy & Co, Cost Accountants (Regn. No. 00010), as the Cost Auditors of the Company to conduct audit of cost records maintained by the Company for the Financial Year 2017-18, at a On the recommendation of the Nomination & Remuneration Committee, the Board of Directors appointed Mr. Jayant Damodar Patil (DIN: 01252184) as an Additional Director with effect from July 1, 2017. In terms of Section 161(1) of the Companies Act, 2013, Mr. Patil holds office as additional director upto the date of this Annual General Meeting. The Company has received a notice in writing from a member alongwith deposit of requisite amount under Section 160 of the Companies Act, 2013, proposing his candidature for the office of Director of the Company. The Board of Directors, on the recommendation of the Nomination & Remuneration Committee, appointed Mr. Jayant Damodar Patil (DIN: 01252184) as a Whole-time Director of the Company with effect from July 1, 2017 upto and including June 30, 2022, subject to the approval of the members in the Annual General Meeting. Mr. Patil graduated in Mechanical Engineering from Nagpur University in 1976 with top Honours. He chose to pursue higher studies at the Indian Institute of Technology Mumbai & attained the Top rank in M Tech Mechanical Engineering, before joining L&T in 1978. Mr. Patil has a nearly four decade long career in L&T during which he was instrumental in growing the nascent Technology and Product Development Group of L&T's corporate R&D with a focus on Top end interdisciplinary Product Development. Mr. Patil actively pursued L&T's foreys into the Defence sector since late 80's. Over these years L&T, under his leadership, built a portfolio of indigenous products and technologies by teaming up with DRDO and with Indian Navy. Currently, Mr. Patil heads Defence and Aerospace Strategic Business Sectors for L&T with focus on Naval and Land Weapon Launch & Engineering Systems, Submarines, Guns, Missiles & Armoured Systems, Radar Systems, Military Communication Systems, Avionics. He also oversees Technology Development Centers for the Defence & Aerospace Sector, Prototype Development center at Powai & Bangalore as well as Defence Production Centers at Talegaon (near Pune), Coimbatore and Visakhapatnam, besides specific work centers at L&T's Powai, Hazira and Vadodara manufacturing complexes. Part III, of Schedule V of the Companies Act, 2013 and Secretarial Standard 2 on General Meetings provides that the appointment and remuneration of Managing Directors and Whole-time Directors in accordance with Part I and Part II of the Schedule V shall be subject to approval by resolution of the shareholders in a General Meeting. At the Annual General Meeting of the Company held on August 26, 2011, August 22, 2013 and August 26, 2016 the shareholders had fixed the maximum limits within which the Board was delegated authority to decide the remuneration of the Whole-time Directors of the Company. Pursuant to this, the Board has fixed the remuneration payable to Mr. Jayant Damodar Patil during his tenure as Whole-time Director. The Company will enter into an Agreement with Mr. Jayant Damodar Patil appointing him as a Whole-time Director for the period from July 1, 2017 to June 30, 2022. During the period of this agreement and so long as the Whole-time Director performs his services as per the terms and conditions provided by this agreement, he shall be entitled to the following: Salary 8,00,000 (Rupees Eight Lac only) per month in the scale of 6,50,000-75,000-10,25,000 - ₹1,00,000 - ₹15,25,000 with the 50 LARSEN & TOUBRO annual increment due on April 1 every year. Commission The commission will be paid as per the parameters fixed by the Nomination and Remuneration Committee and the Board of Directors within the overall limits approved by the shareholders of the Company. Perquisites: 12 lakh per annum excluding free furnished accommodation. The above perquisites will exclude value of Stock Option benefits, if any, computed as per Income Tax Act/Rules, tax on which will be borne by the Company. Item No. 8 & 10: Except Mr. S.N. Subrahmanyan, being the appointee, none of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 7. The Board recommends approval of the appointment and remuneration of Mr. S. N. Subrahmanyan, as Chief Executive Officer and Managing Director of the Company. Pursuant to Article 136(C) of the Articles of Association of the Company, Mr. S. N. Subrahmanyan in his capacity as Chief Executive Officer and Managing Director will not be liable to retire by rotation. The Agreement entered into with Mr. S. N. Subrahmanyan will be open for inspection by members at the Registered Office of the Company on all working days [except Saturday] between 11.00 a.m. and 1.00 p.m. up to the date of the Annual General Meeting. Stakeholders Relationship Committee Corporation Bank He successfully set up the Ready Mix Concrete business for the first time in India. Apart from completing several challenging infrastructure projects across verticals over the years, he has played a crucial role in securing and managing EPC contracts for the construction of four major international airports in India at Bengaluru, Hyderabad, Delhi and Mumbai. Among his list of accomplishments are the mandates to build the tallest statue in the world the Statue of Unity - and the development of dedicated freight corridors that will realign the dynamics of freight movement in the country. The construction division is among the top 30 global contractors and by far the largest construction organisation in the country. Largely responsible for establishing L&T Construction as a significant EPC player in the Middle East, Mr. Subrahmanyan has spearheaded and won several large projects in Oman, Qatar, Abu Dhabi and Saudi Arabia like the Salalah Airport in Oman and a big interchange and road project in UAE. The Riyadh Metro project is one of the largest international orders bagged by L&T thus far; while the Doha Metro, the AL-Wakrah Road Project both in Qatar and the Abu Dhabi Airport airside works have been won in the face of stiff international competition. He has also led the spread into Africa and L&T Construction is already making its presence felt especially in North and East Africa. He brought to the fore the expertise of 'Design and Build' construction solutions on an EPC (Engineer Procure Construct) basis and is one of the first exponents of aluminum formwork systems and an early adopter of precast technology for housing projects. Mr. Subrahmanyan is the Non- Executive Vice Chairman of Larsen & Toubro Infotech Limited and L&T Technology Services Limited and the Non-Executive Chairman of L&T Metro Rail (Hyderabad) Limited. Part III, of Schedule V of the Companies Act, 2013 and Secretarial Standard 2 on General Meetings provide that the appointment and remuneration of Managing Directors and Whole-time Directors in accordance with Part I and Part II of the Schedule V shall be subject to approval by resolution of the shareholders in a General Meeting. At the Annual General Meeting of the Company held on August 26, 2011, August 22, 2013 and August 26, 2016 the shareholders had fixed the maximum limits within which the Board was delegated authority to decide the remuneration of the Chief Executive Officer and Managing Director of the Company. Pursuant to this, the Board has fixed the remuneration payable to Mr. S. N. Subrahmanyan during his tenure as Chief Executive Officer and Managing Director. The Company has entered into an Agreement with Mr. S.N. Subrahmanyan appointing him as a Chief Executive Officer and Managing Director for the period of five years from July 1, 2017 to June 30, 2022. During the period of this agreement and so long as the Chief Executive Officer and Managing Director performs his services as per the terms and conditions provided by this agreement, he shall be entitled to the following: Others Company's contribution to retirement funds, official use of car / driver and communication facilities for Company's business, as per rules of the Company. Salary: 18,40,000 (Rupees Eighteen Lac Forty Thousand only) per month in the scale of 12,00,000 - 1,60,000 -21,60,000 with the annual increment due on April 1 every year. Perquisites: 20 lakh per annum excluding free furnished accommodation or house rent in lieu thereof. The above perquisites will exclude value of Stock Option benefits, if any, computed as per Income Tax Act/Rules, tax on which will be borne by the Company. Others Company's contribution to retirement funds, official use of car / driver and communication facilities for Company's business, as per rules of the Company. Disclosures as required under Secretarial Standard 2 on General Meetings are provided as an Annexure to this Notice. Accordingly, the Resolution at Item No. 7 is proposed for approval of the members for appointment 49 of Mr. S. N. Subrahmanyan, as the Chief Executive Officer and Managing Director as contemplated by Part III of Schedule V of the Companies Act, 2013 and other applicable provisions, if any. Commission The commission will be paid as per the parameters fixed by the Nomination and Remuneration Committee and the Board of Directors within the overall limits approved by the shareholders of the Company. Disclosures as required under Secretarial Standard 2 on General Meetings are provided as an Annexure to this Notice. The draft agreement to be entered into by the Company with Mr. Jayant Damodar Patil, in respect of his appointment as Whole-time Director, contains the terms and conditions of his appointment including remuneration. The draft agreement to be entered into with Mr. Jayant Damodar Patil will be open for inspection by members at the Registered Office of the Company on all working days [except Saturday] between 11.00 a.m. and 1.00 p.m. up to the date of the Annual General Meeting. The Board recommends approval of the appointment and remuneration of Mr. Jayant Damodar Patil, - in case of allotment of equity shares, the date of meeting in which the Board decides to open the proposed issue ii) in case of allotment of eligible convertible securities, either the date of the meeting in which the Board decides to open the issue of such convertible securities or the date on which the holders of such convertible securities become entitled to apply for the equity shares, as may be determined by the Board. The Stock Exchange for the same purpose is the BSE Limited/National Stock Exchange of India Limited. The Shareholders through a resolution passed at their meeting held on August 26, 2016, had approved issue of Securities for an aggregate sum up to US$600 Million or 3600 Crore, if higher. However, Shareholders' resolution for QIP issuance is valid for a period of 12 months from the date of passing of the resolution. Accordingly, the Shareholders' approval is sought for this proposal. The Directors recommend this Resolution for approval of the Shareholders. None of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 11. Item No. 12: i) The Company is into the business interalia of manufacturing of industrial goods, heavy engineering, infrastructure projects and other activities which require a sizeable investment and continuous expenditure. The Company intends to explore different avenues for garnering this financing requirement including by way of issuance of debt instruments. 52 LARSEN & TOUBRO Section 42 of the Companies Act, 2013 read with Rule 14 of the Companies (Prospectus and Allotment of Securities) Rules, 2014 deals with private placement of securities by a company. Sub-rule (2) of the said Rule 14 states that in case of an offer or invitation for subscription to non-convertible debentures on private placement basis, the Company shall obtain prior approval of its shareholders by means of a special resolution only once in a year for all the offers or invitations for such debentures during the year. In order to meet the financial needs of business in a prudent manner the Company may offer or invite subscription for secured/unsecured/ redeemable/non-convertible debentures, in one or more series/ tranches/currencies on private placement, issuable/redeemable at par or otherwise. The shareholders through a resolution passed at their meeting held on August 26, 2016, approved issue of debentures upto an amount not exceeding 6000 crore in aggregate. However, such resolution is valid only for a period of 12 months from the date on which the approval is granted by the shareholders. Accordingly, the Shareholders' approval is sought for the period of next 12 months from the date of passing this resolution. This resolution is an enabling resolution and authorizes the Board of Directors of the Company to offer or invite subscription for non-convertible debentures, as may be required by the Company, from time to time for a year from the date of passing this resolution. The Directors recommend this Resolution for approval of the Shareholders. None of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 12. Item No. 14: 62 remuneration of 11.75 lakhs plus applicable service tax and out of pocket expenses at actuals for travelling and boarding/lodging for both the years. The "relevant date" for the above purpose, shall be However, the same would be in accordance with the provisions of the SEBI Regulations, the Companies Act, 2013, or any other guidelines/regulations/consents as may be applicable or required. as Whole-time Director of the Company. Except Mr. Patil, being the appointee, none of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 8 & 10. Item No. 9: On the recommendation of the Nomination & Remuneration Committee, Mr. Arvind Gupta (DIN: 00090360), a nominee of the administrator of the Specified Undertaking of the Unit Trust of India (SUUTI), was appointed as an Additional Director of the Company with effect from July 1, 2017. In terms of Section 161(1) of the Companies Act, 2013, Mr. Gupta holds office as additional director upto the date of this Annual General Meeting. The Company has received a notice in writing from a member alongwith deposit of requisite amount under Section 160 of the Companies Act, 2013, proposing his candidature for the office of Director of the Company. Mr. Gupta has over 24 years of experience in diverse sectors in variety of leadership, policy and entrepreneurial profiles in India and Silicon Valley, USA. He has been on the Global FinTech top 100 list of Influencers and also the Member of World Economic Forum's Global Futures Council on Digital Economy and Society. He is the head and co-founder of Digital India Foundation, a policy think tank working in the areas of Digital Inclusion, Smart Cities, Internet Governance, Cyber Security, Electronics Manufacturing and Indian Software Products. The Board considers that his association would be of immense benefit to the Company and it is desirable to avail services of Mr. Gupta as an Director. Accordingly, the Board recommends the resolution in relation to appointment of Mr. Gupta as a Director, for the approval by the shareholders of the Company. Except Mr. Arvind Gupta, being an appointee, none of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 9. In case of issue of convertible bonds and/or equity shares through depository receipts the price will be determined on the basis of the current market price and other relevant guidelines. Item No. 11: The fund raising may be through a mix of equity/equity-linked instruments, as may be appropriate. Members' approval is sought for the issue of equity shares, securities linked to or convertible into Equity Shares or depository receipts of the Company. The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 also provide that the Company 51 shall, in the first instance, offer all Securities for subscription pro-rata to the Shareholders unless the Shareholders in a general meeting decide otherwise. Members' approval is sought for issuing any such instrument as the Company may deem appropriate to parties other than the existing shareholders. Whilst no specific instrument has been identified at this stage, in the event the Company issues any equity linked instrument, the issue will be structured in a manner such that the additional share capital that may be issued would not be more than 5% of the paid-up capital of the Company (as at the date when the Board recommended passing of the Special Resolution). The equity shares, if any, allotted on issue, conversion of Securities shall rank in all respects pari passu with the existing Equity Shares of the Company. The Company may also opt for issue of securities through Qualified Institutions Placement (QIP). A QIP of the securities of the Company would be less time consuming and more economical than other modes of raising capital. Accordingly, the Company may issue securities by way of a QIP in terms of Chapter VIII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 ('SEBI Regulations'). These securities will be allotted only to Qualified Institutional Buyers (QIBS) as per the SEBI Regulations and there will be no issue to retail individual investors and existing retail shareholders. The resolution proposed is an enabling resolution and the exact price, proportion and timing of the issue of the securities will be decided by the Board based on an analysis of the specific requirements after necessary consultations. Therefore the proposal seeks to confer upon the Board the absolute discretion to determine the terms of issue in consultation with the Lead Managers to the Issue. As per Chapter VIII of the SEBI Regulations, an issue of securities on QIP basis shall be made at a price not less than the average of the weekly high and low of the closing prices of the related shares quoted on the stock exchange during the two weeks preceding the "relevant date." The Board may, at its absolute discretion, issue equity shares at a discount of not more than five percent or such other discount as may be permitted under applicable regulations to the 'floor price' as determined in terms of the SEBI Regulations, subject to Section 53 of the Companies Act, 2013. As the pricing of the offer cannot be decided except at a later stage, it is not possible to state the price of shares to be issued. The Company requires adequate capital to meet the needs of growing business. While it is expected that the internal generation of funds would partially finance the need for capital and debt raising would be another source of funds, it is thought prudent for the Company to have enabling approvals to raise a part of the funding requirements for the said purposes as well as for such other corporate purposes as may be permitted under applicable laws through the issue of appropriate securities as defined in the resolution, in Indian or international markets. Nomination and Debenture Redemption Reserve 1. L&T-Sargent & Lundy Limited 1304.10 6255.62 1256.04 Profit for the period carried to Balance Sheet 5453.74 4999.58 Add: Balance brought forward from previous year 7710.27 4522.65 Less: Dividend paid during the year (Including dividend distribution tax) 1842.71 1647.02 Add: Gain/(loss) on remeasurement of the net defined benefit plans (8.02) Balance available for disposal 11313.28 (which the Directors appropriate as follows) management. He joined L&T in 1984 starting off as project planning engineer, and was soon handpicked for senior responsibilities. Balance to be carried forward 87.75 11225.53 (8.44) 7866.77 156.50 7710.27 The Directors recommend payment of final dividend of 21 per share of 2/- each on 93,29,65,803 shares. CAPITAL & FINANCE: During the year under review, the Company allotted 14,86,958 equity shares of 2/- each upon exercise of stock options by the eligible employees under the Employee Stock Option Schemes. The Company reduced long-term borrowings during the year under review by way of repayment of Non- Convertible Debentures (NCD) worth 550 crore and External Commercial Borrowings (ECB) worth US$126 million on scheduled due dates. The Company did not raise any long-term borrowings during FY2016-17. Less: Provision for tax 6757.84 Profit before tax 5695.34 560.28 Nil Not Applicable Directors Relationships between Nil directors inter-se 56 Nil Nil LARSEN & TOUBRO Board Report Dear Members, The Directors have pleasure in presenting their 72nd Annual Report and Audited Financial Statements for the year ended March 31, 2017. FINANCIAL RESULTS: CRISIL Limited has assigned AAA (Stable) rating for L&T's long-term debt facilities. In addition, ICRA Limited also has assigned AAA (Stable) rating for certain borrowings of the Company. Particulars 2016-17 crore 2015-16 crore 7079.06 6692.74 items & tax Less: Depreciation, amortization, impairment and obsolescence 1215.19 997.40 Profit before exceptional items and tax 5863.87 Add: Exceptional Items 893.97 Profit Before Depreciation, exceptional Not Applicable HIVE-OFF OF COIMBATORE UNDERATKING: BONUS: Seawoods Realty Private Limited Equity Seawoods Retail Private Limited Equity 10,000 10,000 38,80,00,000 Preference 9,65,00,000 L&T Shipbuilding Limited (Note 1) Preference L&T Uttaranchal Hydropower Limited L&T Electrical & Automation Limited (Note 5) Equity 73,88,796 B) Equity shares sold/transferred during the year: Name of the Company Larsen & Toubro Infotech Limited (Note 2) L&T Technology Services Limited (Note 3) L&T General Insurance Company Limited (Note 4) Larsen Toubro Arabia LLC Note: 1. No. of shares 1,75,00,000 1,04,00,000 75,20,00,000 7,500 Pursuant to the Scheme of Demerger approved by National Company Law Tribunal (NCLT), the existing share capital of Marine Infrastructure Developer Limited held by L&T Shipbuilding Limited stands cancelled. The Company has now acquired 38,80,00,000 equity shares of Marine Infrastructure Developer Limited for a consideration of 388 crore from L&T Shipbuilding Limited. The acquisition has been completed on 31st March, 2017. Further, 38,80,00,000 equity shares of L&T Shipbuilding Limited held by the Company have been extinguished and 38,80,00,000, 9% non-cumulative, optionally convertible and redeemable preference shares of 10 58 38,80,00,000 Equity Marine Infrastructure Developer Private Limited (Note 1) 2,66,90,392 The Board of Directors of your Company at its Meeting held on May 29, 2017, has recommended for approval of the shareholders issue of bonus shares to the holders of the equity shares of the Company in the ratio of 1: 2 (i.e 1 (One) Bonus Equity Share of 2/- for every 2 (Two) fully paid-up Equity Shares of 2/- each held) by capitalisation of its Reserves. The approval of the shareholders will be sought through Postal Ballot. CAPITAL EXPENDITURE: As at March 31, 2017 the gross property, plant and equipment, investment property and other intangible assets including leased assets, stood at 9820.17 crore and the net property, plant and equipment, investment property and other intangible assets, including leased assets, at 7548.37 crore. Capital Expenditure during the year amounted to 749.02 crore. DEPOSITS: The Company has not accepted deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013. The Company does not have any unclaimed deposits as of date. All unclaimed deposits have been transferred to Investor Education & Protection Fund. DEPOSITORY SYSTEM: As the members are aware, the Company's shares are compulsorily tradable in electronic form. As on March 31, 2017, 98% of the Company's total paid up capital representing 91,42,69,231 shares are in dematerialized form. In view of the numerous advantages offered by the Depository system as well as to avoid frauds, members holding shares in physical mode are advised to avail of the facility of dematerialization from either of the depositories. 57 57 TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND: The Company sends letters to all shareholders, whose dividends are unclaimed so as to ensure that they receive their rightful dues. Efforts are also made in co-ordination with the Registrar to locate the shareholders who have not claimed their dues. During the year, the Company has transferred a sum of 2,59,71,351 to Investor Education & Protection Fund (IEPF), the amount which was due & payable and remained unclaimed and unpaid for a period of seven years as provided in section 125 of the Companies Act, 2013 and the rules made thereunder. Despite the reminder letters sent to each shareholder, this amount remained unclaimed and hence was transferred. Cumulatively, the amount transferred to the said fund was 17,16,31,755 as on March 31, 2017. In accordance with the provisions of the Section 124(6) and Rule 6(3)(a) of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, (IEPF Rules), the Company is required to transfer 12,13,804 equity shares of 2 each held by 11,057 shareholders to IEPF. The said shares correspond to the dividend which has remained unclaimed for a period of seven consecutive years from the financial year 2008-09. However, the equity shares wherein, disputes are pending and Court Order(s) are available with the Company, shall be retained by the Company. All the remaining shares, as mentioned above, shall be transferred to IEPF. Subsequent to the transfer, the concerned shareholders can claim the said shares along with the dividend(s) from IEPF in accordance with the prescribed procedure and on submission of such documents as prescribed under the IEPF Rules. Subsequent to the year under review, on April 20, 2017 the Company has received order of National Company Law Tribunal for hive-off of its Coimbatore undertaking engaged in valves manufacturing through a scheme of Arrangement between Larsen & Toubro Limited and L&T Valves Limited, a wholly-owned subsidiary of the Company and their respective shareholders and creditors under the provisions of section 230 to 232 of the Companies Act, 2013. The appointed date of the scheme was April 1, 2016 and the effective date of the scheme was April 22, 2017. The Company has already sent a specific communication to the concerned shareholders at their address registered with the Company and also published notice in Financial Express and Loksatta providing the details of the shares due for transfer and to enable shareholders to take appropriate action. The Company is awaiting further directions on the transfer formalities from the Ministry of Corporate Affairs in terms of the amendment to the IEPF Rules dated 28th February, 2017. In the meantime, the concerned shareholders can approach the Company or its Registrar & Transfer Agent with necessary documents supporting their claims. During the year under review, the Company subscribed to / acquired equity / preference shares in various subsidiary / associate/joint venture companies. These subsidiaries include companies in general insurance, power, real estate and infrastructure sectors. The details of investments/ divestments in subsidiary companies during the year are as under: A) Shares acquired during the year: Name of the Company Type of Shares L&T General Insurance Company Equity Limited No. of shares 4,70,00,000 L&T Global Holdings Limited L&T Metro Rail (Hyderabad) Limited Equity 79,000 Equity 2,04,18,86,554 L&T Technology Services Limited Equity SUBSIDIARY / ASSOCIATE / JOINT VENTURE COMPANIES: Remuneration Committee Not Applicable 4. Spectrum Infotech Private Limited 5. L&T MBDA Missile Systems Limited 1. Batliboi Limited 2. Glaxo Smithkline Consumer Healthcare Limited Name of the Director Mr. Sushobhan Sarker LARSEN & TOUBRO Mr. Shailendra Roy Corporate Social Responsibility Committee L&T Power Development Limited Mr. R. Shankar Raman 4. L&T Infrastructure Mr. Subodh Bhargava Development Projects Limited Stakeholder Relationship Committee L&T Finance Holdings Limited Corporate Social Responsibility Committee 1. Larsen & Toubro Limited 2. L&T Seawoods Limited 3. L&T Investment Management Limited 4. L&T Infrastructure Development Projects Limited 5. L&T Realty Limited 6. L&T Finance Holdings Limited 9 out of 10 10 out of 10 10 out of 10 Number of Meetings attended during the year Shareholding of Non-Executive Directors 150* Nomination and Remuneration Committee Batliboi Limited Limited 3. L&T Investment Management 2. L&T-MHPS Turbine Generators Private Limited 3. L&T-MHPS Boilers Private Limited Audit Committee 1. L&T Finance Holdings Limited Remuneration Committee Nomination and 2. L&T Infrastructure Larsen & Toubro Limited Development Projects Limited Member Audit Committee 3. L&T Investment Management Limited 54 Relationships between Nil 4. 4. L&T Power Development Limited 5. L&T Seawoods Limited 6. 5. Nabha Power Limited L&T Metro Rail (Hyderabad) Limited 6. L&T Special Steels and Heavy Forgings Private Limited 7. L&T Howden Private Limited Stakeholders Relationship Committee Larsen & Toubro Limited Nomination & Remuneration Committee 1. L&T Seawoods Limited 2. L&T Realty Limited L&T Realty Limited Nil directors inter-se Jointly with LIC Larsen & Toubro Infotech Limited Member Audit Committee 1. Larsen & Toubro Infotech Limited 2. L&T Technology Services Limited Nomination and Remuneration Committee Larsen & Toubro Infotech Limited 10 out of 10 year Shareholding of Not Applicable Non-Executive Mr. Arvind Gupta March 24, 1970 July 1, 2017 B.Tech, Masters of Computer Science, MBA Considerable experience in the field of Consumer Internet, Digital Payment, Payment System, Big Data and Analytics 1. State Trading Corporation of India Limited Mr. Jayant Damodar Patil December 16, 1954 July 1, 2017 B.Tech (Mech.) M. Tech (Prod.) Vast Experience in Defence and Aerospace Industry 1. L&T Cassidian Limited 2. L&T Shipbuilding Limited 2. Truevalue Opinions and Advisors Private 3. L&T Special Steels and Heavy Forgings Limited 3. Aryan Brothers Private Limited 4. Safeway Enterprises Private Limited Chairman Nomination and Remuneration Committee State Trading Corporation of India Limited Corporate Social Responsibility Committee State Trading Corporation of India Limited Private Limited Corporate Social Responsibility Committee Stakeholders Relationship Committee Larsen & Toubro Infotech Limited Chairman 1. Larsen & Toubro Infotech Limited 2. L&T Technology Services Limited 3. L&T Metro Rail (Hyderabad) Limited 9 out of 10 Not Applicable Not Applicable 750 Nil Nil Nil 55 (ANNEXURE TO NOTICE DATED MAY 29, 2017) DETAILS OF DIRECTORS SEEKING APPOINTMENT/RE-APPOINTMENT AT THE FORTHCOMING ANNUAL GENERAL MEETING [Pursuant to Regulation 36(3) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard 2 on General Meetings] Name of the Director * Date of Birth on the Board Qualifications Expertise Directorships held in other public companies including private companies which are subsidiaries of public companies (excluding foreign companies) Memberships/ Chairmanships of committees across all companies Number of Meetings attended during the Mr. S.N Subrahmanyan March 16, 1960 July 1, 2011 B.Sc., Engg. (Civil) & MBA Finance Vast Experience in Design and Build (D&B) contracts, PPP Projects, Engineering and Construction Industry Date of Appointment LARSEN & TOUBRO There were no materially significant related party transactions that may have conflict with the interest of the Company. electrical heating for heat treatment of jobs Replacement of Air Cooled Chiller with Water Cooled Chiller (ii) Steps taken by the Company for utilizing alternate sources of energy: • Shift towards usage of windmill power in the place of State Electricity Board at Kancheepuram factory • Installing Solar panels on rooftop • • • • • Use of solar energy and natural lights in cafeteria Purchase of Green Power from third party wind farm to reduce carbon footprint Solar Panels installed at project sites Power generation through Solar Roof top PV installation at campus Shift towards usage of power generated through windmill power Annual energy Savings in Kansbhal Factory, Odisha is 8.19 Lacs KWH Installation of Fuel sensors to monitor the fuel consumption and optimize its usage Installation of Digital gateways at various P&M assets which enables us to monitor power consumption and reduce maintenance cost Usage of EB power supply instead of DG for construction power supply Use of Motion sensors and RTC timers fixed at paint booth blowers, HVAC, clock room, Rest Rooms, Garden lights and Food courts Introduced RTC timer for Domestic Water pump to avoid high pressure leakages in the existing system Dedicated team for monitoring the lighting system and staff trained for preventing excessive usage of power Use of VFDs with auto monitoring of pressure and temperature for compressor and blower 65 99 66 Re-design impeller of industrial blower from backward curve to airfoil curve • • • • Implementation of Cold phosphating pre- treatment process (Oxsilan process) in the paint shop Usage of Variable Speed Drive for better efficiency Installation of PLC controlled "Auto Mode" Plant and Office Lighting Use of CNG for Bitumen Heating as a substitute to High Speed Diesel in Hot Mix Plant at Delhi Agra Road Project • In-house development of remote operated scissor arm for shifting and aligning the hot plate into rolling machine Improvement is NUB design done to reduce weld deposition (iii) Capital investment on energy conservation equipments: Efforts made towards technology absorption: Introduction of Digital Interfaces to monitor progress & cost of work through ERP System Development M20 and M40 structural grades of concrete with Recycled concrete aggregate (RCA) LARSEN & TOUBRO . • for residential, commercial and infrastructure construction Development of IoT techniques for embankment structures near sea coast for continuous monitoring Re-commissioning of State of art testing and analysis equipment for rebar, strands, concrete, soil, rock and asphalt after Chennai floods • In-house developed self-compacting concrete was used in pile foundations of HEP Chitapur Solar power project in Karnataka Implementation of specially designed cement modified WMM mix in the internal roads of Apollo Proton Therapy and Cancer Treatment Hospital Project site which shall help to move heavy duty medical equipment into the hospital building Development of A20 process at the 318 MLD Waste Water Treatment Plant (WWTP) at Coronation Pillar, New Delhi, wherein the Nitrogen & Phosphorus content in wastewater is treated to desirable limits Installation of Biomethanation of sewage sludge in the 318 MLD WWTP at Coronation Pillar, New Delhi which produces biogas used to generate electricity and run the WWTP facility Installation of Micro-filtration (MF) system at Raichur power Plant which is designed to treat the river water without any conventional pre- treatment to give filtered water Implementation of Virtual reality (VR) / Mixed reality (MR) digital technologies for projects which will enable the engineers from different disciplines to view their design as its final product and visualise the structure in real time scale Implementation of HTC Vive technology in projects which creates a virtual reality headset designed to utilize "room scale" technology to turn a room into 3D space via sensors, with the virtual world allowing the user to navigate naturally • Development of evaluation and qualification of physical and mechanical properties of Embankment materials for SOU project Use of Recycled water from STP for sanitation and gardening Conversion of weld edge preparation process from planning to milling operation • • • . Energy conservation in Air handling units Replacement of old welding machines with new machines with inverter technology to reduce no load loss and overall consumption Use of 100 kVA UPS for furnace to reduce diesel consumption of DG set for uninterrupted power supply Replacement of existing 400W MH lamps with 137W LED lamps for highbay lighting in HE East & West shops Migrating from HPSV to LED light for BOT (Build Operate Transfer) projects with ESCOs (Energy Saving Companies) for energy conservation in Peripheral Lighting Implementation of hoods for the pre heating PLC installation in heating process of LSR to have precise control and saving in NG consumption Purchase of green power (Hydropower) for HE East & West Feasibility for infrared heating to be explored and implemented for heating operation IOT projects for ESSC, SAW and nozzle welding process to save energy and reduce cycle time The measures taken have resulted in savings in cost of production, power consumption and processing time at all locations. [B] TECHNOLOGY ABSORPTION: • Use of high velocity burners in place of low velocity burners (i) Use of grid supply for LSR to replace DG set hiring and running cost thereby saving diesel consumption Use of Hybrid Lighting Masts in Integrated Urban Utility Projects / Industrial Township Projects Use of photo electric sensors for lighting control A proposal for ratification of remuneration of the Cost Auditor for the financial year 2017-18 is placed before the shareholders. DISCLOSURE ON SPECIFIED BANK NOTES: The information is covered in Note 59 forming part of the Financial Statements forming part of this Annual Report. ACKNOWLEDGEMENT: Your Directors take this opportunity to thank the customers, supply chain partners, employees, Financial Institutions, Banks, Central and State Government authorities, Regulatory authorities, Stock Exchanges and all the various stakeholders for their continued co-operation and support to the Company. Your Directors also wish to record their appreciation for the continued co-operation and support received from the Joint Venture partners/ Associates. Mumbai, May 29, 2017 For and on behalf of the Board The Report of the Cost Auditors for the financial year ended March 31, 2017 is under finalization and shall be filed with the MCA within the prescribed period. A. M. Naik Group Executive Chairman ठ 64 LARSEN & TOUBRO Annexure 'A' to the Board Report Information as required to be given under Section 134(3) (m) read with Rule 8(3) of the Companies (Accounts) Rules, 2014. [A] CONSERVATION OF ENERGY: (i) Steps taken or impact on conservation of energy: Use of Induction lamps in place of mercury vapor lamps for bay lighting at Kancheepuram factory (DIN: 00001514) • thereof, the Board, on the recommendation of the Audit Committee, at its meeting held on May 29, 2017, has approved the appointment of R. Nanabhoy & Co., Cost Accountants as the Cost Auditors for the Company for the financial year ending March 31, 2018 at a remuneration of 11.75 lakhs. Pursuant to the provisions of Section 148 of the Companies Act, 2013 and as per the Companies (Cost Records and Audit) Rules, 2014 and amendments CONSOLIDATED FINANCIAL STATEMENTS: Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to Section 129(3) of the Companies Act, 2013 and Regulation 34 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 and prepared in accordance with the applicable Accounting Standards prescribed by the Institute of Chartered Accountants of India, in this regard. The Auditors' report to the shareholders does not contain any qualification, observation or adverse comment. SECRETARIAL AUDIT REPORT: The Secretarial Audit Report issued by S. N. Ananthasubramanian & Co., Company Secretaries is attached as Annexure 'E' to this Annual Report. The Secretarial Auditor's report to the shareholders does not contain any qualification. AUDITORS: 63 In accordance with provisions of Section 139 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, Sharp & Tannan (firm registration number 109982W) will complete their term as Statutory Auditors of the Company at the conclusion of the forthcoming Annual General Meeting. The Board places on record its appreciation for the services rendered by Sharp & Tannan as the Statutory Auditors of the Company. Deloitte Haskins & Sells LLP, have informed the Company that their appointment would be within the limits prescribed under section 141 of the Companies Act, 2013. The Auditors have confirmed that they have subjected themselves to the peer review process of Institute of Chartered Accountants of India (ICAI) and hold valid certificate issued by the Peer Review Board of the ICAI. The Audit Committee reviews the independence and objectivity of the Auditors and the effectiveness of the Audit process. The Auditors have also furnished a declaration confirming their independence as well as their arm's length relationship with the Company as well as declaring that they have not taken up any prohibited non-audit assignments for the Company. REPORTING OF FRAUD: The Auditors of the Company have not reported any instances of fraud committed against the Company by its officers or employees as specified under Section 143(12) of the Companies Act, 2013. COST AUDITORS: In view of the mandatory rotation of auditor requirement and in accordance with the provisions of Companies Act, 2013, Deloitte Haskins & Sells LLP were appointed as Statutory Auditors for a period of 5 continuous years from the conclusion of 70th Annual General Meeting till the conclusion of 75th Annual General Meeting of the Company. A proposal for ratifying their appointment from the conclusion of the 72nd AGM till the conclusion of the 73rd AGM has been included in the Notice of the ensuing AGM. Implementation of Microsoft HoloLens which • . Installation of motion sensors at floor areas to reduce the overall electricity consumption Installation of auto water level controller for domestic pumps Use of Eco Fuel, which is a direct substitute to High Speed Diesel in Hot Mix Plant Optimization of Air Compressor operation by connecting 200 CFM Air Compressor exclusively for Shot Blasting Operation Replacing existing aged inefficient Split AC units with energy efficient units Utilization of Chiller for HVAC System - Campus FMD initiated and control the chiller running hour for HVAC need during holidays and extended working hours Clubbing of charges in furnace during rolling process to improve loading factor • Replacement of rotor resistance controlled starter to Drive controller starter for EOT cranes resulting Introduction of VSD based compressor • Compressed air optimization • • Installation of diffusers and blowers in waste water treatment plants instead of conventional surface aerators, which will lead to energy savings by 12 - 15% smooth operation and energy saving • • Retrofitting of LED fixtures in place of CFL Fixtures Cooling Tower Pump Energy Optimization Conducted "Save Electricity" campaign on campus Replacement of conventional MH Lamps and fluorescent tube lights by LED lamps in working areas at projects as well as for street lights Installation of HVLS Fan • . • • Replacement of electrical heating coil vaporizer used in the galvanizing plant to vaporize the liquefied LPG from cylinders with heater less hot water vaporizer at Puducherry factory Conversion of DOL Starter to Variable Frequency Drives (VFD) for Admin Building Chiller Primary pumps Use of automatic switching off 50% Streetlights during night Use of Flood light LED and power efficient Metal Halide lamps instead of Halogen in campuses Installation of L&T VFD for moulding machine Plants Energy audit and Energy training provided at Ahmednagar Switchgear Works Replacement of Natural gas heating with Optimization of DG set capacity in Furnace Process cooling tower Fan operation converted from manual mode to Automatic mode operation through low cost automation Upgradation of coolant system of Asquith machine to eliminate 8 no's of motor along with VFD installation Implementation of ISO 50001 across ESP MFG embraces virtual reality and augmented reality to create a mixed reality Solar street at ESE campus Development of 3D model of components The Nomination and Remuneration Committee and the Board have laid down the manner in which formal annual evaluation of the performance of the Board, committees and individual directors has to be made. PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND DIRECTORS: 61 ADEQUACY OF INTERNAL FINANCIAL CONTROL: The Company has designed and implemented a process driven framework for Internal Financial Controls ("IFC") within the meaning of the explanation to Section 134(5) (e) of the Companies Act, 2013. For the year ended March 31, 2017, the Board is of the opinion that the Company has sound IFC commensurate with the nature and size of its business operations and operating effectively and no material weakness exists. The Company has a process in place to continuously monitor the same and identify gaps, if any, and implement new and/or improved controls wherever the effect of such gaps would have a material effect on the Company's operations. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and were operating effectively. f) e) The Directors have laid down an adequate system of internal financial control to be followed by the Company and such internal financial controls are adequate and operating efficiently; All Directors responded through a structured questionnaire giving feedback about the performance of the Board, its Committees, Individual directors and the Chairman. The questionnaire included inputs on composition, culture, functioning, information availability, compliance and governance, effectiveness etc. Questionnaire also covered, in the case of individual directors, qualitative assessment and in the case of Chairman additional criteria like leadership qualities and other key aspects of his role. d) The Directors have prepared the Annual Accounts on a going concern basis; In the preparation of Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; b) The Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period; a) The Board of Directors of the Company confirms: DIRECTORS RESPONSIBILITY STATEMENT: As per the provisions of Section 92(3) of the Companies Act, 2013, an extract of the Annual Return in Form MGT-9 is attached as Annexure 'F' to this Report. EXTRACT OF ANNUAL RETURN: website of the Company http://investors.larsentoubro.com/ Listing-Compliance.aspx. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; The Company has received Declarations of Independence as stipulated under Section 149(7) of the Companies Act, 2013 from Independent Directors confirming that he/she is not disqualified from appointing/continuing as Independent Director. The same are also displayed on the The Individual Directors' responses to the questionnaire on the performance of the Board, Committee(s), Directors and Chairman, were analyzed by an independent consultant, to arrive at unbiased conclusions. DISCLOSURE OF REMUNERATION: LARSEN & TOUBRO 62 The Company has a Whistle-Blower Policy in place since 2004 to encourage and facilitate employees to report concerns about unethical behaviour, actual/ suspected As per the provisions of Section 177(9) of the Companies Act, 2013 ('Act'), the Company is required to establish an effective Vigil Mechanism for directors and employees to report genuine concerns. VIGIL MECHANISM: No disclosure is required under Section 67(3)(c) of the Companies Act, 2013, in respect of voting rights not exercised directly by the employees of the Company as the provisions of the said section are not applicable. Corporate Governance: Pursuant to Regulation 34 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, a Report on Corporate Governance and a certificate obtained from the Statutory Auditors confirming compliance, is provided in Annexure 'B' forming part of this Report. The inputs, including areas of improvement, given by all the directors were discussed in the meeting of the Independent Directors held on April 6, 2017 and in the subsequent Meetings of Nomination and Remuneration Committee and the Board. The Group Executive Chairman had a discussion with all the Directors individually. A certificate obtained from the Statutory Auditors, confirming compliance with the Companies Act, 2013 and the SBEB Regulations is provided in Annexure ‘B' forming part of this Report. ESOP Disclosures: There has been no material change in the Employee Stock Option Schemes (ESOP schemes) during the current financial year. The ESOP Schemes are in compliance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 ("SBEB Regulations"). OTHER DISCLOSURES: The Company has formulated a policy on 'Protection of Women's Rights at Workplace' as per the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. This has been widely disseminated. There were no cases of sexual harassment complaints received by the Company in the financial year 2016-17. PROTECTION OF WOMEN AT WORKPLACE: COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND ANNUAL GENERAL MEETINGS: The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and Annual General Meetings. The information in respect of employees of the Company required pursuant to Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended from time to time, is provided in Annexure 'H' forming part of this report. In terms of Section 136(1) of the Act and the rules made thereunder, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any Shareholder interested in obtaining a copy of the same may write to the Company Secretary. None of the employees listed in the said Annexure is related to any Director of the Company. The details of remuneration as required to be disclosed under the Companies Act, 2013 and the rules made thereunder are given in Annexure 'D' forming part of this Board report. The disclosures relating to ESOPS required to be made under the provisions of the Companies Act, 2013 and the rules made thereunder and the SBEB Regulations together with a certificate obtained from the Statutory Auditors, confirming compliance, is provided on the website of the Company http://investors.larsentoubro. com/Listing-Compliance.aspx. frauds and violation of Company's Code of Conduct or Ethics Policy. The Policy has been suitably modified to meet the requirements of Vigil Mechanism under the Act. The policy provides for adequate safeguards against victimisation of persons who avail the same and provides for direct access to the Chairperson of the Audit Committee. The Audit Committee of the Company oversees the implementation of the Whistle-Blower Policy. DECLARATION OF INDEPENDENCE: COMPANY POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION: The disclosures required to be given under Section 135 of the Companies Act, 2013 read with Rule 8(1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014 are given in Annexure 'C' forming part of this Board Report. The details of the various projects and programs which can be undertaken by the Company as a part of its CSR policy framework is available on its website http://investors. larsentoubro.com/Listing-Compliance.aspx. The Corporate Social Responsibility Committee comprises of Mr. Vikram Singh Mehta, Mr. R. Shankar Raman and Mr. D. K. Sen as the Members. Mr. Vikram Singh Mehta is the Chairman of the Committee. A detailed note on risk management is given under financial review section of the Management Discussion and Analysis on pages 225 to 227 of this Annual Report. CORPORATE SOCIAL RESPONSIBILITY: The Apex Risk Management Committee comprises of Mr. A. M. Naik, Mr. S. N. Subrahmanyan and Mr. R. Shankar Raman. Mr. A. M. Naik is the Chairman of the Committee. The Company has formulated a risk management policy and has in place a mechanism to inform the Board Members about risk assessment and minimization procedures and periodical review to ensure that executive management controls risk by means of a properly designed framework. RISK MANAGEMENT POLICY: Information as required to be given under Section 134(3) (m) read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is provided in Annexure 'A' forming part of this Board Report. DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL APPOINTED/ RESIGNED DURING THE YEAR: CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO: MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY, BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT: 59 The Board of Directors of the Company has approved the Dividend Distribution Policy on 22nd November, 2016 in line with regulation 43A of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The Policy is provided in Annexure 'G' forming part of this Board Report and also uploaded on the Company's website at http:// investors.larsentoubro.com/Listing-Compliance.aspx. The Directors recommend payment of dividend of ₹ 21 (1050%) per equity share of 2/- each on the pre-bonus share capital which works out to 14 per equity share post issue of bonus shares. The Company has not transferred any amount to the reserves during the current financial year. DIVIDEND: AMOUNT TO BE CARRIED TO RESERVE: The total income for the financial year under review was 68,273 crore as against 66,154 crore for the previous financial year registering an increase of 3%. The profit before tax from continuing operations including exceptional items was 6,758 crore for the financial year under review as against ₹6,256 crore for the previous financial year, registering a increase of 8%. The profit after tax from continuing operations including exceptional items was 5,454 crore for the financial year under review as against 5,000 crore for the previous financial year, registering an increase of 9%. There are no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this report. The Company has in place a Nomination and Remuneration Committee in accordance with the requirements of the Companies Act, 2013 read with the rules made thereunder and Regulation 19 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The details relating to the same are given in Annexure 'B' - Report on Corporate Governance forming part of the Board Report. Members are requested to refer to pages 79 to 81 of this Annual Report. The Committee has formulated a policy on Director's appointment and remuneration including recommendation of remuneration of the key managerial personnel and other employees, board diversity, composition and the criteria for determining qualifications, positive attributes and independence of a Director. The Committee has also formulated a policy on Board Diversity. Mr. Bahram Navroz Vakil resigned as Director of the Company on 1st August, 2016. The Board places on Mr. Subodh Bhargava was appointed as an Independent Director of the Company with effect from April 1, 2014 to March 29, 2017. Pursuant to the recommendation of Nomination and Remuneration Committee, the Board at its Meeting held on January 28, 2017 has approved the re-appointment of Mr. Subodh Bhargava as an Independent Director for a further term of 5 years from March 30, 2017 to March 29, 2022, subject to the approval of the shareholders, since the Board was of the opinion that his association would be of immense benefit to the Company and it was desirable to avail services of Mr. Bhargava as an Independent Director. The Company has in place an Audit Committee in terms of the requirements of the Companies Act, 2013 read with the rules made thereunder and Regulation 18 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The details relating to the same are given in Annexure 'B' - Report on Corporate Governance forming part of the Board Report. Members are requested to refer to pages 77 to 79 of this Annual Report. AUDIT COMMITTEE: This information is given in Annexure 'B' - Report on Corporate Governance forming part of this Report. Members are requested to refer to pages 74 and 75 of this Annual Report. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS: The Company has also disclosed on its website http:// investors.larsentoubro.com/Listing-Compliance.aspx details of the familiarization programs formulated to educate the Directors regarding their roles, rights and responsibilities in the Company and the nature of the industry in which the Company operates, the business model of the Company, etc. of the Company http://investors. larsentoubro.com/Listing- Compliance.aspx. LARSEN & TOUBRO record its appreciation of the contribution by Mr. Vakil as Director of the Company. In-house development of MIS Dashboard to monitor project costs, departmental overheads, inventory and vendor payables The terms and conditions of appointment of the Independent Directors are placed on the website The notice convening the AGM includes the proposal for appointment/re-appointment of Directors. The Board has appointed Mr. S.N. Subrahmanyan as Chief Executive Officer and Managing Director with effect from 1st July, 2017, for a period of five years subject to approval of the shareholders. The current term of Mr. A. M. Naik as Group Executive Chairman ends on September 30, 2017. Your Board of Directors had requested Mr. Naik to provide advice, guidance and mentorship to the Company's executive management in the capacity of Non-Executive Chairman. Mr. Naik has acceded to the Board's request and shall continue as Non-Executive Chairman with effect from October 1, 2017 for a period of three years. Mr. Sushobhan Sarker, Mr. R. Shankar Raman and Mr. Shailendra Roy retire by rotation at the ensuing AGM and being eligible offer themselves for re-appointment. The Board has appointed Mr. J. D. Patil as an Additional Director of the Company at its Meeting dated 29th May, 2017 with effect from 1st July, 2017. Mr. Patil will hold office till the ensuing AGM and is eligible for appointment. The Board has also appointed him as the Whole-time Director of the Company with effect from 1st July, 2017, for a period of five years subject to approval of the shareholders. The Board has appointed Mr. Arvind Gupta as an Additional Director representing Administrator of the Specified Undertaking of the Unit Trust of India with effect from July 1, 2017. Mr. Gupta will hold office till the ensuing Annual General Meeting (AGM) and is eligible for appointment. 60 The Company has disclosed information about the establishment of the Whistle-Blower Policy on its website http://investors.larsentoubro.com/corporate governance.aspx. During the year, no person has been declined access to the Audit Committee, wherever desired. 60 The Company has been one of the first engineering and construction companies in India to publish its report on Corporate Sustainability. • • Introduction of 67" Hydraulic Tire Curing Press, 750 T Bladder Press and Mixing mill Introduction of New state-of-the-art Loader for Off The Road (OTR) Tire Curing Presses and automatic Mold Height Adjustment for OTR Presses Development of newer variants of Power Packs & Tipper Wet Kit Development of Paver, Pneumatic Tired Roller & Skid Steer Loaders Introduction of 56.5" -2 position PCI for Domestic order • Introduction of "SMART Comm" solution Introduction of 64" -2 Position PCI with safety fence Processing Machinery by designing, developing specifications and adapting to international conditions Development of cement grouted bituminous macadam for high speed corridors, expressways, aprons and ports Development of NABL accredited testing facility for geotextiles and geo-synthetics used in sub soil strengthening Industrial scale production of stockpile, all weather cold pot-hole mix for infra project sites Development of low cement and impermeable Plastic concrete for Dam structures Mechanical Studies on light weight concrete for structural application and specially designed double blend structural grade Development of polymer modified repair mortar for multilevel carparks Execution of Technology Licensing & Assistance (TLA) Agreement with Chiyoda Corporation for Flue Gas Desulphurization Technology Indigenization of various components for Rubber Development of new, cost-optimized meter platforms that offer better features, development and integration of modules to facilitate remote communication of meter data over Radio / GSM Launch MV drives thus completing LV & MV drive range Developed Smart and Pre-paid meter where each and every instance in power distribution will be recorded BUSINESS RESPONSIBILITY REPORTING: of ship, in off shore patrol vessels, to have better clash free interface between design and production Adoption of Modular Construction Technology for the erection of 6mm thick carbon steel liner panels for IC wall and top dome lining for Kakrapar Nuclear Power Plant in Gujarat Designed Bridge builder to erect precast segments by cantilever construction method for straight spans and curved spans upto 128m radius of curvature Developed segmental bridge launching girder with hinge mechanism and adopted in metro construction projects Implementing BIM at EDRC - Metros which aims at mapping on a GIS platform, the various aspects and features of Metro Rail with their associated information Launched emergency response mobile surveillance control and command centre vehicle in Mumbai, first of its kind in India which is capable of recording & transmitting live feed to the police control room Implemented BIM for road project on pilot basis for a 5 km stretch Utilisation of Digital technology for topographic surveys such as vehicle based LIDAR survey Implemented the 2D Grade Control system on few motor graders in Delhi Agra Road Project Manufacturing latest technology products in material handling equipment namely Tandem Tippler & Side Arm Charger, High Capacity Stacker cum Reclaimer, Underslung Paddle Feeder, Drag Plough for Coke Oven, Bin Extractors Introduced New Product Intensity (NPI) index which measures the sales of products introduced in the market in last five years to the total sales in the financial year 67 20 68 • • • Development of various new products in the power distribution and motor control sector namely AU range of final distribution products, sub-main Distribution boards, new ratings in Omega range of Air Circuit Breakers and Busbar Trunking systems Launched comprehensive product portfolio to provide solution for Power Quality Management Development of new, cost-optimized meter platforms that offer better features, development and integration of modules to facilitate remote communication of meter data over Radio / GSM and development of Pre-Paid Meters, Smart Meters, Protective Relays and Panel Meters Development of Armored vehicle mobility simulation capability, Laser based optics simulation capability, Intelligent Collaborative Robotics System, Unmanned / Autonomous Platforms & Systems, Waterjet Propulsion Systems, Field & Air Defence Gun Systems, Laser based Beam directing, tracking and pointing system, Trisonic Wind Tunnel Systems and other technics in the HED Sector Introduction of portable flux recycler at welding point to avoid ovens Launched submersible pump controllers for agriculture market and DC contactors in telecom applications methodologies in energy absorption of shotcrete panels. The Company has sold its entire stake in L&T General Insurance Company Limited, a wholly-owned subsidiary, to HDFC ERGO General Insurance Company Limited. The Company has sold its 10.23% stake in L&T Technology Services Limited (LTTS), a subsidiary, through an Initial Public offering of LTTS equity shares. LTTS got listed on 23rd September, 2016. The Company has sold its 10.30% stake in Larsen & Toubro Infotech Limited (LTI), a subsidiary, through an Initial Public offering of LTI equity shares. LTI got listed on July 21, 2016. each have been issued to the Company in lieu of the same on 29th March, 2017. 5. 4. 3. 2. STATE OF COMPANY AFFAIRS: During the year under review, there were no material and significant orders passed by the regulators or courts or tribunals impacting the going concern status and the Company's operations in future. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS: http://www.larsentoubro.com/corporate/sustainability.aspx. Development of EFNARC and RILEM The detailed Corporate Sustainability Report is also available on the Company's website As per Regulation 34 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, a separate section on Business Responsibility Reporting forms a part of this Annual Report (refer pages 19 to 35). The scheme of arrangement between L&T Valves Limited and L&T Electrical & Automation Limited was approved by National Company Law Tribunal on April 27, 2017 with appointed date as November 1, 2016. Pursuant to the scheme L&T Electrical & Automation Limited issued 73,88,796 shares to Larsen & Toubro Limited as a consideration towards transfer of certain assets by L&T Valves Limited. Accordingly the value of investment in L&T Electrical and Automation Limited was increased by ₹40.31 crore and reduced in L&T Valves Limited by 40.31 crore during the year 2016-17. The Company has formulated a policy on identification of material subsidiaries in line with Regulation 16(c) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 and the same is placed on the website at http://investors.larsentoubro.com/Listing-Compliance. aspx. The Company does not have any material subsidiaries. LARSEN & TOUBRO A statement containing the salient features of the financial statement of subsidiary/associate/joint venture companies is provided on pages 471 to 480 of this Annual Report. Development of pre-packed concrete for remote site and inaccessible areas C) Performance and Financial Position of each subsidiary/associate and joint venture companies: Triple blend shotcrete mix M40 has been used in Special projects for tunnels Development of NABL accredited testing facility for fineness by Blaine, Alkali Silica aggregates, Non Destructive Tests on concrete Development of NABL test facilities for evaluating sealents used in expansion joints of structures Mechanical studies on water barrier disc tie rods All the related party transactions were in the ordinary course of business and at arm's length. The Audit Committee has approved all related party transactions for the FY 2016-17 and estimated transactions for FY 2017-18. The Company has a process in place to periodically review and monitor Related Party Transactions. The Audit Committee and the Board of Directors have approved the Related Party Transactions Policy and the same has been uploaded on the Company's website http:// investors.larsentoubro.com/Listing-Compliance.aspx. Optimized concrete mix design solutions were implemented in PTD-IC PARTICULARS OF CONTRACTS OR ARRANGEMENTS SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 in Note 37 and 38 forming part of the financial statements The Company has disclosed the full particulars of the loans given, investments made or guarantees given or security provided as required under Section 186 of the Companies Act, 2013 and Regulation 34(3) and Schedule V of the PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN OR SECURITY PROVIDED BY THE COMPANY: WITH RELATED PARTIES: 199.51 Total 16133.05 0.30% [C] FOREIGN EXCHANGE EARNINGS AND OUTGO: 145.98 Recurring crore 2016-17 Foreign Exchange earned Total R&D expenditure as a percentage of total turnover 17132.05 999.00 exports Total Foreign Exchange used 15588.43 72 LARSEN & TOUBRO 53.53 B. A. CORPORATE GOVERNANCE Annexure 'B' to the Board Report Foreign Exchange saved / deemed Capital side effects due to the presence of carcinogens in residual chlorine. Absorbed successfully in the 2 MLD STP at President's Estate, New crore absorption, if any Treatment Plant Corporate Governance is a set of principles, processes and systems which govern a company. The elements of Corporate Governance are independence, transparency, accountability, responsibility, compliance, ethics, values and trust. Corporate Governance enables an organization to perform efficiently and ethically generate long term wealth and create value for all its stakeholders. in Sewage 2015 Vortex Grit Removal Absorption has been initiated in FY 2016-17. Its completion is linked with the completion of the first project where L&T Power would install FGDs. Absorbed successfully in the 2 MLD President estate STP. Implementing for the India's largest gravity channel UV disinfection system in 120 MLD Varanasi STP. Implementation of Ultra Violet (UV) disinfection system for secondary treated wastewater. This is preferred over the conventional chlorination system which has harmful Delhi. 2016 Works for the 5 new pumping stations of Greater Colombo project is in progress. S. Technology No. Imported Year of Status of absorption Import & reasons for non- absorption, if any It is the first of its kind to be installed in India for sewage application. It operates on VORTEX Principle where the grit removal happens by tangential Centrifugal force. Grit removal efficiency is about 95 %. The major advantage of this system is that they occupy less area and thus leads to easy maintenance. This is preferred over the conventional grit removal system for its high grit removal efficiency and compactness. (iv) Expenditure incurred on Research & Development: 2016-17 The Company believes that sound Corporate Governance is crucial for enhancing and retaining investor trust and your Company always seeks to ensure that its performance goals are met accordingly. The Company has established systems and procedures to ensure that its Board of Directors is well informed and well equipped to fulfill its overall responsibilities and to provide management with the strategic direction needed to create long term shareholders' value. The Company has adopted many ethical and transparent governance practices even before they were mandated by law. The Company has always worked towards building trust with shareholders, employees, customers, suppliers and other stakeholders based on the principles of good corporate governance. The Company Secretary prepares the agenda and the explanatory notes, in consultation with the Group Executive Chairman and circulates the same in advance to the Directors. Every Director is free to suggest inclusion of items on the agenda. The Board meets at least once every quarter, inter alia, to review the quarterly results. The Company also provides Video Conference facility, if required, for participation of the Directors at the Board/Committee Meetings. Additional Meetings are held, when necessary. Presentations are made on business operations to the Board by Independent Company / Business Units. Senior management personnel are invited to provide additional inputs for the items being discussed by the Board of Directors as and when necessary. The Minutes of the proceedings of the Meetings of the Board of Directors are noted and the draft minutes are circulated amongst the Members of the Board for their perusal. Comments, if any, received from the Directors are also incorporated in the Minutes, in consultation with the Chairman. Thereafter, the minutes are signed by the Chairman of the Board at the next meeting. The Company's essential character revolves around values based on transparency, integrity, professionalism and accountability. At the highest level, the Company continuously endeavors to improve upon these aspects on an ongoing basis and adopts innovative approaches for leveraging resources, converting opportunities into achievements through proper empowerment and motivation, fostering a healthy growth and development of human resources to take the Company forward. BOARD OF DIRECTORS a. Composition of the Board: The Company's policy is to have an appropriate mix of Executive, Non-Executive & Independent Directors. As on March 31, 2017, the Board comprises of the Group Executive Chairman, the Deputy Managing Director & President, 4 Executive Directors, 3 Non-Executive Directors (including 2 representing financial institutions), and 11 Independent Directors. The composition of the Board, as on 31st March, 2017, is in conformity with the provisions of the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. b. Meetings of the Board: The Meetings of the Board are generally held at the Registered Office of the Company at L&T House, Ballard Estate, Mumbai 400 001 and also if necessary, in locations, where the Company operates. The Meetings of the Board have been held at regular intervals with a time gap of not more than 120 days between two consecutive Meetings. During the year under review, 10 meetings were held on April 11, 2016, April 12, 2016, May 25, 2016, May 26, 2016, May 27, 2016, May 28, 2016, July 29, 2016, November 7, 2016, November 22, 2016 and January 28, 2017. The Independent Directors met on April 6, 2017 to discuss, interalia, the performance evaluation of the Board, Committees, Chairman and the individual Directors. LARSEN & TOUBRO The following is the composition of the Board of Directors as on March 31, 2017. Their attendance at the Meetings during the year and at the last Annual General Meeting is as under: Name of Director Category Meetings held during the year No of Board Meetings Attendance at last AGM attended Mr. A. M. Naik GEC 10 10 2016 YES Mr. S. N. Subrahmanyan DMD 10 Since 1999, developing and implementing five-year strategy plan is a regular process followed by the Company. This process called Lakshya has helped the Company to achieve its growth aspirations and created value for all stakeholders. During the year, the strategic plan for the period 2016 - 2021 named Lakshya 2021 was developed and approved by the Board. Necessary processes and review mechanism have been established to ensure implementation of the plan. As a part of Lakshya 2016, the Company decided to have Hybrid Holdco Structure. Accordingly, 10 Independent Companies (ICs) were created. During the process of evolving Lakshya 2021, the structure was reviewed and it was decided to continue with the IC Boards with certain modifications. The modified mandate of ICs have been implemented/ is under implementation. Needless to mention that the IC structure has enabled the Company to empower people and achieve substantial growth in their businesses. f. Independent Company Board (IC Board): The Non-Executive Directors / Independent directors play a critical role in enhancing balance to the Board processes with their independent judgement on issues of strategy, performance, resources, standards of conduct, etc., besides providing the Board with valuable inputs. C. THE GOVERNANCE STRUCTURE D. The Company has four tiers of Corporate Governance structure, viz.: (i) Strategic Supervision – by the Board of Directors comprising the Executive, Non-Executive Directors and Independent Directors. (ii) Executive Management - by the Corporate Management comprising of Group Executive Chairman, the Deputy Managing Director & President, 4 Executive Directors, 1 Non-Executive Director and 3 Senior Managerial Personnel. - (iii) Strategy & Operational Management – by the Independent Company Boards of each Independent Company (IC) (not legal entities) comprising of representatives from the Company Board, Senior Executives from the IC and independent members. (iv) Operational Management - by the Business Unit (BU) Heads. The four-tier governance structure, besides ensuring greater management accountability and credibility, facilitates increased autonomy to businesses, performance discipline and development of business leaders, leading to increased public confidence. ROLES OF VARIOUS CONSTITUENTS OF CORPORATE GOVERNANCE IN THE COMPANY a. Board of Directors (the Board): COMPANY'S CORPORATE GOVERNANCE PHILOSOPHY b. The EMC plays an important role in maintaining the linkage between IC's and the Company's Board as well as in realizing inter-IC synergies and benefits across ICs. The key responsibilities of the EMC include approval of policies cutting across IC's and also at Corporate level, covering capital investments, expansions, customer and supplier synergy, Corporate Social Responsibility (CSR) and reviewing the consolidated financials and budgets before they are presented to the Company Board. 73 E. 74 C. d. e. Group Executive Chairman (GEC): The GEC is the Chairman of the Board and the Executive Management Committee. His primary role is to provide leadership to the Board and the Corporate Management for realizing the approved strategic plan and business objectives. He presides over the Board and the Shareholders' meetings. The GEC provides leadership and devotes his full attention to certain core actions which include, inter alia, focus on restructuring, mentoring of senior executives, succession planning and corporate governance. He is the interface for critical Government entities and major customers of the Company and Group Companies. He provides support to the Company and its Group Companies, wherever necessary. Executive Directors (ED) / Senior Management Personnel: The Executive Directors, as members of the Board, along with the Senior Management Personnel in the Executive Management Committee, contribute to the strategic management of the Company's businesses within Board approved direction and framework. They assume overall responsibility for strategic management of business and corporate functions including its governance processes and top management effectiveness. Non-Executive Directors (NED) / Independent Directors: The Directors of the Company are in a fiduciary position, empowered to oversee the management functions with a view to ensuring its effectiveness and enhancement of shareholder value. The Board also reviews and approves management's strategic plan & business objectives and monitors the Company's strategic direction. Executive Management Committee (EMC): 2015 7. b) Development of Hot Bending Process for Fabrication of Titanium Sections for HSTDV program Development of Micro-electronics assembly & testing for TGET Fuses Completed Airworthiness Qualification of Integrated Life Support System - On-board Oxygen Generation System for fighter aircrafts Completed development and qualification of Oxygen System for Military Helicopters L&T - HE IC has entered into technology transfer agreement with a leading Global technology provider for Titanium Clad equipment Buildup capability in static and dynamic stability of amphibious tracked vehicle Development of plasma welding of Maraging steel and Titanium Launch of Automatic Tube and Tubesheet welding for Urea applications Development of weld overlay procedures for super duplex stainless steels, alloys 825 and alloy C-276 Development of Ultra Narrow gap GTAW process for closing seams of process plant equipment Development of Flux-less Arc Spot Welding with mixed gases for Nuclear export orders Development of Auto-TIG Overlay on Gasket Face and Split Ring for heat exchangers Development of Robotic FCAW of trunnions for Trans Nuclear projects Development of Automated High Sagita Nozzle Welding System Development of Trisonic Wind Tunnel Systems, Thermal Management system for high pressure and high temperature flow environment 69 69 Development of Underwater Weapon Launch Systems and Ka Band Feed using additive manufacturing techniques Development of Driver Vision Enhancement for Armoured Vehicles • Development of Railless Helo Traversing Systems Environment Protection measures introduced through Process change in bridging system Painting at Talegaon i.e BLT, Sarvatra, SSBS and Modular Bridge were changed from Zinc Chromate primer to Zinc Phosphate primer Changed the design of pins using stainless steel material to reduce the rework/rejection at site due to corrosion of pins in Bridging projects Development of 3D Printing for design and development of Micro wave guide component for Ka band telemetry through Metal 3D printing Adoption of bend plates and negotiating with Mills for supply of extended length of plates for reducing welding in the Tilt beam of TCT-5 production order • • • Automated Welding process established for 7.5m long RT quality Aluminum Butt joint Development of Laser cutting process using Diode Laser machine for HSLA Steel & Aluminum Developed in-house SPM for Hinge boring of BLT Development of Low Hydrogen Embrittlement Cadmium Plating process of Carbon Steels In-house Development of Resistance spot welding of Thin Stainless Steel Sheet metal sections In-house Process development for manufacturing of Precision Thin Section Aero Structural parts • • LARSEN & TOUBRO • • 10 • . • Development of test facilities for MIG and TIG welded specimens for Fatigue and tensile strength on bronze alloy sculpture specimens Creep studies on M65 grade self-compacting concrete In-house development by modification in IGM Robot, Gantry & Gulco trolley Development of NABL testing facility for Development of High volume fly-ash concrete for mass foundations Development of lime and fly-ash stabilized mixes with recycled concrete aggregates for base and sub-base layers for light, medium and heavy traffic pavements Development of high flexural strength PQC with alternate materials for durable rigid pavements Development of comprehensive online geotechnical databank as an effective tool for designers and contract teams across ICs Development of standard concrete mixes for cold weather concreting at sub-zero temperature Development of Surface Technologies like Alodine, Chromic acid anodization and Electroless Nickel Plating to meet International standards Establishment of Facility & Development of Painting process to meet International Military standards with precise thickness and gloss requirements In-house Development of Form Rolling process with combination of Metallic and Non-metallic Rollers Development of Manufacturing process of High precision Gears with our Business partners Development of precision mechanical & electronics integration, testing & tuning of Fin Actuation Systems Introduction of HIL (Hardware-in-the-loop) Simulation & Equipment validation - Equipment's testing under various environmental & load conditions Development of High Wear resistance process of Hard anodizing with Teflon impregnation for Aluminium Parts with business partners • Bituminous Emulsions used in flexible pavement construction Development of Hydro-squeezing fixture development in HDP for riveting operation. Developed U & Z extrusion cutting, slot milling & drilling fixtures for HDP Use of alternate curing techniques to reduce / eliminate the usage of water for concrete curing. Use of Geo polymer concrete which ensures elimination of cement from construction activities Economical and cost effective piles in solar projects thus saving time The use of clean water for producing aggregates (fine and coarse) drops the price of aggregates by 50% as compared to virgin aggregates use The recycling process can make the aggregate crushers self-sufficient The high flexural strength PQC with alternate materials reduces the crust thicknesses of rigid pavements and inturn reduces the overall construction cost of rigid pavements The enhancement in NABL accredited testing facility with geotextile, geosynthetic, bitumen emulsion, sealants, ASR, fineness by Blaines and NDT tests will improve the Company's brand image and give competitive advantage over its peers Development of pre-packed dry concrete is a ready solution for quick concreting in remote project sites and it minimizes manual labour along with improvement in the speed of construction The special fatigue and tensile tests on bronze alloy specimens were the major criteria for material qualification for prestigious SOU project The loT based monitoring system developed for solar trackers, cooling tower remote units, special coastal structures will automate critical data collection and its analysis Positioning for Futuristic Programs for Indian MoD under 'Make' and 'IDDM' category 10% reduction in welding in the Tilt beam of TCT-5 production order due to adopting bend plates and extended length of plates pallet and lower costs due to in-house machining of sub-assemblies Use of Emulsion based cold mixes with Reclaimed Asphalt Pavement materials as they are more environmental friendly over conventional bituminous mixes QRSAM first prototype on-time delivery by taking constraints under control in-house pallet 71 Improvement in manufacturing processes resulting in reduction in production cycle time, cost and rework (iii) Information regarding technology imported during the last 3 years: S. Technology No. Imported Year of Status of absorption Import & reasons for non- a) Flue Gas Desulphurization 2016 Increased self-reliance and savings in Foreign Exchange in process plant and power plant equipment sector UV disinfection system Continuous product development in the switchgear business at its various Department of Scientific & Industrial Research, Ministry of Science & Technology accredited R&D facilities in India and filing 101 Patent, 3 Trademark, 4 Design in India and 2 foreign patent applications and 18 foreign trade mark applications Expansion of switchgear product range and offerings to the infrastructure sector Strategic alignment with IOmniscient (Australian company) for its video analytics specialty • Development of remote controlled motorized fixture for hot plate handling on rolling machine Development of internal T-ring (Web to Flange) welding station using Auto GMAW and laser based seam tracking system Process development for long seam welding and overlay using mechanized system for Coke Drum repairs • Import substitution for hydrostatic expansion process of tube to tube-sheet joints in Heat Exchangers and EO Reactors Indigenous development of twin head Auto GMAW station with TAB based wireless control and seam tracking mechanism for welding of tube to ring joints in TWC project Indigenous development of SCADA based system for Hydro Pressure Test Automation Development of Military Communication Products namely network simulation and emulation for Tactical applications, network Management System for TCS, user services fall back on TDM Network, Desk Access Unit, Radio Relay Modules, manet based Wireless Node points, Radio Gateway for CNR Radios, legacy system interface and NEWN system interface for VLF Development of India's first indigenous chemical agent monitoring system in association with DRDE, Gwalior viz. Portable Chemical Agent Detector (PCAD) and Fixed Chemical Agent Detector (FCAD) which can be used by the Army, Navy, Air Force, and NDMA, Para-military forces, SPG and other security agencies Development for Network simulation and emulation for Battlefield Management System applications Indigenously developed RF modules like Up Converter, Down Converter, High Power Amplifier, Power Monitor and Switched Filter Bank Modules Developed a complete rugged field deployable Network Interface Unit (NIU) along with its Technology Partner used for Ethernet to Fiber Optic Media conversion Developed man-portable communication Introduction of new products like New 1-phase Meter with IrDA, 3-Phase Meter with IrDA, 1-Phase Pre-Paid Meter (Taurus), 3-phase Pre-Paid Meter (Atria), 1-Phase Smart Meter (Aurora), 3-Phase Smart Meter (Regor), 3-Phase Digital Panel Meter (Nova), New Trip Supervision Relay (TCS01-nX) & Motor Protection Relay (MPR200) Introduction of L&T's Outdoor Compact substation- N-Qube following Franchisee model Introduction of a new variant to the GIS (Gas insulated switchgear) family gateway unit for Indian Navy called Interoperable Communication System FAK which can be used for joint operations with foreign navy and humanitarian aid - disaster relief activities Developed capability for CFD simulation in areas such as two-phase flow analysis for boiling applications Development of Technology for Simulation of Manufacturing processes such as, simulation of Welding process and it's application for various projects such as fabrication of ITER Cryostat 70 10 LARSEN & TOUBRO . vessel and fabrication of various Chemical Equipment Development of improved High Temperature Heat Recovery (HTHR) for Ethylene Production plants Development of improved design of Feed Water Heaters for Supercritical Power Plants Development of Shell & Tube type LNG Vaporizers for land based LNG Regasification terminals Development of end to end Sales & Procurement cycles through Centralized ERP Server Introduction of advanced features like Click to Call, Click to Chat on Website, Portal for Customer interaction (ii) Benefits derived like product improvement, cost reduction, product development or import substitution: Developed Capabilities in High-end Finite Element Analysis including advanced FEA, Explicit Dynamic Simulation and Non-Linear Analysis YES 10 ED The Board of Directors has complete access to the information within the Company, which inter alia includes - Information to the Board: The details of Committee Chairmanships / Memberships are disclosed as per Regulation 26 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. Other Company Directorships includes directorships in all entities whose securities are listed and excludes unlisted private limited companies, foreign companies and Section 8 companies. • C. 4 2 1 5 7 8 Mr. Narayanan Kumar Mr. Sanjeev Aga 0 3 • 3 Annual revenue budgets and capital expenditure plans • BOARD COMMITTEES The important decisions taken at the Board / Committee meetings are communicated to the concerned departments / ICs promptly. An Action Taken Report is presented to the Board. d. Post-meeting internal communication system: Compliance or Non-compliance of any regulatory, statutory nature or listing requirements and investor service such as non-payment of dividend, delay in share transfer, etc., if any. Developments in respect of human resources F. LARSEN & TOUBRO Any issue, which involves possible public or product liability claims of substantial nature, including any Judgment or Order, if any, which may have strictures on the conduct of the Company Any materially relevant default, if any, in financial obligations to and by the Company or substantial non-payment for goods sold or services rendered, if any Quarterly report on fatal or serious accidents or dangerous occurrences, any material effluent or pollution problems Details of any joint venture, acquisitions of companies or collaboration agreement Minutes of meeting of Board of Directors, Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee • • Financing plans of the Company • Quarterly results and results of operations of ICs and business segments The Board currently has 5 Committees: 1) Audit Committee, 2) Nomination and Remuneration Committee, 3) Stakeholders' Relationship Committee, 4) Corporate Social Responsibility Committee and 5) Risk Management Committee. The terms of reference of the Board Committees are governed by the Board from time to time. The Board is responsible for constituting, assigning and co-opting the members of the Committees. The meetings of each Board Committee are convened by the Company Secretary in consultation with the respective Committee Chairman. The role and composition of these Committees, including the number of meetings held during the financial year and the related attendance are provided below. Ms. Naina Lal Kidwai 0 Ms. Sunita Sharma 0 0 Mr. Akhilesh Gupta 2 7 Mr. Adil Zainulbhai 2 2 Mr. Sushobhan Sarker 1 7 | Mr. Vikram Singh Mehta 5 4 6 0 1 2 1 Mr. Subramanian Sarma 0 2 1 Mr. Ajay Shankar 0 3 4 Mr. Thomas Mathew T. 2 0 5 1 0 0 Mr. M. Damodaran 1) Audit Committee Terms of reference: Valuation of undertakings or assets of the Company, wherever it is necessary; Evaluation of internal financial controls and risk management systems; Monitoring the end use of funds raised through public offers and related matters. Minutes of the Audit Committee Meetings are circulated to the Board of Directors and discussed, if necessary. ii) Composition: The Audit Committee of the Board of Directors was formed in 1986 and as on March 31, 2017 comprised 3 Independent Directors and 1 Non-Executive Director. iii) Meetings: During the year ended March 31, 2017, 9 meetings of the Audit Committee were held on April 23, 2016, May 13, 2016, May 24, 2016, July 28, 2016, September 28, 2016, November 7, 2016, November 21, 2016, January 27, 2017 and February 20, 2017. In addition to the above, the members of the Audit Committee also meet without the presence of management. The attendance of Members at the Meetings was as follows: Name Status No. of No. of Meetings Meetings during Attended the year Mr. M. M. Chitale Mr. M. Damodaran Mr. Sushobhan Sarker Mr. Bahram Vakil @ Mr. Sanjeev Aga # Chairman Scrutiny of inter-corporate loans and investments; 9 Approval or any subsequent modification of transactions of the Company with related parties; The recommendation for appointment, remuneration and terms of appointment of cost auditors of the Company; Review and monitor the auditor's independence and performance, and effectiveness of audit process; Qualifications in the draft audit report. Reviewing, with the management, the quarterly financial statements before submission to the board for approval; Reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document/prospectus/notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter; Reviewing, with the management, performance of statutory and internal 77 78 • auditors, and adequacy of the internal control systems; Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit; Discussion with internal auditors about any significant findings and follow up thereon; Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board; To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors; To review the functioning of the Whistle- Blower mechanism; Approval of appointment of CFO (i.e., the whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience & background, etc. of the candidate; Carrying out any other function as is mentioned in the terms of reference of the Audit Committee; Review the management discussion and analysis of financial condition and results of operations; i) 9 9 Significant adjustments made in the financial statements arising out of audit findings 5. 4. 3. Major accounting entries involving estimates based on the exercise of judgement by management 2. Changes, if any, in accounting policies and practices and reasons for the same Matters required to be included in the Directors' Responsibility Statement to be included in the Board's report terms of sub- section (5) of Section 134 of the Companies Act, 2013 1. Reviewing, with the management, the annual financial statements and the audit report before submission to the board for approval, with particular reference to: concern; discussion to ascertain any area of Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit Mr. R. Shankar Raman Recommending to the Board, the appointment, re-appointment, terms of appointment and, if required, the replacement or removal of the statutory auditor and the fixation of audit fees; Oversight of the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible; The role of the Audit Committee includes the following: Compliance with listing and other Member legal requirements relating to 6. 9 Member 9 6 Member 4 2 Member 4 4 Meetings held during the year are expressed as number of meetings eligible to attend. #appointed as a Member w.e.f. 4.10.2016 @ceased to be a Member w.e.f 1.8.2016 All the members of the Audit Committee are financially literate and have accounting or related financial management expertise. financial statements 1 Approval of payment to statutory auditors for any other services rendered by the statutory auditors; Mr. Subodh Bhargava YES 10 10 ID Mr. Akhilesh Gupta YES 9 10 ID Mr. Adil Zainulbhai ΝΟ 9 10 NED Mr. Sushobhan Sarker (Note 1) Mr. Bahram Vakil * YES ID 7 10 10 ID Mr. Thomas Mathew T. NO 7 10 NED Ms. Sunita Sharma (Note 1) ΝΑ 2 2 NED Mr. Swapan Dasgupta (Note 2)! ΝΑ 7 YES 9 Mr. Vikram Singh Mehta Mr. M. V. Satish YES 10 10 ED Mr. D. K. Sen YES 10 10 ED Mr. Shailendra Roy YES 10 10 3 ED 10 10 YES NO 7 Disclosure of any related party transactions ID Mr. M. Damodaran YES 9 10 ID Mr. Subodh Bhargava YES 10 10 ID Mr. M. M. Chitale 10 Mr. Ajay Shankar ID Ms. Naina Lal Kidwai 7 8 Mr. R. Shankar Raman 2 3 Mr. S. N. Subrahmanyan 0 3 Mr. A. M. Naik Memberships No. of Committee No. of other Company Directorships Name of Director As on March 31, 2017, the number of other Directorships & Memberships / Chairmanships of Committees of the Board of Directors are as follows: 76 No. of Committee Chairmanships 1 0 Mr. Shailendra Roy 4 Mr. Subramanian Sarma 3 7 Mr. M. M. Chitale 0 0 75 0 0 0 1 Mr. D. K. Sen 0 1 9 Mr. M. V. Satish None of the Directors hold the office of director in more than the permissible number of companies under the Companies Act, 2013 or Regulation 25 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. 0 None of the above Directors are related inter-se. 8 ID Mr. Narayanan Kumar@ Mr. Sanjeev Aga $ YES 10 ID YES YES 10 NED YES 10 2. 10 ID 10 ID 10 6 1. ! ceased to be a Director w.e.f 15.5.2016 $ appointed as a Director w.e.f. 25.5.2016 ID - Independent Director Executive Director ED GEC Group Executive Chairman DMD Deputy Managing Director & President NED - Non-Executive Director @ appointed as a Director w.e.f. 27.5.2016 2. Representing equity interest of SUUTI Note: 1. Representing equity interest of LIC Meetings held during the year are expressed as number of meetings eligible to attend. YES 5 * ceased to be a Director w.e.f 1.8.2016 3001 - 4000 2.00 3.85 87,83,82,994 94.15 3,58,86,237 1,86,96,572 Held in dematerialized form in NSDL Held in dematerialized form in CDSL Physical 1.48 1,38,08,145 5,560 0.60 2001 - 3000 17,959 1.94 7.42 2,53,31,424 1001-2000 2.97 % of total capital issued 2,76,73,608 38,971 4.22 2.72 2,351 0.25 2,474 0.27 76,31,76,006 81.80 9,23,628 100.00 93,29,65,803 100.00 0.88 Physical 1,86,96,572 2.00% 6,92,23,095 1) Categories of Shareholders is as under: CDSL 3,58,86,237 3.85% 10001 & Above TOTAL as on March 31, 2017 Shares held in Demat / Physical Form 2.01 1,87,50,380 0.73 67,96,977 1,505 0.16 2,690 0.29 5001 10000 4001 - 5000 100.00 93,29,65,803 Total 82,06,168 8,52,118 92.26 Month % July June May 1288.75 1177.80 1254.60 7992.00 7516.85 7849.80 April Close Close 2016 Month High Low Month High Low NIFTY L&T NSE Price (₹) BSE SENSEX Daily Closing Price 16 16 16 16 16 16 16 16 16 17 17 17 Category Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 1496.45 1223.30 1473.55 8213.60 7678.35 8160.10 1517.00 1401.00 1496.50 8308.15 7927.05 8287.75 1615.00 1500.70 1558.85 8674.70 8287.55 8638.50 Upto 500 501-1000 August 1586.00 1419.20 1512.95 8819.20 8540.05 8786.20 September 1545.95 1411.50 1433.15 8968.70 8555.20 8611.15 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar No. of shares Shareholding Number % Shareholders Number No. of Shares The number of shares held in dematerialized and physical mode is as under: k) Distribution of Shareholding as on March 31, 2017: LARSEN & TOUBRO As required under Regulation 40 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, a certificate on half yearly basis confirming due compliance of share transfer formalities by the Company from Practicing Company Secretary has been submitted to Stock Exchanges within stipulated time. The share transfer activities under physical mode are carried out by the RTA. Shares in physical mode which are lodged for transfer are processed and returned within the stipulated time. The share related information is available online. Physical shares received for dematerialization are processed and completed within a period of 21 days from the date of receipt. Bad deliveries are promptly returned to Depository Participants (DP's) under advice to the shareholders. Share Transfer System: Karvy Selenium Tower B, Plot number 31 & 32, Financial District, Gachibowli, Nankramguda, Hyderabad, Telangana - 500 032. Unit: Larsen & Toubro Limited Karvy Computershare Pvt. Ltd. Registrar and Share Transfer Agents (RTA): 16 16 16 16 16 16 16 16 16 17 17 17 Daily Closing Price j) 31.03.2017 s) Investor Grievances: No. of Shares Larsen & Toubro Limited, r) Address for correspondence: The L&T Group's facilities for design, engineering, manufacture, modular fabrication and production are based at multiple locations within India including Ahmednagar, Ankleshwar, Bengaluru, Chennai, Coimbatore, Faridabad, Hazira (Surat), Kattupalli (near Chennai), Kanchipuram, Mumbai, Navi Mumbai, Mysore, Pithampur, Puducherry, Rajpura, Kansbahal (Rourkela), Talegaon and Vadodara. L&T's international manufacturing footprint covers the Gulf (Oman, Saudi Arabia, U.A.E), South East Asia (Malaysia and Indonesia) and the U.K. The L&T Group also has an extensive network of offices in India and around the globe. The presence of these offices appear on pages 12 and 13 of this Annual Report. q) Plant Locations: Mumbai - 400 001. Ballard Estate, Ground Floor, Asian Building, 17, R. Kamani Marg, IDBI Trusteeship Services Limited p) Debenture Trustees (for privately placed debentures): 88 87 issued by the Company are listed on the Wholesale Debt Market (WDM) of National Stock Exchange of India Limited (NSE) and / or BSE Limited (BSE). The redeemable Non-Convertible debentures o) Listing of Debt Securities: These Convertible Bonds are listed on the Singapore Exchange Securities Trading Limited. Underlying Equity Shares / GDR's that 63,46,986 may be issued pursuant to conversion shares notices in respect of (iii) above NIL L&T House, Ballard Estate, Mumbai 400 001. Tel. No. (022) 6752 5656, Fax No. (022) 6752 5893 USD 200 million Shareholder correspondence may be directed to the Company's Registrar and Share Transfer Agent, whose address is given below: 2. 21000 Employees across the Company as well as the group are being sensitized about the various policies and governance practices of the Company. The Company had designed in-house training workshops on Corporate Governance with the help of an external faculty u) Awareness Sessions / Workshops on Governance practices: The Company has appointed Mr. Arnob Mondal, Vice President (Corporate Accounts & Investor Relations), as Chief Investor Relations Officer. The Company also formulated Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information which is available on Company's Website http://investors.larsentoubro. com/Listing-Compliance.aspx. Mr. N. Hariharan, Company Secretary has been designated as the Compliance Officer. Pursuant to the SEBI (Prohibition of Insider Trading) Regulations, 2015 (SEBI Insider Trading Regulations), the Company has suitably modified its Securities Dealing Code for prevention of insider trading with effect from May 15, 2015. The objective of the Code is to prevent purchase and/or sale of shares of the Company by an Insider on the basis of unpublished price sensitive information. Under this Code, Designated Persons (Directors, Advisors, Officers and other concerned employees / persons) are prevented from dealing in the Company's shares during the closure of Trading Window. To deal in securities beyond specified limit, permission of Compliance Officer is also required. All the Designated Employees are also required to disclose related information periodically as defined in the Code. Directors and designated employees who buy and sell shares of the Company are prohibited from entering into an opposite transaction i.e sell or buy any shares of the Company during the next six months following the prior transactions. Directors and designated employees are also prohibited from taking positions in the derivatives segment of the Company's shares. t) Securities Dealing Code: The Company has designated an exclusive e-mail id viz. IGRC@LARSENTOUBRO.COM to enable investors to register their complaints, if any. The Company strives to reply to the complaints within a period of 3 working days. Tel: (022) 6623 5454/5412/5427 Fort, Mumbai - 400 023. Ground Floor, Ambalal Doshi Marg, Behind BSE Limited, Unit: Larsen & Toubro Limited 24-B, Raja Bahadur Mansion, Karvy Computershare Pvt. Ltd. Website: www.karvycomputershare.com Email: einward.ris@karvy.com Fax: (040) 2342 0814 Toll free number: 1-800-3454-001 1. Karvy Computershare Pvt. Ltd. Unit: Larsen & Toubro Limited Karvy Selenium Tower B, Plot 31 & 32, Gachibowli, Financial District, Nanakramguda, Hyderabad, Telengana - 500 032. Tel: (040) 6716 2222 31.03.2016 USD 200 million NIL The Company's Shares are required to be compulsorily traded in the Stock Exchanges in dematerialized form. The Company had sent letters to shareholders holding shares in physical form emphasizing the benefits of dematerialization. Foundation Welfare L&T Employees 23.57% General Public as on March 31, 2017 Categories of Shareholders 21,98,79,572 23.57 22,72,87,843 24.40 93,29,65,803 100.00 93,14,78,845 100.00 10,32,87,263 11.07 7,67,74,808 8.24 6,43,39,638 6.90 6,50,66,088 6.99 15,09,274 0.16 14,49,515 0.16 11,47,52,281 12.30 11,47,52,281 12.32 1,76,21,579 1.89 1,92,13,684 2.06 Mutual Funds Bodies Corporate Directors & Relatives L&T Employees Welfare Foundation General Public TOTAL Foreign Institutional Investors Shares underlying GDRs Financial Institutions 25,04,43,440 26.84 27,55,72,334 29.58 16,11,32,756 17.27 15,13,62,292 16.25 - NSDL 87,83,82,994 94.15% % No. of Shares % 12.30% issued pursuant to conversion as per (ii) above Directors & Relatives- 26.84% m) Dematerialization of shares & Liquidity: Shares underlying GDRs 1.89% Mutual Funds 11.07% Bodies Corporate. 6.90% 0.16% (v) -Foreign Institutional (iv) Underlying Equity Shares/GDR's (iii) Principal Value of Bonds outstanding as at March 31, 2017 | Principal Value of the Bonds issued Principal Value of Bonds converted to GDRs since issue. (ii) (i) 0.675% USD 200 million Foreign Currency Convertible Bonds due 2019 The Company has the following Foreign Currency Convertible Bonds outstanding as on March 31, 2017: The outstanding GDRs are backed up by underlying equity shares which are part of the existing paid-up capital. n) Outstanding GDRs / ADRs / Warrants or any Convertible Instruments, conversion date and likely impact on equity: Investors 17.27% Financial Institutions 600 All the Independent Directors give a certificate confirming that they meet the "independence criteria" as mentioned in Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. 22000 0.017 0.223# 0.290 Mr. Adil Zainulbhai 0.048 0.014 0.342 0.404 Mr. Akhilesh Gupta 0.055 0.150 0.205 Mr. Bahram Vakil * 0.035 0.005 0.165 0.205 0.050 Mr. Narayanan Kumar@ % ceased to be a Director w.e.f. 15.5.2016 # Payable to respective Institutions they represent. Details of shares and convertible instruments held by the Independent Directors / Non-Executive Directors as on March 31, 2017 are as follows: Names Mr. M. M. Chitale Mr. Subodh Bhargava Mr. M. Damodaran Mr. Vikram Singh Mehta Mr. Adil Zainulbhai Mr. Akhilesh Gupta No. of Shares held 1629 750 150 885 Mr. Sushobhan Sarker * $ appointed as a Director w.e.f. 25.5.2016 @ appointed as a Director w.e.f. 27.5.2016 * ceased to be a Director w.e.f. 1.8.2016 Mr. Sushobhan Sarker 0.322 0.382 0.010 Mr. M. V. Satish 1.01 0.63 1.44 4.32 The above amounts also include perquisite on exercise of ESOPS and tax on ESOPs borne by employer * Perquisites include perquisite value related to employee stock options exercised during the year in respect of stock options granted over the past several years by a subsidiary company - 19.01 crore. ** Retirement Benefits include encashment of accumulated past service leave 32.21 crore Names Notice period for termination of appointment of Deputy Managing Director and other Whole-time Directors is six months on either side. No severance pay is payable on termination of appointment. Details of Options granted under Employee Stock Option Schemes are provided on the website of the Company www.larsentoubro.com. (b) Non-Executive Directors: The details of remuneration paid / payable to the Non-Executive Directors is as follows: Sitting Fees for crore Sitting Commission Total Fees for Board Committee Meeting Meeting Mr. M. M. Chitale 0.055 0.026 0.380 0.461 Mr. Subodh Bhargava 0.050 0.017 0.495 0.562 Mr. M. Damodaran 0.040 0.026 0.339 0.405 Mr. Vikram Singh Mehta 0.050 150 100 200 | Ms. Sunita Sharma * during Attended the year Chairperson Member 4 1 4 4 Member 4 4 Meetings held during the year are expressed as number of meetings eligible to attend. Mr. N. Hariharan, Company Secretary is the Compliance Officer. iv) Number of Requests / Complaints: During the year, the Company has resolved investor grievances expeditiously except for the cases constrained by disputes or legal impediments. During the year, the Company/ its Registrar's received the following complaints from SEBI / Stock Exchanges and queries from shareholders, which were resolved within the time frames laid down by SEBI. Opening Received Resolved Pending* Balance * Investor queries shown outstanding as on March 31, 2017 have been subsequently resolved. The substantial increase in number of queries is on account of the Company's repeated reminders to shareholders regarding unclaimed shares and dividends. The Board has delegated the powers to approve transfer of shares to a Share Transfer Committee of Executives comprising of four Senior Executives. This Committee held 41 meetings during the year and approved the transfer of shares lodged with the Company. 4) Corporate Social Responsibility Committee: i) Terms of reference: The terms of reference of the CSR Committee are as follows: (a) formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by the Company; (b) recommend the amount of expenditure to be incurred on the activities referred to in clause (a); and (c) monitor the Corporate Social Responsibility Policy of the Company from time to time. ii) Composition: As on March 31, 2017 the CSR Committee comprised of 1 Independent Director and 2 Executive Directors. iii) Meetings: During the year ended March 31, 2017, 4 meetings of the CSR Committee were held on July 19, 2016, August 11, 2016, November 17, 2016 and March 14, 2017. The attendace of Members at the Meetings was as follows: Particulars Complaints: No. of No. of Meetings Meetings 4.82 Status Mr. Ajay Shankar 100 Mr. Thomas Mathew T. 100 Mr. Ajay Shankar 100 Mr. Subramanian Sarma 21100 Ms. Naina Lal Kidwai 100 Mr. Sanjeev Aga 3000 Mr. Narayanan Kumar 1000 held jointly with the Institution they represent. 3) Stakeholders' Relationship Committee: i) Terms of reference: The terms of reference of the Stakeholders' Relationship Committee are as follows: Redressal of Shareholders' / Investors' complaints; Allotment, transfer & transmission of Shares/Debentures or any other securities and issue of duplicate certificates and new certificates on split / consolidation / renewal etc. as may 81 82 be referred to it by the Share Transfer Committee. ii) Composition: As on March 31, 2017 the Stakeholders' Relationship Committee comprised of 1 Non- Executive Director, 1 Independent Director and 1 Executive Director. iii) Meetings: During the year ended March 31, 2017, 4 meetings of the Stakeholders' Relationship Committee were held on May 25, 2016, July 29, 2016, November 22, 2016 and January 28, 2017. The attendance of Members at the Meetings was as follows- Name Ms. Sunita Sharma Mr. Shailendra Roy 1.57 0.37 1.01 Member 6 6 Mr. Adil Zainulbhai Member 6 5 Mr. Thomas Mathew T. Member 6 6 Meetings held during the year are expressed as number of meetings eligible to attend. iv) Board Membership Criteria: While screening, selecting and recommending to the Board new members, the Committee ensures that the Board is objective, there is absence of conflict of interest, ensures availability of diverse perspectives, business experience, legal, financial & other expertise, integrity, managerial qualities, practical wisdom, ability to read & understand financial statements, commitment to ethical standards and values of the Company and ensure healthy debates & sound decisions. While evaluating the suitability of a Director for re-appointment, besides the above criteria, the NRC considers the past performance, attendance & participation in and contribution to the activities of the Board by the Director. The Independent Directors comply with the definition of Independent Directors as given 79 under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. While appointing / re-appointing any Independent Directors / Non-Executive Directors on the Board, the NRC considers the criteria as laid down in the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. These certificates have been placed on the website of the Company http://investors. larsentoubro.com/corporate governance.aspx. v) Remuneration Policy: The remuneration of the Board members is based on the Company's size & global presence, its economic & financial position, industrial trends, compensation paid by the peer companies, etc. Compensation reflects each Board member's responsibility and performance. The level of compensation to Executive Directors is designed to be competitive in the market for highly qualified executives. The Company pays remuneration to Executive Directors by way of salary, perquisites & retirement benefits (fixed components) & commission (variable component), based on recommendation of the NRC, approval of the Board and the shareholders. The commission payable is based on the performance of the business / function as well as qualitative factors. The commission is calculated with reference to net profits of the Company in the financial year subject to overall ceilings stipulated under Section 197 of the Companies Act, 2013. The Independent Directors / Non-Executive Directors are paid remuneration by way of commission & sitting fees. The Company was paying sitting fees of 50,000 per meeting of the Board and 25,000 per meeting of the Committee to the Independent Directors / Non-Executive Directors for attending the meetings of the Board & Committees. Since November 22, 2016, the sitting fees were revised to 75,000 for Board meetings and 40,000 for Audit Committee and Nomination and Remuneration Committee meetings during the year. The sitting fees for the other committees remain the same. The commission is paid subject to a limit not exceeding 1% p.a. of the profits of the Company as approved by shareholders (computed in accordance with section 197 of the Companies Act, 2013). The commission to Independent Directors / Non-Executive Directors is distributed broadly on the basis of their attendance, contribution at the Board, the Committee meetings, Chairmanship of Committees and participation in IC meetings. In the case of nominees of Financial Institutions, the commission is paid to the Financial Institutions. As required by the provisions of Regulation 46 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the criteria for payment to Independent Directors / Non-Executive Directors is made available on the investor page of our corporate website http://investors. larsentoubro.com/Listing-Compliance.aspx. Mr. A. M. Naik Performance Evaluation Criteria for IDs: The performance evaluation questionnaire covers specific criteria with respect to the Board & Committee composition, structure, culture, effectiveness of the Board and Committees, functioning of the Board and Committees, information availability, etc. It also contains specific criteria for evaluating the Chairman and individual Directors. Members are requested to refer to page 62 of this Annual Report. 6 Chairman LARSEN & TOUBRO The Whole-time Director & Chief Financial Officer and Head - Corporate Audit Services are permanent invitees to the Meetings of the Audit Committee. The Company Secretary is the Secretary to the Committee. iv) Internal Audit: The Company has an internal corporate audit team consisting of Chartered Accountants, Cost Accountants and Engineers. Over a period of time, the Corporate Audit department has acquired in-depth knowledge about the Company, its businesses, its systems & procedures, which knowledge is now institutionalized. The Company's Internal Audit function is ISO 9001:2008 certified. The Head of Corporate Audit Services is responsible to the Audit Committee. The staff of Corporate Audit department is rotated periodically. From time to time, the Company's systems of internal controls covering financial, operational, compliance, IT applications, etc. are reviewed by external experts. Presentations are made to the Audit Committee on the findings of such reviews. 2) Nomination & Remuneration Committee (NRC) i) Terms of reference: . . • Identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down by the Committee; Recommend to the Board appointment and removal of such persons; Formulate criteria for determining qualifications, positive attributes and independence of a director; Devise a policy on Board diversity; Formulation of criteria for evaluation of directors, Board and the Board Committees; Carry out evaluation of the Board and directors; Recommend to the Board a policy, relating to remuneration for the directors and key managerial personnel (KMP); Administration of Employee Stock Option Scheme (ESOS). ii) Composition: The Committee has been in place since 1999. As at March 31, 2017, the Committee comprised of 3 Independent Directors and the Group Executive Chairman. iii) Meetings: During the year ended March 31, 2017, 6 meetings of the Nomination & Remuneration Committee were held on April 12, 2016, May 19, 2016, May 28, 2016, July 29, 2016, November 22, 2016 and January 28, 2017. The attendance of Members at the Meetings was as follows: Name Status No. of No. of Meetings Meetings during Attended the year Mr. Subodh Bhargava 6 Name 80 LARSEN & TOUBRO 0.055 - Mr. A. M. Naik 3.36 19.27* 38.04** 18.24 Mr. Sanjeev Aga $ 0.040 0.013 Mr. S. N. Subrahmanyan 1.73 7.18 3.51 11.29 0.028 NIL NIL 0.150 0.205 0.191 0.244 0.104 0.132 Mr. R. Shankar Raman 1.41 3.15 2.38 7.41 Mr. Shailendra N. Roy 1.29 2.98 1.93 5.84 Mr. D. K. Sen Ms. Naina Lal Kidwai 80 Benefits NIL 700 crore Total crore Names vi) Details of remuneration paid / payable to Directors for the year ended March 31, 2017: (a) Executive Directors: The details of remuneration paid / payable to the Executive Directors is as follows: Salary Perquisites Retirement Commission Names Mr. Swapan Dasgupta%| Ms. Sunita Sharma Mr. Thomas Mathew T. Sitting Fees for Fees for Board Committee Meeting Meeting 0.010 - 0.050# 0.060 0.035 0.003 0.108# 0.146 0.055 0.017 0.310 0.382 Mr. Ajay Shankar 0.055 0.010 0.220 0.285 Mr. Subramanian Sarma NIL Status Sitting Commission 2 f) The Company has paid the Listing Fees for the year 2017-2018 to the above Stock Exchanges. Custodial Fees to Depositories: The Company has paid custodial fees for the year 2017-2018 to National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). g) Stock Code / Symbol: The Company's equity shares / GDRs are listed on the following Stock Exchanges and admitted for trading in London Stock Exchange: BSE Limited(BSE) National Stock Exchange of India Limited (NSE) ISIN Reuters RIC Luxembourg Exchange Stock Code London Exchange Stock Code Scrip Code 500510 Scrip Code LT : INE018A01030 : LART.BO : 005428157 : LTOD 85 86 Month The Company's shares constitute a part of BSE 30 Index of the BSE Limited as well as NIFTY Index of the National Stock Exchange of India Limited. h) Stock market data for the year 2016-2017: L&T BSE Price (*) BSE SENSEX High Low Month High Low Month Month L&T NSE Price (₹) NIFTY October 1520.00 1431.30 1475.25 8806.95 8506.15 8625.70 November 8224.50 1481.05 1295.10 1382.75 8598.45 7916.40 December 1402.50 1302.50 1349.10 8274.95 7893.80 8185.80 2017 2016 Close e) Listing Fees to Stock Exchanges: April GDRs are listed on Luxembourg Stock Exchange and traded on London Stock Exchange. d) Listing of equity shares / shares underlying GDRs on Stock Exchanges: July, 2017 * 4. Annual General Meeting 5. Payment of Dividend August 24, 2017 6. Second Quarter During first week of results November, 2017* 7. Third Quarter results During last week of January, 2018 * Management Discussion & Analysis Presentations made to Institutional Investors and Analysts This forms a part of the Annual Report which is mailed to the shareholders of the Company. * Tentative c) Book Closure: The schedule of analyst / institutional investor meets and presentations made to them on a quarterly basis are displayed on the website. UNCLAIMED SHARES The Company does not have any unclaimed shares lying with it from any public issue. However certain shares resulting out of the bonus shares issued by the Company are unclaimed by the shareholders. As required under Regulation 39(4) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Company has already sent reminders in the past to the shareholders to claim these shares. These share certificates are regularly released on requests received from the eligible shareholders after due verification. All corporate benefits on such shares viz. bonus shares, etc. shall be transferred in accordance with the provisions of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer, and Refund) Rules, 2016 (IEPF Rules) read with Section 124(6) of the Companies Act, 2013. The eligible shareholders are requested to note the same and take action for claiming the shares from the said account upon giving necessary documents. GENERAL SHAREHOLDERS' INFORMATION a) Annual General Meeting: The Annual General Meeting of the Company has been convened on Tuesday, August 22, 2017 at St. Andrews Auditorium, St. Dominic Road, Bandra (West), Mumbai - 400050 at 3.00 p.m. The dates of Book Closure are from Wednesday, August 16, 2017 to Tuesday, August 22, 2017 (both days inclusive) to determine the members entitled to the dividend for financial year 2016-2017. The shares of the Company are listed on BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE). First Quarter Results May January L&T-BSE (*) Stock Performance 2000 L&T BSE () BSE SENSEX 32000 1900 31000 1800 i) 30000 1700 1600 29000 1500 28000 1400 27000 1300 26000 1200 1100 25000 1000 24000 900 23000 800 SEBI / Stock 6000 Close 1288.00 1177.00 1253.55 26100.54 24523.20 25606.62 1495.00 1224.00 1474.30 26837.20 25057.93 26667.96 1000 6500 1470.25 1349.15 1446.25 8672.70 8223.70 8561.30 February 1511.00 1446.30 1469.20 8982.15 8685.80 8879.60 June 1515.00 1401.40 1496.20 27105.41 25911.33 26999.72 March 1593.65 1460.00 1574.90 9218.40 8891.95 9173.75 March July 1615.00 1499.00 1558.00 28240.20 27034.14 28051.86 August 1584.95 1420.00 1513.85 28532.25 27627.97 28452.17 September 1545.75 1412.55 1431.65 29077.28 27716.78 27865.96 October 1520.00 1432.20 1476.65 28477.65 27488.30 27930.21 November 1480.15 1295.30 1382.55 28029.80 25717.93 26652.81 December 1401.00 1302.00 1349.40 26803.76 25753.74 26626.46 2017 January 1469.70 1350.00 1444.75 27980.39 26447.06 27655.96 February 1510.00 1444.75 1470.25 29065.31 27590.10 28743.32 1593.00 1460.25 1577.60 29824.62 28716.21 29620.50 2000 Stock Performance L&T NSE (*) NSE NIFTY 9500 1900 9000 1800 8500 1700 L&T-NSE (*) 1600 8000 1500 7500 1400 NSE NIFTY 7000 1200 1100 3. 1300 Mailing of Annual Reports Meetings held during the year are expressed as number of meetings eligible to attend. G. LARSEN & TOUBRO OTHER INFORMATION a) Directors' Familiarisation Programme: All our directors are aware and are also updated as and when required, of their role, responsibilities & liabilities. The Company holds Board meetings at its registered office and also if necessary, in locations, where it operates. Site / factory visits are organized at various locations for the Directors. The internal newsletters of the Company, the press releases, etc. are circulated to all the Directors so that they are updated about the operations of the Company. This information is also available on the website of the Company http://investors.larsentoubro. com/Listing-Compliance.aspx. b) Information to directors: The Board of Directors has complete access to the information within the Company, which inter alia, includes items as mentioned on Pages 76 and 77 in this Annexure to the Directors' Report. Presentations are made regularly to the Board / NRC / Audit Committee (AC) (minutes of AC, NRC, SRC and CSR Committee are circulated to the Board), where Directors get an opportunity to interact with senior managers. Presentations, inter alia, cover business strategies, management structure, HR policy, management development and succession planning, quarterly and annual results, budgets, treasury policy, review of Internal Audit, risk management framework, operations of subsidiaries and associates, etc. Independent Directors have the freedom to interact with the Company's management. Interactions happen during Board / Committee meetings, when senior company personnel are asked to make presentations about performance of their Independent Company / Business Unit, to the Board. Such interactions also happen when these Directors meet senior management in IC meetings and informal gatherings. c) Risk Management Framework: Please refer to Page 60 of the Board Report. d) Vigil Mechanism / Whistle-Blower Policy : Please refer to Pages 62 and 63 of the Board Report. e) Statutory Auditors: Please refer to Page 63 of the Board Report. f) Code of Conduct: The Company has laid down a Code of Conduct for all Board members and senior management personnel. The Code of Conduct is available on the website of the Company www.larsentoubro. com. The declaration of Group Executive Chairman is given below: To the Shareholders of Larsen & Toubro Limited Sub: Compliance with Code of Conduct I hereby declare that all the Board Members and Senior Management Personnel have affirmed compliance with the Code of Conduct as adopted by the Board of Directors. Date: May 29, 2017 Place: Mumbai A. M. Naik Group Executive Chairman g) General Body Meetings: The last three Annual General Meetings of the Company were held at Birla Matushri Sabhagar, Mumbai as under: Financial Year 2015-2016 2014-2015 2013-2014 Date 27 Time 320 0 60 Third week of July, 2017 58 4 Exchange No. of No. of Meetings Meetings during Attended Shareholder the year Queries: Dividend 441 6988 6943 486 Related Mr. Vikram Singh Mehta Mr. R. Shankar Raman Mr. D. K. Sen Chairman Member Member 4 4 4 4 4 Transmission / 3 2055 1987 71 Transfer Demat Remat 347 August 26, 2016 4 September 9, 2015 4. The Company makes presentations to Institutional Investors & Equity Analysts on the Company's performance on a quarterly basis. The same is also available on our website http://investors.larsentoubro.com/ 5. 6. 7. Announcements.aspx. There were no instances of non-compliance, penalties, strictures imposed on the Company by the Stock Exchanges on any matter related to the capital markets, during the last three years. The policy for determining material subsidiaries and related party transactions is available on our website http://investors. larsentoubro.com/Listing-Compliance.aspx. Details of risk management including foreign exchange risk, commodity price risk and hedging activities form a part of the Management Discussion & Analysis. Please refer to pages 225 to 227 of this Annual Report. Means of communication: Financial Results Quarterly & Annual Results are published in prominent daily newspapers viz. The Financial Express, The Hindu Business Line & Loksatta. The results are also posted on the Company's website: www.larsentoubro.com. News Releases Official news releases are sent to stock exchanges as well as displayed on the Company's website: www.larsentoubro.com. Website The Company's corporate website www.larsentoubro.com provides comprehensive information about its portfolio of businesses. Section on "Investors" serves to inform and service the Shareholders allowing them to access information at their convenience. The quarterly shareholding pattern of the Company is available on the website of the Company as well as the stock exchanges. The entire Annual Report and Accounts of the Company and subsidiaries are available in downloadable formats. The entire Annual Report and Accounts of the Company will also be made available on the websites of the Stock Exchanges. ळ 2006/ Companies (Indian Accounting Standards) Rules, 2015 while preparing the Financial Statements. 84 C. LARSEN & TOUBRO Stock Exchanges Annual Report and Annual General Meeting Information to Stock Exchanges is now being also filed online on NEAPS for NSE and BSE Online for BSE. Annual Report is circulated to all the members and all others like auditors, equity analysts, etc. In order to enable a larger participation of shareholders for the Annual General Meeting, the Company provided Webinar facility of its 71st Annual General Meeting in co-ordination with NSDL. The Company suitably responded to the queries raised by the shareholders through the webinar. b) Financial calendar: 1. Annual Results of 2016-17 May 29, 2017 During the last week of 3.00 p.m. 2. August 22, 2017 B. j) Filing with During the year, there were no transactions of material nature with the Directors or the Management or relatives or the subsidiaries that had potential conflict with the interests of the Company. August 22, 2014 3.00 p.m. 3.00 p.m. Details of all related party transactions form a part of the accounts as required under IND AS 24 and the same is given in Note 51 forming part of the financial statements. The Company has followed all relevant Accounting Standards notified by the Companies (Accounting Standards) Rules, The following Special Resolutions were passed by the members during the past 3 Annual General Meetings: Annual General Meeting held on August 26, 2016: • To approve raising of capital through QIP's by issue of shares / convertible debentures / securities upto an amount of USD 600 million or 3600 crore. Annual General Meeting held on September 9, 2015: • To approve raising of capital through QIP's by issue of shares / convertible debentures 83 ထ / securities upto an amount of USD 600 million or 3600 crore. To approve raising of debentures upto 6000 crore. To approve raising of debentures upto 6000 crore. • Annual General Meeting held on August 22, 2014: i) The E-voting facility will also be made available to the Members. The Board of Directors of the Company, appointed Mr. S. N. Ananthasubramanian, Practicing Company Secretary, (M. No: FCS 4206) and failing him Ms. Aparna Gadgil, Practicing Company Secretary (M.No: ACS 8430), as Scrutinizer for conducting the Postal Ballot in a fair and transparent manner. The results of the Postal Ballot will be announced on July 5, 2017 at the Registered Office of the Company as per the Scrutinizer's Report. Disclosures: 2. During the year, no matters were transacted through postal ballot. 3. Approval of the Members has been sought vide Postal Ballot Notice dated May 29, 2017, under Section 110 of the Act to issue Bonus Shares in the ratio 1:2 (that is 1 (One) Bonus Equity Share of 2/- for every 2 (Two) fully paid-up Equity Shares of 2/- each held) by capitalisation of its Reserves. as per the directions of National Company Law Tribunal at Mumbai to approve the Scheme of Arrangement between the Company and L&T Valves Limited and their respective shareholders and creditors. A meeting of the equity shareholders of the Company was convened on March 14, 2017 No special resolutions were listed in the agenda for the meeting. h) Postal Ballot: 1. • L&T Modular Fabrication Yard •Larsen & Toubro Hydrocarbon International Limited LLC • L&T Overseas Projects Nigeria Limited Electromech Modular Fabrication • Larsen & Toubro • Larsen & Toubro ATCO Saudia •Larsen & Toubro Kuwait Construction • L&T-Gulf • Larsen Toubro Toubro Hydrocarbon Engineering Indonesia • PT Larsen & Arabia Offshore • L&T Sapura Shipping ⚫ L&T Hydrocarbon Caspian LLC • L&T Sapura Subsidiaries & Associates • Engineering Services • L&T-Chiyoda Verticals Consumer Rail, Automotive, Truck & Off Highway, Application • Embedded & Services Engineering •Mechanical (EPS, MDS, VAVE, MES, CAE) Horizontals Energy & Utilities) (CPG, Chemical, • Process Industry Semiconductors Electronics & • Telecom, • Medical Devices & Power) Electrical Drives Machinery, (Building Automation, Products ⚫ Industrial Vehicles) Commercial • Transportation (Aerospace & • Construction Offshore Petrochemicals • Oil & Gas Valves for Development Types: Metallurgical & Material Handling L&T Infotech L&T L&T Hydrocarbon Technology Engineering Services L&T Valves L&T Realty Systems •Kana Controls • Servowatch Company Limited Saudi Arabia and Automation • L&T Electrical & Automation FZE • L&T Electrical Corporation • Henikwon (Systems & Voltage Systems) (Medium • Land • Onshore Development Development • Chemicals & • Defence • Nuclear Power • Thermal Power Transit Oriented Development Retail • High Street Malls • Integrated Retail Commercial Buildings • Standalone Office Campuses • Built-to-suit Commercial • Luxury Housing • Elite Housing Residential Development Development Verticals: Integrated Mixed Use • Slum Rehabilitation Authority Projects • Joint Venture Platform Software, • Analytics, Al • IT Enabled •Application Development Maintenance • Enterprise Solutions Infrastructure Management Services • Testing and Cognitive Offerings (Horizontals) • Enterprise • Platform Based Solutions •Minerals & Metals • Middle East • Products Buildings & Factories Commercial Buildings & Airports • IT, Office Space • Airports •Health Integration and Mobility Services Services Logistics • L&T Thales • TAMCO Group Technology Services Subsidiary • LTTS LLC Verticals • Banking and Financial Services Insurance • Manufacturing Energy and Utilities Consumer Packaged Goods, Retail and Pharma • High-Tech, Media and Entertainment •Others -Defense - Travel and • Public Space Application Software, ISV, Verification & Validation, System Integration & Engineering) Residential Buildings & Factories Housing Large Water Systems • Water- International Smart World & Communication • Security Solutions • Communication Network & Telecom Infrastructure • Smart • Industrial & Infrastructure Solutions Engineering & • Digital Operations Management) Services, PLM, Manufacturing Management Asset & Automation, Manufacturing Services (Control 8 • Waste Water & Distribution • Water Supply • Factories Subsidiary •L&T Oman LLC Joint Ventures ⚫AL BALAGH- L&T JV (Al Rayyan) Power Transmission & Distribution Domestic • Substation • Utility Power Distribution • Transmission Lines • Solar International • Middle East • Africa • ASEAN Subsidiary • L&T Saudi Arabia LLC Water & Effluent Treatment • Residential Subsidiaries Countries being targeted include Saudi Arabia, UAE, • Control & 6) Electrical & Automation (E&A) - The Electrical & Automation business continued to record stable operational indicators in 2017-18. It remains a market leader in many segments within its wide range of low voltage switchgear. The range includes Air Circuit Breakers, Moulded Case Circuit Breakers, Switch Disconnector Fuses and other electric protection devices for application in industry, agriculture and segments such as buildings. Its expanding product spectrum covers building automation systems including smart meters and energy management systems, and a range of customised energy distribution solutions. Business opportunities for the current year are positive, and likely to stimulate growth. 5) Heavy Engineering - The Heavy Engineering business faced hurdles over the last few years due to shrinking global spends on hydrocarbon equipment compounded by the slow pace of revival of the nuclear power industry. Prospects for the current year are reasonably strong with some signs of a higher level of ordering for hydrocarbon equipment. The Nuclear Power Corporation of India Ltd. has also progressed in its plan to build ten new nuclear power plants using its 700 MW indigenous design. The commencement of awarding orders for equipment is encouraging news for the Heavy Engineering business. The Company has built up a good order book and possesses proven capabilities to harness upcoming prospects. Kuwait, Oman, Algeria and a few in East Asia. On the domestic front, prospects in offshore production, onshore refinery capex, fertiliser plants and pipeline projects are a cause for cheer. 4) Hydrocarbon - Oil prices are rebounding from their historic low points. This will brighten prospects for your Company's hydrocarbon business in the Middle East region which had seen contraction of spends over the last two years. We have adopted a policy of judicious bidding for projects with selected customers in the GCC region. Projects are selected based on a strong customer connect and the predictable prospects of streamlined execution. 3) Power Transmission & Distribution (PT&D) - We have built strong business foundations in the PT&D space in India and the Middle East. Inroads have also been made into parts of East Africa, Algeria and Egypt. This is in line with our objective of creating an international PT&D business covering dispersed geographies. On the domestic front, the thrust by the Government on strengthening power grids through Central and State utilities, as well as intensive electrification of rural households is expected to yield good business in the current year. We also continue to see good traction in international business prospects. 2) Thermal Power Generation - A slowdown in the thermal power generation sector across the last few years has led to aggressive bidding, as competitors vie for the limited opportunities on offer. Your Company looks forward to prospects aggregating 6 GW which are likely to be awarded in the current year, and these constitute targeted business. We have successfully constructed gas-fired power plants in Bangladesh and will continue to tap similar prospects likely to come up in the neighbouring country in the current year. We also continue to engage with our joint venture partners for increased international business in our efforts to increase manufacturing capacity utilisation. e) Water Infrastructure - The water sector has seen sub-optimal investment levels in the past. This could change for the better, thanks to the growing realization that ground water is being overexploited and that better irrigation facilities are essential to provide a sustainable livelihood for our farmers. Your Company's diverse range of offerings in the water sector will benefit from the Government's programmes to clean the country's major rivers as well as from bulk transmission and water treatment for municipalities, sewage & effluent treatment plants, lift irrigation and inland waterways infrastructure. 3 In line with its strategic plan to exit non-core businesses, your Company signed an agreement with Schneider Electric to divest this business, subject to regulatory approvals. We envisage that these approvals could be forthcoming in timelines in excess of a year. d) Urban Infrastructure - Your Company is a leader in providing building solutions across the urban spectrum - residential real estate, commercial buildings, affordable housing, hospitals, educational institutions, hotels and convention centres. While residential buildings have seen a lull over the last few years, other prospects in this vertical continue to hold promise. The new frontier in urban infrastructure is Smart Cities. A growing number of cities are adopting elements of smart city infrastructure such as intelligent traffic management and surveillance systems, smart electric grids & lighting, fibre optic cabling and transport & logistics systems. Your Company has the unique advantage of in-house domain expertise to provide end-to-end offerings to customers. This enables us to play the role of a Master System Integrator for the Smart Cities of the future. b) Railways - A thrust on railway electrification and track augmentation is paving the way for increased opportunities in your Company's railways business. We are geared to tap these prospects as they develop. a) Roads The Government has committed sizeable budgetary allocation to augmenting road infrastructure. We expect this momentum to continue, aided by increased investments in expressway programs. 1) Infrastructure While international business opportunities continue to remain reasonably healthy, 2018-19 is also expected to witness strong domestic growth, aided by supportive fiscal policies and the focused development agenda being adopted by the Government. Business prospects in different sectors provide a large canvas of opportunity which could be tapped in 2018-19. Segments which hold promise in the current year include: India is witnessing the increasing 'formalisation' of an economy which for decades had sections operating below the radar. Structural reforms such as Demonetisation, GST and the Insolvency & Bankruptcy Code have resulted in a larger pool of assessees and growth in the volume of tax collection. The increase in tax revenues should enable the Government to invest in essential infrastructure on a sustained basis. Outlook Total spends on CSR initiatives in 2017-18 by your Company amounted to 101 crore under eligible items, as defined in the Companies Act. This translates to 2% of the average annual net profits of the Company over the last three years. The sustainability of business pivots on the quality of the ecosystem within which it operates. It is therefore a moral imperative for responsible corporates to actively implement measures to improve business performance, reduce social disparities, and mitigate the environmental impact of industrial development. Our sustainability focus is on reduction of our carbon footprint and introduction of green technologies, while improving the lives of the communities around us through health, education, water & sanitation and skill-building initiatives. Sustainable Development c) Metro Rail - We have been participating in Metro Rail programs in multiple cities in India and in two projects in the Middle East. The investment flow continues to gather pace as more cities adopt mass rapid transit as an effective and eco-friendly solution to urban traffic congestion. Continued growth is expected in this business segment. 7) Realty - This sector has been impacted by Demonetisation, RERA and the increased financialization of savings where individuals shift their investments from 4 LARSEN & TOUBRO Graphs 42-43 Consolidated Financials - 10 Year Highlights 41 Standalone Financials - 10 Year Highlights 40 Annual Business Responsibility Report (ABRR) 2017-18 19-38 Corporate Social Responsibility 14-18 L&T Nationwide Network & Global Presence 12-13 Leadership Team 10 Organisation Structure 8-9 Company Information 7 Contents 5 A. M. Naik Group Chairman Thank You. I would like to conclude by thanking Team L&T as well as our customers, vendors and other stakeholders who have made it possible for your Company to maintain its trajectory of growth during a challenging phase of the Indian economy. I also wish to thank my fellow Board members for their invaluable support. Your Company formulated its 5-year strategic plan - LAKSHYA - spanning the years from 2016-17 to 2020-21 (both years inclusive), and has largely been on track in execution of this plan. The overarching goal is to enhance Return on Equity (ROE). Levers to achieve this include maintaining steady growth in revenues with improvement in margins, control on working capital, divestment of non-core businesses, endeavouring to turn around under-utilised facilities, minimising capital expenditure, avoiding investment in long gestation or asset heavy businesses and higher pay-outs to shareholders. Both 2016-17 and 2017-18 have shown that our efforts are yielding positive results. Your Company is confident of continuing its ROE enhancement journey during the current year as well. Strategic Plan 10) Development Projects - Your Company owns a portfolio of concession assets comprising roads, a transmission line, power generation, a container port and a metro rail. The metro rail project and some hydel plant projects are currently under construction. In the current year, we have divested five road concessions to an Investment Trust, and will continue to evaluate options for monetisation of value created in the remaining concession assets. 9) Financial Services – This business, which was listed in 2011, continues to perform well, and had a loan book of 83,654 crore at the end of 2017-18, representing a strong Year-on-Year growth of 26%. Its growth momentum continues in both lending and investment management where the average AUM has risen to 66,000 crore in 2017-18. Digital and data analytics have facilitated operations even as growth in focused businesses, asset quality, fee income and operational excellence measures are enabling the business to increase returns on capital. Equity capital was raised in end-2017-18, and your Company subscribed to the equity issue in order to maintain its equity stakes since it believes that growth capital infusion will be return accretive. The focus of the businesses is on increased digital offerings, with special emphasis on client mining, talent management, enhanced utilisation of resources and superior service offering. These listed subsidiaries are well equipped to address and overcome global challenges including increasing protectionist policies while maintaining healthy shareholder returns. 8) Information Technology and Technology Services (IT and TS) - After listing of L&T Infotech Ltd (LTI) and L&T Technology Services (LTTS) in mid-2016-17, the businesses have recorded above average growth while maintaining margins and returns on capital. Markets have responded positively, and have rewarded the IPO shareholders through capital appreciation. At the heart of the success of both these subsidiaries is the customer-focused lineage of Larsen & Toubro. While drawing extensively on the domain knowledge and operational expertise of their parent company, they have also leveraged its international client base which includes global majors. real estate or gold to financial assets. While the industry continues to be weighed down by excess inventory and low absorption rates, business is gradually improving and we expect 2018-19 to be better than the last two years in terms of order inflows and offtake. Your Company intends to continue with monetisation of its properties in Mumbai, Bangalore and Chennai, subject to Government approvals. While I have handed over the reins of day-to-day operational management to the CEO & MD, I am focusing on business portfolio rationalisation, mentoring the next generation of leaders and expanding the outreach of your Company's CSR initiatives. Route Map to the AGM Venue 44 Our Human Resources policies and practices centre around moulding our employees into leaders in their areas of work. Your Company's structured 7-step Leadership Development Programme plays a key role in helping build a robust leadership and succession pipeline. A comprehensive programme for monetary and non-monetary rewards incentivises excellence. and your Company expects to continue harvesting the wide-ranging benefits of digitalization in the years ahead. Inmil Across the last eight decades, L&T has kept pace with technological developments as well as the evolving needs of the nation. Your Company is, in every sense, leading the change. LARSEN & TOUBRO Dear Shareholders Chairman's Statement – Annual Report 2017-18 LARSEN & TOUBRO L&T shall foster a culture of caring, trust and continuous learning while meeting expectations of employees, stakeholders and society. and attaining global benchmarks. L&T-ites shall be an innovative, entrepreneurial and empowered team constantly creating value My greetings and good wishes to you on the 80th anniversary of the formation of L&T. committed to total customer satisfaction and enhancing shareholder value. K. TOUBRO VISION H. HOLLARSEN I I I !!!!! ୦୦୦୦ the Change Eight Decades of Leading (UBIQWeise™M ¡BEMS, Medical Imaging) L&T shall be a professionally-managed Indian multinational, The tiny partnership firm set up on May 1, 1938 is now a leading engineering & construction conglomerate, operating at the upper end of the technology spectrum. Across the last eight decades, we have kept pace with technological developments as well as the evolving needs of the nation. Your Company is, in every sense, leading the change. Economic Scenario In the last fiscal, the Indian economy has emerged after grappling boldly with multiple challenges. Structural reforms, by their very nature, are LARSEN & TOUBRO 2 better asset utilization, improved labour productivity and sourcing efficiencies though the use of IoT (Internet of Things) and other digital solutions. L&T Infotech and L&T Technology Services are our partners in this initiative, Leveraging technology across all operations is a prime focus area. While our digitalization journey will extend far into the future, some operational benefits are already visible Digital Future - In line with our aim of diversifying the spread of our international business beyond the Middle East, we are also actively pursuing opportunities in East and North Africa Region (including Algeria and Egypt) and other 'near shore' geographies of East Asia (Bangladesh, Myanmar, Thailand, Vietnam and Sri Lanka). The unexecuted Order Book from international markets stood at ₹ 62,500 crore, which translates to 24% of the total Order Book. Of the total international Order Book, non-GCC business now accounts for 31% of the Book size. The thrust on international business initiated almost two decades ago has contributed to your Company being recognized as a marquee player in the Middle East in the hydrocarbon and infrastructure sectors. This has ensured that despite fiscal contraction in oil producing countries, we continued to enjoy business traction throughout 2017-18. The recent spurt in oil prices could trigger an increased round of investments in the region, opening possibilities for resurgent growth. International Business It gives me great pleasure to inform you that the Board of Directors has recommended a Dividend of 16.00 per share. Corresponding dividend in the previous year was 14.00 per share. caused by implementation of GST as well as bottlenecks in some projects due to tardy customer payments, delayed clearances, and land acquisition / right of way issue, your Company clocked revenues of 119,862 crores. This translates to a growth of 9.5% on a like-to-like basis over the previous year after adjusting for Excise Duties which were subsumed in GST from 1st July 2017 onwards. Profit after Tax recorded an all-time high of 7,370 crore - representing a 22% increase over PAT of 2016-17. Your Company has turned in a commendable performance on key financial parameters in 2017-18. Even though awarding of infrastructure projects continued to be unpredictable in terms of timelines, we registered a 7% growth in fresh order inflows of ₹152,908 crores over inflows in the previous year. The unexecuted Order Book at the end of 2017-18 stands at * 263,107 crores which provides good revenue visibility in 2018-19. While execution was impacted in 2017-18 due to disruptions Performance Overview On the global front, the signals are mixed. Major governments are being lured into populist measures such as protectionism. Geo-political re-alignments are impacting traditional trade flows and commodity prices and currencies experience never-before volatility. Amid all this, we see encouraging signs of global growth revival. Positive markers at the national level include a wider tax base, increased allocation of share of revenues to states, strong Balance Sheets of some PSUs and larger quantum of funding from international development agencies such as JICA and World Bank. All of them have provided a robust financial platform for building infrastructure facilities in the country. With private sector participation in roads, airports, power, real estate and industrial capex remaining subdued, the needle of increased investment has largely shifted towards the public sector. The Government has also been focusing on development of infrastructure and energy facilities to drive strong, sustainable economic growth. Rural reform is receiving the attention it deserves. Larger allocations towards irrigation, measures to insulate farmers against the vagaries of the monsoon, rural road connectivity, and the proverbial last mile in rural electrification are heartening. momentum and several large investment programs have been initiated. We are also beginning to glimpse the green shoots of private sector capex revival in the industrial space. It is expected that the economic reforms initiated by the Government will expand the tax base, enhance revenues and in turn spur GDP growth and infrastructure allocations. On the other hand, some areas of public sector infrastructure capex have seen strong investment 1 In addition to the volatility sparked by reform-led change, industry encountered a host of other challenges, viz., muted private sector capex, reduced investment opportunities in Middle East markets and the increasing unpredictability of geo-political developments. initially disruptive because they unsettle the existing ways of doing business, and can often impact public perceptions negatively. However, their long-term benefits outweigh the early tremors. The GST regime and other reforms such as Insolvency & Bankruptcy Code, Demonetisation and RERA are the building blocks of a healthier, more wholesome economic environment. Talent Management and Succession Planning AGM Notice 45-52 Directors' Report 53-146 Management Discussion & Analysis 148-234 Machinery • Mining Machinery • Construction Construction & Mining Machinery S Rajavel T Madhavadas CEO & Managing Director S N Subrahmanyan Chairman & Board of Directors • Rubber M V Satish Mahesh Joshi Subramanian Sarma SC Bhargava Shrikant Joshi A K Garg 7 73rd Annual General Meeting at Birla Matushri Sabhagar, 19, Sir Vithaldas Thackersey Marg, Mumbai - 400 020. on Thursday, 23rd August, 2018 at 3.00 p.m. MR. HEMANT BHARGAVA Nominee of Life Insurance Corporation of India MR. ARVIND GUPTA Nominee of SUUTI MR. NARAYANAN KUMAR Independent Director Keshab Panda Sanjay Jalona Processing Machinery Subsidiary/JV • L&T Systems & Equipment • Electrical Projects Systems Protection • Metering & Products Standard • Electrical Products Electrical & Automation & Extruders • Internal Mixers Machinery Private Limited • L&T Kobelco Systems and Components Making Machinery • Hydraulic & Road • Construction Equipment Limited Construction MR. SANJEEV AGA Independent Director MRS. NAINA LAL KIDWAI Independent Director MR. SUBRAMANIAN SARMA Non-Executive Director MR. AJAY SHANKAR Independent Director MR. A. M. NAIK Group Chairman Board of Directors Company information LARSEN & TOUBRO Shareholder's Satisfaction Survey Form - 2018 479-480 Circular for PAN & Bank Details updation 477-478 SEBI Notification-Amendment to Regulation 40 of SEBI LODR Regulations 2015 475 Proxy Form 473-474 Information Regarding Subsidiary Companies 463-472 Notes Forming Part of the Consolidated Financial Statements 360-462 Consolidated Cash Flow Statement 358-359 Consolidated Statement of Changes in Equity 356-357 Consolidated Statement of Profit and Loss 354-355 Consolidated Balance Sheet 352-353 Auditors' Report on Consolidated Financial Statements 347-351 Notes Forming Part of the Financial Statements 249-345 Cash Flow Statement 247-248 Statement of Changes in Equity 246 Statement of Profit and Loss 244-245 Balance Sheet 242-243 Auditors' Report 235-241 MR. S. N. SUBRAHMANYAN Automation Chief Executive Officer and Managing Director MR. SHAILENDRA NARAIN ROY Whole-time Director & Sr. Executive Vice President (Power, Heavy Engg. & Nuclear) MR. THOMAS MATHEW T. Independent Director MRS. SUNITA SHARMA Nominee of Life Insurance Corporation of India MR. AKHILESH KRISHNA GUPTA Independent Director MR. ADIL SIRAJ ZAINULBHAI Independent Director Karvy Computershare Private Limited Registrar & Share Transfer Agents M/s. Deloitte Haskins & Sells LLP Auditors L&T House, Ballard Estate, Mumbai - 400 001 Registered Office Mr. N. Hariharan Company Secretary MR. VIKRAM SINGH MEHTA Independent Director MR. M. DAMODARAN Independent Director MR. SUBODH BHARGAVA Independent Director MR. M. M. CHITALE Independent Director MR. JAYANT DAMODAR PATIL Whole-Time Director & Sr. Executive Vice President (Defence Business) Whole-time Director & Sr. Executive Vice President (Buildings, Minerals and Metals) MR. M. V. SATISH Whole-time Director & Sr. Executive Vice President (Infrastructure) MR. D. K. SEN MR. R. SHANKAR RAMAN Whole-time Director & Chief Financial Officer Joint Venture 73rd ANNUAL REPORT 2017-2018 LARSEN & TOUBRO 1. Local Area or other 2. Specify the state and district where projects or program was undertaken Mr. N. Hariharan, Company Secretary has been designated as the Compliance Officer. The Company has appointed Mr. Arnob Mondal, Vice President (Corporate Accounts & Investor Relations), as Chief Investor Relations Officer. The Company also formulated Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information which is available on Company's Website http://investors.larsentoubro. com/Listing-Compliance.aspx. u) Stakeholder Engagement: The Company recognizes that its stakeholders form a vast and heterogeneous community. Our customers, shareholders, employees, suppliers, community, etc. have been guideposts of our decision making process. The Company engages with its identified stakeholders on an ongoing basis through business level engagements and structured stakeholder engagement programs. The Company maintains its focus on delivering value to all its stakeholders, especially the disadvantaged communities. The Company has a dedicated Corporate Brand Management & Communications department which facilitates an on-going dialogue between the Company and its stakeholders. The communication channels include: For external stakeholders - Stakeholder engagement sessions, client satisfaction surveys, shareholder satisfaction survey, dealer and stockists meet, analyst / investors meet, periodic feedback mechanism, general meeting for shareholders, factory visits for shareholders, online service and dedicated e-mail service for grievances, corporate website and access to business media to respond to queries, etc. For internal stakeholders - Employee satisfaction surveys, employee engagement surveys for improvement in employee engagement processes, circulars and messages from management, corporate social initiatives, welfare initiatives for employees and their families, online news bulletins for conveying topical developments, large bouquet of print and online in-house magazines, helpdesk facility, etc. Each of the businesses have their internal mechanisms to address the grievances of its 89 90 90 stakeholders. In addition, at the corporate level, there are committees which can be approached if the stakeholders are not satisfied with the functioning of such internal mechanisms. As part of the vigil mechanism, the Whistle Blower Policy provides access for various stakeholders to the Chairperson of the Audit Committee. The Whistle Blower Policy for Vendors & Channel Partners is displayed on the website of the Company http://investors.larsentoubro.com/ Corporate Governance.aspx. v) Awareness Sessions / Workshops on Governance practices: Employees across the Company as well as the group are being sensitized about the various policies and governance practices of the Company. The Company had designed in-house training workshops on Corporate Governance with the help of an external faculty covering basics of Corporate Governance as well as internal policies and compliances under Code of Conduct, Whistle Blower Policy, Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, SEBI Insider Trading Regulations, etc. The Company has created a batch of trainers across businesses who in turn conduct training / awareness sessions within their business regularly during the year. External experts were also invited to conduct a session on Compliance & Governance for senior management. w) ISO 9001:2015 Certification: The Company's Secretarial Department which provides secretarial services and investor services for the Company and its Subsidiary and Associate Companies was ISO 9001:2008 certified. During the year, it migrated to and got certified under the ISO 9001:2015 standard. x) Secretarial Audit as per SEBI requirements: As stipulated by SEBI, a Qualified Practicing Company Secretary carries out Reconciliation of Share Capital Audit to reconcile the total admitted capital with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and the total issued and listed capital. This audit is carried out every quarter and the report thereon is submitted to the Stock Exchanges. The Audit confirms that the total Listed and Paid-up capital Pursuant to the SEBI (Prohibition of Insider Trading) Regulations, 2015 ('SEBI Regulations'), the Company has suitably modified its Securities Dealing Code ('Code') for prevention of insider trading with effect from May 15, 2015. The objective of the Code is to prevent purchase and/or sale of shares of the Company by an Insider on the basis of unpublished price sensitive information. Under this Code, Designated Persons (Directors, Advisors, Officers and other concerned employees/persons) are prevented from dealing in the Company's shares during the closure of Trading Window. To deal in securities beyond specified limit, permission of Compliance Officer is also required. All the Designated Employees are also required to disclose related information periodically as defined in the Code. Directors and designated employees who buy and sell shares of the Company are prohibited from executing contra-trades during the next six months following the prior transactions. The Company has a policy for taking action against employees who violate the SEBI Regulations / Code. t) Securities Dealing Code: The Company has designated an exclusive e-mail id viz. IGRC@LARSENTOUBRO.COM to enable investors to register their complaints, if any. s) Investor Grievances: outlay expenditure (budget) on projects project or or programs programe (*In Lakh) wise (In Cumulative Amount spent: Direct Overhead Amount LARSEN & TOUBRO Shareholder correspondence may be directed to the Company's Registrar and Share Transfer Agent, whose address is given below: 1. Karvy Computershare Pvt. Ltd. Unit: Larsen & Toubro Limited Karvy Selenium Tower B, Plot 31 & 32, Gachibowli, Financial District, Nanakramguda, Hyderabad, Telengana - 500 032 2. is in agreement with the aggregate of the total number of shares in dematerialized form and in physical form. Tel: (040) 6716 2222 Fax: (040) 2342 0814 Email: einward.ris@karvy.com Website: www.karvycomputershare.com Karvy Computershare Pvt. Ltd. Unit: Larsen & Toubro Limited 24-B, Raja Bahadur Mansion, Ground Floor, Ambalal Doshi Marg, Behind BSE Limited, Fort, Mumbai - 400 023. Tel: (022) 6623 5454/5412/5427 Toll free number: 1-800-3454-001 The secretarial department of the Company at Mumbai is manned by competent and experienced professionals. The Company has a system to review and audit its secretarial and other statutory compliances by competent professionals, who are employees of the Company. Appropriate actions are taken to continuously improve the quality of compliance. The Company also has adequate software and systems to monitor compliance. 8. 9. Based on our examination of the relevant records and according to the information and explanations provided to us and the representations provided by the Management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in regulations 17 to 27 and clauses (b) to (i) of regulation 46(2) and para C and D of Schedule V of the Listing Regulations during the year ended March 31, 2018. We state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the Management has conducted the affairs of the Company. For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm's Registration No. 117366W/W-100018) Sanjiv V. Pilgaonkar Partner (Membership No.039826) Opinion Mumbai, May 28, 2018 Independent Auditor's Certificate in respect of the implementation of Employee Stock Option Schemes of the Company TO THE MEMBERS OF LARSEN & TOUBRO LIMITED INDEPENDENT AUDITOR'S CERTIFICATE IN RESPECT OF THE IMPLEMENTATION OF EMPLOYEE STOCK OPTION SCHEMES OF THE COMPANY 1. This certificate is issued in accordance with the terms of our engagement letter dated September 14, 2017. 2. We, Deloitte Haskins & Sells LLP, Chartered Accountants (Firm Registration Number 117366W/W-100018), the Statutory Auditors of Larsen & Toubro Limited ("L&T"/ "Company"), pursuant to the requirement of clause 13 of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 as amended by Circular No. CIR/CFD/POLICYCELL/2/2015 dated June 16, 2015, vide Notification no. SEBI/LADNRO/GN/2015-16/021 dated September 18, 2015 and vide Notification no. SEBI/LAD/NGO/GN/2016-17/037 dated March 6, 2017 (the "Regulations") are required to certify for the year ended March 31, 2018 that the Employee Stock Option Schemes, L&T Limited ESOP scheme -2000 and L&T Limited ESOP scheme -2006 (the "Schemes") have been implemented in accordance with the Regulations and in accordance with the special resolutions passed in the general meeting held on August 26, 1999, and August 25, 2006 (the "Resolutions"). Management's Responsibility 3. The Management is responsible for implementation of the Schemes in accordance with the Regulations and the Resolutions. This responsibility includes the design, implementation and maintenance of internal control relevant to the implementation of the Schemes in accordance with the Regulations and Resolutions. The Management is also responsible for ensuring compliance with the terms and conditions contained in the Regulations and for providing all relevant information to us in this regard 91 We have carried out an examination of the relevant records of the Company in accordance with the Guidance Note on Certification of Corporate Governance issued by the Institute of the Chartered Accountants of India (the "ICAI"), the Standards on Auditing specified under Section 143(10) of the Companies Act 2013, in so far as applicable for the purpose of this certificate and as per the Guidance Note on Reports or Certificates for Special Purposes issued by the ICAI which requires that we comply with the ethical requirements of the Code of Ethics issued by the ICAI. We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related Services Engagements. We have examined the books of account and other relevant records and documents maintained by the Company for the purposes of providing reasonable assurance on the compliance with Corporate Governance requirements by the Company. 7. y) Secretarial Audit as per Companies Act, 2013: Pursuant to the provisions of Section 204(1) of the Companies Act, 2013, M/s. S. N. Ananthasubramanian & Co., Company Secretaries, conducts the secretarial audit of the compliance of applicable statutory provisions and the adherence of good corporate practices by the Company. z) Statutory Compliance System: The Company complies with applicable laws, rules and regulations impacting Company's business. These comprise of Central Acts/ Rules and those of state governments where the Company generally carries on business. The applicable laws are reviewed by the Corporate Legal and Legal departments of each Independent Company (IC) on a periodic basis and updated whenever required. Each IC/ Business head certifies compliance of all applicable laws by the IC on a quarterly basis. Based on these confirmations, the Company Secretary gives a compliance certificate to the Board of Directors. The Company has a process of verifying the compliances through a random review of the process/system/documentation of the location of the IC / Corporate function / Group Company. Existing internal controls are also reviewed. The audit process includes planning the audit, discussion with auditee before audit commencement to explain the scope and purpose of the audit, verifying the compliances based on the supporting documentation, post audit meeting for explaining the observations, etc. LARSEN & TOUBRO Independent Auditor's Certificate on Corporate Governance TO THE MEMBERS OF LARSEN & TOUBRO LIMITED INDEPENDENT AUDITOR'S CERTIFICATE ON CORPORATE GOVERNANCE 1. This certificate is issued in accordance with the terms of our engagement letter reference no. 4335A dated September 14, 2017. 2. We, Deloitte Haskins & Sells LLP, Chartered Accountants, the Statutory Auditors of Larsen & Toubro Limited ("the Company"), have examined the compliance of conditions of Corporate Governance by the Company, for the year ended on March 31, 2018, as stipulated in regulations 17 to 27 and clauses (b) to (i) of regulation 46(2) and para C and D of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the "Listing Regulations") as amended. Managements' Responsibility 3. The compliance of conditions of Corporate Governance is the responsibility of the Management. This responsibility includes the design, implementation and maintenance of internal control and procedures to ensure the compliance with the conditions of the Corporate Governance stipulated in Listing Regulations. Auditor's Responsibility 4. Our responsibility is limited to examining the procedures and implementation thereof, adopted by the Company for ensuring compliance with the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. 5. 6. In expenditure direct or through Lakh) reporting agency Pradesh (Lucknow) Telangana (Hyderabad), Uttar (Coimbatore, Chennai), 3.04 Implementing agency 0.15 2.88 3.47 Maharashtra (Pune, Mumbai), New Delhi (Faridabad), Orissa (Sundargarh, Rayagada), Tamil Nadu (Chennai, Tirunelveli) Chandigarh, Chattisgarh (Raipur), Gujarat (Vadodara, Ahmedabad), Jharkhand (Jamshedpur), Kerala (Kochi), Madhya Pradesh (Indore), Maharashtra (Pune, Nagpur), New Delhi, Orissa (Bhubaneswar), Rajasthan (Jaipur), Tamil Nadu 10 Health 9 Karnataka (Bengaluru), health awareness 145.55 Implementing agency 7.30 138.25 150.72 Andhra Pradesh (Vizag), Gujarat (Surat, Ahmedabad, Vadodara), Blood donation camps Infrastructure support to medical centres Health Gujarat (Vadodara), Madhya Projects or Programes 190.48 Direct 9.55 180.93 192.67 Skill Building Andhra Pradesh (Vizag), Gujarat (Surat), New Delhi, Uttar Pradesh (Lucknow), Madhya Pradesh (Malwa), New Delhi, Rajasthan (Baran) Vocational and Computer training for youth 12 4,260.71 Direct 4,047.02 213.68 4,306.77 Skill Building Gujarat (Ahmedabad), Karnataka (Bengaluru), Maharashtra (Panvel, Nagpur), Orissa (Cuttack), Tamil Nadu (Kanchipuram, Pulicat), Telangana (Hyderabad, Jadcherla), Uttar Pradesh (Pilkhuwa), West Bengal (Kolkata) Construction Skill Training Institute - CSTI 11 Rajasthan (Baran), Tamil Nadu (Chennai), Uttar Pradesh (Tandwa) Pradesh (Khandwa), Maharashtra (Mumbai), Orissa (Sundargarh), 271.35 Direct 257.74 13.61 274.34 dental, vaccinations) and Auditor's Responsibility Health 8 Health Community Health Centres 6 personality development) safety, career guidance, Karnataka (Bengaluru), Tamil Nadu (Chennai) Education Awareness programmes (health and hygiene, road (offering diagnostic services 5 0.89 Implementing 0.04 0.85 2.20 Lakh) Lakh) period (* In upto to the implementing agency Gujarat (Surat), Maharashtra (Mumbai, Thane, Ahmednagar) 742.58 647.07 Raygada), Rajasthan (Jaipur), Tamil Nadu (Chennai), West Bengal (Kolkata) 40.26 Direct 2.02 38.25 41.67 Andhra Pradesh (Vizag), Gujarat (Vadodara, Surat), Jharkhand (Jamshedpur), Madhya Pradesh (Bhopal), Maharashtra (Nagpur), health awareness dental, vaccinations) and Health Health Camps (general, eye, 7 awareness, etc.) dialysis services, HIV/AIDS ophthalmic consultation, immunization, chest & TB, gynecological, pediatric, including family planning, 681.27 Direct 34.20 Health Camps (general, eye, 4. New Delhi, Orissa (Bhubaneswar, 6. Education 3 4 nutritional supplements Providing infrastructure support for education Providing educational aids to children-books, stationary, sports equipment, uniforms, school bags, shoes, woolen clothes, raincoats etc. Projects or Programes for education and providing 1. Local Area or other 2. Specify the state and district where projects or program was undertaken Amount Direct Overhead outlay expenditure (budget) on projects project or or programs programe (In Lakh) wise (In In Cumulative Amount spent: expenditure direct or through Lakh) upto to the implementing reporting agency LARSEN & TOUBRO / balwadis /anganwadis run for developing pre-school foundation, promoting healthy and hygienic environment programmes- Study Centres Community based Reasons for not spending the amount during the financial year. ΝΑ CSR Committee Responsibility Statement: The CSR Committee hereby affirms that: The Company has duly formulated a CSR Policy Framework which includes formulation of a CSR Theme, CSR budget and roles and responsibilities of the Committee as well as the various internal committees formed for implementation of the CSR policy; The Company has constituted a mechanism to monitor and report on the progress of the CSR programs; The activities undertaken by the Company as well as the implementation and monitoring mechanisms are in compliance with its CSR objectives and CSR policy. S. N. Subrahmanyan CEO & Managing Director DIN: 02255382 Vikram Singh Mehta Chairman CSR Committee DIN: 00041197 96 S. No. CSR Project or activity identified Sector in 1 School support programme- Enhancing the quality of education and learning levels in government schools / schools running for children from underprivileged backgrounds which the project is covered Education 2 period (* In As per table enclosed Lakh) 524.93 Bengal (Kolkata, Nadia, North 24 Parganas, Uttar Dinajpur) Education Gujarat (Ahmedabad, Vadodara), 41.01 33.59 1.77 35.36 Direct (Sonbhadra, Allagabad), West Karnataka (Bengaluru), Kerala (Mumbai, Pune), New Delhi, Orissa (Rayagada, Rourkela, 97 S. No. CSR Project or activity identified Sector in 98 which the project is covered 5. (Kannur, Kochi), Maharashtra Adilabad), Uttar Pradesh Telangana (Medak, Khammam, Gujarat (Ahmedabad, Surat, Vadodara, Mahesana, Navsari, Morbi, Narmada), Jharkhand (Jamshedpur, Bokaro, Deoghar), Karnataka (Bengaluru, Mysuru, Tumkur, Gadag, Bagalkot), Madhya Pradesh (Alirajpur, Bhopal, Chhatarpur, Khargone, Narsinghpur), Maharashtra (Ahmednagar, Pune, Nagpur, Nasik, Thane, Raigad, Mumbai), Meghalaya (Shilong), New Delhi, Orissa (Rourkela, Bhubaneswar, Cuttack, Jajpur, Balasore, Ganjam, Sundergarh, Bhadrak, Khurda, Kalahandi, Rayagada), Punjab (Moga), Rajasthan (Baran, Pali, Churu, Tonk, Karauli), Tamil Nadu (Chennai, Vellore, Erode, Ariyalur, Coimbatore, Dharmapuri, Pudukkottai, Kanchipuram), 27.72 552.64 Implementing agency Andhra Pradesh (Vizag), Chandigarh, Chhattisgarh (Raigarh), Gujarat (Ahmedabad, Surat, Vadodara), Jharkhand (Ranchi), Karnataka (Mysuru), Madhya Pradesh (Khandwa), Maharashtra (Mumbai, Pune, Raigad), New Delhi (Faridabad), Orissa (Rayagada, Rajpur), Rajasthan (Rawatbhata), Tamil Nadu (Chennai, Kanchipuram, Coimbatore), Telangana (Hyderabad), Uttar Pradesh 559.56 (Tanda), West Bengal (Kolkata) Andhra Pradesh (Vizag), 242.58 206.92 10.93 Karnataka (Bengaluru), 217.84 Implementing agency Maharashtra (Mumbai), Orissa (Rayagada), Tamil Nadu (Chennai, Coimbatore) Education Andhra Pradesh (Vizag, 1,171.77 1,024.46 1,078.55 Direct West Godavari), Chandigarh, Chhattisgarh (Raipur), Lakh) the financial year is detailed below: 54.09 C. Dear Sirs, Sub: CEO / CFO Certificate {Issued in accordance with provisions of Regulation 17(8) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015} We have reviewed the consolidated financial statements, read with the consolidated cash flow statement of Larsen & Toubro Limited for the year ended March 31, 2018 and that to the best of our knowledge and belief, we state that; (a) (i) These statements do not contain any materially untrue statement or omit any material fact or contain statements that may be misleading; (ii) These statements present a true and fair view of the Company's affairs and are in compliance with current accounting standards, applicable laws and regulations. (b) There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year which are fraudulent, illegal or in violation of the Company's code of conduct. (c) We accept responsibility for establishing and maintaining internal controls for financial reporting. We have evaluated the effectiveness of internal control systems of the Company pertaining to financial reporting and have disclosed to the Auditors and the Audit Committee, deficiencies, if any, in the design or operation of such internal controls of which we are aware and steps taken or propose to be taken for rectifying these deficiencies. To the Board of Directors of Larsen & Toubro Limited (d) We have indicated to the Auditors and the Audit Committee: (ii) that there were no instances of significant fraud of which we have become aware. Place: Mumbai Date: May 28, 2018 94 Yours sincerely, R. Shankar Raman Chief Financial Officer S. N. Subrahmanyan CEO & Managing Director LARSEN & TOUBRO (i) that there were no significant changes in internal controls over financial reporting during the year; and (ii) that there were no significant changes in accounting policies made during the year; and 93 (Membership No. 39826) Sanjiv V. Pilgaonkar Partner It is our responsibility to provide a certificate on compliance with the Regulations and Resolutions by the Company while implementing the Schemes during the year ended March 31, 2018, based on our examination of the books of account and other records of the Company for the year ended on that date, which have been subjected to our audit vide our report dated May 28, 2018. Manner in which the amount was spent in We conducted our examination and obtained the explanations in accordance with the Guidance Note on Reports or Certificates for Special Purposes issued by the Institute of Chartered Accountants of India ("ICAI") and the Standards on Auditing specified under Section 143(10) of the Companies Act, 2013 which include the concepts of test checks and materiality. This Guidance Note requires that we comply with the ethical requirements of the Code of Ethics issued by the ICAI. We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality Control for Firms that Perform Audits and Review Historical Financial Information, and Other Assurance and Related Services Engagements. Criteria and Scope 7. The criteria against which the information is evaluated are the following: a) the Regulations; b) the Schemes; Special resolution passed by the Shareholders for the Schemes; and d) Written representation from the Management. 2 92 LARSEN & TOUBRO Opinion Restriction on Use 9. This certificate is addressed to and provided to the Members of the Company solely for the purpose of compliance with Clause 13 of the Regulations. This certificate should not be circulated, copied, used/referred to for any other purpose, without our prior written consent. Accordingly, we do not accept or assume any liability or any duty of care of for any other purpose or to any other party to whom it is shown or into whose hands it may come without our prior consent in writing. Mumbai, May 28, 2018 For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm's Registration No. Number 117366W/W-100018) Annexure 'C' to the Board Report CSR ACTIVITIES FOR 2017-18 8. Based on our examination, as stated above, and according to the information, explanations and representations provided to us by the Management of the Company, in our opinion, the schemes implemented by the Company are in accordance with the Regulations and the Resolutions. A brief outline of the Company's CSR policy, including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs. Mr. R. Shankar Raman Member 3. Mr D.K. Sen Member and Mr. N. Hariharan as the Secretary of the Committee. Average net profit of the Company for the last three financial years. The average net profit of the Company for the last three financial years is 5,023.91 Cr. Prescribed CSR expenditure (two percent of the amount as in item 3 above). The Company is required to spend an amount of *97.29 Cr. as CSR expenditure during the financial year 2017-18. Skill Development - includes but not limited to vocational training such as skill building, computer training, women empowerment, support to ITI's, support to specially abled b. The Company was required to spend ₹ 97.29 Cr during the financial year 2017-18. As against this mandate, the Company spent 100.92 Cr towards various activities for the benefit of the community. This exceeds the required spend by 3.63 Cr. The CSR spend for FY 2017-18 is 2.07% of net profit. Amount unspent, if any Nil 95 1. 7. 6. 2. Chairman, Details of CSR spent during the financial year: a. Total amount to be spent for the financial year 1. The Company's CSR Policy framework details the mechanisms for undertaking various programmes in accordance with Section 135 of the Companies Act, 2013 (the Act) for the benefit of the community. Mr. Vikramsingh Mehta The CSR projects of the Company are focused on communities that are disadvantaged, vulnerable and marginalized. We strive to contribute positively to improve their standard of living; through our interventions in water & sanitation, heath, education and skill development. The Company will primarily focus on 'Building India's Social Infrastructure' as part of its CSR programme which will include, amongst others, the following viz. areas, • - Education includes but not limited to education infrastructure support to educational Institutions, educational programs & nurturing talent at various levels. - Health includes but not limited to community health centres, mobile medical vans, dialysis centres, general and specialized health camps and outreach programs, support to HIV / AIDS, Tuberculosis control programs. Water & Sanitation - includes but not limited to watershed development -making clean drinking water available, promoting rain water harvesting, soil and moisture conservation, enhancing ground water levels by facilitating community management of water resources for improving conditions related to sanitation, health, education and livelihoods of communities through an integrated approach. 3. 4. The CSR Committee of the Board comprises of 5. (infrastructure support & vocational training), Construction Skills Training Centres and providing employability skills to women and youth. Governance, Technology and Innovation would be the Key enabling factors across all these verticals. The detailed CSR Policy Framework is given in the Governance section on the website of the Company. Please see the link http://investors.larsentoubro.com/ Listing-Compliance.aspx 2. Composition of the CSR Committee. SUBSIDIARY 64.01 Section 2(87)(ii) 33 L&T HOWDEN PRIVATE L&T HOUSE, BALLARD ESTATE, LIMITED N M MARG, MUMBAI, MAHARASHTRA - 400001 34 L&T HYDROCARBON ENGINEERING LIMITED U45200MH1994PLC259630 L&T IDPL TRUSTEE 35 36 BRINDAVAN, PLOT NO. 177, C.S.T. ROAD, KALINA, SANTACRUZ (EAST), MUMBAI - 400 098, MAHARASHTRA, INDIA. RAMA COTTAGE, KANLOG, SHIMLA-171001 L&T HOUSING TOLLWAY LIMITED 32 LIMITED 100.00 Section 2(87)(ii) SUBSIDIARY U40102HP2010PLC031697 HYDROPOWER L&T HIMACHAL 31 CHENNAI-600089 L&T INFORMATION TECHNOLOGY MANAPAKKAM, ROAD, POST BOX NO. 979, FINANCE LIMITED 37 770556-5 SERVICES (SHANGHAI) CO., LTD. Associate % of Shares Applicable Section held 47.75 Section 2(87)(i) Subsidiary/ Company Holding/ CIN/GLN Address of the Company Sl. No Name of the 108 107 82.96 Section 2(87)(ii) SUBSIDIARY 82.96 Section 2(87)(ii) MANAGER PTE. LTD. SUBSIDIARY 97.45 Section 2(87)(ii) SUBSIDIARY 201326418G 100.00 Section 2(87)(ii) SUBSIDIARY U11200MH2009PLC191426 50.10 Section 2(87)(ii) SUBSIDIARY U31401MH2010PTC204403 2810, MATHESON BLVD EAST SUITE 500, MISSISSAUGA, ONL4W 4X7 CANADA 8 CROSS STREET, #10-00, PWC BUILDING, SINGAPORE (048424) ROOM 1100, BUILDING 2, NO.1388, XINGXIAN ROAD, JIADING DISTRICT, SHANGHAI N M MARG, MUMBAI, MAHARASHTRA - 400001 L&T HOUSE, BALLARD ESTATE, L&T INFOTECH FINANCIAL SERVICES TECHNOLOGIES INC 310000400714060 (JIADING) SUBSIDIARY DEVIHALLI HASSAN MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, TOLLWAY LIMITED 97.45 Section 2(87)(ii) SUBSIDIARY U45203TN2010PLC075491 MOUNT POONAMALLE 24 CHENNAI-600089 MANAPAKKAM, ROAD, POST BOX NO. 979, TOLLWAYS LIMITED 97.45 Section 2(87)(ii) SUBSIDIARY U45203TN2011PLC083661 MOUNT POONAMALLE L&T DECCAN 23 82.96 Section 2(87)(ii) SUBSIDIARY 100.00 Section 2(87)(ii) % of Shares Applicable Section held LARSEN & TOUBRO 10045506 L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 BEACON HOUSE, 15 CHRISTCHURCH ROAD, BOURNEMOUTH, DORSET, ENGLAND, UK - BH13LB SYNCORDIS LIMITED 22 L&T CONSTRUCTION EQUIPMENT LIMITED 38 21 25 L&T ELECTRICAL & AUTOMATION FZE 26 L&T ELECTRICAL AND AUTOMATION SAUDI ARABIA COMPANY LIMITED LLC L&T HALOL-SHAMLAJI 30 KOLKATA -700091 SECTOR-V, SALT LAKE, WING, PLOT NO. 4, BLOCK-BP, 64.01 Section 2(87)(ii) SUBSIDIARY U65910WB1993FLC060810 L&T FINANCE LIMITED TECHNOPOLICE, 7TH FLOOR, A 29 64.01 Section 2(87)(ii) SUBSIDIARY L67120MH2008PLC181833 BRINDAVAN, PLOT NO. 177, C.S.T. ROAD, KALINA, SANTACRUZ (EAST), MUMBAI - 400 098, MAHARASHTRA, INDIA. U45203TN2008PLC069210 HOLDINGS LIMITED 28 100.00 Section 2(87)(ii) SUBSIDIARY U31501MH2007PLC176667 L&T ELECTRICALS AND AUTOMATION LIMITED 27 100.00 Section 2(87)(ii) SUBSIDIARY 100.00 Section 2(87)(ii) SUBSIDIARY 2050051589 107673 WAREHOUSE NO. FZS2AB05 262158, JEBEL ALI FREE ZONE, DUBAI, UNITED ARAB EMIRATES MH-4, PLOT NO. 17+19, IIND INDUSTRIAL CITY, DAMMAM, P.O. BOX 77186, AL KHOBAR 31952, KINGDOM OF SAUDI ARABIA L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 CHENNAI-600089 L&T FINANCE L&T INFRA DEBT L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI L67100MH2013PLC241104 TOLLWAY LIMITED L&T KRISHNAGIRI WALAJAHPET 49 - 600089 97.45 Section 2(87)(ii) SUBSIDIARY U45203TN2005PLC057930 51.00 Section 2(87)(ii) SUBSIDIARY U29253MH2010PTC210325 TOLL ROAD LIMITED KRISHNAGIRI THOPUR 48 MACHINERY PRIVATE LIMITED L&T KOBELCO 47 (EAST), MUMBAI - 400 098, MAHARASHTRA, INDIA. LIMITED C.S.T. ROAD, KALINA, SANTACRUZ MANAGEMENT 64.01 Section 2(87)(ii) SUBSIDIARY U65991MH1996PLC229572 BRINDAVAN, PLOT NO. 177, L&T INVESTMENT 46 CHENNAI 600089 MANAPAKKAM, LIMITED MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI 600089 ROAD, POST BOX NO. 979, U45203TN2010PLC075446 97.45 Section 2(87)(ii) Company S. No. CSR Project or activity identified Sector in 100.00 Section 2(87)(ii) SUBSIDIARY 601723 64.01 Section 2(87)(ii) SUBSIDIARY U65993MH1996PLC211198 70.00 Section 2(87)(ii) SUBSIDIARY 1001910 252E, MURI OKUNOLA STREET, VICTORIA ISLAND, LAGOS, NIGERIA L&T HOUSE BALLARD ESTATE, P.O. BOX 278, MUMBAI 400001 PO BOX 236, P.C 322, FALAZ AL QABAIL, SOHAR, SULTANATE OF OMAN HYDERABAD METRO RAIL ADMINISTRATIVE BUILDING, UPPAL MAIN ROAD, NAGOLE, HYDERABAD, TELANGANA 500039. L&T OVERSEAS PROJECTS NIGERIA LIMITED 53 L&T MUTUAL FUND TRUSTEE LIMITED 52 LLC L&T MODULAR 51 FABRICATION YARD (HYDERABAD) LIMITED 100.00 Section 2(87)(ii) SUBSIDIARY U45300TG2010PLC070121 L&T METRO RAIL 50 SUBSIDIARY ROAD CORRIDOR 97.45 Section 2(87)(ii) SUBSIDIARY SUBSIDIARY B217963 105, ROUTE D'ARLON, L-8009, STRASSEN, LUXEMBOURG SYNCORDIS PSF S.A. 41 64.01 Section 2(87)(ii) SUBSIDIARY U65900MH2011PTC220896 PLOT NO. 177, VIDYANAGARI MARG, C.S.T. ROAD, KALINA,SANTACRUZ (EAST), MUMBAI 400098 PRIVATE LIMITED PARTNERS TRUSTEE INVESTMENT L&T INFRA 40 (EAST), MUMBAI - 400098 6971, VIDYANAGARI MARG, C.S.T. ROAD, KALINA, SANTACRUZ PARTNERS ADVISORY PRIVATE LIMITED INVESTMENT 64.01 Section 2(87)(ii) SUBSIDIARY U67190MH2011PTC218046 PLOT NO. 177, CTS 6970, L&T INFRA 39 6971, VIDYANAGARI MARG, C.S.T. ROAD, KALINA,SANTACRUZ (EAST), MUMBAI - 400098 FUND LIMITED 64.01 Section 2(87)(ii) SUBSIDIARY 82.96 Section 2(87)(ii) 42 L&T INFRASTRUCTURE MOUNT POONAMALLE U45203TN2006PLC058735 MOUNT POONAMALLE L&T INTERSTATE 45 MAHARASHTRA, INDIA. (EAST), MUMBAI - 400 098, C.S.T. ROAD, KALINA, SANTACRUZ FINANCE COMPANY LIMITED 64.01 Section 2(87)(ii) SUBSIDIARY U67190TN2006PLC059527 BRINDAVAN, PLOT NO. 177, L&T INFRASTRUCTURE 44 PLOT NO. 177, CTS 6970, MANAPAKKAM, CHENNAI-600089 100.00 Section 2(87)(ii) SUBSIDIARY U74140TN1998PLC039864 MOUNT POONAMALLE L&T INFRASTRUCTURE ENGINEERING LIMITED 43 CHENNAI 600089 MANAPAKKAM, PROJECTS LIMITED ROAD, POST BOX NO. 979, DEVELOPMENT 97.45 Section 2(87)(ii) SUBSIDIARY U65993TN2001PLC046691 ROAD, POST BOX NO. 979, CIN/GLN LARSEN & TOUBRO Sl. No Name of the D. K. Sen Whole-time Director & Senior 8.061 101.34 3.81 Executive Vice President (Infrastructure) M. V. Satish Whole-time Director & Senior 7.381 92.79 (0.22) Executive Vice President (Buildings, Minerals & Metals) J. D. Patil (Power, Heavy Engineering & Nuclear) Executive Vice President 0.29 12.075 Group Executive Chairman 137.245@ 1725.32 73.92 CEO & Managing Director 31.803 399.80 Whole-time Director & Senior 34.13 Whole-time Director & Chief 17.223 216.51 19.97 Financial Officer Shailendra Roy Whole-time Director & Senior R. Shankar Raman S. N. Subrahmanyan 3.950 * 3.77 (25.96) Vikram Singh Mehta Independent Director 0.277 3.48 (27.49) Sushobhan Sarker ^ Nominee of Life Insurance 0.340 4.27 17.23 Corporate of India Adil Zainulbhai Independent Director 0.300 Independent Director M. Damodaran (10.95) Executive Vice President (Defence) A. M. Naik Group Chairman 2.538 31.91 ** 49.66 M. M. Chitale 0.407 5.12 (11.62) Subodh Bhargava Independent Director 0.500 6.29 Independent Director 0.316 A. M. Naik increase in 19 Tree plantation and environment protection Pune, Ahmednagar), New Delhi Environment Andhra Pradesh (Vizag), Gujarat (Surat, Vadodara, Ahmedabad), 75.44 65.93 3.48 69.41 Direct Jharkhand (Jamshedpur), Karnataka (Bengaluru, Tumkur, Gadag, Raichur), Madhya Pradesh (Bhopal), Maharashtra (Nagpur, Nasik, Pune), Orissa (Balasore, Berhampur, Kalahandi), Rajasthan (Churu), Tamil Nadu 199.18 Direct 9.99 189.19 240.25 52.53 Direct (Rudraprayag), West Bengal (Dakshin Dinajpur) 17 **Integrated Community Development Programme Water & Maharashtra (Ahmednagar), (Chennai, Coimbatore), Telangana 2,106.01 Sanitation, Health, Rajasthan (Rajsamand, Udaipur), Tamil Nadu (Coimbatore, Vellore) 1,722.93 Implementing agency Education, 18 Development of gardens and maintenance of public spaces Skill Building Environment Maharashtra (Mumbai, Nasik, 1,636.52 86.41 Remuneration (Adilabad), West Bengal (North 24 Parganas) Awareness programmes Total 10,846.22 During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above. 9,586.31 506.03 10,092.34 99 Annexure 'D' to the Board Report A) Ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year 2017-18, the percentage increase in remuneration of each Director & Company Secretary during the financial year 2017-18 and comparison of the remuneration of each of the Key Managerial Personnel against the performance of the company: 100 crore Name of the Director/ KMP Designation 2017-18 Total Remuneration Ratio of remuneration of director to the median remuneration $ Percentage (Chennai, Coimbatore), West Bengal (Kolkata) (Sundargarh, Jajpur), Tamil Nadu (Mumbai), New Delhi, Orissa (Jamshedpur), Maharashtra - environment, energy Environment Andhra Pradesh (Vizag), 12.61 10.23 0.54 conservation, road safety Chandigarh, Maharashtra (Nagpur), Telangana (Hyderabad), New Delhi 20 10.77 Implementing agency Employee Volunteering Employee volunteers Andhra Pradesh (Vizag), Gujarat (Surat, Vadodara), Jharkhand 304.36 285.85 15.10 300.95 Direct 21 2.48 3.96 Akhilesh Gupta 5. The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company. 6. We have not verified the correctness and appropriateness of financial records and books of accounts of the Company For S. N. ANANTHASUBRAMANIAN & CO. Company Secretaries Firm Registration No P1991MH040400 S. N. ANANTHASUBRAMANIAN PARTNER FCS No.: 4206 COP No.: 1774 Date: May 12, 2018 Place: Thane 102 LARSEN & TOUBRO Form No. MR-3 SECRETARIAL AUDIT REPORT Disclaimer Wherever required, we have obtained the management's representation about the compliance of laws, rules and regulations and happening of events etc. We believe that audit evidence and information obtained from the Company's management is adequate and appropriate for us to provide a basis for our opinion. 4. Annexure 'E' to the Board Report To, The Members, Larsen & Toubro Limited CIN L99999MH1946PLC004768 L&T House, Ballard Estate, FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2018 Mumbai 400 001 Management's Responsibility 1. It is the responsibility of the management of the Company to maintain secretarial records, devise proper systems to ensure compliance with the provisions of all applicable laws and regulations and to ensure that the systems are adequate and operate effectively. Auditor's Responsibility 2. Our responsibility is to express an opinion on these secretarial records, standards and procedures followed by the Company with respect to secretarial compliances. 3. Our Secretarial Audit Report for the Financial Year ended 31st March, 2018, of even date is to be read along with this letter. 101 [Pursuant to section 204(1) of the Companies Act, 2013 and rule No.9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014] The Members, d. The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014; e. f. g. The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client - Not Applicable as the Company is not registered as Registrar to Issue and Share Transfer Agent; The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 Not applicable as the Company has not delisted/proposed to delist its equity shares from any Stock Exchange during the financial year under review; h. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 - Not applicable as the Company has not bought back/proposed to buy-back any of its securities during the financial year under review. vi. The Company has informed that there are no laws, which are specifically applicable to the Company. We have also examined compliance with the applicable provisions of the following: (i) Secretarial Standards with regard to Meetings of Board of Directors (SS-1) and General Meetings (SS-2) 103 Address of the Company issued by The Institute of Company Secretaries of India; (ii) SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015 and Listing Agreements entered into by the Company with the National Stock Exchange of India Limited and BSE Limited. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009; C. b. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015; The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; Larsen & Toubro Limited CIN: L99999MH1946PLC004768 L&T House, Ballard Estate, Mumbai-400 001 We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Larsen & Toubro Limited (hereinafter called 'the Company'). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon. Based on our verification of the Company's books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on 31st March 2018, complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance- mechanism in place to the extent, in the manner and subject to the reporting made hereinafter: To, We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31st March 2018 according to the provisions of: ii. The Securities Contracts (Regulation) Act, 1956 ('SCRA') and the rules made thereunder; iii. The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder; iv. Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings; V. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 ('SEBI Act'):- a. i. The Companies Act, 2013 (the Act) and the rules made thereunder; (21.91) It is hereby affirmed that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees. Average percentage increase made in the salaries of employees other than the managerial personnel for the year 2017-18 was 11.79% whereas there is decline in the managerial remuneration by 0.20% because a substantial portion of managerial remuneration is linked to Company performance during the financial year 2017-18. The Profit after Tax for the year 2017-18 decreased by 1.22% directly impacting the variable component of managerial remuneration. Designation Total Remuneration Ratio of remuneration of director to the median remuneration $ Percentage increase in Remuneration Ajay Shankar Independent Director 0.335 4.21 17.46 Subramanian Sarma Non-Executive Director NIL KMP 2017-18 Name of the Director/ crore Independent Director 0.195 2.45 (4.88) Sunita Sharma^ Nominee of Life Insurance 0.061 NIL 0.75 Corporate of India Thomas Mathew T. Independent Director 0.343 4.31 (10.22) LARSEN & TOUBRO (58.62) E) Affirmation that the remuneration is as per the remuneration policy of the company: NIL Independent Director 14.84 5.87 $ Ratio of remuneration of director to the median remuneration is calculated on pro-rata basis for those directors who served for only part of the financial year 2017-18. Λ Part of the remuneration has been paid to the financial institution he/she represents. * Details not given as Mr. J. D. Patil was a director only from 1st July 2017. ** Details not given as Mr. A. M. Naik was Group Chairman only from 1st October 2017. *** Details not given as Mr. Arvind Gupta was a director only from 1st July 2017. @ Includes perquisite value of 47.982 crore, in respect of stock options granted over the past several years by Larsen & Toubro Infotech Limited and L&T Technology Services Limited and exercised during the year, Retirement benefits of 19.381 crore relating to encashment of accumulated past service leave, gratuity of ₹55.038 crore and pension of 1.50 crore. B) Percentage increase in the median remuneration of all employees in the financial year 2017-18: The median remuneration of employees of the Company during the financial year was 7.95 lakh. In the financial year, there was an increase of 11% in the median remuneration of employees. C) Number of permanent employees on the rolls of Company as on 31st March 2018: There were 42,464 permanent employees on the rolls of Company as on March 31, 2018. D) Average percentile increase already made in the salaries of the employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in managerial remuneration 1.180 Company Secretary *** 0.61 0.195 2.45 (4.88) Sanjeev Aga Narayanan Kumar Independent Director 0.317 Naina Lal Kidwai 3.99 Independent Director 0.195 2.45 48.06 Mr. Arvind Gupta N. Hariharan Nominee of SUUTI 0.048 29.76 50.05 151.79 113.52 Implementing agency SUBSIDIARY U40106TN2012GOI111122 MOUNT POONAMALLE KUDGI TRANSMISSION 10 GUJARAT-390002 PRIVATE LIMITED CHHANI JAKAT NAKA, VADODARA, STEEL COMPANY 95.00 Section 2(87)(ii) SUBSIDIARY U27100GJ2009PTC055901 L&T ENERGY CENTRE, NEAR KESUN IRON AND 9 97.45 Section 2(87)(ii) LIMITED ROAD, POST BOX NO. 979, MANAPAKKAM, 514135862 MOUNT POONAMALLE PARIS, FRANCE - 75012 8, RUE, PAUL BELMONDO AHMEDABAD-MALIYA SYNCORDIS FRANCE SARL 12 COMPANY WLL MAHARASHTRA - 400001 50.0002 Section 2(87)(ii) SUBSIDIARY U74140MH2008PTC177765 L&T HOUSE, BALLARD ESTATE, L&T - GULF PRIVATE LIMITED 11 CHENNAI-600089 N M MARG, MUMBAI, SUBSIDIARY & CONTRACTING SUBSIDIARY ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI 600089 MOUNT POONAMALLE 2A-03-2, LORONG BATU NILAM 4A, BANDAR BUKIT TINGGI, 41200, KLANG, SELANGOR, MALAYSIA RCS LUXEMBOURG B NUM'ERO 105331 L-8009 STRASSEN 105 ROUTE D'ARLON, NO.45, NORTH USMAN ROAD T. NAGAR 600017 4TH FLOOR, ROOP EMERALD, GENERAL TRADING AGGREGATE LIMITED PRODUCTS & HI-TECH ROCK 7 BHD 6 OFFICE NO. 14, 5TH FLOOR, AL-FARWANIYA, BLOCK NO. 44, BLDG. NO. 6, GHASHAM FAHED AL-BASMAN, KUWAIT Holding/ Subsidiary/ Associate 10292 KANA CONTROLS 8 100.00 Section 2(87)(ii) SUBSIDIARY U14290TN2008PLC065900 100.00 Section 2(87)(ii) 49.00 Section 2(87)(i) SUBSIDIARY SUBSIDIARY 82.96 Section 2(87)(ii) % of Shares Applicable Section held 161535-W B105331 SUBSIDIARY U72900TN2015FTC101675 82.96 Section 2(87)(ii) CORPORATION SDN. 82.96 Section 2(87)(ii) SUBSIDIARY L&T HOUSE, BALLARD ESTATE, L&T CASSIDIAN LIMITED* 19 MAHARASHTRA, INDIA. 64.01 Section 2(87)(ii) SUBSIDIARY U67190MH2013PLC240261 BRINDAVAN, PLOT NO. 177, C.S.T. ROAD, KALINA, SANTACRUZ (EAST), MUMBAI - 400 098, MARKETS LIMITED L&T CAPITAL 18 MAHARASHTRA - 400001 N M MARG, MUMBAI, COMPANY LIMITED 100.00 Section 2(87)(ii) U29253MH2011PLC216258 SUBSIDIARY 100.00 Section 2(87)(ii) N M MARG, MUMBAI, SUBSIDIARY U29119MH1997PLC109700 Associate Subsidiary/ Holding/ CHENNAI-600089 MANAPAKKAM, SUBSIDIARY ROAD, POST BOX NO. 979, 97.45 Section 2(87)(ii) SUBSIDIARY U45309TN2008PLC066938 MOUNT POONAMALLE L&T CHENNAI TADA 20 MAHARASHTRA - 400001 TOLLWAY LIMITED U45203TN2008PLC069211 U67190MH2000PLC125653 L&T CAPITAL MAHARASHTRA - 400001 LIMITED N M MARG, MUMBAI, HYDROPOWER 100.00 Section 2(87)(ii) SUBSIDIARY U40300MH2010PLC204778 L&T HOUSE, BALLARD ESTATE, L&T ARUNACHAL 14 CHENNAI 600089 ROAD, POST BOX NO. 979, MANAPAKKAM, TOLLWAY LIMITED 13 97.45 Section 2(87)(ii) 15 66.99 L&T HOUSE, BALLARD ESTATE, U62100MH2009PTC196917 17 CHENNAI-600089 MANAPAKKAM, ROAD, POST BOX NO. 979, 97.45 Section 2(87)(ii) SUBSIDIARY U45203TN2011PLC080786 L&T HOUSE, BALLARD ESTATE, MOUNT POONAMALLE 16 MAHARASHTRA - 400001 LIMITED N M MARG, MUMBAI, SERVICES PRIVATE 100.00 Section 2(87)(ii) SUBSIDIARY L&T BPP TOLLWAY LIMITED HENIKWON L&T AVIATION SYNCORDIS S.A. which is commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines. We further report that based on review of compliance mechanism established by the Company and on the basis of the Compliance Certificate(s) issued by the Company Secretary and taken on record by the Board of Directors at their meeting(s), we are of the opinion that there are adequate systems and processes in place in the Company All decisions of Board and Committee meetings were carried unanimously. constituted with proper balance of Executive Directors Non-Executive Directors including Independent Directors and Women Directors. The changes in the composition of the Board of Directors which took place during the period under review were carried out in compliance with the provisions of the Act. Adequate notice is given to all Directors of the schedule of the Board and Committee Meetings, agenda and detailed notes on agenda were sent atleast seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting. - The Board of Directors of the Company is duly . We further report that:- Projects or Programes which the 1. Local Area or other project is covered 2. Specify the state and district where projects or program was undertaken Amount We further report that during the audit period the following events have occurred which had a major bearing on the Company's affairs in pursuance of the laws, rules, regulations, guidelines, standards etc:- The shareholders at the General Meeting convened by National Company Law Tribunal, Mumbai Bench ("NCLT") on 22nd August 2017, approved a Scheme of Amalgamation of Spectrum Infotech Private Limited, a wholly-owned subsidiary of the Company, with the Company resulting in cancellation of all the shares held by the Company in Spectrum Infotech Private Limited. The NCLT approved the said Scheme vide their Order dated 21st February, 2018; The Company issued and allotted Bonus Equity Shares in the ratio of one equity share for every two equity shares held by the Members as on 14th July 2017. The said Equity Shares were listed on BSE Ltd and the National Stock Exchange of India Limited with effect from 19th July 2017. For S. N. ANANTHASUBRAMANIAN & CO. Company Secretaries ii) CIN i) I. REGISTRATION AND OTHER DETAILS: [Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014] as on the financial year ended on March 31, 2018 Direct Overhead EXTRACT OF ANNUAL RETURN Annexure 'F' to the Board Report LARSEN & TOUBRO 104 Date: 12th May, 2018 Place: Thane FCS No.: 4206 COP No.: 1774 S. N. ANANTHASUBRAMANIAN PARTNER Firm Registration No. P1991MH040400 FORM NO. MGT-9 II. outlay expenditure (budget) on projects project or or programs programe (In Lakh) Cumulative Amount spent: expenditure direct or through Project Neev Jharkhand (Jamshedpur), Kerala 16 Basic infrastructure support in the community (Water, Health, Sanitation, Solar lights, roads etc.) Community Development (Kochi), Maharashtra (Mumbai, Pune, Ahmednagar), Rajasthan (Jaipur), Tamil Nadu (Chennai), Telangana (Hyderabad), West Bengal (Kolkata) Andhra Pradesh (Vizag), Maharashtra (Mumbai), Orissa (Bhubaneswar, Balasore), Tamil Nadu (Chennai, Kanchipuram, Coimbatore), Uttarakhand 65.88 59.45 3.14 62.59 Implementing agency 5.69 LUXEMBOURG 115.14 107.82 Skill building for differently abled 15 through vocational training Skill Building Gujarat (Surat, Ahmedabad), Lakh) reporting agency wise (In upto to the implementing period (* In Lakh) 130.20 In 78.38 82.52 Implementing agency 13 Vocational Training Skill Building Gujarat (Vadodara), Maharashtra (Nagpur, Pune, Raigad), Tamil Nadu (Chennai, Coimbatore, Nilgiris), West Bengal (Kolkata) Kerala (Ernakulam), Orissa (Rayagada), West Bengal (Kolkata) 14 Women empowerment 4.14 Registration Date Lakh) iv) Category MOUNT POONAMALLE CHENNAI VISION 2 99.90 Section 2(87)(ii) SUBSIDIARY 9TH FLOOR, AMBADEEP BUILDING, U74899DL1995PLC070704 14, KASTURBA GANDHI MARG, CONNAUGHT PLACE, NEW DELHI-110001 BHILAI POWER SUPPLY COMPANY LIMITED 1 held % of Shares Applicable Section Holding/ Subsidiary/ Associate Company CIN/GLN Address of the Company Sl. No Name of the U70101TN2008PTC068877 SUBSIDIARY 100.00 Section 2(87)(ii) LIMITED LIMITED INDIA PRIVATE SOFTWARE SERVICES iii) Name of the Company 5 SYNCORDIS 4 III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES: Company Address of the Company Sl. No Name of the 106 105 FECHNOLOGIES INDIA SIN CROSS KORAMANAGALA: 1741404272011PTC0614890 SUBSIDARY 58.64 Section 20171010 - 600089 MANAPAKKAM, CHENNAI CIN/GLN # on the basis of gross turnover DEVELOPERS PRIVATE ROAD, POST BOX NO. 979, 26.59 Tel: (040) 6716 2222 Toll free number: 1-800-3454-001 Fax: (040) 2342 0814 Telengana 500 032 Financial District, Nanakramguda, Hyderabad, Karvy Selenium Tower B, Plot 31 & 32, Gachibowli, Unit: Larsen & Toubro Limited L&T HOUSE, N. M. MARG, BALLARD ESTATE, MUMBAI - 400 001 TEL: 022-67525656 FAX: 022-67525893 LISTED COMPANY HAVING SHARE CAPITAL PUBLIC LIMITED COMPANY LARSEN & TOUBRO LIMITED February 7, 1946 38.42 L99999MH1946PLC004768 viii) Name, Address and Contact details of Registrar and Transfer Agent, if any vii) Whether listed company v) Sub-Category of the Company PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY: All the business activities contributing 10% or more of the total turnover of the Company shall be stated:- Karvy Computershare Pvt. Ltd. Construction of Buildings 16.22 % to total turnover of the company # 422 421 410 services service NIC Code of the Product/ Construction of Utility Projects vi) Address of the Registered office and contact details 1 Name and Description of main products/ 3 No. Sl. 2 Construction of Roads and Railways 21/07/2017 year 12.29 4.00 172128421 in Shareholding during the Date wise Increase / Decrease 56068926 18689642 Bonus 4.00 -23725716 Transfer 23/06/2017 6.55 61105000 16/06/2017 6.55 61102860 12.28 172128421 37379284 2140 Transfer 24/11/2017 28/07/2017 2.52 30704758 57376140 Bonus 35257393 At the end of the year Shareholding at the beginning of the Year HDFC TRUSTEE CO LTD A/C HDFC EQUITY FUND 4 2.52 35257393 -1261792 Transfer 2.61 36519185 -19551346 Transfer 17/11/2017 4.00 56070531 535 Transfer 22/09/2017 4.00 56069996 1070 Transfer specifying the reasons for increase and decrease (e.g. allotment/ transfer/bonus/sweat etc.) 12.30 26/01/2018 At the end of the year Shareholding at the beginning of the Year 18.31 256589578 -11400 Transfer 26/01/2018 18.32 256600978 11400 Transfer Date wise Increase / Decrease in Shareholding during the year specifying the reasons for increase and decrease (e.g. allotment/ transfer/bonus/sweat etc.) 18.32 256589578 85529855 Bonus 21/07/2017 18.33 171059723 17887716 Transfer 23/06/2017 16.42 153172007 Shareholding at the beginning of the Year 3.29 LIFE INSURANCE CORPORATION OF INDIA 09/03/2018 114752281 30000 Transfer 18.31 Shareholding at the beginning of the Year 21/07/2017 ADMINISTRATOR OF THE SPECIFIED UNDERTAKING OF THE UNIT TRUST OF INDIA Date wise Increase / Decrease in Shareholding during the year specifying the reasons for increase and decrease (e.g. allotment/ transfer/bonus/sweat etc.) L&T EMPLOYEES WELFARE FOUNDATION 3 2 18.31 256589578 At the end of the year 18.31 256589578 -80000 Transfer 23/03/2018 18.32 256669578 80000 Transfer 23/03/2018 18.31 256589578 -30000 Transfer 09/03/2018 256619578 07/04/2017 200000 Transfer 30711153 3.40 31753723 -433 Transfer 19/05/2017 3.40 31754156 203 Transfer 19/05/2017 3.40 31753953 -21606 Transfer 12/05/2017 3.40 31775559 119000 Transfer 12/05/2017 3.39 31656559 -175 Transfer 05/05/2017 3.39 26/05/2017 31656734 31953723 26/05/2017 1 16/06/2017 3.44 32079141 -252291 Transfer 09/06/2017 3.46 32331432 200000 Transfer 09/06/2017 3.44 32131432 -7776 Transfer 02/06/2017 3.44 32139208 247040 Transfer 02/06/2017 3.42 31892168 -61555 Transfer 3.42 6395 Transfer 1291 Transfer 3.39 21/04/2017 3.34 31143866 221000 Transfer 21/04/2017 3.31 30922866 -286 Transfer 14/04/2017 specifying the reasons for increase and decrease (e.g. allotment/ transfer/bonus/sweat etc.) 3.31 30923152 255000 Transfer 14/04/2017 in Shareholding during the year 3.29 30668152 -43001 Transfer Date wise Increase / Decrease 07/04/2017 3.29 -5676 Transfer 05/05/2017 31138190 28/04/2017 31655443 -138518 Transfer 28/04/2017 Company holding of the shares % of total No. of Shares in share Decrease Increase/ Reason Cumulative Shareholding LARSEN & TOUBRO No. Date Name of the Share Holder SI. 3.41 31793961 655771 Transfer 3.34 Company -0.06 in share holding 0 0.00 0.00 Sub-total (A) (1):- 0 0 0 0.00 0 0 0 0.00 0.00 (2) Foreign 0 a) 0 0 0 0.00 0 0 0 0.00 0.00 b) Other-Individuals 0 0 0 0.00 NRIs-Individuals 0 0.00 0 0 0.00 0 0 0 0.00 0.00 d) Bodies Corp. 0 0 0 0.00 0 0 0 0.00 0.00 0 0 f) Any Other.... 0.00 0.00 0 0 0 0.00 0 0 0 Banks / Fl e) 0 0 0 0.00 0 0.00 0 0 0 0.00 0.00 Total shareholding of Promoter 0 0 0 0.00 0 0 0 0 0.00 |(A) =(A)(1)+(A)(2) B. Public Shareholding (1) Institutions a) Mutual Funds 107,273,904 12,822 107,286,726 11.50 202,331,530 13,878 202,345,408 14.44 2.94 0.00 0 Sub-total (A) (2):- 0.00 0.00 c) Bodies Corp. 0 0 0 0.00 0 0 0 0.00 0.00 d) Banks/Fl 0 0 0 0.00 0.00 0 0 0 0.00 0 0 0 e) Any Other.... 0.00 0.00 0 0 0 0 0 State Govt (s) c) PROJECTS AND KISH ISLAND, IRAN SYSTEMS KISH (LLC) 4 INTERNATIONAL SEAPORTS (HALDIA) PRIVATE LIMITED 5 L&T CAMP FACILITIES LLC 6 L& T-CHIYODA LIMITED 7 LARSEN & TOUBRO QATAR & HBK APARTMENT, BAZAAR-E-DANOOS, CONTRACTING LLC FLAT NO. 27, 5TH FLOOR, KOHINOOR BUILDING, 105, PARK STREET, KOLKATA 700016 P. O. BOX 44357, DUBAI, UNITED ARAB EMIRATES L&T HOUSE, BALLARD ESTATE, NM MARG, MUMBAI, MAHARASHTRA - 400001 P. O. BOX 1362, DOHA, QATAR U45205WB1999PTC090733 ASSOCIATE 21.74 Section 2(6) 600640 ASSOCIATE 49.00 Section 2(6) U28920MH1994PLC083035 ASSOCIATE 50.00 Section 2(6) MAGTORQ PRIVATE LIMITED ENGINEERING 50.00 Section 2(6) ASSOCIATE LARSEN & TOUBRO Sl. No Name of the Company Address of the Company CIN/GLN 123 SEAWOODS RETAIL PRIVATE LIMITED * 1 ARDOM TELECOM PRIVATE LIMITED 2 GUJARAT LEATHER INDUSTRIES LIMITED @@ L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 609B & 610, 6TH FLOOR, WELL DONE TECH PARK, SOHNA ROAD, SECTOR-41, GURGAON - 122018 NO 3001, GIDC INDUSTRIAL ESTATE, ANKLESHWAR, GUJARAT Holding/ Subsidiary/ Associate 3744 POST BOX 1267, NEHA INDIRAN 3 50.00 Section 2(6) ASSOCIATE 28634 U18104GJ1978SGC003134 ASSOCIATE U64100HR2009PTC048269 100.00 Section 2(87)(ii) % of Shares Applicable Section held SUBSIDIARY U70103MH2016PTC285466 7.76 Section 2(6) ASSOCIATE 50.00 Section 2(6) 8 A. Promoters Demat Physical Total No. of Shares held at the end of the year % of Total Demat Physical Total % of Total Shares % Change during the year (1) Indian a) Individual/HUF 0 0 0 0.00 0.00 0.00 0 0 0 0.00 No. of Shares held at the beginning of the year 0 0 b) Central Govt 0.00 0.00 0 0 0 b) Banks/Fl Category of Shareholders IV. SHARE HOLDING PATTERN: NO. 58-C, SIPCOT INDUSTRIAL COMPLEX, HOSUR, TAMIL NADU 635126 U02520TZ1989PTC002458 ASSOCIATE 42.85 Section 2(6) 9 GRAMEEN CAPITAL INDIA LIMITED^ 402, 36 TURNER ROAD, BANDRA WEST, MUMBAI - 400050 U65923MH2007PTC168721 ASSOCIATE 23.87 Section 2(6) 10 FEEDBACK INFRA PRIVATE LIMITED ^^ 311, 3RD FLOOR, VARDHAMAN PLAZA, POCKET 7, PLOT NO. 6, SECTOR 12, DWARKA, U74899DL1990PTC040630 ASSOCIATE 0.00 Section 2(6) 113 ^^^ The Associate is sold on September 7,2017 0 Section 2(6) @Merged with Larsen & Toubro Infotech Limited * Under Process of Strike Off ASSOCIATE i) Category-wise Share Holding: U74900TG2014PLC095703 @@ The Company is under Liquidation ^^ The Associate is sold on March 19,2018 DOOR NO. 1-80/40/SP/58-65, SHILPA HOMES LAYOUT, GACHIBOWLI, HYDERABAD-500032 NEW DELHI-110078 KMC INFRATECH ROAD HOUSINGS LIMITED^^^ 11 % Merged with Larsen & Toubro Limited w.e.f April 1,2017 67,089,940 31,933 67,121,873 0.00 v) Trust 114,734,515 17,766 114,752,281 12.30 172,101,772 vi) Qualified Foreign 0 0 0 0.00 0 26,649 0 0.91 172,128,421 -0.02 0 0.00 0.00 Investor Sub-total (B)(2):- Total Public Shareholding 514,395,903 896,647,652 18,676,230 533,047,270 18,721,435 915,344,224 57.13 805,985,103 98.11 1,346,555,636 25,057,564 831,042,667 25,170,775 1,371,726,411 59.30 2.17 97.88 12.28 12,713,629 540,579 12,173,050 1,509,274 0.16 1,421,590 375 1,421,965 0.10 ii) Foreign Nationals 372,138 14,470 386,608 0.04 547,173 21,705 568,878 0.04 0.00 iii) Foreign Portfolio Investors 0.91 8,454,826 390,360 8,064,466 iv) Non-Residents 3.31 -0.23 18.35 0 257,126,930 15.04 140,322,703 0 140,322,703 257,126,930 |(B)=(B)(1)+ (B)(2) C. Shares held by Custodian for GDRs & ADRs 17,621,579 SI. No. Shareholding at the beginning of the Cumulative Shareholding during the year year No. of shares % of total shares of the Company No. of shares % of total shares of the Company 1 At the beginning of the year 2 Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer/bonus/sweat equity etc): 3 At the End of the year NIL shares during the Year No. of % of total Shares Increase/ Reason Decrease No. Date Name of the Share Holder (iii) Change in Promoters' Shareholding (please specify, if there is no change): SI. (iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs): 116 115 NIL NIL NIL Cumulative Shareholding 250 NIL NIL NIL 0 17,621,579 1.89 29,643,045 0 29,643,045 2.12 0.23 Grand Total (A+B+C) 914,269,231 18,721,435 932,965,803 100.00 1,376,198,681 25,170,775 1,401,369,456 100.00 0.00 (ii) Shareholding of Promoters: SI Shareholders Name Shareholding at the beginning of the year No. of Shares Shareholding at the end of the year Total 1 holding during the year in share to total shares % of Shares Pledged/ encumbered NIL shares the Company Shares of % of total %of Shares No. of Shares Pledged/ encumbered % of total Shares of the Company % change to total of the 1,509,024 0.00 0.00 0.00 f) Insurance Companies 185,203,662 450 185,204,112 19.85 297,215,504 675 297,216,179 21.21 1.36 g) Flls 0 20,810,053 20,810,053 2.23 h) Foreign Venture Capital 0 0 0 0.00 962,363 0 52,558 1,014,921 0.07 -2.16 0 0 0 0 0 0.00 7.19 36,983,534 46,100 37,029,634 2.64 -4.55 c) Central Govt 1,874,190 0 1,874,190 0.20 3,077,602 0 3,077,602 0.22 0.02 d) 0 0 0 e) Venture Capital Funds 0.00 0.00 0.00 0 0 0.00 0 0 0 State Govt(s) 0 0.00 Funds Sub-total (B)(1):- holding nominal share capital upto * 2 lakh 218,526 19,677,652 2.11 29,385,457 0 29,385,457 2.10 10 MAHARASHTRA - 400001 ii) Individual 19,459,126 ☐ ☐ ☐ ☐ 114 -0.01 LARSEN & TOUBRO Category of Shareholders Others (specify) c) year % Change during the % of Total Shares Shares shareholders Total Demat % of Total Total No. of Shares held at the end of the year No. of Shares held at the beginning of the year Demat Physical Physical i) Directors & Relatives -0.48 241,086,176 24,053,909 265,140,085 382,251,749 45,205 382,296,954 40.98 540,570,533 113,211 540,683,744 38.58 -2.39 (2) Non-Institutions a) Bodies Corp. i) Indian ii) Overseas 66,318,379 280,167 341,383 66,634,899 23,431 303,598 7.14 92,102,289 0.03 40,666 19.40 17,670,044 181,005,429 163,335,385 Individual i) 0.00 18.92 b) Individuals 0.00 43,926 -0.54 6.60 92,513,376 411,087 3,260 -0.03 Shares SAHIBGANJ GANGES 32211944 P.O. BOX 281, POSTAL CODE 325, W LIWA, SULTANATE OF OMAN LARSEN & TOUBRO HEAVY ENGINEERING LLC 86 CODE 112, MUSCAT ELECTROMECH LLC 70.00 Section 2(87)(ii) SUBSIDIARY 1/04445/1 P.O. BOX 1999, RUWI, POSTAL LARSEN & TOUBRO 1042928 85 ATCO SAUDIA LLC 100.00 Section 2(87)(ii) SUBSIDIARY AL-TURKI BUILDING, KING KHALED 2050055625 LARSEN & TOUBRO 84 50000 KUALA LUMPUR, MALAYSIA HANGSAM, JALAN HANG LEKIR, (EAST ASIA) SDN. BHD 30.00 Section 2(87)(i) STREET, P.O. BOX 91, DAMMAM SUBSIDIARY SUBSIDIARY 87 % of Shares Applicable Section held Holding/ Subsidiary/ Company CIN/GLN Address of the Company Sl. No Name of the LARSEN & TOUBRO SUITE 500, MISSISSAUGA, ONL4W 4X7 CANADA INFOTECH CANADA LIMITED 82.96 Section 2(87)(ii) 70.00 Section 2(87)(ii) SUBSIDIARY 2810, MATHESON BLVD EAST LARSEN & TOUBRO 88 LIMITED LLC 100.00 Section 2(87)(ii) SUBSIDIARY 2051053464 P.O. BOX 6391, AL KHOBAR 34423, KINGDOM OF SAUDI ARABIA HYDROCARBON INTERNATIONAL LARSEN & TOUBRO 1415026 390357-T SUITE 702, 7TH FLOOR, WISMA LARSEN & TOUBRO CHENNAI 600089 L&T WESTERN INDIA TOLLBRIDGE LIMITED) 97.45 Section 2(87)(ii) SUBSIDIARY U45203TN1999PLC042518 MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, - 600089 LTIDPL INDVIT SERVICES LIMITED (formerly known as 79 ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI 80 TOLLWAYS LIMITED SUBSIDIARY U45203TN2005PLC057931 MOUNT POONAMALLE WESTERN ANDHRA 78 C.S.T. ROAD, KALINA, SANTACRUZ (EAST), MUMBAI - 400 098, MAHARASHTRA, INDIA. LIMITED CONSULTANTS 64.01 Section 2(87)(ii) SUBSIDIARY 97.45 Section 2(87)(ii) L&T-MHPS BOILERS L&T HOUSE, BALLARD ESTATE, U29119MH2006PTC165102 83 50.0001 Section 2(87)(ii) SUBSIDIARY U74210MH1995PLC088099 L&T HOUSE, BALLARD ESTATE, NM MARG, MUMBAI, MAHARASHTRA - 400001 LUNDY LIMITED L&T-SARGENT & 82 MAHARASHTRA - 400001 LIMITED N M MARG, MUMBAI, GENERATORS PRIVATE 51.00 Section 2(87)(ii) SUBSIDIARY U31101MH2006PTC166541 L&T HOUSE, BALLARD ESTATE, L&T-MHPS TURBINE 81 MAHARASHTRA - 400001 NM MARG, MUMBAI, PRIVATE LIMITED 51.00 Section 2(87)(ii) SUBSIDIARY Associate 89 LARSEN & TOUBRO INFOTECH GMBH 90 100 72.50 Section 2(87)(ii) SUBSIDIARY 2010/018159/07 2ND FLOOR, 4 PENCARROW CRESCENT, LA LUCIA RIDGE OFFICE ESTATE, SOUTH AFRICA 4019 TANDD SA (PTY) LIMITED LARSEN & TOUBRO 99 100.00 Section 2(87)(ii) SUBSIDIARY LARSEN AND TOUBRO INFOTECH SOUTH 1010154437 98 51.00 Section 2(87)(i) SUBSIDIARY U29308MH2017PLC293402 49.00 Section 2(87)(i) SUBSIDIARY 65.00 Section 2(87)(ii) SUBSIDIARY 27454 1/40304/4 P.O. BOX NO.20, RIYADH 11351, KINGDOM OF SAUDI ARABIA 11351 AFRICA (PTY) LIMITED 6TH FLOOR, 119 HERTZOG BOULEVARD, FORESHORE, CAPETOWN, SOUTH AFRICA 8001 2011/007226/07 100.00 Section 2(87)(ii) SUBSIDIARY U40102PB2007PLC031039 PO BOX NO-28, NEAR VILLAGE NALASH, RAJPURA, PATIALA, PUNJAB-140401 NABHA POWER LIMITED 103 16, BARAKHAMBA ROAD, CONNAUGHT PLACE, NEW DELHI-110001 PRIVATE LIMITED 64.01 Section 2(87)(ii) SUBSIDIARY U26942DL1990PTC041941 5TH FLOOR, DCM BUILDING, MUDIT CEMENT 102 75.00 Section 2(87)(ii) SUBSIDIARY 2051049523 ALMADA TOWER, PRINCE TURKI STREET, AL KHOBAR, SAUDI ARABIA ARABIA LLC LARSEN TOUBRO 101 62.14 Section 2(87)(ii) SUBSIDIARY 99.19 Section 2(87)(ii) U65100MH2011PLC299024 SUBSIDIARY L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 82.96 Section 2(87)(ii) SUBSIDIARY 82.96 Section 2(87)(ii) SUBSIDIARY L72900MH1996PLC104693 0067 OFFICE LOB 16 G 08, POST BOX 41558, HAMRIYAH FREE ZONE, SHARJAH, UNITED ARAB EMIRATES INTERNATIONAL FZE LARSEN & TOUBRO 92 SUBSIDIARY 270596763 INFOTECH LLC LARSEN & TOUBRO 91 82.96 Section 2(87)(ii) SUBSIDIARY HRB 15958 L&T HOUSE, BALLARD ESTATE, NM MARG, MUMBAI, MAHARASHTRA - 400001 EURO-ASIA BUSINESS CENTRE, MESSE-ALLEE 2, D-04356, LEIPZIG, GERMANY INFOTECH LIMITED LARSEN & TOUBRO 1220, N. MARKET ST., SUITE 806, WILMINGTON, DE 19801, USA 100.00 Section 2(87)(ii) 93 LARSEN & P.O. BOX 24399, SH. THAMOUR BLDG., MEZZANINE FLOOR, AL-HANDASA AREA, NEAR JAIDAH FLYOVER, B RING ROAD, DOHA, QATAR P.O. BOX 1127, RUWI, POSTAL CODE 112, SULTANATE OF OMAN CENTRE, NEWARK CITY, COUNTRY OF NEW CASTLE, G56 ZIP CODE-19711, U.S.A 113, BARKSDALE PROFESSIONAL LARSEN & TOUBRO SAUDI ARABIA LLC SYSTEMS LIMITED L&T MBDA MISSILE 97 LARSEN & TOUBRO QATAR LLC 96 LARSEN & TOUBRO OMAN LLC 95 LARSEN & TOUBRO LLC COMPANY, WITH LIMITED LIABILITY CONTRACTING 94 GENERAL CONSTRUCTION 49.00 Section 2(87)(i) SUBSIDIARY 117668 PLOT NO. 3, BUILDING NO.1, SHARQ, KUWAIT TOUBRO KUWAIT 6 DEL.C 18-101 BRINDAVAN, PLOT NO. 177, L&T FINANCIAL 77 SUBSIDIARY U45206TN2013PLC093395 MOUNT POONAMALLE L&T SAMBALPUR - 62 CHENNAI-600089 MANAPAKKAM, TOLLWAY LIMITED ROAD, POST BOX NO. 979, 97.45 Section 2(87)(ii) 97.45 Section 2(87)(ii) SUBSIDIARY MOUNT POONAMALLE L&T SAMAKHIALI GANDHIDHAM 61 MAHARASHTRA - 400001 100.00 Section 2(87)(ii) SUBSIDIARY U74200MH2007PLC176358 L&T HOUSE, BALLARD ESTATE, NM MARG, MUMBAI, L&T REALTY LIMITED 60 U45203TN2010PLC074501 ROURKELA TOLLWAY LIMITED ROAD, POST BOX NO. 979, MANAPAKKAM, L&T SEAWOODS LIMITED 65 CHENNAI-600089 MANAPAKKAM, ROAD, POST BOX NO 979, SHIPPING PRIVATE LIMITED 60.00 Section 2(87)(ii) SUBSIDIARY U61100TN2010PTC077217 MOUNT POONAMALLE L&T SAPURA 64 CHENNAI-600089 MANAPAKKAM, ROAD, POST BOX NO. 979, OFFSHORE PRIVATE LIMITED 60.00 Section 2(87)(ii) SUBSIDIARY U11200TN2010PTC077214 MOUNT POONAMALLE L&T SAPURA 63 CHENNAI-600089 100.00 Section 2(87)(ii) L&T HOUSE, BALLARD ESTATE, SUBSIDIARY EXECUTIVE SUITE, P.O.BOX 121576, SAIF ZONE, SHARJAH, U.A.E. 88.64 Section 2(87)(ii) SUBSIDIARY 0479598-9 2350 MISSION COLLEGE BLVD SUITE 490, SANTA CLARA, CA 95054, USA TECHNOLOGIES INC ESENCIA 55 97.45 Section 2(87)(ii) % of Shares Applicable Section held LARSEN & TOUBRO 56 SUBSIDIARY Associate Subsidiary/ Holding/ MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI-600089 PANIPAT ELEVATED CORRIDOR LIMITED 54 Company CIN/GLN Address of the Company Sl. No Name of the U45203TN2005PLC056999 L&T POWER DEVELOPMENT L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, L&T REALTY FZE 59 CHENNAI-600089 MANAPAKKAM, 97.45 Section 2(87)(ii) SUBSIDIARY U45203TN2008PLC069184 MOUNT POONAMALLE ROAD, POST BOX NO. 979, TOLLWAY LIMITED L&T RAJKOT-VADINAR 58 MAHARASHTRA - 400001 99.99 Section 2(87)(ii) SUBSIDIARY U40100MH2006PLC160413 L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, L&T POWER LIMITED 57 MAHARASHTRA - 400001 LIMITED 100.00 Section 2(87)(ii) SUBSIDIARY U40101MH2007PLC174071 02-01-05714 104 U45203MH2008PLC180029 100.00 Section 2(87)(ii) MAHARASHTRA - 400001 N M MARG, MUMBAI, COMPANY PRIVATE LIMITED * 100.00 Section 2(87)(ii) SUBSIDIARY U74990MH2009PTC193936 L&T HOUSE, BALLARD ESTATE, L&T TRUSTEE 72 CHENNAI-600089 73 MANAPAKKAM, ROAD, POST BOX NO 979, 98.12 Section 2(87)(ii) MOUNT POONAMALLE L&T TRANSPORTATION INFRASTRUCTURE 71 % of Shares Applicable Section held SUBSIDIARY U45203TN1997PLC039102 Associate Subsidiary/ LIMITED L&T UTTARANCHAL HYDROPOWER LIMITED VILLAGE BEDUBAGAR P.O AUGUSTMUNI RUDRAPRAYAG Rudra Prayag UR 246421 - 600089 ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI 68.00 Section 2(87)(ii) SUBSIDIARY U74210TN2006PLC061845 L&T VISION VENTURES MOUNT POONAMALLE LIMITED 76 100.00 Section 2(87)(ii) SUBSIDIARY U74999MH1961PLC012188 L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 L&T VALVES LIMITED 75 97.45 Section 2(87)(ii) SUBSIDIARY U45203TN2005PLC058417 MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI 600089 TOLLWAYS LIMITED VADODARA BHARUCH 74 100.00 Section 2(87)(ii) SUBSIDIARY U31401UR2006PLC032329 Holding/ SUBSIDIARY Company Address of the Company LIMITED NM MARG, MUMBAI, MAHARASHTRA - 400001 FORGINGS PRIVATE STEELS AND HEAVY 74.00 Section 2(87)(ii) SUBSIDIARY U27109MH2009PTC193699 L&T HOUSE, BALLARD ESTATE, L&T SPECIAL 67 68 CHENNAI-600089 ROAD, POST BOX NO. 979, MOUNT POONAMALLE L&T CONSTRUCTION CAMPUS, 97.00 Section 2(87)(ii) SUBSIDIARY GROUND FLOOR, TC-1 BUILDING, U74900TN2007PLC065356 L&T SHIPBUILDING LIMITED 66 MAHARASHTRA - 400001 NM MARG, MUMBAI, MANAPAKKAMМ, L&T TECHNOLOGY SERVICES LIMITED 69 Sl. No Name of the 110 109 65.60 Section 2(87)(ii) SUBSIDIARY U72200TN2006PTC059421 88.64 Section 2(87)(ii) SUBSIDIARY 0479598-9 88.64 Section 2(87)(ii) SUBSIDIARY L72900MH2012PLC232169 RR V TOWER, 6TH FLOOR, 33A, DEVELOPED PLOTS, SIDCO INDUSTRIAL ESTATE, GUINDY, CHENNAI-600032 200, WEST ADAMS STREET, CHICAGO, ILLINOIS-60606 MAHARASHTRA - 400001 N M MARG, MUMBAI, L&T HOUSE, BALLARD ESTATE, SERVICES PRIVATE LIMITED TECHNOLOGY L&T THALES SERVICES LLC 70 L&T TECHNOLOGY CIN/GLN PNG TOLLWAY LIMITED MOUNT POONAMALLE U45203TN2009PLC070741 53702941 3.83 06/10/2017 953263 Transfer 54656204 3.90 06/10/2017 -101 Transfer 54656103 3.90 -293798 Transfer 13/10/2017 55736291 3.98 13/10/2017 -221 Transfer 55736070 3.98 20/10/2017 9000 Transfer 55745070 3.98 1080188 Transfer 29/09/2017 3.86 53996739 492500 Transfer 53412343 3.81 117 118 Sl. Name of the Share Holder No. Date Increase/ Reason Decrease in share Cumulative Shareholding No. of Shares % of total shares of the holding Company 22/09/2017 -1761 Transfer 53410582 3.81 29/09/2017 586157 Transfer 20/10/2017 22/09/2017 -177 Transfer 3.98 10/11/2017 -50458 Transfer 55622374 3.97 Date wise Increase / Decrease 17/11/2017 302016 Transfer 55924390 3.99 in Shareholding during the year 3.98 17/11/2017 55824313 3.98 specifying the reasons for increase and decrease (e.g. allotment/ transfer/bonus/sweat etc.) 24/11/2017 1107363 Transfer 56931676 4.06 24/11/2017 -76 Transfer 56931600 -100077 Transfer 55672832 6930 Transfer 10/11/2017 27/10/2017 218 Transfer 55745111 3.98 27/10/2017 -3814 Transfer 55741297 3.98 31/10/2017 465 Transfer 55741762 3.98 31/10/2017 -251 Transfer 55741511 3.98 8987 Transfer 55750498 3.98 03/11/2017 -84596 Transfer 55665902 3.97 55744893 4.06 3.78 -9134 Transfer specifying the reasons for increase 07/07/2017 -188500 Transfer 33213939 3.56 and decrease (e.g. allotment/ transfer/bonus/sweat etc.) 14/07/2017 67089 Transfer 33281028 3.57 3.58 14/07/2017 33202975 3.56 21/07/2017 16815804 Bonus 50018779 3.57 28/07/2017 222500 Transfer 50241279 3.59 -78053 Transfer 33402439 534636 Transfer 07/07/2017 3.45 16/06/2017 -48141 Transfer 32163803 3.45 23/06/2017 658328 Transfer 32822131 3.52 23/06/2017 -1337 Transfer 32820794 3.52 30/06/2017 215509 Transfer 33036303 3.54 Date wise Increase / Decrease 30/06/2017 -168500 Transfer 32867803 3.52 in Shareholding during the year 28/07/2017 52919843 -220406 Transfer 3.57 3.59 25/08/2017 -22500 Transfer 50230957 3.59 01/09/2017 786393 Transfer 51017350 3.64 08/09/2017 50253457 5907 Transfer 3.64 08/09/2017 -280 Transfer 51022977 3.64 15/09/2017 1906000 Transfer 52928977 3.78 15/09/2017 51023257 113429 Transfer 25/08/2017 3.58 04/08/2017 101127 Transfer 50122000 3.58 04/08/2017 -93474 Transfer 50028526 3.57 11/08/2017 62375 Transfer 50090901 3.58 11/08/2017 -2361 Transfer 50088540 3.58 18/08/2017 51560 Transfer 50140100 3.58 18/08/2017 -72 Transfer 50140028 50020873 132803 Transfer 01/12/2017 56931754 HOLDINGS LIMITED 100.00 Section 2(87)(ii) SUBSIDIARY CL2106 UNIT 7, LEVEL 3, GATE L&T GLOBAL 113 INDUSTRIAL ESTATE, HOLLOWAY ROAD, MALDON, ESSEX, C9 4ER, UNITED KINGDOM 100.00 Section 2(87)(ii) SUBSIDIARY PRECINCT, BUILDING 2, DUBAI INTERNATIONAL FINANCIAL CENTRE, P.O BOX 63671, DUBAI, UAE 01201246 THALEST LIMITED 112 100.00 Section 2(87)(ii) SUBSIDIARY 775268-H UNIT C508, BLOCK C, KELANA SQUARE, JALAN SS7/26, KELANA JAYA 47301, PETALING JAYA SELANGOR DARUL EHSAN, MALAYSIA TAMCO SWITCHGEAR (MALAYSIA) SDN BHD 111 AUSTRALIA PTY LTD 100.00 Section 2(87)(ii) ENDEAVOUR HOUSE, BENTALLS 114 MARINE INFRASTRUCTURE PP 101, COL.BOSQUES DE LAS LOMAS, 11700 MEXICO CITY, MEXICO BOSQUE DE CIRUELOS 180, SUITE GODREJ ETERNIA A, 5TH FLOOR, MUMBAI PUNE ROAD, SHIVAJINAGAR, PUNE, MAHARASHTRA - 400005 c/o, OBERHAMMER, RECHTSANWALTE GMBH, KARLSPLATZ, 3/1, VIENNA L&T INFOTECH S. DE. RL.C.V 118 AUGMENT IQ DATA SCIENCES PRIVATE LIMITED @ 117 82.96 Section 2(87)(ii) SUBSIDIARY B87472072 C/JOSE ABASCAL, 56 2ND FLOOR, MADRID L&T INFORMATION TECHNOLOGY SPAIN SOCIEDAD LIMITADA LARSEN & TOUBRO INFOTECH AUSTRIA GMBH 116 115 CHENNAI-600089 LIMITED COMPLEX, MOUNT POONAMALLE ROAD, MANAPAKKAM, DEVELOPER PRIVATE 97.00 Section 2(87)(ii) SUBSIDIARY U74999TN2016PTC103769 NO.22, L&T CONSTRUCTION SUBSIDIARY N-2017020633 31, KITCHEN ROAD, DANDENONG, ACN006140512 VICTORIA 3175, AUSTRALIA TAMCO ELECTRICAL INDONESIA ENGINEERING HYDROCARBON PT. LARSEN & TOUBRO 106 Company CIN/GLN Address of the Company Sl. No Name of the SUBSIDIARY 107 AHU-0110258.AH.01.09 Subsidiary/ Holding/ 112 111 105 PITTANCO INDONESIA IS, KANDANG RODA, CIKARANG 2:18.177 H01.01.HT 94 SUBSIDIARY 10.0 Section 2087X(i) CHENNAI 600089 MANAPAKKAM, ROAD, POST BOX NO.979, 72.77 Section 2(87)(ii) SUBSIDIARY Associate RAYKAL ALUMINIUM COMPANY PRIVATE LIMITED 108 110 BAKU CITY, ALGERIA" NARIMANOV DISTRICT CASPIAN LLC 50.00 Section 2(87)(i) SUBSIDIARY 1503665631 "AGHA NEMATULLA STREET 224, L&T HYDROCARBON 109 100.00 Section 2(87)(ii) SUBSIDIARY 75.50 Section 2(87)(ii) SUBSIDIARY U132030R1999PTC005673 95.00 Section 2(87)(ii) % of Shares Applicable Section held 2159287 THE WOODROPE BUILDING, WOODROLFE ROAD, TOLLESBURY, MALDONESSEX CM9 8SE, UNITED KINGDOM ANNAPURNA COMPLEX, 559, LEWIS ROAD, BHUBANESWAR, KHORDHA-751014 THE CITY TOWER, 12TH FLOOR, UNIT 1-N, J1.MH., THAMRIN NO.81, CENTRAL JAKARTA, INDONESIA 10310 SYSTEMS LIMITED SERVOWATCH INDUSTRIES 154 Transfer FN435491D 82.96 Section 2(87)(ii) 58895548 4.20 29/12/2017 -5460 Transfer 58890088 4.20 05/01/2018 300148 Transfer 59190236 4.22 86000 Transfer 05/01/2018 59132321 4.22 12/01/2018 701380 Transfer 59833701 4.27 12/01/2018 -452 Transfer 59833249 4.27 -57915 Transfer 29/12/2017 4.20 58809548 4.06 01/12/2017 -76 Transfer 56931678 4.06 08/12/2017 465201 Transfer 57396879 4.10 15/12/2017 1108126 Transfer 58505005 4.18 15/12/2017 -211 Transfer 58504794 4.18 22/12/2017 307454 Transfer 58812248 4.20 22/12/2017 -2700 Transfer 19/01/2018 SUBSIDIARY 100737 Transfer 4.28 L & T HOUSE, BALLARD ESTATE, LTH MILCOM PRIVATE LIMITED 121 PRIVATE COMPANY LIMITED 100.00 Section 2(87)(ii) SUBSIDIARY L&T HOUSE, BALLARD ESTATE, N U45400MH2017PTC292586 M MARG, MUMBAI 400001 CONTRACTORS L&T INFRA 120 U74999MH2015PTC267502 PRIVATE LIMITED SUBSIDIARY U45309MH2016PTC283661 L&T HOUSE BALLARD ESTATE MUMBAI 400001 BRIDGE-COMPANY 119 82.96 Section 2(87)(ii) SUBSIDIARY 82.96 Section 2(87)(ii) SUBSIDIARY U72200PN2012PTC145539 100.00 Section 2(87)(ii) SUBSIDIARY 56.67 Section 2(87)(ii) MUMBAI 400001 19/01/2018 -527158 Transfer 59406828 4.24 26/01/2018 -656800 Transfer 58750028 4.19 02/02/2018 867563 Transfer 59617591 4.25 02/02/2018 -3789 Transfer 59613802 4.25 PRIVATE LIMITED * 100.00 Section 2(87)(ii) SUBSIDIARY U70109MH2016PTC285064 L&T HOUSE, BALLARD ESTATE, SEAWOODS REALTY 122 59933986 03/11/2017 N M MARG, MUMBAI, 09/06/2017 19171 Transfer 02/03/2018 in Shareholding during the year 1.06 14796732 -158 Transfer 23/02/2018 Date wise Increase / Decrease 1.06 14796890 427895 Transfer 23/02/2018 1.03 14368995 -39 Transfer 16/02/2018 1.03 14369034 104944 Transfer 16/02/2018 1.02 14264090 379601 Transfer 14815903 1.06 specifying the reasins for increase 02/03/2018 14985971 822570 Transfer 23/03/2018 1.01 14163401 -427217 Transfer 16/03/2018 1.04 14590618 59595 Transfer 16/03/2018 09/02/2018 1.04 -207168 Transfer 09/03/2018 1.05 14738191 174116 Transfer transfer/bonus/sweat etc.) 09/03/2018 and decrease (e.g. allotment/ 1.04 14564075 -251828 Transfer 14531023 1.07 0.99 -19756 Transfer 0.95 13262551 -807 Transfer 807857 Transfer 19/01/2018 12/01/2018 0.95 13263358 113129 Transfer 12/01/2018 0.94 13150229 -3750 Transfer 05/01/2018 0.94 13153979 205536 Transfer 05/01/2018 0.92 12948443 -282000 Transfer 29/12/2017 0.94 17570259 14070408 1.00 19/01/2018 -233284 Transfer 02/02/2018 0.99 13904245 138374 Transfer 02/02/2018 0.98 13765871 -71253 Transfer 26/01/2018 Company holding 13884489 of the shares during the Year No. of % of total Shares Decrease Increase/ Reason Date Sl. Name of the Share Holder No. Cumulative Shareholding 126 125 0.99 13837124 in share 23/03/2018 -490454 Transfer 14495517 12392508 615328 Transfer 06/10/2017 0.84 11777180 572436 Transfer 29/09/2017 0.80 11204744 344874 Transfer 15/09/2017 0.78 10859870 500000 Transfer 25/08/2017 0.74 10359870 1119411 Transfer 04/08/2017 0.66 9240459 3080153 Bonus 21/07/2017 0.88 27/10/2017 250000 Transfer 12642508 Shareholding at the GOVERNMENT OF SINGAPORE 10 No. Date Name of the Share Holder SI. LARSEN & TOUBRO 1.03 14377891 At the end of the year year 1.03 250000 Transfer 09/02/2018 1.01 14127891 1235383 Transfer 26/01/2018 0.92 12892508 250000 Transfer 17/11/2017 0.90 14377891 0.66 6160306 133812 Transfer 237143 Transfer 14/04/2017 0.41 3868457 99356 Transfer 07/04/2017 beginning of the Year 0.40 3769101 Shareholding at the NOMURA INDIA INVESTMENT FUND MOTHER FUND 4105600 9 14776397 At the end of the year 1.05 14776397 -3640 Transfer 30/03/2018 1.05 14780037 284520 Transfer 30/03/2018 1.03 1.05 -799 Transfer 0.44 197405 Transfer 07/07/2017 0.65 6026494 125809 Transfer 30/06/2017 Date wise Increase / Decrease in Shareholding during the specifying the reasins for increase and decrease (e.g. allotment/ transfer/bonus/sweat etc.) 0.63 5900685 456041 Transfer 16/06/2017 0.58 21/04/2017 5444644 09/06/2017 0.51 4776034 281461 Transfer 02/06/2017 0.48 4494573 191568 Transfer 28/04/2017 0.46 4303005 668610 Transfer Increase/ Reason 22/12/2017 13231242 0.87 12180739 -248383 Transfer 18/08/2017 0.89 12429122 155430 Transfer 18/08/2017 0.88 12273692 -656004 Transfer 11/08/2017 0.92 12929696 56400 Transfer 11/08/2017 0.92 12873296 -53382 Transfer 04/08/2017 0.92 12926678 240070 Transfer LARSEN & TOUBRO SI. Name of the Share Holder Date 08/09/2017 0.91 12698538 339261 Transfer 01/09/2017 0.88 12359277 -200015 Transfer 25/08/2017 0.90 12559292 04/08/2017 378553 Transfer Company holding of the shares % of total No. of Shares Cumulative Shareholding Decrease Increase/ Reason in share No. 25/08/2017 23092 Transfer 0.91 -5571 Transfer 30/06/2017 0.91 8457550 -1704 Transfer 23/06/2017 0.91 8459254 -215 Transfer 16/06/2017 specifying the reasins for increase and decrease (e.g. allotment/ transfer/bonus/sweat etc.) 0.91 8459469 -1145 Transfer 09/06/2017 year 0.91 8460614 -102912 Transfer 02/06/2017 18598830 1.99 07/04/2017 32740 Transfer 13000 Transfer 8470550 0.91 30/06/2017 28/07/2017 0.91 12692179 4219951 Bonus 21/07/2017 0.91 8472228 -21696 Transfer 14/07/2017 0.91 8493924 12686608 25041 Transfer 0.91 8468883 -1656 Transfer 07/07/2017 0.91 8470539 11 Transfer 07/07/2017 0.91 8470528 -22 Transfer 14/07/2017 12721630 0.91 08/09/2017 12130 Transfer 24/11/2017 0.90 12552179 -340045 Transfer 17/11/2017 0.92 12892224 200021 Transfer 17/11/2017 0.91 12692203 -1047 Transfer 10/11/2017 0.91 12693250 61300 Transfer 10/11/2017 0.90 12631950 -7425 | Transfer 03/11/2017 year 12564309 0.90 24/11/2017 -149490 Transfer 250962 Transfer 22/12/2017 0.93 12980280 -5252 Transfer 15/12/2017 0.93 12985532 206895 Transfer 15/12/2017 0.91 0.90 12778637 08/12/2017 0.91 12779615 382438 Transfer 08/12/2017 0.88 12397177 -17642 Transfer 01/12/2017 0.89 12414819 -978 Transfer 12639375 172641 Transfer 03/11/2017 29/09/2017 0.90 12630207 203250 Transfer 29/09/2017 0.89 12426957 -276250 Transfer 22/09/2017 0.91 12703207 -1351536 Transfer 104709 Transfer 0.90 12598498 -222205 Transfer 15/09/2017 0.92 12820703 100000 Transfer 15/09/2017 0.91 12720703 -927 Transfer 22/09/2017 0.94 11278671 06/10/2017 Date wise Increase / Decrease in Shareholding during the specifying the reasins for increase and decrease (e.g. allotment/ transfer/bonus/sweat etc.) 0.89 12466734 -20388 Transfer 31/10/2017 0.89 12487122 550357 Transfer 31/10/2017 0.85 11936765 0.81 80193 Transfer 0.85 11856572 102987 Transfer 20/10/2017 0.84 11753585 446665 Transfer 13/10/2017 0.81 11306920 28249 Transfer 27/10/2017 Decrease in share holding Cumulative Shareholding specifying the reasons for increase 02/03/2018 -300000 Transfer 57201151 4.08 and decrease (e.g. allotment/ transfer/bonus/sweat etc.) 09/03/2018 62437 Transfer 57263588 4.09 09/03/2018 -60000 Transfer 57203588 4.08 16/03/2018 1228430 Transfer 58432018 4.17 23/03/2018 2971 Transfer 58434989 4.17 23/03/2018 4.10 57501151 322118 Transfer 02/03/2018 59679664 4.26 09/02/2018 -1308260 Transfer 58371404 4.17 16/02/2018 1718 Transfer 58373122 4.17 16/02/2018 -1462089 Transfer -331815 Transfer 4.14 23/02/2018 128226 Transfer 58169533 4.15 23/02/2018 -990500 Transfer 57179033 4.08 Date wise Increase / Decrease in Shareholding during the year 58041307 65862 Transfer 56972900 30/03/2018 -2072 Transfer 26/05/2017 1.31 12196303 23395 Transfer 26/05/2017 1.30 12172908 -2538 Transfer 19/05/2017 1.30 12175446 250756 Transfer 19/05/2017 1.28 11924690 -1341 Transfer 12/05/2017 1.28 11926031 401651 Transfer 12/05/2017 1.23 12194231 1.31 02/06/2017 18323 Transfer 3541 Transfer 56976441 4.07 30/03/2018 -327069 Transfer 56649372 4.04 5 ICICI PRUDENTIAL CAPITAL PROTECTION ORIENTED FUND- At the end of the year Shareholding at the beginning of the Year 56649372 4.07 4.04 09/06/2017 1.31 12248399 36867 Transfer 09/06/2017 1.31 12211532 -1022 Transfer 02/06/2017 1.31 12212554 -225189 Transfer 09/02/2018 of the Company holding 107234 Transfer 18/08/2017 1.30 18198671 -16382 Transfer 11/08/2017 1.30 18215053 160221 Transfer 11/08/2017 1.29 18054832 176404 Transfer 04/08/2017 1.28 17878428 -588330 Transfer 28/07/2017 1.32 18466758 168134 Transfer 28/07/2017 1.31 18305905 1.31 25/08/2017 149230 Transfer -593062 Transfer 15/09/2017 1.30 18163321 38751 Transfer 15/09/2017 1.29 18124570 -279450 Transfer 08/09/2017 1.31 18298624 18404020 08/09/2017 1.30 18274562 119427 Transfer 01/09/2017 1.30 18155135 -300000 Transfer 25/08/2017 1.32 18455135 129458 Transfer 6139726 Bonus 21/07/2017 1.30 in Shareholding during the year 1.30 12114230 26874 Transfer 23/06/2017 Date wise Increase / Decrease 1.29 12087356 64146 Transfer 16/06/2017 1.29 23/06/2017 12023210 LARSEN & TOUBRO SI. Name of the Share Holder Date No. Increase/ Reason Decrease Cumulative Shareholding No. of % of total Shares shares in share -84611 Transfer 11524380 -54324 Transfer 1.29 12158898 -9928 Transfer 14/07/2017 1.30 12168826 54509 Transfer 14/07/2017 1.30 12114317 -8904 Transfer 07/07/2017 12059906 1.30 72052 Transfer 07/07/2017 1.29 12051169 -172000 Transfer 30/06/2017 1.31 12223169 163263 Transfer 30/06/2017 specifying the reasins for increase and decrease (e.g. allotment/ transfer/bonus/sweat etc.) 12123221 206238 Transfer 05/05/2017 1.21 -1089365 Transfer 13/10/2017 1.28 17966141 -1085600 Transfer 06/10/2017 1.36 19051741 -773119 Transfer 29/09/2017 1.42 19824860 -256564 Transfer 08/09/2017 1.43 20081424 -141632 Transfer 01/09/2017 1.44 20223056 -270325 Transfer 18/08/2017 1.46 16876776 1.21 Date wise Increase / Decrease 03/11/2017 -671134 Transfer 08/12/2017 0.97 13636353 -1744923 Transfer 01/12/2017 1.10 15381276 -1544688 Transfer 24/11/2017 and decrease (e.g. allotment/ transfer/bonus/sweat etc.) 20493381 1.21 25000 Transfer 24/11/2017 specifying the reasins for increase 1.21 16900964 -82998 Transfer 17/11/2017 in Shareholding during the year 1.21 16983962 107186 Transfer 16925964 6831127 Bonus 21/07/2017 1.46 14124090 -1471 Transfer 28/04/2017 1.51 14125561 -3340 Transfer 21/04/2017 1.51 14128901 -218114 Transfer 14/04/2017 1.51 1.54 191456 Transfer 07/04/2017 beginning of the Year - E 1.52 14155559 Company of the shares % of total No. of Shares 14347015 12965219 05/05/2017 14045117 13662254 38670 Transfer 07/07/2017 1.46 13623584 -3556 Transfer 23/06/2017 1.46 13627140 15163 Transfer 09/06/2017 -78973 Transfer 1.46 80103 Transfer 02/06/2017 1.45 13531874 -366946 Transfer 26/05/2017 1.49 13898820 -146297 Transfer 19/05/2017 1.50 13611977 18631570 0.93 -2588525 Transfer Company holding of the shares Shares No. of % of total during the Year Cumulative Shareholding Decrease in share Increase/ Reason Date SI. Name of the Share Holder No. 128 127 0.76 10700276 At the end of the year 0.76 10700276 53830 Transfer 30/03/2018 0.76 10646446 11 SBI MAGNUM EQUITY FUND Shareholding at the beginning of the Year 10429047 11318142 -260 Transfer 28/04/2017 1.21 11318402 47164 Transfer 28/04/2017 1.21 11271238 287067 Transfer 21/04/2017 32858 Transfer 1.18 187269 Transfer 14/04/2017 1.16 10796902 -4137 Transfer 07/04/2017 1.16 10801039 371992 Transfer 07/04/2017 1.12 10984171 23/03/2018 0.76 10613588 22547 Transfer 09/02/2018 0.77 10854542 68953 Transfer 02/02/2018 0.77 10785589 91273 Transfer 26/01/2018 0.76 10877089 10694316 19/01/2018 0.75 10551794 10152 Transfer 12/01/2018 0.75 10541642 164948 Transfer 05/01/2018 0.74 10376694 142522 Transfer 15/12/2017 0.78 -14769 Transfer 8323 Transfer 09/03/2018 0.76 10605265 -171847 Transfer 02/03/2018 0.77 10777112 8593 Transfer 02/03/2018 0.77 09/02/2018 10768519 23/02/2018 0.77 10797267 7820 Transfer 23/02/2018 0.77 10789447 -72873 Transfer 16/02/2018 0.78 10862320 -28748 Transfer 2.00 13230443 -910768 Transfer Increase/ Reason Date Sl. Name of the Share Holder No. Cumulative Shareholding 124 123 1.80 25255000 -35000 Transfer 09/02/2018 1.81 25290000 -50000 Transfer 05/01/2018 1.81 25340000 -50000 Transfer 22/12/2017 1.81 25390000 -24399 Transfer 17/11/2017 1.81 Decrease during the Year No. of % of total Shares shares in share At the end of the year 1.76 24700000 -50000 Transfer 23/03/2018 1.77 24750000 -115500 Transfer 16/03/2018 1.77 24865500 25414399 -114500 Transfer 1.78 24980000 -120000 Transfer 02/03/2018 1.79 25100000 -155000 Transfer 16/02/2018 Date wise Increase / Decrease in Shareholding during the year specifying the reasins for increase and decrease (e.g. allotment/ transfer/bonus/sweat etc.) of the Company holding 09/03/2018 24700000 -25601 Transfer 1.82 1.78 16600000 -10218 Transfer 26/05/2017 1.78 16610218 -39782 Transfer 19/05/2017 1.78 16650000 -15000 Transfer 05/05/2017 1.79 16665000 -35000 Transfer 28/04/2017 1.79 16700000 -68124 Transfer 14/04/2017 1.80 16768124 -50000 Transfer 23/06/2017 500000 Transfer 17100000 1.83 25440000 -14000 Transfer 31/10/2017 1.82 25454000 -36000 Transfer 27/10/2017 1.82 25490000 -60000 Transfer 15/09/2017 10/11/2017 1.82 -40000 Transfer 04/08/2017 1.83 25590000 -60000 Transfer 28/07/2017 1.83 25650000 8550000 Bonus 21/07/2017 Date wise Increase / Decrease in Shareholding during the year specifying the reasins for increase and decrease (e.g. allotment/ transfer/bonus/sweat etc.) 25550000 1.76 8 RELIANCE CAPITAL TRUSTEE COMPANY LIMITED 18270494 1.96 12/05/2017 -13430 Transfer 18257064 1.96 19/05/2017 -29043 Transfer 18228021 1.95 26/05/2017 -255378 Transfer 17972643 1.93 02/06/2017 -45995 Transfer 17926648 1.92 Date wise Increase / Decrease in Shareholding during the 0.92 8563526 138 Transfer 02/06/2017 11722 Transfer 05/05/2017 1.96 18258772 % of total shares of the Company 6 ICICI PRUDENTIAL LIFE INSURANCE COMPANY LIMITED Shareholding at the beginning of the Year 18326578 1.96 07/04/2017 0.92 108957 Transfer 1.98 14/04/2017 -9329 Transfer 18426206 1.97 21/04/2017 -254216 Transfer 18171990 1.95 28/04/2017 86782 Transfer 18435535 8563388 -176282 Transfer 26/05/2017 0.93 8649530 1571 Transfer 28/04/2017 0.93 8647959 109681 Transfer 21/04/2017 0.91 8538278 24 Transfer 28/04/2017 14/04/2017 8538254 -476998 Transfer 07/04/2017 0.97 9015252 1917 Transfer 07/04/2017 beginning of the Year 0.97 9013335 Shareholding at the 0.92 07/04/2017 -30979 Transfer 0.92 0.94 8739670 5500 Transfer 26/05/2017 0.94 8734170 -1566 Transfer 19/05/2017 0.94 8735736 18000 Transfer 8618551 19/05/2017 8717736 -2246 Transfer 12/05/2017 0.93 8719982 104502 Transfer 12/05/2017 0.92 8615480 -3071 Transfer 05/05/2017 0.93 Shares beginning of the Year 16818124 13/10/2017 1.90 26677081 253860 Transfer 06/10/2017 1.89 26423221 13919 Transfer 29/09/2017 1.89 26409302 80694 Transfer 22/09/2017 1.88 26328608 -139858 Transfer 15/09/2017 1.89 26468466 151280 Transfer 08/09/2017 1.88 26317186 -501026 Transfer 26176055 1.87 20/10/2017 24/11/2017 1.80 25158365 -108888 Transfer 17/11/2017 1.80 25267253 -611911 Transfer 10/11/2017 1.85 25879164 -1716958 Transfer 1155 Transfer 1.85 25878009 9341 Transfer 31/10/2017 1.85 25868668 -366589 Transfer 27/10/2017 1.87 26235257 59202 Transfer 03/11/2017 -42355 Transfer 01/09/2017 28034144 21/07/2017 1.94 18146974 193723 Transfer 14/07/2017 1.92 17953251 195912 Transfer 07/07/2017 1.90 17757339 64491 Transfer 30/06/2017 1.90 17692848 18651 Transfer 23/06/2017 1.89 17674197 -167840 Transfer 16/06/2017 1.91 17842037 8975522 Bonus 27122496 1.94 28/07/2017 1267794 Transfer 01/09/2017 1.91 26766350 68598 Transfer 25/08/2017 1.91 26697752 -14152 Transfer 18/08/2017 specifying the reasins for increase and decrease (e.g. allotment/ transfer/bonus/sweat etc.) 2.00 1.91 -115617 Transfer 11/08/2017 in Shareholding during the year 1.92 26827521 -76870 Transfer 04/08/2017 Date wise Increase / Decrease 1.92 26904391 -218105 Transfer 26711904 25116010 1.79 01/12/2017 24986 Transfer 02/03/2018 1.82 25545272 -5362 Transfer 23/02/2018 1.82 25550634 11261 Transfer 23/02/2018 1.82 25539373 -74088 Transfer 16/02/2018 1.83 25613461 375382 Transfer 09/02/2018 1.80 25238079 -59044 Transfer 02/02/2018 in Shareholding during the year specifying the reasins for increase and decrease (e.g. allotment/ transfer/bonus/sweat etc.) 25570258 1.82 02/03/2018 -53303 Transfer 07/04/2017 7 GENERAL INSURANCE CORPORATION OF INDIA 1.84 25773363 year At the end of the 1.84 25773363 104213 Transfer 30/03/2018 1.83 1.81 25669150 23/03/2018 1.83 25665008 139043 Transfer 16/03/2018 1.82 25525965 9010 Transfer 09/03/2018 1.82 25516955 4142 Transfer 25297123 99533 Transfer 26/01/2018 15/12/2017 Company holding of the Shares in share Decrease No. of Increase/ Reason shares % of total -40 Transfer Cumulative Shareholding No. Date Name of the Share Holder SI. 1.79 25112019 123 Transfer 08/12/2017 1.79 25111896 -4114 Transfer LARSEN & TOUBRO 1.80 25111979 22/12/2017 Date wise Increase / Decrease 1.80 25197590 -25302 Transfer 19/01/2018 1.80 25222892 35291 Transfer 19/01/2018 1.80 25187601 1.79 92071 Transfer 1.79 25095530 -128971 Transfer 05/01/2018 1.80 25224501 104463 Transfer 29/12/2017 1.79 25120038 8059 Transfer 12/01/2018 No. of Shareholding at the Decrease in share holding 11/08/2017 423405 Transfer 29805687 2.13 11/08/2017 -355 Transfer 29805332 2.13 18/08/2017 1272352 Transfer 31077684 2.22 18/08/2017 -543750 Transfer 30533934 2.18 25/08/2017 1540970 Transfer 32074904 2.29 25/08/2017 -13500 Transfer 32061404 2.10 29382282 -262 Transfer 04/08/2017 07/07/2017 -401129 Transfer 18644282 2.00 14/07/2017 -616386 Transfer 18027896 1.93 21/07/2017 9188625 Bonus 27216521 2.29 1.94 802533 Transfer 28019054 2.00 28/07/2017 -82 Transfer 28018972 2.00 04/08/2017 1363572 Transfer 29382544 2.10 28/07/2017 01/09/2017 284860 Transfer 32346264 2.31 29/09/2017 334750 Transfer 32647516 2.33 29/09/2017 -130326 Transfer 32517190 2.32 06/10/2017 545000 Transfer 32312766 33062190 06/10/2017 -6137 Transfer 33056053 2.36 13/10/2017 5485 Transfer 33061538 2.36 13/10/2017 -160 Transfer 33061378 2.36 2.04 -106059 Transfer 2.31 2.31 Date wise Increase / Decrease in Shareholding during the 08/09/2017 90656 Transfer 32436920 2.32 year 08/09/2017 -167 Transfer 32436753 2.32 22/09/2017 specifying the reasins for increase and decrease (e.g. allotment/ 2824 Transfer 32439577 2.32 15/09/2017 -21894 Transfer 32417683 2.31 transfer/bonus/sweat etc.) 22/09/2017 1142 Transfer 32418825 15/09/2017 2.36 19045411 07/07/2017 17844367 1.91 Date wise Increase / Decrease in Shareholding during the year specifying the reasins for increase and decrease (e.g. allotment/ transfer/bonus/sweat etc.) 12/05/2017 569319 Transfer 18413686 1.97 12/05/2017 -110932 Transfer 18302754 1.96 19/05/2017 458973 Transfer 18761727 2.01 19/05/2017 -176770 Transfer 18584957 1.99 26/05/2017 1887 Transfer 18586844 1.99 -292001 Transfer 05/05/2017 1.94 18136368 17720802 1.90 14/04/2017 206513 Transfer 17927315 1.92 14/04/2017 -217163 Transfer 17710152 1.90 21/04/2017 26/05/2017 30943 Transfer 1.90 28/04/2017 176235 Transfer 17917330 1.92 28/04/2017 -2466 Transfer 17914864 1.92 05/05/2017 221504 Transfer 17741095 -21000 Transfer 18565844 1.99 119 ☐ Cumulative Shareholding Sl. Name of the Share Holder No. Date Increase/ Reason Decrease in share No. of Shares % of total shares 120 holding 2.09 23/06/2017 Cumulative Shareholding 19201354 of the Company 2.06 30/06/2017 105827 Transfer 19307181 2.07 30/06/2017 -458508 Transfer 18848673 2.02 -267638 Transfer 196738 Transfer 19468992 23/06/2017 02/06/2017 933950 Transfer 19499794 2.09 02/06/2017 -856 Transfer 19498938 2.09 09/06/2017 62000 Transfer 19560938 2729 Transfer 2.10 -202324 Transfer 19358614 2.07 16/06/2017 136327 Transfer 19494941 2.09 16/06/2017 -28678 Transfer 19466263 2.09 09/06/2017 20/10/2017 1.25 33325766 140271 Transfer 23/03/2018 2.19 30637067 2.29 32080442 9519 Transfer -1443375 Transfer 16/03/2018 16/03/2018 2.29 32070923 -2520414 Transfer 09/03/2018 2.47 34591337 4288 Transfer 09/03/2018 2.47 34587049 -644641 Transfer 02/03/2018 2.51 35231690 30777338 2.20 23/03/2018 -2403693 Transfer 3.28 05/01/2018 -680070 Transfer 45208191 3.23 12/01/2018 13567 Transfer 45221758 3.23 12/01/2018 Increase/ Reason 215008 Transfer Date 122 121 2.04 28612818 At the end of the year 2.04 28612818 239173 Transfer 30/03/2018 2.02 28373645 Sl. Name of the Share Holder No. 02/03/2018 2.50 35016682 221170 Transfer 2.80 39212321 -3180000 Transfer 26/01/2018 3.03 42392321 459935 Transfer 26/01/2018 specifying the reasins for increase and decrease (e.g. allotment/ transfer/bonus/sweat etc.) 2.99 39433491 41932386 19/01/2018 in Shareholding during the year 3.24 45382285 864226 Transfer 19/01/2018 Date wise Increase / Decrease 3.18 -703699 Transfer 264388 Transfer 44518059 -3449899 Transfer 45888261 2.81 -2334507 Transfer -762283 Transfer 23/02/2018 2.55 35778965 730841 Transfer 23/02/2018 2.50 35048124 -1697867 Transfer 16/02/2018 2.62 02/02/2018 36745991 16/02/2018 2.59 36257955 -843193 Transfer 09/02/2018 2.65 37101148 2164 Transfer 09/02/2018 2.65 37098984 488036 Transfer 43500 Transfer 02/02/2018 3.27 2.36 10/11/2017 187352 Transfer 33241747 2.37 10/11/2017 -235355 Transfer 33006392 2.36 17/11/2017 4176 Transfer 33010568 2.36 LARSEN & TOUBRO Cumulative Shareholding SI. Name of the Share Holder Date Increase/ Reason No. Decrease No. of Shares % of total 33054395 -5353 Transfer 03/11/2017 2.36 20/10/2017 05/01/2018 2.38 -2705 Transfer 33323061 2.38 27/10/2017 599471 Transfer 33922532 2.42 27/10/2017 in share -861587 Transfer 31/10/2017 310 Transfer 33061255 2.36 31/10/2017 -1640 Transfer 33059615 2.36 03/11/2017 133 Transfer 33059748 33060945 shares 2.36 holding 3.65 15/12/2017 23976 Transfer 51183617 3.65 15/12/2017 -307886 Transfer 50875731 3.63 22/12/2017 945 Transfer 51159641 50876676 22/12/2017 -2890734 Transfer 47985942 29/12/2017 152 Transfer 47986094 3.43 of the 45844761 29/12/2017 -2141333 Transfer 3.63 -2139054 Transfer 3.43 3.80 32411605 -598963 Transfer 08/12/2017 17/11/2017 2.31 Company 24/11/2017 54400100 3.88 24/11/2017 -327825 Transfer 54072275 3.86 21988495 Transfer 01/12/2017 08/12/2017 3.74 52341147 -2641210 Transfer 957548 Transfer 53298695 3.92 54982357 910082 Transfer 01/12/2017 30/03/2018 0.97 13600609 -14000 Transfer -21000 Transfer 23/03/2018 0.97 16/02/2018 -8000 Transfer 13652609 0.97 13629609 -23000 Transfer 09/02/2018 -4000 Transfer 0.97 13621609 13596609 No. of % of total shares Shares At the end of the year 1,000,000 At the Beginning of the year 02/02/2018 A. M. NAIK 1 Company of the Shares % of total No. of shares Cumulative Shareholding during the year of the Company Shareholding at the beginning of the year Name of Director / KMP SI. No. (v) Shareholding of Directors and Key Managerial Personnel: LARSEN & TOUBRO 0.97 13596609 0.97 0.98 13923719 -26000 Transfer 24/11/2017 specifying the reasins for increase and decrease (e.g. allotment/ transfer/bonus/sweat etc.) 1.00 13997609 -30000 Transfer 17/11/2017 in Shareholding during the year 1.00 -73890 Transfer 14027609 22/09/2017 Date wise Increase / Decrease 1.01 14138997 -57070 Transfer 15/09/2017 0.11 1.01 -111388 Transfer 13666609 0.99 -46110 Transfer 26/01/2018 0.98 13692609 -10000 Transfer 19/01/2018 0.98 13702609 -78901 Transfer 01/12/2017 0.98 -46099 Transfer 15/12/2017 0.99 13827609 -50000 Transfer 08/12/2017 0.99 13877609 13781510 03-Apr-17 04-Jan-18 03-Apr-17 -25,000 04-Jan-18 -25,000 04-Jan-18 -25,000 04-Jan-18 -25,000 04-Jan-18 04-Jan-18 -25,000 04-Jan-18 -25,000 (e.g. allotment / transfer / reasons for increase/decrease Bonus 325,000 17-Jul-17 during the year specifying the bonus/sweat equity etc); -25,000 -25,000 -25,000 14196067 18-Jan-18 -25,000 18-Jan-18 -25,000 18-Jan-18 -25,000 08-Jan-18 04-Jan-18 -25,000 -25,000 08-Jan-18 -25,000 05-Jan-18 -25,000 05-Jan-18 -25,000 04-Jan-18 08-Jan-18 26-Apr-17 in Promoters Share holding -25,000 03-Apr-17 -10,000 03-Apr-17 -15,000 03-Apr-17 -15,000 03-Apr-17 -10,000 -20,000 03-Apr-17 03-Apr-17 -1,000 03-Apr-17 -10,000 03-Apr-17 -10,000 03-Apr-17 -10,000 -9,000 03-Apr-17 -20,000 05-Apr-17 26-Apr-17 Date wise Increase / Decrease -25,000 24-Apr-17 -25,000 24-Apr-17 -10,253 24-Apr-17 -14,747 07-Apr-17 -25,000 07-Apr-17 -15,631 07-Apr-17 -9,369 05-Apr-17 -25,000 05-Apr-17 -10,000 -10,000 4732022 Bonus 16/03/2018 1.01 1.29 18141575 256559 Transfer 08/12/2017 in Shareholding during the year specifying the reasins for increase and decrease (e.g. allotment/ transfer/bonus/sweat etc.) 1.28 17885016 100550 Transfer 01/12/2017 Date wise Increase / Decrease 1.27 17784466 -1521 Transfer 24/11/2017 08/12/2017 1.27 155792 Transfer 24/11/2017 1.26 17630195 -83206 Transfer 17/11/2017 1.26 17713401 6850 Transfer 17/11/2017 1.26 17706551 -7107 Transfer 10/11/2017 17785987 1.26 -10500 Transfer 15/12/2017 1.44 20174630 1.43 20072161 -1 Transfer 102469 Transfer 12/01/2018 05/01/2018 1.43 20072162 590449 Transfer 05/01/2018 1.39 19481713 -520 Transfer 1.29 29/12/2017 19482233 125928 Transfer 29/12/2017 1.38 19356305 -46978 Transfer 22/12/2017 1.38 19403283 1121350 Transfer 22/12/2017 1.30 18281933 150858 Transfer 1.39 12/01/2018 17713658 10/11/2017 198190 Transfer 06/10/2017 1.23 17256047 -500169 Transfer 29/09/2017 1.27 17756216 46668 Transfer 29/09/2017 1.26 17709548 139289 Transfer 22/09/2017 17454237 Company of the shares % of total Cumulative Shareholding in share Shares Decrease No. No. of Increase/ Reason Date Name of the Share Holder SI. LARSEN & TOUBRO holding 15200 Transfer 1.25 -24032 Transfer 1.26 17698458 63025 Transfer 03/11/2017 1.26 17635433 -19760 Transfer 31/10/2017 1.26 17655193 61613 Transfer 31/10/2017 1.26 17593580 06/10/2017 66377 Transfer 1.25 17527203 112162 Transfer 20/10/2017 1.24 17415041 -200000 Transfer 13/10/2017 1.26 17615041 184836 Transfer 13/10/2017 1.24 17430205 27/10/2017 -185 Transfer 20174445 1.44 Shareholding at the THE NEW INDIA ASSURANCE COMPANY LIMITED 12 1.46 20499688 At the end of the year 1.46 20499688 -5840 Transfer 30/03/2018 1.46 20505528 100964 Transfer 30/03/2018 9281045 1.46 328036 Transfer 23/03/2018 1.43 20076528 -84000 Transfer 16/03/2018 1.44 20160528 250405 Transfer 1.42 19910123 -21000 Transfer 09/03/2018 1.42 20404564 19931123 0.99 07/04/2017 9464045 433000 Transfer 23/06/2017 0.97 9031045 -35000 Transfer 26/05/2017 0.97 9066045 -90604 Transfer 19/05/2017 0.98 9156649 -21896 Transfer beginning of the Year 12/05/2017 9178545 -2500 Transfer 05/05/2017 0.98 9181045 -944 | Transfer 21/04/2017 0.98 9181989 -79056 Transfer 14/04/2017 0.99 9261045 -20000 Transfer 0.98 213677 Transfer 09/03/2018 Date wise Increase / Decrease | in Shareholding during the year specifying the reasins for increase and decrease (e.g. allotment/ transfer/bonus/sweat etc.) 117845 Transfer 16/02/2018 1.35 18945464 -133250 Transfer 09/02/2018 1.36 19078714 894 Transfer 09/02/2018 1.36 19077820 -295094 Transfer 02/02/2018 19063309 1.38 -771322 Transfer 26/01/2018 1.44 20144236 2934 Transfer 26/01/2018 1.44 20141302 -36395 Transfer 19/01/2018 1.44 20177697 3252 Transfer 19/01/2018 19372914 1.36 16/02/2018 -1020 Transfer 1.41 19717446 -2905 Transfer 02/03/2018 1.41 19720351 682430 Transfer 02/03/2018 of the Company holding in share shares Shares Decrease Increase/ Reason Date Sl. Name of the Share Holder No. 19062289 1.36 23/02/2018 394 Transfer 19062683 1.36 21/07/2017 23/02/2018 19037921 1.36 129 130 Cumulative Shareholding during the Year No. of % of total -24762 Transfer 18131075 22/12/2017 Zainulbhai -500 21-Apr-17 -500 24-Apr-17 -1,000 24-Apr-17 -500 24-Apr-17 -250 25-Apr-17 -250 21-Apr-17 25-Apr-17 25-Apr-17 -250 25-Apr-17 -250 Date wise Increase / Decrease 25-Apr-17 -250 in Promoters Share holding during the year specifying the 26-Apr-17 -500 -250 -500 21-Apr-17 -200 S. N. SUBRAHMANYAN 3 Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/ sweat equity etc): R. SHANKAR RAMAN Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): At the beginning of the year 107,056 53,528 17/07/2017 12/08/2017 At the End of the year At the beginning of the year 17/07/2017 12/08/2017 Bonus 52,500 ESOP exercise 189,000 94,500 Bonus 22,500 ESOP exercise 4 SHAILENDRA N. ROY At the End of the year At the beginning of the year 65,350 12-Apr-17 -200 12-Apr-17 -200 12-Apr-17 reasons for increase/decrease 2 26-Apr-17 (e.g. allotment / transfer / -500 27-Dec-17 -1,000 213,084 0.02 306,000 0.02 LARSEN & TOUBRO SI. No. Name of Director / KMP 22-Dec-17 of the Company No. of % of total shares Shares Cumulative Shareholding during the year No. of shares % of total Shares of the Company 03-Jan-18 -1,000 03-Jan-18 -1,000 03-Jan-18 -1,000 Shareholding at the beginning of the year -500 21-Dec-17 -1,000 26-Apr-17 -500 bonus/sweat equity etc): 27-Apr-17 -500 27-Apr-17 -250 27-Apr-17 -500 27-Apr-17 -500 27-Apr-17 -500 27-Apr-17 -250 10-May-17 -500 17-Jul-17 27,875 Bonus 12-Aug-17 15,000 ESOP exercise 21-Dec-17 -1,000 21-Dec-17 -500 of the Company Shares No. of % of total shares Loans excluding deposits Total Deposits Unsecured Secured loans crore LARSEN & TOUBRO 10558.37 9710.24 848.13 Indebtedness iii) interest accrued but not due * Total (i+ii+iii) ii) interest due but not paid 10558.37 9710.24 848.13 i) Principal Amount * Indebtedness Total crore Deposits deposits Unsecured Loans * financial year Additions ^ Reduction A. VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL: *Principal amount mentioned includes interest due but not paid and interest accrued but not due. ^ Addition during the financial year includes interest accrued but not due. 10035.83 525.17 Total (i+ii+iii) * iii) interest accrued but not due * ii) interest due but not paid 10035.83 525.17 i) Principal Amount * financial year Indebtedness at the end of the 325.59 (322.96) Net change Interest accrued but not due 30.76 1.12 Exchange gain/(loss) 5697.34 (5402.51) 16160.75 (16484.83) Change in indebtedness during the excluding Secured loans Indebtedness at the beginning of the financial year Indebtedness of the company including interest outstanding/accrued but not due for payment as on 31st March 2018 -25,000 22-Jan-18 -25,000 22-Jan-18 -25,000 22-Jan-18 -25,000 22-Jan-18 -25,000 23-Jan-18 -25,000 23-Jan-18 -42 At the end of the year 424,958 0.03 131 132 SI. No. Name of Director / KMP Shareholding at the beginning of the year No. of % of total shares Shares of the Company Cumulative Shareholding during the year Shares 03-Jan-18 of the Company 100 INDEBTEDNESS: 0.00 34710 At the End of the year 11570 0.00 23,140 0.00 150 At the End of the year At the beginning of the year 21/07/2017 Bonus 100 50 At the beginning of the year 17-Jul-17 0.00 31,650 At the End of the year Bonus 10,550 21,100 At the beginning of the year 17-Jul-17 0.00 150 At the End of the year Bonus 50 At the beginning of the year 17-Jul-17 21858.09 (21887.34) -1,000 -1,000 Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/ sweat equity etc): NARAYANAN KUMAR Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/ sweat equity etc): SANJEEV AGA LARSEN & TOUBRO Shareholding at the beginning of the year No. of shares % of total Shares Cumulative Shareholding during the year No. of shares AKHILESH GUPTA % of total of the Company of the Company At the beginning of the year 17-Jul-17 200 0.00 100 Bonus 17-Jan-18 7,380 At the End of the year 7,680 Shares 18 17 16 Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer/ bonus/ sweat equity etc): 17-Jul-17 13 ADIL ZAINULBHAI Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/ sweat equity etc): 75 Bonus 1,327 0.00 At the End of the year 225 0.00 At the beginning of the year 17-Jul-17 100 50 0.00 Bonus At the End of the year 150 0.00 SI. No. Name of Director / KMP 14 15 0.00 jointly with Life Insurance Corporation of India At the beginning of the year 17-Jul-17 500 Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/ sweat equity etc): NAINA LAL KIDWAI Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): 22 21 SUBRAMANIAN SARMA Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/ sweat equity etc): 20 AJAY SHANKAR 19 Name of Director / KMP N. HARIHARAN Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): No. 136 V. 135 0.00 150 0.00 150 0.00 4,500 At the End of the year Bonus SI. Shareholding at the beginning of the year No. of shares % of total Bonus At the End of the year 1,500 0.00 At the beginning of the year 17-Jul-17 3,000 1,500 Bonus Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): SUNITA SHARMA jointly with Life Insurance Corporation of India Da+B219:B221te wise Increase Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/ sweat equity etc): At the End of the year At the beginning of the year 100 17-Jul-17 At the End of the year THOMAS MATHEW T. Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/ sweat equity etc): 50 Bonus At the beginning of the year 17-Jul-17 No. of % of total shares during the year Cumulative Shareholding of the Company Shares 1,000 150 At the beginning of the year At the End of the year -2,000 At the End of the year 75,125 0.01 5 D. K. SEN At the beginning of the year 17-Jul-17 30,703 15,351 Bonus Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): 18-Jan-18 6 7 At the End of the year 46,054 0.00 At the beginning of the year 17-Jul-17 42,875 21,437 Bonus Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): J. D. PATIL Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): At the End of the year As on the date of appointment as director 17-Jul-17 M. V. SATISH -3,000 17-Jan-18 -1,000 04-Jan-18 -1,000 Date wise Increase / Decrease 04-Jan-18 -1,000 in Promoters Share holding 04-Jan-18 -1,000 during the year specifying the 04-Jan-18 -500 reasons for increase/decrease (e.g. allotment / transfer / 05-Jan-18 -1,000 08-Jan-18 bonus/ sweat equity etc): -1,000 08-Jan-18 -1,000 08-Jan-18 -1,000 08-Jan-18 -1,000 15-Jan-18 114,840 57,420 Bonus At the End of the year Bonus 10 11 12 Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/ sweat equity etc): M. DAMODARAN Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer/ bonus/ sweat equity etc): At the End of the year At the beginning of the year 17-Jul-17 VIKRAM SINGH MEHTA Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): SUSHOBHAN SARKER 1,125 0.00 150 555 75 Bonus At the End of the year 225 0.00 At the beginning of the year 885 17-Jul-17 442 Bonus 750 375 04-Jan-18 At the beginning of the year 17-Jul-17 9 64,312 0.00 172,260 0.01 133 134 SI. No. Name of Director / KMP of the Company Shareholding at the beginning of the year No. of % of total shares Shares Cumulative Shareholding during the year No. of % of total shares Shares of the Company 8 M. M. CHITALE Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): At the beginning of the year 17-Jul-17 1,629 814 Bonus At the End of the year 2,443 0.00 SUBODH BHARGAVA 50 31.88 10561.00 0.195 0.343 0.335 0.195 0.317 0.195 0.000 3.380 2 Other Non-Executive Directors Fee for attending board/ 0.023 0.077 0.316 0.023 committee meetings Commission # 2.500 0.263 0.038 0.033 2.834 Others, please specify - @ 0.015 0.015 Total (2) 2.538 0.015 0.138 0.340 0.277 0.407 [1] Independent Directors Fee for attending board/ 0.077 0.065 0.062 0.040 0.058 0.045 0.065 0.055 0.045 0.077 0.045 0.634 0.500 0.300 committee meetings 0.330 0.435 0.238 0.237 0.258 0.150 0.278 0.280 0.150 0.240 0.150 2.746 Others, please specify 0.000 Total (1) Commission 0.061 0.000 0.000 Total (B)=(1+2) (N. Hariharan) (b) Value of perquisites u/s 17(2) Income-tax Act, 1961 (c) Profits in lieu of salary under section 17(3) Income tax Act, 1961 2 Stock Option Not Applicable 3 Sweat Equity 4 Secretary Commission - others, specify... 5 Others (Contribution to Provident Fund & Superannuation Fund) Total 1.099 0.002 0.079 1.180 Not Applicable 2.63 - as % of profit Total CFO Company 2.538 0.407 0.500 0.300 0.277 0.340 0.316 0.195 0.061 0.343 0.335 0.195 0.317 0.195 0.048 2.987 0.048 6.367 Total Managerial Remuneration (A) + (B) Overall Ceiling as per 1,037.80 the Act # Payable to respective institutions they represent @This represents perquisite value of housing & medical REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD / MANAGER / WTD: SI. Particulars of Remuneration No. 1 Gross salary (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 crore Key Managerial Personnel CEO Naina Lal Sanjeev Aga Narayanan Arvind Gupta Amount Kidwai Kumar Sarma 100 Gupta 0.135 72.230 (c) Profits in lieu of salary under 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 section 17(3) Income tax Act, 1961 2 3.453 Stock Option 0.000 0.000 0.000 0.000 0.000 0.000 0.000 3 Sweat Equity 0.000 0.000 0.000 0.000 0.000 0.000 0.000 5.822 48.109* Sharma Mathew T 10561.00 REMUNERATION TO MANAGING DIRECTOR, WHOLE-TIME DIRECTORS AND/OR MANAGER: SI. Particulars of No. Remuneration AM NAIK SN SUBRAHMANYAN RAMAN Name of MD/WTD / Manager R SHANKAR SHAILENDRA ROY crore Total 14.376 D..K SEN M.V SATISH 1 Gross salary (a) Salary as per provisions contained in section 17(1) of 2.727 2.144 1.590 1.470 1.140 1.140 0.720 10.931 the Income-tax Act, 1961 | (b) Value of perquisites u/s 17(2) Income-tax Act, 1961 J. D. PATIL Amount 0.000 0.120 0.215 4 Ceiling as per the Act 3.950 217.738 943.46 * Perquisites include perquisite value of 47.982 crore in respect of stock options granted over the past several years by Larsen & Toubro Infotech Limited and L&T Technology Services Limited and exercised during the year. ** Retirement benefits include encashment of accumulated past service leave 19.381 crore, gratuity 55.038 crore and pension of 1.50 crore 137 138 B. C. crore 8.061 7.381 Sl. Particulars of Total No. Remuneration AM Naik M M Chitale Subodh Bhargava Damodaran Vikram Singh Sushobhan Mehta Adil Akhilesh Sunita Thomas Ajay Shankar Subrmanian 0.000 Sarker Name of Directors 12.075 REMUNERATION TO OTHER DIRECTORS: - as % of profit Commission 17.223 8.727 11.579 7.387 5.319 5.113 4.502 2.284 others, specify... 0.000 5 Others (Retirement Benefits, 44.911 Contribution to Provident Fund & 137.245 77.682** Total (A) | Superannuation Fund) 89.666 31.803 1.688 1.524 1.833 2.424 3.704 0.811 NIL Annexure 'G' to the Board Report 139 Appeal made, if any (give Details) Authority [RD/ NCLT/COURT] Penalty/ Punishment/ NIL fees imposed Compounding DIVIDEND DISTRIBUTION POLICY NIL INTRODUCTION QUANTUM OF DIVIDEND AND DISTRIBUTION Dividend payout in a particular year shall be determined after considering the operating and financial performance PURPOSE The purpose of this Policy is to regulate the process of dividend declaration and its pay-out by the Company which would ensure a regular dividend income for the shareholders and long term capital appreciation for all stakeholders of the Company. AUTHORITY This Policy has been adopted by the Board of Directors of Larsen & Toubro Limited ('the Company') at its Meeting held on 22nd November, 2016. The Policy shall also be displayed in the annual reports and also on the website of the Company. FORMS OF DIVIDENDS The Companies Act provides for two forms of Dividend: • Final Dividend The final dividend is paid once for the financial year after the annual accounts are prepared. The Board of Directors of the Company has the power to recommend the payment of final dividend to the shareholders for their approval at the general meeting of the Company. The declaration of final dividend shall be included in the ordinary business items that are required to be transacted at the Annual General Meeting. Interim Dividend 3.2. Policy for appointment and removal of Director, KMP and Senior Management This form of dividend can be declared by the Board of Directors one or more times in a financial year as may be deemed fit by it. The Board of Directors shall have the absolute power to declare interim dividend during the financial year, in line with this policy. The Board should consider declaring an interim dividend after finalization of quarterly/half yearly financial results. This would be in order to supplement the annual dividend or to reward shareholders in exceptional circumstances. Description As per Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, prescribed Listed Companies are required to frame a Dividend Distribution Policy. Details of Identify persons who are qualified to become Director and persons who may be appointed in Key Managerial and Senior Management positions in accordance with the criteria laid down in this policy. Section of the Companies Act of the Company and the cash requirement for financing the Company's future growth. In line with the past practice, the payout ratio is expected to grow in accordance with the profitable growth of the Company under normal circumstances. Recommend to the Board, appointment and removal of Director, KMP and Senior Management Personnel. Formulate the criteria for determining qualifications, positive attributes and independence of a director. The Committee shall: 3.1. Matters to be dealt with, perused and recommended to the Board by the Nomination and Remuneration Committee 3. ROLE OF COMMITTEE: 2.6. Senior Management Personnel means all members of management one level below the Executive Directors including the Chief Financial Officer and Company Secretary. Such other officer as may be prescribed. Senior Management Personnel designated as such by the Board; and Company Secretary; VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES: Type A. COMPANY Penalty Punishment Compounding B. DIRECTORS Penalty Punishment Compounding C. OTHER OFFICERS IN DEFAULT Penalty Punishment Compounding LARSEN & TOUBRO Brief DECLARATION OF DIVIDEND 2.1. Act means the Companies Act, 2013 or Companies Act, 1956 as may be applicable and Rules framed thereunder, as amended from time to time. 1) Current financial year's profit: Any other factor as deemed fit by the Board. RETAINED EARNINGS The portion of profits not distributed among the shareholders but retained and used in business are termed as retained earnings. It is also referred to as ploughing back of profit. The Company should ensure to strike the right balance between the quantum of dividend paid and amount of profits retained in the business for various purposes. These earnings may be utilized for internal financing of its various projects and for fixed as well as working capital. Thus the retained earnings shall be utilized for carrying out the main objectives of the Company and maintaining adequate liquidity levels. PARAMETERS THAT SHALL BE ADOPTED WITH REGARD TO VARIOUS CLASSES OF SHARE The Company does not have different classes of shares and follows the 'one share, one vote' principle. REVIEW & AMENDMENT The Policy shall be reviewed as and when required to ensure that it meets the objectives of the relevant legislation and remains effective. The Executive Management Committee has the right to change/amend the policy as may be expedient taking into account the law for the time being in force. 141 Annexure 'H' to the Board Report NOMINATION AND REMUNERATION POLICY The Board of Directors of Larsen & Toubro Limited ("the Company") had constituted the "Nomination and Remuneration Committee" which is in compliance with the requirements of the Companies Act, 2013 ("Act") and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("LODR"). 1. OBJECTIVE: Leverage profile and liabilities of the Company. The Nomination and Remuneration Committee and this Policy shall be in compliance with Section 178 of the Act read along with the applicable rules thereto and Regulation 19 of LODR. The Key Objectives of the Committee would be: 2. To identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal and shall specify the manner for effective evaluation of performance of Board, its Committees and individual directors to be carried out by the Board or the Nomination & Remuneration Committee or by an Independent External Agency and review its implementation and compliance; To formulate the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnel and other employees; To ensure that level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully; Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; Remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals; Devising a policy on Board diversity; DEFINITIONS: 3.2.1. Appointment criteria and qualifications 2.2. Board means Board of Directors of the Company. 2.3. Directors mean Directors of the Company. 2.4. Executive Directors means the Executive Chairman if any, Chief Executive Officer and Managing Director, Deputy Managing Director, if any and Whole-time Directors. 2.5. Key Managerial Personnel means • Chief Executive Officer or the Managing Director or the Manager; • Dividend shall be declared or paid only out of- Future Requirements: If a company foresees some profitable investment opportunities in near future including but not limited to Brand/ Business Acquisitions, Expansion/Modernization of existing businesses, Additional investments in subsidiaries/ associates of the Company, Fresh investments into external businesses, then it may decide for lower dividend payout and vice-versa. Liquidity Position: A company's liquidity position also determines the level of dividend. If a company does not have sufficient cash resources to make dividend payment, then it may reduce the amount of dividend pay-out. a) after providing for depreciation in accordance with law; b) after transferring to reserves such amount as may be prescribed or as may be otherwise considered appropriate by the Board at its discretion 2) The profits for any previous financial year(s) after providing for depreciation in accordance with law and remaining undistributed; or 3) out of 1) & 2) both. The circumstances under which shareholders may not expect dividend/when the dividend could not be declared by the Company shall include, but are not limited to, the following: a. Due to operation of any other law in force; b. Due to losses incurred by the Company and the Board considers it appropriate not to declare dividend for any particular year; C. d. • Due to any restrictions and covenants contained in any agreement as may be entered with the Lenders and External Factors: Legal/Statutory Provisions and Regulatory concern: The Board should keep in mind the restrictions imposed by Companies Act, any other applicable laws with regard to declaration and distribution of dividend. Further, any restrictions on payment of dividends by virtue of any regulation as may be applicable to the Company may also impact the declaration of dividend. 140 LARSEN & TOUBRO State of Economy: The Board will endeavor to retain larger part of profits to build up reserves to absorb future shocks in case of uncertain or recessionary economic conditions and in situation where the policy decisions of the Government have a bearing on or affect the business of the Company. Nature of Industry: The nature of industry in which a company is operating, influences the dividend decision. Like the industries with stable demand throughout the year are in a position to have stable earnings and thus declare stable dividends. Taxation Policy: The tax policy of a country also influences the dividend policy of a company. The rate of tax directly influences the amount of profits available to the Company for declaring dividends. Capital Markets: In case of unfavorable market conditions, Board may resort to a conservative dividend pay-out in order to conserve cash outflows and reduce the cost of raising funds through alternate resources. Internal Factors: Apart from the various external factors, the Board shall take into account various internal factors including the financial parameters while declaring dividend, which inter alia will include - • • Magnitude and Stability of Earnings: The extent of stability and magnitude of company's earnings will directly influence the dividend declaration. Thus, the dividend is directly linked with the availability of the earnings (including accumulated earnings) with the Company. Due to any default on part of the Company. FACTORS AFFECTING DIVIDEND DECLARATION: The Dividend pay-out decision of any company, depends upon certain external and internal factors- a) The Committee shall identify and ascertain the integrity, qualification, expertise and experience c) Commission: LARSEN & TOUBRO 10.5 Evaluating the performance of the Board members and Senior Management in the context of the Company's performance from business and compliance perspective; 10.3 Setting a formal and transparent procedure for selecting new Directors for appointment to the Board; 10.4 Developing a succession plan for the Board and Senior Management and regularly reviewing the plan; 10.2 Determining the appropriate size, diversity and composition of the Board; Non-Executive Directors receive a formal letter of appointment in accordance with the Guidelines provided under the Act; 10.1 Ensuring that on appointment to the Board, The duties of the Committee in relation to nomination matters include: 10. NOMINATION DUTIES Matters arising for determination at Committee meetings shall be decided by a majority of votes of Members present and voting and any such decision shall for all purposes be deemed a decision of the Committee. VOTING 9. The Company Secretary of the Company shall act as Secretary of the Committee. SECRETARY 8. 7.2 The Committee may invite such executives, as it considers appropriate, to be present at the meetings of the Committee. 7.1 A member of the Committee is not entitled to be present/participate in discussion when his or her own remuneration is discussed at a meeting or when his or her performance is being evaluated. COMMITTEE MEMBERS' INTERESTS 7. The meeting of the Committee shall be held atleast once in a year and at such regular intervals as may be required. 6. FREQUENCY OF MEETINGS 5.4 Chairperson of the Nomination and Remuneration Committee meeting could be present at the Annual General Meeting or may nominate some other member to answer the shareholders' queries. 5.3 In the absence of the Chairperson, the members of the Committee present at the meeting shall choose one amongst them to act as Chairperson. 5.2 Chairperson of the Company may be appointed as a member of the Committee but shall not be a Chairman of the Committee. 5.1 Chairperson of the Committee shall be an Independent Director. CHAIRPERSON 5. 10.6 Making recommendations to the Board concerning any matters relating to the continuation in office of any Director at any time including the suspension or termination of service of an Executive Director as an employee of the Company subject to the provision of the law and their service contract; 10.7 Delegating any of its powers to one or more of its members or the Secretary of the Committee; 10.8 Recommend any necessary changes to the Board; and 10.9 Considering any other matters, as may be requested by the Board. 145 Whole-time directors; 148 Some areas of public sector infrastructure capex have seen strong investment momentum and some large investment programs have been kicked off. The thrust of the Government on roads, conventional and metro railways, water management systems and irrigation projects, power generation facilities, power transmission & distribution, affordable housing, healthcare facilities, build out of smart Some positive effects have already started being felt through higher tax revenues and the gradual formalisation of the economy with its consequent widening of the tax base. This is likely to give the Central Government better wherewithal to allocate higher levels of funding for essential infrastructure projects. These investments are being supplemented by increased State Government spending, greater capex by financially strong PSUs and increased quantum of soft lending by bi-lateral and multi- lateral lending agencies. The domestic market had its fair share of upheavals in the financial year under review. A combination of deferral of award decisions and the implementation of long term reforms causing short term economic turbulence have led to a muted environment for project execution. For example, the introduction of GST from 1st July, 2017 caused disruption for a few quarters during which time businesses and Government agencies grappled with this new nation- wide taxation system. Other reform measures such as Demonetisation, RERA and the Insolvency & Bankruptcy Code have also impacted business momentum in the short term, but are expected to lead to sustained economic growth in the long run. Indian economy Analysis LARSEN & TOUBRO Ballard Estate, Mumbai - 400 001, INDIA. CIN: L99999MH1946PLC004768 Regd. Office: Larsen & Toubro Limited, L&T House, N. M. Marg From aerospace solutions that launch satellites, to defence equipment that delivers the decisive edge. Hydrocarbon projects that fuel growth, and smart city infrastructure that enhances urban living. From managing our most precious resource, water, to powering solutions that light up lives. From harnessing the Internet of Things, to creating majestic gateways to the world. We make the things that make India proud. We make the things that make India proud 4.4 Term of the Committee shall be continued unless terminated by the Board of Directors. www.Larsentoubro.com The Policy shall be reviewed as and when required to ensure that it meets the objectives of the relevant legislation and remains effective. The Nomination and Remuneration Committee has the right to change/amend the policy as may be expedient taking into account the law for the time being in force. 13. REVIEW & AMENDMENT: Proceedings of all meetings must be minuted and signed by the Chairman of the Committee at the subsequent meeting. Minutes of the Committee meetings will be tabled at the subsequent Board and Committee meeting. 12. MINUTES OF NOMINATION AND REMUNERATION COMMITTEE MEETING 11.5 Review of professional indemnity and liability insurance for Directors and senior management. 11.4 To consider any other matters as may be requested by the Board. 11.3 To delegate any of its powers to one or more of its members or the Secretary of the Committee. between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the Company. 11.2 To ensure the remuneration maintains a balance 11.1 To consider and determine the Remuneration Policy, based on the performance and also bearing in mind that the remuneration is reasonable and sufficient to attract retain and motivate members of the Board and such other factors as the Committee shall deem appropriate and all elements of the remuneration of the members of the Board. The duties of the Committee in relation to remuneration matters include: 11. REMUNERATION DUTIES 146 142 4.3 Membership of the Committee shall be disclosed in the Annual Report. MEMBERSHIP The Director, KMP and Senior Management Personnel shall retire as per the applicable provisions of the Act or the prevailing policy of the Company, as applicable. The Board/Committee will have the discretion to retain the Director, KMP, Senior Management Personnel in the same position/ remuneration or otherwise even Due to reasons for any disqualification mentioned in the Act or under any other applicable Act, rules and regulations thereunder, the Committee may recommend, to the Board with reasons recorded in writing, removal of a Director, KMP or Senior Management Personnel subject to the provisions and compliance of the said Act, rules and regulations. 3.2.5. Retirement 3.2.4. Removal Previous years observations and actions taken Proposed actions based on current year's observations C. b. a. The Company may disclose in the Annual Report: Observation of the Board Evaluation for the year under review The Committee shall by itself or through the Board or an independent external agency carry out evaluation of performance of the Board/Committee(s), Individual Directors and Chairman at regular interval (yearly) and review implementation and compliance. 3.2.3. Evaluation A person shall not be appointed as a Director in case he is a Director in more than eight listed companies after April 1, 2019 and seven listed companies after April 1, 2020. For the purpose of this clause listed companies would mean only those companies whose equity shares are listed. c) Maximum Number of Directorships: At the time of appointment of Independent Director it should be ensured that number of Boards on which such Independent Director serves is restricted to seven listed companies as an Independent Director and three listed companies as an Independent Director in case such person is serving as a Whole-time Director of a listed company or such other number as may be prescribed under the Act. Company in any other capacity, either directly or indirectly. No Independent Director shall hold office for more than two consecutive terms, but such Independent Director shall be eligible for appointment after expiry of three years of ceasing to become an Independent Director. Provided that an Independent Director shall not, during the said period of three years, be appointed in or be associated with the An Independent Director shall hold office for a term up to five consecutive years on the Board of the Company and will be eligible for re-appointment on passing of a special resolution by the Company and disclosure of such appointment in the Board's report. The rationale for such re-appointment shall also be provided in the Notice to Shareholders proposing such re-appointment. b) Independent Director: The Company shall appoint or re-appoint any person as its Executive Director for a term not exceeding five years at a time. No re-appointment shall be made earlier than one year before the expiry of term. Executive Directors: a) 3.2.2. Term/Tenure The Company shall not appoint or continue the employment of any person as Director who has attained the retirement age fixed by the Board or as approved by the Shareholders pursuant to the requirement of the Act/LODR. c) b) A person should possess adequate qualification, expertise and experience for the position he / she is considered for appointment. The Committee has discretion to decide whether qualification, expertise and experience possessed by a person is sufficient / satisfactory for the concerned position. of the person for appointment as Director and recommend to the Board his/her appointment. Appointment and Remuneration of KMP or Senior Management Personnel is in accordance with the HR Policy of the Company. The Company's policy is committed to acquire, develop and retain a pool of high calibre talent, establish systems and practises for maintaining transparency, fairness and equity and provides for payment of competitive pay packages matching industry standards. 143 after attaining the retirement age, for the benefit of the Company. 3.3. Policy relating to the Remuneration of Executive Director, KMP and Senior Management Personnel 3.3.1. General: a) The remuneration / compensation / commission etc. to the Executive Directors will be determined by the Committee and recommended to the Board for approval. The remuneration / compensation / commission etc. shall be subject to the approval of the shareholders of the Company and Central Government, wherever required. An Independent Director shall not be entitled to any Stock option of the Company. Non- Executive Directors are eligible for Stock options in accordance with Schemes formulated by the Company. Nominee Directors are not entitled to stock options as per their respective nomination letters received by the Company. d) Stock Options: Commission may be paid within the monetary limit approved by shareholders, subject to the limit not exceeding 1% of the profits of the Company computed as per the applicable provisions of the Act. The Board of Directors will fix the Commission payable to Directors on the basis of number of Board/Committee meetings attended during the year and Chairmanships of Committees. 4. LARSEN & TOUBRO 144 The Non-Executive / Independent Director may receive remuneration by way of fees for attending meetings of Board or Committee thereof. Provided that the amount of such fees shall not exceed Rupees One Lac per meeting of the Board or Committee or such amount as may be prescribed by the Central Government from time to time. b) Sitting Fees: Act. The remuneration / commission shall be fixed as per the limits and conditions mentioned in the Articles of Association of the Company and the a) Remuneration / Commission: 3.3.3. Remuneration to Non-Executive / Independent Director: 4.1 The Committee shall consist of a minimum 3 non- executive directors, half of them being independent. 4.2 Minimum two (2) members or one-third of the members whichever is greater including atleast one Independent Director shall constitute a quorum for the Committee meeting. If any Chairman/Managing Director/Whole-time Directors draws or receives, directly or indirectly by way of remuneration any such sums in excess of the limits prescribed under the Act or without the prior sanction of the Central Government, where required, he/she shall refund such sums to the Company and until such sum is refunded, hold it in trust for the Company. The Company shall not waive recovery of such sum refundable to it unless permitted by the Central Government. d) Stock Options in Subsidiary Companies: Executive Directors may be granted stock options in subsidiary companies as per their Schemes and after taking necessary approvals. Perquisites may be added to the remuneration of concerned directors and considered in the limits applicable to the Company. If, in any financial year, the Company has no profits or its profits are inadequate, the Company shall pay remuneration to its Executive Directors in accordance with the provisions of Schedule V of the Act and if it is not able to comply with such provisions, with the previous approval of the Central Government. b) Minimum Remuneration: including, employer's contribution to P.F, pension scheme, medical expenses, club fees etc. shall be decided and approved by the Board/ the Person authorized by the Board on the recommendation of the Committee and approved by the shareholders and Central Government, wherever required. The Executive Directors/ KMP and Senior Management Personnel shall be eligible for a monthly remuneration as may be approved by the Board on the recommendation of the Committee or policy of the Company. In case of remuneration to Directors, the breakup of the pay scale and quantum of perquisites a) Fixed pay: 3.3.2. Remuneration to Executive directors/ KMP and Senior Management Personnel: Remuneration of other KMP or Senior Management Personnel, in any form, shall be as per the policy of the Company based on the grade structure in the Company. e) d) Where any insurance is taken by the Company on behalf of its Executive Directors, Chief Executive Officer, Chief Financial Officer, the Company Secretary and any other employees for indemnifying them against any liability, the premium paid on such insurance shall not be treated as part of the remuneration payable to any such personnel. Provided that if such person is proved to be guilty, the premium paid on such insurance shall be treated as part of the remuneration. compensation structure may be recommended by the Committee to the Board which should be within the limits approved by the Shareholders in the case of Executive Directors. c) Increments to the existing remuneration/ b) The remuneration and commission to be paid to the Executive Directors shall be in accordance with the percentage / limits / conditions laid down in the Articles of Association of the Company and as per the provisions of the Act. c) Provisions for excess remuneration: Management Discussion and • Chief Financial Officer; Six-lane Access Controlled Expressway from Unnao to Lucknow Railway electrification of 4,100 km surpassing their earlier annual target of 4,000 km in 2017-18. Sectoral Change: a) Roads: ⚫ NHAI has taken a decision to have a mix of BOT/EPC/ HAM projects in the ratio of 10:30:60 which will impact our addressable market. b) Railways: Change in Metro Policy. Public-Private Partnership (PPP) component is mandatory for availing central assistance for new metro projects. Projects being implemented on EPC basis - a paradigm shift from conventional BOQ methods. High Speed Rail Projects on fast-track tendering to commence in FY 2018-19. Policy Initiatives: a) Roads: • The National Highway network is to be expanded from 96,000 km to 200,000 km over the next 5 years. Railway Signaling & Telecommunication 154 LARSEN & TOUBRO • • New track-laying at a record scale of 3,100 km/yr in 2017-18 against average of 2,045 km/yr in 2009-14 • Track renewal at record high of 4,405 km for the year 2017-18. The renewal of tracks has been the highest ever, which exceeded the target of 4,389 km (revised to 4,400 km) for the year 2017-18. b) Railways: be arranged for by the contractor and recovered through annuities. QUATREBO QUATREBO BORHES QURTHEBO QUATREBO 153 The business has been successful in expanding its customer base during the year by securing various orders for construction of highways, including 8L of Dwarka Expressway (8.76 Km, Package IV), Haryana from NHAI, 6L of Mumbai-Vadodara Expressway (23.7 km), Maharashtra, Amaravati Capital City Development project. Expressways are finally seeing good traction in Northern and Western India. During the year, the Kanaktora- Jharsuguda Road Project - a 66.9 km, 2-lane highway in Odisha - was completed. Sectoral Performance: a) Roads: • Construction of highways hit 27 km/day in 2017-18, clocking a 20% growth over the 22.5 km/day in the previous fiscal year. ⚫The Financial Year 2017-18 yielded projects worth over 1,220 billion. In the last 5 years, the average length of road projects awarded by NHAI was 2,860 km compared to 7,400 km in FY 17-18. This is a record accomplishment by National Highways Authority of India since its inception in 1995. • The year 2017-18 saw a significant number of smaller competitors emerging in the market, consequently intensifying the competition. • There has been a change in the modus operandi of awarding projects, i.e from EPC mode to hybrid annuity mode, where the Government brings in 40% of the project cost during construction period and the rest is to A completed section of Western Dedicated Freight Corridor - Civil & Trackwork Business environment: • The second blueprint road development programme has been launched this year vide the Bharatmala Pariyojana. b) Railways: • Mission Raftaar focusing on enhancing network speed on the Golden Quadrilateral – ₹ 18,000 crore sanctioned in budget 2018 for 2 corridors. • NEEV - Strengthening the base of the organization pyramid A total of 780 participants were covered through the above programmes in FY 17-18. The business aggressively took up the digitalization journey by connecting people, machines and materials in various ways, at site and offices, to create more efficiency and transparency in the processes to gain tangible and intangible benefits. Key digital initiatives implemented in 2017-18 include: Project progress monitoring through Procube • Plant and machinery utilization monitoring through Asset Insight. • 155 Geospatial solutions have been deployed using drones, Lidar and other GIS technologies to survey, stockpile measurement, obstruction monitoring on Geo map. • Mobile app based solution to digitize several safety processes to make them paperless. Quality Chat Bot QT, which serves as ready reckoner for highway engineering. Digital solutions, in general, are helping the organization to manage operations more efficiently. More solutions will be in place in 2018-19 to extract benefits from investment in technologies. Outlook RREC business Rural development city infrastructure, and tying up of energy security through stronger oil & gas infrastructure has given an impetus to domestic awards during the year. • Grader automation - a niche solution deployed, involving installing loT devices on graders to make them semi- autonomous, increasing grading efficiency. An integrated Light Rail Transit System, Mauritius Garden Reach Flyover at Kolkata GURUKUL - Mentoring by senior leaders. - • Three New Dedicated Freight Corridors to be implemented in next 2-3 years. • Electrification of the remaining 25,000 RKM by 2021. • New projects to be implemented through State-Centre JV. Safety Awards: During the year, the business has won 14 international safety awards: 1 Distinction, 8 Merit and 5 Pass from the British Safety Council, 2 prestigious safety awards from National Safety Council (NSC), India and also 1 gold award from the American Society of Safety Engineers. WDFC CTP 1 - 2 Railway project has won the prestigious 'Golden Trophy Award' Sarvashreshtha Suraksha Puraskar in Construction Segment for the year 2017. This singular distinction is the highest honour instituted by the National Safety Council of India. The Railway's business has won the Gold Trophy twice in the last 3 years. 7.4 km Elevated Corridor at Bhatnagar Kolkata Despite all these accolades, challenges continue to remain in creating a high level of safety awareness across linear projects spanning hundreds of kilometres. On the execution front, the mega Civil & Track Projects in the Dedicated Freight Corridor continue to speed up with the usage of the new track construction machine and the availability of continuous work front. Recently, high-speed trial runs for a major section of Tracks were successfully conducted in the Ateli-Phulera section of the Western Dedicated Freight Corridor. Also, the expanse in WDFC Electrification project (3145 track km), necessitate faster execution techniques. This involves cylindrical foundation for the mast implantation through heavy specialized augering machines, mast- grabber-cum- multi-axis manipulator and overhead wiring through state-of-the-art automatic wiring train. L&T's Railway business is at the forefront in implementing innovative digital initiatives which are specific to linear projects. Prominent among them are 'Central Control System on Track Vehicles Movement' which not only provides real-time tracking of machines, but also track laying / completion status, collision warning alerts and approaching LC gates alerts to both driver and LC gate operator. The business offers a platform for development and engagement of employees across various levels such as: • LEAP (Leadership Excellence Accelerator Program) ⚫EYS (Engineer Your Success) – Developing Planning Engineers • FULCRUM - Competency Development Programme across all levels. . Significant Initiatives In the area of Mass Transit Systems, L&T's Railway SBG continues to grow in the domain of 'Ballastless Tracks' and 'Traction System for Metros' It has won projects for ballastless tracks for the Ahmedabad Metro and for power system installation and SCADA work in Mumbai Metro Line 3. The Railway Strategic Business has been awarded a large EPC Civil, Structure and Track project in the Eastern Dedicated Freight Corridor, involving construction of 222 RKM of a single-track corridor from Khurja to Pilkhani in Uttar Pradesh. The business is the first Indian entity to receive an order for delivery of a complete transit system abroad; it secured a design-&-build project for a Mass Transit System in Mauritius, an opportunity to deliver from track to train. The business has won the prestigious contract for construction of the New South Parallel Runway, apron and associated works at Kempegowda International Airport, Bengaluru on EPC basis. Incredib LARSEN & TOUBRO Buildings and Factories Overview: L&T's Buildings & Factories (B&F) business is known for its capability and expertise in executing airports, hospitals, stadiums, retail spaces, educational institutions, IT parks, office buildings, datacentres, elite residential buildings, high-rise structures, mass housing complexes, factory structures, cement plants and industrial warehouses on an EPC (Engineering, Procurement and Construction) basis. L&T has a track record in successfully addressing tough challenges, and has the unique capability to offer total solutions including 'Design-Build-Commission' expertise, advanced systems like Building Information Modules, procurement from global supply chain and unrivalled project management expertise. Dedicated engineering design centres, competency cells, advanced formwork systems, mechanized project execution, wide network of consultants and vendors, digitized project control and a talented pool of employees help the business to maintain a leadership position, retain key customers, enter new geographies and secure major orders. Construction excellence - coupled with technology, experience and expertise gained over several decades - has helped the business to continue to be one of the premium contractors in the industry. The year saw receipt of some breakthrough orders from prestigious clients. Major orders were secured 150 from esteemed customers for the construction of convention centres in New Delhi and Jharkhand, construction of AIIMS hospital in 2 locations, a store for a retail major in Navi Mumbai and office space for a renowned developer. • Metro facility at Hyderabad • Convention Centre in West Bengal • Medical colleges for the Govt. of Odisha • Kannur Airport · High-rise residential towers in various parts of the country Facility for Asian Paints in Mysore Key projects commissioned by the business during the year include: Business Environment Review Indian International Convention Centre, Delhi Finally, though the sharp rise in crude prices is a double edged sword, this raises expectations for the oil and gas sector and infrastructure development in the middle East which would auger well for the construction sector. Private sector investments have remained muted and are expected to take some more time before a wholesome revival can be seen across sectors like Infrastructure PPP, industrial capex, consumption driven capex and real estate growth. The growing impact of non-performing loans on the balance sheets of banks continues to impact the credit growth of the banking system. Global economic scenario International markets have witnessed noticeable volatility, triggered by geo-political events, significant movements in currency and commodities, protectionist policies including tariff barriers, a prolonged bout of low oil prices, and constrained fiscal positions of oil producing nations. The recent hardening of oil prices is likely to now give better leeway to policy makers in GCC countries to allocate increased outlay on essential infrastructure. The Company has also been reducing its dependence on business from the Middle East and is focusing on expanding business in East & North Africa Region (including Algeria and Egypt) as well as East Asian countries. Focus on long term profitable growth The ongoing initiatives currently under way include a focus on digitalization, strengthening execution and operational efficiency, unlocking business value, better asset utilisation, judicious use of working capital, business portfolio rationalisation and higher shareholder payouts are enabling the company to perform well on key parameters and improve Returns on Equity. 149 Infrastructure Business Artist's impression of proposed Chhatrapati Shivaji Maharaj Memorial Statue, Mumbai Infrastructure Business Scenario Infrastructure in India has come a long way with consolidation in the last 2 years (i.e.) 2015 – 2017. Order awards especially from the Government including both State and Central have further triggered the momentum in the current year (2018), which is expected to drive robust topline growth of the construction sector in the coming years, given the conversion cycle. Furthermore, Budget 2018-19 is a pragmatic effort, fine balancing the requirement of fiscal rectitude while keeping in focus the need to connect the missing links in infrastructure and farm sector development. The budget has reiterated the need for infrastructure investments as the 'sine qua non' for sustained growth with a requirement of 50 lakh crore, which has to come partly from the the Government but importantly through 'crowding in' of investments from the private sector. Much stress has been laid on urbanization through adoption of smart cities and smart infrastructure and construction of large linear infrastructure projects in transportation like 'Bharat Mala', aviation and ports. More importantly, the attendant structural reforms through the adoption of the IBC and clear emphasis on recapitalization of the banking system and strategic disinvestment targets reflected the long term commitment of the Government. Such incentives will release risk capital, lower risk averseness of the financial sector and lead to the upturn of the private capex cycle. Global Construction Sector The global infrastructure segment is more buoyant than it has been for the last few years and the sentiment is positive. Global construction stepped into its stride in 2017 as the economic backdrop brightened and boosted optimism. The USA is enjoying rapid economic growth, European markets are catching up and China continues to surprise. IMF forecasts global GDP to increase by 3.9 percent in 2018. The construction sector has a strong correlation with economic growth. Construction's share of the economy expands in greater proportion when GDP rises above a moderate rate. Increasing construction activity around the globe is expected to drive with global growth gaining momentum and more importantly developed economies still accounting for about half of global construction. Indian Construction Sector LARSEN & TOUBRO The past two years have been very challenging for the construction industry. The customer base of the business showed a clear shift towards Government clients, as the private sector deferred their investment plans due to uncertainties caused by various economic developments. Though RERA and GST were positives for the industrial growth, the sudden implementation of these policies brought India's economy to a standstill for a few months. The first half of the financial year was quite challenging for the business, which has slowly stabilized, progressing towards healthy GDP growth. ITC Colombo ICC towers, Mumbai 152 Motera Cricket Stadium, Gujarat WBHIDCO-Convention Centre at Kolkata LARSEN & TOUBRO • India is experiencing much growth in medical tourism, and the industry is expected to double its size by end 2018. • The Government has provided infrastructure status to Affordable Housing. The relaxation of FDI in real estate will steadily boost investment in this sector. Airport traffic growth in the country will necessitate immediate requirements of airport expansions within the country. In the international arena, Bangladesh and the GCC offer promising opportunities. The crude oil price is on a rising trend. This is a healthy sign for the GCC's economy and will boost revival of stalled investment plans. Overall, the environment is promising, yet challenging, with a long process duration and increased competition. Transportation Infrastructure Overview: The Transportation Infrastructure business is a well-diversified business in terms of its product range and geography of operations. The business offers its services in the fields of Roads, Runways (Airside Infrastructure) & Elevated Corridors (RREC), railways (mainline and mass transit systems) and international infrastructure. L&T's Transportation Infrastructure business has a presence across India, East Africa and various GCC countries. The business leverages its vast experience in Project Management, Engineering Design & Construction Management to achieve operational efficiency. It has Engineering Design Centres in Mumbai, Faridabad and Chennai and Offshore Engineering Centre in Mumbai, besides Area Offices in India/ GCC countries. In addition, it has a competency development centre at Kancheepuram, and undertakes workmen training at L&T's Construction Skills Training Institute, Ahmedabad. Over the years, the business has been fuelling its topline with the help of a robust order book. L&T's Buildings & Factories business is a proven player in the construction industry, with an exemplary record of handling major design-and-build projects and executing them within stringent timelines. Most of the airport projects that were deferred during the last year have started showing positive movement this year. are: Outlook Orient Cement project at Chittapur in Hyderabad TCS Customer Care Centre, Chennai 151 The IT sector in India remained sluggish. The Government has been active in implementing various health care schemes and establishing hospitals. On the whole, the business scenario has been better than the previous year's. The Qatar embargo had some impact on the ongoing jobs. There were no major orders from the GCC, as the economy is reviving, with crude oil prices stabilizing after a steep fall. Despite uncertain market conditions, the Buildings & Factories business has managed to win major orders and has continued to maintain its leadership position in the industry. Initiatives With expected GDP growth between 7.0 to 7.8% and with Government's continued focus on reforms, improved World Bank ranking for 'Doing Business' and Moody's rating upgrade is expected to lift investor sentiment and accelerate FDI flows in long-term. Some of the tailwinds Apart from continuing its focus on technological advancements and R&D, the business has also introduced major initiatives with the objective of strengthening its customer portfolio, steadying business growth, and expanding into emerging markets. Key moves have been taken to strengthen the organization and follow a focused approach towards projects that complement our strengths. Various digital initiatives that were introduced last year have been successfully implemented, and are operational across all sites of the business. Value engineering, effective procurement and supply chain management, operational excellence, mechanized execution and innovative construction methodologies have improved project cycle times, enhanced profitability and delivered quality. The business is associated with leading universities and industry experts, pioneering use of Robotics and 3D printing in construction. various training and awareness programmes throughout the year. Various initiatives have been taken up to digitally monitor, record and review all safety-related aspects at site. Awards & Recognitions For the second time in a row, the business has been awarded the prestigious 'Sword of Honour' from the British Safety Council. 1. B&F received three British Sword of Honour awards and a five star certification from the British Safety Council 2. Ten projects won the Gold Awards from The Royal Society For Prevention of Accidents (ROSPA) 3. 16 projects were awarded by the National Safety Council. 4. Indian Building Congress award for precast initiatives 5. Outstanding Contribution in Commercial Project award from EPC World 6. Two awards for 'Outstanding Concrete Structure' from Indian Concrete Institute and Two Construction Week India Awards Safety at work is of utmost importance to L&T's Buildings & Factories business, and the focus continues by organizing Private sector investments The Government has also been focusing on developing core infrastructure in rural areas, mainly focused on roads, power availability to rural households through intensive electrification, irrigation of cultivable land and direct transfer of subsidies to families in the BPL segment through the expanding base of Jan Dhan Bank Accounts linked with Aadhar. Considerable headway has been made in all these areas and millions of rural people have been lifted out of the 'BPL zone' over the last few years. Al Batinah Expressway (Package 4), Oman The business is exploring opportunities in main line railway funded by an Indian Line of Credit and multilateral agencies in select countries of South Asia (Sri Lanka and Bangladesh) and the African continent. from the Indian government or from other bi-lateral/ multilateral agencies such as JICA. Kannur International Airport Runway - Growth in the region is expected, assuming a moderation of geopolitical tensions and a modest rise in oil prices. GCC economies are anticipated to lead stronger growth in the region, supported by easing fiscal adjustment, Tendering of mainline railway projects in Middle East is likely to resume. Having been part of a major urban transit system in Riyadh - which has progressed significantly – the business is gearing up to address these upcoming opportunities as well. Further infrastructure investment (such as the UAE Expo 2020) and reforms to promote non-oil sector activity are expected to offer opportunities. Internationally, the outlook on the Middle East construction industry is improving rapidly with the uptick in oil prices since mid-2017. Besides mainline railways, the opportunities in the Mass Transit Segment continue to be driven by Tier 2 Cities and 'Extension lines' in large metros. Leveraging its overseas experience, the business is advocating the LRT solution on an EPC turnkey basis for cities like Vijayawada, Indore, Kozhikode and Thiruvananthapuram. Apart from the high-speed project, conventional projects of the Indian Railways continue to get a big thrust, backed by strong Institutional funders like LIC. These include 25,000 km of electrification to be completed in 4 years under the banner of 'Mission Electrification'. Also, the capacity augmentation projects of track doubling will involve construction of 17,000 km of additional tracks. The business intends to participate in a major portion of these projects through EPC tendering. LARSEN & TOUBRO The business is also exploring opportunities in new geographies such as Eastern Africa and CIS. It has already started bidding for tenders for projects funded by Indian LOC and AfDB in Mozambique and Zambia, and has received prequalification for ADB- funded EPC projects in Azerbaijan. 156 The high-speed rail project is the next big-ticket opportunity after the dedicated freight corridor projects. While the pipeline of projects from Western and Eastern Dedicated Freight Corridor is concluding, the business is positively looking at the start of the bidding process for the 508 km Mumbai-Ahmedabad High Speed Rail Corridor (MAHSR). With the enhanced value of the overall project at ₹1,08,000 crore, L&T's accessible value stands at 59,000 crore, comprising packages for viaducts, undersea tunnel(s), stations, maintenance depots, track, electrification and signalling. L&T's Railway business will focus on track, electrification and signalling & telecommunications. 1.46 lakh crore for FY 18-19 – an increase over last year's outlay of 1.31 lakh crore. Indian Railways are planning the highest outlay of Railway Business orders for 17,055 km highways and 9,829 km constructed. - The Ministry has also set targets of awarding orders of 20,000 km of National Highways and constructing a total of 16,420 km in 2018-19 up from last year's award of The Government aims to build 45 km of roads per day financial year 2019, an increase from the daily average of almost 27 km achieved last year. As the road sector is opening up, the Government aims to spend close to 7 lakh crore over the next five years to develop 83,677 km of roads including Bharat Mala Pariyojana worth 5.4 lakh crore. Delhi Agra Highway Heavy Civil Infrastructure The business also has focus on the neighbouring geographies, with projects having secured funding either L&T's Heavy Civil Infrastructure business undertakes Design, Engineering and Construction of projects in the crucial economic segments of Metros, Nuclear, Special Bridges, Hydel, Ports, Tunnels and Defence. The business has strong presence in India, Middle East, Bhutan and Bangladesh. The goal of the business is to become a one-stop total infrastructure solutions provider to both its domestic and international customers. The in-house design strength encompassing latest technologies such as BIM (Building Information Modelling) and its unique Construction Methodology Cell give the business a clear edge over its competitors and helps it serve customers from concept to commissioning. Ta 5+ 158 Hyderabad Metro Rail - One of the many metro projects being executed by L&T L&T's Heavy Civil Infra is well equipped and prepared to offer its comprehensive range of services and expertise to meet these very specific needs. L&T Construction offers single-point EPC solutions from concept to commissioning in the form of infrastructure facilities for Defence bases, The Indian Defence sector is a strategically important sector with very specific needs. The Ministry of Defence has identified an urgent need to upgrade the country's defence infrastructure in order to maintain the readiness of country's defence forces and to prepare it for future challenges. Overview: • Elevated metro station with expertise in spine beam concept (lean). Underground station construction using top-down and bottom-up approaches Underground tunnel construction using NATM (New Austrian Tunnelling Method), cut-and-cover and TBM (Tunnel Boring Machine) methods • Elevated viaduct construction using segmental, U-trough, I-girder methods and balanced cantilever construction Defence Areas of Expertise -: Lucknow Metro systems built by L&T were inaugurated and dedicated to the country by honourable Prime Minister Mr. Narendra Modi (Hyderabad & Kochi) and Chief Minister Mr. Adityanath Yogi of Uttar Pradesh (Lucknow). At present, L&T is executing as many as 12 projects across 9 cities in 4 countries, including the Riyadh and Doha Metros. L&T's Heavy Civil Infrastructure business offers extensive end-to-end engineering and construction services for elevated and underground metros. L&T is one of the pioneers of Metro construction in India, with the first venture being the Delhi Metro project. Since then, the business has emerged as the prominent builder of metro systems in the country, having constructed 143 km of viaducts, 43 km of twin tunnels and 65 stations. In the current year, the prestigious Hyderabad, Kochi and Metros Heavy Civil Infra has always focussed on its customers' needs with the aim of optimizing their value chain and providing excellent services, to increase their productivity and competitiveness. The business focuses on adaptability to adjust to market shifts and to leverage the advantages offered by digital technology in order to further refine organizational processes and technical prowess and move further ahead of its competitors. The business turned in a very good performance in the current year despite challenging market conditions. The year was marked by receipt of multiple big orders, with a major order from MMRDA for the construction of the Mumbai Trans Harbour Link (MTHL). Infrastructure development is a key component in empowering a nation's economic rise by improving the efficiency of production, transportation, and communication. The availability and quality of infrastructure in a region positively influences domestic firms' investment decisions and enhances the region's economic attractiveness to foreign investors. Business Environment 157 166 LARSEN & TOUBRO Prioritization of spending / budgetary allocation, friction between Qatar and other Gulf countries, the slowdown in Oman, and related delays in project finalization are potential risks. The business is concentrating on key African economies that have a clear road map to build transmission and distribution networks to meet increasing demand. Grid strengthening, regional interconnection and rural electrification opportunities are being pursued in select countries. Renewable generation is another area that holds potential. Having established a creditable track record and subcontractor/vendor ecosystem, the business is expected to significantly scale up under the right conditions. Overview: The overall outlook for the PT&D sector remains promising on both the domestic and the international fronts. The business looks forward to consolidating its position in established markets and gain significantly in new growth areas, ably supported by its initiatives on cost leadership and delivery excellence. Water & Effluent Treatment 1.1 billion people worldwide lack access to water and 2.4 billion people are challenged by inadequate sanitation. Many of the water systems that keep ecosystems thriving and feed the growing human population have become stressed. Rivers, lakes and aquifers are drying up or becoming too polluted to use. More than half the world's wetlands have disappeared. Climate change is altering patterns of weather and water around the world, causing shortages and droughts in some areas and floods in others. At the current consumption rate, it is pegged that two-thirds of the world's population may face water shortages by 2025. 275 kV Air Insulated Substation at Lambir, Malaysia The rising power demand in ASEAN region paves the way for significant investments in grid interconnections, grid development and strengthening. In addition, an interconnected ASEAN power grid is beneficial in many ways such as generation - demand balancing and renewable integration. With increasing share in Thailand and Malaysia, the business expects to exploit potential in Myanmar and other countries in the region. Input costs are bound to increase with the introduction of VAT and removal of subsidies on fuel, power and water. However, these will have a similar impact on all the players. 160 rooftop segment looks positive. To harness solar power for rural India, the Government of India has formulated Kisan Urja Suraksha evam Utthaan Mahabhiyan (KUSUM) scheme, which aims at solarizing the agriculture sector with ubiquitous use of solar power for tube wells and lift irrigation projects. Emergent areas like floatovoltaics hold promise. With upcoming state solar policies focusing on rooftop projects with net metering schemes, the prospects for the The solar power market is poised to remain upbeat, with yearly solar capacity additions pursuing an upward trajectory. The Private Power Purchase Agreement (PPA) market in select states will pick up based on encouraging open access policies and growing solar power viability. Clarity emerging on GST and duties will help the sector immensely. Advanced Battery Energy Storage Solutions will see a rise due to grid stability requirements and for electrifying rural households. System strengthening in state utilities will provide a major impetus to transmission line prospects. Several interstate and intrastate transmission lines are expected to go through the Tariff Based Competitive Bidding route. In certain states, capacity enhancement using the already-existing corridor may provide opportunities as it eliminates the need for fresh acquisition of right-of-way, thereby reducing costs and saving time. The next phase of green energy corridors is on the anvil. Substantial activity with many prospects is evident in the SAARC countries viz. Bangladesh and Nepal, as they are coming up with several high-value prospects. Apart from the domestic market, the business is foreseeing the pipeline of opportunities from SAARC countries like Bangladesh, Nepal etc., which are funded by international funding agencies such as JICA, ADB, ISDB, etc. several states and the availability of funding will remain key determinants. 165 Restructured Accelerated Power Development & Reforms Programme, Varanasi Microgrid Project for Rural Electrification in Bihar The increasing cost of land acquisition related delays have led power grid/State utilities to increasingly opt for GIS substations due to the small footprint they occupy. As the power transmission / transformation capacities to cater to the growing demand of urban centres increase, new opportunities will arise for EHV (Extra High Voltage) cabling projects in large cities keeping in view of the right-of-way, aesthetics and Operation & Maintenance aspects. The much-need impetus is expected to be provided by power quality improvement projects such as STATCOM, new clientele from TBCB (Tariff Based Competitive Bidding) players, state utilities strengthening their networks with funding from multilateral funding agencies, and infrastructure projects like metros and airports etc. The financial health of state utilities, the political situation in To cater to these various needs, L&T Construction's Water & Effluent Treatment business segment has enhanced its process knowhow and detailed engineering capabilities across all streams of Water and Wastewater business in India, Sri Lanka, the Middle East and Africa. Its formidable in-house engineering capabilities, coupled with impeccable project management skills, has put this segment much ahead of the competition. In the Middle East, the business is cautiously optimistic in its outlook. The stable recovery of the oil price is expected to boost investments in the T&D sector. Infrastructure development will continue to be driven by mega events like Dubai EXPO 2020, FIFA 2022 and grand plans such as Saudi Vision 2030, Qatar National Vision 2030. Further GCC grid formation, upgradation to higher voltage levels, integration of renewable energy sources to the existing power grid and interconnections of transmission networks are expected to fuel growth in power distribution throughout the Middle East. The revival of the transmission & distribution scene in Abu Dhabi is a positive sign. In KSA, SEC (Saudi Electricity Company) continues to invest in power infrastructure projects. In addition, investment in the renewable sector by a leading investor and plans for developing a transnational city augur well for the KSA market. Power system capacity expansion to cater to infrastructure growth is proceeding as per plans in Qatar and Oman. Riding on a strong execution track record in Kuwait, the business is in an advantageous position to exploit opportunities from key customers in Kuwait. 114 MLD Water Treatment Plant at Ranchi, Jharkhand This year, the business has augmented its client-base by adding 6 new clients, securing 3 mega contracts over 1000 crore in value and won orders in various business 167 Medak & Sangareddy Water Supply Project, Telangana 168 375 MLD Sewage Treatment Plant at Jebel Ali, UAE On the power distribution front, several projects remain significant: the centrally-driven scheme for last-mile connectivity, viz. Sahaj Bijli Har Ghar Yojana (Saubhagya), and various distribution reforms by State DISCOMs for reduction of AT&C losses, power factor improvement, network strengthening in disaster prone areas etc. Urban power infrastructure is expected to get a makeover, with underground cable networks, advanced metering facilities etc. considering the thrust on development of smart cities and heritage cities. - k) D2A Unaccounted for Water Project at Bengaluru j) Infrastructure Development at NRDA, Raipur i) CETP at Narol, Gujarat g) Dahej Water Supply Intake 50 MGD, Gujarat h) Sauni Link 4 Package 3, Gujarat f) Sewerage Network and WW Treatment at Gayespur, West Bengal e) Rampur Sewerage Scheme, Uttar Pradesh 11 d) Water Supply to Adilabad and Khammam Districts, Telangana b) Bisalpur Jaipur Water Supply Project, Rajasthan a) Gadag Water Supply Scheme, Karnataka The Water & Effluent Treatment Business has commissioned over 25 projects in FY 2017-18, including the following key projects: laid more than 3.5 lakh km of pipelines, designed and constructed more than 5300 Million Litres per Day (MLD) of water and wastewater treatment plants and brought more than 2 lakh hectares of land under irrigation. So far, the business has created water infrastructure to cater to the requirements of 30 million people. It has All these leave L&T's Water & Effluent Treatment business with huge untapped potential. Desalination, water management, mega lift irrigation, mega treatment plants and smart cities have started fructifying in a large scale. The mega Government policies to drive water infrastructure in India that include AMRUT (Atal Mission for Rejuvenation and Urban Transformation), Namami Gange, Pradhan Mantri Krishi Sinchayee Yojana and Delhi Mumbai Industrial Corridor Development. Stringent implementation of pollution norms is in place to encourage setting up of common effluent treatment plants. In addition, large investments have been proposed by multi-lateral funding agencies for water supply and sewer projects to improve the quality of urban life. Piped water systems have been set up by the Government in most cities. But a large percent of semi-urban areas are not covered by these, and rely on ground water. Piped sewerage systems feeding into large treatment plants exist only in bigger cities and metros. Most cities have septic tanks or local waste management. Hence there are opportunities in this area for providing water infrastructure facilities. The human population has successfully harnessed many of the world's natural waterways - building dams, water wells, vast irrigation systems and other structures that have allowed civilizations to grow and thrive. Business Environment c) Nagaur TM 01,02,03 Water Supply Packages, Rajasthan Special appreciation was received from the Federation of Indian Chambers of Commerce and Industry (FICCI) for RAPDRP Ghaziabad Project for best practices in Safety Outlook: . • ROSPA, British Safety Council and National Safety Council awards for safety performance for multiple projects Hydel & Tunnels In the current year the business won a mega order to build the Mumbai Trans Harbour Link (MTHL) from MMRDA. there are five ongoing projects across India and one international project in Bangladesh. L&T has built some of the finest and most challenging bridges in India across difficult terrain, incorporating design and construction technologies which stand at the cutting edge of the construction world. Achievements include building the longest operational extradosed bridge in India across river Narmada at Bharuch, Gujarat. The business is executing the longest extradosed bridge in the world at Patna (Bihar) in a Joint Venture with Daewoo. Currently Special Bridges Design capacity for end-to-end civil works including seismic qualification, procurement and construction services. EPC solutions in civil, mechanical, electrical & instrumentation in Nuclear Power Plants • Areas of expertise-: Hydel: The domestic Hydel projects scene in the current year remained stuck at various levels owing to pending clearances, inter-state disputes and local protests. The once-promising North East region is also lagging due to lack of sufficient support. The ambitious river-linking project, which keeps getting delayed due to inter-state disputes, is expected to gather steam. Telangana is another region, which features promising opportunities for the construction of barrages. The Medigadda Barrage Project site set a record with the highest pour of 7,139 cubic metres of concrete in a single day, which is perhaps the highest for its segment in the history of Indian Construction. L&T has made history by successfully completing the single largest concrete pour of 7,232 cubic metre at the Kalpakkam site of the Ministry of Department of Atomic Energy (DAE) Projects for nuclear structures in India. The business also successfully achieved a single concrete pour of chilled concrete of 6155 cubic metre at Kudankulam. Nuclear Power underground facilities, surveillance, etc. In the current year, the business won a mega order from the Indian Navy. LARSEN & TOUBRO • Total 853,700 man-hours of training on EHS were conducted. • 23 EHS Awards were won by the business at different levels and categories from national and internationally renowned organizations including RoSPA, NSC India, BSC, and CII The business aims for excellence in quality, to increase the satisfaction of customers and other stakeholders through effective cost-reduction and process improvements. The business was successfully re-certified for the latest Quality Management System ISO 9001: 2015, with focus on risk-based thinking. Advanced concrete mix designs (M75 Self-compacting) are developed and being used for increased durability and for placing concrete in congested locations. The business established a concrete mix design using Ground Granular Blast Furnace Slag (GGBS), which is the latest development in the industry. Welding and heat treatment techniques were successfully developed for high-strength quenched and tempered steel for specialized projects. Training is a necessary parameter for growth. The business has prioritized the training of its staff on the latest QMS. Training are provided in a focused manner for FLS and other trainees on concrete techniques. The business continues its focus on digital initiatives including extensive use of BIM across the whole life cycle of projects. Other initiatives include vehicle tracking, project monitoring using mobile applications, P&M tracking, worker tracking, biometrics, tool tracking, material tracking, drones, geospatial surveys, etc. L&T has always been a pioneer in the Indian Nuclear industry with current market share of over 51%. Its nuclear power expertise extends to both Pressurized Heavy water (PHWR) and Light Water Reactor (LWR) technologies. Currently, the business is executing civil works for the Kudankulam Nuclear power project, which is the first LWR reactor in India and also one of the largest. Tunnels: New opportunities are expected for road tunnel projects in Maharashtra and the Northern Himalayan states of Jammu & Kashmir, Uttaranchal and Himachal Pradesh. In addition, the Government of India is planning to construct more storage caverns for strategic oil reserves. The HSR (High Speed Rail) project due to be built between Mumbai and Ahmedabad also presents robust opportunities in the near future. Areas of expertise -: • Medigadda Barrage Project One of the station buildings under construction for Doha Metro, Qatar Key EHS training initiatives include IOSH Managing Safely certification courses for Project Heads, NEBOSH • The business had engaged a professional agency to review and revamp cranes and lifting management safety standards, and conducted training sessions for all stakeholders to facilitate implementation in all projects. Striving to achieve the goal of ZERO HARM, the business has launched the Corporate EHS Strategic Plan 2017-18 with key EHS deliverables that have been implemented across all its operations. As part of the EHS Strategy, the following significant initiatives were taken up during 2017-18: Initiatives Key capabilities being developed are seamless integration of project stakeholders through common digital interface, context capture of project environment through photogrammetry and LIDAR techniques, augmented reality / virtual reality tools for better communication of project components and customer experience, 4D visualisation of planning and construction methodology, kinematic simulation of equipment and enabling structures. During the year, major projects commissioned were: Kochi Metro, Lucknow Metro, Hyderabad Metro, Chennai Metro EDRC The year marked the receipt of prestigious projects, such as two packages from MMRDA for construction of MTHL (Mumbai Trans Harbour Link), construction of a six-lane extra-dosed bridge across the river Hooghly, besides the existing Iswar Gupta Setu at Kalyani (West Bengal) and construction of a new dry dock at Cochin Shipyard. L&T's Ports business unit has built marine infrastructure that has given a great fillip to marine and waterway transportation. L&T has significantly contributed to the development of ports by designing and executing 7,000 m berthing structures including liquid jetties, container terminals, multipurpose berths and ferry terminals. The Company is proud to have built 14000 m breakwaters and handled armour rock of size 20T, Accropod - Max size 6.3 cum, the deepest breakwater (~18m) which is a state-of-the-art construction project which adopted the innovative concept of partial replacement of rock core with dredged sand. It has also executed other maritime structures like shipyards, caissons, long span approach trestles, and intake structures, which are unique in nature. We are looking towards the 'Sagar Mala Project' initiative which focuses on the upgradation and development of new ports as a promising prospect for future. Opportunities are expected for marine infrastructure projects involving dry-docks, marine intake structures and defence naval base projects as well. Ports & Harbours . Specialised underground structures penstocks, etc., including erection of electro-mechanical equipment Hydro-mechanical components such as gates, • Pressure shafts, drop shafts and surge shafts / surge chambers Large underground power houses and surface power houses Open and underground de-silting chambers • certification courses for Project EHS In-charges, 2-day Supervisor EHS Training for all site Supervisors (including JV & Subcontractor) and online EHS certification courses for technical employees. 620 m long cable-stayed bridge across the river Mandovi in Panaji, Goa Diversion weirs, barrages, concrete / earthen / rockfill dams, including RCC (Roller-Compacted Concrete) dams Underground tunnels of various geometry and diameter (both concrete lined and steel lined) Outlook The Government sanctioned 5.97 lakh crore (USD 94 billion) as the budgetary allocation for Infrastructure in FY 2018-19, which is approximately 21% more than an estimated expenditure of 4.94 lakh crore in 2017-18. This increase reconfirms the Government's view that infrastructure development is the key to economic development. The Finance Minister has estimated that investment in excess of *50 lakh crore in infrastructure is needed to augment the economy and make it competitive with the other emerging economies. A majority of this allocation has been earmarked to build metros, bridges, hydro power projects and tunnels, which form the core expertise of the Heavy Civil Infrastructure business. With major projects coming up, including the high-speed rail between Mumbai and Ahmedabad, the Bharatmala and Sagarmala river-linking projects, hydel projects on the Indus and its tributaries, etc., the business is confident on achieving its revenue targets backed by a strong order book and promising prospects. 163 The Transmission Line business has commissioned about 20 transmission corridors of 2800 km length in FY17-18. The 400kV Raipur-Jagdalpur project is the longest twin line in a single package with a length of 328 km. Key projects such as 765kV Lalitpur-Agra Transmission Line (328 km) and the 400kV Madhugiri-Gooty TL were commissioned for Power Grid. The 220kV Kishenganga-Amragarh TL has been successfully completed in Jammu & Kashmir, overcoming the tough challenges posed by the weather, terrain and local conditions. Other major projects commissioned include 400kV Banda-Allahabad TL in Uttar Pradesh and 400kV Salem-Rasipalayam TL in Tamil Nadu. With the country achieving a milestone 1 lakh GWHr of renewable energy generation in FY 2017-18, L&T's Solar Business has seen remarkable growth. The business secured a cumulative 650 MWp+ capacity of grid-connected solar PV plants across India, including the prestigious order for 325 MWp in Rewa, Madhya Pradesh, which is also the single largest EPC contract in India to date; 140 MWp in Bhadla, Rajasthan and 187 MWp in Tamil Nadu. The business also won the prestigious Bihar State Rural Electrification project, the first-of-its-kind distributed generation project with a cumulative capacity of 12 MW solar and 105 MWh of energy storage, which aims to electrify 236 remote villages. In the Middle East, though the macro economic scenario was mixed in 2017-18 as well, witnessing capex cuts and intensifying competition, the business could garner opportunities arising out of Expo 2020 related development in the UAE and stable T&D investment plans by KSA, Qatar and Oman. In the UAE, the business secured orders for constructing a number of 132kV gas insulated substations from Dubai Electricity & Water Authority and reputed private developers. Despite spend cuts induced by the drop in oil prices experienced earlier, causing a sense of anxiety in the business climate, L&T secured its longest transmission line in KSA (from Qassim to Madina - 421 km). Despite the imposition of trade embargo, the business secured a major order from a private developer in Qatar. L&T commissioned 33 substations in the Middle East in FY 2017-18. Having qualified for the highest voltage levels in its lines of business, new private customers have also been added. In Africa, the business has made an entry into the Moroccan and Egyptian markets. The foothold gained in Algeria, Malawi and Kenya has grown stronger on the back of fresh orders. With the completion of the substation projects on schedule in Malaysia, the business has demonstrated its capabilities and has won recognition in the ASEAN market. Major 500kV substation and transmission line orders have been secured in Thailand. With a major thrust on digitalization as a key enabler, the business rolled out several initiatives, including 3D/4D BIM, deployment of drones and mobility devices for project monitoring, connecting plant and machinery for asset monitoring, using geospatial technologies for surveys, etc. Workmen-related processes are being linked through unique identification. Several operational excellence initiatives in the areas of on-time delivery, profitability enhancement, effectiveness, checks of process implementation, working capital management and risk management are being pursued. 220 kV Gas Insulated Substation at Mehairja, Qatar 164 SIEMENS 756 kV Gas Insulated Substation at Varanasi LARSEN & TOUBRO Initiatives undertaken to enhance safety in operations include e-learning modules, improvised safety cards for reporting unsafe acts/conditions, virtual reality-based training, upgrading Safe Operating Procedures (SOPs) to reflect changing work methods and mechanization, adoption of the Sagging Bridge (Stringing Working Platform) technique and the use of motorized winch machines in place of tractors, in final sag activities and enhanced training on behaviour-based safety, safety audit and training the trainers. An innovative programme has been developed to groom fresh diploma engineers to take up roles as EHS professionals. Training programmes have been developed in collaboration with prestigious institutions to enhance operational excellence. Many initiatives earned awards and recognition for the business during the year. These include: ⚫ISGF Innovation Award, Solar and Storage Project of the Year award from Solar Quarter for Bihar Microgrid project • Prashasti Patr (Commendation Certificate) from the Bihar Government for meeting electrification targets • MEED 'Power Project of the Year' award for the Oman project • EIA Compliance Award for Lambir substation project from Sarawak Energy Berhad • ASSE GCC HSE Excellence awards for several projects in Middle East XZZZAN LARSEN & TOUBRO 500kV HVDC Transmission Line at Kenya With renewable power characterized by intermittency being added increasingly to the grid, advanced solutions to ensure voltage stability have been necessitated. L&T commissioned India's first STATCOM project of ±100MVAR capacity at NP Kunta substation in Andhra Pradesh. A major order was received from Power Grid Corporation of India Limited (PGCIL) for implementation of STATCOM in three locations in South India. Substation-related opportunities in 400kV & 765kV GIS / AIS segments were steady as Central and select State utilities concentrated on power system strengthening schemes to meet their demands. Though there were positive signs on the policy front, the general lack of investments in conventional power generation and industry segments continues. Gas and air-insulated substation orders were received from PGCIL and State utilities including two major 400kV GIS substation orders from South Indian transmission utilities. Several key substation projects were commissioned including 765kV gas insulated substations at Hyderabad, Nizamabad, Varanasi and Aligarh. On the international front, the Middle East construction market is expected to pick up pace again this year, offering some promising prospects. Break Water construction at Kudankulam Nuclear Project Canopy erected for a station building at Riyadh Metro 161 Power Transmission & Distribution Overview: L&T's Power Transmission and Distribution business vertical is a leading EPC player in the field of power transmission and distribution and solar energy. It offers integrated solutions and end-to-end services ranging from design, manufacture, supply, installation and commissioning of transmission lines, substations, underground cable networks, distribution networks, power quality improvement projects, infrastructure electrification, solar PV plants, battery energy storage system and mini / micro grid projects. Besides being a dominant player in the Indian market, the business enjoys a significant share and a strong reputation in the Middle East, Africa and ASEAN markets. L&T's substation business focuses on providing turnkey solutions for extra high voltage air insulated / gas insulated substations for utilities and power plants, EHV cable & communication backbone networks and complete electrical & instrumentation solutions for various infrastructure projects such as airports, metros etc. L&T's Power Distribution business provides a gamut of EPC services related to urban / rural electrification, including last-mile connectivity, augmenting, reforming and strengthening of high voltage and low voltage distribution networks, distribution automation solutions and power quality improvement works. L&T's Transmission Line business offers turnkey EPC solutions in overhead lines for power evacuation and transmission, bolstered by its state-of-the-art tower manufacturing units at Puducherry, Pithampur and Kancheepuram which have supplied over 15 lakh tonnes of tower components. The Testing and Research Station at Kancheepuram accredited by NABL is one of the largest in Asia and is also amongst the most renowned testing centres in the world. (NABL: National Accreditation Board for Testing and Calibration Laboratories). L&T's Solar business provides single-point EPC turnkey solution for solar PV-related projects along with energy storage solutions. Its experience ranges from flat to highly undulated as well as to landfill topologies with specialized technologies including designing and executing contour-following solar PV power plants. The solar business has in-house capabilities of different module mounting structure types such as fixed tilt, seasonal tilt and HSAT to choose from for most optimal solutions. As grid stability and power conditioning requirements gain significance in the wake of large-scale renewable integration, standalone and PV integrated storage solutions are being offered. The international units of the business in the Middle East, Africa and ASEAN regions offer complete solutions in the field of power transmission and distribution, including substations, power transmission lines, extra high voltage cabling, solar plants and Electrical, Instrumentation and Control (EI&C) works 100 MVAR STATCOM at 400 kV NP Kunta Substation, Andhra Pradesh 500 kV Tha Li-Khon Kaen 4 Transmission Line, Thailand 162 LARSEN & TOUBRO for infrastructure projects such as airports, oil & gas industries, etc. The Middle East Business Unit caters to the UAE, Saudi Arabia, Qatar, Oman, Kuwait and Bahrain. The Africa unit is currently focused on the Northern and Eastern parts, and has established a presence in Algeria, Kenya, Ethiopia, Malawi, Botswana, Morocco and Egypt. The business is executing projects in the ASEAN countries of Malaysia and Thailand while seriously pursuing other opportunities in the region. Business Environment Thanks to a slew of Government schemes including 'Saubhagya', the distribution sector in India remained vibrant in 2017-18. Having achieved electrification of all the villages, now the focus is on electrifying all the households. Also, the urban distribution revamp programs continue aiming at multiple objectives such as improving reliability of power, making the network disaster-resilient and improving the aesthetics of cities of tourism and heritage importance. The business maintained its leadership position as a large EPC player in this segment, with key orders from the states of Uttar Pradesh, West Bengal, Jharkhand, Tamil Nadu, Karnataka and Andhra Pradesh. The business is privileged to partner the Central and State Governments in illuminating thousands of households in economically backward areas and electrify hundreds of villages. In a large number of towns, it has significantly improved the quality of power and reduced AT&C (Aggregate Technical & Commercial) losses through distribution reformation projects. Though the centrally driven transmission schemes were less than the prevailing levels, the intrastate system strengthening projects by States such as Jharkhand, Karnataka, Kerala, Madhya Pradesh, Tamil Nadu and Uttarakhand continued to provide ample opportunities for transmission line construction. On the back of proven execution skills to complete projects within schedule, a repeat order from a reputed private developer was entrusted to the business. The Testing Station continues to attract orders from its customers worldwide - USA, KSA, China, Indonesia and Malaysia - to test some of the highest and tallest transmission towers in the world. 159 Significant Initiatives: • The RACE initiative, realizing considerable savings FULL Basement - 1 UP 70 3rd Floor 30 Basement-1 DOWN BIKE 2nd Floor Basement-2 UP FULL 1st Floor-UP 70 Basement - 2 DOWN 1st Floor-DOWN Total Available Slots 173 Award Category Adaptation & Resilience Smart Solution of the Year Outlook Project Odisha EWDS Nagpur Smart Strip FY 2018-19 looks promising for the business, given the boost the Government has given to safe and smart cities and other digital initiatives. 4th Floor FULL Ground Floor 53 In alignment with the Government's state-wide area network initiative to provide digital connectivity between the State/UT Headquarters and the Block level via District / sub-Divisional Headquarters, L&T has won an order from the State of Jharkhand to cover 24 Districts across the State. L&T has won a contract from Rajasthan Rajya Vidyut Prasaran Nigam Limited (RRVPNL) to create a 'Smart Connected Grid, Smart Transmission Network and Asset Management System' across the State of Rajasthan, covering about 624 power utility sub-stations. Security Solutions Business Video-based surveillance has emerged as a fundamental tool to support law enforcement agencies to accelerate the pace of detecting and preventing crime and improving emergency response systems for people in distress. The core strength of the business lies in offering a holistic spectrum of sustainable and scalable security system solutions for pan-city and pan-state surveillance, homeland security systems, intelligent traffic management systems, critical infrastructure across ports, airports, metros, IT parks and public buildings, etc. Starting in a small way with the Sabarmati Jail Surveillance Project and the development of surveillance and intelligent traffic management systems (in Ahmedabad, Gandhinagar and Vadodara) for the Government of Gujarat, L&T has commissioned the largest surveillance project of its kind for Mumbai. On 5th September 2017, the Chief Minister of Maharashtra declared India's largest city surveillance project 'go-live'. This is the 'Mumbai City Surveillance Project', comprising ~5,000 cameras at over 1500 junctions in city. As part of this project, L&T has delivered state-of-the-art command control centres for the city, which is being utilized by the City's Administration and Police, not only for surveillance activities but also for overseeing natural emergencies and the strife-like situations that the city goes through from time to time. The business is currently executing the largest city surveillance (over 10,000 cameras) and traffic management network for the cities of Hyderabad and Cyberabad. In Rajasthan, three city Command Control Centres at Bharatpur, Jodhpur and Bikaner and the Dial 100 Emergency Response System were also successfully commissioned in FY 2017-18. Awards The Union budget for FY 2018-19 has allocated over * 25000 crore - an increase of 22% over last year's The business has received various awards, particularly for Smart City initiatives and Surveillance Projects. Awards received during the year include: Tourist Attraction City Project Hyderabad Intelligent Traffic Management System Nagpur Smart Cities Mumbai City Surveillance Nagpur Smart City Pune Smart City Jaipur Smart City Intelligent Parking Management System P Development Authority Jaipur P P Development Authority Roof Top Award Category Smart Urban Traffic Management Initiative Best Smart Cities Initiative Smart Surveillance Initiative Best Innovation Initiative Best Project in Building Smart Cities In FY 2017-18, it won orders for similar packages for the Nagpur Metro in Maharashtra and the MEGA Metro for the city of Ahmedabad, Gujarat. allocation towards various initiatives in the areas of smart, digital, etc. This augurs very well for the interest pursued by the business. Under the Central Government's Smart City Mission for developing 109 smart cities across India, the cities have already been shortlisted and several are at advanced stages of RFPs and have received Central Govt. funding. These cities will be coming up with RFPs shortly, and the balance cities are likely to follow in FY 2018-19. Equipped with diversified smart offerings, L&T is well-placed to address these opportunities. LARSEN & TOUBRO Power Business Overview L&T's Power business offers concept-to-commission integrated business solutions to the thermal and nuclear power industries. It undertakes large EPC projects on a lumpsum turnkey basis in the fields of coal, nuclear and gas based power plants in India and overseas. The business is planning to undertake STG Island contracts in upcoming PHWR nuclear-based power plants. The business has a track record of executing large-size and complex projects with capabilities that include in-house engineering, state-of-the-art manufacturing facilities, project management expertise and a healthy and encouraging work environment. The business boasts of a state-of-the-art facility at Hazira (near Surat), where it manufactures ultra- supercritical/supercritical boilers, turbines, generators, pulverizers, axial fans, air-preheaters and electrostatic precipitators. The facility is responsible for adding more than 7GW of supercritical power generation capacity to the Indian Power sector since its inception. The business has the following subsidiaries: L&T-MHPS Boilers Pvt. Ltd., a joint venture with Mitsubishi Hitachi Power Systems Limited (MHPS) Japan, engineers, designs, manufactures, erects and commissions ultra-supercritical/supercritical boilers up to a single unit of 1000 MW in India. The Company is also looking forward to gaining a foothold in the selective catalytic reduction system market in India, which is likely to open during 2018-19. L&T-MHPS Turbine Generators Pvt. Ltd., a joint venture with Mitsubishi Hitachi Power Systems Limited (MHPS), Japan and Mitsubishi Electric Corp. (MELCO), manufactures STG equipment of capacities ranging from 500 MW to 1,000 MW. The Company is engaged in the engineering, design, manufacture, erection and commissioning of ultra-supercritical/supercritical turbines and generators in India. The business also has a joint venture with Sargent & Lundy LLC, USA (S&L), a global consulting firm in the power industry, offering complete power plant engineering and consultancy services – from concept to commissioning. Another joint venture with Howden Group, UK, enables the manufacture of fans and air pre-heaters. - Presently, the business is very active at various sites in India for its coal-based power plants, and in Bangladesh for its gas-based power plants. Business Environment: The lack of momentum in industrialization and moderate economic growth have directly impacted the power sector in recent times. The power sector is facing various challenges like shift of focus towards renewables, decline in thermal PLF, financial stress, promoter's inability to infuse equity and service debt, 2x660 MW Supercritical Thermal Power Plant at Nigrie in Singrauli district, Madhya Pradesh. L&T executed Boiler and Turbine Island on EPC basis. 175 falling electricity prices at exchanges, non-availability of long term PPA, coal linkages, water availability, land issues, etc. The Government's focus on renewables has particularly impacted the capacity generation of thermal power plants. Further, the excess manufacturing capacity in the market continues to put pressure on the prices. During these trying times, the business sees the opportunity to reorganize, consolidate, cut costs and improve efficiencies to make it more competitive in the market to secure future orders. The business will continue its stand of not bidding at margin diluting prices. Instead, it will work in an organized manner to make itself cost-competitive to win and successfully complete such projects. There is some cause for cheer, despite the challenges being encountered by the power sector in the past few years. The business is confident of revival of capacity enhancement in the thermal power sector to match the projected rise in demand for power, in line with economic growth in the country. In this context, the business will continue to focus on coal and gas-based power projects and its adjacencies like replacement of old power plants, R&M and new business for FGD / SCR systems, sub-critical plants, nuclear STGI plants, etc. During the year, the business continued its foray into Bangladesh, with one more 400 MW combined cycle gas-based complete EPC contract. The business has successfully commissioned two gas-based combined cycle power plants in Bangladesh, and has added capacity of more than 600 MW to the grid. Further, two gas-based power plants totalling 800 MW are under CHURCH, TODGARE BRUINA TEMPLE AJMER 2013 In addition to the above, special focus is laid on the modernization of defence and homeland security. In the defence sector, perimeter surveillance systems to the Navy and Air Force are also shaping up. The Bharat Net programme is one the world's largest network infrastructure projects. It aims to digitally connect 250,000 villages (gram panchayats) across the country and unite India digitally. The second phase of the Bharat Net program has been floated and aims to deploy network infrastructure to the 140,000 gram panchayats on a fast-track basis. The objective of the Bharat Net programme is to facilitate the delivery of e-governance, e-health, e-education, e-banking, Internet and other services to the rural India, thereby enhancing the quality of rural life. Along with rural digital initiatives, the Government is also focussing on increasing the number of wi-fi hotspots across the country. BSNL is planning to ensure that there are half a million more hotspots by the end of December 2018. The aim is to digitally touch India's 1.25 billion population. One of several initiatives of the Government in the energy sector is the drive for replacement of old analog meters with new, tamper-proof, digital smart meters for domestic consumers. Both technically and financially, the Government has been supporting the set-up and upgrade of State Wide Area Networks (SWAN). The business expects opportunities in State Wide Surveillance. Information Kiosk at Jaipur - a Smart City solution 174 JUNTAR MANTAR Several Tier-ll cities are expected to roll out surveillance projects. Additionally, the transportation sector is also moving towards surveillance and traffic management systems. A few of the RFPs are in an advanced stage of preparation, such as railway surveillance and highway traffic management system. CAT PALACK PUL ACTROIT HALL JAIGARH PORT JAINST SAMARK PORT ACARI MOOQUE JAIPS DOLI FESTIVAL-2013 KUMBAK DAY TOLI FESTIVAL 2013 GANGAUR FESTIVAL KIGATTAME LARSEN & TOUBRO 172 Command & Control Centre, Mumbai Floating Barge Intake at Sahibganj, Jharkhand 169 • Best of India Records for the 'World's Largest Water Conservation Campaign in schools on a single day' • 'Most Admired Company of the Year - Water Sector' award from World Federation of Marketing • 'People Initiative of the Year' awarded by ET Now for PMDP • 5 awards from Water Digest including 'Best Urban Water Solutions Provider' and 'Best Rural Water Solutions Provider'. The business has been driving digitalization over the past two years to improve efficiency and productivity. Initiatives implemented include: . Digital Site Walk Through: A combination of hardware (SmartGlass) and software solutions used to observe the project progress, safety, quality, workmens' welfare and administration from any remote location. ⚫HR Dashboard: Provides a more advanced way to assess metrics and Key Performance Indicators, allowing organizations to present information in a more interactive and user-focused manner. • Customer Relationship Management (CRM): A tool which enables effective management of the business, from the early stage of prospects to award of contract - and can be extended till O&M. The CRM platform supports the tendering process. Once the prospect is converted to NIT (Notice Inviting Tender), the Contracts team will use the module to work with various departments and for preparation of the bid. The tender opening will also be captured in the system for further data analysis. Sewage Treatment Plant at Al Shamal, Qatar Outlook The Government has already set in motion an integrated Ganga conservation plan - 'Namami Gange' – which envisages investments for sewage infrastructure across several urban habitations along the river. The Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) has been formulated with the vision of extending the coverage of irrigation 'Har Khet ko pani' and improving water use efficiency 'More crop per drop' in a focused manner with end-to-end solutions on source creation, distribution, management, field application and extension activities. The Delhi-Mumbai Industrial Corridor (DMIC) is India's most ambitious infrastructure programme, aiming to develop new industrial cities as 'Smart Cities' and converging next-generation technologies across infrastructure sectors. The programme envisages development of infrastructure linkages like power plants, assured water supply, high capacity transportation and logistics facilities. Hence, the projects pipeline related to drinking water, waste water and irrigation are expected to remain strong in India due to growing demand and Government thrust. Sector-specific focus is expected to shift towards rural drinking water, ETPs/STPs and irrigation projects. Major outlay based on the current status and priorities: Water projects expected in Gujarat, Karnataka, Uttar Pradesh, Bihar, Tamil Nadu, Rajasthan; Irrigation projects are expected in Tamil Nadu, Telangana & STPs expected in Uttar Pradesh and Bihar. There is a push towards the PPP mode (HAM - Hybrid Annuity Mode) for STPs (Sewage Treatment Plant) causing big Infra developers to enter the water sector. There is the probability of this getting extended to WTPs (Water Treatment Plant) / ETPs (Effluent Treatment Plant). Sauni Yojana Lift Irrigation Project, Gujarat 170 LARSEN & TOUBRO At present, the competitive landscape is such that L&T along with few selected players are only competing pan-India, while the smaller players are focusing on their home ground. Competitors tend to form JVs with regionally strong players and technology licensors for PQ and project execution. 227 MLD Water Treatment Plant at Garden Reach, Kolkata, West Bengal Guinness World Record for the 'Largest Sustainability Lesson' conducted in a college as part of World Water Day Celebrations 2018 Awards & Recognitions Introducing 'O&M-Cognizance', a daily E-learning programme that keeps the O&M team updated with current O&M practices LARSEN & TOUBRO domains like water management, drinking water supply, municipal waste water collection & treatment, integrated urban infrastructure, common effluent treatment plants and lift irrigation schemes. These include: a) Providing 24x7 water supply to Pune from Pune Municipal Corporation b) Laying of sewer lines in an extended area of Bengaluru City from Bangalore Water Supply and Sewerage Board c) Kundaliya Lift Irrigation Scheme from Water Resources Department, Government of Madhya Pradesh d) Surya Water Supply Scheme from Mumbai Metropolitan Region Development Authority e) Sauni Yojana Link 2 Package 6, Gujarat f) Mallana Sagar Reservoir Reach 2, Government of Andhra Pradesh g) Development of Integrated Infrastructure at Amaravati from Capital Region Development Authority, Andhra Pradesh h) Seoni Water Supply Scheme from Madhya Pradesh Jal Nigam Limited In the international market, opportunities have been identified for water treatment, sewage treatment and desalination plants in Middle East. The business has already made its mark in Tanzania and Sri Lanka and more orders are expected from these geographies. Tireless efforts are in place to expand into other parts of Africa and Bangladesh. i) Cuttack Water Supply Scheme for supplying potable water to Cuttack District Keeping in mind oil price volatility and other uncertainties, the business has cautiously evaluated projects on the international front this year. The business is all set to win major orders in the years ahead. Significant Initiatives The year witnessed significant initiatives being taken to ensure that the Water and Effluent Treatment business of L&T continues to be ahead of the competition, both in terms of market share and profitability. These initiatives include: • Diversification into different lines of businesses • Setting up spiral mills close to project sites for rolling HR coils into pipes • Launching the Project Managers Development Program (PMDP) to get the next generation of Project Managers ready • A dedicated O&M team to remotely monitor all the sites through a Remote Monitoring system (RMS). This enables getting expert guidance, troubleshooting support, etc. • j) India's First Brownfield Smart Infrastructure Project at Udaipur, Rajasthan from Udaipur Smart City Limited Smart World & Communication Business Overview: L&T entered the Smart World & Communication business two years ago, specifically to address the need for a safe, smart and digital India. It has executed several projects under these segments, many in an advanced stage of implementation. The business is positioned well for accelerated growth for the year 2019. & Agency Administration COMMUNICATION Reusable Energy Smart Digital Connectivity 171 integration and state-of-the-art Smart City Operation Centre (SCOC). In the city of Visakhapatnam, apart from the above- mentioned smart elements, L&T's project includes implementation of other smart elements such as solid waste management system, a first-of-its-kind smart pole, smart lighting and Enterprise Resource Planning. In February 2018, the Hon. Chief Minister of Andhra Pradesh inaugurated the Command Control Centre of the Vizag Smart City Project. The business also commissioned wi-fi and a data centre for Chennai city. In FY 2017-18, the segment secured the following orders: Government a. Raipur Smart City Limited for Implementation of b. The first and highly prestigious order for implementation of smart meters in about 17 districts in Uttar Pradesh (for six DISCOMS) and Haryana (two DISCOMS). This is India's largest smart meter roll-out implementation of 5 million smart meters across these two States. This is the first large-scale project involving deployment of all the applications on the Cloud, including head end system and meter data management system. c. Tamil Nadu Data Centre Project for Tamil Nadu State Govt. and Bhubaneshwar Data Centre Project for National Informatics Centre, marking L&T's foray into the business of stand-alone data centre projects. Communication & Telecom Infra L&T provides end-to-end solutions for a range of requirements covering fibre- optic backbone, microwave and satellite communication, network and telecom infrastructure, wi-fi systems, early warning dissemination systems, emergency response systems, metro communication, etc. Playing a key role, L&T supported Bharat Broadband Nigam Limited (BBNL) in the Bharat Net programme by deploying the Gigabyte Passive Optical Network (GPON) technology across eleven States in India, and also Network Operating Centres (NOCs) in Bengaluru and New Delhi. This has received much appreciation from the Department of Telecom, Ministry of Communication. L&T also successfully created 1,900 wi-fi hot spots and 10,500 access points across 10 states in Phase 1 covering both urban and rural areas, as well as another 1,900 wi-fi hot spots and 1900 access points across 10 states in Phase 2 in rural areas. L&T also commissioned a dedicated network for the Indian Air Force, connecting a number of Air Force stations pan-India. As part of another Digital India initiative, L&T commissioned wi-fi access to around 300 colleges in a University in the State of Bihar on behalf of BELTRON. L&T has commissioned the first phase of the Cyclone Early Warning Dissemination System (EWDS) - the first of its kind in India - for the State of Odisha. For Andhra Pradesh, the EWDS at an advanced stage of completion. L&T is executing the comprehensive metro communications package for the Lucknow Metro and a TETRA communications package for the Delhi Metro. intelligent traffic management system, city surveillance system and integrated command control centre in Raipur city. construction, and will be completed well within the contractual period. Lilies Martagement Systems Management Systems The business has three segments – the first for Safe Cities; the second, Smart Infrastructure; the third, Telecom and Communication Infrastructure. The Government of India continues its investments to leverage smart and digital technologies for cities and rural parts of India, focusing on a safe, smart and connected India. In this domain, L&T is at the forefront, collaborating with the Government in leveraging technologies to meet those goals. L&T is perfectly positioned to build India's next-gen safe, smart and digital infrastructure. As a Master System Integrator, L&T has proven expertise in focused strategy, robust processes and comprehensive end-to-end solutions to cater to India's smart and digital requirements. With its unique positioning and technology-driven portfolio, the business has been able to attract talent from across industries, comprising a diverse pool of resources spanning technology, software, hardware and domain specialists from relevant industry verticals. Smart Cities L&T has established itself as the leader in the smart city domain. Starting with the Jaipur Smart City Project - India's first 'smart city' the business is currently executing five major 'smart city' projects that, inter alia, include Nagpur, Pune, Vizag, Raipur, and is positioned well in a few others. L&T is executing India's First Integrated Smart City project for Nagpur City in Maharashtra, including the creation of a 'smart' strip of approximately 6 km with state-of-the-art systems powered by smart ICT interventions like smart transport, solid waste management, smart traffic, smart lighting, smart parking and environmental monitoring systems. For the city of Pune, in partnership with Google, the segment successfully launched wi-fi services. Other smart elements under implementation are emergency call boxes and public address systems, environmental sensors, variable messaging displays, network connectivity, video analytics L&T offers a bouquet of Smart City solutions SECURITY SOLUTIONS Otien Centin APPS Water Management Smart Lighting Building Management System Damport Management Systems Smart Grid SMART CITIES Smart Infrastructure Setart Waste Management Public Safety System The success in Oman in the HRSG segment of gas-based power plants and export jobs through joint ventures continues to mark the business's capability to meet international execution standards, and proves its competitiveness among international players. The metro initiative is gaining further impetus, with the addition of metros for cities of Mumbai, Bengaluru, Hyderabad, Nagpur, Ahmedabad, Chennai, Jaipur, and Kochi in the next few years. In addition, there are proposals for Mass Rapid Transport Systems for Pune, Chandigarh, Ahmedabad, Kanpur, Ludhiana, Bhopal, Indore and Faridabad. The business has also diversified into environmental solutions, actively started to participate in FGDs, and is hopeful of making a breakthrough in the upcoming tenders. It will also participate in the replacement project market, which is estimated to be around 46 GW, and will see the replacement of old and inefficient power plants in the country. Turbine manufacturing facility, Hazira, Gujarat 177 E Heavy Engineering Business The Heavy Engineering business is structured into two business groups: • Process Plant Equipment and Nuclear • Defence and Aerospace Process Plant Equipment and Nuclear Overview L&T's Heavy Engineering (HE) business is amongst the top 5 global fabricators to supply engineered-to-order critical equipment, piping and systems for core sector industries - Fertilizer, Petrochemical, Refinery, Oil & Gas, Gasification, Thermal & Nuclear Power, including critical revamp and up-gradation projects. These equipment and systems are the most critical part of major investments. The business has achieved international recognition through an impeccable track record of executing large and complex projects. Capabilities include state-of-the-art technology, engineering analysis, globally benchmarked, fully- integrated manufacturing facilities, a Research and Development centre, and an experienced and highly skilled talent pool. The sustainability and safety standards at manufacturing facilities are on par with international standards. The business is a leading supplier of hydro-processing reactors, ethylene oxide reactors, fluid catalytic cracking reactor regenerator systems, high-pressure breech lock heat exchangers, waste heat boiler packages, ammonia converters, urea reactors, urea strippers, methanol converters, coke drums, proprietary internals and other critical equipment for process plants. Nuclear power sector supplies include equipment such as steam generators, end shield assembly and pressurizers. The manufacturing facilities are located in Mumbai, Hazira (near Surat) and Vadodara. The business also provides modification, revamp and up-gradation services in niche areas. The Piping business unit fabricates critical piping spools for applications in the power, refinery, petrochemical, fertilizer and chemical sectors (for high-pressure, temperature and corrosive services) and has a track record of exporting piping spools globally. The business has a JV with Nuclear Power Corporation of India (NPCIL), which holds a strategic facility to cater to the demand for critical forgings required for the Indian Nuclear Power programme and for other crucial sectors like Defence, Hydrocarbon and Oil & Gas. Business Environment Two trains of FCC Packages (8,650 MT) for Petronas RAPID Project, Malaysia 178 LARSEN & TOUBRO LARSEN & TOUBRO The business is poised to focus on new territories outside India to mitigate the risk of low domestic demand. Boiler manufacturing facility, Hazira, Gujarat. South East Asia continues to offer good opportunities for gas-based plants, which are not expected to revive in India in the near future. The business has taken various steps to enter targeted markets like Bangladesh, Sri Lanka, the UAE and Indonesia for gas-based projects. A sluggish global economy impacted the business for the first 3 quarters of 2017-18. Key markets, viz. USA, Brazil and China, offered very few opportunities. Other major markets targeted i.e. Iran and Russia, were impacted due to geopolitical reasons. The Middle East economy slowed down due to lower oil prices. Worldwide, most countries areas. The business continues its operational excellence on the jobs in hand by completing the various milestones of the projects in record time. The dedication of the Mahagenco- Koradi project to the nation (3x660 MW) is an example of this operational excellence. The business, despite its quest to complete project milestones on time, has never lost sight of the safety and quality of execution. The receipt of various national-level awards on safety and quality is a testimony to this. Excess capacity and aggressive pricing will continue to haunt EPC players, and would reflect in the pricing and financials. Nuclear power, being a clean source of energy, is going to play a key role in the Indian power sector in the next few years. The Government has an ambitious plan to increase the nuclear power production to 23 GW by 2031 from the current level of 7 GW. The business sees 360 MW Combined Cycle Power Plant, Bheramara, Bangladesh, built on EPC basis 176 馆 LARSEN & TOUBRO large-value opportunities in this segment. The business has incorporated the manufacturing capability to produce turbines of 700 MW capacity related to PHWR nuclear power plants. Significant Initiatives: The business has deep-dived into cost-optimization programmes, and is confident of successful implementation in the upcoming tenders. Internationalization and portfolio enhancement continue to remain the focus of the business. Enhancing its capability towards these initiatives, the business is geared to benefit from any opportunity available in these areas. 225 MW Combined Cycle Power Plant, Sikalbaha, Bangladesh, built on EPC basis Smart asset monitoring using loT and smart manufacturing initiatives have been identified as important digitization measures to improve business processes and optimize equipment utilization. The business has carried out various initiatives to improve its localization of manufacturing activities. It regularly reviews its internal control processes, and has ensured an adequate internal control system commensurate with the size, nature and risks of its business operations. It also continues with its risk mitigation initiatives through risk management practices and regular reviews. Outlook: Looking ahead, the power sector in the country is set to grow to meet the increased demand due to the expected GDP growth in the country. The growth in industrialisation is the key to economic growth, which in turn will lead to a major thrust in the power sector, as power is required to support industrialisation. Government initiatives like Ujwal DISCOM Assurance Yojana, rural electrification programmes, the programme on 24x7 power for all, and centralised purchase of 2500 MW of power from stressed power projects by the Central Government for 3 years are some of the measures being implemented towards raising the power demand so that the power sector embarks on a sustained recovery path. The business sees that the power sector is expected to unfold many more such positive trends in the areas of generation, transmission and distribution to increase the demand. The business is also giving due importance to digitalization. It aims to achieve cost reduction, carry out smart operations and shorten project timelines through these initiatives. The business sees opportunities in the 'replacement market' and in 'FGD systems' in the near future. The business is ready to capitalise on any opportunity in these diversified Coal will continue to be the mainstay of the domestic power sector for providing stable, reliable and robust base load power supply - though the emergence of alternative sources in the form of renewables is another challenge for the business. . Optimising productive time of machines • Tool life monitoring and asset tracking 2. Training and education using Augmented Reality/ Virtual reality • Guided servicing of 'Omega' Air Circuit Breaker using Augmented Reality • Interactive Induction Training module for new joiners using virtual reality T-era Panels In FY 2017-18, the business introduced various new products in the power distribution, motor control and power quality market segments to further strengthen its leadership position. Notable additions include higher rating air-break and vacuum contactors, 4-Pole MCCBs, electronic trip units SR 18G with enhanced features, S-Line copper busways and S-Line aluminium busways for lower (250A) ratings, Ti-APFC panels as per IEC61439, APFC relays, etc. L&T's Metering & Protection Systems business was engaged in developing new cost-optimized metering platforms offering better features to maintain competitiveness in the market, and the development of new products to meet the unfulfilled needs of customers. During the year, the business launched 1-phase and 3-phase kWh meters in whole current small form factor and prepaid category. It also actively launched 1-phase and 3-phase smart meters on various communication platforms in line with emerging demands and trends. L&T's Electrical Systems & Equipment (ESE) business introduced outdoor cabinets for the telecom segment and feeder pillars and front RMU with FRTU (Feeder Remote Terminal Unit) for the utilities segment. For the international market, a Sub-Main Distribution Board (SMDB) was introduced to cater to the infrastructure segment such as AU Solutions for final distribution - a comprehensive range for real world applications. CCC (CCC Emm (ĊĊE CF (HU) 185 1. Asset Intelligence Management (use of Internet of Things) metros, airports, smart e-cities, and high-end residential complexes. ESE also started manufacturing Ring main units (RMU) and introduced a new variant to its GIS (Gas insulated switchgear) range. - Listed below are few initiatives on which significant progress has been made: 184 B. Collaboration, Document Management & Workflow - To create a centralised document repository with work flow functionality L&T's Control and Automation (C&A) business successfully adapted its in-house developed software for SCADA, reducing dependence on imported technology. The business also put in significant efforts towards developing drives using FPGA (Field Programmable Gate Array devices) and batch controllers. In its endeavour to deliver quality products and solutions at competitive prices, the business always revalidates its processes, providing vigour and sustainability to its operations. The business launched 'Project Optima' for all domestic businesses and TAMCO. The project is an operational excellence initiative, aimed at achieving refined cost structures, improved operational efficiency and faster throughput. The outcome of the programme has been encouraging. Various recommendations of the project have been implemented, contributing to improved efficiency and cost reduction. In FY 2017-18, the R&D spend by the business was approximately 2% of total sales revenue. During the year, the business filed 76 Patents, 1 Trademark and 32 Design applications. Focused R&D activities have enabled the Electrical Standard Products business unit to have a healthy New Product Intensity (NPI) index of approximately 25% - an index which measures the sales of new products introduced in the market during the last five years with reference to the total sales in the financial year. The Standard Products business implemented a SAP tool known as 'Advanced Planning and Optimisation' (APO) for end-to-end supply chain management. The tool aims at improving capability to give a reliable commitment of delivery date to customers while receiving orders, based on real-time visibility in the supply chain. It works on the Theory of Constraints (TOC) and uses a diagnostic metrics framework based on Supply Chain Operation Reference (SCOR). In line with its 'Shrink to grow' initiative, the switchboard business has successfully shifted its Low Voltage switchboard manufacturing operations from Ahmednagar to Coimbatore campus, which helped in creating additional manufacturing capacity for Medium Voltage products. The business participated in Asia's largest electrical fair 'ELECRAMA' held at Greater Noida in March, 2018 and showcased a wide range of offerings, including products which are lined up for launch in the coming months. Air Insulated Switchgear (AIS) from TAMCO Malaysia, an L&T Group company. LARSEN & TOUBRO Subsidiaries such as LTEASA and Servowatch also undertook business re-structuring exercises to achieve efficiencies in business operations by reducing fixed overheads. The business has undertaken numerous initiatives to improve the use of technology and prepare for the digital future. This will enable the generation of informative dashboards from diverse data sources, improve efficiency, ease out manual work by machine computing and build artificial intelligence. Initiatives implemented during the year include: A. Mobile Applications • AutoNaT mobility solution for E&A employees • StockNaT mobile app for channel partners and customers • Retail Management Solution for retail sales force, distributors and retailers C. Analytical Reports & Dashboards - Real-time information on key business metrics. Business Outlook •Modular Fabrication Services With the increase in commodity prices and consolidation of procurement for state DISCOMS, profitability in the metering business is expected to remain under pressure. The market for conventional meters is expected to remain flat. However, in view of the SAUBHAGYA scheme, the market for smart meters seems to be growing. The trend is towards higher technology products like AMR, prepaid and smart meters. UDAY and other centrally funded schemes like DDUJY and IPDS will lead to improvement in payment position at utilities. . Engineering Services Bassein Development Project for ONGC including platforms (Living Quarters & BH Wellhead), pipelines, bridges and modifications 187 Offshore The business offers turnkey EPCIC solutions to the global offshore Oil & Gas industry encompassing wellhead platforms, large integrated process platforms and modules, subsea pipelines, brown field developments, offshore drilling rigs (upgrade and new-builds), floating production storage & off-loading (FPSO) modules, deepwater subsea systems, offshore windfarm projects and decommissioning projects. For nearly three decades, the business has repeatedly demonstrated its ability to offer custom-designed, cost-competitive solutions to the industry, with an impeccable on-time delivery record meeting international quality and HSE standards. It has successfully executed large offshore platforms and pipeline projects on the east and west coasts of India, the Middle East, South East Asia and Africa, for global companies such as ONGC, GSPC, British Gas, Saudi Aramco, ADNOC Offshore, Bunduq, Qatar Petroleum, Maersk Oil Qatar, PTTEP, Petronas Carigali and Songas. Its Offshore Engineering Centre has comprehensive engineering capabilities covering the complete project life cycle from feasibility studies, concept, FEED, 3-D model based detailed engineering and special studies to commissioning for offshore projects. Value engineering is one of the core elements in the Company's project execution, and operational excellence is a key value driver in the Offshore Engineering Centre's global delivery model. The Company's business processes are oriented towards creating value and improving the quality of deliverables on a continual basis. Its engineering expertise is backed by an institutionalized system of route maps, standard operating procedures and knowledge management. The business owns and operates a self-propelled heavy-lift- cum- pipe-lay vessel - LTS 3000 - through its joint venture, L&T Sapura Shipping Private Limited. The business secured an EPCI contract, in consortium, for three gas production platforms with associated subsea lines and umbilical's tie-ins and hook-up under a Long Term Agreement (LTA) with Saudi Aramco. On the domestic front, the business secured an EPCIC contract for Bassein Development of ONGC involving 3 well platforms, a 23-km subsea pipeline, composite subsea power cable, clamp-on works on an existing platform and modification work on nine existing platforms in the western offshore basin in India. Two other major contracts are T&I (Transportation & Installation) contracts of ONGC, one for replacement of well fluid, gas lift and water injection pipelines along with brownfield modification works on existing platforms in the western offshore field and the other for extracting gas from Daman field situated in the south-western part of the Tapti-Daman block at Mumbai Offshore. During the year, the Company successfully completed the Bassein development and S1 Vashistha deepwater projects for ONGC. Onshore: The vertical provides engineering, procurement, construction and commissioning solutions for a wide range of hydrocarbon projects covering upstream oil & gas processing, refining, petrochemicals, fertilisers (ammonia & urea complexes), cryogenic storage tanks & regasification terminals including LNG and cross-country pipelines. It has a record of successful simultaneous execution of Sailing out of Wellhead Platform Topside from Kattupalli Facility Additional development of Vasai East Project on India's West Coast for ONGC 188 Significant Initiatives: • Construction Services • Onshore Offshore The automation business is expected to build on its success in the infrastructure sector. Government regulations, which have made use of RCCB mandatory, will help the modular device business to grow. Various announcements made in the Fiscal Budget FY 2018-19 such as replacement of existing pumps with energy efficient pumps and increase in area under drip irrigation are expected to contribute to higher growth in the agricultural product business. With new medium voltage products, the switchboard business will be in a better position to increase its market share in DISCOMS. Telecom enclosures still look promising and are expected to generate revenue for the business. The Marine business envisages a positive sentiment through the 'Make in India' initiative taken by the Government for emphasizing on indigenous content – which has given us an edge over foreign suppliers. FY 2018-19 will see the conclusion of orders for the electrical and degaussing equipment for 24 ships of the Indian Navy. This provides the potential to fill up the order book after a lean patch during the last few years. With the oil prices improving, investment in the oil & gas sector of the GCC continues to improve. Growth in the MENA region is expected to accelerate to 3 % in 2018. Within MENA, GCC economies are expected to lead due to stronger growth in the region, supported by easing fiscal adjustment, infrastructure investment such as the UAE Expo 2020, and reforms to promote non-oil-sector activity. In Kuwait and Oman, for all major EPC awards, In-country Value (ICV) content and Export Credit Agencies (ECA) are likely to impact the businesses. Major growth is expected from the infrastructure segment. With the addition of focused products for infrastructure in the product basket, we are hopeful of getting a significant share of Infra business. Mumbai International Airport's Network Operations Centre Smart, prepaid meters 186 In an environment where uptick in private capex is not visible, liquidity continues to remain a worry; and with core sectors not holding any promise, fresh order bookings continue to be a challenge. As per industry estimates, the LV Switchgear market is expected to grow by 8 to 10 % and reach 7,600 crore by 2020. LARSEN & TOUBRO Overview L&T Hydrocarbon Engineering Ltd. (LTHE) delivers integrated design-to-build world-class solutions for the global oil & gas industry, including oil & gas extraction and processing, petroleum refining, chemicals & petrochemicals, fertilisers and cross-country pipelines and terminals. The Company's in-house capabilities, synergized through strategic partnerships, enable it to deliver a single-point solution for every phase of a project from front-end design through detailed engineering, procurement, fabrication, project management, construction and installation up to commissioning services. The key aspects of LTHE's business philosophy are on-time delivery, cost competitiveness, high quality standards, with a focus on best-in-class HSE and IT security practices. Integrated strengths, coupled with an experienced and highly-skilled work force, are the key enablers in delivering critical and complex projects. Over the years, we have garnered a reputation for simultaneously executing multiple projects. We believe in an attitude and approach that allows for flexibility of operation and agility in response. The business has repeatedly delivered, large, critical and complex projects, globally, by virtue of its customer focus and responsiveness, experienced and highly skilled human resources, excellent Quality and HSE practices and culture of excellence. The business has a fully-integrated capability chain, including in-house engineering and R&D centres, modular fabrication facilities with waterfront, as well as onshore construction and offshore installation capabilities. The principles of the Company's business philosophy are striving for excellence in corporate governance, HSE and quality standards, extensive IT-enabled processes, digitalization, state-of-the-art IT security practices, on-time delivery and cost-competitiveness. The Company's major facilities in India include Engineering & Project Management Centres at Mumbai, Vadodara, Chennai and Bengaluru and Fabrication Yards at Hazira (near Surat) and Kattupalli (near Chennai). Its overseas presence is primarily in the Middle East in UAE (Sharjah), Saudi Arabia (Al-Khobar), Kuwait and Oman (Muscat). The business also has a major Modular Fabrication Facility at Sohar in Oman, held through a subsidiary. The Company caters to clients across the hydrocarbon value-chain through the following business verticals: Hydrocarbon Business With the formation of UDAY, the liquidity position of utilities has improved, thereby giving more powers to state utilities to decide and award orders. This has resulted in improved order intake by the metering business. The switchboard business posted a good performance for the year, except that the international order intake was lower. Overall, the domestic business posted improved performance over the previous year. VAT implementation with effect from 1st January 2018 in the Middle East, e.g. KSA and the UAE, has so far been smooth. Product Launches power, health, sanitation, etc., creating an environment for further growth in the economy, which grew by 7.2% in 2017. The Defence business is structured into two business groups: 1. Defence & Aerospace 2. Defence Shipbuilding (reported under 'Others' segment in financial statements) 1. Defence & Aerospace L&T's Defence and Aerospace (D&A) business is today engaged in design-to-delivery solutions and serially produces these across its chosen defence segments. For over three decades, L&T has focussed on design, engineering and building Indian products, systems and technologies with Defence Research and Development Organisation, India (DRDO), as well as with its in-house research and development. The business has developed and is into manufacturing artillery systems, air-defence systems, land & naval weapon systems with associate fire-control solutions, naval equipment & systems, engineering systems for land and naval forces, military bridging systems, communication systems, missile propulsion air frames and rocket motors for space- launch vehicles. L&T has stayed committed to 'Make in India', and has invested in creating multiple work centres across the country dedicated to the defence business. These include the assembly & integration facility at Talegaon near Pune, missile sub-system manufacturing facility at Coimbatore and the defence electronics facility at Bengaluru. Besides these dedicated facilities, specific work-centres are set up at Hazira (near Surat) for the strategic programme, Ranoli (near Vadodara) for advanced composites, at Powai (Mumbai) for prototype development and testing, and a site at Vishakhapatnam operating under the GOCO model for a strategic programme. L&T continues to develop indigenous systems and solutions for the 'Indigenously Designed, Developed and Manufactured' (IDDM), 'Make' and 'Buy and Make Indian' category of programmes under the Defence Procurement Policy. It has planned investments in its Product & Technology Development Centre at Powai and at Bengaluru for technologies of the future. The business has a Joint Venture (JV) with MBDA (world leader in missiles and missile systems), and is well-poised to develop and produce futuristic missiles and missile systems to meet the growing potential requirements of the Indian Armed Forces. K9 Vajra-T 155mm/52 Cal Self-Propelled (SP) Tracked Gun 180 Pinaka Multi-barrel Rocket Launcher LARSEN & TOUBRO 2. Defence Shipbuilding The shipbuilding business operates two defence shipyards one at Hazira Manufacturing Complex (since 2007) and a greenfield mega shipyard at Kattupalli near Chennai (since 2012). Located across a sprawling 1225-acre complex, the Kattupalli Shipyard is India's largest shipyard, designed in-house, and built to globally benchmarked technological practices. Dedicated, independent Design Centres for warships and submarines are equipped with integrated 3D design, analysis, virtual reality and Product Lifecycle Management, interfaced with project management and ERP systems in line with global best practices. The shipyards have successfully delivered interceptor boats, offshore patrol vessels and a floating dock for the Indian Navy, with the remarkable achievement of each vessel being either ahead of time or on schedule a new benchmark in the Indian shipbuilding industry. L&T's defence business provides indigenous solutions across the spectrum - from platforms to surveillance- to-strike capabilities. Having started as a diversification initiative primarily with the R&D model, the business has metamorphosed through growth phases, developing technologies, products, systems, and providing solutions across the communication, weapon & weapon delivery systems, and platforms for naval applications. Currently, the business has grown into an integrated portfolio and serves the Armed Forces and the Defence Research & Development Organisation (DRDO). Business Environment Overview 179 Implementation of initiatives like Dindayal Upadhyaya Gram Jyoti Yojana, UDAY, SAUBHAGYA, Smart Grid, Pradhan Mantri Krishi Sinchayee Yojana and increased focus on renewable energy are visible on the ground. Other Governmental initiatives like Make in India, Smart Cities, increased infrastructure spending, etc., also hold promise. The rising oil and metal prices, slow climate of order finalisation and liquidity issues continued to pose challenges for the businesses. LARSEN & TOUBRO responded to the slowdown with restrictive import policies and the demand for localization. On the domestic front, major economic reforms, viz. Demonetization and the introduction of the Goods & Services Tax (GST) led to a delay in the tendering process and investments. The order inflow for the Nuclear business was impacted due to slow progress in order placements. Surplus capacities and limited demand led to aggressive competition and put extensive pressure on pricing and deliveries. The business focused on operational excellence to deal with the challenging market scenario and regained its competitiveness. Major orders executed in 2017-18 include equipment for RAPID, EXXON, KNPC AL ZOUR, CPCL, IOCL, KBR Lotte Chemicals etc. Major orders received include orders for reactors, columns and vessels from HPCL including heaviest hydro processing reactor by L&T - 1840 MT, coke drums from Marathon USA, a major nuclear order for steam generators and end shields for GHAVP, Haryana. Significant Initiatives In order to maintain its leadership position, the business has drawn up a five-year Strategic Plan focusing on profitable growth. Major initiatives include product portfolio restructuring, key account management, talent management and organization excellence. Digitalization has been identified as a key driver for improving quality and productivity. The culture of continual improvements in operations helps the business attain global benchmarks. The Product & Technology Development Centre of the business is focusing on the development of new products and manufacturing technologies. The areas of focus include welding and metallurgy, heat transfer, hydrodynamics and computational fluid dynamics. Outlook With the uptick in crude oil prices, there is revival in the demand for oil in international markets. Global growth started picking up towards the end of FY 2017-18, and the business outlook for the Process Plant sector looks optimistic, with major investment proposals expected in South East Asia, MENA and the domestic market. Major investments are expected in five to six refineries around the world in view of the increase in global demand. Foremost opportunities include Takreer in Abu Dhabi, DUQM in Oman, KNPC in Kuwait and Thai Oil in Thailand. The domestic market is also showing signs of revival of the Capex cycle by major players in the petrochemical sector. Investments are expected in the domestic sector by IOCL, HPCL, HMEL and BPCL for capacity enhancement and BS-VI upgradation to comply with the applicable fuel standards. This is going to benefit the business in the form of steady order inflow in the medium term. In the Fertilizer sector, major opportunities include revival of sick FCI and HFCL units, energy saving and capacity enhancement projects driven by the New Urea Policy 2015 (NUP 2015). The upcoming opportunities in Talcher Fertilizer will also open fresh avenues of business growth. In the Nuclear sector, fleet procurement opportunities in 700 MWe PHWR projects will provide large growth opportunities in FY 2018-19. Heavy Thick Vessels (3,312 MT) for KNPC Al-Zour Refinery, Kuwait MENTO 600 Defence and Aerospace In line with the motto of 'Make in India' and 'Ease of doing business' agenda, the Government has brought about major improvements in policies in the Defence sector. The enabling policies include release of a Strategic Partnership Policy, Simplified Make II Procedure, announcement of Defence Industrial Corridors and a draft Defence Production Policy. With these policy initiatives moving towards creating a level playing field over the past three years, the import content has shown a downward trend. Methanol Converter major allocation of the capital budget is to meet existing commitments of MoD, and the allocation to undertake new acquisitions is likely to be under pressure. With the preferential categorization of acquisition programmes towards indigenous sourcing, India's imports are expected to continue to show downward trends, going forward. There is also active support and facilitation by the Government towards indigenous defence production and export. Electrical & Automation Business Overview L&T's electrical and automation (E&A) business manufactures a wide range of products and system for distribution, regulation and control of electricity along with metering products. The business is a major player in the system integration business. Its products include low and medium voltage switchgear products, electrical systems, marine switchgear, industrial and building automation products, energy management systems and metering solutions that cater to industry, utility, building, infrastructure and agriculture segments. The E&A business is structured into two Strategic Business Groups (SBGs) - Products SBG and Projects SBG. The business has been increasing its penetration in new segments like telecom, smart e-cities, healthcare, etc., by offering innovative solutions, while consolidating its position in the retail segment with a new range of consumer products. The major strength of the business is its elaborate in-house design and development facilities for new products and life cycle management of its existing range of products. The business has six DSIR-approved R&D facilities and dedicated test laboratories in India that specialise in diverse skill sets. These centres network with international labs, testing centres and academic institutions to keep abreast of new technology trends and introduce them to customers in different segments. The business also has well- developed tooling facilities with state-of-the-art manufacturing systems and processes in place for high precision tools, which are a pre-requisite for high- quality products. Business Environment With a notable rebound in global trade, the world economic growth rate reached 3.6 % in 2017. This was driven by an investment recovery in advanced economies, rebound of the European economy, continued strong growth in emerging Asian markets, and signs of recovery in several commodity exports. The global growth rate is expected to clock up to 3.9 % in 2018, which would be highest in this decade. The geopolitical situation across the world is also changing fast. The private investment climate in India has remained subdued due to stresses in the balance sheet. The dust around GST implementation is yet to settle. The year witnessed a good monsoon, as well as policy announcements in many sectors such as infrastructure, L&T offers India's widest range of switchgear to a variety of sectors 811621 443534 The Capital Budget for Defence in FY 2018-19 has grown by around 7% as compared to that during FY'18. The 183 LARSEN & TOUBRO 182 Additionally, its six Switchgear Training Centres at Pune, Lucknow, Coonoor, Vadodara, Delhi and Kolkata promote good electrical practices in the industry. Manufacturing operations are located at facilities at Navi Mumbai (Mahape & Rabale), Ahmednagar, Vadodara, Coimbatore and Mysore in India as well as in Saudi Arabia, UAE (Jebel Ali, Dubai), Malaysia, Indonesia and the UK. With sharper focus on gaining growth momentum, the business reiterates its commitment to nation-building. In the Aerospace segment, L&T collaborates with ISRO as technology partners for the development of special- purpose test facilities for India's space programmes. In the wake of meeting increasing demands of the space sector in a timely manner, ISRO is exploring outsourcing of launch vehicles and sub-assemblies to the private sector. Significant Initiatives The Floating Dock designed and built for the Indian Navy. The business is focused on achieving a profitable growth as per its Strategic Plan. It has been built on the strengths of R&D and Design, matched by great production performance over the past three decades, with unstinted technology, product development and investments in innovation. The new Integrated Reporting Standards which the management has decided to embrace from FY 2018-19 stresses upon the need to look at sustainability even more comprehensively, and commitment to social programmes. The business continues to efficiently leverage human capital, invest across work centres towards digital transformation, focus on conserving and utilizing alternative sources of energy, and further enhancing efficient process and business sustainability, besides protecting the environment. L&T is building 54 Interceptor Boats for the Indian Coast Guard One of seven offshore patrol vessels designed and built by L&T INDIANG HE C-431 भारतीय तटरक्षक 181 With regard to implementation of the Strategic Partnership Policy, Request for Information (RFIs) for conventional submarines (P751) and the Future Ready Combat Vehicle (FRCV) armoured platform were issued this year to foreign OEMs. EOIs to Indian as well as foreign OEMs are expected to be issued. L&T is likely to be positioned to be selected as a Strategic Partner in key segments. The JV with MBDA is well positioned to address IDDM opportunities, 'Buy Indian' programmes as well as 'Buy and Make Indian' programmes with access to latest state-of-the-art technologies like the Fifth Generation technology for Anti-Tank Guided Missile (ATGM). The Government has awarded L&T the largest-ever contract on a private player for Tracked SP Artillery Howitzers. Therefore, L&T is setting up an Armoured System Complex at Hazira to serially produce these K-9 Vajra Howitzers. This programme has served as the clear indicator of the MoD's commitment to push the 'Make in India' agenda. Outlook With the draft Defence Production Policy highlighting the vision 'to make India among the top five countries of the world in Aerospace and Defence industries, with active participation of public and private sector...' the preference for indigenously designed and developed systems will result in opportunities in adjacent domains. Over the medium-term, significant opportunities are envisaged in programmes for new-build naval (surface as well as underwater) platforms, refit of conventional submarines, artillery and air defence guns, close-in weapons systems, military bridging systems, missile programmes (repeat orders), and sub-systems for space launch vehicles. L&T is poised and positioned to play a proactive role in ensuring self-reliance of our nation through successful 'Make in India' initiatives. R. Shankar Raman Whole-time Director & Chief Financial Officer the wellspring of joy Health S. N. Subrahmanyan S. N. Roy Whole-time Director & Subramanian Sarma Non-Executive Director, L&T CEO & Managing Director (L&T Hydrocarbon Engineering) CEO & Managing Director L&T's CSR programme in the health sector aims at making quality healthcare services accessible and affordable without anyone having to face financial hardship. L&T focuses on strengthening the Government's health programmes like family welfare, mother and child health, HIV-AIDS, Tuberculosis, Blindness control, Diabetes detection and treatment and reproductive health services. It also provides services related to lifestyle diseases like hypertension and cardiac problems. Group Chairman Jai Ramakrishna Institution English Medium School, Navagam, Gujarat, supported by L&T • Interventions Health Centres: A team around ninety well-qualified medical rehabilitation consultants and 12 professionally- staffed, well-equipped multi-speciality centres provide the following services: Physical health: Health Centre offers tertiary health services including Family Planning surgeries, Day Care General Surgeries, Endoscopy Procedures and Dental Procedures. It also provides eye checks, mother and child health care, physiotherapy and occupational therapy, infertility treatment, hearing-speech services and a skin clinic focusing on leprosy treatment and communicable diseases. Psychological health: Psychiatric OPDs and family counselling services address mental health and stress related issues, while a Child Guidance Clinic helps younger members of the community. Health Camps: Mobile health vans visit the communities around the centre. Specialised health camps covering Eye care, dental, Paediatric and Gynaecological care. Sr. Executive Vice President • Specialised health promotion programme with focus on hygiene, reproductive health and family life education for children and adolescents in Government remand and corrective homes and homes for neglected children HIV and AIDS Management Programme: L&T's state-of-the-art Anti-Retroviral Treatment (ART) 16 (Power, Heavy Engineering & Nuclear) Roads, (Infrastructure) centre provides diagnostic, medical and counselling services in association with National AIDS Control Organisation (NACO). Systems Underwater Platforms • Submarines & Aerospace Defence & Runways & Elevated Corridors (Domestic) • Special Bridges Construction • Nuclear Projects) (Hydel, Tunnels Special Projects • Defence • Metros Corporate Centre HR Infrastructure Corporate Development Projects Shailesh Phatak Yogi Sriram Hasit Joshipura Corporate Finance & Accounts Power Development D. K. Sen Whole-time Director & Sr. Executive Vice President TB related services: Comprehensive TB related treatment in Mumbai including individualised treatment OPD, check-up, diagnostics, medicines and nutrition, support, home visits and counselling. atment Dialysis centres: 2384 dialysis sessions have been conducted at the L&T-run kidney dialysis centre at Thane. More than 2000 women are engaged in small enterprise such as tailoring of garments, beauty culture, home furnishing, spices, jam, pickle, crochet, weaving, knitting, block printing and Kantha stitch, etc. This programme is not only empowering the women economically but also helping instil self-confidence. Their monthly average income is between 5000 and 8000. Solar Photo Voltage Technician training at Pilkhuwa CSTI, Uttar Pradesh CSTI-trained Electrician working at Dindigul project E Imm ELECTRICAL EQUIPMENT AUTHORIZED PERSONNEL ONLY ction R Heavy Civil Transportation Defence Infrastructure Infrastructure Hyderabad Metro Corporate Audit Services Corporate Secretarial R Shankar Raman Shailendra Roy LARSEN & TOUBRO J D Patil D K Sen KV B Reddy • Military Communication Corporate Affairs Heavy Engineering 2000 women become self-reliant! 15338 people have been trained in employable vocational skills this year. 7365 youth completed various courses at CSTIs this year Cancer detection camps: Targeted at women, L&T promotes preventive education and early diagnosis of cervical and breast cancer through cancer detection camps. Impact 350076 Lives touched through various health services L&T T. B. Clinic, koldongri-Andheri, Mumbai XXXO XXXX XXXX! XXXIX XXXX 17 L&T runs an exclusive TB clinic in Koldongri, in the suburbs of Mumbai, in partnership with the Municipal Corporation of Greater Mumbai (MCGM) providing CAT I, II and IV treatment to the patients, with a cure rate of 85-90%. 18 - creating a world of possibilities Skill development has emerged as a key strategy to realize the potential of demographic advantage of having the youngest workforce with an average age of 29 years in India. L&T's skill building initiative aims to create human resources for improving the country's competitiveness and growth, especially in the field of Construction skills by training the youth. Interventions Construction Skills Training Institutes (CSTIs): L&T runs 9 CSTIs in 9 states, providing. free training in construction skills for the large unorganised workforce in the sector, making them employable. Employable skills training for women: At many L&T sites, local women, young girls and physically-challenged persons are trained in various employable skills as per their interests and aptitude. The courses include Tailoring, Embroidery, Beautician Course, Food Processing, Home Management, Computer Skills, Basic Education and Basic Health. Impact: • • Skill Development Nuclear The objective of the programme run by L&T Kolkata, was to empower women in the slums of Kolkata and neighbouring villages, by providing them with alternative paid employment by manufacturing products for the local and overseas markets, and to improve the status of women and girls in the society. Equipment & Systems Balwadi program: L&T strengthens early childhood development program by improving the quality of balwadis and anganwadis in urban slums and rural areas, ensuring entry into the mainstream education system and improved enrolment in the primary schools. . • • Supplementary food is provided in tribal balwadis. Toy vans visiting anganwadis provide necessary childhood development activities Training of Trainers for Balwadi teachers for capacity building. Field Bund at Okkipalayam, Tamilnadu textbooks, notebooks and sports kits are provided to under privileged students in government and unaided low-income schools in rural and tribal villages. Toilet Blocks at Lasadiya, Bhim, Rajasthan 15 Afterschool community study centres offer supplementary education and reach out to the first- generation learners and children from weaker sections. • Efforts are directed towards designing a curriculum for easy learning that is aligned with the school curriculum. · Focus on Science Innovation and Technology: L&T has supported Government initiatives and sponsored Mini Science Centres in rural schools, simplifying complex scientific concepts • A Science on Wheels program reaches out to 3293 children in 17 schools, encouraging students to develop interest in science and technology-related subjects. • To facilitate the access of e-learning technology to rural and tribal students, L&T has provided computer labs and digital classrooms in several rural schools. Capacity building: Teacher Training Programmes are conducted to enhance the quality of education being imparted to students studying in Government schools and low-income trust run schools. Overall development of children: . NL Children are also given inputs on life-skills and extra-curricular activities such as dance, music and drawing. Educational support: Supplies such as uniforms, Interventions The community members also devised methods that improve the arability of land. Sanitation drives The Swachha Bharat Program of GOI, gave the necessary impetus to initiate the sanitation drive in villages. L&T trained local youth in masonry skills and used local materials to achieve the following: • Construction of over than 970 well-designed toilet-cum -bathrooms . Community-based monitoring committees to deter open defecation . L&T received ISC-FICCI sanitation award for Best Corporate Initiative in Sanitation this year. Impact Basic Infrastructural support includes construction or repair of the classrooms, toilet blocks and water stations for basic hygiene facilities, midday meal kitchens and sports ground. • Access to water for drinking, sanitation, irrigation, cultivation of fodder and extra crops Two revenue villages and 13 hamlets are open defecation free, benefitting 1100 households Improved economies, for 11000 households, raising the aspirations of the people. • Chettipalayam watershed project, South Coimbatore, enabled water holding of 47 lakh litres in one year and made 18 hectares of barren land cultivable Education - the mainstay of progress We commit ourselves to make quality education accessible to each and every child by introducing relevant curriculum, improving teaching methods and ensuring parent and community participation in creating learning environment. • Farmers were trained in agricultural practices with optimal use of water and use of zero budget natural fertilisers to retain the fertility of the land. • Nuclear Power • Education sessions on health and hygiene Welfare & Community Services Health, • Employee Relations Industrial Corporate Campus & of Powai Management • Corporate Technical Training Administrative Services •General & Transmission ⚫ Power Metros ⚫ Ports • Insurance • Taxation Relations • Investor • Corporate Infrastructure • Educational and recreational outings are organised Specialised health camps are organised for children for eye check-up, early detection and treatment of anaemia, malnutrition and other childhood diseases. • Corporate ⚫ CSR with children and adolescents are conducted for preventive care and for promoting healthy sanitation practices. Creating learning environment: The community level School Management Committee (SMC) and parents are invited for a dialogue to encourage students to continue their education, as well as for sustaining L&T's efforts in future. Impact 250 schools gained better facilities that increased enrolment and retention of students. • 1,56,168 students covered through our education projects this year. - A. M. Naik Leadership Team 10 Sustainability 9 Listed Companies Subsidiary Companies Corporate Functions Travel & Aviation • Corporate Brand Management & Communi- cations • Corporate • Legal Strategy & Lakshya 2021 • Mergers & Acquisitions ⚫ Corporate As on 1st July, 2018 Management from women and Self Help Groups (SHGs) were created. They assumed the responsibility to maintain the structures created through the project • Chandigarh Rajpura ● Jaipur Udaipur New Delhi Faridabad Lucknow Varanasi Durgapur Nationwide Network Ahmedabad Vadodara ■Pithampur Ranchi Jamshedpur Rourkela Cuttack Hazira Nagpur Raipur Bhubaneswar Mumbai ✩ Panvel Bhopal Ahmednagar 12 LTCBMC/PRD/072018 M. V. Satish Whole-time Director & Sr. Executive Vice President (Buildings, Minerals & Metals) J. D. Patil Whole-time Director & Sr. Executive Vice President (Defence) Hasit Joshipura Sr. Vice President & Head Electrical & Automation As on 5th July, 2018 www.Larsentoubro.com Game changers This pictorial reprsentation does not purport to be the political map of India. don't dream of change. They engineer it. Over 80 years of engineering excellence Smart Cities | Construction | Infrastructure | Defence & Aerospace Special Steels & Forgings | EPC for Steel and Power Plants | Equipment for Oil & Gas Technology, IT and Financial Services | Realty For more information about L&T's capabilities, please email: infodesk@Larsentoubro.com Regd. Office: Larsen & Toubro Limited, L&T House, N. M. Marg Ballard Estate, Mumbai - 400 001, INDIA CIN: L99999MH1946PLC004768 LARSEN & TOUBRO At Larsen & Toubro, we know what it take to change the game. We draw on our rich engineering heritage. We cultivate the finest minds. And we partner nations, to build a newer, brighter future for all. Committees (VDCs) with 50 per cent participation Lonavala Hyderabad ⚫ Engineering & Construction Projects ▲ Product & Equipment Supply ◆ Manufacturing / Fabrication Facilities ■ Agents Note: Map is broadly representative of L&T's presence in markets worldwide. For details of establishments within India, please refer to 'Nationwide Network'. Corporate Social Responsibility Contributing towards Social Development and Growth L&T is an engineering and construction conglomerate with a concern for the community. Building on many decades of social responsibility activities, the company contributes to inclusive growth by empowering communities and accelerating development through interventions in water & sanitation, health, education and skill development. L&T- eering, a structured volunteering programme, inspires and empowers employee volunteers or L&T-eers to contribute their time to community development programmes supported by the Company, thereby enhancing social impact even further. The employees' wives and female employees power the Prayas Trust, driving CSR initiatives in their own capacity and reaching out to remote communities. Even before the CSR section was introduced in the Companies Act 2013, L&T had been interacting with the ✰ Offices community around L&T facilities and providing health, education and skills development services to those who needed it most. Water & Sanitation - meeting the bare necessities The Integrated Community Development Program of L&T started in 2014-15, focused on making water - the very 'necessity of life' - available to four water stressed districts in Rajasthan, Maharashtra and Tamil Nadu, covering 11006 households across an area of 9337 hectares. With an agenda focused on community empowerment through Integrated Community Development, we have ensured water availability for drinking, sanitation and agriculture Interventions • The water and soil conservation structures like check dams, anicuts, contour trenches, farm bunds and farm ponds constructed with the participation and contribution of the community, helped in increasing the water level in the water bodies in these villages and retain soil moisture. Water conservation structures built to meet domestic needs, Chettipalayam, Tamil Nadu. 14 இத்தக்கால் மண்டபம் பேரூராட்சி குணாதொட்டி • The community groups like Village Development In 2014 we consolidated our CSR programmes with a focus on certain development areas that align with the national development agenda and the global sustainable development goals. Through the CSR theme 'Building India's Social Infrastructure' we are pleased to contribute to the social change in India. Here is a snapshot of our CSR interventions across four key thrust areas. Talegaon Pune LARSEN & TOUBRO Global Presence Vijayawada Bengaluru Mysore Coimbatore Pulicat Kattupalli Chennai Kancheepuram Puducherry Kochi Serampore Kolkata 13 Registered Office Power Plant Shipyards Offices Knowledge City Leadership Development Academy Construction Skills Training Institutes* + 'Campus' denotes facilities for design and manufacture * Part of L&T's Corporate Social Initiatives Guwahati Campus+ • Risk Power Limited • Coal-based EPC Projects LLC, Oman Engineering • L&T Heavy • L&T Special Steels & Heavy Forgings Subsidiaries • L&T Piping Center Power & Thermal Petrochemicals • Fertilizer, Gasification Oil & Gas and • Refinery, Cracker, Process Plant Refit • Conventional Submarines • Warship Refits New Build •Warships Defence Shipbuilding Missiles Systems Ltd. L&T Shipbuilding Limited .L&T MBDA Subsidiaries Projects • Gas-based • Nuclear Projects Manufacturing • Axial fans & • Heavy Foundry • Pulverisers Reduction Catalytic Selective Desulfurization & Flue Gas Electrostatic Precipitators • Accounts •Treasury • Enviro Systems- and Secondary Piping Systems JVs/ ⚫Nuclear Primary • High-Pressure & Generators • Nuclear Turbines Generators Turbines & and Supercritical Supercritical • Ultra Boilers and Supercritical Supercritical • Ultra Piping Electricals Projects Engineering Systems Capability Unit • Plant Engg. & Design Services Center • Engineering & Technology • Power Training Institute Joint Ventures • L&T MHPS Boilers • Finance Turbine Generators • L&T Howden Joint Venture for Engineering & Design • L&T Sargent • Marine & Lundy • Nabha Power Uttaranchal Hydro Power Limited • L&T Power Plants and Hydro of Thermal • Roads • Construction Preheaters • L&T MHPS & Mega Civil • Weapons & Aggregates Ltd. • Hitech Rock Products & Infrastructure Engineering Ltd. • L&T Subsidiaries Consortium- Riyadh Metro Orange Line Mobility • ArRiyadh New Line Doha Metro Joint Ventures ⚫ALYSJ JV Gold Transportation (International) Geostructure LLP • Development • Railway Systems • Railway • LWR L&T & Armoured Railway ⚫ FBR ⚫ ITER • Guns, Missiles ⚫ PHWR Construction • ATVP •Ports & Harbours India has an ambitious plan to nearly double its refining capacity to about 438 MMTPA by 2030. The gas energy mix is also expected to shift from the current level of 6.5% to about 15% by 2022. The demand for petrochemicals is expected to go up by 10 MMTPA by 2020. Over 11,800 km of PNGRD-authorized pipeline projects are pending implementation. The Indian Public Sector refineries have embarked on capacity expansion plans. Some of these refineries also have investment plans for integrating petrochemical projects along with refinery upgrade. This will offer opportunities to the Onshore and Construction Services verticals. The roll-out of a comprehensive Urea Policy by the Government has led to the revival of public sector urea plants at Gorakhpur, Sindri and Barauni. Energy-efficiency improvement projects are being actively pursued by fertilizer units. The Government is focusing on setting up LNG infrastructure and investments in LNG receiving plants. Both land-based terminals as well as Floating Storage Regasification Units (FSRU) are on the anvil. The GCC will see higher outlays for downstream and petrochemical projects, particularly in Saudi Arabia, the UAE and Kuwait. Saudi Aramco plans to spend over USD 300 billion over the next 10 years, while UAE and Kuwait are planning to spend USD 109 billion and USD 112 billion respectively over next 5 years. The integrated refinery and petrochemical complex model continues to gain momentum. With strong capabilities and capacities built over the years, the business is well-positioned to leverage these opportunities. Shale gas/oil will drive petrochemical and fertilizer investment in the US, offering opportunities for high-value engineering and modular fabrication services. 3-D model of Normal Paraffin & Derivative Complex under execution One of our 'high-end' engineering design centres 194 LARSEN & TOUBRO Information Larsen & Toubro Infotech's (LTI) global headquarters in Mumbai. The Company's solutions focus on improving efficiencies for its clients. Overview The Global IT-BPM industry grew by 4.3% and the IT-BPM market (excluding hardware) stood at USD 1.3 trillion in CY17. Indian IT-BPM industry revenues (including hardware) stood at USD 167 billion in FY18. The industry added ~USD 12 billion in incremental revenues last year, representing year-on-year growth of ~8% in USD terms. IT-BPM export revenues for the industry for FY'18 are expected to reach USD 126 billion, i.e. growth of 7.7% over the past year. Domestic IT-BPM revenues are estimated at USD 26 billion, a growth of 8% from USD 24 billion in FY'17. IT-BPM export revenues are expected to grow by 7-9% in FY'19, and the domestic market is likely to grow by 10-12% next year. Digital technologies are increasingly becoming all-pervasive and are not only blurring the boundaries between business units (technology, finance, marketing, etc.) but also between companies; it is now no longer tech and non-tech companies. Many companies - especially in the banking, automotive and manufacturing spaces - are re-branding themselves as tech companies. Source: NASSCOM IT-BPM Strategic Review 2018 Our Business Larsen & Toubro Infotech (LTI) (NSE: LTI), is a global technology consulting and digital solutions company helping more than 300 clients succeed in a converging world. With operations in 27 countries, LTI goes the extra mile for its clients, accelerating their digital transformation with its Mosaic TM platform, enabling clients' mobile, social, analytics, IoT (Internet of Things), cloud and cyber security journeys. In 2017, NASSCOM ranked LTI as the sixth-largest Indian IT services company in terms of export revenues. LTI was amongst the top 15 IT service providers globally in 2017, according to the Everest Group's PEAK Matrix for IT service providers. Its clients comprise some of the world's largest and best-known organizations, including 60 global Fortune 500 companies. LTI offers an extensive range of IT services to its clients in diverse industries such as Banking & Financial Services, Insurance, Manufacturing, Energy & Utilities, Consumer Packaged Goods, Retail and Pharma, High-Tech and Media & Entertainment. Its range of services includes application development, maintenance and outsourcing, enterprise solutions, infrastructure management services, testing, digital solutions, cyber security and platform-based solutions. The Company serves its clients across these industries by leveraging its domain expertise, diverse technological capabilities, wide geographical reach, an efficient global delivery model, thought partnership and 'new age' digital offerings. Headquartered in Mumbai (India), LTI is part of the L&T Group. The Company has inherited the promoter Group's engineering and innovation mind-set, domain expertise, and large programme management capabilities. It leverages the strengths and heritage of the L&T Group, imbibing Towards providing geographical risk diversification, the Company is looking to explore newer markets which offer good long-term business potential, and has undertaken intense pre-qualification efforts. Algeria, Iraq and Indonesia will see increased levels of activity, and will potentially offer differentiated margins. Technology Business The Company is enhancing its current practices through digital/new-age technological advances. The business has 193 LTI Competition remained stiff, with some of the competitors exercising subsidized prices for limited market potential and with new entrants achieving pre-qualifications. Regional players are bidding for Indian projects with an intent to load their assets and new competitors have also started bidding for domestic prospects. Commodity prices are firming up and forex rates continue to be volatile. Significant Initiatives: The business has set a vision to 'Revolutionize the Hydrocarbon Industry' and mission of 'Execution Par Excellence'. During the year, the business announced the relaunch of LAKSHYA 2021, in which strategic imperatives have Major role in construction of world's largest Pet Coke Gasification Complex and Ethylene cracker for Reliance Industries at Jamnagar, India 191 been identified for each of its verticals. The Company lays continued emphasis on sharper bidding to enhance its market share and execute its projects well to protect bid margins. The business embarked upon an Operation Excellence initiative, which is aimed at achieving refined cost structures, alignment for timely project deliveries, and optimizing fund deployment. This initiative has started yielding results for the Company, as reflected in enhanced cost-competitiveness in its bids and further improvement in its bottom-line for projects under execution. The Company's capability-building initiative has made significant progress in terms of building its portfolio and project leadership as well as functional group development. This initiative is aimed at building globally-benchmarked project leadership teams for executing large international projects, and developing and institutionalizing an international project capability development engine. Innovation will be a key differentiator for disrupting set norms and the way business is conducted in the hydrocarbon sector. An Innovation Think Tank has been formed to channelize the efforts of the organization towards enhancing its capability and capacity to enable sustainable growth and achieve execution par excellence in every sphere of the enterprise. The business has continued creating strong central functions to maximize synergy and to build a platform for easy transition from vertical to project-centric regional structure. The Centralized Supply Chain concept was rolled out and operational improvements institutionalized. also launched a digital transformation initiative towards further improving productivity across its functions. Risk Management: Pro-active Risk Management has been identified as a key strategic initiative to ensure sustainable growth. Risk Management is an integral part of the overall governance process to identify, segregate, mitigate, control and monitor various risks at business, prospect and operational levels. The Company's risk management policy and guidelines have helped it to create a consistent set of standard risk tracking templates and measure the risk levels. This enables it to develop the ability to anticipate and respond to emerging challenges in a timely manner. Each project goes through a structured pre-bid risk review and periodic execution risk reviews, enabling effective monitoring and raising timely alerts. The Company promotes a culture of transparency in flagging emerging issues as early warning signals to management for timely attention. Internal Controls: The management has established internal control systems commensurate with the size and complexity of the business. The internal control manual provides a structured approach to identify, rectify, monitor and report gaps in the internal control systems and processes. The Group follows well-documented Standard Operating Procedures (SOPs). The operating effectiveness of various controls is periodically tested, and deficiencies (if any) are promptly rectified. Human Resource Development: The business has implemented several initiatives focused on acquiring and nurturing talent. It firmly believes that people are its greatest asset, and has adopted various policies and Group Gathering Station-11 for RIL's Coal Bed Methane Field Development Project at Shahdol, Madhya Pradesh, India Production Deck Modules (PDMS) for Saudi Aramco ready for despatch from Modular Fabrication Facility, Hazira In the domestic offshore sector, ONGC has reported significant oil & gas discovery in its Mumbai High fields, Despite lack of appetite by Korean competitors, competition intensity is expected to remain high until 2019 at least, due to the resurgence of European and the emergence of the Chinese competition. Clients are expecting EPC contractors to share the benefit of Value Addition over the tenure of the project. Project schedules are also becoming increasingly tighter. Gradual firming up of the crude oil price is expected to lead to increased project budgeting by IOCs and NOCs. A major section of this investment is expected to come from North America and the Middle East. Outlook: As a responsible Corporate Citizen, the Company is committed to implementing projects that will contribute to the quality of life, including schools, hospitals, skill training institutes, water supply and distribution and sanitation facilities. with potential reserves of 29.74 MTOE. Under the Open Acreage Licensing Policy (OALP), EOIs have been received by the Government of India from private players for the shallow water basins. These developments will translate into EPC tendering by 2020-2022. ONGC is progressing on its investment for development of deepwater field KG/98-2 on the east coast of India. This will provide significant opportunities to the Company's offshore and fabrication verticals over the medium term, given its strategically located Kattupalli yard on the east coast and its tie-up with McDermott and GE to develop cost-effective subsea solutions. A number of brownfield and decommissioning projects are expected to come up in the near future. Saudi Aramco is expected to spend USD 3 billion each year on offshore capital projects to maintain production. The Company received many accolades in FY 2017-18. The KOC - GC30 project received the ASSE GCC HSE Excellence Gold Award 2017 from ASSE Kuwait Chapter. MFF Kattupalli received safety awards from the British Safety Council, ROSPA and the Golden Peacock award. The Offshore business vertical received an award from National Safety Council, Maharashtra Chapter, for achieving 'zero accident frequency rate' consecutively for 3 years. During the year, the Company achieved its best-ever safety performance through a 71% reduction in Total Recordable The Company released its Sustainability Report - 'Sustainability Par Excellence' – in January 2018, in line with Company's Mission 'Execution Par Excellence'. It covers the sustainability-focused initiatives taken across the Company, and highlights the need to enhance performance across all sustainability parameters – safety, energy, water conservation and productivity. Health, Safety, Environment (HSE) & Sustainability: The business considers safety a core value, and is committed to achieving HSE excellence at the workplace by ensuring the health and safety of people and the protection of the environment. Through its 'Zero Incident Credo', the Company strives for continuous improvement in the protection and development of the health, safety, and environmental assets of its employees and stakeholders. HSE Assurance Audits were conducted to ensure the effective implementation of the HSE management system across the Company. initiatives in order to sustain healthy employee relations, growth and development as well as work satisfaction. The Company's commitment to creating a highly engaged work force is demonstrated through deployment of the GENIE: Engagement survey, business specific and managerial level interventions, communication with Senior Management through forums like 'Town Hall', webcast and video conferencing. The 'l-Too' recognition framework, initiatives like ICONS, long-service awards, team building workshops, non-monetary recognition events, etc. are periodically undertaken to enhance employee motivation. LARSEN & TOUBRO 192 Incident Rate (TRIR) and 50% reduction in Lost Time Injury rate (LTIR), which are comparable to the best global industry standards. V • its virtuous risk management and corporate governance practices. d) Energy and Utility: Clients in this space are focusing on technology to streamline operations for cost reduction. Digital investments are majorly focused on loT, Analytics, Mobility and Cloud adoption. Advanced analytics is a major investment area for oil & gas companies. Augmented reality and drones to aid worker productivity, and wearables to provide over-the-shoulder coaching to workers are some of the next-gen areas where LTI sees traction in this market. e) CPG, Retail and Pharma: Large players in CPG/retail industry segment are facing intense local competition. Consumers are seen to drift towards more online purchases, and it becomes imperative for these large players to directly engage with the consumers. LTI has helped clients in their participation across the customer journey through smart support, chat bots and automated interactions, and will continue to enhance its offerings to reinforce such digital interaction. 197 f) Hi-Tech, Media and Entertainment: In the M&E space, the changing demographic mix is leading to shifting spend patterns and is impacting ad-supported businesses. The Company sees hi-tech clients focus on faster speed-to-market initiatives, energy-efficient smart devices and industry models shifting towards pay-per-use models. Digital Business Digital strategy is evolving with unprecedented speed of change in our clients' businesses. It is creating new businesses and new paradigms for clients. The Company aims to be the digital transformation partner for clients to build their digital business and thrive in the digital era. New methodologies, like design-driven delivery, help collapse layers and be more agile for clients. For LTI, Digital will not just be a set of capabilities. It will be a Way of Working (WoW) and has these core components: • Cutting-edge capabilities . Next-gen delivery models • Extreme domain focus • Business outcome as a success metric Localization is increasingly becoming a key differentiator. ADNOC has started implementation of the In-Country Value (ICV) program while Saudi Aramco is implementing its In-Kingdom Total Vale Add (IKTVA) program with the objective of growing and diversifying the economy and creating opportunities for their nationals in the private sector. The South East Asian region continues to protect local players under the 'Bumiputra' concept. Digital inside Mosaic™ - LTI's proprietary digital transformation platform: Mosaic™ is a converged platform providing data engineering, advanced analytics, process automation, IoT connectivity and an improved solution experience to its users. The Mosaic TM ecosystem enables entities to undertake quantum leaps in digital transformation and bring an insights-driven approach to decision-making. 198 In FY'18, LTI delivered an industry-leading revenue growth of 16.7% in USD terms. With intense focus on client success and comprehensive transformation capabilities across digital, analytics, IoT, automation and cloud, LTI is optimistic about its future. The businesses of LTI's clients are being impacted at an unprecedented speed by the world of digital and exponential technologies. LTI has made proactive investments in digital technologies, bringing its in-house expertise together under the Mosaic™ platform and enhancing these offerings through acquisitions. Today, enterprises want to work with partners that are agile, can de-clutter new technologies and can co-create solutions with them. LTI's sustained investments in digital and exponential technologies are establishing the Company as the partner-of-choice for its customers worldwide. Outlook, Risks and Concerns As on March 31, 2018, LTI's headcount was 24,139. During FY'18, the Company added 2900+ net new hires. Compared to FY'17, LTI improved on attrition - the full-year attrition was 14.8% in FY'18 as compared to 16.9% last year. • Solve for society c) Manufacturing: There are three key trends emerging in this vertical. First, cloud-enabled IT modernization has become mainstream, and more and more clients are embarking on programmes to move majority workloads to the cloud and reduce the cost of maintaining internal data centres. Second, manufacturing entities are proactively assessing ERP modernization, especially in SAP and Oracle economies. Third, clients in this industry have or are building definitive roadmaps for creating digital-ready application landscapes for agility. With its focus on Industry 4.0, LTI is uniquely positioned to address the digital transformation journey for its clients. Keep learning • Go the extra mile • Be agile The Company institutionalized its five key beliefs across the organization: Anywhere, byte-sized programmes help employees to quickly brush up their skills, learn new skills or simply collaborate and learn. LTI provides a range of professional skills to develop the finer aspects of executing its roles. The Company's Anytime, Human Capital • Push frontiers of innovation b) Insurance: Spend on digital transformation is the emerging trend in this sector, despite the pressure on run-the-business spend. Life annuity insurers are focused on digital, optimized workflow and operating efficiencies as they face changing customer expectations. Property and casualty insurers are focused on analytics and speed-to-market, as market competition and the threat of adverse selection drives their need for better and faster product deployment. LTI has built deep expertise in leading insurance products like Duck Creek, Insurity and Guidewire, and has unique offerings (digital and non-digital) that can help clients reduce turnaround time for operations, one of the core enablers for cost reduction. a) Banking & Financial Services: In the US market, the softening of regulatory changes has resulted in more funds being diverted to digital and data projects, with an intent to increase efficiency. They are increasingly adopting cloud infrastructure to drive down costs through radical automation and superior asset utilization. They are moving towards master data management and analytics to allow for a single view of the customer and easier regulatory response and operations. However, in Europe, the focus will remain on modernizing core banking operations. The anxiety towards Cloud and Blockchain has subsided to a certain extent as banks see these as technology enablers rather than mass disruptors. Clients are relying on strategic partners, such as LTI, to help establish the new iterative model that some banks are looking to adopt. The Company has strong domain expertise derived from its parentage. It is at an inflexion point, being the right size to attain the agility of a start-up while maintaining the stability of an established player - which gives it a competitive advantage over its peers. Transforming as an organization to align ourselves in this dynamic world Investing in new technologies to build differentiated service offerings • Deliver amplified outcomes to our clients Transforming customer and employee experiences • Client-centricity Focusing on new large transformation deals • • Enabling new business models • The Company is focussed on amplifying outcomes for its clients by: LTI's overall business strategy for long-term growth has the following key elements: 1. Strategy Enabling revenue growth 195 . • Investing in new avenues through partnerships, alliances and acquisitions 2. Opportunities To accelerate its revenue growth, the Company has adopted a three-pronged approach, focusing on partnerships, acquisitions and association with start-up ecosystems. Together, these would assist in driving amplified outcomes for its clients. In FY'18, the Company acquired Luxembourg-based Syncordis S.A., a leading core banking implementation services provider. This acquisition is poised to aid in growing LTI's presence in Europe by deepening capabilities in the Banking & Financial services sector. The Company has also created 360-degree relationships with a few select partners, viewing them as global growth engines. The Company is creating an ecosystem to partner with innovators around the world and co-create value for clients through association with 600+ start-ups, using inputs from L&T's other businesses. The Company continues to move on its own path of transformation – 'Change from Within'. The Company executed a comprehensive brand launch and global rollout during FY'18. LTI's modern corporate identity reflects its aspiration to be a next-generation IT services company with deep understanding of physical and digital convergence. LTI also expanded its European footprint by setting up its latest development centre in Poland in FY'18. has been recognized by leading industry tech analysts in numerous studies. LARSEN & TOUBRO in a converging world Expanding in new geographies Pioneering solutions Larsen & Toubro Infotech's (LTI) Mosaic™ Experience Centre demonstrates exponential technologies The Company's relentless focus on digital, analytics, automation, IoT and cloud technologies through its proprietary MosaicTM platform is helping it stand out in the marketplace. Its cutting-edge work in these areas LTI sees its customers' world changing through tectonic changes in technology. There are three things that are happening in the industry: First, there are exponential technologies that are available today. Second, these are all-new technologies, and they are new for everyone - no one has the incumbency advantage. Third, to help clients navigate and win in these times, one needs deep business knowledge to imagine and co-create with the customer. To facilitate and deliver amplified outcomes to its clients, the Company has embraced the concept of 'Shoshin', beginner's mind - a mind that has openness, eagerness, and lack of preconceptions. In the beginner's mind, there are many possibilities; in the expert's mind, there are few. Expertise is important however, and what is needed is the willingness and openness to keep learning - and then keep building expertise. Next-gen efficient operations • Client-centricity is at the nucleus of the Company's strategy, with primary focus on solving complex problems at the convergence of the digital and physical world for its clients. LTI's long association with key clients and understanding of their business and investment in account management teams has positioned it well to deliver profitable growth. The Company has posted significant improvement in client satisfaction over the last two years. 196 This year has also witnessed several consolidations, partnerships and co-investments among EPCI players. Companies are adjusting their business models to a period of recovery. Oil majors are adjusting their portfolios by adding renewables to their energy slate. IOCs and NOCs are looking to diversify risk through co-investment outside their home countries such as Kuwait in Oman, Saudi Arabia in India and China in UAE. Service providers are hedging risks through consolidation. Modular Fabrication Services: Business Environment: 189 Coke Drum System Package for IOCL, Haldia 900 TPD ammonia plant of National Fertilizers Limited, Panipat. The vertical's major capabilities include heavy lift competency, advanced welding technologies, high levels of automation, management of manpower and material in large volumes at construction sites and Quality / HSE systems conforming to international practices. The business has also invested in strategic construction equipment, a range of pipeline spread equipment, automatic welding The business undertakes turnkey construction of process plants for refineries, petrochemicals, chemical plants, fertilizers, gas-gathering stations, crude oil & gas terminals and strategic storage facilities including underground caverns and above-ground facilities covering civil works, structural, piping, equipment, electrical & instrumentation erection, heavy lift and execution of cross-country oil & gas pipelines. Construction Services: During the year, the business successfully achieved mechanical completion of a Coke Drum System Package for Aishwarya project at Haldia Refinery for Indian Oil Corporation Limited, and a New Gathering Centre, GC-30 in North Kuwait for Kuwait Oil Company. (VDU), both for Visakhapatnam Refinery Modernisation project at Andhra Pradesh, and from the Adani Group, involving two LNG Storage Tanks for an LNG Terminal at Dhamra port, Odisha. During the year, the business received orders from Hindustan Petroleum Corporation Limited for carrying out Full Conversion of a Hydrocracker Unit as well as for a Crude Distillation Unit (CDU) & Vacuum Distillation unit Internationally, the business group is prequalified by major international oil & gas producers, and has a successful track record of project execution with international bellwethers such as Saudi Aramco, ADNOC Gas Processing, Petroleum Development Oman (PDO), Kuwait Oil Company (KOC), Kuwait National Petroleum Company (KNPC), Petronas, Dolphin Energy and Chemanol. The business has executed Lump-Sum Turnkey (LSTK) projects for various Indian oil majors like IOCL, MRPL, ONGC, OMPL, BPCL, HPCL, Reliance Industries, etc., as well as fertilizer companies like NFL, GNFC, RCF, GSFC and others. Its Design Engineering Centres - L&T-Chiyoda for onshore engineering and L&T-GULF for pipeline engineering - enable the Company to offer the complete spectrum of FEED, process and detailed engineering to clients. The Company's subsidiary, Larsen Toubro Arabia, is registered as In-Kingdom EPC ('IK-EPC') company in Saudi Arabia, and addresses onshore IK-EPC opportunities. multiple mega projects with diverse technologies from process licensors like UOP, Axens, Technip, Haldor Topsøe, CB&I Lummus, Black & Veatch, Ortloff, Exxon Mobil, BOC Parsons, Invista and Davy Process Technology. The Company has built capability and resources to execute multiple large-value complex projects simultaneously, meeting stringent delivery schedules. LARSEN & TOUBRO After a prolonged depressed market, signs of recovery are now visible, with upward movement in crude oil prices due to production cuts by OPEC countries and Russia. However, uncertainty with respect to crude oil prices still exists over the medium to long-term, leading to continued diligence by the oil & gas industry in making strategic investment decisions. machines and other plant and machinery for electro- mechanical construction works. The business has executed projects for major private sector customers like Cairn Energy, Reliance Industries, HPCL Mittal Energy (HMEL) as well as major oil PSUs like BPCL, HPCL, IOCL, ONGC and international customers like ADNOC Gas Processing, ADNOC Refining, ADNOC Onshore, Saudi Aramco, Sadara, Dolphin Energy, etc. On the international front, the business received EPC contracts for the Haliba Development Project in the UAE from Al Dhafra Petroleum Company Limited and from Kuwait Oil Company for building 48" Crude Transit Line (TL-5) from North Kuwait to Ahmadi. During the year, the business received an additional order for a new coal bed methane facility being developed in central India. The business secured various engineering contracts from GCPT, KCCEC, HPCL, ISCO, Al Ghanim, IOCL, etc. and EPCM contracts from GACL. The Company's country-specific entities render construction support to international onshore projects - Larsen & Toubro Electromech LLC in Oman, Larsen & Toubro ATCO Saudia LLC in Saudi Arabia, Larsen & Toubro Kuwait Construction General Contracting WLL in Kuwait. During the year, the business has signed a Memorandum of Agreement with Institute of Chemical Technology (ICT), to build ethanol plants based on fully indigenous technology developed by ICT for producing 2G ethanol. The business has a large resource pool of over 4 million engineering hours. A large portfolio of industry-standard software tools, robust IT infrastructure and in-house R&D facility augment its capabilities. Benchmarked through leading certification and accreditation systems, the engineering work processes ensure consistent product quality and on-time delivery. The vertical offers end-to-end engineering solutions covering the entire spectrum of engineering across the oil & gas value chain, covering services from concept to commissioning, troubleshooting, EPCM, PMC, Field Engineering, Asset Integrity Management and Operations & Maintenance. LARSEN & TOUBRO 190 HMEL Bhatinda Refinery, India. Scope included EPC of 2 x 44,000 MTPA Hydrogen Generation Units and mechanical construction of 7 processing units Engineering Services: During the year, Company strategically entered into a new product line and won its first Electrical House (E-House/ Power house) project. The business has also received several orders for the supply of static equipment for ongoing refinery projects in the Middle East and India. - The business executed a total of 21 challenging projects across the offshore and onshore landscape for various prestigious domestic as well as international majors in the oil & gas sector in FY 2017-18. A significant milestone was, successful on-time delivery of the offshore Production Deck Modules (PDMS) Project for Saudi Aramco. These PDMs will be installed at Safaniya oil field - which is the world's largest offshore oil field. These facilities are situated on the waterfront, with easy access to clients across the globe, and have load-out jetties for dispatch of large and heavy modules via ocean-going vessels and barges. These facilities are accredited with global certifications including API, ASME and NB and pre-qualifications from major oil & gas customers. at Hazira (India's west coast), Kattupalli (India's east coast) and Sohar (Oman) have a combined annual capacity in excess of 160,000 MT, depending on the product mix, and are equipped to undertake mechanical design of modules including structure, piping, pressure vessels, fabrication and construction engineering. Fabricated modules are tested and pre-commissioned at site for trouble-free and rapid hook-up. The facilities have state-of-the-art equipment to deliver complex modules and structures, duly tested at the facilities, and offer competitive and year-round delivery capability with robust QHSE practices. The business offers comprehensive modular Engineering, Procurement and Fabrication (EPF) solutions for setting up projects, primarily in the offshore and onshore oil & gas segments. World-class modular fabrication facilities The business successfully completed composite work of the low-cost expansion project at GGSR Bathinda (Punjab) for HPCL Mittal Energy Limited and laying of a pipeline (12' /8" x 176 km) and associated facilities from Dahej to Navsari and a spur-line from Dahej to Hazira for the Dahej Nagothane Ethane Pipeline Project of Reliance Gas Pipeline Limited. In order to become 'the architect' of disruptive technologies that will help customers be ahead of the curve, LTTS has strategically decided to invest across futuristic technological areas, namely Digital Engineering, Smart Manufacturing, Perceptual Engineering and Pervasive Technologies. 202 LARSEN & TOUBRO of unlimited possibilities. ER&D service providers need to identify opportunities and evolve technologies to 'Build the New' and 'Renew the Old' thus creating value proposition. Intelligent Products, a sensor-enabled loT platform with analytics coupled with digital engineering, is the key to evolution from old to new. Digital Engineering is driving ER&D growth globally which is visible from the high concentration of investment made by global corporates. As per Zinnov, in 2012, the Digital Engineering spend was USD 121 billion which was 13% of the total ER&D spend. In 2017, it went up to USD 219 billion, having 20% share of total ER&D expenditure. By 2022, it is expected to reach USD 489 billion with 36% weight in total ER&D. Software will be the major factor driving growth in digital engineering, followed by embedded and mechanical. There is increased wallet-spending on Digital Engineering because of crucial factors like technology innovation, business model innovation and growth of tech giants and start-ups. The world will see increased R&D activity in machine learning, human machine interface, artificial intelligence, collaborative robotics, etc. Augmented Reality empowers manufacturers to gain insights into their product models and equipment health L&T Technology Services Limited (LTTS) is a leading global pure-play Engineering Research & Development (ER&D) services company. LTTS offers design and development solutions throughout the product development chain, and provides services and solutions in the areas of mechanical and manufacturing engineering, embedded systems, engineering analytics and plant engineering. Headquartered in India, LTTS employs over 12,000 personnel spread across 16 global delivery centres, 28 global sales offices and 39 innovation labs in India as of March 31, 2018. Perceptual Engineering is another focus area where machines are made intelligent enough to interact with the five senses. LTTS has developed machine learning and deep learning technology for smarter solutions, and is deploying them into a variety of industries - Security & Surveillance, Robotics, Natural Language Processing and Image and Video Analytics. Business Technology Services • LTTS is focusing on and investing in Digital Engineering areas like Industrial IoT, Augmented Reality, Smart Supply Chain & Logistics, Power Electronics, Connected Vehicles, Imaging Algorithms & Edge Detection and Video Surveillance. • LTTS has taken big strides in smart manufacturing, with cutting-edge projects that make a plant connected and intelligent. One of LTTS's recent smart manufacturing projects involved integrating a new model into existing manufacturing lines using virtual simulation of robotic welding, PLC programming and HMI design. • • Pervasive technologies use sensor fusion which combines sensors to produce data and signal computing. This helps to analyse and connect systems, enabling businesses to transform to digital service-led models. Recognizing the power of the embedded sensor, LTTS has made a head-start in this area by undertaking some interesting projects for customers. The above areas are the four pillars of modern-day industrial digital evolution which will lead the way for the Company to push the frontiers of innovation. These four are not mutually exclusive, they are in fact interconnected threads of technology, with considerable overlaps. Through these technology pillars, LTTS will be relevant today, tomorrow and the day after, to become the global leader in engineering services in the years to come. Technology has evolved over the past decade at such a rapid pace that the present times can be considered as the era of What You Perceive is What You Get (WYPIWYG). Devices have become smart, and customers expect them to become smarter by the day. Only the organizations that evolve with technology can succeed in this new world Overview Outlook An engineer wears a VR headset in an R&D lab by independent global research firm, Nelson Hall, in its evaluation for Internet of Things (IoT) services providers. LTTS was the only global pure-play engineering service provider to be positioned in the Leaders Category. • Patents At the end of financial year 2018, the patents portfolio of LTTS stood at 328, out of which 245 were co-authored with its customers and 83 were filed by LTTS. Digital solution for automobile manufacturing displayed on the shop floor Engineering industrial products helps clients drive innovation and efficiency and retain their competitive edge. 201 • Awards & Recognition LTTS has won a string of high profile industry accolades which are a testament to the Company's culture of innovation and best practices in technology and people management. Key accolades include: •The Golden Peacock Innovative Product/Service • LTTS won the Businessworld magazine's 3rd HR Excellence Awards 2017 for 'Excellence in Change Management & Excellence in Compensation and Benefits' Award 2018 for LTTS's i-BEMS framework. This is the second year in succession that the Company has won a Golden Peacock trophy. In March 2017, LTTS was awarded the Golden Peacock National Quality Award for its best-in-class engineering services and solutions. • The Company was also positioned in the 'Winner's Circle' of HfS's 'Blueprint Report - on Embedded & Semiconductor Engineering services 2017'. Not only was LTTS lauded for its excellent delivery capability, account management, partnership, hardware expertise, technology, in-house tools and IP solutions but it was acknowledged by HfS for its recognizable investments in future capabilities and strong client feedback to drive new insights and models. LTTS cemented its position as a leader in overall ER&D Services across 10 verticals and as overall leader in Product Engineering Services in the Zinnov Zones 2017 Ratings. • It was rated as an 'Expansive and Established player' in the Zinnov Zones 2017 loT Technology Services study, and positioned in the Zinnov Leadership Zone across seven unique expertise areas. • The Company was awarded the prestigious NASSCOM Digital Skills Award for 2017. NASSCOM, through this award, gave formal recognition to LTTS's continued success in aligning its offerings with the rising customer demand for digital engineering. • LTTS's culture of innovation and compelling portfolio of solutions led the Confederation of Indian Industry to recognize the Company as one of the most innovative organizations in India in the services category. • LTTS was positioned in the Leaders Category • LTTS has been positioned in the 'Winner's Circle' for excellence in innovation and execution by HfS Research, the Service Research Company™. In its 'Blueprint Report for Automotive Engineering Services for 2018', HfS rated LTTS among the top 5 innovative organizations in the world. 203 LTTS offers engineering services and solutions over the complete spectrum of the transportation industry that includes OEM and Tier 1 suppliers in the automotive, trucks & off-highway vehicles, aerospace and rail sectors. The segment delivers end-to-end services from concept to detailed design through manufacturing, testing, after-market and sourcing support helping OEMs and Tier1 suppliers develop products in a cost-effective manner. LTTS also helps its clients develop cutting-edge transportation technologies such as autonomous driving, electric vehicle and drones. LTTS's domain expertise, glocalized and customer-centric approach, proprietary solutions and a repository of over 150 co-authored patents drive innovation and sustain business growth. The adherence to safety protocols, design and processes and the use of cross-disciplinary engineering facilitates give a superlative experience to LTTS's customers. L&T Finance Holdings (LTFH) This Industrial Products segment offers end-to-end product development counsel, leveraging expertise spanning software, electronics, connectivity, mechanical engineering, industrial networking protocols, user interface / user experience (UI / UX), test frameworks and enterprise control solutions. Plant Engineering The plant engineering practice provides end-to-end engineering services to leading plant operators across the globe. LTTS provides services in E/EPCM, Engineering Reapplication and Global Rollouts, Plant Sustenance and Management, Regulatory Compliance Engineering along with chemical, consumer packaged goods (FMCG) and energy and utility sector clients. LTTS specializes in traditional EPCM and operational maintenance projects, L&T Technology Services' Bangalore campus as well as contemporary digital engineering enterprises. The Company is advancing its engineering footprint to encompass the digital sphere, and is working with customers on 'Smart Manufacturing' technologies such as automation, IoT, analytics, and augmented reality (AR). Medical Devices LTTS' domain expertise, supported by robust technological capabilities, helps medical device OEMs address industry challenges, accelerate time to market, and optimize costs. LTTS focuses on delivering solutions in diagnostics, patient mobility services, musculoskeletal services, life sciences, surgical services, cardiovascular, home healthcare and general medical. LTFH has a competitive advantage in this segment in terms of ability to execute strategy on the ground with required scaling-up, effective use and implementation of data analytics along the customer life cycle and best in industry Turnaround Time (TAT) and technology for customer selection and on-boarding. With this clear strategy, LTFH has been able to grow the business by 70% and loan book by 57% through increased penetration in its identified branches. LARSEN & TOUBRO 204 Through rigorous execution of the digital proposition on the ground and domain expertise, LTFH has been able to increase its market share from 5.9% to 8.2%. LTFH's robust digital & data analytics-based architecture gives it the competitive edge (b) Two-Wheeler Finance: During FY18, the two- wheeler industry grew by 15% to 2.06 crore units of two wheelers sold in the market. With increased urbanization and sustained focus on road infrastructure developments, the market is expected to get a boost. The industry is expected to show a growth of ~12% in the coming year, with good performance from both motorcycles and scooters. In this segment, the future strategy of LTFH is to create a portfolio with the optimum mix of preferred OEMS and geographies and build on allied businesses e.g. Refinance certified used and implements in order to provide a comprehensive product suite to its customers and roll out a digital proposition to improve service levels further. LTFH has a competitive advantage in terms of differentiated value propositions for preferred OEMs and top dealers, analytics driven target allocation based on the portfolio performance, extensive focus on early bucket collection to maintain portfolio quality and best in class TAT proposition to customers and dealers on decision making and disbursement. Continuing on the upward trajectory of gaining market share, LTFH increased market share from 6.8% to 12.5% in the last year. LTFH has shown healthy growth in their disbursements by 107% and loan book by 28% over the previous year. industry grew by 22% to a record high of 7.11 lacs tractors sold. With expectations of a normal monsoon and other determinants of farmer's cash flows like reservoir storage, extent of irrigated area, area under sowing, minimum support prices staying positive, the industry is expected to record ~10% growth this year. LARSEN & TOUBRO LTTS's Industrial Products practice helps OEM customers across building automation, home and office products, energy, process control and machinery. The Company's expertise in engineering industrial products helps its customers drive innovation and efficiency, and retain a competitive edge. LTTS helps streamline the product development value chain, enabling customers spearhead business growth. Financial Services Business Industrial Products 199 L&T Finance Holdings is one of the leading private non-banking financial services companies in India. The businesses are Rural Finance, Housing Finance, Wholesale Finance, Investment Management and Wealth Management. RURAL FINANCE LTFH's strength in Rural Finance lies in the use of cutting edge technology and deep analytical skills to increase market penetration, improve portfolio quality and most importantly for timely detection of early warning signals. (a) Farm Equipment Finance: In FY18, the tractor LTFH has very clearly established a leadership position in core areas of renewables, road refinance and transmission. LTFH has built a sustainable advantage in terms of the strong underwriting ability and sell-down capabilities. WHOLESALE FINANCE The future strategy of LTFH is to introduce digital initiatives to ensure best TAT in the industry, retain the customer base with a holistic association approach and constantly strengthen the risk framework. robust early warning systems with triggers in place to maintain delinquencies, extensive use of analytics across the customer life cycle and deep market penetration and a rural presence across geographies. LTFH has a competitive advantage in terms of risk mitigation through various market and credit checks, LTFH has been able to increase disbursements by 105% and loan book by 113% on the back of increasing penetration in existing geographies, opening new geographies in existing states and new states viz. Bihar, Assam and Tripura. (c) Micro Loans: The micro loans industry has seen a change post demonetization with a few players having slowed down on account of high delinquencies, while a few others awarded the SFB license have tended to show lower focus on micro lending. The industry has grown by ~25% over the previous year. The market is expected to sustain the growth levels over the coming year. In this segment, the future strategy of LTFH is to constantly recalibrate its sourcing and collection scorecard to stay ahead of the competition, create a leadership position with a quality portfolio in existing and new geographies and intervene early in collections through the use of analytics to enhance portfolio quality. The Company's customer base includes over 50 Fortune 500 companies and 51 of the world's top ER&D companies, across industrial products, transportation, telecom & hi-tech, medical devices and the process industries. The key differentiators for LTTS are its domain expertise and multi-vertical presence in major industry segments. LTTS also provides service offerings in the domains of Embedded Systems, Application Engineering, Verification and Validation and Mechanical & Digital Manufacturing Services. The services and solutions provided by LTTS in its key industry segments are as under: Transportation LTTS also held an innovative technology hackathon nicknamed 'Just Code' across its global delivery centres to enable employees to convert their ideas into demonstrable products. The hackathon successfully ended with the creation of hundreds of PoCs across several technologies, including Media Processing and Entertainment, Cloud Programming, Sensor Fusion, Automation, Machine Learning and Artificial Intelligence. Telecom & Hi-tech LTTS's expertise in digital engineering - such as the Cloud, IoT, Artificial Intelligence, Data Analytics & other areas in the telecom domain - enables its partners to leverage the right telecommunications strategy. With expertise in product variant development, 5G capabilities, simulation & automation, and product & mid-life support, LTTS is a one-stop solution for its clients. It also provides futuristic solutions and IP cores that address some of the pressing needs of the semiconductor industry. LTTS's Narrow Band IoT (nBloT) solution provides complete loT device management designed with low memory and a low power footprint, enabling easy integration to custom target platforms. Headquartered at Knowledge City, Vadodara, L&T Technology Services helps clients build smart products, enable smart manufacturing and offer smart services. LTTS's experience in Product Development, Digitalization, User Experience Engineering and Testing & Certification enables its customers to expand to new markets, innovate newer and smarter products, and roll-out products faster and cheaper. The Company's designs for 3D cameras, speech recognition, smart glasses and connectivity programmes involving wireless mesh networks are seeing increasing traction from the industry. LTTS invested over 100 working hours to mentor students shortlisted for the PoC round, with subject matter experts from respective industry domains mentoring the students. As a result, the winning teams in TECHgiumⓇ came up with remarkable solutions around IoT, Machine Learning, Advanced Image Processing and Smart Tools. It is expected that the global ER&D spend will reach USD 1,341 billion by 2022. This momentum is majorly affiliated Technology Events The Mutual Fund industry in India witnessed a 26% growth in FY18, taking the Average Assets under Management (AAUM) to 2,305,212 crore as compared to ₹ 1,829,583 crore AAUM recorded in FY17. MUTUAL FUNDS In this segment, the future strategy of LTFH is to focus on Category A and B developers with more than 70% of exposure towards Category A developers, continuing focus on implementing an action-plan based on EWS and leveraging the L&T ecosystem for business growth and market intelligence. LTFH has a competitive advantage in this segment in terms of strong structuring and underwriting capabilities with a focus on project completion, comprehensive and robust Early Warning Signal (EWS) framework and a comprehensive product suite to address top developers' funding requirements. LTFH has identified a harmonious balance in using the group synergies, lending to 'A' category and 'B' category builders and monitoring the progress, collection and early warning signals of the projects. During the year, LTFH established itself as one of the key lenders in real estate financing with a clear focus on Category A & B developers across 6 cities. The Real Estate Finance business registered significant growth, with a loan disbursement of 7,107 crore and a loan book of 10,092 crore in FY 18. improved demand as well as supply for affordable housing. Supply of commercial real estate has rationalized over the last 5 years, leading to an uptrend in occupancy and rentals. Close project and loan monitoring safeguard our home loans business (b) Real Estate Finance: The Real Estate sector has transitioned towards a more transparent and regulated industry after demonetization, RERA and GST. Government initiatives like 'Housing for All' have Robust fund performances and distributor relationships power our Mutual Funds business In this segment, the future strategy is to leverage relationship with real estate developers for sourcing of home loans and continue focus on increasing the share of direct sourcing volumes through the use of analytics and strong focus on early bucket delinquency through dynamic alignment of credit and collection policies. Home Loans and LAP registered a 23% growth in YOY disbursements from 2,979 crore in FY17 to 3,679 crore in FY18. This was backed by over 100% growth in home loan disbursements in Q4 FY18 on account of better traction in retail conversion of home loans for real estate financed projects (a) Home Loans & LAP: During CY17, domestic housing credit grew by 17% to reach 15.9 lakh crore as on Dec '17. This is largely due to marked recovery in the real estate market, improvement in sales velocity and stabilization of RERA and GST. HOUSING FINANCE In this segment, the future strategy is to focus on new market segments and leverage the merchant banking licence to act as arrangers for mandates LARSEN & TOUBRO 206 LTFH is a leader in the core areas of renewables, road refinance and transmission. LTFH has a competitive advantage in terms of its ability to act as lead arranger for transactions and large ticket size underwriting capability and wide distribution network across financial markets. LTFH has a competitive advantage in terms of its digital lending model to provide best-in-class TAT and comprehensive use of analytics for business generation and portfolio risk management. ESFEE 207 The average AUM of LTFH has increased by 68% and 208 Credit Risk: With the objective of growing fearlessly in the segments in which LTFH is operating, target markets are clearly identified and understood with scoping of opportunity given the competitive landscape. Credit underwriting standards, at micro and macro (b) Risk Management: Risk management forms an integral part of the LTFH's businesses. LTFH has a robust and comprehensive credit assessment and risk management framework to identify, monitor and manage risks inherent in its operations. The Risk Management framework covers various families of risk like credit risk, market risk and operational risk. Driving Productivity: The ultimate metric for success is continuous improvement in productivity. LTFH takes pride in calling itself a performance driven organization. A rewards and recognition mechanism is implemented across LTFH to keep the morale high and formally appreciate the efforts of a competitive and talented workforce. Capability building: Another important agenda was to augment capabilities at the middle and senior management levels. For building the leaders of tomorrow, LTFH continues to give cross-functional exposure through various projects and internal job postings. LTFH invites world class faculty for senior management training sessions to facilitate discussions on business practices and issues. LTFH organizes individual level coaching with experienced business practitioners for leadership development. Scalability: LTFH continuously evaluates and optimizes the organization structures in line with its business priorities. The Human Resources department worked in tandem with the business to ensure that there were the 'right people' to meet growth ambitions. LTFH had significant growth ambition which called for new geographic expansion as well as growth in existing geographies. A culture of 'Results not Reasons': After another year of delivering excellent results, LTFH is constantly working towards strengthening its foothold in each business and striving to reach a dominant position. Achieving these results was no mean feat, but LTFH succeeded because of its strong core values and the inculcation of a culture of 'Results not Reasons', which gave razor sharp focus to meet its goals. and attracting the best talent in the industry. As on 31st March 2018, LTFH had a total workforce of 15,126 employees across all subsidiaries. (a) Human Resources: The Human Resources function plays a pivotal role in this transformation journey by ensuring organizational efficiency and promoting the right culture. To sustain growth, LTFH is investing in building its talent pool by developing skills internally Significant Initiatives *(Source: IBEF Financial Services Report Published in September 2017). In this segment, the future strategy of LTFH is to focus on technology-based solutions to deliver superior analytics and investment advisory to strengthen existing relationships and forge new and meaningful relationships, acquire new clients and increase sales strength across geographies. LTFH has a competitive advantage in this segment in terms of a robust business model based on the fundamental tenets of client centricity, intellectual property and execution efficiency, a strong and expanding distribution reach with a diversified product range and cutting-edge portfolio analytics for tailored customer-centric advice and new customer acquisition. FY18 was a very positive year with tremendous growth for the business-profits have grown from 5 crore in FY17 to 29 crore in FY18. The Average Assets under Service (AAUS) grew by almost 34% during the year with the FY18 AAUS being more than 18,000 crore. LTFH's revenue in this business vertical witnessed a rise of 88.22% during the year, for FY18 being at 93 crore. Looking at India's strong economic growth outlook and favourable demographics, the Indian Wealth Management market is on a continued path of growth. The focus on tailor-made client-centric products, rising financial literacy and use of technology, is creating huge opportunities for the Indian Wealth Management industry. WEALTH MANAGEMENT In this segment, the future strategy of LTFH is to focus on building core assets to achieve the dual purpose of achieving higher profitability and stability in overall AUM, increase SIP book to ensure steady flows and deepen the presence in key counters to gain a higher share of assets LTFH has competitive advantage in this segment in terms of robust performance of the fund's equity schemes and strong distributor relationships. stands at 65,932 crore in FY18 as against 39,300 crore in FY17. This has helped us reach a market share of 2.86% in FY18 as compared to 2.15% in FY17. The Mutual Fund business has outperformed the industry growth rate of AAUM, with Equity to AUM reaching to 58%. LTFH was ranked number one in India Rupee Loans Mandated Arranger and India Rupee Loans Book-runner in Q1 FY18 Thomson Reuters' League Table and was the only Indian player in the Top 10 of APAC Project Finance Loans Book-runner and Mandated Lead Arranger in Q1 FY18 Bloomberg Global Syndicated Loans League Table, for the quarter ending March '18. Continuing its efforts to identify and nurture future innovators, LTTS, for the second year, held TECHgiumⓇ, the pan-India platform for budding engineers to showcase their innovations. The response was very encouraging, with 220 institutes and over 17,000 engineering students signing up for the TECHgiumⓇ 2018, including marquee institutes like IITS, BITS Pilani, Delhi College of Engineering and NIT. In FY18, the DCM desk acted as arranger for issuances aggregating to ~4,700 crore of funds raised. In FY18, the DCM desk also made a mark in new segments - that of municipal bonds and state level undertakings, which are expected to grow significantly going forward. The desk also commenced trading in sovereign securities. In this segment, the future strategy is to leverage infrastructure financing expertise and relationships to enhance profitability through structured products and develop best-in-class speed of response and commence down-selling. Billion Total Corporate Engineering Spend includes tradtional RA spend and Total Engineering Spend Organization wide Smart manufacturing services facilitate real-time visibility of plant operations 200 LARSEN & TOUBRO to growth in sectors like automotive, pharmaceuticals, software & internet, semiconductor and consumer electronics. Corporates are expanding in various areas to be competitive and relevant. Corporates are building onshore labs / centres of excellence, developing new IPs and engaging in M&A activities for expansion. Significant Initiatives GAG 3013 LTTS aspires to continue being a global leader in the ER&D segment. The Company has undertaken several significant initiatives to achieve this objective. These initiatives include: • LTTS is leveraging hotspots across the globe to tap into the engineering talent having experience in Digital Engineering, Design & Application Engineering, etc. to improve its onshore presence in low-cost geographies. Towards this objective, LTTS has launched a Centre of Excellence in Jerusalem, Israel which acts as a global hub for developing advanced solutions in Video, ASIC Design and Security. It also offers the full scope of engineering services in the areas of Telecom, Semiconductors, Medical Devices, Automotive, IoT and Plant Engineering. Specialised Infrastructure LTTS is focused on driving innovation and is adopting solutions in line with technological trends. To promote its culture of innovation, LTTS is investing in infrastructure and co-innovation to build innovation hubs and to facilitate solutions and offerings across industry verticals. • IP & Solutioning LTTS is concentrating on building re-usable IP products and frameworks to enhance competitive differentiation. Proprietary platforms like UBIQWeise 2.0TM, I-BEMS, • WAGESAPP and IPs like MIPI and USB help LTTS in retaining its competitive advantage across industry segments. • Talent & Delivery (a) Infrastructure financing: Being a key driver for the Indian Economy, the infrastructure sector is contributing to India's overall development. India has an investment requirement of worth 50 lakh crore in infrastructure by 2022 to increase growth in GDP, connect and integrate the country with a network of roads, airports, railways, ports and inland waterways, besides providing power for all. USD Bition Total Corporate R&D Spend underwriting, enabling comprehensive refinancing solutions. LTFH has a competitive advantage in this segment in terms of nimbleness to respond to the need for structured solutions and strength in large ticket Despite the slow off-take of bank credit and a rising interest rate scenario, LTFH's Structured Corporate Finance business saw a profitable growth in its asset base. The asset book grew by ~20% on a YOY basis while disbursement growth was ~19%. (b) Structured Corporate Finance: Bank credit off-take was largely muted in financial year 2017-18 with stiffening of interest rate towards the year-end. In this segment, the future strategy is to leverage industry dominance in the renewable and roads sectors to further enhance fee income through efficient underwriting and placement, use existing client and market relationships to cross-sell other products and deepen expertise in social infrastructure segments, hospitality and health care. LTFH has a competitive advantage in this segment in terms of growing the IDF book with segment-leading profitability and structuring capabilities, a robust down- selling desk with strong relationships with banks, both public and private Financial Institutions, and a vibrant Debt Capital Market desk with structuring strengths in credit bonds. In FY18, LTFH was awarded 'Best Renewable Energy Financier of the Year 2017' by the Renewable Energy Investment and Finance Forum in both Solar and Wind Sectors for outstanding achievements in financing the renewable energy industry. 205 Cutting-edge technology and deep analytical skills help deliver better results in the Rural Finance sector An efficient down-selling desk, through increase in its sell-down volume by 70% kept the overall infrastructure finance book growth at 11%, whereas disbursement grew by 39% from ~13,000 crore to 18,055 crore in FY18. The business vertical saw its fee income grow by 45% during the year. The asset base of the Infrastructure Debt Fund (IDF) increased by about 74% to ~ 7,000 crore from around 4,000 crore, a year earlier. Business Environment According to Zinnov, corporations spent more than USD 1 Trillion in 2017 on ER&D activities such as product and process development, manufacturing engineering and other allied engineering. Of this, the 500 biggest corporate spenders in ER&D globally (G500 ER&D spend) contributed nearly 60% i.e. USD 665 billion. Global Corporate Engineering Spend UGO 665 BAR G500 R&D Spend Source: Zinnov Usn 856 (c) Debt and Capital Market (DCM): LTFH's DCM business invests in non-convertible debentures issued by companies across multiple sectors and segments, either by way of private placement or public issue. 1097 Order Inflow growth was mainly driven by the • Lowest ever Auxiliary Consumption of 5.08% achieved Business Environment In addition to its project portfolio, L&T IDPL has installed Wind Energy Generators (WEGS) with a capacity of 8.7 MW in Tamil Nadu in March 2010. The energy generated is utilized for captive consumption. The WEGS are eligible for 16,128 Carbon Emission Reduction (CER) certificates per year until 2022 as a result of the carbon reduction by these wind generators. across viability assessment, financial closure, project management, operations & maintenance and portfolio management of infrastructure assets in various sectors. LARSEN & TOUBRO 210 Rajpura Supercritical Thermal Power Plant Canada Pension Plan Investment Board (CPPIB), the largest pension fund in Canada, invested 2000 crore as share capital in L&T IDPL in 2014-15. This is the first direct private investment by a Canadian pension fund into an Indian Infrastructure Development company. Over two decades of extensive experience in working with Governments, multi-lateral agencies, international and domestic financial institutions and corporate entities has helped L&T IDPL to develop proven competencies in project financing and execution, L&T Infrastructure Development Projects Limited (L&T IDPL) is one of India's biggest Developers of Public-Private-Partnership (PPP) infrastructure projects. Since its inception in 1995, L&T IDPL has executed and financed landmark infrastructure projects across Transport and Energy, including Highways, Ports, Airports, Transmission lines, Hydel Energy and Urban Infrastructure, including Water. L&T IDPL currently operates 16 completed infrastructure projects in transport and energy across 8 Indian states, with a mix of toll and annuity assets. As of March 2018, L&T IDPL's portfolio had an estimated total project cost of 17718 crore. Overview L&T Infrastructure Development Projects Limited (L&T IDPL) monetization on a continuous basis in order to maximize value creation for the benefit of stakeholders. The operations of the Developmental Projects business segment primarily involves development, operation and maintenance of basic infrastructure projects in the Public Private Partnership (PPP) format; toll collection including annuity based road projects, power development and power transmission, and providing related advisory services. Significant cash generating assets have been created under the current business model, which are being explored for (d) Kattupalli port held for sale under its subsidiary Marine Infrastructure Developer Private Limited. (c) Power development projects executed through its subsidiary L&T Power Development Limited and its subsidiaries (L&T PDL Group) and (b) the Hyderabad Metro Rail project, executed through its subsidiary L&T Metro Rail Hyderabad Limited (a) Infrastructure projects executed through its joint venture company L&T Infrastructure Development Limited and its subsidiaries and associates (L&T IDPL Group) Developmental Projects business segment comprises: Developmental Projects Business 209 • Access to healthcare services and breast cancer screening provided to 1,34,296 beneficiaries. • 100 employee volunteers clocking 167 hours contributed towards CSR activities reaching 494 beneficiaries. During 2017-18, the business environment has been quite vibrant. L&T IDPL focused on excellence in O&M (operation and maintenance) of its existing 16 assets while there was constant evaluation of emerging opportunities in the PPP space. This evaluation was carried out for both new construction projects as also existing Government owned infrastructure assets that have been completed and are being offered for O&M. Notable developments in both sets of opportunities and the business environment are as follows: Roads: Construction of highways reached 9,829 km during FY 2017-18, with an all-time high of 27 km per day. This represents a 20% growth over the previous year. Expenditure of 1,16,324 crore was incurred on construction of national highways during 2017-18. The PPP space witnessed a revival of sorts with the following key developments: 1. Launch & listing of the first Infrastructure Investment Trust (InvIT) in May 2017 (six toll-road assets comprising 3,645 lane km) triggering other developers to explore this opportunity to monetize mature road assets and bring down debt exposure. L&T IDPL 212 Vadodara-Bharuch Toll plaza, Gujarat In May 2018, L&T IDPL became the first infrastructure sponsor to successfully launch a private placed InvIT (infrastructure investment trust) with an initial portfolio of five road assets. This InvIT raised 3700 crore, with 55% of the funds coming from international investors from Canada and Germany. InvIT has enabled L&T IDPL to monetize five of its assets, repaying bank loans and providing growth capital; It also provides L&T IDPL a platform for operating assets, both existing and future. The transmission line business had gross collection of *202.26 crore as annuity payments. Electronic toll collections through FASTag saw a large jump. Further to the push of less-cash drive of Government of India, L&T IDPL FASTag collections went up by 87% (June 2017 to June 2018). 1892.94 crore grew by 19% over the last fiscal, despite muted WPI growth of 3% Overall, gross toll revenue of Significant Developments in the current year During 2017-18, L&T IDPL completed two of its highway projects, L&T Deccan Tollway and L&T Sambalpur Rourkela Tollways, both of which achieved commercial operations and commenced toll collection. These two highways are generating revenues of about. 60 Lakhs per day. sector (two power transmission projects with a total circuit length of approximately 1,936 ckms, and 6,000 MVA of transformation capacity). • 60% increase in the volume of work, 14.08% increase in overall annual revenues and 13.24% increase in annual profits of the 1000 women entrepreneurs. During the first quarter of FY 2018, an InvIT was successfully launched and listed in the Transmission Line Transmission Lines: Around 23,119 circuit kms of transmission lines and 86,193 MVA of transformation capacity was added during FY 2017-2018. REC TPCL (REC Transmission Projects Company Limited, a 100% subsidiary of Rural Electrification Corporation) the Bid Process Coordinator (BPC) for Transmission Lines on the TBCB (Tariff Based Competitive Bidding) route has awarded two bids during FY 2017-2018. 7. Commitment by several large pension funds and long term infra-focussed funds to the Indian infrastructure space along with NIIF of the Union Government is expected to boost the secondary market for TOT projects. 6. As per the Economic Survey 2017-18, the road sector alone has NPAs of 36,596 crore. Rising NPAs, higher risk provisioning assigned to road sector and dwindling profits in the road sector have made banks reduce exposure to the infrastructure sector. 5. Introduction of FASTags (electronic toll collection) by NHAI has led to decongestion at toll plazas and prevention of toll revenue leakage. L&T IDPL toll plazas witnessed a substantial increase in electronic tolling from 7% in Dec 2016 to 24% in June 2018. 211 800 Hyderabad Metro Rail project 4. Implementation of GST and E-way Bill; the unified tax regime has obviated the need for interstate check posts which has resulted in reducing the travel time of long-haul trucks and other cargo vehicles by over one-fifth and improved the turnaround time of the fleet. Improved traffic numbers coupled with positive WPI growth has led to a double-digit growth in revenues for most road developers. 3. Successful bid-out by NHAI of the first Toll-Operate-Transfer (TOT) bundle comprising of 9 NH projects realizing about 96.81 billion for operational road projects aggregating to a length of about 700 km. 2. Road developers, who until recently focused on projects that required them to invest heavily and bear major risks over long periods, have shifted to focus to an asset-light model like Hybrid Annuity Model (HAM), introduced in order to re-balance the risk sharing. Of the total length awarded by NHAI in fiscal year 2018, awarded 150 road projects of 7,400 km worth ₹ 1,22,000 crore. Of the total length awarded, 3,396 km (~46%) was awarded on Hybrid Annuity model at a cost of 76,500 crore and 209 km (-3%) on Toll mode at a cost of ₹2,500 crore. Commercial banks have selectively financed these HAM projects based on the standing of the developer/ sponsor. There is growing competition in the HAM model with most contractor-developers now bidding for projects. A large number of Intrastate Transmission Line bids are expected in the coming years. • 13.86% increase in knowledge level, 11.6% increase in household average monthly savings of the 100 Digital sakhis. 23% increase in ground water level, 22% increase in water storage created by water structures, and 17% increase in household annual incomes due to IWRM project. CSR Programme Outcomes: 216 LARSEN & TOUBRO and pursuing increase in coal allocation would ensure Fuel Security. Increasing global warming and need for long-term sustainable energy security have renewed the focus on the traditionally most clean hydro-power. Accordingly, the Government is considering policy initiatives for the revival of the hydro-power sector. The Company expects that approval and timely implementation of these initiatives by the Government in the near future may positively impact the hydro-power development in the country. Marine Infrastructure Developer Private Limited : Kattupalli Port Kattupalli Port at Chennai, a container port with a capacity to handle 1.2 million TEUS per annum has a container terminal with two container berths, and has been accorded SEZ co-developer status. During the year 2015-16, the Company (L&T) entered into an agreement with Adani Group (a port operator) to demerge the port business and divest the stake in the resulting company. In the current year 2018-19, the Company has divested its ownership and has completed the transfer of the port ownership in entirety. 217 Financial Review 2017-18 I. L&T CONSOLIDATED A. PERFORMANCE REVIEW The major focus areas for NPL during FY19 would be maximising plant availability, improving operational efficiency, enhancing fuel quality, resolving the regulatory issues, collection of disputed receivables, cost reduction initiatives and Health, Safety and Environment compliances. With issues relating to coal allocation under Fuel Supply Agreement coupled with logistic constraints, fuel availability continues to be challenging in FY 19 too. Procuring higher quantities of imported coal, encouraging PSPCL for diversion of coal lying in other Power Plants to NPL The Company performed well on all the parameters during the financial year 2017-18, with pick-up in domestic investment climate. The slew of measures implemented over the last year or so - including demonetisation, Real Estate Regulatory Act, Goods & Services Tax, Insolvency & Bankruptcy Code have resulted in some short-term disruptions. In the long term, however, these are expected to give rise to a new economic order. This will have potential to significantly enhance revenues and channelize the funds for inclusive economic development. The Government's thrust on strengthening infrastructure and the 'Make for India' concept for key strategic areas, will provide opportunities to the Company's various business segments. Also, the rise in commodity prices is likely to result in capacity additions by the industry. During the year, the Company was beneficiary of the initial impact of such measures, which is expected to gather momentum as we go forward. Against the backdrop of such an environment, the Group recorded satisfactory growth during the year with steady performance of its businesses in diverse sectors. The Company continued to focus on its goal of maximizing shareholder value creation by exiting non-core businesses, implementing operational excellence initiatives to have profitable growth and containing working capital along with better fund management. During the year the Company sold two of its subsidiaries EWAC Alloys Limited and L&T Cutting Tools Limited. The Company is awaiting regulatory approval for conclusion of its stake sale in a container port in Tamil Nadu. In November 2017, L&T Metro Rail (Hyderabad) Limited, a subsidiary company, commissioned a 30 km stretch of metro rail network in the city of Hyderabad. Another subsidiary company viz. Nabha Power Limited, which houses two thermal power plants at Rajpura, received a favourable Supreme Court judgement on matters affecting the viability of the Company. The year also saw growth consolidation in some businesses, while 218 the listed entities within the group - L&T Infotech Limited, L&T Technology Services and L&T Financial Services - recorded notable growth, with expansion of business and new acquisitions. As at March 31, 2018, L&T Group comprises 93 subsidiaries, 8 associates, 34 joint venture companies and 33 joint operations. Most of the group companies are strategic extensions of the project and product businesses of L&T. Project business catering to the hydrocarbon sector is housed in a separate set of group companies to provide the business with focus and independent functioning. The majority of the subsidiaries support L&T's core businesses and enable access to new geographies, products and business segments. Certain distinct service businesses - such as Information Technology, Technology Services, Developmental Projects and Financial Services - are housed in separate subsidiary and joint venture companies of L&T. Order Inflow & Order Book 152908 crore LARSEN & TOUBRO levels, determine the minimum acceptable level of risk appetite acceptable while building up the business portfolios. Market Risk: On the market risk front, liquidity, interest rate and concentration risks are the key drivers. On a day-to-day basis, a Treasury Strategy team manages these risks with an oversight from market risk function, under the overall supervision of ALCO and periodic reviews by the Risk Management Committee. Operational Risk: Operational risk is inherent to processes and systems and a dedicated team monitors operational risks and incidents, including the robustness of various processes, systems and information security related matters. Operational processes have been streamlined with critical processes being centralised to ensure consistency, control and oversight. L&T Group achieved an order inflow of during the year 2017-18, achieving a growth of 6.9% over the previous year. The revival of the domestic market compensated for the slight lull on the back of depressed oil prices in Middle East, the major market for the Company. The domestic market evidenced a pick-up in capex finalization by public sector and Government undertakings. Also, the year saw movement in the award of orders from the private sector, resulting from strengthening of commodity prices and improvement in investment climate. Domestic order inflow increased by 15.3% to 76.6% of total order inflow, despite ordering momentum yet to gather pace in sectors like Defence, the preference there being on public sector enterprises. International order inflow declined by 13.6% to 23.4% of total order inflow. Further, geographical spread of order inflow changed during the year, with the Middle East contributing a lower share of 44.8%, which was earlier 64.9%. On the global front, uncertainties continue, as developed economies have started backing protectionist policies and the geo-political climate is giving rise to new trade partners, impacting the way of doing business. However, with hardening of oil prices, the investment momentum in Middle East, a major market for the Company outside India, is expected to improve. The Company continues to be selective in addressing the international market. The business environment remained competitive, with both domestic and international players fighting for the opportunities available. LARSEN & TOUBRO Outlook • CSR initiatives in the area of development of village infrastructure, education, skill building, gender equality, health and environment were implemented during the year Through financial inclusion and digital financial literacy, LTFH has designed a programme 'Digital Sakhi' which is making efforts to create livelihood opportunities for women by educating them to imbibe nuances of digital financial literacy. The women are equipped with a mobile tablet with preloaded digital financial literacy (DFL) modules to disseminate information on digital payments and other relevant government schemes in the community. The IWRM programme engages with the communities to prepare and implement interventions which address their core needs on water conservation and rejuvenation. (d) Corporate Social Responsibility: LTFH aligns its social responsibility theme and commitment with the United Nation's global development agenda of Sustainable Development Goals (SDG). Key initiatives are woven around sustainable livelihoods of rural communities facilitated by two spaces of intervention - Integrated Water Resource Management (IWRM) and financial inclusion/literacy for women empowerment. 5. Data Analytics: LTFH has set up a full-strength data analytics team to enable the Company to take data-based decisions. 4. Fintech Partnership: LTFH has started collaborating with fintechs, where innovative services are being consumed as a service rather than developing it in house. 3. Integrated Operations: LTFH has created a service- oriented architecture by deploying an Enterprise Service Bus which enables it to bend as an when requirement changes and interact with data that could be accessed from anywhere in the world. 2. Technology Infrastructure: From using on premise technology infrastructure to cloud-based infrastructure, LTFH intends to leverage the power of cloud computing during peak hours. life cycle are being relooked at and LTFH wants to achieve straight-through processes across all its retail businesses. 1. Automation: All the processes in the customer (c) Digital & Analytics: LTFH has designed an architecture that enables it to enhance its 'right to win' in focus products by offering a unique proposition to the customers in terms of Turnaround Time (TAT). LTFH wants to inculcate Digital & Analytics (D&A) into the culture of LTFH. In order to achieve the same, LTFH has initiated a project to rewire the complete business operations, where technology will orchestrate processes. The IT architecture has been completely revamped to create a digital workplace. The following initiatives are currently being taken by the Company: The Company is committed to generate reliable and environment-friendly power under safe working conditions. Emphasis is laid on continual improvement of processes and practices to achieve improved environmental, health and safety performance. Training on HSE for employees and stake holders is undertaken on a regular basis to foster a culture of health and safety. LTFH was awarded the 'Golden Peacock Award for Risk Management 2017' for robust risk management processes. This prestigious award is being given annually by the Institute of Directors, New Delhi for over 25 years as recognition of high standards in various domains of corporate governance. • Performance linked allocation made for improvement in coal quality • Reduction in interest cost through reduction in borrowing and lower interest rate achieved through innovative financing instruments • Awards received: • Excellent Energy Efficiency Unit, CII, Hyderabad • Top Plant Award, Power Magazine, USA • Best Thermal Generation Unit, IPPAI • Gold Award in Environment, Health & Safety, Grow Care India • Best IPP award, Asian Power Magazine • Best Employer Brand Award, EBI Reliability Centred Maintenance approach implemented Outlook: In the coming year, L&T IDPL would constantly evaluate new opportunities with worthwhile returns, with a special focus on highways and transmission lines, while other sectors could be taken up on a project-wise basis. L&T IDPL would also focus on operational excellence for its existing asset portfolio. To ensure this, L&T IDPL is undergoing Project LEAP, a Business Excellence Initiative. L&T IDPL looks forward to more PPP infrastructure projects in both project construction and asset monetization. We also hope for quicker dispute resolution processes, wherein several of our claims and court cases may see final determination. L&T IDPL would also engage with all stakeholders to ensure accounting policies and other enabling environment is conducive to its business. Hydro Electric Evaluation of 267 Sach-Khas Limited Project L&T Arunachal Hydropower Arunachal Pradesh Hydro Electric 74 Project Tagurshit of construction, Dry-commissioning Advanced stage Hydropower Limited Hydro Electric Project Uttaranchal Bhatwari Uttarakhand L&T 99 Singoli- Current Status of Unit-1 expected by Mar'19 Name of Subsidiary L&T Himachal viability/exit 430 • Best-ever Station Heat Rate of 2300 kcal/kwh achieved • 85% availability achieved Favourable judgement from the Supreme Court for recovery of coal washing and transportation cost Significant Milestones and Initiatives Third Party Sampling and testing through CIMFR (Central Institute of Mining and Fuel Research) has been operating quite well to mitigate the grade slippage issues in linkage coal. During the year, the power sector was grappling with a severe coal shortage. NPL had a lower Plant Availability Factor (PAF) due to a forced shutdown in October '17 on account of coal shortages. However, the plant imported coal to augment coal supplies and ensured a PAF of 85%. India's Electricity Generation grew at 6% in FY 18 and there was addition of 5.44 GW of Thermal Energy Capacity Additions in the same period. The Power Demand in Punjab was 4671 MW (Q4 2018), registering a 10% increase over the demand in the corresponding period last year. Business Environment NPL also happens to be the lowest cost power producer within Punjab with benchmark-setting operational efficiency. The power plant has been running successfully for over four years with an availability of 85% during FY18. NPL has been the most reliable source of power for the state of Punjab and has supported its requirements with uninterrupted supply during peak season. Reoli-Dugli The plant sources its fuel from South Eastern Coalfields Ltd. (subsidiary of Coal India Limited) under a 20-year Fuel Supply Agreement (FSA). The Company also secured approvals to arrange coal from alternative sources to make up for any shortage in supply of coal under the FSA. The State Government has allocated the perennial source of water for the plant from the Bhakra-Nangal distributary. The plant is operated by an in-house team of experienced operations and maintenance professionals. 215 Thermal Power Projects – Nabha Power Limited (NPL) NPL owns and operates a 2X700 MW supercritical thermal power plant at Rajpura, Punjab. Under the Power Purchase Agreement (PPA) with Punjab State Power Corporation Limited (PSPCL), which is for a period of twenty-five years, the entire power generated from this plant is sold to PSPCL. The plant is built on super critical - 870 Total Project Hydro Electric • 200 KW Roof top solar panel commissioned, CO2 emission reduction 220 Tons p.a. Hydropower Limited Himachal Pradesh technology of Mitsubishi, Japan. It is the first 'made in India' supercritical power plant to be commissioned and operational in the country. Infrastructure segment, contributing 57.1% of the total order inflow for the year. Infrastructure growth was led by some large value, prestigious orders received in Heavy Civil Infrastructure, Building & Factories and Water & Effluent Treatment. The respective businesses of the Company have been beneficiaries of the improved investment environment in India - accruing from the National Highway Authority of India, Dedicated Freight Corridor, Saubhagya Scheme, Mass Transit Systems, Airport expansion programmes, Andhra Pradesh Infrastructure Development, Refinery Expansions, Water Management programmes, in addition to some private sector expansion capex. Capacity State (MW) Name of interspersed at prime city locations, adjoining metro Stations and metro corridors. Developments would encompass Grade-A commercial developments for IT/ITES Office, Healthcare, Retail and Hospitality. Advertisement space offers good revenue potential through unlocking various innovative products and services. LARSEN & TOUBRO 214 Kudgi Power Transmission Line project, Karnataka The Company has been granted rights for Real Estate development with strategically located land parcels Non-fare revenue generation through cross-selling of products to commuters is being increasingly explored. This will be further strengthened by Metro expansion, which will result in higher ridership. The Government of Telangana has plans to implement Phase II of the Metro project, covering 85 km (including the Airport link). This will enhance the average ridership on the Metro system significantly due to the network effect. About 10 million transport trips are performed every day in Hyderabad city and the major share is taken by bus transport (50%). The city roads are congested, with only 8% road area and a very low average speed (about 8 kmph). The Company is poised to provide safe and punctual travel and has been working on various value-added initiatives including last mile connectivity, digital ticketing and a Mobile app to minimize commuters' pain points, ensuring higher ridership on the metro system. Business Environment Viability Grant of Funding (VGF) is being released by the Central Government from time to time as per eligibility and the total VGF drawn stood at 1204 crore as on 31st March, 2018. completion. Strategies to develop the Raidurg site, which is a large parcel of land, at a prime location and has a potential of 3.20 million sq. ft. of mall space and office buildings, are underway. Significant Initiatives TOD Projects commenced commercial operations at Punjagutta (0.48 million sq. ft. office space during Nov. '17 and mall space during Feb. '18) and at Hitec city (0.21 million sq. ft. mall space during Feb18). Two other malls at Errum Manzil (0.35 million sq. ft.) and Musarambagh (0.24 million sq. ft.) are nearing The overall physical progress of the project as on 31.03.2018 is 81%. Construction works in Stage 4 and 5 are nearly complete. The Company is aiming for the commencement of commercial services from Ameerpet to LB Nagar and Ameerpet to Hitec city before December 2018. Stage 6/1 is slated for completion during first quarter of next financial year. incurred during the year 2017-18 is ₹2,241 crore and cumulative up to 31.03.2018 is ₹ 14,723 crore. The Hon'ble Prime Minister inaugurated a 30 km stretch of the Metro Rail System on 28th November, 2017 connecting Miyapur to Ameerpet in Corridor 1 and Ameerpet to Nagole in Corridor 3. 213 Visakhapatnam industrial water supply project, Andra Pradesh The Metro Rail system includes construction of three elevated corridors from Miyapur to L. B. Nagar, Jubilee Bus Station to Falaknuma and from Nagole to Shilparamam, covering a total distance of 71.16 km. The concession period of the project is for 35 years including the initial construction period of 5 years. The Concession period is extendable for a further period of 25 years subject to fulfilment of certain conditions by the Company as set out in the Concession Agreement. The estimated project cost is 16,375 crore which includes the cost of rail system and 6 million TOD which is to be funded by a term loan of 11,478 crore, equity share capital of 3,439 crore and Viability Gap Fund from Government of 1,458 crores. The company has tied up its entire debt and achieved financial closure on 1st March 2011. The Government of Telangana has declared the appointed date as 5th July, 2012 upon fulfilment of the condition precedents (CP) from both the parties i.e. L&T Metro Rail (Hyderabad) Limited and the State Government. The Company is executing the project, covering a total distance of 71.16 km in 3 different corridors. This entire distance is further sub-divided into 6 stages for ease of implementation. The project cost under the PPP (Public Private Partnership) model on Design, Build, Finance, Operate and Transfer (DBFOT) basis. The Company entered into a Concession Agreement with the erstwhile Government of Andhra Pradesh on 4th September, 2010. The agreement also provides for development and subsequent monetization of Transit Oriented Development. L&T Metro Rail (Hyderabad) Limited (L&TMRHL) was incorporated on 24th August, 2010 as a special purpose vehicle to undertake the business to construct, operate and maintain the Metro Rail System in Hyderabad Overview L&T Metro Rail (Hyderabad) Limited L&T IDPL would also evaluate operational assets from the secondary market and shall seek to acquire such assets (primarily covering Highways & Transmission Lines) which meet the investment benchmarks. L&T IDPL would also seek to re-enter projects in Bulk/Industrial Water and Railways. As per the Concession Agreement (CA), the scheduled Commercial Operation (COD) date for the entire project length of 71.16 km was 5th July, 2017. However, due to delays in getting RoW and confirming alignment changes, the construction of the project has got delayed. The lenders have accorded sanction of extension of time for COD up to two years i.e., up to 5th July, 2019 with a corresponding increase in the loan period. As per the revised schedule, the loan repayment will start from 30th September, 2020. The corresponding cost implications are being assessed for claiming compensation. Project The Company has tied-up with a solar power developer for generating captive solar power of about 10 MW at a very competitive price, which will generate about 10% of energy requirement of Metro trains. The Company has also received concessional rate of 4.95/- per Unit (cheapest in the country) for electricity. • The Company is planning to open another two stages of Metro (Stage 4 & Stage 5) in FY 2018-19, thus taking the total metro operations to 56 km, with an expected overall ridership of approx. 6.15 lakhs per day. Measures like fare integration with other transport modes and collaborations with various feeder services for first and last mile connectivity are being taken to strengthen fare revenue. The Company is also exploring other Non-Fare Revenue initiatives like consultancy services with in-house competency on Metro system, Wi-Fi, Radio, etc., that will add extra revenue to the Company. Outlook: The Company has developed models to obviate TOD related threats, while leveraging the various advantages of the offering like metro-rail connect, strategic locational offering, etc., and has also obtained automatic step-in- rights by the Government for specific retailers by which, the risk in the event of termination is mitigated. The Company has also re-negotiated contracts with various project contractors to minimize the claims, on account of extension of time. Consultancy services for other metros. Training our upcoming metro staff with the existing infrastructure • • A brief status is depicted below: Hydel projects with an aggregate capacity of 870 MW are in various stages of execution. Hydel Power Projects The Company is exploring various non-fare revenue generating options through optimization of resources developed in-house for the past 5 years, namely: The portfolio comprises projects in thermal and hydel power generation projects aggregating to 2270 MW. Overview L&T Power Development Group Buoyed by the success of Phase 1 Malls, the Company intends to start with a 0.5 million sq. mall at Raidurg along with 0.15 million sq. mall at Rasoolpura. Discussions with customers to kick start a few other developments of the portfolio are underway. Measures are being taken to upfront the cash inflows on advertisement services by entering into longer tenure contracts. Leasing out Optical Fibre • Tie up with cab operators increase in footfall and increased ridership Skywalks connecting the malls & metros leading to Leasing out space for erecting mobile towers. • L&T Power Development Limited, a wholly-owned subsidiary of L&T, is engaged in developing, operating and maintaining power generation assets. • Demineralised Water Cycle at all-time low of 0.4% Hydrocarbon segment sustained its strong performance momentum from the previous year. The segment secured fresh orders aggregating to 15811 crore during the Order Inflow Other Comprehensive Income (OCI) 2016-17 0+ 1500- crore for the previous year, mainly due to lower yield on treasury investments. Other income mainly comprises of income from the Company's treasury operations, dividends and income from group companies. Other income for the year 2017- 18 at 1885 crore, decreased as compared to * 1915 Other Income Depreciation and amortization charge for the year 2017-18 reduced by 13.6% and was at 1049 crore, as compared to 1215 crore in the previous year. The reduction was due to impairment of asset values in the previous year. 2017-18 Depreciation & Amortization Charge year. Profit before depreciation, interest and tax excluding other income (PBDIT) was 7429 crore for the year, higher by 14.6% over the previous year. 4500- registering an improvement of 20 bps over the previous The operating margins for the year stood at 10%, 5387 5454 6000 Profit After Tax 3000- Other comprehensive income during year, reflected a loss of 51 crore, compared to a gain of 157 crore in the previous year, mainly representing change in balances pertaining to cash flow hedge reserve on account of gain/loss during the period and profit/loss reclassification adjustments. 227 Funds Employed and Returns Treasury and dividend income (2592) 621 (Purchase)/Sale of Other investments (3132) 62 5980 2952 FY 17-18 FY 16-17 crore Standalone Fund Flow Statement Borrowings (net of repayments) Operating activities Particulars During the year, investments in and loans to subsidiary and associate companies increased by 1433 crore (net of proceeds from divestment). Major funding was provided to Financial Services, Shipbuilding and the Forge shop. As on March 31, 2018, the segment aggregate level net working capital at 15393 crore decreased to 20.6% of revenue as compared to 13933 crore at 21% of revenue as on March 31, 2017. Release in working capital is attributable to improved collections and better credit terms negotiated with vendors. Strategic investments in S&A companies and working capital funding requirements were met out of redemption of liquid investments and internal accruals. as at March 31, 2018 increased by 4326 crore during the year. Funds Employed by the Company at ₹ 62381 crore crore Profit after Tax (PAT), including exceptional items, for the year 2017-18 dropped by 1.2% to 5387 crore as compared to 5454 crore in the previous year. While the operating profits were higher for the year, the increase in tax expense and lower exceptional income as compared to the previous year, resulted in overall reduction in PAT. The Earnings per Share (EPS) for the year 2017-18 at 38.46 compared to 39 in the previous year. Profit after Tax & EPS Exceptional items of 431 crore for the year 2017-18 include gain on stake divestment in EWAC Alloys Limited and L&T Cutting Tools Limited, gain on dilution of stake in listed companies L&T Infotech and L&T Technology Services, and provision made towards uncertain recovery of outstanding from a customer referred under Insolvency & Bankruptcy Code. 0 20000- International 2017-18 2016-17 Domestic 77895 5000 89383 60000- 51738 80000- 58124 30000- 15306 15919 93201 100000- 13.0% 105302 2016-17 Domestic 3635 2017-18 Operating Cost and PBDIT Exceptional Items The interest expense for the year at 1432 crore was higher by 8.7% vis-à-vis 1317 crore for the previous year. The increase is attributable to a higher quantum of interest bearing customer advances. The average borrowing cost for the year 2017-18 was lower by 50 basis points at 7.5% p.a. with repayment of some high-cost borrowings during the year. Finance Cost Sales and administration expenses for the year at * 2831 crore increased by 6.1% y-o-y, mainly due to higher provisions for doubtful debts. Staff expenses for the year at 5714 crore increased by 11% y-o-y in line with revenue growth. The Company's manpower strength stood at 42924 as on March 31, 2018 compared to 41466 as at March 31, 2017. [Figures in brackets relate to previous year] Sales, Administration & Other Expenses Operating Profit (PBDIT) Mfg. Construction & Operating Expenses Staff Expenses 2017-18 7.6% (7.8%) 3.8% (4.0%) (9.8%) 10.0% Operating Expenses and Profitability 78.6% (78.4%) material, raw materials, components and subcontracting expenses, amounted to 58638 crore registering an increase of 12.8%. These costs represent 78.6% of Revenue, an increase of 20 basis points over the previous year. Increase in MCO cost percentage to revenue is mainly driven by change in the stage and mix of projects under execution. LARSEN & TOUBRO (MCO) expenses, comprising cost of construction Manufacturing, Construction and Operating International 14563 1875 50 - 4.0 4952 2000 4991 0 2.0 0.0 2016-17 Domestic 228 4000- The current 5 year strategic plan commenced in 2016-17 and is slated to end on 2020-21 during which time the group level shareholder value creation measured by Return on Equity (ROE) is targeted to grow significantly. of every financial year which, in turn, get folded into a While 5 year business outlook and broad financial goals are embedded as an overarching strategic plan, shorter term annual targets are framed before the commencement The company has embedded business strategy formulation as part of its long term sustainability plans. Business strategy is evolved every 5 years through a collaborative and consultative process that also includes financial parameters as guideposts for different elements of strategic plans. Strategy Formulation: previous year. The drop is mainly due to higher deployment of funds to support growing business volumes. The cash generated through internal accruals, treasury income and liquidation of current investments was mainly used for investments of 1456 crore in S&A companies and capex of 1013 crore, in addition to payment of dividend and interest of 2279 crore and 1322 crore respectively. Business operations generated cash flows of 2952 crore during the year as compared to 5980 crore in the Liquidity & Gearing Return on Net Worth (RONW) including exceptional items for the year 2017-18 at 11.3% is lower as compared to 12.4% in the previous year. rolling medium term plan. 6.8 - 6.0 6000 crore Percentage Domestic International OPM % 14000 14.0 12000 11760 12.0 Funds employed at 2271 crore decreased by 6.5% y-o-y aided by higher credit from vendors. 22.1% 10000- 9628 6769 10.0 4676 8000 - 8.0 7.7 2017-18 ―RONW % 2016-17 Funds Employed III. STRATEGY, BUSINESS MODEL AND RESOURCE ALLOCATION 8.0 (140) 1250 Increase/(decrease) in cash balance 1151 1322 Interest paid 1843 2279 Dividend Paid (1306) 1456 Net investment/(divestment) 635 1013 Capital expenditure (net) 2183 7320 Sources of Funds 53 Utilisation of Funds ESOP proceeds 7320 crore 65000 40000+ 9.0 45000 10.0 Total borrowings as at March 31, 2018 stood at 10561 crore as compared to 10558 crore in the previous year. Proportion of short-term borrowings increased to 39% as compared to 22% as at March 2017. The loan portfolio of the Company comprises a mix of domestic and suitably hedged foreign currency loans. The gross debt equity ratio decreased to 0.21:1 as at March 31, 2018 from 0.23:1 as at March 31, 2017. The net debt equity ratio was nominal at 0.04:1 as at March 31, 2018. 14.0 13.0 11.0 50000 11.3 12.0 55000 12.4 60000- 58055 15.0 62381 16.0 Percentage Funds Employed and Returns 2183 2017-18 55000 16488 2017-18 NIM % The Financial Services segment comprises Rural, Wholesale and Housing Finance as well as Investment and Wealth Management businesses housed within L&T Finance Holdings Limited (LTFH) and its subsidiaries. The general insurance business was divested during FY 2016-17. Excluding the general insurance business, Segment revenue grew 20% y-o-y at 10064 crore during the year ended March 31, 2018 on a comparable basis aided by growth in the loan assets and disbursements in all its focused businesses. 7. Financial Services (FS) During the year, the Company further divested 1.32% stake in L&T Infotech and 1.13% stake in L&T Technology Services, towards meeting the regulatory requirement of minimum public shareholding of 25% within three years from listing of its shares. The Funds employed by the segment at 5373 crore as at March 31, 2018 are higher by 26% as compared to March 31, 2017 due to increase in unbilled revenue, investments and goodwill on acquisition of new subsidiaries. - 7.0 60000- - 8.0 The Gross Non-Performing Assets (GNPA) ratio decreased from 7.11% (restated) as at March 31, 2017 to 4.80% as at March 31, 2018. LTFH, however, has been strengthening its balance sheet throughout the year by making accelerated provisions in addition to those required under regulations. Consequently, the coverage on GNPA increased from 31% (restated as per new RBI norms) in the year ended March 31, 2017 to 53% in the year ended March 31, 2018 indicating a much stronger balance sheet. As a result of this, the Net NPA ratio has reduced from 5.02% (restated) to 2.34% over the same period. 71841 9.0 87908 2017-18 - OPM % Revenue 2016-17 10.0 Percentage crore 100000 80000- LTFH also witnessed strong growth in its Investment & Wealth Management businesses. Average Assets under 6.25 - 6.0 DP Segment The segment clocked an operating profit of 270 crore for the year 2017-18, improving over the 91 crore earned in FY 2016-17, as Nabha Power accrued revenues on receiving a favourable judgement in the matter of disputed receivables. The revenue also includes operational revenue on partial commissioning of the L&T Metro Rail Hyderabad project in November 2017. The segment recorded revenue of 4294 crore for the year ended March 31, 2018, which is lower as compared to * 4367 crore in the previous year, as construction activity in the Hyderabad Metro project nears completion, and is partly compensated by higher revenue from the Rajpura power plant. The Group has acquired concessions through the competitive bidding process for the development of Power projects, Roads, Bridges, Hyderabad Metro Rail and power transmission line. The total portfolio of the group consists of 5 power projects, 15 road & bridge projects, 1 transmission line project, 2 ports and 1 metro rail project. The metro rail project is housed under L&T Metro Rail (Hyderabad) Limited (L&T MRHL) which is a 100% subsidiary of L&T. Power projects are developed by L&T Power Development Limited & other projects are developed by L&T Infrastructure Development Projects Limited. The total estimated cost of projects, reassessed not considering the 3 hydel power projects under hold, is pegged at 47807 crore, of which equity commitment is 10395 crore with 9293 crore having been infused as at March 2018. Developmental Projects (DP) 8. Management (AAUM) in the Investment Management business increased to ₹65932 crore during the year ended March 31, 2018 - a growth of 68%. Average Assets Under Service (AAUS) in the Wealth Management business increased to 18347 crore during the year ended March 31, 2018, registering growth of 35%. LARSEN & TOUBRO 224 Total Assets 2016-17 2.0 0 - 3.0 20000- 4.0 5.0 5.95 40000- 0.0 0 - 5.0 2000 4000- 6000- 8000- 8377 20.1% 10064 10000- Gross Revenue FS Segment 12000- crore Gross Revenue & OPM % IT & TS Segment The Segment Operating profit stood at 2391 crore for the year 2017-18 as compared to 2063 crore in the previous year. Operating margin improvement of 20 basis points, is on account of improved operational efficiencies. IT & Technology Services (IT & TS) The IT & TS segment comprises the L&T Infotech group of companies and the L&T Technology Services group of companies, which were listed in FY 2016-17. The segment recorded gross revenue of 11357 crore for the year ended March 31, 2018 recording a growth of 14.9% over the previous year. International revenue constitutes 91% of the total revenue of the segment. 6. 223 Funds employed by the segment at ₹ 1385 crore increased by 21.6% as compared to March 31, 2017 with deployment of surplus funds in treasury investments and higher carrying value of investments in the Joint Ventures under IND AS. 2017-18 International OPM % 2000- Gross Revenue & EBITDA 2016-17 crore Total Assets and NIM % FS Segment - 10.0 4000 - 15.0 6000 Disbursal of fresh Loans and Advances in Wholesale, Real Estate, Micro Loans and Farm portfolio amounted to 78590 crore during the year ended March 31, 2018 - a significant growth of 68% y-o-y. In line with the disbursements, the Asset Book in focused lending businesses stood at 82692 crore as at March 31, 2018 recording a growth of 28% y-o-y. Net interest margins at 6.25% improved over 5.95% in the previous year. 21.2 21.4 - 20.0 8000 35.0 - 30.0 - 25.0 10000 9888 14.9% 11357 12000 14000 Percentage 2017-18 crore 120000- The funds employed in the segment at as at March 31, 2018 mainly comprises L&T Metro Rail Hyderabad project cost. Standalone Order Book Composition Order Book as at March 31, 2018 stood at * 227523 crore, 83.8% of which is contributed by the Infrastructure segment. International orders constituted 17.9% of the current order book. L&T continues to carry a healthy order- book-to-revenue ratio at 3.05 providing better visibility of revenue growth over the medium term. Standalone Order Inflow Heavy Engineering order inflow pre-dominantly consisting of defence orders, reported a decline due to deferment of select prospects. Industrial demand has been low, reflecting modest order inflow growth in E&A business. The 'Others' segment saw pick-up in order inflow in the Minerals & Metals business, with higher commodity prices driving fresh investment. International order inflow dropped to 15.1% of the total order inflow for 2017-18 as compared to 16.4% in the previous year. Order inflow during 2017-18 grew by 13% at 105302 crore as compared to 93201 crore in the previous year. The Infrastructure segment contributed 79.1% of the total order inflow during the year as compared to 82.1% in the previous year. The Power business has been sluggish due to the sectoral challenges. Order Inflow & Order Book The key focus area continues to be enhancement of shareholder value through operating margin improvement and higher cash flow generation through working capital reduction and unlocking of capital earnings sub-par returns. opportunities, the Company has infused additional capital of 2000 crore in L&T Finance Holdings Limited. As a part of business portfolio restructuring, the Company divested its complete stake in two subsidiaries viz. EWAC Alloys Limited and L&T Cutting Tools Limited. In a major development, the company took concrete steps towards its stated intent to divest the Electrical & Automation business by signing, subject to regulatory approvals, a definitive agreement with Schneider Electric. 1497 1% Considering the returns potential and business 225 L&T delivered good performance on all operational parameters, despite a volatile environment. The domestic market is set on a growth path with a slew of reforms, as against the international arena caught in geo-political L&T's standalone financials capture the performance of the Infrastructure segment, Power, Heavy Engineering, Electrical & Automation and the 'Others' segment comprising Metallurgical and Material Handling business, a part of Realty business, a part of Hydrocarbon business, part of Shipbuilding business and Construction & Mining Machinery business. PERFORMANCE REVIEW II. L&T STANDALONE Industrial Machinery, Products & Others Gross Revenue - EBITDA 2017-18 turmoil. The Infrastructure business segment surpassed the previous year's performance, while the Power and Industrial businesses continued to experience headwinds to growth. 13475- 6% 10067- 4% 66301 12.5% 74612 226 Gross Revenue from Operation crore 80000- The Power segment revenue declined over the previous year by 10.6% as a result of a declining order book. Electrical & Automation segment grew by 4%. L&T achieved a revenue growth of 12.5% at ₹74612 crore as compared to ₹ 66301 crore in the previous year. Revenue growth over the previous year is mainly driven by execution pick-up in infrastructure projects in Transportation Infra, Heavy Civil Infra and Water & Effluent Treatment and progress in defence projects under Heavy Engineering. Revenue From Operations Total Order book: 227523 crore as at March 31, 2018 HE Others Power ΜΜΗ Hydrocarbon Infra E&A -190578 84% -3303 1% 1% *crore 1615 6988 3% 0 100 - 200 - 300 3644 4000 1477 2472 6000 3622 8000 4044 10000 10862 12000 crore 8834 Others Segment Gross Revenue Revenue for the segment declined during the year as demand for Real Estate in the metro cities of Mumbai and Bengaluru witnessed a slowdown post-demonetization, and the Valves business faced de-growth due to lower order intake on account of severe competition. With the segment registering one large-value transaction in Realty, the operating margin improved significantly compared to previous year. The 'Others' Segment covers Metallurgical and Material Handling (MMH), Realty, Shipbuilding, Construction and Mining Machinery, Industrial Machinery & Products and Valves businesses. 'Others' Segment 9. The Company is awaiting regulatory clearances to conclude the divestment in a container port in Kattupalli, Tamil Nadu to a strategic investor and is in advanced stage of selling 5 road concessions to an Investment Trust. 2000 19860 crore 0 Shipbuilding 270 -400 4294 500 2016-17 0 1000- 91 2000- 3000- 4000- 4367 5000- crore MMH Realty 2017-18 766 2969 702 2016-17 2016-17 0 Hydrocarbon Segment Gross Revenue & OPM % constituted 16% of the total order inflows for the segment. crore 100000 Infrastructure Segment Order Inflow 87277 11.2% 78492 The Group incurred capital expenditure of 2015 crore during the year, mainly on construction activity of L&T Metro Rail Hyderabad project. There was a net increase of * 3254 crore in the cash balances as at March 31, 2018 as compared to the beginning of the year. 80000- 14711 60000 40000 Consolidated Fund Flow Statement crore 63781 72979 Particulars 14298 a significantly higher income from investing activities - namely dividends, proceeds from sale of treasury investments and divestment activities - which was used to repay certain high cost borrowings and meet interest and dividend. LARSEN & TOUBRO 220 Net Worth and Returns * crore 60000- 50217 Percentage 55657 16.0 13.9 40000 12.8 12.0 20000- - 8.0 0 4.0 2016-17 Net worth 2017-18 - RONW % Liquidity & Gearing Cash flow from operations decreased to 6428 crore as compared to 12399 crore in the previous year mainly due to higher levels of working capital, which partially negated increase in operating profits. The group earned FY 17-18 FY 16-17 20000 Operating activities 7536 Capital expenditure (net) 2015 2821 (Borrowings)/Repayment of Borrowings 3691 693 Dividend paid 2390 2093 Interest paid 2471 2174 Increase/(Decrease) in cash balance 3254 Utilisation of Funds 13820 (245) 7536 The total borrowings as at March 31, 2018 stood at 107524 crore as compared to 93954 crore as at March 2017. The gross Debt Equity ratio as of end March 31, 2018 stood at 1.75:1, same as at March 31, 2017. Net Debt Equity ratio, however, as on March 31, 2018 is 1.47:1 as compared to 1.39:1 as on March 31, 2017. B. SEGMENT WISE PERFORMANCE (GROUP) 1. 13820 The Net Worth of the shareholders, as on March 31, 2018, at 55657 crore, reflects an increase of 5440 crore, as compared to the position as on March 31, 2017. Return on Net Worth (RONW) for the year 2017-18 was higher at 13.9%, driven by increase in net earnings, as compared to 12.8% in the previous year. Sources of Funds 50 6428 12399 (Purchase)/Sale of other investments 2169 (8136) 0+ Net (investment)/ divestment 477 3 2016-17 Domestic 2017-18 International Payment (to)/from minority interest (net) 1413 2059 Treasury and dividend income 3283 1158 ESOP proceeds 53 Infrastructure Segment Return on Net Worth Consolidated Profit after Tax (PAT) at 7370 crore for the year 2017-18 rose by 22% over the previous year at 6041 crore. 3028 1% 13523 5% 10067 4% 9357 4% 5123 2% 10% crore crore 140000 120000 9.0% 119862 110011 100000 39699 -195419 74% 26590- Order Book Composition Infrastructure segment continues to contribute 74% of the consolidated order book, comprising mainly Heavy Civil Infrastructure 18%, Building & Factories 17%, Transportation Infrastructure 14%, Power Transmission & Distribution 14% and Water & Effluent Treatment 11%. With reduced opportunities in the Power sector, the share in order book has declined from 5% to 4%. 160000 142995 120000 41507 6.9% 152908 35853 80000 101488 117055 40000 0 2016-17 Domestic 2017-18 International LARSEN & TOUBRO The growth in revenue was achieved despite transitory disruptions due to GST implementation during the year. Growth was largely contributed by Heavy Civil Infrastructure, Water & Effluent Treatment, Transportation Infrastructure, Hydrocarbon, Heavy Engineering and Services business. Delayed order awards impacted Metallurgical & Material Handling, while limited opportunities and intense price competition impacted revenue accruals in Power and Valves businesses respectively. Growth in L&T's Electrical & Automation business was supported by improved demand for standard products, particularly the metering systems. Gross Revenue from Operations A robust order book of 263107 crore as at March 31, 2018 gives multi-year revenue and margin visibility to the Company. With current year order inflow being domestic centric, the composition of international order book declined to 23.8% as at March 31, 2018, as compared to 26.7% in the previous year. As a result of introduction of Goods & Services Tax, the order book has been adjusted, since revenue excludes GST. 37654 80000 60000- 40000- Staff Expenses Sales, Administration & Other Expenses Operating Profit (PBDIT) [Figures in brackets relate to previous year] 219 Staff expenses for the year 2017-18 at ₹15292 crore increased by 10.4% over the previous year. Staff Cost as a percentage of revenue marginally increased to 12.8% from 12.6%, mainly due to addition of resources for growth of the IT & TS businesses. The Company continues to focus on improved productivity, digitalization and manpower rationalization. Sales and administration expenses increased by 10.1% y-o-y to 7693 crore, mainly due to higher provisioning by Financial Services, Development Projects, Infrastructure and Hydrocarbon business, partly compensated by exchange gains. The Group operating profit at ₹13571 crore for the year 2017-18 registered a healthy growth of 22% y-o-y. The EBITDA margins for the year also improved by 120 basis points to 11.3%. The closure of legacy projects in the Hydrocarbon business, cost optimization measures in product businesses, monetization of a Realty asset, the favourable Supreme Court judgement in the Nabha Power case and the strong growth of IT&TS businesses - contributed to the improvement in 2017-18, as compared to the previous year. Depreciation & Amortization Charge Depreciation and amortization charge for the year 2017-18 decreased by 19% to 1929 crore, compared to 2370 crore in previous year. The decrease was largely due to impairment in the asset values in some of the businesses, in the previous year. Other Income Other income at ₹1412 crore, which increased by 5% over 1344 crore, consists of profit on sale of liquid investments, interest and dividend income from treasury investments. The growth was on account of higher gains from deployment of surplus funds generated through operations, and through divestment of stake in subsidiaries. Finance Cost The interest expenses for the year 2017-18 at 1539 crore was higher by 15% in comparison to 1339 crore for the previous year. The increase was attributable to the impact of interest cost in L&T Hyderabad Metro Rail upon partial commencement of operations in November 2017, and cessation of capitalization of interest on Seawoods assets, on it getting ready for sale. Further, higher proportion of interest bearing advances in Infrastructure businesses and increase in LIBOR rates resulted in increasing the average borrowing cost for the year to 7.3%, as compared to 6.9% in the previous year. Exceptional Items Exceptional items of 123 crore during the year represent gain on divestment of stake in two wholly owned subsidiaries, EWAC Alloys Limited and L&T Cutting Tools Limited, net of provisions made towards uncertain recovery of outstanding from a customer referred under Insolvency & Bankruptcy Code. Tax Expense Income Tax charge for FY 2017-18 increased to ₹ 3199 crore compared to 2007 crore in FY 2016-17 mainly due to increased profits and higher Effective Tax Rate, on account of increased disallowances in respect of earlier years. Profit after Tax & EPS Mfg. Construction & Operating Expenses Consolidated Earnings per Share (EPS) including exceptional items for the year 2017-18 at 52.62 were higher by 22% over the previous year. 69.5% (70.9%) Revenue from Operations 80163 72357 20000- 0 2016-17 Domestic 2017-18 International Operating Cost and PBDIT Manufacturing, Construction and Operating (MCO) expenses at 83305 crore increased by 6.7% over FY 2016-17, registering improved operational efficiency. These expenses mainly comprise cost of construction material, raw materials and components, subcontracting expenses and interest costs of Financial Services business. Operating Expenses and Profitability 2017-18 6.4% (6.4%) 11.3% (10.1%) 12.8% (12.6%) Infra E&A Power ΜΜΗ Hydrocarbon HE Others Total Order book: 263107 crore as at March 31, 2018 L&T Group recorded revenue of 119862 crore during the year, registering a growth of 9%. Adjusted for Excise Duty in the previous year, the growth on a like-to-like basis was 9.5%. Revenue earned from international operations comprised 33% as compared to 34% in the previous year. The Infrastructure segment won orders worth * 87277 crore, higher by 11% over the previous year, mainly from domestic public sector and government customers. Large orders were won by Heavy Civil Infrastructure, Transportation Infrastructure and Water & Effluent Treatment. Although, liquidity constraints of customers, aggravated by demonetization continue to impact growth momentum in Buildings & Factories, during the year, the business was successful in winning a few large-value orders. The relatively new business of Smart World & Communication registered growth on receipt of smart city and telecom orders. Overall Infrastructure business saw reduced opportunities in the Middle East arising out of fiscal policy measures in those countries. International order wins of the Infrastructure segment, mainly in Power Transmission & Distribution and Transportation Infrastructure businesses, The Infrastructure segment clocked a gross revenue of * 59819 crore for the year 2017-18 registering 10.9% growth over the previous year. Execution of orders in hand progressed well majorly in Heavy Civil Infrastructure, Water & Effluent Treatment and Transportation Infrastructure. Building & Factories and Smart World & Communication faced some execution impediments by way of fund allotment/liquidity crunch, customer clearances and work-front availability. Right-of-way and environment clearances continue to hamper execution in some of the projects. 4740 1.0 2000 10.0 + 0.0 2319 3193 2017-18 - 15.0 1000 International OPM % 0 0.0 2016-17 2017-18 As stated in the previous year, with implementation of IND AS, the Joint Venture operations are consolidated only at 222 5.0 17.1 1128 - 2.0 6.0 crore Percentage 1468 5.0 5000 30.0 4114 4.0 19.3% 25.0 4000 3447 921 3.4 3.0 - 20.0 3000 20.0 Domestic International OPM % LARSEN & TOUBRO Funds employed by the segment as on March 31, 2018 at 1379 crore increased 6% y-o-y, on account of increase in construction work-in-progress awaiting invoicing milestones, which was partially offset by receipt of customer advances and higher vendor credit. 4. Electrical & Automation Segment (E&A) The E&A segment performed well, despite the transitionary challenges of GST. The Standard Products business contributed higher sales of final distributed products, agricultural starters and energy meters. The business recorded a gross revenue of 5508 crore for the year, an increase of 2.6% over the previous year and adjusted for excise duty in previous year, the growth is 11%. With lower than expected volumes in international group companies, revenue from international operations declined to 28.1% of the total revenues of the segment. Segment operating profit for the year improved to 822 crore, a 17% increase over previous year. Operating margins improved during the year by 90 basis points to 16%, owing to favourable product mix and improved operational efficiencies. year, driven by a number of onshore and offshore orders in domestic sectors and from the Middle East region. International orders accounted for 37.6% of total order inflow for 2017-18 as compared to 66.9% in the previous year, which included a large-size order in the offshore area of work. Hydrocarbon Segment crore 20000- 18525 Order Inflow 15000- 12392 10000- 5000- 6133 0 2016-17 Domestic -14.7% 15811 5941 9870 2017-18 International Segment revenue grew by a healthy 22% y-o-y at ₹ 11760 crore for the year, through strong execution progress, particularly, with respect to fast-track projects received during the year. International revenue contributed 57.6% of the total revenue of the segment as compared to 48.6% in the previous year, due to higher proportion of international orders in the opening order book. Favourable claim settlements and close-out of stressed jobs resulted in a higher operating profit of 904 crore as compared to 657 crore in the previous year and the consequent margin improvement from 6.8% to 7.7%. 0.0 6208 - 4.0 - 8.0 crore 7500 E&A Segment Gross Revenue & OPM % Percentage 24.0 5508 - 20.0 5367 2.6% 16,0 15.1 5000 - 16.0 1546 1576 2500- 3791 12.0 3962 7.0 Percentage 2016-17 Domestic 42436 - 4.0 0 0.0 2016-17 2017-18 Domestic International OPM % 221 The Funds employed by the segment at 17511 crore as at March 31, 2018 increased by 8.7% vis-à-vis March 31, 2017, with increased volumes. Increase in Gross Working Capital levels due to build-up of project work-in-progress, not due for invoicing and collection, was partially compensated by better vendor credit management and increase in customer advances on new order wins. 2. Power Segment The Power segment bagged orders worth 2414 crore as compared to ₹ 2866 crore in the previous year. The orders won during the year were majorly export orders. The domestic sector continues to be plagued with lower levels of coal-based power plant ordering in the face of over-capacity in boiler and turbine production as well as aggressive pricing by competitors. The order inflow was low, also due to the segment losing one large-value domestic order and non-participation in another large- value order due to unfavourable terms. crore 4500- Power Segment Order Inflow PAT level. This impacts the operating margin for the Power business, since the EPC margins reported as segment margins do not include the performance of joint ventures, which have a better margin profile. The funds employed by the segment stood at 790 crore as at March 31, 2018 - higher than 485 crore as on March 31, 2017 - with release of payments to vendors and higher carrying value of Investment in Joint Ventures under the Power Group, consolidated through equity method under IND AS. 3. Heavy Engineering Segment The Heavy Engineering segment recorded order inflow of * 5848 crore for the year ending March 31, 2018 - lower by 25.6% as compared to the previous year, which had a large-value Defence order. The current year had a mix of orders from the Nuclear Power Corporation of India and some defence sector orders. International orders constituted a nominal 2.7% of the total international order inflows. Heavy Engineering Segment Order Inflow 36242 crore 10000- 8.0 10,2 Revenue from international operations constituted 29% of the total revenues of the segment during the year as compared to 33% in the previous year, with a reduced international order book. The Infrastructure Segment's operating profit was higher by 10% on y-o-y basis at 5902 crore for 2017-18, though operating margins dropped marginally from 10.2% to 10% due to certain stressed international projects in Transportation Infrastructure and Buildings & Factories businesses. The Company has signed definitive agreements with Schneider Electric, a global player in energy management and automation, for strategic divestment of the Electrical & Automation business for an all-cash consideration of 14000 crore, subject to regulatory approvals. The transaction will cover all operations, except Marine Switchgear business and Servowatch Systems business. 5. Hydrocarbon Segment crore 90000 Infrastructure Segment Gross Revenue & OPM % Percentage - 28.0 - 24.0 60000 53921 10.9% 59820 - 20.0 17384 - 16.0 17679 - 12.0 30000 10.0 crore 2866 2414 2017-18 Power segment revenue declined y-o-y by 10.5% to * 6208 crore, as jobs under execution moved closer to completion and new awards were delayed. Revenue from international projects at 1468 crore represented 24% of the total revenue for the segment, largely contributed by gas-based power plant jobs under execution in Bangladesh. Operating margin decreased by 10 basis points to 3.4% during FY 2017-18, as compared to 3.5% in 2016-17 on account of change in job mix. Power Segment Gross Revenue & OPM % International Segment gross revenue of ₹4114 crore improved by 19% compared to the previous year on the back of execution progress on defence jobs received in the previous year. Revenue from international operations constituted 22% of the total revenue for the segment. The segment recorded a 6.4% increase in the operating profit for the year at 655 crore against an operating profit of 615 crore in the previous year. The operating margin declined from 20% in previous year to 17.1% in current year upon change in job mix. Heavy Engineering Segment Gross Revenue & OPM % crore 8000- 6939 -10.5% 6000- 1285 4000- 3.5 2000- 5654 0+ 2016-17 Domestic -15.8% 0 4880 3000 7861 645 8000 1089 -25.6% 5848 2067 6000 968 1500- 2221 4000- 0+ 2016-17 Domestic 347 2017-18 International 6772 2000- 40000- Report on Other Legal and Regulatory Requirements The above risk management activity is carried out under the framework of Financial Risk Management Policy approved by Audit Committee and noted by the Board. Financial risks in each business portfolio are measured and managed centrally within the Company. These risks are reviewed periodically, quantified and managed within the acceptable thresholds as laid out in the Risk Management Policy of the Company. VI. INFORMATION TECHNOLOGY L&T has pioneered the use of Information Technology for its business since the IT revolution started. As one of the early adopters, L&T implemented ERP systems for its businesses successfully in the late nineties, and since then, many other complementary systems around ERPs covering the entire set of business processes. For speed and agility, L&T has followed a federated approach to IT, wherein every business had its own IT setup consisting of core ERP, associated systems, IT Infrastructure and staff. New Digital Technologies (AI, ML, RPA & Analytics etc.) have been making dramatic transformations to many businesses. They have also given rise to new business models. L&T has also embarked on a digital transformation journey and are being designed and implemented across various businesses. 233 The implementation of these digital solutions has the potential to transform the way we operate, resulting in significant benefits to increase our competitiveness and profitability. Implementation of these solutions requires us to have robust foundational core IT systems running the businesses. While our efforts to design and implement the digital solutions are under way, our core IT systems are also being upgraded, with the requisite set of functionalities and technologies on a continuous basis to support these digital initiatives. To strengthen the Information Security status and to prevent any cyber threat to the Company's business or information repository, the Company has established a CISO office. This move is to give focused attention to the growing threats from the cyber world and to enhance the Company's cybersecurity protocols and secure the future of the organization. 234 DELOITTE HASKINS & SELLS LLP Chartered Accountants Indiabulls Finance Centre, Tower 3 27th - 32nd Floor, Senapati Bapat Marg Elphinstone Road (West) Mumbai 400013. LARSEN & TOUBRO INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LARSEN & TOUBRO LIMITED Report on the Standalone Ind AS Financial Statements We have audited the accompanying standalone Ind AS financial statements of LARSEN & TOUBRO LIMITED (the "Company"), which also includes 29 Joint Operations accounted on a proportionate basis, which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information. Management's Responsibility for the Standalone Ind AS Financial Statements The Board of Directors of the Company and those charged with governance of the joint operation referred to above, which is a company incorporated in India, are responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (the "Act") with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity in accordance with the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with the companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the respective companies and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view, and are free from material misstatement, whether due to fraud or error. The third line of defence lies with Corporate Audit Services (CAS). They give assurance on Internal Controls effectiveness by carrying out independent internal audits. CAS is staffed adequately with qualified professionals in both technical and financial fields. The department conducts audit of all units of L&T and its major S&A companies at regular intervals. Based on observations of Internal Audit department, respective process owners carry out necessary process / system improvements, and thereby strengthen overall control mechanism. The process of Internal Audit is reviewed by the Management and Audit Committee of the Board. Auditor's Responsibility The second line of defence lies with Corporate Internal Control (CIC) department. They facilitate and monitor the efficacy of the Internal Controls embedded in Operations so as to assist the management in establishing strong internal controls. The Internal Control Department at the Corporate level formulates procedures and guidelines for any areas of weaknesses that are identified during internal audit or as triggered by process owners or management based on internal or external risk factors. Apart from the internal mechanism to review and monitor internal controls; the Company also periodically engages independent professional firms to carry out review of the effectiveness of various Key Control processes in businesses and support functions. Their observations and suggestions on good practices are reviewed by the management for implementation and strengthening of the controls. The first line of defence lies with the Business Heads, process owners and support functions. They own primary responsibility for design, establishment of internal controls and its operating effectiveness in their respective areas of operation. The Internal Controls framework is documented in the form of Internal Controls Manuals, Standard Operating Procedures, Accounting Guidelines including regular management reporting and monitoring thereof. Policies and procedures are reviewed periodically from time to time for any changes required, due to change in business needs as well as improvements in processes to strengthen the internal control systems. The Authorisation Matrix for financial transactions are derived based on Board resolutions which are delegated to individuals based on business needs within the overall limits of Corporate Human Resource Challenges: The Company actively scans the environment for talent with skill-sets suited to the expanding and changing needs of the business, though availability of such resources is limited. The leadership pipeline has been strengthened and proper processes are implemented for hiring the best talent. Suitable retention policies are being constantly worked upon to minimize attrition of key resources. The Company has institutionalized the risk management processes to map and monitor the risks across the businesses and respond effectively to achieve its strategic 231 objectives. The Company has been successful in tapping the opportunities both in domestic and international markets. The Company sees risk management as a business enabler and believes that risk is an integral part of every business and promotes capability-building across the organization to anticipate and manage risks effectively. FINANCIAL RISKS Capital Structure, Liquidity and Interest Rate Risks The Company continues its policy of maintaining a conservative capital structure which has ensured that it retains the highest credit rating in a tough economic environment. Low gearing levels also equip the Company with the ability to navigate business stresses on one hand and raise growth capital on the other. This policy also provides flexibility of fund-raising options for the future, which is especially important in times of global economic volatility. Withdrawal of monetary accommodation in certain countries on the back of strong growth and rising inflation and the current geo-political positioning have resulted in elevated financial market volatility during the last quarter of FY17-18. Despite the challenging domestic economic environment in FY 17-18, primarily due to the spill-over effects of demonetisation as well as GST implementation issues, the Company managed to restrain the working capital usage, especially at net level. The Company has been investing capital into subsidiaries as scheduled, and in some cases to provide for deterioration in performance caused by the sluggish economic/business downturn and JV partner challenges, and also to optimise overall Group interest rate costs. The Company plans to maintain adequate liquidity on the Balance Sheet to deal with slow recovery/downturn in economic conditions. The Company judiciously deploys its periodical surplus funds in short-term investments in line with the defined treasury policy. The Company constantly monitors the liquidity levels, economic and capital market conditions and maintains access to the lowest cost means of sourcing liquidity through banking lines, trade finance and capital markets. The Company further optimized the cost of debt by using subsidized export financing scheme of RBI and Commercial Paper issuance as well as re-pricing of some of its existing long-term liabilities. The Company dynamically manages interest rate risks through a mix of fund-raising products, investment products and derivative products across maturity profiles and currencies within a robust risk management framework. Foreign Exchange and Commodity Price Risks The various businesses of the Company are exposed to fluctuations in foreign exchange rates and commodity prices. Additionally, it has exposures to foreign currency denominated financial assets and liabilities. The business- related financial risks, especially involving commodity prices, by and large, are managed contractually through price variation clauses, while the foreign exchange and residual commodity price risks are managed by an appropriate choice of treasury products for balancing risks and at the same time optimising the hedging costs. Design & The financial year 2017-18 was characterised by a relatively strong USD against developed market currencies on robust US growth and inflation pick-up. Despite US rate hike concerns, rising oil prices and GST implementation concerns, rupee depreciation was contained during the year. However, synchronized global economic growth along with demand/supply mismatches led to an increase in commodity prices. The combination of lower exchange rate volatility along with robust financial risk management processes resulted in lower financial cost and reduced the impact of higher input costs on the Company. V. INTERNAL CONTROLS The growing business activities, restructuring of businesses and challenging external factors call for a constant review of the efficacy of the Company's internal control mechanism. Sound internal control procedures reduce process variation, leading to more predictable outcomes. The Company is committed to ensuring an effective Internal Control environment that will help in preventing and detecting errors, irregularities and frauds, thus ensuring security of Company's assets and efficiency of operations. The Company has an internal control mechanism which is commensurate with the size and complexity of business and aligned with evolving business needs. Strong Corporate Governance and the right tone at the top serves as a strong pillar for excellence. This is demonstrated through various means including, but not limited to, the Corporate Policy on Internal Controls, which provides a structured framework for identification, rectification, monitoring and reporting of Internal Control weaknesses the Company along with responsibilities and tasks enjoined upon employees in all positions; the Policy on Code of Conduct for employees and vendors 232 LARSEN & TOUBRO together with the Whistle Blower Policy that extends to vendors and channel partners, the facility of expression of genuine concerns about unethical behaviour, improper practice, any misconduct, any violation of legal or regulatory requirements, actual or suspected fraud by any official of the Company without fear of punishment or unfair treatment; Internal Controls evaluation included as part of employee's appraisal; and appraising Senior Management and the Audit Committee of the Board periodically on the internal processes of the Company with respect to Internal Controls, Statutory Compliances and Assurance. The Company has well-documented policies, procedures and authorization guidelines commensurate with the level of responsibility and standard operating procedures specific to the respective businesses. The Company has laid down Internal Financial Controls (IFC) as detailed in the Companies Act, 2013 and has covered all major processes commensurate with the size of business operations. Controls have been established at the entity level and process levels, and are designed to ensure compliance with internal control requirements, regulatory compliance and appropriate recording and reporting of financial and operational information. Processes and controls laid down as per IFC are regularly updated for all the changes occurring internally due to change in business process, restructuring, IT changes, etc. or any changes in external scenarios like introduction of new law, new risk, etc. There is appropriate framework in place to ensure that adequate internal controls are laid down and operate effectively. The Internal Control Organisation The Company has adopted the three-lines-of-defence model as prescribed by COSO (Committee of Sponsoring Organizations) to ensure an effective internal controls mechanism within the Company. Authorisation Guidelines. Financial powers are vested based on business requirements and there is no automatic vesting of powers based on designation / grade of an individual. Claims management: The Company maintains a strong documentation and follow up with clients / sub- contractors/vendors for any claim that is submitted. Legal teams are consulted periodically to ensure a robust process of claims management. Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit. We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement. i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements; 236 ii. LARSEN & TOUBRO The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts and iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company. 2. As required by the Companies (Auditor's Report) Order, 2016 ("the Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in "Annexure B" a statement on the matters specified in paragraphs 3 and 4 of the Order. For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm Registration No. 117366W/W-100018) P. R. RAMESH (Partner) (Membership No. 70928) MUMBAI, May 28, 2018 ANNEXURE “A” TO THE INDEPENDENT AUDITORS' REPORT (Referred to in paragraph 1 (f) under 'Report on Other Legal and Regulatory Requirements' section of our report of even date) Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act") We have audited the internal financial controls over financial reporting of Larsen & Toubro Limited (the "Company") as at March 31, 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company as for the year ended on that date which includes internal financial controls over financial reporting of 1 of the 29 joint operations, which is a Company incorporated in India. With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us: In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder and the Order issued under section 143(11) of the Act. With respect to the adequacy of the internal financial controls over financial reporting of the Company and joint operation which are companies incorporated in India and the operating effectiveness of such controls, refer to our separate Report in "Annexure A". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company's and its joint operation internal financial controls over financial reporting; and In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act; An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements. We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements. 235 Opinion In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of reports of the other auditors on financial information of joint operations referred to in the Other Matters paragraph below, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with Ind AS and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date. Other Matters a) b) We did not audit the financial information of 25 joint operations included in the standalone Ind AS financial statements of the Company whose financial information reflect total assets of ₹4,583.15 crore as at March 31, 2018 and total revenues of 5,285.06 crore and net cash inflows of 203.19 crore for the year ended on that date, as considered in the standalone Ind AS financial statements. The financial information of these joint operations has been audited by the other auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these joint operations and our report in terms of subsection (3) of Section 143 of the Act, in so far as it relates to the aforesaid joint operations, is based solely on the report of such other auditors. Our opinion on the standalone financial statements and our report on Other Legal and Regulatory Requirements below is not modified in respect of this matter. The Statement includes the unaudited financial information of 3 joint operations included in the standalone Ind AS financial statements of the Company whose financial information reflect total assets of 34.28 crore as at March 31, 2018 and total revenues of 5.32 crore and net cash outflows of less than 0.01 crore for the year ended on that date, as considered in the standalone Ind AS financial statement. The financial information of these joint operations is unaudited and have been furnished to us by the Management and our opinion on the Statement, in so far as it relates to the amounts and disclosures included in respect of these joint operations, is based solely on such unaudited financial information. In our opinion and according to information and explanation given to us by the Management, such financial information is not material to the Company. The audit of standalone financial statements for the year ended March 31, 2017 were carried out by us jointly with another firm of chartered accountants, and the report had expressed an unmodified opinion in relation thereto. 1. As required by Section 143(3) of the Act, based on our audit and on the consideration of the reports of the other auditors on the financial information of joint operation, referred to in the Other Matters paragraph above we report, to the extent applicable that: a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. b) c) f) g) In our opinion, proper books of account as required by law have been kept by the Company and its joint operation companies so far as it appears from our examination of those books and the reports of the other auditors; The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Cash Flows and Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of accounts; On the basis of the written representations received from the Directors of the Company as on March 31, 2018 taken on record by the Board of Directors and the report of statutory auditor of its joint operation company incorporated in India, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164(2) of the Act; Management's Responsibility for Internal Financial Controls Working Capital Challenges: Project delays and adverse contractual payment terms sometimes lead to increased working capital requirements. The Company has strengthened the process for close monitoring of cash flows at the project level. The Company ensures regular follow-up for delay in payments by client, and has ensured improvement in working capital levels. Execution Challenges: The Company faces execution challenges, such as geological surprises, availability of work front, land acquisition and right- of-way (ROW), pending approvals and clearances from Government agencies, working in difficult/harsh weather conditions, manpower issues, etc. The Company closely tracks the key risks for each project to effect timely mitigation. Engagement • Medium term opportunities • Quality Control Fabrication & Construction IT Services Commissioning Engineering & Technology Services Business Portfolio Strategy: . • • The Company focuses on its proven and core competencies of conceptualising, executing and commissioning large complex infrastructure projects in the areas of Roads & Bridges, Power Transmission & Distribution, Thermal / Hydel / Solar / Nuclear Power Plants, Water & Irrigation Infrastructure, Residential / Commercial / Institutional / Factory Buildings, Real Estate Development, Airports, Metro & Conventional Railways, Onshore & Offshore Hydrocarbon facilities and Metallurgical installations. An integrated EPC (Engineering, Procurement & Construction) business strategy forms the core backbone of the Company's business portfolio. The diversified but cyclical nature of EPC business is counterbalanced through a portfolio of manufacturing and services business. Manufacturing is mainly concentrated around electrical products and systems (made-to-stock and made-to-order), heavy custom- built equipment catering to process industries and defence, material handling equipment and industrial products & machinery. Services business caters to sectors of Information Technology, Engineering R&D and Financial Services The business portfolio spans across domestic and international markets in line with the strategy of having a well-balanced geographically diversified business. Strategic Thrust and Direction: At the core of the Company's strategy the overarching aim to create shareholder value through enhanced Return on Equity (ROE). The RoE improvement strategy encompasses strategic, tactical and operational elements such as: • • Capex & Liquidity plan • plan Management Financial Services 5 years • Organization structure • Business Portfolio • Geographical Business Strategy • Leadership Pipeline • Long Term Capex Outlay • Investment in emerging businesses • Strategic Partnerships 2-3 year • Realignment of Plans • Assessment of macro investment momentum • CRM plan • Employee Annual • Annual Budgets • Order prospect pipeline • Bid management policies • Key Account • Order Book Execution Partner Risks: Company partners with different contractors (Joint Venture / consortium projects) across businesses based on technical requirements/local market conditions. The partner's performance and financial strength are crucial for project success. Learnings from past projects are incorporated in the inter-se agreement with the partners and clauses on liability of each partner are carefully drafted after legal due diligence. • Incubating new businesses to tap future growth opportunities In the fourth tier, the Project Heads act as risk owners and manage operational risks. The Audit Committee, ARMC and the Risk Management Committees at various levels are informed on the critical risks affecting the Company for their review and guidance. Mitigation plans are drawn up and implemented as appropriate within the overall ERM framework of the Company. The Company works predominantly in the project business and has developed robust project risk management processes. The key processes of risk reviews include Pre-bid risk reviews, Execution risk reviews, Project Close-out risk reviews and Country Clearance, in case of venturing into a new country and revisit clearances based on the geopolitical and economic developments in each of the cleared countries. Pre-bid reviews are carried out as a pre-requisite for bidding for any new project based on a bid authorization matrix. Execution risk reviews of the projects are held at regular intervals to track project performance, movement of risks in the project and effectiveness of mitigation measures. Close-out risk reviews are held to capture key learnings from the projects and what went right/wrong analysis, which help in factoring learnings for future bids and creating a knowledge repository. The Company also has a robust Financial Risk Management set-up which focuses on exposures and risks emanating from currency and commodity price volatility in the course of business. The structural stability and strength of the Company is ensured by careful Assets / Liabilities planning. L&T has been conferred the prestigious 'Best Risk Management Framework And Systems - Capital Projects & Infrastructure Award' at the India Risk Management Awards event organized by CNBC TV18. The Company emphasizes on continuous learning and has initiated several knowledge-based initiatives to improve risk awareness across the organization. One such initiative was launching of an e-learning training program for employees on Enterprise Risk Management (ERM) to disseminate knowledge and enhance capabilities on risk management, which will lead to better business performance. The course is continuously updated with new case studies relevant to the various business verticals. 230 LARSEN & TOUBRO Periodic training workshops on risk management are held across the Company. The Company organises seminars and conclaves on Risk Management, where eminent speakers on the subject are invited to share perspectives and to elevate the level of discussions on the topic within the Company. The Company has a Knowledge Centre established to provide inputs to the businesses comprising the latest economic developments and covering analysis on competitors, clients, sectoral studies, countries and geo-political developments. The efforts are on to help businesses anticipate potential risks in their respective areas and work out suitable steps to deal with them. This also highlights opportunities in the sectors/ geographies of interest. The Company recognizes exceptional contribution in managing risks by awarding selected project teams in the annual L&T Risk Management Awards. The top enterprise-level risks for the Company and the mitigation measures being implemented are: Geopolitical Risks: Unexpected political changes in some of the developed countries, trade barriers and increasing conflict in the Middle East (The Saudi - Qatar standoff) are some of the risks that the Company faces. The Company monitors such geopolitical risks, and develops appropriate mitigation strategies addressing geographical concentration, strategic sourcing options, regular monitoring of international sanctions and other economic measures. Slow Recovery of Key Sectors: Growth in sectors such as Power, Nuclear, and Metals & Minerals continued to be hampered by a number of constraints such as the lack of investment, the reduction in power tariffs, the slow pace of decision-making, the financial distress of players, the delay in environmental clearances, the lingering effects of the mining ban, etc. Being a diversified conglomerate helps mitigate the risk of such slowdown in some sectors, as we see compensating growth in certain other sectors. Renewed impetus to Infrastructure sector by the Government - namely roads, railways, airports & waterways provides growth opportunities in the near future. - Competition: It has been observed that competition from foreign and domestic players has considerably increased in the past few years. The Company's engineering, procurement, and construction business derives its competitive strength from its excellence in executing projects of varying sizes - its reputation for quality, technology, cost-effectiveness and its project management expertise. This helps in gaining an edge over the competition. Reputation and Brand: The Corporate Governance and Compliance policy is in place mandating adherence to the Code of Conduct and Internal Controls. This is ensured by regular knowledge-sharing across the organization and appropriate controls. Other Operational Risks: The third tier comprises dedicated Risk Officers at each of the business verticals who oversee and co-ordinate the risk management processes at the respective businesses. Focusing on timely and cost-effective execution of the Company's unexecuted Order Book (Backlog) while ensuring adequate backfill through order wins Ensuring translation of healthy margin profile in the Order Book into financial statements through execution, operational excellence and digitalisation initiatives The second tier is the Corporate Risk Management department and the Chief Risk Officer (CRO), who oversee and facilitate the Risk Management processes enterprise- wide and lead organization-wide initiatives in the Risk Management domain. IV. RISK MANAGEMENT Maintaining an optimum mix between domestic and international business Ensuring efficient and optimal utilisation of assets and facilities Optimising capex and working capital levels Value monetisation for unlocking capital Maintaining and enhancing shareholder payouts • Optimising financial leverage 229 In the first 2 years of the plan, RoE has improved from 9.9% in 2016-17 (base year) to 13.9% in 2017-18 and is in line with the plan. Resource Allocation: The Company has a well laid-out plan of resource allocation to meet its strategic objectives. These include: • • • • Maintaining adequate liquidity on the Balance Sheet to exploit organic and inorganic growth opportunities and fund emerging businesses such as Smart City Infrastructure, Nuclear Power and Defence equipment manufacturing. Prudent allocation of resources (Capex and Working Capital) to fund growth in businesses Maintaining strong financial health to facilitate access to the Capital Markets as and when required Attracting and retaining a robust and thriving talent pool through employee engagement programs, monetary and non-monetary incentives, leadership development initiatives, offering professional development opportunities and fostering a conducive organisation climate. The company has evolved a series of structured HR policies to enable this resource allocation. Sustainable and long term engagements with labour sub-contractors to ensure steady augmentation of resources at project sites Ensuring judicious allocation of manpower and monetary resources to company-wide sustainability and growth initiatives such as CSR, Digitisation and operational excellence programs L&T has a four-tiered structure for Risk Management. The top-tier comprises the Audit Committee and a Board- appointed Apex Risk Management Committee (ARMC) comprising of Executive Directors. The Audit Committee of the Board oversees the efficacy of the risk management processes. Strategic risks and top operational risks and new initiatives (new geography, new investment etc.) for respective businesses are discussed in detail in the ARMC meetings. EPC Projects The Board of Directors of the Company and those charged with governance of the joint operation referred to above, which is a Company incorporated in India, are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to respective Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act. Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting of the Company and its joint operation Company incorporated in India, based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Schematics of the business portfolio strategy: LARSEN & TOUBRO • Productivity targets • KPIs: Order wins, Revenues, Profits, Working Capital and RoE targets • Annual business plan Operating Plan • Course Corrections environment to changes in • Rolling plan to adapt Business Plan • Assessment of Emerging Technologies • Key Strategic Initiatives • View on Domestic Economy • Assessment of global macro environment • Long Term Business Outlook Strategic Plan OBJECTIVE TIMELINES SCOPE Auditor's Responsibility Manufacturing (b) The Company has a program of physical verification of its property, plant and equipment to cover all the items of property, plant and equipment in a phased manner over a period of 3 years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its property, plant and equipment. Pursuant to the program, certain property, plant Engineering 238 Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment. 237 We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditor of the joint operation which is a Company incorporated in India, in terms of their reports referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the Company's internal financial controls system over financial reporting. Meaning of Internal Financial Controls Over Financial Reporting Inherent Limitations of Internal Financial Controls Over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion In our opinion, to the best of our information and according to the explanations given to us and based on the consideration of the report of the other auditor on internal financial controls system over financial reporting of the joint operation referred to in the Other Matters paragraph below, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting established by the respective Company considering the essential components of internal control stated in the Guidance Note. Other Matters Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting insofar as it relates to 1 joint operation, which is a Company incorporated in India, is solely based on the report furnished to us by the other auditor of such Company. Our opinion is not modified in respect of this matter. A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Chartered Accountants For DELOITTE HASKINS & SELLS LLP In respect of the Company's property, plant and equipment: (i) ANNEXURE "B" TO THE INDEPENDENT AUDITORS' REPORT (Referred to in paragraph 2 under 'Report on Other Legal and Regulatory Requirements' section of our report to the Members of Larsen & Toubro Limited of even date) (Membership No. 70928) (Partner) P. R. RAMESH (Firm Registration No. 117366W/W-100018) MUMBAI, May 28, 2018 830.53 439.88 5.25 (6.35) 20430.65 (230.85) (19180.19) 371.17 13698.56 (12708.16) (2304.55) 375.80 (75.00) 3348.24 502.51 (19.45) 384.72 2017-18 659.63 53.32 49.50 Proceeds from fresh issue of share capital (including share application money) C. Cash flow from financing activities: crore 2016-17 crore (749.02) 114.35 (3375.61) Statement of Cash Flows for the year ended March 31, 2018 (contd.) 247 (46.44) 1787.06 83.65 (56.89) (125.74) 2693.08 1068.38 Deposits/loans (given) - subsidiaries, associates, joint venture companies and third parties (1136.78) 2951.81 (1519.47) (1633.70) 7499.16 4585.51 1973.38 9757.85 192.26 (705.73) (1558.15) (12405.09) Cash (used in)/generated from operations Increase/decrease) in trade payables and customer advances (Increase)/decrease in inventories (Increase)/decrease in trade and other receivables 5979.69 Direct taxes refund/(paid) [net] Net cash (used in)/from operating activities B. Cash flow from investing activities: Net cash (used in)/from investing activities Consideration received on transfer of Foundry Business unit Settlement of derivative contracts related to current investments Dividend received from other investments Dividend received from subsidiaries Interest received Advance towards equity commitment refund 123.32 (3420.51) Deposits/loans repaid - subsidiaries, associates, joint venture companies and third parties Advance towards equity commitment (addition) Change in other bank balance and cash not available for immediate use (Purchase)/sale of current investments (net) Purchase of non- current investments Divestment of stake in subsidiaries, associates and joint ventures Investment in subsidiaries, associates and joint ventures Sale of fixed assets (including advance received) Purchase of fixed assets Proceeds from non-current borrowings [Note 62] 1922.70 Additional tax on dividend Repayment of non-current borrowings [Note 62] 4637.39 223.56 319.52 1599.91 1134.12 crore 1935.81 crore 3183.75 2016-17 2017-18 N. HARIHARAN Company Secretary M. No. A3471 248 Mumbai, May 28, 2018 Membership No. 70928 Partner P. R. RAMESH 3759.28 by the hand of 4.00 1134.12 SANJEEV AGA (DIN 00022065) SUNITA SHARMA (DIN 02949529) M. M. CHITALE (DIN 00101004) Directors M. DAMODARAN (DIN 02106990) VIKRAM SINGH MEHTA (DIN 00041197) SUBODH BHARGAVA (DIN 00035672) R. SHANKAR RAMAN Chief Financial Officer & Whole-time Director (DIN 00019798) Chief Executive Officer & Managing Director (DIN 02255382) S.N.SUBRAHMANYAN 1938.15 3187.75 223.56 319.52 1599.91 2.34 0.64 Firm's Registration No. 117366W/W-100018 For DELOITTE HASKINS & SELLS LLP (1321.87) Interest paid (including cash flows from interest rate swaps) (141.20) (317.93) (1701.51) (1960.76) Dividends paid 170.51 149.31 Settlement of derivative contracts related to borrowings (1905.88) 1783.81 (Repayments)/proceeds from other borrowings (net) [Note 62] (1397.62) (3794.12) (1151.42) Chartered Accountants Net cash (used in)/from financing activities (6073.16) In terms of our report attached 4. Previous year's figures have been regrouped/reclassified wherever applicable. (a) Cash and cash equivalents disclosed under current assets [Note 12] (b) Other bank balances disclosed under current assets [Note 13] (c) Cash and cash equivalents disclosed under non-current assets [Note 7] Total Cash and cash equivalents as per Balance Sheet Add: (i) Unrealised exchange (gain)/loss on cash and cash equivalents Less: (ii) Other bank balances disclosed under current assets [Note 13] Less: (iii) Cash and cash equivalents disclosed under non-current assets [Note 7] Total Cash and cash equivalents as per Statement of Cash Flows 3. Cash and cash equivalents included in the Statement of Cash Flows comprise the following: 2. Purchase of fixed assets represents additions to property, plant and equipment, investment property and other intangible assets adjusted for movement of (a) capital-work-in-progress for property, plant and equipment and investment property and (b) intangible assets under development during the year. 1. Statement of cash flows has been prepared under the indirect method as set out in the Ind AS 7 "Statement of Cash Flows" as specified in the Companies (Indian Accounting Standards) Rules, 2015. Notes: 1938.15 3187.75 Cash and cash equivalents at end of the year 2078.06 1938.24 Cash and cash equivalents at beginning of the year (includes ₹ 0.09 crore transferred under scheme of merger - Note [60]) (139.91) Net (decrease)/increase in cash and cash equivalents (A + B + C) (3489.36) 1249.51 (6.61) 3 2 0.93 The Central Excise Act, 1944, Service Tax under Finance Dispute regarding question of law, classification dispute and other matters. High Court 2005-06, 2007-2008, 2009 to 2011 113.87 85.13 CESTAT 1991-92, 2001-02 to 2011-12 413.35 LARSEN & TOUBRO and equipment were physically verified by the Management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification. (c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed / transfer deed / conveyance deed provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings (including land whose title deed have been pledged as security against debentures issued by the Company), are held in the name of the Company as at the balance sheet date, except the following: crore Type of asset Total no. of cases 0.94 1999-00 to 2001-02, 2013-2014 Commercial Tax Officer Assessing/ 2.62 1.99 Commissioner Joint 2012-2013 to 10.87 6.27 Commissioner 2015-2016 Land Joint 1,414.85 1,325.03 Commissioner (Appeal) Non submission of forms and other matters Assistant / Deputy Commissioner 1996-97 to 2013-14 499.29 497.10 1995-96 to 2012-13 Buildings 408.54 Act, 1994 and Customs Act, 482.31 to 2012-2013 LARSEN & TOUBRO (viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to financial institutions and banks and dues to debenture holders. The Company has not borrowed any funds from the government. (ix) In our opinion and according to the information and explanations given to us, the Company has not raised any money by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under paragraph 3 (ix) of the Order is not applicable to the Company. (x) To the best of our knowledge and according to the information and explanations given to us, no material fraud by the Company and no material fraud on the Company by its officers or employees has been noticed or reported during the year. (xi) In our opinion and according to the information and explanations given to us, the Company has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act. 2004-2005, 2007-2008 1,564.30 (xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company and hence reporting under paragraph 3 (xii) of the Order is not applicable to the Company. (xiv) According to the information and explanations given to us, during the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under paragraph 3 (xiv) of the Order is not applicable to the Company. (xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or persons connected with him and hence provisions of section 192 of the Act is not applicable to the Company. (xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm Registration No. 117366W/W-100018) P. R. RAMESH (Partner) (xiii) In our opinion and according to the information and explanations given to us, the Company is in compliance with Section 177 and 188 of the Act, where applicable, for all transactions with related parties and the details of such related party transactions have been disclosed in the financial statements as required by the applicable accounting standards. 2011-12 to 2012-13 ITAT 10.39 1962 Mine and Minerals (Regulation and Development) Act, 1957 Income-tax Act, 1961 Disallowance of CENVAT credit, short payment of service tax, MRP Valuation disputes, dispute regarding classification of services and other matters. Disallowance of CENVAT credit, short payment of service tax, service tax rate dispute, valuation dispute and other matters Demand arising out of Regular Assessment/Reassessment Demand notice for royalty on alleged use of excavated minor minerals. 25.92 24.85 Commissioner 2012-2013 2.05 2.05 High Court 2013-2014 to 2015-2016 20.79 Commissioner 2006-07 to 2014-15 (Appeal) Adjustments for: Additional 8.67 Forum where Dispute is Pending Period to which Amount Relates Amount Involved (*crore) Amount Unpaid (* crore) Central Sales Taxability of sub-contractor Supreme 2000-01 to 2006-07 12.12 3.13 Tax Act, Local Sales Tax Acts, turnover, rate of tax for declared goods, inter-state sales and Court Entry Tax Nature of Dues Name of Statute (c) Details of dues of Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Goods and Service Tax and Value Added Tax which have not been deposited as on March 31, 2018 on account of disputes are given below: (b) There were no undisputed amounts payable in respect of Provident Fund, Employees' State Insurance, Income-tax, Sales Tax, Service Tax, Goods and Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other statutory dues in arrears as at March 31, 2018 for a period of more than six months from the date they became payable. Leasehold / freehold Freehold Gross block as at March 31, 2018 Net block as at March 31, 2018 Remarks 1.27 1.27 Freehold 3.52 and Works Contract Tax 0.73 (ii) In respect of immovable properties of land and buildings that have been taken on lease and disclosed as property, plant and equipment in the financial statements, the lease agreements are in the name of the Company, where the Company is the lessee in the agreement. As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals and no material discrepancies were noticed on physical verification between the physical stock and the books of accounts. (iii) According to the information and explanations given to us, the Company has not entered into any contracts or arrangements covered under section 189 of the Act and hence reporting under paragraph 3 (iii) of the Order is not applicable to the Company. (iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Act in respect of grant of loans, making investments and providing guarantees and securities, as applicable. (v) According to the information and explanations given to us, the Company has not accepted any deposits during the year and does not have any unclaimed deposits as at March 31, 2018 and hence, the provisions of the clause 3 (v) of the Order is not applicable to the Company. (vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Act. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended and prescribed by the Central Government under sub-section (1) of Section 148 of the Act, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained by the company. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete. (vii) According to the information and explanations given to us, in respect of statutory dues: (a) The Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Employees' State Insurance, Income-tax, Sales Tax, Service Tax, Goods and Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other statutory dues applicable to it to the appropriate authorities. Conveyance deed pending to be executed as the matter is sub judice. Act non-submission of forms 239 61.96 54.43 1993-94, 1994-95, 1998-99 to 2002-03, 2005-06, 2006-07 to 2012-13 Sales Tax/ VAT Tribunal 1989-90 to 2013-2014 505.84 1986-87 to 1987-88, 442.41 Non-submission of forms, classification disputes, inter-state sales turnover, rates of tax of declared goods, classification dispute, disallowance of Entry Tax and other matters Dispute regarding question of law, non-submission of forms, classification dispute, disallowance of setoff, valuation of goods, sales in transit and high sea sales, and other matters. Commissioner 1995-1996 to (Appeal) 2013-2016 35.27 34.36 Commissioner 1994-1995 to 8.67 Contract Tax Act 2016-2017 High Court Amount Unpaid (* crore) 240 Name of Nature of Dues Statute Central Sales Tax Act, Local Sales Tax Acts, Entry Tax Pending Dispute regarding question of law, classification dispute, local VAT and Works contract disputes. Forum Period to which Amount where Amount Relates Involved Dispute is (crore) and Works 6891.67 7938.48 Operating profit before working capital changes 243 Statement of Profit and Loss for the year ended March 31, 2018 2017-18 2016-17 Note crore crore crore crore INCOME: Revenue from operations Other income 31 32 Total Income 74611.65 1884.82 577.49 149.10 Construction materials consumed Excise duty 7370.57 8092.54 SANJEEV AGA (DIN 00022065) Cost of raw materials components consumed Manufacturing, construction and operating expenses EXPENSES: 68216.31 1914.96 66301.35 76496.47 33 SUNITA SHARMA (DIN 02949529) M. M. CHITALE (DIN 00101004) Directors 1 to 64 NOTES FORMING PART OF THE FINANCIAL STATEMENTS COMMITMENTS (capital and others) 29 102238.44 115610.02 22 CONTINGENT LIABILITIES 45.91 367.97 1092.99 1102.22 18186.75 20853.82 TOTAL EQUITY AND LIABILITIES 22237.57 30 For DELOITTE HASKINS & SELLS LLP M. DAMODARAN (DIN 02106990) VIKRAM SINGH MEHTA (DIN 00041197) SUBODH BHARGAVA (DIN 00035672) R. SHANKAR RAMAN Chief Financial Officer & Whole-time Director (DIN 00019798) Chief Executive Officer & Managing Director (DIN 02255382) S.N.SUBRAHMANYAN In terms of our report attached N. HARIHARAN Company Secretary M. No. A3471 Membership No. 70928 Partner P. R. RAMESH by the hand of Firm's Registration No. 117366W/W-100018 Chartered Accountants Mumbai, May 28, 2018 18493.31 Purchase of stock-in-trade 1296.62 Deferred tax Current tax Tax expenses 6757.84 7262.38 Profit before tax Profit after tax 893.97 6831.85 430.53 46 Exceptional items Profit before exceptional items and tax 62352.44 69664.62 5863.87 Total expenses Carried forward 49 (a) Brought forward Statement of Profit and Loss for the year ended March 31, 2018 (contd.) LARSEN & TOUBRO 5453.74 5387.30 5453.74 244 5387.30 1875.08 (371.10) (98.99) 49 (a) 1675.20 1974.07 1304.10 27 1.51 Less: Overheads capitalised 58638.26 5817.99 6388.59 Other manufacturing, construction and operating expenses 131.59 (962.36) 52003.47 Changes in inventories of finished goods, work-in-progress and stock-in-trade and property development 19620.99 Sub-contracting charges 1446.67 1815.21 Stores, spares and tools consumed 1390.84 16775.01 5.19 Employee benefits expense 5713.59 62353.95 69669.81 1215.19 1049.46 Depreciation, amortisation, impairment and obsolescence 1316.91 34 1432.23 Finance costs 2671.00 2836.27 35 Sales, administration and other expenses 5147.38 36 2284 Current tax liabilities (net) Provisions 9 2244.35 2929.00 285.22 400.62 8 2500.04 49(e) Inventories Current assets Other non-current assets Deferred tax assets (net) 22061.03 25116.93 Financials assets 506.68 1762.86 Trade receivables 1905.80 992.34 1599.91 1134.12 1935.81 19921.95 Investments 6982.08 012345 Other financial assets Loans Other bank balances Cash and cash equivalents 11 4344.98 24454.24 3183.75 3441.78 438.54 19776.81 1777.54 Intangible assets under development Intangible assets Investment property Capital work-in-progress Property, plant and equipment Non-current assets Financial assets ASSETS: As at 31-3-2017 crore crore As at 31-3-2018 crore Note Balance Sheet as at March 31, 2018 241 crore 7 Investments Other financial assets 1684.13 22994.26 569 201.25 124.67 396.70 Loans 302.53 200.77 193.09 474.98 452.10 6272.46 22344 6523.22 2017-18 2317.92 Other current assets Financial liabilities 7222.85 470.68 3.86 5603.80 472.87 1.27 22 21 22 Borrowings 7134.28 88.57 19 Current liabilities Other non-current liabilities Provisions 86 20 5495.16 108.64 Other financial liabilities Current maturities of long term borrowings Other financials liabilities Other current liabilities 29202.66 38033.82 1440.25 1870.87 26 Trade payables 24338.32 2312.50 4129.57 936.27 31097.11 25 24 23 2222 1111.59 37551.21 Borrowings 49174.25 EQUITY AND LIABILITIES: Balance Sheet as at March 31, 2018 (contd.) 242 102238.44 388.00 115610.02 Equity 388.00 34663.47 33285.14 39130.82 16 625 TOTAL ASSETS Group(s) of assets classified as held for sale 42 46012.74 Equity share capital Total equity 186.59 45826.15 48893.98 18 280.27 17 crore Other equity As at 31-3-2017 crore As at 31-3-2018 crore Note LARSEN & TOUBRO Financial liabilities Non-current liabilities Liabilities crore 2016-17 Note crore (0.92) (41.67) (0.92) (41.67) 5389.80 65.78 45826.15 0.55 144.11 356.76 25373.60 11225.53 5387.30 2.50 177.25 5387.30 (10.85) (50.94) 8318.85 81 153.20 (141.20) (1701.51) (1701.51) (141.20) (45.37) 10.52 (45.37) (10.85) 5336.36 |ཙ| 21.66 ∞ (93.35) (0.13) (0.28) (0.28) 3.56 137.63 (47.00) 102.18 (21.66) (93.35) (0.13) 137.63 (6.36) 0.02 (102.18) (87.75) (0.05) Employee share options (net) during the year Transfer from/to general reserve/retained earnings Utilised for issue of bonus shares Share issue expenses Transfer to non-financial assets/liability Transfer under scheme of arrangement Issue of equity shares Other Comprehensive Income (d) Profit for the year (c) Balance as at 31-3-2017 Dividend distribution tax paid for the previous year Dividend paid for the previous year Employee share options (net) Total Comprehensive Income for the year (c+d) (19.61) (49.75) 157.11 Applications during the year Dividend distribution tax paid for the previous year 154.18 154.18 (0.05) (10.25) 157.35 (10.25) 5611.09 246 Mumbai, May 28, 2018 Membership No. 70928 Dividend paid for the previous year Partner by the hand of Firm's Registration No. 117366W/W-100018 Chartered Accountants For DELOITTE HASKINS & SELLS LLP In terms of our report attached Balance as at 31-3-2018 P. R. RAMESH during the year (47.00) 15.55 0.11 1.66 1215.19 (67.40) (19.71) 1049.46 (1065.10) Interest expense (3228.67) 6831.85 Exchange difference on items grouped under financing/investing activities Effect of exchange rate changes on cash and cash equivalents Depreciation, amortisation, impairment and obsolescence (net) Dividend received Adjustments for: Profit before tax (excluding exceptional items) 5863.87 A. Cash flow from operating activities: 1432.23 Interest income 61.77 69.77 Employee stock option-discount forming part of employee benefits expense 56.89 125.74 (Gain)/loss on derivatives at fair value through Profit or Loss 1316.91 72.44 (Profit)/loss on sale of investments (net) [including fair valuation] (23.70) (60.18) (Profit)/loss on sale of fixed assets (net) (539.31) (496.89) 2233.22 0.52 crore 2016-17 R. SHANKAR RAMAN 54.93 48893.98 102.16 (0.37) 458.94 25395.78 14250.01 108.59 Chief Financial Officer & Whole-time Director (6.36) 8363.02 3.56 153.20 (317.93) (1960.76) (1960.76) (317.93) 3.56 9.73 10.52 crore (DIN 00019798) VIKRAM SINGH MEHTA 2017-18 Statement of Cash Flows for the year ended March 31, 2018 LARSEN & TOUBRO SUNITA SHARMA (DIN 02949529) SANJEEV AGA (DIN 00022065) (DIN 00101004) M. M. CHITALE SUBODH BHARGAVA (DIN 00035672) Directors M. DAMODARAN Chief Executive Officer & Managing Director (DIN 02255382) S.N.SUBRAHMANYAN M. No. Á3471 (DIN 00041197) N. HARIHARAN Company Secretary (DIN 02106990) (Membership No. 70928) Transfer from/to general reserve/retained earnings Issue of equity shares 52 220 Diluted earnings per equity share (*) Basic earnings per equity share (*) 5611.09 157.35 38.46 (50.94) 5336.36 0.45 (1.20) (0.14) 3.47 0.59 Total Comprehensive Income for the year 2.27 Other Comprehensive Income for the year [net of tax] 39.00 38.37 Membership No. 70928 Partner P. R. RAMESH by the hand of Firm's Registration No. 117366W/W-100018 Chartered Accountants 52 For DELOITTE HASKINS & SELLS LLP 1 to 64 2.00 2.00 NOTES FORMING PART OF THE FINANCIAL STATEMENTS Face value per equity share (*) 38.86 In terms of our report attached Mumbai, May 28, 2018 Income tax on cost of hedging reserve 177.67 (9.17) 0.27 Debt instruments through Other Comprehensive Income Income tax on debt instruments through Other Comprehensive Income B. Items that will be reclassified to Profit and Loss (8.02) 2.50 (11.12) (12.27) 4.25 3.82 A. Items that will not be reclassified to Profit or Loss: Gain/(loss) on re-measurements of the defined benefits plan Income tax on re-measurements of the defined benefits plan Other Comprehensive Income crore 5453.74 crore crore 5387.30 (1.32) Cost of hedging reserve (1.08) (10.25) (42.12) (94.34) 22.40 Income tax on effective portion of gains and losses on hedging instruments in a cash flow hedge 272.01 (64.52) (10.85) Effective portion of gains and losses on hedging instruments in a cash flow hedge (0.92) 2.29 0.49 Income tax on exchange differences in translating the financial statements of foreign operations (1.41) Exchange differences in translating the financial statements of foreign operations (4.32) Share issue expenses N. HARIHARAN Company Secretary M. No. A3471 Chief Executive Officer & Managing Director (DIN 02255382) combination bonds premium account reserve business convertible instruments Total other share options (net) Debenture Employee Securities Capital Capital reserve on currency pending allotment money Foreign application of foreign redemption Retained through currency Hedging earnings translation reserve year (a+b) Total Comprehensive Income for the Other Comprehensive Income (b) Profit for the year (a) Balance as at 1-4-2016 76.03 41949.01 5453.74 General reserve 242.23 406.51 25216.49 7710.27 4.87 (35.83) 5453.74 (8.02) (4.32) 179.94 5445.72 (4.32) 179.94 10.52 153.20 other Comprehen- sive Income reserve reserve equity 8164.72 S.N.SUBRAHMANYAN Particulars Equity component crore 2017-18 Number of shares Particulars A. Equity share capital Statement of changes in Equity for the year ended March 31, 2018 245 2016-17 Number of shares SANJEEV AGA (DIN 00022065) M. M. CHITALE (DIN 00101004) Directors M. DAMODARAN (DIN 02106990) VIKRAM SINGH MEHTA (DIN 00041197) SUBODH BHARGAVA (DIN 00035672) R. SHANKAR RAMAN Chief Financial Officer & Whole-time Director (DIN 00019798) SUNITA SHARMA (DIN 02949529) Debt crore 93,29,65,803 Share Items of Other Comprehensive Income Reserves and surplus (crore) B. Other equity 186.59 Issued, subscribed and fully paid up equity shares outstanding at the beginning of the year Add: Shares issued on exercise of employee stock options during the year Add: Bonus shares allotted during the year 93,29,65,803 93,14,78,845 14,86,958 186.59 0.33 93.35 280.27 46,67,64,755 1,40,13,69,456 year Issued, subscribed and fully paid up equity shares outstanding at the end of the 16,38,898 186.30 0.29 MUMBAI, May 28, 2018 The asset is held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets; and Investments in debt instruments that are designated as fair value through profit or loss (FVTPL) - at fair value. Investments in debt instruments that meet the following conditions are subsequently measured at - at amortised cost (unless the same designated as fair value through profit or loss): (ii) Manufacturing work-in-progress at lower of weighted average cost including related overheads or net realisable value. In some cases, manufacturing work-in-progress are valued at lower of specifically identifiable cost or net realisable value. In the case of qualifying assets, cost also includes applicable borrowing costs vide policy relating to borrowing costs. (iii) Finished goods and stock-in-trade (in respect of goods acquired for trading) at lower of weighted average cost or net realisable value. Cost includes related overheads and excise duty paid/payable on such goods. (iv) Completed property/work-in-progress (including land) in respect of property development activity at lower of specifically identifiable cost or net realisable value. 257 Notes forming part of the Financial Statements (contd.) NOTE [1] Significant Accounting Policies (contd.) Assessment of net realisable value is made at each reporting period end and when the circumstances that previously caused inventories to be written-down below cost no longer exist or when there is clear evidence of an increase in net realisable value because of changed economic circumstances, the write-down, if any, in the past period is reversed to the extent of the original amount written-down so that the resultant carrying amount is the lower of the cost and the revised net realisable value. (o) Cash and bank balances Cash and bank balances also include fixed deposits, margin money deposits, earmarked balances with banks and other bank balances which have restrictions on repatriation. Short term and liquid investments being subject to more than insignificant risk of change in value, are not included as part of cash and cash equivalents. (p) Securities premium account (i) Securities premium includes: A. The difference between the face value of the equity shares and the consideration received in respect of shares issued. B. The fair value of the stock options which are treated as expense, if any, in respect of shares allotted pursuant to Stock Options Scheme. (ii) The issue expenses of securities which qualify as equity instruments are written off against securities premium account. (q) Borrowing Costs Borrowing costs include interest expense calculated using the effective interest method, finance charges in respect of assets acquired on finance lease and exchange differences arising on foreign currency borrowings to the extent they are regarded as an adjustment to interest costs. Borrowing costs net of any investment income from the temporary investment of related borrowings that are attributable to the acquisition, construction or production of a qualifying asset are capitalised/inventoried as part of cost of such asset till such time the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognised in Profit or Loss in the period in which they are incurred. (r) Share-based payment arrangements The stock options granted to employees pursuant to the Company's Stock Options Schemes, are measured at the fair value of the options at the grant date. The fair value of the options is treated as discount and accounted as employee compensation cost over the vesting period on a straight line basis. The amount recognised as expense in each year is arrived at based on the number of grants expected to vest. If a grant lapses after the vesting period, the cumulative discount recognised as expense in respect of such grant is transferred to the general reserve within equity. The fair value of the stock options granted to employees of the Company by the Company's subsidiaries is accounted as employee compensation cost over the vesting period and where such fair value is not recovered by the subsidiaries, the same is treated as dividend declared by them. (s) Foreign currencies (i) Raw materials, components, construction materials, stores, spares and loose tools at lower of weighted average cost or net realisable value. However, these items are considered to be realisable at cost if the finished products in which they will be used, are expected to be sold at or above cost. (i) Inventories are valued after providing for obsolescence, as under: Where cost of a part of the asset ("asset component") is significant to total cost of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part is determined separately and such asset component is depreciated over its separate useful life. (iii) The Company designates certain hedging instruments, such as derivatives, embedded derivatives and in respect of foreign currency risk, certain non-derivatives, as either fair value hedges, cash flow hedges or hedges of net investments in foreign operations. Hedges of foreign exchange risk on firm commitments are accounted as cash flow hedges. A. Fair value hedges: Changes in fair value of the designated portion of derivatives that qualify as fair value hedges are recognised in Profit or Loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. LARSEN & TOUBRO Notes forming part of the Financial Statements (contd.) NOTE [1] Significant Accounting Policies (contd.) B. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. The fair value adjustment to the carrying amount of the hedged item arising from the hedged risk is amortised to Profit or Loss from that date. Cash flow hedges: In case of transaction related hedges, the effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in Other Comprehensive Income and accumulated in equity as 'hedging reserve'. The gain or loss relating to the ineffective portion is recognised immediately in Profit or Loss. Amounts previously recognised in Other Comprehensive Income and accumulated in equity relating to the effective portion, are reclassified to Profit or Loss in the periods when the hedged item affects profit or loss, in the same head as the hedged item. The effective portion of the hedge is determined at the lower of the cumulative gain or loss on the hedging instrument from inception of the hedge and the cumulative change in the fair value of the hedged item from the inception of the hedge and the remaining gain or loss on the hedging instrument is treated as ineffective portion. In case of time period related hedges, the forward element and the spot element of a forward contract is separated and only the change in the value of the spot element of the forward contract is designated as the hedging instrument. Similarly, wherever applicable, the foreign currency basis spread is separated from the financial instrument and is excluded from the designation of that financial instrument as the hedging instrument in case of time period related hedges. The changes in the fair value of the forward element of the forward contract or the foreign currency basis spread of the financial instrument is accumulated in a separate component of equity as 'cost of hedging reserve'. The changes in the fair value of such forward element or foreign currency basis spread are reclassified to Profit or Loss as a reclassification adjustment on a straight line basis over the period of the forward contract or the financial instrument. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. Any gain or loss recognised in other comprehensive income and accumulated in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in Profit or Loss. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognised immediately in Profit or Loss. (iv) Compound financial instruments issued by the Company which can be converted into fixed number of equity shares at the option of the holders irrespective of changes in the fair value of the instrument are accounted by separately recognising the liability and the equity components. The liability component is initially recognised at the fair value of a comparable liability that does not have an equity conversion option. The equity component is initially recognised at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. The directly attributable transaction costs are allocated to the liability and the equity components in proportion to their initial carrying amounts. Subsequent to initial recognition, the liability component of the compound financial instrument is measured at amortised cost using the effective interest method. The equity component of a compound financial instrument is not remeasured subsequently. Notes forming part of the Financial Statements (contd.) LARSEN & TOUBRO 252 Intangible assets are recognised when it is probable that the future economic benefits that are attributable to the asset will flow to the enterprise and the cost of the asset can be measured reliably. Intangible assets are stated at original cost net of tax/duty credits availed, if any, less accumulated amortisation and cumulative impairment. Administrative and other general overhead expenses that are specifically attributable to acquisition of intangible assets are allocated and capitalised as a part of the cost of the intangible assets. (i) Intangible assets An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss arising on derecognition of property is recognised in the Statement of Profit and Loss in the same period. Depreciation is recognised using straight line method so as to write off the cost of the investment property less their residual values over their useful lives specified in Schedule II to the Companies Act, 2013 or in the case of assets where the useful life was determined by technical evaluation, over the useful life so determined. Depreciation method is reviewed at each financial year end to reflect the expected pattern of consumption of the future benefits embodied in the investment property. The estimated useful life and residual values are also reviewed at each financial year end and the effect of any change in the estimates of useful life/ residual value is accounted on prospective basis. Freehold land and properties under construction are not depreciated. Properties, including those under construction, held to earn rentals and/or capital appreciation are classified as investment property and are measured and reported at cost, including transaction costs. (h) Investment property Freehold land is not depreciated. Assets acquired under finance leases are depreciated on a straight line basis over the lease term. Where there is reasonable certainty that the Company shall obtain ownership of the assets at the end of the lease term, such assets are depreciated based on the useful life adopted by the Company for similar assets. Depreciation charge for impaired assets is adjusted in future periods in such a manner that the revised carrying amount of the asset is allocated over its remaining useful life. Depreciation on additions to/deductions from, owned assets is calculated pro rata to the period of use. Extra shift depreciation is provided on a location basis. (n) Inventories The functional currency and presentation currency of the company is Indian Rupee. (ii) Transactions in currencies other than the Company's functional currency are recorded on initial recognition using the exchange rate at the transaction date. At each Balance Sheet date, foreign currency monetary items are reported at the closing spot rate. Non-monetary items that are measured in terms of historical cost in foreign currency are not retranslated. Exchange differences that arise on settlement of monetary items or on reporting of monetary items at each Balance Sheet date at the closing spot rate are recognised in the Statement of Profit and Loss in the period in which they arise except for: exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings; and A. the costs incurred or to be incurred in respect of the transaction can be measured reliably. 4. the stage of completion of the transaction at the end of the reporting period can be measured reliably; and 3. it is probable that the economic benefits associated with the transaction will flow to the Company; 2. 1. the amount of revenue can be measured reliably; Revenue from rendering services is recognised when the outcome of a transaction can be estimated reliably by reference to the stage of completion of the transaction. The outcome of a transaction can be estimated reliably when all the following conditions are satisfied: Rendering of services E. Expected loss, if any, on the project is recognised as an expense in the period in which it is foreseen, irrespective of the stage of completion of the contract. The costs incurred on property development activities are carried as "Inventories" till such time the outcome of the project cannot be estimated reliably and all the aforesaid conditions are fulfilled. When the outcome of the project can be ascertained reliably and all the aforesaid conditions are fulfilled, revenue from property development activity is recognised at cost incurred plus proportionate margin, using percentage of completion method. Percentage of completion is determined based on the proportion of actual cost incurred to-date, to the total estimated cost of the project. For the purpose of computing percentage of construction, cost of land, developmental rights and borrowing costs are excluded. Significant Accounting Policies (contd.) NOTE [1] Notes forming part of the Financial Statements (contd.) LARSEN & TOUBRO realised at the reporting date in respect of each of the contracts and the parties to such contracts can be reasonably expected to comply with the contractual payment terms. at least 10% of the total revenue as per the agreements of sale or any other legally enforceable documents is at least 25% of the saleable project area is secured by contracts or agreements with buyers; and contract costs for work performed (excluding cost of land/developmental rights and borrowing cost) constitute at least 25% of the estimated total contract costs representing a reasonable level of development; 4. 3. 2. F. G. H. I. B. exchange differences on transactions entered into in order to hedge certain foreign currency risks. 258 Depreciation is recognised using straight line method so as to write off the cost of the assets (other than freehold land and properties under construction) less their residual values over their useful lives specified in Schedule II to the Companies Act, 2013, or in the case of assets where the useful life was determined by technical evaluation, over the useful life so determined. Depreciation method is reviewed at each financial year end to reflect the expected pattern of consumption of the future economic benefits embodied in the asset. The estimated useful life and residual values are also reviewed at each financial year end and the effect of any change in the estimates of useful life/residual value is accounted on prospective basis. PPE not ready for the intended use on the date of the Balance Sheet are disclosed as "capital work-in-progress". (Also refer to policy on leases, borrowing costs, impairment of assets and foreign currency transactions infra). Own manufactured PPE is capitalised at cost including an appropriate share of overheads. Administrative and other general overhead expenses that are specifically attributable to construction or acquisition of PPE or bringing the PPE to working condition are allocated and capitalised as a part of the cost of the PPE. PPE is recognised when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. PPE is stated at original cost net of tax/duty credits availed, if any, less accumulated depreciation and cumulative impairment, if any. PPE acquired on hire purchase basis are recognised at their cash values. Cost includes professional fees related to the acquisition of PPE and for qualifying assets, borrowing costs capitalised in accordance with the Company's accounting policy. (g) Property, plant and equipment (PPE) Significant Accounting Policies (contd.) NOTE [1] Notes forming part of the Financial Statements (contd.) 251 B. A financial liability is derecognised when the related obligation expires or is discharged or cancelled. An item of income or expense which by its size, type or incidence requires disclosure in order to improve an understanding of the performance of the Company is treated as an exceptional item and disclosed as such in the financial statements. C. Other items of income are accounted as and when the right to receive such income arises and it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Dividend income is accounted in the period in which the right to receive the same is established. B. A. Interest income on investments and loans is accrued on a time basis by reference to the principal outstanding and the effective interest rate including interest on investments classified as fair value through profit or loss or fair value through other comprehensive income. Interest receivable on customer dues is recognised as income in the Statement of Profit and Loss on accrual basis provided there is no uncertainty towards its realisation. (ii) Other income Other operational revenue represents income earned from the activities incidental to the business and is recognised when the right to receive the income is established as per the terms of the contract. Government grants, which are revenue in nature and are towards compensation for the qualifying costs incurred by the company, are recognised as other operational income in the Statement of Profit and Loss in the period in which such costs are incurred. Government grant receivable in the form duty credit scrips is recognised as other operational income in the Statement of Profit and Loss in the period in which the application is made to the government authorities and to the extent there is no uncertainty towards its receipt. Commission income is recognised as and when the terms of the contract are fulfilled. Revenue from contracts for rendering of engineering design services and other services which are directly related to the construction of an asset is recognised on the same basis as stated in (B) supra. Unbilled revenue represents value of services performed in accordance with the contract terms but not billed. Stage of completion is determined by the proportion of actual costs incurred to-date, to the estimated total costs of the transaction. (f) Exceptional items Financial liabilities, including derivatives and embedded derivatives, which are designated for measurement at FVTPL are subsequently measured at fair value. Financial guarantee contracts are subsequently measured at the amount of impairment loss allowance or the amount recognised at inception net of cumulative amortisation, whichever is higher. All other financial liabilities including loans and borrowings are measured at amortised cost using Effective Interest Rate (EIR) method. A. (ii) Financial liabilities: (ii) Post-employment benefits: A. B. Defined contribution plans: The Company's superannuation scheme, state governed provident fund scheme, employee state insurance scheme and employee pension scheme are defined contribution plans. The contribution paid/payable under the schemes is recognised during the period in which the employee renders the related service. Defined benefit plans: The employees' gratuity fund schemes and employee provident fund schemes managed by board of trustees established by the Company, the post-retirement medical care plan and the Company pension plan represent defined benefit plans. The present value of the obligation under defined benefit plans is determined based on actuarial valuation using the Projected Unit Credit Method. The obligation is measured at the present value of the estimated future cash flows using a discount rate based on the market yield on government securities of a maturity period equivalent to the weighted average maturity profile of the defined benefit obligations at the Balance Sheet date. Re-measurement, comprising actuarial gains and losses, the return on plan assets (excluding amounts included in net interest on the net defined benefit liability or asset) and any change in the effect of asset ceiling (if applicable) is recognised in other comprehensive income and is reflected in retained earnings and the same is not eligible to be reclassified to profit or loss. Defined benefit costs comprising current service cost, past service cost and gains or losses on settlements are recognised in the Statement of Profit and Loss as employee benefits expense. Interest cost implicit in defined benefit employee cost is recognised in the Statement of Profit and Loss under finance cost. Gains or losses on settlement of any defined benefit plan are recognised when the settlement occurs. Past service cost is recognised as expense at the earlier of the plan amendment or curtailment and when the company recognises related restructuring costs or termination benefits. In case of funded plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans to recognise the obligation on a net basis. (iii) Long term employee benefits: The obligation recognised in respect of long term benefits such as compensated absences, long service award etc. is measured at present value of estimated future cash flows expected to be made by the Company and is recognised in a similar manner as in the case of defined benefit plans vide (ii)(B) supra. Long term employee benefit costs comprising current service cost and gains or losses on curtailments and settlements, re-measurements including actuarial gains and losses are recognised in the Statement of Profit and Loss as employee benefit expenses. Interest cost implicit in long term employee benefit cost is recognised in the Statement of Profit and Loss under finance cost. (iv) Termination benefits: Termination benefits such as compensation under employee separation schemes are recognised as expense when the Company's offer of the termination benefit is accepted or when the Company recognises the related restructuring costs whichever is earlier. (I) Leases 254 The determination of whether an agreement is, or contains, a lease is based on the substance of the agreement at the date of inception. Finance leases: A. Leases where the Company has substantially transferred all the risks and rewards of ownership of the related assets to the lessee are classified as finance leases. Assets taken under finance lease are capitalised at the commencement of the lease at the lower of the fair value or the present value of minimum lease payments and a liability is created for LARSEN & TOUBRO Notes forming part of the Financial Statements (contd.) NOTE [1] Employee benefits such as salaries, wages, short term compensated absences, expected cost of bonus, ex-gratia and performance-linked rewards falling due wholly within twelve months of rendering the service are classified as short term employee benefits and are expensed in the period in which the employee renders the related service. (i) Short term employee benefits: (k) Employee Benefits Significant Accounting Policies (contd.) A. the technical feasibility of completing the intangible asset so that it will be available for use or sale; B. the company has intention to complete the intangible asset and use or sell it; C. the company has ability to use or sell the intangible asset; D. E. F. the manner in which the probable future economic benefits will be generated including the existence of a market for output of the intangible asset or intangible asset itself or if it is to be used internally, the usefulness of intangible assets; the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and the company has ability to reliably measure the expenditure attributable to the intangible asset during its development. Development expenditure that does not meet the above criteria is expensed in the period in which it is incurred. Intangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as "intangible assets under development". Significant Accounting Policies (contd.) Intangible assets are amortised on straight line basis over the estimated useful life. The method of amortisation and useful life are reviewed at the end of each accounting year with the effect of any changes in the estimate being accounted for on a prospective basis. (j) Impairment of assets As at the end of each accounting year, the Company reviews the carrying amounts of its PPE, investment property, intangible assets and investments in subsidiary, associate and joint venture companies to determine whether there is any indication that those assets have suffered an impairment loss. If such indication exists, PPE, investment property and intangible assets are tested for impairment so as to determine the impairment loss, if any. Intangible assets with indefinite life are tested for impairment each year. Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is determined: (i) in the case of an individual asset, at the higher of the net selling price and the value in use; and (ii) in the case of a cash generating unit (the smallest identifiable group of assets that generates independent cash flows), at the higher of the cash generating unit's net selling price and the value in use. (The amount of value in use is determined as the present value of estimated future cash flows from the continuing use of an asset and from its disposal at the end of its useful life. For this purpose, the discount rate (pre-tax) is determined based on the weighted average cost of capital of the company suitably adjusted for risks specified to the estimated cash flows of the asset). If recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, such deficit is recognised immediately in the Statement of Profit and Loss as impairment loss and the carrying amount of the asset (or cash generating unit) is reduced to its recoverable amount. When an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss is recognised for the asset (or cash generating unit) in prior years. A reversal of an impairment loss is recognised immediately in the Statement of Profit and Loss. 253 Notes forming part of the Financial Statements (contd.) NOTE [1] Amortisation on impaired assets is provided by adjusting the amortisation charge in the remaining periods so as to allocate the asset's revised carrying amount over its remaining useful life. all critical approvals necessary for commencement of the project have been obtained; B. Assets given under a finance lease are recognised as a receivable at an amount equal to the net investment in the lease. Lease income is recognised over the period of the lease so as to yield a constant rate of return on the net investment in the lease. 255 Notes forming part of the Financial Statements (contd.) NOTE [1] Significant Accounting Policies (contd.) B. 4. 5. 6. 7. Debt instruments at FVTPL is a residual category for debt instruments, if any, and all changes are recognised in profit or loss. Investment in equity instruments issued by subsidiary, associate and joint venture companies are measured at cost less impairment. Investment in preference shares of the subsidiary companies are treated as equity instruments if the same are convertible into equity shares or are redeemable out of the proceeds of equity instruments issued for the purpose of redemption of such investments. Investment in preference shares not meeting the aforesaid conditions are classified as debt instruments at FVTPL. Investments in equity instruments are classified as at FVTPL, unless the related instruments are not held for trading and the Company irrevocably elects on initial recognition to present subsequent changes in fair value in Other Comprehensive Income. For financial assets that are measured at FVTOCI, income by way of interest and dividend, provision for impairment and exchange difference, if any, (on debt instrument) are recognised in profit or loss and changes in fair value (other than on account of above income or expense) are recognised in other comprehensive income and accumulated in other equity. On disposal of debt instruments at FVTOCI, the cumulative gain or loss previously accumulated in other equity is reclassified to profit or loss. In case of equity instruments at FVTOCI, such cumulative gain or loss is not reclassified to profit or loss on disposal of investments. 256 C. A financial asset is primarily derecognised when: 1. the right to receive cash flows from the asset has expired, or D. 2. the company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a pass-through arrangement; and (a) the company has transferred substantially all the risks and rewards of the asset, or (b) the company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. On derecognition of a financial asset in its entirety, the difference between the carrying amount measured at the date of derecognition and the consideration received is recognised in Profit or Loss. Impairment of financial assets: The company recognises impairment loss on trade receivables using expected credit loss model, which involves use of a provision matrix constructed on the basis of historical credit loss experience as permitted under Ind AS 109. Impairment loss on investments is recognised when the carrying amount exceeds its recoverable amount. The contractual terms of instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. NOTE [1] • • (ii) Operating leases: Research and development expenditure on new products: The leases which are not classified as finance lease are operating leases. A. Lease rentals on assets under operating lease are charged to the Statement of Profit and Loss on a straight line basis over the term of the relevant lease. B. Assets leased out under operating leases are continued to be shown under the respective class of assets. Rental income is recognised on a straight line basis over the term of the relevant lease. (Also refer to policy on depreciation, supra) (m) Financial instruments Financial assets and/or financial liabilities are recognised when the company becomes party to a contract embodying the related financial instruments. All financial assets, financial liabilities and financial guarantee contracts are initially measured at transaction values and where such values are different from the fair value, at fair value. Transaction costs that are attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from as the case may be, the fair value of such financial assets or liabilities, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in Profit or Loss. In case of funding to subsidiary companies in the form of interest free or concession loans and preference shares, the excess of the actual amount of the funding over initially measured fair value is accounted as an equity investment. an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the outstanding liability for each period. A financial asset and a financial liability is offset and presented on net basis in the balance sheet when there is a current legally enforceable right to set-off the recognised amounts and it is intended to either settle on net basis or to realise the asset and settle the liability simultaneously. A. All recognised financial assets are subsequently measured in their entirety either at amortised cost or at fair value depending on the classification of the financial assets as follows: 1. 2. 3. Significant Accounting Policies (contd.) • • The asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and The contractual terms of instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Investment in debt instruments that meet the following conditions are subsequently measured at fair value through other comprehensive income [FVTOCI] (unless the same are designated as fair value through profit or loss) (i) Financial assets: (ii) Development expenditure on new products is capitalised as intangible asset, if all of the following can be demonstrated: 1. Revenue from property development activity which are in substance similar to delivery of goods is recognised when all significant risks and rewards of ownership in the land and/or building are transferred to the customer and a reasonable expectation of collection of the sale consideration from the customer exists. Sale of goods A. Revenue for the periods upto June 30, 2017 includes excise duty collected from customers. Revenue from July 1, 2017 onwards is exclusive of goods and service tax (GST) which subsumed excise duty. Revenue also includes adjustments made towards liquidated damages and other variation wherever applicable. Escalation and other claims, which are not ascertainable/acknowledged by customers are not taken into account. (i) Revenue from operations Revenue is recognised based on nature of activity when consideration can be reasonably measured and recovered with reasonable certainty. Revenue is measured at the fair value of the consideration received or receivable and is reduced for estimated customer returns, rebates and other similar allowances. (e) Revenue recognition Operating cycle for the business activities of the company covers the duration of the specific project/contract/product line/service including the defect liability period wherever applicable and extends up to the realisation of receivables (including retention monies) within the agreed credit period normally applicable to the respective lines of business. (d) Operating cycle for current and non-current classification Amounts in the financial statements are presented in Indian Rupees in crore [1 crore = 10 million] rounded off to two decimal places as permitted by Schedule III to the Companies Act, 2013. Per share data are presented in Indian Rupees to two decimals places. The Balance Sheet and the Statement of Profit and Loss are prepared and presented in the format prescribed in the Schedule III to the Companies Act, 2013 ("the Act"). The Statement of Cash Flows has been prepared and presented as per the requirements of Ind AS 7 "Statement of Cash Flows". The disclosure requirements with respect to items in the Balance Sheet and Statement of Profit and Loss, as prescribed in the Schedule III to the Act, are presented by way of notes forming part of the financial statements along with the other notes required to be disclosed under the notified Accounting Standards and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended. (c) Presentation of financial statements Above levels of fair value hierarchy are applied consistently and generally, there are no transfers between the levels of the fair value hierarchy unless the circumstances change warranting such transfer. Level 3 inputs are unobservable inputs for the valuation of assets or liabilities. Level 2 inputs are inputs, other than quoted prices included in level 1, that are observable for the asset or liability, either directly or indirectly; and Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the company can access at measurement date; • • Fair value measurements are categorised as below based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety: The Company maintains its accounts on accrual basis following historical cost convention, except for certain financial instruments that are measured at fair value in accordance with Ind AS. (b) Basis of accounting The Company's financial statements have been prepared in accordance with the provisions of the Companies Act, 2013 and the Indian Accounting Standards ("Ind AS") notified under the Companies (Indian Accounting Standards) Rules, 2015 and amendments thereof issued by Ministry of Corporate Affairs in exercise of the powers conferred by section 133 of the Companies Act, 2013. In addition, the guidance notes/announcements issued by the Institute of Chartered Accountants of India (ICAI) are also applied except where compliance with other statutory promulgations require a different treatment. These financials statements have been approved for issue by the Board of Directors at their meeting held on May 28, 2018. (a) Statement of compliance Significant Accounting Policies NOTE [1] Notes forming part of the Financial Statements LARSEN & TOUBRO Revenue from property development activity in the nature of a construction contract is recognised based on the 'percentage of completion method' (POC) when the outcome of the contract can be estimated reliably upon fulfilment of all the following conditions: Revenue from sale of manufactured and traded goods is recognised when the goods are delivered and titles have been passed, provided all the following conditions are satisfied: 1. (i) Expenditure on research is expensed under respective heads of account in the period in which it is incurred. 249 significant risks and rewards of ownership of the goods are transferred to the buyer; For contracts where the aggregate of contract cost incurred to date plus recognised profits (or minus recognised losses as the case may be) exceeds the progress billing, the surplus is shown as due from customers. For contracts where progress billing exceeds the aggregate of contract costs incurred to-date plus recognised profits (or minus recognised losses, as the case may be), the surplus is shown as the amount due to customers. Amounts received before the related work is performed are disclosed in the Balance Sheet as a liability towards advance received. Amounts billed for work performed but yet to be paid by the customer are disclosed in the Balance Sheet as trade receivables. The amount of retention money held by the customers is disclosed as part of other current assets and is reclassified as trade receivables when it becomes due for payment. Expected loss, if any, on a contract is recognised as expense in the period in which it is foreseen, irrespective of the stage of completion of the contract. iv. the costs incurred or to be incurred in respect of the contract can be measured reliably. the stage of completion of the contract at the end of the reporting period can be measured reliably; and it is probable that the economic benefits associated with the contract will flow to the Company; iii. ii. i. The estimated outcome of a contract is considered reliable when all the following conditions are satisfied: Fixed price contracts: Contract revenue is recognised only to the extent of cost incurred till such time the outcome of the job cannot be ascertained reliably subject to the condition that it is probable such cost will be recoverable. When the outcome of the contract is ascertained reliably, contract revenue is recognised at cost of work performed on the contract plus proportionate margin, using the percentage of completion method. Percentage of completion is the proportion of cost of work performed to-date, to the total estimated contract costs. 2. 1. Cost plus contracts: Revenue from cost plus contracts is determined with reference to the recoverable costs incurred during the period plus the margin as agreed with the customer. D. the amount of revenue can be measured reliably; 250 Notes forming part of the Financial Statements (contd.) C. Significant Accounting Policies (contd.) 2. the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the good sold; 3. the amount of revenue can be measured reliably; NOTE [1] it is probable that the economic benefits associated with the transaction will flow to the company; and B. 5. the costs incurred or to be incurred in respect of the transaction can be measured reliably. Revenue from construction/project related activity and contracts for supply/commissioning of complex plant and equipment is recognised as follows: 4. 1. crore Particulars Sr. No. 2016-17 2017-18 Class of assets i. Amount recognised in the Statement of Profit and Loss for investment property: 3 (in years) Maximum useful life Minimum useful life (in years) Disclosure pursuant to Ind AS 40 "Investment Property" Rental income derived from investment property 60 171.63 crore 2. Class of assets Book value Amortisation Cost Buildings Other Intangible assets & intangible assets under development NOTE [4] 149.01 Notes forming part of the Financial Statements (contd.) The fair values of investment properties have been determined with the help of independent valuer on a case to case basis. Fair value of properties that are evaluated by independent valuer is 2487.24 crore (3012.75 crore as at March 31, 2017). Valuation is based on government rates, market research, market trend and comparable values as considered appropriate. iii. Fair value of investment property: 2487.24 crore as at March 31, 2018 (3412.55 crore as at March 31, 2017) ii. 21.12 64.32 Direct operating expenses arising from investment property that generated rental income 265 C. Total Sr. No. 464.04 396.70 474.98 48.18 1.23 0.39 13.96 4.40 35.06 3.18 37.00 57.58 431.76 356.65 424.57 48.18 523.16 36.68 431.76 17.14 19.03 Depreciation is provided based on useful life supported by the technical evaluation considering business specific usage, the consumption pattern of the assets and the past performance of similar assets: 5.80 2016-17 2017-18 5.80 crore Class of assets b. Buildings (owned) Total Additions during the year include 5.80 crore (previous year: Nil) being borrowing cost capitalised in accordance with Indian Accounting Standard (Ind AS) 23 on "Borrowing Costs". Asset class wise break-up of borrowing costs capitalised is as follows: a. Previous year As at 1-4-2017 Buildings Land 35.06 396.70 446.90 1.53 0.42 1. Business 1.38 Additions 200.77 Add: Intangible assets under development 2.55 215.00 41.88 175.67 339.67 5.51 201.25 0.01 313.87 Previous year 124.67 193.09 263.01 0.68 215.00 47.33 31.30 456.10 393.86 $0.70 crore Refer to note 61 Specialised softwares - external Total Acquired Internal development - external development 325.92 Total FY 2017-18 Acquired Internal Class of assets crore Additions during the year a. # Refer to note [46(B)] FY 2016-17 Foreing 1.38 339.67 0.68 13.08 146.47 195.64 11.42 182.84 Specialised softwares 160.23 As at Up to 31-3-2018 31-3-2018 31-3-2017 Deductions For the Business period Transfer $ Up to As at 31-3-2018 31-3-2017 currency Deductions fluctuation Transfer $ As at 115.05 35.41 Technical know-how Total # development 64.70 88.27 73.13 48.17 24.96 161.40 36.37 48.53 23.60 69.41 29.65 9.29 20.36 99.06 43.96 55.10 112.87 New product design and 3,11,27,00,000 3112.70 (A) Investment in equity instruments (a) Subsidiary companies (b) Associate companies (c) Joint venture companies (d) Other companies (B) Investment in preference shares (Debt portion) of: Subsidiary companies Joint venture companies Details of Investments - non-current Particulars (A) Investments in fully paid equity instruments (a) Subsidiary companies: (i) Investments in fully paid equity instruments: As at 31-3-2018 * crore LARSEN & TOUBRO As at 31-3-2017 1085.08 22994.26 867.35 217.73 19171.71 21909.18 56.04 136.64 Particulars 4.42 2730.25 4.42 16381.00 18776.86 crore crore crore 2991.26 Financial Assets: Investments - non-current NOTE [5] Notes forming part of the Financial Statements (contd.) 266 Depreciation is provided based on useful life supported by the technical evaluation considering business specific usage, the consumption pattern of the assets and the past performance of similar assets: b. 31.31 27.51 3.80 Sr. No. 115.05 48.64 Total 3112.70 10 51,157 0.05 66.41 605.10 Class of assets Specialised softwares 5 3 13 3 6 3 1. (in years) Maximum useful life Minimum useful life New product design and development 3. Technical know-how 2. (in years) 605.10 19776.81 Number of units Face value 12,00,00,000 10 L&T Construction Equipment Limited 1468.18 3468.17 1,27,75,20,203 82.82 10 0.04 50,000 10 ₹ L&T Cassidian Limited [Net of provision 0.05 crore (previous year: Nil)] 0.05 L&T Finance Holdings Limited (quoted) 0.05 84.32 L&T Power Development Limited 10 2062.19 2206.98 2,20,69,77,333 10 0.68 crore (previous year: * Nil)] L&T Metro Rail (Hyderabad) Limited Larsen & Toubro Infotech Limited (quoted) L&T Hydrocarbon Engineering Limited L&T Electricals and Automation Limited L&T Shipbuilding Limited L&T Seawoods Limited L&T Realty Limited L&T Power Limited L&T Technology Services Limited (quoted) 0.05 50,000 L&T Capital Company Limited 161.23 0.05 0.05 49,950 Bhilai Power Supply Company Limited 161.23 18,00,000 EWAC Alloys Limited 100 crore crore As at 31-3-2017 As at 31-3-2018 As at 31-3-2018 per unit L&T Valves Limited 10 100 Hi-Tech Rock Products & Aggregates Limited 45.60 45.60 4,56,00,000 10 L&T Aviation Services Private Limited 0.01 150.24 0.01 10 Kesun Iron and Steel Company Private Limited 0.05 0.05 50,000 10 9,500 10 4,71,60,700 47.16 L&T Shipbuilding Limited -12% Cumulative, non-convertible redeemable at par preference shares, June 24, 2029 10 5,00,00,000 37.06 37.06 L&T Shipbuilding Limited -12% Cumulative, non-convertible redeemable at par preference shares, April 16, 2030 67.77 10 77.26 77.26 L&T Shipbuilding Limited -9% Non-cumulative, non-convertible redeemable at par preference shares, May 28, 2030. 10 42,18,60,000 300.25 11,00,00,000 300.25 67.78 10 53.16 Seawoods Realty Private Limited [Net of provision 0.01 crore (previous year: Nil)] 10 10,000 0.01 Seawoods Retail Private Limited [Net of provision 0.01 crore (previous year: Nil)] 9,00,00,000 10 ☐ 0.01 13728.39 11748.91 (ii) Preference shares-(equity portion): L&T Shipbuilding Limited -12% Cumulative, non-convertible redeemable at par preference shares, October 22, 2028. 10,000 53.16 L&T Shipbuilding Limited -9% Non-cumulative, non-convertible redeemable at par preference shares, August 10, 2030. 25,00,00,000 3.80 48.53 48.53 New product design and development 20.93 20.93 3.80 55.10 Technical know-how 6.58 6.58 11.42 11.31 1.23 55.10 10 153.15 21,60,00,000 177.98 177.98 L&T Shipbuilding Limited -9% Non-cumulative, non-convertible redeemable at par preference shares, September 29, 2030. 10 7,50,00,000 53.24 153.15 53.24 10 25,90,00,000 181.97 181.97 L&T Shipbuilding Limited -9% Non-cumulative, non-convertible redeemable at par preference shares, February 4, 2031. 10 L&T Shipbuilding Limited -9% Non-cumulative, non-convertible redeemable at par preference shares, December 8, 2030. 0.11 80,000 L&T Global Holdings Limited 937.78 942.62 1 14,26,93,637 118.80 119.68 9,08,22,100 Larsen & Toubro Hydrocarbon International Limited LLC [Net of provision 450 0.68 Carried forward 13652.09 11665.49 267 SAR 1000 Notes forming part of the Financial Statements (contd.) 2 1000.05 47.16 10 1,99,95,50,000 1999.55 1999.55 10 1000.05 43,06,80,000 430.68 10 10 74,38,796 1,00,00,50,000 40.36 40.36 430.68 USD 100 NOTE [5] Particulars 0.23 0.23 SAR 1000 625 1.06 1.06 50,000 10 10 36,00,000 21.85 21.85 1000 0.30 6.80 Details of Investments - non-current (contd.) USD 1 L&T Infrastructure Engineering Limited Number of units Face value per unit As at 31-3-2018 As at 31-3-2018 As at 31-3-2017 L&T Cutting Tools Limited crore (i) Investments in fully paid equity instruments: (contd.) Brought forward 13652.09 11665.49 Larsen & Toubro LLC Larsen & Toubro (Saudi Arabia) LLC Spectrum Infotech Private Limited (refer to note 60) crore 0.39 0.87 0.94 35.06 0.22 0.80 48.30 2156.38 15.50 15.01 3386.94 3691.17 Leased out 2.11 -----2.11 0.95 0.28 1.23 0.88 1.16 Taken on lease 1.85 99.11 5558.33 1502.92 700.74 0.99 0.12 L&T Shipbuilding Limited - 9% Non-cumulative, non-convertible redeemable at Sub total- Plant 5212.69 444.27 1.73 1.85 99.11 5561.43 1503.92 701.09 0.22 0.80 48.30 2157.73 15.50 15.01 3388.69 3693.27 & equipment 0.99 0.05 0.07 Computers 5209.59 444.27 1.73 equipment 2181.33 42.09 32.10 0.32 Leased out 13.02 Sub total 2194.35 42.09 32.10 0.32 5.73 2185.91 13.02 5.73 2198.93 188.44 112.79 187.24 112.19 1.20 0.60 Owned 0.45 0.10 87.25 87.25 1800.42 1906.84 1.80 11.22 11.82 0.45 0.10 10 0.84 300.04 87.25 87.25 1811.64 1918.66 - Buildings Plant & 0.84 298.24 Office 294.83 54.82 0.34 125.74 30.28 0.06 56.17 32.75 I 0.04 7.16 81.80 I 125.51 126.23 Other assets Ships 37.25 Aircraft Sub total - Other 14.20 207.31 195.22 37.25 195.22 6.15 232.47 9.67 10.89 14.41 6.15 20.56 22.84 27.58 189.07 211.91 27.58 assets Total # 8637.80 852.49 2.17 56.36 Previous year 37.25 9.67 4.74 195.22 0.14 I 182.40 38.97 0.02 12.23 337.78 0.04 1.77 154.35 141.17 70.73 0.15 0.01 9.42 202.64 135.14 153.66 62.96 31.70 0.04 0.02 1.66 93.06 0.01 0.01 61.28 62.77 equipment Furniture and 142.23 14.04 0.04 0.02 2.16 154.17 46.76 23.80 0.01 0.01 1.63 68.95 0.24 0.24 84.98 95.23 fixtures Vehicles Owned Buildings 453.31 445.82 3.51 Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961 and based on the expected outcome of assessments/appeals. Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the Company's financial statements and the corresponding tax bases used in computation of taxable profit and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date. 259 Notes forming part of the Financial Statements (contd.) NOTE [1] Significant Accounting Policies (contd.) Deferred tax liabilities are generally recognised for all taxable temporary differences including the temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets are generally recognised for all taxable temporary differences to the extent that is probable that taxable profits will be available against which those deductible temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets relating to unabsorbed depreciation/business losses/losses under the head "capital gains" are recognised and carried forward to the extent of available taxable temporary differences or where there is convincing other evidence that sufficient future taxable income will be available against which such deferred tax assets can be realised. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of reporting period, to recover or settle the carrying amount of its assets and liabilities. Transaction or event which is recognised outside Profit or Loss, either in Other Comprehensive Income or in equity, is recorded along with the tax as applicable. (v) Interests in joint operations The Company as a joint operator recognises in relation to its interest in a joint operation, its share in the assets/liabilities held/ incurred jointly with the other parties of the joint arrangement. Revenue is recognised for its share of revenue from the sale of output by the joint operation. Expenses are recognised for its share of expenses incurred jointly with other parties as part of the joint arrangement. (u) Taxes on income Interests in joint operations are included in the segments to which they relate. Provisions are recognised only when: (i) the Company has a present obligation (legal or constructive) as a result of a past event; (ii) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and (iii) a reliable estimate can be made of the amount of the obligation. Provision is measured using the cash flows estimated to settle the present obligation and when the effect of time value of money is material, the carrying amount of the provision is the present value of those cash flows. Reimbursement expected in respect of expenditure required to settle a provision is recognised only when it is virtually certain that the reimbursement will be received. Contingent liability is disclosed in case of: (i) (ii) a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation; and a present obligation arising from past events, when no reliable estimate is possible. Contingent assets are disclosed where an inflow of economic benefits is probable. Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date. Where the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under such contract, the present obligation under the contract is recognised and measured as a provision. (w) Provisions, contingent liabilities and contingent assets Segment revenue resulting from transactions with other business segments is accounted on the basis of transfer price which are either determined to yield a desired margin or agreed on a negotiated basis. x) ix) Segment non-cash expenses forming part of segment expenses includes the fair value of the employee stock options which is accounted as employee compensation cost [Note 1(r) supra] and is allocated to the segment. LARSEN & TOUBRO Notes forming part of the Financial Statements (contd.) NOTE [1] Significant Accounting Policies (contd.) (iii) Financial statements of foreign operations whose functional currency is different than Indian Rupees are translated into Indian Rupees as follows: A. assets and liabilities for each Balance Sheet presented are translated at the closing rate at the date of that Balance Sheet; income and expenses for each income statement are translated at average exchange rates; and B. C. all resulting exchange differences are recognised in Other Comprehensive Income and accumulated in equity as 'foreign currency translation reserve' for subsequent reclassification to Profit or Loss on disposal of such foreign operations. (t) Accounting and reporting of information for Operating Segments Operating segments are those components of the business whose operating results are regularly reviewed by the chief operating decision making body in the Company to make decisions for performance assessment and resource allocation. The reporting of segment information is the same as provided to the management for the purpose of the performance assessment and resource allocation to the segments. Segment accounting policies are in line with the accounting policies of the Company. In addition, the following specific accounting policies have been followed for segment reporting: Segment revenue includes sales and other operational revenue directly identifiable with/allocable to the segment including inter segment revenue. i) ii) Expenses that are directly identifiable with/allocable to segments are considered for determining the segment result. iii) Most of the centrally incurred costs are allocated to segments mainly on the basis of their respective expected segment revenue estimated at the beginning of the reported period. iv) Income which relates to the Company as a whole and not allocable to segments is included in "unallocable corporate income/ (expenditure)(net)". v) Segment result includes margins on inter-segment capital jobs, which are reduced in arriving at the profit before tax of the Company. vi) Segment result includes the interest expense incurred on interest bearing advances with corresponding credit included in "unallocable corporate income/(expenditure)(net). vii) Segment results have not been adjusted for the exceptional item attributable to the corresponding segment. The said exceptional item has been included in "unallocable corporate income/(expenditure)(net)". The corresponding segment assets have been carried under the respective segments without adjusting the exceptional item. viii) Segment assets and liabilities include those directly identifiable with the respective segments. Unallocable corporate assets and liabilities represent the assets and liabilities that relate to the Company as a whole. (x) Commitments 8147.89 614.57 Commitments are future liabilities for contractual expenditure, classified and disclosed as follows: (ii) uncalled liability on shares and other investments partly paid; Business Transfer$ Trf to investment property fluctuation Foreign currency Deductions As at Up to For the Business 31-3-2018 31-3-2017 period* Transfer$ Depreciation Trf to Foreign investment currency Deductions property fluctuation Impairment Book value crore Up to Up to Up to 31-3-2018 31-3-2017 31-3-2018 As at As at 31-3-2018 31-3-2017 Land Additions Freehold Leasehold 24.26 0.03 370.85 370.85 362.34 85.97 Sub total -Land 448.31 32.80 24.26 85.97 2.49 1.02 0.03 456.82 2.49 1.02 3.51 82.46 83.48 362.34 32.80 As at 1-4-2017 Class of assets Cost (iii) funding related commitment to subsidiary, associate and joint venture companies; and 260 LARSEN & TOUBRO Notes forming part of the Financial Statements (contd.) NOTE [1] Significant Accounting Policies (contd.) (iv) other non-cancellable commitments, if any, to the extent they are considered material and relevant in the opinion of management. Other commitments related to sales/procurements made in the normal course of business are not disclosed to avoid excessive details. (y) Non-current assets held for sale Non-current assets and disposal groups are classified as held for sale if their carrying amount is intended to be recovered principally through a sale (rather than through continuing use) when the asset (or disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sale of such asset (or disposal group) and the sale is highly probable and is expected to qualify for recognition as a completed sale within one year from the date of classification. Non-current assets and disposal groups classified as held for sale are measured at lower of their carrying amount and fair value less costs to sell. (z) Statement of Cash Flows Statement of Cash Flows is prepared segregating the cash flows into operating, investing and financing activities. Cash flow from operating activities is reported using indirect method, adjusting the profit before tax excluding exceptional items for the effects of: (i) changes during the period in inventories and operating receivables and payables transactions of a non-cash nature; (ii) non-cash items such as depreciation, provisions, unrealised foreign currency gains and losses; and (iii) all other items for which the cash effects are investing or financing cash flows. Cash and cash equivalents (including bank balances) shown in the Statement of Cash Flows exclude items which are not available for general use as at the date of Balance Sheet. (aa) Key sources of estimation The preparation of financial statements in conformity with Ind AS requires that the management of the Company makes estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates include useful lives of property, plant and equipment & iintangible assets, allowance for doubtful debts/advances, future obligations in respect of retirement benefit plans, expected cost of completion of contracts, provision for rectification costs, fair value measurement etc. Difference, if any, between the actual results and estimates is recognised in the period in which the results are known. (ab) Business Combination Common control business combination where the Company is transferee is accounted using the pooling of interest method. Assets and liabilities of the combining entities are reflected at their carrying amounts and no new asset or liability is recognised. Identity of reserves of the transferor company is preserved by reflecting them in the same form in the Company's financial statements in which they appeared in the financial statement of the transferor company. The excess between the amount of consideration paid over the share capital of the transferor company is recognised as a negative amount and the same is disclosed as capital reserve on business combination. The information in the financial statements of the prior period is restated from the date of business combination in case the business combination is approved by statutory authority in the subsequent period. 261 Notes forming part of the Financial Statements (contd.) NOTE [2] Property, plant and equipment & capital work-in-progress (i) estimated amount of contracts remaining to be executed on capital account and not provided for; 13.96 4.40 0.43 Sr. Category of Assets Sub-category of Assets No. 1. D. Sr. Category of Assets Photographic equipment Assets used in Metallurgical & Material Handling business: Sub-category of Assets Assets used in Construction business: Useful life as per Schedule II (in years) Useful life adopted (in years) 5 No. Useful life as per Schedule II (in years) Useful life adopted (in years) 1. 2. 3. E. Office Equipment Air conditioning and refrigeration equipment Photographic equipment Assets used in Power business: Assets deployed at project site 15 Assets deployed at project site C. 15 Horizontal Autoclaves Load bearing structures Cranes 2. Roads Carpeted Roads-other than RCC 5 5-15 15 5-30 10-30 (in years) 5 50 5-15 B. Assets used in Electrical & Automation business: Sr. Category of Assets Sub-category of Assets No. Useful life as per Schedule II (in years) Useful life adopted 1. Plant & Equipment General Specialised machine tools, dies, jigs, fixtures, gauges for electrical business 10-30 5 15 3 3 Upto As at As at Additions Deductions from PPE 31-3-2018 31-3-2017 For the year Deductions from PPE Transferred 31-3-2018 31-3-2017 40.05 10.36 50.41 50.41 40.05 391.71 57.58 26.64 3.18 472.75 31-3-2018 Upto As at Transferred Assets deployed at project site 15 3 Sr. Category of Assets Sub-category of Assets No. 1. Plant & Equipment Site facilities Useful life as per Schedule II (in years) Useful life adopted (in years) 15 4 Carrying value of Property plant and equipment pledged as collateral for liabilities and/or commitments as at March 31, 2018 - 0.09 crore (as at March 31, 2017: 0.09 crore) Notes forming part of the Financial Statements (contd.) NOTE [3] Investment property LARSEN & TOUBRO crore Cost Depreciation Book Value Class of assets As at 1-4-2017 Other Furnaces 10-30 Useful life adopted (in years) Modular Furnace d. The average capitalisation rate for borrowing cost is 7.24 % (previous year: 7.91%). e. crore 2017-2018 11.35 2016-2017 15.29 0.07 0.26 11.42 15.55 Class of assets In addition to depreciation, obsolescence amounting to ₹ 4.54 crore (previous year: 22.90 crore) have been recognised in Profit and Loss during the year. Owned assets given on operating lease have been presented separately under respective class of assets as "Leased out" pursuant to Ind AS 17 "Leases". g. Cost as at April 1, 2017 of individual assets has been reclassified wherever necessary. h. i. Out of its leasehold land at Hazira, the Company has given certain portion of land for the use to its subsidiary company and the lease deed is under execution. Depreciation is provided based on useful life supported by the technical evaluation considering business specific usage, the consumption pattern of the assets and the past performance of similar assets. a. Estimated useful life of the following assets is in line with useful life prescribed in schedule II of the Companies Act, 2013: Sr. No. Asset Class Minimum useful life (in years) 1. Owned Buildings f. Total Plant and Equipment Buildings (owned) 0.45 0.98 69.01 2928.29 103.00 102.51 6272.46 6523.22 0.42 (1.61) 28.41 2011.58 103.00 Add: Capital work-in-progress 452.10 302.53 6724.56 6825.75 *1.13 crore pertains to foreign currency fluctuation, a. b. i. A. $1.74 crore Refer to note 60 #Refer to note [46(B)] Cost of freehold land includes 1.27 crore (previous year: 1.27 crore) for which conveyance is yet to be completed. Cost of buildings includes ownership accommodations: B. in various co-operative societies, shop-owners' associations and non-trading corporations: 67.29 crore, including 2660 shares of 50 each, 232 shares of ₹100 each and 1 share of 250. (previous year: in various co-operative societies, shop-owners' associations and non-trading corporations: 65.51 crore, including 2550 shares of 50 each, 232 shares of 100 each and 1 share of ₹250). in various apartments: 9.42 crore. (previous year: * 8.96 crore). 262 LARSEN & TOUBRO Notes forming part of the Financial Statements (contd.) NOTE [2] (contd.) C. ii. iii. C. in various co-operative societies: 0.36 crore (previous year: 6.89 crore) for which share certificates are yet to be issued. D. in proposed co-operative societies: 29.90 crore. (previous year: 27.61 crore). ownership accommodations of 3.52 crore in respect of which the deed of conveyance is yet to be executed. (previous year: of 3.53 crore). ownership accommodations of ₹ 7.68 crore representing undivided share in properties at various locations. (previous year: * 7.68 crore). Additions during the year and capital work-in-progress include ₹ 11.42 crore (previous year: 15.55 crore) being borrowing cost capitalised in accordance with Indian Accounting Standard (Ind AS) 23 on "Borrowing Costs". Asset class wise break-up of borrowing costs capitalised is as follows: 2. 2.39 135.23 9303.26 2011.58 984.77 (9.71) 110.56 8637.80 1017.63 1024.39 Owned Plant and Equipment Computer Aircrafts 2. Owned Vehicles Motor Cars Useful life as per Schedule II (in years) Useful life adopted (in years) 20 8 18 7 263 Notes forming part of the Financial Statements (contd.) 1. NOTE [2] (contd.) Assets used in Heavy Engineering and Shipbuilding Business: j. 264 Sr. Category of Assets No. Sub-category of Assets Useful life as per Schedule II (in years) 1. Plant & Equipment General Boring/Rolling/Drilling/Milling machines A No. Sub-category of Assets Category of Assets 4. Office Equipment 5. Furniture and Fixture 6. Owned Vehicles 7. Ships Maximum useful life (in years) 3 60 8 15 3 6 4 5 10 10 8 10 14 14 b. Estimated useful life of following assets is different than useful life as prescribed in schedule II of the Companies Act, 2013. Sr. 3. 10 10 276.24 38,80,00,000 268 1084.00 874.00 Carried forward 48.00 4,80,00,000 2 L&T Seawoods Limited -10% Non-cumulative, optionally convertible redeemable preference shares, May 12, 2022 1036.00 826.00 82,60,00,000 2 L&T Seawoods Limited -10% Non-cumulative, optionally convertible redeemable preference shares, March 30, 2022. (iii) Preference share considered equity as per terms: 48.00 1761.49 1324.91 276.23 par preference shares, March 28, 2032 L&T Shipbuilding Limited - 9% Non-cumulative, non-convertible redeemable at par preference shares, November 19, 2032 41,61,29,994 295.40 L&T Shipbuilding Limited - 9% Non-cumulative, non-convertible redeemable at par preference shares, November 23, 2032 10 1,28,70,000 9.16 L&T Shipbuilding Limited - 9% Non-cumulative, non-convertible redeemable at par preference shares, December 19, 2032 10 18,93,29,994 132.00 10 12.71 15,00,000 12.41 13,00,000 100 6.90% Oil Mktg Cos GOI Special Bonds 2026 16.47 15.98 100 24.97 204.55 198.93 1,77,84,000 100 9.20% Government of India Bonds 2030 25.84 24,00,000 100 9.23% Government of India Bonds 2043 8.32% Government of India Bonds 2032 100 34.65 293.97 7.80% Government of India Bonds 2020 100 6.79% Government of India Bonds 2029 100 6.35% Government of India Bonds 2020 8.28% Government of India Bonds 2027 33,00,000 100 7.80% Government of India Bonds 2020 9.69 10,00,000 100 6.79% Government of India Bonds 2029 10.65 10.14 10,00,000 100 7.59% Government of India Bonds 2026 298.13 2,45,00,000 81.86 As at 31-3-2017 75,00,000 1070.80 2068.19 884.29 1298.35 264.42 769.84 22.75 crore 779.59 As at 31-3-2017 1171.46 5031.03 As at 31-3-2018 * crore 1205.99 (C) Mutual funds (iii) Other debentures & bonds (ii) Joint venture companies (i) Subsidiary companies (B) Debentures and bonds (A) Government and trust securities Particulars Financial Assets: Investments-current NOTE [10] Details of current investments 79.57 4344.98 Number of units 100 8.33% Government of India Bonds 2026 21.65 21.09 20,00,000 100 5.36 5.29 5,00,000 6982.08 100 crore crore 100 As at 31-3-2018 31-3-2018 per unit As at Face value Particulars (A) Government and trust securities (quoted): 8.28% Government of India Bonds 2032 8.15% Government of India Bonds 2022 7.59% Government of India Bonds 2029 Total - (A) 10.24% L&T Finance Limited -Secured redeemable non-convertible debenture, September 17, 2019 (quoted) 8888 Face value Number of units LARSEN & TOUBRO Particulars Details of current investments (contd.) NOTE [10] Notes forming part of the Financial Statements (contd.) 375.43 43.25 per unit 360 39.60 330 1000000 37.24 310 1000000 33.95 290 1000000 1000000 32.55 As at 31-3-2018 crore 264.42 769.84 264.42 260.36 2,500 1000000 45.35 1,040 1000000 As at 31-3-2018 9.50% Kudgi Transmission Limited SR-W NCD April 25, 2040 8.60% LTIDPL NCD December 26, 2026 Total- (ii) 960 1000000 46.92 390 1000000 375.43 9.50% Kudgi Transmission Limited SR-S NCD April 25, 2036 9.50% Kudgi Transmission Limited SR-V NCD April 25, 2039 (ii) Joint Venture companies: (contd.) Brought forward As at 31-3-2017 crore 41.78 100 280 31.08 22.75 8.80% Kudgi Transmission Limited SR-F NCD April 25, 2023 8.80% Kudgi Transmission Limited SR-G NCD April 25, 2024 8.80% Kudgi Transmission Limited SR-H NCD April 25, 2025 8.80% Kudgi Transmission Limited SR-I NCD April 25, 2026 8.80% Kudgi Transmission Limited SR-J NCD April 25, 2027 9.14% Kudgi Transmission Limited SR-K NCD April 25, 2028 9.14% Kudgi Transmission Limited SR-L NCD April 25, 2029 9.14% Kudgi Transmission Limited SR-M NCD April 25, 2030 9.14% Kudgi Transmission Limited SR-N NCD April 25, 2031 9.14% Kudgi Transmission Limited SR-O NCD April 25, 2032 9.50% Kudgi Transmission Limited SR-P NCD April 25, 2033 9.50% Kudgi Transmission Limited SR-Q NCD April 25, 2034 9.50% Kudgi Transmission Limited SR-R NCD April 25, 2035 Carried forward 274 (ii) Joint venture companies: Total- (i) 1000 Notes forming part of the Financial Statements (contd.) (i) Subsidiary companies: (B) Debentures and bonds (quoted): 22.75 779.59 102.36 99.60 1,00,00,000 104.99 1,00,00,000 193.82 2,00,00,000 100.89 1,00,00,000 1205.99 1000000 1000000 16.93 270 1000000 27.63 240 1000000 26.81 230 1000000 23.94 150 210 22.75 200 1000000 20.45 180 1000000 19.25 170 1000000 1000000 273 Stock-in-trade [includes goods-in-transit 26.31 crore 986.40 1379.11 512.00 225.50 NOTE [7] 15.46 Less: Allowance for doubtful advances 15.46 0.45 26.59 0.45 26.59 97.55 78.29 crore crore crore crore As at 31-3-2017 As at 31-3-2018 1167.22 0.23 0.74 1.00 Advance towards equity commitment - Subsidiary company [Note 38(B)] 3.01 1.99 Premium receivable on financial guarantee contracts 0.02 Embedded derivative receivables 273.76 crore 223.56 91.54 Doubtful other loans and advances 319.52 crore Particulars As at 31-3-2017 As at 31-3-2018 Other financial assets - non-current 1777.54 0.03 2.28 2.28 1684.13 Cash and bank balances not available for immediate use [Note 7(a)] Forward contract receivables Other loans, unsecured, doubtful: Advance recoverable in cash Loans against mortgage of house property Other unsecured loans, considered good: (b) Aggregate amount of unquoted investments; Market value Book value (a) Aggregate amount of quoted investments and market value thereof; crore crore As at 31-3-2017 As at 31-3-2018 Particulars Book value Details of quoted/unquoted investments: 217.73 22994.26 Total investments non-current (A)+(B)+(C) 58.09 14,20,80,000 10 L&T Special Steels & Heavy Forgings Private Limited - 6% Cumulative, non-convertible redeemable at par preference shares, December 8, 2026 80.89 17,76,00,000 10 19776.81 19.45 (c) Aggregate amount of impairment in value of investments 2530.48 Other secured loans, considered good: Inter-corporate deposits [Note 37 &38(A)] Joint venture: Inter-corporate deposits [Note 37 &38(A)] Subsidiary companies: Unsecured long term loan and advances to related parties: Less: Provision for doubtful security deposits Unsecured security deposits, doubtful: Unsecured security deposits, considered goods: 4597.03 Particulars NOTE [6] Notes forming part of the Financial Statements (contd.) 271 966.46 967.21 17246.33 18397.23 31883.81 50537.78 Financials Assets: Loans - non-current 6.35 Other receivables 6.02 Construction materials [includes goods-in-transit * 56.16 crore (previous year: 16.30 crore)] 264.40 286.15 Components [includes goods-in-transit 17.19 crore (previous year: 1.86 crore)] 328.80 403.53 * crore 63.10 crore As at 31-3-2018 Raw materials [includes goods-in-transit 2.46 crore Particulars 2244.35 2929.00 1537.91 1652.22 640.38 1240.66 As at 31-3-2017 66.06 61.59 Manufacturing work-in-progress 3.81 Note: During the year 12.87 crore (previous year: 17.92 crore) was recognised as expense towards write-down of inventory 1762.86 281.83 3.31 71.72 68.70 Property development related work-in-progress [Note 48(b)(iv)] Loose tools (previous year: * 55.70 crore)] (previous year: * 3.59 crore)] (previous year: 18.77 crore)] 169.68 200.15 (iii) Other debentures and bonds: 221.52 154.24 Finished goods 360.01 333.96 Stores and spares [includes goods-in-transit 3.61 crore 2500.04 28.28 crore 3 23.09 24.18 23.51 24.51 Amount received (including interest accrued thereon) from customers of property development business - to be handed over to housing society on its formation Contingency deposits (including interest accrued thereon) received from customers of property development business towards their sales tax liability - to be refunded /adjusted depending on the outcome of the legal case 2 1 As at 31-3-2017 Other bank balances (including interest accrued thereon) not available for immediate use being in the nature of security offered for bids submitted, loans availed etc. Total As at 31-3-2018 Particulars Sr. crore LARSEN & TOUBRO 7(a) Particulars of cash and bank balances not available for immediate use Notes forming part of the Financial Statements (contd.) 272 506.68 438.54 No. 7.84 464.61 513.30 crore As at 31-3-2017 As at 31-3-2018 Inventories (at cost or net realisable value whichever is lower) NOTE [9] Current tax receivable (net) Advance recoverable other than in cash Unsecured Secured 346.73 Capital advances: Other non-current assets NOTE [8] 223.56 319.52 Amount reflected under other financial assets - non-current [Note 7] 169.77 193.78 Less: Amount reflected under current assets [Note 13] 393.33 Particulars 10.75% The Tata Power Co. Ltd. NCD August 21, 2072 51.62 1,037 21838.61 26679.21 1916.66 2224.97 19921.95 24454.24 Considered doubtful Considered good crore crore crore crore As at 31-3-2017 As at 31-3-2018 LARSEN & TOUBRO Particulars Unsecured: Financials Assets - current: Trade receivables NOTE [11] Less: Allowance for doubtful debts 2224.97 1916.66 24454.24 24454.24 Financials Assets - current: Other bank balances NOTE [13] 3183.75 12.11 1.78 2.37 948.17 365.13 435.01 crore 1556.79 Notes forming part of the Financial Statements (contd.) As at 31-3-2017 As at 31-3-2018 Fixed deposits with banks (maturity less than 3 months) Cash on hand Cheques and draft on hand Balance with banks Particulars Financial Assets - current: Cash and cash equivalents NOTE [12] 19921.95 19921.95 crore 1798.20 5031.03 1070.80 1951.05 JM Balanced Fund - Direct - Quarterly Dividend 688.04 1000 JM Equity Fund Quarterly Dividend Payout - Regular 52.54 10 BSL Pure Value Fund - Growth - Direct 25.15 10 1000 26.52 Kotak Emerging Equity-Direct-Dividend Reinvestment 52.98 10 Axis Enhanced Arbitrage Fund - Direct Growth ICICI Pru Multicap Plan - Direct - Growth 52.72 10 Reliance Mid & Small Cap Fund - Direct - Growth 53.12 10 Particulars 134.60 1000 3274.18 1951.05 3274.18 crore As at 31-3-2017 As at 31-3-2018 crore 276 Book value (accounted based on NAV) (b) Aggregate amount of unquoted current investments; JM Arbitrage Advantage Fund - Regular Plan - Quarterly Dividend Total - (C) Market value (a) Aggregate amount of quoted current investments and market value thereof; Particulars Details of quoted/unquoted investments: 6982.08 4344.98 Total current investments (A)+(B)+(C) 5031.03 1070.80 400.54 Book value 10 As at 31-3-2018 As at 31-3-2017 706.04 3.96 65.51 54.21 0.80 700.51 Associate companies Subsidiary companies Advances to related parties: crore As at 31-3-2017 crore crore crore Particulars As at 31-3-2018 1905.80 992.34 0.01 0.01 0.24 0.27 Joint venture companies Advances recoverable in cash Premium receivable on financial guarantee contracts Embedded derivative receivable 2317.92 81.59 6.82 775.51 1454.00 154.36 154.36 127.39 26.97 3441.78 18.20 4.34 23.27 278 157.26 Less: Allowance for doubtful loans and advances 157.26 130.15 27.11 Other loans and advances Deferred credit sale of ships Doubtful advances: 755.52 2658.65 18.20 1595.67 678.04 Financials Assets: Loans - current NOTE [14] Notes forming part of the Financial Statements (contd.) 277 1599.91 1134.12 0.02 169.77 193.78 Cash and bank balances not available for immediate use [Note 7(a)] Particulars 0.03 7.38 Earmarked balances with banks-Section 4(2)(1)(D) of RERA 46.61 1383.51 crore 63.69 Earmarked balances with banks-unclamied dividend 869.24 Fixed deposits with banks Margin money deposits with banks crore Unsecured security deposits, considered good: Less: Provision for doubtful security deposits 3.69 3.69 5.89 5.89 crore 291.68 295.82 crore crore crore As at 31-3-2017 Unsecured security deposits, doubtful As at 31-3-2018 NOTE [15] Others Loans against mortgage of house property Other unsecured loans, considered good: Other secured loans, considered good: Inter-corporate deposits [Note 37 & 38(A)] (ii) Joint venture companies Inter-corporate deposits [Note 37 & 38(A)] (i) Subsidiary companies Unsecured long term loans and advances to related parties: Other current financial assets Tata Infrastructure Fund - Direct - Growth 129.25 10 26.68 25 26.03 32222222 10000000 10000000 10000000 10000000 10000000 10000000 10000000 250 1000000 25.24 24.40 24.40 24.40 10000000 10000000 10000000 25 26.68 26.68 26.68 25 10000000 26.80 25 10000000 26.80 25 10000000 26.80 10000000 25 26.80 25 10000000 26.59 25 10000000 26.59 26.59 26.59 10000000 24.40 10000000 24.29 1000000 10.23 9.87 79,162 1000 8.41% NTPC Ltd. Tax Free Bonds SR-1A December 16, 2023 8.46% REC Ltd. Tax Free Bonds SR-3B August 29, 2028 L&T Special Steels & Heavy Forgings Private Limited - 6% Cumulative, non-convertible redeemable at par preference shares, December 8, 2025 50.71 50,00,000 70 3.83 27 74.83 72.17 6,04,355 1000 1000000 100 8.46% PFC Ltd. Tax Free Bonds August 30, 2028 1.44% Inflation Indexed Bonds Junuary 05, 2023 8.20% PFC Ltd. Tax Free Bonds February 01, 2022 132.36 136.81 3.74 26.40 9.70 9.48% BOB Basel III Perpetual Bonds Series V January 09, 2020 10000000 27.61 10000000 ECL Finance Ltd. NCD SR-A8L601B January 25, 2018 ECL Finance Ltd. NCD SR-A8L601C January 25, 2018 Edelweiss Finvest Private Limited SR-B8B702A BR NCD March 26, 2018 Edelweiss Finvest Private Limited SR-B8B702B BR NCD March 26, 2018 Edelweiss Finvest Private Limited SR-B8B702C BR NCD March 26, 2018 Edelweiss Finvest Private Limited SR-B8B702D BR NCD March 26, 2018 Edelweiss Finvest Private Limited SR-B8B702E BR NCD March 26, 2018 9.50% YES Bank Ltd. AT1 Pertetual December 23, 2021 Ecap Equities Limited SR- B9A801A March 04, 2019 Ecap Equities Limited SR- B9A801B March 05, 2019 Ecap Equities Limited SR- B9A801C March 06, 2019 Ecap Equities Limited SR- B9A801D March 07, 2019 Ecap Equities Limited SR-B9B801A March 06, 2019 Ecap Equities Limited SR-B9B801B March 07, 2019 Ecap Equities Limited SR-B9B801C March 08, 2019 Ecap Equities Limited SR-B9B801D March 11, 2019 Ecap Equities Limited SR-B9B802A March 11, 2019 Ecap Equities Limited SR-B9B802B March 12, 2019. Ecap Equities Limited SR-B9B802C March 13, 2019 Ecap Equities Limited SR-B9B802D March 14, 2019 Ecap Equities Limited SR-B9B803A March 11, 2019 Ecap Equities Limited SR-B9B803B March 12, 2019 Ecap Equities Limited SR-B9B804A March 12, 2019 27.61 10000000 103.68 1,000 1000000 9.92 54.23 1000000 9.08% Union Bank Sr-XXIV Perpetual Bond May 03, 2022 9.00% YES Bank Ltd. Pertetual October 18, 2022 ECL Finance Ltd. NCD SR-A8L601A January 25, 2018 10.40 100 1000000 8.65% BOB Basel III Perpetual Bonds Series IX August 11, 2022 20.71 200 1000000 500 10000000 25 26.40 Birla Sun Life Cash Plus - Regular Plan - Growth 1951.09 1000 SBI Premier Liquid Fund - Regular Plan - Growth 295.90 24,74,30,947 10 JM Equity Fund Monthly Dividend Payout 571.42 100 28,78,90,129 JM Balanced Fund Direct Plan - Annual Dividend Payout Option 203.48 20,01,63,935 10 JM Arbitrage Advantage Fund-Direct-Monthly Dividend Payout 358.46 1000 Reliance Medium Term Fund - Direct Plan - Growth 56.39 10 10 100.03 10 Birla Sun Life Floating Rate Fund - LTP-Direct Plan - Growth 53.31 10 DSP BlackRock India Tiger Fund - Direct - Growth 12.00 10 L&T Resurgent India Corporate Bond Fund - Dividend 100.03 1000 ICICI Prudential Flexible Income - Regular Plan - Growth 50.01 100.03 10 Kotak Floater ST - Growth Indiabulls Liquid Fund - Growth BNP Paribas Overnight Fund - Growth 26.55 1000 DSP BlackRock Small and Midcap Fund - Reg - Growth 307.59 10 1000000 300.08 HDFC FRIF STF - WP - Growth 359.65 348.06 30,00,000 1000 7.18% IRFC Ltd. Tax Free Bonds February 19, 2023 28.64 27.76 2,50,000 1000 Total- (iii) 6.86% IIFCL Tax Free Bonds March 26, 2023 1000000 9.00% Indiabulls Housing Finance Limited LOA July 28, 2018 25.70 25 10000000 Ecap Equities Limited SR-B9B804B March 13, 2019 25.70 25 10000000 10.86 1000 1298.35 - SBI Premier Liquid Fund - Regular Plan (C) Mutual funds (unquoted): crore crore 31-3-2017 31-3-2018 As at As at As at 31-3-2018 884.29 per unit Number of units Particulars Details of current investments (contd.) NOTE [10] Notes forming part of the Financial Statements (contd.) 275 1171.46 2068.19 Total (B) = (i) + (ii) + (iii) Face value 78.75 1935.81 10 15.03 1746.48 (previous year: 950 crore)] L&T Kobelco Machinery Private Limited 10 2,55,00,000 25.50 25.50 1746.48 Krishnagiri Walajahpet Tollway Limited [Nil (previous year: 26000)] L&T-MHPS Boilers Private Limited 10 11,93,91,000 119.39 119.39 L&T-MHPS Turbine Generators Private Limited L&T Rajkot-Vadinar Tollway Limited [ 1000 (previous year: 1000)] Carried forward 10 10 36,24,06,000 31,28,69,096 L&T Infrastructure Development Projects Limited [Net of provision 950 crore Ahmedabad-Maliya Tollway Limited (formerly known as L&T Ahmedabad-Maliya Tollway Limited) [1000 (previous year: * 1000)] 10 100 L&T Chennai-TADA Tollway Limited [1000 (previous year: * 1000)] Devihalli Hassan Tollway Limited (formerly known as L&T Devihalli Hassan Tollway Limited) [* Nil (previous year: * 1000)] ₹ 10 100 10 10 z 10 100 L&T Howden Private Limited 10 1,50,30,000 15.03 L&T Halol-Shamlaji Tollway Limited [ 1000 (previous year: 1000)] (i) Investments in fully paid equity instruments: 362.41 10 Number of units Face value per unit As at 31-3-2018 As at As at 31-3-2018 (iii) Preference shares-(equity portion): 31-3-2017 crore 2268.81 2268.81 10 13,000 0.01 0.01 crore 362.41 L&T-MHPS Turbine Generators Private Limited (ii) Other equity investments: 100 2268.81 2268.81 269 Notes forming part of the Financial Statements (contd.) NOTE [5] Details of Investments - non-current (contd.) L&T-MHPS Boilers Private Limited Particulars L&T Samakhiali Gandhidham Tollway Limited L&T Special Steels and Heavy Forgings Private Limited L&T Transportation Infrastructure Limited L&T-Sargent & Lundy Limited PNG Tollway Limited Raykal Aluminum Company Private Limited L&T MBDA Missile Systems Limited (i) Investments in fully paid equity instruments: (contd.) Brought forward 10 (c) Joint venture companies: 4.42 42.25 42.25 L&T Seawoods Limited - 10% Non-cumulative, optionally convertible redeemable preference shares, September 3, 2022 2 4,20,00,000 42.00 42.00 4,22,50,000 L&T Hydrocarbon Engineering Ltd - 10% Non-cumulative, optionally convertible 50,00,00,000 500.00 500.00 redeemable at par preference shares, February 6, 2029 L&T Hydrocarbon Engineering Ltd - 12% Non-cumulative, optionally convertible redeemable at par preference shares, October 19, 2030 10 13,00,00,000 10 130.00 2 1084.00 Notes forming part of the Financial Statements (contd.) NOTE [5] Details of Investments - non-current (contd.) LARSEN & TOUBRO Number of units Particulars Face value L&T Seawoods Limited - 10% Non-cumulative, optionally convertible redeemable preference shares, July 14, 2022 per unit As at 31-3-2018 As at 31-3-2017 ₹ crore crore (iii) Preference share considered equity as per terms: (contd.) Brought forward 874.00 As at 31-3-2018 4.42 130.00 10 28.74 28.74 29.38 29.38 Total (a) = (i)+(ii)+(iii)+(iv) 18776.86 16381.00 L&T Shipbuilding Limited (b) Associate companies: 10 7,35,000 Magtorq Private Limited 100 9,000 4.42 4.42 Gujarat Leather Industries Limited [Net of provision 0.56 crore (previous year: *0.56 crore)] L&T Hydrocarbon Engineering Ltd - 12% Non-cumulative, optionally convertible redeemable at par preference shares, March 30, 2031 0.64 3277.80 13,00,00,000 130.00 130.00 L&T Uttaranchal Hydropower Limited - 10% Non-cumulative, optionally convertible redeemable preference shares, July 17, 2029. 2 89,10,50,000 891.05 0.64 701.25 (iv) Other equity investments: L&T Aviation Services Private Limited 10 64,83,00,000 648.30 648.30 3257.60 L&T Realty Limited - 12% Non-cumulative and optionally convertible redeemable at par preference shares, May 26, 2025. 41,92,84,000 15,54,00,000 419.28 As at 31-3-2017 crore crore (B) Investments in preference shares of subsidiary companies: (contd.) Brought forward 100.99 91.17 As at 31-3-2018 L&T Shipbuilding Limited - 9% Non-cumulative non-convertible redeemable at par preference shares, May 28, 2030 42,18,60,000 159.32 142.09 L&T Shipbuilding Limited - 9% Non-cumulative non-convertible redeemable at par preference shares, August 10, 2030 10 25,00,00,000 92.87 10 82.81 As at 31-3-2018 Face value 20.36 18.53 L&T Shipbuilding Limited - 12% Cumulative, non-convertible redeemable at par preference shares, April 16, 2030 10 11,00,00,000 41.93 37.41 per unit Carried forward 270 Notes forming part of the Financial Statements (contd.) NOTE [5] Details of Investments - non-current (contd.) Particulars LARSEN & TOUBRO Number of units 100.99 5,00,00,000 L&T Shipbuilding Limited - 9% Non-cumulative non-convertible redeemable at par preference shares, September 29, 2030 7,50,00,000 127.95 L&T Shipbuilding Limited - 9% Non-cumulative non-convertible redeemable at par preference shares, November 23, 2032 10 1,28,70,000 3.95 L&T Shipbuilding Limited - 9% Non-cumulative non-convertible redeemable at par preference shares, December 19, 2032 10 41,61,29,994 18,93,29,994 Total - (B) 867.35 605.10 (C) Investments in preference shares of Joint Venture companies: (Fair value debt portion): L&T Special Steels & Heavy Forgings Private Limited - 6% Cumulative, non-convertible redeemable at par preference shares, December 8, 2024 419.28 57.82 10 10 112.28 27.55 24.56 L&T Shipbuilding Limited - 9% Non-cumulative non-convertible redeemable at par preference shares, December 8, 2030 10 25,90,00,000 93.67 83.48 L&T Shipbuilding Limited - 9% Non-cumulative non-convertible redeemable at par preference shares, November 19, 2032 L&T Shipbuilding Limited - 9% Non-cumulative non-convertible redeemable at par preference shares, February 4, 2031 21,60,00,000 77.11 68.71 L&T Shipbuilding Limited - 9% Non-cumulative non-convertible redeemable at par preference shares, March 28, 2032 10 38,80,00,000 126.12 10 10 91.17 35.23 10 Tidel Park Limited [Note 45(f)] investments) [30,000 (previous year: * 30,000)] 0.10 0.10 1,00,000 300 100 Utmal Multi purpose Service Co-operative Society Limited (B Class) (non-trade 10 BBT Elevated Road Private Limited 15,899 10000 International Seaport Dredging Limited [Net of provision 15.90 crore (previous year: 15.90 crore)] (d) Other companies: 2730.25 40,00,000 64.27 55.94 VP Global Fibre and Yarns Private Limited [20,600 (previous year: Nil)] The New India Assurance Company Limited 10 L&T Shipbuilding Limited - 12% Cumulative, non-convertible redeemable at par preference shares, October 22, 2028 (Fair value debt portion): (B) Investments in preference shares of subsidiary companies: 56.04 19171.71 136.65 21909.18 50.00 260.65 2991.26 9,61,520 Total (A)=(a)+(b)+(c)+(d) ICICI Securities Limited 22.28 3,12,498 10 206 100 5 9,00,00,000 Total (c) = (i)+(ii)+(iii) 14,20,80,000 0.04 37,750 10 22.42 22.42 2,24,22,660 10 0.82 0.82 27,82,736 10 10.86 10.86 1,08,64,000 10 0.04 10 25,500 0.03 10 97.91 17,76,00,000 10 78.33 15,54,00,000 L&T Shipbuilding Limited - 12% Cumulative, non-convertible redeemable at par preference shares, June 24 2029 84.41 L&T Special Steels & Heavy Forgings Private Limited - 6% Cumulative, non-convertible redeemable at par preference shares, December 8, 2024 L&T Special Steels & Heavy Forgings Private Limited - 6% Cumulative, non-convertible redeemable at par preference shares, December 8, 2025 L&T Special Steels & Heavy Forgings Private Limited - 6% Cumulative, non-convertible redeemable at par preference shares, December 8, 2026 8.34 5.77 6.10 2.24 2.24 2722.24 2722.27 8.01 38.70 10 2017 ** crore shares shares 1,62,50,00,000 325.00 1,62,50,00,000 325.00 As at 31-3-2017 Number of Equity shares of 2 each Equity shares of 2 each 1,40,13,69,456 280.27 93,29,65,803 186.59 (b) Reconciliation of the number of equity shares and share capital: 2017-18 Issued, subscribed and fully paid up: Particulars crore 33285.14 crore 25587.80 9400.58 LARSEN & TOUBRO As at 31-3-2017 crore crore 21340.55 71.28 8027.61 86.52 As at 31-3-2018 Number of 3712.12 3992.68 93.56 2.59 45.57 1.49 4.16 4.16 4.16 4.16 39130.82 53.61 Number of crore shares Notes forming part of the Financial Statements (contd.) NOTE [17] Equity share capital (contd.) (d) Shareholder holding more than 5% of equity shares as at the end of the year: Name of the shareholders Life Insurance Corporation of India L&T Employees Welfare Foundation 279 Administrator of the Specified Undertaking of the Unit Trust of India As at 31-3-2017 Number of Shareholding shares % shares % 24,63,52,777 17.58 As at 31-3-2018 Number of Shareholding The Company has only one class of share capital, i.e., equity shares having face value of 2 per share. Each holder of equity share is entitled to one vote per share. (c) Terms/rights attached to equity shares: 186.59 2016-17 Number of shares crore Issued, subscribed and fully paid up equity share outstanding at the beginning of the year 93,29,65,803 Add: Shares issued on exercise of employee stock options during the year 16,38,898 Add: Shares issued as bonus on July 15, 2017 46,67,64,755 186.59 0.33 93.35 93,14,78,845 14,86,958 186.30 0.29 Issued, subscribed and fully paid up equity shares outstanding at the end of the year 1,40,13,69,456 280.27 93,29,65,803 crore 14,64,24,938 As at 31-3-2018 Authorised: Secured redeemable non-convertible fixed rate debentures (privately placed): 19(a) (i) 7134.28 6725.73 408.55 5495.16 5495.16 Face value per debenture () 0.20 0.20 0.20 0.08 0.08 Finance lease Sales tax deferment loan [Note 19(d)] 3230.58 3230.58 0.20 1952.51 Date of allotment 31.3.2018 crore Current maturity of long term borrowings [Note 24] 408.58 408.55 408.58 Less: Total Redeemable at face value at the end of 10th year from the date of allotment. As at 9.15% p.a. payable annually 408.55 408.58 January 5, 1000000 Terms of repayment for debentures outstanding as at 31.3.2018 Interest for the year 2017-2018 As at 31.3.2017 crore 2009 1952.51 Term loan from banks [Note 19(c)] 1201.78 1201.78 Notes forming part of the Financial Statements (contd.) NOTE [16] Other current assets Particulars Due from customers (construction and project related activity) Due from customers (property development activity) [Note 48(b)(v)] Retention money including unbilled revenue Balances with excise customs port trust Secured Advance recoverable other than in cash Others Doubtful other loans and advances Less: Provision for doubtful advances NOTE [17] Equity share capital (a) Share capital authorised, issued, subscribed and paid up: 112.61 Government grants receivable As at 31-3-2017 Unsecured Total crore 1245.64 1245.64 0.675% Foreign currency convertible bonds [Note 19(b)] 113.61 113.61 116.96 116.96 Redeemable non-convertible inflation linked debentures [Note 19(a)(iii)] 2588.03 408.55 2179.48 2179.85 2179.85 Redeemable non-convertible fixed rate debentures [Note 19(a)(i) & (ii)] crore crore crore crore crore Particulars 15.69 17,21,28,421 12.28 The equity shares will be issued at a premium of 1214.50 crore (previous year: 1215.13 crore) on the exercise of options by the bond holders # Note 17 (h) for terms of employee stock option schemes ## Note 19 (b) for terms of foreign currency convertible bonds @ ** The number of options have been adjusted consequent to bonus issue wherever applicable (g) The aggregate number of equity shares issued pursuant to contract, without payment being received in cash in immediately preceding last five years ended on March 31, 2018 - Nil (previous period of five years ended March 31, 2017: Nil) (h) Stock option schemes 280 i. Terms: A. B. (f) The aggregate number of equity shares allotted as fully paid up by way of bonus shares in immediately preceding five years ended March 31, 2018 are 77,50,59,331 (previous period of five years ended March 31, 2017: 30,82,94,576 shares) The grant of options to the employees under the stock option schemes is on the basis of their performance and other eligibility criteria. The options are vested equally over a period of 4 years [5 years in the case of series 2006(A)], subject to the discretion of the management and fulfillment of certain conditions. 146.71 crore) * 1,36,876 4,15,042 47,178 59,550 32,250 * crore (at face value) Employee stock options granted and outstanding # The equity shares will be issued at a premium of 94.42 crore (previous year: 0.675% 5 years & 1 day US$ denominated foreign currency convertible bonds (FCCB) ## 0.85* fully paid 42,47,360 0.85* 95,20,455@ 1.90** 63,46,986 1.27** 42,65,623@ Options can be exercised anytime within a period of 7 years from the date of grant and would be settled by way of issue of equity shares. Management has discretion to modify the exercise period. Notes forming part of the Financial Statements (contd.) NOTE [17] the beginning of the year 5 Options lapsed prior to bonus 16 Options granted prior to bonus 13,200 25,200 32,250 32,250 59,550 59,550 47,178 47,178 4,27,131 5,26,919 1,76,584 2,57,366 34,91,467 48,44,579 35,747 1,08,685 4,54,865 6,200 3,84,450 Options granted and outstanding at - Options exercised prior to bonus 12,000 41,662 17,700 89,100 29,789 1,47,226 39,708 - 45,035 4,94,210 12,82,697 8 Options outstanding as on July 14, 7 14 1-7-2008 onwards 1-7-2007 onwards Equity share capital (contd.) ii. The details of the grants under the aforesaid schemes under various series are summarized below: LARSEN & TOUBRO Sr. Series reference No. |1 Grant price-() 2 Grant dates 3 Vesting commences on 1-6-2001 2000 2002 (A) 2017-18 2016-17 2017-18 2016-17 2.00* 2.30 2.00* 2.30 1-6-2000 19-4-2002 19-4-2003 2002 (B) 2017-18 2016-17 2.00* 2.30 19-4-2002 19-4-2003 2003 (A) 2003(B) 2006(A) 2017-18 2016-17 2017-18 2016-17 2017-18 2016-17 2017-18 2016-17 7.80* 11.70 7.80* 11.70 267.10* 400.70 267.10* 400.70 23-5-2003 onwards 23-5-2003 onwards 1-9-2006 onwards 23-5-2004 onwards 23-5-2004 onwards 1-9-2007 onwards 2006 - 28,94,772 9 Adjusted options as on July 14, 2017** consequent to bonus issue exercise options average No. of stock Weighted 2016-17 Weighted average options No. of stock 2017-18 The number and weighted average exercise price of stock options are as follows: iii. 3.74 3.48 Nil Nil Nil 4.72 4.98 **Record date: July 14, 2017 Particulars exercise price (*) price (*) 11,47,52,281 12.30 6,11,02,860 6.55 (e) Shares reserved for issue under options outstanding as at the end of the year on un-issued share capital: Particulars As at 31-3-2017 Number of equity shares to be issued as *crore (at face value) 23,900 (B) Options granted pre bonus issue 354.10 57,93,042 347.41 42,47,360 (A) Options granted and outstanding at the beginning of the year *Current year grant restated pursuant to the issue of bonus shares 13,200 Nil Nil 5,73,580 71,600 11 Options granted post bonus issue 4,51,376 2,02,516 49,313 10 Options lapsed post bonus issue 12 Options exercised post bonus issue As at 31-3-2018 Number of equity shares to be issued as fully paid 2,05,321 6,22,567 70,767 89,325 48,375 19,800 408.55 Borrowings non-current [Note 19] - 43,42,684 1,56,962 2,805 9,15,424 Nil Nil Nil Nil contractual life of options (in years) 14 Weighted average remaining 19,86,255 17,44,680 1,76,584 15,63,209 17,46,787 47178 1,30,806 75,692 3,57,086 3,51,439 Options yet to vest 19,800 13,200 48,375 32,250 89,325 59,550 70,767 1,76,584 35,49,464 34,91,467 19,800 13,200 48,375 32,250 89,325 59,550 70,767 47,178 4,87,892 4,27,131 Options vested Of which the end of the year 13 Options granted and outstanding at Nil Security: The debentures are secured by way of a first charge having pari passu rights on the immovable property at certain locations and part of a movable property of a business division, both present and future. 285 19(a) (ii) crore crore crore crore 20.06 Loans repayable on demand from banks [Note 23(b)] Short term loan and advances from banks [Note 23(b)] Commercial paper Total As at 31-3-2017 Secured Unsecured crore Total Particulars 3.86 crore * crore 1.27 As at 31-3-2017 As at 31-3-2018 470.68 As at 31-3-2018 Secured Unsecured 472.87 crore 20.06 3586.68 3683.21 287 23(b) Loans repayable on demand from banks include fund based working capital facilities viz. cash credits and demand loans. The secured portion of loans repayable on demand from banks, short term loans and advances from the banks, working capital facilities and other non-fund based facilities viz. bank guarantees and letter of credit, are secured by hypothecation of inventories and trade receivables. Amount of inventories and trade receivables that are pledged as collateral: 6026.53 crore as at March 31, 2018 (March 31, 2017: 6149.71 crore) 23(a) Loans guaranteed by directors Nil (previous year: * Nil) 2312.50 1872.92 439.58 5.52 96.53 5.52 116.59 Subsidiary companies Loans from related parties: 1640.75 442.71 1424.69 442.71 223.52 223.52 216.06 426.30 426.30 4012.98 4129.57 180.39 171.74 290.29 NOTE [23] Other payables (Deferred income on day one fair valuation of financial instrument) Particulars Other non-current liabilities NOTE [22] Post-retirement medical benefits plan [Note 50(a)] Employee pension scheme [Note 50(a)] Financial Liabilities: Borrowings - current 1256.86 Particulars Provisions - non-current NOTE [21] Due to others Financial guarantee contracts Embedded derivative payables Forward contract payables Particulars LARSEN & TOUBRO As at 31-3-2018 As at 31-3-2017 301.13 crore crore As at 31-3-2017 As at 31-3-2018 88.57 108.64 27.34 5.76 11.83 9.27 22.46 75.79 26.94 17.82 crore crore Notes forming part of the Financial Statements (contd.) NOTE [24] Financial liabilities: Current maturities of long term borrowings Particulars 31097.11 21347.75 28693.26 112.34 2478.45 1787.81 137.97 638.02 4.16 1836.27 24338.32 * crore 399.78 As at 31-3-2017 288 Other payables Advances from customers Due to customers (property development projects) Due to customers (construction related activity) Particulars crore As at 31-3-2018 As at 31-3-2017 crore 1437.03 12640.03 57.88 * crore 4231.98 As at 31-3-2017 crore 5236.21 110.24 14070.34 As at 31-3-2018 1440.25 1870.87 1273.53 1739.62 8.88 6.22 111.23 61.34 crore 46.61 63.69 Other current Liabilities Other financial liabilities - non-current 26(a) Due to others include due to directors ₹49.11 crore (previous year: 55.58 crore). NOTE [27] 767.28 2.92 Micro and small enterprises [Note 57] Due to others Joint venture companies Associate companies Particulars Subsidiary companies Due to related parties: Acceptances NOTE [26] Financial liabilities-current: Trade payables 24(a) Loans guaranteed by directors Nil (previous year * Nil) Finance lease obligation Sales tax deferment loan [Note 19(d)] Term loans from banks [Note 19(c)] Unsecured: Redeemable non-convertible fixed rate debentures [Note 19(a)(i)] Secured: NOTE [25] Other financial liabilities - current Unclaimed dividend Embedded derivative payables crore 478.07 crore As at 31-3-2018 1111.59 936.27 0.50 0.20 1110.89 527.61 0.08 408.58 crore crore As at 31-3-2017 As at 31-3-2018 Particulars Due to others [Note 26(a)] Financial guarantee contracts 1017.61 Unsecured redeemable non-convertible fixed rate debentures (privately placed): NOTE [20] Current maturity of long term borrowings [Note 24] Borrowings non-current [Note 19] Borrowings - non current [Note 19] Redeemable at face value at the end of 5th year from the date of allotment. Redeemable at face value at the end of 10th year from the date of allotment. Terms of repayment for debentures outstanding as at 31.3.2018 8.40% p.a. payable annually 8.80% p.a. payable annually 2179.48 19(a) (iii) Unsecured redeemable non-convertible inflation linked debentures: 2179.85 1042.60 1042.62 September 24, 2015 1000000 5. Interest for the year 2017-18 As at 31.3.2017 crore 216.83 Total As at 31.3.2018 crore 216.89 @ Date of allotment Notes forming part of the Financial Statements (contd.) 0.675% US$ denominated 5 years & 1 day Foreign Currency Convertible Bonds (FCCB) carried at 1245.64 crore as at March 31, 2018 (as at March 2017: 1201.78 crore) represent 1,000 bonds of US$200000 each. The bonds are convertible into the Company's fully paid equity shares of 2 each at a conversion price of 1277.67 per share (Pre bonus conversion price was 1916.50 per share) at the option of the bond holders at any time on and after December 1, 2014 up to October 15, 2019. The bonds are redeemable, subject to fulfillment of certain conditions, in whole but not in part, at the option of the Company, on or at any time after October 22, 2017 but not less than seven business days prior to the maturity date, at the principal amount together with accrued interest (calculated up to but excluding the date of redemption) on the date fixed for redemption, unless the bonds have been previously redeemed, converted or purchased and cancelled. 19(b) Foreign Currency Convertible Bonds: The principal amount has been calculated as [{Average Ref WPI as at reporting period/Average Ref WPI (as at 23/5/2013)} × Face Value] Redeemable at the end of 10th year from the date of allotment. Redemption value calculated as [{Average Ref WPI (on Maturity Date) / Average Ref WPI (on Issue Date)} Face Value] with Floor Rate as 3 % and Cap Rate as 12%. WPI here refers to Wholesale Price Index Terms of repayment for debentures outstanding as on 31.3.2018 1.65% p.a. payable on Inflation Adjusted Principal as on the date of coupon payment Face value per debenture (*) Interest for the year 2017-18 116.96 May 23, 2013 1000000 As at 31.3.2017 crore crore 31-3-2018 As at 113.61@ April 13, 2010 1000000 4. 322.52 322.61 May 26, 2011 1000000 2. 284 Interest for the year 2017-18 3. As at 31.3.2017 crore 273.39 April 10, 2012 1000000 1. Date of allotment Face value per debenture (*) No. Sr. As at 31.3.2018 crore 273.51 1000000 May 11, 2010 324.22 Date of allotment Face value per debenture (*) Sr. No. 19(a) (ii) Unsecured redeemable non-convertible fixed rate debentures (privately placed): (contd.) NOTE [19] Notes forming part of the Financial Statements (contd.) LARSEN & TOUBRO end of 10th year from the date of allotment. Redeemable at face value at the end of 10th year from the date of allotment. Redeemable at face value at the Redeemable at face value at the end of 10th year from the date of allotment. Terms of repayment for debentures outstanding as at 31.3.2018 9.15% p.a. payable annually 8.95% p.a. payable annually 9.75% p.a. payable annually 324.14 NOTE [19] (contd.) 19(c) Details of term loans (unsecured): Foreign currency loans: Sr. No. As at 31-3-2018 Sr. 286 19(d) Sales tax deferment loan (unsecured): Loans guaranteed by directors - Nil (previous year: ₹ Nil) Current maturity of long term borrowings [Note 24] Borrowings non-current [Note 19] 1110.89 3230.58 4341.47 As at 31-3-2018 2480.12 527.61 1952.51 Total Repayable on November 4, 2019 Repayable on October 21, 2019 Repayable on October 19, 2018 Repayable in 6 equal installments payable annually from September 18, 2013 to September 18, 2017 with the final installment due on June 18, 2018 Repaid on September 14, 2017 USD LIBOR + Spread USD LIBOR + Spread USD LIBOR + Spread Less: As at 31-3-2017 No. crore Repayable in 1 annual installments of 0.08 crore ending April 26, 2018 Terms of repayment as at March 31, 2018 0.08 Total 0.08 Less: 0.28 0.08 Total 0.12 2 Interest Free 0.16 0.08 1 Rate of Interest crore 650.83 Notes forming part of the Financial Statements (contd.) 14. 13. 7. 157.56 6. 162.14 5. 129.51 4. 203.87 crore 1288.32 642.97 323.96 3. 2. 1. crore Terms of repayment of term loan outstanding as at 31-03-2018 Rate of Interest As at 31-3-2017 326.21 USD LIBOR + Spread USD LIBOR + Spread USD LIBOR + Spread USD LIBOR + Spread USD LIBOR + Spread USD LIBOR + Spread USD LIBOR + Spread Repaid on August 23, 2017 Repaid on August 23, 2017 Repayment due on July 2, 2018 Repaid on September 27, 2017 Repaid on July 14, 2017 Repaid on September 14, 2017 Repaid on September 14, 2017 162.13 163.36 12. USD LIBOR + Spread Repaid on August 30, 2017 USD LIBOR + Spread 193.22 75.61 38.04 11. 10. USD LIBOR + Spread 549.57 9. Repaid on September 14, 2017 USD LIBOR + Spread 452.61 8. 1301.68 0.20 18186.75 (12.34) LARSEN & TOUBRO As at 31-3-2017 crore crore 153.20 Securities premium account [Note 1(p)] 8318.85 Employee share options (net) [Note 1(r)] Employee share options outstanding 211.51 Deferred employee compensation expense (102.92) 275.26 (98.01) 108.59 177.25 Debenture redemption reserve ^ 8363.02 458.94 (6.36) 153.20 (k) On May 28, 2018, the Board of Directors has recommended the final dividend of 16 per equity share for the year ended March 31, 2018 subject to approval from shareholders. On approval, the total dividend payment based on number of shares outstanding as at March 31, 2018 is expected to be 2242.19 crore and the payment of dividend distribution tax is expected to be 357.60 crore. 282 Notes forming part of the Financial Statements (contd.) NOTE [18] Other equity Particulars Share application money pending allotment Equity component of foreign currency convertible bonds## Capital reserve * Capital reserve on business combination ** As at 31-3-2018 crore crore 3.56 10.52 356.76 General reserve # 25395.78 Λ # Capital reserve: It represents the gains of capital nature which mainly include the excess of value of net assets acquired over consideration paid by the Company for business amalgamation transactions in earlier years. Capital reserve on business combination: It arises on transfer of business between entities under common control. It represents the difference, between the amount recorded as share capital issued plus any additional consideration in the form of cash or other assets and the amount of share capital of the transferor [refer to note 1(ab)]. Debenture redemption reserve (DRR): The Company has issued redeemable non-convertible debentures and created DRR out of the profits of the Company in terms of the Companies (Share capital and Debenture) Rules, 2014 (as amended). The Company is required to maintain a DRR of 25% of the value of debentures issued, either by a public issue or on a private placement basis. The amounts credited to the DRR shall not be utilised by the Company except to redeem the debentures. General reserve: The Company created a General reserve in earlier years pursuant to the provisions of the Companies Act, 1956 wherein certain percentage of profits were required to be transferred to General Reserve before declaring dividends. As per Companies Act 2013, the requirements to transfer profits to General Reserve is not mandatory. General reserve is a free reserve available to the Company. ## Equity component of foreign currency convertible bonds: Pursuant to Ind AS 32, Foreign Currency Convertible Bonds (FCCB) issued by the Company are split into equity and liability component and presented under other equity and financial liabilities respectively. 283 Notes forming part of the Financial Statements (contd.) NOTE [19] Financial Liabilities: Borrowings - non-current Particulars Secured As at 31-3-2018 Unsecured 20853.82 ** * 45826.15 48893.98 25373.60 Retained earnings Foreign currency translation reserve [Note 1(s)(iii)] Hedging reserve [Note 1(m)] 14250.01 (0.37) 11225.53 0.55 14 per equity share for the year ended 317.93 crore. Cash flow hedging reserve 156.91 Cost of hedging reserve (12.80) Debt instruments through Other Comprehensive Income [Note 1(m)] 102.16 54.93 144.11 65.78 114.50 (j) During the year ended March 31, 2018, the Company paid the final dividend of March 31, 2017 amounting to 1960.76 crore and dividend distribution tax of 10.52 The balance in share options (net) account as at March 31, 2018 is ₹ 108.59 crore (previous year: 177.25 crore), including 76.12 crore (previous year: 117.36 crore) for which the options have been vested to employees as at March 31, 2018. (i) Capital management: 6,45,180 238.32 (H) Options allotted post bonus issue 10,75,191 229.25 (1) Options lapsed post bonus issue 7,03,205 248.92 (J) Options granted and outstanding at the end of the year (K) Options exercisable at the end of the year out of (J) supra 42,65,623 223.35 42,47,360 19,22,282 218.19 21,51,241 (G) Options granted post bonus issue 347.41 359.04 226.07 (F) Adjusted options consequent to bonus issue 4,73,550 327.51 (C) Options allotted pre bonus issue 5,63,707 380.14 14,86,958 358.97 (D) Options lapsed pre bonus issue 1,08,685 400.70 5,32,274 370.25 The Company continues its policy of a conservative capital structure which has ensured that it retains the highest credit rating even amidst an adverse economic environment. Low gearing levels also equip the Company with the ability to navigate business stresses on one hand and raise growth capital on the other. This policy also provides flexibility of fund raising options for future, which is especially important in times of global economic volatility. The gross debt equity ratio is 0.21:1 as at March 31, 2018 (as at March 31, 2017 0.23:1). 35,98,868 339.12 53,98,839 281 (E) Options granted and outstanding prior to bonus issue NOTE [17] (C) Weighted average expected volatility (D) Weighted average expected dividends over the life of the option (E) Weighted average share price (F) Weighted average exercise price (G) Method used to determine expected volatility 2017-18 6.83% 4.17 years 27.92% (B) Weighted average expected life of options 58.37 per option 2016-17 6.72% 4.08 years 30.79% 74.52 per option 1355.66 per option 327.51 per share Expected volatility is based on the historical volatility of the Company's share price applicable to the total expected life of each option. Notes forming part of the Financial Statements (contd.) 1178.47 per option (A) Weighted average risk-free interest rate 229.73 per share No. Equity share capital (contd.) Particulars iv. V. vi. A. B. In respect of stock options granted pursuant to the Company's stock options schemes, the fair value of the options is treated as discount and accounted as employee compensation over the vesting period. Weighted average share price at the date of exercise for stock options exercised during the year is 1106.67 (previous year: 1386.19) per share. During the year, the Company has recovered 7.16 crore (previous year: 13.81 crore) from its subsidiary companies towards the stock options granted to their employees, pursuant to the Employee Stock Option Schemes. vii. Weighted average fair values of options granted during the year is 965.25 (previous year: 1056.73) per option Sr. viii. The fair value has been calculated using the Black-Scholes Option Pricing Model and the significant assumptions and inputs to estimate the fair value of options granted during the year are as follows: Expense on Employee Stock Option Schemes debited to the Statement of Profit and Loss during 2017-18 is 68.98 crore (previous year: 60.35 crore) net of recoveries of 0.79 crore (previous year: ₹ 1.42 crore) from its group companies towards the stock options granted to deputed employees, pursuant to the employee stock option schemes (Note 34). The entire amount pertains to equity-settled employee share-based payment plans. ix. Y 10 9 Y Y Y Y Y 10 Y 22 Y ers' grievances related to the policy/ policies? Has the company carried out in- Y Y Y Y Y Y Y Y Y Does the Company have a grievance redressal mechanism related to the policy/policies to address stakehold- Y 60 Does the company have in-house structure to implement the policy/ policies? Y Y Y Y Y Y Y Yes. Indicate the link for the policy to be viewed online? www.Lntsustainability.com 7 Has the policy been formally commu- nicated to all relevant internal and Y Y Y Y Y Y Y ➤ external stakeholders? 8 Y Y Continue to ensure good governance, ethics and transparency ➤ Not Applicable next 1 year 6. Any other reason (please specify) Not Applicable 3. Governance related to BR (a) Indicate the frequency with which the Board of Directors, Committee of the Board or CEO to assess the BR performance of the Company. Within 3 months, 3-6 months, Annually, More than 1 year Annually (b) Does the Company publish a BR or a Sustainability Report? What is the hyperlink for viewing this report? How frequently it is published? Yes, the Company has been publishing its Sustainability Report annually as per the Global Reporting Initiative (GRI) framework since 2008. The sustainability reports are externally assured. We are following GRI Standard and 2017 report was 'In Accordance – Comprehensive' report. The reports can be accessed at www.Lntsustainability.com and sustainabilityreport. Larsentoubro.com 23 SECTION E PRINCIPLE 1: BUSINESSES SHOULD CONDUCT AND GOVERN THEMSELVES WITH ETHICS, TRANSPARENCY AND ACCOUNTABILITY L&T's rich legacy of a transparent and just governance system, disclosure practices and integrity are the bedrock of the Company's business philosophy. Larsen & Toubro is a professionally managed Indian multinational with a focus on enhancing stakeholder's value through committed customer satisfaction. The vision and corporate polices of the company are extended to all subsidiaries and associate companies. L&T has adopted the Code of Conduct (CoC) for employees, including board members, to remain consistently vigilant and ensure ethical conduct of its operations. All employees are required to comply with the CoC and are required to provide an annual declaration of their adherence to it. This enhances the understanding of CoC amongst employees as well as infuses in them a sense of ownership for their actions. Employees and relevant stakeholders are trained and otherwise made aware of the CoC as well as amendments to it. The CEO & MD makes an annual declaration to the shareholders regarding the senior management's compliance with the CoC. It is available on the Company's website - www.Larsentoubro.com. All new joinees are made aware of the CoC as a part of their induction program. An online mode is also available on L&T's 'Any Time Learning' application. The key aspects of the CoC are covered in L&T's HR orientation training modules SWAGAT and PRAYAG for Graduate Engineer Trainee (GETS) / Post Graduate Engineer Trainee (PGET). - An Apex Committee is responsible for ensuring implementation of the CoC across the Company. The Committee handles non-compliance instances as well as guides the unit-level CoC committee. The Apex committee also acts, interacts and coordinates with the Executive Committee (E Com) on all issues pertaining to the CoC. The Apex Committee comprises a minimum of five senior members. The Compliance Officer also acts as the Ex-Officio of the Apex Committee. Sustainability Policy At Larsen & Toubro, we are committed to fulfilling our economic, environmental and social responsibilities while conducting business. We will conserve natural resources and enhance social equity to achieve sustainable growth while serving all our stakeholders Towards this we shall, Y Incorporate environmental and social considerations in our business operations It is planned to be done within the Y 5. Not Applicable > LARSEN & TOUBRO 2b. If answer to S. No. 1 against any principle, is 'No', please explain why: (Tick up to 2 options) Not Applicable S. No 1 Questions The company has not understood the P1 P2 P3 P4 P5 P6 P7 P8 P9 Not Applicable Principles 2. The company is not at a stage where it finds itself in a position to formu- Not Applicable late and implement the policies on specified principles 3. The company does not have financial Not Applicable or manpower resources available for the task 4. It is planned to be done within next 6 months Does the company have a specified committee of the Board/ Director/Of- ficial to oversee the implementation of the policy? P5 Y P1 P2 P3 P4 Reduce adverse impact of climate change, augment energy efficiency and promote renewable energy usage P6 P7 P8 P9 Do you have a policy/policies for Y Y Y Y Y Y Y Y Y 2 Has the policy being formulated in consultation with the relevant stake- holders? Questions Y S. No P7 - Businesses, when engaged in influencing public and regulatory policy, should do so in a responsible manner P8 - Businesses should support inclusive growth and equitable development 1 DIN Number (If applicable) 2 Name 3 Designation 4 Telephone Number 5 Email ID Details Not Applicable Major General Gautam Kar (Retd.) Head Corporate Infrastructure & Administrative Services +91-22-67052447 Sustainability-ehs@Larsentoubro.com 2a. Principle-wise (as per NVGs) BR Policy/policies (Reply in Y/N) Name of principles: P1 - Businesses should conduct and govern themselves with Ethics, Transparency and Accountability P2 - Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle P3 - Businesses should promote the well-being of all employees P4 - Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalized P5 - Businesses should respect and promote human rights P6 - Businesses should respect, protect, and make efforts to restore the environment P9 - Businesses should engage with and provide value to their customers and consumers in a responsible manner 5. Y Y SECTION A: GENERAL INFORMATION ABOUT THE COMPANY 1. Corporate Identity Number (CIN) of the Company: L99999MH1946PLC004768 2. Name of the Company: Larsen & Toubro Limited 3. Registered address: L&T House, Ballard Estate, Mumbai, 400 001, India 4. Website: www.Larsentoubro.com 5. E-mail id: sustainability-ehs@Larsentoubro.com P4 P5 55 P6 P7 44 P8 P9 99 Y Y Y Y Y Y Y Y The Sustainability Reports are accessible at www.Lntsustainability.com Y In accordance with regulations 34(2) (f) of the Securities Exchange Board of India (SEBI) (Listing Obligation and Disclosure Requirements) Regulations 2015, this Business Responsibility Report (BRR) has been prepared and is in alignment with the National Voluntary Guidelines on Social, Environmental & Economic Responsibilities of Business (NVG - SEE) released by Ministry of Corporate Affairs, Government of India. This BRR provides an overview of the activities carried out by L&T against the nine principles outlined in the NVG. After 10 years of Sustainability Reporting in the public domain, disclosures on sustainability parameters will now be made in the form of an Integrated Report (. The IR will be in accordance with the Global Reporting Initiative (GRI) Standard 'Comprehensive' option. It will cover the environment, economic and social performance of the Company and will be externally assured. ANNUAL BUSINESS RESPONSIBILITY REPORT 2017-18 Y Y Y Y Y 3 Does the policy conform to any na- tional /international standards? If yes, specify? (50 words) Yes. The policies are aligned with the principles of NVG guidelines and conform to international standards of ISO 9001, ISO 14001, OHSAS 18001 and ILO principles. 21 S. No 4. Questions Has the policy being approved by the Board? Yes. P1 P2 P3 If yes, has it been signed by MD/own- er/CEO/appropriate Board Director? Signed by the Group Chairman 4 Larsen & Toubro believes that sound sustainability practices are important for retaining and enhancing investors' and stakeholders' trust in the organization. L&T always ensures that natural resources utilized by the Company are managed in an efficient way, and maintains a good relationship with the communities around its facilities. As a part of its Sustainability Roadmap 2021, L&T has embraced a digital culture to improve its triple bottom-line performance. Foster a culture of trust and caring to enhance safety and well-being of employees Yes. The suppliers are critical to the organization's operation and supply chain sustainability issues can impact its operations. The Company promotes BR initiatives in its value chain. At present, less than 30% of its suppliers/distributors participate in BR initiatives. in our engagements with stakeholders, and advocate responsible business practices 2. Total Turnover (INR): 74611.65 crore 1. Paid up Capital (INR): 280.27 crore SECTION B: FINANCIAL DETAILS OF THE COMPANY 10. Markets served by the Company - Local/State/National/International/: All ii. Number of National Locations: 100 i. Number of International Locations : 35 3. Total profit after taxes (INR): 5387.30 crore 9. Total number of locations where business activity is undertaken by the Company 2. Manufacturing and trading activity. 1. Construction and project related activity. b) Details of the BR head 19 Construction and maintenance of airfield runways Construction and maintenance of railways and rail-bridges. 3. Engineering services. 4. Total Spending on Corporate Social Responsibility (CSR) as percentage of Profit After Tax (%): 1.87% As per the Section 135 of The Companies Act 2013, the CSR spend is 2.07% of average Net Profit of the previous three financial years 5. List of activities in which expenditure in 4 above has been incurred: Our focus areas in Corporate Social Responsibility are as follows: 3. then Do the Subsidiary Company / Companies participate in the BR Initiatives of the parent company? If yes, indicate the number of such subsidiary company(s): 2. Yes Does the Company have any Subsidiary Company / Companies? 1. SECTION C: OTHER DETAILS Skill Building iv. iii. Water & Sanitation Education ii. Health i. Architectural and engineering activities and related technical consultancy. Manufacture of weapons and ammunition Real estate activities with own or leased property. Construction / erection and maintenance of power, telecommunication and transmission lines. Construction and maintenance of industrial facilities such as refineries, chemical plants, etc. Wholesale construction and civil engineering machinery and equipment. 30112 30114 28246 2824 282 2710 271 Group Class Construction of buildings carried out on own-account basis or on a fee or contract basis. Construction and maintenance of motorways, streets, roads, other vehicular and pedestrian ways, highways, bridges, tunnels and subways. Construction of floating or submersible drilling platforms. Building of warships and scientific investigation ships, etc. Manufacture of parts and accessories for machinery / equipment used by construction and mining industries. Manufacture of electric motors, generators, transformers and electricity distribution and control apparatus Sub-Class Description 7. Sector(s) that the Company is engaged in (industrial activity code-wise): 6. Financial Year reported: 1st April 2017 - 31st March 2018 410 Yes. The Business Responsibility (BR) initiatives of the Company are extended to the Subsidiary/Associate Companies and they are also encouraged to participate in BR Initiatives of the parent organization. In addition, companies like L&T Finance Holdings, Larsen & Toubro Infotech, L&T Technology Services (listed entities) will have their separate BR Report (BRR) as a part of their Annual Reports. L&T Hydrocarbon Engineering and other subsidiary companies participate in our BR initiatives. 4100 41001 4210 42101 7110 71100 711 2520 252 6810 68100 681 4659 46594 465 42202 42901 Construction and maintenance of power plants 4220 42201 422 4210 42103 421 42102 421 Do any other entity/entities (e.g. suppliers, distributors etc.) that the Company does business with; participate in the BR initiatives of the Company? If yes, then indicate the percentage of such entity/entities? [Less than 30%, 30-60%, More than 60%]: 8. List three key products/services that the Company manufactures/provides (as in The Balance Sheet) 20 At our own campuses, we have 17 certified Green buildings including one green factory. Our 24 campuses have adopted the zero-wastewater discharge approach and continue to ensure water positive status. Energy efficiency programs and climate change mitigation From world-class airports to metro systems, L&T's sustainable infrastructure helps people travel with ease 25 measures are extensively implemented across L&T, contributing towards greener campuses and project sites. Renewable energy is harnessed at campuses and project sites as well. Our green product and services portfolio consists of metro rail projects, efficient power transmission and distribution systems, small hydro-electric power stations, solar-PV-based power plants, green buildings, energy efficient equipment (power management systems, AC drives, smart metering), water treatment & distribution infrastructure, supercritical and ultra-supercritical thermal power plants and equipment and coal gasifiers. Our green portfolio is focused on minimising environmental impact, e.g. reduced water consumption, carbon emissions and material consumption and reduced waste-generation. These help our clients to move on the low-carbon economy path. The Company extensively participates in the 'Make in India' programme and promotes local sourcing of products and services. The transportation of material at the project sites is optimized based on the project execution stage. Many of our infrastructure projects are at remote locations, and therefore goods and services are procured from local producers and surrounding areas as far as possible. L&T has adopted the 3R (Reduce, Recycle & Recover) principle for material conservation. Material recycling and use of alternative material (in place of natural material) is extensively practiced by our infrastructure business. The Sustainability Roadmap 2021 targets increasing recycling / use of recycled material by 5%. A training programme in progress at L&T's Project Management Institute at Vadodara Fly ash substitutes cement, crushed sand is used in place of natural sand, and blast furnace slag is used. These are some of the conservation methods extensively practiced at project sites. However, since most of our products are 'engineered to order' and based on customer-specific requirement, the use of recycled material for products is limited. PRINCIPLE 3: BUSINESS SHOULD PROMOTE WELL-BEING OF EMPLOYEES The Company's growth truly depends upon the growth of employees within the organization. The commitment of employees, their enthusiasm and dedication helps L&T to become a truly global conglomerate. The Company nurtures its talent through its leadership program, training, motivation and rewarding performance. The Corporate Human Resources Policy has set up a strong framework for workforce management. Fostering a culture of caring and trust are other corporate policies like the Environment, Health & Safety (EHS) Policy, Whistle-Blower policy, Protection of Women's Rights at Workplace and the CoC. L&T does not discriminate against employees based on caste, religion, region, gender or physical disability and merit of candidates is always accorded top priority for selection and promotion. L&T adheres to be UNGC (United Nation Global Compact) principles which includes Human Rights clauses. These causes are part of our contracts with suppliers, partners, NGOs and extended across our supply chain. 26 LARSEN & TOUBRO L&T offers conservation-based products and projects, such as Green Buildings, wastewater treatment and recycling plants and solar-PV-based power plants. These help our clients prevent pollution and conserve resources. The Company recognizes the employees' right to form unions and associations affiliated with trade unions at it manufacturing campuses 6.78% of permanent employees are covered under the unionized employee category. L&T has provided direct employment to 104 Persons With Disabilities (PWDs) and the supply chain has employed 43 Persons With Disabilities. In 2017-18, no complaint was registered in respect of child labour, forced/involuntary labour or about sexual harassment at the workplace. L&T ensures that environment, health and safety aspects are taken into consideration at the design stage itself, while manufacturing products or providing services to customers. It is our endeavour to provide safe and sustainable goods and services to our clients. Our business portfolio consists of infrastructure, energy (oil & gas/power), defence, heavy engineering, electrical & automation products, hydrocarbon projects, IT, technological services and financial services. Sustainability aspects, including lower emissions and resource conservation, are integrated into our engineering and design. The Company also provides training to customers and customers' personnel in the safe use and handling of products. The Company also ensures compliance by its vendors and contractors through periodical assessment, quality inspection and EHS audits. Partner with communities towards social interventions in the identified thrust areas •Adopt sustainable and resource efficient processes and provide value added products and services 20 November 2014 Particulars dunl AM NAIK Codified policies publicly affirm the organisation's commitment, govern actions and provide clarity of direction The unit-level CoC Committee comprises four members from HR, Operations and Accounts, and is supervised by the Unit Head. This Committee meets at least once a quarter. The role of the Unit Committee is to create awareness amongst employees, motivate them to adhere to the CoC, monitor the compliance, investigate instances of non-compliance and report to the Apex body. Good corporate governance practices are imbibed by the employees and have become a way of life. It ultimately enhances the brand value of Larsen & Toubro. A vigilance mechanism is in place for directors and employees to report their concerns about actual or suspected fraud, unethical behaviour or violation of the Company's CoC. This is ensured through the Whistle-Blower policy - an effective tool available for employees to report, without fear, instances related to non-compliance, any wrong practice, unethical behaviour 24 LARSEN & TOUBRO or improper practice which may have an adverse impact on the Company or cause financial loss to the Company. The Whistle-Blower Investigation Committee and the management maintain anonymity of the whistle-blower at all times. During 2017-18, a total of 32 complaints were received, 75% of these were investigated and dealt with in accordance with the Company's protocol and 25% are under review. Details relating to stakeholder complaints are included in the Director's Report Section of this Annual Report. There is a Combined CoC for suppliers which covers specific aspects of environmental management and compliance, labour practices, human rights, freedom of association and collective bargaining, prohibition of child labour, prohibition of forced and compulsory labour, impact on society, ethics, transparency and business processes. Every new supplier / vendor must sign this CoC before doing any business with L&T. Since 2016, more than 18,000 suppliers have signed this Combined CoC. Capacity-building programmes for vendors and sub- contractors are conducted by the company and the programme provides training on EHS, business process improvement and sustainability. PRINCIPLE 2: BUSINESSES SHOULD PROVIDE GOODS AND SERVICES THAT ARE SAFE AND CONTRIBUTE TO SUSTAINABILITY THROUGHOUT THEIR LIFE-CYCLE Total Workforce LARSEN & TOUBRO Refer "Standalone financials - 10- year Highlights" section of Annual Report L&T maps both internal and external stakeholders along with vulnerable, marginalized and disadvantaged stakeholders. This enables us to understand that our stakeholders comprise a large and mixed community with varied and extended expectations, and L&T always strives to match their expectations. L&T engages regularly with stakeholders through various programmes as they are a central part of L&T's decision-making process. Being a professionally managed organization, our constant quest is to create value for all stakeholders and at the same time, serve the wider interests of society. Our dedicated Corporate Brand Management & Communication (CBMC) department facilitates the continuous dialogue between stakeholders and the Company. L&T is a pioneer in providing an anti-depression help-line for its employees in India in collaboration with Tata Institute of Social Science (TISS). Our Corporate Social Responsibility (CSR) department runs specific programmes focused on providing livelihood opportunities to vulnerable and marginalized stakeholders, both near and away from our campuses and project sites to ensure that the benefits reach the maximum number of beneficiaries. One of our flagship CSR programmes is 'Integrated Community Development (ICD)' which focuses on improving the quality of life of communities living in the 'water-stressed' regions of India. The ICD programme works towards providing access to clean drinking water, sanitation facilities and water for agriculture in water- stressed regions. It is followed up with CSR interventions in health, education and skill-building. 28 Designation: Member - Executive Committee, Senior Vice President & Head - Electrical & Automation (Formerly Head - Corporate Centre) • • Name: Dr. Hasit Joshipura • DIN Number: 00274288 a) Details of the Director/Director responsible for implementation of the BR policy/policies 1. Details of Director/Directors responsible for BR SECTION D: BR INFORMATION LARSEN & TOUBRO L&T employees Our responsibility to stakeholders is reflected in the way we do our business. The contribution of shareholders and investors to the growth of the Company is deeply valued, and we work hard to ensure that we deliver positive returns to the shareholders. PRINCIPLE 4: BUSINESS SHOULD RESPECT THE INTERESTS OF AND BE RESPONSIVE TOWARDS ALL STAKEHOLDERS, ESPECIALLY THOSE WHO ARE DISADVANTAGED, VULNERABLE AND MARGINALIZED. S. No Regular safety training is undertaken, including Tool Box Talks, emergency mock drills and specific safety interventions. New employees are introduced to the aspects of safety and all contract workmen receive mandatory safety training before commencement of work. L&T is the first corporate organization in India to be accredited as 'Course Provider' by National Examination Board in Occupational Safety & Health (NEBOSH), United Kingdom (UK) for delivering International General Certificate and by Institution of Occupational Safety & Health (IOSH), UK for delivering their course. More than 3.8 million man-hours of safety training were provided in FY 2017-18 to our workforce. Our wellness program 'Working on Wellness' is a unique initiative undertaken by Corporate Health and Welfare Department, which conducts counselling, awareness sessions, health programs, diagnostics camps and health workshop activities aimed at enhance employees' wellness and well-being at office. These health interventions are grouped into six critical areas like, cancer, diabetes, cardiac disease, obesity, ergonomic issues and stress. permanent women employees Average number of contract workmen 264,589 Training and skill-building are the pillars which support L&T's skill development agenda. Regular training and exposure to the challenges of the future are vital parts of an employee's career progress. L&T trains employees in new skills in emerging fields in addition to continual training on functional and behavioural areas. Employees are given opportunities for higher education through sponsorship in reputed colleges and by way of corporate tie-ups. 2248 - It aims to create a safer work environment for our employees, contractors and customers through rigorous systems, procedures and firm implementation. This is also extended to our supply chain partners as well. Our Corporate Environment, Health & Safety (EHS) policy articulates our commitment towards building a safe workplace and defines protocols to be followed by each business across India and abroad. The safety performance of the Company is reviewed on a quarterly basis by the Company's Board. Aerial view of L&T's 22-acre Leadership Development Academy at Lonavala 27 Number of Safety of the workforce is given top-most priority in all activities across facilities and project sites. Every task, job or assignment must be performed in a safe manner only. This is the basis of our work execution. We have a structured approach towards safety, with assigned individual objectives. Management commitment to safety is demonstrated through our approach and is visible while taking business decisions. Our focus area is effective implementation of health and safety practices in line with our 'Zero Accident Vision'. The Leadership Development Academy (LDA) at Lonavala has been identified as a unique corporate university in India. It is a symbol of value for L&T as it helps people develop and grow by providing the right infrastructure, ambience and services to aid and enhance learning. The LDA has been recognized as a 'Research Centre' by Symbiosis International University. It enables employees to pursue their Ph. D. programmes. In addition, various functional, technical and managerial training programmes are provided to employees through technical training centres from Mumbai (Madh and Mahape), Mysore and Project Management Institutes (Vadodara and Chennai). L&T's e-learning portal – Any Time Learning (ATL) - is available for employees anytime and at any place. The training modules are diverse. They are prepared by subject experts and culled from various knowledge sources. ATL courses are interactive, engaging and user-friendly. This year, ATLNext, a learning process automation and analytical platform, has been introduced. This intelligent and adaptive learning platform makes learning personal and compelling. 9302.12 16 31597.81 104.80 992.34 2213.12 3441.78 3441.78 15 1905.80 5.04 1900.76 (b) Current liabilities expected to be settled within twelve months and after twelve months from the reporting date: 2317.92 24454.24 991.92 14 19921.95 392.76 19529.19 7533.01 525.78 23928.46 11 Other current assets Other financial assets Loans Trade receivables 1762.86 0.42 39130.82 Other financial liabilities 33285.14 1092.99 128.45 964.54 1440.25 18186.75 28.10 6134.55 1412.15 12052.20 24338.32 1251.69 Total As at 31-3-2017 After twelve months Within twelve months 23086.63 31097.11 1870.87 20853.82 1102.22 Total After twelve months 649.45 19.65 4662.37 110.69 991.53 27 1851.22 26 30447.66 25 2228 Provisions Other current liabilities Trade payables months Note Within twelve Particulars As at 31-3-2018 crore 23983.02 16191.45 and operating NOTE [44] L&T Special Steels & Heavy Forgings Private Limited D L&T Shipbuilding Limited C L&T Realty Limited B E 341.20 A Loans and advances in the nature of loans given to subsidiaries: Maximum outstanding during 2016-17 2017-18 31-3-2017 31-3-2018 L&T Seawoods Private Limited PNG Tollway Limited 76.75 225.50 1379.11 18.20 16.56 512.00 1167.21 18.20 1576.88 7.00 594.29 Nabha Power Limited L&T Construction Equipment Limited 2.23 L&T Hydrocarbon Engineering Limited H G 16.00 EWAC Alloys Limited [Note 46(A)] F 18.20 1167.22 397.41 2651.87 998.12 1401.86 18.20 133.10 No. Name of the company Balance as at Sr. 521.62 382.18 533.08 229.90 303.18 15.63 9.53 6.10 23.56 280.10 1039.91 759.81 912.85 51.55 417.97 366.42 229.51 644.76 903.80 0.31 42.91 1789.97 NOTE [36] Interest expenses crore Particulars in respect of loans and advances in the nature of loans to related parties as required by the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015: 1316.91 1432.23 64.69 0.56 3.59 12.93 1251.66 1415.71 2016-17 crore 2017-18 crore NOTE [37] Exchange loss (attributable to finance costs) Particulars Other borrowing costs Finance costs months 137.28 511.74 1827.99 300.08 Towards capital contribution (a) L&T Uttaranchal Hydropower Limited 1576.88 3293.09 2300.85 594.29 Project funding 19.45 2.23 7.00 Working capital 18.20 18.20 Project funding Subsidiary Companies: Working capital (b) L&T Metro Rail (Hyderabad) Private Limited Towards capital contribution 6.35 Disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": Market risk management (a) Foreign exchange rate and interest rate risk: The Company regularly reviews its foreign exchange forward and option positions and interest rate swaps, both on a standalone basis and in conjunction with its underlying foreign currency and interest rate related exposures. The Company follows cash flow hedge accounting for Highly Probable Forecasted Exposures (HPFE) hence the movement in mark to market (MTM) of the hedge contracts undertaken for such exposures is likely to be offset by contra movements in the underlying exposures values. However, till the point of time that the HPFE becomes an on-Balance Sheet exposure, the changes in MTM of the hedge contracts will impact the Balance Sheet of the Company. Further, given the effective horizons of the Company's risk management activities which coincide with the durations of the projects under execution and could extend across 3-4 years and the business uncertainties associated with the timing and estimation of the project exposures, the recognition of the gains and losses related to these instruments may not always coincide with the timing of gains and losses related to the underlying economic exposures and, therefore, may affect the Company's financial condition and operating results. Hence, the Company monitors the potential risk arising out of the market factors like exchange rates, interest rates, price of traded investment products etc., on a regular basis. For on-Balance Sheet exposures, the Company monitors the risks on net unhedged exposures. 298 (c) L&T-MHPS Turbine Generators Private Limited 120.61 60.60 (b) L&T-MHPS Boilers Private Limited 44.64 16.88 (a) L&T Aviation Services Private Limited Subsidiary Companies: (C) Guarantees: 6.35 19.45 Total (B) Other Advances: Total (g) Nabha Power Limited (f) L&T Hydrocarbon Engineering Limited 2017-18 crore Disclosure pursuant to section 186 of the Companies Act 2013: NOTE [38] Subsidiary classification is in accordance with the Companies Act, 2013. Loans to employees (including directors) under various schemes of the Company (such as housing loan, furniture loan, education loan, etc.) have been considered to be outside the purview of disclosure requirements. Above figures include interest accrued. Notes: Particulars in respect of loans and advances in the nature of loans to related parties as required by the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015: (contd.) NOTE [37] Notes forming part of the Financial Statements (contd.) LARSEN & TOUBRO 294 3293.09 2300.85 2016-17 L&T-MHPS Turbine Generators Private Limited Total security is proposed to be utilised by the recipient (A) Loan and advances: (e) L&T Construction Equipment Limited (d) PNG Tollway Limited 1167.22 1379.11 Working capital and project funding (c) L&T Special Steels & Heavy Forgings Private Limited 512.00 225.50 Working capital (b) L&T Shipbuilding Limited 16.56 76.75 Project funding (a) L&T Realty Limited Subsidiary companies: Sr. Nature of the transaction (loans given/investment made/guarantee Purpose for which the loan/guarantee/ No. given/security provided) 1625.58 After twelve months 819.66 Total Construction materials consumed Purchase of stock-in-trade Stores, spares and tools consumed expenses Changes in inventories of finished goods, work-in-progress, stock-in-trade and property development: Closing stock: Finished goods Excise duty Stock -in-trade Less: Opening stock: 2017-18 2016-17 crore crore crore crore 8167.57 Work-in-progress Less: Scrap sales Raw materials and components Materials consumed: 3228.67 1065.10 (2233.22) (72.44) (125.74) (56.89) 60.18 23.70 62.75 70.78 395.29 345.40 1884.82 1914.96 291 Notes forming part of the Financial Statements (contd.) NOTE [33] Manufacturing,construction and operating expenses Particulars 75.03 659.63 7444.84 74.27 7370.57 159.77 Work-in-progress 3052.84 3246.01 3444.04 3567.46 (962.36) 131.59 169.68 Other manufacturing, construction and operating expenses: (48.37) Power and fuel 951.61 Royalty and technical know-how fees 15.49 16.30 1041.49 15.75 Packing and forwarding Excise duty on stock Stock-in-trade 161.68 221.52 149.10 577.49 22237.57 18493.31 1296.62 1390.84 1815.21 1446.67 19620.99 16775.01 154.24 221.52 200.15 169.68 4052.01 3044.67 4406.40 3435.87 Finished goods 8092.54 363.01 2693.08 535.59 5730.98 Property development activity [Note 48(b)(i)] 96.68 403.18 Engineering and service fees 18.74 24.73 Servicing 5575.56 Commission 597.88 159.80 140.81 73495.49 65396.00 Other operational income: 290 Income from hire of plant and equipment 666.64 58498.42 66978.07 Construction and project related activity [Note 48(a)(i)] Manufacturing and trading activity (ii) Estimated amount of contracts remaining to be executed on Investment Property 0.01 (iii) Estimated amount of contracts remaining to be executed on Intangible assets under development 0.05 675.13 533.49 (b) Funding committed by way of equity/loans to subsidiary/joint venture companies 715.45 1063.20 NOTE [31] Revenue from operations Sales and service: Particulars 2017-18 2016-17 crore crore crore crore 122.03 405.47 Lease rentals Income from services to Group companies Net gain/(loss) on sale or fair valuation of investments Net gain/loss on derivatives at fair value through profit or loss Net gain/(loss) on sale of property, plant and equipment Lease rentals Miscellaneous income (net of expenses) LARSEN & TOUBRO 2017-18 2016-17 Others crore crore crore 209.59 325.62 287.30 213.69 496.89 539.31 crore Subsidiary companies Dividend income: Others 326.71 Premium earned (net) on related forward exchange contracts 36.02 Miscellaneous Income 557.32 1116.16 74611.65 80.28 67.79 207.61 48.45 501.22 905.35 66301.35 Notes forming part of the Financial Statements (contd.) NOTE [32] Other income Particulars Interest income: Subsidiary and associate companies 74.08 340.15 Hire charges - plant and equipment and others 1198.37 18.51 228.33 0.77 9.53 229.90 0.82 101.63 104.84 280.10 67.92 38.18 38.40 22.47 27.27 5.68 4.88 Bank charges 83.56 61.02 304.71 51.55 54.56 4.88 5.33 Distributors and agents Insurance Rent Rates and taxes Travelling and conveyance Repairs to buildings General repairs and maintenance Directors' fees Telephone, postage and telegrams Advertising and publicity Stationery and printing Commission: Others 34.48 31.96 244.28 229.51 57.35 241.35 Miscellaneous expenses 521.62 NOTE [35] (contd.) 35(a) Aggregation of expenses disclosed vide Note 33 - Manufacturing, construction and operating expenses, Note 34 - Employee benefits expense and Note 35 - Sales, administration and other expenses. crore Sr. Nature of expenses Note 33 - No. Manufacturing, Notes forming part of the Financial Statements (contd.) Employee Total construction benefits and other Note 33 - Manufacturing, construction 2016-17 Note 34 Note 35 -Sales, Employee administration Total benefits 2017-18 Note 34 Note 35 -Sales, administration 293 2671.00 2836.27 Bad debts and advances written off 375.33 87.48 Less: Allowance for doubtful debts and advances written back 354.97 45.05 20.36 42.43 Allowance for doubtful debts and advances (net) 745.17 395.29 Provision/(reversal) for foreseeable losses on construction contracts Exchange (gain)/loss (net) 20.18 (5.93) (148.60) (10.72) Other provisions [Note 54(a)] 32.12 204.19 536.80 265.31 91.05 96.75 5.05 6.10 336.96 303.18 181.91 151.15 973.80 382.18 56.31 6388.59 58638.26 52003.47 292 Notes forming part of the Financial Statements (contd.) NOTE [34] Employee benefits expense Particulars Salaries, wages and bonus 5817.99 52.42 759.81 608.14 1015.13 Engineering, technical and consultancy fees 763.52 761.70 Insurance Rent Rates and taxes Travelling and conveyance Repairs to plant and equipment Repairs to buildings General repairs and maintenance Bank guarantee charges Miscellaneous expenses 188.96 187.07 422.83 415.25 374.89 366.42 Contribution to and provision for: Provident funds and pension fund Superannuation/employee pension schemes Gratuity funds [Note 50(b)] 78.08 603.36 (319.09) 5713.59 600.98 (343.55) 5147.38 2017-18 2016-17 Particulars crore crore crore crore Power and fuel 58.22 59.26 Packing and forwarding Professional fees Audit fees [Note 55] 83.35 533.49 61.77 195.31 Expenses on employees stock option schemes [Note 17(v)(B)] Insurance expenses - medical and others Staff welfare expenses Recoveries on account of deputation NOTE [35] Sales, administration and other expenses LARSEN & TOUBRO 2017-18 2016-17 crore crore 5070.64 crore crore 4554.79 119.90 13.16 114.67 13.34 72.50 67.30 205.56 69.77 2500.04 675.07 crore The company has given a building under non-cancellable operating lease, the future minimum lease payment receivable in respect of which are as follows: Operating leases: (i) (a) Where the Company is a lessor Disclosure pursuant to Ind AS 17 "Leases" NOTE [41] Notes forming part of the Financial Statements (contd.) LARSEN & TOUBRO Sr. 296 (c) (b) on intangible assets being expenditure on new product development of 48.08 crore (previous year: 43.01 crore) [Note 1(i)(ii)]; and on other intangible assets of 1.84 crore (previous year: 1.09 crore). (a) on tangible assets of 6.22 crore (previous year: * 9.43 crore); The expenditure on research and development activities recognised as expense in the Statement of Profit and Loss is 138.93 crore (previous year: 145.98 crore). Further, the Company has incurred capital expenditure on research and development activities as follows: NOTE [40] 100.77 14.07 86.70 In addition, the Company has incurred expenditure of 2.70 cr (previous year: Nil) which are customer funded. Particulars No. 1 Particulars Sr. (B) The Minimum lease rental and the present value of minimum lease payments in respect of assets acquired under finance leases are as follows: (A) Assets acquired on finance lease comprises plant and equipment and land. The leases have a primary period, which is fixed and non- cancellable. The company has an option to renew the lease for a secondary period. (i) Finance leases: (b) Where the Company is a lessee: 83.10 72.52 As at 31-3-2017 48.69 34.41 23.51 49.01 As at 31-3-2018 crore Total Receivable later than 5 years 3 Receivable later than 1 year and not later than 5 years 2 Receivable not later than 1 year 19.46 No. 0.43 15.58 100.92 expenses under sales, administration and other recognised as expense and shown Construction/acquisition of assets i) Total 2016-17 Paid Provided Total Note 35 2017-18 Provided Disclosed under No. Corporate guarantee given for 418.95 472.36 (d) L&T Shipbuilding Limited (e) Nabha Power Limited (f) L&T Global Holdings Limited Paid 4.42 1.52 5.94 0.04 10.75 90.17 Total 15.54 Note 34 recognised as expense and shown under employee benefits expense 71.82 10.34 61.48 79.40 9.19 70.21 Note 35 under sales, administration and other expenses recognised as expense and shown Other revenue expenses: 9.49 3.30 6.19 19.03 (g) Larsen & Toubro ATCO Saudia LLC 1 2 crore As at 31-3-2018 388.00 Particulars Disclosure pursuant to Ind AS 105 "Non-current assets held for sale and discontinued operations": NOTE [42] Notes forming part of the Financial Statements (contd.) 297 (C) Lease rental expenses in respect of operating leases: 103.39 crore (previous year: 109.10 crore) As at Total 55.85 6.80 Payable later than 5 years 3 18.33 27.13 27.09 Payable later than 1 year and not later than 5years 2 45.46 31-3-2017 Investments held for sale 388.00 As at 31-3-2017 After twelve Within twelve months Total expense 1680.38 9 Inventories months Within twelve Note Particulars As at 31-3-2018 crore Current assets expected to be recovered within twelve months and after twelve months from the reporting date: (a) Disclosure pursuant to Ind AS 1 "Presentation of financial statements": NOTE [43] (ii) The above investment forms part of the unallocable corporate assets. [Note 47(a) Disclosure pursuant to Ind AS 108 "Operating Segment"]. (i) Through a scheme of arrangement of demerger, the Port business in L&T Shipbuilding Limited (effective date March 22, 2017) was transferred to Marine Infrastructure Developer Private Limited (MIDPL) in financial year 2016-17. As a shareholder, the Company had received 38,80,00,000 equity shares of 10 each. The Company plans to divest its stake in MIDPL to an identified strategic partner. In order to complete the divestment, certain approvals, such as transfer of Marine License & transfer of shares are pending to be received from statutory bodies. Accordingly, the proposed sale is expected to be completed within 12 months from the reporting date. Payable not later than 1 year Payable not later than 1 year 1 As at 31-3-2018 21.96 0.50 0.14 As at 31-3-2017 As at 31-3-2018 As at 31-3-2017 0.56 0.14 31-3-2018 As at 0.02 Present value of minimum lease payments crore (ii) Operating leases: Present value of minimum lease payments Less: Future finance charges Total (1+2+3) Payable later than 5 years 3 Payable later than 1 year and not later than 5 years Minimum lease payment 0.16 0.14 0.14 No. Particulars Sr. crore (B) Assets acquired on non- cancellable operating lease comprises commercial premises, cars and technology assets, the future minimum lease payments in respect of which are as follows: (A) The Company has taken various commercial premises and plant and equipment under cancellable operating leases. These lease agreements are normally renewed on expiry. There are no exceptional/restrictive covenants in the lease agreements. 0.70 0.20 0.70 0.20 0.17 0.10 0.70 0.20 0.87 0.30 0.06 0.06 0.15. As at 31-3-2017 (h) Larsen & Toubro Arabia LLC (i) Larsen & Toubro Infotech Limited subsidiary's debt 71.94 515.34 518.64 22.58 22.46 7.09 5.25 636.11 91.10 618.29 474.70 1092.99 As at 31-3-2018 Particulars crore (a) Claims against the Company not acknowledged as debts (b) Sales tax liability that may arise in respect of matters in appeal (c) Excise duty/service tax/customs duty liability that may arise including those in respect of matters in appeal/challenged by the Company in Writ (d) Income tax liability that may arise in respect of which the Company is in appeal 2113.67 As at 31-3-2017 466.11 1102.22 crore crore crore and other expenses expense Notes forming part of the Financial Statements (contd.) NOTE [28] Current liabilities: Provisions Particulars Provision for employee benefits: Gratuity [Note 50(a)] Compensated absences Employee pension scheme [Note 50(a)] Post-retirement medical benefits plan [Note 50(a)] Others: Other provisions (Ind AS 37 Related) [Note 54] NOTE [29] Contingent liabilities LARSEN & TOUBRO As at 31-3-2018 As at 31-3-2017 crore crore 1815.23 expenses 170.25 193.33 3. 4. 5. It is not practicable to estimate the timing of cash outflows, if any, in respect of matters at (a) to (d) above pending resolution of the arbitration/appellate proceedings. Further, the liability mentioned in (a) to (d) above includes interest except in cases where the Company has determined that the possibility of such levy is remote. In respect of matters at (e), the cash outflows, if any, could generally occur up to ten years, being the period over which the validity of the guarantees extends except in a few cases where the cash outflows, if any, could occur any time during the subsistence of the borrowing to which the guarantees relate. In respect of matters at (f), the cash outflows, if any, could generally occur up to three years, being the period over which the validity of the guarantees extends. In respect of matters at (g) to (i), the cash outflows, if any, could generally occur up to completion of projects undertaken by the respective joint operations. 289 2. Notes forming part of the Financial Statements (contd.) Commitments Particulars (a) Estimated amount of contracts remaining to be executed on capital account (net of advances) As at 31-3-2018 As at 31-3-2017 crore crore crore NOTE [30] 1. The Company does not expect any reimbursements in respect of the above contingent liabilities. Notes: 6230.96 86.61 423.22 460.55 and operating (e) Corporate guarantees for debt given on behalf of subsidiary companies/ joint venture companies 7424.61 8450.61 (f) Corporate and bank guarantees for performance given on behalf of subsidiary companies 20305.06 16384.12 (g) Contingent liabilities, if any, incurred in relation to interests in joint operations 7267.96 7018.24 (h) Share in contingent liabilities of joint operations for which the Company is contingently liable 139.20 53.24 (i) Contingent liabilities in respect of liabilities of other joint operators of joint operations 6576.16 162.42 expenses 1. Power and fuel (k) Larsen & Toubro Heavy Engineering LLC (I) Larsen & Toubro (Saudi Arabia) LLC (m) Spectrum Infotech Private Limited [Note 60] (n) L&T Hydrocarbon Engineering Limited (o) L&T-MHPS Boilers Private Limited 1047.98 1172.46 Corporate guarantee for subsidiary's project performance 1517.67 3272.69 917.62 2.90 5418.33 Guarantees issued by bank out of the Company's sanctioned limits to customer of L&T-MHPS Boilers Private Limited for project performance 28.79 28.60 27729.67 24834.73 [Note 5 and Note 10] (D) Investments in fully paid equity instruments and current investments 8691.05 918.08 security is proposed to be utilised by the recipient Corporate guarantee for subsidiary's project performance (It includes corporate guarantee given for L&T Technology Services LLC) (j) L&T Technology Services Limited 3156.00 2781.00 3707.00 5032.00 65.18 2130.11 Corporate guarantee for subsidiary's 5971.38 5369.27 project performance 202.26 295 Notes forming part of the Financial Statements (contd.) NOTE [38] Disclosure pursuant to section 186 of The Companies Act 2013: (contd.) crore Sr. Nature of the transaction (loans given/investment made/guarantee Purpose for which the loan/guarantee/ No. given/security provided) 2017-18 2016-17 - Subsidiary classification is in accordance with the Companies Act, 2013. NOTE [39] Amount required to be spent by the Company on Corporate Social Responsibility (CSR) related activities during the year is 97.29 crore (previous year: * 98.97 crore). (a) The amount recognised as expense in the Statement of Profit and Loss on CSR related activities is 100.92 crore (previous year: 100.77 crore), which comprises of: 4. 31.96 297.11 78.08 187.07 34.48 306.79 83.35 188.96 Insurance 3. 91.05 431.20 340.15 96.75 459.76 363.01 Packing and forwarding 2. 59.26 1100.75 1041.49 58.22 1009.83 951.61 Rent (i) Estimated amount of contracts remaining to be executed on Property, plant & equipment 422.83 Rates and taxes crore Sr. Particulars 415.25 667.11 244.28 54.56 429.45 304.71 18.51 228.33 565.29 536.80 1510.60 973.80 Miscellaneous expenses 9. 336.96 General repairs and maintenance 8. 5.05 Repairs to buildings 7. 608.14 Travelling and conveyance 6. 374.89 5. Sub-contracting charges 27.79 757.95 B. Total [III] = (A+B+C) (1142.82) 2047.19 (1127.18) 71.66 (d) Fair value of financial assets and financial liabilities measured at amortised cost: Financial assets measured at amortised cost: (i) 8.04 The carrying amounts of trade receivables, loans, advances and cash and other bank balances are considered to be the same as their fair values due to their short term nature. The carrying amounts of long term loans given with floating rate of interest are considered to be close to the fair value. Particulars 0.675 % Foreign currency convertible bonds Redeemable non-convertible fixed rate debentures Total As at 31-3-2018 Carrying Fair Value As at 31-3-2017 Carrying Fair Value crore Fair value hierarchy (ii) Financial liabilities measured at amortised cost: amount (15.48) (401.21) 157.84 0.98 1.08 Sub- total (B) 496.93 539.21 (c) Financial liabilities that are measured at fair value through Profit or Loss Sub-total (C) C (a) Financial liabilities that are measured at amortised cost (860.74) (734.01) (b) Derivative instruments (including embedded derivatives) that are measured at fair value through Other Comprehensive Income (reclassified to Profit or Loss during the period) (266.60) Interest expense: 226.95 amount 2588.43 3834.07 161.96 Power 4147.12 4870.14 Infrastructure Segment result [Profit/(Loss) before interest and tax] 201.18 66301.35 74611.65 74611.65 Total (1260.78) (1260.78) (990.66) 66301.35 1245.64 Heavy Engineering 530.88 1241.13 2647.14 3888.27 1201.78 1222.20 L2* 2588.03 2677.39 L2* 5891.63 569.66 6708.89 492.06 482.35 Others 520.39 624.78 Electrical & Automation [Note 46(B)] Total Financial assets measured at fair value through Other Comprehensive Income Financial assets measured at fair value through Profit or Loss (c) (b) 4472.18 As at 31-3-2017 As at 31-3-2018 5157.15 crore Particulars Floating rate borrowings 299 The Company's exposure to changes in interest rates relates primarily to the Company's outstanding floating rate debt. While most of the Company's outstanding debt in local currency is on fixed rate basis and hence not subject to interest rate risk. A major portion of foreign currency debt is linked to international interest rate benchmarks like LIBOR. The Company also hedges a portion of these risks by way of derivatives instruments like Interest rate swaps and currency swaps. The exposure of the Company's borrowing to interest rate changes at the end of the reporting period are as follows: Actual future gains and losses associated with the Company's investment portfolio and derivative positions may differ materially from the sensitivity analysis performed as at March 31, 2018 due to the inherent limitations associated with predicting the timing and amount of changes in foreign currency exchanges rates and the Company's actual exposures and position. To provide a meaningful assessment of the foreign currency risk associated with the Company's foreign currency derivative positions against off Balance Sheet exposures and unhedged portion of on-Balance Sheet financial assets and liabilities, the Company uses a multi-currency correlated value-at-risk ("VAR") model. The VAR model uses a Monte Carlo simulation to generate thousands of random market price paths for foreign currencies against Indian rupee taking into account the correlations between them. The VAR is the expected loss in value of the exposures due to overnight movement in spot exchange rates, at 95% confidence interval. The VAR model is not intended to represent actual losses but is used as a risk estimation tool. The model assumes normal market conditions and is a historical best fit model. Because the Company uses foreign currency instruments for hedging purposes, the loss in fair value incurred on those instruments are generally offset by increases in the fair value of the underlying exposures for on-Balance Sheet exposures. The overnight VAR for the Company at 95% confidence level is 39.80 crore as at March 31, 2018 and 59.80 crore as at March 31, 2017. (5.42) 752.13 (6.92) (1219.10) (ii) Interest rate risk: Receivable/(payable) exposure with respect to forward contracts and embedded derivatives not designated as cash flow hedge Notes forming part of the Financial Statements (contd.) A hypothetical 50 basis point shift in respective currency LIBORS on the unhedged loans would result in a corresponding increase/decrease in interest cost for the Company on a yearly basis. (1.11) 1.11 (0.45) 0.45 As at 31-3-2017 Impact on equity As at 31-3-2018 2016-17 2017-18 NOTE [44] (contd.) Impact on Profit and Loss after tax Holding all other variables constant Interest rates increase by 0.5% in USD interest rate * Interest rates - decrease by 0.5% in USD interest rate Interest rates - increase by 0.5% in INR interest rate * Interest rates decrease by 0.5% in INR interest rate US Dollar Indian Rupee * Particulars * crore 604.27 3664.22 (1085.56) 659.25 crore The net exposure to foreign currency risk (based on notional amount) in respect of recognised financial assets, recognised financial liabilities and derivatives is as follows: The Company may enter into foreign currency forward and option contracts with financial institutions to protect against foreign exchange risks associated with certain existing assets and liabilities, certain firmly committed transactions, forecasted future cash flows and net investments in foreign subsidiaries. In addition, the Company has entered and may enter in future, into non-designated foreign currency contracts to partially offset the foreign currency exchange gains and losses on its foreign-denominated debt issuances. The Company's practice is to hedge a portion of its material foreign exchange exposures with tenors in line with the project/business life cycle, however, the Company may choose not to hedge certain foreign exchange exposures for a variety of reasons. In general, the Company is a net receiver of foreign currency. Accordingly, changes in exchange rates and in particular a strengthening of the Indian Rupee may negatively affect the Company's net sales and gross margins as expressed in Indian Rupees. There is a risk that the Company will have to adjust local currency product pricing due to competitive pressures when there have been significant volatility in foreign currency exchange rates. Foreign exchange rate risk: (i) Particulars NOTE [44] (contd.) LARSEN & TOUBRO Interest income: (a) Financial assets measured at amortised cost 269.00 380.29 Notes forming part of the Financial Statements (contd.) US Dollars including As at 31-3-2018 EURO Japanese Yen (1388.82) 1848.44 (366.13) (1730.19) (402.15) (95.77) (372.73) (2187.64) Net exposure to foreign currency risk in respect of recognised financial assets/ (recognised financial liabilities) Derivatives including embedded derivatives for hedging receivable/(payable) exposure with respect to firm commitments and forecast transactions pegged currencies currencies pegged Yen Japanese As at 31-3-2017 EURO US Dollars including (990.66) (0.45) 0.45 Elimination 483.17 2016-17 2017-18 crore Movement of hedging reserve and cost of hedging reserve (contd.) (I) NOTE [45] Cost of hedging reserve Notes forming part of the Financial Statements (contd.) (74.53) 156.91 39.50 (83.18) (114.03) 240.09 225.68 (92.79) 175.08 21.96 (41.45) 267.87 (96.28) (63.41) 39.22 345.28 (119.60) (0.31) (113.69) 114.50 307 0.17 63.45 (60.63) Gross Net of Tax hedging instrument for time period related hedges changes in spot element of forward contract is designated as Changes in the forward element of the forward contracts where (15.07) 7.97 Net of Tax Tax Tax (12.79) 0.07 0.07 Impact due to change in tax rate 6.77 (19.56) Opening balance Gross (23.04) (38.56) 175.13 Amount included in Progress Billing in Balance Sheet Closing balance Gross (31.74) 156.91 (0.72) Net of Tax Tax (83.18) (0.72) Impact due to change in tax rate 240.09 Tax 10.98 Opening balance Hedging reserve 2016-17 2017-18 crore (46.83) 181.10 Gross (177.14) Net of Tax (20.76) is designated as hedging instrument for time period related hedges 659.63 Amount included in non-financial assets/liabilities 139.78 (78.02) 53.75 (21.89) 61.11 Amount reclassified to Profit or Loss Changes in the spot element of the forward contracts which (150.03) 217.80 hedging instruments Changes in fair value of forward contracts designated as 56.77 (107.11) 5.81 (10.41) (163.88) (16.22) Changes in fair value of swaps 13.47 (25.09) Amount included in carrying amount of hedge item 6938.79 46894.42 321.07 46573.35 6938.79 54785.78 6208.23 7.52 3896.06 6200.71 54578.87 Heavy Engineering Power Infrastructure Revenue Total 206.91 For the year ended 31-3-2017 External Inter-segment 150.28 3098.38 5632.64 6115.43 443.67 5671.76 Others 4281.34 4046.34 223.15 4446.53 182.28 4264.25 Electrical & Automation [Note 46(B)] 3331.77 233.39 4058.19 Total For the year ended 31-3-2018 External Inter-segment Particulars (19.57) (12.34) 6.63 (18.97) Closing balance 131.37 6.77 (69.52) 67.15 1.17 (194.03) (3.39) 200.89 25.47 (13.68) 39.15 Amount reclassified to Profit or Loss (126.88) (2.22) (12.80) NOTE [46] A. crore 308 (a) Information about reportable segment Disclosure pursuant to Ind AS 108 "Operating Segment" NOTE [47] On May 1, 2018, the Company signed, subject to regulatory approvals, definitive agreements with Schneider Electric for strategic divestment of its Electrical and Automation (E&A) business (which is a reported segment), together with certain associated subsidiary companies outside India, for an all-cash consideration of ₹14000 crore which is subject to customary post-closing adjustments. (iv) Provision for impairment of investment in Infrastructure Development Projects Limited 950 crore. (iii) Loss on sale of Company's full stake in subsidiary company L&T Arabia LLC to wholly owned subsidiary company 11.08 crore. (ii) Loss on divestment of stake in L&T General Insurance Company Limited 92.84 crore; (i) Gain of 1947.89 crore on sale of the Company's part stake in subsidiary companies viz. Larsen & Toubro Infotech Limited 1191.70 crore and L&T Technology Services Limited 756.19 crore; Exceptional items for the year ended March 31, 2017 include the following: (iii) Write off of trade receivable and retention money not due from a customer against whom insolvency proceedings are underway *294.75 crore [note1(t)(vii)]. (ii) Gain on divestment of stake in L&T EWAC Alloys Limited 351.55 crore and L&T Cutting Tools Limited 174.91 crore; (i) Gain of 198.82 crore on sale of the Company's stake in subsidiary companies viz. Larsen & Toubro Infotech Limited ₹ 145.32 crore and L&T Technology Services Limited 53.50 crore; Exceptional items for the year ended March 31, 2018 include the following: 6115.81 (401.21) (1.11) 1.11 (13.51) 13.51 (171.07) (ii) Allowance/(reversal) for expected credit loss recognised during the year in the Statement of Profit or Loss (173.03) 123.70 Exchange gains/(losses) on revaluation or settlement of items denominated in foreign currency (trade receivables, loans given etc.) (i) (151.94) Financial assets measured at amortised cost: (258.66) (2289.84) Sub-total (A) (56.89) (125.74) On futures not designated as cash flow hedges B C. (iii) Provision for doubtful debts (other than expected credit loss) [net] (237.28) Exchange gains/(losses) on revaluation or settlement of items denominated in foreign currency (trade payables, borrowings availed etc.) (i) Financial liabilities measured at amortised cost: C (655.49) (794.87) (525.60) Sub-total (B) (35.73) 2. Gains/(losses) on transfer of financial assets (non-recourse) (42.43) (186.17) 1. Bad debts written off (net) (iv) Gains/(losses) on derecognition: (50.81) (162.60) (33.57) 9.93 On embedded derivatives contracts not designated as cash flow hedges crore Sr. 302 (c) Items of income, expense, gains or losses related to financial instruments: Other disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": (contd.) NOTE [45] 2017-18 Notes forming part of the Financial Statements (contd.) 20.71 36425.51 330.04 253.53 15.49 43637.62 50.43 279.61 132.19 121.34 301 17.05 2016-17 No. b. 0.15 On forward contracts not designated as cash flow hedges a. Gains/(losses) on fair valuation/settlement of derivatives: 2. Particulars (178.13) Financial assets or financial liabilities mandatorily measured at fair value through Profit or Loss: Gains/(losses) on fair valuation or sale of Investments 1. (i) A Net gains/(losses) on financial assets and financial liabilities measured at fair value through Profit or Loss and amortised cost: | (2181.30) 277.28 (ii) Unclaimed credit balances written back Notes forming part of the Financial Statements (contd.) (17.66) (153.08) Net gains/(losses) recognised in Other Comprehensive Income [II]= (A)-(B) (34.50) 114.85 NOTE [45] Sub-total (B) (21.95) On embedded derivative contracts upon hedged future cash flows affecting the Profit or Loss or related asset and liability 2. (140.88) 188.29 1. On forward contracts upon hedged future cash flows affecting the Profit or Loss or related assets or liability (4.08) Derivative measured at fair value through Other Comprehensive Income: (c) LARSEN & TOUBRO 2693.08 Sub-total (A) 659.63 2693.08 Dividend income from investments measured at FVTPL Dividend income: Items of income, expense, gains or losses related to financial instruments: (contd.) A No. Particulars 2016-17 2017-18 crore Sr. Other income/(expenses): (ii) 110.46 (51.49) Financial assets measured at fair value through Other Comprehensive Income: (i) Gains/(losses) recognised in Other Comprehensive Income: A Net gains/(losses) on financial assets and financial liabilities measured at fair value through Other Comprehensive Income: || (ii) (506.16) Total [I] = (A+B+C) 407.99 (44.92) Sub-total (C) 130.71 117.68 (3129.63) 1. Gains/(losses) on fair valuation or sale of government securities, bonds, debentures etc. Derivative measured at fair value through Other Comprehensive Income: (51.22) 101.29 1. On government securities, bonds, debentures etc. upon sale of government securities, bonds, debentures etc. upon sale Financial assets measured at fair value through Other Comprehensive Income: (i) Gains/(losses) reclassified to Profit or Loss from Other Comprehensive Income: B (52.16) (38.23) Sub-total (A) Less: (24.02) (79.30) Gains/(losses) on fair valuation or settlement of embedded derivative contracts designated as cash flow hedges 2. (129.43) 92.29 1. Gains/(losses) on fair valuation or settlement of forward contracts designated as cash flow hedges Total (I+II+III+IV) (16.39) 16.39 Financial guarantee contracts (ii) Embedded derivatives designated as cash flow hedges 605.10 1085.08 (ii) Investment in preference shares 56.04 136.64 Investment in equity instruments (iii) Investment in mutual funds (i) I. As at 31-3-2017 crore As at 31-3-2018 Particulars Sr. No. Measured at fair value through Profit or Loss (FVTPL): LARSEN & TOUBRO 1070.80 (iv) Investment in bonds Loans (i) Measured at amortised cost: II. 5979.55 2742.08 5031.03 78.97 (vi) Embedded derivatives not designated as cash flow hedges Sub-total (I) 6.08 3.77 (v) Derivative instruments not designated as cash flow hedges 202.33 424.46 21.33 2676.47 (a) Category-wise classification for applicable financial assets: NOTE [45] Additional provision Loss allowance based on ECL Changes in loss allowance (Provision for doubtful debts): Particulars Opening balance (i) The company is making provisions on trade receivables based on Expected Credit Loss (ECL) model. The reconciliation of ECL is as follows: Write off as bad debts The Company's customer profile include public sector enterprises, state owned companies and large private corporates. Accordingly, the Company's customer credit risk is low. The Company's average project execution cycle is around 24 to 36 months. General payment terms include mobilisation advance, monthly progress payments with a credit period ranging from 45 to 90 days and certain retention money to be released at the end of the project. In some cases retentions are substituted with bank/corporate guarantees. The Company has a detailed review mechanism of overdue customer receivables at various levels within organisation to ensure proper attention and focus for realisation. The Company's investment policy and strategy are focused on preservation of capital and supporting the Company's liquidity requirements. The Company uses a combination of internal and external management to execute its investment strategy and achieve its investment objectives. The Company typically invests in money market funds, large debt funds, government of india securities, equity funds and other highly rated securities under a limits framework which governs the credit exposure to any one issuer as defined in its investment policy. The policy requires investments generally to be investment grade, with the primary objective of minimising the potential risk of principal loss. To provide a meaningful assessment of the price risk associated with the Company's investment portfolio, the Company performed a sensitivity analysis to determine the impact of change in prices of the securities that would have on the value of the investment portfolio assuming a 0.5% move in debt funds and debt securities and a 5% movement in the NAV of the equity funds. Based on the investment position a hypothetical 0.5% change in the fair market value of debt securities would result in a value change of +/- 14.04 crore as at March 31, 2018 and +/- 15.98 crore as at March 31, 2017. 5% change in the equity funds NAV would result in a value change of +/- 16.24 crore as at March 31, 2018 and +/- 17.83 crore as at March 31, 2017. The investments in money market funds are for the purpose of liquidity management only and are held only overnight and hence not subject to any material price risk. The Company manages liquidity risk by maintaining sufficient cash and marketable securities and by having access to funding through an adequate amount of committed credit lines. Given the need to fund diverse businesses, the Company maintains flexibility in funding by maintaining availability under committed credit lines to meet obligations when due. Management regularly monitors the position of cash and cash equivalents vis-à-vis projections. Assessment of maturity profiles of financial assets and financial liabilities including debt financing plans and maintenance of Balance Sheet liquidity ratios are considered while reviewing the liquidity position. (b) Liquidity Risk Management: 13.51 (13.51) (16.39) 16.39 (c) Credit Risk Management: Other disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": crore 2016-17 Notes forming part of the Financial Statements (contd.) Trade receivable written off during the year but still enforceable for recovery amounts to ₹409.43 crore (previous year: * Nil). Out of this 243.62 crore included above and balance 165.81 crore included in exceptional items. Further, exceptional items also include write off of retention money not due (non-financial asset) amounts to 128.94 crore. (Note 46). | Closing balance [reported under Note 11] 300 1916.66 2224.97 2017-18 1916.66 (39.98) 235.91 (ii) Outstanding interest rate hedge instruments: Interest rate swaps taken to hedge interest rate risk and accounted as cash flow hedge: 494.34 151.94 171.07 1568.79 (357.10) 3683.34 (ii) Trade receivables II. 91.79 29.31 83.26 15.79 8.53 Measured at amortised cost: 13.52 Embedded derivatives not designated as cash flow hedges (ii) Derivative instruments not designated as cash flow hedges (i) Measured at fair value through Profit or Loss (FVTPL): I. Sub-total (I) crore As at 31-3-2017 (i) 10561.00 (i) Derivative instruments designated as cash flow hedges IV. Derivative instruments (including embedded derivatives) through Other Comprehensive Income: III. 35982.97 43339.29 Borrowings Sub-total (II) 1681.18 (iii) Others 24338.32 31097.11 (ii) Trade payables 10558.37 1086.28 31-3-2018 As at No. 34923.89 Sub-total (II) 785.34 767.87 Other receivables (v) 29211.67 3759.28 (iv) Cash and cash equivalents and bank balances 1061.76 2387.92 (iii) Advances recoverable in cash 19921.95 24454.24 4637.39 III. Measured at fair value through Other Comprehensive Income (FVTOCI): (i) Investment in government securities, bonds and debentures Particulars Sr. 37602.48 40876.14 2.62 2411.26 3210.17 1.96 (b) Category-wise classification for applicable financial liabilities: Total (I+II+III) (iii) Embedded derivatives designated as cash flow hedges Sub-total (III) 659.92 358.49 (ii) Derivative instruments designated as cash flow hedges 1748.72 2849.72 Sub-total (III) (266.60) (0.48) 2.16 net realisation per month 30 per sq/ft. 25 bps change in capitalisation rate would result in +/- 0.64 crore | (post tax +/- 0.42 crore). 2. Capitalisation rate 31-3-2017: 1% change in net realisation would result in +/- 0.38 12% crore (post tax +/- 0.25 crore). 25 bps change in capitalisation rate would result in +/- 0.78 crore (post tax +/- 0.51 crore). crore 31-3-2018: 1% change in net realisation would result in +/- 0.31 crore (post tax +/- 0.20 crore). Notes forming part of the Financial Statements (contd.) (g) Maturity profile of financial liabilities: LARSEN & TOUBRO crore Within As at 31-3-2018 After Within As at 31-3-2017 After NOTE [45] (contd.) Particulars 1. Lease realisation: 64.27 Balance as at 1-4-2016 Gains/(losses) recognised in Profit or Loss during 2016-17 Balance as at 31-3-2017 Gains/(losses) recognised in Profit or Loss during 2017-18 Balance as at 31-3-2018 * crore Equity investment in Tidel Park Limited 55.94 55.94 8.32 55.94 64.27 Particulars Equity investment in "Tidel Park Limited" Fair Value Fair Value Significant as at 31-3-2018 as at unobservable inputs 31-3-2017 Sensitivity Significant unobservable inputs used in level 3 fair value measurements and sensitivity of the fair value measurement to changes in unobservable inputs. Note twelve months twelve 9109.76 1106.99 36951.17 B. Derivative liabilities: Forward contracts 20, 26 131.32 61.05 19.80 267.61 30.21 297.82 Embedded derivatives 20, 26 63.40 85.37 151.12 24338.32 11505.86 3708.84 7797.02 23086.63 1251.69 1045.94 27841.41 Total twelve twelve Total months months months A. Non derivative liabilities: Borrowings 19, 23, 24 Trade payables 25 Other financial liabilities 20, 26 Total 5370.82 30447.66 1661.98 37480.46 5874.29 11245.11 649.45 31097.11 34.68 1696.66 6558.42 44038.88 Particulars 148.77 Derivative instrument - Mark to market on forward covers and embedded derivative instruments is based on forward exchange rates at the end of reporting period and discounted using G-sec rate plus applicable spread. (b) Preference shares – Future cash flows are discounted using G-sec rate plus applicable spread as at reporting date. Movement of items measured using unobservable inputs (Level 3): 2. 10 2849.72 2849.72 1748.72 1748.72 (ii) Derivative financial instruments designated as cash flow hedges 7,15 (i) Debt instruments viz. government securities, bonds and debentures 358.49 659.92 659.92 (iii) Embedded derivative financial instruments designated as cash flow hedges 7,15 1.96 1.96 2.62 358.49 2.62 Investments at FVTOCI Level 3 78.97 78.97 303 Notes forming part of the Financial Statements (contd.) NOTE [45] (e) Fair value hierarchy of financial assets and liabilities measured at fair value (contd.) (f) Total 304 Note Particulars Level 1 As at 31-3-2018 Level 2 Level 3 Total Level 1 As at 31-3-2017 Level 2 crore Total 4417.25 1470.63 132.19 279.61 279.61 (b) Embedded Derivative financial instruments designated 20,26 121.34 121.34 50.43 132.19 50.43 Total 282.84 282.84 421.83 421.83 Valuation technique and key inputs used to determine fair value: 1. as cash flow hedges 20,26 (a) Derivative financial instruments designated as cash flow hedges (ii) Designated at FVTOCI: 64.37 5952.25 6982.08 1352.69 56.04 8390.81 Financial Liabilities: At FVTPL-Designated at FVTPL: (a) Derivative instruments not designated as cash flow hedges 20,26 13.52 13.52 8.53 8.53 (b) Embedded derivative instruments not designated as cash flow hedges 20,26 15.79 15.79 83.26 83.26 Level 1: Mutual funds, bonds, debentures and government securities- Quoted price in the active market. Level 2: (a) 21.33 120.33 146.75 52.96 93.51 28.88 Japanese Yen 309.02 0.62 309.02 British Pound Kuwaiti Dinars 217.71 12.24 67.96 4717.80 5454.58 7232.88 80.59 69.75 1907.72 17.86 7.24 266.74 63.51 2.97 385.36 4.40 18.11 7.24 67.51 266.74 12.24 9.63 26.03 26.03 After twelve twelve months months (crore) (*crore) (*crore) Nominal amount As at 31-3-2017 Average (b) Payable hedges US Dollar 10172.38 EURO 10.32 2711.27 0.75 2641.52 0.75 Swiss Franc 404.36 74.68 404.36 Chinese Yuan Arab Emirates Dirham 63.51 24.08 81.81 Average Within rate twelve (₹) months (crore) After Nominal twelve amount months (*crore) (crore) As at 31-3-2017 Average Within rate twelve After twelve Nominal amount (crore) months months (crore) (crore) US Dollar Saudi Riyal 28.73 187.39 71.83 17.43 187.39 28.73 785.74 19.44 Receivable hedges Particulars As at 31-3-2018 (B) Forward covers taken to hedge exchange rate risk and accounted as net investment hedge: 2.97 0.61 385.36 219.94 4.40 Swedish Krona 16.56 8.83 16.56 Within rate twelve (₹) months months (*crore) (crore) 62.41 6082.60 1150.28 71.72 1799.42 108.30 After twelve 305 Notes forming part of the Financial Statements (contd.) NOTE [45] (contd.) rate 26.42 As at 31-3-2018 Average Within Particulars twelve months months (*crore) (crore) (a) Receivable hedges US Dollar 4178.79 After EURO Omani Riyal 904.48 138.38 301.94 Arab Emirates Dirham 1414.99 68.11 3584.90 593.89 85.60 632.20 272.28 17.07 138.38 179.55 301.94 18.11 1411.18 2817.69 723.40 331.20 324.75 Malaysian Ringgit 66.87 2185.09 632.60 84.61 14.86 331.20 172.04 309.74 Within rate twelve Within After Nominal twelve twelve amount months months (*crore) (crore) (crore) Total 194.72 105.17 299.89 387.94 56.63 444.57 As at 31-3-2017 Average (h) Details of outstanding hedge instruments for which hedge accounting is followed: Outstanding currency exchange rate hedge instruments: (A) Forward covers taken to hedge exchange rate risk and accounted as cash flow hedge: Nominal Particulars amount As at 31-3-2018 Average rate (crore) (₹) (i) 507.79 215.61 15.01 3.81 6.12 889.42 442.85 33.77 845.50 170.67 187.89 1253.61 81.60 222.57 0.66 220.92 15.58 1061.92 467.82 377.68 164.74 23.15 122.25 1.43 1184.17 6.12 4.41 90.74 0.65 225.58 18.55 2.12 1229.22 17.59 1029.47 199.75 Canadian Dollar 9.41 50.29 9.41 British Pound 4.41 Japanese Yen 923.19 Kuwaiti Dinars 613.52 Qatari Riyals 1476.18 Thai Baht 1.43 Nominal amount (crore) (131.78) 21.33 (vi) Embedded derivative Instruments not designated as cash flow hedges 134.83 Liability Other financial liabilities - 169.36 Asset Other financial assets Current: exposure 27.61 23.27 price exposure Commodity price exposure As at 31-3-2018 Currency Interest rate exposure exposure Currency Interest rate Commodity crore As at 31-3-2017 Particulars exposure (i) Forward contracts 236.80 286.78 (8.43) 66.59 Asset Other financial assets Current: (ii) Swap contracts 1.39 46.76 29.03 93.28 - 3.34 105.25 72.40 Asset Other financial assets Non current: (4.89) Liability Other financial liabilities Liability Other financial liabilities Cash flow hedge: (i) Carrying amounts of hedge instruments for which hedge accounting is followed: 28.47 43.19 3592.00 71.66 60.65 4055.89 60.65 Coking Coal(Tn) Iron Ore(Tn) 112943.72 8.20 198.62 198.62 139526.87 Aluminium(Tn) 30.99 374739.63 8.20 306 33.91 11958.33 50.40 *Negative nominal amount represents sell position. 0.23 150777.00 9.53 177153.00 9.53 0.23 10.99 33.91 19.76 10.99 Lead(Tn) 19.76 Zinc(Tn) 8.33 42.07 11494.00 222813.00 160606.00 Non current: Asset Other financial assets 21.03 (k) Reclassification of hedging reserve and cost of hedging reserve to Profit or Loss: Balance for which hedge accounting discontinued Balance towards continuing hedges 15.92 138.39 (12.80) 140.99 Particulars (12.34) reserve hedging reserve hedging Cost of Cash flow As at 31-3-2017 (23.89) crore Future cash flows are no longer expected to occur: Hedged expected future cash flows affecting Profit or Loss: Progress billing 43.34 (15.60) 117.42 177.14 (9.69) (1.32) 2016-17 Sales, administration and other expenses 2017-18 Hedging reserve/Cost of crore Movement of hedging reserve and cost of hedging reserve: (1) Sales, administration and other expenses Manufacturing, construction and operating expenses Finance costs Revenue from operations hedging reserve reserve reserve Cost of hedging Non current: Liability Other financial liabilities Asset Other financial assets Current: (i) Forward contracts Particulars (i) Carrying amounts of hedge instruments for which hedge accounting is followed (contd.) Net investment: - NOTE [45] (15.69) 116.91 (1.38) 123.06 | | Liability Other financial liabilities (3.65) Notes forming part of the Financial Statements (contd.) Asset Other financial assets (j) Breakup of hedging reserve and cost of hedging reserve: Particulars As at 31-3-2018 Cash flow hedging 63.75 1.47 0.91 2.15 14.63 price exposure rate exposure Interest Commodity Currency exposure Commodity price exposure As at 31-3-2017 As at 31-3-2018 Interest rate exposure Currency exposure crore LARSEN & TOUBRO 30.99 7,15 (223.90) Copper(Tn)* rate twelve (%) months After Within As at 31-3-2017 Average After Nominal rate twelve twelve amount (%) months months (crore) (crore) (crore) 7.60 520.62 760.62 amount (crore) twelve As at 31-3-2018 Average Within Particulars US Dollar 3789.81 3899.59 Note: The carrying amounts of trade and other payables are considered to be the same as their fair values due to their short term nature. The carrying amounts of borrowings with floating rate of interest are considered to be close to the fair value. * Valuation technique L2: Future cash flows discounted using G-sec/LIBOR rates plus corporate spread. (e) Fair value hierarchy of financial assets and liabilities measured at fair value: Nominal crore months 240.00 1433.26 amount After Within Average Nominal After twelve twelve (*crore) (crore) rate Particulars Within As at 31-3-2017 As at 31-3-2018 Average Nominal (iii) Outstanding commodity price hedge instruments: Commodity forward contract: 8.00 672.70 760.56 amount Note Particulars Level 1 1085.08 1085.08 605.10 605.10 10 10 1070.80 424.46 5002 1070.80 5031.03 424.46 202.33 202.33 7,15 3.77 3.77 6.08 6.08 5031.03 (v) Derivative instruments not designated as cash flow hedges (iv) Bonds (iii) Mutual fund units As at 31-3-2018 Level 2 Level 3 Total Level 1 As at 31-3-2017 Level 2 Level 3 Total Financial assets: Investments at FVTPL: (i) Equity shares (other than those held in subsidiary & associate companies) 5 72.27 64.37 136.64 56.04 56.04 (ii) Preference shares rate twelve twelve B (crore) (₹) months months (crore) (₹) (223.90) 462821.73 months (crore) (crore) (*crore) (*crore) months Foreign countries: Kingdom of Saudi Arabia United Arab Emirates Qatar Total foreign countries (ii) Other countries India (i) Total (i+ii) Particulars Revenue by location of customers Bangladesh (b) Geographical information Notes forming part of the Financial Statements (contd.) NOTE [47] 309 Note: There is no impairment in non-financial assets of the segments. Unallocable corporate expenses include impairment loss of *Nil for the year ended March 31, 2018 (previous year: 103 crore). assets For the year Additions to non-current Interest expense included in For the year ended 31-3-2018 Other non-cash expenses included in segment expense 1420.43 2632.53 Disclosure pursuant to Ind AS 108 "Operating Segment" (contd.) segment expense (d) The Company's reportable segments are organised based on the nature of products and services offered by these segments. (e) Basis of identifying operating segments, reportable segments, segment profit and definition of each reportable segment: (i) Basis of identifying operating segments: For the year As at Particulars 31-3-2018 As at 31-3-2017 India (i) 61.77 10142.61 Non current assets by location of customers 9206.97 379.79 585.75 Total (i+ii) 10522.40 9792.72 (c) Revenue contributed by any single customer in any of the operating segments, whether reportable or otherwise, does not exceed ten percent of the Company's total revenue. Foreign countries (ii) crore 66301.35 74611.65 ended 31-3-2018 31-3-2017 58124.10 51737.85 2478.78 2639.59 2942.13 2166.06 4917.23 4655.27 1551.96 1317.00 4597.45 3785.58 16487.55 14563.50 crore ended 69.77 The Company has four reportable segments as described under "segment composition" below. The nature of products and services offered by these businesses are different and are managed separately given the different sets of technology and competency requirements. (349.24) (79.03) Tax expense on origination and reversal of temporary differences (ii) Deferred tax: 3.62 1671.58 1808.52 165.55 Tax expense in respect of earlier years Current income tax expense Current income tax: (i) 2016-17 2017-18 * crore Particulars Profit or Loss section (a) Sr. No. (a) Major components of tax expense/(income): Disclosure pursuant to Ind AS 12 "Income Taxes" NOTE [49] Notes forming part of the Financial Statements (contd.) 311 71.28 Excess of revenue recognised over actual bills raised (unbilled revenue) [Note 16] Effect of previously unrecognised tax losses on which deferred tax benefit is recognised Effect on deferred tax balances due to the change in income tax rate (16.05) (21.86) (3.91) 1215.19 Retained earnings: Income tax expense reported in the OCI section [(i)+(ii)] On foreign currency translation of joint operations On gain/(loss) on fair value of debt securities On mark to market gain/(loss) on cash flow hedges Net gain/(loss) on cost of hedging reserve (B) Deferred tax: (14.47) 4.24 (0.49) (14.47) 4.73 v) On gain/(loss) on cash flow hedges other than mark to market On foreign currency translation of joint operations (4.25) 1.32 (4.25) 1.32 On re-measurement of defined benefit plans Items not to be reclassified to Profit or Loss in subsequent periods: Current tax expense/(income): (i) Other Comprehensive Income (OCI) section: (b) 1304.10 1875.08 Income tax expense reported in Profit or Loss [(i)+(ii)] (ii) Items to be reclassified to Profit or Loss in subsequent periods: (A) Current tax expense/(income): 19.16 281.83 986.40 Amount of work-in-progress and the value of inventories [Note 9] No. Particulars crore 2016-17 2017-18 Sr. Disclosures pursuant to Ind AS 11 "Construction Contracts": Others segment includes hydrocarbon, metallurgical & material handling systems, realty, shipbuilding, marketing and servicing of construction & mining machinery and parts thereof, manufacture and sale of rubber processing machinery. None of the businesses reported as part of others segment meet any of the quantitative thresholds for determining reportable segments in the year ended March 31, 2018 or the year ended March 31, 2017. Electrical & Automation segment comprises manufacture and sale of low and medium voltage switchgear components, custom built low and medium voltage switchboards, electronic energy meters/protection (relays) systems, control & automation products. . Heavy Engineering segment comprises manufacture and supply of custom designed, engineered critical equipment and systems to core sector industries like Fertiliser, Refinery, Petrochemical, Chemical, Oil & Gas, Thermal & Nuclear Power, Aerospace and Defence. Power segment comprises turnkey solutions for Coal-based and Gas-based thermal power plants Including power generation equipment with associated systems and/or balance-of-plant packages. Infrastructure segment comprises engineering and construction of building and factories, transportation infrastructure, heavy civil infrastructure, power transmission & distribution, water & effluent treatment and smart world & communication projects. • i) • (a) NOTE [48] (iv) Segment composition Disclosure pursuant to Ind AS 108 "Operating Segment" (contd.) NOTE [47] Notes forming part of the Financial Statements (contd.) LARSEN & TOUBRO 310 Performance of a segment is measured based on segment profit (before interest and tax), as included in the internal management reports that are reviewed by the Corporate Executive Management. (iii) Segment profit: An operating segment is classified as reportable segment if reported revenue (including inter-segment revenue) or absolute amount of result or assets exceed 10% or more of the combined total of all the operating segments. (ii) Reportable segments: • Operating segments are identified as those components of the Company (a) that engage in business activities to earn revenues and incur expenses (including transactions with any of the Company's other components; (b) whose operating results are reviewed by the Corporate Executive Management to make decisions about resource allocation and performance assessment; and (c) for which discrete financial information is available. Contract revenue recognised for the financial year [Note 31] Aggregate amount of contract costs incurred and recognised profits (less recognised losses) as at end of the financial year for all contracts in progress as at that date iv) 6.87 Amount of advances received iii) 403.18 2332.26 2427.88 Aggregate amount of costs incurred and profits recognised (less recognised losses) as at end of the financial year ii) 96.68 Amount of project revenue recognised for the financial year [Note 31] i) No. ii) Particulars 2017-18 Sr. crore iv) Retention amounts by customers for contracts in progress as at end of the financial year *includes provision for foreseeable loss: 144.78 crore (previous year: 121.66 crore) (b) Disclosures pursuant to Guidance Note on Accounting for Real Estate Transactions issued by the Institute of Chartered Accountants of India: 6962.23 8442.44 12205.69 13675.90 Amount of customer advances outstanding for contracts in progress as at end of the financial year iii) 58498.42 217253.39* 66978.07 251561.22* 2016-17 1049.46 4. (166.44) Infrastructure As at 31-3-2017 Segment liabilities As at 31-3-2018 As at 31-3-2017 31-3-2018 Segment assets As at Particulars crore 5453.74 893.97 430.53 5387.30 4559.77 (1675.20) 371.10 5863.87 (1316.91) 539.31 6641.47 782.67 4956.77 53127.74 98.99 43931.92 29858.24 4973.14 7967.38 9348.55 Others 1530.93 1663.94 3007.54 2900.82 Electrical & Automation [Note 46(B)] 3281.58 4723.49 4879.29 6502.86 Heavy Engineering 6362.49 5657.36 6241.46 5670.64 Power 37733.44 (1974.07) 6831.85 496.89 Particulars Disclosure pursuant to Ind AS 108 "Operating Segment" (contd.) NOTE [47(a)] Notes forming part of the Financial Statements (contd.) 1. 2. 3. (27.13) The Company operates gratuity plan through a trust wherein every employee is entitled to the benefit equivalent to fifteen days last salary drawn for each completed year of service. The same is payable on termination of service or retirement whichever is earlier. The benefit vests after five years of continuous service. The Company's scheme is more favorable as compared to the obligation under Payment of Gratuity Act, 1972. The defined benefit plan for gratuity of the Company is administered by separate gratuity funds that are legally separate from the Company. The trustees nominated by the Company are responsible for the administration of the plan. There are no minimum funding requirements of these plans. The funding of these plans are based on gratuity fund's actuarial measurement framework set out in the funding policies of the plan. These actuarial measurements are similar compared to the assumptions set out in (g) supra. Employees do not contribute to any of these plans. Unfunded gratuity represents a small part of gratuity plan which is not material. Further, it includes amounts payable in respect of the Company's foreign operations which result in gratuity payable to employees engaged as per the local laws of country of operation. Post-retirement medical care plan: The Post-retirement medical benefit plan provides for reimbursement of health care costs to certain categories of employees post their retirement. The reimbursement is subject to an overall ceiling sanctioned based on cadre of the employee at the time of retirement. The plan is unfunded. Employees do not contribute to the plan. Company's pension plan: In addition to contribution to state-managed pension plan (EPS scheme), the Company operates a post retirement pension scheme, which is discretionary in nature for certain cadres of employees. The quantum of pension depends on the cadre of the employee at the time of retirement. The plan is unfunded. Employees do not contribute to the plan. Trust managed provident fund plan: The Company manages provident fund plan through a provident fund trust for its employees which is permitted under The Employees' Provident Fund and Miscellaneous Provisions Act, 1952. The plan mandates contribution by employer at a fixed percentage of employee's salary. Employees also contribute to the plan at a fixed percentage of their salary as a minimum contribution and additional sums at their discretion. The plan guarantees interest at the rate notified by Employees' Provident Fund Organisation. The contribution by employer and employee together with interest are payable at the time of separation from service or retirement whichever is earlier. The benefit under this plan vests immediately on rendering of service. The interest payment obligation of trust-managed provident fund is assumed to be adequately covered by the interest income on long term investments of the fund. Any shortfall in the interest income over the interest obligation is recognised immediately in the Statement of Profit and Loss as actuarial loss. Any loss/gain arising out of the investment risk and actuarial risk associated with the plan is also recognised as expense or income in the period in which such loss/ gain occurs. All the above defined benefit plans expose the Company to general actuarial risks such as interest rate risk and market (investment) risk. 318 Characteristics of defined benefit plans and associated risks: Gratuity plan: Inter-segment margin on capital jobs Unallocated corporate income/(expenditure) [net] Operating Profit (PBIT) Interest expense (1432.23) 7767.19 1073.01 5858.80 6694.18 (32.83) (14.71) Total For the year ended 31-3-2017 External Inter-segment 3993.66 Total crore LARSEN & TOUBRO Profit after tax (after exceptional items) Profit from exceptional items Profit after tax (before exceptional items) Provision for deferred tax Provision for current tax Profit before tax (PBT) Interest income For the year ended 31-3-2018 External Inter-segment Total 77550.61 66027.59 113.64 Others 46(B)] 165.38 190.31 3.83 3.85 130.81 130.00 Electrical & Automation [Note 92.98 250.12 2.49 1.97 105.75 99.29 Heavy Engineering 100.17 151.36 122.60 4.07 4.45 231.08 (44.31) Inter-segment 588.77 612.28 100.34 998.10 2064.56 (100.34) (236.90) 236.90 1.99 29.20 220.18 110.91 Unallocated corporate 32.57 31.32 995.01 938.55 Total 75.04 38.45 Total 1.40 43.56 Particulars crore 56225.70 66435.77 102238.44 115610.02 (535.96) (711.23) (535.96) (711.23) Total assets/liabilities Inter-segment assets/liabilities 11734.76 12395.63 36746.81 38770.64 Unallocable corporate assets/liabilities 45026.90 54751.37 Depreciation, amortisation, impairment & obsolescence included in segment expense For the year ended For the year ended For the Power 564.53 1241.69 (100.34) (236.90) 19.81 20.03 591.45 552.06 44.40 Infrastructure 31-3-2018 For the year ended For the year ended For the year ended 31-3-2017 31-3-2018 For the year ended year ended 31-3-2017 31-3-2017 31-3-2018 31-3-2017 108.63 h) 1.20 0.24 Add: Business combination 0.20 Add: Past service cost (251.04) (17.74) (310.20) (20.07) (8.14) (11.15) (64.99) (116.88) Less: Benefit paid 6.83 19.23 (1.57) 14.20 0.09 29.77 (9.87) 16.80 (13.32) Add/(less): Translation adjustments (0.11) (0.18) Closing balance of the present value of defined 178.70 27.56 29.00 1990.14 As at 31-3-2017 Trust-managed provident fund plan As at 31-3-2018 2156.30 As at 31-3-2017 385.85 439.61 As at 31-3-2018 Gratuity plan 17.26 crore d) Changes in the fair value of plan assets representing reconciliation of the opening and closing balances thereof are as follows: 2146.56 2270.10 312.75 323.70 185.64 178.83 517.73 535.97 benefit obligation Particulars 168.78 (13.08) (14.52) 3.44 10.83 13.11 1996.84 2146.56 283.25 155.58 312.75 185.64 468.40 67.21 72.42 Add: Current service cost 517.73 Opening balance of the present value of defined benefit obligation As at 31-3-2017 Trust-managed provident fund plan As at 31-3-2018 As at As at As at 31-3-2017 31-3-2018 31-3-2017 benefit plan As at As at 31-3-2017 31-3-2018 As at 31-3-2018 Post-retirement medical Company pension plan Gratuity plan crore 2.47 61.53 59.96 Add: Interest cost I (23.05) 18.79 i) Actuarial (gains)/losses arising from changes in demographic assumptions ii) Actuarial (gains)/losses arising from changes in financial assumptions iii) Actuarial (gains)/losses arising from changes in experience adjustments Add/(less): Actuarial (gains)/losses 20.09 25.12 161.80 168.39 | | 19.28 ii) Transfer-in/(out) i) Employee Add: Contribution by plan participants 168.78 178.70 21.14 21.67 11.68 13.16 27.92 28.33 | Opening balance of the fair value of the plan assets Add: Interest income on plan assets * Debt instruments - PSU Bonds 123.17 123.17 66.35 66.35 Debt instruments - State government bonds 135.01 135.01 88.46 88.46 Debt instruments - Central government bonds 216.77 150.47 66.30 165.03 99.91 65.12 Debt instruments - Corporate bonds 14.89 14.89 16.51 55.59 55.59 70.68 70.68 1.46 Special deposit scheme 1.15 1.15 Fixed deposits 0.26 0.26 0.10 0.10 0.50 16.51 0.50 0.29 63.87 63.87 3.89 3.89 Insurer managed funds Mutual funds - Others Mutual funds - Debt - Mutual funds Equity 0.29 Equity instruments 2.41 2.41 0.23 (116.88) 399.87 * Basis used to determine interest income on plan assets: Closing balance of the plan assets Less: Benefits paid Add: Business combination 160.15 172.56 Add: Contribution by plan participants 20.09 25.12 (64.99) Add/(less): Transfer in/(out) 63.20 44.77 26.07 Add: Contribution by the employer 10.04 2.13 46.42 21.84 Difference between actual return on plan assets and interest income Add/(Less): Actuarial gains/(losses) 58.14 c) The changes in the present value of defined benefit obligation representing reconciliation of opening and closing balances thereof are as follows: 439.61 (251.04) 0.69 0.69 Cash and cash equivalents Total Unquoted Quoted Total As at 31-3-2017 As at 31-3-2018 Unquoted Quoted (310.20) 2287.81 Particulars crore 316 e) The fair value of major categories of plan assets are as follows: Disclosure pursuant to Ind AS 19 "Employee Benefits" (contd.) NOTE [50] Notes forming part of the Financial Statements (contd.) 315 The Company expects to fund 45.05 crore (previous year: 6.18 crore) towards its gratuity plan and ₹ 67.68 crore (previous year: 73.21 crore) towards its trust-managed provident fund plan during the year 2018-19. The Trust formed by the Company manages the investments of provident funds and gratuity fund. Interest income on plan assets is determined by multiplying the fair value of the plan assets by the discount rate stated in (g)(i) below both determined at the start of the annual reporting period. 2156.30 Gratuity plan 1.46 Disclosure pursuant to Ind AS 19 "Employee Benefits" (contd.) Notes forming part of the Financial Statements (contd.) 23.33 22.73 22.46 22.58 5.25 7.09 78.12 136.11 23.33 22.73 312.75 323.71 185.64 178.83 78.12 136.11 Net liability/(asset) - non-current Net liability/(asset) - current # Net liability/(asset) Assets 23.33 171.74 180.39 301.13 290.29 67.21 72.42 Current service cost -2345 2016-17 2017-18 2016-17 2017-18 2016-17 2017-18 22.73 2016-17 Trust-managed provident fund plan benefit plan Particulars Company pension plan Post-retirement medical Gratuity plan crore The amounts recognised in Statement of Profit and Loss are as follows: b) # Employer's and employees' contribution due towards Provident Fund. 2017-18 13.11 312.75 178.83 535.97 312.75 323.71 185.64 178.83 71.94 91.10 -Wholly unfunded 2270.10 2146.56 445.79 444.87 -Wholly funded A) Present value of defined benefit obligation As at 31-3-2017 As at 31-3-2018 As at 31-3-2017 As at 31-3-2018 As at 31-3-2017 As at 31-3-2018 As at 31-3-2017 As at 31-3-2018 517.73 178.83 185.64 323.71 78.12 136.11 Liabilities B) Amounts reflected in the Balance Sheet (9.74) (17.71) 312.75 323.71 185.64 178.83 185.64 323.71 78.12 Amount to be recognised as liability or (asset) 0.01 (limit in para 64(b)) Add: Amount not recognised as an asset 2287.81 2156.30 439.61 399.87 Less: Fair value of plan assets 2270.10 2146.56 312.75 0.14 10.83 3.44 2.47 11.68 13.16 0.36 (0.66) Amount included as part of "finance cost" ii 61.53 2.47 3.44 10.82 13.09 67.30 72.50 expense" Amount included in "employee benefits 59.96 61.53 47.24 31.02 38.19 4.32 21.67 21.14 3 1 59.96 LARSEN & TOUBRO 168.96 180.89 73.98 50.83 59.96 61.53 47.24 31.02 38.19 40.61 4.32 84.04 23.63 5.91 15.69 (27.05) (21.93) 12.20 Actual return on plan assets Total (i+ii+iii) Comprehensive Income" iii Amount included as part of "Other 40.61 84.04 Total (1 to 10) (0.01) 5.91 15.69 (21.93) 19.37 34.04 Actuarial losses/(gains) - others (168.78) (178.70) (27.56) (29.00) 23.63 Interest income on plan assets 178.70 21.14 21.67 11.68 13.16 27.92 28.33 Interest cost 59.96 61.53 168.78 NOTE [50] (9.87) between actual return on plan assets (0.02) (0.10) (0.12) 10 Amount capitalised out of the above/ Recovered from S&A 19.91 2.13 (10.04) (2.13) | | | | 0.19 Actuarial losses/(gains) - difference Translation adjustments 0.01 Effect of the limit in para 64(b) Actuarial gain/(loss) not recognised in books 7 0.20 Past service cost 618 (46.42) (21.84) and interest income 9 Advances taken 136.11 crore 283.08 375.60 658.68 252.00 446.47 698.47 Debt instruments - PSU bonds Mutual funds Equity Mutual funds - Others 50.06 8.90 58.96 7.37 45.88 Mutual funds Debt 53.25 451.64 455.76 Debt instruments - Corporate bonds 334.83 66.78 401.61 225.16 83.05 451.64 308.21 518.65 518.65 433.43 433.43 Debt instruments - State government bonds 455.76 Debt instruments - Central government bonds 8.77 0.25 2.70 786.70 2156.30 The average duration of the defined benefit plan obligations at the end of the reporting period is as follows: 1. Gratuity plan 2. Post-retirement medical benefit plan 1369.60 3 Company pension plan As at 31-3-2018 As at 31-3-2017 6.45 7.53 13.95 16.65 Plans 0.25 2287.81 1645.14 2.70 2.76 5.09 7.85 Special deposit scheme Other (payables)/receivables 642.67 | Closing balance of the plan assets 193.08 193.08 199.83 199.83 (12.08) (12.08) f) 7.57 8.77 5.05 NOTE [49] Notes forming part of the Financial Statements (contd.) 312 19.30% 25.82% 1304.10 Disclosure pursuant to Ind AS 12 "Income Taxes" (contd.) 1875.08 (f) (e) (1034.65) (638.29) Total effect of tax adjustments [(i) to (x)] (95.30) Tax expense recognised during the year (e)=(c)+(d) Effective tax rate (f)=(e)/(a) 5.86 (c) i. Unused tax losses for which no deferred tax asset (DTA) is recognised in Balance Sheet Particulars 3785.53 Total 1135.58 Assessment year 2016-17 998.16 Assessment year 2017-18 LARSEN & TOUBRO 1651.79 Tax losses (capital loss on which no DTA is created) Expiry date (Assessment year) As at 31-3-2017 Deferred tax (crore) Expiry date Base amount (Assessment (crore) year) As at 31-3-2018 Deferred tax (crore) Base amount (crore) Assessment year 2018-19 5.05 Tax effect on various other items 42.99 1.47 1.49 1.49 crore Trust-managed provident fund plan Particulars 1.47 Quoted As at 31-3-2017 Total Quoted Unquoted Total Cash and cash equivalents As at 31-3-2018 Unquoted (x) 439.61 339.37 25.94 (ix) Tax effect of losses of current year in joint operations on which no deferred tax benefit is recognised 3.62 165.55 (175.00) (175.00) 100.24 Other (payables)/receivables (0.16) (15.40) | Closing balance of the plan assets 240.33 159.54 399.87 (0.16) 284.17 31-3-2027 196.38 31-3-2026 236.16 31-3-2025 716.71 8.02 NOTE [50] 83.88 34.87 34.93 (10.58) (10.28) (671.75) 19.83 (68.81) (1117.38) 2338.75 2513.37 (C) Tax on employee perquisites borne by the company Expenses in relation to exempt income (A) CSR expenses (368.61) (ii) Tax on expenses not tax deductible: 2.07 (iii) Weighted deductions on R&D expenditure and deduction u/s 801A (viii) Effect of current tax related to earlier years 69.01 430.41 (vii) Effect of current year capital (gain)/loss [net] on which no deferred tax benefit is recognised (3.91) (vi) Effect on deferred tax balances due to the change in income tax rate 3.28 328.78 (v) Tax effect on impairment and fair valuation losses recognised on which deferred tax asset is not recognised (21.86) (16.05) (iv) Effect of previously unrecognised tax losses used to reduce deferred tax expense (368.93) (397.65) 227.15 Disclosure pursuant to Ind AS 19 "Employee Benefits" (contd.) (C) Interest on tax free bonds Dividend income Sr. OOOOO (b) Reconciliation of tax expense and the accounting profit multiplied by domestic tax rate applicable in India: Income tax expense reported in retained earnings (133.40) 133.40 Deferred tax Particulars Current income tax (10.31) 108.62 (15.87) (2.29) 1.08 11.12 89.90 (B) Long term capital gains exempt from tax No. (b) (A) Tax on income exempt from tax: Tax on Accounting profit (c) = (a) * (b) (B) 34.61% 34.61% (a) Profit before tax 6757.84 crore 2016-17 2017-18 (i) (d) (c) Corporate tax rate as per Income tax Act, 1961 7262.38 Notes forming part of the Financial Statements (contd.) NOTE [50] 317 7.68% 7.19% 7.68% 7.19% 5.00% 5.00% 7.19% 5.00% 6.00% 6.00% v) (a) For post-retirement medical benefit plan and Company pension plan, the attrition rate varies from 1% to 12% (previous year: 2% to 8%) for various age groups. (b) For gratuity plan the attrition rate varies from 1% to 11% (previous year: 1% to 6%) for various age groups. The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. 5.00% vi) The interest payment obligation of trust-managed provident fund is assumed to be adequately covered by the interest income on long term investments of the fund. Any shortfall in the interest income over the interest obligation is recognised immediately in the Statement of Profit and Loss. 7.68% LARSEN & TOUBRO Disclosure pursuant to Ind AS 19 "Employee Benefits" (contd.) g) Principal actuarial assumptions at the Balance Sheet date (expressed as weighted averages): Particulars Discount rate: (a) Gratuity plan (b) Company pension plan As at 31-3-2018 As at 31-3-2017 (c) ii) Annual increase in healthcare costs (see note below) iii) Salary growth rate: (a) Gratuity plan (b) Company pension plan iv) Attrition Rate: Post-retirement medical benefit plan Notes forming part of the Financial Statements (contd.) vii) The obligation of the Company under the post-retirement medical benefit plan is limited to the overall ceiling limits. At present, healthcare cost, as indicated in the principal actuarial assumption given above, has been assumed to increase at 5.00% p.a. Particulars 26.15 (C) One percentage point change in actuarial assumptions would have the following effects on the defined benefit obligation of post-retirement medical benefit plan: Particulars Impact of change in health care cost Impact of change in discount rate crore 2016-17 Effect of 1% increase 2017-18 17.53 (22.60) 2016-17 22.91 (27.42) 2017-18 (14.43) 2016-17 28.40 (18.36) 35.33 Effect of 1% decrease viii) (A) One percentage point change in actuarial assumptions would have the following effects on the defined benefit obligation of gratuity plan: Effect of 1% decrease 2017-18 27.70 Effect of 1% increase 2017-18 (24.01) Impact of change in salary growth rate Impact of change in discount rate Effect of 1% increase 2017-18 30.99 (27.08) Effect of 1% decrease 2016-17 2017-18 36.73 (31.16) 2016-17 (25.62) (27.97) 30.46 36.29 (B) One percentage point change in actuarial assumptions would have the following effects on the defined benefit obligation of company pension plan: Particular Impact of change in discount rate crore 2016-17 (32.01) 998.16 1135.58 2133.74 (15.40) 233.89 31-3-2025 428.06 (b) (156.14) (285.22) Opening balance as at April 1 (a) No. Particulars 2016-17 2017-18 Sr. crore (285.22) (400.62) (e) Reconciliation of deferred tax (assets)/liabilities: Net deferred tax (assets)/liabilities (191.26) (371.10) (98.99) 41.26 (10.80) 41.15 18.80 (8.51) (77.07) 9.05 510.22 Tax (income)/expense during the period recognised in: (i) Statement of Profit and Loss in Profit or Loss section (98.99) (ii) Statement of Profit and Loss under OCI section 194.17 31-3-2026 Particulars Company pension plan Trust-managed provident fund plan Post-retirement medical benefit plan Gratuity Plan crore The amounts recognised in Balance Sheet are as follows: a) 314 Defined contribution plans - Note {[1](k)(ii)(A)}: Amount of ₹ 124.47 crore (previous year: ₹ 118.34 crore) is recognised as an expense. (ii) Defined benefit plans - Note {[1](k)(ii)(B)}: (i) Disclosure pursuant to Ind AS 19 "Employee Benefits": 519.59 NOTE [50] 313 (285.22) (400.62) (0.39) Acquired under business combination [Note 60] Closing balance as at March 31 (c) (0.15) (iv) Hedging reserve (other than through OCI) 133.40 (iii) Retained earnings 108.62 (15.87) Notes forming part of the Financial Statements (contd.) (16.45) (123.21) (371.10) (740.19) (d) Components of deferred tax (assets) and liabilities recognised in the Balance Sheet and Statement of Profit or Loss: 1373.95 5920.32 1696.25 7411.12 Total 1126.93 4884.39 1332.26 5718.83 dimunition in value of investments on which no DTA is created Temporary differences arising out of revaluation of tax base of assets (on account of indexation benefit) Deferred tax 247.02 crore As at 31-3-2017 Base amount 1035.93 1692.29 Deductible temporary differences towards provision for (a) Base amount No. Particulars As at 31-3-2018 Sr. crore Unrecognised deductible temporary differences for which no deferred tax asset (DTA) is recognised in Balance Sheet (140.44) ii. Deferred tax 363.99 Sr. (b) O Particulars (d) Difference in book depreciation and income tax depreciation Provision for doubtful debt and advances Deferred tax expense/(income) Other temporary differences (f) (e) (880.64) 5.21 (213.79) (208.68) Gain/(loss) on derivative transactions 36.89 (b) Items disallowed u/s 43B of Income Tax Act, 1961 (14.07) 2016-17 2017-18 As at 31-3-2017 150.54 Balance Sheet As at 136.47 Disputed statutory liabilities claimed on payment basis u/s 43B of the Income Tax Act, 1961 Statement of Profit or Loss (a) 31-3-2018 No. 58.68 58.68 45.01 6.56 0.50 0.54 0.54 2017-18 Total Subsidiary: 297.01 5. Mr. D. K. Sen (Whole-time Director) 6. L&T Finance Limited 297.01 LARSEN & TOUBRO Notes forming part of the Financial Statements (contd.) NOTE [51] (c) Disclosure of related party transactions: (contd.) Sr. Nature of transaction/relationship/major parties No. vi. Investments including subscription to equity and preference shares considered as equity (including application money paid) Amount Amounts for major parties crore Mr. M. V. Satish (Whole-time Director) 2016-17 297.01 7. Mrs. Naina Lal Kidwai Sr. No. Mr. Narayanan Kumar @@ 14. Amount Amounts for major parties 13. Mr. Sanjeev Aga @@@ 12. 11. Mr. Subramanian Sarma 10. Mr. Ajay Shankar 9. Mr. Thomas Mathew T 8. Mrs. Sunita Sharma Mr. J. D. Patil (Whole-time Director)** 7. 6. Mr. Adil Zainulbhai 5. Mr. Vikram Singh Mehta 4. Mr. M. Damodaran 3. Mr. Subodh Bhargava 2. Mr. M. M. Chitale 1. Non-Executive Directors Sr. No. Non-Executive Directors Mr. Akhilesh Krishna Gupta Subsidiaries, including: 750.00 L&T Shipbuilding Limited L&T Shipbuilding Limited Joint venture: L&T Infrastructure Development Projects Limited 388.00 388.00 2041.57 2041.57 2429.57 210.00 761.08 210.00 Total ix. Sale/Redemption of investments Subsidiary: Subsidiaries, including: L&T Technology Services Limited Total 210.00 Mr. Arvind Gupta ## 761.08 325 Notes forming part of the Financial Statements (contd.) NOTE [51] (c) Disclosure of related party transactions: (contd.) 326 2017-18 2016-17 crore Sr. L&T Seawoods Limited viii. Purchase of investments from 111.76 396.19 L&T Finance Holdings Limited 2771.16 Joint ventures, including: L&T-MHPS Boilers Private Limited L&T-MHPS Turbine Generators Private Limited 436.57 2000.00 261.01 (0.25) (0.03) (0.22) 1262.84 750.00 276.24 L&T Special Steels and Heavy Forgings Private Limited 260.65 Total 3032.17 Total 214.43 L&T Special Steels and Heavy Forgings Private Limited 214.43 Joint venture: 111.76 L&T Technology Services Limited 181.76 111.76 181.76 Subsidiary: Investment in preference shares considered as debt vii 1262.59 L&T Shipbuilding Limited 15. 323 16. Total 0.14 0.13 L&T-Chiyoda Limited 0.14 0.13 Associate: 124.02 394.35 544.27 132.96 87.07 178.54 L&T-MHPS Boilers Private Limited L&T Deccan Tollways Limited L&T Infrastructure Development Projects Limited 1786.25 1070.75 Joint ventures, including: 364.41 Nabha Power Limited 188.42 L&T Parel Project LLP 281.62 1231.51 770.34 2359.81 1370.43 L&T Seawoods Limited L&T Metro Rail (Hyderabad) Limited Subsidiaries, including: Sale of goods/contract revenue & services 415.69 ii. 3430.70 Purchase/lease of property, plant and equipment Total Nature of transaction/relationship/major parties V. L&T Hydrocarbon Engineering Limited L&T Shipbuilding Limited L&T Valves Limited Subsidiaries, including: Sale of property, plant and equipment iv. 26.47 9.50 0.01 Total L&T-MHPS Turbine Generators Private Limited iii. 0.02 0.02 0.01 Joint ventures: 1.25 Larsen & Toubro Infotech Limited 13.67 2.20 L&T Hydrocarbon Engineering Limited 9.38 5.75 26.45 9.49 L&T Construction Equipment Limited Subsidiaries, including: L&T Infrastructure Development Projects Limited Amount Amounts for major parties Amount Amounts for major parties No. 169.61 244.57 Hi-Tech Rock Products & Aggregates Limited 428.06 729.89 1121.13 1497.24 L&T Shipbuilding Limited Purchase of goods & services (including commission paid) Subsidiaries, including: Amount Amounts for major parties Amount Amounts for major parties 2016-17 2017-18 crore L&T Geostructure LLP i. No. Sr. @ Ceased w.e.f. May 15, 2016 ## Appointed w.e.f. July 1, 2017 ### Ceased w.e.f. May 2, 2018 Disclosure of related party transactions: *** @@ Appointed w.e.f. May 27, 2016 @@@ Appointed w.e.f. May 25, 2016 Ceased w.e.f. August 1, 2016 (c) w.e.f. July 1,2017 (till June 30, 2017 Whole-time Director) Appointed w.e.f. July 1, 2017 ** # Group Chairman w.e.f. October 1, 2017 Mr. Bahram Vakil *** 17. Mr. Swapan Dasgupta @ Nature of transaction/relationship/major parties 237.24 172.14 Joint ventures, including: Nature of transaction/relationship/major parties Sr. 2016-17 Sale of receivables 2017-18 crore 324 (c) Disclosure of related party transactions: (contd.) NOTE [51] Notes forming part of the Financial Statements (contd.) 3452.06 3303.53 Total 3.33 2.10 Magtorq Private Limited 1.10 1802.47 2323.92 L&T-MHPS Boilers Private Limited L&T-MHPS Turbine Generators Private Limited 1382.61 352.83 1675.16 Mr. Sushobhan Sarker ### 530.79 3.82 7.01 Feedback Infra Private Limited 1.50 2.58 L&T-Chiyoda Limited Associates, including: No. Transaction entered during the year (Yes/No) Amount Amounts for major parties 0.65 9.95 6.47 327 Notes forming part of the Financial Statements (contd.) NOTE [51] (c) Disclosure of related party transactions: (contd.) 328 crore 2017-18 2016-17 Sr. Nature of transaction/relationship/major parties No. 2.00 Amount Amounts for major parties xvii. Rent received, overheads recovered and miscellaneous income Subsidiaries, including: 532.50 422.94 Larsen & Toubro Infotech Limited 77.58 67.78 L&T Technology Services Limited 49.04 L&T Hydrocarbon Engineering Limited 122.10 90.99 L&T Geostructure LLP Amount Amounts for major parties 107.92 L&T Kobelco Machinery Private Limited 0.65 106.47 XV. Dividend received Subsidiaries, including: 535.59 405.47 Larsen & Toubro Infotech Limited 264.98 149.48 L&T Technology Services Limited 95.57 99.05 L&T Finance Holdings Limited 93.58 Total 93.58 60.90 Total 535.59 405.47 xvi. Commission received, including those under agency arrangements Subsidiary: 7.95 5.82 L&T Construction Equipment Limited 7.95 5.82 Joint venture: 2.00 L&T Hydrocarbon Engineering Limited 108.46 77.44 90.38 4.50 9.07 6.54 4.16 4.64 7.97 5.53 36.81 30.98 Larsen Toubro Arabia LLC Total XIX. Interest received from Subsidiaries, including: 9.45 109.69 L&T Shipbuilding Limited Nabha Power Limited 42.13 56.83 71.21 62.41 Marine Infrastructure Developer Private Limited 69.64 Joint ventures, including: 102.05 79.54 L&T Special Steels and Heavy Forgings Private Limited 102.05 78.98 Total 248.30 Joint ventures, including: 7.07 36.81 90.07 L&T-MHPS Boilers Private Limited 40.86 35.50 L&T-Sargent & Lundy Limited 13.58 17.70 L&T-MHPS Turbine Generators Private Limited 9.64 Associate: 17.78 2.77 L&T-Chiyoda Limited 17.78 30.98 2.77 0.08 0.07 Mr. D.K. Sen 0.08 0.07 Total 640.74 515.85 xviii. Guarantee charges recovered from Subsidiaries, including: Nabha Power Limited L&T Shipbuilding Limited L&T Hydrocarbon Engineering Limited Larsen & Toubro (Saudi Arabia) LLC Key management personnel: 18.01 15.81 18.01 Total 420.80 5.50 (9.25) (3.75) xii Charges paid for miscellaneous services Subsidiaries, including: 137.62 139.13 Larsen & Toubro Infotech Limited 105.35 101.42 L&T Aviation Services Private Limited L&T Cutting Tools Limited 17.86 Joint ventures, including: 4.36 3.64 L&T-Sargent & Lundy Limited 4.18 3.62 Associates, including: 0.19 Feedback Infra Private Limited 0.17 Total 141.98 142.96 xiii. Rent paid, including lease rentals under leasing/hire purchase arrangements 23.74 Subsidiaries, including: 294.89 124.41 420.80 X. Net inter corporate deposits given/(returned) Subsidiaries, including: L&T Shipbuilding Limited Nabha Power Limited EWAC Alloys Limited (1202.30) (1593.81) (286.50) (986.21) (1409.00) 698.27 (503.95) L&T Realty Limited L&T Seawoods Limited (3.75) Joint venture: (189.00) 211.89 387.50 L&T Special Steels and Heavy Forgings Private Limited 211.89 387.50 (990.41) (1206.31) Total xi. Net inter corporate borrowing taken/(repaid) Subsidiaries, including: L&T Seawoods Limited L&T Hydrocarbon Engineering Limited (174.13) L&T Electrical & Automation FZE PT Tamco Indonesia Total 12.65 xiv.(b) Charges recovered for deputation of employees to related parties Subsidiaries, including: L&T Parel Project LLP L&T Electrical & Automation FZE 88.00 84.47 24.58 22.39 8.54 8.97 L&T Construction Equipment Limited L&T Geostructure LLP Joint ventures, including: 11.06 L&T-MHPS Boilers Private Limited L&T Infrastructure Development Projects Limited Associate: L&T-Chiyoda Limited Total 11.40 14.30 4.65 3.99 0.50 0.64 1.97 1.21 2.17 2.14 15.81 L&T Special Steels and Heavy Forgings Private Limited Total 1.55 1.50 1.16 1.37 0.80 0.79 0.28 0.31 1.16 1.37 Notes forming part of the Financial Statements (contd.) NOTE [51] (c) Disclosure of related party transactions: (contd.) LARSEN & TOUBRO crore 2017-18 2016-17 Sr. PT Tamco Indonesia 6.16 6.99 Mr. Shailendra Roy (Whole-time Director) 1.38 1.19 Amount Amounts for major parties L&T Electricals & Automation Saudi Arabia Company Limited LLC L&T Electrical & Automation FZE 11.06 xiv. (a) Charges incurred for deputation of employees from related parties Subsidiaries, including: Amount Amounts for major parties Amount Amounts for major parties No. Nature of transaction/relationship/major parties 12.65 Mr. R. Shankar Raman (Whole-time Director & Chief 4. Financial Officer) Larsen Toubro Arabia LLC Mr. S. N. Subrahmanyan (Chief Executive Officer and Managing Director)# 211.74 No 73. No WOS of L&T Realty Limited L&T Realty FZE 72. No WOS of Larsen & Toubro Infotech Limited L&T Information Technology Services (Shanghai) Co. Ltd. 71. No No No LARSEN & TOUBRO WOS of Larsen & Toubro Infotech Limited WOS of Larsen & Toubro Infotech Limited Subsidiary of Larsen & Toubro Infotech Limited 70. L&T Infotech Financial Services Technologies Inc. 69. Larsen & Toubro Infotech LLC 68. No WOS of Larsen & Toubro Infotech Limited Larsen & Toubro Infotech Canada Limited 67. No WOS of Larsen & Toubro Infotech Limited Larsen & Toubro Infotech GmbH 66. Yes Larsen & Toubro Infotech South Africa (PTY) Limited No Notes forming part of the Financial Statements (contd.) Disclosure of related parties/related party transactions pursuant to Ind AS 24" Related Party Disclosures" (a) List of related parties over which control exist and status of transactions entered during the year: Yes Yes 37. 38. L&T Infra Investment Partners Advisory Private Limited L&T Infra Investment Partners Trustee Private Limited WOS of L&T Infrastructure Finance Company Limited Yes WOS of L&T Infrastructure Finance Company Limited No Subsidiary of Larsen & Toubro International FZE Subsidiary Larsen & Toubro (East Asia) SDN.BHD 79. L&T Modular Fabrication Yard LLC 78. NOTE [51] Yes Larsen & Toubro (Oman) LLC 77. Yes No WOS of Larsen & Toubro International FZE WOS of Thalest Limited Servowatch Systems Limited 76. 75. Thalest Limited Yes Yes WOS of L&T Global Holdings Limited Subsidiary Larsen & Toubro Hydrocarbon International Limited LLC 74. Larsen & Toubro International FZE Subsidiary of Larsen & Toubro International FZE No No WOS of L&T Capital Company Limited Subsidiary WOS L&T Construction Equipment Limited 55. Yes Subsidiary L&T Technology Services Limited 54. Yes Subsidiary L&T Metro Rail (Hyderabad) Limited 53. Yes WOS of L&T Power Development Limited Nabha Power Limited Yes 52. WOS of L&T Power Development Limited L&T Himachal Hydropower Limited 51. Yes WOS of L&T Power Development Limited L&T Arunachal Hydropower Limited 50. No Subsidiary of Larsen & Toubro Infotech Limited Syncordis Software Services India Private Limited $ 49. No Subsidiary of Esencia Technologies, Inc. Esencia Technologies India Private Limited~~ Yes Yes 56. WOS Subsidiary of Larsen & Toubro Infotech Limited Subsidiary Larsen & Toubro LLC 65. L&T Infra Contractors Private Limited### 64. AugmentIQ Data Sciences Private Limited## 63. Marine Infrastructure Developer Private Limited 62. Yes WOS Seawoods Realty Private Limited^^ 61. L&T Infrastructure Engineering Limited Yes Seawoods Retail Private Limited^^ 60. No WOS of L&T Capital Company Limited Sahibganj Ganges Bridge-Company Private Limited^ 59. Yes Yes Subsidiary of L&T Technology Services Limited WOS L&T Hydrocarbon Engineering Limited 58. L&T Thales Technology Services Private Limited 57. Yes WOS No Yes Yes 10. L&T Geostructure LLP 11. L&T Valves Limited Subsidiary WOS Subsidiary WOS Yes Yes Yes Yes 12. L&T Realty Limited WOS Yes EWAC Alloys Limited@ 13. Subsidiary of L&T Realty Limited Yes 14. L&T Parel Project LLP Subsidiary of L&T Realty Limited Yes 15. Chennai Vision Developers Private Limited WOS of L&T Realty Limited Yes 16. L&T South City Projects Limited% Subsidiary of L&T Realty Limited Yes L&T Asian Realty Project LLP 17. 9. 8. Sr. Name of the Subsidiary Company No. 1. L&T Cutting Tools Limited* 2. Bhilai Power Supply Company Limited Wholly owned subsidiary (WOS) Subsidiary Yes Yes 3. Spectrum Infotech Private Limited ** WOS Yes Kesun Iron and Steel Company Private Limited 4. Subsidiary Yes 5. L&T Electricals and Automation Limited WOS Yes 6. Hi-Tech Rock Products and Aggregates Limited WOS Yes 7. L&T Seawoods Limited WOS Yes L&T Shipbuilding Limited L&T Vision Ventures Limited Subsidiary of L&T Realty Limited Yes No 27. L&T Housing Finance Limited WOS of L&T Finance Holdings Limited Yes 28. L&T Infra Investment Partners Subsidiary of L&T Infrastructure Finance Company Limited No 29. L&T Finance Limited WOS of L&T Finance Holdings Limited Yes 30. Subsidiary of Syncordis S.A. Luxembourg L&T Information Technology Spain, S.L. No 31. L&T Capital Markets Limited 32. L&T Investment Management Limited 33. L&T Mutual Fund Trustee Limited 34. Syncordis PSF S.A.$$ 35. L&T Infrastructure Finance Company Limited 36. L&T Infra Debt Fund Limited WOS of L&T Finance Holding Limited WOS of L&T Finance Holdings Limited WOS of L&T Finance Holdings Limited Subsidiary of Syncordis S.A. Luxembourg WOS of L&T Finance Holdings Limited WOS of L&T Finance Holdings Limited WOS of Larsen & Toubro Infotech Limited Syncordis Limited$$ 26. No 18. L&T Power Limited Subsidiary Yes 19. L&T Cassidian Limited^^ WOS Yes 20. L&T General Insurance Company Limited*** WOS Yes 21. L&T Aviation Services Private Limited WOS Yes 22. Subsidiary of Syncordis S.A. Luxembourg Syncordis France SARL$$ 25. No Subsidiary of Larsen & Toubro Infotech GmbH Syncordis S.A. Luxembourg$$ 48. 24. Subsidiary L&T Finance Holdings Limited 23. Yes Subsidiary Larsen & Toubro Infotech Limited Yes 3. No L&T Westend Project LLP~~~ 5. L&T Interstate Road Corridor Limited 7. L&T Chennai-Tada Tollway Limited 9. L&T BPP Tollway Limited 11. L&T Rajkot-Vadinar Tollway Limited @ The Company has sold its stake on March 19, 2018. (ii) Names of joint ventures with whom transactions were carried out during the year: Sr. No. Joint Ventures Joint Ventures L&T Port Kachchigarh Limited* Ahmedabad-Maliya Tollway Limited L&T Halol-Shamlaji Tollway Limited Krishnagiri Walajahpet Tollway Limited Devihalli Hassan Tollway Limited L&T Howden Private Limited Larsen & Toubro Electromech LLC*** L&T-Sargent & Lundy Limited Sr. No. 4. 6. 8. 10. 12. 13. L&T Deccan Tollways Limited 14. L&T Sapura Shipping Private Limited 15. L&T Samakhiali Gandhidham Tollway Limited 16. L&T Sapura Offshore Private Limited 17. 2. Kudgi Transmission Limited 3. Magtorq Private Limited Incorporated on August 8,2017 Incorporated on July 14, 2016 Λ ^^ Applied for strike off # ## The Company through its subsidiary sold its stake on September 28, 2017 Merged with Larsen & Toubro Infotech Limited w.e.f. April 1, 2017 ### % The Company through its subsidiary has sold its stake on March 20, 2017 %% Incorporated on March 17, 2017 Reclassified from joint venture to subsidiary due to additional purchase of stake on August 16, 2017 1. $ $$ The Company through its subsidiary has acquired stake on December 15, 2017 321 Notes forming part of the Financial Statements (contd.) NOTE [51] (contd.) (b) (i) Name of associates with whom transactions were carried out during the year: Sr. No. Associate Companies 322 1. L&T-Chiyoda Limited 2. Feedback Infra Private Limited@ 3. The Company through its subsidiary has acquired stake on December 11, 2017 The Company through its subsidiaries acquired stake on June 1,2017 18. 19. Sr. No. Provident Fund Trust 1. Larsen & Toubro Officers & Supervisory Staff Provident Fund 2. Larsen & Toubro Limited Provident Fund of 1952 3. Larsen & Toubro Limited Provident Fund 4. L&T Kansbahal Officers & Supervisory Provident Fund 5. L&T Kansbahal Staff & Workmen Provident Fund Sr. No. Gratuity Trust 32. 1. 2. Larsen & Toubro Gratuity Fund Superannuation Trust Larsen & Toubro Limited Senior Officers' Superannuation Scheme LARSEN & TOUBRO Executive Directors Mr. A.M. Naik (Group Executive Chairman)* Notes forming part of the Financial Statements (contd.) NOTE [51] (contd.) (iv) Name of key management personnel and their relatives with whom transactions were carried out during the year: Sr. No. 1. Sr. No. 2. Executive Directors Larsen & Toubro Officers & Supervisors Gratuity Fund L&T-Gulf Private Limited (iii) Name of post-employment benefit plans with whom transactions were carried out during the year: .**The joint venture is formed on April, 5, 2017 L&T Sambalpur- Rourkela Tollway limited 20. L&T-MHPS Boilers Private Limited 21. L&T Infrastructure Development Projects Limited 22. L&T-MHPS Turbine Generators Private Limited 23. Panipat Elevated Corridor Limited 24. Raykal Aluminium Company Private Limited 25. Krishnagiri Thopur Toll Road Limited 26. *** Reclassified from joint venture to subsidiary due to additional purchase of stake on August 16, 2017 L&T Special Steels and Heavy Forgings Private Limited Western Andhra Tollways Limited 28. PNG Tollway Limited 29. Vadodara Bharuch Tollway Limited 30. L&T Kobelco Machinery Private Limited 31. L&T Transportation Infrastructure Limited 33. L&T MBDA Missile Systems Limited** LTIDPL INDVIT Services Limited (formerly known as L&T Western India Tollbridge Limited) * Merged with Infrastructure Development Projects Limited w.e.f. April 1,2016 27. @@@ In the process of liquidation Merged with L&T Capital Market Limited w.e.f. April 1, 2017 @@ WOS of L&T Finance Holdings Limited L&T Access Distribution Services Limited@@ 40. Yes WOS of L&T Finance Holdings Limited L&T Financial Consultants Limited No 80. Larsen & Toubro Qatar LLC@@@ Subsidiary of Larsen & Toubro International FZE Yes 320 LARSEN & TOUBRO Notes forming part of the Financial Statements (contd.) Yes NOTE [51] Sr. No. Name of the Subsidiary Company Nature of relationship Transaction entered during the year (Yes/No) 81. 82. 83. L&T Overseas Projects Nigeria Limited PT Larsen & Toubro Hydrocarbon Engineering Indonesia L&T Electricals & Automation Saudi Arabia Company Limited LLC Esencia Technologies, Inc.~~ 84. Larsen & Toubro Kuwait Construction General Contracting Company WLL (a) List of related parties over which control exist and status of transactions entered during the year: (contd.) 85. 41. WOS of L&T Financial Consultants Limited (formerly known as L&T Vrindavan Properties Limited) 47. Yes Subsidiary Larsen & Toubro Electromech LLC%% 46. Yes WOS of L&T Power Development Limited L&T Uttaranchal Hydropower Limited 45. Yes Yes WOS of L&T Capital Company Limited WOS L&T Power Development Limited 44. Mudit Cement Private Limited L&T Trustee Company Private Limited Yes WOS L&T Capital Company Limited 42. Transaction entered during the year (Yes/No) Nature of relationship (a) List of related parties over which control exist and status of transactions entered during the year: (contd.) NOTE [51] Notes forming part of the Financial Statements (contd.) No. Name of the Subsidiary Company Sr. 319 Yes 43. Larsen & Toubro Readymix & Asphalt Concrete Industries LLC# 86. Larsen & Toubro (Saudi Arabia) LLC Yes No 은은 No Yes Yes Yes Yes Yes No No No Yes Yes No Yes Subsidiary of Larsen & Toubro International FZE No WOS of L&T Technology Services Limited WOS of Larsen & Toubro Infotech Limited WOS Yes No Yes Kana Controls General Trading & Contracting Company W.L.L. Subsidiary of L&T Electrical & Automation FZE ** The Company has sold its stake on September 27, 2017 Merged with the Company w.e.f. April 1, 2017 *** The Company has sold its stake on September 9, 2016 @ The Company has sold its stake on November 16, 2017 No No Subsidiary of Larsen & Toubro International FZE WOS of Larsen & Toubro International FZE WOS of Tamco Switchgear (Malaysia) SDN. BHD Subsidiaty of L&T Technology Services LLC Subsidiary of Larsen & Toubro Infotech Limited WOS of Larsen & Toubro International FZE Subsidiary of Larsen & Toubro International FZE Subsidiary of Larsen & Toubro International FZE WOS of Larsen & Toubro International FZE Subsidiary Subsidiary 87. Nature of relationship 88. Larsen & Toubro ATCO Saudi LLC 89. Tamco Switchgear (Malaysia) SDN BHD 90. Henikwon Corporation SDN. BHD 91. 92. 93. 94. 95. Larsen & Toubro Heavy Engineering LLC 96. L&T Electrical & Automation FZE 97. Subsidiary of Larsen & Toubro International FZE Subsidiary of Larsen & Toubro International FZE WOS of Larsen & Toubro International FZE Subsidiary of Larsen & Toubro International FZE Subsidiary of Larsen & Toubro International FZE PT Tamco Indonesia Tamco Electrical Industries Australia Pty Ltd. L&T Infotech S. DE R.L. DE C.V.$$ Subsidiary of L&T Realty Limited L&T Global Holdings Limited Larsen & Toubro Infotech Austria GmbH 100. L&T Technology Services LLC 99. Larsen & Toubro T&D SA (Proprietary) Limited 98. 101. 39. 327.84 100.00 Limited 9. L&T EWAC Alloys Limited * India 100.00 100.00 100.00 10. L&T Geostructure LLP India 74.00 74.00 74.00 74.00 74.00 74.00 12. 11. L&T Valves Limited L&T Realty Limited India 95.00 100.00 95.00 95.00 100.00 100.00 100.00 100.00 100.00 100.00 Limited 7. L&T Seawoods Limited India 100.00 100.00 100.00 100.00 100.00 100.00 8. Kesun Iron and Steel Company Private India 95.00 95.00 95.00 India 100.00 100.00 ownership Proportion of direct As at 31-3-2017 Proportion of effective Proportion of effective ownership voting power held (%) (%) Interest (%) held (%) Indian subsidiaries 13. L&T Power Limited India 99.99 99.99 99.99 99.99 99.99 99.99 Proportion 100.00 ownership voting power of effective 100.00 100.00 India 100.00 100.00 100.00 100.00 100.00 100.00 335 Notes forming part of the Financial Statements (contd.) NOTE [53] (contd.) Sr. No. Name of the subsidiary company Principal place of business Proportion of direct ownership (%) As at 31-3-2018 Proportion of effective Interest (%) Hi-Tech Rock Products and Aggregates 6. 100.00 11.29 7.39 7.41 5.32 5.84 5.19 4.93 95,20,455 Note: The basic and diluted EPS and number of potential equity shares on account of conversion of foreign currency convertible bonds for the year 2016-17 have been restated pursuant to the issue of bonus equity shares in the ratio of 1:2 (one bonus equity share of * 2 each for every two equity share of ₹2 each held). NOTE [53] Disclosure pursuant to Ind AS 27 "Separate Financial Statements" Investment in following subsidiary companies, joint venture companies and associates is accounted at cost. Subsidiaries: As at 31-3-2018 Sr. No. Name of the subsidiary company Principal place of business Proportion of direct ownership (%) Proportion of effective ownership voting power Proportion of effective 11.58 Proportion of direct 18.24 55.58 17.00 23.21 17.00 21.54 91.69 113.33 viii. Joint ventures, including: Total L&T-MHPS Boilers Private Limited Due to directors #: (Key management personnel) Total Mr. A. M. Naik Mr. S. N. Subrahmanyan Mr. R. Shankar Raman Mr. Shailendra Roy Mr. D. K. Sen Mr. M. V. Satish Mr. J. D. Patil 49.11 9.77 ownership As at 31-3-2017 Proportion of effective India 100.00 100.00 100.00 4. L&T Shipbuilding Limited India 97.00 97.00 97.00 97.00 97.00 97.00 5. L&T Electricals and Automation Limited India 100.00 100.00 100.00 100.00 100.00 Spectrum Infotech Private Limited ^ 3. 99.90 99.90 Proportion of effective ownership voting power Interest (%) held (%) (%) Interest (%) held (%) Indian subsidiaries 1. 14. L&T Cutting Tools Limited ** 100.00 100.00 100.00 2. Bhilai Power Supply Company Limited India 99.90 99.90 99.90 99.90 India 29.95 L&T Cassidian Limited% 100.00 Merged with the Company w.e.f. April 1, 2017 Λ % 4.50 4.32 2.28 49.11 Applied for strike off Foreign subsidiaries: As at 31-3-2018 Sr. No. Name of the subsidiary company Principal place of business Proportion of direct ownership (%) Proportion Proportion of effective ownership Interest (%) of effective held (%) The Company has sold its stake on September 27, 2017 As at 31-3-2017 The Company has sold its stake on November 16, 2017 * 100.00 100.00 26. Seawoods Realty Private Limited % India 100.00 100.00 100.00 100.00 100.00 100.00 27. Marine Infrastructure Developer Private India 97.00 97.00 97.00 97.00 97.00 97.00 Limited ** 100.00 Proportion of direct 8.14 10.22 10.20 Interest accrued and remaining unpaid at the end of the year to suppliers under MSMED Act Amount of further interest remaining due and payable even in the succeeding years 3.54 5.68 Interest due and payable to suppliers under MSMED Act for payments already made 0.11 Interest paid to suppliers under MSMED Act (Section 16) 0.02 187.48 142.30 0.40 0.28 Interest accrued, due to suppliers under MSMED Act on the above amount, and unpaid Payment made to suppliers (other than interest) beyond the appointed day during the year Interest paid to suppliers under MSMED Act (other than Section 16) 52.83 66.85 Principal amount due to suppliers under MSMED Act, 2006 2016-17 2017-2018 Particulars 8.14 Proportion 338 100.00 of effective voting power ownership (%) of effective ownership voting power Interest (%) Proportion held (%) Foreign subsidiaries 1. Larsen & Toubro LLC USA 95.24 99.19 99.19 95.24 100.00 100.00 2. Larsen & Toubro Hydrocarbon International Kindgom of Limited LLC 90.00 100.00 90.00 100.00 100.00 100.00 India 64.01 64.01 64.01 66.62 66.62 66.62 18. L&T Capital Company Limited India 100.00 100.00 100.00 100.00 100.00 100.00 19. L&T Power Development Limited India 100.00 100.00 L&T Finance Holdings Limited 100.00 17. 84.28 100.00 100.00 74.00 74.00 74.00 15. L&T Aviation Services Private Limited India 100.00 100.00 100.00 100.00 100.00 100.00 16. Larsen & Toubro Infotech Limited India 82.96 82.96 82.96 84.28 84.28 100.00 100.00 100.00 100.00 23. L&T Infrastructure Engineering Limited India 100.00 100.00 100.00 100.00 100.00 100.00 24. L&T Hydrocarbon Engineering Limited India 100.00 100.00 100.00 100.00 100.00 100.00 25. Seawoods Retail Private Limited % India 100.00 100.00 100.00 100.00 20. L&T Metro Rail (Hyderabad) Limited India 99.99 99.99 99.99 99.99 99.99 99.99 21. India L&T Technology Services Limited 88.64 88.64 88.64 89.77 89.77 89.77 22. L&T Construction Equipment Limited India 100.00 India * crore L&T Hydrocarbon Engineering Limited L&T Seawoods Limited Total 3.25 3.32 "Major parties" denote entities accounting for 10% or more of the aggregate for that category of transaction during respective period. xxv. Compensation paid to key management personnel: crore Key Management Personnel Short-term 2017-18 Post- Other employee employment long term benefits benefits benefits Short-term Total employee benefits 2016-17 Post- employment benefits Other long term benefits Total Executive Directors: (a) Mr. A. M. Naik (Group Executive 11.58 56.80^ 19.38* 87.76 3.32 21.86 3.25 3.32 6.18 29.85 Larsen & Toubro Officers & Supervisors Gratuity Fund Larsen & Toubro Gratuity Fund 5.01 23.59 1.17 6.26 Total 6.18 29.85 Towards advance contribution/(refund): (175.00) Larsen & Toubro Officers & Supervisors Gratuity Fund Larsen & Toubro Gratuity Fund (142.30) (32.70) Total (175.00) (c) Transaction with superannuation trust Towards employer's contribution: 3.25 Larsen & Toubro Limited Senior Officers' Superannuation Scheme Towards employer's contribution: 5.83 59.90 1.69 8.06 6.20 1.57 7.77 (f) Mr. M. V. Satish 5.86 1.52 7.38 5.96 1.44 7.40 (g) Mr. J. D. Patil ** 3.14 0.81 3.95 Non-Executive Directors: (a) Mr. A. M. Naik (Group Chairman 2.54 1.50 *** w.e.f. October 1, 2017) 6.37 32.21* (e) Mr. D. K. Sen 1.93 Chairman upto September 30, 2017) (b) Mr. S. N. Subrahmanyan 13.99 3.70 17.69 13.26 3.51 16.77 100.00 (c) Mr. R. Shankar Raman 9.16 2.42 11.58 9.00 2.38 11.38 (d) Mr. Shailendra Roy 7.96 1.83 9.79 8.13 10.06 (i) Transaction with approved gratuity fund 59.68 157.93 45.38 xxi. Amount written off as bad debts Joint ventures, including: Krishnagiri Thopur Toll Road Limited Western Andhra Tollways Limited L&T Interstate Road Corridor Limited 0.55 0.31 0.07 0.13 0.55 Total Xxii. Amount recognised in P&L as provision towards bad and doubtful debts (including expected credit loss on account of delay) Subsidiaries, including: (6.03) 4.34 L&T Hydrocarbon Engineering Limited (0.83) Nabha Power Limited Total 2.93 33.06 33.06 (c) Disclosure of related party transactions: (contd.) LARSEN & TOUBRO crore 2017-18 2016-17 Sr. Nature of transaction/relationship/major parties No. Amount Amounts for major parties Amount Amounts for major parties XX. Interest paid to Subsidiaries, including: 124.87 45.38 L&T Hydrocarbon Engineering Limited L&T Seawoods Limited 98.24 25.02 40.27 Joint venture: L&T Infrastructure Development Projects Limited 1.87 L&T Electricals & Automation Saudi Arabia Company Limited LLC (7.25) NOTE [51] (c) Disclosure of related party transactions: (contd.) 330 Sr. No. Nature of transaction/relationship/major parties XXIV. Contribution to post-employment benefit plan crore 2017-18 2016-17 Amount Amounts for major parties Amount Amounts for major parties Transaction with trust managed provident fund (i) Towards employer's contribution: 64.13 59.68 Larsen & Toubro Officers & Supervisory Staff Provident Fund Larsen & Toubro Limited Provident Fund of 1952 54.35 8.45 51.52 6.64 Total 64.13 Notes forming part of the Financial Statements (contd.) 329 950.00 0.75 2.22 Joint ventures, including: 22.69 24.11 PNG Tollway Limited 22.11 L&T-MHPS Boilers Private Limited 21.66 Total 16.66 (b) Other Non-Executive Directors 28.45 Amount recognised in P&L on account of impairment loss/provision on investment: Subsidiaries, including: 0.75 Larsen & Toubro Hydrocarbon International Limited LLC 0.68 Joint venture: 950.00 L&T Infrastructure Development Projects Limited 950.00 Total xxiii. 28.15 3.82 64.42 No. major parties As at 31-3-2018 Amount Amounts for As at 31-3-2017 crore Amount Amounts for major parties iv. Loans and advances recoverable Subsidiaries, including: 2134.44 3199.61 L&T Shipbuilding Limited 763.09 932.58 L&T Geostructure LLP 223.11 Nabha Power Limited 615.10 1587.64 Joint ventures, including: Category of balance/relationship/major parties 1621.11 Sr. (d) Amount due to/from related parties: (contd.) 867.35 627.85 L&T Shipbuilding Limited 867.35 605.10 Joint ventures: 987.58 264.42 L&T Special Steels and Heavy Forgings Private Limited 217.73 Kudgi Transmission Limited 509.49 L&T Infrastructure Development Private Limited 260.36 264.42 Total 1854.93 892.27 331 Notes forming part of the Financial Statements (contd.) NOTE [51] 332 Subsidiaries, including: 1665.63 1399.58 6.35 vi. Unsecured loans (including lease finance) Subsidiaries, including: L&T Seawoods Limited L&T Hydrocarbon Engineering Limited 426.30 5.52 129.91 5.52 294.89 426.30 5.52 Total vii. Advances received in the capacity of supplier of goods/services classified as "advances from customers" in the Balance Sheet Subsidiaries, including: 74.69 L&T Metro Rail (Hyderabad) Limited 90.12 73.15 6.35 L&T Special Steels and Heavy Forgings Private Limited 19.45 L&T Metro Rail (Hyderabad) Limited 1184.98 L&T-MHPS Boilers Private Limited 215.18 L&T-MHPS Turbine Generators Private Limited 210.22 Associates, including: 0.39 4.36 L&T-Chiyoda Limited 0.79 3.96 Total 3755.94 4869.60 V. Advances against equity contribution Subsidiaries: 19.45 6.35 L&T Uttaranchal Hydropower Limited 19.45 Total 2481.00 1791.00 0.43 0.18 L&T Metro Rail (Hyderabad) Limited L&T Seawoods Limited Joint ventures, including: L&T-MHPS Boilers Private Limited L&T Infrastructure Development Projects Limited L&T Samakhiali Gandhidham Tollway Limited L&T Deccan Tollways Limited Krishnagiri Walajahpet Tollway Limited Associate: L&T-Chiyoda Limited LARSEN & TOUBRO crore As at 31-3-2018 Amount Amounts for major parties As at 31-3-2017 Amount Amounts for major parties 458.44 528.35 188.22 212.29 64.03 Subsidiaries, including: 289.15 Accounts receivable No. 70.27 19.38 4.04 3.82 4.37 154.07 68.78 16.66 4.37 32.21 117.65 ^ Post-employment benefits include gratuity 55.04 crore **Appointed w.e.f. July 1, 2017. * Represents encashment of past service accumulated leave *** Represents pension Notes forming part of the Financial Statements (contd.) NOTE [51] (contd.) (d) Amount due to/from related parties (including commitments): Sr. Category of balance/relationship/major parties i. 404.08 78.87 65.55 L&T Geostructure LLP 234.82 108.78 Joint ventures, including: 1019.17 1844.04 L&T-MHPS Boilers Private Limited 276.37 1171.07 L&T-MHPS Turbine Generators Private Limited 700.05 605.53 Associates, including: 0.61 1.99 Feedback Infra Private Limited Magtorq Private Limited 1.27 0.57 Total L&T-Chiyoda Limited iii. Investment in debt securities 118.89 98.12 Larsen & Toubro (Oman) LLC 103.27 40.66 78.42 38.19 43.30 33.22 125.63 42.68 44.68 0.15 0.15 Total 747.74 Total ii. Accounts payables, including other payables Subsidiaries, including: 771.22 634.97 L&T Shipbuilding Limited 78.23 Hi-Tech Rock Products & Aggregates Limited 89.21 932.43 NOTE [51] The Company has amounts due to suppliers under The Micro, Small and Medium Enterprises Development Act, 2006, [MSMED Act] as at March 31, 2018. The disclosure pursuant to the said Act is as under: Contribution to political parties during the year 2017-18 is Nil (previous year: Nil) 1.60 5.30 L&T Hydrocarbon Engineering Limited L&T Technology Services Limited L&T Construction Equipment Limited 47.25 33.59 8.93 84.39 Larsen & Toubro Heavy Engineering LLC L&T Shipbuilding Limited Subsidiaries, including: x.(a) Capital commitment given 7.79 6.74 1.99 Total 6.74 Larsen & Toubro Limited Senior Officers' Superannuation Scheme 7.79 6.74 Amount due to: (i) Superannuation trust (c) 61.75 45.05 11.70 8.75 50.05 36.31 7.79 Joint venture: 0.13 L&T Special Steels and Heavy Forgings Private Limited 2.13 0.96 1.87 3.63 0.80 Total Magtorq Private Limited L&T-Chiyoda Limited Feedback Infra Private Limited 3.89 5.50 Associates, including: 1086.15 2232.20 NOTE [57] L&T-MHPS Turbine Generators Private Limited L&T-MHPS Boilers Private Limited 3386.85 0.13 Total 84.52 8.93 x.(b) Revenue commitment given Subsidiaries, including: Total 1476.64 L&T Shipbuilding Limited 1185.88 L&T Geostructure LLP 1260.35 290.20 Joint ventures, including: 1205.16 1660.62 Larsen & Toubro Gratuity Fund Larsen & Toubro Officers & Supervisors Gratuity Fund Amount due to: Kindgom of 4.35 100.00 100.00 4.35 100.00 100.00 Saudi Arabia 4. L&T Global Holdings Limited UAE 100.00 100.00 100.00 100.00 100.00 100.00 As at 31-3-2017 of effective Proportion Proportion As at 31-3-2018 voting power Larsen & Toubro (Saudi Arabia) LLC of effective ownership business No. Principal place of Name of the associate company Sr. Associate companies: Proportion of direct ownership 2687.30 3. 55.58 (i) 61.75 45.05 Approved gratuity fund (b) 10.63 9.02 Total 10.07 8.38 Larsen & Toubro Officers & Supervisory Staff Provident Fund 10.63 9.02 Amount due to: (i) Trust managed provident fund (a) Notes forming part of the Financial Statements (contd.) NOTE [51] (d) Amount due to/from related parties: (contd.) LARSEN & TOUBRO crore As at 31-3-2018 Saudi Arabia Sr. No. Amount Amounts for major parties As at 31-3-2017 Amount Amounts for major parties ix. Post employment benefit plan Category of balance/relationship/major parties Proportion 5051.36 Notes forming part of the Financial Statements (contd.) Weighted average number of equity shares outstanding Profit after tax as per accounts (crore) Basic earnings per share Particulars LARSEN & TOUBRO Basic and Diluted Earnings per share [EPS] computed in accordance with Ind AS 33 "Earnings per Share": NOTE [52] Notes forming part of the Financial Statements (contd.) 2. The amount of outstanding balances as shown above are unsecured and will be settled/recovered in cash. "Major parties" denote entities account for 10% or more of the aggregate for that category of balance during respective period. # Includes commission due to non-executive directors 3.08 crore (as at 31-3-2017: 3.55 crore). Note: 1. All the related party contracts / arrangements have been entered on arms' length basis. 48.63 61.29 Total 25.08 Basic EPS (*) 25.08 21.84 L&T-MHPS Boilers Private Limited 31.99 52.73 Joint ventures, including: 0.90 Larsen & Toubro Heavy Engineering LLC 9.06 1.81 L&T Electricals & Automation Saudi Arabia Company Limited LLC 2.46 3.52 Nabha Power Limited 16.64 PNG Tollway Limited Diluted earnings per share Profit after tax as per accounts (crore) Weighted average number of equity shares outstanding 2016-17 95,20,455 2017-18 Weighted average number of potential equity shares on account of conversion of foreign currency convertible bonds Particulars The following potential ordinary shares are anti-dilutive and are therefore excluded from the weighted average number of equity shares for the purpose of diluted earnings per share: 2 2 Face value per share (*) 38.86 38.37 1,40,32,64,145 1,40,41,83,368 D=B+C A/D Diluted EPS (*) Weighted average number of equity shares outstanding for diluted EPS 5453.74 1,39,85,23,545 47,40,600 2017-18 2016-17 A 5387.30 B 1,40,06,13,951 8.56 5453.74 1,39,85,23,545 38.46 39.00 Add: Weighted average number of potential equity shares on account of employee stock options ABC 5387.30 1,40,06,13,951 35,69,417 A/B Subsidiaries, including: balances Provision for doubtful debts related to the amount of outstanding 693.54 L&T Metro Rail (Hyderabad) Limited 2261.68 1329.55 Subsidiaries, including: Revenue commitment received xii. 1063.20 715.45 Total 620.45 442.75 233.45 482.00 L&T Uttaranchal Hydropower Limited L&T Metro Rail (Hyderabad) Limited 1063.20 715.45 Subsidiaries: NOTE [51] (d) Amount due to/from related parties: (contd.) 334 Sr. Category of balance/relationship/major parties No. 1396.43 As at 31-3-2018 major parties crore As at 31-3-2017 Amount Amounts for major parties xi. Commitment to fund Amount Amounts for 333 L&T Parel Project LLP 397.04 χίν. Total 0.77 0.77 0.77 L&T Shipbuilding Limited Subsidiary: xiii. Capital commitment received 60.00 25.95 2400.35 1405.65 26.27 20.43 13.08 13.63 13.70 L&T Asian Realty Project LLP 149.67 237.62 L&T Construction Equipment Limited 156.46 Joint ventures, including: 195.41 76.10 L&T MBDA Missile Systems Limited L&T Deccan Tollways Limited L&T Infrastructure Development Projects Limited Krishnagiri Walajahpet Tollway Limited L&T Samakhiali Gandhidham Tollway Limited L&T BPP Tollway Limited Total 15.24 138.67 Proportion 667.58 394.67 of direct 늙은 Sr. No. Particulars Product warranties Expected tax liability in respect of indirect taxes Litigation related obligations Contractual rectification Others Total cost- construction contracts 1. Balance as at 1-4-2017 21.25 2. Class of provisions Additional provision during the year 181.89 36.24 8.22 263.34 474.70 153.64 17.99 231.59 3. Provision used during the year (10.15) (31.84) (41.99) 4. Unused provision reversed during the year 23.72 crore Movement in provisions: a) 74.00 74.00 74.00 15. PNG Tollway Limited India 13.26 72.11 13.26 72.11 16. L&T Kobelco Machinery Private Limited India 51.00 51.00 51.00 51.00 Disclosures pursuant to Ind AS 37 "Provisions, Contingent Liabilities and Contingent Assets" A Proportion of direct ownership is less than 0.01%. * The joint venture is formed on April 05, 2017. NOTE [54] 50.00 50.00 50.00 (0.14) 50.00 51.00 51.00 India L&T MBDA Missile Systems Limited * L&T-Sargent & Lundy Limited 18. 17. India (7.64) (191.69) (199.47) Sr. No. Particulars crore 2017-18 2016-17 a. Paid as Auditor (i) Statutory audit fees 1.90 2.45 (ii) Limited review of standalone and consolidated financial statements on a quarterly basis 1.50 1.30 b. For Taxation matters 0.46 NOTE [56] 0.27 0.20 For Reimbursement of expenses e. 0.58 Auditors' remuneration (excluding service tax): 0.52 d. 0.25 0.30 For Company law matters C. Proportion For Other services including certification work 74.00 NOTE [55] Expected tax liability in respect of indirect taxes represents mainly the differential sales tax liability on account of non- collection of declaration forms. 5. Additional provision for unwinding of interest and change in discount rate 0.29 0.49 0.78 16 9 6. Transfer under scheme of arrangement 0.50 0.50 7. Balance as at 31-3-2018 (7=1+2+3+4+5+6) 35.47 178.65 8.71 225.29 amount of the expected cost of meeting such obligations of rectification/replacement. The timing of the outflows is expected to be within a period of 2 to 4 years from the date of the Balance Sheet. Product warranties: The Company gives warranties on certain products and services, undertaking to repair or replace the items that fail to perform satisfactorily during the warranty period. Provision made as at March 31, 2018 represents the iv. iii. ii. Nature of provisions: Provision for litigation related obligations represents liabilities that are expected to materialise in respect of matters in appeal. Contractual rectification cost represents the estimated cost the Company is likely to incur during defect liability period as per the contract obligations in respect of completed construction contracts accounted under Ind AS 11 "Construction Contracts". Disclosure in respect of contingent liabilities is given as part of Note 29 to the Balance Sheet. i. Disclosures pursuant to Ind AS 37 "Provisions, Contingent Liabilities and Contingent Assets" (contd.) NOTE [54] Notes forming part of the Financial Statements (contd.) 337 466.11 17.99 b) India 0.48 14. As at 31-3-2018 Principal place Proportion of Sr. of business direct Name of the joint venture No. ownership (%) Proportion of effective ownership Interest (%) As at 31-3-2017 Proportion of direct ownership (%) Proportion of effective ownership Interest (%) 1. L&T Chennai-Tada Tollway Limited India Λ 0.02 India L&T Samakhiali Gandhidham Tollway Limited 3. 97.45 Λ LARSEN & TOUBRO 97.45 India L&T Rajkot-Vadinar Tollway Limited 2. 97.45 Λ 97.45 Λ 97.45 Joint ventures: Notes forming part of the Financial Statements (contd.) L&T Special Steels and Heavy Forgings Private Limited of effective of effective ownership ownership voting power (%) Interest (%) held (%) (%) Interest (%) held (%) 1. Gujarat Leather Industries Limited @ India 50.00 50.00 50.00 336 @Under liquidation 42.85 42.85 42.85 42.85 NOTE [53] (contd.) 42.85 India Magtorq Private Limited 2. 50.00 50.00 50.00 42.85 0.02 Notes forming part of the Financial Statements (contd.) 4. 97.45 0.01 97.45 10. L&T Howden Private Limited India 50.10 50.10 50.10 50.10 11. L&T-MHPS Boilers Private Limited India 51.00 51.00 51.00 51.00 75.50 97.45 75.50 75.50 75.50 Raykal Aluminium Company Private Limited India 13. 51.00 51.00 51.00 India L&T-MHPS Turbine Generators Private Limited 12. 51.00 Devihalli Hassan Tollway Limited India 97.45 6. 98.12 26.24 98.12 26.24 India Ahmedabad-Maliya Tollway Limited L&T Transportation Infrastructure Limited 97.45 97.45 India 97.45 L&T Infrastructure Development Projects Limited 9. 5. India 97.45 97.45 Λ 97.45 Krishnagiri Walajahpet Tollway Limited 8. 47.75 Λ India Λ Λ 47.75 97.45 Λ L&T Halol-Shamlaji Tollway Limited India 7. Qatar 342 3. Jointly Controlled Operations (Investigation, Design, Supply and Erection of necessary lift systems with all electrical and mechanical components including surge protection systems). India 4. Mallanna Sagar Reservoir India LnT-Prasad-RK Infra JV^ 5. Larsen & Toubro Limited L&T-KBL-MAYTAS UJV Jointly Controlled Operations (Design, Supply, Erection, Testing & Commissioning of 25 KV, 50HZ, Single Phase, Traction Over-head Equipment, Switching Stations, SCADA and other associated works, in the state of Karnataka and Andhra Pradesh, India.). 6. L&T-BRAPL JV (package II) India Jointly Controlled Operations (Transmission of 735 Mld treated water associated with all Civil, Electrical & Mechanical works at Hyderabad). Jointly Controlled Operations (Construction of Reservoir of 50 TMC, formation of earth bund with all associated components for Reach 2 and adjoining Reach 3). Construction of Sewage Treatment Plant of 7.5 MLD at Alshamal. Notes forming part of the Financial Statements (contd.) NOTE [59] (contd.) Sr. Name of the joint operation No. Principal place of business 7. Waterleau Consortium India 224.608 2. L&T-BRAPL JV (package III) 0.011 0.012 (0.012) (0.012) 2016-17 0.064 0.012 0.013 (0.013) (0.013) Total 5.663 L&T-KBL (UJV) Hyderabad 219.412 8.687 236.934 (17.27) 219.664 || 2017-18 5151.582 5088.117 5662.762 5437.687 2016-17 4211.099 4084.404 4556.758 4311.137 Joint operation (with specific ownership of activity carried out through the arrangement): Description of the interest Design and construction of Special Bridge across Narmada River Structure for Dedicated Freight Corridor Corporation. Sr. Name of the joint operation No. 1. L&T Sojitz Consortium Principal place of business India 5.196 India consortium IIS-L&T Consortium Description of the interest Jointly Controlled Operations (Design, Supply, Erection, Testing & Commissioning of 25 KV, 50HZ, Single Phase, Traction Over-head Equipment, Switching Stations, and other associated works, in the state of Karnataka and Andhra Pradesh, India.). Design & Construction of 8 Special Steel Bridges over water main and Railways and across creek & rivers including Ulhas Damanganga, Par & Tapi rivers, involving Bridge Structure, approaches in formation in embankments with 1 Major Bridge, 3 Minor Bridges and 1 RUB, guide bunds and protection works including testing and commissioning on Design-Build Lumpsum price basis for JNPT Vadodara Section of Western Dedicated Freight Corridor (Phase-2). Construction of Medigadda Barrage. Dredging, Reclamation, Revetment, Quarrying and NAV Aids for project Sea-Bird, Phase- IIA at Naval Base, Karwar. Salalah Airport Project. Construction of 400KV Underground cable line and OHL from 400 KV Sohar IPP 3 GS to 400 KV Sohar Free Zone. Construction of new 400KV OHL from IBRI to IZKI and 400 KV reactors. Construction of 400/132 KV Grid stations at Qabel and Associated works. DC of ST Works for Double Line Rly involving TD Syst El Aut. Sig. TMS Interlocking of LC Gates Dispatch Tel. Sys FOCS GSM(R) Dig. Elec. Ex. Syst Master Clock Syst for JNPT VADODARA Sec.-422 KM including TC on Design-Build LS Basis of WDFC Phase 2. Civil Building And Track Works Contract Ctp-14. Design Supply Installation Testing and Commissioning of 2x25 kv Overhead Equipments Traction Sub-Stations Auxiliary Stations Switching Stations Auto Transformer Stations and SCADA System on Design-Build Lump Sum Price Basis for JNPT -Makarpur section. Civil Building And Track Works Contract Package- 3 (R). 18. Sojitz Corporation-Gayathri India Projects Ltd-L&T consortium 19. PESB and Larsen & Toubro Joint Venture Malaysia 20. Scomi Engineering Bhd-L&T consortium India Execution of 500 KV Transmission Line Tender in Malaysia. RLBU Mumbai Monorail Project. 21. Sojitz Corporation-L&T India consortium ^ The joint operation has been formed on October 11, 2017 ^^ The joint operation has been formed on August 1, 2017 Design Supply Installation Testing and Commissioning of 2x25 kv Overhead Equipments Traction Sub-Stations Auxiliary Stations Switching Stations Auto Transformer Stations and SCADA System on Design-Build Lump Sum Price Basis for Rewari- Makarpura. 343 LARSEN & TOUBRO 0.052 India Sojitz Corporation-L&T India 9. PES Engg P ltd-L&T Consortium India 10. L&T ISDPL-DI (JV)^^ India 11. L&T Galfar Consortium Oman 12. L&T Oman-L&T consortium Oman 8. 13. Oman 14. L&T Oman-L&T consortium Oman 15. Sojitz Corporation-L&T India consortium 16. Sojitz Corporation-L&T India consortium 17. L&T Oman-L&T consortium 2017-18 1 29. 346 NOTES 345 Figures for the previous year have been regrouped/re-classified to conform to the figures of the current year. NOTE [64] The company's existing accounting policy conforms to the above clarification. In Appendix B, it is clarified that the date of transaction to determine the exchange rate to use on initial recognition of related asset, expense or income is the date on which the initial recognition of the non-monetary asset or non-monetary liability arising from the payment or receipt of advance consideration. On March 28, 2018, the Ministry of Corporate Affairs notified Companies (Indian Accounting Standards) Amendment Rules, 2018 and inserted Appendix B, Foreign Currency Transactions and Advance Consideration in Ind AS 21. Ind AS 21 "The Effects of Changes in Foreign Exchange Rates" The Company's current revenue recognition policy is broadly aligned to the principles enunciated in Ind AS 115 and does not require any material change except for realty business. In terms of Ind AS 115, revenue of realty business will be recognised at the time of delivery of units to the customers as compared to revenue recognition based on percentage completion method currently followed as per the Guidance note issued by the Institute of Chartered Accountants of India. The management is in the process of implementing Ind AS 115 and does not expect any material impact on the Company's financial position as at March 31, 2018 and on the financial results of the Company in the first year of implementation viz. financial year commencing on April 1, 2018 except as above. The Ministry of Corporate Affairs notified Ind AS 115 "Revenue from Contracts with Customers" in respect of accounting periods commencing on or after April 1, 2018, superseding Ind AS 11 "Construction Contracts" and Ind AS 18 "Revenue". B. Ind AS 115 "Revenue from Contracts with Customers" A. Disclosure pursuant to Ind AS 8 "Accounting Policies, Changes in Accounting Estimates and Errors" on new Ind AS that has been issued but is not effective as of the closing day of the reporting period: (87.61) 1783.81 (3794.12) 1922.70 flows Amounts reported in statement of cash crore NOTE [63] Total changes from financing cash flows (refer to Sr. No. 2 above) Particulars Repayment of non-current borrowings Proceeds from non-current borrowings Consolidated Financial Statements 2017-18 LARSEN & TOUBRO DELOITTE HASKINS & SELLS LLP Indiabulls Finance Centre, Tower 3 348 Our opinion on the consolidated Ind AS financial statements above and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matters with respect to our reliance on the work done and the reports of other auditors and the financial information certified by the Management. (e) The audit of the consolidated financial information for the year ended March 31, 2017 was carried out by us jointly with another firm of chartered accountants, and the report had expressed unmodified opinion in relation thereto. (d) The consolidated Ind AS financial statements include the financial information of 20 subsidiaries, whose financial information reflect total assets of 84.67 crore as at March 31, 2018, total revenue of 61.95 crore and net cash inflows amounting to 20.31 crore for the year ended on that date, as considered in the consolidated Ind AS financial statements which have not been audited by their auditors. The consolidated Ind AS financial statements also include the Group's share of profit after tax (net) of 1.36 crore and total comprehensive income (net) of 1.38 crore for the year ended March 31, 2018, as considered in the consolidated Ind AS financial statements, in respect of 5 associates and 2 joint ventures, whose financial information have not been audited by us. These financial information are unaudited and have been furnished to us by the Management and our opinion on the consolidated Ind AS financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, associates and joint ventures, is based solely on such unaudited financial information. In our opinion and according to the information and explanations given to us by the Management, the financial information of these subsidiaries, associates and joint ventures are not material to the Group. (c) The consolidated Ind AS financial statements include the financial information of 3 joint operations whose financial information reflect total assets of 34.28 crore as at March 31, 2018, and total revenues of 5.32 crore and net cash outflows amounting to * Nil for the year ended on the date. The financial information of these joint operations is unaudited and has been furnished to us by the Management and our opinion on the consolidated Ind AS financial statements, in so far as it relates to the amounts and disclosures included in respect of these joint operations, is based solely on such unaudited financial information. In our opinion and according to the information and explanations given to us by the Management, the financial information of these joint operations is not material to the Group. (b) The consolidated Ind AS financial statements include the financial information of 73 subsidiaries, whose financial information reflect total assets of 1,07,664.88 crore as at March 31, 2018, total revenues of 43,824.89 crore and net cash inflows amounting to 1,875.64 crore for the year ended on that date, as considered in the consolidated Ind AS financial statements which have not been audited by us. The consolidated Ind AS financial statements also include the Group's share of total loss after tax (net) of 559.98 crore and total comprehensive loss (net) of 540.58 crore for the year ended March 31, 2018, as considered in the consolidated Ind AS financial statements, in respect of 2 associates and 13 joint ventures, whose financial information have not been audited by us. The financial information of these subsidiaries, associates and joint ventures have been audited by other auditors whose reports have been furnished to us by the Management and our opinion on the consolidated Ind AS financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, associates and joint ventures, and our report in terms of sub-section (3) of Section 143 of the Act, in so far as it relates to the aforesaid subsidiaries, associates and joint ventures, is based solely on the reports of such other auditors. (a) The consolidated Ind AS financial statements include the financial information of 27 joint operations included in the standalone financials of the respective entities of the Group whose financial information reflect total assets of ₹4,801.11 crore as at March 31, 2018 and total revenues of ₹5,459.95 crore and net cash inflows amounting to ₹ 189.64 crore for the year ended on the date. The financial information of these joint operations have been audited by other auditors whose reports have been furnished to us by the Management and our opinion in so far as it relates to the amounts and disclosures included in respect of these joint operations, and our report in terms of sub-section (3) of Section 143 of the Act, in so far as it relates to the aforesaid joint operations is based solely on the reports of such other auditors. Other Matters In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of reports of the other auditors on separate financial statements/financial information of the joint operations, subsidiaries, associates and joint ventures referred to below in the Other Matters paragraph, the aforesaid consolidated Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the Ind AS and other accounting principles generally accepted in India, of the consolidated state of affairs of the Group, its joint operations, associates and joint ventures as at March 31, 2018, and their consolidated profit, consolidated total comprehensive income, consolidated cash flows and consolidated statement of changes in equity for the year ended on that date. Opinion We believe that the audit evidence obtained by us and other auditors in terms of their reports referred to in sub-paragraphs (a) and (b) of the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the consolidated Ind AS financial statements. 347 An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the consolidated Ind AS financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the consolidated Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Parent's preparation of the consolidated Ind AS financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Parent's Board of Directors, as well as evaluating the overall presentation of the consolidated Ind AS financial statements. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated Ind AS financial statements are free from material misstatement. Our responsibility is to express an opinion on these consolidated Ind AS financial statements based on our audit. In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. Auditors' Responsibility The Parent's Board of Directors is responsible for the preparation of these consolidated Ind AS financial statements in terms of the requirements of the Companies Act, 2013 (hereinafter referred to as the "Act") that give a true and fair view of the consolidated financial position, consolidated financial performance (including other comprehensive income), consolidated statement of cash flows and the consolidated statement of changes in equity of the Group including its joint operations, associates and joint ventures in accordance with the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India. The respective Board of Directors of the companies included in the Group and of its joint operations, associates and joint ventures are responsible for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group, and of its joint operations, associates and joint ventures for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the consolidated Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated Ind AS financial statements by the Directors of the Parent, as aforesaid. Management's Responsibility for the Consolidated Ind AS Financial Statements We have audited the accompanying consolidated Ind AS financial statements of LARSEN & TOUBRO LIMITED (hereinafter referred to as the "Parent") and its subsidiaries (the Parent and its subsidiaries together referred to as the "Group"), which includes Group's share of profit/ loss in its associates and its joint ventures and which also includes 31 joint operations of the Group accounted on a proportionate basis, comprising the Consolidated Balance Sheet as at March 31, 2018, the Consolidated Statement of Profit and Loss (including other comprehensive income), the Consolidated Statement of Cash Flows, and the Consolidated Statement of Changes in Equity, for the year then ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "the consolidated Ind AS financial statements"). Report on the Consolidated Ind AS Financial Statements LARSEN & TOUBRO LIMITED TO THE MEMBERS OF INDEPENDENT AUDITORS' REPORT LARSEN & TOUBRO Mumbai 400 013. Elphinstone Road (West) 27th - 32nd Floor, Senapati Bapat Marg Chartered Accountants Amounts reported in the Statement of Cash Flows under financing activities: NOTE [62] (contd.) Notes forming part of the Financial Statements (contd.) Particulars No. Sr. crore Disclosure pursuant to Ind AS 7 "Statement of Cash Flows" - Changes in liabilities arising from financing activities: NOTE [62] The Company's exports qualify for various export benefits offered in the form of duty credit scrips under foreign trade policy framed by Department General of Foreign Trade India (DGFT). Income accounted towards such export incentives amounts to ₹ 111.04 crore (previous year: 27.23 crore). Disclosure pursuant to Ind AS 20 "Accounting for Government Grants and Disclosure of Government Assistance": NOTE [61] The excess of amount of investment by the Company in SIPL over the share capital of SIPL is treated as capital reserve in Company's financial statements and the same is presented separately from other capital reserves [refer to Note 18]. The identity of General Reserve and Securities Premium is preserved and is appearing in the financial statements of the Company in the same form in which they appeared in financial statements of SIPL; and The balance of the retained earnings appearing in the financial statements of the SIPL is aggregated with the corresponding balance appearing in the financial statements of the Company. The financial information in the financial statements of the Company is restated from the effective date April 1, 2017. The assets and liabilities of SIPL are reflected at their carrying amounts. No adjustment is made to reflect the fair values, or recognise any new asset or liability. e. d. C. b. a. No fresh shares are issued to effect the merger as SIPL is wholly owned subsidiary of the Company. Further the merger is accounted using pooling of interest method, involving the following: During the year Spectrum Infotech Private Limited (SIPL), a wholly owned subsidiary, was merged with the Company under a scheme of amalgamation approved by National Company Law Tribunal on March 27, 2018. The merger is effective from the appointed date April 1, 2017. SIPL has a registered office in Bengaluru, India and is engaged in the business of Manufacture of Electronic Systems and Sub-systems. Disclosure pursuant to Ind AS 103 "Business Combinations": 89.469 89.331 0.138 0.001 0.139 Non-current borrowings (Note 19) Current borrowings (Note 23) Current maturities of long term borrowings (Note 24) Total 344 10561.00 936.27 4129.57 5495.16 Closing balance 6 categories) 936.27 58.36 0.64 57.72 (936.27) Other changes (transfer within LTH Milcom Private Limited Interest accrued exchange rates (87.61) 31.88 10558.37 (10.80) 32.62 1111.59 (1100.79) 2312.50 1783.81 7134.28 (770.63) 10.06 The effect of changes in foreign 3 Changes from financing cash flows Opening balance - 23 45 (Repayments)/proceeds from other borrowings (net) NOTE [60] 1.048 14. Civil Works Joint Venture 13. 1.015 (0.033) - 0.413 0.010 0.403 - 2017-18 491.395 489.967 997.411 997.008 2016-17 588.525 587.509 1007.766 1006.718 Aktor-Larsen & Toubro-Yapi Merkezi-STFA-Al Jaber Engineering Joint Venture L&T-Shanghai Urban Construction 12. (0.074) 0.069 (74.950) (56.029) (0.009) (56.020) - 221.616 50.094 106.114 2017-18 94.892 2016-17 169.850 240.545 46.692 121.573 (Group) Corporation Joint Venture CC27 Delhi L&T-Shanghai Urban Construction 11. (Group) Corporation Joint Venture (75.024) 2017-18 1717.123 1500.921 1901.446 1573.576 2016-17 1792.328 1620.490 2238.447 1880.248 2017-18 14.272 - 327.870 0.759 0.643 95.037 0.232 0.232 0.135 0.215 0.582 6.365 150.957 150.195 96.439 23.172 388.537 2017-18 32.907 32.907 18.314 18.314 2017-18 45.023 45.023 71.707 71.707 0.027 2017-18 534.150 526.782 2016-17 179.030 180.016 109.656 110.643 2016-17 28.615 28.612 2016-17 13.958 2017-18 DAEWOO and L&T Joint Venture 15. (Group) Corporation Joint Venture 0.346 0.346 0.194 0.011 0.551 6.334 341.602 (16.597) 358.199 332.202 4.332 5.624 5.624 0.036 (7.784) L&T - Hochtief Seabird Joint Venture 8. 11.461 0.447 0.447 0.285 0.021 0.753 0.755 11.457 2017-18 Metro Tunneling Group 7. 0.030 0.030 0.018 (0.001) 0.047 9.743 10.079 2016-17 (0.007) (0.007) 0.018 0.048 0.059 9.766 10.110 International Metro Civil Contractors 2017-18 Joint Venture 6. 9. 0.759 Metro Tunneling Chennai-L&T 2016-17 2017-18 23.831 (50.477) 2016-17 74.326 0.005 2017-18 87.298 121.548 27.249 29.078 2016-17 94.692 127.633 40.015 74.094 (7.784) 2.593 10.377 58.266 52.606 55.786 93.108 54.269 99.376 2016-17 Shanghai Urban Construction 2017-18 Metro Tunneling Delhi- L&T 10. (Group) Corporation Joint Venture (34.908) (0.510) 0.319 (34.398) (1.309) 0.520 (1.829) 0.162 0.162 (0.013) (0.013) 0.013 0.492 0.492 0.312 0.066 0.870 1.207 Shanghai Urban Construction 23.168 0.001 0.003 2017-18 30.923 31.270 23.263 23.610 2017-18 325.673 401.918 635.825 699.959 2016-17 266.412 278.457 343.945 387.295 2017-18 275.208 250.604 279.741 279.569 2016-17 214.439 190.135 264.506 239.370 65.194 39.595 13.312 13.316 2016-17 68.326 42.686 159.325 140.235 2017-18 254.207 227.628 402.949 376.649 2016-17 110.947 110.947 64.889 64.889 2017-18 22.756 23.290 2.615 2016-17 Energy & Environment JV Larsen & Toubro Ltd - Passavant 27. Besix - Larsen & Toubro Joint Venture 26. 2017-18 Larsen & Toubro Limited & NCC Limited Joint Venture 25. L&T-AL-Sraiya LRDP 6 Joint Venture 24. L&T-Delma Mafraq Joint Venture 23. L&T- Inabensa Consortium 22. Joint Venture (4.049) (4.049) 11.660 (7.650) (7.650) 4.512 12.162 7.611 7.591 41.011 10.805 36.575 2016-17 Engineering BHD Consortium-O&M 2017-18 (0.347) Larsen and Toubro Limited-Scomi (0.347) (0.067) Notes forming part of the Financial Statements (contd.) 1.521 1.521 2.615 171.898 172.037 2017-18 LNT-Shriram EPC Tanzania UJV 28. (0.535) (0.535) 29.978 30.513 26.578 0.278 26.300 11.363 7.727 11.363 (0.041) (0.041) 0.037 25.136 25.136 0.300 0.128 0.172 (43.350) (43.350) (64.201) (64.134) (0.008) 21. 6.739 Notes forming part of the Financial Statements (contd.) 341 (0.987) (0.987) 8.355 8.355 4.486 375.696 0.036 0.036 (0.026) 0.010 2016-17 17.740 12.528 (5.672) (5.672) - 5.699 2017-18 17.696 18.156 L&T-Eastern Joint Venture 19. L&T-IHI Consortium 18. L&T-ISDPL (JV) 17. L&T - STEC JV MUMBAI 16. 0.003 NOTE [59] (contd.) Residual Joint Works Joint Venture crore Company's share For the year 6.739 1.794 8.533 (5.969) (0.378) (0.378) 1.191 0.813 0.500 8.995 2.904 2016-17 Engineering BHD Consortium- 2017-18 Larsen and Toubro Limited-Scomi 20. tax Income Income Total Other Comprehensive Comprehensive Profit after tax Total tax Total Total Expense Income excluding Total Total Assets Liabilities Year Name of the joint operation Sr. No. As at period end (0.008) (0.251) 0.089 0.008 Sr. No. NOTE [59] (contd.) Notes forming part of the Financial Statements (contd.) 339 Jointly Controlled Entity (EPC for construction of Greenfield six-Lane Extradosed Cable Bridge over Ganga River). Saudi Arabia Jointly Controlled Entity (Contract for Detail Design, Construction and Commissioning of Package 2 of The Riyadh Metro Project). Jointly Controlled Entity (Construction of Twin Tunnel between IGI Airport and Sector 21 for DMRC). Jointly Controlled Entity (Contract for Design & Build Package 3, Gold Line Underground, a part of the construction of the Qatar integrated Railway Project). Construction of Tunnel for Delhi MRTS Project of Phase-III). - Jointly Controlled Entity (Construction of UG Stations at Nehru Park, KMC and Pachiyappas College and associated tunnels for CMRL). Jointly Controlled Entity (Construction of Delhi Metro Corridor- Tunnel Project-Phase-CC5). India 50% 15. DAEWOO and L&T Joint Venture India 51% 14. L&T-Shanghai Urban Construction (Group) Corporation Joint Venture 29% 13. Civil Works Joint Venture Qatar 22% 12. Aktor-Larsen & Toubro-Yapi Merkezi- STFA-Al Jaber Engineering Joint Venture (Group) Corporation Joint Venture CC27 Delhi India 68% 11. L&T-Shanghai Urban Construction Corporation Joint Venture India 16. L&T-STEC JV MUMBAI 60% Name of the joint operation interest % Jointly Controlled Entity (Design, Supply, India 100% 22. L&T Inabensa Consortium*** Jointly Controlled Entity (Operation and Maintenance of monorail system). Engineering BHD Consortium-O&M Joint Venture India 50% 21. Larsen and Toubro Limited-Scomi India 60% 20. Larsen and Toubro Limited-Scomi Engineering BHD Consortium-Residual Joint Works Joint Venture UAE 65% 19. L&T-Eastern Joint Venture** Jointly Controlled Entity (Construction and maintenance of 295 Residential Units at Dubai). Jointly Controlled Entity (Implementation of residual joint works for monorail system in Mumbai). Jointly Controlled Entity (Design and Construction of Underground Section including Three Underground Stations at Marol Naka, MIDC and SEEPZ and Associated Tunnels). Jointly Controlled Entity (Construction of Inner Harbour for Project Varsha at Visakapatanam). Jointly Controlled Entity (Construction of Mumbai Trans Harbour Link Project Package 1 & Package). Description of interest India 100% India 100% 18. L&T-IHI Consortium^^^ 17. L&T-ISDPL (JV)^^ 340 Principal place of business India 65% Proportion of ownership Construction, Installation, Testing and 10. Metro Tunneling Delhi- L&T Shanghai Urban Construction (Group) Shanghai Urban Construction (Group) 4. W.L.L- L&T Joint Venture Qatar 80% Al Balagh Trading & Contracting Co 3. Pallonji & Co. Ltd. Joint Venture India 50% Larsen and Toubro Limited-Shapoorji 2. Principal place of business India 49% Desbuild L&T Joint Venture 1. interest % No. Proportion of ownership Name of the joint operation Sr. (a) Name of joint operation (with specific ownership interest in the arrangement): Disclosure in respect of joint operations: NOTE [59] There are no amounts due and outstanding to be credited to Investor Education & Protection Fund as at March 31, 2018. NOTE [58] Notes forming part of the Financial Statements (contd.) LARSEN & TOUBRO L&T-AM Tapovan Joint Venture Corporation Joint Venture 65% Description of interest India 75% Metro Tunneling Chennai-L&T 9. Jointly Controlled Entity (Construction of breakwater, Karwar). India 90% 8. L&T-Hochtief Seabird Joint Venture Jointly Controlled Entity (Construction of Delhi Metro Corridor-Phase II Tunnel Project). India 26% Metro Tunneling Group 7. Jointly Controlled Entity (Construction of Delhi Metro Corridor Phase I Tunnel Project). Joint Venture India 26% International Metro Civil Contractors 6. Pumped Storage Project). India 43% HCC-L&T Purulia Joint Venture 5. Jointly Controlled Entity (Main Construction Works for Al Rayyan Stadium and Precint). Jointly Controlled Entity (Construction of Head Race Tunnel for Tapovan Vishnugad Hydro Electric project in Uttaranchal State). Jointly Controlled Entity (Construction of Jointly Controlled Entity (Design & Build work for Construction of TCS SEZ at Kolkata, West Bengal). Jointly Controlled Entity (Renovation of US Consulate, Chennai). India Commissioning for Mughalsarai - New Bhaupur Jointly Controlled Entity (Design and 23. L&T-Delma Mafraq Joint Venture * (7.822) 626.043 626.603 188.727 186.944 275.057 273.330 141.500 183.162 143.338 184.982 2016-17 2017-18 L&T - AM Tapovan Joint Venture 4. 2016-17 W.L.L- L&T Joint Venture 532.638 531.469 2017-18 Al Balagh Trading & Contracting Co 3. (0.365) (0.365) 1.539 1.174 26.753 57.636 29.329 59.847 2016-17 Larsen and Toubro Limited-Shapoorji 2017-18 Pallonji & Co. Ltd. Joint Venture 2. (0.001) (0.001) 0.001 0.002 (0.001) (0.001) - 7.643 0.001 - (15.465) 2.688 6.572 2016-17 (0.013) (0.013) - 0.013 - 2.966 (0.906) 2017-18 HCC - L&T Purulia Joint Venture 5. (0.692) (0.692) - 0.692 (0.017) (0.017) Section of EDFC Electrical Works). 0.520 0.503 1.727 (0.056) 1.783 (0.557) 0.003 (0.560) (15.465) - - 0.053 0.647 * As at March 31, 2017, proportion of ownership interest was 60% **The joint operation is in the process of liquidation India 56.67% 29. LTH Milcom Private Limited Jointly Controlled Entity (Construction of 318MLD Wastewater Treatment Plant with 10 years O&M at Coronation Pillar, Delhi). Jointly Controlled Entity (Extension of Lake Tanzania 90% 28. LNT-Shriram EPC Tanzania UJV% India 50% 27. Larsen & Toubro Ltd - Passavant Energy & Environment JV ^ Jointly Controlled Entity (DS 150/2 Jabel Ali Sewage Treatment Plant Phase 2). Dubai 50% 26. Besix-Larsen & Toubro Joint Venture Jointly Controlled Entity (Execution of the Roads and Infrastructure in Doha Industrial Area). Jointly Controlled Entity (Supply and construction of 2 parallel 2100 mm diameter steel gravity mains conduit pipes from Palra to Bhureka). Mafraq to AL Ghwaifat Border Post Highway India 55% 25. Larsen & Toubro Limited & NCC Limited Joint Venture Qatar 75% 24. L&T-AL-Sraiya LRDP 6 Joint Venture Jointly Controlled Entity (Improvement of UAE (0.592) 100% ^ The joint operation has been formed on October 12, 2016 ^^ The joint operation has been formed on December 1, 2017 ^^^ The joint operation has been formed on July 14, 2017 *** The joint operation has been formed on April 25, 2016 % The joint operation has been formed on December 25, 2016 Section No.4A). Jointly Controlled Entity. 2017-18 Victoria Pipeline to Tabora, Nzega and Igunga Towers, Tanzania). 2016-17 Desbuild L&T Joint Venture 1. tax Income Comprehensive Comprehensive Profit after tax Total tax Total Other Total Total Expense Income excluding Total Liabilities Income Year Total Assets I(b) Financial interest in joint operation (to the extent of Company's share): LARSEN & TOUBRO crore NOTE [59] (contd.) Company's share Notes forming part of the Financial Statements (contd.) As at period end For the year Sr. No. Name of the joint operation 4587.74 Current assets Inventories 1736.15 Financial assets 11 3697.51 4847.80 Cash and cash equivalents Investments Trade receivables Other bank balances Loans Other financial assets 2131.98 Loans towards financing activities 16 4139.74 10 8 Other non-current assets 3359.47 6 234567 % 2679.90 Loans 7 1793.85 1487.38 50(d) Loans towards financing activities 47133.86 Other financial assets 9 614.32 857.60 70071.77 54931.64 Deferred tax assets (net) 61816.54 12 1512.43 13 35 46524.83 39056.82 245053.35 1649.37 212181.60 352 Consolidated Balance Sheet as at March 31, 2018 (contd.) 52 EQUITY AND LIABILITIES: Equity share capital Other equity Equity attributable to owners of the Company Non-controlling interest Liabilities Non-current liabilities Financial liabilities Borrowings 2772.90 Equity Group(s) of assets classified as held for sale TOTAL ASSETS 19 Other current assets 34654.08 14 6834.34 14300.22 28688.97 3526.87 15 1198.19 1779.09 559.72 486.45 17 26448.01 24927.38 18 4194.59 3286.34 83353.18 76995.32 9464.25 2487.59 Other comprehensive income for the year attributable to: Investments in joint ventures and associates Other investments (Membership No. 70928) MUMBAI, May 28, 2018 349 ANNEXURE "A" TO THE INDEPENDENT AUDITORS' REPORT (Referred to in paragraph "f" under 'Report on Other Legal and Regulatory Requirements' section of our report of even date) Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act") In conjunction with our audit of the consolidated Ind AS financial statements of the Company as of and for the year ended March 31, 2018, we have audited the internal financial controls over financial reporting of LARSEN & TOUBRO LIMITED (hereinafter referred to as "Parent") and its subsidiary companies (hereinafter referred to as the "Group"), which includes internal financial controls over financial reporting of its joint operations, its joint ventures and its associate companies, which are companies incorporated in India, as of that date. Management's Responsibility for Internal Financial Controls The respective Board of Directors of the Parent, its subsidiary companies, its joint operations, its joint ventures and its associate companies, which are companies incorporated in India, are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the respective Companies considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the Institute of Chartered Accountants of India ("ICAI"). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the respective company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013. (Partner) Auditors' Responsibility Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors' judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained and the audit evidence obtained by other auditors of the subsidiary companies, joint operations, joint ventures and associate companies, which are companies incorporated in India, in terms of their reports referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting of the Parent, its subsidiary companies, its joint operations, its joint ventures and its associate companies, which are companies incorporated in India. Meaning of Internal Financial Controls Over Financial Reporting A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Inherent Limitations of Internal Financial Controls Over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that 350 LARSEN & TOUBRO Our responsibility is to express an opinion on the internal financial controls over financial reporting of the Parent, its subsidiary companies, its joint operations, its joint ventures and its associate companies, which are companies incorporated in India, based on our audit. We conducted our audit in accordance with the Guidance Note issued by ICAI and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. P. R. RAMESH Chartered Accountants Other financial liabilities LARSEN & TOUBRO Report on Other Legal and Regulatory Requirements As required by Section 143(3) of the Act, based on our audit and on the consideration of the reports of the other auditors on the financial information of joint operations, subsidiaries, associates and joint venture incorporated in India, referred in the Other Matters paragraph above we report, to the extent applicable, that: (a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated Ind AS financial statements. (b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated Ind AS financial statements have been kept so far as it appears from our examination of those books, returns and the reports of other auditors. (c) The consolidated Balance Sheet, the consolidated Statement of Profit and Loss (including Other Comprehensive Income), the consolidated Statement of Cash Flows and consolidated Statement of Changes in Equity dealt with by this report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated Ind AS financial statements. (d) In our opinion, the aforesaid consolidated Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act. (e) On the basis of the written representations received from the directors of the Parent as on March 31, 2018 taken on record by the Board of Directors of the Parent and the reports of the statutory auditors of its joint operations companies, subsidiary companies, associate companies and joint venture companies incorporated in India, none of the Directors of the Group companies, its joint operations, associate companies and joint venture companies incorporated in India is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164 (2) of the Act. (Firm Registration No. 117366W/W-100018) (f) With respect to the adequacy of the internal financial controls over financial reporting and the operating effectiveness of such controls, refer to our separate Report in "Annexure A", which is based on the auditors' reports of the Parent, subsidiary companies, joint operation companies, associate companies and joint venture companies incorporated in India. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of Parent's internal financial controls over financial reporting. us: i. The consolidated Ind AS financial statements disclose the impact of pending litigations on the consolidated financial position of the Group, its associates and joint ventures. ii. Provision has been made in the consolidated Ind AS financial statements, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts; and iii. There has been no delay in transferring amounts required to be transferred, to the Investor Education and Protection Fund by the Parent and its subsidiary companies, associate companies and joint venture companies incorporated in India. For DELOITTE HASKINS & SELLS LLP (g) With respect to the other matters to be included in the Auditors' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to 55(e) Opinion Other Matters Investment Property Goodwill Other intangible assets Intangible assets under development 223 455 10642.04 11232.97 2143.07 Capital work-in-progress 1944.71 3613.26 1561.78 1398.66 2030.51 432.22 11300.36 11353.23 Financial assets 4345.86 In our opinion to the best of our information and according to the explanations given to us and based on the consideration of the reports of other auditors referred to in the Other Matters paragraph below, the Parent, its subsidiary companies, its joint operations, its joint ventures and its associate companies, which are companies incorporated in India, have, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the respective companies considering the essential components of internal control stated in the Guidance Note. Property, plant and equipment ASSETS: Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting in so far as it relates to 35 subsidiary companies, 1 joint operation, 12 joint venture companies and 2 associate companies, which are companies incorporated in India, is based solely on the corresponding reports of the auditors of such companies incorporated in India. Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting in so far as it relates to 5 subsidiary companies, and 2 associate companies, which are companies incorporated in India, whose financial information is unaudited, and is based solely on the Management's representations provided to us and our opinion on the adequacy and operating effectiveness of the internal financial controls over financial reporting of the Group is not affected as the financial information of such entities is not material to the Group. Our opinion is not modified in respect of the above matters with respect to our reliance on the work done and the reports of other auditors and the financial information certified by the Management. For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm Registration No. 117366W/W-100018) P. R. RAMESH (Partner) Non-current assets (Membership No. 70928) 351 Consolidated Balance Sheet as at March 31, 2018 Note As at 31-3-2018 crore * crore As at 31-3-2017 crore * crore MUMBAI, May 28, 2018 LARSEN & TOUBRO Note As at 31-3-2018 crore (4.20) (0.13) 137.63 I 3.56 Additional tax on dividend paid for the previous year Share application money received during the year Net gain/loss on transactions with non-controlling interest Increase in non-controlling year 42.00 0.02 (21.30) 610.61 Dividend paid for the previous Transfer from/(to) retained earnings during the year Employee share options (net) Utilised for issue of bonus Share issue expenses Impact of business combination assets/liabilities Transfer to non-financial Issue of equity shares income for the year (c+d) Total comprehensive shares (631.33) 31.61 (93.35) - (1960.76) (151.20) (2111.96) (93.35) (93.35) 5.57 37.18 31.61 (4.20) (4.20) (0.13) (0.13) (0.28) (0.28) (0.28) 137.63 137.63 113.83 (441.05) (1960.76) income (d) 635.50 8167.69 (46.19) 7532.19 90.53 (net) through translation interest Debt Equity controlling Hedging reserve instruments Foreign currency Earnings Retained Total Items of other comprehensive income Total Other Non- Reserves and surplus Capital Securities Employee Statutory Redemp- premium share Reserves options tion account Reserve Equity application component Capital money of Foreign reserve pending currency allotment convertible Share Particulars * crore reserve (441.05) Other Comprehen- 94.43 7393.42 (46.19) 162.33 0.93 163.26 90.53 94.43 23.56 70.97 50029.93 3563.60 53593.53 7369.86 634.57 8004.43 7369.86 347.52 478.24 303.25 2742.30 37335.32 8318.85 153.20 280.28 Other comprehensive Profit for the year (c) Balance as at 1-4-2017 sive Income bonds Consolidated Statement of Changes in Equity for the year ended March 31, 2018 (contd.) 3.56 (441.05) 1338.73 1538.52 Interest expense 34.92 (53.53) Effect of exchange rate changes on cash and cash equivalents (80.51) Interest income (31.03) 2369.93 1928.73 Depreciation, amortisation, impairment and obsolescence (748.63) (2748.08) Dividend received 8765.93 Exchange difference on items grouped under financing/investing activities (665.67) (422.62) (Profit)/loss on sale of property, plant and equipment and investment property (net) 11254.90 13248.14 Operating profit before working capital changes (5.58) 88.17 111.39 Employee stock option-discount forming part of employee benefits expense Gain on settlement of debt 56.89 125.74 (Gain)/loss on derivatives at fair value through profit or loss (95.81) (Profit)/loss on sale of stake in subsidiary companies of Realty Segments (34.22) 2217.72 (Profit)/loss on sale/fair valuation of investments (net) (17.88) (686.23) 11516.16 Profit before tax (excluding non-controlling interest and exceptional items) Adjustments for: A. Cash flow from operating activities: crore P. R. RAMESH by the hand of Firm's Registration No. 117366W/W-100018 Chartered Accountants For DELOITTE HASKINS & SELLS LLP In terms of our report attached 24.78 55376.72 5625.00 61001.72 437.77 572.67 153.20 276.08 42.00 8363.02 313.56 3352.91 41837.17 3.56 Balance as at 31-03-2018 27.74 1685.36 1713.10 27.74 divestment/acquisition interest due to dilution/ 3.56 Partner 113.83 (113.83) Membership No. 70928 S. N. SUBRAHMANYAN crore 2017-18 2016-17 Consolidated Statement of Cash Flows for the year ended March 31, 2018 357 Directors SANJEEV AGA (DIN 00022065) SUNITA SHARMA (DIN 02949529) M. M. CHITALE (DIN 00101004) M. DAMODARAN (DIN 02106990) (DIN 02255382) (DIN 00041197) N. HARIHARAN Company Secretary M. No. A3471 VIKRAM SINGH MEHTA SUBODH BHARGAVA (DIN 00035672) R. SHANKAR RAMAN Chief Financial Officer & Whole-time Director (DIN 00019798) Chief Executive Officer & Managing Director Mumbai, May 28, 2018 LARSEN & TOUBRO 70.97 50029.93 3563.60 53593.53 1988.93 1988.93 Number of shares Particulars 2016-17 2017-18 A. Equity share capital Consolidated Statement of Changes in Equity for the year ended March 31, 2018 355 crore Directors SUNITA SHARMA (DIN 02949529) M. M. CHITALE (DIN 00101004) M. DAMODARAN (DIN 02106990) (DIN 02255382) (DIN 00041197) N. HARIHARAN Company Secretary M. No. A3471 VIKRAM SINGH MEHTA SANJEEV AGA (DIN 00022065) Number of shares crore Issued, subscribed and fully paid up equity shares outstanding at the beginning of the year Particulars 356 Other equity B. 186.59 93,29,65,803 280.27 1,40,13,69,456 Issued, subscribed and fully paid up equity shares outstanding at the end of the year 186.30 0.29 14,86,958 0.33 93.35 16,38,898 46,67,64,755 93,14,78,845 186.59 93,29,65,803 Add: Shares issued on exercise of employee stock options during the year Add: Bonus shares allotted during the year SUBODH BHARGAVA (DIN 00035672) R. SHANKAR RAMAN Chief Financial Officer & Whole-time Director (DIN 00019798) Chief Executive Officer & Managing Director S. N. SUBRAHMANYAN 6663.28 8167.69 475.67 635.50 6187.61 7532.19 Non controlling interests Owners of the Company Total comprehensive income for the year attributable to: 177.78 163.26 31.40 0.93 146.38 162.33 Non controlling interests Owners of the Company 49 49 crore 52.62 52.49 Mumbai, May 28, 2018 Membership No. 70928 Partner P. R. RAMESH by the hand of Firm's Registration No. 117366W/W-100018 Chartered Accountants For DELOITTE HASKINS & SELLS LLP In terms of our report attached 1 to 65 NOTES FORMING PART OF THE FINANCIAL STATEMENTS Face value per equity share (*) Diluted earnings per equity share (₹) Basic earnings per equity share (*) 2.00 2.00 43.05 43.20 Equity Reserves and surplus- currency 1721.66 (368.49) - (1701.51) (0.30) (61.14) (21.86) 83.00 42.89 Balance as at 31-3-2017 dilution/ divestment/acquisition Increase in non-controlling interest due to non-controlling interest Net gain/loss on transaction with previous year Additional tax on dividend paid for the Dividend paid for previous year earnings (net of deferred tax) Depreciation charged against retained Employee share options (net) ------ the year 153.20 280.28 8318.85 303.25 2742.30 37335.32 1721.66 (1721.66) (368.49) (368.49) - (1701.51) (92.14) (1793.65) (0.30) (0.30) 62.85 19.96 42.89 (0.12) (0.12) (0.05) (0.05) 154.18 154.18 347.52 478.24 I Adjustments for: Transfer from/(to) retained earnings during Impact of business combination 8164.72 282.22 2659.30 31724.59 6041.23 (20.72) (131.35) 153.20 280.40 Comprehen- bonds Other reserve (net) through interest Total Items of other comprehensive income Total Other Non- Debt Equity controlling Hedging reserve instruments Foreign currency translation tion account Reserve convertible Retained Earnings component Capital Capital Securities Employee Statutory of Foreign reserve Redemp- premium share Reserves options 609.59 (0.12) 44.01 76.03 43994.06 2892.84 46886.90 154.18 (0.05) Share issue expenses I Issue of equity shares year (a+b) | Total comprehensive income for the Other comprehensive income (b) Profit for the year (a) Balance as at 1-4-2016 475.67 6663.28 (5.06) 6187.61 31.40 177.78 (5.06) 146.38 303.51 (131.35) 303.51 6020.51 6041.23 444.27 6485.50 sive Income (Increase)/decrease in trade and other receivables (Increase)/decrease in inventories (14499.91) (642.38) crore 110011.00 1344.11 111355.11 EXPENSES: Manufacturing, construction and operating expenses: 36 Cost of raw materials, components consumed 2016-17 crore 15377.21 Construction materials consumed Purchase of stock-in-trade 178.94 14320.98 699.19 24057.20 1357.76 Excise duty 121274.13 119862.10 1412.03 34 35 (DIN 02255382) M. DAMODARAN (DIN 02106990) M. M. CHITALE (DIN 00101004) SUNITA SHARMA (DIN 02949529) SANJEEV AGA (DIN 00022065) N. HARIHARAN Company Secretary M. No. A3471 (DIN 00041197) Directors 353 Consolidated Statement of Profit and Loss for the year ended March 31, 2018 INCOME: Revenue from operations Other income Total income 2017-18 *crore crore 20716.99 1610.57 2384.91 2090.42 7698.10 6988.24 Finance costs 39 1538.52 1338.73 Depreciation, amortisation, impairment and obsolescence 1928.73 2369.93 109763.16 102590.69 Less: Overheads capitalised 5.19 1.51 Total expenses 109757.97 102589.18 38 VIKRAM SINGH MEHTA Sales, administration and other expenses 15292.48 Sub-contracting charges 24639.02 22560.54 Changes in inventories of finished goods, work-in-progress and (1230.19) 84.00 stock-in-trade and property development Other manufacturing, construction and operating expenses 10520.74 10595.04 Finance cost of financial services business and finance lease activity 6019.74 5362.09 83305.33 78039.82 Employee benefits expense 37 13853.97 SUBODH BHARGAVA (DIN 00035672) R. SHANKAR RAMAN Chief Financial Officer & Whole-time Director (DIN 00019798) Chief Executive Officer & Managing Director 73268.71 523.54 637.92 67566.67 526.60 610.95 67.97 172.14 Current liabilities Financial liabilities Borrowings 26 19331.85 16534.47 Current maturities of long term borrowings 27 15277.47 10078.90 Trade payables 25 28 50(d) 67340.58 226.09 crore As at 31-3-2017 crore crore 22 20 21 280.27 55376.72 186.59 50029.93 55656.99 5625.00 50216.52 3563.60 Provisions Deferred tax liabilities (net) Other non-current liabilities 22 22 23 72914.76 353.95 24 Profit before exceptional items and tax 37794.96 Other financial liabilities 2667.81 240.29 1495.60 212181.60 32 23 33 In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm's Registration No. 117366W/W-100018 by the hand of P. R. RAMESH Partner Membership No. 70928 Mumbai, May 28, 2018 S. N. SUBRAHMANYAN 61736.87 23384.55 30294.86 747.26 1461.97 245053.35 52 29 4848.99 4828.64 77253.27 Other current liabilities Provisions 30 31 27326.97 2483.75 Current tax liabilities (net) Liabilities associated with group(s) of assets classified as held for sale TOTAL EQUITY AND LIABILITIES CONTINGENT LIABILITIES COMMITMENTS (capital and others) NOTES FORMING PART OF THE FINANCIAL STATEMENTS 1 to 65 62 6485.50 Exceptional items Profit before tax (125.74) Settlement of derivative contracts related to current investments 83.65 Consideration received on transfer of foundry business unit 748.63 2748.08 Dividend received from other investments (56.89) 0.57 408.84 534.51 Dividend received from associates Interest received 197.74 229.89 Deposits/loans repaid by associates, joint ventures and third parties 0.66 Consideration received on disposal of subsidiaries (including advance received) 1048.29 2169.01 Profit for the year attributable to: - Owners of the Company Non controlling interests 7369.86 6041.23 634.57 444.27 8004.43 358 (19.60) (9795.94) 3914.50 50.47 (15.50) Cash & cash equivalents discharged pursuant to disposal of subsidiaries Net cash (used in)/from investing activities Cash & cash equivalents acquired pursuant to acquisition of subsidiaries (7.07) (213.77) Consideration paid on acquisition of subsidiaries (410.10) (621.93) Deposits/loans given to associates, joint ventures and third parties (2010.36) (3201.67) (3403.44) Direct taxes refund/(paid) [net] 9856.93 (6627.58) Cash generated from operations (5743.85) (16459.25) (Increase)/decrease in loans and advances towards financing activities 15600.78 9831.67 Cash generated from operations before financing activities 5307.44 11725.82 Increase/decrease) in trade payables and customer advances 1509.77 (2471.33) Net cash (used in)/from operating activities 6663.28 (10031.02) B. Cash flow from investing activities: Investment in joint ventures (321.60) 484.65 Change in other bank balance and cash not available for immediate use (6769.76) 2551.83 (Purchase)/sale of current investments (net) 67.00 428.59 Sale of non-current investments (2977.09) 156.33 (1055.24) (1170.49) Purchase of non-current investments 862.13 Sale of fixed assets (including advance received) (2877.17) Purchase of fixed assets 6655.26 8167.69 177.78 163.26 6485.50 Profit after tax Add: Share in profit/(loss) of joint ventures/associates (net) 55(f) Profit for the year Other comprehensive income A. Items that will not be reclassified to profit or loss: Re-measurements of the net defined benefit Plans Income tax on re-measurements of the net defined benefit Plans 34.84 (5.47) (31.30) 5.95 29.37 (25.35) B. Items that will be reclassified to profit or loss: Debt instruments through other comprehensive income Income tax on debt instruments through other comprehensive income (45.48) (2.05) (5.33) (1.08) 8004.43 (47.53) (395.27) 6880.77 Tax expense: Current tax Deferred tax (net) 11516.16 123.00 8765.93 121.43 11639.16 8887.36 50(a) 3732.27 2834.35 50(a) (533.40) (827.76) 3198.87 2006.59 8440.29 (435.86) 42 (6.41) Income tax on foreign currency translation reserve 555.83 Income tax on effective portion of gains and losses on hedging instruments in a cash flow hedge Cost of hedging reserve Income tax on cost of hedging reserve Other Comprehensive Income for the year [net of tax] Total comprehensive income for the year (8.38) (218.59) 82.68 337.24 1.16 4.17 (0.52) (1.04) 0.64 3.13 91.06 Foreign currency translation reserve Effective portion of gains and losses on hedging instruments in a cash flow hedge crore 97.61 0.49 (133.12) 2.29 98.10 (130.83) Carried forward - Other comprehensive income 79.94 (162.59) 354 LARSEN & TOUBRO Consolidated Statement of Profit and Loss for the year ended March 31, 2018 (contd.) 2016-17 2017-18 Note crore Brought forward - Other comprehensive income crore 79.94 crore (162.59) Stores, spares and tools consumed Note NOTE [1] (contd.) 2058.82 1413.12 Payment (to)/from non-controlling interest (net)- including sale proceeds on divestment of part stake in subsidiary companies 1643.82 53.32 30522.82 (27286.28) 46903.46 (36964.48) 2680.02 Proceeds from other borrowings (net) [Note 62] Repayment of non-current borrowings [Note 62] Proceeds from non-current borrowings [Note 62] 49.50 Proceeds from issue of share capital (including share application money) C. Cash flow from financing activities: crore crore 2016-17 Settlement of derivative contracts related to borrowings 2017-18 149.31 Dividends paid Goodwill on consolidation arising on acquisitions on or after the date of transition represents the excess of(a) consideration paid for acquiring control and (b) acquisition date fair value of previously held ownership interest, if any, in a subsidiary over the Group's share in the fair value of the net assets (including identifiable intangibles) of the subsidiary as on the date of acquisition of control. Goodwill on consolidation is allocated to cash generating units or group of cash generating units that are expected to benefit from the synergies of the acquisition. Goodwill arising on consolidation is not amortised, however, it is tested for impairment annually. In the event of cessation of operations of a subsidiary, the unimpaired goodwill is written off fully. Business combinations arising from transfers of interests in entities that are under common control are accounted at historical cost. The difference between any consideration given and the aggregate historical carrying amounts of assets and liabilities of the acquired entity are recorded in shareholders' equity. 2895.93 9370.46 Net cash (used in)/from financing activities (2174.03) (2470.70) Interest paid (including cash flows on account of interest rate swaps) (391.54) (429.01) Additional tax on dividend (1701.51) (1960.76) 170.51 Consolidated Statement of Cash Flows for the year ended March 31, 2018 (contd.) LARSEN & TOUBRO (h) Operating cycle for current and non-current classification Revenue from construction/project related activity and contracts for supply/commissioning of complex plant and equipment is recognised as follows: 1. Cost plus contracts: Revenue from cost plus contracts is recognised by reference to the recoverable costs incurred during the period plus the margin as agreed with the customer. 2. Fixed price contracts: Contract revenue is recognised only to the extent of cost incurred till such time the outcome of the job cannot be ascertained reliably subject to the condition that it is probable that such cost will LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [1] (contd.) be recoverable. When the outcome of the contract is ascertained reliably, contract revenue is recognised at cost of work performed on the contract plus proportionate margin, using the percentage of completion method. Percentage of completion is the proportion of cost of work performed to-date, to the total estimated contract costs. The estimated outcome of a contract is considered reliable when all the following conditions are satisfied: i. the amount of revenue can be measured reliably; ii. it is probable that the economic benefits associated with the contract will flow to the Group; iii. B. the costs incurred or to be incurred in respect of the transaction can be measured reliably 5. it is probable that the economic benefits associated with the transaction will flow to the Group; and Operating cycle for the business activities of the Group covers the duration of the specific project/contract/product line/service including the defect liability period, wherever applicable and extends up to the realisation of receivables (including retention monies) within the agreed credit period normally applicable to the respective lines of business. (i) Revenue recognition Revenue is recognised based on nature of activity when consideration can be reasonably measured and recovered with reasonable certainty. Revenue is measured at the fair value of the consideration received or receivable and is reduced for estimated customer returns, rebates and other similar allowances. Revenue from operations Revenue for the periods upto June 30, 2017 includes excise duty collected from customers. Revenue from July 1, 2017 onwards is exclusive of Goods and Service tax (GST) which subsumed excise duty. Revenue also includes adjustments made towards liquidated damages and variation wherever applicable. Escalation and other claims, which are not ascertainable/ acknowledged by customers are not taken into account. A. Goodwill on consolidation as on the date of transition i.e. April 1, 2015 represents the excess of cost of acquisition at each point of time of making the investment in the subsidiary over the Group's share in the net worth of a subsidiary. For this purpose, the Group's share of net worth is determined on the basis of the latest financial statements, prior to the acquisition, after making necessary adjustments for material events between the date of such financial statements and the date of respective acquisition. Capital reserve on consolidation represents excess of the Group's share in the net worth of a subsidiary over the cost of acquisition at each point of time of making the investment in the subsidiary. Sale of goods 1. 2. the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the good sold; 362 3. the amount of revenue can be measured reliably; 4. Revenue from sale of manufactured and traded goods is recognised when all the following conditions are satisfied: significant risks and rewards of ownership of the goods are transferred to the buyer; the stage of completion of the contract at the end of the reporting period can be measured reliably; and NOTE [1] (contd.) 361 3544.75 S. N. SUBRAHMANYAN Chief Executive Officer & Managing Director R. SHANKAR RAMAN Chief Financial Officer & Whole-time Director (DIN 00019798) SUBODH BHARGAVA (DIN 00035672) VIKRAM SINGH MEHTA (DIN 00041197) (DIN 02255382) M. DAMODARAN (DIN 02106990) M. M. CHITALE (DIN 00101004) SUNITA SHARMA (DIN 02949529) SANJEEV AGA (DIN 00022065) Directors 359 6798.69 Notes forming part of the Consolidated Financial Statements 224.06 1779.09 Mumbai, May 28, 2018 N. HARIHARAN Company Secretary M. No. A3471 2017-18 2016-17 crore 6834.34 crore 3526.87 1198.19 1779.09 320.31 224.06 8352.84 5530.02 (35.65) 17.88 1198.19 320.31 NOTE [1] Significant Accounting Policies (a) Statement of compliance NOTE [1] (contd.) The consolidated financial statements have been presented to the extent possible, in the same manner as Parent Company's standalone financial statements. Profit or loss and each component of other comprehensive income are attributed to the owners of the Parent Company and to the non-controlling interests and have been shown separately in the financial statements. (iv) Non-controlling interest represents that part of the total comprehensive income and net assets of subsidiaries attributable to interests which are not owned, directly or indirectly, by the Parent Company. (v) The gains/losses in respect of part divestment/dilution of stake in subsidiary companies not resulting in ceding of control, are recognised directly in other equity attributable to the owners of the Parent Company. (vi) The gains/losses in respect of divestment of stake resulting in ceding of control in subsidiary companies are recognised in the Statement of Profit and Loss. The investment representing the interest retained in a former subsidiary, if any, is initially recognised at its fair value with the corresponding effect recognised in the Statement of Profit and Loss as on the date the control is ceded. Such retained interest is subsequently accounted as an associate or a joint venture or a financial asset. (e) Investments in joint venture and associates When the Group has with other parties joint control of the arrangement and rights to the net assets of the joint arrangement, it recognises its interest as joint venture. Joint control exists when the decisions about the relevant activities require unanimous consent of the parties sharing the control. When the Group has significant influence over the other entity, it recognises such interests as associates. Significant influence is the power to participate in the financial and operating policy decisions of the entity but is not control or joint control over the entity. The results, assets and liabilities of joint venture and associates are incorporated in the consolidated financial statements using equity method of accounting after making necessary adjustments to achieve uniformity in application of accounting policies, wherever applicable. An investment in associate or joint venture is initially recognised at cost and adjusted thereafter to recognise the Group's share of profit or loss and other comprehensive income of the joint venture or associate. Gain or loss in respect of changes in other equity of joint ventures or associates resulting in dilution of stake in the joint ventures and associates is recognised in the Statement of Profit and Loss. On acquisition of investment in a joint venture or associate, any excess of cost of investment over the fair value of the assets and liabilities of the joint venture, is recognised as goodwill and is included in the carrying value of the investment in the joint venture and associate. The excess of fair value of assets and liabilities over the investment is recognised directly in equity as capital reserve. The unrealised profits/losses on transactions with joint ventures are eliminated by reducing the carrying amount of investment. The carrying amount of investment in joint ventures and associates is reduced to recognise impairment, if any, when there is objective evidence of impairment. When the Group's share of losses of an associate or a joint venture exceeds the Group's interest in that associate or joint venture (which includes any long term interests that, in substance, form part of the Group's net investment in the associate or joint venture), the Group discontinues recognising its share of further losses. Additional losses are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture. (f) Interests in joint operations When the Group has joint control of the arrangement based on contractually determined right to the assets and obligations for liabilities, it recognises such interests as joint operations. Joint control exists when the decisions about the relevant activities require unanimous consent of the parties sharing the control. In respect of its interests in joint operations, the Group recognises its share in assets, liabilities, income and expenses line-by-line in the standalone financial statements of the entity which is party to such joint arrangement which then becomes part of the consolidated financial statements of the Group when the financial statements of the Parent Company and its subsidiaries are combined for consolidation. Interests in joint operations are included in the segments to which they relate. (g) Business Combination/Goodwill on consolidation The Group accounts for its business combinations under acquisition method of accounting. Acquisition related costs are recognised in the statement of profit and loss as incurred. The acquiree's identifiable assets, liabilities and contingent liabilities that meet the condition for recognition are recognised at their fair values at the acquisition date. Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 360 (iii) The consolidated financial statements of the Group combines financial statements of the Parent Company and its subsidiaries line-by-line by adding together the like items of assets, liabilities, income and expenses. All intra-group assets, liabilities, income, expenses and unrealised profits/losses on intra-group transactions are eliminated on consolidation. The accounting policies of subsidiaries have been harmonised to ensure the consistency with the policies adopted by the Parent Company. The Group's financial statements have been prepared in accordance with the provisions of the Companies Act, 2013 and the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 and amendments thereof issued by Ministry of Corporate Affairs in exercise of the powers conferred by section 133 of the Companies Act, 2013. In addition, the guidance notes/announcements issued by the Institute of Chartered Accountants of India (ICAI) are also applied except where compliance with other statutory promulgations require a different treatment. These financials statements have been approved for issue by the Board of Directors at their meeting held on May 28, 2018. (b) Basis of accounting The Group maintains its accounts on accrual basis following historical cost convention, except for certain financial instruments that are measured at fair value in accordance with Ind AS. Fair value measurements are categorised as below based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety: • • Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at measurement date Notes forming part of the Consolidated Financial Statements (contd.) Level 2 inputs are inputs, other than quoted prices included in level 1, that are observable for the asset or liability, either directly or indirectly; and Above levels of fair value hierarchy are applied consistently and generally, there are no transfers between the levels of the fair value hierarchy unless the circumstances change warranting such transfer. (c) Presentation of financial statements The Balance Sheet and the Statement of Profit and Loss are prepared and presented in the format prescribed in the Schedule III to the Companies Act, 2013 ("the Act"). The Statement of Cash Flows has been prepared and presented as per the requirements of Ind AS 7 "Statement of Cash Flows". The disclosure requirements with respect to items in the Balance Sheet and Statement of Profit and Loss, as prescribed in the Schedule III to the Act, are presented by way of notes forming part of the financial statements along with the other notes required to be disclosed under the notified Accounting Standards and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended. Amounts in the financial statements are presented in Indian Rupees in crore [1 crore = 10 million] rounded off to two decimal places as permitted by Schedule III to the Companies Act, 2013. Per share data are presented in Indian Rupees to two decimal places. (d) Basis of consolidation (i) The consolidated financial statements incorporate the financial statements of the Parent Company and its subsidiaries. For this purpose, an entity which is, directly or indirectly, controlled by the Parent Company is treated as subsidiary. The Parent Company together with its subsidiaries constitute the Group. Control exists when the Parent Company, directly or indirectly, has power over the investee, is exposed to variable returns from its involvement with the investee and has the ability to use its power to affect its returns. (ii) Consolidation of a subsidiary begins when the Parent Company, directly or indirectly, obtains control over the subsidiary and ceases when the Parent Company, directly or indirectly, loses control of the subsidiary. Income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated Statement of Profit and Loss from the date the Parent Company, directly or indirectly, gains control until the date when the Parent Company, directly or indirectly, ceases to control the subsidiary. Level 3 inputs are unobservable inputs for the valuation of assets or liabilities Assets given under a finance lease are recognised as a receivable at an amount equal to the net investment in the lease. Lease income is recognised over the period of the lease so as to yield a constant rate of return on the net investment in the lease. iv. C. D. E. F. the manner in which the probable future economic benefits will be generated including the existence of a market for output of the intangible asset or intangible asset itself or if it is to be used internally, the usefulness of intangible assets; the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and the Group has ability to reliably measure the expenditure attributable to the intangible asset during its development. Development expenditure that does not meet the above criteria is expensed in the period in which it is incurred. Intangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as "intangible assets under development". Intangible assets are amortised on straight line basis over the estimated useful life. The method of amortisation and useful life are reviewed at the end of each accounting year with the effect of any changes in the estimate being accounted for on a prospective basis. The estimated useful life for major categories of the intangible assets are as follows: (i) specialised software: over a period of three to ten years; (ii) technical know-how: over a period of three to seven years; (iii) development costs for new products: over a period of five years; (iv) customer contracts and relationships: over a period of the contract which generally is over seven to ten years; (v) intangible assets with indefinite useful life that are acquired separately are carried at cost less accumulated impairment losses; (vi) fare collection rights obtained in consideration for rendering construction services represent the right to collect fare during the concession period in respect of Build-Operate-Transfer (BOT) projects undertaken by the Group. Fare collection rights are LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) the Group has ability to use or sell the intangible asset; capitalised as intangible asset upon completion of the project at the cumulative construction costs including related margins. Till the completion of the project, the same is recognised as intangible assets under development. Fare collection rights are amortised using the straight line method over the period of concession; and C. B. NOTE [1] (contd.) (I) Investment property Properties (including those under construction) held to earn rentals and/or capital appreciation are classified as investment property and are measured and reported at cost, including transaction costs. Depreciation is recognised using straight line method so as to write off the cost of the investment property less their residual values over their useful lives specified in Schedule II to the Companies Act, 2013, or in the case of assets where the useful life was determined by technical evaluation, over the useful life so determined. Depreciation method is reviewed at each financial year end to reflect the expected pattern of consumption of the future benefits embodied in the investment property. The estimated useful life and residual values are also reviewed at each financial year end and the effect of any change in the estimates of useful life/ residual value is accounted on prospective basis. Freehold land and properties under construction are not depreciated. An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss arising on derecognition of property is recognised in the Statement of Profit and Loss in the same period. (m) Intangible assets Intangible assets are recognised when it is probable that the future economic benefits that are attributable to the asset will flow to the enterprise and the cost of the asset can be measured reliably. Intangible assets are stated at original cost net of tax/duty credits availed, if any, less accumulated amortisation and cumulative impairment. Administrative and other general overhead expenses that are specifically attributable to acquisition of intangible assets are allocated and capitalised as a part of the cost of the intangible assets. Research and development expenditure on new products: (i) Expenditure on research is expensed under respective heads of account in the period in which it is incurred (ii) Development expenditure on new products is capitalised as intangible asset, if all of the following can be demonstrated: 366 A. the technical feasibility of completing the intangible asset so that it will be available for use or sale; the Group has intention to complete the intangible asset and use or sell it; (vii) exploration and evaluation expenditure incurred for potential mineral reserves is recognised and reported as part of "intangible assets under development" when such costs are expected to be either recouped in full through successful exploration and development of the area of interest or alternatively, by its sale; or when exploration and evaluation activities in the area of interest have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically available reserves and active and significant operations in relation to the area are continuing or are planned for the future. Exploration assets are re-assessed on a regular basis and these costs are carried forward provided that at least one of the conditions outlined above is met. All other exploration and evaluation expenditure is recognised as expense in the period in which it is incurred. Amortisation on impaired assets is provided by adjusting the amortisation charge in the remaining periods so as to allocate the asset's revised carrying amount over its remaining useful life. (n) Impairment of assets The obligation is measured at the present value of the estimated future cash flows using a discount rate based on the market yield on government securities of a maturity period equivalent to the weighted average maturity profile of the defined benefit obligations at the Balance Sheet date. Re-measurement, comprising actuarial gains and losses, the return on plan assets (excluding amounts included in net interest on the net defined benefit liability or asset) and any change in the effect of asset ceiling (if applicable) is recognised in other comprehensive income and is reflected in retained earnings and the same is not eligible to be reclassified to profit or loss. Defined benefit costs comprising current service cost, past service cost and gains or losses on settlements are recognised in the Statement of Profit and Loss as employee benefits expense. Interest cost implicit in defined benefit employee cost is recognised in the Statement of Profit and Loss under finance cost. Gains or losses on settlement of any defined benefit plan are recognised when the settlement occurs. Past service cost is recognised as expense at the earlier of the plan amendment or curtailment and when the Group recognises related restructuring costs or termination benefits. In case of funded plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans to recognise the obligation on a net basis. (iii) Long term employee benefits: The obligation recognised in respect of long term benefits such as compensated absences, long service award etc. is measured at present value of estimated future cash flows expected to be made by the Group and is recognised in a similar manner as in the case of defined benefit plans vide (ii) B above. Long term employee benefit costs comprising current service cost and gains or losses on curtailments and settlements, re-measurements including actuarial gains and losses are recognised in the Statement of Profit and Loss as employee benefit expenses. Interest cost implicit in long term employee benefit cost is recognised in the Statement of Profit and Loss under finance cost. (iv) Termination benefits: Termination benefits such as compensation under employee separation schemes are recognised as expense when the company's offer of the termination benefit is accepted or when the Group recognises the related restructuring costs whichever is earlier. (p) Leases The determination of whether an agreement is, or contains, a lease is based on the substance of the agreement at the date of inception. Power generation projects executed under long term Power Purchase Agreements (PPA) with state utilities that are in substance finance leases are classified accordingly. Finance leases: Leases where the all the risks and rewards of ownership of the related assets are substantially transferred to the lessee are classified as finance leases. A. B. Assets taken under finance lease are capitalised at the commencement of the lease at the lower of the fair value or the present value of minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the outstanding liability for each period. Defined benefit plans: The employees' gratuity fund schemes and employee provident fund schemes managed by board of trustees established by the Company, the post-retirement medical care plan and the Parent Company pension plan represent defined benefit plans. The present value of the obligation under defined benefit plans is determined based on actuarial valuation using the Projected Unit Credit Method. B. NOTE [1] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) As at the end of each accounting year, the Group reviews the carrying amounts of its PPE, investment property and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If such indication exists, the PPE, investment property and intangible assets are tested for impairment so as to determine the impairment loss, if and the intangible assets with indefinite life are tested for impairment each year. any. Goodwill Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is determined: (i) in the case of an individual asset, at the higher of the net selling price and the value in use; and (ii) in the case of a cash generating unit (the smallest identifiable group of assets that generates independent cash flows), at the higher of the cash generating unit's net selling price and the value in use. (The amount of value in use is determined as the present value of estimated future cash flows from the continuing use of an asset and from its disposal at the end of its useful life. For this purpose, the discount rate (pre-tax) is determined based on the weighted average cost of capital of the Company suitably adjusted for risks specified to the estimated cash flows of the asset). Notes forming part of the Consolidated Financial Statements (contd.) If recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, such deficit is recognised immediately in the Statement of Profit and Loss as impairment loss and the carrying amount of the asset (or cash generating unit) is reduced to its recoverable amount. For this purpose, the impairment loss recognised in respect of a cash generating unit is allocated first to reduce the carrying amount of any goodwill allocated to such cash generating unit and then to reduce the carrying amount of the other assets of the cash generating unit on a pro-rata basis. (o) Employee benefits (i) Short term employee benefits: Employee benefits such as salaries, wages, short term compensated absences, expected cost of bonus, ex-gratia and performance linked rewards falling due wholly within twelve months of rendering the service are classified as short term employee benefits and are expensed in the period in which the employee renders the related service. (ii) Post-employment benefits: A. Defined contribution plans: The Group's superannuation scheme, state governed provident fund scheme, employee state insurance scheme, social security contributions and employee pension scheme are defined contribution plans. The contribution paid/payable under the schemes is recognised during the period in which the employee renders the related service. 367 When an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit), except for allocated goodwill, is increased to the revised estimate of its recoverable amount, so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss is recognised for the asset (or cash generating unit) in prior years. A reversal of an impairment loss (other than impairment loss allocated to goodwill) is recognised immediately in the Statement of Profit and Loss. the costs incurred or to be incurred in respect of the contract can be measured reliably 365 Assets acquired under finance leases are depreciated on a straight line basis over the lease term. Where there is reasonable certainty that the Group shall obtain ownership of the assets at the end of the lease term, such assets are depreciated based on the useful life adopted by the Group for similar assets. E. In the case of the developmental project business and the realty business, revenue includes profit on sale of investment properties or sale of stake in the subsidiary and/or joint venture companies as the sale/divestments are inherent in the business model. Rendering of services Revenue from rendering services is recognised when the outcome of a transaction can be estimated reliably by reference to the stage of completion of the transaction. The outcome of a transaction can be estimated reliably when all the following conditions are satisfied: 364 1. the amount of revenue can be measured reliably; 2. it is probable that the economic benefits associated with the transaction will flow to the Group; 3. the stage of completion of the transaction at the end of the reporting period can be measured reliably; and the costs incurred or to be incurred in respect of the transaction can be measured reliably F. G. H. NOTE [1] (contd.) I. Notes forming part of the Consolidated Financial Statements (contd.) Expected loss, if any, on the project is recognised as an expense in the period in which it is foreseen, irrespective of the stage of completion of the contract. D. Expected loss, if any, on a contract is recognised as expense in the period in which it is foreseen, irrespective of the stage of completion of the contract. For contracts where progress billing exceeds the aggregate of contract costs incurred to date plus recognised profits (or recognised losses as the case may be), the surplus is shown as the amount due to customers and in case the aggregate of contract cost incurred to date plus recognised profits (or recognised losses as the case may be) exceeds the progress billing, the surplus is shown as due from customers. Amounts received before the related work is performed are disclosed in the consolidated Balance Sheet, as a liability towards advance received. Amount billed for work performed but yet to be paid by the customer are disclosed in the consolidated Balance Sheet as trade receivables. The amount of retention money held by the customers is disclosed as part of other current assets and is reclassified as trade receivables when it becomes due for payment. Revenue from construction/project related activity and contracts executed in joint arrangements under work-sharing arrangement [being joint operations, in terms of Ind AS 111 "Joint Arrangements"], is recognised on the same basis as adopted in respect of contracts independently executed by the Group. Revenue from property development activities which are in substance similar to delivery of goods is recognised when all significant risks and rewards of ownership in the land and/or building are transferred to the customer and a reasonable expectation of collection of the sale consideration from the customer exists. Revenue from those property development activities in the nature of a construction contract is recognised based on the 'Percentage of completion method' (POC) when the outcome of the contract can be estimated reliably upon fulfillment of all the following conditions: 1. 2. 3. 4. all critical approvals necessary for commencement of the project have been obtained; contract costs for work performed (excluding cost of land/developmental rights and borrowing cost) constitute at least 25% of the estimated total contract costs representing a reasonable level of development; at least 25% of the saleable project area is secured by contracts or agreements with buyers; and at least 10% of the total revenue as per the agreements of sale or any other legally enforceable documents is realised at the reporting date in respect of each of the contracts and the parties to such contracts can be reasonably expected to comply with the contractual payment terms. The costs incurred on property development activities are carried as "Inventories" till such time the outcome of the project cannot be estimated reliably and all the aforesaid conditions are fulfilled. When the outcome of the project can be ascertained reliably and all the aforesaid conditions are fulfilled, revenue from property development activity is recognised at cost incurred plus proportionate margin, using percentage of completion method. Percentage of completion is determined based on the proportion of actual cost incurred to date to the total estimated cost of the project. For the purpose of computing percentage of construction, cost of land, developmental rights and borrowing costs are excluded. 363 J. K. 4. operational income in the Statement of Profit and Loss in the period in which the application is made to the government authorities and to the extent there is no uncertainty towards its receipt. Other operational revenue represents income earned from the activities incidental to the business and is recognised when the right to receive the income is established as per the terms of the contract. (ii) Other income A. Interest income on investments and loans is accrued on a time basis by reference to the principal outstanding and the effective interest rate including interest on investments classified as fair value through profit or loss or fair value through other comprehensive income. Interest receivable on customer dues is recognised as income in the Statement of Profit and Loss on accrual basis provided there is no uncertainty towards its realisation. B. Dividend income is accounted in the period in which the right to receive the same is established. C. Other items of income are accounted as and when the right to receive such income arises and it is probable that the economic benefits will flow to the group and the amount of income can be measured reliably. (j) Exceptional items An item of income or expense which by its size, type or incidence requires disclosure in order to improve an understanding of the performance of the Group is treated as an exceptional item and the same is disclosed in the notes to accounts. (k) Property, plant and equipment (PPE) PPE is recognised when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. PPE is stated at original cost net of tax/duty credits availed, if any, less accumulated depreciation and cumulative impairment, if any. PPE acquired on hire purchase basis are recognised at their cash values. Cost includes professional fees related to the acquisition of PPE and, for qualifying assets, borrowing costs capitalised in accordance with the Group's accounting policy. Own manufactured PPE is capitalised at cost including an appropriate share of overheads. Administrative and other general overhead expenses that are specifically attributable to construction or acquisition of PPE or bringing the PPE to working condition are allocated and capitalised as a part of the cost of the PPE. PPE not ready for the intended use on the date of the Balance Sheet are disclosed as "capital work-in-progress". (Also refer to policies on leases, borrowing costs, impairment of assets and foreign currency transactions below). Depreciation is recognised using straight line method so as to write off the cost of the assets (other than freehold land and properties under construction) less their residual values over their useful lives specified in Schedule II to the Companies Act, 2013, or in case of assets where the useful life was determined by technical evaluation, over the useful life so determined. Depreciation method is reviewed at each financial year end to reflect the expected pattern of consumption of the future economic benefits embodied in the asset. The estimated useful life and residual values are also reviewed at each financial year end with the effect of any change in the estimates of useful life/residual value is accounted on prospective basis. Where cost of a part of the asset ("asset component") is significant to total cost of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part is determined separately and such asset component is depreciated over its separate useful life. Depreciation on additions to/deductions from, owned assets is calculated pro rata from the date it is ready for use. Extra shift depreciation is provided on a location basis. Depreciation charge for impaired assets is adjusted in future periods in such a manner that the revised carrying amount of the asset is allocated over its remaining useful life. 2. NOTE [1] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO Stage of completion is determined by the proportion of actual costs incurred to date to the estimated total costs of the transaction. Unbilled revenue represents value of services performed in accordance with the contract terms but not billed. In respect of information technology (IT) business and technology services business, revenue from contracts awarded on time and material basis is recognised when services are rendered and related costs are incurred. Revenue from fixed price contracts is recognised using the proportionate completion method. Revenue from contracts for rendering of engineering design services and other services which are directly related to the construction of an asset is recognised on the same basis as stated in (i) B above. Income from hire purchase and lease transactions is accounted on accrual basis, pro-rata for the period, at the rates implicit in the transaction. Income from bill discounting, advisory and syndication services and other financing activities is accounted on accrual basis. Income from interest-bearing assets is recognised on accrual basis over the life of the asset based on the effective yield. Revenue on account of construction services rendered in connection with Build-Operate-Transfer (BOT) projects undertaken by the Group is recognised during the period of construction using percentage of completion method. After the completion of construction period, revenue relatable to fare/toll collections of such projects from users of facilities is accounted when the amount is due and recovery is certain. License fees for way-side amenities are accounted on accrual basis. Commission income is recognised as and when the terms of the contract are fulfilled. Income from investment management fees is recognised in accordance with the contractual terms and the SEBI regulations based on average Assets Under Management (AUM) of mutual fund schemes over the period of the agreement in terms of which services are performed. Portfolio management fees are recognised in accordance with the related contracts entered with the clients over the period of the agreement. Trusteeship fees are accounted on accrual basis. Freehold land is not depreciated. Revenue from port operation services is recognised on completion of respective services or as per terms agreed with the port operator, wherever applicable. Revenue from charter hire is recognised based on the terms of the time charter agreement. M. N. Revenue from operation and maintenance services of power plant receivable under the Power Purchase Agreement is recognised on accrual basis. Other operational revenue: 1. Government grants, which are revenue in nature and are towards compensation for the qualifying costs, incurred by the Group, are recognised as other operational income in the Statement of Profit and Loss in the period in which such costs are incurred. Government grant receivable in the form duty credit scrips is recognised as other L. Membership No. 70928 368 2. Purchase & Sale of fixed assets represents additions & deletions to property, plant and equipment, investment property and intangible assets adjusted for movement of (a) capital work in progress for property, plant and equipment and investment property and (b) Intangible assets under development during the year. Partner P. R. RAMESH by the hand of Firm's Registration No. 117366W/W-100018 Chartered Accountants For DELOITTE HASKINS & SELLS LLP 4. Previous year's figures have been regrouped/reclassified wherever applicable. In terms of our report attached Add: (i) Unrealised exchange (gain)/loss on cash and cash equivalents Less: (ii) Other bank balances disclosed under current assets [Note 15] Less: (iii) Cash and cash equivalents disclosed under non-current assets [Note 9] Total Cash and cash equivalents as per Statement of Cash Flows Net (decrease)/increase in cash and cash equivalents (A + B + C) (a) Cash and cash equivalents disclosed under current assets [Note 14] (b) Other bank balances disclosed under current assets [Note 15] (c) Cash and cash equivalents disclosed under non-current assets [Note 9] Total Cash and cash equivalents as per Balance Sheet 3253.94 1. Statement of Cash Flows has been prepared under the indirect method as set out in the Indian Accounting Standard (Ind AS) 7 "Statement of Cash Flows" as specified in the Companies (Indian Accounting Standards) Rules, 2015. Notes: 3544.75 6798.69 Cash and cash equivalents at end of the year 3789.50 3544.75 3. Cash and cash equivalents included in the Statement of Cash flows comprise the following: Cash and cash equivalents at beginning of the year (244.75) Up to 31-3-2018 6 Furniture and fixtures 7 Owned vehicles 8 Aircraft 9 Ships 10 11 Dredged channel Breakwater structures NOTE [3] Investment Property Class of assets Minimum useful life (in years) Maximum useful life (in years) 15 Office equipment 999 5 4 7.09 5.39 1396.85 12.48 1978.65 24.37 0.05 (5.98) 1268.71 1777.90 188.81 Total 139.51 Buildings 30.35 0.05 509.19 49.30 Land property property occupied occupied As at Computers Up to 31-3-2018 5 3 to/from Class of assets Foreign Foreign As at 1-4-2017 inventories As at Up to For the Transfer to/from inventories Additions fluctuation currency and owners Deductions 31-03-2018 31-03-2017 period currency fluctuation Deductions and owners Transfer 61 Book value crore 35 3 7 3 30 3 13 3 As at 31-3-2018 31-3-2017 18 18 14 14 50 50 50 50 Cost Depreciation Impairment 15 (g) Amount transferred from property, plant & equipment to group(s) of assets classified as held for sale: NIL (previous year: * 70.21 crore) Owned plant and equipment B. A. (iii) The Group designates certain hedging instruments such as derivatives, embedded derivatives and in respect of foreign currency risk, certain non-derivatives as either fair value hedges, cash flow hedges, or hedges of net investments in foreign operations. Hedges of foreign exchange risk on firm commitments are accounted as cash flow hedges. NOTE [1] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO A financial liability is derecognised when the related obligation expires or is discharged or cancelled. Financial liabilities, including derivatives and embedded derivatives, which are designated for measurement at FVTPL are subsequently measured at fair value. Financial guarantee contracts are subsequently measured at the amount of impairment loss allowance or the amount recognised at inception net of cumulative amortisation, whichever is higher. All other financial liabilities including loans and borrowings are measured at amortised cost using Effective Interest Rate (EIR) method. B. A. (ii) Financial liabilities When making the assessment of whether there has been a significant increase in credit risk since initial recognition, the Group uses the change in the risk of a default occurring over the expected life of the financial instrument instead of the change in the amount of expected credit losses. To make that assessment, the Group compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition and considers reasonable and supportable information, that is available without undue cost or effort, that is indicative of significant increases in credit risk since initial recognition Expected credit losses are the weighted average of credit losses with the respective risks of default occurring as the weights. Credit loss is the difference between all contractual cash flows that are due to the Group in accordance with the contract and all the cash flows that the Group expects to receive (i.e. all cash shortfalls), discounted at the original effective interest rate (or credit-adjusted effective interest rate for purchased or originated credit-impaired financial assets). The Group estimates cash flows by considering all contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) through the expected life of that financial instrument. The Group measures the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition. If the credit risk on a financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses. 12-month expected credit losses are portion of the lifetime expected credit losses and represent the lifetime cash shortfalls that will result if default occurs within the 12 months weighted by the probability of default after the reporting date and thus, are not cash shortfalls that are predicted over the next 12 months. In respect of financial services business, the Group applies a separate model of the expected credit loss for recognising impairment loss on financial assets measured at amortised cost, debt instruments at FVTOCI, lease receivables, trade receivables and other contractual rights to receive cash or other financial asset, and financial guarantees not designated as at FVTPL as follows: Impairment of financial assets: The Group recognises impairment loss on trade receivables using expected credit loss model which involves use of a provision matrix constructed on the basis of historical credit loss experience as permitted under Ind AS 109. On derecognition of a financial asset in its entirety, the difference between the carrying amount measured at the date of derecognition and the consideration received is recognised in profit or loss. the group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a pass-through arrangement; and a) the group has transferred substantially all the risks and rewards of the asset, or b) the group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. D. 2. Fair value hedges: Changes in fair value of the designated portion of derivatives that qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. The fair value adjustment to the carrying amount of the hedged item arising from the hedged risk is amortised to profit or loss from that date. Cash flow hedges: In case of transaction related hedges, the effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in other comprehensive income and accumulated in equity as 'hedging reserve'. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss. Amounts previously recognised in other comprehensive income and accumulated in equity relating to the effective portion are reclassified to profit or loss in the periods when the hedged item affects profit or loss, in the same head as the hedged item. The effective portion of the hedge is determined at the lower of the cumulative gain or loss on the hedging instrument from inception of the hedge and the cumulative change in the fair value of the hedged item from the inception of the hedge and the remaining gain or loss on the hedging instrument is treated as ineffective portion. In case of time period related hedges, the forward element and the spot element of a forward contract is separated and only the change in the value of the spot element of the forward contract is designated as the hedging instrument. Similarly, wherever applicable, the foreign currency basis spread is separated from the financial instrument and is excluded from the designation of that financial instrument as the hedging instrument in case of time period related hedges. The changes in the fair value of the forward element of the forward contract or the foreign currency basis spread of the financial instrument is accumulated in a separate component of equity as 'cost of hedging'. The changes in the fair value of such forward element or foreign currency basis spread are reclassified to profit or loss as a reclassification adjustment on a straight line basis over the period of the forward contract or the financial instrument. The cash flow hedges are allocated to the forecast transactions on gross exposure basis. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. Any gain or loss recognised in other comprehensive income and accumulated in equity at that time remains in equity and is recognised in profit or loss when the forecast transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognised immediately in profit or loss. (iv) Compound financial instruments issued by the Group which can be converted into fixed number of equity shares at the option of the holders irrespective of changes in the fair value of the instrument are accounted by separately recognising the liability and the equity components. The liability component is initially recognised at the fair value of a comparable liability that does not have an equity conversion option. The equity component is initially recognised at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. The directly attributable transaction costs are allocated to the liability and the equity components in proportion to their initial carrying B. A. The difference between the face value of the equity shares and the consideration received in respect of shares issued. Securities premium includes: (i) (n) (t) Securities premium account Cash and bank balances also include fixed deposits, margin money deposits, earmarked balances with banks and other bank balances which have restrictions on repatriation. Short term and liquid investments being subject to more than insignificant risk of change in value, are not included as part of cash and cash equivalents. (s) Cash and bank balances Assessment of net realisable value is made at each subsequent period end and when the circumstances that previously caused inventories to be written-down below cost no longer exist or when there is clear evidence of an increase in net realisable value because of changed economic circumstances, the write-down, if any, in the past period is reversed to the extent of the original amount written-down so that the resultant carrying amount is the lower of the cost and the revised net realisable value. the right to receive cash flows from the asset has expired, or (iv) Completed property/work-in-progress (including land) in respect of property development activity at lower of specifically identifiable cost or net realisable value. NOTE [1] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) 371 (ii) Manufacturing work-in-progress at lower of weighted average cost including related overheads or net realisable value. In some cases, manufacturing work-in-progress are valued at lower of specifically identifiable cost or net realisable value. In the case of qualifying assets, cost also includes applicable borrowing costs vide policy relating to borrowing costs. (i) Raw materials, components, construction materials, stores, spares and loose tools at lower of weighted average cost or net realisable value. However, these items are considered to be realisable at cost if the finished products in which they will be used, are expected to be sold at or above cost. Inventories are valued after providing for obsolescence, as under: (r) Inventories Subsequent to initial recognition, the liability component of the compound financial instrument is measured at amortised cost using the effective interest method. The equity component of a compound financial instrument is not remeasured subsequently. amounts. (iii) Finished goods and stock-in-trade (in respect of goods acquired for trading) at lower of weighted average cost or net realisable value. Cost includes related overheads and excise duty paid/payable on such goods. 1. A financial asset is primarily derecognised when: C. 1. B. A. All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets as follows: (i) Financial assets A financial asset and a financial liability is offset and presented on net basis in the balance sheet when there is a current legally enforceable right to set-off the recognised amounts and it is intended to either settle on net basis or to realise the asset and settle the liability simultaneously. Financial assets and/or financial liabilities are recognised when the Group becomes party to a contract embodying the related financial instruments. All financial assets, financial liabilities and financial guarantee contracts are initially measured at transaction values and where such values are different from the fair value, at fair value. Transaction costs that are attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from, as the case may be, the fair value of such financial assets or liabilities on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss. (q) Financial instruments (Also refer to policy on depreciation above) Assets leased out under operating leases are continued to be shown under the respective class of assets. Rental income is recognised on a straight line basis over the term of the relevant lease. 2. B. A. The leases which are not classified as finance lease are operating leases. (ii) Operating leases: NOTE [1] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO Leasehold land 2 3 Owned buildings Lease rentals on assets under operating lease are charged to the Statement of Profit and Loss on a straight line basis over the term of the relevant lease. 581.80 3. 5. 370 equity. On disposal of debt instruments at FVTOCI, the cumulative gain or loss previously accumulated in other equity is reclassified to profit or loss. In case of equity instruments at FVTOCI, such cumulative gain or loss is not reclassified to profit or loss on disposal of investments. NOTE [1] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) 369 For financial assets that are measured at FVTOCI, income by way of interest and dividend, provision for impairment and exchange difference, if any, (on debt instrument) are recognised in profit or loss and changes in fair value (other than on account of above income or expense) are recognised in other comprehensive income and accumulated in other The group has elected to measure the investments in associates and joint ventures held through unit trusts at FVTPL. Investments in equity instruments are classified as FVTPL, unless the related instruments are not held for trading and the Group irrevocably elects on initial recognition to present subsequent changes in fair value in other comprehensive income. Debt instruments at FVTPL is a residual category for debt instruments, if any, and all changes are recognised in profit or loss. 4. The contractual terms of instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. • • Debt instruments that meet the following conditions are subsequently measured at fair value through other comprehensive income [FVTOCI] (unless the same are designated as fair value through profit or loss) The contractual terms of instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. The asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and • • Investments in debt instruments that are designated as fair value through profit or loss (FVTPL) - at fair value Other investments in debt instruments - at amortised cost, subject to following conditions: 6. The asset is held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets; and 5.33 0.98 2.48 9.36 162.38 208.61 1349.39 861.58 10.17 177.10 98.02 1148.15 2030.51 432.22 9.96 1538.27 112.11 95.74 58.79 5.98 16.07 220.86 0.03 3178.66 917.17 6.89 25.36 1732.76 78.04 0.01 1418.29 Previous year 917.17 Add: Intangible assets under development 11300.36 11353.23 ** 1018.25 1069.36 Total 784.79 914.93 Intangible assets under development 96.45 102.45 Capital work-in-progress (PPE) 1349.39 137.01 Investment property 2016-17 2017-18 Class of Assets crore (a) Borrowing cost capitalised in accordance with Ind AS 23 "Borrowing Costs" is as follows: Addition to other intangible assets include internally developed: 74.43 crore (previous year: 34.99 crore) Notes: **refer note 42(c) 13330.87 11785.45 51.98 (b) The average capitalization rate for borrowing cost is 10.06%. (previous year: 10.26%) Total 1548.23 New Product Design 862.10 210.82 252.37 49.22 70.80 29.57 0.01 6.24 6.24 6.25 6.25 Trade Names 13.87 35.35 120.02 55.10 64.92 Technical knowhow 4.11 9.66 120.96 0.03 1072.92 735.56 4.52 164.81 53.75 7.20 337 1548.23 Fare Collection Rights and relationship 13.74 2.80 36.37 72.94 207.85 4.42 9.96 71.70 Customer contracts and Development 108.52 114.87 91.49 1.87 3.61 33.46 73.32 223.39 2.37 131.73 5.33 378 987.93 4345.86 3613.26 Notes: (a) Carrying value of Investment property pledged as collateral for liabilities and/or commitments and having restriction on title as at March 31, 2018 0.16 crore (0.16 crore as at March 31, 2017) (b) Useful life of building included in investment property: 20 to 60 years (c) Amount recognized in the Statement of Profit and Loss for investment property: Sr. No. Particulars 1 Rental income derived from investment property 2 Direct operating expenses arising from investment property that generated rental income crore 2017-18 2016-17 73.31 64.41 2.10 2.57 (d) Fair value of investment property: 6448.68 crore as at March 31, 2018 (4574.21 crore as at March 31, 2017). 2404.64 3433.32 Add: Capital work-in-progress 8.87 3.00 573.99 49.30 8.87 25.10 0.98 5.33 29.62 1367.23 130.64 8.87 30.43 377 The fair value of the stock options which are treated as expense, if any, in respect of shares allotted pursuant to Stock Options Scheme 34.95 2.48 1941.22 179.94 Previous year 216.67 42.72 (0.19) 4.40 74.79 188.81 5.05 6.40 0.42 5.33 0.09 Notes forming part of the Consolidated Financial Statements (contd.) (e) The fair values of investment property have been determined with the help of internal architectural department and independent valuer on a case to case basis. Fair value of property that are evaluated by independent valuer is 2510.89 crore. (2202.79 crore as at March 31, 2017). Valuation is based on government rates, market research, marked trend and comparable values as considered appropriate. Book value Pursuant to Class of assets As at acquisition of 1-4-2017 subsidiaries Foreign currency As at Additions fluctuation Deductions 31-3-2018 Pursuant to Up to acquisition of 31-3-2017 subsidiaries For the year Foreign currency fluctuation Deductions Up to 31-3-2018 31-3-2018 31-3-2017 As at As at Specialised Software Amortisation Cost *crore Other Intangible assets and Intangible assets under development (f) Impairment during the year 2.48 crore (on land) [previous year 403.71 crore (on capital work-in-progress) out of which * 270.22 crore pertained to assets disposed of]. NOTE [4] Goodwill crore Amortisation Foreign Impairment Book value As at Up to NOTE [3] (contd.) For the currency Up to period fluctuation Deductions 31-3-2018 31-3-2018 As at As at 31-3-2018 31-3-2017 48.10 # 1561.78 1398.66 48.10 1398.66 Class of assets As at Goodwill on consolidation Previous year Cost Foreign currency 1-4-2017 Additions* fluctuation Deductions 31-3-2018 31-3-2017 1446.76 245.24 42.67 124.79 1609.88 1495.06 2.83 (44.61) 6.52 1446.76 #Impairment upto 31-3-2018 48.10 crore, during the year * NIL NOTE [5] * Refer Note 51 As at (ii) The issue expenses of securities which qualify as equity instruments are written off against securities premium account Borrowing Costs Borrowing costs include interest expense calculated using the effective interest method, finance charges in respect of assets acquired on finance lease and exchange differences arising on foreign currency borrowings, to the extent they are regarded as an adjustment to interest costs. Borrowing costs net of any investment income from the temporary investment of related borrowings that are attributable to the acquisition, construction or production of a qualifying asset are capitalised/inventoried as part of cost of such asset till such time the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognised in profit or loss in the period in which they are incurred. 1.06 52.45 305.62 33.78 Owned Furniture and fixtures 0.01 6.22 179.39 0.19 62.85 106 115.77 6.80 0.48 54.15 8.34 265.17 Sub total Office equipment 0.46 148.93 153 0.15 7.68 320.46 12.54 380.37 89.24 22.85 58.74 Sub total - Furniture & fixtures 8.32 6.24 5.57 2.08 3.49 11.81 11.81 Leased out 216.14 217.38 0.24 149.39 0.01 141.06 929 00 0.24 162.75 8.48 440 0.40 0.87 0.31 0.56 1.02 636.88 39.55 1.46 1.77 131.77 541.43 Sub total-Computers 0.60 0.02 1.10 0.72 0.55 1.27 0.75 1.12 1.87 Leased out 272.24 282.78 363.52 33.34 0.97 138.36 420 258.05 0.75 317.43 33.78 138.91 34.06 364.62 1.02 Leased out 140.91 0.01 0.01 178.52 322 6.22 0.19 62.54 115.21 6.80 319.44 7.68 0.48 54.15 8.34 264.15 Owned Office equipment 283.38 272.26 0.97 52.45 1.06 12.54 20.76 16.46 1.64 26.51 0.12 4.79 0.64 0.18 1.85 42.97 23.24 1141.56 195.86 0.18 1.85 1335.75 151.20 14288.11 161.76 1270.57 19.17 489.27 15250.34 2952.14 139.58 1502.55 13749.33 0.13 969.45 (38.16) 392.64 14288.11 1577.34 0.09 1602.26 Previous year Sub total Other assets Total 44.00 Leasehold Improvements 899.61 843.53 167.55 56.08 1011.08 111.47 1011.08 Breakwater structures Dredged channel and 27.58 22.84 14.41 75.17 4.74 0.12 1110.90 990.36 Cost as at April 1, 2017 of individual assets has been reclassified, wherever necessary. (f) (e) Owned assets given on operating lease have been presented separately under respective class of assets as "Leased out" pursuant to Ind AS 17 "Leases". (d) Impairment during the year is ₹115.41 crore and reversal of impairment during the year on sale is 0.49 crore. Impairment for and upto the previous year was: 111.86 crore out of which 8.86 crore was transferred to held for sale. NOTE [2] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 376 (c) Depreciation for the year includes 4.85 crore (previous year: 23.33 crore) on account of obsolescence. (b) Carrying value of property, plant and equipment having restriction on title as at March 31, 2018 2042.16 crore (previous year: 2033.26 crore) (a) Carrying value of property, plant and equipment pledged as collateral for liabilities and/or commitments as at March 31, 2018 2073.45 crore (previous year: 2112.99 crore) Notes: refer note 42(c) ** 12785.11 13177.68 2143.07 1944.71 217.92 10642.04 11232.97 Add: Capital work-in-progress 103.00 103.00 4.56 208.45 4390.38 (4.43) 223.12 2952.14 1.64 224.85 256.78 0.75 9.67 42.41 8.20 79.76 30.69 47.29 4.25 106.20 Leased out 206.59 209.93 0.10 14.48 175.08 52.43 381.67 84.14 52.89 26.38 0.38 294.07 52.90 60.70 Owned Vehicles 224.46 223.62 0.24 0.24 60.82 0.40 8.48 168.32 92.73 22.85 392.18 42.09 13.40 37.25 17.29 58.91 400.27 228.07 16.38 9.56 6.82 244.45 || 37.25 Ships 195.22 49.23 Aircraft Owned Other assets 268.84 223.88 56.57 188.48 0.10 60.63 106.14 412.36 131.43 52.89 0.38 52.90 64.95 Sub total - Vehicles (h) Range of useful life of property, plant and equipment is as below: 38.80 635.76 1.77 131.77 estimated amount of contracts remaining to be executed on capital account and not provided for; a) Commitments are future liabilities for contractual expenditure, classified and disclosed as follows: (aa) Commitments Where the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under such contract, the present obligation under the contract is recognised and measured as a provision. Contingent assets are disclosed where an inflow of economic benefits is probable. Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date. a present obligation arising from past events, when no reliable estimate is possible. a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation; and (ii) b) (i) NOTE [1] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 374 Provision is measured using the cash flows estimated to settle the present obligation and when the effect of time value of money is material, the carrying amount of the provision is the present value of those cash flows. Reimbursement expected in respect of expenditure required to settle a provision is recognised only when it is virtually certain that the reimbursement will be received. (iii) a reliable estimate can be made of the amount of the obligation (ii) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and (i) the Group entity has a present obligation (legal or constructive) as a result of a past event; and Provisions are recognised only when: Contingent liability is disclosed in case of: uncalled liability on shares and other investments partly paid; c) funding related commitment to associate and joint venture companies; and crore Property, Plant and Equipment and Capital work-in-progress NOTE [2] Notes forming part of the Consolidated Financial Statements (contd.) 375 The preparation of financial statements in conformity with Ind AS requires that the management of the Group makes estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates include useful lives of property, plant and equipment & intangible assets, allowance for doubtful debts/advances, future obligations in respect of retirement benefit plans, expected cost of completion of contracts, provision for rectification costs, fair value measurement etc. Difference, if any, between the actual results and estimates is recognised in the period in which the results are known. (ad) Key sources of estimation Cash and cash equivalents (including bank balances) shown in the Statement of Cash Flows exclude items which are not available for general use as at the date of Balance Sheet. all other items for which the cash effects are investing or financing cash flows. iii. non-cash items such as depreciation, provisions, deferred taxes, unrealised foreign currency gains and losses, and undistributed profits of associates and joint ventures; and ii. i. changes during the period in inventories and operating receivables and payables, transactions of a non-cash nature; Statement of Cash Flows is prepared segregating the cash flows into operating, investing and financing activities. Cash flow from operating activities is reported using indirect method adjusting the net profit for the effects of: (ac) Statement of Cash Flows Non-current assets and disposal groups classified as held for sale are measured at lower of their carrying amount and fair value less costs to sell. Non-current assets and disposal groups are classified as held for sale if their carrying amount is intended to be recovered principally through a sale (rather than through continuing use) when the asset (or disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sale of such asset (or disposal group) and the sale is highly probable and is expected to qualify for recognition as a completed sale within one year from the date of classification. (ab) Non-current assets held for sale Other commitments related to sales/procurements made in the normal course of business are not disclosed to avoid excessive details other non-cancellable commitments, if any, to the extent they are considered material and relevant in the opinion of management. d) (z) Provisions, contingent liabilities and contingent assets Transaction or event which is recognised outside profit or loss, either in other comprehensive income or in equity, is recorded along with the tax as applicable The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets relating to unabsorbed depreciation/business losses/losses under the head "capital gains" are recognised and carried forward to the extent of available taxable temporary differences or where there is convincing other evidence that sufficient future taxable income will be available against which such deferred tax assets can be realised. Deferred tax assets in respect of unutilised tax credits which mainly relate to minimum alternate tax are recognised to the extent it is probable of such unutilised tax credits will get realised. C. income and expenses for each income statement are translated at average exchange rates; and B. assets and liabilities for each Balance Sheet presented are translated at the closing rate at the date of that Balance Sheet; A. (iii) Financial statements of foreign operations whose functional currency is different than Indian Rupees are translated into Indian Rupees as follows: exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur (therefore forming part of the net investment in foreign operation), which are recognised initially in other comprehensive income and reclassified from equity to profit or loss on repayment of the monetary items. exchange differences on transactions entered into in order to hedge certain foreign currency risks; and C. B. NOTE [1] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 372 exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings; A. (ii) Transactions in currencies other than the Group's functional currency are recorded on initial recognition using the exchange rate at the transaction date. At each Balance Sheet date, foreign currency monetary items are reported at the closing spot rate. Non-monetary items that are measured in terms of historical cost in foreign currency are not retranslated. Exchange differences that arise on settlement of monetary items or on reporting of monetary items at each Balance Sheet date at the closing spot rate are recognised in the Statement of Profit and Loss in the period in which they arise except for: (i) The functional currency and presentation currency of the Group is Indian Rupee. Functional currency of the Group and foreign operations has been determined based on the primary economic environment in which the Group and its foreign operations operate considering the currency in which funds are generated, spent and retained. (w) Foreign currencies The stock options granted to employees pursuant to the Group's Stock Options Schemes, are measured at the fair value of the options at the grant date. The fair value of the options is treated as discount and accounted as employee compensation cost over the vesting period on a straight line basis. The amount recognised as expense in each year is arrived at based on the number of grants expected to vest. If a grant lapses after the vesting period, the cumulative discount recognised as expense in respect of such grant is transferred to the general reserve within equity. (v) Share-based payment arrangements all resulting exchange differences are recognised in other comprehensive income and accumulated in equity as foreign currency translation reserve for subsequent reclassification to profit or loss on disposal of such foreign operations. The portion of foreign currency translation reserve attributed to non-controlling interest is reflected as part of non-controlling interest. Cost (x) Accounting and reporting of information for Operating Segments Segment accounting policies are in line with the accounting policies of the Group. In addition, the following specific accounting policies have been followed for segment reporting: Deferred tax assets are generally recognised for all taxable temporary differences to the extent that is probable that taxable profits will be available against which those deductible temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax liabilities are generally recognised for all taxable temporary differences including the temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Dividend distribution tax payable on profits of subsidiary companies which are proposed to be distributed in foreseeable future, is recognised as deferred tax liability with corresponding effect in the Statement of Profit and Loss in the period in which such profits are proposed to be so distributed. Such liability is reversed in the period in which the profits are distributed by the subsidiary company. Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the Group's financial statements and the corresponding tax bases used in computation of taxable profit and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date. Dividend distribution tax paid on profits distributed by the subsidiary company during the period is treated as an item of expense and recognised in the Statement of Profit and Loss. The dividend distribution tax paid in earlier years for which set off is available against the tax liability arising out of the dividend distribution by the Parent Company is recognised as an item of income in the period in which such set off is availed with corresponding effect in the equity to the extent of such set off. Both the recognition of expense and income as aforesaid are included in the current tax in the Statement of Profit and Loss. Tax on income for the current period is determined on the basis of taxable income (or on the basis of book profits wherever minimum alternate tax is applicable) and tax credits computed in accordance with the provisions of the Income Tax Act 1961, and based on the expected outcome of assessments/appeals. (y) Taxes on income Segment revenue resulting from transactions with other business segments is accounted on the basis of transfer price which are either determined to yield a desired margin or agreed on a negotiated basis (x) (ix) Segment non-cash expenses forming part of segment expenses includes the fair value of the employee stock options which is accounted as employee compensation cost [see Note 1(v) above] and is allocated to the segment. NOTE [1] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) 373 Unallocable corporate assets and liabilities represent the assets and liabilities that relate to the Group as a whole. (viii) Segment assets and liabilities include those directly identifiable with the respective segments. In respect of (a) Financial Services segment, and (b) Power Generation projects under Developmental Projects segment which are classified as assets given on finance lease, segment liabilities include borrowings as the interest expenses on borrowings are accounted as segment expenses in respect of the segment and projects. Investment in joint ventures and associates identified with a particular segment are reported as part of the segment assets of those respective segments. (vii) Segment results have not been adjusted for the exceptional item attributable to the corresponding segment. The said exceptional item has been included in "unallocable corporate income net of expenditure". The corresponding segment assets have been carried under the respective segments without adjusting the exceptional item (vi) Segment result includes the interest expense incurred on interest bearing advances with corresponding credit included in "unallocable corporate income" (iv) Income which relates to the Group as a whole and not allocable to segments is included in "unallocable corporate income". (v) Segment result includes margins on inter-segment capital jobs, which are reduced in arriving at the profit before tax of the Group. (iii) Most of the centrally incurred costs are allocated to segments mainly on the basis of their respective expected segment revenue estimated at the beginning of the reported period. (ii) Expenses that are directly identifiable with/allocable to segments are considered for determining the segment result. In respect of (a) Financial Services segment and (b) Power Generation projects under Developmental Projects segment which are classified as assets given on finance lease, the interest expenses on borrowings are accounted as segment expenses. Segment revenue includes sales and other operational revenue directly identifiable with/allocable to the segment including (a) inter segment revenue and (b) profit on sale of stake in the subsidiary and/or joint venture companies under Developmental projects segment and Realty business grouped under "Others" segment (i) Operating segments are those components of the business whose operating results are regularly reviewed by the chief operating decision making body in the Group to make decisions for performance assessment and resource allocation. The reporting of segment information is the same as provided to the management for the purpose of the performance assessment and resource allocation to the segments. Class of assets As at Pursuant to acquisition of 56.29 6752.97 64.97 530.28 7.91 132.65 7223.48 1840.32 41.63 133.70 7.94 167.39 7.91 0.99 0.99 0.05 140.59 7391.86 1848.28 64.97 663.98 Sub total Plant & equipment 6795.59 Taken on lease Leased out Owned Plant & equipment 189.31 3039.44 3349.08 87.25 41.84 61.87 1.33 8.84 18.49 506.99 0.69 172.81 4.06 2997.60 3287.21 189.31 1 0.69 17.16 498.15 168.75 113.25 3685.06 345.87 19.20 50.68 6.11 132.45 3735.74 351.98 915.43 6.81 2.07 Sr. No. 177 539.56 Owned Computers 4931.81 4615.40 28.36 15.50 82.99 2748.10 2.07 56.29 924.45 7.91 0.94 0.87 0.12 0.07 152.63 33.72 2.10 14.76 8.95 1 28.36 4461.90 4897.15 80.89 2733.22 1.46 73.07 Sub total - Buildings 0.89 34.34 1038.35 Sub total - Land 439.28 Taken on lease 34.34 0.76 48.43 585.74 599.07 Freehold Land As at As at 31-3-2018 31-03-2017 Pursuant to acquisition Up to Up to Up to Up to 31-3-2017 subsidiaries For the year fluctuation Deductions 31-3-2018 31-3-2017 31-3-2018 1-4-2017 subsidiaries Additions fluctuation Deductions 31-3-2018 currency of As at Foreign Book value Impairment Depreciation Foreign currency 0.13 0.04 48.47 3788.31 439.37 1025.11 2.70 1.90 67.98 Leased out 6.81 71.17 3720.33 Owned Buildings 1015.48 1035.65 9.63 429.74 436.58 9.63 166 585.74 599.07 | 122 0.02 6.91 0.02 6.91 TRR 2.70 87.25 15.50 75.68 Particulars Preference shares Mutual funds Debentures and bonds Government and trust securities Equity shares Financial Assets: Investments - current Note: During the year 157.49 crore (previous year: 752.13 crore) was recognised as expense towards write-down of inventory. NOTE [12] 4139.74 4847.80 1259.76 2307.47 15.09 14.12 Loose tools [includes goods-in-transit Nil (previous year: 0.09 crore)] Property development projects (including land) As at 31-3-2018 As at 31-3-2017 crore crore As at 31-3-2017 As at 31-3-2018 Financial Assets-current: Trade receivables NOTE [13] 14300.22 9464.25 4.08 248.34 1.43 4366.71 3089.02 3712.59 780.10 1206.48 199.17 177.04 10227.85 Particulars 209.55 Stores and spares [including goods-in-transit 3.77 crore Raw materials [includes goods-in-transit 18.52 crore crore crore As at 31-3-2017 As at 31-3-2018 Particulars Inventories (at cost or net realisable value whichever is lower) NOTE [11] Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 3697.51 4587.74 2460.20 2774.49 1064.42 (previous year: 38.52 crore)] 614.19 576.51 Components [includes goods-in-transit 23.34 crore 188.59 200.63 Stock-in-trade (in respect of goods acquired for trading) [includes goods-in- transit 26.31 crore (previous year: 18.77 crore)] 340.82 245.25 Finished goods 828.36 (previous year: * 5.09 crore)] 630.27 164.03 151.41 (previous year: 55.70 crore)] Construction materials [includes goods-in-transit 67.32 crore 518.24 474.91 (previous year: 23.72 crore)] Manufacturing work-in-progress crore Secured, considered good crore 0.15 64.48 571.85 2639.05 crore 64.02 2221.38 838.52 * crore 3710.42 As at 31-3-2017 As at 31-3-2018 382 Others Inter-corporate deposits, Unsecured Other unsecured loans, considered good: Loans against mortgage of house property Other secured loans, considered good: 251.49 6834.34 3526.87 As at 31-3-2018 crore crore 478.77 As at 31-3-2017 As at 31-3-2018 crore 1779.09 1198.19 169.82 Inter-corporate deposits 194.69 31.46 7.92 46.92 64.09 crore 1557.59 As at 31-3-2017 crore 900.03 4.76 Unsecured long term loans and advances to related parties: Joint Ventures: Less: Provision for doubtful security deposits Unsecured security deposits, doubtful 28671.13 2465.16 28671.13 28688.97 34654.08 34653.93 2465.16 2899.78 Less: Allowance for doubtful debts 381 31136.29 2899.78 34653.93 Considered doubtful Considered good Unsecured: crore 17.84 crore 37553.71 172.89 Notes forming part of the Consolidated Financial Statements (contd.) Financial Assets-current: Cash and cash equivalents Unsecured security deposits, considered good Particulars Financial Assets: Loans - current NOTE [16] Cash and bank balances not available for immediate use Earmarked balances with banks-Section 4(2)(1)(D) of RERA Margin money deposits with banks Earmarked balances with banks-unclaimed dividend NOTE [14] Particulars Financial Assets-current: Other bank balances NOTE [15] Fixed deposits with banks (maturity less than 3 months) Cash on hand Cheques and drafts on hand Balance with banks Particulars Fixed deposits with banks 75.31 1737.94 26.47 146.42 53.83 18.40 18.49 18.40 18.49 0.45 0.45 26.59 26.59 crore 170.49 208.39 crore crore crore As at 31-3-2017 As at 31-3-2018 2679.90 1565.74 1167.22 130.41 1565.74 1297.63 379 1487.38 0.12 2.29 2.29 1793.85 1.00 15.47 111.86 Less: Provision for doubtful advances Other loans and advances Other unsecured loans, doubtful: Advance recoverable in cash 0.74 0.23 0.74 0.23 15.47 128.64 3359.47 505.27 1016.88 36.92 Less: Provision for doubtful security deposits Unsecured security deposits, doubtful: Unsecured security deposits, considered good Particulars Financial Assets: Loans - non-current NOTE [7] Associates companies: Particulars Security receipt Mutual funds Debentures or bonds Preference shares Equity instruments Financial Assets: Other Investments - non-current NOTE [6] Units of fund Notes forming part of the Consolidated Financial Statements (contd.) Advances Inter-corporate deposits 17.06 18.94 1378.88 1248.10 66.80 600.03 281.85 Joint Ventures: 665.06 crore As at 31-3-2017 As at 31-3-2018 Other unsecured loans, considered good: Loans against mortgage of house property Other secured loans, considered good: Amount receivable crore crore 447.61 NOTE [8] Secured loans: 320.31 crore crore As at 31-3-2017 12060.80 47133.86 As at 31-3-2018 61816.54 13888.24 706.04 2125.74 9229.02 4464.64 8995.06 428.54 Unsecured Secured Capital advances: Other non-current assets 224.06 1.19 238.38 577.05 21.48 380 Advance recoverable other than in cash Current Tax receivable (net) crore crore crore crore NOTE [10] Particulars As at 31-3-2018 857.60 614.32 44.56 50.57 10.74 5.06 As at 31-3-2017 Other receivables Embedded derivative receivables Cash and cash equivalent not available for immediate use Fixed deposits with banks (maturity more than 12 months) Forward contract receivables 44.36 9147.47 70.93 Debentures Finance lease 30984.17 38709.90 Considered doubtful: crore * crore crore As at 31-3-2017 As at 31-3-2018 Particulars Term loans Considered good: crore Financial Assets: Loans towards financing activities - non-current Term loans 4044.53 Particulars Other financial assets - non-current NOTE [9] Debentures Finance lease Term loans Considered good: 3438.87 Unsecured loans: 47928.30 2488.74 3438.87 Less: Allowance for expected credit losses 37561.80 51367.17 2488.74 35073.06 Notes forming part of the Consolidated Financial Statements (contd.) 5.91 5.91 95,20,455@ 0.85* 42,47,360 0.85* 42,65,623@ fully paid value) to be issued as crore (at face crore (at face value) As at 31-3-2018 Number of equity shares to be issued as fully paid As at 31-3-2017 Number of equity shares Particulars (e) Shares reserved for issue under options outstanding as at the end of the year on un-issued share capital: 6.55 1.90** 63,46,986 1.27** 146.71 crore) Terms: (i) (g) The aggregate number of equity shares issued pursuant to contract, without payment being received in cash in immediately preceding last five years ended on March 31, 2018 - Nil (previous period of five years ended March 31, 2017: Nil) (h) Stock option schemes (f) The aggregate number of equity shares allotted as fully paid up by way of bonus shares in immediately preceding five years ended March 31, 2018 are 77,50,59,331 (previous period of five years ended March 31, 2017: 30,82,94,576 shares) @ The number of options have been adjusted consequent to bonus issue wherever applicable 1215.13 crore) on the exercise of options Note 20 (h) for terms of employee stock option schemes 12.30 # ** The equity shares will be issued at a premium of * 1214.50 crore (previous year: 94.42 crore (previous year: 0.675% 5 years & 1 day US$ denominated foreign currency convertible bonds (FCCB) Employee stock options granted and outstanding # The equity shares will be issued at a premium of by the bond holders A. 15.69 shares 14,64,24,938 11,47,52,281 6,11,02,860 280.27 1,40,13,69,456 Issued, subscribed and fully paid up equity shares outstanding at the end of the year 0.29 14,86,958 186.30 93,14,78,845 186.59 0.33 93.35 46,67,64,755 Add: Shares issued as bonus on July 15, 2017 16,38,898 Add: Shares issued on exercise of employee stock options during the year 93,29,65,803 the year Issued, subscribed and fully paid up equity share outstanding at the beginning of 93,29,65,803 186.59 (c) Terms/rights attached to equity shares: 384 12.28 17.58 % Number of Shareholding Number of Shareholding shares 24,63,52,777 17,21,28,421 As at 31-3-2017 As at 31-3-2018 % L&T Employees Welfare Foundation Life Insurance Corporation of India Name of the shareholder (d) Shareholder holding more than 5% of equity shares as at the end of the year: NOTE [20] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO The Company has only one class of share capital, i.e., equity shares having face value of 2 per share. Each holder of equity share is entitled to one vote per share. Administrator of the Specified Undertaking of the Unit Trust of India B. The grant of options to the employees under the stock option schemes is on the basis of their performance and other eligibility criteria. The options are vested equally over a period of 4 years [5 years in the case of series 2006(A)], subject to the discretion of the management and fulfillment of certain conditions. Options can be exercised anytime within a period of 7 years from the date of grant and would be settled by way of issue of equity shares. Management has discretion to modify the exercise period. 622567 70767 89325 48375 19800 bonus issue 14, 2017** consequent to Adjusted options as on July 9 2894772 136876 415042 47178 59550 32250 205321 4342684 385 Notes forming part of the Consolidated Financial Statements (contd.) 49313 10 Options lapsed post bonus issue 2016-17 2017-18 2017-18 2016-17 2017-18 No. Series reference 2006(A) 13200 2006 2003 (A) 2002 (B) 2002 (A) 2000 Sr. 386 NOTE [20] (contd.) 2003(B) 14, 2017 ** Options outstanding as on July 8 2003(B) 2017-18 2016-17 2017-18 2016-17 2017-18 2016-17 2017-18 2016-17 2017-18 2016-17 2.00* 2.30 7.80* 11.70 7.80* 11.70 267.10* 400.70 267.10* 400.70 19-4-2002 23-5-2003 onwards 23-5-2003 onwards 19-4-2003 23-5-2004 onwards 23-5-2004 onwards 2003 (A) 2002 (B) 2000 2002 (A) 2017-18 2016-17 2017-18 2016-17 2.00* 2.30 2.00* 2.30 19-4-2002 19-4-2003 1-6-2001 Vesting commences on 3 2006 1-6-2000 2 Grant price - () 1 No. Series reference Sr. (ii) The details of the grants under the aforesaid schemes under various series are summarized below: Grant dates crore 2006(A) 1-7-2007 onwards 1-7-2008 onwards 176584 257366 3491467 4844579 35747 108685 454865 6200 384450 39708 45035 494210 1282697 - 427131 526919 41662 17700 89100 29789 147226 12000 Options exercised prior to bonus 7 Options granted prior to bonus 1-9-2006 onwards 1-9-2007 onwards 6 5 47178 47178 59550 59550 13200 25200 32250 32250 at the beginning of the year Options granted and outstanding |4 Options lapsed prior to bonus 2016-17 Number of shares shares crore 0.60 1052.12 1066.62 18212.95 25.85 25.59 18472.85 crore crore crore * crore As at 31-3-2017 As at 31-3-2018 Deferred credit sale of ships Doubtful advances: Embedded derivative receivables 19565.66 0.60 19565.06 0.14 7.87 6.27 64.69 crore crore crore crore Particulars Forward contract receivable As at 31-3-2017 5636.46 24927.38 6882.95 26448.01 5325.67 303.81 6.98 6600.47 281.83 0.65 19290.92 0.14 19291.06 As at 31-3-2018 Advances recoverable in cash Joint venture companies Associate companies LARSEN & TOUBRO 486.45 559.72 0.32 47.29 20.01 15.13 Notes forming part of the Consolidated Financial Statements (contd.) 0.31 0.31 0.33 18.20 18.20 18.20 18.20 3.74 0.33 127.39 NOTE [17] Secured loans: Advances to related parties: Other current financial assets NOTE [18] Debentures Finance lease Term loans Considered good: Financial Assets - current: Loans towards financing activities Unsecured loans: Particulars Term loans Considered doubtful: Debentures Finance lease Term loans Considered good: Less: Allowance for expected credit losses 3.74 70.96 3428.45 643.92 51.26 843.56 As at 31-3-2018 Number of 148.57 39056.82 137.25 46524.83 4.16 4.16 4.16 4.16 45.57 127.80 4492.84 4954.10 199.55 61.44 0.16 10.13 91.05 10306.31 crore As at 31-3-2017 Number of crore shares Number of Particulars 2017-18 (b) Reconciliation of the number of equity shares and share capital: 186.59 93,29,65,803 280.27 0.14 1,40,13,69,456 Issued, subscribed and fully paid up: Equity shares of 2 each 325.00 1,62,50,00,000 325.00 shares 1,62,50,00,000 Equity shares of 2 each 17.15 12454.33 crore 23762.64 NOTE [19] Notes forming part of the Consolidated Financial Statements (contd.) 383 3286.34 194.58 194.58 167.61 Other current assets 26.97 203.46 Less: Allowance for doubtful loans and advances 203.46 176.35 Other loans and advances 27.11 197.23 4194.59 135.26 2110.29 Particulars Unamortised expenses 28772.62 crore crore crore As at 31-3-2017 As at 31-3-2018 Particulars Due from customers (construction and project related activity) Due from customers (property development activity) [Note 44(c)] Retention money (including unbilled revenue) Authorised: Equity share capital NOTE [20] Others Doubtful other loans and advances Less: Provision for doubtful advances Advance recoverable other than in cash Government grant receivable Balance with customs, port trust, etc. Accrual of fee income (a) Share capital authorised, issued, subscribed and paid up: LARSEN & TOUBRO 3,48,746 Unsecured long term loans and advances to related parties: (I) Options lapsed post bonus issue (H) Options allotted post bonus issue (G) Options granted post bonus issue 226.07 53,98,839 (F) Adjusted options consequent to bonus issue 339.12 35,98,868 (E) Options granted and outstanding prior to bonus issue 370.25 (J) Options granted and outstanding at the end of the year 5,32,274 1,08,685 (D) Options lapsed pre bonus issue 358.97 14,86,958 380.14 5,63,707 (C) Options allotted pre bonus issue 327.51 4,73,550 112.61 400.70 23,900 42,47,360 21,51,241 | (K) Options exercisable at the end of the year out of (J) supra (iv) Weighted average share price at the date of exercise for stock options exercised during the year is 1106.67 (previous year: 1386.19) per share. |(vi) Weighted average exercise price (v) Weighted average share price (iv) Weighted average expected dividends over the life of the option | (iii) Weighted average expected volatility | (ii) Weighted average expected life of options (i) Weighted average risk-free interest rate Particulars No. Sr. 218.19 347.41 359.04 19,22,282 42,65,623 248.92 7,03,205 229.25 10,75,191 238.32 6,45,180 (vii) The fair value has been calculated using the Black-Scholes Option Pricing Model and the significant assumptions and inputs to estimate the fair value of options granted during the year are as follows: (vi) Weighted average fair values of options granted during the year is 965.25 (previous year: 1056.73) per option. (v) In respect of stock options granted pursuant to the Company's stock options schemes, the fair value of the options is treated as discount and accounted as employee compensation over the vesting period. 223.35 (B) Options granted pre bonus issue 354.10 57,93,042 (B) Weighted average share price at the date of exercise for stock options exercised during the year is 850 per share (previous year: 621 per share). NOTE [20] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) 387 25.84 3,07,480 9.03 8,20,797 vi Options vested at the end of the year out of (vi) 2.73 (C) Weighted average fair value of options granted during the year is 644.71 per share (previous year: 407.39 per share). (D) The fair value has been calculated using the Black-Scholes Option Pricing model and significant assumptions and inputs to estimate the fair value options granted during the year are as follows: 2.90 Options granted and outstanding at the end of the year V Grant Price 5 2016-17 5 2017-18 ii Grant Dates 01 April 2001 onwards 2016-17 32 72 01 October 2001 onwards 35,95,787 Sr. No. Particulars i Weighted average risk-free interest rate 347.41 42,47,360 (A) Options granted and outstanding at the beginning of the year (₹) exercise price Weighted average No. of stock options Weighted average exercise price (₹) options Particulars No. of stock 2016-17 2017-18 (iii) The number and weighted average exercise price of stock options are as follows: 3.48 Nil 3.74 vi Weighted average share price V iv Weighted average expected dividends over the life of option Weighted average expected volatility !!! ii Weighted average expected life of options (vii) Method used to determine expected volatility 2017-18 6.83% 4.17 years 27.92% 58.37 per option 1178.47 per option 28-07-2017 onwards Vesting commences on 3 28-07-2016 onwards Grant dates 2 2 2 Grant price - 1 4 2016-17 No. Series reference Sr. (iii) Details of grant under ESOP Scheme, 2016 is summarized below: (ii) The exercise period for the options granted under the ESOP Scheme, 2016 would be seven years (84 months) from the date of grant of options or six years from the date of first vesting or three years (36 months) from the date of retirement/death, whichever is earlier, subject to any change as may be approved by the Board. The exercise price may be decided by the Board, in such manner, during such period, in one or more tranches and on such terms and conditions as it may deem fit, provided that the exercise price per option shall not be less than the par value of the equity share of our Company and shall not be more than the market price as defined in the SEBI (Share Based Employee Benefits) Regulations, 2014 and shall be subject to compliance with accounting policies under the said regulation. The number of shares to be allotted on exercise of options should not exceed the total number of unexercised vested options that may be exercised by the employee. The objective of the ESOP Scheme, 2016 is to reward those employees who contribute significantly to the Company's profitability and shareholder's value as well as encourage improvement in performance and retention of talent. The options are vested equally over a period of 5 years subject to the discretion of the management and fulfillment of certain conditions. (i) (A) Employee stock option plan (ESOP) (ii) L&T Technology Services Limited 388 ESOP scheme, 2016 2017-18 Options granted and outstanding at the beginning of the year 39,80,000 5 years) 39,80,000 6.36 5.41 Weighted average remaining contractual life of options (in 9 21,42,600 of (a) above unvested outstanding options 10,82,345 of (a) above vested outstanding options 39,80,000 32,24,945 Options granted and outstanding at the end of the year-(a) 8 7,65,655 Options exercised during the year 7 41,45,000 1,65,000 1,93,900 Options granted during the year 6 1,83,300 Options lapsed during the year The expected volatility has been calculated entirely based on historical volatility of IT Index. 10 June 2016 onwards 1 115.56 (A) The grant of options to the employees under ESOS Plan is on the basis of their performance and other eligibility criteria. Employee Stock Ownership Scheme ('ESOS Plan') Larsen & Toubro Infotech Limited (i) (I) Stock ownership scheme of subsidiary companies: The Group continues its policy of a conservative capital structure which has ensured that it retains the highest credit rating even amidst an adverse economic environment. Low gearing levels also equip the Group with the ability to navigate business stresses on one hand and raise growth capital on the other. This policy also provides flexibility of fund raising options for future, which is especially important in times of global economic volatility. The gross debt equity ratio as at 31-3-2018 is 1.75:1 (as at 31-3-2017: 1.75:1). (k) Capital Management On May, 28, 2018 the Board of Directors has recommended the final dividend of 16 per equity share for the year ended March 31, 2018 subject to approval from shareholders. On approval, the total dividend payment based on number of shares outstanding as on March 31, 2018 is expected to be 2242.19 crore and the payment of dividend distribution tax is expected to be 460.89 crore. (j) (i) During the year ended March 31, 2018, the Company paid the final dividend of 14 per equity share for the year ended March 31, 2017 Sr. NOTE [20] (contd.) LARSEN & TOUBRO (viii) The balance in shares option (net) account as at March 31, 2018 is ₹108.59 crore (previous year: ₹ 177.25 crore), including 76.12 crore (previous year: 117.36 crore) for which the options have been vested to employees as at March 31, 2018. Expected volatility is based on the historical volatility of the Company's share price applicable to the total expected life of each option. 327.51 per share 1355.66 per option 74.52 per option 4.08 years 30.79% 6.72% 2016-17 229.73 per share Notes forming part of the Consolidated Financial Statements (contd.) No. Particulars U.S. Stock Option Sub-plan 2006 1 * 644.71 19.23% 3 years 115.33 17.88% 3 years 7.10% 2016-17 2017-18 6.69% Method used to determine expected volatility vii Weighted average exercise price i IV - XXI I, II & III 2017-18 ESOP Scheme 2000 ESOP scheme 2000 2017-18 2016-17 1 1 2015 ESOP scheme USD 2.4 USD 2.4 15 March 2007 onwards 2017-18 2016-17 * 407.74 iii Vesting commences on 51,30,745 01 October 2002 onwards Options vested 19800 13200 48375 32250 Options yet to vest 89325 59550 70767 47178 130806 75692 357086 351439 176584 1563209 1746787 1986255 1744680 14 Weighted average remaining contractual life of options (in years) Nil Nil * Pursuant to the issue of bonus shares Nil Nil Nil ** Record date: July 14, 2017 Nil Nil Nil 4.72 4.98 Nil iii 1.00 36,58,000 1.00 1,29,300 | Options granted during the year !! the year 11.14 of which 176584 3549464 3491467 47178 487892 427131 70767 1.59 2,36,108 iv | Options lapsed/cancelled during the year 5.64 7,54,925 2.35 14,28,150 Options allotted during the year 2016-17 2017-18 2016-17 2017-18 2016-17 2017-18 2016-17 2017-18 202516 2016-17 - 451376 01 April 2002 onwards Options granted post bonus 25,76,416 Issue 12 Options exercised post bonus issue 156962 2805 - 573580 915424 13 Options granted and outstanding at the end of the year 19800 13200 48375 32250 89325 59550 71600 2.73 11 Options granted and outstanding at the beginning of × 47,000 28,50,140 35,96,300 39,000 6,85,302 14,50,725 36,720 21,345 ix Options granted & outstanding at the end of the year 79,000 1,32,000 61,700 17,650 7,43,460 8,000 11,830 6,73,315 7,25,445 34,110 92,108 1,73,936 12,000 the year viii Options lapsed/cancelled during 3,375 the year vii Options allotted/exercised during 1,29,300 36,58,000 Options granted during the year vi Options reinstated during the year V 82,660 14,50,725 23,50,106 36,720 Options granted & outstanding at the beginning of the year iv 10 June 2017 onwards 15 March 2008 onwards 51,30,745 Options vested at the end of the year out of (ix) 47,000 1,43,650 35,96,300 36,720 i 21,345 (₹) (₹) exercise price Weighted average No. of stock options Weighted average options Particulars No. of stock 2016-17 2017-18 No. Sr. exercise price 5.3 6.2 47,000 3,12,600 Options unvested at the end of the year out of (ix) 2,37,450 12,26,965 4,47,852 2,23,760 xi contractual life of options (in years) 25,37,540 35,96,300 1.7 0.7 39,000 The number and weighted average exercise price of stock options are as follows: xii Weighted average remaining 34 AR Did your Company carry out any consumer survey/ consumer satisfaction trends? Is there any case filed by any stakeholder against the company regarding unfair trade practices, irresponsible advertising and/or anti-competitive behavior during the last five years and pending as of end of financial year 34 Does the company display product information on the product label, over and above what is mandated as per local laws? 34 AR are included in the Director's Report Section of this Annual Report. 34 38 Have you taken steps to ensure that this community development initiative is successfully adopted by the community? What percentage of customer complaints/consumer cases are pending as on the end of financial year. Principle 9: Customer Welfare 32-34 AR 32-34 AR What is your company's direct contribution to community development projects - Amount in INR and the details of the projects undertaken 32-34 LARSEN & TOUBRO AR done any impact assessment of your initiative? The details related to stakeholder complaints We use the following communication channels to engage with various stakeholders: Circulars, Messages from Corporate and Line Management Shareholders and investors Press Releases, Quarterly Results, Annual Reports, Sustainability Reports Have you Periodic feedback mechanism Regular business interactions, Client satisfaction surveys Government Customers Community L&T Helpdesk, toll-free number Some location-specific, some business- specific, a CSR program newsletter. A large bouquet of print and on-line in-house magazines - Online news bulletins to convey topical developments Welfare initiatives for employees and their families Stakeholders Corporate Social initiatives Employee satisfaction surveys For Internal Stakeholders Employees Press Releases, Quarterly Results, Annual Reports, Sustainability Reports, AGM (Shareholders interaction), Access to information and responses to queries meets Regular supplier, dealer and stockist Press Releases, Info desk - an online service, dedicated email id for investor grievances, Quarterly Results, Annual Reports, Sustainability Reports, Corporate Social Responsibility (CSR) Report, Integrated Report, AGM (Shareholder interaction), Investors meet and shareholder visit to works, corporate website. Engagement Modes External Stakeholders Media Suppliers/ Contractors Employee engagement surveys for further improvement in employees' engagement process 32-34 30-32 Are the programmes/projects undertaken through in-house team/own foundation/external NGO/government structures/any other organisation? Does the Company identify and assess potential environmental risks? AR Does the Company have strategies/ initiatives to address global environmental issues such as climate change, global warming, etc? 30-32 AR AR Does the policy related to Principle 6 cover only the Company or extends to the Group/Joint Ventures/Suppliers/Contractors/NGOs/others. Principle 6: Environment 30 AR How many stakeholder complaints have been received in the past financial year and what percent was satisfactorily resolved by the management? 30 AR HP Does the policy of the Company on Human Rights cover only the Company or extend to the Group/Joint Ventures/Suppliers/Contractors/NGOs/Others? Principle 5: Human Rights Are there any special initiatives taken by the company to engage with the disadvantaged, vulnerable and marginalized stakeholders. 28-29 AR Out of the above, has the company identified the disadvantaged, vulnerable and marginalized stakeholders? 28-29 AR L&T's education initiatives benefitted over 3 lakh children AR 30-32 37 Question 32-34 AR Does the company have specified programmes/initiatives/projects in pursuit of the policy related to Principle 8? Principle 8: Inclusive Growth Have you advocated/lobbied through above associations for the advancement or improvement of public good? 32 AR Is your Company a member of any trade and chamber or association? If Yes, Name only those major ones that your business deals with: Principle 7: Policy Advocacy Number of show cause/ legal notices received from CPCB/SPCB which are pending (i.e. not resolved to satisfaction) as on end of Financial Year. 30-32 AR AR AR 30-32 AR Page Number Section Reference Are the Emissions/Waste generated by the Company within the permissible limits given by CPCB/SPCB for the financial year being reported? clean technology, - Has the Company undertaken any other initiatives on energy efficiency, renewable energy, etc. Y/N. Does the Company have any project related to Clean Development Mechanism? 30-32 L&T has been publishing its Sustainability Report for 10 years in a row For each such product, provide the following details in respect of resource use CCE Section C Other Details 20 AR 5. List of activities in which expenditure in 4 above has been incurred: - as percentage of profit after tax (%) 20 1. Does the Company have any Subsidiary Company / Companies? AR 3. Total profit after taxes (INR) 22 20 AR 20 AR 4. Total spending on Corporate Social Responsibility (CSR) 2. Do the Subsidiary Company/Companies participate in the BR Initiatives of the parent company? If yes, then indicate the number of such subsidiary company(s) 3. Do any other entity/entities (e.g. suppliers, distributors etc.) that the Company does business with, participate in the BR initiatives of the Company? If yes, then indicate the percentage of such entity/entities? [Less than 30%, 30-60%, More than 60%] · • Name a) Details of the Director/Director the BR policy/policies • DIN Number 1. Details of Director/Directors responsible for BR Section D: BR Information Question 35 20 20 AR 20 20 AR 20 AR 2. Total Turnover (INR) Designation 1. Paid up Capital (INR) 20 Page Number Section Reference LARSEN & TOUBRO 10. Markets served by the Company - Local/State/National/International ii. Number of National Locations AR i. Number of International Locations (Provide details of major 5 8. List three key products/services that the Company manufactures/provides (as in balance sheet) (industrial activity code-wise) 7. Sector(s) that the Company is engaged in 6. Financial Year Reported 5. Email Id. 4. Website 9. Total number of locations where business activity is undertaken by the Company 19 AR 19 AR 20 AR 20 AR 20 20 AR HR 19 AR 19 AR 19 AR Section B: Financial Details of the Company b) Details of the BR head DIN Number (if applicable) • Name The Company is a leading EPC solutions provider for Solar Photo Voltaic (PV) based power plants helping customers save on energy bills and contributing to reduction of GHG emissions from consumption of indirect energy. Principle 3: Employee Well Being Total number of employees. Total number of employees hired on temporary/contractual/casual basis. Number of permanent women employees. Reference Number of permanent employees with disabilities AR 26-28 AR AP 26-28 What percentage of your permanent employees is members of this recognized employee association? Do you have an employee association that is recognized by management? Section Does the company have a mechanism to recycle products and waste? If yes what is the percentage of recycling of products and waste (separately as <5%, 5-10%, >10%). Also, provide details thereof, in about 50 words or so. Question AR 25-26 (energy, water, raw material etc.) per unit of product (optional): Does the company have procedures in place for sustainable sourcing (including transportation)? AR 25-26 Has the company taken any steps to procure goods and services from local & small producers, including communities surrounding their place of work? AR 25-26 If yes, what steps have been taken to improve their capacity and capability of local and small vendors? AR 25-26 LARSEN & TOUBRO Page Number 25-26 Please indicate the Number of complaints relating to child labour, forced labour, involun- tary labour, sexual harassment in the last financial year and pending, as on the end of the financial year. AR 26-28 What percentage of your under mentioned employees were given safety and skill up grada- tion training in the last year? Section E : Principle-wise Performance 23 AR Does the Company publish a BR or a Sustainability Report? What is the Hyperlink for viewing this report? How frequently it is published? 23 AR 3. Governance Related to BR Indicate the frequency with which the Board of Directors, Committee of the Board or CEO to assess the BR performance of the Company. Within 3 months, 3-6 months, Annually, More than 1 year 21 AR Page Number Reference Section • Email Id Telephone number • Designation Principle1: Ethics, Transparency and Accountability 3. Registered Address Does the policy relating to ethics, bribery and corruption cover only the 24-25 AR 26-28 Principle 4: Valuing Marginalized Stakeholders Has the company mapped its internal and external stakeholders? AR of this Annual Report. Director's Report Section List up to 3 of your products or services whose design has incorporated social or environmental concerns, risks and/or opportunities Principle 2: Sustainable Products and Services are included in the The details related to stakeholder complaints How many stakeholder complaints have been received in the past financial year and what percentage was satisfactorily resolved by the management? Does it extend to the Group/Joint Ventures/Suppliers/Contractors/NGOs /Others? 36 company? AR 2. Name of the Company 1. Corporate Identity Number (CIN) of the Company Section A: General Information about the Company 36,000 trees in Maharashtra alone. We have planted more than 5 lakh trees in last five years across India and we continue to nurture a self-sustaining forest at two locations in India through the Miyakwaki technique. PRINCIPLE 7: RESPONSIBLE PUBLIC ADVOCACY L&T engages with multiple business and trade organizations and professional bodies. Our senior executives participate through active dialogues, be it new policy consultations or presenting views of the stakeholders to the Government. They provide their expertise and business acumen during public policy consultations and present the industrial institution's view. Industrial forums and institutes where L&T participates actively include: • • . • . • • • Association of Business Communicators of India Associated Chambers of Commerce and Industry of India (ASSOCHAM) Bombay Chamber of Commerce & Industry (BCCI) Bureau of Indian Standards Construction Industry Development Council (CIDC) Confederation of Indian Industry (CII), Centre of Excel lence for Sustainable Development (CESD) Cll Green Business Centre (GBC) LARSEN & TOUBRO Indian Electrical and Electronics Manufacturers Association Indian Institute of Chemical Engineers (IIChE) National Safety Council 25-26 National Fire Protection Institution The Company interacts regularly with the Confederation of Indian Industry - Centre of Excellence for Sustainable Development (CII - CESD) on Sustainability and Integrated Reporting policies, regulations and L&T is member of lab India. The Federation of Indian Chambers of Commerce and Industry (FICCI) engages with L&T for CSR and India Sanitation Coalition. L&T regularly interacts with the Indian Institute of Corporate Affairs (IICA) on CSR-re- lated aspects as well. L&T is also an active member of committees such as Environment & Recycling Council by CII - Green Business Centre (GBC), CII EHS Council (Western Region), Corporate Social Responsibility (CSR) etc. PRINCIPLES 8: SUPPORT INCLUSIVE GROWTH The following corporate policies of L&T lay emphasis on inclusive growth by empowering communities and accelerating development. • Corporate Social Responsibility Policy Corporate Human Resource Policy Corporate Environment, Health & Safety (EHS) Policy Sustainability Policy 31 The Company's CSR programmes are based on the theme 'Building India's Social Infrastructure'. The objective is to contribute positively to society, improve the quality of life, provide sustainable solutions and make a meaningful im- pact. The CSR interventions of the Company are based on its CSR Policy and in line with the Companies Act 2013 and CSR Rule 2014. The CSR Committee of the Board oversees A stainabilit गणित स्मार्ट व्यवसाय Networked for Good 29 Principle 5: Business should respect and promote Human Rights L&T is an Indian Multi-national Company (MNC) with a presence in over 30 countries, and is exposed to human rights issues. L&T publishes an annual Communication On Progress (COP) as part of its compliance to UN Global Compact (UNGC) and being a member of Global Compact Network India (GCNI). The policies and practices related to human rights are extended to subsidiary and associate companies as well. L&T's Human Resource Policy covers human rights aspects and ILO conventions. Prohibition of child labour, prohibition of forced and compulsory labour, non-discrimination, freedom of collective bargaining etc. are covered in our Code of Conduct for employees and Human Resource Policy. The Policy for Protection of Women's Rights at Workplace is implemented to address sexual harassment at the workplace. We conduct periodical training to employees on various aspects on human rights. Different training media are used for classroom sessions, policy manual presentations, intranet and posters. The Company complies with applicable regulatory requirements such as the Factories Act 1948, Building & Other Construction Workers (Regulation of Employment and Conditions of Service) Act 1996, Industrial Disputes Act 1947 and amendments thereof. Two complaints of sexual harassment at work place were received, investigated and resolved as per the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 along with its Rules. There are no pending complaints with the Company. Our Combined CoC for suppliers and vendors covers Human Rights clauses, and all new suppliers must confirm their adherence to these clauses before they can commence business with L&T. Principle 6: Business should respect, protect and make efforts to restore the environment Environment protection and the conservation of natural resources are part of L&T's business philosophy. Our Corporate Environment, Health & Safety (EHS) Policy lays emphasis on incorporating environmental consideration into all business processes. As a part of our Sustainability programme, we set quantifiable targets with a timeline and action plan to achieve them since 2009. Our Sustainability Roadmap 2021 is aligned with our business plan, LAKSHYA 2021, which consists of measurable targets and key initiatives. The Sustainability Roadmap is extended to S&A companies and they are encouraged to set similar targets for themselves. Periodically, environmental risks and opportunities are identified from operations and addressed at the business level. We take our sustainability practices to our supply chain to create awareness and bring them abreast with current environmental issues (at regional and global level) and how these can adversely impact their operations. We also Our water conservation efforts have resulted in all 24 of L&T's campuses being water positive 30 LARSEN & TOUBRO share with our vendors, opportunities made available by following sustainability practices and its benefit to them. More than 18,000 suppliers have signed our combined COC, which is the first step towards following a structured sustainability programme in our supply chain. We continue to conduct water assessment surveys at our major campuses. All 24 campuses maintained their 'Water Positive' status in 2017-18. Water conservation and rain water harvesting are practiced within our premises; additionally our community interventions consist of rain water harvesting, check dam construction, creation of farm ponds, soil moisture conservation programmes, etc. The results are very encouraging. Our 24 campuses have been maintaining zero wastewater discharge status since 2014, and our community intervention programmes have helped us to conserve more than 2800 million litres of water annually. Our climate change interventions programme focuses on climate change mitigation and abatement. We focus on reducing the energy consumption intensity (GJ/billion turnover), implementing energy conservation projects and increasing the use of renewable energy at our operations. We also intend to reduce our GHG intensity (tonnes of GHG emissions/billion turnover). This year, we achieved Carbon Neutrality for two of our Campuses, i.e. Powai (Mumbai) and Chennai. We have aligned our practices with Government of India's National Action Plan on Climate Change (NAPCC) and its eight Missions, and its annual progress is published in our Sustainability Report. Increased Tree plantation initiatives across L&T campuses help create natural carbon sinks energy efficiency, developing low emission technologies, building sustainable infrastructure, increasing green cover and dissemination of sustainability knowledge are adopted by the organization. We invest in lower emission and cleaner programmes, thus promoting sustainable growth. Our green product and services portfolio helps our clients to reduce their carbon footprint. We comply with applicable environmental regulatory requirements from the State Pollution Control Board (SPCB) and Central Pollution Control Board (CPCB). Quarterly compliance is submitted by each business and checked by the Corporate Secretarial department. In addition, annual sustainability assurance by an independent assurance agency covers compliance to environmental regulations, including submission of the compliance report to the regulatory agency. During 2017-18, there were no pending or unresolved show cause/legal notices from CPCB / SPCB. Renewable energy at manufacturing campuses is utilized, wherever feasible. Currently, six campuses are sourcing renewable energy (wind and solar) from external sources, and all 24 campuses are generating renewable energy onsite. Fully-grown trees are natural carbon sinks, and biodiversity plays an important role in sustenance of human lives on this planet. L&T undertakes tree plantation both within and outside its premises (as part of our CSR programme) and we engage with agencies / NGOs to conduct plantation at public places, national parks and on Government land. During Tree Plantation Week (1st July 7th July 2017), we planted more than - Id Environme 2017 LET'S Nurturing dreams at one of L&T's Construction Skills Training Institutes Federation of Indian Chambers of Commerce and Industry (FICCI) LARSEN & TOUBRO Number of beneficiaries: 1,650,076 • Treating and supporting HIV/AIDS affected patients through Anti-Retroviral Therapy (ART) centre at Mumbai Artificial kidney dialysis centres Dedicated health centres at 12 locations across India, providing services in reproductive health, diagnostic and clinical camps, maternal and child health care, immunization and health education Providing health services in remote locations through mobile health vans Conducting camps to combat malnutrition and anemia Conducting eye check-ups, blood donation camps and health awareness programmes underprivileged across L&T's locations in India Providing health and welfare facilities for the . Skill Development • . Health Number of beneficiaries: 311,746 conducting extracurricular activities to help children expand their horizons Conducting summer camps, sports activities and running of urban community learning centres Conducting workshops on life skills and awareness on social issues Employee volunteers (L&T-eers) enhancing children's educational quotient Urban and rural community learning centres to provide after-school academic support to children from disadvantaged communities to help them to cope with their curriculum and prevent their dropping out L&T Employee volunteering 'L&T-eers' to augment the • Introduction of innovative teaching and learning techniques in English and Science, computer labs, providing teaching aids and capacity-building programmes for teachers . Providing free training in construction skills like bar bending, formwork carpentry, masonry, scaffolding, welding, electric wiring etc. through Construction Skills Training Institutes (CSTIs) to rural and urban youth to enhance their employability Vocational training programmes for women: Tailoring, beautician, home nursing and food processing courses Imparting skills and development of self-help groups at ICD locations Question ANNEXURE: MAPPING TO THE SEBI FRAMEWORK 'Green' building at L&T's Talegaon campus 34 icc (ccc (mm AU range of energy-efficient switchgear L&T's communication conforms to the recommended guidelines. L&T does not engage in the sale of banned or disputed products. During the reporting period, no complaints were received from any of our stakeholders about incorrect or misleading marketing communication or anti-competitive behaviour or irresponsible advertising. L&T adheres to all the statutory regulations and voluntary codes related to its products and services. L&T's green product and services portfolio helps its clients to reduce their energy, water and material footprint and helps them to follow a low-carbon economy path. L&T engages with its customers through regular customer meets, customer satisfaction surveys, market based research including training and capacity-building programmes for customers. Inputs from customer feedback sessions are incorporated into our operations. Senior management actively gets engaged in customer feedback reviews and suggest corrective and preventive action. . specifications and codes, thereby providing adequate information. L&T customizes the design and delivery of its products to fulfill the various needs of the customers. Our products are tested against stringent national and international standards such as Indian Standard, International Organization of Standardization (ISO), ROHS (Restriction of Hazardous Substances - for relevant products) and International Electro Technical Commission. Training our product user / client is an integral part of our services, and includes training in preventive maintenance. Adequate signs are affixed on the products for ease of understanding during transportation and use. We have a robust EHS management framework complemented by active involvement from our vendors and contractors working at our campuses and project sites. In addition, health and safety impacts and concerns throughout the lifecycle are addressed while designing products or offering services. L&T offers products and services in diverse fields, keeping in mind changing customer demands and market trends in india and select geographies. Such changes are also incorporated into training, R&D, design and testing, manufacturing, construction process and customer interaction. Various digitalization initiatives are under way to help in project monitoring to enhance efficiencies. L&T has identified digitalization as a key driver to enhance its global competitiveness. The Company is building its capabilities to harness the true power of digital assets and incorporate digital strategies into business model. PRINCIPLE 9: ENGAGE WITH AND PROVIDE VALUE TO CUSTOMERS The Company contributed 100.92 crore in 2017-18 towards CSR activities as per the Companies Act 2013 Total beneficiaries: 21,52,276 Collaboration with state-run technical institutes (ITIS) Number of beneficiaries: 36,327 33 L&T has built over 200 check dams in water-stressed areas Our products carry adequate labelling and are supported by operation and maintenance manuals incorporating related 32 . • 'Science on Wheels' vans the implementation of CSR programmes on a project mode through CSR team at the corporate level. They are ably supported by Sustainability and CSR coordinators from all businesses. L&T's CSR interventions are focused on four thrust areas: Water & sanitation, education, health and skill-development, as detailed below. Water & Sanitation: . • • Implementation of Integrated Community Development (ICD) Programme, with the objective of making safe drinking water available to communities in the water-stressed regions of Maharashtra, Tamil Nadu and Rajasthan Creating access to sanitation facilities for disadvantaged communities by building toilets and bathrooms Implementing soil and moisture conservation pro grammes, building water harvesting structures, check dams, field bunds and other agricultural techniques Tree plantation in and around our operational areas and at ICD locations Number of beneficiaries: 154,127 Education • • Pre-primary and primary education Infrastructure development in schools • One of L&T's Artificial Kidney Dialysis centres 25.42 78039.82 83305.33 5362.09 6019.74 5362.09 6019.74 398 Finance cost of financial services business and finance lease activity: Interest and other financing charges 10595.04 10520.74 3347.73 2998.51 Miscellaneous expenses 377.86 405.05 Travelling and conveyance 875.89 1016.00 Repairs to plant and equipment 412.88 92.16 Repairs to buildings 8.27 General repairs and maintenance 83.03 d) Income-Tax liability (including penalty) that may arise in respect of which the Group is in appeal Rates and taxes Loans guaranteed by directors Nil (previous year: ₹ Nil) 67340.58 25019.03 23822.04 72914.76 42321.55 49092.72 0.08 0.08 Sales tax deferment loan 0.25 0.25 0.20 0.20 Finance lease obligation [Note 48(b)(i)(B)] 38.63 38.63 Term loans from others 1147.02 1147.02 1201.78 1201.78 12741.60 35154.39 12677.23 36532.84 22412.79 23855.61 Term loans from banks 1245.64 1245.64 NOTE [23] 0.675% Foreign currency convertible bonds Other financial liabilities - non-current Embedded derivatives payables 0.65 0.52 32.48 79.39 38.39 19.97 crore crore As at 31-3-2017 As at 31-3-2018 392 Other provisions [Note 53] Provision for employee benefits-others Post retirement medical benefit plan [Note 45(b)(i)] Employee pension scheme [Note 45(b)(i)] Particulars Particulars Provisions - non-current NOTE [24] Due to others Financial guarantee contracts Forward contract payables 905.26 905.26 Preference share NOTE [22] Notes forming part of the Consolidated Financial Statements (contd.) 391 ^ Debenture redemption reserve (DRR): The Group has issued redeemable non-convertible debentures and created DRR in terms of the Companies (Share capital and Debenture) Rules, 2014 (as amended). A company is required to maintain a DRR of 25% of the value of debentures issued, either by a public issue or on a private placement basis (excluding private placement by non-banking finance companies). The amounts credited to the DRR may not be utilised except to redeem debentures. 50029.93 55376.72 70.97 347.52 437.77 24.78 359.62 (12.10) 449.22 (11.45) Debt instruments through other comprehensive income [Note 1(q)] Cost of hedging reserve Cash flow hedging reserve Hedging reserve [Note 1(q)] 2742.30 37335.32 478.24 572.67 Foreign currency translation reserve [Note 1(w)(iii)] 3352.91 41837.17 Retained earnings 461.97 Financial Liabilities: Borrowings - non-current Particulars Secured As at 31-3-2018 Unsecured 113.52 113.52 275.00 275.00 crore 29409.91 9776.15 crore crore 19633.76 crore crore 8876.75 34063.86 50.00 116.96 254.07 116.96 50.00 Redeemable non-convertible floating rate debentures 25187.11 Redeemable non-convertible fixed rate debentures crore Total Unsecured Secured Total As at 31-3-2017 Redeemable non-convertible inflation indexed debentures 514.98 154.57 226.09 crore 1740.55 6777.81 crore Total Secured Unsecured Total Secured Unsecured As at 31-3-2017 As at 31-3-2018 Loans guaranteed by directors Nil (previous year: Nil) Sales tax deferment loan Finance lease obligation [Note 48(b)(i)(B)] Loans from financial institutions Term loans from banks Preference shares Redeemable non-convertible floating rate debentures Redeemable non-convertible fixed rate debentures Particulars Financial Liabilities: Current maturities of long term borrowings NOTE [27] 16534.47 0.94 14429.74 5132.80 crore 8518.36 0.94 249.55 6508.48 NOTE [28] Notes forming part of the Consolidated Financial Statements (contd.) 393 3903.70 10078.90 6175.20 3365.92 15277.47 11911.55 0.20 0.20 0.60 0.60 0.06 0.08 0.06 0.08 0.63 178.82 2499.54 178.82 1506.34 993.20 0.63 crore 7399.11 2217.74 crore crore 5181.37 249.55 1375.68 2104.73 17723.50 19331.85 1608.35 NOTE [26] Particulars Other payables Other non-current Liabilities NOTE [25] Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 526.60 523.54 1.46 0.93 9.21 12.44 221.19 209.04 294.74 301.13 crore crore As at 31-3-2017 As at 31-3-2018 Financial Liabilities: Borrowings - current Particulars Loans repayable on demand Short term loans and advances from banks 11993.96 429.05 2307.06 crore 1804.40 crore 65.50 1941.23 429.05 11993.96 crore 1738.90 365.83 crore 1569.13 4102.79 463.73 13196.20 crore 57.66 4005.91 463.73 13196.20 * crore 1511.47 96.88 Total 353.95 As at 31-3-2017 Secured Unsecured As at 31-3-2018 Secured Unsecured 172.14 67.97 172.14 67.97 crore crore As at 31-3-2017 As at 31-3-2018 Short term unsecured loans from others Commercial paper Total 32.00 92.57 1025.44 1222.89 18.53% 6.44% 8.05% (iii) L&T Finance Holdings Limited Method used to determine expected volatility Weighted average risk-free interest Weighted average expected dividend yield over life of option (viii) (vii) (vi) 25.17% 42.54% 28-Jul-16 & 27-Aug-16 27-Jul-23 & 26-Aug-23 281.00 per option 2017-18 * 2.00 23-Aug-17 22-Aug-24 737.10 per option Weighted average share price at grant date Weighted average expected price volatility of Company's share (v) (iv) Expiry date (iii) Grant date (ii) 6.95% Weighted average exercise price The expected price volatility is based on the historic volatility (based on the remaining life of the options), adjusted for any expected changes to future volatility due to publicly available information. 389 33,30,000 Options granted during the year 3 28,18,795 year 2 Options granted and outstanding at the beginning of the Market Price 44.20 Grant Price (*) 1 2016-17 Scheme 2013 2017-18 2016-17 Scheme 2010 2017-18 Series reference Sr. No. 390 (B) The details of the grants are summarized below: period of 4 years in ratio of 15%, 20%, 30% and 35% respectively from the date of grant, subject to the discretion of the management and fulfillment of certain conditions. The options granted under scheme 2013 are vested in a graded manner over a period of four year with 0%, 33%, 33% and 34% of grants vesting each year, commencing from the end of 24 month from the date of grant. Options can be exercised within a period of 7 years from the date of grant for schemes 2010 and 2010A. The options granted under scheme 2013 can be exercised within period of 8 years from the date of grant and would be settled by way of equity. Management has discretion to modify the exercise period. NOTE [20] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) (A) The subsidiary has formulated Employee Stock Option Schemes 2010 (ESOP Scheme-2010), 2010-A (ESOP Scheme 2010-A) and 2013 (ESOP Scheme 2013). The grant of options to the employee under the Stock Options scheme is on the basis of their performance and other eligibility criteria. The options allotted under scheme 2010 are vested over a (i) Particulars Sr. No. Options granted during the year (ii) 2 39,80,000 Options granted and outstanding at the beginning of the year (i) Weighted average exercise price (3) No. of stock options Weighted average exercise price (*) No. of stock options Particulars No. Sr. 2016-17 2017-18 (v) The number and weighted average exercise price of stock options are as follows: (iv) Options granted on July 28, 2016 include 15,00,000 and 5,00,000 options granted to non-executive directors and key managerial personnel respectively. Options granted on August 28, 2016 include 50,000 options granted to key managerial personnel. No options were granted to key managerial personnel during the current year. NOTE [20] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 414.42 1,93,900 2 41,45,000 2 2016-17 2.00 (ix) The fair value at grant date of options granted during the year ended March 31, 2018 is 737.10 (previous year: 281.00). The fair value of grant date is determined using the Black Scholes Model which takes into account the exercise price, term of option, share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option. The model inputs for options granted during the year included: (viii) In respect of stock options granted pursuant to the Company's stock options schemes, the fair value of the options is treated as discount and accounted as employee compensation over the vesting period. (vii) No options expired during the periods covered in the above table. (vi) Weighted average share price at the date of exercise for stock options exercised during the year is ₹849.70 per share. out of (a) above 2 10,82,345 (vi) Options exercisable at the end of the year 2 61,08,998 6,50,000 2 22 32,24,945 Options granted and outstanding at the end of the year (v) 1,83,300 Options lapsed during the year (iv) 2 7,65,655 (iii) Options exercised during the year 1,65,000 39,80,000 2,37,93,000 2,35,50,000 1,37,20,000 Capital redemption reserve Capital reserve on consolidation Capital reserve Capital reserve [Note 1(g)] Share application money pending allotment Equity component of foreign currency convertible bonds Particulars Other Equity NOTE [21] Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO Expected volatility is based on the historical volatility of the Company's shares price applicable to the expected life of each option. *73.70 per option 116.58 per option *75.53 per option 3.19 per option 3.98 years 32.53% 7.49% 2016-17 145.59 per option 3.12 per option Securities premium account [Note 1(t)] Employee share options (net) [Note 1(v)] Employee share options outstanding Deferred employee compensation expense 1399.55 Reserve u/s 45 IC of the Reserve Bank India Act, 1934 Reserve u/s 29C of National Housing Bank Act, 1987 Reserve under section 36(1)(viii) of Income tax Act, 1961 1345.81 Debenture redemption reserve ^ Statutory reserves 303.25 313.56 595.25 (292.00) (222.93) 536.49 32.57% 8318.85 276.08 42.00 8363.02 10.52 269.76 3.56 crore 153.20 153.20 crore crore crore As at 31-3-2017 As at 31-3-2018 280.28 Financial Liabilities current: Trade payables 2017-18 6.72% 3.90 years g) Options vested 2,37,93,000 3,00,90,000 28,18,795 42,04,925 of which Options granted and outstanding at the end of the year 6 5,19,500 35,80,500 18,03,810 16,91,008 Options exercised and shares allotted during the year 5 1,08,77,500 38,42,500 21,36,393 2,52,862 Options cancelled/lapsed during the year 4 1,16,40,000 1,71,425 Options yet to vest 40,33,500 15,76,795 12,42,000 f) Weighted average exercise price e) Weighted average share price Weighted average expected dividends d) Weighted average expected volatility c) Weighted average expected life of options b) Weighted average risk-free interest rate a) Method used to determine expected volatility Particulars (C) Weighted average fair values of options granted during the year is ₹68.27 (previous year: 27.24) per options. (D) The fair value has been calculated using the Black-Scholes Option Pricing Model and the significant assumptions and inputs to estimate the fair value of options granted during the year are as follows: 6.29 6.15 5.05 6.01 Weighted average remaining contractual life of options (in years) 7 2,14,02,500 23,90,500 14,30,000 2,86,60,000 Sr. No. Acceptances 4.16 271.92 Associate companies 422.62 665.67 112.54 125.11 82.12 107.10 205.77 399.47 22.19 33.99 * crore crore crore crore 2016-17 2017-18 Change in inventories of finished goods, work-in-progress, stock-in-trade Sub-contracting charges Stores, spares and tools consumed Value of stock in trade transferred on sale of business Purchase of stock-in-trade 1.66 Construction materials consumed 53.78 55.44 crore crore crore crore 2016-17 2017-18 1344.11 169.62 8.03 17.88 (56.89) 5.46 269.14 1412.03 67.14 (125.74) 34.22 (2217.72) 664.54 2692.64 664.54 2692.64 84.09 1.64 82.45 Particulars Excise Duty Less: Scrap sales Miscellaneous income 619.09 Profit on sale of investment properties 95.81 Profit on sale of subsidiaries/associate of realty business 59.56 59.44 Premium earned (net) on related forward exchange contracts 1.75 Property maintenance recoveries 70.89 19.64 111.02 Lease rentals 15.73 Income from hire of plant and equipment Other operational income: 108586.72 118087.06 174.73 2216.31 968.01 1178.38 1775.04 1424.28 Raw materials and components Materials consumed: Manufacturing, construction and operating expenses NOTE [36] Miscellaneous income (net of expenses) Net gain/(loss) on sale or fair valuation of investments Gain/(loss) on derivatives at fair value through profit or loss Net gain/(loss) on sale of property, plant and equipment Lease rentals Current investments Others Trade investments Dividend income: 15492.48 115.27 Joint venture & associate companies Others Interest income on long term investments Interest Income on current investments Interest income: Particulars Other income NOTE [35] Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 396 110011.00 119862.10 Interest Income on others: 2628.68 14425.96 104.98 14320.98 699.19 20716.99 1276.40 Power and fuel (48.72) Excise duty on stocks Other manufacturing, construction and operating expenses: 84.00 352.96 (268.96) 6526.95 (1230.19) Value of inventory transferred on sale of business (1230.19) 6173.99 293.63 Property development land 1197.58 1259.39 Work-in-progress Cost of built up space and property development land: 4570.76 4385.19 Work-in-progress 19.28 1309.05 179.99 Royalty and technical know-how fees 16.44 492.58 Due to related parties: 530.37 Rent 230.88 252.41 Insurance 1163.42 1423.68 Engineering, professional, technical and consultancy fees 152.01 Insurance claim incurred (net) 188.56 203.15 Bank guarantee charges 1375.15 1663.04 Hire charges-plant and equipment and others 383.45 411.41 Packing and forwarding 16.00 188.59 Stock-in-trade 284.99 1259.39 2307.47 Work-in-progress Cost of built up space and property development land: 4385.19 4540.13 Work-in-progress 188.59 200.63 Stock-in-trade 340.82 245.25 Finished goods Closing stock: and property development: 22560.54 2090.42 1610.57 1357.76 2384.91 1610.57 1387.31 (29.55) Completed property 110.70 Property development land Carried forward 340.82 Finished goods 6173.99 61998.69 67995.04 7404.18 crore crore crore crore 2016-17 15377.21 178.94 24057.20 2017-18 Less: Opening stock: Brought forward Manufacturing, construction and operating expenses (contd.) NOTE [36] Notes forming part of the Consolidated Financial Statements (contd.) 397 6173.99 61998.69 7404.18 67995.04 6173.99 7404.18 Particulars Fees for operation and maintenance of power plant Premium earned (net) from insurance business 24639.02 615.56 Particulars Current Liabilities: Provisions NOTE [31] Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 23384.55 27326.97 2740.28 2975.12 13955.55 525.44 6163.28 crore As at 31-3-2017 * crore 8610.43 705.11 15036.31 As at 31-3-2018 394 Other payables Advances from customers Due to customers (property development projects) Due to customers- construction contract Provision for employee benefits: Gratuity [Note 45(b)(i)] Compensated absences Employee pension scheme [Note 45(b)(i)] 22.67 25.55 999.95 1024.72 199.94 215.17 crore crore crore * crore Particulars As at 31-3-2017 b) Sales-tax liability that may arise in respect of matters in appeal a) Claims against the Group not acknowledged as debts Particulars Contingent Liabilities NOTE [32] Other provisions [Note 53] Additional tax on dividend Others: Others Post-retirement medical benefits plan [Note 45(b)(i)] As at 31-3-2018 13.12 4828.64 4466.70 447.62 crore crore crore As at 31-3-2017 As at 31-3-2018 Other current liabilities NOTE [30] Due to others Embedded derivative payables Forward contract payables Financial guarantee contracts Unclaimed interest on debentures Unclaimed dividend Other financial liabilities - current NOTE [29] Particulars Due to others 357.87 Micro and small enterprises Joint venture companies crore 390.20 23.03 1142.79 18.41 1928.39 1165.82 184.70 131.84 544.33 171.65 1.55 0.95 10.87 14.16 46.61 63.69 4040.58 crore Particulars As at 31-3-2017 As at 31-3-2018 30294.86 27827.60 37794.96 36005.07 130.26 176.45 1946.80 crore 13.36 4848.99 4.09 Manufacturing and trading activity 74504.71 83595.78 Construction and project related activity [Note 44(a)] Sales & service: crore crore crore crore 2016-17 2017-18 Particulars Revenue from operations NOTE [34] 495.95 409.74 (iii) Estimated amount of contracts remaining to be executed for Investment property 2908.45 2075.57 assets (ii) Estimated amount of contracts remaining to be executed for Intangible 7838.44 Engineering service fees 3849.87 3312.25 Investment/portfolio management and trusteeship fees 1.66 0.79 5.00 Charter hire income 163.89 206.98 Commission 825.71 737.52 883.58 Servicing fees Fare collection and related activities 2272.71 686.81 Property development activity [Note 44(c)] 9190.34 10452.48 Income from financing activity/annuity based projects 6482.86 7445.55 Software development products and services 28.60 836.78 9083.68 753.92 2555.45 e) Guarantees or Letter of credit or letter of comfort given to third parties f) Contingent Liabilities incurred in relation to interest in joint operations g) Share in contingent liabilities of joint operations for which the Group is contingently liable 1283.56 692.12 269.04 356.23 c) Excise duty / Service Tax / Custom duty / Entry Tax / Stamp duty/Municipal Cess liability that may arise, including those in respect of matters in appeal/ challenged by the Group in WRIT 273.06 254.63 823.76 4431.11 crore crore As at 31-3-2017 As at 31-3-2018 1427.80 2667.81 1200.19 2483.75 18.94 1408.86 1131.65 1240.01 3386.98 7267.96 68.54 (iv) In respect of matters at (f) to (h), the cash outflows, if any, could generally occur upto completion of projects undertaken by the respective joint operations. crore As at 31-3-2017 As at 31-3-2018 (i) Estimated amount of contracts remaining to be executed on capital account for Property, plant & equipment (net of advances) Particulars Commitments: NOTE [33] Notes forming part of the Consolidated Financial Statements (contd.) 395 Particulars of share in contingent liabilities of joint ventures and associates are given in Note 55 (g). (v) crore (iii) In respect of matters at (e), the cash flows, if any, could occur any time during the subsistence of the underlying agreement. The Group expects reimbursements of 97.67 crore (previous year: 34.01 crore) in respect of the above contingent liabilities. (ii) It is not practicable to estimate the timing of cash outflows, if any, in respect of matters at (a) to (d) above pending resolution of the arbitration/appellate proceedings. Further, the liability mentioned in (a) to (d) above excludes interest and penalty in cases where the Group has determined that the possibility of such levy is remote. (i) Notes: 6230.96 6576.16 h) Contingent liabilities in respect of liabilities of other joint operators in respect of joint operations 53.24 139.20 7018.24 50.00 50.00 India UAE 1. ownership Interest (%) Proportion of voting power held (%) 50.00 Proportion of effective L&T-Chiyoda Limited 50.00 Qatar Gujarat Leather Industries Limited@ India 50.00 50.00 50.00 50.00 3. Larsen & Toubro Qatar & HBK Contracting Co. WLL As at 31-3-2017 50.00 50.00 2. Proportion of voting power held (%) 100.00 Proportion of effective ownership Interest (%) 50.00 L&T Global Holdings Limited 100.00 43. 100.00 100.00 * The Group has sold its stake on September 28, 2017 Λ The Group has acquired stake on March 1, 2017 ΑΛ As at 31-3-2018 The Group has acquired stake on December 15, 2017 ** The company is reclassified from joint venture to subsidiary due to purchase of additional stake on August 16, 2017 # The company is in the process of liquidation 403 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [40] (contd.) Sr. Principal place of business No. Name of associate company ^^^ The Group has acquired stake on June 1, 2017 50.00 @ L&T Camp Facilities LLC 16.64 17.32 17.32 9. Ardom Towergen Private Limited India 7.77 7.77 8.08 8.08 10. KMC Infratech Road Holdings Limited^^^ India 0.09 0.09 The company is in process for closure Λ The company operates under severe long term restrictions that significantly impair its ability to transfer funds to the company and hence the same has not been considered for consolidation ΛΛ The Group has sold its stake on September 7, 2017 100.00 ΑΛΛ The Group has sold its stake on March 19, 2018 16.64 India Grameen Capital India Limited^ 8. UAE 49.00 49.00 49.00 49.00 5. International Seaport (Haldia) Private Limited India 21.74 21.74 21.74 4. 21.74 Magtorq Private Limited India 42.85 42.85 42.85 42.85 7. Feedback Infra Private Limited^^ India 15.42 15.42 6. 100.00 Mexico 100.00 UAE 100.00 100.00 100.00 100.00 Malaysia 100.00 100.00 100.00 100.00 88 Kana Controls General Trading & Contracting Company W.L.L. Kuwait 49.00 100.00 49.00 100.00 34. L&T Electrical & Automation FZE UAE 100.00 100.00 88.64 88.64 USA 82.96 Syncordis France SARL^^ 27. As at 31-3-2018 28. Syncordis Limited ^^ 29. Syncordis PSF S.A. ^^ Esencia Technologies, Inc. ^^^ 31. L&T Realty FZE Henikwon Corporation SDN. BHD. 100.00 82.96 Luxembourg 82.96 82.96 France 82.96 82.96 UK 82.96 82.96 Luxembourg 82.96 82.96 100.00 100.00 L&T Electricals & Automation Saudi Arabia Company Limited LLC Tamco Switchgear (Malaysia) SDN BHD Malaysia 100.00 100.00 100.00 100.00 40. Thalest Limited UK 100.00 100.00 100.00 100.00 41. Larsen & Toubro (East Asia) Sdn. Bhd. Malaysia 30.00 100.00 30.00 100.00 42. Larsen & Toubro International FZE UAE 39. 100.00 100.00 100.00 Kingdom of Saudi Arabia 100.00 100.00 100.00 100.00 36. PT Tamco Indonesia Indonesia 100.00 100.00 35. 100.00 37. Servowatch Systems Limited UK 100.00 100.00 100.00 100.00 38. Tamco Electrical Industries Australia Pty Limited Australia 100.00 100.00 Sr. No. Name of joint venture As at 31-3-2017 Principal place of business 97.45 27. L&T Port Kachchigarh Limited # India 97.45 28. L&T Halol-Shamlaji Tollway Limited India 47.75 47.75 29. Krishnagiri Walajahpet Tollway Limited India 97.45 97.45 30. Devihalli Hassan Tollway Limited India 97.45 97.45 31. PNG Tollway Limited India 97.45 India Ahmedabad-Maliya Tollway Limited 26. L&T Transportation Infrastructure Limited India 98.12 98.12 404 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [40] (contd.) Sr. No. Name of joint venture Principal place of business As at 31-3-2018 Proportion of effective ownership interest (%) 72.11 As at 31-3-2017 Joint Ventures 24. LTIDPL INDVIT Services Limited(formerly known as L&T Western India Tollbridge Limited) India 97.45 97.45 25. L&T Interstate Road Corridor Limited India 97.45 97.45 Proportion of effective ownership interest (%) 23. 72.11 L&T IDPL Trustee Manager Pte. Ltd. ** The joint venture has been entered on June 24, 2017 As at 31-3-2018 Sr. No. Name of joint operation (with specific ownership interest in the arrangement) Principal place of business Proportion of effective ownership interest (%) Proportion of effective ownership interest (%) 1. Desbuild L&T Joint Venture India 49.00 49.00 2. Larsen and Toubro Limited-Shapoorji Pallonji & Co. Ltd. Joint Venture India 50.00 50.00 3. Syncordis S.A. Luxembourg ^^ Al Balagh Trading & Contracting Co W.L.L- L&T Joint Venture The joint venture has been entered on April 5, 2017 * The company is merged with L&T Infrastructure Development Projects Limited w.e.f. April 1, 2016 # Singapore 97.45 97.45 33. L&T Kobelco Machinery Private Limited India 51.00 51.00 34. Raykal Aluminium Company Private Limited India 32. 75.50 35. Larsen & Toubro Electromech LLC ^ Sultanate of Oman 65.00 36. Indiran Engineering Projects and Systems Kish PJSC Iran 50.00 50.00 Λ The company is reclassified from joint venture to subsidiary due to purchase of additional stake on August 16, 2017 75.50 97.45 97.45 India L&T MBDA Missile Systems Limited * India 51.00 7. L&T Sapura Offshore Private Limited India 60.00 60.00 8. L&T Sapura Shipping Private Limited India 60.00 60.00 9. L&T-Gulf Private Limited India 50.00 50.00 10. L&T Hydrocarbon Caspian LLC ** Azerbaijan 50.00 11. 6. 74.00 74.00 India Proportion of effective ownership interest (%) As at 31-3-2017 Proportion of effective ownership interest (%) 1. L&T-MHPS Boilers Private Limited India 51.00 51.00 2. L&T-MHPS Turbine Generators Private Limited India 51.00 L&T Infrastructure Development Projects Limited 51.00 L&T Howden Private Limited India 50.10 50.10 4. L&T-Sargent & Lundy Limited India 50.00 50.00 5. L&T Special Steels and Heavy Forgings Private Limited 3. India 97.45 97.45 97.45 97.45 18. L&T Sambalpur-Rourkela Tollway limited India 97.45 97.45 19. Panipat Elevated Corridor Limited India 97.45 India 97.45 Krishnagiri Thopur Toll Road Limited India 97.45 97.45 21. Western Andhra Tollways Limited India 97.45 97.45 22. Vadodara Bharuch Tollway Limited 20. Joint Ventures Kudgi Transmission Limited 97.45 12. L&T Chennai-Tada Tollway Limited India 97.45 97.45 13. L&T BPP Tollway Limited India 97.45 97.45 14. 17. L&T Rajkot-Vadinar Tollway Limited 97.45 97.45 15. L&T Deccan Tollways Limited India 97.45 97.45 16. L&T Samakhiali Gandhidham Tollway Limited India 97.45 India L&T Infotech S. DE R.L. DE C.V. ^ 15292.48 89.77 and other Note 36: Manufacturing, construction and operating Note 37: Note 38: Employee Sales, Note 39: Finance costs Total benefits administration expense and other expenses expenses expenses expenses 1 Power and fuel 1276.40 118.13 1394.53 1309.05 114.14 1423.19 expense and operating benefits administration construction 2075.53 Other provisions (2.28) (245.82) 79.30 7698.10 (8.91) 62.34 228.76 6988.24 399 Notes forming part of the Consolidated Financial Statements (contd.) 2 NOTE [38] (contd.) crore Sr. No. Note 36: Nature of expenses Manufacturing, Note 37: Employee 2017-18 Note 38: Sales, 2016-17 Note 39: Finance costs Total 38(a) Aggregation of expenses disclosed vide [Note 36 -Manufacturing, construction and operating expenses], [Note 37 - Employee benefits expense], [Note 38 - Sales, administration and other expenses] and [Note 39 - Finance costs] 2214.17 Packing and forwarding 157.36 572.03 6 Travelling and conveyance 875.89 688.91 1564.80 1016.00 623.48 1639.48 7 Repairs to plant and equipment 83.03 83.03 92.16 92.16 8 Repairs to buildings 8.27 31.77 40.04 25.42 20.66 46.08 166.98 405.05 565.80 151.38 568.77 383.45 157.97 541.42 3 Insurance 252.41 179.16 76.47 508.04 230.88 171.80 411.41 69.73 4 Rent 530.37 536.31 1066.68 492.58 496.13 988.71 5 Rates and taxes 414.42 472.41 9 Allowances for doubtful debts and loans and advances (net) Provision/(reversal) for foreseeable losses on construction contracts Exchange (gain)/loss [net] 376.31 Employee medical & other insurance premium expenses 179.16 171.80 Staff welfare expenses Recoveries on account of deputation charges 1011.83 996.90 (259.87) (279.94) 13853.97 NOTE [38] Sales, administration and other expenses 2017-18 2016-17 Particulars crore Power and fuel Packing and forwarding Insurance Rent Rates and taxes Travelling and conveyance Repairs to buildings 88.17 111.39 Expenses on employee stock option scheme 536.83 Qatar LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [37] Employee benefits expense 2017-18 2016-17 Particulars crore crore crore General repairs and maintenance Salaries, wages and bonus crore 12340.21 Contribution to and provision for: Provident fund and pension fund 254.27 225.25 Superannuation/employee pension and social security schemes Gratuity funds [Note 45(b)(ii)] 188.49 179.80 140.83 131.78 583.59 13666.38 50.90 Professional fees Telephone, postage and telegrams 180.05 63.88 64.63 Distributors and agents Others 499.91 7.12 286.64 6.49 507.03 293.13 Bank charges 155.37 127.84 Miscellaneous expenses 739.19 644.50 Bad debts and advances written off 1205.38 458.55 Less: Allowances for doubtful debts and advances written back 372.36 82.24 Receivable discounting charges -non recourse 833.02 36.25 168.36 201.19 206.18 3.60 Advertising and publicity Stationery and printing Commission: crore 118.13 crore crore 114.14 157.36 157.97 76.47 69.73 Directors' fees 536.31 151.38 166.98 688.91 623.48 31.77 20.66 446.05 440.43 730.79 598.85 6.28 496.13 General repairs and maintenance 55. 13. PT Larsen & Toubro Hydrocarbon Engineering Indonesia Indonesia 95.00 95.00 95.00 95.00 14. Larsen & Toubro Electromech LLC ** Sultanate of Oman 70.00 99.99 15. L&T Information Technology Services (Shanghai) Co., Ltd. China 82.96 82.96 84.28 84.28 16. L&T Infotech Financial Services Technologies Inc. Canada 75.00 49.00 100.00 49.00 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [40] (contd.) As at 31-3-2018 Sr. Name of subsidiary company No. Principal place of business Proportion of effective ownership Interest (%) Proportion of voting power held (%) As at 31-3-2017 Proportion of effective ownership Interest (%) 82.96 Proportion of voting power held (%) 11. Larsen & Toubro ATCO Saudi LLC Kingdom of Saudi Arabia 100.00 100.00 75.00 75.00 12. Larsen & Toubro Kuwait Construction General Contracting Company WLL Kuwait Foreign Subsidiaries LARSEN & TOUBRO 82.96 84.28 21. Larsen & Toubro Infotech Austria GmbH Austria 82.96 82.96 84.28 84.28 234562220-23 L&T Information Technology Spain, S.L. Larsen & Toubro LLC L&T Technology Services LLC Spain 82.96 82.96 84.28 84.28 USA 99.19 99.19 100.00 100.00 USA 88.64 88.64 84.28 84.28 82.96 82.96 17. Larsen & Toubro Infotech Canada Limited Canada 82.96 82.96 84.28 84.28 18. Larsen & Toubro Infotech LLC USA 82.96 84.28 82.96 84.28 19. Larsen & Toubro Infotech South Africa (PTY) Limited South Africa 62.14 62.14 63.12 63.12 20. Larsen & Toubro Infotech GmbH Germany 84.28 402 75.00 75.00 of business Name of subsidiary company No. As at 31-3-2018 Proportion of effective ownership Interest (%) Proportion of voting power held (%) As at 31-3-2017 Proportion of effective ownership Interest (%) Proportion of voting power held (%) Foreign Subsidiaries 1. Larsen & Toubro (Oman) LLC Sultanate of Oman 65.00 65.00 65.00 65.00 2. Larsen & Toubro Qatar LLC# Qatar 49.00 100.00 49.00 100.00 Sr. Principal place The Company is merged with Larsen & Toubro Infotech Limited w.e.f. April 1, 2017 The Company is in process for closure # L&T Capital Company Limited India 100.00 100.00 100.00 100.00 56. L&T Infra Contractors Private Limited India 100.00 100.00 3. 100.00 The Group has sold its stake on September 27, 2017 ** The Group has sold its stake on November 16, 2017 @ The Company is merged with Larsen & Toubro Limited w.e.f. April 1, 2017 @@ The Company is merged with L&T Capital Markets Limited w.e.f. April 1, 2017 Λ The Group acquired stake on June 1, 2017 ^^ The Group acquired stake on December 11, 2017 ^^^ The Company is incorporated on August 8, 2017 % 100.00 Larsen & Toubro Saudi Arabia LLC Kingdom of Saudi Arabia 100.00 100.00 100.00 8. L&T Modular Fabrication Yard LLC Sultanate of Oman 70.00 99.99 65.00 65.00 100.00 9. Nigeria 100.00 100.00 100.00 100.00 10. Larsen Toubro Arabia LLC Kingdom of Saudi Arabia 75.00 99.99 L&T Overseas Projects Nigeria Limited 89.77 Saudi Arabia 7. 100.00 100.00 100.00 100.00 4. Larsen & Toubro T&D SA (Proprietary) Limited South Africa 72.50 72.50 72.50 72.50 Larsen & Toubro Hydrocarbon International Limited LLC Kingdom of 5. Industries LLC⭑ UAE 49.00 100.00 6. Larsen & Toubro Heavy Engineering LLC Sultanate of Oman 70.00 99.99 70.00 70.00 Larsen & Toubro Readymix & Asphalt Concrete 80.00 100.00 89.77 Metro Tunneling Delhi- L&T Shanghai Urban Construction 10. 75.00 75.00 India (Group) Corporation Joint Venture Metro Tunneling Chennai-L&T Shanghai Urban Construction 9. 90.00 90.00 India (Group) Corporation Joint Venture L&T Hochtief Seabird Joint Venture 26.00 26.00 India Metro Tunneling Group 7. 26.00 26.00 India International Metro Civil Contractors Joint Venture 6. 43.00 8. India 60.00 60.00 DAEWOO and L&T Joint Venture 15. 51.00 51.00 India Venture L&T-Shanghai Urban Construction (Group) Corporation Joint 14. 29.00 29.00 Arabia Kingdom of Saudi Civil Works Joint Venture 13. 22.00 22.00 Qatar Aktor-Larsen & Toubro-Yapi Merkezi-STFA-Al Jaber Engineering Joint Venture 12. 68.00 68.00 India Venture CC27 Delhi L&T-Shanghai Urban Construction (Group) Corporation Joint 11. 43.00 India HCC - L&T Purulia Joint Venture 5. 97.00 India Marine Infrastructure Developer Private Limited 30. 100.00 100.00 100.00 100.00 India Sahibganj Ganges Bridge-Company Private Limited 29. 100.00 100.00 100.00 100.00 India L&T Metro Rail (Hyderabad) Limited 28. 36.55 36.55 35.16 35.16 India L&T Infra Investment Partners 27. 97.00 India 97.00 31. 65.00 65.00 India L&T - AM Tapovan Joint Venture 4. 80.00 100.00 100.00 100.00 India L&T Power Development Limited 33. 100.00 100.00 100.00 100.00 India L&T Himachal Hydropower Limited 32. 100.00 100.00 100.00 100.00 India L&T Arunachal Hydropower Limited 97.00 50.00 50.00 16. 37.00 India Bauer- L&T Geo Joint Venture 30. 56.67 56.67 India LTH Milcom Private Limited 29. 90.00 90.00 Tanzania LNT-Shriram EPC Tanzania UJV% 28. 50.00 50.00 India Larsen & Toubro Ltd - Passavant Energy & Environment JV ^ 27. 50.00 50.00 UAE Besix - Larsen & Toubro Joint Venture 26. 55.00 37.00 55.00 31. Kindgom of Saudi Arabia Qatar Larsen & Toubro Limited Waterleau Consortium 5. India Mallanna Sagar Reservoir LnT-Prasad-RK Infra JV 4. India L&T-KBL-MAYTAS UJV 3. India L&T-KBL (UJV) Hyderabad 2. India Sr. No. Name of joint operation (with specific proportion of activity carried out through the arrangement) Principal place of business L&T Sojitz Consortium 1. The joint operation has been entered on December 25, 2016 % *** The joint operation has been entered on October 12, 2016 The joint operation has been entered on December 1, 2017 ^^^ The joint operation has been entered on July 14, 2017 The joint operation has been entered on April 25, 2016 ^^ Λ The joint operation is in the process of liquidation. ** 50.00 50.00 EMAS Saudi Arabia Ltd 66.62 India 25. UAE L&T-Eastern Joint Venture** 19. 100.00 India L&T-IHI Consortium^^^ 18. Proportion of effective ownership interest (%) As at 31-3-2017 As at 31-3-2018 Proportion of effective ownership interest (%) Principal place of business Name of joint operation (with specific ownership interest in the arrangement) No. Sr. NOTE [40] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) 405 100.00 India L&T-ISDPL (JV)^^ 17. 65.00 65.00 India L&T - STEC JV MUMBAI 65.00 Larsen & Toubro Limited & NCC Limited Joint Venture 20. Residual Joint Works Joint Venture 75.00 75.00 Qatar L&T-AL-Sraiya LRDP 6 Joint Venture 24. 60.00 100.00 UAE L&T-Delma Mafraq Joint Venture 23. 100.00 100.00 India *** L&T- Inabensa Consortium* 22. 50.00 50.00 India Larsen and Toubro Limited-Scomi Engineering BHD Consortium- O&M Joint Venture 21. 60.00 65.00 60.00 India Larsen and Toubro Limited-Scomi Engineering BHD Consortium- 6. 66.62 64.01 66.62 66.62 14. L&T Finance Holdings Limited India 64.01 64.01 66.62 66.62 15. L&T Housing Finance Limited 64.01 India 64.01 66.62 66.62 16. L&T Infra Debt Fund Limited India 64.01 64.01 66.62 66.62 17. 64.01 64.01 India L&T Capital Markets Limited 26. 89.77 9. AugmentIQ Data Sciences Private Limited % India 84.28 84.28 10. L&T Thales Technology Services Private Limited India 65.60 65.60 66.43 66.43 11. Syncordis Software Services India Private Limited ^^ India 82.96 82.96 12. Esencia Technologies India Private Limited ^ India 88.64 88.64 13. L&T Infra Investment Partners Advisory Private Limited India 64.01 64.01 66.62 22. L&T Trustee Company Private Limited India 100.00 100.00 100.00 100.00 23. L&T Financial Consultants Limited India 64.01 64.01 66.62 66.62 24. Mudit Cement Private Limited India 64.01 64.01 66.62 66.62 25. L&T Access Distribution Services Limited @@ India 66.62 88.64 64.01 India 66.62 66.62 18. L&T Infra Investment Partners Trustee Private Limited India 64.01 64.01 66.62 66.62 19. L&T Infrastructure Finance Company Limited India 64.01 64.01 66.62 66.62 20. L&T Investment Management Limited India 64.01 64.01 66.62 66.62 21. L&T Mutual Fund Trustee Limited 64.01 88.64 India L&T Technology Services Limited 3347.73 644.50 3992.23 NOTE [39] Finance costs Particulars Interest expenses Other borrowing costs Exchange loss (attributable to finance costs) 400 2017-18 crore 2016-17 crore 1511.08 13.07 14.37 1538.52 1270.52 2.58 65.63 1338.73 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [40] The List of subsidiaries, associates, joint ventures and joint operations included in the Consolidated Financial Statements are as under: As at 31-3-2018 Sr. 3737.57 Principal place of business 739.19 Miscellaneous expenses India L&T Finance Limited 412.88 446.05 858.93 377.86 440.43 818.29 10 Engineering, professional, technical and consultancy fees 1423.68 730.79 2154.47 1163.42 598.85 1762.27 11 Interest and other financing charges 6019.74 1538.52 7558.26 5362.09 1338.73 6700.82 12 2998.38 64.01 No. Proportion of effective ownership Interest (%) India 100.00 100.00 74.00 74.00 5. Spectrum Infotech Private Limited @ India 100.00 100.00 6. L&T Hydrocarbon Engineering Limited India 100.00 100.00 100.00 100.00 7. Larsen & Toubro Infotech Limited India 82.96 82.96 84.28 84.28 8. L&T Cassidian Limited # Name of subsidiary company 4. 100.00 Proportion of voting power held (%) As at 31-3-2017 Proportion of effective ownership Interest (%) Proportion of voting power held (%) Indian Subsidiaries 1. Hi-Tech Rock Products and Aggregates Limited India 100.00 100.00 100.00 100.00 2. L&T Geostructure LLP India 74.00 74.00 74.00 74.00 3. L&T Infrastructure Engineering Limited India 100.00 100.00 100.00 100.00 66.62 L&T-BRAPL JV (package II) 7. India L&T Realty Limited 39. 100.00 100.00 100.00 100.00 India L&T Parel Project LLP 38. 100.00 100.00 100.00 100.00 India L&T Asian Realty Project LLP 37. 100.00 100.00 100.00 100.00 100.00 100.00 68.00 68.00 68.00 68.00 India L&T Vision Ventures Limited 42. 100.00 100.00 100.00 100.00 India L&T Seawoods Limited 41. 100.00 100.00 India L&T westend project LLP ^^^ 40. 100.00 100.00 India India Amount of advances received iii. 4507.66 4967.14 Aggregate amount of costs incurred and profits recognised (less recognised losses) as at the end of the financial year ii. 2272.71 686.81 Amount of project revenue recognised for the financial year [Note 34] i. No. Particulars crore 2016-17 2017-18 Sr. Disclosures pursuant to Guidance Note on Accounting for Real Estate Transactions issued by the Institute of Chartered Accountants of India: 469.10 crore (previous year: 790.85 crore) [included in 44(a)(i) above] Construction revenue recognised Intangible assets have been recognised towards rights to charge the users of the utility iv. Amount of work-in-progress and the value of inventories [Note 11] V. Excess of revenue recognised over actual bills raised (unbilled revenue) [Note 19] 36. 100.00 100.00 100.00 100.00 India Nabha Power Limited 35. 100.00 43. 100.00 100.00 India L&T Uttaranchal Hydropower Limited 34. 100.00 91.05 65.54 1259.76 2307.47 20.95 100.00 Seawoods Retail Private Limited # India 100.00 Bhilai Power Supply Company Limited 51. 97.00 97.00 97.00 97.00 India L&T Shipbuilding Limited 50. 100.00 100.00 India EWAC Alloys Limited ** 49. 100.00 100.00 100.00 100.00 India India 99.90 99.90 99.90 100.00 100.00 India L&T Aviation Services Private Limited 54. 95.00 95.00 95.00 95.00 L&T Valves Limited India 53. 99.99 99.99 99.99 99.99 India L&T Power Limited 52. 99.90 Kesun Iron and Steel Company Private Limited Arrangement 48. 100.00 Indian Subsidiaries held (%) Proportion of voting power Proportion of effective ownership Interest (%) As at 31-3-2017 Proportion of voting power held (%) Proportion of effective ownership Interest (%) No. Name of subsidiary company of business Principal place Sr. As at 31-3-2018 NOTE [40] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) 401 100.00 100.00 100.00 44. Seawoods Realty Private Limited # India 100.00 India L&T Cutting Tools Limited * 47. 100.00 100.00 100.00 100.00 India L&T Construction Equipment Limited 100.00 46. 100.00 100.00 100.00 India L&T Electricals and Automation Limited 45. 100.00 100.00 100.00 100.00 Classification of Service Chennai Vision Developers Private Limited (c) i. (c) (b) Exceptional items for 2016-17 include: Write off of trade receivable from a customer against whom insolvency proceedings are underway 294.75 crore [note 1(x) (vii)]. Gain on divestment of Group's stake in subsidiary companies (EWAC Alloys Limited: 281.01 crore and L&T Cutting Tools Limited: 136.74 crore). ii. i. (a) Exceptional items for 2017-18 include: ii. NOTE [42] India L&T Asian Realty Project LLP-Nirmal Life Style Developers Pvt. Ltd. (Nirmal Lifestyle) NOTE [41] 21. Kingdom of Saudi Arabia India L&T Parel Project LLP-Omkar Realtors & Developers Pvt. Ltd. (Crescent bay) 408 India Consortium of M/s. J. Ray McDermott Sdn. Bhd. and M/s. L&T Hydrocarbon Engineering Limited Consortium of L&T Hydrocarbon Engineering Limited and EMAS AMC Pte. Ltd. The components of other equity shown in the Consolidated Balance Sheet include the Group's share in the respective reserves of subsidiaries. Reserve attributable to non-controlling interest is reported separately in the consolidated Balance Sheet. Retained earnings comprise Group's share in general reserve and balance of Profit and Loss. 19. Gain on divestment of Group's stake in a subsidiary company (L&T General Insurance Company Limited) 402.43 crore. Impairment of investment in a joint venture company (L&T Infrastructure Development Projects Limited) * 281.00 crore. NOTE [43] iii. 74504.71 265885.96 318302.24 83595.78 Aggregate amount of contract costs incurred and recognised profits (less recognised Contract revenue recognised for the financial year [Note 34] ii i On May 1, 2018, the Company signed, subject to regulatory approvals, definitive agreements with Schneider Electric for strategic divestment of its Electrical and Automation (E&A) business (a reported segment which includes certain associated subsidiary companies outside India), for an all-cash consideration of 14000 crore which is subject to customary post-closing adjustments. In view of the pro-longed timelines for obtaining regulatory approvals, the E&A business is not classified as "discontinued operation" and the related assets and liabilities have not been classified as "held for sale" in accordance with the applicable accounting standards. No. 2016-17 2017-18 crore Sr. (a) Disclosures pursuant to Ind AS 11 "Construction Contracts": (c) on other intangible assets 3.81 crore (previous year: 3.20 crore) NOTE [44] (b) on intangible assets being expenditure on new product development 49.91 crore (previous year: 43.01 crore) The expenditure on research and development activities recognised as expense in the Statement of Profit and Loss is ₹179.90 crore (previous year: 177.88 crore). Further, the Group has incurred capital expenditure on research and development activities as follows: (a) on Property, Plant & Equipment 6.73 crore (previous year: 9.75 crore) Particulars | losses*) as at the end of the financial year for all contracts in progress as at that date Amount of customer advances outstanding for contracts in progress as at the end of the financial year 18. Sojitz Corporation-L&T consortium Oman 12(b). L&T Oman-L&T consortium Oman 12(a). L&T Oman-L&T consortium Oman L&T Galfar Consortium 11. India 12(c). L&T Oman-L&T consortium L&T ISDPL DI (JV) India PES Engg P ltd-L&T Consortium 9. India IIS L&T Consortium 8. India L&T-BRAPL JV (package III) 10. India Oman India 17. India Scomi Engineering Bhd-L&T consortium 16. Malaysia PESB and Larsen & Toubro Joint Venture 15. India 13(a). Sojitz Corporation-L&T consortium 14. NOTE [40] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 406 India 13(c). Sojitz Corporation-L&T consortium India 13(b). Sojitz Corporation-L&T consortium Sr. No. Name of joint operation (with specific proportion of activity carried out through the arrangement) Principal place of business Sojitz Corporation-Gayathri Projects Ltd-L&T consortium 14298.92 20. (c) providing reasonable assistance in obtaining access to all necessary infrastructure facilities and utilities Retention amount by customers for contracts in progress as at the end of the financial year * Includes Provision for foreseeable loss 10113.25 248.55 8258.37 247.41 407 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [44] (contd.) (b) The Group has undertaken a project for construction, operation and maintenance of the Metro Rail System on Design-Build- Finance-Operate-Transfer (DBFOT) basis as per the concession agreement with the government authorities. The significant terms of the arrangement are as under- Period of the Concession Remuneration Funding from grantor Infrastructure return at the end of the concession period Renewal and termination Options Rights & Obligations Initial period of 36 years & 5 months and extendable by another 25 years at the option of the concessionaire subject to fulfilment of certain conditions under concession agreement. Fare collection Rights from the users of the Metro Rail System, license to use land provided by the government for constructing depots and for transit oriented development and earn lease rental income on such development and grant of viability gap fund. Viability Gap Funding of 1458 crore Being DBFOT project, the project assets have to be transferred at the end of concession period Further extension of 25 years will be granted at the option of the concessionaire upon satisfaction of Key Performance Indicators laid under the concession agreement. This option is to be exercised by the concessionaire during the 33rd year of the initial concession period. Termination of the Concession Agreement can either be due to (a) Force Majeure (b) Non Political event (c) Indirect political event (d) Political event. On occurrence of any of the above events, the obligations, dispute resolution, termination payments etc. are as detailed in the Concession Agreement. Major obligations of the concessionaire are relating to- (a) project agreements (b) change in ownership (c) issuance of Golden Share to the Government (d) maintenance of aesthetic quality of the Rail System (e) operation and maintenance of the rolling stock and equipment necessary and sufficient for handling Users equivalent to 110% of the Average PHPDT etc. Major obligations of the Government are - (a) providing required constructible right of way for construction of rail system and land required for construction of depots and transit oriented development. (b) providing reasonable support and assistance in procuring applicable permits required for construction (d) obligations relating to competing facilities (e) obligations relating to supply of electricity etc. iv. 13267.98 66.62 5449.68 627.53 441.11 6.00 Developmental Projects 2506.65 2549.73 1310.94 50.55 1764.72 Others Segment Total Unallocable Inter Segment Consolidated Total (b) Geographical Information 344.09 668.28 351.59 Financial Services 166.67 514.12 774.53 605.57 Heavy Engineering 245.27 96.87 6.09 1.58 20.73 Electrical & Automation [Note 42(c)] 176.94 Hydrocarbon 363.10 188.24 359.92 329.53 IT & Technology Services 202.16 100.17 5952.04 2487.16 Other countries Total Foreign countries (b) Total (a+b) Particulars crore Revenue by location of customers 2017-18 80162.78 2016-17 72357.51 7355.33 6580.12 8053.68 7059.39 4485.12 Qatar Kuwait United Arab Emirates Sultanate of Oman 626.88 471.16 0.43 18.72 2772.92 (74.58) (217.37) - 5004.35 6504.34 2487.59 (0.02) 2772.90 India (a) Foreign countries (b): United States of America Kingdom of Saudi Arabia 5252.14 89.11 0.03 151.36 As at 31-3-2017 2.25 (255.08) Consolidated Total 665.67 (308.39) 422.62 (57.47) 6019.74 (63.42) 5362.09 (435.86) (395.27) LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) 0.54 Developmental Projects 215.74 Financial Services 4.62 Inter Segment 12.42 0.30 (407.69) 2.98 (420.46) (15.40) 4777.91 647.60 0.70 (392.85) 6.14 (357.07) Others 54.10 30.60 4.04 - 402.09 173.64 6077.21 5425.51 Unallocable 518.66 557.37 Segment Total Power IT & Technology Services 29.72 Infrastructure 103.00 crore). crore NOTE [46] (a) Information about Reportable segments (contd.) Particulars Additions to non-current assets crore Investment in associates and joint ventures accounted applying equity method included in segment assets As at 31-3-2018 2017-18 2016-17 Infrastructure 1273.70 616.34 8.95 2016-17 2017-18 2016-17 0.58 2.95 45.01 5583.41 119.43 Hydrocarbon [Note 42(c)] 3.50 5.29 6.19 Electrical & Automation 2.44 164.45 (227.90) 2016-17 0.19 Heavy Engineering Power Interest expense included in segment expense 2017-18 3.01 120.55 (186.81) Profit or (loss) of associates and joint ventures accounted applying equity method not included in segment result 2017-18 8887.36 (2834.35) 259.47 10063.75 10063.75 8545.17 0.12 8545.29 Developmental Projects 4294.05 4294.05 4027.78 339.50 4367.28 Others 8242.45 591.87 8834.32 10124.91 737.52 Financial Services 9887.54 156.25 9731.29 Electrical & Automation [Note 42(c)] 5209.03 299.24 5508.27 4968.56 398.71 5367.27 Hydrocarbon 10862.43 11735.83 11759.63 9602.50 25.84 9628.34 IT & Technology Services 11187.79 169.64 11357.43 23.80 Elimination Total Revenue (2096.43) IT & Technology Services Developmental Projects Others Total 2146.51 1825.53 1440.64 786.44 Financial Services 196.40 1139.10 387.19 12336.41 9511.77 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [46] (a) Information about Reportable segments (contd.) 32.01 3446.94 508.42 549.89 119862.10 (2096.43) 119862.10 110011.00 (2953.69) (2953.69) 110011.00 Segment result [Profit/(Loss) before interest and tax] Infrastructure 5293.30 771.81 4722.54 Heavy Engineering 163.99 201.18 515.84 498.57 Electrical & Automation [Note 42(c)] Hydrocarbon 668.82 Power 297.79 3149.15 4113.88 Company pension plan Impact of change in discount rate crore Effect of 1% increase As at 31-3-2018 As at 31-3-2017 Effect of 1% decrease As at 31-3-2018 As at 31-3-2017 84.32 Impact of change in discount rate (74.17) (75.11) 84.82 (45.08) 50.31 24.44 27.53 (29.80) (36.17) (19.96) 37.71 (21.99) 46.02 55.39 (48.65) (24.29) Impact of change in Health care cost Impact of change in salary growth rate Impact of change in discount rate 5.00% 5.00% 5.03% 5.00% 5.99% 6.00% LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) Post-retirement medical benefit plan NOTE [45] (contd.) (a) For post-retirement medical benefit plan & pension plan, the attrition rate varies from 1% to 12% (previous year: 2% to 8%) for various age groups. (b) For gratuity plan the attrition rate varies from 1% to 25% (previous year: 1% to 6%) for various age groups. (E) The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. (F) The interest payment obligation of trust-managed provident fund is assumed to be adequately covered by the interest income on long term investments of the fund. Any shortfall in the interest income over the interest obligation is recognised immediately in the Statement of Profit and Loss as actuarial losses. (G) The obligation of the Group under the post-retirement medical benefit plan is limited to the overall ceiling limits. At present, healthcare cost, as indicated in the principal actuarial assumption given above, has been assumed to increase at 5% p.a. (H) A one percentage point change in actuarial assumptions would have the following effects on defined benefit obligation: Gratuity Particulars (D) Attrition Rate: Particulars (26.07) 26.68 Total For the year ended 31-3-2017 External Inter-segment Total Gross Segment Revenue Infrastructure Power 59083.13 6200.58 735.84 For the year ended 31-3-2018 External Inter-segment 7.65 52923.08 6938.56 997.73 53920.81 0.23 6938.79 Heavy Engineering 3845.49 268.39 59818.97 6208.23 28.04 Particulars 414 (viii) Characteristics of defined benefit plans and associated risks: (A) Gratuity plan: The Parent Company operates gratuity plan through a trust wherein every employee is entitled to the benefit equivalent to fifteen days salary last drawn for each completed year of service. The same is payable on termination of service or retirement whichever is earlier. The benefit vests after five years of continuous service. The company's scheme is more favourable as compared to the obligation under The Payment of Gratuity Act, 1972. The defined benefit plans for gratuity of the Parent Company and material domestic subsidiary companies are administered by separate gratuity funds that is legally separate from the Parent Company and the material domestic subsidiary companies. The trustees nominated by the group are responsible for the administration of the plan. There are no minimum funding requirements of these plans. The funding of these plans is based on gratuity fund's actuarial measurement framework set out in the funding policies of the plan. These actuarial measurements are similar compared to the assumptions set out in (vii) supra. An insignificant portion of the gratuity plan of the group attributable to subsidiary companies is administered by the respective subsidiary companies and is funded through insurer managed funds. A part of the gratuity plan is unfunded and managed within the group. Further, it also includes amounts payable in respect of the Group's foreign operations which result in gratuity payable to employees engaged as per the local laws of country of operation. Employees do not contribute to any of these plans. (B) Post-retirement medical care plan: The Post-retirement medical benefit plan provides for reimbursement of health care costs to certain categories of employees post their retirement. The reimbursement is subject to an overall ceiling sanctioned based on cadre of the employee at the time of retirement. The plan is unfunded. Employees do not contribute to the plan. 413 Notes forming part of the Consolidated Financial Statements (contd.) crore NOTE [45] (contd.) (C) Pension plan: In addition to contribution to state-managed pension plan (EPS scheme), the Group operates a post retirement pension scheme, which is discretionary in nature for certain cadres of employees. The quantum of pension depends on the cadre of the employee at the time of retirement. The plan is unfunded. Employees do not contribute to the plan. (D) Trust managed provident fund plan: The Parent Company and a few subsidiaries manage provident fund plan through a provident fund trust for its employees which is permitted under The Employees' Provident Funds and Miscellaneous Provisions Act, 1952. The plan mandates contribution by employer at a fixed percentage of employee's salary. Employees also contribute to the plan at a fixed percentage of their salary as a minimum contribution and additional sums at their discretion. The plan guarantees interest at the rate notified by the provident fund authority. The contribution by employer and employee together with interest are payable at the time of separation from service or retirement whichever is earlier. The benefit under this plan vests immediately on rendering of service. The interest payment obligation of trust-managed provident fund is assumed to be adequately covered by the interest income on long term investments of the fund. Any shortfall in the interest income over the interest obligation is recognised immediately in the Statement of Profit and Loss as actuarial loss. Any loss/gain arising out of the investment risk and actuarial risk associated with the plan is also recognised as expense or income in the period in which such loss/ gain occurs. All the above defined benefit plans expose the Group to general actuarial risks such as interest rate risk and market (investment) risk. Disclosure pursuant to Ind AS 108 "Operating Segment" (a) Information about Reportable segments NOTE [46] 7.10% Inter segment margins on capital jobs Unallocated corporate income net of expenditure 157860.78 197932.80 230494.62 Segment Total 6953.07 6971.77 18599.96 19531.60 Others 8931.32 10515.57 28240.72 30375.07 Developmental Projects 64341.27 76383.88 71841.82 133746.95 Corporate unallocated assets/liabilities 17011.32 15741.59 Particulars 416 (a) Information about Reportable segments (contd.) NOTE [46] Notes forming part of the Consolidated Financial Statements (contd.) 415 158401.48 183771.36 87888.63 212181.60 Consolidated Total assets/liabilities (1492.79) (2452.59) (1492.79) (2452.59) Inter Segment assets/liabilities 26147.32 28363.17 245053.35 Financial Services 1893.77 2182.27 Power 33912.75 40932.30 50020.69 58443.26 Infrastructure As at 31-3-2017 Segment Liabilities 6437.33 As at 31-3-2018 Segment Assets As at 31-3-2018 Particulars crore 6041.23 (444.27) (395.27) 6880.77 827.76 As at 31-3-2017 Depreciation, amortization, impairment & obsolescence included in segment expenses 6847.03 6362.49 6166.03 7555.66 IT & Technology Services 5589.70 7841.04 6728.63 9226.17 Hydrocarbon 5647.48 1935.65 4364.25 4412.36 Electrical & Automation [Note 42(c)] 3826.93 5245.60 5123.67 6624.54 Heavy Engineering 2140.87 crore Non-cash expenses other than depreciation included in segment expenses 2017-18 Particulars Note: Impairment loss included in Heavy Engineering Segment is 31.88 crore (previous year: Nil), Other segment is * 27.69 crore (previous year: 412.57 crore) and in Corporate unallocated is ₹ 84.32 crore (previous year: 88.17 111.39 2369.93 29.21 38.45 220.25 Interest Income included in segment income 202.73 1928.73 Unallocable 58.96 72.94 2149.68 1726.00 Segment Total 4.62 4.13 Consolidated Total 665.21 7369.86 (435.86) Profit before Tax Provision for current tax Provision for deferred tax Profit after tax Share in profit/(loss) of joint venture/associate companies (net) | Adjustments for non-controlling interest in subsidiaries Net profit after tax, non-controlling interest and share in profit/(loss) of joint ventures/associates crore For the year ended 31-3-2018 External Inter-segment (634.57) Total Total 12.90 (1538.52) 828.37 11639.16 (3732.27) 533.40 8440.29 For the year ended 31-3-2017 External Inter-segment Interest expenses 281.24 58.07 2.49 1.97 116.69 138.66 Heavy Engineering 1.99 1.40 44.40 Electrical & Automation [Note 42(c)] 43.56 19.81 20.03 650.53 608.05 Infrastructure 2016-17 2017-18 2016-17 Power Others 152.74 3.85 73.68 Developmental Projects 4.79 29.43 45.74 51.23 Financial Services 13.46 151.10 8.47 244.43 IT & Technology Services 7.97 3.66 148.87 132.41 Hydrocarbon 3.83 236.81 (28.14) (1338.73) 742.46 7.56% 7.56% (140.99) Add: Adjustment for earlier years (102.51) 0.13 (482.35) (388.56) (0.16) (0.50) Closing balance of the plan assets 610.99 615.72 3676.19 3348.38 Notes: The fair value of the plan assets under the trust managed provident fund plan has been determined at amounts based on their value at the time of redemption, assuming a constant rate of return to maturity. $ Basis used to determine interest income on plan assets: The Trust formed by the Parent Company and a few subsidiaries manage the investments of provident funds and gratuity fund. Interest income on plan assets is determined by multiplying the fair value of the plan assets by the discount rate stated in (vii) below both determined at the start of the annual reporting period. The Group expects to fund 93.63 crore (previous year: 37.48 crore) towards its gratuity plan and 122.04 crore (previous year: 140.68 crore) towards its trust-managed provident fund plan during the year 2018-19. Less: Benefits paid (2.03) (4.43) (3.70) Add/(Less): Actuarial gains/(losses) - Difference between actual return on plan assets and interest income 24.87 47.34 14.02 18.82 Add/(Less): Actuarial gains/(losses) - Others Add: Contribution by the employer 73.90 Employer's contribution to provident fund. 70.39 113.75 Add: Contribution by plan participants 295.44 284.44 Add: Assets assumed on transfer of employees 108.71 21.23 Add: Business combination/disposal (net) 116.32 (v) The fair value of major categories of plan assets are as follows: crore Gratuity plan 77.91 159.60 237.51 Debt instruments - Central Government bonds 128.18 128.18 149.30 6.20 182.45 155.50 66.35 66.35 123.39 5.49 128.88 Debt instruments - Public Sector Unit bonds 55.59 55.59 Debt instruments - State Government bonds Add/(Less): Re-measurement - Actuarial gains/(losses) 99.91 Debt instruments - Corporate bonds Particulars Quoted As at 31-3-2018 Unquoted Total Quoted As at 31-3-2017 Unquoted Total Cash and cash equivalents 82.54 1.68 5.49 5.49 Equity instruments 16.51 16.51 15.47 0.65 16.12 1.68 3041.76 259.47 280.26 40.51 iii) Actuarial (gains)/losses arising from changes in experience adjustments 17.79 8.94 14.00 (5.38) 19.23 (9.87) 6.21 (168.71) (127.70) (12.02) (8.93) (20.16) (17.73) (482.35) (388.56) Add: Past Service Cost 3.30 Less: Benefits paid (0.70) 17.43 24.41 Add: Contribution by plan participants i) Employer ii) Employee 295.03 288.27 Add/(less): Re-measurement - Actuarial losses/(gains) i) Actuarial (gains)/losses arising from changes in demographic assumptions (15.48) 19.82 (30.16) 0.08 ii) Actuarial (gains)/losses arising from changes in financial assumptions (16.61) 26.79 (18.66) 0.15 2.34 0.01 6.28 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [45] (contd.) (iv) Changes in the fair value of plan assets representing reconciliation of the opening and closing balances thereof are as follows: crore Trust-managed provident fund plan Gratuity plan Particulars As at LARSEN & TOUBRO 31-3-2018 As at 31-3-2018 As at 31-3-2017 Opening balance of the fair value of the plan assets 615.72 559.86 3348.38 Add: Interest Income on plan assets* 41.19 As at 31-3-2017 Add: Liabilities assumed on transfer of 3318.32 326.68 105.86 17.11 employees Add: Business combination/acquisition 5.49 (1.89) (2.84) Add: Adjustment for earlier years 317.41 3633.31 0.38 0.52 7.38 Closing balance of the present value of defined benefit obligation 892.09 844.16 222.16 234.55 Add/(less): Translation adjustments 7.10% 73.33 Mutual funds Equity 14.32 100.01 12.82 67.41 80.23 0.05 0.26 0.31 4.11 4.11 Mutual funds - Others Special deposit scheme Fixed deposits Others Closing balance of the plan assets 2.81 6.71 85.69 Mutual funds Debt - Mutual funds Equity 838.08 0.20 838.28 659.29 659.29 Debt instruments - State Government bonds 748.74 0.18 9.52 748.92 688.71 Debt instruments - Public Sector Unit bonds 483.37 582.43 1065.80 408.53 648.03 1056.56 688.71 270.32 270.32 268.34 6.30 7.54 14.86 7.50 17.48 8.06 (vii) Principal actuarial assumptions at the Balance Sheet date (expressed as weighted average): (A) Discount rate: Plans (a) Gratuity plan As at 31-3-2017 (b) Pension plan Post-retirement medical benefit plan (B) Annual increase in healthcare costs (see note below) (C) Salary Growth rate: (a) Gratuity plan (b) Pension plan As at 31-3-2018 As at 31-3-2017 7.56% 7.10% (c) Debt instruments - Central Government bonds As at 31-3-2018 Pension plan 268.34 3.09 3.09 0.70 2700.75 (13.95) 975.44 (13.25) 3676.19 2122.80 Plans 111.20 1225.58 3348.38 (vi) The Average duration of the Defined Benefit Obligation at the end of the reporting period is as follows: 1. Gratuity 2. Post-retirement medical benefit plan 3. 111.20 467.41 113.96 353.45 As at 31-3-2017 Quoted Unquoted Total Quoted Unquoted Total Special deposit scheme As at 31-3-2018 2.54 1.50 1.50 Fixed deposits 1.47 1.47 1.21 1.21 Insurer managed fund 2.54 147.80 Particulars crore - 4.96 4.96 0.21 66.61 66.82 Mutual funds - Debt 0.29 Gratuity plan 0.29 0.52 Mutual funds - Others 0.10 0.10 411 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [45] (contd.) 412 0.52 75.67 147.80 115.39 Quoted Unquoted Total Quoted Unquoted Total Cash and cash equivalents 7.50 As at 31-3-2017 7.50 12.53 Equity instruments 0.01 0.01 Debt instruments - Corporate bonds 541.31 104.37 645.68 12.53 115.39 As at 31-3-2018 Trust-managed provident fund plan Advance taken 3.17 3.17 (175.00) (175.00) Others 0.00 0.00 Particulars (13.99) Closing balance of the plan assets 298.54 312.45 610.99 368.62 247.10 615.72 crore (13.99) 3866.38 78.00 2174.35 comprehensive income (4.52) (11.85) (34.82) 19.11 3.75 23.64 Total (I+II+III+IV) 136.99 120.24 2.45 50.16 29.43 47.59 116.19 IV. Amount included as part of "Other 21.47 22.00 12.61 131.78 22.60 18.44 3.68 2.48 116.19 115.73 115.73 II. Amount included as part "manufacturing construction and operating expenses" 0.21 III. Amount included as part of "finance cost" 0.47 0.31 14.67 of 140.83 Actual return on plan assets 87.85 317.41 Add: Current service cost 134.31 127.65 21.51 16.47 3.68 Add: Interest cost 45.74 44.23 16.48 14.59 22.00 287.55 2.48 21.47 3318.32 193.31 234.55 758.23 844.16 294.28 278.29 (iii) The changes in the present value of defined benefit obligation representing reconciliation of opening and closing balances thereof are as follows: crore Gratuity plan As at 31-3-2018 As at 31-3-2017 66.06 Post-retirement medical benefit plan As at 31-3-2018 As at 31-3-2017 As at 31-3-2018 As at 31-3-2017 Trust-managed provident fund plan As at 31-3-2018 As at 31-3-2017 Opening balance of the present value of defined benefit obligation Pension plan Amount included in "employee benefits expense" I. 2017-18 2016-17 - Difference between actual return on plan assets and interest income 5. Re-measurement - Actuarial losses/ 21.00 35.88 (34.82) 19.11 3.75 23.64 (9.87) (gains) - Others 6. Past service cost 3.30 (0.70) (14.02) (18.82) (280.26) (259.47) (47.34) (24.87) 3354.10 44.23 16.48 14.59 2017-18 3.68 22.00 2016-17 Trust-managed provident fund plan 7. Actuarial gain/(loss) not recognised in 2017-18 2016-17 259.47 3. Interest income on plan assets (41.19) (40.51) 4. Re-measurement - Actuarial losses/(gains) 2.48 116.19$ 115.73$ 21.47 280.26 14.02 28.69 books 47.59 116.19 115.73 409 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [45] (contd.) 410 Gratuity plan 29.43 Particulars 2016-17 Post-retirement medical benefit plan 2017-18 2016-17 Pension plan crore Trust-managed provident fund plan 2017-18 2016-17 2017-18 3036.16 50.16 120.24 8. Adjustment for earlier years 0.27 9. Re-measurement - Effect of the limit in para 64(b) (0.19) (0.39) 10. Translation adjustments 2.45 (0.30) | 11. Amount capitalised out of the above (0.81) (0.46) (0.02) (0.01) 136.99 0.91 116.19$ 115.73$ Total (1 to 11) LARSEN & TOUBRO Developmental projects segment comprises development, operation and maintenance of basic infrastructure projects, toll and fare collection, power development, development and operation of port facilities and providing related advisory services. Financial Services segment comprises rural finance, housing finance, wholesale finance, mutual fund, wealth management and general insurance (upto the date of sale). IT & Technology Services segment comprises information technology and integrated engineering services. Hydrocarbon segment comprises complete EPC solutions for the global Oil & Gas Industry from front-end design through detailed engineering, modular fabrication, procurement, project management, construction, installation and commissioning. Electrical & Automation segment comprises manufacture and sale of low and medium voltage switchgear components, custom built low and medium voltage switchboards, electronic energy meters/protection (relays) systems and control & automation products. Heavy Engineering segment comprises manufacture and supply of custom designed, engineered critical equipment & systems to core sector industries like Fertiliser, Refinery, Petrochemical, Chemical, Oil & Gas, Thermal & Nuclear Power, Aerospace and Defence. Power segment comprises turnkey solutions for Coal-based and Gas-based thermal power plants including power generation equipment with associated systems and / or balance-of-plant packages. Infrastructure segment comprises engineering and construction of building and factories, transportation infrastructure, heavy civil infrastructure, power transmission & distribution, water and effluent treatment and smart world & communication projects. • • • • • • • Others segment includes metallurgical & material handling systems, realty, shipbuilding, manufacture and sale of industrial valves, welding equipment and cutting tools (till the date of sale), manufacture, marketing and servicing of construction equipment and parts thereof, marketing and servicing of mining machinery and parts thereof, manufacture and sale of rubber processing machinery, mining and aviation. None of the businesses reported as part of others segment meet any of the quantitative thresholds for determining reportable segments for the year ended March 31, 2018. 418 2. Interest cost 2016-17 16.47 221.19 301.13 294.74 # Liability for unfunded gratuity with respect to group(s) of assets classified as held for sale is included thereunder (ii) The amounts recognised in Statement of Profit and Loss are as follows: crore Gratuity plan Particulars • Post-retirement medical benefit plan 2017-18 2016-17 2017-18 1. Current service cost 134.31 127.65 21.51 Pension plan 209.04 (iv) Segment composition An operating segment is classified as Reportable segment if reported revenue (including inter-segment revenue) or absolute amount of result or assets exceed 10% or more of the combined total of all the operating segments. 31-3-2018 As at Particulars Non-current Assets crore 110011.00 119862.10 37653.49 39699.32 7157.63 8429.36 4950.40 5335.10 280.26 2968.44 As at 31-3-2017 India 34930.93 32019.01 (ii) Reportable segments The group has eight reportable segments as described under "segment composition" below which are the group's independent businesses. The nature of products and services offered by these businesses are different and are managed separately given the different sets of technology and competency requirements. In arriving at the reportable segment, the six operating segments have been aggregated and reported as "infrastructure segment" as these operating segments have similar economic characteristics in terms of long term average gross margins, nature of the products and services, type of customers, methods used to distribute the products and services and the nature of regulatory environment applicable to them. Operating segments are identified as those components of the groups (a) that engage in business activities to earn revenues and incur expenses (including transactions with any of the group's other components); (b) whose operating results are regularly reviewed by the Group's Corporate Executive Management to make decisions about resource allocation and performance assessment; and (c) for which discrete financial information is available. (i) (e) Segment reporting: basis of identifying operating segments, reportable segments and definition of each reportable segment: Basis of identifying Operating segments: NOTE [46] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) (iii) Performance of a segment is measured based on segment profit (before interest and tax), as included in the internal management reports that are reviewed by the Group's Corporate Executive Management. The performance of financial services segment and finance lease activities of power development segment are measured based on segment profit (before tax) after deducting the interest expense. (d) The group's reportable segments are organized based on the nature of products and services offered by these segments. (c) 33672.56 36611.36 Total 1653.55 1680.43 Foreign countries Revenue contributed by any single customer in any of the operating segments, whether reportable or otherwise, does not exceed ten percent of the group's total revenue. Net liability/(asset) - Non-current 417 30.87 892.09 203.29 222.16 844.16 222.16 234.55 326.68 234.55 326.68 317.41 317.41 3618.47 14.84 3633.31 3315.73 2.59 215.17 3318.32 610.99 615.72 3676.19 3348.38 Add: Amount not recognised as an asset (limit in para 64(b)) 4.78 4.80 Less: Fair value of plan assets Amount to be recognised as liability or (asset) -Wholly unfunded 676.92 NOTE [45] Notes forming part of the Consolidated Financial Statements (contd.) 27.55 Disclosure pursuant to Ind AS 19 "Employee Benefits" [Note 1(o)] (a) Defined contribution plans: Amount of ₹387.19 crore (previous year: 346.85 crore) is recognised as an expense. Out of above, 386.04 crore (previous year: 345.24 crore) is included in "employee benefit expense" [Note 37] in the Statement of Profit and Loss and 1.15 crore (previous year: 1.61 crore) has been capitalised. (b) Defined Benefit plans: 640.87 (i) The amounts recognised in Balance Sheet are as follows: Gratuity plan Particulars Post-retirement medical benefit plan As at As at As at As at As at 31-3-2018 31-3-2017 31-3-2018 31-3-2017 31-3-2018 Pension plan As at 31-3-2017 Trust-managed provident fund plan As at As at 31-3-2018 31-3-2017 A) Present value of defined benefit obligation crore 285.88 -Wholly funded 234.55 (4.95) Net liability/(asset) 285.88 233.24 222.16 234.55 326.68 (2.96) 22.67 27.55 Net liability/(asset) - current # 285.88 233.24 13.12 233.24 222.16 13.36 30.87 (7.67) 317.41 Assets 326.68 317.41 (6.85) (42.88) (30.06) B) Amounts reflected in the Balance Sheet Liabilities 292.73 240.91 25.55 222.16 234.55 326.68 317.41 33.83 32.50 Commission received, including those under agency arrangements Joint venture: (xi) 0.57 0.66 Total 0.57 0.66 Feedback Infra Private Limited 15.81 0.57 Dividend received Associate: Associate: (x) 18.01 27.60 25.75 18.01 15.81 L&T- Chiyoda Limited 0.66 Total 17.70 0.65 23.52 5.23 1.21 L&T- Chiyoda Limited 5.23 23.55 Associates, including: 9.64 L&T-MHPS Turbine Generators Private Limited 13.60 L&T-Sargent & Lundy Limited 35.50 40.99 L&T-MHPS Boilers Private Limited 94.89 92.30 (xii) Rent received, overheads recovered and miscellaneous income Joint ventures, including: 0.65 2.00 Total 0.65 2.00 L&T Kobelco Machinery Private Limited 2.00 1.97 2.47 2.14 13.08 9.45 6.06 2.37 6.42 2.37 3.63 4.27 2.25 6.66 0.04 7.08 L&T Infrastructure Development Projects Limited (ix)(a) Charges incurred for deputation of employees from related parties Joint venture: Total L&T- Chiyoda Limited Associates, including: L&T-Sargent & Lundy Limited L&T Sapura Shipping Private Limited Joint ventures, including: Key management personnel: (viii) Charges paid for miscellaneous services Total L&T Special Steels and Heavy Forgings Private Limited 4.63 4.63 2.17 L&T Infrastructure Development Projects Limited 5.60 5.28 L&T Sapura Shipping Private Limited 9.59 9.94 (ix)(b) Charges recovered for deputation of employees to related parties Joint ventures, including: Amount Amounts for major parties Amount Amounts for major parties 0.04 No. Sr. 2016-17 2017-18 crore 422 NOTE [47] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) 421 4.63 0.04 Nature of transaction/relationship/major parties Total 113.35 0.08 115.40 Towards Employer's contribution: (i) Transaction with trust managed provident fund (a) 281.00 281.00 281.00 24.11 22.69 21.66 22.11 24.11 22.69 (xviii) Contribution to post employment benefit plan Total L&T Infrastructure Development Projects Limited (xvii) Impairment loss/provision on investment in respect of Joint venture : Total L&T-MHPS Boilers Private Limited PNG Tollway Limited Larsen & Toubro Officers & Supervisory Staff Provident Fund 103.95 100.99 Total 387.50 (175.00) Towards advance contribution/(refund): (ii) 35.61 30.61 Total 23.59 6.26 1.17 5.01 Joint ventures, including: Larsen & Toubro Officers & Supervisors Gratuity Fund Larsen & Toubro Gratuity Fund 5.15 14.19 Larsen & Toubro Technology Services Limited Eggas L&T Hydrocarbon Engineering Ltd Group Gratuity Scheme 35.61 30.61 (i) Towards Employer's contribution: Transaction with approved gratuity fund (b) 113.35 115.40 9.86 (xvi) Provision towards bad and doubtful debts (including expected credit loss on account of delay) in respect of 0.55 Total (xiv) Interest paid to 82.68 107.10 Total 0.20 0.20 L&T Camp Facilities LLC 0.20 0.20 Associate: Joint venture: 78.98 L&T Special Steels and Heavy Forgings Private Limited 82.48 106.90 Joint ventures, including: (xiii) Interest received from 100.19 115.93 0.07 0.08 0.07 102.05 Mr. D.K. Sen 33.06 33.06 0.13 0.07 Western Andhra Tollways Limited 0.31 0.55 L&T Interstate Road Corridor Limited Krishnagiri Thopur Toll Road Limited Joint ventures, including: (xv) Bad debts written off in respect of Amount Amounts for major parties L&T Infrastructure Development Projects Limited Amount Amounts for major parties Nature of transaction/relationship/major parties Sr. 2016-17 2017-18 crore NOTE [47] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 33.06 Total No. 398.19 L&T Construction Equipment Provident Fund Trust 186.30 1. Mr. M. M. Chitale (b) Non-executive Directors: 7. Mr. J. D. Patil (Whole-time Director)** 5. Mr. D. K. Sen (Whole-time Director) 3. Mr. R. Shankar Raman (Whole-time Director & Chief Financial Officer) 1. Mr. A.M. Naik (Group Executive Chairman)* (a) Executive Directors: Name of Key Management Personnel and their relatives with whom transactions were carried out during the current year/previous year: NOTE [47] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) 419 1. Larsen & Toubro Limited Senior Officers' Superannuation Scheme Superannuation Trusts: 6. L&T Hydrocarbon Engineering Ltd Group Gratuity Scheme 5. Nabha Power Limited Employees Group Gratuity Assurance Scheme 4. L&T Shipbuilding Limited Employees Group Assurance Scheme 3. Larsen and Toubro Technology Services Ltd. Eggas Larsen & Toubro Gratuity Fund 2. 1. Larsen & Toubro Officers & Supervisors Gratuity Fund Gratuity Trusts: 3. Mr. M. Damodaran 5. Mr. Adil Zainulbhai 7. Mrs. Sunita Sharma 9. Mr. Ajay Shankar No. Nature of transaction/relationship/major parties Sr. 420 (b) Disclosure of related party transactions: @@ Appointed w.e.f. May 27, 2016 ## Appointed w.e.f. July 1, 2017 ### ceased w.e.f. May 2, 2018 Appointed w.e.f. July 1, 2017 ** Group Chairman w.e.f. October 1, 2017 16. Mr. Swapan Dasgupta @ 7. L&T Valves Employees Provident Fund 6. Mr. Akhilesh Krishna Gupta 8. Mr. Thomas Mathew T 10. Mr. Subramanian Sarma 12. Mr. Sanjeev Aga @@@ 14. Mr. Arvind Gupta ## 4. 2. Mr. Subodh Bhargava 6. Mr. M. V. Satish (Whole-time Director) 4. Mr. Shailendra Roy (Whole-time Director) Mr. S. N. Subrahmanyan (Chief Executive Officer and Managing Director)# 2. 17. Mr. Bahram Vakil *** 15. Mr. Sushobhan Sarker ### 13. Mr. Narayanan Kumar@@ 11. Mrs. Naina Lal Kidwai Mr. Vikram Singh Mehta Larsen & Toubro Officers & Supervisors Gratuity Fund 6. 5. L&T Kansbahal Staff & Workmen Provident Fund 21. 19. L&T-MHPS Boilers Private Limited L&T-Gulf Private Limited L&T Sapura Shipping Private Limited 15. L&T Sapura Offshore Private Limited 17. 13. 11. L&T Howden Private Limited Devihalli Hassan Tollway Limited 7. Krishnagiri Walajahpet Tollway Limited 9. L&T Halol-Shamlaji Tollway Limited 5. L&T-MHPS Turbine Generators Private Limited 3. L&T-Sargent & Lundy Limited Joint Ventures: @ The Group has sold its stake on March 19, 2018 3. Magtorq Private Limited 1. L&T-Chiyoda Limited Associate Companies: (a) Name of the related parties with whom transactions were carried out during the current year/previous year and description of relationship: Disclosure of related parties/related party transactions pursuant to Ind AS 24" Related Party Disclosures" NOTE [47] Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 1. Larsen & Toubro Electromech LLC* (i) 23. Raykal Aluminium Company Private Limited 29. L&T Kobelco Machinery Private Limited 4. L&T Kansbahal Officers & Supervisory Provident Fund 3. Larsen & Toubro Limited Provident Fund 2. Larsen & Toubro Limited Provident Fund of 1952 1. Larsen & Toubro Officers & Supervisory Staff Provident Fund Provident Fund Trusts: *The venture is classified as subsidiary w.e.f. August 16, 2017. 26. Western Andhra Tollways Limited 28. Vadodara Bharuch Tollway Limited 30. L&T Transportation Infrastructure Limited 24. Krishnagiri Thopur Toll Road Limited 22. Panipat Elevated Corridor Limited 20. L&T Infrastructure Development Projects Limited 25. L&T Special Steels and Heavy Forgings Private Limited 27. PNG Tollway Limited 18. L&T Sambalpur-Rourkela Tollway limited 14. L&T Samakhiali Gandhidham Tollway Limited 12. L&T Deccan Tollways Limited 10. L&T Rajkot-Vadinar Tollway Limited 8. L&T BPP Tollway Limited 6. L&T Chennai-Tada Tollway Limited L&T Interstate Road Corridor Limited 4. Ahmedabad - Maliya Tollway Limited 2. L&T Camp Facilities LLC 4. 2. Feedback Infra Private Limited @ 16. Kudgi Transmission Limited Purchase of goods & services (including commission paid) Joint ventures, including: # L&T-MHPS Turbine Generators Private Limited (0.03) (0.25) 261.01 L&T-MHPS Boilers Private Limited Investments including subscription to equity and preference shares considered as equity (including application money paid) Joint ventures, including: (iv) 0.16 0.01 (0.22) 0.01 0.14 0.02 0.16 L&T Infrastructure Development Projects Limited L&T-MHPS Turbine Generators Private Limited Larsen & Toubro Electromech LLC 0.01 (iii) Purchase/lease of property, plant and equipment Joint ventures: Amount Amounts for major parties Amount Amounts for major parties No. Nature of transaction/relationship/major parties Total Sr. L&T Special Steels and Heavy Forgings Private Limited Total 211.89 L&T Special Steels and Heavy Forgings Private Limited L&T Sapura Shipping Private Limited 387.50 398.19 Joint ventures: (vii) Inter corporate deposits given/(returned) (net) 2041.57 2041.57 2041.57 Total 260.65 L&T Infrastructure Development Projects Limited Purchase of investments from (vi) 214.43 Total 214.43 L&T Special Steels and Heavy Forgings Private Limited 214.43 (v) Subscription of preference share considered as debt in the financials Joint venture: (0.25) 261.01 Joint venture: Total 2016-17 crore 149.50 60.78 156.61 1677.03 545.47 1385.93 362.45 2399.97 1941.69 Total L&T-Chiyoda Limited Associates, including: 52.29 L&T-MHPS Turbine Generators Private Limited Amount Amounts for major parties Amount Amounts for major parties 2016-17 2017-18 crore ceased w.e.f. August 1, 2016 *** @@@ Appointed w.e.f. May 25, 2016 w.e.f. July 1,2017 (till June 30, 2017 Whole-time Director) ceased w.e.f. May 15, 2016 @ L&T-MHPS Boilers Private Limited 2017-18 2098.30 (ii) Sale of goods/contract revenue & services NOTE [47] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 1108.61 423.22 Total 0.42 0.17 L&T-Chiyoda Limited 0.42 2460.75 0.17 157.18 394.35 545.12 134.85 87.37 178.75 L&T-MHPS Boilers Private Limited L&T Deccan Tollways Limited L&T Infrastructure Development Projects Limited 1109.10 423.05 Joint ventures, including: Associate: Larsen & Toubro Gratuity Fund (f) Mr. M. V. Satish Total As at No. Particulars Present value of minimum lease payments Sr. Minimum Lease Payments crore (ii) The gross investment in these leases and the present value of minimum lease payments receivable are as under: Assets given under leases mainly include power plant where the Group has agreed to manufacture/construct an asset and convey, in substance, a right to the beneficiary to use the asset over a major part of its economic life, for a pre-determined consideration. Finance leases: (i) (a) Where the Group is a Lessor: Disclosure in respect of Leases pursuant to Ind AS 17 "Leases": NOTE [48] Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 52.73 32.03 L&T-MHPS Boilers Private Limited PNG Tollway Limited 21.84 25.08 1.24 31-3-2018 25.10 52.73 32.03 "Major parties" denote entities account for 10% or more of the aggregate for that category of transaction during respective period. # includes commission due to non-executive directors 4.11 crore (as at 31-3-2017: 3.79 crore) Note: 1. All related party contracts / arrangements have been entered on arms' length basis. 2. The amount of outstanding balances as shown above are unsecured and will be settled/recovered in cash. Total As at 31-3-2017 As at 31-3-2018 As at 31-3-2017 23400.39 26336.62 9373.41 9603.04 Less: Unearned finance income 14026.98 Gross investment in lease (1+2+3) 16733.58 9373.41 9603.04 Operating leases: The Group has given certain assets under non-cancellable operating lease, the future minimum lease payments receivable in respect of which are as follows: Sr. Particulars Present value of minimum lease payments receivable Provision for doubtful debts on outstanding balances in respect of Joint ventures, including: 8431.59 19641.82 1 Receivable not later than 1 year 1333.70 1493.73 307.42 329.66 8128.44 2 Receivable later than 1 year and not later than 5 years Receivable later than 5 years 4814.95 5201.07 937.55 841.79 17251.74 3 No. (xi) 76.10 (ix) 0.13 Total 0.13 L&T Special Steels and Heavy Forgings Private Limited 0.13 Joint ventures: (viii) Capital commitment given 7.79 6.74 Total 7.79 6.74 Larsen & Toubro Limited Senior Officers' Superannuation Scheme 7.79 6.74 Amount due to (i) Amount due to: Larsen & Toubro Officers & Supervisors Gratuity Fund Larsen & Toubro Gratuity Fund Total 36.31 Revenue commitment given 50.05 11.70 45.05 61.75 (c) Superannuation fund (i) 8.75 Joint ventures, including: 1237.64 3403.94 L&T Deccan Tollways Limited 15.24 25.95 L&T Infrastructure Development Projects Limited 13.70 60.00 138.67 Krishnagiri Walajahpet Tollway Limited L&T Samakhiali Gandhidham Tollway Limited L&T BPP Tollway Limited 13.08 12.80 20.43 26.27 Total 13.63 138.67 76.10 Revenue commitment received L&T-MHPS Boilers Private Limited L&T-MHPS Turbine Generators Private Limited 667.58 394.67 2232.20 1086.15 Associates, including: 115.07 Joint ventures, including: 24.73 111.24 21.80 Total 1352.71 3428.67 (x) L&T- Chiyoda Limited 1 Receivable not later than 1 year 2 Diluted EPS Basic EPS (*) Weighted average number of equity shares outstanding Profit after tax as per accounts (crore) Particulars Basic EPS Basic and Diluted Earnings per share [EPS] computed in accordance with Ind AS 33 "Earning per Share": NOTE [49] Contingent rent recognised in the Statement of Profit and Loss: Nil (previous year: Nil) d. Lease rental expense in respect of operating leases: 425.48 crore (previous year: 453.43 crore) C. There are no exceptional / restrictive covenants in the lease agreements. [B] The lease agreements provide for an option to the Group to renew the lease period at the end of the non- cancellable period. 1044.46 918.91 220.86 1 Payable not later than 1 year 2 3 Payable later than 1 year and not later than 5 years Payable later than 5 years Total 2017-18 Particulars crore As at 31-3-2017 202.78 193.65 585.07 629.95 131.06 As at 31-3-2018 2016-17 A B 52.49 43.05 Face value per share (*) 2.00 2.00 The following potential equity shares are anti-dilutive and are therefore excluded from the weighted average number of equity shares for the purpose of diluted earnings per share. A/D Particulars 2016-17 Weighted average number of potential equity shares on account of conversion of foreign currency convertible bonds 95,20,455 95,20,455 Note: The basic and diluted EPS and number of potential equity shares on account of conversion of foreign currency convertible bonds for the year 2016-17 have been restated pursuant to the issue of bonus equity shares in the ratio of 1:2 (one bonus equity share of 2 each for every two equity share of 2 each held). 428 2017-18 No. Diluted EPS (*) 35,69,417 1,40,41,83,368 7369.86 1,40,06,13,951 6041.23 1,39,85,23,545 A/B 52.62 43.20 Profit after tax as per accounts ( crore) 47,40,600 1,40,32,64,145 Weighted average number of equity shares outstanding 7369.86 1,40,06,13,951 6041.23 1,39,85,23,545 Add: Weighted average number of potential equity shares on account of employee stock options C Weighted average number of equity shares outstanding for diluted EPS D=B+C AB Sr. [A] The Group has taken certain assets on non-cancellable operating leases, the future minimum lease payments in respect of which are as follows: b. A. Assets acquired on finance lease comprises of motor vehicles and land. There are no exceptional/restrictive covenants in the lease agreements. B. The minimum lease rentals and the present value thereof in respect of assets acquired under finance leases are as follows: crore Minimum Lease Payments Finance leases: Sr. Particulars No. As at 31-3-2018 1 Payable not later than 1 year Present value of minimum lease payments 0.20 (i) 151.89 Receivable later than 1 year and not later than 5 years 3 Receivable later than 5 years Total *crore As at 31-3-2018 (b) Where the Group is a Lessee: As at 31-3-2017 79.35 97.44 71.09 10.42 1.45 197.61 89.75 61.75 As at 31-3-2017 0.67 31-3-2018 0.85 Less: Future Finance Charges 0.10 0.17 Present value of minimum lease payments 0.26 0.26 0.85 427 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [48] (contd.) ii) Operating leases: a. The Group has taken various commercial premises and plant and equipment under cancellable operating leases. C. Contingent Rent recognised in the Statement of Profit and Loss: Nil (previous year: Nil) As at 1.02 Total As at 31-3-2017 0.20 0.60 2 Payable later than 1 year and not later than 5 years 0.02 0.36 0.22 3 Payable later than 5 years 0.14 0.13 0.06 0.06 0.19 (142.30) (32.70) 45.05 major parties 81.90 4.71 4.22 4.22 (c) Other Non-Executive Directors Total 15.39 16.99 0.40 0.26 16.33 (b) Mr. Subramanian Sarma w.e.f. October 1, 2017) 4.79 1.50 # 3.29 (a) Mr. A. M. Naik (Group Chairman Non-Executive Directors: 8.06 6.20 1.57 7.77 5.86 1.52 70.53 7.38 1.44 7.40 (g) Mr. J. D. Patil * 3.14 0.81 3.95 5.96 19.78 172.21 84.51 L&T-MHPS Boilers Private Limited Krishnagiri Walajahpet Tollway Limited L&T Infrastructure Development Projects Limited L&T Samakhiali Gandhidham Tollway Limited Associate L&T-Chiyoda Limited Total (ii) Accounts payable including other payable L&T Deccan Tollways Limited * crore As at 31-3-2017 Amount Amounts for major parties Amount Amounts for major parties 289.80 417.95 As at 31-3-2018 1.69 Joint ventures, including: (i) 16.66 32.21 59.10 15.39 192.48 ^ Post-employment benefits include gratuity 55.04 crore *Appointed w.e.f. July 1, 2017. ^^ Represents encashment of past service accumulated leave Accounts receivable # Represents pension *Represents fair value of employee stock options granted during 2016-17 to be vested over a period of time (d) Amount due to/from related parties (including commitments): 424 Sr. Category of balance/relationship/major parties No. ** 33.22 6.37 10.06 term Share- 2016-17 Other Long Post- employee employment benefits benefits Total term benefits employee employment benefits benefits Short-term Other Long 2017-18 Post- Short-term Key Management Personnel crore xix. Compensation paid to Key Management Personnel (KMP): NOTE [47] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) 423 (175.00) 35.61 (c) Transaction with superannuation trust Towards Employer's contribution: 3.25 based 3.32 3.25 3.32 Total 3.25 3.32 "Major parties" denote entities accounting for 10% or more of the aggregate for that category of transaction during respective period. Larsen & Toubro Limited Senior Officers' Superannuation Scheme Total benefits payment** Executive Directors: (c) Mr. R. Shankar Raman 9.16 2.42 11.58 9.00 2.38 12.53 29.30 3.87 (d) Mr. Shailendra Roy 7.96 1.83 9.79 8.13 1.93 15.25 (e) Mr. D. K. Sen 3.51 17.69 (a) Mr. A. M. Naik (Group Executive 11.58 56.80^ 19.38 ^^ 87.76 21.86 13.26 5.83 42.70 102.60 Chairman up to September 30, 2017) (b) Mr. S. N. Subrahmanyan 13.99 3.70 32.21^^ 125.63 78.87 65.64 5.32 7.41 7.39 11.29 11.58 18.24 9.77 55.82 50.14 Mr. M. V. Satish Mr. D. K. Sen Mr. Shailendra Roy Mr. R. Shankar Raman Mr. S. N. Subrahmanyan Mr. A. M. Naik (Key management personnel) (vi) Due to directors #: 18.97 7.87 Total 1844.32 1889.88 (v) Advances received in the capacity of supplier of goods/services classified as "advances from customers" in the Balance Sheet Joint ventures, including: 5.84 17.00 L&T-MHPS Boilers Private Limited 17.00 21.54 Total 17.00 23.21 23.21 5.19 4.93 4.50 10.11 10.63 425 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [47] (contd.) 426 Total crore Category of balance/relationship/major parties No. (b) Approved gratuity fund As at 31-3-2018 Amount Amounts for As at 31-3-2017 Sr. 6.26 10.07 Larsen & Toubro Officers & Supervisory Staff Provident Fund 4.32 2.28 50.14 55.82 Mr. J. D. Patil Total 9.47 (vii) (a) Trust managed provident fund (i) Amount due to: 10.11 10.63 Post-employment benefit plan L&T- Chiyoda Limited 18.54 L&T Camp Facilities LLC 19.07 14.91 Magtorq Private Limited 3.79 2.65 L&T- Chiyoda Limited Associates, including 15.45 Total 1167.37 1946.37 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [47] (contd.) 11.40 Sr. 1171.96 611.61 L&T-MHPS Turbine Generators Private Limited 42.68 44.68 40.70 78.42 38.19 43.30 276.49 700.47 0.15 289.95 417.95 Joint ventures, including: 1148.30 1931.46 L&T-MHPS Boilers Private Limited 0.15 Amount Amounts for major parties Category of balance/relationship/major parties (iii) 1819.92 1862.64 L&T Special Steels and Heavy Forgings Private Limited 1400.00 1185.56 L&T Sapura Shipping Private Limited Joint ventures, including: 191.60 L&T-MHPS Turbine Generators Private Limited 113.75 210.22 Associates, including: 24.40 27.24 215.18 No. (iv) Loans & advances recoverable 987.58 Investment in Debt Securities Joint ventures: crore As at 31-3-2018 Amount Amounts for major parties As at 31-3-2017 Amount Amounts for major parties L&T Special Steels and Heavy Forgings Private Limited Kudgi Transmission Limited 264.42 L&T Infrastructure Development Projects Limited 987.58 264.42 217.73 509.49 260.36 264.42 Total 387.50 Other liabilities Notes forming part of the Consolidated Financial Statements (contd.) Sr. No. Product warranties Expected tax Litigation Particulars liability in related Class of provisions Contractual rectification Provision Others** Total crore towards obligations indirect taxes cost- construction constructive obligation contracts 123456 Balance as at 1-4-2017 45.57 209.86 9.98 respect of 319.42 Movement in provisions: Disclosures pursuant to Ind AS 37 "Provisions, Contingent Liabilities and Contingent Assets" 0.18 0.74 44.45 42.91 1512.43 1649.37 Liabilities associated with group(s) of assets classified as held for sale Borrowings Trade payables Provisions Tax liabilities (Net) Total (a) 21.00 0.90 4.32 1.38 0.33 1459.69 1450.08 1461.97 1495.60 435 Notes forming part of the Consolidated Financial Statements (contd.) NOTE[53] 19.87 763.23 62.26 1410.32 7 Additional provision for unwinding of interest and change in discount rate 8 Balance as at 31-3-2018 0.13 45.09 0.48 0.35 0.01 0.97 210.39 (1.80) 9.15 458.24* 76.39 1132.58 (1+2+3+4+5+6+7) * * on account of share in loss of a joint venture ** includes liquidated damages/backwork charges adjusted against revenue/manufacturing, construction and operating expenses during the year. (b) Nature of provisions: (i) Product warranties: The Group gives warranties on certain products and services, undertaking to repair or replace the items that fail to perform satisfactorily during the warranty period. Provision made as at March 31, 2018 represents the amount of the expected cost of meeting such obligations of rectification/replacement. The timing of the outflows is expected to be within a period of five years from the date of Balance Sheet. (ii) Expected tax liability in respect of indirect taxes represents mainly the differential sales tax liability on account of non-collection of declaration forms for the period prior to five years. 333.32 (1.80) period Effect due to sale of subsidiary during the Additional provision during the year 26.89 44.09 226.70 59.93 357.61 Provision used during the year (12.49) (34.12) (0.67) (1.00) (38.09) (86.37) Unused provision reversed during the period (13.26) (9.44) (0.64) (212.21) (304.99) (7.72) (548.26) Translation adjustments 0.05 0.06 0.11 12.85 (iii) Provision for litigation related obligations represents liabilities that are expected to materialise in respect of matters in appeal. (iv) Contractual rectification cost represents the estimated cost the Group is likely to incur during defect liability period as per the contract obligations in respect of completed construction contracts accounted under Ind AS 11 "Construction Contracts". 2.50 0.48 (v) These entities have reported revenue of 121.73 crore and profit after tax of 19.58 crore from the date of acquisition till March 31, 2018. Had the entities been acquired from April 1, 2017, they would have reported revenue of 142.80 crore and profit after tax of 24.30 crore during 2017-18. (vi) Trade receivables acquired have been collected during the year. (c) Acquisition of L&T Electromech LLC (i) On August 16, 2017, the Group has acquired 35% stake in Larsen & Toubro Electromech LLC, operating in the Hydrocarbon Segment in Oman. Pursuant to this, the entity has been classified as subsidiary (earlier classified as Joint Venture) (ii) Assets acquired and liabilities recognised on the date of acquisition are as follows: 434 Assets Non-current assets Current assets (iv) Goodwill is attributable to future growth of business out of synergies from this acquisition and assembled workforce and is not deductible for tax purpose. Inventories Cash and bank balances Other current assets Total Assets Liabilities Current Liabilities Short-term borrowings Trade payables Other current liabilities Provisions Total Liabilities Net Assets acquired Trade receivables (iii) Calculation of Capital Reserve: NOTE [51] (contd.) 433 Trade payables Other current liabilities Total Liabilities Net Assets acquired (iii) Calculation of Goodwill: Purchase consideration: Cash (A) Present Value of contingent consideration payable over future years (B)* Purchase consideration paid (C=A+B) Less: Fair value of net assets acquired Goodwill Notes forming part of the Consolidated Financial Statements (contd.) * Gross amount of contingent consideration payable is 39.10 crore 2.75 14.71 17.46 40.26 44.86 crore Esencia Technologies Inc. 94.23 20.34 114.57 44.86 69.71 22.80 crore 29.31 2.93 Others (b) The Group has following non-current assets/disposal group recognised as held for sale as on March 31, 2017: Assets/Disposal Group Port operation (Marine Infrastructure Developer Private Limited) Ready Mix Concrete unit (Larsen & Toubro Readymix & Asphalt Concrete Industries LLC) Non-current assets at Talegaon (L&T Cutting Tools Limited) Non-current Assets (L&T Aviation Services Private Limited) Non-current Assets (L&T Financial Consultants Limited) Reportable Segment Developmental Projects Infrastructure Others Others Financial Services (c) The proposed sale are expected to be completed within 1 year from the respective reporting dates. (d) The details of assets/ disposal group classified as held for sale and liabilities associated thereto are as under: Particulars As at 31-3-2018 Financial Services crore As at 31-3-2017 Property, Plant and Equipment Other Intangible assets Inventories Trade receivable Cash and cash equivalents Other assets Total 1464.24 1589.23 0.58 1.35 Group(s) of assets classified as held for sale Reportable Segment Developmental Projects Current Assets (L&T Vision Ventures Limited) Port operation (Marine Infrastructure Developer Private Limited) Non-current Assets (L&T Financial Consultants Limited) 80.86 24.40 62.83 171.02 200.33 129.84 76.24 106.85 19.53 332.46 332.46 (132.13) Fair value of net assets acquired Less: Acquisition date fair value of net assets (accounted as per equity accounting) Capital Reserve crore (132.13) (132.78) 0.65 (iv) The entity has reported revenue of 285.57 crore and profit after tax of 18.66 crore from the date of acquisition till March 31, 2018. Had the entity been acquired from April 1, 2017, it would have reported revenue of 364.39 crore and profit after tax of 24.20 crore during 2017-18. (v) Trade receivables acquired have been collected during the year. LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [52] Disclosures pursuant to Ind AS 105 "Non-current Assets Held for Sale and Discontinued Operations": (a) The Group has following non-current assets/disposal group recognised as held for sale as on March 31, 2018: Assets/Disposal Group 2.29 Current Liabilities (v) Constructive obligation represents losses absorbed by the group for share of joint venturer/ non-controlling interests in joint ventures/ subsidiaries and own share of losses over and above the investments. (c) Disclosure in respect of contingent liabilities is given in Note 32. As at 31-3-2017 17155.58 16756.64 11043.29 9862.51 14635.78 13500.70 6498.93 3640.53 2519.80 3255.94 As at 31-3-2018 4544.35 27048.22 19066.50 15291.14 15151.81 LARSEN & TOUBRO 15535.18 16250.27 18199.52 5792.00 3531.32 (959.13) 6221.98 (3047.71) As at 31-3-2017 L&T Infrastructure Finance Company Limited 7203.05 6329.75 266.05 120.37 1160.12 937.56 0.62 (0.14) (99.41) 215.95 266.67 As at 31-3-2018 120.23 1153.51 41.31 (13.94) 166.99 119.71 52.16 46.75 50.60 21.60 * crore L&T Finance Limited 1060.71 8311.81 6787.26 3585.22 7942.77 5469.31 1044.07 1116.24 Non-current liabilities (e) 781.30 1028.15 38.37 17.44 Net non-current assets (f)=(d) - (e) 7161.47 Non-current assets (d) 4441.16 1098.80 Net assets (g)=(c) + (f) 7685.66 4156.28 3718.58 2976.89 Accumulated Non-Controlling Interest 2723.96 1453.64 623.93 467.97 1005.70 1878.09 2712.88 (284.88) 1031.65 687.71 487.14 3174.27 470.24 crore L&T Finance Holdings Limited Larsen & Toubro Infotech Limited Particulars As at 31-3-2018 As at 31-3-2017 As at 31-3-2018 As at 31-3-2017 Current assets (a) Current liabilities (b) 1251.80 945.90 3997.88 3084.98 727.61 1230.79 1285.00 1206.89 Net current assets (c)=(a) - (b) 524.19 60.82 (vi) Liquidated damages represent the estimated cost the Group is likely to incur due to delay in delivery of products as per its contract obligations and accrued on the basis of advice from distributors/customers. 2016-17 2016-17 273.40 - Exceptional Items Exceptional Items: 281.01 crore 3 Larsen & Toubro Readymix and Asphalt Concrete Industries LLC 3.16 45 L&T General Insurance Company Limited L&T South City Projects Limited EWAC Alloys Limited 402.43 Other income Exceptional Items 95.81 Revenue from operations Total 413.30 498.24 437 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [54] (contd.) (b) Disclosure of subsidiaries having material non-controlling interest: (i) Current tax: 7.61 crore Summarised Statement of Profit and Loss 2 L&T Cutting Tools Limited 436 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) [NOTE 54] Disclosure pursuant to Ind AS 112 "Disclosure of interest in other entities" (a) Change in the Group's ownership interest in a subsidiary (without ceding control) (i) On account of divestment of part stake During the year 2017-18, the Group has sold 0.48% stake in Larsen & Toubro Infotech Limited and 0.46% stake in L&T Technology Services Limited. The proceeds on disposal of 204.53 crore were received in cash. An amount of 9.48 crore (being the proportionate share of the carrying amount of the net assets of Larsen & Toubro Infotech Limited and L&T Technology Services Limited) has been transferred to non-controlling interests. The difference of 195.05 crore between the consideration received and the increase in the non-controlling interests has been credited to retained earnings. During the year 2016-17, the Group has sold 10.30% stake in Larsen & Toubro Infotech Limited and 10.23% stake in L&T Technology Services Limited. The proceeds on disposal of 2069.84 crore were received in cash. An amount of 360.50 crore (being the proportionate share of the carrying amount of the net assets of Larsen & Toubro Infotech Limited and L&T Technology Services Limited) has been transferred to non-controlling interests. The difference of ₹1709.34 crore between the consideration received and the increase in the non-controlling interests has been credited to retained earnings. (ii) On account of dilution 136.74 During the year 2017-18, the Group's continuing interest has reduced on account of dilution due to exercise of ESOP by 0.19%, 0.84% and 0.67% in L&T Finance Holdings Limited, in Larsen & Toubro Infotech Limited and in L&T Technology Services Limited respectively. The proceeds on dilution of ₹32.26 crore were received in cash. An amount of 147.18 crore (being the proportionate share of the carrying amount of the net assets of L&T Finance Holdings Limited, in Larsen & Toubro Infotech Limited and in L&T Technology Services Limited) has been transferred to non-controlling interests. The difference of 114.92 crore between the increase in the non-controlling interests and the consideration received has been debited to retained earnings. During the year 2016-17, the Group's continuing interest has reduced on account of dilution due to exercise of ESOP by 0.09% and 0.38% in L&T Finance Holdings Limited and in Larsen & Toubro Infotech Limited respectively. The proceeds on dilution of 11.93 crore were received in cash. An amount of 21.77 crore (being the proportionate share of the carrying amount of the net assets of L&T Finance Holdings Limited and in Larsen & Toubro Infotech Limited) has been transferred to non-controlling interests. The difference of 9.84 crore between the increase in the non-controlling interests and the consideration received has been debited to retained earnings. (iii) The effect of divestment with ceding of control in subsidiary during the period is as under: * crore Sr. No. Name of company Effect on consolidated profit/(loss) after non- controlling interest 2017-18 2016-17 Line item in Statement of Profit & Loss in which the gain/(loss) is recognised 1 Additionally, during the year 2017-18, the Group's continuing interest has also reduced on account of dilution due to further issue of shares to Qualified Institution Buyer by 2.42% in L&T Finance Holdings Limited after considering the infusion by the Parent Company. The proceeds on dilution of 1455.79 crore were received in cash (including share warrant money). An amount of 1377.82 crore (being the proportionate share of the carrying amount of the net assets of L&T Finance Holdings Limited) has been transferred to non-controlling interests. The difference of 77.97 crore between the consideration received and increase in the non-controlling interests has been credited to retained earnings. 438 Particulars Revenue 2016-17 4042.46 2618.19 2695.39 116.26 (37.13) 138.29 53.64 (1.43) 4.50 (0.09) 2017-18 (1.17) (32.63) 138.20 52.47 281.64 196.60 32.45 12.10 crore L&T Finance Holdings Limited Larsen & Toubro Infotech Limited 2017-18 89.52 114.83 2016-17 2017-18 4930.71 Company Limited Profit/(loss) for the year Other comprehensive income Total comprehensive income Profit/(loss) allocated to non-controlling Interest Dividend to non-controlling Interest Particulars Revenue Profit/(loss) for the year Other comprehensive income Total comprehensive income Profit/(loss) allocated to non-controlling Interest Dividend to non-controlling Interest (ii) Summarised Balance Sheet Particulars Current assets (a) Current liabilities (b) Net current assets (c)=(a) - (b) Non-current assets (d) Non-current liabilities (e) Net non-current assets (f)=(d) - (e) Net assets (g)=(c) + (f) Accumulated Non-Controlling Interest L&T Finance Limited crore L&T Infrastructure Finance 2017-18 Deferred Tax Liabilities 21256.22 Liabilities (226.15) 34.81 (141.96) (112.73) (223.81) Total effect of tax adjustments [(i) to (xi)] (829.21) (1069.15) Tax expense recognised during the year (f) Effective tax Rate (226.15) (e)=(c)-(d) (f)=(e)/(a) 2006.59 27.48% 22.58% (c) (i) Unused tax losses and unused tax credits for which no deferred tax asset is recognised in Balance sheet Particulars As at 31-3-2018 crore Expiry year As at 31-3-2017 crore Expiry year Tax losses (Business loss and unabsorbed depreciation) 3198.87 - Amount of losses having expiry (10.64) (ix) Effect of tax benefit on business combination under common control 45.76 41.48 85.15 20.80 (C) Tax on employee perquisites borne by the Group 2.37 3.38 (iii) Weighted deduction on R&D expenditure and deduction u/s 80 IA (402.85) (377.63) (iv) Tax effect on impairment and fair valuation losses recognised on which deferred tax asset (DTA) is not recognised (xi) Tax effect on various other Items 257.28 (v) Effect of previously unrecognised tax losses used to reduce tax expense (vi) Tax effect of losses of current year on which no deferred tax benefit is recognised (vii) Effect of tax paid on foreign source income which is exempt from tax in India u/s 10AA (56.01) (127.67) 749.94 289.18 (258.75) (220.74) (x) Additional dividend tax on dividend distributed (viii) Effect on deferred tax due to change in Income tax rate 140.06 2800.85 FY 2019-37 - Amount of losses having no expiry 2164.85 benefit) Total 3358.77 2515.32 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [50] (contd.) (d) Major components of Deferred Tax Liabilities and Deferred Tax Assets: Particulars Deferred tax liabilities: 2335.48 Difference between book base and tax base of property, plant & equipment, investment property and intangible assets Deferred tax liabilities/ (assets) Charge/ MAT credit (credit) to utilised Effect Charge/(credit) due to to other (Credit) to Hedge Exchange Deferred tax Difference liabilities/ Statement acquisition/ comprehensive as at of Profit crore (b) Arising out of upward revaluation of tax base of assets (on account of indexation 350.47 1023.29 7176.81 Tax losses (Capital loss) 4297.09 Unused tax credits [Minimum Alternate Tax (MAT) credit not recognised] 230.83 FY 2019-26 FY 2028-33 2527.68 7088.54 2645.30 151.16 FY 2018-37 FY 2019-25 FY 2028-32 Total 14505.58 12412.68 (ii) Unrecognised deductible temporary differences for which no deferred tax asset is recognised in Balance Sheet 430 crore Sr. As at Particulars No. 31-3-2018 As at 31-3-2017 (a) Towards provision for diminution in value of investments (A) Corporate Social Responsibility (CSR) expenses disposal/ (B) Expenses in relation to exempt income (A) Dividend income and interest on tax free bonds (B) Other items (61.46) Effect on deferred tax balances due to the change in income tax rate (10.64) (533.40) (827.76) Income tax expense reported in the consolidated statement of profit or loss [(i)+(ii)] 3198.87 2006.59 (b) Other Comprehensive Income (OCI) Section: (i) Items not to be reclassified to profit or loss in subsequent periods: (A) Current tax expense/(income): (13.39) On re-measurement of defined benefit plans On re-measurement of defined benefit plans 5.60 (5.82) (5.82) (0.13) (0.13) (0.13) (0.13) (ii) Items to be reclassified to profit or loss in subsequent periods: (A) Current tax expense/(income): On gain/(loss) on cash flow hedges other than mark to market (B) Deferred tax expense/(income): (30.00) Effect of previously unrecognised tax losses and tax offsets on which deferred tax benefit is recognised (509.37) Non-current Liabilities NOTE [50] Disclosure pursuant to Ind AS 12 "Income Taxes" (a) Major components of tax expense/(income): Sr. No. crore 2017-18 2016-17 Particulars Consolidated statement of Profit and Loss: (a) Profit and Loss section: (766.30) (i) Current Income tax : 3609.98 2899.88 Effect of previously unrecognised tax losses and tax offsets used during the current year Tax expense in respect of earlier years (42.62) (66.21) 164.91 0.68 3732.27 2834.35 (ii) Deferred Tax: Tax expense on origination and reversal of temporary differences Current income tax expense (22.79) On foreign currency translation (0.49) Sr. No. Particulars (a) Profit before tax (b) Corporate tax rate as per Income tax Act, 1961 (c) Tax on accounting profit (d) (i) Tax on Income exempt from tax: (b) Reconciliation of Income tax expense and accounting profit multiplied by domestic tax rate applicable in India: crore 2016-17 11639.16 8887.36 34.608% 34.608% (c)=(a)*(b) 4028.08 3075.74 (937.39) (244.63) (1.46) 2017-18 NOTE [50] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) 429 (30.49) (22.79) (B) Deferred tax expense/(income): Net gain/(loss) on cost of hedging Reserve 0.52 1.04 On Mark-to-Market (MTM) of cash flow hedges 38.38 241.38 On gain/(loss) on fair value of debt securities 2.05 1.08 On foreign currency translation (2.29) 40.95 241.21 Income tax expense reported in the other comprehensive income [(i)+(ii)] 15.93 212.47 (c) Retained earnings: Current income tax Deferred tax (135.15) 134.85 Income tax expense reported in retained earnings (0.30) (ii) Tax on expense not tax deductible: income 5.60 31-3-2017 Current assets Trade receivables 0.37 Cash and bank balances 0.57 31.76 27.65 Short term loans 0.11 Other current assets 0.04 1.09 12.68 72.09 Total Assets 1.35 91.32 Liabilities Non-current Liabilities Deferred Tax Liabilities 6.26 Current Liabilities Trade payables 0.18 Other current liabilities Provisions Total Liabilities Net Assets acquired 18.09 1.14 (iii) Calculation of Goodwill: 0.26 India Private Limited tax liabilities Net Deferred tax (assets) Net deferred tax liability/(assets) 1604.93 1570.89 (1736.15) (2131.98) (1125.20) (533.40) 90.88 30.19 40.82 (0.15) 2.80 (1494.06) 431 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [51] Disclosures pursuant to Ind AS 103 "Business Combinations": (a) Acquisition of Syncordis Group (i) On December 15, 2017, the Group has acquired 100% stake in Syncordis S.A, Luxembourg, along-with its fully owned subsidiaries viz. Syncordis France SARL, Syncordis Ltd and Syncordis PSF S.A. operating in the IT & Technology Services segment. Additionally, on December 11, 2017, the Group has acquired 100% stake in Syncordis Software Services India Private Limited, a wholly owned subsidiary of Syncordis S.A., Luxembourg. (ii) Assets acquired and liabilities recognised on the date of acquisition are as follows: 432 Assets Non-current assets Customer Relationships Other non-current assets crore Syncordis Software Services Syncordis S.A. Luxembourg (Consolidated) Offsetting of deferred tax (assets) with deferred 13.18 45.66 0.36 (i) On June 1, 2017, the Group has acquired 100% stake in Esencia Technologies Inc., USA based company, along-with its fully owned subsidiary viz. Esencia Technologies India Private Limited, operating in the IT & Technology Services segment. (ii) Assets acquired and liabilities recognised on the date of acquisition are as follows: Assets Non-current assets Trademarks Customer Relationships Other non-current assets Current assets crore Esencia Technologies Inc. 6.24 53.62 0.32 60.18 Inventories 1.13 Trade receivables 12.95 Cash and bank balances 4.34 Other current assets 6.52 24.94 85.12 Reserve (other than Total Assets (b) Acquisition of Esencia Group 0.18 (vi) Trade receivables acquired have been collected during the year. (iv) Goodwill is attributable to future growth of business out of synergies from this acquisition and assembled workforce and is not deductible for tax purpose. 59.20 0.18 65.46 1.17 25.86 crore Syncordis Software Services India Private Limited Syncordis S.A. Luxembourg (Consolidated) Purchase consideration: Cash (A) Present Value of contingent consideration payable over future years (B)* Total purchase consideration (C=A+B) Less: Fair value of net assets acquired Goodwill * Gross amount of contingent consideration payable is 103.38 crore 2.66 111.94 87.96 2.66 199.90 1.17 25.86 1.49 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [51] (contd.) (v) These entities have reported revenue of 50.21 crore and profit after tax of 5.15 crore from the date of acquisition till March 31, 2018. Deferred tax (assets): 174.04 differences 17.86 9.90 (1.52) 2208.81 | Offsetting of deferred tax liabilities with deferred tax (assets) (1604.93) (1570.89) Net Deferred tax liabilities 610.95 637.92 Deferred tax (assets): Provision for doubtful debts, advances and 2215.88 (33.31) non-performing assets debited to Statement of Unpaid statutory liabilities Carried forward tax losses Unutilised MAT credit (1709.58) (508.91) (238.11) 1.33 (369.98) 36.17 (114.93) 22.72 (660.10) Profit and Loss Deferred tax liabilities: 265.88 (1.52) (3702.87) sale through OCI) (assets) as at 31-3-2018 1737.07 (51.98) I (4.77) 1 1680.32 Disputed statutory liabilities paid and claimed as deduction for tax purposes but not debited to Statement of Profit and Loss 152.17 (14.06) 138.11 Gain on Derivative Transactions to be offered for tax purposes in the year of transfer/ settlement 125.76 (11.15) 9.89 124.50 Other items giving rise to temporary 200.88 43.88 22.63 0.01 2.29 90.88 Unabsorbed depreciation 1 31.09 0.22 (13.15) and Loss I Other items giving rise to temporary differences (159.92) (82.24) 9.90 5.00 (0.15) 4.32 (223.09) (3341.08) (500.09) 90.88 12.33 30.92 (0.15) 4.32 (44.46) property and intangible assets Held for Difference between book base and tax base (0.01) 1.25 0.97 (2217.52) (236.78) (333.81) (92.22) (565.68) of property, plant & equipment, investment for tax purposes in the year of transfer/ settlement (44.00) (2.54) Loss on derivative transactions to be claimed | (20.62) 25.92 | 121.53 865.18 1359.82 8.72 14566.60 150937.36 3.21 16249.65 129159.15 Sr. No. I. (i) Particulars Measured at Fair value through Profit or Loss (FVTPL): Derivative instruments not designated as cash flow hedges (ii) Embedded derivatives not designated as cash flow hedges Measured at amortised cost: Sub-total (1) II. (i) Borrowings (ii) Trade payables (iii) Others Sub-total (II) 3683.53 11203.09 9208.41 (iv) Embedded derivative designated as cash flow hedges Sub-total (III) 180.87 5531.21 8352.84 (b) Category-wise classification for applicable financial liabilities: III. Sub-total (II) (vi) Other receivables (v) Cash and bank balances 128396.44 2109.23 3428.45 28688.97 34654.08 (iv) Advances recoverable in cash (iii) Trade receivables III. Derivative instruments (including embedded derivatives) through Other Comprehensive 99773.40 Measured at fair value through Other Comprehensive Income (FVTOCI): (i) Investment in government securities, debentures and bonds Total (1+11+111) (ii) Loans (iii) Derivative instruments designated as cash flow hedges 4484.29 Income: life time ECL Derivative instruments designated as cash flow hedges 643.97 2.20 129303.54 445 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [57] (contd.) (c) Items of income, expenses, gains or losses related to financial instruments: 446 Sr. Particulars No. I. 334.30 1.48 150521.98 Net gains/(losses) on financial assets and financial liabilities measured at fair value through Profit or Loss and amortised cost: 1. Gains/(losses) on fair valuation or sale of Investments 2. Gains/(losses) on fair valuation/settlement of derivatives: crore 2017-18 2016-17 (2160.12) (71.70) (a) Gains/(losses) on fair valuation or settlement of forward contracts not designated as cash flow hedges 59.41 77.33 A. (i) Financial asset or financial liabilities mandatorily measured at fair value through profit and loss: (i) 431.14 559.99 (ii) Embedded derivatives designated as cash flow hedges Sub-total (III) IV. Financial guarantee contracts Total (I+II+II+IV) As at crore As at 31-3-2018 31-3-2017 21.44 83.98 22.73 133.20 68.55 155.93 107524.08 37794.96 4798.61 93953.95 30294.86 4252.63 150117.65 128501.44 170.18 164.12 47.11 62831.98 crore Investment in debentures and bonds Loss allowance as on 31-3-2018 429.26 (97.35) 549.98 177.24 2460.18 444 (iv) Reconciliation of allowance for doubtful debts on trade receivables (other than financial services business): Particulars Opening balance Changes in loss allowance (Provision for doubtful debts): Loss allowance based on ECL Additional provision Write off as bad debts Closing balance [reported under Note 13] (v) Amounts written off: crore 2017-18 2465.16 2016-17 1961.09 41.80 financial assets 44.28 (b) Gains/(losses) on fair valuation or settlement of embedded derivative contracts not designated as cash flow hedges Higher/(lower) provision on existing 11.53 (11.53) Transferred to and from 12-month ECL to 648.32 124.60 53.47 Provision on new financial assets 1634.62 511.21 343.04 262.90 Loss allowance as on 31-3-2017 920.45 161.78 (145.03) 35.91 (112.09) 76.18 27.08 5.14 151.89 260.00 financial assets 766.51 378.78 (373.69) 2899.78 4514.30 799.20 70.88 10356.77 (iv) Investment in debentures and bonds 1253.04 1133.33 (v) Derivative instruments not designated as cash flow hedges 17.12 65.88 (vi) Embedded derivatives not designated as cash flow hedges (vii) Investment in security receipts (iii) Investment in mutual funds and units of fund 47.60 1016.88 505.27 II. (i) Sub-total (1) Measured at amortised cost: Loans 7974.32 13136.10 (ii) 204.77 81409.71 429.83 283.28 (ii) Investment in preference shares (137.61) 2465.16 Particulars 2017-18 2016-17 Amount of financial assets written off during the period but still enforceable 502.61 4.59 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) 842.10 NOTE [57] (a) Category-wise classification for applicable financial assets: crore Sr. No. Particulars As at 31-3-2018 As at 31-3-2017 I. (i) Measured at fair value through Profit or Loss (FVTPL): Investment in equity instruments Other disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": 28.22 (i) Financial liabilities measured at amortised cost (c) Gains/(losses) on fair valuation or settlement of futures not designated as cash flow hedges Fair value amount Financial assets (financial services business): Loans Debentures and Bonds 7,8,16,17 6,12 Total 63382.87 429.83 63812.70 63124.23 433.95 63558.18 45576.25 45692.68 431.14 46007.39 431.14 46123.82 Financial liabilities: Borrowings Total 22,26,27 44982.93 44982.93 46046.29 46046.29 37192.96 38131.76 As at 31-3-2017 Carrying crore Fair value As at 31-3-2018 Carrying amount Sub-total (B) 11039.53 9604.34 C. Interest expense: (ii) Derivative instruments (including embedded derivatives) that are measured at fair value through Other Comprehensive Income (reclassified to Profit and Loss during the year) (iii) Financial liabilities measured at fair value through Profit or Loss (6969.13) (266.60) (6112.21) (401.21) (15.48) 37192.96 Sub-total (C) 8.04 (6505.38) Total [II] = (A+B+C) 6536.40 3847.59 447 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [57] (contd.) (d) Fair value of financial assets and financial liabilities measured at amortised cost: Particulars Note (7251.21) 118.15 38131.76 (e) Disclosure pursuant to Ind AS 113 "Fair Value Measurement" - Fair value hierarchy of financial assets and financial liabilities measured at amortised cost: Loans Debentures and Bonds Total Financial Liabilities: Borrowings Total 811.49 11945.77 811.49 11945.77 33289.03 46046.29 Discounted cash flow 33289.03 46046.29 crore Level 1 Level 2 Level 3 Total Valuation technique for level 3 items 8872.64 8872.64 21467.35 86.26 21553.61 15352.69 344.88 15697.57 45692.68 Discounted cash flow 431.14 46123.82 Discounted cash flow Financial assets (financial services business): 817.04 13927.57 23387.15 817.04 13927.57 23387.15 | Higher/(lower) provision on existing As at 31-3-2017 448 crore Level 1 Level 2 Level 3 As at 31-3-2018 Total Valuation technique for level 3 items Financial assets (financial services business): Loans 8995.06 Debentures and Bonds Note: The carrying amounts of trade and other receivables, cash and cash equivalents, trade and other payables are considered to be the same as their fair values due to their short term nature. The carrying amounts of loans given and borrowings taken for short term or at floating rate of interest are considered to be close to the fair value. Accordingly these items have not been included in the above table. 35298.14 84.94 8995.06 35383.08 18831.03 349.01 19180.04 63124.23 Discounted cash flow 433.95 63558.18 Discounted cash flow Financial Liabilities: Borrowings Total Total 8.20 834.75 981.94 Sub-total (C) Total [I]=(A+B+C) 128.76 132.89 (43.66) 409.58 (4779.51) (2094.97) LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [57] (contd.) crore 2017-18 2016-17 Sr. No. Particulars II. Net gains/(losses) on financial assets and financial liabilities measured at fair value through Other Comprehensive Income: A. Gains recognised in Other Comprehensive Income: (i) Financial assets measured at fair value through Other Comprehensive Income: (a) Gains/(losses) on fair valuation or sale of government securities, bonds, debentures etc. (ii) Derivative measured at fair value through Other Comprehensive Income: (ii) Unclaimed credit balances written back 276.69 (172.42) (i) Exchange gains/(losses) on revaluation or settlement of items denominated in foreign currency (trade payables, borrowings availed etc.) (125.74) (56.89) Sub-total (A) (2198.23) (87.53) B. Financial assets measured at amortised cost: (i) Exchange gains/(losses) on revaluation or settlement of items denominated in foreign currency (trade receivables, loans given etc.) (ii) (Allowance)/reversal for expected credit loss during the year (iii) Provision for doubtful debts (other than ECL)[net] (51.18) (iv) Gains/(losses) on derecognition: (b) Gains/(losses) on transfer of financial assets (non-recourse) 220.53 (299.68) (1333.76) (946.71) (776.89) (356.46) (557.29) (88.11) (477.26) (339.01) (2537.62) (2417.02) Sub-total (B) C. Financial liabilities measured at amortised cost: (a) Bad debts written off [net] 105.14 (b) Gains/(losses) on fair valuation or settlement of forward contracts designated as cash flow hedges 640.56 332.54 (A-B+C) C. (i) Allowance/(reversal) for ECL recognised during the year in the Statement of Profit and Loss Total [II] (35.23) (50.45) 193.42 282.09 III. Interest and Other income/(expense): A. Dividend Income: 228.65 Dividend income from investments measured at FVTPL 2748.08 748.63 2748.08 748.63 B. Interest Income: (i) Financial assets measured at amortised cost 10049.39 8651.44 (ii) Financial assets measured at fair value through Other Comprehensive Income (iii) Financial assets measured at fair value through Profit or Loss Sub-total (A) (36.27) Net gains recognised in Other Comprehensive Income [II]=[(A)-(B)] 278.35 349.57 (c) Gains/(losses) on fair valuation or settlement of embedded derivative contracts designated as cash flow hedges (82.38) (90.05) Sub-total (A) Less: 507.00 364.66 B. Gains reclassified to Profit and Loss from Other Comprehensive Income 32.12 (i) Financial assets measured at fair value through Other Comprehensive Income: (5.70) 110.46 (ii) Derivative measured at fair value through Other Comprehensive Income: 2. On forward contracts upon hedged future cash flows affecting the Profit and Loss or related assets or liabilities 434.30 (40.70) 3. On embedded derivative contracts upon hedged future cash flows affecting the Profit and Loss or related assets or liabilities (150.25) (37.64) Sub-total (B) 1. On government securities, bonds, debentures etc. upon sale Loss allowance as on 1-4-2016 Provision on new financial assets Transferred to and from 12-month ECL to (c) Summarised Statement of Profit and Loss of material joint ventures: Loss allowance measured at 12-month ECL L&T Special Steels and Heavy Forgings Private Limited crore L&T Infrastructure Development Projects Limited (consolidated) As at 31-3-2018 As at 31-3-2018 As at 31-3-2018 Opening net assets 929.88 Profit/(loss) for the year 241.47 As at 31-3-2017 731.16 (641.09) (384.69) 221.28 (270.30) (254.65) As at 31-3-2017 As at 31-3-2017 1355.90 1626.46 (404.05) (506.40) Adjustment in opening retained earnings due to stake dilution 223.03 Other comprehensive income Infusion during the year Equity component of other financial instruments L&T-MHPS Boilers Private Limited Particulars (b) Reconciliation of carrying amounts of material joint ventures: NOTE [55] (contd.) Financial liabilities (excluding trade payables) Other liabilities (including trade payables) Total non-current liabilities Non-controlling interest Net assets 11.90 120.86 (D) 11.90 120.86 14.31 550.36 16.92 567.28 (A+B-C-D-E) 1185.66 929.88 (598.57) (641.09) 703.80 17827.71 17.64 563.05 721.44 18390.76 132.04 955.93 16892.13 624.55 17516.68 151.94 1355.90 439 Notes forming part of the Consolidated Financial Statements (contd.) (E) Non-current liabilities (22.51) (1.75) 604.69 474.24 (47.79) 1310.93 16.24 1764.73 440 crore L&T-MHPS Boilers Private Limited Particulars L&T Special Steels and Heavy Forgings Private Limited Revenue Interest Income Depreciation and amortisation Interest expense Income tax expense Profit/(loss) from continuing operations 241.47 Profit/(loss) for the year 241.47 Other comprehensive income Total comprehensive income Carrying amount 458.24 494.77 (15.30) (20.36) Other adjustments Regrouped to provisions (0.79) (0.08) (0.05) Other adjustments Closing net assets Group's share in % Group's share Goodwill 4.87 1185.66 51.00% 604.69 1.21 311.61 929.88 (598.57) (641.09) 51.00% 74.00% 74.00% 474.24 (442.94) (474.41) 12.89 1355.90 97.45% 97.45% 931.55 1321.32 393.87 393.87 Parent's investment in group companies 33.30 33.30 955.93 1414.31 2249.49 3090.61 4296.65 1206.04 495.43 (209.83) 8328.44 5085.55 998.05 587.03 53.84 97.35 254.24 61.21 crore L&T Finance Holdings Limited Larsen & Toubro Infotech Limited 2017-18 2016-17 2017-18 2016-17 (157.92) (127.82) 710.95 1047.16 (2508.89) 727.32 (315.99) 2016-17 Valuation technique Level 2: Future cash flows discounted using G-sec/LIBOR rates plus corporate spread. LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [54] (contd.) (iii) Summarised Statement of cash flows Particulars Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Net increase/decrease) in cash and cash equivalents (2191.00) Particulars Cash flows from investing activities L&T Finance Limited crore L&T Infrastructure Finance Company Limited 2017-18 2016-17 (9001.93) (2479.31) 2017-18 (1239.24) Cash flows from operating activities (56.01) (249.52) (927.63) 0.28 3371.25 2991.04 Total current assets (A) 3706.02 3200.53 Total non-current assets (B) 574.84 209.49 622.09 0.52 681.31 165.32 3908.19 165.84 4589.50 5739.20 1386.16 18335.37 17581.97 2931.87 2807.33 Current liabilities Financial liabilities (excluding trade payables) Other liabilities (including trade payables) Total current liabilities 549.38 2533.92 3083.30 419.87 1434.18 2352.01 92.49 2771.88 1526.67 57.34 1196.65 1471.65 3446.14 187.79 188.07 1307.31 14.31 255.78 334.77 Cash and cash equivalents 2359.66 144.09 10.74 (39.75) (407.49) 53.94 (43.70) 75.84 NOTE [55] Cash flows from financing activities Net increase/decrease) in cash and cash equivalents Disclosures pursuant to Ind AS 112 "Disclosure of interest in other entities" - Joint Ventures and Associates (a) Summarised Balance Sheet for material joint ventures: Other assets Particulars L&T Special Steels and Heavy Forgings Private Limited crore L&T Infrastructure Development Projects Limited (consolidated) As at 31-3-2018 As at 31-3-2017 As at 31-3-2018 As at 31-3-2017 As at 31-3-2018 As at 31-3-2017 Current assets L&T-MHPS Boilers Private Limited 221.28 (270.30) 221.28 (270.30) (22.51) 1.21 198.77 (269.09) 2017-18 2016-17 2017-18 2016-17 2966.52 2490.66 127.87 129.96 2457.88 19.22 27.57 0.16 0.12 9.79 (58.63) (55.82) (49.28) (51.10) (440.78) (21.25) (28.71) (179.22) (171.58) (1608.02) (126.70) (110.85) (83.97) (254.65) (404.05) (254.65) (404.05) (1.75) (256.40) L&T Infrastructure Development Projects Limited (consolidated) 2017-18 9.09 592.60 583.17 Derivatives including embedded derivatives for hedging receivable/(payable) exposures with respect to firm commitments and forecast transactions Receivable/(payable) exposures with respect to forward contract and embedded (1705.20) (239.02) 98.55 (255.27) derivative not designated as cash flow hedge To provide a meaningful assessment of the foreign currency risk associated with the Group's foreign currency derivative positions against off-balance sheet exposures and unhedged portion of on-Balance Sheet financial assets and liabilities, the Group uses a multi-currency correlated value-at-risk ("VAR") model. The VAR model uses a Monte Carlo simulation to generate thousands of random market price paths for foreign currencies against Indian Rupee taking into account the correlations between them. The VAR is the expected loss in value of the exposures due to overnight movement in spot exchange rates, at 95% confidence interval. The VAR model is not intended to represent actual losses but is used as a risk estimation tool. The model assumes normal market conditions and is a historical best fit model. Because the Group uses foreign currency instruments for hedging purposes, the loss in fair value incurred on those instruments are generally offset by increase in the fair value of the underlying exposures for on-Balance Sheet exposures. The overnight VAR for the Group at 95% confidence level is 64.58 crore as at March 31, 2018 and 75.07 crore as at March 31, 2017. Actual future gains and losses associated with the Group's investment portfolio and derivative positions may differ materially from the sensitivity analysis performed as at March 31, 2018 due to the inherent limitations associated with predicting the timing and amount of changes in foreign currency exchange rates and the Group's actual exposures and position. LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [56] (contd.) 262.73 8189.99 (2720.75) 1273.26 659.25 Yen Kuwaiti Dinar US Dollar including As at 31-3-2017 EURO Malaysian Canadian Japanese Ringgit Dollar Kuwaiti Yen Dinar pegged currencies pegged (ii) currencies (3580.37) (243.74) 66.84 50.96 (179.21) 78.01 (4789.18) (614.86) 206.76 229.37 (383.61) 394.69 risk in respect of recognised financial assets/(recognised financial liabilities) 7260.23 (2192.00) 49.17 Net exposure to foreign currency Interest rate risk: The Group's exposure to changes in interest rates relates primarily to the Group's outstanding floating rate debt and lending. The Group's outstanding debt in local currency is a combination of fixed rate and floating rate. For the portion of local currency debt on fixed rate basis, there is no interest rate risk. For the portion of local currency debt on floating rate basis, there is a natural hedge with receivables in respect of financial services business. There is a portion of debt that is linked to international interest rate benchmarks like LIBOR. The Group also hedges a portion of these risks by way of derivatives instruments like interest rate swaps and currency swaps. The exposure of the Group's borrowing to interest rate changes at the end of the reporting period are as follows: 20.44 (b) Liquidity risk management: The Group manages liquidity risk by maintaining sufficient cash and marketable securities and by having access to funding through an adequate amount of committed credit lines. Given the need to fund diverse businesses, the Group maintains flexibility in funding by maintaining availability under committed credit lines to meet obligations when due. Management regularly monitors the position of cash and cash equivalents vis-à-vis projections. Assessment of maturity profiles of financial assets and financial liabilities including debt financing plans and maintenance of Balance Sheet liquidity ratios are considered while reviewing the liquidity position. The Group's investment policy and strategy are focused on preservation of capital and supporting the Group's liquidity requirements. The Group uses a combination of internal and external management to execute its investment strategy and achieve its investment objectives. The Group typically invests in money market funds, large debt funds, Government of India securities, equity and equity marketable securities and other highly rated securities under a limits framework which governs the credit exposure to any one issuer as defined in its investment policy. The policy requires investments generally to be investment grade, with the primary objective of minimising the potential risk of principal loss. To provide a meaningful assessment of the price risk associated with the Group's investment portfolio, the Group performed a sensitivity analysis to determine the impact of change in prices of the securities that would have on the value of the investment portfolio assuming a 0.50% movement in debt funds and debt securities and a 5% movement in the NAV of the equity and equity marketable securities. Based on the investment position a hypothetical 0.50% change in the fair market value of debt securities would result in a value change of +/- 24.17 crore as at March 31, 2018 and +/- 33.07 crore as at March 31, 2017. A 5% change in the equity funds NAV would result in a value change of +/- 17.19 crore as at March 31, 2018 and +/- 19.39 crore as at March 31, 2017 respectively. The investments in money market funds are for the purpose of liquidity management only and are held only overnight and hence not subject to any material price risk. (c) Credit risk management: (i) Financial service business: Financial services business has a risk management framework that monitors and ensures that the business lines operate within the defined risk appetite and risk tolerance levels as defined by the senior management. Risk Management function is closely 443 (20.44) Notes forming part of the Consolidated Financial Statements (contd.) involved in management and control of credit risk, portfolio monitoring, market risks including liquidity risk and operational risks. The credit risk function independently evaluates proposals based on well-established sector specific internal frameworks, in order to identify, mitigate and allocate risks as well as to enable risk-based pricing of assets. Regulatory and process risks are identified, mitigated and managed by a separate Group. Risk management policies are made under the guidance of Risk Management Committee and are approved by Board of Directors." (ii) Other than financial service business: The Group's customer profile include public sector enterprises, state owned companies and large private corporates. Accordingly, the Group's customer credit risk is low. The Group's average project execution cycle is around 24 to 36 months. General payment terms include mobilisation advance, monthly progress payments with a credit period ranging from 45 to 90 days and certain retention money to be released at the end of the project. In some cases retentions are substituted with bank/ corporate guarantees. The Group has a detailed review mechanism of overdue customer receivables at various levels within organisation to ensure proper attention and focus for realization. (iii) Reconciliation of loss allowance provision for financial services business -Loans: Particulars Loss allowance measured at life time ECL Financial assets for which credit risk has increased significantly and credit not impaired 456.38 crore Financial assets for which credit risk has increased significantly and credit impaired 651.18 NOTE [56] (contd.) EURO Malaysian Canadian Japanese Ringgit Dollar (20.91) 20.91 (20.91) 20.91 crore Particulars Floating rate borrowings As at 31-3-2018 45476.71 As at 31-3-2017 37973.83 A hypothetical 50 basis point shift in respective currency LIBOR on the unhedged loans would result in a corresponding increase/decrease in interest cost for the Group on a yearly basis, as follows: crore Impact on profit and loss after tax Increase/(decrease) Particulars (20.44) 20.44 2017-18 Impact on equity - Increase/decrease) As at 31-3-2018 As at 31-3-2017 Indian Rupee Interest rates -increase by 0.50% in INR interest rate* Interest rates -decrease by 0.50% in INR interest rate* US Dollar (25.77) 25.77 (5.30) 5.30 (25.77) 25.77 (5.30) 5.30 Interest rates increase by 0.50% in USD interest rate* | Interest rates -decrease by 0.50% in USD interest rate* Holding all other variables constant 2016-17 life time ECL US Dollar including As at 31-3-2018 88.85 16.77 Total comprehensive income for the year (e) Carrying amount of investments in joint ventures/associates Non-material associates Non-material joint ventures Sub-total Material joint ventures Total Particulars (f) Share in profit/(loss) of joint ventures/associates (net) Non-material associates | Non-material joint ventures Sub-total Material joint ventures Total Particulars (g) Commitments and contingent liabilities in respect of associates and joint ventures/associates Particulars crore As at (6.63) 11.65 23.40 77.20 2016-17 2600.07 0.55 (356.59) (1330.80) 55.44 (506.40) (506.40) (0.79) (404.84) (0.08) (506.48) As at LARSEN & TOUBRO NOTE [55] (contd.) (d) Financial Information in respect of individually not material joint ventures/associates crore Particulars As at 31-3-2018 Aggregate carrying amount of investment in individually immaterial joint venture/associates Aggregate amounts of the Group's share of: 571.98 As at 31-3-2017 533.93 Profit/(loss) for the year Other comprehensive income for the year Notes forming part of the Consolidated Financial Statements (contd.) 31-3-2018 31-3-2017 77.10 Commitments to provide funding for joint venture's capital commitments, if called Contingent Liabilities-associates 116.85 3470.55 Share of contingent liabilities incurred jointly with other investors of the associate Contingent Liabilities-joint ventures: 24.49 24.49 Share of joint ventures' contingent liabilities in respect of a legal claim lodged against the entity 694.16 175.35 NOTE [56] Commitments-joint ventures Disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": Market risk management (a) Foreign exchange rate and interest rate risk: 441 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [56] (contd.) always coincide with the timing of gains and losses related to the underlying economic exposures and, therefore, may affect the Group's financial condition and operating results. Hence, the Group monitors the potential risk arising out of the market factors like exchange rates, interest rates, price of traded investment products etc. on a regular basis. For on balance sheet exposures, the Group monitors the risks on net unhedged exposures. (i) Foreign exchange rate risk: In general, the Group is a net receiver of foreign currency. Accordingly, changes in exchange rates, and in particular a strengthening of the Indian Rupee, will negatively affect the Group's net sales and gross margins as expressed in Indian Rupee. There is a risk that the Group may have to adjust local currency product pricing due to competitive pressures when there have been significant volatility in foreign currency exchange rates. The Group may enter into foreign currency forward and option contracts with financial institutions to protect against foreign exchange risks associated with certain existing assets and liabilities, certain firmly committed transactions, forecasted future cash flows and net investments in foreign subsidiaries. In addition, the Group has entered, and may enter in the future, into non-designated foreign currency contracts to partially offset the foreign currency exchange gains and losses on its foreign denominated debt issuances. The Group's practice is to hedge a portion of its material net foreign exchange exposures with tenors in line with the project/business life cycle. However, the Group may choose not to hedge certain foreign exchange exposures for a variety of reasons. The net exposure to foreign currency risk (based on notional amount) in respect of recognised financial assets and recognised financial liabilities and derivatives is as follows: 442 crore The Group regularly reviews its foreign exchange forward and option positions and interest rate swaps, both on a standalone basis and in conjunction with its underlying foreign currency and interest rate related exposures. The Group follows cash flow hedge accounting for Highly Probable Forecasted Exposures (HPFE) hence the movement in mark to market (MTM) of the hedge contracts undertaken for such exposures is likely to be offset by contra movements in the underlying exposures values. However, till the point of time the HPFE becomes an on balance sheet exposure, the changes in MTM of the hedge contracts will impact the Balance Sheet of the Group. Further, given the effective horizons of the Group's risk management activities which coincide with the durations of the projects under execution and could extend across 3-4 years and the business uncertainties associated with the timing and estimation of the project exposures, the recognition of the gains and losses related to these instruments may not Particulars crore As at 31-3-2017 As at 104.00 494.87 429.93 571.97 533.93 1915.62 2238.97 2487.59 2772.90 crore 31-3-2018 2017-18 18.67 11.34 58.53 12.06 77.20 23.40 (513.06) (418.67) (435.86) (395.27) 2016-17 38131.76 Discounted cash flow 38131.76 63.51 (12.10) (B) Net Investment hedge: NOTE [57] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) 453 3.47 | | | │ Liability Other financial liabilities Asset Other financial assets Non-current: Liability Other financial liabilities Asset Other financial assets Current: (iii) Option contracts Liability Other financial liabilities (15.69) 116.91 (ii) Swap contracts Current: Asset Other financial assets 66.58 (8.43) 127.37 crore (1.38) 12.57 20.60 Non-current: Asset Other financial assets 21.02 (3.65) Liability Other financial liabilities 1.39 As at 31-3-2018 Particulars Balance towards continuing hedges (11.45) reserve hedging reserve Cost of hedging As at 31-3-2018 Cash flow Particulars (1) Breakup of cash flow hedging reserve and cost of hedging reserve: 0.91 Asset Other financial assets Non-current: 2.15 Liability Other financial liabilities - 14.63 Asset Other financial assets Current: Currency Interest rate exposure exposure Commodity price Currency As at 31-3-2017 Interest rate exposure exposure price exposure exposure (i) Forward contracts Commodity Balance for which hedge accounting discontinued 63.21 Liability Other financial liabilities Lead (Tn) Zinc (Tn) Coking Coal (Tn) Iron Ore (Tn) Aluminium (Tn) 9.53 9.53 177153.00 10.99 10.99 160606.00 0.23 0.23 150777.00 19.76 19.76 222813.00 8.33 42.07 50.40 11494.00 33.91 months (crore) (crore) (193.29) 486405.65 (193.29) 266.11 138402.62 266.11 106.78 353806.93 27.96 119901.16 *Negative nominal amount represents sell position. 106.78 60.65 4055.89 60.65 71.66 3592.00 43.19 28.47 33.91 11958.33 27.96 98.81 (k) Carrying amounts of hedge instruments for which hedge accounting is followed: (A) Cash flow hedge: crore 3.34 (0.17) 408.33 (0.48) 219.76 Asset Other financial assets Non-current: (4.66) 559.96 23.19 197.60 Liability Other financial liabilities 29.03 (0.34) 630.41 25.18 (0.25) Currency exposure As at 31-3-2018 Interest rate exposure Commodity price Currency exposure As at 31-3-2017 Interest rate exposure Particulars Commodity exposure exposure (i) Forward contracts Current: Asset Other financial assets 538.62 price 240.83 208.39 (m) Reclassification of hedging reserve and cost of hedging reserve to Profit or Loss: Cash and cash equivalents Inventories and trade receivables Investments As at 31-3-2017 As at 31-3-2018 crore Particulars Current: Value of financial assets and inventories pledged as collateral for liabilities and/or commitments and/or contingent liabilities: NOTE [58] Closing balance (12.10) (11.45) (1.04) (0.52) Taxes related to above 198.94 359.62 crore Cost of hedging reserve 2017-18 2016-17 Opening balance 1202.00 11382.72 1257.08 (12.09) Changes in the forward element of the forward contracts where changes in spot element of forward contract is designated as hedging instruments for time period related hedges Less: Included in carrying amount of hedge item (5.33) (191.38) (3.39) Amount reclassified to Profit or Loss 6.49 (15.23) (218.59) 1400.63 10120.27 Loans Amount (crore) As % of consolidated profit or loss net assets Amount (crore) As % of consolidated Name of the entity liabilities Share in total comprehensive income Share in other comprehensive income Share in profit or (loss) Net Assets, i.e., total assets minus total Additional information pursuant to Schedule III to the Companies Act, 2013 for the year ended 31-3-2018: NOTE [59] Notes forming part of the Consolidated Financial Statements (contd.) 455 180.51 33892.24 26.10 26423.21 4579.09 2664.10 Other assets 650.94 848.83 Total inventories and current financial assets pledged as security 319.97 19071.83 Non-current: Loans Other assets Total non-current financial assets pledged as security 26397.11 33711.73 15353.80 (8.38) 449.22 (114.03) (255.20) (412.17) (267.43) Finance costs (264.00) (166.29) Manufacturing, construction and operating expenses 241.35 331.25 Revenue from operations 212.54 441.59 Progress Billing Hedged expected future cash flows affecting profit or loss: (10.47) (83.81) 0.52 Sales, administration and other expenses 454 1.47 63.75 crore As at 31-3-2017 Cash flow Cost of hedging hedging reserve 329.86 Other Income 29.76 Particulars * crore 2017-18 2016-17 Future cash flows are no longer expected to occur: Revenue from operations reserve 0.03 Sales, administration and other expenses 203.70 Changes in intrinsic value of option contracts (0.07) Changes in fair value of swaps Amount reclassified to Profit or Loss Amount included in non-financial asset/liability Amount included in Progress Billing in balance sheet 673.53 Taxes related to above (151.83) (67.87) (211.57) 183.49 1.24 (1.39) Closing balance twelve 719.83 (154.69) (34.78) LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [57] (contd.) (n) Movement of hedging reserve and cost of hedging reserve: crore Changes in fair value of forward contracts designated as hedging instruments Hedging reserve 2016-17 Opening balance 359.62 59.24 Changes in the spot element of the forward contracts which is designated as hedging instruments for time period related hedges (4.49) 2017-18 As % of consolidated other comprehensive income twelve After 283.28 70.88 70.88 (iii) Mutual fund 6,12 4385.66 4385.66 10244.89 10244.89 (iv) Debt instruments viz. government securities, bonds and debentures 6,7, 424.46 828.60 1253.06 202.33 35.65 895.35 1133.33 47.60 1029.03 1145.50 116.47 47.60 9,18 (vii) Other investments 65.55 designated as cash flow hedges 65.88 65.88 17.12 17.12 (v) Derivative instruments not designated as cash 9,18 flow hedges 12 (vi) Embedded derivative instruments not 204.77 217.73 (ii) Preference shares 16.56 Swedish Krona 63.51 9.63 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [57] (contd.) (f) Fair value hierarchy of financial assets and financial liabilities at fair value: crore Particulars Note As at 31-3-2018 As at 31-3-2017 Level 1 Level 2 Level 3 Total 799.20 751.20 48.00 842.10 740.79 101.31 6,12 6, 12 Financial assets at FVTPL: Financial assets: Total Level 3 Level 2 Level 1 (i) Equity shares 8.83 I 617.13 Financial Liabilities: Financial liabilities at FVTPL: (i) Designated at FVTPL: (a) Derivative instruments not designated as cash flow hedges 23,29 21.44 21.44 22.73 22.73 (b) Embedded derivative instruments not 23,29 47.11 I 47.11 133.20 133.20 designated as cash flow hedges Total 83.98 83.98 164.12 164.12 (b) Embedded derivative financial instruments 23,29 designated as cash flow hedges 14886.15 29385.75 designated as cash flow hedges 559.99 170.19 170.19 23,29 (a) Derivative financial instruments Designated at FVTOCI: 559.99 204.77 12268.04 2231.55 7761.15 617.13 Financial assets at FVTOCI (i) Debt instruments viz. government securities, bonds and debentures 6,7, 2849.72 2.10 1632.47 4484.29 1772.82 562.22 1348.50 3683.55 12 (ii) Loans (financial services business) 8,17 9208.41 9208.41 (iii) Derivative financial instruments designated as cash flow hedges 9,18 Total designated as cash flow hedges 3.21 3.21 8.72 8.72 1274.92 13504.85 22540.92 9,18 1359.82 1359.82 11203.09 11203.09 865.18 865.18 (iv) Embedded derivative financial instruments 16.56 Norwegian Krone 8.03 0.28% 20.72 (1.16%) (1.88) 0.25% 18.84 Larsen & Toubro ATCO Saudi LLC (0.81%) (448.24) (0.02%) (1.29) (1.39%) (2.26) (0.05%) (3.55) 0.26% General Contracting Company WLL 0.00% 0.00% 0.00% 0.00% Engineering Indonesia PT Larsen & Toubro Hydrocarbon (0.71%) (396.55) 8.75 (0.06) (0.04%) 8.81 0.12% (1.13) 0.00% 0.12% Larsen & Toubro Electromech LLC Larsen Toubro Arabia LLC rate (%) Within As at 31-3-2017 Average Nominal amount (crore) twelve months (crore) twelve (₹) months (crore) (crore) rate amount Particulars After Within As at 31-3-2018 Average Nominal Copper (Tn)* Commodity forward Contract: (iii) Outstanding commodity price hedge instruments: NOTE [57] (contd.) | Floating interest rate borrowings 773.58 7.48 Average Within After Nominal twelve twelve amount months months (*crore) (crore) (crore) 524.94 As at 31-3-2017 Average Within After (crore) rate twelve (%) months months (*crore) (crore) 248.64 2038.16 7.88 1107.12 931.04 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) twelve (0.21%) (114.48) 0.25% Saudi Riyal Receivable hedges As at 31-3-2017 Average Within After rate twelve twelve months months (crore) (crore) (₹) Average Within After Nominal rate twelve twelve amount (₹) months months (crore) (crore) (crore) (crore) Nominal amount Particulars As at 31-3-2018 (C) Forward covers taken to hedge exchange rate risk and accounted as net investment hedge: 138.13 64.85 138.13 Receivable hedges US Dollar As at 31-3-2017 Average Within After twelve twelve months months (crore) (crore) rate (₹) After Nominal twelve amount months (crore) (crore) 8.74 7.00 1.02 9.56 8.80 6.10 US Dollar 3.46 As at 31-3-2018 Particulars Nominal amount rate (crore) Average Within twelve months (*crore) (B) Options taken to hedge exchange rate risk and accounted as cash flow hedge: 187.39 28.73 17.43 187.39 (0.02) (0.02%) (0.22) 0.00% (0.36) 0.00% 0.00% (Shanghai) Co., Ltd. IT & Technology Services: 17.64 0.23% (1.02) (0.63%) 18.66 L&T Information Technology Services rate (₹) months (0.24) Technologies Inc. 785.74 19.44 27.79 757.95 71.83 28.73 L&T Infotech Financial Services (ii) Outstanding interest rate hedge instruments: As at 31-3-2018 Nominal Particulars amount 200.22 0.36% Interest rate swaps taken to hedge interest rate risk and accounted as cash flow hedge: 402.86 Amount (crore) Amount (crore) Nabha Power Limited 5.66% 3147.54 3.33% 245.17 2.23% 3.62 3.30% 248.79 Realty: Chennai Vision Developers Private Limited 0.00% 0.00% 0.00% 0.00% L&T Asian Realty Project LLP 1.51% 82.34 1.09% 0.00% 82.34 1.12% 136.73 0.01 0.25% (4.00) (0.05%) 0.00% (4.00) (0.05%) 838.18 L&T Parel Project LLP L&T Realty Limited 0.00% 0.01 (1.07%) (80.50) Power Development: L&T Arunachal Hydropower Limited 0.07% 40.58 0.00% (0.01) 0.00% 0.00% (0.01) L&T Himachal Hydropower Limited 0.36% 199.77 0.00% (0.01) 0.00% 0.00% 1072.55 1.93% L&T Uttaranchal Hydropower Limited 0.19 0.00% 0.00% 0.00% 0.00% 3116.06 5.60% L&T Power Development Limited (0.01) 0.00% 0.19 0.05 L&T Seawoods Limited 1.95% 4.47 (0.03%) (2.07) 0.00% (0.03%) (2.07) Valves, Welding Equipment, Construction Equipment and Others: L&T Construction Equipment Limited 1.33% 740.78 6.91% 509.40 0.76% 1.24 6.78% 510.64 1.85% (31.40) (0.43%) 575.18 1.03% L&T Valves Limited 0.01% 8.88 (0.05) (0.03%) 8.93 0.12% 0.00% L&T Cutting Tools Limited 0.12% L&T Vision Ventures Limited L&T Electricals and Automation Limited 0.00% 1087.10 0.29% 21.15 0.00% 0.28% 21.15 5.44% 3027.95 0.37% 26.96 0.03% 0.05 0.36% 27.01 (0.01%) (4.63) 0.00% 0.00% 0.01 0.00% Seawoods Retail Private Limited 0.00% 0.00% 0.00% 0.00% 0.00% Seawoods Realty Private Limited (0.01) 0.00% 0.00% (0.01) 0.01 0.03% (80.55) (1.09%) 138.29 (0.06%) (0.09) 1.83% 138.20 L&T Investment Management Limited 0.98% 546.13 0.40% 29.10 (0.70%) (1.14) 0.37% 27.96 L&T Mutual Fund Trustee Limited 0.00% 1.53 0.00% 63.65 0.11% L&T Financial Consultants Limited 0.01 0.00% 0.00% 1.88% 0.01 0.00% L&T Trustee Company Private Limited (0.06) 0.00% 0.00% (0.06) 0.00% 0.27% 3585.22 Limited 0.43 2.29% 172.78 L&T Infra Debt Fund Limited 1.67% 929.73 1.89% 138.96 (0.02%) (0.04) 1.84% 138.92 L&T Infra Investment Partners Advisory Private Limited 0.03% 15.47 0.03% L&T Infrastructure Finance Company (0.01) 0.00% 0.00% (0.01) 0.00% 6.44% 0.05 Private Limited L&T Infra Investment Partners Trustee 2.42 0.03% 0.00% 2.42 0.00% 19.69 0.00% 0.26% 0.00% 0.00% 0.00% 0.00% 456 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [59] (contd.) Net Assets, i.e., total assets minus total Share in profit or (loss) Share in other comprehensive income Share in total comprehensive income liabilities Name of the entity As % of consolidated net assets Amount (crore) As % of consolidated profit or loss 320.53 0.58% Marine Infrastructure Developer Private Limited income income comprehensive Sahibganj Ganges Bridge-Company Private Limited total (*crore) Amount As % of consolidated Amount (crore) As % of consolidated Amount (crore) other comprehensive (39.21) (0.52%) 19.15 116.26 1.58% 8311.81 14.93% L&T Finance Limited (5.68) (0.88%) (0.08%) (5.68) (0.08%) (19.31) (0.03%) Mudit Cement Private Limited 19.69 0.00% 3.00 (1.43) 114.83 11.80% (58.36) (0.79%) 3.84% 2136.91 L&T Metro Rail (Hyderabad) Limited Developmental Projects: 1.52% 52.51 0.00% 52.51 0.71% 496.45 0.89% L&T Infra Investment Partners (The Fund) 0.70% As % of consolidated (0.38%) EWAC Alloys Limited 32.40 0.44% 53.00 0.10% L&T Capital Markets Limited Financial Services: 0.13 0.00% 0.02 0.01% 0.11 0.00% 0.56 0.00% Esencia Technologies India Private Limited 0.19 0.00% (0.26) 0.03% 2.27 0.11% 0.18 0.03% (0.31%) 2.45 Limited 0.00% 1.37 0.00% 0.19 0.00% Syncordis Software Services India Private 0.00% (0.50) 31.90 (1.25) L&T Modular Fabrication Yard LLC (0.06%) (35.07) 0.43% 32.03 0.01% 0.01 0.43% 32.04 L&T Overseas Projects Nigeria Limited 0.00% 0.01 0.00% 0.00% (0.00) 0.00% L&T Finance Holdings Limited 13.81% 7685.66 3.61% 266.05 0.38% 0.42% 0.62 266.67 L&T Housing Finance Limited 2.46% 1369.43 2.34% (0.00) 3.54% (0.02) (0.02%) Limited 511.07 0.02% 40.19 0.07% L&T Infrastructure Engineering Limited 31.09 0.41% 1.83 0.02% 0.00% 0.00% 31.09 0.42% 63.21 0.11% L&T Geostructure LLP 1.83 0.03% 11.04 total comprehensive income 88.35% 49174.26 73.10% 5387.30 (31.38%) (50.94) 1.47 70.85% Parent Company Larsen and Toubro Limited Indian Subsidiaries Infrastructure: Hi-Tech Rock Products and Aggregates Limited 0.02% 5336.36 L&T Thales Technology Services Private (0.17%) 0.02% 6.79% 1060.71 14.08% (99.41) 21.69 1160.12 (61.24%) 489.38 13.36% 15.74% 6.64% 1965.34 3.53% L&T Technology Services Limited 6.68% 3718.58 Larsen & Toubro Infotech Limited IT & Technology Services: 537.48 7.14% 131.86 81.23% 405.62 1.19 Heavy Engineering: L&T Cassidian Limited 0.00% 0.00% (0.03) (0.28) 0.00% (0.03) Hydrocarbon: L&T Hydrocarbon Engineering Limited 3.61% 2009.85 5.50% 0.00% (0.01%) (1.23) (0.02%) 0.00% 0.00% L&T Aviation Services Private Limited 0.06% 35.43 L&T Capital Company Limited 0.03% 16.00 (0.01%) 0.08% L&T Infra Contractors Private Limited 0.00% 0.00% (0.01) (0.91) (0.04%) 5.95 0.00% 0.00% (0.06) (0.01%) (0.97) 0.27% 20.76 12.79% (0.46) (0.01%) 392.61 0.00% 0.71% Infrastructure: Foreign Subsidiaries (0.01) 0.00% 5.95 0.08% Larsen & Toubro (Oman) LLC 20.30 (0.26) Limited 0.00% 0.29% 21.35 0.00% (0.01) 0.28% 21.34 Shipbuilding: L&T Shipbuilding Limited (1.45%) (809.15) (5.99%) (441.36) 15.14% 24.58 (5.53%) (416.78) Others: Kesun Iron & Steel Company Private 0.20 0.00% 0.00% 0.20 0.00% 0.00% 0.00% 5.04 0.01% L&T Power Limited 0.05 0.00% Bhilai Power Supply Company Limited 0.00% 0.00% Larsen & Toubro Qatar LLC 0.00% 0.48 458 Net Assets, i.e., total assets minus total Share in profit or (loss) Share in other comprehensive income Share in total comprehensive income liabilities Name of the entity As % of consolidated Amount crore) net assets As % of consolidated profit or loss Amount (crore) As % of consolidated other comprehensive income Amount (*crore) As % of consolidated Amount (crore) total comprehensive income (2.31) 0.00% International Limited LLC Larsen & Toubro Hydrocarbon Hydrocarbon: (139.05) NOTE [59] (contd.) (1.85%) (1.06%) (1.86%) (137.34) (190.74) (0.34%) Larsen & Toubro Heavy Engineering LLC Heavy Engineering: (1.71) Notes forming part of the Consolidated Financial Statements (contd.) 457 (8.48) 3.11% 12.97 7.99% 221.21 3.00% 611.65 234.18 1.10% (0.08) 0.00% 0.00 0.00% (0.08) 0.00% Larsen & Toubro Saudi Arabia LLC (28.40) Larsen & Toubro T&D SA (Proprietary) 0.01% (0.11%) 0.00% (8.48) (0.12%) 0.00% Concrete Industries LLC Limited Larsen & Toubro Readymix and Asphalt 0.01% 0.41 0.26% 0.20 0.00% 3.23 0.61 402.86 Larsen & Toubro Kuwait Construction 799.90 417.42 74.49 417.42 Swiss Franc 786.31 220.22 786.31 760.92 219.15 760.92 Kuwaiti Dinar 304.11 845.92 0.72 1150.03 337.91 0.62 0.75 7.24 18.11 7.24 British Pound 75.61 279.05 91.99 24.08 23.18 84.46 23.18 Japanese Yen 337.91 51.53 67.45 279.05 Chinese Yuan 0.01% 2.81 0.00% 0.29 (0.02%) (0.03) Larsen & Toubro Infotech LLC 0.00% Larsen and Toubro Infotech South Africa (PTY) LTD 0.01% 5.03 0.02% 1.60 0.26 17.86 3.70 0.33 26.03 10.32 0.52% 38.63 (0.28%) (0.46) 0.05% 0.51% Larsen & Toubro Infotech Canada Limited 0.02% 10.95 0.05% 3.37 0.21% 38.17 0.75 Arab Emirates Dirham 146.78 9.87 Norwegian Krone 16.91 9.39 16.91 Thai Baht 12.34 1.43 1.43 Swedish Krona 27.03 9.32 27.03 451 2.12 Notes forming part of the Consolidated Financial Statements (contd.) 9.87 60.02 South African Rand 102.69 5.40 102.69 1424.98 1184.17 40.62 139.95 0.66 224.64 1401.83 15.58 1061.92 Danish Krone 467.82 23.15 122.25 50.78 40.62 5.13 79.93 377.68 0.39% NOTE [57] (contd.) As at 31-3-2018 13132.22 67.43 7440.61 5691.61 9966.62 63.31 8641.16 1325.46 US Dollar EURO 80.88 4884.77 69.75 4103.84 73.31 3957.06 4954.52 452 (b) Payable hedges twelve Nominal Average Within Particulars amount rate months (crore) twelve months 799.90 After Nominal twelve amount months (crore) (crore) As at 31-3-2017 Average Within rate (₹) months (*crore) (crore) After twelve (₹) 25.90 0.63 2.23 (0.03%) 0.02 0.01% (2.59) 7.34 (0.04%) 0.01% L&T Realty FZE Realty: 19.61 0.26% 0.14 0.08% 19.47 0.26% 12.82 0.02% Esencia Technologies Inc. (0.01) 0.00% (0.01) 0.00% 0.00% (0.01) Syncordis PSF S.A. (2.57) 0.00% 0.00% (0.04) 0.01% 0.01 0.00% (0.03) 0.18 Electrical & Automation: Henikwon Corporation Sdn. Bhd. (0.02%) 0.96 0.49% 36.78 L&T Electricals & Automation Saudi Arabia Company Limited (0.02%) (2.56) (12.38) (7.84) (0.06%) (0.11) (0.11%) (7.95) 26.03 (0.11%) 0.00% (0.03%) (2.49) (0.05%) 35.82 0.59% (11.63) (0.01%) (0.90) (0.91%) (1.48) (0.03%) (2.38) (0.07) Kana Controls General Trading and (0.01%) (3.63) L&T Electrical & Automation FZE 0.27% 151.53 (0.03%) 0.49% Contracting Company WLL Syncordis Limited (0.44) (0.01%) L&T Information Technology Spain SL 0.01% 3.29 0.02% 1.17 0.24% 0.24 0.39 1.56 Larsen & Toubro LLC 0.00% 2.42 0.00% 0.01 0.02% 0.00% 0.00% 0.06% Larsen & Toubro Infotech GmbH 0.25% 141.25 0.01% 0.85 0.31% 0.09 0.51 1.36 Larsen & Toubro Infotech Austria GmbH 0.00% 0.72 0.00% 0.15 0.02% 0.03% 0.00 0.01 0.03% 15.40 0.08% 5.77 0.40% 0.65 Syncordis S.A. Luxembourg 0.09% Syncordis France SARL 0.01% 5.39 (0.01%) (0.76) 0.20% 0.32 6.42 0.00% 0.31 0.00% L&T Technology Services LLC 0.10% 56.62 0.06% 4.07 0.39% 0.00% 0.63 4.70 L&T Infotech S. DE R.L. DE C.V. 0.00% 0.32 0.00% 0.31 0.06% 56.32 (* crore) Australian Dollar 193.81 36.44 230.25 313.26 111.28 424.54 739.52 84.16 823.68 Details of outstanding hedge instruments for which hedge accounting is followed: Outstanding currency exchange rate hedge instruments: (i) (A) Forward covers taken to hedge exchange rate risk and accounted as cash flow hedge: As at 31-3-2018 Nominal Average Particulars amount (crore) rate (₹) Within twelve months (crore) After Nominal twelve amount months (crore) (crore) 25.90 As at 31-3-2017 Average 225.79 89.29 136.50 23,29 Total twelve After twelve month Total month A. Non-derivative liabilities: Borrowings Trade payables 22,26,27 28 Other financial liabilities Total 23,29 36008.78 87432.40 123441.18 37030.83 764.44 37795.27 3142.21 1730.27 4872.48 76181.82 89927.11 166108.93 27643.99 Within 79975.57 107619.56 1450.36 30297.14 194.69 4563.54 81620.62 142480.24 B. Derivative liabilities: Forward contracts Embedded derivatives Total 23,29 176.76 21.99 198.75 545.71 47.72 593.43 28846.78 4368.85 60859.62 After rate (₹) months twelve 18.11 1411.17 3.81 1229.22 17.59 1029.47 199.75 Canadian Dollar 56.96 56.96 56.96 34.97 52.43 34.97 1414.98 British Pound 97.34 68.97 70.50 90.97 70.50 Japanese Yen 923.19 0.65 889.42 Kuwaiti Dinar 2039.77 222.73 1698.31 68.97 After twelve month Arab Emirates Dirham 309.74 twelve months (*crore) (crore) (a) Receivable hedges US Dollar 15955.20 EURO 1823.48 Malaysian Ringgit 138.38 Omani Riyal 301.94 15.01 69.64 85.20 17.07 179.55 5712.01 13970.76 613.33 1439.43 70.07 8620.33 5350.43 83.83 916.91 522.52 331.20 14.86 331.20 324.75 172.04 10243.19 1210.15 138.38 301.94 Qatari Riyal twelve month Within (14.84) (5372.28) (7.74) (5457.36) Gains/(losses) recognised in Profit or Loss (0.95) (30.26) 105.06 (15.62) 58.23 Balance as at 31-3-2017 751.20 70.88 2243.85 11203.09 617.13 14886.15 Addition during the year 143.66 1714.92 6962.71 438.36 9259.65 Disposal during the year (163.17) (62.50) Disposal during the year 7116.00 13169.28 Total Valuation technique and key inputs used to determine fair value: A. Level 1: Mutual funds, bonds, debentures and government securities - quoted price in the active market B. Level 2: (a) Derivative Instruments - Present value technique using forward exchange rates at the end of reporting period. (b) Preference share - Future cash flows are discounted using G-sec rates as at reporting date. 449 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [57] (contd.) (g) Movement of items measured using unobservable inputs (Level 3): crore Equity shares Gains/(losses) recognised in Profit or Loss Preference shares Debt instruments Loans Balance as at 1-4-2016 498.63 157.62 Addition during the year 253.52 6.02 858.17 1295.46 5372.28 11203.09 Other Investments 229.30 411.19 Particulars Balance as at 31-3-2018 9.10 740.79 (5.33) 65.55 11203.09 Market interest rates Other Investments 1029.03 617.13 Net Assets Value (NAV) 2018: Increase/decrease of 5% in the book value would result in impact on profit or loss by * 24.48 crore 2017: Increase/decrease in the book value by 5% would result in impact on profit or loss by * 24.95 crore 2018: 1% change in net realization would result in +/- 0.38 crore (post tax-0.25 crore) 25 bps change in capitalization rate would result in +/- 0.78 crore (post tax-0.51 crore) 2017: 1% change in net realization would result in +/- 0.31 crore (post tax-0.20 crore) 25 bps change in capitalization rate would result in +/- 0.64 crore (post tax- 0.42 crore) Sensitivity is insignificant 2018: Increase/decrease in the book value by 5% would result in impact on profit or loss by * 3.07 crore 9208.41 2017: Increase/decrease in the book value by 5% would result in impact on profit or loss by * 3.27 crore 2017: Increase/(decrease) in market interest rates by 0.25% would result in impact on fair valuation by (31.31 crore) and 32.09 crore respectively 2018: Increase/decrease in the NAV by 5% would result in impact on profit or loss 33.65 crore 2017: Increase/decrease in the NAV by 5% would result in impact on profit or loss 20.18 crore LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [57] (contd.) (i) Maturity profile of financial liabilities based on undiscounted cash flows: Particulars crore Note As at 31-3-2018 As at 31-3-2017 2018: Increase/(decrease) in expected yield by 0.25% would result in impact on fair valuation by 43.65 crore and (43.63 crore) respectively 2017: Increase/(decrease) in expected yield by 0.25% would result in impact on fair valuation by 36.20 crore and (36.13 crore) respectively 2018: Increase/(decrease) in market interest rates by 0.25% would result in impact on fair valuation by (24.24 crore) and 24.73 crore respectively Within Loans 2461.07 (1474.61) (23.09) 2461.07 (8957.39) (9.61) (10604.78) (16.85) (36.17) 9208.41 1029.03 13504.85 (h) Sensitivity disclosure for level 3 fair value measurements: 450 Particulars 2243.85 Expected yield Fair value as at As at As at Significant unobservable 31-03-2018 31-03-2017 inputs 655.47 674.21 Book value Sensitivity 64.27 Equity shares 55.94 1. Lease realisation: Net realization per month * 30 per sq/ft. 2. Capitalisation rate 12%" Preference shares 21.05 65.55 21.05 Cost 70.88 Book value Debt instruments crore 1476.18 172.35 845.50 18.55 1253.61 33.77 341.46 222.57 50.65 31-Mar-18 USD 65.18 31-Dec-17 OMR 165.91 31-Mar-18 EURO 80.81 31-Mar-18 USD 65.18 31-Mar-18 EURO 80.81 USD 65.18 Exchange rate on the last day of 31-Dec-17 EURO Currency 31-Mar-18 31-Mar-18 Financial year ending on Limited ZAR 5.58 76.53 Date of Acquisition Inc. 06-Sep-10 1 Share capital (including share application 4.18 26-Jun-14 97.83 18-Jun-15 0.28 24-Feb-16 52.14 01-Feb-16 0.40 29-Jan-94 24.18 31-May-17 27.96 15-Dec-17 0.27 money pending allotment) financial year S.A. & Toubro Technologies (Oman) LLC Technology Spain, S.L. 0.03 117.56 20.53 1923.91 100.00 100.00 70.00 100.00 49.00 Sr. No. Sr. Particulars 73 Larsen 74 L&T no. and Toubro Technology T&D SA Services LLC Limited Austria GMBH LLC Propreitary Holdings Information Syncordis 80 2 79 Esencia L&T L&T Global 78 77 76 75 L&T Infotech Larsen Other equity/Reserves and surplus (as (0.95) (41.21) 38.96 1117.89 0.03 1.01 164.08 2.95 64.77 2955.17 118.65 106.12 Profit before taxation 0.20 4.29 0.19 (47.37) 1.66 11.55 4.07 0.20 Profit after taxation 10 4.29 8.62 29.77 (0.07) 0.05 0.22 Provision for taxation 9 17.60 28.08 0.49 3214.30 22.48 1275.14 19.15 1306.85 0.17 141.52 0.32 Liabilities 2927.42 3456780 11.78 (15.13) 262.70 2.93 (83.84) 0.43 applicable) 335.26 16.94 Total equity and liabilities 0.89 198.13 3.55 Turnover Investments Total assets 26.92 38.96 3214.30 22.48 1275.14 0.89 198.13 3.55 29.77 0.14 1923.91 117.56 63 Larsen & Projects & Automation Toubro Kuwait Toubro (Saudi 64 Larsen Toubro Arabia LLC Nigeria Limited Saudi Arabia Construction Arabia) LLC Company Limited LLC General Contracting Company, W.L.L Financial year ending on 31-Dec-17 Currency OMR Exchange rate on the last day of 165.91 31-Mar-17 MYR 14.65 Pty Ltd. 47.86 Share capital (including share application 1 05-Jul-06 Date of Acquisition 62 Larsen & financial year 31-Mar-18 SAR 17.38 KWD 211.58 31-Dec-17 31-Mar-18 SAR 17.38 31-Dec-17 NGN 0.18 31-Dec-17 QAR 17.54 31-Dec-17 SAR 17.03 L&T Electrical 100.00 100.00 Proposed dividend - equity Interim dividend preference (40.18) Interim dividend equity 11 2.90 Proposed dividend - preference (0.25) 65.92 40.59 40.59 ww22 (0.13) (1.78) 2.65 13-Jun-96 1.10 % of share holding 82.96 100.00 100.00 61 60 L&T Overseas 59 Larsen & Toubro Qatar LLC 58 Larsen & Toubro (East Asia) SDN. BHD L&T Modular Fabrication Yard LLC 18 no. Sr. 57 Sr. No. 100.00 82.96 62.14 Particulars 31-Mar-04 0.35 15-Jul-04 0.18 Proposed dividend - preference % of share holding 15 14 13 Proposed dividend - equity Interim dividend preference 12 222g Interim dividend equity 9.19 Profit after taxation 10 Provision for taxation 9.19 Profit before taxation 11 501.32 2.81 (0.03) 0.03 729.70 1312.27 19.66 129.27 0.02 (0.14) 100.00 8 49.00 30.00 70.00 (0.03) (0.14) 233g 20.53 Turnover Investments 586.66 (41.44) (42.99) (0.17) 0.16 (1.32) (411.48) (46.79) 2 money pending allotment) 01-Jul-12 17.03 22-Jun-99 24.98 29-Nov-06 42.32 22-Aug-06 31.28 Other equity/Reserves and surplus (as 0.18 applicable) Liabilities 4.59 4.04 278.58 Total assets 4.59 4.04 3 278.58 4567∞∞2=2345 9 8 4.07 4.26 277.51 Total equity and liabilities (47.37) 1.17 11.62 92 93 Sr. Particulars no. L&T - MHPS Turbine Raykal L&T Special L&T L&T Sapura Aluminium Steels and Howden Offshore 94 L&T Kobelco 95 96 Limited Forgings Systems Private Machinery Private 91 Private Company Private Limited Private Limited Generators Missile L&T MBDA L&T Sapura Shipping Heavy 90 89 Sr. No. 9.82 16.30 0.12 (0.04) (0.01) 2.73 5.39 Profit after taxation 126.70 2.12 1.34 0.68 0.11 1.32 01231 Limited 241.47 Interim dividend preference 51.00 50.0002 50.0001 70.00 82.96 82.96 Interim dividend equity 82.96 82.96 % of share holding 15 Proposed dividend - preference 14 Proposed dividend - equity 2 Private Limited Limited 0.97 2482.86 Total equity and liabilities 0.01 380.99 36.22 1495.39 5.94 2093.96 0.63 2220.43 Liabilities 3456 applicable) 131.57 (0.02) 202.76 76.35 5.73 150.32 Investments 0.04 852.74 76.35 6.70 6.70 1495.39 0.97 2482.86 Total assets 0.04 852.74 202.76 Provision for taxation 312.90 0.74 1 01-Jul-09 23-Feb-99 27-Dec-06 Date of Acquisition financial year Share capital (including share application Exchange rate on the last day of 31-Mar-18 31-Mar-18 31-Mar-18 31-Mar-18 31-Mar-18 Limited Private Limited 31-Mar-18 31-Mar-18 31-Mar-18 Financial year ending on Currency (9.87) 710.60 566.60 41.19 (1165.17) 0.29 (448.17) Other equity / Reserves and surplus (as 2 0.05 money pending allotment) 02-Sep-10 158.85 50.00 0.01 25-Nov-10 02-Sep-10 17-Jun-10 30.00 05-Apr-17 0.05 9 368.17 7.51 L&T - MHPS L&T - Gulf L&T - Sargent 88 87 86 and Lundy 85 Larsen and Toubro Electromech L&T Syncordis Support Services S.A. 31-Dec-17 31-Mar-18 GBP 92.28 EURO 76.53 Exchange rate on the last day of Currency Infotech S. DE R.L. DE C.V. 31-Dec-17 Private Limited Private 15-Dec-17 15-Dec-17 Date of Acquisition financial year - 31-Mar-18 Boilers 31-Mar-18 Limited Limited LLC 31-Dec-17 OMR 165.91 MXN 3.24 EURO 76.53 31-Dec-17 31-Mar-18 1 Financial year ending on Syncordis 88.64 72.50 % of share holding Proposed dividend - preference 45 15 82.96 14 Interim dividend preference 12 Interim dividend - equity 11 13.31 19.47 13 Proposed dividend - equity Limited 100.00 65.00 84 83 82 81 Syncordis France SARL no. Particulars 82.96 Sr. Part A: "Subsidiaries” [as per Section 2(87) of the Companies Act, 2013] (contd.) crore Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures 467 82.96 88.64 Sr. No. (107.82) Share capital (including share application 0.01 38.12 Investments 4280.86 35.30 93.61 261.39 1.36 3.88 0.01 15.23 Total assets 4280.86 35.30 93.61 0.38 261.39 578.43 Turnover 11.16 16.98 0.23 (0.04) (0.01) 4.05 7 Profit before taxation 2966.52 25.75 95.06 320.47 5.08 28.55 8 0.11 3.88 0.01 (0.04) (0.02) 5.48 Other equity/Reserves and surplus (as 2 money pending allotment) 0.11 234.10 11-Jan-08 8.00 05-May-95 5.57 01-Jan-05 4.98 0.00 01-Mar-17 15-Dec-17 0.23 09-Oct-06 0.38 (126.40) 20.96 15.23 Total equity and liabilities 3095.20 6.34 28.02 382.82 60.02 3.77 0.02 9.64 Liabilities 3456 applicable) 951.56 0.19 5.58 (2.54) 38.60 & Toubro 48 Larsen 47 Larsen 46 Larsen 45 Larsen & Toubro LLC 44 Syncordis Software Services Esencia 43 42 L&T Infra Marine 41 100.00 100.00 65.60 100.00 100.00 88.64 Proposed dividend preference 15 % of share holding Sr. No. Sr. GOO & Toubro Particulars Infrastructure Developer Contractors Technologies Private India Private Limited & Toubro 100.00 100.00 no. Private Limited India Private USD 65.18 financial year Date of Acquisition 22-Jan-16 17-Mar-17 31-May-17 31-Mar-18 11-Dec-17 Share capital (including share application 400.00 0.01 0.01 0.45 02-Jan-01 0.34 1 14 31-Mar-18 CAD 50.65 31-Mar-18 USD 65.18 Infotech, GmbH Infotech Infotech LLC Limited Financial year ending on 31-Mar-18 31-Mar-18 EURO 80.81 31-Mar-18 Limited 31-Mar-18 Canada Limited Currency - Exchange rate on the last day of - 31-Mar-18 13 Proposed dividend - equity (60.90) Interim dividend preference 8875.90 Total assets 11095.71 13643.14 2592.94 1315.51 0.01 71.73 0.01 8875.90 Investments 322.45 24.38 1.33 56.40 1370.59 56.40 31-Mar-18 AED 17.75 0.25 189.94 Share capital (including share application money pending allotment) 1 25-Jul-12 01-Jan-11 CNY 9.82 Date of Acquisition 92.28 GBP 31-Mar-18 31-Mar-18 GBP 92.28 31-Dec-17 SAR 17.03 31-Mar-18 USD 65.18 financial year 14-Jun-99 0.40 Turnover 1408.71 (0.61) 235.73 10 Profit after taxation 245.17 (58.36) 489.38 1.16 509.40 2.27 405.62 11 Interim dividend equity (81.70) 12 1.47 3778.16 141.08 37.31 3506.60 1151.50 59.04 73.55 11044.35 Profit before taxation 191.67 282.48 681.05 650.48 2.63 1.66 641.35 Provision for taxation (58.36) 28-Jun-13 1.06 25-Apr-00 money pending allotment) Sr. Sr. No. crore Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] (contd.) 465 16 (8.83) 12 82.96 82.96 82.96 99.19 82.96 88.64 100.00 0.32 3.55 0.71 0.04 4.31 4.83 0.32 0.15 Particulars 0.18 3.03 1.28 0.47 0.53 0.01 1.27 0.03 no. 49 L&T Infotech Financial Services South Africa Inc. (PTY) Limited Services (Shanghai) Co., Ltd. FZE International Limited LLC Technologies Financial year ending on 31-Mar-18 31-Dec-17 Currency CAD ZAR Exchange rate on the last day of 31-Mar-18 0.62 Limited Servowatch Systems 50 Larsen & Toubro Infotech 51 L&T Information Technology 52 53 54 Hydrocarbon 55 L&T Realty FZE Larsen & Toubro International Larsen & Thalest Toubro Limited 56 8ere 811 97.00 138.83 31.10 0.68 Total equity and liabilities 1886.81 0.01 1.72 0.88 4.13 291.55 42.23 3.52 Total assets Investments 1.62 1886.81 0.26 0.00 2 Other equity/Reserves and surplus (as (79.47) (0.01) 0.55 0.92 0.32 2.08 11.13 2.84 applicable) 3456 D∞ Liabilities 1566.28 152.31 21-Jul-09 0.01 1.62 10 Profit after taxation (82.27) (0.01) 11 Interim dividend equity Provision for taxation 12 13 Proposed dividend equity 14 Proposed dividend - preference 15 % of share holding Interim dividend preference 0.88 9 (82.27) 4.13 291.55 42.23 3.52 7 Turnover (0.01) 3.78 3.31 86.12 110.16 6.79 8 Profit before taxation 4.36 27-Jan-08 15.97 25-Sep-01 1788.08 17-Jun-13 0.85 433.13 (22.51) (74.78) (45.52) (8.89) 176.36 (5.28) applicable) 8 9 345670002=2345 Liabilities 679.26 263.51 24.52 17.27 105.80 241.29 Total assets 27.49 387.48 195.67 72.47 (439.67) 24.93 865.31 241.29 || Total equity and liabilities 30.60 209.35 110.57 12.89 Other equity/Reserves and surplus (as 2 money pending allotment) 31-Mar-18 AED 17.75 31-Dec-17 OMR 165.91 31-Dec-17 IDR 0.00 31-Mar-18 AUD 50.05 31-Mar-18 MYR 16.87 31-Mar-18 MYR 16.87 31-Mar-18 SAR 17.03 Currency 31-Dec-17 Financial year ending on W.L.L Company Trading & Contracting Exchange rate on the last day of 865.31 KWD 217.83 Date of Acquisition 2.18 10-Sep-13 04-Apr-08 1.77 07-Apr-08 93.99 23-Apr-08 12.19 23-Apr-08 82.44 financial year 10.88 1.70 253.22 1 03-Jul-12 29-May-07 08-Jul-07 168.68 12.89 24.93 72.47 28.17 100.00 100.00 100.00 % of share holding 15 1.34 Proposed dividend - preference 13 Proposed dividend - equity Interim dividend preference 12 Interim dividend equity 11 (2.14) 14 32.91 0.04 812345 Profit after taxation 10 0.98 0.76 16.19 Provision for taxation 9 (0.13) (107.82) (2.54) 2.52 54.79 Profit before taxation 15 (0.79) FZE (131.16) (3.77) Profit before taxation 29.36 430.27 49.12 59.42 2.74 0.42 42.11 52.53 Turnover Investments 27.49 387.48 195.67 500.58 2.32 21.99 (3.77) (0.96) 15.47 (0.61) 10 Profit after taxation 0.34 (5.27) (0.96) 0.40 1.03 Provision for taxation (2.14) 33.25 (136.43) 2.71 6.52 General Kana Controls Electrical & Automation LARSEN & TOUBRO 466 75.00 2 100.00 49.00 Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures 118 100.00 (85.44) 221.21 1.61 (8.71) 67.46 g (85.44) Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] (contd.) Sr. No. 72 71 70 Larsen 69 PT. Tamco Indonesia Electrical Tamco crore Tamco Henikwon Switchgear Corporation (Malaysia) Sdn. Bhd. 67 66 65 Larsen & Toubro ATCO Saudia LLC no. Sr. Particulars GOO 68 L&T 288.67 (8.71) 3455 applicable) (41.67) 6.83 (2.99) (1017.69) Liabilities (8.35) 4.92 10.28 2 Other equity/Reserves and surplus (as 23.53 04-Apr-12 04-Apr-12 1.23 (1.28) 1.61 38.52 1.98 386.30 1902.62 79.34 335.26 1013.77 7.71 15.86 1.76 238.73 | Total equity and liabilities 58.73 6.50 243.39 0.09 21.02 1.75 Sdn. Bhd. Australia Provision for taxation 2.69 14.31 0.36 10 Profit after taxation 9 57.52 (270.30) 13.04 0.10 5.90 6.63 (0.02) (0.03) 11 (0.02) 5.90 & Toubro Heavy Engineering LLC 963.29 127.87 234.86 8 Profit before taxation 6.99 60.21 (270.30) 27.35 0.10 | O 78.94 122.17 (0.03) Industries Interim dividend equity 12 7 568.23 Investments 6 8.06 4.35 Turnover 1013.77 1.76 21.02 238.73 Total assets 8.06 4.35 7.71 2345 468 51.00 Interim dividend preference 13 Proposed dividend - equity 14 Proposed dividend - preference 15 81 % of share holding 75.50 74.00 50.10 60.00 51.00 60.00 51.00 Share capital (including share application Turnover 1315.51 Total 1 Trade payables 37029.04 23 Other financial liabilities As at 31-3-2018 Within After twelve twelve months months Other current liabilities Provisions 4817.16 22580.97 2321.76 765.92 37794.96 31.83 4848.99 4746.00 27326.97 161.99 2483.75 As at 31-3-2017 Within After twelve twelve months 28831.87 4794.57 16828.25 2474.21 Total months 4 No. Particulars Sr. 3.34 4194.59 38099.53 8425.30 4847.80 34654.08 559.72 4194.59 46524.83 3965.73 174.01 28215.11 477.31 3181.54 29175.89 473.86 4139.74 28688.97 104.80 9880.93 486.45 3286.34 39056.82 (b) Current liabilities expected to be settled within twelve months and after twelve months from the reporting date: 460 crore 1462.99 556.38 30294.86 2667.81 Total 1 Opening balance 67340.58 16534.47 10078.90 Current maturities of long term borrowings (note 27) 93953.95 Proceeds from Borrowings (net) 14133.39 2680.02 (4172.13) 12641.28 Effect of changes in foreign exchange rates 2 3 22) Non-current Current borrowings borrowings (note (note 26) Particulars LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [61] Disclosure pursuant to Ind AS 8 "Accounting Policies, Changes in Accounting Estimates and Errors" on new Ind AS that has been issued but is not effective as of the closing day of the reporting period: (a) Ind AS 115 Revenue from Contracts with Customers The Ministry of Corporate Affairs notified Ind AS 115 "Revenue from Contracts with Customers" in respect of accounting periods commencing on or after April 1, 2018 superseding Ind AS 11 "Construction Contracts" and Ind AS 18 "Revenue". The Group's current revenue recognition policy is broadly aligned to the principles enunciated in Ind AS 115 and does not require any material change except for realty business. In terms of Ind AS 115, revenue of realty business will be recognised at the time of delivery of units to the customers as compared to revenue recognition based on percentage completion method currently followed as per the Guidance note issued by the Institute of Chartered Accountants of India. The management is in the process of implementing Ind AS 115 and does not expect any material impact on the Group's financial position as at March 31, 2018 and on the financial results of the Group in the first year of implementation viz. financial year commencing on April 1, 2018 except as above. (b) Ind AS 21 "The Effects of Changes in Foreign Exchange Rates" On March 28, 2018, the Ministry of Corporate Affairs notified Companies (Indian Accounting Standards) Amendment Rules, 2018 and inserted Appendix B, Foreign Currency Transactions and Advance Consideration in Ind AS 21. In Appendix B, it is clarified that the date of transaction to determine the exchange rate to use on initial recognition of related asset, expense or income is the date on which the initial recognition of the non-monetary asset or non-monetary liability arising from the payment or receipt of advance consideration. The Group's existing accounting policy conforms to the above clarification. NOTE [62] Disclosure pursuant to Ind AS7 "Statement of cash Flows" - Changes in Liabilities arising from financing activities: crore Sr. No. 34.07 4828.64 6556.30 23384.55 193.60 527.34 34126.74 973.83 5.74 0.00% 0.08% 5.74 Indiran Engineering Projects & Systems, Kish, (PJSC) 0.08% 0.00% 0.04 2410.45 0.00% 0.02 (454.53) (0.01%) (0.02) 0.00% Total Joint Ventures 0.00% Larsen & Toubro Electromech LLC Hydrocarbon: (0.60%) (0.97) 0.03% 2.04 Others: Raykal Aluminium Company Private Limited 0.00% 0.26 0.00% (0.02) 0.00% 0.00% (0.02) Foreign Joint Ventures 0.00 22.70 (431.83) CFS Adjustment and elimination Trade receivables 3 Loans current 45 Particulars Other financial assets Other current assets crore As at 31-3-2018 Within After twelve twelve months Total As at 31-3-2017 Within After twelve twelve months Total months months 3873.97 2 11.23 Inventories No. (69.28%) (38554.57) (5.70%) Total 55656.99 (420.41) (12.44%) 7369.86 (20.18) (5.85%) (440.59) 162.33 7532.19 NOTE [60] Disclosure pursuant to Ind AS 1 "Presentation of financial statements": (a) Current assets expected to be recovered within twelve months and after twelve months from the reporting date: Sr. 1 56.03 (8.64) 58.62 30-Nov-07 47.16 money pending allotment) 2 Other equity/Reserves and surplus (as (1253.15) (2.97) 23-Nov-61 18.00 10.99 (0.27) 557.18 1039.95 applicable) 9 3456-002 1028.40 16-Jan-09 0.01 13-Mar-08 1999.55 01-Jan-08 0.05 31-Mar-18 31-Mar-18 31-Mar-18 31-Mar-18 Currency Exchange rate on the last day of financial year Date of Acquisition 11-Jul-95 1 Share capital (including share application 0.05 13-Nov-07 444.00 12-Dec-07 7.44 Liabilities 2.34 4120.75 6.78 3189.69 0.02 1076.91 1176.45 7 Investments Turnover 8 Profit before taxation Provision for taxation 10 Profit after taxation 11 Interim dividend equity 2 3 4 5 12 13 14 90.90 31-Mar-18 11.24 2.39 79.86 161.74 0.29 501.73 89.34 | Total equity and liabilities 2.39 3311.60 11.24 90.90 3189.69 0.02 1076.91 1176.45 Total assets 3311.60 3.01 Limited Private changes from financing cash flows (Refer Sr No. 2 above) (a) Repayments on account of liability classified as held for sale (b) Total changes from financing cash flows (a+b) * crore 2017-18 46903.46 (36942.20) 2680.02 Particulars 12641.28 461 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [63] Disclosure pursuant to Ind AS 20 "Accounting for Government Grants and Disclosure of Government Assistance": The Group's exports qualify for various export benefits offered in the form of duty credit scrips under foreign trade policy framed by Department General of Foreign Trade India (DGFT). Income accounted towards such export incentives amounts to * 208.06 crore (previous year: 27.23 crore). (22.28) 12619.00 Proceeds from other borrowings (net) Repayment of non-current borrowings Proceeds from non-current borrowings 4 Interest accrued (net of interest paid) (326.42) 61.33 5 Other changes (transfer within categories) (8244.02) 6 Closing balance 72914.76 19331.85 1135.32 8244.02 15277.47 870.23 107524.08 Amounts reported in Statement of cash flow under financing activities NOTE [64] There are no amounts due and outstanding to be credited to Investor Education & Protection Fund as at March 31, 2018. NOTE [65] Figures for the previous year have been regrouped/re-classified to conform to the figures of the current year. 462 3 L&T Electricals and Automation Limited 31-Mar-18 4 5 6 7 8 Hi-Tech Rock Products & L&T Seawoods Limited Kesun Iron & Steel L&T Valves Limited L&T Realty Limited Company Aggregates 31-Mar-18 Limited 31-Mar-18 Limited LARSEN & TOUBRO Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Part A: "Subsidiaries” [as per Section 2(87) of the Companies Act, 2013] * crore Sr. No. Sr. Particulars no. 1 2 Bhilai L&T Power Shipbuilding Supply Limited Company Financial year ending on 15 0.04% 0.04% (0.57) 18.67 77.11 Total Associates 0.67 0.01% 18.10 0.00 0.67 0.01% 3.73 0.01% L&T Camp Facilities LLC (0.22) 0.00% Jointly Operations - Indian Operations Bauer-L&T Geo Joint Venture 0.02% 7.30 4.50% 123.15 1.67% 604.68 1.09% L&T-MHPS Boilers Private Limited Power: Indian Joint Ventures 10.21 0.14% 0.00% 10.21 0.14% 10.44 0.00% 1.73% (0.22) 0.00% 0.70 0.01% 0.00% 0.70 0.01% 0.00% Magtorq Private Limited Feedback Infra Private Limited 0.00% 0.00% 0.00% Gujarat Leather Industries Limited 16.88 0.22% 0.00% 0.01% 5.94 0.00% 0.01 0.00% LLC Larsen & Toubro Qatar & HBK Contracting Foreign Associates 0.00% 0.00% 0.00% 6.00 0.01% Grameen Capital India Limited 0.07 0.00% 0.00% 0.07 (0.14%) 130.45 L&T-MHPS Turbine Generators Private Limited 0.06 0.00% 0.00% 0.06 0.00% 0.45 L&T Sapura Shipping Private Limited 0.00% Hydrocarbon: (0.01) 0.00% 0.00% (0.01) (221.69) L&T Sapura Offshore Private Limited 0.51% 283.09 0.05% 71.73 L&T Hydrocarbon Caspian LLC 2.70 0.04% 0.00% 2.70 0.04% 14.48 0.03% L&T-Gulf Private Limited 5.41 0.07% 1.43 0.88% 3.98 (2.94%) 0.89 0.55% (222.58) 0.04 0.02% 6.53 0.09% 35.66 0.06% L&T Howden Private Limited 42.35 0.56% 11.25 6.93% 31.10 0.42% 107.27 0.19% 0.09% (0.35) 6.57 0.06% (3.02%) 0.00% 0.02 0.00% L&T MBDA Missile Systems Limited 0.00% Private Limited L&T Special Steels and Heavy Forgings Heavy Engineering: 5.64 0.08% 0.21 0.13% 5.43 0.07% 32.78 L&T-Sargent & Lundy Limited (0.21%) 17.23 0.23% As % of consolidated Amount (crore) As % of consolidated profit or loss net assets Amount (crore) As % of consolidated Amount (crore) Name of the entity Share in total comprehensive income Share in other comprehensive income Share in profit or (loss) Net Assets, i.e., total assets minus total NOTE [59] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) liabilities As % of consolidated Amount (*crore) other comprehensive (18.14) (0.03%) Servowatch Systems Limited (1.74) (0.02%) 1.08 0.67% (2.82) (0.04%) (35.60) (0.06%) PT. Tamco Indonesia income income total comprehensive LARSEN & TOUBRO 0.00% 0.36 0.00% other comprehensive income total comprehensive income Developmental Projects: L&T Infrastructure Development Projects Limited (Consolidated) 2.36% 1310.89 (5.61%) (413.64) 1.58% 2.57 (5.46%) (411.07) Valves, Welding Equipment, Construction Equipment and Others: L&T Kobelco Machinery Private Limited Amount (crore) 0.04% As % of consolidated As % of consolidated 0.00% 0.00% 459 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [59] (contd.) Net Assets, i.e., total assets minus total Share in profit or (loss) Share in other comprehensive income Share in total comprehensive income liabilities Name of the entity As % of consolidated net assets Amount (crore) As % of consolidated profit or loss Amount (crore) Amount (crore) 20.47 2.90 (2.40) Total Subsidiaries (0.06%) L&T Global Holdings Limited (103.35) (1.37%) 2.94 Non-controlling Interest in all subsidiaries 1.81% (1.44%) 713.04 1.28% Larsen & Toubro International FZE (0.26) 0.00% (106.29) (31.70) (0.64%) 48164.30 (10.11%) (5625.00) (47.37) (0.26%) (0.43) 61.43 0.11% L&T-Chiyoda Limited Indian Associates (635.50) (8.44%) (0.93) (0.57%) (634.57) (8.61%) 3675.44 212.25 3463.19 (47.80) (0.63%) 0.01 0.01% (0.27) 0.00% 577.76 1.04% Tamco Switchgear (Malaysia) SDN. BHD. (3.67) (0.05%) 0.10 0.06% (3.77) (0.05%) 7.66 0.01% Ltd. Tamco Electrical Industries Australia Pty 0.50 0.01% 0.19% (1.48%) 14.23 76.76 (0.05) 0.00% Larsen & Toubro (East Asia) Sdn. Bhd. Others: 0.87 0.01% 1.00 0.62% (0.13) 0.00% 8.06 0.01% Thalest Limited 90.99 1.21% 47.28% Interim dividend preference 9.14 Proposed dividend - preference % of share holding (151.46) Interim dividend preference Proposed dividend - equity Proposed dividend - preference % of share holding 64.01 11 Interim dividend equity 64.01 64.01 64.01 64.01 64.01 64.01 64.01 7 31-Mar-18 31-Mar-18 31-Mar-18 09-Dec-98 29-Jul-97 120.00 14-Jun-12 20.49 24-Aug-10 2206.98 2325.00 Share capital (including share application 1 09-Apr-07 Date of Acquisition financial year Exchange rate on the last day of Currency 31-Mar-18 31-Mar-18 31-Mar-18 31-Mar-18 Sr. No. 25 26 27 Limited Financial year ending on 31-Mar-18 31-Mar-18 31-Mar-18 31-Mar-18 31-Mar-18 30 31 L&T L&T Uttaranchal Arunachal Hydropower Hydropower Limited Limited 31-Mar-18 31-Mar-18 32 L&T Himachal Hydropower Limited 31-Mar-18 Currency Exchange rate on the last day of financial year Private Limited 15-Feb-14 Limited Company Development 28 29 Sr. Particulars L&T Mudit L&T Capital L&T Trustee L&T Power no. Financial Cement Consultants Private Company Limited Limited Date of Acquisition 14-Jul-16 3.60 (0.01) 9 Provision for taxation 144.61 2.50 (0.01) 3.36 6.07 0.95 012345 Profit after taxation 289.92 32.40 17.30 (0.48) 149.17 81.96 (0.08) 7 Turnover 4997.45 93.72 615.51 0.05 2565.27 543.24 7.26 0.03 8 Profit before taxation 434.53 34.90 17.30 (0.06) 75.89 149.65 2.41 applicable) 1009.80 (0.01) (2.32) 36.59 620.78 1944.85 (70.06) 822.54 Other equity/Reserves and surplus (as 2 money pending allotment) 1000.05 0.01 2.05 8 02-Apr-09 9 Liabilities (0.01) 2592.94 Financial year ending on Proposed dividend - equity 13643.14 11095.71 Total equity and liabilities 6866.05 0.01 56.66 31.54 574.73 627.60 11506.23 7948.17 34567∞∞2=2345 0.03 16-Jun-11 09-Jul-09 (52.03) 64.01 64.01 100.00 8 100.00 % of share holding 8 100.00 8 100.00 81 100.00 Note: $ Reporting as per the Companies (Accounting Standards) Rules 2006 (I-GAAP) 100.00 15 Proposed dividend preference 14 0.09 01234 Profit after taxation 19.69 (5.68) 5.95 0.01 0.19 0.01 (0.01) (0.01) 11 Interim dividend equity Interim dividend preference Proposed dividend- equity 464 LARSEN & TOUBRO Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] (contd.) Metro Rail (Hyderabad) Limited Technology Construction Infrastructure Services Equipment Engineering Limited Limited L&T Thales Technology Sahibganj L&T Ganges Hydrocarbon Services Bridge Engineering Limited Private Company Limited Limited Private Limited Power Limited 2.58 L&T L&T crore Sr. No. Sr. Particulars no. 33 34 35 36 37 38 39 40 Nabha L&T L&T 27-Dec-13 06-Apr-00 0.23 Provision for taxation 0.19 (0.28) applicable) 3 Liabilities 425.21 892.05 56.04 2.07 62.98 0.12 0.80 4 Total equity and liabilities 0.46 3.36 (0.01) 15.95 1 Share capital (including share application 18.88 2.10 0.05 0.01 12-Sep-07 3112.70 13-Nov-06 180.50 24-Jun-10 40.39 22-Jun-10 200.05 money pending allotment) 2 Other equity/Reserves and surplus (as 44.77 (21.42) 488.87 36.73 16.46 3118.13 Turnover 87.00 7.74 7.80 8 Profit before taxation 24.90 (5.45) 8.53 0.01 0.28 0.01 (0.01) (0.01) 9 7 5.21 1.63 8.15 1135.53 40.70 200.57 166. 5 Total assets 488.87 36.73 16.46 3118.13 1135.53 40.70 200.57 Investments 4.26 3110.59 13.68 31-Mar-18 1.25 (0.00) (0.01) 0.20 (0.03) (0.91) 1160.12 367.84 166.36 11 Interim dividend equity (303.38) (173.44) Profit after taxation 12 13 Proposed dividend - equity (145.74) 14 Proposed dividend preference 15 % of share holding 100.00 68.00 99.99 100.00 8 Interim dividend preference 100.00 10 26.84 53.49 5051.60 9138.64 12002.52 5.06 1560.30 7840.39 571.97 18.83 6906.40 449.93 1193.06 88.91 8 (0.00) (0.01) 0.20 (0.03) (0.74) 1468.42 394.68 255.27 9 Provision for taxation 0.17 308.30 Profit before taxation 5.06 8 64.01 Investment Limited $ Partners Partners Limited $ Company Advisory Trustee Limited $ Private Private Limited $ L&T Infra Limited 31-Mar-18 31-Mar-18 31-Mar-18 31-Mar-18 31-Mar-18 31-Mar-18 31-Mar-18 31-Mar-18 Currency - Exchange rate on the last day of financial year Date of Acquisition 31-Dec-12 Financial year ending on 82.96 L&T Infra Investment Infrastructure Finance 64.01 Note: $ Reporting as per the Companies (Accounting Standards) Rules 2006 (I-GAAP) 463 Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] (contd.) crore Sr. No. Sr. Particulars no. 17 18 L&T Finance Limited $ Debt Fund L&T Capital 20 21 22 23 24 Markets Investment Limited Management L&T Mutual Fund Trustee Limited L&T L&T Infra 19 L&T 6.24 Turnover Investments 100.00 100.00 Sr. No. 9 10 Sr. Particulars no. Chennai Vision Developers Private Limited L&T Vision Ventures Limited 11 L&T Power Limited 95.00 12 L&T Cassidian Limited 14 15 16 L&T Larsen L&T Finance L&T Aviation & Toubro Services Private Infotech Limited 13 Holdings Limited $ 100.00 100.00 11.12 24.19 854.39 730.89 244.24 132.70 930.64 39.52 (441.36) (2.07) 2.75 33.79 100.00 (48.69) 0.92 6.83 (17.29) 11.48 (441.36) (2.07) 1.83 26.96 (31.40) 21.15 99.90 97.00 32.63 Housing Finance Limited $ Other equity/Reserves and surplus (as (0.01) (4.68) 4.99 (0.05) (10.17) 3701.40 5621.50 1,196.71 applicable) 34567∞ ∞ - Liabilities 2 0.01 0.02 18.06 1333.00 487.06 10640.44 Total equity and liabilities 6.24 5.06 53.49 5051.60 9138.64 12002.52 Total assets 10.87 money pending allotment) 165.37 09-Oct-12 Limited Financial year ending on 31-Mar-18 31-Mar-18 31-Mar-18 31-Mar-18 31-Mar-18 31-Mar-18 31-Mar-18 31-Mar-18 Currency Exchange rate on the last day of - financial year Date of Acquisition 14-Aug-08 22-Dec-06 1 Share capital (including share application 0.01 0.05 09-Mar-06 0.05 15-Apr-11 0.05 06-Nov-09 45.60 23-Dec-96 17.20 01-May-08 3030.08 07-Feb-13 2179.79 25-Apr-96 1 7246.55 26219.23 1.59 586.00 80.19 44656.97 Total equity and liabilities 456 0.02 1.61 6230.53 22871.01 0.06 104.06 36070.22 Liabilities 3 applicable) (0.05) 10.46 420.54 2358.31 30-Apr-96 230.12 1.38 (3.62) 17.07 27.19 Total assets 1599.14 Share capital (including share application money pending allotment) 0.06 56.62 251.82 0.15 18-Apr-06 989.91 30-May-11 12-Aug-11 595.48 5.00 0.10 2 Other equity/Reserves and surplus (as 19-Mar-13 118.84 1.59 6987.61 26219.23 586.00 17.07 7246.55 0.06 Investments 2412.94 27.93 44656.97 80.19 5,000 4,40,58,020 90,00,000 Total No of shares 10.65 112.48 (1.83) 21.76 Reserves closing (crore) 21.00 0.35 21,003 8.70 (7.26) Extent of Holding % Net worth attributable to Shareholding as per latest audited Balance Sheet (crore) 21.74% 44.06 4.65 (3.53) 3.36 14.31 60.74 6 Reason why the associate/joint venture is not consolidated 5 Refer Note 1 Description of how there is significant influence 4 42.85% 51.03% 49.00% 50.00% 9.00 31-Dec-17 4.42 26-Oct-94 Date on which the Associate or Joint Venture was 2 31-Mar-18 7 31-Dec-17 31-Mar-17 31-Mar-18 Latest audited Balance Sheet Date 1 Co. WLL Contracting Qatar & HBK Toubro Private Limited Magtorq 11-Feb-05 Total Share capital ( crore) 13-Sep-07 30-Sep-12 0.18 4.33 9.83 4.50 Amount of Investment in Associates/Joint Venture (crore) 9,000 100 2,450 98,30,000 45,00,000 Number company at the year end Shares of Associate/Joint Ventures held by the 3 associated or acquired 28-Jul-04 Profit/(Loss) for the year (* crore) Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures 34.47 SANJEEV AGA (DIN 00022065) SUNITA SHARMA (DIN 02949529) M. M. CHITALE (DIN 00101004) M. DAMODARAN (DIN 02106990) (DIN 02255382) VIKRAM SINGH MEHTA SUBODH BHARGAVA (DIN 00035672) R. SHANKAR RAMAN Chief Financial Officer & Whole-time Director (DIN 00019798) S. N. SUBRAHMANYAN Chief Executive Officer & Managing Director 3. There is restriction on transferring the resources to the share holder and hence the same has not been considered for consolidation. 4. The associate company is under liquidation process and investment is fully provided in the accounts. 2. The Incorporated joint venture is not required to be audited as per regulatory laws in Iran. Hence the management certified accounts have been considered for consolidation. N. HARIHARAN Company Secretary 1. Significant influence is demonstrated by holding 20% or more of the total voting power, or control of or participation in business decisions under an agreement of the investee. Not Considered in Consolidation 0.03 Considered in Consolidation Profit/ (Loss) for the year (* crore) 7 (0.15) Net worth attributable to Shareholding as per latest audited Balance Sheet ( crore) 6 Refer Note 4 Refer Note 3 Refer Note 2 Notes: (DIN 00041197) M. No. A3471 Mumbai, May 28, 2018 having e-mail id shares of LARSEN & TOUBRO LIMITED, hereby appoint: DP ID of of of Tel. No.: (022) 6752 5656, Fax No.: (022) 6752 5893 Email: IGRC@Larsentoubro.com, Website: www.larsentoubro.com Regd. Office L&T House, Ballard Estate, Mumbai 400 001. L99999MH1946PLC004768 CIN LARSEN & TOUBRO LIMITED 3) 2) 1) Larsen & I/We, being the holder(s) of Folio No./Client ID Email ID Registered Address Name of the member(s) [Pursuant to Section 105(6) of the Companies Act, 2013 and Rule 19(3) of the Companies (Management and Administration) Rules 2014] PROXY FORM LARSEN & TOUBRO Directors 472 Reason why the associate/joint venture is not consolidated Considered in Consolidation 56 4 Description of how there is significant influence Latest audited Balance Sheet Date 1 Industries Limited Systems Kish Leather Capital India Limited Projects and Engineering Gujarat Grameen Indiran PJSC 8 6 Sr. No. No. Sr Name Of Associates Part B: "Associates/Joint ventures" (contd.) 471 Not Considered in Consolidation 0.18 1.45 7.92 7 31-Mar-18 31-Mar-17 2 50.00% 16.64% 50.00% Extent of Holding % Refer Note 4 81,77,887 1,750 (7.66) (1.07) 8.18 0.78 Total No. of shares Reserves closing ( crore) Total Share capital (crore) 735,000 2,126,000 2.13 0.39 875 Amount of Investment in Associates/Joint Venture (crore) Shares of Associate/Joint Ventures held by the company at the year end Number 3 27-Jun-91 5-Jun-15 31-Oct-09 Date on which the Associate or Joint Venture was associated or acquired Refer Note 1 196 - having e-mail id 40.36 3.30 4.34 16.04 0.27 0.04 1.42 10 Profit after taxation (113.32) (29.16) 29.97 Provision for taxation 11.08 (4.66) 0.16 12.73 11 Interim dividend equity 12 Interim dividend preference 13 Proposed dividend - equity 14 Proposed dividend preference Other equity/Reserves and surplus (as 56.15 2 9 0.20 6 Investments 3700.19 74.59 79.02 320.08 150.83 102.58 80.97 7 Turnover 467.97 14.15 70.45 75.69 332.13 26.90 30.39 8 Profit before taxation (72.95) (29.16) 33.27 15.42 72.19 (4.38) 144.41 373.95 money pending allotment) 30-Aug-13 L&T Samakhiali L&T BPP Ahmedabad- L&T Halol Devihalli L&T Krishnagiri Particulars Sr. 112 111 110 109 L&T Deccan 108 106 105 Sr. No. 98.12 97.45 97.45 97.45 97.45 97.45 97.45 97.45 L&T Camp Facilities LLC 107 192.60 Kudgi Tollway Limited 20-Dec-11 285.34 05-Feb-10 80.54 25-May-11 247.20 149.00 09-Sep-08 09-Sep-08 795.35 27-Apr-10 90.00 90.00 Share capital (including share application 1 23-Apr-10 Date of Acquisition no. financial year Currency Financial year ending on Transmission Limited 31-Mar-18 Tollways Limited 31-Mar-18 31-Mar-18 31-Mar-18 31-Mar-18 Gandhidham Tollway Limited Limited Maliya Tollway Tollway Limited Walajahpet Hassan Tollway Shamlaji Limited Tollway Limited 31-Mar-18 31-Mar-18 31-Mar-18 Exchange rate on the last day of 105.33 395.81 868.18 Part A: "Subsidiaries” [as per Section 2(87) of the Companies Act, 2013] (contd.) crore Sr. No. 97 98 99 Sr. Particulars L&T Panipat no. Infrastructure Development Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Elevated Krishnagiri Thopur Toll Road Limited Projects Limited 100 101 Western Vadodara Andhra Bharuch Tollway Tollways Limited Limited 102 103 104 L&T Interstate LT IDPL INDVIT Road Corridor Limited L&T Services Transportation Limited Infrastructure Limited Limited $ 31-Mar-18 Corridor 31-Mar-18 LARSEN & TOUBRO Approve payment of remuneration to Mr. A.M Naik (DIN: 00001514), as Non-Executive Director or failing him having e-mail id and whose signature(s) are appended below as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the Seventy Third Annual General Meeting of the Company, to be held at Birla Matushri Sabhagar, 19, Marine Lines, Mumbai - 400020 on Thursday, August 23, 2018 at 3.00 P.M. and at any adjournment thereof in respect of such resolutions as are indicated below: ** I wish my above Proxy to vote in the manner as indicated in the box below: Item No. Resolutions 1 Adoption of audited financial statements for the year ended March 31, 2018 and the Reports of the Board of Directors and Auditors thereon and the audited consolidated financial statements of the Company and the reports of the auditors thereon for the year ended March 31, 2018. 2 Dividend on equity shares for the financial year 2017-18. 3 Appoint Mr. Subramanian Sarma (DIN: 00554221) as a Director liable to retire by rotation. 10 4 5 Appoint Mr. A.M Naik (DIN: 00001514), as a Director liable to retire by rotation. 6 Appoint Mr. D.K Sen (DIN: 03554707), as a Director liable to retire by rotation. 7 Appoint Mr. Hemant Bhargava (DIN: 01922717), as a Director liable to retire by rotation. 8 Appoint Mr. A.M Naik (DIN: 00001514) aged 75 years, as Non-Executive Director For Against 473 Item No. Resolutions 9 Appoint Mrs. Sunita Sharma (DIN: 02949529), as a Director liable to retire by rotation. 31-Mar-18 31-Mar-18 31-Mar-18 31-Mar-18 31-Mar-18 156.04 applicable) 345 6 x Liabilities 2570.80 497.60 474.53 263.83 1074.13 295.70 71.51 176.51 19.87 Total equity and liabilities 229.20 411.88 246.83 868.18 395.81 105.33 373.95 Total assets 5457.28 229.20 411.88 246.83 5457.28 42.95 (249.45) (73.50) Financial year ending on 31-Mar-18 Currency - Exchange rate on the last day of financial year Date of Acquisition 26-Feb-01 1 Share capital (including share application 321.06 21-Jul-05 84.30 02-Nov-05 78.75 02-Nov-05 56.50 23-Dec-05 02-Feb-06 43.50 57.16 20-May-99 13.95 24-Sep-97 41.40 money pending allotment) 2 Other equity/Reserves and surplus (as 2565.42 (352.69) (141.40) or failing him International Seaports (Haldia) Private Limited day of 1 2 3 4 5 364.62 1118.41 Investments Total assets L&T- Chiyoda Limited 2228.39 1660.90 1157.97 4640.84 1157.97 364.62 1118.41 Total equity and liabilities 1634.41 2058.99 1676.05 1345.39 4942.90 1345.39 11 A Proxy need not be a member of the Company. This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company not less than 48 hours before the commencement of the meeting. (3) (2) (1) Note: Signature of proxy holder(s) Issue listed/unlisted secured/unsecured redeemable non-convertible debentures, in one or more series/tranches/ currencies, aggregating up to 6000 crore. Signature of shareholder : 2018 % of share holding Signed this Affix a 1 Rupee Revenue Against For Ratification of remuneration payable to M/s R. Nanabhoy & Co. Cost Accountants (Regn. No. 00010) for the financial year 2018-19. Stamp 1241.37 723.57 312.07 46.82 84.47 8 Profit before taxation 27.94 (11.46) (44.65) 152.40 2.73 174.28 360.71 (47.34) (302.60) 3.58 42.10 254.70 139.24 290.50 191.24 (104.79) (113.50) 3.19 Turnover 7 1.81 992.78 Liabilities 3456 D ∞ applicable) 113.39 (115.93) (95.69) (549.25) (44.98) (360.94) (37.44) 35.63 4640.84 1660.90 2228.39 1940.40 25.48 A person can act as a proxy on behalf of members not exceeding fifty and holding in aggregate not more than 10% of the total share capital of the Company carrying voting rights. A member holding more than 10% of the total share capital of the Company carrying voting rights may appoint a single person as proxy and such person shall not act as a proxy for any other person or shareholder. **(4) This is only optional. Please put a 'X' in the appropriate column against the resolutions indicated in the Box. If you leave the 'For' or 'Against' column blank against any or all the resolutions, your Proxy will be entitled to vote in the manner as he/she thinks appropriate. Appointing a proxy does not prevent a member from attending the meeting in person if he/she so wishes. 48.14 (5) In the case of jointholders, the signature of any one holder will be sufficient, but names of all the jointholders should be stated. Bank Account Details: (for electronic credit of unpaid dividends and all future dividends) E-Mail id Mobile No 1st named shareholder Address of the Folio No. I/We furnish below our folio details along with PAN and Bank mandate details for updation and confirmation of doing the needful. I/we are enclosing the self-attested copies of PAN cards of all the holders, original cancelled cheque leaf of first holder, Bank pass book and address proof viz., Aadhaar card as required for updation of the details: Name of the Bank Unit: Larsen & Toubro Limited Financial District, Nanakramguda, Hyderabad - 500 032 Karvy Selenium Tower B, Plot 31-32, Gachibowli, Karvy Computershare Private Limited Format for Furnishing the PAN and Bank Details To 477 Company Secretary (ACS 3471) Dear sir, N. Hariharan Name of the Branch Account Type (Savings / Current/ Cash Credit) 478 NB: The above details will not be updated if the supporting documents are not attached and not duly self attested. Place: Date: Signature : Name PAN No. Account Number (as appearing in our cheque book) Cash Credit Savings Joint Holder 2 : Joint Holder 1 : First Holder: 11 Digit IFSC Code on the MICR cheque issued by the bank) A photocopy of a cheque is enclosed for verification 9 Digit MICR Number (as appearing Current Sd/- For Larsen & Toubro Limited Email igrc@Larsentoubro.com Regd. Office L&T House, Ballard Estate, Mumbai 400 001. Tel. No.: (022) 6752 5656, Fax No.: (022) 6752 5893 CIN L99999MH1946PLC004768 LARSEN & TOUBRO LIMITED 476 NOTES 475 You may also visit the Investors section of our website for detailed procedure for dematerialization of shares. Shareholders, who are holding shares in physical form are requested to arrange for the dematerialization of the said shares at the earliest to avoid any inconvenience in future for transfer of shares. Email: IGRC@Larsentoubro.com, Website: www.larsentoubro.com CDSL website: https://www.cdslindia.com/investors/open-demat.aspx Shareholders are accordingly requested to get in touch with any Depository Participant to open a Demat account. You may visit the website of depositories viz., NSDL or CDSL for further understanding about the demat procedure: You may access this Notification from the website of SEBI. Accordingly, requests for effecting transfer of securities shall not be processed unless the securities are held in Dematerialized form with effect from December 5, 2018. Therefore, please note that the RTA and the Company will not be accepting any request for transfer of shares in physical form with effect from December 5, 2018. This restriction shall not be applicable to the requests received for transmission or transposition of physical shares. SEBI has, vide a notification dated June 8, 2018 amended Regulation 40 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandating transfer of securities only in dematerialized form. Dear Shareholder(s), SEBI Notification dated June 8, 2018 – Amendment to Regulation 40 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 474 NSDL website: https://nsdl.co.in/faqs/faq.php (dematerialization) Mandatory updation of PAN and Bank details against your holding Dear Shareholder(s), The Securities and Exchange Board of India has vide its circular SEBI/HO/MIRSD/DOP1/CIR/P/2018/73 dated 20th April, 2018 mandated that companies through their Registrar and Transfer Agents ("RTA") take special efforts for collecting copies of PAN and bank account details of their security holders holding securities in physical form. Website: www.larsentoubro.com Tel. No. 022-67525656 Fax. No. 022-67525893 L&T House, N. M. Marg, Ballard Estate, Mumbai - 400 001 Larsen & Toubro Limited In case if you have any queries or need any assistance, please contact: We request your co-operation in this regard. Address proof (self-attested copies of recent Electricity or Telephone Bill and Ration Card, PAN Card and Aadhaar Card) of the First holder Cancelled Cheque leaf with name (if name is not printed on the cheque, bank attested copy of the pass book (first page) showing name of account holder) of the First holder • Self-attested copy of Pan Card of all the security holders • Enclosed format duly filled in and signed by the shareholder/s (available on page 478) • You are requested to submit the following to update the records immediately ACTION REQUIRED FROM YOU In case your PAN and/or Bank details are not updated with the RTA, please do the needful at the earlest by following the below mentioned procedure. Those security holders whose folio(s) do not have complete details relating to their PAN and Bank Account, or where there is any change in the bank account details provided earlier, have to compulsorily furnish the details to the RTA / Company for registration / updation. (6) 9 1940.40 5.42 (122.75) (5.36) 3 Liabilities 1020.13 0.00 1501.66 954.97 371.44 4 Total equity and liabilities 1301.36 0.00 1148.96 942.22 408.08 5 Total assets 1301.36 0.00 1148.96 (521.81) (8.80) Other equity/Reserves and surplus (as applicable) 2 Financial year ending on 31-Mar-18 31-Mar-18 31-Mar-18 31-Mar-18 31-Mar-18 Currency Exchange rate on the last day of financial year SGD 49.82 Date of Acquisition 942.22 18-Oct-13 16-Feb-09 08-Sep-08 24-Mar-08 1 Share capital (including share application money pending allotment) 290.03 0.00 169.10 110.00 42.00 30-Sep-13 Limited 408.08 Investments Proposed dividend equity 14 Proposed dividend preference 15 % of share holding 97.45 GT 97.45 G T 72.11 97.45 G T 97.45 470 LARSEN & TOUBRO Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Part B: "Associates/Joint ventures" Sr. No. Name of Associates Sr No. 13 Interim dividend preference 12 Interim dividend equity 1.73 7 Turnover 305.31 104.88 8 Profit before taxation (5.87) (0.06) (66.14) 6 (46.48) 9 Provision for taxation 10 Profit after taxation (5.87) (0.06) (66.14) (46.48) (0.30) 11 (0.30) Provision for taxation 15 113 4 97.45 469 Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures crore Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] (contd.) Sr. No. Sr. Particulars L&T 114 L&T IDPL 115 no. Sambalpur - Rourkela Trustee Managers PNG Tollway Limited 116 L&T Rajkot- 117 L&T Vadinar Chennai - Tollway Tada Tollway Tollway Pte Limited Limited Limited 97.45 97.45 Note: $ Reporting as per the Companies (Accounting Standards) Rules 2006 (I-GAAP) (104.79) (113.50) 12.80 10 Profit after taxation 22.52 (11.46) (44.65) (47.34) (302.60) 11 Interim dividend equity 35.33 Interim dividend preference - 13 12 14 ཤྰ| | | |ཤྲུ 97.45 Proposed dividend equity 97.45 GITT 47.75 5 97.45 % of share holding 15 Proposed dividend preference 97.45 * In case your response to any question overleaf is "Poor", kindly share your experience and let us know the reason/ instances to enable us to investigate the matter. Unit: Larsen & Toubro Limited In case of any queries, kindly contact our Registrar: Karvy Computershare Pvt. Ltd. First Fold Karvy Selenium Tower B, Plot 31 & 32, Gachibowli, - Mumbai 400 001. L&T House, Ballard Estate, Second Fold Financial District, Nanakramguda, Hyderabad, Telengana - 500 032 Tel: (040) 6716 2222 ⚫ Toll free number: 1-800-3454-001 Good Poor* Fold here AWARDS & RECOGNITION 56 Every year, L&T and its people receive a number of national and international awards that acknowledge its varied accomplishments. Presented by the media, industry associations, independent bodies and academia, they honour the Company's contribution in various spheres of business, technology, financial performance, growth and environmental protection. For details of recent awards, please visit www.Larsentoubro.com PRINTED ON RECYCLED PAPER PRINTED ON RECYCLED PAPER LTCBMC/072018/RP Printed at Print Plus Pvt. Ltd. Not -> Larsen & Toubro Limited Secretarial Department Mumbai G.P.O. - I. H. G. Quality and accuracy of response to your queries and complaints: F. E. D. Please rate the contents and quality of the website of the Company Arrangements and presentations made at the last AGM - by Company C. Please rate the contents and quality of Annual Report experienced Are you satisfied with the growth strategy of the Company? Yes Yes Yes Yes * B. (iii) Both Not aware Long Term or No No Excellent Do you have any grievance which has not been redressed J. Kindly let us know your experience in space provided overleaf the Registrar - the Company Overall quality of service provided by Office of Registrars No - you interact with Please rate the hospitality and efficiency of the persons attending to you when - the Registrar -the Company Timeliness of response form - by Registrar ☐ ☐ ☐ z z - Investors Relation Cell Mumbai - 400 001. (ii) (i) Regd. Office L&T House, Ballard Estate, Mumbai 400 001. CIN L99999MH1946PLC004768 LARSEN & TOUBRO LIMITED Fold here >. Fold here Yes No Tel. No.: (022) 6752 5656, Fax No.: (022) 6752 5893 Email: IGRC@Larsentoubro.com, Website: www.larsentoubro.com Signature Fold here Fold here Postage will be paid by addresssee BUSINESS REPLY LETTER No Postage stamp necessary if posted in India B. R. PERMIT No.: MBI GPO - 0049 Fold here Short Term Dear Shareholder, We are privileged to have you as our shareholder. It has been our constant endeavour to improve the services to our Investors and in this pursuit, we are once again sending you this Feedback Form, which is a self addressed prepaid Inland letter. We request you to kindly spare some time and retum the same to us duly completed. We look forward to your feedback/valuable suggestions. A. Do you perceive the Company as creating shareholder value in the: Shareholders Satisfaction Survey Questionnaire (please the appropriate box) Folio No./DP ID & Client ID E-mail ID: Phone No: (with STD code) Name and address of the shareholder SHAREHOLDER'S FEEDBACK FORM Date: M. No. A3471 N. Hariharan For LARSEN & TOUBRO LIMITED Yours faithfully, Thanking you, Company Secretary No Engineering Excellence www.Larsentoubro.com Terminal 2, Mumbai - one of the many iconic airports built by L&T The 9.76 km Kachi Dargah Bridge across the Ganges will be India's longest river bridge Gross debt: Equity ratio K9 Vajra-T 155 mm /52 Cal. Tracked Self-propelled Gun 3028- 1% -195419 74% ☐ Heavy Engineering 2741- 1% -193796 74% 13523 ☐ Electrical & 11997. 5% Automation 14160 5% 5% 13824- Hydrocarbon 5% Total Segment-wise order book: 263107 crore ☐ Others Total Segment-wise order book: *261341 crore Power ☐ Heavy Engineering ☐ Electrical & Automation 9357 4% 24823 10% Power 15190 6% 5% Total revenue: 119862 crore crore 59083 49% Infrastructure Power ☐ ☐ ☐ ☐ Heavy Engineering Electrical & Automation Hydrocarbon IT & Technology Services Financial Services ☐ Developmental Projects ☐ Others Percentage LARSEN & TOUBRO L&T CONSOLIDATED - SEGMENT-WISE ORDER BOOK 2017-18 crore ☐ Infrastructure L&T CONSOLIDATED - SEGMENT-WISE ORDER BOOK 2016-17 crore Infrastructure 26590 10% Hydrocarbon 3% ☐ Others L&T CONSOLIDATED - SEGMENT-WISE EBIDTA MARGINS* 5- 3.5 3.4 0 L&T builds nuclear power plants and supplies equipment 21.221.4 17.3 14.8 10.9 10.1 6.3 (%) (14) (5) (6%) 2.3 Electrical & Automation Hydrocarbon Services IT & Technology Financial Services Developmental Projects Others Total segment wise result: * 12336 crore Heavy Engineering 1000- 6.8 (9%) 6000 5293 (43%) 5000- 4000 25- 2016-17 2017-18 20.0 20- 17.1 16.0 15.1 crore 15- 3000- 2146 (18%) 10.210.0 Hv 10- 2000- 669 772 1441 (12%) 1139 L&T CONSOLIDATED - SEGMENT-WISE RESULT 2017-18 -6201 3845 4% 2017-18 I Gross revenue from operations PAT including exceptional items (attributable to owners of the Company) L&T CONSOLIDATED - PBDIT AS % OF NET REVENUE FROM OPERATIONS 15000- 1% 263107 261341 13000 -3500 260000- 11000 210000- Hv 160000- 110000- 60000- As at 31-3-2017 As at 31-3-2018 crore -16.0 11130 -4000 -4500 -5000 H 70000- 6.7 85000 -6.5 50000- 80000 30000 -6.0 2016-17 2017-18 Order Inflow India GDP growth 310000- L&T CONSOLIDATED - ORDER BOOK 2016-17 119862 -7500 7370 -7000 -6500 -6000 -5500 crore 13571 -14.0 -12.0 11.3 11188 7% ☐ ☐ 15811 10% 5635. 4% 5848 Automation Hydrocarbon ☐ IT & Technology ☐ ☐ Services Financial Services ☐ Developmental Projects ☐ Others 11188 9% 4% 2414- 1% Total order inflow: 152908 crore 11736 10% 5209 10064 9% Figures in brackets represent percentage of segment result to total segment result Heavy Engineering Electrical & 10064- 7% 9000- -10.0 10.2 7000- -8.0 5000- -6.0 3000 2016-17 PBDIT 2017-18 -4.0 PBDIT as % of net revenue from operations Net revenue from operations and PBDIT exclude exceptional items L&T CONSOLIDATED - SEGMENT-WISE REVENUE 2017-18 L&T CONSOLIDATED - SEGMENT-WISE ORDER INFLOW 2017-18 crore 10377 7% 8242 7% 4294- 3% 87277 Infrastructure Power 4294 4% 57% L&T CONSOLIDATED - SEGMENT-WISE TOTAL ASSETS 31.03.2018 100000- 9) To consider and, if thought fit, to pass, as a SPECIAL RESOLUTION the following: "RESOLVED THAT approval of the Company be and is hereby accorded for the appointment and continuation of Mr. A.M Naik (DIN: 00001514) as a Non-Executive Director of the Company with effect from October 1, 2017 who has attained the age of seventy-five years." To consider and, if thought fit, to pass, as a SPECIAL RESOLUTION the following: 'RESOLVED THAT approval of the Company be and is hereby accorded for payment of remuneration to Mr. A.M Naik (DIN: 00001514), Non-Executive Director of the Company, details whereof are provided in the Explanatory Statement, being in excess of fifty percent of the total annual remuneration payable to all Non-Executive Directors." 10) To consider and, if thought fit, to pass, as a SPECIAL RESOLUTION the following: "RESOLVED THAT pursuant to the provisions of Sections 42, 71 and all other applicable provisions of the Companies Act, 2013 read with the Companies (Prospectus and Allotment of Securities) Rules, 2014, SEBI (Issue and Listing of Debt Securities) Regulations, 2008, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (including any statutory modification(s) or re-enactment thereof, for the time being in force), and subject to the provisions of the Articles of Association of the Company, approval of the members be and is hereby accorded to authorize the Board of Directors of the Company (including any Committee thereof) to offer or invite subscriptions for listed/unlisted/secured/unsecured/ redeemable/non-convertible debentures, in one or more series/tranches/currencies, aggregating up to 6000 crore (Rupees Six thousand crore only), on private placement basis, on such terms and conditions as the Board of Directors of the Company may, from time to time, determine and consider 45 proper and most beneficial to the Company including as to when the said debentures be issued, the consideration for the issue, utilization of the issue proceeds and all matters connected with or incidental thereto; RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorised to do all acts and take all such steps as may be necessary, proper or expedient to give effect to this resolution." 11) To consider and ratify the remuneration payable to Cost Auditors and for that purpose to pass, as an ORDINARY RESOLUTION the following: 8) "RESOLVED THAT pursuant to Section 148 and other applicable provisions, if any, of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, the Company hereby ratifies the remuneration of 11.75 lakhs (Rupees Eleven lakhs seventy five thousand only) plus applicable taxes and out of pocket expenses at actuals for travelling and boarding/lodging for the financial year ending March 31, 2019 to M/s R. Nanabhoy & Co. Cost Accountants (Regn. No. 00010), who are appointed as Cost Auditors to conduct the audit of cost records maintained by the Company for the Financial Year 2018-19." By Order of the Board of Directors For LARSEN & TOUBRO LIMITED N. HARIHARAN COMPANY SECRETARY M.NO - A3471 [a] The information required to be provided under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Secretarial Standards on General Meetings, regarding the Directors who are proposed to be appointed/ re-appointed and the relative Explanatory Statement pursuant to Section 102 of the Companies Act, 2013, in respect of the business under items 7 to 11 set out above are annexed hereto. [b] A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY, TO ATTEND AND VOTE INSTEAD OF HIMSELF, AND THAT A PROXY NEED NOT BE A MEMBER. Pursuant to Section 105 of the Companies Act, 2013 and Rule 19 of the Companies (Management & Administration) Rules, 2014, a person can act as a proxy on behalf of members not exceeding 50 and holding in the aggregate not more than 10% of the total share capital of the Company carrying voting rights. In case a proxy is proposed to be appointed by a member holding more than 10% of the total share capital of the Company carrying voting rights, then such proxy shall not act as a proxy for any other person or shareholder. Proxies, in order to be effective, must be received at the Registered office of the Company at L&T House, Ballard Estate, Mumbai 400 001, not later than forty-eight hours before the commencement of the AGM i.e. by 3.00 p.m. on Tuesday, August 21, 2018. [c] The requirement to place the matter relating to appointment of Auditors for ratification by Members at every Annual General Meeting has been done away with vide notification dated May 7, 2018, issued by the Ministry of Corporate Affairs. Accordingly no resolution is proposed for ratification of appointment of Auditors, who were appointed from the conclusion of the 70th Annual General Meeting till the conclusion of the 75th Annual General Meeting, in the Annual General Meeting held on September 9, 2015. [d] The Register of Members and Transfer Books of the Company will be closed from Friday, August 17, 2018 to Thursday, August 23, 2018 (both days inclusive). [e] Members are requested to furnish bank details, email address, change of address etc. to Karvy Computershare Private Limited, Karvy Selenium, Tower B, Plot 31-32, Gachibowli, Financial District, Nanakramguda, Hyderabad 500 032, who are the Company's Registrar and Share Transfer Agents so as to reach them latest by Thursday, August 16, 2018, in order to take note of the same. In respect of members holding shares in electronic mode, the details as would be furnished by the Depositories as at the close of the aforesaid date will be considered by the Company. Hence, members holding shares in demat mode should update their records at the earliest. [f] In order to receive copies of Annual Reports and other communication through e-mail, members holding shares in physical form are requested to register their e-mail addresses with the Company by sending an e-mail to Lntgogreen@Larsentoubro.com. [g] All documents referred to in the accompanying Notice and the Explanatory Statement, if any, are Mumbai, May 28, 2018 Notes: 7) To consider and, if thought fit, to pass, as an ORDINARY RESOLUTION the following: "RESOLVED THAT Mr. Hemant Bhargava (DIN: 01922717) who was appointed as a Director in casual vacancy and holds office upto the date of this Annual General Meeting of the Company and is eligible for appointment and in respect of whom the Company has received a notice in writing from a member under the provisions of Section 160 of the Companies Act, 2013 proposing his candidature for the office of Director, be and is hereby appointed as a Director." To appoint a Director in place of Mr. D.K Sen (DIN: 03554707), who retires by rotation and is eligible for re-appointment; To appoint a Director in place of Mr. A.M Naik (DIN: 00001514), who retires by rotation and is eligible for re-appointment; D N Road Municipal Corporation Building O Chatrapati Shivaji Terminus (CST) LARSEN & TOUBRO AGM Venue : Birla Matushri Sabhagar, 19, Marine Lines, Mumbai - 400 020 LARSEN & TOUBRO LIMITED Regd. Office L&T House, Ballard Estate, Mumbai 400 001. CIN L99999MH1946PLC004768 Email: igrc@larsentoubro.com Website: www.larsentoubro.com Tel No.: 022-67525656 • Fax No.: 022-67525893 Notice NOTICE IS HEREBY GIVEN THAT the Seventy Third Annual General Meeting of LARSEN & TOUBRO LIMITED will be held at Birla Matushri Sabhagar, 19, Marine Lines, Mumbai - 400 020 on Thursday, August 23, 2018 at 3.00 P.M. to transact the following business :- 1) To consider and adopt the audited financial statements of the Company for the year ended March 31, 2018 and the Reports of the Board of Directors and Auditors thereon and the audited consolidated financial statements of the Company and the report of the auditors thereon for the year ended March 31, 2018; 2) To declare a dividend on equity shares; 3) To appoint a Director in place of Mr. Subramanian Sarma (DIN: 00554221), who retires by rotation and is eligible for re-appointment; 4) 5) To appoint a Director in place of Mrs. Sunita Sharma (DIN: 02949529), who retires by rotation and is eligible for re-appointment; 46 LARSEN & TOUBRO open for inspection at the Registered Office of the Company on all working days, except Saturdays, between 11.00 a.m. and 1.00 p.m. up to the date of the Annual General Meeting. [h] Members/Proxies should bring their attendance slips duly completed for attending the Meeting. The members who have cast their vote through remote e-voting prior to the AGM may also attend the AGM but shall not be entitled to cast their vote again. The remote e-voting period commences on Monday, August 20, 2018 at 9.00 A.M and ends on Wednesday, August 22, 2018 at 5.00 P.M. During this period, members of the Company holding shares 47 48 either in physical or dematerialised form, as on the cut-off date of August 16, 2018 may cast their vote by remote e-voting. The remote e-voting module shall be disabled by Karvy for voting thereafter. The Members, whose names appear in the Register of Members / list of Beneficial Owners as on August 16, 2018, are entitled to vote on the Resolutions set forth in this Notice. Eligible members who have acquired shares after the despatch of the Annual Report and holding shares as on the cut-off date i.e August 16, 2018 may approach the Company/ Karvy for issuance of the User ID and Password for exercising their right to vote by electronic means. Members who are already registered with Karvy for remote e-voting can use their existing user ID and password for casting their vote. In case they don't remember their password, they can reset their password by using "Forgot User Details/Password" option available on https://evoting.karvy.com The Company has appointed Mr. S. N. Ananthasubramanian, Practicing Company Secretary, (COP No. 1774) or failing him Mrs. Aparna Gadgil, Practicing Company Secretary, (COP No. 8430), to act as the Scrutinizer for conducting the voting and remote e-voting process in a fair and transparent manner. Members are requested to follow the instructions below to cast their vote through remote e-voting: A. In case a Member receives an e-mail from Karvy (for Members whose e-mail addresses are registered with the Company/ Depository Participants): (i) Launch internet browser by typing the URL: https://evoting.karvy.com. (ii) Enter the login credentials (i.e. User ID and Password which are mentioned in the email). Your Folio No./ DP ID-Client ID will be your User ID. However, if you are already registered with Karvy for e-voting, you can use your existing User ID and password for casting your vote. (iii) After entering these details appropriately, Click on "LOGIN". (iv) You will now reach password change Menu wherein you are required to mandatorily change your password. The new password shall comprise of minimum 8 characters with at least one upper case (A-Z), one lower case (a-z), one numeric value (0-9) and a special character (@,#,$, etc.). The system will prompt you to change your password and update your contact details like mobile number, email ID, etc. on first login. You may also enter a secret question and answer of your choice to retrieve your password in case you forget it. It is strongly recommended that you do not share your password with any other person and that you take utmost care to keep your password confidential. (v) You need to login again with the new credentials. (vi) On successful login, the system will prompt you to select the “EVENT” i.e., Larsen & Toubro Limited. (vii) On the voting page, enter the number of shares (which represents the number of votes) as on the Cut Off date under "FOR/ AGAINST" or alternatively, you may partially enter any number in "FOR" and partially in "AGAINST" but the total number in "FOR/AGAINST" taken together should not exceed your total shareholding as on the cut-off date. You may also choose the option ABSTAIN. If the Member does not indicate either "FOR" or "AGAINST" it will be treated as "ABSTAIN" and the shares held will not be counted under either head. (viii) Members holding multiple folios/demat accounts shall choose the voting process separately for each folios/demat accounts. (ix) You may then cast your vote by selecting an appropriate option and click on "Submit". (x) A confirmation box will be displayed. Click "OK" to confirm else "CANCEL" to modify. Once you confirm, you will not be allowed to modify your vote. During the voting period, Members can login any number of times till they have voted on the resolution(s). (xi) Institutional shareholders (i.e. other than individuals, HUF, NRI, etc.) are required to send scanned copy (PDF/JPG format) of the relevant Board Resolution/ Authority letter etc., together with attested specimen signature of the duly authorized signatory(ies) who are authorized to The Notice will be displayed on the website of the Company www.larsentoubro.com and on the website of Karvy https://evoting.karvy.com. Fountain A person whose name is recorded in the register of members or in the register of beneficial owners maintained by the depositories as on the cut-off date of Thursday, August 16, 2018 shall be entitled to avail the facility of remote e-voting or voting at the AGM. Persons who are not members as on the cut-off date should treat this notice for information purposes only. The businesses as set out in the Notice may be transacted through electronic voting system and the Company will provide a facility for voting by electronic means. In compliance with the provisions of Section 108 of the Act, read with Rule 20 of the Companies (Management and Administration) Rules, 2014, Standard 2 of the Secretarial Standards on General Meetings and Reg. 44 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company is pleased to offer the facility of voting through electronic means, as an alternate, to all its Members to enable them to cast their votes electronically. The facility of casting the votes by the members using an electronic voting system from a place other than the venue of the AGM (remote e-voting) will be provided by Karvy Computershare Private Limited (Karvy). [i] Pursuant to Section 124 of the Companies Act, 2013 the unpaid dividends that are due for transfer to the Investor Education and Protection Fund are as follows: Dividend Date of No. Declaration 82 26.08.2011 For the year ended 31.03.2011 Due for Transfer on 02.10.2018 83 84 85 86 87 88 24.08.2012 31.03.2012 29.09.2019 22.08.2013 31.03.2013 27.09.2020 22.08.2014 31.03.2014 27.09.2021 09.09.2015 31.03.2015 15.10.2022 26.08.2016 31.03.2016 02.10.2023 22.08.2017 31.03.2017 27.09.2024 Members who have not encashed their dividend warrants pertaining to the aforesaid years may approach the Company/its Registrar, for obtaining payments thereof atleast 20 days before they are due for transfer to the said fund. [j] Investor Grievance Redressal: The Company has designated an exclusive e-mail id viz. Igrc@Larsentoubro.com to enable Investors to register their complaints, if any. [k] Adhering to the various requirements set out in the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended, the Company has during the financial year 2017-18 transferred to the IEPF Authority all shares in respect of which dividend has remained unpaid or unclaimed for seven consecutive years or more as on the due date of transfer i.e October 31, 2017. Details of shares transferred to IEPF Authority are available on the website of the Company and the same can be accessed through the link: http://investors.larsentoubro.com/resources. aspx. The said details have also been uploaded on the website of the IEPF Authority and the same can be accessed through the link: www.iepf.gov.in. [1] SEBI has decided that securities of listed companies can be transferred only in dematerialized form with effect from December 5, 2018. In view of the above and to avail various benefits of dematerlisation, members are advised to dematerialize shares held by them in physical form. Please refer investor FAQ's page (Dematerialisation of shares) on our website www.investors.larsentoubro.com. [m] E-voting The facility for voting shall be made available at the AGM and the Members attending the Meeting who have not cast their vote through remote e-voting shall be able to exercise their right at the meeting. Please note that the voting through remote e-voting is optional for shareholders. 90000- Flora Maidan Services 7556 Financial Services Projects Developmental 28240 30375 18600 Others 19532 * Earnings before interest, depreciation, tax and amortisation as percentage of net segment revenue L&T CONSOLIDATED - SEGMENT-WISE TOTAL LIABILITIES 6166 80000- 70000- 60000- 50000- 40000- 33913 40932 Hv 30000- 20000- 10000- 31.03.2017 IT & Technology 9226 Hydrocarbon 31.03.2017 90000- 80000- 70000- 60000 €50000- Hv 40000- 30000- 20000- 10000- 0- Infrastructure 71842 87889 58443 6847 Power 6437 5124 Heavy Engineering 6625 Electrical & 4364 Automation 4412 6729 31.03.2018 Infrastructure 6362 Power Maharshi Karve Road Birla Matushri Sabhagar, 19, Marine Lines, Mumbai 400 020. Gol Masjid Walter D'Souza Udyan METRO Big Cinema Kala Niketan Maharshi Karve Road Queens Road UAH Khan Marg Maharshi Karve Road Bombay Hospital 44 Churchgate Railway Station Metro Cinema Petrol Pump Mahatma Gandhi Road Mahapalika Marg Mahapalika Marg Azad Marine Lines Flyover DN Road Railway Station Route Map to the AGM Venue 5647 3827 ☐ Heavy Engineering 5246 Electrical & 1936 Automation 2141 Hydrocarbon 5590 7841 64341 76384 Services 2182 IT & Technology 1894 Financial Services Developmental 8931 Projects 10516 6953 Others 6972 Total segment wise Assets as at 31.03.2017: 197933 crore and as at 31.03.2018: 230495 crore Total segment wise Liabilities as at 31.03.2017: 133747 crore and as at 31.03.2018: * 157861 crore Total liabilities for Financial Services and Developmental Projects predominantly comprises of borrowings 43 Marine Lines 7.1 7.7 H95000- 17.46 16.06 18.95 19.73 28.49 31.71 Gross Debt: Equity ratio 0.21:1 0.23:1 0.33:1 14.30 0.35:1 0.29:1 0.39:1 0.33:1 0.37:1 0.53:1 Basic earnings per equity share (*) # 38.46 39.00 35.81 36.31 0.34:1 12.39 12.37 11.32 9.98 9.86 9.23 11.38 11.78 10.60 11.82 12.84 13.00 11.56 PAT as % of net revenue from operations $ 7.23 8.30 7.91 8.87 9.71 8.50 8.38 9.01 11.82 10.26 RONW % * 39.57 operations @ 35.55 29.04 42,924 41,466 43,354 44,081 832,831 54,579 854,151 926,719 8,53,485 8,14,678 9,31,362 50,592 48,754 45,117 38,785 37,357 Figures for 2017-18, 2016-17 & 2015-16 are as per Ind AS and for earlier periods as per IGAAP and hence not directly comparable. Profit before depreciation, interest and tax (PBDIT) is excluding extraordinary/exceptional items wherever applicable and other income. PBDIT as % of net revenue from operations = [PBDIT/(gross revenue from operations less excise duty)]. ^^ @ No. of employees $ * RONW [(PAT including extraordinary/exceptional items)/(average net worth excluding revaluation reserve)]. # ## Basic earnings per equity share have been calculated including extraordinary/exceptional items and adjusted for all the years for issue of bonus shares. After considering adjustments for issue of bonus shares during the respective years. $$ Figures for the year 2008-09 to 2011-12 include Hydrocarbon business which has been transferred w.e.f April 1, 2013 to a wholly owned subsidiary. 40 40 Description LARSEN & TOUBRO Profit After Tax (PAT) as % of net revenue from operations = [(PAT including extraordinary/exceptional items)/(gross revenue from operations less excise duty)]. 8,53,824 9,23,628 10,28,541 8,99,902 32.79 26.44 Book value per equity share (*) ## Dividend per equity share (₹) ## 350.90 328.79 301.57 265.85 241.97 211.39 182.90 159.31 134.98 94.36 16.00 14.00 12.17 10.83 9.50 8.22 7.33 6.44 5.56 4.67 No. of equity shareholders 32.41 PBDIT as % of net revenue from Ratios and statistics Capital employed 63813 57558 57164 52196 53738 44296 37356 34337 PBDIT^^ 7429 66301 6481 6488 6667 5473 6283 5640 4816 3922 Profit after tax (excluding extraordinary/exceptional items) 4861 5829 74612 Gross revenue from operations Statement of Profit and Loss L&T offers a range of business-focussed digital solutions High-tech surveillance systems for Smart Cities Critical subsystems for all of ISRO's space missions Larsen & Toubro is a USD 18 billion technology, engineering, construction, projects, manufacturing and financial services conglomerate with global operations. Over the last eight decades, the Company, powered by its 'design-to-deliver' capabilities has earned a reputation for quality, reliability and strong customer orientation ensuring that it retains a leadership position in most of its lines of business. L&T has a track record of engagements in critical sectors. These include defence, construction, Regd. Office: Larsen & Toubro Limited, L&T House, N. M. Marg Ballard Estate, Mumbai - 400 001, INDIA CIN: L99999MH1946PLC004768 infrastructure, oil & gas, refineries, chemical, petrochemical and fertiliser industries, aerospace, power, electrical & automation, mining and metallurgy. The Company's design facilities and technology centres in India, the Middle East, USA and Europe keep pushing the design envelope, in-house testing centres take ideas to the next level and manufacturing facilities in eight countries transform them into reality. And in our quest for excellence, lies the source of many a global benchmark. LARSEN & TOUBRO LTCBMC/PRD/072018 Description STANDALONE FINANCIALS-10 YEAR HIGHLIGHTS crore Ind AS IGAAP 2017-18 2016-17 -7.0 2012-13 2011-12 2010-11 2009-10 2008-09 $$ 4560 4454 4699 4905 21846 18312 12460 10561 10558 13924 12936 11459 8478 9896 7161 6801 6556 59735 56571 56059 50021 45121 37769 35119 29007 25113 19016 25223 CONSOLIDATED FINANCIALS-10 YEAR HIGHLIGHTS 29291 37085 4169 4413 3676 3185 2709 Profit after tax (including extraordinary/exceptional items) 5387 5454 5000 5056 5493 4384 4457 3958 4376 3482 Balance Sheet Net worth Loan funds 49174 46013 42135 33662 Statement of Profit and Loss 2015-16 2014-15 2013-14 Ind AS 1.87:1 2.21:1 2.13:1 1.85:1 1.61:1 1.31:1 1.08:1 1.32:1 Basic earnings per equity share (<) # 52.62 1.75:1 43.20 34.22 35.31 37.69 34.14 32.69 40.84 28.78 Book value per equity share (*) ## 397.16 358.83 30.32 1.75:1 30.64 31.23 14.61 12.40 PAT as % of net revenue from operations $ 6.16 5.53 4.19 5.18 5.76 6.99 7.30 8.56 12.40 9.35 RONW % * 13.92 12.80 9.91 12.13 13.71 16.47 17.26 19.38 316.20 293.29 271.10 244.40 213.09 170000- 150000- 142995 130000- crore 110000- HV 90000- L&T CONSOLIDATED - GROSS REVENUE FROM OPERATIONS AND PAT -9.0 120000 152908 115000- 110011 110000- -8.0 105000- -7.5 Percentage 6041 crore 100000- crore L&T CONSOLIDATED - ORDER INFLOW 14.75 crore 41 182.65 154.70 105.90 Dividend per equity share (*) ## 16.00 14.00 12.17 10.83 9.50 8.22 7.33 6.44 5.56 4.67 Figures for 2017-18, 2016-17 & 2015-16 are as per Ind AS and for earlier periods as per IGAAP and hence not directly comparable ^^ @ Profit before depreciation, interest and tax [PBDIT] is excluding extraordinary/exceptional items wherever applicable and other income. PBDIT as % of net revenue from operations =[PBDIT/(gross revenue from operations less excise duty)]. $ Profit after tax (PAT) as % of net revenue from operations = [PAT including extraordinary/exceptional items/(gross revenue from operations less excise duty)]. * RONW [(profit attributable to group shareholders including extraordinary/exceptional items)/(average net worth excluding revaluation reserve)]. # Basic earnings per equity share has been calculated including extraordinary/exceptional items and adjusted for all the years for issue of bonus shares. ## After considering issue of bonus shares during the respective years. 42 13.81 -8.5 12.60 shareholders (excluding extraordinary/exceptional items) 7151 5920 4154 4470 4547 4911 4649 4238 Profit attributable to Group 3796 Profit attributable to Group shareholders (including extraordinary/exceptional items) 7370 6041 4233 4765 4902 5206 4694 3007 5024 6423 7677 IGAAP 13.33 2017-18 2016-17 2015-16 2014-15 2013-14 2012-13 2011-12 2010-11 2009-10 2008-09 Gross revenue from operations 119862 110011 101975 92762 85889 75195 64960 52470 44310 40932 13571 11130 10463 11258 10730 9929 8884 4456 5451 PBDIT^^ Balance Sheet 80330 62672 47150 32798 22656 18400 Capital employed 168806 147735 135208 136479 121221 99185 78290 58875 44734 33447 Ratios and statistics 11.34 10.18 12.24 3789 10.35 90571 88135 PBDIT as % of net revenue from operations @ 107524 93954 50217 44180 37712 33860 29387 25051 20991 Net worth 13988 Non-controlling interest 40909 3564 Loan funds 5625 1059 1087 1026 55657 1753 2653 3179 4999 2893 L&T Cassidian Limited L&T Finance Holdings Limited L&T Metro Rail (Hyderabad) Limited Shares No. of shares Type of A) Shares acquired during the year: Name of the Company During the year under review, the Company subscribed to acquired equity / preference shares in various subsidiary/joint venture companies. These subsidiaries include companies in financial services, power, defence and infrastructure sectors. The details of investments/ divestments in subsidiary companies during the year are as under: SUBSIDIARY / ASSOCIATE / JOINT VENTURE COMPANIES: The Company sends specific advance communication to the concerned shareholders at their address registered with the Company and also publishes notice in news papers providing the details of the shares due for transfer and for taking appropriate action. The shareholder/ claimant can file only one consolidated claim in a financial year as per the IEPF rules. All corporate benefits accruing on such shares viz. bonus shares, etc. including dividend shall be credited to IEPF. in accordance with the procedure available on www.iepf.gov.in and on submission of such documents as prescribed under the IEPF Rules. In accordance with the provisions of the Section 124(6) and Rule 6(3)(a) of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ('IEPF Rules'), the Company has transferred 12,88,543 equity shares of 2 each (0.09% of total number of shares) held by 11,756 shareholders (1.25% of total shareholders) to IEPF. The said shares correspond to the dividend which had remained unclaimed for a period of seven consecutive years from the financial year 2009-10. Subsequent to the transfer, the concerned shareholders can claim the said shares along with the dividend(s) by making an application to IEPF Authority The Company has not accepted deposits from the public falling within the ambit of Section 73 of the Companies Pursuant to SEBI circular dated April 20, 2018, the Company has sent communications to members whose dividends are unclaimed requesting them to provide/ update bank details with the RTA/Company, so that dividends paid by the Company are credited to the investor's account on time. During the year, the Company has transferred a sum of 3,24,69,075 to Investor Education & Protection Fund (IEPF), the amount which was due & payable and remained unclaimed and unpaid for a period of seven years as provided in section 125 of the Companies Act, 2013 and the rules made thereunder. Despite the reminder letters sent to each shareholder, this amount remained unclaimed and hence was transferred. Cumulatively, the amount transferred to the said fund was 20,41,00,830 as on March 31, 2018. SEBI has proposed to prohibit transfer of shares in physical form. In view of the numerous advantages offered by the Depository system as well as to avoid frauds, members holding shares in physical mode are advised to avail of the facility of dematerialization from either of the depositories. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND: As the members are aware, the Company's shares are compulsorily tradable in electronic form. As on 31st March 2018, 98.2% of the Company's total paid up capital representing 1,37,61,98,681 shares are in dematerialized form. DEPOSITORY SYSTEM: Act, 2013. The Company does not have any unclaimed deposits as of date. All unclaimed deposits have been transferred to Investor Education & Protection Fund. Equity 53 54 The Company sends reminder letters to all shareholders, whose dividends are unclaimed so as to ensure that they receive their rightful dues. Efforts are also made by the Company in co-ordination with its Registrar to locate the shareholders who have not claimed their dues. Shares Equity LARSEN & TOUBRO 1. The Company has sold its entire stake in EWAC Alloys Limited, a wholly owned subsidiary, to ESAB Holdings Limited. DEPOSITS: 100 2,600 4,68,292 10,56,363 68,000 shares 8,29,440 Number of EWAC Alloys Limited (Note 1) L&T Cutting Tools Limited (Note 2) L&T Technology Services Limited (Note 3) Larsen & Toubro Infotech Limited (Note 3) L&T Devihalli Hassan Tollway Limited L&T Krishnagiri Walajahpet Tollway Limited Note: B) Equity shares sold/transferred during the year: Name of the Company 61,83,29,988 47,50,80,000 Preference Shares Preference Shares L&T Special Steels & Heavy Forgings Private Limited L&T Shipbuilding Limited L&T Uttaranchal Hydropower Preference 18,98,00,000 Limited 25,500 Equity L&T MBDA Missile Systems Limited 14,47,84,161 Equity 10,78,10,899 13,000 As at 31st March 2018 the gross property, plant and equipment, investment property and other intangible assets including leased assets, stood at 10,935.39 crore and the net property, plant and equipment, investment property and other intangible assets, including leased assets, at 7,593.40 crore. Capital Expenditure during the year amounted to 1,136.78 crore. remeasurement of the net defined benefit plans The divestment of E&A business is in line with the Company's stated intent of unlocking value within the existing business portfolio to streamline and allocate capital and management focus for creating long-term value for our stakeholders. The Company believes that the partnership with Schneider is win-win for our employees, business partners and shareholders. 7710.27 11225.53 Add: Balance brought forward from previous year 5453.74 5387.30 Balance Sheet Profit for the period carried to 6757.84 1304.10 5863.87 893.97 Less: Dividend paid during the previous year (Including dividend distribution tax) 430.53 7262.38 1875.08 Profit before tax Add: Exceptional Items 6831.85 Profit before exceptional items and tax 1215.19 1049.46 impairment and obsolescence 2. The Company has sold its entire stake in L&T Cutting Less: Depreciation, amortization, Less: Provision for tax 2278.69 1842.71 Add: Gain/(Loss) on Subsequent to the year under review, on 1st May 2018, the Company has signed, subject to regulatory approvals, definitive agreements with Schneider Electric, a global player in energy management and automation for strategic divestment of its Electrical and Automation (E&A) business for an all-cash consideration of 14,000 crore. DIVESTMENT OF ELECTRICAL & AUTOMATION BUSINESS: CRISIL has assigned AAA (Stable) rating for L&T's long- term debt facilities. In addition, ICRA also has assigned AAA (Stable) rating for certain borrowings of the Company. The Company reduced long-term borrowings during the year under review by way of repayment of foreign currency borrowings worth US$ 171 million on scheduled due dates. Additionally, the Company refinanced USD 470 million of external commercial borrowings while retaining existing maturities, to take benefit of the prevailing interest rates in the market. The Company did not raise any fresh long-term borrowings during FY2017-18. The Company has not defaulted on any of its dues to the financial lenders. The shareholders of the Company approved the issue of bonus shares in the ratio of 1:2 (1 bonus share for every 2 shares held) through postal ballot on 5th July 2017. The Company accordingly allotted 46,67,64,755 bonus shares on 15th July 2017. of stock options by the eligible employees under the Employee Stock Option Schemes. During the year under review, the Company allotted 16,38,898 equity shares of 2/- each upon exercise CAPITAL & FINANCE: The Directors recommend payment of final dividend of 16 per equity share of 2/- each on 1,40,13,69,456 shares. 14250.01 11225.53 87.75 102.18 Balance to be carried forward Less: Debenture Redemption Reserve (which the Directors appropriate as follows) 14352.19 11313.28 Balance available for disposal 15.55 Add: Transfer under scheme of arrangement (8.02) 2.50 CAPITAL EXPENDITURE: 3. The terms and conditions of appointment of the Independent Directors are in compliance with the provisions of the Companies Act, 2013 and are placed on the website of the Company http://investors.larsentoubro. com/Listing-Compliance.aspx. The Company has sold shares of L&T Technology Services Limited and Larsen & Toubro Infotech Limited in the open market towards partly meeting its mandatory obligation to reduce promoter shareholding in these companies. f) e) The Directors have laid down an adequate system of internal financial control to be followed by the Company and such internal financial controls are adequate and operating efficiently; d) The Directors have prepared the Annual Accounts on a going concern basis; c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; In the preparation of Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; b) The Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period; a) DIRECTORS' RESPONSIBILITY STATEMENT: The Board of Directors of the Company confirms: As per the provisions of Section 92(3) of the Companies Act, 2013, an extract of Annual Return in Form MGT-9 is attached as Annexure 'F' to this Report. EXTRACT OF ANNUAL RETURN: The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and were operating effectively. The Company has received Declarations of Independence as stipulated under Section 149(7) of the Companies Act, 2013 from Independent Directors confirming that he/she is not disqualified from appointing/ continuing as Independent Director. The same are also displayed on the website of the Company http://investors.larsentoubro.com/Listing-Compliance.aspx. The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Companies Act, 2013. The Committee has formulated a policy on Directors' appointment and remuneration including recommendation of remuneration of the key managerial personnel and other employees, board diversity, composition and the criteria for determining qualifications, positive attributes and independence of a Director. Nomination and Remuneration policy is provided as Annexure 'H' forming part of this Board Report and also disclosed on the Company's website at http://investors.larsentoubro.com/Listing-Compliance.aspx. The Committee has also formulated a separate policy on Board Diversity. The Company has in place a Nomination and Remuneration Committee in accordance with the requirements of the Companies Act, 2013 read with the rules made thereunder and Regulation 19 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The details relating to the same are given in Annexure 'B' - Report on Corporate Governance forming part of this Board Report. Members are requested to refer to pages 75 to 79 of this Annual Report. The Company has in place an Audit Committee in terms of the requirements of the Companies Act, 2013 read with the rules made thereunder and Regulation 18 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The details relating to the same are given in Annexure 'B' - Report on Corporate Governance forming part of this Board Report. Members are requested to refer to pages 73 to 75 of this Annual Report. COMPANY POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION: AUDIT COMMITTEE: LARSEN & TOUBRO 56 This information is given in Annexure 'B' - Report on Corporate Governance forming part of this Report. Members are requested to refer to pages 70 and 71 of this Annual Report. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS: etc. DECLARATION OF INDEPENDENCE: The Company has also disclosed on its website http:// investors.larsentoubro.com/Listing-Compliance.aspx details of the familiarization programs to educate the Directors regarding their roles, rights and responsibilities in the Company and the nature of the industry in which the Company operates, the business model of the Company, ADEQUACY OF INTERNAL FINANCIAL CONTROL: The Company has designed and implemented a process driven framework for Internal Financial Controls ("IFC") within the meaning of the explanation to Section 134(5) (e) of the Companies Act, 2013. For the year ended 31st March 2018, the Board is of the opinion that the Company has sound IFC commensurate with the nature and size of its business operations and operating effectively and no material weakness exists. The Company has a process in place to continuously monitor the same and identify gaps, if any, and implement new and/or improved controls wherever the effect of such gaps would have a material effect on the Company's operations. The Nomination & Remuneration Committee and the Board have laid down the manner in which formal annual evaluation of the performance of the Board, committees and individual directors has to be made. All 7079.06 Statutory Compliance: The Company complies with all applicable laws and regulations, pays applicable taxes on time, takes care of all its stakeholders, ensures statutory CSR spend and undertakes sustainable activities. Corporate Governance: Pursuant to Regulation 34 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, a Report on Corporate Governance and a certificate obtained from the Statutory Auditors confirming compliance, is provided in Annexure 'B' forming part of this Report. Integrated Reporting: Pursuant to SEBI Circular on Integrated Reporting, the Company shall be voluntarily complying with the requirements of the Integrated Reporting Framework and shall release its integrated report on its website www.larsentoubro.com. A certificate obtained from the Statutory Auditors, confirming compliance with the Companies Act, 2013 and the SBEB Regulations is also provided in Annexure 'B' forming part of this Report. The disclosures relating to ESOPs required to be made under the provisions of the Companies Act, 2013 and the rules made thereunder and the SBEB Regulations together with a certificate obtained from the Statutory Auditors, confirming compliance, is provided on the website of the Company http://investors.larsentoubro. com/Listing-Compliance.aspx. ESOP Disclosures: There has been no material change in the Employee Stock Option Schemes (ESOP schemes) during the current financial year. The ESOP Schemes are in compliance with Securities and Exchange Board of India (Share Based Employee Benefit) Regulations, 2014 ("SBEB Regulations"). OTHER DISCLOSURES: Awareness workshops/training programmes are conducted across the Company to sensitize employees to uphold the dignity of their colleagues at work place specially with respect to prevention of sexual harassment. This has been widely disseminated. During the year two complaints were received under the Act which have been investigated and disposed off after complying with due process. PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES, DIRECTORS AND CHAIRMAN: 58 PROTECTION OF WOMEN AT WORKPLACE: The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings. COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS: The information in respect of employees of the Company required pursuant to Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended from time to time, is provided in Annexure 'l' forming part of this report. In terms of Section 136(1) of the Act and the rules made thereunder, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any Shareholder interested in obtaining a copy of the same may write to the Company Secretary at the Registered Office of the Company. None of the employees listed in the said Annexure is related to any Director of the Company. The details of remuneration as required to be disclosed under the Companies Act, 2013 and the rules made thereunder, are given in Annexure 'D' forming part of this Board report. The Board Performance Evaluation inputs, including areas of improvement, for the Directors, Board processes and related issues for enhanced Board effectiveness were discussed in the meeting of the Independent Directors held on April 5, 2018 and in the subsequent Meetings of Nomination and Remuneration Committee and the Board. DISCLOSURE OF REMUNERATION: For the year under review, the questionnaire was modified substantially, based on the comments and suggestions received from Independent Directors. During the previous year(s) an external consultant was engaged to receive the responses of the Directors and consolidate/ analyze the responses. Based on the experience gained, during the current year, the same external consultant's IT platform was used from initiation and till conclusion of the entire board evaluation process. This ensured that the process was transparent and independent of involvement of the Management or the Company's IT system. This has enabled unbiased feedback. Directors responded through a structured questionnaire giving feedback about the performance of the Board, its Committees, Individual directors and the Chairman. 57 The Company has formulated a policy on 'Protection of Women's Rights at Workplace' as per the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 ('the Act'). Special resolutions for continuation of Mr. A. M. Naik as a Non-Executive Director, who has attained the age of 75 years, and for payment of remuneration to him which exceeds 50% of the total remuneration payable to all Non-Executive Directors taken together, forms part of the Notice being sent to the shareholders. The notice convening the AGM includes the proposal for appointment / re-appointment of Directors. Mr. A.M Naik and Mr. D. K. Sen retire by rotation at the ensuing AGM and being eligible offer themselves for re-appointment. The total income for the financial year under review was 76,496 crore as against 68,216 crore for the previous financial year registering an increase of 12%. The profit before tax from continuing operations including exceptional items was 7,262 crore for the financial year under review as against 6,758 crore for the previous financial year, registering an increase of 7%. The profit after tax from continuing operations including exceptional items was 5,387 crore for the financial year under review as against 5,454 crore for the previous financial year, registering a decrease of 1%. STATE OF COMPANY AFFAIRS: There were no materially significant related party transactions that may have conflict with the interest of the Company. All the related party transactions were in the ordinary course of business and at arm's length. The Audit Committee has approved all related party transactions for the FY 2017-18 and estimated transactions for FY 2018-19. The Company has a process in place to periodically review and monitor Related Party Transactions. The Audit Committee and the Board of Directors have approved the Related Party Transactions Policy and the same has been uploaded on the Company's website http:// investors.larsentoubro.com/Listing-Compliance.aspx. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES: provided as required under section 186 of the Companies Act, 2013 and Regulation 34(3) and Schedule V of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 in Note 37 and 38 forming part of the financial statements. The Company has disclosed the full particulars of the loans given, investments made or guarantees given or security AMOUNT TO BE CARRIED TO RESERVE: PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN OR SECURITY PROVIDED BY THE COMPANY: A statement containing the salient features of the financial statement of subsidiary/associate/joint venture companies and their contribution to the overall performance of the Company is provided on pages 463 to 472 of this Annual Report. E) Performance and Financial Position of each subsidiary/associate and joint venture companies: Seawoods Realty Private Limited Seawoods Retail Private Limited L&T Cassidian Limited Name of the Company During the year under review, the following companies applied to the Ministry of Corporate Affairs for strike off under the provisions of Companies Act, 2013: D) Companies Struck off: C) Companies merged / demerged during the year: Spectrum Infotech Private Limited, a wholly owned subsidiary of the Company was merged with the Company. The Scheme of Amalgamation was approved by National Company Law Tribunal, Mumbai bench, vide order dated February 21, 2018, and by National Company Law Tribunal, Bangalore bench, vide order dated March 27, 2018. Appointed date was April 1, 2017 and effective date was May 10, 2018. The Company has formulated a policy on identification of material subsidiaries in line with Regulation 16(c) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 and the same is placed on the website at http://investors.larsentoubro.com/Listing-Compliance. aspx. The Company does not have any material subsidiaries. The Company has not transferred any amount to the reserves during the current financial year. DIVIDEND: The Directors recommend payment of dividend of 16 (800%) per equity share of 2/- each (previous year ₹14) on the share capital amounting to approx. 2,600 crore (including DDT amounting to 358 crore). Mr. Subramanian Sarma, Mrs. Sunita Sharma, The Board has appointed Mr. Hemant Bhargava as a Director in the casual vacancy pursuant to the resignation of Mr. Sushobhan Sarker with effect from 28th May 2018. Mr. Bhargava is the nominee of Life Insurance Corporation of India. As per the provisions of Section 161(4) of the Companies Act, 2013, Mr. Bhargava will hold office till the ensuing AGM and is eligible for appointment. Mr. Sushobhan Sarker, nominee of Life Insurance Corporation of India, resigned as Director of the Company on 2nd May, 2018. The Board places on record its appreciation of the contribution by Mr. Sarker as Director of the Company. DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL APPOINTED/ RESIGNED DURING THE YEAR: 2014 are given in Annexure 'C' forming part of this Board Report. The disclosures required to be given under Section 135 of the Companies Act, 2013 read with Rule 8(1) of the Companies (Corporate Social Responsibility Policy) Rules, A brief note regarding the Company's initiatives with respect to CSR is given in Annexure 'B' - Report on Corporate Governance forming part of this Board Report. Please refer to Page 80 of this Annual Report. The CSR policy framework is available on its website http://investors.larsentoubro.com/Listing-Compliance.aspx. The Corporate Social Responsibility Committee comprises of Mr. Vikram Singh Mehta, Mr. R. Shankar Raman and Mr. D. K. Sen. Mr. Vikram Singh Mehta is the Chairman of the Committee. CORPORATE SOCIAL RESPONSIBILITY: A detailed note on risk management is given under financial review section of the Management Discussion and Analysis on pages 230 to 232 of this Annual Report. The Company has formulated a risk management policy and has in place a mechanism to inform the Board Members about risk assessment and minimization procedures and periodical review to ensure that executive management controls risk by means of a properly designed framework. The Risk Management Committee comprises of Mr. S. N. Subrahmanyan, Mr. R. Shankar Raman and Mr. Subramanian Sarma. Mr. S. N. Subrahmanyan is the Chairman of the Committee. RISK MANAGEMENT: Information as required to be given under Section 134(3) (m) read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is provided in Annexure 'A' forming part of this Board Report. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO: Other than as stated elsewhere in this report, there are no material changes and commitments affecting the financial position of the Company between the end of the current financial year and the date of this report. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY, BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT: uploaded on the Company's website at http://investors. larsentoubro.com/Listing-Compliance.aspx. 55 The Dividend is based upon the parameters mentioned in the Dividend Distribution Policy approved by the Board of Directors of the Company which is in line with regulation 43A of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The Policy is annexed as Annexure 'G' forming a part of this Board Report and also Tools Limited, a wholly owned subsidiary, to IMC International Metalworking Companies B. V. 7881.31 February 4, 1958 Particulars Item No. 11: None of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 10. The Directors recommend this Resolution for approval of the Shareholders. The shareholders through a resolution passed at their meeting held on August 22, 2017, approved issue of debentures to an amount not exceeding 6000 crore in aggregate. The Company has not raised funds under the said approval. However, such resolution is valid only for a period of 12 months from the date on which the approval is granted by the shareholders. Accordingly, the Shareholders' approval is sought for the period of next 12 months from the date of passing this resolution. This resolution is an enabling resolution and authorizes the Board of Directors of the Company to offer or invite subscription for non-convertible debentures, as may be required by the Company, from time to time for a year from the date of passing this resolution. In order to meet the financial needs of business in a prudent manner the Company may offer or invite subscription for secured/unsecured/redeemable/non- convertible debentures, in one or more series/tranches/ currencies on private placement, issuable/redeemable at par or otherwise. Section 42 of the Companies Act, 2013 read with Rule 14 of the Companies (Prospectus and Allotment of Securities) Rules, 2014 deals with private placement of securities by a company. Sub-rule (2) of the said Rule 14 states that in case of an offer or invitation for subscription to non- convertible debentures on private placement basis, the Company shall obtain prior approval of its shareholders by means of a special resolution once in a year for all the offers or invitations for such debentures during the year. The Company is into the business interalia of manufacturing of industrial goods, heavy engineering, infrastructure projects and other activities which require a sizeable investment and continuous expenditure. The Company intends to explore different avenues for garnering this financing requirement including by way of issuance of debt instruments. Item No. 10: Company and their relatives are concerned or interested in the resolutions set out at Item No. 8 and 9. In accordance with the provisions of Section 148 of the Companies Act, 2013 ("the Act") and the Companies (Audit and Auditors) Rules, 2014 ("the Rules") the Company is required to appoint a cost auditor to audit the cost records of the Company, for products and services, specified under Rules issued in pursuance to the above section. On the recommendation of the Audit Committee, the Board of Directors had approved the appointment of M/s. R. Nanabhoy & Co, Cost Accountants (Regn. No. 00010), as the Cost Auditors of the Company to conduct audit of cost records maintained by the Company for the Financial Year 2018-19, at a remuneration of ₹11.75 lakhs plus applicable taxes and out of pocket expenses at actuals for travelling and boarding/lodging. LARSEN & TOUBRO Except Mr. Naik being the appointee, none of the Directors or the Key Managerial Personnel of the The Board recommends approval of appointment and remuneration of Mr. Naik as Non-Executive Director of the Company, liable to retire by rotation. Disclosure as required under Secretarial Standard 2 on General Meetings is provided as an Annexure to the Notice. 5. Perquisite value of Company accomodation. Regulation 17(6)(ca) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, effective from April 1, 2019, requires companies to obtain approval of the shareholders by passing of a special resolution, every year, for payment of remuneration to Non-Executive Director exceeding fifty percent of the total annual remuneration payable to all Non-Executive Directors. Accordingly, shareholders approval is sought for appointment/continuation of Mr. A.M. Naik as Non- Executive Chairman. Approval is also sought for payment of remuneration to Mr. A. M. Naik, Non-Executive Chairman till the next AGM. 4. Reimbursement of medical expenses in accordance with the policy of the Company. Maintain an office with staff at the Company's expense. 3. Car & Driver, telephone & communication facilities and club membership. Commission: Fixed amount of 5 crore p.a. within the overall limits approved by the shareholders of the Company for payment of remuneration to NED's. 50 2. M/s. R. Nanabhoy & Co., Cost Accountants, have furnished certificates regarding their eligibility for appointment as Cost Auditors of the Company. In accordance with the provisions of Section 148 of the Act read with the Rules, the remuneration payable to the cost auditor has to be ratified by the shareholders of the Company. The Directors recommend this resolution for approval of the shareholders. including private companies which are subsidiaries Directorships held in other public companies Expertise April 1, 2015 August 19, 2015 March 9, 1959 Date of Birth Date of Appointment on the Board Qualifications Mrs. Sunita Sharma Mr. Subramanian Sarma Accordingly, consent of the members is sought for the aforesaid purpose. Name of the Director ANNUAL GENERAL MEETING DETAILS OF DIRECTORS SEEKING APPOINTMENT/RE-APPOINTMENT AT THE FORTHCOMING (ANNEXURE TO NOTICE DATED MAY 28, 2018) 51 The route map for the venue of the Annual General Meeting of the Company is given on page 44 of this Annual Report 2017-18 N. HARIHARAN COMPANY SECRETARY M.No - A3471 Mumbai, May 28, 2018 By Order of the Board of Directors For LARSEN & TOUBRO LIMITED None of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 11. [Pursuant to Regulation 36(3) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard 2 on General Meetings] 1. Mr. Naik in the capacity of Non-Executive Chairman, in addition to sitting fees, will be entitled to remuneration/ benefits as per the following terms and conditions: seamless transition of leadership, need for providing advice, guidance and mentorship to the Company's executive management, considering the complexity of the Company's business, approved the appointment of Mr. A.M Naik as Non-Executive Chairman of the Company. Regulation 17(1A) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, effective April 1, 2019, requires companies to obtain approval of shareholders by passing a special resolution for appointment or continuation of any Non-Executive Director who has attained the age of seventy-five years. To facilitate smooth registration / entry at the AGM, the Company has also provided a web check-in facility, which would help the Members enter the AGM hall expeditiously. [o] Web check-in information / clarifications pertaining to the Annual Report in advance. Members can post their queries related to this Annual Report by using their secure login credentials on the e-voting website of Karvy at https://evoting.karvy.com/. The Company is pleased to provide the new Online Query Module to enable the Members to seek [n] Online Query Module The results declared alongwith the Scrutinizer's report, will be posted on the website of the Company www.larsentoubro.com and on the website of Karvy at www.evoting.karvy.com and will be displayed on the Notice Board of the Company at its Registered Office as well as Corporate Office immediately after the declaration of the result by the Chairman or any person authorised by him in writing and will be communicated to the Stock Exchanges. The Scrutinizer will submit his report to the Chairman after completion of the scrutiny. The result of the voting on the Resolutions at the Meeting shall be announced by the Chairman or any other person authorized by him immediately after the results are declared. A Member can opt for only one mode of voting i.e. either through remote e-voting or at the Meeting. If a Member casts votes by both modes, then voting done through remote e-voting shall prevail. Please follow all steps from Sr. No. (i) to Sr. No. (xi) in (A) above, to cast your vote. Based on the report received from the scrutiniser the Company will submit within 48 hours of the conclusion of the Meeting to the stock exchanges details of the voting results as required under Reg. 44(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Procedure for web check-in for the AGM is as follows: Password User ID and initial password are provided at the bottom of the Attendance Slip in the following format: 2. 1. In case a Member receives physical copy of the Notice of AGM (for Members whose email addresses are not registered with the Company/ Depository Participants or requesting physical copy): (xii) In case of any queries, please visit Help and Frequently Asked Questions (FAQs) section available at Karvy's website www.evoting.karvy.com. vote, to the Scrutinizer through e-mail to scrutinizer@snaco.net, with a copy marked to evoting@karvy.com. B. LARSEN & TOUBRO As per the provisions of Section 177(9) of the Companies Act, 2013 ('Act'), the Company is required to establish an effective Vigil Mechanism for directors and employees to report genuine concerns. User ID . Log in to https://karisma.karvy.com and click on the AGM Web Check-in link. • Select the Company name, 'Larsen & Toubro Limited'. The Board of Directors of the Company, on the recommendation of the Nomination and Remuneration Committee and taking into account the need for Mr. A.M Naik, aged 75 years, was appointed as a Non-Executive Chairman of the Company for a period of 3 years with effect from October 1, 2017, after his superannuation as Executive Chairman of the Company. Mr. A.M. Naik is strongly identified with the growth of the Company and its contribution to strategic sectors of Defence, Nuclear Power, Space Research and Infrastructure. Mr. Naik has been awarded four doctorates and numerous awards from institutions and industry. He has also served as the Chairman of IIM Ahmedabad. Mr. A. M. Naik is entitled to retirement benefits as per the policy of the Company. Mr. A.M Naik has been associated with Larsen & Toubro Limited for over five decades. During his tenure as Executive Chairman he played a key role in the Company's rise to its pre-eminent position, and its presence overseas, boosting employee morale and focusing on delivering superior value to stakeholders. His term as Executive Chairman expired on September 30, 2017. Item No. 8 and 9: Except Mr. Hemant Bhargava, being an appointee, none of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 7. The Board considers that his association would be of immense benefit to the Company and it is desirable to avail services of Mr. Bhargava as a Director. Accordingly, the Board recommends the resolution in relation to appointment of Mr. Bhargava as a Director, for the approval by the shareholders of the Company. Disclosure as required under Secretarial Standard 2 on General Meetings is provided as an Annexure to the Notice. Mr. Bhargava holds an M.A in Economics and has also completed his masters in Financial Management. He has an overall experience of 35 years with LIC where he has worked in several capacities in Marketing, International Operations, Joint Ventures etc. Mr. Hemant Bhargava is currently the Managing Director of Life Insurance Corporation of India (LIC) and has been nominated by LIC on the Board of the Company. from a member under the provisions of Section 160 of the Companies Act, 2013 proposing the candidature of Mr. Hemant Bhargava as Director. 49 On the recommendation of the Nomination & Remuneration Committee, Mr. Hemant Bhargava (DIN: 01922717) was appointed by the Board of Directors as a Director in casual vacancy caused due to the resignation of Mr. Sushobhan Sarker. Pursuant to Section 161(4) of the Companies Act, 2013 Mr. Hemant Bhargava will hold office up to the date of the forthcoming Annual General Meeting. The Company has received a notice in writing Item No. 7: As required by Section 102 of the Companies Act, 2013, the following Explanatory Statement sets out material facts relating to the business under items 7 to 11 of this Notice dated May 28, 2018. EXPLANATORY STATEMENT Your Company is pleased to provide the facility of live webcast of proceedings of AGM. Members who are entitled to participate in the AGM can view the proceeding of AGM by logging on the e-voting website of Karvy at https://evoting.karvy.com using their secure login credentials. Members are encouraged to use this facility of webcast. [p] Webcast The Attendance Slip in PDF format shall appear on the screen. Select the print option for printing or download the Attendance Slip for future reference. After validating the credentials, click on 'Generate my Attendance Slip'. Enter the security credentials as directed and click on 'Submit'. of public companies Profit Before Depreciation, exceptional items & Tax (excluding companies) Shareholding of the year attended during Meetings 5 6 3 6 Number of 63150 Not Applicable Responsibility Committee Corporate Social Limited 3. L&T Technology Services 52 * LIC Pension Fund Limited Audit Committee Member L&T Welfare Company Limited 7. The Tata Power Company Limited 150* Not Applicable crore 2016-17 2017-18 crore FINANCIAL RESULTS: The Directors have pleasure in presenting their 73rd Annual Report and Audited Financial Statements for the year ended 31st March 2018. Dear Members, Board Report LARSEN & TOUBRO Jointly with Life Insurance Corporation of India 424958 directors inter-se Nil Nil Nil Nil Nil Relationships Directors Non-Executive 90 between and Financial Services Limited 6. Infrastructure Leasing 5. Voltas Limited 4. 3. L&T Realty Limited 2. L&T Technology Services Limited 1. Larsen & Toubro Infotech Limited Diverse and vast experience in General Management, Technology, Engineering & Construction National Stock Exchange of India Limited Vast Experience in Insurance and Housing Finance Masters Degree in Science B.E (Mech.) May 28, 2018 L&T Welfare Company July 20, 1959 June 9, 1942 November 23, 1989 Mr. Hemant Bhargava Mr. D.K Sen Mr. A.M Naik L&T Hydrocarbon Engineering Limited Committee Memberships/ Chairmanships of committees across all companies L&T Hydrocarbon Engineering Limited Masters Degree in Chemical Engineering from IIT Bombay Expertise in managing large business portfolios in energy sector. March 19, 1956 October 1, 2015 Limited Member Nomination & Remuneration Committee Member Trustee Private Limited 4. LIC Mutual Fund Limited 3. LIC HFL Care Homes Company Limited 2. LIC HFL Asset Management 1. LIC Pension Fund Limited Vast Experience in Insurance Sector M.A (Economics) Larsen & Toubro Limited Member Corporate Social Responsibility Committee 2. L&T Aviation Services Private Limited Vast experience in Design and Engineering, Business Development, Tendering and Construction 1. L&T Infrastructure Engineering Limited B.SC Engg. (Civil), MBA (Finance) 1. Larsen & Toubro Limited Larsen & Toubro Infotech Limited 2. Larsen & Toubro Limited Chairperson Stakeholders Relationship Committee Remuneration Nomination and foreign VIGIL MECHANISM: 49 - Received an award for "Use of High Volume Fly Ash Pre-Stressed Concrete in Nuclear Reactor Dome Construction" to the Main Plant Package of Kakrapar Nuclear Power Project 3 & 4 from Indian Concrete Institute under the category of "Innovative application of special concrete" Innovation initiative with technological university in treatment process design for the development of Sequential Batch Biofilm Reactor (SBBR) for municipal wastewater treatment Mitigating to 3D systems from 2D Grade Control Systems in phased manner . • • • (ii) Benefits derived like product improvement, cost reduction, product development or import substitution: Improvement in the design of roll for better service life of Roll Crusher. In-house designed and indigenized Maintenance Vehicle above the Pipe Conveyor which reduces the requirement of walkway galleries 65 In-house designed and commissioned the Single Flight Pipe Conveyors of Dia 425 mm with a length of 2.56 km Designed and manufactured high capacity (8400 TPH) and bigger Boom Length (58m) Stacker cum Reclaimer Development of Mobile Crushing Plant with Roll Crusher Indigenized the technology for Sand separation by air classifier Development of various models of semi-mobile skid mounted crushing unit (with Feeder Breaker, Roll Crusher & Impactor) to meet specific applications for crushing Fuel distribution wastage avoided by implementing hygienic handling of digitized fuel browser Implementation of mobile app based solution resulted in savings in usage of paper Installation of Single Stage Centrifuge for low power consumption factor, which yields a saving of 10% power for Blower Unit of Larger Capacity Wastewater Treatment Plants Obtained patent for 20 years by IP-India for Concrete Heavy Duty Rheometer was granted patent Bigger model of Surface Miner for higher productivity and cost reduction Usage of high performance anti-stripping agents resulted into better Long-term Durability of Flexible Pavement and high resistance to moisture Usage of geocell system for lined drain in lieu of reinforced concrete lined drain/stone pitching and drainage geocomposite in retaining wall application has been simple, faster to execute and cost effective Cost Optimization by reinforcing Soil Wall system in economical by 10-15% instead of conventional RCC retaining walls Economical and cost effective piles in solar projects which saves time The 1st batch of Bridge Engineering programme was successfully completed by HCI IC in association with VIT Chennai New models of High Proportion and systems Concrete mix design were introduced - High Performance Concrete Rebar lifter usage over manual handling has reduced Work at Height Tandem Tippler technology has been fully absorbed Improved cycle time due to Short Line Mould Precast segment production Application of advanced shotcrete technology in tunnel construction Development of in-house RCPT apparatus has been robust and eco-friendly Improving the aesthetics of the roads and implementation advanced new material technologies Introduction of Fixed-Bed Biofilm Activated Sludge in Bhatpara wastewater Treatment Plant Introduction of grid tied solar plant which powers the production plants ie. batching plants and crushers Implemented optimized pavement overlay solution by LTCRTC and optimization of conventional concrete mixes for foundation structures for various PTD project sites for bridge decks with light weight concrete, geotextiles and asphalt concrete Developed a new resurfacing technology Development of Eco-friendly concrete mixes with waste materials Usage of FWD in overlay design provides a realistic assessment of the strength of existing pavement and thereby provides appropriate overlay design resulting in long-term performance of pavement Zinc ore Beneficiation process technology has been fully absorbed & indigenized while executing the project for Mine 3 Inclusion of 3D-Biaxial Geogrids in Railway Embankment for blanket layer reduction with the approval of RDSO Barrette Pile Reinforcement Embedment Depth inside the Base Slab for Thousand Light & LIC under ground station Installation of grid power system to save electricity Installation of Fuel sensors to monitor the fuel consumption and optimize its usage Installation of fuel meters and other sensors to track vehicles and measure their idle time, working time and productivity Use of RFID and LORA technologies to track worker to measure efficiency and productivity Tagging of pre-cast segments for easier identification and later usage Installation of PLC controlled "Auto Mode" Plant and Office Lighting Successful completion of Temperature controlled concrete (M45 Grade) of Single largest pour 7232Cum <23°C within 94 hrs. first time in DAE and achieved the all quality & specification requirements also used the 750 MT of ice from inside & outside meeting the stringent chloride requirements - Kalpakkam Indigenously implemented the M75 Grade Self- Compacting Concrete for the first time in India in Pylons of Extradosed Bridge - Barapullah Implemented 'Base Grouting' and Strand Jack Erection Methodology -MTHL Develop the Offcut area Dia wise to utilize the proper utilization of offcut & reduce the Scrap Percentage Purchase of Scrap Strengthening Machine to reduce the Lower dia Scrap additional safety device (emergency control Device) in EOT Crane Installation of the rotary limit switch and Installation of solar lighting system in raw material yard Development of automatic ring collecting system in lower Dia machine 64 ... LARSEN & TOUBRO • Usage of flexible pavement overlay design using data from Falling Weight Deflectometer (FWD) Implementation of BIM for ongoing projects - Dholera Smart City, Auric Bidkin Industrial Area, BIAL and Mauritius Metro Express Project Utilization of Drainage Geocomposite as an alternative to conventional filter media in Retaining Systems Implementation of Concrete Infilled Geocell System for Lined Drains in ULEP Completed construction of 71m high Reinforced Soil Slope System at Kannur International Airport Usage of high quality and high performance anti-stripping agent in bituminous layers Implementation of Reinforced Soil Wall System in CTP 2 in the DFCC Project Introduction of RTSP (Real Time Streaming Protocol) feature on the Devices to get Video and Data Streams for identifying vehicles travelling over the legal speed limit from multiple cameras Creation of "ProdoSpec" application to optimize the activities of operations, supply chain, technical team involved in choosing a product/ solution that fits to the project requirement Developed and tested an indigenous solution for "Smart Bin Management" using advanced video analytics on CCTV camera to alert the crew for waste collection Application of Finite Element Analysis (FEA) for in-house design of Cantilever Assembly with capacity to supply traction power for running double stack containers for WDFC projects Successfully integrated the Emergency response System with the existing Mumbai CCTV Surveillance System Introduced the rejection rework manual strengthening bench and the Laminated Colour Tag for Identification purpose - CNCL Developed the 16mm Dia - 240mm circular rings to Ford Site, reused from Scrap bar & end pits to 8mm 110mm Hooks to Residential Project Installed new Reverse Osmosis plant and reusing the STP/ETP water which reduced the paint shop water consumption Implementation of Ultrafiltration system which is capable of producing a total filtrate flow and Reverse Osmosis (RO) & Mixed Bed (MB) system in Sagardighi PWS 2 Inclusion of polyelectrolyte in flocculation zone of High Rate Solid Contact Clarifier (HRSCC) in Sagardighi PWS 2 which combines mixing, coagulation, flocculation, liquid/solid separation, sludge recirculation/ withdrawal in one unit and effective floc formation Biological Nutrient Removal processes are recommended by recent guidelines of CPHEEO to prevent excess plant nutrients from wastewater Designed and commissioned the Smart Pole for Vishakhapatnam Smart City with CCTV Cameras, Public Address System, Emergency Call Boxes, Wi-Fi Access Points and Environmental Sensors Developed an integrated state of the art ICCC Platform solution with the Smart Elements for Pune Smart City Developed evaluation methods for geosynthetic products In-house designed, developed and commissioned the regenerative Conveyors which produces energy on downward slope LARSEN & TOUBRO (Membrane Bioreactor) MBR Estate, New Delhi. Plant Works for the 5 new 2016 Treatment in Sewage Removal 2015 Vortex Grit c) 2 MLD STP at President's Absorbed successfully in the Implementation of Ultra Violet (UV) disinfection system for secondary treated wastewater. This is preferred over the conventional chlorination system which has harmful side effects due to the presence of carcinogens in residual chlorine. Technology pumping stations of Greater Colombo project is in progress. It is the first of its kind Fully absorbed this 2017 Import non-absorption, if any cables inside Power Duct Power 220kV ground 2017 Under- Magnetic Field f) conventional grit removal system for its high grit removal efficiency and compactness. This is preferred over the easy maintenance. less area and thus leads to to be installed in India for sewage application. It operates on VORTEX Principle where the grit removal happens by tangential Centrifugal force. Grit removal efficiency is about 95 %. The major advantage of this system is that they occupy Analysis for 66 2016 Implementing for the India's largest gravity channel UV disinfection system in 120 MLD Varanasi STP. would install FGDs. No. Imported Status of absorption & Year Technology S. reasons for of Imported No. Status of absorption & Year Technology S. during the last 3 years: (iii) Information regarding technology imported of reasons for 2017 Import system disinfection 2015 UV b) 2015 Constructed Wetland Absorbed successfully in the 2 MLD President estate STP. d) the completion of the first completion is linked with Absorption has been initiated in FY 2016-17. Its 2016 Flue Gas Desulphuri- zation a) non-absorption, if any project where L&T Power technology and are Development of interface constants for rock masses and shotcrete Conducted studies on sprayed fire-resistive material applied to structural members, suitability of proximity switches used in nuclear reactors, influence of aging asphalt on resilient modulus of asphalt concrete, influence of polymer modified asphalt binders on force ductility, 3D concrete applications, maturity models in concrete, fatigue behavior welded steel members, lightweight form work applications, continuous flight auger pile and industrial treated waste water processing methods Change in Big Rolling Machine Pumps operation sequence and switched off 3 pumps during auxiliary operation Use of HF Generator Auto ON/OFF system implemented at Hazira Replacement of conventional MH Lamps and fluorescent tube lights by LED lamps in working areas at office and projects as well as for street lights of V belt in Line 2 Dust collection system which reduced the speed loss and pulley modified which reduced the power cost Implementation of Cogged belt drive instead Introduced the forced natural Evaporator for treating the RO reject water and achieved Zero discharge Implemented eco-friendly direct heating system instead of Thermic fluid heating system and reduced the LPG consumption Deployment of bucket crushers to recycle the excavated boulders and rocks for re-use as aggregates in concrete production Replacement of the electrical heating coil vapourizer typically used with heater less hot water vapourizer in TLT factory Vaporization of liquefied LPG from cylinders in galvanizing plant Installing censors in welding machines to identify consumption of electricity Deployed power reduction tool in all Desktop's and Laptop's in Vadodara and at all project sites • . (i) Steps taken or impact on conservation of energy: Decentralizing Air Compressor System at Kansbahal Works Use of Electrical Preheating instead of NG Preheating by temp control panels at Hazira Transformer made off through proper utilization as per load and saving of no load losses of transformer Installation of Occupancy Sensors and time switches with switching mechanism for Shop Offices ACs and Lights at VHEW Identification of Compressed air Leaks through Ultrasonic Leak detection system and arrest them in various shops at VHEW (ii) Steps taken by the Company for utilizing alternate sources of energy: Initiative has been taken for replacement of Air Cooled Chiller with Water Cooled Chiller. Pudupakkam Dedicated team for monitoring the lighting system and staff trained for preventing excessive usage of power at Steel Service Center, 61 Implemented hygienic handling of digitized fuel browser Remote monitoring of Generator sets for reducing the idling time [A] CONSERVATION OF ENERGY: Utilization of Chiller for HVAC System - Campus FMD initiated and control the chiller running hour for HVAC need during holidays and extended working hours Installation of motion sensors at floor areas to reduce the overall electricity consumption Use of Flood light LED and power efficient Metal Halide lamps instead of Halogen in campuses Retrofitting of LED fixtures in place of CFL Fixtures Conducting "Save Electricity" campaign conducted on campus Installed advanced zinc recovery system yielding much higher reusable zinc from zinc ash in the TLT factories Introduction of Auto ON-OFF Timer for streetlight Operation as per Day Light and switching off basement parking lights and ventilation fan during weekends Up-gradation of Chuck motor in Facing lathe and Ravensberg machine at Powai by providing VFD Drives Surrendering excess electricity contract demand of process for Powai and reduction from 7000KVA to 4990KVA Energy saving in Air conditioning by setting the temperature at 26 degree Celsius and Magnetic resonators were installed at Heat treatment Furnace to increase fluidization of NG gas at Hazira Replacing existing aged inefficient Split AC units with energy efficient units • Information as required to be given under Section 134(3) (m) read with Rule 8(3) of the Companies (Accounts) Rules, 2014. LARSEN & TOUBRO The Secretarial Auditor's report to the shareholders does not contain any qualification or reservation. AUDITORS: The Secretarial Audit Report issued by M/s. S. N. Ananthasubramanian & Co., Company Secretaries is attached as Annexure 'E' forming part of this Board Report. SECRETARIAL AUDIT REPORT: The Auditors report to the shareholders does not contain any qualification, observation or adverse comment. the Companies Act, 2013 and Regulation 34 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 and prepared in accordance with the applicable Accounting Standards prescribed by the Institute of Chartered Accountants of India, in this regard. Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to Section 129(3) of CONSOLIDATED FINANCIAL STATEMENTS: During the year under review, there were no material and significant orders passed by the regulators or courts or tribunals impacting the going concern status and the Company's operations in future. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS: The Company has been one of the first engineering and construction companies in India to publish its report on Corporate Sustainability. The Sustainability Report encompasses areas such as Corporate Governance, Stakeholder Engagement, People Performance, Environment Performance and Social Performance. Aspects relating to human rights & labour practices, employee development, occupational health and safety culture, supply chain management, environmental management, development of green products and services portfolio, initiatives with respect to energy, renewable energy, water, air emission, etc. are covered in the Sustainability Report. The detailed Corporate Sustainability Report for 2016-17 is also available on the Company's website http://www. larsentoubro.com/corporate/sustainability.aspx. As per Regulation 34 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, a separate section on Business Responsibility Reporting forms a part of this Annual Report (refer pages 19 to 38). BUSINESS RESPONSIBILITY REPORTING: Also see pages 81 and 82 forming part of Annexure 'B' of this Board Report. The Company has a Whistle-blower Policy in place since 2004 to encourage and facilitate employees to report concerns about unethical behaviour, actual/ suspected frauds and violation of Company's Code of Conduct or Ethics Policy. The Policy has been suitably modified to meet the requirements of Vigil Mechanism under the Act. The policy provides for adequate safeguards against victimisation of persons who avail the same and provides for direct access to the Chairperson of the Audit Committee. The Audit Committee of the Company oversees the implementation of the Whistle-Blower Policy. The Company has disclosed information about the establishment of the Whistle Blower Policy on its website http://investors.larsentoubro.com/corporate governance. aspx. During the year, no person has been declined access to the Audit Committee, wherever desired. LARSEN & TOUBRO In view of the mandatory rotation of auditors' requirement and in accordance with the provisions of Companies Act, 2013, M/s. Deloitte Haskins & Sells LLP were appointed as Statutory Auditors for a period of 5 continuous years from the conclusion of 70th Annual General Meeting (AGM) till the conclusion of 75th Annual General Meeting of the Company. The requirement to place the matter relating to appointment of Auditor for ratification by members at every AGM is done away with vide notification dated May 7, 2018 issued by Ministry of Corporate Affairs, New Delhi. Accordingly, no resolution is proposed for ratification of appointment of Auditors, who were appointed in the AGM held on September 9, 2015. The Auditors have confirmed that they have subjected themselves to the peer review process of Institute of Chartered Accountants of India (ICAI) and hold valid certificate issued by the Peer Review Board of the ICAI. The Auditors have also furnished a declaration confirming their independence as well as their arm's length relationship with the Company as well as declared that they have not taken up any prohibited non-audit assignments for the Company. The Audit Committee reviews the independence and objectivity of the Auditors and the effectiveness of the Audit process. 60 A. M. Naik Group Chairman (DIN: 00001514) For and on behalf of the Board Date 28th May 2018 Place Mumbai Your Directors take this opportunity to thank the customers, supply chain partners, employees, Financial Institutions, Banks, Central and State Government authorities, Regulatory authorities, Stock Exchanges and all the various stakeholders for their continued co-operation and support to the Company. Your Directors also wish to record their appreciation for the continued co-operation and support received from the Joint Venture partners/ Associates. ACKNOWLEDGEMENT A proposal for ratification of remuneration of the Cost Auditor for the financial year 2018-19 is placed before the shareholders. Annexure 'A' to the Board Report be filed with the Ministry of Corporate Affairs within the prescribed period. Pursuant to the provisions of Section 148 of the Companies Act, 2013 and as per the Companies (Cost Records and Audit) Rules, 2014 and amendments thereof, the Board, on the recommendation of the Audit Committee, at its meeting held on 28th May 2018, has approved the appointment of M/s R. Nanabhoy & Co., Cost Accountants as the Cost Auditors for the Company for the financial year ending 31st March, 2019 at a remuneration of 11.75 lakhs. COST AUDITORS: The Auditors of the Company have not reported any instances of fraud committed against the Company by its officers or employees as specified under Section 143(12) of the Companies Act, 2013. REPORTING OF FRAUD: 59 Also see pages 82 and 83 forming part of Annexure 'B' of this Board Report. The Auditors attend the Annual General Meeting of the Company. The Report of the Cost Auditors for the financial year ended 31st March 2018 is under finalization and shall Development of pods using light weight concrete • • Implementation of MIG welding in place of SMAW welding Development of in-house Energy Absorption testing set up to evaluate the adequacy of fibre reinforced shotcrete for tunnels Production of in-house Rapid Chloride Penetration Test (RCPT) apparatus to determine the durability of concrete and supply to project sites Development of portable plate load test set up for quick site exploration studies to determine the bearing capacity of soil stratum Deployment of analytics for Lead enhancement Implemented Mobile based Inspections and BIM 3D Modelling software for projects Introduction of 10-19" Two Wheeler Tire Building Machine, 25" OTR Tire Building Machine, Tyre Inspection Machine, GT Robot and Higher stroke Integrated BCM with bottom SMO Mixing Mills, Mould Pre Heater, Parallel un-loader and Rack & Pinion unloader Introduction of 72" Hydraulic Tire Curing Press, Guide Light System, Ply Inflator, Bladder Painting Machine, Lube Sprayer, Flap Press, Reel Winder, Introduction of FPGA (Field programmable gate array devices) in Drive Development, design approach for product development using target link from dSpace Introduction of Outdoor Cabinets for Telecom Segment, Utilities segment were Feeder Pillars & Front RMU with FRTU, Sub-Main Distribution Board (SMDB), local RMU manufacturing & new variant to its GIS (Gas insulated switchgear) Family Development of different communication modules based on communication technologies in our 1 Ph & 3 Ph Whole Current & Smart Meters Developed Smart and Pre-paid meter where each and every instance in power distribution will be recorded Development of new, cost-optimized meter platforms that offer better features, development and integration of modules to facilitate remote communication of meter data over Radio / GSM and development of Energy Meters, Pre-Paid Meters, Smart Meters, Protective Relays and Panel Meters Development of various new products in the power distribution and motor control sector namely were higher rating Air break & Vacuum contactors, DY125U 4 Pole MCCB, Electronic trip Unit SR 18G with enhanced features, S-Line Copper Busways and S-Line Aluminum Busways for lower (250A) ratings, Ti-APFC panel as per IEC61291, APFC relay Development & implementation of Robotic GMAW for Reactor Internals (Distribution & catalyst supporting beams) Installation of diffusers and blowers in wastewater treatment plants instead of conventional surface aerators Use of photoelectric sensors for lighting control in Integrated Urban utilities Project / Industrial Township Project Establishment of Robotic GMAW for FCCU Cyclones & Nozzle Joints Implementation of innovative pavement solutions and performance evaluation studies at Kanchipuram campus polymer concrete in roads and building structures Application of recycled materials and geo- management system Digitization of NABL laboratory quality Establishment of Reverse Engineering by the laser scanning technique Establishment of Laser Projection Technology (LPT) for the setup of internal and external components on shells and Laser Scanning for the virtual set up of two mating parts in shells/sections Introduced New Product Intensity (NPI) index which measures the sales of products introduced in the market in last five years to the total sales in the financial year Development of Weld Overlay by Cold Metal Transfer (CMT) process and Robotic Dished End Liner Groove buttering for Urea Equipment Indigenization for Carbon Steel SAW consumables and Welding Technology Development Development of Orbital TIG Welding of Maraging Steels for Defence Applications Development on new station for semi-automatic GMAW overlay of nub and TSR and special welding system for skin TC pad buttering Development of HPT cycle automation through scada based system for P80 project Development of loT based Saw station and IR heating systems for shell circ-seam welding and IoT based shell ESSC station Process development for making triangular holes on baffles of Once through Reactor 663 Development of ATVP SG Titanium Tube coiling special purpose machine Implementation of online weld consumables baking/holding oven temperature monitoring & inventory management system (IoT) and online system for monitoring of critical machine utilization Development of Tube to tube welding special purpose machine for ATVP Steam Generator Execution of Stellite#6 hard facing weld overlay (multi-layer) for Valero Canada Swirl tube assemblies Development of In-situ system for RTJ groove for IOCL exchangers and control mechanism for dished end pressing • miner Tippler, Zinc ore Beneficiation, Sand Separation by air classifier, models of semi-mobile skid mounted crushing unit (with Feeder Breaker, Roll Crusher & Impactor) Use of 250 kVA UPS for furnace to reduce diesel consumption of DG set for uninterrupted power supply To replace old welding machines with new machines with inverter technology to reduce no load loss and overall consumption Energy conservation in Air handling units • • (iii) Capital investment on energy conservation equipments: Power generation through Solar Roof top PV installation. (Campus all building roof top has covered). Solar Panels installed at project sites Installing Solar panels on Rooftop Installation of induction bending machine at Hazira Implementation of NUB welding by GMAW process to reduce weld deposition Use of local heat treatment by PID controller based system Use of heat of last charge in furnace by installing plate rolling process flow improvement for KNPC Al-zour Shift towards usage of windmill power in the place of State Electricity Board at Kanchipuram factory • Replacement of existing 400W MH lamps with 200W LED lamps for highbay lighting in HE East & West shops Energy conservation through entering into LOI with Tata Power Trading Company for 10 MW Wind Power Supply through Open Access Use of grid supply for LSR to replace DG set hiring and running cost thereby saving diesel consumption Feasibility for infrared heating to be explored and implemented for heating operation • LARSEN & TOUBRO 62 32 Manufacturing latest technology products in material handling equipment namely Tandem Installed GPS tracking in conveyance vehicles and trucks to optimize travel distance, travel time and idling time Installed solar power system with bifacial PV modules and tracking technology for increased power generation Designed and commissioned single flight pipe conveyors of Diameter 425 mm, regenerative conveyors, roll improved with segmented design, maintenance vehicle above the Pipe Conveyor, improved segmented design of roll and surface Demonstrated waterless automatic module cleaning system in rooftop solar installations in our campuses Conducted laboratory scale model studies through IOT techniques to monitor the remote functioning of cooling towers pumps, quantity of flow and temperature of chilled water, and humidity and also solar panels power projects - ambient temperature, radiation, panel axis position Developmental studies done on coloured asphalt concrete mixes using synthetic binders for parking bays, parks, internal roads, pedestrian bays etc. Conducted design and developmental studies on 3D robot machine for construction industry and in-house mobile Concrete Maturity equipment Conducted studies on influence of pozzolanic materials on thermal hydration applicable for mass concrete foundations Efforts made towards technology absorption: Installed solar-based pump system instead of conventional pumps in a solar project site Developmental studies undertaken on special conventional and geo-polymer concrete mixes for 3D concrete printing (i) [B] TECHNOLOGY ABSORPTION: The measures taken have resulted in savings in cost of production, power consumption and processing time at all locations. IOT projects for ESSC, SAW and nozzle welding process to save energy and reduce cycle time Installation of PFS Furnace Automation at Hazira. Designed and developed concrete mixes using recycled concrete aggregates implementing the same • with other projects like 318 MLD WWTP at Coronation Pillar, DJB Cluster STPs. Absorbed successfully in 2 MLD STP at President Estate. Ready for complete in-house implementation in future projects as required. Total R&D expenditure as a percentage of total turnover Platen Heating [C] FOREIGN EXCHANGE EARNINGS AND OUTGO: System crore 2017-18 h) 3D Virtual Reality Model in 2017 Enhancing the demonstration capabilities Foreign Exchange earned CTP-14 for the civil components viz., track, embankment, bridges, drain, retaining wall, etc. Foreign Exchange saved / deemed exports 1348.48 Total 17699.28 Foreign Exchange used 15277.89 - Total Capital Recurring 16350.80 194.66 Constructed Wetland is a controlled natural wastewater treatment system where physical, biological processes polishes the secondary treated wastewater to remove fine solid content in a single unit. Waste water flows horizontally through the roots of Phragmites and Cattail (Typha) plants in the process. 0.26% Implementing MBR Technology for 11 MLD STP and 13 MLD CETP for BIDKIN Infrastructural Development Project. Major advantage of MBR Technology includes the production of high quality effluent suited to be discharged to the surface water or to be utilized for urban irrigation. Further, it also offers small footprint, easy retrofit and upgrade of old wastewater treatment plants. 2018 Electromagnetic Field for Underground Cables inside Power Duct with different level depths for Amaravati Projects has been done and analyzed which henceforth concluded with a satisfactory result, Field Strength being under the acceptable electromagnetic pollution limit set to protect health of the public. 67 68 S. Technology No. Imported Year of Status of absorption & reasons for (iv) Expenditure incurred on Research & Electrical Import non-absorption, if any 187.86 Development: Indigenized Rubber Processing Machines by designing, developing specifications and adapting to International customers' needs. 12-17 and 6.80 2017 passenger- Unistage Tire Building machine g) 2017-18 crore 9 Mr. Shailendra Roy No. of Committee Membership 8 As on 31st March 2018, the number of other Directorships & Memberships / Chairmanships of Committees of the Board of Directors are as follows: Mr. R. Shankar Raman Name of Director Mr. S. N. Subrahmanyan No. of other company Directorships 4 Mr. A. M. Naik 72 71 No. of Committee Chairmanship the Companies Act, 2013 or Regulation 25 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. 3 0 Mr. M. V. Satish 0 None of the Directors hold the office of director in more than the permissible number of companies under 3 0 0 1 Mr. J. D. Patil 0 0 2 Mr. D. K. Sen 1 4 2 0 0 0 CEO & MD - Chief Executive Officer & Managing Director NED - Non-Executive Director 6 Company w.e.f 2nd May 2018 ID Mr. Narayanan Kumar YES 6 0 ID Mr. Sanjeev Aga YES 6 6 ID Ms. Naina Lal Kidwai YES 6 6 6 None of the above Directors are related inter-se. 6 Mr. Arvind Gupta (Note 2) * * - appointed as a Director w.e.f. 1st July 2017 2. 1. ID - Independent Director ED-Executive Director $ - Has subsequently resigned as a Director of the GC Group Chairman @-appointed as a Director w.e.f. 1st July 2017 #Non-Executive Chairman w.e.f. 1st October, 2017 ^ - CEO & MD w.e.f. 1st July, 2017 2. Representing equity interest of SUUTI Meetings held during the year are expressed as number of meetings eligible to attend. Note: 1. Representing equity interest of LIC ΝΟ 2 3 NED YES 0 0 8 Mr. Arvind Gupta Mr. Narayanan Kumar 2 3 6 Mr. Sanjeev Aga 9 1 0 4 Ms. Naina Lal Kidwai 0 0 1 Mr. Subramanian Sarma 5 2 4 0 . • • Details of any joint venture, acquisitions of companies or collaboration agreement • Minutes of meeting of Board of Directors, Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee • Financing plans of the Company Quarterly results and results of operations of ICs and business segments • Annual revenue budgets and capital expenditure plans • The Board of Directors has complete access to the information within the Company, which inter alia includes - Information to the Board: The details of Committee Chairmanships / Memberships are disclosed as per Regulation 26 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. Other Company Directorships include directorships in all entities whose securities are listed and unlisted public companies and excludes unlisted private limited companies, foreign companies and Section 8 companies. C. 0 0 2 1 Mr. Ajay Shankar Mr. Sushobhan Sarker 1 2 7 Mr. Vikram Singh Mehta 3 5 4 Mr. M. Damodaran 0 1 2 Mr. Subodh Bhargava 5 3 1 Mr. M. M. Chitale 1 Mr. Adil Zainulbhai 0 3 4 Mr. Thomas Mathew T. 1 0 1 Mrs. Sunita Sharma 0 0 NED Mr. Akhilesh Gupta 5 2 7 0 Mr. Subramanian Sarma YES 6 The Company's policy is to have an appropriate mix of Executive, Non-Executive & Independent Directors. As on 31st March 2018, the Board comprised of the Group Chairman, the Chief Executive Officer & Managing Director, 5 Executive Directors, 4 Non-Executive Directors (3 representing financial institutions), and 11 Independent Directors. The composition of the Board, as on 31st March, 2018, is in conformity with the provisions of the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. Composition of the Board: a. BOARD OF DIRECTORS Since 1999, developing and implementing five-year strategy plan is a regular process followed by the Company. This process called Lakshya has helped the Company to achieve its growth aspirations and created value for all stakeholders. The strategic plan for the period 2016 - 2021 named Lakshya 2021 was developed and approved by the Board at its meeting held in May 2016. As a part of Lakshya 2016, the Company decided to have Hybrid Holdco Structure. Accordingly, 10 Independent Companies (ICs) were created. During the process of evolving Lakshya 2021, the structure was reviewed and it was decided to continue with the IC structure with modified mandate. The Company has already implemented the new mandate given by the Board and currently we have 9 ICs. Needless to mention that the IC structure has enabled the Company to empower people and achieve substantial growth in their businesses. b. Meetings of the Board: g. Independent Company Board (IC Board): The Executive Directors, as members of the Board, along with the Senior Management Personnel in the Executive Committee, contribute to the strategic management of the Company's businesses within Board approved direction and framework. They assume overall responsibility for strategic management of business and corporate functions including its governance processes and top management effectiveness. Non-Executive Directors (NED) / Independent Directors: Executive Directors (ED) / Senior Management Personnel: The CEO & MD is fully accountable to the Board for the Company's business development, operational excellence, business results, people development and other related responsibilities. f. e. d. The Chief Executive Officer and Managing Director (CEO & MD): The Non-Executive Directors / Independent directors play a critical role in enhancing balance to the Board processes with their independent judgment on issues of strategy, performance, resources, standards of conduct, etc., besides providing the Board with valuable inputs. The Meetings of the Board are generally held at the Registered Office of the Company at L&T House, Ballard Estate, Mumbai 400 001 and whenever necessary, in locations, where the Company operates. The Meetings of the Board have been held at regular intervals with a time gap of not more than 120 days between two consecutive Meetings. During the year under review, 6 meetings were held on 6th April 2017, 7th April 2017, 29th May 2017, 28th July 2017, 11th November 2017 and 31st January 2018. The Independent Directors met on 5th April 2018 to discuss, interalia, the performance evaluation of the Board, Committees, Chairman and the individual Directors. LARSEN & TOUBRO Mr. S. N. Subrahmanyan ^ YES 6 6 GC Mr. A. M. Naik # attended Attendance at last AGM No. of Board Meetings Meetings held during the year Category Name of Director The following is the composition of the Board of Directors as on 31st March 2018. The Directors strive to attend all the Board/Committee meetings. Their attendance at the Meetings during the year and at the last Annual General Meeting is as under: The Minutes of the proceedings of the Meetings of the Board of Directors are noted and the draft minutes are circulated amongst the Members of the Board for their perusal. Comments, if any, received from the Directors are also incorporated in the Minutes, in consultation with the Chairman. The minutes are approved and entered in the minutes book within 30 days of the Board meeting. Thereafter, the minutes are signed by the Chairman of the Board at the next meeting. The Company Secretary prepares the agenda and the explanatory notes, in consultation with the Group Chairman/Chief Executive Officer & Managing Director and circulates the same in advance to the Directors. Every Director is free to suggest inclusion of items on the agenda. The Board meets at least once every quarter, inter alia, to review the quarterly results. The Company also provides Video Conference facility, if required, for participation of the Directors at the Board/Committee Meetings. Additional Meetings are held, when necessary. Presentations are made on business operations to the Board by Independent Companies / Business Units. Senior management personnel are invited to provide additional inputs for the items being discussed by the Board of Directors as and when necessary. The respective Chairman of the Board Committees apprise the Board members of the important issues and discussion in the Committee meetings. Minutes of Committee meetings are also circulated to the Board. Sharing of best practices, etc. Approval of common policies iv. Digitalization & Analytics initiatives iii. HR Update/ Talent Management Board of Directors (the Board): a. D. ROLES OF VARIOUS CONSTITUENTS OF CORPORATE GOVERNANCE IN THE COMPANY The four-tier governance structure, besides ensuring greater management accountability and credibility, facilitates increased autonomy to the businesses, performance discipline and development of business leaders, leading to increased public confidence. (iv) Operational Management - by the Business Unit (BU) Heads. (iii) Strategy & Operational Management – by the Independent Company Boards of each Independent Company (IC) (not legal entities) comprising of representatives from the Company Board, Senior Executives from the IC and independent members. (ii) Executive Management - by the Corporate Management comprising of the, Chief Executive Officer and Managing Director, 5 Executive Directors and 1 Non-Executive Director. (i) Strategic Supervision - by the Board of Directors comprising the Executive, Non-Executive Directors and Independent Directors. The Company has four tiers of Corporate Governance structure, viz.: C. THE GOVERNANCE STRUCTURE The Company's essential character revolves around values based on transparency, integrity, professionalism and accountability. At the highest level, the Company continuously endeavors to improve upon these aspects on an ongoing basis and adopts innovative approaches for leveraging resources, converting opportunities into achievements through proper empowerment and motivation, fostering a healthy growth and development of human resources to take the Company forward. The Company believes that sound Corporate Governance is critical for enhancing and retaining investor trust and your Company always seeks to ensure that its performance goals are met accordingly. The Company has established systems and procedures to ensure that its Board of Directors is well informed and well equipped to fulfill its overall responsibilities and to provide management with the strategic direction needed to create long term shareholders value. The Company has adopted many ethical and transparent governance practices even before they were mandated by law. The Company has always worked towards building trust with shareholders, employees, customers, suppliers and other stakeholders based on the principles of good corporate governance. COMPANY'S CORPORATE GOVERNANCE PHILOSOPHY Corporate Governance is a set of principles, processes and systems which govern a company. The elements of Corporate Governance are independence, transparency, accountability, responsibility, compliance, ethics, values and trust. Corporate Governance enables an organization to perform efficiently and ethically generate long term wealth and create value for all its stakeholders. B. A. CORPORATE GOVERNANCE The Directors of the Company are in a fiduciary position, empowered to oversee the management functions with a view to ensuring its effectiveness and enhancement of stakeholder value. The Board also reviews and approves management's strategic plan & business objectives and monitors the Company's strategic direction. b. The Group Chairman (GC): CEO & MD C. Executive Committee (ECom): IC synergies ii. i. International business expansion Review and discuss strategic issues which impact the entire organization, viz., Review of Revenue, Capital & Manpower Budget Review of Monthly / Quarterly / Yearly financial performance • Review of consolidated financials including working capital, cash flow 70 E. 69 Review of CSR activities of the Company Review of major order prospects (Standalone/Group) "Integrated offerings” The ECom provides a company-wide operations review and plays a key role in strengthening linkages between the ICs and the Company's Board, as well as in rapidly realizing inter-IC synergies. In addition, the ECom deliberates upon strategic issues that cut across ICs and Corporate. The agenda includes: The GC is the Chairman of the Board. His primary role is to provide leadership to the Board and guidance and mentorship to the CEO & MD and Executive Directors for realizing the approved strategic plan and business objectives. He presides over the Board and the Shareholders' meetings. 6 6 YES 5 6 ID Mr. Adil Zainulbhai Quarterly report on fatal or serious accidents or dangerous occurrences, any material effluent or pollution problems 6 6 NED Mr. Sushobhan Sarker (Note 1) $ YES 4 6 ID Mr. Vikram Singh Mehta NO NO 5 Mr. Akhilesh Gupta 6 6 ID Mr. Ajay Shankar YES 6 6 ID Mr. Thomas Mathew T. ΝΟ 3 6 NED Mrs. Sunita Sharma (Note 1) NO 6 ID YES 6 Mr. M. Damodaran Mr. M. V. Satish YES 6 ED Mr. D. K. Sen YES 6 6 ED Mr. Shailendra Roy YES 6 6 ED Mr. R. Shankar Raman Mr. J. D. Patil @ ID Mr. M. M. Chitale 6 YES 6 6 ID Mr. Subodh Bhargava YES 6 6 ID YES 3 3 ED YES 6 ED Any materially relevant default, if any, in financial obligations to and by the Company or substantial non-payment for goods sold or services rendered, if any 6. LARSEN & TOUBRO (computed in accordance with section 197 of the Companies Act, 2013). The Group Chairman would provide leadership to Board and guidance and mentorship to the leadership team for implementing the strategy plan and business objectives. The Group Chairman is paid a fixed commission. The commission to the Independent Directors / Non-Executive Directors is distributed broadly on the basis of their attendance, contribution LARSEN & TOUBRO at the Board, the Committee meetings, Chairmanship of Committees and participation in IC meetings. In the case of nominees of Financial Institutions, the commission is paid to the Financial Institutions. As required by the provisions of Regulation 46 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the criteria for payment to Independent Directors / Non-Executive Directors is made available on the investor page of our corporate website http://investors. larsentoubro.com/Listing-Compliance.aspx. Performance Evaluation Criteria for IDs: The performance evaluation questionnaire covers specific criteria with respect to the Board & Committee composition, structure, culture, Board processes and selection, effectiveness of the Board and Committees, functioning of the Board and Committees, information availability, remuneration framework, familiarization program, succession planning, etc. It also contains specific criteria for evaluating the Chairman and individual Directors. An external consultant was engaged to receive the responses of the Directors and consolidate/ analyze the responses. Company as approved by shareholders The Chairman of the Company discusses the performance evaluation results with the Chairman of the NRC and if required, interacts with all the Non-Executive Directors & Independent Directors on a one-to-one basis. vi) Training & Succession Planning: The Company has institutionalized Leadership Development through a Seven Step leadership pipeline for development of a robust stage-wise leadership by a structured process of talent management. The thrust is on facilitating the transformation of managers into leaders, leaders into 'corporate entrepreneurs (intrapreneurs)' and to create a large pool of leaders who can envision, inspire, and successfully deploy global growth strategies thus creating a result-oriented culture of multiplying value. Each step of this Leadership pipeline development process has been meticulously customized to equip managers at various levels, with the required knowledge, skill & mind-set to transition seamlessly to the next level of leadership and global entrepreneurship. In this effort, the Company has partnered with globally renowned senior faculty and premier institutes like Harvard Business School, INSEAD, IIM Ahmedabad, and Stephen M. Ross School of Business- University of Michigan. The programs are designed to provide inputs on vital areas of strategic importance such as innovation based strategies, integrated business models to take on global multinationals, cross- cultural challenges, organic and inorganic growth etc., and thus mark an important milestone in the journey towards leadership development in the global context. To facilitate enhanced global acumen & international exposure, which are critical competencies for establishing a global footprint, the Company continues to nominate select senior leaders for Advanced Management Programs offered by globally renowned business schools like INSEAD, Wharton, Harvard, IMD, London Business School, Oxford and the likes. As a part of Leadership development at the top echelons of the organization, a structured & systematic approach to mentoring has been initiated to leverage on the leadership experiences & networks of senior leaders and to enable them to leave a legacy of success mantras. In order to continuously monitor the progress of high potentials (HIGH POTS) who go through the Seven Step Leadership Development process and to ensure that they are given challenging roles and responsibilities, a Top Talent Management System is also put in place which is essential to ensure progress of a strong leadership pipeline. Members are also requested to refer to pages 57 and 58 of the Board Report. 25,000/- for Stakeholders Relationship Committee and Corporate Social Responsibility Committee meetings during the year, to the Independent Directors / Non-Executive Directors. The commission is paid subject to a limit not exceeding 1% p.a. of the profits of the The Independent Directors / Non-Executive Directors are paid remuneration by way of commission & sitting fees. The Company paid sitting fees of 75,000/- per meeting of the Board and 40,000/- for Audit Committee and Nomination and Remuneration Committee meetings and The Company pays remuneration to Executive Directors by way of salary, perquisites & retirement benefits (fixed components) & commission (variable component), based on recommendation of the NRC, approval of the Board and the shareholders. The commission payable is based on the overall performance of the Company, performance of the business / function as well as qualitative factors. The commission is calculated with reference to net profits of the Company in the financial year subject to overall ceilings stipulated under Section 197 of the Companies Act, 2013. Mr. Adil Zainulbhai Member 5 5 Mr. Thomas Mathew T. Member 5 5 iv) Board Membership Criteria: While screening, selecting and recommending to the Board new members, the Committee ensures that the Board is objective, there is absence of conflict of interest, ensures availability of diverse perspectives, business experience, legal, financial & other expertise, integrity, leadership and managerial qualities, practical wisdom, ability to read & understand financial statements, commitment to ethical standards and values of the Company and there are healthy debates & sound decisions. While evaluating the suitability of a Director for re-appointment, besides the above criteria, the NRC considers Board evaluation results, attendance & participation in and contribution to the activities of the Board by the Director. The Independent Directors comply with the definition of Independent Directors as given under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. While appointing/re-appointing any Independent Directors / Non-Executive Directors on the Board, the NRC considers the criteria as laid down in the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. All the Independent Directors give a certificate confirming that they meet the "independence criteria" as mentioned in Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. These certificates have been placed on the website of the Company http://investors. larsentoubro.com/corporate governance.aspx. v) Remuneration Policy: The remuneration of the Board members is based on the Company's size & global presence, its economic & financial position, industrial trends, compensation paid by the peer companies, etc. Compensation reflects each Board member's responsibility and performance. The level of compensation to Executive Directors is designed to be competitive in the market for highly qualified executives. To ensure that the Company has sufficient pool of probable employees who can be nominated for Leadership Pipeline, efforts are taken at the grass root level. There exists several structured core developmental programs, conducted by reputed institutions like IIM-Bangalore, IIM-Calcutta, XLRI, Symbiosis and NMIMS for deserving 77 78 employees to develop superior management skills and capabilities. A host of strategic and behavioural programs are conducted to address specific training and developmental needs of employees. A comprehensive e-learning portal ATL (Any Time Learning) is available with multiple on-line programs and courses for employees to enable learning 'at any time, at any place' at locations remote or otherwise. The portal provides access to on-line data bases, references, management videos, e-books and journals. 11.579 31.803 Subrahmanyan Mr. R. Shankar 1.590 0.18 5.642 2.424 7.387 17.223 crore Raman Names Mr. Shailendra 1.470 1.168 2.285 3.704 5 0.264 14.112 Mr. S. N. The NRC reviews on a periodic basis the succession planning process being followed by the Company especially at the level of the Board and senior management. vii) Details of remuneration paid / payable to Directors for the year ended 31st March 2018: Names (a) Executive Directors: The details of remuneration paid / payable to the Executive Directors for 2017-18 is as follows: crore Annexure 'B' to the Board Report Salary Perquisites Perquisites Retirement Commission Total related to Benefits ESOP** Details of Options granted under Employee Stock Option Schemes are provided on the website of the Company www.larsentoubro.com. Mr. A. M. Naik has been granted stock options in Larsen & Toubro Infotech Limited and L&T Technology Services Limited. On his retirement as Group Executive Chairman, all options have been vested. The outstanding vested options are 5,49,375 and 10,40,000 in Larsen & Toubro Infotech Limited and L&T Technology Services Limited respectively. Mr. S. N. Subrahmanyan has been granted 2,00,000 stock options in Larsen & Toubro Infotech Limited and L&T Technology Services Limited each. Mr. R. Shankar Raman has been granted 1,00,000 stock options in Larsen & Toubro Infotech Limited. The perquisite amount on exercise of these options will be considered as a part of the remuneration of these Directors. (b) Non-Executive Directors: The details of remuneration paid / payable to the Non-Executive Directors for 2017-18 is as follows: Mr. A. M. Naik @ 2.727 0.127 47.982 77.682* 8.727 137.245 2.144 1.833 5 Mr. A. M. Naik 8 Mr. M. Damodaran Member 8 6 Mr. Sushobhan Sarker @ Member 8 8 Mr. Sanjeev Aga Member 8 8 @Pursuant to his resignation as a Director of the Company w.e.f. 2nd May 2018, Mr. Sushobhan Sarker has ceased to be a member of the Audit Committee from that date. LARSEN & TOUBRO 8 Chairman Mr. M. M. Chitale the year Review the management discussion and analysis of financial condition and results of operations. Approval or any subsequent modification of transactions of the Company with related parties. Scrutiny of inter-corporate loans and investments. Valuation of undertakings or assets of the company, wherever it is necessary. Evaluation of internal financial controls and risk management systems. Monitoring the end use of funds raised through public offers and related matters. Minutes of the Audit Committee Meetings are circulated to the Board of Directors and discussed, if necessary. ii) Composition: As on 31st March 2018, the Audit Committee comprised of three Independent Directors and 1 Non-Executive Director (nominee of LIC). iii) Meetings: During the year ended 31st March 2018, 8 meetings of the Audit Committee were held on 5th May 2017, 28th May 2017, 19th July 2017, 28th July 2017, 11th November 2017, 6th December 2017, 30th January 2018 and 16th February 2018. The members of the Audit Committee also meet without the presence of management. The attendance of Members at the Meetings was as follows: Name Status No. of No. of meetings Meetings during Attended All the members of the Audit Committee are financially literate and have accounting or related financial management expertise. The Chief Executive Officer & Managing Director, Whole-time Director & Chief Financial Officer and Head - Corporate Audit Services are permanent invitees to the Meetings of the Audit Committee. The Company Secretary is the Secretary to the Committee. iv) Internal Audit: The Company has an internal corporate audit team consisting of Chartered Accountants / Cost Accountants and Engineers. Over a period of time, the Corporate Audit department has acquired in-depth knowledge about the Company, its businesses, its systems & procedures, which knowledge is now institutionalized. The Company's Internal Audit function is ISO 9001:2015 certified. The Head of Corporate Audit Services is responsible to the Audit Committee. The staff of Corporate Audit department is rotated periodically to have a holistic view of the entire operations and share the findings and good practices. Status No. of No. of meetings Meetings during Attended the year Mr. Subodh Bhargava Chairman 5 5 75 76 Name Status No. of No. of meetings Meetings during Attended the year Name Member During the year ended 31st March 2018, 5 meetings of the Nomination & Remuneration Committee were held on 7th April 2017, 29th May 2017, 28th July 2017, 11th November 2017 and 31st January 2018. The attendance of Members at the Meetings was as follows: As at 31st March 2018, the Committee comprised of 3 Independent Directors and the Group Chairman. The Corporate Audit Services team carries out theme based audits (revenue recognition, IT controls, etc.), joint audits with other Corporate departments for specific functions, identifies risk based focus areas in project audits, benchmarks the audit processes with large companies, encourages its team members to obtain globally renowned CISA, CIA and CFE Certification, etc. The audit plan is finalized based on the value of the contract in case of construction projects and the geographical spread of the Company. It is ensured that, on an average, all operations get covered in a span of two years. The Corporate Audit Services team has its offices at Mumbai and Chennai and all overseas audits are shared between these two zones. From time to time, the Company's systems of internal controls covering financial, operational, compliance, IT applications, etc. are reviewed by external experts. Presentations are made to the Audit Committee, on the findings of such reviews. 2) Nomination & Remuneration Committee (NRC) The Nomination & Remuneration Committee was constituted in 1999 even before it was mandated by law. i) Terms of reference: Identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down by the Committee; Recommend to the Board appointment and removal of such persons; Formulate criteria for determining qualifications, positive attributes and independence of a director; Devise a policy on Board diversity; Formulation of criteria for evaluation of directors, Board and the Board Committees; Carry out evaluation of the Board and directors; Recommend to the Board a policy, relating to remuneration for the directors and key managerial personnel (KMP); Administration of Employee Stock Option Scheme (ESOS). ii) Composition: iii) Meetings: 5.319 12.075 Sitting Fees for Sitting Commission Represents perquisite value related to ESOPs exercised during the year in respect of stock options granted over the past several years by the Company, Larsen & Toubro Infotech Limited and L&T Technology Services Limited and includes tax on ESOPs borne by the Company wherever applicable. Appointed as Executive Director w.e.f. 1st July 2017. Executive Chairman till 30th September 2017. Retirement benefits include encashment of accumulated past service leave 19.381 crore, gratuity * 55.038 crore and pension of 1.50 crore. @ $ ** * Notice period for termination of appointment of Chief Executive Office & Managing Director and other Whole-time Directors is six months on either side. 0.407 0.032 0.045 Mr. M. M. Chitale 2.538 2.500 0.015** 0.008 0.330 No severance pay is payable on termination of appointment. @appointed as a Director w.e.f. 1st July 2017 ** 0.030 Mr. Vikram Singh Mehta 0.300 0.238 0.024 0.038 Mr. M. Damodaran 0.500 - 0.435 0.045 0.020 Mr. Subodh Bhargava # Payable to respective Institutions they represent. Others include perquisite value of Housing & Medical Group Chairman w.e.f. 1st October 2017 The recommendation for appointment, remuneration and terms of appointment of cost auditors of the Company. Review and monitor the auditor's independence and performance, and effectiveness of audit process. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee. Approval of appointment of CFO (i.e., the whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience & background, etc. of the candidate. To review the functioning of the Whistle Blower mechanism. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of Approval of payment to statutory auditors for any other services rendered by the statutory auditors. Recommending to the Board, the appointment, re-appointment, terms of appointment and, if required, the replacement or removal of the statutory auditor and the fixation of audit fees. Oversight of the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible. The role of the Audit Committee includes the following: Terms of reference: i) The Company has constituted the Audit Committee in 1986, well before it was made mandatory by law. 1) Audit Committee The Board currently has 5 Committees: 1) Audit Committee, 2) Nomination and Remuneration Committee, 3) Stakeholders' Relationship Committee, 4) Corporate Social Responsibility Committee and 5) Risk Management Committee. The terms of reference of the Board Committees are decided by the Board from time to time. The Board is responsible for constituting, assigning and co-opting the members of the Committees. The meetings of each Board Committee are convened by the Company Secretary in consultation with the respective Committee Chairperson. The role and composition of these Committees, including the number of meetings held during the financial year and the related attendance are provided below. F. BOARD COMMITTEES The important decisions taken at the Board / Committee meetings are communicated to the concerned departments / ICs promptly. An Action Taken Report is regularly presented to the Board. d. Post-meeting internal communication system: Compliance or Non-compliance of any regulatory, statutory nature or listing requirements and investor service such as non-payment of dividend, delay in share transfer, etc., if any Developments in respect of human resources concern. 0.010 Reviewing, with the management, the annual financial statements and the audit report before submission to the board for approval, with particular reference to: Matters required to be included in the Director's Responsibility Statement to be included in the Board's report in terms of sub- section (5) of Section 134 of the Companies Act, 2013 substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors. To look into the reasons for Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board. Discussion with internal auditors about any significant findings and follow up there on. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit. Reviewing, with the management, performance of statutory and internal auditors, and adequacy of the internal control systems. 74 73 Reviewing, with the management, the quarterly financial statements before submission to the board for approval. Reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document/prospectus/notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter, if any. 7. Qualifications in the draft audit report. Disclosure of any related party transactions 5. Compliance with listing and other legal requirements relating to financial statements 4. Significant adjustments made in the financial statements arising out of audit findings 3. Major accounting entries involving estimates based on the exercise of judgment by management 2. Changes, if any, in accounting policies and practices and reasons for the same 1. 0.237 0.277 Mr. Sushobhan Sarker Mr. A. M. Naik * 0.015 0.048 0.033# 0.015 Mr. Arvind Gupta @ 0.195 0.150 0.045 Mr. Narayanan Kumar 0.317 0.240 0.032 0.045 Mr. Sanjeev Aga Meeting 0.195 Meeting 0.720 0.135 Others Total Fees for N. Roy Board Committee Mr. D. K. Sen 1.140 0.120 - 1.688 Mr. M. V. Satish 1.140 0.215 - Mr. J. D. Patil $ 5.113 8.061 1.524 4.502 7.381 0.811 2.284 3.950 Any issue, which involves possible public or product liability claims of substantial nature, including any Judgment or Order, if any, which may have strictures on the conduct of the Company - 0.045 0.023 Ms. Sunita Sharma 0.195 0.150 0.045 Mr. Akhilesh Gupta 0.316 0.258 0.020 0.038 Mr. Adil Zainulbhai 0.340 0.263# 0.032 0.045 0.038# 0.150 0.061 0.045 Ms. Naina Lal Kidwai NIL - NIL NIL NIL Mr. Subramanian Sarma 0.335 0.280 0.010 0.045 Mr. Ajay Shankar 0.343 0.278 0.020 Mr. Thomas Mathew T. LARSEN & TOUBRO 5 29-Dec-17 b) Financial calendar: 1. Annual Results of 2017-18 28th May 2018 2. Management Discussion & Analysis Presentations made to Institutional This forms a part of the Annual Report which is mailed to the shareholders of the Company. Mailing of Annual Reports Third week of July 2018 3. First Quarter Results During the last week of July 2018* Investors and Analysts The schedule of analyst / institutional investor meets and presentations |made to them on a quarterly basis are displayed on the website. 4. Annual General 23rd August 2018 Meeting 5. Payment of Dividend 27th August 2018 6. Second Quarter The Annual General Meeting of the Company has been convened on Thursday, 23rd August 2018 at Birla Matushri Sabhagar, New Marine Lines, Mumbai - 400020 at 3.00 p.m. GENERAL SHAREHOLDERS' INFORMATION a) Annual General Meeting: I. members and all others like auditors, equity analysts, etc. In order to enable a larger participation of shareholders for the Annual General Meeting, the Company has provided Webcast facility of its 71st and 72nd Annual General Meeting in co-ordination with NSDL. The Company will continue to provide webcast facility in future. The Company suitably responds to the queries raised by the shareholders through the webinar. 3. 4. Details of all related party transactions form a part of the accounts as required under IND AS 24 and the same are given in Note 51 forming part of the financial statements. The Company has followed all relevant Accounting Standards notified by the Companies (Indian Accounting Standards) Rules, 2015 while preparing the Financial Statements. The Company makes presentations to Institutional Investors & Equity Analysts on the Company's performance on a quarterly basis. The same is also available on our website http://investors.larsentoubro.com/ Announcements.aspx. 5. There were no instances of non-compliance, penalties, strictures imposed on the Company by the Stock Exchanges on any matter related to the capital markets, during the last three years. 6. SEBI had issued notice to the Company, Mr. A. M. Naik and Mr. Shailendra Roy for alleged violation of the SEBI Act and SEBI i) 7. (Prohibition of Insider Trading) Regulations, 1992 ("PIT Regulations") for delay ranging between 1-7 days in reporting obligations with certain trades in the shares of the Company that were carried out in the March 2014. The Company, Mr. A. M. Naik and Mr. Shailendra Roy have paid the amounts as determined by SEBI under a consent application. results The policy for determining material subsidiaries and related party transactions is available on our website http://investors. larsentoubro.com/Listing-Compliance.aspx. Means of communication: Financial Results Quarterly & Annual Results are |published in prominent daily newspapers viz. The Financial Express, The Hindu Business Line & Loksatta. The results are also posted on the Company's website: www.larsentoubro.com. News Releases Official news releases are sent to stock exchanges as well as displayed on the Company's website: www.larsentoubro.com. Website Filing with Stock Exchanges The Company's corporate website www.larsentoubro.com provides comprehensive information about its portfolio of businesses. Section on "Investors" serves to inform and service the Shareholders allowing them to access information at their convenience. The quarterly shareholding pattern of the Company is available on the website of the Company as well as the stock exchanges. The entire Annual Report and Accounts of the Company and subsidiaries are available in downloadable formats. The entire Annual Report and Accounts of the Company will also be made available on the websites of the Stock Exchanges. Information to Stock Exchanges is now being also filed online on NEAPS for NSE, BSE Online for BSE and RNS for London Stock Exchange. LARSEN & TOUBRO Annual Report Annual Report is circulated to all the and Annual General Meeting 8. Details of risk management including foreign exchange risk, commodity price risk and hedging activities form a part of the Management Discussion & Analysis. Please refer to pages 230 to 232 of this Annual Report. 2. During last week of October 2018* The Company does not have any unclaimed shares lying with it from any public issue. However certain shares resulting out of the bonus shares issued by the Company are unclaimed by the shareholders. As required under Regulation 39(4) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Company has already sent reminders in the past to the shareholders to claim these shares. These share certificates are regularly released on requests received from the eligible shareholders after due verification. : LART.BO : 005428157 : LTOD The Company's shares constitute a part of BSE 30 Index of the BSE Limited as well as NIFTY Index of the National Stock Exchange of India Limited. h) Stock market data for the year 2017-2018: Month High L&T BSE Price (₹) Low BSE SENSEX Month High Low Close Month Close 2017 November 1274.00 1202.00 1216.85 33865.95 32683.59 33149.35 December 1275.00 1176.00 1256.95 34137.97 32565.16 34056.83 2018 January 1441.00 1243.15 1416.60 36443.98 33703.37 35965.02 February 1469.60 1275.85 1319.10 36256.83 33482.81 34184.04 March 1332.30 1259.70 1311.90 34278.63 32483.84 32968.68 Stock Performance Month 2017 L&T BSE Price (*) High Low Month Close BSE SENSEX High Low Month : INE018A01030 London Exchange Stock Code Luxembourg Exchange Stock Code Reuters RIC In accordance with the provisions of the Section 124(6) and Rule 6(3)(a) of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ('IEPF Rules'), the Company has transferred equity shares on which dividend has remained unclaimed for a period of seven consecutive years from the financial years 2009-10. The details are given in the Board Report. Please refer to Page 54 of this Annual Report. All corporate benefits on such shares viz. bonus shares, etc. shall be transferred in accordance with the provisions of IEPF Rules read with Section 124(6) of the Companies Act, 2013. The eligible shareholders are requested to note the same and make an application to IEPF Authority in accordance with the procedure available on www.iepf.gov.in and submit such documents as prescribed under the IEPF Rules to claim these shares. 7. Third Quarter results During last week of January 2019* * Tentative c) Book Closure: The dates of Book Closure are from Friday, 17th August 2018 to Thursday, 23rd August 2018 (both days inclusive) to determine the members entitled to the dividend for financial year 2017-2018. d) Listing of equity shares / shares underlying GDRs on Stock Exchanges: The shares of the Company are listed on BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE). GDRs are listed on Luxembourg Stock Exchange and traded on London Stock Exchange. e) Listing Fees to Stock Exchanges: H. UNCLAIMED SHARES The Company has paid the Listing Fees for the year 2018-2019 to BSE, NSE and Luxembourg Stock Exchange. Fees to London Stock Exchange will be paid on receipt of the bill. The Company has paid custodial fees for the year 2018-2019 to Central Depository Services (India) Limited (CDSL) and fees to National Securities Depository Limited (NSDL) will be paid on receipt of the invoice. 85 86 g) Stock Code / Symbol: The Company's equity shares / GDRs are listed on the following Stock Exchanges and admitted for trading in London Stock Exchange: BSE Limited (BSE) National Stock Exchange of India Limited (NSE) Scrip Code 500510 ☐ Scrip Code LT ISIN f) Custodial Fees to Depositories: L&T-BSE (*) 1. During the year, there were no transactions of material nature with the Directors or the Management or relatives or the subsidiaries that had potential conflict with the interests of the Company. After receiving the approval of the Board of Directors, Notice of the Postal Ballot, text of the Resolution and Explanatory Statement, relevant documents, Postal Ballot Form and self-addressed postage envelopes are sent to the shareholders to enable them to consider and vote for and against the proposal within a period of 30 days from the date of dispatch. E-voting facility is made available to all the shareholders and instructions for the same are specified under instructions for voting in the Postal Ballot Notice. E-mails are sent to shareholders whose e-mail ids are available with the depositories and Company alongwith Postal Ballot Notice and Ballot Form. After the last day for receipt of ballots (physical / e-voting), the Scrutinizer, after due verification, submits the results to the Chairman. Thereafter, the Chairman declares the result of the Postal Ballot. The same is published in the Newspapers and displayed on the Company Website and Notice Board and submitted to Stock Exchanges. • To approve raising of capital through QIP's by issue of shares / convertible debentures /securities upto an amount of USD 600 million or 3600 crore. To approve raising of finances through issue of debentures upto 6000 crore. Note The resolutions relating to raising of capital and finances have been taken at each of the above AGMs since the validity of the resolution is one year. A meeting of the equity shareholders of the Company was convened on 22nd August 2017 as per the directions of National Company Law Tribunal at Mumbai to approve the Scheme of Arrangement between the Company and Spectrum Infotech Private Limited and their respective shareholders and creditors. g) Approval of Members through Postal Ballot: The Company received approval of the members on 5th July 2017, for passing an Ordinary Resolution under Section 110 of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, for issue of bonus shares in the ratio of 1:2 (1 bonus share for every 2 shares held). Mr. S. N. Ananthasubramanian, Practicing Company Secretary, was appointed as the Scrutinizer for conducting the Postal Ballot process. The details of the voting pattern are as under: Particulars No. of votes cast Total % of total votes cast 99.99 Physical E-Voting 28,11,214 60,43,09,880 60,71,21,094 In favour of the resolution Against the resolution 2,856 34,391 37,247 0.01 TOTAL 28,14,070 60,43,44,271 60,71,58,341 100.00 Fax No. (022) 6752 5893 Tel. No. (022) 6752 5656, Mumbai 400 001. • Annual General Meeting held on 9th September 2015: To approve raising of finances through issue of debentures upto 6000 crore. To approve raising of capital through QIP's by issue of shares / convertible debentures / securities upto an amount of USD 600 million or 3600 crore. General Body Meetings: The last three Annual General Meetings of the Company were held as under: Date Venue Time Financial Year 2016-2017 22nd August 2017 St. Andrews Auditorium 3.00 p.m. Ballard Estate, 2015-2016 26th August Birla Matushri Sabhagar 3.00 p.m. 2014-2015 9th September 2015 Birla Matushri Sabhagar 3.00 p.m. The following Special Resolutions were passed by the members during the past 3 Annual General Meetings: Annual General Meeting held on 22nd August 2017: To re-appoint Mr. Subodh Bhargava as an Independent Director of the Company for a 5 year term upto 29th March 2022. To approve raising of capital through QIP's by issue of shares / convertible debentures / securities upto an amount of USD 600 million or 4,000 crore. To approve raising of finances through issue of debentures upto 6000 crore. Annual General Meeting held on 26th August 2016: 2016 h) Disclosures: L&T House, The L&T Group's facilities for design, engineering, manufacture, modular fabrication and production are based at multiple locations within India including Ahmednagar, Bengaluru, Chennai, Coimbatore, Faridabad, Hazira (Surat), Kattupalli (near Chennai), Kanchipuram, Mumbai, Navi Mumbai, Mysuru, Pithampur, Puducherry, Rajpura, Kansbahal (Rourkela), Talegaon and Vadodara. L&T's international manufacturing footprint covers the Gulf (Oman, Saudi Arabia, UAE), South East Asia (Malaysia and Indonesia) and the U.K. The L&T Group also has an extensive network of offices in India and around the globe. See pages 12 and 13 of this Annual Report. as on March 31, 2018 Shares held in Demat / Physical Form 100.00 1,40,13,69,456 Total 1.80 2,51,70,775 4.13 5,78,49,977 94.07 Held in dematerialized form in NSDL 1,31,83,48,704 Held in dematerialized form in CDSL Physical total capital issued % of No. of shares 95,20,455 shares NIL may be issued pursuant to conversion notices in respect of (iii) above (v) Underlying Equity Shares / GDR's that issued pursuant to conversion as per (ii) above 83 84 Procedure for Postal Ballot: CDSL 5,78,49,977 4.13% Physical 2,51,70,775 1.80% NSDL 1,31,83,48,704 94.07% q) Plant Locations: Mumbai 400 001 Ballard Estate 17, R. Kamani Marg Asian Building IDBI Trusteeship Services Limited Ground Floor, p) Debenture Trustees (for privately placed debentures): issued by the Company are listed on the Wholesale Debt Market (WDM) of National Stock Exchange of India Limited (NSE) and/or BSE Limited (BSE). The redeemable Non-Convertible debentures o) Listing of Debt Securities: These Convertible Bonds are listed on the Singapore Exchange Securities Trading Limited. r) Address for correspondence: Larsen & Toubro Limited, as at 31st March 2018 GDRs since issue NIL Principal Value of Bonds converted to (ii) USD 200 million Principal Value of the Bonds issued (i) 0.675% USD 200 million Foreign Currency Convertible Bonds due 2019 The Company has the following Foreign Currency Convertible Bonds outstanding as on 31st March 2018: The outstanding GDRs are backed up by underlying equity shares which are part of the existing paid-up capital. n) Outstanding GDRs / ADRs/ Warrants or any Convertible Instruments, conversion date and likely impact on equity: (iii) Principal Value of Bonds outstanding USD 200 million Place: Mumbai Close Bonus: % No. of Shares 31.03.2017 31.03.2018 Category NSE NIFTY 9900 10250 1100 10600 L&T-NSE (*) I) Categories of Shareholders is as under: 10950 1300 11300 9,41,235 100.00 140,13,69,456 100.00 TOTAL 11650 1500 1,1590,159 0.83 2,92,64,989 2.09 117,08,47,294 83.55 3,844 0.41 10001 & Above NSE NIFTY No. of Shares % 900 9550 GDRs Financial Institutions 33,25,25,270 23.73 25,04,43,440 26.84 Foreign Institutional 18.42 16,11,32,756 17.27 Investors As required under Regulation 40 of the SEBI (Listing Obligations & Disclosure Requirements) The share transfer activities under physical mode are carried out by the RTA. Shares in physical mode which are lodged for transfer are processed and returned within the stipulated time. The share related information is available online. Physical shares received for dematerialization are processed and completed within a period of 21 days from the date of receipt. j) Share Transfer System: Karvy Selenium Tower B, Plot number 31 & 32 Financial District Gachibowli, Nanakramguda, Hyderabad, Telangana - 500 032. Unit: Larsen & Toubro Limited Karvy Computershare Pvt. Ltd. i) Registrar and Share Transfer Agents (RTA): 28-Mar-18 Daily Closing Price L&T NSE (*) 28-Feb-18 1700 30-Nov-17 31-Oct-17 29-Sep-17 31-Aug-17 31-Jul-17 Shares underlying 8850 700 9200 25,81,41,851 31-Jan-18 Mutual Funds 0.45 5001 - 10000 July (from 1207.50 1153.50 1193.95 10114.85 9792.05 10077.10 13th July) Bonus: Post 2017 Close Month NIFTY Low High Low Month Close L&T NSE Price (₹) High Month LARSEN & TOUBRO BSE SENSEX 12-Jul-17 30-Jun-17 Daily Closing Price 31-May-17 28-Apr-17 8000 1500 8800 August 1199.50 1114.55 1136.00 32686.48 31128.02 31730.49 September 1249.95 1116.45 1141.20 32524.11 31081.83 31283.72 October 1243.35 1124.50 1220.60 33340.17 31440.48 33213.13 July (from 1206.00 1153.25 1192.10 32672.66 31626.44 32514.94 13th July) 1600 August 1198.25 1113.05 1136.30 10137.85 9685.55 9917.90 September 1250.50 1115.90 1142.05| 10178.95| 9687.55 9788.60 October 1243.50 1123.20 1222.30 10384.50 9831.05 10335.30 November 1274.95 1203.10 1216.55 10490.45 10094.00 10226.55 December 1275.95 1175.00 1258.25 10552.40 10033.35 10530.70 2018 Regulations, 2015, a certificate on half yearly basis confirming due compliance of share transfer formalities by the Company from Practicing Company Secretary has been submitted to Stock Exchanges within stipulated time. k) Distribution of Shareholding as on 31st March 2018: No. of Shares Stock Performance 0.27 2,586 4001 - 5000 0.94 1,31,07,907 3,782 0.40 3001 - 4000 1.64 2,29,25,003 9,429 1.00 4,231 2.66 2.47 3,46,71,463 5.83 8,16,30,062 % Number % Shareholding Shareholders Number 8,43,110 89.57 47,281 5.02 26,972 2.87 Upto 500 501-1000 1001-2000 2001-3000 January 1441.65 1242.85 1416.50 11171.55 10404.65 11027.70 February 1470.00 1276.00 1318.15 11117.35 10276.30 10492.85 March 1332.90 1259.25 1310.90 10525.50 9951.90 10113.70 3,73,32,579 Pre Bodies Corporate Directors & Relatives L&T Employees Welfare Foundation General Public TOTAL 20,23,45,408 14.44 10,32,87,263 11.07 8,99,08,301 6.42 6,43,39,638 6.90 14,21,965 0.10 15,09,274 0.16 17,21,28,421 12.28 11,47,52,281 12.30 28-Feb-18 28-Mar-18 30000 July (upto 1756.80 1671.00 1740.20 31885.11 31017.11 31804.82 12th July) Stock Performance Month 1900 - L&T BSE (*) -BSE SENSEX 33000 L&T NSE Price (₹) High Low Month Close Daily Closing Price NIFTY High Low Month Close 2017 32000 1800 L&T-BSE (*) 31000 1700 30000 BSE SENSEX Pre Bonus: 31-Jan-18 29-Dec-17 30-Nov-17 31-Oct-17 April 1771.00 1578.00 1748.05 30184.22 29241.48 29918.40 700 May 1834.00 1680.00 1759.75 31255.28 29804.12 31145.80 June 1809.50 1661.35 1687.80 31522.87 30680.66 30921.61 L&T BSE (*) BSE SENSEX 1500 38000 April 37000 36000 35000 1100 34000 33000 900 32000 31000 31-Jul-17 31-Aug-17 29-Sep-17 1300 2,96,43,045 2.12 1,76,21,579 1.89 May 1600 (iv) Underlying Equity Shares / GDR's The number of shares held in dematerialized and physical mode is as under: The Company's Shares are required to be compulsorily traded in the Stock Exchanges in dematerialized form. m) Dematerialization of shares & Liquidity: 88 87 2.12% Shares underlying GDRs 18.42% Investors -Foreign Institutional 23.73% Institutions Financial 14.44% Mutual Funds Directors & Relatives- 0.10% Bodies Corporate- 6.42% Foundation 12.28% L&T Employees Welfare General Public 22.49% as on March 31, 2018 Categories of Shareholders 31,52,55,195 22.49 21,98,79,572 23.57 140,13,69,456 100.00 93,29,65,803 100.00 9400 L&T-NSE (*) Bonus: Post 29000 July (upto 12th July) 1500 28000 1774.00 1576.60 1749.80 9367.15 9075.15 9304.05 1833.95 1677.60 1760.70 9649.60 9269.90 9621.25 1809.40 1661.30 1687.60 9709.30 9448.75 9520.90 1756.70 1671.00 1739.55 9830.05 9543.55 9816.10 Stock Performance 28-Apr-17 31-May-17 30-Jun-17 12-Jul-17 1900 L&T NSE (*) June NSE NIFTY Daily Closing Price 9700 Month L&T BSE Price (₹) High BSE SENSEX 1800 Low Month Close High Low Month Close 2017 10000 NSE NIFTY Date: May 28, 2018 S. N. Subrahmanyan 79 78 4 Complaints: SEBI / Stock Exchange Opening Received Resolved Pending* Balance Particulars During the year, the Company / its Registrar's received the following complaints from SEBI / Stock Exchanges and queries from shareholders, which were resolved within the time frames laid down by SEBI. During the year, the Company has resolved investor grievances expeditiously except for the cases constrained by disputes or legal impediments. iv) Number of Requests / Complaints: During the year ended 31st March 2018, 4 meetings of the Stakeholders' Relationship Committee were held on 29th May 2017, 3 iii) Meetings: ii) Composition: Allotment, transfer & transmission of Shares / Debentures or any other securities and issue of duplicate certificates and new certificates on split / consolidation / renewal etc. as may be referred to it by the Share Transfer Committee. Redressal of Shareholders' / Investors' complaints • The terms of reference of the Stakeholders' Relationship Committee are as follows: i) Terms of reference: 3) Stakeholders' Relationship Committee: *held jointly with the Institution they represent. 100 Mr. Arvind Gupta * As on 31st March 2018 the Stakeholders' Relationship Committee comprised of 1 Non- Executive Director, 1 Independent Director and 1 Executive Director. Shareholder Queries: Dividend Terms of reference: i) 4) Corporate Social Responsibility Committee: 80 79 The Board has delegated the powers to approve transfer of shares to a Share Transfer Committee of Executives comprising of four Senior Executives. This Committee held 42 meetings during the year and approved the transfer of shares lodged with the Company. Investor queries shown outstanding as on 31st March 2018 have been subsequently resolved. The Company repeatedly sends reminders to shareholders regarding unclaimed shares and dividends. This results in an increase in the number of queries received. 62 62 Related 7 501 481 27 Demat Remat 3701 3692 71 Transmission / Transfer 44 9392 8950 486 150 The terms of reference of the CSR Committee are as follows: Ms. Naina Lal Kidwai Mr. Ajay Shankar Mr. Vikram Singh Mehta Mrs. Sunita Sharma 225 Mr. M. Damodaran the year meetings Meetings during Attended 1,125 4,24,958 2,443 Mr. Subodh Bhargava Mr. M. M. Chitale 1,327 Mr. A. M. Naik Status Name No. of Shares held Mr. N. Hariharan, Company Secretary is the Compliance Officer. The attendance of Members at the Meetings was as follows- 28th July 2017, 11th November 2017 and 31st January 2018. Names Details of shares and convertible instruments held by the Non-Executive Directors as on 31st March 2018 are as follows: LARSEN & TOUBRO Chief Executive Officer & Managing Director No. of No. of Mr. Ajay Shankar Mr. Sushobhan Sarker * 150 Mrs. Sunita Sharma 1,500 Mr. Narayanan Kumar 31,650 Mr. Subramanian Sarma 150 Mr. Thomas Mathew T. 4,500 Mr. Sanjeev Aga 7,680 Mr. Akhilesh Gupta 150 Mr. Adil Zainulbhai 4 4 4 4 0 4 Chairperson Member Member Mr. Shailendra Roy 225 150 (a) formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by the Company; 9100 to in clause (a); and As part of the appointment letter issued to Independent Directors, the Company has stated that it will facilitate attending seminars/programs/ conferences designed to train directors to enhance their role as an Independent Director. Some of the Independent Directors are members of the IC Board. They share the learnings from these meetings with the remaining Non-Executive Directors/Independent Directors formally and informally. Such interactions also happen when these Directors meet senior management in IC meetings and informal gatherings. Presentations are made regularly to the Board / NRC / Audit Committee (AC) (minutes of AC, NRC, SRC and CSR Committee are circulated to the Board), where Directors get an opportunity to interact with senior managers. Presentations, inter alia, cover business strategies, management structure, HR policy, management development and succession planning, quarterly and annual results, budgets, treasury policy, review of Internal Audit, risk management framework, operations of subsidiaries and associates, etc. Independent Directors have the freedom to interact with the Company's management. Interactions happen during Board / Committee meetings, when senior company personnel are asked to make presentations about performance of their Independent Company (IC) / Business Unit, to the Board. The internal newsletters of the Company, the press releases, etc. are circulated to all the Directors so that they are updated about the operations of the Company. The Company holds Board meetings at its registered office and also if necessary, in locations, where it operates. Site / factory visits are organized at various locations for the Directors. All our directors are aware and are also updated as and when required, of their role, responsibilities & liabilities. a) Directors' Familiarization Program: G. OTHER INFORMATION Meetings held during the year are expressed as number of meetings eligible to attend. * Ceased to be a Member wef 1st October, 2017 This information is also available on the website of the Company http://investors.larsentoubro. com/Listing-Compliance.aspx. @Appointed as a Member wef 1st October, 2017 1 1 Member Mr. Subramanian 2 2 Member Mr. R. Shankar Raman 2 2 Sarma@ b) Risk Management Framework: c) Vigil Mechanism / Whistle Blower Policy : The Company has a Whistle Blower Policy in place since April 2004. The said policy was modified in line with the requirements of the 81 (b) recommend the amount of expenditure to be incurred on the activities referred I hereby declare that all the Board Members and Senior Management Personnel have affirmed compliance with the Code of Conduct as adopted by the Board of Directors. To the Shareholders of Larsen & Toubro Limited Sub: Compliance with Code of Conduct The Company has laid down a Code of Conduct for all Board members and senior management personnel. The Code of Conduct is available on the website of the Company www.larsentourbo.com. The declaration of the Chief Executive Officer & Managing Director is given below: f) e) Code of Conduct: Also please refer to Page 59 of the Board Report. 2,250+ in Tax, 1,850+ in Consulting, and 900+ in Financial Advisory. which include 2,700+ professionals in Audit, LARSEN & TOUBRO Deloitte is now a global network with circa 200,000 people with revenues over $30 billion. Deloitte India has more than 10,000 professionals operating out of 13 cities – Ahmedabad, Bengaluru, Baroda, Chennai, Coimbatore, Goa, Gurgaon, Hyderabad, Jamshedpur, Kochi, Kolkata, Mumbai and Pune providing professional services in the areas of Audit, Risk Advisory, Tax, Consulting, and Financial Advisory services to public and private clients spanning multiple industries. It draws its strength from its people, & Ross, PC Hansotia & Co and later with SB Billimoria (SBB) in 1999. In 2004, AF Ferguson & Co (one of India's oldest audit firm) merged into existing DHS firms. Deloitte Haskins & Sells LLP tied up with CC Chokshi & Co in 1983 which was one of the largest Indian Independent audit and accounting firms. After that, it got merged with Fraser Deloitte Haskins & Sells LLP, registered since 1983, is one of the member firms of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee ("DTTL"). Each DTTL member firm provides services in particular geographic areas and is subject to the laws and professional regulations of the particular country or countries in which it operates. The above process was followed by the Company while appointing M/s Deloitte Haskins & Sells LLP ('DHS') as the Auditors of the Company in 2015. In the case of appointment of new auditors, a Committee, comprising of the Chairman of the Audit Committee, the CFO and the Company Secretary, evaluates various audit firms based on approved criteria as given herein below. The Audit firms are required to make a presentation to this Committee. The Committee considers factors such as compliance with the legal provisions, number / nature / size and variation in client base, skill sets available in the firm both at partner level and staff level, international experience, systems and processes followed by the firm, training and development by the firm to its partners and staff, etc. during the process of evaluation. Based on merit and the factors mentioned above, the Committee finalizes the firm to be appointed and recommends the same to the Audit Committee. The Audit Committee reviews the same before recommending to the Board and shareholders for approval. d) Statutory Auditors: Also please refer to pages 58 and 59 of the Board Report. The Audit Committee periodically briefed about the various cases received, the status of the investigation, findings and action taken, if any. During the year, the Company has investigated the complaints received under the Whistle Blower Policy and suitable action has been taken against employees, wherever necessary. WBIC members. The WBIC meets formally and reviews the complaints and their progress. In addition, discussions also take place over video- conferencing, telephone and emails amongst the Vigil Mechanism under the Companies Act, 2013. The Company has a Whistle Blower Investigation Committee (WBIC) to manage complaints from "Identified" Whistle Blowers. In addition, WBIC considers "Anonymous" complaints which in their judgement are serious in nature and require investigation. The WBIC has four members viz. Chief Financial Officer, Company Secretary, Head- Corporate HR and Chief Internal Auditor. The WBIC is responsible for end to end management of the investigations from receipt of complaints to bringing them to a logical conclusion, keeping in mind the interest of the Company. Employees are encouraged to report any wrong-doings having an adverse effect on the Company's financials / image. An employee can report any wrong-doing in oral or written form. Whistle-blowers are assured by the management of full protection from any kind of harassment, retaliation, victimization or unfair treatment. Complaints under the Whistle Blower Policy are received by the Corporate Audit Services of the Company. The Chief Internal Auditor reviews the same and convenes a meeting of the WBIC for discussions. The WBIC, after screening the complaint, decides on the further course of action which will include requesting the complainant to provide further details, internal investigation by the Internal Audit department, investigation by external agencies, wherever necessary, opportunity to the defendant to present his/her case, etc. Based on the findings of the investigation, the WBIC decides the action to be taken and recommends the same to the Executive Committee for implementation. 82 Chairman Mr. S. N. Subrahmanyan Please refer to Page 56 of the Board Report. 1 iv) CSR Activities & Impact Assessment: 2 4 Member 4 4 4 4 Chairman Member the year during Attended No. of meetings Meetings No. of Status Name The Members at the Committee are as follows- During the year ended 31st March 2018, 4 meetings of the CSR Committee were held on 7th September 2017, 4th January 2018, 8th February 2018 and 26th March 2018. iii) Meetings: As on 31st March 2018 the CSR Committee comprised of 1 Independent Director and 2 Executive Directors. ii) Composition: 1 (c) monitor the Corporate Social Responsibility Policy of the Company from time to time. The Company is leveraging its countrywide presence to reduce disparities through interventions in Water and sanitation, Healthcare, Education and Skill building. Close interactions with the local community members have enabled the Company to identify and address their most pressing needs and the social interventions for community development have been specifically aligned. Under flagship program of "Integrated Community Development" (ICD), the Company has launched programs towards Mr. Vikram Singh Mehta Mr. R. Shankar Raman Mr. D. K. Sen holistic development in the following areas based on need assessment: Member Mr. A. M. Naik* year No. of No. of meetings Meetings during the Attended Status Name The attendance of Members at the Meetings was as follows- iii) Meetings: As on 31st March 2018, the Apex Risk Management Committee comprised of 2 Executive Directors and 1 Non-Executive Director. ii) Composition: Review the existing Risk Management Policy, framework and processes, Risk Management Structure and Risk Mitigation Systems. Broadly, the key risks will cover strategic risks of the group at the domestic and international level, including Sectoral developments, risk related to market, competition, political and reputational issues etc. Review operational risks including client quality, manpower availability, logistics and other aspects which impact the Company and the group. The terms of reference of the Apex Risk Management Committee are as follows: During the year ended 31st March 2018, 2 meetings of the Apex Risk Management Committee were held on 3rd August, 2017 and 14th November, 2017. i) 5) Risk Management Committee: LARSEN & TOUBRO All CSR projects have defined goals and milestones which are tracked as per the periodicity defined for the project. The progress is compared with the baseline data that is gathered before the commencement of the project. This is carried out through an onsite evaluation as well as the reports generated from the project. The indirect impacts that accrue are also factored and documented in the monthly reporting process. These are subsequently vetted/ measured during the external Social Audit or Impact Assessment. The social audit report is discussed during the Committee meetings. The detailed disclosures of CSR spending during the year has been given in Annexure 'C' forming part of this Board Report. Please refer to pages 95 to 99 of this Annual Report. Thirty Village Development Committees (VDCS) have been formed across locations, with participation from women. A quarterly review of the ICD projects is done with the village Panchayats and local authorities. Access to cleaner water, hygienic surroundings, better health, education and new skills, has altered the lives of around 1 million individuals through our CSR Programs in 2017-18. Skill development: Enhancing employability of youth (enhancing training capacity, improved infrastructure of skill development centres). to quality health care (expanding infrastructure of health centres, increased number of people availing quality health care) Water & Sanitation: For the availability of safe drinking water and proper sanitation facilities Terms of reference: Health: Improvement in access Education: To improve access to education (increased enrollment in pre- school, children attending neighborhood schools) and improving quality of learning (better school infrastructure, better teaching-learning process) 436-437 Directors' Report 438-545 Statements AGM Notice AGM Venue 46 Notes Forming Part of Route Map to the 64-167 the Consolidated Financial Information Regarding Shareholder's 546-555 Management Discussion & Analysis 168-299 Proxy Form 557-558 Auditors' Report on Statements Standalone Financial Satisfaction Survey Form Statement Subsidiary Companies 44-45 14-18 Consolidated Cash Flow 300-309 Corporate Social Consolidated Financial Responsibility Statements 418-429 Annual Business Responsibility Report Consolidated Balance Sheet 430-431 (ABRR) 2018-19 20-41 Consolidated Statement Standalone Financials - of Profit and Loss 432-433 10 Year Highlights 42 Consolidated Statement Consolidated Financials of Changes in Equity 434-435 - 10 Year Highlights 43 Graphs - 2018-19 Subramanian Sarma Balance Sheet M/s. Deloitte Haskins & Sells LLP Registrar & Share Transfer Agents Karvy Fintech Private Limited MR. ADIL SIRAJ ZAINULBHAI Independent Director MR. AKHILESH KRISHNA GUPTA Independent Director MRS. SUNITA SHARMA Nominee of Life Insurance Corporation of India MR. THOMAS MATHEW T. Independent Director MR. AJAY SHANKAR Independent Director MR. SUBRAMANIAN SARMA Non-Executive Director MRS. NAINA LAL KIDWAI Independent Director MR. SANJEEV AGA Independent Director MR. NARAYANAN KUMAR Independent Director MR. ARVIND GUPTA Nominee of SUUTI MR. HEMANT BHARGAVA Nominee of Life Insurance Corporation of India 74th Annual General Meeting at Birla Matushri Sabhagar, 19, Sir Vithaldas Thackersey Marg, Mumbai - 400 020. on Thursday, 1st August, 2019 at 3.00 p.m. 7 8 ORGANISATION STRUCTURE ANNUAL REPORT 2018-19 Arvind Garg Auditors' Report on Hasit Joshipura Shrikant Joshi Mahesh Joshi L&T Valves M V Satish Auditors 559-560 L&T House, Ballard Estate, Mumbai - 400 001 Mr. N. Hariharan 310-311 Statement of Profit and Loss 312-313 COMPANY INFORMATION | ANNUAL REPORT 2018-19 LARSEN & TOUBRO COMPANY INFORMATION BOARD OF DIRECTORS MR. A. M. NAIK Group Chairman MR. S. N. SUBRAHMANYAN Chief Executive Officer and Managing Director MR. R. SHANKAR RAMAN Whole-time Director & Chief Financial Officer MR. SHAILENDRA NARAIN ROY Whole-time Director & Sr. Executive Vice President (Power) MR. D. K. SEN Whole-time Director & Sr. Executive Vice President (Infrastructure) MR. M. V. SATISH Whole-time Director & Sr. Executive Vice President (Buildings, Minerals and Metals) MR. JAYANT DAMODAR PATIL Whole-Time Director & Sr. Executive Vice President (Defence, L&T-NxT) MR. M. M. CHITALE Independent Director MR. SUBODH BHARGAVA Independent Director MR. M. DAMODARAN Independent Director MR. VIKRAM SINGH MEHTA Independent Director Company Secretary Registered Office 12-13 In the last few years, urban planning authorities have zeroed in on metro rail networks as the most viable solution for decongesting urban traffic in our cities. While over ten cities have operational metro rail networks covering close to 600 km of inner city networks, another 600 km are currently under construction and around 1400 km are in the planning stage. Investment in this area is expected to continue for many years as more and more cities move from drawing board to execution phase over the years. Total spends on Metro Rail networks in the country over the next few years are expected to be in the region of 400,000 crore. 317-417 Your Company has once again turned in a stellar performance on all key parameters. Order Inflows, which are the lifeblood of any business with Engineering, Procurement and Construction (EPC) as its core, came in at ₹ 176,834 crore in FY19 registering a strong growth of 16% over FY18. The unexecuted Order Book as on 31st March, 2019 stood at 293,427 crore which gives us strong revenue and margin visibility for the next few years. Revenues in FY19 have clocked in at 141,007 crore registering a resurgent growth of 18% over FY18. PAT touched an all-time high of 8,905 crore in FY19 representing a substantial growth of 21% over FY18. The touchstone of your Company has been its focus on shareholder value creation and your Company has delivered on this front in FY19 as well. It gives me great pleasure to inform you that the Board of Directors has recommended a Dividend of 18.00 per share. The corresponding dividend in the previous year was 16.00 per share. International business Geographical de-risking has always been part of your Company's game plan for international markets. Across the last decade, the strong organisation which we have built in the oil-rich Middle East region has paid handsome dividends, while insulating us from the periodic ups and downs of the domestic economy. The recent volatility in crude prices due to political and economic crosscurrents has, however, led to reduced investments in OPEC regions. Having proactively readied itself for such an eventuality, your Company forayed into select African countries, Bangladesh and Sri Lanka. This sustained drive over the last few years has started yielding results, with non-Middle East business contributing to around 45% of the International Order Book. Meanwhile, L&T Infotech (LTI) and L&T Technology Services (LTTS) accelerated their growth thrust in the US and European markets. Talent Management and Succession Planning Your Company believes that people are the basic building blocks of a business organisation, and places unrelenting emphasis on nurturing, retaining and developing talent at all levels of management. The wide canvas of businesses within the Group offers unparalleled opportunities for professional growth. Structured professional and leadership development programmes, monetary and non-monetary rewards as well as a conducive work environment and mentoring at various levels form the backbone of HR initiatives of your Company. I personally allocate quality time to mentoring the next generation of leaders for the Group, apart from involvement in strategy, business portfolio rationalisation and CSR. LARSEN & TOUBRO Group level Performance Overview Sustainable Development In 2018-19 your Company moved to a higher level of disclosure in the public domain and published its first Integrated Report () which conforms to the International Integrated Reporting Council (IIRC) framework and is in accordance with the Global Reporting Initiative (GRI) Standards. Total spends on CSR initiatives in 2018-19 by your Company amounted to 122 crore under eligible items, as defined in the Companies Act. This translates to 2% of the average annual net profits of the Company over the last three years. The focus areas under CSR continue to be health, education, skill building, water and sanitation. Outlook Apart from the hustle of the election campaigns distracting attention from economic policy-making, this year we had to contend with global deceleration and financial constraints cramping many economies. All this is likely to present challenges to India's growth story in FY20. We expect the investment climate to improve in the second half of FY20, as the new Government settles down. Financial markets and capital inflows may witness volatility in the first half of FY20 but gain relative stability in the latter half, given India's inherent potential as an investment destination in the emerging markets space. The traction that the country's infrastructure development has seen in the last few years will, to our minds, continue in the future. Retail (CPI) inflation, projected by the RBI to remain below 4% up to end-2019, should facilitate a soft monetary policy in FY20. Additionally, the decisive market interventions of the central bank, the recent recapitalisation of public sector banks and the ongoing resolution of chronic stressed asset cases through IBC give us reason for a broadly positive outlook. Segments which hold promise in the current year include: 1) Infrastructure a) Urban Infrastructure Your Company has for several years been at the forefront of designing and constructing large and complex civil infrastructure. Our capabilities and track record place us in pole position to make the most of numerous emerging opportunities. These include: airports, commercial buildings, hospitals, educational institutions, convention centres, shopping malls, IT buildings, affordable housing and high-end residential real estate. b) Smart Cities Your Company views sustainability as the essential discipline of balancing economic growth with social inclusiveness and environmental conservation. Our Sustainability Policy mirrors our values and ethos, while our Sustainability Programme is aligned to universally recognized development goals and focused on measurable outcomes. We offer green technology solutions for our clients, work continuously on energy intensity reduction and shrinking our carbon footprint. A 'reduce, reuse, recycle and redeem' principle has helped us reduce consumption of natural resources. Most of our campuses are water positive and many harness green energy. On the community front, the social infrastructure which we help to build is introducing positive change in the lives of thousands who live in proximity to our campuses. The mantle of social responsibility extends beyond the organization to a youthful army of your Company's employee volunteers known as 'L&Teers'. It is indeed heartening that many L&Teers, entirely of their own volition, have made social change their personal mission. On the international front, optimism and growth are being held hostage to geo-political uncertainties, such as Brexit, the flaring of protectionist tendencies and the combustible issue of trade tariffs. Current consensus forecasts point to a slowdown in the world economy in 2019, precipitated by higher oil prices in 2018 and tempering of US growth, even as the US Fed is under pressure to adopt an accommodative monetary stance. Against this backdrop, your Company's investments in targeted geographies are expected to yield salutary returns. Our clear thrust is towards renewable energies, hydrocarbon expansion and non-oil revenues in the Middle East as well as significant investments in infrastructure in non-Middle East geographies where your Company has consolidated its presence. While the private sector has been somewhat tentative in increasing spends in FY19 (in areas of PPP, industrial capex and certain segments of urban infrastructure), the public sector has been far more forthcoming with vigorous investments in key sectors. These include water, metro rail networks, railways, roads and road adjacencies (special bridges, expressways and city flyovers), power transmission & distribution and hydrocarbon. The strong underlying macro drivers of investments in these sectors are expected to sustain into FY20 and beyond. Encouragingly, the private sector also seems to have overcome its bashfulness, and begun to show signs of revival in road concessions, airports, healthcare, metals, mining and cement capacity augmentation. Gross fixed capital formation rate improved to 32.3% in FY19 from 31.4% in FY18, signalling a smart rise in public investment spending. Though corporate earnings have registered reasonable growth during FY19, Flls have been withdrawing significant tranches of money from secondary markets for the better part of the year. Domestic money managers also rebalanced their portfolios by favouring defensive sectors and reducing allocations to cyclical sectors like Infrastructure. The last few months of FY19 have, however, witnessed a rebooting of confidence in the future of the economy, with markets too recording a significant inflow of FII money. LED BY TECHNOLOGY EQUIPPED FOR GROWTH LARSEN & TOUBRO 74th ANNUAL REPORT 2018-2019 H. HOLCK-LARSEN VISION TOUBRO L&T shall be a professionally-managed Indian multinational, committed to total customer satisfaction and enhancing shareholder value. L&T-ites shall be an innovative, entrepreneurial and empowered team constantly creating value L&T shall foster a culture of caring, trust and continuous learning while meeting expectations of employees, stakeholders and society. LARSEN & TOUBRO CHAIRMAN'S STATEMENT | ANNUAL REPORT 2018-19 LARSEN & TOUBRO We look forward with optimism to political leadership with the vision, maturity and resolve to usher in a resurgent era of inclusive growth and prosperity. A.M. NAIK GROUP CHAIRMAN Dear Shareholders At the outset, our hearty congratulations to the new Government on winning a decisive mandate in the General Elections. With the uncertainties thrown up by the polls now behind us, the country can re-focus on its primary goal of building a new future for all its citizens. We look forward with optimism to the new political leadership which we believe possesses the vision, maturity and resolve to usher in a resurgent era of inclusive growth and prosperity. Economic Scenario India's GDP in FY2019 is estimated to have grown by around 7 per cent. While this is a laudable achievement in the global context, it falls marginally short of expectations due to an interplay of macro-economic and political factors. These include the uncertainties which invariably accompany our General Elections, volatility in crude prices and unpredictable currency fluctuations. The economy also had to grapple with a funding crunch for NFBCS precipitated by the IL&FS debt default, deceleration in the agriculture and mining sectors and widening of fiscal and current account deficits. On a positive note, the country has largely got back on track after the initial disruptive effects of twin reform measures, viz., Demonetisation and GST. The longer-term benefits of both these measures are gradually being realised through an uptick in tax collections on an expanding base of tax payers. We also see the light at the end of the tunnel in the case of overleveraged corporate balance sheets and high bank loan delinquencies. Imaginative steps such as the resolution of stressed businesses under the Insolvency & Bankruptcy Code, bank recapitalisation and more stringent application of NPA credit provisions norms should help the sector back on its feet. It is also heartening to note that India now ranks 77th in the World Bank's Ease of Doing Business index, continuing its ascent for the second consecutive year. Benign headline retail (CPI) inflation (a nominal anchor of monetary policy) over a prolonged period has prompted a softer monetary policy resulting in lower interest rates. Eventually, this should rev up private sector investment, which has remained dormant for the past few years. 1 2 CHAIRMAN'S STATEMENT | ANNUAL REPORT 2018-19 Your Company leads the way in building smart city infrastructure and is well-positioned for the projects likely to be ordered out. We are looking at expanding opportunities in intelligent traffic management and surveillance systems, smart electric grids & lighting, fibre optic cabling and transport & logistics systems. The domain expertise available with L&T Infotech and L&T Technology Services positions your Company as a formidable player in Master Systems Integration for smart city projects. c) Roads While the focus of the National Highways Authority of India continues to be on both EPC and the Hybrid Annuity Model, expressways as well as special bridges and city flyovers are likely to buttress the overall roads investment programme in the country. d) Railways Your Company is in the process of acquiring a controlling stake in Mindtree Limited, a company operating in the IT services space. We believe the acquisition would be completed in the best interests of all stakeholders. For L&T, it is a good opportunity to grow the IT&TS business portfolio and create value for the shareholders. Strategic Plan Your Company's 5-year strategic plan 'LAKSHYA' is the roadmap for growth and value addition. LAKSHYA extends from FY17 to FY21 and encompasses every major performance parameter to achieve the over-arching goal of boosting ROE. Your Company is well on its way to achieving its targets and has recorded progress on all fronts of the Lakshya plan over the last three years (FY17 to FY19). We remain confident of achieving the goal in FY21 (the terminal year of the plan) and in the meantime, have been developing the next strategic plan (to be launched from FY22) to ensure steady, profitable growth into the future. Acknowledgements I would like to thank the leadership team of L&T headed by Mr. S.N. Subrahmanyan and all the employees for their stellar contribution to the Company's performance. I also thank our customers, vendors and other stakeholders for their confidence and trust in the Company. I acknowledge and thank my fellow Board Members for their invaluable support in taking the Company to greater heights. Thank You Anmail A.M. Naik Group Chairman 5 6 CONTENTS ANNUAL REPORT 2018-19 CONTENTS Company Information 7 Statement of Changes in Equity 314 Organisation Structure 8-9 Cash Flow Statement 315-316 Leadership Team 10 Notes Forming Part of the L&T Nationwide Network Financial Statements Acquisition of Mindtree Limited & Global Presence Industry 4.0 and adopting 'Smart' products, systems & processes to unlock incremental value. While it is too early to talk about financials, L&T-Nxt is well positioned to capture a significant market share and become one of the key drivers for L&T's growth in the long term. Your Company is an early adopter of digital technologies among India's E&C companies, and is adept at loT, Lidar, photogrammetry, BIM, AI and Machine Learning. Launched three years ago, the digital initiative yielded significant asset productivity gains and process efficiencies to operations ranging from pre-bid engineering and cost-estimation, project execution and monitoring and supply chain interactions. With the execution of the first two legs of the Dedicated Freight Corridor well underway, the focus has shifted to the Mumbai-Ahmedabad high speed rail project, rapid electrification of railway lines and track upgradation / augmentation. All these are likely to provide good business prospects in FY20. 3 4 CHAIRMAN'S STATEMENT | ANNUAL REPORT 2018-19 e) Metro Rail 2) Water Infrastructure The sector has seen a surge in investments over the last few years, and the momentum is expected to continue. Infrastructure for management of water resources within the country, waste-water treatment facilities as well as large lift irrigation systems are likely to see continued investment. Inland waterways infrastructure could receive focused government attention from FY20 onwards. 3) Power Transmission & Distribution (PT&D) Prospects in India and other focused geographies continue to be strong, with investments by Central as well as State utilities offering good business opportunities. The Saubhagya initiative launched by the Government in 2017 to transmit electricity to individual households along with smart metering has given good business traction to your Company. This programme is expected to extend into FY20 as well. While building further on its presence in the Middle East markets, your Company has also successfully entered parts of East Africa, Algeria, Egypt and countries in East Asia. These geographies are likely to provide continual growth opportunities. 4) Hydrocarbon This business has grown rapidly in FY19 in terms of Order Inflows and Revenues. It sees sizeable investment prospects in domestic and international markets in both offshore and onshore segments. Prevailing oil prices, hovering around USD 70 per barrel (Brent Crude), should spur further investment in oil producing countries, and ensure a pipeline of continued investments in the production and processing of hydrocarbons. 5) Heavy Engineering Your Company's competitive position is built around its strong technological capabilities in designing and production of sophisticated equipment for the oil & gas, fertiliser and power sectors. On the back of significant all-round growth in FY19, the business is expected to leverage strong domestic and global business opportunities in FY20. 6) Defence Engineering This business segment was formed keeping in mind the abundant business opportunities that are likely to come up in the domestic market on a continuing basis. Your Company's expertise spanning three decades, in both land-based and naval systems, gives this business a competitive edge in responding to the strong defence capex outlay that is likely to sustain at a national level in the coming years. 7) Thermal Power Generation This sector continues to face a host of challenges. Manufacturers of core power generation equipment must contend with over-capacity, intensive competition and inadequate coal supply. Aggravating this is a customer base weakened by financially-stressed IPPS, public utilities in the red and rural customers clamouring for more subsidised power. Despite these prevailing conditions, your Company sees the potential to bid for around 8 GW of upcoming projects in the power EPC space as well as tenders for retro- fitting existing power plants with state-of-the-art emission control equipment. During the last year, we successfully executed gas-fired power plant projects in Bangladesh and are targeting similar opportunities in neighbouring countries. 8) Realty The real estate sector is slowly picking up as demonstrated in an increase in sales, a gradual reduction of unsold inventory levels and improvement in absorption rates. Your Company's real estate development projects in Mumbai as well as Bengaluru are progressing well and are expected to provide steady revenues and profits over the next few years. The launch of new projects in Mumbai and Chennai should provide growth momentum to this business. 9) Information Technology and Technology Services (IT&TS) This business segment, comprising two separate listed entities (L&T Infotech and L&T Technology Services) has recorded strong revenue growth and increased profitability over the last few years. The business is expected to continue registering strong growth in FY20 while maintaining margins. LARSEN & TOUBRO 10) Financial Services The NBFC space in India since mid-2019 has been dominated by the unfortunate developments concerning IL&FS. It has led to a liquidity squeeze, and made lenders wary of rolling over short liability positions. Your Company's financial services business successfully weathered the upheaval thanks to its robust financial structure, control on ALM mismatches, short term strategy and sound operating practices. The situation has since improved and the business turned in a superlative financial performance in FY19 on all key parameters even during a volatile year. The business has delivered top quartile Return on Equity (ROE) in FY19 and expects to continue this strong ROE performance in FY20. 11) Development Projects Your Company has a clutch of concessions in roads, transmission lines, coal fired power plants, hydel power plants and a large metro rail (in Hyderabad). In FY19, we successfully divested five road assets to an Infrastructure Investment Trust (InvIT) and a container port (in Kattupalli, Tamil Nadu) as part of our wide-ranging efforts to enhance Group ROE. Certain stretches of the Hyderabad Metro Rail have been completed in FY19 and it is expected that the network will be commissioned fully in FY20. The focus here is on monetisation of the value created in these businesses. L&T-NxT On the strength of wide-ranging digital transformations achieved successfully within the L&T group, we have now launched a new strategic initiative 'L&T-NXT' to extend this in-house experience and expertise to global markets and create value for our clients in select industry verticals. Leveraging the domain expertise of L&T across diverse industry segments, L&T-NxT targets building a business through the use of new age technologies, such as lloT, digitalisation and analytics, Artificial Intelligence, Augmented/Virtual Reality, Geo-spatial applications and Cyber Security to partner our clients in their transformation journey. We believe there is a huge opportunity ahead with an increasing number of companies moving towards and attaining global benchmarks. 47-63 CEO & Managing Director S N Subrahmanyan • Substation & Distribution • Utility Power • Waste Water Distribution • Transmission Lines International Middle East • Africa • ASEAN Solar Subsidiary • L&T Saudi Arabia • Industrial & Large Water Systems • City Infrastructure (Water) • Water- International Smart World & Communication • Security Solutions • Water Supply • Communication Network & Telecom Infrastructure Water & Effluent Treatment & Distribution Hydrocarbon Caspian • L&T Metallurgical & Material Handling • Minerals & Metals • Middle East • Products Buildings & Factories Commercial Buildings & Airports • IT, Office Space • Airports • Health • Public Space Residential Buildings Factories Subsidiary • L&T Oman LLC Joint Ventures • AL BALAGH- L&T JV Power Transmission Domestic • Smart Infrastructure Heavy Civil Transportation Hyderabad Infrastructure Infrastructure Metro • Metros Subsidiaries • L&T Oman LLC • L&T Infrastructure Engineering Ltd. • Hitech Rock Products & Aggregates Ltd. Hydrocarbon International FZE • Larsen & Toubro Heavy Engineering L&T Valves Valves for •Oil & Gas •Thermal Power •Nuclear Power •Defence •Chemicals & Petrochemicals Chairman & Board of Directors Transportation (International) • Special Projects Railway Construction • Railway • Defence Special Projects (Hydel, Tunnels & Mega Civil Projects) • Ports & Harbours • Nuclear Construction • Special Bridges L&T Geostructure Joint Ventures • ALYSJ JV Gold Line Doha Metro • L&T • ArRiyadh New Mobility Consortium- Riyadh Metro Orange Line & Elevated Corridors (Domestic) • Roads & Runways • Elevated Corridors • City Infrastructure (Transportation) Railways • Railway Systems Roads, Runways Projects Nigeria LLP International • Hydraulic Systems and Components • L&T Kobelco Machinery Private Limited Internal Mixers & Extruders • Electrical Standard Products • Metering & Protection Systems Projects • Electrical Systems & Equipment • Control & Automation Subsidiaries • TAMCO Group (Medium Voltage Systems) • Henikwon Corporation • L&T Electrical & Automation FZE • L&T Electrical and Making Machinery & Road • Construction Limited D K Sen • L&T Overseas T Madhavadas S Rajavel SV Desai KV B Reddy Construction, Mining, and Industrial Machinery Electrical & L&T Realty Automation L&T Hydrocarbon Engineering Automation Saudi Arabia Products • Offshore • Onshore • Land • Construction Machinery • Mining Machinery • Rubber Processing Machinery Subsidiary/JV • L&T Development Types: Company Construction Equipment • Servowatch Systems ⚫Kana Controls Associates • L&T Sapura Shipping •⚫ L&T Sapura Offshore • Larsen Toubro Arabia • PT. Larsen & Toubro Hydrocarbon Engineering Indonesia • L&T-Chiyoda • L&T-Gulf Subsidiaries & Hydrocarbon Saudi (formerly Larsen & Toubro • Larsen & Toubro Kuwait Construction • Larsen & Toubro Electromech • L&T Modular Fabrication Yard Limited • Larsen & Toubro Hydrocarbon ATCO Saudi) (Advanced Value Engineering & Technology) • L&T Fabrication Development • Slum Rehabilitation Authority Projects Development Verticals: Integrated Mixed Use Development Residential • Elite Housing • Luxury Housing Commercial • Built-to-suit Office • ADVENT • Standalone Commercial Buildings Campuses • Integrated Malls • High Street Retail Transit Oriented Development • Construction Services • Modular • Joint Venture Retail Development Chairman 8 8 Member Member 6 Mr. Sushobhan Sarker @ Mr. M. M. Chitale Mr. M. Damodaran 1 1 8 the year Minutes of the Audit Committee Meetings are circulated to the Board of Directors and discussed, when necessary. Status Name The members of the Audit Committee also meet without the presence of management. The attendance of Members at the Meetings was as follows: During the year ended 31st March 2019, 8 meetings of the Audit Committee were held on 27th April 2018, 27th May 2018, 24th July 2018, 23rd August 2018, 30th October 2018, 13th December 2018, 24th January 2019 and 27th February 2019. iii) Meetings: As on 31st March 2019, the Audit Committee comprised of four Independent Directors. ii) Composition: Monitoring the end use of funds raised through public offers and related matters. Valuation of undertakings or assets of the company, wherever it is necessary. Evaluation of internal financial controls and risk management systems. • Approval or any subsequent modification of transactions of the Company with related parties. Mr. Sanjeev Aga Reviewing the utilization of loans and/ or advances from/investment in the subsidiary companies exceeding rupees 100 crore or 10% of the asset size of the subsidiary, whichever is lower including existing loans / advances / investments. No. of No. of meetings Meetings during Attended Member 2) Nomination & Remuneration Committee (NRC) 8 appointed in senior management in Review and monitor the auditor's independence and performance, and effectiveness of audit process. Review the management discussion and analysis of financial condition and results of operations. Identify persons who are qualified to become directors and who may be • i) Terms of reference: The Nomination & Remuneration Committee was constituted in 1999 even before it was mandated by law. subsidiaries have engaged external firms for conducting internal audit. The Corporate Audit Services team of the Company also covers the internal audit of all ICs and Subsidiary Companies. An in-depth audit is conducted by the team. The major deviations are highlighted and discussed with the concerned IC and/or subsidiary company Boards and the report highlighting the variations and the suggested corrective actions are also placed before the Audit Committee of the Company. Some etc. are reviewed by external experts. Presentations are made to the Audit Committee, on the findings of such reviews. From time to time, the Company's systems of internal controls covering financial, operational, compliance, IT applications, The Corporate Audit Services team carries out theme-based audits (revenue recognition, IT controls, etc.), joint audits with other Corporate departments for specific functions, identifies risk-based focus areas in project audits, benchmarks the audit processes with large companies, encourages its team members to obtain globally renowned CISA, CIA and CFE Certification, etc. The audit plan is finalized based on the value of the contract in case of construction projects and the geographical spread of the Company. It is ensured that, on an average, all operations get covered in a span of two years. The Corporate Audit Services team has its offices at Mumbai and Chennai and all overseas audits are shared between these two zones. 8 The Company has an internal corporate audit team consisting of Chartered Accountants / Cost Accountants and Engineers. Over a period of time, the Corporate Audit department has acquired in-depth knowledge about the Company, its businesses, its systems & procedures, which knowledge is now institutionalized. The Company's Internal Audit function is ISO 9001:2015 certified. The Head of Corporate Audit Services is responsible to the Audit Committee. The staff of Corporate Audit department is rotated periodically to have a holistic view of the entire operations and share the findings and good practices. The Chief Executive Officer & Managing Director, Whole-time Director & Chief Financial Officer and Head - Corporate Audit Services are permanent invitees to the Meetings of the Audit Committee. The Company Secretary is the Secretary to the Committee. All the members of the Audit Committee are financially literate and have accounting or related financial management expertise. ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 90 89 # appointed as a member w.e.f 28th May 2018 @ ceased to be a member w.e.f. 2nd May 2018 Meetings held during the year are expressed as number of meetings eligible to attend. 6 6 Member Mr. Narayanan Kumar # iv) Internal Audit: The recommendation for appointment, remuneration and terms of appointment of cost auditors of the Company. 0.088 Approval of appointment of CFO (i.e., the whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience & background, etc. of the candidate. Details of shares and convertible instruments held by the Non-Executive Directors as on 31st March 2019 are as follows: Names crore Names Sitting Fees for Sitting Commission Others Total Fees for Board Committee Meeting Meeting Mr. A. M. Naik Mr. A. M. Naik 0.088 0.034 5.000 3.033* 8.155** Mr. M. M. Chitale No. of Shares held 4,24,958 2,443 Mr. M. M. Chitale 0.038 0.381 NIL 0.507 Mr. Subodh Bhargava 1,125 Mr. Subodh Bhargava 0.088 0.034 0.531 NIL 0.653 accordance with the criteria laid down crore. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee. Mr. A. M. Naik has exercised 5,49,375 & 10,40,000 vested outstanding stock options which were granted in Larsen & Toubro Infotech Limited and L&T Technology Services Limited respectively. The perquisite amount on exercise of these options are 213.39 $ Ceased to be a Director w.e.f. 2nd May 2018 To review the functioning of the Whistle Blower mechanism. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board. • • • LARSEN & TOUBRO Names Sitting Fees for Fees for Board Committee Meeting Meeting Mr. Narayanan Kumar Mr. Arvind Gupta # Mr. Hemant Bhargava 0.088 0.030 0.279 NIL 0.397 0.078 NIL 0.020 NIL 0.155 NIL 0.233 0.017 NIL 0.037 @ # ML Others include pension of 3 crore and perquisite value of housing and medical * 0.033 crore ** Does not include the perquisite value related to ESOPS exercised during the year in respect of stock options granted over the past several years by Larsen & Toubro Infotech Limited and L&T Technology Services Limited of 213.39 crore. @Appointed as a Director w.e.f. 28th May 2018 # Payable to respective Institutions they represent. by the Committee; 4.186 6.998 and removal of such persons; 3.743 0.198 7.270 1.710 18.603 48.454 0.272 21.508 5.671 2.400 Mr. S. N. Subrahmanyan Mr. R. Shankar Raman Mr. Shailendra ESOPS* Salary Perquisites Perquisites Retirement Commission Total related to Benefits crore The details of remuneration paid / payable to the Executive Directors for 2018-19 is as follows: (a) Executive Directors: 12.154 25.075 Names The NRC reviews on a periodic basis the succession planning process being followed by the Company especially at the level of the Board and senior management. programs, conducted by reputed institutions like IIM-Bangalore, IIM-Calcutta, XLRI, Symbiosis and NMIMS for deserving employees to develop superior management skills and capabilities. A host of strategic and behavioral programs are conducted to address specific training and developmental needs of employees. A comprehensive e-learning portal ATL (Any Time Learning) is available with multiple on-line programs and courses for employees to enable learning 'at any time, at any place' at locations remote or otherwise. The portal provides access to on-line data bases, references, management videos, e-books and journals. To ensure that the Company has sufficient pool of probable employees who can be nominated for Leadership Pipeline, efforts are taken at the grass root level. There exist several structured core developmental In order to continuously monitor the progress of high potentials (HIGH POTS) who go through the Seven Step Leadership Development process and to ensure that they are given challenging roles and responsibilities, a Top Talent Management System is also put in place which is essential to ensure progress of a strong leadership pipeline. To facilitate enhanced global acumen & international exposure, which are critical competencies for establishing a global footprint, the Company continues to nominate select senior leaders for Advanced Management Programs offered by globally renowned business schools like INSEAD, Wharton, Harvard, IMD, London Business School, Oxford and the likes. As a part of Leadership development at the top echelons of the organization, a structured & systematic approach to mentoring has been initiated to leverage on the leadership experiences & networks of senior leaders and to enable them to leave a legacy of success mantras. & mind-set to transition seamlessly to the next level of leadership and global entrepreneurship. In this effort, the Company has partnered with globally renowned senior faculty and premier institutes like Harvard Business School, INSEAD, IIM Ahmedabad, and Stephen M. Ross School of Business- University of Michigan. The programs are designed to provide inputs on vital areas of strategic importance such as innovation-based strategies, integrated business models to take on global multinationals, cross- cultural challenges, organic and inorganic growth etc., and thus mark an important milestone in the journey towards leadership development in the global context. LARSEN & TOUBRO Each step of this Leadership pipeline development process has been meticulously customized to equip managers at various levels, with the required knowledge, skill vi) Training & Succession Planning: The Company has institutionalized Leadership Development through a Seven Step leadership pipeline for development of a robust stage-wise leadership by a structured process of talent management. The thrust is on facilitating the transformation of managers into leaders, leaders into 'corporate entrepreneurs (intrapreneurs)' and to create a large pool of leaders who can envision, inspire, and successfully deploy global growth strategies thus creating a result-oriented culture of multiplying value. Members are also requested to refer to page 70 of the Board Report. The Chairman of the Company discusses the performance evaluation results with the Chairman of the NRC and interacts with all the Non-Executive Directors & Independent Directors on a one-to-one basis. The NRC Chairman also interacts with the Executive Directors. The performance evaluation questionnaire covers specific criteria with respect to the Board & Committee composition, structure, culture, Board processes and selection, effectiveness of the Board and Committees, functioning of the Board and Committees, information availability, remuneration framework, familiarization program, succession planning, assessment of their independence, etc. It also contains specific criteria for evaluating the Chairman and individual Directors. An external consultant was engaged to receive the responses of the Directors and consolidate/analyze the responses. vii) Details of remuneration paid / payable to Directors for the year ended 31st March 2019: 1.590 0.520 2.630 2.332 * payable to the Non-Executive Directors for 2018-19 is as follows: The details of remuneration paid / (b) Non-Executive Directors: part of the remuneration of these Directors. Details of Options granted under Employee Stock Option Schemes are provided on the website of the Company www.larsentoubro.com. Apart from ESOPs of the Company, Mr. S. N. Subrahmanyan has also been vested 40,000 stock options in Larsen & Toubro Infotech Limited and L&T Technology Services Limited each and he has exercised the same. Similarly, Mr. R. Shankar Raman has been vested 20,000 stock options in Larsen & Toubro Infotech Limited and he has exercised the same. The perquisite amount on exercise of these options is considered as a No severance pay is payable on termination of appointment. ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 94 93 Notice period for termination of appointment of Chief Executive Officer & Managing Director and other Whole-time Directors is six months on either side. *Represents the perquisite value related to ESOPS exercised during the year in respect of stock options granted over the past several years by the Company, Larsen & Toubro Infotech Limited and L&T Technology Services Limited and includes tax on ESOPs borne by the Company wherever applicable. 1.710 5.283 8.223 0.180 1.050 Mr. J. D. Patil Satish 5.985 9.383 1.948 0.220 1.230 Mr. M. Damodaran 1.462 1.230 0.120 Mr. D. K. Sen Mr. M. V. N. Roy 7.049 14.121 Performance Evaluation Criteria for Independent Directors: Compliance.aspx. http://investors.larsentoubro.com/Listing- As required by the provisions of Regulation 46 of the SEBI LODR Regulations, the criteria for payment to Independent Directors / Non-Executive Directors is made available on the investor page of our corporate website Mr. A. M. Naik 7 7 Mr. Subodh Bhargava Chairman No. of No. of meetings Meetings during Attended the year Status Name The attendance of Members at the Meetings was as follows: During the year ended 31st March 2019, 7 meetings of the Nomination & Remuneration Committee were held on 5th April 2018, 28th May 2018, 25th July 2018, 31st October 2018, 25th January 2019, 22nd February 2019 and 25th March 2019. iii) Meetings: As at 31st March 2019, the Committee comprised of 3 Independent Directors and the Group Chairman. ii) Composition: Recommend to the Board, all remuneration, in whatever form, payable to senior management. LARSEN & TOUBRO Administration of Employee Stock Option Scheme (ESOS); relating to remuneration for the Directors and Key Managerial Personnel (KMP); Recommend to the Board a policy, Carry out evaluation of the Board and directors; of directors, Board and the Board Committees; Formulation of criteria for evaluation • Devise a policy on Board diversity; • independence of a director; qualifications, positive attributes and Formulate criteria for determining . Member Recommend to the Board appointment 7 Mr. Adil Zainulbhai In the case of nominees of Financial Institutions, the commission is paid to the Financial Institutions. The Independent Directors / Non-Executive Directors are paid remuneration by way of commission & sitting fees. The Company paid sitting fees of ₹1,00,000/- per meeting of the Board and 50,000/- for Audit Committee and Nomination and Remuneration Committee meetings and 35,000/- for Stakeholders Relationship Committee and Corporate Social Responsibility Committee meetings during the year to the Independent Directors / Non- Executive Directors. The commission is paid subject to a limit not exceeding 1% p.a. of the profits of the Company as approved by shareholders (computed in accordance with section 197 of the Companies Act, 2013). The Group Chairman provides leadership to Board and guidance and mentorship to the leadership team for implementing the strategy plan and business objectives. The Group Chairman is paid a fixed commission. The commission to the Independent Directors / Non-Executive Directors is distributed broadly on the basis of their attendance, contribution at the Board, the Committee meetings, Chairmanship of Committees and participation in IC meetings. component), based on recommendation of the NRC, approval of the Board and the shareholders. The commission payable is based on the overall performance of the Company, performance of the business / function as well as qualitative factors. The commission is calculated with reference to net profits of the Company in the financial year subject to overall ceilings stipulated under Section 197 of the Companies Act, 2013. ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 92 91 ཅ The Company pays remuneration to Executive Directors by way of salary, perquisites & retirement benefits (fixed components) & commission (variable The remuneration of the Board members is based on the Company's size & global presence, its economic & financial position, industrial trends, compensation paid by the peer companies, etc. Compensation reflects each Board member's responsibility and performance. The level of compensation to Executive Directors is designed to be competitive in the market for highly qualified executives. v) Remuneration Policy: These certificates have been placed on the website of the Company http://investors. larsentoubro.com/corporate governance.aspx in the SEBI LODR Regulations and are independent of the management. The Board has taken on record the declaration and confirmation submitted by the Independent Directors and after assessing the veracity of the same, the Board is of the opinion that the Independent Directors fulfill the conditions specified All the Independent Directors give a certificate confirming that they meet the "independence criteria" as mentioned in Section 149(6) of the Companies Act, 2013 and SEBI LODR Regulations. The Independent Directors comply with the definition of Independent Directors as given under Section 149(6) of the Companies Act, 2013 and all the applicable regulations of the SEBI LODR Regulations. While appointing/re-appointing any Independent Directors / Non-Executive Directors on the Board, the NRC considers the criteria as laid down in the Companies Act, 2013 and the SEBI LODR Regulations. criteria, the NRC considers Board evaluation results, attendance & participation in and contribution to the activities of the Board by the Director. While evaluating the suitability of a Director for re-appointment, besides the above While screening, selecting and recommending to the Board new members, the Committee ensures that the Board is objective, there is absence of conflict of interest, ensures availability of diverse perspectives, business experience, legal, financial & other expertise, integrity, leadership and managerial qualities, practical wisdom, ability to read & understand financial statements, commitment to ethical standards and values of the Company and there are healthy debates & sound decisions. iv) Board Membership Criteria: Meetings held during the year are expressed as number of meetings eligible to attend. Mathew T. 7 7 Member Mr. Thomas 7 7 Member 7 225 No. of No. of meetings Meetings 0.078 ii) Composition: As on 31st March 2019, the CSR Committee comprised of 1 Independent Director and 2 Executive Directors. iii) Meetings: During the year ended 31st March 2019, 5 meetings of the CSR Committee were held on 21st May 2018, 4th July 2018, 8th August 2018, 1st November 2018 and 14th March 2019. The attendance of Members at the Meetings was as follows- Name Status No. of No. of meetings Meetings during Attended the year Mr. Vikram Singh Mehta Mr. R. Shankar Raman Mr. D. K. Sen Chairman Member Responsibility Policy of the Company from time to time. 5 5 5 Member 5 5 iv) CSR Activities & Impact Assessment: The Company, through its CSR Committee, is committed to improve the social infrastructure of the country. The Company is leveraging its countrywide presence to reduce disparities through interventions in Water and sanitation, Healthcare, Education and Skill building. Close interactions with the local community members have enabled the Company to identify and address their most pressing needs and the social interventions for community development have been specifically aligned. Under flagship program of "Integrated Community Development" (ICD), the Company has launched programs towards holistic development in the following areas based on need assessment: • Water & Sanitation: For the availability of safe drinking water and 5 (c) monitor the Corporate Social (b) recommend the amount of expenditure to be incurred on the activities referred to in clause (a); and Board, a Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by the Company; Queries: Dividend 44 10057 9601 500 Related Transmission / 62 3007 2905 164 Transfer Demat Remat 7 1969 1844 132 * Investor complaints / queries shown outstanding as on 31st March 2019 have been subsequently resolved to the complete satisfaction of the investors. The Company repeatedly sends reminders to shareholders regarding unclaimed shares and dividends. This results in an increase in the number of queries received. The Board has delegated the powers to approve transfer of shares to a Share Transfer Committee of Executives comprising of four Senior Executives. This Committee held 40 meetings during the year and approved the transfer of shares lodged with the Company. Pursuant to SEBI press release dated 3rd December 2018, requests for effecting physical transfer of securities subsequent to 1st April 2019, shall not be approved by the Share Transfer Committee. 95 96 ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 4) Corporate Social Responsibility Committee: i) Terms of reference: The terms of reference of the CSR Committee are as follows: (a) formulate and recommend to the proper sanitation facilities Education: To improve access to education (increased enrollment in pre-school, children attending 5 Member 5 4 5 4 G. OTHER INFORMATION a) Directors' Familiarization Program: All our directors are aware and are also updated as and when required, of their role, responsibilities & liabilities. The Company holds Board meetings at its registered office and also if necessary, in locations, where it operates. Site / factory visits are organized at various locations for the Directors. The internal newsletters of the Company, the press releases, etc. are circulated to all the Directors so that they are updated about the operations of the Company. Presentations are made regularly to the Board / NRC / Audit Committee (AC) (minutes of AC, NRC, SRC and CSR Committee are circulated to the Board), where Directors get an opportunity to interact with senior managers. Presentations, inter alia, cover business strategies, management structure, HR policy, management development and succession planning, quarterly and annual results, budgets, treasury policy, review of Internal Audit, risk management framework, operations of subsidiaries and associates, etc. Independent Directors have the freedom to interact with the Company's management. Interactions happen during Board / Committee meetings, when senior company personnel are asked to make presentations about performance of their Independent Company (IC) / Business Unit, to the Board. Some of the Independent Directors are members of the IC Board. They share the learnings from these meetings with the remaining Non- Executive Directors / Independent Directors 97 98 ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 formally and informally. Such interactions also happen when these Directors meet senior management in IC meetings and informal gatherings. As part of the appointment letter issued to Independent Directors, the Company has stated that it will facilitate attending seminars/ programs/conferences designed to train directors to enhance their role as an Independent Director. This information is also available on the website of the Company http://investors.larsentoubro. com/Listing-Compliance.aspx. b) Risk Management Framework: Please refer to page 68 of the Board Report. c) Vigil Mechanism / Whistle Blower Policy: The Company has a Whistle Blower Policy in place since April 2004. The said policy was modified in line with the requirements of the Vigil Mechanism under the Companies Act, 2013. The Company has a Whistle Blower Investigation Committee (WBIC) to manage complaints from "Identified" Whistle Blowers. In addition, WBIC considers "Anonymous" complaints which in their judgement are serious in nature and require investigation. The WBIC has four members viz. Chief Financial Officer, Company Secretary, Head-Corporate HR and Chief Internal Auditor. The WBIC is responsible for end to end management of the investigations from receipt of complaints to bringing them to a logical conclusion, keeping in mind the interest of the Company. Employees are encouraged to report any wrong-doings having an adverse effect on the Company's financials / image and instances of leak of unpublished price sensitive information. An employee can report any wrong-doing in oral or written form. Whistle-blowers are assured by the management of full protection from any kind of harassment, retaliation, victimization or unfair treatment. Complaints under the Whistle Blower Policy are received by the Corporate Audit Services of the Company. The Chief Internal Auditor reviews the same and convenes a meeting of the WBIC for discussions. The WBIC, after screening the complaint, decides on the further course of action which will include requesting the complainant to provide further details, internal investigation by the Internal Audit department, investigation by external agencies, wherever necessary, opportunity to the defendant to present his/her case, etc. Based on the findings of the investigation, the WBIC decides the action to be taken and recommends the same to the Executive Committee for implementation. The WBIC meets formally and reviews the complaints and their progress. In addition, discussions also take place over video- conferencing, telephone and emails amongst the WBIC members. The Audit Committee is periodically briefed about the various cases received, the status of the investigation, findings and action taken, if any. During the year, the Company has investigated the complaints received under the Whistle Blower Policy and suitable action has been taken against employees, wherever necessary. Also refer to page 71 of the Board Report. d) Statutory Auditors: In the case of appointment of new auditors, a Committee, comprising of the Chairman of the Audit Committee, the CFO and the Company Secretary, evaluates various audit firms based on approved criteria as given herein below. The Audit firms are required to make a presentation to this Committee. The Committee considers factors such as compliance with the legal provisions, number/nature/size and variation in client base, skill sets available in the firm both at partner level and staff level, international experience, systems and processes followed by the firm, training and development by the firm to its partners and staff, etc. during the process of evaluation. Based on merit and the factors mentioned above, the Committee finalizes the firm to be appointed and recommends the same to the Audit Committee. The Audit Committee reviews the same before recommending to the Board and shareholders for approval. 5 Shareholder Chairman year neighborhood schools) and improving quality of learning (better school infrastructure, better teaching-learning process) Health: Improvement in access to quality health care (expanding infrastructure of health centres, increased number of people availing quality health care) Skill development: Enhancing employability of youth (enhancing training capacity, improved infrastructure of skill development centres). Thirty Village Development Committees (VDCS) have been formed across locations, with participation from women. A quarterly review of the ICD projects is done with the village Panchayats and local authorities. Access to cleaner water, hygienic surroundings, better health, education and new skills, has altered the lives of more than 6.5 lakh individuals through our CSR Programs in 2018-19. All CSR projects have defined goals and milestones which are tracked as per the periodicity defined for the project. The progress is compared with the baseline data that is gathered before the commencement LARSEN & TOUBRO of the project. This is carried out through an onsite evaluation as well as the reports generated from the project. The indirect impacts that accrue are also factored and documented in the monthly reporting process. These are subsequently vetted / measured during the external Social Audit or Impact Assessment. The social audit report is discussed during the Committee meetings. The detailed disclosures of CSR spending during the year has been given in Annexure 'C' forming part of this Board Report. Please refer to pages 115 to 120 of this Annual Report. 5) Risk Management Committee: i) Terms of reference: The terms of reference of the Apex Risk Management Committee are as follows: • Review of the existing Risk Management Policy, framework and processes, Risk Management Structure and Risk Mitigation Systems. Broadly, the key risks will cover strategic risks of the group at the domestic and international level, including Sectoral developments, risk related to market, competition, political and reputational issues etc. Review of the operational risks including client quality, manpower availability, logistics and other aspects which impact the Company and the group. Review of the cyber security risks. ii) Composition: As on 31st March 2019, the Apex Risk Management Committee comprised of 2 Executive Directors and 1 Non-Executive Director. iii) Meetings: During the year ended 31st March 2019, 5 meetings of the Apex Risk Management Committee were held on 6th April 2018, 25th May 2018, 5th July 2018, 21st November 2018 and 15th January 2019. The attendance of Members at the Meetings was as follows- Name Status No. of No. of meetings Meetings during the Attended Mr. S. N. Subrahmanyan Mr. R. Shankar Raman Mr. Subramanian Sarma Member Mr. M. Damodaran 16 135 Mr. Akhilesh Gupta 0.088 NIL 0.174 NIL 0.262 Mr. Narayanan Kumar 1,500 Mrs. Sunita Sharma # 0.020 NIL 0.013 NIL 0.033 150 94,650 Mrs. Sunita Sharma * Mr. Thomas Mathew 0.088 0.034 0.308 NIL 0.430 Mr. Ajay Shankar 150 | T. Ms. Naina Lal Kidwai 150 Mr. Ajay Shankar 0.088 150 Mr. Subramanian Sarma NIL 0.476 0.354 0.028 0.383 NIL 0.489 Mr. Vikram Singh Mehta 1,327 Mr. Vikram Singh 0.078 0.017 0.349 NIL 0.444 Mr. Adil Zainulbhai 150 Mehta Mr. Akhilesh Gupta 7,680 Mr. Sushobhan 0.008 0.004 0.047# NIL 0.059 Mr. Sanjeev Aga 4,500 Sarker $ Mr. Thomas Mathew T. Mr. Adil Zainulbhai 0.088 0.034 0.014 0.280 NIL 0.382 Mr. Subramanian As on 31st March 2019 the Stakeholders' Relationship Committee comprised of 1 Non-Executive Director, 1 Independent Director and 1 Executive Director. iii) Meetings: During the year ended 31st March 2019, 4 meetings of the Stakeholders' Relationship Committee were held on 28th May 2018, 25th July 2018, 31st October 2018 and 25th January 2019. The attendance of Members at the Meetings was as follows- Name Status during Attended the year Mrs. Sunita Sharma Mr. Ajay Shankar Chairperson Member 4 0 4 4 Mr. Shailendra Roy Member 4 4 Meetings held during the year are expressed as number of meetings eligible to attend. The meetings were chaired by Mr. Ajay Shankar in the absence of Ms. Sunita Sharma. Mr. N. Hariharan, Company Secretary is the Compliance Officer. iv) Number of Requests / Complaints: During the year, the Company has resolved investor grievances expeditiously except for the cases constrained by disputes or legal impediments. During the year, the Company/its Registrar's received the following complaints from SEBI / Stock Exchanges and queries from shareholders, which were resolved within the time frames laid down by SEBI. Particulars Opening Received Resolved Pending* Balance Complaints: SEBI / Stock Exchange 3 ii) Composition: 122 Review of the various measures and initiatives taken by the company for reducing the quantum of unclaimed dividends and ensuring timely receipt of dividend warrants/annual reports/ statutory notices by the shareholders of the company. Resolving the grievances of the security holders of the company including complaints related to transfer/ transmission of shares, non-receipt of annual report, non-receipt of declared dividends, issue of new/duplicate certificates, general meetings etc. Review of measures taken for effective exercise of voting rights by shareholders. NIL NIL NML Mr. Arvind Gupta 100 NIL NIL NIL Mr. Hemant Bhargava * 100 Sarma Mr. Hemant Bhargava 90 Ms. Naina Lal Kidwai 0.088 NIL 0.174 NIL 0.262 Mr. Sanjeev Aga 0.078 0.038 0.260 NIL 0.376 *held jointly with the Institution they represent. LARSEN & TOUBRO 3) Stakeholders' Relationship Committee: i) Terms of reference: The terms of reference of the Stakeholders' Relationship Committee are as follows: Review of adherence to the service standards adopted by the company in respect of various services being rendered by the Registrar & Share Transfer Agent. crore Sitting Commission Others Total ABOVE 40000 39000 38000 37000 36000 35000 BSE SENSEX 34000 32000 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 18 18 18 18 18 18 18 18 18 19 19 19 Daily Closing Price BSE SENSEX 1100 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 33000 600 700 800 L&T-BSE (*) Stock Performance 2000 L&T BSE (*) 1900 1800 1700 1600 1500 1400 1300 1200 1100 1000 900 18 18 18 18 18 18 18 18 18 19 19 19 Daily Closing Price January 1449.00 1268.00 1313.40 36701.03 35375.51 36256.69 February 1334.50 1202.30 1294.50 37172.18 35287.16 35867.44 March 1414.95 1276.35 1384.05 38748.54 35926.94 38672.91 i) Registrar and Share Transfer Agents (RTA): Karvy Fintech Pvt. Ltd. (previously known as Karvy Computershare Private Limited) % of total capital issued 131,63,58,855 93.84 6,49,66,403 2,14,04,127 140,27,29,385 4.63 1.53 No. of shares 100.00 The outstanding GDRs are backed up by underlying equity shares which are part of the existing paid-up capital. The Company has the following Foreign Currency Convertible Bonds outstanding as on 31st March 2019: Upto 500 501-1000 1001-2000 2001 - 3000 3001 - 4000 4001 - 5000 5001 - 10000 10001 & Shareholders Shareholding Number % Number % 9,73,313 90.84 8,75,23,827 6.24 47,445 4.43 3,48,50,397 2.48 27,037 2.52 3,75,10,498 2.67 9,235 0.86 2,24,84,508 1.60 3,840 0.36 1,33,18,394 0.95 2,558 0.24 1,14,86,494 0.82 4,210 0.39 2,92,59,587 2.09 3,851 0.36 116,62,95,680 83.14 n) Outstanding GDRs / ADRs / Warrants or any Convertible Instruments, conversion date and likely impact on equity: Held in dematerialized form in NSDL Held in dematerialized form in CDSL Physical Total The number of shares held in dematerialized and physical mode as on 31st March 2019 is as under: No. of Shares Unit: Larsen & Toubro Limited Karvy Selenium Tower B, Plot number 31 & 32 Financial District Gachibowli, Nanakramguda, Hyderabad, Telangana - 500 032. Share Transfer System: Pursuant to SEBI press releases dated 3rd December 2018 and 27th March, 2019, except in case of transmission or transposition of securities, requests for effecting transfer of securities subsequent to 1st April 2019, shall not be processed by the Company unless the securities are held in the dematerialized form with a depository. The share related information is available online. 103 104 ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 Physical shares received for dematerialization are processed and completed within a period of 21 days from the date of receipt. As required under Regulation 40 of the SEBI LODR Regulations, a certificate on half yearly basis confirming due compliance of share transfer formalities by the Company from Practicing Company Secretary has been submitted to Stock Exchanges within stipulated time. k) Distribution of Shareholding as on 31st March 2019: j) 1346.80 1243.50 1302.60 37644.59 35106.57 37606.58 August 1373.90 1226.05 1369.10 38989.65 37128.99 38645.07 September 1389.00 1250.00 1266.65 38934.35 35985.63 36227.14 October 1303.00 1183.40 1298.35 36616.64 33291.58 34442.05 November 1435.00 1321.95 1429.65 36389.22 34303.38 36194.30 December 1459.10 1344.50 1438.50 36554.99 34426.29| 36068.33 2019 9500 1000 April May BSE Limited (BSE) Scrip Code 500510 June 1405.00 1290.20 1400.90 10759.00 10111.30 10739.35 1424.95 1311.00 1370.40 10929.20 10417.80 10736.15 1396.00 1206.00 1275.10 10893.25 10550.90 10714.30 Month Close National Stock Exchange of India Scrip Code LT : INE018A01030 : LART.BO ISIN Reuters RIC Luxembourg Exchange Stock Code London Exchange Stock Code Limited (NSE) NIFTY Low Month High Low Close 2018 High 5th August 2019 During third week of October 2019 * During third week of January 2020 * The dates of Book Closure are from Friday, 26th July 2019 to Thursday, 1st August 2019 (both days inclusive) to determine the members entitled to the dividend for financial year 2018-2019. d) Listing of equity shares / shares underlying GDRs on Stock Exchanges: The shares of the Company are listed on BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE). GDRs are listed on Luxembourg Stock Exchange and admitted for trading on London Stock Exchange. e) Listing Fees to Stock Exchanges: f) The Company has paid the Listing Fees for the year 2019-2020 to BSE and NSE. Fees to London Stock Exchange and Luxembourg Stock Exchange will be paid on receipt of the bill. Custodial Fees to Depositories: The Company has paid custodial fees for the year 2019-2020 to Central Depository Services (India) Limited (CDSL) and fees to National Securities Depository Limited (NSDL) will be paid on receipt of the invoice. LARSEN & TOUBRO g) Stock Code / Symbol: The Company's equity shares / GDRs are listed on the following Stock Exchanges and admitted for trading in London Stock Exchange: Month L&T NSE Price (*) : 005428157 : LTOD The Company's shares constitute a part of BSE 30 Index of the BSE Limited as well as NIFTY Index of the National Stock Exchange of India Limited. h) Stock market data for the year 2018-19: 12500 1800 12000 1700 L&T-NSE (*) 1600 11500 1500 11000 1400 NSE NIFTY 1300 10500 1200 10000 1900 (i) 13000 2000 Month 2018 L&T BSE Price (*) BSE SENSEX High Low Month High Low Month Close Close April 1405.00 1291.80 1400.60 35213.30 32972.56 35160.36 1424.50 1311.00 1367.60 35993.53 34302.89 35322.38 June 1395.95 1205.60 1271.30 35877.41 34784.68 35423.48 July July 1346.90 1242.90 1302.30 11366.00 10604.65 11356.50 August 1374.00 1226.00 1369.55 11760.20 11234.95 11680.50 September 1390.00 1250.15 1272.10 11751.80 10850.30 10930.45 October 1304.00 1182.50 1297.50 11035.65 10004.55 10386.60 November 1438.15 1321.60 1432.50 10922.45 10341.90 10876.75 December 1459.70 1343.65 1437.55 10985.15 10333.85 10862.55 2019 January February March 1445.00 1268.20 1314.30 10987.45 10583.65 10830.95 1334.55 1201.10 1292.95 11118.10 10585.65 10792.50 1415.00 1277.05 1385.30 11630.35 10817.00 11623.90 Stock Performance L&T NSE (*) - NSE NIFTY 1st August 2019 (ii) USD 200 million NIL 105 106 ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information which is available on Company's Website http://investors. larsentoubro.com/Listing-Compliance.aspx. v) Stakeholder Engagement: The Company recognizes that its stakeholders form a vast and heterogeneous community. Our customers, shareholders, employees, suppliers, community, etc. have been guideposts of our decision-making process. The Company engages with its identified stakeholders on an ongoing basis through business level engagements and structured stakeholder engagement programs. The Company maintains its focus on delivering value to all its stakeholders, especially the disadvantaged communities. The Company has appointed Mr. Arnob Mondal, Vice President (Corporate Accounts & Investor Relations), as Chief Investor Relations Officer. The Company also formulated Code of The Company has a dedicated Corporate Brand Management & Communications department which facilitates an on-going dialogue between the Company and its stakeholders. The communication channels include: For internal stakeholders - Employee satisfaction surveys, employee engagement surveys for improvement in employee engagement processes, circulars and messages from management, corporate social initiatives, welfare initiatives for employees and their families, online news bulletins for conveying topical developments, large bouquet of print and online in-house magazines, helpdesk facility, etc. Each of the businesses have their internal mechanisms to address the grievances of its stakeholders. In addition, at the corporate level, there are committees which can be approached if the stakeholders are not satisfied with the functioning of such internal mechanisms. As part of the vigil mechanism, the Whistle Blower Policy provides access for various stakeholders to the Chairperson of the Audit Committee. The Whistle Blower Policy for Vendors & Channel Partners is displayed on the website of the Company http://investors.larsentoubro.com/ Corporate Governance.aspx. w) Awareness Sessions / Workshops on Governance practices: Employees across the Company as well as the group are being sensitized about the various policies and governance practices of the Company. The Company had designed in-house training workshops on Corporate Governance with the help of an external faculty covering basics of Corporate Governance as well as internal policies and compliances under Code of Conduct, Whistle Blower Policy, Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, SEBI PIT Regulations, etc. • For external stakeholders - Stakeholder engagement sessions, client satisfaction surveys, shareholder satisfaction assessment, dealer and stockists meet, analyst / investors meet, periodic feedback mechanism, general meeting for shareholders, factory visits for shareholders, online service and dedicated e-mail service for grievances, corporate website and access to business media to respond to queries, etc. Mr. N. Hariharan, Company Secretary has been designated as the Compliance Officer. Pursuant to the SEBI (Prohibition of Insider Trading) Regulations, 2015 ('SEBI PIT Regulations'), the Company had suitably modified its Securities Dealing Code ('Code') for prevention of insider trading with effect from May 15, 2015. The objective of the Code is to prevent purchase and / or sale of shares of the Company by an Insider on the basis of unpublished price sensitive information. Under this Code, Designated Persons (Directors, Advisors, Officers and other concerned employees / persons) are prevented from dealing in the Company's shares during the closure of Trading Window. To deal in securities beyond specified limit, permission of Compliance Officer is also required. Directors and designated employees who buy and sell shares of the Company are prohibited from executing contra- trades during the next six months following the prior transactions. The Company has a policy for taking action against employees who violate the SEBI PIT Regulations / Code. Pursuant to the enactment of the SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2018, the Company has suitably modified the provisions of the Code and formulated requisite policies which are effective from 1st April 2019. u) Securities Dealing Code: Unit: Larsen & Toubro Limited Karvy Selenium Tower B, Plot 31 & 32, Gachibowli, Financial District, Nanakramguda, Hyderabad, Telengana - 500 032 Tel: (040) 6716 2222 Toll free number: 1-800-3454-001 Fax: (040) 2342 0814 Email: einward.ris@karvy.com Website: www.karvyfintech.com 2. Karvy Fintech Pvt. Ltd. Unit: Larsen & Toubro Limited 24-B, Raja Bahadur Mansion, Ground Floor, Ambalal Doshi Marg, Behind BSE Limited, Fort, Mumbai - 400 023. Tel: (022) 6623 5454/5412/5427 t) Investor Grievances: The Company has designated an exclusive e-mail id viz. IGRC@LARSENTOUBRO.COM to enable investors to register their complaints, if any. The Company has created a batch of trainers across businesses who in turn conduct training / awareness sessions within their business regularly during the year. 1. Karvy Fintech Pvt. Ltd. x) ISO 9001:2015 Certification: y) Secretarial Audit as per SEBI requirements: As stipulated by SEBI, a Qualified Practicing Company Secretary carries out Reconciliation of Share Capital Audit to reconcile the total admitted capital with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and the total issued and listed capital. This audit is carried out every quarter and the report thereon is submitted to the Stock Exchanges. The Audit confirms that the total Listed and Paid-up capital is in agreement with the aggregate of the total number of shares in dematerialized form and in physical form. The Company has a multi-tier governance system, where major business divisions operate 107 108 ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 as Independent Companies (ICs). These ICS are not legal entities, however, have their own CEO's, Functional Heads and Independent Boards, including external independent members from the respective business sectors, Executive Directors of the Company and Senior Executives from the IC's. All IC's have independent directors of the Company as their Board Members. The ICs have separate internal teams to oversee their legal and compliance functions. All Subsidiary Companies associated with the respective ICs are reviewed by their respective IC Boards. Responsibility of the Company's corporate team in the areas of statutory compliance (including corporate laws), Risk Management, Internal Controls and Internal Audit, covers all unlisted subsidiaries. The three listed entities have their own teams to carry out these functions. The subsidiary companies also function independently and have separate Boards which consists of representatives of the Company who are senior executives of the Company, representatives of Joint Venture partners, representative of the Company's Board as well as Independent Directors as required by law. As per law, these companies, wherever required, also have Audit Committee, Nomination & Remuneration Committee and CSR Committee. Major subsidiary companies have some Executive Directors and Independent Directors of the Company on their Board. The Key Managerial Personnel of subsidiary companies like Chief Executives, Chief Financial Officers and Company Secretaries are mostly employees of the Company or are nominated by the Company as per the terms of the Joint Venture Agreement. The subsidiary companies' performance is also reviewed by the Company's Board periodically (included in quarterly results presented to the Company's L&T Board). F&A heads of some of the subsidiary companies are functionally reporting to senior executives in the Company. A voluntary Secretarial Audit is conducted for all subsidiary companies, including foreign companies and companies which are not covered under the purview of Companies Act, 2013. Thus, there is a complete audit of the compliance of applicable statutory provisions and adherence to good corporate practices. The Company's Code of Conduct (Code) is required to be adhered by all group companies covering employees, directors, suppliers, contractors, etc. In addition to this, the subsidiaries set up their own vigil mechanism, if they meet the thresholds given in the Companies Act. The Audit Committee / Board of these companies monitor this mechanism. The Vigil Mechanism Framework to report breach of code is a structured process, which encourages and facilitates all covered, to report without fear, wrongdoings or any unethical or improper practice which may adversely impact the image, credibility and/or the financials of the company, through an appropriate forum. The Secretarial Department of the Company has qualified Company Secretaries (CS) with vast experience in the field of compliance and law. It consists of fulltime professionals dedicated to performing corporate secretarial and subsidiary governance duties. Qualified CS in secretarial department monitor the compliance related to subsidiaries under Companies Act / Rules. The Company's Secretarial Department develops a broad Governance policy for the Company and its group of subsidiaries. The Company's Secretarial Department is involved in all major corporate actions of subsidiaries like IPO's, raising of capital, restructuring, major financial assistance to subsidiaries etc. Appropriate disclosures related to subsidiaries are made in financial statements / directors' report of the Company as well as its subsidiaries as per Companies Act 2013 / applicable SEBI Regulations and applicable Accounting Standards. All companies are subject to Statutory Audit and applicable Secretarial Audit. Thus, the overall functioning of these Subsidiary companies is monitored by the Group directly or through their respective IC's. These listed entities publish their independent Auditors' certificate on Corporate Governance, secretarial audit report of Practising Company Secretary and CEO/CFO's certificate for internal controls for financial reporting. Each of these listed entities has one Executive Director and one Independent Director of the Company on its Board. Any financial assistance to the above companies or purchase/sale by the Company of their shares, is dealt with by the Company's Board. The Company has three listed entities within the group. Each of these entities have their own Board and Board Committees in compliance with the Companies Act 2013 & SEBI LODR Regulations. The oversight of their subsidiaries (34 subsidiaries) is as per Companies Act 2013 & SEBI LODR Regulations. The Board Report and the annexures of these listed companies contains various disclosures dealing with subsidiary companies. The secretarial department of the Company at Mumbai is manned by competent and experienced professionals. The Company has a system to review and audit its secretarial LARSEN & TOUBRO and other statutory compliances by competent professionals, who are employees of the Company. Appropriate actions are taken to continuously improve the quality of compliance. The Company also has adequate software and systems to monitor compliance. z) Secretarial Audit as per Companies Act, 2013: Pursuant to the provisions of Section 204(1) of the Companies Act, 2013, M/s. S. N. Ananthasubramanian & Co., Company Secretaries, conducts the secretarial audit of the compliance of applicable statutory provisions and the adherence of good corporate practices by the Company. Pursuant to the SEBI circular no. CIR/CFD/ CMD1/27/2019 dated 8th February 2019, the Company has obtained an annual secretarial compliance report from M/s. S. N. Ananthasubramanian & Co., Company Secretaries and shall submit the same to the Stock Exchanges within the prescribed timelines. aa) Statutory Compliance System: The Company complies with applicable laws, rules and regulations impacting Company's business. These comprise of Central Acts / Rules and those of state governments where the Company generally carries on business. The applicable laws are reviewed by the Corporate Legal and Legal departments of each Independent Company (IC) as well as an external consultant on a periodic basis and updated whenever required. Each IC / Business head certifies compliance of all applicable laws by the IC on a quarterly basis. Based on these confirmations, the Company Secretary gives a compliance certificate to the Board of Directors. The Company has a process of verifying the compliances through a random review of the process/system/documentation of the location of the IC/Corporate function / Group Company. The review is placed before the Board of the respective IC / group company. Existing internal controls are also reviewed. The audit process includes planning the audit, discussion with auditee before audit commencement to explain the scope and purpose of the audit, verifying the compliances based on the supporting documentation, post audit meeting for explaining the observations, etc. bb) Group Governance Policy: Vide its circular dated 10th May 2018, SEBI has introduced the concept of Group Governance Unit. The circular expects listed companies to monitor their governance through a Governance Committee and establishment of a strong and effective group governance policy. "Corporate Governance" in the Company and its subsidiaries broadly includes strategic supervision by the Board and its Committees, compliance of Code of Conduct, Statutory Compliance including compliance of Companies Act / applicable SEBI Regulations, avoiding conflict of interest, Risk Management, Internal Controls and Audit. The Company's Secretarial Department which provides secretarial services and investor services for the Company and its Subsidiaries and Associates is ISO 9001:2015 certified. Shareholder correspondence may be directed to the Company's Registrar and Share Transfer Agent, whose address is given below: Fax No. (022) 6752 5893 Tel. No. (022) 6752 5656, Bodies Corporate Directors & Relatives 15,76,870 0.11 17,21,28,421 12.27 17,21,28,421 12.28 L&T Employees Welfare Foundation General Public TOTAL 32,33,26,241 23.05 31,52,55,195 22.49 140,27,29,385 100.00 140,13,69,456 100.00 m) Dematerialization of shares & Liquidity: 2,96,43,045 2.12 20,23,45,408 14.44 8,99,08,301 6.42 14,21,965 0.10 The Company's Shares are required to be compulsorily traded in the Stock Exchanges in dematerialized form. (iv) Underlying Equity Shares/GDR's issued pursuant to conversion as per (ii) above NIL (v) Underlying Equity Shares / GDR's that 95,20,455 may be issued pursuant to conversion shares notices in respect of (iii) above These Convertible Bonds are listed on the Singapore Exchange Securities Trading Limited. o) Listing of Debt Securities: (iii) Principal Value of Bonds outstanding as at 31st March 2019 2,28,26,592 1.63 22,89,29,940 16.32 9,01,82,021 6.43 Mutual Funds Shares underlying GDRs USD 200 million TOTAL 0.675% USD 200 million Foreign Currency Convertible Bonds due 2019 10,71,489 100.00 140,27,29,385 100.00 I) Categories of Shareholders is as under: 31.03.2019 31.03.2018 Category No. of Shares % Financial Institutions Foreign Institutional 30,15,15,029 21.49 26,22,44,271 18.70 No. of Shares 33,25,25,270 23.73 25,81,41,851 18.42 % Investors The redeemable Non-Convertible debentures issued by the Company are listed on the Wholesale Debt Market (WDM) of National Stock Exchange of India Limited (NSE) or BSE Limited (BSE). p) Debenture Trustees (for privately placed debentures): IDBI Trusteeship Services Limited Ground Floor, Asian Building 'CRISIL A1+' ICRA Non-Convertible Limited Debentures '[ICRA] AAA (stable)' Programme Commercial Paper '[ICRA] A1+' r) Plant Locations: The L&T Group's facilities for design, engineering, manufacture, modular fabrication and production are based at multiple locations within India including Ahmednagar, Bengaluru, Chennai, Coimbatore, Faridabad, Hazira (Surat), Kattupalli (near Chennai), Kanchipuram, Mumbai, Navi Mumbai, Mysuru, Pithampur, Puducherry, Rajpura, Kansbahal (Rourkela), Talegaon and Vadodara. L&T's international manufacturing footprint covers the Gulf (Oman, Saudi Arabia, UAE), South East Asia (Malaysia and Indonesia) and the U.K. The L&T Group also has an extensive network of offices in India and around the globe. See pages 12 and 13 of this Annual Report. s) Address for correspondence: Larsen & Toubro Limited, L&T House, Ballard Estate, Mumbai 400 001. Commercial Paper Principal Value of the Bonds issued Principal Value of Bonds converted to GDRs since issue Debentures Capital-Indexed 17, R. Kamani Marg Ballard Estate Mumbai - 400 001 LARSEN & TOUBRO q) Credit Rating: Type of Instrument Rating Agency Rating CRISIL Non-Convertible 'CRISIL AAA/Stable' Limited Debentures Inflation-linked 'CRISIL AAA/Stable' Non-Convertible During the last week of July 2019 * May 10th May 2019 Annual General Meeting held on 23rd August 2018: To appoint Mr. A.M. Naik as a Non- Executive Director of the Company with effect from 1st October 2017 who has attained the age of 75 years. To approve the payment of remuneration to Mr. A.M. Naik, being in excess of fifty percent of the total annual remuneration payable to all the Non-Executive Directors. To approve raising of finances through issue of debentures upto 6000 crore. Annual General Meeting held on 22nd August 2017: To re-appoint Mr. Subodh Bhargava as an Independent Director of the Company for a five year term upto 29th March 2022. 99 100 ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 To approve raising of capital through QIP's by issue of shares / convertible debentures /securities upto an amount of USD 600 million or 4,000 crore. To approve raising of finances through issue of debentures upto 6000 crore. Annual General Meeting held on 26th August 2016: To approve raising of capital through QIP's by issue of shares / convertible debentures / securities upto an amount of USD 600 million or 3600 crore. To approve raising of finances through issue of debentures upto 6000 crore. Note: The resolution relating to raising of finances have been taken at each of the above AGMs since the validity of the resolution is one year. g) Approval of Members through Postal Ballot: The members approved a Special Resolution under Section 110 of the Companies Act, 2013 read with the Rule 22 of the Companies (Management and Administration) Rules, 2014 on 1st October 2018 permitting the Company to buyback six crore Equity Shares or higher of the Company from all the equity shareholders on a proportionate basis through the Tender Offer Mechanism for acquisition of shares through stock exchange under the Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018 at a maximum price of 1,500 per equity share aggregating to 9,000 crore. Mr. S. N. Ananthasubramanian, Practicing Company Secretary, was appointed as the Scrutinizer for conducting the Postal Ballot process. The details of the voting pattern are as under: Particulars No. of votes cast Physical E-Voting 35,59,085 91,21,15,907 91,56,74,992 Procedure for Postal Ballot: After receiving the approval of the Board of Directors, Notice of the Postal Ballot, text of the Resolution and Explanatory Statement, relevant documents, Postal Ballot Form and self-addressed postage envelopes are sent to the shareholders to enable them to consider and vote for and against the proposal within a period of 30 days from the date of dispatch. E-voting facility is made available to all the shareholders and instructions for the same are specified under instructions for voting in the Postal Ballot Notice. E-mails are sent to shareholders whose e-mail ids are available with the depositories and Company along with Postal Ballot Notice and Ballot Form. The calendar of events containing the activity chart is filed with the Registrar of Companies within 7 days of the passing of the Resolution by the Board of Directors. After the last day for receipt of ballots (physical / e-voting), the Scrutinizer, after due verification, submits the results to the Chairman. Thereafter, the Chairman declares the result of the Postal Ballot. The same is published in the Newspapers and displayed on the Company Website and Notice Board and submitted to Stock Exchanges. h) Disclosures: 1. During the year, there were no transactions of material nature with the Directors or the Management or relatives or the subsidiaries that had potential conflict with the interests of the Company. 2. Details of all related party transactions form a part of the accounts as required under IND AS 24 and the same are given in Note No. 51 forming part of the financial 3. Total % of total votes cast In favour 99.85 of the resolution 4. The following Special Resolutions were passed by the members during the past 3 Annual General Meetings: Against the St. Andrews Auditorium Birla Matushri Sabhagar First week of July 2019 The above process was followed by the Company while appointing M/s Deloitte Haskins & Sells LLP ('DHS') as the Auditors of the Company in 2015. Deloitte Haskins & Sells LLP, registered since 1983, is one of the member firms of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee ("DTTL”). Each DTTL member firm provides services in particular geographic areas and is subject to the laws and professional regulations of the particular country or countries in which it operates. Deloitte Haskins & Sells LLP tied up with CC Chokshi & Co in 1983 which was one of the largest Indian Independent audit and accounting firms. After that, it got merged with Fraser & Ross, PC Hansotia & Co and later with SB Billimoria (SBB) in 1999. In 2004, AF Ferguson & Co (one of India's oldest audit firm) merged into existing DHS firms. Deloitte is now a global network with circa 286,000 people with revenues over $43 billion. Deloitte India has more than 10,000 professionals operating out of 13 cities - Ahmedabad, Bangalore, Vadodara, Chennai, Coimbatore, Goa, Gurgaon, Hyderabad, Jamshedpur, Kochi, Kolkata, Mumbai and Pune providing professional services in the areas of Audit, Risk Advisory, Tax, Consulting, and Financial Advisory services to public and private clients spanning multiple industries. It draws its strength from its people, which include 2,500+ professionals in Audit, 2,350 + in Tax, 1,900+ in Consulting, and 1000+ in Financial Advisory. For the financial year 2018-19, the total fees paid by the Company and its subsidiaries, on a consolidated basis, to Deloitte Haskins & Sells LLP, Statutory Auditor and all entities in the network firm/network entity of which the statutory auditors are a part thereof for all the services provided by them is 10.95 crore. Also refer to page 72 of the Board Report. e) Code of Conduct: The Company has laid down a Code of Conduct for all Board members and senior management personnel. The Code of Conduct is available on the website of the Company www.larsentourbo.com. The declaration of the Chief Executive Officer & Managing Director is given below: To the Shareholders of Larsen & Toubro Limited Sub: Compliance with Code of Conduct I hereby declare that all the Board Members and Senior Management Personnel have affirmed compliance with the Code of Conduct as adopted by the Board of Directors and Senior Management Personnel. S. N. Subrahmanyan Chief Executive Officer & Managing Director Date: 10th May 2019 Place: Mumbai f) General Body Meetings: The last three Annual General Meetings of the Company were held as under: Financial Date Year 2017-2018 23rd August 2018 2016-2017 22nd August 2017 2015-2016 26th August 2016 Sabhagar Venue Time Birla Matushri 3.00 p.m. 3.00 p.m. 3.00 p.m. 86,531 12,87,614 13,74,145 LARSEN & TOUBRO resolution Filing with Stock Exchanges Annual Report and Annual General Meeting Management Discussion & Analysis Official news releases are sent to stock exchanges as well as displayed on the Company's website: www.larsentoubro.com. The Company's corporate website www.larsentoubro.com provides comprehensive information about its portfolio of businesses. Section on "Investors" serves to inform and service the Shareholders allowing them to access information at their convenience. The quarterly shareholding pattern of the Company is available on the website of the Company as well as the stock exchanges. The entire Annual Report and Accounts of the Company and subsidiaries are available in downloadable formats. The entire Annual Report and Accounts of the Company would also be made available on the websites of the Stock Exchanges. Information to Stock Exchanges is now being also filed online on NEAPS for NSE, BSE Online for BSE and RNS for London Stock Exchange. Annual Report is circulated to all the members and all others like auditors, equity analysts, etc. In order to enable a larger participation of shareholders for the Annual General Meeting, the Company has provided Webcast facility of its last three Annual General Meeting in co-ordination with NSDL/Karvy. The Company will continue to provide webcast facility in future. The Company suitably responds to the queries, if any, raised by the shareholders through the webinar. This forms a part of the Annual Report which is mailed to the shareholders of the Company. 101 102 ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 Presentations made to H. UNCLAIMED SHARES I. Website The schedule of analyst/ institutional investor meets and presentations made to them on a quarterly basis are informed to the Stock Exchanges and also displayed on the website. In accordance with the provisions of the Section 124(6) and Rule 6(3)(a) of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ('IEPF Rules'), the Company has transferred equity shares on which dividend has remained unclaimed for a period of seven consecutive years from the financial year 2010-11. The details are given in the Board Report. Please refer to page 66 of this Annual Report. All corporate benefits on such shares viz. bonus shares, etc. shall be transferred in accordance with the provisions of IEPF Rules read with Section 124(6) of the Companies Act, 2013. The eligible shareholders are requested to note the same and make an application to IEPF Authority in accordance with the procedure available on www.iepf.gov.in and submit such documents as prescribed under the IEPF Rules to claim these shares. GENERAL SHAREHOLDERS' INFORMATION a) Annual General Meeting: The Annual General Meeting of the Company has been convened on Thursday, 1st August 2019 at Birla Matushri Sabhagar, New Marine Lines, Mumbai - 400020 at 3.00 p.m. b) Financial calendar: 1. Annual Results of 2018-19 2. Mailing of Annual Reports 3. First Quarter Results 4. Annual General Meeting 5. Payment of Dividend 6. Second Quarter results 7. Third Quarter results * Tentative 0.15 The Company does not have any unclaimed shares lying with it from any public issue. However certain shares resulting out of the bonus shares issued by the Company are unclaimed by the shareholders. As required under Regulation 39(4) of the SEBI LODR Regulations, the Company has already sent reminders in the past to the shareholders to claim these shares. These share certificates are regularly released on requests received from the eligible shareholders after due verification. News Releases Institutional Investors and Analysts Advertisements relating to IEPF, E-Voting, AGM related compliances, etc. are published TOTAL in The Financial Express & Loksatta 100.00 statements. The Company has followed all relevant Accounting Standards notified by the Companies (Indian Accounting Standards) Rules, 2015 while preparing the Financial Statements. The Company makes presentations to Institutional Investors & Equity Analysts on the Company's performance on a quarterly basis. The same are provided to the Stock i) LARSEN & TOUBRO Exchanges and also available on our website http://investors.larsentoubro.com/ Announcements.aspx. 5. There were no instances of non-compliance, penalties, strictures imposed on the Company by the Stock Exchanges on any matter related to the capital markets, during the last three years. 6. The policies for determining material subsidiaries and related party transactions are available on our website http://investors. larsentoubro.com/Listing-Compliance.aspx. 36,45,616 91,34,03,521 91,70,49,137 8. 7. Details of risk management including foreign exchange risk, commodity price risk and hedging activities form a part of the Management Discussion & Analysis. Please refer to pages 296 to 298 of this Annual Report. Express, The Hindu Business Communications newspapers viz. The Financial Quarterly & Annual Results are published in prominent daily Financial Results Means of communication: and other Details in relation to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 form As required under the provisions of SEBI LODR Regulations, a certificate confirming that none of the Directors on the Board have been debarred or disqualified by the Board/Ministry of Corporate Affairs or any such statutory authority obtained from M/s S. N. Ananthasubramanian & Co., Company Secretaries is a part of the Corporate Governance report. 9. c) Book Closure: Line & Loksatta. The results are also posted on the Company's website: www.larsentoubro.com. a part of the Board Report. Please refer to page 70 of this Annual Report. 43.686 Mumbai), New Delhi, Orissa Haryana (Faridabad), Karnataka (Mysore), Maharashtra (Mahape, 920.408 Implementing agency 876.722 reporting agency Gujarat (Chondha, Hazira), Education (*In Lakh) period (In Lakh) (Kansbahal), Tamil Nadu (Chennai, Coimbatore) 933.680 distribution of solar lamps) school bags, shoes, woolen Providing educational aids to Education children-books, stationary, sports equipment, uniforms, clothes, raincoats etc. Gujarat (Hazira, Vadodara), Haryana (Faridabad), Himachal Pradesh (Kasauli), Maharashtra (Mahape, Pune, Talegaon), Rajasthan (Kota), Tamil Nadu (Chennai) 157.614 148.393 7.394 155.787 Direct 6 Awareness programmes Education Cumulative Amount spent: expenditure direct or through upto to the implementing 5 wise (Ahmednagar, Aurangabad, programe Khargone, Malwa), Maharashtra (health and hygiene, road Mumbai, Nagpur, Talegaon, Thane), New Delhi, Orissa (Berhampur, Kalahandi, Kalampur, Koksara, Raigada, Rourkela, Sundergarh), Puducherry, Punjab (Mohali), Rajasthan (Banswara, Ganganagar, Gangapur, Jhunjhunu, Nagaur, Ratangarh), Tamil Nadu (Chennai, Dindigul, Erode, Kalpakkam, Kanchipuram), Telangana (Hyderabad, Karimnagar, Khammam), Uttar Pradesh (Ghazipur, Hirapur), West Bengal (Kolkata, Purulia, Rampurhat) 1,300.970 1,209.948 60.291 1,270.239 Direct 117 118 (In Lakh) ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 4 Providing infrastructure support for education (drinking water and sanitation facilities, renovation of classrooms, water proofing of school buildings, providing furniture and light fittings, donation of computers, up gradation of libraries, playground development, which the Projects or Programes 1. Local Area or other Amount project is covered 2. Specify the state and district where projects or program was undertaken Direct Overhead outlay expenditure (In (budget) on projects Lakh) project or or programs S. No. CSR Project or activity identified Sector in Gujarat (Hazira), Maharashtra (Pune) (Vadodara), Maharashtra 34.867 1.737 dental, vaccinations) and health awareness Andhra Pradesh (Vizag), Gujarat (Hazira), Kerala (Kannur), New Delhi, Tamil Nadu (Dindigul) 48.505 46.121 2.298 48.419 Implementing agency 10 Blood donation camps Health Chhattisgarh (Raipur), Gujarat 10.622 9.560 0.476 (Ahmedabad, Vadodara), 10.036 Implementing agency Jharkhand (Jamshedpur), Karnataka (Bangalore), Kerala (Kochi), Madhya Pradesh (Bhopal), Maharashtra (Pune), New Delhi, Orissa (Bhubaneswar), Rajasthan (Jaipur), Tamil Nadu (Chennai, Coimbatore), Telangana (Hyderabad), Uttar Pradesh (Lucknow), West Bengal (Kolkata) 00090360 00007848 00022065 00017806 (Alirajpur, Bhopal, Kalisindh, (DIN) Health 36.794 Health Camps (general, eye, Raigada), Rajasthan (Jaipur) 36.604 Direct safety, career guidance, personality development) 7 Community Health Centres Health (running multi-specialty center Gujarat (Surat), Maharashtra (Mumbai, Thane, Ahmednagar) 682.520 622.933 31.040 653.973 Direct offering diagnostic services including family planning, gynecological, pediatric, immunization, chest & TB, ophthalmic consultation, dialysis services, HIV/ AIDS awareness, detection, treatment, counseling services at free nominal cost to the community) 8 Health Camps (general, eye, Health Andhra Pradesh (Vizag), 122.452 114.403 5.700 120.103 Direct dental, vaccinations) and Chhattisgarh (Raipur), Gujarat health awareness (Nagpur), Orissa (Bhubaneswar, 9 (Thrissur), Madhya Pradesh Chairman Andhra Pradesh (Hyderabad, Nagarnar, Vizag), Assam (Guwahati), Bihar (Bettiah, Muzaffarpur), Chandigarh, Goa (Mandovi), Gujarat (Ahmedabad, Botad, Dahod, Hazira, Mehsana, Sarodi, Surat, Unchamala, Vadodara), Himachal Pradesh (Lahaul), Jharkhand (Jamshedpur), Karnataka (Bangalore, S. N. Subrahmanyan Chief Executive Officer & Managing Director The activities undertaken by the Company as well as the implementation and monitoring mechanisms are in compliance with its CSR objectives and CSR policy. The Company has constituted a mechanism to monitor and report on the progress of the CSR programs; committees formed for implementation of the CSR policy; The Company has duly formulated a CSR Policy Framework which includes formulation of a CSR Theme, CSR budget and roles and responsibilities of the Committee as well as the various internal CSR Committee Responsibility Statement: The CSR Committee hereby affirms that: ΝΑ Reasons for not spending the amount during the financial year. As per table enclosed Manner in which the amount was spent in the financial year is detailed below: Nil C. b. Amount unspent, if any Education 7. ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 116 115 The Company was required to spend 121.47 Cr during the financial year 2018-19. As against this mandate, the Company spent 121.68 Cr towards various activities for the benefit of the community. This exceeds the required spend by 0.21 Cr. The CSR spend for FY 2018-19 is 2.003% of net profit. Details of CSR spent during the financial year: a. Total amount to be spent for the financial year The Company is required to spend an amount of 121.47 Cr. as CSR expenditure during the financial year 2018-19. Prescribed CSR expenditure (two percent of the amount as in item 3 above). The average net profit of the Company for the last three financial years is 6073.54 Cr. 5. 4. 3. Average net profit of the Company for the last three financial years. Mr. N. Hariharan as the Secretary of the Committee. Member 6. Gujarat (Hazira, Ahmedabad, Ranoli), Karnataka (Bangalore, Mysore), Maharashtra (Powai, Mumbai), New Delhi, Orissa (Raigada, Bhubaneswar), Rajasthan (Jaipur), Tamil Nadu (Coimbatore, Chennai), West Bengal (Kolkata) Education grades and providing Director Identification Number Vikram Singh Mehta Chairman CSR Committee DIN: 00041197 S. No. CSR Project or activity identified LARSEN & TOUBRO Sector in which the project is covered Projects or Programes 1. Local Area or other 2. Specify the state and district where projects or program was undertaken Amount Direct Overhead outlay expenditure (In (budget) on projects Lakh) project or or programs Cumulative Amount spent: expenditure direct or through upto to the implementing reporting agency period (In Lakh) programe wise (In Lakh) (*In Lakh) 251.182 234.830 11.701 246.531 Implementing agency 1 School support programme- Enhancing the quality of education and learning levels in government schools/ schools running for children from underprivileged backgrounds (teachers training, play way methods, support for English and Mathematics, capacity DIN: 02255382 building, promoting extra curricular activities) 2 Community based programmes- Study Centres/ balwadis/anganwadis run for developing pre school foundation, promoting healthy and hygienic environment for education, developing the learning levels of children at par with their mainstream Mr D. K. Sen 3. Member Mr. R. Shankar Raman (b) There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year which are fraudulent, illegal or in violation of the Company's code of conduct. (ii) These statements present a true and fair view of the Company's affairs and are in compliance with current accounting standards, applicable laws and regulations. We have reviewed the consolidated financial statements, read with the consolidated cash flow statement of Larsen & Toubro Limited for the year ended 31st March 2019 and that to the best of our knowledge and belief, we state that; (a) (i) These statements do not contain any materially untrue statement or omit any material fact or contain statements that may be misleading; {Issue in accordance with provisions of Regulation 17(8) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015} Sub: CEO / CFO Certificate Dear Sirs, To the Board of Directors of Larsen & Toubro Limited ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 114 113 13 Partner FCS: 4206 COP No. 1774 S. N. Ananthasubramanian Firm Registration No. P1991MH040400 For S. N. Ananthasubramanian & Co. Company Secretaries Thane, May 2, 2019 This Certificate has been issued at the request of the Company to make disclosure in its Corporate Governance Report of the Financial Year ended 31st March, 2019. 01922717 Karnataka (Mysore), Maharashtra (Powai, Mumbai, Mahape), Tamil Nadu (Chennai, Coimbatore) 300.600 283.600 14.131 297.731 Implementing agency nutritional supplements 3 Providing infrastructure support for education (drinking water and sanitation facilities, renovation of classrooms, water proofing of school buildings, providing furniture and light fittings, donation of computers, up gradation of libraries, playground development, distribution of solar lamps) Education (c) We accept responsibility for establishing and maintaining internal controls for financial reporting. We have evaluated the effectiveness of internal control systems of the Company and have disclosed to the Auditors and the Audit Committee, deficiencies, if any, in the design or operation of such internal controls of which we are aware and steps taken or proposed to be taken for rectifying these deficiencies. Mysore, Nandawadagi), Kerala (d) We have indicated to the Auditors and the Audit Committee: that there were no significant changes in internal controls over financial reporting during the year; and 2. Mr. Vikram Singh Mehta 1. The CSR Committee of the Board comprises of 2. Composition of the CSR Committee. The detailed CSR Policy Framework is given in the Governance section on the website of the Company. Please see the link http://investors.larsentoubro.com/ Listing-Compliance.aspx Governance, Technology and Innovation would be the Key enabling factors across all these verticals. support to ITI's, support to specially abled (infrastructure support & vocational training), Construction Skills Training Centres and providing employability skills to women and youth. Skill Development - includes but not limited to vocational training such as skill building, computer training, women empowerment, Health includes but not limited to community health centres, mobile medical vans, dialysis centres, general and specialized health camps and outreach programs, support to HIV / AIDS, Tuberculosis control programs. - Education includes but not limited to education infrastructure support to educational Institutions, educational programs & nurturing talent at various levels. - Water & Sanitation - includes but not limited to watershed development -making clean drinking water available, promoting rain water harvesting, soil and moisture conservation, enhancing ground water levels by facilitating community management of water resources for improving conditions related to sanitation, health, education and livelihoods of communities through an integrated approach. The Company will primarily focus on 'Building India's Social Infrastructure' as part of its CSR programme which will include, amongst others, the following areas, viz. The Company's CSR Policy framework details the mechanisms for undertaking various programmes in accordance with Section 135 of the Companies Act, 2013 (the Act) for the benefit of the community. The CSR projects of the Company are focused on communities that are disadvantaged, vulnerable and marginalized. We strive to contribute positively to improve their standard of living; through our interventions in water & sanitation, heath, education and skill development. A brief outline of the Company's CSR policy, including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs. 1. CSR ACTIVITIES FOR 2018-19 Annexure 'C' to the Board Report LARSEN & TOUBRO S. N. Subrahmanyan Chief Executive Officer & Managing Director R. Shankar Raman Chief Financial Officer & Whole-time Director Yours sincerely, Date: May 10, 2019 Place: Mumbai (ii) that there were no instances of significant fraud of which we have become aware. (ii) that there were no significant changes in accounting policies made during the year except as disclosed in note I(i) and note 65 to the consolidated financial statements; and (i) LARSEN & TOUBRO We conducted our examination and obtained the explanations in accordance with the Guidance Note on Reports or Certificates for Special Purposes issued by the Institute of Chartered Accountants of India ("ICAI") and the Standards on Auditing specified under Section 143(10) of the Companies Act, 2013 which include the concepts of test checks and materiality. This Guidance Note requires that we comply with the ethical requirements of the Code of Ethics issued by the ICAI. 22 For DELOITTE HASKINS & SELLS LLP Chartered Accountants UDIN: 19039826AAAAAL5806 SVP/2019-20/7485 Mumbai, May 10, 2019 This certificate is addressed to and provided to the Members of the Company solely for the purpose of compliance with Clause 13 of the Regulations. This certificate should not be circulated, copied, used/referred to for any other purpose, without our prior written consent. Accordingly, we do not accept or assume any liability or any duty of care of for any other purpose or to any other party to whom it is shown or into whose hands it may come without our prior consent in writing. 9. RESTRICTION ON USE Based on our examination of the accounting and other relevant supporting records and documents maintained by the Company as aforesaid, and according to the information and explanations given to us, in our opinion, the Company has complied with the applicable provisions of the Regulations and Resolutions in implementing the Schemes during the year ended March 31, 2019. 8. OPINION d) Written representation provided by the Management. LARSEN & TOUBRO the Resolutions; and c) b) the Regulations; a) the Schemes; The criteria against which the information is evaluated are the following: 7. CRITERIA AND SCOPE (Firm's Registration No. 117366W/W-100018) Sanjiv V. Pilgaonkar Partner (Membership No. 039826) Mr. Anilkumar Manibhai Naik 01 (DIN) No. Name of Director Sr. Director Identification Number Based on our examination of relevant documents made available to us by the Company and such other verifications carried out by us as deemed necessary and to the extent possible, in our opinion and to the best of our information and knowledge and according to the explanations provided by the Company, its officers and authorized representatives, we certify that as on date of this Certificate, none of the Directors on the Board of the Company, as listed hereunder, have been debarred or disqualified from being appointed or continuing as Directors of the Company by Securities and Exchange Board of India/ Ministry of Corporate Affairs or any such statutory authority. It is the responsibility of Directors to submit relevant documents with complete and accurate information in accordance with the provisions of the Act. We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality Control for Firms that Perform Audits and Review Historical Financial Information, and Other Assurance and Related Services Engagements. As submitted by the Directors of Larsen and Toubro Limited ('the Company') bearing CIN: L99999MH1946PLC004768 and having its registered office at L & T House, Ballard Estate, Mumbai 400001, to the Board of Directors of the Company ('the Board') for the Financial Year 2019-20. We have considered non-disqualification to include non- debarment by Regulatory / Statutory Authorities. ii) Disclosure of concern or interests as required under Section 184 of the Act; Declaration of non-disqualification as required under Section 164 of Companies Act, 2013 ('the Act'); i) We have examined the following documents: [Pursuant to clause (i) of Point (10) of Para C of Schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015] CERTIFICATE BY A COMPANY SECRETARY IN PRACTICE ANNEXURE TO THE BOARD REPORT I ANNUAL REPORT 2018-19 112 111 (hereinafter referred to as 'relevant documents'), It is our responsibility to certify whether the Company has complied with the applicable provisions of the Regulations and Resolutions during the year ended March 31, 2019, in implementing the Schemes on the basis of information compiled or collated by Management and the accounting and other relevant supporting records and documents provided to us for our examination. 6. 5. We have carried out an examination of the relevant records of the Company in accordance with the Guidance Note on Certification of Corporate Governance issued by the Institute of the Chartered Accountants of India (the "ICAI"), the Standards on Auditing specified under Section 143(10) of the Companies Act 2013, in so far as applicable for the purpose of this certificate and as per the Guidance Note on Reports or Certificates for Special Purposes issued by the ICAI which requires that we comply with the ethical requirements of the Code of Ethics issued by the ICAI. We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related Services Engagements. We have examined the books of account and other relevant records and documents maintained by the Company for the purposes of providing reasonable assurance on the compliance with Corporate Governance requirements by the Company. Our responsibility is limited to examining the procedures and implementation thereof, adopted by the Company for ensuring compliance with the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. 7. 6. 5. 4. AUDITOR'S RESPONSIBILITY The compliance of conditions of Corporate Governance is the responsibility of the Management. This responsibility includes the design, implementation and maintenance of internal control and procedures to ensure the compliance with the conditions of the Corporate Governance stipulated in Listing Regulations. OPINION 3. 1. This certificate is issued in accordance with the terms of our engagement letter dated September 29, 2018. 2. We, Deloitte Haskins & Sells LLP, Chartered Accountants, the Statutory Auditors of Larsen & Toubro Limited (the "Company"), have examined the compliance of conditions of Corporate Governance by the Company, for the year ended on March 31, 2019, as stipulated in regulations 17 to 27 and clauses (b) to (i) of regulation 46(2) and para C and D of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the "Listing Regulations"), as amended from time to time. INDEPENDENT AUDITOR'S CERTIFICATE ON CORPORATE GOVERNANCE LARSEN & TOUBRO LIMITED TO THE MEMBERS OF UDIN: 19039826AAAAAK2826 SVP/2019-20/7484 Independent Auditor's Certificate on Corporate Governance LARSEN & TOUBRO Mr. Hemant Bhargava MANAGEMENTS' RESPONSIBILITY 00001514 8. Based on our examination of the relevant records and according to the information and explanations provided to us and the representations provided by the Management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in regulations 17 to 27 and clauses (b) to (i) of regulation 46(2) and para C and D of Schedule V of the Listing Regulations during the year ended March 31, 2019. 4. AUDITOR'S RESPONSIBILITY 3. Implementation of the Schemes in accordance with the provisions of the Regulations and Resolutions and compilation of the relevant information for financial reporting is the responsibility of the Management of the Company. This includes the design, implementation and maintenance of internal control necessary to ensure accurate compilation of information necessary of the purpose and maintenance of all accounting and other relevant supporting records and documents and applying an appropriate basis of preparation of the relevant information for financial reporting; and making estimates that are reasonable in the circumstances. 1. This certificate is issued in accordance with the terms of our engagement letter dated September 29, 2018. 2. We, Deloitte Haskins & Sells LLP, Chartered Accountants (Firm Registration Number 117366W/W-100018), the Statutory Auditors of Larsen & Toubro Limited ("L&T"/ "Company"), pursuant to the requirement of clause 13 of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 as amended by Circular No. SEBI/LADNRO/GN/2015-16/021 dated September 18, 2015 and vide Notification no. SEBI/LAD/NGO/GN/2016- 17/037 dated March 6, 2017 (the "Regulations") are required to certify for the year ended March 31, 2019 that the Employee Stock Option Schemes, L&T Limited ESOP Scheme -2000 and L&T Limited ESOP Scheme -2006 (the "Schemes") have been implemented in accordance with the Regulations and in accordance with the special resolutions passed in the general meeting held on August 26, 1999 and August 25, 2006 (the "Resolutions"). MANAGEMENT'S RESPONSIBILITY INDEPENDENT AUDITOR'S CERTIFICATE IN RESPECT OF THE IMPLEMENTATION OF EMPLOYEE STOCK OPTION SCHEMES OF THE COMPANY LARSEN & TOUBRO LIMITED TO THE MEMBERS OF UDIN: 19039826AAAAAL5806 SVP/2019-20/7485 9. Independent Auditor's Certificate in respect of the implementation of Employee Stock Option Schemes of the Company 109 UDIN: 19039826AAAAAK2826 SVP/2019-20/7484 Mumbai, May 10, 2019 (Membership No. 039826) Sanjiv V. Pilgaonkar Partner (Firm's Registration No. 117366W/W-100018) For DELOITTE HASKINS & SELLS LLP Chartered Accountants We state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the Management has conducted the affairs of the Company. ANNEXURE TO THE BOARD REPORT I ANNUAL REPORT 2018-19 02 110 02255382 13 Mr. Akhilesh Krishna Gupta 00359325 14 Mrs. Sunita Sharma 02949529 15 Mr. Thomas Mathew T. 00130282 16 Mr. Ajay Shankar 01800443 17 Mr. Subramanian Sarma 00554221 Mr. N. Kumar Name of Director No. 18 Mrs. Naina Lal Kidwai Mr. Arvind Gupta Mr. Sekharipuram Narayanan Subrahmanyan 19 Mr. Sanjeev Aga 20 06646490 Mr. Adil Siraj Zainulbhai Sr. 00041197 03 Mr. Ramamurthi Shankar Raman 00019798 04 12 Mr. Shailendra Narain Roy 02144836 05 Mr. Dip Kishore Sen 03554707 06 Mr. M. V. Satish 06393156 21 Mr. Jayant Damodar Patil 07 Mr. Meleveetil Damodaran 00035672 10 11 Mr. Subodh Kumar Bhargava 02106990 00101004 Mr. Mukund Manohar Chitale 08 Mr. Vikram Singh Mehta 01252184 09 SUBSIDIARY 100.00 Section 2(87)(ii) NM MARG, MUMBAI, MAHARASHTRA - 400001 28 L&T DECCAN TOLLWAYS LIMITED 30 SUBSIDIARY 97.45 Section 2(87)(ii) 29 U29248MH2018PLC318481 L&T ELECTRICAL & AUTOMATION FZE L&T ELECTRICAL AND AUTOMATION SAUDI ARABIA COMPANY LIMITED LLC MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI - 600089 U45203TN2011PLC083661 L&T HOUSE, BALLARD ESTATE, SUBSIDIARY 27 24 L&T CASSIDIAN LIMITED# L&T HOUSE, BALLARD ESTATE, NM MARG, MUMBAI, MAHARASHTRA - 400001 U29253MH2011PLC216258 SUBSIDIARY 100.00 Section 2(87)(ii) 25 L&T CHENNAI TADA TOLLWAY LIMITED L&T CONSTRUCTION MACHINERY LIMITED MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI 97.45 Section 2(87)(ii) - 600089 26 L&T CONSTRUCTION EQUIPMENT LIMITED L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, U29119MH1997PLC109700 100.00 Section 2(87)(ii) MAHARASHTRA - 400001 SUBSIDIARY U45309TN2008PLC066938 SUBSIDIARY 107673 63.91 Section 2(87)(ii) WING, PLOT NO. 4, BLOCK-BP, SECTOR-V, SALT LAKE, KOLKATA -700091 U65100MH2011PLC299024 SUBSIDIARY 63.91 Section 2(87)(ii) 34 L&T FINANCIAL DUBAI - 506895 UAE CONSULTANTS 35 L&T GLOBAL HOLDINGS LIMITED BRINDAVAN, PLOT NO. 177, C.S.T. ROAD, KALINA, SANTACRUZ (EAST), MUMBAI - 400 098, MAHARASHTRA, INDIA. LIMITED U65910WB1993FLC060810 L&T FINANCE LIMITED TECHNOPOLICE, 7TH FLOOR, A 33 2050051589 SUBSIDIARY 100.00 Section 2(87)(ii) SUBSIDIARY 100.00 Section 2(87)(ii) 31 L&T ELECTRICALS AND AUTOMATION LIMITED U31501MH2007PLC176667 SUBSIDIARY 100.00 Section 2(87)(ii) 32 L&T FINANCE HOLDINGS LIMITED BRINDAVAN, PLOT NO. 177, C.S.T. ROAD, KALINA, SANTACRUZ (EAST), MUMBAI - 400 098, MAHARASHTRA, INDIA. L67120MH2008PLC181833 SUBSIDIARY 63.91 Section 2(87)(ii) WAREHOUSE NO. FZS2ABO5 262158, JEBEL ALI FREE ZONE, DUBAI, UNITED ARAB EMIRATES MH-4, PLOT NO. 17+19, IIND INDUSTRIAL CITY, DAMMAM, P.O. BOX 77186, AL KHOBAR 31952, KINGDOM OF SAUDI ARABIA L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 63.91 Section 2(87)(ii) 97.45 Section 2(87)(ii) 2908 Whole-time Director & Senior 14.121 174.08 16.95 Executive Vice President (Power, Heavy Engineering & Defence) D. K. Sen Shailendra Roy Whole-time Director & Senior 86.26 (13.19) Executive Vice President (Infrastructure) M. V. Satish Remuneration Whole-time Director & Senior 6.998 45.59 309.10 25.075 Ratio of remuneration of director to the median remuneration $ Percentage increase in Remuneration A. M. Naik Group Chairman 8.155* 100.52 101.93 S. N. Subrahmanyan UNIT 7, LEVEL 3, GATE Chief Executive Officer & Managing Director 48.454 597.28 52.36 R. Shankar Raman Whole-time Director & Chief Financial Officer 9.383 SUBSIDIARY 115.65 Designation MAHARASHTRA - 400001 22 L&T CAPITAL U67190MH2013PLC240261 SUBSIDIARY 63.91 Section 2(87)(ii) MARKETS LIMITED N M MARG, MUMBAI, 23 HOUSE, DUBAI INTERNATIONAL EAST) LIMITED BRINDAVAN, PLOT NO. 177, C.S.T. ROAD, KALINA, SANTACRUZ (EAST), MUMBAI - 400 098, MAHARASHTRA, INDIA. 501,502, LEVEL 5, LIBERTY FINANCIAL CENTRE, L&T CAPITAL MARKETS(MIDDLE COMPANY LIMITED 100.00 Section 2(87)(ii) SUBSIDIARY Address of the Company CIN/GLN 20 L&T BPP TOLLWAY LIMITED MOUNT POONAMALLE Holding/ Subsidiary/ Associate U45203TN2011PLC080786 SUBSIDIARY % of Shares Applicable Section held ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI - 600089 21 L&T CAPITAL L&T HOUSE, BALLARD ESTATE, U67190MH2000PLC125653 2018-19 Total PRECINCT, BUILDING 2, DUBAI INTERNATIONAL FINANCIAL CENTRE, P.O BOX 63671, DUBAI, UAE Skill Building Andhra Pradesh (Vizag), SUBSIDIARY 2,466.912 Implementing agency 217.658 183.370 9.137 192.507 Direct 19 119 120 ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 2,589.480 2,335.884 131.028 S. No. CSR Project or activity identified Sector in Projects or Programes 1. Local Area or other Amount project is covered 2. Specify the state and district where projects or program was undertaken Direct Overhead outlay expenditure (In (budget) on projects Lakh) project or or programs programe which the (In Lakh) Environment Gujarat (Vadodara), Maharashtra (Mahape, Mumbai, Nashik, Powai, Talegaon), New Delhi Skill Building 19 Basic infrastructure support in the community (Water, Health, Sanitation, Solar lights, roads etc.) Community Andhra Pradesh (Vizag), Bihar 372.537 348.136 17.347 365.483 Direct (Ranchi), Maharashtra (Mumbai), Rajasthan (Hindaun City), Uttar Pradesh (Varanasi) Maharashtra (Ahmednagar), Rajasthan (Rajsamand), Tamil Nadu (Coimbatore, Vellore) Development (Gandhinagar), Jharkhand 20 Integrated Community Development Programme 21 Development of gardens and maintenance of public spaces Water & Sanitation, Health, Education, (Madhepura, Patna), Gujarat wise Cumulative Amount spent: expenditure direct or through upto to the implementing reporting agency Environment Andhra Pradesh (Vizag), Gujarat Tamil Nadu (Chennai, Coimbatore) Jharkhand (Jamshedpur), Madhya Pradesh (Bhopal), Maharashtra (Talegaon), Rajasthan (Jaipur), Chandigarh, Gujarat (Hazira), environment, energy conservation, road safety Awareness programmes 23 (Vadodara), Maharashtra environment protection Tree plantation and 22 113.783 Direct 5.400 108.383 (In Lakh) 115.164 period (In Lakh) Environment Andhra Pradesh (Vizag), 24 Employee Volunteering 64.768 27.11 Name of the Director/ KMP A) Ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year 2018-19, the percentage increase in remuneration of each Director & Company Secretary during the financial year 2018-19 and comparison of the remuneration of each of the Key Managerial Personnel against the performance of the company: Annexure 'D' to the Board Report crore LARSEN & TOUBRO 12,168.294 12,461.673 11,576.804 591.490 Total 114.045 Direct 122.245 108.632 5.413 (Chennai, Nagapattinam) Andhra Pradesh (Vizag), Gujarat (Hazira, Ranoli, Vadodara), Karnataka (Mysore), Maharashtra (Mumbai), New Delhi, Tamil Nadu (Chennai, Coimbatore) Employee volunteers (Ahmednagar), Tamil Nadu 64.757 Implementing agency 3.073 61.684 (Kolkata) CL2106 (Hyderabad), West Bengal Pune), Tamil Nadu (Chennai, 22.135 1.102 23.237 Direct 11 Infrastructure support to medical centres Health (Lucknow), Uttarakhand 38.649 (Rudraprayag) Infrastructure support to medical centres Health Gujarat (Hazira), Haryana (Faridabad), Maharashtra 13 Construction Skill Training Institute CSTI (Mumbai), Tamil Nadu (Chennai, Kanchipuram), West Bengal (Kolkata) 12 Skill Building Andhra Pradesh (Amaravati), Gujarat (Ahmedabad), Karnataka (Bangalore), Maharashtra (Panvel, Nagpur), Orissa (Cuttack), Tamil Nadu (Kanchipuram, Pulicat), Telangana (Hyderabad, Jadcherla), Uttar Pradesh (Pilkhuwa), West Bengal (Kolkata) (Mahadevpur), Uttar Pradesh (In Lakh) 100.00 Section 2(87)(ii) S. No. CSR Project or activity identified Sector in LARSEN & TOUBRO which the Projects or Programes 1. Local Area or other Amount Orissa (Raigada), Tamil Nadu (Chennai, Vanur), Telangana project is covered Direct Overhead outlay expenditure (In (budget) on projects Lakh) project or or programs programe (In Lakh) wise Cumulative Amount spent: expenditure direct or through upto to the implementing reporting agency period (In Lakh) 2. Specify the state and district where projects or program was undertaken 547.470 519.831 25.903 545.734 Implementing agency 93.727 4.670 42.856 39.939 1.990 98.397 Implementing agency 41.929 Direct 16 Vocational Training 17 98.600 Women empowerment Skill Building Gujarat (Hazira, Ahmedabad), Orissa (Raigada), West Bengal (Kolkata) 18 Skill building for differently abled (Neev) 181.853 156.080 7.777 Jharkhand (Jamshedpur), Kerala (Kochi), Maharashtra (Nagpur, 163.857 Implementing agency through vocational training Skill Building Maharashtra (Ahmednagar, Pune), New Delhi, West Bengal (Kolkata) Rajasthan (Chhabra, Jaipur), Tamil Nadu (Kanchipuram) (Pune), Orissa (Raigada), 3,945.874 3,751.983 186.960 3,938.943 Direct 14 Vocational and Computer training for youth Skill Building Gujarat (Hazira), Maharashtra (Nagpur), Uttar Pradesh (Lucknow), West Bengal (Kolkata) Part of the remuneration has been paid to the financial institution he/she represents. 35.217 33.483 1.668 35.151 Direct 15 Vocational Training Skill Building Andhra Pradesh (Vizag), Gujarat (Vadodara), Madhya Pradesh 244.363 232.160 11.568 243.728 Direct (Bhopal, Malwa), Maharashtra Coimbatore), Telangana Executive Vice President Details not given as Mr. Hemant Bhargava was a director only from 28th May 2018 J. D. Patil GRAPHENE SEMICONDUCTORS SERVICES PRIVATE LIMITED #1154, 10TH B CROSS, YELAHANKA NEW TOWN, BANGALORE, U74900KA2013PTC068574 SUBSIDIARY 78.88 Section 2(87)(ii) KARNATAKA -560064 8 GRAPHENE SOLUTIONS PTE LTD 9 7 GRAPHENE 201524512K SUBSIDIARY 78.88 Section 2(87)(ii) 1231163-D SUBSIDIARY 78.88 Section 2(87)(ii) SOLUTIONS SDN.BHD TECHNOPRENEUR CENTRE, 2270, JALAN USAHAWAN 2, CYBER 6, 63000 CYBERJAYA, SELANGOR, MALAYSIA 10 GRAPHENE SOLUTIONS TAIWAN LTD. 11 HENIKWON CORPORATION SDN. 30 CECIL STREET, #19-08, PRUDENTIAL TOWER, SINGAPORE C-2-20, SME1, SME 78.88 Section 2(87)(ii) SUBSIDIARY U74140KA2011PTC061480 Address of the Company CIN/GLN Company 3 CHENNAI VISION DEVELOPERS PRIVATE LIMITED MOUNT POONAMALLE 4 DEVIHALLI HASSAN TOLLWAY LIMITED ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI 600089 MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI-600089 5 ESENCIA 6 TECHNOLOGIES INC 78.88 Section 2(87)(ii) SUBSIDIARY 3RD FLOOR, 26TH, 5TH BLOCK, 5TH CROSS, KORAMANAGALA, BANGALORE 560095 0479598-9 2350 MISSION COLLEGE BLVD SUITE 490, SANTA CLARA, CA 95054, USA 97.45 Section 2(87)(ii) BHD SUBSIDIARY 100.00 Section 2(87)(ii) % of Shares Applicable Section held LARSEN & TOUBRO PRIVATE LIMITED TECHNOLOGIES INDIA ESENCIA U45203TN2010PLC075491 Sl. No Name of the 6F, NO. 378, CHANGCHUN ROAD, ZHONGSHAN DISTRICT, TAIPEI CITY 104, TAIWAN (R.O.C) 2A-03-2, LORONG BATU NILAM 4A, BANDAR BUKIT TINGGI, 41200, KLANG, SELANGOR, MALAYSIA SUBSIDIARY MOUNT POONAMALLE U45203TN2005PLC057930 SUBSIDIARY 97.45 Section 2(87)(ii) TOLL ROAD LIMITED ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI 16 KUDGI TRANSMISSION LIMITED MOUNT POONAMALLE U40106TN2012GOI111122 SUBSIDIARY 97.45 Section 2(87)(ii) ROAD, POST BOX NO. 979, KRISHNAGIRI THOPUR MANAPAKKAM, 17 L&T - GULF PRIVATE LIMITED L&T HOUSE, BALLARD ESTATE, NM MARG, MUMBAI, MAHARASHTRA - 400001 U74140MH2008PTC177765 SUBSIDIARY 50.0002 Section 2(87)(ii) 18 L&T ARUNACHAL HYDROPOWER LIMITED L&T HOUSE, BALLARD ESTATE, NM MARG, MUMBAI, MAHARASHTRA - 400001 U40300MH2010PLC204778 SUBSIDIARY 100.00 Section 2(87)(ii) 19 SERVICES PRIVATE NAM MARG, MUMBAI ESTATE, US2100MH2009PTC196917 SUBSIDIARY 10.00 Section 2[87/(1) 127 CHENNAI 600089 15 GUJARAT-390002 PRIVATE LIMITED 78.88 Section 2(87)(ii) 161535-W SUBSIDIARY 100.00 Section 2(87)(ii) 12 13 KANA CONTROLS & CONTRACTING COMPANY WLL HI-TECH ROCK PRODUCTS & AGGREGATE LIMITED GENERAL TRADING MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI 600089 OFFICE NO. 14, 5TH FLOOR, AL-FARWANIYA, BLOCK NO. 44, BLDG. NO. 6, GHASHAM FAHED AL-BASMAN, KUWAIT CHHANI JAKAT NAKA, VADODARA, STEEL COMPANY 95.00 Section 2(87)(ii) SUBSIDIARY U27100GJ2009PTC055901 L&T ENERGY CENTRE, NEAR 50787314 KESUN IRON AND 49.00 Section 2(87)(i) SUBSIDIARY 10292 100.00 Section 2(87)(ii) SUBSIDIARY U14290TN2008PLC065900 14 SUBSIDIARY U70101TN2008PTC068877 Subsidiary/ Associate NIC Code of the Product/ service 410 421 422 # on the basis of gross turnover III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES - Sl. No Name of the Company Address of the Company CIN/GLN Holding/ Subsidiary/ Associate Form No. MR-3 SECRETARIAL AUDIT REPORT Construction of Utility Projects FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2019 To, The Members, Larsen & Toubro Limited CIN: L99999MH1946PLC004768 L&T House, Ballard Estate, Mumbai - 400 001. We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Larsen & Toubro Limited (hereinafter called 'the Company'). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/ statutory compliances and expressing our opinion thereon. Based on our verification of the Company's books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on 31st March 2019, complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance- mechanism in place to the extent, in the manner and subject to the reporting made hereinafter: We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31st March, 2019 according to the provisions of: i. The Companies Act, 2013 (the Act) and the rules made thereunder; ii. The Securities Contracts (Regulation) Act, 1956 ('SCRA') and the rules made thereunder; iii. The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder; iv. Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the V. extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings; [Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No.9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014] 3 Construction of Roads and Railways 2 @ Ceased to be a Director w.e.f. 2nd May 2018 # Appointed as a Director w.e.f. 28th May 2018 B. Percentage increase in the median remuneration of all employees in the financial year 2018-19: The median remuneration of employees of the Company during the financial year was 8.11 lakh. In the financial year, there was an increase of 2% in the median remuneration of employees. C. Number of permanent employees on the rolls of Company as on 31st March 2019: There were 44,332 permanent employees on the rolls of Company as on 31st March 2019. D. Average percentile increase already made in the salaries of the employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in managerial remuneration: E. Average percentage increase made in the salaries of employees other than the managerial personnel for the year 2018-19 was 5.45% whereas there is decline in the managerial remuneration by 16.20% because managerial remuneration in financial year 2017-18 included perquisite value of 47.98 crore in respect of stock options granted over the past several years by Larsen & Toubro Infotech Limited and L&T Technology Services Limited and exercised during the year 2017-18 by a Key Managerial Personnel. Adjusted for the above, the increase in managerial remuneration works out to 23.34% which is in line with growth of 23.95% in Profit after Tax for the year 2018-19 as the variable component of managerial remuneration is linked to growth in Profit after Tax. Affirmation that the remuneration is as per the remuneration policy of the company: It is hereby affirmed that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees. LARSEN & TOUBRO Annexure 'E' to the Board Report L&T HOUSE, N. M. MARG, BALLARD ESTATE, MUMBAI - 400 001 TEL: 022-67525656 FAX: 022-67525893 LISTED Karvy Fintech Pvt. Ltd. Construction of Buildings 1 services No. Name and Description of main products/ SI. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 ('SEBI Act'): All the business activities contributing 10 % or more of the total turnover of the company shall be stated:- Tel: (040) 6716 2222 Toll free number: 1-800-3454-001 Fax: (040) 2342 0814 - Telengana 500 032 Financial District, Nanakramguda, Hyderabad, Karvy Selenium Tower B, Plot 31 & 32, Gachibowli, Unit: Larsen & Toubro Limited PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY a. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; b. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015; C. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (upto 10th November, 2018) and Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (with effect from 11th November, 2018) - Not Applicable as there was no reportable event during the financial year under review; Company Secretaries Firm Registration No P1991 MH040400 S. N. ANANTHASUBRAMANIAN Partner FCS COP No. : 4206 1774 Date May 2, 2019 Place: Thane SUBSIDIARY % to total turnover of the company # 14.78 28.15 37.12 % of Shares Applicable Section held 1 AHMEDABAD-MALIYA TOLLWAY LIMITED MOUNT POONAMALLE U45203TN2008PLC069211 Holding/ DELHI-110001 CONNAUGHT PLACE, NEW 14, KASTURBA GANDHI MARG, COMPANY LIMITED 99.90 Section 2(87)(ii) For S. N. ANANTHASUBRAMANIAN & CO. SUBSIDIARY BHILAI POWER SUPPLY 2 600089 MANAPAKKAM, CHENNAI ROAD, POST BOX NO. 979, 97.45 Section 2(87)(ii) 9TH FLOOR, AMBADEEP BUILDING, U74899DL1995PLC070704 128 This Report is to be read with our letter of even date which is annexed as Annexure A and forms an integral part of this report. LARSEN & TOUBRO d. The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014; e. f. g. The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client - Not Applicable as the Company is not registered as Registrar to Issue and Share Transfer Agent during the financial year under review; The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 - Not Applicable as the Company has not delisted/ proposed to delist its equity shares from any Stock Exchange during the financial year under review; 123 124 ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 h. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 (up to 10th September 2018) and The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018 (with effect from 11th September 2018). vi. The Company has informed that there are no laws which are specifically applicable to the Company. We have also examined compliance with the applicable provisions of the following: (i) Secretarial Standards with regard to Meetings of Board of Directors (SS-1) and General Meetings (SS-2) issued by The Institute of Company Secretaries of India; (ii) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations, 2015 (LODR Regulations) and Listing Agreements entered into by the Company with National Stock Exchange of India Limited and BSE Limited. During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above except the following: The Company entered into a Share Purchase Agreement to acquire 20.15% of voting share capital of Mindtree Limited (target Company) and an order to acquire up to 15% of voting share capital of the target Company was placed with the broker on 18th March, 2019 thereby triggering compliance with SEBI ₹ The Members have pursuant to Section 68 of the Act and applicable SEBI Regulations approved by way of Special Resolution on 1st October 2018 through postal ballot, a proposal to buyback equity shares of the Company of up to 25% of aggregate of paid up capital and free reserves of the Company, by utilizing an amount not exceeding 9000 crore. SEBI vide its letter SEBI/HO/CFD/DCR1/OW/P/2019/2008/1 dated 18th January 2019 advised the Company not to proceed with the aforesaid proposal of buyback of shares. Redeemed Non-Convertible debentures aggregating to 400 crore on 7th January 2019; We further report that during the audit period the following events have occurred which had a major bearing on the Company's affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards etc: We further report that based on review of compliance mechanism established by the Company and on the basis of the Compliance Certificate(s) issued by the Company Secretary and taken on record by the Board of Directors at their meeting(s), we are of the opinion that there are adequate systems and processes in place in the Company which is commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines. (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. Consequently, the Company has filed Draft Open Offer letter dated 2nd April 2019 with SEBI to acquire further 31% of the voting share capital of the target company, such that the Company holds up to 66.15% of the voting share capital of the target company. All decisions of Board and Committee meetings were carried unanimously. Adequate notice is given to all Directors of the schedule of the Board and Committee Meetings and Agenda & detailed notes on agenda were sent at least seven days in advance except for the meetings where consent of the Directors was obtained for receiving notice and agenda and notes to agenda less than seven days before the meeting; Does not include the perquisite value related to ESOPs exercised during the year in respect of stock options granted over the past several years by Larsen & Toubro Infotech Limited and L&T Technology Services Limited of 213.39 crore. The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors including Independent Directors and Women Directors. The changes in the composition of the Board of Directors which took place during the period under review were carried out in compliance with the provisions of the Act; . We further report that:- The Company had at its Board Meeting held on 26th March, 2019 enabled a proposal for raising additional long term borrowings through issue of secured / unsecured debentures / bonds / terms loans including hybrid instruments that do not dilute shareholders voting rights up to an amount not exceeding 7,000 crore (or USD 1 billion, which is higher), in respect of which applicable provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 have not been duly complied with, as there was an inadvertent delay in intimating the stock exchanges. There exists a system for seeking and obtaining further information and clarifications on the agenda items before the meeting for meaningful participation at the meeting; ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 - 600089 Annexure-'A' Sanjeev Aga 34.10 Sl. No Name of the Company 0.262 Independent Director Naina Lal Kidwai Remuneration increase in Percentage Ratio of remuneration of director to the median remuneration $ Remuneration 2018-19 Total Designation Name of the Director/ KMP crore ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 122 121 1221 NIL Non-Executive Director Subramanian Sarma 13.88 Independent Director 0.376 4.63 18.36 Λ * $ 4.03 15.14 1.228 Company Secretary N. Hariharan Corporate of India ** 0.53 4.70 0.037 Hemant Bhargava #^ 380.75 2.86 0.233 Nominee of SUUTI Arvind Gupta ^ 103.33 4.89 0.397 Independent Director Narayanan Kumar Nominee of Life Insurance ** 0.382 25.49 0.444 Independent Director Vikram Singh Mehta 63.08 6.03 0.489 Independent Director 30.50 8.04 0.653 Independent Director Subodh Bhargava M. Damodaran 24.45 6.24 0.507 Independent Director M. M. Chitale (Defence) Executive Vice President 108.16 101.37 8.223 Whole-time Director & Senior 5.46 60.10 Sushobhan Sarker ^@ Nominee of Life Insurance 5.30 0.430 Independent Director Thomas Mathew T. Ajay Shankar Corporate of India (45.17) 0.41 0.033 Nominee of Life Insurance 34.10 3.22 Independent Director 0.262 Sunita Sharma^ Akhilesh Gupta 50.95 5.86 0.476 Independent Director Adil Zainulbhai Corporate of India (82.92) 8.15 0.059 Independent Director Ratio of remuneration of director to the median remuneration is calculated on pro-rata basis for those directors who served for only part of the financial year 2018-19. 3.22 Management's Responsibility LARSEN & TOUBRO LIMITED February 7, 1946 L99999MH1946PLC004768 viii) Name, Address and Contact details of Registrar and Transfer Agent, if any vii) Whether listed company vi) Address of the Registered office and contact details v) Sub-Category of the Company iv) Category iii) Name of the Company Registration Date II. 6. 5. The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company. PUBLIC LIMITED COMPANY Disclaimer We believe that audit evidence and information obtained from the Company's management is adequate and appropriate for us to provide a basis for our opinion. 4. To, The Members, Larsen & Toubro Limited CIN L99999MH1946PLC004768 L&T House, Ballard Estate, Mumbai - 400 001. Our Secretarial Audit Report for the Financial Year ended 31st March, 2019, of even date is to be read along with this letter. 3. (Buildings, Minerals & Metals) 1. It is the responsibility of the management of the Company to maintain secretarial records, devise proper systems to ensure compliance with the provisions of all applicable laws and regulations and to ensure that the systems are adequate and operate effectively. Wherever required, we have obtained the management's representation about the compliance of laws, rules and regulations and happening of events etc. COMPANY HAVING SHARE CAPITAL ii) CIN [Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014] as on the financial year ended on March 31, 2019 EXTRACT OF ANNUAL RETURN FORM NO. MGT-9 Annexure 'F' to the Board Report ANNEXURE TO THE BOARD REPORT I ANNUAL REPORT 2018-19 126 125 Auditor's Responsibility Place: Thane Date May 2, 2019 15 FCS : 4206 i) COP No. 1774 REGISTRATION AND OTHER DETAILS: We have not verified the correctness and appropriateness of financial records and books of accounts of the Company For S. N. ANANTHASUBRAMANIAN & CO. I. Firm Registration No P1991MH040400 S. N. ANANTHASUBRAMANIAN Partner Company Secretaries 2. Our responsibility is to express an opinion on these secretarial records, standards and procedures followed by the Company with respect to secretarial compliances. 74.80 Section 2(87)(ii) 2159287 THE WOODROPE BUILDING, SERVOWATCH 126 AHMEDABAD - 380 009 ASHRAM ROAD, 0 SUBSIDIARY PANIPAT ELEVATED 116 AG 115 74.80 Section 2(87)(ii) SUBSIDIARY UID: CHE-113.683.377 STAMPFENBACHSTRASSE 52, CH-8006 ZÜRICH, SWITZERLAND 74.80 Section 2(87)(ii) SUBSIDIARY MOUNT POONAMALLE RCB Reg. No. 201306219M 74.80 Section 2(87)(ii) SUBSIDIARY R.C.S. Luxembourg B213716 51, BOULEVARD GRANDE DUCHESSE CHARLOTTE, L-1330 LUXEMBOURG 74.80 Section 2(87)(ii) SUBSIDIARY ACN 624 699 627 52 MARTIN PLACE, LEVEL 23, SYDNEY NSW 2000 74.80 Section 2(87)(ii) SUBSIDIARY 11 COLLYER QUAY #09-09 THE ARCADE, SINGAPORE 049317 CORRIDOR LIMITED ROAD, POST BOX NO 979, MANAPAKKAM, C2-18.177.HT.01.01.HT 94 THE CITY TOWER, 12TH FLOOR, UNIT 1-N, J1.MH., THAMRIN NO.81, CENTRAL JAKARTA, INDONESIA 10310 COMPANY PRIVATE LIMITED RAYKAL ALUMINIUM 120 INDONESIA ENGINEERING HYDROCARBON PT. LARSEN & TOUBRO 119 PT TAMCO INDONESIA JALAN RAYA PASAR SERANG, NO. 15, KANDANG RODA, CIKARANG BEKASI 17330, INDONESIA 118 72.77 Section 2(87)(ii) SUBSIDIARY U45203TN2009PLC070741 97.45 Section 2(87)(ii) SUBSIDIARY U45203TN2005PLC056999 ROAD, POST BOX NO.979, MANAPAKKAM, CHENNAI - 600089 MOUNT POONAMALLE CHENNAI 600089 PNG TOLLWAY LIMITED 117 GANDHIGRAM RAILWAY STATION, PRIVATE LIMITED U45309MH2016PTC283661 SUBSIDIARY 0.00 0.00 Sub-total (A) (2):- 0 0 0 0.00 0 0 0 0.00 Total shareholding of Promoter 0 0 0 0.00 0 0 0 0.00 88 0 0.00 0 0.00 e) Any Other.... 0.00 0.00 0 0 0 0.00 0 0 0 d) Banks/Fl 0.00 0.00 0 Holding/ Subsidiary/ Associate % of Shares Applicable Section held 121 RULETRONICS LIMITED, UK 122 0 0 0.00 |(A)=(A)(1)+(A)(2) 135 43 FARNSWORTH COURT, WEST PARKSIDE, LONDON SE10 0QG 24A-1611/2,46965, DWARAKA, APARTMENTS 401, ALLASANI, PEDDANNA STREET, ELURU, ANDHRA PRADESH SUBSIDIARY 74.80 Section 2(87)(ii) 0450075646 SUBSIDIARY 74.80 Section 2(87)(ii) U72200AP2014PTC094911 SUBSIDIARY 74.80 Section 2(87)(ii) 124 SAHIBGANJ GANGES BRIDGE-COMPANY L&T HOUSE BALLARD ESTATE MUMBAI 400001 0 SUBSIDIARY 100.00 Section 2(87)(ii) PRIVATE LIMITED # 125 SEASTAR LABS 501, SARKAR-1, OPP. U72900GJ2015PTC083374 271 US HIGHWAY 46, SUITE C104, 7946822 NJ 7004 SYSTEMS PRIVATE LIMITED RULETRONICS 123 136 ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 Category of Shareholders No. of Shares held at the beginning of the year Demat Physical Total CIN/GLN Address of the Company Sl. No Name of the Company ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 134 133 78.88 Section 2(87)(ii) 133 75.50 Section 2(87)(ii) SUBSIDIARY U132030R1999PTC005673 ANNAPURNA COMPLEX, 559, 95.00 Section 2(87)(ii) SUBSIDIARY AHU-0110258.AH.01.09 100.00 Section 2(87)(ii) RULETRONICS SYSTEMS INC LEWIS ROAD, BHUBANESWAR, KHORDHA-751014 SUBSIDIARY LARSEN & HRB 60455 Sl. No Name of the Company Address of the Company CIN/GLN Holding/ Subsidiary/ Associate % of Shares Applicable Section held 86 ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 LARSEN & TOUBRO AL-TURKI BUILDING, KING KHALED 2050055625 STREET, P.O. BOX 91, DAMMAM SUBSIDIARY 100.00 Section 2(87)(ii) 87 LARSEN & TOUBRO P.O. BOX 1999, RUWI, POSTAL ATCO SAUDIA LLC 132 131 (EAST ASIA) SDN. BHD HANGSAM, JALAN HANG LEKER 390357-7 SUBSIDIARY 3000 Secton 2 (87)() SUBSIDIARY 51.00 Section 2(87)(ii) 83 L&T-MHPS TURBINE GENERATORS PRIVATE LIMITED L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 U31101MH2006PTC166541 SUBSIDIARY 51.00 Section 2(87)(ii) 84 L&T-SARGENT & LUNDY LIMITED L&T HOUSE, BALLARD ESTATE, NM MARG, MUMBAI, MAHARASHTRA - 400001 U74210MH1995PLC088099 SUBSIDIARY 50.0001 Section 2(87)(ii) 1/04445/1 U29119MH2006PTC165102 SUBSIDIARY ELECTROMECH LLC LARSEN & TOUBRO INFOTECH CANADA LIMITED RECHTSANWALTE GMBH, KARLSPLATZ, 3/1, VIENNA 2810, MATHESON BLVD EAST SUITE 500, MISSISSAUGA, ONL4W 4X7 CANADA 1415026 FN435491D 91 SUBSIDIARY SUBSIDIARY 74.80 Section 2(87)(ii) 92 LARSEN & TOUBRO INFOTECH GMBH EURO-ASIA BUSINESS CENTRE, MESSE-ALLEE 2, D-04356, LEIPZIG, GERMANY HRB 15958 74.80 Section 2(87)(ii) INFOTECH AUSTRIA GMBH C/O, OBERHAMMER, 100.00 Section 2(87)(ii) CODE 112, MUSCAT 88 89 90 90 LARSEN & TOUBRO HEAVY ENGINEERING LLC LARSEN & TOUBRO HYDROCARBON INTERNATIONAL LIMITED LLC LARSEN & TOUBRO P.O. BOX 281, POSTAL CODE 325, W LIWA, SULTANATE OF OMAN 1042928 SUBSIDIARY 70.00 Section 2(87)(ii) P.O. BOX 6391, AL KHOBAR 34423, KINGDOM OF SAUDI ARABIA 2051053464 SUBSIDIARY 70.00 Section 2(87)(ii) L&T HOUSE, BALLARD ESTATE, NM MARG, MUMBAI, MAHARASHTRA - 400001 PRIVATE LIMITED L&T-MHPS BOILERS L&T TECHNOLOGY SERVICES LIMITED 76 L&T TECHNOLOGY SERVICES LLC L&T HOUSE, BALLARD ESTATE, NM MARG, MUMBAI, MAHARASHTRA - 400001 75 200, WEST ADAMS STREET, CHICAGO, ILLINOIS-60606 SUBSIDIARY 78.88 Section 2(87)(ii) 0479598-9 SUBSIDIARY 78.88 Section 2(87)(ii) 77 L72900MH2012PLC232169 74.00 Section 2(87)(ii) SUBSIDIARY U27109MH2009PTC193699 MAHARASHTRA - 400001 73 L&T SHIPBUILDING LIMITED GROUND FLOOR, TC-1 BUILDING, U74900TN2007PLC065356 SUBSIDIARY 97.00 Section 2(87)(ii) L&T CONSTRUCTION CAMPUS, MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI - 600089 74 L&T SPECIAL STEELS AND HEAVY FORGINGS PRIVATE LIMITED L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 L&T THALES TECHNOLOGY SERVICES PRIVATE LIMITED VILLAGE BEDUBAGAR P.O AUGUSTMUNI RUDRAPRAYAG RUDRA PRAYAG UR 246421 L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, MAHARASHTRA - 400001 U31401UR2006PLC032329 SUBSIDIARY 100.00 Section 2(87)(ii) U74999MH1961PLC012188 SUBSIDIARY 100.00 Section 2(87)(ii) 81 L&T VISION VENTURES MOUNT POONAMALLE LIMITED U74210TN2006PLC061845 SUBSIDIARY 68.00 Section 2(87)(ii) ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI - 600089 82 L&T VALVES LIMITED SUBSIDIARY 80 HYDROPOWER RR V TOWER, 6TH FLOOR, 33A, DEVELOPED PLOTS, SIDCO INDUSTRIAL ESTATE, GUINDY, CHENNAI-600032 U72200TN2006PTC059421 SUBSIDIARY 58.37 Section 2(87)(ii) 78 L&T TRANSPORTATION | MOUNT POONAMALLE U45203TN1997PLC039102 SUBSIDIARY 98.12 Section 2(87)(ii) INFRASTRUCTURE LIMITED ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI - 600089 79 L&T UTTARANCHAL LIMITED 74.80 Section 2(87)(ii) 93 LARSEN & TOUBRO 106 LTIDPL INDVIT MOUNT POONAMALLE U45203TN1999PLC042518 SUBSIDIARY 97.45 Section 2(87)(ii) MUMBAI 400001 SERVICES LIMITED (formerly known as L&T WESTERN INDIA MANAPAKKAM, CHENNAI - 600089 TOLLBRIDGE LIMITED) 107 ROAD, POST BOX NO. 979, LIMITED 56.67 Section 2(87)(ii) SUBSIDIARY 6TH FLOOR, 119 HERTZOG BOULEVARD, FORESHORE, CAPETOWN, SOUTH AFRICA 8001 ALMADA TOWER, PRINCE TURKI STREET, AL KHOBAR, SAUDI ARABIA Holding/ Subsidiary/ Associate 2011/007226/07 SUBSIDIARY % of Shares Applicable Section held 56.03 Section 2(87)(ii) 2051049523 SUBSIDIARY 75.00 Section 2(87)(ii) 105 LTH MILCOM PRIVATE L&T HOUSE, BALLARD ESTATE, U74999MH2015PTC267502 LTR SSM PRIVATE LIMITED L&T HOUSE, BALLARD ESTATE, U70109MH2018PTC314632 SUBSIDIARY PO BOX NO-28, NEAR VILLAGE NALASH, RAJPURA, PATIALA, PUNJAB-140401 GROSSER BURSTAH 45, 20457 HAMBURG, GERMANY 12 A FLOOR UNIT B1, B2 SIAM PIWAT TOWER, 989 RAMA 1 ROAD, PATHUMWAN, BANGKOK 10330, THAILAND NIELSEN&PARTNER 112 Pty Ltd 113 114 NIELSEN+ PARTNER S.A. NIELSEN+PARTNER Pte Ltd. NIELSEN+PARTNER Unternehmensberater U40102PB2007PLC031039 SUBSIDIARY 100.00 Section 2(87)(ii) Unternehmensberater ARABIA LLC NIELSEN&PARTNER Co., Ltd. GMBH 99.00 Section 2(87)(ii) NM MARG, MUMBAI, MAHARASHTRA - 400001 108 MUDIT CEMENT PRIVATE LIMITED 5TH FLOOR, DCM BUILDING, 16, BARAKHAMBA ROAD, U26942DL1990PTC041941 SUBSIDIARY 63.91 Section 2(87)(ii) CONNAUGHT PLACE, NEW DELHI-110001 109 NABHA POWER LIMITED 110 Neilsen+Partner 111 0105561057293 LARSEN TOUBRO LARSEN AND TOUBRO INFOTECH SOUTH AFRICA (PTY) LIMITED 96 LARSEN & TOUBRO INTERNATIONAL FZE OFFICE LOB 16 G 08, POST 0067 SUBSIDIARY 100.00 Section 2(87)(ii) 96 BOX 41558, HAMRIYAH FREE ZONE, SHARJAH, UNITED ARAB EMIRATES SUBSIDIARY TOUBRO KUWAIT PLOT NO. 3, BUILDING NO.1, SHARQ, KUWAIT 117668 SUBSIDIARY 49.00 Section 2(87)(i) 97 74.80 Section 2(87)(ii) SUBSIDIARY 921 974 248 L&T HOUSE, BALLARD ESTATE, L72900MH1996PLC104693 SUBSIDIARY 74.80 Section 2(87)(ii) INFOTECH LIMITED N M MARG, MUMBAI, MAHARASHTRA - 400001 94 LARSEN & TOUBRO INFOTECH LLC 95 LARSEN & TOUBRO INFOTECH NORGE AS 1220, N. MARKET ST., SUITE 806, WILMINGTON, DE 19801, USA MARTIN LINGES VEI 25, 1364 FORNEBU, 0219 BAERUM, NORWAY 270596763 SUBSIDIARY 74.80 Section 2(87)(ii) CONSTRUCTION GENERAL CONTRACTING COMPANY, WITH LIMITED LIABILITY 98 1010154437 SUBSIDIARY 100.00 Section 2(87)(ii) 102 LARSEN & TOUBRO TANDD SA (PTY) LIMITED 2ND FLOOR, 4 PENCARROW CRESCENT, LA LUCIA RIDGE OFFICE ESTATE, SOUTH AFRICA 4019 2010/018159/07 SUBSIDIARY 72.50 Section 2(87)(ii) LARSEN & TOUBRO Sl. No Name of the Address of the Company CIN/GLN Company 103 P.O. BOX NO.20, RIYADH 11351, KINGDOM OF SAUDI ARABIA 11351 104 SAUDI ARABIA LLC 101 LARSEN & TOUBRO LLC 113, BARKSDALE PROFESSIONAL CENTRE, NEWARK CITY, COUNTRY OF NEW CASTLE, G56 ZIP CODE-19711, U.S.A 6 DEL.C 18-101 SUBSIDIARY 99.19 Section 2(87)(ii) 99 100 LARSEN & TOUBRO OMAN LLC LARSEN & TOUBRO QATAR LLC P.O. BOX 1127, RUWI, POSTAL CODE 112, SULTANATE OF OMAN P.O. BOX 24399, SH. THAMOUR BLDG., MEZZANINE FLOOR, AL-HANDASA AREA, NEAR JAIDAH FLYOVER, B RING ROAD, DOHA, QATAR 1/40304/4 SUBSIDIARY 65.00 Section 2(87)(ii) 27454 SUBSIDIARY 49.00 Section 2(87)(i) LARSEN & TOUBRO 100.00 Section 2(87)(ii) 0 WOODROLFE ROAD, TOLLESBURY, Company CIN/GLN Address of the Company Sl. No Name of the LARSEN & TOUBRO 97.45 Section 2(87)(ii) Holding/ SUBSIDIARY MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI - 600089 WESTERN ANDHRA TOLLWAYS LIMITED 136 - 600089 97.45 Section 2(87)(ii) SUBSIDIARY U45203TN2005PLC057931 U45203TN2005PLC058417 Subsidiary/ Associate 1 POST BOX 1267, NEHA INDIRAN 3 50.00 Section 2(6) ASSOCIATE U18104GJ1978SGC003134 % of Shares Applicable Section held 7.76 Section 2(6) U64100HR2009PTC048269 609B & 610, 6TH FLOOR, WELL DONE TECH PARK, SOHNA ROAD, SECTOR-41, GURGAON - 122018 NO 3001, GIDC INDUSTRIAL ESTATE, ANKLESHWAR, GUJARAT INDUSTRIES LIMITED @@ GUJARAT LEATHER 2 ARDOM TELECOM PRIVATE LIMITED ASSOCIATE MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI VADODARA BHARUCH TOLLWAYS LIMITED 135 U45300TG2010PLC070121 L&T METRO RAIL 59 MAHARASHTRA - 400001 51.00 Section 2(87)(i) & 2(87)(ii) N M MARG, MUMBAI, SUBSIDIARY SYSTEMS LIMITED U29308MH2017PLC293402 L&T HOUSE, BALLARD ESTATE, L&T MBDA MISSILE 58 97.45 Section 2(87)(ii) SUBSIDIARY SUBSIDIARY 100.00 Section 2(87)(ii) (HYDERABAD) LIMITED INDUSTRIAL ESTATE, HOLLOWAY ROAD, MALDON, ESSEX, C9 4ER, UNITED KINGDOM 100.00 Section 2(87)(ii) SUBSIDIARY 01201246 ENDEAVOUR HOUSE, BENTALLS THALEST LIMITED 134 100.00 Section 2(87)(ii) SUBSIDIARY 775268-H UNIT C508, BLOCK C, KELANA SQUARE, JALAN SS7/26, KELANA JAYA 47301, PETALING JAYA SELANGOR DARUL EHSAN, MALAYSIA TAMCO SWITCHGEAR (MALAYSIA) SDN BHD 133 60 FABRICATION YARD 3744 U45203TN2010PLC075446 ASSOCIATE ENGINEERING AGHA NEMATULLA STREET 224, NARIMANOV DISTRICT BAKU CITY, AZERBAIJAN L&T HOUSE, BALLARD ESTATE, MAHARASHTRA - 400001 1503665631 N M MARG, MUMBAI, 42 N M MARG, MUMBAI, MAHARASHTRA - 400001 L&T HYDROCARBON 17744 INTERNATIONAL FZE HAMRIYAH FREE ZONE, SHARJAH, UAE 43 L&T INFORMATION TECHNOLOGY WAREHOUSE NO. LV 38-B, 44 L&T HOWDEN PRIVATE L&T HOUSE, BALLARD ESTATE, ENGINEERING U31401MH2010PTC204403 SUBSIDIARY 50.10 Section 2(87)(ii) SUBSIDIARY 50.00 Section 2(87)(ii) U11200MH2009PLC191426 LIMITED SUBSIDIARY 39 LIMITED 40 L&T HYDROCARBON CASPIAN LLC 41 L&T HYDROCARBON 100.00 Section 2(87)(ii) 45 SERVICES (SHANGHAI) CO., LTD. L&T INFORMATION 74.80 Section 2(87)(ii) 47 L&T INFRA L& T-CHIYODA 6 L&T CAMP FACILITIES LLC SUBSIDIARY 5 INTERNATIONAL 4 SYSTEMS KISH (LLC) KISH ISLAND, IRAN PROJECTS AND APARTMENT, BAZAAR-E-DANOOS, SEAPORTS (HALDIA) PRIVATE LIMITED N-2017020633 BOSQUE DE CIRUELOS 180, SUITE PP 101, COL.BOSQUES DE LAS LOMAS, 11700 MEXICO CITY, MEXICO 46 TECHNOLOGY SPAIN SOCIEDAD LIMITADA L&T INFOTECH FINANCIAL SERVICES TECHNOLOGIES INC L&T INFOTECH S. DE. RL.C.V PASEO DE LA CASTELLANA 81 STREET, FLOOR 11, 28046, MADRID, SPAIN 2810, MATHESON BLVD EAST SUITE 500, MISSISSAUGA, ONL4W 4X7 CANADA ROOM 1100, BUILDING 2, NO.1388, XINGXIAN ROAD, JIADING DISTRICT, SHANGHAI Tome 34332 770556-5 SUBSIDIARY 100.00 Section 2(87)(ii) 310000400714060 (JIADING) SUBSIDIARY 74.80 Section 2(87)(ii) SUBSIDIARY 74.80 Section 2(87)(ii) SUBSIDIARY 74.80 Section 2(87)(ii) 50.00 Section 2(6) MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI 600089 TOLLWAY LIMITED L&T KRISHNAGIRI WALAJAHPET 6971, VIDYANAGARI MARG, C.S.T. FUND LIMITED 63.91 Section 2(87)(ii) SUBSIDIARY L67100MH2013PLC241104 PLOT NO. 177, CTS 6970, ROAD, KALINA, SANTACRUZ L&T INFRA DEBT LIMITED PRIVATE COMPANY 100.00 Section 2(87)(ii) SUBSIDIARY L&T HOUSE, BALLARD ESTATE, N U45400MH2017PTC292586 M MARG, MUMBAI 400001 CONTRACTORS 48 100.00 Section 2(87)(ii) (EAST), MUMBAI - 400098 L&T INFRA PRIVATE LIMITED PARTNERS TRUSTEE INVESTMENT L&T INFRA PRIVATE LIMITED INVESTMENT 49 51 PARTNERS ADVISORY 6971, VIDYANAGARI MARG, C.S.T. 63.91 Section 2(87)(ii) SUBSIDIARY U67190MH2011PTC218046 PLOT NO. 177, CTS 6970, 50 SYNCORDIS LIMITED BEACON HOUSE, 15 10045506 SOFTWARE SERVICES INDIA PRIVATE 4TH FLOOR, ROOP EMERALD, NO.45, NORTH USMAN ROAD T. NAGAR 600017 U72900TN2015FTC101675 SUBSIDIARY 74.80 Section 2(87)(ii) SYNCORDIS LIMITED TAMCO ELECTRICAL INDUSTRIES 31, KITCHEN ROAD, DANDENONG, ACN006140512 VICTORIA 3175, AUSTRALIA SUBSIDIARY 100.00 Section 2(87)(ii) AUSTRALIA PTY LTD 132 131 74.80 Section 2(87)(ii) SUBSIDIARY SUBSIDIARY 74.80 Section 2(87)(ii) CHRISTCHURCH ROAD, BOURNEMOUTH, DORSET, ENGLAND, UK -BH13LB 129 SYNCORDIS PSF S.A. 105, ROUTE D'ARLON, L-8009, STRASSEN, LUXEMBOURG B217963 SUBSIDIARY 74.80 Section 2(87)(ii) 130 SYNCORDIS S.A. LUXEMBOURG 105 ROUTE D'ARLON, L-8009 STRASSEN RCS LUXEMBOURG B NUM'ERO 105331 B105331 L&T INFRASTRUCTURE DEVELOPMENT PROJECTS LIMITED ROAD, KALINA, SANTACRUZ (EAST), MUMBAI - 400098 BRINDAVAN, PLOT NO. 177, L&T INVESTMENT 55 - 600089 MANAPAKKAM, CHENNAI LIMITED U65991MH1996PLC229572 ROAD, POST BOX NO. 979, 97.45 Section 2(87)(ii) SUBSIDIARY U45203TN2006PLC058735 MOUNT POONAMALLE L&T INTERSTATE 54 ROAD CORRIDOR SUBSIDIARY 63.91 Section 2(87)(ii) MANAGEMENT 57 MAHARASHTRA - 400001 LIMITED N M MARG, MUMBAI, MACHINERY PRIVATE 51.00 Section 2(87)(ii) SUBSIDIARY U29253MH2010PTC210325 L&T HOUSE, BALLARD ESTATE, L&T KOBELCO 56 MAHARASHTRA, INDIA. (EAST), MUMBAI - 400 098, LIMITED C.S.T. ROAD, KALINA, SANTACRUZ MAHARASHTRA, INDIA. C.S.T. ROAD, KALINA, SANTACRUZ (EAST), MUMBAI - 400 098, MAHARASHTRA, INDIA. (EAST), MUMBAI - 400 098, C.S.T. ROAD, KALINA, SANTACRUZ CIN/GLN Address of the Company Sl. No Name of the Company ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 130 129 52 97.45 Section 2(87)(ii) U65993TN2001PLC046691 MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI - 600089 63.91 Section 2(87)(ii) SUBSIDIARY U65900MH2011PTC220896 PLOT NO. 177, VIDYANAGARI MARG, C.S.T. ROAD, KALINA,SANTACRUZ (EAST), MUMBAI - 400098 SUBSIDIARY L&T INFRASTRUCTURE ENGINEERING LIMITED FINANCE COMPANY 63.91 Section 2(87)(ii) SUBSIDIARY U67190TN2006PLC059527 BRINDAVAN, PLOT NO. 177, L&T INFRASTRUCTURE 53 100.00 Section 2(87)(ii) % of Shares Applicable Section held SUBSIDIARY U74140TN1998PLC039864 Associate Subsidiary/ Holding/ MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI - 600089 LIMITED SYSTEMS LIMITED FINANCE LIMITED SUBSIDIARY U65993MH1996PLC211198 70.00 Section 2(87)(ii) SUBSIDIARY 1001910 L&T HOUSE, BALLARD ESTATE, N M MARG, MUMBAI, 252E, MURI OKUNOLA STREET, VICTORIA ISLAND, LAGOS, NIGERIA SUBSIDIARY L&T HOUSE BALLARD ESTATE, P.O. BOX 278, MUMBAI 400001 PO BOX 236, P.C 322, FALAZ AL QABAIL, SOHAR, SULTANATE OF OMAN HYDERABAD METRO RAIL ADMINISTRATIVE BUILDING, UPPAL MAIN ROAD, NAGOLE, HYDERABAD, TELANGANA 500039. L&T POWER PROJECTS NIGERIA LIMITED 63 L&T OVERSEAS 128 62 63.91 Section 2(87)(ii) SUBSIDIARY N M MARG, MUMBAI, 99.99 Section 2(87)(ii) SUBSIDIARY U40100MH2006PLC160413 L&T HOUSE, BALLARD ESTATE, L&T POWER LIMITED 601723 64 LIMITED DEVELOPMENT 100.00 Section 2(87)(ii) SUBSIDIARY U40101MH2007PLC174071 100.00 Section 2(87)(ii) MAHARASHTRA - 400001 TRUSTEE LIMITED L&T MUTUAL FUND 61 b) Other-Individuals 0.00 0.00 0 0 0 0 0.00 0 0 a) NRIs -Individuals (2) Foreign 0.00 0.00 0 0 0 0.00 LLC L&T MODULAR 0 0 0.00 0 0 0 Bodies Corp. c) 0.00 0.00 0 0 0 MAHARASHTRA - 400001 0 65 TOLLWAY LIMITED LIMITED SHIPPING PRIVATE L&T SAPURA 71 60.00 Section 2(87)(ii) SUBSIDIARY MOUNT POONAMALLE ROAD, POST BOX NO 979, MANAPAKKAM, CHENNAI U11200TN2010PTC077214 LIMITED OFFSHORE PRIVATE L&T SAPURA 70 97.45 Section 2(87)(ii) MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI - 600089 MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI - 600089 LIMITED U61100TN2010PTC077217 60.00 Section 2(87)(ii) MALDONESSEX CM9 8SE, UNITED KINGDOM 127 SYNCORDIS FRANCE SARL 8, RUE, PAUL BELMONDO, PARIS, 514135862 SUBSIDIARY SUBSIDIARY 74.80 Section 2(87)(ii) SUBSIDIARY U45203MH2008PLC180029 L&T HOUSE, BALLARD ESTATE, L&T SEAWOODS LIMITED 72 - 600089 FRANCE 75012 L&T SAMBALPUR - ROURKELA TOLLWAY 69 % of Shares Applicable Section held L&T HOUSE, BALLARD ESTATE, NM MARG, MUMBAI, MAHARASHTRA - 400001 L&T REALTY LIMITED 67 100.00 Section 2(87)(ii) SUBSIDIARY 02-01-05714 U74200MH2007PLC176358 EXECUTIVE SUITE, P.O.BOX 121576, SAIF ZONE, SHARJAH, U.A.E. 66 - 600089 97.45 Section 2(87)(ii) SUBSIDIARY U45203TN2008PLC069184 MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI L&T REALTY FZE SUBSIDIARY 100.00 Section 2(87)(ii) 68 LARSEN & TOUBRO SUBSIDIARY U45206TN2013PLC093395 Subsidiary/ Associate Holding/ Company CIN/GLN Address of the Company Sl. No Name of the 97.45 Section 2(87)(ii) SUBSIDIARY U45203TN2010PLC074501 MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI - 600089 TOLLWAY LIMITED L&T SAMAKHIALI GANDHIDHAM L&T RAJKOT-VADINAR 0 0 0.00 U02520TZ1989PTC002458 NO. 58-C, SIPCOT INDUSTRIAL COMPLEX, HOSUR, TAMIL NADU 635126 MAGTORQ PRIVATE LIMITED 8 50.00 Section 2(6) ASSOCIATE ASSOCIATE 28634 ASSOCIATE U28920MH1994PLC083035 49.00 Section 2(6) ASSOCIATE 600640 21.74 Section 2(6) 50.00 Section 2(6) ASSOCIATE 42.85 Section 2(6) GRAMEEN CAPITAL INDIA LIMITED % of Total Total Physical No. of Shares held at the beginning of the year Demat Category of Shareholders Category-wise Share Holding: 9 i) @@ The Company is under Liquidation # Under Process of Strike Off 23.87 Section 2(6) ASSOCIATE U65923MH2007PTC168721 402, 36 TURNER ROAD, BANDRA WEST, MUMBAI - 400050 IV. SHARE HOLDING PATTERN: U45205WB1999PTC090733 P. O. BOX 1362, DOHA, QATAR N M MARG, MUMBAI, MAHARASHTRA - 400001 % of Shares Applicable Section held 47.75 Section 2(87)(ii) 37 L&T HIMACHAL HYDROPOWER RAMA COTTAGE, KANLOG, SHIMLA-171001 SUBSIDIARY U40102HP2010PLC031697 100.00 Section 2(87)(ii) LIMITED 38 L&T HOUSING BRINDAVAN, PLOT NO. 177, U45200MH1994PLC259630 SUBSIDIARY U45203TN2008PLC069210 Subsidiary/ Associate Holding/ L&T HOUSE, BALLARD ESTATE, P. O. BOX 44357, DUBAI, UNITED ARAB EMIRATES KOHINOOR BUILDING, 105, PARK STREET, KOLKATA 700016 FLAT NO. 27, 5TH FLOOR, LARSEN & TOUBRO QATAR & HBK CONTRACTING LLC 7 LIMITED LARSEN & TOUBRO Sl. No Name of the Address of the Company CIN/GLN Company 36 L&T HALOL-SHAMLAJI TOLLWAY LIMITED MOUNT POONAMALLE ROAD, POST BOX NO. 979, MANAPAKKAM, CHENNAI - 600089 No. of Shares held at the end of the year Demat Physical Total % of Total Shares 0 0 0 e) Banks / Fl 0.00 0.00 0.00 0 0 0.00 0 0 0 d) Bodies Corp. 0 0 0 0 0 0 Sub-total (A) (1):- 0.00 0.00 0 0 0 0.00 0 0 0 f) Any Other.... 0.00 0.00 0.00 63.91 Section 2(87)(ii) 0.00 0 0.00 0 0 0 0.00 0 0.00 0 a) Individual/HUF (1) Indian A. Promoters year % Change during the Shares 0 b) Central Govt 0 0 0.00 0 0 0 State Govt (s) c) 0.00 0.00 0 0 0 0.00 0 0 0 N M MARG, MUMBAI, -2.09 Pledged/ encumbered Total Public Shareholding 805,985,103 1,346,555,636 25,057,564 831,042,667 25,170,775 1,371,726,411 59.30 823,116,585 97.88 1,358,498,666 21,291,129 844,407,714 21,404,127 1,379,902,793 60.20 0.90 98.37 0.49 |(B)=(B)(1)+ (B)(2) C. Shares held byCustodian 29,643,045 0 29,643,045 2.12 22,826,592 0 22,826,592 1.63 -0.49 for GDRS & ADRs Grand Total (A+B+C) 1,376,198,681 25,170,775 1,401,369,456 100.00 1,381,325,258 21,404,127 1,402,729,385 Sub-total (B)(2):- 100.00 Funds 0.08 0 0 0.00 0.00 Investor vii) IEPF 1,288,543 0 1,288,543 0.09 1,292,037 0 1,292,037 0.09 0.00 viii) Alternate Investment 1,730 0 1,730 0.00 1,115,268 0 1,115,268 0.08 0.00 (ii) Shareholding of Promoters SI % of total shares of the Company 1 At the beginning of the year 2 Date wise Increase / Decrease in 3 Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus / sweat equity etc): At the End of the year NIL NIL NIL NIL (iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs): Cumulative Shareholding SI. Name of the Share Holder Date No. Increase/ Reason Decrease in share during the Year No. of % of total Shares holding shares of the Company 1 No. of shares % of total shares of the Company Cumulative Shareholding during the year No. of shares Shareholders Name Shareholding at the beginning of the No. of Shares % of total Shares of the Company 1 Total NIL NIL LARSEN & TOUBRO year Shareholding at the end of the year %of Shares No. of Shares % of total 0 % of Shares the Company to total shares Pledged/ encumbered to total shares NIL NIL % change in share holding during the year (iii) Change in Promoters' Shareholding (please specify, if there is no change) SI. No. Shareholding at the beginning of the year Shares of LIFE INSURANCE CORPORATION OF INDIA 0.00 0 42,973 0.00 0.00 b) Individuals Individual 239,795,903 24,053,909 263,849,812 18.83 249,613,337 20,377,228 269,990,565 19.25 0.42 shareholders holding nominal share capital upto * 2 lakh ii) Individual 29,385,457 0 29,385,457 2.10 31,436,696 5 31,436,701 2.24 0.00 0.14 6.53 411,168 3,260 -0.01 0 0 0.00 0.00 540,570,533 113,211 540,683,744 38.58 535,382,081 112,998 535,495,079 38.18 -0.41 a) Bodies Corp. i) Indian 92,102,289 ii) Overseas 40,666 411,087 92,513,376 3,260 6.60 43,926 0.00 91,182,843 39,713 91,594,011 shareholders holding nominal share capital in excess of iv) Non-Residents 12,173,050 v) Trust 172,101,772 540,579 26,649 12,713,629 0.91 12,841,446 477,413 13,318,859 0.95 0.04 172,128,421 12.28 172,128,421 0 172,128,421 12.27 -0.01 vi) Qualified Foreign 0 Investors 0.28 18.63 261,343,131 2 lakh c) Others (specify) i) Directors & Relatives 1,421,590 ii) Foreign Nationals 547,173 375 21,705 1,421,965 0.10 1,576,520 568,878 0 0.04 257,126,930 0 257,126,930 18.35 547,173 261,343,131 350 21,705 0 1,576,870 0.11 0.01 568,878 0.04 0.00 iii) Foreign Portfolio Shareholding at the beginning of the Year 256589578 18.31 Date wise Increase / Decrease 25/05/2018 -582788 Transfer 55355344 3.95 in Shareholding during the year specifying the reasons for increase and decrease (e.g. allotment/ transfer/bonus/sweat etc.) 25/05/2018 6070 Transfer 55361414 3.95 01/06/2018 -323200 Transfer 55038214 3.93 01/06/2018 4842952 Transfer 59881166 4.27 08/06/2018 -5881000 Transfer 54000166 3.85 08/06/2018 3.99 4302 Transfer 55938132 18/05/2018 775 Transfer 56648285 4.04 04/05/2018 -233608 Transfer 56414677 4.03 04/05/2018 1047 Transfer 56415724 4.03 11/05/2018 -105376 Transfer 56310348 4.02 11/05/2018 2203 Transfer 56312551 4.02 18/05/2018 -428934 Transfer 55883617 3.99 54515 Transfer 54004468 3.85 15/06/2018 1268 Transfer 53699788 3.83 13/07/2018 101624 Transfer 53801412 3.84 20/07/2018 -25000 Transfer 53776412 3.84 20/07/2018 245 Transfer 53776657 3.84 27/07/2018 -5237 Transfer 53771420 3.84 27/07/2018 287608 Transfer 54059028 3.86 06/07/2018 3.83 53698520 -30122 Transfer -306000 Transfer 53698468 3.83 15/06/2018 853 Transfer 53699321 3.83 22/06/2018 -1180 Transfer 53698141 3.83 27/04/2018 22/06/2018 53729109 3.83 29/06/2018 -2658 Transfer 53726451 3.83 29/06/2018 2191 Transfer 53728642 3.83 06/07/2018 30968 Transfer 4.04 56647510 -3000 Transfer 249650573 17.80 and decrease (e.g. allotment/ transfer/bonus/sweat etc.) 15/03/2019 -3156652 Transfer 246493921 17.57 22/03/2019 -3167862 Transfer 243326059 17.35 29/03/2019 4762654 Transfer 248088713 17.69 29/03/2019 -1411581 Transfer 246677132 17.59 30/03/2019 -450 Transfer 246676682 17.59 -970666 Transfer 08/03/2019 specifying the reasons for increase 17.87 13/07/2018 -125 Transfer 256589453 18.31 27/07/2018 100 Transfer 256589553 18.30 27/07/2018 -100 Transfer 256589453 At the end of the year 18.30 1925 Transfer 256591378 18.30 Date wise Increase / Decrease in Shareholding during the year 07/09/2018 -1800 Transfer 256589578 18.30 31/12/2018 -5968339 Transfer 250621239 07/09/2018 0.06 246676682 137 56655340 4.04 06/04/2018 -278 | Transfer 56655062 4.04 06/04/2018 1560 Transfer 56656622 4.04 13/04/2018 -7498 | Transfer 56649124 4.04 13/04/2018 383 Transfer 56649507 4.04 20/04/2018 1003 Transfer 56650510 4.04 27/04/2018 5968 Transfer 01/04/2018 Shareholding at the beginning of the Year HDFC EQUITY FUND 138 ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 SI. No. Name of the Share Holder Date 2 L&T EMPLOYEES WELFARE FOUNDATION Shareholding at the beginning of the Year At the end of the year Increase/ Reason Decrease Cumulative Shareholding 17.59 during the Year in share holding shares of the Company 172128421 12.28 172128421 12.27 56649372 4.04 3 HDFC TRUSTEE CO LTD A/C No. of % of total Shares 901,140 i) 848,582 0 36,983,534 46,100 37,029,634 2.64 7,652,527 45,887 7,698,414 0.55 Banks / Fl c) 3,077,602 0 3,077,602 0.22 3,590,744 0 3,590,744 0.26 Central Govt b) 1.88 16.32 52,558 No. of Shares held at the end of the year % of Total Shares Demat Physical Total % of Total Shares year B Public Shareholding 1. Institutions a) Mutual Funds 202,331,530 13,878 202,345,408 14.44 228,916,062 13,878 228,929,940 0.04 d) % Change during the 0 675 294,374,841 20.99 -0.22 i) Flls Funds j) Foreign Venture Capital 294,374,166 State Govt(s) 2. Non-Institutions 0.00 962,363 0 52,558 1,014,921 0.07 0 0 Sub-total (B)(1):- 297,216,179 21.21 297,215,504 0 0 0.00 0 0 0 0.00 0.00 675 0 e) Venture Capital Funds 0.00 0 0 0.00 0 0 0.00 f) Insurance Companies 0 ICICI PRUDENTIAL CAPITAL Shareholding at the Date Increase/ Reason of the in share 20/04/2018 1.89 26422755 -768442 Transfer 13/04/2018 1.94 27191197 290 Transfer 13/04/2018 1.94 27190907 -1816468 Transfer 06/04/2018 Decrease 2.07 394557 Transfer 06/04/2018 beginning of the Year PROTECTION ORIENTED FUND 2.04 28612818 Company 5 shares Shares No. of % of total Cumulative Shareholding during the Year holding 29007375 Sl. Name of the Share Holder No. 22/02/2019 0.51 Shareholding at the beginning of the Year ADMINISTRATOR OF THE SPECIFIED UNDERTAKING OF THE UNIT TRUST OF INDIA 4 3.93 55081556 At the end of the year 3.93 55081556 -2862 Transfer 29/03/2019 3.93 55084418 16774 Transfer 35257393 22/03/2019 55067644 -3577 Transfer 22/03/2019 3.93 55071221 5649 Transfer 15/03/2019 3.93 55065572 -750 Transfer 15/03/2019 3.93 55066322 3.93 2.52 06/04/2018 100 Transfer 7138494 -100 Transfer 31/03/2019 0.51 7138594 -17702702 Transfer -603009 Transfer 1.77 24841296 1205458 Transfer 06/07/2018 and decrease (e.g. allotment/ transfer/bonus/sweat etc.) 1.69 23635838 -11621555 Transfer 15/06/2018 specifying the reasons for increase 2.52 35257393 50 Transfer 20/04/2018 in Shareholding during the year 2.52 35257343 -150 Transfer 06/04/2018 Date wise Increase / Decrease 2.52 35257493 LARSEN & TOUBRO 25819746 1.77 27/04/2018 22554381 -489438 Transfer 22/06/2018 1.64 23043819 7005 Transfer 22/06/2018 1.64 23036814 -10352 Transfer 1.61 15/06/2018 23047166 2306 Transfer 15/06/2018 transfer/bonus/sweat etc.) and decrease (e.g. allotment/ 1.64 23044860 -512790 Transfer 08/06/2018 specifying the reasons for increase 1.64 1.68 29/06/2018 32949982 53599434 2.22 31134660 -1466390 Transfer 13/07/2018 2.33 32601050 951526 Transfer 13/07/2018 2.26 10395601 Transfer 31649524 06/07/2018 2.49 34933462 2258730 Transfer 06/07/2018 2.33 32674732 -275250 Transfer 29/06/2018 2.35 -3283938 Transfer 23557650 4281 Transfer 08/06/2018 1.76 24692330 -154812 Transfer 11/05/2018 24847142 2510 Transfer 11/05/2018 1.77 24844632 -102641 Transfer 18/05/2018 04/05/2018 24947273 366 Transfer 04/05/2018 1.78 24946907 -872861 Transfer 27/04/2018 1.84 25819768 22 Transfer 1.78 2298 | Transfer 24694628 1.76 in Shareholding during the year 1.68 23553369 -304201 Transfer 01/06/2018 Date wise Increase / Decrease 1.70 23857570 805 Transfer 01/06/2018 1.70 23856765 -167988 Transfer 25/05/2018 3463 Transfer 1.71 24024753 423 Transfer 25/05/2018 1.71 24024330 -670298 Transfer 18/05/2018 1.84 08/03/2019 195625 Transfer 55062859 3.81 53424653 1468 Transfer 09/11/2018 3.81 53423185 1332 Transfer 02/11/2018 07/09/2018 -142600 Transfer 16/11/2018 53456834 07/09/2018 734 Transfer 53457568 3.81 14/09/2018 -302441 Transfer 53155127 3.79 14/09/2018 2656 Transfer 3.81 53157783 1541 Transfer 3.81 507987 Transfer 14/12/2018 3.79 53105302 25636 Transfer 07/12/2018 3.79 53079666 1702 Transfer 30/11/2018 53426194 3.79 -130000 Transfer 30/11/2018 3.79 53207964 6770 Transfer 23/11/2018 3.79 53201194 -225000 Transfer 23/11/2018 53077964 53613289 3.79 -25000 Transfer transfer/bonus/sweat etc.) 12/10/2018 -40000 Transfer 53425227 3.81 12/10/2018 9533 Transfer 53434760 3.81 19/10/2018 and decrease (e.g. allotment/ 4372 Transfer 3.81 26/10/2018 12839 Transfer 53451971 3.81 02/11/2018 -30118 Transfer 53421853 3.81 4508 Transfer 53439132 21/09/2018 3.81 388091 Transfer 53132783 3.79 21/09/2018 5987 Transfer 53138770 3.79 28/09/2018 -275385 Transfer 52863385 3.77 53465227 Date wise Increase / Decrease 623751 Transfer 53487136 3.81 in Shareholding during the year 05/10/2018 -410000 Transfer 53077136 3.79 specifying the reasons for increase 05/10/2018 28/09/2018 3.82 21/12/2018 -25000 Transfer 3.84 53834073 -118 Transfer 08/02/2019 Date wise Increase / Decrease 3.84 53834191 3329 Transfer 01/02/2019 3.84 in Shareholding during the year 53830862 01/02/2019 3.84 53866487 25/01/2019 3.83 53670862 -50000 Transfer 25/01/2019 3.83 53720862 -35625 Transfer 2358 Transfer 08/02/2019 53837842 -1052 Transfer 08/03/2019 3.93 55063911 201483 Transfer 01/03/2019 3.91 54862428 5607 Transfer 22/02/2019 3769 Transfer transfer/bonus/sweat etc.) 54856821 1020483 Transfer 15/02/2019 and decrease (e.g. allotment/ 3.84 53836338 -1504 Transfer 15/02/2019 specifying the reasons for increase 3.84 3.91 18/01/2019 3.82 3.83 No. Increase/ Reason Date Name of the Share Holder SI. ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 140 139 3.82 53591494 Decrease 2642 Transfer 3.82 53588852 -1965 Transfer 28/12/2018 3.82 53590817 2528 Transfer 21/12/2018 3.82 53588289 28/12/2018 Cumulative Shareholding during the Year No. of % of total Shares shares 53718504 88631 Transfer 11/01/2019 3.82 53629873 -100000 Transfer 11/01/2019 3.83 53729873 12285 Transfer 04/01/2019 3.83 53717588 -75128 Transfer 04/01/2019 3.84 53792716 201222 Transfer 31/12/2018 Company holding of the in share 3.93 31/08/2018 1.76 53594926 -377775 Transfer 26155387 1.87 28/12/2018 228051 Transfer 26383438 1.88 31/12/2018 8955 Transfer 26392393 21/12/2018 1.88 -612385 Transfer 25780008 1.84 11/01/2019 55321 Transfer 25835329 1.84 Date wise Increase / Decrease 18/01/2019 -224797 Transfer 04/01/2019 25610532 1.89 566 Transfer 1.85 30/11/2018 -15024 Transfer 25991831 1.85 LARSEN & TOUBRO Sl. Name of the Share Holder No. Date Increase/ Reason Decrease 26533162 Cumulative Shareholding during the Year shares in share of the holding Company 07/12/2018 540765 Transfer 26532596 1.89 14/12/2018 No. of % of total Shares 26006855 1.83 25/01/2019 -1489240 Transfer 25718587 1.83 15/03/2019 -695458 Transfer 25023129 1.78 22/03/2019 32141 Transfer 25055270 08/03/2019 1.79 22146 Transfer 25077416 1.79 At the end of the year 25077416 1.79 7 GENERAL INSURANCE CORPORATION OF INDIA Shareholding at the 24700000 1.76 29/03/2019 in Shareholding during the year 1.94 329275 Transfer 214082 Transfer 25824614 1.84 specifying the reasons for increase 01/02/2019 732818 Transfer 26557432 1.89 and decrease (e.g. allotment/ transfer/bonus/sweat etc.) 08/02/2019 27207827 420151 Transfer 1.92 15/02/2019 34022 Transfer 27011605 1.93 22/02/2019 -133053 Transfer 26878552 1.92 01/03/2019 26977583 17967 Transfer 30/11/2018 1.85 25798087 1.84 in Shareholding during the year 24/08/2018 -1274521 Transfer 24523566 1.75 specifying the reasons for increase and decrease (e.g. allotment/ transfer/bonus/sweat etc.) 31/08/2018 217008 Transfer -24160 Transfer 24740574 31/08/2018 -207851 Transfer 24532723 1.75 07/09/2018 -144535 Transfer 24388188 1.74 14/09/2018 -233481 Transfer 1.76 24154707 17/08/2018 1.84 391713 Transfer 25564376 1.82 20/07/2018 97681 Transfer 25662057 1.83 27/07/2018 185046 Transfer 25847103 Date wise Increase / Decrease 1.84 245584 Transfer 26092687 1.86 03/08/2018 -83848 Transfer 26008839 1.86 10/08/2018 -186592 Transfer 25822247 03/08/2018 1.72 21/09/2018 -68326 Transfer -9927 Transfer 25803453 1.84 02/11/2018 1179585 Transfer 26983038 1.92 02/11/2018 -1047765 Transfer 25935273 26/10/2018 1.85 144637 Transfer 26079910 1.86 16/11/2018 -54896 Transfer 26025014 1.86 23/11/2018 -36126 Transfer 25988888 09/11/2018 1.84 25813380 252528 Transfer 24086381 1.72 28/09/2018 89491 Transfer 24175872 1.72 28/09/2018 -1921 Transfer 24173951 1.72 05/10/2018 916421 Transfer 25090372 1.79 12/10/2018 1813815 Transfer 26904187 1.92 12/10/2018 -1343335 Transfer 25560852 1.82 19/10/2018 beginning of the Year 3.82 06/04/2018 24690000 32277232 170309 Transfer 29/03/2019 2.29 32106923 -266 Transfer 22/03/2019 2.29 32107189 333988 Transfer 2.30 22/03/2019 31773201 1635337 Transfer 15/03/2019 PENSION FUND SCHEME E - TIER NPS TRUST- A/C KOTAK Date wise Increase / Decrease in Shareholding during the year specifying the reasons for increase and decrease (e.g. allotment/ transfer/bonus/sweat etc.) 9 of the Company holding in share 2.27 shares At the end of the year 2.30 30825 Transfer 04/05/2018 0.87 12158375 17064 Transfer 27/04/2018 0.87 12141311 5850 Transfer 20/04/2018 32277232 0.87 33974 Transfer 13/04/2018 0.86 12101487 95745 Transfer 06/04/2018 beginning of the Year 0.86 12005742 Shareholding at the 12135461 12189200 during the Year No. of % of total Shares Decrease 2235 Transfer 53912446 3.85 17/08/2018 -40000 Transfer 53872446 3.84 17/08/2018 1690 Transfer 53874136 10/08/2018 3.84 -170000 Transfer 53704136 3.83 24/08/2018 634 Transfer 53704770 3.83 20/07/2018 31/08/2018 -109844 Transfer 24/08/2018 Cumulative Shareholding 3.85 -100016 Transfer Increase/ Reason LARSEN & TOUBRO Sl. Name of the Share Holder No. Date Increase/ Reason Decrease in share Cumulative Shareholding during the Year No. of % of total Shares shares 53910211 of the Company 03/08/2018 -50000 Transfer 54009028 3.85 03/08/2018 1199 Transfer 54010227 3.85 10/08/2018 holding 0.87 11/05/2018 38357 Transfer 28672 Transfer 14/09/2018 0.92 12940946 60838 Transfer 07/09/2018 0.92 12880108 37653 Transfer 31/08/2018 12969618 0.92 -1000 Transfer 24/08/2018 0.92 12843455 66318 Transfer 24/08/2018 0.91 12777137 46386 Transfer 17/08/2018 12842455 0.91 0.93 13365 Transfer 0.98 13681765 105156 Transfer 26/10/2018 0.97 13576609 160800 Transfer 19/10/2018 0.96 13415809 21/09/2018 193356 Transfer 0.94 13222453 211218 Transfer 05/10/2018 0.93 13011235 28252 Transfer 28/09/2018 0.93 12982983 12/10/2018 12730751 154086 Transfer 10/08/2018 0.88 12305921 12300 Transfer 22/06/2018 0.88 12293621 38328 Transfer 15/06/2018 0.87 12255293 29/06/2018 18049 Transfer 0.87 12237244 512 Transfer 01/06/2018 0.87 12236732 9175 Transfer 18/05/2018 0.87 12227557 08/06/2018 104277 Transfer 12410198 0.89 0.90 12576665 5755 Transfer 03/08/2018 0.90 12570910 32995 Transfer 27/07/2018 specifying the reasons for increase and decrease (e.g. allotment/ transfer/bonus/sweat etc.) 0.89 12537915 73092 Transfer 20/07/2018 in Shareholding during the year 0.89 12464823 44343 Transfer 13/07/2018 Date wise Increase / Decrease 0.89 12420480 10282 Transfer 06/07/2018 -10000 Transfer 598730 Transfer 24339714 2.26 1.94 27233418 77711 Transfer 09/11/2018 1.94 27155707 -20002 Transfer 02/11/2018 1.94 27175709 16/11/2018 53684 Transfer 1.93 27122025 120362 Transfer 26/10/2018 1.93 27001663 63501 Transfer 19/10/2018 1.92 26938162 02/11/2018 2163979 Transfer 135537 Transfer 1.95 21588 Transfer 14/12/2018 2.00 28046174 31733390 07/12/2018 2.00 28064178 244363 Transfer 07/12/2018 27368955 1.98 274699 Transfer 30/11/2018 1.96 27545116 217940 Transfer 23/11/2018 1.95 27327176 -41779 Transfer 16/11/2018 27819815 28067762 12/10/2018 24774183 21/09/2018 1.75 24583345 -3468 Transfer 14/09/2018 1.75 24586813 145943 Transfer 14/09/2018 1.74 120331 Transfer 24440870 07/09/2018 1.74 24441003 161822 Transfer 07/09/2018 1.73 24279181 -1107 Transfer 31/08/2018 1.73 -133 Transfer 1.77 24703676 LARSEN & TOUBRO 89332 Transfer 05/10/2018 1.76 24684851 -21653 Transfer 28/09/2018 1.76 24706504 2828 Transfer 28/09/2018 1.76 Company of the shares No. of % of total Shares during the Year Cumulative Shareholding in share Decrease Increase/ Reason Date Sl. Name of the Share Holder No. holding 24280288 2.00 -69999 Transfer 600002 Transfer 22/02/2019 2.04 28589887 -635646 Transfer 15/02/2019 2.08 29225533 28442 Transfer 15/02/2019 29189889 2.08 -2050 Transfer 08/02/2019 2.08 29199141 160106 Transfer 08/02/2019 2.07 29039035 -26625 Transfer 01/02/2019 29197091 2.07 2.08 264523 Transfer 1.80 13/07/2018 Date Name of the Share Holder SI. No. ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 148 147 2.15 30137864 01/03/2019 -5618 Transfer 2.15 30143482 723837 Transfer 08/03/2019 2.10 29419645 -34767 Transfer 01/03/2019 2.10 29454412 08/03/2019 14/12/2018 29065660 01/02/2019 28137708 30027 Transfer 31/12/2018 transfer/bonus/sweat etc.) and decrease (e.g. allotment/ 2.00 28107681 -26272 Transfer 28/12/2018 specifying the reasons for increase 2.01 2.01 49178 Transfer 28/12/2018 in Shareholding during the year 2.00 28084775 87012 Transfer 21/12/2018 Date wise Increase / Decrease 2.00 27997763 28133953 183860 Transfer 04/01/2019 28317654 2.06 28881800 -157 Transfer 25/01/2019 2.06 28881957 172860 Transfer 25/01/2019 2.05 28709097 179946 Transfer -418 Transfer 2.05 28709515 18/05/2018 159234 Transfer 18/01/2019 2.04 28550281 232627 Transfer 11/01/2019 2.02 18/01/2019 201011 Transfer 31/08/2018 1.72 Decrease Increase/ Reason No. Date Name of the Share Holder SI. ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 146 145 45 Cumulative Shareholding 1.74 At the end of the year 1.74 24400000 100000 Transfer 08/02/2019 1.73 24300000 -135000 Transfer 21/12/2018 1.74 24400000 24435000 during the Year in share holding 309199 Transfer 20/04/2018 1.55 21659395 1028656 Transfer 13/04/2018 1.47 20630739 -2979 Transfer 06/04/2018 No. of % of total Shares 1.47 134030 Transfer 06/04/2018 1.46 20499688 Company of the shares Shareholding at the beginning of the Year SBI - ETF SENSEX 8 20633718 21968594 -10000 Transfer 1.74 30000 Transfer 24/08/2018 Date wise Increase / Decrease in Shareholding during the year specifying the reasons for increase 1.77 24758076 20000 Transfer 17/08/2018 1.76 24738076 25213 Transfer 24788076 10/08/2018 24712863 2918 Transfer 27/07/2018 1.76 24709945 25000 Transfer 13/07/2018 1.76 24684945 -5055 Transfer 1.76 14/12/2018 1.77 5000 Transfer 24445000 -155000 Transfer 07/12/2018 1.75 24600000 -305539 Transfer 30/11/2018 1.78 24905539 27463 Transfer 12/10/2018 02/11/2018 24878076 60000 Transfer 26/10/2018 and decrease (e.g. allotment/ transfer/bonus/sweat etc.) 1.77 24818076 25000 Transfer 19/10/2018 1.77 24793076 1.77 1.57 20/04/2018 -9900 Transfer 27/07/2018 1.68 23572560 109883 Transfer 27/07/2018 1.67 23462677 83293 Transfer 20/07/2018 1.67 -168 Transfer 23379384 13/07/2018 and decrease (e.g. allotment/ transfer/bonus/sweat etc.) 1.67 23380855 100148 Transfer 13/07/2018 specifying the reasons for increase 1.66 23280707 99892 Transfer -1471 Transfer 06/07/2018 23572392 03/08/2018 24079277 108278 Transfer 24/08/2018 1.71 23970999 40351 Transfer 17/08/2018 1.71 23930648 -4 Transfer 1.68 10/08/2018 23930652 117685 Transfer 10/08/2018 1.70 23812967 -15344 Transfer 03/08/2018 1.70 23828311 255919 Transfer 1.71 in Shareholding during the year 1.65 23180815 1.61 22560946 86034 Transfer 25/05/2018 1.60 22474912 129974 Transfer 18/05/2018 1.59 22344938 01/06/2018 158200 Transfer 1.58 22186738 96004 Transfer 04/05/2018 1.58 22090734 132040 Transfer 27/04/2018 1.57 21958694 11/05/2018 95095 Transfer 22656041 1.62 -70108 Transfer 29/06/2018 Date wise Increase / Decrease 1.66 23250923 56921 Transfer 29/06/2018 1.65 23194002 -50541 Transfer 22/06/2018 1.66 23244543 346851 Transfer 22/06/2018 1.63 22897692 81149 Transfer 15/06/2018 1.63 22816543 160502 Transfer 08/06/2018 25172663 450741 Transfer -18004 Transfer 1.76 1.80 02/11/2018 2992 Transfer 25298571 1.80 02/11/2018 -734217 Transfer 24564354 1.75 09/11/2018 25295579 885 Transfer 1.75 09/11/2018 -227298 Transfer 24337941 1.74 16/11/2018 1773 Transfer 1.74 16/11/2018 -699136 Transfer 24565239 23640578 -809340 Transfer 1.86 Date wise Increase / Decrease 12/10/2018 2467 Transfer 25191747 1.80 in Shareholding during the year 12/10/2018 -450 Transfer 25191297 1.80 26/10/2018 specifying the reasons for increase and decrease (e.g. allotment/ transfer/bonus/sweat etc.) 413671 Transfer 25604968 1.83 19/10/2018 -206250 Transfer 25398718 1.81 26/10/2018 706201 Transfer 26104919 19/10/2018 1.80 1.69 13359 Transfer 14/12/2018 -336664 Transfer 23059861 1.64 21/12/2018 2328 Transfer 23062189 1.64 LARSEN & TOUBRO Sl. Name of the Share Holder No. 1.67 Date Decrease Cumulative Shareholding during the Year No. of % of total Shares shares in share of the holding Company Increase/ Reason 23/11/2018 23396525 14/12/2018 23653937 1.69 23/11/2018 -71502 Transfer 23582435 1.68 30/11/2018 305852 Transfer 23888287 1.70 3893 Transfer 30/11/2018 23394263 1.67 07/12/2018 8603 Transfer 23402866 1.67 07/12/2018 -10234 Transfer 23392632 1.67 -494024 Transfer 21/12/2018 25189280 05/10/2018 Name of the Share Holder Date Increase/ Reason No. Decrease Cumulative Shareholding during the Year No. of % of total Shares shares in share holding of the Company SI. 10/08/2018 26139041 1.86 17/08/2018 576 Transfer 26139617 1.86 17/08/2018 -237596 Transfer 25902021 1.85 -172561 Transfer 24/08/2018 ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 141 20/07/2018 -801923 Transfer 30931467 2.21 27/07/2018 85789 Transfer 31017256 2.21 27/07/2018 -1957396 Transfer 142 29059860 03/08/2018 03/08/2018 10/08/2018 66888 Transfer -2815768 Transfer 622 Transfer 29126748 2.08 26310980 1.88 26311602 1.88 2.07 -313777 Transfer 364619 Transfer 1.87 24624272 1.76 21/09/2018 106189 Transfer 24730461 1.76 21/09/2018 -6030 Transfer 24724431 1.76 -93375 Transfer 28/09/2018 25296102 1.80 28/09/2018 -26189 Transfer 25269913 06/07/2018 05/10/2018 233144 Transfer 25503057 1.82 571671 Transfer 26266640 14/09/2018 24717647 24/08/2018 -366218 Transfer 25900422 1.85 31/08/2018 1492 Transfer 25901914 1.85 31/08/2018 -1112624 Transfer 1.76 24789290 07/09/2018 1243 Transfer 24790533 1.77 07/09/2018 -121574 Transfer 24668959 1.76 14/09/2018 48688 Transfer 1.77 -46408 Transfer 1.80 1.64 308760 Transfer 26082123 1.86 13/04/2018 96947 Transfer 26179070 1.87 specifying the reasons for increase 20/04/2018 -24835 Transfer 06/04/2018 26154235 and decrease (e.g. allotment/ transfer/bonus/sweat etc.) 27/04/2018 8994 Transfer 26163229 1.87 27/04/2018 -142580 Transfer 26020649 1.86 143 1.87 144 Date wise Increase / Decrease in Shareholding during the year 25773363 2.39 22/03/2019 10232 Transfer 33495615 2.39 22/03/2019 -1438021 Transfer 32057594 2.29 29/03/2019 1.84 422765 Transfer 2.32 29/03/2019 -127676 Transfer 32352683 2.31 6 ICICI PRUDENTIAL LIFE INSURANCE COMPANY LIMITED At the end of the year Shareholding at the beginning of the Year 32321704 2.30 32480359 33485383 ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 Date 24960131 1.78 01/06/2018 -35189 Transfer 24924942 1.78 08/06/2018 -77974 Transfer 24846968 1.77 189742 Transfer 15/06/2018 25095306 1.79 22/06/2018 -293855 Transfer 24801451 1.77 29/06/2018 -79529 Transfer 24721922 23015781 248338 Transfer SI. No. 01/06/2018 24770389 Increase/ Reason Decrease Cumulative Shareholding during the Year No. of % of total Shares shares in share holding of the Company 04/05/2018 -19068 Transfer 1.77 26001581 11/05/2018 -499160 Transfer 25502421 1.82 18/05/2018 -222434 Transfer 25279987 1.80 25/05/2018 -509598 Transfer 1.86 -1311973 Transfer Name of the Share Holder 2.48 23051711 1.64 11/01/2019 -4994 Transfer 23046717 1.64 18/01/2019 458538 Transfer 23505255 1.68 11/01/2019 25/01/2019 23541084 1.68 25/01/2019 -34220 Transfer 23506864 1.68 01/02/2019 2798 Transfer 23509662 1.68 35829 Transfer Date wise Increase / Decrease 1.64 -3438 | Transfer 28/12/2018 15/03/2019 135405 Transfer 23151186 1.65 28/12/2018 -95007 Transfer 23056179 1.64 31/12/2018 23050600 533 Transfer 1.64 31/12/2018 -4570 Transfer 23052142 1.64 04/01/2019 1896 Transfer 23054038 1.64 04/01/2019 23056712 01/02/2019 1111 Transfer 22283280 22/02/2019 -6720 Transfer 39548518 2.82 01/03/2019 3011204 Transfer 42559722 3.03 -11545250 Transfer 31014472 2.21 08/03/2019 4326497 Transfer 35340969 2.52 08/03/2019 -545533 Transfer 34795436 2.48 15/03/2019 -1226382 Transfer 1920 Transfer 34797356 2.82 39555238 01/03/2019 in Shareholding during the year 1.59 17692189 Transfer 08/02/2019 1991 Transfer 22285271 1.59 08/02/2019 -373282 Transfer 21911989 1.56 and decrease (e.g. allotment/ specifying the reasons for increase 225021 Transfer 22137010 1.58 transfer/bonus/sweat etc.) 15/02/2019 -273961 Transfer 21863049 15/02/2019 1.56 22/02/2019 13/04/2018 20/04/2018 specifying the reasons for increase 1.04 14630785 14970785 13/04/2018 1.07 165486 Transfer 18000 Transfer -340000 Transfer 14648785 14821381 and decrease (e.g. allotment/ transfer/bonus/sweat etc.) 27/04/2018 20/04/2018 -44404 Transfer 14604381 1.04 27/04/2018 217000 Transfer 1.06 Date wise Increase / Decrease in Shareholding during the year 1.05 1.06 1.07 -843 Transfer 24840 Transfer 15/03/2019 -64368 Transfer 14980075 22/03/2019 90306 Transfer 15070381 1.07 29/03/2019 40959 Transfer 15111340 14805299 1.08 15111340 1.08 10 RELIANCE CAPITAL TRUSTEE CO LTD Shareholding at the beginning of the Year 14776397 1.05 06/04/2018 29745 Transfer 14806142 1.06 06/04/2018 At the end of the year 14757013 207073 Transfer 149 15036052 1.07 18/05/2018 69492 Transfer 15105544 1.08 18/05/2018 -45668 Transfer 15059876 1.07 25/05/2018 -46372 Transfer 309632 Transfer 1.10 25/05/2018 -606 Transfer 15368902 1.10 01/06/2018 15575975 1.11 01/06/2018 1.07 -62000 Transfer 15369508 1.05 11/05/2018 15082424 150 ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 SI. No. Name of the Share Holder Date Increase/ Reason Decrease Cumulative Shareholding during the Year No. of % of total Shares shares in share 1.08 of the Company 04/05/2018 701767 Transfer 15458780 1.10 04/05/2018 -581523 Transfer 14877257 1.06 11/05/2018 205167 Transfer holding 14955235 No. of % of total Shares 08/03/2019 0.98 30/11/2018 -5250 Transfer 13781988 0.98 07/12/2018 -3150 Transfer 13778838 0.98 14/12/2018 80231 Transfer 13787238 13859069 14/12/2018 -140 | Transfer 13858929 0.99 21/12/2018 79586 Transfer 13938515 0.99 28/12/2018 128450 Transfer 14066965 0.99 1.00 1211 Transfer 0.98 15513975 LARSEN & TOUBRO Sl. Name of the Share Holder No. Date Increase/ Reason Decrease in share Cumulative Shareholding during the Year shares of the 30/11/2018 holding 02/11/2018 109941 Transfer 13791706 0.98 16/11/2018 5100 Transfer 13796806 0.98 16/11/2018 -10779 Transfer 13786027 Company 28/12/2018 -65000 Transfer 14001965 25/01/2019 228152 Transfer 14470123 1.03 01/02/2019 76600 Transfer 14546723 1.04 08/02/2019 27412 Transfer 14574135 1.02 1.04 146773 Transfer 14720908 1.05 22/02/2019 93135 Transfer 14814043 1.06 01/03/2019 32600 Transfer 14846643 1.06 15/02/2019 14241971 53860 Transfer 18/01/2019 1.00 31/12/2018 63350 Transfer 14065315 1.00 Date wise Increase / Decrease 31/12/2018 -584 | Transfer 14064731 1.00 in Shareholding during the year 04/01/2019 27000 Transfer 14091731 1.00 specifying the reasons for increase 04/01/2019 -2000 Transfer 14089731 1.00 and decrease (e.g. allotment/ transfer/bonus/sweat etc.) 11/01/2019 98380 Transfer 14188111 1.01 108592 Transfer 1.11 10191.57 345031 Transfer -40000 Transfer 22/03/2019 0.90 12673278 -51525 Transfer 15/03/2019 12633278 0.91 -124000 Transfer 08/03/2019 specifying the reasons for increase and decrease (e.g. allotment/ transfer/bonus/sweat etc.) 0.92 12848803 -200000 Transfer 12724803 01/03/2019 0.90 -185000 Transfer At the Beginning of the year No. of % of total shares Shares of the Company 0.03 Shareholding at the beginning of the year A. M. NAIK 1 Name of Director / KMP 29/03/2019 No. (v) Shareholding of Directors and Key Managerial Personnel: 0.89 12448278 At the end of the year 0.89 12448278 SI. | in Shareholding during the year 0.93 13048803 in share Decrease Increase/ Reason Date Sl. Name of the Share Holder No. LARSEN & TOUBRO Cumulative Shareholding 0.95 -59294 Transfer 25/01/2019 0.95 13377603 -8000 Transfer 31/08/2018 13318309 during the Year No. of % of total Shares shares -100000 Transfer 22/02/2019 Date wise Increase / Decrease 0.94 13148803 -153800 Transfer 08/02/2019 0.95 *Principal amount mentioned includes interest due but not paid and interest accrued but not due. ^ Addition during the financial year includes interest accrued but not due. 13302603 -15706 Transfer 01/02/2019 Company holding of the 424,958 0.95 Cumulative Shareholding during the year % of total Shares % of total No. of shares during the year Cumulative Shareholding 15,000 ESOP exercise of the Company of the Company 0.01 Shareholding at the beginning of the year % of total Shares Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/ sweat equity etc): M. M. CHITALE 8 Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/ sweat equity etc): J. D. PATIL No. of shares Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/ sweat equity etc): At the beginning of the year 11-Aug-18 At the End of the year 172,260 0.00 64,312 At the End of the year As on the date of appointment as director 0.00 64,312 75,125 0.00 At the End of the year At the beginning of the year 0.00 46,054 At the beginning of the year 0.01 90,125 46,054 M. V. SATISH Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/ sweat equity etc): D. K. SEN 0.02 213,084 0.03 424,958 At the End of the year At the End of the year At the beginning of the year 11-Aug-18 52,500 ESOP exercise At the end of the year At the beginning of the year 11-Aug-18 S. N. SUBRAHMANYAN Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment transfer / bonus/ sweat equity etc): Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc); 3 2 of the Company Shares R. SHANKAR RAMAN Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/ sweat equity etc): 265,584 0.02 306,000 22,500 7 6 5 Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): SHAILENDRA N. ROY Name of Director / KMP 4 No. SI. ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 154 153 0.02 328,500 0.02 ESOP exercise No. of shares 13385603 -9000 Transfer 24/08/2018 17489235 61697 Transfer 01/03/2019 specifying the reasons for increase 1.24 17427538 1.25 -12719 Transfer in Shareholding during the year 1.24 17440257 245252 Transfer 22/02/2019 Date wise Increase / Decrease 22/02/2019 1.23 and decrease (e.g. allotment/ -90 Transfer 17954863 950 Transfer 15/03/2019 1.28 17953913 -223 Transfer 01/03/2019 08/03/2019 17954136 464991 Transfer 08/06/2018 transfer/bonus/sweat etc.) 1.25 17489145 1.28 17195005 -270655 Transfer 15/02/2019 01/02/2019 1.29 18035958 7939 Transfer 25/01/2019 1.29 20117 Transfer 18028019 18/01/2019 Company holding of the in share shares -17549 Transfer 18056075 1.29 01/02/2019 1.25 17465660 414242 Transfer 15/02/2019 1.22 17051418 -661396 Transfer 08/02/2019 1.26 17712814 8372 Transfer 08/02/2019 1.26 17704442 -351633 Transfer 1.28 15/03/2019 -113336 Transfer 17841527 0.97 13560609 -36000 Transfer 20/04/2018 0.97 13596609 27/04/2018 0.93 At the end of the year Shareholding at the beginning of the Year 0.93 13077063 -250000 Transfer 29/03/2019 0.95 13077063 -64000 Transfer 13496609 0.96 transfer/bonus/sweat etc.) 0.96 13394603 -3000 Transfer 22/06/2018 specifying the reasons for increase and decrease (e.g. allotment/ 0.96 13397603 -30000 Transfer 08/06/2018 0.96 13427603 -69006 Transfer 01/06/2018 Date wise Increase / Decrease in Shareholding during the year 13327063 0.01 -90000 Transfer 0.96 29/03/2019 1.41 19735173 1721273 Transfer 29/03/2019 1.28 -5059 Transfer 18013900 22/03/2019 1.29 18159125 317598 Transfer 22/03/2019 1.27 -145225 Transfer 19730114 1.41 11 13417063 -810725 Transfer 15/03/2019 1.01 14227788 -150103 Transfer 08/03/2019 1.03 14377891 1.41 19730114 At the end of the year Shareholding at the beginning of the Year 12 THE NEW INDIA ASSURANCE COMPANY LIMITED Date wise Increase / Decrease in Shareholding during the year specifying the reasons for increase and decrease (e.g. allotment/ transfer/bonus/sweat etc.) NOMURA INDIA INVESTMENT FUND MOTHER FUND 22/03/2019 during the Year No. of % of total Shares 11-Sep-18 08-Oct-18 23 0.00 100 As on 28th May 2018 0.00 100 24 At the End of the year 100 At the beginning of the year ARVIND GUPTA jointly with ADMINISTRATOR OF THE 22 0.00 150 0.00 At the End of the year SPECIFIED UNDERTAKING OF THE UNIT TRUST OF INDIA HEMANT BHARGAVA jointly with LIFE 157 0.00 90 0.00 90 As on 28th May 2018 Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): 0.00 At the End of the year At the End of the year HEMANT BHARGAVA Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): OF INDIA INSURANCE CORPORATION 100 Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/ transfer / bonus/sweat equity etc): 0.00 150 No. of shares during the year Cumulative Shareholding of the Company % of total Shares No. of shares % of total Shareholding at the beginning of the year Name of Director / KMP No. SI. 0.00 150 At the End of the year LARSEN & TOUBRO Shares of the Company 20 At the beginning of the year NAINA LAL KIDWAI 21 0.01 94,650 At the End of the year ESOP exercise ESOP exercise 31,500 31,500 05-Apr-18 25-Jan-19 Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): 0.00 31,650 At the beginning of the year SUBRAMANIAN SARMA 158 0.00 ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 SI. No. 365.09 5.90 Exchange gain/(loss) 19853.07 (20593.49) 15111.71 (15345.60) (5247.89) 370.99 Reduction Addition^ financial year Change in Indebtedness during the 10561.00 10035.83 525.17 4741.36 Total (i+ii+iii) Interest accrued but not due (500.63) 10167.03 24.54 Total (i+ii+iii) iii) Interest accrued but not due* ii) Interest due but not paid* 10191.57 Net change 10167.03 Principal Amount* i) financial year Indebtedness at the end of the (369.43) 131.20 24.54 iii) Interest accrued but not due* ii) Interest due but not paid* 10561.00 34,710 At the beginning of the year N. HARIHARAN 25 of the of the Company Company 0.00 Shares No. of shares during the year Cumulative Shareholding No. of shares Shareholding at the beginning of the year % of total Shares Name of Director / KMP % of total Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): INDEBTEDNESS 10035.83 525.17 Principal Amount* i) deposits Indebtedness crore Total Deposits Unsecured Loans Secured Loans excluding Indebtedness at the beginning of the financial year Indebtedness of the company including interest outstanding/accrued but not due for payment as on 31st March 2019 0.00 34,710 At the End of the year V. 150 At the beginning of the year 0.00 0.00 225 At the beginning of the year 0.00 1,125 At the End of the year At the End of the year 0.00 At the beginning of the year Company of the Company Shares % of total No. of shares 1,125 during the year 225 11 Date wise Increase / Decrease jointly with Life Insurance Corporation of India 0.00 225 At the beginning of the year SUSHOBHAN SARKER 0.00 12 1,327 At the End of the year 0.00 1,327 At the beginning of the year VIKRAM SINGH MEHTA Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment transfer / bonus/ sweat equity etc): 0.00 Cumulative Shareholding of the Shares 0.01 174,100 At the End of the year Market Purchase 500 Purchase At the beginning of the year Market Purchase Market 500 Market Purchase 500 23-Oct-18 340 2,443 0.00 At the End of the year % of total No. of shares Shareholding at the beginning of the year LARSEN & TOUBRO Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/ transfer / bonus/ sweat equity etc): M. DAMODARAN 10 Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/ sweat equity etc): SUBODH BHARGAVA 9 Name of Director / KMP No. SI. 0.00 2,443 in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): 13 ADIL ZAINULBHAI 14 Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): 18 17 0.00 4,500 At the beginning of the year SUNITA SHARMA jointly with LIFE INSURANCE CORPORATION OF INDIA Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): SANJEEV AGA 0.00 1,500 At the End of the year (e.g. allotment / transfer / bonus/sweat equity etc): Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease Company 0.00 16 THOMAS MATHEW T. Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): 19 AJAY SHANKAR 150 At the End of the year 0.00 150 At the beginning of the year 0.00 150 At the End of the year 0.00 150 At the beginning of the year 0.00 4,500 At the End of the year Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): 1,500 24-Sep-18 At the beginning of the year 15 At the beginning of the year 0.00 150 At the End of the year 0.00 150 7,680 At the beginning of the year Ceased as Director -225 02-May-18 Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer / bonus/sweat equity etc): AKHILESH GUPTA Date wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment / transfer/ bonus/sweat equity etc): At the End of the year 0.00 At the End of the year 7,680 of the Company Shares % of total No. of shares during the year Cumulative Shareholding of the No. of shares Shareholding at the beginning of the year % of total Shares Name of Director / KMP SI. No. ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 156 155 0.00 NARAYANAN KUMAR Cumulative Shareholding 08/03/2019 No. 16524005 1.18 28/09/2018 -505324 Transfer 16018681 1.14 05/10/2018 59126 Transfer 16077807 1.15 05/10/2018 -227706 Transfer 15850101 1.13 12/10/2018 65614 Transfer 15915715 1.14 12/10/2018 -126402 Transfer 15789313 1.13 19/10/2018 267198 Transfer 28/09/2018 1.16 16256807 1.17 LARSEN & TOUBRO Sl. Name of the Share Holder No. Date Increase/ Reason Decrease in share Cumulative Shareholding during the Year No. of % of total Shares 579218 Transfer shares of the Company 14/09/2018 -282 Transfer 16360512 1.17 21/09/2018 1341 Transfer 16361853 1.17 21/09/2018 -105046 Transfer holding 16368531 1.17 19/10/2018 16/11/2018 15561 Transfer 18204512 1.30 in Shareholding during the year 16/11/2018 -85258 Transfer 18119254 1.29 specifying the reasons for increase 23/11/2018 Date wise Increase / Decrease 111 Transfer 1.29 and decrease (e.g. allotment/ transfer/bonus/sweat etc.) 23/11/2018 -132502 Transfer 17986863 1.28 30/11/2018 215191 Transfer 18202054 1.30 18119365 16360794 1.30 -112 Transfer -2765 Transfer 16365766 1.17 26/10/2018 433025 Transfer 16798791 Decrease 26/10/2018 -413 | Transfer 16798378 1.20 18188951 02/11/2018 17841688 1.27 02/11/2018 -27 Transfer 17841661 1.27 09/11/2018 347402 Transfer 18189063 1.30 09/11/2018 1043310 Transfer 9316 Transfer 14/09/2018 1.17 -80051 Transfer 15151514 1.08 in Shareholding during the year 06/07/2018 288501 Transfer 15440015 1.10 specifying the reasons for increase and decrease (e.g. allotment/ transfer/bonus/sweat etc.) 06/07/2018 -287831 Transfer 29/06/2018 15152184 13/07/2018 8496 Transfer 15160680 1.08 13/07/2018 -143567 Transfer 15017113 1.07 20/07/2018 92100 Transfer 15109213 1.08 1.08 Date wise Increase / Decrease 15231565 15859006 1.13 08/06/2018 -446448 Transfer 15412558 1.10 15/06/2018 98840 Transfer 15511398 1.11 15/06/2018 1.09 -354868 Transfer 1.08 22/06/2018 197369 Transfer 15353899 1.10 22/06/2018 -385157 Transfer 14968742 1.07 29/06/2018 262823 Transfer 15156530 30/11/2018 20/07/2018 15101718 1.13 24/08/2018 775144 Transfer 16661575 1.19 24/08/2018 -313132 Transfer 16348443 1.17 31/08/2018 378260 Transfer 15886431 16726703 31/08/2018 -380152 Transfer 16346551 1.17 07/09/2018 8008 Transfer 16354559 1.17 07/09/2018 -3081 Transfer 16351478 1.19 -7495 Transfer 4245 Transfer 1.13 1.08 27/07/2018 424630 Transfer 15526348 1.11 27/07/2018 -421 Transfer 15525927 1.11 03/08/2018 371783 Transfer 17/08/2018 15897710 03/08/2018 -3143 Transfer 15894567 1.13 10/08/2018 1649 Transfer 15896216 1.13 10/08/2018 -14030 Transfer 15882186 1.13 -236726 Transfer 1.20 14/12/2018 17709861 -734 Transfer 28/12/2018 1.26 17710595 43941 Transfer 28/12/2018 17666654 -263772 Transfer 21/12/2018 1.28 17930426 45771 Transfer 21/12/2018 1.28 17884655 -281375 Transfer 17965328 1.28 07/12/2018 73031 Transfer 18038359 1.29 1.26 07/12/2018 17947297 1.28 14/12/2018 218733 Transfer 18166030 1.30 -91062 Transfer 31/12/2018 1.26 17718813 -312758 Transfer 18045538 1.29 18/01/2019 30 Transfer 8952 Transfer 11/01/2019 1.29 152 ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 SI. Name of the Share Holder Date Increase/ Reason 151 1.31 18045568 389485 Transfer 18358296 1.26 31/12/2018 -534 Transfer 17718279 04/01/2019 271901 Transfer 17990180 1.26 1.28 04/01/2019 -21369 Transfer 17968811 1.28 11/01/2019 0.004 Details of Penalty/ Punishment/ Brief Section of the Companies Act Not Applicable 1.228 0.088 Description Compounding Compounding Penalty C. OTHER OFFICERS IN DEFAULT Compounding Punishment Penalty B. DIRECTORS Authority [RD/ NCLT/COURT] Punishment Punishment Compounding fees imposed Executive Directors may be granted stock options in subsidiary companies as per their Schemes and after taking necessary approvals. Perquisites may be added to the remuneration of concerned directors and considered in the limits applicable to the Company. NIL Penalty • Interim Dividend The final dividend is paid once for the financial year after the annual accounts are prepared. The Board of Directors of the Company has the power to recommend the payment of final dividend to the shareholders for their approval at the general meeting of the Company. The declaration of final dividend shall be included in the ordinary business items that are required to be transacted at the Annual General Meeting. . Final Dividend The Companies Act provides for two forms of Dividend: FORMS OF DIVIDENDS This Policy has been adopted by the Board of Directors of Larsen & Toubro Limited ('the Company') at its Meeting held on 22nd November, 2016. The Policy shall also be displayed in the annual reports and also on the website of the Company. AUTHORITY NIL The purpose of this Policy is to regulate the process of dividend declaration and its pay-out by the Company which would ensure a regular dividend income for the shareholders and long term capital appreciation for all stakeholders of the Company. As per Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, prescribed Listed Companies are required to frame a Dividend Distribution Policy. INTRODUCTION DIVIDEND DISTRIBUTION POLICY Annexure 'G' to the Board Report LARSEN & TOUBRO Details) Appeal made, if any (give NIL PURPOSE A. COMPANY SI. VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES: 1961 section 17(3) Income tax Act, (c) Profits in lieu of salary under Income-tax Act, 1961 (b) Value of perquisites u/s 17(2) (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 Gross salary 1 2 No. This form of dividend can be declared by the Board of Directors one or more times in a financial year as may be deemed fit by it. The Board of Directors shall have the absolute power to declare interim dividend during the financial year, in line with this policy. The Board should consider declaring an interim dividend after finalization of quarterly/ half yearly financial results. This would be in order to supplement the annual dividend or to reward shareholders in exceptional circumstances. C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD / MANAGER / WTD ANNEXURE TO THE BOARD REPORT I ANNUAL REPORT 2018-19 160 159 # Does not include the perquisite value related to ESOPs exercised during the year in respect of stock options granted over the past several years by Larsen & Toubro Infotech Limited and L&T Technology Services Limited of 213.39 crore. Paid to the institutions they represent * Particulars of Remuneration Type Stock Option Sweat Equity Not Applicable 1.136 Hariharan) Secretary (N. Total CFO Company CEO 3 Key Managerial Personnel Total Fund & Superannuation Fund) Others (Contribution to Provident | - others, specify... 5 - as % of profit Commission 4 crore QUANTUM OF DIVIDEND AND DISTRIBUTION Dividend payout in a particular year shall be determined after considering the operating and financial performance of the Company and the cash requirement for financing the Company's future growth. In line with the past practice, the payout ratio is expected to grow in accordance with the profitable growth of the Company under normal circumstances. Leverage profile and liabilities of the Company. Any other factor as deemed fit by the Board. RETAINED EARNINGS Dividend shall be declared or paid only out of- Senior Management Personnel designated as such by the Board; and Company Secretary; Chief Financial Officer; Whole-time directors; Chief Executive Officer or the Managing Director or the Manager; • • 2.5. Key Managerial Personnel means 2.2. Board means Board of Directors of the Company. 2.3. Directors mean Directors of the Company. 2.4. Executive Directors means the Executive Chairman if any, Chief Executive Officer and Managing Director, Deputy Managing Director, if any and Whole-time Directors. 2.1. Act means the Companies Act, 2013 or Companies Act, 1956 as may be applicable and Rules framed thereunder, as amended from time to time. DEFINITIONS: 2. Devising a policy on Board diversity; Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; Remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals; To ensure that level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully; To formulate the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnel and other employees; To identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal and shall specify the manner for effective evaluation of performance of Board, its Committees and individual directors to be carried out by the Board or the Nomination & Remuneration Committee or by an Independent External Agency and review its implementation and compliance; Such other officer as may be prescribed. 2.6. Senior Management Personnel means all members of management one level below the Executive Directors including the Chief Financial Officer and Company Secretary. Presently, persons in Sr. Vice President grade and F&A heads of Independent Companies reporting to Whole-time Directors will be covered as Senior Management Personnel. 3. ROLE OF COMMITTEE: A. REMUNERATION TO MANAGING DIRECTOR, WHOLE-TIME DIRECTORS AND / OR MANAGER: crore SI. Particulars of Remuneration Name of MD/WTD / Manager No. SN R SHANKAR RAMAN SHAILENDRA ROY D.K SEN M.V SATISH • 3.2. Policy for appointment and removal of Director, KMP and Senior Management in Key Managerial and Senior Management positions in accordance with the criteria laid down in this policy. ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 164 163 Identify persons who are qualified to become Director and persons who may be appointed Formulate the criteria for determining qualifications, positive attributes and independence of a director. The Committee shall: 3.1. Matters to be dealt with, perused and recommended to the Board by the Nomination and Remuneration Committee Recommend to the Board, appointment and removal of Director, KMP and Senior Management Personnel. The Nomination and Remuneration Committee and this Policy shall be in compliance with Section 178 of the Act read along with the applicable rules thereto and Regulation 19 of LODR. The Key Objectives of the Committee would be: OBJECTIVE: 1. 162 161 Legal/ Statutory Provisions and Regulatory concern: The Board should keep in mind the restrictions imposed by Companies Act, any other applicable laws with regard to declaration and distribution • External Factors: Due to any default on part of the company. FACTORS AFFECTING DIVIDEND DECLARATION The Dividend pay-out decision of any company, depends upon certain external and internal factors- Due to any restrictions and covenants contained in any agreement as may be entered with the Lenders and Due to losses incurred by the Company and the Board considers it appropriate not to declare dividend for any particular year; ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 d. b. a. Due to operation of any other law in force; The circumstances under which shareholders may not expect dividend/or when the dividend could not be declared by the Company shall include, but are not limited to, the following: 3) out of 1) & 2) both. 2) The profits for any previous financial year(s) after providing for depreciation in accordance with law and remaining undistributed; or b) after transferring to reserves such amount as may be prescribed or as may be otherwise considered appropriate by the Board at its discretion a) after providing for depreciation in accordance with law; 1) Current financial year's profit: C. DECLARATION OF DIVIDEND • State of Economy: The Board will endeavor to retain larger part of profits to build up reserves to absorb future shocks in case of uncertain or recessionary economic conditions and in situation where the policy decisions of the Government have a bearing on or affect the business of the Company. The Board of Directors of Larsen & Toubro Limited ("the Company") had constituted the "Nomination and Remuneration Committee" which is in compliance with the requirements of the Companies Act, 2013 ("Act") and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("LODR"). NOMINATION AND REMUNERATION POLICY Annexure 'H' to the Board Report LARSEN & TOUBRO The Policy shall be reviewed as and when required to ensure that it meets the objectives of the relevant legislation and remains effective. The Executive Management Committee has the right to change/amend the policy as may be expedient taking into account the law for the time being in force. REVIEW & AMENDMENT The portion of profits not distributed among the shareholders but retained and used in business are termed as retained earnings. It is also referred to as ploughing back of profit. The Company should ensure to strike the right balance between the quantum of dividend paid and amount of profits retained in the business for various purposes. These earnings may be utilized for internal financing of its various projects and for fixed as well as working capital. Thus the retained earnings shall be utilized for carrying out the main objectives of the company and maintaining adequate liquidity levels. PARAMETERS THAT SHALL BE ADOPTED WITH REGARD TO VARIOUS CLASSES OF SHARE The Company does not have different classes of shares and follows the 'one share, one vote' principle. @ Others includes pension of ₹3 crore and perquisite value of housing and medical 0.033 crore of dividend. Further, any restrictions on payment of dividends by virtue of any regulation as may be applicable to the Company may also impact the declaration of dividend. Future Requirements: If a company foresees some profitable investment opportunities in near future including but not limited to Brand/ Business Acquisitions, Expansion / Modernization of existing businesses, Additional investments in subsidiaries/ associates of the Company, Fresh investments into external businesses, then it may decide for lower dividend payout and vice-versa. • Liquidity Position: A company's liquidity position also determines the level of dividend. If a company does Magnitude and Stability of Earnings: The extent of stability and magnitude of company's earnings will directly influence the dividend declaration. Thus, the dividend is directly linked with the availability of the earnings (including accumulated earnings) with the company. . • Apart from the various external factors, the Board shall take into account various internal factors including the financial parameters while declaring dividend, which inter alia will include - Internal Factors: Nature of Industry: The nature of industry in which a company is operating, influences the dividend decision. Like the industries with stable demand throughout the year are in a position to have stable earnings and thus declare stable dividends. Taxation Policy: The tax policy of a country also influences the dividend policy of a company. The rate of tax directly influences the amount of profits available to the company for declaring dividends. Capital Markets: In case of unfavorable market conditions, Board may resort to a conservative dividend pay-out in order to conserve cash outflows and reduce the cost of raising funds through alternate resources. not have sufficient cash resources to make dividend payment, then it may reduce the amount of dividend pay-out. d) Stock Options in Subsidiary Companies: as per the Act Overall Ceiling If any Chairman/Managing Director/Whole-time Directors draws or receives, directly or indirectly by way of remuneration any such sums in excess of the limits prescribed under the Act or without the prior sanction of the Central Government, where required, he/she shall refund such sums to the Company and until such sum is 165 ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 166 refunded, hold it in trust for the Company. The Company shall not waive recovery of such sum refundable to it unless permitted by the Central Government. Total (B)=(1+2) 8.155 Total (2) specify - @ 3.033 3.033 Others, please c) Provisions for excess remuneration: 5.232 0.013 The Company has identified certain thrust areas and strategies, viz. leveraging ongoing digitalisation efforts, operational efficiencies, reducing working capital levels, unlocking business values, forays into new geographies, Unsettled trade tensions and developments around Brexit may continue to impact the cross-border trades, while oil-price volatility may impart a further downside risk to the outlook in the investment climate in the Middle East markets. In the year 2018-19, the global economy saw significant volatility. The US economy has accelerated at its finest pace in last four years due to monetary stimulus and tax cuts during the current year. The biggest risk facing economies is the growing evidence that global growth and trade are weakening. The slowing of the Chinese economy, along with growing evidence of European growth under pressure, cast a big cloud of uncertainty. Global Economy The general elections held in Q1 of FY 2019-20 could result in volatility in the domestic market and slowdown in Government machinery, although the effects will be transitory in nature. worst affected. Surplus inventory in the residential sector and limited pick-up in requirement of new construction led to lower investments. Investment by private sector saw significant traction, with pick up award of large value contracts in airport expansion and health sector. Also some momentum was seen in private sector capacity expansion. However, the overhang of bad debt, rising policy uncertainties and low- capacity utilization continue to impact the Indian industry capex. The power and manufacturing sectors remained the The Government's 'Make in India' initiative for the Defence sector continues to progress slowly due to bureaucratic inertia and complex procurement procedures. The domestic economy continues to be driven by public sector investments, mainly in areas of water supply, irrigation, urban transportation, crude exploration and refining, roads allied infrastructure and rural electrification. The domestic investment momentum was healthy despite the multiple challenges on the economic front, with volatile crude oil prices, currency swings, pressure on fiscal and current account deficits, sharp temporary contraction in liquidity and the general elections held in Q1 of FY2019-20. The year 2018-19 saw the Indian economy yielding the benefits of structural reforms, viz Goods & Service Tax (GST), Demonetisation and Insolvency & Bankruptcy Code (IBC). The year witnessed a pick-up in project awards, improved clearances and fund allocation, resulting in a pick-up in execution momentum in the domestic market. Indian Economy 0.017 ANALYSIS no profits or its profits are inadequate, the Company shall pay remuneration to its Executive Directors in accordance with the provisions of Schedule V of the Act and if it is not able to comply with such provisions, with the previous approval of the Central Government. b) Minimum Remuneration: A person shall not be appointed as a Director in case he is a Director in more than eight listed companies after April 1, 2019 and seven listed companies after April 1, 2020. For the purpose of this clause listed companies would mean only those companies whose equity shares are listed. 3.2.3. Evaluation The Committee shall by itself or through the Board or an independent external agency carry out evaluation of performance of the Board/Committee(s), Individual Directors and Chairman at regular interval (yearly) and review implementation and compliance. The Company may disclose in the Annual Report: Observation of the Board Evaluation for the year under review a. b. Previous years observations and actions taken LARSEN & TOUBRO C. Proposed actions based on current year's observations 3.2.4. Removal Due to reasons for any disqualification mentioned in the Act or under any other applicable Act, rules and regulations thereunder, the Committee may recommend, to the Board with reasons recorded in writing, removal of a Director, KMP or Senior Management Personnel subject to the provisions and compliance of the said Act, rules and regulations. 3.2.5. Retirement If, in any financial year, the Company has The Director, KMP and Senior Management Personnel shall retire as per the applicable provisions of the Act or the prevailing policy of the Company, as applicable. The Board/Committee will have the discretion to retain the Director, KMP, Senior Management Personnel in the same position/ remuneration or otherwise even after attaining the retirement age, for the benefit of the Company. 3.3.1. General: a) The remuneration / compensation / commission etc. to the Executive Directors will be determined by the Committee and recommended to the Board for approval. The remuneration / compensation / commission etc. shall be subject to the approval of the shareholders of the Company and Central Government, wherever required. b) The remuneration and commission to be paid to the Executive Directors shall be in accordance with the percentage / limits / conditions laid down in the Articles of Association of the Company and as per the provisions of the Act. c) Increments to the existing remuneration/ compensation structure may be recommended by the Committee to the Board which should be within the limits approved by the Shareholders in the case of Executive Directors. d) Where any insurance is taken by the Company on behalf of its Executive Directors, Chief Executive Officer, Chief Financial Officer, the Company Secretary and any other employees for indemnifying them against any liability, the premium paid on such insurance shall not be treated as part of the remuneration payable to any such personnel. Provided that if such person is proved to be guilty, the premium paid on such insurance shall be treated as part of the remuneration. e) Remuneration of other KMP or Senior Management Personnel, in any form, shall be as per the policy of the Company based on the grade structure in the Company. 3.3.2. Remuneration to Executive directors/ KMP and Senior Management Personnel: a) Fixed pay: The Executive Directors/ KMP and Senior Management Personnel shall be eligible for a monthly remuneration as may be approved by the Board on the recommendation of the Committee or policy of the Company. In case of remuneration to Directors, the breakup of the pay scale and quantum of perquisites including, employer's contribution to P.F, pension scheme, medical expenses, club fees etc. shall be decided and approved by the Board/ the Person authorized by the Board on the recommendation of the Committee and approved by the shareholders and Central Government, wherever required. 3.3. Policy relating to the Remuneration of Executive Director, KMP and Senior Management Personnel AND DISCUSSION MANAGEMENT 7.1 A member of the Committee is not entitled to be present/participate in discussion when his or her own remuneration is discussed at a meeting or when his or her performance is being evaluated. COMMITTEE MEMBERS' INTERESTS The meeting of the Committee shall be held atleast once in a year and at such regular intervals as may be required. 7. 6. FREQUENCY OF MEETINGS 5.4 Chairman of the Nomination and Remuneration Committee meeting could be present at the Annual General Meeting or may nominate some other member to answer the shareholders' queries. 5.3 In the absence of the Chairperson, the members of the Committee present at the meeting shall choose one amongst them to act as Chairperson. 5.2 Chairperson of the Company may be appointed as a member of the Committee but shall not be a Chairman of the Committee. 5.1 Chairperson of the Committee shall be an Independent Director. CHAIRPERSON 5. 4.4 Term of the Committee shall be continued unless terminated by the Board of Directors. 7.2 The Committee may invite such executives, as it considers appropriate, to be present at the meetings of the Committee. 4.3 Membership of the Committee shall be disclosed in the Annual Report. 4.1 The Committee shall consist of a minimum 3 non- executive directors, half of them being independent. 4.2 Minimum two (2) members or one-third of the MEMBERSHIP 4. An Independent Director shall not be entitled to any stock option of the Company. Non- Executive Directors are eligible for Stock options in accordance with Schemes formulated by the Company. Nominee Directors are not entitled to stock options as per their respective nomination letters received by the Company. d) Stock Options: Commission may be paid within the monetary limit approved by shareholders, subject to the limit not exceeding 1% of the profits of the Company computed as per the applicable provisions of the Act. The Board of Directors will fix the Commission payable to Directors on the basis of number of Board/Committee meetings attended during the year and Chairmanships of Committees. c) Commission: The Non-Executive / Independent Director may receive remuneration by way of fees for attending meetings of Board or Committee thereof. Provided that the amount of such fees shall not exceed One Lac per meeting of the Board or Committee or such amount as may be prescribed by the Central Government from time to time. b) Sitting Fees: The remuneration / commission shall be fixed as per the limits and conditions mentioned in the Articles of Association of the Company and the Act. a) Remuneration / Commission: 3.3.3. Remuneration to Non-Executive / Independent Director: members whichever is greater including atleast one Independent Director shall constitute a quorum for the Committee meeting. 8. SECRETARY The Company Secretary of the Company shall act as Secretary of the Committee. MANAGEMENT DISCUSSION AND ANALYSIS | ANNUAL REPORT 2018-19 168 167 The Policy shall be reviewed as and when required to ensure that it meets the objectives of the relevant legislation and remains effective. The Executive Committee has the right to change/amend the policy as may be expedient taking into account the law for the time being in force. Proceedings of all meetings must be minuted and signed by the Chairman of the Committee at the subsequent meeting. Minutes of the Committee meetings will be tabled at the subsequent Board and Committee meeting. 13. REVIEW & AMENDMENT: 12. MINUTES OF NOMINATION AND REMUNERATION COMMITTEE MEETING 11.5 Professional indemnity and liability insurance for Directors and senior management. 11.4 To consider any other matters as may be requested by the Board. 11.3 To delegate any of its powers to one or more of its members or the Secretary of the Committee. 11.2 To ensure the remuneration maintains a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the Company. 11.1 To consider and determine the Remuneration Policy, based on the performance and also bearing in mind that the remuneration is reasonable and sufficient to attract retain and motivate members of the Board and such other factors as the Committee shall deem appropriate and all elements of the remuneration of the members of the Board. The duties of the Committee in relation to remuneration matters include: 11. REMUNERATION DUTIES 10.9 Considering any other matters, as may be requested by the Board. 10.8 Recommend any necessary changes to the Board; and 0.047* 10.6 Making recommendations to the Board concerning any matters relating to the continuation in office of any Director at any time including the suspension or termination of service of an Executive Director as an employee of the Company subject to the provision of the law and their service contract. 10.4 Developing a succession plan for the Board and Senior Management and regularly reviewing the plan; 10.5 Evaluating the performance of the Board members and Senior Management in the context of the Company's performance from business and compliance perspective; 10.3 Setting a formal and transparent procedure for selecting new Directors for appointment to the Board; 10.2 Determining the appropriate size, diversity and composition of the Board; 10.1 Ensuring that on appointment to the Board, Non-Executive Directors receive a formal letter of appointment in accordance with the Guidelines provided under the Act; The duties of the Committee in relation to nomination matters include: 10. NOMINATION DUTIES present and voting and any such decision shall for all purposes be deemed a decision of the Committee. LARSEN & TOUBRO Matters arising for determination at Committee meetings shall be decided by a majority of votes of Members 9. VOTING Maximum Number of Directorships: At the time of appointment of Independent Director it should be ensured that number of Boards on which such Independent Director serves is restricted to seven listed companies as an Independent Director and three listed companies as an Independent Director in case such person is serving as a Whole-time Director of a listed company or such other number as may be prescribed under the Act. No Independent Director shall hold office for more than two consecutive terms, but such Independent Director shall be eligible for appointment after expiry of three of years ceasing to become an Independent Director. Provided that an Independent Director shall not, during the said period of three years, be appointed in or be associated with the Company in any other capacity, either directly or indirectly. Board of the Company and will be eligible for re-appointment on passing of a special resolution by the Company and disclosure of such appointment in the Board's report. The rationale for such re-appointment shall also be provided in the Notice to Shareholders proposing such re-appointment. 0.220 0.180 32.918 (c) Profits in lieu of salary under section 17(3) Income tax Act, 1961 2 Stock Option 3 Sweat Equity 4 Commission 0.120 - as % of profit 12.154 7.049 4.186 5.985 5.283 53.260 - others, specify... 5 Others (Contribution to Provident 5.671 3.743 2.332 18.603 3.150 7.468 21.780 (A) + (B) Remuneration Managerial Total 0.037 8.517 0.037 13.195 0.262 0.376 0.397 0.233 0.033 0.430 0.382 0.262 0.233 0.033 0.059 0.489 0.444 0.059 0.476 0.653 8.155 0.507 J. D. PATIL Total Amount SUBRAHMANYAN 1 Gross salary (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 2.400 1.710 1.590 1.230 1.230 1.050 9.210 (b) Value of perquisites u/s 17(2) Income-tax Act, 1961 1.462 965.25 1.948 16.866 0.308 0.280 0.174 0.260 0.279 3.473 Others, please specify Total (1) 2 Other Non-Executive Directors Fee for ☐ 0.507 0.653 0.489 0.44 0.476 0.262 0.430 0.382 0.252 0376 0397 4.578 | 0.12 0.012 0.20 078 00:252 0.354 0.174 attending board / committee Commission 5.000 3.2.1. Appointment criteria and qualifications a) The Committee shall identify and ascertain the integrity, qualification, expertise and experience of the person for appointment as Director and recommend to the Board his/her appointment. Appointment and Remuneration of KMP or Senior Management Personnel is in accordance with the HR Policy of the Company. The Company's policy is committed to acquire, develop and retain a pool of high calibre talent, establish systems and practises for maintaining transparency, fairness and equity and provides for payment of competitive pay packages matching industry standards. b) A person should possess adequate qualification, expertise and experience for the position he / she is considered for appointment. The Committee has discretion to decide whether qualification, expertise and experience possessed by a person is sufficient / satisfactory for the concerned position. The Company shall not appoint or continue the employment of any person as Director who has attained the retirement age fixed by the Board or as approved by the Shareholders pursuant to the requirement of the Act/LODR. 3.2.2. Term / Tenure a) Executive Directors: The Company shall appoint or re-appoint any person as its Executive Director for a term not exceeding five years at a time. No re-appointment shall be made earlier than one year before the expiry of term. b) Independent Director: An Independent Director shall hold office for a term up to five consecutive years on the c) meetings 0.381 0.531 0.383 0.349 meetings Commission 1.205 Fund & Superannuation Fund) Total (A) 48.454 25.075 14.121 6.998 9.383 8.223 112.254 Ceiling as per the Act 877.50 B. REMUNERATION TO OTHER DIRECTORS Sl. Particulars of Name of Directors crore Total No. Remuneration 1 Independent Directors Fee for attending board / committee AM Nila M Chiale Bhargava Damodaran Via Santa Su State Zanubhai Actupla Shama" Mathew Aja Shama Surganina Nikawalanie sa Maragamana Gupta Bangaramount 0.126 0.122 0.106 0.095 0.122 0.088 0.122 0.102 0.088 0.116 0.118 1.710 10.7 Delegating any of its powers to one or more of its members or the Secretary of the Committee; 0.155 LARSEN & TOUBRO VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS ANNUAL REPORT 2018-19 LARSEN & TOUBRO 2. Fourteen Projects won Gold Awards and one project won a Silver Award from The Royal Society For Prevention of Accidents (ROSPA) 3. Eight projects won National Infrastructure & Construction Awards 2018 4. Four projects won CIDC Vishwakarma Awards 5. Four projects won ICI Awards 6. Won a Construction Week Award 2018, a MEED Quality Award for the Year 2018 in Oman and a MACE Global Health, Safety & Well Being Award - 2018 for outstanding safety performance on site Significant Initiatives Apart from being the front-runner in adopting technology to improve productivity, the business has been using integrated digital tools like BIM, GIS, RFID, LIDAR and other technologies effectively in its project sites. Digitalisation ITC Food Manufacturing and Logistics Facility, Kapurthala Initiatives for digital stores have started to enable accurate analysis of stock at site. The business will continue to use collaborative digital tools to achieve cost optimization and construction excellence. It is a pioneer in using robotics in the construction space. At a few sites, robotic internal plastering and painting is being attempted; this is 30 times more efficient than manual application. The business is also a leader in productivity monitoring using RFID tags interlinked with biometrics. It has successfully employed visual analytics and Al in weighbridge solutions. Environment, Health and Safety Safety at work is of utmost importance to the business. It continuously strives for a safety culture by organizing various training and awareness programmes throughout the year. The business has been using virtual reality devices and training modules for safety training. Various initiatives have been taken up to digitally monitor, record and review all safety and quality related aspects at site. Human Resources The business strongly believes that people are the prime assets of the organization, and implements new initiatives to train and motivate them. A new initiative - Building the Future - was adopted during the year. Over 500 employees were offered the opportunity to come up with suggestions on select parameters - with the objective of getting fresh, out-of-the-box recommendations towards building the growth strategy. Shortlisted employees were then grouped into teams to present their ideas to the senior leadership team. The Front-Line Supervisor Programme (FLS) was conceptualized in October 2015 with the objective of 175 176 Motera Cricket Stadium, Gujarat, will be the world's largest cricket stadium 1. Received six British Sword of Honor awards and five-star certification from the British Safety Council, for third time in a row During the year the business won the following awards: showing positive signs of developing a new IT campus in the upcoming year. The developer market for commercial spaces is picking up, particularly in metros and Tier -2 cities of India. The Government's ambitious new health insurance scheme, Ayushman Bharat has got off to a good start. With the announcement of setting up new All India Institutes of Medical Science (AIIMS) in Tamil Nadu, Telangana and Gujarat, the overall business scenario seems positive for the segment. The huge inventory level of 6.6 lakh houses has drastically reduced investment in the elite housing sector. Affordable and mass housing has picked up, and more projects are expected in FY 2019-20, which will create good prospects for the business. Government orders have slowed down and will continue to remain So, with general elections in first quarter of FY 2019-20. Major Achievements The year's Order Book includes breakthrough orders for airports and hospitals from prestigious clients. Major orders were secured in the airports segment including the expansion of international airports: Delhi, Delhi Metro Phase 3 snakes its way across Delhi-Haryana Border Bengaluru and Hyderabad. Orders were also secured for engineering, procurement and construction of one of the tallest office structures in Amravati, construction of Cancer hospitals at 18 locations in Assam, expansion of the IIT Campus at Hyderabad, a commercial complex from a major developer and construction of a botanical garden at Oman. • Statue of Unity, Gujarat (at 182 m high, the tallest statue in the world, completed in just 33 months) • Kannur International Airport ⚫ ITC Kapurthala •AP Housing - West Godavari . Apollo OMR, Chennai Duqm Airport, Oman Sindhudurg Airport Key projects commissioned by the business during the year include: strengthening the bottom layer of the organization pyramid. Since inception, 521 FLSS (FY 2018-19: 244) have been inducted in 15 batches under various functions like Concrete, Shuttering & Reinforcement, Finishes, P&M and MEP. After the training, they undergo NSDCI (National Skill Development Corporation of India) Board assessment, and are deployed at project sites accordingly. Initiatives to strengthen the teams of sub-contract workmen have been taken. Periodic meetings were held to enable them understand benefits such as BOCW, PF, etc. Aadhar camps were held to facilitate registration/ modification. Skill training was imparted through L&T's in-house Construction Skills Training Institute. Risk and Concerns The Government enhanced its focus on awarding projects in the Hybrid Annuity Mode. In FY 2017-18 NHAI took the decision to have mix of BOT / EPC / HAM projects in the ratio of 10:30. In FY 2018-19, the Government has been focused on awarding more projects in the EPC / HAM model in 50:50 ratio. 177 MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS | ANNUAL REPORT 2018-19 Railway electrification by L&T on Eastern Dedicated Freight Corridor Rigid Overhead Contact System in Phase 3 Tunnel, Delhi Metro 178 The National Highway Network is to be expanded from 96,000 km to 200,000 km over the 5-year period from 2017 to 2022. The Government is also focused on developing a strong express highway network. Bharatmala Pariyojana Phase 1 has been launched in 2017 with some portion awarded. The year saw a significant number of smaller competitors emerging in the market, consequently intensifying the competition. Over the last 5 years, the budgetary support for road construction has seen a steady increase and the quantum of projects being awarded increased accordingly. Construction of highways continued at the rate of 27 km per day in FY 2018-19, maintaining the steady flow of construction from FY 2017-18. In FY 2018-19, 24,452 km roads wer awarded and 9829 km of roads were constructed. In FY 2018-19, major metropolitan airports began to undergo capacity enhancement. In addition, the Government continued to develop new airports by sanctioning the development of a new greenfield airport in Hirasar, Gujarat. The Prime Minister of India launched the construction of Navi Mumbai airport, and the bidding process is underway. The Metro Policy has been changed and it is now mandatory to adopt the Public-Private Partnership (PPP) mode to avail central assistance for new projects. Projects are being implemented on an EPC basis - a paradigm shift from the conventional BOQ methods. It is envisaged to electrify the entire railway network by the year 2022. New projects, including port connectivity, dedicated rail links etc, are being implemented through SPVS owned by a State-Centre JV. Tendering for three new dedicated freight corridors is to be initiated in next 2-3 years. Major Achievements L&T's transportation business won the largest value single domestic order for the expansion of Delhi International Airport. The business expanded its customer base during the year, securing various orders for construction of highways as well as city infrastructure development projects. Major orders received during the year include: • 8-Lane Mumbai - Nagpur Expressway (57.9 km), Maharashtra • Construction of utilities and roads for Amaravati Government Complex and Zone 12 A projects • A Design & Build Systems Package for a Mass Transit System in Dhaka • Overhead electrification and signaling & telecommunication package in the Eastern Dedicated Freight Corridor Track renewal touched a record high of ~ 5,000 km for the year 2018-19. Railway electrification of 5200 km (against the annual target of 6,000 km in 2018-19) was higher than last year's 4100 km. Tendering commenced in MHSRCL for Mumbai Ahmedabad High Speed Rail project. A bid has been invited for one of the largest civil packages - a 237 km viaduct on the Maharashtra-Gujarat border to Vadodara. Business Environment It has engineering design centres in Mumbai, Faridabad and Chennai. It also has Offshore Engineering Centres in Mumbai, besides area offices in India and the GCC countries. In addition, it has a Competency Development Center at Kancheepuram and a Workmen Training Centre at L&T's Construction Skill Training Institute (CSTI), Ahmedabad. The business leverages its vast experience in project management, engineering design and construction management to achieve operational efficiency. The liquidity crunch has been prevailing in the real estate market for over a year, and many owners/developers are financially stressed. The Regulatory compliance by developers to arrange loans for projects is becoming stringent and therefore there has been a delay in financial closures / tie-ups by developers. To avoid any liquidity risk, robust screening of customer profiles and their liquidity position is undertaken before bidding for any construction contract as well as during execution. Outlook • The Government's continued focus on affordable housing and infrastructure development is expected to drive ITC Green, Bnegaluru - one of the many leisure resorts being developed by L&T growth. The Government has provided 'infrastructure status' to affordable housing. The relaxation in GST will help the sector to steadily improve in FY 2019-20. • Airport traffic growth in the country will necessitate airport expansion within the country. The Government's plan of privatizing 6 major airports is in progress. • The Healthcare sector has been accorded 'infrastructure status'. The Government is going to increase public health spending to 2.5% of GDP by 2025. •The High-speed Railway projects - modernization of railway stations, the Ahmedabad - Mumbai High-speed rail and depots are expected to gain momentum in FY 2019-20. Government investment in educational institutions like IITs in various parts of India is likely to increase the prospect base. • With 'Make in India' gaining pace, the automobile, pharma and electronics industries are coming up with expansion plans. On international front, there are promising opportunities in Sri Lanka, Bangladesh, the GCC and Africa. The GCC countries are continuing to invest in infrastructure. Saudi Arabia's development plan worth USD 53 bn (SAR200 bn), which is in line with the goals of Vision 2030, gives an optimistic outlook for business in this region. The business has been proving its mettle repeatedly, and it is set to execute challenging projects in hand within Prestige Lakeside Habitat, Bengaluru Garden Reach Flyover, Kolkata LARSEN & TOUBRO prescribed timelines. With a positive market scenario, a healthy order book, amicable customer relationship, a highly talented employee pool and strong focus on making project sites highly digitised and automated, the business will continue to retain its position as market leader in the industry. Overall, the environment is promising - yet challenging due to increased competition, long duration for procedural matters, slow fund allocation in government funded jobs and liquidity crunch and time taken to obtain statutory approvals in private jobs. ■ TRANSPORTATION INFRASTRUCTURE Overview: L&T's Transportation Infrastructure business is well-diversified in terms of its product range and geography of operations. The business offers services in the areas of roads, runways (airside infrastructure) and elevated corridors (RREC), railways (mainline and mass transit systems). It has presence across India, East Africa, Bangladesh and various GCC countries. ICC Towers, Mumbai Govt Medical College Baripada, Odisha ~ 174 The safety of workmen is paramount. Digitalisation can play an important role in improving the safety levels of the workmen and the following solutions have been implemented to achieve the same: a. Safety Processes Digitalisation - All safety checklists and processes have been digitalized by putting them on a mobile App. This ensures better compliance and also saves time required for approvals and corrections. b. Safety Inspections are also recorded on an App for all kinds of assets, tools and tackles, harnesses and slings, etc. This ensures that inspections are carried out with rigour and at the right periodicity to ensure safety. c. Safety Training - Using Virtual Reality (VR) & Augmented Reality (AR) The Company has developed Immersive Virtual Reality and Augmented Reality films demonstrating the correct safety practices covering a number of scenarios like working at a height, material handling, heavy vehicle management, working at an excavation site, working with HT lines, safety barricading, work permits and working in a marine environment. These films, translated in multiple Indian languages, are deployed on headgear at the sites and are administered to all the workmen. They help create a vivid immersive experience and imprint the rules of safety firmly in the minds of the workmen Geospatial Solutions A variety of data acquisition technologies are used, ranging from GNSS (Global Navigational Satellite systems) to aerial vehicles (piloted and unmanned), drones, mobile vehicles on land and terrestrial total stations. These capture data through optics, Laser technology (LIDAR), radio waves (RADAR) and thermal imaging. These images are processed using complex geospatial engineering techniques and powerful data processing software. These results are communicated to end users and design engineers through user-friendly web pages and integrated with other data and applications as required. Workmen Safety Geospatial technologies thus enable the business to perform pre-bid surveys essential for bid making much faster and with a much higher degree of accuracy and thus can make engineering estimations more accurate. A number of generic and project-specific solutions have been deployed to track materials from issue to consumption for a variety of materials and also to establish traceability and for reconciliation of materials. These solutions use technology such as GPS, RFID, Barcode and QR codes, combined with mobility solutions and web portals. Analytics The Company has established a Big Data Analytics platform called 'Alchemy'. The data from all the digital solutions deployed are pumped into this platform and a number of analytics operations are performed to gain insights on aggregated data and combinations of data from different systems across the value chain. Descriptive analytics is being performed and the company is also moving into predictive and prescriptive analytics. All these insights from running the algorithms and performing analytics are presented to the users in a rich visualisation platform as user-friendly dashboards, facilitating quick action for realising benefits. Digital Initiatives in Manufacturing: The focus of digitalisation in businesses like Heavy Engineering, Defence, Power, Hydrocarbon and Electrical & Automation has been on manufacturing. Industry 4.0 processes are adapted to increase automation in manufacturing and connected machines ensuring visibility across the manufacturing cycle. The large welding machines at the Company's Hazira factory have not only been connected but also automated to ensure significantly LARSEN & TOUBRO higher outputs and consistent quality. Advanced technologies like 3D scanning, laser marking and mapping are used to ensure accuracy in the manufacturing and fabrication processes. A number of industrial robots have also been installed at various factories to speed up the cycles and ensure precision at all times. Materials Tracking Solutions Workmen Availability and Productivity Workmen are key to a project site and their availability and productivity have a major role in completing a project in time. Digital solutions are implemented for mobilizing workmen, on-boarding workmen and monitoring productivity of workmen. These solutions use technologies like mobility, wearables and RFID suitably tailored to meet specific needs. All the data is analysed and insights shown to the end users and managers through user-friendly dashboards to enable them to take action to optimise usage, improve utilization, redeploy where necessary and realize benefits. Out of the 12000 equipment identified, currently about 9500 equipment at project sites are connected and streaming data in real time for monitoring. MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS ANNUAL REPORT 2018-19 LARSEN & TOUBRO 南 innovating business, inorganic growth and continuing ROE enhancement. DIGITALISATION AND IT INITIATIVES The initial concentration of digital solutions has been mainly in the Construction business, the largest segment of the Company. The digital solutions aim to improve utilization of equipment, increased productivity, savings in fuel, reduction in material wastage and real-time visibility of all aspects of operations, thereby enabling better monitoring and effective data-based decision making to remove bottlenecks and improve timely completion. Digital journey The Company has established a young, talented and spirited team responsible for creating digital solutions and driving their implementation. The team operates through a Hub and Spoke model with a central team at the Divisional Corporate Office level. This team defines the digital strategy, the technology and architecture choices, the vendor selection and development, solution design and development. The Digital Officers and their small teams at the business level seek requirements from the businesses and also take charge of the roll outs. Every project site has an identified Digital Champion who helps implement, monitor and spur usage at the sites. Over the years, the Company's digitalisation journey has come a long way and a very large number of solutions have been developed and deployed at scale across hundreds of the project sites. Remote Monitoring of Equipment at Project Sites The usage of a variety of Plant and Equipment at project sites helps greatly in ensuring faster construction and better quality. L&T has a large fleet of equipment of various makes and models and of different vintages, sourced from various OEMs. The Company's digital solution 'Asset Insight' remotely monitors various performance parameters of the equipment using the Internet of Things (IOT) technology. Installing multiple sensors and an intelligent gateway on the equipment, enables the business to obtain real-time operational, production and condition data on the equipment, without human intervention. Some of these data points are location, movement, switch on and switch off time, idling time and work done, 169 170 MANAGEMENT DISCUSSION AND ANALYSIS | ANNUAL REPORT 2018-19 number of hours worked, pressure, temperature and fuel consumption and many other variables, depending on the type of equipment. The success of such an initiative is also determined by effective change management, which is addressed through the top management clearly articulating the necessity and importance of digitalisation and its benefits at every forum. Digital has been incorporated into the curriculum of all the important training programmes in the Company and sessions are being held regularly. Special newsletters on digital initiatives have been published and dissemination of information to all the staff is being done regularly through various employee engagement solutions. As part of the Lakshya 2016-21 plan, Digital was identified as one of the major initiatives for the Company. In February 2016, a team was constituted to implement digital solutions with a focus on operational effectiveness, facilitating timely completion and cost savings. CORPORATE HR INITIATIVES consistent spender of almost its entire budget amount during the last few years. In the Roads sector, the EPC mode, which contributed 65-70% of the total cost of projects awarded by NHAI during the FY14-16 periods, has taken a backseat. Single-segment road players have seen a relatively lower inflow of 'new' orders - on the back of slowdown in order award activity by NHAI. NHAI has awarded only 550 km of projects in FY 18-19 as compared to 7400 km in the previous year - leading to muted inflows. Moreover, over the last two fiscals, the HAM Model has taken the sweet spot, with EPC projects forming just 30-35% of the cost of projects awarded. A comeback of the EPC mode in FY 2019-20 will be a game changer for the sector. Global Construction Sector The global construction sector has hit a peak in the construction cycle during the past 10 years (2008- 2018). 2019 is expected to be a turning point for the global construction industry, and the impact of cooling down is being felt gradually. The emerging markets dominated the overall global infra growth over the last few years, while the developed markets have not fully regained their pre-crisis volumes. Going ahead, slowing GDP growth and tighter financial and monetary conditions will drive the deceleration in certain infra verticals. Bengaluru International Airport - One of 11 built by L&T LARSEN & TOUBRO The Middle East infra / construction market is undergoing an encouraging paradigm shift, with a steady recovery in certain regions. A moderate recovery in oil prices is expected to play a decisive role in boosting investments in both infrastructure and capital projects. In addition, massive projects in Social Infra, Smart Environment, Transportation Infra and Renewable Energy are expected to be game- changers which aren't linked to the oil industry. The Railways, always a key focus area, received a decent share of India's overall Budget, and have been a ■ BUILDINGS AND FACTORIES L&T's Buildings & Factories (B&F) business is an industry leader in Engineering, Procurement and Construction (EPC) of projects ranging from airports, hospitals, stadiums, retail spaces, educational institutions, IT parks, office buildings, data centres to elite residential buildings, high-rise structures, mass housing complexes, cement plants, industrial warehouses and other factory structures. The business has a track-record of building tall, large and complex structures across India and overseas. It also offers total solutions including in-house design expertise using advanced systems like BIM 3D, 4D and BIM 360 field, an efficient supply chain management and extraordinary project management expertise across all the business lines cited here. Dedicated engineering design centres, competency cells, advanced formwork systems, mechanized project execution, a wide network of consultants and vendors, digitised project control and a talented pool of employees helps sustain leadership position, retaining key customers, entering new geographies and securing major orders. Construction excellence, technology, experience and expertise gained over several decades gives the business a competitive advantage in the construction industry. Business Environment The last few years have been extremely challenging for the construction industry, but improvement is evident. The difficulties in the implementation of RERA and GST have settled down. The country's increasing impetus on developing infrastructure has attracted investment from major global players. The automobile industry is expected to register growth in the forthcoming quarters. The manufacturing segment too is on an upswing. Although IT majors are wary of expansion plans, there is some movement in the sector as a few of them are A Digital Council consisting Chief Digital Officers from all the businesses has been formed in order to share best practices, inspire each other and build synergies. 173 Overview: Urban Infrastructure, which is the key focus of the current Government, played a key role over the years and is likely to continue in future with implementation of Smart Cities, Water Infrastructure, Housing for All under Pradhan Mantri Awas Yojana. Private-sector investments in airports have shown positive trends, and the business was awarded major airport projects during the year. Given the favourable macro situation, the implementation rate of infra projects has improved considerably in FY 2018-19, also driven by general elections in Q1 of FY 2019-20. On the irrigation front, apart from Telangana, Andhra Pradesh, Karnataka, Gujarat, Haryana and Madhya Pradesh, Odisha has also significantly enhanced its irrigation investments. L&T has digitalised its learning delivery. An Al-driven digitalised platform, called ATLNext, caters to the myriad learning needs of a widely distributed and young on-the-go workforce. campuses in Mysuru and Madh. CTEA develops and conducts technical, functional and business-specific training programs. L&T is rapidly evolving. The Company's current growth strategy is in line with the perspective plan to augment its presence in platforms and services to future-proof its portfolio. L&T ranked #22 on Forbes Global 2000 - Worlds Best Employers list. This was possible by developing and nurturing a powerful and preferred employer brand. Various HR initiatives have been curated and implemented with consistency to build this brand. HR practices at L&T are developed to address diverse needs of both millennials and veterans. Diversity has been a touchstone at L&T, keeping with the multicultural plurality of the nation. L&T is a pioneer in running Development Centres (DCs). Over 16,000 assessments have been conducted to identify and develop leadership behaviour at all levels. This is critical for succession planning. The DC process uses the expertise of high quality external assessors, with systematic interventions and a culture of constructive feedback. A robust 7-step leadership pipeline development model has been institutionalised at L&T for over a decade. Each step is curated and delivered by eminent faculty, suited to L&T's dynamic business needs. The Company has partnered with world-renowned domestic and international B-schools such as INSEAD, Ross Business School, Harvard Business School, IIM Ahmedabad, etc. Each step is a learning journey coupled with high-impact action learning projects (ALP) undertaken by participants, which are periodically reviewed by eminent faculty as well as top management within L&T. This ensures direct application of learnings at workplace, thereby yielding a higher ROI and learning retention. The 7-step model has become a benchmark and earned L&T the prestigious Brij Mohan Munjal Award for Business Excellence through Learning & Development. L&T believes in nurturing a multi-generational workforce and grooming young talent. Through its efforts in sustaining a healthy association with top Engineering and MBA institutes, L&T today boasts of a demographic dividend with 65% employees under 35 years of age. Engagement studies have shown that L&T is a very safe place to work for women. Both employment and retention of women at L&T is rapidly increasing due to this confidence. Some specific domain-oriented programmes have also been developed, such as the L&T Build India Scholarship, through collaboration with top IITs and NITs, to impart niche domain skills relevant to L&T's continued success. All the business entities at L&T have an Employee Assistance Program (EAP), in line with the Company's caring culture. For instance, L&T has tied up with Tata Institute of Social Sciences (TISS), for an EAP titled iCALL, a mental health initiative. The Institute for Project Management (IPM) was set up by L&T at Vadodara and Chennai. This is a unique institution with its own Dean and Faculty. It has collaborations with leading universities for imparting project execution skills to L&T-ites. There is also an academy called Centre for Technology & Engineering Application (CTEA), with 171 The Infrastructure segment - especially the EPC sector has witnessed a decent order inflow in the last four quarters, driven mainly by Government Capex. On the other side, private / corporate Capex has declined for 7 years in succession over FY12-FY18. The Power sector, especially, faces an over-supply situation, with corporates in the sector having created significant capacity over the past decade in transmission and distribution to drive investments. Also implemented in L&T are various multiple outreach programmes, involving skill development and upliftment schemes. As L&T takes strides towards the new world of digitalisation, services and platforms, the synchrony of head and heart in HR practices continues to reinforce confidence amongst its stakeholders for a bright future. Domestic Construction Sector Statue of Unity, Gujarat, built by L&T is the world's tallest statue. L&T's Leadership Development Academy (LDA) at Lonavala is a crucible for ideas and learning. It is a sought-after destination for all kinds of learning interventions, with its sprawling green campus and state-of-the-art facilities. INFRASTRUCTURE MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS | ANNUAL REPORT 2018-19 BUSINESS 172 LARSEN & TOUBRO One of India's longest cable-stayed bridges across River Mandovi, Goa MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS ANNUAL REPORT 2018-19 181 Apart from MAHSR, the conventional projects of the Indian Railways continue to get a big thrust, backed by strong institutional funding like LIC. The Indian Railways is planning to tackle mainline capacity constraints through capacity augmentation (doubling and tripling) of ~5,000 km in next three years, out of which ~2000 km is likely to be awarded under the EPC concept. Around 13,500 After the Dedicated Freight Corridor projects, the High Speed Rail Project is the next big ticket opportunity, the business is positively looking at the start of bidding process for the 508 km Mumbai - Ahmedabad High Speed Rail Corridor (MAHSR). With the enhanced value of the overall project at ₹1,08,000 crore, the L&T accessible value stands at 59,000 crore, comprising packages for viaducts, undersea tunnels, stations, maintenance depots, track, electrification and signaling. L&T's Railways business will focus on track, electrification and signaling and telecommunication. It is expected that all tenders for the MAHSR will be awarded in FY 2019-20. The Indian Railways is planning its highest outlay of 1.58 lakh crore for FY 2019-20 - an increase of over 8% of last year outlay of 1.46 lakh crore. projects already awarded and with plenty more in the pipeline. Several other industrial corridors such as the Amritsar - Delhi - Kolkata Industrial Corridor and the Chennai - Bangalore Industrial Corridor are in the Detailed Project Report (DPR) stages. The development of various industrial development corridors identified across the country and the nodes that have been identified in these corridors have led to announcement of various city infrastructure development projects. Of the various corridors under development, the East Coast economic corridor has seen the Amaravati node under rapid development - with L&T currently executing 6 projects and more phases expected. The Delhi - Mumbai Industrial Corridor is at an advanced stage, with multiple The Government is aiming to spend close to 7 lakh crore over the next five years to develop 83,677 km of roads, including the Bharat Mala Pariyojana worth 5.4 lakh crore as the road sector is opening up. The Government aims to step up to its ambitious target of building 45 km of roads per day in FY 2020. Matters relating to change in legislation, approval of estimates for pre-construction activities and delay in detailed engineering lock up the resources of the business. Solapur-Sangareddy Road Project Delays in these clearances from the authorities result in additional cost to the business. First-in-India: Mechanized simultaneous stringing of conductors at Western Dedicated Freight Corridor 182 The Department of Civil Aviation (DCA) envisages that 100 new airports will be built in the country over the next 10 to 15 years. The DCA is also working on the cargo policy, which will provide a boost to the nation's logistics capacity. Outlook The Railways business is exploring opportunities in main line railway funded by the Indian line of credit and India is well on its way to creating a world-class MRT system as an integral part of community infrastructure development across all metro and major Tier 1 and Tier 2 cities. In the nuclear sector, the business has been a forerunner by contributing to the majority of India's nuclear power plants. The business provides EPC solutions in civil, mechanical, electrical and instrumentation, design capacity for end-to-end civil works including seismic qualification, procurement and construction services and modular construction technology. Its expertise extends to both pressurized heavy water reactor (PHWR) and light water reactor (LWR) technologies. The business spans multiple projects simultaneously, many of which are mega jobs. Infrastructure projects in general are dependent on numerous approvals and clearance, from authorities like the Government and local regulatory bodies. This includes land acquisitions, change orders, extension of time and schedule revisions. The business is both a pioneer and the current leader in the domestic metro segment. It provides extensive end-to-end engineering and construction services for both elevated and underground metro systems. The metro vertical has expertise in several major areas - elevated viaduct construction using segmental, u-trough, i-girder methods and balanced cantilever construction, underground tunnel construction using the new Austrian tunneling method, cut-and-cover and TBM (tunnel boring machine) methods, underground station construction using top-down and bottom-up approaches and elevated metro stations with expertise in the spine beam concept (lean). Kakrapar Atomic Power Plant, Gujarat, under construction LARSEN & TOUBRO L&T's Heavy Civil Infrastructure business is foremost among its peers for its pioneering achievements in the design, engineering and construction of projects in the areas of metros, nuclear, special bridges, hydel, ports, tunnels and defence. The business has a strong presence in India, the Middle East, Bhutan and Bangladesh. The goal of the business is to leverage its vast experience in project management, engineering design and construction management to become a one-stop total infrastructure solutions provider to both its domestic and international customers. Dedicated engineering design centres, competency cells, advanced skill-training centres, a wide network of consultants and vendors, digitised project control and a talented pool of employees help the business to maintain a leadership position, retain key customers, enter new geographies and secure major orders. Overview: km of electrification is expected to be awarded under the banner of 'Mission Electrification' over next three years. The business looks forward to achieving success in the majority of these opportunities. It intends to participate in the major portion of these projects through EPC tendering. ■ HEAVY CIVIL INFRASTRUCTURE multilateral agencies in select countries of South Asia (Sri Lanka and Bangladesh), Africa and the Middle East. As part of increasing the speed and safety of conventional high-density mixed corridors, there is a significant thrust towards European Train Control Systems – Level 2. In the first phase, the Indian Railways is installing ETCS level 2 on trial basis. This covers 4 sections of 640 RKM. A provision of 77,192 crore has been made in FY 2018-19. • Delhi - Sonpat - Panipat corridor of 111 km Delhi Gurgaon - Rewari - Alwar corridor of 180 km • • Delhi - Ghaziabad - Meerut corridor of 90 km The upcoming RRTS (Regional Rapid Transit System) in NCR region provides significant opportunities in system works. NCRTC is implementing RRTS in three elevated corridors on priority basis: All these projects provide good opportunities to the business. Risks and Concerns • Solutions for project monitoring through Procube (Mobile and Web combined application) Emphasis is laid on in-house training, with over 100 in-house trainers. They constantly update their technical knowledge by attending seminars and conferences and also their teaching skills by attending the 'Train the Trainer' programmes that are organised regularly. The business has initiated cost-reduction measures by reducing external hiring of equipment through optimum resource utilization across sites. It has also optimized bulk material usage by focusing on wastage control and process optimization for bulk material reconciliation. initiatives which are specific to linear projects. Prominent among them is the 'Central Control System on Track Vehicles Movement' which not only provides real-time tracking of machines, but also track-laying / completion status, collision-warning alerts and approaching LC gate alerts to both driver and LC gate operator. Extensive use of Project Management tools, such as TILOS, has resulted in efficient planning of complex mega projects and effective utilisation of P&M. L&T's Railways business is at the forefront of the implementation of innovative digital Significant Initiatives In the Dedicated Freight Corridor CTP 1 & 2 project, the business completed the trial run of a full-length goods train on the 664 TKM Rewari - Madar section. L&T's Mass Transit System business was successful in executing various projects, viz. the Delhi Metro U/G Electrification Package CE 08 (50 TKM), the Delhi Metro Track Package CT 11 (43 TKM) and the Lucknow Metro Electrification Package LKE 1 & 2 (51 TKM). During the year, L&T's Railways business successfully executed various projects, viz. Hospet - Harlapur Railway Construction, Rewari - Manheru Composite Project, Singapur Titlagarh Railway Electrification, Lucknow - Sitapur Gauge Conversion project. It also commissioned the Delhi Sarai Rohilla - Rewari section. Digitalisation L&T's Roads business was successful in executing various projects, viz. the 99 km Manwath-Bheed Road project, the 2-lane highway in Maharashtra, and the flyover from Jinjira Bazaar to Batanagar in West Bengal. Commercial operations commenced at Kannur International Airport in Kerala and Sindhudurg Airport in Maharashtra. Dhaka Metro, Bangladesh Table top runway for Kannur International Airport Outlook The Indian construction sector has witnessed healthy order inflows over the past few years, supported by the increased pace of infrastructure project awards – particularly from the transportation and urban infrastructure segment. Multiple reform measures in the infrastructure sector have also supported improvement in the pace of project execution. In the metro segment, new development phase projects coming up in Tier 1 and 2 cities, coupled with decongestion projects like Regional Rapid Transit System (RRTS), looks promising. Metro project packages that are expected in FY 2019-20 are Delhi metro phase 4, Chennai metro phase 2, Kanpur metro, Mumbai metro, Agra metro and Meerut metro among others. The Mumbai-Ahmedabad High Speed Rail Project is expected to begin shortly. It consists of various packages and notice inviting tender for package C2 underground tunneling and stations and C4 package - viaduct and station got released recently. Feasibility studies for other High Speed Rail (HSR) routes are also going on. The business has significantly contributed to the development of ports by designing and executing berthing structures including liquid jetties, container terminals, multipurpose berths and ferry terminals. LARSEN & TOUBRO A Chat Bot - QT has also been introduced to address queries that the employees may have regarding MORTH specifications and IRC codes. Digitalisation has become an integral part of business processes. It has opened up new-age capabilities to measure, analyze and improve on business performance, and even necessitated new sets of operational indicators like actual productive hours (or vice versa) and operations for key productive equipment. Initiatives include: 179 The business focussed on strengthening the base of the Organizational Pyramid and thus increased its intake of trainees and Front-Line Supervisors. Human Resources With its overarching safety framework, the business continues to progressively better the safety quotient of the projects it undertakes. occupational hazards and led to improved quality and adherence to safe practices. Despite all the accolades, the business continues to face challenges in creating a high level of safety awareness across linear projects spanning hundreds of kilometres. To combat the challenges, SPARSH, the Augmented Reality (AR) Application on Golden Rules of Safety and Virtual Reality (VR) training modules, have been implemented. This has increased awareness on quality as well as on It also won four prestigious safety awards from National Safety Council (NSC). The OPGC - MGR Railway Corridor project won the prestigious 'Shreshtha Suraksha Puraskar' (Silver Trophy) in the Construction sector for the year 2018, which is the second highest honour instituted by the NSC. During the year, the business won four International Safety awards, i.e. 2 Gold Awards and 1 Silver Award from RoSPA (Royal Society for the Prevention of Accidents) and a Pass certificate from British Safety Council (BSC). • Access of geospatial solutions through user-friendly portals for mapping topography, road layouts, project ROW, land status, obstruction management and linear progress monitoring which are helping project teams to Environment, Health and Safety • • 3D Machine Control System deployed on motor graders for automated control of its complex operation, doubling productivity and lowering manpower. plan and execute better with a higher degree of project progress visualization Sambalpur Rourkela Road Project Mafraq-Ghweifat Highway, Abu Dhabi MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS | ANNUAL REPORT 2018-19 180 New-age digital solutions such as QT and the Al Chat Bot on Highway Engineering guidelines on Quality specifications Medigadda Barrage Project, Telanaga - a part of the world's largest multi-stage lift irrigation project • Delhi Metro packages CC77 (Escorts Mujesar- Ballabhgarh Section of Violet Line) and CC27 (Hauz Khas - Vasant Vihar Section of Magenta Line) of DMRC In the area of special bridges, L&T has capabilities in bridge building cover design. It has extensive experience in executing a wide range of bridges of different span lengths using ingenious cutting edge construction techniques, viz. incremental launching, segmental construction, cable stay, precast, pre-stressed concrete, steel and concrete composite construction. A rail bridge on the Western Dedicated Freight Corridor section being built by L&T LARSEN & TOUBRO Station Building, Doha Metro Digital initiatives implemented include concrete management system, boulder / aggregate management system, bid preparatory system, digital monitoring of The business has implemented several digital initiatives to enhance productivity and operational efficiency. These include extensive use of BIM (building information modelling) across the whole life cycle of projects, project management tools, augmented/virtual reality-based training modules and geospatial drones. Digitalisation • Mumbai Metro project achieved the first breakthrough in tunneling September24, 2018 in metro line 3 workmen and plant and machinery, and digitised EHS audit reports. Balanced Cantilever bridge over river Gomathi constructed in a record time of 8 months for Lucknow metro project despite adverse geographical conditions using in-house-designed form travelers • 10-metre formwork was designed and implemented at the Meddigadda Barrage project • 16,722 cu.m of cement was poured on a single day December 22, 2018 at the Meddigadda Barrage project in Telangana Other Key Achievements • Mandovi Cable-Stayed Bridge in Panjim, Goa • Chennai Metro Underground Stations CMRL UG 02 (LIC, Thousand Lights and Government Estate Stations) and UG 03 (Nandanam, Agdms, Saidapet And Teynampet Stations) • Lucknow Metro Elevated Package LKCC07 (Kd Singh Babu Munshipulia Section of North-South Line) Projects Completed • Reverse circulation drilling rig deployed for the first time in India in Mumbai Trans Harbour Link Project • Underground metro packages in phase 2 of Bengaluru metro Environment, Health and Safety • Successful completion of the IMS transition audit from OHSAS 18001:2007 to ISO 45001:2018 (new standard) and recertification for ISO 14001:2015 Risks and Concerns To foster the development of a skilled workforce for the increasing quantum of underground metro work, the Tunneling Excellence Academy at Kancheepuram (near Chennai) has been inaugurated. This unique academy is dedicated to imparting skills and developing know- how across a broad spectrum of tunneling activities. Additionally, the business has also launched strong diagnostic-based organisational development interventions for various project sites in order to bring about strategic alignment and team cohesion. These interventions cover the entire staff at the site and draw keen involvement from the senior project leadership team. The business also conducts various employee engagement programs, communications sessions and town-hall meetings across office clusters and project sites. Lucknow Metro - one of the fastest completed metro projects in India ANNUAL REPORT 2018-19 MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS 188 187 To promote a healthy work environment among its employees, the business has updated and implemented EHS procedures, training and also the use of EHS leadership skills. These initiatives support the journey to achieve its vision of 'Zero Harm'. The business has launched the corporate EHS strategic plan 2018-19 with key EHS deliverables that have been implemented across all its operations. As part of the EHS strategy, the following significant initiatives were taken up during FY 2018-19: The talent development team conducts various competency-based training and development programmes, such as drive for results, communication and presentation skills and team development. In line with L&T's philosophy and strategic focus on human resource (HR) development, the business has been placing much emphasis on people development, engagement and building leadership for the future. The business has been continuously focusing on the attraction, retention and engagement of talent, the prime mover of success for the business. This helps to meet the evolving complexities and challenges for pioneering infrastructure megaprojects and their successful execution and achievement of Lakshya 2021 objectives. Human Resources categories from national and internationally renowned organizations, including NSC India, BSC, OSHAI and various client awards. Implementing key EHS training initiatives including Scaffold Inspector Competence Training for key EHS and formwork staff, IOSH Managing Safely Certification, NEBOSH Certification Courses, EHS Lead Auditor Training, ISQEM Approved Marine Safety Training and online EHS Certification Courses for all employees. In recognition of the impact of the EHS initiatives of the business, it has won various awards at different levels and Launching various apps in order to move towards the digitalisation of EHS and centralised control of EHS related standardisation in all projects • • Talent is nurtured across the business and with a focus on growing leaders through various initiatives. The business endeavours to create a learning environment that provides growth opportunities to all employees across projects through a Talent Engagement and Development Centre (TEDC) which was declared national winner in 2018 National Human Resources Development Network (NHRDN)'s 'best of breed' HR competition. L&T's hydel business has expertise in areas like diversion weirs, barrages, concrete / earthen / rockfill dams, including rcc (roller-compacted concrete) dams, underground tunnels of various geometry and diameter (both concrete lined and steel lined), open and underground de-silting chambers, large underground powerhouses and surface powerhouses, pressure shafts, drop shafts and surge shafts / surge chambers, hydro- mechanical components such as gates, penstocks, etc., including erection of electro-mechanical equipment and specialised underground structures. • Construction of Thane creek bridge connecting Mumbai to Navi Mumbai Major Achievements Orders Won The defence procurement procedure emphasises the utilisation of immense potential to leverage the manpower and engineering capability within the country to attain self-reliance in the defence sector. The concept of 'Make in India' remains the focal point of the defence acquisition policy/procedure. The Indian defence sector is of high strategic importance to the country. The Ministry of Defence has identified an urgent need to upgrade the country's defence infrastructure. Defence The vision of the Union Government is to implement metro rails across 50 Indian cities, with a network of more than 700 km within the next few years. More than 600 km of metro rail projects are under implementation in various cities in India. Robust growth continues to be expected in this sector in the coming years, with more than 1000 km of upcoming projects. The business has emerged as the prominent builder of metro systems in the country, having constructed 150 km of viaducts, 48 km of twin tunnels and 87 stations. L&T is also executing packages in Riyadh and Qatar metro, which are testaments to our technical prowess. Metros Infrastructure development is imperative for the economic development of a nation. The Government has identified infrastructure development as the key to India's growth and has initiated necessary steps to improve road, rail, ports, airports and strategic infrastructure to promote India's industrial output, while simultaneously tackling bottlenecks to boost GDP growth. Large-scale development of underground infrastructure for strategic assets is set to be undertaken by the DRDO, with an overall outlay in excess of 20,000 crore. Projects likely to be awarded include hardened shelters, hangars and IAF runways. Business Environment Cut-off-wall, Polavaram Dam, Andhra Pradesh Cable-stayed bridge across Durgam Cheruvu Lake, Telangana MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS ANNUAL REPORT 2018-19 184 183 L&T Geostructure LLP (LTGS) has expertise in deep piling and diaphragm walls, multi-cellular intake In the area of defence infrastructure, L&T offers single-point EPC solutions, from concept to commissioning, in the form of infrastructure facilities for defence bases, underground facilities, surveillance, etc. wells for river-linking, marine terminals with berths and jetties and deep cut-off walls. These activities are facilitated by specialist staff and state-of-the-art equipment. • Mumbai coastal road project Nuclear Power Riyadh Metro - L&T is building metro networks in India and select geographies (string of ports) project is also on. Private investment in the port sector has picked up pace recently. Marine infrastructure projects involving dry-docks, marine intake structures and defence naval base projects are expected to kick start in FY2019-20. Mumbai Trans Harbour Link MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS ANNUAL REPORT 2018-19 186 185 To continue its support to the port sector, the Government has announced a 10-year tax holiday to enterprises that develop, maintain and operate ports, inland waterways and inland ports. Plans to develop 10 coastal economic regions as part of the vision to revive the country's Sagarmala Ports and Harbours India's total nuclear power generation capacity is 6219 mwe, which comprises 3 percent of the country's overall power generation. Its energy policy calls for 25 percent of electricity to be generated from nuclear power by 2050. In the domestic arena, the business is expecting the Government to move forward with a proposal for 10 PHWR fleet reactors. India ranks 5th globally in terms of exploitable hydro- potential. As per the assessment made by CEA, India has economically exploitable hydropower potential to the tune of 148,700 MW of installed capacity, whereas only 48,974 MW (33%) has been commissioned to date. In addition, 56 pumped storage projects have also been identified with a probable installed capacity of 94,000 MW. In totality, India is endowed with hydro-potential of about 2,50,000 MW. The domestic hydel sector is gathering pace this year, with the Government clearing a few hydel projects. Jammu & Kashmir has predominantly become the focus of the domestic hydel scene. Orders likely to be awarded in the upcoming years include the 1856 MW Sawalkote HEP, the Kalpasar Project - Bhadbhoot Barrage, the Lakhwar HEP, the Par-Tapi-Narmada Link Project, the Damanganga Pinjal Link Project, the 1000 MW Tunga PSP and the 850 MW Ratle HEP. • BRICS funding for Pan Bazaar bridge in Guwahati, Assam • World Bank funding for Sharda river bridge project in U.P. The Government has approved new DFCC packages such as the east-west corridor between Kolkata and Mumbai, the north-south corridor between Delhi and Chennai and east coast corridor between Kharagpur and Vijayawada. These projects are expected to bring in new business in the coming years. • JICA funding for high speed rail • JICA funding for Dhubri Phulbari bridge in Assam India is witnessing significant interest from international funding agencies like JICA, the World Bank, ADB and BRICS in the infrastructure segment, specifically in mega bridge construction projects. Key investments in bridge infrastructure include: Special Bridges In May 2017, the cabinet approved a fleet of ten 700 mwe PHWRs at Hissar (Haryana), Kaiga (Karnataka), Chutka (Madhya Pradesh) and Mahi Banswara (Rajasthan), as a 'fully home-grown initiative' for about 700 billion (USD 10 billion). LARSEN & TOUBRO Hydel and Tunnels Key to the success of the business is its emphasis on excellence and efficiency in operation management with a strict focus on principles of good governance. Major risks for the business are delay in obtaining right of way (ROW), work front approvals / clearances and design approvals. Risk management involves methodical identification of the risks surrounding the activities of the business, while reviewing and identifying the events and the probability of their occurrence, in tandem with creating and systematizing the tools required to tackle them. It requires supervising the risk management approach, effectiveness and control. The business promotes and monitors internal risk management practices in each of its business segments through board- work. The risk team ensures appropriate systems of risk management and internal control. Ahmedabad Kattupalli Coimbatore Pulicat Bengaluru Mysuru A Vijayawada ▲⚫Hyderabad Visakhapatnam Pune Ahmednagar Talegaon Lonavala Panvel Bhubaneswar Madh A Mumbai Raipur Nagpur Cuttack▲ Hazira Rourkela Serampore Kolkata Ranchi Jamshedpur Vadodara J D Patil Defence Chennai Kancheepuram Puducherry L&T-NxT Kochi Registered Office RESPONSIBILITY CORPORATE SOCIAL CORPORATE SOCIAL RESPONSIBILITY ANNUAL REPORT 2018-19 14 LARSEN & TOUBRO 13 For details of establishments within India, please refer to 'Nationwide Network'. Note: Map is broadly representative of L&T's presence in markets worldwide. ■ Agents ◆ Manufacturing / Fabrication Facilities ▲ Product & Equipment Supply Engineering & Construction Projects ★ Offices GLOBALPRESENCE входа This pictorial representation does not purport to be the political map of India. + 'Campus' denotes facilities for design and manufacture * Part of L&T's Corporate Social Initiatives Corporate Technology and Engineering Academy Construction Skills Training Institutes* Leadership Development Academy Knowledge City Offices Shipyards Campus+ Power Plant Guwahati Y S Trivedi Heavy Engineering Shailendra Roy JVs/ Subsidiaries • L&T MBDA Missiles Systems Ltd. • L&T Shipbuilding Limited Defence Shipbuilding •Warships- New Build •Warship Refits Nuclear Nuclear Power Equipment & Systems •PHWR ⚫ITER • FBR • LWR •ATVP Process Plant • Refinery, Cracker, Oil & Gas and Coal Gasification • Fertilizer, Engineering Systems • Weapon & Communication • Military R Shankar Raman LARSEN & TOUBRO Keshab Panda Sanjay Jalona Dinanath Dubhashi Shailesh Phatak Yogi Sriram Corporate Affairs Power Power Development Technology Services L&T L&T Infotech L&T Finance Holdings Rainwater harvesting through an anicut, at Village Kemriya, Bhim Block, Rajasthan Corporate Finance & Accounts Corporate HR Defence & Aerospace • Submarines & Underwater Platforms Guns & Armoured Systems, Missiles & Aerospace Systems Infrastructure Development Projects Petrochemicals Contributing towards Social Development and Growth Prayas Trust, driving CSR initiatives in their own capacity and reaching out to remote communities. Psychological health: Psychiatric OPDS and family counselling services address mental health and stress related issues, while a Child Guidance Clinic helps younger members of the community. General Surgeries, Endoscopy Procedures and Dental Procedures. It also provides eye check-ups, mother and child health care, physiotherapy and occupational therapy, infertility treatment, hearing-speech services and a skin clinic focusing on leprosy treatment and communicable diseases. Physical health: Health Centres offer tertiary health services including Family Planning surgeries, Day Care Health Centres: A team around 90 well-qualified medical and rehabilitation consultants and 3 professionally staffed, well-equipped multi-speciality centres provide the following services: Interventions L&T's CSR programme in the health sector aims at making quality health care services accessible and affordable without anyone having to face financial hardship. L&T focuses on strengthening the government health programme like family welfare, mother and child health, HIV-AIDS, Tuberculosis, Blindness Control, Diabetes detection and treatment and reproductive health services. It also provides services related to lifestyle diseases like hypertension and cardiac problems. HEALTH • 2,23,023 students covered through our education projects this year. • 350 schools gained better facilities that increased enrolment and retention of students Impact School Management Committee (SMC) and parents are invited for a dialogue to encourage students to continue the education, as well as for sustaining L&T's efforts in future Patient check-up for TB respiratory diseases at Koldongri TB Clinic LARSEN & TOUBRO Mobile Medical van operated by Stree Mukti Sanghatana in New Mumbai slums - परिसर विकास सेंटर h Centre Mobile Clinic ST stoidi stro 16 • Creating learning environment: The community level Children are also given inputs on life skills and extra curricular activities such as dance, music and drawing Educational and recreational outings are organised Specialised health camps are organised for children for eye check-up, early detection and treatment of anaemia, malnutrition and other childhood diseases. Education sessions on health and hygiene with children and adolescents are conducted for preventive care and for promoting healthy sanitation practices. Overall development of children: This year, L&T's Andheri Health Centre completed 50 years of service. The interior structure was refurbished for better organization and crowd management. The refurbishment increased waiting space and facilitates patient education. There is a separate space for registration, a nurses desk and a dispensary. New services have been introduced, such as Ultrasonography with 2D Echo, spacious pathology with electrolytes, an opthalmology unit and health-check-up packages. • Health Camps: • Specialised health camps covering Eye care, Anaemia diagnosis and treatment, Basic and rubella vaccination drives, Skin ailments, Geriatric care, Dental, Paediatric and Gynaecological care 8769 youth completed various courses at CSTIs this year 19798 people have been trained in employable vocational skills this year. • Impact: • Vocational training for women: At many L&T sites local women, young girls and physically-challenged persons are trained in various employable skills as per their interests and aptitude. The skill courses include Tailoring, Embroidery, Beautician Course, Food processing, Home Management, Computer skills and Basic Education and Basic Health. Construction Skills Training Institutes (CSTIs): L&T runs 9 CSTIs in 8 states, providing free training in construction skills for the large unorganised workforce in the sector, making them employable. • Interventions Skill development has emerged as a key strategy to realize the potential of demographic advantage of having the youngest workforce with an average age of 29 years in India. L&T's Skill Building initiative aims to create human resources for improving the country's competitiveness and growth, especially in the field of Construction skills by training the youth. SKILL DEVELOPMENT Impact: 255000 Lives touched through various health services cervical and breast cancer through cancer detection camps. Cancer detection camps: Targeted at women, L&T promotes preventive education and early diagnosis of Dialysis centres: 3748 dialysis sessions have been conducted with over 50 patients at the L&T-run kidney dialysis centre at Thane This year a Gene Expert Study machine introduced at Koldongri Clinic as an extension to the TB programme along with appointment of a Laboratory technician L&T runs an exclusive TB clinic in Koldongri, in the suburbs of Mumbai, in partnership with the Municipal Corporation of Greater Mumbai (MCGM) providing CAT I, II and IV treatment to the patients, with a cure rate of 85-90% TB related services: Comprehensive TB related treatment in Mumbai including individualised treatment OPD, check- up, diagnostics, medicines and nutrition support, home visits and counselling Specialised health promotion programme with focus on hygiene, reproductive health and family life education for children and adolescents in Government remand and corrective homes and homes for neglected children HIV and AIDS Management Programme: L&T's state- of-the-art Anti-Retroviral Treatment (ART) centre provides diagnostic, medical and counselling services in association with National AIDS Control Organisation (NACO). • 18 Training with Bar-tying machine, CSTI, Serampore, Hooghly, West Bengal Bar Bending training in progress, CSTI, Serampore, Hooghly, West Bengal CORPORATE SOCIAL RESPONSIBILITY ANNUAL REPORT 2018-19 17 • Two mobile health vans cover marginalised communities across in and around Mumbai including Mumbai slums and tribal blocks near Thane and Ahmednagar • Capacity Building: Teacher Training programmes are conducted to enhance the quality of education being imparted to students studying in Government schools and low-income Trust-run schools. To facilitate the access to e-learning technology rural and tribal students, L&T has provided computer labs and digital classrooms in several peri-urban and rural schools. L&T has supported Government initiatives and sponsored Mini Science Centres in rural schools, simplifying complex scientific concepts and equipped science laboratories for practical application of learning Mission of by Government of Rajasthan by awarding it for being the best sanitation programme in the state. • Construction of over 4000 well-designed household toilet-cum-bathrooms and over 300 school toilets of which 1108 HH toilets and 117 school toilets were built in 2018-19. This work was recognised under Sanitation • Community-based monitoring committees to deter open defecation. The Swachha Bharat Program of GOI gave the necessary impetus to initiate the sanitation drive in villages. L&T trained local youth in masonary skills and used local materials to achieve the following: WASH Initiatives additional income generation benefitting 1800 no. of families. Agri-based livelihood options were created for community members also devised methods that improve the arability of land. . • • The community groups like Village Development Committees (VDCs), Farmers Groups with 50 per cent participation from women and Self Help Groups (SHGs) were created. They assumed the responsibility to maintain the structures created through the project. Farmers were trained in agricultural practices with optimal use of water and use of zero-budget natural fertilisers to retain the fertility of the land. The contribution of the community, helped in increasing the water level in the water bodies in these villages and retain soil moisture. Computer lab set up in Dr. Manibhai Desai Madhyamik and Uchhatar Madhyamic School, Chondha Village, Navsari district, Gujarat LARSEN & TOUBRO Handpump at Village Upla Karkala, Gram Panchayat Lasadiya, Bhim Block in Rajasthan 20 • The water and soil conservation structures like check dams, anicuts, contour trenches, farm bunds and farm ponds constructed with the participation and Interventions integrated community development, we have ensured water availability for drinking, sanitation and agriculture. The Integrated Community Development Program of L&T started in 2014-15, focused on making water - the very 'necessity of life' - available to six water stressed districts in Rajasthan, Maharashtra and Tamil Nadu covering 20100 households across an area of 16844 hectares. With an agenda focused on community empowerment through WATER & SANITATION Through the CSR theme 'Building India's Social Infrastructure' we are glad to contribute to social change in India. Here is a snapshot of our CSR interventions across four key thrust areas. In the recent years we consolidated CSR programmes with a focus on certain development areas that align with the global and national development agenda. L&T received the highest '4 Good' rating in the annual The Economic Times '2 Good 4 Good' CSR Rating Scheme based on its performance and impact created in CSR in the period 2016-18. A total of 35 companies participated this year in the rating scheme presented by The Economic Times, with knowledge partner KPMG. Impact • Access to water for drinking, sanitation, irrigation, cultivation of fodder and extra crops • Ensured water availability to 10558 households • Increased land productivity by converting 46% of fallow land to cultivable land • Focus on Science and Technology: generation learners and children from weaker sections. Efforts are directed towards designing a curriculum for easy learning that is aligned with the school curriculum. • Afterschool community study centres offer supplementary education and reach out to the first- - Training of Trainers for Balwadi teachers for capacity building - Toy vans sent to anganwadis provide necessary childhood development activities • Balwadi programme: L&T strengthens early childhood development programme by improving the quality of balwadis and anganwadis in urban slums and rural areas, ensuring entry into the mainstream education system and improved enrolment in the primary schools. - Supplementary food is provided in tribal balwadis. • Educational support: Supplies like uniforms, text books, note books and sports kits are provided to under- privileged students in government and unaided low- income schools in rural and tribal villages Basic Infrastructural support includes construction or repairs of the classrooms, toilet blocks and water stations for basic hygiene facilities, midday meal kitchens and sports grounds. . Interventions community. The future strategic plan for interventions in the education sector includes initiating the STEM Education Project in resource-poor government schools to teach Science and Math through hands-on models and digital content for better comprehension and encouraging curiosity and scientific rigour among students in government schools. L&T is an engineering and construction conglomerate with a concern for the community. Building on over eight decades of social responsibility activities, the Company contributes to inclusive growth by empowering communities and accelerating development through interventions in water & sanitation, health, education and skill development. L&T-eering, a structured volunteering programme, inspires and empowers employee volunteers or L&T-eers to contribute their time to community development programmes supported by the Company, thereby enhancing L&T's social impact even further. The employees' wives and female employees power the About 300 School kits issued to various tribal and rural schools located near SSC Talegaon, Government Primary School at Village Diwad, Block - Maawal, District Pune, Maharashtra <-10 जिल्हा परिषद प्राथमिक शाळा and for पुढ CORPORATE SOCIAL RESPONSIBILITY ANNUAL REPORT 2018-19 15 We commit ourselves to fulfill the dream of reaching education to each and every child. This is done by making schools accessible, helping retaining children in school by improving the quality of education in terms of introducing relevant curriculum, improving teaching methods, providing infrastructure for a coducive learning environment in schools and ensuring parent and community partcipation in creating a learning environment at home and in the EDUCATION The Kookara - Lasariya watershed project, Bhim Block of Rajsamand District Rajasthan, enabled water holding of 6948 lakh litres in one year (2018-19) and made 54 hectares of barren land cultivable. Improved economies, for 18300 households, raising the aspirations of the people • • 40 hamlets, 11 revenue villages and 2 gram panchayat are ODF benefitting 1108 families this year Science laboratory set up for high school students of Dr. Manibhai Desai Madhyamik and Uchhatar Madhyamic School, Chondha Village, Navsari district, Gujarat Bhopal Pithampur & Thermal • Modification, • Analytics, Al and Cognitive • Enterprise Integration and Mobility Platform Based Solutions • Micro Loans Housing Finance • Real Estate Finance • Infra Finance • Mutual Fund • Wealth Management Management • Investor Relations • Taxation • Insurance • Power Transmission Corporate Secretarial N. Hariharan Corporate Audit Services W. P. Parthasarathy Corporate Centre Ramesh Swaminathan Testing Corporate Strategy & Special Initiatives Anup Sahay Services • Infrastructure Entertainment Process Engineering • CPG • Chemicals ⚫ Oil & Gas Medical Devices & Life Sciences Horizontals • Digital Engineering (Smart Manufacturing & Products) • VLSI Design Services • Mechanical Engineering • Embedded Engineering • Verification & Validation Application Development Maintenance • Enterprise Solutions Management Construction EPC Projects Manufacturing don't dream of change. They engineer it. At Larsen & Toubro, we know what it take to change the game. We draw on our rich engineering heritage. We cultivate the finest minds. And we partner nations, to build a newer, brighter future for all. Over 80 years of engineering excellence Smart Cities | Construction | Infrastructure | Defence & Aerospace Special Steels & Forgings | EPC for Steel and Power Plants | Equipment for Oil & Gas Technology, IT and Financial Services | Realty For more information about L&T's capabilities, please email: infodesk@Larsentoubro.com Regd. Office: Larsen & Toubro Limited, L&T House, N. M. Marg Ballard Estate, Mumbai - 400 001, INDIA CIN: L99999MH1946PLC004768 LARSEN & TOUBRO LTCBMC/PRD/072018 12 NATIONWIDE NETWORK & GLOBAL PRESENCE ANNUAL REPORT 2018-19 NATIONWIDE NETWORK Chandigarh Rajpura New Delhi Faridabad Jaipur Udaipur Lucknow Varanasi Durgapur Game changers www.Larsentoubro.com As on 1st June, 2019 Electrical & Automation Services Others Jamnagar 9 LEADERSHIP TEAM ANNUAL REPORT 2018-19 LEADERSHIP TEAM A. M. Naik Group Chairman S. N. Subrahmanyan CEO & Managing Director • Media & R. Shankar Raman Whole-time Director & Subramanian Sarma Non-Executive Director, L&T CEO & Managing Director (L&T Hydrocarbon Engineering) Sr. Executive Vice President (Power) D. K. Sen Whole-time Director & Sr. Executive Vice President (Infrastructure) M. V. Satish Whole-time Director & Sr. Executive Vice President (Buildings, Minerals & Metals) J. D. Patil Whole-time Director & Sr. Executive Vice President (Defence, L&T-NxT) 10 Hasit Joshipura Sr. Vice President & Head Chief Financial Officer Power ISV • Consumer • Risk Projects • Gas-based Projects • Nuclear Projects Enviro Systems • Electrostatic Precipitators • Flue Gas Desulfurization • Selective Catalytic Reduction Manufacturing • Ultra Supercritical and Supercritical Boilers • Ultra Supercritical and Supercritical Turbines & Generators • Pulverisers • Nuclear Turbines & Generators • Nuclear Primary and Secondary Piping Systems • Two Wheeler Finance • Heavy Foundry • Treasury • Farm Equipment Finance Revamp, Upgrade Services • Process Plant Internals • L&T Piping Center Subsidiaries • L&T Special Steels & Heavy Forgings Pvt.Ltd. • Coal-based Products • Ports • Metros EPC Projects • Development Verticals Verticals • Finance • Roads of Thermal • Banking and Industrial Products Financial • Accounts • Axial fans • Rotary Air Pre-heaters Transportation • Automotive Truck & Off- Highways • Aerospace & Rail Telecom & Hitech • Telecom & Infra Services Insurance • Manufacturing Energy and Utilities • Consumer Packaged Goods, Retail and Pharma • High-Tech, Media and Entertainment • Others - Defense - Travel and Logistics -Services Services Offerings • Semiconductors (Horizontals) & Power • Electrical, Drives • Machinery & Equipment Infrastructure • Construction Capability Unit • Energy Products & Systems Engineering • Power Training Institute Joint Ventures • L&T MHPS Boilers • L&T MHPS Turbine Generators • Electronics & • L&T Howden for Engineering & Design • L&T Sargent & Lundy and Hydro Power Plants • L&T Uttaranchal Hydro Power Limited • Nabha Power Limited • Building Automation & Smart Joint Venture As on 1st June, 2019 S. N. Roy Whole-time Director & L&T's Solar business provides single-point EPC turnkey solutions for solar PV related projects along with energy storage solutions. Its experience ranges from flat to highly undulated as well as to landfill topologies, with specialized technologies including designing and executing contour-following solar PV power plants. The solar business has in-house capabilities to produce different module-mounting structure types - such as Fixed Tilt, Seasonal Tilt and HSAT offering the customer a range of solutions. As grid stability and power conditioning requirements gain significance in the wake of large-scale renewable integration, standalone and PV integrated storage solutions are being offered, ranging from rooftop systems to floating solar systems. • Various solar PV EPC orders • The first-of-its-kind solar PV + 8MWhr storage project • 220 kV Transmission System in Africa, marking entry into both substation and transmission line sectors in the African market • Many orders for developing 132 kV substations and 132 kV cable sections in UAE • A major power system revamp order of more than USD 100 million from an oil & gas customer in Algeria 400 kV Ibri-Izki Transmission Line, Oman 250 MW Solar PV Plant at Rewa, Madhya Pradesh • Construction of over 500 MW capacity of grid-connected solar PV plants across India LARSEN & TOUBRO • 'Best Performing Power T&D Organization' award from Central Board of Irrigation & Power • Award for Outstanding Contribution to 100% Electrification of Bihar • Excellence awards from Power Grid for Transmission Line and Substation construction under various categories • Solar technovation awards under three categories from Solar Quarter. ⚫ Best Solar EPC Company and Best Microgrid Company awards from EQ International • Recognition by Navigant Research as one among the top ten global players in microgrid The business earned many awards and much recognition during the year for multiple initiatives. These include: Taqdeer award from Government of Dubai for excellence in labour welfare practices • Electrical Main Plant package for Kudankulam Nuclear Power Project expansion • Power Supply System - involving receiving substations and the EHV cable feeders from grid substations - for Bengaluru, Mumbai and Dhaka Metro projects MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS | ANNUAL REPORT 2018-19 132/33/11KV Substation, Umm Al Quawain, UAE transmission line of 220 kV, which augurs well for the strengthening of L&T's position in Upper East Africa. Consolidating the breakthroughs achieved in countries forayed into, exploring renewable energy opportunities and opening up of select West African countries will hold the key to success in the coming year. With on-schedule completion of the projects in Malaysia and Thailand, the business has demonstrated its capabilities and has won recognition in the ASEAN market. Major Achievements Projects Completed and Commissioned • 765 kV and 400 kV transmission lines from a reputed TBCB player . • Transmission corridors exceeding 3000 km • 220 kV Drass transmission line in Jammu & Kashmir • 400 kV Khandwa-Pithampur-Bhatnawar corridor in Madhya Pradesh • 400 kV Yermarus- Bellary transmission line in Karnataka • A major part of a large-scale BESS project in Andaman Islands • 28 substations and over 1400 km of overhead and underground transmission corridors in the Middle East Orders Won Several key 400 kV and 765 kV substation projects including those at Tughlakabad, Tumkur, Baripada and Gwalior 192 • MEED Quality awards for substation projects in Kuwait and Saudi Arabia • ASSE GCC HSE Excellence awards for several projects in Middle East Committed to the development of its people, the business endeavours to create an ecosystem that addresses performance and contributes to its success. Employees are given opportunities to develop their skills and capabilities through on-the-job experience. These are supplemented by robust classroom programmes. The L&T Institute of Project Management and the Indian Institute of Technology, Madras have partnered to create bespoke programmes in Project Execution, Projects Management and Engineering & Design Management. These programmes implement the development plan through peer interaction, experiential learning, case studies and simulation and faculty intervention. 240 young managers underwent training in the IPM/IIT programme during the year. In keeping with the increasing presence in international markets, the business is building a cadre of young professionals drawn from various nationalities. The Graduate Engineer Trainee scheme was extended to Saudi Arabia, Kenya and Botswana and 30 trainees joined this year. This initiative will be strengthened by inducting Large scale solar cum storage project in Andaman 400/132kv Substation, Nkhoma, Malawi LARSEN & TOUBRO trainees from Egypt, Algeria, Thailand and Tanzania in the coming year. Risks and Concerns Human Resources The diversification attempts by CPSUs like Power Grid and NTPC, logistical and design aspects, the general elections in Q1 of FY 2019-20, the financial health of state utilities and fund availability will remain key determinants for the business. Outlook In the substation business, the increasing cost of land acquisition related delays have led power grid / state utilities to increasingly opt for GIS substations due to the smaller footprint they occupy. On the power distribution front, crucial issues remain - the centrally-driven scheme for last-mile connectivity and various distribution reforms projects by State DISCOMS for reduction of AT&C losses, power factor improvement, network strengthening in disaster prone areas etc. Urban power infrastructure is expected to get a makeover with underground cable networks, advanced metering facilities, etc. aiming at multiple objectives such as improving reliability of power, making the network disaster resilient and improving the aesthetics of cities of tourism and heritage importance. As the power transmission / transformation capacities to cater to the growing demand of urban centres increase, new opportunities will arise for EHV cabling projects in large cities. Grid integration of intermittent renewable energy and the emerging prospects of distributed generation require investments in power quality devices such as STATCOM and SVC to ensure voltage stability, reactive power compensation and reduction of harmonics. It is expected that the investments in higher voltage levels viz. 400kV & 765kV from state transmission utilities - including those affected by funding delays - will gather momentum. The delayed second phase orders of Green Energy Corridors are likely to be awarded in the coming year. The Tariff Based Competitive Bidding (TBCB) space is witnessing consolidation with 2 to 3 major players in the fray. Increasing number of projects are likely to get allocated through TBCB mode. L&T's Transmission Line business offers turnkey EPC solutions for overhead lines for power evacuation and transmission, bolstered by its state-of-the- art tower manufacturing units at Puducherry, Pithampur and Kancheepuram, which have supplied over sixteen lakh tones of tower components, over the years. The Testing and Research station at Kancheepuram is accredited by NABL (National Accreditation Board for Testing and Calibration Laboratories) and is one of the largest in Asia, apart from being amongst the most renowned testing centres in the world. In the Middle East, input costs are bound to increase with the introduction of VAT and removal of subsidies on fuel, power and water. Prioritization of spending / budgetary allocation, the friction between Qatar and other Gulf countries, the slowdown in Oman and related delays in project finalization are potential risks. With growing business opportunities and increasing contractual exposure to customers in domestic and international markets, efforts are being made to integrate a well-established risk management framework into business operations. • EIA Compliance Award for Marudi substation project from Sarawak Energy Berhad, Malaysia • Various awards were received from and recognition accorded by international and national organizations like FICCI, ROSPA, BSC and NSC. Appreciation certificates were received from clients for implementing EHS management systems and achieving millions of safe man-hours. ⚫ EHS Mobile application: 10 modules were developed, including an EHS Observation Log to identify unsafe acts and condition and action taken. Significant Initiatives The business has augmented its capabilities for building digital substations, linear solar plants and certain packaged solutions for solar applications. The tower-component manufacturing capacity has been augmented to cater to the demand of adjacent segments and more countries. Several operational excellence initiatives in the areas of on-time delivery, profitability enhancement, working capital management and risk management are being pursued. A unique set-up for integrated, real-time scheduling and monitoring of projects to aid the site team for improved project delivery has been operationalised. Digitalisation With a major thrust on Digitalisation as a key enabler, the initiatives rolled out across the business lines in recent years have started to bear fruit. These initiatives include efficiency improvement and next level of automation in factories, 3D/4D BIM, deployment of drones and mobility devices for project progress monitoring, connecting plant and machinery for asset monitoring, using geospatial technologies for surveys, integrated material management, quality incident reporting, etc. 193 EHS Training & Awareness programme: A workshop was conducted for key project managers on effective implementation of EHS Management System process, Safety Challenges faced at site while implementing the EHS Management system and Learning and Knowledge on best practices followed. 194 275/132/33kV Gas Insulated Substation, Samalaju, Malaysia State of the art Tower Manufacuring Facility, Puducherry Environment, Health and Safety EHS practices in business are aligned with a corporate EHS policy that is strictly followed along with clear policies laid out at the business level as well. An external IMS audit by BVQI was completed and certification obtained. The EHS policy is supported by standard operating procedures (SOPs) at the business-unit level and the aim of 'Zero Harm' is cascaded down to the project level through various digital and technical initiatives as follows: • Virtual Reality initiatives: Implemented Virtual Reality 9 modules in 9 languages for Transmission Line (TL) and Sub Station (SS) Business Units for workmen. ◆ 4 HTC Vive Virtual Reality Interactive training modules were developed in English and Hindi for frontline supervisors and staff at sites. MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS ANNUAL REPORT 2018-19 191 • 765 kV Jharsguda-Angul transmission line for PGCIL, Construction opportunities in the neighbouring SAARC countries witnessed significant momentum. In the Middle East, though the macro-economic scenario was mixed in FY 2018-19, witnessing capex cuts and intensifying competition, L&T garnered a major portion of the opportunities that arose. Coupled with the re-entry into the 132 kV cable segment, this augurs well for the business in a country where there are significant opportunities. Larsen & Toubro Saudi Arabia LLC (LTSA) is a wholly-owned subsidiary providing engineering, construction and contracting services in the sphere of T&D in the Kingdom of Saudi Arabia. Business Environment With the continued thrust on achieving electrification of 100% households through a slew of Government Bringing light to 30,000+ villages across India 380 kV Switching Station, Saudi Arabia In Kuwait, significant investments, such as township development, are witnessed. In Africa, the business has made an entry into Tanzania through a substation and • Coimbatore and Vellore Sewerage Schemes, Tamil Nadu The Middle East Business Unit caters to the UAE, Saudi Arabia, Qatar, Oman, Kuwait and Bahrain. The African unit is currently focused on the northern and eastern regions, having established a presence in Algeria, Morocco, Egypt, Kenya, Ethiopia, Malawi, Botswana and Tanzania. L&T is executing projects in the ASEAN countries of Malaysia and Thailand, while seriously pursuing opportunities in the other countries of the region, including Myanmar and the Philippines. • Multi Village Rural Water Supply Scheme to Satna Bansagar from Madhya Pradesh Jal Nigam • ISP Kalisindh Project - Phase I and Parwati Project - Phase I from Narmada Valley Development Authority, Madhya Pradesh In FY 2018-19, the business won several repeat orders, and added 6 new customers. The orders won came from a diversified portfolio of rural and urban water supply schemes, water management, integrated infrastructure development, lift irrigation schemes, effluent treatment plants and underground sewerage schemes. These include: Major Achievments L&T has been setting benchmarks by creating water infrastructure to irrigate 7.3 lakh hectares of land, transport water and sewerage through 5 lakh km of pipelines, supply 5100 MLD of potable water and treat 2100 MLD of wastewater. All these projects cater to the needs of more than 90 million people. Huge opportunities are available in the Middle East, ASEAN countries and East Africa. There is a positive outlook towards these prospects and consistent business development efforts are being driven to enlarge the global footprint of the business. Governments and courts have mandated the use of tertiary-treated wastewater to meet the water requirements of industries. The Government is driving infrastructure development through various schemes such as the National Rural Drinking Water Programme (NRDWP), AMRUT (Atal Mission for Rejuvenation and Urban Transformation), Namami Gange, Pradhan Mantri Krishi Sinchayee Yojana and Delhi- Mumbai Industrial Corridor Development. In addition, large investments have been proposed by multi-lateral funding agencies for water supply and sewer projects to improve the quality of urban life. • Athikadavu Avinashi Irrigation Project from Water Resource Department, Tamil Nadu The international units of the business in the Middle East, Africa and the ASEAN region offer complete solutions in the field of power transmission and distribution. These include substations, power transmission lines, EHV cabling, distribution networks, solar plants and Electrical, Instrumentation and Controls (EI&C) works for infrastructure projects such as airports, oil & gas industries, etc. - 55 MWp Solar Tracker Plant at Theni, Tamil Nadu 220 kV Alusteng-Drass Transmission Line, Jammu 765 kV Gas Insulated Substation, Hyderabad INFRASTRUCTURE BUSINESS | ANNUAL REPORT 2018-19 MANAGEMENT DISCUSSION AND ANALYSIS 190 189 L&T's Power Distribution Business Unit provides a range of EPC services related to urban / rural electrification including last-mile connectivity, augmenting, reforming and strengthening of high voltage and low voltage distribution networks, distribution automation solutions and power quality improvement works. In addition, the business executes aerial / underground communication backbone networks, typically spread across a vast geography. L&T's Substation Business Unit focuses on providing turnkey solutions for Extra High Voltage (EHV) air insulated / gas insulated substations for utilities and power plants, EHV cable systems and complete electrical and instrumentation solutions for various infrastructure projects, such as metros, airports, etc. It offers integrated solutions and end-to-end services ranging from design, manufacture, supply, installation and commissioning of transmission lines, substations, underground cable networks, distribution networks, power quality improvement projects, infrastructure electrification, solar PV plants including floating and linear solar, battery energy storage systems and mini / micro grid projects. Besides being a dominant player in the Indian subcontinent, the business enjoys a significant share and a strong reputation in the Middle East, Africa and ASEAN markets. L&T's Power Transmission and Distribution business vertical is a leading EPC player in the field of power transmission & distribution and solar energy. Overview: ■ POWER TRANSMISSION & DISTRIBUTION The continuous thrust of the Government on increasing nuclear power capacity of the country provides various business opportunities in the nuclear business. The business is expecting the Government to move forward with a proposal for 10 PHWR fleet reactors. New opportunities are emerging for road and railway tunnel projects in Maharashtra and the northern Himalayan States of Jammu & Kashmir and Uttaranchal. The business sees future opportunities in ports. The 'Sagarmala Project' initiative focuses on the upgradation and development of new ports as a promising prospect for the future. Opportunities are expected for marine infrastructure projects involving dry-docks and marine intake structures. River-linking projects provide major business opportunities in the coming years. LARSEN & TOUBRO The Indian water infrastructure market is growing steadily. The demand-supply gap in both urban and rural areas has increased. It is imperative to focus on creation of wastewater infrastructure to boost the quality of urban life. The increasing population necessitates increase in agricultural produce and more irrigation schemes. Business Environment • Garwah Lift Irrigation Scheme from Water Resource Department, Government of Jharkhand 74 MLD Water Treatment Plant at Bisalpur Tonk Unniyara With a strong domestic solar portfolio backed by experience and expertise, the solar business is geared up to enter international markets as the renewable opportunities galore in countries where there is already an established presence in the T&D sector. Advanced battery energy storage solutions will see a rise due to grid stability requirements and the need to electrify rural households. With upcoming state solar policies focusing on rooftop projects with net metering schemes, the prospects for the rooftop segment look positive. To harness solar power for rural India, the Government of India has formulated the 'Kisan Urja Suraksha evam Utthaan Mahabhiyan' (KUSUM) scheme, which aims at solarizing the agriculture sector through the ubiquitous use of solar power for tube wells and lift irrigation projects. Emerging areas like floatovoltaics and hybrid projects hold promise. The solar power market is poised to remain upbeat, with yearly solar capacity additions pursuing an upward trajectory. The private PPA market in select states is expected to pick up based on encouraging open-access policies and growing solar power viability. Clarity emerging on GST and duties will help the sector, with capacity addition of more than 10 GW of solar capacity in the coming year. The power supply system prospects for various metro projects are visible, especially in the Central and Western parts of the country. With an established presence in Nepal and Bangladesh, the business is better positioned to exploit the upcoming transmission line and substation opportunities in those countries. Micro Grid Project for rural electrification, Bihar MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS ANNUAL REPORT 2018-19 196 In the Middle East, the business is cautiously optimistic in its outlook as oil prices are hovering in the lower ranges, commodity prices are fluctuating, fierce competition is faced and changes are being introduced in the customer organization / bid process (example: newly formed Department of Energy in Abu Dhabi). Infrastructure development will continue to be driven by mega events like Dubai EXPO 2020, FIFA 2022 and grand plans such as Saudi Vision 2030, Qatar National Vision 2030. Further, growth in power distribution throughout the Middle East is expected to be fuelled by GCC grid formation, upgradation to higher voltage levels, integration of renewable energy sources to the existing power grid and interconnections of transmission networks. 195 schemes including 'Saubhagya', the distribution sector in India remained upbeat in FY 2018-19 as well. Ahead of the Assembly elections, electrification of more than 7 lakh households was completed on a war footing in UP, Bihar and Jharkhand. 375 MLD Sewage Treatment Plant at Jebel Ali, UAE Converting HT and LT distribution lines into underground cables in cities and towns to improve the reliability of the network, especially in cyclone-prone coastal areas and industrial townships, provided ample opportunities to the business. Orders were awarded for strengthening distribution systems and feeder separation works under schemes like the Integrated Power Development Scheme. Creating optical fiber networks for broadband connectivity of Gram Panchayats opened up interesting opportunities in the states of Telangana and Andhra Pradesh. Rapid urbanization has led to investments in the expansion of metro projects across Tier 1 and Tier 2 cities. To ensure reliable power supply for sprawling urban agglomerations, substation networks are being strengthened along with associated transmission lines. One such example is the 400 kV ring around Amaravati – the new capital city of Andhra Pradesh. Despite the fact that the solar industry faced lower capacity addition in FY 2018-19 compared to the previous year in the face of safeguard duties and GST ambiguities, L&T's solar business portfolio surpassed a cumulative capacity of 2 GW. Several state governments have taken up rural electrification through solar rooftop systems. Such systems are also being installed on Government buildings, such as under West Bengal's 'Alo Shree' scheme. The 'Kusum' scheme provides impetus to solar-powered irrigation systems. LARSEN & TOUBRO The business is concentrating on key African economies that have a clear road map to build a transmission and distribution network to meet increasing demand. Grid strengthening, regional interconnection and rural electrification opportunities are being pursued in select countries. Renewable generation is another area that holds potential. The footholds gained in Algeria, Morocco and Egypt have grown stronger and the T&D space in these economies is vibrant with many opportunities. In the domestic T&D space, investments were driven by State utilities, albeit through centrally sponsored schemes or multilateral funding. With the general lack of investment in conventional power generation and industry segments, the centrally-driven transmission schemes were less than the prevailing levels. States like Bihar, Jharkhand, Madhya Pradesh, West Bengal, Telangana and Andhra Pradesh have strengthened their intra-state transmission line networks and associated substations. BEK 5 MLD Sewage Treatment Plant, Nellore MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS ANNUAL REPORT 2018-19 198 197 The business has been a pioneer in delivering Water Infrastructure projects in India, Sri Lanka, Qatar, the UAE, Oman and Tanzania. It is currently involved in executing around 150 projects on the domestic water infrastructure front. The business is omnipresent in India - from Moga (Punjab) in the north to Tirunelveli (Tamil Nadu) in the south, and from Sauni Yojana (Gujarat) in the west to Barrackpore (West Bengal) in the east. L&T Construction's Water and Effluent Treatment business specializes in water infrastructure. This covers urban and rural water supply, industrial water supply, water treatment plants, sewage treatment plants, sewage networks, effluent treatment plants, desalination plants, micro and lift irrigation projects, canal rehabilitation, unaccounted for water (UFW) and water management contracts. The business also engages in area development jobs aiming to provide holistic water infrastructure to specific areas, thereby meeting the smart city norms. water footprint in order to conserve water for future generations. The world is undergoing unprecedented changes, with rising temperatures, changing climates and decreasing fresh water levels. The world relies on 0.75% of the available fresh water resources which, according to experts, are being badly managed. Several countries have already started innovating and educating their people on how to reduce their L&T's increasing technology capability to execute jobs efficiently with reduced lead times has led to increased client confidence in the business as a provider of end-to-end water solutions. ■ WATER & EFFLUENT TREATMENT The overall outlook for the PT&D sector remains promising on both the domestic and the international fronts. The business looks forward to maintaining its lead position in established markets and gain significantly in new growth areas and target countries, ably supported by its initiatives in cost leadership, technology adoption and delivery excellence. The rising power demand in ASEAN countries paves the way for significant investments in grid interconnections, grid development and strengthening. With an increasing share in Thailand and Malaysia, the business expects to exploit potential in Myanmar and other countries of the region. With only 35% of the country connected to an overloaded grid, significant opportunities are seen in Myanmar, especially through bilateral / multilateral funding. LARSEN & TOUBRO 10.6 MLD Water Treatment Plant, Bagidora Overview: BEEFEL With its continuous efforts, L&T has sustained its position as market leader. The business is reaping the benefits of implementing various unique initiatives and also exceeding customer expectations. Key initiatives included: Significant Initiatives • The prestigious Golden Peacock National Quality Award for the year 2019 • Recognition of L&T's Water business by Water Digest as the 'Best Water Company of the Year 2018' • Various awards from Water Digest, Dun & Bradstreet, EPC World, Global Water Summit, Construction Times, ET Now, Business Television India, etc. Drinking Water Supply Projects in Srikakulam and East Godavari District from Andhra Pradesh Drinking Water Supply Corporation Common Effluent Treatment Plant, Narol . • Formation of an R&D Cell and Incubation Center with technology experts for innovation and growth of the business LARSEN & TOUBRO • Industrial Area Sewage Treatment Works from ASHGAL, Qatar During the year, the business was conferred 48 prestigious awards, which are a testimony to its operational excellence. These include: . 199 • Embracing digital facilitators, by using custom-made apps designed to ease day-to-day operations, e.g. the Locate Measure Navigate on Phone (LMNOP+) app used for offline positioning and tracking • Addressing and finding workable and innovative solutions for the key challenges envisaged by the business during the BEST (Business Excellence for Sustainable Transformation) Conclave • Formation of a dedicated team to focus on developing solutions using Artificial Intelligence and Machine Learning • Introduced Productivity Excellence - Analysis & Realization League (PEARL) to monitor the productivity of the project sites in a competitive manner. Digitalisation While driving digitalisation over the past three years to improve efficiency and productivity, the business, the 200 MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS ANNUAL REPORT 2018-19 Medak and Sangareddy Water Supply Project Overview of Nagaur 250 MLD Water Treatment Plant and 5310 ML Raw Water Reservoir current year, focused mainly on improving the utilisation of the digital initiatives implemented. Major initiatives implemented this year include: . Al Shammal Water Treatment Plant at Qatar • Deployment of Business Development Managers to strategic domestic and international locations, targeting geographic expansion • Communication & Telecom Infra • A plan to transition to latest ISO 45001:2018 standards in the upcoming financial year With this unique positioning and technology-driven portfolio, the business has been able to attract talent from across various industries and has recruited a diverse pool of resources spanning technology and domain specialists from relevant business verticals. A strong team of technical experts at the project level and centralised support level enable the business to successfully integrate its projects. SECURITY SOLUTIONS Water Management Systems Smart Lighting Building Management Systems Transport Management Systems❤ Smart Grid Public Safety Management Systems L&T offers a bouquet of Smart City solutions 202 www SMART CITIES Smart Infrastructure Smart Waste Management COMMUNICATION Utility Management Systems Government III & Agency Administration MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS | ANNUAL REPORT 2018-19 Smart Energy 201 However, the general elections could delay the clearances, given the political expediency of poll promises like minimum basic income and farm loan waivers could also impact funding, affecting timely project deliveries in the forthcoming year. • PrathiBIMb: A modern AR / VR collaboration facility lab with the latest BIM software and tools to create, collaborate and coordinate project BIM models. The facility will also be utilised to impart BIM-related trainings. Environment, Health and Safety • Committed to the mission of 'Zero Harm', the business clocked 106 million safe man-hours in the year. 5 Lakh man-hours were invested in EHS awareness and training • More than 8 lakh saplings were planted and 3600 units of blood donated. • SafeArmZTM is a patented digital solution built by the business for proactive risk control measures at site. It enables paperless workflow approvals. • The business has successfully completed its DNV-GL Transition Audit from OHSAS 18001:2007 to ISO 45001:2018. • The business bagged several awards for safety from ROSPA (Royal Society of Prevention of Accidents), British Safety Council and Confederation of Indian Industry, as well as many appreciation certificates from various clients. Pump house for Mohanpura Lift Irrigation Scheme Sewage Treatment Plant at Rampur LARSEN & TOUBRO Human Resources In view of fast growth, the business has been augmenting manpower resources. As part of the initiative to augment the strength of front-line supervisors, ITI trainees were inducted during the year and they are being trained through a 12-month intensive Front-Line Supervisors (FLS) Training Programme. During the year, the business launched several key development initiatives. The first batch of 21 participants successfully passed out of the Project Managers Development Programme (PMDP), a focused developmental intervention aiming at building a strong project leadership pipeline. C.R.E.A.T.E (Customer Relationship Enhancement by Augmented Training for Expertise) was launched in February 2019 with the aim of holistic augmentation of competencies related to business development related in identified participants. Currently, 21 staff members are attending Wave 1 of C.R.E.A.T.E. The business has launched an e-learning course on its Quality Management Systems. The course is hosted on L&T's e-learning platform 'Any Time Learning'. Risks and Concerns The major risks for the business are delay in obtaining Right of Way (ROW), work front, approvals / clearances, volatility in commodity prices (mainly steel) and longer operation and maintenance periods. The business is adequately prepared to meet these challenges. It has a robust risk management framework to mitigate the risks by proactive monitoring, healthy client and supplier relationships, strategic tie-ups and digital initiatives and in-depth risk reviews during the pre-bid, execution and close out stage. The reviews involve all the key stakeholders, including project teams, business units and corporate teams, thereby ensuring early identification of key risks and consequently timely planning of the necessary mitigation measures. Outlook On the domestic front, water infrastructure will continue being integral to the sustenance and the well-being of the general populace. Consequently, the thrust to improve the water infrastructure in India will continue. Policy changes mandating the reuse of wastewater are also expected. Emerging prospects are envisaged in water management, ultra-mega STPs, micro irrigation, desalination, river interlinking and proposals to develop brownfield cities into smart infrastructure projects. Challenging competition is foreseen, as the business environment is populated by geographically restricted Citizen-centric Apps Smart Digital Connectivity but entrenched domestic players as well as multinational companies focused on expansion into the Indian market. With the Government's Smart Meter National Program to cut AT&C losses to below 12% by 2022, a special thrust on the roll-out of smart meter infrastructure is expected across multiple states. The Government's Smart Cities mission is expected to see ICT projects rollout in at least 25 smart cities with an outlay of 5000 crore. The Government has plans to convert 1 lakh villages into Digital Villages over the next five years. The IOT solutions implemented in the smart cities and the benefits derived from these systems to the urban citizens will be extended to the rural population The network spectrum for strengthening communication for the Indian Armed Forces is in the finalization stage. Perimeter protection projects to protect the critical infrastructure of the nation and surveillance at railway stations and in coaches are expected to take off in FY 2019-20. The Government's interest in the security and surveillance segment for the year 2020 remains a high priority. In areas of enhancing homeland security, Police Modernization has been provided a budget outlay of over 3000 crore. City surveillance/Intelligent Traffic Management System projects are expected to come up in Delhi, Chennai and Bangalore. FY 2019-20 looks promising for the business as more initiatives are being taken to make cities smart and safe, as well as digital initiatives in social sectors like E-shiksha and 'smart villages' which are connected. Outlook The projects of the business are funded through Union budget and State budget allocations and do not pose a financial risk. Operational risks - such as short implementation period, deferred payment terms and stringent SLA requirements - are viewed by Master Service Integrator. However, adequate planning and stakeholder engagements mitigates delay in approvals from the competent authority. The business has centralised, dedicated support for all the operational projects for maintenance of SLAs. Due diligence on the stakeholders and adequate planning helps the business keep up with project timelines. Digital interventions at every stage of project implementation - right from planning to operations monitoring - helps the management to take appropriate action to pre-empt and overcome challenges. A strong team of technical experts at the project level and centralised support helps successful integration of the projects. Risks and Concerns capability building, giving the business an edge over the competition. Command & Control Centre, Mumbai ANNUAL REPORT 2018-19 MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS 206 205 The average age of the team of this business is 32.6 years. The team comprises a diversified pool of engineers specialising in the areas of cybersecurity, cloud, information & communication technology, surveillance, server & storage, solution architecture, command and control, etc. Key resources with over a decade of experience add to Human Resources • Won various awards for excellence demonstrated in implementation of EHS Management systems, including 2 ROSPA Gold Awards and 1 OSHAI Gold Award. Contributed to sustainability by planting 17259 saplings and donating 297 units of blood Training programmes, viz. Safe Execution Engineer's (SEE) Training and Contractor Workmen Training (CWT) • The Government has proposed to setup five lakh wi-fi hotspots which will provide broadband access to five crore Bucket Wheel Stacker Reclaimer Machines at Adani Dhamra Port - DPCL. LARSEN & TOUBRO rural citizens and had provided ₹6,000 crore in FY 2019-20 for creation and augmentation of Telecom infrastructure. The roll-out of Network Infrastructure, under the Bharatnet scheme, of the balance states under the USOF funding is also expected. Significant investments in water infrastructure are anticipated and targeted in Oman, Qatar and the UAE. The business is focusing on consolidating in the Middle East and is planning to expand its footprint by entering into a few select countries in East Africa and the ASEAN region. ■ SMART WORLD & COMMUNICATION Overview: L&T entered the Smart World & Communication business in the year 2016, specifically to address the need for a safe, smart and digital India. It continues to retain its market leadership in the overall sectors within which it operates. The business has three segments: . Integrated Smart Solutions . Security Solutions 207 • M-FLOW: A mobile-based application used for tracking material issued to sub-contractors, stock availability, consumed and balance items and material reconciliation, web-portal with dashboard and reports for analysis by store-in-charge, planning and project team. A dry spell in private investment in the power sector continued during the year. In line with the Government of India's Sagarmala initiative, major ports undertook investment in the mechanisation of dry bulk systems. Specialized conveying packages connecting mines and ports to end users have seen momentum during the year. Major non-ferrous domestic players have firmed up their capacity expansion and investment plans, buoyed by steady base-metal prices and a spurt in domestic demand. However, during the year, the copper segment witnessed temporary turbulence due to heightened environmental The steel sector witnessed inorganic growth during the year and is expected to provide momentum in new expansions. Business Environment manufacture, supply, construction, erection and commissioning. It also offers custom-engineered, specialised material handling solutions and a wide range of comprehensive mineral ore crushing solutions for the power, port, steel, cement and mining sectors. The business commands a leadership position in the sectors it serves and has world-class manufacturing facilities at Kansbahal (Odisha) and Kancheepuram (Tamil Nadu). L&T's Metallurgical and Material Handling (MMH) business offers complete EPC solutions for the metal (ferrous and non-ferrous) and bulk material handling sectors across the globe. The business undertakes end-to-end engineering, procurement, Overview: MATERIAL HANDLING ■ METALLURGICAL AND With the Government's continuous interest in this sector and increased budgetary allocation year-on-year, the sector remains lucrative for investment, though faced with stiff competition. But L&T, with its experienced team and previous experience in executing complex technological projects, has an advantage in the market, and remains positive for the year 2020. Technology will be the biggest driver in improving the quality of education and our foray into this social sector has begun with the Tamil Nadu High Tech Lab. concerns. • Artificial Intelligence for Safety: SWADESH (Safe Workplace using Advance Data analytics in ESH), an NLP-based Al solution was developed to assess safety observations based on the severity of its potential impact, the number of repetitions, the location of work and staging height where it was recorded. The online dashboard highlights and tracks the safety performance of projects based on key indices like Risk Score, Repetition Percentage and Average Repetition Risk Score. Predictive Analytics for E-Pragati: A predictive model to identify and highlight the activities likely to be delayed, enabling the project manager to take proactive steps to avoid project delays. 208 MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS ANNUAL REPORT 2018-19 Data Center, Hyderabad Contact 9100-200-200 Intelligent Traffic Management System at a critical junction, Hyderabad i. Establishing IPMPLS network infrastructure in Andhra Pradesh (APSFL) and implementation and integration of EMS, NOC, NMS and related infrastructure Telangana (T-Fibre) During the year, the business successfully commissioned several Smart City projects in Nagpur, Pune, Vizag, Raipur and Prayagraj Phase 1. It entered the O&M phase during the year. The highlight of FY 2018-19 was project management of the world's largest religious gathering, the Kumbh Mela at Prayagraj, UP, with successful implementation and monitoring using Artificial Intelligence for crowd management. The business successfully commissioned the Smart Metering project, under Energy Efficiency Services Limited (EESL), for the New Delhi Municipal Corporation (NMDC) thus enabling NDMC become the first distribution company (DISCOM) in India to implement a 100% smart metering solution. 204 Significant Initiatives • . In this domain, L&T is at the forefront, collaborating with the Government in leveraging technologies to meet those goals. As a Master System Integrator, L&T has proven expertise in focused strategy, robust processes and comprehensive end-to-end solutions to cater to India's smart and digital requirements. The business has expertise in the areas of city surveillance, intelligent traffic management systems, transport and logistics management, communication networks (including backbone, telecom infrastructure), smart governance and education, critical infrastructure, smart metering and emergency response and early warning dissemination systems. Establishing price discovery mechanisms such as zero level costing, historical benchmarks, market intelligence, XaaS Costing Model Strategic initiatives in areas like the Internet of Things (IOT), Artificial Intelligence (AI), Cyber Security & Geospatial. Centralized and dedicated support for all operational projects for maintenance of SLAs with contractual tie-ups with the OEMS • Setting up a Technology Excellence Centre on the campus of the business to foster innovation in its segment, it is geared to play a crucial part in the roll-out of emerging technology interventions The business has taken the following initiatives in the areas of tendering, technology, supply chain management and operational efficiency improvement: • About 100+ certifications have been obtained by the employees in courses such as CCNA, CCNP, CCIE, MS Azure, CISM, etc. which provide the business an edge over the competition 203 g. Installation and maintenance of security cameras for surveillance add-on for Mumbai city With the Smart City Mission gaining momentum, the Smart World & Communication business is well positioned to be a key Master System Integrator (MSI) to manage smart city projects, end-to-end. LARSEN & TOUBRO L&T's Integrated Command & Control Centre manged traffic, people movement and surveillance of over 20 crore pilgrims at the Kumbha Mela Business Environment The Government of India has fast-tracked its investments to leverage smart and digital technologies for cities and rural parts of India, focusing on a safe, smart and connected India under the 'smart city' mission. NITI Aayog has initiated a national programme in the area of Artificial Intelligence, including research and development of its applications. Combining cyber and physical systems has great potential to transform not only the innovation ecosystem but also economies and the way we live. To invest in research, training and skilling in robotics, artificial intelligence, digital manufacturing, big data analysis, quantum communication and the internet of things, the Department of Science & Technology will launch a Mission on Cyber Physical Systems. This will support the establishment of centres of excellence. The Government has approved the National Mission on Interdisciplinary Cyber-Physical Systems (NMICPS) at a total outlay of 3660 crore for a period of five years. h. Communication System of Bengaluru Metro However, there are new entrants in this sector. Aggressive bids and PSUs provide stiff competition. The Quality and Cost Based Selection (QCBS) process adopted by the authorities has ensured that only serious players with a strong balance sheet and relevant experience are selected Major Achievments The business received several major orders, as follows: a. Integrated Command & Control Centre for Prayagraj Smart City b. Intelligent City Management System for Panaji Smart City c. City Network, City Wi-fi, Smart Kiosk and Variable Message Display for Pimpri Chinchwad Smart City d. Common Cloud Based DC and DR, Citizen Application, and E-Governance Application along with Integrated Command and Control Centre (ICCC) for Tamil Nadu 10 Smart City e. Pan-city Information & Communication Technology (ICT) Solution for Tirupati Smart City f. Supply & Maintenance of hi-tech labs for high schools in Tamil Nadu under E-Siksha project as Master System Integrator (MSI) to implement projects of national importance. In the year under review, the business has won 18 prestigious awards, including: - Upselling during the Operation & Maintenance phase • Smart Energy for Energy Efficiency Services Limited (EESL) Project- Awarded by ASIA Smart City Awards 2018 organised by CMO Asia • Mobile Based Workmen / O&M Engineer Attendance Tracking (Workmen) Environment, Health and Safety EHS is an integral part of the organization and the projects. It is given utmost importance due to the constant uncertainties, complex projects and several of them in highly populated cities and sensitive areas. In EHS, the business is committed to bring forward solutions which are entirely digital and sustainable over a long period of time. Key initiatives include: • Launch of sustainable and innovative digital solutions like SafeArmZ™ and VIEW EHS - digitising the entire EHS systems and procedures. • Incident-free operations for the last five years The business has strategic alliances with leading global technologists to offer comprehensive EPC solutions across various sectors. During the year, the business entered into key alliances with companies such as Rio Tinto, Thyssenkrupp and China Power for alumina smelter and speciality areas. Significant Initiatives Pipe Mill Project, Al Gharbia Pipe Company LLC, Abu Dhabi • Alumina Refinery, EGA, Abu Dhabi • Coal Handling Plant, RRVUNL, Chhabra • Coal Handling Plant, NCL, Nigahi / Khadia • Coke Dry Quenching (CDQ) unit 11, Tata, Jamshedpur Pet Coke Handling, IOCL, Paradip • Blast Furnace 8, SAIL, Bhilai • Coke Oven Batteries A&B, JSW, Dolvi Marquee projects commissioned / at an advanced stage of completion in the year 2018-19 are: BHEL. Orders were also received for various products (sand plants, surface miners, crushers, material handling equipment). With the limited opportunities available during current year, business has managed to stay ahead of its competitors. Major orders booked are Lead-Zinc Beneficiation at RD Mines from Hindustan Zinc Limited, Alumina Refinery Expansion at Rayagada from Utkal Alumina International Limited and an Ash Handling Package at Patratu from Major Achievements The business environment in the Gulf region has become conducive to growth, supported by political stability in the region, the stabilization of oil prices and the emphasis of the local Governments on developing a non-oil economy. Cement sector growth was in line with industry expectations during the year, with a minor spurt in the demand in the second half of FY 2018-19. The demand for manufactured sand provided momentum for L&T's advanced manufacturing systems across India, specifically in the western and southern regions. Coal India Limited (CIL)'s production fell marginally short of its target, despite registering higher growth in FY 2018-19, compared to the previous year. South Eastern Coalfields Ltd (SECL), one of the largest users of surface mining technology for excavation of coal, is considering surface mining of Kusmunda mines through the departmental route - a shift from its outsourced model. Other subsidiaries of CIL are also considering augmentation of their fleets of surface miners and crushers in FY 2019-20. Coke Oven Battery L&T's KSM-404, the largest surface miner in Indian coal mine at Gevra, Chhattisgarh MANAGEMENT DISCUSSION AND ANALYSIS INFRASTRUCTURE BUSINESS ANNUAL REPORT 2018-19 • For HR / Quality / Safety & Digital (HR BOT) • Smart City of the Year and Smart City Wi-fi Solution - for Nagpur Smart City - Awarded by Asian Business Exhibitions and Conferences Limited and DigiAnalysys respectively • Execution with Safety & Quality (AR - VR Video Training) The business has rolled out various tools in the area of Tendering, Supply chain, Finance, Safety, etc. such as: . Geographic Information System Solution - (Gold) for Gujarat City Surveillance & Intelligent traffic Management System project - Awarded by Constructech Smart Pole, Vizag Tourist Information Kiosk, Jaipur LARSEN & TOUBRO ⚫ Best Wi-Fi Solution Provider of the Year for BSNL Wi-fi Project - Awarded by DigiAnalysys • Outstanding contribution towards building smart cities to Smart World & Communication - Awarded by CMO Asia • E-governance Initiative of the Year for Prayagraj Smart City project-Awarded by Federation of Indian Chambers of Commerce and Industry Digitalisation The business has implemented 28 digital solutions across its project sites and functional departments. Two of the solutions are copyright registered. Digitalisation tools are implemented to shorten the process time, leading to savings. The operations monitoring tool developed for Smart Cities won a Gold award from Constructech magazine, Chicago. • Ranchi Smart Infrastructure Project from Jharkhand Urban Infrastructure Development Company Limited LARSEN & TOUBRO Base metal sector companies are on overdrive, with investments in new expansions. The aluminium sector is expected to be bullish on value-added downstream product lines, despite issues like mine allocation, volatile LME prices and high global Inventory. Copper investment is attracting stringent environmental scrutiny, although it is expected to witness significant investment to correct the import-export imbalance. The zinc and lead sectors are doing well and expect a good run in the coming year. The FDI limit in the mining and exploration of metal and non-metal ores has been increased to 100% under the automatic route, giving a significant boost to the sector. In FY 2019-20, prospects are envisaged in the domestic cement sector, with capacity additions / augmentation being planned by major players to order core equipment and products. The steel sector is expected to witness moderate brownfield expansion, with a thrust on debottlenecking plant capacity and asset synchronization to achieve higher operational efficiencies of the newly acquired assets. highways, housing and Dedicated Freight Corridors, the auction of mine / mine linkages, the Sagarmala initiative combined with synergized policy implementation between State and Centre and the rise in automotive production. This will create lucrative business opportunities in greenfield expansions by producers. The demand for metals such as steel, copper, aluminium and zinc will continue to be driven by the Government's emphasis on infrastructure - urbanisation, roads and Outlook The volatility in steel prices in the domestic market and LME base metal prices will be a concern in the year ahead. Post-election domestic policy deliberation by the new Government may make a significant impact on business investments. Risks and Concerns Interventions to advance the skill levels of employees were implemented through a string of strategic and leadership-based training programmes, both technical and behavioural, at offices and at various sites. These initiatives will enhance organisational capabilities and produce leaders to meet the emerging challenges on all fronts and ensure that the organization is future ready. Human Resources • Various awards and accolades have been received by the business in recognition of its efforts, from Ministry of Labour and Employment, FICCI, CII and customers. NEBOSH IGC courses, Internal EHS Auditor course, EHS Lead Auditor course, Online EHS certification courses, etc. INFRASTRUCTURE BUSINESS | ANNUAL REPORT 2018-19 Stacker Reclaimers at work at Suratgarh Power Plant During the year, the business has taken a few initiatives like implementation of business excellence model, cost optimization and vendor profiling among others. Steady growth in the product business is expected, owing to medium-to-high growth in core industrial sectors, particularly cement, coal mines and construction. Sand mining from river beds is banned due to environmental reasons, and consequently the user-friendly sand manufacturing machine will find extensive use in construction. The business has already established a leadership position. MANAGEMENT DISCUSSION AND ANALYSIS POWER BUSINESS ANNUAL REPORT 2018-19 2x800 MW Sri Damodaram Sanjeevaiah Thermal Power Plant, Andhra Pradesh Boiler internals being manufactured at Hazira, Gujarat 214 ensured that the factory at Hazira operated at almost full utilization. Significant Initiatives MANAGEMENT DISCUSSION AND ANALYSIS With the help of leading consultants, the business has focused on reducing its direct and indirect cost to strive for cost leadership. Digitalisation In the area of digitisation, the business has implemented various IT driven processes like IOT technology deployment on various plants and machineries at site to improve its machine utilization, work density in different zones, health of machines and their duty cycles, Other initiatives like GPS tracking of moving vehicles like pick and carry cranes, trucks, tipper and trailers to improve efficiency and Virtual Reality to improve safety conditions at sites, Hawk-Eye (cloud based solution) for project monitoring and use of drones for site survey are at various stages of implementation. 213 Environment, Health and Safety its operations, on par with time and cost factors. The business believes that 'safety' is the differentiator between L&T and other organisations. It has now moved to next level of safety implementation by embracing the digital environment for a safer workplace. Embracing initiatives like Virtual Reality to improve the safety conditions at sites is one such example. The various other initiatives like safety campaigns, observing 'safety month' and varied programmes at sites reaffirm the business commitment towards a robust safety management system. Human Resources Emphasis on training and development of the workforce has been the focus area. The business realizes the importance of talent preservation and has implemented various initiatives like Promoting Perpetual Leadership (PROPEL) for grooming of its talent. This includes competency building programs for leadership development to make them ready for next level, and various other engagement programs like Instant Motivation for Praiseworthy Actions (IMPACT) awards to motivate and sustain employees who showcased above average commitment. Risks and Concerns Despite an increasing focus on renewable energy, the business is confident that coal will continue to be the mainstay of the domestic power sector for providing stable, reliable and robust base load power supply and will continue to offer sustained market opportunities. Supercritical turbine being manufactured at Hazira, Gujarat 3x660 MW Koradi Thermal Power Plant, Maharashtra LARSEN & TOUBRO Excess manufacturing capacity, however will continue to drive the prices aggressively and would reflect in the financials of EPC players. Outlook The business considers safety as an integral part of Looking ahead, the business is confident of a revival of capacity addition in the thermal power sector to match projected rise in demand for power, in line with projected economic growth in the country. The business bagged 4 contracts from NTPC for FGD and export orders in L&T-MHPS Boilers. A strong Order Book • L&T's Power business is one of the leading EPC players in India that is known to deliver 'design to commission' business solutions for the thermal power Industry. Building on its core competencies, the business has swiftly built the necessary capabilities and undertaken projects in newly-emerging technologies in the thermal power plant industry, like Flue Gas Desulphurization (FGD) for example. The business has a track record of providing end-to-end solutions for executing large and complex projects. It has comprehensive in-house capabilities including engineering, state-of-the-art manufacturing facilities, project management expertise and erection-to-commissioning, which is unparalleled in India and provides complete satisfaction of quality of delivery to the customer. L&T's integrated power equipment manufacturing facility in Hazira, Gujarat is one of the most advanced in the world where it manufactures ultra-supercritical/ supercritical boilers, turbines, generators, pulverisers, axial fans, air-preheaters and electrostatic precipitators, which has added more than 8 GW of supercritical power generation capacity to grid since its inception. The business is now gearing up to make its footprints in Nuclear power plants. It has taken necessary steps to undertake STG island contracts in upcoming PHWR nuclear based power plants. Following are the JVs within its fold: L&T-MHPS Boilers Pvt. Ltd., a joint venture with Mitsubishi Hitachi Power Systems Limited (MHPS) Japan, for the engineering, design, manufacture, erection and commissioning of ultra-supercritical/ supercritical boilers in India up to a single unit of 1000 MW. L&T-MHPS Turbine Generators Pvt Ltd., a joint venture with Mitsubishi Hitachi Power Systems Limited (MHPS), Japan and Mitsubishi Electric Corp. (MELCO), for manufacture of STG equipment of capacity ranging from 500 MW to 1,000 MW. The company is engaged in the engineering, design, manufacture, erection and commissioning of ultra- supercritical/supercritical turbines and generators in India. L&T Howden Pvt. Ltd., a Joint Venture with Howden Holdings B.V. L&T Howden is in the business of regenerative air-preheaters and variable pitch axial fans (equipment, after-market spares and services) for power plants. 2x660 MW Jaypee Nigrie Thermal Power Plant, Madhya Pradesh Award for Significant Improvement in Productivity at the IMTMA Ace Microsmatic Productivity Championship. LARSEN & TOUBRO Business Environment In the current year, the power industry witnessed a spurt in ordering for FGDs. Installation of FGD systems in existing and upcoming thermal power plants has been made mandatory by the Ministry of Environment, Forest and climate Change, (MOEFCC), Government of India to curtail SO₂ emissions. The Central Government has taken the lead in ordering of FGD systems while power plants in the state and private sector have started floating tenders, which would ensure ordering in the upcoming financial year. It is estimated that the total installed capacity where FGD is to be installed stands at around 156 GW involving 430 FGD units. The business sees enormous potential in this area and is geared to undertake more such jobs on an EPC basis. The business also has the right combination of technology capabilities namely CT-121 from the world-renowned Chiyoda Corporation, Japan and its own in-house capability in engineering and project management, giving it a competitive edge. In the mainstream of EPC jobs in coal based projects, India saw very low ordering this financial year. The tender pipeline had practically dried up and most of the tenders have been deferred to next year. The power sector continues to face challenges like availability of funds, low plant load factor, financial stress, load balancing, coal and water availability issues, payment assurances, etc. Further, muted demand from the private sector and excess manufacturing capacity of suppliers continues to put pressure on EPC prices. Major Achievements Following are some of the major achievements by the business during the year: • Achieved Commercial Operations Date for the 1st unit in a project in Madhya Pradesh • Achieved completion of Performance Guarantee test in a project in Rajasthan. • Gas Turbine Generator synchronization for a Bangladesh Gas based power plant project within the contractual period. • First 1,000 MW Turbines to be manufactured in the country by L&T-MHPS Turbine Generator (2 x 1,000 MW Turbines) L&T Sargent & Lundy, a joint venture with Sargent & Lundy LLC, USA which is engaged in the business of providing design, engineering and project management services for power sector. Implementation of the Ministry of Environment & Forest (MOEF) notifications and the Sagarmala initiative by Ministry of Shipping will lead to considerable prospects in dry bottom ash systems, pipe conveyors, dry bulk terminals in ports and mechanization of iron ore and bauxite through environment-friendly solutions. Coal fired stations will continue to be in demand as it would ensure stable power and provide peaking power requirements and ensure a balanced grid. The business sees around 40 GW of ordering in FGD systems in the next year, and opportunities in the replacement market. Major projects under execution are Atmospheric Residue Desulfurization (ARDS) reactors for ADNOC Refinery in UAE, steam generators for Gorakhpur Haryana Anu Vidyut Pariyojana (GHAVP) Unit -1& 2 for NPCIL and Hydrocracker Unit Reactors in Duqm Oman. Significant Initiatives The business has focused on operational excellence initiatives to deal with the challenging market scenario and to enhance its competitiveness further. Major initiatives include On Time Delivery, First Time Right Work Culture, Talent Management and Organization Excellence. These initiatives have contributed to significant improvement in increasing our speed in manufacturing and enhanced our capabilities further. Digitalisation Digitalisation has been identified as a key driver for improving quality and productivity. Several digitalisation projects for improving monitoring of projects and resources, and creating dashboards have been taken up by the business. The Product & Technology Development Centre supports the business units to develop new products and manufacturing technologies. 217 218 MANAGEMENT DISCUSSION AND ANALYSIS HEAVY ENGINEERING BUSINESS ANNUAL REPORT 2018-19 Spools undergoing heat treatment at L&T's forging plant, Hazira Environment, Health and Safety order for supply of steam generator forgings for 6 units to be set up in 'fleet' mode. The Heavy Engineering business has maintained high standards of Occupational Health and Safety, and several initiatives like Reported Safety Concerns, EHS Awareness and Training sessions, and Theme Based Inspections are undertaken to provide a safe and healthy workspace for employees, customers and other stakeholders. The rigorous implementation of various processes has resulted in a YoY improvement in the business' safety performance parameters. The Business has built a committed and experienced team of professionals, and adopted various policies and initiatives in order to sustain healthy employee relations, professional development and employee engagement. A cultural transformation through a combination of the Performance Management System, mentoring and digitalisation remains the key driver of these initiatives. These initiatives are communicated to all employees through various forums like SAMVAAD-2018. For nurturing new generation leaders and Talent Development, mentoring of key talents by senior leaders was initiated. Long Service Awards, Team Building Workshops, non-monetary recognition events, etc., are periodically undertaken to enhance employee motivation levels. Lower portion of cryostat being built for ITER, world's first fusion energy project Risks and Concerns The Business has a complete Risk Management framework in place in line with the Corporate Risk Management Policy. This ensures a structured review of all the projects at appropriate levels and across the entire life cycle of projects. The framework includes detailed review and monitoring of various risk factors like financial risk, currency and commodity risks, schedule and capacity risk, client and supplier related risks, country clearance, technological and scale challenges, among others. The risks are mitigated through regular reviews and implementation of appropriate risk mitigation measures. This framework has helped the Heavy Engineering business to maintain a healthy order book and ensure that there are no material weaknesses. Outlook Signs of a global economic slowdown and general elections held in Q1 of FY 2019-20 may result in reduced demand for heavy engineering equipment in the first half of FY 2019-20. Increasingly, customers are adopting strategies like reverse auction and qualifying new suppliers. This is resulting in further competitive pressures. On the domestic front, companies are striving to build references through technology tie ups with European and Japanese manufacturers. POWER BUSINESS MANAGEMENT DISCUSSION AND ANALYSIS POWER BUSINESS ANNUAL REPORT 2018-19 212 211 Key opportunities are emerging in the GCC (especially Saudi Arabia), Egypt, Zambia and South Africa for alumina, zinc and copper smelters, pellet beneficiation and specialty areas such as port handling and freight handling packages. However, some amount of negative impact is expected to arise from customer preference for the EPCM option rather than EPC route for big projects in the international segment. On the domestic front, the business continues to experience challenges, such as delayed decisions of new- capacity additions in the steel sector, muted investment in the power sector, delays in land acquisition and clearances from the Ministry of Environment & Forests, which may further accentuate due to general elections in first quarter of FY 2019-20, resulting in delayed decisions. Human Resources The business anticipates growth in power demand, which would require capacity addition and enhancement in the areas of generation, transmission and distribution. Due to anticipated demand, the business sees a market opportunity of around 7GW in next year for coal based thermal power plant business. During the year, the business experienced a spurt in order inflows with major orders being received in the Oil & Gas sector for critical reactors, coke drums, slug catchers, LNG equipment, Ethylene Oxide reactors, mainly for projects in the Middle East, China and USA. The LTSSHF JV received an Competition from European and other Indian fabricators continues to be fierce. Korean, Japanese and European companies are getting preference due to ECA (Export Credit Agency) financing requirements, prevalent mainly in Europe. Surplus capacities and limited demand has resulted in aggressive competition, putting extensive pressure on pricing and deliveries. The Government has an ambitious plan to increase the nuclear power production to 23 GW by 2031 from the current level of 7GW. The business sees large value opportunities in this segment. It is gearing up in terms of manufacturing capability and procuring the requisite technology to produce turbines of 700 MW capacity relating to PHWR nuclear power plants. The Business is also taking the necessary steps to make itself a serious player to undertake STG island contracts in PHWR nuclear based Power Plants. Gas based plants are not expected to revive in India soon. The business continues to focus in markets outside India for gas based power plants. The target countries are Bangladesh, Sri Lanka, Myanmar, GCC countries. The business has taken steps to strengthen its presence in the Middle East to encash available opportunities in this sector. The L&T-MHPS Boiler JV is looking forward to encashing upcoming opportunities in the domestic market and will continue to explore business opportunities in the international market for direct export orders. In addition, the Company is looking forward to gaining a foothold in the Selective Catalytic Reduction system market in India which is likely to open up in the second half of FY 2019-20. 215 216 MANAGEMENT DISCUSSION AND ANALYSIS HEAVY ENGINEERING BUSINESS ANNUAL REPORT 2018-19 HEAVY ENGINEERING BUSINESS இ One of the two EO reactors delivered to RAPID Petronas Refinery, Malaysia Major Achievements Overview: The business is a leading supplier of hydro- processing reactors, high-pressure heat exchangers, waste heat boiler packages, ammonia converters, urea reactors, urea strippers and other critical equipment for process plants. Equipment supplied to the nuclear power sector includes steam generators, end shield assemblies and pressurizers. In addition, the business also provides modification, revamp and upgradation (MRU) services. The Piping business unit fabricates critical piping spools for the power, refinery, petrochemical, fertilizer and chemical sectors and has a track record of exporting piping spools globally. The unit has achieved international recognition through an impeccable track record of executing large and complex projects, including high-end reactors and high-pressure heat exchangers, creating global benchmarks. Its capabilities include state-of the art, fully-integrated, globally-benchmarked manufacturing facilities and an experienced and highly-skilled talent pool. The sustainability and safety standards at manufacturing facilities located in Mumbai, Hazira and Vadodara are at par with international standards. The business has a JV with Nuclear Power Corporation of India (NPCIL), L&T Special Steels and Heavy Forgings Private Limited (LTSSHF) to cater to the demand for critical forgings required for the Indian Nuclear Power program and for other crucial sectors like defence, hydrocarbon and oil & gas. The JV has set up a fully-integrated forging facility (from steel scrap to finished forgings of alloy steels, carbon steel and stainless steels) with a capacity to produce single piece ingots up to 200 MT and forgings up to 120 MT in the first phase. The JV has also been able to develop special steel grades and meet the needs of customers in the oil and gas segment, where it has been getting repeat orders. It has already qualified itself as the only indigenous producer of large and heavy forgings for prestigious Naval Programs. The entity has successfully completed development of the special steel grades for forgings required in naval applications. Having established the capabilities, the JV is expecting significant new opportunities, once orders for 6 Nuclear Submarines are placed under the Government's Make in India initiative. LARSEN & TOUBRO India's heaviest Hydrocracking Reactor (1858 MT) for HPCL Visakh Refinery Business Environment Nuclear Steam Generator Cone Shell - 16 MT The Business witnessed a spurt in the demand for equipment for the Oil & Gas sector (Downstream) in FY 19, mainly due to stable oil prices and the implementation of Marine Pollution norms i.e. IMO 2020. The investments by Oil Public Sector Undertakings are currently underway to comply with the BS-VI clean fuel standards. The fertilizer industry saw limited growth in terms of energy saving projects viz. Kribhco Fertilizer and Indo Gulf Fertilizer, while the nuclear business was impacted by delay in the procurement of fleet orders. L&T's Heavy Engineering (HE) business is amongst the top 5 global fabricators to supply engineered- to-order critical equipment, piping and systems for core sector industries - fertilizer, petrochemical, refinery, oil & gas, gasification, thermal and nuclear power, including critical revamp and up-gradation projects. 210 225 MW Sikalbaha Combined Cycle Power Plant, Bangladesh Effective competency building programmes for site teams, such as Scaffold Competency (certified by STI- USA) for line teams, IOSH - Managing Safely certification, 209 Overview: LSAW Pipe Mill Project, UAE Lead-Zinc Beneficiation Plant, HZL SK Mines, Dariba LARSEN & TOUBRO The business is developing real-time monitoring systems for stockyard machines and wagon unloading systems through IOT and linked customized dashboards for optimum utility of the system for customers. Digital Al Weighment systems have been introduced at the Company's Kancheepuram Works. Digitalisation In line with the Company's overall philosophy, extensive thrust is placed upon digitalisation through multiple initiatives viz. Project Progress Monitoring, Connected Workforce and Assets, Material Tracking, Online Quality and Safety Monitoring and Integrated Engineering (3D and Building Information Modelling). On the products side, the business has augmented its capability for in-house manufacturing of ship unloaders, with engineering and design support from foreign technologists. In line with our corporate EHS Policy, intensive efforts are made to integrate EHS with the management systems. While leadership commitment to EHS is demonstrated at all levels, concerted efforts are made to involve and engage every employee, including workmen, in the safety cultural transformation. The business lays much emphasis on EHS in order to achieve 'Zero Harm' in its operations. It implements EHS procedures, imparts EHS training and ensures review of site EHS standards by the leadership. The business has launched various programmes to achieve the outcomes set by the EHS management system. Initiatives taken up during FY2018-19 include: • Successful completion of certification audit for ISO 45001:2018 (new standard) and recertification audit for ISO 14001:2015. Enhanced EHS monitoring and reporting capabilities using various digital tools such as EHS Observation, Permit to Work (PTW), Safety Task Assignment, EHS Violation Memo, SOSC (Safety Observation and Safety Contact), FIRI (First Information Report of Incident), Rigging Permit, etc. • A high level of management commitment is demonstrated by deployment of competent Rigging Engineers at site and restricting crane loading to 75% of the rated capacity to ensure safe material handling at all sites. Environment, Health and Safety 34 Business Environment The Shipyard has been largely engaged in New Build and refits/repairs of defence ships of the Indian Navy and Indian Coast Guard. The Shipyard, since 2010, has designed, constructed and delivered 50 Defence Vessels which include a Floating Dock (Navy), Interceptor Boats and Offshore Patrol Vessels (Coast Guard) in record time. The unique capability of the business to achieve on-time or ahead of contractual delivery, performance in all the contracts for Defence Vessels is a benchmark in itself for the Indian Shipbuilding Industry to emulate. near Chennai. Located across a sprawling 900-acre complex, the Kattupalli Shipyard is India's largest yard, designed in-house and built to globally benchmarked technological practices. Dedicated design centres for warships and submarines are equipped with latest integrated 3D design, analysis, virtual reality and Product Lifecycle Management tools, interfaced with project management and ERP systems on one hand and production machinery in the workshops, in line with global best practices. This is the only yard in India with Industry 4.0 practices in place and pursuing modular construction based on indigenous solutions. INDIAN COAST GUARD L&T built Offshore Patrol Vessels help the Indian Coast Guard keep our shores safe MANAGEMENT DISCUSSION AND ANALYSIS DEFENCE BUSINESS ANNUAL REPORT 2018-19 country. Till date, the D&A strategic business group has indigenously developed more than 250 defence products and over 50 of them have been industrialised and delivered in serial production mode. 221 L&T's Shipbuilding offers end-to-end solutions for design, construction and through-life support for defence platforms. L&T operates two defence shipyards one at Hazira Manufacturing Complex and another greenfield mega shipyard at Kattupalli, 2. Defence Shipbuilding The D&A group also has a Joint Venture (JV) with MBDA, a global leader in missiles and missile systems. The JV is well positioned to indigenously offer advanced missile systems to the Indian Armed Forces. The business model is uniquely differentiated with a focus on in-house technology and product development, with innovation at the core of our offerings. This is augmented by our mature and equitable partnerships with global majors, to maintain our market lead position in an environment where the Government is aggressively pursuing an indigenisation agenda while most indigenous players are dependent on ToT model to pursue defence production. The business thus continues investing in R&D to develop new age technologies and products such as unmanned systems (all four segments), robotics, additive manufacturing (3D printing) and artificial intelligence. Over the last five years, the Government of India, in its quest to boost defence manufacturing, has taken substantive steps to ease licensing in defence, promote exports, preferential categorization of acquisition in favour 222 of indigenisation of defence systems, accelerating process of Acceptance of Necessity and RFPs and encouraging private sector participation in the defence sector. The intent of the Government to achieve higher indigenization and self-reliance is visible in the latest policy measures such as Strategic Partnership, simplified Make II procedure, defence corridors in Tamil Nadu and Uttar Pradesh and the draft Defence Production Policy. Defence procurement policies and procedures continue to evolve with earnest and positive impetus towards 'Make in India'. Dedication to the nation of L&T's Armoured Systems Complex at Hazira by the Honourable Prime Minister in presence of Hon. Defence Minister Major Achievements • Ahead-of-schedule deliveries of Interceptor Boats (IBS) to Indian Coast Guard (8 boats in FY 19) First-in-Class ship since 1963 to be delivered within the contracted schedule Benchmark-setting delivery: OPV-1 was the first • ⚫ Handover of three Offshore Patrol Vessels (OPVS) to Indian Coast Guard - all ahead of schedule. • Announcement on operationalization of deterrence patrol by INS Arihant by our Honourable Prime Minister testimony to the platform's build quality Delivery of multiple weapon launch systems (land and naval), engineering systems and missile systems to the Indian Armed forces While various policy initiatives are in the right direction, the challenge resides in time-bound implementation, convergent and concurrent actions. While the Gol has taken steps to ensure ease of doing business by issuing a series of amendments to DPP under 4 rounds of Business Process Restructuring initiatives and also addressed many issues to grant a level playing field, the concerns of private sector remain unaddressed as Defence PSUs are still being preferred for key programs in the pipeline, based on earlier decisions. With these earnest efforts by the Government, the stage is set to leverage indigenous capabilities and infrastructure created by L&T across domains and segments over years to come. Vajra Howitzers, Pinaka MRLS, BM21, Akash Air Defence Systems many of which were displayed at the Republic Day Parade Over the years, the Defence and Aerospace (D&A) business has built a portfolio spanning a wide range of indigenous products, systems, solutions, platforms and technologies. This has been achieved through in-house efforts as well as by teaming up with DRDO and participation in the Indian Navy's indigenisation program for realisation of defence systems within the • • Modular Bridging Systems built by L&T give our Armed Forces enhanced mobility LARSEN & TOUBRO Floating Dock Delivery and commissioning of the 1st Indian Weapon System, for a foreign Navy is a significant breakthrough for L&T Significant weapons systems delivered included K-9 1. Defence and Aerospace • A facility at Vizag under the Government Owned Contractor Operated (GOCO) model for a Strategic Program 1. Defence and Aerospace Over the years, the business portfolio grew in scale and maturity to include indigenous design, development, industrialization and serial production of a range of naval and land weapon launch and engineering systems, fire control systems, missiles and space launch vehicle subsystems, radar systems and sensors, military communication systems and avionics. This evolutionary journey has led to the development of capabilities in design, engineering and construction of naval platforms (submarines and warships) and armoured systems. being built by MoD shipyards and under DRDO programs. L&T has been active in the defence and strategic sector since the mid-80s, by associating with the Defence Research & Development Organisation (DRDO) and naval indigenisation programs - well ahead of the opening up of the sector for private Industry participation. At that time, the defence initiatives focussed partnering DRDO Laboratories in the design and prototype development of complex weapon systems. It also focussed on the design, development, qualification and delivery of special purpose engineering equipment for naval platforms The defence, aerospace and shipbuilding businesses of the Company have been integrated into a separate vertical, L&T Defence Engineering, for segment reporting. The business has been engaged in conceptual design-to-realisation-to-delivery of equipment, systems, solutions and platforms across chosen defence segments, from surveillance to strike capabilities, this vertical also provides through- life support for the systems supplied by them. The portfolio encompasses engineering equipment and systems ranging from propulsion systems to enable mobility, logistic solutions to naval & land platforms such as warships, submarines and armoured systems. The Company's defence solutions span the value chain from building platforms and systems to through-life support in a unified manner. Overview: MRSAM Mobile Launcher System DEFENCE BUSINESS MANAGEMENT DISCUSSION AND ANALYSIS DEFENCE BUSINESS ANNUAL REPORT 2018-19 220 219 With the Cabinet Committee on Security (CCS) clearing the proposal for the GOI's investment in 10 domestic nuclear power plant reactors (10X700MWe) through bulk ordering in May 2017, new opportunities have been opened up for LTSSHF. NPCIL has also initiated the process for the procurement of critical equipment/ components like end- shield stainless steel plates and forgings for pressurizers and Breed Cooler Condenser (BCD) for these 10 units. The second half is likely to provide Nuclear Fleet procurement opportunities (700 MWe PHWR projects). The domestic Refinery sector is likely to show a revival of the Capex cycle from Oil PSUs (IOCL, HPCL, CPCL and BPCL). Emergence of new refineries (RRPL- Ratnagiri, and HRRL- Barmer) and overall business expansion due to FDI inflows will provide avenues for the equipment business in Q4 FY20/FY21. In the Fertilizer sector, major opportunities are expected from Talcher Fertilizers Limited. LARSEN & TOUBRO 8 ARDS Reactors (7000 MT) ready for delivery to RAPID Project, Malaysia VEN The operations span across two R&D centres, three Design & Engineering Centres and production centres at nine locations spread across India to serve the defence and aerospace sectors. These include: Submarine Hull-building Facility, Hazira • • Armoured Systems Complex at Hazira for manufacturing, integration and testing of armoured systems • Precision Manufacturing and Systems Complex, Coimbatore for aerospace and missile manufacturing The Defence Business is structured into two business groups: Design and Engineering Centres at Powai and Chennai for warship, submarine and weapon and engineering equipment . • R&D Centres at Powai and Bangalore for targeted product, systems and technologies New Orders • A modern shipyard at Kattupalli, near Chennai • Marine Switchgear and Control Systems, Navi Mumbai, 2. Defence Shipbuilding Strategic Electronics Centre at Bangalore Strategic Systems Complex, Talegaon, Pune, for • • LARSEN & TOUBRO 155mm/ 52 Cal Tracked Self Propelled Gun K9 VAJRA-T Pinaka Guided Launcher System • Advanced Composites facilities at Vadodara and Coimbatore weapon and engineering systems and sensors • 224 • Order from MBDA France for MICA missile rear section and launcher integration. MANAGEMENT DISCUSSION AND ANALYSIS ELECTRICAL & AUTOMATION BUSINESS ANNUAL REPORT 2018-19 227 FY 2018-19 witnessed several technological shifts - from PLC (Programmable Logic Controllers) to PAC (Programmable Automation Controllers) in the equipment space, the emergence of IloT analytics to facilitate monitoring and service management and the emergence of intelligent solutions. These are some of the key factors fuelling the market growth for the business. Additionally, the business is very sensitive to macro-economic situations and scenarios, including Government policies and macro- economic stability. Business Environment Servowatch Systems Limited, Bond Instrumentation & Process Control Limited and Servowatch Inc, (USA) offer technology in the control & automation space for marine applications as well as other emerging segments. It is recognised as a global leader in system integration for modern naval platforms, super yacht installations and commercial marine operators. Henikwon Corporation is a leading manufacturer of low voltage and medium voltage bus duct systems for the building and infrastructure segments. It caters to customers in South East Asia, India and the Middle East. Units, LV Switchgear and Motor Control Centres (MCC) - fixed/draw out, pre-fabricated / packaged sub-stations. L&T Electrical & Automation Saudi Arabia Company Limited (LTEASA), located at Dammam in Saudi Arabia, is a wholly owned subsidiary of L&T. It offers to the Gulf market a spectrum of products and services, such as Air Insulated Switchgear (AIS), Gas Insulated Switchgear (GIS), Ring Main L&T Electrical & Automation FZE (LTEAFZE) is a 100% subsidiary of L&T International FZE. It is located at Jebel Ali Free Zone in Dubai and caters to customers in the Middle East and Africa. It provides turnkey engineering, assembly, integration of electrical, instrumentation and telecommunication solutions. LTEAFZE currently is doing work for two major projects in GCC, notably the Doha and Riyadh metros. The business has an international presence through its subsidiary, the TAMCO group of companies, which manufactures low and medium voltage switchgear. It caters to international markets, i.e. the Middle East, Europe, Africa, North and South Asia, Australia and New Zealand. design and development team collaborates with international laboratories, testing centres and academic institutions. The business is supported by state-of-the-art tooling facilities which produce a range of high-precision tools to serve the needs of the business as well as those of external customers. LARSEN & TOUBRO B063 L&T offers India's widest range of switchgear to a variety of sectors The industrial automation presence of the business is supported by an in-house manufacturing capability for control panels, strong in-house design and development teams and its own copyright software solution - i-Visionmax®. It also has tie-ups with global players in the automation industry. The business has five DSIR-approved R&D facilities and two NABL-accredited testing laboratories to test products across diverse parameters. The Air-insulated Switchgear L&T is one of the largest manufacturer of single- phase energy meters in Asia and enjoys a market- leading position. B The trade war between the US and China and the Brexit chaos pose risks at the global level. However, the Indian economy continues to move from strength to strength and reap the benefits of the economic slowdown in China. 228 New products introduced included MCCBs and variants of Omega ACBs for new emerging markets, contactors — Total Quality Management (TQM) remained a key focus area for business. It has applied for the coveted Deming Prize the highest Quality award - which will help the business to garner further opportunities from international markets. Electrical Standard Products Multiple value engineering and procurement optimisation measures have helped generate operational cost- efficiencies and savings, across the business. A few, key vertical-specific initiatives include: Significant Initiatives Ahmednagar Switchgear Works factory has become the first Indian factory approved by global wind majors Attained success with wind players Breakthrough in Africa for business with an order from the Dangote Group. Electrical Systems & Equipment business 20% Healthy New Product Intensity (NPI) index powered by focused R&D activities Electrical Standard Products business • Grants for 34 patents, 33 trademarks and 26 design applications in India, as well as 3 foreign patent grants (one each in China, Malaysia and Europe). Cues of pick-up in Malaysia can be seen, while Gulf countries continue to be sluggish, with no sign of revival in sight. However, the swinging oil prices and plans for expansion in this space have led to increased capex outlay in GCC countries like the UAE, Kuwait and Iraq. Major Achievements In order to reduce AT&C (Aggregate Technical & Commercial) losses, the Government has launched a scheme to convert all energy meters to smart prepaid meters. This bodes well for the metering business of the Company. Revision in agricultural MSP, targeted improvement of farmers income and other such initiatives have led to increased demand. The business has seen improved prospects from industries like textiles, Infrastructure and from Government-funded schemes like DDUJY and IPDS. Growth opportunities have arisen from segments such as affordable housing, airports, renewable energy, hospitals, educational institutions, data centres and telecom. The Company's low voltage switchgear is manufactured at three locations in India - Vadodara, Mahape (Navi Mumbai) and Ahmednagar. The medium voltage product segment has two manufacturing units, one in India (Ahmednagar) and the other in Malaysia. The low voltage switchgear and agricultural products are marketed through a network of over 650 stockists. The business is engaged in manufacturing low and medium voltage electrical switchgear products (both standard and customized), energy meters, apart from executing projects in the control & automation space. The products are widely accepted in both domestic and international markets, particularly in South East Asia, the GCC, select African geographies and the UK. L&T's Electrical & Automation business is a leading provider of electrical equipment in India. It is structured into two Strategic Business Groups (SBGs) Products SBG and Projects SBG. Risks and Concerns HR initiatives have been aligned to the overall business strategy by focussing on identifying and grooming high potential talent, critical for having a competitive advantage through various management and leadership programmes. The business has implemented a Technology Leadership Programme to maintain its market leadership position and continue to focus on development of niche technologies. Attention to leadership and talent development continues as a business imperative. Further, with renewed emphasis, the business has embarked on an employee engagement initiative to retain, grow talent and continue to be an employer of choice. Human Resources The business has displayed exemplary performance on safety track record across work centres and customer locations and also at Business Partners premises. The awards won by Powai and Kattupalli work centres accentuate the resolve for championing safety as our core value. The business continued to focus on the triple bottom line and green initiatives and achieved significant y-o-y reduction in water and energy consumption, keeping sustainability in mind. The Miyawaki forest development project at Talegaon unit has been a unique success story for many to emulate. This has already become natural habitat for fauna, migratory birds, peacocks, etc. Environment, Health and Safety Aided Design, 3D modelling, Walkthroughs, Virtual Reality, Digital Manufacturing techniques, Laser based Metrology, Integration, etc. These techniques have been applied across the value chain from digital design through platform manufacturing and system integration. In recent years, the business embarked upon utilising Industry 4.0 technologies to make operations efficient and stay ahead of delivery schedules all the times. The business has initiated loT implementation in manufacturing centres to add a new edge to operational efficiencies. While a range of digital initiatives have already been implemented, many more are in the implementation phase. Image for representational purposes only L&T has made a vital contribution to India's first nuclear-powered submarine MANAGEMENT DISCUSSION AND ANALYSIS DEFENCE BUSINESS ANNUAL REPORT 2018-19 223 The digitalisation journey for the business dates back to the late eighties with progressive implementation of Computer Digitalisation L&T has been working closely with DPSUs over the years and the relationship was taken to the next level by signing MoUs with BEL and BEML. This will aid L&T and the partners to target specific programs and explore new opportunities for both domestic and international markets. Besides having a strong focus on R&D, digitalisation to enhance productivity, building synergy across work centres and business sustainability, the business is also working on strengthening partnerships to explore and target newer markets. During the year, a new facility for production of Armoured Systems was created in L&T's Hazira Complex with 'Industry 4.0' set-up, which has already started rolling out K9 Vajra-T Howitzers. The business, in its association with DRDO in development of indigenous systems made marked contributions to 17 of the 20 systems for which DRDO conducted successful launch trials during the year, by supplying critical systems such as Launchers, Fire Control Systems, Stabilisation Systems, Missile Airframes, etc. In addition to the focus on defence manufacturing to serve the Indian Armed Forces, direct exports are being targeted as an additional engine for growth. Significant Initiatives The defence sector as a whole, exhibits a cyclical nature in terms of business growth opportunities. In L&T's case, a bouquet of products across segments, developed through in-house efforts, has ensured that the risk is limited to deferment of orders. The impact of diversion of funds to social spending ahead of the Lok Sabha elections and GST reimbursements to OEMS may impact the project awards and progress. Outlook Defence Business The Defence Production Policy awaiting final clearance by the Government has set clear targets for the quantum of Overview: City Command & Control Centre, Vadodara Municipal Corporation. ELECTRICAL & AUTOMATION BUSINESS MANAGEMENT DISCUSSION AND ANALYSIS ELECTRICAL & AUTOMATION BUSINESS ANNUAL REPORT 2018-19 226 225 The strategic partnership policy has been created to bring in private sector participation in addition to the production lines of the DPSUs for manufacturing defence platforms within the country. During the year, two programs have been approved for procurement under SP viz. Naval Utility Helicopters (NUH) and Program 75(1) for construction of Conventional AIP Submarines indigenously. While, the Eol for NUH program has been released for Indian and Foreign OEMs in FY 2018-19, the same is expected for P75(1) in the first quarter of FY 2019-20. L&T, having been a vital contributor for indigenous production with experience across segments, is well placed to be a Strategic Partner to the Government of India and indigenously build platforms that were earlier fully imported or assembled with dominating import content. • Supply of 10m short span bridges received from MoD. The Indian Space Research Organization (ISRO) has started working on its ambitious plan of Gaganyaan 2022 and has also initiated actions to involve the industry in Launch Vehicle Integration which is likely to create sizeable opportunities. In-line with this, L&T and HAL have signed a consortium agreement to produce the complete launch vehicle for ISRO. The defence production market shows promise of significant pick-up in the medium to long term as the Government implements some of the policy initiatives still in the pipeline. The Indian Navy's aggressive fleet expansion plan, combined with the 'Make in India' initiative of the Government provides wider opportunities to Indian shipyards for construction of warships and submarines for defence forces. Since 2014, programs worth more than 4.5 Lakh crores have been cleared for acquisition with 2/3rd of them categorised for Indigenous acquisition. The Private Sector has been allowed to compete for more than 50% of the programs categorised as indigenous acquisition – a major change compared to preceding five years, when it was below 5%. defence production, both domestic and exports by 2025. The policy explicitly lists 13 segments for which indigenous capability will be built and imports will be disallowed. This augurs well with the industry to develop capabilities and capacities over a mid to long-term basis. The company has already been working in capability and capacity building in many of these segments and has a proven track record in many of them. L&T has provided systems for most of India's space missions - including those to the moon and Mars Tactical Unmanned Aerial Vehicle designed and built by L&T LARSEN & TOUBRO L&T TUAV Aerospace Business The range of automation products, such as drives and PLCs, are sold through around 75 Integrated Solution Providers. In addition, it also serves the retail market through a network of 165 Retail Distributors (called Primary Trading Partners) and around 350 Distribution Select Partners (DSPs). The business serves a wide range clients across sectors - metro rail, airports, renewable energy/ solar, defence, hospitals, educational institutions, data centres, realty projects, auto, food & beverage, chemical, pharma, textile, sugar, automobile and steel. Additionally, the business supports the Indian agricultural ecosystem through innovative control-gear products as well as new-generation solar-energy supported products. L&T's low voltage switchgear commands the highest market share in India. Its medium voltage switchgear products enjoy a market-leading share in Malaysia. Smart Meters MANAGEMENT DISCUSSION AND ANALYSIS | HYDROCARBON BUSINESS ANNUAL REPORT 2018-19 Saih Nihaydah Gas Compression Project (SNDC2) for Petroleum Development Oman (PDO) • Off-gas treatment (urea plant) was successfully commissioned for GSFC • Mechanical completion of a melamine plant for GSFC • Mechanical completion for IOCL Haldia's Coke Drum System Package (CDSP) Orders Won 236 • Two fertiliser plants of 2,200 TPD ammonia and 3,850 TPD urea at Barauni (Bihar) and Sindri (Jharkhand) on EPCC basis in consortium with TechnipFMC from Hindustan Urvarak and Rasayan Limited (HURL) - a major breakthrough in the fertiliser segment, offering complete ammonia plants. • EPCC order from IOCL for 357 KTPA Mono Ethylene Glycol (MEG) Plant and a 180 KTPA Ethylene Recovery Unit (ERU) under LSTK-1 Package. • EPC contract from KOC for installation of New Strategic Gas Export Pipelines, 48" diameter, spanning 145 km from North Kuwait to Mina Al Ahmadi Refinery. • First breakthrough project in Algeria - EPCC contract from Sonatrach for South West Gas Fields Development Project. Construction Services Projects Completed Successful commissioning of ROGC, PCG DTA, PX-04, MEG, LDPE and ECSP plants for Reliance Industries Limited, Jamnagar. Orders Won Pipeline and associated works in the south-eastern region of India from IOCL • Seven cracker furnaces of 1200 KTPA Dual Feed Cracker Unit (DFCU) on EPC basis from HPCL-Mittal Energy. Upgradation of facilities of Mangala Terminal at Barmer for Vedanta 235 Gathering Centre, GC-30, in North Kuwait for Kuwait Oil Company Indian refineries are in a healthier financial position due to higher refining margins and a lower subsidy burden. LTB 300, a pipelay-cum-work barge undertaking offshore installation LARSEN & TOUBRO Significant investments are planned by PSUs in the debottlenecking of existing assets, expansion of existing refineries and integrating refineries with petrochemical complexes. The Government has its focus on the LNG Infrastructure. Consequently, it has slashed the import duty from 5% to 2.5%. Also, enhanced oil and gas recoveries are subsidized by the Government for royalties. The Indian market is becoming increasingly attractive to international competitors, with India's ambitious plan to enhance its refining capacity by 2030. Consolidation continues in the industry as service providers seek to create value through integrated offerings to clients. Intensity in competition is increasing by the day, with the prevalence of predatory pricing among service providers. Major Achievements Offshore • SNDC-2 and KDC-2 projects for PDO, Oman Projects Completed Replacement Project - 4 (PRP4) project. It also completed the Safaniya 4 Deck project and upgraded 17 Tower Cranes for Saudi Aramco. Orders Won • EPCI contract in consortium with Subsea7 for three oil production deck manifolds and subsea pipelines in the Zuluf and Berri Fields of Saudi Aramco. • Contract in consortium with Baker Hughes and McDermott International for ONGC's largest deepwater oil & gas project, the development of block DWN-98/2 in the Krishna Godavari basin. • EPCI contract from ONGC for development of Cluster 8 marginal field involving three wellhead platforms, 1 bridge-connected wellhead-cum-riser platform, a ~59 km pipeline, 3 clamp-on structures and modification of two platforms. Onshore Projects Completed • During the year, the offshore vertical handed over three wellhead platforms ahead of schedule to ONGC for their Neelam Redevelopment Project. The balance process platform, along with an associated bridge, is progressing on schedule. The Company also completed Transportation & Installation (T&I) for Daman Development Project and achieved substantial completion for ONGC's Pipeline Saudi Arabia has reported a rise in oil and gas reserves up to 268.5 billion barrels. Abu Dhabi has passed an AED 132 Bn budget for the next 5 years, with increased focus on gas production, unconventional and new developments. Also, ADNOC is allowing more international companies to independently mine for oil & gas. However, localisation content and value norms in the GCC countries are becoming intense, with significant weightage given while awarding projects. Additional scope in existing contracts Projects Completed 3320 Laying of 36" x 67 km-long natural gas pipeline from Anjar to Mundra in Gujarat for Gujarat State Petronet Limited on EPC basis business has also launched digital fabrication and construction initiatives in order to improve productivity. Environment, Health and Safety Much emphasis is laid upon the Environment, Health, Safety and Sustainability aspects of the Company. It remains committed to achieving HSE excellence at the workplace and beyond by continuously striving to improve, protect and develop the health, safety and environmental assets of its employees and stakeholders. The business strongly believes that every incident is preventable and is committed, through its 'Zero Incident Credo', to providing a safe and healthy workplace. During the year, the business delivered over 112 million safe man hours at a stretch across a dozen successful projects both in domestic and international markets. All the three Modular Fabrication Facilities maintained a zero Lost Time Injury (LTI) record for the financial year. The Company drives HSE excellence across the EPC value chain from engineering to commissioning of projects, applied to all stakeholders by reinforcing a safe working culture through various initiatives: • HSE Assurance Audits were initiated and carried out for all the verticals to ensure the effective implementation of the HSE management system across the business. MANAGEMENT DISCUSSION AND ANALYSIS | HYDROCARBON BUSINESS ANNUAL REPORT 2018-19 Load-out of BSE-11A Topside for Bassein Development 3 Well Platform & Pipeline Project of ONGC from Modular Fabrication Facility at Hazira, India Conducting various HSE training programmes, mock drills, near-miss incident reporting The business received recognition of the safe practices by way of following accolades: • National Safety Council Award for the Lowest Accident Frequency Rate in September 2018 Safety Innovation Award 2018 for implementing Innovative Safety Management Systems by the Institution of Engineers (Delhi) • Golden Peacock Environment Management Award for 2018 for commitment towards Environment Management Challenger's Award - Mega Large Business in Engineering Sector at the Sustainability 4.0 awards 2018 co-hosted by Frost & Sullivan and the Energy and Resource Institute • ASSE GCC HSE Excellence Platinum Award & Gold Award for 2018 for Management of Driving Safety 238 Theme-based campaigns were observed on World Environment Day, Fire Service Week, L&T Safety Day, Road Safety Week and National Safety Day to create awareness and engage employee and contractors on HSE aspects Modular Fabrication 237 The Company is geared towards introducing and implementing innovative practices and has adopted digital technology for global delivery. • Launching of Hasbah II Tie-in Platform (TP-II) - the heaviest Gas Platform in Saudi Aramco's history. Supply of fabricated and modularised CCR, NHT, MHC Heaters to JNK Korea for Dangote Oil Refining Company Limited, Nigeria. Construction of the world's largest ethylene cracker (1.4 MMTPA) for Reliance Industries, Jamnagar, India LARSEN & TOUBRO Orders Won The business secured a breakthrough order from an international customer for process and pipe-rack modules. ADVENT The Company is enhancing its current practices through digital/new-age technological advances including Integrated Project Management System (IPMS). The Orders Won • Various projects from BASF Corporation, BHEL, Cairn Oil & Gas, IOCL, Coromandel Fertilizers, Gujarat Chemical Port Terminal Company Limited, ONGC, SKI Carbon Black, Gujarat Alkalies and Chemicals Limited and others Significant Initiatives The business has a vision: to 'Revolutionize the Hydrocarbon Industry' and a mission of 'Execution Par Excellence'. The Company lays continued emphasis on sharper bidding to enhance its market share and execute projects within time and cost to protect bid margins. The business continued its journey with its Operational Excellence initiative, which aims to achieve refined cost structures, align operations for timely project deliveries and optimize fund deployment. This initiative has yielded results for the Company, reflecting in enhanced cost-competitiveness in its bids and further improvement in its bottom-line for projects under execution. The business has now embarked on an initiative for cost-reduction through Design Value Improvement. Its capability-building initiative has led to significant progress in terms of building portfolio and project leadership as well as functional group development. This initiative aims to build globally benchmarked project leadership teams to execute large international projects and develop and institutionalize an international project capability development engine. Through its Perspective Plan 2026, the Company lays strategic thrust on new business segments like Offshore Wind Energy and is gearing up for emerging Waste-to- Value projects. Digitalisation • EPCM contract for an ethanol production unit from the off-gas of IOCL's Panipat refinery FY 2018-19 witnessed fluctuating commodity as well as currency markets. Oil prices exhibited significant volatility with Brent crude price soaring to USD 86 per barrel in early October 2018 and subsequently nosediving to a low of USD 51 in December 2018. However, the business environment in the Middle East for oil & gas projects is quite buoyant, with large-scale projects under various stages of development. There are now visible signs of higher capital expenditure in both Onshore and Offshore businesses. BOGE ADVENT is involved in implementation of indigenous 2G (Second Generation) Ethanol Technology through upcoming plants based on agro-waste under the National Biofuel Policy. Augmented Reality - Virtual Factory Visit (VR) Sales Force Automation solutions 229 230 MANAGEMENT DISCUSSION AND ANALYSIS ELECTRICAL & AUTOMATION BUSINESS ANNUAL REPORT 2018-19 Switchboard installation at a national infrastructure site Digital Training & Education SCADA Systems Energy conservation remained a major focus area in FY 2018-19 across all manufacturing locations. Various initiatives undertaken have saved total energy of 2392491 kWh. Notable conservation initiatives across all manufacturing locations include the use of LED lights, optimum temperature setting for ACs, installation of solar panels to reduce conventional energy consumption and the implementation of energy-saving options on CNC machines. Regarding safety, seven Lost Time Incidents were reported during the year from different project sites and factories of the business. There were no accidents reported at the Mahape, Ahmednagar, Coimbatore and Mysuru locations. The business has increased safety training man-hours. During the year, it spent 88% more man-hours in training in comparison with the last financial year. This has resulted in higher safety awareness among employees and consequently fewer Near-Miss Incidents in the year. Human Resources The sustained focus on employee development and engagement complements consistent business results. Enhanced workforce productivity is testament to innovative HR initiatives implemented year after year. The unique leadership development framework of STEP initiatives equip managers with the necessary leadership competencies required at different managerial levels. The business's ability to scale-up operations through the right talent mix as well as to provide an eco-system conducive to high performance, reflects a robust engagement matrix. Engagement frameworks on Rewards & Recognition (R&R) including Annual Awards and My-Day-My-Way stand out amongst the most popular and widely recognised initiatives across the business. Beyond engagement outcome and predictors, several human capital initiatives are designed to suit the business's strategy. Risks and Concerns Some parts of the businesses such as Meters, Control & Automation projects and supply of products to utilities are dependent on Government contracts and the stability of the Government's policies is essential to its growth. This risk is mitigated by an attempt to diversify the customer base. Environment, Health and Safety Private sector investments are also a driver for the business's growth. Political and policy stability will, in turn, determine private sector growth. Any instability is a risk to the business and mitigation is again being attempted through a focus on products in emerging technologies, such as solar, in which projects are likely to be relatively Government and policy-agnostic. Collaboration, Document Management System, Workflow Management The business has embarked on number of enterprise-wide transformation initiatives towards digitalisation and data analytics in alignment with its business strategy. These include: Business Environment 9060 8600 LARSEN & TOUBRO LARSEN & TOUBRY Ballery and Communication Modules for power quality control, the ENGEM range of wiring accessories, products for the agriculture segments, etc. Metering and Protection Systems Ongoing implementation of operational excellence initiatives such as Value Engineering, Lean Manufacturing, 5S, etc. have helped it to achieve cost efficiencies and to remain competitive. Project Maitri - IoT-based Smart Asset Management Solution Switchboard Business - Electrical Systems and Equipment Introduced a range of new products for the utilities segment i.e. feeder pillars, CSS (Compact Sub Stations) and Front RMU (Ring Main Unit) with FRTU (Feeder Remote Terminal Unit) New products for infrastructure projects (metros, airports, smart cities and high-end residential complexes) in global markets: Sub-Main Distribution Board (SMDB) and GIS for the wind segment Control and Automation Successfully developed its in-house AC drives of Series 690V and MV range, thereby reducing dependence on imports. Upgradation of the in-house developed SCADA i-VisionmaxⓇ which is gaining increased acceptance in the market. Digitalisation By shifting its low voltage switchboard manufacturing operations from Ahmednagar to Coimbatore the business has increased its manufacturing capacity for medium voltage products. Range of U Power Omega Air Circuit Breakers Asset Intelligence Management The increasing barriers to imports in some of the GCC countries resulting from an emphasis on local content and presence poses a challenge. Country-specific business models to deal with local legislation in this regard are being mooted to mitigate this risk. The oil & gas industry is a major customer for the business across geographies. Investment in this space is directly related to the stability of oil prices. A more balanced customer base with increased focus on new technologies, i.e., renewables and infrastructure, are mitigation approaches. tanks and LNG regasification terminals and cross-country pipelines. The business has a track record of successful simultaneous execution of multiple mega projects having diverse technologies from process licensors like UOP, Axens, Haldor Topsøe, Lummus Technology, Scientific Design, Black & Veatch, Ortloff, Air Products, ExxonMobil, Merichem, Foster Wheeler, Casale, BOC Parsons, Invista and Davy Process Technologies. The Company's Design Engineering Centres - L&T Chiyoda for onshore engineering and L&T GULF for pipeline engineering - enable it to offer its clients the complete spectrum of FEED, process and detailed engineering. In-Kingdom EPC prospects in Saudi Arabia are addressed through the Company's subsidiary, LT Arabia, registered as an IKEPC Company. Construction Services This business vertical renders turnkey construction services for refineries, petrochemicals, chemical plants, fertilisers, gas gathering stations, crude oil & gas terminals and underground cavern storage systems for LPG and cross- country oil & gas pipelines. Its major capabilities include heavy lift competency, application of advanced welding technologies, high levels of automation, management of manpower and material in large volumes at construction sites and Quality / HSE systems conforming to international practices. The business has also invested in strategic construction equipment, a range of pipeline-spread equipment, automatic welding machines and other plant and machinery for electro- mechanical construction works. The business has executed projects for major private sector customers as well as major oil PSUs. The Company's country-specific entities render construction support to international onshore projects - Larsen & Toubro Electromech LLC in Oman, Larsen & Toubro ATCO Saudia LLC in Saudi Arabia, Larsen & Toubro Kuwait Construction General Contracting WLL in Kuwait. Comprehensive modular solutions are offered, with a unique combination of Modular Fabrication Facilities backed by rich and extensive experience in Project Engineering, Procurement and Installation / Construction, Testing and Commissioning (EPIC/EPCC) in both Offshore and Onshore domains, in primarily the oil & gas sector. This includes fabrication and supply of modules and static equipment for offshore oil & gas fields, refineries, petrochemical plants and fertiliser complexes. World-class modular fabrication facilities are strategically located at Hazira (India's west coast), Kattupalli (India's east coast) and Sohar (Oman) with a combined annual capacity in excess of 2,00,000 MT (depending on the product mix). These 233 234 MANAGEMENT DISCUSSION AND ANALYSIS | HYDROCARBON BUSINESS ANNUAL REPORT 2018-19 3-D model of Normal Paraffin & Derivative Complex under execution for Farabi Petrochemicals at Yanbu, Saudi Arabia One of the 4 decks of SFNY-4D project installed in Safania Field for Saudi Aramco facilities offer year-round delivery capability with robust QHSE performance and are equipped with state-of-the-art infrastructure and machinery for operational and logistical flexibility, project management and cost competitiveness. The business is also equipped to supply foundations and other modules for offshore wind farm projects and modular e-houses. These all-weather waterfront facilities have easy access to clients across the globe and have load-out jetties suitable for the dispatch of large and heavy modules via ocean going vessels and barges. Advanced Value Engineering & Technology Services (ADVENT): The Company's erstwhile Engineering Services vertical has been restructured into a specialized vertical. Known as 'ADVENT', it offers customer-centric solutions for the Hydrocarbon industry and emerging industries while addressing the specific needs of the changing energy sector. LARSEN & TOUBRO Leveraging its expertise in high-end engineering and execution of large-scale technologically complex EPC projects, ADVENT delivers comprehensive solutions encompassing Design & Engineering, Project Management, Strategic Project delivery, Modularisation, Asset Management and Turnaround Services. A fully-integrated gas platform - the heaviest in Saudi Aramco's history - installed by float-over method at Hasbah Field in Saudi Arabia LARSEN & TOUBRO Modular Fabrication Services During the early part of FY19, L&T entered into a definitive agreement with M/s Schneider Electric, a French multinational company, to divest its Electrical & Automation business in line with the Company's policy to exit non-core businesses, subject to approvals from regulatory authorities. The Competition Commission of India in its letter dated April 18, 2019 has accorded approval, subject to certain amendments the details of which are awaited. IMPARTA Significant opportunities will be provided to the business by new infrastructure, public transport systems, airports and support to renewable energy. Government programmes like UDAY, Smart Cities, Smart Grid, Pradhan Mantri Krishi Sinchayee Yojana, Pradhan Mantri Kisan Samman Nidhi Yojana, Digital Villages, India's Electric Vehicles mission and increased focus on renewable energy will provide new opportunities for the business. Outlook Opportunities in the GCC region will emerge from the impetus to large renewable energy projects, the creation of new urban infrastructure and an increased focus on automation across sectors, notably in oil & gas. Growth in Africa is also expected to increase and the presence of the business in select geographies will be beneficial. 231 232 MANAGEMENT DISCUSSION AND ANALYSIS | HYDROCARBON BUSINESS ANNUAL REPORT 2018-19 GDP growth in India is expected to be at around 7% and CPI & WPI Inflation remained subdued. To fuel industrial growth, RBI announced rate cuts with a focus on improving credit and liquidity. HYDROCARBON BUSINESS L&T's Hydrocarbon business provides integrated 'design to build' turnkey solutions for the global oil & gas industry and fertiliser sector. The Company executes projects for oil and gas extraction and processing, petroleum refining, chemicals and petrochemicals, cross-country pipelines and terminals. In-house capabilities range from front-end design through detail engineering, procurement, fabrication, project management, construction and installation up to commissioning services. L&T's Hydrocarbon business is housed primarily in a wholly owned-subsidiary, L&T Hydrocarbon Engineering Limited (LTHE). The business has a fully integrated capability chain, including in-house engineering and R&D centres, world-class modular fabrication facilities as well as onshore construction and offshore installation capabilities. Major facilities in India include Engineering & Project Management Centres at Mumbai, Vadodara and Chennai, as well as Fabrication Yards at Hazira (near Surat) and Kattupalli (near Chennai). The Company's overseas presence is primarily in the Middle East, i.e. in the UAE (Sharjah), Saudi Arabia (Al-Khobar), Kuwait and Oman (Muscat). The business also has a major Modular Fabrication and Heavy Engineering Facility at Sohar in Oman. 40,000 MTPA Melamine Plant for Gujarat State Fertilizers & Chemicals, Vadodara, India The business caters to clients across the hydrocarbon value-chain through the following business verticals: Offshore Lumpsum turnkey EPCIC solutions are offered to the global offshore oil & gas industry encompassing wellhead platforms, process platforms and modules, subsea pipelines, brownfield developments, offshore drilling rigs (upgrade and new-builds), floating production storage and off-loading (FPSO) modules, deep-water subsea systems, offshore windfarm projects and decommissioning projects. The business has comprehensive engineering capabilities covering the complete project life cycle from feasibility studies, concept, FEED, 3-D model based detailed engineering, special studies to commissioning for offshore projects. The offshore capability is supplemented by a self-propelled heavy-lift-cum- pipe-lay vessel - LTS 3000-held in a joint venture with Sapura Energy Bhd and a recently-acquired pipe-lay barge - LTB 300 - which will be an enabler in augmenting the Company's offshore installation capabilities. Onshore The business vertical provides EPCC solutions for a wide range of onshore hydrocarbon projects covering upstream oil & gas processing, refining, petrochemicals, fertilisers (ammonia & urea complexes), cryogenic storage Overview: 84 LTI's Delivery Centre in Warsaw, Poland LT Let's So Technology-led operations is a big business driver for large Banking and Financial services clients and the business is also witnessing APIfication of the application landscape to drive simplicity. In the Insurance sector, digital is driving an unprecedented shift towards lower cost structures and greater agility while focusing on enhancing the customer experience. 5. Awarded Cybersecurity project by a global energy giant to implement, configure and integrate Micro Focus ArcSight and Splunk Enterprise Security 6. Multi-year, multi-million dollar managed services deal across the globe for a world leader in the pharma space 244 7. A US Insurance major has engaged LTI as strategic IT partner for its largest technology modernization programme using the Guidewire product suite Lobby area at LTI Headquarters, Mumbai MANAGEMENT DISCUSSION AND ANALYSIS INFORMATION TECHNOLOGY BUSINESS ANNUAL REPORT 2018-19 energy clients continue to evaluate their capital spend with prudence to manage their profitability. 4. A global life sciences major, a new client, has awarded LTI a multi-year strategic deal for end-to-end SAP support, maintenance, analytics and enhancement 3. Selected by a global fintech company to provide agile assurance support for building an industry leading wealth management platform 2. A world leader in vertical transportation has chosen LTI as its strategic partner for implementing Microsoft Dynamics 365 as their core platform to transform their services business in the areas of Sales, Call Centre and Field Services 1. A leading payments company in the Nordic region chose LTI as its primary IT partner post vendor consolidation Major Achievements The advent of new technologies has flooded the market with new players and blurred the lines between Telecom, Media and Hi-Tech companies. Adding to these complexities, consumers are moving towards new digitalised sources for their content like voice command devices, wearable devices, application based streaming, etc. Amid all this technological change, media companies are forced to re-imagine both their business models and their systems to align to new market and digital realities. In the manufacturing sector, especially in the automotive space, the OEMs are re-evaluating their spend priorities in the light of transformative changes based on the convergences of disruptive forces including connectivity, electrification and autonomy. These changes have provided LTI opportunities in digital customer experience, increased spending on analytics, platform for launch of mobility services, etc. Given the volatility in commodity prices, Digital revenues grew more than 30% to reach USD 33 billion and now represents over one-fifth of the IT industry revenue. Primarily there are six technologies from the suite which are driving this phenomenal growth - Intelligent Automation, Robotics, Cloud, IoT, Immersive Media and Blockchain. In the age of digital technologies, the IT industry has been adept at building the necessary skills and capabilities to address new and changing customer demands. Over the past few years, firms have made substantial investments in building their portfolio of capabilities around these technologies and have set up a number of labs and Centres of Excellence to deliver digital services to customers. 8. A global financial services group headquartered in Europe selected LTI to transform user experience across their branches in Africa 243 9. Multi-year multi-million dollar deal in the area of ERP, Data and Analytics with a global consumer and pharmaceutical conglomerate . 11. A global auto major selected LTI for a SAP security engagement and to build an enterprise outreach platform using Big Data Analytics and enterprise integration that will cater to all the client's recalls These five guiding principles have helped the employees to be nimble towards changes, work beyond the call of duty to serve its clients and innovate on a day-to-day basis to transform the approach to work. LTI's state-of-the-art Delivery Centre in Johannesburg, South Africa • Be agile Go the extra mile ⚫ Push frontiers of innovation Keep learning Solve for society • LTI has also institutionalized five key beliefs across the organization: with gender diversity continues to be the major focus areas for LTI. As a talent and innovation driven organisation, LTI's top priority is attracting the best people and investing to further develop their highly specialized skills. Strengthening the commitment to nurture the biggest asset - People, LTI started an HR transformation initiative - Mission Ubuntu. This initiative is steered by a cross-functional taskforce to enhance every aspect of employees' work-life through policy intervention and process improvement. Mission Ubuntu sketches an employee's journey through LTI as a nine-step process starting from his/her onboarding. LARSEN & TOUBRO LTI crossed the milestone of having more than 25,000 employees during FY19. Hiring, engaging, retaining talent Human Resources 10. Selected as the strategic IT Partner by a global electric manufacturing major for complete transformation of its legacy IT systems globally competitors across domains and services, the Company topped the list of 'Challengers' in the Everest Group's PEAK MatrixTM Service Provider of the Year 2019, for the second year in a row. The Challengers List includes companies with revenues less than USD 2 billion. LTI is making significant investments in augmenting its existing capabilities like Cloud services and Analytics, incubating newer service lines like Blockchain and Cybersecurity and expanding its portfolio of offerings through acquisitions. Digitise the core by leveraging our real world know how of the client's industry domain Helping clients experience transformation for their customers and/or employees Empowering clients to be data-driven organizations by harnessing the power of analytics Operate to transform- leveraging automation in everyday operations and solving for the unstated needs . • in their digital transformation journey by being sharply focused on their business outcomes. Some of the practices used to attain this are: Client centricity is at the nucleus of LTI's corporate strategy. Customers are now more focused on their Digital Transformation than ever before and LTI helps its clients Significant Initiatives Recognizing LTI's consistent ability to outperform Mosaic Experience Center at LTI Headquarters, Mumbai Risks and Concerns || LARSEN & TOUBRO Group Gathering Station-11 for RIL's Coal Bed Methane Field Development Project, Shahdol, Madhya Pradesh Refinery capacity additions of about 17 MMTPA along with petrochemical integration are planned in FY 2019- 20. Deregulation of fuel prices is encouraging overseas companies to invest in retail and refinery projects. India's domestic polymer demand is growing at about 8.5% per annum and India is currently the net importer of polymers. The Indian Government is keen on India's becoming a gas- based economy. This will provide significant opportunities for LNG import terminals and gas pipelines. India is the fourth largest LNG importer in the world. LNG imports into the country accounted for about one-fourth of total gas demand, which is estimated to double over the next five years. The Government of India aims to increase the use of biofuels / alternative fuels to cut its oil import bill by 10% by 2022 and plans to build 2-G ethanol plants using agricultural residue. The Company is well poised to undertake execution of these 2-G ethanol plants and is gearing up for other Waste-to-Value projects. This serves as a significant opportunity to the business in upcoming years. During the year, 55 oil and gas exploration areas were awarded under the first round of Open Acreage Licensing Policy (OALP). The Government has auctioned an additional 14 blocks in the second round and 23 blocks in the third round. ONGC is also planning to invest USD 3 billion to explore ultra-deepwater fields in Cluster 3 on the east coast of India. E&P activities are also picking up in Vietnam and Myanmar. India will be Asia's fastest-growing economy in the next four years i.e. 2019-23. Oil demand in India is growing at CAGR of about 4.5%. The gas energy mix is expected to shift from the current level of 6.5% to about 15% by 2022. India is planning to double its annual gas production to 60 BCM by 2022. The Government of India is incentivizing Enhanced Oil Recovery (EOR) projects. Also, India has an ambitious plan to enhance its refining capacity from about 248 MMTPA to about 438 MMTPA by 2030. US oil production is expected to grow by around 1.2 million barrels per day in 2019, and will be balanced by production cuts by OPEC countries and their allies. Oil prices are expected to be range-bound around USD 60 to 70 per barrel during FY 2019-20. Outlook The Company's risk management policy and guidelines have enabled it to create a consistent set of standard tools and templates, incorporating global best practices and procedures. This enables the Company to build the ability to anticipate challenges and opportunities in order to achieve its strategic objectives. Proactive Risk Management is an integral part of the overall governance process to identify, segregate, mitigate, control and monitor various risks at all levels - business, prospect and operational. Mangalore Aromatic Complex for ONGC-Mangalore Petrochemicals Limited, India Panoramic view of PTA Plant for JBF Industries, Mangalore MANAGEMENT DISCUSSION AND ANALYSIS | HYDROCARBON BUSINESS ANNUAL REPORT 2018-19 239 Localisation is increasingly becoming a key differentiator. ADNOC is driving an In-Country Value (ICV) programme, while Saudi Aramco is driving an In-Kingdom Total Value Add (IKTVA) programme with the objective of growing and diversifying their economies and creating opportunities for their nationals in the private sector. The Company has executed a Memorandum of Understanding with Saudi Aramco for commitment to IKTVA with a Five Year Plan. The South East Asian region continues to protect local players under the 'Bumiputra' concept. The major risks - such as impact of fluctuating oil process, onerous contract terms by client, tight schedule, counterparty risk, localization requirements, forex exposure, vendor default, delay in material delivery, QHSE, Productivity, etc. – are mitigated through specific actions like operational excellence initiatives, alliances, cost optimisation, improved customer intimacy, compliance with stringent QHSE standards, proactive hedging, strong contract and claims management and identification of key personnel and talent at the pre-bid stage. Awards, Talent Champions, Team Building Workshops, non-monetary recognition events, etc., are periodically undertaken to enhance the employee motivation. The design and deployment of the GENIE Engagement survey and the GPTW with the subsequent business-specific and managerial level interventions undertaken and communicated through the multiple forums of 'IGNITE' like 'Town Hall', webcast, video conferencing bears testimony to the commitment to create a highly engaged work-force. The Company inculcates a culture of appreciation through various Reward & Recognition interventions. The 'I-TOO' recognition framework, initiatives like ICONS, Long Service The organisation utilises state-of-art training infrastructure and resources to develop the project management skills as well as functional and leadership competencies of its employees. It also nurtures and grooms talent. The business focuses on acquiring a unique and diverse set of talented and passionate individuals. It has adopted various policies and initiatives for the sustenance of healthy employee relations, employee growth and development as well as work satisfaction. Human Resources As a responsible corporate citizen, the Company is determined to continue operating in an environmentally sustainable manner by preserving resources, mitigating negative impacts and improving efficiency. The Company received the Sustainability 4.0 Award 2018 under the Challengers Category from Frost & Sullivan and TERI. Risks and Concerns 240 LARSEN & TOUBRO The widening demand- supply gap for petrochemicals, coupled with enhanced returns for integrating petrochemical complexes vis-à-vis standalone refinery, is driving the integrated refinery and petrochemical complex model. Saudi Aramco plans to invest over USD 140 Bn in oil, gas and petrochemical projects over the next five to six years. The UAE is planning a USD 36 Bn spend over the next five years, with a focus on gas production. Kuwait is also diversifying into the petrochemicals segment and has announced a USD 115 Bn investment plan, roughly divided equally between the upstream and downstream sectors. Qatar is planning to invest to USD 5 Bn in the offshore sector to increase its LNG Liquefaction Capacity to 100 MMTPA. These prospects will provide significant business opportunities for the Company in the region. 11 10 G 242 The global IT-BPM industry grew by 4.9% and the IT-BPM market excluding hardware stood at USD 1.4 trillion in FY 2018-19. Indian IT-BPM industry revenues excluding hardware stood at USD 162 billion in FY19. The industry added USD 11 billion in incremental revenues last year, representing year-on-year growth of ~7% in USD terms. IT-BPM export revenues for the industry for FY19 are expected to reach USD 136 billion, a growth of 8.3% over the past year. Domestic IT-BPM revenues are estimated at 1.5 trillion, a growth of 6.6% from 1.4 trillion in FY18. Business Environment LTI is at an inflection point. It is right sized to re-skill its employees with digital technologies while having the resources of an established player to invest in capabilities enhancement, which would power its multi-year growth trajectory. To augment its digital capabilities, LTI announced two acquisitions in FY19. In January 2019, it acquired Ruletronics, a Pure-play PegaⓇ consulting and implementation company with offices in the UK, USA and India. In February 2019, it acquired Germany based NIELSEN+PARTNER (N+P), an independent Temenos WealthSuite specialist. This acquisition is synergistic to Syncordis acquisition that LTI announced in 2017. Together with Syncordis, N+P strengthens LTI's capabilities as a global expert in Temenos suite of products and enriches offerings to Banking clients. Its clients comprise some of the world's largest and most well-known organisations, including over 65 of the Global Fortune 500 companies. LTI offers an extensive range of IT services to its clients in diverse industries such as Banking & Financial Services, Insurance, Manufacturing, Energy & Utilities, Consumer Packaged Goods, Retail and Pharma, High-Tech and Media & Entertainment. Its range of services includes application development and maintenance, enterprise solutions, infrastructure management services and cyber security, testing, analytics, Al and cognitive, enterprise integration and mobility and platform based solutions. Larsen & Toubro Infotech Ltd. (LTI) is a global technology consulting and digital solutions company helping more than 300 clients succeed in a converging world. With operations in 30 countries, it goes the extra mile to help clients accelerate their digital transformation with LTI's Mosaic platform enabling their mobile, social, analytics, IoT and cloud-based journeys. Founded 20 years ago as the information technology arm of the Larsen & Toubro group, LTI's unique heritage gives it an unrivalled real-world expertise to solve the most complex challenges of enterprises across all industries. LTI is headquartered in Mumbai and has a presence across the globe, significantly in North America and Europe. In the international arena, GCC region and Algeria will see higher outlays for gas, downstream and petrochemical projects. Overview: 511 INFORMATION TECHNOLOGY BUSINESS MANAGEMENT DISCUSSION AND ANALYSIS INFORMATION TECHNOLOGY BUSINESS ANNUAL REPORT 2018-19 241 141 However, the business is confident of maintaining its credo of being cost-competitive and ensuring on-time delivery of large, critical and complex projects, worldwide. The business will accomplish this by virtue of its customer focus and responsiveness, sustenance of experienced and highly skilled human resources, world-class Quality and HSE practices, a culture of excellence, distinctiveness in corporate governance, extensive IT-enabled processes, digitalisation and state-of-the-art IT security practices. On the other hand, competition intensity is expected to remain high with predatory pricing, especially by competitors with large underutilised assets. Also, clients are expecting EPC contractors to share the benefit of value addition over the tenure of the project. Shale gas/oil will continue to drive petrochemical and LNG liquefaction investments in the US, which will offer opportunities for high value engineering and modular fabrication services. There is increasing thrust on modularization to reduce site presence. Modular Fabrication and ADVENT businesses are aggressively exploring alternative product lines as well as strategic partnerships to enhance yard utilisation and provide integrated modular solutions. Algeria has plans to invest about USD 55 Bn in the next 5 years. The recent breakthrough in Algeria will open up significant opportunities for the Company to leverage its modular fabrication capabilities. LTI's global headquarters in Powai, Mumbai, Failure to align the services portfolio with newer and in-demand technologies, may lead to lower operating LARSEN & TOUBRO With a majority of the revenue being foreign currency denominated, the business carries translation and transaction foreign exchange risks. However, expenses in respective currencies provide a natural hedge. LTTS has vast experience in product development, digitalisation, user experience engineering and testing & certification. LTTS offers its customers a one stop-solution covering the gamut of services in product variant development, 5G capabilities, simulation & automation, and product and midlife support. LTTS Narrow Band loT (nBloT) solution, 'nBon', was developed with low memory and low power footprint. It provides thorough loT device management, enabling easy integration with custom target platforms. Process Industry LTTS provides its services in E/EPCM (Engineering, Procurement and Construction Management), Engineering Reapplication and Global Rollouts, Plant Sustenance and Management, Regulatory Compliance Engineering along with chemical, consumer packaged goods (FMCG) and energy and utility sector clients. LTTS W.A.G.E.S. (water, air, gas, electricity, and steam) management solution, integrated with sensors and smart meters, implements a Supervisory Control and Data Acquisition (SCADA) system. LTTS has broad expertise in traditional EPCM and operational maintenance projects, as well as contemporary digital engineering enterprises. LTTS is furthering its engineering footprint to include the digital sphere, and is working with its customers across the globe on 'Smart Manufacturing' technologies such as automation, IoT, analytics and augmented reality (AR). Medical Devices LTTS helps medical device OEMs address industry challenges, accelerate time-to-market and optimize costs, leveraging its deep domain expertise and best-in-class technological capabilities. It focuses on delivering solutions in diagnostics, patient mobility services, musculoskeletal services, life sciences, surgical services, cardiovascular, home healthcare and general medical. LTTS has designed and developed innovative products and solutions such as the world's first drug patch applicator, smart inhalers, connected hospitals, integrated reusable vessel sealing and surgical staplers for emerging markets, along with the world's first airway clearance system with Bluetooth connectivity, among others. Business Environment According to NASSCOM, by FY2022, the global ER&D spend will be on an upward trajectory and reach USD 2 trillion. Indian ER&D exports are projected to leap from USD 28 billion in FY2019 to USD 42 billion in 2022 - a CAGR of 14%. Within ER&D, the share of digital engineering is likely to increase significantly. Zinnov estimates that corporations spent USD 293 billion in 2018 on digital engineering, which will grow to USD 667 billion by 2023. 247 LTTS helps automotive firms harness the power of advanced telematics, intersecting security, implementation ROIs, and end-user satisfaction 248 Increased industry focus on emerging technologies viz. Artificial Intelligence (AI), Internet of Things (IoT), Machine to Machine (M2M) communication, Augmented Reality (AR)/Virtual Reality (VR), 5G, Cyber Security, Advanced Robotics, Mobile Applications and Blockchain are finding use-cases across verticals. This increased digital affinity from the enterprises worldwide has resulted in business models shifting to platforms, data monetization and go-to-market strategies that stand out. Transportation: Autonomous vehicles, electric cars, connected cars, ADAS, Factory 4.0 are some major trends shaping the automotive industry. Predictive maintenance, shop-floor automation, in-flight connectivity and digital twins are driving growth in aerospace and defence. The trucks and off-highway segment is benefitting from the growing demand in construction, logistics, agriculture and mining sectors. Industrial Products: Major trends in this segment are related to Industry 4.0 such as smart manufacturing, robotics, artificial intelligence and the Internet of Things (IoT). Significant investments are being made in product simulation, predictive asset management, factory & plant automation, cloud computing, smart sensors and 3D printing. Telecom & Hi-Tech: In Telecom, 5G, virtualization of functions as well as robotic process automation are the primary trends. Customer engagement and monetization have become more effective, leveraging AI, ML and data analytics. The consumer electronics segment has experienced faster time-to-market driven by connected and smart devices, data monetization and open source systems. The semiconductor space is being driven by connected chips and integrated API platforms while in media and entertainment, OTT platforms & services, AI / ML-based content recommendations and targeted advertising are the major trends. Process Industry: The need to ascertain cost-optimization in plants is a major element that is driving the expansion of asset management in manufacturing. The need to ensure prevention of potential asset failures and precautionary measures is expected to motivate the development of this market. Moreover, plant digitalisation and cloud- based asset management are enhancing overall safety, productivity and compliance. Medical Devices: This segment is expected to be driven by preventive healthcare leveraging increasing adoption of technologically advanced smart wearables and real-time monitoring. The rising need for early diagnosis and prevention of diseases and compliance to stricter regulatory environments are key priorities for medical devices OEMs. revenue. Evolving geo political and economic conditions may affect the client's business and/or the entity's delivery. This may impact the business opportunities and business operations. Changes in immigration policies of countries where LTI has significant business may affect ability to position consultants at client locations. Load-out of two mega Tie-in Platforms (7000 MT each) for Hasbah Field, Saudi Aramco from L&T Hydrocarbon Engineering's Oman facility MANAGEMENT DISCUSSION AND ANALYSIS TECHNOLOGY SERVICES BUSINESS ANNUAL REPORT 2018-19 Telecom and Hi-tech Headquartered at Knowledge City, Vadodara, L&T Technology Services helps clients gain the competitive edge by building smart products, enabling smart manufacturing and offering smart services. LARSEN & TOUBRO Outlook LTTS' Healthcare practice helps OEMS develop sophisticated medical devices at affordable costs A healthy deal pipeline, continued large deal momentum and uptick in digital services across all verticals gives a sense of optimism for future growth. With deep-rooted industry experience and one of the industry's most dynamic teams, LTI is well positioned to solidify its position as next-gen IT services Company. 245 246 Employees are the real assets for the IT industry. In order to compete effectively, the ability of the business to attract and retain qualified employees is critical. Attrition of experienced and talented employees impacts organisational knowledge and relationships. TECHNOLOGY SERVICES BUSINESS Bearing tor 2 MANAGEMENT DISCUSSION AND ANALYSIS TECHNOLOGY SERVICES BUSINESS ANNUAL REPORT 2018-19 Overview: L&T Technology Services Limited (LTTS) is a leading global pure-play Engineering Research & Development (ER&D) services company. It offers design and development solutions throughout the product development chain and provides services and solutions in the areas of mechanical and manufacturing engineering, embedded systems, engineering analytics and plant engineering. LTTS customer base includes over 50 Fortune 500 companies and 51 of the world's top engineering research and development (ER&D) companies, across industrial products, transportation, telecom & hi-tech, medical devices and the process industries. The business also provides digital engineering advisory services to some of the world's leading establishments. The key differentiators for the business are its customer-centric industry innovations, domain expertise and multi-vertical presence spanning major industry segments. Transportation LTTS offers the complete gamut of engineering services and solutions for its global customers in the transportation industry, including OEMs and Tier 1 suppliers in the automotive, trucks & off-highway vehicles and aerospace sectors. In the automotive sector, LTTS helps its customers through advanced technologies such as autonomous driving and electric Mixed Reality and VR technologies create delightful immersive experiences for industries ranging from transportation to smart homes vehicles. In the aerospace sector, LTTS's services cover aerostructures, aero systems, aero engines and avionics. Its digital offerings in this segment span in-flight entertainment and connectivity, air traffic management and drone-based solutions. LTTS also has over a decade of domain expertise in enabling leading brands in the trucks and off-highway segment. LTTS caters to customer requirements through specialized state-of-the-art research and test labs for power electronics, tear down and smart manufacturing across its global delivery centres. Industrial Products Stator 5 Through its extensive expertise in industrial products, LTTS helps its OEM customers across building automation, home and office products, energy, process control and machinery. LTTS home-grown building management solution, iBEMS, breaks the silos between various systems in a facility and enables cost savings, energy management and quicker decision-making by using predictive analytics and real-time insights. LTTS Industrial Products segment facilitates end-to-end product development guidance, deep domain expertise across software, electronics, connectivity, mechanical engineering, industrial networking protocols, User Interface/User Experience (UI/UX), test frameworks and enterprise control solutions. 25:12 Process Industry • Medical Devices • Delivered customised digital solutions for a brewery major in North America for the first time and executed 6 pilot projects that are currently being scaled-up globally Currently executing a multi-year deal with Covestro to implement digitalisation-based engineering programmes across their 8 global locations Signed a high-value deal with a multi-national chemical company for a digital engineering project, which is one of the largest in this domain . • Won a large deal with one of the biggest tyre manufacturers • • Won a multimillion-dollar digitalisation project from ExxonMobil in April 2018 Expanded footprint in Europe with two large deals - one involving development of high-end capabilities for a customer in the beverage and brewery industry and another deal to execute an EPCM order for a greenfield project with a German chemical major • Secured a deal with a global pharmaceutical company for developing a mobile platform for diabetic therapy Solar connectivity drone capable of maintaining a continuous flying time of 12 months enables low cost mass connectivity to rural areas Partnered with a leading in-vitro diagnostics company to launch an efficient automated blood cell counter for price-sensitive, small and medium sized labs Developed a cybersecurity framework for medical devices to complement its solutions for Internet of Medical Things to facilitate secured connectivity and monitoring of medical devices Significant Initiatives The business aspires to continue being a global leader in the ER&D segment. LTTS has undertaken several significant initiatives to achieve this objective. These initiatives include: IP and Solutioning To capitalize on the disruptions and current digitalisation wave, the business is investing in building new age LARSEN & TOUBRO solutions and technology platforms. In FY19, LTTS was able to scale-up its portfolio of platforms and solutions, as well as incubate new ones to address requirements in emerging areas. There was a significant jump in the number of pilots and POCS that were done by LTTS around these platforms for customers. Some interesting and challenging assignments executed include: • Developed Iron Home, a next-gen smart home security platform • Assisted a leading medical equipment manufacturer by enhancing the reliability of their slide-maker strainer equipment Design Thinking Studio at LTTS' Bangalore campus • Secured multimillion-dollar deals, with two leading automotive manufacturers, in the space of HIL simulation and autonomous validation and infotainment assessment respectively 250 HOW TORING LARSEN & TOUBRO Essentially, the growth in the ER&D ecosystem will be driven by a convergence of emerging technologies and business model innovations, along with the growth of technology enterprises and start-ups constituting a dynamic global engineering ecosystem. This will be in an environment replete with strict data protection directives, increasing instances of cyber terrorism and the rising need for cloud-based cybersecurity solutions among enterprises. Industrial Digitalization creates enormous opportunities for companies to increase customer value through streamlining processes Major Achievements Transportation Predictive analytics solutions foster real time machinery condition monitoring for manufacturers . Deployed several cutting-edge technologies for PMA (Part Manufacturing Approval), digital innovation and recognition for aircrafts, advanced rail signalling design and RAMS and special purpose text fixture design • Implemented several of its homegrown offerings in transportation domain such as its cognitive Al framework AiKnoTM in MRO and after-market activities, its application solution for shop floor material tracking and asset management and its flight infotainment services and response improvement solution Industrial Products • Won a major deal with the world's leading software company for 'smart building' consultancy MANAGEMENT DISCUSSION AND ANALYSIS TECHNOLOGY SERVICES BUSINESS ANNUAL REPORT 2018-19 . • Won a landmark project to be the ER&D partner for a US Industrial Automation major and a large deal in smart manufacturing for a leading automotive major in the US. • Facilitated major innovations for the electrical vehicles market such as a high-efficiency DC to DC convertor and on-board charger and environmental cleaning solutions for the marine industry to facilitate emission reduction . Helped various global customers in mining and discrete manufacturing with machine automation Telecom and Hi-tech . Awarded a network deployment automation project by a leading telecom customer Setup a 5G lab for designing and building future ready solutions for a leading semi-conductor company in the US • Involved in the development of the new-age smartphones capabilities for two top-tier OEMs • Developed a next-gen digital signage solution called FlyBoard • Created an in-house OTT solution framework 249 Signed a multi-year contract to provide digital content management services for a reputed technology company's industrial products segment Expanded footprint in Japan by signing large deals with 4 customers in medical devices, electromedical equipment and medical kit products The business has established design centres and centres of excellences across the globe. It has inaugurated its Digital Engineering Centre in Gothenburg, Sweden. Located in the Lindholm Science Park, the Centre will act as a near-shore development facility for customers in the region, providing proximity and support to their agile transformation initiatives. The business has also opened branches in Malaysia and South Africa and has initiated processes to establish a presence in China and Saudi Arabia in the next financial year. In Micro Loans, LTFH has been able to increase disbursements by 51% and book by 60% during the year. This was on the back of increasing penetration in existing geographies and opening of new geographies in existing states and new states such as Jharkhand and Tripura. New states entered in the previous year and this year have contributed 28% to the business during the last quarter. An increase in business has been achieved with improved collection efforts and a reduction in debtors YOY. This has resulted in regular collection efficiency being brought back to pre-demonetisation levels. management and a two-way communication processes. Our culture of 'results and not reasons' is instrumental in driving accountability and clarity across the organisation. The focus is to simultaneously build the capability of employees so that they can be held accountable. Building capability of employees will enable the organisation to achieve sustainable and long-lasting success. In its journey to create value sustainably by delivering top quartile ROE, the Human Resources function of L&T Financial Services has ensured that employees at all levels are aligned to this objective through effective performance Human Resources The Company focuses on the Home Loan market with an emphasis on direct sourcing of salaried customers through developer relations and an analytics led sourcing model. Our digital lending model of paperless sanction of home loans to salaried customers is a unique offering that has helped in quick turnaround of proposals. During the NBFC crisis in FY19, the Company has continued to support real estate projects funded by us, while selectively sourcing new business. In the Mutual Fund business, the AUM of the Company increased by 13% to 69,689 crore during FY19 as against 61,603 crore in FY18. The Wealth management business increased its focus on Dubai, where the yield on the assets is higher and serves as a natural hedge to the India business. With tightening of liquidity, the business saw lower growth in the Order Book for Infrastructure Financing and a decline in the Asset Book for Structured Corporate Finance. During the year, the Company started building a Government Securities (G-Sec) book which will also act as a low-cost liquidity reservoir in adverse market conditions. A wide range of Mutual Funds to suit every investment need LARSEN & TOUBRO Wholesale Finance During the year, the various segments of business performed under the stated business environment: LTFH increased its market share in Farm Equipment Finance from 12.5% to 14% in FY19. Through rigorous execution of digital propositions on the ground and domain expertise, LTFH has been able to increase its market share in Two-Wheeler Finance from 8.2% to 11%. With the implementation of 100% automated credit decision, LTFH has been able to improve collection efficiencies and reduce NPAs. With this clear strategy in place, LTFH has enhanced the disbursements in Farm Equipment and Two-Wheeler Finance by 19% and 67% respectively. Similarly, the Farm Equipment and Two-Wheeler Finance book has grown by 27% and 68% respectively through increased penetration in the identified branches. Major Achievements The Company is comfortably placed with respect to both liquidity and interest rate risks, due to its robust ALM and strong risk management framework. The Company enjoys positive gaps in both Structural Liquidity and Interest Rate Sensitivity. In addition to this, positive gap was maintained consistently even under '1 in 10' stress scenario in the 1-month bucket. f) Robust ALM Framework Environment, Health and Safety continuously improving PCR are important contributors to achieve a low Sigma. on more commonly talked about areas like cross-selling or customer acquisition. The Company believes in using the power of data to provide a strategic competitive advantage, improve productivity and enhance performance. Real Estate Finance Housing Finance MANAGEMENT DISCUSSION AND ANALYSIS | FINANCIAL SERVICES BUSINESS ANNUAL REPORT 2018-19 256 255 In the field of digital and data analytics, the Company primarily concentrates on optimising credit cost, collection cost and productivity rather than just focusing d) Digital initiatives and data analytics used to unlock RoE The Company is focusing on building a well-diversified book. Strong sell-down capabilities have helped the Company to limit the wholesale book growth without slowing down the business. An interplay of digital and ER&D with increased industry focus on emerging technologies including Artificial Intelligence (AI), Internet of Things (IoT), Machine to Machine (M2M) communication, Augmented Reality (AR) / Virtual Reality (VR), 5G, Cyber Security, Advanced Robotics, Mobile Applications and Blockchain are finding use-cases across verticals and are enabling companies to discover new revenue streams, while strengthening existing ones and serving the customers with much higher operational efficiency. Outlook Economic slowdown in key geographies or cyclical downturns in key segments could materially affect the revenue growth and profitability. Changing immigration laws and policies can impact the Company's ability to provide services to customers. Exchange rate fluctuations could materially impact the results of operations. Risks and Concerns e) Strengthening balance sheet with improved asset quality, increase in provision coverage ratio (PCR) and maintaining macro-prudential provisions We believe that true greatness is achieved by a Company only by having a low Sigma, which means minimising the variability of returns, along with earnings and growth. A strong risk management framework, improving portfolio quality and • ALP (Accelerating Leadership Potential), an initiative for refining the leadership skills of leaders have already acquired, and for developing those essential for the greater responsibilities ahead LTFH aligns its social responsibility theme and commitment with the United Nation's global development agenda of Sustainable Development Goals (SDG). The core areas of Integrated Water Resource Management (IWRM) and Digital Financial Inclusion are designed to ensure sustainable livelihood opportunities with the intent to bring the deserving but vulnerable population into the mainstream economy. IWRM programme engages with the communities and more specifically farmers and implement interventions which address their core needs in water and soil health management. Climate change is leading to increasing incidents of natural disasters in India. The business supports disaster recovery efforts through a number of practical methods. These include prompt affected area assessments and a provision for immediate relief. The business considers safety as an integral part of its business operations and due importance has been given to maintaining safety standards. 258 • Housing Finance comprising Home Loans & LAP and Real Estate Finance • Wholesale Finance comprising Infrastructure Finance, Structured Corporate Finance and Debt & Capital Market • Rural Finance comprising Farm Equipment Finance, Two-wheeler Finance and Micro Loans L&T Finance Holdings (LTFH) is one of the leading private non-banking financial services companies in India. The businesses are Rural Finance, Housing Finance, Wholesale Finance, Investment Management and Wealth Management. L&T Finance Holdings Ltd. is a NSE and BSE listed company and is also registered with RBI as an NBFC and a Core Investment Company (CIC). It conducts its financial services businesses through various subsidiaries. L&T Financial Services (LTFS) is the brand name of L&T Finance Holdings Ltd. Functionally, the structure of the Financial Services business is as follows: Overview: Farm Equipment Finance SERVICES BUSINESS FINANCIAL MANAGEMENT DISCUSSION AND ANALYSIS | FINANCIAL SERVICES BUSINESS ANNUAL REPORT 2018-19 254 253 LTTS aspires towards industry-leading, innovation-led profitable growth. Business Environment 257 India's GDP is estimated to have grown by 7% in FY 2018-19 on the back of lower growth in agriculture and mining sectors, lower Government spending on public administration and weaknesses in domestic and external demand conditions. However, the gross fixed capital formation rate improved from 31.4% in FY18 to 32.3% in FY19, reflecting a good pick up in investment spending, and bodes well for the financial services industry. On the positive side, retail (CPI) inflation is projected by Reserve Bank of India (RBI) to remain below 4% up to December, 2019. This should enable the Monetary Policy Committee of RBI to implement an easy monetary policy during a major part of FY20. Additionally, the RBI's continued purchase of Government bonds (open market operations), recent recapitalisation of Public Sector Banks (PSBS), release of five PSBS from the Prompt Corrective Action Framework (PCA) and the ongoing resolution of chronic stressed asset cases through IBC should remain supportive of the lending environment. economic growth in 2019 from a year earlier on the back of ongoing trade frictions, tightening of financial conditions and the Brexit related uncertainties. Global slowdown, tight financial conditions and political uncertainty in the election year may impact India's GDP growth during FY20. Past experience shows that India's growth mix remains skewed towards consumption and away from investment during the General Election year. Financial markets and capital inflows too may witness heightened volatility during FY20. Moreover, the new political regime is likely to follow fiscal prudence in H2, FY20, which may adversely impact public investments and growth in the latter part of the year. LTFS' 'Digital Sakhi' programme aims at digital financial inclusion of rural women Several global forecasters including the International Monetary Fund have lowered their projections for global Outlook At this juncture, there are several uncertainties that cloud India's growth outlook and macroeconomic stability during FY20. The investment spend may get impacted due to faltering growth impacting India's trade balance, political uncertainties due to upcoming general elections, in case of Brent crude price resurging, fiscal slippages, etc. penetration, risk mitigation through various market and credit checks, robust early warning systems, extensive use of analytics and best in class turnaround time proposition, the business is confident of managing the hazards of adverse business conditions. However, with the help of in-depth business knowledge and strong managerial capabilities, deep market Restrictive regulatory prescriptions for the NBFC sector not accompanied with the reforms of the long-term bond market may adversely impact the profitability of a set of mid-sized NBFCs and HFCs (housing finance companies) with possible negative implications for India's financial sector's stability. Risks and Concerns Wealth Management ANNUAL REPORT 2018-19 MANAGEMENT DISCUSSION AND ANALYSIS FINANCIAL SERVICES BUSINESS The Indian economy faced a slew of challenges around mid-FY19 from the external front triggered by a sharp increase in global Brent price, which led to a sharp depreciation in the Rupee, along with other emerging market currencies. Around the same time, the debt defaults by the IL&FS group triggered a crisis of confidence for the NBFC sector - a critical source of finance for the real estate sector. The AAA rated NBFCS with a strong promoter and shareholder backing and proactive economic intelligence and risk management units withstood volatile market conditions without hurting core operations - L&T Finance being one of them. • LEAD, a programme designed to help senior employees start their development journey as leaders • Illuminate, a programme which aims to leverage internal talent and create a pool of high potentials who can be moved across functions and to groom high potential candidates to take up higher roles and responsibilities • Just Code, a hackathon, aimed at offering employees an opportunity to plunge into an idea and convert it into a product Awards and Recognitions • Mutual Funds Expanding International Presence Technologies in 2017 and will act as a force multiplier to enhance the business's capabilities in the semiconductor and product OEM space. LTTS acquired Bengaluru-based Graphene Semiconductors to strengthen its offshore presence and deepen its expertise in VLSI chip design and embedded software. Graphene complements the strategic acquisition of US-based Esencia Mergers and Acquisitions a company building solutions for utilities and energy industry. This meant an integration of LTTS NB IOT IP with the partner's RF IP. Partnering for a complete NB IOT Modem SoC with • • Working with a leading data-centre services provider to implement predictive maintenance solutions that ensure uptime of the utilities infrastructure. Sensorising and connecting oil tanks of an oil major to monitor oil level in tanks. Sensorisation and connectivity are two big challenges and LTTS established this framework using its own IOT platform. Several global customers, reputed industry forums, global consultancies and media publications recognised the business in the highest echelons of engineering services innovators for its innovative products and solutions. As a hedge against interest rate cycles, the Company has established 'fees' as a second line of income. Fee income generation happens through various modes such as processing fees, subvention income, cross selling income, advisory fees and underwriting fees among others. a) Improved competitive position across all products Being in the 'Right Businesses' forms an important part of the strategy, in which 5 core businesses were identified by the Company. The core businesses were identified based on a 3-filtered approach - industry attractiveness, company profitability and our ability to extract value from it. FY19 has been a landmark year for the business, marked by the effective execution of the strategy put in place. The specific focus for the year was on the following areas: Significant Initiatives FY19 remained a challenging year for the Wealth Management industry. Market volatility coupled with a reduction in MF fees on account of regulatory measures impacted the business in the short term. Disbursement registered a growth in home loans while de-growth in the Real Estate sector. The real estate sector stabilised based on the implementation of regulatory frameworks (RERA, GST reforms) leading to price stabilisation. Farm equipment finance growth was led by record growth in the tractor industry. Increased urbanisation, sustained Two-wheeler finance Providing micro-loans to small-scale entrepreneurs LARSEN & TOUBRO focus on road infrastructure development and increasing fuel prices pushed consumers towards two-wheelers during the year, resulting in an increase in two-wheeler finance. Increase in micro loans on the back of increasing penetration in existing geographies and opening of new geographies. In the Wholesale Finance segment, the disbursements were focused on Infrastructure Financing, especially in Renewables and Roads and kept in line with the opportunities available for Sell-down. This enabled the Company to maintain the wholesale book around the same level and move towards increased retailisation of the balance sheet. b) Established fees as a second line of income to counter interest rate cycle Organisational Awards c) Increased ‘Retailisation' of balance sheet Recognized as the 'Best Company of the Year', and was also conferred the prestigious 'Excellence in Corporate Social Responsibility' award by the Indo-American Chamber of Commerce (IACC) LARSEN & TOUBRO Providing insights into products and equipment health through Augmented Reality • WIZneers, an internal platform to create a community of technology architects within the Company. Under this initiative, employees come together every fortnight to discuss and ideate on next-gen technology trends in the engineering services space like Blockchain, Artificial Intelligence and Machine Vision among others The Company's HR policies have strongly focussed on creating a culture of excellence and achievement. Abiding by the People, Process and Portals parameters, the business is striving towards making the employees at all levels an integral part of the decision-making system. There has been an enhancement of skills, efforts and achievements and employee satisfaction levels through various initiatives like: Human Resources LTTS constantly works on health, safety and providing an environment conducive to well-being. Since many of the employees work at client locations in factories for deployment of projects, they have been trained on 'Zero Harm' to ensure their safety and foster continuous improvement. At LTTS, it is a constant endeavour to extend sustainable and eco-friendly processes, services and solutions that contribute to sustainability throughout their life cycle. Facilities created within the premises have adequate green spaces and tree cover. Environment, Health and Safety • Acknowledged as a Leader in IoT Technology & Services by Zinnov across 12 unique expertise areas as compared to 7 in 2017 • Rated as a Leader in 6 market categories across 3 industries in the US market in the inaugural edition of ISG Provider Lens™ Recognized as a 'Leader' for Embedded System Engineering Services and positioned among the top 3 leading companies by the Everest Group LTTS has patented multi-voltage booster technology for a welding power source . 251 Positioned in the 'Leadership Zone' in the broadcasting vertical of the Zinnov Zones 2018 Media & Entertainment Services Report UBOT 252 An engineer wearing a mixed reality headset that helps solve contemporary business problems MANAGEMENT DISCUSSION AND ANALYSIS TECHNOLOGY SERVICES BUSINESS ANNUAL REPORT 2018-19 Technology Awards • The AiKno™ framework was selected as one of the Top 50 use cases in the NASSCOM Artificial Intelligence Game Changer Awards 2018 • Honoured with the 2018 loT Platforms Leadership Award by loT Evolution, a US-based technology publication, for their loT-powered Condition-Based Monitoring Solution 'Integrated MCare' powered by the Company's loT platform UBIQWeise2.0TM Research and Analysts Awards • • Awarded the HR Department of the Year distinction 2018 at the Delaware Valley Awards by the Rosen Group • Wealth Management • The TOD Project at Errum Manzil Mall (0.35 million sq. ft.) commenced commercial operations from August 2018. Musarambagh mall (0.24 million sq. ft.) is expected to commence commercial operations in April 2019. Construction work (0.5 million sq. ft. of office space) at Raidurg Site is underway. Business Environment About 10 million transport trips are performed every day in Hyderabad city, and a major share is undertaken by bus transport (50%). The city's roads are congested with 8% road area, and traffic proceeds at the very low average speed of about 12 kmph. The Company is poised to provide safe and punctual travel and has been working on various value-added initiatives to minimize the commuters' pain points, such as last-mile connectivity, digital ticketing, mobile apps, etc., which ensures higher ridership to the metro system. Establishing successful last-mile connectivity is a challenge and discussions with the Government are in progress to intensify steps to this end. Significant Initiatives The Company is exploring various non-fare revenue generating options, viz.: One of the road subsidiaries received a favourable arbitration award from the Arbitration Tribunal for a Transmission Lines • 31 Standard Operating Procedures (SOPs) have been formulated to: ■ define individual responsibilities and procedures relating to environmental, health and safety matters incorporate EHS considerations in all business processes Digitisation of the records and review all accidents, occupational health and safety related incidents by adopting a system called Route Operations Management System (ROMS) and reporting immediately to the concerned project head and functional head in the form of Preliminary Accident Information Report (PAIR) and Final Accident Information Report (FAIR). Monitoring to ensure that the employees avail of the medical check-up facility for themselves and their families. The Company's Interstate Road Corridor SPV received the Silver Award for Excellence in Highway Safety from the Ministry of Road Transport and Highways. Human Resources Employees are the backbone of the organisation. The HR Team concentrates on certain key areas, including recruitment of some of the best talent in the market and keeping them engaged by providing access to learning opportunities, Development Centres, challenging business assignments, and individual need-based specific development interventions. The Development Centre is a systematic and objective method to measure competence to provide insights into the strengths and development areas of individuals. Employees attended a fair mix of training on technical and behavioural programmes during the period in review. A section of the Hyderabad Metro 65 LARSEN & TOUBRO Outlook To achieve the Company's stated EHS objectives, the following key initiatives have been implemented. L&T IDPL would constantly evaluate new opportunities with worthwhile returns. The business sees major opportunities in the transmission line sector and also the roads sector under the Hybrid Annuity Model. The InvIT is expected to look at the secondary market for operational and revenue generating projects. Overview: L&T Metro Rail (Hyderabad) Limited (L&TMRHL), incorporated in August 2010, is a special purpose vehicle to undertake, construct, operate and maintain the Metro Rail System, including Transit Oriented Development (TOD), in Hyderabad under Public Private Partnership model on a Design, Build, Finance, Operate and Transfer (DBFOT) basis. It is the largest TOD in India and the world's largest PPP project in the urban transportation sector. The Company entered into a Concession Agreement with the erstwhile Government of Andhra Pradesh on 04.09.2010. The Metro Rail system is in Phase I, which includes three elevated corridors from Miyapur to L. B. Nagar, Jubilee Bus Station to Falaknuma and from Nagole to Shilparamam covering a total distance of 71.16 km. This entire distance is further sub-divided into 6 stages for ease of implementation. The concession period of the project is 35 years from the appointed date of July 5, 2012, and includes the initial construction period of 5 years. The concession period is extendable for a further period of 25 years subject to the fulfilment of certain conditions by the L&TMRHL as set out in the Concession Agreement. The Concession Agreement includes rights for Real Estate development of 18.5 million sq. ft., with strategically located land parcels interspersed at prime city locations, adjoining metro stations and metro corridors. The Company has tied up the entire debt for the project, which includes the cost of the rail system, and 6 million sq. ft. TOD, and achieved financial closure on 1st March 2011. The progress of the project as of March 2019 is as follows: - Stage 1, 2 and 3 were operationalized in November 2017 itself. Commercial operations of 16 km (from Ameerpet to LB Nagar) of Stage 5 263 264 MANAGEMENT DISCUSSION AND ANALYSIS | DEVELOPMENT PROJECTS BUSINESS ANNUAL REPORT 2018-19 India's longest extra-dosed, cable stayed bridge over the Narmada, Gujarat and 10 km in Stage 4/1 (from Ameerpet to Hi-Tec City) were inaugurated by the Hon'ble Governor on September 24, 2018 and March 20, 2019 respectively. ■L&T METRO RAIL (HYDERABAD) LIMITED The Government of India has provided a strong thrust to the Infrastructure sector and specifically to the highway sector, in the last Union Budget. The ambitious Bharatmala Programme has been approved for providing seamless connectivity to develop about 35000 km in Phase-l at an estimated cost of ₹5,35,000 crore. A significant slice of these projects is expected to be bid out under the Hybrid Annuity Model (HAM), which would be of interest to the company. The Company and its subsidiaries are committed to providing a safe and healthy workplace for their employees and stakeholders and to conserving the environment. EHS is one of the essential pillars of a good and robust corporate governance structure. • To monitor the FASTag traffic/revenue, the data is being pulled through API from the acquiring bank and the process is fully automated. After the Kudgi transmission line in Karnataka, the company participated in two new bids. There is substantial opportunity in new transmission lines coming up since generating capacity is increasing, especially from renewable sources. The National Committee has fast- tracked power evacuation system for the green corridor for renewable energy in Gujarat and Rajasthan. Business opportunities in transmission lines of approximately 30000 crore are also available from system strengthening of networks and power evacuation from generators to the grid. Based on the National Committee's recommendation, currently REC and PFC have come out with 9 bids for transmission lines under the 'Green Corridor' programme. Furthermore, 3 bids have been cleared by the National Committee for Tamil Nadu, Karnataka and Andhra Pradesh. Major Developments Toll Collections and Operations The total gross income from toll collections in 10 toll road subsidiaries (excluding the five subsidiaries transferred to InvIT) moved up by 23% over the previous financial year. This includes both traffic growth and annual revision of tariff. In NHAI projects managed by the Company (including InvIT projects), gross income from toll collections increased by An elevated road corridor decongests the bustling metropolis of Nashik LARSEN & TOUBRO 12% while Electronic Toll Collection (FASTag) increased by 66% over the previous period. Currently, over a quarter of all tolls are being collected under FASTag electronic toll collection. Kudgi Transmission Line The project faced a force majeure event in May 2018 when 5 of the 1162 towers collapsed due to unprecedented strong winds at Bannigola village in Karnataka. No one was injured during the event. The in-house team restored the towers and ensured power flow in a record time of 33 days. Except for this one-off situation, the project continues to perform well. Major Achievements During the year 2018-19, L&T IDPL monetized 5 of its road operational projects by selling its stake to an Infrastructure Investment Trust (IndInfravit Trust) set up by the Company as a sponsor. The said Trust was successfully listed with an issuance of units aggregating to 3700 crore, of which 15% is held by the Company. The other large investors of this first privately placed Trust are pension funds from Canada (CPPIB and OMERS holding approx. 30% and 22% of the units, respectively) and Allianz Capital Partners, Germany, a large global insurance group, holding 25%. Environment, Health and Safety Leasing out space for erecting mobile towers Significant Initiatives International investment for Indian infrastructure assets was attracted through the Company-sponsored Infrastructure Investment Trust InVIT - the first on a private placement basis. Asset Monitoring Systems for structures and highways of operating projects is underway, which will help in inventorying and monitoring of assets. Project LEAP, a business process re-engineering exercise, was completed during the year Digitalisation • • Rapid increase in FASTag electronic toll collection was made possible by streamlining our digital equipment at toll plazas. This has led to faster throughput of vehicles at toll plazas and reduced queues. It has also led to a less-cash operation. The Company has worked collaboratively with NHAI and other stakeholders to minimize reconciliation issues in FASTag collections. Highway route operation, maintenance and equipment function has been mobile enabled. 261 262 MANAGEMENT DISCUSSION AND ANALYSIS | DEVELOPMENT PROJECTS BUSINESS ANNUAL REPORT 2018-19 Rajkot-Jamnagar Highway • A dashboard using Tableau software called 'Revenue Assurance Dashboard', conceptualised by PwC and developed with the internal IT team, has been rolled out and used by SPV managers. change of scope claim. In another subsidiary, a settlement agreement was reached with NHAI on a project terminated in 2016, thereby relieving the lenders of a stressed asset. Skywalks connecting to malls and metros The Canada Pension Plan Investment Board (CPPIB) made substantial financial investments in L&T IDPL in two investment tranches during 2014-15. This is the first direct private investment by the largest Canadian pension fund into an Indian Infrastructure Development company. Leasing out optical fibre spare capacity The Hyderabad metro project has been adjudged the Best Green Building Project by the ET NOW CSR Leadership Awards ceremony. Other prestigious awards received by the Company during the Financial Year 2018-19 include: 1. Golden Peacock Innovative Product/Service award on Leadership for Business excellence and innovation. 2. Exceptional Metro Rail project award from Metro Rail India Summit 3. Best Urban Mass Transit Project award from GOI, Ministry of Housing & Urban Affairs 265 266 MANAGEMENT DISCUSSION AND ANALYSIS | DEVELOPMENT PROJECTS BUSINESS ANNUAL REPORT 2018-19 4-laning of Halol Godhra Shamlaji highway executed 4. Infrastructure Project of the Year (Outstanding Concrete Structure (Architects Award) from ICI Ultra Tech Award 5. Outstanding Public-Private-Partnership (PPP) Project in the Metro Sector in India from Rail Analysis India Awards 2019 6. International Leadership Innovation Excellence Award from the Institute of Economic Studies 7. Mobility Maven Special Awards 2018 from CIO 100 - International Data Group (IDG) Environment, Health and Safety L&T Metro Rail Hyderabad Limited considers Environment, Health and Safety as an integral part of its business philosophy. The management of LTMRHL is committed to conserving the environment and providing a safe and healthy workplace. • The metro system provides a welcome relief from the heavy air pollution caused by the growing number of vehicles and the congestion on roads. ◆ Tie up with cab operators • Sound pollution will be minimal, thanks to the efficiency of the coaches and the advanced engineering that has been used for constructing the track, viaduct as well as metro coaches. Safety Features Hyderabad Metro rail trains run on Automatic Train Operation (ATO) mode with an Automatic Train Protection (ATP) System that continuously monitors and ensures safe train operations. All vital train-borne equipment, the Station Equipment (computer-based interlocking (CBI) and wayside ATP), and vital signalling equipment are highly safe, and back-ups are available to ensure safe and uninterrupted train operation. Awards and Recognition • The Company has implemented a digital signature system over the traditional document signature for all the invoices raised to customers from various departments of LTMRHL to ensure strengthen security, cut costs, improve digital work flow and save time, avoid paper printing and effectively utilize storage space. • An initiative to digitalise information regarding Bank Guarantees has been undertaken to synchronize information across the company in a centralized manner. seamless, accurate and up-to-date accounting has been facilitated. Two decades of extensive experience in working with Governments, multi-lateral agencies, international and domestic financial institutions and corporate entities has helped the Company to develop proven competencies in Viability Assessment, Financial Closure, Project Management, Operations & Maintenance and Portfolio Management of Infrastructure Assets across various sectors. Vadodara Bharuch Toll Plaza LAT IDFL MANAGEMENT DISCUSSION AND ANALYSIS DEVELOPMENT PROJECTS BUSINESS ANNUAL REPORT 2018-19 260 259 Currently its portfolio includes 10 operational road projects covering 4434 lane km and transmission lines at Kudgi, Karnataka covering 482 kms. L&T Infrastructure Development Projects Limited (L&T IDPL) is a pioneer of the Public-Private- Partnership (PPP) model of development in India, which involves the development of infrastructure projects by private sector players in partnership with the Central and State Governments. Since its inception in 2001, the Company has completed landmark infrastructure projects across key sectors like roads, bridges, transmission lines, ports, airports, renewable energy and urban infrastructure. It is one of India's largest road developers, as measured by lane kilometers under concession agreements signed with Union and State Government authorities. Overview: DEVELOPMENT PROJECTS LIMITED (L&T IDPL) Passenger emergency stop plungers are provided on each platform and in the Station Control Room (SCR) to stop a train immediately in case of emergency. L&T INFRASTRUTURE d) Katupalli port under its subsidiary Marine Infrastructure Developer Private limited was divested in Q1 of FY 18-19 c) Power development projects executed through its subsidiary L&T Power Development Limited and its subsidiaries (L&T PDL Group) and b) The Hyderabad Metro Rail project, executed through its subsidiary L&T Metro Rail Hyderabad Limited a) Infrastructure projects executed through its joint venture company L&T Infrastructure development projects limited and its subsidiaries and associates (L&T IDPL Group) The Development Projects business segment comprises: • The Company put in place the automation of the Fare Revenue Accounting System by integrating the AFC (Automatic Fare Collection System) with the SAP Accounting System. Through this automation process, LARSEN & TOUBRO 765 kV DC Kudgi Transmission Line project DEVELOPMENT PROJECTS BUSINESS • Received time extension from Government for achieving final COD by December 31, 2019. Accordingly, the lenders have also accorded sanction of extension of time for COD up to two years i.e., up to July 2019, with corresponding increase in loan period. The operations of the Development Projects business segment primarily involves development, operation and maintenance of basic infrastructure projects in the Public Private Partnership (PPP) format, toll collection including annuity based road projects, power development and power transmission and providing related advisory services. Human Resources • It operates on electric systems, thereby curbing emissions. • Launch of voice-enabled BOT called LISA (LTMRHL Interactive Service Application) for employees of LTMRHL to enable resolution of service requirements The Company has Power Purchase Agreement (PPA) with Punjab State Power Corporation Limited (PSPCL) for selling all the power generated from this plant for a period of twenty-five years. The plant is built on the supercritical technology of Mitsubishi, Japan. It is the first 'made in India' supercritical power plant to be commissioned and operational in the country. The plant sources its fuel from the South Eastern Coalfields Ltd. (subsidiary of Coal India Limited) under a 20-year Fuel Supply Agreement (FSA). The Company also secured approvals to arrange coal from alternative sources to make up for any shortage in supply of coal under the FSA. The Bhakra-Nangal distributary is the perennial source of water for the plant under an allocation by the State Government. The plant is operated by an in-house team of experienced operations and maintenance professionals. The power plant has been running successfully for over five years with an availability of over 85% during FY19. NPL has been the most reliable source of power for the state of Punjab and has supported its requirements with uninterrupted supply during the peak season. NPL also happens to be the lowest cost power producer within Punjab with benchmark operational efficiency. Business Environment India's Electricity Generation grew at 5.4% in FY 19 and there was an addition of 2.12 GW of Thermal Energy Capacity Additions in the same period. The Power Demand in Punjab was 4541 MW (Q4 FY19) registering an 8% increase over the demand in the corresponding period last year. Coal shortages continue to plague power plants, resulting in higher merchant power rates. The Average Power Purchase rate was 3.92/KWh in FY19 vs ₹ 3.25/ KWh in FY18. Being at the top of the merit order, average energy charge for NPL remained at 3.30/KWh. Third Party Sampling and testing through CIMFR (Central Institute of Mining and Fuel Research) has been operating quite well to mitigate the grade slippage issues in linkage coal. Significant Milestones and Initiatives • Received a partial payment from PSPCL, based on a favourable Supreme Court judgement in the coal washing matter • Achieved an availability rate of over 85% • Plant operated at PLF of 74% despite plant shutdown due to forced outages • Secured highest ever imported coal approval of 9.5 Lakh MT Business Environment Transportation Sector Digitalisation • Naming rights for stations and advertisement wraps for trains are also added to the advertisement order stack-up. • Completed sign ups in the TOD retail malls with major international and national retail brands viz. Decathlon, Marks & Spencer, PVR, Lifestyle, Shoppers Stop, Starbucks, Reliance Retail, etc. • Discussions held with TSRTC, to emphasize that the nature of transport services is complementary rather than competitive, in order to improve last-mile connectivity. Steps have been taken to organise private transport for pick up and drop at metro stations and encourage large corporates to provide transport to their employees to and from metro stations. Working on favourable resolution of the waiver of arrears of power charges, sub-lease, security, compensation for delays and scope change, concession period extension and other issues pending with the State Government. Re-negotiate and amicably settle claims of contractors. • LARSEN & TOUBRO International Sea Port at Haldia Coimbatore Bypass Road COMBATORE CITY ◆ Focus on improving advertising income Consultancy services for other metros . ◆ Training metro staff with the existing infrastructure Nabha Power Limited (NPL) The Company has introduced employee-focused initiatives during current year: • Construction work in remaining part of Stage 4 (Hi-Tec City to Raidurg) in Corridor 3 and stage 6 (JBS to MGBS) forming part of Corridor 2 are proceeding at a brisk pace, and is expected to commence commercial operations during first half of the FY 2019-20. In thermal sector, Nabha Power Limited owns and operates a 2X700 MW super critical thermal power plant at Rajpura, Punjab. Overview: 267 268 MANAGEMENT DISCUSSION AND ANALYSIS DEVELOPMENT PROJECTS BUSINESS ANNUAL REPORT 2018-19 2 x 700 MW Rajpura Thermal Power Plant, Punjab ■ L&T POWER DEVELOPMENT GROUP • The Company intends to begin a large integrated development at Raidurg with a potential to develop 3.5 million sq. ft. comprising retail and grade A office space. The Government of Telangana has plans to implement Phase II of Metro project covering 85 km (including the airport link). This will significantly enhance average ridership due to the network effect. • Overall ridership expected to increase to approximate 10 lakhs per day on the opening of stages 4/2 and 6/1 in FY 2019-20, thus taking the total metro operations to 66 km. For the balance 5.5 km of stage 6/2, Right-of-Way clearance is yet to come from the Government. Outlook With progress achieved, the construction risk by way of non-availability of required Right of Way (ROW) and delay in approvals from Railways is mitigated to a large extent, except for one stage. The operational risks of safety of commuters and assets and alternative modes of transport are addressed by having a robust in-house team to check the safety measures and holding discussions with nodal agencies of alternative modes of transport to work in a complementary manner. Risks and Concerns Implementation of Project Parivartan - Competency Development Programme (a pilot project, based on heuristic study, to inculcate habit of using the e-learning platform in a classroom atmosphere) • LARSEN & TOUBRO A two-lane road transformed into a 6-lane highway • Launch of LnT (Leaders of new Tomorrow) - An idea incubation programme to inculcate the start-up mindset amongst the employees In the hydel sector L&T Uttaranchal Hydropower Limited is executing a hydel power project of capacity 99 MW in the state of Uttarakhand, which is in advanced stage of construction. The other three hydel projects in Arunachal Pradesh and Himachal Pradesh are under hold. L&T Power Development Limited, a wholly-owned subsidiary of L&T, is engaged in developing, operating and maintaining power generation assets. The portfolio comprises of projects in thermal and hydel power generation projects aggregating to 1499 MW. Online integration of shop floor activities The CE&O business consists of two broad segments, namely, Construction & Mining Machinery The Construction Equipment & Others (CE&O) business manufactures, distributes and provides after-sales support for construction and mining equipment for diverse industries and applications. The business also manufactures and markets Tyre Curing Presses, Tyre Building Machines and provides solutions for the tyre manufacturing industry globally. Overview: OTHERS ■ CONSTRUCTION EQUIPMENT & Setting up of an 'after-market' business has opened up new opportunities across the world and the Company expects a positive impact of this initiative on its order inflows during FY 2019-20. Globally, in an environment of stable oil prices, the business outlook shall remain positive. Investments in oil and gas projects are expected to continue in the Middle East and some parts of Africa. Similarly, project implementations in downstream and gas development are expected to continue in Europe. Overall, prospects from EPC players are expected to continue at the same levels. On the domestic front and in the oil and gas sector, investments are expected in debottlenecking and capacity expansion projects in the year FY 2019-20. It also shall track investments in pipeline and marketing terminals which are likely to come up. Opportunities are opening up in defence and nuclear space which augur well for the business's established track record in this area. Komatsu PC350LC-8M0 Hydraulic Excavator • Introduced a variety of operational excellence initiatives to enhance execution efficiency and improve the on-time delivery performance. These include: - Shop-floor lean improvements A comprehensive analysis of the market provides pointers to immense opportunities in terms of head room available in the oil and gas sector as also the high potential for growth in geographies like America, Europe, Middle East, Africa and Asia Pacific. A focused effort to pursue prospects in Europe and America will not only help expand its customer base but also help in de-risking its dependence on existing markets. Similarly, opportunities in the distribution space, which is the preferred channel in some of the major markets, will also help in mitigating high exposure to projects. Outlook - Digitised planning and procurement • Search Engine - single door access to customers for product documentation 275 indoor navigations, digital signage, parking, access, emergency buttons and a gate pass. Employees can also avail of features like booking meeting rooms and bus tracking. Human Resources L&T Realty believes that employees are key contributors to the success of the organisation and endeavours to acknowledge the contribution made by employees. The leadership focus is towards the following: . . Attracting and retaining talented, performing employees Raintree Boulevard - A mixed-use development at Hebbal, Bengaluru Employee development through training, engagement, awareness and wellness Rewarding and recognizing consistent superior performance is essential to build a stronger organisation and create a talent pipeline. The business has a fast-track program for high performing employees to provide them with challenging opportunities to grow faster. Risks and Concerns Prevailing market conditions, meeting customer preferences, obtaining various approvals, price fluctuation, increasing cost of housing loans, liquidity crunch, delay in execution of projects / approvals, increase in costs of steel, cement, increase in minimum wages and regulatory changes are the areas where business is susceptible to risks. L&T Realty has appropriate/adequate risk mitigation plans for business processes at all levels. Outlook The Indian Real Estate sector aims to reach USD 180 billion by the year 2020, with both commercial and residential segments gaining momentum. Cities like Bengaluru, Chennai, and Hyderabad have become development hubs. The steady demand for residential real estate from the IT sector and the implementation of various infrastructure initiatives will be amongst the key reasons for higher demand in these areas. Brands like L&T Realty are well accepted by customers for transparency and delivery capabilities, apart from providing well designed projects in premium locations and strong liquidity. It is ideally placed to strengthen its development foot print by joining hands with owners of land parcels. The business is confident about steady growth in the Commercial segment. It will continue to launch new residential projects in Mumbai, Chennai and a few other large cities. Read RFID Tag L&T Realty is the most preferred employer in the sector because of professional management, learning work culture, focus on safety and a long-term career- oriented work environment. During the year, 530 men days were dedicated for competency enhancement and skill development of the employees through various trainings. Artist's impression MANAGEMENT DISCUSSION AND ANALYSIS OTHERS ANNUAL REPORT 2018-19 274 • Lease hold Rights obtained from CIDCO for Seawoods Transit Oriented Development Project. Awards and Recognition L&T Realty has been honoured with several awards over the years. During FY 2018-19, the following awards have been received: • Most trusted Brand in Real Estate - L&T Realty (Hindustan Times Real Estate Awards 2018, Mumbai) • Iconic Real Estate Brand - L&T Realty (Times Realty Icons 2018 Awards, Mumbai) • Most Iconic Commercial Project of the year – Seawoods Grand Central (Real Estate & Infrastructure Round Table & Awards • . DNA) Developer of the Year - Commercial (L&T Seawoods Ltd.) - 10th Realty+ Conclave and Excellence Awards 2018 Integrated Township Project of the year - Raintree Boulevard 10th Realty+ Conclave and Excellence Awards 2018 • Best Mixed-Use Township Award - Raintree Boulevard - Times Business Awards Digitalisation Sales Force CRM will enable capturing customer sentiments at each touch point. The features focused are lead generation and nurturing, retargeting, remarketing, advocacy, social listening, customer journey from lead to booking of apartment to hand-over will be taken care. L&T Employee Campus App will have features for employees and visitors based on their specific needs and access requirements. Key features include a Welcome and Campus Policy, cafeteria related information, 273 Valve Serial No.: 18K700260 • Successfully concluded commercial asset sale transaction in Powai. Sale Order No.: 0110011375 Customer Code: INT8483 276 MANAGEMENT DISCUSSION AND ANALYSIS OTHERS ANNUAL REPORT 2018-19 L&T Valves' products and services enhance safety, reliability and performance worldwide • Kuwait Oil Company's Gathering Centre GC 32 (Kuwait) from Petrofac International Ltd. . Unique bi-directional check valve provided for defence applications • KOCHI PDPP from BPCL • Haradh Hawiyah Gas Compression project (Saudi Arabia) from Tecnicas Reunidas Significant Initiatives . . Expansion into US Markets: Commencement of distribution business in the USA (largest market for valves) by entering into distribution agreements with a few major distribution companies Strong entry in this market resulting in orders worth USD 12 Mn. Successful pilot run for assembly and testing of valves in USA on contract basis - demonstrating local presence and strengthening the brand image there Expanding spread to Europe by establishing distribution network Expansion of product range to increase its share of revenue from the existing customer base The business implemented multiple strategic initiatives in the form of geographic, channel and product expansion during FY 2018-19. • Orders received from US distributor (QRC) The entity recorded a growth over 100%. Some of the order highlights include: Major Orders Received 880000 000000 VlavTrac - a revolutionary traceability solution for L&T valves 200 6 LARSEN & TOUBRO A KARAM ■ L&T VALVES LIMITED Overview: L&T Valves (LTVL) is a leading manufacturer of industrial valves. The business leverages fifty years of manufacturing excellence to serve key sectors of the economy such as oil and gas, power, petrochemicals, chemicals, water as well as defence and aerospace. L&T Valves manufactures a wide range of products such as Gate, Globe, Check, Ball, Butterfly and Plug valves as well as automation solutions. LTVL is a market leader in India. Over the years, it also has made forays into international markets in select geographies. It operates two manufacturing facilities in southern India (Kancheepuram and Coimbatore) which are equipped with state-of-the- art design and manufacturing infrastructure, while maintaining high standards in the area of health, safety and environment. Business Environment A large volume of the business revenues accrues from the oil and gas sector and through supplies to projects. Oil prices are a key driver. With oil prices recovering during FY 2018-19, the consumption was driven by project activity in the domestic and international arenas. Investments in the downstream market gathered traction as refinery projects got underway in Middle East. Overall, an increased procurement activity was witnessed in oil and gas sector. Besides oil and gas, power is another sector of interest. Owing to the structural and regulatory stress in this sector, the market growth remained muted during FY 2018-19 with no significant capacity additions in the thermal sector. Demand in process industries took a positive turn on the backdrop of favorable IIP and PMI indices. FY 2019 also witnessed an increasing trend of localization and protectionist policies across the globe. The business has taken note of such trends in specific markets like the Middle East and the US and has planned accordingly. Industrial valves is a highly fragmented market which operates in a highly competitive environment. While the business faced intense competition during FY 2018-19, it has successfully mitigated these challenges and recorded a robust growth during the year. Material Description: Gate BB 6 300 WCB FL • Emerald Isle Residential Development (Ph. I) at Powai comprising of 8 towers (789 flats) having Saleable Area of ~13.87 L. sq. ft. completed in the current financial year. Major Achievments The commercial segment consisting of sectors like IT/ ITeS, retail, consulting and e-commerce have registered high demand for office space in recent times. The commercial segment is doing well with stable rental appreciations and lower vacancies. Office space demand in the country increased to 36 million sq. ft. (m sq. ft.) during FY 2018-19, duly supported by strong growth of absorption. Office property demand is expected to remain high with annuity seeking investors, both domestic and international, increasingly expanding real estate exposures to hold office and retail assets in India. The successful REIT by Embassy Developers has opened a new chapter in the Commercial real estate segment. MANAGEMENT DISCUSSION AND ANALYSIS DEVELOPMENT PROJECTS BUSINESS ANNUAL REPORT 2018-19 NH-14 Palanpur-Swaroopganj Highway Risks and Concerns As regards the financial risks, the financial health of the state Discoms remains an area of concern, considering that they are the sole customer. Also, the entity is exposed to cashflow stress pending dispute resolution with PSPCL on certain aspects, though it is fairly positive on the outcome, the risk of unfavourable resolution exists. Being a coal based thermal plant, availability of coal fuel, quality of coal received, storage loss, supply chain logistics for fuel including lead time between requisition and arrival of coal wagons, transit loss in terms of quality, as well as quantity of coal continues to be a major operational risk for the business. Demand Supply situation of coal as well as power and the overall market scenario brings about certain business volatility and strategic risks. Additionally, environmental compliances, as well as Government Policies on various aspects of thermal power pose multiple concerns for the business. 270 The risk management policy of the company provides for a robust risk management framework which involves Outlook Punjab is expected to witness a flat growth in demand for electricity during FY 20. NPL is likely to remain the lowest cost power producer amongst the IPPs in the state with expected plant load factor of 78% in FY20. On the fuel side coal supply continues to be challenging in the FY 20. The business has embarked on a five-year strategic plan under the 'Lakshya 2021' program of the group. Major focus areas for NPL during FY20 would be maximising plant availability, resolution of long pending litigations, improving operational efficiency, reducing under recoveries in coal, enhancing fuel quality, resolving the regulatory issues, cost management, digitalisation initiatives and EHS compliance. OTHERS Artist's impression Crescent Bay, Parel risk identification, assessment and evaluation, strategy and mitigation and monitoring and review mechanism. The company has implemented multiple measures in each of the risk areas to ensure a pro-active approach and timely mitigation including but not limited to timely major maintenance and repairs, coal import sanctions on domestic shortages, etc. 269 The business has built a committed team of professionals experienced in the field of operations and maintenance of power plants. Special emphasis is given to training and development of the workforce through various training programs. In addition to the competency building programs, the business also focusses on soft skills and leadership development. Human Resources LARSEN & TOUBRO The 221.4 km Beawar - Pali - Pindwara road in Rajasthan is the longest four lane road project developed under the (PPP) model in the National Highways sector. • Ensured complete coverage by CIMFR at SECL through intense efforts •⚫ CSR initiatives in the area of development of village infrastructure, education, skill building, gender equality, health and environment were implemented during the year • During the year, the business was awarded and decorated with the following: i) Excellent Energy Efficiency Unit Award by CII, Hyderabad ii) High Efficiency Leadership and Innovation award by PEABODY ENERGY, USA iii) Energy Conservation Award by Punjab Energy Development Agency, Govt. of Punjab Digitalisation Steps taken towards digitalisation are: • Upgradation of the Maximo mobility application - an ERP system which plays a crucial role in asset management, approval of PO/ PR, maintaining logs of plant operations and other HSE functions like Hazard reporting Development of Mobility apps for approval of Purchase Requisition, Purchase Orders approvals and maintain e-logbooks which maintains logs of work done by shift engineers to facilitate no-overlap. • Real time capturing of vital power plant parameters like plant availability, financial data like profitability and billing and making it available on a management dashboard along with relevant historical data. Environment, Health and Safety The entity is committed to generate reliable and environment-friendly power under safe working conditions. A policy on Quality, Environment, Health and Safety has been put in place. Emphasis is laid on continual improvement of our processes and practices to achieve improved environmental, health and safety performance. Training on EHS for employees and stake holders is undertaken on a regular basis to foster a culture of health and safety. LARSEN & TOUBRO Others' business comprises: a. Realty Business b. L&T Valves Limited L&T Business Park at Powai is ~15 acres, a campus hosting ~1.5 M sq. ft. of high-quality office space. Further developments are being undertaken in the campus. 3. Technology Park, Bengaluru L&T Realty's project in Bengaluru has a potential development of Grade A commercial office spaces of ~3.3 M sq. ft. which will be taken up in phases. The first phase development of ~1.1 M sq. ft. is already in progress. L&T Realty has gained capabilities and competencies to capitalise on opportunities by leveraging its key strengths which are: • Brand Commitment: Enjoys unparalleled trust amongst customers for capabilities to complete and deliver projects enabling premium realisations in the micro markets. • Execution: Possesses capabilities and partnerships for successful completion of projects and deliver promised quality and ensure safety practices. . Transparency: Follows a strong culture of corporate governance and ensures transparency and high levels of business ethics. Highly qualified execution team: Employs experienced, capable and highly qualified design and project management teams who oversee and execute all aspects of project development. Business Environment Growth of the real estate sector is integral to the growth of the economy. The housing sector alone contributes 5-6 % to the country's Gross Domestic Product (GDP), with a 11% CAGR over the last decade. The real estate sector comprises four sub sectors - housing, retail, hospitality and commercial. The growth of this sector is well influenced by growth of urbanisation, corporate environment and the demand for office space as well as accommodation. The Government of India and the State Governments are taking multiple initiatives to encourage development in the sector. Policies like Pradhan Mantri Awas Yojna (PMAY), credit-linked subsidy scheme, extension of income tax benefits, the implementation of the Real Estate Regulation Act (RERA), changes in the GST Laws to remove the anomalies of tax rates on under-construction properties, etc., are helping the sector towards growth and an organised playing field. RERA is leading to transformative changes in the sector to improve consumer confidence. The residential segment constitutes 80% of the real estate industry. The residential real estate trends across markets are towards smaller ticket size, compact units to address larger market sizes. Relatively slower sales in the year have resulted in inventory build-up, causing stagnancy or pressure on price realisation. Artist's impression India's Largest Transit Oriented Development - Seawoods Residences. Navi Mumbai LARSEN & TOUBRO ~ 2. L&T Business Park • Initiated brand labelling products from other manufacturers based in USA, Europe and India E Artist's impression c. Construction Equipment and others ■ REALTY BUSINESS Overview: The Realty business is engaged in development of Residential and Commercial projects for sale or lease. The business has its own land bank, as well as operates through partnerships with co-developers, in form of Limited Liability Partnerships (LLPs) with a vertical sharing ratio. Residential Segment 1. Emerald Isle (Powai, Mumbai) Emerald Isle is a flagship residential development of L&T Realty. It is a development on ~20 acres of land in Powai, Mumbai. The development comprises of 2 phases. Phase I comprises 8 towers which are completed. Phase II comprises of 8 towers out of which 4 towers have been launched for sale. 2. Crescent Bay (Parel, Mumbai) L&T Realty is developing a premium residential housing project at Parel, Mumbai on a revenue share basis with Omkar Realtors. The development comprises of 6 high-rise towers forming a crescent shape, named Crescent Bay. The development of 5 towers out of 6 have been completed. 3. Raintree Boulevard (Bengaluru) Raintree Boulevard is a premium integrated development consisting of commercial, residential and retail on ~67 Acres of land in Hebbal, Bengaluru. The residential development is ~39 L. sq. ft. of saleable area spread over 29 acres of Land. Phase I development is in advanced stage of completion. Commercial Segment 1. Seawoods Grand Central Project Seawoods Grand Central in Navi Mumbai is a landmark development and is India's first Transit- Oriented Development (TOD). Spread across 40 acres, Seawoods Grand Central is a unique combination of Commercial, Retail and Hospitality. It has completed development of ~2.6 M sq. ft. of grade A commercial and retail space. 271 272 MANAGEMENT DISCUSSION AND ANALYSIS OTHERS ANNUAL REPORT 2018-19 L&T Business Towers - Powai West • Introduced a new line of business, 'After Market' to cater to service and spares needs of customers across the globe Devihalli Hassan Toll Road • Initiated a number of operational excellence initiatives during the year to improve cost competitiveness, on-time delivery performance, quality and lead time reduction Increased competition, low entry barriers, aggressive pricing strategies, increasing trend in protectionist policies, supply chain capacity constraints and execution delays affecting delivery performance are seen as some of the main risks faced. During FY 2018-19, the business undertook various risk mitigation initiatives including: . Geographic, product and channel expansion • . Improving cost competitiveness through cost reduction The entity has a robust risk management framework in place and has implemented a risk management policy to identify, monitor and mitigate major risks faced by the business. Taking note of the large quantum of 'projects' business, it has implemented a pre-bid risk review process during FY 2018-19. measures • Addressed supply chain constraints in terms of cost, capacity and lead times by altering processes 277 278 MANAGEMENT DISCUSSION AND ANALYSIS OTHERS ANNUAL REPORT 2018-19 Komatsu HD785 Dump Truck N10227 • Embarked upon a major cost reduction journey through design optimization and other initiatives in the areas of sourcing and logistics, helping to remain competitive and benchmark costs with competitors Special efforts to expand its sourcing base, both locally and overseas Risks and Concerns KOMATSU The business has built a committed and experienced team of professionals across its manufacturing plants and corporate and marketing offices. Special emphasis is given to training and development of the workforce through various training programs. In addition to the competency building programs, focus is also on soft skills and leadership development. Various engagement initiatives are undertaken to motivate employees and maintain a harmonious work place. Digitalisation A few of the major digital initiatives taken include: • Smart Glass - Real time tour for customers from off-sites and inspections from customer locations . Digitalisation of stores and material handling through Bar coding, RFID, etc. The first HIPPS (High Integrity Pressure Protection System) designed and manufactured in India. LARSEN & TOUBRO • Design automation and Test Stand automation Integration of Product Life Cycle Management tool with ERP (SAP) Environment, Health and Safety Environment, Health and Safety consciousness is a core value and the business is committed to achieving EHS excellence at all workplaces. Various initiatives in the area of health, safety and environment helped the Company achieve a 'zero man days lost' record during the year as also receive recognition and awards in these areas. • Awarded the state level Health & Safety award by National Safety Council, Tamil Nadu chapter • 10KW solar lighting systems installed in KPM for office lighting • Water Consumption is down to 46.5 litres/employee/day compared to 63.43 litres in FY 17-18 • Single use, throw-away plastic items restricted at both the plants Human Resources CBT 2018-19 60000 8000 - 29% 18142 3.4% 26% 2017-18 3983 2000 0 35% 1384 76% 4740 4000 19109 54095 74% 4.5% 63417 Power segment revenue declined y-o-y by 35.8% to *3983 crore, on the back of declining order book and delay in receipt of new awards. With pick up in execution momentum for order received from Bangladesh in previous year, composition of revenue from international projects increased to 35% of total revenue for the segment, from 24% in previous year. 73204 2067 71% 45275 2444 84% 14% 347 0 crore 2017-18 2018-19 International Segment operating profit though reduced to 177 crore from 208 crore from previous year, the margins improved from 3.4% in FY 2017-18 to 4.5% in FY 2018- 19 on higher proportion of international orders. Gross Revenue and OPM % (35.8%) * crore 100000- 80000 Domestic 20000 285 6000 crore 70000 60000 54904 50000 15.3% 40000 14.1% 30000 20000 10000 0 2017-18 Net worth ―RONW% 8.5% 40000 62375 24% 1468 Return on Equity 286 Depreciation and Amortization charge Depreciation and amortization charge for the year 2018-19 increased by 8.1% to 2084 crore, compared to 1929 crore in previous year. The increase was largely due to impairment of assets in hydel projects. Other Income Other income at 1852 crore, increased by 38% over 1342 crore, consists of profit on sale of liquid investments, interest and dividend income from treasury investments. The growth was on account of higher interest income, lower charge towards mark-to-market (MTM) of derivatives and higher cross-sell income in Financial Services. Finance cost The interest expenses for the year 2018-19 at 1806 crore was higher by 17.4% in comparison to 1539 crore for the previous year. The increase was attributable to the higher interest cost in L&T Hyderabad Metro Rail upon partial commencement of operations. Further, higher proportion of interest bearing advances in Infrastructure businesses resulted in increase in average borrowing cost for the year to 7.9%, as compared to 7.3% in the previous year. Exceptional Items Exceptional items of 295 crore during the year represents recognition of certain customer dues (covered in insolvency proceedings), now considered as recoverable based on favourable NCLAT order received during this year. Tax Expense Income Tax charge for FY 2018-19 increased to 4343 crore compared to 3199 crore in FY 2017-18 on increased profits and higher effective tax rate. Consolidated Profit after Tax and EPS Consolidated Profit after Tax (PAT) at 8905 crore for the year 2018-19 rose by 20.8% over the previous year at 7370 crore. Consolidated Basic Earnings per Share (EPS) for the year 2018-19 at 63.51 registered a substantial growth over previous year at 52.62. Return on Consolidated Net Worth The Net Worth, as on March 31, 2019, at 62375 crore, reflects net increase of 7471 crore, as compared to the position as on March 31, 2018. Return on Net worth (RONW) for the year 2018-19 was higher at 15.3%, compared to 14.1% in the previous year, driven by increase in net earnings. 86% MANAGEMENT DISCUSSION AND ANALYSIS FINANCIAL REVIEW ANNUAL REPORT 2018-19 1500 0 2919 3278 ESOP Proceeds (net) 11 50 Decrease/(Increase) in cash balance 275 (3254) 987 Sources of Funds 4224 crore 2.8% Capital expenditure (net) 3475 2015 Purchase/(Sale) of other investments 17616 Treasury and dividend income 1413 2885 6208 Cash flow from operations (excluding change in loans and advances towards financing activities) increased to *9139 crore as compared to 6428 crore in the previous year due to better operational efficiencies and thrust on customer collections. Borrowings increased by 4319 crore to sustain higher level of operations. During the year, additional funds were generated from divestment of stake in subsidiary companies and treasury income. Funds were used for strategic investments and investments in S&A companies. Further, the group incurred capital expenditure of 3475 crore, payment of dividend 2647 crore and net interest expense of *2982 crore during the year. There was a net decrease of 275 crore in the cash balances as at March 31, 2019 as compared to the beginning of the year. Consolidated Fund Flow Statement Particulars Operating activities Borrowings/(Repayment) of Borrowings Receipt from/(Payment to) minority interest (net) crore FY 17-18 6428 (3691) B. SEGMENT WISE PERFORMANCE (GROUP) Infrastructure Segment 1. Infrastructure segment now includes Metallurgical and Material Handling (MMH) business, which was reported under "Other" segment last year. Accordingly, previous year figures have been regrouped wherever necessary. Infrastructure segment won orders worth 95743 crore, higher by 2.8% over the previous year, mainly from domestic state government and private customers. Large value orders were bagged by Building & Factories, Heavy Civil Infrastructure, Transportation Infrastructure and Water Effluent Treatment businesses. Strong investment by private sector in the airport segment and health segment boosted the order inflow momentum of Building and Factories. The demand from Housing segment however grew meagerly on account of unsold inventory. Water Effluent & Treatment business registered a significant growth with order wins from Madhya Pradesh for Water Supply & distribution and irrigation projects. Smart World & Communication registered growth benefitting from social sectors like E-shiksha and growth in communication network. The order inflow momentum was maintained in Power Transmission and Distribution business on orders received from Power Utilities and Middle East. The Order Inflow growth was impacted in the Heavy Civil Infrastructure, Transportation Infrastructure and Metallurgical and Material Handling business by deferral of some large value orders. The share of international order inflow remained at 16%, same as previous year, with reduced contribution from Middle East compensated by higher proportion of orders from South East Asian and African countries. International order wins were predominantly in Power Transmission & Distribution, with Buildings & Factories and Transportation Infrastructure each receiving one large value order from international market. Order Inflow FY 18-19 9139 4319 8252 (2175) 125000- Net investment/(divestment) 25000 2017-18 2018-19 Domestic International LARSEN & TOUBRO Infrastructure segment clocked gross revenue of 73204 crore for the year 2018-19 registering 15.4% growth over the previous year. With strong executable opening order book, supported by necessary operational actions and statutory clearances, the execution progress picked up, resulting in revenue growth. All businesses of the segment registered a strong growth, except Smart World & Communications due to delay in receipt of clearances and new awards and in Metallurgical & Material Handling business on two large value projects in the portfolio encountering challenges for execution clearances. Revenue from international operations constituted 26% of the total revenues of the segment during the year as compared to 29% in the previous year, with reduced mix of international orders in opening order book. Infrastructure Segment earned operating profit of 6154 crore. There was a decline in margins from 9.8% to 8.5% due to cost and time overruns in certain projects in roads and elevated corridors in Transportation Infrastructure, lower capacity utilization in Smart World & Communications and Metallurgical & Material Handling business. Gross Revenue and OPM % 15.4% a result of the mandate from Ministry of Environment, Forest and Climate Change. However, in the main stream of EPC jobs in coal based projects, the tender pipeline during FY 2018-19 was quite thin. crore 4500 3000 Order Inflow 2414 20.9% 80897 84% 475 16% 84% 78699 50000 260 (477) 100000 Dividend paid 2647 2390 16% 93167 14468 95743 14846 16% Interest paid 2982 2471 75000 Utilisation of Funds 17616 4224 The total borrowings as at March 31, 2019 stood at *125555 crore as compared to 107524 crore as at March 2019. The gross debt equity ratio increased to 1.81:1 as at March 31, 2019 from 1.79:1 as at March 31, 2018. The net debt equity ratio stood at 1.52:1, same as at March 31, 2018. 9.8% 2018-19 1190 Construction and Mining Machinery Business CMB introduced a number of business expansion activities during FY 2018-19. It introduced new equipment models for the construction and mining equipment such as an 80T excavator with a large bucket, rock body Scania tippers, etc., which helped in delivering additional sales. With the availability of spares being brought closer to customer sites, the availability guarantee of the machines has increased from 84% to 92% and thereby increasing sales of spares for the business. With the continued focus on capturing the hiring segment, CMB promoted lease financing programmes with low investment and low EMI. In order to retain customers and overcome the competition, CMB has been educating customers to evaluate the equipment on the basis of lower life-cycle costs, quick serviceability, etc. CMB's 6th Service centre was opened in May 2018 in Singrauli covering over 800 machines in the region. Rubber Processing Machinery Business An array of newer models was developed and newer variants were introduced into the market viz. a new low PCR Floor Mounted Hydraulic Press PCR Hydraulic press LARSEN & TOUBRO deck height series of passenger car tyre hydraulic press and a new variant of tyre building machine (TBM) called Zeus being exported to a tyre manufacturer in US and targeting new customers in the US and European markets. Significant Initiatives LTRPM also strengthened its portfolio on Tyre Handling Automation Solutions and increased its focus on product support and services. Apart from these, LTRPM also focused on a number of process-related initiatives such as design process modernisation, long-term vendor contracts with 360-degree support, product reliability enhancements, digitalisation, etc. Digitalisation On the digital front, the LTRPM business has established a system for updating the material status on a continuous basis, both for in-house and purchased parts. QR code based traceability for the components has been introduced. Digitalisation in CMB was implemented in stages throughout the year, which offered superior ICT tools, customer savings through machine performance monitoring and enhanced financier comfort. Environment, Health and Safety Safety Officers have been appointed at all the units and report to management personnel responsible for ensuring the safety practices are strictly adhered to. Safety audits are conducted regularly to ensure that the safety practices are in place and being followed. The manufacturing unit of LTCEL has been certified for its Integrated Management System (Environmental management systems as per ISO 14001:2004 and OHSAS 18001:2007 for Occupational Health and Safety Management systems). Human Resources The Company has progressively built a team of committed professionals across its manufacturing plants and corporate offices. Emphasis on training and development of the workforce has been the focus area. Additionally, competency building programs for leadership development and various engagement initiatives have been undertaken to sustain the employees' motivation and maintain a harmonious work place. Consequently, the Industrial Relations scenario has remained cordial in the manufacturing units of the group. There were no cases of violations during the year under the whistle blower policy and policy on 'Protection of Women's Rights at Workplace'. Risks and Concerns Foreign currency fluctuation poses one of the major risks, as the LTRPM business has significant portion of imports As part of the plan of expanding global reach, LTRPM also set up its office in the United States and has identified a similar plan for Europe. During the year 2018-19, a new technology called Hyper Cooled Rotor KCS 3.0, with a higher cooling capacity was introduced by LTKMPL, which is suitable for mixing rubber at lower temperatures. _ • PC Patel Infra – Komatsu mining equipment spares 2500- 16.2% 1330 53% 3037 2018-19 ―OPM % 94% 8.2% 3517 91% 0 2017-18 Domestic 2018-19 International OPM % Funds employed by the segment as on March 31, 2019 at 2503 crore, registered an increase of 3% over the 2599 65% Liquidity & Gearing • National Mineral Development Corp. - Komatsu mining equipment and 281 282 MANAGEMENT DISCUSSION AND ANALYSIS OTHERS ANNUAL REPORT 2018-19 OTR Mechanical press In this backdrop, the Group recorded stellar performance of its businesses in diverse sectors. The Company continued to focus on its goal of maximizing shareholder value by divesting assets identified for sale, achieving operational excellence through digital initiatives in furtherance to improve cost competitiveness, containing working capital along with better funds management and investing in value accretive acquisitions. During the year the Company concluded the stake sale in a container port in Tamil Nadu on receipt of regulatory approvals. The Company also monetized 5 road projects by transferring them to a listed Infrastructure Investment Trust (IndInfravit Trust). The Company has received an approval from Competition Commission of India (CCI) for divestment of its Electrical & Automation business, subject to compliance to certain conditions the details of which are awaited. L&T Metro Rail (Hyderabad) Limited, a subsidiary company, commissioned additional 26 km stretch of metro rail network in the city of Hyderabad during the year. The year also saw growth momentum in its listed subsidiaries namely L&T Infotech Limited, L&T Technology Services and L&T Financial Services with all three of them recording notable growth. As at March 31, 2019, L&T Group comprises 110 subsidiaries, 8 associates, 27 joint venture companies and 31 joint operations. Most of the group companies are strategic extensions of the project and product businesses of L&T, while hydrocarbon business is housed in a separate set of group companies to provide the desired focus and independent functioning. Majority of the subsidiaries support L&T's core businesses and enable access to new geographies, products and business segments. Certain distinct service businesses such as Information Technology, Technology Services and Financial Services are housed in separate listed subsidiaries. The development projects business reside in separate subsidiaries and joint venture Companies. Order Inflow and Order Book L&T Group achieved order inflow of 176834 crore during the year 2018-19, registering a growth of 15.6% over the previous year. Focus on infrastructure at both the Centre and States, coupled with pick up in select private sector investments, have resulted in order inflow growth. The year witnessed increased investment by State authorities, especially in water supply & distribution and irrigation sectors. Big ticket orders were received from public sector entities mainly in Infrastructure and Hydrocarbon. During the year, Hydrocarbon business achieved a breakthrough in Algeria on receipt of large value order which boosted International order inflow. This resulted in lowering the composition of business from Middle East. Order Inflow growth was mainly driven by Infrastructure segment, contributing 54% of the total order inflow for the year and Hydrocarbon contributing 16%. Growth was achieved with increased large value orders received from airport, metro, water supply & distribution, lift irrigation, health and refinery segment. 283 284 MANAGEMENT DISCUSSION AND ANALYSIS | FINANCIAL REVIEW ANNUAL REPORT 2018-19 crore 220000 Order Inflow 15.6% 165000 152908 176834 46805 26% 23% 35853 On the global front, the year gone by has seen significant volatility. Increase in protectionist barriers, sensitive geo- political developments, moderation of growth in China, oil price & commodity price fluctuations, are impacting the way of doing business. The business environment remained competitive, with surplus capacity causing pricing pressures. 6% 183 Public sector spends reflects strong investment momentum in areas of compliance requirements in refinery, reduction in import dependence in fertiliser, water supply & distribution, Metro Rail Networks, Road adjacencies (special bridges, expressways and city flyovers) and Transmission & Distribution. The strong underlying macro drivers of investments in these sectors are expected to continue well into FY 2019-20 and beyond, though the General Elections in first quarter of FY 2019-20 may have some impact on decision making process. A. PERFORMANCE REVIEW TBR Hydraulic Press and also exports goods. However, the business has mitigation plans in place to counter the impacts of currency volatility. Increased market competition and macro- economic volatility is a continuing concern for the business. Outlook Construction and Mining Machinery Business CMB plans to strengthen position in the premium segment and also increase its focus on large contractors, large irrigation projects and coal OB (overburden) removal contractors. Government initiatives in infrastructure development, affordable housing etc. are expected to drive demand in the cement sector, which in-turn will boost demand for dump trucks, dozers and other mining equipment. The dozer segment is expected to grow by ~25%. Demand for Komatsu excavators is expected to increase by ~11% for FY 2019-20. The motor graders segment is expected to increase by ~14%. CMB also expects the spares and auxiliaries business to grow by ~13% and plans to introduce newer attachments to boost sales. With ~60% of demand for mining equipment coming from Coal PSUs, CMB is planning to target selective tenders along with Komatsu. In the parts and services segment, CMB plans to introduce newer and more innovative, user-friendly spares. It also plans to develop dealers for construction equipment component repairs. Rubber Processing Machinery Business The global tyre market totalled USD 73.9 Bn in 2017 and is expected to grow up to USD 98.56 Bn in 2024 at a CAGR of 4.2% as per the market research, with light-vehicle tyres accounting for around 60% of sales and truck tyres 30%. Few brownfield projects have been announced in the Truck Bus Radial and Off The Road segments. In the international market, tyre industries have announced few projects for investment. LTRPM's discussions with some of the leading players in Europe and US should give the unit good opportunities for better order inflow in FY 2019-20. In the domestic market, with the Indian auto slow down and the general elections held in Q1 of FY 2019-20, the order inflow for FY 2019-20 may face some difficulties. LARSEN & TOUBRO Financial Review 2018-19 I. L&T CONSOLIDATED Indian economy is poised to gain out of structural reforms like GST, IBC etc. and initiatives such as Demonetisation. The year witnessed pick up in project awards and improved execution environment. Backed by incremental tax revenues and widening tax base, it is likely to give Central Government good financial wherewithal to fund infrastructure capex as well as uplift weaker sections of society through social spending. State governments have also steadily increased investment in public sector infrastructure projects such as state roads, transmission and distribution networks, metro rail networks and irrigation facilities. With Insolvency & Bankruptcy Code maturing, bank finances were channelled to growth prone areas, resulting in pick up in private sector investments, especially in health sector and in other services sector. This added with Governments thrust on infrastructure growth saw pick up in airports expansion although decision making in areas such as defence manufacturing towards Make in India programme is yet to gather the required momentum. 24.5% 9% 332 4049 previous year on additional capex and increase in working capital to support increased business volume. 4. Defence Engineering Segment Defence Engineering comprising Defence and Aerospace business (part of Heavy Engineering Segment till end FY 2017-18) & Shipbuilding business (part of "Others" segment till end FY 2017-18) is being reported as a separate segment since April 2018. Marine switchgear business which was earlier part of Electrical & Automation Segment is a part of the segment from October 2018 onwards. Defence engineering segment recorded order inflow of 3016 crore for the year ending March 31, 2019, lower by 18.6% as compared to the previous year due to deferral of a major order in Shipbuilding business. International orders constitutes 17% of the total order inflows compared to 12% in the previous year. Order Inflow crore 4000 (18.6%) 4500 2273 2728 67% 3706 2000 25% 563 12% 78.1% 454 Order Inflow crore Domestic International ―OPM % 0 2017-18 Domestic 2018-19 The Funds employed by the segment at 23940 crore as at March 31, 2019 increased by 7.6% vis-à-vis March 31, 2018, reflecting larger scale of operations. Increase in Gross Working Capital due to buildup of project work-in-progress and increase in receivables was partially compensated by better vendor credit management and increase in customer advances on new order wins. 2. Power Segment Power segment bagged orders worth 2919 crore as compared to 2414 crore in the previous year. The current year order inflow was mainly on back of domestic orders won for Flue Gas Desulphurisation projects as International → OPM % The Funds employed by the segment stood at ₹ 1192 crore as at March 31, 2019 higher than 844 crore as on March 31, 2018 due to delay in collection of retention amount in jobs nearing completion and higher carrying value of Investment in Joint Ventures under Power Group, consolidated through equity method under Ind AS. 3. Heavy Engineering Segment Defence and Aerospace business which was part of Heavy Engineering segment last year is reported as a separate segment from the current financial year. Accordingly, previous year figures have been regrouped wherever necessary. 287 288 MANAGEMENT DISCUSSION AND ANALYSIS | FINANCIAL REVIEW ANNUAL REPORT 2018-19 Heavy Engineering segment comprises of engineered- to-order critical equipment, piping and systems for core sector industries like fertiliser, petrochemical, refinery, oil & gas, gasification, thermal and nuclear power. Heavy Engineering segment recorded order inflow of 4049 crore for the year ending March 31, 2019, higher by 78.1% as compared to the previous year. Growth during the year was mainly driven by increased demand for clean fuel projects complying with EUR6/BS-VI norms and change in MARPOL regulation norms by 2020. With significant orders received from EPC customers from Europe & USA in oil & gas segment, share of orders from international increased from 25% in previous year to 67% in current year. 6000- 110000 3000 17% Segment gross revenue of 3849 crore improved by 19.5% compared to the previous year. Growth was mainly contributed by better execution of certain defence order partially offset by de-growth in Shipbuilding business. Revenue from international operations constituted 9% of the total revenue for the segment. The operating margin improved from 8.2% in previous year to 16.2% in current year upon accelerated progress on a defence order and cost savings in a project in the shipbuilding business. Gross Revenue and OPM % 2000 1635 45% 738 1000 21.1% 55% 897 0 2017-18 Domestic International crore 5000- 1184 47% 19.5% 3849 3220 International 3016 506 2018-19 2017-18 75% 1710 1321 33% 0 2017-18 2018-19 1500 88% 3252 2510 83% Domestic International Segment gross revenue of 2514 crore registered a growth of 53.7% compared to the previous year on the back of improved order book coupled with good execution progress in refinery, oil and gas equipment business. Revenue from international operations constituted 47% of the total revenue for the segment. The segment recorded a significant increase in the operating profit for the year at 532 crore, registering margin growth from 21.1% to 24.5% on accrual of other income and write back of provisions that were no longer required. crore 3000- Gross Revenue and OPM % 53.7% 2514 Domestic Consolidated Revenue from Operations L&T Group recorded revenue of 141007 crore during the year, registering a growth of 17.6%. Revenue earned from international operations comprised 32% as compared to 33% in the previous year. Gross Revenue from Operations LARSEN & TOUBRO Operating Cost and PBDIT Manufacturing, Construction and Operating (MCO) expenses at 99281 increased by 19.2% over FY 2017- 18. These expenses mainly comprise cost of construction material, raw materials and components, subcontracting expenses and interest costs in Financial Services business. This represent 70.4% of revenue, an increase by 90 bps, mainly due to cost overruns encountered in some roads, elevated corridor projects in the Transportation Infrastructure vertical. Operating expenses & Profitability 11.6% (11.4%) 5.2% (6.4%) 12.8% (12.7%) 2018-19 [% to revenue] 70.4% (69.5%) ☐ Mfg. Contruction & Operating Expenses ☐ Staff Expenses Sales, Administration & Other expenses Operating Profit (PBDIT) [Figures in brackets relate to previous year] 2006 crore for FY 19 and [Figures in brackets relate to previous year] * includes inter segment revenue [Figures in brackets relate to previous year] Total Order Book: 293427 crore as at 31st March 2019 6093 4%, (5%) 2514 2%, (1%) L&T 1890 3983 3%, (5%) 73204 51%, (52%) ☐ Infrastructure Power Staff expenses for the year 2018-19 at 18101 crore increased by 18.5% over the previous year. Staff Cost as a percentage of revenue marginally increased to 12.8% from 12.7%, representing normal increments and increase in manpower in the services business. The Group is sustaining its focus on improved productivity, digitalisation and manpower rationalisation. ■ Defence ☐ Heavy Engineering Electrical & Automation Hydrocarbon ☐ ☐ IT & Technology Services Financial Services Developmental Projects ☐ Others 2046 crore for FY 18 Engineering 11%, (10%) Sales and administration expenses decreased by 4.3% y-o-y to 7301 crore, mainly on lower provisions towards customer receivables and credit losses. - During the year, highway construction increased from 27 Km/day to 29 Km/day, rail-track construction increased from 5.1 Km/day to 5.8 Km/day and cargo handling capacity at major ports increased from 1451 MMT to 1540 MMT. Construction and Mining Machinery Business Construction and mining sectors are the key demand drivers of CMM business. Business Environment The Product Development Centre (PDC) based at Coimbatore, renders engineering and product development support for all the businesses. LTRPM, located in Kancheepuram near Chennai, manufactures and markets rubber processing machinery i.e. mechanical and hydraulic tyre curing presses, tyre building machines, conveyor systems and tyre automation systems for the tyre industry both domestically and globally. LTKMPL is in the business of designing, engineering, manufacturing, installation and servicing of rubber processing machinery (mixers and twin-screw roller head extruders) and spares. hydraulic power packs, cylinders, pumps and other components. LTCEL, located in Doddaballapur near Bangalore, manufactures vibratory compactors, wheel loaders, hydraulic excavators, asphalt paver finishers, pneumatic tyred rollers, skid steer loaders, The CMB division focuses on distribution and after sales service for hydraulic excavators and dump trucks manufactured by Komatsu India Private Limited (KIPL) and other mining and construction equipment manufactured by Komatsu worldwide. It also handles the distribution of a range of construction equipment including hydraulic excavators, wheel loaders and compactors manufactured by LTCEL and Mining Tipper Trucks manufactured by Scania India. (CMM) and Rubber Processing Machinery (RPM). CMM further comprises the Construction & Mining Machinery business unit (CMB) and L&T Construction Equipment Limited (LTCEL), a wholly-owned subsidiary of L&T. The RPM business comprises L&T Rubber Processing Machinery business unit (LTRPM) and L&T Kobelco Machinery Private Limited (LTKMPL), a Joint Venture with Kobe Steel, Ltd., Japan (with L&T holding a 51% stake and 49% by Kobe). In April 2019, L&T fully exited its investment in LTKMPL with Kobe buying over the 51% stake held by L&T in LTKMPL, while LTRPM continues to represent LTKMPL for marketing its products. LARSEN & TOUBRO L&T 2490HD Pneumatic Tyred Roller 2490 2490 L&T 1190D Soil Compactor CL&T ~ In the mining sector, coal production registered a growth of 5.7% over the previous year. In the cement sector, the installed capacity increased from 455 MT to 478 MT with an increase in overall production from 296 MT to 328 MT in FY 19. The auction of around 24 limestone mines was completed during FY 2018-19. 279 280 • VPR Mining Infra – Scania mining trucks Singareni Collieries Company Limited – Komatsu mining equipment and spares • The following major orders were received during the year: Major Orders Received in CMB In the OTR (Off The Road) market in India, the demand for tyres has been good and many of the customers have gone ahead with expansion plans, providing good business opportunities. The segment saw a growth of 20 % over the previous year. India produces about 3.5 million passenger cars per year, although the last quarter of FY 2018-19 did see a bit of de-growth. In the commercial vehicles (CV) segment, the current year has witnessed growth as high as 25%, because of the low base effect. The Group operating profit at 16325 crore for the year 2018-19 registered a healthy growth of 19.7% y-o-y. The EBITDA margins for the year also improved by 20 basis points to 11.6%. Favourable job mix, coupled with execution efficiencies in Defence, Heavy Engineering and Hydrocarbon, cost optimization measures in product businesses, monetization of a Realty asset and container port at Kattupalli and strong growth in IT & TS businesses, contributed in offsetting the impact of cost overruns encountered in some projects in the Infrastructure segment. The performance of the automobile and tyre industries are the major influencing factors for the business. The global auto industry registered a moderate growth and did well in markets like India, Russia and Brazil in the current year. However, China saw a steep fall in passenger car sales and the US market remained flat. However, with NBFC crisis impacting liquidity in the economy, stiff competition from domestic equipment manufacturers and a number of Chinese mining equipment manufacturers - especially in dump truck, tipper and wheel loader segments - impacted growth. SCANIA Scania P440 Tipper Truck O L&T 90205 L&T 9020sx Wheel Loader MANAGEMENT DISCUSSION AND ANALYSIS OTHERS ANNUAL REPORT 2018-19 Rubber Processing Machinery Business 15176 3849 3%, (3%) ☐ Others 80163 68% 0 A robust order book of 293427 crore as at March 31, 2019 gives multi-year revenue and margin visibility to the Company. With current year order inflow being largely domestic centric, the composition of international order book declined to 22% as at March 31, 2019, as compared to 24% in the previous year. Infrastructure segment continues to contribute 76% of the consolidated order book. With increased opportunities in Hydrocarbon sector, the share in order book has increased from 10% to 14%. As the year saw major order awards from State Government's, the share of order book from State Governments has increased, with reduced share of orders from Central Government. crore 375000 300000 Order Book 11.5% 67% 263107 293427 63266 22% 150000 230161 76% 200601 78% 75000 crore 2017-18 225000- 24% 62506 35000 95898 70000 crore 17.6% 130029 74% 5500 77% 117055 175000 140000 0 119862 2017-18 Domestic 2018-19 International 141007 45109 32% 105000 33% 39699 2018-19 -5935 4%, (4%) International Order Book Composition 221850 76%, (78%) 14553 10%, (9%) ☐ Hydrocarbon Automation Electrical & Heavy Engineering 9%, (8%) 12638 5068 3%, (3%) Domestic crore Share of revenue of Services business increased from 18% to 19%, with similar share being reduced of Infrastructure segment. The growth in revenue was achieved with pick up of execution momentum in project businesses and substantial growth in services businesses. In product business, Electrical & Automation business achieved good growth on better offtake in Electrical Standard Products & higher demands in Metering Protection Systems, while Valves revenue was impacted due to delays in client clearances. Pick up in execution momentum in large value orders in order book in Transportation Infra, Heavy Civil Infra, Water Effluent and Treatment, Hydrocarbon and Defence, led the revenue growth in project business. Revenue in Realty business on application of Ind AS 115 from April 1, 2018, is now recognized based on 'Hand- over' of residential units, change from earlier cost based percentage completion method. This may lead to lumpiness in revenue and profit recognition for a given period. International 2018-19 Segmentwise Gross Revenue 2017-18 Defence Engineering ☐ Power ☐ Infrastructure 7078 2%, (4%) 5843 39717- 2%, (1%) 14%, (10%) 2647 1%, (1%) 4760 1%, (1%) Domestic 11532 4%, (5%) cubic metres of concerte 6,500 210,000 Statue of Liberty twice the height of the Tallest statue in the world 182 metres Height Today, we salute the spirit of unity, as we pledge ourselves once again to making the things that make India proud. The opportunity presented by the Sardar Vallabhbhai Patel Rashtriya Ekta Trust (SVPRET) and Sardar Sarovar Narmada Nigam Limited (SSNNL) to collaboratively convert our Honourable Prime Minister's grand vision into reality, came with its own set of unique construction challenges. The innovative solutions we applied to overcome them will inevitably find their way into the engineering textbooks of tomorrow. Construction unes of structural steef 18,500 L&T's e-learning portal - Any Time Learning (ATL) – is available for employees anytime and at any place. The training modules are diverse. They are prepared by subject experts and culled from various knowledge sources. ATL courses are interactive, engaging and user-friendly. The ATLNext, a learning process automation, and analytical platform has been hosted since last two years. This intelligent and adaptive learning platform makes learning personal and compelling. The Leadership Development Academy (LDA) at Lonavala has been identified as a unique corporate university in India. It is a symbol of value for L&T as it helps people develop and grow by providing the right infrastructure, and services to aid and enhance learning. The LDA has been recognized as a 'Research Centre' by Symbiosis International University. It enables employees to pursue their PhD. programmes. In addition, various functional, technical and managerial training programmes are provided to employees through technical training centres from Mumbai (Madh and Mahape), Mysore and Project Management Institutes (Vadodara and Chennai). The Statue of Unity - in honour of Sardar Vallabhbhai Patel, the Iron Man of India - is a colossus in every respect. Built in a mere 33 months, it towers 182 metres above the shimmering waters of the Narmada river. Creating benchmarks is a way of life at L&T. But it's not every day that you get a chance to build the world's tallest statue - and then do it in record-breaking time. 42202 42901 ⚫ DIN Number: NA a) Details of the Director/Director responsible for implementation of the BR policy/policies 1. Details of Director/Directors responsible for BR SECTION D: BR INFORMATION Yes. The suppliers are critical to the organization's operation and supply chain sustainability issues can impact its operations. The Company promotes BR initiatives in its value chain. At present, less than 30% of its suppliers/distributors participate in BR initiatives. 3. Do any other entity/entities (e.g. suppliers, distributors etc.) that the Company does business with participate in the BR initiatives of the Company? If yes, then indicate the percentage of such entity/entities? [Less than 30%, 30-60%, More than 60%]: Yes. The Business Responsibility (BR) initiatives of the company are extended to the Subsidiary/Associate Companies and they are also encouraged to participate in Business Responsibility Initiatives of the parent organization. In addition, companies like L&T Finance Holdings, L&T Infotech, L&T Technology Services (Listed entities) will have their separate Business Responsibility Report (BRR) as a part of Annual Report. L&T Hydrocarbon Engineering and other subsidiary companies participate in our Business Responsibility initiatives. 22 21 2. Do the Subsidiary Company/Companies participate in the BR Initiatives of the parent company? If yes, then indicate the number of such subsidiary company(s): Yes 1. Does the Company have any Subsidiary Company/ Companies? SECTION C: OTHER DETAILS • Name: Dr. Hasit Joshipura iv. Skill Building ii. Education i. Health 5. List of activities in which expenditure in 4 above has been incurred: Our focus areas in Corporate Social Responsibility are as follows: As per the section 135 of the companies Act, 2013, the CSR spend is 2.003% of the average net profits of the previous three financial years. 4. Total Spending on Corporate Social Responsibility (CSR) as percentage of profit after tax (%): 1.822% 3. Total profit after taxes (INR) : ₹ 6,677.70 crore 2. Total Turnover (INR): 86,987.86 crore 1. Paid up Capital (INR): 280.55 crore SECTION B: FINANCIAL DETAILS OF THE COMPANY 10. Markets served by the Company - Local/State/National/International/: All ii. Number of National Locations : 100 i. Number of International Locations: 35 9. Total number of locations where business activity is undertaken by the Company iii. Water & Sanitation 3. Engineering services • b) Details of the BR head Businesses should respect, protect, and make efforts to restore the environment - P6 LARSEN & TOUBRO P5 - Businesses should respect and promote human rights P4 - Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalized P3 - Businesses should promote the well-being of all employees P2 - Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle P1 - Businesses should conduct and govern themselves with Ethics, Transparency and Accountability Name of principles: 2. Principle-wise (as per NVGS) BR Policy/policies (Reply in Y/N) Sustainability-ehs@Larsentoubro.com Head Corporate Infrastructure & Administrative Services +91-22-67052447 Designation Member, Executive Committee, and Senior Vice President & Head - Electrical & Automation Major General Gautam Kar (Retd.) 5. Telephone Number 4. Designation 3. Name 2. Not Applicable DIN Number (If applicable) 1. Details Particulars S. No Email ID 2. Manufacturing and trading activity 8. List three key products/services that the Company manufactures/provides (as in balance sheet) 1. Construction and project related activity Architectural and engineering activities and related technical consultancy 271 Group Class Sub Class Description 7. Sector(s) that the Company is engaged in (industrial activity code-wise): 6. Financial Year reported: 1st April 2018 - 31st March 2019 5. E-mail id: sustainability-ehs@Larsentoubro.com 4. Website: www.Larsentoubro.com 3. Registered address: L&T House, Ballard Estate, Mumbai, 400 001, India 2. Name of the Company: Larsen & Toubro Limited 1. Corporate Identity Number (CIN) of the Company: L99999MH1946PLC004768 SECTION A: GENERAL INFORMATION ABOUT THE COMPANY of the Business (NVG - SEE) released by the Ministry of Corporate Affairs, Government of India. The BRR complies with the regulations 34 (2) (f) of the Securities Exchange Board of India (SEBI) (Listing Obligation and Disclosure Requirements) Regulations 2015. Last year, L&T published its 1st Integrated Report (IR) 2017-18, as per the International Integrated Reporting Council (IIRC) reporting framework. The externally assured IR was also in accordance with Global Reporting Initiative (GRI) Standards 'Comprehensive' option. From FY2018, the IR has replaced the Sustainability Report of the organization. The Integrated Report and previous Sustainability Reports can be accessed at www.Lntsustainability.com The Business Responsibility Report (BRR) is prepared in accordance with the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities L&T is committed to fulfilling its economic, environmental and social responsibilities while conducting its business. It is conscious of its impact on the society it operates in and has systems to either eliminate or control adverse impact. The Company works towards resource conservation, improving social relations with the community in which it operates and generating economic value. L&T's sustainability Roadmap 2021 aligned with Business plan LAKSHYA 2021 has produced positive results through various digitalization initiatives. 2710 TALLEST FASTEST STRONGEST 20 LATC 201 LARSEN & TOUBRO www.Larsentoubro.com For 200 people at 135 Night 1,700 a world record Construction construction in 33 designing time 13 tonnes of reinforcement steel Safety of the workforce is given top-most priority in all activities across facilities and project sites. Every task, job or assignment must be performed in a safe manner only. This is the basis of our work execution. We have a structured approach towards safety, with assigned ANNUAL BUSINESS RESPONSIBILITY REPORT 2018-2019 282 2824 28246 Real estate activities with own or leased property Construction / erection and maintenance of power, telecommunication and transmission lines Construction and maintenance of industrial facilities such as refineries, chemical plants, etc. Wholesale of construction and civil engineering machinery and equipment Construction and maintenance of power plants 7110 71100 711 2520 252 6810 68100 681 4659 46594 465 4220 42201 422 LARSEN & TOUBRO Group Class Sub Class Description Construction and maintenance of airfield runways Construction and maintenance of railways and rail-bridges Construction of buildings carried out on own-account basis or on a fee or contract basis Construction and maintenance of motorways, streets, roads, other vehicular and pedestrian ways, highways, bridges, tunnels and subways Building of warships and scientific investigation ships, etc. Construction of floating or submersible drilling platforms Manufacture of parts and accessories for machinery / equipment used by construction and mining industries Manufacture of electric motors, generators, transformers and electricity distribution and control apparatus 42103 42102 4210 42101 421 30114 4100 41001 410 3011 30112 301 P7 - Businesses, when engaged in influencing public and regulatory policy, should do so in a responsible manner P8 - Businesses should support inclusive growth and equitable development Manufacture of weapons and ammunition S. No Principle 2: Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle A new supplier needs to sign this combined CoC when he/she wants to do business with the Company. So far more than 22,000 suppliers have signed this CoC. Training workshops, including capacity building programmes, are periodically conducted for vendors and sub-contractors which cover topics from Environment, Health & Safety The Company has established a Combined Code of Conduct for the suppliers and vendors which covers various aspects, such as compliance with environmental regulations, health & safety, labour practices, human rights aspects, minimum wages rule, freedom of association and collective bargaining, prohibition on child labour, forced & compulsory labour, ethical behavior, reducing negative impact on society due to their operations, transparency in business processes and environment conservation. assurance. From the last two years, the Whistleblower policy has been extended to suppliers and contractors as well to enable them to report their concerns about unethical behavior, misconduct, violation of legal and other requirements, improper practices, actual or suspected fraud by the company official without the fear of unfair treatment or punishment (including loss of business). The senior management and the audit committee of the Board are apprised of the internal processes on a periodical basis, which covers internal controls, statutory compliance, and The Policy was formulated in 2004, and is periodically reviewed and updated. The objective is to have a vigilance mechanism in place for directors, senior management and employees to report their concerns about potential, suspected and actual frauds, unethical, and violation to the clauses of the CoC. The Whistle Blower policy is an effective method available to employees to fearlessely report any wrong practices, unethical behavior or non-compliance which may have a detrimental impact on the organization including financial damage and its brand devaluation. During 2018-19, a total of 51 Complaints were received through whistleblower policy and all these complaints were scrutinized and addressed in accordance with the Company's protocol. 50 complaints were resolved and one complaint is in the process of being resolved. The Whistle Blower investigation committee and management maintain the anonymity of the whistleblower at all times. The stakeholder complaints are included in the director's report section of the Annual Report. Whistle Blower Policy 26 25 At the Unit level, the CoC committee comprises four members from Heads of Human Resources (HR), Operations and Accounts department. The committee is chaired by the Unit head and meets at least once a quarter. The role of the unit committee comprises creating awareness amongst employees, motivating them to adhere to the CoC and monitoring compliance. The investigation of non-compliance cases, and reporting to the Apex level committee is also done by the unit CoC committee. Senior officers from various locations are appointed as coordinators for the respective locations/businesses/ corporate departments. The objective is to inculcate good governance practices amongst employees. This ultimately boosts L&T's brand value. All L&T vendors and suppliers sign a Combined Code of Conduct covering various aspects of governance. LARSEN & TOURS Sustainability Policy L&T ensures that environment, health, and safety aspects are taken into consideration at the design stage itself while manufacturing products or providing services to customers. It is our endeavor to provide safe and sustainable goods and services to our clients. Our business portfolio consists of infrastructure, energy (oil & gas/power), defence, heavy engineering, electrical & automation products, hydrocarbon projects, IT, technological services and financial services. Sustainability aspects, including lower emissions and resource conservation, are integrated into our engineering and design. The Company also provides training to customers and customers' personnel in the safe use and handling of products. committee coordinates, interacts and provides feedback to the Executive Committee (E Com) on all issues pertaining to the CoC. The Compliance officer of the organization also acts as Ex-officio secretary of the Apex committee. Its key function is to ensure implementation of the CoC across the organization, review all the instances of non-compliance and augment the CoC if required. The Compliance officer also oversees the function of Unit-level CoC committees. The CEO & MD provided an annual declaration by the Board members and senior management to CoC and affirms its compliance. The CoC is available at www.larsentoubro.com and periodical training is conducted for relevant stakeholders to make them aware of the CoC and amendments. All new employees undergo training on the CoC in the induction program. The training module on CoC is also hosted on L&T's web-based Any Time Learning (ATL) portal. The Graduate Engineering Trainees (GETs) and Post Graduate Engineering Trainees (PGETS) also learn about the CoC in the 'PRAYAG' & 'SWAGAT' (special orientation) training modules. The Company has laid down its Code of Conduct (CoC) which is applicable to Board members, senior management and employees. The objective is to remain committed, vigilant towards ethical conduct of business processes. All employees need to adhere to and provide an annual declaration for their compliance with the CoC. The objective is to increase the understanding and instill a sense ownership of the Company. At Larsen & Toubro, Corporate Governance is fundamental to the business and core to its existence. The philosophy is based on the transparent governance & disclosure practices, respect for human rights and individual dignity and adherence to norms of moral and professional conduct. L&T is a professionally managed Indian multi- national, committed to total customer satisfaction and enhanced value creation. The Vision of the company is inclusive, with a culture of caring and trust supplemented by corporate policies. These are also applicable to all subsidiary and associate companies. Principle 1: Businesses should conduct and govern themselves with Ethics, Transparency and Accountability SECTION E LARSEN & TOUBRO Yes, the Company has been publishing its Sustainability performance annually as per the Global Reporting Initiative (GRI) framework since 2008. From 2017-18, the Sustainability Reports have been replaced by Integrated Report (IR) which follows GRI Standards as well as International Integrated Reporting Council (IIRC) framework. The Integrated Report is externally assured. We are following GRI Standard and 2017-18 report was 'In Accordance - Comprehensive' report. The reports can be accessed at www.Lntsustainability.com and sustainabilityreport.Larsentoubro.com. Does the Company publish a BR or a Sustainability Report? What is the hyperlink for viewing this report? How frequently it is published? Annually • . Indicate the frequency with which the Board of Directors, Committee of the Board or CEO to assess the BR performance of the Company. Within 3 months, 3-6 months, Annually, More than 1 year 3. Governance related to BR Any other reason (please specify) At the Apex level in the governance structure, a CoC committee comprising minimum five board members meet at least twice a year to review the CoC and ensure implementation across the organization. This Apex 6. L&T offers conservation-based products and projects, such as Green Buildings, wastewater treatment, and recycling plants and solar-PV-based power plants. These help our clients prevent pollution and conserve resources. At our own campuses, we have 17 certified Green buildings including one green factory and certified Green Campus (LDA Lonavala). Our 24 campuses have adopted the zero- wastewater discharge approach and continue to ensure water positive status. Energy efficiency programmes and climate change mitigation measures are extensively implemented across L&T, contributing to greener campuses and project sites. Renewable energy is harnessed at campuses and project sites as well. 227 MLD Water Treatment Plant, Kolkata, West Bengal Training and skill-building are the pillars which support L&T's skill development agenda. Regular training and exposure to the challenges of the future are vital parts of an employee's career progress. L&T trains employees in new skills in emerging fields in addition to continual training on functional and behavioral areas. Employees are given opportunities for higher education through sponsorship in reputed colleges and by way of corporate tie-ups. P9 - Businesses should engage with and provide value to their customers and consumers in a responsible manner 2,93,662 2822 Refer "Standalone financials - 10- year Highlights" section of Annual Report contract workmen Number of employees permanent women Number of L&T employees Total workforce manufacturing campuses 5.75% of permanent employees are covered under the unionized employee category. L&T has provided direct employment to 90 Persons With Disabilities (PWDs) and the supply chain has employed 41 Persons With Disabilities. In 2018-19, no complaint was registered in respect of child labour, forced / involuntary labour or about sexual harassment at the workplace. Our green product and services portfolio consists of metro rail projects, efficient power transmission and distribution systems, small hydro-electric power stations, solar-PV-based power plants, green buildings, energy efficient equipment (power management systems, AC drives, smart metering), water treatment & distribution infrastructure, supercritical and ultra-supercritical thermal power plants and equipment L&T promotes good electrical practices among both employees and customers LEADERSHIP DEVELOPMENT ACADEMY 28 27 The Company recognizes the employees' right to form unions and associations affiliated with trade unions at its L&T does not discriminate against employees based on caste, religion, region, gender or physical disability and merit of candidates is always accorded top priority for selection and promotion. L&T adheres to be UNGC (United Nation Global Compact) principles which include Human Rights clauses. These causes are part of our contracts with suppliers, partners, NGOs and extended across our supply chain. The Company's growth truly depends upon the growth of employees within the organization. The commitment of employees, their enthusiasm and dedication help L&T to become a truly global conglomerate. The Company nurtures its talent by motivating and rewarding performance. The Corporate Human Resources Policy has set up a strong framework for workforce management. Fostering a culture of caring and trust are other corporate policies like the Environment, Health & Safety (EHS) Policy, Whistle-Blower policy, Protection of Women's Rights at Workplace and the CoC. Principle 3: Business should promote well- being of employees Fly ash substitutes cement in construction, crushed sand is used in place of natural sand, and blast furnace slag is used. These are some of the conservation methods extensively practiced at project sites. However, since most of our products are 'engineered to order' and based on customer-specific requirements, the use of recycled material for products is limited. The Company extensively participates in the 'Make in India' programme and promotes local sourcing of products and services. The transportation of material at the project sites is optimized based on the project execution stage. Many of our infrastructure projects are at remote locations, and therefore goods and services are procured from local producers and the surrounding areas as far as possible. L&T has adopted the 3R (Reduce, Recycle & Recover) principle for material conservation. Material recycling and use of alternative material (in place of natural material) are extensively practiced by our infrastructure business. The Sustainability Roadmap 2021 targets increasing recycling/ use of recycled material by 5%. and coal gasifiers. Our green portfolio is focused on minimizing environmental impact, e.g. reduced water consumption, carbon emissions, and material consumption and reduced waste generation. These help our clients to move on the low-carbon economy path. L&T offers a variety of energy-saving low voltage switchgear MEE (CCC (mm tece et u LARSEN & TOUBRO L&T's 24-acre Leadership Development Academy at Lonavala It is planned to be done within the next 1 year (EHS), Human Rights, business process improvements and sustainability. The Company ensures compliance by vendors and suppliers to combined CoC through periodic quality appraisal, EHS audits, and assessments. It is planned to be done within next 6 months www.Lntsustainability.com 9. the policy/policies? 8. Has the policy been formally communicated to all relevant internal and external stakeholders? 7. Indicate the link for the policy to be viewed online? Yes. 6. Y Y Y Y Does the company have a specified committee of the Board/ Director/Official to oversee the implementation of the policy? YYYYYYYYY 5 YYYYYYYYY Yes. The policies are aligned with the principles of NVG guidelines and conform to international standards of ISO 9001, ISO 14001, OHSAS 18001 and ILO principles. P1 P2 P3 P4 P5 P6 P7 P8 P9 YYYYYYYYY YYYYYYYYY If yes, has it been signed by MD/owner/CEO/appropriate Board Director? Has the policy being approved by the Board? Yes. 4 Does the policy conform to any national /international standards? If yes, specify? (50 words) Has the policy being formulated in consultation with the relevant stakeholders? Do you have a policy/policies for Questions 3. 5. 2. 1. Signed by the Group Executive Chairman Does the company have in-house structure to implement Y YYYYYYYYY Y The company does not have financial or manpower resources available for the task 4. Does the Company have a grievance redressal mechanism related to the policy/policies to address stakeholders' grievances related to the policy/policies? 3. P8 P9 P1 P2 P3 P4 P5 P6 P7 Questions S. No 24 23 P8 P9 P4 P5 P6 P7 P3 P2 P1 99 The company is not at a stage where it finds itself in YYYYYYYYY a position to formulate and implement the policies on specified principles Has the company carried out independent audit/ evaluation of the working of this policy by an internal or external agency? YYYYYYYYY 2a. If answer to S. No. 1 against any principle, is 'No', please explain why: (Tick up to 2 options) Not Applicable S. No 10. 1. The company has not understood the Principles 2. Questions The Segment Operating profit was at 3336 crore for the year 2018-19 as compared to 2391 crore in the previous year. Operating margin improved by 180 basis points mainly on account of depreciation of rupee and better operational efficiencies. crore 18000 Gross Revenue and OPM% 28.1% 14553 18000 Gross Revenue 10064 25.6% 12000 IT & TS segment comprises Larsen & Toubro Infotech group of companies and Larsen & Toubro Technology Services group of companies, which were listed in FY 2016-17. Segment recorded gross revenue of 14553 crore for the year ended March 31, 2019 registering a growth of 28.1% over the previous year. International revenue constitutes a steady 90% the total revenue of the segment. crore IT & Technology Services (IT & TS) 6000 MANAGEMENT DISCUSSION AND ANALYSIS | FINANCIAL REVIEW ANNUAL REPORT 2018-19 290 289 Funds employed by the segment at 2128 crore increased by 53.6% as compared to March 31, 2018 reflecting higher investible surplus. 7205 OPM % International 2018-19 Domestic 2017-18 0 42% 4991 47% 6000 7. 0 104842 12638 2018-19 6.8 7.7% Total Assets Financial Services segment comprises Rural, Wholesale and Housing Finance as well as Investment and Wealth Management businesses housed within L&T Finance Holdings Limited (LTFH) and its subsidiaries. Segment revenue grew 25.6% y-o-y at 12638 crore during the year ended March 31, 2019 aided by growth in the loan assets. During the year, the company divested 7.5% stake in L&T Infotech and 8.5% stake in L&T Technology Services, towards meeting the regulatory requirement of minimum public shareholding of 25% within three years from listing of its shares. L&T's shareholding in LTI and LTTS as on March 31, 2019 is 74.80% and 78.88% respectively. 8. Financial Services (FS) The Funds employed by the segment at 7071 crore as at March 31, 2019 is higher by 31.4% as compared to March 31, 2018 due to investment on acquisition of new subsidiaries. 2017-18 0 20000 5.9 40000- 60000 OPM % 2017-18 2018-19 2017-18 80000 86089 100000 6000 120000 21.4% crore 23.2% 11357 12000 Total Assets and NIM % Disbursal of fresh Loans and Advances in Wholesale, Real Estate, Micro Loans and Farm portfolio amounted to * 58224 crore during the year ended March 31, 2019, a decline of 13% y-o-y. The Asset Book stood at ₹ 99121 crore as at March 31, 2019 recording a growth of 16% y-o-y. The Net interest margins at 6.8% improved over 5.9% in the previous year. 2018-19 Revenue 8.8% 5. 53% 27871 76.3% Order Inflow 35000 crore to 27871 crore during the year, driven by a number of large value onshore orders, recording a growth of 76.3%. The business achieved break through success in new region - Algeria during the year, resulting in composition of international orders increasing to 45% from 38% in the previous year. 0 1500 72% 3962 4449 73% 16.0% 3000 17.5% 28% 1546 28000 4500 1645 5508 6000 6094 7500 10.6% crore Gross Revenue and OPM% E&A business recorded gross revenue of 6094 crore for the year, an increase of 10.6% over the previous year. Revenue from international operations marginally declined to 27% of the total revenues of the segment. Segment operating profit for the year improved to ₹ 1012 crore, a 23.1% increase over previous year. Operating margins improved during the year by 150 basis points to 17.5%, owing to better operational efficiencies and favourable product mix. Electrical & Automation Segment (E&A) Funds employed by the segment as on March 31, 2019 at * 2862 crore decreased 8.1% y-o-y, on account of better collections. LARSEN & TOUBRO Employees are guided by the 'Code of Conduct' that reflects and reinforces the unique corporate culture and values. A separate 'Code of Conduct' for Business Partners seeks to ensure they align to Company's values. Whistleblower mechanism is an important element of the internal control system encouraging both employees and business partners to report genuine concerns, misconduct or fraud without any fear of punishment or unfair treatment. The operation of Whistleblower mechanism is I overseen by the Audit Committee. -NIM% 27% 58% 6769 12492 45% 7971 11760 12000 15176 29.1% Gross Revenue and OPM % crore 18000- 1330 crore, with margins improving by 110 basis points from 7.7% to 8.8% reflecting operational / execution efficiencies. Segment revenue at ₹ 15176 crore for the year grew by 29.1% y-o-y, enabled by on time execution of large orders in onshore and fast track projects in offshore business. International revenue declined to 53% of the total revenue of the segment as compared to 58% in the previous year, due to reduced share of international orders in opening order book and orders received during the year are yet to pick up execution momentum. Segment operating profit for the year improved to Hydrocarbon segment registered a strong performance with large growth in order inflow and profitable revenue growth. The segment secured fresh orders aggregating 6. Hydrocarbon Segment The Company entered into a definitive agreement with Schneider Electric, a global player in energy management and automation for strategic divestment of the Electrical & Automation business for an all cash consideration of 14000 crore. CCI approval, subject to certain amendments details of which is awaited, is received. The business transfer will be effected on acceptance of the amendments and consequent completion of all formalities and approvals. Funds employed at 2280 crore marginally decreased by 1.3% y-o-y aided by better collections from customer Segment performance is after adjusting performance of marine switchgear business which was part of the segment till September 2018, thereafter transferred to Defence Engineering segment as a part of business portfolio restructuring. OPM % 21000 International 2018-19 2017-18 International 2018-19 Domestic 2017-18 0 62% 9870 55% 7000 15379 38% 5941 14000 15811 Domestic The Gross Non-Performing Assets (GNPA) ratio decreased from 8.7% (restated) as at March 31, 2018 to 5.9% as at March 31, 2019. LTFH has been strengthening its balance sheet throughout the year by building macro prudential provisions for unanticipated future event risk, over and above the expected credit losses on GS3 and standard asset provisions. The coverage on GNPA is maintained at 61% (restated as per new RBI norms) for the year ended March 31, 2019. Net NPA ratio has reduced to 2.40% (restated) as at 31st March 2019 against 3.34% as on 31st March 2018. The responsibility for establishing, operating and upgrading the internal controls system is on the executive management assisted by Internal Control teams operating at Corporate level as well as in the businesses. The teams formulate and upgrade processes and standard operating procedures on an ongoing basis and share best practices across the organisation. The Corporate Audit department is tasked with testing of internal controls (design as well as operating effectiveness) and follow up for adequate remedial actions where controls gaps and weaknesses are observed. The Audit Committee guides and evaluates the efficacy of the Corporate Audit function and reviews the major observations each quarter. LARSEN & TOUBRO • 5 Year Business Plan Global and Domestic Macro Environment • Assessment of Business Outlook Initiatives • New Growth Growth Opportunities Technologies & New Emerging • Key Strategic • Assessment Of • Long Term Business Vision • Mid-Long term 5 Year Strategic Plan Perspective Plan OBJECTIVE TIMELINES SCOPE 3931 7838 Assessing Global Megatrends Utilisation of Funds Initiatives Operating Plan • Employee • CRM Plan Opportunities • Medium Term • Assessment Of Macro Investment • Detailed Growth Plan Outlay • Long Term Capex • Leadership Pipeline • Course Correction • Organization Structure • Investment In • Geographical Business Strategy • Business Portfolio Annual 5 Years 7-10 Years • Productivity Targets • KPIs: Order Wins, Revenues, Profits, Working Capital and Roe Targets • Annual Business Plan Emerging Businesses 1322 1381 Interest paid 1962 Treasury and dividend income (1456) 3169 Net divestment/ (investment) 2952 2249 Operating activities 2018-19 2017-18 3635 Particulars Strategy Formulation Schematic The current 5-year strategic plan sharply focused on improvement in Return on Equity (ROE) ends in 2020-21. The inputs from the Perspective Plan, the 5-year strategic plan and broad financial goals are built into annual budgets every financial year. Business strategy formulation underpins the Company's long-term growth plans. Strategic plan covers a period of 5 years through a collaborative and consultative process across the organisation. In addition, given the emerging trends in technology and digitalisation and emergence of new business models, the company has embarked on development of a Perspective Plan with a horizon of 7-10 years. The objective is to identify new businesses and offerings that have significant potential to scale up, given the underlying macro trends. The focus would be on identifying new areas for expansion that would need to be seeded now, so that they could evolve into large-scale businesses over the long term. Strategy Formulation III. STRATEGY, BUSINESS MODEL AND RESOURCE ALLOCATION Total borrowings as at March 31, 2019 stood at ₹ 10192 crore as compared to 10561 crore in the previous year. Proportion of short term borrowings decreased to 36% as compared to 39% as at March 2019. The loan portfolio of the Company comprises a mix of domestic and suitably hedged foreign currency loans. The gross debt equity ratio decreased to 0.19:1 as at March 31, 2019 from 0.21:1 as at March 31, 2018. The net debt equity ratio was nominal at 0.04:1 as at March 31, 2019 same as previous year. Fund flow statement Business operations generated cash flows of 2249 crore during the year as compared to 2952 crore in the previous year. The drop is mainly due to higher deployment of funds to support growing business volumes. The cash generated through internal accruals, divestment of stake in S&A companies, treasury income and liquidation of other investments was mainly used for investments in S&A Companies of 1012 crore and capex of 786 crore, in addition to payment of dividend and interest of 2597 crore and 1381 crore respectively, besides loan repayment of 483 crore. crore (Increase)/decrease in cash balance 447 (1250) 2279 2597 Dividend paid investments (621) 2591 Purchase/(Sale) of Other additional borrovvings) (62) 483 Repayment of Borrowings (net of 1013 786 Capital expenditure (net) 3931 7838 Sources of Funds expenses) 50 11 ESOP Proceeds (net of buyback Engagement • Strategic Partnerships • Annual Budgets • Order Prospect Pipeline LARSEN & TOUBRO Cyber security: As IT systems get increasingly inter- connected, cyber security has become a key concern for Governments and businesses. The Company has taken several steps to mitigate the cyber risks. These include roll-out of an enterprise-wide cyber security framework that provides for technology solutions to enforce Reputation and Brand: The Company addresses the potential risk of erosion of reputation and brand value through a strong corporate governance framework. It has a Compliance Policy in place, mandating adherence to a Code of Conduct and Internal Controls, complemented by regular knowledge-sharing across the organisation. Competition: Competition from foreign and domestic players has considerably increased in the past few years. Customers have found it easier to impose less attractive commercial terms and also shrink project duration. The Company's competitive strength is derived from excellence in executing projects of varying sizes, reputation for quality, technology, cost-effectiveness and project management expertise. Geopolitical Risks: The Company monitors the risks such as sanctions, trade barriers, protectionist policies and geopolitical conflicts. Appropriate mitigation strategies are in place addressing geographical concentration, strategic sourcing options, regular monitoring of international sanctions and other economic measures. Underperformance of key sectors: Growth in key sectors like power, nuclear, defence and metals & minerals, etc., could be impacted by a number of factors, such as budgetary allocation, slow pace of decision- making, lack of investment demand, green initiatives and delays in environmental clearances. Being a diversified conglomerate helps mitigate the risk of such a slowdown in some sectors as we see compensating growth in certain other sectors. The top enterprise-level risks for the Company and the mitigation measures being implemented are: The Company emphasises on continuous learning and has initiated several initiatives to improve risk awareness across the organization. These include workshops, knowledge sessions and training content deployed on online learning platforms. analysis, which helps in factoring in the learnings while making future bids. The principles of risk management have been strongly embedded at various levels of the organisation, with business treating it as an enabler and not just a process to comply with. The risk management processes are developed especially for project businesses, which constitute a larger portfolio in the group. The key stages specifically covered by risk reviews include country clearance in case of venturing into a new country, pre-bid proposal clearance, execution risk reviews and project close-out reviews. Based on an authorization matrix as determined by the Risk Management Committee, the proposals are reviewed and cleared for submitting the bid. Execution risk reviews of the projects are held at regular intervals to track the project performance with an emphasis on identification of risks and their mitigation. An evaluation of the effectiveness of mitigation measures is periodically carried out. Close-out risk reviews are held to capture key learnings from the projects and what went right/wrong detective and preventive controls and employee education to create awareness of cyber risk. The Audit Committee of the Board and a board appointed Apex Risk Management Committee (ARMC) oversee the efficacy of the risk management processes. The risk level of each business is discussed in detail in the respective management/ business Board meetings. The ARMC is regularly informed of the critical risks affecting the Company for their review and guidance. Mitigation plans are drawn up and implemented as deemed appropriate within the overall Enterprise Risk Management framework of the company. IV. RISK MANAGEMENT Ensuring judicious allocation of manpower and monetary resources to company-wide sustainability and growth initiatives such as CSR, Digitisation and operational excellence programs Maintaining strong financial health to facilitate access to the capital markets, as and when required Prudent allocation of resources (Capex and Working Capital) to fund growth in businesses Infrastructure, Nuclear Power and Defence equipment manufacturing • . • MANAGEMENT DISCUSSION AND ANALYSIS | FINANCIAL REVIEW ANNUAL REPORT 2018-19 Over the past decade, the Company institutionalized an enterprise-wide Risk Management framework. The framework provides process of identifying, quantifying and mitigating risks which is well integrated with the business of the Company. Guided by the Corporate Risk Management framework, each business vertical has in place a Risk Management Policy, structure and procedures to cater to the unique nature of its business. The Company's risk management processes ensure that the Company accepts risks as per the boundary conditions based on the risk appetite of the organisation. Other Operational Risks: Execution challenges: The Company faces execution challenges like geological surprises, availability of work front, land acquisition and Right-of-Way (ROW), pending approvals and clearances from Government agencies, working in difficult/harsh weather conditions, manpower issues, etc. The Company closely tracks the key risks for each project to ensure timely mitigation. Counter Party Risks: The Company partners with different contractors (Joint Venture / consortium projects) across businesses based on technical requirements/ local market conditions. The partner's performance and financial strength is crucial for project success. Learnings from the past projects are incorporated in the inter-se agreements with the partners and clauses on liability of each partner is carefully drafted after legal due diligence is exercised. Internal Controls at L&T cover not only Disclosure and Reporting systems and activities ("Internal Controls on Financial Reporting") but also the entire gamut of business operations and processes ("Operational Controls") to meet the requirements of the Companies Act, 2013. They are seen as an aid to efficient business operations and not as a set of rules that circumscribe authority. A well-defined Authorisation / Authority matrix is at the heart of Internal Controls in the Organisation to ensure that all transactions are genuine and are authorised at appropriate level of management. At L&T, Internal Controls are a key pillar of Corporate Governance. The Company has a robust Internal Control framework in place, developed on COSO-model. The framework provides for Internal Controls commensurate with the nature, size and complexity of business both at entity level and process level. V. INTERNAL CONTROLS Despite currency weakness and elevated financial market volatility, the Company's robust financial risk management processes ensured financial costs remain under control. Financial risk management is governed by the Risk Management framework and policy approved by the Audit Committee and authorised by the Board. Financial risks in each business portfolio are measured and managed by corporate treasury. The disclosure of commodity exposures as required under clause 9(n) of Part C of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 in the format specified vide SEBI Circular dated 15th November 2018 is given on page 299 of this Annual Report. The businesses of the Company are exposed to fluctuations in foreign exchange rates and commodity prices. Additionally, it has exposures to foreign currency denominated financial assets and liabilities. The business- related financial risks, especially involving commodity prices, by and large, are managed contractually through price variation clauses, while the foreign exchange rate risks and residual commodity price risks are managed by treasury products. Foreign Exchange and Commodity Price Risks MANAGEMENT DISCUSSION AND ANALYSIS | FINANCIAL REVIEW ANNUAL REPORT 2018-19 298 LTFH also witnessed growth in its Investment & Wealth Management businesses. Average Assets under The Company judiciously deploys its periodical surplus funds in short-term investments in line with the Corporate Treasury policy. The Company constantly monitors the liquidity levels, economic and capital market conditions and maintains access to the lowest cost means of sourcing liquidity through banking lines, trade finance and capital markets. The Company further optimized the cost of debt by using subsidized export financing scheme of RBI and Commercial Paper issuance as well as re-pricing of some of its existing long-term liabilities. The Company dynamically manages interest rate risks through a mix of fund-raising products, investment products and derivative products across maturity profiles and currencies within a robust risk management framework. The Company plans to maintain adequate liquidity on the Balance Sheet to deal with slow recovery / downturn in economic conditions. With the implementation of the Large Exposure Framework guidelines of RBI from April 1, 2019, the banking limits sanctioned by domestic banks to any of the Group companies will need to fit within 25% of Tier 1 capital of banks v/s 40% of Tier 1 and Tier 2 capital prevalent till now. This is likely to constrain the availability of bank limits (both fund-based and non-fund- based) and also impact the pricing of the same for the Group (unless some regulatory relaxation is granted) and may have some adverse impact on the growth plans of the Group. Despite the lower liquidity environment in FY 18-19 on the back of slower consumer demand and sluggishness around investments in the private sector, the Company managed to restrain the working capital usage, both at a gross and net level. The Company has been investing capital into subsidiaries as scheduled and also to optimise overall Group interest rate costs. The Company also decided to use the surplus cash available with it to acquire shares of Mindtree Limited from some existing shareholders of Mindtree and launched an open offer with an intent to acquire controlling stake in the Company. The acquisition is in line with the stated strategy of growing the Company's services business; however, the transaction is not expected to result in material impact on gearing. with other emerging market currencies. The last quarter of 2018-19 witnessed elevated financial market volatility primarily due to fading impact of stimulus in the US and emerging growth concerns in Europe and China. Inflation in India remained broadly contained, though growth concerns continued. The US Dollar remained strong in 2018-19, primarily on the back of strong growth divergence between the US and rest of the world including emerging market countries. While the Indian currency depreciated in line Inflation remained broadly contained in India, however growth concerns remained. Indian currency depreciated in line with other emerging market currencies for the year. Capital structure, liquidity and interest rate risks The Company maintains a conservative capital structure. Low gearing levels equip the Company to balance business stresses on one hand and raise growth capital on the other. This policy also provides flexibility for fund- raising options in the future, which is especially important in times of global economic volatility. FINANCIAL RISKS Claims management: The Company maintains a strong documentation and follow up with clients / sub- contractors/vendors for any claim that is submitted. adverse contractual payment terms sometimes lead to increased working capital requirements. The Company has strengthened the process for close monitoring of cash flows at the project level. It ensures regular follow-up for delay in payments from clients, and has ensured improvement in the working capital levels. Working capital challenges: Project delays and 296 Liquidity & Gearing 295 The Company has a well laid-out plan for resource allocation to meet its strategic objectives. Strategic initiatives include: Buildings and Factories Heavy Civil Transportation Infrastructure Business Portfolio Schematic: The business portfolio spans across domestic and international markets in line with the strategy of having a well-balanced, geographically diversified business. The Company is increasingly leveraging digital solutions and analytics across various parts of its businesses, spanning areas such as remote asset management, material tracking, employee productivity enhancement, safety and procurement, among others. The Company has extensive manufacturing facilities at Hazira, Vadodara, Ahmednagar, Talegaon, Chennai, Coimbatore, Kattupalli and Oman. Partnerships with several large global process and technology licensors have also been established. The construction projects follow the EPC model, executing large, complex turnkey projects. These are executed by deploying a combination of the Company's own employees and an extensive contract workforce. The IT and Technology Services companies also have extensive partnerships with established global software product and technology companies. The diversified but cyclical nature of the EPC business is counterbalanced through a portfolio of manufacturing and services businesses. Manufacturing is mainly concentrated around defence and shipbuilding, heavy custom-built equipment catering to process industries, electrical products and systems (made-to-stock and made- to-order), material handling equipment and industrial products & machinery. The services businesses cater to sectors of Information Technology, Technology Services, Smart World & Communication, Realty and Financial Services. The Company focuses on its proven core competencies of conceptualising, executing and commissioning large, complex infrastructure projects in the areas of Roads and Bridges, Power Transmission & Distribution, Thermal, Hydel, Solar and Nuclear Power Plants, Water and Irrigation Infrastructure, Residential, Commercial, Institutional and Factory Buildings, Real Estate Development, Airports, Metro and Conventional Railways, Onshore and Offshore Hydrocarbon facilities and Metallurgical projects. An integrated EPC (Engineering, Procurement & Construction) business strategy forms the backbone of the Company's business portfolio. The Company has also undertaken development projects such as Hyderabad Metro, road operations and tolling (through IDPL) and Nabha Power among others. The Company serves the Government and large corporate customers across multiple sectors, both in India as well as globally. The Realty and Financial Services businesses provide B2C offerings as well in addition to B2B products/ services. Power Transmission & Distribution Water & Effluent Treatment Metallurgical & Material Handling Business Model and Portfolio Strategy • Quality Control Plan • Capex And Liquidity Plan • Order Book Execution Management • Key Account Policies • Bid Management LARSEN & TOUBRO • Hyderabad Metro IDPL (Road Tolling & Operations) Manufacturing Resource Allocation In the first 3 years of the plan, RoE has improved from 9.9% in 2016-17 (base year) to 15.3% in 2018-19 and is on course to achieve the target of 18% by 2021. Unlocking Capital from asset earning sub par returns Ensuring realisation of margins embedded in the Order Book through execution, operational excellence and digitalisation initiatives Maintaining an optimum mix between domestic and international business Enabling growth of the profitable services segment Incubating new businesses to tap future growth opportunities asset light, capex light, new-age businesses • • At the core of the Company's strategy is the overarching aim to create shareholder value through enhanced Return on Equity (ROE). The RoE improvement strategy encompasses strategic and tactical elements such as: Strategic Thrust and Direction: Smart World & Communication ⚫ Realty Financial Services Information Technology Technology Services Services Engineering, Procurement & Construction Power Development (Nabha Power, Others) Hydrocarbon Engineering Power Energy Others (Valves, Construction & Mining Equipment, etc.) Electrical & Automation Defense and Shipbuilding Heavy Engineering Maintaining adequate liquidity on the Balance Sheet to exploit organic and inorganic growth opportunities and fund emerging businesses such as Smart City Return on Net worth (RONW) including exceptional items for the year 2018-19 at 13.2% is higher as compared to 11.3% in the previous year. 297 Net Worth 2018-19 16% 247023 39452 2017-18 0 80000 82% 186832 207571 84% 160000 Domestic 227523 40691 240000 320000 Order Book 8.6% 16% 112508 18083 Order Inflow 6.8% International order inflow increased to 16% of the total order inflow for 2018-19 as compared to 15% in the previous year. Order inflow during 2018-19 grew by 6.8% at 112508 crore as compared to 105302 crore in the previous year. Infrastructure segment contributed 82% of the total order inflow during the year as compared to 85% in the previous year. Power business registered growth with receipt of awards for Flue Gas De-sulpharisation projects. Heavy Engineering order inflow reported growth due to step up of capex in overseas market. E&A business is witnessing some pick up in industrial demand, mainly in Electrical Standard Products which is reflected through modest growth in order inflow. Order Inflow and Order Book 18% International Order Book Composition crore Realty Hydrocarbon Electrical & Automation Heavy Engineering Engineering 217894 88% 5368 2% 11259 5% 0.4% -1354 2% ■ Defence 4720 0.4% 0.5% Power 943 1.7% 1395 Infrastructure 4090 The Company continued to focus on shareholder value enhancement driven by operating margin improvement, working capital reduction and unlocking of capital earning sub-par returns. ☐ Others L&T standalone continues to be major contributor to topline as well as bottom-line of the group performance. In line with group performance, the standalone performance has equally delivered good performance on all operational parameters. MANAGEMENT DISCUSSION AND ANALYSIS | FINANCIAL REVIEW ANNUAL REPORT 2018-19 2967 2500 1477 4444 5000 Gross Revenue *crore 7500 Others Segment covers Realty, Construction and Mining Machinery, Industrial machinery and Products and Valves businesses. Metallurgical and Material Handling (MMH) and Shipbuilding businesses, which were reported under "Other" segment last year, now reported under Infrastructure segment and Defence Engineering Segment from April 1st, 2018 respectively. Accordingly, previous year figures have been regrouped wherever necessary. Revenue for the segment registered a growth of 33.5% from 4444 crore in 2017-18 to 5935 crore in 2018-19 mainly from Realty business on recognition of revenue on completed performances under the newly introduced accounting standard for revenue recognition (Ind AS 115). Construction Equipment and others has recorded growth with higher demand for wheel loaders and compactors and receipt of a major order in RPM business. Valves business, despite growth in order intake, faced revenue slowdown due to delay in customer clearances and supply chain challenges. Operating margin declined as compared to previous year mainly due to provisioning for inventory, an unrecoverable advance in a project in Realty and write off of sticky receivables and non-moving inventory in valves business. 10. "Others" Segment 33.5% The Company received regulatory clearances and divested its investment in a container port in Kattupalli, Tamil Nadu. The company also transferred during the year 5 road projects to IndInfravit, an investment trust, sponsored by L&T IDPL limited. Gross Revenue & EBITDA 7500- crore The segment clocked operating profit of 522 crore for the year 2018-19, improving over 270 crore earned in FY 2017-18, on higher operational revenue from Hyderabad Metro coupled with divestment gain on sale of Kattupalli port which were partly offset by impairment in hydel projects. 5068 crore for Development projects comprises concessions acquired through competitive bidding process for the development of Power projects, Roads, Bridges, Hyderabad Metro Rail and a Power Transmission Line project. Total portfolio of the group consists of 2 power projects, 10 roads & bridges projects, 1 transmission line project & 1 metro rail project. The metro rail project is housed under L&T Metro Rail (Hyderabad) Limited (L&T MRHL) which is a 100% subsidiary of L&T. Power projects are developed by L&T Power Development Limited & other projects are developed by L&T Infrastructure Development Projects Limited. The total estimated cost of developmental projects, not considering the 3 hydel power projects under hold, is pegged at 42809 crore, for which equity commitment is 9256 crore with 8411 crore having been infused as at March 2019. The segment recorded revenue of the year ended March 31, 2019, higher as compared to 4294 crore in the previous year with pick up in operational revenue on progressive commissioning of Hyderabad Metro, sale of container port at Kattupalli and higher revenue from Rajpura power plant. 2018-19 RONW % 9. Developmental Projects (DP) Management (AAUM) in Investment Management business increased to 70944 crore during the year ended March 31, 2019, a growth of 8%. Average Assets under Service (AAUS) in Wealth Management business increased to 28164 crore during the year ended March 31, 2018, registering a growth of 53% over the previous year. 18.0% 5935 2994 2941 292 291 L&T's standalone financials captures the performance of Infrastructure segment, Power, Heavy Engineering, Defence Engineering, Electrical & Automation, Realty PERFORMANCE REVIEW II. L&T STANDALONE Industrial Machinery, Products & Others Realty 2018-19 2017-18 0 EBITDA I Gross Revenue 2018-19 2017-18 0 270 2500 522 4294 5000 5068 and Others segment comprising, a part of Hydrocarbon business and Construction & Mining Machinery business. Realty business is a separate reportable segment for FY 2018-19, as it crossed the profit threshold. Total Order Book: 247023 crore as at 31st March 2019 crore L&T achieved revenue of 86988 crore reflecting growth of 16.6% over the previous year. The growth was mainly driven by infrastructure projects in Transportation Infra, Heavy Civil Infra, Power Transmission and Distribution Infra and Water Effluent Treatment business. Power segment revenue declined over the previous year as a result of depleted order book. Defence engineering segment registered growth of 13.6%, Electrical & Automation grew by 11.6%. 1068 crore, Depreciation and amortization charge for the year 2018- 19 marginally increased by 1.8% and was at as compared to 1049 crore in the previous year. Other Income Depreciation and Amortization charge 1500- Profit before depreciation, interest and tax excluding other income (PBDIT) was 8684 crore for the year, higher by 12.8% over the previous year. 3000 4500- Sales and administration expenses for the year at 2318 crore decreased by 13.4% y-o-y, mainly due to lower provision of doubtful debts. 5387 2017-18 6000- Staff expenses for the year at 6082 crore increased by 8.3% y-o-y mainly due to increase in manpower strength to 44761 as on March 31, 2019 compared to 42924 as at March 31, 2018 and annual pay revisions. [Figures in brackets relate to previous year] crore Profit After Tax The Basic Earnings per Share (EPS) for the year 2018-19 at * 47.63 showed significant growth compared to previous year at 38.46. Profit after Tax (PAT), including exceptional items, for the year 2018-19 at 6678 crore, registered a growth of 24% as compared to 5387 crore in the previous year. Profit after Tax and EPS Exceptional items of 475 crore for the year 2018-19 include gain on dilution of stake in L&T Infotech and L&T Technology Services and recovery of an outstanding under Insolvency & Bankruptcy Code. The company provided for impairment of its investment in a subsidiary and a JV. Exceptional Items 7500 6678 2018-19 Other income mainly comprises income from company's treasury operations, dividends and income from group companies. Other income for the year 2018-19 at ₹ 2769 crore, increased as compared to 1613 crore for the previous year mainly due to higher earnings on larger treasury investment and dividend from subsidiaries. Finance cost 2017-18 0 Revenue from Operations 10000 11.3 30000 13.2 40000 50000 49174 crore 60000 52551 Return on Equity MANAGEMENT DISCUSSION AND ANALYSIS | FINANCIAL REVIEW ANNUAL REPORT 2018-19 294 293 Net worth of the Company as on March 31, 2019 at *52551 crore increased by 3377 as compared to the position as on March 31, 2018 representing largely the net earnings accretion, including gains on divestment of stake in L&T Infotech, L&T Technology Services. Return on Net Worth Other Comprehensive income during year reflected a loss of 119 crore, vis-à-vis loss of 51 crore in the previous year, mainly due to impact of fair valuation of Corporate Bonds. Other comprehensive income (OCI) The interest expenses for the year at 1641 crore were higher by 14.6% vis-à-vis ₹1432 crore for the previous year. The increase is attributable to higher quantum of interest bearing customer advances, increased borrowings from group companies and higher interest on leave liability due to decrease in discount rate. The average borrowing cost for the year 2018-19 was majorly in line with previous year at 7.6%. ☐ Operating Profit (PBDIT) 20000 ☐ Sales, Administration & Other expenses 22% 16488 60000 74612 90000- 120000 crore Order Book as at March 31, 2019 stood at 247023 crore, 88% of which is contributed by Infrastructure segment. International orders constituted 16% of the current order book. L&T continues to carry a healthy order book to revenue ratio at 2.84 providing better visibility of revenue over the medium term. 80.4% (78.6%) Domestic 16.6% 2018-19 94425 84% 85% 89383 75000 50000 25000- 0 15% 15919 100000 105302 125000 150000 crore 2017-18 86988 International 30000 Mfg. Contruction & Operating Expenses Staff Expenses 19190 22% [% to revenue] 2018-19 7.0% (7.5%) (3.6%) 2.7% 10.0% (10.3%) Operating expenses & Profitability Manufacturing, Construction and Operating (MCO) expenses, comprising cost of construction material, raw materials, components and subcontracting expenses, amounted to 69903 crore registering an increase of 19.2%. MCO expenses as percentage of revenue increased by 180 basis point over the previous year mainly due to cost overruns in some of the infrastructure projects and increase in commodity prices. Gross Revenue from Operations LARSEN & TOUBRO Operating Cost and PBDIT 78% 67798 78% 58124 2017-18 2018-19 Domestic International 0 Exposure in LARSEN & TOUBRO Disclosure of commodity exposures as required under clause 9(n) of Part C of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 % of such exposure hedged through Sr No Commodity Name INR towards the particular Domestic market commodity derivatives commodity (crore) towards the particular commodity (Tn) International market Total OTC Exchange OTC Exchange 1 Exposure in Quantity terms Silver (Buy) 65.18 2,443.83 Sales Tax/VAT Tribunal 1993-94, 1994-95, 1999-00 to 2012-13 1989-90, 1991-92, 1993-94 to 1996-97, 1999-00 to 2015-16 593.04 510.07 Services Tax Act Works contract disputes. Non submission of Forms, classification disputes, inter-state sale turnover, Rate of tax of declared goods, Labour & service charges disallowed, Disallowance of exemptions claimed for imports & Sales in transit, Sale mismatch & levy of tax on import of goods through Way bill, Road permit issue and other matters Dispute regarding questions of law, classification dispute, sales in transit, high sea sales, non- submission of C forms & E1 forms, disallowance of ITC, valuation of goods and other matters Commissioner 1999-00 to 2015-16 (Appeal) Additional 2005-06, 2007-08 to Commissioner 2014-15 31.92 30.66 4.08 3.10 Joint 2007-08 to 2015-16 14.04 10.00 Commissioner Joint 1995-96, 1996-97, Commissioner 1999-00 to 2017-18 (Appeal) 2,377.28 348.02 10 2 7 Iron Ore (Buy) 60.30 1,26,582.00 8 Coking Coal (Buy) 59.26 52,122.00 9 Zinc (Buy) 52.82 2,740.00 - 10 Lead (Buy) 55.79 3,928.80 ☐ 60.89 ☐ 75.76 (9,200.00) Aluminium (Sell) Copper (Buy) 898.91 19,492.24 3 Copper (Sell) (550.25) 4 Steel (Buy) 8,882.57 (12,224.00) 18,79,071.36 51.18 51.18 100.00 100.00 - 5 Aluminium (Buy) 800.93 48,661.81 (121.36) 71.55 (crore) Dispute regarding questions of law, High Court classification dispute, local VAT and (vii) According to the information and explanations given to us, in respect of statutory dues: (a) The Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Employees' State Insurance, Income-tax, Goods and Service Tax, Customs Duty, cess and other material statutory dues applicable to it to the appropriate authorities. (b) There were no undisputed amounts payable in respect of Provident Fund, Employees' State Insurance, Income-tax, Goods and Service Tax, Customs Duty, cess and other material statutory dues in arrears as at March 31, 2019 for a period of more than six months from the date they became payable. 307 308 AUDITORS' REPORT ON STANDALONE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 (c) Details of dues of Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Goods and Service Tax and Value Added Tax which have not been deposited as on March 31, 2019 on account of disputes are given below:- Name of Statute The Central Excise Act, 1944, Service Tax under Finance Act, 1994 and Customs Act, 1962 Nature of Dues Forum where Dispute is Pending (vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Act. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended and prescribed by the Central Government under sub-section (1) of Section 148 of the Act, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained by the company. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete. Period to which Amount Relates (v) According to the information and explanations given to us, the Company has not accepted any deposits during the year and does not have any unclaimed deposits as at March 31, 2019 and hence, the provisions of the clause 3 (v) of the Order is not applicable to the Company. (iii) According to the information and explanations given to us, the Company has not entered into any contracts or arrangements covered under section 189 of the Companies Act, 2013 (the "Act") and hence reporting under paragraph 3 (iii) of the Order is not applicable to the Company. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment. (b) The Company has a program of physical verification of its property, plant and equipment to cover all the items of property, plant and equipment in a phased manner over a period of 3 years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its property, plant and equipment. Pursuant to the program, certain property, plant and equipment were physically verified by the Management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification. (c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed / transfer deed / conveyance deed provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings are held in the name of the Company as at the balance sheet date, except the following: crore Type of asset Total no. of cases Land Buildings 3 2 Leasehold / freehold Freehold Freehold Gross block as at March 31, 2019 1.27 Net block as at March 31, 2019 Remarks 1.27 3.53 0.59 Conveyance deed pending to be executed as the matter is sub judice. In respect of immovable properties of land and buildings that have been taken on lease and disclosed as property, plant and equipment in the financial statements, the lease agreements are in the name of the Company, where the Company is the lessee in the agreement. (ii) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals and no material discrepancies were noticed on physical verification between the physical stock and the books of accounts. (iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Act in respect of grant of loans, making investments and providing guarantees and securities, as applicable. Amount Involved Amount - 7.27 6.13 short payment of service tax,service (Appeal) tax rate dispute, valuation dispute and other matters The Central Sales Tax Act, Taxability of sub-contractor turnover, rate of tax for declared Supreme Court 2000-01 to 2006-07, 2010-11 16.07 7.03 Entry tax, Local goods, disallowance of labour Sales Tax Act, Works Contract turnover and non- submission of forms Tax Act and Goods & Commissioner 2006-07 to 2012-13 Disallowance of CENVAT credit, matters. rebate disallowance, and other Unpaid (crore) Classification dispute and other matters Supreme 2002-2003, 2003- 7.34 6.79 Court 2004, 2011-12 to 2015-16 1986-87, 1987-88, Dispute regarding questions of law, High Court classification dispute and other matters 114.28 85.25 Disallowance of CENVAT credit, short payment of service tax, MRP Valuation disputes, dispute regarding classification of services, disallowances of excise duty CESTAT 1991-92, 2001-02 to 2013-14, 2016-17 303.46 297.35 exemption, Non Maintenance of Separate Books of Accounts, Export 2003-04 to 2012-13 20.27 Testing a sample of contracts for appropriate identification of performance obligations; 55.27 We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Other Matters (a) We did not audit the financial information of 24 joint operations included in the standalone financial statements whose financial information reflect total assets of 4,540.71 crore as at March 31, 2019, total revenues of 6,018.63 crore and net cash outflows amounting to 170 crore for the year ended on that date, as considered in the standalone financial statements. The financial information of these joint operations have been audited by the other auditors whose reports has been furnished to us by the management, and our opinion in so far as it relates to the amounts and disclosures included in respect of these joint operations and our report in terms of subsection (3) of section 143 of the Act, in so far as it relates to the aforesaid joint operations, is based solely on the report of such other auditors. Our opinion on the standalone financial statements and our report on Other Legal and Regulatory Requirements below is not modified in respect of these matters. (b) The standalone financial statements also includes the financial information of 4 joint operations which have not been audited by their auditors, whose financial information reflect total assets of ₹41.12 crore as at March 31, 2019 and total revenues of * 4.99 crore and net cash outflows amounting to 0.13 crore for the year ended on that date, as considered in the standalone financial statements. The financial information of these joint operations has been unaudited and has been furnished to us by the Management and our opinion on the standalone financial statements, in so far as it relates to the amounts and disclosures included in respect of these joint operations, is based solely on such unaudited financial information which is certified by management. In our opinion and according to the information and explanation given to us by the Management, the financial information of these joint operations are not material to the Company. Report on Other Legal and Regulatory Requirements As required by the Companies (Auditor's Report) Order, 2016 ("the Order"), issued by the Central Government of India in terms of sub- section (11) of section 143 of the Companies Act, 2013, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable As required by Section 143(3) of the Act, we report that: a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. LARSEN & TOUBRO e) f) g) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books. The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account. In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. On the basis of the written representations received from the directors as on March 31, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2019 from being appointed as a director in terms of Section 164 (2) of the Act. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure A". Communication with those charged with governance With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation. Obtain sufficient appropriate audit evidence regarding the financial information of the Company and its joint operations to express an opinion on the standalone financial statements. We are responsible for the direction, supervision and performance of the audit of the standalone financial statements of such entities included in the standalone financial statements. The respective Board of Directors of the Company and its Joint Operation Companies are responsible for the preparation of other information. The other information comprise the information included in the Management Discussion and Analysis, Board's Report including Annexures to Board's Report, Business Responsibility Report, Corporate Governance and Shareholder's Information, but does not include the standalone financial statements and our auditor's report. Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Management's Responsibility for the Standalone Financial Statements The Company's Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (the "Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, cash flows and changes in equity of the Company including its joint operation companies in accordance with the Ind AS and accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the respective Companies and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. In preparing the standalone financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those Board of Directors are also responsible for overseeing the Company's financial reporting process. Auditor's Responsibility for the Audit of the Standalone Financial Statements Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls systems in place and the operating effectiveness of such controls. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on Company's ability 303 304 AUDITORS' REPORT ON STANDALONE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern. Materiality Information Other than the Standalone Financial Statements and Auditor's Report i. iii. We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditor of the joint operation, which is a Company incorporated in India, in terms of their report referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the Company's internal financial controls system over financial reporting. Meaning of Internal Financial Controls Over Financial Reporting A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Inherent Limitations of Internal Financial Controls Over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion In our opinion, to the best of our information and according to the explanations given to us and based on the consideration of the report of the other auditor on internal financial controls system over financial reporting of the joint operation referred to in the Other Matters paragraph below, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2019, based on the internal control over financial reporting established by the respective company considering the essential components of internal control stated in the Guidance Note. Other Matters Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting insofar as it relates to 1 joint operation, which is a company incorporated in India, is solely based on the corresponding report of the other auditor of such company. Our opinion is not modified in respect of this matter. For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm Registration No. 117366W/W-100018) SANJIV V. PILGAONKAR (Partner) (Membership No. 039826) MUMBAI, May 10, 2019 LARSEN & TOUBRO ANNEXURE "B" TO THE INDEPENDENT AUDITORS' REPORT (Referred to in paragraph 2 under 'Report on Other Legal and Regulatory Requirements' section of our report to the Members of Larsen & Toubro Limited of even date) Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. ii. Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. 306 The Company has disclosed the impact of pending litigations on its financial position in its financial statements; The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts; There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company. For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm Registration No. 117366W/W-100018) SANJIV V. PILGAONKAR (Partner) (Membership No. 039826) MUMBAI, May 10, 2019 ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT (Referred to in paragraph 1 (f) under 'Report on Other Legal and Regulatory Requirements' section of our report of even date) Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act") We have audited the internal financial controls over financial reporting of Larsen & Toubro Limited (the "Company") as at March 31, 2019 in conjunction with our audit of the standalone Ind AS financial statements of the Company as for the year ended on that date which includes internal financial controls over financial reporting, which is applicable to 1 of the 29 joint operations, being a Company incorporated in India audited by another auditor. Management's Responsibility for Internal Financial Controls The Board of Directors of the Company and those charged with governance of the joint operation referred to above, which is a company incorporated in India, are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to respective Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act. Auditor's Responsibility Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting of the Company and its joint operation Company incorporated in India, based on our audit. We conducted our audit in accordance with the Guidance Note on 305 AUDITORS' REPORT ON STANDALONE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 Additionally, considered the effect of new information in respect of uncertain tax positions as at April 1, 2018 to evaluate whether any change was required to management's position on these uncertainties. iii. Considered legal precedence and other rulings in evaluating management's position on these uncertain tax positions. Assessed management's estimate of the possible outcome of the disputed cases; and Report on the Audit of Standalone Financial Statements Opinion We have audited the accompanying standalone financial statements of Larsen & Toubro Limited (the "Company"), which comprise the Balance Sheet as at March 31, 2019, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information and which includes 29 joint operations whose legal status is an entity. (Hereinafter referred to as the "Standalone Financial Statements"). In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (the "Act") in the manner so required and give a true and fair view in conformity with Indian Accounting Standards prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015, as amended ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2019 and its profit/loss, total comprehensive income/loss, its cash flows and the changes in equity for the year ended on that date. Basis for Opinion We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAS) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor's Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Companies Act, 2013 and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI's Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report. Revenue recognition - accounting for construction contracts Key audit matter description There are significant accounting judgements including estimation of costs to complete, determining the stage of completion and the timing of revenue recognition. The Company recognises revenue and profit/loss on the basis of stage of completion based on the proportion of contract costs incurred at balance sheet date, relative to the total estimated costs of the contract at completion. The recognition of revenue and profit/loss therefore rely on estimates in relation to total estimated costs of each contract. Cost contingencies are included in these estimates to take into account specific uncertain risks, or disputed claims against the Company, arising within each contract. These contingencies are reviewed by the Management on a regular basis throughout the contract life and adjusted where appropriate. LARSEN & TOUBRO Principal Audit Procedures The revenue on contracts may also include variable consideration (variations and claims). Variable consideration is recognised when the recovery of such consideration is highly probable. Refer to Note Number. 1(e) of the Standalone Financial Statements Our procedures included : • TO THE MEMBERS OF LARSEN & TOUBRO LIMITED Testing of the design and implementation of controls involved for the determination of the estimates used as well as their operating effectiveness; INDEPENDENT AUDITORS' REPORT Senapati Bapat Marg 81.75 73.86 - I I 60.89 20.27 55.35 55.27 81.75 73.86 11 Cement (Buy) 2,297.62 41,80,105.46 -- 299 300 AUDITORS' REPORT ON STANDALONE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 DELOITTE HASKINS & SELLS LLP Chartered Accountants Indiabulls Finance Centre, Tower 3 27th - 32nd Floor, Elphinstone Road (West) Mumbai 400013. Testing the relevant information technology systems' access and change management controls relating to contracts and related information used in recording and disclosing revenue in accordance with the new revenue accounting standard; For the sample selected, reviewing for change orders and the impact on the estimated costs to complete; Engaging technical experts to review estimates of costs to complete for sample contracts; and Performed analytical procedures for reasonableness of revenues disclosed by type and service offerings Obtained an understanding of the Company's processes in collating the evidence supporting execution of work for each disaggregated type of revenue. Auditors have also obtained an understanding of the design of key controls for quantifying units of items / services that would be invoiced and the application of appropriate prices for each of such services; Tested the design and operating effectiveness of management's key controls in collating the units of services delivered and in the application of accurate prices for each of such services for samples of the un-invoiced revenue entries, which included testing of access and change management controls exercised in respect of related information systems; Tested samples of un-invoiced revenue entries with reference to the reports from the information system that records the costs incurred against the services delivered to confirm the work performed and application of appropriate margin applied for the respective services. The auditors have also tested whether appropriate adjustments have been made for the element of variable consideration related to committed service levels of performance. With regard to incentives, auditors tests were focused to ensure that accruals were restricted to only those items where contingencies were minimal; Tested cut-offs for revenue recognized against un-invoiced amounts by matching the revenue accrual against accruals for corresponding cost; For defence contracts which are covered under by statutory confidentiality arrangements, the auditors have compared the revenue recognised with amounts collected from customers to ensure that the gap between revenue recognised and collections is below the materiality threshold; Extended the testing upto the date of approval of financial statements by the Board of Directors of the Parent entity to verify adjustments, if any, that may have been necessary upon receipt of approvals from customers for services delivered prior to the reporting date and/or collections there against; Reviewed the delivery and collection history of customers against whose contracts un-invoiced revenue is recognised; and Verification of subsequent receipts, post balance sheet date. Evaluation of uncertain tax positions Key audit matter description The Company has material uncertain tax positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes. Refer to Note. Number 1(u) and 1(w) of the Standalone Financial Statements Principal Audit Procedures Our procedures included the following: Obtained understanding of key uncertain tax positions; Obtained details of completed tax assessments and demands for the year ended March 31, 2019 from the management; We along with our internal tax experts - i. ii. Discussed with appropriate senior management and evaluated the Management's underlying key assumptions in estimating the tax provision; • . Principal Audit Procedures The procedures performed included the following: Refer to Note Number 1(e) and 1(m) of the Standalone Financial Statements Assessment of the carrying value of unquoted equity instruments in loss making subsidiaries and joint ventures. Key audit matter description Principal Audit Procedures The impairment review of unquoted equity instruments and debt, with a carrying value of 2,669 crore, is considered to be a risk area due to the size of the balances as well as the judgmental nature of key assumptions, which may be subject to management override. The carrying value of such unquoted equity instruments and debt is at risk of recoverability. The net worth of the underlying entities has significantly eroded and the orders in hand are below the break-even production levels of this facilities. The estimated recoverable amount is subjective due to the inherent uncertainty involved in forecasting and discounting future cash flows. Refer to Note Number 1(j) of the Standalone Financial Statements Besides obtaining an understanding of Management's processes and controls with regard to testing the impairment of the unquoted equity instruments in loss making subsidiaries and joint ventures. Our procedures included the following: • Engaged internal fair valuation experts to challenge management's underlying assumptions and appropriateness of the valuation model used; Compared the Company's assumptions with comparable benchmarks in relation to key inputs such as long-term growth rates and discount rates; 55.35 Assessed the appropriateness of the forecast cash flows within the budgeted period based on their understanding of the business and sector experience; Performed a sensitivity analysis in relation to key assumptions. Revenue recognition and measurement of contract assets in respect of un-invoiced amounts and measurement of receivables in respect of overdue invoices. Key audit matter description The Company, in its contract with customers, promises to transfer distinct services to its customers which may be rendered in the form of engineering, procurement and construction (EPC) services through design-build contracts, and other forms of construction contracts. The recognition of revenue is based on contractual terms, which could range from cost plus fee to agreed unit price to lump-sum arrangements. At each reporting date, revenue is accrued for costs incurred against work performed that may not have been invoiced. Identifying whether the Company's performance have resulted in a service that would be billable and collectable where the works carried out have not been acknowledged by customers as of the reporting date, or in the case of certain defence contracts, where the evidence of work carried out and cost incurred are covered by confidentiality arrangements involves a significant amount of judgment. 301 302 AUDITORS' REPORT ON STANDALONE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 Recognition of revenue before formal acknowledgment of receipt of services by the customer could lead to an over or under-statement of revenue and profit, whether intentionally or in error; and Assessing the recoverability of amounts overdue against invoices raised which have remained unsettled for a significantly long period after the end of the contractual credit period also involves a significant amount of judgment. Considered historical forecasting accuracy, by comparing previously forecasted cash flows to actual results achieved; and LARSEN & TOUBRO In respect of the Company's property, plant and equipment: (i) Diluted earnings per equity share (*) Basic earnings per equity share (₹) Total Comprehensive Income for the year 16.52 0.59 (0.14) (8.87) 25.39 Other Comprehensive Income for the year [net of tax] (118.63) 6559.07 Income tax (expenses)/income on cost of hedging reserve (42.12) (58.68) 22.40 30.59 Income tax (expenses)/income on effective portion of gains/(losses) on hedging instruments in a cash flow hedge (64.52) (89.27) Effective portion of gains/(losses) on hedging instruments in a cash flow hedge Cost of hedging reserve (0.92) 0.45 (50.94) 5336.36 52 Membership No. 39826 Partner SANJIV V. PILGAONKAR by the hand of Firm's Registration No. 117366W/W-100018 Chartered Accountants For DELOITTE HASKINS & SELLS LLP In terms of our report attached 22 1 to 64 2.00 NOTES FORMING PART OF THE FINANCIAL STATEMENTS Face value per equity share (*) 38.37 47.54 52 38.46 47.63 2.00 Mumbai, May 10, 2019 6.06 (3.25) Note 2017-18 2018-19 Other Comprehensive Income Brought forward Statement of Profit and Loss for the year ended March 31, 2019 (contd.) LARSEN & TOUBRO 5387.30 crore 6677.70 6677.70 Carried forward Profit after tax 1875.08 2540.47 (98.99) (146.75) 49(a) 5387.30 0.49 crore 6677.70 * crore 5387.30 Income tax (expenses)/income on exchange differences in translating the financial statements of foreign operations (1.41) 9.31 Exchange differences in translating the financial statements of foreign operations (10.85) (62.17) 0.27 (11.12) (78.85) 16.68 crore Income tax (expenses)/income on debt instruments through Other Comprehensive Income Items that will be reclassified to Profit and Loss B 2.50 (20.36) benefits plan 3.82 (1.32) (31.30) 10.94 A Items that will not be reclassified to Profit or Loss : Gain/(loss) on remeasurements of the defined benefits plan Income tax (expenses)/income on remeasurements of the defined Debt instruments through Other Comprehensive Income 1974.07 N. HARIHARAN Company Secretary M. No. A3471 Chief Executive Officer & Managing Director bonds reserve equity Hedging Retained through currency earnings translation reserve Other General reserve redemption Debt instruments Total other combination Foreign Securities premium options Capital Capital reserve on business reserve convertible allotment currency pending money Employee Debenture share component (net) Comprehen- sive Income 137.63 5336.36 (10.85) (10.85) (50.94) (0.92) (41.67) (0.92) (41.67) 5389.80 2.50 Transfer to non-financial assets/liability reserve Issue of equity shares Other Comprehensive Income (b) 65.78 45826.15 5387.30 0.55 144.11 8318.85 177.25 356.76 25373.60 11225.53 5387.30 Profit for the year (a) 10.52 153.20 Balance as at 1-4-2017 Total Comprehensive Income for the year (a+b) S. N. SUBRAHMANYAN application of foreign Share Equity 2018-19 Number of shares Particulars A. Equity share capital Statement of changes in Equity for the year ended March 31, 2019 STATEMENT OF CHANGES IN EQUITY | ANNUAL REPORT 2018-19 313 Directors N. KUMAR (DIN 00007848) *crore SUNITA SHARMA (DIN 02949529) M. M. CHITALE SANJEEV AGA (DIN 00022065) (DIN 00041197) VIKRAM SINGH MEHTA SUBODH BHARGAVA (DIN 00035672) (DIN 00019798) R. SHANKAR RAMAN Chief Financial Officer & Whole-time Director (DIN 02255382) (DIN 00101004) Particulars 2017-18 Number of shares Issued, subscribed and fully paid up equity shares outstanding at the beginning of the year Add: Shares issued on exercise of employee stock options during the year Items of Other Comprehensive Income -Reserves and surplus crore B. Other equity 280.27 93.35 46,67,64,755 1,40,13,69,456 280.55 crore 1,40,27,29,385 Add: Bonus shares alloted during the year 0.33 16,38,898 186.59 93,29,65,803 280.27 0.28 1,40,13,69,456 13,59,929 Issued, subscribed and fully paid up equity shares outstanding at the end of the year 137.63 2687.22 Deferred tax 125725.69 1 to 64 30 29 NOTES FORMING PART OF THE FINANCIAL STATEMENTS COMMITMENTS (capital and others) CONTINGENT LIABILITIES TOTAL EQUITY AND LIABILITIES In terms of our report attached 115606.68 320.91 1102.22 1423.83 28 20845.46 22550.64 27 284 367.97 Current tax liabilities(net) For DELOITTE HASKINS & SELLS LLP Firm's Registration No. 117366W/W-100018 N. KUMAR (DIN 00007848) SUNITA SHARMA (DIN 02949529) M. M. CHITALE (DIN 00101004) SANJEEV AGA (DIN 00022065) (DIN 00041197) VIKRAM SINGH MEHTA SUBODH BHARGAVA (DIN 00035672) (DIN 00019798) Chartered Accountants R. SHANKAR RAMAN Chief Financial Officer & Whole-time Director Chief Executive Officer & Managing Director S. N. SUBRAHMANYAN N. HARIHARAN Company Secretary M. No. A3471 Mumbai, May 10, 2019 Membership No. 39826 Partner SANJIV V. PILGAONKAR by the hand of (DIN 02255382) Directors Provisions 38038.84 Financial liabilities 5603.80 472.87 1.27 2445.62 497.62 0.58 22 21 22 5495.16 108.64 2391.87 53.75 Borrowings 20 120 49174.25 52550.72 280.27 48893.98 280.55 52270.17 18 17 crore 19 Other current liabilities Current maturities of long term borrowings 23 45935.77 1878.00 1857.85 26 30957.29 36076.36 25 225 22 Other financial liabilities 137.71 201.86 Due to micro enterprises and small enterprises Trade payables: 4129.57 936.27 4131.45 24 3668.25 Due to others 49(a) 311 STATEMENT OF PROFIT AND LOSS | ANNUAL REPORT 2018-19 Depreciation, amortisation, impairment and obsolescence 1432.23 1641.39 36 Finance costs 2680.73 2319.78 35 1067.95 Sales, administration and other expenses 6082.49 34 Employee benefits expense 58620.50 69903.39 6378.22 8117.47 (1047.41) 5614.74 (1296.12) 1049.46 69397.66 Current tax Tax expenses 7262.38 9218.17 430.53 474.93 6831.85 8743.24 81015.00 69392.47 5.19 1.54 Profit before tax 46 Exceptional items Profit before exceptional items and tax Total Expenses Less: Overheads capitalised 81013.46 312 19620.99 1808.79 76224.32 74611.65 1612.67 89756.70 2768.84 86987.86 32 31 crore Total Income crore crore Note 2017-18 2018-19 Other income Revenue from operations INCOME: Statement of Profit and Loss for the year ended March 31, 2019 crore 22021.74 EXPENSES: Cost of raw materials components consumed 2341.99 1531.22 1786.14 22236.60 29099.38 149.10 7942.99 7832.79 Manufacturing,construction and operating expenses 33 Other manufacturing, construction and operating expenses and work-in-progress Changes in inventories of finished goods, stock-in-trade Sub-contracting charges Stores, spares and tools consumed Purchase of stock-in-trade Construction materials consumed Excise duty 33 As at 31-3-2018 crore || (0.28) (1321.87) (1380.96) Interest paid (including cash flows from interest rate swaps) (317.93) (353.60) (1960.76) (2243.18) Additional tax on dividend Net cash (used in)/from financing activities Dividends paid 308.95 Settlement of derivative contracts related to borrowings 1783.81 (606.49) (Repayments)/Proceeds from other borrowings (net) [Note 62] (3794.12) (974.33) Repayments of non-curent borrowings [Note 62] 149.31 1922.70 (4449.25) Net (decrease)/increase in cash and cash equivalents (A + B + C) In terms of our report attached 4. Previous year's figures have been regrouped/reclassified wherever applicable. Add Unrealised exchange (gain)/loss on cash and cash equivalents Less Other bank balances disclosed under current assets [Note 13] Less Cash and bank balances disclosed under non-current assets [Note 7] Total Cash and cash equivalents as per Statement of Cash Flows : (c) Cash and bank balances disclosed under non-current assets [Note 7] Total Cash and cash equivalents as per Balance Sheet (a) Cash and cash equivalents disclosed under current assets [Note 12] (b) Other bank balances disclosed under current assets [Note 13] 3. Cash and cash equivalents included in the Statement of Cash Flows comprise the following: 2. Purchase of fixed assets represents additions to property, plant and equipment, investment property and other intangible assets adjusted for movement of (a) capital work in progress for property, plant and equipment and investment property and (b) intangible assets under development during the year. (3489.36) 1. Statement of cash flows has been prepared under the indirect method as set out in the Ind AS 7 "Statement of Cash Flows" as specified in the Companies (Indian Accounting Standards) Rules, 2015. 3187.75 2741.05 Cash and cash equivalents at end of the year 1938.24 3187.75 Cash and cash equivalents at beginning of the year {2017-18: included * 0.09 crore transferred under scheme of amalgamation [Note 60(b)]} 1249.51 (446.70) Notes: For DELOITTE HASKINS & SELLS LLP 789.05 49.50 (12708.16) 13698.56 12427.56 (12969.83) 370.98 (3702.01) 375.80 (1136.78) 123.32 (3420.51) 1068.38 (75.00) 1146.61 (19.45) (17.49) 3.82 (469.84) 785.16 (1571.41) 2952.00 2249.22 4716.32 (1764.32) (2684.73) 4933.95 4181.49 Proceeds from non-current borrowings [Note 62] 452.57 1330.60 11.31 Proceeds from fresh issue of share capital (including share application money)[net] C. Cash flow from financing activities: crore crore 2017-18 2018-19 Statement of Cash Flows for the year ended March 31, 2019 (contd.) 439.88 STATEMENT OF CASH FLOWS [ ANNUAL REPORT 2018-19 315 1786.87 1753.33 (125.74) (22.60) 2693.08 178.70 502.51 316 (12269.46) (705.73) 9753.03 Chartered Accountants by the hand of NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 318 317 The Company recognises revenue from contracts with customers when it satisfies a performance obligation by transferring promised good or service to a customer. The revenue is recognised to the extent of transaction price allocated to the performance obligation satisfied. Performance obligation is satisfied over time when the transfer of control of asset (good or service) to a customer is done over time and in other cases, performance obligation is satisfied at a point in time. For performance obligation satisfied over time, the revenue recognition is done by measuring the progress towards complete satisfaction of performance obligation. The progress is measured in terms of a proportion of actual cost incurred to-date, to the total estimated cost attributable to the performance obligation. The Company has adopted Ind AS 115 "Revenue from Contracts with Customers" effective April 1, 2018. Ind AS 115 supersedes Ind AS 11 "Construction Contracts" and Ind AS 18 "Revenue". The Company has applied Ind AS 115 using the modified retrospective method and the cumulative impact of transition to Ind AS 115 has been adjusted against the Retained earnings as at April 1, 2018. Accordingly, the figures of the previous year are not restated under Ind AS 115. (e) Revenue recognition Operating cycle for the business activities of the Company covers the duration of the specific project/contract/product line/service including the defect liability period wherever applicable and extends up to the realisation of receivables (including retention monies) within the agreed credit period normally applicable to the respective lines of business. (d) Operating cycle for current and non-current classification Notes forming part of the Financial Statements (contd.) Amounts in the financial statements are presented in Indian Rupees in crore [1 crore = 10 million] rounded off to two decimal places as permitted by Schedule III to the Companies Act, 2013. Per share data are presented in Indian Rupees to two decimals places. (c) Presentation of financial statements Above levels of fair value hierarchy are applied consistently and generally, there are no transfers between the levels of the fair value hierarchy unless the circumstances change warranting such transfer. (iii) Level 3 inputs are unobservable inputs for the valuation of assets or liabilities. (ii) Level 2 inputs are inputs, other than quoted prices included in level 1, that are observable for the asset or liability, either directly or indirectly; and (i) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at measurement date; Fair value measurements are categorised as below, based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety: The Company maintains its accounts on accrual basis following historical cost convention, except for certain financial instruments that are measured at fair value in accordance with Ind AS. (b) Basis of accounting The Balance Sheet and the Statement of Profit and Loss are prepared and presented in the format prescribed in the Schedule III to the Companies Act, 2013 ("the Act"). The Statement of Cash Flows has been prepared and presented as per the requirements of Ind AS 7 "Statement of Cash Flows". The disclosure requirements with respect to items in the Balance Sheet and Statement of Profit and Loss, as prescribed in the Schedule III to the Act, are presented by way of notes forming part of the financial statements along with the other notes required to be disclosed under the notified Accounting Standards and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended. The Company's financial statements have been prepared in accordance with the provisions of the Companies Act, 2013 and the Indian Accounting Standards ("Ind AS") notified under the Companies (Indian Accounting Standards) Rules, 2015 and amendments thereof issued by the Ministry of Corporate Affairs in exercise of the powers conferred by section 133 of the Companies Act, 2013. In addition, the guidance notes/announcements issued by the Institute of Chartered Accountants of India (ICAI) are also applied except where compliance with other statutory promulgations require a different treatment. These financials statements have been approved for issue by the Board of Directors at its meeting held on May 10, 2019. NOTE [1] (contd.) Transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring good or service to a customer excluding amounts collected on behalf of a third party. Variable consideration is estimated using the expected value method or most likely amount as appropriate in a given circumstance. Payment terms agreed with a customer are as per business practice and there is no financing component involved in the transaction price. Impairment loss (termed as provision for foreseeable losses in the financial statements) is recognized in profit or loss to the extent the carrying amount of the contract asset exceeds the remaining amount of consideration that the company expects to receive towards remaining performance obligations (after deducting the costs that relate directly to fulfill such remaining performance obligations). In addition, the Group recognises impairment loss (termed as provision for expected Fixed price contracts: Contract revenue is recognised over time to the extent of performance obligation satisfied and control is transferred to the customer. Contract revenue is recognised at allocable transaction price which represents the cost of work performed on the contract plus proportionate margin, using the percentage of completion method. Percentage of completion is the proportion of cost of work performed to-date, to the total estimated contract costs. Cost plus contracts: Revenue from cost plus contracts is recognized over time and is determined with reference to the extent performance obligations have been satisfied. The amount of transaction price allocated to the performance obligations satisfied represents the recoverable costs incurred during the period plus the margin as agreed with the customer. 2. 1. B. Revenue from construction/project related activity is recognised as follows: Revenue from sale of manufactured and traded goods is recognised when the control of the same is transferred to the customer and it is probable that the Group will collect the consideration to which it is entitled for the exchanged goods. Performance obligations in respect of contracts for sale of manufactured and traded goods is considered as satisfied at a point in time when the control of the same is transferred to the customer and where there is an alternative use of the asset or the company does not have either explicit or implicit right of payment for performance completed till date. In case where there is no alternative use of the asset and the company has either explicit or implicit right of payment considering legal precedents, performance obligation is considered as satisfied over a period of time and revenue is recognized over time. Significant Accounting Policies (contd.) Revenue from sale of goods including contracts for supply/commissioning of complex plant and equipment is recognised as follows: Revenue for the periods upto June 30, 2017 includes excise duty collected from customers. Revenue from July 1, 2017 onwards is exclusive of goods and service tax (GST) which subsumed excise duty. Revenue also includes adjustments made towards liquidated damages and variation wherever applicable. Escalation and other claims, which are not ascertainable/ acknowledged by customers are not taken into account. Revenue from operations (i) Determining the expected losses, which are recognised in the period in which such losses become probable based on the expected total contract cost as at the reporting date. Determining the revenue to be recognised in case of performance obligation satisfied over a period of time; revenue recognition is done by measuring the progress towards complete satisfaction of performance obligation. The progress is measured in terms of a proportion of actual cost incurred to-date, to the total estimated cost attributable to the performance obligation. 2. 1. Costs to obtain a contract which are incurred regardless of whether the contract was obtained are charged-off in Profit & Loss immediately in the period in which such costs are incurred. Incremental costs of obtaining a contract, if any, and costs incurred to fulfil a contract are amortised over the period of execution of the contract in proportion to the progress measured in terms of a proportion of actual cost incurred to-date, to the total estimated cost attributable to the performance obligation. Significant judgments are used in: A. Firm's Registration No. 117366W/W-100018 (a) Statement of compliance NOTE [1] 4.00 7.64 4637.58 7889.25 319.52 289.76 1134.31 * crore 3183.75 4866.08 2017-18 crore 2733.41 2018-19 M. No. A3471 N. HARIHARAN Company Secretary Mumbai, May 10, 2019 Membership No. 39826 Partner SANJIV V. PILGAONKAR 4866.08 Significant Accounting Policies 1134.31 319.52 Notes forming part of the Financial Statements LARSEN & TOUBRO N. KUMAR (DIN 00007848) SUNITA SHARMA (DIN 02949529) M. M. CHITALE (DIN 00101004) Directors SANJEEV AGA (DIN 00022065) VIKRAM SINGH MEHTA (DIN 00041197) 289.76 SUBODH BHARGAVA (DIN 00035672) Whole-time Director Chief Financial Officer & R. SHANKAR RAMAN (DIN 02255382) Chief Executive Officer & Managing Director S. N. SUBRAHMANYAN 3187.75 2741.05 (DIN 00019798) (0.28) 6444.64 (9810.89) (12.13) 10.45 Employee share options (net) the year Transfer from/to general reserve/retained earnings during (0.38) (0.38) Transfer to non-financial assets/liability 105.41 (18.68) 112.13 108.97 Issue of equity shares (62.17) 6559.07 (62.17) (118.63) (701.58) 54.93 48192.40 6677.70 102.16 (701.58) 108.59 458.94 25395.78 13548.43 (0.37) 6677.70 (20.36) 6.06 (42.16) 6657.34 6.06 (42.16) Total Comprehensive Income for the period (c+d) Other Compréhensive Income (d) (3.56) Profit for the year (c) Dividend paid for the previous year (81.32) (2243.18) (353.60) SANJIV V. PILGAONKAR by the hand of Firm's Registration No. 117366W/W-100018 Chartered Accountants For DELOITTE HAŠKINS & SELLS LLP In terms of our report attached (7.24) 52270.17 59.62 Dividend distribution tax paid for the previous year 5.69 106.91 (6.36) 8471.99 10.52 153.20 Balance as at 31-3-2019 (353.60) (2243.18) 10.45 440.26 25507.91 17527.67 Partner (6.36) 8363.02 153.20 15.55 0.52 0.02 (6.36) Transfer under scheme of amalgamation [refer note 60(b)] (47.00) (102.18) (21.66) 102.18 21.66 (47.00) 9.73 Employee share options (net) Transfer from/to general reserve/retained earnings during (93.35) (93.35) (0.13) I (0.13) Utilised for issue of bonus shares Share issue expenses the year 10.52 Applications during the year 3.56 3.56 Restated balance as at 1-4-2018 [Note 48(h) & 1(e)] Change in accounting policy [Ind AS 115] 54.93 48893.98 102.16 458.94 25395.78 14250.01 (0.37) 108.59 3.56 (6.36) 8363.02 153.20 3.56 Balance as at 31-3-2018 (317.93) (1960.76) (1960.76) (317.93) Dividend distribution tax paid for the previous year Dividend paid for the previous year 10.52 (345.65) Membership No. 39826 Chief Executive Officer & Managing Director crore crore 2017-18 Net cash (used in)/from investing activities Settlement of derivative contracts related to current investments Dividend received from other investments Dividend received from subsidiaries and joint venture companies Interest received 8743.24 Deposits/loans repaid - subsidiaries, associates, joint venture companies and third parties Advance given towards equity commitment (addition) Change in other bank balance and cash not available for immediate use (Purchase)/sale of current investments (net) Sale of non-current investments Purchase of non-current investments Divestment of stake in subsidiaries, associates and joint venture companies Investment in subsidiaries, associates and joint venture companies Sale of fixed assets (including advance received) Expenditure on acquisition of fixed assets Deposits/loans (given) - subsidiaries, associates, joint venture companies and third parties B. Cash flow from investing activities: 6831.85 (67.59) 7938.48 8645.85 69.77 74.70 125.74 22.60 2233.22 (251.15) 1067.95 (60.18) (496.89) (499.95) 1432.23 1641.39 17.38 1.66 3.64 (3228.67) 1049.46 (19.71) (594.24) S. N. SUBRAHMANYAN Net cash (used in)/from operating activities Cash (used in)/generated from operations Mumbai, May 10, 2019 314 M. No. A3471 N. KUMAR (DIN 00007848) SUNITA SHARMA (DIN 02949529) (DIN 00101004) M. M. CHITALE Directors LARSEN & TOUBRO SANJEEV AGA (DIN 00022065) (DIN 00035672) SUBODH BHARGAVA (DIN 00019798) Whole-time Director Chief Financial Officer & R. SHANKAR RAMAN N. HARIHARAN Company Secretary (DIN 02255382) VIKRAM SINGH MEHTA (DIN 00041197) Direct taxes refund/(paid) [net] Statement of Cash Flows for the year ended March 31, 2019 A. Cash flow from operating activities: Increase/(decrease) in trade payables and customer advances (Increase)/decrease in inventories (Increase)/decrease in trade and other receivables Adjustments for: Operating profit before working capital changes Employee stock option-discount forming part of employee benefits expense (Gain)/loss on derivatives at fair value through Profit or Loss (Profit)/loss on sale of investments (net) (including fair valuation) 2018-19 (Profit)/loss on sale of fixed assets (net) Interest expense Expenditure on buyback Effect of exchange rate changes on cash and cash equivalents Exchange difference on items grouped under financing/investing activities Dividend received Depreciation, amortisation, impairment and obsolescence (net) Adjustments for: Profit before tax (excluding exceptional items) Interest income crore (1512.12) Note BALANCE SHEET ANNUAL REPORT 2018-19 309 MUMBAI, May 10, 2019 (Membership No. 039826) (Partner) SANJIV V. PILGAONKAR (Firm Registration No. 117366W/W-100018) Chartered Accountants For DELOITTE HASKINS & SELLS LLP (xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. (xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or persons connected with him and hence provisions of section 192 of the Act is not applicable to the Company. (xiv) According to the information and explanations given to us, during the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under paragraph 3 (xiv) of the Order is not applicable to the Company. (xiii) In our opinion and according to the information and explanations given to us, the Company is in compliance with Section 177 and 188 of the Act, where applicable, for all transactions with related parties and the details of such related party transactions have been disclosed in the financial statements as required by the applicable accounting standards. (xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company and hence reporting under paragraph 3 (xii) of the Order is not applicable to the Company. Act. Balance Sheet as at March 31, 2019 (xi) In our opinion and according to the information and explanations given to us, the Company has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the ASSETS: Property, plant and equipment 12344 2 Note Inventories Current assets Other non-current assets Deferred tax assets (net) Other financial assets Loans Investments Financial assets Intangible assets under development Intangible assets Investment property Capital work-in-progress Non-current assets (x) To the best of our knowledge and according to the information and explanations given to us, no material fraud by the Company and no material fraud on the Company by its officers or employees has been noticed or reported during the year. (ix) In our opinion and according to the information and explanations given to us, the Company has not raised any money by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under paragraph 3 (ix) of the Order is not applicable to the Company. (viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to financial institutions and banks and dues to debenture holders. The Company has not borrowed any funds from the government (*crore) Dispute is Unpaid Involved Amount Relates where Amount Period to which Forum LARSEN & TOUBRO Dispute regarding questions of law, classification dispute, sales in transit, high sea sales, non- submission of C forms & E1 forms, disallowance of ITC, valuation of goods and other matters The Central Sales Tax Act, Entry tax, Local Sales Tax Act, Works Contract Tax Act and Goods & Nature of Dues Name of Statute As at 31-3-2019 crore (*crore) Pending Assistant/ 1996-97 to 2017-18 569.35 569.35 287.60 1,066.36 2004-05 & 2009-10 to 2012-13 2015-16 CIT(A) ITAT 56 Demand arising out of Regular Assessment/Reassessment Demand arising out of Regular Assessment/Reassessment Services Tax Act 8.22 8.80 1996-97 to 2016-17 Deputy Commissioner Assessing / Commercial Tax Officer 528.68 531.73 Income Tax Act, 1961 As at 31-3-2019 crore Amount 6571.93 Loans Other bank balances 4694.98 28216.82 2733.41 Cash and cash equivalents 11 Trade receivables Investments Financials assets 115606.68 388.00 36014.41 40499.93 125725.69 41.72 44090.65 16 Other financial assets Other current assets Group(s) of assets classified as held for sale TOTAL ASSETS crore LARSEN & TOUBRO Current liabilities Other non-current liabilities Provisions Borrowings Financial liabilities 625 Non- current liabilities Total equity Other equity Equity share capital Equity EQUITY AND LIABILITIES: Balance Sheet as at March 31, 2019 (contd.) 310 Liabilities 42 Other financial liabilities 3441.59 577.00 7 1732.65 20139.47 200.77 193.09 474.98 452.10 6272.46 crore As at 31-3-2018 crore 228.52 381.26 43800.33 580.92 22994.26 1684.13 438.54 49(e) 171.69 22449.12 841.86 8 1293.86 1134.31 4866.08 3183.75 22917.45 4344.98 1995.18 992.33 2500.05 3220.44 9 3093.34 3347.25 400.62 012345 25116.93 NOTE [1] (contd.) Notes forming part of the Financial Statements (contd.) LARSEN & TOUBRO A financial liability is derecognised when the related obligation expires or is discharged or cancelled. Financial liabilities, including derivatives and embedded derivatives, which are designated for measurement at FVTPL are subsequently measured at fair value. Financial guarantee contracts are subsequently measured at the amount of impairment loss allowance or the amount recognised at inception net of cumulative amortisation, whichever is higher. All other financial liabilities including loans and borrowings are measured at amortised cost using Effective Interest Rate (EIR) method. amount. A. (ii) Financial liabilities: Impairment of financial assets: The Company recognises impairment loss on trade receivables using expected credit loss model, which involves use of a provision matrix constructed on the basis of historical credit loss experience as permitted under Ind AS 109. Impairment loss on investments is recognised when the carrying amount exceeds its recoverable the Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a pass-through arrangement; and (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. On derecognition of a financial asset in its entirety, the difference between the carrying amount measured at the date of derecognition and the consideration received is recognised in Profit or Loss. Significant Accounting Policies (contd.) D. B. 2. Inventories are valued after providing for obsolescence, as under: A. Fair value hedges: Changes in fair value of the designated portion of derivatives that qualify as fair value hedges are recognised in Profit or Loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. NOTE [1] (contd.) Notes forming part of the Financial Statements (contd.) the right to receive cash flows from the asset has expired, or NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 326 325 (iii) The Company designates certain hedging instruments, such as derivatives, embedded derivatives and in respect of foreign currency risk, certain non-derivatives, as either fair value hedges, cash flow hedges or hedges of net investments in foreign operations. Hedges of foreign exchange risk on firm commitments are accounted as cash flow hedges. (iii) Finished goods and stock-in-trade (in respect of goods acquired for trading) at lower of weighted average cost or net realisable value. (i) Raw materials, components, construction materials, stores, spares and loose tools at lower of weighted average cost or net realisable value. However, these items are considered to be realisable at cost if the finished products in which they will be used, are expected to be sold at or above cost. (n) Inventories (iv) Compound financial instruments issued by the Company which can be converted into fixed number of equity shares at the option of the holders irrespective of changes in the fair value of the instrument are accounted by separately recognising the liability and the equity components. The liability component is initially recognised at the fair value of a comparable liability that does not have an equity conversion option. The equity component is initially recognised at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. The directly attributable transaction costs are allocated to the liability and the equity components in proportion to their initial carrying amounts. Subsequent to initial recognition, the liability component of the compound financial instrument is measured at amortised cost using the effective interest method. The equity component of a compound financial instrument is not remeasured subsequently. Cash flow hedges: In case of transaction related hedges, the effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in Other Comprehensive Income and accumulated in equity as "Hedging reserve". The gain or loss relating to the ineffective portion is recognised immediately in Profit or Loss. Amounts previously recognised in Other Comprehensive Income and accumulated in equity relating to the effective portion, are reclassified to Profit or Loss in the periods when the hedged item affects Profit or Loss, in the same head as the hedged item. The effective portion of the hedge is determined at the lower of the cumulative gain or loss on the hedging instrument from inception of the hedge and the cumulative change in the fair value of the hedged item from the inception of the hedge and the remaining gain or loss on the hedging instrument is treated as ineffective portion. In case of time period related hedges, the premium element and the spot element of a forward contract is separated and only the change in the value of the spot element of the forward contract is designated as the hedging instrument. Similarly, wherever applicable, the foreign currency basis spread is separated from the financial instrument and is excluded from the designation of that financial instrument as the hedging instrument in case of time period related hedges. The changes in the fair value of the premium element of the forward contract or the foreign currency basis spread of the financial instrument is accumulated in a separate component of equity as "Cost of hedging reserve". The changes in the fair value of such premium element or foreign currency basis spread are reclassified to Profit or Loss as a reclassification adjustment on a straight line basis over the period of the forward contract or the financial instrument. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. Any gain or loss recognised in Other Comprehensive Income and accumulated in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in Profit or Loss. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognised immediately in Profit or Loss. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. The fair value adjustment to the carrying amount of the hedged item arising from the hedged risk is amortised to Profit or Loss from that date. B. (ii) Manufacturing work-in-progress at lower of weighted average cost including related overheads or net realisable value. In some cases, manufacturing work-in-progress are valued at lower of specifically identifiable cost or net realisable value. In the case of qualifying assets, cost also includes applicable borrowing costs vide policy relating to borrowing costs. 1. 2. For financial assets that are measured at FVTOCI, income by way of interest and dividend, provision for impairment and exchange difference, if any, (on debt instrument) are recognised in Profit or Loss and changes in fair value (other than on account of above income or expense) are recognised in Other Comprehensive Income and accumulated in Other equity. On disposal of debt instruments at FVTOCI, the cumulative gain or loss previously accumulated in other equity is reclassified to Profit or Loss. In case of equity instruments at FVTOCI, such cumulative gain or loss is not reclassified to Profit or Loss on disposal of investments. In case of funding to subsidiary companies in the form of interest free or concession loans and preference shares, the excess of the actual amount of the funding over initially measured fair value is accounted as an equity investment. Significant Accounting Policies (contd.) A financial asset and a financial liability is offset and presented on net basis in the balance sheet when there is a current legally enforceable right to set-off the recognised amounts and it is intended to either settle on net basis or to realise the asset and settle the liability simultaneously. (i) Financial assets: A. All recognised financial assets are subsequently measured in their entirety either at amortised cost or at fair value depending on the classification of the financial assets as follows: 1. Investments in debt instruments that are designated as fair value through profit or loss (FVTPL) - at fair value. Debt instruments at FVTPL is a residual category for debt instruments, if any, and all changes are recognised in Profit or Loss. 323 324 NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 Notes forming part of the Financial Statements (contd.) NOTE [1] (contd.) Significant Accounting Policies (contd.) B. C. 3. Investments in equity instruments issued by other than subsidiaries are classified as at FVTPL, unless the related instruments are not held for trading and the Company irrevocably elects on initial recognition to present subsequent changes in fair value in Other Comprehensive Income. Investment in preference shares of the subsidiary companies are treated as equity instruments if the same are convertible into equity shares or are redeemable out of the proceeds of equity instruments issued for the purpose of redemption of such investments. Investment in preference shares not meeting the aforesaid conditions are classified as debt instruments at FVTPL. Investment in equity instruments issued by subsidiary, associate and joint venture companies are measured at cost less impairment. The contractual terms of instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. • • A financial asset is primarily derecognised when: Investment in debt instruments that meet the following conditions are subsequently measured at fair value through Other Comprehensive Income [FVTOCI] (unless the same are designated as fair value through profit or loss) The asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and • Investments in debt instruments that meet the following conditions are subsequently measured at amortised cost (unless the same designated as fair value through profit or loss): 6. 5. 4. The contractual terms of instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. (iv) Completed property/work-in-progress (including land) in respect of property development activity at lower of specifically identifiable cost or net realisable value. Expenses that are directly identifiable with/allocable to segments are considered for determining the segment result. (o) Cash and bank balances iii) iv) v) Most of the centrally incurred costs are allocated to segments mainly on the basis of their respective expected segment revenue estimated at the beginning of the reported period. Income which relates to the Company as a whole and not allocable to segments is included in "unallocable corporate income/ (expenditure)(net)". Segment result includes margins on inter-segment capital jobs, which are reduced in arriving at the profit before tax of the Company. vi) Segment result includes the finance costs incurred on interest bearing advances with corresponding credit included in "unallocable corporate income/(expenditure)(net). vii) Segment results have not been adjusted for the exceptional item attributable to the corresponding segment. The said exceptional item has been included in "unallocable corporate income/(expenditure)(net)". The corresponding segment assets have been carried under the respective segments without adjusting the exceptional item. viii) Segment assets and liabilities include those directly identifiable with the respective segments. Unallocable corporate assets and liabilities represent the assets and liabilities that relate to the Company as a whole. ix) Segment non-cash expenses forming part of segment expenses includes the fair value of the employee stock options which is accounted as employee compensation cost [Note 1(r) supra] and is allocated to the segment. x) Segment revenue resulting from transactions with other business segments is accounted on the basis of transfer price which are either determined to yield a desired margin or agreed on a negotiated basis. (u) Taxes on income Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961 and based on the expected outcome of assessments/appeals. ii) 327 NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 Notes forming part of the Financial Statements (contd.) NOTE [1] (contd.) Significant Accounting Policies (contd.) Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the Company's financial statements and the corresponding tax bases used in computation of taxable profit and quantified using the tax rates and laws enacted or substantively enacted as at the Balance Sheet date. Deferred tax liabilities are generally recognised for all taxable temporary differences including the temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets are generally recognised for all taxable temporary differences to the extent that is probable that taxable profits will be available against which those deductible temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets relating to unabsorbed depreciation/business losses/losses under the head "capital gains" are recognised and carried forward to the extent of available taxable temporary differences or where there is convincing other evidence that sufficient future taxable income will be available against which such deferred tax assets can be realised. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of reporting period, to recover or settle the carrying amount of its assets and liabilities. Transaction or event which is recognised outside Profit or Loss, either in Other Comprehensive Income or in equity, is recorded along with the tax as applicable. (v) Interests in joint operations The Company as a joint operator recognises in relation to its interest in a joint operation, its share in the assets/liabilities held/ incurred jointly with the other parties of the joint arrangement. Revenue is recognised for its share of revenue from the sale of output by the joint operation. Expenses are recognised for its share of expenses incurred jointly with other parties as part of the joint arrangement. Interests in joint operations are included in the segments to which they relate. (w) Provisions, contingent liabilities and contingent assets Provisions are recognised only when: Financial assets and/or financial liabilities are recognised when the Company becomes party to a contract embodying the related financial instruments. All financial assets, financial liabilities and financial guarantee contracts are initially measured at transaction values and where such values are different from the fair value, at fair value. Transaction costs that are attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from as the case may be, the fair value of such financial assets or liabilities, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in Profit or Loss. 328 i) Segment revenue includes sales and other operational revenue directly identifiable with/allocable to the segment including inter segment revenue. Segment accounting policies are in line with the accounting policies of the Company. In addition, the following specific accounting policies have been followed for segment reporting: Cash and bank balances also include fixed deposits, margin money deposits, earmarked balances with banks and other bank balances which have restrictions on repatriation. Short term and liquid investments being subject to more than insignificant risk of change in value, are not included as part of cash and bank balances. (p) Securities premium (i) (ii) Securities premium includes: A. The difference between the face value of the equity shares and the consideration received in respect of shares issued. B. The fair value of the stock options which are treated as expense, if any, in respect of shares allotted pursuant to Stock Options Scheme. The issue expenses of securities which qualify as equity instruments are written off against Securities premium. (q) Borrowing Costs Borrowing costs include finance costs calculated using the effective interest method, finance charges in respect of assets acquired on finance lease and exchange differences arising on foreign currency borrowings to the extent they are regarded as an adjustment to finance costs. In cases where hedging instruments are acquired for protection against exchange rate risk related to borrowings and are accounted as hedging a time-period related hedge item, the borrowing costs also include the amortization of premium element of the forward contract and foreign currency basis spread as applicable, over the period of the hedging instrument. Borrowing costs net of any investment income from the temporary investment of related borrowings that are attributable to the acquisition, construction or production of a qualifying asset are capitalised/inventoried as part of cost of such asset till such time the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognised in Profit or Loss in the period in which they are incurred. (r) Share-based payment arrangements The stock options granted to employees pursuant to the Company's Stock Options Schemes, are measured at the fair value of the options at the grant date. The fair value of the options is treated as discount and accounted as employee compensation cost over the vesting period on a straight line basis. The amount recognised as expense in each year is arrived at based on the number of grants expected to vest. If a grant lapses after the vesting period, the cumulative discount recognised as expense in respect of such grant is transferred to the General reserve within equity. The fair value of the stock options granted to employees of the Company by the Company's subsidiaries is accounted as employee compensation cost over the vesting period and where such fair value is not recovered by the subsidiaries, the same is treated as dividend declared by them. The share based payment equivalent to the fair value as on the date of grant of employee stock options granted to key managerial personnel is disclosed as a related party transaction in the year of grant. (s) Foreign currencies (i) The functional currency and presentation currency of the company is Indian Rupee. (ii) Transactions in currencies other than the Company's functional currency are recorded on initial recognition using the exchange rate at the transaction date. At each Balance Sheet date, foreign currency monetary items are reported at the closing spot rate. Non-monetary items that are measured in terms of historical cost in foreign currency are not retranslated. Exchange differences that arise on settlement of monetary items or on reporting of monetary items at each Balance Sheet date at the closing spot rate are recognised in the Statement of Profit and Loss in the period in which they arise except for: A. exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to finance costs on those foreign currency borrowings; and The reporting of segment information is the same as provided to the management for the purpose of the performance assessment and resource allocation to the segments. Operating segments are those components of the business whose operating results are regularly reviewed by the chief operating decision making body in the Company to make decisions for performance assessment and resource allocation. (t) Accounting and reporting of information for Operating Segments C. all resulting exchange differences are recognised in Other Comprehensive Income and accumulated in equity as "Foreign currency translation reserve" for subsequent reclassification to Profit or Loss on disposal of such foreign operations. B. A. assets and liabilities for each Balance Sheet presented are translated at the closing rate at the date of that Balance Sheet; income and expenses for each income statement are translated at average exchange rates; and Assessment of net realisable value is made at each reporting period end and when the circumstances that previously caused inventories to be written-down below cost no longer exist or when there is clear evidence of an increase in net realisable value because of changed economic circumstances, the write-down, if any, in the past period is reversed to the extent of the original amount written-down so that the resultant carrying amount is the lower of the cost and the revised net realisable value. (iv) Financial statements of foreign operations whose functional currency is different than Indian Rupees are translated into Indian Rupees as follows: exchange differences on transactions entered into in order to hedge certain foreign currency risks. B. Significant Accounting Policies (contd.) NOTE [1] (contd.) Notes forming part of the Financial Statements (contd.) LARSEN & TOUBRO (iii) Exchange rate as of the date on which the non-monetary asset or non-monetary liability is recognised on payment or receipt of advance consideration is used for initial recognition of related asset, expense or income. (m) Financial instruments Notes forming part of the Financial Statements (contd.) Assets leased out under operating leases are continued to be shown under the respective class of assets. Rental income is recognised on a straight line basis over the term of the relevant lease. Notes forming part of the Financial Statements (contd.) NOTE [1] (contd.) Significant Accounting Policies (contd.) (ii) Other income A. B. C. Interest income on investments and loans is accrued on a time basis by reference to the principal outstanding and the effective interest rate including interest on investments classified as fair value through profit or loss or fair value through Other Comprehensive Income. Interest receivable on customer dues is recognised as income in the Statement of Profit and Loss on accrual basis provided there is no uncertainty towards its realisation. Dividend income is accounted in the period in which the right to receive the same is established. Government grants, which are revenue in nature and are towards compensation for the qualifying costs, incurred by the Company, are recognised as other income in the Statement of Profit and Loss in the period in which such costs are incurred. Government grant receivable in the form duty credit scrips is recognised as other income in the Statement of Profit and Loss in the period in which the application is made to the government authorities and to the extent there is no uncertainty towards its receipt. D. Other items of income are accounted as and when the right to receive such income arises and it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. (f) Exceptional items An item of income or expense which by its size, type or incidence requires disclosure in order to improve an understanding of the performance of the Company is treated as an exceptional item and disclosed as such in the financial statements. (g) Property, plant and equipment (PPE) NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 PPE is recognised when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. PPE is stated at original cost net of tax/duty credits availed, if any, less accumulated depreciation and cumulative impairment, if any. PPE acquired on hire purchase basis are recognised at their cash values. Cost includes professional fees related to the acquisition of PPE and for qualifying assets, borrowing costs are capitalised in accordance with the Company's accounting policy. PPE not ready for the intended use on the date of the Balance Sheet are disclosed as "capital work-in-progress". (Also refer to policy on leases, borrowing costs, impairment of assets and foreign currency transactions infra). Depreciation is recognised using straight line method so as to write off the cost of the assets (other than freehold land and properties under construction) less their residual values over their useful lives specified in Schedule II to the Companies Act, 2013, or in the case of assets where the useful life was determined by technical evaluation, over the useful life so determined. Depreciation method is reviewed at each financial year end to reflect the expected pattern of consumption of the future economic benefits embodied in the asset. The estimated useful life and residual values are also reviewed at each financial year end and the effect of any change in the estimates of useful life/residual value is accounted on prospective basis. Where cost of a part of the asset ("asset component") is significant to total cost of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part is determined separately and such asset component is depreciated over its separate useful life. Depreciation on additions to/deductions from, owned assets is calculated pro rata to the period of use. Extra shift depreciation is provided on a location basis. Depreciation charge for impaired assets is adjusted in future periods in such a manner that the revised carrying amount of the asset is allocated over its remaining useful life. Assets acquired under finance leases are depreciated on a straight line basis over the lease term. Where there is reasonable certainty that the Company shall obtain ownership of the assets at the end of the lease term, such assets are depreciated based on the useful life adopted by the Company for similar assets. Freehold land is not depreciated. LARSEN & TOUBRO (i) NOTE [1] (contd.) Significant Accounting Policies (contd.) (h) Investment property Properties, including those under construction, held to earn rentals and/or capital appreciation are classified as investment property and are measured and reported at cost, including transaction costs. Own manufactured PPE is capitalised at cost including an appropriate share of overheads. Administrative and other general overhead expenses that are specifically attributable to construction or acquisition of PPE or bringing the PPE to working condition are allocated and capitalised as a part of the cost of the PPE. 320 320 319 LARSEN & TOUBRO Notes forming part of the Financial Statements (contd.) NOTE [1] (contd.) Significant Accounting Policies (contd.) C. credit loss on contract assets in the financial statements) on account of credit risk in respect of a contract asset using expected credit loss model on similar basis as applicable to trade receivables. For contracts where the aggregate of contract cost incurred to date plus recognised profits (or minus recognised losses as the case may be) exceeds the progress billing, the surplus is shown as contract asset and termed as "Due from customers". For contracts where progress billing exceeds the aggregate of contract costs incurred to-date plus recognised profits (or minus recognised losses, as the case may be), the surplus is shown as contract liability and termed as "Due to customers". Amounts received before the related work is performed are disclosed in the Balance Sheet as contract liability and termed as "Advances from customer". The amounts billed on customer for work performed and are unconditionally due for payment i.e only passage of time is required before payment falls due, are disclosed in the Balance Sheet as trade receivables. The amount of retention money held by the customers pending completion of performance milestone is disclosed as part of contract asset and is reclassified as trade receivables when it becomes due for payment. Revenue from property development activities: (i) Effective April 1, 2018, Revenue from property development activities is recognised when performance obligation is satisfied, customer obtains control of the property transferred and a reasonable expectation of collection of the sale consideration from the customer exists. The costs incurred on property development activities are carried as "Inventories" till such time the aforesaid conditions are fulfilled. (ii) For the periods ended on or before March 31, 2018, the revenue from the property development activities in the nature of a construction contract is recognised based on the 'Percentage of completion method' (POC) when the outcome of the contract can be estimated reliably upon fulfillment of all the following conditions: 1. all critical approvals necessary for commencement of the project have been obtained; 2. contract costs for work performed (excluding cost of land/developmental rights and borrowing cost) constitute at least 25% of the estimated total contract costs representing a reasonable level of development; 3. at least 25% of the saleable project area is secured by contracts or agreements with buyers; and contract. Other operational revenue represents income earned from the activities incidental to the business and is recognised when the performance obligation is satisfied and right to receive the income is established as per the terms of the G. Commission income is recognised as and when the terms of the contract are fulfilled. F. Revenue from contracts for rendering of engineering design services and other services which are directly related to the construction of an asset is recognised on the same basis as stated in (B) supra. Depreciation is recognised using straight line method so as to write off the cost of the investment property less their residual values over their useful lives specified in Schedule II to the Companies Act, 2013 or in the case of assets where the useful life was determined by technical evaluation, over the useful life so determined. Depreciation method is reviewed at each financial year end to reflect the expected pattern of consumption of the future benefits embodied in the investment property. The estimated useful life and residual values are also reviewed at each financial year end and the effect of any change in the estimates of useful life/ residual value is accounted on prospective basis. Freehold land and properties under construction are not depreciated. Unbilled revenue represents value of services performed in accordance with the contract terms but not billed. Expected loss, if any, on the project is recognised as an expense in the period in which it is foreseen, irrespective of the stage of completion of the contract The costs incurred on property development activities are carried as "Inventories" till such time the outcome of the project cannot be estimated reliably and all the aforesaid conditions are fulfilled. When the outcome of the project can be ascertained reliably and all the aforesaid conditions are fulfilled, revenue from property development activity is recognised at cost incurred plus proportionate margin, using percentage of completion method. Percentage of completion is determined based on the proportion of actual cost incurred to date to the total estimated cost of the project. For the purpose of computing percentage of construction, cost of land, developmental rights and borrowing costs are excluded. at least 10% of the total revenue as per the agreements of sale or any other legally enforceable documents is realised at the reporting date in respect of each of the contracts and the parties to such contracts can be reasonably expected to comply with the contractual payment terms. 4. E. D. Revenue from rendering of services is recognised over time as and when the customer receives the benefit of the company's performance and the Company has an enforceable right to payment for services transferred. (Also refer to policy on depreciation, supra) An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss arising on derecognition of property is recognised in the Statement of Profit and Loss in the same period. Intangible assets are recognised when it is probable that the future economic benefits that are attributable to the asset will flow to the Company and the cost of the asset can be measured reliably. Intangible assets are stated at original cost net of tax/duty credits availed, if any, less accumulated amortisation and cumulative impairment. Administrative and other general overhead expenses that are specifically attributable to acquisition of intangible assets are allocated and capitalised as a part of the cost of the intangible assets. (ii) Post-employment benefits: A. B. Defined contribution plans: The Company's superannuation scheme, state governed provident fund scheme, employee state insurance scheme and employee pension scheme are defined contribution plans. The contribution paid/payable under such schemes is recognised during the period in which the employee renders the related service. Defined benefit plans: The employees' gratuity fund schemes and employee provident fund schemes managed by board of trustees established by the Company, the post-retirement medical care plan and the Company pension plan represent defined benefit plans. The present value of the obligation under defined benefit plans is determined based on actuarial valuation using the Projected Unit Credit Method. The obligation is measured at the present value of the estimated future cash flows using a discount rate based on the market yield on government securities of a maturity period equivalent to the weighted average maturity profile of the defined benefit obligations at the Balance Sheet date. Re-measurement, comprising actuarial gains and losses, the return on plan assets (excluding amounts included in net interest on the net defined benefit liability or asset) and any change in the effect of asset ceiling (if applicable) is recognised in Other Comprehensive Income and is reflected in Retained earnings and the same is not eligible to be reclassified to Profit or Loss. Defined benefit costs comprising current service cost, past service cost and gains or losses on settlements are recognised in the Statement of Profit and Loss as employee benefits expense. Interest cost implicit in defined benefit employee cost is recognised in the Statement of Profit and Loss under finance cost. Gains or losses on settlement of any defined benefit plan are recognised when the settlement occurs. Past service cost is recognised as expense at the earlier of the plan amendment or curtailment and when the company recognises related restructuring costs or termination benefits. In case of funded plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans to recognise the obligation on a net basis. (iii) Long term employee benefits: The obligation recognised in respect of long term benefits such as compensated absences, long service award etc. is measured at present value of estimated future cash flows expected to be made by the Company and is recognised in a similar manner as in the case of defined benefit plans vide (ii)(B) supra. LARSEN & TOUBRO Notes forming part of the Financial Statements (contd.) NOTE [1] (contd.) Employee benefits such as salaries, wages, short term compensated absences, expected cost of bonus, ex-gratia and performance-linked rewards falling due wholly within twelve months of rendering the service are classified as short term employee benefits and are expensed in the period in which the employee renders the related service. Significant Accounting Policies (contd.) (iv) Termination benefits: Termination benefits such as compensation under employee separation schemes are recognised as expense when the Company's offer of the termination benefit is accepted or when the Company recognises the related restructuring costs whichever is earlier. (I) Leases The determination of whether an agreement is, or contains, a lease is based on the substance of the agreement at the date of inception. (i) Finance leases: A. Assets taken under finance lease are capitalised at the commencement of the lease at the lower of the fair value or the present value of minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the outstanding liability for each period. B. Leases where the Company has substantially transferred all the risks and rewards of ownership of the related assets to the lessee are classified as finance leases. Assets given under a finance lease are recognised as a receivable at an amount equal to the net investment in the lease. Lease income is recognised over the period of the lease so as to yield a constant rate of return on the net investment in the lease. (ii) Operating leases: The leases which are not classified as finance lease are operating leases. A. B. Lease rentals on assets taken under operating lease are charged to the Statement of Profit and Loss on a straight line basis over the term of the relevant lease. Long term employee benefit costs comprising current service cost and gains or losses on curtailments and settlements, re-measurements including actuarial gains and losses are recognised in the Statement of Profit and Loss as employee benefit expenses. Interest cost implicit in long term employee benefit cost is recognised in the Statement of Profit and Loss under finance cost. (i) Short term employee benefits: (k) Employee Benefits When an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the revised estimate of its recoverable amount, such that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss is recognised for the asset (or cash generating unit) in prior years. A reversal of an impairment loss is recognised immediately in the Statement of Profit and Loss. Research and development expenditure on new products: (i) Expenditure on research is expensed under respective heads of account in the period in which it is incurred. (ii) Development expenditure on new products is capitalised as intangible asset, if all of the following can be demonstrated: A. the technical feasibility of completing the intangible asset so that it will be available for use or sale; B. the Company has intention to complete the intangible asset and use or sell it; C. the Company has ability to use or sell the intangible asset; D. E. F. the manner in which the probable future economic benefits will be generated including the existence of a market for output of the intangible asset or intangible asset itself or if it is to be used internally, the usefulness of intangible assets; the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and the Company has ability to reliably measure the expenditure attributable to the intangible asset during its development. Development expenditure that does not meet the above criteria is expensed in the period in which it is incurred. Intangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as "Intangible assets under development". Intangible assets are amortised on straight line basis over the estimated useful life. The method of amortisation and useful life are reviewed at the end of each financial year with the effect of any changes in the estimate being accounted for on prospective basis. Amortisation on impaired assets is provided by adjusting the amortisation charge in the remaining periods so as to allocate the asset's revised carrying amount over its remaining useful life. If recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, such deficit is recognised immediately in the Statement of Profit and Loss as impairment loss and the carrying amount of the asset (or cash generating unit) is reduced to its recoverable amount. The amount of value in use is determined as the present value of estimated future cash flows from the continuing use of an asset and from its disposal at the end of its useful life. For this purpose, the discount rate (pre-tax) is determined based on the weighted average cost of capital of the Company suitably adjusted for risks specified to the estimated cash flows of the asset. (ii) in the case of a cash generating unit (the smallest identifiable group of assets that generates independent cash flows), at the higher of the cash generating unit's net selling price and the value in use. in the case of an individual asset, at the higher of the net selling price and the value in use; and (i) Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is determined: (i) Intangible assets Significant Accounting Policies (contd.) Notes forming part of the Financial Statements (contd.) NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 322 321 As at the end of each financial year, the Company reviews the carrying amounts of its PPE, Investment property, intangible assets and investments in subsidiary, associate and joint venture companies to determine whether there is any indication that those assets have suffered an impairment loss. If such indication exists, PPE, investment property, intangible assets and investments are tested for impairment so as to determine the impairment loss, if any. Intangible assets with indefinite life are tested for impairment each year. (j) Impairment of assets NOTE [1] (contd.) the Company has a present obligation (legal or constructive) as a result of a past event; The asset is held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets; and Provision is measured using the cash flows estimated to settle the present obligation and when the effect of time value of money is material, the carrying amount of the provision is the present value of those cash flows. Reimbursement expected in respect of expenditure required to settle a provision is recognised only when it is virtually certain that the reimbursement will be received. Contingent liability is disclosed in case of: (ii) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and (iii) a reliable estimate can be made of the amount of the obligation. (ii) uncalled liability on shares and other investments partly paid; (i) Commitments are future liabilities for contractual expenditure, classified and disclosed as follows: (x) Commitments estimated amount of contracts remaining to be executed on capital account and not provided for; Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date. (ii) a present obligation arising from past events, when no reliable estimate is possible. Contingent assets are disclosed where an inflow of economic benefits is probable. a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation; and (i) Where the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under such contract, the present obligation under the contract is recognised and measured as a provision. 60 Class of assets Minimum useful life (in years) 3 Maximum useful life (in years) Buildings 1 Rental income derived from investment property Disclosure pursuant to Ind AS 40 "Investment Property" (i) Amount recognised in the Statement of Profit and Loss for investment property: Sr. No Particulars (b) Depreciation is provided based on useful life supported by the technical evaluation considering business specific usage, the consumption pattern of the assets and the past performance of similar assets: 2 Direct operating expenses arising from investment property that generated rental income (c) NOTE [1] (contd.) Class of assets 1.38 35.06 Significant Accounting Policies (contd.) 13.96 0.39 1.23 48.18 Add: Capital work-in-progress 5.80 20.08 474.98 (a) Additions during the year and capital work-in-progress include 1.38 crore (previous year: 5.80 crore) being borrowing cost capitalised in accordance with Accounting Standard (Ind AS) 23 on "Borrowing Costs". Asset class wise break-up of borrowing costs capitalised during the year is as follows: crore crore 2018-2019 2017-2018 Buildings (owned) 381.26 2018-19 Fair value of investment property: 2932.97 crore as at March 31, 2019 (2487.24 crore as at March 31, 2018) 179.92 Deductions As at 31-3-2019 Up to 31-3-2018 For the Business period Transfer $ Deductions Up to 31-3-2019 31-3-2019 As at Business Transfer $ As at 31-3-2018 195.64 23.16 218.80 160.23 14.16 174.39 44.41 Specialised softwares 2017-18 Additions Class of assets 171.63 67.41 64.32 523.16 (iii) The fair values of investment properties have been determined with the help of independent valuers on a case to case basis. Fair value of properties that are evaluated by independent valuers 2932.97 crore (2487.24 crore as at March 31, 2018). Valuation is based on government rates, market research, market trend and comparable values as considered appropriate. 333 33 As at 1-4-2018 334 Notes forming part of the Financial Statements (contd.) NOTE [4] Intangible assets & Intangible assets under development Cost Amortisation Book value crore NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 3.19 361.18 57.58 Notes forming part of the Financial Statements (contd.) NOTE [3] Investment Property LARSEN & TOUBRO Cost Depreciation Book Value Carrying value of Property, plant and equipment pledged as collateral for liabilities and/or commitments as at March 31, 2019 - 0.09 crore (as at March 31, 2018: 0.09 crore) crore As at 1-4-2018 Transferred Additions from/(to) PPE/ Inventory Deductions As at 31-3-2019 As at 31-3-2018 Transferred For the year from/(to) PPE/ Inventory Class of assets Upto 4 Useful life adopted (in years) Photographic equipment Assets deployed at project site Assets deployed at project site 10 3 15 3 D 15 Assets used in Power business: Category of Assets No 1. Plant & Equipment Sub-category of Assets Site facilities Useful life as per Schedule II (in years) Sr. 37.00 As at 31-3-2019 424.57 Total 523.16 7.62 (8.93) 111.88 409.97 308.40 48.18 (1.34) 13.54 48.79 35.41 474.98 Previous year 431.76 15.49 Deductions 48.79 15.49 31-3-2019 As at 31-3-2018 Land 50.41 7.08 0.43 5.14 (1.34) 13.54 52.78 50.41 Buildings 472.75 0.54 (9.36) 106.74 357.19 48.18 52.78 Technical knowhow 13.37 7.48 17591.01 18776.86 4.42 4.42 1539.51 2991.26 97.35 crore 136.64 21909.18 (a) Subsidiary companies (b) Associate companies (c) Joint venture companies (d) Other companies (B) Investment in preference shares (Debt portion) of (a) Subsidiary company 19232.29 888.68 crore crore Maximum useful life (in years) 3 6 3 10 3 crore 6 NOTE [5] Non-current Assets: Financial Assets - Investments Particulars (A) Investment in equity instruments LARSEN & TOUBRO As at 31-3-2019 As at 31-3-2018 Notes forming part of the Financial Statements (contd.) Minimum useful life (in years) (b) Joint venture company Details of Non-current Assets: Financial Assets - Investments 161.23 161.23 10 49,950 0.05 0.05 10 18,00,000 50,000 0.05 Kesun Iron & Steel Company Private Limited 10 9,500 0.01 0.01 L&T Aviation Services Private Limited 0.05 (C) Other investments in Subsidiary company 00 Hi-Tech Rock Products & Aggregates Limited Particulars 867.35 217.73 888.68 18.50 1085.08 20139.47 22994.26 Face value per unit 100 Number of units As at 31-3-2019 As at 31-3-2018 crore crore (A) Investments in fully paid equity instruments (a) Subsidiary companies: (i) Investments in fully paid equity instruments: L&T Valves Limited Bhilai Power Supply Company Limited As at 31-3-2019 99.06 New product design and development Technical knowhow 326.21 228.52 193.09 Previous year 339.67 115.05 1.38 263.01 63.20 456.10 0.68 263.01 Add: Intangible assets under development 171.69 200.77 400.21 393.86 215.00 47.33 $ Refer to Note [60(b)] 554.73 456.10 106.54 29.65 5. 43.02 63.52 69.41 New product design and 98.63 161.40 229.39 73.13 35.67 108.80 120.59 88.27 development Total 67.99 3. (a) Additions during the year Class of assets Total 67.99 67.99 67.99 48.53 48.53 30.64 98.63 New product design and development 48.64 115.05 (b) Depreciation is provided based on useful life supported by the technical evaluation considering business specific usage, the consumption pattern of the assets and the past performance of similar assets: Sr. No Class of assets 1. Specialised softwares 2. 66.41 crore 55.10 7.48 Internal development FY 2018-19 Acquired - external FY 2017-18 Total Internal development Acquired Total 55.10 - external 23.16 23.16 0.11 11.31 11.42 Technical knowhow 7.48 Specialised softwares Laboratory Equipment 3. 3 The above land and building is presented in assets of EAIC segment. [Note 47(a)]. The criteria for classifying the said land and building as held for sale is met after the reporting date, hence the same is not shown as held for sale in the financial statement as at reporting date. A The Company has signed an agreement with Gargi Brew Spirit Training Alliance Private Limited for assignment and sale of its leasehold land together with buildings and superstructures situated at Nashik, Maharashtra for a consideration of 11 crore (Book value as at March 31, 2019 0.62 crore). The memorandum of understanding is executed on April 6, 2019. $ Refer Note [60(b)] ** 0.38 crore pertains to foreign currency fluctuation 580.92 452.10 7152.85 6724.56 Add: Capital work-in-progress 10 102.51 0.98 0.45 0.43 102.51 6571.93 6272.46 102.51 15.79 165.33 3762.47 (1.19) 69.01 2928.29 211.59 LARSEN & TOUBRO NOTE [2] (contd.) Buildings (owned) Additions during the year and capital work-in-progress include 26.72 crore (previous year: 11.42 crore) being borrowing cost capitalised in accordance with Accounting Standard (Ind AS) 23 on "Borrowing Costs". Asset class wise break-up of borrowing costs capitalised during the year is as follows: (iii) ownership accommodations of 11.75 crore representing undivided share in properties at various locations. (previous year: of * 7.68 crore). ownership accommodations of 3.53 crore in respect of which the deed of conveyance is yet to be executed. (previous year: of 3.53 crore). 30.59 crore. (previous year: 29.90 crore). in proposed co-operative societies D. Notes forming part of the Financial Statements (contd.) in various co-operative societies: 0.36 crore (previous year: 0.36 crore) for which share certificates are yet to be issued. in various co-operative societies, shop-owners' associations and non-trading corporations: 65.75 crore, including 2615 shares of 50 each, 80 shares of 100 each. (previous year: in various co-operative societies, shop-owners' associations and non-trading corporations: 67.29 crore, including 2660 shares of 50 each, 232 shares of 100 each and 1 share of 250). C. B. (i) A. Cost of freehold land includes 1.27 crore (previous year: 1.27 crore) for which conveyance is yet to be completed. Cost of buildings includes ownership accommodations: b) a) in various apartments: 9.42 crore. (previous year: 9.42 crore). Plant and Equipment 196.61 231.95 20.36 14.98 26.25 284.45 10436.90 2928.29 982.53 2.39 135.23 9303.26 2011.58 984.77 36.73 Ships Other assets 127.01 136.78 20.13 97.52 0.86 36.73 14.21 4.72 234.30 81.74 35.05 53.73 208.75 Vehicles fixtures 84.92 0.24 0.24 69.36 61.24 1.59 29.77 35.34 18.93 17.80 56.36 8637.80 852.49 2.17 Previous year (6.03) 9303.26 1385.81 Total 231.95 I Assets 189.07 178.81 16.41 195.22 6.15 10.26 195.22 Aircraft 22.52 Sub total - Other 0.01 62.50 Total The average capitalisation rate for borrowing cost is 7.68 % (previous year: 7.24 %). Sr. No Category of Assets j) b. Estimated useful life of following assets is different than useful life as prescribed in schedule II of the Companies Act, 2013. NOTE [2] (contd.) Notes forming part of the Financial Statements (contd.) NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 332 Sub-category of Assets 331 14 Ships 7. 10 8 Owned Vehicles 6. 14 10 1. 2. Useful life adopted (in years) Useful life as per Schedule II (in years) No Sub-category of Assets Category of Assets Sr. Assets used in Heavy Engineering and Shipbuilding Business: Aircrafts A 18 8 20 Useful life adopted (in years) Useful life as per Schedule II (in years) Motor Cars Owned Vehicles 7 Class of assets 10 5. Out of its leasehold land at Hazira, the Company has given certain portion of land for the use to its joint venture company and the lease deed is under execution. i) h) Cost as at April 1, 2018 of individual assets has been reclassified wherever necessary. g) Owned assets given on operating lease have been presented separately under respective class of assets as "Leased out" pursuant to Ind AS 17 "Leases". f) Depreciation is provided based on useful life supported by the technical evaluation considering business specific usage, the consumption pattern of the assets and the past performance of similar assets. 1. e) 11.42 11.35 0.07 0.73 26.72 2017-2018 2018-2019 25.99 crore In addition to depreciation, obsolescence amounting to 6.35 crore (previous year: ₹ 4.54 crore) have been recognised in Profit and Loss during the year. Furniture and Fixture a. Maximum useful life (in years) 5 4 Office Equipment 4. 6 3 Computer Estimated useful life of the following assets is in line with useful life prescribed in schedule II of the Companies Act, 2013: Sr. No Asset Class Minimum useful life (in years) 3. 8 Plant and Equipment 2. 60 3 Buildings 1. 15 4. 72 0.32 5.53 118.52 4.10 87.20 (y) Non-current assets held for sale Other commitments related to sales/procurements made in the normal course of business are not disclosed to avoid excessive details. (iv) other non-cancellable commitments, if any, to the extent they are considered material and relevant in the opinion of management. (iii) funding related commitment to subsidiary, associate and joint venture companies; and Plant & Equipment General Boring/Rolling/Drilling/Milling 10-30 machines Non-current assets and disposal groups are classified as held for sale if their carrying amount is intended to be recovered principally through a sale (rather than through continuing use) when the asset (or disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sale of such asset (or disposal group) and the sale is highly probable and is expected to qualify for recognition as a completed sale within one year from the date of classification. Non-current assets and disposal groups classified as held for sale are measured at lower of their carrying amount and fair value less costs to sell. Modular Furnace Horizontal Autoclaves Load bearing structures Cranes 2. Roads Carpeted Roads-other than RCC 5 Other Furnaces 5-15 (z) Statement of Cash Flows (ii) non-cash items such as depreciation, provisions, unrealised foreign currency gains and losses; and As at 1-4-2018 Class of assets crore Property, Plant and Equipment & Capital work-in-progress NOTE [2] Notes forming part of the Financial Statements (contd.) NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 Statement of Cash Flows is prepared segregating the cash flows into operating, investing and financing activities. Cash flow from operating activities is reported using indirect method, adjusting the profit before tax excluding exceptional items for the effects of: (i) changes during the period in inventories and operating receivables and payables transactions of a non-cash nature; 330 The information in the financial statements of the prior period is restated from the date of business combination in case the business combination is approved by statutory authority in the subsequent period. Common control business combination where the Company is transferee is accounted using the pooling of interest method. Assets and liabilities of the combining entities are reflected at their carrying amounts and no new asset or liability is recognised. Identity of reserves of the transferor company is preserved by reflecting them in the same form in the Company's financial statements in which they appeared in the financial statement of the transferor company. The excess between the amount of consideration paid over the share capital of the transferor company is recognised as a negative amount and the same is disclosed as capital reserve on business combination. (ab) Business Combination The preparation of the financial statements in conformity with Ind AS requires that the management of the Company makes estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates include useful lives of property, plant and equipment & intangible assets, allowance for expected credit loss, future obligations in respect of retirement benefit plans, expected cost of completion of contracts, provision for rectification costs, fair value measurement etc. Difference, if any, between the actual results and estimates is recognised in the period in which the results are known. (aa) Key sources of estimation Cash and cash equivalents (including bank balances) shown in the Statement of Cash Flows exclude items which are not available for general use as at the date of Balance Sheet. (iii) all other items for which the cash effects are investing or financing cash flows. 329 Additions 15 10-30 No 1. Office Equipment Assets deployed at project site Useful life as per Schedule II (in years) 5 Useful life adopted (in years) 3 Sub-category of Assets 2. Assets deployed at project site 15 3 refrigeration equipment Canteen Equipment Assets deployed at project site 15 Air conditioning and 5-30 Category of Assets Assets used in Construction business: 50 10-30 5-15 B Assets used in Electrical & Automation business: Sr. Category of Assets Sr. Sub-category of Assets Useful life as per Schedule II (in years) Useful life adopted 1. Plant & Equipment General Specialized machine tools, dies, jigs, fixtures, gauges for electrical business 15 (in years) 5 C No 0.01 Business combination $ Foreign 15.01 11.13 116.37 2770.50 15.01 116.37 2769.07 1.43 2.11 1.23 0.20 6088.78 2157.98 717.76 19.72 186.06 Sub total- Plant & 5560.57 694.55 15.01 3302.59 3386.70 0.68 0.88 15.01 3303.27 3387.58 2.11 11.13 6086.67 2156.75 717.56 19.72 186.06 5558.46 694.55 Owned equipment Plant and Leased out Buildings A equipment 337.79 0.22 156.80 68.95 22.13 0.42 6.72 8.99 154.11 Furniture and 181.03 93.03 30.70 Computers 0.48 5.77 Office equipment 148.98 135.11 16.81 255.54 0.18 404.52 202.68 69.49 0.25 17.67 84.15 154.28 32.04 Cost/Valuation Trf (to)/from investment Currency Deductions property fluctuation 87.25 1870.97 1811.70 (1.19) 3.08 2.39 393.32 370.85 352.34 Freehold Land As at As at 31-3-2019 31-3-2018 Up to Up to 31-3-2018 31-3-2019 Up to 31-3-2019 0.43 property fluctuation investment Foreign For the Business period combination$ As at Up to 31-3-2019 31-3-2018 Book value Impairment Depreciation Trf (to)/from Currency Deductions 87.25 20.80 Leasehold ^ 2351.54 300.04 91.40 17.66 3.79 (6.46) 2198.99 159.96 783.45 453.31 4.53 701.96 787.98 3.51 1.02 0.43 Sub total - Land 456.82 352.39 81.49 82.46 701.96 370.85 4.53 86.02 3.51 1.02 85.97 0.05 20.80 4,56,00,000 LARSEN & TOUBRO 45.60 L&T Special Steels and Heavy Forgings Private Limited [Net of provision 419.28 crore (previous year: Nil)] 0.01 0.01 13,000 10 100 10 362.41 362.41 36,24,06,000 10 10 L&T Samakhiali Gandhidham Tollway Limited ₹ L&T Rajkot-Vadinar Tollway Limited [1000 (previous year: 1000)] 1906.40 1133.40 L&T-MHPS Turbine Generators Private Limited (i) Investments in fully paid equity instruments: (contd.) Brought forward crore crore 31-3-2018 100 41,92,84,000 419.28 L&T Transportation Infrastructure Limited 45.60 0.04 37,750 10 22.42 22.42 2,24,22,660 10 L&T-MHPS Turbine Generators Private Limited L&T-MHPS Boilers Private Limited (ii) Other equity investments: L&T MBDA Missile Systems Limited Raykal Aluminum Company Private Limited PNG Tollway Limited 0.82 0.82 27,82,736 10 L&T-Sargent & Lundy Limited 10.86 10.86 1,08,64,000 10 31-3-2019 As at As at As at 31-3-2019 L&T Infrastructure Development Projects Limited [Net of provision 1723 crore (previous year: 950 crore)] 15.03 15.03 1,50,30,000 10 100 10 100 10 100 10 ㅎㅎㅎ L&T Chennai-TADA Tollway Limited [1000 (previous year: * 1000)] L&T Halol-Shamlaji Tollway Limited [ 1000 (previous year: 1000)] L&T Howden Private Limited 4.42 4.42 4.42 4.42 9,000 100 7,35,000 10 10 18776.86 10 0.04 31,28,69,096 1746.48 per unit Face value Number of units Particulars Details of Non-current Assets: Financial Assets - Investments (contd.) NOTE [5] (contd.) Notes forming part of the Financial Statements (contd.) NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 338 337 1906.40 1133.40 Carried forward 119.39 119.39 11,93,91,000 10 L&T-MHPS Boilers Private Limited 25.50 25.50 2,55,00,000 10 L&T Kobelco Machinery Private Limited ^ 973.48 10 5,10,000 0.51 Tidel Park Limited [Note 45(f)] 10 300 40,00,000 65.58 64.27 VP Global Fibre and Yarns Private Limited [22,900 (previous year: 20,600)] New Vision Wind Power Private Limited [27,000 (previous year: Nil)] 100 229 ₹ 10 2,700 The New India Assurance Company Limited 10 6,24,996 11.93 22.28 ICICI Securities Limited Total (A)=(a)+(b)+(c)+(d) 5 8,13,720 19.74 50.00 97.35 100 136.64 (previous year: 30,000)] 0.10 15,54,00,000 78.33 L&T Special Steels & Heavy Forgings Private Limited - 6% Cumulative, non-convertible redeemable at par preference shares, December 8, 2025 [Net of provision 97.91 crore (previous year: Nil)] z 10 17,76,00,000 97.91 L&T Special Steels & Heavy Forgings Private Limited - 6% Cumulative, non-convertible redeemable at par preference shares, December 8, 2026 [Net of provision 84.41 crore (previous year: * Nil)] 10 14,20,80,000 84.41 260.65 Total (c) = (i)+(ii)+(iii) (d) Other companies: 1539.51 2991.26 International Seaport Dredging Limited [Net of provision 15.90 crore (previous year: 15.90 crore)] 10000 BBT Elevated Road Private Limited 10 15,899 1,00,000 0.10 Utmal Multi purpose Service Co-operative Society Limited (B Class) [30,000 17591.01 19232.29 L&T Special Steels & Heavy Forgings Private Limited - 6% Cumulative, 10 L&T Shipbuilding Limited -9% Non-cumulative, non-convertible redeemable at par preference shares, September 29, 2030 [Net of provision * 47.67 crore (previous year: Nil)] 177.98 25,00,00,000 10 300.25 42,18,60,000 10 77.26 11,00,00,000 10 L&T Shipbuilding Limited -9% Non-cumulative, non-convertible redeemable at par preference shares, August 10, 2030 [Net of provision ₹ 177.98 crore (previous year: Nil)] L&T Shipbuilding Limited -9% Non-cumulative, non-convertible redeemable at par preference shares, May 28, 2030 [Net of provision ₹300.25 crore (previous year: Nil)] ₹ (iii) Preference shares-(equity portion): 8.34 9.04 6.10 6.80 2.24 2.24 2722.27 1530.47 0.03 7,50,00,000 21909.18 5.57 L&T Shipbuilding Limited -9% Non-cumulative, non-convertible redeemable at par preference shares, December 8, 2030 Notes forming part of the Financial Statements (contd.) 1,28,70,000 10 L&T Shipbuilding Limited - 9% Non-cumulative, non-convertible redeemable at par preference shares, November 23, 2032 295.40 295.40 41,61,29,994 10 L&T Shipbuilding Limited - 9% Non-cumulative, non-convertible redeemable at par preference shares, November 19, 2032 276.24 276.24 38,80,00,000 10 L&T Shipbuilding Limited - 9% Non-cumulative, non-convertible redeemable at par preference shares, March 28, 2032 153.15 153.15 21,60,00,000 10 L&T Shipbuilding Limited -9% Non-cumulative, non-convertible redeemable at par preference shares, February 4, 2031 181.97 181.97 25,90,00,000 10 53.24 29.38 0.65 28.74 As at 31-3-2019 per unit Face value Particulars Number of units Details of Non-current Assets: Financial Assets - Investments (contd.) NOTE [5] (contd.) Notes forming part of the Financial Statements (contd.) NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 335 13652.09 12953.57 118.80 108.05 12,97,84,034 1 937.78 805.49 7,80,09,994 2 1000.05 1000.05 1,00,00,50,000 31-3-2019 10 As at 31-3-2018 1.06 1.05 625 SAR 1000 0.01 10,000 0.23 0.23 50,000 USD 1 Seawoods Realty Private Limited L&T Infrastructure Engineering Limited L&T Global Holdings Limited Larsen & Toubro (Saudi Arabia) LLC Larsen & Toubro LLC L&T Construction Machinery Limited 450 SAR 1000 Larsen & Toubro Hydrocarbon International Limited LLC [Net of provision ₹ 0.68 crore (previous year: 0.68 crore)] 13652.09 12953.57 (i) Investments in fully paid equity instruments: (contd.) Brought forward * crore crore As at 10 L&T Hydrocarbon Engineering Limited L&T Technology Services Limited (quoted) Larsen & Toubro Infotech Limited (quoted) Carried forward 40.36 2427.18 2,42,71,75,964 10 L&T Power Development Limited L&T Metro Rail (Hyderabad) Limited 82.82 82.82 12,00,00,000 10 3468.17 3468.17 1,27,75,20,203 10 L&T Construction Equipment Limited L&T Finance Holdings Limited (quoted) 50,000 10 L&T Cassidian Limited [Net of provision 0.05 crore (previous year: 0.05 crore)] 0.05 0.05 50,000 10 L&T Capital Company Limited 2206.98 40.36 10 3112.70 74,38,796 10 430.68 43,06,80,000 10 z L&T Shipbuilding Limited [Net of provision 430.68 crore (previous year: Nil)] L&T Electricals and Automation Limited 1999.55 1654.55 1,65,45,50,000 10 L&T Seawoods Limited 47.16 47.16 4,71,60,700 10 L&T Realty Limited 0.05 0.05 51,157 10 L&T Power Limited 3112.70 3,11,27,00,000 10 USD 100 21.85 10 130.00 130.00 13,00,00,000 10 500.00 500.00 50,00,00,000 10 L&T Hydrocarbon Engineering Limited -10% Non-cumulative, optionally convertible redeemable at par preference shares, February 6, 2029 L&T Hydrocarbon Engineering Limited -12% Non-cumulative, optionally convertible redeemable at par preference shares, October 19, 2030 L&T Hydrocarbon Engineering Limited -12% Non-cumulative, optionally convertible redeemable at par preference shares, March 30, 2031 L&T Uttaranchal Hydropower Limited - 10% Non-cumulative, optionally convertible redeemable preference shares, July 17, 2029 L&T Realty Limited - 12% Non-cumulative and optionally convertible redeemable at par preference shares, May 26, 2025 42.00 42.00 4,20,00,000 2 L&T Seawoods Limited -10% Non-cumulative, optionally convertible redeemable preference shares, September 3, 2022 42.25 42.25 4,22,50,000 2 L&T Seawoods Limited -10% Non-cumulative, optionally convertible redeemable preference shares, July 14, 2022 48.00 48.00 4,80,00,000 13,00,00,000 2 130.00 2 0.64 0.65 Ahmedabad-Maliya Tollway Limited [1000 (previous year: ₹1000)] (i) Investments in fully paid equity instruments: (c) Joint Venture companies: Magtorq Private Limited Gujarat Leather Industries Limited [Net of provision 0.56 crore (previous year: *0.56 crore)] (b) Associate companies: Total (a) = (i)+(ii)+(iii)+(iv) - ₹ L&T Shipbuilding Limited [Net of provision 28.74 crore (previous year: Nil)] L&T Aviation Services Private Limited (iv) Other equity investments: 3257.60 3507.00 648.30 648.30 64,83,00,000 10 891.05 1140.45 1,14,04,50,000 130.00 36,00,000 80,000 L&T Seawoods Limited -10% Non-cumulative, optionally, convertible redeemable preference shares, May 12, 2022 826.00 132.00 18,93,29,994 10 L&T Shipbuilding Limited - 9% Non-cumulative, non-convertible redeemable at par preference shares, December 19, 2032 9.16 9.17 z L&T Shipbuilding Limited -12% Cumulative, non-convertible redeemable at par preference shares, April 16, 2030 [Net of provision 77.26 crore (previous year: Nil)] 37.06 5,00,00,000 10 L&T Shipbuilding Limited -12% Cumulative, non-convertible redeemable at par preference shares, June 24 2029 [Net of provision 37.06 crore (previous year: Nil)] 67.78 9,00,00,000 10 L&T Shipbuilding Limited -12% Cumulative, non-convertible redeemable at par preference shares, October 22, 2028 [Net of provision 67.78 crore (previous year: Nil)] (ii) Preference shares-(equity portion): 13728.39 13029.87 Seawoods Retail Private Limited 53.16 53.16 21.85 132.00 826.00 1053.49 (iii) Preference share considered equity as per terms: (iii) Preference share considered Equity as per terms: (contd.) Brought forward crore crore As at 31-3-2018 As at 31-3-2019 As at 31-3-2019 Face value per unit Number of units LARSEN & TOUBRO Particulars Details of Non-current Assets: Financial Assets - Investments (contd.) NOTE [5] (contd.) Notes forming part of the Financial Statements (contd.) 336 826.00 826.00 Carried forward redeemable preference shares, March 30, 2022 826.00 826.00 82,60,00,000 2 L&T Seawoods Limited -10% Non-cumulative, optionally convertible 1761.49 non-convertible redeemable at par preference shares, December 8, 2024 [Net of provision 78.33 crore (previous year: Nil)] (a) Subsidiary company: Notes forming part of the Financial Statements (contd.) **Previous period included provision of 0.01 crore. NOTE [6] Non-current Assets: Financial Assets - Loans As at 31-3-2019 As at 31-3-2018 Particulars crore crore Unsecured security deposits, considered good: Less: Allowance for expected credit loss Previous period included provision of ₹ 0.01 crore. 104.71 crore 28.30 26.15 76.41 78.29 Unsecured long term loan and advances to related parties: Subsidiary companies, cosidered good [Note 37 & 38 (A)] 454.50 225.50 Joint venture companies, considered good [Note 37 & 38 (A)] Less: Allowance for expected credit loss crore 104.44 1463.59 * ^ Subsequent to the year under review, the Company has divested its entire stake in L&T Kobelco Machinery Private Limited to Kobe Steel, Ltd. on April 17, 2019. Since the criteria for classifying the said investment as held for sale is not met as at reporting date, the same has not been classified as held for sale in the financial statements. 340 NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 Notes forming part of the Financial Statements (contd.) NOTE [5] (contd.) Details of Non-current Assets: Financial Assets - Investments (contd.) Details of quoted / unquoted investments: Particulars (a) Aggregate amount of quoted investments and market value thereof; Book Value (b) Aggregate amount of unquoted investments; The above investment forms part of the unallocable corporate assets. [Note 47(a)]. Book Value As at 31-3-2019 As at 31-3-2018 crore crore 4413.37 53882.38 4597.03 50537.78 15726.10 3800.71 18397.23 967.21 (c) Aggregate amount of Impairment in value of investments 1379.11 263.00 1200.59 174.27 6.02 577.00 438.54 Notes forming part of the Financial Statements (contd.) 7(a) Particulars of cash and bank balances not available for immediate use LARSEN & TOUBRO crore Sr. Particulars 19.45 No. As at 31-3-2018 1 2 Amount received (including interest accrued thereon) from customers of property development business - to be handed over to housing society on its formation Contingency deposits (including interest accrued thereon) received from customers of property development business towards their sales tax liability - to be refunded /adjusted depending on the outcome of the legal case 25.25 24.51 3 NOTE [8] Other bank balances (including interest accrued thereon) not available for immediate use being in the nature of security offered for bids submitted, loans availed, acquisition, etc. Total Less: Amount reflected under current assets [Note 13] As at 31-3-2019 Advance towards equity commitment -Subsidiary company [Note 38(B)] Other receivables 1.99 10.54 1379.11 Other loans, considered good: Secured Unsecured 0.08 1.07 1732.65 0.23 1.00 1684.13 NOTE [7] Non-current Assets: Financial Assets - Others Particulars Cash and bank balances not available for immediate use [Note 7(a)] Forward contract receivables As at 31-3-2019 As at 31-3-2018 crore crore 289.76 319.52 102.43 91.54 Embedded derivative receivables 0.02 Premium receivable on financial guarantee contracts 339 Particulars 22994.26 Total Non Current Investment = (A)+(B)+(C) 43.48 41.93 L&T Shipbuilding Limited -9% Non-cumulative, non-convertible redeemable at par preference shares, May 28, 2030 10 42,18,60,000 165.00 159.32 L&T Shipbuilding Limited -9% Non-cumulative, non-convertible redeemable at par preference shares, August 10, 2030 10 25,00,00,000 11,00,00,000 95.96 L&T Shipbuilding Limited -9% Non-cumulative, non-convertible redeemable at par preference shares, September 29, 2030 10 7,50,00,000 28.42 27.55 L&T Shipbuilding Limited -9% Non-cumulative, non-convertible redeemable at par preference shares, December 8, 2030 10 25,90,00,000 96.42 93.67 92.87 L&T Shipbuilding Limited -9% Non-cumulative, non-convertible redeemable at par preference shares, February 4, 2031 10 20.36 NOTE [5] (contd.) Details of Non-current Assets: Financial Assets - Investments (contd.) Particulars LARSEN & TOUBRO Number of units Face value per unit As at 31-3-2019 As at 31-3-2019 As at 31-3-2018 L&T Shipbuilding Limited -12% Cumulative, non-convertible redeemable at par preference shares, April 16, 2030 crore (B) Investment in preference shares (Debt portion) of: L&T Shipbuilding Limited -12% Cumulative, non-convertible redeemable at par preference shares, October 22, 2028 10 9,00,00,000 40.73 38.70 L&T Shipbuilding Limited -12% Cumulative, non-convertible redeemable at par preference shares, June 24 2029 10 5,00,00,000 21.29 crore 10 21,60,00,000 79.23 10 15,54,00,000 78.75 L&T Special Steels & Heavy Forgings Private Limited - 6% Cumulative, non-convertible redeemable at par preference shares, December 8, 2025 [Net of provision 79.12 crore (previous year: ₹ Nil)] 10 17,76,00,000 80.89 L&T Special Steels & Heavy Forgings Private Limited - 6% Cumulative, non-convertible redeemable at par preference shares, December 8, 2026 [Net of provision 56.28 crore (previous year: Nil)] non-convertible redeemable at par preference shares, December 8, 2024 [Net of provision 77.77 crore (previous year: * Nil)] 10 Total - (b) 58.09 217.73 888.68 1085.08 Total - (B) (C) Other investments: Subsidiary companies: In limited liability partnership: L&T Geo structure LLP Total - (C) 14,20,80,000 L&T Special Steels & Heavy Forgings Private Limited - 6% Cumulative, (b) Joint Venture company: 867.35 77.11 L&T Shipbuilding Limited - 9% Non-cumulative, non-convertible redeemable at par preference shares, March 28, 2032 10 38,80,00,000 127.74 126.12 L&T Shipbuilding Limited - 9% Non-cumulative, non-convertible redeemable at par preference shares, November 19, 2032 10 41,61,29,994 128.45 127.95 L&T Shipbuilding Limited - 9% Non-cumulative, non-convertible redeemable at par preference shares, November 23, 2032 10 1,28,70,000 3.97 3.95 L&T Shipbuilding Limited - 9% Non-cumulative, non-convertible redeemable at par preference shares, December 19, 2032 10 18,93,29,994 57.99 57.82 Total - (a) 888.68 18.50 18.50 20139.47 Market Value LARSEN & TOUBRO Capital advances: 136.81 110.64 1,037 1000000 10.75% The Tata Power Company Limited NCD August 21, 2072 8.20% PFC Limited Tax Free Bonds February 01, 2022 8.46% PFC Limited Tax Free Bonds August 30, 2028 1.44% Inflation Indexed Bonds Junuary 05, 2023 (iii) Other debentures and bonds: 769.84 741.94 260.36 253.05 2,500 1000000 8.60% LTIDPL NCD December 26, 2026 Total- (ii) 45.35 28.36 250 1000000 41.78 108.82 960 1000000 1000 39.64 3,54,355 72.17 8.65% BOB Basel III Perpetual Bonds Series IX August 11, 2022 20.71 1000000 9.48% BOB Basel III Perpetual Bonds Series V January 09, 2020 9.70 39.26 370 1000000 9.87 8.32 79,162 1000 8.41% NTPC Limited Tax Free Bonds SR-1A December 16, 2023 8.46% REC Limited Tax Free Bonds SR-3B August 29, 2028 50.71 55.03 50,00,000 100 3.74 7.11 67 1000000 37.36 350 1000000 46.39 Notes forming part of the Financial Statements (contd.) 292.58 180.96 37.24 35.03 310 1000000 33.95 31.94 290 1000000 32.55 31.00 280 1000000 31.08 30.19 270 1000000 27.63 26.96 NOTE [10] (contd.) Details of Current Assets: Financial Assets - Investments (contd.) LARSEN & TOUBRO Number of units 410 1000000 46.92 44.08 390 1000000 43.25 40.64 360 1000000 1000000 39.60 9.50% Kudgi Transmission Limited SR-Q NCD April 25, 2034 9.50% Kudgi Transmission Limited SR-R NCD April 25, 2035 9.50% Kudgi Transmission Limited SR-S NCD April 25, 2036 9.50% Kudgi Transmission Limited SR-T NCD April 25, 2037 9.50% Kudgi Transmission Limited SR-U NCD April 25, 2038 9.50% Kudgi Transmission Limited SR-V NCD April 25, 2039 9.50% Kudgi Transmission Limited SR-W NCD April 25, 2040 292.58 180.96 (ii) Joint venture companies: (contd.) Brought forward As at 31-3-2018 As at 31-3-2019 As at 31-3-2019 per unit Face value Particulars 1000000 240 10.40 1000000 29.12 25 28.63 25 28.63 25 28.60 25 28.58 25 28.14 25 22222 5555555 10000000 28.80 25 10000000 10000000 10000000 10000000 10000000 10000000 10000000 10000000 28.35 25 10000000 25 28.35 26.87 26.92 922.53 757.92 Ecap Equities Limited SR- L9K801C January 01, 2020 Ecap Equities Limited SR- L9K801D January 02, 2020 Ecap Equities Limited SR- H9G801A August 23, 2019 Ecap Equities Limited SR- G9G806A August 26, 2019 Ecap Equities Limited SR- BOA901A February 17, 2020 Ecap Equities Limited SR- BOA9011B February 18, 2020 Ecap Equities Limited SR- BOB905A March 13, 2020 Ecap Equities Limited SR- BOB905B March 16, 2020 Ecap Equities Limited SR- BOB905C March 17, 2020 Ecap Equities Limited SR- BOB905D March 18, 2020 (iii) Other debentures and bonds: (contd.) Brought forward As at 31-3-2018 31-3-2019 As at As at 31-3-2019 per unit Face value Particulars Number of units Details of Current Assets: Financial Assets - Investments (contd.) NOTE [10] (contd.) Notes forming part of the Financial Statements (contd.) NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 344 343 922.53 757.92 Carried forward 25 25 10000000 28.35 26.59 10000000 26.59 10000000 26.68 10000000 26.68 10000000 26.68 10000000 26.68 10000000 26.03 1000000 103.68 105.52 1,000 1000000 54.23 55.34 500 10000000 26.59 10000000 26.59 25 10000000 25.70 10000000 25.70 10000000 26.40 10000000 Ecap Equities Limited SR-B9B803B March 12, 2019 Ecap Equities Limited SR-B9B804A March 12, 2019 Ecap Equities Limited SR-B9B804B March 13, 2019 Ecap Equities Limited SR-G9G806B August 27, 2019 Ecap Equities Limited SR-G9G806C August 28, 2019 Ecap Equities Limited SR-G9G806D August 29, 2019 Ecap Equities Limited SR-G9H804A September 02, 2019 Ecap Equities Limited SR-G9H804B September 03, 2019 Ecap Equities Limited SR-G9H804C September 04, 2019 Ecap Equities Limited SR-G9H804D September 05, 2019 Ecap Equities Limited SR-19J804A November 11, 2019 Ecap Equities Limited SR-19J804B November 12, 2019 Ecap Equities Limited SR-19J804C November 13, 2019 Ecap Equities Limited SR-L9K801A December 30, 2019 Ecap Equities Limited SR-L9K801B December 31, 2019 26.40 9.08% Union Bank Sr-XXIV Perpetual Bond May 03, 2022 9.00% YES Bank Limited Pertetual October 18, 2022 9.50% YES Bank Limited AT1 Pertetual December 23, 2021 Ecap Equities Limited SR-B9A801A March 04, 2019 Ecap Equities Limited SR-B9A801B March 05, 2019 Ecap Equities Limited SR-B9A801C March 06, 2019 Ecap Equities Limited SR-B9A801D March 07, 2019 Ecap Equities Limited SR-B9B801A March 06, 2019 Ecap Equities Limited SR-B9B801B March 07, 2019 Ecap Equities Limited SR-B9B801C March 08, 2019 Ecap Equities Limited SR-B9B801D March 11, 2019 Ecap Equities Limited SR-B9B802A March 11, 2019 Ecap Equities Limited SR-B9B802B March 12, 2019 10000000 26.80 10000000 Ecap Equities Limited SR-B9B802D March 14, 2019 26.80 10000000 Ecap Equities Limited SR-B9B802C March 13, 2019 26.80 10000000 26.80 10000000 Ecap Equities Limited SR-B9B803A March 11, 2019 10000000 1000000 25.84 341 Note: During the year 1.09 crore (previous year: 12.87 crore) was recognised as expense towards write-down of inventories 2500.05 986.40 3.81 3220.44 1334.97 Property development related work-in-progress 3.69 Loose tools (previous year: 3.61 crore)] 68.70 118.89 Stores and spares [include goods-in-transit 2.10 crore (previous year: 26.31 crore)] 285.20 386.27 Stock-in-trade [include goods-in-transit 38.79 crore 154.24 230.41 Finished goods 342 333.96 NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 NOTE [10] 1070.80 2068.19 2138.76 1631.69 1298.35 1123.75 769.84 741.94 273.07 crore 1205.99 As at 31-3-2018 crore crore 924.53 As at 31-3-2019 crore Details of Current Assets: Financial Assets - Investments (C) Mutual funds (iii) Other debentures & bonds (ii) Joint venture companies (i) Subsidiary companies (B) Debentures and bonds (A) Government and trust securities Particulars Current Assets: Financial Assets - Investments Notes forming part of the Financial Statements (contd.) 372.92 Manufacturing work-in-progress (previous year: * 56.16 crore)] crore crore As at 31-3-2018 As at 31-3-2019 319.52 289.76 193.97 4133.80 513.49 4423.56 464.80 4372.34 24.18 25.97 Current Assets: Inventories NOTE [9] Current tax receivable (net) Amount reflected under other financial assets - non-current [Note 7] Other non-current assets Particulars Advance recoverable other than in cash 1.84 7.84 19.29 28.28 63.10 144.09 Construction materials [include goods-in-transit 114.39 crore (previous year: 17.19 crore)] 286.15 296.27 Components [include goods-in-transit 19.29 crore (previous year: * 2.46 crore)] 318.49 332.93 4694.98 crore As at 31-3-2018 As at 31-3-2019 Raw materials [include goods-in-transit 14.83 crore Particulars 3093.34 3347.25 1652.22 1690.08 1405.00 1636.04 crore 26.81 4344.98 Particulars (B) Debentures and bonds (quoted): 1205.99 924.53 99.60 104.99 193.82 888 100 7.59% Government of India Bonds 2029 Total - (A) 100 7.80% Government of India Bonds 2020 100 6.79% Government of India Bonds 2029 100.89 100 6.35% Government of India Bonds 2020 34.65 139.04 1,33,00,000 100 7.80% Government of India Bonds 2020 (i) Subsidiary companies: 9.69 9.50% L&T Metro Rail (Hyderabad) Limited SR-F NCD November 26, 2030 9.55% L&T Metro Rail(Hyderabad) Limited SR-F NCD September 28, 2030 Total- (i) 1,500 230 1000000 23.94 1000000 22.75 20.45 19.25 16.93 | | | | 1000000 1000000 8.80% Kudgi Transmission Limited SR-H NCD April 25, 2025 8.80% Kudgi Transmission Limited SR-I NCD April 25, 2026 8.80% Kudgi Transmission Limited SR-J NCD April 25, 2027 9.14% Kudgi Transmission Limited SR-K NCD April 25, 2028 9.14% Kudgi Transmission Limited SR-L NCD April 25, 2029 9.14% Kudgi Transmission Limited SR-M NCD April 25, 2030 9.14% Kudgi Transmission Limited SR-N NCD April 25, 2031 9.14% Kudgi Transmission Limited SR-O NCD April 25, 2032 9.50% Kudgi Transmission Limited SR-P NCD April 25, 2033 Carried forward 1000000 1000000 8.80% Kudgi Transmission Limited SR-F NCD April 25, 2023 8.80% Kudgi Transmission Limited SR-G NCD April 25, 2024 (ii) Joint venture companies: 273.07 110.46 1,000 1000000 162.61 1000000 202.02 2,10,00,000 100 100 24.97 100 8.28% Government of India Bonds 2027 9.20% Government of India Bonds 2030 79.57 100 8.33% Government of India Bonds 2026 21.09 100 8.15% Government of India Bonds 2022 5.29 100 8.28% Government of India Bonds 2032 (A) Government and trust securities (quoted): * crore crore As at 31-3-2018 As at 31-3-2019 As at 31-3-2019 per unit ₹ Face value 198.93 8.33% Government of India Bonds 2026 100 75,00,000 6.79% Government of India Bonds 2029 10.14 10.32 10,00,000 100 7.59% Government of India Bonds 2026 293.97 293.64 2,45,00,000 100 Number of units 9.23% Government of India Bonds 2043 1,77,84,000 100 9.20% Government of India Bonds 2030 12.41 100 6.90% Oil Mktg Cos GOI Special Bonds 2026 15.98 100 8.32% Government of India Bonds 2032 80.47 199.04 Secured 25 10000000 Terms: A. B. The grant of options to the employees under the stock option schemes is on the basis of their performance and other eligibility criteria. The options are vested equally over a period of 4 years [5 years in the case of series 2006(A)], subject to the discretion of the management and fulfillment of certain conditions. Options can be exercised anytime within a period of 7 years from the date of grant and would be settled by way of issue of equity shares. Management has discretion to modify the exercise period. Other current assets NOTE [16] Notes forming part of the Financial Statements (contd.) 3441.59 156.71 156.71 129.60 27.11 1995.18 115.59 Less: Allowance for expected credit loss 115.59 27.11 88.48 Other loans and advances Deferred credit sale of ships Doubtful advances: i. Embedded derivative receivable (h) Stock option schemes (f) The aggregate number of equity shares allotted as fully paid up by way of bonus shares in immediately preceding five years ended March 31, 2019 are 46,67,64,755 (previous period of five years ended March 31, 2018: 77,50,59,331 shares). Number of equity shares to be issued as * crore (at face value) fully paid 42,65,623@ 0.85* 0.675% 5 years & 1 day US$ denominated foreign currency convertible bonds (FCCB) ## 95,20,455 1.90** 95,20,455@ 1.90** * The equity shares will be issued at a premium of 71.99 crore (previous year: 94.42 crore) ** The equity shares will be issued at a premium of ₹1214.50 crore (previous year: by the bond holders 1214.50 crore) on the exercise of options # Note 17(h)(i) for terms of employee stock option schemes ## Note 19(b) for terms of foreign currency convertible bonds @ The number of options have been adjusted consequent to bonus issue wherever applicable (g) The aggregate number of equity shares issued pursuant to contract, without payment being received in cash in immediately preceding last five years ended on March 31, 2019 – Nil (previous period of five years ended March 31, 2018: Nil). Forward contract receivable 23.27 270.73 992.33 0.27 18.20 678.04 1293.86 0.15 914.75 62.27 5.89 5.07 5.89 5.07 295.82 316.69 0.45 0.45 296.27 crore crore crore crore 317.14 As at 31-3-2018 As at 31-3-2019 As at 31-3-2018 Particulars crore 4.34 755.52 2387.73 12.59 509.92 8.07 730.02 734.58 54.21 53.95 0.80 As at 31-3-2018 4.94 675.69 Premium receivable on financial guarantee contracts Advances recoverable in cash Joint venture companies Associate companies Subsidiary companies Advances to related parties: crore crore crore 700.51 As at 31-3-2019 0.58* crore (at face value) 44090.65 2.59 6.99 6.99 40499.93 As at 31-3-2019 Number of crore shares As at 31-3-2018 Number of shares crore 1,62,50,00,000 325.00 1,62,50,00,000 325.00 Issued, subscribed and fully paid up: Equity shares of 2 each 1,40,27,29,385 280.55 1,40,13,69,456 280.27 (b) Reconciliation of the number of equity shares and share capital: 2018-19 3878.62 93.56 2017-18 36525.16 25587.80 10937.36 As at 31-3-2019 As at 31-3-2018 crore crore crore crore Contract Assets [Refer Note 48(d)] Due from customers (construction and project related activity) Retention money including unbilled revenue 28277.43 11953.54 Advance recoverable other than in cash Government grants receivable Others Doubtful other loans and advances Less: Provision for doubtful advances NOTE [17] Equity share capital (a) Share capital authorised, issued, subscribed and paid up: Authorised: Equity shares of 2 each Particulars 7.00 7.00 40230.97 3770.60 89.08 Particulars Number of shares *crore Name of the shareholders Life Insurance Corporation of India As at 31-3-2019 Number of Shareholding As at 31-3-2018 Number of Shareholding shares % shares % 24,66,76,682 17.59 24,63,52,777 17.58 12.27 17,21,28,421 12.28 L&T Employees Welfare Foundation 17,21,28,421 (e) Shares reserved for issue under options outstanding on un-issued share capital: Particulars Employee stock options granted and outstanding # As at 31-3-2019 Number of equity shares to be issued as fully paid (d) Shareholder holding more than 5% of equity shares: Equity share capital (contd.) NOTE [17] (contd.) Notes forming part of the Financial Statements (contd.) Number of shares crore Issued, subscribed and fully paid up equity share outstanding at the beginning of the year Add: Shares issued on exercise of employee stock options during the year Add: Shares issued as bonus on July 15, 2017 1,40,13,69,456 13,59,929 280.27 0.28 93,29,65,803 186.59 16,38,898 46,67,64,755 28,85,240 0.33 Issued, subscribed and fully paid up equity shares outstanding at the end of the year 1,40,27,29,385 280.55 1,40,13,69,456 280.27 (c) Terms/rights attached to equity shares: The Company has only one class of share capital, i.e., equity shares having face value of ₹2 per share. Each holder of equity share is entitled to one vote per share. 347 348 NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 93.35 10000000 Current Assets: Financial Assets - Others Unsecured long term loans and advances to related parties: Subsidiary companies, considered good [Note 37&38 (A)] Joint venture companies, considered good [Note 37&38 (A)] Other secured loans, considered good 2,48,95,439 100 51.53 1,98,02,764 10 295.89 10 L&T Midcap Fund-Growth-Direct Kotak Emerging Equity-Direct-Growth L&T Emerging Businesses Fund-Direct Plan-Growth JM Equity Fund Monthly Dividend Payout 548.08 7,59,81,604 100 Aditya Birla Sun Life Corporate Bond Fund-Direct-Growth 514.42 28,01,47,507 100 571.42 10 JM Balanced Fund Direct Plan-Annual Dividend Payout Option L&T Short Term Bond Fund-Direct Growth 103.98 203.48 100 104.59 HSBC Large & Midcap Equity Fund-Growth-Direct Total - (C) 20.06 2,00,000 10 AXIS Overnight Fund-Direct-Growth 52.09 66,98,911 10 Kotak Small Cap Fund-Direct-Growth 155.97 50,48,149 100 Aditya Birla Sun Life Midcap Fund-Direct Plan-Growth 40.81 4,00,00,000 10 LIC MF Short Term Debt Fund-Direct Plan-Growth 15.16 1,50,00,000 10 LIC MF Arbitrage Fund-Direct Plan-Growth 73,29,229 10 JM Arbitrage Advantage Fund-Direct-Monthly Dividend Payout (C) Mutual funds (unquoted): 25 26.33 26.65 25 26.77 55555555555 10000000 Ecap Equities Limited SR- BOB905E March 19, 2020 Ecap Equities Limited SR- BOB905F March 20, 2020 6.86% IIFCL Tax Free Bonds March 26, 2023 25 10000000 25 10000000 10000000 25 10000000 25 10000000 25 10000000 10000000 25 26.56 26.78 26.78 26.21 2068.19 2138.76 1298.35 1123.75 348.06 35.64 3,50,000 1000 7.18% IRFC Limited Tax Free Bonds February 19, 2023 Total- (iii) 27.76 10 13.16 1000 26.11 25 10000000 26.21 25 26.21 26.21 26.21 25 1,35,000 NOTE [15] 2,50,00,000 1631.69 647.64 crore Particulars As at 31-3-2019 Current Assets: Financial Assets - Other bank balances NOTE [13] Earmarked balances with banks-unclaimed dividend Fixed deposits with banks 3183.75 948.17 2.37 435.01 crore 1798.20 As at 31-3-2018 2733.41 2.04 694.77 174.42 crore 1862.18 As at 31-3-2019 190.00 22917.45 28216.82 84.64 185.06 As at 31-3-2018 869.24 Unsecured security deposits, credit impaired Less: Allowance for expected credit loss Less: Allowance for expected credit loss Unsecured security deposits, considered good Particulars Current Assets: Financial Assets - Loans NOTE [14] Notes forming part of the Financial Statements (contd.) NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 346 345 * Real Estate (Regulation and Development) Act, 2016 1134.31 4866.08 193.97 4133.80 Cash and bank balances not available for immediate use [Note 7(a)] 0.03 Margin money deposits with banks 7.38 Earmarked balances with banks-Section 4(2)(1)(D) RERA* 63.69 crore 25.00 787.73 1044.25 859.19 Notes forming part of the Financial Statements (contd.) 1070.80 1631.69 Book Value (accounted based on NAV) (b) Aggregate amount of unquoted current investments: 3274.18 3274.18 3063.29 3063.29 Market Value Book Value (a) Aggregate amount of quoted current investments and market value thereof: crore As at 31-3-2018 crore As at 31-3-2019 Particulars Details of quoted/unquoted investments: 4344.98 4694.98 Total Current Investments (A)+(B)+ (C) 1070.80 NOTE [11] Current Assets: Financial Assets - Trade receivables Particulars Considered good Unsecured 22727.45 28031.76 1437.24 1411.31 crore crore 24164.69 crore crore 29443.07 As at 31-3-2018 As at 31-3-2019 977.73 Unsecured Fixed deposits with banks (maturity less than 3 months) Cash on hand Cheques and draft on hand Balance with banks Particulars Current Assets: Financial Assets - Cash and cash equivalents NOTE [12] Less: Allowance for expected credit loss Credit Impaired Less: Allowance for expected credit loss LARSEN & TOUBRO crore Options exercised prior to bonus crore 520.39 48893.98 54.93 (7.24) 52270.17 102.16 59.62 (12.34) 4.17 114.50 55.45 (0.37) 14250.01 17527.67 5.69 25395.78 25507.91 458.94 440.26 108.59 106.91 211.51 (102.92) 177.63 (70.72) 8363.02 * (6.36) ** # As at 31-3-2018 crore As at 31-3-2019 19(a) (i) Secured redeemable non-convertible fixed rate debentures (privately placed): Finance lease Term loan from banks [Note 19(c)] Redeemable non-convertible inflation linked debentures [Note 19(a)(iii)] 0.675% Foreign currency convertible bonds [Note 19(b)] Redeemable non-convertible fixed rate debentures [Note 19(a)(ii)] Unsecured: Particulars Non-current liabilities: Financial liabilities-Borrowings NOTE [19] Notes forming part of the Financial Statements (contd.) NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 352 351 ## Equity component of foreign currency convertible bonds: Pursuant to Ind AS 32, Foreign Currency Convertible Bonds (FCCB) issued by the Company are split into equity and liability component and presented under other equity and financial liabilities respectively. General Reserve: The Company created a General reserve in earlier years pursuant to the provisions of the Companies Act, 1956 where in certain percentage of profits was required to be transferred to General reserve before declaring dividends. As per Companies Act 2013, the requirements to transfer profits to General reserve is not mandatory. General reserve is a free reserve available to the Company. Debenture redemption reserve (DRR): The Company has issued redeemable non-convertible debentures and created DRR out of the profits of the Company in terms of the Companies (Share capital and Debenture) Rules, 2014 (as amended). The Company is required to maintain a DRR of 25% of the value of debentures issued, either by a public issue or on a private placement basis. The amounts credited to the DRR is not to be utilised by the Company except to redeem debentures. Capital reserve on business combination: It arises on transfer of business between entities under common control. It represents the difference, between the amount recorded as share capital issued plus any additional consideration in the form of cash or other assets and the amount of share capital of the transferor [refer to note 1(ab)]. Capital Reserve: It represents the gains of capital nature which mainly include the excess of value of net assets acquired over consideration paid by the Company for business amalgamation transactions in earlier years. Λ crore 10.52 10.52 (6.36) Share application money pending allotment Particulars Other equity NOTE [18] Notes forming part of the Financial Statements (contd.) (j) During the year ended March 31, 2019, the Company paid the final dividend of 16 per equity share for the March 31, 2018 amounting to 2243.18 crore and dividend distribution tax of 353.60 crore. (k) On May 10, 2019, the Board of Directors has recommended the final dividend of 18 per equity share for the year ended March 31, 2019 subject to approval of shareholders. On approval, the total dividend payment based on number of shares outstanding as at March 31, 2019 is expected to be ₹2524.91 crore and the payment of dividend distribution tax is expected to be 233.66 crore. year ended The Company continues its policy of a conservative capital structure which has ensured that it retains the highest credit rating even amidst an adverse economic environment. Low gearing levels also equip the Company with the ability to navigate business stresses on one hand and raise growth capital on the other. This policy also provides flexibility of fund raising options for future, which is especially important in times of global economic volatility. The gross debt equity ratio is 0.19:1 as at March 31, 2019 (as at March 31, 2018 0.21:1). (i) Capital Management: The balance in share options (net) account as at March 31, 2019 is ₹ 106.91 crore (previous year: 108.59 crore), including 52.29 crore (previous year: 76.12 crore) for which the options have been vested to employees as at March 31, 2019. Expected volatility is based on the historical volatility of the Company's share price applicable to the total expected life of each option. 229.73 per share 1178.47 per option 58.37 per option 27.92% 6.83% 4.17 years * 257.28 per share 65.41 per option 1225.00 per option 7.44% 4.09 years 25.73% (G) Method used to determine expected volatility (F) Weighted average exercise price Equity component of foreign currency convertible bonds ## 8471.99 Capital reserve Capital reserve on business combination ** 153.20 153.20 3.56 crore As at 31-3-2018 *crore crore crore As at 31-3-2019 LARSEN & TOUBRO Debt instruments through Other Comprehensive Income [Note 1(m)] Cost of hedging reserve Cash flow hedging reserve Hedging reserve [Note 1(m)] & [Note 45(1)] Foreign currency translation reserve [Note 1(s)(iv)] Retained earnings General reserve # Debenture redemption reserve ^ Deferred employee compensation expense Employee share options outstanding Employee share options (net) [Note 1(r)] Securities Premium [Note 1(p)] * (E) Weighted average share price 2180.66 120.48 end of 5th year from the date of allotment. Redeemable at face value at the end of 10th year from the date of allotment. Redeemable at face value at the end of 10th year from the date of allotment. Redeemable at face value at the end of 10th year from the date of allotment. Redeemable at face value at the Redeemable at face value at the end of 10th year from the date of allotment. Terms of repayment for debentures outstanding as at 31-3-2019 8.40% p.a. payable annually 8.80% p.a. payable annually 9.15% p.a. payable annually 8.95% p.a. payable annually 9.75% p.a. payable annually 2179.85 2180.66 Total 1042.62 1043.12 September 24, 2015 Borrowings non-current [Note 19] 1000000 LARSEN & TOUBRO NOTE [19] (contd.) No. Sr. 19(c) Details of term Loans (Unsecured): 0.675% US$ denominated 5 years & 1 day Foreign Currency Convertible Bonds (FCCB) carried at 1363.39 crore as at March 31, 2019 (as at March 2018: 1245.64 crore) represent 200000 bonds of $1000 each. The bonds are convertible into the Company's fully paid equity shares of ₹2 each at a conversion price of 1277.67 per share at the option of the bond holders at any time on and after December 1, 2014 up to October 15, 2019. The bonds are redeemable, subject to fulfillment of certain conditions, in whole but not in part, at the option of the Company, on or at any time after October 22, 2017 but not less than seven business days prior to the maturity date, at the principal amount together with accrued interest (calculated up to but excluding the date of redemption) on the date fixed for redemption, unless the bonds have been previously redeemed, converted or purchased and cancelled. 19(b) Foreign Currency Convertible Bonds: The principal amount has been calculated as [{Average Ref WPI as at reporting period/Average Ref WPI (as at 23/5/2013)} x Face Value]. Redeemable at the end of 10th year from the date of allotment. Redemption value calculated as [{Average Ref WPI (on Maturity Date) / Average Ref WPI (on Issue Date)} * Face Value] with Floor Rate as 3% and Cap Rate as 12%. WPI here refers to Wholesale Price Index. Terms of repayment for debentures outstanding as at 31-3-2019 1.65% p.a. payable on Inflation Adjusted Principal as on the date of coupon payment Interest for the year 2018-19 crore 116.96@ 120.48@ May 23,2013 1000000 As at 31-3-2018 As at 31-3-2019 crore Date of allotment Face value per debenture (*) @ 19 (a)(iii) Unsecured redeemable non-convertible inflation linked debentures: Notes forming part of the Financial Statements (contd.) 2179.85 5 216.95 Security: The debentures were secured by way of a first charge having pari passu rights on the immovable property at certain locations and part of a movable property of a business division, both present and future. Borrowings non-current [Note 19] 408.58 Current maturity of long term borrowings [Note 24] Less: Terms of repayment for debentures outstanding as at 31-3-2019 Interest for the year 2018-2019 As at 31-3-2018 crore 408.58 January 5, 2009 1000000 crore As at 31-3-2019 Date of allotment Face value per debenture (*) 5495.16 2391.87 0.20 0.06 1952.51 90.67 1245.64 116.96 19(a) (ii) Unsecured redeemable non-convertible fixed rate debentures (privately placed): 216.89 Sr. Face value per debenture (*) April 13,2010 1000000 4 324.22 324.32 May 11,2010 1000000 3 322.61 322.71 May 26,2011 1000000 2 273.51 Interest for the year 2018-19 As at 31-3-2018 crore As at 31-3-2019 crore 273.56 April 10,2012 1000000 1 Date of allotment No. (D) Weighted average expected dividends over the life of the option (C) Weighted average expected volatility (B) Weighted average expected life of options 19,800 10 Options lapsed post bonus issue 43,42,684 2,05,321 6,22,567 70,767 89,325 48,375 19,800 2017* consequent to bonus issue Adjusted options as on July 14, 9 28,94,772 1,36,876 4,15,042 47,178 I 59,550 32,250 13,200 2017* 48,375 Options outstanding as on July 14, 89,325 1,05,342 49,313 2,02,516 3,51,935 4,51,376 70,767 1,73,309 4,87,892 2,34,441 1,56,962 89,325 89,325 I I 48,375 48,375 19,800 Options vested Of which: I 19,800 the end of the year 13 Options granted and outstanding at 12 Options exercised post bonus issue 71,600 25,200 11 Options granted post bonus issue - 70,767 6,39,890 5,73,580 18 39,708 Vesting commences on 1-6-2001 19-4-2002 19-4-2003 19-4-2002 19-4-2003 23-5-2003 onwards 23-5-2003 onwards 23-5-2004 onwards 23-5-2004 onwards 1-9-2006 onwards 1-7-2007 onwards 1-9-2007 onwards 1-7-2008 onwards 4 Options granted and outstanding at the beginning of the year 19,800 13,200 48,375 32,250 89,325 59,550 70,767 47,178 4,87,892 4,27,131 - 1,76,584 35,49,464 34,91,467 5 Options lapsed prior to bonus 1,08,685 6 Options granted prior to bonus 7 3 4,94,210 1-6-2000 12 - 6,200 17,700 29,789 Notes forming part of the Financial Statements (contd.) NOTE [17] (contd.) Equity share capital (contd.) ii. The details of the grants under the aforesaid schemes under various series are summarized below: iii. LARSEN & TOUBRO Sr. Series reference No. 1 Grant price - (*) 2000 2002(A) 2002(B) 2003(A) 2003(B) 2018-19 2017-18 2018-19 2017-18 2018-19 2017-18 2018-19 2017-18 2018-19 2017-18 2.00 2.00 2.00 2.00 2.00 2.00 7.80 7.80 7.80 7.80 2006 2006(A) 2018-19 2017-18 2018-19 2017-18 267.10 267.10 267.10 267.10 Grant dates 2,805 11,25,488 9,15,424 -27,11,931 35,49,464 I 9,87,545 (K) Options exercisable at the end of the year out of (J) supra 223.35 42,65,623 251.52 28,85,240 (J) Options granted and outstanding at the end of the year 248.92 7,03,205 139.58 6,85,544 (1) Options lapsed post bonus issue 229.25 10,75,191 222.40 13,59,929 (H) Options allotted post bonus issue 238.32 6,45,180 257.28 6,65,090 264.28 226.07 19,22,282 349 (A) Weighted average risk-free interest rate No. ix. 2017-18 2018-19 Particulars Sr. viii. The fair value has been calculated using the Black-Scholes Option Pricing Model and the significant assumptions and inputs to estimate the fair value of options granted during the year are as follows: vii. Weighted average fair values of options granted during the year is 986.95 (previous year: 965.25) per option vi. During the year, the Company has recovered 17.15 crore (previous year: 7.16 crore) from its subsidiary companies towards the stock options granted to their employees, pursuant to the employee stock option schemes. Expense on Employee Stock Option Schemes debited to the Statement of Profit and Loss during 2018-19 is 73.07 crore (previous year: 68.98 crore) net of recoveries of 1.63 crore (previous year: 0.79 crore) from its group companies towards the stock options granted to deputed employees, pursuant to the employee stock option schemes (Note 34). The entire amount pertains to equity-settled employee share-based payment plans. B. A. In respect of stock options granted pursuant to the Company's stock options schemes, the fair value of the options is treated as discount and accounted as employee compensation over the vesting period. Weighted average share price at the date of exercise for stock options exercised during the year is 1272.80 (previous year: 1106.67) per share. V. iv. Equity share capital (contd.) NOTE [17] (contd.) Notes forming part of the Financial Statements (contd.) NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 350 218.19 53,98,839 339.12 35,98,868 2017-18 2018-19 The number and weighted average exercise price of stock options are as follows: *Record date: July 14, 2017 4.15 3.74 Nil Nil 4.95 4.72 Nil Nil Nil Nil Nil Nil Nil contractual life of options (in years) 14 Weighted average remaining 17,35,136 19,86,255 9,76,795 15,63,209 10,750 1,30,806 1,62,559 3,57,086 Options yet to vest 70,767 Particulars No. of stock Weighted average Weighted 400.70 1,08,685 (G) Options granted post bonus issue (E) Options granted and outstanding prior to bonus issue (F) Adjusted options consequent to bonus issue (D) Options lapsed pre bonus issue 380.14 5,63,707 (C) Options allotted pre bonus issue 112.61 23,900 As at 31-3-2019 crore (B) Options granted pre bonus issue 42,47,360 price () price () 223.35 42,65,623 (A) Options granted and outstanding at the beginning of the year exercise average No. of stock options exercise options 347.41 1 2 3 Notes: 1. The Company does not expect any reimbursements in respect of the above contingent liabilities. 2. 3. 4. 5. It is not practicable to estimate the timing of cash outflows, if any, in respect of matters at (a) to (d) above pending resolution of the arbitration/appellate proceedings. Further, the liability mentioned in (a) to (d) above includes interest except in cases where the Company has determined that the possibility of such levy is remote. In respect of matters at (e), the cash outflows, if any, could generally occur up to twelve years, being the period over which the validity of the guarantees extends except in a few cases where the cash outflows, if any, could occur any time during the subsistence of the borrowing to which the guarantees relate. In respect of matters at (f), the cash outflows, if any, could generally occur up to six years, being the period over which the validity of the guarantees extends. In respect of matters at (g) to (i), the cash outflows, if any, could generally occur up to completion of projects undertaken by the respective joint operations. NOTE [30] Commitments Particulars As at 31-3-2019 crore crore As at 31-3-2018 crore crore (a) Estimated amount of contracts remaining to be executed on capital account (net of advances) (i) Estimated amount of contracts remaining to be executed on Property, plant & equipment 658.86 675.07 NOTE [29] (contd.) (ii) Estimated amount of contracts remaining to be executed on Investment Property Notes forming part of the Financial Statements (contd.) 6576.16 2113.67 157.68 170.25 218.41 193.33 676.38 423.22 (e) Corporate guarantees for debt given on behalf of subsidiary companies/ joint venture companies 7520.77 7424.61 (f) Corporate and bank guarantees for performance given on behalf of subsidiaries/joint venture companies 30986.48 20305.06 (g) Contingent liabilities, if any, incurred in relation to interests in joint operations 7586.12 7267.96 (h) Share in contingent liabilities of joint operations for which the Company is contingently liable 84.92 139.20 (i) Contingent liabilities in respect of liabilities of other joint operators of joint operations 7187.07 LARSEN & TOUBRO 2145.93 0.01 3.64 Engineering and service fees Servicing Commission 77799.03 6238.01 642.08 66978.07 5575.56 96.68 10.06 18.74 933.61 666.64 160.16 159.80 85782.95 73495.49 Other operational income: Income from hire of plant and equipment 67.65 122.03 Property development activity (iii) Estimated amount of contracts remaining to be executed on Intangible assets under development Manufacturing and trading activity Sales and service: 0.05 662.50 (b) Funding committed by way of equity/loans to subsidiary companies (c) Funding committed by way of equity (including investment through purchase of investments from other parties*) 845.00 675.13 715.45 10732.85 * The Company has entered into a definitive share purchase agreement to acquire 20.32% stake in Mindtree Limited on March 18, 2019 at a price of 980 per share aggregating to consideration of 3269.00 crore. Further, the company has placed a purchase order with its stock broker for acquiring 15% stake through on-market purchases for an overall consideration amount not exceeding 2434.00 crore from any recognised stock exchange, but only after receipt of relevant approvals from regulatory authorities. The Company will also make an open offer to acquire 31% stake for a consideration of 5029.85 crore in accordance with the requirements of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 2011. The completion of these transactions are subject to receipt of necessary regulatory approvals. Subsequent to March 31, 2019 and up to May 9,2019, the Company acquired 4,25,90,088 equity shares of Mindtree Limited (representing 25.94% of the share capital of that company) at a cost of ₹4180.91 crore through block deal purchase from a major shareholder (and his associate entities) and on- market purchases. 357 358 NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 Notes forming part of the Financial Statements (contd.) NOTE [31] Revenue from operations Particulars 2017-18 crore 2018-19 crore crore crore Construction and project related activity (a) Claims against the Company not acknowledged as debts (b) Sales tax liability that may arise in respect of matters in appeal (c) Excise duty/service tax/customs duty liability that may arise including those in respect of matters in appeal/challenged by the Company in Writ (d) Income tax liability that may arise in respect of which the Company is in appeal crore crore As at 31-3-2019 As at 31-3-2018 crore crore 84.64 63.69 234.15 127.90 68.17 61.34 9.87 6.22 1461.02 1618.85 1857.85 1878.00 355 356 NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 Notes forming part of the Financial Statements (contd.) NOTE [27] 30957.29 Other current liabilities 36076.36 1939.20 33616.77 crore crore 478.07 Acceptances Due to related parties: Subsidiary companies Associate companies Joint venture companies Due to others NOTE [26] Current liabilities: Other financial liabilities Unclaimed dividend Forward contract payable Embedded derivative payable Financial guarantee contracts Due to others [Note 26(a)] Particulars 928.65 4.04 1006.51 26(a) Due to others include due to directors 57.00 crore (previous year: 49.11 crore) 767.28 2.92 995.18 1765.38 28713.84 Particulars Contract liabilities [Refer Note 48(d)] As at 31-3-2019 91.10 Compensated absences 585.25 515.34 Employee pension scheme [Note 50(ii)(a)] 24.52 22.58 Post-retirement medical benefits plan [Note 50(ii)(a)] 7.84 7.09 720.87 Other Provisions (Ind AS 37 Related) [Note 54] 702.96 636.11 466.11 1423.83 1102.22 NOTE [29] Contingent liabilities As at 31-3-2019 As at 31-3-2018 Particulars 103.26 Gratuity [Note 50(ii)(a)] Provision for employee benefits: crore As at 31-3-2018 crore crore crore crore Due to customers (Construction and project related activity) Advances from customers 6678.88 14593.29 5346.45 14070.34 Other Payables Profit/(loss) on sale of investment properties 21272.17 1278.47 22550.64 1428.67 20845.46 NOTE [28] Current liabilities- provisions As at 31-3-2019 As at 31-3-2018 Particulars crore crore crore 19416.79 - 565.60 58.93 17.82 6.76 crore crore As at 31-3-2018 As at 31-3-2019 23(a) Loans guaranteed by directors Nil (previous year: * Nil) Subsidiary companies Short term loan and advances from banks [Note 23(b)] Loans from related parties: Loans repayable on demand from banks [Note 23(b)] Particulars Current liabilities: Financial liabilities - - Borrowings NOTE [23] Other Payables (Deferred income on day one fair valuation of financial instruments) Particulars Other non- current liabilities NOTE [22] Post-retirement medical benefits plan [Note 50(ii)(a)] Employee pension scheme [Note 50(ii)(a)] Particulars Non-current liabilities: Provisions 26.63 NOTE [21] 75.79 9.27 Secured 1.27 0.58 crore crore As at 31-3-2018 As at 31-3-2019 472.87 497.62 171.74 189.26 301.13 308.36 crore crore As at 31-3-2018 As at 31-3-2019 108.64 53.75 5.76 3.72 16.64 As at 31-3-2019 Unsecured Particulars Embedded derivative payables 90.67 2768.06 Less: 2858.73 Total 58.88 8 - 31.79 7 694.19 6 650.83 691.28 5 1301.68 1382.59 4 Terms of repayment of term loan outstanding as at 31-3-2019 Rate of Interest As at 31-3-2018 crore 326.21 38.04 163.36 2480.12 Due to others USD LIBOR + Spread USD LIBOR + Spread USD LIBOR + Spread USD LIBOR + Spread USD LIBOR + Spread USD LIBOR + Spread 8.40% p.a. payable monthly 9.00% p.a. payable monthly 527.61 Current maturity of long term borrowings [Note 24] 1952.51 Borrowings non-current [Note 19] Forward contract payables Non-current liabilities: Other financial liabilities NOTE [20] Notes forming part of the Financial Statements (contd.) NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 354 353 Current maturity of long term borrowings [Note 24] 0.08 Total 0.08 Interest Free 1 Terms of repayment as at March 31, 2019 Rate of Interest As at 31-3-2018 crore crore No. As at 31-3-2019 Sr. 19(d) Sales tax deferment loan (unsecured): Loans guaranteed by directors -nil (previous year: nil) Repaid on July 2, 2018 Repaid on June 18, 2018 Repaid on October 19, 2018 Repayable on October 21, 2019 Repayable on November 4, 2019 Repayable on January 20, 2020 Repayable on May 7, 2023 Repayable on October 19, 2023 As at 31-3-2018 Total Secured Unsecured 418.32 209.59 287.30 631.43 496.89 Dividend income: Subsidiary companies Joint venture companies Others Net gain/(loss) on sale or fair valuation of investments Net gain/(loss) on derivatives at fair value through profit or loss Net gain/(loss) on sale of property, plant and equipment Lease rentals Miscellaneous income (net of expenses) 1313.98 535.59 19.44 178.70 2693.08 1512.12 251.15 3228.67 (2233.22) (22.60) 213.11 (125.74) Subsidiaries, associates and joint venture companies Others crore 74.08 Income from services to Group companies 111.63 326.71 Premium earned (net) on related forward exchange contracts Miscellaneous Income 26.22 36.02 374.88 557.32 1204.91 1116.16 86987.86 74611.65 NOTE [32] Other income 2018-19 2017-18 Particulars crore * crore crore Interest income: 28.64 60.18 83.23 Current liabilities: Financial liabilities - Current maturities of long term borrowings NOTE [24] Notes forming part of the Financial Statements (contd.) 23(b) Loans repayable on demand from banks include fund based working capital facilities viz. cash credits and demand loans. The secured portion of loans repayable on demand from banks, short term loans and advances from the banks, working capital facilities and other non-fund based facilities viz. bank guarantees and letter of credit, are secured by hypothecation of inventories and trade receivables. Amount of inventories and trade receivables that are pledged as collateral: 5930.00 crore as at March 31, 2019 (March 31, 2018: 6026.53 crore) 116.59 4012.98 4129.57 426.30 426.30 32.73 3668.25 32.73 3643.71 24.54 20.06 3683.21 3586.68 * crore crore crore 20.06 96.53 24.54 3610.98 3610.98 crore * crore * crore 24.54 Total Particulars Secured: Redeemable non-convertible fixed rate debentures [Note 19(a)(i)] Unsecured: 62.75 284.87 123.14 2768.84 1612.67 As at 31-3-2019 Current liabilities: Financial liabilities - Other trade payables NOTE [25] 936.27 4131.45 Lease rentals 0.08 2768.06 1363.39 408.58 As at 31-3-2018 * crore * crore As at 31-3-2019 LARSEN & TOUBRO 24(a) Loans guaraneed by directors Nil (previous year: * Nil) Sales tax deferment loan [Note 19(d)] 0.675% Foreign currency convertible bonds [Note 19(b)] Term loans from banks [Note 19(c)] 527.61 Financial guarantee contracts Particulars As at 31-3-2018 Investment in equity instruments 536.83 1510.63 973.80 1196.57 660.71 535.86 Miscellaneous expenses 9 228.33 568.29 339.96 23.56 18.51 5.05 25.04 19.11 241.54 637.56 396.02 General repairs and maintenance 8 5.93 Repairs to buildings 54.56 429.57 304.71 912.85 608.14 296.41 1024.59 728.18 Travelling and conveyance 375.01 NOTE [36] Finance costs Particulars Interest expenses Loans and advances in the nature of loans given to subsidiaries: Maximum outstanding during 2017-18 2018-19 31-3-2018 31-3-2019 No. Name of the company Balance as at Sr. crore Particulars in respect of loans and advances in the nature of loans to related parties as required by the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015: 1432.23 579.69 1641.39 37.11 3.59 2.78 1415.71 1601.50 crore crore 2017-18 2018-19 NOTE [37] Exchange loss (attributable to finance costs) Other borrowing costs 12.93 48.78 530.91 244.15 666.27 expenses expense and operating expenses expense and operating and other benefits Total 2017-18 Note 34 Note 35-Sales, Employee administration Note 33 - Manufacturing, construction and other expenses Total construction Note 33 - Manufacturing, No. Nature of expenses Sr. crore 35(a) Aggregation of expenses disclosed vide Note 33 -Manufacturing, construction and operating expenses, Note 34 -Employee benefits expense and Note 35 - Sales, administration and other expenses. LARSEN & TOUBRO NOTE [35] (contd.) Notes forming part of the Financial Statements (contd.) 2680.73 70.17 (173.31) 2018-19 Note 34 Note 35 - Sales, Employee administration benefits A B expenses 1 422.12 660.91 215.92 444.99 96.75 459.76 34.48 306.79 83.35 188.96 362.54 39.51 90.34 232.69 Rates and taxes -234567∞ Rent 363.01 554.69 119.37 435.32 Packing and forwarding 1014.92 58.22 956.70 1745.29 60.47 1684.82 Power and fuel Insurance L&T Seawoods Private Limited 147.29 L&T Realty Limited 1379.11 1507.65 Working capital and project funding 225.50 454.50 Working capital 76.75 70.04 Project funding (i) Hi-Tech Rock Products & Aggregates Limited (h) L&T Metro Rail (Hyderabad) Limited (f) L&T Hydrocarbon Engineering Limited (g) Nabha Power Limited Project funding (e) L&T Construction Equipment Limited (c) L&T Special Steels & Heavy Forgings Private Limited* (b) L&T Shipbuilding Limited (a) L&T Realty Limited Subsidiary companies: Loans and Advances (A) security is proposed to be utilised by the recipient 2017-18 2018-19 Purpose for which the loan/guarantee/ Nature of the transaction (loans given/investments made/ No. guarantees given/security provided) Sr. (d) PNG Tollway Limited crore 18.20 7.00 (c) L&T-MHPS Turbine Generators Private Limited (b) L&T-MHPS Boilers Private Limited (a) L&T Aviation Services Private Limited Subsidiary Companies: Guarantees L&T Uttaranchal Hydropower Limited Subsidiary Companies: Total Other Advances: (B) 2300.85 2895.11 Working capital 18.20 (j) L&T Infrastructure Development Projects Limited Total 301.85 investments General corporate purposes and 109.00 working capital Temporary project funding and 594.29 379.80 Part financing of original project cost 54.07 Working capital General corporate purpose (148.60) Disclosure pursuant to section 186 of The Companies Act 2013: Subsidiary classification is in accordance with the Companies Act, 2013 L&T Finance Limited 1789.97 42.91 0.31 56.64 7.05 1009.87 7.00 594.29 379.80 Nabha Power Limited H L&T Construction Equipment Limited G 54.07 1506.84 L&T Hydrocarbon Engineering Limited 18.20 998.12 1401.86 133.10 85.03 558.88 1507.65 76.75 225.50 1379.11 18.20 PNG Tollway Limited E 70.04 454.50 1507.65 L&T Special Steels & Heavy Forgings Private Limited* D L&T Shipbuilding Limited C F NOTE [38] J 109.00 Loans to employees (including directors) under various schemes of the company (such as housing loan, furniture loan, education loan, etc.) have been considered to be outside the purview of disclosure requirements. Above figures include interest accrued - Notes: Particulars in respect of loans and advances in the nature of loans to related parties as required by the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015: (contd.) NOTE [37] (contd.) Notes forming part of the Financial Statements (contd.) NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 362 361 L&T Special Steels & Heavy Forgings Private Limited ₹1507.65 crore is before adjusting for Impairment of 263 crore. * L&T Metro Rail (Hyderabad) Limited 2300.85 18.20 2895.11 Total L&T Infrastructure Development Projects Limited M 301.85 301.85 Hi-Tech Rock Products & Aggregates Limited L 1016.16 L&T Finance Holdings Limited K 109.00 18.20 2319.78 92.12 (178.36) Recoveries from subsidiaries, associates and joint venture companies Rates and taxes Rent 188.96 232.69 763.52 1206.82 1198.37 1411.76 363.01 435.32 15.49 42.86 1684.82 Insurance Engineering, technical and consultancy fees Hire charges-plant and equipment and others Packing and forwarding Royalty and technical know-how fees Power and fuel Excise duty on stock 956.70 (48.37) (1047.41) (1296.12) 3444.04 Travelling and conveyance 444.99 422.12 530.91 6378.22 8117.47 973.80 535.86 Miscellaneous expenses (38.05) 168.17 Other provisions/(reversal of provisions) [Note 54(a)] 20.18 35.37 Provision for foreseeable losses on construction contracts 181.91 4870.09 192.44 339.96 396.02 General repairs and maintenance 5.05 5.93 Repairs to buildings 52.42 65.33 Repairs to plant and equipment 608.14 728.18 375.01 Bank guarantee charges 3052.84 4430.65 169.68 2018-19 LARSEN & TOUBRO Other manufacturing, construction and operating expenses: Work-in-progress* Stock-in-trade Finished goods Less: Opening stock: Work-in-progress Finished goods Stock-in-trade Closing stock: work-in-progress: 2017-18 Changes in inventories of finished goods, stock-in-trade and Stores,spares and tools consumed Purchase of stock-in-trade Construction materials consumed Excise duty Less: Scrap sales Raw materials and components Materials consumed: Particulars Manufacturing, construction and operating expenses NOTE [33] Notes forming part of the Financial Statements (contd.) (ii) Investment in preference shares Sub-contracting charges 69903.39 crore crore 285.20 221.52 154.24 4491.45 6166.21 4052.01 5549.53 285.20 386.27 154.24 230.41 19620.99 crore 22021.74 2341.99 1531.22 1786.14 22236.60 29099.38 149.10 7942.99 7832.79 8018.02 75.03 84.55 7917.34 crore 1808.79 58620.50 *Note: Current year includes opening adjustments on transition to Ind AS 115. 359 228.33 241.54 18.51 19.11 304.71 296.41 54.56 48.78 244.15 215.92 34.48 39.51 1.45 Others Stationery and printing Advertising and publicity Telephone, postage and telegrams Directors' fees General repairs and maintenance Repairs to buildings Travelling and conveyance Rates and taxes Rent Insurance Distributors and agents 4.88 Commission: 6.00 108.03 88.13 Other provisions [Note 54] (121.76) Exchange (gain)/loss [net] 20.36 745.17 56.82 Allowance for doubtful debts and advances (net) 38.35 354.97 214.12 Less: Allowance for doubtful debts and advances written back 375.33 252.47 101.63 Bad debts and advances written off 660.71 Miscellaneous expenses 83.56 94.60 Bank charges 5.68 8.20 22.47 21.68 38.18 44.29 67.92 536.83 (d) L&T Shipbuilding Limited 265.31 96.75 119.90 131.40 5070.64 crore crore crore 5613.91 crore 2017-18 2018-19 Sales, administration and other expenses NOTE [35] Recoveries on account of deputation 14.46 Staff welfare expenses Expenses on employees stock option schemes [Note 17(h)(v)(B)] Gratuity funds [Note 50(ii)(b)] Superannuation/employee pension schemes Provident funds and pension fund Contribution to and provision for : Salaries, wages and bonus Particulars Employee benefits expense NOTE [34] Notes forming part of the Financial Statements (contd.) NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 360 Insurance expenses - medical and others 358.41 13.16 72.50 119.37 Audit fees [Note 55] Professional fees Packing and forwarding 58.22 60.47 Power and fuel crore crore crore crore Particulars 64.40 2017-18 5614.74 6082.49 (417.94) (485.85) 603.36 579.13 83.35 90.34 69.77 74.70 205.56 210.26 2018-19 (e) Nabha Power Limited 0.77 (g) L&T Hydrocarbon Engineering Limited As at 31-3-2019 EURO US Dollars crore Derivatives including embedded derivatives for hedging receivable/(payable) exposure with respect to non financial assets/(liabilities) Net exposure to foreign currency risk in respect of recognised financial assets/(recognised financial liabilities) Particulars The net exposure to foreign currency risk (based on notional amount) in respect of recognised financial assets, recognised financial liabilities and derivatives is as follows: The Company may enter into foreign currency forward and option contracts with financial institutions to protect against foreign exchange risks associated with certain existing assets and liabilities, certain firmly committed transactions, forecasted future cash flows and net investments in foreign subsidiaries. In addition, the Company has entered, and may enter in future, into non-designated foreign currency contracts to partially offset the foreign currency exchange gains and losses on its foreign-denominated debt issuances. The Company's practice is to hedge a portion of its material foreign exchange exposures with tenors in line with the project/business life cycle, however, the Company may choose not to hedge certain foreign exchange exposures for a variety of reasons. In general, the Company is a net receiver of foreign currency. Accordingly, changes in exchange rates and in particular a strengthening of the Indian Rupee may negatively affect the Company's net sales and gross margins as expressed in Indian Rupees. There is a risk that the Company will have to adjust local currency product pricing due to competitive pressures when there have been significant volatility in foreign currency exchange rates. Foreign exchange rate risk: (i) The Company regularly reviews its foreign exchange forward and option positions and interest rate swaps, both on a standalone basis and in conjunction with its underlying foreign currency and interest rate related exposures. The Company follows cash flow hedge accounting for Highly Probable Forecasted Exposures (HPFE) hence the movement in mark to market (MTM) of the hedge contracts undertaken for such exposures is likely to be offset by contra movements in the underlying exposures values. However, till the point of time that the HPFE becomes an on-balance sheet exposure, the changes in MTM of the hedge contracts will impact the Balance Sheet of the Company. Further, given the effective horizons of the Company's risk management activities which coincide with the durations of the projects under execution and could extend across 3-4 years and the business uncertainties associated with the timing and estimation of the project exposures, the recognition of the gains and losses related to these instruments may not always coincide with the timing of gains and losses related to the underlying economic exposures and, therefore, may affect the Company's financial condition and operating results. Hence, the Company monitors the potential risk arising out of the market factors like exchange rates, interest rates, price of traded investment products etc., on a regular basis. For on balance sheet exposures, the Company monitors the risks on net unhedged exposures. including (a) Foreign exchange rate and interest rate risk: NOTE [44] Notes forming part of the Financial Statements (contd.) NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 365 1102.22 137.71 30957.29 1878.00 20845.46 642.79 19.65 4662.37 110.69 6.66 131.05 30314.50 1858.35 16183.09 991.53 201.86 36076.36 1857.85 22550.64 1423.83 8.16 787.13 22.67 4433.71 122.38 1301.45 Disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": Market risk management 28 Japanese Yen As at 31-3-2018 EURO (6.92) (1219.10) (24.22) 122.63 (104.88) contracts and embedded derivatives not designated as cash flow hedge 659.25 1848.44 (1388.82) 540.83 (833.18) 1368.13 Derivatives including embedded derivatives for hedging receivable/(payable) exposure with respect to firm commitments and highly probable transactions Receivable/(payable) exposure with respect to forward US Dollars including 222.04 222.95 552.57 (95.77) (1593.16) (150.69) (4.02) 141.69 (3190.33) pegged currencies currencies pegged Yen Japanese 594.48 366 Provisions 27 1995.18 1995.18 15 0.42 991.91 1293.86 1293.86 14 2500.05 22917.45 525.78 22391.67 28216.82 3441.59 284.26 11 months 819.66 Total After twelve Within twelve months 1680.39 3220.44 Total After twelve months 1065.93 2154.51 9 months Within twelve 27932.56 18116.93 16 6970.23 Other current liabilities 1835.18 26 Other financial liabilities 35289.23 25 Due to others 193.70 Due to micro enterprises and small enterprises Trade payables: Total After twelve months 37120.43 Within twelve months After twelve months Within twelve months Note As at 31-3-2018 As at 31-3-2019 crore Particulars (b) Current liabilities expected to be settled within twelve months and after twelve months from the reporting date: 32752.18 992.33 3441.59 40499.93 7747.75 44090.66 Total Note To provide a meaningful assessment of the foreign currency risk associated with the Company's foreign currency derivative positions against off Balance Sheet exposures and unhedged portion of on-Balance Sheet financial assets and liabilities, the Company uses a multi-currency correlated value-at-risk ("VAR") model. The VAR model uses a Monte Carlo simulation to generate thousands of random market price paths for foreign currencies against Indian rupee taking into account the Notes forming part of the Financial Statements (contd.) 2676.46 11 15 7,12,13 28216.82 730.02 7889.25 927.46 40790.06 22917.45 2387.74 4637.58 767.87 33387.10 Measured at fair value through Profit or Loss (FVTPL): (i) I. 3026.51 As at 31-3-2018 Note crore Particulars Sr. No. (a) Category-wise classification for applicable financial assets: Other disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures" NOTE [45] (ii) Trade receivable written off during the year but still enforceable for recovery amounts to Nil [previous year: 409.43 crore, out of this 243.62 crore included above and balance 165.81 crore included in exceptional items. Further, exceptional items for the year ended March 31, 2018 also included write off of retention money not due (classified as non-financial asset) amounting to 128.94 crore. (refer to Note 46)]. 2224.97 (357.10) (214.12) 2270.50 494.34 As at 31-3-2019 188.35 6,14 Other receivables 97.35 888.68 55 (f) L&T Global Holdings Limited (iii) Investment in mutual funds 10 1631.69 136.64 1085.08 1070.80 (iv) Investment in bonds 10 656.38 424.46 (v) Derivative instruments not designated as cash flow hedges Sub-total (II) 7,15 9.84 12.40 3296.34 3.77 21.33 2742.08 (vi) Embedded derivatives not designated as cash flow hedges Sub-total (I) Measured at amortised cost: II. (i) Loans (ii) Trade receivables (iii) Advances recoverable in cash (iv) Cash and cash equivalents and bank balances (v) 7,15 LARSEN & TOUBRO 171.07 Closing balance as at March 31 [reported under Note 11] * (0.45) 0.45 (0.47) 0.47 (0.45) 0.45 0.47 (0.47) Interest rates -increase by 0.5% in INR interest rate * Interest rates-decrease by 0.5% in INR interest rate * US Dollar Indian Rupees As at 31-3-2018 Impact on Equity As at 31-3-2019 2017-18 2018-19 Interest rates increase by 0.5% in USD interest rate * Interest rates -decrease by 0.5% in USD interest rate * Holding all other variables constant Particulars crore 5157.15 As at 31-3-2018 As at 31-3-2019 5508.64 crore Particulars Floating rate borrowings The Company's exposure to changes in interest rates relates primarily to the Company's outstanding floating rate debt. While most of the Company's outstanding debt in local currency is on fixed rate basis and hence not subject to interest rate risk, a major portion of foreign currency debt is linked to international interest rate benchmarks like LIBOR. The Company also hedges a portion of these risks by way of derivatives instruments like Interest rate swaps and currency swaps. The exposure of the Company's borrowing to interest rate changes at the end of the reporting period are as follows: (ii) Interest rate risk: Actual future gains and losses associated with the Company's investment portfolio and derivative positions may differ materially from the sensitivity analysis performed as at March 31, 2019 due to the inherent limitations associated with predicting the timing and amount of changes in foreign currency exchanges rates and the Company's actual exposures and position. correlations between them. The VAR is the expected loss in value of the exposures due to overnight movement in spot exchange rates, at 95% confidence interval. The VAR model is not intended to represent actual losses but is used as a risk estimation tool. The model assumes normal market conditions and is a historical best fit model. Because the Company uses foreign currency instruments for hedging purposes, the loss in fair value incurred on those instruments are generally offset by increases in the fair value of the underlying exposures for on balance sheet exposures. The overnight VAR for the Company at 95% confidence level is 29.88 crore as at March 31, 2019 and 25.61 crore as at March 31, 2018. NOTE [44] (contd.) Impact on Profit and Loss after tax 71.30 (17.45) 17.45 (17.45) 17.45 Write off as bad debts Additional provision (net) towards credit impaired receivables Provision/(reversal) of allowance for expected credit loss Changes in allowance for expected credit loss: 1916.66 2017-18 2018-19 2224.97 crore Particulars Opening balance as at April 1 The Company is making provisions on trade receivables based on Expected Credit Loss (ECL) model. The reconciliation of ECL is as follows: (i) (16.39) 16.39 The Company's customer profile include public sector enterprises, state owned companies and large private corporates. Accordingly, the Company's customer credit risk is low. The Company's average project execution cycle is around 24 to 36 months. General payment terms include mobilisation advance, monthly progress payments with a credit period ranging from 45 to 90 days and certain retention money to be released at the end of the project. In some cases retentions are substituted with bank/corporate guarantees. The Company has a detailed review mechanism of overdue customer receivables at various levels within organisation to ensure proper attention and focus for realisation. market value of debt securities would result in a value change of +/- 11.08 crore as at March 31, 2019 and +/- 14.04 crore as at March 31, 2018. 5% change in the equity funds' NAV would result in a value change of +/- 38.91 crore as at March 31, 2019 and +/- 16.24 crore as at March 31, 2018 respectively. The investments in money market funds are for the purpose of liquidity management only and are held only overnight and hence not subject to any material price risk. (c) NOTE [44] (contd.) Notes forming part of the Financial Statements (contd.) NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 368 367 The Company's investment policy and strategy are focused on preservation of capital and supporting the Company's liquidity requirements. The Company uses a combination of internal and external management to execute its investment strategy and achieve its investment objectives. The Company typically invests in money market funds, large debt funds, government of india securities, equity funds and other highly-rated securities under a limits framework which governs the credit exposure to any one issuer as defined in its investment policy. The policy requires investments generally to be investment grade, with the primary objective of minimising the potential risk of principal loss. To provide a meaningful assessment of the price risk associated with the Company's investment portfolio, the Company performed a sensitivity analysis to determine the impact of change in prices of the securities that would have on the value of the investment portfolio assuming a 0.5% move in debt funds and debt securities and a 5% movement in the NAV of the equity funds. Based on the investment position a hypothetical 0.5% change in the fair The Company manages liquidity risk by maintaining sufficient cash and marketable securities and by having access to funding through an adequate amount of committed credit lines. Given the need to fund diverse businesses, the Company maintains flexibility in funding by maintaining availability under committed credit lines to meet obligations when due. Management regularly monitors the position of cash and cash equivalents vis-à-vis projections. Assessment of maturity profiles of financial assets and financial liabilities including debt financing plans and maintenance of Balance Sheet liquidity ratios are considered while reviewing the liquidity position. (b) Liquidity Risk Management: 16.39 (16.39) Credit Risk Management: As at 31-3-2018 A hypothetical 50 basis point shift in respective currency LIBORS and other benchmarks on the unhedged loans would result in a corresponding increase/decrease in interest cost for the Company on a yearly basis as follows: crore recognised as expense and shown Other revenue expenses: (b) 5.94 1.52 4.42 3.98 0.18 3.80 Note 35 under sales, administration and other expenses recognised as expense and shown under sales, administration and other expenses Construction/acquisition of assets Total Paid Provided Total Paid Provided 2017-18 2018-19 Disclosed under No. Particulars Sr. crore The amount recognised as expense in the Statement of Profit and Loss on CSR related activities is 121.68 crore (previous year: 100.92 crore), which comprises: (a) Amount required to be spent by the Company on Corporate Social Responsibility (CSR) related activities during the year is 121.47 crore (previous year: 97.29 crore). Note 35 9.66 364 363 In addition, the Company has incurred expenditure of 0.52 crore (previous year: 2.70 crore) which is customer funded. (c) (b) on intangible assets being expenditure on new product development 40.53 crore (previous year: 48.08 crore) [Note 1(i)(ii)]; and on other intangible assets 1.96 crore (previous year: 1.84 crore). (a) on tangible assets ₹ 5.46 crore (previous year: 6.22 crore); ₹ The expenditure on research and development activities recognised as expense in the Statement of Profit and Loss is 168.23 crore (previous year: 138.93 crore). Further, the Company has incurred capital expenditure on research and development activities as follows: NOTE [40] 100.92 10.75 90.17 91.02 15.58 15.54 17.02 121.68 0.03 9.87 16.99 111.81 Total Note 34 employee benefits expense recognised as expense and shown under 79.40 9.19 70.21 100.68 0.04 NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 * Loan given to L&T Special Steels & Heavy Forgings Private Limited 1507.65 crore is before adjusting for impairment of 263 crore. NOTE [39] 27729.67 No. guarantees given/security provided) Sr. Nature of the transaction (loans given/investments made/ Disclosure pursuant to section 186 of The Companies Act 2013: (contd.) NOTE [38] (contd.) Notes forming part of the Financial Statements (contd.) LARSEN & TOUBRO 250.00 739.96 65.18 735.56 3707.00 4025.00 (i) Larsen & Toubro ATCO Saudia LLC subsidiary's Debt 1331.00 Corporate guarantee given for 418.95 427.31 60.60 16.88 11.94 19.45 As at 31-3-2019 (h) L&T Metro Rail (Hyderabad) Limited 19.45 Towards capital contribution 3156.00 Refer to Note 5 and Note 10 (j) Larsen & Toubro Arabia LLC crore 38507.25 Guarantees issued by bank out of the Company's sanctioned limits to customers of L&T-MHPS Boilers Private Limited for project performance (n) Larsen & Toubro (Saudi Arabia) LLC (o) L&T Hydrocarbon Engineering Limited (p) L&T-MHPS Boilers Private Limited 28.79 28.93 8691.05 17736.16 1517.67 1610.23 1047.98 (m) Larsen & Toubro Heavy Engineering LLC subsidiary's project performance (k) L&T Technology Services Limited 130.35 (1) L&T Technology Services LLC Corporate guarantee given for 787.73 770.67 5971.38 8442.15 2130.11 2260.03 security is proposed to be utilised by the recipient 2017-18 2018-19 Purpose for which the loan/guarantee/ 138.31 Notes forming part of the Financial Statements (contd.) (D) Investments in fully paid equity instruments and current investments Disclosure pursuant to Ind AS 17 "Leases" Payable later than 5 years 3 28.29 12.43 Payable later than 1 year and not later than 5years 2 23.79 19.62 Payable not later than 1 year 1 As at 31-3-2018 As at 31-3-2019 0.25 No. Sr. crore (B) Assets acquired on non-cancellable operating lease comprises commercial premises, cars and technology assets, the future minimum lease payments in respect of which are as follows: (A) The Company has taken various commercial premises and plant & equipment under cancellable operating leases. These lease agreements are renewed on expiry, based on requirement, convenience and other factors. There are no exceptional/restrictive covenants in the lease agreements. 0.20 0.06 0.20 0.06 0.10 0.10 0.20 0.06 Particulars 0.30 Total 58.88 Other current assets Other financial assets Loans Trade receivables NOTE [41] Particulars Inventories (a) Current assets expected to be recovered within twelve months and after twelve months from the reporting date: Disclosure pursuant to Ind AS 1 "Presentation of financial statements": NOTE [43] The above investment forms part of the unallocable corporate assets as at March 31, 2018. [Note 47(a)]. (b) Investment held for sale as at March 31, 2018 represents equity investment in Marine Infrastructure Developer Private Limited (MIDPL). Through a scheme of arrangement of demerger, the Port business in L&T Shipbuilding Limited was transferred to MIDPL (effective date March 22, 2017) in financial year 2016-17. As a shareholder, the Company had received 38,80,00,000 equity shares of 10 each. The Company divested its stake in MIDPL to the strategic partner in June 28, 2018. 32.30 The above investment forms part of the unallocable corporate assets. [Note 47(a)]. Investment held for sale as at March 31, 2019 represents equity investment in L&T Technology Services Limited 41.72 crore. Regulation 38 of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 requires a listed entity to comply with the minimum public shareholding requirements as specified in rules 19(2) and 19A of the Securities Contracts (Regulation) Rules, 1957 ("SCRR"). Rule 19(2)(b) of the SCRR requires the maintenance of a minimum public shareholding of 25% at all times of each class or kind of equity shares or convertible debentures issued by a listed company. (a) Investments held for sale * crore As at 31-3-2018 388.00 31-3-2019 41.72 As at LARSEN & TOUBRO Particulars Disclosure pursuant to Ind AS 105 "Non-current assets held for sale and discontinued operations": NOTE [42] Notes forming part of the Financial Statements (contd.) (C) Lease rental expenses in respect of operating leases: 150.49 crore (previous year: 103.49 crore) The company is holding 78.88% in its listed subsidiary company L&T Technology Services Limited. In order to comply with the said requirement, the Company plans to divest its investment in the said subsidiary in the open market within twelve months from the reporting date. 0.16 6.80 0.06 (A) Assets acquired on finance lease comprises plant & equipment and land. The leases have a primary period, which is fixed and non-cancellable. The Company has an option to renew the lease for a secondary period. Finance leases: (i) (b) Where the Company is a lessee: 72.52 13.30 23.51 6.79 49.01 6.51 As at 31-3-2019 crore (B) Total 3 Receivable later than 1 year and not later than 5 years 2 Receivable not later than 1 year 1 No. Particulars 0.20 Sr. The company has given buildings under non-cancellable operating lease, the future minimum lease payment receivable in respect of which are as follows: Operating leases: (a) Where the Company is a lessor Receivable later than 5 years The Minimum lease rental and the present value of minimum lease payments in respect of assets acquired under finance leases are as follows: As at 31-3-2018 (i) 0.02 0.13 0.02 0.28 Sr. 0.01 As at 31-3-2018 As at 31-3-2019 As at 31-3-2018 31-3-2019 As at Minimum lease payment crore Operating leases: Present value of minimum lease payments Less Future finance charges 늙은 Total (1+2+3) Payable later than 5 years 3 Payable later than 1 year and not later than 5 years 2 Payable not later than 1 year Particulars Present value of minimum lease payments 1 No. months (₹) months months rate twelve twelve amount (crore) (*crore) (crore) (₹) (*crore) 139526.87 Copper(Tn)* (223.90) (crore) 462821.73 (223.90) 198.62 60.65 8.85 5469.41 (crore) 38.32 Iron Ore(Tn) 199.84 199.84 149482.10 Aluminium(Tn) (305.35) (305.35) 432547.41 198.62 29.47 365.26 twelve Outstanding interest rate hedge instruments: Interest rate swaps taken to hedge interest rate risk and accounted as cash flow hedge: 4055.89 (ii) US Dollars Particulars Nominal As at 31-3-2019 Average Within amount (*crore) rate twelve (%) months (*crore) 7.17 365.26 After Nominal twelve amount months (crore) (crore) As at 31-3-2018 Average Within After rate twelve (%) months twelve months 760.62 rate amount Particulars After Within As at 31-3-2018 Average months Nominal As at 31-3-2019 Average Nominal (iii) Outstanding commodity price hedge instruments: Commodity forward contract: (crore) (crore) 240.00 7.60 520.62 Within After twelve 60.65 (i) Carrying amounts of hedge instruments for which hedge accounting is followed (contd.) 39.27 13631.02 382.60 56.94 169.36 27.61 Liability - Other financial liabilities 246.05 46.85 134.83 23.27 Non-current: Asset Other financial assets 99.28 Liability Other financial liabilities 32.58 Asset Other financial assets 72.40 Notes forming part of the Financial Statements (contd.) NOTE [45] (contd.) (ii) Swap contracts Current: Particulars Asset Other financial assets Non current: Asset Other financial assets Net investment hedge: Particulars (i) Forward contracts Current: As at 31-3-2019 Currency Interest rate Commodity exposure exposure price exposure 0.88 17.43 187.39 48.84 93.28 Coking Coal(Tn) Current: exposure 29.26 10.01 33.91 11958.33 33.91 Zinc(Tn) 42.44 189480.24 42.44 19.76 222813.00 19.76 Lead(Tn) 27.21 143913.20 (i) Forward contracts 27.21 160606.00 10.99 *Negative nominal amount represents sell position. (i) Carrying amounts of hedge instruments for which hedge accounting is followed: Cash flow hedge: Particulars As at 31-3-2019 Currency Interest rate Commodity exposure exposure price exposure As at 31-3-2018 crore Currency Interest rate Commodity exposure exposure price 10.99 187.39 4.41 19.34 As at 31-3-2018 Average Within After rate twelve twelve (₹) months months (*crore) (*crore) (crore) (b) Payable hedges: US Dollars 10513.68 EURO 3103.39 70.53 9787.62 81.73 2969.29 After Nominal twelve amount months (*crore) 726.06 10207.57 134.10 2714.06 4752.99 5454.58 69.75 Arab Emirates Dirham 0.75 17.86 0.75 Swiss Franc 294.76 72.76 294.76 404.36 74.68 404.36 Chinese Yuan 26.03 67.96 80.60 2644.31 10.32 months (crore) rate (₹) 873.53 3.15 As at 31-3-2019 Japanese Yen 1449.58 Kuwaiti Dinars 695.55 Qatari Riyals Thai Baht 1551.27 0.88 854.91 96.62 0.68 235.50 403.43 19.72 1227.83 18.62 3.15 1284.36 165.22 twelve 292.12 323.44 1476.18 1.43 90.74 0.65 225.58 18.55 2.12 889.42 33.77 442.85 170.67 1253.61 222.57 1.43 Nominal As at 31-3-2019 Average Within Particulars amount (*crore) 4.41 923.19 613.52 51.07 26.03 30.52 NOTE [45] (contd.) (B) Forward covers taken to hedge exchange rate risk and accounted as net investment hedge: Nominal amount (*crore) As at 31-3-2019 Average rate (₹) Within After Nominal twelve twelve amount months months (*crore) (crore) (crore) As at 31-3-2018 Average Within After rate twelve twelve months months Notes forming part of the Financial Statements (contd.) (*crore) Receivable: US Dollars 28.73 Arab Emirates Dirham 81.20 Qatari Riyal Saudi Riyal 116.68 51.07 71.83 20.46 20.91 116.68 28.73 28.73 71.83 28.73 81.20 (crore) British Pound Particulars 374 Japanese Yen 1058.26 95.54 0.66 Kuwaiti Dinars 8.69 235.83 30.52 874.72 8.69 52.96 93.51 28.88 24.08 183.54 309.02 0.62 NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 309.02 12.24 16.56 217.71 12.24 8.83 16.56 Omani Riyal 28.71 180.36 28.71 Canadian dollar 40.53 54.04 40.53 373 Swedish Krona Currency Interest rate Commodity exposure exposure Realty Liability Other financial liabilities (25.09) 39.15 (13.68) 25.47 4.17 (18.97) 6.63 (12.34) NOTE [46] A. Exceptional items for the year ended March 31, 2019 include the following: B (i) Gain of 3276.70 crore on sale of the Company's stake in subsidiary companies viz. Larsen & Toubro Infotech Limited *2142.90 crore and L&T Technology Services Limited 1133.80 crore; (ii) Write back of trade receivable and retention money of certain customer dues now considered recoverable 294.75 crore [Note 1(t)(vii)]. (iii) Impairment of investment in group companies viz L&T Shipbuilding Limited 1167.42 crore, L&T Infrastructure Development project Limited 773.00 crore and L&T Special Steels and Heavy Forging Private Limited 1156.10 crore. Exceptional items for the year ended March 31, 2018 include the following: 13.47 Gain of 198.82 crore on sale of the Company's stake in subsidiary companies viz. Larsen & Toubro Infotech Limited *145.32 crore and L&T Technology Services Limited 53.50 crore; (iii) Write off of trade receivable and retention money not due from a customer against whom insolvency proceedings are underway 294.75 crore [Note 1(t)(vii)]. The Competition Commission of India (CCI) accorded on April 18, 2019 its approval for the acquisition of the Company's Electrical & Automation (E&A) business by Schneider Electric subject to certain conditions, the details of which are awaited. Pending receipt of CCI's detailed order, the E&A business is treated as continuing operation and accordingly the relevant assets are not classified as held for sale. Notes forming part of the Financial Statements (contd.) NOTE [47] Disclosure pursuant to Ind AS 108 "Operating Segment" (a) Information about reportable segment LARSEN & TOUBRO crore Particulars For the year ended 31-3-2019 External Inter-segment Total For the year ended 31-3-2018 External Inter-segment Total (ii) Gain on divestment of stake in L&T EWAC Alloys Limited 351.55 crore and L&T Cutting Tools Limited ₹ 174.91 crore; Revenue (38.56) 86.54 (0.04) (95.37) (2.24) (177.14) 63.45 (113.69) 85.29 (29.84) 55.45 175.13 (60.63) 114.50 Cost of hedging reserve Opening balance Impact due to change in tax rate Changes in the forward element of the forward contracts where changes in spot element of forward contract is designated as hedging instrument for time period related hedges Amount Included in carrying amount of hedge item Amount reclassified to Profit or Loss (161.11) 0.08 177.54 Closing balance 2018-19 2017-18 Gross (18.97) Tax 6.63 Net of Tax (12.34) Gross (19.56) Tax Net of Tax 6.77 (12.79) 0.07 0.07 (247.65) 0.12 272.91 6.41 crore 26.77 Infrastructure 68452.62 19.40 220.42 Others 2338.81 12.26 2351.07 1511.46 10.16 1521.62 Elimination (699.94) (699.94) (969.77) (969.77) 201.02 Total 86987.86 74611.65 74611.65 Segment result [Profit/(Loss) before interest and tax] Infrastructure 5000.21 5010.02 Power 129.84 161.96 Heavy Engineering 486.79 259.03 British Pound 86987.86 Power 1309.63 1290.48 455.91 3975.77 7.32 68908.53 3983.09 57767.41 6200.71 599.24 58366.65 7.52 6208.23 Heavy Engineering 2477.76 35.49 2513.25 1417.25 19.15 150.27 Defence Engineering 3691.46 0.21 3691.67 3249.55 0.90 3250.45 Electrical & Automation [Note 46(B)] 4760.96 169.60 4930.56 4264.25 182.28 4446.53 1567.52 (13.95) 40.72 Amount included in Progress Billing in Balance Sheet Closing balance Cost of hedging reserve reserve reserve hedging reserve 89.50 5.05 (23.89) (12.34) (34.05) (0.88) 138.39 crore (k) Reclassification of Hedging reserve & Cost of hedging reserve to Profit or Loss: Future cash flows are no longer expected to occur: Sales, administration and other expenses Hedged expected future cash flows affecting Profit or Loss: Progress billing Revenue from operation Manufacturing,construction and operating expenses Finance costs Sales, administration and other expenses crore Hedging reserve/Cost of hedging reserve 2018-19 2017-18 (13.47) Particulars (1.32) Cash flow hedging Non-current: - Asset Other financial assets 11.48 0.11 2.68 (j) Breakup of Hedging reserve & Cost of hedging reserve balance: Particulars Balance towards continuing hedges Balance for which hedge accounting discontinued LARSEN & TOUBRO crore As at 31-3-2018 Currency Interest rate Commodity exposure exposure price exposure Cost of hedging 66.59 21.03 (3.65) As at 31-3-2018 crore Currency Interest rate Commodity price exposure exposure 14.63 2.15 0.91 exposure price exposure As at 31-3-2019 Cash flow As at 31-3-2018 (8.43) (40.72) 177.14 (1.24) (16.22) 5.81 (10.41) Changes in fair value of forward contracts designated as hedging instruments (176.84) 60.60 (116.24) 217.80 (78.02) 139.78 Changes in fair value of swaps 59.67 (20.45) 39.22 (150.03) 168.62 53.75 Amount reclassified to Profit or Loss (269.48) 92.35 (177.13) 61.11 (21.89) 39.22 Amount included in non-financial assets/liabilities (0.44) 0.15 (0.29) (0.48) 0.17 (0.31) (96.28) (87.91) 256.53 period related hedges (15.60) 22.58 (259.02) 247.72 2.16 (266.60) 181.10 375 5 376 NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 Notes forming part of the Financial Statements (contd.) NOTE [45] (contd.) (I) Movement of Hedging reserve & Cost of hedging reserve: crore Hedging reserve Opening balance Impact due to change in tax rate which is designated as hedging instrument for time Changes in the spot element of the forward contracts (0.72) 156.91 (83.18) (0.72) Net of Tax Asset Other financial assets Tax Net of Tax 114.50 (60.63) Tax Gross 175.13 2017-18 2018-19 Gross 240.09 Bangladesh Taka Embedded derivatives designated as cash flow hedges 179.55 301.94 18.11 1411.18 (147.38) 92.29 2. Gains/(losses) on fair valuation or settlement of embedded derivative contracts designated as cash flow hedges Sub-total (A) Less: 39.09 (250.03) (79.30) (38.23) B Gains/(losses) reclassified to Profit or Loss from Other Comprehensive Income: (i) Financial assets measured at fair value through Other Comprehensive Income: 1. On government securities, bonds, debentures etc. upon sale of government securities, bonds, debentures etc. (62.89) 1. Gains/(losses) on fair valuation or settlement of forward contracts designated as cash flow hedges (51.49) Derivative measured at fair value through Other Comprehensive Income: 1. On forward contracts upon hedged future cash flows affecting the Profit or Loss or related asset and liability 254.95 188.29 2. On embedded derivative contracts upon hedged future cash flows affecting the Profit or Loss or related asset and liability 0.64 (21.95) Sub-total (B) 192.70 114.85 Net gains/(losses) recognised in Other Comprehensive Income [II]= (A)-(B) (442.73) (153.08) (ii) ➤ = (51.22) 1. Gains/(losses) on fair valuation or sale of government securities, bonds, debentures etc. Derivative measured at fair value through Other Comprehensive Income: 1. Bad debts (written off)/written back (net) 2. Sub-total (B) Financial liabilities measured at amortised cost: 256.40 (186.17) Gains/(losses) on transfer of financial assets (on non-recourse basis) (32.18) (35.73) 15.32 (794.87) (i) Exchange gains/(losses) on revaluation or settlement of items denominated in foreign currency (trade payables, borrowings availed etc.) (ii) Unclaimed credit balances written back (141.74) (420.35) 84.03 117.68 Sub-total (C) (336.32) (44.92) Total [I] = (A+B+C) (210.23) (3129.63) || Net gains/(losses) on financial assets and financial liabilities measured at fair value through Other Comprehensive Income: A Gains/(losses) recognised in Other Comprehensive Income: (i) Financial assets measured at fair value through Other Comprehensive Income: (ii) (162.60) (iv) Gains/(losses) on derecognition: III A Financial liabilities that are measured at amortised cost (1001.78) (860.74) (b) Derivative instruments (including embeded derivatives) that are measured at fair value through Other Comprehensive Income (reclassified to Profit or Loss during the year) (259.02) (266.60) (c) Financial liabilities that are measured at fair value through Profit or Loss (0.06) (15.48) Sub-total (C) Total [II] = (A+B+C) (a) (1260.86) (583.74) (d) Fair value of financial assets and financial liabilities measured at amortised cost: Financial assets measured at amortised cost: (i) The carrying amounts of trade receivables, loans, advances and cash and other bank balances are considered to be the same as their fair values due to their short term nature. The carrying amounts of long term loans given with floating rate of interest are considered to be close to the fair value. (ii) Financial liabilities measured at amortised cost: Particulars 0.675 % Foreign currency convertible bond Redeemable non-convertible fixed rate debentures Term loan from banks Total crore Fair value hierarchy As at 31-3-2018 Carrying Fair Value amount 1375.81 2210.39 101.09 3687.29 1245.64 1241.13 2588.43 2647.14 (1142.82) 2047.19 Other income/(expenses): Interest expense: 496.93 Dividend income: Dividend income from investments measured at FVTPL Sub-total (A) 178.70 178.70 2693.08 2693.08 Notes forming part of the Financial Statements (contd.) NOTE [45] (contd.) (c) Items of income, expense, gains or losses related to financial instruments: (contd.) LARSEN & TOUBRO Sr. No. crore 2018-19 2017-18 C Particulars Interest income: (a) Financial assets measured at amortised cost 284.93 269.00 (b) Financial assets measured at fair value through Other Comprehensive Income 180.69 226.95 Financial assets measured at fair value through Profit or Loss 32.80 0.98 Sub-total (B) 498.42 B L2* (525.60) (171.07) (ii) Embedded derivatives not designated as cash flow hedges Sub-total (I) 20,26 3.26 15.79 10.12 29.31 II. Measured at amortised cost: (i) Borrowings 19,23,24 10191.57 10561.00 13.52 (ii) Trade payables: Due to others (iii) Others Sub-total (II) 25 201.86 36076.36 1549.38 48019.17 137.71 30957.29 1688.31 43344.31 III. Derivative instruments (including embedded derivatives) through Other Comprehensive Income: (i) Derivative instruments designated as cash flow hedges 20,26 234.05 Due to micro enterprises and small enterprises 132.19 6.86 Derivative instruments not designated as cash flow hedges Notes forming part of the Financial Statements (contd.) NOTE [45] (contd.) (a) Category-wise classification for applicable financial assets: (contd.) LARSEN & TOUBRO *crore Sr. No. Note Particulars As at 31-3-2019 As at 31-3-2018 III. (i) Measured at fair value through Other Comprehensive Income (FVTOCI): Investment in government securities, bonds and debentures (ii) Derivative financial instruments designated as cash flow hedges (iii) Embedded Derivatives designated as cash flow hedges Sub-total (III) 10 20,26 7,15 2406.91 602.52 0.18 3009.61 47096.01 2849.72 358.49 1.96 3210.17 39339.35 Total (1+11+111) (b) Category-wise classification for applicable financial liabilities: crore As at Sr. No. Particulars Note As at 31-3-2019 31-3-2018 I. Measured at fair value through Profit or Loss (FVTPL): (i) 7,15 (411.56) (ii) 20,26 17.05 3. C. On futures not designated as cash flow hedges Impairment loss on investments (22.60) (125.74) (213.17) Sub-total (A) 110.77 (2289.84) 369 370 NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 Notes forming part of the Financial Statements (contd.) NOTE [45] (contd.) (9.51) (c) crore 2018-19 2017-18 Sr. No. Particulars B Financial assets measured at amortised cost: (i) Exchange gains/(losses) on revaluation or settlement of items denominated in foreign currency (trade receivables, loans given etc.) 273.96 123.70 (ii) Allowance/(reversal) for expected credit loss during the year in the Statement of Profit or Loss (iii) Provision for impairment loss (other than expected credit loss) [net] (71.30) Items of income, expense, gains or losses related to financial instruments: (contd.) Defence Engineering On embedded derivatives contracts not designated as cash flow hedges 0.15 91.54 121.34 IV. Financial guarantee contracts Sub-total (III) Total (I+II+II+IV) (c) Items of income, expense, gains or losses related to financial instruments: 20,26 325.59 26.51 253.53 48381.39 15.49 43642.64 Sr. 2018-19 b. crore 2017-18 No. | Net gains/(losses) on financial assets and financial liabilities measured at fair value through Profit or Loss and amortised cost: A (i) Financial assets or financial liabilities mandatorily measured at fair value through Profit or Loss: 1. Gains/(losses) on fair valuation or sale of Investments 314.03 (2181.30) 2. Gains/(losses) on fair valuation/settlement of derivative: a. On forward contracts not designated as cash flow hedges 42.02 Particulars L2* L2* As at 31-3-2019 Carrying Fair Value amount 1363.39 2180.66 90.67 3634.72 Total B. Derivative liabilities: Forward contracts Embedded derivatives Total LARSEN & TOUBRO crore As at 31-3-2019 Within Note twelve After twelve months Total Other financial liabilities months As at 31-3-2018 After twelve months Total 19, 23, 24 8116.36 2522.89 10639.25 5370.82 5874.29 11245.11 193.70 8.16 25 35289.23 20, 26 Within twelve months 1529.37 Due to others Trade payables: crore Equity Investment in Tidel Park Limited 55.94 8.32 64.27 1.32 65.58 Significant unobservable inputs used in level 3 fair value measurements and sensitivity of the fair value measurement to changes in unobservable inputs: Particulars Equity Investment in "Tidel Park Limited" Fair Value as at 31-3-2019 65.58 Fair Value Significant unobservable Due to micro enterprises and small enterprises as at inputs 64.27 31-3-2019: 1. Net realisation per month * 30.90 per sq/ft. 2. Capitalisation rate 12.25% 31-3-2018: 1. Net realisation per month * 30 per sq/ft. 2. Capitalisation rate 12% Sensitivity 31-3-2019: 1% change in net realisation would result in +/- 0.32 crore (post tax +/- 0.21 crore). 25 bps change in capitalisation rate would result in +/- 0.63 crore (post tax +/- 0.41 crore). 31-3-2018 1% change in net realisation would result in +/- 0.31 crore (post tax +/- 0.20 crore). 25 bps change in capitalisation rate would result in +/- 0.64 crore (post tax +/- 0.42 crore). crore Notes forming part of the Financial Statements (contd.) NOTE [45] (contd.) (g) Maturity profile of financial liabilities (undiscounted values) Particulars A. Non derivative liabilities: Borrowings 31-3-2018 Gains/(losses) recognised in Profit or Loss during 2018-19 Balance as at 31-3-2019 45128.66 201.86 36076.36 1575.89 48493.36 Nominal Particulars amount (*crore) As at 31-3-2019 Average Within After Nominal rate twelve twelve months months (crore) (crore) As at 31-3-2018 Average Within After amount (crore) (₹) rate twelve twelve months months (crore) (crore) (a) Receivable hedges: US Dollars 5602.72 (A) Forward covers taken to hedge exchange rate risk and accounted as cash flow hedge: EURO 1208.19 113.99 Saudi Riyal 96.64 Omani Riyal 230.00 72.61 85.76 17.54 21.04 187.51 150.51 4131.54 1471.18 4178.79 944.89 263.30 904.48 53.37 60.62 138.38 96.64 68.11 3584.90 593.89 85.60 632.20 272.28 17.07 138.38 79.49 Arab Emirates Dirham 1228.16 19.34 1228.16 301.94 1414.99 Malaysian Ringgit 787.13 46.52 3364.70 (i) 299.89 131.05 6.66 137.71 30314.50 642.79 30957.29 1669.12 34.68 1703.80 37485.49 6558.42 44043.91 20, 26 238.25 (h) Details of outstanding hedge instruments for which hedge accounting is followed: Outstanding currency exchange rate hedge instruments: 8.10 131.32 19.80 151.12 69.75 28.91 98.66 63.40 85.37 148.77 308.00 37.01 345.01 194.72 105.17 246.35 Balance as at 31-3-2018 Gains/(losses) recognised in Profit or Loss during 2017-18 Balance as at 1-4-2017 10 1631.69 656.38 1631.69 1070.80 1070.80 656.38 424.46 424.46 7,15 9.84 9.84 3.77 3.77 (vi) Embedded derivative Instruments not designated as cash flow hedges 7,15 10 12.40 - 21.33 21.33 371 372 NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 Notes forming part of the Financial Statements (contd.) NOTE [45] (contd.) (e) Fair value hierarchy of financial assets and liabilities measured at fair value (contd.) (f) crore Particulars Note Level 1 12.40 As at 31-3-2019 Level 2 1085.08 888.68 3834.07 3888.27 Note: The carrying amounts of trade and other payables are considered to be the same as their fair values due to their short term nature. The carrying amounts of borrowings with floating rate of interest are considered to be close to the fair value. * Valuation technique L2: Future cash flows discounted using G-sec/LIBOR rates plus corporate spread. (e) Fair value hierarchy of financial assets and liabilities measured at fair value: Particulars crore Note Level 1 As at 31-3-2019 Level 2 Level 3 Total Level 1 As at 31-3-2018 Level 2 Level 3 Total 1085.08 Financial assets: (i) Equity shares (other than those held in subsidiary & assosiate companies) 5 31.67 65.68 97.35 72.27 64.37 136.64 (ii) Preference shares (iii) Mutual fund units (iv) Bonds (v) Derivative instruments not designated as cash flow hedges 5002 888.68 Investments at FVTPL: Level 3 Total Level 1 13.52 (b) Embedded derivative instruments not designated as cash flow hedges 20,26 3.26 3.26 15.79 15.79 (ii) Designated as FVTOCI: (a) Derivative financial instruments designated as cash flow hedges 20,26 234.05 234.05 132.19 132.19 13.52 (b) Embedded derivative financial instruments designated as cash flow hedges 91.54 91.54 121.34 121.34 Total 335.71 335.71 282.84 282.84 Valuation technique and key inputs used to determine fair value: 1. Level 1: Mutual funds, bonds, debentures and government securities- Quoted price in the active market. 2. Level 2 (a) Derivative instrument – Mark to market on forward covers and embedded derivative instruments is based on forward exchange rates at the end of reporting period and discounted using G-sec rate plus applicable spread. (b) Preference Shares - Future cash flows are discounted using G- sec rate plus applicable spread as at reporting date. Movement of items measured using unobservable inputs (Level 3): Particulars 20,26 6.86 6.86 20,26 As at 31-3-2018 Level 2 Level 3 Total Investments at FVTOCI (i) Debt instruments viz. government securities, bonds and debentures 10 2406.91 2406.91 2849.72 2849.72 (ii) Derivative financial instruments designated as cash flow hedges 7,15 602.52 602.52 358.49 358.49 (iii) Embedded derivative financial instruments designated as cash flow hedges (a) Derivative instruments not designated as cash flow hedges (i) At FVTPL - Designated as FVTPL: Financial Liabilities: 64.37 5952.25 1.96 1.96 1470.63 3.81 4417.25 65.68 1513.62 4726.65 Total 0.18 7,15 0.18 6305.95 549.83 20, 26 Electrical & Automation [Note 46(B)] 196.60 [Note 46(B)] Realty 17.34 17.97 0.95 0.95 255.54 192.79 Others 19.93 16.86 0.46 0.28 114.27 29.33 Segment Total 1039.42 938.55 61.88 31.32 297.87 236.90 2107.74 2301.96 Unallocated corporate 28.53 240.35 3.85 6.37 130.00 Additions to non-current assets For the year ended 31-3-2018 1137.18 1485.47 Power 47.16 43.56 2.99 1.40 62.96 133.40 Heavy Engineering 110.91 44.95 2.12 1.03 107.94 46.23 Defence Engineering 62.83 54.42 2.59 0.95 189.50 218.14 Electrical & Automation 139.16 48.10 12.82 38.45 (297.87) (236.90) For the year ended 31-3-2019 31-3-2018 67796.90 58124.10 2001.49 2478.78 5123.08 4156.19 3861.23 4917.23 2155.37 1551.96 crore 6049.79 19190.96 16487.55 86987.86 74611.65 crore Non current assets by location of customers As at 31-3-2019 10917.09 364.48 11281.57 As at 31-3-2018 10306.95 379.79 10686.74 320.76 3383.39 31-3-2019 ended Revenue by location of customers 227.05 424.10 Inter-segment (82.26) (44.31) Total 1049.46 74.70 69.77 2252.53 2681.75 Note: There is no impairment in non-financial assets of the segments. Unallocable corporate expenses include impairment loss of *3096.52 crore for the year ended March 31, 2019 (previous year: Nil) (b) For the year Geographical information Foreign countries: Kingdom of Saudi Arabia United Arab Emirates Qatar Bangladesh Other countries Total foreign countries (ii) Total (i+ii) India (i) Foreign countries (ii) Total (i+ii) Particulars Particulars India (i) For the year ended 1067.95 297.87 crore Particulars Segment assets As at 31-3-2019 Infrastructure 68926.08 As at 31-3-2018 59969.40 Segment liabilities As at 31-3-2019 As at 31-3-2018 47253.59 40034.89 Power 5095.07 5725.11 4838.09 5657.36 | Heavy Engineering 2932.34 2248.67 1528.56 1019.37 Defence Engineering 6408.76 6122.86 5302.55 5152.27 Electrical & Automation [Note 46(B)] 5387.30 98.99 (1974.07) 6677.70 812.41 For the year ended 31-3-2018 236.90 624.78 Realty 885.22 68.65 Others 345.06 263.69 Total 8209.36 6708.89 Inter-segment margins on capital jobs 3001.52 (10.11) Finance costs (1641.39) (1432.23) Unallocated corporate income/(expenditure) (net) 2660.31 2000.43 Profit before tax 9218.17 7262.38 Provision for current tax (2687.22) Provision for deferred tax 146.75 (14.71) 2938.01 Profit after tax 1663.94 NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 Notes forming part of the Financial Statements (contd.) NOTE [47] (contd.) Disclosure pursuant to Ind AS 108 "Operating Segment" (contd.) crore Depreciation, amortisation Particulars & obsolescence included in segment expense For the year ended 31-3-2019 Other non-cash expenses included in segment Interest expense included in segment expense expense 378 For the For the year ended year ended 31-3-2018 31-3-2019 31-3-2018 year ended 31-3-2019 Infrastructure 708.05 627.64 1686.60 46.40 22.86 For the 377 For the year ended 73174.97 1837.51 Realty 1608.40 66432.43 618.00 647.55 Others 1561.80 1130.36 572.65 Segment Total 89763.08 79742.81 62140.12 54748.03 912.73 Unallocable corporate assets/liabilities 125725.69 115606.68 Total assets/liabilities (711.23) (633.58) (633.58) (711.23) 12395.63 11668.43 36575.10 36596.19 Inter-segment assets/liabilities 136.11 332.88 164.18 197.10 178.83 7.09 Net liability/(asset) - current 27.10 22.73 7.84 164.18 136.11 Net liability/(asset) 323.71 Assets 178.83 323.71 27.10 164.18 24.52 Amount to be recognised as liability/(asset) 136.11 197.10 332.88 323.71 (13.12) (17.71) B) Amounts reflected in the Balance Sheet Liabilities 164.18 136.11 197.10 178.83 332.88 22.73 22.58 13.11 22.73 # 2017-18 12345 Interest cost Current service cost Interest income on plan assets 64.47 2018-19 72.42 2018-19 3.03 2017-18 2018-19 2017-18 31.39 0.01 28.33 9.76 27.10 # 2017-18 provident fund plan Net liability/(asset) - non current 189.26 171.74 308.36 301.13 # Employer's and employees' contribution due towards Provident Fund. 2018-19 b) * crore Gratuity plan Particulars Post-retirement medical Company pension plan benefit plan Trust-managed The amounts recognised in Statement of Profit and Loss are as follows: (limit in para 64(b)) (335.11) 2516.98 2287.81 4. (iii) Hedge reserve (other than through OCI) Acquired under business combination [Note 60(b)] Closing balance as at March 31 (0.20) (0.15) (0.39) (15.87) (841.86) LARSEN & TOUBRO Notes forming part of the Financial Statements (contd.) NOTE [50] Disclosure pursuant to Indian Accounting Standard (Ind AS) 19 "Employee Benefits": ii Defined contribution plans: Note {[1](k)(ii)(A)}: Amount of ₹ 88.55 crore (previous year: 124.47 crore) is recognised as an expense. Defined benefit plans: Note {[1] (k)(ii)(B)}: (400.62) a) The amount recognised in Balance Sheet are as follows: 40.82 (98.99) 13.46 Particulars 2 No. 1. Opening Balance as at April 1 (ii) Statement of Profit and Loss under OCI section (400.62) 2. Tax (income)/expense recognised in opening Retained earnings [refer to Note 48(h)] 3. Tax (income)/expense during the period recognised in: (i) Statement of Profit and Loss in Profit or Loss section (146.75) (285.22) crore Gratuity Plan Post-retirement medical benefit plan 197.10 178.83 332.88 323.71 596.72 535.97 91.10 197.10 332.88 323.71 2503.86 2270.10 Less: Fair value of plan assets 432.54 399.87 178.83 103.26 -Wholly unfunded 2270.10 Particulars As at 31-3-2019 As at 31-3-2018 As at 31-3-2019 As at 31-3-2018 As at 31-3-2019 As at 31-3-2018 Company pension plan Trust-managed provident fund plan As at 31-3-2019 As at 31-3-2018 A) Present value of defined benefit obligation -Wholly funded 493.46 444.87 2503.86 Add: Amount not recognised as an asset 13.16 3.03 3.44 21.67 50.83 196.98 180.83 385 386 NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 26.47 Notes forming part of the Financial Statements (contd.) Disclosure pursuant to Ind AS 19 "Employee Benefits" (contd.) The changes in the present value of defined benefit obligation representing reconciliation of opening and closing balances thereof are as follows: crore Gratuity plan Post-retirement medical Company pension plan As at 31-3-2019 NOTE [50] (contd.) benefit plan As at As at 31-3-2018 31-3-2019 Actual return on plan assets 67.16 Comprehensive Income" 21.69 12.20 6.13 (21.93) 3.48 61.53 5.91 88.77 84.04 29.34 4.32 31.14 31.02 Total (i+ii+iii) As at 31-3-2018 As at As at 31-3-2019 31-3-2018 Trust-managed provident fund plan As at 31-3-2019 28.33 13.46 13.16 23.99 21.67 194.14 31.39 178.70 i) Employee 190.95 168.39 ii) Transfer-in/(out) 45.57 25.12 Add: Contribution by plan participants Add: Interest cost 61.53 67.16 As at 31-3-2018 Opening balance of the present value of defined benefit obligation 535.97 517.73 178.83 Add: Current service cost 64.47 72.42 9.76 185.64 13.11 323.71 312.75 2270.10 2146.56 2017-18 3.44 Amount included as part of "Other 23.99 iii 23.99 169 Past service cost 0.20 | | | | 0.64 (21.84) | | (2.13) 7 Actuarial gain/(loss) not recognised in books 2.84 2.13 (2.84) 8 2.24 between actual return on plan assets 67.16 194.14 61.53 178.70 (28.71) (29.00) (194.14) and interest income (178.70) 19.45 34.04 6.13 (21.93) 3.48 5.91 Actuarial losses/(gains) - difference Actuarial losses/(gains) - others Effect of the limit in para 64(b) 0.01 9 expense" 64.40 72.50 9.75 13.09 3.67 Amount included in "Employee benefits 3.44 61.53 Amount included as part of "Finance cost" 2.68 (0.66) 13.46 13.16 67.16 i 61.53 67.16 Translation adjustments 10 Amount capitalized out of the above/ | | | Recovered from S&A (0.07) (0.12) (0.01) (0.02) Total (1 to 10) 88.77 84.04 29.34 4.32 31.14 31.02 21.67 2018-19 227.14 crore On foreign currency translation of joint operations Income tax expense reported in the OCI section [(i)+(ii)] (b) Reconciliation of tax expense and the accounting profit multiplied by domestic tax rate applicable in India: Sr. Particulars No. On gain/(loss) on fair value of debt securities 1. 2. Corporate tax rate as per Income tax Act, 1961 3. Tax on Accounting profit (c) = (a) * (b) 4. (i) Tax on Income exempt from tax : Profit before tax (A) Dividend income On mark to market gain/(loss) on cash flow hedges Net gain/(loss) on cost of hedging reserve On gain/(loss) on cash flow hedges other than mark to market On foreign currency translation of joint operations 2. Other Comprehensive Income (OCI) Section: (i) Items not to be reclassified to Profit or Loss in subsequent periods: Current tax expense/(income): On remeasurement of defined benefit plans (10.94) (10.94) (B) Deferred tax: 1.32 1.32 NOTE [49] (contd.) Disclosure pursuant to Ind AS 12 "Income Taxes" (contd.) Sr. No. Particulars (ii) Items to be reclassified to Profit or Loss in subsequent periods: (A) Current tax expense/(income): Notes forming part of the Financial Statements (contd.) (B) Long term capital gains exempt from tax LARSEN & TOUBRO 9218.17 7262.38 34.94% 34.61% 3221.20 2513.37 2017-18 (523.73) (978.42) (68.81) (C) Interest on tax free bonds (ii) Tax on expenses not tax deductible: (A) CSR expenses (B) Expenses in relation to exempt income (1117.38) 2018-19 crore (10.31) 2018-19 crore 2017-18 (76.46) 0.49 4.73 (0.49) (75.97) 4.24 45.87 8.87 (27.13) 0.14 (16.68) 11.12 2.76 40.82 (15.87) (46.09) (16.05) (3.91) 1875.08 (C) Tax on employee perquisites borne by the Company 2540.47 (0.27) 86987.86 203.22 69903.39 (160.48) 2319.78 375.90 418.64 9218.17 2540.47 244.54 6677.70 1.74 47.63 1.74 131.36 Diluted earnings per share 45.89 45.80 2409.11 After application of Ind AS 115 Revenue from operations Manufacturing, construction and operating expenses Sales, administration and other expenses Profit before tax 6433.16 Tax expenses Basic earnings per share As per Ind AS 11 and Ind AS 18 86569.22 69700.17 2480.26 8842.27 Profit after tax (i) NOTE [49] 47.54 (i) Current income tax : Current income tax expense Tax expense in respect of earlier years 2460.08 227.14 1808.52 Profit or Loss section 165.55 Tax expense on origination and reversal of temporary differences 83.75 (79.03) Minimum alternate tax credit (230.23) Effect of previously unrecognised tax losses on which deferred tax benefit is recognised Effect on deferred tax balances due to the change in income tax rate (ii) Deferred tax: 1. No. Particulars Pursuant to adoption of Ind AS 115, the company recognised impairment loss on contract assets using expected credit loss model applied to trade receivables. A. B. Impact on account of transition: Opening Retained Earnings as at April 1, 2018 reduced by 464.70 crore (net of tax) due to initial recognition of expected credit loss on contract assets with a corresponding increase in deferred tax asset by *226.10 crore and decrease in contract assets by 690.80 crore. Impact for the year: There is a decrease in sales, administration and other expenses due to reversal of provision for expected credit loss on contract assets in terms of the provision matrix resulting in profit after tax being higher by 104.40 crore with a corresponding increase in contract assets by 160.48 crore and decrease in deferred tax asset by 56.08 crore. Under Ind AS 115, revenue from realty business is recognised upon delivery of units as against percentage of completion method followed under Ind AS 11. A. B. Impact on account of transition: Opening Retained Earnings as on April 1, 2018 reduced by 236.88 crore (net of tax) with a corresponding increase in contract liability by 714.96 crore, increase in inventory by 372.58 crore, decrease in contract asset by 3.51 crore and increase in deferred tax asset by 109.01 crore. Impact for the year: Profit after tax during the year is higher by 140.14 crore, with a corresponding decrease in contract liability by 418.64 crore, increase in other current liability *6.59 crore, decrease in inventory by 196.63 crore, decrease in deferred tax asset by 94.35 crore and decrease in current tax liability by ₹ 19.07 crore. Disclosure pursuant to Ind AS 12 "Income Taxes" Major components of tax expense/(income): (a) Sr. 2018-19 crore 2017-18 Income tax expense reported in Profit or Loss [(i)+(ii)] Sr. (2.50) 42.52 1475.47 2446.33 5718.83 1332.26 7411.12 1696.25 (d) Components of deferred tax (assets) and liabilities recognised in the Balance Sheet and Statement of Profit or Loss 10489.78 crore Particulars No. Balance Sheet As at 31-3-2019 As at 31-3-2018 Statement of Profit or Loss 2018-19 2017-18 Sr. 1. Disputed statutory liability claimed on payment basis u/s 43B of the Income Tax Act, 1961 Total 363.99 As at 31-3-2018 Particulars No. Base Amount Deferred Tax Base Amount 6333.56 Deferred Tax Deductible temporary differences towards provision for 2. dimunition in value of investments on which DTA is not created Temporary differences arising out of revaluation of tax base of assets (on account of indexation benefit) 4156.22 970.86 1692.29 1. 155.57 2 3 4 569 2. Minimum alternate tax credit (230.23) (230.23) 7. Other temporary differences (14.63) 6. 41.15 66.94 (146.75) 41.26 (98.99) Net deferred tax (assets)/liabilities (e) Reconciliation of deferred tax (assets)/liabilities: (841.86) (400.62) Deferred tax expense/(income) (8.51) 46.03 Gain/(loss) on derivative transactions Items disallowed u/s 43B of Income Tax Act, 1961 (257.89) 136.47 (208.68) 3. Provision for doubtful debt and advances (1048.46) (880.64) 4. Difference in book depreciation and income tax depreciation 507.75 519.59 19.10 (49.31) 58.27 (11.52) (14.07) 5.21 (140.44) 9.05 5. As at 31-3-2019 (10.28) Sr. 3785.53 Add/(less): Actuarial (gains)/losses: 165.55 (ix) Effect of previously unrecognised tax losses used to reduce current tax expense (477.86) (x) Tax effect of losses in joint operation of current year on which no deferred tax benefit is recognised 37.68 (viii) Effect of current tax related to earlier years 25.94 18.33 5.86 Total effect of tax adjustments [(i) to (xi)] (680.73) (638.29) 56 (xi) Tax effect on various other items 5. 430.41 (3.91) 34.93 28.35 83.88 1.52 2.07 (iii) Weighted deductions on R&D expenditure and deduction u/s 801A (vii) Effect of current year net capital (gain)/loss [net] on which no deferred tax benefit is recognised (147.05) (iv) Effect of previously unrecognised tax losses used to reduce deferred tax expense (v) Tax effect on impairment and fair valuation losses recognised on which deferred tax asset is not recognised (0.27) (16.05) 1093.56 227.15 (vi) Effect on deferred tax balances due to the change in income tax rate (397.65) Tax expense recognised during the year (e)=(c)+(d) 2540.47 1875.08 1575.75 Assessment year 2017-18 1015.66 Assessment year 2016-17 Total 764.40 3355.81 Assessment year 2018-19 (ii) Unrecognised deductible temporary differences for which no deferred tax asset (DTA) is recognised in Balance Sheet 270.88 31-3-2027 200.16 31-3-2026 143.34 31-3-2025 614.38 1651.79 998.16 1135.58 284.17 196.38 31-3-2026 236.16 31-3-2025 31-3-2027 716.71 Tax losses (Capital loss on which no DTA is created) Expiry date (Assessment year) Deferred tax (crore) 6. Effective tax Rate (f)=(e)/(a) 27.56% 25.82% 383 384 NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 Notes forming part of the Financial Statements (contd.) NOTE [49] (contd.) Disclosure pursuant to Ind AS 12 "income taxes" (contd.) (c) (i) Unused tax losses for which no deferred tax asset (DTA) is recognised in Balance Sheet Particulars Base amount (crore) As at 31-3-2019 Deferred tax Expiry date Base amount (crore) (Assessment (*crore) year) As at 31-3-2018 crore i) Actuarial (gains)/losses arising from changes in demographic assumptions 6.52 18.79 1.49 1.49 1.49 Special deposit scheme 1.47 1.47 1.85 1.85 Fixed deposits 0.26 0.26 Insurer managed funds 0.29 0.29 4.75 4.75 3.89 3.89 16.78 9.88 6.90 Mutual funds - Debt Mutual funds - Equity 55.59 55.59 8.41 8.41 Debt instruments - PSU bonds 66.35 1.49 Other (payables)/receivables 0.16 0.16 509.01 509.01 Debt instruments - Corporate bonds 0.06 0.06 Equity instruments 5.05 5.05 4.78 4.78 Cash and cash equivalents Total As at 31-3-2018 Unquoted Quoted 66.35 Total Quoted As at 31-3-2019 Particulars Trust-managed provident fund plan crore 399.87 159.54 240.33 432.54 18.74 413.80 Closing balance of the plan assets (0.16) (0.16) Unquoted 77.63 77.63 Debt instruments - State government bonds Disclosure pursuant to Ind AS 19 "Employee Benefits" (contd.) NOTE [50] (contd.) Notes forming part of the Financial Statements (contd.) The Company expects to fund 60.92 crore (previous year: 45.05 crore) towards its gratuity plan and 73.88 crore (previous year: 67.68 crore) towards its trust-managed provident fund plan during the year 2019-20. The Trust formed by the Company manages the investments of provident funds and gratuity fund. Interest income on plan assets is determined by multiplying the fair value of the plan assets by the discount rate determined at the start of the annual reporting period. 2287.81 2516.98 (310.20) (265.03) (116.88) 399.87 432.54 (57.74) * Basis used to determine interest income on plan assets: Closing balance of the plan assets e) The fair values of major categories of plan assets are as follows: Less: Benefits paid Add: Business combination 172.56 187.08 Add: Contribution by plan participants 25.12 LARSEN & TOUBRO Notes forming part of the Financial Statements (contd.) NOTE [47] (contd.) Disclosure pursuant to Ind AS 108 "Operating Segment" (contd.) (c) Revenue contributed by any single customer in any of the operating segments, whether reportable or otherwise, does not exceed ten percent of the Company's total revenue. (d) The Company's reportable segments are organised based on the nature of products and services offered by these segments. (e) Basis of identifying operating segments, reportable segments, segment profit and definition of each reportable segment: (i) Basis of identifying operating segments: ii) 0.23 334.83 f) crore 88.46 88.46 132.95 132.95 Debt instruments - Central government bonds 165.03 99.91 65.12 172.10 172.10 Debt instruments - Corporate bonds 16.51 16.51 15.81 LARSEN & TOUBRO 15.81 0.69 0.69 0.61 0.61 Cash and cash equivalents Total Unquoted Quoted Total As at 31-3-2018 As at 31-3-2019 Unquoted Quoted Particulars Gratuity plan Equity instruments 66.78 3.42 Debt instruments - Central government bonds viii) (A) One percentage point change in actuarial assumptions would have the following effects on the defined benefit obligation of gratuity plan: vii) The obligation of the Company under the post-retirement medical benefit plan is limited to the overall ceiling limits. At present, healthcare cost, as indicated in the principal actuarial assumption given above, has been assumed to increase at 5.00% p.a. vi) The interest payment obligation of trust-managed provident fund is assumed to be adequately covered by the interest income on long term investments of the fund. Any shortfall in the interest income over the interest obligation is recognised immediately in the statement of Profit and Loss. The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. (c) For post-retirement medical benefit plan, the attrition rate varies from 1% to 11% (previous year: 1% to 12%) for various age groups. (a) For gratuity plan, the attrition rate varies from 1% to 12% (previous year: 1% to 11%) for various age groups. (b) For company pension plan, the attrition rate varies from 0% to 2% (previous year: 0% to 2%) for various age groups. 6.00% 7.00% 5.00% 5.00% v) iv) Attrition Rate: b) Company pension plan Gratuity plan (B) a) 5.00% 7.68% 7.48% 7.68% 7.48% 7.68% 7.48% As at 31-3-2019 As at 31-3-2018 iii) Salary growth rate: ii) Annual increase in healthcare costs (see note vii below) Post-retirement medical benefit plan c) b) Company pension plan Particulars 5.00% Gratuity plan Particulars crore 28.40 (14.43) 2017-18 Effect of 1% decrease 2018-19 (16.44) 30.96 17.53 (22.60) 2017-18 Effect of 1% increase 2018-19 19.99 (24.76) crore Impact of change in discount rate Impact of change in health care cost Particulars (C) One percentage point change in actuarial assumptions would have the following effects on the defined benefit obligation of post-retirement medical benefit plan: 27.70 2017-18 Impact of change in salary growth rate Impact of change in discount rate Effect of 1% decrease 2018-19 27.66 Effect of 1% increase 2018-19 (24.05) crore Impact of change in discount rate Particular One percentage point change in actuarial assumptions would have the following effects on the defined benefit obligation of company pension plan: 32.27 30.46 2017-18 (27.97) (29.71) 30.99 (27.08) 2018-19 2017-18 Effect of 1% decrease Effect of 1% increase 2018-19 32.77 (28.82) 2017-18 (24.01) Operating segments are identified as those components of the Company (a) that engage in business activities to earn revenues and incur expenses (including transactions with any of the Company's other components); (b) whose operating results are regularly reviewed by the corporate executive management to make decisions about resource allocation and performance assessment; and (c) for which discrete financial information is available. a) i) Other (Payables)/Receivables Special Deposit Scheme Mutual funds - Others 0.25 0.25 21.47 21.47 58.96 8.90 50.06 79.60 46.57 33.03 Mutual funds - Debt Closing balance of the plan assets Mutual funds Equity 375.60 283.08 535.32 535.32 Debt instruments - PSU bonds 455.76 455.76 592.89 592.89 Debt instruments - State government bonds 518.65 518.65 582.09 582.09 658.68 Discount rate: 1.12 2.76 g) Principal actuarial assumptions at the Balance Sheet date (expressed as weighted averages): Disclosure pursuant to Ind AS 19 "Employee Benefits" (contd.) NOTE [50] (contd.) Notes forming part of the Financial Statements (contd.) NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 388 387 As at 31-3-2018 6.45 years 13.95 years 7.57 years 7.67 years As at 31-3-2019 6.17 years 13.86 years Plans 3. Company pension plan Post-retirement medical benefit plan 2. 1.12 1. Gratuity plan 2287.81 642.67 1645.14 (12.08) (12.08) 0.04 2516.98 0.04 264.58 2252.40 193.08 193.08 190.60 190.60 7.85 5.09 The average duration of the defined benefit plan obligations at the end of the reporting period is as follows: The Company has six reportable segments as described under "segment composition" below. The nature of products and services offered by these businesses are different and are managed separately given the different sets of technology and competency requirements. 401.61 An operating segment is classified as reportable segment if reported revenue (including inter-segment revenue) or absolute amount of result or assets exceed 10% or more of the combined total of all the operating segments. 4402.88 (h) Disclosure of amount by which financial statements are impacted by application of Ind AS 115 as compared to Ind AS 11 and Ind AS 18: Assets Liabilities Equity As at 31-3-2019 Particulars as per Ind AS 11 and Ind AS 18 125898.89 72891.13 53007.77 Impact of application of Ind AS 115 Increase/(decrease) Transition impact as For the year at April 1, 2018 crore 5893.87 As at 31-3-2019 after application 125725.69 2018-19 13.38 714.96 (701.58) (186.58) (431.12) 244.54 73174.97 Reportable segments: 52550.72 381 382 NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 Notes forming part of the Financial Statements (contd.) NOTE [48] (contd.) Disclosure pursuant to Ind AS 115 "Revenue from Contracts with Customers" (contd.) of Ind AS 115 Particulars 16670.26 88727.16 Closing contracted price of orders as at March 31, 2019* (I+II+III+IV) *including full value of partially executed contracts. LARSEN & TOUBRO crore 469239.36 109880.10 2015.38 2496.79 41650.89 541980.74 86134.13 9070.43 77063.70 218003.35 (109.65) 247023.34 541980.74 41303.07 (g) Remaining performance obligations: The aggregate amount of transaction price allocated to remaining performance obligations and expected conversion of the same into revenue is as follows: Transaction price allocated to the remaining performance obligation crore Expected conversion in revenue Total Upto 1 Year From 1 to 2 years From 2 to 3 years From 3 to 4 years From 4 to 5 years Beyond 5 years 247023.34 90026.10 Particulars Balance revenue to be recognised in future viz. Order book (IV) Add/(less): Transfer in/(out) 64.57 3.18 Add/(less): Translation adjustments 0.24 Add: Business combination (20.06) (265.03) (310.20) (21.97) 0.64 0.20 Add: Past service cost (11.15) (11.08) (116.88) (57.74) Less: Benefit paid 19.23 (0.11) 11.96 5.36 29.77 10.00 iii) Actuarial (gains)/losses arising from changes in experience adjustments (13.32) crore (13.08) 5.39 (14.52) 6.03 ii) Actuarial (gains)/losses arising from changes in financial assumptions (15.00) (23.05) (4.62) 14.20 63.20 Closing balance of the present value of defined 535.97 26.07 63.94 Add: Contribution by the employer 2.13 2.84 21.84 (2.24) Difference between actual return on plan assets and interest income Add/(Less): Actuarial gains/(losses): 178.70 194.14 29.00 28.71 Add: Interest income on plan assets * 596.72 As at 31-3-2018 2156.30 As at 31-3-2018 439.61 399.87 | Opening balance of the fair value of the plan assets As at 31-3-2019 Particulars Gratuity plan crore benefit obligation d) Changes in the fair value of plan assets representing reconciliation of the opening and closing balances thereof are as follows: 2270.10 323.71 2503.86 0.97 332.88 178.83 197.10 Trust-managed provident fund plan As at 31-3-2019 2287.81 Decrease due to exchange rate movements (net) (III) For the year 2018-19 Impact of application of Ind AS 115 Increase/(decrease) Revenue out of orders under execution at the end of the year (1) Segment Domestic Foreign Total Other Revenue Infrastructure 53180.52 15098.78 68279.30 173.32 68452.62 Power Opening balance as at April 1, 2018 2585.90 1383.77 Revenue as per Ind AS 115 Total as per Profit and Loss/Segment reporting crore (a) Disaggregation of revenue into operating segments and geographical areas for the year ended March 31, 2019: iv) Segment composition: • Infrastructure segment comprises engineering and construction of building and factories, transportation infrastructure, heavy civil infrastructure, power transmission & distribution, water & effluent treatment, smart world & communication projects and metallurgical & material handling systems (hitherto reported under Others segment). Power segment comprises turnkey solutions for Coal-based and Gas-based thermal power plants including power generation equipment with associated systems and/or balance-of-plant packages. Heavy Engineering segment comprises manufacture and supply of custom designed, engineered critical equipment & systems to core sector industries like Fertiliser, Refinery, Petrochemical, Chemical, Oil & Gas and Thermal & Nuclear Power. Defence engineering segment comprises design, development, prototyping, serial production, delivery, commissioning and through life-support of equipment, systems and platforms for Defence and Aerospace sectors. It also includes Defence Shipbuilding comprising design, construction, commissioning, repair/refit and upgrades of Naval and Coast Guard vessels. Electrical & Automation segment comprises manufacture and sale of low and medium voltage switchgear components, custom built low and medium voltage switchboards, electronic energy meters/protection (relays) systems and control & automation products. 3969.67 • Others segment includes Hydrocarbon, marketing and servicing of construction & mining machinery and parts thereof, manufacture and sale of rubber processing machinery. 379 380 NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 Notes forming part of the Financial Statements (contd.) Disclosure pursuant to Ind AS 115 "Revenue from Contracts with Customers": Ind AS 115 transition impact Realty segment comprises property development and leasing activities. 6.10 3975.77 Heavy Engineering 625.03 1290.48 Others 1565.74 Total 66952.05 768.90 19182.08 665.45 2334.64 86134.13 2338.81 853.73 86987.86 (b) Out of the total revenue recognised under Ind AS 115 during the year, 78194.12 crore is recognised over a period of time and 7940.01 crore is recognised at a point in time. (c) Movement in Expected Credit Loss during the year: Particulars Revenue recognised upto previous year (from orders pending completion at the end of the year) (II) 4.17 Performance of a segment is measured based on segment profit (before interest and tax), as included in the internal management reports that are reviewed by the corporate executive management. 665.45 4760.96 1256.63 1195.04 45.57 2451.67 26.09 2477.76 Defence Engineering Realty 3438.00 3691.46 3691.46 Electrical & Automation 4259.81 482.13 4741.94 19.02 253.46 iii) Segment profit: NOTE [48] 1850.43 17108.37 Net contract balances Contract liabilities 19416.79 36525.16 Contract assets crore 638.87 2270.50 (214.12) 40230.97 (160.48) 690.80 108.55 2224.97 assets Provision on Contract Provision on Trade receivables covered under Ind AS 115 crore Net increase Opening balance as at April 1, 2018 71.30 188.35 21272.17 18958.80 3705.81 Total Revenue recognised during the year: Closing contracted price of orders as at March 31, 2019* Orders completed during the year Less: Increase due to exchange rate movements (net) Increase due to additional consideration recognised as per contractual terms Fresh orders/change orders received (net) Add: Opening contracted price of orders as at April 1, 2018* Reconciliation of contracted price with revenue during the year: (f) Disclosure pursuant to Ind AS 115 "Revenue from Contracts with Customers" (contd.) NOTE [48] (contd.) Notes forming part of the Financial Statements (contd.) (ii) Amount recognised as assets as at March 31, 2019: * Nil. Amount of amortisation recognised in Profit and Loss during the year 2018-19: Nil. Cost to obtain the contract : (iii) Revenue recognised during the year from the performance obligation satisfied in previous year (arising out of contract modifications) amounts to 29.11 crore. Revenue recognised during the year from opening balance of contract liabilities amounts to 6313.77 crore. Note: Increase in net contract balances is primarily due to higher revenue recognition as compared to progress bills raised during the year and Ind AS 115 transition adjustment. 1855.38 Particulars Movement in contract balances during the year: Closing balance as at March 31, 2019 Closing balance as at March 31, 2019 Write off as bad debts (d) Contract balances: Additional provision (net) towards credit impaired receivables Provision/(reversal) of allowance for expected credit loss Changes in allowance for expected credit loss: Less: Revenue out of orders completed during the year Paid up Capital (INR) 1. Section B: Financial Details of the Company 21 AR Markets served by the Company - Local/State/National/International 21 AR ii. Number of National Locations AR AR i. Number of International Locations (Provide details of major 5) 21 Total number of locations where business activity is undertaken by the Company 9. 21 Do the Subsidiary Company/Companies participate in the BR Initiatives of the parent company? If yes, then indicate the number of such subsidiary company(s) 3. Do any other entity/entities (e.g. suppliers, distributors etc.) that the Company does business with, participate in the BR initiatives of the Company? If yes, then indicate the percentage of such entity/entities? [Less than 30%, 30-60%, More than 60%] Section D: BR Information 1. Details of Director/Directors responsible for BR 21 AP 3. Total Turnover (INR) a) Details of the Director/Director the BR policy/policies AR 21 AR 2. Does the Company have any Subsidiary Company/ Companies? 1. 21 List of activities in which expenditure in 4 above has been incurred: AR Section C: Other Details 5. percentage of profit after tax (%) 21 AR 21 AR 21 21 Total spending on Corporate Social Responsibility (CSR) as 4. Total profit after taxes (INR) 21-22 2. • DIN Number • Name • • Designation L&T engineers make models to help make STEM concepts easier to grasp • Our Corporate Social Responsibility (CSR) department runs specific programmes focused on providing livelihood opportunities to vulnerable and marginalized stakeholders, both near and away from our campuses and project sites to ensure that the benefits reach the maximum number of beneficiaries. L&T is a pioneer in providing a counseling help-line for its employees and their families in India in collaboration with Tata Institute of Social Science (TISS). Safety Innovation School L&T's unique Safety Innovation School fosters a 'safety culture' across the workforce LARSEN & TOUBRO NATIONAL SAFETY WEEK 4-11 March 2019 SAFE PRACTICES HELP US TO BUILD A SAFE FUTURE CULTIVATE AND SUSTAIN THE SAFETY CULTURE FOR BUILDING THE NATION LARSEN & TOUBRO individual objectives. Management commitment to safety is demonstrated through our approach and is visible while taking business decisions. Our focus area is effective implementation of health and safety practices in line with our 'Zero Accident Vision'. It aims to create a safer work environment for our employees, contractors, and customers through rigorous systems, procedures, and firm implementation. This is also extended to our supply chain partners as well. Our Corporate Environment, Health & Safety (EHS) policy articulates our commitment towards building a safe workplace and defines protocols to be followed by each business across India and abroad. The safety performance of the Company is reviewed on a quarterly basis by the Company's Board. Regular safety training is undertaken, including Tool Box Talks, emergency mock drills, and specific safety interventions. New employees are introduced to the aspects of safety and all contract workmen receive mandatory safety training before the commencement of work. L&T is the first corporate organization in India to be accredited as 'Course Provider' by the National Examination Board in Occupational Safety & Health (NEBOSH), United Kingdom (UK) for delivering the International General Certificate and by the Institution of Occupational Safety & Health (IOSH), the UK for delivering their course. More than 4.1 million man-hours of safety training were provided in FY 2018-19 to our workforce. Our wellness programme 'Working on Wellness' is a unique initiative undertaken by Corporate Health and Welfare Department, which conducts counselling, awareness sessions, health programs, diagnostics camps and health workshop activities aimed at enhancing employees' wellness and well-being at office. These health interventions are grouped into six critical areas like cancer, diabetes, cardiac disease, obesity, ergonomic issues, and stress. Principle 4: Business should respect the interests of and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalized. Our responsibility to stakeholders is reflected in the way we do our business. The contribution of shareholders and investors to the growth of the Company is deeply valued, and we work hard to ensure that we deliver positive returns to the shareholders. L&T maps both internal and external stakeholders along with vulnerable, marginalized and disadvantaged stakeholders. This enables us to understand that our 29 SAP . . (1) armta Pratham Lift Gravity L&T helps rural communities accelerate development by joining the Digital Highway One of our flagship CSR programmes is 'Integrated Community Development (ICD)' which focuses on improving the quality of life of communities living in the b) Details of the BR head 'water-stressed' regions of India. The ICD programme works towards providing access to clean drinking water, sanitation facilities and water for agriculture in water- stressed regions. It is followed up with CSR interventions in health, education, and skill-building. External Stakeholders Stakeholders Engagement Modes Shareholders and investors ⚫DIN Number (if applicable) •Name Designation • Telephone number e-mail ID 22 AR 22-23 stakeholders comprise a large and mixed community with varied and extended expectations, and L&T always strives to match their expectations. L&T engages regularly with stakeholders through various programmes as they are a central part of L&T's decision-making process. Being a professionally managed organization, our constant quest is to create value for all stakeholders and at the same time, serve the wider interests of society. Our dedicated Corporate Brand Management & Communication (CBMC) department facilitates the continuous dialogue between stakeholders and the Company. L&T holds supplier meets to enhance supplier's knowledge of new products SUPPLIERS MEET SUPPLIERS MEET POWERING PROGRESS PLANNING PLANNING AR 30 Press Releases, Quarterly Results, Annual Reports, Sustainability Reports, AGM (Shareholders interaction), Access information & respond to queries meets Regular supplier, dealer and stockiest Report, Integrated Report, AGM (Shareholders interaction), Investors meet and shareholder visits to works, corporate website Corporate Social Responsibility (CSR) Press Release, Info desk - an online service, dedicated email id for investor grievances, Quarterly Results, Annual Reports, Sustainability Reports, Media Contractors Suppliers/ We use the following communication channels to engage with various stakeholders: List three key products/services that the Company manufactures/ provides (as in balance sheet) Page Number 20-21 Commerce and Industry (FICCI) engages with L&T for CSR and India Sanitation Coalition. L&T regularly interacts with the Indian Institute of Corporate Affairs (IICA) on CSR- related aspects as well. L&T is also an active member of committees such as Environment & Recycling Council by CII • National Fire Protection Institution • National Safety Council • Indian Institute of Chemical Engineers (IIChE) • Indian Electrical and Electronics Manufacturers Association • Federation of Indian Chambers of Commerce and • Industry (FICCI) • CII - Green Business Centre (GBC) • Confederation of Indian Industry (CII), Centre of Excellence for Sustainable Development (CESD) • Construction Industry Development Council (CIDC) Bombay Chamber of Commerce & Industry (BCCI) • Bureau of Indian Standards . • Association of Business Communicators of India • Associated Chambers of Commerce and Industry of •India (ASSOCHAM) They provide their expertise and business acumen during public policy consultations and present the industrial institution's view. Industrial forums and institutes where L&T participates actively include: L&T has been recognized for its sanitation efforts by the FICCI-Sanitation Council INDIA SANITATION CONCLAVE 2018 ISC-FICCI SANITATION AWARDS L&T actively promotes best practices in business communications through industry bodies like the ABCI - Green Business Centre (GBC), CII EHS Council (Western Region), Corporate Social Responsibility (CSR), etc. Principle 8: Support inclusive growth The following corporate policies of L&T lay emphasis on inclusive growth, by empowering communities and accelerating development. • Corporate Social Responsibility Policy facilities and at ICD locations Conducting tree plantation drives in and around L&T check dams, field bunds and promoting other agricultural techniques • •Implementing soil and moisture conservation programmes, building water harvesting structures, • Creating access to sanitation facilities for the communities by building toilets and bathrooms • Implementation of Integrated Community Development (ICD) Programme with the objective to make safe drinking water available for communities staying in the water-stressed regions of Maharashtra, Tamil Nadu and Rajasthan L&T's CSR interventions are focused on four thrust areas i.e. Water & Sanitation, Education, Health and Skill-Development, as mentioned below: Mahindra on a project mode through the CSR team at the corporate level. They are ably supported by Sustainability and CSR coordinators from all businesses. L&T has built over 200 check dams in water stressed areas LARSEN & TOUBRO Egy ESSAR Kumbing Portel The Company's CSR programmes are based on the theme 'Building India's Social Infrastructure'. The objective is to contribute positively to society, improve the quality of life, provide sustainable solutions and make a meaningful impact. The CSR interventions of the company are based on the CSR Policy and one in line with the Companies Act 2013 and CSR Rule 2014. The CSR Committee of the Board oversees the implementation of CSR programmes Corporate Environment, Health & Safety (EHS) Policy Sustainability Policy • Corporate Human Resource Policy Over 5000 L&T employee volunteers (L&Teers) give back to society in a myriad ways 58 ABCI ANNUAL AWARDS 18 January 2019 HSBC 34 L&T is an Indian Multi-National Company (MNC) with a presence in over 35 countries and is exposed to human rights issues. L&T publishes an annual Communication On Progress (COP) as part of its compliance to UN Global Compact (UNGC) and is a member of Global Compact Network India (GCNI). The policies and practices related to human rights are extended to subsidiary and associate companies as well. L&T's Human Resource Policy covers human rights aspects and ILO conventions. Principle 5: Business should respect and promote Human Rights L&T Helpdesk, toll-free number A large bouquet of print and on-line in- house magazines - some location-specific, some business-specific, a CSR program newsletter Online news bulletins to convey topical developments Welfare initiatives for employees and their families Corporate Social initiatives Circulars, Messages from Corporate and Line Management Prohibition of child labour, the prohibition of forced and compulsory labour, non-discrimination, freedom of collective bargaining, etc. are covered in our Code of Conduct for employees and Human Resource Policy. The Policy for Protection of Women's Rights at the Workplace is implemented to address sexual harassment at the workplace. We conduct periodical training for employees on various aspects of human rights. Different training media are used for classroom sessions, policy manual presentations, intranet, and posters. The Company complies with applicable regulatory requirements such as the Factories Act 1948, Building & Other Construction Employee engagement surveys for further improvement in employees' engagement process Press Releases, Quarterly Results, Annual Reports, Sustainability Reports Periodic feedback mechanism Regular business interactions, Client satisfaction surveys Government Community Customers L&T has a number of policies to ensure non- discrimination of any form L Wellness Policy LARSEN & TOUBRO For Internal stakeholders Employees Employee satisfaction surveys • Number of beneficiaries: 1,25,535 31 L&T Construction 33 We engage with multiple business and trade organizations and professional bodies. Our senior executives participate through active dialogues, be it new policy consultations or presenting views of the stakeholders to the Government. Principle 7: Responsible Public Advocacy Fully-grown trees are natural carbon sinks, and biodiversity plays an important role in the sustenance of human lives on this planet. L&T undertakes tree plantation both within and outside its premises (as part of its CSR programme) and engage with agencies / NGOs to conduct plantation at public places, national parks and on Government land. During the year 2018-19 more than 2,50,000 trees were planted by our people in project locations across India. We have planted more than 7 lakh trees in the last five years across India and we continue to nurture a self-sustaining forest at two locations in India through the Miyakwaki technique. from CPCB/SPCB. Renewable energy at manufacturing campuses is utilized, wherever feasible. Currently, eight campuses are sourcing renewable energy (wind and solar) from external sources, and all 24 campuses are generating renewable energy onsite. intensity (GJ/billion turnover), implementing energy conservation projects and increasing the use of renewable energy at our operations. We also intend to reduce our GHG intensity (tonnes of GHG emissions/billion turnover). We maintained the Carbon Neutrality for two of our Campuses, i.e. Powai (Mumbai) and Chennai in 2018-19 as well. We have aligned our practices with Government of India's National Action Plan on Climate Change (NAPCC) and its eight Missions, and its annual progress is published in our Sustainability Report. Increased energy efficiency, developing low emission technologies, building sustainable infrastructure, increasing green cover, and dissemination of sustainability knowledge are adopted by the organization. We invest in lower emission and cleaner programmes, thus promoting sustainable growth. Our green product and services portfolio helps our clients to reduce their carbon footprint. We comply with applicable environmental regulatory requirements from the State Pollution Control Board (SPCB) and Central Pollution Control Board (CPCB). Quarterly compliance is submitted by each business and checked by the Corporate Secretarial department. In addition, annual sustainability assurance by an independent assurance agency covers the compliance to environmental regulations, including submission of the compliance report to the regulatory agency. During 2018-19, there were no pending or unresolved show cause / legal notices L&T's green portfolio includes green buildings and a large number of eco-friendly products, systems and solutions. Alternative energy sources at L&T campuses help lower the Company's carbon footprint 32 LARSEN & TOUBRO Environmental protection and the conservation of natural resources are part of L&T's business philosophy. Our Corporate Environment, Health & Safety (EHS) Policy lays emphasis on incorporating environmental considerations into all business processes. As a part of our Sustainability programme, we set quantifiable targets with a timeline and action plan to achieve them since 2009. Our Sustainability Roadmap 2021 is aligned with our business plan, LAKSHYA 2021, which consists of measurable targets and key initiatives. The Sustainability Roadmap is extended to L&T's Principle 6: Business should respect, protect and make efforts to restore the environment Workers (Regulation of Employment and Conditions of Service) Act 1996, the Industrial Disputes Act 1947 and amendments thereof. Four complaints of sexual harassment at workplace were received, investigated and resolved as per the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 along with its Rules. There are no pending complaint with the Company. Our Combined CoC for suppliers and vendors covers Human Rights clauses, and all new suppliers must confirm their adherence to these clauses before they can commence business with L&T. Our water conservation efforts have resulted in all 24 of L&T's campuses being water positive L&T regularly organizes tree plantation drives in and around its campuses and worksites ELCROJEC Tree Plantation Drive CSR ACTIVITIES S&A companies and they are encouraged to set similar targets for themselves. Periodically, environmental risks and opportunities are identified from operations and addressed at the business level. We take our sustainability practices to our supply chain to create awareness and bring them abreast with current environmental issues (at the regional and global level) and how these can adversely impact their operations. We also share with our vendors, opportunities and benefits made available by following sustainability practices. More than 22,000 suppliers have signed our combined CoC, which is the first step towards following a structured sustainability programme in our supply chain. We continue to conduct water assessment surveys at our major campuses. All 24 campuses maintained their 'Water Positive' status in 2018-19. Water conservation and rainwater harvesting are practiced within our premises; additionally, our community interventions consist of rainwater harvesting, check dam construction, creation of farm ponds, soil moisture conservation programmes, etc. The results are very encouraging. Our 24 campuses have been maintaining zero wastewater discharge status since 2014, and our community intervention programmes have helped us to conserve more than 2800 million litres of water annually. Our climate change interventions programme focuses on climate change mitigation and abatement. We focus on reducing the energy consumption 8. Education Infrastructure development in schools 2. AR Corporate Identity Number (CIN) of the Company 1. Section A: General Information about the Company Section Description Reference Question ANNEXURE: MAPPING TO THE SEBI FRAMEWORK 38 37 All of L&T's communication conforms to the recommended guidelines. L&T does not engage in the sale of banned or disputed products. During the reporting period, no complaints were received from any of our stakeholders about incorrect or misleading marketing communication or anti-competitive behaviour or irresponsible advertising. L&T adheres to all the statutory regulations and voluntary codes related to its products and services. training and capacity building programmes for customers. Inputs received through customer feedback sessions are incorporated into our operations. Senior management actively reviews customer feedback and suggests corrective and/or preventive action as required. L&T's green product and services portfolio helps its clients to reduce their energy, water and material footprint and helps them to follow a low carbon economy path. In all its products and service offerings, L&T engages with customers through regular customer meets, customer satisfaction surveys and market-based research, including Our products carry adequate labelling and are supported by operation and maintenance manuals incorporating related specifications and codes, thereby providing adequate information. L&T customizes the design and delivery of its products to fulfil the various needs of its customers. Our products are tested against the most stringent national and international standards such as Indian Standard, International Organization of Standardization (ISO), RoHS (Restriction of Hazardous Substances - for relevant products) and International Electro Technical Commission. Providing training to our product users / clients forms an integral part of our services including training on preventive maintenance. Adequate labelling is put on the products for ease in understanding during transportation and use of products. sites. In addition, health and safety impacts and concerns throughout the lifecycle are addressed while designing products or offering services. Name of the Company 20 20 20 AR activitycode-wise) Sector(s) that the Company is engaged in (industrial 7. 20 AR 20 AR Digitalization initiatives across the Company enhance execution excellence 20 Financial Year Reported Email id Website 6. 5. 4. Registered Address 3. AR LARSEN & TOUBRO L&T's high-tech asset management solutions help clients enhance their productivity L&T offers products and services in diverse fields keeping in mind changing customer demands and market trends. Such changes are also incorporated into training, R&D, design & testing, manufacturing, construction process and customer interactions. Various digitalization initiatives are under way to help in project monitoring to enhance efficiencies. L&T has identified digitalization as a key driver to enhance its global competitiveness. The Company is building its capabilities to harness the true power of digital assets and incorporate digital strategies in its business model. We have a robust EHS management framework complemented by the active involvement of our vendors and contractors working at our campuses and project L&T 36 35 underprivileged across L&T's facility/site locations in India Pre-primary and primary education • Providing health and welfare activities for the • L&T's healthcare facilities reach the neediest, at the last mile Health extracurricular activities to help children expand their horizons Conducting summer camps, sports activities and Conducting workshops on life skills and awareness on social issues • • Running urban and rural community learning centres to provide after-school academic support to children from disadvantaged communities and helping them to cope with their curriculum and prevent them from dropping out • L&T Employee Volunteering Programme through which 'L&Teers' help augment the running of urban community learning centres • STEM (Science, Technology, Engineering and Math) Education infrastructure support and capacity building of teachers and students • Introduction of innovative teaching and learning techniques in English and Science, building and equipping computer labs, providing teaching aids and running capacity building programmes for teachers • 'Science on Wheels' vans • Number of beneficiaries: 2,42,984 • L&T's runner processing machinery adds value to tyre majors around the world • Projects, products and services designed, developed and executed by L&T are significant in India as well as in select geographies. to customers Principle 9: Engage with and provide value The Company contributed 121.68 Crores in 2018-19 towards CSR activities as per the Companies Act 2013. • Collaboration with state run technical institutes (ITIS) • Number of beneficiaries: 28,567 • Imparting skills and development of self-help groups at ICD locations Imparting vocational training skills among physically and mentally-challenged individuals • •Conducting malnutrition and anaemia mitigation camps • Vocational training programmes for women: Tailoring, beautician, home nursing and food processing courses • Skill-development • Number of beneficiaries: 2,55,000 •Treating and supporting HIV/AIDS affected patients through Anti-Retroviral Therapy (ART) centre at Mumbai Artificial kidney dialysis centres Dedicated health centres at 10 locations across India, providing services in reproductive health, diagnostic and clinical camps, maternal and child health care, immunization and health education Providing health services in remote locations through mobile health vans • Conducting eye check-ups, blood donation camps and health awareness programmes • Providing free training in various construction skills like bar bending, formwork carpentry, masonry, scaffolding, welding, electric wiring, etc. through Construction Skills Training Institutes (CSTIs) to rural and urban youths to enhance their employability Water & Sanitation The Company interacts regularly with the Confederation of Indian Industry - Centre of Excellence for Sustainable Development (CII - CESD) on Sustainability and Integrated Reporting policies, regulations, and L&T is a member of lab India. The Federation of Indian Chambers of L&T Special Steels and Heavy Forgings Private Limited Yes No Yes No No Yes Yes Yes Yes Λ ΛΛ Struck off from the register of companies on June 26, 2018 ΑΛΛ The Company through its subsidiary has acquired stake on February 1, 2019 Sr. No. Provident Fund Trust The Company has been incorporated on September 24, 2018 $$ $$$ The Company has sold its stake on June 28, 2018 Yes Yes Yes L&T Geo- L&T UJV CMRL CS@@ WOS of L&T Geostructure LLP WOS of L&T Geostructure LLP 115 L&T Cutting Tools Limited ### 116 EWAC Alloys Limited % WOS WOS 117 Larsen & Toubro Readymix & Asphalt Concrete Industries LLC %% Subsidiary of Larsen & Toubro International FZE Yes Yes Yes No No WOS of Larsen & Toubro International FZE Subsidiary of Larsen & Toubro International FZE Subsidiary of L&T Hydrocarbon Engineering Limited No Yes Struck off from the Register of Companies on August 8, 2018 Applied for strike off The Company has been incorporated on December 18, 2018 ** The Company through its subsidiary has acquired stake on October 15, 2018 2 Magtorq Private Limited 3 Feedback Infra Private Limited* LARSEN & TOUBRO Sr. No. Joint Venture Companies 1. L&T-Sargent & Lundy Limited 3. L&T Interstate Road Corridor Limited 5. L&T Chennai-Tada Tollway Limited 7. L&T BPP Tollway Limited ** 9. L&T Rajkot-Vadinar Tollway Limited *The Company has sold its stake on March 19, 2018 (ii) Names of joint ventures with whom transactions were carried out during the year: L&T-Chiyoda Limited 114 1 Sr. No. *** The Company has been incorporated on July 1, 2018 # In the process of liquidation ## Reclassified as subsidiary w.e.f. August 16, 2017 due to purchase of additional stake ### The Company has sold its stake on September 27, 2017 % The Company has sold its stake on November 16, 2017 %% The Company through its subsidiary has sold its stake on September 28, 2017 %%% The Company has been incorporated on September 9, 2018 @ @@ The arrangement entered on September 14, 2018 assessed as subsidiary since the Company through its subsidiary exercises unilateral control The arrangement entered on January 4, 2019 assessed as subsidiary since the Company through its subsidiary exercises unilateral control @@@ The Company has been incorporated on November 20, 2018 Notes forming part of the Financial Statements (contd.) NOTE [51] (contd.) Name of associates with whom transactions were carried out during the year: (b) (i) Associate Companies L&T Geo- L&T JV for Maharatangarh project @ 113 WOS of Larsen & Toubro Infotech Limited WOS No No Yes No No 391 392 NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 Notes forming part of the Financial Statements (contd.) NOTE [51] (contd.) (a) List of related parties over which control exist and status of transactions entered during the year: (contd.) Name of the Subsidiary Company Sr Nature of relationship Transaction entered No. during the year (Yes/ No) 95 L&T Electricals & Automation Saudi Arabia Company Limited LLC Yes Subsidiary of Larsen & Toubro International FZE Subsidiary of Larsen & Toubro International FZE Subsidiary of L&T Hydrocarbon Engineering Limited Subsidiary of Larsen & Toubro International FZE Subsidiary of Larsen & Toubro International FZE WOS of Larsen & Toubro International FZE Subsidiary of L&T Hydrocarbon Engineering Limited 94 Yes 87 Thalest Limited WOS of Larsen & Toubro International FZE No 88 Servowatch Systems Limited WOS of Thalest Limited Yes 89 Larsen & Toubro (Oman) LLC 90 L&T Modular Fabrication Yard LLC 91 Larsen & Toubro (East Asia) SDN.BHD 92 Larsen & Toubro Qatar LLC # 93 L&T Overseas Projects Nigeria Limited PT Larsen & Toubro Hydrocarbon Engineering Indonesia Joint Venture Companies Yes Larsen & Toubro Kuwait Construction General Contracting Tamco Electrical Industries Australia Pty Limited 105 PT Tamco Indonesia 106 Larsen & Toubro Heavy Engineering LLC 107 L&T Electrical & Automation FZE 108 109 Larsen & Toubro T&D SA (Proprietary) Limited 110 L&T Technology Services LLC Kana Controls General Trading & Contracting Company W.L.L. WOS of Larsen & Toubro International FZE Subsidiary of L&T Electrical & Automation FZE Subsidiary of Larsen & Toubro International FZE WOS of L&T Technology Services Limited 111 Larsen & Toubro Infotech Austria GmbH 112 L&T Global Holdings Limited 104 96 Yes Subsidiary of L&T Hydrocarbon Engineering Limited Company WLL 97 Larsen & Toubro (Saudi Arabia) LLC Subsidiary of L&T Hydrocarbon Engineering Limited Subsidiary Yes Yes 98 Larsen Toubro Arabia LLC 99 L&T Hydrocarbon Saudi Company (formerly known as Larsen & 100 Toubro ATCO Saudia LLC) Tamco Switchgear (Malaysia) SDN. BHD 101 Henikwon Corporation SDN. BHD 102 Esencia Technologies Inc. 103 L&T Infotech S. DE R.L. DE C.V. WOS of L&T Hydrocarbon Engineering Limited WOS of Larsen & Toubro International FZE WOS of Tamco Switchgear (Malaysia) SDN. BHD WOS of L&T Technology Services LLC Subsidiary of Larsen & Toubro Infotech Limited Ahmedabad-Maliya Tollway Limited L&T Halol-Shamlaji Tollway Limited Krishnagiri Walajahpet Tollway Limited** Devihalli Hassan Tollway Limited ** L&T Howden Private Limited Sr. No. 2. 10 L&T Asian Realty Project LLP Subsidiary of L&T Realty Limited Yes 11 L&T Parel Project LLP 12 13 L&T Vision Ventures Limited 14 L&T Power Limited 15 L&T Cassidian Limited $$$ Chennai Vision Developers Private Limited Subsidiary of L&T Realty Limited WOS of L&T Realty Limited Subsidiary of L&T Realty Limited Subsidiary WOS Yes Yes Yes WOS 9 Hi-Tech Rock Products and Aggregates Limited WOS Yes 5 L&T Seawoods Limited WOS Yes 6 Kesun Iron and Steel Company Private Limited Subsidiary Yes 7 L&T Geostructure LLP Subsidiary Yes 8 L&T Valves Limited WOS Yes L&T Realty Limited 4 Yes Yes 22 L&T Capital Market (Middle East) Ltd*** WOS of L&T Finance Holdings Limited Yes 23 L&T Hydrocarbon International FZE%%% WOS of L&T Hydrocarbon Engineering Limited Yes 24 Graphene Solutions PTE Ltd. ** 25 Graphene Solutions SDN.BHD ** 26 Graphene Solutions Taiwan Limited ** 27 28 31 Nielsen+Partner S.A^^^ Larsen & Toubro Infotech Norge AS @@@ Nielsen+Partner Unternehmensberater GmbH^^^ No Yes WOS of Syncordis S.A. 21 16 L&T Aviation Services Private Limited WOS Yes 17 Larsen & Toubro Infotech Limited 18 L&T Finance Holdings Limited Subsidiary Subsidiary Yes Yes 19 Syncordis S.A. WOS of Larsen & Toubro Infotech GmbH No 20 Syncordis SARL WOS of Syncordis S.A. No Syncordis Limited Yes Yes L&T Electricals and Automation Limited 23. Krishnagiri Thopur Toll Road Limited ** 24. L&T-Gulf Private Limited L&T-MHPS Boilers Private Limited L&T-MHPS Turbine Generators Private Limited Raykal Aluminium Company Private Limited L&T Special Steels and Heavy Forgings Private Limited 25. Western Andhra Tollways Limited ** 27. Vadodara Bharuch Tollway Limited 29. L&T Transportation Infrastructure Limited 31. L&T MBDA Missile Systems Limited 26. PNG Tollway Limited 28. L&T Kobelco Machinery Private Limited 30. 22. 32. Panipat Elevated Corridor Limited 20. 4. 6. 8. 10. 11. L&T Deccan Tollways Limited 12. 13. L&T Samakhiali Gandhidham Tollway Limited 14. L&T Sapura Shipping Private Limited L&T Sapura Offshore Private Limited 15. Kudgi Transmission Limited 16. 17. L&T Sambalpur-Rourkela Tollway limited 18. 19. L&T Infrastructure Development Projects Limited 21. Wholly owned subsidiary (WOS) Larsen & Toubro Electromech LLC *** * Reclassified as associate w.e.f. August 14, 2018 on amendment to Articles of Association ** The Company has sold its stake on May 4, 2018 Notes forming part of the Financial Statements (contd.) NOTE [51] Disclosure of related parties/related party transactions pursuant to Ind AS 24 "Related Party Disclosures" (a) List of related parties over which control exists and status of transactions entered during the year: Sr Name of the Subsidiary Company Nature of relationship Transaction entered No. during the year (Yes/ No) 1 Bhilai Power Supply Company Limited Subsidiary Yes 2 L&T Shipbuilding Limited Subsidiary Yes 3 NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 LTIDPL INDVIT Services Limited* 390 All the above defined benefit plans expose the Company to general actuarial risks such as Interest rate risk and market (investment) risk. *** Reclassified as subsidiary w.e.f. August 16, 2017 due to purchase of additional stake LARSEN & TOUBRO Notes forming part of the Financial Statements (contd.) NOTE [50] (contd.) Disclosure pursuant to Ind AS 19 "Employee Benefits" (contd.) h) Characteristics of defined benefit plans and associated risks: Gratuity plan: 1 2 3 4 The Company operates gratuity plan through a trust wherein every employee is entitled to the benefit equivalent to fifteen days last salary drawn for each completed year of service. The same is payable on termination of service or retirement whichever is earlier. The benefit vests after five years of continuous service. The Company's scheme is more favorable as compared to the obligation under Payment of Gratuity Act, 1972. The defined benefit plan for gratuity of the Company is administered by separate gratuity funds that are legally separate from the Company. The trustees nominated by the Company are responsible for the administration of the plan. There are no minimum funding requirements of these plans. The funding of these plans are based on gratuity fund's actuarial measurement framework set out in the funding policies of the plan. These actuarial measurements are similar compared to the assumptions set out in (g) supra. Employees do not contribute to any of these plans. Unfunded gratuity represents a small part of gratuity plan which is not material. Further, the unfunded portion includes amounts payable in respect of the Company's foreign operations which result in gratuity payable to employees engaged as per the local laws of country of operation. Post-retirement medical care plan: The Post-retirement medical benefit plan provides for reimbursement of health care costs to certain categories of employees post their retirement. The reimbursement is subject to an overall ceiling sanctioned based on cadre of the employee at the time of retirement. The plan is unfunded. Employees do not contribute to the plan. Company's pension plan: In addition to contribution to state-managed pension plan (EPS scheme), the Company operates a post retirement pension scheme, which is discretionary in nature for certain cadres of employees. The quantum of pension depends on the cadre of the employee at the time of retirement. The plan is unfunded. Employees do not contribute to the plan. Trust managed provident fund plan: The Company manages provident fund plan through a provident fund trust for its employees which is permitted under The Employees' Provident Fund and Miscellaneous Provisions Act, 1952. The plan mandates contribution by employer at a fixed percentage of employee's salary. Employees also contribute to the plan at a fixed percentage of their salary as a minimum contribution and additional sums at their discretion. The plan guarantees interest at the rate notified by Employees' Provident Fund Organisation. The contribution by employer and employee together with interest are payable at the time of separation from service or retirement whichever is earlier. The benefit under this plan vests immediately on rendering of service. The interest payment obligation of trust-managed provident fund is assumed to be adequately covered by the interest income on long term investments of the fund. Any shortfall in the interest income over the interest obligation is recognised immediately in the Statement of Profit and Loss as actuarial loss. Any loss/gain arising out of the investment risk and actuarial risk associated with the plan is also recognised as expense or income in the period in which such loss/ gain occurs. 389 29 Nielsen+Partner Unternehmensberater AG^^^ 30 Nielsen+Partner Pte Ltd^^^ No No 158.57 352.83 Associates, including: 7.44 3.82 Feedback Infra Private Limited 1.50 L&T- Chiyoda Limited L&T-MHPS Turbine Generators Private Limited Magtorq Private Limited 1.07 6.37 2.10 2620.22 3303.53 Notes forming part of the Financial Statements (contd.) NOTE [51] (contd.) (c) Disclosure of related party transactions: (contd.) LARSEN & TOUBRO Total 1382.61 773.12 L&T-MHPS Boilers Private Limited No. i. Amount Amounts for major parties Amount Amounts for major parties Purchase of goods & services (including commission paid) Subsidiaries, including: L&T Shipbuilding Limited 1539.40 1497.24 473.53 729.89 Hi-Tech Rock Products and Aggregates Limited 360.04 244.57 L&T Geostructure LLP 400.56 237.24 Joint ventures, including: 1073.38 1802.47 crore L&T Metro Rail (Hyderabad) Limited L&T Hydrocarbon Engineering Limited L&T Parel Project LLP 147.20 178.54 0.13 0.13 0.13 0.13 1786.79 159.44 1470.90 (b) Reversal of sale of goods/contract revenue & services Subsidiary: 4.16 0.26 Nabha Power Limited 4.16 0.26 Joint ventures, including: 25.99 0.28 87.07 Nature of transaction/relationship/major parties 132.96 188.42 Joint ventures, including: L&T Infrastructure Development Projects Limited L&T Deccan Tollways Limited L&T-MHPS Boilers Private Limited Associate: L&T- Chiyoda Limited Total 2018-19 2017-18 Sr. No. Nature of transaction/relationship/major parties Amount Amounts for major parties Amount Amounts for major parties ii. (a) Sale of goods/contract revenue & services Subsidiaries, including: 1311.33 1370.69 371.94 570.22 770.34 415.97 Sr. 2017-18 2018-19 Sr. No. Executive Directors Sr. No. 1. Mr. S. N. Subrahmanyan (Chief Executive Officer and Managing Director)# 2. 3. Mr. Shailendra Roy (Whole-time Director) 5. Mr. M. V. Satish (Whole-time Director) Sr. No. Independent/Non-Executive Directors 46 Sr. No. نه Executive Directors Mr. R. Shankar Raman (Whole-time Director & Chief Financial Officer) Mr. D. K. Sen (Whole-time Director) Mr. J.D. Patil (Whole-time Director)** Independent/Non-Executive Directors Mr. M. M. Chitale (iv) Name of key management personnel and their relatives with whom transactions were carried out during the year: (c) NOTE [51] (contd.) NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 1 2 Larsen & Toubro Limited Provident Fund of 1952 3 Larsen & Toubro Limited Provident Fund 4 (iii) Name of post-employment benefit plans with whom transactions were carried out during the year: L&T Kansbahal Officers & Supervisory Provident Fund 5 L&T Kansbahal Staff & Workmen Provident Fund Sr. No. Gratuity Trust 1 Larsen & Toubro Officers & Supervisors Gratuity Fund 2 Larsen & Toubro Gratuity Fund Superannuation Trust Larsen & Toubro Limited Senior Officers' Superannuation Scheme 393 394 Notes forming part of the Financial Statements (contd.) L&T Deccan Tollways Limited 1. 3. Arvind Gupta ## 16. Mr. Narayanan Kumar Mr.Hemant Bhargava *** 17. Mr. Sushobhan Sarker### * w.e.f. October 1, 2017 # w.e.f. July 1,2017 ** *** (Group Executive Chairman till September 30, 2017) Appointed w.e.f. July 1, 2017 Appointed w.e.f. May 28, 2018 (Whole-time Director till June 30, 2017) ## Appointed w.e.f. July 1, 2017 ### Ceased w.e.f. May 2, 2018 Disclosure of related party transactions: crore 15. Mr. A.M. Naik (Group Chairman)* 14. 13. Mr. Subodh Bhargava 4. Mr. M. Damodaran 5. Mr. Vikram Singh Mehta 6. Mr. Adil Zainulbhai 7. Mr. Akhilesh Krishna Gupta 8. Mrs. Sunita Sharma 9. Mr. Thomas Mathew T 10. Mr. Ajay Shankar 11. Mr. Subramanian Sarma 12. Mrs. Naina Lal Kidwai Mr. Sanjeev Aga 23.86 L&T Samakhiali Gandhidham Tollway Limited 0.28 250.00 250.00 28.53 28.53 L&T Seawoods Limited L&T Finance Limited Total 345.00 345.00 260.75 211.89 76 L&T Infra Contractors Private Limited 77 Larsen & Toubro LLC 78 Larsen & Toubro Infotech GmbH 79 Larsen & Toubro Infotech Canada Limited 28.53 80 250.00 214.43 crore 2018-19 2017-18 Amount Amounts for major parties Amount Amounts for major parties 75 488.11 2771.16 220.20 249.40 436.57 2000.00 1.17 261.01 0.48 0.69 489.28 260.65 3032.17 181.76 181.76 214.43 396.19 Subsidiaries: Larsen & Toubro Infotech LLC L&T Infotech Financial Services Technologies Inc. WOS of Graphene Semiconductor Services Private Limited Subsidiary of Larsen and Toubro Infotech Limited No No WOS Yes WOS of L&T Capital Company Limited No WOS Yes WOS Yes Subsidiary Yes Yes Yes No No No No No 81 WOS of L&T Technology Services Limited WOS of L&T Realty Limited 82 Larsen & Toubro Infotech South Africa (PTY) Limited 83 84 L&T Information Technology Services (Shanghai) Co. Ltd. L&T Realty FZE 85 Larsen & Toubro International FZE 86 Larsen & Toubro Hydrocarbon International Limited LLC# Graphene Semiconductor Services Private Limited ** Ruletronics Systems Private Limited ^^^ L&T Hydrocarbon Engineering Limited Sahibganj Ganges Bridge-Company Private Limited# Seawoods Retail Private Limited^^ Seawoods Realty Private Limited^^ Marine Infrastructure Developer Private Limited^ WOS of L&T Capital Company Limited Subsidiary WOS of Larsen & Toubro Infotech Limited WOS of Larsen & Toubro Infotech Limited WOS of Larsen & Toubro Infotech Limited WOS of Larsen & Toubro Infotech Limited Subsidiary of Larsen & Toubro Infotech Limited WOS of Larsen & Toubro Infotech Limited WOS of L&T Global Holdings Limited Subsidiary No Sale/Redemption of investments in Total L&T Special Steels and Heavy Forgings Private Limited 0.13 L&T-MHPS Turbine Generators Private Limited 0.13 0.01 L&T Kobelco Machinery Private Limited 0.12 Total 65.63 9.50 iv. Sale of property, plant and equipment Subsidiaries, including: 5.58 0.54 L&T Geostructure LLP 1.95 L&T Hydrocarbon Engineering Limited 3.07 0.01 0.50 0.38 1.25 Total 30.15 0.54 iii. Purchase/lease of property, plant and equipment Subsidiaries, including: L&T Shipbuilding Limited Larsen & Toubro (Oman) LLC Larsen & Toubro Heavy Engineering LLC 65.25 9.49 15.00 9.25 33.48 L&T Construction Equipment Limited 5.75 L&T Hydrocarbon Engineering Limited 2.20 Larsen & Toubro Infotech Limited Joint ventures: L&T Finance Limited Joint venture: L&T-MHPS Boilers Private Limited L&T Shipbuilding Limited L&T Finance Holdings Limited Joint ventures, including: L&T MBDA Missile Systems Limited L&T-MHPS Turbine Generators Private Limited L&T Special Steels and Heavy Forgings Private Limited Total vi. Investments in preference share (debt portion) Subsidiary: L&T Shipbuilding Limited Joint venture: Total vii. L&T Special Steels and Heavy Forgings Private Limited Subscription to debentures/bonds net of redemptions viii. Subsidiaries: L&T Metro Rail (Hyderabad) Limited L&T Uttaranchal Hydropower Limited 0.69 L&T Metro Rail (Hyderabad) Limited Investments including subscription to equity shares and preference shares (equity portion) 0.69 Key management personnel: 6.25 Mr. Shailendra Roy 6.25 Total 12.52 0.54 395 396 NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 Notes forming part of the Financial Statements (contd.) NOTE [51] (contd.) (c) Disclosure of related party transactions: (contd.) Sr. Nature of transaction/relationship/major parties No. V. Subsidiaries, including: 32 Nielsen&Partner Company Limited^^^ Larsen & Toubro Officers & Supervisory Staff Provident Fund Nielsen&Partner Pty Ltd^^^ Total 0.08 0.03 Mr. D.K. Sen 0.08 0.03 Key management personnel: 17.78 16.87 L&T- Chiyoda Limited 17.78 16.87 Associate: 8.03 L&T-MHPS Turbine Generators Private Limited 13.58 11.75 L&T-Sargent & Lundy Limited 40.86 35.00 L&T-MHPS Boilers Private Limited 613.30 90.38 640.74 398 PT Tamco Indonesia 6.99 5.95 1.19 1.00 L&T Electricals & Automation Saudi Arabia Company Limited LLC L&T Electrical and Automation FZE 11.06 9.75 xiv(a) Charges incurred for deputation of employees from related parties Subsidiaries, including: Amount Amounts for major parties Amount Amounts for major parties No. Nature of transaction/relationship/major parties Sr. 2017-18 2018-19 crore (c) Disclosure of related party transactions: (contd.) NOTE [51] (contd.) Notes forming part of the Financial Statements (contd.) NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 397 77.84 Joint ventures, including: 53.55 0.80 0.28 0.31 PT Tamco Indonesia 0.26 L&T Electrical & Automation FZE 1.16 0.97 Subsidiaries, including: arrangements Rent paid, including lease rentals under leasing/hire purchase xii. 141.98 159.74 Total 4.18 4.92 L&T-Sargent & Lundy Limited 4.36 5.42 Joint ventures, including: 105.35 17.86 Larsen & Toubro Infotech Limited 0.31 Joint Ventures, including: 1.24 107.92 122.10 68.87 L&T Finance Limited L&T Geostructure LLP 132.20 L&T Hydrocarbon Engineering Limited 55.58 L&T Technology Services Limited 77.58 1.45 77.24 532.50 518.56 Subsidiaries, including: Rent received, overheads recovered and miscellaneous income Xiii. 1.16 2.21 Total 1.20 L&T Special Steels and Heavy Forgings Private Limited Larsen & Toubro Infotech Limited 16.58 1.50 9.75 2.00 3.75 7.95 10.58 7.95 10.58 535.59 1333.42 11.94 7.50 19.44 318.00 60.90 331.21 93.58 95.57 163.90 353.60 535.59 1313.98 Total 3.75 L&T Kobelco Machinery Private Limited 2.00 9.95 33 345.00 210.00 50.75 260.75 ix. Inter corporate deposits given to/(repaid by) Subsidiaries (net) including: 457.79 (1202.30) L&T Shipbuilding Limited Nabha Power Limited 229.00 (210.88) (286.50) (986.21) L&T Hydrocarbon Engineering Limited 54.03 Hi-Tech Rock Products and Aggregates Limited 299.78 L&T Metro Rail (Hyderabad) Limited 106.86 Joint venture: 84.48 14.33 Joint venture: L&T Construction Equipment Limited Subsidiary: 1.35 L&T Special Steels and Heavy Forgings Private Limited 0.50 0.61 L&T-MHPS Boilers Private Limited 4.65 3.58 Joint ventures, including: 14.30 13.97 L&T Geostructure LLP 11.40 13.88 L&T Construction Equipment Limited 24.58 18.59 L&T Parel Project LLP 88.00 90.02 (b) Charges recovered for deputation of employees to related parties Subsidiaries, including: 11.06 1.97 L&T Infrastructure Development Projects Limited 1.62 2.17 Commission received, including those under agency arrangements xvi. Total L&T-MHPS Boilers Private Limited L&T-Sargent & Lundy Limited L&T Construction Equipment Limited Joint ventures: L&T Hydrocarbon Engineering Limited L&T Finance Holdings Limited L&T Technology Services Limited Larsen & Toubro Infotech Limited Total Subsidiaries, including: XV. 108.46 106.48 Total 15.81 12.88 L&T- Chiyoda Limited 15.81 12.88 Associate: Dividend received L&T Aviation Services Private Limited 264.98 137.62 L&T Financial Consultants Limited 48 L&T Infra Investment Partners Trustee Private Limited 47 No. Sr LARSEN & TOUBRO Yes Yes Yes No No Yes WOS of L&T Infrastructure Finance Company Limited WOS of L&T Finance Holdings Limited Subsidiary of L&T Finance Holdings Limited WOS of L&T Finance Holdings Limited WOS of L&T Finance Holdings Limited WOS of Syncordis S.A. L&T Infra Investment Partners Advisory Private Limited 46 L&T Infra Debt Fund Limited 45 L&T Infrastructure Finance Company Limited Notes forming part of the Financial Statements (contd.) 44 NOTE [51] (contd.) Nature of relationship Yes WOS L&T Power Development Limited 52 Yes WOS of L&T Capital Company Limited L&T Trustee Company Private Limited $$ 51 Yes WOS L&T Capital Company Limited 50 Yes WOS of L&T Financial Consultants Limited Mudit Cement Private Limited 49 Yes No No) Transaction entered during the year (Yes/ WOS of L&T Infrastructure Finance Company Limited WOS of L&T Finance Holdings Limited (a) List of related parties over which control exist and status of transactions entered during the year: (contd.) Name of the Subsidiary Company Syncordis Support Services S.A. 43 L&T Mutual Fund Trustee Limited No WOS of Larsen and Toubro Infotech Gmbh No WOS of Nielsen + Partners Germany No WOS of Nielsen + Partners Germany No WOS of Nielsen + Partners Germany No WOS of Nielsen + Partners Germany No WOS of Nielsen + Partners Germany No No No No No WOS of Graphene Semiconductor Services Private Limited WOS of Graphene Semiconductor Services Private Limited WOS of Graphene Semiconductor Services Private Limited WOS of Larsen and Toubro Infotech Limited WOS of Larsen & Toubro Infotech GmbH 114.79 34 Ruletronics Limited^^^ 35 WOS of Larsen and Toubro Infotech Gmbh No 36 42 L&T Investment Management Limited 41 Yes WOS of L&T Finance Holding Limited L&T Capital Markets Limited 40 No WOS of Larsen & Toubro Infotech Limited L&T Information Technology Spain, S.L. 53 39 WOS of L&T Finance Holdings Limited L&T Finance Limited 38 No Subsidiary of L&T Infrastructure Finance Company Limited L&T Infra Investment Partners 37 Yes WOS of L&T Finance Holdings Limited L&T Housing Finance Limited Yes L&T Uttaranchal Hydropower Limited Ruletronics Systems Inc^^^ Yes (c) Disclosure of related party transactions: (contd.) 74 73 72 71 70 Seastar Labs Private Limited ** 69 68 Yes Subsidiary of L&T Technology Services Limited L&T Thales Technology Services Private Limited 67 Yes WOS L&T Infrastructure Engineering Limited 66 Yes WOS L&T Construction Machinery Limited * 65 LARSEN & TOUBRO crore 2018-19 2017-18 420.80 WOS of L&T Power Development Limited (393.80) 124.41 294.89 (275.34) (129.91) Larsen & Toubro Infotech Limited Subsidiaries, including: Charges paid for miscellaneous services L&T Hydrocarbon Engineering Limited Yes L&T Seawoods Limited 154.32 420.80 (393.80) Inter corporate borrowing taken from/(repaid to) Subsidiaries (net) including: X. Amount Amounts for major parties Amount Amounts for major parties No. Nature of transaction/relationship/major parties Sr. Total WOS xi. 64 No WOS of L&T Power Development Limited Subsidiary of Larsen & Toubro Infotech Limited WOS of Esencia Technologies, Inc. L&T Arunachal Hydropower Limited 59 Syncordis Software Services India Private Limited 58 Yes Subsidiary of L&T Realty Limited No Esencia Technologies India Private Limited 57 56 Subsidiary of L&T Realty Limited L&T Westend Project LLP 55 Yes Subsidiary L&T Construction Equipment Limited 54 Larsen & Toubro Electromech LLC ## LTR SSM Private Limited $ Yes No L&T Himachal Hydropower Limited Yes 63 Yes Subsidiary L&T Metro Rail (Hyderabad) Limited L&T Technology Services Limited 62 Notes forming part of the Financial Statements (contd.) (990.41) 542.27 NOTE [51] (contd.) 211.89 Subsidiary WOS of L&T Power Development Limited Total 61 Yes WOS of L&T Power Development Limited Yes 84.48 Nabha Power Limited 60 2017-18 2 2018-19 Particulars The following potential ordinary shares are anti-dilutive and are therefore excluded from the weighted average number of equity shares for the purpose of diluted earnings per share: 2 Weighted average number of equity shares outstanding for diluted EPS 38.37 47.54 24,57,688 35,69,417 1,40,45,44,721 1,40,41,83,368 D=B+C A/D Diluted EPS (*) Weighted average number of potential equity shares on account of conversion of foreign currency convertible bonds Add: Weighted average number of potential equity shares on account of employee stock options 1,40,06,13,951 Face value per share (₹) 95,20,455 Principal place of NOTE [53] Proportion of direct ownership (%) 1,40,20,87,033 As at 31-3-2018 Proportion of effective ownership held (%) of effective voting power Proportion Proportion of effective ownership Interest (%) 95,20,455 ownership (%) Proportion of direct Name of the subsidiary company No. Sr. As at 31-3-2019 Investment in following subsidiary companies, joint venture companies and associates is accounted at cost. Subsidiaries: Disclosure pursuant to Ind AS 27 "Separate Financial Statements" business Weighted average number of equity shares outstanding NOTE [52] 6677.70 Notes forming part of the Financial Statements (contd.) LARSEN & TOUBRO 2. The amount of outstanding balances as shown above are unsecured and will be settled/recovered in cash. Note: 1. All the related party contracts / arrangements have been entered on arm's length basis. # Includes commission due to non-executive directors 3.70 crore (as at 31-3-2018: 3.08 crore). "Major parties" denote entities account for 10% or more of the aggregate for that category of transaction during respective period. 61.29 Basic and Diluted Earnings per share [EPS] computed in accordance with Ind AS 33 "Earnings per Share”: 30.14 21.84 23.37 52.73 23.54 0.81 0.81 0.68 25.08 5387.30 Basic earnings per share Profit after tax as per accounts (crore) ABC 38.46 47.63 A/B 1,40,06,13,951 1,40,20,87,033 B Particulars 5387.30 A 2017-18 2018-19 Profit after tax as per accounts (crore) Diluted earnings per share Basic EPS (*) Weighted average number of equity shares outstanding 6677.70 Interest (%) Kesun Iron & Steel Company Private Limited India Indian subsidiaries 100.00 74.00 India L&T Geostructure LLP 7 95.00 95.00 100.00 95.00 95.00 95.00 100.00 100.00 100.00 100.00 100.00 95.00 100.00 74.00 74.00 100.00 0.90 100.00 100.00 India L&T Realty Limited 9 74.00 100.00 100.00 100.00 100.00 100.00 India L&T Valves Limited 8 100.00 India L&T Seawoods Limited 56 97.00 97.00 97.00 97.00 India L&T Shipbuilding Limited [refer Note 60(a)] 2 97.00 99.90 99.90 99.90 99.90 99.90 India Bhilai Power Supply Company Limited 1 99.90 97.00 3 L&T Electricals and Automation Limited Limited 100.00 100.00 100.00 100.00 100.00 100.00 India Hi-Tech Rock Products and Aggregates 4 100.00 100.00 100.00 100.00 100.00 100.00 India Proportion of effective voting power held (%) 1.81 Commitment to fund 2.04 1.87 3.63 19.06 Magtorq Private Limited L&T-Chiyoda Limited 5.50 19.92 Associates, including: Total 103.60 667.58 394.67 42.63 L&T-MHPS Turbine Generators Private Limited 207.55 L&T-MHPS Boilers Private Limited 1205.16 392.05 L&T Howden Private Limited Joint ventures, including: 2578.57 xiii. L&T Metro Rail (Hyderabad) Limited 1329.55 2343.95 Subsidiaries, including: xiv. Revenue commitment received 715.45 845.00 2687.30 Total 233.45 298.00 547.00 L&T Metro Rail (Hyderabad) Limited L&T Uttaranchal Hydropower Limited 715.45 845.00 Subsidiaries: 482.00 651.26 914.90 1185.88 L&T Shipbuilding Limited 84.39 32.15 Subsidiaries, including: xii. (a) Capital commitment given Amount Amounts for major parties major parties 30.00 Amount Amounts for Category of balance/relationship/major parties Sr. As at 31-3-2018 As at 31-3-2019 crore LARSEN & TOUBRO 100.00 No. L&T Geostructure LLP 47.25 33.59 937.64 1476.64 2166.60 L&T Shipbuilding Limited Subsidiaries, including: (b) Revenue commitment given 84.52 Larsen & Toubro Heavy Engineering LLC 32.27 0.10 0.13 0.02 L&T Special Steels and Heavy Forgings Private Limited L&T-MHPS Turbine Generators Private Limited 0.13 0.12 Joint ventures: Total 693.54 L&T Parel Project LLP 969.27 508.34 456.24 Joint ventures, including: 3707.00 4025.00 Nabha Power Limited 3156.00 L&T-MHPS Turbine Generators Private Limited L&T-MHPS Boilers Private Limited L&T Shipbuilding Limited 8691.05 18476.12 8442.15 Larsen Toubro Arabia LLC L&T Hydrocarbon Engineering Limited 27221.33 38051.01 Subsidiaries, including: 5971.38 Guarantee given on behalf of 427.31 89.39 8.56 6.60 Total PNG Tollway Limited L&T-MHPS Boilers Private Limited Joint ventures, including: L&T Parel Project LLP 418.95 PT. Tamco Indonesia L&T Electricals & Automation Saudi Arabia Company Limited LLC Larsen & Toubro Heavy Engineering LLC Nabha Power Limited Subsidiaries, including: xvi. Provision for doubtful debts related to the amount of outstanding balances 27729.67 38507.25 Total L&T Hydrocarbon Engineering Limited XV. Amount Amounts for major parties major parties L&T BPP Tollway Limited L&T Samakhiali Gandhidham Tollway Limited L&T Infrastructure Development Projects Limited Krishnagiri Thopur Toll Road Limited L&T Deccan Tollways Limited 69.19 18.77 L&T-Gulf Private Limited L&T MBDA Missile Systems Limited Total 76.10 Joint ventures, including: 156.46 320.82 L&T Construction Equipment Limited 149.67 L&T Asian Realty Project LLP 195.41 88.31 15.24 13.70 13.63 As at 31-3-2018 crore Amount Amounts for As at 31-3-2019 No. Category of balance/relationship/major parties Sr. (d) Amount due to/from related parties: (contd.) NOTE [51] (contd.) Notes forming part of the Financial Statements (contd.) NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 406 405 1405.65 2432.26 20.43 13.08 3.52 100.00 2 10 100.00 100.00 4.35 100.00 100.00 4.35 Saudi Arabia 4 Kindgom of 3 100.00 100.00 90.00 100.00 100.00 90.00 Larsen & Toubro (Saudi Arabia) LLC Saudi Arabia L&T Global Holdings Limited 100.00 Proportion Proportion Proportion Principal place of business No. Name of the associate company Sr. UAE As at 31-3-2018 Associate companies: # In the process of liquidation 100.00 100.00 100.00 100.00 100.00 As at 31-3-2019 Proportion Limited LLC# (d) Amount due to/from related parties: (contd.) Proportion of effective ownership Proportion Interest (%) (%) ownership business of effective voting power held (%) of direct Principal place of Name of the subsidiary company No. Sr. As at 31-3-2019 Foreign subsidiaries: $ The Company has sold its stake on June 28, 2018 Proportion Larsen & Toubro Hydrocarbon International Kindgom of Proportion of direct As at 31-3-2018 99.19 99.19 95.24 98.80 98.80 95.24 USA ownership Larsen & Toubro LLC held (%) Interest (%) (%) Proportion of effective voting power ownership of effective Proportion 1 Proportion of direct of effective 404 403 426.30 32.73 12.22 19.56 294.89 NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 129.91 Total L&T Valves Limited L&T Seawoods Limited L&T Hydrocarbon Engineering Limited 32.73 Subsidiaries, including: viii. Unsecured loans (including lease finance) 426.30 19.45 Notes forming part of the Financial Statements (contd.) (d) Amount due to/from related parties: (contd.) 5.48 L&T Hydrocarbon Engineering Limited L&T Seawoods Limited 74.69 40.33 Subsidiaries, including: Advances received in the capacity of supplier of goods/services classified as "advances from customers" in the Balance Sheet NOTE [51] (contd.) ix. major parties As at 31-3-2018 As at 31-3-2019 Amount Amounts for crore No. Category of balance/relationship/major parties Sr. Amount Amounts for major parties 19.45 19.45 Total Gujarat Leather Industries Limited @ 1 held (%) Interest (%) (%) held (%) Interest (%) India (%) ownership ownership ownership voting power ownership of effective of direct of effective Proportion of effective voting power 50.00 50.00 50.00 L&T Uttaranchal Hydropower Limited Subsidiary: Advances against equity contribution vii. @Under liquidation 42.85 42.85 42.85 42.85 42.85 42.85 India Magtorq Private Limited 2 50.00 50.00 50.00 The Company is incorporated on December 18, 2018 Striked off on June 26, 2018 Λ * Applied for strike off 100.00 India L&T Power Development Limited 16 100.00 100.00 100.00 100.00 100.00 100.00 India L&T Capital Company Limited 15 64.01 64.01 64.01 100.00 63.91 100.00 100.00 Interest (%) (%) ownership Proportion of effective of effective Proportion Principal place of business 100.00 Name of the subsidiary company Sr. NOTE [53] (contd.) Notes forming part of the Financial Statements (contd.) NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 408 407 100.00 No. 63.91 63.91 India 100.00 100.00 100.00 100.00 100.00 India L&T Cassidian Limited% 100.00 11 99.99 99.99 99.99 99.99 99.99 India L&T Power Limited 99.99 12 L&T Aviation Services Private Limited India L&T Finance Holdings Limited 14 82.96 82.96 82.96 74.80 74.80 74.80 India Larsen & Toubro Infotech Limited 13 100.00 100.00 100.00 100.00 100.00 100.00 held (%) 100.00 Proportion of direct ownership voting power 100.00 100.00 100.00 India L&T Construction Machinery Limited* 22 100.00 23 100.00 100.00 100.00 100.00 India L&T Hydrocarbon Engineering Limited 21 100.00 100.00 100.00 Seawoods Retail Private Limited^ 100.00 % Limited$ 97.00 97.00 97.00 India Marine Infrastructure Developer Private India 25 100.00 100.00 India Seawoods Realty Private Limited^ 24 100.00 100.00 100.00 100.00 100.00 100.00 18 99.99 99.99 99.99 99.99 99.99 99.99 L&T Technology Services Limited India 17 Indian subsidiaries of effective voting power held (%) Proportion ownership (%) As at 31-3-2018 Proportion of effective ownership Interest (%) Proportion of direct L&T Metro Rail (Hyderabad) Limited India 78.88 78.88 100.00 India L&T Infrastructure Engineering Limited 20 100.00 100.00 100.00 100.00 100.00 100.00 India L&T Construction Equipment Limited 19 88.64 88.64 88.64 78.88 As at 31-3-2019 NOTE [51] (contd.) 98.24 6.74 Key management personnel: Mr. D.K. Sen Total 0.08 0.08 0.08 XXV. Guarantee given on behalf of Subsidiaries, including: L&T Hydrocarbon Engineering Limited Larsen & Toubro Arabia LLC L&T Hydrocarbon Saudi Company LLC Joint venture: Total L&T-MHPS Turbine Generators Private Limited 14766.31 6868.13 9308.23 3217.46 4154.47 2107.86 54.26 54.26 14766.31 Rent deposit returned xxiv. 0.75 3096.52 (0.33) L&T Samakhiali Gandhidham Tollway Limited (1.54) L&T- MHPS Boilers Private Limited 1.55 21.66 Total (2.59) 16.66 Xxiii. Amount recognised in Profit and Loss on account of impairment loss on investment and inter corporate deposit 6922.39 Subsidiaries, including: 0.75 L&T Shipbuilding Limited 1167.42 Larsen & Toubro Hydrocarbon International Limited LLC 0.68 Joint ventures: 1929.10 L&T Infrastructure Development Projects Limited L&T Special Steels and Heavy Forgings Private Limited 773.00 1156.10 Total 1167.42 L&T Howden Private Limited Notes forming part of the Financial Statements (contd.) (c) Disclosure of related party transactions: (contd.) As at 31-3-2019 Amount Amounts for major parties No. Category of balance/relationship/major parties Sr. LARSEN & TOUBRO (d) Amount due to/from related parties: (contd.) NOTE [51] (contd.) Notes forming part of the Financial Statements (contd.) 1854.93 2116.87 Total 260.36 253.06 L&T Infrastructure Development Private Limited 509.49 488.89 217.73 213.17 L&T Special Steels and Heavy Forgings Private Limited Kudgi Transmission Limited 987.58 955.12 Joint ventures: 273.07 As at 31-3-2018 crore Amount Amounts for major parties LARSEN & TOUBRO crore 2018-19 2017-18 Sr. Nature of transaction/relationship/major parties No. Amount Amounts for major parties 763.09 774.59 L&T Shipbuilding Limited NOTE [51] (contd.) 363.37 2134.44 2330.90 Subsidiaries, including: Loans & advances recoverable V. 213.17 Total 213.17 L&T Special Steels and Heavy Forgings Private Limited 213.17 iv Impairment of investment in debt securities Joint venture: Hi-Tech Rock Products and Aggregates Limited L&T Metro Rail (Hyderabad) Limited (0.09) 22.69 31.55 56.83 L&T Finance Holdings Limited 17.95 L&T Metro Rail (Hyderabad) Limited 12.15 L&T Finance Limited 16.57 Joint venture: 106.83 102.05 L&T Special Steels and Heavy Forgings Private Limited 106.83 102.05 Total 222.88 211.74 XX. Amount written off as bad debts Subsidiaries, including: 1.35 Larsen & Toubro Electromech LLC 0.59 42.13 26.39 109.69 116.05 xviii. Interest paid to Subsidiaries, including: 231.31 124.87 L&T Hydrocarbon Engineering Limited 199.36 L&T Geostructure LLP L&T Seawoods Limited 23.15 25.02 Joint venture: 0.59 1.81 L&T Infrastructure Development Projects Limited L&T-MHPS Turbine Generators Private Limited 33.06 Total 1.81 233.12 157.93 xix. Interest received from Subsidiaries, including: L&T Shipbuilding Limited Nabha Power Limited 33.06 L&T Special Steels and Heavy Forgings Private Limited Bhilai Power Supply Company Limited Joint venture: Total 0.02 XXII. Amount recognised/(reversed) in Profit and Loss as provision towards bad and doubtful debts (including expected credit loss on account of delay) Subsidiaries, including: (2.21) (6.03) Nabha Power Limited (1.48) L&T Electricals & Automation Saudi Arabia Company Limited LLC (1.74) 2.93 (7.25) L&T Parel Project LLP 0.57 L&T Seawoods Limited 0.65 Larsen & Toubro Heavy Engineering LLC (0.53) L&T Uttaranchal Hydropower Limited 0.31 L&T Hydrocarbon Engineering Limited (0.83) Joint ventures, including: (0.38) 0.01 0.01 Seawoods Realty Private Limited Seawoods Retail Private Limited Subsidiaries: 25.08 PNG Tollway Limited 25.08 Total 26.43 0.59 399 400 NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 Notes forming part of the Financial Statements (contd.) NOTE [51] (contd.) 1.26 (c) crore 2018-19 2017-18 Sr. Nature of transaction/relationship/major parties No. Amount Amounts for major parties Amount Amounts for major parties xxi. Investments written off 0.02 Disclosure of related party transactions: (contd.) 36.81 867.35 L&T Shipbuilding Limited 5.54 (e) Mr. D. K. Sen 9.79 7.96 1.83 11.49 2.33 9.16 11.58 2.42 9.16 17.81 3.75 14.06 17.69 13.99 3.70 26.95 5.67 21.28 (d) Mr. Shailendra Roy (c) Mr. R. Shankar Raman (b) Mr. S.N.Subrahmanyan upto September 30, 2017) 87.76 1.46 7.00 6.37 1.69 October 1, 2017) 4.04 1.50** 2.54 8.15 3.00 ** 5.15 (a) Mr. A.M. Naik (Group Chairman w.e.f. Non-Executive/Independent Directors: 3.95 0.81 19.38* 3.14 1.71 6.51 (g) Mr. J.D. Patil# 7.38 1.52 5.86 9.38 1.95 7.43 (f) Mr. M. V. Satish 8.06 8.22 (b) Other Non-Executive/Independent Directors Total 11.58 56.80*** Executive Directors: 45.05 Total 1.17 5.01 43.35 6.18 45.05 Towards employer's contribution to gratuity trusts, including: Larsen & Toubro Officers & Supervisors Gratuity Fund Larsen & Toubro Gratuity Fund (b) 64.13 69.02 Total 8.45 8.22 54.35 59.19 Amount Amounts for major parties xxvi. Contribution to post employment benefit plans (a) Towards employer's contribution to provident fund trusts, including: Larsen & Toubro Officers & Supervisory Staff Provident Fund Larsen & Toubro Limited Provident Fund of 1952 69.02 64.13 6.18 (c) Towards advance contribution to/(refund from) gratuity trusts: Larsen & Toubro Officers & Supervisors Gratuity Fund Larsen & Toubro Gratuity Fund (175.00) benefits Total long term Other 2017-18 Short-term Post- employee employment benefits benefits Total Other long term benefits 2018-19 Short-term Post- employee employment benefits benefits Key Management Personnel * crore xxvii. Compensation to key management personnel: (a) Mr. A.M. Naik (Group Executive Chairman "Major parties" denote entities accounting for 10% or more of the aggregate for that category of transaction during respective period. 9.78 Total 11.29 9.78 Larsen & Toubro Limited Senior Officers' Superannuation Scheme 11.29 9.78 (175.00) (d) Towards employer's contribution to superannuation trust: Total (142.30) (32.70) 11.29 888.68 5.03 3.82 110.36 Larsen and Toubro (Oman) LLC 89.21 97.76 Hi-Tech Rock Products and Aggregates Limited 78.23 152.16 L&T Shipbuilding Limited 771.22 931.89 Subsidiaries, including: 747.74 1473.87 0.15 0.01 0.15 0.01 42.68 33.22 75.62 38.19 40.66 53.04 98.12 L&T Geostructure LLP 296.97 234.82 867.35 1161.75 Subsidiaries: iii. Investment in debt securities [including preference shares (debt portion)] 1791.00 1965.08 Total 0.18 L&T-Chiyoda Limited 0.43 3.99 78.87 Magtorq Private Limited 4.04 Associates, including 700.05 503.41 L&T-MHPS Turbine Generators Private Limited 276.37 460.21 L&T-MHPS Boilers Private Limited 1019.17 1029.15 Joint ventures, including: 0.61 5.03 115.36 255.20 No. Category of balance/relationship/major parties Sr. (d) Amount due to/from related parties: NOTE [51] (contd.) Notes forming part of the Financial Statements (contd.) NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 402 401 #Appointed w.e.f. July 1, 2017 Post-employment benefits include gratuity * 55.04 crore. *** Represents pension ** Represents encashment of past service accumulated leave. 154.07 19.38 3.82 64.42 70.27 94.03 19.87 74.16 - i Accounts receivable Subsidiaries, including: L&T Metro Rail (Hyderabad) Limited 140.55 64.03 188.22 822.67 458.44 1218.66 Amount Amounts for major parties As at 31-3-2018 crore major parties Amount Amounts for 289.15 As at 31-3-2019 Total L&T-Chiyoda Limited Associate: Krishnagiri Walajahpet Tollway Limited L&T Deccan Tollways Limited L&T Samakhiali Gandhidham Tollway Limited L&T Infrastructure Development Projects Limited L&T-MHPS Boilers Private Limited Joint ventures, including: L&T Hydrocarbon Engineering Limited L&T Seawoods Limited ii. Accounts payables, including other payables Notes forming part of the Financial Statements (contd.) 45.87 0.43 6.00 4.50 5.30 2.28 57.00 49.11 xi. Post employment benefit plans (a) Due to provident fund trusts, including: 27.73 24.51 Larsen & Toubro Officers & Supervisory Staff Provident Fund 24.77 21.65 Total 27.73 45.05 60.92 Total 8.75 11.22 Larsen & Toubro Gratuity Fund 5.19 36.31 Larsen & Toubro Officers & Supervisors Gratuity Fund 45.05 60.92 Due to gratuity trusts: (b) 24.51 49.70 4.20 5.32 7.05 L&T-MHPS Boilers Private Limited 91.69 47.48 17.00 6.97 17.00 Total 7.15 29.95 29.61 28.15 Notes forming part of the Financial Statements (contd.) NOTE [51] (contd.) Total Joint ventures, including: (c) Due to directors #: 57.00 7.39 12.15 11.58 18.60 9.77 49.11 Key management personnel, including: Total Mr. M. V. Satish Mr. D. K. Sen Mr. Shailendra Roy Mr. R. Shankar Raman Mr. S. N. Subrahmanyan Mr. A. M. Naik Mr. J. D. Patil Due to superannuation trust: X. 6.74 6.62 Nabha Power Limited 36.31 45.35 Subsidiaries, including: Guarantee charges recovered from 7.07 xvii. Amount Amounts for major parties No. Nature of transaction/relationship/major parties Sr. 2017-18 2018-19 Amount Amounts for major parties crore L&T Shipbuilding Limited L&T Hydrocarbon Engineering Limited 0.50 7.99 L&T-MHPS Turbine Generators Private Limited 0.07 L&T-MHPS Boilers Private Limited 0.50 4.50 0.52 7.97 Larsen Toubro Arabia LLC 4.16 Larsen & Toubro (Saudi Arabia) LLC 9.07 16.37 Joint ventures, including: LARSEN & TOUBRO 10.36 223.11 3755.94 vi. Impairment provision on loans & advances recoverable Joint venture: 263.00 L&T Special Steels and Heavy Forgings Private Limited 4015.81 263.00 7.99 Total 6.74 (c) Disclosure of related party transactions: (contd.) 7.99 Larsen & Toubro Limited Senior Officers' Superannuation Scheme Total Total 263.00 1677.53 386.69 Joint ventures, including: 615.10 1621.11 Nabha Power Limited L&T Special Steels and Heavy Forgings Private Limited 1399.58 1539.83 Associates, including: 7.38 0.39 L&T-Chiyoda Limited Magtorq Private Limited 4.94 2.44 0.79 India 9 L&T-MHPS Boilers Private Limited 50.10 97.45 51.00 51.00 51.00 10 51.00 50.10 47.75 50.10 India L&T Howden Private Limited 8 Λ 47.75 Λ India L&T Halol-Shamlaji Tollway Limited L&T-MHPS Turbine Generators Private Limited 7 50.10 India 74.00 51.00 14 Λ 72.11 13.26 72.11 13.26 India PNG Tollway Limited 13 74.00 74.00 51.00 74.00 L&T Special Steels and Heavy Forgings Private Limited 12 75.50 75.50 75.50 75.50 India Raykal Aluminium Company Private Limited 11 51.00 51.00 India 97.45 97.45 India 2 97.45 Λ Λ India L&T Chennai-Tada Tollway Limited 1 Proportion of effective ownership Interest (%) As at 31-3-2018 Proportion of direct (%) ownership L&T Rajkot-Vadinar Tollway Limited Proportion of effective ownership Interest (%) Name of the joint venture company No. Proportion of direct of business Sr. Principal place LARSEN & TOUBRO Joint ventures: NOTE [53] (contd.) Notes forming part of the Financial Statements (contd.) L&T Kobelco Machinery Private Limited ownership (%) India Λ 97.45 L&T Ahmedabad-Maliya Tollway Limited 6 98.12 26.24 98.12 26.24 India L&T Transportation Infrastructure Limited 5 97.45 97.45 97.45 97.45 India L&T Infrastructure Development Projects Limited 4 97.45 0.02 97.45 0.02 India L&T Samakhiali Gandhidham Tollway Limited 3 97.45 Λ Λ India 1 51.00 2017-18 66.64 Interest accrued, due to suppliers under MSMED Act on the above amount, and unpaid Payment made to suppliers (other than interest) beyond the appointed day during the year Interest paid to suppliers under MSMED Act (Section 16) 0.11 0.28 122.63 142.28 0.30 0.11 Interest due and payable towards suppliers under MSMED Act for payments already made Interest accrued and remaining unpaid at the end of the year to suppliers under MSMED Act Amount of further interest remaining due and payable even in the succeeding years 0.32 5.68 10.97 10.18 8.14 8.14 LARSEN & TOUBRO Notes forming part of the Financial Statements (contd.) NOTE [58] 2018-19 133.47 Principal amount due to suppliers under MSMED Act, 2006 Particulars crore 1.90 (ii) Limited review of standalone and consolidated financial statements on a quarterly basis b. For Taxation matters 1.50 1.50 0.55 0.55 C. For Company law matters 0.30 There are no amounts due and outstanding to be credited to Investor Education & Protection Fund as at March 31, 2019. NOTE [59] 0.30 1.62 0.43 e. For Reimbursement of expenses NOTE [56] 0.13 0.20 The Company purchased Electoral Bonds for 35.00 crore and issued the same to political parties as Company's political contribution. (previous year: Nil). NOTE [57] The Company has amounts due to suppliers under The Micro, Small and Medium Enterprises Development Act, 2006, [MSMED Act] as at March 31, 2019. The disclosure pursuant to the said Act is as under: d. For Other services including certification work 1.90 Disclosure in respect of joint operations: Sr. Jointly Controlled Entity (Design & Build work for Construction of TCS SEZ at Kolkata, West Bengal). Jointly Controlled Entity (Main Construction Works for Al Rayyan Stadium and Precint). Jointly Controlled Entity (Construction of Head Race Tunnel for Tapovan Vishnugad Hydro Electric project in Uttaranchal state). Jointly Controlled Entity (Construction of 5 HCC-L&T Purulia Joint Venture 43% India Pumped Storage Project). 6 International Metro Civil Contractors 26% India Joint Venture Jointly Controlled Entity (Construction of Delhi Metro Corridor Phase I Tunnel Project). 7 Metro Tunneling Group 26% India Jointly Controlled Entity (Construction of Delhi Metro Corridor-Phase II Tunnel Project). Jointly Controlled Entity (Renovation of US Consulate, Chennai). Description of Interest India 65% Name of the joint operation No. 1 Desbuild L&T Joint Venture 2 Larsen and Toubro Limited-Shapoorji Proportion of ownership interest % Principal Place of Business 49% (a) (i) Name of joint operation (with specific ownership interest in the arrangement): India India Pallonji & Co. Ltd. Joint Venture 3 Al Balagh Trading & Contracting Co 80% Qatar W.L.L-L&T Joint Venture 4 L&T-AM Tapovan Joint Venture 50% 51.00 (i) Statutory audit fees a. Product Expected tax warranties liability in respect of indirect taxes Litigation related obligations Contractual rectification cost- construction contracts Others Total 2 3 st Balance as at 1-4-2018 Additional provision during the year Provision used during the year 35.47 178.65 30.01 30.32 8.71 50.00 225.29 349.18 17.99 466.11 459.51 Particulars Sr. No. Class of provisions crore 51.00 51.00 15 L&T MBDA Missile Systems Limited India 51.00 51.00 51.00 51.00 (19.50) 16 India 50.00 50.00 50.00 50.00 A Proportion of direct ownership is less than 0.01% NOTE [54] Disclosures pursuant to Ind AS 37 "Provisions, Contingent Liabilities and Contingent Assets" Movement in provisions: a) L&T-Sargent & Lundy Limited Paid as Auditor (4.13) 4 b) Nature of provisions: i. c) ii. iii. iv. Product warranties: The Company gives warranties on certain products and services, undertaking to repair or replace the items that fail to perform satisfactorily during the warranty period. Provision made as at March 31, 2019 represents the amount of the expected cost of meeting such obligations of rectification/replacement. The timing of the outflows is expected to be within a period of 1 to 5 years from the date of Balance Sheet. Expected tax liability in respect of indirect taxes represents mainly the differential sales tax liability on account of non- collection of declaration forms. Provision for litigation related obligations represents liabilities that are expected to materialise in respect of matters in appeal. Contractual rectification cost represents the estimated cost the Company is likely to incur during defect liability period as per the contract obligations in respect of completed construction contracts accounted under Ind AS 115 "Revenue from Contracts with customers". Disclosure in respect of contingent liabilities is given as part of Note 29 to the Balance Sheet. NOTE [55] Auditors' remuneration (excluding service tax): Sr. 2018-19 * crore 2017-18 Particulars No. Disclosures pursuant to Ind AS 37 "Provisions, Contingent Liabilities and Contingent Assets" (contd.) NOTE [54] (contd.) Notes forming part of the Financial Statements (contd.) NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 Unused provision reversed during the year (0.17) (0.04) (181.02) (17.99) (199.22) 5 Additional provision for unwinding of interest and change in discount rate (0.20) (23.63) 0.39 60 Balance as at 31-3-2019 (6=1+2+3+4+5) 45.61 204.80 59.10 393.45 702.96 409 410 0.19 As at 31-3-2019 Non-current borrowings (Note 19) 1.377 14.598 L&T-Shanghai Urban Construction 14 332.202 4.332 327.870 1573.576 1901.446 2017-18 1717.123 1500.921 374.304 10.843 363.461 (Group) Corporation Joint Venture 2018-19 1172.979 1124.817 1750.670 1387.209 13 Joint Venture 0.413 0.010 0.403 0.446 0.086 0.360 2018-19 283.119 281.245 703.471 703.111 2017-18 491.395 489.967 997.411 997.008 Merkezi-STFA-Al Jaber Engineering Aktor-Larsen & Toubro-Yapi 12 Civil Works Joint Venture 15 DAEWOO and L&T Joint Venture 2018-19 6.686 2017-18 14.272 6.334 2018-19 447.749 446.855 200.096 2017-18 150.957 150.195 96.439 L&T-IHI Consortium 18 L&T-ISDPL (JV) 17 117.210 75.114 117.210 544.147 2018-19 675.123 550.545 736.471 L&T-STEC JV MUMBAI 16 0.759 0.759 0.643 95.037 0.133 0.133 1.210 198.753 0.346 0.346 0.194 0.011 0.551 (0.027) 0.399 (0.027) (0.013) 0.359 CC27 Delhi (56.029) (0.009) (56.020) 27.249 121.548 87.298 2017-18 Shanghai Urban Construction (Group) (7.765) (7.765) - 18.286 10.521 91.524 133.540 2018-19 Metro Tunneling Chennai-L&T 9 (0.013) (0.013) 0.013 23.831 (50.477) 2017-18 (0.368) (0.368) 0.368 23.846 (50.094) 2018-19 L&T-Hochtief Seabird Joint Venture 8 0.447 29.078 2017-18 534.150 526.782 388.537 375.696 2018-19 171.877 171.877 266.523 266.523 2017-18 32.907 32.907 2018-19 302.204 302.204 - 0.520 - (58.221) (58.221) 42.277 106.114 33.803 218.749 (15.944) 94.892 221.616 50.094 2017-18 (Group) Corporation Joint Venture 2018-19 L&T-Shanghai Urban Construction 11 Corporation Joint Venture (7.784) (7.784) 10.377 (29.143) (29.143) 0.083 6.898 45.193 (22.162) 55.786 2.593 14.533 54.269 2017-18 Urban Construction (Group) 2018-19 Metro Tunneling Delhi- L&T Shanghai 10 Corporation Joint Venture (1.309) (1.829) - 4.486 8.355 181.885 166.919 23.263 23.610 6.319 41.688 2018-19 152.734 144.293 2017-18 30.923 31.270 2018-19 231.619 348.185 2017-18 325.673 401.918 635.825 L&T-Delma Mafraq Joint Venture 23 L&T- Inabensa Consortium 22 Joint Venture (7.650) (7.650) 12.162 4.512 41.011 6.178 7.591 Engineering BHD Consortium-O&M (4.235) (4.235) 9.228 4.993 48.543 10.887 2018-19 Larsen and Toubro Limited-Scomi 21 Joint Works Joint Venture (0.378) 2017-18 8.788 8.788 (0.347) 1.505 0.005 2018-19 234.617 208.502 405.698 405.693 2017-18 275.208 250.604 279.741 279.569 2018-19 56.376 35.099 2017-18 65.194 39.595 13.316 2018-19 305.329 215.175 595.253 532.888 2017-18 254.207 227.628 402.949 376.649 2018-19 38.379 37.536 44.125 42.357 22.756 23.290 29.978 30.513 2018-19 171.444 148.895 281.570 246.898 2017-18 172.037 171.898 89.469 89.331 2018-19 0.037 0.012 2017-18 0.052 LTH Milcom Private Limited 29 20 LNT-Shriram EPC Tanzania UJV 28 2017-18 Energy & Environment JV Larsen & Toubro Ltd - Passavant 27 Besix - Larsen & Toubro Joint Venture 26 Larsen & Toubro Limited & NCC Limited Joint Venture 25 L&T-AL-Sraiya LRDP 6 Joint Venture 24 (64.201) (0.067) (64.134) 699.959 (40.321) (4.952) (35.369) (0.347) (0.378) 1.191 0.813 0.500 Notes forming part of the Financial Statements (contd.) NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 414 413 (5.672) (5.672) - 5.699 0.027 18.156 17.696 2017-18 (1.203) (1.203) - 1.303 0.100 20.463 18.801 2018-19 L&T-Eastern Joint Venture 19 71.707 71.707 45.023 45.023 2017-18 18.314 18.314 586.768 586.768 NOTE [59] (contd.) 8.355 (ii) Financial interest in joint operation (to the extent of Company's share) (contd.) As at period end 8.995 2017-18 Engineering BHD Consortium-Residual (0.305) (0.305) 0.305 0.278 8.469 2018-19 Larsen and Toubro Limited-Scomi 20 tax Income Income Total Other Comprehensive Comprehensive Profit after tax Total tax Total Expense excluding Total Income Assets Liabilities Total Total Year Name of the joint operation Sr. No. Company's share For the year crore 1.510 0.447 0.021 Construction, Installation, Testing and Jointly Controlled Entity (Design, Supply, | Jointly Controlled Entity (Operation and Maintenance of monorail system). Jointly Controlled Entity (Construction and maintenance of 295 Residential Units at Dubai). Jointly Controlled Entity (Implementation of residual joint works for monorail system in Mumbai). Jointly Controlled Entity (Design and Construction of Underground Section including Three Underground Stations at Marol Naka, MIDC and SEEPZ and Associated Tunnels). Jointly Controlled Entity (Construction of Inner Harbour for Project Varsha at Visakapatanam). Jointly Controlled Entity (Construction of Mumbai Trans Harbour Link Project Package 1 & Package. Description of Interest India 100% L&T-Inabensa Consortium 22 Joint Venture Engineering BHD Consortium-O&M Commissioning for Mughalsarai - New Bhaupur India Larsen and Toubro Limited-Scomi 21 Joint Works Joint Venture Engineering BHD Consortium-Residual India 60% Larsen and Toubro Limited-Scomi 20 UAE 65% L&T-Eastern Joint Venture* 19 50% Section of EDFC Electrical Works). 23 L&T-Delma Mafraq Joint Venture 100% 29 LTH Milcom Private Limited Victoria Pipeline to Tabora, Nzega and Igunga Towers, Tanzania). Jointly Controlled Entity (Construction of 318MLD Wastewater Treatment Plant with 10 years O&M at Coronation Pillar, Delhi). Jointly Controlled Entity (Extension of Lake Tanzania 90% 28 LNT-Shriram EPC Tanzania UJV India 50% Larsen & Toubro Ltd - Passavant Energy & Environment JV 27 Dubai 50% Besix Larsen & Toubro Joint Venture 26 Jointly Controlled Entity (DS 150/2 Jabel Ali Sewage Treatment Plant Phase 2). | Jointly Controlled Entity (Supply and construction of 2 parallel 2100 mm diameter steel gravity mains conduit pipes from Palra to Bhureka). Jointly Controlled Entity (Execution of the Roads and Infrastructure in Doha Industrial Area). Section No.4A). Mafraq to AL Ghwaifat Border Post Highway India 55% 25 Larsen & Toubro Limited & NCC Limited Joint Venture Qatar 75% 24 L&T-AL-Sraiya LRDP 6 Joint Venture Jointly Controlled Entity (Improvement of UAE India 100% India 100% Civil Works Joint Venture 13 Qatar 22% Aktor- Larsen & Toubro-Yapi Merkezi- STFA-Al Jaber Engineering Joint Venture 12 |(Group) Corporation Joint Venture CC27 Delhi India 68% 11 L&T-Shanghai Urban Construction Corporation Joint Venture Urban Construction (Group) India 60% Metro Tunneling Delhi- L&T Shanghai 10 Corporation Joint Venture Jointly Controlled Entity (Construction of UG Stations at Nehru Park, KMC and Pachiyappas Shanghai Urban Construction (Group) India 75% Metro Tunneling Chennai-L&T 9 Jointly Controlled Entity (Construction of breakwater, Karwar). India 90% L&T-Hochtief Seabird Joint Venture 14 L&T-Shanghai Urban Construction (Group) Corporation Joint Venture 56.67% 29% Jointly Controlled Entity (Design and India 65% Principal Place of Business Proportion of ownership interest % L&T-IHI Consortium 18 L&T-ISDPL (JV) 17 16 L&T-STEC JV MUMBAI No. Name of the joint operation Sr. Name of joint operation (with specific ownership interest in the arrangement): (contd.) NOTE [59] (contd.) Notes forming part of the Financial Statements (contd.) NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 412 411 Jointly Controlled Entity (EPC for construction of Greenfield six-Lane Extradosed Cable Bridge over Ganga River). India 50% 15 DAEWOO and L&T Joint Venture India 51% Saudi Arabia Jointly Controlled Entity (Contract for Detail Design, Construction and Commissioning of Package 2 of The Riyadh Metro Project). Jointly Controlled Entity (Construction of Twin Tunnel between IGI Airport and Sector 21 for DMRC). Jointly Controlled Entity (Contract for Design & Build Package 3, Gold Line Underground, a part of the construction of the Qatar integrated Railway Project). Construction of Tunnel for Delhi MRTS Project of Phase-III). College and associated tunnels for CMRL). Jointly Controlled Entity (Construction of Delhi Metro Corridor- Tunnel Project-Phase-CC5). 0.285 India *The joint operation is in the process of liquidation. International Metro Civil Contractors 6 (0.013) (0.013) 0.013 (0.007) (0.007) 0.007 2.966 2.966 (0.906) 2017-18 (0.017) (0.017) 2018-19 0.520 (1.190) (1.190) (13.550) (0.557) 0.003 (0.560) 626.603 (151.911) 0.768 (152.679) 1212.474 1059.795 0.503 11.901 10.160 2.483 0.753 0.755 11.457 2017-18 0.388 0.388 0.380 0.047 0.815 1.076 12.165 2018-19 Metro Tunneling Group 7 (0.007) - (0.007) 0.018 0.048 0.059 9.766 10.110 2017-18 Joint Venture 2.085 2.085 0.266 0.132 2018-19 669.211 819.952 2017-18 532.638 531.469 626.043 2018-19 77.874 164.482 (14.740) 141.500 183.162 (0.899) 2018-19 HCC-L&T Purulia Joint Venture 5 Desbuild L&T Joint Venture 1 tax Income Income Comprehensive Comprehensive Profit after tax Total tax Total Other Total Expense excluding Income Total Total Total Assets Liabilities Year Name of the joint operation Sr. No. For the year As at period end Company's share crore LARSEN & TOUBRO Financial interest in joint operation (to the extent of Company's share): (ii) NOTE [59] (contd.) Notes forming part of the Financial Statements (contd.) 2018-19 Jointly Controlled Entity. 2017-18 (0.591) 2017-18 L&T-AM Tapovan Joint Venture 4 W.L.L-L&T Joint Venture Al Balagh Trading & Contracting Co 3 (0.365) (0.365) 1.539 1.174 26.753 57.636 2017-18 Pallonji & Co. Ltd. Joint Venture (3.083) (3.083) 3.729 0.646 22.739 56.706 2018-19 Larsen and Toubro Limited-Shapoorji 2 (0.001) (0.001) 0.001 (0.001) (0.001) 0.001 0.053 0.053 (0.592) 8 0.172 0.300 2312.50 1783.81 1111.59 (1100.79) 10558.37 (87.61) 3 The effect of changes in foreign exchange rates 4 Interest accrued 10.06 57.72 32.62 (10.80) 31.88 0.64 58.36 7134.28 (770.63) 5 categories) (936.27) 936.27 6 Balance as at 31-3-2018 5495.16 7 Changes from financing cash flows 784.06 4129.57 (606.49) 936.27 (969.34) 10561.00 (791.77) 8 Other changes (transfer within Changes from financing cash flows Balance as at 1-4-2017 1 Sojitz Corporation-L&T India consortium Design, supply, installation, testing and commissioning of 2x25 kv overhead equipments, traction sub-stations, auxiliary stations, switching stations, auto transformer stations and SCADA System on design-build lumpsum price basis for Rewari- Makarpura. 415 416 NOTES FORMING PART OF THE FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 Notes forming part of the Financial Statements (contd.) NOTE [60] Disclosure pursuant to Ind AS 103 "Business Combinations": (a) The Board of Directors in its meeting held on May 10, 2019, has approved amalgamation of its wholly-owned subsidiary L&T Shipbuilding Limited ('LTSB') with the Company subject to receipt of regulatory and other approvals. The Company has increased its stake in LTSB to 100% in April 2019 from 97% as at March 31, 2019. (b) During the previous year Spectrum Infotech Private Limited (SIPL), a wholly-owned subsidiary, was merged with the Company under a scheme of amalgamation approved by National Company Law Tribunal on March 27, 2018. The merger was effective from the appointed date April 1, 2017. SIPL had a registered office in Bengaluru, India and was engaged in the business of Manufacture of Electronic Systems and Sub-systems. No fresh shares were issued to effect the merger as SIPL was wholly owned subsidiary of the Company. Further the merger was accounted using pooling of interest method, involving the following: (i) The assets and liabilities of SIPL were reflected at their carrying amounts. No adjustment was made to reflect the fair values, or recognise any new asset or liability. (ii) The financial information in the financial statements of the Company was restated from the effective date April 1, 2017. (iii) The balance of the retained earnings appearing in the financial statements of the SIPL was aggregated with the corresponding balance appearing in the financial statements of the Company. (iv) The identity of General reserve and Securities premium was preserved and appearing in the financial statements of the Company in the same form in which they appeared in financial statements of SIPL; and (v) - 2 3 Total Current maturities of long term borrowings (Note 24) Current borrowings (Note 23) Particulars No. The effect of changes in foreign Sr. Disclosure pursuant to Ind AS 7 "Statement of Cash Flows" - Changes in liabilities arising from financing activities: NOTE [62] The Company's exports qualify for various export benefits offered in the form of duty credit scrips under foreign trade policy framed by Department General of Foreign Trade India (DGFT). Income accounted towards such export incentives and duty drawback amounts to * 99.97 crore (previous year: 111.04 crore). Disclosure pursuant to Ind AS 20 "Accounting for Government Grants and Disclosure of Government Assistance" The excess of amount of investment by the Company in SIPL over the share capital of SIPL was treated as Capital reserve in Company's financial statements and the same was presented separately from other Capital reserves [refer to Note 18]. NOTE [61] crore 21 exchange rates 9 1783.81 (791.77) 0.128 Disclosure pursuant to Ind AS 8 "Accounting Policies, Changes in Accounting Estimates and Errors" on new Ind AS that has been issued but is not effective as of the closing day of the reporting period: On March 30, 2019, the Ministry of Corporate Affairs notified following new Ind AS, applicable in respect of accounting periods commencing on or after April 1, 2019. Ind AS 116 "Leases" Ind AS 116 "Leases" supersedes AS 17 "Leases" in respect of accounting periods commencing on or after April 1, 2019. Ind AS 116 sets out the principles for the recognition, measurement, presentation and disclosure of leases. Pursuant to transition methods permitted under Ind AS 116, the Company is proposing to use "modified retrospective approach" for transitioning to Ind AS 116 with effect from April 1, 2019. Under modified retrospective approach, cumulative effect of initially applying the accounting standard as at April 1, 2019 will be recognised as an adjustment to the opening balance of Retained earnings of the financial year 2019-20 and figures for the financial year 2018-19 will not be restated as per the new accounting standard. With respect to existing leases as at the date of initial application of the accounting standard, the Company is proposing to use the practical expedient available on transition to Ind AS 116 and will not reassess whether a contract is or contains a lease and instead apply Ind AS 116 only to the contracts that were previously identified as lease applying Ind AS 17. The Company has carried out an initial assessment of the impact of adopting this standard and there would not be any significant impact on the financials of the Company. NOTE [64] Figures for the previous year have been regrouped/reclassified to conform to the figures of the current year. 417 418 AUDITORS' REPORT ON CONSOLIDATED FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 DELOITTE HASKINS & SELLS LLP (606.49) Chartered Accountants 27th - 32nd Floor, Senapati Bapat Marg Elphinstone Road (West) Mumbai 400 013. INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF LARSEN & TOUBRO LIMITED Report on the Audit of Consolidated Financial Statements Opinion We have audited the accompanying consolidated financial statements of Larsen & Toubro Limited (the "Parent") and its subsidiaries (the Parent and its subsidiaries together referred to as the "Group"), which includes Group's share of profit/ loss in its associates and its joint ventures and which also includes 31 joint operations of the Group accounted on a proportionate basis, which comprise the Consolidated Balance Sheet as at March 31, 2019, the Consolidated Statement of Profit and Loss (including Other Comprehensive Income), the Consolidated Statement of Changes in Equity and the Consolidated Statement of Cash Flows for the year then ended on that date, and notes to financial statements, including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as the "Consolidated Financial Statements"). In our opinion and to the best of our information and according to the explanations given to us, the aforesaid consolidated financial statements give the information required by the Companies Act, 2013 (the "Act") in the manner so required and give a true and fair view in conformity with Indian Accounting Standards prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015, as amended ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Group as at March 31, 2019, the consolidated profit, consolidated total comprehensive income, consolidated changes in equity and its consolidated cash flows for the year ended on that date. Basis for opinion We conducted our audit of consolidated financial statements in accordance with the Standards on Auditing (SAS) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group, and of its joint operations, associates and joint ventures in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India ("ICAI") together with the ethical requirements that are relevant to our audit of the consolidated financial statements under the provisions of the Companies Act, 2013 and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI's Code of Ethics. We believe that the audit evidence obtained is sufficient and appropriate to provide a basis for our audit opinion on the consolidated financial statements. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report. Appropriateness of recognition, measurement, presentation and disclosures of revenues and other related balances in view of adoption of Ind AS 115 "Revenue from Contracts with Customers" (new revenue accounting standard) Key audit matter description Appropriateness of recognition, measurement, presentation and disclosures of revenues and other related balances in view of adoption of Ind AS 115 "Revenue from Contracts with Customers" (new revenue accounting standard). Indiabulls Finance Centre, Tower 3 (3794.12) (974.33) 1922.70 Interest accrued 5.00 0.80 226.62 45.55 370.99 51.35 10 Other changes (transfer within categories) (3892.35) 3892.35 11 Balance as at 31-3-2019 2391.87 3668.25 4131.45 10191.57 789.05 2017-18 Amounts reported in statement of cash flows 2018-19 crore NOTE [63] Total changes from financing cash flows (refer to Sr. No. 7 & 2 above) 144.37 (Repayments)/proceeds from other borrowings (net) Proceeds from non-current borrowings Particulars LARSEN & TOUBRO Amounts reported in statement of cash flows under financing activities: NOTE [62] (contd.) Notes forming part of the Financial Statements (contd.) Repayments of non-current borrowings consortium (87.61) India 2017-18 5151.582 5088.117 5489.484 6788.195 5662.762 6411.262 5437.687 96.137 280.796 9.315 290.111 5.663 219.412 5.196 224.608 Sr. Name of the joint operation No. 1 L&T Sojitz Consortium 2018-19 5256.956 Principal place of business India Description of the interest Design and construction of special bridge across Narmada river structure for Dedicated Freight Corridor Corporation. 2 L&T-KBL (UJV) Hyderabad India Jointly Controlled Operations (Investigation, design, supply and erection of necessary lift systems with all electrical and mechanical components including surge protection systems). 3 L&T-KBL-MAYTAS UJV India 4 Mallanna Sagar Reservoir LnT-Prasad-RK Infra JV India 5 Larsen & Toubro Limited Qatar (b) Name of joint operation (with specific ownership of activity carried out through the arrangement): Waterleau Consortium Total (0.012) Execution of 500 KV transmission line tender in Malaysia. RLBU Mumbai Monorail Project. 2.480 13.312 6.802 (4.322) (4.322) 0.037 (0.041) (0.041) 62.365 1.211 63.576 26.300 0.278 26.578 (0.012) 1.377 (0.535) 12.116 22.556 (0.146) 22.410 - 0.138 0.001 0.139 0.014 (0.014) (0.014) 0.011 0.012 (0.535) Jointly Controlled Operations (Transmission of 735 Mld treated water associated with all civil, electrical & mechanical works at Hyderabad). Jointly Controlled Operations (Construcition of reservoir of 50 TMC, formation of earth bund with all associated components for Reach 2 and adjoining Reach 3). 0.391 LARSEN & TOUBRO Sojitz Corporation-L&T consortium India 16 Sojitz Corporation-L&T India consortium 17 Sojitz Corporation-L&T India consortium Description of the interest Jointly Controlled Operations (Design, supply, erection, testing & commissioning of 25 KV, 50HZ, single phase, traction over-head equipment, switching stations, SCADA and other associated works, in the state of Karnataka and Andhra Pradesh, India). Jointly Controlled Operations (Design, supply, erection, testing & commissioning of 25 KV, 50HZ, single phase, traction over-head equipment, switching stations, and other associated works, in the state of Karnataka and Andhra Pradesh, India). Design & construction of 8 special steel bridges over water main and railways and across creek & rivers including Ulhas Damanganga, Par & Tapi rivers, involving bridge structure, approaches in formation in embankments with 1 major bridge, 3 minor bridges and 1 RUB, guide bunds and protection works including testing and commissioning on design-build lumpsum price basis for JNPT Vadodara Section of Western Dedicated Freight Corridor (Phase-2). Construction of Medigadda Barrage. 15 Dredging, reclamation, revetment, quarrying and NAV aids for project Sea-Bird, Phase- IIA at Naval base, Karwar. Salalah Airport Project. Construction of new 400KV OHL from IBRI to IZKI and 400 KV reactors. Construction of 400/132 KV grid stations at Qabel and associated works. DC of ST works for double line rly involving TD syst. El Aut. Sig. TMS inter locking of LC gates, dispatch Tel.Sys., FOCS GSM(R) Dig., Elec. Ex. Syst., master clock syst. for JNPT Vadodara Sec.- 422 KM including TC on design-build LS basis of WDFC Phase 2. Civil building and track works contract CTP-14. Design, supply, installation, testing and commissioning of 2x25 kv overhead equipments, traction sub-stations, auxiliary stations, switching stations, auto transformer stations and SCADA system on design-build lumpsum price basis for JNPT -Makarpur section. Civil building and track works contract package- 3 (R). Sojitz Corporation-Gayathri India Projects Ltd-L&T consortium 19 PESB and Larsen & Toubro Joint Venture Malaysia 20 Construction of sewage treatment plant of 7.5 MLD at Alshamal. Scomi Engineering Bhd-L&T Construction of 400KV underground cable line and OHL from 400 KV Sohar IPP 3 GS to 400 KV Sohar Free Zone. Oman 18 14 NOTE [59] (contd.) L&T Oman-L&T consortium Notes forming part of the Financial Statements (contd.) (b) Name of joint operation (with specific ownership of activity carried out through the arrangement) (contd.) Sr. Name of the joint operation No. 6 L&T-BRAPL JV (package II) India 7 L&T-BRAPL JV (package III) India 8 IIS L&T Consortium Principal place of business 9 13 India Oman L&T Oman-L&T consortium L&T Oman-L&T consortium Oman L&T Galfar Consortium 11 12 India L&T ISDPL-DI (JV) 10 India PES Engg P ltd-L&T Consortium Oman Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • The Parent's Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (the "Act") with respect to the preparation of these consolidated financial statements that give a true and fair view of the consolidated financial position, consolidated financial performance, consolidated total comprehensive income, consolidated changes in equity and consolidated cash flows of the Group including its joint operations, associates and joint ventures in accordance with the Ind AS and other accounting principles generally accepted in India. • Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: The respective Board of Directors of the companies included in the Group, its joint operations, associates and joint ventures are also responsible for overseeing the financial reporting process of the Group, its joint operations, associates and joint ventures. Auditor's Responsibility for the Audit of the Consolidated Financial Statements SO. In preparing the consolidated financial statements, the respective Board of Directors of the companies included in the Group, its joint operations, associates and joint ventures are responsible for assessing the ability of the Group, its joint operations, associates and joint ventures to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do The respective Board of Directors of the companies included in the Group are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group, and of its joint operations, associates and joint ventures and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the consolidated financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Parent, subsidiary companies, joint operation companies, associate companies and joint venture companies incorporated in India, have adequate internal financial controls systems in place and the operating effectiveness of such controls. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Group, its joint operations, associates and joint ventures to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group, its joint operations, associates and joint ventures to cease to continue as a going concern. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group, its joint operations, associates and joint ventures to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the audit of the financial statements of such entities included in the consolidated financial statements. Materiality Materiality is the magnitude of misstatements in the consolidated financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the consolidated financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the consolidated financial statements. Communication with those charged with governance Management's Responsibility for the Consolidated Financial Statements We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Other Matters LARSEN & TOUBRO If, based on the work we have performed, we conclude that there is material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. User access rights were removed on a timely basis when an individual left or moved role; Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. i. Selected samples of continuing and new contracts and performed the following procedures: 1. Evaluated the design of internal controls relating to implementation of the new revenue accounting standard; Selected samples of continuing and new contracts, and tested the operating effectiveness of the internal control, relating to identification of the distinct performance obligations and determination of transaction price. The auditors have carried out a combination of procedures involving enquiry and observation, reperformance and inspection of evidence in respect of operation of such controls; and The procedures performed included the following: The auditors have assessed the process to identify the impact of adoption of the new revenue accounting standard. Refer to Note No. 1 (i) of the Consolidated Financial Statements The application of the new revenue accounting standard involves certain key judgements relating to identification of distinct performance obligations, determination of transaction price of the identified performance obligations, the appropriateness of the basis used to measure revenue recognised over a period. Additionally, new revenue accounting standard contains disclosures which involves collation of information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. Principal Audit Procedures LARSEN & TOUBRO Management has implemented Group wide preventive and detective controls across critical applications and infrastructure to reduce the risk over IT applications in the financial reporting process. Due to the pervasive nature, the auditors have assessed the risk of a material misstatement arising from technology as significant for the audit. The component auditors have performed a range of audit procedures, which included the following: Access rights were tested over applications, operating systems and databases relied upon for financial reporting. Specifically, the tests were designed to cover the following: In connection with our audit of the consolidated financial statements, our responsibility is to read the other information, compare with the other information of the joint operations, subsidiaries, joint ventures and associates audited by other auditors to the extent it relates to these entities and, in doing so, place reliance on the work of the other auditors and consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated. Other information so far as it relates to the joint operations, subsidiaries, joint ventures and associates, is traced from their financial statements audited by the branch auditors and other auditors and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated. New access requests for joiners were properly reviewed and authorised; Highly privileged access is restricted to appropriate personnel. Other areas that were independently assessed included password policies, security configurations, controls over changes to applications and databases and that business users, developers and production support did not have access to change applications, the operating system or databases in the production environment. Testing of automated controls and interface testing was carried out. Other procedures performed included: Where inappropriate access was identified, we understood the nature of the access, and, where possible, obtained additional evidence on the appropriateness of the activities performed; Additional substantive testing was performed on specific year-end reconciliations and confirmations with external counterparties; A list of users' access permissions was obtained and manually compared to other access lists where segregation of duties was deemed to be of higher risk. Information Other than the Consolidated Financial Statements and Auditor's Report The Company's Board of Directors is responsible for the preparation of other information. The other information comprise the information included in the Management Discussion and Analysis, Board's Report including Annexures to Board's Report, Business Responsibility Report, Corporate Governance and Shareholder's Information, but does not include the consolidated financial statements and our auditor's report. 423 424 AUDITORS' REPORT ON CONSOLIDATED FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 Access rights to applications, operating systems and databases were periodically monitored for appropriateness; and The consolidated financial statements includes the financial information of 24 joint operations included in the standalone financials statements of the companies included in the Group whose financial information reflect total assets of 4,540.71 crore as at March 31, 2019, total revenue of 6,018.63 crore and net cash outflows amounting to 170 crore for the year ended on that date, as considered in the respective standalone financial statements of the Companies included in the Group. The financial information of these joint operations have been audited by other auditors whose reports have been furnished to us by the Management and our opinion in so far as it relates to the amounts and disclosures included in respect of these joint operations, and our report in terms of sub-section (3) of Section 143 of the Act, in so far as it relates to the aforesaid joint operations is based solely on the work done by and the reports of such other auditors. Provision has been made in the consolidated financial statements, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts; and 425 The consolidated financial statements disclose the impact of pending litigations on the consolidated financial position of the Group, its associates and joint ventures. There has been no delay in transferring amounts required to be transferred, to the Investor Education and Protection Fund by the Parent, applicable subsidiary companies, associate companies, joint venture and joint operation companies to the extent incorporated in India. For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm's Registration No. 117366W/W-100018) Sanjiv V. Pilgaonkar (Membership No. 039826) Mumbai, May 10, 2019 427 428 AUDITORS' REPORT ON CONSOLIDATED FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT (Referred to in paragraph "1(f)" under 'Report on Other Legal and Regulatory Requirements' section of our report of even date) Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (the "Act") In conjunction with our audit of the consolidated financial statements of the Company as of and for the year ended March 31, 2019, we have audited the internal financial controls over financial reporting of LARSEN & TOUBRO LIMITED (hereinafter referred to as "Parent") and its subsidiary companies (the parent and its subsidiaries together referred to as the "Group"), which includes internal financial controls over financial reporting of its joint operations, its joint ventures and its associate companies, which are companies incorporated in India, as of that date. Management's Responsibility for Internal Financial Controls The respective Board of Directors of the Parent, its subsidiary companies, its joint operations, its joint ventures and its associate companies, which are companies incorporated in India, are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the respective Companies considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the Institute of Chartered Accountants of India ("ICAI"). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the respective company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act. Auditors' Responsibility Our responsibility is to express an opinion on the internal financial controls over financial reporting of the Parent, its subsidiary companies, its joint operations, its joint ventures and its associate companies, which are companies incorporated in India, based on our audit. We conducted our audit in accordance with the Guidance Note issued by ICAI and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, which are applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained and the audit evidence obtained by other auditors of the subsidiary companies, joint operations, joint ventures and associate companies, which are companies incorporated in India, in terms of their reports referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting of the Parent, its subsidiary companies, its joint operations, its joint ventures and its associate companies, which are companies incorporated in India. Meaning of Internal Financial Controls over Financial Reporting ii. A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. • • us: With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to 426 AUDITORS' REPORT ON CONSOLIDATED FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 2. the Act, in so far as it relates to the aforesaid subsidiaries, associates and joint ventures is based solely on the reports of such other auditors. Our opinion on the consolidated financial statements is not modified in respect of the above matters with respect to our reliance on the work done by and the reports of such other auditors. The consolidated financial statements includes the financial information of 6 joint operations included in the standalone financial statements of the companies included in the Group which have not been audited by their auditors, whose financial information reflects total assets of 302.45 crore as at March 31, 2019 and total revenues of 452.54 crore and net cash inflow of 0.10 crore for the year ended on that date, as considered in the respective standalone financial statements of the Companies included in the Group. The financial information of these joint operations has been unaudited and has been furnished to us by the Management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these joint operations, is based solely on such unaudited financial information which is certified by the management. In our opinion and according to the information and explanations given to us by the Management, the financial information of these joint operations are not material to the Group. The consolidated financial statements includes the financial information of 44 subsidiaries which have not been audited by their auditors, whose financial information reflect total assets of 250.21 crore as at March 31, 2019, total revenues of 255.06 crore and net cash inflow of 40.61 crore for the year ended on that date. The consolidated financial statements also includes the Group's share of total loss after tax (net) of 0.06 crore and total comprehensive income (net) of 0.63 crore for the year ended March 31, 2019, as considered in the consolidated financial statement, in respect of 3 associates and 7 joint ventures, whose financial information has not been audited by their auditors. The financial information of these subsidiaries, associates and joint ventures is unaudited and has been furnished to us by the Management and our opinion on the consolidated financial statement, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, associates and joint ventures, is based solely on such unaudited financial information which is certified by the management. In our opinion and according to the information and explanations given to us by the Management, the financial information of these subsidiaries, associates and joint ventures are not material to the Group. Our opinion on the consolidated financial statement is not modified in respect of the above matters with respect to our reliance on the financial information certified by the Management. Report on Other Legal and Regulatory Requirements As required by Section 143(3) of the Act, based on our audit we report that: a) The consolidated financial statement also includes the financial information of 66 subsidiaries whose financial information reflect total assets of 1,14,000.15 crore as at March 31, 2019, total revenues of 50,475.82 crore and net cash outflows amounting to 1,045.06 crore for the year ended on that date, as considered in the consolidated financial statements. The consolidated financial statements also include the Group's share of total loss after tax (net) of 310.50 crore and total comprehensive loss (net) of 301.19 crore for the year ended March 31, 2019, as considered in the consolidated financial statement, in respect of 3 associates and 7 joint ventures, whose financial information have not been audited by us. The financial information of these subsidiaries, associates and joint ventures have been audited by other auditors whose reports have been furnished to us by the Management and our opinion on the consolidated financial statement, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, associates and joint ventures and our report in terms of subsection (3) of Section 143 of b) e) f) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated financial statements. In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated financial statements have been kept so far as it appears from our examination of those books. The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss (including Other Comprehensive Income), Consolidated Statement of Changes in Equity and the Consolidated Statement of Cash Flows dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated financial statements. In our opinion, the aforesaid consolidated financial statements comply with the Ind AS specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. On the basis of the written representations received from the directors of the Parent as on March 31, 2019 taken on record by the Board of Directors of the Parent, and the reports of the statutory auditors of its joint operations companies, subsidiary companies, associate companies and joint venture companies incorporated in India, none of the directors of the Group companies, its joint operations, associate companies and joint venture companies incorporated in India is disqualified as on March 31, 2019 from being appointed as a director in terms of Section 164 (2) of the Act. With respect to the adequacy of the internal financial controls over financial reporting and the operating effectiveness of such controls, refer to our separate Report in "Annexure A", which is based on the auditor's reports of the Parent and its subsidiary companies, joint operation companies, associate companies and joint venture companies incorporated in India. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of internal financial controls over financial reporting of those companies, for reasons stated therein. With respect to the other matters to be included in the Auditor's Report in accordance with the requirements of Section 197(16) of the Act, as amended LARSEN & TOUBRO In our opinion and to the best of information and according to the explanations given to us, the remunerations paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act. d) iii. Assessed and tested the material overlays with a focus on the reasonableness of the supportable information used. V. ii. Discussed with appropriate senior management and evaluated the Management's underlying key assumptions in estimating the tax provision; i. The auditors along with our internal tax experts - Obtained details of completed tax assessments and demands for the year ended March 31, 2019 from the management; Obtained understanding of key uncertain tax positions; The auditors procedures included the following: Refer to Note No 1(z) and 1(aa) of the Consolidated Financial Statements The Group has material uncertain tax positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes. Principal Audit Procedures Key audit matter description Evaluation of uncertain tax positions Assessed the accuracy of the disclosures in the financial statements and ensured that they were in accordance with Ind AS 109. Involved our specialists in areas that required specific expertise (i.e. data reliability and the expected credit loss model). Tested the design and operating effectiveness of the Group's key internal controls around the completeness and accuracy of financial assets on which the ECL model was applied. A sample of exposures was also tested for staging, application of the appropriate PD, LGD and M. The auditors have tested the mathematical accuracy of the model output and its sensitivity to changes in modelling assumptions. AUDITORS' REPORT ON CONSOLIDATED FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 422 421 421 For corporate exposures, tested design and operating effectiveness of the key controls over the appropriateness of use of collaterals, the quantification thereof and the timing of recovery. Assessed the appropriateness of key data sources and assumptions in building estimates for components of credit risk including PD, LGD and M that were used in modelling ECL provisions. For data from external sources, we understood the process of choosing such data, its relevance to the Group. The auditors have evaluated the key controls and governance over the modelling process including model monitoring, validation and approval. The auditors have tested controls over model outputs and recognition and approval of post model adjustments and management overlays. Checked the appropriateness of the Group's determination of SICR and the resultant basis for classification of exposures into various stages. Obtained an understanding of how the Group identified financial assets that are not measured at fair value through profit and loss, with similar credit risks, to assess SICR collectively i.e. the extent of forward looking information, that is reasonable and supportable, was collated and the extent to which reliance was placed on past information. Assessed management's estimate of the possible outcome of the disputed cases; and The procedures performed included the following: iii. Additionally, considered the effect of new information in respect of uncertain tax positions as at April 1, 2018 to evaluate whether any change was required to management's position on these uncertainties. IT application controls are critical to ensure that changes to applications and underlying data are made in an appropriate manner. Appropriate controls contribute to mitigating the risk of potential fraud or errors as a result of changes to applications and data. One of the components is highly dependent on technology due to the significant number of transactions that are processed daily and discrete IT Systems. The interest income is computed through various IT Systems and the interfacing of these system with the accounting system is critical aspect of audit. The audit approach relies extensively on automated controls and controls around interface of different systems, therefore on the effectiveness of controls over IT systems. Principal Audit Procedures Key audit matter description Multiple IT Applications The auditors have enquired with key financial and operational personnel to identify any factors that should be taken into account in auditors' analysis. In all cases, the auditors have corroborated management's explanations, including changes in assumptions, and evaluated these relative to auditors own analysis. Increase/decrease to cost forecasts; and Increase/decrease in revenue growth rate; ii. i. The auditors have also performed a sensitivity analysis to assess the impact of possible different assumptions related to revenue and cost estimates including: Evaluated the appropriateness of key assumptions in the valuations including discount rate, growth rate, and consulted internal specialists. The challenge was based on the auditors' assessment of the historical accuracy of the Group's estimates in the prior periods and an assessment of the consistency of assumptions across all the subsidiaries and comparison of the assumptions with public data wherever available; LARSEN & TOUBRO Compared the actual revenues and cash flows generated by the entities during the year as compared to the projections and estimates considered in the previous year and evaluated the basis of future projections with regard to the revenue and cash flows; use; Evaluated the design and implementation of the relevant controls and the operating effectiveness of such internal controls in estimating the future projections including assumptions used in determining the value in The auditors have performed a range of audit procedures, which included the following: Refer to Note No 1(n) of the Consolidated Financial Statements. The Group has carried out an evaluation for impairment of such toll collection rights which have incurred losses on a continuous basis, representing indicators of impairment. Management has estimated the future cash flows arising from achieving revenues and costs in line with the increase in traffic as well as refinancing/ restructuring. As such estimations involve complex and subjective judgements by the Management, there is a risk that there may be an impairment that has not been recorded. Toll collection rights obtained in consideration for rendering construction services, represent the right to collect toll revenue during the concession period in respect of Build-Operate-Transfer ("BOT") and Design-Build-Operate- Transfer ("DBOT") projects. Toll collection rights are capitalised as intangible assets upon completion of the project at the cumulative construction costs plus the present value of obligation towards negative grants and additional concession fee payable to National Highways Authority of India ("NHAI")/State Authorities, if any. Principal Audit Procedures Key audit matter description Impairment of Toll Collection Rights Considered legal precedence and other rulings in evaluating management's position on these uncertain tax positions. iv. Therefore, impairment of financial assets was considered a key audit matter. Also, the Group has used an internal rating based approach in building its ECL model, using its own internal estimates for some or all of the credit risk components such as the Probability of Default ("PD"), Loss Given Default ("LGD") and Effective Maturity ("M"). Each of these elements are critical estimates in the measurement of impairment on such financial assets. Estimated effort is a critical estimate to determine revenues and provision for onerous obligations in fixed price contracts. This estimate has a high inherent uncertainty as it requires consideration of progress of the contract, efforts incurred till date, efforts required to complete the remaining contract performance obligations. Procedures Principal Audit Key audit matter description Appropriateness of revenues and onerous obligations in respect of fixed price contracts involves critical estimates for services relating to Information Technology & Technology Services Segment AUDITORS' REPORT ON CONSOLIDATED FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 420 419 For the sample selected, reviewing for change orders and the impact on estimated costs to complete; Engaging technical experts to review estimates of costs to complete for sample contracts; and Performed analytical procedures for reasonableness of revenues disclosed by type and service offerings. Testing samples of contracts for appropriate identification of performance obligations; Testing the relevant information technology systems' access and change management controls relating to contracts and related information used in recording and disclosing revenue in accordance with the new revenue accounting standard; Testing of the design and implementation over controls involved for the determination of the estimates used, as well as their operating effectiveness; The auditors' procedures included: Refer to Note No 1 (i) of the Consolidated Financial Statements The revenue on contracts may also include variable consideration (variations and claims). Variable consideration is recognised when the recovery of such consideration is highly probable. Cost contingencies are included in these estimates to take into account specific uncertain risks, or disputed claims against the Group, arising within each contract. These contingencies are reviewed by the Management on a regular basis throughout the contract life and adjusted where appropriate. The Group recognises revenue and profit/loss on the basis of stage of completion based on the proportion of contract costs incurred as at balance sheet date, relative to the total estimated costs of the contract at completion. The recognition of revenue and profit/loss therefore rely on estimates in relation to total estimated costs of each contract. There are significant accounting judgements including estimation of costs to complete, determining the stage of completion and the timing of revenue recognition. Principal Audit Procedures Revenue recognition – accounting for construction contracts Key audit matter description Performed analytical procedures for reasonableness of revenues disclosed by type and service offerings. In respect of samples relating to fixed price contracts, progress towards satisfaction of performance obligation used to compute recorded revenue was verified with the supporting documentation, validated estimates of costs to complete, mathematical appropriateness of calculations and the adequacy of project accounting; and Read and analysed contracts to identify the distinct performance obligations in such contracts; Compared such performance obligations with that identified and recorded by the Company; Considered the terms of the contracts to determine the transaction price including any variable consideration to verify the transaction price used to compute revenue and to test the basis of estimation of the variable consideration; Refer to Note No.1 (i) of the Consolidated Financial Statements The Group has also built in a collective adjustment for its loan portfolios to be more responsive to emerging macro-economic and other risk developments, which also involves critical judgements and estimates. The auditors audit approach was a combination of test of internal controls and substantive procedures which included the following: Evaluated the design of internal controls relating to recording of efforts incurred and estimation of efforts required to complete the performance obligations; The Group has financial assets that are debt instruments such as loans, debt securities, bank balances and deposits and trade receivables that are measured at: amortised cost; and fair value through other comprehensive income ("FVOCI"); and finance lease receivables recognised as per Ind AS 16 on "Leases", in respect of which impairment losses have been recognised and measured using the "expected credit losses" ("ECL") model laid down in Ind AS 109 on "Financial Instruments" for which, the Group has used the general approach described in Ind AS 109. While the Group has identified objective criteria to define "significant increase in credit risk" ("SICR") on a financial asset, identification of financial instruments that could be grouped together on the basis of shared credit risk and assessed collectively for SICR constitutes a significant judgement. Principal Audit Procedures Key audit matter description Provision for expected credit losses for financial services segment Verification of subsequent receipts, post balance sheet date. Reviewed the delivery and collection history of customers against whose contracts un-invoiced revenue is recognised; and Extended the testing upto the date of approval of financial statements by the Board of Directors of the Parent entity to verify adjustments, if any, that may have been necessary upon receipt of approvals from customers for services delivered prior to the reporting date and/or collections there against; For defence contracts which are covered under statutory confidentiality arrangements, the auditors have compared the revenue recognised with amounts collected from customers to ensure that the gap between revenue recognised and collections is below the materiality threshold; Tested cut-offs for revenue recognized against un-invoiced amounts by matching the revenue accrual against accruals for corresponding cost; Tested samples of un-invoiced revenue entries with reference to the reports from the information system that records the costs incurred against the services delivered to confirm the work performed and application of appropriate margin applied for the respective services. The auditors have also tested whether appropriate adjustments have been made for the element of variable consideration related to committed service levels of performance. With regard to incentives, auditors tests were focused to ensure that accruals were restricted to only those items where contingencies were minimal; LARSEN & TOUBRO • Tested the design and operating effectiveness of management's key controls in collating the units of services delivered and in the application of accurate prices for each of such services for samples of the un-invoiced revenue entries, which included testing of access and change management controls exercised in respect of related information systems; The procedures performed included the following: Refer to Note No. 1 (i) and 1(r) of the Consolidated Financial Statements Assessing the recoverability of amounts overdue against invoices raised which have remained unsettled for a significantly long period after the end of the contractual credit period also involves a significant amount of judgment. Recognition of revenue before formal acknowledgment of receipt of services by the customer could lead to an over or under-statement of revenue and profit, whether intentionally or in error; and Principal Audit Procedures Key audit matter The Group, in its contract with customers, promises to transfer distinct services to its customers which may be description rendered in the form of engineering, procurement and construction (EPC) services through design-build contracts, and other forms of construction contracts. The recognition of revenue is based on contractual terms, which could range from cost plus fee to agreed unit price to lump-sum arrangements. At each reporting date, revenue is accrued for costs incurred against work performed that may not have been invoiced. Identifying whether the group's performance have resulted in a service that would be billable and collectable where the works carried out have not been acknowledged by customers as of the reporting date, or in the case of certain defence contracts, where the evidence of work carried out and cost incurred are covered by confidentiality arrangements involves a significant amount of judgment. Revenue recognition and measurement of contract assets in respect of un-invoiced amounts and measurement of receivables in respect of overdue invoices. Reviewed samples of contracts with unbilled revenues to identify possible delays in achieving milestones, which require change in estimated efforts to complete the remaining performance obligations; and Performed analytical procedures and test of details for reasonableness of incurred and estimated efforts. Selected samples of contracts and performed a retrospective review of efforts incurred with estimated efforts to identify significant variations and verify whether those variations have been considered in estimating the remaining efforts to complete the contract; Selected samples of contracts and tested the operating effectiveness of the internal controls relating to efforts incurred and estimated through inspection of evidence of performance of these controls; Tested the access and application controls pertaining to time recording, allocation and budgeting systems which prevents unauthorised changes to recording of efforts incurred; Obtained an understanding of the Group's processes in collating the evidence supporting execution of work for each disaggregated type of revenue. Auditors have also obtained an understanding of the design of key controls for quantifying units of items / services that would be invoiced and the application of appropriate prices for each of such services; LARSEN & TOUBRO (iii) The consolidated financial statements of the Group combines financial statements of the Parent Company and its subsidiaries line-by-line by adding together the like items of assets, liabilities, income and expenses. All intra-group assets, liabilities, income, expenses and unrealised profits/losses on intra-group transactions are eliminated on consolidation. The accounting policies of subsidiaries have been harmonised to ensure the consistency with the policies adopted by the Parent Company. Inherent Limitations of Internal Financial Controls over Financial Reporting (i) The consolidated financial statements incorporate the financial statements of the Parent Company and its subsidiaries. For this purpose, an entity which is, directly or indirectly, controlled by the Parent Company is treated as subsidiary. The Parent Company together with its subsidiaries constitute the Group. Control exists when the Parent Company, directly or indirectly, has power over the investee, is exposed to variable returns from its involvement with the investee and has the ability to use its power to affect its returns. Depreciation, amortisation, impairment and obsolescence Finance costs Sales, administration and other expenses Employee benefits expense Finance cost of financial services business and finance lease activity Other manufacturing, construction and operating expenses (1315.23) (867.67) 24639.02 26346.70 2378.50 2858.57 Less: Overheads Capitalised and stock-in-trade Stores, spares and tools consumed Sub-contracting charges 1574.64 1800.15 24056.23 31059.78 178.94 15245.37 17002.51 Purchase of stock-in-trade Construction materials consumed Excise duty Changes in inventories of finished goods, work-in-progress Total expenses 13695.42 10540.63 Deferred tax (net) Current tax Tax expense: Profit before tax Exceptional items (net) 42 Profit before exceptional items and tax 128572.45 5.19 1.53 109693.06 128573.98 1928.73 2084.00 1538.52 1806.04 7637.18 7302.27 15270.79 18100.58 39 38 37 83317.84 99281.09 6019.74 7385.63 Cost of raw materials, components consumed 36 Manufacturing, construction and operating expenses: EXPENSES: S. N. SUBRAHMANYAN N. HARIHARAN Company Secretary M. No. A3471 Mumbai, May 10, 2019 Membership No. 39826 Partner SANJIV V. PILGAONKAR Firm's Registration No. 117366W/W-100018 by the hand of Chartered Accountants For DELOITTE HASKINS & SELLS LLP In terms of our report attached FINANCIAL STATEMENTS NOTES FORMING PART OF THE COMMITMENTS (capital and others) 1 to 69 33 32 CONTINGENT LIABILITIES 211004.54 1495.60 1461.97 243877.45 279134.07 TOTAL EQUITY AND LIABILITIES 3.20 52 classified as held for sale Liabilities associated with group(s) of assets 232.71 Chief Executive Officer & Managing Director Profit after tax (DIN 02255382) Chief Financial Officer & Whole-time Director (DIN 00019798) 121204.03 119862.10 1341.93 crore 2017-18 crore 141007.09 1851.53 142858.62 34 35 crore crore Note 2018-19 Total income Other income Revenue from operations INCOME: Consolidated Statement of Profit and Loss for the year ended March 31, 2019 CONSOLIDATED STATEMENT OF PROFIT AND LOSS | ANNUAL REPORT 2018-19 431 1337 Directors (DIN 00007848) N. KUMAR SUNITA SHARMA (DIN 02949529) M. M. CHITALE (DIN 00101004) SANJEEV AGA (DIN 00022065) (DIN 00041197) VIKRAM SINGH MEHTA SUBODH BHARGAVA (DIN 00035672) R. SHANKAR RAMAN 752.84 Share in profit/(loss) of joint ventures/associates (net) 294.75 1311.45 Non-controlling interests 7369.86 8905.13 Owners of the Company Profit for the year attributable to : 8167.69 9986.70 163.26 (229.88) 0.64 17.34 634.57 (0.52) 26.65 (9.31) Total comprehensive income for the year Other Comprehensive Income for the year [net of tax] Income tax (expenses)/income on cost of hedging reserve Cost of hedging reserve 82.68 (176.37) (8.38) 106.69 Income tax (expenses)/income on effective portion of gains and losses on hedging instruments in a cash flow hedge 91.06 (283.06) 1.16 10216.58 8004.43 Other comprehensive income for the year attributable to: Owners of the Company 2.00 2.00 Face value per equity share (*) 52.49 63.40 49 52.62 63.51 49 449 Diluted earnings per equity share (*) Basic earnings per equity share (*) 8167.69 9986.70 635.50 1355.56 7532.19 8631.14 Non-controlling interests Total comprehensive income for the year attributable to: Owners of the Company 163.26 (229.88) 0.93 162.33 44.11 Non-controlling interests (273.99) Effective portion of gains/(losses) on hedging instruments in a cash flow hedge *crore 79.94 crore crore (70.85) 34.84 (30.17) Gain/(loss) on remeasurements of the net defined benefit plans Income tax (expenses)/income on re-measurements of the net defined benefit plans 24.22 24.22 A. Items that will not be reclassified to profit or loss: Equity instruments through other comprehensive income Income tax on equity instruments through other comprehensive income Other comprehensive income Profit for the year 8004.43 10216.58 (435.86) (21.00) 55(f) 8440.29 10237.58 3198.87 4343.34 (533.40) (349.99) 50(a) 3732.27 4693.33 50(a) 11639.16 14580.92 11516.16 123.00 109687.87 10.98 14286.17 (5.47) 29.37 Brought forward - Other comprehensive income crore Note 2017-18 2018-19 Consolidated Statement of Profit and Loss for the year ended March 31, 2019 (contd.) LARSEN & TOUBRO 432 79.94 (70.85) Carried forward - Other comprehensive income 98.10 (20.48) 0.49 (3.25) Income tax (expenses)/income on foreign currency translation reserve 97.61 (17.23) Foreign currency translation reserve (47.53) (55.40) (2.05) 7.61 (45.48) (63.01) Debt instruments through other comprehensive income Income tax (expenses)/income on debt instruments through other comprehensive income B. Items that will be reclassified to profit or loss: (19.19) NOTES FORMING PART OF THE FINANCIAL STATEMENTS 1137.16 2667.81 4753.78 5648.62 10 Other non-current assets 2359.10 2754.92 3418.93 50(d) Deferred tax assets (net) 56032.51 62714.68 67969.35 3697.51 857.60 1144.05 9 Other financial assets 48234.72 54459.45 57788.88 8 Loans towards financing activities 1487.38 1793.85 1862.32 7 614.32 Current assets Inventories 11 Loans 1779.09 1198.39 5216.75 15 Other bank balances 3526.87 6834.34 6509.49 14 Cash and cash equivalents 27787.85 33116.98 37038.17 3 13 Trade receivables 14300.22 9464.25 13946.17 12 (ii) Consolidation of a subsidiary begins when the Parent Company, directly or indirectly, obtains control over the subsidiary and ceases when the Parent Company, directly or indirectly, loses control of the subsidiary. Income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated Statement of Profit and Loss from the date the Parent Company, directly or indirectly, gains control until the date when the Parent Company, directly or indirectly, ceases to control the subsidiary. Investments Financial assets 4139.74 4847.80 6413.93 Loans 2685.91 3365.47 4531.81 Goodwill Investment Property Capital work-in-progress Property, plant and equipment Non-current assets ASSETS: * crore As at 31-3-2018 crore crore As at 31-3-2019 crore Note Consolidated Balance Sheet as at March 31, 2019 CONSOLIDATED BALANCE SHEET | ANNUAL REPORT 2018-19 429 Mumbai, May 10, 2019 (Membership No. 039826) Sanjiv V. Pilgaonkar (Firm's Registration No. 117366W/W-100018) Chartered Accountants For DELOITTE HASKINS & SELLS LLP Our opinion is not modified in respect of the above matters with respect to our reliance on the work done by and the reports of such other auditors and the financial information certified by the Management. Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting in so far as it relates to 10 subsidiary companies, and 5 joint venture companies, which are companies incorporated in India, whose financial information is unaudited and whose efficacy of internal financial controls over financial reporting is based solely on the Management's certification provided to us and our opinion on the adequacy and operating effectiveness of the internal financial controls over financial reporting of the Group is not affected as the financial information of such entities is not material to the Group. Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting in so far as it relates to 34 subsidiary companies, 1 joint operation company, 7 joint venture companies and 3 associate companies, which are companies incorporated in India, is based solely on the corresponding reports furnished to us by the auditors of such companies incorporated in India. Other Matters In our opinion to the best of our information and according to the explanations given to us and based on the consideration of the reports of other auditors referred to in the Other Matters paragraph below, the Parent, its subsidiary companies, its joint operations, its joint ventures and its associate companies, which are companies incorporated in India, have, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2019, based on the internal control over financial reporting criteria established by the respective companies considering the essential components of internal control stated in the Guidance Note. Opinion Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Other intangible assets 16 Intangible assets under development Investments in joint ventures and associates 6 Other investments 2766.90 2481.59 2642.29 55(e) 11353.23 11300.36 11435.93 432.22 2030.51 4222.91 1398.66 1561.78 1826.91 3613.26 4345.86 4254.56 1944.71 2143.07 2483.56 11232.97 10642.04 10889.56 crore As at 1-4-2017 crore 2 2 3 455 Financial assets Current tax liabilities (net) 626.69 486.45 27 borrowings Current maturities of long term 29223.84 26 Borrowings Financial liabilities Current liabilities 172.14 67.97 610.95 637.92 22 526.60 73268.71 523.54 67340.58 226.09 72914.76 353.95 25 50(d) 24 0.55 74475.62 556.84 311.13 Provisions 74120.79 354.83 22 23 67566.67 22210.54 19331.85 15277.47 2525.05 3037.84 31 Provisions 23392.13 27095.64 31166.55 30 Other current liabilities 61736.87 77438.88 99244.27 130.26 30164.60 4828.64 5032.18 176.16 37621.22 42733.69 4815.08 22 29 Other financial liabilities 28 Due to others 261.12 small enterprises Due to micro enterprises and Trade payables: 10078.90 16534.47 Other financial liabilities 22 Borrowings Financial liabilities 211004.54 1649.37 243877.45 279134.07 TOTAL ASSETS 1512.43 39957.92 47897.02 52688.03 7.41 19 120 52 Group(s) of assets classified as held for sale Other current assets 73193.34 87373.20 107874.37 3286.34 4194.41 2006.28 18 Other financial assets 22026.52 32005.11 42530.82 17 Loans towards financing activities 430 559.72 Consolidated Balance Sheet as at March 31, 2019 (contd.) Equity Other non-current liabilities Deferred tax liabilities (net) 3140.03 5201.43 6826.11 49463.03 62374.80 186.59 49276.44 280.27 54623.23 280.55 62094.25 21 220 crore As at 1-4-2017 crore crore As at 31-3-2018 * crore crore As at 31-3-2019 crore Note LARSEN & TOUBRO Non-current liabilities Liabilities Non-controlling interests Company Equity attributable to owners of the Other equity Equity share capital EQUITY AND LIABILITIES: 1 to 69 54903.50 For DELOITTE HASKINS & SELLS LLP (4581.59) Direct taxes refund/(paid) [net] Firm's Registration No. 117366W/W-100018 by the hand of (135.26) Cash generated from operations (16459.25) (13855.16) (Increase)/decrease in loans and advances towards financing activities 9831.67 13719.90 Cash generated from operations before financing activities 11727.02 (3403.44) (642.38) (9395.14) 330.68 6672.34 Increase/(decrease) in trade and other payables (Increase)/decrease in inventories 13248.14 16112.02 (5.58) 111.39 125.74 21.81 157.97 Employee stock option-discount forming part of employee benefits expense (Increase)/decrease in trade and other receivables Adjustments for : (14501.11) Net cash (used in)/from operating activities (4716.85) (10031.02) 2748.08 236.91 Dividend received from other investments 0.66 19.44 Dividend received from joint ventures/associate 529.30 229.89 428.59 2551.37 484.65 (621.93) (2877.17) 862.13 (1164.82) 653.36 807.98 (1862.54) 730.61 43.62 Deposits/loans repaid by associates, joint ventures and third parties Interest received (93.62) Deposits/loans given to associates, joint ventures and third parties (3988.12) Change in cash and other bank balances not available for immediate use (3032.80) (Purchase)/sale of current investments (net) Sale of non-current investments Purchase of non-current investments Sale of fixed assets (including advance received) (4282.61) Expenditure on acquisition of fixed assets B. Cash flow from investing activities: Operating profit before working capital changes Settlement of derivative contracts related to current investments Gain on settlement of debt (415.61) 2018-19 2017-18 Consolidated Statement of Cash Flows for the year ended March 31, 2019 CONSOLIDATED STATEMENT OF CASH FLOWS | ANNUAL REPORT 2018-19 436 435 N. KUMAR (DIN 00007848) SUNITA SHARMA (DIN 02949529) M. M. CHITALE (DIN 00101004) Directors SANJEEV AGA (DIN 00022065) (DIN 00041197) crore VIKRAM SINGH MEHTA R. SHANKAR RAMAN Chief Financial Officer & Whole-time Director (DIN 00019798) (DIN 02255382) Chief Executive Officer & Managing Director S. N. SUBRAHMANYAN N. HARIHARAN Company Secretary M. No. A3471 Mumbai, May 10, 2019 Membership No. 39826 Partner SANJIV V. PILGAONKAR by the hand of Firm's Registration No. 117366W/W-100018 Chartered Accountants SUBODH BHARGAVA (DIN 00035672) crore A. Cash flow from operating activities: Profit before tax (excluding non-controlling interests and exceptional items) Adjustments for : (Profit)/loss on sale of a subsidiary classified under developmental projects segment 2217.72 (65.33) (686.23) (591.37) (Profit)/loss on sale of property, plant and equipment and investment property (net) (Profit)/loss on sale/fair valuation of investments (net) (665.67) (900.58) Interest income 1538.52 1806.04 Finance costs 17.38 Expenses on buyback of shares (53.53) 49.59 Effect of exchange rate changes on cash and cash equivalents (31.03) (101.14) Exchange difference on items grouped under financing/investing activities (2748.08) 1928.73 2084.00 Depreciation, amortisation, impairment and obsolescence (236.91) Dividend income 11516.16 14286.17 (Gain)/loss on derivatives at fair value through profit or loss (21.81) (125.74) Consideration received on disposal of subsidiaries (including advance received) Consideration paid on acquisition of subsidiaries 3544.75 6798.69 3253.94 (275.26) 9370.46 15440.98 (2470.70) (429.01) (1960.76) 149.31 Cash and cash equivalents at the end of the year Cash and cash equivalents at beginning of the year 6523.43 Net (decrease)/increase in cash and cash equivalents (A + B + C) 308.95 (2243.18) (403.93) (2982.36) Interest paid (including cash flows on account of interest rate swaps) Additional tax on dividend Dividend paid Settlement of derivative contracts related to borrowings 1413.12 2884.85 part stake in subsidiary companies Payment (to)/from non-controlling interests (net)- including sale proceeds on divestment of 2680.02 7765.14 Proceeds from other borrowings (net) [Note 62] Net cash (used in)/from financing activities 6798.69 Notes: 1. Statement of Cash Flows has been prepared under the indirect method as set out in the Indian Accounting Standard (Ind AS) 7 "Statement of Cash Flows" as specified in the Companies (Indian Accounting Standards) Rules, 2015. Chartered Accountants For DELOITTE HASKINS & SELLS LLP In terms of our report attached 4. Previous year's figures have been regrouped/reclassified wherever applicable. 6798.69 6523.43 320.31 290.07 1198.39 5216.75 (35.65) 13.94 Add: (i) Unrealised exchange (gain)/loss on cash and cash equivalents Less: (ii) Other bank balances disclosed under current assets [Note 15] Less: (iii) Cash and bank balances disclosed under non-current assets [Note 9] Total Cash and cash equivalents as per Statement of Cash Flows 8353.04 12016.31 320.31 290.07 1198.39 5216.75 crore 6834.34 6509.49 (a) Cash and cash equivalents disclosed under current assets [Note 14] (b) Other bank balances disclosed under current assets [Note 15] (c) Cash and bank balances disclosed under non-current assets [Note 9] Total Cash and cash equivalents as per Balance Sheet crore As at 31-3-2018 As at 31-3-2019 3. Cash and cash equivalents included in the Statement of Cash flows comprise the following: 2. Purchase & Sale of fixed assets represents additions & deletions to property, plant and equipment, investment property and intangible assets adjusted for movement of (a) capital work-in-progress for property, plant and equipment and investment property and (b) Intangible assets under development during the year. 46903.46 (36964.48) (14081.42) Partner Membership No. 39826 The Balance Sheet and the Statement of Profit and Loss are prepared and presented in the format prescribed in the Schedule III to the Companies Act, 2013 ("the Act"). The Statement of Cash Flows has been prepared and presented as per the requirements of Ind AS 7 "Statement of Cash Flows". The disclosure requirements with respect to items in the Balance Sheet and Statement of Profit and Loss, as prescribed in the Schedule III to the Act, are presented by way of notes forming part of the financial statements along with the other notes required to be disclosed under the notified Accounting Standards and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended. Amounts in the financial statements are presented in Indian Rupees in crore [1 crore = 10 million] rounded off to two decimal places as permitted by Schedule III to the Companies Act, 2013. Per share data are presented in Indian Rupees to two decimal places. (d) Basis of consolidation In terms of our report attached Repayments of non-current borrowings [Note 62] 24181.62 Proceeds from non-current borrowings [Note 62] 11.31 crore 2018-19 49.50 crore 2017-18 Proceeds from issue of share capital (including share application money)[net] C. Cash flow from financing activities: Consolidated Statement of Cash Flows for the year ended March 31, 2019 (contd.) LARSEN & TOUBRO 3914.50 50.47 (15.50) (213.77) (10999.39) Cash & cash equivalents discharged pursuant to disposal of subsidiaries Net cash (used in)/from investing activities 33.05 Cash & cash equivalents acquired pursuant to acquisition of subsidiaries (309.86) 1048.29 67.00 (c) Presentation of financial statements For DELOITTE HASKINS & SELLS LLP Above levels of fair value hierarchy are applied consistently and generally, there are no transfers between the levels of the fair value hierarchy unless the circumstances change warranting such transfer. (ii) Level 2 inputs are inputs, other than quoted prices included in level 1, that are observable for the asset or liability, either directly or indirectly; and Mumbai, May 10, 2019 N. HARIHARAN Company Secretary M. No. A3471 S. N. SUBRAHMANYAN Chief Executive Officer & Managing Director (DIN 02255382) R. SHANKAR RAMAN Chief Financial Officer & Whole-time Director (DIN 00019798) SUBODH BHARGAVA (DIN 00035672) VIKRAM SINGH MEHTA (DIN 00041197) SANJEEV AGA (DIN 00022065) M. M. CHITALE (DIN 00101004) SUNITA SHARMA (DIN 02949529) N. KUMAR (DIN 00007848) Directors 437 438 NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 Notes forming part of the Consolidated Financial Statements NOTE [1] Significant Accounting Policies (a) Statement of compliance The Group's financial statements have been prepared in accordance with the provisions of the Companies Act, 2013 and the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 and amendments thereof issued by the Ministry of Corporate Affairs in exercise of the powers conferred by section 133 of the Companies Act, 2013. In addition, the guidance notes/announcements issued by the Institute of Chartered Accountants of India (ICAI) are also applied except where compliance with other statutory promulgations require a different treatment. These financials statements have been approved for issue by the Board of Directors at their meeting held on May 10, 2019. (b) Basis of accounting The Group maintains its accounts on accrual basis following historical cost convention, except for certain financial instruments that are measured at fair value in accordance with Ind AS. Fair value measurements are categorised as below based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety: (i) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at measurement date (iii) Level 3 inputs are unobservable inputs for the valuation of assets or liabilities In terms of our report attached (6627.58) (27.65) 3032.12 3004.47 478.24 347.52 303.25 2742.30 36581.83 7369.86 Profit for the year (a) 8318.85 153.20 280.28 1-4-2017 Restated balance as at (753.49) (423.57) (1177.06) 70.97 50029.93 3563.60 53593.53 (753.49) [Refer Note 65] Change in accounting policy 347.52 478.24 303.25 2742.30 37335.32 8318.85 153.20 280.28 Balance as at 31-3-2017 sive Income Comprehen- Other bonds reserve through translation reserve instruments currency 70.97 49276.44 3140.03 52416.47 7369.86 634.57 8004.43 interests Other comprehensive 23.56 combination Share issue expenses Impact of business assets/liabilities Transfer to non-financial 2.16 2.16 2.16 (0.13) (0.13) (0.13) (0.28) (0.28) (0.28) │| 137.63 137.63 137.63 Issue of equity shares (46.19) 7532.19 635.50 8167.69 90.53 94.43 7393.42 (30.37) 62094.25 6826.11 68920.36 income for the year (a+b) Total comprehensive (46.19) 162.33 0.93 163.26 94.43 90.53 income (b) Transfer from/(to) retained Equity controlling Foreign Number of shares Particulars 2018-19 A. Equity share capital Consolidated Statement of Changes in Equity for the year ended March 31, 2019 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ANNUAL REPORT 2018-19 333 433 N. KUMAR (DIN 00007848) SUNITA SHARMA (DIN 02949529) M. M. CHITALE (DIN 00101004) Directors SANJEEV AGA (DIN 00022065) VIKRAM SINGH MEHTA (DIN 00041197) SUBODH BHARGAVA (DIN 00035672) Chief Financial Officer & Whole-time Director (DIN 00019798) R. SHANKAR RAMAN N. HARIHARAN Company Secretary M. No. A3471 Mumbai, May 10, 2019 Chief Executive Officer & Managing Director (DIN 02255382) S. N. SUBRAHMANYAN Membership No. 39826 Partner SANJIV V. PILGAONKAR by the hand of Firm's Registration No. 117366W/W-100018 Chartered Accountants crore Hedging Debt 2017-18 Number of shares Issued, subscribed and fully paid up equity shares outstanding at the beginning of the year Retained Earnings Capital Securities Employee Statutory reserve Redemp- premium share Reserves tion options Reserve (net) Total crore Non- Items of other comprehensive income Total Other Reserves and surplus- Equity application component Capital money of Foreign pending currency allotment convertible Share Particulars Other equity B. 280.27 1,40,13,69,456 280.55 1,40,27,29,385 Issued, subscribed and fully paid up equity shares outstanding at the end of the year 93.35 0.33 16,38,898 46,67,64,755 0.28 13,59,929 Add: Shares issued on exercise of employee stock options during the year Add: Bonus shares allotted during the year 186.59 93,29,65,803 280.27 1,40,13,69,456 crore earnings during the year SANJIV V. PILGAONKAR Utilised for issue of bonus shares bonds Other Comprehen- (441.05) sive Income Balance as at 31-3-2018 3.56 153.20 282.44 42.00 8363.02 313.56 3352.91 41077.32 437.77 Change in accounting policy reserve [Refer Note 1(i) and 44(h)] (1237.65) 24.78 54623.23 5201.43 59824.66 (1237.65) (2.73) (1240.38) Restated balance as at 1-4-2018 3.56 153.20 282.44 42.00 8363.02 313.56 3352.91 39839.67 572.67 437.77 Profit for the year (c) - (net) Reserve allotment convertible Employee share options (net) 3.56 21.38 divestment/acquisition Balance as at 31-3-2018 3.56 153.20 282.44 42.00 8363.02 313.56 3352.91 41077.32 21.38 1685.36 1706.74 572.67 437.77 24.78 54623.23 5201.43 59824.66 LARSEN & TOUBRO Consolidated Statement of Changes in Equity for the year ended March 31, 2019 (contd.) crore Items of other comprehensive income Total Other Non- Total Particulars Share money of Foreign pending currency Equity Reserves and surplus- application component Capital Capital Securities Employee Statutory reserve Redemp- premium Retained share Reserves Earnings tion options Foreign currency translation Hedging Debt Equity controlling interests reserve instruments through 8905.13 24.78 53385.58 5198.70 58584.28 8905.13 1311.45 10216.58 572.67 income (d) 153.20 282.44 42.00 8471.99 337.05 3851.68 48200.53 540.73 245.00 35.68 117.43 153.11 - (2243.18) (199.53) (2442.71) (50.01) (477.03) 2634.66 (2634.66) 113.83 (113.83) 3.56 (441.05) - (1960.76) (151.20) (2111.96) (93.35) (93.35) 5.57 37.18 31.61 || || Other comprehensive (441.05) (1960.76) (93.35) 0.02 (21.30) 610.61 (631.33) 31.61 42.00 || 3.56 | | || 434 Dividend paid for previous year Additional tax on dividend paid for the previous year Share application money received during the year Net gain/loss on transactions with non-controlling interests Increase in non-controlling interests due to dilution/ (27.65) 2634.66 113.83 8910.63 5.50 (192.40) (427.02) (55.15) (273.99) 44.11 (229.88) Total comprehensive income for the year (c+d) (31.94) (192.40) (55.15) 8631.14 1355.56 9986.70 Issue of equity shares (3.56) 108.97 105.41 6.50 111.91 Transfer to non-financial (31.94) (0.37) (486.58) assets/liabilities (12.19) 498.77 35.68 (427.02) Additional tax on dividend paid for the previous year Net gain/loss on transactions with non-controlling interests Increase in non-controlling interests due to dilution/ divestment/acquisition Balance as at 31-3-2019 earnings during the year Transfer from/(to) retained (0.37) (0.37) Employee share options (net) Dividend paid for the previous year (2243.18) J. Income from investment management fees is recognised in accordance with the contractual terms and the SEBI regulations based on average Assets Under Management (AUM) of mutual fund schemes over the period of the agreement in terms of which services are performed. Portfolio management fees are recognised in accordance with the related contracts entered with the clients over the period of the agreement. Trusteeship fees are accounted on accrual basis. K. Revenue from port operation services (upto the date of sale) is recognised on completion of respective services or as per terms agreed with the port operator, wherever applicable. L. Revenue from charter hire is recognised based on the terms of the time charter agreement. (j) Commission income is recognised as and when the terms of the contract are fulfilled. Impairment of financial assets: The Group recognises impairment loss on trade receivables using expected credit loss model which involves use of a provision matrix constructed on the basis of historical credit loss experience as permitted under Ind AS 109. Expected credit losses are the weighted average of credit losses with the respective risks of default occurring as the weights. Credit loss is the difference between all contractual cash flows that are due to the Group in accordance with the contract and all the cash flows that the Group expects to receive (i.e. all cash shortfalls), discounted at the original effective interest rate (or credit- adjusted effective interest rate for purchased or originated credit-impaired financial assets). The Group estimates cash flows by considering all contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) through the expected life of that financial instrument. The Group measures the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition. If the In respect of financial services business, the Group applies a separate model of the expected credit loss for recognising impairment loss on financial assets measured at amortised cost, debt instruments at FVTOCI, lease receivables, trade receivables and other contractual rights to receive cash or other financial asset, and financial guarantees not designated as at FVTPL as follows: On derecognition of a financial asset in its entirety, the difference between the carrying amount measured at the date of derecognition and the consideration received is recognised in profit or loss. the group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a pass-through arrangement; and a) the group has transferred substantially all the risks and rewards of the asset, or b) the group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. 2. the right to receive cash flows from the asset has expired, or I. 1. M. Revenue from operation and maintenance services of power plant receivable under the Power Purchase Agreement is recognised on accrual basis. B. In the case of the developmental project business and the realty business, revenue includes profit on sale of investment property or sale of stake in the subsidiary and/or joint venture companies as the sale/divestments are inherent in the business model. Notes forming part of the Consolidated Financial Statements (contd.) D. all critical approvals necessary for commencement of the project have been obtained; contract costs for work performed (excluding cost of land/developmental rights and borrowing cost) constitute at least 25% of the estimated total contract costs representing a reasonable level of development; at least 25% of the saleable project area is secured by contracts or agreements with buyers; and at least 10% of the total revenue as per the agreements of sale or any other legally enforceable documents is realised at the reporting date in respect of each of the contracts and the parties to such contracts can be reasonably expected to comply with the contractual payment terms. The costs incurred on property development activities are carried as "Inventories" till such time the outcome of the project cannot be estimated reliably and all the aforesaid conditions are fulfilled. When the outcome of the project can be ascertained reliably and all the aforesaid conditions are fulfilled, revenue from property development activity is recognised at cost incurred plus proportionate margin, using percentage of completion method. Percentage of completion is determined based on the proportion of actual cost incurred to date to the total estimated cost of the project. For the purpose of computing percentage of construction, cost of land, developmental rights and borrowing costs are excluded. Expected loss, if any, on the project is recognised as an expense in the period in which it is foreseen, irrespective of the stage of completion of the contract F. Rendering of services G. H. Revenue from rendering of services is recognised over time as and when the customer receives the benefit of the company's performance and the Company has an enforceable right to payment for services transferred. Unbilled revenue represents value of services performed in accordance with the contract terms but not billed. In respect of information technology (IT) business and technology services business, revenue from contracts awarded on time and material basis is recognised over a period of time when relevant services are rendered and related costs are incurred. Revenue from fixed price contracts is recognised over a period of time using the proportionate completion method. Revenue from contracts for rendering of engineering design services and other services which are directly related to the construction of an asset is recognised on the same basis as stated in (i) B above. Income from interest-bearing loans is recognised on accrual basis over the life of the loans based on the effective yield. Income from hire purchase and lease transactions is accounted on accrual basis, pro-rata for the period, at the rates implicit in the transaction. Income from bill discounting, advisory and syndication services and other financing activities is accounted on accrual basis. Revenue on account of construction services rendered in connection with Build-Operate-Transfer (BOT) projects undertaken by the Group is recognised during the period of construction using percentage of completion method. After the completion of construction period, revenue relatable to fare/toll collections of such projects from users of facilities is accounted when the amount is due and recovery is certain. License fees for way-side amenities are accounted on accrual basis. LARSEN & TOUBRO NOTE [1] (contd.) A financial asset is primarily derecognised when: 5. The group has elected to measure the investments in associates and joint ventures held through unit trusts at FVTPL. B. the Group has intention to complete the intangible asset and use or sell it; C. the Group has ability to use or sell the intangible asset; D. E. the manner in which the probable future economic benefits will be generated including the existence of a market for output of the intangible asset or intangible asset itself or if it is to be used internally, the usefulness of intangible assets; the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [1] (contd.) F. the Group has ability to reliably measure the expenditure attributable to the intangible asset during its development. Development expenditure that does not meet the above criteria is expensed in the period in which it is incurred. Intangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as "intangible assets under development". Intangible assets are amortised on straight line basis over the estimated useful life. The method of amortisation and useful life are reviewed at the end of each accounting year with the effect of any changes in the estimate being accounted for on a prospective basis. The estimated useful life for major categories of the intangible assets are as follows: (i) A. the technical feasibility of completing the intangible asset so that it will be available for use or sale; specialised software: over a period of three to ten years; (iii) development costs for new products: over a period of five years; (iv) customer contracts and relationships: over a period of the contract which generally is over four to ten years; (v) intangible assets with indefinite useful life that are acquired separately are carried at cost less accumulated impairment losses; (vi) fare collection rights obtained in consideration for rendering construction services represent the right to collect fare during the concession period in respect of Build-Operate-Transfer (BOT) projects undertaken by the Group. Fare collection rights are capitalised as intangible asset upon completion of the project at the cumulative construction costs including related margins. Till the completion of the project, the same is recognised as intangible assets under development. Fare collection rights are amortised using the straight line method over the period of concession; and (vii) exploration and evaluation expenditure incurred for potential mineral reserves is recognised and reported as part of "intangible assets under development" when such costs are expected to be either recouped in full through successful exploration and development of the area of interest or alternatively, by its sale; or when exploration and evaluation activities in the area of interest have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically available reserves and active and significant operations in relation to the area are continuing or are planned for the future. Exploration assets are re-assessed on a regular basis and these costs are carried forward provided that at least one of the conditions outlined above is met. All other exploration and evaluation expenditure is recognised as expense in the period in which it is incurred. Amortisation on impaired assets is provided by adjusting the amortisation charge in the remaining periods so as to allocate the asset's revised carrying amount over its remaining useful life. (o) Impairment of assets As at the end of each accounting year, the Group reviews the carrying amounts of its PPE, investment property and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If such indication exists, the PPE, investment property and intangible assets are tested for impairment so as to determine the impairment loss, if any. Goodwill and the intangible assets with indefinite life are tested for impairment each year. Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is determined: (i) in the case of an individual asset, at the higher of the net selling price and the value in use; and (ii) in the case of a cash generating unit (the smallest identifiable group of assets that generates independent cash flows), at the higher of the cash generating unit's net selling price and the value in use. (The amount of value in use is determined as the present value of estimated future cash flows from the continuing use of an asset and from its disposal at the end of its useful life. For this purpose, the discount rate (pre-tax) is determined based on the weighted average cost of capital of the Company suitably adjusted for risks specified to the estimated cash flows of the asset). If recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, such deficit is recognised immediately in the Statement of Profit and Loss as impairment loss and the carrying amount of the asset (or cash 446 (ii) technical know-how: over a period of three to seven years; NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 (ii) Development expenditure on new products is capitalised as intangible asset, if all of the following can be demonstrated: (i) C. D. Dividend income is accounted in the period in which the right to receive the same is established. Government grants, which are revenue in nature and are towards compensation for the qualifying costs, incurred by the Group, are recognised as other income in the Statement of Profit and Loss in the period in which such costs are incurred. Government grant receivable in the form duty credit scrips is recognised as other income in the Statement of Profit and Loss in the period in which the application is made to the government authorities and to the extent there is no uncertainty towards its receipt. Other items of income are accounted as and when the right to receive such income arises and it is probable that the economic benefits will flow to the group and the amount of income can be measured reliably. (k) Exceptional items An item of income or expense which by its size, type or incidence requires disclosure in order to improve an understanding of the performance of the Group is treated as an exceptional item and the same is disclosed in the notes to accounts. (l) Property, plant and equipment (PPE) PPE is recognised when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. PPE is stated at original cost net of tax/duty credits availed, if any, less accumulated depreciation and cumulative impairment, if any. PPE acquired on hire purchase basis are recognised at their cash values. Cost includes professional fees related to the acquisition of PPE and, for qualifying assets, borrowing costs capitalised in accordance with the Group's accounting policy. Own manufactured PPE is capitalised at cost including an appropriate share of overheads. Administrative and other general overhead expenses that are specifically attributable to construction or acquisition of PPE or bringing the PPE to working condition are allocated and capitalised as a part of the cost of the PPE. PPE not ready for the intended use on the date of the Balance Sheet are disclosed as "capital work-in-progress". (Also refer to policies on leases, borrowing costs, impairment of assets and foreign currency transactions below). Depreciation is recognised using straight line method so as to write off the cost of the assets (other than freehold land and properties under construction) less their residual values over their useful lives specified in Schedule II to the Companies Act, 2013, or in case of assets where the useful life was determined by technical evaluation, over the useful life so determined. Depreciation method is reviewed at each financial year end to reflect the expected pattern of consumption of the future economic benefits 443 444 Expenditure on research is expensed under respective heads of account in the period in which it is incurred NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 NOTE [1] (contd.) embodied in the asset. The estimated useful life and residual values are also reviewed at each financial year end with the effect of any change in the estimates of useful life/residual value is accounted on prospective basis. Where cost of a part of the asset ("asset component") is significant to total cost of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part is determined separately and such asset component is depreciated over its separate useful life. Depreciation on additions to/deductions from, owned assets is calculated pro rata from the date it is ready for use. Extra shift depreciation is provided on a location basis. Depreciation charge for impaired assets is adjusted in future periods in such a manner that the revised carrying amount of the asset is allocated over its remaining useful life. Assets acquired under finance leases are depreciated on a straight line basis over the lease term. Where there is reasonable certainty that the Group shall obtain ownership of the assets at the end of the lease term, such assets are depreciated based on the useful life adopted by the Group for similar assets. Freehold land is not depreciated. (m) Investment property Properties (including those under construction) held to earn rentals and/or capital appreciation are classified as investment property and are measured and reported at cost, including transaction costs. Depreciation is recognised using straight line method so as to write off the cost of the investment property less their residual values over their useful lives specified in Schedule II to the Companies Act, 2013, or in the case of assets where the useful life was determined by technical evaluation, over the useful life so determined. Depreciation method is reviewed at each financial year end to reflect the expected pattern of consumption of the future benefits embodied in the investment property. The estimated useful life and residual values are also reviewed at each financial year end and the effect of any change in the estimates of useful life/ residual value is accounted on prospective basis. Freehold land and properties under construction are not depreciated. An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss arising on derecognition of property is recognised in the Statement of Profit and Loss in the same period. (n) Intangible assets Intangible assets are recognised when it is probable that the future economic benefits that are attributable to the asset will flow to the enterprise and the cost of the asset can be measured reliably. Intangible assets are stated at original cost net of tax/duty credits availed, if any, less accumulated amortisation and cumulative impairment. Administrative and other general overhead expenses that are specifically attributable to acquisition of intangible assets are allocated and capitalised as a part of the cost of the intangible assets. Research and development expenditure on new products: Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements (contd.) NOTE [1] (contd.) generating unit) is reduced to its recoverable amount. For this purpose, the impairment loss recognised in respect of a cash generating unit is allocated first to reduce the carrying amount of any goodwill allocated to such cash generating unit and then to reduce the carrying amount of the other assets of the cash generating unit on a pro-rata basis. (r) Financial instruments Financial assets and/or financial liabilities are recognised when the Group becomes party to a contract embodying the related financial instruments. All financial assets, financial liabilities and financial guarantee contracts are initially measured at transaction values and where such values are different from the fair value, at fair value. Transaction costs that are attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from, as the case may be, the fair value of such financial assets or liabilities on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss. A financial asset and a financial liability is offset and presented on net basis in the balance sheet when there is a current legally enforceable right to set-off the recognised amounts and it is intended to either settle on net basis or to realise the asset and settle the liability simultaneously. (i) Financial assets A. All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets as follows: 1. Investments in debt instruments that are designated as fair value through profit or loss (FVTPL) - at fair value 2. Other investments in debt instruments - at amortised cost, subject to following conditions: The asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and 447 448 NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 (Also refer to policy on depreciation above) Notes forming part of the Consolidated Financial Statements (contd.) B. C. 3. 4. 6. • The contractual terms of instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Debt instruments that meet the following conditions are subsequently measured at fair value through other comprehensive income [FVTOCI] (unless the same are designated as fair value through profit or loss) • • The asset is held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets; and The contractual terms of instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Debt instruments at FVTPL is a residual category for debt instruments, if any, and all changes are recognised in profit or loss. Investments in equity instruments are classified as FVTPL, unless the related instruments are not held for trading and the Group irrevocably elects on initial recognition to present subsequent changes in fair value in other comprehensive income. NOTE [1] (contd.) Assets leased out under operating leases are continued to be shown under the respective class of assets. Rental income is recognised on a straight line basis over the term of the relevant lease. B. Lease rentals on assets taken under operating lease are charged to the Statement of Profit and Loss on a straight line basis over the term of the relevant lease. When an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit), except for allocated goodwill, is increased to the revised estimate of its recoverable amount, so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss is recognised for the asset (or cash generating unit) in prior years. A reversal of an impairment loss (other than impairment loss allocated to goodwill) is recognised immediately in the Statement of Profit and Loss. (p) Employee benefits (i) Short term employee benefits: Employee benefits such as salaries, wages, short term compensated absences, expected cost of bonus, ex-gratia, and performance linked rewards falling due wholly within twelve months of rendering the service are classified as short term employee benefits and are expensed in the period in which the employee renders the related service. (ii) Post-employment benefits: A. B. Defined contribution plans: The Group's superannuation scheme, state governed provident fund scheme, employee state insurance scheme, social security contributions and employee pension scheme are defined contribution plans. The contribution paid/payable under the schemes is recognised during the period in which the employee renders the related service. Defined benefit plans: The employees' gratuity fund schemes and employee provident fund schemes managed by board of trustees established by the company, the post-retirement medical care plan and the Parent Company pension plan represent defined benefit plans. The present value of the obligation under defined benefit plans is determined based on actuarial valuation using the Projected Unit Credit Method. The obligation is measured at the present value of the estimated future cash flows using a discount rate based on the market yield on government securities of a maturity period equivalent to the weighted average maturity profile of the defined benefit obligations at the Balance Sheet date. Re-measurement, comprising actuarial gains and losses, the return on plan assets (excluding amounts included in net interest on the net defined benefit liability or asset) and any change in the effect of asset ceiling (if applicable) is recognised in other comprehensive income and is reflected in retained earnings and the same is not eligible to be reclassified to profit or loss. Defined benefit costs comprising current service cost, past service cost and gains or losses on settlements are recognised in the Statement of Profit and Loss as employee benefits expense. Interest cost implicit in defined benefit employee cost is recognised in the Statement of Profit and Loss under finance cost. Gains or losses on settlement of any defined benefit plan are recognised when the settlement occurs. Past service cost is recognised as expense at the earlier of the plan amendment or curtailment and when the Group recognises related restructuring costs or termination benefits. In case of funded plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans to recognise the obligation on a net basis. (iii) Long term employee benefits: The obligation recognised in respect of long term benefits such as compensated absences, long service award etc. is measured at present value of estimated future cash flows expected to be made by the Group and is recognised in a similar manner as in the case of defined benefit plans vide (ii) B above. Long term employee benefit costs comprising current service cost and gains or losses on curtailments and settlements, re-measurements including actuarial gains and losses are recognised in the Statement of Profit and Loss as employee benefit expenses. Interest cost implicit in long term employee benefit cost is recognised in the Statement of Profit and Loss under finance cost. LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) A. The leases which are not classified as finance lease are operating leases. (ii) Operating leases: Assets given under a finance lease are recognised as a receivable at an amount equal to the net investment in the lease. Lease income is recognised over the period of the lease so as to yield a constant rate of return on the net investment in the lease. Assets taken under finance lease are capitalised at the commencement of the lease at the lower of the fair value or the present value of minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the outstanding liability for each period. B. For financial assets that are measured at FVTOCI, income by way of interest and dividend, provision for impairment and exchange difference, if any, (on debt instrument) are recognised in profit or loss and changes in fair value (other than on account of above income or expense) are recognised in other comprehensive income and accumulated in other equity. On disposal of debt instruments at FVTOCI, the cumulative gain or loss previously accumulated in other equity is reclassified to profit or loss. In case of equity instruments at FVTOCI, such cumulative gain or loss is not reclassified to profit or loss on disposal of investments. A. (i) Finance leases: The determination of whether an agreement is, or contains, a lease is based on the substance of the agreement at the date of inception. Power generation projects executed under long term Power Purchase Agreements (PPA) with state utilities that are in substance finance leases are classified accordingly. (q) Leases Termination benefits such as compensation under employee separation schemes are recognised as expense when the company's offer of the termination benefit is accepted or when the Group recognises the related restructuring costs whichever is earlier. (iv) Termination benefits: NOTE [1] (contd.) Leases where the all the risks and rewards of ownership of the related assets are substantially transferred to the lessee are classified as finance leases. 445 N. Other operational revenue represents income earned from the activities incidental to the business and is recognised when the performance obligation is satisfied and the right to receive the income is established as per the terms of the contract. Other income 3. When the Group has joint control of the arrangement based on contractually determined right to the assets and obligations for liabilities, it recognises such interests as joint operations. Joint control exists when the decisions about the relevant activities require unanimous consent of the parties sharing the control. In respect of its interests in joint operations, the Group recognises its share in assets, liabilities, income and expenses line-by-line in the standalone financial statements of the entity which is party to such joint arrangement which then becomes part of the consolidated financial statements of the Group when the financial statements of the Parent Company and its subsidiaries are combined for consolidation. Interests in joint operations are included in the segments to which they relate. The Group accounts for its business combinations under acquisition method of accounting. Acquisition related costs are recognised in the statement of profit and loss as incurred. The acquiree's identifiable assets, liabilities and contingent liabilities that meet the condition for recognition are recognised at their fair values at the acquisition date. 439 440 NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 Notes forming part of the Consolidated Financial Statements (contd.) Interests in joint operations NOTE [1] (contd.) Goodwill on consolidation arising on acquisitions on or after the date of transition represents the excess of (a) consideration paid for acquiring control and (b) acquisition date fair value of previously held ownership interest, if any, in a subsidiary over the Group's share in the fair value of the net assets (including identifiable intangibles) of the subsidiary as on the date of acquisition of control. Goodwill on consolidation is allocated to cash generating units or group of cash generating units that are expected to benefit from the synergies of the acquisition. Goodwill arising on consolidation is not amortised, however, it is tested for impairment annually. In the event of cessation of operations of a subsidiary, the unimpaired goodwill is written off fully. Business combinations arising from transfers of interests in entities that are under common control are accounted at historical cost. The difference between any consideration given and the aggregate historical carrying amounts of assets and liabilities of the acquired entity are recorded in shareholders' equity. (h) Operating cycle for current and non-current classification (i) Goodwill on consolidation as on the date of transition i.e. April 1, 2015 represents the excess of cost of acquisition at each point of time of making the investment in the subsidiary over the Group's share in the net worth of a subsidiary. For this purpose, the Group's share of net worth is determined on the basis of the latest financial statements, prior to the acquisition, after making necessary adjustments for material events between the date of such financial statements and the date of respective acquisition. Capital reserve on consolidation represents excess of the Group's share in the net worth of a subsidiary over the cost of acquisition at each point of time of making the investment in the subsidiary. Operating cycle for the business activities of the Group covers the duration of the specific project/contract/product line/service including the defect liability period, wherever applicable and extends up to the realisation of receivables (including retention monies) within the agreed credit period normally applicable to the respective lines of business. When the Group's share of losses of an a joint venture or associate exceeds the Group's interest in that joint venture or associate (which includes any long term interests that, in substance, form part of the Group's net investment in the joint venture or associate), the Group discontinues recognising its share of further losses. Additional losses are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the joint venture or associate. An investment in joint venture or associate is initially recognised at cost and adjusted thereafter to recognise the Group's share of profit or loss and other comprehensive income of the joint venture or associate. Gain or loss in respect of changes in other equity of joint ventures or associates resulting in dilution of stake in the joint ventures and associates is recognised in the Statement of Profit and Loss. On acquisition of investment in a joint venture or associate, any excess of cost of investment over the fair value of the assets and liabilities of the joint venture and associate, is recognised as goodwill and is included in the carrying value of the investment in the joint venture and associate. The excess of fair value of assets and liabilities over the investment is recognised directly in equity as capital reserve. The unrealised profits/losses on transactions with joint ventures and associates are eliminated by reducing the carrying amount of investment. 4. A. Interest income on investments and loans is accrued on a time basis by reference to the principal outstanding and the effective interest rate including interest on investments classified as fair value through profit or loss or fair value through other comprehensive income. Interest receivable on customer dues is recognised as income in the Statement of Profit and Loss on accrual basis provided there is no uncertainty towards its realisation. LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [1] (contd.) The consolidated financial statements have been presented to the extent possible, in the same manner as Parent Company's standalone financial statements. The carrying amount of investment in joint ventures and associates is reduced to recognise impairment, if any, when there is objective evidence of impairment. Profit or loss and other comprehensive income are attributed to the owners of the Parent Company and to the non- controlling interests and have been shown separately in the financial statements. (v) The gains/losses in respect of part divestment/dilution of stake in subsidiary companies not resulting in ceding of control, are recognised directly in other equity attributable to the owners of the Parent Company. (vi) The gains/losses in respect of divestment of stake resulting in ceding of control in subsidiary companies are recognised in the Statement of Profit and Loss. The investment representing the interest retained in a former subsidiary, if any, is initially recognised at its fair value with the corresponding effect recognised in the Statement of Profit and Loss as on the date the control is ceded. Such retained interest is subsequently accounted as an associate or a joint venture or a financial asset. (e) Investments in joint ventures and associates (f) When the Group has with other parties joint control of the arrangement and rights to the net assets of the joint arrangement, it recognises its interest as joint ventures. Joint control exists when the decisions about the relevant activities require unanimous consent of the parties sharing the control. When the Group has significant influence over the other entity, it recognises such interests as associates. Significant influence is the power to participate in the financial and operating policy decisions of the entity but is not control or joint control over the entity. The results, assets and liabilities of joint ventures and associates are incorporated in the consolidated financial statements using equity method of accounting after making necessary adjustments to achieve uniformity in application of accounting policies, wherever applicable. (iv) Non-controlling interests represent that part of the total comprehensive income and net assets of subsidiaries attributable to interest which is not owned, directly or indirectly, by the Parent Company. Revenue recognition (g) Business Combination/Goodwill on consolidation The Group recognises revenue from contracts with customers when it satisfies a performance obligation by transferring promised goods or service to a customer. The revenue is recognised to the extent of transaction price allocated to the performance obligation satisfied. Performance obligation is satisfied over time when the transfer of control of good or service to a customer is done over time and in other cases, performance obligation is satisfied at a point in time. For performance obligation satisfied over time, the revenue recognition is done by measuring the progress towards complete satisfaction of performance obligation. The progress is measured in terms of a proportion of actual cost incurred to-date, to the total estimated cost attributable to the performance obligation. For contracts where the aggregate of contract cost incurred to date plus recognised profits (or minus recognised losses as the case may be) exceeds the progress billing, the surplus is shown as contract asset and termed as "Due from customers". For contracts where progress billing exceeds the aggregate of contract costs incurred to-date plus recognised profits (or minus recognised losses, as the case may be), the surplus is shown as contract liability and termed as "Due to customers". Amounts received before the related work is performed are disclosed in the Balance Sheet as contract liability and termed as "Advances from customer". The amounts billed on customer for work performed and are unconditionally due for payment i.e only passage of time is required before payment falls due, are disclosed in the Balance Sheet as trade receivables. The amount of retention money held by the customers pending completion of performance milestone is disclosed as part of contract asset and is reclassified as trade receivables when it becomes due for payment. C. Revenue from construction/project related activity and contracts executed in joint arrangements under work-sharing arrangement [being joint operations, in terms of Ind AS 111 "Joint Arrangements"], is recognised on the same basis as adopted in respect of contracts independently executed by the Group. 441 442 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [1] (contd.) Fixed price contracts: Contract revenue is recognised over time to the extent of performance obligation satisfied and control is transferred to the customer. Contract revenue is recognised at allocable transaction price which represents the cost of work performed on the contract plus proportionate margin, using the percentage of completion method. Percentage of completion is the proportion of cost of work performed to-date, to the total estimated contract costs. Impairment loss (termed as provision for foreseeable losses in the financial statements) is recognised in profit or loss to the extent the carrying amount of the contract asset exceeds the remaining amount of consideration that the company expects to receive towards remaining performance obligations (after deducting the costs that relate directly to fulfill such remaining performance obligations). In addition, the Group recognises impairment loss (termed as provision for expected credit loss on contract assets in the financial statements) on account of credit risk in respect of a contract asset using expected credit loss model on similar basis as applicable to trade receivables. D. Revenue from property development activities: (i) Effective April 1, 2018, Revenue from property development activities is recognised when performance obligation is satisfied, customer obtains control of the property transferred and a reasonable expectation of collection of the sale consideration from the customer exists. The costs incurred on property development activities are carried as "Inventories" till such time the aforesaid conditions are fulfilled. (ii) For the periods ended on or before March 31, 2018, the revenue from the property development activities in the nature of a construction contract is recognised based on the 'Percentage of completion method' (POC) when the outcome of the contract can be estimated reliably upon fulfillment of all the following conditions: The Group has adopted Ind AS 115 "Revenue from Contracts with Customers" effective April 1, 2018. Ind AS 115 supersedes Ind AS 11 "Construction Contracts" and Ind AS 18 "Revenue". The Group has applied Ind AS 115 using the modified retrospective method and the cumulative impact of transition to Ind AS 115 has been adjusted against the Retained Earnings as at April 1, 2018. Accordingly, the figures of the previous year are not restated under Ind AS 115. 1. E. Cost plus contracts: Revenue from cost plus contracts is recognised over time and is determined with reference to the extent performance obligations have been satisfied. The amount of transaction price allocated to the performance obligations satisfied represents the recoverable costs incurred during the period plus the margin as agreed with the customer. NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 Revenue from sale of manufactured and traded goods is recognised when the control of the same is transferred to the customer and it is probable that the Group will collect the consideration to which it is entitled for the exchanged goods. Performance obligations in respect of contracts for sale of manufactured and traded goods is considered as satisfied at a point in time when the control of the same is transferred to the customer and where there is an alternative use of the asset or the company does not have either explicit or implicit right of payment for performance completed till date. In case where there is no alternative use of the asset and the company has either explicit or implicit right of payment considering legal precedents, performance obligation is considered as satisfied over a period of time and revenue is recognised over time. Revenue from construction/project related activity is recognised as follows: Transaction price is the amount of consideration to which the Group expects it to be entitled in exchange for transferring goods or services to a customer excluding amounts collected on behalf of a third party. Variable consideration is estimated using the expected value method or most likely amount as appropriate in a given circumstance. Payment terms agreed with a customer are as per business practice and the financing component, if significant, is separated from the transaction price and accounted as interest income. • a. Determining the revenue to be recognised in case of performance obligation satisfied over a period of time. Revenue recognition is done by measuring the progress towards complete satisfaction of performance obligation. The progress is LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [1] (contd.) b. Costs to obtain a contract which are incurred regardless of whether the contract was obtained are charged-off in profit & loss immediately in the period in which such costs are incurred. Incremental costs of obtaining a contract, if any, and costs incurred to fulfil a contract are amortised over the period of execution of the contract in proportion to the progress measured in terms of a proportion of actual cost incurred to-date, to the total estimated cost attributable to the performance obligation. Significant judgments are used in: Determining the estimated losses, which are recognised in the period in which such losses become probable based on the expected total contract cost as at the reporting date. Revenue for the periods upto June 30, 2017 includes excise duty collected from customers. Revenue from July 1, 2017 onwards is exclusive of Goods and Service tax (GST) which subsumed excise duty. Revenue also includes adjustments made towards liquidated damages and variation wherever applicable. Escalation and other claims, which are not ascertainable/acknowledged by customers are not taken into account. A. B. Revenue from sale of goods including contracts for supply/commissioning of complex plant and equipment is recognised as follows: 2. measured in terms of a proportion of actual cost incurred to-date, to the total estimated cost attributable to the performance obligation. 5 15 (in years) (in years) Maximum useful life Dredged channel and Breakwater structures Investment Property NOTE [3] 10 Ships 9 61 Minimum useful life 3 Cost 3 8 Aircraft 50 50 15 14 18 35 18 3 12 3 30 3 7 15 Owned vehicles 19.17 489.27 15250.34 2952.14 139.58 1502.55 Office equipment 45 455 (c) Depreciation for the year includes 8.06 crore (previous year: 4.85 crore) on account of obsolescence. (b) Carrying value of property, plant and equipment having restriction on title as at March 31, 2019 2047.41 crore (previous year: 2042.16 crore). Carrying value of property, plant and equipment pledged as collateral for liabilities and/or commitments as at March 31, 2019 2073.80 crore (previous year: 2073.45 crore). (a) 456 Notes: Add: Capital work-in-progress 217.92 70.56 69.94 1197.44 1164.05 224.74 10889.56 10642.04 6.11 319.37 234.68 5723.95 217.92 208.45 4390.38 4.56 Depreciation 2483.56 2143.07 13373.12 12785.11 NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [2] (contd.) Computers Plant and equipment 234567 Buildings Leasehold land 1 no. Class of assets Sr. Range of useful life of property, plant and equipment is as below: (g) Cost as at April 1, 2018 of individual assets has been reclassified, wherever necessary. (f) (e) Owned assets given on operating lease have been presented separately under respective class of assets as "Leased out" pursuant to Ind AS 17 "Leases". (d) Increase in impairment as on March 31, 2019 is on account of foreign currency fluctuation 6.82 crore. Further impairment on CWIP during the year is 175.55 crore. Impairment during the previous year was ₹115.41 crore and reversal of impairment during the previous year was 0.49 crore. Furniture and fixtures crore (0.79) Book value 2.48 5.33 34.95 0.98 0.05 24.37 12.48 1978.65 8.87 30.43 4.71 1872.38 1941.22 2.48 Add: Capital work-in-progress 51.31 (5.17) 34.78 34.95 4.71 536.39 573.99 1335.99 1367.23 38.63 13.25 13.25 (4.38) 2382.18 2404.64 4254.56 4345.86 (a) 7.37 73.31 2017-18 2018-19 148.71 crore Direct operating expenses arising from investment property that generated rental income Notes: 2 1 Particulars Sr. No. (c) Amount recognised in the Statement of Profit and Loss for investment property: (b) Useful life of building included in investment property: 20 to 60 years Carrying value of Investment property pledged as collateral for liabilities and/or commitments and having restriction on title as at March 31, 2019 0.16 crore (previous year: 0.16 crore) Rental income derived from investment property 26.64 29.62 (106.18) 104.63 1374.62| 0.62 (158.02) 112.64 1928.40 For the Up to As at 31-03-2019 31-03-2018 Deductions currency and owners fluctuation inventories Additions As at 1-4-2018 Foreign Foreign Class of assets Transfer (to)/from Transfer (to)/from inventories period currency fluctuation Deductions 12.68 2.48 8.14 5.33 0.62 (51.84) 8.01 553.78 581.80 31.21 1396.85 188.58 1978.65 219.79 188.81 1777.90 Previous year Total Buildings Land property property occupied occupied Up to Up to Up to As at As at 31-3-2019 31-3-2018 31-3-2019 31-3-2019 31-3-2018 and owners Impairment 99 1.14 (d) Fair value of investment property: 6456.76 crore as at March 31, 2019 (6448.68 crore as at March 31, 2018). 2018-19 2017-18 Investment property 13.89 51.98 Capital work-in-progress (PPE) 134.34 102.45 Intangible assets under development 942.07 914.93 1090.30 Class of Assets 1069.36 457 458 NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [6] Non-current Assets Financial Assets - Other Investments Equity instruments Preference shares Government and trust securities Debentures and bonds Mutual funds Security receipt (b) The average capitalization rate for borrowing cost is 9.70%. (previous year: 10.06%) Units of fund crore Addition to other intangible assets include internally developed intangible assets: 88.02 crore (previous year: 74.43 crore) Notes: Total 3178.66 57.73 2386.69 12.93 15.44 5620.57 1148.15 0.01 257.22 7.31 15.03 1397.66 4222.91 2030.51 (a) Borrowing cost capitalised in accordance with Ind AS 23 "Borrowing Costs" is as follows: Previous year 78.04 1732.76 25.36 6.89 3178.66 917.17 0.03 220.86 16.07 5.98 1148.15 Add: Intangible assets under development 11435.93 11300.36 15658.84 13330.87 1349.39 NOTE [7] Particulars Non-current Assets Financial Assets - Loans 215.82 208.39 Loans and advances to related parties Considered good - unsecured 1645.35 1584.23 Others loans Considered good - secured 0.08 0.23 Considered good - unsecured 114.87 234.55 26.16 1.00 113.80 1.07 1.00 Credit impaired 0.36 0.34 Less: Allowance for expected credit loss 0.36 0.34 1862.32 1793.85 43.10 Less: Allowance for expected credit loss 28.30 Less: Allowance for expected credit loss 244.12 Particulars As at 31-3-2019 As at 31-3-2018 crore crore 574.21 667.19 312.30 285.72 1832.55 813.20 1248.10 19.69 18.94 791.07 1016.88 188.79 4531.81 128.64 3365.47 As at 31-3-2019 As at 31-3-2018 crore crore crore crore Security deposits Considered good - unsecured 47.64 3675.76 1538.27 3.03 37.68 3723.40 As at As at 31-3-2019 31-3-2018 48.10 # 1826.91 1561.78 consolidation Previous year 1446.76 245.24 42.67 124.79 1609.88 48.10 1561.78 Refer Note 51 #Impairment upto 31-03-2019 48.10 crore, during the year * nil 1875.01 NOTE [5] crore Cost Amortisation Book value Class of assets Pursuant to As at acquisition of 1-4-2018 subsidiaries Foreign Additions currency Deductions fluctuation As at 31-3-2019 Up to 31-3-2018 Other Intangible assets and Intangible assets under development Pursuant to acquisition of subsidiaries 5.46 1609.88 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [3] (contd.) (e) The fair values of investment property have been determined with the help of internal architectural department and independent valuers on a case to case basis. Fair value of property that are evaluated by independent valuers amounted to 2693.38 crore. (previous year: 2510.89 crore). Valuation is based on government rates, market research, marked trend and comparable values as considered appropriate. (f) Impairment during the year 2.23 crore includes on CWIP (previous year: 2.48 crore on land and NOTE [4] Goodwill 0.15 crore on account of foreign currency fluctuation on land and ₹99.33 crore 133.49 crore on CWIP) crore Cost Amortisation Impairment Book value 259.67 Pursuant to As at 1-4-2018 Additions* Foreign currency fluctuation Foreign As at Up to acquisition Deductions 31-3-2019 31-3-2018 For the of period currency Deductions fluctuation Up to As at 31-3-2019 31-3-2019 subsidiaries Goodwill on Class of assets Foreign For the currency Deductions New Product Design and Development 223.39 77.07 (0.32) 7.60 292.54 108.52 42.55 (0.07) 7.28 143.72 148.82 114.87 978.17 226.86 210.82 57.32 63.48 70.80 10.10 0.01 0.01 Customer contracts 207.85 53.81 0.32 6.71 268.69 112.11 45.47 3.13 160.71 107.98 95.74 Fare Collection Rights 1548.23 2175.17 and relationship 3.86 6.24 10.11 Up to As at As at year 31-3-2019 31-3-2019 31-3-2018 fluctuation Specialised Software 1072.92 0.06 126.65 6.54 1205.03 862.10 0.01 112.86 4.25 1.05 Technical knowhow 120.02 7.48 6.70 120.80 49.22 14.80 6.70 Trade Names 6.25 3.86 9.96 86.26 364.76 16838.25 4390.38 1.76 1523.39 Other commitments related to sales/procurements made in the normal course of business are not disclosed to avoid excessive details. 82.79 ii. non-cash items such as depreciation, provisions, deferred taxes, unrealised foreign currency gains and losses, and undistributed profits of associates and joint ventures; and iii. all other items for which the cash effects are investing or financing cash flows. Cash and cash equivalents (including bank balances) shown in the Statement of Cash Flows exclude items which are not available for general use as at the date of Balance Sheet. (ae) Key sources of estimation The preparation of financial statements in conformity with Ind AS requires that the management of the Group makes estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates include useful lives of property, plant and equipment & intangible assets, allowance for doubtful debts/advances, future obligations in respect of retirement benefit plans, expected cost of completion of contracts, provision for rectification costs, fair value measurement etc. Difference, if any, between the actual results and estimates is recognised in the period in which the results are known. LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) i. changes during the period in inventories and operating receivables and payables, transactions of a non-cash nature; NOTE [2] crore Cost Depreciation Impairment Book value Class of assets Pursuant to As at acquisition 1-4-2018 Additions of Property, Plant and Equipment and Capital work-in-progress Foreign currency Deductions fluctuation Statement of Cash Flows is prepared segregating the cash flows into operating, investing and financing activities. Cash flow from operating activities is reported using indirect method adjusting the net profit for the effects of: Non-current assets and disposal groups classified as held for sale are measured at lower of their carrying amount and fair value less costs to sell. (iii) a reliable estimate can be made of the amount of the obligation Provision is measured using the cash flows estimated to settle the present obligation and when the effect of time value of money is material, the carrying amount of the provision is the present value of those cash flows. Reimbursement expected in respect of expenditure required to settle a provision is recognised only when it is virtually certain that the reimbursement will be received. Contingent liability is disclosed in case of: (i) a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation; and (ii) a present obligation arising from past events, when no reliable estimate is possible. Contingent assets are disclosed where an inflow of economic benefits is probable. Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date. Where the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under such contract, the present obligation under the contract is recognised and measured as a provision. 453 454 (ad) Statement of Cash Flows NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 NOTE [1] (contd.) (ab) Commitments Commitments are future liabilities for contractual expenditure, classified and disclosed as follows: a) estimated amount of contracts remaining to be executed on capital account and not provided for; uncalled liability on shares and other investments partly paid; c) funding related commitment to associate and joint venture companies; and d) other non-cancellable commitments, if any, to the extent they are considered material and relevant in the opinion of management. (ac) Non-current assets held for sale Non-current assets and disposal groups are classified as held for sale if their carrying amount is intended to be recovered principally through a sale (rather than through continuing use) when the asset (or disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sale of such asset (or disposal group) and the sale is highly probable and is expected to qualify for recognition as a completed sale within one year from the date of classification. Notes forming part of the Consolidated Financial Statements (contd.) (ii) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and Pursuant to As at Up to acquisition For the year of 31-3-2019 31-3-2018 currency Deductions 147.46 7.36 556 0.15 0.07 27.69 424.49 442.16 0.07 27.69 1343.92 1015.47 9.51 634.76 189.31 450 195.54 3008.75 2986.01 Owned Leased out 7219.77 167.38 0.01 100 780.33 41.32 51.44 200.24 7851.31 2729.71 0.01 925.04 Plant & equipment Foreign 0.50 17.98 0.15 Up to Up to Up to 31-3-2019 31-3-2018 31-3-2019 As at As at 31-3-2019 31-03-2018 fluctuation subsidiaries subsidiaries Land Freehold 573.31 352.93 0.26 7.07 919.43 488.95 919.43 573.31 451.79 1025.10 Buildings 3664.27 0.82 168.69 0.05 0.58 352.98 0.84 20.44 0.24 452.18 7.31 1371.61 15.17 3839.05 9.63 17.98 9.63 Taken on lease (i) the Group entity has a present obligation (legal or constructive) as a result of a past event; and Provisions are recognised only when: (aa) Provisions, contingent liabilities and contingent assets (s) Inventories Inventories are valued after providing for obsolescence, as under: (i) Raw materials, components, construction materials, stores, spares and loose tools at lower of weighted average cost or net realisable value. However, these items are considered to be realisable at cost if the finished products in which they will be used, are expected to be sold at or above cost. (ii) Manufacturing work-in-progress at lower of weighted average cost including related overheads or net realisable value. In some cases, manufacturing work-in-progress are valued at lower of specifically identifiable cost or net realisable value. In the case of qualifying assets, cost also includes applicable borrowing costs vide policy relating to borrowing costs. (iii) Finished goods and stock-in-trade (in respect of goods acquired for trading) at lower of weighted average cost or net realisable value. Cost includes related overheads and excise duty paid/payable on such goods. (iv) Completed property/work-in-progress (including land) in respect of property development activity at lower of specifically identifiable cost or net realisable value. Assessment of net realisable value is made at each subsequent period end and when the circumstances that previously caused inventories to be written-down below cost no longer exist or when there is clear evidence of an increase in net realisable value because of changed economic circumstances, the write-down, if any, in the past period is reversed to the extent of the original amount written-down so that the resultant carrying amount is the lower of the cost and the revised net realisable value. (t) Cash and bank balances Cash and bank balances also include fixed deposits, margin money deposits, earmarked balances with banks and other bank balances which have restrictions on repatriation. Short term and liquid investments being subject to more than insignificant risk of change in value, are not included as part of cash and bank balances. Subsequent to initial recognition, the liability component of the compound financial instrument is measured at amortised cost using the effective interest method. The equity component of a compound financial instrument is not remeasured subsequently. (u) Securities premium Securities premium includes: A. The difference between the face value of the equity shares and the consideration received in respect of shares issued. B. The fair value of the stock options which are treated as expense, if any, in respect of shares allotted pursuant to Stock Options Scheme. (ii) The issue expenses of securities which qualify as equity instruments are written off against securities premium. (v) Borrowing Costs Borrowing costs include finance costs calculated using the effective interest method, finance charges in respect of assets acquired on finance lease and exchange differences arising on foreign currency borrowings, to the extent they are regarded as an adjustment to finance costs. In cases where hedging instruments are acquired for protection against exchange rate risk related to borrowings and are accounted as hedging a time-period related hedge item, the borrowing costs also include the amortisation LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [1] (contd.) (i) of premium element of the forward contract and foreign currency basis spread as applicable, over the period of the hedging instrument. (iv) Compound financial instruments issued by the Group which can be converted into fixed number of equity shares at the option of the holders irrespective of changes in the fair value of the instrument are accounted by separately recognising the liability and the equity components. The liability component is initially recognised at the fair value of a comparable liability that does not have an equity conversion option. The equity component is initially recognised at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. The directly attributable transaction costs are allocated to the liability and the equity components in proportion to their initial carrying amounts. NOTE [1] (contd.) LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [1] (contd.) credit risk on a financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses. 12-month expected credit losses are portion of the lifetime expected credit losses and represent the lifetime cash shortfalls that will result if default occurs within the 12 months weighted by the probability of default after the reporting date and thus, are not cash shortfalls that are predicted over the next 12 months. When making the assessment of whether there has been a significant increase in credit risk since initial recognition, the Group uses the change in the risk of a default occurring over the expected life of the financial instrument instead of the change in the amount of expected credit losses. To make that assessment, the Group compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition and considers reasonable and supportable information, that is available without undue cost or effort, that is indicative of significant increases in credit risk since initial recognition. (ii) Financial liabilities A. B. Financial liabilities, including derivatives and embedded derivatives, which are designated for measurement at FVTPL are subsequently measured at fair value. Financial guarantee contracts are subsequently measured at the amount of impairment loss allowance or the amount recognised at inception net of cumulative amortisation, whichever is higher. All other financial liabilities including loans and borrowings are measured at amortised cost using Effective Interest Rate (EIR) method. profit or loss. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognised immediately in profit or loss. A financial liability is derecognised when the related obligation expires or is discharged or cancelled. A. Fair value hedges: Changes in fair value of the designated portion of derivatives that qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. The fair value adjustment to the carrying amount of the hedged item arising from the hedged risk is amortised to profit or loss from that date. B. Cash flow hedges: In case of transaction related hedges, the effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in other comprehensive income and accumulated in equity as 'hedging reserve'. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss. Amounts previously recognised in other comprehensive income and accumulated in equity relating to the effective portion are reclassified to profit or loss in the periods when the hedged item affects profit or loss, in the same head as the hedged item. The effective portion of the hedge is determined at the lower of the cumulative gain or loss on the hedging instrument from inception of the hedge and the cumulative change in the fair value of the hedged item from the inception of the hedge and the remaining gain or loss on the hedging instrument is treated as ineffective portion. In case of time period related hedges, the premium element and the spot element of a forward contract is separated and only the change in the value of the spot element of the forward contract is designated as the hedging instrument. Similarly, wherever applicable, the foreign currency basis spread is separated from the financial instrument and is excluded from the designation of that financial instrument as the hedging instrument in case of time period related hedges. The changes in the fair value of the premium element of the forward contract or the foreign currency basis spread of the financial instrument is accumulated in a separate component of equity as 'cost of hedging'. The changes in the fair value of such premium element or foreign currency basis spread are reclassified to profit or loss as a reclassification adjustment on a straight line basis over the period of the forward contract or the financial instrument. The cash flow hedges are allocated to the forecast transactions on gross exposure basis. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. Any gain or loss recognised in other comprehensive income and accumulated in equity at that time remains in equity and is recognised in profit or loss when the forecast transaction is ultimately recognised in 449 450 450 NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 Notes forming part of the Consolidated Financial Statements (contd.) (iii) The Group designates certain hedging instruments such as derivatives, embedded derivatives and in respect of foreign currency risk, certain non-derivatives as either fair value hedges, cash flow hedges, or hedges of net investments in foreign operations. Hedges of foreign exchange risk on firm commitments are accounted as cash flow hedges. Borrowing costs net of any investment income from the temporary investment of related borrowings that are attributable to the acquisition, construction or production of a qualifying asset are capitalised/inventoried as part of cost of such asset till such time the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognised in profit or loss in the period in which they are incurred. (w) Share-based payment arrangements The stock options granted to employees pursuant to the Group's Stock Options Schemes, are measured at the fair value of the options at the grant date. The fair value of the options is treated as discount and accounted as employee compensation cost over the vesting period on a straight line basis. The amount recognised as expense in each year is arrived at based on the number of grants expected to vest. If a grant lapses after the vesting period, the cumulative discount recognised as expense in respect of such grant is transferred to the general reserve within equity. The share based payment equivalent to the fair value as on the date of grant of employee stock options granted to key managerial personnel is disclosed as a related party transaction in the year of grant. (iii) Most of the centrally incurred costs are allocated to segments mainly on the basis of their respective expected segment revenue estimated at the beginning of the reported period. (iv) Income which relates to the Group as a whole and not allocable to segments is included in "unallocable corporate income". (v) Segment result includes margins on inter-segment capital jobs, which are reduced in arriving at the profit before tax of the Group. (vi) Segment result includes the finance costs incurred on interest bearing advances with corresponding credit included in "unallocable corporate income". (vii) Segment results have not been adjusted for the exceptional item attributable to the corresponding segment. The said exceptional item has been included in "unallocable corporate income net of expenditure". The corresponding segment assets have been carried under the respective segments without adjusting the exceptional item. (viii) Segment assets and liabilities include those directly identifiable with the respective segments. In respect of (a) Financial Services segment, and (b) Power Generation projects under Developmental Projects segment which are classified as assets given on finance lease, segment liabilities include borrowings as the finance costs on borrowings are accounted as segment expenses in respect of the segment and projects. Investment in joint ventures and associates identified with a particular segment are reported as part of the segment assets of those respective segments. Unallocable corporate assets and liabilities represent the assets and liabilities that relate to the Group as a whole. (ix) Segment non-cash expenses forming part of segment expenses includes the fair value of the employee stock options which is accounted as employee compensation cost [see Note 1(w) above] and is allocated to the segment. (x) Segment revenue resulting from transactions with other business segments is accounted on the basis of transfer price which are either determined to yield a desired margin or agreed on a negotiated basis. (z) Taxes on income (ii) Expenses that are directly identifiable with/allocable to segments are considered for determining the segment result. In respect of (a) Financial Services segment and (b) Power Generation projects under Developmental Projects segment which are classified as assets given on finance lease, the finance costs on borrowings are accounted as segment expenses. Tax on income for the current period is determined on the basis of taxable income (or on the basis of book profits wherever minimum alternate tax is applicable) and tax credits computed in accordance with the provisions of the applicable tax laws, and based on the expected outcome of assessments/appeals. LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [1] (contd.) Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the Group's financial statements and the corresponding tax bases used in computation of taxable profit and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date. Deferred tax liabilities are generally recognised for all taxable temporary differences including the temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Dividend distribution tax payable on profits of subsidiary companies which are proposed to be distributed in foreseeable future, is recognised as deferred tax liability with corresponding effect in the Statement of Profit and Loss in the period in which such profits are proposed to be so distributed. Deferred tax assets are generally recognised for all taxable temporary differences to the extent that is probable that taxable profits will be available against which those deductible temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets relating to unabsorbed depreciation/business losses/losses under the head "capital gains" are recognised and carried forward to the extent of available taxable temporary differences or where there is convincing other evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized. Deferred tax assets in respect of unutilised tax credits which mainly relate to minimum alternate tax and dividend distribution tax paid or payable by the subsidiary companies are recognized, to the extent it is probable of such unutilised tax credits will get realized, in the period in which such determination is made. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of reporting period, to recover or settle the carrying amount of its assets and liabilities. Transaction or event which is recognised outside profit or loss, either in other comprehensive income or in equity, is recorded along with the tax as applicable. Dividend distribution tax paid on profits distributed by the subsidiary company during the period is treated as an item of expense and recognised in the Statement of Profit and Loss. The dividend distribution tax paid in earlier years for which set off is available against the tax liability arising out of the dividend distribution by the Parent Company is recognised as an item of income in the period in which such set off is availed with corresponding effect in the equity to the extent of such set off. Both the recognition of expense and income as aforesaid are included in the current tax in the Statement of Profit and Loss. (i) Segment revenue includes sales and other operational revenue directly identifiable with/allocable to the segment including (a) inter-segment revenue and (b) profit on sale of stake in the subsidiary and/or joint venture companies under Developmental projects segment and Realty business grouped under "Others" segment Segment accounting policies are in line with the accounting policies of the Group. In addition, the following specific accounting policies have been followed for segment reporting: Operating segments are those components of the business whose operating results are regularly reviewed by the chief operating decision making body in the Group to make decisions for performance assessment and resource allocation. The reporting of segment information is the same as provided to the management for the purpose of the performance assessment and resource allocation to the segments. (x) Foreign currencies (i) The functional currency and presentation currency of the Group is Indian Rupee. Functional currency of the Group and foreign operations has been determined based on the primary economic environment in which the Group and its foreign operations operate considering the currency in which funds are generated, spent and retained. (ii) Transactions in currencies other than the Group's functional currency are recorded on initial recognition using the exchange rate at the transaction date. At each Balance Sheet date, foreign currency monetary items are reported at the closing spot rate. Non-monetary items that are measured in terms of historical cost in foreign currency are not retranslated. Exchange differences that arise on settlement of monetary items or on reporting of monetary items at each Balance Sheet date at the closing spot rate are recognised in the Statement of Profit and Loss in the period in which they arise except for: A. B. exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to finance costs on those foreign currency borrowings; exchange differences on transactions entered into in order to hedge certain foreign currency risks; and C. exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur (therefore forming part of the net investment in foreign operation), which are recognised initially in other comprehensive income and reclassified from equity to profit or loss on repayment of the monetary items. (iii) Exchange rate as of the date on which the non-monetary asset or non-monetary liability is recognised on payment or receipt of advance consideration is used for initial recognition of related asset, expense or income. (iv) Financial statements of foreign operations whose functional currency is different than Indian Rupees are translated into Indian Rupees as follows: A. assets and liabilities for each Balance Sheet presented are translated at the closing rate at the date of that Balance Sheet; B. income and expenses for each income statement are translated at average exchange rates; and C. all resulting exchange differences are recognised in other comprehensive income and accumulated in equity as foreign currency translation reserve for subsequent reclassification to profit or loss on disposal of such foreign operations. The portion of foreign currency translation reserve attributed to non-controlling interests is reflected as part of non- controlling interests. 451 452 NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [1] (contd.) (y) Accounting and reporting of information for Operating Segments 25.80 (0.02) 118.90 3561.66 28.95 4260.70 4461.70 383.11 77.75 6.86 43.87 423.85 175.03 57.35 4.82 28.05 209.15 214.70 208.08 Leased out Owned 30.68 3.13 9.98 6.55 7.10 17.28 Sub total -Vehicles 413.79 77.75 6.86 60.90 437.50 188.43 60.48 17.03 13.65 13.40 4.82 Vehicles 0.24 186.31 24 184.20 217.32 Leased out 11.81 Sub total - Furniture & fixtures 393.43 0.07 30.97 223.56 3.88 5.57 ' 1.51 1.30 5.78 2.11 6.24 62.63 2.77 7.95 227.10 0.24 3.92 7.89 14.70 413.65 169.63 0.02 0.24 38.03 221.80 225.36 210.53 802.92 843.52 Leasehold Improvements 114.50 15.42 (0.03) 0.50 Sub total - Other assets 1406.76 Total 15250.34 5.84 Previous year 110.58 3.40 1863.01 161.76 1270.57 (0.03) 0.50 ལྐུ|g|g| 129.39 44.56 14.56 (0.02) 0.27 58.83 1516.81 242.71 14288.11 215.70 48.81 2.37 Other assets Aircraft 244.45 244.45 16.38 13.67 30.05 Ships 36.73 1013.45 167.56 92.79 129.52 14.21 5.75 I 19.96 214.40 228.07 109.56 22.52 Dredged channel and Breakwater structures 1011.08 I 0.24 6.65 221.32 2.77 Leased out Sub total-Computers 1.12 637.47 0.84 0.28 1.10 0.10 2.05 239.94 0.79 31.44 146.08 848.81 1.14 146.18 888 0.72 227 0.02 27.67 483.69 364.84 272.23 1.66 0.26 365.22 0.02 1.14 19 - Sub total Plant & equipment 7387.15 0.01 821.65 51.44 24.33 184.37 14.76 224.57 8035.68 2744.47 15.67 15.43 15.00 169.37 152.62 0.01 940.71 30.60 848.53 364.12 25.80 28.36 28.95 4430.07 4614.32 Computers Owned 636.35 2.05 205 239.94 0.79 134.33 3576.66 0.02 0.74 29.33 483.95 364.86 1.48 48 9.35 423 238.72 0.01 0.01 136.39 140.87 0.02 0.15 65.16 238.72 0.01 136.41 141.02 Furniture and fixtures Owned 381.62 0.07 30.97 3.88 10.78 405.76 164.06 0.02 61.12 0.01 0.09 10.17 375.14 181.34 2.04 272.25 Office equipment Owned 321.35 0.45 60.45 2.04 9.17 375.12 180.47 0.09 65.11 1.48 8.43 Leased out 1.02 1.00 0.02 0.87 0.05 0.92 Sub total - Office equipment 322.37 0.45 60.45 28.36 Sub total - Land 1986.60 Name of the shareholder 251.52 42,65,623 223.35 (K) Options exercisable at the end of the year out of (J) supra 9,87,545 264.28 19,22,282 218.19 iv. Weighted average share price at the date of exercise for stock options exercised during the year is 1272.80 (previous year: 1106.67) per share. V. In respect of stock options granted pursuant to the Company's stock options schemes, the fair value of the options is treated as discount and accounted as employee compensation over the vesting period. 28,85,240 vi. Sr. No. Particulars (A) Weighted average risk-free interest rate (B) Weighted average expected life of options (C) Weighted average expected volatility (D) Weighted average expected dividends over the life of the option (E) Weighted average share price (F) Weighted average exercise price (G) Method used to determine expected volatility 2018-19 7.44% 4.09 years 25.73% 65.41 per option Weighted average fair values of options granted during the year is 986.95 (previous year: 965.25) per option vii. The fair value has been calculated using the Black-Scholes Option Pricing Model and the significant assumptions and inputs to estimate the fair value of options granted during the year are as follows: 1225.00 per option (J) Options granted and outstanding at the end of the year 7,03,205 112.61 (C) Options allotted pre bonus issue 5,63,707 380.14 (D) Options lapsed pre bonus issue 1,08,685 400.70 (E) Options granted and outstanding prior to bonus issue 35,98,868 339.12 (F) Adjusted options consequent to bonus issue 53,98,839 248.92 226.07 6,65,090 257.28 6,45,180 238.32 (H) Options allotted post bonus issue 13,59,929 222.40 10,75,191 229.25 (I) Options lapsed post bonus issue 6,85,544 139.58 (G) Options granted post bonus issue 257.28 per share 2017-18 6.83% i Grant Price ii Grant Dates 2018-19 5 01 April 2001 onwards 2017-18 75 2018-19 2017-18 72 72 01 October 2001 onwards 2018-19 USD 2.4 USD 2.4 15 March 2007 onwards 1 2017-18 1 2015 10 June 2016 onwards iv Options granted & outstanding at the beginning of the year 01 April 2002 onwards 01 October 2002 onwards 15 March 2008 onwards 10 June 2017 onwards 21,345 36,720 6,85,302 14,50,725 39,000 V Options granted during the year vi Options allotted/exercised during the year 47,000 28,50,140 35,96,300 3,59,400 1,29,300 9,130 3,375 iii Vesting commences on I, II & III ESOP scheme ESOP scheme 2000 4.17 years 27.92% 58.37 per option 1178.47 per option 229.73 per share Expected volatility is based on the historical volatility of the Company's share price applicable to the total expected life of each option. viii. The balance in share options (net) account as at March 31, 2019 is ₹106.91 crore (previous year: 108.59 crore), including *52.29 crore (previous year: 76.12 crore) for which the options have been vested to employees as at March 31, 2019. (i) During the year ended March 31, 2019, the Company paid the final dividend of 16 per equity share for the year ended March 31, 2018. 465 466 NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [20] (contd.) (j) On May 10, 2019 the Board of Directors has recommended the final dividend of 18.00 per equity share for the year ended March 31, 2019 subject to approval of shareholders. On approval, the total dividend payment based on number of shares outstanding as on March 31, 2019 is expected to be ₹2524.91 crore and the payment of dividend distribution tax is expected to be 484.03 crore. (k) Capital Management (I) The Group continues its policy of a conservative capital structure which has ensured that it retains the highest credit rating even amidst an adverse economic environment. Low gearing levels also equip the Group with the ability to navigate business stresses on one hand and raise growth capital on the other. This policy also provides flexibility of fund raising options for future, which is especially important in times of global economic volatility. The gross debt-equity ratio is 1.81:1 (as at 31-3-2018: 1.79:1). Stock option schemes of subsidiary companies: (i) Larsen & Toubro Infotech Limited Employee Stock Ownership Scheme ('ESOS Plan') (A) The options are vested equally over a period of 5 years subject to the discretion of the management and fulfillment of certain conditions. The options can be exercised anytime within a period of 7 years from the date of grant and would be settled by way of issue of equity shares. Management has discretion to modify the exercise period. (B) The details of the grants under the aforesaid schemes under various series are summarized below: Sr. No. Particulars ESOP Scheme 2000 IV - XXI U.S. Stock Option Sub-plan 2006 2018-19 2017-18 23,900 (B) Options granted pre bonus issue 347.41 42,47,360 17,700 29,789 4,15,042 70,767 6,22,567 2,05,321 43,42,684 1,05,342 49,313 2,02,516 3,51,935 4,51,376 6,200 39,708 4,94,210 I I 28,94,772 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [20] (contd.) Sr. Series reference No. 11 Options granted post bonus Issue 12 Options exercised post 2000 2002 (A) 1,36,876 70,767 89,325 89,325 1,08,685 6 Options granted prior to bonus 17 Options exercised prior to bonus I 8 Options outstanding as on July 14, 2017* 13,200 32,250 59,550 I 47,178 I 9 Adjusted options as on July 14, 2017* consequent to bonus issue 10 Options lapsed post bonus issue 19,800 48,375 19,800 48,375 2002 (B) 615,091 6,73,315 2003 (A) 2017-18 Nil Nil Nil Nil Nil Nil 4.95 4.72 Nil 4.15 3.74 *Record date: July 14, 2017 iii. The number and weighted average exercise price of stock options are as follows: 2018-19 (in years) 2017-18 Particulars options Weighted average No. of stock options Weighted average exercise price exercise price (₹) (₹) (A) Options granted and outstanding at the beginning of the year 42,65,623 223.35 No. of stock contractual life of options 14 Weighted average remaining 9,76,795 15,63,209 17,35,136 19,86,255 2018-19 2017-18 2018-19 2017-18 2018-19 2017-18 2003(B) 2018-19 2017-18 2018-19 2006 2006(A) 2017-18 2018-19 2017-18 25,200 2,34,441 1,56,962 71,600 6,39,890 5,73,580 2,805 11,25,488 9,15,424 bonus issue 13 Options granted and outstanding at the end of the year, of which 19,800 48,375 89,325 Options vested 19,800 48,375 89,325 70,767 Options yet to vest 70,767 1,73,309 4,87,892 10,750 1,30,806 1,62,559 3,57,086 27,11,931 35,49,464 2018-19 6,000 8,000 8,80,600 7,43,460 Weighted average remaining contractual life of options (in years) 4.51 5.41 467 468 NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [20] (contd.) (B) No options were granted to key managerial personnel during the current year as well as previous year. (C) The number and weighted average exercise price of stock options are as follows: Sr. No. Particulars 9 2018-19 No. of stock options Weighted average exercise price (*) No. of stock options Weighted average exercise price (*) i Options granted and outstanding at the beginning of the year 32,24,945 2 39,80,000 2 ii 2017-18 21,42,600 16,56,480 of (a) above unvested outstanding options Grant dates 28-07-2016 onwards 3 Vesting commences on 28-07-2017 onwards 4 Options granted and outstanding at the beginning of the year 32,24,945 39,80,000 5 Options lapsed during the year 1,64,000 1,83,300 6 Options granted during the year 2,35,000 1,93,900 7 Options exercised during the year 15,57,278 7,65,655 8 Options granted and outstanding at the end of the year-(a) 17,38,667 32,24,945 of (a) above vested outstanding options 82,187 10,82,345 Options granted during the year 2 2,35,000 1,93,900 Particulars (i) Weighted average exercise price (ii) Grant date (iii) Expiry date (iv) Weighted average share price at grant date (v) Weighted average expected price volatility of company's share Sr. No. (vi) 2017-18 2.00 23-Aug-17 22-Aug-24 737.10 per option 22.47% 42.54% Weighted average expected dividend yield over life of option (vii) Weighted average risk-free interest (viii) Method used to determine expected volatility (iii) L&T Finance Holdings Limited 5.06% 7.67% 8.05% 6.44% 2018-19 * 2.00 23-Jul-18 22-Jul-25 1281.80 per option (F) The weighted average fair value at grant date of options granted during the year ended 31-03-2019 is ₹1281.80 per option (previous year: 737.10 per option). The fair value of grant date is determined using the Black Scholes Option Pricing modelwhich takes into account the exercise price, term of option, share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option. The model inputs for options granted during the year included: (E) In respect of stock options granted pursuant to the Company's stock option schemes, the fair value of the options is treated as discount and accounted as employee compensation over the vesting period. (D) Weighted average share price at the date of exercise for stock options exercised during the year is 1435.59 per share (previous year: 849.70 per share). 2 iii Options exercised during the year 15,57,278 2 7,65,655 2 IV Options lapsed during the year 1,64,000 2 1,83,300 2 V Options granted and outstanding at the end of the year 17,38,667 2 32,24,945 2 vi Options exercisable at the end of the year out of -(a) above 82,187 2 10,82,345 2 2 Options lapsed prior to bonus 2 1 2018-19 2017-18 No. of stock Particulars options Weighted average exercise price (₹) No. of stock options Weighted average exercise price (7) i Options granted and outstanding at the beginning of No. the year 2.89 51,30,745 2.73 !! Options granted during the year 3,59,400 1.00 1,29,300 1.00 iii Options allotted during the year 15,10,821 2.09 35,95,787 Sr. 5.3 4.7 vii Options Lapsed/cancelled during the year 375 viii Options granted & outstanding at the end of the year 11,840 21,345 ix Options vested at the end of the year out of (viii) 11,840 21,345 12,000 12,021 58,190 6,85,302 58,190 92,108 - 2,12,080 1,32,000 33,000 39,000 21,16,860 28,50,140 4,47,852 33,000 39,000 1,02,360 3,12,600 X Options unvested at the end of the year out of (viii) 2,37,450 - 20,14,500 25,37,540 contractual life of options (in years) xi Weighted average remaining (C) The number and weighted average exercise price of stock options are as follows: 0.7 14,28,150 2 2.35 Options Lapsed/cancelled during the year Weighted average exercise price vii Method used to determine expected volatility 2018-19 7.49% 2017-18 6.69% 3 years 3 years 17.72% 17.88% 108.91 115.33 vi * 1650.48 1 1 The expected volatility has been calculated entirely based on historic volatility of the IT Index. (ii) L&T Technology Services Limited (A) Employee stock option plan (ESOP) (i) The objective of the ESOP Scheme, 2016 is to reward those employees who contribute significantly to the Company's profitability and shareholders' value as well as encourage improvement in performance and retention of talent. The options are vested equally over a period of 5 years subject to the discretion of the management and fulfillment of certain conditions. (ii) The exercise period for the options granted under the ESOP Scheme, 2016 would be seven years (84 months) from the date of grant of options or six years from the date of first vesting or three years (36 months) from the date of retirement/death, whichever is earlier, subject to any change as may be approved by the Board. The exercise price may be decided by the Board, in such manner, during such period, in one or more tranches and on such terms and conditions as it may deem fit, provided that the exercise price per option shall not be less than the par value of the equity share of the Company and shall not be more than the market price as defined in the SEBI (Share Based Employee Benefits) Regulations, 2014 and shall be subject to compliance with accounting policies under the said regulation. The number of shares to be allotted on exercise of options should not exceed the total number of unexercised vested options that may be exercised by the employee. Details of grants under ESOP Scheme, 2016 are summarised below: Sr. No. Series reference ESOP scheme, 2016 2018-19 2017-18 645.55 Weighted average share price V iv Weighted average expected dividends over the life of option 2,24,476 1.06 2,36,108 1.59 V Options granted and outstanding at the end of the year 22,19,890 3.50 35,95,787 2.90 vi Options vested at the end of the year out of (v) 2,05,390 28.02 8,20,797 9.03 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [20] (contd.) (D) Weighted average share price at the date of exercise for stock options exercised during the year is 1617.00 per share (previous year: 850.00 per share). (E) Weighted average fair value of options granted during the year is 1649.62 per option (previous year: 644.71 per option). (F) The fair value has been calculated using the Black-Scholes Option Pricing model and significant assumptions and inputs to estimate the fair value options granted during the year are as follows: Sr. No. Particulars i Weighted average risk-free interest rate ii Weighted average expected life of options Weighted average expected volatility iv 5 1,76,584 35,49,464 34,91,467 70,767 47,178 4,87,892 4,27,131 crore 68.99 crore crore 54.97 Considered good-unsecured 38768.94 Less: Allowance for expected credit loss 1989.56 34933.21 2065.03 36779.38 32868.18 Credit Impaired 1201.07 Considered good-secured Less: Allowance for expected credit loss 1028.90 835.07 189.80 37038.17 193.83 33116.98 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [14] Current Assets: Financial Assets - Cash and cash equivalents Particulars Balance with banks Cheques and drafts on hand Cash on hand 1011.27 crore Particulars As at 31-3-2018 4847.80 Note: During the year 468.74 crore (previous year: 161.42 crore) was recognised as expense towards write-down of inventories. NOTE [12] Current Assets: Financial Assets - Investments Particulars Equity instruments Government and trust securities Debentures and bonds Mutual funds Preference shares NOTE [13] Current Assets: Financial Assets - Trade receivables As at 31-3-2019 As at 31-3-2018 * crore 8.28 crore 176.80 962.66 1206.48 4192.93 3712.59 8781.62 4366.71 0.68 1.67 13946.17 9464.25 As at 31-3-2019 Fixed deposits with banks (maturity less than 3 months) 6413.93 As at 31-3-2019 crore 4261.34 194.89 5216.75 1198.39 *Real Estate (Regulation and Development) Act, 2016 NOTE [16] Current Assets: Financial Assets - Loans Particulars As at 31-3-2019 As at 31-3-2018 crore crore crore crore 4135.12 Security deposits 508.60 Less: Allowance for expected credit loss 0.46 479.23 0.46 508.14 478.77 Credit impaired 5.07 Less: Allowance for expected credit loss 5.07 5.89 5.89 Loans and advances to related parties Considered good - unsecured Cash and bank balances not available for immediate use 31.46 149.08 crore 3710.42 624.49 838.52 37.44 64.02 1586.22 2221.38 6509.49 6834.34 NOTE [15] Current Assets: Financial Assets - other bank balances As at 31-3-2019 Particulars As at 31-3-2018 crore Fixed deposits with banks Earmarked balances with banks-unclaimed dividend 845.70 crore 900.03 85.34 Earmarked balances with banks-Section 4(2)(1)(D) of RERA* Earmarked balances with banks-others 0.41 64.09 7.92 1.10 Margin money deposits with banks As at 31-3-2018 Considered good - unsecured 2307.47 14.12 Credit impaired 6270.60 Less: Allowance for expected credit loss 3870.68 7613.56 4899.53 2399.92 57788.88 2714.03 54459.45 NOTE [9] Non-current Assets Financial Assets- Others Particulars Cash and bank balances not available for immediate use Fixed deposits with banks (maturity more than 12 months) Forward contract receivables Embedded derivative receivables 2167.26 Other receivables Other non-current Assets Capital advances: Secured Unsecured As at 31-3-2019 As at 31-3-2018 crore crore 290.07 320.31 201.04 432.32 NOTE [10] 1851.42 2336.04 168.78 178.47 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [8] Non-current Assets: Financial Assets - Loans towards financing activities As at 31-3-2019 As at 31-3-2018 Particulars Considered good - secured crore 38843.70 crore crore 36137.14 crore Less: Allowance for expected credit loss 155.71 127.37 38687.99 36009.77 Considered good - unsecured Less: Allowance for expected credit loss 14988.60 139.05 13606.72 38.33 14849.55 13568.39 Having significant increase in credit risk 2029.89 Less: Allowance for expected credit loss 238.38 3290.20 6.15 50.57 crore Raw materials [include goods-in-transit ₹ 53.34 crore (previous year: 18.52 crore)] 722.75 529.15 Components [include goods-in-transit 31.55 crore (previous year: 23.34 crore)] 529.55 474.91 Construction materials [include goods-in-transit 114.55 crore (previous year: 67.32 crore)] 221.57 151.41 Manufacturing work-in-progress crore 651.70 Finished goods 301.74 245.25 Stock-in-trade (in respect of goods acquired for trading) [include goods-in- transit 38.79 crore (previous year: 26.31 crore)] 386.27 285.67 Stores and spares [including goods-in-transit 2.25 crore (previous year: 3.77 crore)] 295.49 209.55 Loose tools [include goods-in-transit 0.05 crore (previous year: Nil)] Property development projects (including land) 14.66 630.27 Particulars As at 31-3-2018 As at 31-3-2019 214.47 1144.05 614.32 As at 31-3-2019 As at 31-3-2018 Particulars crore crore crore crore Advance recoverable other than in cash Current Tax receivable (net) 5.38 165.72 21.48 53.83 171.10 75.31 1903.98 3490.92 2774.49 5648.62 4753.78 459 460 NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [11] Current Assets: Inventories 5.06 The expected price volatility is based on the historic volatility (based on the remaining life of the options), adjusted for any expected changes to future volatility based on publicly available information. 66.46 Others loans 1,40,13,69,456 280.27 (c) Terms/rights attached to equity shares: The Company has only one class of share capital, i.e., equity shares having face value of ₹2 per share. Each holder of equity share is entitled to one vote per share. 463 464 NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [20] (contd.) (d) Shareholder holding more than 5% of equity shares: As at 31-3-2019 As at 31-3-2018 280.55 Life Insurance Corporation of India Number of Shareholding % 17.59 shares 24,63,52,777 % 17.58 12.27 17,21,28,421 12.28 L&T Employees Welfare Foundation 17,21,28,421 (e) Shares reserved for issue under options outstanding on un-issued share capital: Number of Shareholding shares 24,66,76,682 1,40,27,29,385 Issued, subscribed and fully paid up equity shares outstanding at the end of the year 93.35 shares Equity shares of 2 each 1,62,50,00,000 325.00 1,62,50,00,000 325.00 Issued, subscribed and fully paid up: Equity shares of 2 each 1,40,27,29,385 280.55 1,40,13,69,456 280.27 (b) Reconciliation of the number of equity shares and share capital: 2018-19 Particulars Number of crore shares 2017-18 Number of shares crore Issued, subscribed and fully paid up equity shares outstanding at the beginning of the year Add: Shares issued on exercise of employee stock options during the year Add: Shares issued as bonus on July 15, 2017 1,40,13,69,456 13,59,929 280.27 0.28 93,29,65,803 186.59 16,38,898 46,67,64,755 0.33 Particulars crore Employee stock options granted and outstanding # As at 31-3-2019 Number of equity shares to be issued as fully paid ii. Sr. 2000 Series reference No. 1 Grant price-() 2018-19 2017-18 2.00 2:00 2 Grant dates 1-6-2000 3 B. Vesting commences on 2002 (A) 2018-19 2017-18 2.00 2.00 19-4-2002 19-4-2003 2002 (B) 2018-19 2017-18 2.00 2.00 19-4-2002 19-4-2003 2003 (A) 2003(B) 2018-19 2017-18 2018-19 2017-18 7.80 7.80 7.80 7.80 23-5-2003 onwards 23-5-2003 onwards 23-5-2004 onwards 23-5-2004 onwards 2006 2018-19 2017-18 267.10 267.10 1-9-2006 onwards 1-9-2007 onwards 2006(A) 2018-19 2017-18 267.10 267.10 1-7-2007 onwards 1-7-2008 onwards 4 Options granted and outstanding at the beginning of the year 19,800 13,200 48,375 32,250 89,325 59,550 1-6-2001 Options can be exercised anytime within a period of 7 years from the date of grant and would be settled by way of issue of equity shares. Management has discretion to modify the exercise period. The details of the grants under the aforesaid schemes under various series are summarized below: The grant of options to the employees under the stock option schemes is on the basis of their performance and other eligibility criteria. The options are vested equally over a period of 4 years [5 years in the case of series 2006(A)], subject to the discretion of the management and fulfillment of certain conditions. A. 28,85,240 As at 31-3-2018 crore (at face Number of equity shares value) to be issued as crore (at face value) 0.58* fully paid 42,65,623@ 0.85* 95,20,455 1.90** 95,20,455@ 1.90** * ** The equity shares will be issued at a premium of The equity shares will be issued at a premium of by the bond holders 71.99 crore (previous year: 94.42 crore) 1214.50 crore (previous year: 1214.50 crore) on the exercise of options # Note 20(h)(i) for terms of employee stock option schemes @ The number of options have been adjusted consequent to bonus issue wherever applicable (f) The aggregate number of equity shares allotted as fully paid up by way of bonus shares in immediately preceding five years ended March 31, 2019 are 46,67,64,755 (previous period of five years ended March 31, 2018: 77,50,59,331 shares) (g) The aggregate number of equity shares issued pursuant to contract, without payment being received in cash in immediately preceding last five years ended on March 31, 2019 – Nil (previous period of five years ended March 31, 2018: Nil) (h) Stock option of the parent company Terms: i. 0.675% 5 years & 1 day US$ denominated foreign currency convertible bonds (FCCB) 18.20 As at 31-3-2018 Number of 47897.02 7228.94 70.08 7962.18 7158.86 Having significant increase in credit risk Less: Allowance for expected credit loss 801.03 78.12 757.45 46.00 722.91 42530.82 711.45 32005.11 NOTE [18] Current assets: Financial Assets - Others 146.77 Particulars As at 31-3-2018 crore * crore crore Advances to related parties: Associate companies Joint venture companies Advances recoverable in cash Forward contract receivables 11.56 6.27 61.11 64.69 As at 31-3-2019 crore Less: Allowance for expected credit loss 8108.95 Considered good - unsecured Considered good - secured Considered good - unsecured 0.15 51.94 0.33 62.42 626.69 559.72 461 462 NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [17] Current Assets: Financial Assets - Loans towards financing activities As at 31-3-2019 As at 31-3-2018 Particulars Considered good - secured Less: Net fair value changes crore 34028.69 crore Less: Allowance for expected credit loss 52.19 130.77 crore 24227.43 42.73 49.90 crore 33845.73 24134.80 72.67 crore 70.96 919.66 31847.85 15172.45 28772.62 13991.12 Balance with customs, port trust, etc. 47020.30 16.88 42763.74 61.44 Advance recoverable other than in cash Government grant receivable Other loans and advances Less: Allowance for expected credit loss 5276.50 4789.58 Due from customers (construction and project related activity) Retention money including unbilled revenue 123.51 7.00 7.00 6.99 6.99 Others 250.84 52688.03 NOTE [20] Equity share capital (a) Share capital authorised, issued, subscribed and paid up: Particulars As at 31-3-2019 Number of shares Authorised: 154.46 127.80 crore crore crore 3428.27 643.92 39.75 51.26 Embedded derivative receivables Doubtful advances: Deferred credit sale of ships Other loan and advances 27.11 617.30 644.41 Less: Allowance for expected credit loss 644.41 2006.28 27.11 175.79 202.90 202.90 4194.41 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [19] Other current assets Contract Assets [Refer Note 44(d)] Particulars As at 31-3-2019 As at 31-3-2018 crore 974.20 (A) The subsidiary has formulated Employee Stock Option Schemes 2010 (ESOP Scheme-2010) and 2013 (ESOP Scheme 2013). The grant of options to the employee under the Stock Options scheme is on the basis of their performance and other eligibility criteria. The options allotted under scheme 2010 are vested over a period of 4 years in ratio of 15%, 20%, 30% and 35% respectively from the date of grant, subject to the discretion of the management and fulfillment Grant price - 15.31 Others 0.84 5.00 1432.45 1283.56 Others: Additional tax on dividend 91.62 Other provisions [Note 53(a)] 1513.77 68.54 1172.95 1605.39 3037.84 1241.49 2525.05 NOTE [32] Contingent Liabilities 13.12 14.97 Post-retirement medical benefits plan [Note 45(b)(i)] 25.55 As at 31-3-2019 As at 31-3-2018 Particulars crore crore crore crore As at 31-3-2019 Provision for employee benefits: 254.53 215.17 Compensated absences 1133.19 1024.72 Employee pension scheme [Note 45(b)(i)] 28.92 Gratuity [Note 45(b)(i)] Current Liabilities: Provisions Particulars b) Sales tax liability that may arise in respect of matters in appeal 28.79 i) Contingent Liabilities incurred in relation to interest in joint operations Share in contingent liabilities of joint operations for which the Group is contingently liable 7586.12 7267.96 84.92 139.20 j) Contingent liabilities in respect of liabilities of other joint operators in respect of joint operations 7187.07 6576.16 k) Share of contingent liabilities incurred jointly with other investors of the associate(s) 122.15 116.20 1) Share of joint ventures' contingent liabilities in respect of legal claim(s) lodged against the entity 28.93 479.55 427.31 2824.15 Excise duty / Service Tax / Custom duty / Entry Tax / Stamp duty/Municipal Cess liability that may arise, including those in respect of matters in appeal / challenged by the Group in WRIT d) Income Tax liability (including penalty) that may arise in respect of which the Group is in appeal e) Guarantees or Letter of credit or letter of comfort given to third parties f) Corporate guarantees for debt given on behalf of joint ventures g) Bank guarantees given on behalf of joint venture(s) crore 3354.54 a) Claims against the Group not acknowledged as debts 257.37 crore 3386.98 248.74 382.62 362.11 952.17 692.12 2594.98 As at 31-3-2018 NOTE [31] Notes forming part of the Consolidated Financial Statements (contd.) NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 NOTE [30] Other current liabilities Particulars Particulars Contract Liabilities [Refer Note 44(d)] Due to customers - construction contract Due to customers - property development projects Advances from customers Other payables As at 31-3-2019 As at 31-3-2018 crore crore crore 520.99 Embedded derivative payables Due to others Forward contract payables Financial guarantee contracts Unclaimed interest on debentures 3365.92 15277.47 Loans guaranteed by directors Nil (previous year: Nil) LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [28] Current liabilities: Financial liabilities - Other Trade payables crore 448.28 Acceptances Associate companies Joint venture companies Due to others NOTE [29] Particulars Current liabilities: Other financial liabilities Unclaimed dividend Due to related parties: 47.68 1092.73 23.03 1120.37 5032.18 As at 31-3-2019 crore crore As at 31-3-2018 crore crore 11021.59 4815.08 17270.56 28292.15 2874.40 24196.28 2899.36 31166.55 27095.64 473 474 8630.93 705.11 14860.24 240.08 4649.89 131.84 1140.41 41072.29 1143.40 36029.54 42733.69 37621.22 As at 31-3-2019 As at 31-3-2018 crore 4187.87 crore 63.69 14.16 1.13 0.95 380.65 171.65 145.48 84.64 11911.55 694.32 (i) 1869.01 1775.04 141007.09 119862.10 475 476 NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [35] Other income 2018-19 2017-18 * crore crore crore 968.01 607.00 Miscellaneous income 619.09 4.83 15.73 Lease rentals 194.73 111.02 Property maintenance recoveries 48.48 crore 1.75 32.76 59.44 Profit on sale of a subsidiary classified under developmental projects segment. 415.61 Profit on sale of investment property 565.60 Premium earned (net) on related forward exchange contracts Income from hire of plant and equipment Interest income [Note 46(a)]: Interest income on investment 112.13 107.10 389.71 433.46 398.74 125.11 900.58 665.67 2.09 58.09 1.66 53.78 60.18 55.44 176.73 2692.64 Changes in inventories of finished goods, stock-in-trade, work-in-progress and Sub-contracting charges Stores, spares and tools consumed Value of stock in trade transferred on sale of business Others Dividend income: Trade investments Others Current investments Net gain/(loss) on sale or fair valuation of investments Gain/(loss) on derivatives at fair value through profit or loss Net gain/(loss) on sale of property, plant and equipment Lease rentals Miscellaneous income (net of expenses) Interest income on loans and advances to related parties: Joint venture & associate companies NOTE [36] Particulars Cost of raw materials, components consumed: Raw materials and components Less: Scrap sales Excise Duty Construction materials consumed Purchase of stock-in-trade Manufacturing, construction and operating expenses Other operational income: 118087.06 139138.08 2075.57 (iii) Estimated amount of contracts remaining to be executed for Investment property 183.83 409.74 42.87 116.85 (iv) Commitments to provide funding for joint venture's capital commitments, if called 10732.85 (v) Funding committed by way of equity (including investment through purchase of investments from other parties*) to other companies *The Company has entered into a definitive share purchase agreement to acquire 20.32% stake in Mindtree Limited on March 18, 2019 at a price of 980 per share aggregating to consideration of 3269.00 crore. Further, the Company has placed a purchase order with its stock broker for acquiring 15% stake through on-market purchases for an overall consideration amount not exceeding 2434.00 crore from any recognised stock exchange, but only after receipt of relevant approvals from regulatory authorities. The Company will also make an open offer to acquire 31% stake for a consideration of 5029.85 crore in accordance with the requirements of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 2011. The completion of these transactions are subject to receipt of necessary regulatory approvals. Subsequent to March 31, 2019 and up to May 9,2019, the Company acquired 4,25,90,088 equity shares of Mindtree Limited (representing 25.94% of the share capital of that company) at a cost of 4180.91 crore through block deal purchase from major shareholder (and his associate entities) and on- market purchases. NOTE [34] Revenue from operations 2018-19 2017-18 Particulars 929.85 (ii) Estimated amount of contracts remaining to be executed for Intangible Assets 836.78 825.18 (ii) The Group expects reimbursements of 9.30 crore (previous year: 97.67 crore) in respect of the above contingent liabilities. It is not practicable to estimate the timing of cash outflows, if any, in respect of matters at (a) to (d) above pending resolution of the arbitration/appellate proceedings. Further, the liability mentioned in (a) to (d) above excludes interest and penalty in cases where the Group has determined that the possibility of such levy is remote. (iii) In respect of matters at (e), the cash flows, if any, could occur any time during the subsistence of the underlying agreement. (iv) In respect of matters at (f), the cash outflows, if any, could generally occur up to ten years, being the period over which the validity of the guarantees extends except in a few cases where the cash outflows, if any, could occur any time during the subsistence of the borrowing to which the guarantees relate. (v) In respect of matters at (g), the cash outflows, if any, could generally occur up to three years, being the period over which the validity of the guarantees extends. (vi) In respect of matters at (h) to (j), the cash outflows, if any, could generally occur upto completion of projects undertaken by the respective joint operations. (vii) In respect of matters at (k) and (I), the cash outflows, in any, could generally occur any time up to settlement of claims or during subsistence of the underlying agreements. LARSEN & TOUBRO crore Notes forming part of the Consolidated Financial Statements (contd.) Commitments As at 31-3-2019 As at 31-3-2018 Particulars crore crore (i) Estimated amount of contracts remaining to be executed for capital account of Property, plant & equipment (net of advances) NOTE [33] crore crore crore 166.49 28.60 Servicing fees 974.85 737.52 Commission 198.45 Fare collection and related activity 206.98 1.27 0.79 Investment/portfolio management and trusteeship fees Fees for operation and maintenance of power plant 618.64 615.56 2821.67 2628.68 Charter hire income Notes: 686.81 Property development activity Sales & service: Construction and project related activity 96472.60 83595.78 Manufacturing and trading activity 8116.18 7838.44 2255.75 Engineering service fees 3849.87 Software development products and services 9330.75 7445.55 Income from financing activity/annuity based projects 13009.42 10452.48 5172.01 8938.52 22210.54 13272.02 0.08 Capital reserve on consolidation Capital redemption reserve* Securities premium [Note 1(u)] Employee share options (net) [Note 1(w)] Employee share options outstanding Deferred employee compensation expense As at 31-3-2019 As at 31-3-2018 crore crore crore 153.20 crore 153.20 3.56 10.52 271.92 Capital reserve Capital Reserve [Note 1(g)] Equity component of foreign currency convertible bonds Share application money pending allotment Particulars 145.59 per option 161.05 per option 116.58 per option 7.42% 3.24 years 32.78% 6.58% 3.27 years 32.57% 3.31 per option 10.52 271.92 g) Expected volatility is based on the historical volatility of the Company's shares price applicable to the expected life of each option. 469 470 NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [21] Other Equity Method used to determine expected volatility 168.93 per option 282.44 42.00 Foreign currency translation reserve [Note 1(x)(iv)] 3851.68 48200.53 540.73 3352.91 41077.32 572.67 Hedging reserve [Note 1(r)(iii)(B)] & [Note 57(n)] Cash flow hedging reserve Cost of hedging reserve Debt instruments through other comprehensive income [Note 1(r)(i)(B)] 239.11 5.89 449.22 (11.45) 245.00 (30.37) 437.77 24.78 62094.25 54623.23 * O Capital redemption reserve has been created on redemption of preference shares (by a subsidiary) out of profits in accordance with Section 55(2)(c) of the Companies Act, 2013. Retained earnings 514.98 587.31 92.57 42.00 8471.99 8363.02 525.76 (188.71) 536.49 (222.93) 337.05 282.44 313.56 Debenture redemption reserve ^ 1423.04 1345.81 Reserve u/s 45 IC of the Reserve Bank India Act, 1934 Reserve u/s 29C of National Housing Bank Act, 1987 Reserve under section 36(1)(viii) of Income tax Act, 1961 1694.87 1399.55 146.46 Statutory reserves 3.65 per option Weighted average exercise price f) 28,18,795 3,00,90,000 2,37,93,000 3 Options granted during the year 15,10,000 33,30,000 1,64,90,000 1,37,20,000 4 Options cancelled/lapsed during the year 3,77,125 2,52,862 21,95,800 38,42,500 42,04,925 Options granted and outstanding at the beginning of the year 2 date of grant LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [20] (contd.) of certain conditions. The options granted under scheme 2013 are vested in a graded manner over a period of four year with 0%, 33%, 33% and 34% of grants vesting each year, commencing from the end of 24 months from the date of grant. Options allotted under scheme 2010 can be exercised anytime within a period of 7 years from the date of grant and would be settled by way of equity. The options granted under scheme 2013 can be exercised anytime within a period of 8 years from the date of grant. Management has discretion to modify the exercise period. (B) The details of the grants are summarised below: Sr. Series reference 5 Options exercised and shares allotted during the year No. Grant Price () Scheme 2010 2018-19 2017-18 44.20 Scheme 2013 2018-19 Market Price as on the preceding 2017-18 1 3,85,800 16,91,008 27,49,600 5.92 6.15 (C) Average fair values of options granted during the year is 58.54 (previous year: 63.25) per option. (D) The fair value has been calculated using the Black-Scholes Option Pricing Model and the significant assumptions and inputs to estimate the fair value of options granted during the year are as follows: Sr. No. Particulars 2018-19 2017-18 6.01 a) b) Weighted average expected life of options c) Weighted average expected volatility d) Weighted average expected dividends Weighted average share price Weighted average risk-free interest rate ^ Debenture redemption reserve (DRR): The Group has issued redeemable non-convertible debentures and created DRR in terms of the Companies (Share capital and Debenture) Rules, 2014 (as amended). A company is required to maintain a DRR of 25% of the value of debentures issued, either by a public issue or on a private placement basis (excluding private placement by non-banking finance companies). The amounts credited to the DRR is not to be utilised except to redeem debentures. 5.63 7 35,80,500 6 Options granted and outstanding at the end of the year of which : 49,52,000 42,04,925 4,16,34,600 3,00,90,000 Weighted average remaining contractual life of options (in years) Options vested 1,71,425 Options yet to vest 44,48,000 40,33,500 44,32,000 3,72,02,600 14,30,000 2,86,60,000 5,04,000 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [22] As at 31-3-2018 crore crore 0.55 67.97 0.55 67.97 Secured As at 31-3-2019 Unsecured Total As at 31-3-2018 Secured Unsecured Total crore 3974.04 2546.51 crore 1611.78 4063.24 5.99 17022.28 As at 31-3-2019 Commercial paper Short term loans from others Short term loans from banks 7.73 0.93 556.84 523.54 471 472 NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 6520.55 Notes forming part of the Consolidated Financial Statements (contd.) Other non-current liabilities Other payables Particulars NOTE [26] Current liabilities: Financial liabilities - Borrowings Particulars Loans repayable on demand NOTE [25] crore 5585.82 6609.75 5.99 17022.28 22703.29 29223.84 crore 1511.47 96.88 crore 57.66 4005.91 463.73 13196.20 crore 6777.81 0.94 crore 1740.55 crore 8518.36 Preference shares 0.675% Foreign currency convertible bonds Term loans from banks 4160.98 Redeemable non-convertible floating rate debentures 184.19 184.19 1363.39 1363.39 4317.32 8478.30 0.94 249.55 5132.80 Finance lease obligation [Note 48(b)(i)(B)] Sales tax deferment loan 1375.68 0.06 0.08 6508.48 0.06 249.55 12.44 crore 12184.66 9111.04 crore 1569.13 4102.79 463.73 13196.20 1608.35 17723.50 19331.85 NOTE [27] crore 3073.62 Current liabilities: Financial liabilities - Current maturities of long term borrowings As at 31-3-2019 Secured Unsecured As at 31-3-2018 Total Secured Unsecured Total crore Redeemable non-convertible fixed rate debentures Particulars 176.73 14.09 226.66 Employee pension scheme [Note 45(b)(i)] Post-retirement medical benefit plan [Note 45(b)(i)] Provision for other employee benefits Other provisions [Note 53(a)] As at 31-3-2019 Secured Unsecured Total As at 31-3-2018 Secured Unsecured Total crore 28587.12 crore 7865.92 crore 36453.04 * crore 25187.11 50.00 Particulars Non-current liabilities: Provisions NOTE [24] Due to others Non-current liabilities: Financial liabilities - Borrowings Particulars Redeemable non-convertible fixed rate debentures Redeemable non-convertible floating rate debentures Redeemable non-convertible inflation indexed debentures Preference share 0.675% Foreign currency convertible bonds crore 8876.75 Term loans from banks Loans guaranteed by directors Nil (previous year: * Nil) NOTE [23] Non-current liabilities: Other financial liabilities Particulars Forward contract payables Embedded derivative payables Financial guarantee contracts Finance lease obligation [Note 48(b)(i)(B)] crore 34063.86 50.00 crore 12.80 19.97 139.78 79.39 0.65 201.60 0.52 crore 254.07 353.95 As at 31-3-2019 As at 31-3-2018 crore crore 308.36 301.13 354.83 209.04 As at 31-3-2018 72914.76 120.48 976.29 120.48 976.29 116.96 116.96 905.26 905.26 1245.64 1245.64 As at 31-3-2019 28711.08 23855.61 12677.23 0.20 36532.84 0.20 57298.20 16822.59 74120.79 49092.72 23822.04 7859.84 36570.92 0.06 0.06 2692.64 Particulars (2217.72) Employee medical & other insurance premium expenses 205.69 179.16 Staff welfare expenses Recoveries on account of deputation charges 1100.79 1011.83 (340.78) (281.56) 18100.58 15270.79 NOTE [38] Sales, administration and other expenses 2018-19 111.39 2017-18 crore crore crore * crore Power and fuel Packing and forwarding Insurance Rent Rates and taxes Travelling and conveyance Repairs to buildings General repairs and maintenance Professional fees Directors' fees Particulars 157.97 Expenses on employee stock option scheme 583.59 10540.63 Finance cost of financial services business and finance lease activity: [Note 46(a)] Interest and other financing charges 7385.63 99281.09 6019.74 83317.84 477 478 NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [37] Employee benefits expense 2018-19 2017-18 Particulars crore crore * crore 678.02 140.83 152.65 Gratuity funds [Note 45(b)(ii)] 188.49 222.34 Telephone, postage and telegrams Superannuation/employee pension and social security schemes 303.03 Provident fund and pension fund Contribution to and provision for: crore 13666.38 16298.89 Salaries, wages and bonus 254.27 Advertising and publicity Stationery and printing Commission: 507.03 163.22 155.37 904.01 738.30 1847.36 1205.38 1665.79 709.36 Receivable discounting charges -non recourse Allowances for expected credit loss Loss on fair valuation of loans towards financing activities (net) Recoveries from Joint venture and associates Exchange (gain)/loss [net] 181.57 39.87 496.02 36.25 65.33 7637.18 7302.27 105.61 (244.64) 64.63 7.12 (245.82) (46.22) Other provisions 30.73 77.62 2521.33 1856.57 (48.41) 13695.42 499.91 63.88 Distributors and agents Others Bank charges Miscellaneous expenses Bad debts and advances written off Less: Allowances for expected credit loss written back 121.80 118.13 155.32 157.36 94.62 76.47 544.53 536.19 213.66 151.38 763.64 73.96 168.36 196.52 206.18 214.06 6.28 389.77 10.10 7.90 943.00 446.05 496.71 31.77 39.07 688.91 730.79 2998.51 399.87 Miscellaneous expenses 285.67 Work-in-progress 5828.16 4540.13 Cost of built up space and property development land: Work-in-progress 3174.88 2307.47 Completed property 115.32 110.70 9806.37 7489.22 Carried forward 386.27 9806.37 7489.22 68072.70 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [36] Manufacturing, construction and operating expenses (contd.) Brought forward Less: Opening stock: Particulars 2018-19 2017-18 crore crore 9806.37 79067.71 Stock-in-trade 245.25 301.74 (21.81) 2839.71 25.77 5.07 639.68 1851.53 (125.74) 67.14 5.46 199.04 1341.93 2018-19 2017-18 crore crore crore crore 17150.93 148.42 Finished goods Closing stock: property development: 24639.02 2378.50 1574.64 79067.71 26346.70 1800.15 1604.19 29.55 1800.15 15245.37 178.94 24056.23 31059.78 15360.64 115.27 2858.57 crore 7489.22 17002.51 68072.70 414.55 627.93 Rates and taxes 529.66 569.27 Rent Travelling and conveyance 252.41 Insurance 1423.68 2091.47 Engineering, professional, technical and consultancy fees 203.15 208.40 286.21 Bank guarantee charges 1128.17 Repairs to plant and equipment 148.06 14.67 crore Other provisions (2.28) 183.51 875.89 Provision/(reversal) for foreseeable losses on construction contracts 481.28 General repairs and maintenance 8.27 24.58 Repairs to buildings 83.03 415.87 1663.04 90.37 Hire charges-plant and equipment and others 138.29 Completed property 1259.39 3744.40 Work-in-progress 245.25 8938.70 Cost of built up space and property development land: 188.59 340.82 4525.09 Work-in-progress 285.67 Finished goods 4385.19 Stock-in-trade 2365.90 (867.67) 411.41 488.94 Packing and forwarding 16.00 42.94 6173.99 (48.72) 1281.49 Royalty and technical know-how fees Power and fuel Excise duty on stocks Other manufacturing, construction and operating expenses: (1315.23) 2118.68 82046.61 670.01 5025.87 Total (b) Out of the total revenue recognised under Ind AS 115 during the year, 109086.70 crore was recognised over a period of time and 18031.16 crore was recognised at a point in time. 5695.88 127117.86 141007.09 13889.23 443.95 45071.25 Provision / (reversal) of allowance for expected credit loss Movement in Expected Credit Loss during the year: Particulars Opening balance as at April 1, 2018 Ind AS 115 transition impact Changes in allowance for expected credit loss: Additional provision (net) Write off as bad debts | Closing balance as at March 31, 2019 crore Provision on Trade receivables Provision on Contract (c) 4581.92 13153.45 5068.04 5786.81 19.06 Hydrocarbon 7174.51 covered under Ind AS 115 2900.10 5767.75 1533.30 7945.69 15120.20 11.38 15131.58 Others IT & Technology Services 14371.36 14371.36 Financial Services 1135.97 1135.97 11501.72 12637.69 Developmental Projects 3521.39 3521.39 1546.65 1217.91 assets i. 780.87 (e) Cost to obtain the contract : Amount of amortisation recognised in Statement of Profit and Loss during the year 2018-19: 5.32 crore. ii. (f) Amount recognised as contract assets as at March 31, 2019: Reconciliation of contracted price with revenue during the year - 30.26 crore. Opening contracted price of orders as at April 1, 2018* Add: Fresh orders /change orders received (net) Increase due to additional consideration recognised as per contractual terms Increase due to exchange rate movements (net) (ii) Revenue recognised during the year from opening balance of contract liabilities amounts to * 9724.78 crore. (iii) Revenue recognised during the year from the performance obligation satisfied upto previous year (arising out of contract modifications) amounts to 221.00 crore. Less: Closing contracted price of orders as at March 31, 2019* Total Revenue recognised during the year Less: Revenue out of orders completed during the year Revenue out of orders under execution at the end of the year (I) Revenue recognised upto previous year (from orders pending completion at the end of the year) (II) Decrease due to exchange rate movements (net) (III) 4234.45 Balance revenue to be recognised in future viz. Order book (IV) | Closing contracted price of orders as at March 31, 2019* (I+II+III+IV) including full value of partially executed contracts crore 560785.57 Orders completed during the year 121.85 Note: Increase in net contract balances is primarily due to higher revenue recognition as compared to progress bills raised during the year and Ind AS 115 transition adjustment. 4095.87 84.34 265.62 (249.23) (195.46) 155.14 (2.75) 3000.83 859.65 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [44] (contd.) (d) Contract balances: 160.69 (i) Particulars Opening balance as on April 01, 2018 Closing balance as on March 31, 2019 Net Increase crore Contract Assets 42763.74 Contract Liabilities 24196.28 47020.30 28292.15 Net contract balances 18567.46 18728.15 4256.56 Movement in contract balances during the year - Electrical & Automation Principal place 3751.96 100.00 100.00 48 L&T Electricals and Automation Limited India 100.00 100.00 100.00 100.00 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [40] (contd.) As at 31-3-2019 As at 31-3-2018 Sr. of business Name of subsidiaries No. Proportion of effective ownership Interest (%) Proportion of voting power held (%) Proportion of effective ownership Interest (%) Proportion of voting power held (%) Indian Subsidiaries India Seawoods Realty Private Limited 47 100.00 LTR SSM Private Limited ^ India 43 156242.07 100.00 100.00 44 L&T Seawoods Limited India 100.00 100.00 49 100.00 45 L&T Vision Ventures Limited India 68.00 68.00 68.00 68.00 46 Seawoods Retail Private Limited * India 100.00 100.00 L&T Construction Equipment Limited India 100.00 99.90 54 Total as per Statement of Profit & Loss / Segment report Infrastructure 53212.17 19095.51 72307.68 110.37 72418.05 Power 2583.78 99.90 1383.77 3.95 3971.50 Heavy Engineering 964.08 1184.05 2148.13 26.09 2174.22 Defence Engineering 3420.43 331.53 3967.55 3751.96 99.90 India 100.00 100.00 100.00 50 L&T Construction Machinery Limited ** India 100.00 100.00 51 L&T Valves Limited India 99.90 100.00 100.00 100.00 52 L&T Shipbuilding Limited*** India 97.00 97.00 97.00 97.00 53 Bhilai Power Supply Company Limited 100.00 5944.08 2798.27 100.00 640145.61 100.00 49.00 100.00 49.00 Qatar Larsen & Toubro Qatar LLC # 23 65.00 65.00 65.00 65.00 Oman Sultanate of Larsen & Toubro (Oman) LLC 1 Proportion of voting power held (%) As at 31-3-2018 Proportion of effective ownership Interest (%) Proportion of voting power held (%) As at 31-3-2019 Proportion of effective ownership Interest (%) of business Foreign Subsidiaries No. Name of subsidiaries Larsen & Toubro Saudi Arabia LLC Kingdom of Saudi Arabia 100.00 Impact for the year: There is a decrease in sales, administration and other expenses due to reversal of provision for expected credit loss on contract asset resulting in profit after tax being higher by 131.90 crore (net of tax) with corresponding increase in contract assets by 204.12 crore and reduction in deferred tax asset 72.22 crore. Further, there is an increase in Profit after tax due to recognition of contract cost (net) by 22.90 crore (net of tax) with a corresponding increase in contract assets by ₹ 34.85 crore, increase in inventory by 0.65 crore, decrease in deferred tax asset by 7.82 crore and increase in contract liability by 4.78 crore. Under Ind AS 115, revenue from realty business is recognised upon delivery of units as against percentage of completion method followed under Ind AS 11. Impact during transition: Opening total equity as on April 1, 2018 reduced by 688.21 crore (net of tax) with a corresponding increase in contract liability by ₹2757.11 crore, decrease in contract asset by 3.51 crore, increase Kingdom of Larsen & Toubro Hydrocarbon International Limited LLC # 6 100.00 70.00 100.00 70.00 Oman Sr. Sultanate of 5 72.50 72.50 72.50 72.50 South Africa Larsen & Toubro T&D SA (Proprietary) Limited 4 45 100.00 100.00 Larsen & Toubro Heavy Engineering LLC Impact during transition: Opening total equity as on April 1, 2018 reduced by 552.17 crore (net of tax) due to initial recognition of expected credit loss on contract assets with a corresponding increase in deferred tax asset by 260.19 crore and reduction in contract assets by 812.36 crore. Principal place The name of the company has been struck off the register of companies on June 26, 2018 The company has been incorporated on December 18, 2018 L&T Capital Company Limited 57 100.00 100.00 100.00 100.00 India L&T Aviation Services Private Limited 56 95.00 95.00 95.00 95.00 India Kesun Iron and Steel Company Private Limited 55 99.99 99.99 99.99 L&T Power Limited 99.99 India 100.00 India 100.00 100.00 100.00 The company y has been incorporated on September 24, 2018 *** ** * Λ @@ The Group has sold its stake on June 28, 2018 The company has been dissolved on August 8, 2018 @ The Group has acquired stake on February 1, 2019 % The Group has acquired stake on October 15, 2018 Classified as wholly owned subsidiary w.e.f. April 10, 2019 due to purchase of additional stake ## # $$ $ 100.00 100.00 100.00 100.00 India L&T Infra Contractors Private Limited 58 100.00 The arrangement entered on September 14, 2018 assessed as subsidiary since the group exercises unilateral control The arrangement entered on January 4, 2019 assessed as subsidiary since the group exercises unilateral control The company is in process of being struck off from register of companies B. A. Pursuant to adoption of Ind AS 115, the Group recognised impairment loss on contract assets using expected credit loss applied to trade receivables. 63.40 NOTE [44] (contd.) (h) Disclosure of amount by which Consolidated financial statements are impacted by application of Ind AS 115 as compared to Ind AS 11 and Ind AS 18 - (i) Impact on Balance Sheet: Particulars Assets Liabilities Total Equity (ii) Impact on Statement of Profit & Loss: Impact of application As per Ind AS 11/ Ind AS 18 as at 31.03.2019 278489.21 of Ind AS 115 Increase/(decrease) Transition impact as at April 1, 2018 For the year 2018-19 208509.40 1516.73 2757.11 (871.87) (1333.35) 69979.81 Notes forming part of the Consolidated Financial Statements (contd.) NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 488 487 127117.86 27545.22 99572.64 242938.20 (68.63) 297703.40 640145.61 (g) Remaining performance obligations: The aggregate amount of transaction price allocated to remaining performance obligations and expected conversion of the same into revenue is as follows - crore Particulars Transaction price allocated to the remaining performance obligation (1240.38) 297703.40 Total Upto 1 Year From 1 to 2 years Expected conversion in revenue From From 2 to 3 years 3 to 4 years From 4 to 5 years Beyond 5 years 108730.85 44795.85 16996.20 5926.62 4449.42 116804.46 461.48 crore After application of Ind AS 115 as 753.88 14580.92 Tax Expenses 4050.94 292.40 4343.34 Profit after tax 9776.10 461.48 10237.58 Non-controlling interest (NCI) in (income)/losses 13827.04 (1306.65) (1311.45) Net Profit after tax, non-controlling interest and share in profit of joint ventures/associates 8448.45 456.68 8905.13 Basic earnings per share Diluted earnings per share 60.26 60.15 3.25 3.25 63.51 (4.80) 85624.38 Profit before tax (204.12) at 31.03.2019 279134.07 209933.16 69200.91 crore Particulars Revenue from operations Manufacturing, construction and operating expenses Employee benefits expense Sales, administration and other expenses As per Ind AS 11/ Ind AS 18 139725.20 98518.70 7302.27 For the year 2018-19 After application of Ind AS 115 Increase/(decrease) 1281.89 141007.09 762.39 99281.09 18130.84 (30.26) 18100.58 7506.39 Impact of application of Ind AS 115 100.00 94.62 100.00 Larsen & Toubro Infotech Limited India 74.80 74.80 82.96 82.96 9 L&T Technology Services Limited India 78.88 78.88 88.64 88.64 10 L&T Thales Technology Services Private Limited India 58.37 58.37 65.60 65.60 11 Syncordis Software Services India Private Limited India 8 100.00 100.00 100.00 100.00 4 L&T Geo – L&T UJV CMRL CS $$ India 100.00 100.00 5 L&T Infrastructure Engineering Limited India 100.00 100.00 74.80 100.00 6 L&T Cassidian Limited # India 100.00 100.00 100.00 100.00 7 L&T Hydrocarbon Engineering Limited India 100.00 100.00 100.00 74.80 82.96 64.01 17 L&T Finance Holdings Limited India 63.91 63.91 64.01 64.01 18 L&T Housing Finance Limited India 63.91 63.91 64.01 64.01 19 L&T Infra Debt Fund Limited India 63.91 63.91 64.01 64.01 20 64.01 63.91 63.91 India 12 Graphene Semiconductor Services Private Limited ## India 78.88 78.88 13 Seastar Labs Private Limited ## India 78.88 78.88 14 82.96 Ruletronics Systems Private Limited % 74.80 74.80 15 Esencia Technologies India Private Limited India 78.88 78.88 88.64 88.64 16 L&T Capital Markets Limited India India L&T Geo- L&T JV for Maharatangarh project $ 3 7 Repairs to plant and equipment 90.37 90.37 83.03 83.03 8 Repairs to buildings 24.58 39.07 63.65 8.27 31.77 40.04 9 General repairs and maintenance 481.28 496.71 977.99 415.87 446.05 1564.80 688.91 875.89 1891.81 586.52 252.41 179.16 76.47 508.04 4 Rent 569.27 544.53 1113.80 529.66 536.19 861.92 1065.85 Rates and taxes 627.93 213.66 841.59 414.55 151.38 565.93 6 Travelling and conveyance 1128.17 763.64 5 10 Engineering, professional, technical and consultancy fees 2091.47 No. Notes forming part of the Consolidated Financial Statements (contd.) NOTE [40] The List of subsidiaries, associates, joint ventures and joint operations included in the Consolidated Financial Statements are as under : As at 31-3-2018 Proportion of effective ownership Interest (%) Proportion of voting power held (%) As at 31-3-2019 Proportion of effective ownership Interest (%) Proportion of voting power held (%) Indian Subsidiaries 1 Name of subsidiaries Hi-Tech Rock Products and Aggregates Limited 100.00 100.00 100.00 100.00 2 L&T Geostructure LLP India 100.00 100.00 74.00 74.00 India L&T Infra Investment Partners Advisory Private Limited Principal place of business NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 943.00 3034.47 1423.68 730.79 2154.47 11 Interest and other financing charges 7385.63 1806.04 9191.67 Sr. 6019.74 7558.26 12 Miscellaneous expenses 2839.71 904.01 3743.72 2998.51 738.30 3736.81 479 480 1538.52 India 63.91 63.91 100.00 31 Sahibganj Ganges Bridge-Company Private Limited # India 100.00 100.00 100.00 100.00 32 Marine Infrastructure Developer Private Limited @@ India 97.00 97.00 33 L&T Arunachal Hydropower Limited India 100.00 100.00 100.00 100.00 34 L&T Himachal Hydropower Limited India 100.00 100.00 100.00 India 1806.04 14.37 37.11 13.07 12.79 1511.08 1756.14 crore crore 2017-18 2018-19 100.00 Exchange loss (attributable to finance costs) Particulars Interest expenses Finance costs NOTE [39] Notes forming part of the Consolidated Financial Statements (contd.) crore 35.16 205.69 35.16 30 L&T Metro Rail (Hyderabad) Limited Other borrowing costs 100.00 100.00 100.00 39 L&T Asian Realty Project LLP India 100.00 100.00 100.00 100.00 40 L&T Parel Project LLP India 100.00 100.00 100.00 100.00 41 L&T Realty Limited India 100.00 100.00 100.00 100.00 42 L&T Westend Project LLP India 100.00 1538.52 100.00 100.00 35 L&T Power Development Limited India 100.00 100.00 100.00 100.00 36 L&T Uttaranchal Hydropower Limited India 100.00 100.00 100.00 100.00 37 Nabha Power Limited India 100.00 100.00 100.00 100.00 38 Chennai Vision Developers Private Limited India 100.00 100.00 39(a) Aggregation of expenses disclosed vide [Note 36 - Manufacturing, construction and operating expenses], [Note 37 - Employee benefits expense], [Note 38 - Sales, administration and other expenses] and [Note 39 - Finance costs] Sr. 64.01 64.01 25 L&T Trustee Company Private Limited @ India 100.00 100.00 26 L&T Financial Consultants Limited India 63.91 63.91 64.01 64.01 27 Mudit Cement Private Limited India 63.91 63.91 64.01 64.01 28 L&T Finance Limited 63.91 63.91 India L&T Mutual Fund Trustee Limited 64.01 64.01 21 L&T Infra Investment Partners Trustee Private Limited India 63.91 63.91 64.01 64.01 22 L&T Infrastructure Finance Company Limited India India 63.91 64.01 64.01 23 L&T Investment Management Limited India 63.91 63.91 64.01 64.01 24 63.91 63.91 63.91 64.01 expenses and other expense and operating and other expense and operating benefits administration Total Note 39: Finance costs Note 38: Sales, expenses Note 37: Employee benefits administration construction Total Note 39: Finance costs 2017-18 2018-19 Note 38: Sales, Note 37: Employee Manufacturing, Nature of expenses Note 36: No. Note 36: Manufacturing, construction crore expenses 1 64.01 29 L&T Infra Investment Partners India 35.11 35.11 286.21 Insurance 3 568.77 157.36 expenses 411.41 155.32 488.94 Packing and forwarding 2 1399.62 118.13 1281.49 2240.48 121.80 2118.68 Power and fuel 644.26 Total India Domestic UK 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 88.64 88.64 82.96 82.96 82.96 82.96 82.96 99.19 200000 88 100.00 100.00 100.00 Malaysia 100.00 100.00 100.00 100.00 The Group has acquired stake on October 15, 2018 @ The Group has acquired stake on February 1, 2019 ** The company has been incorporated on November 20, 2018 * 63.91 63.91 UAE 100.00 100.00 Λ The company has been incorporated on September 9, 2018 100.00 UAE 100.00 100.00 100.00 100.00 UAE 100.00 30.00 100.00 30.00 Malaysia 100.00 @@ The company has been incorporated on July 1, 2018 The company is in process of liquidation. L&T Global Holdings Limited Saudi Arabia Kingdom of L&T Electricals & Automation Saudi Arabia Company Limited LLC 47 100.00 100.00 100.00 UAE L&T Electrical & Automation FZE 46 49.00 100.00 49.00 W.L.L. Kana Controls General Trading & Contracting Company Kuwait 100.00 100.00 100.00 Malaysia 100.00 100.00 100.00 UAE 100.00 100.00 100.00 48 Larsen & Toubro International FZE Larsen & Toubro (East Asia) Sdn.Bhd. Thalest Limited Tamco Switchgear (Malaysia) SDN BHD # 56 54 51 100.00 100.00 100.00 L&T Capital Markets (Middle East) Ltd @@ Australia 50 100.00 100.00 100.00 UK Servowatch Systems Limited 100.00 100.00 100.00 Indonesia PT Tamco Indonesia Tamco Electrical Industries Australia Pty Limited LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [40] (contd.) India L&T-MHPS Boilers Private Limited 1 Joint Ventures Proportion of effective ownership interest (%) Proportion of effective ownership interest (%) Principal place of business Sr. No. Name of joint ventures As at 31-3-2018 As at 31-3-2019 * The company has been re-classified as associate w.e.f. August 14, 2018 on amendment to Articles of Association @ The company is under liquidation 39.28 39.28 39.28 39.28 India Magtorq Engineering Solutions Private Limited 8 97.45 97.45 India LTIDPL INDVIT Services Limited* 51.00 51.00 2 L&T-MHPS Turbine Generators Private Limited 7 51.00 51.00 India L&T MBDA Missile Systems Limited 6 74.00 74.00 India L&T Special Steels and Heavy Forgings Private Limited 5 7 50.00 India L&T-Sargent & Lundy Limited 4 50.10 50.10 India L&T Howden Private Limited 3 51.00 51.00 India 50.00 42.85 42.85 42.85 50.00 India LARSEN & TOUBRO Gujarat Leather Industries Limited@ 2 50.00 50.00 50.00 50.00 India L&T-Chiyoda Limited 50.00 1 Proportion of voting power As at 31-3-2018 Proportion of effective ownership Interest (%) Interest (%) Proportion of voting power held (%) Proportion of effective ownership No. Name of associates Principal place of business Sr. As at 31-3-2019 held (%) 88.64 50.00 3 42.85 India Magtorq Private Limited 6 21.74 21.74 21.74 21.74 India International Seaport (Haldia) Private Limited 5 50.00 49.00 49.00 49.00 UAE L&T Camp Facilities LLC 4 50.00 50.00 50.00 50.00 Qatar Larsen & Toubro Qatar & HBK Contracting Co. WLL 49.00 L&T Sapura Offshore Private Limited 78.88 USA 100.00 UAE L&T Hydrocarbon International FZE ^ 14 Foreign Subsidiaries Proportion of voting power held (%) As at 31-3-2018 Proportion of effective ownership Interest (%) Proportion of voting power held (%) Proportion of effective ownership Interest (%) No. Name of subsidiaries of business Principal place Sr. As at 31-3-2019 NOTE [40] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 482 481 100.00 70.00 100.00 100.00 15 L&T Information Technology Services (Shanghai) Co., Ltd. China 82.96 74.80 74.80 USA Larsen & Toubro Infotech LLC 18 82.96 82.96 74.80 74.80 Canada 70.00 Larsen & Toubro Infotech Canada Limited 82.96 82.96 74.80 74.80 Canada L&T Infotech Financial Services Technologies Inc. 16 82.96 82.96 74.80 74.80 17 82.96 Oman Larsen & Toubro Electromech LLC 75.00 Saudi Arabia Kingdom of Larsen Toubro Arabia LLC 9 100.00 100.00 100.00 100.00 Nigeria L&T Overseas Projects Nigeria Limited 8 100.00 70.00 100.00 70.00 Oman Sultanate of L&T Modular Fabrication Yard LLC 7 100.00 100.00 100.00 100.00 75.00 100.00 10 13 95.00 95.00 95.00 95.00 Indonesia Indonesia PT Larsen & Toubro Hydrocarbon Engineering 12 100.00 49.00 Sultanate of 100.00 Contracting Company WLL Kuwait Larsen & Toubro Kuwait Construction General 11 100.00 100.00 100.00 100.00 Saudi Arabia Kingdom of L&T Hydrocarbon Saudi Company (formerly known as Larsen & Toubro ATCO Saudi LLC) 49.00 19 Larsen & Toubro Infotech South Africa (Proprietary) Limited South Africa 74.80 74.80 Thailand * 74.80 74.80 Luxembourg 74.80 74.80 Singapore 74.80 74.80 Switzerland 74.80 74.80 Germany 82.96 74.80 74.80 Luxembourg 82.96 74.80 74.80 Australia 74.80 74.80 UK 78.88 78.88 Taiwan 78.88 78.88 Malaysia 78.88 78.88 Singapore Henikwon Corporation SDN. BHD. L&T Realty FZE UK Esencia Technologies Inc. Graphene Solutions SDN.BHD @ Graphene Solutions PTE Ltd. @ 88.64 78.88 78.88 USA 74.80 74.80 USA 74.80 74.80 Graphene Solutions Taiwan Limited @ 82.96 74.80 74.80 Larsen & Toubro Infotech Norge AS * 82.96 82.96 74.80 74.80 Spain L&T Information Technology Spain, S.L. 82.96 82.96 74.80 74.80 Norway Austria 82.96 82.96 74.80 74.80 Germany Larsen & Toubro Infotech GmbH 2222222222~~~333333322344 42 275523255 62.14 62.14 56.02 56.02 Larsen & Toubro Infotech Austria GmbH 78.88 74.80 38 France 82.96 74.80 74.80 Luxembourg 82.96 74.80 74.80 Mexico 99.19 98.80 74.80 98.80 36 Ruletronics Limited** Ruletronics Systems Inc** L&T Technology Services LLC Nielsen+Partner S.A ** Nielsen&Partner Company Limited** Nielsen&Partner Pty Ltd** Nielsen+Partner Pte Ltd** Nielsen+Partner Unternehmensberater AG** Nielsen+Partner Unternehmensberater GmbH** Syncordis Support Services S.A. 30 27 Syncordis SARL Syncordis Limited L&T Infotech S. DE R.L. DE C.V. Syncordis S.A. Larsen & Toubro LLC 39 USA India 60.00 60.00 50.00 India Larsen & Toubro Ltd - Passavant Energy & Environment JV 27 50.00 50.00 UAE Besix Larsen & Toubro Joint Venture 26 55.00 55.00 India Larsen & Toubro Limited & NCC Limited Joint Venture 25 75.00 75.00 Qatar L&T-AL-Sraiya LRDP 6 Joint Venture 24 100.00 100.00 UAE L&T-Delma Mafraq Joint Venture 50.00 28 LNT-Shriram EPC Tanzania UJV Tanzania PESB and Larsen & Toubro Joint Venture L&T-BRAPL JV (package III) Principal place of business Mallanna Sagar Reservoir LnT-Prasad-RK Infra JV L&T-KBL (UJV) Hyderabad L&T Sojitz Consortium Sr. No. Name of joint operation (with specific proportion of activity carried out through the arrangement) 50.00 50.00 Kindgom of Saudi Arabia EMAS Saudi Arabia Ltd 23 31 50.00 India Bauer- L&T Geo Joint Venture 30 56.67 56.67 India LTH Milcom Private Limited 29 90.00 90.00 37.00 1 100.00 India 100.00 100.00 India L&T-IHI Consortium 18 100.00 100.00 India L&T-ISDPL (JV) 17 65.00 65.00 India L&T-STEC JV MUMBAI 16 50.00 50.00 India DAEWOO and L&T Joint Venture 15 51.00 51.00 India 19 L&T-Eastern Joint Venture UAE 65.00 L&T- Inabensa Consortium Proportion of effective ownership interest (%) As at 31-3-2018 As at 31-3-2019 Proportion of effective ownership interest (%) Principal place of business Name of joint operations (with specific ownership interest in the arrangement) No. Sr. 12222222220m NOTE [40] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) 100.00 LARSEN & TOUBRO 50.00 India O&M Joint Venture Larsen and Toubro Limited-Scomi Engineering BHD Consortium- 21 60.00 60.00 India Larsen and Toubro Limited-Scomi Engineering BHD Consortium- Residual Joint Works Joint Venture 20 65.00 50.00 2 3 L&T-KBL-MAYTAS UJV India India Oman India India India India India Qatar India India India India NOTE [41] India L&T Infrastructure Engineering Limited-Centre for Symbiosis of Technology Environment & Management (STEM) 30 India L&T Infrastructure Engineering Limited-Aakar Abhinav Consultants Pvt. Ltd. 29 India L&T Infrastructure Engineering Limited-Vax Consultants Pvt.Ltd. (for 5 projects) 28 Malaysia Kingdom of Saudi Arabia The components of other equity shown in the Consolidated Balance Sheet include the Group's share in the respective reserves of subsidiaries. Reserve attributable to non-controlling interests is reported separately in the Consolidated Balance Sheet. Retained earnings comprise Group's share in general reserve and balance of Profit and Loss. 485 Other revenue Segment Revenue as per Ind AS 115 (a) Disaggregation of revenue into operating segments and geographical areas for the year ended March 31, 2019: Disclosure pursuant to Ind AS 115 "Revenue from Contracts with Customers": NOTE [44] on intangible assets being expenditure on new product development 52.54 crore (previous year: 51.38 crore) on other intangible assets 1.96 crore (previous year: * 5.64 crore) (c) (b) on Property, Plant & Equipment 5.59 crore (previous year: 6.73 crore) (a) India The expenditure on research and development activities recognised as expense in the Statement of Profit and Loss is 232.27 crore (previous year: 206.80 crore). Further, the Group has incurred capital expenditure on research and development activities as follows: (c) The Competition Commission of India (CCI) accorded on April 18, 2019 its approval for the acquisition of the Group's Electrical & Automation (E&A) business by Schneider Electric subject to certain conditions, the details of which are awaited. Pending receipt of CCI's detailed order, the E&A business is treated as continuing operation and accordingly, the relevant assets are not classified as held for sale. Write off of trade receivable from a customer against whom insolvency proceedings are underway 294.75 crore. Gain on divestment of Group's stake in subsidiary companies (EWAC Alloys Limited: 281.01 crore and L&T Cutting Tools Limited: 136.74 crore). ii. i. (b) Exceptional items for 2017-18 include: (a) Exceptional item for 2018-19 represents recognition of certain customer dues now considered recoverable. NOTE [42] Notes forming part of the Consolidated Financial Statements (contd.) NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 486 NOTE [43] L&T Infrastructure Engineering Limited-Transtek Engineers & Services Pvt. Ltd. 27 India 3456789 19 18 17 16 15 14 13 Sojitz Corporation-L&T consortium (for 4 projects) 12 L&T Galfar Consortium Sojitz Corporation-Gayathri Projects Ltd-L&T consortium 11 10 PES Engg P ltd-L&T Consortium 9 IIS L&T Consortium 8 7 L&T-BRAPL JV (package II) 6 Larsen & Toubro Limited Waterleau Consortium 5 4 L&T ISDPL DI (JV) L&T-Shanghai Urban Construction (Group) Corporation Joint Venture Scomi Engineering Bhd-L&T consortium Consortium of M/s. J. Ray McDermott Sdn. Bhd. and M/s. L&T Hydrocarbon Engineering Limited Consortium of L&T Hydrocarbon Engineering Limited and EMAS AMC Pte. Ltd. L&T Infrastructure Engineering Limited-Rajendran Associates 26 India L&T Infrastructure Engineering Limited-Pricewaterhouse Coopers Pvt. Ltd. (for 2 projects) 25 India L&T Infrastructure Engineering Limited-Mahindra Consulting Engineers Ltd. 24 India L&T Infrastructure Engineering Limited-Fortress Infrastructure Advisory Services (for 4 projects) 23 India L&T Asian Realty Project LLP-Nirmal Life Style Developers Pvt. Ltd. (Nirmal Lifestyle) India L&T Parel Project LLP-Omkar Realtors & Developers Pvt. Ltd. (Crescent bay) 21 India Consortium of L&T Hydrocarbon Engineering Limited and Technip India Limited 20 India Consortium of L&T Hydrocarbon Engineering Limited, GE Oil & Gas UK Ltd., McDermott International Management S. de RL, Berlian McDermott Sdn Bhd and Vetco Gray Pte Ltd India Consortium of L&T Hydrocarbon Engineering Limited and Reliance Naval and Engineering Limited India 22 14 29.00 29.00 Vadodara Bharuch Tollway Limited 24 97.45 97.45 India Panipat Elevated Corridor Limited 23 97.45 97.45 India L&T Sambalpur-Rourkela Tollway limited 22 97.45 97.45 India Kudgi Transmission Limited 21 97.45 97.45 India L&T Samakhiali Gandhidham Tollway Limited 20 97.45 India 97.45 97.45 25 India L&T Halol-Shamlaji Tollway Limited 29 India Ahmedabad-Maliya Tollway Limited 28 India L&T Interstate Road Corridor Limited 27 India LTIDPL INDVIT Services Limited** 97.45 26 Principal place of business Sr. No. Name of joint ventures NOTE [40] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 484 483 98.12 98.12 India L&T Transportation Infrastructure Limited Joint Ventures India L&T Deccan Tollways Limited 19 97.45 India L&T Chennai-Tada Tollway Limited 12 97.45 97.45 India L&T Infrastructure Development Projects Limited 11 50.00 50.00 97.45 Azerbaijan 10 50.00 50.00 India L&T-Gulf Private Limited 9 60.00 60.00 India L&T Sapura Shipping Private Limited 8 L&T Hydrocarbon Caspian LLC 30 13 India 97.45 ཨི། 97.45 India L&T Rajkot-Vadinar Tollway Limited 18 97.45 India * Devihalli Hassan Tollway Limited 17 L&T BPP Tollway Limited * 97.45 Krishnagiri Walajahpet Tollway Limited * 16 97.45 India Western Andhra Tollways Limited * 15 97.45 India Krishnagiri Thopur Toll Road Limited * 14 97.45 India Foreign PNG Tollway Limited 31 90.00 90.00 India L&T-Hochtief Seabird Joint Venture 8 26.00 26.00 India Metro Tunneling Group 26.00 26.00 India International Metro Civil Contractors Joint Venture 43.00 43.00 India HCC-L&T Purulia Joint Venture 65.00 65.00 India L&T-AM Tapovan Joint Venture 80.00 80.00 9 Metro Tunneling Chennai-L&T Shanghai Urban Construction (Group) Corporation Joint Venture India Arabia Kindgom of Saudi Civil Works Joint Venture 13 22.00 22.00 Qatar Joint Venture Aktor-Larsen & Toubro-Yapi Merkezi-STFA-Al Jaber Engineering 12 68.00 Qatar 68.00 Venture CC27 Delhi L&T-Shanghai Urban Construction (Group) Corporation Joint 11 60.00 60.00 India (Group) Corporation Joint Venture Metro Tunneling Delhi- L&T Shanghai Urban Construction 10 75.00 75.00 India Al Balagh Trading & Contracting Co W.L.L- L&T Joint Venture 34569 50.00 47.75 97.45 97.45 97.45 97.45 97.45 Proportion of effective ownership interest (%) As at 31-3-2018 The company has been re-classified as associate w.e.f. August 14, 2018 on amendment to Articles of Association The name of the company has been struck off from the register of companies on August 6, 2018 As at 31-3-2019 Proportion of effective ownership interest (%) *** 47.75 ** * India Iran Indiran Engineering Projects and Systems Kish PJSC 34 Raykal Aluminium Company Private Limited 33 India L&T Kobelco Machinery Private Limited [Note 66] 32 Singapore L&T IDPL Trustee Manager Pte. Ltd. *** The Group has sold its stake on May 4, 2018 India 72.11 97.45 50.00 India Larsen and Toubro Limited-Shapoorji Pallonji & Co. Ltd. Joint Venture 2 49.00 49.00 India Desbuild L&T Joint Venture 1 ownership interest (%) Proportion of effective 72.11 Proportion of effective ownership interest (%) Name of joint operations (with specific ownership interest in Principal place of the arrangement) No. Sr. As at 31-3-2018 As at 31-3-2019 50.00 50.00 75.50 75.50 51.00 51.00 business 100.00 Saudi Arabia After considering adjustments for issue of bonus shares during respective years. Heavy Engineering ■ Defence Engineering ☐ Electrical & Automation Hydrocarbon IT & Technology Services ☐ Financial Services ☐ ☐ Developmental Projects ☐ Others L&T CONSOLIDATED - GROSS REVENUE FROM OPERATIONS L&T CONSOLIDATED - SEGMENT-WISE EXTERNAL REVENUE 150000- 141007 18% 130000- 119862 110011 9% 110000- 37654 90000 39699 Power 2018-19 Infrastructure International 46805 7% 95743 54% 14371 35853 8% 41507 110000 27871 16% 90000 130029 70000 117055 101488 50000 6017 3% 3016- 30000 2% 4049 2% 2919 2% 2016-17 Domestic 2017-18 2018-19 crore 5696 5068 4% ☐ Electrical & Automation Hydrocarbon IT & Technology Services ☐ Financial Services ☐ ☐ Developmental Projects ☐ Others L&T CONSOLIDATED - SEGMENT-WISE ORDER BOOK 2018-19 310000- 293427 263107 12% 261341 1% 260000- 63266 62506 69757 210000 5843 2% 2647 1% 39717 13% 221850 76% 11532- Engineering ■ Defence Heavy Engineering Power 4%- 45109 12638 9% 72418 51% 14371 10% 70000 15132- 11% 95898 80163 50000 72357 142995 7% 5787 4% 30000 2016-17 Domestic 2017-18 2018-19 International L&T CONSOLIDATED - ORDER BOOK 3% 2174 3971 1% 3% crore ☐ Infrastructure 3752 4% 150000 130000 152908 9.91 12.13 13.71 16.47 17.26 19.38 31.23 Gross debt: Equity ratio 1.81:1 1.79:1 1.75:1 1.87:1 2.21:1 2.13:1 1.85:1 1.61:1 1.31:1 1.08:1 Basic earnings per equity share (*) # 63.51 52.62 43.20 30.32 12.80 34.22 14.12 RONW % * operations @ 11.58 11.40 10.18 10.35 12.24 12.60 13.33 13.81 14.75 14.61 PAT as % of net revenue from operations $ 6.32 6.16 5.53 4.19 5.18 5.76 6.99 7.30 8.56 12.40 15.35 35.31 37.69 34.14 Profit after tax (PAT) as % of net revenue from operations = [PAT including extraordinary/exceptional items/gross revenue from operations less excise duty]. * RONW = [(PAT including extraordinary/exceptional items)/(average net worth excluding revaluation reserve)]. # Basic earnings per equity share has been calculated including extraordinary/exceptional items and adjusted for all the years for issue of bonus shares. ## 43 44 crore crore GRAPHS ANNUAL REPORT 2018-19 * crore L&T CONSOLIDATED - ORDER INFLOW L&T CONSOLIDATED - SEGMENT-WISE ORDER INFLOW 2018-19 190000- 176834 5142 5068 3% 170000- 16% 3% $ Profit before depreciation, interest and tax [PBDIT] is excluding extraordinary/exceptional items wherever applicable and other income. PBDIT as % of net revenue from operations = [PBDIT/(gross revenue from operations less excise duty)]. @ ^^ 32.69 40.84 Book value per equity share (*) ## 444.67 391.78 358.83 316.20 293.29 271.10 244.40 213.09 12638 182.65 154.70 18.00 16.00 14.00 12.17 10.83 9.50 8.22 7.33 6.44 5.56 Figures for 2015-16 to 2018-19 are as per Ind AS and for earlier periods as per IGAAP and hence not directly comparable. Dividend per equity share (*) ## PBDIT as % of net revenue from 4760 2% Percentage ROUTE MAP ANNUAL REPORT 2018-19 Route Map to the AGM Venue 46 Marine Lines Railway Station Marine Lines Flyover Maharshi Karve Road Birla Matushri Sabhagar, 19, Marine Lines, Mumbai 400 020. - Gol Masjid Walter D'Souza Udyan METRO Big Cinema Kala Niketan Maharshi Karve Road Queens Road UAH Khan Marg Maharshi Karve Road Bombay Hospital O 45 Churchgate Railway Station 2018-19 2017-18 10.00- 0.00 2016-17 Earning per share 50.00- 63.51 45.00- 52.62 40.00- 39.00 38.46 Hv 35.00- 30.00- 25.00- 20.00- 15.00- 10.00- 2017-18 2018-19 47.63 LLL 2016-17 Earning per share I Dividend per share Metro Cinema Petrol Pump Mahatma Gandhi Road Mahapalika Marg Mahapalika Marg To appoint a Director in place of Mr. J.D Patil (DIN: 01252184), who retires by rotation and is eligible for re-appointment; To consider and, if thought fit, to pass as a SPECIAL RESOLUTION the following: "RESOLVED THAT pursuant to the provisions of Sections 149, 152 and any other applicable provisions of the Companies Act, 2013 and the rules made thereunder read with Schedule IV to the Companies Act, 2013 (including any statutory modifications or re-enactment(s) thereof for the time being in force) and applicable provisions of the Securities and Exchange Board of India (Listing Obligations 8) and Disclosure Requirements) Regulations, 2015 and based on the recommendation of the Nomination and Remuneration Committee and approval of the Board of Directors, Mr. M.M. Chitale (DIN: 00101004) who was appointed as an Independent Director of the Company for a term upto March 31, 2019 by the shareholders and in respect of whom the Company has received a notice in writing from the Director under Section 160 of the Companies Act, 2013 proposing his candidature for the office of a Director be and is hereby re-appointed as an Independent Director of the Company for a term of five years with effect from April 1, 2019 to March 31, 2024." To consider and, if thought fit, to pass as a SPECIAL RESOLUTION the following: "RESOLVED THAT pursuant to the provisions of Sections 149, 152 and any other applicable provisions of the Companies Act, 2013 and the rules made thereunder read with Schedule IV to the Companies Act, 2013 (including any statutory modifications or re-enactment(s) thereof for the time being in force) and Regulation 17(1A) and other applicable provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and based on the recommendation of the Nomination and Remuneration Committee and approval of the Board of Directors, Mr. M. Damodaran (DIN: 02106990) who was appointed as an Independent Director of the Company for a term upto March 31, 2019 by the shareholders and in respect of whom the Company has received a notice in writing from the Director under Section 160 of the Companies Act, 2013 proposing his candidature for the office of a Director be and is hereby re-appointed as an Independent Director of the Company for a term of five years with effect from April 1, 2019 to March 31, 2024 and also continue as an Independent Director of the Company after he attains the age of 75 years." 47 48 NOTICE ANNUAL REPORT 2018-19 9) To consider and, if thought fit, to pass as a SPECIAL RESOLUTION the following: "RESOLVED THAT pursuant to the provisions of Sections 149, 152 and any other applicable provisions of the Companies Act, 2013 and the rules made thereunder read with Schedule IV to the Companies Act, 2013 (including any statutory modifications or re-enactment(s) thereof for the time being in force) and other applicable provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and based on the recommendation of the Nomination and Remuneration Committee and approval of the Board of Directors, Mr. Vikram Singh Mehta (DIN: 00041197) who was appointed as an Independent Director of the Company for a term upto March 31, 2019 by the shareholders and in respect of whom the Company has received a notice in writing from the Director under Section 160 of the Companies Act, 2013 proposing his candidature for the office of a Director be and is hereby re-appointed as an Independent Director of the Company for a term of five years with effect from April 1, 2019 to March 31, 2024." 10) To consider and, if thought fit, to pass as a SPECIAL RESOLUTION the following: "RESOLVED THAT pursuant to the provisions of Sections 149, 152 and any other applicable provisions of the Companies Act, 2013 and the rules made thereunder read with Schedule IV to the Companies Act, 2013 (including any statutory modifications or re-enactment(s) thereof for the time being in force) and other applicable provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and based on the recommendation of the Nomination and Remuneration Committee and approval of the Board of Directors, Mr. Adil Zainulbhai (DIN: 06646490) who was appointed as an Independent Director of the Company for a term upto May 29, 2019 by the shareholders and in respect of whom the Company has received a notice in writing from the Director under Section 160 of the Companies Act, 2013 proposing his candidature for the office of a Director be and is hereby re-appointed as an Independent Director of the Company for a term of five years with effect from May 29, 2019 to May 28, 2024" 11) To consider and, if thought fit, to pass as an ORDINARY RESOLUTION the following: "RESOLVED THAT the scale of salary per month of Mr. S.N Subrahmanyan (DIN: 02255382), Chief Executive Officer and Managing Director of the Company approved by the Members at the Annual General Meeting held on August 22, 2017 be substituted with the following scale, with effect from April 1, 2020 and all other terms and conditions of appointment shall remain the same- Salary: 23,20,000 - ₹1,60,000 - ₹24,80,000 with an annual increment due on April 1 every year." 12) To consider and, if thought fit, to pass as an ORDINARY RESOLUTION the following: "RESOLVED THAT the scale of salary per month of Mr. R. Shankar Raman (DIN: 00019798), Chief Financial Officer and Whole-time Director of the Company approved by the Members at the Annual General Meeting held on August 26, 2016 be substituted with the following scale with effect from April 1, 2020 and all other terms and conditions of appointment shall remain the same- Salary: 16,25,000 - ₹1,00,000 - ₹17,25,000 with an annual increment due on April 1 every year." 13) To consider and, if thought fit, to pass as a SPECIAL RESOLUTION the following: "RESOLVED THAT pursuant to the provisions of Section 4, 13 and other applicable provisions, if any, of the Companies Act, 2013 and the Companies (Incorporation) Rules, 2014, (including any statutory modification or re-enactment(s) thereof for the time being in force) as amended from time to time, and subject to the approval of the Registrar of Companies, Maharashtra, Mumbai ("ROC") and/ or of any other statutory or regulatory authority, as may be necessary, Clause III (Objects Clause) of the Memorandum of Association of the Company, be and is hereby altered by inserting the following Clause (ee) after the existing Clause III(e) '(ee) To carry on business of, designing, engineering, developing, converting, manufacturing, integrating, constructing, importing, exporting, trading, acting as agents / dealers, selling or otherwise disposing of, distributing, installing, commissioning, Through Life Support, of all kinds of defence, space and aerospace platforms, 7) 6) 5) To appoint a Director in place of Mr. R. Shankar Raman (DIN: 00019798), who retires by rotation and is eligible for re-appointment; 4) To appoint a Director in place of Mr. Shailendra Roy (DIN: 02144836), who retires by rotation and is eligible for re-appointment; Azad Maidan DN Road Flora Fountain DN Road Municipal Corporation Building Chatrapati Shivaji Terminus (CST) LARSEN & TOUBRO 20.00- AGM Venue : 19, Marine Lines, Mumbai - 400 020 LARSEN & TOUBRO LIMITED Regd. Office L&T House, Ballard Estate, Mumbai 400 001. CIN L99999MH1946PLC004768 Email: igrc@larsentoubro.com •Website: www.larsentoubro.com Tel No.: 022-67525656 • Fax No.: 022-67525893 Notice NOTICE IS HEREBY GIVEN THAT the Seventy Fourth Annual General Meeting of LARSEN & TOUBRO LIMITED will be held at Birla Matushri Sabhagar, 19, Marine Lines, Mumbai - 400 020 on Thursday, August 1, 2019 at 3.00 P.M. to transact the following business :- 1) To consider and adopt the audited financial statements of the Company for the year ended March 31, 2019 and the Reports of the Board of Directors and Auditors thereon and the audited consolidated financial statements of the Company and the report of the auditors thereon for the year ended March 31, 2019; 2) To declare a dividend on equity shares; 3) To appoint a Director in place of Mr. M.V. Satish (DIN: 06393156), who retires by rotation and is eligible for re-appointment; Birla Matushri Sabhagar, 160000 30.00- 43.20 16325 -14.0 10000- -24.0 -13.5 9000- 8905 -22.0 -13.0 13641 -12.5 -20.0 13000 8000- -12.0 11130 11000 -11.5 11.6 11.4 -11.0 Percentage 7370 15000- crore 17000- LARSEN & TOUBRO 230161 7078 191584 200601 2% 110000 60000 As at 31-3-2017 As at 31-3-2018 Domestic As at 31-3-2019 International crore ☐ Infrastructure ☐ Power Heavy Engineering Defence Engineering ☐ Electrical & ☐ ☐ Automation Hydrocarbon ☐ Others in * crore L&T CONSOLIDATED - PBDIT AS % OF NET REVENUE FROM OPERATIONS L&T CONSOLIDATED - PAT AND RONW % -18.0 7000- -16.0 5000- 4000- 3000- Hv 2000- 1000- 2017-18 2018-19 L&T CONSOLIDATED - SEGMENT-WISE NET ASSETS 25000- 31.03.2018 20000- 15000- 10000- 5000- 31.03.2019 Total Segment wise EBIT (segment results) 2017-18: 12336 crore and 2018-19: 15733 crore L&T CONSOLIDATED - EPS Segment wise Net Assets as at 31.03.2018 74271 crore and as at 31.03.2019 * 81360 crore L&T STANDALONE - EPS & DPS 70.00- 60.00- 50.00- 6000- L&T CONSOLIDATED - SEGMENT-WISE EBIT (SEGMENT RESULTS) PBDIT as % of net revenue from operations -RONW 6041 9000 6000- 15.3 -10.5 -14.0 14.1 -10.0 7000 10.1 5000 40.00- 2016-17 PBDIT -12.0 -9.5 9.0 4000 10.0 2017-18 2018-19 2016-17 2017-18 2018-19 PAT 5000- Ratios and statistics 12.8 58875 52196 53738 44296 37356 PBDIT^^ 8684 7701 6481 5829 6488 6667 5473 6283 5640 4816 Profit after tax (excluding extraordinary/exceptional items) 6363 4861 4560 4454 57164 57558 63813 66301 36-37 Is there any case filed by any stakeholder against the company regarding unfair trade practices, irresponsible advertising and or anti-competitive behavior during the last five years and pending as of end of financial year 41 42 10 YEAR HIGHLIGHTS | ANNUAL REPORT 2018-19 STANDALONE FINANCIALS-10 YEAR HIGHLIGHTS crore Description Ind AS IGAAP 4699 2018-19 2016-17 2015-16 2014-15 2013-14 2012-13 2011-12 2010-11 $$ 2009-10 Statement of Profit and Loss Gross revenue from operations 86988 74612 2017-18 36-37 4905 4413 18312 10192 10561 10558 13924 12936 11459 8478 9896 7161 6801 62743 59735 56571 56059 50021 45121 37769 35119 29007 25113 21846 25223 29291 33662 3676 3185 Profit after tax (including extraordinary/exceptional items) 6678 5387 5454 5000 5056 5493 4169 4384 3958 4376 Balance Sheet Net worth Loan funds 52551 49174 46013 42135 37085 4457 Does the company display product information on the product label, over and above what is mandated as per local laws? 36-37 What percentage of customer complaints/consumer cases are pending as on the end of financial year? AR 26-27 Does the company have procedures in place for sustainable sourcing (including transportation)? AR 26-27 Has the company taken any steps to procure goods and services from local & small producers, including communities surrounding their place of work? AR 26-27 If yes, what steps have been taken to improve their capacity and capability of local and small vendors? AR 26-27 Does the company have a mechanism to recycle products and waste? If yes what is the percentage of recycling of products and waste (separately as <5%, 5-10%, >10%). Also, provide details thereof, in about 50 words or so. The Company is a leading EPC solution provider for Solar Photo Voltaic (PV) based power plants helping customers save on the energy bills and contribute to reduction of GHG emissions from consumption of indirect energy. 39 40 Question Principle 3: Employee Well Being Total number of employees. Total number of employees hired on temporary/contractual casual basis. Number of permanent women employees. Number of permanent employees with disabilities AP For each such product, provide the following details in respect of resource use (energy, water, raw material, etc.) per unit of product (optional): 26-27 25-26 44734 Question 3. Governance Related to BR Indicate the frequency with which the Board of Directors, Committee of the Board or CEO to assess the BR performance of the Company. Within 3 months, 3-6 months, Annually, More than 1 year. Does the Company publish a BR or a Sustainability Report? What is the Hyperlink for viewing this report? How frequently it is published? Section E: Principle-wise Performance Principle 1: Ethics, Transparency and Accountability LARSEN & TOUBRO Reference Section Description Page Number Do you have an employee association that is recognized by management? AR AR 24 Does the policy relating to ethics, bribery and corruption cover only the company? AR Does it extend to the Group/Joint Ventures/ Suppliers/Contractors/NGOs /Others? How many stakeholder complaints have been received in the past financial year and what percentage was satisfactorily resolved by the management? Principle 2: Sustainable Products and Services The details related to stakeholder complaints are included in the Director's Report Section of this Annual Report. List up to 3 of your products or services whose design has incorporated AR social or environmental concerns, risks and/or opportunities. 25-26 24 What percentage of your permanent employees and members of this recognized employee association? Reference Section 32-33 Number of show cause/ legal notices received from CPCB/SPCB which are pending (i.e. not resolved to satisfaction) as on end of Financial Year. 32-33 Question Principle 7: Responsible Public Advocasy Is your company a member of any trade and chamber or association? If Yes, Name only those major ones that your business deals with: Have you advocated/lobbied through above associations for the advancement or improvement of public good? LARSEN & TOUBRO Reference Section Description 32-33 Page Number Principle 8: Inclusive Growth Does the company have specified programmes/initiatives projects in pursuit of the policy related to Principle 8? 34-36 Are the programmes/projects undertaken through in-house team own foundation/external NGO/government structures/any other organisation? Have you done any impact assessment of your initiative? 34-36 34-36 What is your company's direct contribution to community development projects? Amount in INR and the details of the projects undertaken. Have you taken steps to ensure that this community development initiative is successfully adopted by the community? 34-36 34-36 Principle 9: Customer Welfare 33-34 Capital employed Are the Emissions/Waste generated by the company within the permissible limits given by CPCB/SPCB for the financial year being reported? 32-33 Description Page Number 27-29 Please indicate the Number of complaints relating to child labour, forced labour, involuntary labour, sexual harassment in the last financial year and pending, as on the end of the finacial year. What percentage of your under-mentioned employees were given safety and skill upgradation training in the last year? 27-29 Principle 4: Valuing Marginalized Stakeholders Has the company mapped its internal and external stakeholders? Out of the above, has the company identified the disadvantaged, vulnerable & marginalized stakeholders? Are there any special initiatives taken by the company to engage with the disadvantaged, vulnerable and marginalized stakeholders. Principle 5: Human Rights Has the company undertaken any other initiatives on - clean technology, energy efficiency, renewable energy, etc.? Y/N. Does the policy of the company on human rights cover only the company or extend to the Group/Joint Ventures/Suppliers Contractors/NGOS/Others? 29-31 31-32 How many stakeholder complaints have been received in the past financial year and what percent was satisfactorily resolved by the management? 31-32 Principle 6: Environment Does the policy relate to Principle 6 cover only the company or extends to the Group/Joint Ventures/Suppliers/Contractors NGOs/others? Does the company have strategies/ initiatives to address global environmental issues such as climate change, global warming, etc? Does the company identify and assess potential environmental risks? 32-33 32-33 32-33 Does the company have any project related to Clean Development Mechanism? 29-31 Ratios and statistics 27-29 operations @ 9929 8884 7677 6423 Profit attributable to Group shareholders (excluding extraordinary/exceptional items) 8713 7151 5920 4154 4470 4547 4911 4649 4238 3796 Profit attributable to Group shareholders (including extraordinary/exceptional items) 8905 10730 11258 10463 11130 Ind AS IGAAP Description 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14 2012-13 2011-12 2010-11 2009-10 Statement of Profit and Loss Gross revenue from operations 7370 141007 101975 92762 85889 75195 64960 52470 44310 PBDIT^^ 16325 13641 119862 110011 6041 4233 4765 1087 Loan funds 125555 107524 93954 88135 90571 80330 62672 47150 1026 32798 Capital employed 194756 167629 147735 135208 136479 121221 99185 PBDIT as % of net revenue from 78290 22656 crore 1753 3179 4902 5206 4694 4456 5451 Balance Sheet Net worth 62375 54904 50217 2653 44180 37712 33860 29387 25051 20991 Non-controlling interest 6826 3564 2893 4999 40909 CONSOLIDATED FINANCIALS-10 YEAR HIGHLIGHTS 5201 Figures for the year 2009-10 to 2011-12 include Hydrocarbon business which has been transferred w.e.f April 1, 2013 to a wholly owned subsidiary. 12.39 14.30 17.46 16.06 18.95 19.73 28.49 Gross Debt: Equity ratio 0.19:1 0.21:1 12.37 0.23:1 0.35:1 0.34:1 0.29:1 0.39:1 0.33:1 0.37:1 Basic earnings per equity share (*) # 47.63 38.46 39.00 0.33:1 35.81 11.32 RONW % * 10.34 9.98 LARSEN & TOUBRO 9.86 9.23 11.38 11.78 10.60 11.82 12.84 13.22 13.00 operations $ 7.68 7.23 8.30 7.91 9.71 8.50 8.38 9.01 11.82 PAT as % of net revenue from 36.31 8.87 35.55 5.56 No. of equity shareholders 10,21,275 8,99,902 9,23,628 10,28,541 No. of employees 44,761 42,924 41,466 43,354 44,081 54,579 50,592 48,754 45,117 8,53,824 832,831 854,151 926,719 8,53,485 8,14,678 38,785 Figures for 2015-16 to 2018-19 are as per Ind AS and for earlier periods as per IGAAP and hence not directly comparable. 6.44 ^^ Profit before depreciation, interest and tax (PBDIT) is excluding extraordinay/exceptional items wherever applicable and other income. PBDIT as % of net revenue from operations = [(PBDIT)/(gross revenue from operations less excise duty)]. Profit After Tax (PAT) as % of net revenue from operations = [(PAT including extraordinay/exceptional items)/(gross revenue from operations less excise duty)]. * RONW = [(PAT including extraordinary/exceptional items)/(average net worth excluding revaluation reserve)]. # Basic earnings per equity share have been calculated including extraordinary/exceptional items and adjusted for all the years for issue of bonus shares. 39.57 $$ After considering adjustments for issue of bonus shares during the respective years. ## $ 7.33 @ 9.50 32.79 29.04 8.22 32.41 Book value per equity share (*) ## 374.63 350.90 328.79 301.57 241.97 211.39 265.85 159.31 10.83 134.98 Dividend per equity share (*) ## 18.00 16.00 182.90 14.00 12.17 IT & Technology Services Hydrocarbon 4444.20 Electrical & Automation [Note 42(c)] Defence Engineering Power Infrastructure (2045.50) (2045.50) Financial Services Segment result [Profit/(Loss) before interest and tax] 119862.10 Heavy Engineering Developmental Projects 472.22 Total 3052.64 2146.51 3084.20 165.79 771.81 1178.10 668.82 Others 850.09 205.21 487.01 163.99 129.88 5440.08 5388.77 1440.64 120.38 4278.41 14553.10 141007.09 14371.36 IT & Technology Services 11759.63 23.80 11735.83 15176.23 44.65 15131.58 Hydrocarbon 5508.27 306.82 314.35 6093.63 299.24 5209.03 181.74 11187.79 169.64 11357.43 Total (2006.33) Elimination 239.10 5695.88 Others 4294.05 5934.98 (2006.33) 141007.09 119862.10 4294.05 5068.04 Developmental Projects 10063.75 10063.75 12637.69 12637.69 Financial Services 5068.04 196.40 Infrastructure 1182.57 4838.09 6491.79 6030.51 43235.53 50908.92 65485.32 74848.71 Power As at 31-3-2018 Segment Liabilities As at 31-3-2019 As at 31-3-2018 Segment Assets As at 31-3-2019 Particulars crore 5647.48 7369.86 Heavy Engineering 3962.73 Hydrocarbon 12224.57 2139.88 5786.81 2178.18 4449.55 4458.66 Electrical & Automation [Note 42(c)] 4618.63 4964.28 7734.33 7826.76 Defence Engineering 1541.48 2111.79 4614.54 (634.57) (435.86) 8440.29 Provision for deferred tax Provision for current tax Profit before Tax Unallocated corporate income net of expenditure Finance costs Inter-segment margins on capital jobs Particulars (a) Information about Reportable segments (contd.) NOTE [46] Notes forming part of the Consolidated Financial Statements (contd.) NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 496 495 12336.41 15733.46 Profit after tax Share in profit/(loss) of joint venture/associate companies (net) Adjustments for non-controlling interests in subsidiaries Net profit after tax, non-controlling interests and share in profit/(loss) of joint ventures/associates crore 533.40 11639.16 (3732.27) 828.37 12.90 (1538.52) 8905.13 (21.00) (1311.45) 349.99 10237.58 776.20 14580.92 (4693.33) (1806.04) (5.50) Total For the year ended 31-3-2018 External Inter-segment Total External Inter-segment For the year ended 31-3-2019 659.00 Electrical & Automation [Note 42(c)] 7.31% 5.62 5.00% 7.56% 7.56% 7.31% 7.56% 7.31% As at 31-3-2018 As at 31-3-2019 (b) Pension plan (a) Gratuity plan (C) Salary Growth rate: Annual increase in healthcare costs (see note below) (B) Post-retirement medical benefit plan (b) Pension plan 5.00% (c) 5.13% 7.00% crore (H) A one percentage point change in actuarial assumptions would have the following effects on defined benefit obligation: (G) The obligation of the Group under the post-retirement medical benefit plan is limited to the overall ceiling limits. At present, healthcare cost, as indicated in the principal actuarial assumption given above, has been assumed to increase at 5% p.a. The interest payment obligation of trust-managed provident fund is assumed to be adequately covered by the interest income on long term investments of the fund. Any shortfall in the interest income over the interest obligation is recognised immediately in the Statement of Profit and Loss as actuarial loss. The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. (c) For post-retirement medical benefit plan, the attrition rate varies from 1% to 11% (previous year: 1% to 12%) for various age groups. (a) For gratuity plan, the attrition rate varies from 1% to 25% (previous year: 1% to 25%) for various age groups. (b) For pension plan, the attrition rate varies from 0% to 2% (previous year: 0% to 2%) for various age groups. (F) (E) (D) Attrition Rate: NOTE [45] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 493 5.99% 5.03% Gratuity Plans Discount rate: 396.61 (13.25) (13.95) 0.70 12.17 4.18 7.99 3731.99 3.09 3.09 2.60 2.60 270.32 9226.17 271.20 270.32 4128.60 (a) Gratuity plan 2700.75 3676.19 (A) (vii) Principal actuarial assumptions at the Balance Sheet date (expressed as weighted average): 6.30 14.86 7.50 14.60 7.70 6.02 As at 31-3-2018 As at 31-3-2019 Plans Pension plan 3. Post-retirement medical benefit plan 2. Gratuity 1. (vi) The average duration (years) of the Defined Benefit Obligation at the end of the reporting period is as follows: 975.44 3220.06 Particulars As at 31-3-2019 72418.05 3971.50 Power Infrastructure Revenue Total For the year ended 31-3-2018 External Inter-segment Total For the year ended 31-3-2019 External Inter-segment Particulars crore Disclosure pursuant to Ind AS 108 "Operating Segment" (a) Information about Reportable segments All the above defined benefit plans expose the Group to general actuarial risks such as interest rate risk and market (investment) risk. The interest payment obligation of trust-managed provident fund is assumed to be adequately covered by the interest income on long term investments of the fund. Any shortfall in the interest income over the interest obligation is recognised immediately in the Statement of Profit and Loss as actuarial loss. Any loss/gain arising out of the investment risk and actuarial risk associated with the plan is also recognised as expense or income in the period in which such loss/ gain occurs. The Parent Company and a few subsidiaries manage provident fund plan through a provident fund trust for its employees which is permitted under The Employees' Provident Funds and Miscellaneous Provisions Act, 1952. The plan mandates contribution by employer at a fixed percentage of employee's salary. Employees also contribute to the plan at a fixed percentage of their salary as a minimum contribution and additional sums at their discretion. The plan guarantees interest at the rate notified by the provident fund authority. The contribution by employer and employee together with interest are payable at the time of separation from service or retirement whichever is earlier. The benefit under this plan vests immediately on rendering of service. (D) Trust managed provident fund plan: 785.71 11.59 In addition to contribution to state-managed pension plan (EPS scheme), the Group operates a post retirement pension scheme, which is discretionary in nature for certain cadres of employees. The quantum of pension depends on the cadre of the employee at the time of retirement. The plan is unfunded. Employees do not contribute to the plan. 73203.76 3983.09 1130.29 3214.44 3849.24 97.28 3751.96 Defence Engineering 1635.07 243.47 1391.60 2513.66 339.44 2174.22 Heavy Engineering 6208.23 7.65 63416.91 62286.62 6200.58 Effect of 1% increase NOTE [46] NOTE [45] (contd.) Impact of change in discount rate 24.44 26.97 Impact of change in Health care cost 81.31 (71.74) (71.48) 78.62 81.24 (70.36) (69.88) 78.92 Post-retirement medical benefit plan Impact of change in salary growth rate Impact of change in discount rate As at 31-3-2018 Effect of 1% decrease As at 31-3-2019 As at 31-3-2018 (33.66) (C) Pension plan: (29.80) (19.96) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO The Post-retirement medical benefit plan provides for reimbursement of health care costs to certain categories of employees post their retirement. The reimbursement is subject to an overall ceiling sanctioned based on cadre of the employee at the time of retirement. The plan is unfunded. Employees do not contribute to the plan. The defined benefit plans for gratuity of the Parent Company and material domestic subsidiary companies are administered by separate gratuity funds that are legally separate from the Parent Company and the material domestic subsidiary companies. The trustees nominated by the group are responsible for the administration of the plans. There are no minimum funding requirements of these plans. The funding of these plans is based on gratuity fund's actuarial measurement framework set out in the funding policies of the plan. These actuarial measurements are similar compared to the assumptions set out in (vii) supra. An insignificant portion of the gratuity plan of the group attributable to subsidiary companies is administered by the respective subsidiary companies and is funded through insurer managed funds. A part of the gratuity plan is unfunded and managed within the group. Further, the unfunded portion also includes amounts payable in respect of the Group's foreign operations which result in gratuity payable to employees engaged as per the local laws of country of operation. Employees do not contribute to any of these plans. (B) Post-retirement medical care plan: The Parent Company operates gratuity plan through a trust wherein every employee is entitled to the benefit equivalent to fifteen days salary last drawn for each completed year of service. The same is payable on termination of service or retirement whichever is earlier. The benefit vests after five years of continuous service. The company's scheme is more favourable as compared to the obligation under The Payment of Gratuity Act, 1972. 494 (A) Gratuity plan: (viii) Characteristics of defined benefit plans and associated risks: 28.04 28.13 (24.29) (24.45) Impact of change in discount rate Pension plan 37.71 (22.03) 41.66 10096.59 Defence Engineering IT & Technology Services 8.95 774.53 As at 31-3-2018 229.40 219.15 41.25 76.76 Heavy Engineering 933.37 133.40 62.96 Power 4.70 1516.19 1251.62 Infrastructure 6.36 As at 31-3-2019 5.96 258.30 2461.60 2938.11 Developmental Projects 351.39 860.12 Financial Services 512.16 667.31 IT & Technology Services 359.92 394.60 399.29 386.99 Hydrocarbon 202.16 Electrical & Automation [Note 42(c)] 1275.49 2017-18 Investment in associates and joint ventures accounted applying equity method included in segment assets Inter-segment (15.40) 0.70 (392.85) 2.98 (420.46) (38.29) 17.29 6314.10 (236.90) 7756.87 (297.87) 518.66 629.65 Unallocable 402.09 618.38 Segment Total (90.38) 6.24 5449.67 627.53 6859.46 599.54 (347.45) 2018-19 (255.08) Consolidated Total crore Additions to non-current assets Particulars (a) Information about Reportable segments (contd.) NOTE [46] Notes forming part of the Consolidated Financial Statements (contd.) NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 498 497 (435.86) (21.00) (57.46) 6019.74 7385.63 665.67 900.58 (73.37) 0.54 53.62 Others Unallocable 35096.97 Foreign countries 2113.39 1680.43 Total 40762.03 36777.40 (c) Revenue contributed by any single customer in any of the operating segments, whether reportable or otherwise, does not exceed ten percent of the group's total revenue. (d) The group's reportable segments are organized based on the nature of products and services offered by these segments. 3866.38 6306.93 4485.12 3031.69 8053.68 38648.64 6575.22 India 31-3-2019 1672.07 271.20 2174.35 4146.69 5335.10 14549.58 8429.36 45109.04 39699.32 141007.09 119862.10 crore Non-current Assets Particulars As at As at 31-3-2018 Segment Total 7355.33 Total (a+b) (74.61) 6639.65 7474.60 (105.29) 0.56 1310.94 20.73 2481.03 26.93 2641.45 0.84 457.28 228.58 6256.98 7351.31 410.14 629.99 b) Geographical Information Consolidated Total Inter-segment 2642.29 8826.86 2481.59 Particulars Total Foreign countries (b) Other countries Qatar Kuwait United Arab Emirates Sultanate of Oman Kingdom of Saudi Arabia United States of America Foreign countries (b): 80162.78 2017-18 95898.05 2018-19 Revenues by location of customers crore India (a) 7841.04 66.57 1.17 683.64 764.59 Infrastructure 2017-18 Non-cash expenses other than depreciation included in segment expense 2018-19 crore 2017-18 2018-19 Depreciation, amortization, impairment & obsolescence included in segment expense Particulars (a) Information about Reportable segments (contd.) NOTE [46] Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 183772.52 46.40 209933.16 22.86 47.16 161.63 Electrical & Automation [Note 42(c)] 0.95 2.59 141.44 134.03 Defence Engineering 1.06 2.19 87.47 44.95 Heavy Engineering 1.40 2.99 43.56 Power 152.74 243877.45 Consolidated Total assets/liabilities Others 11109.86 9560.38 30375.07 31191.27 Developmental Projects 76390.47 92973.64 86088.63 104842.19 Financial Services 2187.10 2575.96 7568.14 9647.21 9819.89 279134.07 10576.54 2975.92 (2409.97) (2260.34) (2409.97) (2260.34) Inter-segment assets/liabilities 28495.10 28049.54 14329.15 15890.10 Corporate unallocated assets/liabilities 157687.39 184143.96 231958.27 265504.31 Segment Total 3936.13 Others 6.37 Hydrocarbon 2017-18 2018-19 297.87 2017-18 2.95 6.37 2018-19 0.48 1.29 Defence Engineering Heavy Engineering Power Infrastructure Profit or (loss) of associates and joint ventures accounted applying equity method not included in segment result 2018-19 2017-18 * crore Finance costs included in segment expense Interest Income included in segment income 236.90 Particulars 0.96 183.60 (156.81) 0.40 0.06 Developmental Projects 4.04 215.74 286.25 Financial Services 5.20 IT & Technology Services 29.72 17.70 119.43 244.92 Hydrocarbon 5.29 6.61 [Note 42(c)] Electrical & Automation 2.44 164.45 (227.96) 3.85 Note: Impairment loss included in segment expense: Heavy Engineering Segment Nil (previous year: 31.88 crore), Developmental Projects Segment 127.94 crore (previous year: Nil), Other segment 2.08 crore (previous year: 27.69 crore) and Corporate Unallocated 146.93 crore (previous year: 84.32 crore). 157.97 Developmental Projects 29.43 68.15 51.23 49.01 Financial Services 8.47 7.25 244.43 251.34 IT & Technology Services 3.66 7.82 132.41 151.83 207.22 111.39 73.68 96.77 1928.73 38.42 12.75 202.71 175.47 2084.00 Consolidated Total Unallocable 72.97 145.22 1726.02 1908.53 Segment Total 1.29 1.46 115.42 Others Closing balance of the plan assets Fixed deposits Amount to be recognised as liability | | | | | | | | | 6 32.56 2.45 31.36 18.86 136.99 Total (1 to 11) (0.02) (0.01) (0.81) (1.19) 11 Amount capitalised out of the above 191.55 (0.30) 14.02 29.43 136.98 2017-18 2018-19 Pension plan Post-retirement medical benefit plan 2018-19 2017-18 2017-18 2018-19 2 1 Particulars Trust-managed provident fund plan crore NOTE [45] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 116.19 Gratuity plan 2018-19 2017-18 10 Translation adjustments (0.19) 21.00 28.77 (gains) - Others Re-measurement - Actuarial losses/ 69 55 (5.40) (18.86) (14.02) 5.74 Difference between actual return on plan assets and interest income Re-measurement - Actuarial losses/(gains) 4 280.26 116.19 $ (24.87) 10 Business Combination (34.82) 3.75 (2.76) Re-measurement - Effect of the limit in para 64(b) 9 1.29 Adjustment for earlier years 68 4.57 books 7 0.63 (0.70) 0.05 3.30 Past service cost Actuarial gain/(loss) not recognised in 136.98$ 314.71 (314.71) (280.26) I. 152.65 As at 31-3-2018 Pension plan Post-retirement medical benefit plan As at 31-3-2019 As at 31-3-2018 As at 31-3-2019 Gratuity plan As at 31-3-2019 crore 294.28 333.57 66.06 38.50 Actual return on plan assets 116.19 (iii) The changes in the present value of defined benefit obligation representing reconciliation of opening and closing balances thereof are as follows: 136.98 As at 31-3-2018 As at 31-3-2018 16.48 16.71 45.74 53.22 Add: Interest cost 326.68 3.14 Trust-managed provident fund plan As at 31-3-2019 234.55 21.51 134.31 149.50 Add: Current service cost 844.16 892.09 Opening balance of the present value of defined benefit obligation 222.16 20.01 Amount included in "employee benefits expense" 29.43 2.45 III. Amount included as part of "finance cost" 0.21 0.31 operating expenses" "manufacturing, construction and Amount included as part of 7.47 II. 136.98 3.68 3.77 22.60 21.76 140.83 116.19 32.56 0.47 14.67 31.36 136.99 191.55 Total (I+II+III+IV) 3.75 4.57 15.00 (34.82) (4.52) 31.12 comprehensive income" IV. Amount included as part of "Other 22.00 24.22 (5.40) (41.19) (44.24) Interest income on plan assets Trust-managed provident fund plan As at As at 31-3-2019 31-3-2018 Pension plan Post-retirement medical benefit plan As at As at As at As at As at As at 31-3-2019 31-3-2018 31-3-2019 31-3-2018 31-3-2019 31-3-2018 Particulars Gratuity plan crore A) Present value of defined benefit obligation - Wholly funded The amounts recognised in Balance Sheet are as follows: Defined contribution plans: Amount of 400.64 crore (previous year: 387.19 crore) is recognised as an expense. Out of above, *399.84 crore (previous year: 386.04 crore) is included in "employee benefit expense" [Note 37] in the Statement of Profit and Loss and 0.80 crore (previous year: 1.15 crore) has been capitalised. (a) Disclosure pursuant to Ind AS 19 "Employee Benefits" [Note 1(p)] NOTE [45] Notes forming part of the Consolidated Financial Statements (contd.) NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 (b) Defined Benefit plans: 490 753.52 254.53 3676.19 4128.60 3633.31 4090.42 326.68 14.84 -Wholly unfunded 326.68 3618.47 4090.42 676.92 215.17 241.63 892.09 241.63 610.99 649.28 Less: Fair value of plan assets 1008.05 222.16 337.28 222.16 337.28 Add: Amount not recognised as an asset (limit in para 64(b)) 489 Intangible assets have been recognised towards rights to charge the users of the utility | Rights & Obligations Renewal and termination Options Infrastructure return at the end of the concession period Funding from grantor Remuneration Period of the Concession Initial period of 36 years & 5 months and extendable by another 25 years at the option of the concessionaire subject to fulfilment of certain conditions under concession agreement. Fare collection Rights from the users of the Metro Rail System, license to use land provided by the government for constructing depots and for transit oriented development and earn lease rental income on such development and grant of viability gap fund. Viability Gap Funding of 1458 crore The Group has undertaken a project for construction, operation and maintenance of the Metro Rail System on Design-Build- Finance-Operate-Transfer (DBFOT) basis as per the concession agreement with the government authorities. The significant terms of the arrangement are as under- in inventory by 1748.47 crore, decrease in trade receivable by 22.02 crore and increase in deferred tax asset by 345.96 crore. (i) NOTE [44] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO Other (payables)/receivables Impact for the year: Profit after tax during the year is higher by 306.68 crore (net of tax) with a corresponding decrease in contract liability by 1319.06 crore, decrease in current tax liability by 19.07 crore, decrease in inventory by 656.66 crore, decrease in trade receivable by 148.53 crore, increase in other current asset by 5.17 crore and decrease in deferred tax assets by 231.43 crore. 387.33 crore (previous year: 469.10 crore) [included in Note 44 (a) above] Being DBFOT project, the project assets have to be transferred at the end of concession period Major obligations of the concessionaire are relating to - Construction revenue recognised Classification of Service Arrangement obligations relating to supply of electricity etc. (e) (d) obligations relating to competing facilities (c) providing reasonable assistance in obtaining access to all necessary infrastructure facilities and utilities Further extension of 25 years will be granted at the option of the concessionaire upon satisfaction of Key Performance Indicators laid under the concession agreement. This option is to be exercised by the concessionaire during the 33rd year of the initial concession period. Termination of the Concession Agreement can either be due to (a) Force Majeure (b) Non Political event (c) Indirect political event (d) Political event. On occurrence of any of the above events, the obligations, dispute resolution, termination payments etc are as detailed in the Concession Agreement. (b) providing reasonable support and assistance in procuring applicable permits required for construction Major obligations of the Government are - (e) operation and maintenance of the rolling stock and equipment necessary and sufficient for handling Users equivalent to 110% of the Average PHPDT etc. (d) maintenance of aesthetic quality of the Rail System (c) issuance of Golden Share to the Government (b) change in ownership (a) project agreements (a) providing required constructible right of way for construction of rail system and land required for construction of depots and transit oriented development. 3.24 4.78 3.38 -23 + 2018-19 2017-18 2018-19 Pension plan Post-retirement medical benefit plan Particulars Gratuity plan 1 crore # Liability for unfunded gratuity with respect to group(s) of assets classified as held for sale is included thereunder 301.13 209.04 308.36 226.66 Net liability/(asset) - Non-current 30.87 (ii) The amounts recognised in Statement of Profit and Loss are as follows: 46.23 Current service cost 134.31 3.68 22.00 3.14 24.22 16.48 16.71 45.74 53.22 149.50 Interest cost provident fund plan Trust-managed 2017-18 2018-19 2017-18 21.51 20.01 2018-19 2017-18 25.55 28.92 13.12 222.16 292.73 241.63 (6.85) (2.95) Assets 364.96 Liabilities 337.28 B) Amounts reflected in the Balance Sheet (34.80) 326.68 222.16 337.28 285.88 241.63 362.01 or (asset) (42.88) 326.68 46.33 33.83 14.97 285.88 362.01 Net liability/(asset) - current # 30.87 46.23 326.68 337.28 222.16 241.63 285.88 362.01 Net liability/(asset) (2.96) (0.10) 24.22 317.41 3.68 22.00 1.22 3318.32 Unquoted Quoted Total Unquoted Quoted As at 31-3-2018 Total As at 31-3-2019 Gratuity plan crore NOTE [45] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 0.29 Particulars 0.29 Special deposit scheme 1.49 Closing balance of the plan assets Other (payables)/receivables 147.80 147.80 163.17 163.17 1.49 Insurer managed fund 1.47 1.85 1.85 Fixed deposits 2.54 2.54 1.47 464.71 4.75 4.96 162.66 Debt instruments - Central Government bonds 182.45 99.91 82.54 193.00 162.66 193.00 16.51 16.51 15.81 15.81 Equity instruments 1.68 Debt instruments - Corporate bonds 4.75 128.18 Debt instruments - State Government bonds 4.96 17.08 9.88 7.20 Mutual funds Equity Mutual funds Debt 55.59 128.18 55.59 8.41 Debt instruments - Public Sector Unit bonds 66.35 66.35 77.63 77.63 8.41 1.65 184.57 1.65 649.28 3.17 Mutual funds Others Mutual funds Debt Mutual funds - Equity 1065.80 582.43 483.37 56.48 890.85 Debt instruments - Public Sector Unit bonds 748.92 0.18 748.74 988.14 988.14 890.85 Debt instruments - State Government bonds 75.28 85.69 Special deposit scheme 9.52 6.71 2.81 1.98 1.98 131.76 0.31 0.05 34.43 34.09 0.34 100.01 14.32 0.26 838.28 0.20 838.08 Unquoted Quoted Total As at 31-3-2018 As at 31-3-2019 Unquoted Quoted Total Cash and cash equivalents Trust-managed provident fund plan crore 610.99 312.45 298.54 3.17 Particulars 7.28 7.28 7.50 956.71 3633.31 Debt instruments - Central Government bonds 645.68 104.37 541.31 831.42 831.42 Debt instruments - Corporate bonds 0.01 0.01 0.06 0.06 Equity instruments 7.50 1.68 1.78 956.71 Cash and cash equivalents 0.19 6.28 (15.31) Add: Adjustment for earlier years Add/(less): Translation adjustments Closing balance of the present value of defined benefit obligation Add: Business combination/acquisition employees 5.49 Add: Liabilities assumed on transfer of (0.70) 3.30 Add: Past Service Cost (482.35) (20.16) (477.56) (21.96) 0.64 (12.02) (2.84) 7.56 Notes forming part of the Consolidated Financial Statements (contd.) NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 492 491 326.68 4090.42 3633.31 337.28 1.48 222.16 892.09 1008.05 1.49 105.86 128.71 0.52 241.63 (11.85) 19.23 11.96 i) Actuarial (gains)/losses arising from changes in demographic assumptions losses/(gains) Add/(less): Re-measurement - Actuarial iii) Transfer-in/(out) 295.03 352.78 6.32 ii) Employee i) Add: Contribution by plan participants 280.26 314.71 1.78 136.98$ 116.19$ Employer 19.82 (11.43) (30.16) (15.00) ii) Actuarial (gains)/losses 14.00 (2.37) 17.79 (168.71) (109.45) Less: Benefits paid 10.79 experience adjustments arising from changes in iii) Actuarial (gains)/losses (15.48) 7.60 8.40 (18.66) (16.61) financial assumptions arising from changes in NOTE [45] (contd.) (iv) Changes in the fair value of plan assets representing reconciliation of the opening and closing balances thereof are as follows: 11.66 The Group expects to fund 111.90 crore (previous year: 93.63 crore) towards its gratuity plan and 143.83 crore (previous year: 122.04 crore) towards its trust-managed provident fund plan during the year 2019-20. 4128.60 610.99 649.28 Closing balance of the plan assets (0.34) (0.16) 3676.19 (482.35) (0.16) Add: Adjustment for earlier years (477.56) (140.99) (95.18) Less: Benefits paid (4.43) 0.18 (3.70) Notes: The fair value of the plan assets under the trust managed provident fund plan has been determined at amounts based on their value at the time of redemption, assuming a constant rate of return to maturity. Basis used to determine interest income on plan assets: crore Total As at 31-3-2018 Unquoted Quoted Total As at 31-3-2019 Unquoted * Quoted Gratuity plan crore (v) The fair values of major categories of plan assets are as follows: Employer's contribution to provident fund. The Trusts formed by the Parent Company and a few subsidiaries manage the investments of provident funds and gratuity funds. Interest income on plan assets is determined by multiplying the fair value of the plan assets by the discount rate determined at the start of the annual reporting period. $ Particulars Add: Business combination/disposal (net) Less: Settlements 108.71 3348.38 280.26 314.71 41.19 44.24 3676.19 615.72 610.99 As at 31-3-2018 As at 31-3-2019 As at 31-3-2018 31-3-2019 As at Particulars Trust-managed provident fund plan Gratuity plan Add/(less): Re-measurement - Actuarial gains/(losses) Add/(less): Actuarial gains/(losses) Difference between actual return on plan assets and interest income (5.74) Opening balance of the fair value of the plan assets Add: Interest Income on plan assets* 18.86 24.87 128.98 334.82 Add: Contribution by plan participants Add/(less): Transfer in/(out) Add: Assets assumed on transfer of employees 132.76 116.32 95.13 Add: Contribution by the employer Add/(less): Actuarial gains/(losses) - Others 14.02 73.90 295.44 6.37 7.00 1.46 1.69 8.06 (f) Mr. M. V. Satish 5.54 7.43 1.95 6.51 5.86 1.52 7.38 (g) Mr. J.D. Patil* 1.71 8.22 3.14 0.81 (a) Mr. A.M. Naik (Group Chairman (e) Mr. D. K. Sen 3.95 Independent/Non Executive Directors: 9.38 9.79 As at 31-3-2018 7.96 11.58 56.80 ^ 9.21 19.38 ^^ 87.76 Chairman up to September 30, 2017) (b) Mr. S.N.Subrahmanyan 21.28 5.67 26.95 13.99 1.83 3.70 (c) Mr. R. Shankar Raman 14.06 3.75 17.81 9.16 2.42 11.58 (d) Mr. Shailendra Roy 9.16 2.33 11.49 17.69 3.00 # (c) 4.56 506 NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [47] (contd.) Amount due to/from related parties (including commitments): Sr. Category of balance/relationship/major parties No. (i) Accounts receivable Joint ventures, including: L&T-MHPS Boilers Private Limited L&T Infrastructure Development Projects Limited Krishnagiri Walajahpet Tollway Limited L&T Samakhiali Gandhidham Tollway Limited L&T Deccan Tollways Limited Associate: Total L&T-Chiyoda Limited (ii) Accounts payable including other payable crore As at 31-3-2019 Amount Amounts for major parties (a) Mr. A.M. Naik (Group Executive Amount Amounts for major parties 505 12.21 # Represents pension ^^ Represents encashment of past service accumulated leave 1.50 # 6.06 w.e.f. October 1, 2017) (b) Mr. Subramanian Sarma 14.00 14.00 11.28 11.28 (c) Other Independent/Non-Executive 6.20 6.20 4.79 4.79 Directors Total 93.39 19.87 113.26 78.69 70.27 19.38 168.34 A Includes gratuity * 55.04 crore Appointed w.e.f. July 1, 2017 Executive Directors: Total Total 21.66 L&T Samakhiali Gandhidham Tollway Limited (1.54) 0.01 Total (0.38) 22.69 (xix) Guarantees given on behalf of Joint venture : L&T-MHPS Turbine Generators Private Limited (xx) Rent deposit returned: Key management personnel: Mr. D.K. Sen Total (xxi) Contribution to post employment benefit plans 0.08 0.08 0.08 54.26 54.26 54.26 (A) Towards Employer's contribution to provident fund trusts, including: Larsen & Toubro Officers & Supervisory Staff Provident Fund 1.55 L&T-MHPS Boilers Private Limited 0.46 (0.33) 267.98 0.26 0.20 L&T Camp Facilities LLC 0.26 0.20 Total 112.12 107.10 (xvii) Amount written off as bad debts Joint venture: 143.11 PNG Tollway Limited 25.08 25.08 25.08 (xviii) Amount recognised/(reversed) in P&L as provision towards bad and doubtful debts (including expected credit loss on account of delay) Joint ventures, including: (0.38) 22.69 L&T Special Steels and Heavy Forgings Private Limited (0.09) (0.03) L&T Howden Private Limited Total term benefit 115.40 103.95 (175.00) (142.30) (32.70) Total (D) Towards Employer's contribution to superannuation trust: (175.00) 9.78 11.29 Larsen & Toubro Limited Senior Officers' Superannuation Scheme 9.78 11.29 Total 9.78 11.29 "Major parties" denote entities accounting for 10% or more of the aggregate for that category of transaction during respective period. (xxii) Compensation to Key Management Personnel (KMP): crore Key Management Personnel 2018-19 Short-term Post- employee employment benefits benefits Other Long term benefit Total Short-term employee employment benefits benefits 2017-18 Post- Other long Towards advance contribution to/(refund from) gratuity trusts: Larsen & Toubro Officers & Supervisors Gratuity Fund Larsen & Toubro Gratuity Fund (C) 24.06 59.56 Total 143.11 115.40 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [47] (contd.) * crore 2018-19 2017-18 Sr. Nature of transaction/relationship/major parties 130.58 No. Amount Amounts for major parties (B) Towards Employer's contribution to gratuity trusts, including: Larsen & Toubro Officers & Supervisors Gratuity Fund 59.56 24.06 43.35 5.01 L&T Hydrocarbon Engineering Ltd Group Gratuity Scheme L&T Technology Services Limited Employee Group Gratuity Scheme Total 0.85 13.03 9.86 7.63 Amount Amounts for major parties 297.84 L&T-Gulf Private Limited 86.91 Larsen & Toubro Gratuity Fund 11.22 8.75 Total 60.92 45.06 (C) Due to superannuation trust: 7.99 6.74 Larsen & Toubro Limited Senior Officers' Superannuation Scheme 7.99 6.74 Total 7.99 6.74 (viii) Capital commitment given Joint ventures: 34.07 0.13 L&T Special Steels and Heavy Forgings Private Limited L&T-MHPS Turbine Generators Private Limited 0.02 0.13 36.31 34.05 49.70 45.06 Mr. A. M. Naik Mr. S. N. Subrahmanyan Mr. R. Shankar Raman Mr. Shailendra Roy Mr. D. K. Sen Mr. M. V. Satish Mr. J.D. Patil Mr. Subramanian Sarma Total P66.27 (vii) Post-employment benefit plans (A) Due to provident fund trusts, including: 28.28 24.51 Larsen & Toubro Officers & Supervisory Staff Provident Fund 24.77 21.65 Total 28.28 24.51 (B) Due to gratuity trusts: 60.92 Larsen & Toubro Officers & Supervisors Gratuity Fund Total 34.07 0.13 205.99 115.07 186.89 111.24 607.51 1352.70 (x) Revenue commitment received Joint ventures, including: 88.31 L&T Infrastructure Development Projects Limited Krishnagiri Thopur Toll Road Limited L&T BPP Tollway Limited L&T Samakhiali Gandhidham Tollway Limited L&T Deccan Tollways Limited 76.10 13.70 13.63 20.43 13.08 15.24 L&T MBDA Missile Systems Limited 102.05 103.60 394.67 42.63 667.58 507 508 NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [47] (contd.) *crore Sr. Category of balance/relationship/major parties No. As at 31-3-2019 Amount Amounts for major parties As at 31-3-2018 Key management personnel, including: Amount Amounts for major parties Revenue commitment given Joint ventures, including: L&T-MHPS Boilers Private Limited L&T-MHPS Turbine Generators Private Limited L&T Howden Private Limited Associates, including: L&T-Chiyoda Limited Total 401.52 1237.63 207.56 (ix) 127.37 53.17 58.10 6.68 5.35 3.79 Total 1142.40 1167.37 (iii) Investment in debt securities [including preference shares (debt portion)] Joint ventures: 955.12 987.58 L&T Special Steels and Heavy Forgings Private Limited 213.17 217.73 L&T Infrastructure Development Projects Limited Kudgi Transmission Limited 253.06 260.36 488.89 509.49 Total 955.12 987.58 (iv) Magtorq Private Limited Loans & advances recoverable 15.45 L&T-Chiyoda Limited 40.70 42.68 0.05 38.19 75.62 33.22 0.01 0.15 0.01 0.15 267.99 297.99 Joint ventures, including: 1113.57 1148.30 L&T-MHPS Boilers Private Limited L&T-MHPS Turbine Generators Private Limited 463.50 506.61 276.49 700.47 Associates, including: 28.83 19.07 23.88 Joint ventures, including: 1852.69 1819.92 Category of balance/relationship/major parties No. (vi) Due to directors #: As at 31-3-2019 Amount Amounts for major parties As at 31-3-2018 Amount Amounts for major parties 66.27 58.10 1.75 11.77 18.60 11.58 12.15 7.39 7.05 5.32 4.20 5.19 6.00 4.50 5.30 2.28 Sr. crore NOTE [47] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) L&T Special Steels and Heavy Forgings Private Limited L&T Sapura Shipping Private Limited 1539.83 167.38 1400.00 191.60 Associates, including: 33.54 24.40 L&T Camp Facilities LLC L&T-Chiyoda Limited 19.56 11.54 18.54 6.26 Total 6.28 1886.23 (v) Advances received in the capacity of supplier of goods/services classified as "advances from customers" in the Balance Sheet Joint ventures, including: 7.15 17.00 L&T-MHPS Boilers Private Limited 6.97 17.00 Total 7.15 17.00 LARSEN & TOUBRO 1844.32 106.83 *w.e.f. October 1, 2017 (Group Executive Chairman till September 30, 2017) 106.90 17. Mr. Hemant Bhargava @ #w.e.f. July 1, 2017 (Whole-time Director till June 30, 2017) 8. Mrs. Sunita Sharma 10. Mr. Ajay Shankar 12. Mrs. Naina Lal Kidwai 14. Mr. Narayanan Kumar 16. Mr. Sushobhan Sarkar ### **Appointed w.e.f. July 1, 2017 ## Appointed w.e.f. July 1, 2017 @ Appointed w.e.f. May 28, 2018 (b) Disclosure of related party transactions: ### ceased w.e.f. May 2, 2018 Sr. Nature of transaction/relationship/major parties No. Purchase of goods & services (including commission paid) Joint ventures, including: L&T-MHPS Boilers Private Limited L&T-MHPS Turbine Generators Private Limited Associates, including: L&T-Chiyoda Limited Total crore Mr. Arvind Gupta ## 2018-19 15. 13. 2. Mr. R. Shankar Raman (Whole-time Director & Chief Financial Officer) 3. Mr. Shailendra Roy (Whole-time Director) 4. Mr. D. K. Sen (Whole-time Director) 6. Mr. J.D. Patil (Whole-time Director)** 5. Mr. M. V. Satish (Whole-time Director) (ii) Independent/Non-executive Directors: 1. Mr. A.M. Naik (Group Chairman)* 3. Mr. Subodh Bhargava 5. Mr. Vikram Singh Mehta 7. Mr. Akhilesh Krishna Gupta 9. Mr. Thomas Mathew T 2. Mr. M. M. Chitale 4. Mr. M. Damodaran 6. Mr. Adil Zainulbhai 11. Mr. Subramanian Sarma Mr. Sanjeev Aga Mr. S. N. Subrahmanyan (Chief Executive Officer and Managing Director)# 2017-18 Amount Amounts for major parties 184.98 438.79 (B) Reversal of sale of goods/contract revenue & services Joint ventures: 25.99 0.28 L&T Deccan Tollways Limited 23.86 L&T Samakhiali Gandhidham Tollway Limited 2.13 0.28 Total 25.99 0.28 501 502 NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [47] (contd.) Sr. Nature of transaction/relationship/major parties No. (!!!) Purchase/lease of property, plant and equipment Joint ventures: Total Amount Amounts for major parties 0.17 L&T-Chiyoda Limited 1210.35 1941.69 779.49 187.78 1385.93 362.45 162.15 156.61 154.52 149.50 1372.50 2098.30 (ii) (A) Sale of goods/contract revenue & services Joint ventures, including: 184.85 438.62 L&T-MHPS Boilers Private Limited L&T Infrastructure Development Projects Limited L&T Deccan Tollways Limited 168.41 7.67 194.04 134.85 87.37 Associate: 0.13 0.17 0.13 1. (i) Executive Directors: (iv) Name of Key Management Personnel (of the parent company) and their relatives with whom transactions were carried out during the year: LARSEN & TOUBRO 1. L&T-Chiyoda Limited 3. Magtorq Private Limited 5. LTIDPL INDVIT Services Limited@@ @ The Group has sold its stake on March 19, 2018 Feedback Infra Private Limited@ 2. 4. L&T Camp Facilities LLC 6. Larsen & Toubro Qatar & HBK Contracting Co. WLL @@w.e.f. August 14, 2018 (ii) Name of joint ventures with whom transactions were carried out during the year: Joint Venture Companies: 1. Larsen & Toubro Electromech LLC* 3. L&T-Sargent & Lundy Limited 5. L&T Halol-Shamlaji Tollway Limited 7. Krishnagiri Walajahpet Tollway Limited** Devihalli Hassan Tollway Limited** 9. 11. L&T Howden Private Limited 13. L&T Sapura Shipping Private Limited 15. L&T Sapura Offshore Private Limited 17. L&T-Gulf Private Limited 19. L&T-MHPS Boilers Private Limited 2. L&T Interstate Road Corridor Limited 4. Ahmedabad - Maliya Tollway Limited Notes forming part of the Consolidated Financial Statements (contd.) 6. L&T Chennai-Tada Tollway Limited 8. L&T BPP Tollway Limited** NOTE [46] (contd.) Operating segments are identified as those components of the group (a) that engage in business activities to earn revenues and incur expenses (including transactions with any of the group's other components); (b) whose operating results are regularly reviewed by the Group's Corporate Executive Management to make decisions about resource allocation and performance assessment; and (c) for which discrete financial information is available. Associate Companies: (i) Name of associates with whom transactions were carried out during the year : (a) List of related parties: Disclosure of related parties/related party transactions pursuant to Ind AS 24" Related Party Disclosures" NOTE [47] Notes forming part of the Consolidated Financial Statements (contd.) NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 500 499 Others segment includes realty, manufacture and sale of industrial valves, welding equipment and cutting tools (till the date of sale), manufacture, marketing and servicing of construction equipment and parts thereof, marketing and servicing of mining machinery and parts thereof, manufacture and sale of rubber processing machinery, mining and aviation. None of the businesses reported as part of others segment meet any of the quantitative thresholds for determining reportable segments for the year ended March 31, 2019. Developmental projects segment comprises development, operation and maintenance of basic infrastructure projects, toll and fare collection, power development, development and operation of port facilities (till the date of sale) and providing related advisory services. IT & Technology Services segment comprises information technology and integrated engineering services. Financial Services segment comprises rural finance, housing finance, wholesale finance, mutual fund and wealth management. Hydrocarbon segment comprises complete EPC solutions for the global Oil & Gas Industry from front-end design through detailed engineering, modular fabrication, procurement, project management, construction, installation and commissioning. Electrical & Automation segment comprises manufacture and sale of low and medium voltage switchgear components, custom built low and medium voltage switchboards, electronic energy meters/protection (relays) systems and control & automation products. Defence Engineering segment comprises design, development, prototyping, serial production, delivery, commissioning and through life-support of equipment, systems and platforms for Defence and Aerospace sectors. It also includes Defence Shipbuilding comprising design, construction, commissioning, repair/refit and upgrades of Naval and Coast Guard vessels. Heavy Engineering segment comprises manufacture and supply of custom designed, engineered critical equipment & systems to core sector industries like Fertiliser, Refinery, Petrochemical, Chemical, Oil & Gas and Thermal & Nuclear Power. Power segment comprises turnkey solutions for Coal-based and Gas-based thermal power plants including power generation equipment with associated systems and/or balance-of-plant packages. infrastructure, heavy civil infrastructure, power transmission & distribution, water and effluent treatment, smart world & communication projects and metallurgical & material handling systems. Infrastructure segment comprises engineering and construction of building and factories, transportation (iv) Segment composition (iii) Performance of a segment is measured based on segment profit (before interest and tax), as included in the internal management reports that are reviewed by the Group's Corporate Executive Management. The performance of financial services segment and finance lease activities of power development segment are measured based on segment profit (before tax) after deducting the interest expense. An operating segment is classified as Reportable segment if reported revenue (including inter-segment revenue) or absolute amount of result or assets exceed 10% or more of the combined total of all the operating segments. The group has nine reportable segments [described under "segment composition"] which are the group's independent businesses. The nature of products and services offered by these businesses are different and are managed separately given the different sets of technology and competency requirements. In arriving at the reportable segment, the seven operating segments have been aggregated and reported as "infrastructure segment" as these operating segments have similar economic characteristics in terms of long term average gross margins, nature of the products and services, type of customers, methods used to distribute the products and services and the nature of regulatory environment applicable to them. (ii) Reportable segments (e) Segment reporting: basis of identifying operating segments, reportable segments and definition of each reportable segment: (i) Basis of identifying Operating segments: 10. L&T Rajkot-Vadinar Tollway Limited 12. L&T Deccan Tollways Limited 14. L&T Samakhiali Gandhidham Tollway Limited 2. Larsen & Toubro Officers & Supervisory Staff Provident Fund Larsen & Toubro Limited Provident Fund of 1952 3. Larsen & Toubro Limited Provident Fund 4. L&T Kansbahal Officers & Supervisory Provident Fund 5. L&T Kansbahal Staff & Workmen Provident Fund 6. L&T Construction Equipment Provident Fund Trust 7. L&T Valves Employees Provident Fund Gratuity Trusts: 1. Larsen & Toubro Officers & Supervisors Gratuity Fund 2. Larsen & Toubro Gratuity Fund 3. L&T Technology Services Limited Employee Group Gratuity Scheme 4. L&T Shipbuilding Limited Employees Group Assurance Scheme 5. Nabha Power Limited Employees' Group Gratuity Assurance Scheme 6. L&T Hydrocarbon Engineering Ltd Group Gratuity Scheme Superannuation Trust 1. Larsen & Toubro Limited Senior Officers' Superannuation Scheme LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [47] (contd.) 1. (iii) Name of post-employment benefit plans with whom transactions were carried out during the year : Provident Fund Trusts: # Re-classified as associate w.e.f. August 14, 2018 on amendment of Articles of Association ** The Group has sold its stake on May 4, 2018 16. Kudgi Transmission Limited 18. L&T Sambalpur- Rourkela Tollway limited 20. L&T Infrastructure Development Projects Limited 21. L&T-MHPS Turbine Generators Private Limited 22. Panipat Elevated Corridor Limited 23. Raykal Aluminium Company Private Limited 24. Krishnagiri Thopur Toll Road Limited** 25. L&T-MHPS Turbine Generators Private Limited L&T Special Steels and Heavy Forgings Private Limited 27. PNG Tollway Limited Western Andhra Tollways Limited** 28. Vadodara Bharuch Tollway Limited 29. L&T Kobelco Machinery Private Limited 30. 31. LTIDPL INDVIT Services Limited# 32. L&T Transportation Infrastructure Limited L&T MBDA Missile Systems Limited 33. L&T Hydrocarbon Caspian LLC *Reclassified as subsidiary w.e.f. August 16, 2017 due to purchase of additional stake 26. L&T Special Steels and Heavy Forgings Private Limited L&T Sapura Shipping Private Limited L&T Kobelco Machinery Private Limited 1.62 2.17 1.35 1.97 4.13 5.28 Associate: 12.88 15.81 L&T-Chiyoda Limited 12.88 15.81 Total 20.59 25.75 (xii) Dividend received Joint ventures: L&T-MHPS Boilers Private Limited L&T-Sargent & Lundy Limited Associate: Feedback Infra Private Limited Total 19.44 L&T Infrastructure Development Projects Limited L&T Special Steels and Heavy Forgings Private Limited L&T Sapura Shipping Private Limited 19.44 9.94 (B) Charges recovered for deputation of employees to related parties Joint ventures, including: 8.04 8.81 Associates, including: 23.20 23.55 L&T-Chiyoda Limited 23.20 23.52 Key management personnel: 0.03 0.08 Mr. D. K. Sen 0.03 0.08 Total 102.63 115.91 (xi) (A) Charges incurred for deputation of employees from related parties Joint venture: L&T Infrastructure Development Projects Limited Total 0.04 0.04 0.04 7.71 11.94 7.50 0.66 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [47] (contd.) crore 2018-19 2017-18 Sr. Nature of transaction/relationship/major parties No. Amount Amounts for major parties Amount Amounts for major parties (xv) Interest paid to Joint venture: 1.81 L&T Infrastructure Development Projects Limited L&T-MHPS Turbine Generators Private Limited 33.06 33.06 Total 1.81 1.81 33.06 (xvi) Interest received from Joint ventures, including: 111.86 NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 504 503 0.50 0.66 0.66 (xiii) Commission received, including those under agency arrangements Joint ventures, including: 3.80 2.00 L&T Kobelco Machinery Private Limited 3.75 2.00 Total 3.80 L&T-MHPS Turbine Generators Private Limited 2.00 Joint ventures: 0.52 0.50 L&T-MHPS Boilers Private Limited 0.02 0.07 L&T-MHPS Turbine Generators Private Limited 0.50 0.43 Total 0.52 (xiv) Guarantee charges recovered from L&T Special Steels and Heavy Forgings Private Limited Associate: 13.60 L&T-Sargent & Lundy Limited 0.54 0.01 0.69 0.69 6.25 6.25 6.94 1.17 261.37 260.65 0.69 0.48 0.33 0.03 1.17 261.37 214.43 214.43 214.43 Total (vii) Inter-corporate deposits given/(repaid)-net Joint ventures: 55.86 392.76 0.12 L&T Special Steels and Heavy Forgings Private Limited L&T Sapura Shipping Private Limited 0.16 0.01 Total (iv) Sale of property, plant and equipment Joint venture: L&T-MHPS Boilers Private Limited Key management personnel: Mr. Shailendra Roy Total Investments including subscription to equity shares and preference shares (equity portion) Joint ventures, including: L&T Special Steels and Heavy Forgings Private Limited L&T-MHPS Turbine Generators Private Limited L&T MBDA Missile Systems Limited Total (vi) Subscription of preference share (debt portion) Joint venture: L&T Special Steels and Heavy Forgings Private Limited crore 2018-19 2017-18 Amount Amounts for major parties Amount Amounts for major parties 0.54 0.01 0.13 0.13 84.48 211.89 (28.62) NOTE [47] (contd.) crore 2018-19 2017-18 Sr. Nature of transaction/relationship/major parties No. Amount Amounts for major parties Amount Amounts for major parties (ix) Rent paid, including lease rentals under leasing arrangements Joint ventures, including: 1.24 L&T Special Steels and Heavy Forgings Private Limited 1.20 Total 1.24 (x) Rent received, overheads recovered and miscellaneous income Joint ventures, including: 79.40 92.28 L&T-MHPS Boilers Private Limited 35.10 40.99 Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 9.45 7.62 180.87 Total 55.86 392.76 (viii) Charges paid for miscellaneous services Joint ventures, including: 6.65 7.08 L&T-Sargent & Lundy Limited 4.92 4.27 11.77 L&T Sapura Shipping Private Limited 2.25 L&T-MHPS Boilers Private Limited 1.05 0.11 Associate: 0.97 2.37 L&T-Chiyoda Limited 0.97 2.37 Total 0.45 69.19 18.77 76.10 418.95 88.31 Total 2. The amount of outstanding balances as shown above are unsecured and will be settled/recovered in cash. Note: 1. All related party contracts/arrangements have been entered on arms' length basis. # includes commission due to other non-executive directors 4.54 crore (as at 31-3-2018: 3.79 crore) "Major parties" denote entities accounting for 10% or more of the aggregate for that category of balance during respective period. 508.34 456.24 89.39 28.93 427.31 508.34 Total L&T-MHPS Turbine Generators Private Limited 456.24 Joint ventures: (xi) Provision for doubtful debts on outstanding balances in respect of Joint ventures, including: 23.55 52.73 L&T-MHPS Boilers Private Limited 23.37 L&T-MHPS Boilers Private Limited PNG Tollway Limited 21.84 Total 23.55 52.73 (xii) Guarantees given on behalf of 25.08 Unused tax losses and unused tax credits for which no deferred tax asset is recognised in Balance sheet As at 31-3-2018 crore Particulars As at 31-3-2019 crore Expiry year Expiry year (301.15) - Amount of losses having expiry - Amount of losses having no expiry Tax losses (Capital loss) 3710.67 7082.48 3901.55 (c) (i) Tax losses (Business loss and unabsorbed depreciation) 27.48% (x) 3198.87 4343.34 Tax expense recognised during the year [(e)=(c)-(d)] (829.21) (751.82) Effective tax Rate [(f)=(e)/(a)] Total effect of tax adjustments [(i) to (x)] (f) (e) (114.53) (65.70) Tax effect on various other Items FY 2020-34 29.79% FY 2020-27 As at FY 2019-34 Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 3358.77 3275.17 Total 2335.48 2491.23 benefit) (b) Arising out of upward revaluation of tax base of assets (on account of indexation As at 31-3-2018 1023.29 783.94 Towards provision for diminution in value of investments (a) 31-3-2019 No. Particulars (226.15) Sr. crore (ii) Unrecognised deductible temporary differences for which no deferred tax asset is recognised in Balance Sheet 14505.58 14893.82 Total FY 2028-33 230.83 FY 2029-34 199.12 Unused tax credits [Minimum Alternate Tax (MAT) credit not recognised] FY 2019-26 2800.85 7176.81 4297.09 (228.35) (151.25) (10.64) (ii) Tax on expenses not tax deductible: Dividend income and interest on tax free bonds Tax on accounting profit [(c)=(a)*(b)] Tax on Income exempt from tax : (i) (d) (c) Corporate tax rate as per Income tax Act, 1961 (b) Profit before tax (a) Particulars Sr. No. (A) Corporate Social Responsibility expenses (b) Reconciliation of Income tax expense and accounting profit multiplied by domestic tax rate applicable in India: Notes forming part of the Consolidated Financial Statements (contd.) NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 512 511 (606.15) (606.15) 15.93 (112.72) 40.95 (13.87) 2.76 2.05 (7.61) NOTE [50] (contd.) crore 2018-19 2017-18 (viii) Effect on deferred tax due to change in Income tax rate (258.75) (321.18) 749.94 580.92 (vi) Tax effect of losses of current year on which no deferred tax benefit is recognised (vii) Effect of tax paid on foreign source income which is exempt from tax in India (19.4) (774.91) (v) Effect of previously unrecognised tax losses and unutilised tax credits used to reduce tax expense 257.28 168.15 (402.85) NOTE [50] (contd.) (iii) Weighted deduction on Research & Development expenditure and deduction u/s 80 IA (iv) Tax effect on impairment and fair valuation losses recognised on which deferred tax asset is not recognised 2.37 1.57 (C) Tax on employee perquisites borne by the Group 85.15 48.58 (B) Expenses in relation to exempt income 45.76 60.10 (937.39) (69.75) 4028.08 5095.16 34.608% 34.944% 14580.92 (ix) Effect of tax benefit on business combination under common control (d) Major components of Deferred Tax Liabilities and Deferred Tax Assets: income Deferred tax liabilities: 27.95 (13.18) property and intangible assets of property, plant & equipment, investment Difference between book base and tax base 40.08 (0.20) 51.49 1 (0.39) (10.82) settlement for tax purposes in the year of transfer/ (0.11) Loss on derivative transactions to be claimed (119.18) (283.03) (291.32) (2206.94) I (228.16) (565.68) Unutilised MAT credit (23.69) (95.49) Carried forward tax losses 54.78 8.01 (793.84) | 14.66 Other items giving rise to temporary differences Disclosure pursuant to Ind AS 103 "Business Combinations": NOTE [51] Notes forming part of the Consolidated Financial Statements (contd.) NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 514 513 (3107.80) (0.84) (0.20) (13.48) (2117.00) (606.15) (349.99) (20.14) (3418.93) (2754.92) 1178.83 951.58 Net deferred tax liability/(assets) Net Deferred tax (assets) Offsetting of deferred tax (assets) with deferred tax liabilities (4597.76) (1.66) (0.20) 44.28 (958.19) (1.66) (7.21) (93.49) (356.96) (279.24) (3706.50) (606.15) (287.44) (40.09) Deferred tax (assets): (219.63) (345.82) Unabsorbed depreciation (1.27) (52.40) settlement for tax purposes in the year of transfer/ Gain on derivative transactions to be offered 157.21 19.10 138.11 Disputed statutory liabilities paid and claimed as deduction for tax purposes but not debited to Statement of Profit and Loss 1663.57 (18.03) 1681.60 Difference between book base and tax base of property, plant & equipment, investment property and intangible assets 31-3-2019 through OCI) as at (assets) Reserve (other than 38.38 Exchange Deferred tax Difference liabilities/ (Credit) to Hedge to other due to acquisition/ comprehensive Effect Charge/(credit) crore disposal of Profit and Loss Charge/ (credit) to Statement Charge/ (credit) to Retained Earnings as at 31-3-2018 Deferred tax liabilities/ (assets) 124.93 Particulars 6.30 70.71 (237.65) Unpaid statutory liabilities | (249.19) 260.48 (2218.23) and contract assets Provision for doubtful debts, loans & advances Deferred tax (assets): (1178.83) 311.13 637.92 Net Deferred tax liabilities (951.58) tax (assets) Offsetting of deferred tax liabilities with deferred 1489.96 0.82 (57.76) 19.95 (62.55) 1589.50 Deferred tax liabilities: (401.53) 0.82 2.76 19.95 (69.92) (355.14) differences Other items giving rise to temporary (60.52) (18.33) (30.00) 9.31 0.06 0.28 0.14 Payable later than 5 years 0.02 0.02 Payable later than 1 year and not later than 5 years 23 0.06 As at 31-3-2018 Present value of minimum lease payments As at 31-3-2019 As at 31-3-2018 0.06 Payable not later than 1 year 0.20 1 As at Particulars Sr. No. Minimum Lease Payments crore The minimum lease rentals and the present value thereof in respect of assets acquired under finance leases are as follows: B. A. Assets acquired on finance lease comprises of plant & equipment and land. The leases have a primary period which is fixed and non-cancellable. The Group has an option to renew the lease for secondary period. Finance leases: (i) (b) Where the Group is a Lessee: 197.61 10.42 31-3-2019 Total 0.16 0.36 3 2 Payable not later than 1 year 1 No. Particulars Sr. (ii) The Group has taken certain assets on non-cancellable operating leases, the future minimum lease payments in respect of which are as follows: (i) The Group has taken various commercial premises and plant and equipment under cancellable operating leases. B. A. (ii) Operating leases: NOTE [48] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 510 509 Contingent Rent recognised in the Statement of Profit and Loss: Nil (previous year: Nil) C. 0.26 0.06 Present value of minimum lease payments 0.10 0.10 Less: Future Finance Charges 0.26 0.06 7.29 241.38 97.44 89.75 As at 31-3-2018 4814.95 5067.24 Receivable later than 1 year and not later than 5 years 2 As at 31-3-2018 307.42 247.96 1333.70 1252.22 Receivable not later than 1 year 1 As at 31-3-2019 As at 31-3-2018 31-3-2019 As at No. Particulars Present value of minimum lease payments Sr. Minimum Lease Payments crore The gross investment in these leases and the present value of minimum lease payments receivable are as under: Assets given under leases mainly include power plant where the Group has agreed to manufacture/construct an asset and convey, in substance, a right to the beneficiary to use the asset over a major part of its economic life, for a pre-determined consideration. Finance leases: (i) (a) Where the Group is a Lessor: Disclosure in respect of Leases pursuant to Ind AS 17 "Leases": NOTE [48] Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 1324.17 Payable later than 1 year and not later than 5 years Payable later than 5 years 937.55 Receivable later than 5 years As at 31-3-2019 88.69 145.40 crore Total Receivable later than 5 years 3 Receivable later than 1 year and not later than 5 years 2 Receivable not later than 1 year 1 No. Particulars Sr. The Group has given certain assets under non-cancellable operating lease, the future minimum lease payments receivable in respect of which are as follows: (ii) Operating leases: 9373.41 9067.70 Present value of minimum lease payments receivable 14026.98 12991.52 Less: Unearned finance income 9373.41 9067.70 23400.39 22059.22 Gross investment in lease (1+2+3) 8128.44 7495.57 17251.74 15739.76 3 0.52 Total As at 31-3-2019 (533.40) (349.99) (10.64) Effect on deferred tax balances due to the change in income tax rate (13.39) (0.27) Effect of previously unrecognised tax losses and tax offsets on which deferred tax benefit is recognised (509.37) (349.72) Tax expense on origination and reversal of temporary differences (ii) Deferred Tax: 3732.27 4693.33 Income tax expense/(income) reported in the consolidated statement of profit or loss [(i)+(ii)] 164.91 (42.62) (568.96) Effect of previously unrecognised tax losses and tax offsets used during the current year Tax expense in respect of earlier years 3609.98 5002.74 Current income tax expense (i) Current Income tax : (a) Profit and Loss section: Consolidated statement of Profit and Loss: Particulars Sr. No. 2017-18 2018-19 259.55 4343.34 3198.87 (b) Other Comprehensive Income Section: Income tax expense/(income) reported in retained earnings Deferred tax Income tax expense/(income) reported in the other comprehensive income [(i)+(ii)] (c) Retained earnings: On foreign currency translation On gain/(loss) on fair value of debt securities On mark-to-market gain/(loss) on cash flow hedges Net gain/(loss) on cost of hedging Reserve (B) Deferred tax expense/(income): (30.49) (0.49) 0.49 (87.87) On foreign currency translation (a) Acquisition of Graphene Group (88.36) On gain/(loss) on cash flow hedges other than mark to market (A) Current tax expense/(income): (ii) Items to be reclassified to profit or loss in subsequent periods: (0.13) 0.39 (0.13) 0.39 5.60 5.60 (11.37) (11.37) On re-measurement of defined benefit plans (B) Deferred tax expense/(income): On re-measurement of defined benefit plans (A) Current tax expense/(income): (i) Items not to be reclassified to profit or loss in subsequent periods: crore (a) Major components of tax expense/(income): Disclosure pursuant to Ind AS 12 "Income Taxes" NOTE [50] B 7369.86 8905.13 A 2017-18 2018-19 Diluted EPS Basic EPS (*) Weighted average number of equity shares outstanding Profit after tax as per accounts (crore) Particulars Basic EPS Basic and Diluted Earnings per share [EPS] computed in accordance with Ind AS 33 "Earnings per Share": D. Contingent rent recognised in the Statement of Profit and Loss: Nil (previous year: ₹ Nil) Lease rental expense in respect of operating leases: 583.10 crore (previous year: 425.48 crore) C. NOTE [49] There are no exceptional / restrictive covenants in the lease agreements The lease agreements provide for an option to the Group to renew the lease period at the end of the non- cancellable period. 918.91 1314.16 131.06 234.55 585.07 797.64 202.78 281.97 As at 31-3-2018 1,40,20,87,033 crore 1,40,06,13,951 63.51 Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 95,20,455 95,20,455 Weighted average number of potential equity shares on account of conversion of foreign currency convertible bonds 2017-18 2018-19 Particulars The following potential equity shares are anti-dilutive and are therefore excluded from the weighted average number of equity shares for the purpose of diluted earnings per share. 2.00 2.00 Face value per share (*) 52.49 63.40 A/D Diluted EPS (*) 35,69,417 1,40,41,83,368 24,57,688 1,40,45,44,721 D=B+C Weighted average number of equity shares outstanding for diluted EPS C Add: Weighted average number of potential equity shares on account of employee stock options 1,40,06,13,951 7369.86 8905.13 1,40,20,87,033 A B Weighted average number of equity shares outstanding Profit after tax as per accounts (crore) 52.62 A/B (16.50) 11639.16 Cash (A) 3.99 0.15 0.57 Total Liabilities 1.71 3.99 0.57 Net Assets acquired 1.69 4.25 3.98 (iii) Calculation of Goodwill: crore Purchase consideration: Cash (A) Ruletronics Systems Private Limited, India 2.84 6.32 Ruletronics Limited, UK Ruletronics Systems Inc, 1.41 0.42 Other current assets 2.17 5.70 0.85 10.24 4.51 Total Assets 5.96 Other current liabilities 10.31 Liabilities Non-current liabilities Deferred Tax Liability 0.02 Current liabilities Trade payables 0.28 1.42 4.55 USA 13.66 7.13 NOTE [51] (contd.) (iv) Goodwill is attributable to future growth of business out of synergies from this acquisition and assembled workforce. (v) The Group has recognised contingent consideration in accordance with the terms of the share purchase agreement. The maximum contingent consideration of 32.81 crore is payable to the promoters of Ruletronics upon achievement of the specified financial targets. The fair value of the contingent consideration is determined by assigning probabilities of achievement of targets. (vi) These entities have reported revenue of 7.56 crore and profit after tax of 0.34 crore from the date of acquisition till March 31, 2019. Had the entities been acquired from April 1, 2018, they would have reported revenue of 36.46 crore and profit after tax of 7.10 crore during 2018-19. (vii) Out of 13.12 crore trade receivables acquired, 6.95 crore have been collected during the year. (c) Acquisition of Nielsen+Partner Group (i) On February 01, 2019, the Group has acquired 100% stake in Nielsen+Partner Unternehmensberater GmbH, Germany, along-with its fully owned subsidiaries viz. Nielsen+Partner Unternehmensberater AG, Switzerland, Nielsen+Partner Pte. Ltd., Singapore, Nielsen+Partner S.A. Luxembourg, Nielsen&Partner Pty Ltd., Australia, Nielsen&Partner Co. Ltd., Thailand, operating in the IT & Technology Services (ii) Assets acquired and liabilities recognised on the date of acquisition are as follows: Assets Notes forming part of the Consolidated Financial Statements (contd.) Non-current assets Property, Plant & Equipment Other non-current assets Current assets Trade receivables Cash and bank balances Other current assets Total Assets Liabilities Customer Relationships NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 516 515 Deferred consideration payable over future years (B) 2.54 Present Value of Contingent consideration payable over future years (C) 15.48 12.92 Purchase consideration paid (D=A+B+C) 5.38 29.14 20.05 Less: Net assets acquired 4.25 6.32 3.98 Goodwill 1.13 22.82 16.07 0.27 3.64 0.40 Cash and bank balances 5.61 26.47 69.69 Liabilities Non-current liabilities Deferred Tax Liability 13.56 Other non-current Liabilities 8.68 0.39 Current liabilities Trade payables Other current liabilities Total Liabilities 0.79 15.31 16.10 30.05 13.95 12.18 43.22 2.33 (ii) On October 15, 2018, the Group has acquired 100% stake in Graphene Semiconductor Services Private Limited, a Bengaluru based company, along-with its fully owned subsidiary viz. Graphene Solutions PTE Ltd., Graphene Solutions SDN.BHD, Graphene Solutions Taiwan Limited and Seastar Labs Private limited, operating in the IT & Technology Services segment. Assets acquired and liabilities recognised on the date of acquisition are as follows: Assets Non-current assets Trade Names Customer Relationships Deferred Tax Assets Other non-current assets Current assets Trade receivables Cash and bank balances Other current assets Total Assets crore Graphene Semiconductor Services Private Limited (Consolidated) 3.86 35.52 1.51 39.64 Non-current liabilities Net Assets acquired Purchase consideration: Ruletronics Systems Private Limited, India Ruletronics Limited, UK Ruletronics Systems Inc, USA Assets Non-current assets Property, Plant & Equipment 0.26 0.07 0.04 crore Other non-current assets 0.26 0.07 0.04 Current assets Trade receivables 3.13 5.75 4.24 0.003 On February 01, 2019, the Group has acquired 100% stake in Ruletronics Systems Private Limited, India, Ruletronics Limited, UK and Ruletronics Systems Inc, USA, operating in the IT & Technology Services segment. (ii) Assets acquired and liabilities recognised on the date of acquisition are as follows: (i) (b) Acquisition of Ruletronics Group Contingent consideration payable over one year (B) Purchase consideration paid (C=A+B) Less: Net assets acquired Goodwill crore Graphene Semiconductor Services Private Limited (Consolidated) 66.72 11.50 78.22 39.64 38.58 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [51] (contd.) (iv) Goodwill is attributable to future growth of business out of synergies from this acquisition and assembled workforce. (v) The Group has recognised contingent consideration in accordance with terms of share purchase and subscription agreement. The maximum contingent consideration of 13.00 crore is payable to the promoters of Graphene upon achievement of specified financial targets. The fair value of contingent consideration is determined by assigning probabilities of achievement of the targets. (vi) These entities have reported revenue of 38.51 crore and profit after tax of 5.15 crore from the date of acquisition till March 31, 2019. Had the entities been acquired from April 1, 2018, they would have reported revenue of 84.20 crore and profit after tax of 11.30 crore during 2018-19. (vii) Trade receivables acquired have been substantially collected during the year. (iii) Calculation of Goodwill: Deferred Tax Liability 2.57 Trade payables Balance as at 1-4-2018 45.09 210.39 9.15 374.62 458.24 76.39 1173.88 1 Additional provision during the year 41.33 50.00 429.59 136.17 2.61 696.74 Provision used during the year (21.74) 37.04 -23 456 obligation constructive NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [53] Disclosure pursuant to Ind AS 37 "Provisions, Contingent Liabilities and Contingent Assets" (a) Movement in provisions: crore Sr. No. Product warranties Expected tax Particulars liability in respect of Litigation related obligations indirect taxes Class of provisions Contractual rectification cost- Construction contracts Provision Others* Total towards (4.13) 518 (58.78) Unused provision reversed during the period Particulars Break up of provisions: * includes liquidated damages/backwork charges adjusted against revenue/manufacturing, construction and operating expenses during the year. 1521.50 1.01 27.45 594.41 532.85 Balance as at 1-4-2018 59.53 63.71 7 Balance as at 31-3-2019 (1 to 6) 0.38 0.63 and change in discount rate Additional provision for unwinding of interest 35.67 23.73 243.55 Balance as at 31-3-2019 Note 24 0.93 (4.22) (4.04) Translation adjustments 6.91 (276.39) 5.03 (v) Constructive obligation represents losses absorbed by the group in a joint venture over and above the investments. (c) Disclosure in respect of contingent liabilities is given in Note 32. (iii) Provision for litigation related obligations represents liabilities that are expected to materialise in respect of matters in appeal. (iv) Contractual rectification cost represents the estimated cost the Group is likely to incur during defect liability period as per the contract obligations in respect of completed construction contracts accounted under Ind AS 115 "Revenue from contracts with customers". (ii) Expected tax liability in respect of indirect taxes represents mainly the differential sales tax liability on account of non- collection of declaration forms for the period prior to five years. Provision made as at March 31, 2019 represents the amount of the expected cost of meeting such obligations of rectification/ replacement. The timing of the outflows is expected to be within a period of five years from the date of Balance Sheet. Product warranties: The Group gives warranties on certain products and services, undertaking to repair or replace the items that fail to perform satisfactorily during the warranty period. (i) (b) Nature of provisions: 1521.50 1173.88 Total crore 1513.77 Current liabilities Note 31 1172.95 (84.65) 517 7.73 3.20 16.36 20.12 26.51 40.41 crore Nielsen+Partner (Consolidated) 186.37 35.11 221.48 40.41 181.07 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [51] (contd.) (iv) Goodwill is attributable to future growth of business out of synergies from this acquisition and assembled workforce. (v) The Group has recognised contingent consideration in accordance with the terms of the share purchase agreement. The maximum contingent consideration of ₹40.26 crore is payable to the promoters of Nielsen+Partner upon achievement of the specified financial targets. The fair value of the contingent consideration is determined by assigning probabilities of achievement of targets. (vi) These entities have reported revenue of 18.77 crore and profit after tax of ₹2.13 crore from the date of acquisition till March 31, 2019. Had the entities been acquired from April 1, 2018, they would have reported revenue of 119.18 crore and profit after tax of 19.00 crore during 2018-19. (vii) Out of 24.39 crore of trade receivables acquired, 16.31 crore have been collected during the year. NOTE [52] Disclosure pursuant to Ind AS 105 "Non-current Assets Held for Sale and Discontinued Operations": 3.76 (a) The Group has following non-current assets/disposal group recognised as held for sale as on March 31, 2019: 6.39 45.63 1461.97 Other current liabilities Total Liabilities Net Assets acquired (iii) Calculation of Goodwill: Purchase consideration: Cash (A) Present Value of Contingent consideration payable over future years (B) Purchase consideration paid (C=A+B) Less: Net assets acquired Goodwill crore Nielsen+Partner (Consolidated) 0.58 2.42 21.29 24.39 20.06 1.18 66.92 Assets/Disposal Group 18.29 Liabilities associated with group(s) of assets classified as held for sale: Provisions 0.48 Trade receivable 2.50 0.18 Other assets 6.24 44.45 Total Inventories 7.41 Tax liabilities (Net) Other liabilities Total 0.90 1.38 3.20 1459.69 Non-current Assets (L&T Financial Consultants Limited) 1512.43 0.58 | Cash and cash equivalents Reportable Segment Others (b) The Group has following non-current assets/disposal group recognised as held for sale as on March 31, 2018: Assets/Disposal Group Port operation (Marine Infrastructure Developer Private Limited) Non-current Assets (L&T Financial Consultants Limited) Current Assets (L&T Vision Ventures Limited) Other Intangible assets Developmental Projects Financial Services Others Particulars crore (c) The proposed sale are expected to be completed within 1 year from the respective reporting dates. (d) The details of assets/ disposal group classified as held for sale and liabilities associated thereto are as under: As at 31-3-2018 Current Assets (L&T Vision Ventures Limited) Group(s) of assets classified as held for sale: Property, Plant and Equipment 1.17 1464.24 As at 31-3-2019 Reportable Segment Financial services 2723.96 7685.66 2766.57 1031.65 1492.01 (2772.77) 8311.81 8900.61 7161.47 8333.92 831.78 crore 7830.35 Larsen & Toubro Infotech Non-current liabilities (e) Particulars Sub-total (C) Total [I]=(A+B+C) 781.30 90.86 128.76 (361.31) Limited (1274.50) As at 31-3-2018 3997.88 4838.98 Current liabilities (b) Current assets (a) 31-3-2019 As at (43.66) (4793.62) 848.11 31-3-2019 26583.43 Non-current assets (d) (ii) Unclaimed credit balances written back Net non-current assets (f)=(d) - (e) Net assets (g)=(c) + (f) Accumulated Non-Controlling Interest crore L&T Finance Limited L&T Finance Holdings Limited As at 31-3-2019 As at 31-3-2018 As at As at 31-3-2018 32026.49 22115.80 866.85 1251.80 20353.11 14635.77 1370.42 727.61 11673.38 7480.03 (503.57) 524.19 23810.66 22088.00 9182.03 7942.77 21256.22 (172.42) crore (i) Exchange difference gains/(losses) on revaluation or settlement of items denominated in foreign currency (trade payables, borrowing availed etc.) 137.91 (77.62) Gains/(losses) on fair valuation or sale of Loan (Financial Services) Gains/(losses) on fair valuation/settlement of derivative: 3. 2. 1. Gains/(losses) on fair valuation or sale of Investments 2017-18 2018-19 A. (i) Financial asset or financial liabilities mandatorily measured at fair value through profit and loss: Net gains/(losses) on financial assets and financial liabilities measured at fair value through Profit or Loss and amortised cost: I. No. Particulars Sr. (c) Items of income, expenses, gains or losses related to financial instruments: (2160.12) NOTE [57] (contd.) NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 528 527 150707.59 173719.89 1.47 334.30 554.37 1.78 23,29 164.12 185.85 23,29 170.18 Net current assets (c)=(a) - (b) Notes forming part of the Consolidated Financial Statements (contd.) (452.17) (30.73) 7.73 C. Financial liabilities measured at amortised cost: (2520.99) (957.75) (364.34) (477.26) (220.29) 438.15 Sub-total (B) (778.78) (803.87) (699.45) (1265.19) (b) Gains/(losses) on transfer of financial assets (non recourse) (a) Bad debts written off [net] (iv) Gains/(losses) on derecognition: (iii) Provision for impairment loss (other than ECL)[net] (a) Gains/(losses) on fair valuation or settlement of forward contracts not designated as cash flow hedges (ii) (Allowance)/reversal for expected credit loss during the year 471.76 (i) Exchange difference gains/(losses) on revaluation or settlement of items denominated in foreign currency (trade receivables, loans given etc.) Financial assets measured at amortised cost: B. (2228.97) 44.56 Sub-total (A) (125.74) (21.81) (c) Gains/(losses) on fair valuation or settlement of futures not designated as cash flow hedges 28.22 (1.65) (b) Gains/(losses) on fair valuation or settlement of embedded derivative contracts not designated as cash flow hedges 59.40 220.53 Particulars Limited Current assets (a) 413.30 519 520 NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [54] (contd.) (b) Disclosure of subsidiaries having material non-controlling interests: (i) Summarised Statement of Profit and Loss crore Particulars L&T Finance Limited 2018-19 L&T Finance Holdings Limited 2017-18 415.61 2018-19 Profit/(loss) for the year 6890.59 4930.71 481.73 845.93 116.26 267.79 2017-18 89.52 266.05 Other comprehensive income (1.38) (1.43) (0.32) 0.62 Total comprehensive income Revenue 844.55 Total 4 368.52 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [54] Disclosure pursuant to Ind AS 112 "Disclosure of Interest in other entities": Subsidiaries (a) Change in the Group's ownership interest in a subsidiary (without ceding control) (i) On account of divestment of part stake During the year 2018-19, the Group has sold 7.44% stake in Larsen & Toubro Infotech Limited and 8.43% stake in L&T Technology Services Limited. The proceeds on disposal of 3378.02 crore were received in cash. An amount of 417.19 crore (being the proportionate share of the carrying amount of the net assets of Larsen & Toubro Infotech Limited and L&T Technology Services Limited) has been transferred to non-controlling interests. The difference of 2960.83 crore between the consideration received and the increase in the non-controlling interests has been credited to retained earnings. During the year 2017-18, the Group has sold 0.61% stake in Larsen & Toubro Infotech Limited and 0.46% stake in L&T Technology Services Limited. The proceeds on disposal of 204.53 crore were received in cash. An amount of *9.48 crore (being the proportionate share of the carrying amount of the net assets of Larsen & Toubro Infotech Limited and L&T Technology Services Limited) has been transferred to non-controlling interests. The difference of 195.05 crore between the consideration received and the increase in the non-controlling interests has been credited to retained earnings. (ii) On account of dilution During the year 2018-19, the Group's continuing interest has reduced on account of dilution due to exercise of ESOPs by 0.10%, 0.72% and 1.33% in L&T Finance Holdings Limited, Larsen & Toubro Infotech Limited and L&T Technology Services Limited respectively. The proceeds on dilution of 22.13 crore were received in cash. An amount of 132.23 crore (being the proportionate share of the carrying amount of the net assets of L&T Finance Holdings Limited, Larsen & Toubro Infotech Limited and L&T Technology Services Limited) has been transferred to non-controlling interests. The difference of 110.10 crore between the increase in the non-controlling interests and the consideration received has been debited to retained earnings. During the year 2017-18, the Group's continuing interest has reduced on account of dilution due to exercise of ESOPS by 0.20%, 0.70% and 0.67% in L&T Finance Holdings Limited, Larsen & Toubro Infotech Limited and L&T Technology Services Limited respectively. The proceeds on dilution of 32.26 crore were received in cash. An amount of 147.18 crore (being the proportionate share of the carrying amount of the net assets of L&T Finance Holdings Limited, Larsen & Toubro Infotech Limited and L&T Technology Services Limited) has been transferred to non-controlling interests. The difference of 114.92 crore between the increase in the non-controlling interests and the consideration received has been debited to retained earnings. Additionally, during the year 2017-18, the Group's continuing interest has also reduced on account of dilution due to further issue of shares to Qualified Institution Buyer by 2.41% in L&T Finance Holdings Limited after considering the infusion by the Parent Company. The proceeds on dilution of 1455.79 crore were received in cash (including share warrant money). An amount of 1393.83 crore (being the proportionate share of the carrying amount of the net assets of L&T Finance Holdings Limited) has been transferred to non-controlling interests. The difference of 61.96 crore between the consideration received and increase in the non-controlling interests has been credited to retained earnings. (iii) The effect of divestment with ceding of control in subsidiary during the period is as under: crore Line item in Statement of Profit & Loss in which the gain/(loss) is recognised Larsen & Toubro Readymix and Asphalt Concrete Industries LLC Other operational income 273.40 Exceptional Items: 281.01 crore Current tax: 7.61 crore 3.16 Other income Sr. No. Name of company Effect on consolidated profit/(loss) after non- controlling interest 2018-19 2017-18 1 Marine Infrastructure Developer Private Limited 415.61 2 L&T Cutting Tools Limited 3 EWAC Alloys Limited 136.74 Exceptional Items Current liabilities (b) 114.83 266.67 489.38 Other comprehensive income 25.87 (99.41) (2.13) 21.69 Total comprehensive income 1500.93 1060.71 697.97 511.07 Effective % of non-controlling interest 25.20% 17.04% 700.10 21.12% Profit/(loss) allocated to non-controlling Interest (including consolidation adjustments) 314.13 166.99 118.82 50.05 Dividend (including dividend distribution tax) to non-controlling Interest 115.89 58.63 37.66 12.71 (ii) Summarised Balance Sheet 11.36% 267.47 1160.12 Profit/(loss) for the year Effective % of non-controlling interest 36.09% 35.99% 36.09% 35.99% Profit/(loss) allocated to non-controlling Interest (including consolidation adjustments) 539.68 281.64 (28.76) (39.34) Dividend (including dividend distribution tax) to non-controlling Interest 71.87 1475.06 52.16 Larsen & Toubro Infotech L&T Technology Services Particulars Limited Limited 2018-19 2017-18 2018-19 2017-18 Revenue 9016.17 7203.05 4781.37 3596.70 crore 23,29 Total (I+II+II+IV) Financial guarantee contracts Particulars L&T-MHPS Boilers Private Limited crore (c) Summarised Statement of Profit and Loss of material joint ventures: 65.14 1310.93 (127.58) 1274.81 604.69 737.16 Carrying amount (15.30) 458.24 594.41 6.83 Other adjusments Regrouped to provisions 33.30 Revenue Interest Income Depreciation and amortisation Finance cost (210.58) (18.82) (193.60) 607.52 (270.30) 241.47 (213.89) 279.96 33.30 Profit/(loss) from continuing operations (net of NCI) Profit/(loss) from discontinued operations (net of NCI) (905.61) 7.16 (329.58) L&T Infrastructure Development Projects Limited (consolidated) 2018-19 2017-18 1666.57 1760.54 29.71 (452.16) (1070.17) L&T Special Steels and Heavy Forgings Private Limited 2018-19 2017-18 2018-19 2017-18 2735.70 2966.52 210.83 127.87 20.26 19.22 0.12 0.16 (62.32) (58.63) (47.65) (49.28) (17.72) (21.25) (181.59) (179.22) (137.93) (126.70) Tax expense (36.97) (70.91) Profit/(loss) for the year (net of NCI) Parent's Investment in group companies (288.44) 1.21 311.61 Infusion during the year (0.02) 14.31 8.02 Other comprehensive income (net of NCI) (28.22) Dividend distributed during the year (including dividend tax) 1749.80 (404.18) 1349.86 588.70 As at 31-3-2018 As at 31-3-2019 As at As at 31-3-2018 31-3-2018 929.88 (598.57) (641.09) 241.47 (213.89) (270.30) 279.96 Profit/(loss) for the year (net of NCI) 24.71 (0.67) Amount adjusted against securities premium Equity component of other financial instruments Impairment 1325.49 1657.53 97.45% 1349.86 1692.98 (598.57) 74.00% 97.45% (442.94) (113.00) 1185.66 (812.48) 51.00% 74.00% 604.69 (601.24) Group's share Group's share in % Closing net assets 4.91 (93.70) Other adjustments (246.59) 70.00 1445.42 51.00% 737.16 279.96 241.47 (213.89) Other comprehensive income (net of NCI) 565.97 630.32 494.87 541.80 71.10 88.52 31-3-2018 31-3-2019 As at As at crore Particulars Total Material joint ventures Sub-total 2011.97 1915.62 2642.29 2481.59 The Group regularly reviews its foreign exchange forward and option positions and interest rate swaps, both on a standalone basis and in conjunction with its underlying foreign currency and interest rate related exposures. The Group follows cash flow hedge accounting for Highly Probable Forecasted Exposures (HPFE) hence the movement in mark to market (MTM) of the hedge contracts undertaken for such exposures is likely to be offset by contra movements in the underlying exposures values. However, till the point of time the HPFE becomes an on-balance sheet exposure, the changes in MTM of the hedge contracts will impact the Balance Sheet of the Group. Further, given the effective horizons of the Group's risk management activities which coincide with the durations of the projects under execution and could extend across 3-4 years and the business uncertainties associated with the timing and estimation of the project exposures, the recognition of the gains and losses related to these instruments may not always coincide with the timing of gains and losses related to the underlying economic exposures and, therefore, may affect the Group's financial condition and operating results. Hence, the Group monitors the potential risk arising out of the market factors like exchange rates, interest rates, price of traded investment products etc. on a regular basis. For on-balance sheet exposures, the Group monitors the risks on net unhedged exposures. Disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": Market risk management (a) Foreign exchange rate and interest rate risk: NOTE [56] (435.86) (21.00) (513.06) (87.11) Non-material joint ventures 77.20 58.53 48.39 18.67 17.72 2017-18 2018-19 crore 66.11 Non-material associates (f) Share in profit/(loss) of joint ventures/associates (net) Particulars As at crore (d) Financial Information in respect of individually not material joint venture/associate NOTE [55] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO (0.67) (404.85) Particulars 24.71 588.70 (270.30) 1.21 (269.09) 613.41 (0.02) (213.91) 14.31 255.78 287.98 Total comprehensive income (net of NCI) 8.02 (404.18) 1185.66 31-3-2019 630.32 Total Material joint ventures Sub-total Non-material joint ventures Non-material associates (e) Carrying amount of investments in joint ventures/associates 88.73 Aggregate carrying amount of investment in individually not material joint venture/associate Aggregate amounts of the Group's share of: 48.31 11.53 (17.80) Other comprehensive income for the year 77.20 66.11 Profit/(loss) for the year As at 31-3-2018 565.98 | Total comprehensive income for the year (i) Foreign exchange rate risk: Opening net assets As at 31-3-2019 Cash flows from financing activities (2191.00) (260.20) 765.22 (1306.32) 753.42 (2145.81) Cash flows from investing activities 2017-18 2018-19 2017-18 (9028.02) (7517.73) Cash flows from operating activities 2018-19 Particulars L&T Finance Holdings Limited Net increase/decrease) in cash and cash equivalents 10845.39 1181.85 8328.44 530.33 2018-19 736.62 710.95 1247.49 2017-18 2018-19 L&T Technology Services Limited Larsen & Toubro Infotech Limited crore Net increase/decrease) in cash and cash equivalents Cash flows from investing activities Cash flows from operating activities Particulars crore 2461.93 10.73 (10.77) 53.84 Cash flows from financing activities (682.69) L&T Finance Limited NOTE [54] (contd.) 953.93 1044.07 1379.71 Non-current assets (d) 1199.44 1487.96 2712.88 3356.06 Net current assets (c)=(a) - (b) 611.54 1810.98 2271.41 783.45 1285.00 1482.92 As at 31-3-2018 767.70 Non-current liabilities (e) 22.32 38.37 Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 216.70 507.15 624.00 1177.75 Accumulated Non-Controlling Interest (iii) Summarised Statement of cash flows 765.90 1965.34 5.97 947.96 2435.92 3718.58 4713.45 Net assets (g)=(c) + (f) 1005.70 1357.39 Net non-current assets (f)=(d) - (e) 1.80 (249.52) (486.06) 2017-18 339.60 (165.60) (A+B-C-D-E) (E) 550.36 16.92 567.28 606.25 16.32 622.57 11.90 4.65 (D) 11.90 4.65 Net assets Non-controlling interest (NCI) Total non-current liabilities Other liabilities (including trade payables) Financial liabilities (excluding trade payables) Non-current liabilities 1445.42 1185.66 (812.48) (598.57) L&T Infrastructure Development Projects Limited (consolidated) crore L&T Special Steels and Heavy Forgings Private Limited Particulars L&T-MHPS Boilers Private Limited (b) Reconciliation of carrying amounts of material joint ventures: NOTE [55] (contd.) 1434.18 2184.58 2469.76 92.49 297.50 313.46 1526.67 2482.08 2783.22 Notes forming part of the Consolidated Financial Statements (contd.) 522 521 132.04 1349.86 18969.30 7137.86 11831.44 10690.79 434.73 11125.52 161.26 1692.98 NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 549.38 1585.44 2533.92 138.37 3083.30 1723.81 565.09 1918.24 2483.33 Total current liabilities As at 31-3-2018 As at 31-3-2019 L&T Infrastructure Development Projects Limited (consolidated) crore L&T Special Steels and Heavy Forgings Private Limited L&T-MHPS Boilers Private Limited Particulars As at 31-3-2019 Current assets Disclosure pursuant to Ind AS 112 "Disclosure of interest in other entities" - Joint Ventures and Associates NOTE [55] (98.50) 75.50 (202.14) 48.42 (407.49) 53.94 (30.37) (595.17) (a) Summarised Balance Sheet of material joint ventures: As at 31-3-2019 As at 31-3-2018 As at 31-3-2018 Other liabilities (including trade payables) Financial liabilities (excluding trade payables) Current liabilities 0.28 923.34 643.69 187.79 2739.12 3707.88 188.07 3662.46 4351.57 1307.31 11799.38 18882.85 0.15 278.67 278.82 1255.08 334.77 3371.25 3706.02 574.84 501.86 As at 31-3-2019 (B) 3431.54 (A) Total current assets 3112.87 Other assets 318.67 Cash and bank balances Total non-current assets (including Goodwill) L&T Technology Services In general, the Group is a net receiver of foreign currency. Accordingly, changes in exchange rates, and in particular a strengthening of the Indian Rupee, will negatively affect the Group's net sales and gross margins as expressed in Indian Rupee. There is a risk that the Group may have to adjust local currency product pricing due to competitive pressures when there have been significant volatility in foreign currency exchange rates. 523 6,12 (iii) Investment in mutual funds and units of fund 287.39 312.98 6,12 843.99 582.49 6,12 (ii) Investment in preference shares Investment in equity instruments Measured at fair value through Profit or Loss (FVTPL): (i) I. As at 31-3-2018 As at 31-3-2019 8990.10 4514.29 (ii) Investment in government securities, debentures and bonds 6,12 16836.61 24395.92 7,8,16,17 (viii) Loans 1016.88 791.07 6 Particulars 47.60 9,18 17.12 139.12 9,18 (v) Derivative instruments not designated as cash flow hedges (vi) Embedded derivatives not designated as cash flow hedges (vii) Investment in security receipts 1253.23 1523.26 28.40 Sub-total (I) Note crore 2900.10 Trade Receivables 2018-19 crore (v) Amounts written off: Closing balance [Refer Note 13] Write off as bad debts Additional provision Loss allowance based on ECL Changes in allowance for expected credit loss: Opening balance Particulars 228.11 (1127.93) 27.79 (141.88) 480.00 2017-18 2465.16 84.34 265.62 41.80 766.83 (a) Category-wise classification for applicable financial assets: Other disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": NOTE [57] Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 557.52 1531.86 Sr. No. Amount of financial assets written off during the period but still enforceable 2018-19 Particulars crore 2900.10 3000.83 (373.69) (249.23) 2017-18 36763.34 24817.11 II. 47.11 99.41 23,29 (ii) Embedded derivatives not designated as cash flow hedges Sub-total (1) 21.44 24.93 23,29 Derivative instruments not designated as cash flow hedges (i) Measured at Fair value through Profit or Loss (FVTPL): I. 31-3-2018 crore As at As at 31-3-2019 No. 124.34 68.55 II. Measured at amortised cost: Sub-total (III) (ii) Embedded derivatives designated as cash flow hedges Derivative instruments designated as cash flow hedges (i) IV. III. Derivative instruments (including embedded derivatives) through Other Comprehensive Income: 4981.81 150303.27 Particulars 37797.38 125555.17 42994.81 4489.42 173039.40 Sub-total (II) (iii) Others 22,26,27 28 (ii) Trade payables Borrowings (i) 107524.08 Note Sr. 8.72 5702.90 147606.29 3428.27 33116.98 37038.17 974.20 18 (iv) Advances recoverable in cash 13 84.94 (v) Cash and bank balances 1832.55 (ii) Investment in government securities, debentures and bonds (iii) Trade receivables 71981.52 78412.79 7,8,16,17 Loans (i) Measured at amortised cost: 6,12 3912.88 9,14,15 8353.04 17.50 5675.89 173201.43 9,18 4829.00 865.18 1212.86 9,18 4445.53 6,12 12217.35 (i) Investment in government securities, debentures and bonds Total (I+II+III) (iii) Derivative instruments designated as cash flow hedges (iv) Embedded derivative designated as cash flow hedges Sub-total (III) III. Measured at fair value through Other Comprehensive Income (FVTOCI): 121.53 117086.28 287.14 130762.20 Sub-total (II) (vi) Other receivables (b) Category-wise classification for applicable financial liabilities: The Group may enter into foreign currency forward and option contracts with financial institutions to protect against foreign exchange risks associated with certain existing assets and liabilities, certain firmly committed transactions, forecasted future cash flows and net investments in foreign subsidiaries. In addition, the Group has entered, and may enter in the future, into (iv) Reconciliation of allowance for expected credit loss on trade receivables (other than financial services business): financial assets 594.48 222.04 (527.50) (533.77) as cash flow hedge Options (written) not designated (1237.61) 586.94 cash flow hedge derivatives not designated as contracts and embedded with respect to forward Receivable/(payable) exposures probable forecast transactions 16327.53 (813.82) 102.09 firm commitments and highly 552.57 222.95 78.01 50.96 (179.21) (38.66) 538.14 974.77 11598.88 (1673.88) 49.17 51.14 659.25 As at 31-3-2019 Particulars crore The exposure of the Group's borrowing to interest rate changes at the end of the reporting period are as follows: currency debt on fixed rate basis, there is no interest rate risk. For the portion of local currency debt on floating rate basis, there is a natural hedge with receivables in respect of financial services business. There is a portion of debt that is linked to international interest rate benchmarks like LIBOR. The Group also hedges a portion of these risks by way of derivatives instruments like interest rate swaps and currency swaps. NOTE [56] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) 66.84 LARSEN & TOUBRO (ii) Interest rate risk: Actual future gains and losses associated with the Group's investment portfolio and derivative positions may differ materially from the sensitivity analysis performed as at March 31, 2019 due to the inherent limitations associated with predicting the timing and amount of changes in foreign currency exchange rates and the Group's actual exposures and position. To provide a meaningful assessment of the foreign currency risk associated with the Group's foreign currency derivative positions against off-balance sheet exposures and unhedged portion of on-balance sheet financial assets and liabilities, the Group uses a multi-currency correlated value-at-risk ("VAR") model. The VAR model uses a Monte Carlo simulation to generate thousands of random market price paths for foreign currencies against Indian Rupee taking into account the correlations between them. The VAR is the expected loss in value of the exposures due to overnight movement in spot exchange rates, at 95% confidence interval. The VAR model is not intended to represent actual losses but is used as a risk estimation tool. The model assumes normal market conditions and is a historical best fit model. Because the Group uses foreign currency instruments for hedging purposes, the loss in fair value incurred on those instruments are generally offset by increase in the fair value of the underlying exposures for on-balance sheet exposures. The overnight VAR for the Group at 95% confidence level is 106.11 crore as at March 31, 2019 and 59.93 crore as at March 31, 2018. (239.02) (1705.20) 31.73 1273.26 The Group's exposure to changes in interest rates relates primarily to the Group's outstanding floating rate debt and lending. The Group's outstanding debt in local currency is a combination of fixed rate and floating rate. For the portion of local As at 31-3-2018 (23.64) (10.43) US Dollar Kuwaiti Dinar Yen EURO Malaysian Canadian Japanese Ringgit Dollar including Particulars US Dollar As at 31-3-2019 crore The net exposure to foreign currency risk (based on notional amount) in respect of recognised financial assets and recognised financial liabilities and derivatives is as follows: non-designated foreign currency contracts to partially offset the foreign currency exchange gains and losses on its foreign denominated debt issuances. The Group's practice is to hedge a portion of its material net foreign exchange exposures with tenors in line with the project/business life cycle. However, the Group may choose not to hedge certain foreign exchange exposures for a variety of reasons. NOTE [56] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 524 including As at 31-3-2018 EURO Malaysian Canadian Japanese Ringgit Dollar Kuwaiti Yen 67.37 91.74 286.37 (5474.23) exposures with respect to receivable/(payable) Derivatives including embedded derivatives for hedging exposure with respect to non financial assets/(non financial liabilities) As at 31-3-2019 Derivatives including embedded derivatives for hedging receivable/(payable) financial assets/(recognised risk in respect of recognised Net exposure to foreign currency pegged currencies currencies pegged Dinar financial liabilities) Floating rate borrowings 49107.01 45476.71 (51.09) (64.69) life time ECL Transferred to and from 12-month ECL to 67.93 16.89 188.74 Provision on new financial assets 307.45 Loss allowance as on 1-4-2017 impaired 3865.51 Financial assets for which credit risk has increased significantly and credit crore impaired 143.92 Loss allowance measured at life time ECL Financial assets for which credit risk has increased significantly and credit not 115.78 Higher/(lower) provision on existing financial assets (151.69) Higher/(lower) provision on existing (2.59) (25.78) 28.36 life time ECL Transferred to and from 12-month ECL to 123.00 Loss allowance measured at 12-month ECL 33.49 Provision on new financial assets 4920.40 192.61 279.81 Loss allowance as on 31-3-2018 871.18 82.89 313.71 Particulars (iii) Reconciliation of loss allowance provision for financial services business -Loans: The Group's customer profile include public sector enterprises, state owned companies and large private corporates. Accordingly, the Group's customer credit risk is low. The Group's average project execution cycle is around 24 to 36 months. General payment terms include mobilisation advance, monthly progress payments with a credit period ranging from 45 to 90 days and certain retention money to be released at the end of the project. In some cases retentions are substituted with bank/ corporate guarantees. The Group has a detailed review mechanism of overdue customer receivables at various levels within organisation to ensure proper attention and focus for realization. (20.91) 20.91 20.44 (20.44) (25.77) 25.77 1.63 (1.63) (25.77) 25.77 1.63 (1.63) (20.44) 20.44 As at 31-3-2018 2017-18 2018-19 Particulars Impact on equity Impact on profit and loss after tax crore A hypothetical 50 basis point shift in respective currency LIBOR and other benchmarks on the unhedged loans would result in a corresponding increase/decrease in finance cost for the Group on a yearly basis as follows: As at 31-3-2019 Loss allowance as on 31-3-2019 (20.91) Indian Rupee Other than financial service business: in order to identify, mitigate and allocate risks as well as to enable risk-based pricing of assets. Regulatory and process risks are identified, mitigated and managed by a separate Group. Risk management policies are made under the guidance of Risk Management Committee and are approved by Board of Directors. NOTE [56] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 526 525 20.91 Financial services business has a risk management framework that monitors and ensures that the business lines operate within the defined risk appetite and risk tolerance levels as defined by the senior management. Risk Management function is closely involved in management and control of credit risk, portfolio monitoring, market risks including liquidity risk and operational risks. The credit risk function independently evaluates proposals based on well-established sector specific internal frameworks, (i) (c) Credit risk management: The Group's investment policy and strategy are focused on preservation of capital and supporting the Group's liquidity requirements. The Group uses a combination of internal and external management to execute its investment strategy and achieve its investment objectives. The Group typically invests in money market funds, large debt funds, Government of India securities, equity and equity marketable securities and other highly rated securities under a limits framework which governs the credit exposure to any one issuer as defined in its investment policy. The policy requires investments generally to be investment grade, with the primary objective of minimising the potential risk of principal loss. To provide a meaningful assessment of the price risk associated with the Group's investment portfolio, the Group performed a sensitivity analysis to determine the impact of change in prices of the securities that would have on the value of the investment portfolio assuming a 0.50% movement in debt funds and debt securities and a 5% movement in the NAV of the equity and equity marketable securities. Based on the investment position a hypothetical 0.50% change in the fair market value of debt securities would result in a value change of +/- 38.01 crore as at March 31, 2019 and +/- 24.17 crore as at March 31, 2018. A 5% change in the equity funds, NAV would result in a value change of +/- 39.16 crore as at March 31, 2019 and +/- 17.19 crore as at March 31, 2018 respectively. The investments in money market funds are for the purpose of liquidity management only and are held only overnight and hence not subject to any material price risk. The Group manages liquidity risk by maintaining sufficient cash and marketable securities and by having access to funding through an adequate amount of committed credit lines. Given the need to fund diverse businesses, the Group maintains flexibility in funding by maintaining availability under committed credit lines to meet obligations when due. Management regularly monitors the position of cash and cash equivalents vis-à-vis projections. Assessment of maturity profiles of financial assets and financial liabilities including debt financing plans and maintenance of Balance Sheet liquidity ratios are considered while reviewing the liquidity position. (b) Liquidity risk management: Interest rates -increase by 0.50% in USD interest rate* Interest rates -decrease by 0.50% in USD interest rate* Holding all other variables constant Interest rates -increase by 0.50% in INR interest rate* Interest rates -decrease by 0.50% in INR interest rate* US Dollar Financial service business: 162.25 (2966.34) 0.14% 2018: Increase/(decrease) in fair a by 0.25% would result in impact on profit or loss by 1.73 crore 2019: Increase/decrease in the NAV by 5% would result in impact on profit or loss by 31.87 crore 2018: Increase/decrease in the NAV by 5% would result in impact on profit or loss by 37.45 crore LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [57] (contd.) (i) Maturity profile of financial liabilities based on undiscounted cash flows: Particulars crore Note As at 31-3-2019 As at 31-3-2018 Within After Within After 2018: Increase/(decrease) in fair value by 0.25% would result in impact on profit or loss by 27.52 crore 2019: Increase/(decrease) in fair value by 0.25% would result in impact on profit or loss by 39.68 crore 2019: Increase/(decrease) in fair value by 0.25% would result in impact on profit or loss by 1.65 crore 2018: Increase/decrease in the fair value by 5% would result in impact on profit or loss by 3.21 crore 918.35 Expected yield Loans 24395.92 16836.61 Expected yield Other 979.86 1145.50 Net Assets Value (NAV) twelve Investments 2018: Increase/decrease of 5% in the book value would result in impact on profit or loss by 24.51 crore 2019: 1% change in net realization would result in +/- 0.32 crore (post tax-0.21 crore) 25 bps change in capitalization rate would result in +/- 0.63 crore (post tax- 0.41 crore) 2018 1% change in net realization would result in +/- 0.31 crore (post tax-0.20 crore) 25 bps change in capitalization rate would result in +/- 0.64 crore (post tax- 0.42 crore) 2018: Sensitivity is insignificant 2019: Increase/decrease in the fair value by 5% would result in impact on profit or loss by 4.74 crore 2019: Increase/decrease of 5% in the book value would result in impact on profit or loss by 18.02 crore 874.75 twelve twelve Forward contracts Embedded derivatives Total 23,29 384.74 23,29 147.05 14.14 142.08 398.88 289.13 176.76 21.99 198.75 136.50 89.29 225.79 B. Derivative liabilities: 84552.99 120178.76 84473.80 138382.90 35625.77 1158.22 42994.81 37031.46 765.92 37797.38 227.76 4489.42 3245.58 1736.23 4981.81 85859.78 185867.13 75902.81 87055.14 162957.95 4261.66 100007.35 twelve Total month month month month A. Non-derivative liabilities: Total Borrowings 53909.10 Trade payables 28 41836.59 Other financial liabilities 23,29 Total 22,26,27 Debt instruments 69.67 Expected yield 99.81 (4406.59) (14.05) (4995.09) Gains/(losses) recognised in Profit or Loss 14.37 (5.78) (32.25) (18.03) (41.69) Balance as at 31-3-2018 741.83 69.67 918.35 16836.61 1145.50 (407.93) (166.52) Disposal during the year 14172.84 (g) Movement of items measured using unobservable inputs (Level 3): crore Particulars Equity shares Balance as at 31-3-2017 752.53 Preference shares 75.45 19711.96 Addition during the year Debt instruments 1113.95 244.58 Loans 7900.36 13342.84 Other Investments 733.61 443.97 Total 10575.90 141.45 Addition during the year 565.76 Disposal during the year Fair value as at As at 31-3-2019 As at 31-3-2018 Significant unobservable inputs crore 476.98 656.51 Book value Sensitivity Particulars Equity shares 64.27 31-3-2019: 1. Net realization per month 30.90 per sq/ft. 2. Capitalisation rate 12.25% 31-3-2018: 1. Net realization per month 30 per sq/ft. 2. Capitalisation rate 12% 21.05 Cost Preference shares 65.58 531.79 (h) Sensitivity disclosure for level 3 fair value measurements: 979.86 (571.03) 11.19 (33.33) (6688.80) 14248.11 192.46 15017.52 (123.44) (7416.60) 26892.90 Gains/(losses) recognised in Profit or Loss (194.00) 542.56 30.14 99.81 (21.46) 874.75 (234.66) (419.98) 24395.92 Balance as at 31-3-2019 156.22 688.01 313.26 rate twelve twelve months months (crore) (crore) (b) Payable hedges US Dollar 13738.88 EURO 4472.40 70.57 12789.54 81.43 4338.30 949.34 134.10 13167.42 4957.31 After As at 31-3-2018 Average Within Nominal amount After twelve months (crore) (crore) 2.12 1.43 27.03 9.32 27.03 533 NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 67.43 Notes forming part of the Consolidated Financial Statements (contd.) As at 31-3-2019 Particulars Nominal amount (crore) Average Within rate twelve (₹) months (crore) NOTE [57] (contd.) 7475.81 5691.61 80.88 0.62 337.91 Kuwaiti Dinar Swiss Franc 531.77 232.14 531.77 337.91 760.92 760.92 302.59 72.69 302.59 417.42 74.49 417.42 219.15 1.43 183.54 0.66 4887.56 69.75 Arab Emirates Dirham 0.75 17.86 0.75 British Pound 877.42 71.10 71.10 75.61 91.99 51.53 24.08 Japanese Yen 1060.96 94.52 NOTE [57] (contd.) 16.91 16.91 (crore) (a) Receivable hedges US Dollar 24682.61 EURO 2373.28 Malaysian Ringgit Omani Riyal 113.99 230.00 Arab Emirates Dirham 1228.16 75.12 15833.62 84.81 1643.94 17.54 53.37 187.51 150.51 19.34 1228.16 8848.99 15955.20 729.34 1823.48 60.62 138.38 79.49 301.94 1414.98 69.64 10243.19 5712.01 85.20 1210.15 17.07 138.38 179.55 301.94 18.11 1411.17 613.33 3.81 (*crore) months months twelve 111.28 424.54 Details of outstanding hedge instruments for which hedge accounting is followed: Outstanding currency exchange rate hedge instruments: (i) (A) Forward covers taken to hedge exchange rate risk and accounted as cash flow hedge: As at 31-3-2019 Particulars Canadian Dollar Nominal amount (crore) (₹) Within After Nominal twelve twelve amount months months (crore) (crore) (crore) As at 31-3-2018 Average Within After rate twelve Average rate 56.96 56.96 56.96 222.57 Australian Dollar South African Rand Danish Krone Norwegian Krone Thai Baht Swedish Krona 341.46 25.90 25.90 102.69 5.40 102.69 9.87 12.34 9.87 56.32 9.39 33.77 0.65 222.73 1698.31 18.55 1253.61 British Pound Japanese Yen 87.48 1449.58 Kuwaiti Dinar 1524.52 Qatari Riyal 1551.27 889.42 Bangladesh Toka 96.64 0.88 21.04 96.74 87.48 0.68 1284.36 237.38 1232.40 19.72 1227.83 854.91 96.64 68.97 97.34 68.97 165.22 923.19 292.12 2039.77 323.44 1476.18 18.62 873.53 Chinese Yuan Notes forming part of the Consolidated Financial Statements (contd.) 532 amount Financial assets: Loans 7,8,16,17 62234.11 57890.20 61500.75 Government securities, debentures and bonds 6,12 Total 1832.55 64066.66 1899.07 59789.27 84.94 61585.69 56265.75 84.94 56350.69 Financial liabilities: amount Fair value As at 31-3-2018 Carrying Fair value Sub-total (C) (8787.88) Total [II] =(A+B+C) 4904.32 (15.48) (7251.21) 6121.02 529 530 Borrowings NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 NOTE [57] (contd.) (d) Fair value of financial assets and financial liabilities measured at amortised cost: (e) crore Particulars Note As at 31-3-2019 Carrying Notes forming part of the Consolidated Financial Statements (contd.) (0.06) Total 51252.31 51252.31 Level 2 Level 3 Total Valuation technique for level 3 items 8783.50 49106.70 57890.20 1899.07 1899.07 10682.57 49106.70 59789.27 Discounted cash flow Discounted cash flow 737.02 737.02 9360.96 41558.57 51656.55 9360.96 41558.57 51656.55 Discounted cash flow crore Level 1 Level 2 Level 3 Total As at 31-3-2018 Level 1 crore Total Borrowings 51656.55 51656.55 44982.93 45417.30 44982.93 45417.30 Notes: 1. 22,26,27 2. Disclosure pursuant to Ind AS 113 "Fair Value Measurement" - Fair value hierarchy of financial assets and financial liabilities measured at amortised cost: As at 31-3-2019 Financial assets: Loans Government securities, debentures and bonds Total Financial Liabilities: Carrying amount of Loans is gross of provsion for expected credit losses The carrying amounts of trade and other receivables, cash and cash equivalents, trade and other payables are considered to be the same as their fair values due to their short term nature. The carrying amounts of loans given and borrowings taken for short term or at floating rate of interest are considered to be close to the fair value. Accordingly these items have not been included in the above table. (266.60) (6969.13) (8528.80) (259.02) Sub-total (A) Less: 18.49 (82.38) (332.82) 507.00 B. Gains reclassified to Profit and Loss from Other Comprehensive Income (i) Financial assets measured at fair value through Other Comprehensive Income: 1. On government securities, bonds, debentures etc. upon sale (62.89) (5.70) (ii) Derivative measured at fair value through Other Comprehensive Income: 2. On forward contracts upon hedged future cash flows affecting the Profit and Loss or related assets or liabilities 355.28 (c) Gains/(losses) on fair valuation or settlement of embedded derivative contracts designated as cash flow hedges 640.56 (225.41) (b) Gains/(losses) on fair valuation or settlement of forward contracts designated as cash flow hedges LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [57] (contd.) crore 2018-19 2017-18 Sr. No. 434.30 Particulars Net gains/(losses) on financial assets and financial liabilities measured at fair value through Other Comprehensive Income: A. Gains recognised in Other Comprehensive Income: (i) Financial assets measured at fair value through Other Comprehensive Income: (a) Gains/(losses) on fair valuation or sale of government securities, bonds, debentures etc. (ii) Derivative measured at fair value through Other Comprehensive Income: (125.90) (51.18) II. 3. On embedded derivative contracts upon hedged future cash flows affecting the Profit and Loss or related assets or liabilities 15.42 (150.25) (i) Financial assets measured at amortised cost 10901.16 8789.81 (ii) Financial assets measured at fair value through Other Comprehensive Income 356.91 391.27 | (iii) Financial assets measured at fair value through Profit or Loss Interest Income: 2197.22 Sub-total (B) 13455.29 10624.15 C. Interest expense: (i) Financial liabilities measured at amortised cost (ii) Derivative instruments (including embeded derivatives) that are measured at fair value through Other Comprehensive Income (reclassified to Profit and Loss during the year) (iii) Financial liabilities measured at fair value through Profit or Loss 1443.07 Valuation technique for level 3 items B. 236.91 Sub-total (B) 307.81 278.35 Net gains recognised in Other Comprehensive Income [II]=[(A)-(B)] (640.63) 228.65 Total [II] = (A-B) 2748.08 (640.63) III. Interest and Other income/expense: A. Dividend Income: Dividend income from investments measured at FVTPL Sub-total (A) 236.91 2748.08 228.65 Financial assets: Loans Debentures and Bonds 865.18 865.18 cash flow hedges (iii) Embedded derivative financial instruments 9,18 17.50 17.50 8.72 8.72 designated as cash flow hedges Total 11631.46 3914.87 26892.90 42439.23 7762.00 3046.05 19711.96 30520.01 1212.86 1212.86 9,18 (ii) Derivative financial instruments designated as 28.40 47.60 47.60 979.86 24395.92 979.86 24395.92 1145.50 1145.50 16836.61 16836.61 Financial Liabilities: Financial assets at FVTOCI 6,7, 2133.84 2303.29 8.40 4445.53 2849.72 1889.70 89.58 4829.00 12 (i) Debt instruments viz. government securities, bonds and debentures Financial liabilities at FVTPL: (i) Designated at FVTPL: (a) Derivative instruments not designated as cash flow hedges 185.85 185.85 164.12 164.12 Total 678.71 678.71 (b) Embedded derivative financial instruments 23,29 designated as cash flow hedges 402.85 Valuation technique and key inputs used to determine fair value: A. Level 1: Mutual funds, bonds, debentures and government securities - quoted price in the active market B. Level 2: (a) Derivative Instruments - Present vaue technique using forward exchange rates at the end of reporting period. (b) Preference share and government securities, bonds and debentures - Future cash flows are discounted using G-sec rates as at reporting date. 531 402.85 17.12 designated as cash flow hedges 170.18 23,29 24.93 24.93 21.44 21.44 (b) Embedded derivative instruments not designated as cash flow hedges 23,29 170.18 99.41 47.11 47.11 (ii) Designated at FVTOCI: (a) Derivative financial instruments 23,29 368.52 368.52 99.41 NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 17.12 (viii) Loans (financial services business) Particulars Note As at 31-3-2019 As at 31-3-2018 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Financial assets: Financial assets at FVTPL: (i) Equity shares crore (f) Fair value hierarchy of financial assets and financial liabilities at fair value: NOTE [57] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Total 8989.57 47276.18 84.94 9074.51 47276.18 56265.75 84.94 56350.69 Discounted cash flow Discounted cash flow 6,12 Financial Liabilities: Total 811.49 811.49 9202.25 35403.56 45417.30 9202.25 35403.56 45417.30 Discounted cash flow Valuation technique Level 2: Future cash flows discounted using G-sec/LIBOR rates plus corporate spread. LARSEN & TOUBRO Borrowings 39.93 542.56 582.49 866.35 1523.26 424.46 828.77 1253.23 12 (v) Derivative instruments not designated as cash flow hedges 0.53 9,18 139.12 (vi) Embedded derivative instruments not 9,18 | 28.40 designated as cash flow hedges (vii) Other investments 139.12 8,17 656.38 (iv) Debt instruments viz. government securities, bonds and debentures 102.16 741.83 843.99 (ii) Preference shares 6,12 213.17 99.81 6,7, 312.98 69.67 287.40 (iii) Mutual fund 6,12 8801.31 8801.31 4385.66 4385.66 217.73 Swedish Krona Saudi Riyal Omani Riyal 87.48 42797.67 42885.15 52722.97 26.10 52749.07 537 538 Norwegian Krone Notes forming part of the Consolidated Financial Statements (contd.) NOTE [59] Additional information pursuant to Schedule III to the Companies Act, 2013 for the year ended 31-3-2019: Net Assets, i.e., total assets minus total Share in profit or (loss) Share in other comprehensive income Share in total comprehensive income Name of the entity Total non-current financial assets pledged as collateral Other assets Loans Investments Inventories and trade receivables 22.90 11865.78 11434.34 Cash and cash equivalents 682.92 1257.08 Loans liabilities As % of consolidated net assets 24703.11 Other assets 694.42 525.62 Total inventories and current financial assets pledged as collateral 37969.13 23736.35 Non-current: 10519.31 Amount (crore) As % of consolidated profit or loss Amount (crore) 14.15 0.03% 3.11 0.04% 3.11 Limited L&T Geostructure LLP 0.02% 0.24% 0.07% 150.69 44.01 0.60% 0.05% 53.19 4.52 0.62% 53.19 (0.03%) L&T Infrastructure Engineering Limited Investments Hi-Tech Rock Products and Aggregates Indian Subsidiaries As % of consolidated Amount (crore) As % of consolidated Amount (crore) other comprehensive income total comprehensive income Infrastructure: 84.25% 74.99% 6677.70 43.30% (118.63) 75.99% 6559.07 Parent Company Larsen and Toubro Limited 52550.72 0.07 Current: As at 31-3-2019 (n) Movement of hedging reserve and cost of hedging reserve: crore Hedging reserve 2018-19 2017-18 Opening balance 449.22 359.62 Changes in the spot element of the forward contracts which is designated as hedging instruments for time period related hedges 261.47 (4.49) Changes in fair value of forward contracts designated as hedging instruments (301.78) 719.83 Changes in fair value of swaps NOTE [57] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 203.70 Progress Billing (28.32) 441.59 Revenue from operations 69.08 331.25 Manufacturing, construction and operating expenses 59.82 (24.26) Finance costs (259.35) (267.43) Other Income 0.03 Sales, administration and other expenses 262.37 (166.29) (151.83) Amount reclassified to Profit or Loss Amount included in non-financial asset/liability (226.43) (5.33) 0.13 Amount reclassified to Profit or Loss Taxes related to above Closing balance NOTE [58] Changes in the forward element of the forward contracts where changes in spot element of forward contract is designated as hedging instruments for time period related hedges Less: Included in carrying amount of hedge item 252.95 (9.31) (0.52) 5.89 (11.45) Value of financial assets and inventories pledged as collateral for liabilities and/or commitments and/or contingent liabilities: crore Particulars 6.49 As at 31-3-2018 (12.09) Opening balance Amount included in Progress Billing in balance sheet Taxes related to above Closing balance (364.94) (211.57) 0.31 28.32 1.24 (11.45) (255.20) (8.38) 239.11 449.22 crore Cost of hedging reserve 2018-19 2017-18 106.69 Hedged expected future cash flows affecting profit or loss: 0.05% Heavy Engineering: 3.50% 302.27 L&T Infra Debt Fund Limited 1.70% 1061.22 1.48% 131.66 0.02% (0.05) 1.52% 131.61 L&T Infra Investment Partners Advisory 0.02% 11.21 (0.05%) (4.26) 0.27 (0.10%) 302.00 3.39% 82.45 0.37% 33.27 (0.05%) 0.14 0.39% 33.41 L&T Finance Holdings Limited (0.05%) 12.55% 7830.35 267.79 0.12% (0.32) 3.10% 267.47 L&T Housing Finance Limited 2.46% 1531.93 3.01% (4.26) Private Limited L&T Infra Investment Partners Trustee Private Limited 88.15 L&T Mutual Fund Trustee Limited 0.00% 1.43 0.00% (0.10) 0.00% 1.02% (0.10) L&T Financial Consultants Limited 0.11% 67.30 0.13% 11.93 0.01% (0.02) L&T Trustee Company Private Limited 0.13% (0.20) 88.35 0.00% 0.05 L&T Infrastructure Finance Company 6.30% 3930.38 2.60% 231.90 0.07% 0.19% 2.68% 231.38 Limited L&T Investment Management Limited 0.85% 527.23 0.99% (0.52) 4.59 L&T Capital Markets Limited 0.14 L&T Technology Services Limited L&T Thales Technology Services Private Limited 0.02% 7.56% 4713.45 3.91% 2435.92 10.61 16.56% 7.86% 0.12% 1475.06 (9.44%) 700.10 0.78% 10.67 (0.08%) 25.87 17.39% 1500.93 (2.13) 8.09% 697.97 0.21 0.13% 10.88 Larsen & Toubro Infotech Limited IT & Technology Services: 439.10 5.09% L&T Cassidian Limited Defence Engineering: L&T Shipbuilding Limited (1.96%) (1225.59) (4.66%) (415.10) (0.41%) 1.12 Syncordis Software Services India Private (4.80%) Hydrocarbon: L&T Hydrocarbon Engineering Limited 3.19% 1989.46 6.23% 554.74 42.21% (115.64) (413.98) 0.00% 2.01 0.01% 0.00% 0.11 Ruletronics Systems Private Limited 0.01% 3.82 0.00% (0.43) 0.11 Esencia Technologies India Private Limited 0.70 0.00% 0.14 │││ (0.01%) (0.43) 0.00% 0.00% Financial Services: 0.00% 0.00% 0.67 0.01% (0.02) 0.01% 0.65 Limited Graphene Semiconductor Services Private 0.21 0.03% 0.05% 4.70 (0.04%) 0.10 0.06% 4.80 Limited Seastar Labs Private Limited 21.32 (83.81) NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 109.03 (45.53) 0.34 51.07 19.34 51.07 187.39 17.43 187.39 (ii) Outstanding interest rate hedge instruments: Interest rate swaps taken to hedge interest rate risk and accounted as cash flow hedge: Nominal Particulars amount (crore) Floating interest rate borrowings 373.90 7.17 As at 31-3-2019 Average Within rate twelve (%) months (crore) 369.58 Saudi Riyal 116.68 20.91 116.68 months (*crore) (crore) Receivable: US Dollar 28.73 71.83 After Nominal twelve amount months (crore) (crore) 4.32 28.73 71.83 28.73 Arab Emirates Dirham 81.20 20.46 81.20 Qatati Riyals 28.73 months As at 31-3-2018 Average Within rate (₹) months (crore) twelve months (*crore) Nominal amount (*crore) As at 31-3-2018 Average Within After rate twelve twelve (₹) months months (*crore) (*crore) (crore) twelve rate After twelve twelve (%) months months (crore) (crore) 773.58 7.48 524.94 248.64 534 LARSEN & TOUBRO After Notes forming part of the Consolidated Financial Statements (contd.) (iii) Outstanding commodity price hedge instruments: Commodity forward Contract: Copper (Tn)* Particulars Nominal amount As at 31-3-2019 Average Within NOTE [57] (contd.) (₹) twelve twelve (B) Options taken to hedge exchange rate risk and accounted as cash flow hedge: As at 31-3-2019 Nominal Average Within Particulars amount rate twelve (crore) (₹) months (crore) After Nominal twelve amount months (crore) (crore) As at 31-3-2018 Average 40.53 54.04 40.53 28.71 Canadian Dollar 26.03 10.32 26.03 16.56 8.83 16.56 Within 5.20 5.20 8.02 8.74 7.00 1.02 28.71 180.36 9.16 After rate twelve 750.00 75 (C) Forward covers taken to hedge exchange rate risk and accounted as net investment hedge: Nominal As at 31-3-2019 Average Within After Nominal As at 31-3-2018 Average 750.00 67.69 to Within Particulars amount (crore) rate (₹) twelve twelve months months (crore) (crore) amount (crore) rate After (271.25) 514615.22 (271.25) US Dollars/Indian Rupees $ 1.25 twelve (₹) months months (crore) (crore) Receivable: Payable: US Dollars/Indian Rupees 11.91 * 74.94 EURO/US Dollars 632.65 $ 1.17 to 363.68 268.97 1422.50 71.13 to 202.04 148790.59 1422.50 (193.29) 486405.65 (193.29) 266.11 138402.62 266.11 exposure Commodity price exposure Currency As at 31-3-2018 Interest rate Commodity exposure exposure price exposure (i) Forward contracts Current: Asset Other financial assets 11.48 - Liability Other financial liabilities exposure Interest rate Currency Particulars 22.43 0.96 Asset Other financial assets 6.51 Liability Other financial liabilities I | | 0.11 55 536 NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [57] (contd.) (B) Net Investment hedge: crore As at 31-3-2019 535 Non-current: Asset Other financial assets 2.68 (0.88) 208.09 239.11 5.89 449.22 (11.45) (m) Reclassification of hedging reserve and cost of hedging reserve to Profit or Loss: (121.43) crore 2017-18 Particulars Future cash flows are no longer expected to occur: Revenue from operations Sales, administration and other expenses Other Income 202.04 2018-19 Non-current: (11.45) 6.77 (1) Breakup of cash flow hedging reserve and cost of hedging reserve: Particulars Balance towards continuing hedges Balance for which hedge accounting discontinued Total 14.63 2.15 241.13 0.91 As at 31-3-2019 Cash flow Cost of hedging Cash flow Cost of hedging hedging reserve 360.54 reserve hedging reserve reserve crore Asset Other financial assets Liability Other financial liabilities As at 31-3-2018 (iii) Option contracts Coking Coal (Tn) Zinc (Tn) Lead (Tn) *Negative nominal amount represents sell position. (k) Carrying amounts of hedge instruments for which hedge accounting is followed: (A) Cash flow hedge: Particulars crore Iron Ore (Tn) Currency exposure Commodity price Currency exposure As at 31-3-2018 Interest rate exposure Commodity price exposure As at 31-3-2019 Interest rate exposure exposure Aluminium (Tn) 10.99 160606.00 38.32 5469.41 Current: 29.47 8.85 60.65 4055.89 60.65 39.27 13631.02 10.99 29.26 33.91 11958.33 33.91 42.44 189480.24 42.44 19.76 222813.00 19.76 33.63 10.01 (i) Forward contracts 33.63 142435.43 Asset Other financial assets (0.48) 98.81 (ii) Swap contracts Current: Asset Other financial assets 49.11 66.58 219.76 (8.43) 12.57 Non-current: Asset Other financial assets 21.02 Current: (3.65) Liability Other financial liabilities Liability Other financial liabilities 109.95 0.88 396.77 (0.25) 25.18 Liability Other financial liabilities (0.40) 714.75 46.57 538.62 Liability Other financial liabilities 23.19 Non-current: Asset Other financial assets 56.94 366.37 (0.40) 197.60 Company Limited 31-Mar-19 INR Limited Private Limited Bridge- Engineering Services Engineering Private Limited Private 31-Mar-19 INR 31-Mar-19 Currency INR 31-Mar-19 INR 31-Mar-19 INR 31-Mar-19 INR Limited 31-Mar-19 INR financial year Equipment Limited Exchange rate on the last day of 31-Mar-19 INR Financial year ending on L&T Infra Contractors ធំ៖ L&T Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures crore SALIENT FEATURES OF THE FINANCIAL STATEMENTS OF SUBSIDIARIES/ASSOCIATE COMPANIES/JOINT VENTURES | ANNUAL REPORT 2018-19 Date of Acquisition Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] (contd.) Sr. No. 33 34 35 Sr. Particulars Ganges Hydrocarbon L&T L&T 36 L&T 37 38 39 40 no. Metro Rail (Hyderabad) Limited Technology Construction Infrastructure Services Limited L&T Thales Technology Sahibganj L&T 24-Aug-10* 3225.34 29-Jul-97* 09-Dec-98* 42.58 71.40 9886.94 0.01 Total equity and liabilities 15957.23 1412.90 86.59 82.01 11876.39 0.00 Total assets 15957.23 3225.34 1412.90 86.59 82.01 11876.39 0.00 Investments 547 Turnover 7 1050.80 789.42 13748.98 Liabilities 15-Feb-14 14-Jul-16* 02-Apr-09* 17-Mar-17* 1 Share capital (including share application money pending allotment) 2427.18 20.80 120.00 3.60 2.05 0.01 14-Jun-12* 1000.05 2 Other equity/Reserves and surplus (as applicable) (218.93) 2415.12 242.10 40.41 8.56 (0.01) 989.40 (0.02) 3456 0.01 100.00 2325.00 8 161.05 40.39 200.55 2 Other equity / Reserves and surplus (as applicable) 48.55 (28.30) 4.91 (144.75) 1141.48 (40.49) (201.55) 920.07 8 34567∞∞2-23 Liabilities 414.89 61.32 0.07 1.10 112.60 0.11 3112.70 0.05 2.10 18.75 8 Limited Financial year ending on 31-Mar-19 Currency INR Limited 31-Mar-19 INR 31-Mar-19 INR 31-Mar-19 INR Hydropower Limited 31-Mar-19 INR Hydropower Limited 31-Mar-19 INR 1.12 Hydropower Limited 31-Mar-19 INR 31-Mar-19 INR Exchange rate on the last day of financial year Date of Acquisition 16-Jun-11* 27-Dec-13 06-Apr-00* | 12-Sep-07* 13-Nov-06* 24-Jun-10* 22-Jun-10* 09-Apr-07 1 Share capital (including share application money pending allotment) Limited 100.00 8023.75 482.19 (6.26) 0.47 (148.09) 0.03 14 15 % of share holding Note: Date of incorporation 13 Proposed dividend - equity Proposed dividend - preference | | | | 2012 63.91 63.91 100.00 81 100.00 81 100.00 100.00 8၊ ၊ ၊ ၊ 8 8 8 (40.68) (201.27) 121.03 16.60 Profit before taxation 3968.04 6.78 35.12 5.03 2969.05 1415.13 0.01 0.12 11268.82 Total assets 482.19 35.12 5.03 Total equity and liabilities 2969.05 0.01 0.12 11268.82 Investments 4.26 0.01 2963.97 0.30 Turnover 81.06 0.75 1415.13 Profit before taxation Notes forming part of the Consolidated Financial Statements (contd.) Provision for taxation 0.05 3.53 543.58 43.26 3.82 293.33 Total assets 0.75 3.03 0.05 3.53 543.58 43.26 3.82 293.33 Investments 7 Turnover 1.59 7.08 3.43 94.07 164.79 3.03 6.71 0.75 46.71 0.00 - 193.28 2 Other equity / Reserves and surplus (as applicable) 0.69 1.57 (0.05) 2.23 353.80 17.80 3.34 53.34 345698 Liabilities 0.05 1.01 0.00 0.94 189.39 25.46 0.48 Total equity and liabilities 298.19 Profit before taxation 0.22 Interim dividend preference 13 Proposed dividend - equity 14 Proposed dividend - preference 15 % of share holding 78.88 74.80 100.00 81 (8.10) (31.79) 98.80 74.80 74.80 74.80 74.80 Note: Date of incorporation 548 LARSEN & TOUBRO Limited 12 Interim dividend equity 11 75.87 0.94 (0.05) 0.04 5.42 9.10 0.32 104.31 9 Provision for taxation 0.08 0.29 0.39 0.01 2.44 28.44 10 Profit after taxation 0.14 0.65 (0.05) 0.03 6.27 6.66 0.32 (0.85) 0.36 0.10 0.45 700.10 56.05 4.52 10.67 0.00 554.76 (0.01) Interim dividend equity (77.98) (318.00) (250.01) Interim dividend preference (60.90) Proposed dividend - equity 14 % of share holding Sr. No. Sr. Particulars no. (140.42) Proposed dividend - preference 100.00 (148.14) Profit after taxation 012315 292.59 752.40 92.75 7.11 2771.78 1629.04 4712.00 493.05 68.32 116.75 12694.83 (147.32) 78.88 941.45 6.92 12.81 0.00 847.35 (0.01) 0.82 241.35 (47.30) 2.40 2.14 0.00 8.75 9 100.00 58.37 & Toubro Infotech Canada Limited 31-Mar-19 CAD & Toubro Infotech LLC Financial Services Technologies Inc. 31-Mar-19 USD 31-Mar-19 CAD Exchange rate on the last day of financial year Date of Acquisition 31-May-17 11-Dec-17 24-Sept-18* 69.16 02-Jan-01* 77.67 14-Jun-99* 51.54 25-Apr-00 69.16 21-Jul-09* 51.54 01-Jan-11 1 Share capital (including share application money pending allotment) 0.01 31-Mar-19 EURO 31-Mar-19 USD 31-Mar-19 INR Infotech GmbH 100.00 100.00 41 42 Esencia Technologies Syncordis 43 LTR SSM Software India Private Services Private Limited 100.00 44 Larsen & Toubro LLC 46 Larsen 47 Larsen 100.00 48 L&T Infotech & Toubro Financial year ending on Currency 31-Mar-19 INR Limited India Private Limited 31-Mar-19 INR 45 Larsen Power (390.04) Arunachal 521.29 5.85% 769.06 1.23% Larsen & Toubro International FZE Others: (0.29) 0.00% (0.15) 0.06% L&T Global Holdings Limited 19.85 3.01 (1.10%) 16.84 (0.14) 0.00% 7.77 0.01% Thalest Limited 0.19% 527.84 0.85% 0.23% Tamco Switchgear (Malaysia) SDN BHD 0.65% 407.36 48840.69 (0.32) 0.12% 16.31 0.18% 76.73 0.12% L&T-Chiyoda Limited Indian Associates (1355.56) 3430.21 Total Subsidiaries 439.06 123.21 1.43% (398.08) (4.97) (521.42) (44.11) (15.71%) 16.10% 3951.63 (1311.45) (10.94%) (6826.11) (14.73%) Non-controlling Interest in all subsidiaries 145.29% 1.81% 444.03 4.99% 5.09% Ltd. (2.31) (0.08) (0.03%) 0.29% 8.54 (3.12%) 16.14 0.18% 166.45 0.27% L&T Electrical & Automation FZE Contracting company WLL (0.06) 24.68 0.00% 0.06% 0.10 0.00% (3.74) (0.01%) Kana Controls General Trading and (0.66) (0.04) (0.01%) 0.02% (0.62) (0.16) L&T Electricals & Automation Saudi (0.03%) (16.00) 0.03% (6.51) 0.42 (0.08%) (4.68) (2.89) (0.05%) 1.06% (1.79) (6.93) (0.16%) (2.23) (0.02%) (0.08%) 5.35 (0.03%) 0.01% Tamco Electrical Industries Australia Pty (24.65) (0.04%) Servowatch Systems Limited 2.90 0.01% PT. Tamco Indonesia Arabia company Limited LLC (3.62) (0.04%) (0.74) 0.27% (2.88) (0.03%) 0.19% 15.99 Gujarat Leather Industries Limited Magtorq Private Limited 23.22 0.26% 146.39 0.23% L&T-MHPS Turbine Generators Private 146.87 1.70% 4.09 (1.49%) 142.78 4.27% 1.60% 1.18% L&T-MHPS Boilers Private Limited Power: Indian Joint Ventures 16.83 (0.58) 17.41 83.18 Total Associates 0.91 737.16 (11.70) 0.13% 11.52 (601.24) (0.96%) L&T Special Steels and Heavy Forgings Private Limited Heavy Engineering: 6.85 0.08% 0.78 (0.28%) 6.07 0.07% 30.60 0.05% L&T-Sargent & Lundy Limited 9.71 0.11% (0.03) 0.01% 9.74 0.11% 45.38 0.07% L&T Howden Private Limited Limited 0.01% (12.30) (0.01%) (0.04) 0.95 As % of consolidated Amount (crore) As % of consolidated profit or loss Amount (crore) As % of consolidated net assets Name of the entity liabilities Share in total comprehensive income Share in other comprehensive income Share in profit or (loss) Amount (crore) Net Assets, i.e., total assets minus total Notes forming part of the Consolidated Financial Statements (contd.) NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 542 541 0.10 0.00% 0.10 0.00% 4.76 0.01% NOTE [59] (contd.) As % of consolidated Amount (crore) other comprehensive income 0.01% 4.93 0.01% L&T Camp Facilities LLC Co. WLL (0.22) 0.00% (0.22) 0.08% (3.63) (0.01%) Larsen & Toubro Qatar & HBK Contracting Foreign Associates 0.05 0.00% 0.05 0.00% 0.39 0.00% Magtorq Engineering Solutions Private Limited income comprehensive total 0.01% (0.02%) Henikwon Corporation SDN. BHD. Electrical & Automation: 0.01% 15.06 0.03% Nielsen+Partner Unternehmensberater income income comprehensive total other comprehensive (crore) 0.55 Amount Amount (*crore) As % of consolidated Amount (crore) As % of consolidated profit or loss Amount (*crore) As % of consolidated net assets Name of the entity liabilities Share in total comprehensive income Share in other comprehensive income As % of consolidated 0.17% (0.47) 0.00% 4.72 0.01% Nielsen+Partner S.A (0.14) 0.00% (0.46) 0.17% 0.32 0.00% 9.27 0.01% Nielsen+Partner Pte Ltd 0.61 0.01% (0.08) 0.03% 0.69 0.01% 2.06 0.00% Nielsen+Partner Unternehmensberater AG GmbH 0.08 Share in profit or (loss) 0.00% Net Assets, i.e., total assets minus total Notes forming part of the Consolidated Financial Statements (contd.) 0.08% 21.25 0.03% Syncordis S.A. (0.01%) (0.93) 0.18 0.00% 0.15 (0.05%) 6.71 0.03 2.59 (0.60) (0.01%) 0.00% L&T Infotech S. DE R.L. DE C.V. 0.01% Larsen & Toubro LLC 0.02 0.00% Larsen & Toubro Infotech Norge AS (0.81) (0.01%) 0.00% Syncordis SARL 0.00% 0.54 (0.05%) LARSEN & TOUBRO 0.98 0.01% (4.53) (0.05%) 0.07 (0.05) (4.85) 5.84 0.07% (0.92) (0.01%) 0.01 (0.87) (0.02) (0.06%) 0.32% 0.01% (0.03%) 0.02% 1.03 0.01% (4.60) (0.05%) (4.54) 1.15 0.00% Syncordis Support Services S.A. (0.01%) Syncordis Limited (4.83) NOTE [59] (contd.) (1.78%) 0.25 (0.22) Esencia Technologies Inc 0.17 (1669.59) 0.00% (0.07) 0.03% 0.24 0.00% 1.27 0.00% 0.00% Graphene Solutions Taiwan Limited 0.00% (0.01) 0.00% (0.01) 0.00% 0.17 0.00% Graphene Solutions SDN.BHD 0.04 0.00% (0.02) (0.72) 0.78% 69.05 (1.73) (0.02%) 0.46 (0.17%) (2.19) (0.02%) 5.60 0.01% L&T Realty FZE Realty: (2.10) (0.02%) (0.54) 0.20% (1.56) 1.17 (0.02%) 0.00% L&T Capital Markets (Middle East) Ltd Financial Services: 69.35 0.80% 0.30 (0.11%) (0.07) 0.08% 0.03% 0.00% 0.01% Ruletronics Limited 0.27 0.00% (0.02) 0.01% 0.29 0.00% 0.50 0.00% 6.66 Nielsen&Partner Pty Ltd 0.00% 0.14 (0.05%) 0.04 0.00% (0.19) 0.00% Nielsen&Partner Company Limited 0.03 0.00% 0.18 0.01% 0.57 0.08% 1.50 0.00% Graphene Solutions PTE Ltd. 80.31 0.93% 2.93 (1.07%) 0.87% 136.93 0.22% L&T Technology Services LLC 0.09 0.00% (0.11) 0.04% 0.20 0.00% 4.06 0.01% Ruletronics Systems Inc 0.35 0.00% (0.22) 0.11 (158.28) 0.00% (0.01) 12619.00 17865.34 (22.28) 2680.02 12641.28 7765.14 17865.34 (36942.20) 46903.46 2017-18 (14081.42) 2018-19 24181.62 NOTE [63] crore Repayments on account of liability classified as held for sale (b) Changes from financing cash flows (as above) (a) Proceeds from other borrowings (net) Proceeds from non-current borrowings Repayments of non-current borrowings Particulars Amounts reported in Statement of Cash Flows under financing activities: 125555.17 (331.74) (81.82) 5168.15 22210.54 1916.00 29223.84 Total changes from financing cash flows (a+b) Disclosure pursuant to Ind AS 20 "Accounting for Government Grants and Disclosure of Government Assistance": The Group's exports qualify for various export benefits offered in the form of duty credit scrips under foreign trade policy framed by Department General of Foreign Trade India (DGFT). Income accounted towards such export incentives amounts to 252.91 crore (previous year: 385.17 crore). NOTE [64] The Group has amounts due to suppliers under The Micro, Small and Medium Enterprises Development Act, 2006, [MSMED Act] as at March 31, 2019. The disclosure pursuant to the said Act is as under: LARSEN & TOUBRO 8.18 8.24 10.45 11.25 Interest accrued and remaining unpaid at the end of the year to suppliers under MSMED Act Amount of further interest remaining due and payable even in the succeeding years 5.68 0.38 Interest due and payable to suppliers under MSMED Act for payments already made 0.11 0.30 0.02 144.48 125.39 0.33 0.13 Interest accrued, due to suppliers under MSMED Act on the above amount, and unpaid Payment made to suppliers (other than interest) beyond the appointed day during the year Interest paid to suppliers under MSMED Act (other than Section 16) Interest paid to suppliers under MSMED Act (Section 16) 105.66 193.92 Principal amount due to suppliers under MSMED Act crore 2017-18 2018-19 Particulars 0.11 Notes forming part of the Consolidated Financial Statements (contd.) (250.03) (7084.15) 74120.79 11 61.33 (326.42) Interest accrued (net of interest paid) 58.62 (8.64) 56.03 11.23 rates Effect of changes in foreign exchange 12641.28 Other changes (transfer within categories) (4172.13) 14133.39 93953.95 10078.90 16534.47 67340.58 Total Current maturities of long term borrowings (note 27) (note 22) (note 26) borrowings 2680.02 (8244.02) 1135.32 8244.02 870.23 Other changes (transfer within categories) 10 Interest accrued (net of interest paid) 9 rates 497.49 240.30 210.74 46.45 Effect of changes in foreign exchange 8 17865.34 1606.44 7765.14 8493.76 Proceeds from Borrowings (net) 7 107524.08 15277.47 19331.85 72914.76 Balance as at 31-3-2018 6 Balance as at 31-3-2019 Proceeds from Borrowings (net) NOTE [65] crore Company Private Aggregates Limited L&T Realty 8 7 crore L&T Valves Limited and Steel Seawoods Limited Limited Rock Products & L&T Hi-Tech L&T Electricals and Automation Limited 31-Mar-19 INR 31-Mar-19 INR INR 31-Mar-19 Financial year ending on Currency Limited Company Limited Kesun Iron Limited 31-Mar-19 INR 31-Mar-19 INR Himachal applicable) Other equity/Reserves and surplus (as 2 47.16 18.00 0.01 1654.55 0.05 7.44 444.00 0.05 Share capital (including share application money pending allotment) 1 16-Jan-09* 23-Nov-61* 30-Nov-07* 01-Jan-08* 13-Mar-08* 11-Jul-95* 13-Nov-07* 12-Dec-07* Date of Acquisition financial year Exchange rate on the last day of 31-Mar-19 INR 31-Mar-19 INR 31-Mar-19 INR Supply The financial services business of the Group has changed its accounting policy in respect of provision for expected credit loss to adopt more prudent norms for determining stage 3 (credit impaired) assets and its classification of loans into at amortised cost or at fair value through profit or loss (FVTPL) or at fair value through other comprehensive income (FVTOCI). Accordingly, the Balance Sheet as at April 1, 2017 has been restated. The impact of the change amounting to 753.49 crore (net of tax) has been debited to the opening retained earnings as on April 1, 2017 as below. The impact on the financial results for 2017-18 is not material. Power Shipbuilding L&T (753.49) Net impact on retained earnings (Group share) 50029.93 49276.44 Other equity Equity and Liabilities (1177.06) Total 622.94 Deferred tax assets on additional ECL provision (1800.00) Additional provision as per expected credit loss (ECL) method on change in accounting policy 1736.15 Non-controlling interests 2359.10 70261.24 Impact of Remarks change March 31, 2017 April 1, 2017 As at As at Deferred tax assets (net) Loan towards financing activities Assets Particulars 72061.24 3140.03 3563.60 (423.57) Share of Non-controlling interests on additional ECL provision (net of tax) Bhilai Particulars Sr. 6 5 4 3 2 1 Sr. No. Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures SALIENT FEATURES OF THE FINANCIAL STATEMENTS OF SUBSIDIARIES/ASSOCIATE COMPANIES/JOINT VENTURES | ANNUAL REPORT 2018-19 545 Figures for the previous year have been regrouped/re-classified to conform to the figures of the current year. There are no amounts due and outstanding to be credited to Investor Education & Protection Fund as at March 31, 2019. NOTE [69] NOTE [68] The Board of Directors in its meeting held on May 10, 2019, has approved amalgamation of its wholly-owned subsidiary L&T Shipbuilding Limited ('LTSB') with the Company subject to receipt of regulatory and other approvals. NOTE [67] Subsequent to the year under review, the Company has divested its entire stake in L&T Kobelco Machinery Private Limited (part of Others Segment) to Kobe Steel, Ltd. on April 17, 2019. Since the criteria for classifying the said investment as held for sale is not met as at reporting date, the same has not been classified as held for sale in the consolidated financial statements. NOTE [66] (1177.06) Total no. (0.10) Balance as at 1-4-2017 Particulars Total Joint Ventures L&T Hydrocarbon Caspian LLC (0.11) 0.00% 0.09 (0.20) (0.03%) 0.00% (0.31) 0.00% Indiran Engineering Projects & Systems, Kish, (PJSC) CFS Adjustment and elimination Total Hydrocarbon: Limited (0.03) 0.00% (0.03) 0.00% 0.23 0.00% Raykal Aluminium Company Private Others: 6.23 Foreign Joint Ventures 2057.02 604.75 (55.04%) (34330.70) 62374.80 twelve Note Particulars Total As at 31-3-2018 After Within Total As at 31-3-2019 After Within Sr. No. crore (a) Current assets expected to be recovered within twelve months and after twelve months from the reporting date: Disclosure pursuant to Ind AS 1 "Presentation of financial statements": NOTE [60] Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 8631.14 (658.82) (7.63%) 639.41 34.66 376.09 (273.99) (1034.91) (137.27%) 8905.13 (11.62%) 0.07% twelve (0.04) 6.27 0.00% 300.73 0.48% L&T Sapura Shipping Private Limited (0.16) 0.00% (0.16) 0.00% 0.29 0.00% 0.40 L&T Sapura Offshore Private Limited (0.02) 0.00% (0.02) 0.00% 0.45 0.00% L&T MBDA Missile Systems Limited Defence Engineering: (158.29) (1.83%) Hydrocarbon: (6.31%) 17.28 0.20% 0.07% 26.70 0.04% L&T Kobelco Machinery Private Limited Others: Valves, Construction Equipment and 597.75 6.93% 24.20 573.55 (8.83%) 6.44% 1354.74 2.17% L&T Infrastructure Development Projects Limited (Consolidated) Developmental Projects: 1.41 0.02% 1.41 0.02% 15.90 0.03% L&T-Gulf Private Limited 17.68 0.01% 1 twelve months 3 29 Other financial liabilities 2 41583.63 28 Due to others 252.96 enterprises Due to micro enterprises and small Other current liabilities Trade payables : months months months months twelve twelve twelve twelve Note Total 1 30 4 Provisions 45 23 Non-current Current borrowings Sr. No. crore Disclosure pursuant to Ind AS 7 "Statement of Cash Flows" - Changes in Liabilities arising from financing activities: NOTE [62] Notes forming part of the Consolidated Financial Statements (contd.) NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS ANNUAL REPORT 2018-19 544 543 The Group has carried out an initial assessment of the impact of adopting this standard and there would not be any significant impact on the financial statements of the Group. Ind AS 116 "Leases" supersedes AS 17 "Leases" in respect of accounting periods commencing on or after April 1, 2019. Ind AS 116 sets out the principles for the recognition, measurement, presentation and disclosure of leases. Pursuant to transition methods permitted under Ind AS 116, the Group is proposing to use "modified retrospective approach" for transitioning to Ind AS 116 with effect from April 1, 2019. Under modified retrospective approach, cumulative effect of initially applying the accounting standard as at April 1, 2019 will be recognised as an adjustment to the opening balance of retained earnings of the financial year 2019-20 and figures for the financial year 2018-19 will not be restated as per the new accounting standard. With respect to existing leases as at the date of initial application of the accounting standard, the Group is proposing to use the practical expedient available on transition to Ind AS 116 and will not reassess whether a contract is or contains a lease and instead apply Ind AS 116 only to the contracts that were previously identified as lease applying Ind AS 17. On March 30, 2019, the Ministry of Corporate Affairs notified Ind AS 116 "Leases", applicable in respect of accounting periods commencing on or after April 1, 2019. Disclosure pursuant to Ind AS 8 "Accounting Policies, Changes in Accounting Estimates and Errors" on new Ind AS that has been issued but is not effective as of the closing day of the reporting period: NOTE [61] 196.53 2525.05 176.16 756.16 37621.22 31.83 5032.18 4750.97 27095.64 9.76 166.40 36865.06 5000.35 22344.67 2328.52 8.16 261.12 1150.06 42733.69 80.16 4815.08 4832.67 31166.55 173.04 3037.84 4734.92 26333.88 2864.80 31 After twelve Within As at 31-3-2018 16 36645.76 13 4847.80 973.83 3873.97 6413.93 1095.33 5318.60 11 625.59 5 Other current assets 4 Loans current 3 Trade receivables 2 Inventories 1 months months months Other financial assets 392.41 1.10 37038.17 32589.64 As at 31-3-2019 After Within crore No. Particulars Sr. (b) Current liabilities expected to be settled within twelve months and after twelve months from the reporting date: 47897.02 8947.69 38949.33 4194.41 4194.41 2006.28 52688.03 7370.50 2006.28 45317.53 19 18 559.72 3.34 556.38 626.69 33116.98 527.34 Total (0.40) 77.38 7.10 applicable) (0.03) (4.70) 5.21 (0.05) (11.68) 345 Liabilities 0.02 10.89 Other equity / Reserves and surplus (as 0.06 13.86 Total equity and liabilities (0.01) (0.01%) 6.24 5.32 0.00 47.78 4696.10 1513.15 6226.60 10048.88 5831.54 1366.57 0.00 2 165.37 1998.81 31-Mar-19 INR 31-Mar-19 INR 31-Mar-19 INR 31-Mar-19 INR 31-Mar-19 INR 31-Mar-19 INR 31-Mar-19 INR Exchange rate on the last day of financial year Date of Acquisition 14-Aug-08* 22-Dec-06* 09-Mar-06* 15-Apr-11* 06-Nov-09* 23-Dec-96* 01-May-08* 09-Oct-12 1 Share capital (including share application money pending allotment) 0.01 0.05 0.05 0.05 45.60 17.35 2218.53 INR 11559.29 Total assets 10 Profit after taxation (0.01) (0.02) 0.22 11 Interim dividend equity 12 Interim dividend preference 13 0.03 Proposed dividend- equity Proposed dividend - preference 15 % of share holding 100.00 68.00 81 99.99 5322 (2.05) 1959.75 14 Provision for taxation 9 0.25 0.00 6.24 5.32 0.00 47.78 6226.60 10048.88 13091.23 Investments 5.31 2260.06 9146.20 1617.18 7 Turnover 17.99 8907.20 482.11 1484.03 8 Profit before taxation (0.01) (0.02) 13091.23 304.03 Currency Financial year ending on Turnover 599.77 360.14 281.19 739.32 51.84 8 Profit before taxation (415.10) (2.44) 7 4.39 (0.00) (219.12) (828.32) 9 Provision for taxation 1.28 (24.31) (74.39) 7.36 10 20.99 43.45 33.86 299.80 0.29 556.27 83.81 Total equity and liabilities 1.12 2584.66 10.95 414.88 2778.04 0.02 995.31 335.24 Total assets 1.12 2584.66 10.95 414.88 2778.04 0.02 995.31 335.24 Investments 11.87 Profit after taxation 31-Mar-19 (415.10) 3.11 Vision Developers Ventures Limited 11 L&T Power Limited 12 L&T Cassidian Limited 13 L&T 14 Larsen 15 16 no. L&T Finance Aviation Services Private Limited Private & Toubro Infotech Limited Holdings Limited Housing Finance Limited Limited L&T L&T Vision Chennai Particulars 45.30 (0.00) (144.73) (835.68) 12345 15 11 Interim dividend equity Interim dividend preference Proposed dividend- equity Proposed dividend - preference % of share holding 99.90 97.00 100.00 100.00 100.00 95.00 100.00 100.00 Sr. No. 9 10 Sr. (2.44) 71.13 394.08 484.69 2817.18 728.56 6.52 0.03 Profit before taxation 1303.05 40.89 88.35 (0.08) 421.88 0.07 131.66 0.00 Provision for taxation 457.12 7.62 0.02 189.99 (1.64) (0.00) 10 Profit after taxation (5.91) 618.84 77.32 6890.59 28408.77 8606.39 12.71 0.06 Total assets 55837.16 99.62 604.37 1.49 28408.77 8606.39 12.71 0.06 Investments 4683.62 68.50 277.79 1.11 2080.54 167.04 8.23 0.03 Turnover 845.93 1.49 33.27 (0.10) no. 25 26 L&T Mudit 27 L&T Capital 28 29 30 31 Particulars 32 L&T L&T L&T Nabha Financial Cement Consultants Private Company Development Limited Uttaranchal L&T Power Sr. Sr. No. 63.91 231.89 131.66 (4.27) 0.00 11 Interim dividend equity (191.90) (30.22) 12 Interim dividend preference | I 13 Proposed dividend - equity 14 15 5 Proposed dividend - preference % of share holding 63.91 63.91 63.91 63.91 63.91 63.91 63.91 88.35 (0.55) 604.37 55837.16 19 20 21 22 L&T Finance Limited L&T Capital Markets Limited L&T Investment Management Limited L&T Mutual L&T 18 Fund Trustee Infrastructure Limited Finance 23 L&T Infra Investment 24 L&T Infra Investment Partners Partners Company Advisory Trustee Limited L&T Infra Debt Fund Limited 17 no. Particulars 36.97 92.07 (1.50) 1475.06 267.06 302.01 (216.84) (114.94) (268.94) (199.70) 100.00 100.00 74.80 63.91 63.91 Note: Date of incorporation 546 LARSEN & TOUBRO Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] (contd.) crore Sr. No. Sr. Private 99.62 Private Limited applicable) 7301.47 30.14 275.40 1.28 2675.06 571.04 6.21 (0.05) 8 Other equity/Reserves and surplus (as 9 Liabilities 46936.55 17.17 77.15 0.06 24478.41 7545.17 1.50 0.01 Total equity and liabilities 34567∞∞ 22 2 0.10 5.00 Financial year ending on 31-Mar-19 Currency INR 31-Mar-19 INR 31-Mar-19 INR 31-Mar-19 INR 31-Mar-19 INR 31-Mar-19 INR 31-Mar-19 INR 31-Mar-19 INR Exchange rate on the last day of financial year Date of Acquisition 31-Dec-12 07-Feb-13* 25-Apr-96* 30-Apr-96* 18-Apr-06* 19-Mar-13* | 30-May-11* 12-Aug-11* 1 Share capital (including share application money pending allotment) 1599.14 52.31 251.82 0.15 1255.30 490.18 Limited 400.73 0.00 3810.25 1.10 0.01% (0.01) 0.00% 1.11 0.01% 1.04 0.00% Larsen & Toubro (East Asia) Sdn.Bhd. Limited Hydrocarbon: (0.26) (0.48) 0.18% 0.22 0.00% 2.96 0.01% Larsen & Toubro T&D SA (Proprietary) 182.95 2.12% 19.84 0.00% Larsen & Toubro Heavy Engineering LLC (0.10%) (64.42) (0.47%) 163.10 1.89% 3.80% (10.42) 173.52 1.95% 97.59 0.16% L&T Modular Fabrication Yard LLC International Limited LLC (0.41) (0.01%) (0.14) 0.05% (0.27) 0.00% (2.72) 0.00% Larsen & Toubro Hydrocarbon (56.32) (0.65%) (14.22) 5.19% (42.10) (7.24%) L&T Overseas Projects Nigeria Limited 163.11 551.00 As % of consolidated profit or loss Amount (crore) As % of consolidated net assets Name of the entity liabilities Share in total comprehensive income Share in other comprehensive income Share in profit or (loss) Net Assets, i.e., total assets minus total NOTE [59] (contd.) Amount (crore) Notes forming part of the Consolidated Financial Statements (contd.) 540 539 (0.01) 0.00% (0.01) 0.00% (0.01) 0.00% L&T Infra Contractors Private Limited 0.47 NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS | ANNUAL REPORT 2018-19 As % of consolidated other comprehensive income Amount (crore) As % of consolidated 0.88% Larsen & Toubro Saudi Arabia LLC 0.02 0.00% 0.03 (0.01%) (0.01) 0.00% 0.50 0.00% Larsen & Toubro Qatar LLC (3.50) 20.61 (0.04%) (7.52%) (24.11) (0.27%) 383.25 0.62% Larsen & Toubro (Oman) LLC Infrastructure: Foreign Subsidiaries total comprehensive income Amount (crore) 1.83% 0.01% 0.00% 0.00% 0.01% Larsen and Toubro Infotech South Africa 3.34 0.01% Larsen & Toubro Infotech LLC 0.08% 17.68 0.03% Larsen & Toubro Infotech Canada Limited Technologies Inc. 3.12 77.54 2.06 (0.75%) 75.48 0.85% 245.78 0.39% L&T Infotech Financial Services (Shanghai) Co., Ltd. (0.01) 0.00% 0.90% 0.00% (0.01%) 6.76 0.01% 0.35 (0.06%) (1.24) 0.24% (0.02) 0.08% 1.94 5.16 (0.71%) (0.39) 0.00% (0.71) 0.04% 2.48 (0.01%) 0.00% L&T Information Technology Spain SL 0.00% 0.32 0.00% Larsen & Toubro Infotech Austria GmbH 0.06% 358.79 0.58% Larsen & Toubro Infotech GmbH (Proprietary) LTD (1.91) (0.02%) (0.67) 0.52 0.01% 0.17 6.74 0.08% (0.01) (0.02) 0.00% 0.00% 1.53 0.00% Larsen & Toubro Kuwait Construction (formerly known as Larsen & Toubro ATCO Saudi LLC) (5.23) (0.06%) (28.33) 10.34% 23.10 0.26% 0.03% (0.74%) (461.21) 6.52 0.08% 8.90% (24.38) 30.90 0.35% (0.63%) Larsen Toubro Arabia LLC (0.03) 0.00% (0.03) L&T Hydrocarbon Saudi Company 2.75 0.03% (0.08) L&T Information Technology Services IT & Technology Services: (0.17) 0.00% (0.17) 0.00% 0.12 8.92 L&T Hydrocarbon International FZE 42.85 0.50% (8.18) 2.98% 51.03 0.57% (73.82) (0.12%) Larsen & Toubro Electromech LLC Engineering Indonesia PT Larsen & Toubro Hydrocarbon General Contracting company WLL 2.67 0.03% (0.37) (1.51) 0.00% (0.01) (0.46%) (40.68) (0.10) (1.00) (2.26%) 0.00% L&T Himachal Hydropower Limited 0.00% L&T Arunachal Hydropower Limited Power Development: (52.96) (0.61%) (52.96) (201.27) (0.59%) Private Limited Sahibganj Ganges Bridge-Company (148.87) (1.73%) (0.72) 0.26% (148.15) 2208.24 (1.66%) 3.54% L&T Metro Rail (Hyderabad) Limited Marine Infrastructure Developer Private Limited L&T Power Development Limited 4.76% 2967.95 (1.66%) Chennai Vision Developers Private Limited Realty: 95.31 1.10% (1.11) 0.41% 96.42 1.08% 3245.07 5.20% Nabha Power Limited 0.03 0.00% 0.03 0.00% 1302.53 2.09% L&T Uttaranchal Hydropower Limited (1.72%) (148.12) (2.33%) (201.27) (0.47%) (40.68) | | | (148.12) Developmental Projects: 0.00% 12.51 12.51 As % of consolidated Amount (crore) As % of consolidated profit or loss Amount (*crore) As % of consolidated net assets Name of the entity liabilities Share in total comprehensive income Share in other comprehensive income Share in profit or (loss) Amount (crore) Net Assets, i.e., total assets minus total (5.41) 14.10 1052.36 (0.28) 421.04 204.27 3456 Liabilities (0.02%) 1.07 NOTE [59] (contd.) As % of consolidated Amount (*crore) other 0.14% 493.74 0.79% L&T Infra Investment Partners (The Fund) 844.55 9.78% (1.38) 0.50% 845.93 9.50% 8900.61 14.27% L&T Finance Limited (6.89) (0.08%) (6.89) (0.08%) (26.20) Mudit Cement Private Limited income income total comprehensive comprehensive 0.14% (0.02) (0.04%) (0.01) (3.14%) (1.63%) (144.74) 439.04 0.70% L&T Valves Limited 0.01 0.00% L&T Construction Machinery Limited 57.14 0.66% 8.59 1.09 56.05 0.63% 362.10 0.58% L&T Construction Equipment Limited Others: Valves, Construction Equipment and (2.44) (0.03%) (2.44) (0.40%) (1.58%) (136.15) Others: (1.50) 0.47 0.00% 0.00% 0.01% 4.96 0.01% L&T Capital Company Limited 33.92 (0.02%) 0.05% L&T Aviation Services Private Limited Limited (0.27) 0.00% Kesun Iron and Steel Company Private 0.22 0.00% 0.22 5.27 0.01% L&T Power Limited 0.05 0.00% Bhilai Power Supply Company Limited (0.03%) 2.03 0.00% L&T Electricals and Automation Limited (835.68) (9.68%) (835.68) (9.38%) 251.43 0.40% L&T Realty Limited 296.67 3.44% 296.67 3.33% 56.20 L&T Parel Project LLP (865.07) (10.02%) (865.07) (9.71%) (26.89) (0.04%) 0.00% L&T Asian Realty Project LLP 0.00% (0.01) L&T Westend Project LLP LTR SSM Private Limited 0.09% 0.05 0.00% (0.02) 0.00% Seawoods Realty Private Limited Seawoods Retail Private Limited (0.02) 0.00% (0.01%) L&T Vision Ventures Limited 45.22 0.52% (0.08) (4.65) 45.30 0.51% 2706.91 0.00% 4.34% L&T Seawoods Limited (0.05) 0.03% 0.00% (0.05) (0.76) (7.59) 10.89 Total No of shares 90,00,000 5,000 200 21,003 49.00% Extent of Holding % (effective) 17.51 21.74% 50.00% 4,40,58,020 144.47 0.18 0.21 2,450 100 50.00% 98,30,000 9,000 Amount of Investment in Associates/Joint Venture (crore) Reserves closing 4.50 4.33 4.42 Total Share capital (crore) 9.00 44.06 9.50 0.38 9.83 42.85% Part B: "Associates/Joint ventures" (contd.) Description of how there is significant influence Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Name Of Associates Sr No. 1 2 3 Sr. No. Latest audited Balance Sheet Date Date on which the Associate or Joint Venture was associated or acquired Shares of Associate/Joint Ventures held by the company at the year end Number Amount of Investment in Associates/Joint Venture (crore) Total Share capital (crore) 45,00,000 Reserves closing Total No of shares LARSEN & TOUBRO 4 Not Considered in Consolidation 1.23 Refer Note 1 5 Reason why the associate/joint venture is not consolidated 6 Net worth attributable to Shareholding as per latest audited Balance Sheet (crore) 76.73 13.39 4.28 (3.60) 4.76 7 Profit/ (Loss) for the year (crore) Considered in Consolidation 32.62 14.31 0.24 Number Seawoods Realty Private Limited Shares of Associate/Joint Ventures held by the L&T Trustee Company Private Limited c) Krishnagiri Thopur Toll Road Limited d) Western Andhra Tollways Limited Seawoods Retail Private Limited e) Krishnagiri Walajahpet Tollway Limited f) Devihalli Hassan Tollway Limited 593 553 554 SALIENT FEATURES OF THE FINANCIAL STATEMENTS OF SUBSIDIARIES/ASSOCIATE COMPANIES/JOINT VENTURES | ANNUAL REPORT 2018-19 Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures b) Part B: "Associates/Joint ventures” L&T IDPL Trustee Manager Pte. Ltd. Dissolved/struck-off: LTR SSM Private Limited 6 e) L&T Construction Machinery Limited f) L&T Hydrocarbon International FZE B) Names of subsidiaries which have been sold/dissolved/struck-off from the register of companies during the year: (i) Sold: a) Marine Infrastructure Developer Private Limited b) L&T BPP Tollway Limited (ii) a) company at the year end Sr. No. Sr 31-Dec-18 31-Dec-18 31-Mar-19 1 Latest audited Balance Sheet Date 31-Mar-19 2 Date on which the Associate or Joint Venture was associated or acquired 26-Oct-94 11-Feb-05 13-Sep-07 28-Jul-04 2-Aug-10 3 31-Mar-18 Name of Associates Co. WLL Qatar & HBK No. 1 2 3 4 5 L&T-Chiyoda International L&T Camp Larsen & Magtorq Limited Seaport (Haldia) Private Limited Facilities LLC Toubro Private Limited Contracting 7 6 Magtorq Engineering Solutions 3 Appoint Mr. M. V. Satish (DIN: 06393156) as a Director liable to retire by rotation. 4 Appoint Mr. Shailendra Roy (DIN: 02144836), as a Director liable to retire by rotation. 5 Appoint Mr. R. Shankar Raman (DIN: 00019798), as a Director liable to retire by rotation. Appoint Mr. J. D. Patil (DIN: 01252184), as a Director liable to retire by rotation. 7 Re-appoint Mr. M. M. Chitale (DIN: 00101004), as an Independent Director 8 Re-appoint Mr. M. Damodaran (DIN: 02106990), as an Independent Director and approve his continuation beyond the age of 75 years For Against 557 558 Dividend on equity shares for the financial year 2018-19. Item No. 2 1 Tel. No.: (022) 6752 5656, Fax No.: (022) 6752 5893 Email: IGRC@Larsentoubro.com, Website: www.larsentoubro.com of of of DP ID shares of LARSEN & TOUBRO LIMITED, hereby appoint: having e-mail id or failing him having e-mail id or failing him having e-mail id and whose signature(s) is/are appended below as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the Seventy Fourth Annual General Meeting of the Company, to be held at Birla Matushri Sabhagar, 19, Marine Lines, Mumbai - 400020 on Thursday, August 1, 2019 at 3.00 P.M. and at any adjournment thereof in respect of such resolutions as are indicated below: ** I wish my above Proxy to vote in the manner as indicated in the box below: Item No. Resolutions Adoption of audited financial statements for the year ended March 31, 2019 and the Reports of the Board of Directors and Auditors thereon and the audited consolidated financial statements of the Company and the reports of the auditors thereon for the year ended March 31, 2019. Regd. Office L&T House, Ballard Estate, Mumbai 400 001. Resolutions Re-appoint Mr. Vikram Singh Mehta (DIN: 00041197), as an Independent Director Signature of shareholder: Signature of proxy holder(s) Note: (1) (2) (3) This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company not less than 48 hours before the commencement of the meeting. A Proxy need not be a member of the Company. A person can act as a proxy on behalf of members not exceeding fifty and holding in aggregate not more than 10% of the total share capital of the Company carrying voting rights. A member holding more than 10% of the total share capital of the Company carrying voting rights may appoint a single person as proxy and such person shall not act as a proxy for any other shareholder. **(4) This is only optional. Please put a 'X' in the appropriate column against the resolutions indicated in the Box. If you leave the 'For' or 'Against' column blank against any or all the resolutions, your Proxy will be entitled to vote in the manner as he/she thinks appropriate. Appointing a proxy does not prevent a member from attending the meeting in person if he/she so wishes. (5) 56 (6) In the case of jointholders, the signature of any one holder will be sufficient, but names of all the jointholders should be stated. d) 2019 9 day of 1 Rupee Revenue Stamp 10 Re-appoint Mr. Adil Zainulbhai (DIN: 06646490), as an Independent Director 11 Change in scale of salary of Mr. S. N. Subrahmanyan (DIN: 02255382), Chief Executive Officer and Managing Director 12 Change in scale of salary of Mr. R. Shankar Raman (DIN: 00019798), Chief Financial Officer & Whole-time Director 13 Alteration to the objects clause of the Memorandum of Association of the Company 14 15 Raise funds through issue of convertible bonds and/or equity shares through depository receipts and including way of Qualified Institution Placement ('QIP'), to Qualified Institutional Buyers ('QIB') for an amount not exceeding 4000 Crore or US $ 600 million, if higher. Ratification of remuneration payable to M/s R. Nanabhoy & Co. Cost Accountants (Regn. No. 00010) for the financial year 2019-20. For Against Affix a Signed this L99999MH1946PLC004768 CIN LARSEN & TOUBRO LIMITED 24,000 1,750 39.28% 50.00% 50.00% Refer Note 1 Refer Note 3 (0.31) 0.14 (0.41) Extent of Holding % (effective) 45 Description of how there is significant influence Reason why the associate/joint venture is not consolidated 6 (1.40) Net worth attributable to Shareholding as per latest audited Balance Sheet ( crore) 0.74 0.24 Indiran Gujarat Engineering Private Limited Projects and Systems Kish PJSC Leather Industries Limited 31-Mar-19 2-Aug-10 Refer Note 2 31-Oct-09 27-Jun-91 22,000 875 7,35,000 0.22 0.39 0.78 0.39 7 Profit/(Loss) for the year (crore) N. KUMAR (DIN 00007848) 555 556 NOTES LARSEN & TOUBRO PROXY FORM [Pursuant to Section 105(6) of the Companies Act, 2013 and Rule 19(3) of the Companies (Management and Administration) Rules 2014] Name of the member(s) Registered Address Email ID Folio No./Client ID I/We, being the holder(s) of 1) 2) 3) SUNITA SHARMA (DIN 02949529) (DIN 00101004) M. M. CHITALE Directors Considered in Consolidation Not Considered in Consolidation Notes: 1. Significant influence is demonstrated by holding 20% or more of the total voting power, or control of or participation in business decisions under an agreement of the investee. 2. The Incorporated joint venture is not required to be audited as per regulatory laws in Iran. Hence the management certified accounts have been considered for consolidation. 3. The associate company is under liquidation process and investment is fully provided in the accounts. Mumbai, May 10, 2019 8 S. N. SUBRAHMANYAN Chief Executive Officer & Managing Director (DIN 02255382) R. SHANKAR RAMAN Chief Financial Officer & Whole-time Director (DIN 00019798) SUBODH BHARGAVA (DIN 00035672) VIKRAM SINGH MEHTA (DIN 00041197) SANJEEV AGA (DIN 00022065) N. HARIHARAN Company Secretary M. No. A3471 L&T Infra Contractors Private Limited 129.06 L&T Hydrocarbon Caspian LLC 0.85 1189.26 13.94 3367.80 45.37 54.24 18.98 6 Investments 1186.16 0.03 1.01 7 Turnover 208.23 3.15 37.30 2592.69 115.76 28.83 8 Profit before taxation 77.57 209.78 0.21 Total assets 18.98 398.31 11.72 20.12 0.95 3 Liabilities 72.85 0.16 781.90 11.31 2943.08 33.64 33.84 17.91 4 Total equity and liabilities 209.78 0.85 1189.26 13.94 3367.80 45.37 54.24 5 444.03 (1.11) 13.74 78.88 74.80 100.00 38 (0.87) 14.19 69.05 7.91 (4.84) (74.85) 74.80 O 65.00 78.88 74.80 74.80 Note: Date of incorporation 550 LARSEN & TOUBRO Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] (contd.) crore Sr. No. % of share holding 15 Proposed dividend - preference Proposed dividend - equity 91.95 10.49 (6.01) 9 Provision for taxation 0.19 0.06 (0.24) (0.45) 22.90 2.58 2.24 (1.17) Profit after taxation 77.38 0.15 444.03 11 Interim dividend equity 13 14 2345 12 Interim dividend preference 10 352.04 0.42 33.13 Interim dividend preference Proposed dividend- equity Proposed dividend preference % of share holding 81 Sr. No. Sr. Particulars no. Holdings Information & Toubro Technologies (Oman) LLC 100.00 100.00 100.00 100.00 70.00 100.00 49.00 72.50 73 L&T 74 L&T 75 76 (69.77) Interim dividend equity 12345 15 (2.23) (5.46) (44.43) 19.82 0.06 0.22 9 Provision for taxation 3.05 0.00 (0.03) 77 (2.49) 10 Profit after taxation 16.83 (0.60) (2.23) (5.43) (41.94) 16.14 0.06 0.22 11 3.68 81 L&T Global Larsen Date of Acquisition 26-Jun-14* 77.67 18-Jun-15* 69.16 24-Feb-16* 77.67 01-Feb-16* 181.24 29-Jan-94* 69.16 31-May-17 79.99 15-Dec-17 79.99 15-Dec-17 1 Share capital (including share application money pending allotment) 103.80 0.27 55.32 0.39 26.41 0.01 0.28 0.12 2 Other equity/Reserves and surplus (as applicable) 69.16 financial year Exchange rate on the last day of 31-Dec-18 EURO 78 Esencia Technology Infotech 79 Syncordis S.A. 80 Syncordis SARL Services LLC Austria Limited Technology Inc. L&T Financial year ending on Currency USD GmbH 31-Mar-19 EURO Spain, S.L. 31-Mar-19 31-Mar-19 USD EURO 31-Dec-18 OMR 31-Mar-19 USD 31-Dec-18 EURO 31-Mar-19 82 83 Sr. (23.41) 14 Proposed dividend - preference 15 % of share holding 74.80 74.80 74.80 70.00 50.0001 50.0002 51.00 51.00 Sr. No. 89 90 91 92 93 94 95 96 Sr. 13 Proposed dividend equity Interim dividend preference 12 (15.00) (2.90) 0.95 (0.87) 18.29 14.32 3.58 417.89 45.56 (0.54) 0.00 (0.28) Particulars 0.73 0.75 137.93 (2.36) 0.95 (0.59) 17.56 12.14 2.83 279.96 45.56 11 Interim dividend equity 2.18 812.08 Raykal L&T Howden INR Private Limited 31-Mar-19 INR Limited 31-Mar-19 INR 31-Mar-19 INR 31-Mar-19 INR 31-Mar-19 USD 31-Mar-19 INR 31-Mar-19 INR Exchange rate on the last day of financial year Date of Acquisition 23-Feb-99* 01-Jul-09* 17-Jun-10* 02-Sep-10* | 25-Nov-10* 02-Sep-10* 05-Apr-17* 26-Feb-01* 1 Share capital (including share application money pending allotment) 0.05 566.60 30.00 0.01 50.00 Currency 31-Mar-19 Financial year ending on Projects L&T Sapura L&T Kobelco L&T Sapura L&T MBDA L&T 2 no. Aluminium Steels and Company Heavy L&T Special Private Limited Private Private Limited Forgings Limited Machinery Private Limited Shipping Missile Infrastructure Private Systems Development Limited Limited Offshore (0.60) 2735.70 93.41 31-Dec-18 EURO 31-Dec-18 MXN 31-Dec-18 OMR 31-Mar-19 INR 31-Mar-19 INR 31-Mar-19 INR 31-Mar-19 INR Exchange rate on the last day of financial year 90.53 Date of Acquisition 15-Dec-17 79.99 15-Dec-17 3.54 01-Mar-17* 181.24 01-Jan-05 05-May-95* 11-Jan-08* 09-Oct-06* 27-Dec-06* 1 Share capital (including share application money pending allotment) 0.01 0.24 0.00 5.44 GBP Currency 31-Mar-19 Financial year ending on Particulars no. Syncordis Limited Syncordis Support Services S.A. L&T Infotech S. DE R.L. DE C.V. 84 Larsen and Toubro Electromech 85 86 87 88 5.57 L&T- Sargent and Lundy Private Limited Boilers Turbine Private Generators LLC Limited Limited Private Limited L&T Gulf L&T - MHPS L&T - MHPS 24.75 8.00 710.60 2222.63 Total assets 4.28 4.98 6.06 285.54 88.00 39.83 3933.40 2222.63 9 Investments Turnover Profit before taxation Provision for taxation 10 Profit after taxation 30.98 1.22 455.88 427.30 4.62 15.55 345.10 3933.40 39.83 88.00 285.54 2 Other equity/Reserves and surplus (as applicable) (2.34) 0.90 (0.48) (138.08) 55.64 23.79 1211.32 (423.56) 34567802=2345 234.10 Liabilities 3.84 6.54 418.18 26.79 8.04 2487.98 1935.59 Total equity and liabilities 4.28 4.98 6.06 6.61 158.85 19.88 8 13 Proposed dividend - equity | | | 14 Proposed dividend preference 15 % of share holding 56.02 74.80 100.00 100.00 100.00 100.00 100.00 70.00 Sr. No. 57 58 Sr. Particulars no. Larsen & Toubro Larsen & Toubro (East Asia) SDN. Qatar LLC BHD 59 L&T Overseas Projects Nigeria Limited 183.79 60 (6.93) (0.43) 12 Interim dividend preference 577.14 25.83 4.11 0.19 43.44 1089.79 (1.48) (1.51) (2.75) 532.51 (0.22) (0.14) (7.04) 183.79 (0.40) 11.66 0.21 (0.11) (1.08) (1.51) (2.75) 520.85 (0.14) 61 62 63 SAR Exchange rate on the last day of financial year 16.94 Date of Acquisition 13-Jun-96* 19.00 31-Mar-04* 0.19 18.44 229.91 15-Jul-04* 22-Aug-06* 29-Nov-06* 18.60 22-Jun-99* 18.60 01-Jul-12* 18.60 08-Jul-07* 1 Share capital (including share application money pending allotment) 1.27 0.38 0.19 33.19 45.98 26.74 18.60 1.86 2 31-Dec-18 as Larsen & Toubro ATCO Saudi LLC) (formerly known Saudi Company 64 L&T Electricals & Automation Larsen & Larsen & Toubro Larsen Toubro L&T Saudi Arabia Company Limited LLC Toubro Kuwait Saudi Arabia LLC Construction General Contracting Company, W.L.L 11 Interim dividend - equity Arabia LLC (487.42) Financial year ending on 31-Mar-19 Currency MYR 31-Dec-18 QAR 31-Dec-18 NGN 31-Mar-19 SAR 31-Dec-18 KWD 31-Dec-18 SAR 31-Dec-18 SAR Hydrocarbon 10 Profit after taxation Provision for taxation Profit before taxation (Proprietary) (Shanghai) Co., International Limited LLC Limited Ltd. Financial year ending on 31-Mar-19 Currency ZAR 31-Dec-18 CNY 31-Mar-19 AED 31-Mar-19 USD 31-Dec-18 SAR 31-Mar-19 GBP 31-Mar-19 GBP 31-Dec-18 OMR Exchange rate on the last day of financial year 4.77 Date of Acquisition 25-Jul-12 10.14 28-Jun-13* 18.83 69.16 27-Jan-08* 25-Sep-01* 18.60 17-Jun-13* Servowatch Systems Limited Thalest Limited Toubro Hydrocarbon 55 LARSEN & TOUBRO 49 Larsen & 50 L&T L&T Realty FZE Toubro Information Infotech Technology Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Part A: "Subsidiaries” [as per Section 2(87) of the Companies Act, 2013] (contd.) Sr. No. Sr. 90.53 04-Apr-12 Particulars crore 56 L&T Modular Fabrication Yard LLC 51 52 South Africa Services Larsen & Toubro International FZE 53 Larsen & 54 no. Other equity/Reserves and surplus (as 90.53 04-Apr-12 1 53.59 281.80 Total equity and liabilities 20.01 3.07 6.10 740.15 4.41 7.77 28.94 465.52 Total assets 20.01 3.07 6.10 740.15 4.41 7.77 28.94 465.52 9 Investments Turnover 7.18 22.55 0.12 4.78 Share capital (including share application money pending allotment) 0.21 1.09 16.94 756.21 0.93 1.21 23.08 51.81 2 179.63 05-Jul-06* Other equity/Reserves and surplus (as 3.20 (2.80) (10.96) (38.61) (3.70) 6.56 (47.73) 131.91 345678022345 Liabilities 16.60 applicable) applicable) (1.66) 0.18 31-Mar-19 AED 31-Mar-19 31-Mar-19 KWD ZAR Exchange rate on the last day of financial year 16.94 Date of Acquisition 29-May-07 16.94 03-Jul-12 49.02 23-Apr-08 0.00 23-Apr-08 181.24 07-Apr-08* 18.83 04-Apr-08* 227.43 4.77 10-Sep-13 06-Sep-10* 1 Share capital (including share application money pending allotment) 169.40 10.93 31-Dec-18 OMR 31-Dec-18 IDR 31-Mar-19 AUD 31-Mar-19 MYR 68 Sdn. Bhd. Tamco PT. Tamco Electrical Indonesia Industries Australia Pty Ltd. 69 Larsen & Toubro Heavy Engineering LLC L&T Kana Larsen Electrical & Automation Controls 80.75 and Toubro T&D SA FZE Trading & (Propreitary) Contracting Limited Company W.L.L Financial year ending on 31-Mar-19 Currency MYR General 67 12.58 1.88 132.29 380.03 18.56 3.24 Total assets 777.53 17.02 16.83 93.97 132.29 380.03 18.56 3.24 Investments 7 Turnover 529.96 51.35 18.43 40.54 105.01 453.99 56.63 93.97 16.83 17.02 777.53 2.27 3.58 2 Other equity/Reserves and surplus (as applicable) 358.47 (23.20) (75.40) (52.45) (83.11) 178.74 102.67 (6.01) 345 Liabilities 249.66 29.29 11.48 133.84 112.73 199.41 22.30 0.28 Total equity and liabilities (0.62) Profit before taxation 66 no. Total assets Investments 2.69 4.97 0.03 133.85 23.80 2255.37 452.04 715.95 0.19 Turnover 2.42 146.38 2140.92 825.54 799.00 Profit before taxation 0.16 (0.03) (0.00) (2.67) 0.45 715.95 452.04 2255.37 23.80 (0.19) (48.56) (44.57) 555.11 (372.89) (477.84) 7 8 9 3456N∞ ∞ 2=23 Liabilities 281.60 3.08 0.03 149.22 22.39 1673.52 806.33 1191.93 Total equity and liabilities 2.69 4.97 0.03 133.85 4.41 65 Tamco Henikwon Switchgear Corporation (Malaysia) Sdn. Bhd. 88.53 Provision for taxation 0.45 223.26 75.56 10.78 (174.00) 49.00 100.00 75.00 100.00 Note: Date of incorporation 549 449 SALIENT FEATURES OF THE FINANCIAL STATEMENTS OF SUBSIDIARIES/ASSOCIATE COMPANIES/JOINT VENTURES | ANNUAL REPORT 2018-19 Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] (contd.) Sr. No. 70 71 crore 72 Sr. ធំ៖ Particulars 3.30 12.97 58.34 Og 0.00 0.30 10 Profit after taxation 0.16 (0.03) 11 Interim dividend equity 12 Interim dividend preference 13 Proposed dividend - equity 14.08 14 15 % of share holding 30.00 49.00 mg (0.00) 100.00 8ĕ (2.97) 100.00 Eg Proposed dividend - preference 1.00 321.06 2 a) Names of subsidiaries which are yet to commence operations: A) Notes: Date of incorporation Note: PT Larsen & Toubro Hydrocarbon Engineering Indonesia 97.45 100.00 100.00 | | | | ∞ 78.88 78.88 78.88 74.80 78.88 b) 9 195.45 224.28 104.10 1.90 34.58 8 Provision for taxation Profit before taxation (57.56) 194.12 (107.71) (0.13) (1.56) 0.00 6.44 58.94 Turnover % of share holding Proposed dividend - preference 0.06 (0.00) 0.05 Provision for taxation 9 4.19 (0.14) (0.57) 0.11 c) 0.30 (0.01) 0.16 Profit before taxation (0.17) 15 0.60 Profit after taxation 14 Proposed dividend - equity 13 Interim dividend preference 12 Interim dividend - equity 10 11 (0.43) (0.17) 0.11 0.24 (0.01) 0.11 3.59 7 1.74 89.83 1 Share capital (including share application money pending allotment) 192.60 290.03 169.10 15-Oct-18 110.00 5.19 0.03 1.43 2 Other equity/Reserves and surplus (as applicable) 42.00 157.06 18.83 20-Nov-18* 30-Aug-13 18-Oct-13* | 16-Feb-09* 08-Sep-08* 24-Mar-08* Financial year ending on 31-Mar-19 Currency INR 31-Mar-19 INR 31-Mar-19 INR 69.16 01-Jul-18* 31-Mar-19 INR 31-Mar-19 USD 31-Mar-19 NOK 31-Mar-19 INR Exchange rate on the last day of financial year Date of Acquisition 31-Mar-19 INR (66.37) (327.68) (230.47) 19.80 0.03 28.31 Total assets Investments 1954.52 393.76 1339.77 836.31 393.76 19.80 0.03 28.31 277.09 815.62 836.31 815.62 1339.77 (5.49) (3.63) (0.00) 19.89 3456 Liabilities 1604.86 1116.11 974.20 956.78 357.25 18.24 6.99 1.19 1954.52 8 Private Limited 6.72 0.52 SGD 31-Mar-19 MYR 31-Mar-19 INR 116 Seastar Solutions Labs Private Hydrocarbon Construction Taiwan Limited International Limited 31-Dec-18 TWD 117 Currency 118 L&T 119 Ruletronics 120 LT IDPL Systems INDVIT L&T Machinery 31-Mar-19 SDN. BHD. Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] (contd.) crore Sr. No. Sr. Particulars Financial year ending on no. 114 115 Graphene Graphene Solutions Pte. Ltd. 113 Graphene Solutions LARSEN & TOUBRO Private FZE 1 Share capital (including share application money pending allotment) 0.31 0.17 1.12 01-Feb-19 20-May-99* 0.05 0.01 0.51 13.95 2 Other equity/Reserves and surplus (as applicable) 0.29 Services 15-Oct-18 09-Sep-18* | 18-Dec-18* 18.83 31-Mar-19 AED Limited 31-Mar-19 Limited Limited 31-Mar-19 INR 15-Oct-18 INR Exchange rate on the last day of financial year 51.04 Date of Acquisition 15-Oct-18 16.94 15-Oct-18 31-Mar-19 INR 552 Note: Date of incorporation 78.88 0.59 1.51 0.20 2.12 Total equity and liabilities 73.26 0.39 2.13 0.28 0.38 0.24 0.03 0.62 Liabilities 0.00 3456 0.01 110.55 3.49 Turnover 7 70.00 Investments 110.55 5.95 5.95 0.39 0.59 1.51 0.20 2.12 Total assets 0.01 23.34 3.31 (0.18) 97.45 72.11 2 – 1.74 (107.71) (0.13) 97.45 (1.56) 4.70 97.45 97.45 63.91 74.80 O 0.00 % of share holding 15 Proposed dividend - preference 0.16 0.15 15.25 10 Profit after taxation 43.69 (57.56) 194.12 11 Interim dividend equity 12 Interim dividend preference 13 Proposed dividend - equity 14 1.03 AS Total equity and liabilities Infotech Norge 81 g 97.45 Note: Date of incorporation 551 SALIENT FEATURES OF THE FINANCIAL STATEMENTS OF SUBSIDIARIES/ASSOCIATE COMPANIES/JOINT VENTURES | ANNUAL REPORT 2018-19 Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures crore Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] (contd.) Sr. No. 97 Sr. Particulars Panipat 98 Vadodara 51.00 99 60.00 60.00 12 Interim dividend preference 13 Proposed dividend - equity 14 Proposed dividend - preference 15 % of share holding 75.50 O 74.00 50.10 18 | | | | O (1.15) 51.00 Interim dividend equity 100 no. 31-Mar-19 Currency INR 31-Mar-19 INR 31-Mar-19 INR 31-Mar-19 INR 31-Mar-19 INR 31-Mar-19 INR 31-Mar-19 INR 31-Mar-19 INR Exchange rate on the last day of financial year Date of Acquisition 21-Jul-05* 23-Dec-05* 02-Feb-06* 24-Sep-97* 09-Sep-08* 09-Sep-08* 05-Feb-10* 20-Dec-11* Financial year ending on 101 Tollway Limited Tollways Elevated Corridor Tollway Limited Limited L&T Interstate Bharuch Road Corridor Transportation Halol-Shamlaji Limited Infrastructure Tollway Limited Limited L&T L&T 102 Ahmedabad- 103 104 L&T L&T Deccan Maliya Tollway Limited Samakhiali Gandhidham Limited 1 11 (0.04) 1687.14 Total equity and liabilities 0.97 1533.89 209.10 6.42 113.30 810.37 56.69 4190.66 Total assets 0.97 1533.89 209.10 6.42 55.81 113.30 309.16 5.93 Other equity / Reserves and surplus (as applicable) 0.25 (1379.09) 60.58 0.48 2.28 342.36 (0.12) 2182.46 34567∞ 0 Liabilities 0.67 2346.38 118.52 61.02 92.60 810.37 4190.66 Provision for taxation 0.01 6.62 0.00 2.70 0.48 (0.47) 10 Profit after taxation (0.04) (213.89) 19.44 (0.26) 12.22 0.66 9 56.69 92.13 1.14 Investments 3284.64 Turnover 210.83 162.88 101.30 108.03 246.34 8 Profit before taxation (0.04) (213.88) 26.06 (0.26) 14.92 (0.04) Services 0.00 (204.17) 1635.38 2190.40 Total assets 210.51 746.17 305.41 388.11 1132.23 1318.74 1635.38 Share capital (including share application 2190.40 Investments 9.68 1318.74 135.85 56.64 7.16 46.32 212315 Turnover 8 Profit before taxation 9 Provision for taxation 10 78.30 345.13 30.29 32.01 141.38 money pending allotment) 30.05 43.50 746.17 210.51 Total equity and liabilities 456 2248.39 1759.01 1227.08 747.33 175.38 261.88 895.17 498.21 Liabilities 3 (343.33) 1132.23 (57.34) 57.16 41.40 795.35 149.00 80.54 285.34 86.23 2 applicable) (317.75) (192.50) (13.63) 171.33 (410.45) Other equity/Reserves and surplus (as 305.41 190.41 134.83 106 107 108 109 110 111 Sr. Particulars Kudgi L&T PNG Tollway L&T L&T Chennai L&T Capital 105 Larsen & 112 Graphene no. Transmission Sambalpur Limited Rajkot-Vadinar Limited - Rourkela Tollway Limited Tollway Limited -Tada Tollway Limited Markets Toubro Semiconductor (Middle East) Limited 97.45 Sr. No. 5 97.45 (19.35) 72.81 (56.54) 22.22 (49.51) (12.38) (108.38) (227.40) 15.92 6.97 Profit after taxation (19.35) 56.89 (56.54) 15.25 (49.51) (12.38) 97.45 47.75 98.12 97.45 97.45 97.45 154.36 % of share holding 14 Proposed dividend - equity Interim dividend preference Interim dividend equity (227.40) (108.38) Proposed dividend - preference 388.11 Company Secretary Fold here Arrangements and presentations made at the last AGM F. Quality and accuracy of response to your queries and complaints: - - by Company G. H. No No No zzz ☐ ☐ ☐ - by Registrar Timeliness of response form - the Company - the Registrar For LARSEN & TOUBRO LIMITED you interact with - Investors Relation Cell Office of Registrars Overall quality of service provided by E. Please rate the contents and quality of the website of the Company D. Please rate the contents and quality of Annual Report M. No. A3471 SHAREHOLDER'S FEEDBACK FORM Name and address of the shareholder Phone No: (with STD code) E-mail ID: Folio No./DP ID & Client ID Shareholders Satisfaction Survey Questionnaire (please the appropriate box) Do you perceive the Company as creating shareholder value in the: A. (i) - the Company Short Term Long Term or (iii) Both B. Yes Yes Yes Are you satisfied with the growth strategy of the Company? Yes No Not aware C. (ii) N. Hariharan Excellent Not Unit: Larsen & Toubro Limited Karvy Selenium Tower B, Plot 31 & 32, Gachibowli, Financial District, Nanakramguda, Hyderabad, Telengana - 500 032 Tel: (040) 6716 2222 • Toll free number: 1-800-3454-001 -> Fold here AWARDS & RECOGNITION Every year, L&T and its people receive a number of national and international awards that acknowledge its varied accomplishments. Presented by the media, industry associations, independent bodies and academia, they honour the Company's contribution in various spheres of business, technology, financial performance, growth and environmental protection. For details of recent awards, please visit www.Larsentoubro.com DESIGN BY: TAG VINNATTI Printed at: Print Plus Pvt. Ltd. Yours faithfully, Thanking you, We are privileged to have you as our shareholder. It has been our constant endeavour to improve the services to our Investors and in this pursuit, we are once again sending you this Feedback Form, which is a self addressed prepaid Inland letter. We request you to kindly spare some time and retum the same to us duly completed. We look forward to your feedback/valuable suggestions. Date: Dear Shareholder, Tel. No.: (022) 6752 5656, Fax No.: (022) 6752 5893 Email: IGRC@Larsentoubro.com, Website: www.larsentoubro.com Regd. Office L&T House, Ballard Estate, Mumbai 400 001. CIN L99999MH1946PLC004768 LARSEN & TOUBRO LIMITED Fold here I. In case of any queries, kindly contact our Registrar: Karvy Fintech Pvt. Ltd. * In case your response to any question overleaf is "Poor", kindly share your experience and let us know the reason/ instances to enable us to investigate the matter. First Fold Second Fold experienced -the Registrar * Kindly let us know your experience in space provided overleaf Yes No Signature Fold here Fold here Fold here Good Poor* Postage will be BUSINESS REPLY LETTER No Postage stamp necessary if posted in India B. R. PERMIT No.: MBI GPO - 0049 Mumbai G.P.O. Mumbai - 400 001. Larsen & Toubro Limited Secretarial Department L&T House, Ballard Estate, Mumbai 400 001. paid by addresssee Please rate the hospitality and efficiency of the persons attending to you when J. Do you have any grievance which has not been redressed embedded software solutions, systems, arms, sensors, goods, equipment, sub-systems, parts and components, consumables thereof, and/or infrastructure in connection therewith including upgradation, refit, retrofitment, refurbishment and renovation thereof and any other hardware or software in connection with the above; providing all ancillary and/ or related life cycle services in connection therewith, including but not limited to, supervision, operation & maintenance, warranty services; to carry out all activities for or in connection therewith or related thereto; Item No. 7: Mr. M.M Chitale (DIN: 00101004) was appointed as an Independent Director of the Company with effect from April 1, 2014 to March 31, 2019. Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, ("LODR Regulations") an Independent Director shall hold office for a term upto five consecutive years on the Board of the Company and shall be eligible for re-appointment on passing of a Special Resolution by the Company and disclosure of such appointment in the Board Report. The Board of Directors at its meeting held on March 5, 2019 on the recommendation of the Nomination and Remuneration Committee approved the re-appointment of Mr. Chitale as Independent Director of the Company for a second and final term of five years with effect from April 1, 2019 to March 31, 2024 based on his skills, experience, knowledge and report of his performance evaluation. His re-appointment is subject to the approval of the shareholders at this Annual General Meeting by way of a Special Resolution. The Company has received a notice in writing from the Director under Section 160 of the Companies Act, 2013, proposing his candidature for the office of Independent Director of the Company. LARSEN & TOUBRO In the opinion of the Board, Mr. Chitale fulfils the conditions specified in the Companies Act, 2013 and rules made thereunder and LODR Regulations for his re-appointment as an Independent Director of the Company and is independent of the management. A copy of the letter for appointment of Mr. Chitale as an Independent Director setting out the terms and conditions would be available for inspection without any fee by the Members at the Registered Office of the Company. The Board considers that his association would be of immense benefit to the Company as it has been beneficial in the past and it is desirable to avail services of Mr. Chitale as an Independent Director. Accordingly, the Board recommends the resolution in relation to the re-appointment of Mr. Chitale as an Independent Director, for the approval by the shareholders of the Company. Except Mr. M.M Chitale, being the appointee, none of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 7. Item No. 8: As required by Section 102 of the Companies Act, 2013, the following Explanatory Statement sets out material facts relating to the business under items 7 to 15 of the accompanying Notice dated May 10, 2019. Mr. M. Damodaran (DIN: 02106990) was appointed as an Independent Director of the Company with effect from April 1, 2014 to March 31, 2019. Pursuant to the provisions of the Companies Act, 2013 and SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015, ("LODR Regulations") an Independent Director shall hold office for a term upto five consecutive years on the Board of the Company and shall be eligible for re-appointment on passing of a Special Resolution by the Company and disclosure of such appointment in the Board Report. In the opinion of the Board, Mr. Damodaran fulfils the conditions specified in the Companies Act, 2013 and rules made thereunder and LODR Regulations for his re-appointment as an Independent Director of the Company and is independent of the management. A copy of the letter for appointment of Mr. Damodaran as an Independent Director setting out the terms and conditions would be available for inspection without any fee by the members at the Registered Office of the Company. Additionally, Regulation 17(1A) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015 effective April 1, 2019, requires companies to obtain approval of shareholders by passing a Special Resolution for appointment or continuation of any Non-Executive Director who has attained the age of seventy-five years. Mr. Damodaran, aged 72 years, will complete 75 years during his current proposed term. The Board considers that his association would be of immense benefit to the Company as it has been beneficial in the past and it is desirable to avail services of Mr. Damodaran as an Independent Director. Accordingly, the Board recommends the resolution in relation to the re-appointment of Mr. Damodaran as an Independent Director, for the approval by the shareholders of the Company. Except Mr. M. Damodaran, being the appointee, none of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 8. Item No. 9: Mr. Vikram Singh Mehta (DIN: 00041197) was appointed as an Independent Director of the Company with effect from April 1, 2014 to March 31, 2019. Pursuant to the provisions of the Companies Act, 2013 and SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015, ("LODR Regulations") an Independent Director shall hold office for a term upto five consecutive years on the Board of the Company and shall be eligible for re-appointment on passing of a Special Resolution by the Company and disclosure of such appointment in the Board Report. The Board of Directors at its meeting held on March 5, 2019 on the recommendation of the Nomination and Remuneration Committee approved the re-appointment of Mr. Mehta as Independent Director of the Company for a second and final term of five years with effect from April 1, 2019 to March 31, 2024 based on his skills, experience, knowledge and report of his performance evaluation. His re-appointment is subject to the approval 55 56 NOTICE ANNUAL REPORT 2018-19 The Board of Directors at its meeting held on March 5, 2019 on the recommendation of the Nomination and Remuneration Committee approved the re-appointment of Mr. Damodaran as Independent Director of the Company for a second and final term of five years with effect from April 1, 2019 to March 31, 2024 based on his skills, experience, knowledge and report of his performance evaluation. His re-appointment is subject to the approval of the shareholders at this Annual General Meeting by way of a Special Resolution. EXPLANATORY STATEMENT The mobile application is available for download from the Android Play Store. Shareholders can also scan the below QR code or alternatively visit the link https://kprism.karvy.com/app/ to download the mobile application. host of services viz., consolidated portfolio view serviced by Karvy, Dividends status and send requests for change of Address, change / update Bank Mandate. Shareholders can also download Annual reports, standard forms and keep track of upcoming General Meetings, IPO allotment status and dividend disbursements. The results declared alongwith the Scrutinizer's report, will be posted on the website of the Company www.larsentoubro.com and on the website of Karvy at https://evoting.karvy.com and will be displayed on the Notice Board of the Company at its Registered Office as well as Corporate Office immediately after the 53 54 NOTICE ANNUAL REPORT 2018-19 declaration of the result by the Chairman or any person authorised by him in writing and will be communicated to the Stock Exchanges. [n] Online Query Module: The Company is pleased to provide the Online Query Module to enable the Members to seek informations / clarifications pertaining to the Annual Report in advance. Members can post their queries related to the Annual Report by using their secure login credentials on the e-voting website of Karvy at https://evoting.karvy.com. [o] Web check-in: To facilitate smooth registration / entry at the AGM, the Company has also provided a web check-in facility, which would help the Members enter the AGM hall expeditiously. The Procedure for web check-in for the AGM is as follows: • • • Log in to https://karisma.karvy.com and click on the AGM Web Check-in link. Select the Company name, 'Larsen & Toubro Limited'. Enter the security credentials as directed and click on 'Submit'. After validating the credentials, click on 'Generate my Attendance Slip'. The Attendance Slip in PDF format shall appear on the screen. Select the print option for printing or download the Attendance Slip for future reference. [p] Webcast: Pursuant to Regulation 44(6) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company is pleased to provide the facility of live webcast of proceedings of AGM. Members who are entitled to participate in the AGM can view the proceeding of AGM by logging on the e-voting website of Karvy at https://evoting.karvy. com using their secure login credentials. Members are encouraged to use this facility of webcast. [q] KPRISM- Mobile service application by Karvy Members are requested to note that Karvy has launched a new mobile application - KPRISM and website https://kprism.karvy.com for online service to shareholders. Shareholders can download the mobile application, register themselves (onetime) for availing of the shareholders at this Annual General Meeting by way of a Special Resolution. The Scrutinizer will submit his report to the Chairman after completion of the scrutiny. The result of the voting on the Resolutions at the Meeting shall be announced by the Chairman or any other person authorized by him immediately after the results are declared. The Company has received a notice in writing from the Director under Section 160 of the Companies Act, 2013, proposing his candidature for the office of Independent Director of the Company. Mr. Adil Zainulbhai (DIN: 06646490) was appointed as an Independent Director of the Company with effect from May 30, 2014 to May 29, 2019. Pursuant to the provisions of the Companies Act, 2013 and SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015, ("LODR Regulations") an Independent Director shall hold office for a term upto five consecutive years on the Board of the Company and shall be eligible for re-appointment on passing of a Special Resolution by the Company and disclosure of such appointment in the Board Report. Changes in the business environment particularly greater integration of the Indian economy with the global markets and easier migration of managerial resources from one part of the world to other has necessitated that the Company follows a contemporary and competent remuneration policy in order to retain and reward talent in line with the market. It is, therefore, necessary to do periodic revisions in the ceilings that have been contemplated in absolute sums of money. The enhanced limits of salary will, however, continue to be subject to the condition that the total managerial remuneration payable shall not exceed the overall limit of 10% of the net profits of the Company as approved by the shareholders at their Meeting held on August 26, 2016. The Nomination and Remuneration Committee and the Board of Directors of the Company at their respective Meetings held on January 25, 2019 recommended the change in scale to the shareholders for approval. A copy of the draft agreement proposed to be entered into with Mr. R. Shankar Raman would be available for inspection without any fee by the members at the Registered Office of the Company. The limits stipulated herein above are the maximum limits and the Board may, on the recommendation of the Nomination and Remuneration Committee, pay to Mr. R. Shankar Raman appropriate remuneration and revise the same from time to time within the maximum limits stipulated by this resolution. The Board recommends this Resolution for approval of the Shareholders. Except Mr. R. Shankar Raman, none of the Directors and/or Key Managerial Personnel of the Company and/ or their relatives are concerned or interested in resolution no. 12. Item No. 13: As the shareholders of the Company are aware, the Company has been engaged in the manufacture 57 16,25,000 in the scale of 16,25,000 - ₹1,00,000 -17,25,000 with an annual increment due on April 1 every year. 58 and supply of defence equipment and systems and aerospace systems and sub-systems. The Company provides indigenous, design-to-delivery backed by throughlifesupport solutions across the defence spectrum including defence platforms & systems, equipment, sensors & electronics as well as specialised turnkey defence construction solutions, structures, smart infrastructure and modernisation of existing facilities. Defence manufacturing is covered under licensing under the Industrial Development and Regulation Act, 1951 ('IDRA/Act'), mentioned at Sr. No. 37 of the Schedule I of the Act and also included at Sr. No. 13 of Schedule Il of Notification S.O. 477 (E) dated 25th July 1991 and further amended vide Notification S.O.11 (E) dated 3rd January 2002. Over the years, from 2002 when Defence production was opened up for the Private Sector, the Company obtained various industrial licences under the Act for the manufacture of defence goods. Thereafter vide Notification S.O. 1636 (E) issued by Ministry of Home Affairs in May 2017, licenses for some of the above segments which were earlier issued under IDRA were required to be brought under the Arms Act 1959. The process/procedure for the same was awaited. The Government of India issued the Notification under the Arms Act, 1959 vide S.O. No. 6203(E) dated 14th December, 2018 as amended by vide S.O. No. 1501(E) dated 2nd April, 2019, authorising Secretary, Department for Industrial Policy and Promotion (DIPP) (Presently Department of Promotion of Industry and Internal Trade), in the Government of India in the Ministry of Commerce & Industry, to issue licenses under the Arms Act, 1959 in addition to DIPP's authority to issue licenses under the IDRA. The Company's defence activities primarily fall within the scope of mechanical and electrical engineering and, in fact, prior to the internal restructuring of the Company's business activities, were carried on as part of the Company's 'heavy engineering' business. The Company has the specific authority to undertake engineering related activities in terms of Clause Ill(b) of its Memorandum of Association which reads as follows: "To carry on business as civil, mechanical, electrical, chemical and agricultural engineers, as manufacturers, and as importers and exporters, commission agents (and merchants and as agents for ships and ship-owners and as agents) for foreign manufacturers and merchants" The Company is also authorised to undertake business as manufacturers in respect of goods, merchandise and services of all kinds and as an export house in terms of Clause III(k)(10) of its Memorandum of Association which reads as follows: "To carry on business as exporters, dealers, manufacturers or agents in respect of goods, merchandise and services of all kinds and as an export house." The Company's Memorandum of Association also enables it to "carry on any other trade or business whatsoever as can in the opinion of the Company be advantageously or conveniently carried on by the Company by way of extension or in connection with any of the Company's business or as calculated directly or indirectly to develop any branch of the Company's business or to increase the value of or turn to account any of the Company's assets, property or rights" (Clause III(n)) of the Company's Memorandum of Association. Post December, 2018 Notification as amended by the notification dated 02nd April, 2019, multiple of the Company's licenses for the defence business now come under the purview of the Arms Act, 1959 while the issuing authority remains under the Department for Promotion of Industry and Internal Trade (erstwhile DIPP). Ministry of Commerce & Industry has therefore advised the Company to include a specific clause with respect to defence goods in the Memorandum of Association, which is a requirement under the Arms Act, 1959 and its Rules. Whilst the Company has adequate authority under its existing Memorandum of Association to manufacture and supply defence equipment, which is also evidenced by the fact that the Company has, in the past, been granted industrial licences under the IDRA for the manufacture of defence products, the Board of Directors is of the opinion that it would be beneficial to include a specific object clause in the Company's Memorandum of Association which expressly authorises the Company to undertake defence-related activities. Defence is a focussed growth area of business for the Company and a separate reporting segment and therefore it is appropriate to amend the Memorandum of Association to include a specific clause with respect to defence goods of all types in the Object Clause of the Company's Memorandum of Association. A draft copy of the Memorandum of Association will be available for inspection at the Registered Office of the Company. The Board recommends this resolution for the approval of the shareholders. NOTICE ANNUAL REPORT 2018-19 Mr. R. Shankar Raman's salary has reached the maximum limit of salary as per the above scale w.e.f April 1, 2019. Hence, it is proposed that the existing scale of salary payable to Mr. R. Shankar Raman be revised upwards with effect from April 1, 2020 as under - - 10,25,000 - ₹1,00,000 - ₹15,25,000 with annual increment due on April 1 every year.' 11,25,000 (Rupees Eleven Lakh Twenty Five Thousand only) per month in the scale of ₹6,50,000 - ₹ 75,000 The Board of Directors at its meeting held on March 5, 2019 on the recommendation of the Nomination and Remuneration Committee approved the re-appointment of Mr. Zainulbhai as Independent Director of the Company for a second and final term of five years with effect from May 29, 2019 to May 28, 2024 based on his skills, experience, knowledge and report of his performance evaluation. His re-appointment is subject to the approval of the shareholders at this Annual General Meeting by way of a Special Resolution. The Company has received a notice in writing from the Director under Section 160 of the Companies Act, 2013, proposing his candidature for the office of Independent Director of the Company. In the opinion of the Board, Mr. Zainulbhai fulfils the conditions specified in the Companies Act, 2013 and rules made thereunder and LODR Regulations for his re-appointment as an Independent Director of the Company and is independent of the management. A copy of the letter for appointment of Mr. Zainulbhai as an Independent Director setting out the terms and conditions would be available for inspection without any fee by the members at the Registered Office of the Company. The Board considers that his association would be of immense benefit to the Company as it has been beneficial in the past and it is desirable to avail services of Mr. Zainulbhai as an Independent Director. Accordingly, the Board recommends the resolution in relation to the re-appointment of Mr. Zainulbhai as an Independent Director, for the approval by the shareholders of the Company. Except Mr. Adil Zainulbhai, being the appointee, none of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 10. Item No. 11: At the Annual General Meeting of the Company held on August 22, 2017, the shareholders had approved payment of remuneration to Mr. S. N. Subrahmanyan (DIN: 02255382) as the Chief Executive Officer and Managing Director of the Company within the limits and subject to the terms and conditions set out in the resolution passed at that meeting read with the explanatory statement. The resolution had approved the following scale of salary payable to the Mr. S. N. Subrahmanyan - 18,40,000 (Rupees Eighteen Lakh Forty Thousand only) per month in the scale of 12,00,000 - ₹1,60,000 - 21,60,000 with annual increment due on April 1 every year. Mr. S. N. Subrahmanyan's salary has reached the maximum limit of salary as per the above scale w.e.f April 1, 2019. Hence, it is proposed that the existing scale of salary payable to Mr. S. N. Subrahmanyan be revised with effect from April 1, 2020 as under 23,20,000 in the scale of 23,20,000 - 1,60,000 - 24,80,000 with an annual increment due on April 1 every year. LARSEN & TOUBRO Changes in the business environment particularly greater integration of the Indian economy with the global markets and easier migration of managerial resources from one part of the world to other has necessitated that the Company follows a contemporary and competent remuneration policy in order to retain and reward talent in line with the market. It is, therefore, necessary to do periodic revisions in the ceilings that have been contemplated in absolute sums of money. The enhanced limits of salary will, however, continue to be subject to the condition that the total managerial remuneration payable shall not exceed the overall limit of 10% of the net profits of the Company as approved by the shareholders at their Meeting held on August 26, 2016. The Nomination and Remuneration Committee and the Board of Directors of the Company at their respective Meetings held on January 25, 2019 recommended the change in scale to the shareholders for approval. A copy of the draft agreement proposed to be entered into with Mr. S. N Subrahmanyan would be available for inspection without any fee by the members at the Registered Office of the Company. The limits stipulated herein above are the maximum limits and the Board may, on the recommendation of the Nomination and Remuneration Committee, pay to Mr. S. N. Subrahmanyan appropriate remuneration and revise the same from time to time within the maximum limits stipulated by this resolution. The Board recommends this Resolution for approval of the Shareholders. Except Mr. S. N. Subrahmanyan, none of the Directors and/or Key Managerial Personnel of the Company and/or their relatives are concerned or interested in resolution no. 11. Item No 12: At the Annual General Meeting of the Company held on August 26, 2016, the shareholders had approved payment of remuneration to Mr. R. Shankar Raman (DIN: 00019798) as the Whole-time Director and Chief Financial Officer of the Company within the limits and subject to the terms and conditions set out in the resolution passed at that meeting read with the explanatory statement. The resolution had approved the following scale of salary payable to the Mr. R. Shankar Raman - In the opinion of the Board, Mr. Mehta fulfils the conditions specified in the Companies Act, 2013 and rules made thereunder and LODR Regulations for his re-appointment as an Independent Director of the Company and is independent of the management. A copy of the letter for appointment of Mr. Mehta as an Independent Director setting out the terms and conditions. would be available for inspection without any fee by the members at the Registered Office of the Company. The Board considers that his association would be of immense benefit to the Company as it has been beneficial in the past and it is desirable to avail services of Mr. Mehta as an Independent Director. Accordingly, the Board recommends the resolution in relation to the re-appointment of Mr. Mehta as an Independent Director, for the approval by the shareholders of the Company. Except Mr. Vikram Singh Mehta, being the appointee, none of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 9. Item No. 10: A Member can opt for only one mode of voting i.e. either through remote e-voting or at the Meeting. If a Member has cast his vote by remote e-voting then he will not be eligible to vote at the Meeting. Based on the report received from the Scrutiniser the Company will submit within 48 hours of the conclusion of the Meeting to the Stock Exchanges details of the voting results as required under Regulation 44(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Please follow all steps from Sr. No. (i) to Sr. No. (xi) above in (A), to cast your vote. [e] Members are requested to furnish bank details, email address, change of address etc. to Karvy Fintech Private Limited, Karvy Selenium, Tower B, Plot 31-32, Gachibowli, Financial District, Nanakramguda, Hyderabad 500 032, who are the Company's Registrar and Share Transfer Agents so as to reach them latest by Thursday, July 25, 2019, in order to take note of the same. In respect of members holding shares in electronic mode, the details as would be furnished by the Depositories as at the close of the aforesaid date will be considered by the Company. Hence, members holding shares in demat mode should update their records at the earliest. [f] In order to receive copies of Annual Reports and other communication through e-mail, members holding shares in physical form are requested to register their e-mail addresses with the Company by sending an e-mail to Lntgogreen@Larsentoubro.com. [g] All documents referred to in the accompanying Notice and the Explanatory Statement are open for inspection at the Registered Office of the Company on all working days, except Saturdays, between 11.00 a.m. and 1.00 p.m. up to the date of the Annual General Meeting. [h] Members/Proxies should bring their attendance slips duly completed for attending the Meeting. [i] Pursuant to Section 124 of the Companies Act, 2013 the unpaid dividends that are due for transfer to the Investor Education and Protection Fund are as follows: Dividend Date of For the [d] The Register of Members and Transfer Books of the Company will be closed from Friday, July 26, 2019 to Thursday, August 1, 2019 (both days inclusive). No. Due for Transfer on 83 24.08.2012 31.03.2012 29.09.2019 84 22.08.2013 31.03.2013 27.09.2020 85 22.08.2014 31.03.2014 27.09.2021 Declaration year ended [c] The requirement to place the matter relating to appointment of Auditors for ratification by Members at every Annual General Meeting has been done away with vide notification dated May 7, 2018, issued by the Ministry of Corporate Affairs. Accordingly no resolution is proposed for ratification of appointment of Auditors, who were appointed in the Annual General Meeting held on September 9, 2015. ENTITLED TO APPOINT A PROXY, TO ATTEND AND VOTE INSTEAD OF HIMSELF, AND THAT A PROXY NEED NOT BE A MEMBER. Pursuant to Section 105 of the Companies Act, 2013 and Rule 19 of the Companies (Management & Administration) Rules, 2014, a person can act as a proxy on behalf of members not exceeding 50 and holding in the aggregate not more than 10% of the total share capital of the Company carrying voting rights. In case a proxy is proposed to be appointed by a member holding more than 10% of the total share capital of the Company carrying voting rights, then such proxy shall not act as a proxy for any other shareholder. Proxies, in order to be effective, must be received at the Registered office of the Company at L&T House, Ballard Estate, Mumbai 400 001, not later than forty-eight hours before the commencement of the AGM i.e. by 3.00 p.m. on Tuesday, July 30, 2019. [b] A MEMBER ENTITLED TO ATTEND AND VOTE IS RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby severally authorized to do all such acts, deeds, matters and things as may be necessary and incidental for giving effect to this Resolution, including agreeing to any change to the aforesaid Clause III(ee) of the Memorandum of Association of the Company, as may be required by the ROC and/or any statutory/regulatory authority." 14) To consider and, if thought fit, to pass as a SPECIAL RESOLUTION the following: "RESOLVED THAT in supersession of the resolution no. 11 passed by the Members at the 72nd Annual General Meeting of the Company held on August 22, 2017 in this regard and in accordance with the provisions of Sections 41, 42, 62 and other applicable provisions, if any of the Companies Act, 2013 (including any statutory modifications or re-enactments thereof for the time being in force) as amended from time to time, Foreign Exchange Management Act, 1999, Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 ('SEBI Regulations'), Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, enabling provisions in the Memorandum and Articles of Association of the Company as also provisions of any other applicable laws, rules and regulations (including any amendments thereto or re-enactment(s) thereof for the time being in force) and subject to such approvals, consents, permissions and sanctions of the Securities and Exchange Board of India (SEBI), Government of India (GOI), Reserve Bank of India (RBI) and all other appropriate and/ or concerned authorities, or bodies and subject to such conditions and modifications, as may be prescribed by any of them in granting such approvals, consents, permissions and sanctions which may be agreed to by the Board of Directors of the Company ('Board') (which term shall be deemed to include any Committee which the Board may have constituted or hereafter constitute for the time being exercising the powers conferred on the Board by this resolution), the Board be and is hereby authorized to offer, issue and allot in one or more tranches, to Investors whether Indian or Foreign, including Foreign Institutions, Foreign Institutional Investors, Foreign Portfolio Investors, Foreign Venture Capital Fund Investors, Venture Capital Funds, Non-resident Indians, Corporate Bodies, Mutual Funds, Banks, Insurance Companies, Pension Funds, Individuals or otherwise, whether shareholders of the Company or not, through an issue of convertible bonds and/or equity shares through depository receipts, including by way of Qualified Institutions Placement ('QIP'), to Qualified Institutional Buyers ('QIB') in terms of Chapter VI of the SEBI Regulations, through one or more placements of Equity Shares (hereinafter collectively referred to as "Securities"), whether by way of private placement or otherwise as the Board may determine, where necessary in consultation with the Lead Managers, Underwriters, Merchant Bankers, Guarantors, Financial and/or Legal Advisors, Rating Agencies/ Advisors, Depositories, Custodians, Principal Paying/Transfer/Conversion agents, Listing agents, Registrars, Trustees, Auditors, Stabilizing agents and all other Agencies/Advisors so that the total amount raised through issue of the Securities shall not exceed INR 4000 Crore (Rupees Four Thousand Crore only) or US $600 Mn (US Dollars Six Hundred Million), if higher. RESOLVED FURTHER THAT for the purpose of giving effect to the above, the Board be and is hereby also authorised to determine the form, terms and timing of the issue(s), including the class of investors to whom the Securities are to be allotted, number of Securities to be allotted in each tranche, issue price, face value, premium amount in issue/ conversion/ exercise/ redemption, rate of interest, redemption period, listings on one or more stock exchanges in India or abroad as the Board may in its absolute discretion deems fit and to make and accept any modifications in the proposals as may be required by the authorities involved in such issue(s) in India and/ or abroad, to do all acts, deeds, matters and things and to settle any questions or difficulties that may arise in regard to the issue(s). 49 50 NOTICE ANNUAL REPORT 2018-19 RESOLVED FURTHER THAT in case of QIP issue it shall be completed within 12 months from the date of passing of this resolution. RESOLVED FURTHER THAT in case of QIP issue the relevant date for determination of the floor price of the Equity Shares to be issued shall be - i) in case of allotment of equity shares, the date of meeting in which the Board decides to open the proposed issue ii) in case of allotment of eligible convertible securities, either the date of the meeting in which the Board decides to open the issue of such convertible securities or the date on which the holders of such convertible securities become entitled to apply for the equity shares, as may be determined by the Board. RESOLVED FURTHER THAT the Equity Shares so issued shall rank pari passu with the existing Equity Shares of the Company in all respects. RESOLVED FURTHER THAT the Equity Shares to be offered and allotted shall be in dematerialized form. RESOLVED FURTHER THAT for the purpose of giving effect to any offer, issue or allotment of Securities, the Board, be and is hereby authorised on behalf of the Company to do all such acts, deeds, matters and things as it may, in absolute discretion, deem necessary or desirable for such purpose, including without limitation, the determination of the terms thereof, for entering into arrangements for managing, underwriting, marketing, listing and trading, to issue placement documents and to sign all deeds, documents and writings and to pay any fees, commissions, remuneration, expenses relating thereto and with power on behalf of the Company to settle all questions, difficulties or doubts that may arise in regard to such offer(s) or issue(s) or allotment(s) as it may, in its absolute discretion, deems fit. RESOLVED FURTHER THAT the Board be and is hereby authorised to appoint Lead Manager(s) in offerings of Securities and to remunerate them by way of commission, brokerage, fees or the like and also to enter into and execute all such arrangements, agreements, memoranda, documents, etc. with Lead Manager(s) and to seek listing of such securities. RESOLVED FURTHER THAT the Company do apply for listing of the new Equity Shares as may be issued with the BSE Limited and National Stock Exchange of India Limited or any other Stock Exchange(s). RESOLVED FURTHER THAT the Company do apply to the National Securities Depository Limited and/ or Central Depository Services (India) Limited for admission of the Securities. RESOLVED FURTHER THAT the Board be and is hereby authorised to create necessary charge on such of the assets and properties (whether present or future) of the Company in respect of Securities and to approve, accept, finalize and execute facilities, sanctions, undertakings, agreements, promissory notes, credit limits and any of the documents and papers in connection with the issue of Securities. RESOLVED FURTHER THAT the Board be and is hereby authorised to delegate all or any of the powers in such manner as they may deem fit." 15) To consider and ratify the remuneration payable to Cost Auditors and for that purpose to pass, as an ORDINARY RESOLUTION the following: "RESOLVED THAT pursuant to the provisions of Section 148 and other applicable provisions, if any, of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, the Company hereby ratifies the remuneration of 13.00 lakhs plus applicable taxes and out of pocket expenses at actuals for travelling and boarding/lodging for the financial year ending March 31, 2020 to M/s R. Nanabhoy & Co., Cost Accountants (Regn. No. 00010), who are appointed as Cost Auditors to conduct the audit of cost records maintained by the Company for the Financial Year 2019-20." Mumbai, May 10, 2019 Notes: By Order of the Board of Directors For LARSEN & TOUBRO LIMITED N. HARIHARAN COMPANY SECRETARY M.NO - A3471 [a] The information required to be provided under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Secretarial Standards on General Meetings, regarding the Directors who are proposed to be appointed/ re-appointed and the relative Explanatory Statement pursuant to Section 102 of the Companies Act, 2013, in respect of the business under items 7 to 15 set out above is annexed hereto. LARSEN & TOUBRO 86 87 09.09.2015 31.03.2015 15.10.2022 26.08.2016 31.03.2016 02.10.2023 88 and Password which are mentioned in the email). Your Folio No./ DP ID-Client ID will be your User ID. However, if you are already registered with Karvy for e-voting, you can use your existing User ID and password for casting your vote. (iii) After entering these details appropriately, Click on "LOGIN". (iv) You will now reach password change Menu wherein you are required to mandatorily change your password. The new password LARSEN & TOUBRO shall comprise of minimum 8 characters with at least one upper case (A-Z), one lower case (a-z), one numeric value (0-9) and a special character (@,#,$, etc.). The system will prompt you to change your password and update your contact details like mobile number, email ID, etc. on first login. You may also enter a secret question and answer of your choice to retrieve your password in case you forget it. It is strongly recommended that you do not share your password with any other person and that you take utmost care to keep your password confidential. (v) You need to login again with the new credentials. (vi) On successful login, the system will prompt you to select the "EVENT" i.e., Larsen & Toubro Limited. (vii) On the voting page, enter the number of shares (which represents the number of votes) as on the Cut Off date under "FOR/ AGAINST" or alternatively, you may partially enter any number in "FOR" and partially in "AGAINST" but the total number in "FOR/AGAINST" taken together should not exceed your total shareholding as on the cut-off date. You may also choose the option "ABSTAIN". If the Member does not indicate either "FOR" or "AGAINST" it will be treated as "ABSTAIN" and the shares held will not be counted under either head. (viii) Members holding multiple folios/demat accounts shall choose the voting process separately for each folios/demat accounts. (ix) You may then cast your vote by selecting an appropriate option and click on "SUBMIT". (x) A confirmation box will be displayed. Click "OK" to confirm else "CANCEL" to modify. Once you confirm, you will not be allowed to modify your vote. During the voting period, Members can login any number of times till they have voted on the resolution(s). (xi) Institutional shareholders (i.e. other than individuals, HUF, NRI, etc.) are required to send scanned copy (PDF/JPG format) of the relevant Board Resolution/ Authority B. letter etc., together with attested specimen signature of the duly authorized signatory(ies) who are authorized to vote, to the Scrutinizer through e-mail to scrutinizer@snaco.net, with a copy marked to evoting@karvy.com. (xii) In case of any queries, please visit Help and Frequently Asked Questions (FAQs) section available at Karvy's website https://evoting. karvy.com. In case a Member receives physical copy of the Notice of AGM (for Members whose email addresses are not registered with the Company/ Depository Participants or requesting physical copy): 1. 2. User ID and initial password are provided at the bottom of the Attendance Slip in the following format: User ID Password (ii) Enter the login credentials (i.e. User ID LARSEN & TOUBRO (i) Launch internet browser by typing the URL: https://evoting.karvy.com. A. 89 23.08.2018 22.08.2017 31.03.2017 27.09.2024 31.03.2018 28.09.2025 Members who have not encashed their dividend warrants pertaining to the aforesaid years may approach the Company/its Registrar, for obtaining payments thereof atleast 20 days before they are due for transfer to the said fund. [j] Investor Grievance Redressal: The Company has designated an exclusive email id viz. IGRC@Larsentoubro.com to enable Investors to register their complaints, if any. [k] Adhering to the various requirements set out in the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended, the Company has during the financial year 2018-19 transferred to the IEPF Authority all shares in respect of which dividend has remained unpaid or unclaimed for seven consecutive years as on the due date of transfer i.e November 1, 2018. Details of shares transferred to IEPF Authority are available on the website of the Company and the same can be accessed through the link: http:// investors.larsentoubro.com/resources.aspx. The said details have also been uploaded on the website of the IEPF Authority and the same can be accessed through the website: www.iepf.gov.in. 51 52 NOTICE ANNUAL REPORT 2018-19 [I] SEBI has decided that securities of listed companies can be transferred only in dematerialized form with effect from April 1, 2019. In view of the above and to avail various benefits of dematerlisation, members are advised to dematerialize shares that are held by them in physical form. [m] E-voting: The businesses as set out in the Notice may be transacted through electronic voting system and the Company will provide a facility for voting by electronic means. In compliance with the provisions of Section 108 of the Companies Act, 2013, read with Rule 20 of the Companies (Management and Administration) Rules, 2014, Standard 2 of the Secretarial Standards on General Meetings and Regulation 44 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company is pleased to offer the facility of voting through electronic means, as an alternate, to all its Members to enable them to cast their votes electronically. The facility of casting the votes by the members using an electronic voting system from a place other than venue of the AGM (remote e-voting) will be provided by Karvy Fintech Private Limited (Karvy). The facility for voting shall be made available at the AGM and the Members attending the Meeting who I have not cast their vote through remote e-voting shall be able to exercise their right at the meeting. Please note that the voting through remote e-voting is optional for shareholders. A person whose name is recorded in the register of members or in the register of beneficial owners maintained by the depositories as on the cut-off date of Thursday, July 25, 2019 shall be entitled to avail the facility of remote e-voting or voting at the AGM. Persons who are not members as on the cut-off date should treat this notice for information purposes only. The Notice will be displayed on the website of the Company www.larsentoubro.com and on the website of Karvy. The members who cast their vote through remote e-voting prior to the AGM may also attend the AGM but shall not be entitled to cast their vote again. The remote e-voting period commences on Monday, July 29, 2019 at 9.00 a.m. and ends on Wednesday, July 31, 2019 at 5.00 p.m. During this period members of the Company holding shares either in physical or dematerialised form, as on the cut-off date of Thursday, July 25, 2019 may cast their vote by remote e-voting. The remote e-voting module shall be disabled by Karvy for voting thereafter. The Members, whose names appear in the Register of Members list of Beneficial Owners as on Thursday, July 25, 2019, i.e. the commencement of the book closure date are entitled to vote on the Resolutions set forth in this Notice. Eligible members who have acquired shares after the despatch of the Annual Report and holding shares as on the cut-off date i.e Thursday, July 25, 2019 may approach the Company for issuance of the User ID and Password for exercising their right to vote by electronic means. Members who are already registered with Karvy for remote e-voting can use their existing User ID and password for casting their vote. In case they don't remember their password, they can reset their password by using "Forgot User Details/Password" option available on https://evoting.karvy.com The Company has appointed Mr. S. N. Ananthasubramanian, Practicing Company Secretary, (Membership No. 4206, COP No. 1774) or failing him Mrs. Aparna Gadgil, Practicing Company Secretary, (Membership No. 14713, COP No. 8430), to act as the Scrutinizer for conducting the voting and remote e-voting process in a fair and transparent manner. Members are requested to follow the instructions below to cast their vote through e-voting: In case a Member receives an e-mail from Karvy (for Members whose e-mail addresses are registered with the Company/ Depository Participants): The Company has received a notice in writing from the Director under Section 160 of the Companies Act, 2013, proposing his candidature for the office of Independent Director of the Company. Tech Mahindra Limited The Risk Management Committee comprises of Mr. S. N. Subrahmanyan, Mr. R. Shankar Raman and Mr. Subramanian Sarma, Directors of the Company. Mr. S. N. Subrahmanyan is the Chairman of the Committee. directors Nil inter-se Name of the Mr. M. M. Chitale Mr. M. Damodaran Director Date of Birth November 16, 1949 Date of July 6, 2004 May 4, 1947 October 22, 2012 Appointment on the Board Qualifications B.Com, F.C.A. Expertise Vast experience in the field of Finance and Accounts Nil Nil IAS, B.A. (Eco.) and LLB He has held a number of important positions in both the Central and State Governments and in India's Financial Sector. His areas of expertise include Financial Management, Securities Markets, Corporate Governance, Public Administration and Leadership. He is presently an independent consultant and corporate advisor, coach and mentor and sits on the Boards of several reputed companies. Mr. Vikram Singh Mehta October 30, 1952 October 22, 2012 Graduate in Mathematics; Masters in Economics-Oxford University; IAS He has served the Public Sector Oil Company "Oil India Limited" as its Advisor (Strategic Planning). He had been a member of the National Council of the Confederation of Indian Industry (CII) and Chairman of its Hydrocarbons committee. Mr. Adil Zainulbhai December 18, 1953 May 30, 2014 Bachelor of Technology - B.Tech (Mechanical) 1977, Masters in Business Administration - Harvard Business School Management Consultancy, Telecommunications, Infrastructure, High Tech, Financial Services Directorships held in between Relationships Nil Directors Executive NOTICE ANNUAL REPORT 2018-19 Name of the Director Mr. M. V. Satish Mr. Shailendra Roy Mr. R. Shankar Raman 4. L&T Infrastructure Development Mr. J. D. Patil Projects Limited 5. L&T Realty Limited 6. L&T Finance Holdings Limited Risk Management Committee 1. L&T Finance Holdings Limited 1. 2. Larsen & Toubro Limited 8 of 9 9 of 9 9 of 9 9 of 9 Meetings attended during the year Shareholding Not Applicable Not Applicable Not Applicable Not Applicable of Non- Number of Larsen & Toubro Infotech 1. Biocon Limited 4. Apollo Tyres Limited 6. R R Kabel Limited Management Limited 5. HT Media Limited which are subsidiaries of public companies (excluding foreign companies) 7. Bhageria Industries Limited 6. Jubiliant Foodworks Limited 5. Reliance Retail Ventures Limited Kerala Infrastructure Fund 6. TV18 Broadcast Limited LARSEN & TOUBRO Name of the Mr. M. M. Chitale Director Memberships/ Chairman Chairmanships Audit Committee of committees 1. across all companies Larsen & Toubro Limited 2. Essel Propack Limited 3. Larsen & Toubro Infotech Limited 4. Lodha Developers Limited Nomination and Remuneration Committee 1. ASREC (India) Limited 2. Atul Limited Member Mr. M. Damodaran Chairman 7. Piramal Foundation 62 6. 5. 1. Mahindra & Mahindra Limited 1. Reliance Industries Limited Limited 2. Crisil Limited 2. other public 2. ASREC (India) Limited 3. Hero Motocorp Limited L&T Hydrocarbon Engineering Limited 2. Network 18 Media & Lodha Developers Limited Investments Limited 3. Essel Propack Limited 4. 3. Colgate-Palmolive (India) 3. Reliance Jio Infocomm Limited including private companies 4. Atul Limited 5. Interglobe Aviation Limited Limited 4. Cipla Limited companies 61 Limited 3. L&T Investment Management Name of the Director Mr. M. V. Satish Date of Birth February 12, 1957 Date of Appointment on the Board Qualifications Expertise January 29, 2016 BE (Civil) Vast experience in Construction, Business Development, Contracts Management and Property Development in India and GCC region 1. L&T Aviation Services Private Mr. Shailendra Roy September 18, 1952 March 9, 2012 [Pursuant to Regulation 36(3) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard 2 on General Meetings] B. Tech Mr. R. Shankar Raman Mr. J. D. Patil December 20, 1958 October 1, 2011 December 16, 1954 July 1, 2017 B.Com, ACA and ACMA Vast experience in the Finance, Taxation, Risk Management, Legal and Investor Relations M.Tech (Mechanical Engineering) Vast Experience in Defence and Aerospace Industry Directorships held in other public companies including private companies which are subsidiaries of public companies (excluding Vast experience in Thermal Power, Heavy Engineering, Defence & Aerospace Industry foreign companies) ANNUAL GENERAL MEETING (ANNEXURE TO NOTICE DATED MAY 10, 2019) None of the Directors and/or Key Managerial Personnel of the Company and/or their relatives are concerned or interested in resolution no. 13. Item No. 14: The Company requires adequate capital to meet the needs of growing business. While it is expected that the internal generation of funds would partially finance the need for capital, fund raising would be another source of funds and hence it is thought prudent for the Company to have enabling approvals to raise a part of the funding requirements for the said purposes as well as for such other corporate purposes as may be permitted under applicable laws through the issue of appropriate securities as defined in the resolution, in Indian or international markets. The fund raising may be through a mix of equity/ equity- linked instruments, as may be appropriate. Members approval is sought for the issue of equity shares, securities linked to or convertible into Equity Shares or depository receipts of the Company. SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 also provide that the Company shall, in the first instance, offer all Securities for subscription pro-rata to the Shareholders unless the Shareholders in a general meeting decide otherwise. Members approval is sought for issuing any such instrument as the Company may deem appropriate to parties other than the existing shareholders. Whilst no specific instrument has been identified at this stage, in the event the Company issues any equity linked instrument, the issue will be structured in a manner such that the additional share capital that may be issued would not be more than 5% of the paid-up capital of the Company (as at the date when the Board recommended passing of the Special Resolution). The equity shares, if any, allotted on issue, conversion of securities shall rank in all respects pari passu with the existing Equity Shares of the Company. The Company may also opt for issue of securities through Qualified Institutions Placement (QIP). A QIP of the shares of the Company would be less time consuming and more economical than other modes of raising capital. Accordingly, the Company may issue securities by way of a QIP in terms of Chapter VI of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 ('SEBI Regulations'). These securities will be allotted only to Qualified Institutional Buyers (QIBS) as per the SEBI Regulations and there will be no issue to retail individual investors and existing retail shareholders. The resolution proposed is an enabling resolution and the exact price, proportion and timing of the issue of the securities will be decided by the Board based on an analysis of the specific requirements after necessary consultations. Therefore, the proposal seeks to confer upon the Board the absolute discretion to determine the terms of issue in consultation with the Lead Managers to the Issue. As per Chapter VI of the SEBI Regulations, an issue of securities on QIP basis shall be made at a price not less than the average of the weekly high and low of the closing prices of the related shares quoted on the stock exchange during the two weeks preceding the "relevant date." The Board may, at its absolute discretion, issue equity shares at a discount of not more than five percent or such other discount as may be permitted under applicable regulations to the 'floor price' as determined in terms of the SEBI Regulations, subject to Section 53 of the Companies Act, 2013. As the pricing of the offer cannot be decided except at a later stage, it is not possible to state the price of shares to be issued. However, the same would be in accordance with the provisions of the SEBI Regulations, the Companies Act, 2013, or any other guidelines / regulations / consents as may be applicable or required. In case of issue of convertible bonds and/or equity shares through depository receipts the price will be determined on the basis of the current market price and other relevant guidelines. i) The "relevant date" for the above purpose, shall be in case of allotment of equity shares, the date of meeting in which the Board decides to open the proposed issue ii) in case of allotment of eligible convertible securities, either the date of the meeting in which the Board decides to open the issue of such convertible securities or the date on which the holders of such convertible securities become entitled to apply for the equity shares, as may be determined by the Board. The Stock Exchange for the same purpose is BSE Limited / National Stock Exchange of India Limited. The Shareholders through a resolution passed at their meeting held on August 22, 2017, had approved issue of Securities for an aggregate sum of up to US$ 600 Million (or its rupee equivalent) or INR 4000 Crore, if higher. The Company has not raised any funds under the said approval. However, Shareholders resolution for QIP issuance is valid for a period of 12 months from the date of passing of the resolution. Accordingly, the 59 DETAILS OF DIRECTORS SEEKING APPOINTMENT/RE-APPOINTMENT AT THE FORTHCOMING 60 Shareholders approval is sought for renewal of the approval. The Board recommends this Resolution for approval of the Shareholders. None of the Directors and / or Key Managerial Personnel of the Company and/or their relatives are concerned or interested, in the resolution set out at Item No. 14, except to the extent of their shareholding in the Company. Item No. 15: In accordance with the provisions of Section 148 of the Companies Act, 2013 ("the Act") and the Companies (Audit and Auditors) Rules, 2014 ("the Rules") the Company is required to appoint a cost auditor to audit the cost records of the Company, for products and services, specified under Rules issued in pursuance to the above section. On the recommendation of the Audit Committee, the Board of Directors had approved the appointment of M/s. R. Nanabhoy & Co, Cost Accountants (Regn. No. 00010), as the Cost Auditors of the Company to conduct audit of cost records maintained by the Company for the Financial Year 2019-20, at a remuneration of 13.00 lakhs plus applicable taxes and out of pocket expenses at actuals for travelling and boarding/lodging. M/s. R. Nanabhoy & Co., Cost Accountants, have furnished certificates regarding their eligibility for appointment as Cost Auditors of the Company. In accordance with the provisions of Section 148 of the Act read with the Rules, the remuneration payable to the cost auditor has to be ratified by the shareholders of the Company. Accordingly, consent of the members is sought for the aforesaid purpose. The Board recommends this resolution for approval of the shareholders. None of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 15. Mumbai, May 10, 2019 By Order of the Board of Directors For LARSEN & TOUBRO LIMITED N. HARIHARAN COMPANY SECRETARY M.NO - A3471 The route map for the venue of the Annual General Meeting of the Company is given on page 46 of this Annual Report 2018-19 LARSEN & TOUBRO NOTICE ANNUAL REPORT 2018-19 Audit Committee 1. CRISIL Limited Memberships/ Nil Chairmanships of committees across all Limited 9. L&T Power Limited Member Member Nil Nomination and Remuneration Audit Committee Committee 1. L&T Finance Holdings Limited 1. L&T-MHPS Turbine Generators Private Limited 2. L&T Infrastructure Development | Projects Limited 2. L&T-MHPS Boilers Private Limited 3. L&T Metro Rail (Hyderabad) Limited Nabha Power Limited L&T Special Steels and Heavy Forgings Private Limited 1. Stakeholders Relationship Committee Larsen & Toubro Limited Corporate Social Responsibility Committee L&T Power Development Limited 3. L&T Metro Rail (Hyderabad) Limited Nomination & Remuneration Committee L&T Infrastructure Development Projects Limited Stakeholders Relationship Committee L&T Finance Holdings Limited Corporate Social Responsibility Committee 1. Larsen & Toubro Limited 2. L&T Seawoods Limited 4. companies 8. L&T Howden Private Limited Forgings Private Limited 1. L&T Power Development Limited 1. L&T Infrastructure Development 1. Projects Limited 2. L&T Shipbuilding Limited L&T MBDA Missile Systems 2. L&T-Sargent & Lundy Limited 2. L&T Finance Holdings Limited Limited 3. Nabha Power Limited 8. 3. 4. L&T-MHPS Boilers Private Limited Limited 4. Larsen & Toubro Infotech 5. L&T-MHPS Turbine Generators Private Limited 6. Raykal Aluminium Company Private Limited Limited 5. L&T Hydrocarbon Engineering Limited 6. L&T Seawoods Limited 7. L&T Special Steels and Heavy 7. L&T Realty Limited L&T Investment Management LARSEN & TOUBRO 2. Interglobe Aviation Limited Stakeholders Relationship Committee |2. Tech Mahindra Limited Risk Management Committee 1. Hero MotoCorp Limited Member The Company repaid long-term borrowings of USD 233 million (approx. 1610 crore including secured debentures of 400 crore) during the year under review on scheduled due dates. On the other hand, the Company raised USD 100 million of foreign currency borrowings and 90 Crore of Rupee Term Loan as fresh unsecured long-term borrowings for meeting business requirements and certain capital expenditure. The Company has not defaulted on any of its dues to the financial lenders. The Company's borrowings are rated by CRISIL and ICRA. The details of the same are given on page 105 in Annexure 'B' - Report on Corporate Governance forming part of this Board Report and is also available on the website of the Company. LARSEN & TOUBRO DIVESTMENT OF ELECTRICAL & AUTOMATION BUSINESS: As disclosed in our previous Report, on 1st May 2018, the Company had signed, subject to regulatory approvals, definitive agreements with Schneider Electric, a global player in energy management and automation for strategic divestment of its Electrical and Automation (E&A) business for an all-cash consideration of 14,000 crore. The Company has been informed by Schneider Electric that it has received a communication dated 18th April 2019 from the Hon'ble Competition Commission of India (CCI) approving the proposed combination subject to the amendment filed by Schneider Electric. The Company is awaiting the detailed order of the CCI and the timelines for divestment cannot be ascertained as of now and are expected to be prolonged. In view of the above, the E&A business is disclosed as a continuing operation and has not been classified as discontinued operation as on March 31, 2019. BUYBACK OF EQUITY SHARES: The Company had proposed a buyback of up to 6,10,16,949 equity shares from its equity shareholders as on the record date, being October 15, 2018, on a proportionate basis by way of the tender offer route through the stock exchange mechanism at a price of * 1,475 per equity share, aggregating up to 9,000 crore, in accordance with the applicable provisions of the Companies Act, 2013 and the Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 2018 ('Buyback Regulations' and such buy back herein after referred to as 'Buyback'), inter alia, considering the debt-equity ratio requirement on the basis of standalone financial statements, post buyback. Pursuant to the approval of the Buyback by the shareholders of the Company, a draft letter of offer ('DLOF') was submitted to the Securities and Exchange Board of India ('SEBI') in terms of Regulation 8(i)(a) of the Buyback Regulations, for their comments. By way of a letter dated 18th January 2019, SEBI advised the Company not to proceed with the buyback offer since the ratio of the aggregate of secured and unsecured debts owed by the Company and its subsidiaries after buyback (assuming full acceptance) would be more than twice the paid-up capital and free reserves of the Company based on consolidated financial statements of the Company. Accordingly, the Company decided not to proceed with the buyback. CAPITAL EXPENDITURE: As at 31st March 2019 the gross property, plant and equipment, investment property and other intangible assets including leased assets, stood at 12,174.29 crore and the net property, plant and equipment, investment property and other intangible assets, including leased assets, at 7,934.32 crore. Capital Expenditure during the year amounted to 1,571.41 crore. DEPOSITS: The Company has not accepted deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013. The Company does not have any unclaimed deposits as of date. All unclaimed deposits have been transferred to Investor Education & Protection Fund. Pursuant to the Ministry of Corporate Affairs (MCA) notification dated 22nd January 2019 amending the Companies (Acceptance of Deposits) Rules, 2014, the Company is required to file with the Registrar of Companies (ROC) requisite returns in Form DPT-3 for outstanding receipt of money/loan by the Company, which is not considered as deposits. The Company would be complying with this requirement within the prescribed timelines. DEPOSITORY SYSTEM: As the members are aware, the Company's shares are compulsorily tradable in electronic form. As on 31st March 2019, 98.47% of the Company's total paid up capital representing 138,13,25,258 shares are in dematerialized form. SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 mandate that the transfer, except transmission and transposition, of securities shall be carried out in dematerialized form only with effect from 1st April 2019. In view of the numerous advantages offered by the Depository system as well as to avoid frauds, members holding shares in physical mode are advised to avail of the facility of dematerialization from either of the depositories. The Company has, directly as well as through its RTA, sent intimation to shareholders who are holding shares in physical form, advising them to get the shares dematerialized. 65 BOARD REPORT ANNUAL REPORT 2018-19 66 TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND: The Company sends reminder letters to all shareholders, whose dividends are unclaimed so as to ensure that they receive their rightful dues. Efforts are also made by the Company in co-ordination with the Registrar to locate the shareholders who have not claimed their dues. During the year, the Company has transferred a sum of 3,93,12,966 to Investor Education & Protection Fund (IEPF), the amount which was due & payable and remained unclaimed and unpaid for a period of seven years as provided in section 125 of the Companies Act, 2013 and the rules made thereunder. Despite the reminder letters sent to each shareholder, this amount remained unclaimed and hence was transferred. Cumulatively, the amount transferred to the said fund was 24,34,13,796 as on 31st March 2019. The Company has also sent communications to members whose dividends are unclaimed requesting them to provide/update bank details with RTA/Company, so that dividends paid by the Company are credited to the investor's account on time. In accordance with the provisions of the Section 124(6) of the Companies Act, 2013 and Rule 6(3)(a) of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ('IEPF Rules'), the Company has transferred 3,634 equity shares of 2 each (0.0003% of total number of shares) held by 257 shareholders (0.024 % of total shareholders) to IEPF. The said shares correspond to the dividend which had remained unclaimed for a period of seven consecutive years from the financial year 2010-11. Subsequent to the transfer, the concerned shareholders can claim the said shares along with the dividend(s) by making an application to IEPF Authority in accordance with the procedure available on www.iepf.gov.in and on submission of such documents as prescribed under the IEPF Rules. During the year under review, the Company allotted 13,59,929 equity shares of 2/- each upon exercise of stock options by the eligible employees under the Employee Stock Option Schemes. CAPITAL & FINANCE: The total income for the financial year under review was *89,757 crore as against 76,224 crore for the previous financial year registering an increase of 18%. The 17527.67 14250.01 6677.70 5387.30 Add: Balance brought forward from previous year 14250.01 11225.53 Less: Ind AS 115 transition adjustment 701.58 Less: Dividend paid during the previous year (Including dividend distribution tax) 2596.78 2278.69 Add: Gain/(Loss) on remeasurement of the net defined benefit plans The Company sends specific advance communication to the concerned shareholders at their address registered with the Company and also publishes notice in newspapers providing the details of the shares due for transfer so as to enable them to take appropriate action. The shareholder/ claimant can file only one consolidated claim in a financial year as per the IEPF rules. All corporate benefits accruing on such shares viz. bonus shares, etc. including dividend shall be credited to IEPF. (20.36) Add: Transfer under scheme of arrangement 15.55 profit before tax from continuing operations including exceptional items was 9,218 crore for the financial year under review as against 7,262 crore for the previous financial year, registering an increase of 27%. The profit after tax from continuing operations including exceptional items was 6,678 crore for the financial year under review as against 5,387 crore for the previous financial year, registering an increase of 24%. AMOUNT TO BE CARRIED TO GENERAL RESERVE: The Company has not transferred any amount to the general reserve during the current financial year. DIVIDEND: The Directors recommend payment of dividend of 18 (900%) per equity share of 2/- each on the share capital amounting to 2,759 crore (including DDT amounting to * 234 crore). The Dividend is based upon the parameters mentioned in the Dividend Distribution Policy approved by the Board of Directors of the Company which is in line with regulation 43A of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The Policy is provided as Annexure 'G' forming a part of this Board Report and also uploaded on the Company's website at http://investors.larsentoubro.com/Listing-Compliance.aspx. Balance available for disposal (which the Directors appropriate as follows) Less: Debenture Redemption Reserve Balance to be carried forward STATE OF COMPANY AFFAIRS: 17608.99 14352.19 81.32 102.18 2.50 SUBSIDIARY / ASSOCIATE / JOINT VENTURE COMPANIES: During the year under review, the Company subscribed to / acquired equity / preference shares in various subsidiary / associate/joint venture companies. These subsidiaries include companies in power, defence and infrastructure sectors. The details of investments/divestments in subsidiary companies during the year are as under: A) Shares acquired during the year: Name of the Company L&T Construction Machinery Equity Limited venture companies and their contribution to the overall performance of the Company is provided on pages 546 to 555 of this Annual Report. The Company has formulated a policy on identification of material subsidiaries in line with Regulation 16(c) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 and the same is placed on the website at http://investors.larsentoubro.com/Listing-Compliance. aspx. The Company does not have any material subsidiaries. PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN OR SECURITY PROVIDED BY THE COMPANY: The Company has disclosed the full particulars of the loans given, investments made or guarantees given or security provided as required under section 186 of the Companies Act, 2013, Regulation 34(3) and Schedule V of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 in Note 37 and Note 38 forming part of the financial statement. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES: The Audit Committee and the Board of Directors have approved the Related Party Transactions Policy, signifying the threshold limits and the same has been uploaded on the Company's website http://investors.larsentoubro.com/ Listing-Compliance.aspx. The Company has a process in place to periodically review and monitor Related Party Transactions. All the related party transactions were in the ordinary course of business and at arm's length. The Audit Committee has approved all related party transactions for the FY 2018-19 and estimated transactions for FY 2019-20. There were no materially significant related party transactions that may have conflict with the interest of the Company. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY, BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT: Other than stated elsewhere in this report, there are no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this report. 67 68 L&T Trustee Company Private Limited 8th August 2018 D) Performance and Financial Position of subsidiary / associate and joint venture companies: A statement containing the salient features of the financial statement of subsidiary / associate/joint BOARD REPORT ANNUAL REPORT 2018-19 Information as required to be given under Section 134(3) (m) read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is provided in Annexure 'A' forming part of this Board Report. RISK MANAGEMENT: The Company has formulated a risk management policy and has in place a mechanism to inform the Board Members about risk assessment. The risk assessment includes review of geo-political developments, business environment, growth opportunities, geographical expansion, capability development, talent management, brand and reputation protection and enhancement, cyber security and risk minimization initiatives. The Committee periodically reviews the risk to ensure that executive management controls risk by means of a properly designed framework. A detailed note on risk management is given under financial review section of the Management Discussion and Analysis on pages 296 to 298 of this Annual Report. CORPORATE SOCIAL RESPONSIBILITY: The Corporate Social Responsibility Committee comprises of Mr. Vikram Singh Mehta, Mr. R. Shankar Raman and Mr. D. K. Sen as the Members. Mr. Vikram Singh Mehta is the Chairman of the Committee. The CSR policy framework is available on the website http://investors.larsentoubro.com/Listing-Compliance. aspx. A brief note regarding the Company's initiatives with respect to CSR is given in Annexure 'B' - Report on Corporate Governance forming part of this Board Report. Please refer to pages 96 and 97 of this Annual Report. The disclosures required to be given under Section 135 of the Companies Act, 2013 read with Rule 8(1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014 are given in Annexure 'C' forming part of this Board Report. DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL APPOINTED/ RESIGNED DURING THE YEAR: Mr. M.M Chitale, Mr. M. Damodaran and Mr. Vikram Singh Mehta were appointed as Independent Directors of the Company with effect from April 1, 2014 to March 31, 2019. Pursuant to the recommendation of the Nomination and Remuneration Committee, the Board at its Meeting held on March 5, 2019 has approved the re-appointment of Mr. M.M Chitale, Mr. M. Damodaran and Mr. Vikram Singh Mehta for a further term of five years from April 1, 2019 to March 31, 2024, subject to the approval of shareholders through special resolution. Special resolution for continuation of Mr. M. Damodaran as an Independent Director, who would attain the age of 75 years during his current tenure forms part of the Notice being sent to the shareholders. Mr. Adil Zainulbhai was appointed as Independent Director of the Company with effect from May 30, 2014 to May 29, 2019. Pursuant to the recommendation of the Nomination and Remuneration Committee, the Board at its Meeting held on March 5, 2019 has approved the re-appointment of Mr. Adil Zainulbhai for a further term of five years from May 29, 2019 to May 28, 2024, subject to the approval of shareholders through special resolution. Based on their skills, experience, knowledge and report of their performance evaluation, the Board was of the opinion that their association would be of immense benefit to the Company and it would be desirable to avail their services as Independent Directors. Mr. Subhodh Bhargava was re-appointed as Independent Director with effect from March 30, 2017 for a second term of five years which was approved by the shareholders through a special resolution. At the time of his re-appointment, he had attained the age of 75 years and accordingly he shall continue in his present term until March 29, 2022. His re-appointment is in compliance with regulation 17(1A) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 which was effective from 9th May 2018. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO: Profit for the period carried to Balance Sheet Date of Strike Off 26th June 2018 26th June 2018 Pursuant to the application made in the previous year, the following companies were struck off by Ministry of Corporate Affairs under the provisions of Companies Act, 2013 during the year under review: L&T Metro Rail (Hyderabad) Limited L&T MBDA Missile Systems Limited Type of Shares No. of shares 10,000 Equity 22,01,98,631 Equity 4,84,500 L&T Uttaranchal Hydropower Preference Limited 24,94,00,000 The Company has entered into a share purchase agreement dated 18th March 2019 with Mr. V. G. Siddhartha, Coffee Day Trading Limited and Coffee Day Enterprises Limited ('Sellers') for acquisition of 3,33,60,229 equity shares of Mindtree Limited aggregating to 20.32% of the paid-up equity share capital of Mindtree Limited. The Company proposed to acquire, subject to the regulatory approvals, additional equity shares upto 15% of the voting share capital from the stock exchanges and make an open offer aggregating to 31% of the voting share capital of Mindtree Limited, in accordance with the requirements of SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 2011. The Company has since received the approval from Competition Commission of India and Anti-trust authorities of US and Germany. Pursuant to the above, the Company has acquired 3,27,60,229 equity shares of Mindtree Limited from the Sellers on 30th April 2019. Further, 98,29,859 equity shares of Mindtree Limited have been acquired in the open market upto 9th May 2019. Subsequent to the year under review, the Company has acquired entire stake held by Tamil Nadu Industrial Development Corporation (TIDCO) in L&T Shipbuilding Limited on 10th April 2019. With this acquisition, L&T Shipbuilding Limited is now a wholly owned subsidiary of the Company. Name of the Company Seawoods Retail Private Limited Seawoods Realty Private Limited LARSEN & TOUBRO the year: Name of the Company Marine Infrastructure Developer Private Limited (Note 1) L&T Technology Services Limited (Note 2) Larsen & Toubro Infotech Limited (Note 2) L&T Seawoods Limited (Note 3) Note: 1. 2. 3. Number of shares 38,80,00,000 87,71,569 1,29,09,603 34,50,00,000 The Company has sold its entire stake in Marine Infrastructure Developer Private Limited, a subsidiary, to Adani Ports and Special Economic Zone Ltd. The Company has sold shares of L&T Technology Services Limited and Larsen & Toubro Infotech Limited in the open market towards meeting its mandatory obligation to reduce promoter shareholding in these companies. With the above sale, the minimum public shareholding obligation in Larsen & Toubro Infotech Limited has been complied. Pursuant to an order dated 13th December 2018 passed by the National Company Law Tribunal, Mumbai bench, the equity share capital of L&T Seawoods Limited, a wholly owned subsidiary, was reduced to the extent of 34.50 crore shares aggregating to 345 crore. Subsequent to the year under review, the Company has divested its entire stake in L&T Kobelco Machinery Private Limited, a subsidiary, to Kobe Steel, Ltd. on 17th April 2019. C) Companies Struck off: B) Equity shares sold / transferred / reduced during Less: Provision for tax Profit before tax 8743.24 6831.85 474.93 430.53 Co. Private Limited 4. 3. R R Kabel Limited 4. Atul Limited Tech Mahindra Limited Nomination and Remuneration Committee 1. Colgate-Palmolive (India) Limited 2. Reliance Jio Infocomm Limited 2. Nomination and Remuneration 1. CRISIL Limited Mahindra and Mahindra Limited Biocon Limited 3. Limited 2. 4. TV18 Broadcast Limited Committee 1. Principal Asset Management Company Private Limited 2. Essel propack Limited 3. Lodha Developers Limited 4. R R Kabel Limited Corporate Social Responsibility Committee 1. ASREC(India) Limited 2. Essel Propack limited Interglobe Aviation Limited Stakeholders Relationship Committee 1. Hero MotoCorp Limited Risk Management Committee 1. Tech Mahindra Limited Reliance Retail Ventures 3. Jubiliant Foodworks Limited 3. Larsen & Toubro Limited Mr. Vikram Singh Mehta Chariman Corporate Social Responsibility Committee 1. Larsen & Toubro Limited Stakeholders Relationship Committee 1. Jubiliant Foodworks Limited Member Audit Committee 1. Colgate-Palmolive (India) Limited 2. Jubiliant Foodworks Limited 3. HT Media Limited Nomination and Remuneration Committee Mr. Adil Zainulbhai Chairman Audit Committee 1. Network 18 Media & Investment Limited 2. Principal Asset Management 2. 3. Reliance Retail Ventures Limited 4. TV18 Broadcast Limited Stakeholders Relationship Committee Network 18 Media & Investment Limited Corporate Social Responsibility Committee 1. Network 18 Media & Investment Limited Audit Committee Audit Committee 1. Hero MotoCorp Limited 1. ASREC (India) Limited 2. Reliance Jio Infocomm Limited 1. CRISIL Limited Corporate Social 1. Mahindra and Mahindra Limited directors inter-se 225 Shares 1327 Shares 150 shares Nil Nil Nil 63 64 BOARD REPORT ANNUAL REPORT 2018-19 Board Report Dear Members, The Directors have pleasure in presenting their 74th Annual Report and Audited Financial Statements for the year ended 31st March 2019. between FINANCIAL RESULTS: 2017-18 crore 9218.17 7262.38 2540.47 1875.08 Particulars Profit Before Depreciation, exceptional items & Tax 9811.19 7881.31 Less: Depreciation, amortization, impairment and obsolescence 1067.95 1049.46 Profit before exceptional items and tax Add: Exceptional Items 2018-19 crore Responsibility Committee Nil Directors Nomination and Remuneration Committee 1. Reliance Industries Limited 2. Cipla Limited 2. L&T Hydrocarbon Engineering Risk Management Committee Limited Risk Management Committee 1. Colgate-Palmolive (India) Limited Reliance Industries Limited Member Audit Committee Reliance Industries Limited Corporate Social Responsibility Committee Cipla Limited Nomination and Remuneration Committee Larsen & Toubro Limited Relationships Reliance Retail Ventures Limited Network 18 Media & Investment Limited TV18 Broadcast Limited Risk Management Committee Cipla Limited 9 of 9 Number of 9 of 9 8 of 9 8 of 9 Meetings attended during the year Shareholding 2443 Shares of Non- Executive Reliance Jio Infocomm Limited Mr. R. Shankar Raman, Mr. Shailendra Roy, Mr. M.V Satish and Mr. J. D. Patil retire by rotation at the ensuing AGM and being eligible offer themselves for re-appointment. The notice convening the AGM includes the proposal for re-appointment of Directors. For the year under review, the questionnaire was modified suitably, based on the comments and suggestions received from Independent Directors. As in the previous years, an external consultant was engaged to receive the responses of the Directors and consolidate/ analyze the responses. The same external consultant's IT platform was used from initiation and till conclusion of the entire board evaluation process. This ensured that the process was transparent and independent of involvement of the Management or the Company's IT system. This has enabled unbiased feedback. Companies (ESCO) in all bays for replacement of 264 nos. of Metal Halide Lamps. Retrofitting of Hydraulic Press with IE 2 class Energy efficient motor. Implementation of Smart Energy Saving function in SKODA FHB machine to sense idle operation and turn auxiliary motors off. Replacement of semitransparent FRP Roof sheets for Daylight harvesting in shops. Qualification of 15 kW small curing oven in place of 50 kW curing oven for smaller batch size . . Replacement of 150 W MH Street lights (Phase # 1) with 90 W LED fittings (12 nos.) Retrofitting of Slip Ring induction motor based EOT crane to Energy efficient Squirrel Cage motors. Identification of compressed air Leaks through Ultrasonic Leak detection system and arrest them in various shops. Implementation of Compressor leakage testing & reduction of use of compressor. Revision in heating rate in PFS shop for heat exchangers. Installation of transparent roof sheets in LEMF store. Reduction in natural gas consumption for LSR/ ISR furnace by sequential operation of furnace burners. IOT projects implementation for ESSC, SAW process to save energy and reduce cycle time at Hazira. Built Operate and Transfer (BOT) project with ZERO Capital Expenditure (CapEx) and Operating Expenditure (OpEx) with Energy Service Interlocking of coolant pump with drilling operation on Kolb Machine to avoid the idle running of coolant motor ensuring optimal utilization of electrical energy. Replacement of 22 Kw (2 no's) induction motor with new Yaskawa Drive on Gantry Yard Crane. Usage of Facing Lathe Chuck, Ravensberg Lathe Chuck and Cantilever crane LT. Plate Fabrication Shop furnace automation control with PLC and HMI. A. CONSERVATION OF ENERGY: (i) Steps taken or impact on conservation of energy: • • • . Conversion of cycle into Induction heating & effective loading leading to energy saving in furnace. • • • Implementation of LED lights in HE-Hazira campus and other project sites and Solar Pipes in SG fabrication area. Installation and Usage of Grid Power network in place of DG sets in LSR/ISR Process. Pre-heating of circular Seam with energy efficient IR Burners. Procurement of renewable energy of approximately 54 Lacs KwH for HE East & West plants. • Usage of permanent flue gas analyzers for fix type furnaces. • Installed Energy efficient burners for Furnaces and pre heating. Solar Panels installed at project sites (iii) Capital investment on energy conservation equipments: NIL B. The measures taken have resulted in savings in cost of production, power consumption and processing time at all locations. TECHNOLOGY ABSORPTION: Shift towards usage of windmill power in the place of State Electricity Board at Kanchipuram factory (i) Efforts made towards technology absorption: Usage of Triple Blend concrete for the construction of the Extradosed Bridge at Barapullah, Delhi. • • • Implementation of formwork having height of 10 metre for the first time in India at Medigadda Barrage, Telangana. Development of IOT based digital solution for concrete pour management at Medigadda Barrage, Telangana. Usage of Secant pile as a cost effective and technically viable alternative for Jet grouting Cut off at Medigadda Barrage, Telangana. Achieved better quality and faster erection time by usage of Large diameter Single stage Anchor Rod at Medigadda Barrage, Telangana. Development of IOT based digital solution for Boulder transportation management at Kundankulam Nuclear Power Plant Hydro Technical Structures Package. Innovative use of In-house designed Auger Cleaner, Rock Splitter and Rock buster to check noise and environment pollution for construction of under-ground sections at Mumbai Metro Project. • Information as required to be given under Section 134(3) (m) read with Rule 8(3) of the Companies (Accounts) Rules, 2014. • Commissioned Air Compressor with Variable Speed Drive which reduced the air pressure from 5.5 to 6.5 bar to 5.2 bar constant pressure. Utilisation of Solar Lights for lighting around compound walls. Implementation of 100% PID based LSR/ISR. Development of Smart Energy Management System at VHEW for real time trend of Energy Intensive processes with Pareto charts, report and alerts. Development of Energy efficient screw chiller with BMS system for 120T AC plant. Implemented robots on MDU DMC molding machines by improving OEE; optimizing cycle time at Ahmednagar location. Implementation of Timers for Flow Lines, Battery Chargers, Water Coolers, Auto switching off shop floor lights at Mahape location. Installation of VFD at Scrubber and FDVS system of plating shop at Vadodara. 73 74 ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 (ii) Steps taken by the Company for utilizing alternate sources of energy: • • Installation of censors in welding machines and batching plant to identify consumption of electricity in case machines are lying idle. Replacement of conventional light fittings with LED in Production/Utility areas at EWL Kancheepuram factory and Kansbahal works. Replacement of 33KV, 1250 KVA Transformer with Level II Energy efficient transformer due to failure of old transformer at EWL Kancheepuram factory. Periodically conduct "Tag-Your-Leak" survey at Kansbahal Works DE dusting line Replaced Cogged belt in Blower instead of V belt and maintained the rated RPM and avoided the V belt slippage in the pulley. Replaced vertical gland pump 5HP with AOD pump Replacement of conventional MH Lamps and fluorescent tube lights by LED lamps in working areas at office and projects as well as for street lights Replacing existing aged inefficient Split AC units with energy efficient units Utilization of Chiller for HVAC System - Campus FMD initiated and control the chiller running hour for HVAC need during holidays and extended working hours. Initiative has been taken for replacement of Air-Cooled Chiller with Water Cooled Chiller. • Annexure 'A' to the Board Report LARSEN & TOUBRO (DIN: 00001514) 69 70 BOARD REPORT ANNUAL REPORT 2018-19 ADEQUACY OF INTERNAL FINANCIAL CONTROLS: The Company has designed and implemented a process driven framework for Internal Financial Controls ("IFC") within the meaning of the explanation to Section 134(5) (e) of the Companies Act, 2013. For the year ended 31st March 2019, the Board is of the opinion that the Company has sound IFC commensurate with the nature and size of its business operations and operating effectively and no material weakness exists. The Company has a process in place to continuously monitor the same and identify gaps, if any, and implement new and/or improved controls wherever the effect of such gaps would have a material effect on the Company's operations. PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES, DIRECTORS AND CHAIRMAN: The Nomination & Remuneration Committee and the Board have laid down the manner in which formal annual evaluation of the performance of the Board, committees, individual directors and the Chairman has to be made. All Directors responded through a structured questionnaire giving feedback about the performance of the Board, its Committees, Individual directors and the Chairman. The Board Performance Evaluation inputs, including areas of improvement, for the Directors, Board processes and related issues for enhanced Board effectiveness were discussed in the meeting of the Independent Directors held on 30th November 2018 and in the subsequent Meetings of Nomination and Remuneration Committee and the Board. The Group Chairman had a discussion with all the Independent Directors individually and the Chairman of Nomination and Remuneration Committee had a discussion with all the Executive Directors individually. Most of the suggestions from the Board Evaluation exercise of FY 2017-18 have been suitably implemented such as meetings of Chairman of NRC with individual directors and Action Taken Report of Board decisions. DISCLOSURE OF REMUNERATION: The details of remuneration as required to be disclosed under the Companies Act, 2013 and the rules made thereunder, are given in Annexure 'D' forming part of this Board report. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and were operating effectively. The information in respect of employees of the Company required pursuant to Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended from time to time, is provided in Annexure 'I' forming part of this report. In terms of Section 136(1) of the Act and the rules made thereunder, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any Shareholder interested in obtaining a copy of the same may write to the Company Secretary at the Registered Office of the Company. None of the employees listed in the said Annexure is related to any Director of the Company. The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings. PROTECTION OF WOMEN AT WORKPLACE: The Company has formulated a policy on 'Protection of Women's Rights at Workplace' as per the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. The policy has been widely disseminated. The Company has constituted Internal Complaints Committees as per the above Act. There were 4 complaints received during the F.Y. 2018-19. All the 4 complaints were investigated and appropriate action was taken. Awareness workshops and training programs are conducted across the Company to sensitize employees to uphold the dignity of their colleagues at workplace specially with respect to prevention of sexual harassment. OTHER DISCLOSURES: • ESOP Disclosures: There has been no material change in the Employee Stock Option Schemes (ESOP schemes) during the current financial year. The ESOP Schemes are in compliance with Securities and Exchange Board of India (Share Based Employee Benefit) Regulations, 2014 ("SBEB Regulations"). The disclosures relating to ESOPs required to be made under the provisions of the Companies Act, 2013 and the rules made thereunder and the SBEB LARSEN & TOUBRO • Regulations together with a certificate obtained from the Statutory Auditors, confirming compliance, is provided on the website of the Company http:// investors.larsentoubro.com/Listing-Compliance.aspx. A certificate obtained from the Statutory Auditors, confirming compliance with the Companies Act, 2013 and the SBEB Regulations is also provided in Annexure 'B' forming part of this Report. COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS: Corporate Governance: Pursuant to Regulation 34 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, a Report on Corporate Governance and a certificate obtained from the Statutory Auditors confirming compliance, are provided in Annexure 'B' forming part of this Report. The Directors have laid down an adequate system of internal financial controls to be followed by the Company and such internal financial controls are adequate and operating efficiently; d) The Directors have prepared the Annual Accounts on a going concern basis; LARSEN & TOUBRO The terms and conditions of appointment of the Independent Directors are in compliance with the provisions of the Companies Act, 2013 and are placed on the website of the Company http://investors.larsentoubro. com/Listing-Compliance.aspx. The Company has also disclosed on its website http:// investors.larsentoubro.com/Listing-Compliance.aspx details of the familiarization programs to educate the Directors regarding their roles, rights and responsibilities in the Company and the nature of the industry in which the Company operates, the business model of the Company, etc. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS: This information is given in Annexure 'B' - Report on Corporate Governance forming part of this Report. Members are requested to refer to pages 82 and 83 of this Annual Report. AUDIT COMMITTEE: The Company has in place an Audit Committee in terms of the requirements of the Companies Act, 2013 read with the rules made thereunder and Regulation 18 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The details relating to the same are given in Annexure 'B' - Report on Corporate Governance forming part of this Board Report. Members are requested to refer to pages 88 to 90 of this Annual Report. COMPANY POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION: f) The Company has in place a Nomination and Remuneration Committee in accordance with the requirements of the Companies Act, 2013 read with the rules made thereunder and Regulation 19 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The details relating to the same are given in Annexure 'B' - Report on Corporate Governance forming part of this Board Report. Members are requested to refer to pages 90 to 94 of this Annual Report. com/Listing-Compliance.aspx. The Committee has also formulated a separate policy on Board Diversity. DECLARATION OF INDEPENDENCE: The Company has received Declarations of Independence as stipulated under Section 149(7) of the Companies Act, 2013 from Independent Directors confirming that he/she is not disqualified from appointing/continuing as Independent Director. The same are also displayed on the website of the Company http://investors.larsentoubro. com/Listing-Compliance.aspx. The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Companies Act, 2013. EXTRACT OF ANNUAL RETURN: As per the provisions of Section 92(3) of the Companies Act, 2013, an extract of the Annual Return in Form MGT-9 is attached as Annexure 'F' to this Report. The Annual Return of the Company will be available on its website www.larsentoubro.com. DIRECTORS' RESPONSIBILITY STATEMENT: The Board of Directors of the Company confirms: a) In the preparation of Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; b) The Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period; c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; The Committee has formulated a policy on Directors' appointment and remuneration including recommendation of remuneration of the key managerial personnel and other employees, composition and the criteria for determining qualifications, positive attributes and independence of a Director. Nomination and Remuneration Policy is provided as Annexure 'H' forming part of this Board Report and also disclosed on the Company's website at http://investors.larsentoubro. Utilization of Floating barge for batching plant set up at Mumbai Trans Harbour Link Project. Adaptation of Reverse Circulation Drill (RCD) for Marine piling at Mumbai Trans Harbour Link Project. Integrated Reporting: Pursuant to SEBI Circular on Integrated Reporting, the Company is complying with the applicable requirements of the Integrated Reporting Framework. The Sustainability Report has been replaced by an Integrated Report which tracks the sustainability performance of the organization and its interconnectedness with the financial performance, showcasing how the Company is adding value to its stakeholders. The integrated Report for the year 2017- 18 is available on the Company's website http://www.larsentoubro.com/corporate/ sustainability/integrated-report/ and the report for the year 2018-19 shall be published shortly. Statutory Compliance: The Company complies with all applicable laws and regulations, pays applicable taxes on time, takes care of all its stakeholders, ensures statutory CSR spend and initiates sustainable activities. The Auditors have confirmed that they have subjected themselves to the peer review process of Institute of Chartered Accountants of India (ICAI) and hold valid certificate issued by the Peer Review Board of the ICAI. The Auditors have also furnished a declaration confirming their independence as well as their arm's length relationship with the Company as well as declaring that they have not taken up any prohibited non-audit assignments for the Company. The Audit Committee reviews the independence and objectivity of the Auditors and the effectiveness of the Audit process. The Auditors attend the Annual General Meeting of the Company. Also see pages 98 and 99 forming part of Annexure 'B' of this Board Report. REPORTING OF FRAUD: The Auditors of the Company have not reported any instances of fraud committed against the Company by its officers or employees as specified under Section 143(12) of the Companies Act, 2013. COST AUDITORS: In view of the mandatory rotation of auditors' requirement and in accordance with the provisions of Companies Act, 2013, M/s. Deloitte Haskins & Sells LLP were appointed as Statutory Auditors for a period of 5 continuous years from the conclusion of 70th Annual General Meeting till the conclusion of 75th Annual General Meeting of the Company. Pursuant to the provisions of Section 148 of the Companies Act, 2013 and as per the Companies (Cost Records and Audit) Rules, 2014 and amendments thereof, the Board, on the recommendation of the Audit Committee, at its meeting held on 10th May, 2019, has approved the appointment of M/s R. Nanabhoy & Co., Cost Accountants as the Cost Auditors for the Company for the financial year ending 31st March 2020 at a remuneration of 13 lakhs. The Report of the Cost Auditors for the financial year ended 31st March 2019 is under finalization and shall be filed with the Ministry of Corporate Affairs within the prescribed period. The provisions of Section 148(1) of the Companies Act, 2013 are applicable to the Company and accordingly the Company has maintained cost accounts and records in respect of the applicable products for the year ended 31st March 2019. ACKNOWLEDGEMENT Your Directors take this opportunity to thank the customers, supply chain partners, employees, Financial Institutions, Banks, Central and State Government authorities, Regulatory authorities, Stock Exchanges and all the various stakeholders for their continued co-operation and support to the Company. Your Directors also wish to record their appreciation for the continued co-operation and support received from the Joint Venture partners/Associates. Date 10th May 2019 Place Mumbai For and on behalf of the Board A.M. Naik Group Chairman A proposal for ratification of remuneration of the Cost Auditor for the financial year 2019-20 is placed before the shareholders. The Integrated Report encompasses areas such as Corporate Governance, the IR & Sustainability Structure, Sustainability Roadmap 2021, Risks & Opportunities, enhancement of Financial Capital, Manufactured Capital, Intellectual Capital, Human Capital, Natural Capital and Social & Relationship Capital and alignment to sustainable development goals. It also covers strategy, business model and resource allocation. AUDITORS: The Secretarial Audit Report issued by M/s. S. N. Ananthasubramanian & Co., Company Secretaries is attached as Annexure 'E' forming part of this Board Report. MSME: The Ministry of Micro, Small and Medium Enterprises vide their Notification dated 2nd November 2018 has instructed all the Companies registered under the Companies Act, 2013, with a turnover of more than Rupees Five Hundred crore to get themselves onboarded on the Trade Receivables Discounting system platform (TREDS), set up by the Reserve Bank of India. In compliance with this requirement, the Company is in the process of registering itself on TReDS through one of the service providers. The Company would be complying with the requirement of submitting a half yearly return to the Ministry of Corporate Affairs within the prescribed timelines. VIGIL MECHANISM: As per the provisions of Section 177(9) of the Companies Act, 2013 ('Act'), the Company is required to establish an effective Vigil Mechanism for directors and employees to report genuine concerns. The Company has a Whistle-blower Policy in place since 2004 to encourage and facilitate employees to report concerns about unethical behaviour, actual/ suspected frauds and violation of Company's Code of Conduct or Ethics Policy. The Policy has been suitably modified to meet the requirements of Vigil Mechanism under the Companies Act, 2017. The policy provides for adequate safeguards against victimisation of persons who avail the same and provides for direct access to the Chairperson of the Audit Committee. The policy also establishes adequate mechanism to enable employees report instances of leak of unpublished price sensitive information. The Audit Committee of the Company oversees the implementation of the Whistle-Blower Policy. The Company has disclosed information about the establishment of the Whistle Blower Policy on its website http://investors.larsentoubro.com/corporate governance.aspx. During the year, no person has been declined access to the Audit Committee, wherever desired. Also see page 98 forming part of Annexure 'B' of this Board Report. BUSINESS RESPONSIBILITY REPORTING: The observation of the Secretarial Auditor is self-explanatory. As per Regulation 34 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, a separate section on Business Responsibility Reporting forms a part of this Annual Report (refer pages 20 to 41). During the year under review, there were no material and significant orders passed by the regulators or courts or tribunals impacting the going concern status and the Company's operations in future. 71 72 BOARD REPORT ANNUAL REPORT 2018-19 CONSOLIDATED FINANCIAL STATEMENTS: Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to Section 129(3) of the Companies Act, 2013 and Regulation 34 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 and prepared in accordance with the provisions of the Companies Act, 2013 and the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 and amendments thereof issued by the Ministry of Corporate Affairs in exercise of the powers conferred by Section 133 of the Companies Act, 2013. AUDIT REPORT: The Auditors' report to the shareholders does not contain any qualification, observation or adverse comment. SECRETARIAL AUDIT REPORT: DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS: Launched 1500 Ton Truss structure by utilizing Push Launching at Hyderabad Metro Rail Project. • Development of Insert Free Tetrapod lifting arrangement. Designed and manufactured track mounted mobile roll crusher (for Coal application). • Developed skid mounted crushing plant with impactor to meet specific customer application. Development of higher capacity surface miner KSM404 and operational in coal application. Developed segmented roll design for better service life of Roll Crusher. • Implementation of MIG welding in place of SMAW welding (ii) Benefits derived like product improvement, cost reduction, product development or import substitution: • . Usage of Analytics has resulted in Real time monitoring, Quick decision making, Multiple data source and Drill down available for Bl dashboard. Installation of specialized fixed stacker with twin track arrangement for coal handling in Port Stockyard. Usage of Smart factory has resulted in increase in productivity by 30%, reduction in cycle time, effective utilization of machine, cost control and easy and fast transaction/communication. Implementation of Smart process has resulted into additional engineering capacity, improved visualization and reduction in planning efforts. Initiation of Smart service has resulted into efficiency in communication, connecting workmen with messages, effective handling of site queries and immersive trainings for workmen. Technology Enabler to develop variants for other Platforms and to Develop Products for High Altitude survival kits. Development of Remote Operated Gun Mount (ROGM) has resulted in unleashing the potential to be incorporated in various upcoming/ in-service armored vehicles in India 77 78 ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 . Entry in light weight AUV market with immediate business potential in South Asia Development of WaterJet Propulsion system has provided indigenous solution for propulsion of high speed boats & ships. Designed rotary silo extractor for coal handling of power plant for an export order. Developed twin wagon loading system with cross transfer car & wagon positioner. • • Meters, Smart Meters, Protective Relays and Panel Meters Developed Smart and Pre-paid meter where each and every instance in power distribution will be recorded Development of different communication modules based on communication technologies in our 1 Ph & 3 Ph Whole Current & Smart Meters Development of "Closed Door operation" feature in the domestic LV Switchboards. Development of GV3N range of Gas Insulated Switchgear (GIS) and 'SMART' RMUS to cater to requirements in Smart Cities and IPDS projects. Development of feeder pillar designs (Metallic/ Non-metallic). • Development of Ethernet switches and Data concentrators to complement LV, MV product offerings. • • • • • Development of Slip power recovery system using indigenous developed IGBT based Active front End (AFE) and inverter for large Motors. Introduction of advanced Smart Metering Infrastructure with RF based L&T make Smart Meters at Indore using public and private (Govt. Community Cloud) cloud infrastructure for hosting solution required for Smart Metering. Development of LTLK MCBS for submersible pumps, typically replacing traditional rewireable fuses in agricultural sector. Optimized the capacity of Laminar cooling water system for SAIL, RSP Hot Strip Mill Project. Development of High Rate Mill Scale filtration system design and manufactured indigenously for SAIL, RSP, Hot Strip Mill Project, with basic design for the Filters from Envirotherm GmbH, Germany. Development of design of Scale Pit & Settling Tank for SAIL RSP Hot Strip Mill. Developed capability to design Single Flight Pipe Conveyors for a diameter as high as 600 mm and upto a length of 8 km. • LARSEN & TOUBRO Indigenous Sonar sensor solution for various underwater application Development of high flow concrete mix for (CFA)-Continuous flight auger system for pile system in 120 MLD Varanasi STP. Implementation of Ultra Implementation of Pile Base Grouting in a Bridge Project at Khulna Mongla. Vortex Grit Removal in Sewage Treatment Plant Year Status of absorption of & reasons for non- Import absorption, if any 2016 India's largest gravity channel UV disinfection 2017 Bioreactor) Technology Works for the 5 new pumping stations of Greater Colombo project is in progress. It is the first of its kind to be installed in India for sewage application. It operates on VORTEX Principle where the grit removal happens by tangential Centrifugal force. Grit removal efficiency is about 95 %. The major advantage of this system is that they occupy less area and thus leads to easy maintenance. This is preferred over the conventional grit removal system for its high grit removal efficiency and compactness. Fully absorbed this technology and are implementing the same with other projects like 318 MLD WWTP at Coronation Pillar, DJB - Cluster STPs. Implementing MBR Technology for 11 MLD STP and 13 MLD CETP for BIDKIN Infrastructural Development Project. Major advantage of MBR Technology includes the production of high quality effluent suited to be discharged to the surface water or to be utilized for urban irrigation. Further, it also offers small footprint, easy retrofit and upgrade of old wastewater treatment plants. MBR (Membrane 2017 The digitalization of testing activities at R&D centre will save precious time and manpower. Implementation of LIMS at the project sites enables us to build a comprehensive material performance data base and thus aide in improvement of quality of construction materials used at site. 2017 Implementing for the casting Development of accelerated mix design method for concrete using cement and cementitious materials Development of durability of concrete testing methods and correlations (iii) Information regarding technology imported during the last 3 years: S. Technology No. Imported a) Flue Gas system Desulphurization S. Technology No. Imported with the completion of the first project where L&T Power would install FGDs. d) b) UV disinfection 2016 Year Status of absorption of & reasons for non- Import absorption, if any 2016 Absorption has been initiated in FY 2016-17. Its completion is linked Development of new, cost-optimized meter platforms that offer better features, development and integration of modules to facilitate remote communication of meter data over Radio / GSM and development of Energy Meters, Pre-Paid Violet (UV) disinfection system for secondary treated wastewater. This is preferred over the conventional chlorination system which has harmful side effects due to the presence of carcinogens in residual chlorine. push type tap to all gardens and labour. Developed the Twinmaster 12S Machine Manual control device to minimize coil feeding and setting time for increasing the productivity. Developed autonomous UnderWater Vehicle (AUV), AMOGH, meeting Indian Navy requirements for underwater surveillance. Technology absorption from National Institute of Ocean Technology, Chennai for Remote Operated Vehicles (ROV) for 500m to 6000m for unmanned underwater intervention & support like diver support, Submarine rescue, mine counter measure, etc Technology absorption from National Institute of Oceanography, Goa for Autonomous Underwater Vehicle (AUV) Maya- 200m configurable to meet military & civilian application. Implemented Integrated Life Support System - for Tejas Aircraft (Oxygen Generation System) • • . . Optimization of design for internals of Nuclear Steam Generator. • Developed Chemical Warfare Agent Detection System Designed absorption of K9 armoured vehicle manufacturing technology from Korea Development of complete turn-key solution consisting of Search radar, Track radar & antiaircraft Gun Development of Manoeuvrable Expandable Aerial Target (MEAT) which includes Airframe design, Avionics development including in house Flight Control Computer. Development of Catapult Bungee Launcher. Developed Fire Control Radar which tracks radar for short range air defence application. Developing swarming algorithms and implementation with a cluster of UAVs. Development of fully mechanized remote . weapon station for guns giving capability to fire without being exposed to enemy. Optimization of design of support arrangement in Heavy Reactors. Designing of Synloop Boiler with conventional 'U' type configuration. To develop the clamping system in P42 manual bending machine to minimize the man power (helper). Installed strand jack arrangement for skidding and lowering of objects in shipbuilding. LARSEN & TOUBRO • . . • • Development of Phosphoric Acid Heaters with metallic tubes. • • Usage of Analytics tools such as BI Dashboard: 15/30, PROTON, CREMS and ConstZon. Utilization of smart stations, smart officer with 20+ applications, asset trackers in the factories. Initiated use of Drawing Automation, Advance Metrology, Advanced NDT and IEMQS- Operational under SMART processes. Implementation of Workmen Management System (Uberization), Smart Glass, Safety through VR under SMART service. Development of capabilities in High-end Finite Element Analysis including advanced non-linear FEA, Analysis of complex Heat Exchanger models etc. Development of capability for CFD simulation in areas such as Conjugate Heat Transfer analysis and analysis with Reaction kinetics. Technology for Simulation of Manufacturing processes such as multi-layer weld overlay, heat treatment and forming and its application for ongoing jobs. • Complete WaterJet Propulsion system developed in-house to benchmark performance against imported system for IBs. . Development of design of Avionics LRUS casting Development of accelerated mix design method for concrete using PPC, OPC+Fly ash and OPC of high strength cement of 53 grade. Development of durability of concrete testing methods and correlations Evaluation of light gauge sections for formwork Development of pre-stressing strands relaxation test facility as per IS 14268 and ASTM A416 Development of maturity curves for tetra mix concrete Determining the suitable anchor cone assembly for climbing formwork Evaluation of the proximity switches for nuclear projects under various environmental conditions Development of customized DBM mix designed at LTCRTC for extreme weather conditions were approved and adopted for construction at Bar Bilara Jodhpur Road Project, Rajasthan. Controlled low strength material-CLSM has been implemented at CSTI administrative block to fill the hollow portions below the tiles due to improper consolidation / settlement of soils Geo-concrete is placed for a ramp portion of heavy vehicle service station at Kanchipuram yard • • Development of high flow concrete mix for (CFA)-Continuous flight auger system for pile . Introduced DG500 KVA AMF panel to turn on automatically the EB & DG and implementation of online monitoring system. Implemented online monitoring of Water meters & report generation automatically, energy meter readings and monitoring shop wise consumption at Formwork unit. Implemented online LPG consumption monitoring system in Paint shop for monitoring efficient gas consumption. Online seamless data transfer system implemented for water consumption monitoring. Monitoring LPG Leakage system implemented in LPG line to reduce the wastage at Formwork Factory, Puducherry. Development of P55 manual bending machine fixtures as per site requirement. Development of Robomaster Double Bender Sleeve for TL Projects 16mm short length hook job bending. Developed High Power high efficiency DC-DC converters with critical technology for increasing the endurance for Air independent propulsion (AIP) systems. Implementation of stirrup making machine magnet tray for coil iron dust collecting, to segregate iron dust and mud separately. Reduction in water consumption through arresting the leakage and replacement with new CFA pile casting using high flow concrete at NPCIL Project in Haryana through DFI. Quantitative data analytics on HSD rebar mechanical properties Complete digitization of the testing activities at R&D laboratory with implementation of Laboratory Information Management Software (LIMS). Automation of RO plant and receipt of the running parameters by SMS such as pressure flow, reject water volume, total consumption, PH, TDS. Development of in-house "Chloride Migration Test" set-up for qualification of concrete mixes for mega structures. Designing of high resilient modulus (in excess of 3000 MPa) dense bituminous macadam mixes for major highway project. Development of non-destructive Testing and geotechnical investigation of India's longest bridge (Dhola-Sadia Bridge) in Assam. Establishment of state of art testing facility for Geosynthetic materials used for various applications in construction projects. 75 with Standby Engine Instrument and Standby Instrumentation System for Helicopter Platforms Work in progress with IIT Delhi under IMPRINT program for real-time imaging sonar suitable for variety of applications like AUVs, ROVS, Divers, etc 76 ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 Designing and construction of Geocell and Geogrid stabilized base layers for heavy duty pavements. • Launch of the new R&D brochure highlighting the capabilities and achievements of the R&D centre. • Establishment of state of art chemical testing facility for construction materials especially testing of potable water, industrial water and sewer waste water. • Development of System for underwater Acoustic Signal Monitoring • . • 9 ID Mr. Thomas Mathew T. NO 2 9 NED Mrs. Sunita Sharma (Note 1) YES YES 9 ID Mr. Akhilesh Gupta 9 9 9 Attendance at last AGM YES 9 NED Mr. Subramanian Sarma ID YES 9 9 ID Mr. Ajay Shankar attended No. of Board Meetings Meetings held during the year LARSEN & TOUBRO Category Name of Director 9 Mr. Adil Zainulbhai YES 1 ID YES 9 9 ED Mr. M. M. Chitale Mr. J. D. Patil YES 8 9 ED YES 9 9 9 9 1 9 ID NED Mr. Sushobhan Sarker (Note 1) $ YES 8 9 ID Mr. Vikram Singh Mehta YES 8 9 ID Mr. M. Damodaran YES 9 9 Mr. Subodh Bhargava YES Mr. R. Shankar Raman ID Vice-Chairman Non-Executive Chairman Non-Executive Chairman Chief Executive Officer and Managing Director Vice-Chairman Group Chairman Category of Directorship Larsen & Toubro Limited L&T Metro Rail (Hyderabad) Limited Chairman Larsen & Toubro Infotech Limited L&T Finance Holdings Limited L&T Infrastructure Development Projects Limited Larsen & Toubro Infotech Limited L&T Technology Services Limited Larsen & Toubro Limited Larsen & Toubro Limited Names of Listed entities where he holds Directorship Mr. Shailendra Roy Mr. S. N. Subrahmanyan Mr. A. M. Naik Larsen & Toubro Infotech Limited L&T Technology Services Limited L&T Metro Rail (Hyderabad) Limited Larsen & Toubro Limited Whole-time Director and Chief Financial Officer Non-Executive Director Non-Executive Director ED 84 83 Whole-time Director Whole-time Director Whole-time Director Larsen & Toubro Limited Mr. J. D. Patil Larsen & Toubro Limited Mr. M. V. Satish Larsen & Toubro Limited Mr. D. K. Sen Nabha Power Limited Non-Executive Director Whole-time Director Non-Executive Director Non-Executive Director Name of Director The names of the listed entities (whose equities and debt securities are listed) wherein the Director holds directorships as on 31st March 2019 are as follows: None of the Directors hold the office of director in more than the permissible number of companies under the Companies Act, 2013 or Regulation 17A of the SEBI LODR Regulations. ID Independent Director NED Mr. Arvind Gupta (Note 2) YES 9 9 ID Mr. Narayanan Kumar YES 8 9 ID Mr. Sanjeev Aga ΝΟ 9 9 9 Ms. Naina Lal Kidwai 8 Mr. Hemant Bhargava (Note NED - Non-Executive Director 2. 1. None of the above Directors are related inter-se. CEO & MD - Chief Executive Officer & Managing Director Group Chairman GC * Appointed as a Director w.e.f. 28th May 2018 $ - Ceased to be a Director w.e.f. 2nd May 2018 2. Representing equity interest of SUUTI Meetings held during the year are expressed as number of meetings eligible to attend. Note: 1. Representing equity interest of LIC NO 2 7 NED * YES Mr. M. V. Satish ED - Executive Director YES Foreign Exchange earned 2018-19 crore FOREIGN EXCHANGE EARNINGS AND OUTGO: C. customers' needs. 20211.96 adapting to International Processing Machines by designing, developing Indigenized Rubber protect health of the public. 3D Virtual Reality 2017 Model in CTP-14 g) Platen Heating System specifications and 20212.38 Enhancing the demonstration capabilities for the civil components viz., track, embankment, bridges, drain, retaining wall, etc. (ii) Executive Management - by the Corporate Management comprising of the, Chief Executive Officer and Managing Director, 5 Executive Directors and 1 Non-Executive Director. (i) Strategic Supervision – by the Board of Directors comprising the Executive, Non-Executive Directors and Independent Directors. - The Company has four tiers of Corporate Governance structure, viz.: C. THE GOVERNANCE STRUCTURE The Company's essential character revolves around values based on transparency, integrity, professionalism and accountability. At the highest level, the Company continuously endeavors to improve upon these aspects on an ongoing basis and adopts innovative approaches for leveraging resources, converting opportunities into achievements through proper empowerment and motivation, fostering a healthy growth and development of human resources to take the Company forward. The Company believes that sound Corporate Governance is critical for enhancing and retaining investor trust and your Company always seeks to ensure that its performance goals are met accordingly. The Company has established systems and procedures to ensure that its Board of Directors is well informed and well equipped to fulfill its overall responsibilities and to provide management with the strategic direction needed to create long term shareholders value. The Company has adopted many ethical and transparent governance practices even before they were mandated by law. The Company has always worked towards building trust with shareholders, employees, customers, suppliers and other stakeholders based on the principles of good corporate governance. COMPANY'S CORPORATE GOVERNANCE PHILOSOPHY Corporate Governance is a set of principles, processes and systems which govern a company. The elements of Corporate Governance are independence, transparency, accountability, responsibility, compliance, ethics, values and trust. Corporate Governance enables an organization to perform efficiently and ethically generate long term wealth and create value for all its stakeholders. B. A. CORPORATE GOVERNANCE Annexure 'B' to the Board Report ANNEXURE TO THE BOARD REPORT I ANNUAL REPORT 2018-19 80 79 Foreign Exchange used and Electrical passenger-12-17 Building machine 2017 220kV Power Underground Analysis for 2018 Magnetic Field e) Year of No. Imported Technology S. |Import|absorption, if any & reasons for non- Status of absorption LARSEN & TOUBRO ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 cables inside (iii) Strategy & Operational Management - by the Independent Company Boards of each Independent Company (IC) (not legal entities) comprising of representatives from the Company Board, Senior Executives from the IC and independent members. Power Duct electromagnetic Unistage Tire f) 0.25% Total R&D expenditure as a percentage of total turnover 216.70 Total 168.75 Recurring (Includes customer funded *0.52 crore) 47.95 Capital 2018-19 crore Development: (iv) Expenditure incurred on Research & pollution limit set to Electromagnetic Field for Underground Cables inside Power Duct with different level depths for Amaravati Projects has been done and analyzed which henceforth concluded with a satisfactory result, Field Strength being under the acceptable (iv) Operational Management - by the Business Unit (BU) Heads. The four-tier governance structure, besides ensuring greater management accountability and credibility, facilitates increased autonomy to the businesses, performance discipline and development of business leaders, leading to increased public confidence. D. ROLES OF VARIOUS CONSTITUENTS OF CORPORATE GOVERNANCE IN THE COMPANY attended No. of Board Meetings Meetings held during the year Category Attendance at last AGM Name of Director The following is the composition of the Board of Directors as on 31st March 2019. The Directors strive to attend all the Board/Committee meetings. Their attendance at the Meetings during the year and at the last Annual General Meeting is as under: The Minutes of the proceedings of the Meetings of the Board of Directors are noted and the draft minutes are circulated amongst the Members of the Board for their perusal. Comments, if any, received from the Directors are also incorporated in the Minutes, in consultation with the Chairman. The minutes are approved and entered in the minutes book within 30 days of the Board meeting. Thereafter, the minutes are signed and dated by the Chairman of the Board at the next meeting. The Company Secretary prepares the agenda and the explanatory notes, in consultation with the Group Chairman/Chief Executive Officer & Managing Director and circulates the same in advance to the Directors. Every Director is free to suggest inclusion of items on the agenda. The Board meets at least once every quarter, inter alia, to review the quarterly results. The Company also provides Video Conference facility, if required, for participation of the Directors at the Board/Committee Meetings. Additional Meetings are held, when necessary. Presentations are made on business operations to the Board by Independent Companies / Business Units. Senior management personnel are invited to provide additional inputs for the items being discussed by the Board of Directors as and when necessary. The respective Chairman of the Board Committees apprise the Board Members of the important issues and discussions in the Committee Meetings. Minutes of Committee meetings are also circulated to the Board. The Independent Directors met on 30th November 2018 to discuss, interalia, the performance evaluation of the Board, Committees, Chairman and the individual Directors. The Meetings of the Board are generally held at the Registered Office of the Company at L&T House, Ballard Estate, Mumbai 400 001 and also if necessary, in locations, where the Company operates. The Meetings of the Board have been held at regular intervals with a time gap of not more than 120 days between two consecutive Meetings. During the year under review, 9 meetings were held on 5th April 2018, 28th May 2018, 25th July 2018, 23rd August 2018, 31st October 2018, 25th January 2019, 5th March 2019, 25th March 2019 and 26th March 2019. b. Meetings of the Board: ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 82 81 Mr. A. M. Naik The Company's policy is to have an appropriate mix of Executive, Non-Executive & Independent Directors. As on 31st March 2019, the Board comprises of the Group Chairman, the Chief Executive Officer & Managing Director, 5 Executive Directors, 4 Non-Executive Directors (3 representing financial institutions) and 11 Independent Directors, including one Independent Woman Director. The composition of the Board, as on 31st March 2019, is in conformity with the provisions of the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 ('SEBI LODR Regulations'). Mr. S. N. Subrahmanyan Mr. Shailendra Roy 9 9 ED YES 9 9 ED YES 8 9 CEO & MD YES 9 9 GC Mr. R. Shankar Raman Mr. D. K. Sen a. Composition of the Board: The strategic plan for the period 2016 - 2021 named Lakshya 2021 was developed and approved by the Board at its meeting held in May 2016. • Review of Revenue, Capital & Manpower Budget and performance there against Review of Monthly / Quarterly/Yearly financial performance Review of consolidated financials including working capital, cash flow, capital structure, etc. LARSEN & TOUBRO E. Review of major order prospects (Standalone/ Group) / "Integrated offerings" • The ECom provides a companywide operations review and plays a key role in strengthening linkages between the ICs and the Company's Board, as well as in rapidly realizing inter-IC synergies. In addition, the ECom deliberates upon strategic issues that cut across ICs and Corporate. The agenda includes: Executive Committee (ECom): The GC is the Chairman of the Board. His primary role is to provide leadership to the Board and guidance and mentorship to the CEO & MD and Executive Directors for realizing the approved strategic plan and business objectives. He presides over the Board and the Shareholders' meetings. C. b. The Group Chairman (GC): The Directors of the Company are in a fiduciary position, empowered to oversee the management functions with a view to ensuring its effectiveness and enhancement of shareholder value. The Board also reviews and approves management's strategic plan & business objectives and monitors the Company's strategic direction. Board of Directors (the Board): a. Review and discuss strategic issues which impact the entire organization, viz., BOARD OF DIRECTORS International business expansion ii. As a part of Lakshya 2016, the Company decided to have Hybrid Holdco Structure. Accordingly, 10 Independent Companies (ICs) were created. During the process of evolving Lakshya 2021, the structure was reviewed and it was decided to continue with the IC structure with modified mandate. The Company has already implemented the new mandate given by the Board and currently we have 9 ICs. Needless to mention that the IC structure has enabled the Company to empower people and achieve substantial growth in their businesses. Since 1999, developing and implementing five-year strategy plan is a regular process followed by the Company. This process called Lakshya has helped the company to achieve its growth aspirations and created value for all stakeholders. g. Independent Company Board (IC Board): The Non-Executive Directors / Independent directors play a critical role in enhancing balance to the Board processes with their independent judgment on issues of strategy, performance, resources, standards of conduct, etc., besides providing the Board with valuable inputs. The Executive Directors, as members of the Board, along with the Senior Management Personnel in the Executive Committee, contribute to the strategic management of the Company's businesses within Board approved direction and framework. They assume overall responsibility for strategic management of business and corporate functions including its governance processes and top management effectiveness. Non-Executive Directors (NED) / Independent Directors: Executive Directors (ED) / Senior Management Personnel: The CEO & MD is fully accountable to the Board for the Company's business development, operational excellence, business results, people development and other related responsibilities. f. e. d. The Chief Executive Officer and Managing Director (CEO & MD): Strategic plans and business portfolio reviews Sharing of best practices, etc. Approval of common policies iii. HR Update/ Talent Management / Service contract extensions for senior management personnel iv. Digitalization & Analytics initiatives IC synergies i. Name of Director Independent Director Names of Listed entities where he holds Directorship 2 No. of Committee No. of Committee Membership 2 8 Mr. Hemant Bhargava Mr. Arvind Gupta 0 Mr. Narayanan Kumar 4 1 No. of other company Directorships 1 Mr. Sanjeev Aga Ms. Naina Lal Kidwai Mr. Subramanian Sarma 4 0 0 5 • Annual revenue budgets and capital expenditure plans The Board of Directors has complete access to the information within the Company, which inter alia includes - Information to the Board: The details of Committee Chairmanships / Memberships are disclosed as per Regulation 26 of the SEBI LODR Regulations. Other Company Directorships includes directorships in all entities whose securities are listed. However, it excludes private limited companies, foreign companies and Section 8 companies. 0 1 0 0 4 3 2 3 0 Mr. Ajay Shankar Name of Director C. ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 2 6 Mr. Vikram Singh Mehta 4 5 6 Mr. M. Damodaran 0 1 2 Mr. Subodh Bhargava 4 3 7 Mr. M. M. Chitale 1 Quarterly results and results of operations of ICs and business segments Mr. Adil Zainulbhai 1 86 85 2 2 4 Mr. Thomas Mathew T. 1 0 1 Mrs. Sunita Sharma 0 5 0 0 Mr. Akhilesh Gupta 6 0 • • Oversight of the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible. • The role of the Audit Committee includes the following: Terms of reference: i) The Company has constituted the Audit Committee in 1986, well before it was made mandatory by law. Recommending to the Board, the appointment, re-appointment, terms of appointment and, if required, the replacement or removal of the statutory auditor and the fixation of audit fees. the respective Committee Chairperson. The role and composition of these Committees, including the number of meetings held during the financial year and the related attendance are provided below. 1) Audit Committee 88 87 The Board currently has 5 Committees: 1) Audit Committee, 2) Nomination and Remuneration Committee, 3) Stakeholders' Relationship Committee, 4) Corporate Social Responsibility Committee and 5) Risk Management Committee. The terms of reference of the Board Committees are in compliance with the provisions of the Companies Act, 2013, SEBI LODR Regulations and are also decided by the Board from time to time. The Board is responsible for constituting, assigning and co-opting the members of the Committees. The meetings of each Board Committee (except Risk Management Committee) are convened by the Company Secretary in consultation with F. BOARD COMMITTEES The above list of core skills/expertise/competencies identified by the Board of Directors as required in the context of its business(es) and sector(s) for it to function effectively, are available with the Board. Ability to have access and understand business models of global corporations, relate to the developments with respect to leading global corporations and assist the Company to adapt to the local environment, understand the geo political dynamics and its relations to the Company's strategies and business prospects and have a network of contacts in global corporations and industry worldwide. ANNEXURE TO THE BOARD REPORT | ANNUAL REPORT 2018-19 Approval of payment to statutory auditors for any other services rendered by the statutory auditors. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern. Mr. M. M. Chitale Discussion with internal auditors about any significant findings and follow up there on. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit. Reviewing, with the management, performance of statutory and internal auditors, and adequacy of the internal control systems. Reviewing, with the management, the quarterly financial statements before submission to the board for approval. Reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document/prospectus/notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter, if any. 7. Qualifications in the draft audit report. Disclosure of any related party transactions 6. 5. Compliance with listing and other legal requirements relating to financial statements 4. Significant adjustments made in the financial statements arising out of audit findings 3. Major accounting entries involving estimates based on the exercise of judgment by management 2. Changes, if any, in accounting policies and practices and reasons for the same Matters required to be included in the Director's Responsibility Statement to be included in the Board's report in terms of sub- section (5) of Section 134 of the Companies Act, 2013 1. Reviewing, with the management, the annual financial statements and the audit report before submission to the board for approval, with particular reference to: Ability to understand financial policies, accounting statements and disclosure practices and contribute to the financial/risk management policies/practices of the Company across its business lines and geography of operations Ability to envision the future and prescribe a strategic goal for the Company, help the Company to identify possible road maps, inspire and motivate the strategy, approach, processes and other such key deliverables and mentor the leadership team to channelize its energy/efforts in appropriate direction. Be a thought leader for the Company and be a role model in good governance and ethical conduct of business, while encouraging the organisation to maximise shareholder value. Should have had hands on experience of leading an entity at the highest level of management practices. Should possess domain knowledge in businesses in which the Company participates viz. Infrastructure, Power, Heavy Engineering, Defence, Hydrocarbon, Financial Services, Information Technology and Technology Services. Must have the ability to leverage the developments in the areas of engineering and technology and other areas as appropriate for betterment of Company's business. Should possess ability to develop professional relationship with the Policy makers and Regulators for contributing to the shaping of Government policies in the areas of Company business. Commitment, belief and experience in setting corporate governance practices to support the Company's robust legal compliance systems and governance policies/practices. Comments Global Experience / International Exposure Board Skill Matrix: e. The important decisions taken at the Board / Committee meetings are communicated to the concerned departments / ICs promptly. An Action Taken Report is regularly presented to the Board. d. Post-meeting internal communication system: Quarterly details of foreign exchange exposures and the steps taken by management to limit the risks of adverse exchange rate movement, if material. Compliance or Non-compliance of any regulatory, statutory nature or listing requirements and investor service such as non-payment of dividend, delay in share transfer, etc., if any • • • Developments in respect of human resources/industrial relations Any issue, which involves possible public or product liability claims of substantial nature, including any Judgment or Order, if any, which may have strictures on the conduct of the Company Any materially relevant default, if any, in financial obligations to and by the Company or substantial non-payment for goods sold or services rendered, if any Details of any joint venture, acquisitions of companies or collaboration agreement or sale of investments, subsidiaries, assets Quarterly report on fatal or serious accidents or dangerous occurrences, any material effluent or pollution problems Minutes of meeting of Board of Directors, Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility Committee • . LARSEN & TOUBRO Financing plans of the Company The matrix setting out the skills / expertise/competence of the Board of Directors is given below: Sr. Management areas & Accounts / Audit / Risk Expertise/Experience in Finance Governance including legal compliance Experience and Exposure in policy shaping and industry advocacy Industry knowledge and experience 6 5 4 3 2 Leadership 1 Attribute No Experience / Expertise / 0 9 Mr. J. D. Patil Nominee Director Chairman - Independent Director Independent Director Independent Director Independent Director Chairman- Independent Director Cipla Limited TV18 Broadcast Limited Reliance Jio Infocomm Limited Jubiliant Foodworks Limited Larsen & Toubro Limited Reliance Industries Limited Independent Director Independent Director Independent Director Independent Director Mahindra & Mahindra Limited Network 18 Media & Investment Limited Mr. Akhilesh Gupta Mrs. Sunita Sharma Mr. Thomas Mathew T. Larsen & Toubro Limited Independent Director Independent Director Larsen & Toubro Limited Non-Executive Director Independent Director Larsen & Toubro Limited Larsen & Toubro Limited Mr. Subramanian Sarma Ms. Naina Lal Kidwai Mr. Ajay Shankar Independent Director L&T Infrastructure Finance Company Limited Independent Director Independent Director Independent Director Larsen & Toubro Limited L&T Finance Holdings Limited L&T Infra Debt Fund Limited Larsen & Toubro Limited Independent Director Independent Director HT Media Limited Apollo Tyres Limited Independent Director Independent Director Independent Director Independent Director Independent Director Lodha Developers Limited Bhageria Industries Limited Larsen & Toubro Limited Batliboi Limited Mr. Subodh Bhargava Independent Director Larsen & Toubro Infotech Limited Independent Director Atul Limited Independent Director Essel Propack Limited Independent Director Larsen & Toubro Limited Category of Directorship Nicco Parks & Resorts Limited Cipla Limited Mr. M. Damodaran Independent Director Independent Director Mr. Adil Zainulbhai Independent Director Independent Director Independent Director Chairman- Independent Director Independent Director Colgate-Palmolive (India) Limited 2 Interglobe Aviation Limited Biocon Limited Tech Mahindra Limited Hero Motocorp Limited Crisil Limited Mr. Vikram Singh Mehta Larsen & Toubro Limited Max Financial Services Limited Larsen & Toubro Limited Independent Director Mr. S. N. Subrahmanyan 0 0 4 Mr. A. M. Naik No. of Committee No. of Committee Membership Directorships No. of other company Name of Director As on 31st March 2019, the number of other Directorships & Memberships / Chairmanships of Committees of the Board of Directors are as follows: Nominee Director Nominee Director Non-Executive Director Non-Executive Director Chairman Independent Director Independent Director Nominee Director Independent Director Chairman Independent Director Independent Director 3 Independent Director 2 Mr. R. Shankar Raman Altico Capital India Ltd Nayara Energy Limited 0 0 1 Mr. M. V. Satish 0 0 2 Mr. D. K. Sen 0 1 9 Mr. Shailendra Roy 0 4 0 Independent Director 8 UFO Moviez India Limited Independent Director Independent Director Chairperson Chairman and Independent Director Independent Director Independent Director Mr. Narayanan Kumar Category of Directorship Pidilite Industries Limited Larsen & Toubro Infotech Limited Larsen & Toubro Limited Mr. Sanjeev Aga Names of Listed entities where he holds Directorship LARSEN & TOUBRO Name of Director Mr. Arvind Gupta Mahindra Holidays & Resorts India Limited Independent Director LIC Housing Finance Limited ITC Limited The Tata Power Company Limited Voltas Limited Larsen & Toubro Limited The State Trading Corporation of India Limited Larsen & Toubro Limited Mr. Hemant Bhargava Bharti Infratel Limited Take Solutions Limited Non-Executive Director Mphasis Limited MRF Limited L&T Technology Services Limited Larsen & Toubro Limited Entertainment Network (India) Limited We are targeting Group Revenues of 2.7 lakh crore and ROE of 18%+ by FY 2025-26 2 Integrated Report Management Discussion and Analysis • Business sustainability through sharper focus on ESG and shareholder value creation Statutory Financial Corporate Overview Scaling up Digital and e-commerce businesses Forward looking organisations constantly evaluate how the world is transforming and course-correct to stay ahead of the curve. At L&T, our relentless endeavour has been to pivot the organisation on its core strength of engineering and technology to enhance shareholder value. • • • Exit from non-core businesses • Value accretive growth in our current business portfolio Our Strategic Five-year Plan christened 'Lakshya 2026', continues to steer your Company's growth. Simultaneously, it also responds with agility to flux in the business environment. This year we launched Lakshya 2026, built around the following themes: Strategic Plan LARSEN & TOUBRO The Company's policy of aiming for wider geographic dispersal continues to yield positive results while de-risking exposure. While the Middle East region remains an area of focus, your Company has expanded its outreach to several countries in Africa as well as South East Asia. Currently, the Middle East region constitutes 76% of the international Order Book of 95,227 crore. International Business It gives me great pleasure to inform you that the Board of Directors has recommended a final dividend of 22 per share for FY 2021-22. Developing innovative business offerings to ride the energy transition wave Reports Jai Hind! Training and Talent Management Resilience and Value Creation The best time to change is now Your Company continues to focus on shareholder value creation by divesting non-core assets, capturing cost efficiencies and leveraging technology for productivity gains. Our strategically diversified business portfolio, geographical dispersion, robust balance sheet and strong Order Book are reliable signposts pointing to a brighter future. Further, the Company's proven execution strengths and committed workforce are helping it to seamlessly transition to a more digitally evolved work environment. This should enable the business to thrive once the immediate challenges posed by pandemic and the geopolitical uncertainties are behind us. Renewing Focus, Revitalising Portfolio, Reaffirming Values S. N. Subrahmanyan CEO & MD I MESSAGE FROM THE CEO & MD Integrated Annual Report 2021-22 3 My heartfelt greetings to you all as India celebrates 'Aazadi ka Amrit Mahotsav'. My special thanks to all our shareholders for the trust you have reposed in us. You remain an invaluable pillar of strength, and I look forward to your continued support in our journey towards setting higher levels of excellence. I would like to thank our employees, our customers, supply chain partners and the Government for their contribution, directly and indirectly, to our growth. I also thank my fellow Board Members for their invaluable support in guiding the Company through turbulent times. Conclusion Amid all this, there is good news on the technology front. Paradoxically, it took a pandemic to open our eyes to the latent benefits of digital technologies. These technologies are irrevocably changing the way we work and interact with each other. Also, the IT spends are possibly the only deflationary force in today's inflationary world. Another positive result has been a heightened awareness of sustainability and a more rigorous emphasis on Environment Protection, Social Responsibility and Governance frameworks. We live in an age of unpredictability. Just when it appeared that the world had come to terms with the pandemic and that the worst was behind us, war broke out in Europe, dashing hopes of achieving the stability essential for growth. In the interdependent world we live in, conflagrations are no longer confined to the boundaries of the combatant countries. This has disrupted the global supply chains and triggered an alarming spike in prices. The consensus view is that prices of various commodities would remain elevated in the near term. Outlook As stated in the past, I wish to reiterate that our defence business does not manufacture explosives or ammunition of any kind, including cluster munitions or anti-personnel landmines or nuclear weapons or components for such munitions. The business also does not customise any delivery systems for such munitions. With regard to governance, the Company's core values pivot around the principles of independence, transparency, accountability, responsibility, compliance, ethics and trust. We will continue to uphold the value systems which have been the traditional hallmark of Larsen & Toubro for over eight decades. Your Company has set for itself a Water Neutrality and Carbon Net Zero target of 2035 and 2040 respectively. We are already present in EPC Solar and Water space and are now actively looking at expanding our footprint in Green Hydrogen and Energy Storage. With more and more countries signing up for time-bound zero emission targets, lucrative business opportunities should emerge for your company in green hydrogen, storage solutions, renewables and the world of data infrastructure. I am very happy to inform you that this is the maiden issue of our Integrated Annual Report, bringing together our financial and sustainability performance across multiple parameters. While the world seems to have suddenly woken up to the perils of climate change, for your Company sustainability is nothing new. We have been at the forefront of many sustainability initiatives long before they were mandated by law. Since 2008, we have maintained an annual reporting cycle for our sustainability performance. These reports are accessible on the Company's website. Sustainable Development People are at the heart of our successes and our continuing endeavours to do better. Our HR policies are crafted to ensure professional growth while contributing to the employee's sense of pride and well-being. We also leverage technologies as we anticipate and adapt to changing requirements. For instance, our digitalisation initiatives enabled us to provide learning experience to our employees, even as they worked remotely during multiple lockdowns. Statements employed metrics have reported progress, leading in turn to improved return ratios for the Group. The Group has repaid borrowings during the year resulting in improved Debt-to-Equity ratios. and attaining global benchmarks. As on March 31, 2022, the Order Book at 357,595 crore is large, growing and diversified. The Infrastructure segment has a 73% share of the consolidated Order Book. The Order Book registered a growth of 9%, on the back of orders secured in projects businesses. Statutory Financial Reports Report Discussion and Analysis Integrated Management Corporate Overview LARSEN & TOUBRO L&T shall foster a culture of caring, trust and continuous learning while meeting expectations of employees, stakeholders and society. L&T-ites shall be an innovative, entrepreneurial and empowered team constantly creating value committed to total customer satisfaction and enhancing shareholder value. L&T shall be a professionally-managed Indian multinational, VISION S.K. TOUBRO H. HOLCK-LARSEN SUSTAINABILITY IS PROGRESS R for Rupee Tfor Tree 00 LARSEN & TOUBRO 2021-22 Integrated Annual Report FY 2021-22 saw L&T-ites yet again demonstrate their resilience and spirit to first overcome the challenges posed by the pandemic and thereafter reorganise themselves to push forward. During the pandemic, the prime focus was to stand by our employees, workmen, vendors, and the community at large. Driving the need to stay safe, we ensured that most of our employees were vaccinated through regular vaccination drives. I sincerely thank all our employees, workmen, and other stakeholders for standing by the organisation during those tough times. LARSEN & TOUBRO A healthy Operational Profit After Tax at 8,572 crore, representing a growth of 23% over the previous year. Thanks to robust operational cash flows, our capital Statements A. M. Naik The L&T Group recorded revenues of ₹156,521 crore during FY 2021-22, registering a growth of 15%. The growth was aided by improved project execution and manufacturing activity further complemented by a strong pick-up in the services businesses amidst a volatile macro backdrop. In a year marked by several disruptions, your Company turned in a creditable performance and registered appreciable recovery across key performance parameters. Our Order Inflow for the year at 192,997 crore was achieved on the back of major domestic and international order wins in Hydrocarbon and Infrastructure. Although the domestic ordering environment was a shade below expectations, the international environment, especially in the Middle East, is a cause for cheer. Group Performance Review Internationally, we expect the GCC economy to remain buoyant with a strong capex fuelled by prevailing oil prices. Infrastructure and hydrocarbon opportunities are likely to open up in the African sub-continent on the back of enhanced bi-lateral/multi-lateral funding support. Since infrastructure investments serve the dual purpose of driving productivity and generating employment, we believe the underlying macro drivers for growth remain intact. Your Company is poised to capitalise on these opportunities as they emerge. India's FY 2022-23 Budget focusses on consolidation with a capex-driven infrastructure thrust where the Government will do the heavy lifting and the private sector steps in to play its part. Most of the initiatives undertaken, ranging from NIP to NMP, creation of DFI, the PLI scheme, the public procurement initiatives as well as the renewed PPP models, have an overarching infrastructure focus. Clearly, they are directed to coax capex back into play. We hope that a reasonably stable domestic macro environment and an equable socio-economic climate will enable the Government to realise the vision envisaged in the NIP blueprint. Public and private investments working in tandem should also resuscitate India's Investment / GDP ratio which has been stagnant. Driving Growth Integrated Annual Report 2021-22 1 India is expected to post top quartile growth among emerging nations in the medium term. Challenges hovering on the horizon include runaway oil prices, supply chain disruptions and the US rate hikes affecting capital flows into India. Despite these roadblocks, however, our view is that the bold structural reforms carried out by the Government in the last couple of years will pave the way for improved quality of growth. A slew of incentive schemes launched by the Government should stimulate manufacturing and exports in our run up to becoming a USD 5 trillion economy. Leveraging its expertise in high- tech manufacturing, your Company is well-positioned to take advantage of the opportunities as they unfold. in exports in FY 2021-22. Consequently, the economy expanded at 8.7% in real GDP terms vis-à-vis a contraction in the previous financial year. After years of stagnation, India witnessed a pick-up An improved borrowing programme for the Centre and State Governments also meant that the spending proposals envisaged in the Budget continued unhindered. Most of the high frequency, mobility and service indicators gained momentum as the easing of pandemic curbs saw demand regaining lost ground before geopolitical tensions erupted to set the clock back once again. FY 2021-22 was an economic roller coaster with the impact of recurring bouts of COVID-19 and global disquiet counter-balanced to some extent by Country's economic resilience. Regular government spending throughout the year complemented by liquidity easing measures by the Reserve Bank of India prevented the risk of an economic meltdown and helped bolster the confidence of households and private companies. Business Scenario macroeconomic and geopolitical upheavals, India has managed to stay the course in its quest for growth. Your Company has also performed well while operating within the given constraints. At this juncture, we wish to reiterate our commitment to advance the interests of our country and express our solidarity with the nation and its leadership. Robust self-belief and resilience are the key to success in times of uncertainty and challenge. This spirit has helped India contend with an unprecedented pandemic and, in rapid succession, a war in Europe with its attendant disruptions. It is indeed creditable that amidst these Dear Shareholders resilience - the key to success in times of challenge. Robust self-belief and Group Chairman | CHAIRMAN'S STATEMENT Despite severe headwinds, we ended FY 2021-22 on a strong note on the back of several prestigious order wins. The Order Book at around 3.6 lakh crore is not only the highest in the history of the Company but is also diversified and growing. Standalone Financial Statements During the year, we formulated our Lakshya 2026 strategy plan to sustain the present momentum and create value over the Plan period up to FY 2025-26. In this exercise, the Company seriously introspected and rededicated itself to its core focus areas of EPC Projects, Hi-Tech Manufacturing and Services. L&T Nationwide Network & Global Presence Executive Committee 17 16 14 13 12 Chairman & Board of Directors 10 Standalone Financials - 10 Year Highlights 9 Company Information Corporate Overview 1 | CONTENTS Integrated Annual Report 2021-22 7 Finally, we will always remember that we are in the business of nation building. For that, we must remain passionate, optimistic, calm, patient and stay united in our shared sense of purpose. Challenges are part and parcel of our journey, and we are ever prepared to face and overcome them through continuous learning, unlearning, and relearning. L&T is fully-geared for the next phase of growth to evolve, accept, and adopt newer ideas as we revamp our portfolio and equip our people with tomorrow's skillsets. Adapting and assimilating smart technology will play a significant role going forward. Leadership Team Consolidated Financials - 10 Year Highlights 2 Management Discussion & Analysis Lakshya 2026 8 623 Shareholder's Satisfaction Survey Form - 2021-22 Information Regarding Subsidiary Companies 611 483 Consolidated Financial Statements 363 Financial Statements 5 Board Report 280 258 210 AGM Notice Business Responsibility & Sustainability Reporting (BRSR) Statutory Reports 4 118 Integrated Report 18 L&T - A Technology Company We have always believed in sharing value with our various stakeholders and our CSR initiatives, aligned with the global and national development objectives, primarily focus on healthcare and education & skilling to help more Indians become capable to earn themselves a living. In FY 2021-22, the Company spent 136 crore on CSR activities. Apart from spending on CSR-oriented projects covering water and sanitation, natural resource conservation, climate change mitigation and adoption of renewable forms of energy, L&T also responded to the pandemic by assembling 38 PSA oxygen generation units and transporting those across to different parts of the country which were worst affected. Cumulatively, 1.1 million benefitted from our CSR initiatives in FY 2021-22. 3 Statements Cash flow is the lifeline of any business and we have paid close attention to the cash flow profile at the Group level. As we see it, cash generation during the Plan period will be the outcome of improved profitability and lower employment of capital. Further, as I mentioned earlier, we are looking at unlocking capital through the sale of some of our non-core assets to boost cash balances. The Company will explore option to step up pay-out ratios over time in addition to returning cash to shareholders which will accelerate ROE improvement. Our thrust areas in the Plan period are clear: Ensure sustainable growth in the current business portfolio through profitable expansion and execution, scale up through business model innovation and meet customer demands in an agile manner in the newer businesses. This should help us clock Group Revenues of *2.7 lakh crore and an ROE of 18%+ by FY 2025-26. Company-wide Perspective opportunities in the Green Hydrogen BOO projects space will be housed in this portfolio too. We would like to complete the divestment of L&T IDPL and Nabha Power during the current Plan period and unlock their value. In Hyderabad Metro, a combination of capital restructuring, improved operations, and monetisation through Transit Oriented Development should generate value over time. Developmental Projects or the concessions portfolio will now largely constitute the Hyderabad Metro while emerging In the Realty business, we are looking for growth in the residential and commercial spaces through multiple formats under the larger objective of developing captive landbanks to leverage existing investments. Smart World & Communication will mature from the current EPC / O&M format to that of a total Smart Solutions Provider model that will enable us to provide complete end-to-end technology solutions. We will also grow our Industrial Machinery & Products portfolio, primarily comprising Construction Equipment and Valves, as demand picks up. The Realty, Smart World & Communication and Industrial Machinery & Products businesses will comprise the 'Others' segment. This business, following the philosophy of 'Shrink to Grow', will reorganise its existing lending portfolio and migrate towards retail lending over time. We believe a growing digitalised retail portfolio, with a focus on upselling and cross-selling, will yield higher returns and lead to significant improvement in valuation. Financial Services The IT&TS portfolio will also have the in-house incubated e-commerce and digital platforms that were launched in FY 2021-22, SuFin and Edutech as well as the Data Center Business. IT&TS Business Portfolio The Services portfolio is in a sweet spot with the potential for accelerated growth. I am also happy to inform you that our teams are performing creditably in an intensely competitive scenario. Going forward, the Services portfolio will comprise two segments: IT&TS Businesses and Financial Services. LARSEN & TOUBRO Statutory Financial Reports Statements Integrated Discussion and Analysis Report Management Corporate Overview 4 Value creation in the EPC Projects and Hi-Tech Manufacturing businesses will be a combination of margin improvement and lower deployment of capital. Giving Back to the Society The EPC Projects portfolio will focus on the Infrastructure and Energy sectors, with the 'Infrastructure' segment continuing to include all our construction businesses, targeting Order Inflow and Revenue growth between 11 and 13%. The 'Energy' segment will comprise the Hydrocarbon, Power, and Green Hydrogen EPC businesses. We will strive for timely delivery and, wherever possible, early completion in all the projects that we execute. Profitability will be driven by a combination of productivity of resources, operational excellence, as well as our on-going digitalisation drive. Hi-Tech Manufacturing includes the Heavy Engineering & Defence Engineering businesses. Additionally, the manufacture of Electrolyzers and Battery Energy Storage Systems will form part of this portfolio. We will target Order Inflows and Revenue growth of 18%+ and improve and sustain profitability thanks to our several initiatives revolving around Design Excellence, Automation, Value Engineering, Factory 4.0, and On-time Delivery. Future Ready Initiatives We, at L&T, are committed to face the global climate change crisis and shape the future around frontier technologies to mitigate the ill effects of climate change. We do believe that alternative fuels such as Green Hydrogen will go a long way to create a cleaner environment and contribute towards the nation's energy security. We have a unique opportunity to play a significant role to accelerate the ecosystem around Green Hydrogen, with our thrust in both the EPC and BOO spaces, coupled with the backward integration of manufacturing electrolysers and grid battery energy storage systems. This portfolio includes LTI-Mindtree and LTTS. The IT&TS businesses will continue to balance the risk and cyclicality associated with the traditional projects and manufacturing segment. The momentum from existing and emerging tech trends such as Cloud, Digital, Al, Industry 4.0 is expected to propel growth in the near term. This portfolio will aim at Revenue growth in the high teens during the Plan period and be vigilant to tap opportunities for inorganic growth as they emerge. Making all these plans work will undoubtedly need high calibre digital talent, and we intend to on-board the finest minds in the industry. 5 LARSEN & TOUBRO Integrated Statutory Financial Report Reports On the digital front, there is maturity in understanding data security, data ownership and the Government is also continuing its thrust for data localisation. Thus, the new Data Center and Cloud Services businesses are distinctly positioned to achieve scale in the future. Another dimension to the digital world is e-commerce and the boom of services being delivered through the internet. In these spaces, we intend to capitalise on our engineering DNA to design superior services. We have made moves in the e-commerce space through Discussion and Analysis Management Corporate Overview 6 It is our endeavour, as an organisation, to provide the right atmosphere, an enabling environment, and the right incentives to realise one's potential and take the organisation to the next level. Through the projects that we undertake, which are some of the biggest, largest, tallest, and heaviest, we are committed to creating opportunities at all levels for people to give expression to their creative instincts and unleash their potential. People are intrinsic to any business both in terms of being one of the goals for which they are run as well as the means to achieve this goal. I have often mentioned that L&T is a great technology platform that nurtures and rewards hardworking, sincere, honest, and dedicated individuals. Every person we employ adds value to the organisation. The value that some individuals add is apparent while for some others it is embedded deep inside and takes the right atmosphere for it to manifest. People Good governance has been integral to L&T's DNA for decades. We have always practised the highest level of governance and intend to keep raising the bar. We actively seek and adopt newer, better ways of doing things to keep setting new industry benchmarks. We are also taking serious steps to increase the percentage of women in the workforce to 10% from the current 6%. Creating the ecosystem required for not letting biases, stereotypes, and discrimination creep into decision making and letting objectivity define the best person for any job has been and will remain the endeavour for creating equal opportunity for all genders. Raising the Bar In various projects today, more than 13,000 equipment are digitally connected providing real-time visibility into operations. We also have quality and safety checks on mobile apps, which also include a database with details of our workers, their skill sets, and their home addresses. The entire site topography is being mapped through drones and light detection and ranging (LiDAR) sensors. Safety measures for workers are being communicated through augmented and virtual reality. Such level of digital adoption substantially increases productivity, improves quality and safety. This is an on-going journey, and all possibilities will be explored and implemented in the future too. We cannot emphasise enough the importance of digital technology adoption in both EPC Projects and Manufacturing operations. In Manufacturing today, most activities are automatically controlled. The amount of data that is generated and monitored gives us a differentiated advantage vis-à-vis competition in terms of visibility of operations and remote control over various processes. Digital and Technology Adoption Integrated Annual Report 2021-22 We are keenly focused on Circular Economy using the 6R (reduce, reuse, recycle, repair, refurbish and rethink) approach to manage waste and improve material recycling and reuse. Cumulatively, we have planted around 6 million multispecies trees, and our focus on biodiversity and protection of natural resources is sharper than ever. Our portfolio of green businesses, which includes solar, water, green hydrogen, and some others, is steadily growing and presently constitutes >30% of the total revenue. We are taking steps to reduce waste production through improved recycling initiatives that encourage our people to develop and sustain environment friendly habits. Apart from our operations and services, we are also working with our partners, to reduce emissions and create a significant impact. Some note-worthy achievements related to our environmental performance include avoiding emission of around 40,000 tonnes of CO2 during the year, which is equivalent to planting 500,000 trees. Our cumulative energy conservation is around 150 million units, which is equivalent to powering 70,000 homes for a year. With a vision of 'Technology for Sustainable Growth', the Strategy Plan factors in Climate Change and what we must do to push the agenda for a greener and sustainable tomorrow within the organisation as well. While the set specific targets may be new, proactive environment conservation is not new to L&T. We have committed to Water and Carbon Neutrality by 2035 and 2040 respectively. We have also set for ourselves interim targets on various parameters of ESG up to FY 2025-26. Greener and Brighter Tomorrow SuFin, our B2B platform for the trade of industrial products and services, where we put power in the hands of SMEs and MSMEs and our EduTech platform, through which we empower students seeking practical and application-oriented engineering courses. LTFH continued its strategy of focus on tranche disbursements to existing projects to ensure construction is not stalled. The emphasis was laid on rigorous portfolio monitoring for identification and implementation of corrective action plan. Continued focus on completion of existing Real Estate projects which resulted in re-payments / prepayments of over 3,000 crore in FY 2021-22. Real Estate Consequent to the merger of L&T Infrastructure Finance Company Limited with L&T Finance Limited, RBI has advised LTFH to take steps to convert the IDF - NBFC business to an NBFC - Investment and Credit Company (NBFC - ICC). Accordingly, L&T Infra Credit Limited has applied to the Reserve Bank of India (RBI) for conversion to an NBFC – ICC. LTFH's funded road annuity projects are receiving timely payments from NHAI. Toll collections rebounded in FY 2021-22 from the impact of COVID-19 pandemic influenced lockdowns in FY 2020-21. WHOLESALE FINANCE LTFH continues to be one of the leading players in the infrastructure finance business (with a special focus on Renewable, Roads and Transmission lines). The Company continued concentrating on projects with strong sponsors and off-takers with a proven track record. Infrastructure Finance LTFH focuses on the Home Loan market through its presence in 17 locations across India. A digital lending model coupled with paperless sanction of home loan to salaried customers, led to a unique offering that helped in quick turnaround of proposals. During the year, the contribution of Home Loans as a part of total retail housing disbursements has increased from 85% in FY 2020-21 to 96% in FY 2021-22. LTFH re-initiated disbursements in Self-Employed Non- Professional (SENP) and Loan Against Property (LAP) segments with revamped market offerings through Direct Selling Agents sourcing towards the latter part of the year. INVESTMENT MANAGEMENT Home Loans LTFH announced the stake sale of its mutual fund business in December 2021. The transaction is expected to be effected post receipt of regulatory approval. Real Estate Finance The Indian economy reverted to growth mode in FY 2021-22 after a decline in FY 2020-21. Just as the economic revival was seen in the latter part of first half of FY 2021-22, the second half of FY 2021-22 again faced another wave of the COVID-19 variant, though the adverse impact was limited. 90 Corporate Overview Management Integrated Statutory Discussion and Analysis Report Financial LARSEN & TOUBRO Reports Statements However, private consumption spending, especially in the rural belts continued to stay weak throughout FY 2021-22, led by an uneven monsoon, weak non-farm employment generation and unfavourable terms of trade for farmers. India's Consumer Price Index (CPI) based inflation averaged at 5.5% in FY 2021-22 versus 6.2% in the corresponding period of the previous year. While softening of food prices provided some relief, the hardening of crude oil prices presented a major headwind to the inflation outlook. Consumer Loans is LTFH's first Digital Native product. It is an entirely digital proposition, with no-touch sourcing and instant decisioning. The whole process of login to disbursement takes less than 30 minutes, which is the USP of the Company in the market. It was launched as part of cross sell strategy to existing two-wheeler customers and recently it made an entry into the Education Loan sector. The Company aims to build a sustainable quality portfolio backed by a robust underwriting framework and leveraging digital and analytics which enabled Collection Efficiency in this portfolio reaching -99.7% in March 2022. The Indian financial sector remained fully functional during FY 2021-22 and anchored the process of economic recovery. However, in the last quarter of FY 2021-22, the post- pandemic recovery of Indian economy was partially affected by the disruption caused by the war in Ukraine and the consequent economic sanctions on Russia, which are likely to reduce global growth and push up inflation. Business Environment Consumer Loans Financial Integrated Annual Report 2021-22 The regulatory environment saw lot of changes with the RBI issuing multiple guidelines for harmonising policies between all lending institutions. 80000 0- 88341 Corporate Overview Management Integrated Statutory Discussion and Analysis Report LARSEN & TOUBRO Reports Statements Farm Equipment Finance | FINANCIAL SERVICES BUSINESS Overview Housing Finance L&T Finance Holdings Ltd. (LTFH) is the holding Company for the financial services business of the Larsen & Toubro Group. It is one of India's most diversified NBFCs, having a strong presence across lending and investment management businesses. LTFH was incorporated in 2008 and in 2011, it went on to become a public-listed company. Headquartered in Mumbai, LTFH has a strong network of branches and dealers across India catering to the business requirements of a 99 lakh+ customer base across core businesses as given below: • Wholesale Finance (infrastructure finance and real estate finance) •Investment Management RETAIL FINANCE Retail became the largest lending segment for LTFH in FY 2021-22 with 51% share in the entire loan book. Additionally, the collection efficiencies have surpassed the pre-COVID-19 levels. Farm While the industry de-grew by 6% y-o-y, LTFH performed relatively well through a focus on preferred dealer and OEM strategy and enhanced focus on customer retention through Kisan Suvidha Loans. LTFH maintained its leading position with a stable market share of 15%. The collection efficiency of LTFH at 94% in March 2022, continues to remain the highest in the industry and has surpassed the pre-COVID-19 levels. Two-wheelers Despite the industry de-growth of 11% y-o-y, LTFH maintained its leading position with a stable market share of 11% on the back of extensive use of analytics, capturing higher counter shares amongst dealers, focusing on financially prudent customers, increasing finance penetration to provide sustainable future growth and by providing the best-in-class turnaround time of 45 seconds on loan sanction. Micro Loans In FY 2021-22, the Micro Loans business registered healthy volumes driven by normalised collections and better-than- industry asset quality. Strategic initiatives like product-focused set targets and new product launch helped clock the highest ever quarterly disbursements of ₹3,881 crore. LTFH increased its focus on retaining customers with an excellent repayment track record with a share of repeat customers at 55% in Q4 FY 2021-22 through loan products like Vishwas Loans and Pragati Loans. The Company continued to deepen channel presence in states like Bihar, Punjab and Karnataka and increased geographic diversification by addition of a new state of Rajasthan. Enhanced focus on collections during the year backed by data analytics led to collection efficiency reaching 99.6% during March 2022. 89 • Retail Finance (farm equipment finance, two-wheeler finance, micro loans, consumer loans, home loans, loans against property and small & medium enterprise loans) To strengthen supervision over NBFCs, the RBI introduced scale- based regulation and revised Non Performing Assets (NPA) recognition and upgradation norms during October 2021. 13404 Significant Initiatives LTFH plans to be a top-class, digitally-enabled retail finance company moving from a 'product-focused' to a 'customer- focused' approach, thereby creating a Fintech @ Scale. LTFH with a CRAR of 23% is well poised to leapfrog into this next phase of growth through vectors like continued product excellence, cross sell and upsell to existing good customers, geographical expansion, launch of new products and App & Digital-based channel expansion. 92 Corporate Overview Management Integrated Statutory Discussion and Analysis Report Reports Financial LARSEN & TOUBRO Statements Micro Loans Financial Performance of the Segment The Financial Services segment comprises Rural, Infrastructure and Housing Finance. (NIM) including fee income improved from 6.95% to 7.84% mainly due to the increase of share of rural portfolio, higher fee income and reduced cost of borrowings. *crore Bond yields and bank interest rates will rise at a faster pace because of adverse spill overs from the actions of global central banks, higher market borrowings by the Central and State Governments and inflation risks. 20000 (10.7%) 15000 10000- 7.84 Loan Book and NIM + Fees% *crore 98000- 94013 92000 11971 2020-21 88000 Gross Revenue The RBI tightened NBFC asset classification norms by issuing guidelines on Income Recognition, Asset Classification and Provisions (IRACP) .The revised norms prescribed the classification of Special Mention Account (SMA) and NPA on a day-end position basis and upgrade from an NPA to standard category only after clearance of all outstanding overdues. Further, the RBI brought in the Prompt Corrective Action (PCA) framework, which was aimed at increasing market discipline among non-bank players and align the regulations at par with those of banks. While economic growth in FY 2022-23 will be driven by another year of normal monsoons, higher public investment and private capex in select pockets supported by the Government's PLI scheme, there will be headwinds from the global economic slowdown and higher commodity prices, especially oil. Outlook During FY 2021-22, along with addressing the challenges posed by the COVID-19 pandemic, the business focused on retailisation, sustainability of performance with steady margins, improving asset quality and building a strong liability franchise. The specific focus for the year was on the following areas: A) New Retail products LTFH scaled up its first 'Digitally Native' Product-Consumer Loans (2,254 crore disbursement in FY 2021-22) at a rapid pace and launched a pilot for a new product - Small and Medium Enterprise Loans (SME loans) in Q3 FY 2021-22. The SME products are aimed at addressing the financing needs of the professionals (mainly doctors and chartered accountants) and specific industries which have shown resilience during successive waves of COVID-19. B) Proactive Liability Management and Diversification of Borrowings In FY 2021-22, LTFH leveraged its strong liability franchise to further reduce its weighted average cost of borrowing (WAC). This was done through renegotiation of interest rates on existing borrowings, prepayment of high-cost borrowings and raising of long-term low-cost borrowings such as Priority Sector Loans (PSL) as well as Sustainability Linked Loan (SLL). The yearly WAC reduced by 58 bps from 8.08% for FY 2020- 21 to 7.50% for FY 2021-22 helping to achieve the lowest ever yearly WAC. The Liquidity Coverage Ratio (LCR) guidelines announced by the RBI came into effect from December 2020. As a prudent 91 Integrated Annual Report 2021-22 Infrastructure Finance practice, LTFH has been maintaining LCR ratios well above the regulatory required ratios. The Company continued to capitalise on the low interest rate environment in FY 2021-22 and has been able to lock-in long-term low-cost funding. It raised long-term borrowing of 15,293 crore in FY 2021-22 with an average maturity of 3.22 years. C) Digital Initiatives At the end of FY 2021-22, risks to India's economic growth have shifted from the COVID-19 pandemic to geopolitics, elevated crude oil prices and interest rate hikes by the US Federal Reserve. LTFH launched UPI based payments which amplified the customer experience alongside easing the collection efforts. LTFH launched a Direct-to-Consumer (D2C) mobile application named 'LTFS Planet' (Personalised Lending and Assisted NETworks) to fulfil the objectives of: • • • • Sourcing for onboarding customers directly through lead generation, end-to-end digital workflows, digital partnerships and e-aggregators Increasing upsell and crosssell across businesses, thus resulting in enhanced customer engagement Digital collections and servicing, thereby reducing branch/call centre dependency and converting the non- mandate customers Providing insights on customer behaviour based on the deep tech and data analytics During the year, LTFH's AAA rating was reaffirmed by all four rating agencies - CRISIL, ICRA, CARE and India Ratings. Also, in August 2021, ICRA changed its rating outlook for the Company to 'AAA/Stable' from 'AAA/Negative'. Major Achievements 2020-21 5000 Loan Book Contracts for various advertisement media including advertisements inside trains, apart from various physical media like piers, portals, etc., were added during FY 2021-22. In addition, new media viz. audio advertisements in trains and stations were launched in FY 2021-22. The fiscal year started with the onset of second wave of COVID-19. The State Government imposed a partial lockdown to control the spread of the virus and allowed metro services to operate for restricted hours. Normal operations resumed from Q2 onwards and gathered momentum on the back of a vaccination drive and with many small & mid-size IT companies starting a 'return to office' policy and opening of schools and colleges/universities. However, average ridership remained below pre-covid levels mainly due to large IT companies continuing to adopt WFH strategy and a general precaution exercised by the local population to avoid / minimise the use of public modes of transport. Business Environment Hyderabad Metro, Going the distance - connecting destinations Statements LARSEN & TOUBRO Financial Integrated Statutory Report Reports Discussion and Analysis Management Corporate Overview 96 The Concession Agreement also includes rights for real estate development in the form of Transit Oriented Development (TOD) for 18.5 Mn. sq.ft., of which 1.28 Mn. sq.ft. consisting of 4 malls and an 0.5 Mn. sq.ft. of office block have commenced commercial operations. The Metro Rail system consists of three elevated corridors from Miyapur to L.B. Nagar, Jubilee Bus Station to Mahatma Gandhi Bus Station and Nagole to Raidurg, in aggregate covering a route length of 69.2 km. This network got fully commissioned in February 2020. The remaining concession period is approximately 25 years, extendable for a further period of 25 years by the Company subject to fulfilment of certain conditions as set out in the Concession Agreement signed with the Government of Telangana. L&T Metro Rail (Hyderabad) Limited (L&TMRHL) is a special purpose vehicle created to undertake the business of constructing, operating and maintaining the Metro Rail System including Transit Oriented Development (TOD) in Hyderabad under the Public Private Partnership model on Design, Build, Finance, Operate and Transfer (DBFOT) basis. Overview L&T METRO RAIL (HYDERABAD) LIMITED under the National Infrastructure Pipeline, by monetising its assets under the Toll-Operate-Transfer (TOT) model and in FY 2022-23, the Ministry plans to raise about 20,000 crore through such monetisation which augurs well for the business. The National Highway Network will be expanded by 25000 km and development of hill roads will be taken up in PPP mode under the 'Parwatmala' scheme. The Ministry expects to raise *86,182 crore during the next three years to fund projects In the Union Budget FY 2022-23, the total expenditure by the Ministry of Road Transport and Highways is estimated at being 52% higher than the revised estimates for FY 2021-22. In FY 2022-23, it is expected to complete a road length of around 2500 km as part of the Bharatmala project. Outlook The Company has also pursued innovative accident reduction measures including adopting of Behavioural Science approach solutions, which aims at studying driver behaviour and design solutions to bring about behavioural changes. This has been successfully implemented at one of its SPVs which has resulted in reduction in accidents / fatalities and hence it will be rolled out in other projects as well. As a part of process automation, the Company developed an intuitive Highway Management System christened as 'IHAMS'. This is yet another industry-first innovation that is transforming the way assets are managed under O&M. This solution is an AI / ML-based video-analytics application which detects damaged / missing assets without any human intervention by using dashcams installed in Route Patrolling Vehicles. The system was successfully piloted at one SPV and will be implemented at the other SPVs. Also, the system is being improved for better usage and is being planned to be integrated with SAP S4 HANA ERP in FY 2022-23. working off-line, capturing A/V and pictures, various measurement readings, preventive and corrective maintenance and optimising consumption of spares for asset repairs. The Hyderabad Metro adds efficiency to city mobility Major Achievements • L&TMRHL completed the refinancing of the entire term loan availed from the consortium of banks with a mix of non-convertible debentures and commercial papers that will help reduce interest expenses and improve profitability • The business was successful in adding many new tenants in its retail malls portfolio. Discussions are also underway for the launch of a new income source viz. offering rights to television channels to broadcast their exclusive content on trains • L&TMRHL has tied-up with a solar power developer for generating captive solar power (planned capacity of about 8.35 MWp) at a very competitive price. This will cater to about 10% of the energy requirement of Metro trains 6.95 98 The power plant is running successfully for over eight years with an average availability of over 85%. The plant has been the most reliable source of power for the State of Punjab and has supported its requirements with uninterrupted supply during peak seasons. NPL also happens to be the lowest cost coal-based power producer within Punjab with best operational efficiency. The plant sources its fuel from South-Eastern Coalfields Ltd. (SECL) and Northern Coalfields Ltd. (NCL), subsidiaries of Coal India Limited, under a 20-year Fuel Supply Agreement (FSA). The FSAs are for a total annual contracted quantity of 52.4 lakh MT. The Company has also secured approvals to arrange coal from alternate sources to make up for any shortfall in supply of coal under the FSA. The Bhakra-Nangal distributary is the perennial source of water for the plant under an allocation by the State Government. The plant is operated by an in-house team of experienced operations and maintenance professionals. NPL owns and operates a 2 X 700 MW supercritical thermal power plant at Rajpura, Punjab. The entire power generated from this plant is sold to Punjab State Power Corporation Limited (PSPCL) under a 25-year Power Purchase Agreement (PPA) which is effective till 2039. Overview Nabha Power Limited (NPL) which commenced its commercial operation from January 2021, was sold to ReNew Power on August 30, 2021. This transaction is in line with the Company's strategy to pursue the divestment path for all non-core assets in its portfolio. During the year, the Company's stake in the 3 X 33 MW (99 MW) Singoli-Bhatwari Hydro-Electric Plant in Uttarakhand, L&T Power Development Limited, a wholly-owned subsidiary of L&T, is engaged in developing, operating and maintaining power generation assets. The portfolio currently comprises a single project in the thermal sector viz. Nabha Power Limited which owns and operates a 2 X 700 MW supercritical thermal power plant at Rajpura, Punjab. L&T POWER DEVELOPMENT GROUP Hyderabad Metro Rail is seen as an environment friendly, safe, clean, and sustainable mode of transport with best practices adopted by L&TMRHL. With Government planning to implement Phase II of the Metro project, it will significantly enhance the average ridership of the metro network in the medium to long term. Integrated Annual Report 2021-22 A new business model of upfronting revenues from Transit Oriented Development is being worked on with all the stakeholders involved. These monetisation activities are likely to get a major impetus in FY 2022-23. mile connectivity, contactless travel, etc.) aimed at minimising commuters' pain points, targets a higher ridership on the Metro Rail System in FY 2022-23. 2x700 MW Supercritical Technology based Thermal Power Plant at Rajpura Integrated Annual Report 2021-22 97 With the COVID-19 pandemic waning, it is expected that the daily commute in Hyderabad across the various modes of transport shall be around 9 million, up from 5 million in FY 2021-22. The upcoming transport scenario shall be influenced by minimum social distancing, IT/ITES sector working from office, school and colleges reopening completely, increased travel by senior citizens and reduced private transport due to increased road congestion. Considering the above, L&TMRHL by virtue of providing safe, clean, comfortable, and punctual travel along with various value-added initiatives (robust and affordable last Outlook Considering developments in mobility, L&TMRHL has tied up with partners to setup Electric Vehicle charging points at different metro stations. A total of 55 charging points are available across Hyderabad Metro stations . • Another initiative recently launched by L&TMRHL is the Super Saver Card targeted towards enhancing ridership on holidays (Sundays, public holidays, etc.) • The signalling software has been upgraded in all the three corridors for enhancing the maximum operating speed from 70 km/h to 80 km/h, leading to a reduction in the travel time on Corridors 1 and 3 respectively • To boost the ridership, L&TMRHL has undertaken a few initiatives like increasing service hours in the morning from November 2021 and introducing a special fare product (Suvarna 2.0 offer) from October 2021 Significant Initiatives Measures like collaborations with various feeder services for first and last mile connectivity are being taken to strengthen fare revenue. In addition, new Non-Fare Revenue initiatives viz. training, fibre leasing, mobile towers, etc., can add to revenues for L&TMRHL. 95 The dedicated mobile app for O&M of the roads and power transmission line business launched by the Company was integrated with ERP and ArcGIS Online (ESRI, a map-based server), and has successfully run without disruption. The mobile app's salient features include capturing GPS coordinates, Significant Initiatives 500 1000 2000- 194 3000- 3621 4000 5000 6000 * crore 4368 20.6% 0+ Gross Revenue and EBIDTA b) The Hyderabad Metro Rail project, executed through a wholly owned subsidiary, L&T Metro Rail Hyderabad Limited c) Power development projects executed through subsidiaries of L&T Power Development Limited a) Roads and Transmission projects developed through a joint venture company, L&T Infrastructure Development Projects Limited and its subsidiaries and associates (the L&T IDPL Group) The Development Projects segment comprises: | DEVELOPMENT PROJECTS BUSINESS Kudgi Transmission Lines, Karnataka Integrated Annual Report 2021-22 93 The Financial Services business entered into a definitive agreement with HSBC Asset Management (India) Private Limited ("HSBC AMC") to sell its stake in the Asset Management Company (L&T Investment Management), subject to regulatory approvals. Average Assets Under Management (AAUM) in the Investment Management business is at 75,592 crore. The Gross Non-Performing Assets (GNPA) ratio improved to 3.80% as at March 31, 2022 from 4.97% as at March 31, 2021. Net NPA ratio has increased to 2% as at March 31, 2022 against 1.57% as on March 31, 2021, with one large value account being classified as NPA during the year. With easing of the pandemic and resumption of normalcy in economic activity, disbursal of fresh Loans and Advances grew by 31% y-o-y at 37,202 crore for the year ended March 31, 2022. The Loan Book stood at $88,341 crore as at March 31, 2022 registering a decline of 6% over the previous year, reflecting a cautious lending approach, focus on collections, portfolio sell down and a phased liquidation of the de-focused business book. The Net Interest Margins The segment's revenue declined by 10.7% y-o-y at ₹11,971 crore for FY 2021-22 due to targeted reduction in the wholesale loan book. 2021-22 NIM + Fees% Financial Performance of the Segment 2021-22 2020-21 EBIDTA In March 2022, one of the flagship projects of L&T IDPL, namely, Vadodara Bharuch Toll Road of 498 lane km reached the end of 15 years of concession period and was later transferred to NHAI, after settling all outstanding liabilities and disputes. The transfer of the project on March 17, 2022, and the Vesting Certificate was issued by NHAI within 16 minutes of transfer of project, which was the fastest in NHAI's history. During the year, Kudgi Transmission consistently achieved availability of 99.99%, thereby qualifying it to receive incentive payments over and above the transmission tariff. L&T IDPL holding company has become a zero-debt company during the year and has complied with procedural submissions to NSE in this regard. Consequently, the Company has applied to RBI for surrendering the NBFC CIC registration. The requisite RBI formalities in this regard have been complied with and the Company is awaiting the final approval confirming de-registration. Major Achievements As FASTag (Electronic Toll Collection) has been made mandatory with effect from 15th February 2021 for all the vehicles plying on NHAI roads, Electronic Toll collections as a proportion of total toll collections is currently over 96%. This digitalisation has resulted in reduced cash-handling and its associated costs. The operations have been fairly normal during the year, barring the impact of the second wave of COVID-19 and the farmer's agitation in the National Capital Region and the surrounding areas, which lasted till mid-December 2021. In order to mitigate the impact of the pandemic, the Union and State Government authorities have granted an extension of the concession period of such affected projects. Business Environment Over two decades of extensive experience in developing various infrastructure projects and working with governments, financial institutions, and corporate entities, has helped the Company to develop proven competencies in Viability Assessment, Financial Closure, Project Management, Operations & Maintenance and Portfolio Management of infrastructure assets across various sectors. with the Union and State Governments. Since its inception in 2001, the Company has developed landmark infrastructure projects across key sectors such as roads, bridges, transmission lines, ports, renewable energy, and urban infrastructure. It is one of India's largest road developers as measured by lane kilometres under concession agreements signed with Union and various State Government authorities. Currently, its portfolio includes nine roads & bridges projects of 3,936 lane km developed and operated (one road project in Gujarat ceased to be subsidiary during FY 2021-22) and a transmission line from Kudgi to Bidadi in Karnataka covering 490 km. It also manages five operational road assets covering 2,748 lane km transferred to Indinfravit Trust, an InvIT that the Company sponsored and launched in May 2018 as the first privately placed InvIT in India, with substantial holding from international pension funds and insurance investors. Major junction at Sambalpur-Rourkela Tollway Limited Statements Reports Revenue LARSEN & TOUBRO Management Integrated Statutory Discussion and Analysis Report Corporate Overview 94 L&T Infrastructure Development Projects Limited (L&T IDPL) is a pioneer in the Public-Private-Partnership (PPP) model of development in India, which involves the development of infrastructure projects by private sector players in partnership Overview DEVELOPMENT PROJECTS LIMITED (L&T IDPL) L&T INFRASTRUCTURE The funds employed by the segment as at March 31, 2022 at *20,136 crore, lower by 5.9% compared to March 31, 2021 mainly due to the divestment of Singoli-Bhatwari Hydro- Electric Plant. The segment reported an operating profit of 100 crore for FY 2021-22, lower than *194 crore reported in FY 2020- 21. The drop is mainly on account of non-consolidation of NPL profits with the management's decision to carry the investment in NPL at realisable value. The segment recorded revenue of ₹4,368 crore for the year ended March 31, 2022, higher by 20.6% over the previous year. The growth in revenue is mainly on account of higher Plant Load Factor (PLF) in Nabha Power Ltd. (NPL) with pickup in power demand in the state of Punjab. Further, the gradual increase in ridership of metro services in Hyderabad, aided the growth in revenue of the segment. 2021-22 100 Financial 84000 Construction & Mining Machinery Business (CMM) Major Product achievements: • Aramco Marjan Package I Order from Mcdermott • 48" Rich and Lean Gas Project from Gulfar • Berri Project Order from Saipem • Aramco Marjan Project Order from Cunado Spain The major orders include supplies to: Orders received: Major Achievements The industry is seeing a shift towards sustainable products leading to the creation of a strong demand for Industrial Valves. highly fragmented with the presence of large players as well as SMEs. These local players are very price competitive, in turn affecting the price margins of the entire industry. During the year, the business through its technical expertise customised the products and met customers' requirements: Cryogenic Ball Valves for Liquefied Natural Gas Integrated Annual Report 2021-22 103 The recovery of oil consumption across the globe and pent-up demand revived the pace of capital expenditure and opened up the market for industrial valves. Planned maintenance by customers deferred from previous period offered opportunities to the business. The valves market remains The business landscape of FY 2021-22 started with the COVID-19 impact in the first quarter and resumed normalcy by the second quarter. Raw material price increases, supply chain hurdles and high logistics cost dominated the global macro-economic scenario. Business Environment The business has a global manufacturing presence with two manufacturing facilities in Tamil Nadu, India which are equipped with state-of-the-art 5-axis machining centres, CNC machines and facilities for critical testing and two facilities in USA and Saudi Arabia. LTVL products deliver safety, reliability, and quality for industries across the world. L&T Valves are designed by specialists with deep understanding of various industry requirements, standards and practices, using state-of-the-art design and analysis software. The Company has a series of successful innovations to its credit, including mission-critical solutions for defence and aerospace industries. to serve key sectors such as oil and gas, defence, nuclear & aerospace, power, petrochemicals, chemicals, water, and pharmaceuticals across the globe. LTVL manufactures a wide range of products such as Gate, Globe, Check, Ball, Butterfly, Plug valves and automation solutions. L&T Valves also runs a global after-market business to support its installed base with service and spares needs. L&T Valves (LTVL) is a leader in flow-control solutions. The business leverages sixty years of manufacturing excellence Nickel Aluminium Bronze Valves for applications Overview • Metal seated trunnion mounted ball valves for high temperature service Large size triple offset butterfly valves • Customer Audits by Air Products, Man Energy Solutions, Kuwait National Petroleum, Saudi Aramco, GE power, SASO, NTPC, Black & Veatch, Vogt Power, Thermax, Chiyoda Corporation & NAMC, etc. Safety Integrity level (SIL) Certification - Gate, Ball, TMBV, TOBFV & Globe by TUV Nord & Exida API 603 Monogram Certification for Coimbatore & Kancheepuram facility • • API Spec Q1 & API 600, API 594, API 6D, API 609, The business made significant efforts to improve its approvals and certifications and gained fresh approvals in the following areas to enhance its market area and customer base. Approval/Certifications: Large-size butterfly valves for refineries • Soft-seated gate and check valves • Bellow seals gate valves for nuclear power and sodium service • Hull ventilation flap valves for submarine service In line with changing market requirements in areas of safety, emission standards in energy, the business made following product developments: Major Product developments: • Welded body buried service ball valves for city gas projects F92 material for power industry High pressure flex wedge and parallel slide gate valves in . • Triple offset butterfly valves for cryogenic service • Gate and check valves with Inconel 625 overlay for sour service . Globe control valves in F92 material for start-up vent services in power plants L&T VALVES LIMITED Environment, sustainability, and governance are expected to be a path to progress in the Indian real estate industry. Transparency and stakeholder interaction are now becoming increasingly important. Such growing awareness places developers like L&T Realty in a favourable position. Retail inflation has an adverse effect on the disposable income of consumers, possibly posing a concern over consumer sentiments for the near future. However, supportive measures from the Government, RBI and the resultant pick-up in end-user demand will keep the momentum going. Select initiatives by the Maharashtra State Government, particularly lower stamp duty on residential property registrations and 50% concession on development premiums were of great support to the real estate sector. Post pandemic, the residential sector has shown significant uptake across all top cities, supported by multiple factors such as lower interest rates, better affordability and positive outlook of the economy, resulting in liquidation of existing inventory levels. Business Environment Coming up on a 40-acre plot in the IT hub of Chennai, the 6.5 Mn sq. ft. L&T Innovation Campus project will be developed in phases. It will bring together world-class innovation business / IT hub, and an eclectic mix of leisure and lifestyle amenities, with a lush central parkland at its core. The development offers the convenience of Walk- To-Work. 4. L&T Innovation Campus, Chennai Located in the rapidly growing micro market of Hebbal, the project has the potential for development of commercial office spaces of 3.1 Mn. sq. ft., which is being taken up in phases. With unmatched connectivity and well-designed spaces, it is set to become the most favoured address for many technology companies. 3. Technology Park, Bengaluru Elixir Reserve, Mumbai Artist's Impression The continuously rising input cost of basic raw materials like cement, steel and other construction raw materials are current challenges facing the sector. Integrated Annual Report 2021-22 Designed to provide superior workspaces, it is a part of a larger integrated development promoting the 'walk to work' concept. It is one of the coveted corporate addresses in Powai, Mumbai with proximity to excellent social infrastructure. Much of this development is already completed and some has been effectively divested. 2. Technology Centres, Mumbai 1. Seawoods Grand Central, Navi Mumbai India's first Transit-Oriented Development (TOD), Seawoods Grand Central offers 2.6 Mn. sq. ft. of Grade A development with a unique combination of commercial and retail business spaces. Commercial Segment Conceptualised on the live-work-play theme, Raintree Boulevard is a 65-acre mixed-use project located in the high-growth micro-market of Hebbal. Situated just 20 mins away from the airport, the project offers fine-living and best-in-class amenities. L&T Tech park and a large format mall are within walking distance from the project. 1,000+ happy families are already residing at the project. Launched in phases, Olivia at Raintree Boulevard is a luxury offering launched during the year. 7. Raintree Boulevard, Bengaluru Centrona is a gated community situated in Ghatkopar and has functional residences with unmatched comforts and conveniences. The location boasts of being within easy reach of the city's most iconic locales, providing easy access to every corner of the city. With world-class amenities, it is perfect for people who want to spend more time with their loved ones. 6. Centrona, Mumbai 5. Rejuve 360, Mumbai 101 The regulatory changes / reforms over past few years in the realty sector have created an environment of transparency and reinforced customer confidence, leading to improved housing ownership. In the backdrop of improved mobility and rapid vaccination drives, employment generation picked up pace in the organised sector, led largely by hiring in the IT/ITES and BFSI sectors. As a result, office leasing activities in India picked up pace in last quarter, registering a healthy growth. Revival in the real estate space has attracted foreign investors leading to a sizeable inflow of foreign funds into commercial spaces in recent months. Homebuyers' preferences for bigger homes, large, gated communities, better amenities, and attractive pricing will sustain the demand for premium housing. The demand for residential properties will continue to surge due to increased urbanisation and rising household incomes. India is among the top 10 price-appreciating housing markets internationally. The real estate sector in India is expected to reach USD 1 trillion in market size by 2030 and contribute 13% to the country's GDP by 2025. Outlook 24" Class 600 Butterfly Valves. Large quantities supplied ahead of time for refinery expansion project Statements Reports LARSEN & TOUBRO Financial Integrated Statutory Report Discussion and Analysis Management Corporate Overview 102 • As the workplace merges with the home, sale of large size units gained momentum. Traction was seen in large format premium units in Crescent Bay, Parel, placing the business amongst the most sold projects in the premium South Mumbai market Launched a new phase 'Olivia' as part of a large maiden township in Bengaluru. The project commands a premium in the micro market • Successful launch of 'Veridian', a new phase in the flagship Powai development • Launched a premium project 'Elixir Reserve' in Powai Major Achievements is however, expected to take a longer time due to multiple factors. This change, coupled with customers preference for corporate brands offers a unique opportunity for L&T's realty business. The complete recovery of the commercial segment 104 Corporate Overview Management Discussion and Analysis • • Won the largest single order ever in this year for supply of mining equipment with a maintenance contract for a period of 10 years Construction & Mining Machinery Business (CMM) Major Achievements Komatsu HD785-7 Dump Trucks HD-465 B HD785 Integrated Annual Report 2021-22 . 107 The Indian tyre industry reached a turnover of about USD 7.8 Bn in 2021. The tyre demand has witnessed an overall healthy recovery of 19% -20% in the last 9 months. The recovery has been supported by a robust growth in the after-market replacement segment as well as the OEM tyre segment that has grown in the backdrop of higher vehicle sales. Also, the recovery in the domestic demand and growth in exports has resulted in overall better capacity utilisation for the overall industry. Nevertheless, the Indian tyre industry is facing significant headwinds in the form of a sharp rise in raw material prices, particularly for natural rubber and crude- linked imports such as synthetic rubber, carbon black, and other inputs. The first half of the year witnessed good recovery for the tyre industry with pick-up in economic activity and demand for vehicles. However, due to the effect of the Omicron-led 3rd wave, passenger car tyre demand remained muted for the second half of the year. Marginal growth was seen in the truck and bus market in Europe and North America. The growing infrastructure activities in both developed and developing countries, combined with increased agricultural and mining activities, has been providing a boost to the tyre sales in select segments. Rubber Processing Machinery Business (RPM) The demand for the rubber processing machinery manufactured by this division depends on the capital investments by the tyre majors, which is in turn linked to the growth forecast for the Automobile, Agricultural and Mining sectors. However, the demand opportunities for construction and mining equipment to some extent, got constrained due to stiff competition from domestic and Chinese equipment manufacturers. The market size for premium excavators grew by 9% in FY 2021-22 with L&T / KIPL's market share increasing to 31% from 30% in the previous year. The market demand for wheel loaders and vibratory compactors remained stable at about 6,000 with L&T/LTCEL maintaining its market share at 12% in FY 2021-22. The demand for mining / material handling equipment also improved on the basis of higher production of coal, iron-ore and other non-ferrous metals. During the year, highway construction activity increased as compared to the previous year as the overall contract awarding activity improved in this period. However, elections in five states resulted in subdued growth in Q4. Construction & Mining Machinery Business (CMM) Investment in the construction and mining sectors is one of the key demand drivers of the CMM business. Business Environment FY 2021-22 witnessed significant investments from the tyre majors both in domestic segment and international segment, especially in the Americas. The tyre manufacturers are mostly operating at their peak capacity and looking at expansion opportunities. The Truck & Bus, Agri and Off-the- Road segment continue to remain profitable and a focus area for the tyre makers due to increased agricultural, mining and construction activity. The investments in 2-wheeler and passenger car segments were only incremental. • Supplied 7000th PC71 and 2000th PC210-10M0 hydraulic excavators from KIPL and 1500th L&T vibratory compactor from LTCEL Highest ever dump truck sales of 135+ machines in a year • Commissioned L&T's largest skid plant (3 x 1500 TPH) in Ambey Mine, Rajmahal Coal Mines Rubber Processing Machinery Business (RPM) 108 Introduction of new variant of PC205 20T hydraulic excavator to cater to general construction and hiring segment Introduction of KGO (Komatsu Genuine Oil) lube dedicated van for promotion of genuine oils from Komatsu to expand sales and market share . • Launched L&T Genuine Lubricants along with Gulf Oil for LTCEL equipment • Both KIPL and L&T extended the warranty period by 2 months on the equipment supplied in view of the low utilisation of machines during the COVID-19 period Inauguration of KOWA (Komatsu Oil Wear Analysis) lab in Nagpur for oil analysis to help in ascertaining the machine condition • • Suraksha 10000 plus programme launched to cover PC210-10M0 excavator by extending the warranty service coverage to 5 years / 12,500 hours Significant Initiatives • PDC along with RPM worked on several new development and improvement projects related to Tyre Curing Presses and Tyre Building Machine (TBM) for supply to some of the marquee customers of RPM. It is noteworthy to mention that PDC was also awarded 2 patents related to the RPM business in this year • PDC along with LTCEL developed various attachments during the year such as Rock Splitter, Bottom Dump Attachment for L&T 300i, Clam Shell, Mass Excavation Bucket and Super Long Front for the 100T Class excavators migrate them to a new engine platform conforming to CEV IV emission norms and meet the new safety regulations • PDC along with LTCEL worked on certain construction equipment and road machinery of LTCEL to successfully Product Development Centre (PDC) • Reduced floor time for Truck Bus Radial (TBR) & Passenger Car Radial (PCR) presses by 40% thereby increasing assembly throughput Successfully engineered and executed Truck Bus Radial (TBR) Presses - Side Frame type - 3rd Generation Press with about 7.5% weight reduction in structures. The press offers unique features of energy efficiency with savings of 30% in steam consumption over earlier type of presses . • LTRPM received the US patent for the design of Mould-height adjustment for its new generation hydraulic curing press • Received the largest order from a Japanese tyre manufacturer for their green field project in India • Received a breakthrough order for the supply of first ever passenger car hydraulic tyre curing presses to USA L&T 1190 Soil Compactor Part of India's first Transit-Oriented Mixed-Use Development, Seawoods Development is spread across over 40 acres. Seawoods Residences offers unmatched connectivity and is surrounded by breath-taking views. It's a successful project, sold out on launch. More phases are expected to be launched soon. 1190 Reports The business with major linkages to the fortunes of the oil & gas segment plans to increase their focus on growing segments such as Water, LNG, Hydrogen and in other cryogenic application segments which are expected to grow in the coming year as it has suitable products available for the mentioned segments. Cryogenics and Water sector is expected to witness considerable growth in the coming years enabling positive outlook for valves business. With streamlined product basket building, initiatives on geographical expansion, resilient supply chain, digitalisation and a strengthened aftermarket team would help the business gain market share and build a strong Order Book in the coming year and deliver highest level of customer satisfaction. The business has also taken stock of advancements in renewables and energy sector in general. The Company is actively engaged in challenging assignments to create new products for the arising needs in clean energy and other associated sectors. The diverse portfolio in terms of geography and industries, continuous new product development, range extension is expected to be an advantage for the business in the years to come. The market remains highly fragmented with intensified competition rising from the changing market dynamics. Raw material and logistics costs remain as major challenges for the Company in the FY 2022-23. But with improved on time delivery and quality products supported by a good mix of direct and distribution customers, the Company is confident of improving its Order Book. Crude oil prices, capacity additions, geopolitical scenarios, liquidity, project capex spending and GDP trends in the relevant geographies continue to be the key demand drivers impacting order prospects. Outlook • Focus on automation of repetitive business processes by adapting RPA&AI / ML technologies has enabled substantial improvement in productivity and reducing overheads • The Company secured the Authorised Economic Operator (Tier 2) certification from the Government of India, Ministry of Finance, Central Board of Indirect Taxes and Customs, which is a key step to enhancing the logistics speed and customer satisfaction • Initiative to vertically integrate machine shop to foundry (six suppliers) improved supply chain visibility and performance as well as reduced the lead time for execution significantly • The Company prioritised the spending on improving the infrastructure by constructing a central kitting store and continuing to do shopfloor layout modifications to improve the lean flow of material 105 Efforts towards foundry vendor base rationalisation (from 57 foundries to 29 foundries) leading to better buying costs and terms, better supply quality and reliability • Robust internal quality standards enabled the Company to become the first Indian manufacturer to comply to the stringent specifications of The International Association of Oil & Gas Producers (IOGP) Large-size high pressure valve for Hydrogen project Applications Significant Initiatives Triple-offset Butterfly Valves for Refineries and Process Applications Statements LARSEN & TOUBRO Financial Statutory Reports Integrated Report • Integrated Annual Report 2021-22 KOMATSU EN Report Discussion and Analysis LARSEN & TOUBRO Financial Statutory Integrated Management Corporate Overview 106 The Product Development Centre (PDC), based at Coimbatore, with its highly-skilled design team, renders engineering and product development support for CMM and RPM businesses. The RPM division, located in Kancheepuram near Chennai, is engaged in building machines and tyre automation systems for the global tyre industry. RPM established as a JV in 1972 for manufacturing tyre curing presses and became a fully-owned business unit of L&T in 1995. The manufacturing facility located in Kancheepuram, India caters to the machinery requirements of the tyre industry and has supplied equipment to tyre majors in over 46 countries across the globe. The division also supports certain customers in the tyre industry with 'build to print' products and customised machinery development as well. RPM business is also celebrating a significant milestone in FY 2022-23 with its 50th anniversary. LTCEL, located in Doddaballapura, near Bengaluru, manufactures vibratory compactors, wheel loaders, hydraulic excavators, asphalt paver finishers, pneumatic tyred rollers, skid steer loaders, hydraulic power packs, cylinders, pumps and other components. During the year, LTCEL played a significant role in the process of development and manufacture of the girder transporter and straddle carrier for the Mumbai-Ahmedabad High-Speed Rail project. division completed 75 years of business during FY 2021-22 and celebrated the same through the release of a corporate stamp, among other initiatives. The CMM division is engaged in the business of distribution and after-sales service for hydraulic excavators and dump trucks manufactured by Komatsu India Private Limited (KIPL) and other mining and construction equipment manufactured by Komatsu worldwide. It also handles the distribution and after-sales support for a range of construction equipment including wheel loaders, compactors and hydraulic excavators manufactured by L&T Construction Equipment Limited (LTCEL) and Mining Tipper Trucks manufactured by Scania India. In addition, the division handles distribution and after-sales support for the mining equipment manufactured by L&T's Minerals & Metals SBG viz. surface miners, sand plants, crushing solutions and apron feeders. The CMM The Construction Equipment & Others (CE&O) business includes the manufacture and marketing of construction equipment, mining equipment and equipment for tyre manufacturing industry, broadly segregated into Construction & Mining Machinery (CMM) and Rubber Processing Machinery (RPM). Overview CONSTRUCTION EQUIPMENT & OTHERS With COVID-19 behind, revival of the oil prices, stable customer enquiries, buoyancy in the non-oil sectors like water, pharma, power, and focussed actions taken by LTVL, the outlook of the business remains positive. Komatsu PC300-8 Hydraulic Excavator with Breaker attachment 300 LC PC Statements 4. Seawoods Residences, Navi Mumbai Designed on the wellness thought, this residential complex is focused on the rejuvenation of mind, body, and soul. Conveniently located in Mulund west, Mumbai Rejuve 360 has sustained its position among premium developments in the micro-market. 1174 100 Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial LARSEN & TOUBRO Reports Statements Seawoods Grand Central, Navi Mumbai Residential Segment 1. Emerald Isle, Mumbai This flagship residential project in Powai spread over 90 acres and developed in phases. A new phase named Veridian was launched during the year. Regarded as the finest gated community, the project today has a lively community of over 1,000+ resident families. 2. Elixir Reserve, Mumbai Elixir Reserve is a premium residential project in Powai that is enveloped in a picturesque setting. This project is replete with state-of-the-art amenities, including an ICSE school, office towers and retail spaces within walking distance. 3. Crescent Bay, Mumbai With the Arabian Sea as the backdrop - Crescent Bay is a residential complex at Parel with the perfect setting for an exclusive lifestyle. The highlight of the development is a sky deck and other lifestyle amenities on level 21. The project is complete and occupied by 1,100+ families. 99 Major focus areas for NPL during FY 2022-23 would be HSE compliance, maximising plant availability, commissioning of FGD, resolution of long pending litigations, improving operational efficiency, securing adequate coal quality and quantity, cost management and digitalisation initiatives. NPL expects to commission a Flue Gas De-sulphurisation (FGD) system in FY 2022-23, which is a mandatory requirement under the environmental norms notified by Gol. The Company continuously faces operation and fuel related risks such as fuel quality, fuel availability, supply chain logistics and regulatory risks such as environmental compliances, clearances, and Government policies. The Company has implemented multiple measures in each of the risk areas to ensure a proactive approach and timely mitigation. The Gol appointed Commission for Air Quality Management (CAQM) has directed power plants within 300 kms of Delhi- NCR region to co-fire up to 5 -10% biomass, to address the concern of stubble burning. The increase in per capita energy consumption continues to promise robust long-term demand. However, domestic fuel supply and transportation challenges continue to linger and coal prices are likely to remain elevated due to various geopolitical issues. In FY 2022-23, the demand in Punjab is expected to remain around ~8,000 MW (Peak 15,000 MW) and as a result, NPL is expected to schedule a high PLF of ~82% and remain at the top of the merit order among the thermal power producer within the state. Outlook • Significant collection of receivables from PSPCL in a disputed matter pursuant to favourable order from Hon'ble Supreme Court Capital Overhaul (COH) of Unit 2 completed successfully L&T Realty is positioned amongst the top real estate developers in India, with development potential of ~60 Mn. sq. ft. across residential, commercial, and retail segments in Mumbai, Bengaluru, NCR and Chennai. The business model includes development in partnership with land/development rights owners, and sale/leasing of commercial spaces. REALTY BUSINESS The funds employed by the segment as at March 31, 2022 at 8,074 crore increased by 5.5% compared to March 31, 2021 largely attributed to inventory build-up of under construction property in the Realty business. The operating margin declined over the previous year since FY 2020-21 included a non-recurring gain on sale of a commercial property in the Realty business. 'Others' business comprises: a) Realty Business b) Industrial Machinery, Products & Others comprising of Construction & Mining Equipment, Rubber Processing Machinery and Industrial Valves c) Smart World & Communication d) Digital Business Financial Performance of the Segment Revenue for the segment registered a growth of 3.1% from Gross Revenue and OPM% 3.1% 6282 1441 * crore 8000 • 6093 1785 4000 3522 21.0% 17.4% 3134 2000 Integrated Annual Report 2021-22 2020-21 1319 2021-22 Realty Industrial Machinery & Others SWC & Digital OPM% *6,093 crore to ₹6,282 crore in FY 2021-22. The growth was in the Realty business on higher handover of flats and improved demand in Construction Equipment and Rubber Processing Machinery business. Supply chain disruptions and extended conversion cycles impacted the Valves business whereas completion of projects and lower execution momentum in the new jobs impacted revenues of Smart World & Communication business. 6000 • • Ensured domestic coal adequacy for FY 2021-22 • Sustained Operational Performance - Annual PLF: 79% v/s all India thermal average: 59% | OTHERS Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial LARSEN & TOUBRO Crescent Bay, Mumbai Statements Highest continuous operating station days achieved: 126 days (Previous best 119 days) • Zero Lost Time Injury (12.08 million cumulative safe working man-hours) Major Achievements Reports India's average electricity demand has gone up by 7.85% in FY 2021-22 (y-o-y) as the economy rebounded post easing of COVID-19 restrictions. The electricity demand in Punjab picked up during the year and the average demand has been higher by 7.5% (7,205 MW) compared to last year (6,705 MW). Punjab witnessed a net capacity addition of 113 MW during FY 2021-22, all of which was contributed by renewable sources. The annual Plant Load Factor (PLF) of NPL stood at 79%, the highest in the operational history of NPL and also achieved 20% higher PLF than the national average for FY 2021-22. Out of the total power demand of Punjab state, 15% was met by NPL. Business Environment 2x700 MW Supercritical Technology based Thermal Power Plant at Rajpura A drop in coal production due to the extended monsoons and an increase in imported coal prices, led to severe shortage in coal supplies. NPL made every possible effort to secure coal from various CIL subsidiaries and signed FSA with Northern Coalfields Limited (NCL) for transfer of coal linkage from SECL. • Introduction of PC500 50T hydraulic excavator for use by private coal OB (Overburden removal) contractors LARSEN & TOUBRO Passenger Car Floor Mounted Hydraulic Tyre Curing Press Smart Kiosk installed at Pimpri-Chinchwad D. Smart Klos In India, a number of B2C e-commerce platforms are well established and operating at scale. In comparison, the B2B e-commerce for industrial and construction products is at a nascent stage and just beginning to emerge with a few players operating in some segments of industry. PCMC SMART CITY (PCOCu Financial Statements Discussion and Analysis Statutory Integrated Report Rubber Processing Machinery Business (RPM) • Evolved 19 design projects through 'Technology Centre Initiatives' and implemented 9 initiatives for design improvements Management Corporate Overview L&T, with its presence across multiple industrial and infrastructure sectors, has deep knowledge of a large number of construction and industrial products and associated supply chain nuances. L&T also has rich experience in dealing with thousands of SMEs over the years, and thereby understanding their problems and impediments to growth. Further, L&T's experience with SMEs and with the products, provides an opportunity to create trust between buyers and sellers on the platform. Leveraging its strong brand salience, understanding of the products and leadership position, L&T is well placed to enter and service the B2B e-commerce segment. L&T SuFin is a B2B industrial products ecosystem which has been commercially launched in March 2022, providing a platform for SME / MSME buyers and sellers to connect in an efficient manner, thereby enabling sellers to expand their sales reach, and for buyers to find the right products and services at an optimal cost and quality. The business platform offers a wide product range in industrial supplies & consumables, building & construction materials, electrical & electronics equipment, machinery tools & mechanical equipment and packaging, printing & office supplies. The logistics partners on the platform would enable efficient delivery and fulfilment in a timely, cost-effective manner with strong service level agreement compliance. In this B2B marketplace initiative, financial services companies will also participate on the platform by providing attractive financing options to the registered users. The revenue for the platform is generated in a hybrid manner through subscription fees, advertising, product listing, etc. and through transactions fee by charging a commission for transacting on the platform. In addition, there are financing fees, and logistics fees collected from the entities for using the services. Reports • Created vendor fabrication facility adjacent to the plant, to cater to 150 MT / Month of fabrication load to address the shortfall of in-house capacity Successfully developed supplier base for machining of heavy structures like top/bottom structures, side frames, guide columns, lock ring etc. to meet the increased business requirements in Hydraulic Tyre Curing Press (HTCP) segment Outlook • Safe & Smart Infrastructure – Systems and solutions for Safe Cities, Smart Cities, Public Safety, Critical Infra Security, Traffic Management Solutions, Integrated Command Control Centres, Advanced Metering Solutions and Smart Utilities. - L&T's Smart World & Communication business has always endeavoured to keep pace with the ongoing advancements in the technology landscape with a diversified team of 700+ skilled professionals, the business is continuously keeping abreast with technology trends like Cloud Computing, IoT (Internet of Things), Al, Mobility, Drone Technology, LEO Satellites, 5G, Cyber security etc. The business operates in 3 major segments: Leveraging the experience garnered across years, the business has embarked on a transformational journey of establishing itself as a Global Smart Solutions & Services Leader for Smart Cities and in NextGen Communication technologies. The business over the years has gathered prolific experience as a leading systems integrator (MSI) through roll out of domain centric projects, developing 25+ Safe & Smart Cities, providing digital connectivity to 13 states, integrating more than 1.25 lakh loT Devices, 30+ Data Centers and various defence communication projects. The Smart World & Communication business unit has been leveraging the latest technological innovations in Utilities, Communication, Cybersecurity and loT areas to benefit society at large. The business provides end-to-end solutions / services in the system development of Smart Cities, NextGen Communication & Military Communication. Integrated Command Control Centre, Jhansi Integrated Annual Report 2021-22 109 The global adoption of technology for smarter, secure, intelligent solutions, efficiency improvement and optimisation are not only having a profound impact on how technology is being used in our daily lives but also has opened a multitude of business opportunities. Overview SMART WORLD & COMMUNICATION The business has an added advantage as compared to the European competitors, due to its wide product range across all segments and being a market leader in machinery for Off-the- Road in Agri and Mining sectors which will aid the growth in coming years. Electric car sales will be a growth pole for the industry, with new electric products coming to market. Also, electric vehicles are expected to see strong adoption in the coming years, with 2-wheelers and 3-wheelers leading the way. Rubber Processing Machinery Business (RPM) large irrigation projects and coal OB (Overburden removal) contractors. Government initiatives in infrastructure development in roads, railways, irrigation, ports, urban and rural infrastructure, affordable housing, etc., are expected to drive demand in the cement and metal sectors, which in turn will boost demand for excavators, dump trucks, dozers and other road construction and mining equipment. With ~65% of demand for mining equipment coming from coal PSUs, business is planning to target selective tenders along with Komatsu. Business plans to strengthen its position in the premium segment by increasing its focus on large contractors, Construction & Mining Machinery Business (CMM) With the Government's thrust on investment in infrastructure construction activity expected to pick up pace during the coming year, the construction equipment market is expected to grow by 17%. • Successfully implemented modular assembly and testing methodology for TBR presses • The global tyre demand is likely to be robust and tyre companies are poised for investments in select segments. The global tyre market size is estimated to be worth USD 146 Bn in 2022 and is forecast to a readjusted size of USD 192 Bn by 2028 with a CAGR of 4.7% during this period. The domestic tyre market is expected to be very buoyant especially in sectors like Agri, Mining and Truck & Bus. As per ICRA, the Indian automobile sales volume is expected to grow by 5-9% y-o-y in FY 2022-23. L&T SuFin, India's first business platform for industrial and construction products, integrated with finance and logistics options. Communication & Telecom Infrastructure - Systems and solutions for Network Design, Engineering & Rollouts, Network Migration & Upgradation, NextGen Data Centers, Private Cloud, Cyber Security with focus on IT / OT Security, The Cyber Security market continues to provide exceptional opportunities for solution providers. With the increasing threats and IT & OT convergence Cyber Security solutions have received a push in the Private as well as Government sectors. 5G is critical to cater to the future needs of digitalisation and for developing digital solutions for businesses across the globe, which will create opportunities for efficiency enhancements and new revenue streams. 5G spectrum allocation is expected to be fast-tracked and the rollouts are expected to be implemented in the near future. Driven by the need for high-speed and secured wireless network, the private LTE market size is experiencing an accelerated adoption across industries and in an exponential year on year market growth, creating opportunities for the business in the areas of adoption of private LTE across industries. Special initiatives for Data Center & Cloud Modernisation and IT Refresh are being implemented by Government and Private sector. The growing penetration of digital models across a wide range of businesses offers a massive opportunity in this Data Centre & Cloud ecosystem. The BharatNet program to provide digital connectivity to gram panchayats across the country has been targeted for completion by 2025. The rising security concerns and emergency service are leveraging the perimeter security and quick response system against any external threat, thus giving a boost to the perimeter security market for Government and private sector establishments such as ports, seaports, defence, industries, factories etc. in the coming financial year. Under the Jal Jeevan Mission, sensor-based loT devices play a crucial role in providing safe quality of water and restrict pilferage. L&T EduTech - Building Value for Learners, Academia and Industry Integrated Annual Report 2021-22 111 Rapid urbanisation is driving the use of technology to solve complex city problems globally. Smart Cities expansion to remaining Tier 2 & Tier 3 cities is expected. Public Safety (City Surveillance) and better commute experience (ITMS) in cities are being prioritised by the Government. The Smart Meter National Program in India aims to connect Smart Meters at 250 Mn households by 2025. Similar to the Advanced Metering for Energy utilities, opportunities pertaining to loT solutions for Water Utilities is also expected to gain traction Outlook •Facility Acceptance test for Jharkhand Statewide Area Network Project successfully completed • Telecom system for R2 section of Bengaluru Metro flagged off Cyberabad & Rachakonda ITMS for Cyberabad & Rachakonda Commissionerate System for Integrated Test Range for DRDO The latest Spacecom policy has opened doors for private companies to participate in the domain. Growing application of Satellites for Surveillance, Defence & Remote connectivity through Satellite broadband (LEO / MEO sats.) has opened up new avenues in the space domain for ground stations. Commissioning of 9.3 meter Earth Satellite Antenna The Smart World & Communication business with its experience and expertise is well positioned to ride on the wave of digitalisation and digital connectivity and convert the prospects to project wins. 'Others' also includes the new age businesses incubated by the Company. These ventures are a part of L&T's plan to leverage digital technologies in some of its core domains in order to future-proof them and tap future growth opportunities. LARSEN & TOUBRO It. With digitalisation making inroads into all business segments, e-commerce is slated to grow exponentially and in this positive environment, L&T SuFin brings choice and convenience in a single and completely reliable package. Reports Statutory Financial Statements Report Integrated Discussion and Analysis Management Corporate Overview 112 L&T EduTech is a business formed to offer EdTech products and solutions to educational institutions, skilling bodies, working L&T, with its rich experience in engineering, is well placed to develop industry led, application-oriented content, bridging the industry-academia gap. L&T's courses are developed based on its inherent expertise and strengths in core engineering, manufacturing, technology and its efforts in digitalisation, and not just an aggregation of the existing resources. Technology has led to massive disruption in the education industry. World-class education is now available online and is expected to complement the physical classroom learning. Hybrid / blended learning is here to stay and has made education equitable, accessible and affordable. L&T EduTech DIGITAL BUSINESSES . . • Successful soft launch of Moradabad Smart City Project Integrated Command Control Centre ahead of schedule Integrated Management Corporate Overview 110 The business is moving up the technology value chain with a focus on solution / services-based domain centric The BharatNet and Smart Meter programmes saw various deliberations in the operational modality and policies rollout leading to delay in implementation. Defence and Space technology got higher budgetary allocations, paving the way for opportunities for Military Communications but faced with slow roll outs. Citizen's safety continued to be a Government priority and City Surveillance and Intelligent Transit Management System (ITMS) projects saw movement in few cities like Bengaluru, Chennai, Delhi, etc. Overall, the progress under the Smart City Mission has been uneven due to administrative delays and financial constraints with many city corporations / agencies. The opportunity landscape was affected by the 2nd and 3rd wave of the COVID-19 pandemic. Diversion of Government spends resulted in the decline of the addressable market. The progress of certain projects was also impacted as the work- front clearances were delayed due to the restrictions imposed on account of COVID-19. Business Environment Military Communication – Systems and solutions for Satcom and Ground stations, Radio communication System (HF VHF & UHF), Tactical Communication Systems, Software Defined Radios, Electronic Warfare Systems, Vessel Traffic and Coastal Surveillance System. - L&T SuFin Cloud Security, LTE, Virtualised Network Technologies, 4G/ 5G, TETRA. Discussion and Analysis Report Statutory Reports Financial Projects commissioned: • The business has signed transfer of technology with Centre for Development of Advanced Computing (CDAC) for Cyber Security- DLM using blockchain and Centre for Artificial Intelligence & Robotics (CAIR) DRDO for Secured Handset • The Communications segment successfully launched the in-house developed Network Management System that can effectively monitor the IT and Non-IT Infra simultaneously in a project • Additionally, the business also carried out the proof of concept for private Long Term Evolution at L&T's A M Naik Heavy Engineering Complex Hazira in Surat • The business also successfully demonstrated its capability in the 5G domain with the successful deployment of use case leveraging lot, Video Al riding on 5G network in the areas of public safety and smart & connected health • Breakthrough orders in areas of solutions / services and from private sector with solutions order received from Telangana, orders in Operational Technology and Cyber security from industrial segments, order for setting up of Security Operation Centre, etc • Integrated Mobile Shelters for Armed Forces for Advanced Systems Laboratory of DRDO professionals, students, and learners across segments using a technology intensive user-friendly platform. The business commercially launched on October 15, 2021 intends to further fine-tune the product over time. The offerings include technical courses for colleges covering a wide stream of subjects like Civil, Mechanical, Electrical & Electronics, IT, Chemical, etc. It also offers Vocational & Skilling programmes for increasing employability and Upskilling and Assessments for evaluating as is skills for measuring employability and for competency mapping. There are four broad categories in EdTech Industry and out of the four segments, L&T has decided to enter Higher Education and Professional skilling. To address the issue of equity, access and opportunity, University Grants Commission has recently doubled the academic credit limit for online courses to 40%, which positively supports the business. Industry-led curriculums and cross functional credits are only going to increase in number since there is a dearth of continuous industry-based knowledge and upgradation among the students of India. All these aspects create a positive outlook for the business. • Ahmedabad Safe City Project - Integrated Command & Control Center, City Surveillance System and Video Analytics solutions for citizen safety Despite challenges posed by COVID-19 on the market opportunities, the business was able to secure multiple critical jobs such as: Major Achievements opportunities for more profitable and sustainable pipeline in the focus domains. Smart Pole at Vishakapatnam Smart Signalling System at Raipur Statements LARSEN & TOUBRO • Patna Smart City - Integrated Command and Control Center (ICCC Smart City Platform) and implementation of city surveillance, ITMS and smart solutions and analytics • Moradabad Smart City for creation of Command-and- Control Centre (CCC), CCTV Surveillance, Smart Traffic Solution, and Integration of various ICT components 113 LARSEN & TOUBRO | INFORMATION TECHNOLOGY Page no. 196 → 118 NATURAL CAPITAL Page no. 136- SOCIAL AND RELATIONSHIP CAPITAL Page no. 178 Statutory Financial Reports Report Discussion and Analysis Integrated Management Corporate Overview 116 • NASSCOM honoured L&T Technology Services with the Engineering and Innovation Excellence Awards 2021 in the 'Engineered-In-India Product of the Year' category for its Robotic Endo-Trainer Kit L&T Technology Services • Won the Silver award in the Most Innovative Company of the Year category at the Best in Biz Awards 2021 in North America • Certified by Great Place to Work® Institute as a Great Place to Work® in India and recognised as one among India's Best Workplaces TM for Women for 2021 (Top 50 - Large Companies) • Won three Brandon Hall Group Human Capital Management Excellence Awards for 2021 for innovative leadership development, HR data analytics, and employee benefits, wellness and well-being programs • Awarded Silver rating by EcoVadis in this year's sustainability assessment, placing Mindtree among the top 25% of the more than 75,000 companies it assessed • Ranked second for client satisfaction in the 2021 UK IT Sourcing Study, conducted by Whitelane Research in collaboration with PA Consulting, with an overall satisfaction score of 80%, well above the industry average of 72% Mindtree Integrated Annual Report 2021-22 • LTI in ITS Top 10 list in Everest Group's PEAK MatrixⓇ IT Service Provider of the Year 2022 and Ranked 1 in Top ITS Challengers list in Everest Group's PEAK Matrix® IT Service Provider of the Year 2022 • Received Gold recognition from EcoVadis for ESG practices including environment, labor and human rights, ethics and sustainable procurement Recognised as a Great Place to Work-Certified TM Company in the USA and as Top Employer in the UK for a second consecutive year • FINANCIAL CAPITAL • LTI has been recognised as the Global Innovation Partner of the Year by Snowflake, the Data Cloud Company L&T shall pursue eco-friendly growth, promoting a culture of sustainability and innovation, and thereby contribute towards a better world. VISION • Confederation of Indian Industry (CII) awarded LTTS with the prestigious Top 25 Innovative Company Award at the 2021 Industrial Innovation Award • LTTS' Chest-rAITM solution recognised in the Innovation in Overall Customer Experience category by ASSOCHAM 2nd Innovators' Excellence Awards 2021 • Zinnov rated LTTS as a global ER&D Leader and leader across its core verticals such as Automotive, Aerospace, Medical Devices, Industrial, Semicon & Telecom • LTTS has been recognised as a Leader in Digital Engineering in ISG's Manufacturing Industry Services 2021 Study in the Transportation, Hi-Tech and Industrial segments, along with its Life Science Digital Services Study recognising LTTS as a Leader in Europe & USA in the MedTech and Digital Transformation Services areas Hyderabad Metro . Telangana State Global Linker - 4th Edition of the Telangana State Industry Award 2021 for best Sustainability Practices Nabha Power • 'Best Thermal Power Generator - Commissioned after 2010' by IPPAI Realty • A. M. Naik Tower awarded the Luxury Project of the Year – Commercial and Most Environmentally Friendly Commercial Office Space at the Asian Leadership Awards 2021 • Raintree Boulevard, Bengaluru recognised as the Residential Project of the Year at the Realty Plus - South India Awards Valves • Silver Medal in the National awards for Manufacturing competitiveness 2021 organised by International Research Institute for Manufacturing Construction Equipment Business • CMM business received best excavator brand 2021 award for PC 210-10M0 excavator and Innovative New Equipment award for L&T 990HFi vibratory compactor from Construction week equipment and infra conference & awards 2021 Smart World & Communication - • India Digital Awards – 2021 for Best Supply Chain Solution for the inhouse end to end Supply chain solution (SWIFT, Smart Sign off & i-smart Inventory) . India Digital Awards - 2021 for Best Mobile Application was awarded to Jhansi Smart City for the application developed for Government bodies 117 Integrated Annual Report 2021-22 INTEGRATED REPORT SUSTAINABILITY For a better world! L&T Infotech • LTI Syncordis has been recognised as Temenos Service Partner of the Year Defence Engineering differentiator for the success of an organisation. Major emphasis was given on campus branding which included initiatives like the 'L&T Campus Engage' programme, that facilitates the connection with the engineering and management students across various colleges by offering industrial visits, sponsoring fests, organising national events, tech talks. GRACE (Get Ready for an Awesome Career in Engineering) was launched as a pre-joining engagement initiative, which included gamified content with leaderboards, webinars, technical talks and newsletters, presentations on marquee L&T projects, virtual industry visits and engagement through social media platforms. LARSEN & TOUBRO Financial Statements Integrated Statutory Report Reports • Won Apex Gold Medal award for defence work centre at Hazira by International Research Institute for Manufacturing Management Corporate Overview 114 In the post COVID-19 scenario of 'War for Talent', the attraction and retention of talent acts as the biggest L&T Radio has been launched to create a high-impact employee communication and engagement environment for all L&T-ites, through a series of podcast covering leadership messages, employer branding, success stories, life learnings, health and wellness, HR policies, and more. HiFive, an online rewards and recognition platform was integrated to promote a culture of appreciation and recognition of employees at the workplace. An Al-enabled BOT was integrated to facilitate quick engagement surveys across the organisation. The platform has been branded HEERA. This provides a methodical approach of gathering employees' feedback/views periodically. Basis such insights, appropriate and timely action is expected to help further improve employees' experience and engagement. L&T's Performance Management System, aptly named FAIR (Framework for Linking Appraisals with Incentives and Rewards), ensures that top-class talent gets visibility and furthering meritocracy. The Leadership Development Centres, pivotal to the Company's core philosophy of grooming internal talent, ensures that the right leadership talent is identified through an intense and objective selection process. Talent Assessment is being successfully done through the Development Centres which encompass a structured and objective 2-3-day process to identify the strengths and developmental needs of employees in terms of the required competencies. critical roles and high potential employees, define career paths, assess role-readiness, create targeted mentoring programmes, match mentors and mentees, and enable mentor / mentee collaboration. IT at L&T is in a sweet spot as IT and digital transformation permeates across L&T using various tools and technologies. As this happens, IT is working very closely with the businesses and stands ready to deliver to business relevant and state-of- the-art solutions that will enable L&T to stay competitive and secure in the future. At L&T we are constantly enabling businesses with new, innovative platforms for ERP, Vendor Invoice Management, Data Analytics, etc., that enable the evolution of a real time enterprise. L&T also continues to work with public cloud vendors selectively to move workloads wherever found economically viable. Multiple generational changes in IT Infrastructure in strategic areas have been done to ensure that IT is able to respond to the new needs of the business for the next several years. All these investments are done with an eye to reduce information security risk at all times. The digitalisation journey that started with an advanced ERP solution and online Performance Management System was further integrated with a Career Development & Succession planning module, which helped in identifying emerging leaders and build a strong talent pipeline. It helped to identify The pandemic did not deter the Company from continuing with industry leading HR initiatives and some of them are summarised below. Statements With a people-centric philosophy and practice, combined with dynamic top management, the Company was able to ensure business continuity, keep the workforce safe, healthy, motivated and engaged and contribute to the society during the unprecedented times brought about by the COVID-19 pandemic. Continuous communication from the top management and the HR team helped the employees deliver their best amidst the pandemic. Financial assistance and additional insurance was provided to employees and their family members affected by COVID-19 along with educational, financial and career support to families of deceased employees. The Company also went out on a war footing to build medical grade Oxygen Generation Units and donated 40 of such large-scale Oxygen Generating units to various hospitals across the country. | HUMAN RESOURCES Over the past year, significant, yet strategic investments have been done in the areas of cyber security to ensure that uniform sets of policies, processes and technologies are implemented across the organisation to tackle the ever evolving threat landscape. 'Security by design' principles are applied in all areas of IT to ensure that all applications are secure right from the development stage. While the investments continue in strategic areas of IT, there is a fundamental shift in the way business is done post the COVID-19 pandemic. Remote working and online collaboration are the new normal of doing business. As the new normal settles in, it is even more imperative that one secures these new modes of communication and collaboration. While the IT and digital landscapes continue to expand within L&T, more and more business stakeholders are becoming cognizant of the value that IT delivers to the business vis-à-vis the investments being put in. Continual measurement of IT value delivery is the new order in the business. IT at L&T operates on a federated structure with Corporate IT as the apex IT organisation and CIO council that is represented by all business CIOs. The IT spends at business levels are governed by the specific needs of that particular business. Regular awareness and training programmes are being conducted around IT and Information Security to ensure that all employees understand the criticality of IT and use it judiciously for the betterment of the organisation. A structured succession planning approach is undertaken to meet business objectives. An entire portfolio of critical roles is created by aligning the impact drivers, where succession matters the most. A Career Development and Succession Planning Module is integrated with the Performance Management System to facilitate the process in a more efficient manner. Discussion and Analysis The organisation gives a lot of emphasis on learning and development. It runs as many as 18 dedicated training institutes/academies including Leadership Development Academy, Lonavala, IPM - Institute of Project Management, Chennai & Vadodara, CTEA - Corporate Technology & Engineering Academy, Mysuru & Madh, Safety Innovation School, Hazira, Surat and 8 CSTIS - Construction Skills Training Institute across the country. IPM has now established the Knowledge@Work platform tailored to provide project execution related knowledge assets in a digital form. It has also initiated Pragati - the Project Leadership Development Program (PLDP) of Larsen & Toubro, which is aimed at enabling the comprehensive development of project leaders who can handle mega projects and mega portfolios through a structured competency-based development. • The 400 MW Bibiyana South Gas-based Combined Cycle Power Plant in Bangladesh has been conferred the Award of Merit by the prestigious US-based publication - Engineering News-Record (ENR) Power • CII EHS award 2021 under 'Construction Category' and 'EHS Workforce Engagement' special category award for HPCL FCHCU & HPCL CDU VDU projects • ASSP - GCC Excellence Awards 2021 for NSGEP & TL 5 Project, KOC Kuwait • Winner Award for Best Practices in Occupational Health and Safety 2021 from Confederation of Indian Industries (CII) • Business adjudged as the 'Top EPC Contractor in the Middle East' by Oil & Gas Middle East magazine The Company's signature Seven-Step Leadership Development Programme is an established best practice in talent development. It prepares leaders at all levels. This flagship programme provides young employees with high potential access to a curated learning experience delivered by reputed thought leaders from Indian and international business education institutes. The emerging leaders who move up the Seven-Step Leadership Programme are mentored by seniors ensuring a robustness in the continuity of the leadership thought process and value systems. • PT&D Oman won the Dossier Award for the Best EPC Contractor of the Year Power Transmission & Distribution • Business bagged the International Green Apple Environment Award 2021, UK in Habitat and Biodiversity Conservation in Mumbai Coastal Road Packages 1 and 4 Heavy Civil Infrastructure • 'Statue of Unity' Project won the 'Outstanding Structure' IA StructE National Award • NPCI Datacenter Chennai & Hyderabad received 'TIER - IV' Design Certificate from 'UPTIME INSTITUTE" Hydrocarbon Buildings & Factories • American Concrete Institute awarded Narendra Modi Cricket Stadium Motera with Overall Excellence award The Company has a matured Safety Education Programme that is designed to build and strengthen a culture of safety at workplace. Ensuring safety for its employees and workmen, the Company has partnered with the National Examination Board in Occupational Safety & Health (NEBOSH) and The Institution of Occupational Safety & Health (IOSH) to develop internal training capabilities in EHS and is an accredited course provider for its employees on diverse aspects of industrial and project safety. With the emphasis on diversity and inclusion, L&T has embarked on a mission to make it a key business imperative. Employees at L&T cut across the barriers of race, gender, nationality, caste and age, reinforcing the Company's image as an inclusive organisation. For the last couple of years, very focused initiatives have been undertaken to improve the gender ratio in the organisation on all the 3 aspects - attraction, development, and retention of women employees. Also, re-entry of women into the workforce post maternity and child-rearing is being supported. The unique platform 'Renew' which is linked to the talent acquisition portal is designed specifically for the same. The 'Winspire' initiative celebrates the journey of women leaders and provides them a platform to share their inspiring stories of overcoming challenges, through a series of interviews and panel discussions. GROW (Get Ready to Own & Win) aims at providing opportunities to women employees to explore leadership potential and accelerate personal growth through group and individual coaching. 'Winspire Propel' and 'Winspire Rise' initiatives were launched pan L&T for developing mid-career women leaders in Tier 2 and for early career women in Tier 1. There are a host of initiatives planned under the newly formulated D&I Charter based on 4 broad themes of Induct, Engage, Develop leadership pipeline and Enable a supporting ecosystem, to further strengthen the inclusive culture of L&T and make it even more diverse. All the above practices have been recognised by prestigious and premier national and international bodies through numerous accolades and some of the awards won by the Company are: • International Gold Award in the 6th Annual Stevie Awards for Great Employers • ATD BEST 2022 for Talent Development • ATD Excellence in Practice Award 2022 in Leadership / Management Development The Company also has an institutionalised mechanism for dealing with complaints of sexual harassment through a formal committee constituted in line with the Company's policy on 'The Protection of Women's Rights' at workplace under relevant statutory guidelines. This policy has been widely disseminated across the Company and all complaints are addressed in a time-bound manner. For further details on HR, refer Human Capital (page no.168) 115 Integrated Annual Report 2021-22 | AWARDS During the year, the CSR Journal has ranked Larsen & Toubro Limited #18 among Top-100 companies in India for CSR and Sustainability. Multiple projects across multiple businesses received awards from ROSPA (The Royal Society for the Prevention of Accidents) and British Safety Council for Environment, Health and Safety. Further, businesses have also won many awards and accolades, some noteworthy awards are mentioned below: Page no. 148. 0 Statements LARSEN & TOUBRO INTELLECTUAL CAPITAL CAPITAL Corporate Overview 899 Reports Statutory Financial Integrated Report Management Discussion and Analysis Page no. 158 > MANUFACTURED HUMAN CAPITAL Page no. 168 Complaints resolved: 50 At L&T, we have been taking concerted efforts towards achieving resource efficiency and decarbonising our businesses. We have sharpened our focus on improving performance across environmental, social and governance (ESG) parameters. We are revisiting our vision, policies, frameworks, roadmaps and action plans to deliver solutions towards building a better future. This Integrated Report (IR) includes financial and non- financial performance of L&T Limited and is aligned to principles of International Framework developed by the International Integrated Reporting Council (IIRC). The Report expands the target audience from the primary provider of financial capital to include employees, customers, suppliers, local communities, regulators, and policy-makers. Project updates . L&T's Interaction and Engagement Approach Regular communication through: Effective/high-quality training programmes • • Skill development Employee benefits • • Career growth Material Topics: EMPLOYEES • Town halls Statements Report Discussion and Analysis LARSEN & TOUBRO Financial Statutory Integrated Management Corporate Overview 124 • KPIs - Safety, water, material management, energy and GHG emissions, among others. • Increased after-sales support and regular monitoring of projects Reports • Departmental meetings • Connect sessions where employees voice their ideas and concerns • Internal magazines and portals such as Newsman, SPOT . • Cost-effective price negotiations Value creation Regular visits to suppliers' and contractors' facilities Rights, EHS training, etc. . • Training and capacity building programmes such as Human E-tendering and e-procuring and supplier meets • Periodic partner meets L&T's Interaction and Engagement Approach project/establishment's requirements • Different purchase processes by businesses as per • Price reduction Repeat orders • Timely payments • Material Topics: SUPPLIERS/CONTRACTORS • Promote employee wellness, functional and soft-skill development programmes, leadership development programmes, continuous improvement in programmes for structured learning and development of workforce • Focus on attracting and retaining talent Value creation Enterprise-wide employee portal called 'L&T Scape' for regular connect News, RAPL, etc. • Tighter project monitoring and control Screening, assessment and audits of suppliers related to On-time project completion with deeper 'customer connect' at multiple levels. • • Integrated Reports (IRS) • Business Responsibility and Sustainability Report (BRSR, earlier BRR) • Investor grievance channels along with the presentation of financial reports and presentations • Annual general meetings Face-to-face meetings • Quarterly calls . L&T's Interaction and Engagement Approach • Fair business practices • Effective financial and non-financial risk controls Regular announcements and filings with the stock exchanges • Improved Return on Investment (ROI) Material Topics: SHAREHOLDERS AND INVESTORS Fostering and nurturing relationships with all our partners and stakeholders is essential for the success of the Company and long term value creation. Backed by strong engagement platforms, we are working on several initiatives with our partners across the value chain for inclusive development. We are able to manage risks and opportunities proactively and set clear goals to deliver long term shared value by engaging with our key stakeholders through regular dialogues. | STAKEHOLDER ENGAGEMENT Integrated Annual Report 2021-22 123 Page 24 We have defined the financial and non-financial KPIs to measure the impacts of our strategy execution over the short-, medium- and long-term. Key performance indicators: 8 Page 292-317 • Business performance Value creation L&T Limited is India's largest E&C company with ₹1,010 Bn revenue and 2,483 Bn market capitalisation. • Solid financial performance irrespective of challenges Value creation surveys and feedback forms • Periodic reviews, annual reviews, customer satisfaction • One-on-one interactions GHG emissions performance •Transparency in energy, water and • High safety standards • • Innovation and state-of-art engineering techniques • Competitive contract price bid • Confidentiality Timely completion of projects • Material Topics: Advertising campaigns, bulletins, and news • • Exhibitions and trade fairs Workshops and conferences . • Customer meets Continuous interaction through various channels such as: L&T's Interaction and Engagement Approach CUSTOMERS • Consistent credit ratings CRISIL: AAA (Stable), ICRA: AAA (Stable) . across business processes and remain accountable to stakeholders. quality and EHS aspects Integrated Annual Report 2021-22 6 9 13 8 14 11 12 7 15 High We identified 32 potential material issues which are directly or indirectly related to our businesses. Stakeholder feedback was obtained through surveys and finally top 15 material issues which are most important for short-, medium- and long-term value creation from both internal and external stakeholders perspective, were identified. 10 MATERIALITY MATRIX About the report 128 127 Mumbai Trans Harbour Link Finalisation of material topics Stakeholder feedback Stakeholder Engagement Stakeholder identification and prioritisation Categorisation of potential material topics Identification of potential topics ASSESSMENT PROCESS Integrated Annual Report 2021-22 5 4 3 15. Social Engagement & Impact 14. Water, Waste & Hazardous Materials Management 13. Brand Management 12. Quality Of Products And Project Delivery And Cybersecurity 11. Data Security, Privacy Equal Opportunity 10. Diversity, Inclusion & 9. Climate Action 8. Talent Management-Attraction, Retention & Development 7. Sustainable Supply Chain 6. Skilled Manpower Labour Conditions 5. Human Rights & 4. Employee & Workforce Engagement, Wellbeing, Heath & Safety 3. Business Ethics 2. Corporate Governance & Satisfaction 1. Customer Experience Material topics: 2 1 High Importance for L&T Low Materiality assessment is the process to identify, prioritise, track and report on ESG issues that are of concern to stakeholders and can impact the business. A matter is material if it is of such relevance and importance that it could substantively influence the assessments of providers of financial capital regarding the organization's ability to create value over the short, medium and long term. In FY 2021-22, we conducted an extensive stakeholder engagement exercise to identify the top ten material issues and understand the stakeholders' perspectives on the potential material topics and efforts for sustainability. These material topics form input for our strategy, planning and disclosure. 125 | MATERIALITY ASSESMENT Statements • Interactions for news and articles Regular press meets and periodic media visits L&T's Interaction and Engagement Approach COMMUNITIES Transparent Stakeholder Communication • Material Topic: • Present our performance through mandatory and non- mandatory disclosures • Continual improvement in our ESG performance Value creation For further details on our public policy advocacy, please refer to Principle 7 of BRSR [Businesses, when engaging in influencing public and regulatory policy, should do so in a manner that is responsible and transparent] Value creation Play an active role in policy formulation Regular interaction with local governments • • . L&T's Interaction and Engagement Approach MEDIA • CSR and reporting • ESG performance and Integration Compliance with regulations Material Topics: GOVERNMENT Member of important industry associations • Provide media updates • Share critical information through press releases and feeds to social media (LinkedIn, Facebook and Statutory Financial Reports Integrated Discussion and Analysis Report Management Corporate Overview 126 • Integrated Community Development Programmes • Access to drinking water and sanitation in water- stressed regions • Education, health and skill development for communities around L&T establishments and project sites • Nine Construction Skills Training Institutes (CSTIs) impart training in formwork, carpentry, bar-bending, steel fixing, masonry, construction, electrician skills, welding and CCTV installation training Value creation • Continuous engagement with village panchayats and local authorities . Quarterly review of Integrated Community Development Projects Volunteering activities • • CSR programmes and initiatives Regular engagement through: L&T's Interaction and Engagement Approach • Water and sanitation - development of community infrastructure Improvement in well-being and living standards • Expectation of livelihood creation • Material Topics: • Conduct media briefings and presentations L&T website) LARSEN & TOUBRO We are committed to the highest degree of ethics and compliance. We ensure transparency Stakeholder concern 7 Report Discussion and Analysis Statutory Financial Integrated Management Corporate Overview Statements LARSEN & TOUBRO 11 15 9. 1. Reports Revenue in FY 2022 from new emerging business started in last three years: *21,510 Mn 14 15 16 လ 13 7. 9. 12 1 7 11 12 13 2 6 • Green Business revenue: *388.43 Bn Defence, LTEH): 321,967 MT reporting year (B&F, PT&D, M&M, HE, Factory Output: Total production in the Value Engineering projects: 74 Human Capital Permanent Employees: 45,615 Engineers (BTech/MTech/Diploma): 37,966 Workforce (Contract Employees): 200,062 Lines Transmission and Distribution Design thinking 000 Digitalisation Water Treatment Plant Nuclear Plant Ferrous and Non ferrous plant Hydro Power Plant Solar PV Plant Airports Technology Manufacturing Benchmarking Value engineering Net Current Assets: 344.5 Bn Net Fixed Assets: 97.0 Bn Gross Debt Equity Ratio: 0.30: 1 Order Book: 3,155.7 Bn Financial Capital Memberships of Industry Chambers: 15 Active suppliers and contractors: 97,123 MSME Suppliers: 2,615 CSR Partners: 45 CSR Spend: 1.36 Bn Social and Relationship Capital development programmes: 310 Employees covered under leadership • Revenue/employee: *19 Mn/employee Attrition Rate: 9.05% • Treatment capacity: 617 MLD • Irrigation capacity: 1.01 L ha Cement: 3,256,013 MT • Active collaborations and partnerships: 28 R&D Engineers and Scientists: 187 Patents filed: 15 R&D Spend (Cumulative for last 3 years): *4,498.4 Mn Intellectual Capital CD Manufacturing Locations: 18 Project Sites: 710 Manufactured Capital ⚫ Sand: 3,186,601 MT Material Consumed Energy used from Renewable Sources: 127,129 GJ sources: 9,520,137 GJ Energy Consumption from Non-Renewable Water Consumption: 9.4 Mn m³ Natural Capital I VALUE CREATION MODEL Integrated Annual Report 2021-22 OUTPUT METRICS 120 119 Governance: Spend on Environment: *294.8 Mn ⚫ Ferrous: 1,657,640 MT BUSINESS PROCESSES AND OFFERINGS Lifecycle costing • Solar Power capacity: 161 MWp Water & Sanitation Infra created • Transmission Lines: 1,860 circuit km Power Infra created • Bridges & Tunnels: 11.6 km • Mass Transit: 3.86 km Railways: 306 track km • • Roads: 474 lane km Building Infra created: 17 mn.sq.ft Mobility Infra created Crushed Sand: 1,330,182 MT Zinc: 130 MT GHG emission intensity: 893 tCO₂e/Bn Material reused/recycled Steel: 2,676 MT GHG emission: 889,063 tCO₂e Wastewater recycling efficiency: 48% Saving in energy: 149 Mn kWh Metro Rails and Railways Stadiums Commercial Spaces Hospitals Hydrocarbon Plant Oil & Gas Platform Construction Engineering Process improvement Innovation Lean operations • Pipelines laid: 32,609 km Average training hours per employee: 8.37 INPUT METRICS CSR Beneficiaries: 1.13 Mn Strategic Objectives: 6 environment Dynamic business 7 6 partners Stakeholder Statements Reports LARSEN & TOUBRO SO-I, SO-II, SO-III, SO-IV, SO-V Statutory Financial Discussion and Analysis Management Corporate Overview Page 127-131 Material issues have the potential to impact our value creation and achievement of our strategic objectives. Material issues: 4 Page 124-126 Our success and business sustainability depend on the support from our stakeholders and makes it imperative for us to understand their needs and interests. Stakeholder engagement: Financial Integrated Report Strategic Enablers: SE-1, SE-2, SE-3, SE-4, SE-5 Sound corporate governance practices Engaged and diversified workforce Accident free man hours: 1,153 Mn Maintaining environmental commitments GHG emission reduction Safe workplace ensuring Zero Harm Increased social value delivery Patents, copyrights and solutions Deliver sustainable products and investors Sustainable returns to shareholders value creation Sustainable stakeholder Key Performance Indicators Page 22-23 strategic objectives which help us in achieving our overall organisational goals. In line with our overall strategy, we prioritise the Strategic objectives: 6 Page 136-199 Our resources and relationships which are critical for us to create value and are classified into six capitals. We provide inputs under each capital to drive our business process. Robust risk framework management Capitals: 5 3 Page 25-29 8 Identifying risks and opportunities: I VALUE CREATION PROCESS Integrated Annual Report 2021-22 121 8 60 M 10 17 8 2 3 4 5 1 M 10 8 *⑰+ ①+ 3 Return on Net Worth: 12.23% Dividend: 30.91 Bn PBIT: 115 Bn Turnover: 1,010 Bn Complaints received: 76 Joint Projects: 35 Contribution to Exchequer: 54.4 Bn Awards: 56 The key objective is to identify key risks associated with the business and their impact on our strategy and value creation process. Appreciation certificates: 27 Our value creation process assesses our operating context, identifies the key business risks, evaluates the relationships that are critical to our value creation abilities and assesses the availability of our resources. 1 1. environment The environment in which we operate, including the economic environment, global pandemic, climate change impacts and infrastructure growth cycle, among others. 122 Assessing the external Page 34-112- 2 External environment: 1 Evaluate the impacts 4 Human engagement Social and Relationship 3 of material issues Stakeholder Our Capitals: Manufactured Identify key risks and opportunities 2 Intellectual Strategies 5 Formulate Natural Management Corporate Overview Natural 134 Capital Capital Capital Relationship Human Capital Capital Manufactured Capital Natural Social and Capital Human Capital Integrated Intellectual Capital Capital Social and Relationship Statutory NATURAL CAPITAL Discussion and Analysis Statements LARSEN & TOUBRO Reports Financial Report Discussion and Analysis Statutory Financial Integrated Management Corporate Overview POLICIES At L&T, we understand that we have only one Earth and we need to optimise resources and synchronise all activities that further the cause of sustainability and business interests. We have been consistently working towards conservation of natural resources, building efficient infrastructure, reducing emissions, and more importantly, urging stakeholders towards behavioural change through consultation and partnership. Our sustainability reporting started in 2008 and is a testimony of our commitment towards a better planet. Integrated Annual Report 2021-22 136 135 LARSEN & TOUBRO Statements Reports Report Financial Intellectual Reach 1.53 million beneficiaries in FY 2025-26 co Corporate social initiatives FY 2022 FY 2021 FY 2020 Our severity rate of accidents has reduced by 2.5% in FY 2021-22 compared to FY 2020-21. The number of fatalities were 25, remains same as last year STATUS Zero Harm TARGET Safety 444,506 425,747 447,482 18% of recycled + eco-friendly materials used in FY 2022 (MT) Recycled Material used 48 KEY HIGHLIGHTS OF FY 2021-22 FY 2022 38 TARGET TARGET Increase employee volunteering base to 5,000 STATUS 窗 CO Cu Capitals impacted: Financial Capital Capitals deployed: L&T has demonstrated that capital trade-offs can be turned into opportunities and endeavours to maintain the balance between growth and environment for years to come. Furthermore, we continue to invest in improving our capabilities, in terms of facilities, equipment, engineering & design and technology to be the leader in creating environment-friendly assets for our clients i.e., renewable energy (solar, hydel), non-fossil fuel energy (nuclear), water treatment and reuse, green buildings, and clean mobility systems. Over a period of years, the share of business from these projects/contracts has grown steadily to reach ~38% of our revenues in FY 2021-2022 while helping our clients reduce their carbon/water footprint. 11,000 pieces of equipment across more than 600 project sites and through lloT for our manufacturing facilities. We aim to enhance the usage of renewable energy (target to reach 50% of electricity consumption by 2026) and clean fuels (biogas, renewable diesel) in our energy consumption. We are devoting resources to make our campuses green by minimising waste, increasing the use of renewable energy, and recycling wastewater. We are also working towards reducing water consumption and increasing water recycling at project sites and manufacturing facilities. Despite the constraints faced in some contracts, where clients insist on the use of natural materials, we try to maximise the use of recycled and alternative materials. Manufactured Capital While growth creates positive impact for the business, it also puts pressure on usage of natural resources. To reduce this impact on the environment, we also invest in our operations to increase resource efficiency and minimize waste. Increasing the efficiency of plant and machinery is one of the key focus areas. This is being driven by digitally connecting more than The pursuit of growth requires judicious allocation of various resources; with financial resources being one of the most important ones. We have devoted significant capital resources (both short and long term) to support the growth of our businesses. Some of these investments are being made in new businesses which have a positive impact on the environment e.g., green hydrogen and battery storage. We are also investing in digital businesses that aim to address the demand-supply gap for skilled personnel (through EduTech, an industry-led, application-based online learning platform) and address the hurdles in growth faced by MSMEs (through L&T-SuFin, a B2B e-commerce platform for industrial products and services). These businesses will have a positive impact on the lives of thousands of people. L&T is a growing company and present in multiple business verticals such as EPC projects, high-tech manufacturing services and others. Managing growth while minimising the impact on the environment I MANAGING CAPITAL TRADE-OFFS Integrated Annual Report 2021-22 133 4,900 employees participated in the volunteering programmes and worked for various social causes in FY 2021-22 STATUS 1.13 million beneficiaries in FY 2021-22 Thus, the nature of investments, for some of our growth initiatives, obviates the trade-off between sustainability and growth by addressing both the issues. WATER NEUTRAL 1.11 CARBON NEUTRAL Energy saved Cumulative (kWh) 0.32 Mn 149 Mn units Energy Conservation KEY HIGHLIGHTS OF FY 2021-22 While overall GHG emissions will increase due to an increase in business activity, the intensity is expected to reduce by 25% by FY 2025-26, primarily due to various energy efficiency measures and greater use of renewables. 40% 38.2% 33.2% % of revenue Green Business 13.3 9.4 9.7 Mn kl Net water consumption (excl. conservation, recharge methods) 0.81 0.75 Mn tonne Fuel Saved (kl) CO₂e impact - Post abatement since FY 2007-08 35.31 Mn units 1,779 FY 2021 Recycled steel consumed cumulative (MT) since FY 2007-08 Materials Management 45,744 38.2% of total revenue (as compared to 33.2% in FY 2020-211) Green Business¹ (against 85 Mn in FY 2020-21) * 294.8 Mn Environmental measures Expenditure on Reduction in water consumption 3% Wastewater recycling efficiency 48% Water Management of total electricity mix 10% campuses and project sites (kWh) Renewable Energy used in our Renewable Energy FY 2026 FY 2022 FY 2021 (Base year) 15 14 ACTR 13 HAD SANITATION CLOHN WATE SSS 2 SDGS IMPACTED SE-3 SE-2 SE-1 SO-I SO-III SO-V STRATEGIES IMPACTED GREEN BUSINESS REVENUE *388.43 Bn SAPLINGS PLANTED 1,499,989 BY 2040 PAIR ARNS ON LAND 18 12 UOM Aspects Target Actual We have set major targets and are in process of formulating comprehensive action plans on the following aspects: in place to achieve our sustainability goals. The overall performance is monitored and reviewed by the Board on a quarterly basis. Our revised broad sustainability roadmap came into effect in 2022, with the target year of FY 2025-26. Currently, granular plans are being made. LAKSHYA 2026 TARGETS ON NATURAL CAPITAL Since 2016, we have been setting targets as a part of our sustainability programme and working to fulfill them. Our Company has a sustainability policy, systems and processes Our strategy is to adopt a low-carbon pathway for all our businesses and translate our sustainability initiatives into lasting outcomes. BY 2035 TRANSLATING SUSTAINABILITY INITIATIVES INTO LASTING OUTCOMES 137 Materials Management - Water, Waste and Hazardous - Brand Management - Climate Action - Sustainable Supply Chain - Business Ethics - Corporate Governance KEY MATERIAL ISSUES IMPACTED Integrated Annual Report 2021-22 σε SO-V FY 2022 Social & Relationship Capital Manufactured Capital Natural Capital Intellectual Capital Financial Capital 130 Refers to providing employment opportunities on merit without any discrimination based on gender, sexual orientation, disability, marital status, pregnancy & maternity, caste, socio-economic status, religion, faith, nationality, ethnicity, race, colour, age, religious or political views. Ensure equal opportunities with respect to recruitment, learning, development, promotion, employee benefits, separation and other aspects of employment relationship based solely upon merit, performance, potential and qualifications required for the job. Key aspects include emission reduction, efficiency in energy use, renewables, judicious use of water, recycling of water/ waste and use of eco-friendly materials, and green business. Key aspects include productivity, engineering skills, project execution capability, technology orientation, and leadership pipeline. Refers to how employers can attract and retain high-quality employees, develop their skill, motivate them to deliver their best and stay with the organization in the long run. Strategic implementation of talent management practices helps businesses improve performance, stay competitive, drive innovation, form productive teams, reduce turnover and create a strong employer branding. Management of environment, social and economic impacts across the supply chain. Suppliers are our partners in delivering timely performance in construction and manufacturing businesses. We encourage suppliers to partner our sustainable growth. With an active supplier base of 97,123 and 2500+ MSME suppliers, fostering responsible behaviour in the supply chain, in accordance with the highest standards of ethics and integrity, respect for the law, human and labour rights, and environmental stewardship is vital. Trained, educated and experienced segments of the workforce undertaking more complex mental and physical tasks. As we carry out large contracts related to construction and infrastructure, skilling manpower on a continuous basis is extremely important. Primary skill sets include bar-bending, formwork, electrical work, tiling, masonry, welding, carpentry and solar electrical work, etc. It is also required for hi-tech manufacturing for Defence Engineering and Heavy Engineering businesses. Description Diversity, Inclusion and Equal Opportunity Climate Action Management- Attraction, Retention and Development Talent Sustainable Supply Chain Skilled Manpower 888 Material Topics Human Capitals Associated Quality of Products and Project Delivery Data Security, Privacy and Cyber Security Description Material Topics LARSEN & TOUBRO Statutory Financial Reports Statements Integrated Report Discussion and Analysis Management Corporate Overview SO-V 888 SO-III, SO-V SO-IV, SO-V 898 SO-I, SO-III, SO-I, SO-V 898 Strategies Capital Brand Integrated Annual Report 2021-22 Human Capital Financial Capital Human Rights & Labour Conditions Employee & Workforce Engagement, Wellbeing, Health & Safety Business Ethics Corporate Governance Customer Experience and Satisfaction Description Material Topics DESCRIPTION OF MATERIAL ISSUES AND LINKAGE WITH STRATEGY AND CAPITALS LARSEN & TOUBRO Financial Statements Reports Report Discussion and Analysis Statutory Integrated Management Corporate Overview Recycled zinc consumed cumulative (MT) since FY 2007-08 Refers to the relationship, interactions and experiences between the business and the customer throughout the entire journey. L&T's presence is primarily in EPC and projects and customers include Central & State Govt., public and private sector organisations. Partnering with customers for on-time project completion with deeper 'customer connect' at multiple levels, regular monitoring of projects, innovation and state-of-the-art engineering techniques, high safety standards, transparency in energy, water and GHG emissions performance, etc. 129 Set of systematic rules, practices, and processes by which businesses are operated, regulated, or controlled are part of corporate governance. It involves balancing the interests of a company's stakeholders, such as shareholders, senior management executives, customers, suppliers, financiers, the Government, and the community. Corporate Governance reflects our core values around the principles and ideals based on independence, transparency, accountability, responsibility, compliance, ethics and trust. Refers to the physical, mental, and emotional health of employees and workforce, both within and outside the workplace. With 52,155 employees and 200,000 + workforce, it is important to continuously engage the workforce in an effective manner. Engagement includes regular communication, training & development, skilling, management-employee dialogues and technologies that enable the same. 888 Social & Relationship Capital Manufactured Capital SO-V man 888 SO-V SO-V SO-I, SO-II, SO-III, SO-IV, SO-III, SO-IV, SO-I, SO-II, 898 SO-IV, SO-V SO-I, SO-III, Strategies Capitals Associated Natural Capital Intellectual Capital Human rights include child labour, forced labour, prevention of sexual harassment, etc. Also involves the right to safe and healthy working conditions, as well as rest, leisure and reasonable working hours. Labour conditions cover areas such as working conditions, wages, discrimination, etc, including entitlement to wages and benefits, working hours, overtime arrangements and overtime compensation, and leave for illness, maternity, vacation and respecting collective bargaining agreement. Our scope is not just limited to Tier 1 vendors but also our subcontractors and workers. With a contract workforce of >200,000 contract, it is crucial to support, respect and protect human and labour rights and ensure that the Company is not complicit in any kind of violations. Implementation of policies and procedures regarding topics which include, but may not be limited to, issues such as insider trading, fraud, bribery, discrimination, professional conduct, etc. Management Water, Waste and Hazardous Materials Management Social - Revenue was not realised in FY 2022 for certain projects executed in the same FY - Ramping up of construction activity ** Increase in Energy Consumption Intensity & GHG Emission intensity in FY 2022 due to: * Results of various initiatives undertaken at campuses and project sites 9,693 FY 2022 FY 2021 FY 2020 by FY 2026 w.r.t FY 2021** Target: Reduce GHG emission intensity by 25% GHG Emission Intensity (tCO₂e/Bn Revenue) Target: Achieve 11% reduction in intensity by FY 2026 w.r.t FY 2021** (GJ/Bn Revenue) Energy Consumption Intensity 26,740 FY 2022 FY 2021 FY 2020 FY 2022 098 FY 2021 864 FY 2021 FY 2021 FY 2020 9,454 11,237 10,852 Target: Achieve 60% Wastewater recycling efficiency by FY 2026 % Wastewater Recycling Efficiency Target: Reduce water consumption Intensity by 30% by FY 2026 w.r.t to FY 2021 (kl/Bn Revenue) Water Consumption Intensity LARSEN & TOUBRO Integrated Statutory Financial Report Reports Statements Discussion and Analysis Management Corporate Overview 74,740 38,056 893 FY 2022 FY 2020 FY 2020 FY 2008 38.2% Intellectual Capital Financial Capital SO-V SO-I, SO-V SO-V SO-III, SO-IV, 888 SO-I, SO-II, SO-I, SO-III, SO-V SO-IV Strategies 19 Capitals Associated Effective means to create a positive impact in the areas where the Company operates. Our business spans vast areas of the country and we directly impact and get impacted by society. Communities are among our primary stakeholders. Our focus areas include Water & Sanitation, Health, Education and Skill Development. Water is one of the most significant inputs for construction activity. Processes, technologies, and systems to reduce the amount of water used, increase water-use efficiency and manage the wastewater appropriately needs to be deployed. Water conservation through recycling, reuse and efficiency improvement are major focus areas. Hazardous-waste management is the process of collecting, treating, and disposing waste material that can cause substantial harm to human health and safety or to the environment, if handled improperly. Refers to maintaining and bettering products, services, and brand perception with the objective to receive cost leverage, increase customer loyalty, and establish meaningful brand awareness. It also includes promoting approaches to increase the perceived value of a product line or brand over time. Our brand management includes corporate brands and individual brands of various ICs. High quality and timely delivery of the projects are critical for success and growth. Products are in high tech manufacturing areas of Heavy Engineering (process plants, reactors, boilers, steam generators). Construction (building, infrastructure, hydrocarbon, etc.) and related projects constitute >90% of revenue for our businesses. Refers to the state of being protected against the criminal or unauthorized use of electronic data, or the measures taken to achieve this. With the internet being pervasive, cyber security is becoming a major concern for companies. Includes mechanism for data security, privacy and cyber security. Covers people, process and technology. Key aspects include IT security policies, frameworks to manage Cyber Security risk, and controls across the organisation. Engagement and Impact Natural Capital Manufactured Capital Social & Relationship 888 388 310 We have cumulatively saved 149 million kWh since (GJ) Electricity saved* Target: 40% of total revenue by Green Business (Bn Revenue) | SUSTAINABILITY PERFORMANCE Integrated Annual Report 2021-22 FY 2020 346 31.4% FY 2026 9,564 9,431 132 131 Capital Capital Human 33.2% Reduced use of hazardous chemicals by SO-V Consumption of oil and lubricants is at par with FY 2020-21 and 17% reduction (vs FY 2019-20) 46,539 tCO2e Emission avoided Mr. S. N. Subrahmanyan, CEO & MD, L&T has joined the CEO Forum as one of the nine founding members of Climate Finance Leadership Initiative (CFLI) India formed by Bloomberg. w.r.t FY 2020-21 1. Previously called Green portfolio. Green Business revenue data of our Buildings & Factories and Smart World & Communication businesses has been revised for FY 2020-21 Our scope excludes transit houses, guest houses, holiday homes and company owned residential facilities for both FY 2021-22 and FY 2020-21 138 32% (vs FY 2020-21) and 54% (vs FY 2019-20) MATERIAL MANAGEMENT The materials consumed primarily during our business activities are steel, cement and sand. We make sustained efforts to recycle our steel and zinc at our production facilities. But the scope of using recycled material is limited due to customer specifications. At our construction sites, we make judicious use of fly ash and granular blast furnace slag to blend cement. Material consumption (partially reported, MT) Material Ferrous Non-ferrous Consumption Oils and lubricants 7,692 Hazardous chemicals 58,531 Our campuses and project sites have obtained necessary approvals with respect to the various statutes, rules and regulations from authorities before commencing their operations. There is a 'system compliance report', which is reviewed at all our units and regional offices on a quarterly basis. During the year, there were no incidents of non- compliance, and no fines were imposed on our campuses within the reporting period. Cement and sand 2,713 6,442,614 1,657,640 COMPLIANCE Overview Integrated Statutory Report Reports • Electronic waste (e-waste) is disposed of through authorised vendors as per the statutory requirements. • Biomedical waste generated at dispensaries and health centres is disposed of as per statutory requirements, and responsible disposal is ensured. • Non-hazardous wastes are either reused, recycled or scientifically managed. • We do not import, export, transport or treat any hazardous waste covered under the Basel Convention. 5. Water withdrawal data revised for FY 2020-21 and FY 2019-20, data on dewatering and hydrostatic water consumption removed from FY 2019-20 and data corrected for FY 2020-21. (Note: 1 kl = 1 m³) 6. Data has been revised for FY 2020-21 9.41 2,242,784 (tonnes) 40,570 Recycled steel - cumulative since FY 2008 (tonnes) Corporate Management 43,068 Discussion and Analysis Financial Statements FY 2020 2,703,141 FY 2022 143 9,171,294 1,779 LARSEN & TOUBRO Integrated Annual Report 2021-22 Percentage of crushed sand used in place of sand Percentage of fly ash and GGBS used in place of cement FY 2020 FY 2021 FY 2022 FY 2020 FY 2021 FY 2022 וד חיי Percentage of recycled steel used in place of ferrous 7,841,112 6,228,811 FY 2022 FY 2021 Fly ash - cumulative since FY 2008 2,472,007 • Hazardous waste is transported as per the statutory requirements. 45,744 FY 2020 1,494 Recycled zinc- cumulative since FY 2008 (tonnes) FY 2021 1,649 FY 2022 Crushed sand - cumulative since FY 2008 (tonnes) FY 2020 FY 2021 FY 2022 FY 2020 FY 2021 • Hazardous waste - such as used oil, oil-soaked cotton waste, used chemical / paint / oil containers, batteries, paint residues and ETP sludge - is disposed of through Government-approved recyclers / re-refiners / re-processors. 48,995 tonnes w.r.t FY 2020-21 0.22 3. Intensity data for FY 2020-21 and FY 2019-20 has been revised. Total revenue has been considered for Intensity calculation; earlier, customer revenue was considered. 4. Excludes data from Minerals & Metals, Transportation Infrastructure, Buildings & Factories, Smart World & Communication, Heavy Civil Infrastructure, Realty businesses and our offices 0.65 141 142 Integrated Annual Report 2021-22 WATER We are continuously stepping up our water conservation initiatives as part of our overall commitment to sustainability. The construction business is a water-intensive sector, but we have been successful in reducing water consumption significantly. We are devoting resources to making our campuses green and one of the important components is recycling and reuse of wastewater. We are also working towards reducing water consumption and increasing water recycling at project sites and manufacturing facilities. Our groundwater withdrawal has been reduced by 11% since FY 2019-20. Water recycled is used for gardening and flushing. We undertake various measures to construct rainwater harvesting structures both at our premises and in areas where our projects are functional Water Intensity5 (kl/Bn Revenue) Water Withdrawal (kl/year)5 Source River / Lake Municipal Rainwater 0.93 2.62 9.46 1.01 275 We monitor air emissions at our campuses and project sites and ensure that our emissions stay within permissible limits. Our principal sources of air emission are process stacks at a few campuses and diesel generator sets. We have been consistently striving to reduce emissions from different sources. The table below shows our performance over the last three years. FY 2021 SOX, NOX, PM & ODS emissions (in tonnes)4 SOX NOX PM FY 2020 ODS 1.56 17.78 12.45 8.38 FY 2022 0.11 8.31 FY 2020 Our waste management measures: FY 2021 2,174,162 FY 2022 9,454 FY 2020 10.32 9.68 FY 2021 FY 2022 WASTE & CIRCULAR ECONOMY During the process of disposal, all relevant norms and procedures applicable are appropriately observed and documented for further reference, should there be an emergency. For example, we handle oil spills with care and we continually report on waste and spills as mandated by ISO 14001 and OHSAS 18001. Periodic internal and external assessments are conducted to ensure compliance with applicable standards and regulations. 2,464 tonnes Hazardous wasteб 10.4% w.r.t FY 2020-21 Percentage of recycled zinc used in place of zinc Non-Hazardous waste 6.9% FY 2021 FY 2020 11,237 10,852 1,637,695 2,001,310 770,622 980,433 1,369,437 56,672 56,575 82,364 FY 2022 Groundwater 3,087,682 4,087,726 3,251,265 Total 4,722,684 10,811,822 3,235,055 2,897,996 9,997,484 9,602,372 Total Water Consumption (Mn kl/year) Others FY 2022 FY 2021 FY 2020 331.6 kg/annum plastic waste recycled 108 staff and 194 workmen participated and trained on plastic management 665 kgCO₂e/annum emissions avoided We continue to explore opportunities both internally and externally in different aspects of Natural Capital. As stated in our Group Vision, we will pursue eco-friendly growth, thereby increasing our green portfolio y-o-y. We will continue to focus on promoting sustainability within the organisation and innovation will be a big enabler towards this objective. We will also continue to disclose our sustainability performance through international platforms such as Dow Jones Sustainability Indices (DJSI) and Carbon Disclosure Project (CDP) and we are committed to working on Task Force on Climate-Related Financial Disclosures (TCFD) disclosures as well. 146 Corporate Overview Management Discussion and Analysis Integrated Statutory Financial Report Reports Statements LARSEN & TOUBRO Promoting sustainable construction Sustainable construction means using renewable and recyclable materials when building new structures, as well as reducing energy consumption and waste. The primary goal of sustainable construction is to reduce the industry's impact on the environment. A project of our Heavy Civil Infrastructure business, the Mumbai-Ahmedabad High-Speed Rail Project's C4 Package, has been reducing its CO2 impact by using supplementary cementitious materials in concrete, and reducing its water usage by replacing conventional water- curing with a curing compound. IMPACT Emissions avoided using Supplementary Cement Materials: 119,946 tCO₂ IMPACT - Waste collection and segregation are conducted daily to minimise waste generated at the site and keep workplaces clean and hazard-free. Our WET business has tied up with a third-party manufacturer and supplier - PGS Enterprises India Ltd. to send its plastic waste to be recycled into plastic granules, polyfuel, etc Plastic Waste Management 200,000 100,000 0 Bangalore Cluster 220,422 Bhubaneswar Cluster 200,120 Water savings by using Bhopal Cluster Kolkata Cluster 124,090 Jaipur Cluster 123,239 634,328 Others CASE STUDIES 197,790 300,000 ✓ Curing Compound: 2020.8 kl Savings through reduction in raw material usage: *1.6 Bn • Rainwater harvesting facility • Organic waste composter treats kitchen waste, which is reused for landscaping • E-waste segregation facility AM NAIK TOWER A M Naik Tower, Powai, Mumbai 147 Integrated Annual Report 2021-22 MANUFACTURED CAPITAL Our business segments across geographies, and our tech-enabled manufacturing capabilities give us a big competitive advantage globally. We implement global best practices at our manufacturing facilities and locations and invest in innovation to retain and grow our market share. Notwithstanding major challenges in the external environment, we continued to make encouraging progress in all our business segments. With prestigious order wins, our Order Book was at record levels. Our revenue also picked up momentum during the year. 148 799999999 כר נכ Sewage treatment plant generates water for flushing, irrigation and HVAC make-up glazing insulated roof and high-efficiency HVAC equipment and lifts with regen drive buildings due to solar roof-top PV cells, high-performance • • Smart campus with high-end digitisation: monitor and control of lighting, HVAC systems, meeting-room management • IAQ sensors to monitor and control of CO2 levels for employee wellness • Anti-COVID-19 features: UVGI (Ultraviolet Germicidal Irradiation) in central AC system for health and safety of occupants • Low water-flow fixtures in toilets IMPACT 700 tCO₂e/annum emissions avoided Water conservation through rainwater tanks: 60 Kl/annum ✓ Superplasticisers: 44,479.2 kl Wastewater recycled through Sewage Treatment Plant (STP): 96,000 Kl/annum LEED Platinum Certification for A M Naik Tower, Powai, Mumbai The US Green Building Council has awarded L&T's corporate office, A M Naik Tower, the prestigious LEED Platinum certification under LEED 2009 Core and Shell development. The certification recognises the iconic structure as a showcase of sustainability, demonstrating L&T's leadership in transforming the building industry. A M Naik Tower scored high on multiple parameters - including overall energy savings, water efficiency, design innovation and indoor environmental quality. The primary features are as follows: • Concrete-filled tube technology in steel structure • Significant energy savings over regular commercial Waste reduced by 135 tonnes/annum FY 2021 400,000 600,000 • Railway Network • Flue Gas Desulphuriser (FGD) • Process equipment for biodiesel / clean fuels • Green buildings / facilities • Surface miners / sand plants, etc. (except for coal) • Mass Rapid Transit System (Metro & High-speed Rail) • Solid waste Management - automated communication software for effective solid waste management in Smart Cities • Natural-gas extraction facilities Our Green Buildings and their Rating Project Renewed in FY 2022 Leadership Development • Water & effluent treatment • Non-fossil power generation (Nuclear) • Renewables (Solar / Hydro) Our Green business includes: ||| FY 2020 FY 2022 FY 2022 ||| LIFE CYCLE ASSESSMENT (LCA) OF DIAMOND GREEN DIESEL REACTOR LCA is a method for assessing a product's environmental impact considering its various life cycle stages. We undertook a cradle- to-gate LCA of a critical reactor manufactured by our Heavy Engineering business. These reactors process biomass (recycled animal fats, used cooking oil and inedible corn oil) to make green diesel and reduce greenhouse gas emissions by up to 80% compared with conventional diesel fuel. LCA results of the manufacturing process of the reactor show that the maximum impacts are due to the steel and energy consumption from the grid associated with the manufacturing process. Other than these, there are negligible impacts during the manufacturing process. Note: Our product portfolio constitutes less than 10% of the standalone revenue of the Company IGBC Platinum 144 Management Discussion and Analysis Integrated Report Statutory Financial Reports Statements LARSEN & TOUBRO EXPANDING OUR GREEN BUSINESS We are steadily developing our portfolio of sustainable engineering and design solutions. Our green portfolio comprises projects embedded with advanced technology, solutions centred around renewables, water and effluent treatment plants, efficient power distribution, mass transit systems and green buildings. Our green business offers infrastructure that has a low impact on the environment and focuses on public wellbeing. Our green business contributed *388.43 Bn (38.2%) to the revenue of the Company. Corporate Overview 500,000 Academy, Lonavala completed in Location: Talegaon Location: Coimbatore Location: Bidkin Location: Erode 3 patches of 400 square metres 1 acre 8 acres 800 square metres, 2,401 saplings 3,600 saplings 12,500 saplings with 100% survival rate 49,300 saplings with 95% survival rate PLANTATION L&T has planted 1,499,989 saplings in FY 2021-22, with over 99% having been planted by our Water & Effluent Treatment (WET) business. Over the years (2008-2022) L&T has planted over 4.8 Mn. trees. 800,000 700,000 The urban forest is a unique methodology proven to work worldwide, irrespective of soil and climatic conditions. Our Defence Engineering business has been successfully undertaking urban forest development initiatives for the past few years. Here is a glimpse of the impact. BIODIVERSITY Integrated Annual Report 2021-22 145 A M Naik Tower, Powai, Mumbai LEED Platinum FY 2022 LTI, Mahape Technology Centre 4, Chennai L&T Innovation Project Future Projects Certification in process Chennai L&T Innovation Tower - Phase II, Chennai L&T IT Park, Coimbatore 14 of our campuses have been certified at different periods and we are working on their recertification processes. Tower Phase I, FY 2021 Cluster wise plantation 245 140 139 250MW Solar power plant at Rewa. Madhya Pradesh Electricity from Renewable energy sources has increased from 97,044 GJ in FY 2020-21 to 127,129 GJ in FY 2021-22 (an increase of 31%) and currently it is 10% of electricity consumption. Total electricity consumption has increased from 984,692 GJ in FY 2020-21 to 1,281,464 GJ in FY 2021-22. Solar electricity sourced in campuses: 5 Wind power sourced in campuses: 5 campuses: 8 Renewable energy generated in We have utilised 23.67 Mn units from wind powered turbines and 11.63 Mn units of solar energy which constitutes 6.7% and 3.3% respectively of our total grid electricity mix. 425,406 RENEWABLE ENERGY We are progressively ramping up the share of renewable energy in our total energy consumption. Across our businesses, all departments have Bureau of Energy Efficiency (BEE) certified energy managers and auditors. The primary objective of this team is to enable us to manage and optimise energy use at our manufacturing facilities. Energy audits on ISO 50001 are also conducted at regular intervals. LARSEN & TOUBRO ENERGY Statutory Financial Reports Statements Integrated Report Management Discussion and Analysis Corporate Overview FY 2020 FY 2021 In FY 2021-22, our total energy consumption was 9,647,266 GJ, comprising direct energy consumption of 8,365,802 GJ and indirect energy consumption of 1,281,464 GJ. Direct energy intensity decreased by 0.18% with respect to FY 2020-21, while indirect energy intensity increased by 12.6% with respect to FY 2020-21. The increase in overall indirect energy intensity is due to the change in scope of work of Heavy Civil Infrastructure business wherein their direct energy has decreased and indirect energy has increased. Cumulative energy conserved (GJ) Integrated Annual Report 2021-22 FY 2020 463,618 74,740 Total 4,183 Others 2,543 Change in personal behaviour and auto shutting of lights when not in use 28,039 Change to CFL and LED lamps 21,888 Conversion and retrofitting of equipment 4,179 13,908 (GJ/year) Optimisation and operational control efficiency Process re-design Energy conservation interventions FY 2020-21. Since FY 2007-08, we have cumulatively saved energy equivalent to 149 Mn units, thereby avoiding 46,539 tCO2e in FY 2021-22 through energy conservation interventions and renewable energy. At L&T, our core objective is to achieve a significant increase in energy conservation measures every year. The energy conservation measures have increased by 96% compared to ENERGY CONSERVATION 538,358 1,176 FY 2022 Indirect energy intensity² Statements Statutory Financial Reports Integrated Report Management Discussion and Analysis Corporate Overview 8,405 FY 2022 FY 2021 8,420 EMISSIONS (GJ/Bn Revenue) 8,254 1,287 1,143 2. Intensity data for FY 2020-21 and FY 2019-20 has been revised. Total revenue has been considered for Intensity calculation; earlier, customer revenue was considered. FY 2022 FY 2021 FY 2020 400kV Kamudhi-Ottapidaram Transmission Line, Tamil Nadu (GJ/Bn Revenue) Direct energy intensity² GHG FY 2020 We are committed to become Carbon Neutral by 2040 from FY 2020-21 baseline, contributing meaningfully to combating climate change. Our focus is on realigning our processes and systems to reduce our GHG emissions. LARSEN & TOUBRO 255 (tCO2e/Bn Revenue) Indirect GHG emission intensity-Scope 23 4,976,909 tCO₂e 274,028 tCO₂e 618 FY 2022 FY 2021 FY 2020 AIR EMISSIONS 605 SCOPE-1: Consumption of fuels such as petrol, high speed diesel, furnace oil, natural gas, LPG, CNG and acetylene. 619 SCOPE-3: SCOPE-2: Purchased goods and services, waste generated in operations (solid waste), employee commute and business travel 615,035 tCO₂e Direct GHG emission intensity-Scope 13 (tCO2e/Bn Revenue) Utilisation of grid electricity supplied by state electricity supply boards. Statements LARSEN & TOUBRO Design and Engineering, Procurement and Construction (EPC) of projects ranging from airports, hospitals, stadiums, retail spaces, educational institutions, IT parks, office buildings, data centres, high-rise structures, mass housing complexes, cement plants, industrial warehouses, test tracks and other factory structures. Integrated Statutory Financial Discussion and Analysis Report Reports Management Corporate Overview TOWER BAS == 49-4-4-4-4=1+3=1EE OFFERINGS • End-to-End EPC capability in multispecialty hospitals 150 Prestige Song of the South at Begur, Bangalore 讀 • Forerunner in offering modular and mechanised processes for advanced construction technologies such as Prefabricated Prefinished Volumetric Construction, Offsite Manufacturing, Structural Steel Construction, and 3D printing to fast-track projects. Capability to offer integrated design and build solutions for light manufacturing plants and factories. including specialised medical systems and equipment. Plug-and-play capability to design-and-build world-class IT infrastructure and data centres. . . and international airports apart from many other landmark structures have been built by L&T. Track record of building tall, large, complex, and iconic structures across India and overseas. The Statue of Unity -the world's tallest statue, Shri Narendra Modi Cricket Stadium, Motera - the world's largest cricket stadium, the Ahmad bin Ali Stadium in Al Rayyan, Qatar, 11 national HEEL EI EL EL EL EL EFELEL DRDE-1========= Elcl=t=1=1=1=3=1=1=1=1=1== TRANSPORTATION INFRASTRUCTURE First-of-its-kind training centre • • End-to-End design and engineering capabilities for all offerings including feasibility, detailed project report, seismic qualification, geotech engineering, blast resistance, etc. Expertise to build underground structures with various tunnelling technologies e.g., New Austrian Tunneling Method (NATM), Tunnel Boring Machine (TBM) and erecting super structures using innovative methods e.g., incremental launching and full span 'U' girders. covering civil, structural, mechanical, and electrical works with international safety and quality standards. Capability to execute complex infrastructure projects • • Setting us apart HEAVY CIVIL INFRASTRUCTURE Integrated Annual Report 2021-22 151 Setting us apart Solutions for all kinds of Transportation Infrastructure - roads, bridges, elevated corridors, runways, high speed rail, railway lines, dedicated freight corridors, mass transit systems (Metro/Light Rail Transit/ Monorail). A section of the Mauritius Metro Project the country. for rail construction in • Turnkey solutions from 'concept-to-commissioning' across the entire spectrum of urban infrastructure, with in-house design expertise using advanced systems like Building Information Modelling (BIM) 4D, 5D and BIM 360 field and project management expertise. • • Well-equipped engineering centres which offer end-to-end design capabilities including consultancy and construction engineering for all our offerings. • Pioneers in introducing mechanised construction techniques for faster execution with quality and safety. Expertise to design and build a full spectrum of highways, bridges and elevated corridors including complex interchanges, both in India and abroad. Transit Projects. Engineering and construction company in India offering Design-to-Build or EPC solutions with single point responsibility for Integrated Railway and Mass OFFERINGS • - Climate Action Setting us apart GREEN BUSINESS REVENUE *388.43 Bn FACTORY OUTPUT 321,697 MT MANUFACTURING LOCATIONS 18 TOTAL PROJECT SITES 710 KEY HIGHLIGHTS OF FY 2021-22 LARSEN & TOUBRO STRATEGIES IMPACTED LOGISTIC Statements Reports Report Discussion and Analysis Statutory Financial Integrated Management Corporate Overview 999 For the business to progress, it is imperative to continue the innovation journey to stay relevant. L&T's innovation efforts are backed by advanced technology, helping it deliver projects which set new benchmarks within their space. With a continuous focus on innovation, design and development, the future is taking shape in L&T's Technology and Innovation centres across India. These breakthroughs are deployed across all businesses of L&T, ensuring added value to our customers. 04 SO-I SO-III SO-V SE-1 SE-2 SE-3 BUILDINGS & FACTORIES Integrated Annual Report 2021-22 149 - Social Engagement and Impact - Water, Waste & Hazardous Materials Management - Brand Management - Quality of Products and Project Delivery - Data Security, Privacy, and Cyber Security - Talent Management-Attraction, Retention and Development - Sustainable Supply Chain - Skilled Manpower - Human Rights and Labour Conditions - Business Ethics - Corporate Governance - Customer Experience and Satisfaction KEY MATERIAL ISSUES IMPACTED TACT 13 12 • Owner and operator of one of the largest fleets of critical machinery e.g. TBM, heavy lift cranes, shotcrete machines, etc. 1 SDGS IMPACTED SE-4 SE-5 • MM • Global supply chain management cell to undertake competitive sourcing of materials. The Mumbai Trans Harbour Link HEAVY ENGINEERING Setting us apart • Providing engineered-to-order equipment, solutions and critical piping to various industries Technology-driven, quick turnaround solutions for Process Plants offered by Modification, Revamp and Upgrade (MRU) business • World-class manufacturing Integrated Annual Report 2021-22 complex with cutting adopting Industry 4.0 for Engineered-To-Order (ETO) critical equipment. DEFENCE ENGINEERING Setting us apart • Proven command and competence for more than three decades • Offers specialised turnkey defence construction solutions . edge technology • Seamless integration of solutions through our IT business Leveraging the digitalisation trends achieving higher degree of welding automation, enhancing loT application through deployment of smart devices on various machinery to increase consistency of output, and reduction of cycle times in a sustained manner. 155 Ammonia-Urea Plant for HURL at Sindri, India Facilities at Hazira (India's west coast), Kattupalli (India's east coast) and Sohar (Oman), and an integrated manufacturing facility at Jubail in Saudi Arabia POWER Setting us apart • In-house engineering, state-of-the-art integrated manufacturing facilities. • •Technology collaborations with global leaders like 400 MW Bibiyana-III Combined Cycle Power Plant, Bangladesh Mitsubishi Power- Japan, Sargent & Lundy - USA, Howden Competency in executing large and complex projects within and outside India. Major player in new emission-control technologies such as Flue Gas Desulphurisation (FGD). OFFERINGS Full spectrum engineering services (including FEED), EPCIC, turnkey construction, fabrication and asset management services for oil and gas extraction and processing, petroleum refining, chemicals and petrochemicals, fertilisers projects; cross- country pipeline and terminals (including for LNG regasification) as well as offshore wind farm projects OFFERINGS Turnkey solutions for coal-based and gas-based power plants, ultra-supercritical and supercritical boilers, ultra-supercritical and supercritical turbines, Generators, power block auxiliaries, heat recovery steam generators, other critical system, Enviro solutions - FGD, electrostatic precipitators (ESP) and selective catalytic reduction (SCR) total plant design and engineering, construction UK, Chiyoda Corp - Japan, John Cockerill - Belgium. OFFERINGS Hydrocracker and Clean Fuel Reactors, Renewable Diesel Reactors, Fluid Catalytic Cracking (FCC) Reactor and Regenerator Package, Coke Drums, Ethylene and Propylene Oxide Reactors, VAM Reactors, Molten Salt Bath Reactors, Ammonia and Methanol Converters, Key Gasification Equipment, Urea Stripper and Reactor, Carbamate Condenser, Waste Heat Boiler Package, HP Heat Exchanger, Ti and Exotic Material Heat Exchangers, Nuclear Power Equipment - Steam Generators, End Shields, Spent Fuel Canisters and Casks, Modification, Revamp and Upgrade (MRU) and Critical Piping Spools OFFERINGS Implemented 27 Safe and Smart Cities with Integrated Command Control Centre (ICCCS), 2mn+ Smart Utility end points by leveraging its expertise in IOT platforms, OT Data Analytics & AI/ML. • Multiple Data Centres & Cyber Security solutions, Mega Communications Projects connecting 30,000+ Gram Panchayats, 5 Metro Telecommunication projects and next gen connectivity for Indian Armed forces. • L&T's Smart World & Communication business has developed it's own Platforms - Fusion-IOT, NOC and SOC to provide customised and scalable solutions to clients and have also developed expertise on several industry platforms. • Created a unique ecosystem of technology partners across the world to be able to stitch problem-specific solutions. OFFERINGS Safe & Smart Cities across India, Fusion: Indigenous Command Control Centre for City Operations, End to End IOT Implementation and Analytics, Smart Utilities: Advanced Metering Solutions for Utilities & Pioneering Pre Paid Electricity, Defence Communication, Data Center and Network Operations Services, Cyber Security for Operational Assets & Security Operation Centre, Telecom Services including 5G, Network Connectivity, Tactical Communication Systems, SatCom Ground • Focussed on solutions to make world smart and safe, providing secured robust state of the art digital infrastructure with latest of communication technology, connecting millions of operational assets. Stations, Radio Communication & Software Defined Radios, High Capacity Radio Relays & Helo Deck Communication Systems GVMC City Operations Center 157 Integrated Annual Report 2021-22 0 INTELLECTUAL CAPITAL Elixir Reserve, Mumbai Setting us apart COMMUNICATION SMART WORLD & Tactical and Assault Bridging Systems, Akash Airforce Launchers, Medical Oxygen Plants Infantry Combat Vehicle, Productive Welding Processes, Army Bridging Systems, BrahMos Systems (Naval), Naval Platforms Propylene Oxide (PO) Reactors 156 Corporate Overview Management Integrated Statutory Discussion and Analysis Report Reports Financial Statements LARSEN & TOUBRO REALTY Setting us apart • Total portfolio of ~ 60 mn sq. ft. across residential, commercial, and retail segments in Mumbai, Bengaluru, NCR, and Chennai. • India's first Transit Oriented Development (TOD), Seawoods Grand Central, offering a unique combination of commercial and retail business. OFFERINGS Real estate development offering mixed-use integrated developments, residential complexes, commercial and retail spaces weather waterfront Modular Fabrication Strategically located state-of-the-art, all- Project management resources with experience in executing large and complex projects. installation capabilities. a capacity of more than 1.5 lakh tonnes of tower components per annum. • One of the world's most renowned Tower Testing and Research stations. • In-house Battery Energy Storage System containerisation facility to offer large-scale renewable integration solutions. Expertise in executing solar projects, micro-grid electrification projects. • India's first 1200 kV and 765 kV Gas Insulated Substation. . Digitally driven, green tower manufacturing units with Strong reputation and significant market share in the India subcontinent. OFFERINGS Design, manufacture, supply, installation and commissioning of transmission lines, substations, underground cable networks, distribution networks, power quality improvement projects, infrastructure electrification, backbone for fibre optic infrastructure, solar PV plants including floating solar, battery energy storage systems, mini/micro grid projects and related digital solutions 153 Integrated Annual Report 2021-22 WATER & EFFLUENT TREATMENT Setting us apart Toshka 2 - Wadi Halfa 220 kV double circuit overhead transmission line, Egypt Providing integrated solutions with in-house design, global sourcing and digitally enabled delivery excellence. • • 152 OFFERINGS Metros, Nuclear plants, Hydel projects, Marine structures, Tunnels, Defence infrastructure and High- Speed Rail projects Corporate Overview Management Integrated Statutory Financial LARSEN & TOUBRO Discussion and Analysis Report Reports Statements POWER TRANSMISSION & DISTRIBUTION Setting us apart • Temporary Works Competency Centre (TWCC) to manage enabling structures assuring effective utilization and asset management. Array of process technologies for water treatment covering conventional treatment and advanced treatment like ozonisation and granular activated carbon. • 154 Corporate Overview Management Discussion and Analysis Integrated Statutory Financial Report Reports Statements LARSEN & TOUBRO Laminar Cooling System for Rourkela Steel Plant HYDROCARBON • Industry leading HSE performance • Integrated design-to-build capabilities • In-house engineering centres offering 'Fit to Purpose' engineering solutions with a focus on technology. • Onshore construction and offshore • • Setting us apart 318 MLD Coronation Pillar Sewage Treatment Plant, Delhi Equipment for Mining, Cement, Material Handling . • Developing and adopting sustainable and innovative execution methods e.g., horizontal directional drilling and micro-tunnelling for faster project execution. One-stop solution provider for digital and innovative technology driven solutions in water and wastewater management e.g., hydraulic modelling, leakage management, GIS asset mapping, billing and master data management etc. OFFERINGS Urban and Rural Water Supply, Industrial Water Supply, Water Treatment Plants, Sewage Treatment Plants, Effluent Treatment Plants, Wastewater Collection Network, Desalination, Micro and Lift Irrigation Projects, Water Management, Smart Water Infrastructure, Plant Water Systems 24x7 Pressurised Water Supply, Non-Revenue Water (NRW)/ Unaccounted For Water (UFW) MINERALS & METALS Setting us apart • Provider of one-stop solutions in ferrous and non- ferrous sectors • Dominant player in the country in EPC of metallurgical projects OFFERINGS Leading EPC solutions provider in the fields of minerals, metals and finishing for large industrial, steel, aluminium, copper, zinc and gold complexes, associated facilities, and the mining industry. The business offers integrated solutions for a wide range of systems and equipment for cement, mining and steel sectors, powered by in-house design, engineering, manufacturing, construction, and commissioning capabilities. Key offerings: • Mineral Beneficiation • Iron and Steel Making • Aluminium, Zinc, Copper, Gold Smelters and Refiners Speciality Conveyors • Proven track record of offering total solutions spanning the entire spectrum of the value chain - right from tapping water through intake structures to tertiary treatment and safe disposal of the treated effluent through marine pipe. . 158 WATER & EFFLUENT TREATMENT Discussion and Analysis Integrated Report Statutory Financial Reports Statements LARSEN & TOUBRO POWER • Metal Deck Profile Selection: • Application to help select the optimal metal deck profile Management • Digital Radiographs Inspection • Price benchmarking: Smarter supply chain system using ML based parametric price discovery model for commodity items like cables, cable trays, valves, and pipes. HEAVY ENGINEERING • One-man multiple stations: One man operating multiple smart welding stations has been successfully implemented at AMN Heavy Engineering Complex, leveraging wireless technology as part of the Autonomous Welding Project. • PDM (Predictive maintenance) application module: Implemented for first time by the business on TITAN DHD (deep hole drilling) machine, this application delivers capabilities like early failure reduction, reduced spares consumption and improved OEE (Over Equipment Efficiency). • Additive manufacturing: The business has leveraged 3D printing technology to make prototypes for development projects, thereby significantly reducing development cost 225 MW Sikalbaha Combined Cycle Power Plant, Bangladesh Heavy Engineering's digital initiatives 165 Integrated Annual Report 2021-22 using Al: Auto Al-enabled radiograph interpretation in the weld joints. Corporate Overview 164 3-D model of Farabi Petrochemicals at Yanbu, Saudi Arabia • Factory IOT: Monitoring of OEE (overall equipment effectiveness) at transmission line tower plants through IoT data. • Fibertrack: Application for tracking and monitoring of patrollers and Operation & Maintenance of around 16,300 km of fibre network. • Al For contracts and engineering: Contract comprehension includes key clause identification, risk quantification, document, and datasheet extraction. • SPRINT: Geospatial solution that helps project teams to visualize and track pipe laying activity, including theft identification and material reconciliation. MINERALS & METALS • Wrench: Centralized platform across EPC with automated live S-Curves and progress dashboards that also enables document management, and communication control across all stakeholders. • IMPACT: Comprehensive item-wise material and progress management tool applicable across structural fabrication, piping and equipment. Material management is controlled through GPS enabled QR codes at different stages of fabrication, storage and erection. • eALPS: Centralised web-based portal for quality vendor inspection call management system for vendors to raise inspection call requests along with its documents. Super Procure: Application to raise logistics' requests from project sites. The system enables float bids among 67 registered transporters and helps to prepare comparison statements online while expediting release orders to L1 vendors. 400 kV Ibri Izki Transmission Line, Oman 48 MLD Water Treatment Plant, Gadag, Karanataka 163 Integrated Annual Report 2021-22 HYDROCARBON • Drishti (Enterprise Level KMS): Enterprise level knowledge management system to provide situational guidance and capture, store, and extract the information required for efficient knowledge transfer across the organisation. • mCode (Unified Material codification): Unified material codification system for parametric comparisons, benchmarking, data mining and analytics of various material categories to drive procurement cost optimisation. • EPSILON (Integrated Project Management System): Decision support system for effective project management and control, applying advanced analytics at the enterprise level. • Virtual Reality Immersive Walkthrough: Virtual reality immersive walkthrough for engineering 3D models offering efficient constructability and maintainability review for Operation & Management teams. エ Gas Production Modules fabricated at LTHE's Oman Facility for Hasbah II DEFENCE ENGINEERING • IoT of Welding Robots with Digital Report book: Planned / unplanned downtime and calculating OEE (Over Equipment Efficiency) with the help of an IoT data logger for descriptive analysis. • Monitoring Execution: Work Allocation System enabling QC engineer to track First Person Responsible (FPR, viz fitter, welder and electrician) while undertaking inspection and develop person-wise First Time Right (FTR) data. • GST Auto-reconciliation: RPA BOT along with ERP customisation provides automated GST reconciliation capability to avoid IDT losses. • SmartPM Solution: End-to-end Smart Meter Project Management Solution with mobile App & QR Code Scanner for Consumer Indexing, Smart Meter installation. 1,000+ cases registered via emergency call box; emergency calls response time- 10 seconds and resolution time - 10 minutes for incidents recorded (accidents, police and medical emergencies) 187,410 citizens using free monthly Wi-Fi facility Case study Ease of living of citizens through Pune Smart Elements project Brief description • Flagship technology infrastructure and a pan-city project consisting of Integrated Command and Control Centre (ICCC) along with 732 smart elements across Pune. • Enables the city administration and its stakeholders to make informed decisions with real-time data and deliver effective governance. • Institutionalise data driven decision making across levels of city functionaries for regular operations and during crises. Enhancing collaboration across multiple departments within and outside urban local and government bodies. • ICCC provide insights using data for civic officials across urban functions through the deployment of sensors across the city. • Smart elements installed across Pune: City Wi-Fi, Emergency Call Box, Public Address System, Environmental sensors, Flood Sensors, COVID Management through ICCC Impact • Total Data consumed: 19.81 TB per month Critical Zones with average AQI > 200 observed and reported with Environment Monitoring Sensors deployed in 50 locations • 100+ Incidents recorded using flood sensors deployed at 50 locations • PA system - audio message related to COVID-19 broadcasted live every 30 minutes using PA systems between 7 am to 10 pm daily Moradabad Command Control Centre 167 Integrated Annual Report 2021-22 899 HUMAN CAPITAL Our human assets play a key role in seamless driving of operations in today's ever-evolving business environment. They deliver projects and business solutions effectively on time, every time. At L&T, we have always strived to create an enabling work environment that encourages continuous learning, promotes inclusivity and equality, while ensuring a healthy and safe workplace. SmartPro-Planning: Customised and smart project monitoring tool providing integrated view of project progress status (Financial and Physical Progress) with dashboard and reports in terms of scope vs progress on design, procurement (po + delivery), installation, integration, commissioning and go live. • T-TRAX: RFID-based solution for tracking tower bundles across factories and site locations to improve tower-wise visibility, traceability, and lot completion. i-Attend: Mobile-Based attendance punching and monitoring solution for Linear Projects with scattered project locations. • • 3D PDF for design information: Area-wise cabling information shifted from 2D based AutoCAD files to 3D embedded PDF files which facilitates viewing the cable routing with its complete inventory in a 3D environment from a desktop computer instead of a high-end workstation. • Artificial Intelligence-Machine Learning: Database of pipe spools created using content extraction from queries of projects executed previously through natural language processing and text analysis. This enables a project planner to visualise the entire pipe spool lifecycle in a timeline sheet with all the queries and inspection data and assists the execution team to predict the cycle time for future projects. • Digital Twin: Laser scanning and digitalisation concepts extended to create digital twin models of the platform where onboard inventory is being scanned for generating 3D models and integrating them in the composite model. This helps to proactively identify interferences through dynamic motion analysis of ship-in route and generate digital templates of pipe spools thereby avoiding physical templating. • PLM CAD Integration: Integration of PLM platform with native CAD software improves the efficiency in D&E functions and brings better change management. • Armoury: Provides the interface to search surplus material lying in closed projects with different attributes such as make, size, grade, vendor, etc thus improving the possibility of alternate use of inventory. • Smart Quality Management System: ERP based Smart Quality Management System assists in integrated way of planning in design, material, production and quality functions. • RPA Load Balancer: In house developed BOT-based load balancing system to distribute RPA tasks to various virtual machines. REALTY • MY LTR App for Brokers: Enhanced dynamic interaction with brokers for complete life cycle, resulting in reduction in broker registration and payment TAT, improved transparency with leads and bookings sourced, improved collaboration for new project launches. • LTR Konnect: Centralised HR portal for smooth interaction with employees. The portal provides learning and training opportunities in digitisation, analytics, data driven decision making and process excellence. L&T Tech Park, Bengaluru 166 Corporate Management Overview Discussion and Analysis Integrated Report Statutory Financial Reports Statements LARSEN & TOUBRO SMART WORLD & COMMUNICATION • i-Survey: End-to-end point of presence survey management solution with mobile app capturing survey data, latitude & longitude, photographs and online approval system leading to improved productivity and performance in SCM. • Prapti Bodhi: Scientific planning for businesses based on historical data, volume, productivity and sequencing done by the system, based on the project variables. Predicting schedule variances based on progress and trade off analysis for course corrections. • Time Lapse Camera: Capturing timestamped photos for documentation, visualisation, and monitoring purposes. an optimiser engine for migrating structural logic from spreadsheets to backend services. - Corporate Governance - Business Ethics - Talent Management-Attraction, Retention & Development - Data Security, Privacy, and Cyber Security - Quality of Products and Project Delivery - Brand Management 1 Includes our core R&D engineers 159 Integrated Annual Report 2021-22 RESEARCH AND DEVELOPMENT PROJECTS 1. Artificial Aggregate - An alternative to natural stone aggregates Due to growing investments in the infrastructure sector, the demand for various construction materials like cement, steel, aggregates and others is increasing exponentially. To conserve natural resources like aggregates, research is being conducted on the development of artificial coarse aggregates, using industrial by-products such as fly ash and GGBFS (Ground Granulated Blast Furnace Slag) with suitable chemical activators to form a solid rock mass. This research has been taken up at L&T's Construction Research and Testing Centre. Initial results are encouraging and further research is in progress to improve durability and other qualities. This green and sustainable product has a wide scope for usage across the construction value stream and will help enable significant energy savings. 2. Shredded waste plastic modified asphalt mixes for eco-friendly and durable pavements Disposal of used plastics has been a major cause of concern for many developed and emerging nations. Plastics are usually non-biodegradable and burning of waste plastic emits harmful gases like sulphur dioxide. Utilisation of used waste plastic as a modifier in asphalt roads is an emerging technology to mitigate environmental hazards. Plastic-modified asphalt mixes can be produced by two methods - dry process, and wet process. L&T's Construction Research and Testing Centre had taken up a detailed study to evaluate the effect of shredded waste plastic on the mechanical properties of mixes prepared by the dry mixing process. The study revealed that the addition of shredded waste plastic has the potential to reduce the optimum binder content of the bituminous mixes. A 500m trial stretch was constructed with shredded waste plastic modified bituminous mix at the Kancheepuram campus in 2021. Preliminary investigations showed that the modified mix performed better than the conventional mix, especially during the monsoons, and further studies are planned to help push the usage of this mix in future road projects. R&D Centre for Mumbai-Ahmedabad High Speed Rail Project 160 Corporate Overview Management Discussion and Analysis Integrated Statutory Financial Report Reports Statements Digital Initiatives LARSEN & TOUBRO There are 50+ digital solutions that are in production and widely used by thousands of L&T's operating staff at hundreds of project sites. Over 11,000 construction equipment are connected, providing real-time visibility into operations of these machines at remote project sites. This visibility enables improvement in productivity and utilisation of these machines, better maintenance and uptime, and better fuel efficiency leading to faster work completion and cost savings. KEY MATERIAL ISSUES IMPACTED The initiatives highlighted in the subsequent section have been started in FY 2021-22. 15 L SE-2 SE-5 Corporate Overview Management Integrated Statutory Financial Discussion and Analysis Report Reports Statements LARSEN & TOUBRO KEY HIGHLIGHTS OF FY 2021-22 29 TOTAL PATENTS OWNED *837 Mn TOTAL R&D SPENT 56 AWARDS WON FOR INNOVATION 37 NEW PRODUCTS AND SERVICES DEVELOPED THROUGH R&D 187 R&D¹ DESIGN ENGINEERS STRATEGIES IMPACTED SO-I SO-III SO-IV SO-V SE-1 SDGS IMPACTED 168 Digital Initiatives across our businesses: • Smart Cameras and Image analytics: Cloud-based smart cameras help to monitor project site from a single dashboard. Smart cameras provide live feeds which are interpreted by Al Models to detect Safety and non-compliance of COVID appropriate behaviour, e.g Vision+ • Enabling Structures Tracking Application (ETAP): Digital application to track utilisation of all Enabling Structures across project sites by using QR codes. This has helped to increase the reusability of fabricated items and improve tracking of the same. • RebarPro: Application that provides end-to-end tracking of rebar (full length, offcuts, scrap) from store-to-site. This enables faster MIS dashboards creation, waste minimisation and productivity improvement. L&T Construction Konkan Railway Mumbai - Ahmedabad High-Speed Rail Project 162 Corporate Management Integrated Overview Discussion and Analysis Report Reports Statutory Financial Statements LARSEN & TOUBRO POWER TRANSMISSION & DISTRIBUTION Exposure Declaration: Digitalised system to track commodity and currency exposure. • Pronto: Centralised digital system that takes care of site invoicing activities by enabling resource optimisation and prompt delivery of services. • Engineering Optimisation & Calculation Automation Web-based solution using Python Programming with • ConPro: Application for end-to-end tracking of concrete supply chain. It enables auto dispatching of orders from batching plants and live tracking of transit mixers. • Smart Glass and Help Lightning: AR-Enabled Remote Assistance Software, including video collaboration services, that enables experts to work virtually side-by- side with anyone needing help, anywhere in the world. • Pre-Cast Segment Management System (PCSMS): Application for tracking the status of viaduct segments using bar codes. It enables real-time tracking of production and better traceability of finished segments at the stacking yard. • 3D Volumetric Measurements: Bulk material like aggregate stocks are measured digitally using drone- based scanning and volumetric analysis, enabling easy reconciliation and material planning. • Workforce Induction and Skills Application (WISA): End-to-end digital solution for all workmen related functions encompassing worker profiles, wage modules, experience records, trade validation, certifications and accreditations, skill database, health profile, safety training module, attendance management and workmen camp management. • PROCUBE (Project, Progress & Productivity): Tool to monitor multiple aspects of a project. It captures the real time day-to-day progress while helping to gauge workmen's productivity levels, analysing the project and speeding up progress. • TORQ (Tying, Operation, Revenue, Quality): Quality control tool developed to raise NC Observation, RFI inspection, Quality Audit and Laboratory Management. It helps to monitor and ensure maintenance of quality standards across the lifecycle of the project. • SHEILD - EHS Platform (Safety Health Environment for Industrial Landscape through Digital): Platform to evaluate a project's EHS status, manage EHS processes from inspection checklists to approvals, observations and audits, PTP, DWP, shut down operation and managing safety observations with checklists, and workflows to ensure planning, communication and action. • Conquer – Quality Inspection Application: Web and mobile-based application to conduct quality inspection prior to final commissioning. It generates quality observations, pour cards, quality walkdown, and customer and executive feedback. • Digital Stores: Solution to handle material from issue to consumption with proper reconciliation across the project sites. All material transactions are digitally captured using a mobile application, supported by layers of authentication and workflow. • VR Training for Safety: Immersive Safety training modules for workmen and staff using virtual reality. • Connected Asset: Remote monitoring of P&M equipment for utilisation and conditional monitoring. • POMS (Post Order Management System): Collaborative supply-chain accelerator used for enhancing visibility and tracking of critical vendor milestones from PO to delivery at sites. . • Surveys using advanced technologies: Advanced technologies e.g LIDAR, drones, 3D layer scanning, Ground Penetrating Radar etc., are used to conduct surveys to provide accurate project information, enabling efficient design and mitigating risks at an earlier stage. • eMtrack (Material Tracking): Digital solution that facilitates material return and material transfer between stores, and aids in the reconciliation of materials issued to various subcontractors in one line and being consumed against activities. • Automation of manual processes: Digital technologies e.g. Robotic Process Automation (RPA), Machine Learning etc., have been used to design solutions to automate manual processes and improve productivity. 161 Integrated Annual Report 2021-22 BUILDINGS & FACTORIES • HR Skill Inventory System: Man-management solutions like mySkill, Resource Assessment Management & Planning (RAMP), and Resource Upskilling through Competency assessment (RUCA), working in tandem to drive staff skill profiling, competency assessment, resource allocation and skill enhancement capabilities. • FORM FIT: A solution to track formwork panel utilisation and productivity. Transportation Infrastructure • Machine Control: 3D GNSS based Machine Control System deployed for Motor Graders and Excavators, enabling the equipment to run on auto mode for level control, with the operator only driving the equipment, thereby improving the productivity and safety at workplace. HEAVY CIVIL INFRASTRUCTURE 999999 O TOTAL Discussion and Analysis Report Reports Statements LARSEN & TOUBRO KEY HIGHLIGHTS OF FY 2021-22 52,155 TOTAL EMPLOYEE STRENGTH Statutory Financial 37,966 33 YEARS MEDIAN AGE OF EMPLOYEES 8.37 AVERAGE TRAINING HOURS PER EMPLOYEE 4.96 Mn SAFETY TRAINING HOURS STRATEGIES IMPACTED SO-I SO-II SO-III SO-IV SO-V ENGINEERS SE-2 Integrated LARSEN & TOUBRO Non-unionised workforce number (age-wise and gender-wise) Integrated Annual Report 2021-22 173 PROJECT MANAGEMENT L&T INSTITUTE OF IPM 10+ years in L&T 27.46% of personnel with Management Institute of Project Management, Vadodara 3.16% To further enhance inclusion of diverse workgroups, we have launched a special initiative WINSPIRE. In the first year, the focus was to induct, engage and develop more women. 24% of Graduate and Post Graduate Engineer trainees hired in 2021 are women. Various interview sessions and panel discussions were organised to engage the women workforce. Leadership Development Programmes for Women Employees 'WINSPIRE RISE' and 'WINSPIRE PROPEL' were launched, covering 110 participants across L&T. This will help to build a steady pipeline of women leaders going forward. Ref: The short film Symphony https://www.youtube.com/ watch?v=Grb-4czOWZA L&T continues to be an organisation where diverse workgroups come together to contribute towards creating a better world. The multi-generational and multi-cultural workforce works in harmony to achieve the organisation's results. The Company has employees from 46 nationalities, including Indians and more than 80 languages are spoken across project sites and offices. Within India, L&T has employees from 28 states and 8 UTS. DIVERSITY & INCLUSION The residential academy is equipped with great infrastructure to conduct various types of training programmes. It can accommodate multiple levels of leadership programmes at the same time. This campus is one of the few places in the country that have been designed exclusively to meet our growing demand and training. Green design with energy- efficient outfits and water-efficient measures are some of the important features of this world-class Academy. The IGBC Platinum Certification and CII Award winning energy efficient campus is a testimony of our conscious attempt towards sustainability. We have also introduced ESG training at LDA this year. LDA recognises that learning happens through discussions/debates in classrooms, in the privacy of a library, or in the relaxed atmosphere of a recreation room. This integrated facility provides all these advantages to nurture thought leaders and entrepreneurs of the future. Our Leadership Development Academy (LDA) is situated in the tranquil environs of the popular hill station, Lonavala. Established in 1997, it offers an appropriate ambience for learning and development. It was born out of the vision to fulfill the constant demand of L&T-ites for a holistic learning centre that will help manage their training programmes better. Even after 25 years, the Academy continues to be the preferred training destination for the L&T group. Leadership Development Academy Share of women in senior management Data as at March 31, 2022 SE-4 3 • Leadership Commitment: From addressing the sessions, conducting training, to spending one-on-one time for mentoring, the leadership's commitment and investment towards talent development is visible at multiple levels. • Strong Learning Ecosystem – People, Processes, Infrastructure: We have a well-established Learning & Development Team, that focuses on Technical Training (CTEA), Project Management (IPM), Leadership and Behavioral Training, Centre of Excellence (COE) for Process Improvement, Digital Learning (ATLNext), Leadership Development Academy (LDA), etc. Built on the foundation of these three pillars, the L&D strategy has multiple facets like: 1. Grow Within - Focus on grooming and developing talent internally. 2. Built to Last - Design deep-rooted interventions, adaptable to changing needs, that can sustain over long periods of time. 3. Best Practices + Next Practices - We position our interventions on time-tested design principles. At the same time the pedagogy we use, keeps pace with the latest approaches in Project, Technical and Behavioural Education, e.g., blended learning is a big part of our offerings in all career archetypes. 4. Partnering for Growth - It is said "If you want to go far, go together.". We operate with a very strong internal and external network. Internally, we are well supported by Business Leaders, HR Leaders, Business Talent Partners, and many Subject Matter Experts (SMEs). Externally, we collaborate with the best in the world, be it academic institutes like INSEAD, Michigan Ross, IIMS, XLRI or faculty members / consultantsconsultants such as Prof. Krishna Palepu - the Ross Graham Walker Professor of Business Administration at Harvard Business School, and Prof Das Narayandas - the Edsel Bryant Ford Professor of Business Administration at Harvard Business School. 5. Crafting Leadership Journeys - We encourage long-term growth journeys for our employees. This ensures holistic development guided by learning through training, peers, and on-the-job conditioning, supplemented by structured inputs through one-on-one coaching and strategic action learning projects, e.g., Ascent (Competency Leadership Development Program for Tier-3 employees) 170 Projects Leadership Corporate Overview Discussion and Analysis Integrated Report Reports Statutory Financial Statements LARSEN & TOUBRO L&D Practices to meet Short & Medium-Term Needs Classroom Training (In-Person or Virtual) for Competency Development Webinars Management SDGS IMPACTED Technical Leadership Business Leadership 5 10 KEY MATERIAL ISSUES IMPACTED - Corporate Governance - Business Ethics - Employee and Workforce Engagement, Wellbeing, Health & Safety - Human Rights and Labour Conditions - Skilled Manpower Leadership Archetypes - Talent Management-Attraction, Retention and Development - Brand Management 169 Integrated Annual Report 2021-22 LEARNING & DEVELOPMENT Corporate Learning & Development (L&D) L&T is an 80+ years old Indian multinational conglomerate. It carries a workforce that is multi-generational, drawn from diverse ethnic and cultural backgrounds, and brings with it a rich mix of educational and professional experience. Continuous learning is one of the highly treasured values of L&T. This gets addressed through a well laid out L&D Strategy. Building a leadership pipeline to enable growth and business continuity is one of the strategic enablers of the Company. This includes attracting and retaining top talent, but more importantly, it emphasises L&T's deep-seated culture of 'home-grown' talent. Over the years, L&T has prospered manifold in terms of executing green-field, mega/complex projects including Smart Cities, Mumbai Trans Harbour Link, Airports under the Government's UDAAN scheme, the landmark construction of the Statue of Unity and the most recent - India's first Mega Bullet Train Project valued at 25,000 crore. This extraordinary feat requires a sound foundation of well-honed internal talent. L&T's L&D Strategy is centred on three pillars: • Anchored to Dynamic Business Needs: L&D offerings are strongly aligned to the needs of the business over three major career archetypes - Business Leadership, Technical Leadership, and Project Leadership: - Diversity, Inclusion and Equal Opportunity New Joinees (age-wise and gender-wise) Data as at March 31, 2022 Gender 6 Accreditation Calendar Competency Development Core Development Leadership Development By external faculty By internal faculty 0 Total programmes Consolidated training break up Employees covered under Leadership Development Programmes (does not cover Leadership Development programmes done by the businesses) 1. Personal reasons (including family related, marriage & relocation), further studies and career prospects account for higher attrition rate in female employees. *Excludes superannuated staff 9% 8% 15%1 3 Programme types 190 6 2 2 76 Business Requirements 0 1 1 HR for HR 2 53 0 Corporate Overview 127 50 177 54 12 66 51 2 310 503 1,738 2,306 172 4,216 Grand Total 2,048 2,496 175 4,719 Male Female 16,881 Grand Total 29,356 15,341 Male 1,549 1,540 Female 30,905 >50yrs <30yrs >50yrs <30yrs 30-50yrs Total AGE Gender Total AGE 30-50yrs 4,369 149 4,220 48,917 52,155 3,238 <30yrs 30-50yrs >50yrs Total Attrition % AGE Gender Data as at March 31, 2022 Attrition (age-wise and gender-wise)* 5,068 5,751 109 1,827 3,815 Grand Total 107 1,686 3,275 683 2 141 540 Female Male Experiential Learning - Hands-on Training, Simulations, AR/VR Digital Learning - ATLNext (Technical & Behavioural Modules) RapL (micro-learning platform) Ascent - Competency Development Journey CLIMB 143.60 204.29 FY 2021 FY 2020 Fatality Frequency rate Severity Rate Safety dashboard FY 2022 140.23 representatives, as well as union members. These committees facilitate specific safety objectives, in line with the Company's 'Mission Zero Harm' goal. In the collective bargaining agreement, specific clauses related to health and safety are incorporated as well. In addition, workers have a Safety Ambassador at sites who helps them to raise safety issues directly and in turn, the Ambassador communicates good health and safety practices to workers. Our contractors and suppliers are evaluated on their safety infrastructure and assessment through auditing at our projects. A comprehensive understanding of safety requirements is imparted to contract workers at our construction sites through initial health and safety induction training. This is followed with specific activity training on risks with refresher sessions supported by skills enhancement- building programmes. Top-Down and Bottom-Up approach for Contractors and Suppliers Mission Zero Harm is to ensure all L&T workplaces, offices and premises are safe and without hazards. This commitment extends to all our contractors and suppliers working on our behalf at our project sites or premises. L&T's Corporate EHS Policy defines the commitment to Health & Safety and Mission Zero Harm through a structured Corporate EHS framework supporting our EHS procedures and guidelines. OSHA Our Goal This section complements with BRSR Principle 3 i.e. Businesses should respect and promote the well-being of all employees, including those in their value chains HEALTH & SAFETY We have been undertaking numerous awareness sessions on issues pertaining to Human rights across the Company; viz part of employee induction, EHS training and so on. In FY 2022, we initiated specific Train the trainer programme on Human Rights. The importance of workmen safety and wellbeing on all our contracts is crucial to the culture of our 'Mission Zero Harm' goal. At our manufacturing locations and project sites', safety committees are constituted comprising senior management LARSEN & TOUBRO 0.11 0.11 Every business organises several initiatives and campaigns to spread awareness of safety among our employees, workforce, and suppliers. L&T dedicates the first month of the year to Safety. Every year, a theme is agreed at the corporate level which supports the drive to Mission Zero harm. The theme for 2022 was "Do it Right, Do it Safely, Do it every Day'. Safety and Organisational Culture Furthermore, climate change is not only affecting projects and their timely delivery but workers are also facing higher fatigue due to rising temperatures. Fatigue Mitigation Plans are implemented and enhanced with medical awareness and medical checks to lessen the impact on workers. L&T recognised the importance of mental wellbeing and undertook awareness campaigns and programmes for the same. Projects progressed to having counselling availability and personal wellbeing initiatives when working away from home. The EHS Council has developed a Behavioural-Based Safety (BBS) Programme that is implemented across all businesses. External BBS providers such as DuPont continue to assist in further developing an integral safety culture in all our businesses at all levels and their understanding of risk. Introduction of the Safety Task Analysis Risk Reduction Talk (STARRT) Card and Hazard Identification Tool (HIT) Card have encouraged all employees to report hazards observed and ensure that action is taken. Behavioural-Based Safety & Well-being Artificial Intelligence (AI) is being used as a prominent solution for the identification and prevention of unsafe acts and conditions, while further enhancing our Building Information Modeling (BIM) in Safety. We plan to increase the use of 3D models in more construction sites for scaffold erection and dismantling and introduce more VR modules. In remote places, the use of drones has been applied to identify safety hazards, without the necessity of putting people at risk. Continued focus on digitalisation allows us to move further to the 'Connected EHS Manager' and the 'Connected Workman' as we continue to push boundaries and standards in safety to significantly improve our safety performance. We continue to develop VR-based training modules with digitalisation playing a critical role in the identification and reporting of unsafe acts/conditions. Specific training incident investigation allows us to fully understand the underlying causes and implement necessary steps to prevent re-occurrence. Further details of digital initiatives undertaken in health and safety have been covered in Intellectual Capital. Digitalisation in Health and Safety 0.10 L&T provided full vaccination cover for all workers and optionally extended the same to their families. Continued monitoring of workers across the business ensured the spread of the virus was controlled. L&T's Crisis Management Team (CMT) proactively continues to monitor and manage health and safety initiatives across businesses, facilities, and projects. Apart from putting processes in place to maintain real-time communication, the continued use of Al to monitor our projects 24/7 to detect and prevent unsafe situations and behaviour has enabled real time reactions to risk analysis. Further, use of mobile safety apps are ensuring this type of real-time reaction and compliance, further improving our compliance without the need for delayed direct interaction. Search engines provide direct access to doctors and medical facilities through mobiles. Integrated Annual Report 2021-22 175 Regular auditing is conducted for our safety management systems through accredited external and internal lead auditors to maintain the standards for continued accreditation of ISO 45001:2018. Internally accredited lead auditors ensure that all operations maintain the standard, adopt, and share best practices and innovation across our ICs. Our EHS Council monitors and measures compliance with corporate procedures. Major supply chain contractors and subcontractors are audited before awarding any contracts to ensure that safety standards are maintained throughout the contract duration. In addition to this, the EHS Council audits each IC on the implementation of procedures. L&T's safety management systems across the business are also supported by internally developed Safe Operating Procedures (SOPs), which are fully endorsed by the L&T EHS Council. It is important that every business, through their Safety Management Systems (SMSs) sets targets and objectives to achieve the Zero Harm goal. The business undertakes a risk- based approach to all activities auditors, ensuring that the standards are being maintained, and identification and sharing of best practices and innovation, particularly in digitalisation is implemented across all L&T businesses. Accredited Safety Management Systems 25 25 74 41 Emergence from COVID-19 Pandemic Financial Statements Reports Report Digitalisation & Process: AR-based mobile application on Wall & Column System module - an immersive self-paced learning mobile application for detailed visualisation of the concept created with completely gamified outputs on mobiles to create an enriching interactive experience. a platform to nurture and encourage innovators, where engineers had to pen-down their ideas to resolve any challenge at work. CTEA also organised a virtual event 'Engineering Through my window' on Engineers Day, to recognise innovations in engineering across the organisation. The event provided CTEA also organises several technical professional engagements and motivational annual events like the CAD Fest, Technology Conclave, Virtual Technical Summit, and Technology Day Celebrations. An innovative engagement activity named 'Learner Premier League' was organised to motivate L&T-ites to hone their existing skills or acquire new skills the IPL WAY.' It was a two-month online engagement activity as part of the calendar programme to enhance learner experience, which helped leverage group activity across multi- disciplinary teams, increased engagement with the learners during the COVID-19 period and brought a fun element by breaking the monotony. CTEA has also customised some key programmes to meet changing business requirements, these include the Vendor Development Initiative, which involves formation of taskforces comprising CTEA and Project Heads across ICs to identify Entrepreneurial functions required for construction works, so that vendors can start and build their own successful business. A one-of-its-kind, six-day programme was designed and executed at Mumbai and Delhi, covering 40 sub-contractors. Integrated Annual Report 2021-22 171 • Level 2 training is aimed at Competency Development needed by employees to hone their knowledge and skills at their workplaces. CTEA conducted 162 virtual programmes, covering 12,540 working professionals, which include niche programmes like Behaviour Based Quality, Advanced Hydraulics, 5G Architecture, DMEA & Certification programmes on topics like Riggers, Scaffolding, Stores Management, etc. Any Time Learning (ATL): L&T has established a scalable, multi-featured and externally-integrated Digital Learning Platform called ATLNext. It offers a gamut of online courses including competency courses, behavioural courses, and business-specific technical courses to meet the unique needs of the learners. 1 Operational Excellence 41 41 0 Safety 10 10 0 64 In FY 2022, we have tied up with globally renowned content providers such as Skillsoft and Coursera to provide training content to employees, while continuing with many existing content providers like Harvard Manage Mentor (HMM) and EBSCO. We have also implemented a unique AI/ML technology-based communication fitness coaching programme to improve work-related communication skills of target employee groups. All the offerings of ATLNext culminated into 2.7 lakh hours of learning clocked by L&T employees through digital learning. LEADHU L&T's Leadership Development Academy. Lonavala Discussion and Analysis Statutory Integrated Management Corporate Overview training man days 3,584 participants 310 Leadership Development Programmes 174 378 119 Integrated Report Discussion and Analysis Management Corporate Overview LEADERSHIP DEVELOPMENT ACADEMY 172 • The CEO & MD and the Executive Directors communicate the overall direction and priorities 497 • Fire Service Week: Prevent fires, prepare yourself, promote safety Corporate Overview 198,975 Courses conducted in FY 2021-22 against 187,575 in FY 2020-21 4.36 lakh hours of courses conducted in FY 2021-22 3,276 hours of training on Human Rights provided in FY 2021-22 ~20,000 L&T executives trained in Project Management at L&T IPM L&D Practices to meet Long-Term Plans 7-Step Leadership Pipeline Programmes Journey-Based Competency Development Programmes Action Learning Projects Management Development Programmes Mentorship Qualification/Accreditation/ Certification Programmes Corporate Technology & Engineering Academy (CTEA) Madh and Mysuru CTEAs have state-of-the-art infrastructure and learner friendly environments, with robust processes to design and deliver technical, functional, and business specific training programmes in a healthy and pollution-free environment. In addition to excellent classroom facilities, both the academies lay emphasis on providing hands-on training to the participants through various labs / hands-on areas, like manufacturing excellence lab, CAD & Safety lab, Digitalisation lab, Prestress Technology, IoT, PLC, Robotics, 3D printing, GD&T, etc. CTEA provides Training & Competency Building services to many L&T businesses including Construction ICs, Defence Engineering, Hydrocarbon, Power, Heavy Engineering, L&T Technology Services, Nabha Power, MHI, L&T Infotech, Valves & Process etc. Employee development at these academies is focused on various levels: • Level 1 includes young recruits such as GETS, DETs and FLS (Frontline Supervisors). It focuses on skill enrichment of freshers, wherein technical orientation and hands-on experience are offered to Graduate Engineers Trainees (GETS) from various L&T businesses to make them industry ready. As a part of their orientation, CTEA organized online sessions with a blended approach for latest batch of GETS. Some of the key highlights include virtual labs, mini projects, videos and effective presentations. Another focus area in Level 1 is the transformation journey of fresh Industrial Training Institute (ITIS) to be converted into responsible FLS. CTEA also design and deliver domain-specific survey and quality modules and impart technical and functional modules, to meet the current business needs. Apart from these established processes, there are additional measures taken to ensure People Development Needs are identified and addressed regularly. The following forums viz. Talent Partners Meet, CoE Partners Meet, ATL Partners Meet, HR Council, DC - i-LEAD keep the interaction on People Development alive and updated. We also participate in external industry forums for benchmarking, gaining knowledge and networking. We get outside-in perspectives on current and future talent development trends from such forums. Executive Education CHICAGO BOOTH Learning Partners GREAT LAKES Strategic Imperatives Live Online / In-person Simulations PHASE-II BASECAMP Orientation Preliminary Assessment 176 Participative Goal Setting PHASE-I PHASE - III Statutory Financial Reports Statements Engage Act Think SUMMIT Integrated Simulation Future PoA Journaling Peer-learning 65 Webinar SOCIAL AND RELATIONSHIP CAPITAL OE L&T strives to promote initiatives that enhance the quality of life for communities in and around the areas where the Company operates. L&T has been working towards the social and economic development of communities around its premises and at various locations across the country long before the CSR section was introduced in the Companies Act 2013. Building on over eight decades of social responsibility activities, the Company has a well-entrenched CSR programme that contributes to inclusive growth by empowering communities and accelerating development through interventions in water and sanitation, health, education, and skill development. 799 X+Y= 178 On-site safety training through 'Induction Vans' AB VAAAAAAB AAAAAAA Water Network LE INDUCTION VAN KELIGENT TREATMENT IC Projects undertake specific training and apply the 'Lifetime Learning' approach where specific workers can undertake and be trained in a specific area. Virtual Reality training modules for our workmen across the board give a new dynamic to safety training. To overcome any disabilities or language difficulties, our training includes interactive tests and sessions where a 3D screen and Al provide attendees with the opportunity to apply and test their learnings from the interactions. Integrated Annual Report 2021-22 In line with L&T's progressive safety initiatives and innovations, a comprehensive safety training programme has been developed to enhance safety awareness for all employees. Training modules have been developed into online sessions, with both internal and external faculty. Safety Awareness Programmes in specialised areas of tunnel, marine and launching girders in our metro, transportation, and special bridges business units During the Safety Month, cross-functional safety audits, along with 'train-the-trainer' programmes are conducted. The objective is to progressively ramp up site-based safety capabilities. We recognise the efforts of individuals for their contributions to safety across projects through various rewards and recognition schemes. Developing innovative programmes: Groom fresh Diploma Engineers to perform the role of EHS professionals • • • National Safety Week: Reinforce positive behaviour at the workplace to achieve safety and health goals LARSEN & TOUBRO Financial Statements Reports Statutory Integrated Discussion and Analysis Report Management Safety training 177 Highlights of ICDP programme in three new locations as follows: 80 Coverage under ICDP in three new locations: Devgaon, Nagzari and Sewantri 5,345 187 FY 2019-20 Area of land under the project area Population 10,074 ha 25,208 FY 2022 Water Availability Integrated Annual Report 2021-22 Increase in water table level Agriculture 2 90 FY 2021-22 Target CHETTIPALAYAM 75 87 Percentage of household with drinking water Households covered 92 Location: Devgaon Tanda, Maharastra Statutory Integrated Report Discussion and Analysis Management Corporate Overview FY 2021-22 FY 2020-21 KUMBHALGARH FY 2019-20 Target Baseline CHETTIPALAYAM 6.0 6.0 BHIM 6.9 8.0 239.0 262.0 288.0 304.8 366.0 28.0 29.1 29.0 29.0 30.0 Financial PAPPAMPATTI LARSEN & TOUBRO Statements PAPPAMPATTI 65 35 20 20 FY 2020-21 KUMBHALGARH Baseline 20.83 12 277.4 452.6 BHIM 84 89 89 909 350.4 394.2 PATHARDI 893 812 70 673 53 366 Increase in Irrigated Area (ha) Reports No. of crop demonstrations 204.0 268.2 Demography: 272 households, Population: 1,558 Location: Alamgaon Village, Nagzari, Maharashtra Making hay whether the Sun shines or not Statements Reports Report Discussion and Analysis LARSEN & TOUBRO Financial Statutory Integrated Management Corporate Overview 184 Result: Vaccination of 1,347 people COVID-19 Vaccination: Awareness generation and vaccination through SHGs using audio/video messages on social media. Institution Building and Sustainability Community groups like Village Development Committees (VDCs) with 50% participation from women, Farmers' groups, and Self-Help Groups (SHGs) were created. Impact: In FY 2021-22, 150 households benefited, the yield increased from 4.4 quintals/ha to 6.74 quintals/ha and the average household income has increased from *6,006 to 19,808 Intervention: Social interventions like providing good quality indigenous seeds Challenge: Low-Income generation due to bad quality of seeds Location: Sewantri, Rajasthan Sowing the seeds of positive change Under this component, women were given good quality seeds of indigenous species of vegetables. They were encouraged to grow a kitchen garden that provided fresh, nutritious, and organic food to the household to meet their daily nutritional needs. During FY 2021-2022, 150 households benefitted through kitchen gardens. Enhancing Nutrition Impact: Increase in harvest and income of the family, 13 quintals of wheat, priced at 4,000/quintal Intervention: Promotion of multilayer farming, farmer training and demonstration of organic farming under the guidance of Project Agronomists Challenge: Usage of chemical fertilisers, huge cost, adverse effect on land fertility Intervention: Training and awareness on climate resilient agricultural practices 232.0 Impact: The formation and capacity building of Village Development Committees (VDCs) and other village institutes for governance,. Federation of SHGs led to the process of forming Farmer Producer Group and selling of farm produce at fair prices with the support of Government schemes. Farmer Producer Group [Swarajya Shetkari] initiated on September 30, 2020 with a membership of 300 people. Selection of a woman candidate as President in Village Development Committee. This paradigm shift brought confidence among women and empowered them to make decisions. 268.2 305.0 5.5 PATHARDI 4.2 4.5 5.5 6.5 186 The impact of the ICDP projects that were initiated in 2014 and completed in 2020 is sustained and visible this year by either the same/increased level of water in the wells, and area of irrigated land; which is shown in the following ICDP sustainable graphs. Depth of water from land surface (metre) Impact Indicators Integrated Annual Report 2021-22 185 sen & To LARSEN & TOUBRO A CS • 70 SHGs have more than 3.5 Mn as total savings • 78 micro enterprises set up for individual or small groups of women like grocery stores, flour mills, beauty parlours, sewing and tailoring, etc. • 435 women engaged in vegetable cultivation, packaging and selling in local markets; 678 engaged in goatry; 27 women earning through purchase of buffaloes and sale of milk • 15 Pashu Sakhis developed to cater to the health of goats • 46 SHGs linked with banks and total of 7.6 Mn worth loans mobilised by the SHGS Impact: Role of SHGs: Better access to savings and credit facilities for income generation, provide loans to their members for health, education, and livelihood, provide women with a firm base for dialogue with credit institutes and banks. Intervention: Training in financial and digital literacy, SHG processes and functioning, menstrual hygiene, maternal care and reproductive health; 208 community meetings conducted Gross Savings: 1,895,125 No of participants: 1,254 women No of SHGs: 78 Region: Sewantri, Rajasthan Empowering women through SHGs and capacity Building Paradigm shift in gender perspective through women leadership Area protected from Direct Run-off LARSEN & TOUBRO Fallow land converted to agriculture land 11.2 10.3 FY 2019-20 Corporate Overview Management Discussion and Analysis Integrated Statutory Financial Report Reports Statements Increase in Irrigated Area (ha) 116.6 FY 2021-22 461.0 Baseline FY 2020-21 180.0 156.4 131.4 SEWANTRI 606.0 612.0 DEVGAON 1,076.0 654.0 638.0 Target FY 2020-21 Baseline As a part of the intervention, structures like check dams, anicuts, contour trenches, farm bunds and farm ponds were constructed with participation from the community. These structures, along with other sustainable agricultural practices, helped increase the water level in water bodies, and retained soil moisture. Water Resource Development through Farm Ponds Depth of water from land surface (metre) וווין Interventions: Construction of farm ponds, Well cleaning, lining and parapet construction Area: Nagzari and Chambharwadi village in Jalana district of Maharashtra 487 households in Sewantri benefitted Storage capacity: 46.19 lac litres The depth of water from land surface has increased in Sewantri due to 43% less than average rainfall in FY 2021-22, as indicated in the graphs alongside. 182 14.2 13.7 SEWANTRI 9.7 8.0 7.7 DEVGAON 22.0 20.2 17.6 NAGZARI 950.0 903.0 NAGZARI LARSEN & TOUBRO Savings on cost of fertilizers by 30-35% 120 Farmers benefitted Savings of 300-400 a week through the sale of organic vegetables Cultivating rewarding agricultural practices Name: Jaydeep Ramrao Rathod • Formation and strengthening of community organisation • Seed treatment • Best practices on grains, pulse, vegetable nursery and fruit orchards. Zero-budget natural farming • Lives touched through our water and sanitation interventions 162,413 188 • Horticulture wadi development • Improved Kharif and Rabi cropping • Water budgeting 408 26 *6.57 Mn Training on subjects No. of farmers attended farm-field trainings Overall impact in the region: Infrastructure Region: Devgaon, Jalna District, Maharashtra Integrated Annual Report 2021-22 245.2 914.0 Changing the financial landscape of a village Name: Hassan Pathan Location: Georai Marda village, Devgaon, Aurangabad, Maharashtra Demography: 473 individuals with 90 households Problem: Dependent on rain-fed farming, and irrigation from open wells, allowing the farmers to cultivate a single crop every year Intervention: Civil interventions like farm bunding, farm ponds, ravine deepening Impact: Groundwater recharge, improved crop yield, annual income of 54,250 cultivation of 2 crops 500+ farmers Overall beneficiaries in the region 950.0 Water Distribution System To provide water security to all beneficiary families, water distribution schemes are introduced. The households are provided with adequate piped water supply within or nearby the household premises to relieve women and girls from the drudgery of fetching water. Capacity Building In all the ICDP locations, the communities were trained to facilitate optimum, equitable, and efficient water use and implement other agricultural methods and technology to increase the yield. Farmers were trained in agricultural practices that required minimum use of water along with techniques to prepare low-cost organic manures that retain the land's fertility. Target FY 2021-22 FY 2019-20 भाई मेरा सबसे न्यार शौचालय बनवाया प्यार पापा मम्मी खुले में शौच 183 Promoting sustainable and climate resilient agriculture: This intervention is aimed at reducing the input cost of crops and increasing the yield by promoting organic methods of cultivation. Capacity Building Integrated Annual Report 2021-22 The ICDP starts from need assessment of the location and follows a systematic community organisation strategy. These include mobilising people around the problem, forming village development and monitoring committees, creating awareness about saving water, building civil infrastructure to help water and soil conservation, ensuring its maintenance by the community, providing sanitation facilities with people's contribution in terms of labour, encouraging climate resilient and sustainable agricultural practices and building capabilities of the local people to use the resources judiciously. KEY MATERIAL ISSUES IMPACTED – Customer Experience and Satisfaction - Corporate Governance - Business Ethics - Employee & Workforce Engagement, Wellbeing, Health & Safety - Human Rights and Labour Conditions - Sustainable Supply Chain - Diversity, Inclusion & Equal Opportunity - Brand Management 17 Patent - Social Engagement and Impact Integrated Annual Report 2021-22 SOCIAL CAPITAL Input Metrics Output Metrics *1.36 Bn CSR Spend 1.13 Mn CSR beneficiaries 45 179 10 AND LANTATION 6 Corporate Overview Management Integrated Statutory Financial Discussion and Analysis Report Reports Statements LARSEN & TOUBRO KEY HIGHLIGHTS OF FY 2021-22 1.13 Mn LIVES BENEFITED THROUGH OUR COMMUNITY DEVELOPMENT PROGRAMMES STRATEGIES IMPACTED SO-II SO-V SE-2 SDGS IMPACTED 2 3 BULTY EDUCATION 5 CSR Partners 510,781 Vendors, subcontractors and workers trained 48,168 Discussion and Analysis Integrated Report Statutory Financial Reports Statements 6. L&T Public Charitable Trust (LTPCT): Established in 2004, LTPCT has been undertaking projects to facilitate sustainable development of society through initiatives in the realms of vocational training, water management, holistic development of children and healthcare in the marginalised communities. Employees' contribution and management grant from L&T have made the institution a not-for-profit entity within the conglomerate. LTPCT benefits from the support and in-house expertise of various L&T companies to design and deliver its programmes for the community. Increase in area under cultivation / irrigation L&T was at the forefront of responding to the COVID-19 threat, with prevention and treatment related initiatives for affected individuals. The Company supported the Government's efforts during the pandemic by strengthening health infrastructure, providing preventive gear and supplies for frontline workers, as well as donating testing, diagnostic, and treatment equipment. L&T reached out to 10 states in India and contributed around 337.7 Mn for COVID-19 Relief. Personal Protective Equipment PPE Kits, Ply Masks Hospital Equipment 32 oxygen generators, over 1,750 bedside ventilators, mobile X-ray units, ambulances, portable laboratories, thermal scanners, pulse oximeters, High Flow Heated Respiratory Humidifier and Cannula, Fowler beds, and CPAP machines Integrated Community Development Programme The Integrated Community Development Programme (ICDP) of L&T started in FY 2014-15 to improve the availability of water. Two projects in Tamil Nadu have been handed over to people's institutions for sustaining the work initiated by the project. Rajasthan, Maharashtra and Tamil Nadu States covered 23,907 Households covered 36,181 ha Area covered Management 181 Corporate Overview 5. Volunteers: L&T-eering, the Company's structured employee volunteering programme enables and encourages employees to participate in community development activities. Volunteers invest their time in programmes that benefit underprivileged communities. New suppliers and contractors *54.4 Bn Contribution to exchequer 2,615 MSME suppliers The activities are brought under the CSR theme 'Building India's Social Infrastructure' to bring about impactful and long-lasting social change. Building India's Social Infrastructure L&T aims to improve the quality of life, mitigate social inequalities, build self-sufficiency, and help individuals achieve their true potential in the identified communities. Water and Sanitation Education 162,341 Lives Impacted 260,295 Lives Impacted Skill Development Health 690,321 Lives Impacted 14,587 Lives Impacted Drivers of CSR Interventions 1. Corporate CSR Team: L&T has dedicated CSR teams at the Corporate level, committed to maximising social impact. The Corporate CSR team acts under the guidance and framework approved by the CSR committee of the Board. They devise, execute, and monitor CSR programmes, either directly or in partnership with NGOs. 2. CSR coordinator and teams at campuses, area offices, and sites: Area offices and campus teams perform need- assessment, identify local projects and NGO partners, implement and monitor the projects - providing support in achieving stated CSR goals. 3. L&Ts Health Centres: L&T's multi-specialty Health Centres and their professional staff are equipped to provide outpatient and tertiary health services by reaching out to the underprivileged communities and making health care accessible and affordable to them. 4. Prayas Trust: Run by the female spouses of employees and women employees to provide services to the underprivileged sections of society located around various L&T facilities. 180 No. of farmers groups formed L&T's COVID-19 Care No. of veterinary camps 8.88 m 77% 65 3471.54 ha 53% 190.51 ha 43% Health and Nutrition Area under horticulture No. of kitchen gardens Livestock Livelihood Pastureland area under protection Institution Building SHG Savings fund created for inter-loaning No. of self-help groups (SHGs) active 539 241 26 No. of children in Balwadis supported 19 ha 213 Water & Wastewater K. Asok Kumar Subramanian Sarma Satish Palekar Derek M Shah Arvind Garg Anil Parab Buildings & Factories • Health Water & Effluent Treatment Power Transmission & Distribution Heavy Civil Infrastructure Commercial Domestic • Metros • Transmission Supply I (North) • Power Public Spaces, Airports & Factories • Airports • Public Spaces • Factories • Residential Supply II Health, Residential & • Rural Water • Substation • Rural Water Solutions D K Sen Desalination • Industrial & (South & East) Systems II • Large Water • Large Water Systems I (North & West) Irrigation, Industrial & Infrastructure • Waste Water Water Management • Urban Water & (South & East) Supply III • IT, Office Space • Ports & • Middle East • Rural Water • Defence International (Central & West) • Nuclear Tunnels • Hydel & Distribution Line • B&F Fast & Data Centres • Africa S V Desai M/s. Deloitte Haskins & Sells LLP M V Satish Whole-time Director & Sr. Executive Vice President (Energy) MR. SUBRAMANIAN SARMA Whole-time Director & Sr. Executive Vice President (Defence & Smart Technologies) MR. JAYANT DAMODAR PATIL Whole-time Director & Sr. Executive Vice President (Buildings) MR. M. V. SATISH Whole-time Director & Sr. Executive Vice President (Development Projects) MR. D. K. SEN Whole-time Director & Chief Financial Officer MR. R. SHANKAR RAMAN Energy Products & Systems Engineering Power Training Institute Energy - Hydrocarbon • Offshore • Onshore • Construction Services • Modular Fabrication • ADVENT (Advanced Value Engineering & Technology) JVs, Subsidiaries & Associates • L&T Sapura Shipping MR. S. V. DESAI T Madhava Das Whole-time Director & Sr. Executive Vice President (Civil Infrastructure) Whole-time Director & Sr. Executive Vice President (Utilities) S N Subrahmanyan CEO & Managing Director Chairman & Board of Directors | ORGANISATION STRUCTURE Integrated Annual Report 2021-22 9 77th Annual General Meeting through Video Conferencing or Other Audio Visual Means on Thursday, 4th August 2022 at 3.30 p.m. IST Kfin Technologies Limited Registrar & Share Transfer Agents • Smart Water Auditors L&T House, Ballard Estate, Mumbai - 400 001 Registered Office Mr. Sivaram Nair A Company Secretary MR. PRAMIT JHAVERI Independent Director MRS. PREETHA REDDY Independent Director Nominee of Life Insurance Corporation of India MR. HEMANT BHARGAVA Independent Director MR. NARAYANAN KUMAR MR. SANJEEV AGA Independent Director MR. ADIL ZAINULBHAI Independent Director MR. VIKRAM SINGH MEHTA Independent Director MR. M. DAMODARAN Independent Director MR. M. M. CHITALE Independent Director MR. T. MADHAVA DAS • L&T Sapura Infrastructure International Retail • High Street • L&T-Sargent for Engineering & Design Joint Venture • L&T Howden • L&T-MHI Power Turbine Generators Joint Ventures ⚫L&T-MHI Power Boilers Pre-heaters • Rotary Air • Axial fans • Heavy Foundry Hydro Turbine Generators for Steam & Transit Oriented Manufacturing Cycle Power Plant for Combined • Steam Turbines Turbine & Generators • Nuclear Steam • Pulverisers and Supercritical Steam Turbines Supercritical • Ultra Boilers Supercritical and Supercritical • Ultra Manufacturing • Combustion Modification • Contract Development Products • Rural Business Finance Integrated Annual Report 2021-22 11 As on 31.03.2022 Others Services Manufacturing EPC Projects EPC Construction Corporate Secretarial Sivaram Nair W. P. Parthasarathy Corporate HR Dr. C Jayakumar Corporate Audit Services Corporate Centre Hasit Joshipura Management • Risk Insurance Treasury • Taxation • Farmer Finance • Two-wheeler Finance • Retail Housing Finance • Consumer Loans • SME Loans • Real Estate • Selective Catalytic Reduction Finance Finance • Mutual Funds • Internal Controls • Finance Reporting • Infrastructure Water • Flue Gas Desulfurization • Electrostatic • Main Line Railways Structures • Formations & Bridges • Roads & & Elevated Corridors (Domestic) Roads, Runways Energy - Power Minerals & Metals Transportation Infrastructure • ArRiyadh New Mobility Consortium- Riyadh Metro Orange Line Line Doha Metro • ALYSJ JV Gold Railway Joint Ventures L&T Harbours Arabia • L&T Saudi Subsidiary New Electrics Digital Solutions • International • Floating Solar Energy Storage • Micro Grids & • Utility Scale Renewables • ASEAN Geostructure Pvt. Ltd. Construction Business • Metro Business Enviro Systems Generators Island Turbine & • Nuclear Steam Projects • Gas-based Projects • Coal-based EPC Projects Forgings Pvt. Ltd. L&T Special Steels & Heavy Limited • Nabha Power and Hydro Power Plants of Thermal • Development Power Development Transportation (International) Subsidiaries • L&T Oman LLC • L&T Infrastructure Engineering Ltd. • Hitech Rock Products & Aggregates Ltd. • Minerals & Precipitators Metals • Products Infrastructure Development Projects • Roads • Ports • Metros • Power Transmission • MENA Offshore • Larsen & Toubro Heavy Engineering • PT. Larsen & • Consumer Electronics & ISV • Media & Entertainment Process Engineering • FMCG • Chemicals • Oil & Gas Medical Devices & Life Sciences • Medical Devices • Healthcare Horizontals • Digital Engineering - Digital Consulting Digital Manufacturing - Digital Products & Services • VLSI Design Services • Mechanical Engineering Chief Executive Officer & Managing Director MR. S. N. SUBRAHMANYAN Group Chairman Infra & Service Providers •Semiconductors • Communication Telecom & Hitech • Aerospace & Rail Defence Shipbuilding • Warships - New Build & Refits JVs/ Subsidiaries • L&T MBDA Missile Systems Ltd. • Smart Cities & Smart Infrastructure • Safe Cities • Cyber Security • Communication Network & Telecom Infrastructure • Military MR. A. M. NAIK Communication Industrial Products • Electricals & Controls • Industrial Machinery • Building Technology • Power & Utilities Transportation • Automotive • Truck & Off- Highways Verticals BOARD OF DIRECTORS (as on 12th May 2022) | COMPANY INFORMATION Discussion and Analysis Report • Built-to-suit Commercial • Luxury Housing • Elite Housing Residential Development Verticals: Integrated Mixed Use Development • Slum Rehabilitation Authority Projects • Joint Venture Development • Land Development Development Types: Mindtree NxT Consulting Automation Office Enterprise IT transformation & Intelligence • Data & • Customer Success Service Lines • Healthcare • Banking, Financial Services & Insurance Communication, Media & Technology •Retail, Consumer Packaged Goods & Manufacturing •Travel, Transportation, Logistics & Hospitality Industry Groups • Enterprise Integration and Mobility and Cognitive • Analytics, Al & Security Infrastructure • Cloud, • Cloud Armoured Systems, Missiles & Aerospace Systems Weapon Systems & Engineering Systems (Land & Naval) Campuses Commercial Statements LARSEN & TOUBRO Statutory Financial Reports Integrated Management Corporate Overview • Embedded Engineering • Verification & Validation Verticals • Banking and Financial Standalone Services • Manufacturing • Energy & Utilities • Consumer Packaged Goods, Retail & Pharma High-Tech, Media and Entertainment • Public Sector Services Offerings •Application Development Maintenance & Testing Malls • Integrated Retail Buildings Insurance • Artillery Guns, Underwater Platforms • Submarines & Green Hydrogen and its derivatives • Carbon Capture and Storage Manufacturing • Electrolysers • Advance chemistry cells (ACC) for stationary applications Green Adjacencies • Fuel Cells • Bio Fuels Partnerships • EPC Projects for • Joint Ventures development projects and manufacturing of Technological Equipment Construction, Mining, and Industrial Machinery • Construction Machinery • Mining Machinery • Crushing & Sand Plant Solutions • Rubber Processing Machinery • Domestic Marketing Network for Subsidiary/JV • L&T EPC • Asset Development for Toubro Hydrocarbon Engineering Indonesia • L&T-Chiyoda • L&T Hydrocarbon Saudi • Larsen & Toubro Kuwait Construction • Larsen & Toubro Electromech • L&T Modular Fabrication Yard Enterprise • L&T Hydrocarbon Caspian LLC L&T Green Hydrogen and its derivatives Valves • Oil & Gas • Refining Chemicals & Petrochemicals • Power • Defence • Nuclear • Aerospace Subsidiaries • L&T Valves USA LLC • L&T Valves Arabia Manufacturing LLC Energy- Green Construction Capability Unit Valves for • Larsen Toubro Arabia Construction Equipment • Construction Financial LARSEN & TOUBRO Reports Statements J D Patil R. Srinivasan Amit Chadha R Shankar Raman Debashis Chatterjee Shrikant Joshi Dinanath Dubhashi YVS Sravankumar R Govindan Statutory KV B Reddy Smart World L&T & Communication Technology L&T Infotech Mindtree L&T Realty L&T Finance Holdings Services Corporate Accounts & Taxation Corporate Finance Hyderabad Metro Defence & Aerospace Defence Limited Integrated Report Management & Road Making Machinery • Hydraulic Systems and Components Heavy Engineering Nuclear • Nuclear Power Plant Equipment & Systems •PHWR • ITER • FBR Discussion and Analysis • LWR Process Plant Equipment • Refinery, Cracker, Oil & Gas and Coal Gasification • Fertilizer & Petrochemicals • Modification, Development Revamp & Upgrade (MRU) Segment • Process Plant Internals • L&T Piping Centre 10 10 Corporate Overview • ATVP & Lundy 2021-22 4154 17.46 16.06 Gross Debt: Equity ratio 0.30:1 0.40:1 0.49:1 0.24:1 0.21:1 0.23:1 0.33:1 0.35:1 0.34:1 0.29:1 Basic earnings per equity share (*) [6] 56.09 84.02 47.59 53.43 38.46 39.00 35.81 14.30 12.39 12.37 11.32 9.86 9.23 11.38 11.78 10.60 PAT as % of net revenue from operations [1][4] 7.80 13.52 8.11 36.31 9.10 8.30 7.91 8.87 9.71 8.50 RONW % [5] 12.23 20.54 13.07 15.74 7.23 39.57 35.55 Book value per equity share (*) [7] No. of equity shareholders No. of employees [1] For Continuing Operations from 2018-19. [2] Profit before depreciation, interest and tax (PBDIT) is excluding extraordinary & exceptional items wherever applicable and other income. [3] PBDIT as % of net revenue from operations = [(PBDIT)/(gross revenue from operations less excise duty up to June 30, 2017)]. 54,579 50,592 [4] Profit After Tax (PAT) as % of net revenue from operations = [(PAT including extraordinary & exceptional items)/(gross revenue from operations less excise duty up to June 30, 2017)]. [5] RONW [(PAT including extraordinary & exceptional items)/(average net worth excluding revaluation reserve)]. [6] Basic earnings per equity share has been calculated including extraordinary & exceptional items and adjusted for all the years for issue of bonus shares. [7] After considering adjustments for issue of bonus shares during the respective years. [8] Figures for 2021-22 and 2020-21 include the impact of the merger of L&T Hydrocarbon with the Company. 44,081 [9] Figures from 2018-19 include the impact of the merger of L&T Shipbuilding Limited with the Company. [11] Figures from 2015-16 are as per Ind AS and for earlier periods as per IGAAP and hence not directly comparable. [12] Profit from discontinued operations in the year 2020-21, 2019-20 and 2018-19 has been considered as exceptional item. 16 Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial Reports Statements I CONSOLIDATED FINANCIALS - 10 YEAR HIGHLIGHTS [10] Dividend for the year 2020-21 includes special dividend of ₹ 18.00 per share and final dividend of * 18 per share. 10.34 832,831 854,151 9,23,628 10,28,541 43,354 477.67 439.55 371.65 356.79 350.90 328.79 301.57 265.85 241.97 211.39 Dividend per equity share (*) [7][10] 22.00 8,53,824 36.00 18.00 16.00 14.00 12.17 10.83 9.50 8.22 14,92,124 13,71,535 12,51,569 10,21,275 8,99,902 50,267 49,107 45,467 45,205 42,924 41,466 18.00 9.30 8.30 9.52 57164 52196 PBDIT[1][2] 9055 8309 6838 7653 7701 6481 5829 57558 6488 5473 Profit after tax (excluding extraordinary/ exceptional items) [12] 7612 5966 5414 5466 4861 4560 4454 4699 6667 4905 63813 74612 15 LARSEN & TOUBRO Integrated Annual Report 2021-22 | STANDALONE FINANCIALS - 10 YEAR HIGHLIGHTS Description crore Ind AS [11]. IGAAP [11]. 2020-21 2019-20 66301 2018-19 2017-18 2015-16 2014-15 2013-14 2012-13 [8] [9] Statement of Profit and Loss Gross revenue from operations [1] 101000 87255 82384 82287 2016-17 LARSEN & TOUBRO 4169 exceptional items) 11990 10561 10558 13924 12936 11459 8478 87412 86212 77960 25785 62038 56571 56059 50021 45121 37769 Capital employed Ratios and statistics PBDIT as % of net revenue from operations [1][3] 8.97 59735 Profit after tax (including extraordinary/ 24474 29291 7879 11798 6679 7491 5387 5454 5000 5056 5493 4384 20298 Balance Sheet Loan funds 67114 61738 52175 50048 49174 46013 42135 37085 33662 Net worth Description crore Ind AS 12.80 9.91 12.13 13.71 16.47 Gross Debt: Equity ratio 1.29:1 1.51:1 1.85:1 1.81:1 14.12 1.79:1 1.87:1 2.21:1 2.13:1 1.85:1 Basic earnings per equity share (*) [7] 61.71 82.49 68.04 63.51 52.62 1.75:1 43.20 15.35 16.25 11.23 11.34 11.40 10.18 10.35 12.24 12.60 13.33 PAT as % of net revenue from operations [5][1] 14.80 5.54 6.57 6.59 6.16 5.53 4.19 5.18 5.76 6.99 RONW % [6] 10.95 8.52 11.49 30.32 35.31 [3] Profit from discontinued operations in the year 2020-21, 2019-20 and 2018-19 has been considered as exceptional item. [4] PBDIT as % of net revenue from operations =[PBDIT/(gross revenue from operations less excise duty upto June 30, 2017)]. [5] Profit after tax (PAT) as % of net revenue from operations = [PAT including extraordinary/exceptional items/gross revenue from operations less excise duty upto June 30, 2017]. [6] RONW = [(PAT including extraordinary/exceptional items)/(average net worth excluding revaluation reserve)]. [7] Basic earnings per equity share has been calculated including extraordinary/exceptional items and adjusted for all the years for issue of bonus shares. [8] After considering adjustment for issue of bonus shares during respective years. [9] Dividend for the year 2020-21 includes special dividend of 18.00 per share and final dividend of 18.00 per share. 17 Integrated Annual Report 2021-22 MANAGEMENT DISCUSSION AND ANALYSIS [2] Profit before depreciation, interest and tax [PBDIT] is excluding extraordinary/exceptional items wherever applicable and other income. Economy The financial year 2021-22 was expected to be a year of recovery on the back of normalised resumption of economic activity and improved mobility, post the first COVID-19 wave. On the contrary, the year commenced with the onset of a more virulent second wave, resulting in a record number of infections and high mortality rate. The country witnessed partial lockdowns across different states, as opposed to complete lockdowns during the first wave. With improved vaccination efforts, the economy bounced back faster than anticipated. However, the recovery momentum was once more disrupted due to the emergence of the Omicron variant towards the end of Q3, which fortunately, lasted only for a brief period. The emergence of geopolitical tensions towards the end of the year has however now created new challenges with a sharp rise in commodity prices, leading to a record high inflation and rising interest rates. Despite these turbulences, India's GDP is expected to grow by 8.7% in FY 2021-22, compared to a 6.6% contraction registered in the previous year. India's Union Budget 2022 emphasised on maintaining fiscal deficit near current levels along with a renewed capex thrust. Government capex serves the twin purpose of employment generation and acts as a growth multiplier. Complementing the efforts of the Government, the RBI continues to pursue an accommodative but cautious monetary stance. The tax buoyancy due to improved economic activity could help India to stay adequately prepared to handle the worsening terms of trade arising out of high oil prices. The Government remaining committed to achieve its NIP target and private capex showing early signs of revival, augurs well for economic growth. The surge in domestic demand, improvement in capacity utilization levels and much leaner corporate balance sheets are further indicating a sustained resurgence in the economic output. The IMD's prediction of yet another year of normal monsoon has added to the positive sentiments. With the easing of COVID-19 protocols, consumer confidence and household optimism are also on an uptrend. A robust Rabi output should support recovery in rural demand and pick-up in contact-intensive services should help in further strengthening the urban demand. It is expected that the ongoing geopolitical conflict could impact supply chain dynamics and keep commodity prices elevated for a longer period. Rising interest rates across the world could also impact capital flows into the country. However, India due to its structural reforms and thoughtful fiscal stimulus and monetary support from Government & RBI respectively, is in a better position to withstand the challenges, as in the past. 18 | LEADERSHIP TEAM Indian Economy 34.22 [1] From Continuing Operations in 2020-21, 2019-20 and 2018-19. 8.22 37.69 Book value per equity share (*) [8] 586.52 540.16 475.27 444.67 391.78 358.83 316.20 293.29 Figures for 2015-16 to 2021-22 are as per Ind AS and for earlier periods as per IGAAP and hence not directly comparable. 271.10 Dividend per equity share (*) [8] [9] 22.00 36.00 18.00 18.00 16.00 14.00 12.17 10.83 9.50 244.40 Agents 11.64 PBDIT as % of net revenue from 11258 10730 9929 Profit attributable to Group shareholders (excluding extraordinary/exceptional items) [3] 8572 6965 8894 8144 10463 7151 4470 4547 4911 Profit attributable to Group shareholders (including extraordinary/exceptional items) 8669 11583 9549 8905 5920 7370 11130 15330 IGAAP 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14 2012-13 Statement of Profit and Loss Gross revenue from operations [1] 156521 135979 13641 145452 119862 110011 101975 92762 85889 75195 PBDIT [1][2] 18217 15624 16329 135220 operations [4][1] 6041 4765 123468 132605 141007 125555 107524 93954 88135 90571 80330 62672 Loan funds Capital employed 220525 217251 194756 167629 147735 135208 136479 121221 99185 Ratios and statistics 218842 4233 2653 4999 4902 5206 Balance Sheet Net worth 82408 75869 66723 62375 54904 50217 3179 44180 37712 33860 Non-controlling interest 12966 12052 9521 6826 5201 3564 2893 40909 ◆ Manufacturing / Fabrication Facilities 12 ◆ Engineering & Construction Projects LARSEN & TOUBRO D. K. Sen Whole-time Director & Sr. Executive Vice President (Development Projects) M. V. Satish Whole-time Director & Sr. Executive Vice President (Buildings) J. D. Patil Whole-time Director & Sr. Executive Vice President (Defence & Smart Technologies) T. Madhava Das Whole-time Director & Sr. Executive Vice President (Utilities) S. V. Desai Whole-time Director & Sr. Executive Vice President (Civil Infrastructure) Hasit Joshipura Sr. Vice President & Head Corporate Centre Shrikant Joshi CEO & Managing Director L&T Realty Limited Anil V. Parab Sr. Vice President & Head Heavy Engineering 13 14 Integrated Annual Report 2021-22 | NATIONWIDE NETWORK Chandigarh Rajpura 金鼠 New Delhi Udaipur Sr. Executive Vice President (Energy) Jaipur Subramanian Sarma Whole-time Director & CEO & Managing Director A. M. Naik ▲ Product & Equipment Supply Group Chairman S. N. Subrahmanyan CEO & Managing Director R. Shankar Raman Whole-time Director & Chief Financial Officer Subramanian Sarma Whole-time Director & Sr. Executive Vice President (Energy) D. K. Sen Whole-time Director & Sr. Executive Vice President (Development Projects) M. V. Satish Whole-time Director & Sr. Executive Vice President (Buildings) J. D. Patil Whole-time Director & Sr. Executive Vice President (Defence & Smart Technologies) T. Madhava Das Whole-time Director & Sr. Executive Vice President (Utilities) S. V. Desai Whole-time Director & Sr. Executive Vice President (Civil Infrastructure) Management Integrated Discussion and Analysis Report Statutory Financial Reports Statements | EXECUTIVE COMMITTEE (ECOM) S. N. Subrahmanyan R. Shankar Raman Whole-time Director & Chief Financial Officer Faridabad Corporate Overview Bhopal Kattupalli Chennai Kancheepuram Puducherry Registered Office Campus Power Plant Shipyards Offices Knowledge City Leadership Development Academy ✰ Corporate Technology and Engineering Academy * Construction Skills Training Institutes* +Campus denotes facilities for design and manufacture * Part of L&T's Corporate Social Initiatives Corporate Overview Management Integrated Discussion and Analysis Report Statutory Financial Reports Statements | GLOBAL NETWORK Ahmedabad ★ Offices Guwahati, Kochi This pictorial representation does not purport to be the political map of India. Mysuru Pithampur Jamnagar Coimbatore 用鳯 Vadodara Madh A Mumbai Lonavala Hazira Lucknow Varanasi Ranchi Durgapur Panvel Serampore Kolkata Jamshedpur Bengaluru & Hyderabad Visakhapatnam Vijayawada *Pulicat Talegaon Pune Raipur Nagpur Rourkela Cuttack Bhubaneswar Consultation services; OPD care ✓ ✓ Community Health Centre The Company set up its first Health Centre at Andheri in Mumbai in 1967. At present, L&T has ten Community Health Centres operational at Chennai, Kattupalli, Coimbatore, Thane, Lonavala, Surat, Vadodara, and three Centres in Mumbai. Additionally, L&T also runs artificial kidney dialysis clinics for the underprivileged at its Health Centres in Mumbai, Thane, Vadodara, Surat, and Chennai. L&T Mumbai's Anti-Retroviral Therapy (ART) centre conducts HIV/AIDS awareness camps, provides medical support along with therapy, counselling, and testing. Comprehensive TB related treatment is provided in Mumbai including individualised treatment OPD, check-up, diagnostics, medicines and nutrition support, home visits and counselling. The Health Centre in Mumbai provides infertility treatment services free of cost for the underprivileged communities. The Company also has a well-equipped child guidance clinic in Mumbai in addition to parent counselling. Major services offered are: HEALTH The Library Programme was implemented in the 260,295 community to ensure that the children get access to quality reading material in various languages namely, Marathi, Hindi, and English. During the pandemic, e-books were distributed, followed with the physical distribution of books in the community and creating library groups, containing 5-6 children. The staff also conducted learning activities to improve the learning outcomes of children. Discussion and Analysis Report Statements Reports Low risk and specialised surgical services Financial LARSEN & TOUBRO beneficiaries through our education interventions this year ✓ ✓ Reaching out to unreached population /linking them to other health services ✓ • Provided intensive training to 300 women volunteers this year in comprehensive Breast Cancer Control Statutory • Initiated in the year 2016-17 by Malabar Cancer Care Society Breast Cancer Brigade Project (BCB) in Kannur, Kerala Case Study ✓ Health promotion and camps ✓ Dialysis services ✓ Counselling ✓ Geriatric care ✓ Health education and promotion ✓ Primary health/medical care at the doorstep Mobile Medical Unit Diagnostic services ✓ Day care and inter-patient department Intensive Care Unit Integrated Community-level STEM Model-making sessions: The project team carried resources on field and conducted STEM model-making sessions with students. 2,294 students from four locations who did not have proper internet connection/ smartphones were reached out. All the models were aligned with the online classes going on in Science and Math. Corporate Overview RED Integrated Annual Report 2021-22 189 Since 2019, L&T has introduced a STEM (Science Technology Engineering Math) Education Project called 'Engineering Futures' (EF). Operating in resource-poor Government schools around four campus areas in Vadodara, Hazira, Chennai and Faridabad. This programme helps teach Science and Math through hands-on models and digital content for better comprehension, while encouraging curiosity and scientific rigour among the students of these schools. Each school is equipped with a computer centre as a dynamic educational laboratory that builds the capacity of teachers to utilise technology and empowers students with practical digital literacy skills. 'Engineering Futures'- L&T's STEM Education Programme Once the schools reopened, most of our education projects initiated a blended approach of teaching and learning, where both offline and online classes were conducted. With this approach, children coming to school and those who preferred to stay at home, were both covered. During and after COVID-19 pandemic Under Nutrition and Health care, the project has initiated work with 10 balwadis at Sewantri in Rajasthan. Through these Balwadis, 241 (121 girls, 120 boys) children were able to get effective care, nutrition, and pre-school education. Due to access to quality nutrition, all severely malnourished children have recovered, and their health has improved. Restoring health of children Intervention: Establish Learning Resource Centres to support the learning continuity of children Impact: Engagement with 263 children through a team of community volunteers, three new Learning Resource Centres launched, 105 children were freshly enrolled, 16,384 library books checked out from these centres Location: Bhim Block, Rajsamand, Rajasthan, Impact: Implemented in 19 schools and six Anganwadi Centres. Aim: Inclusive and quality education for marginalised children aged between 3-18 years Saajhi Shiksha L&T's education programmes are the key to promoting social upliftment and inclusive development in the country. The Company has undertaken a variety of initiatives to provide infrastructure to schools that lack adequate resources. It also strives to improve the quality of instruction and learning for the children. • Model for moulding a healthy community of women population NOTES PRO HI CUAL CAMERA Impact of strategies adopted • Trained 300 EF teachers (100%) equipped with remote learning strategy and methodologies and conducted online classes for students 190 Extra-curricular activities are also conducted to help the overall development of children and also retain their motivation to participate in academic activities. Students are grouped as per their learning levels and progress is monitored through a baseline and end line tests. Community Learning Centres: Provide remedial teaching for the students who have limited opportunities for receiving guidance from their homes. The classes are run after school hours and on weekends in the community areas or in public places like gardens or parks. The sessions are conducted either by trained volunteers or project staff. Pre-school Community Balwadi Centres: Set up in the community to help children become school-ready and create awareness among parents to enrol their children in schools. Providing adequate school infrastructure motivates children to come to school, in turn improving attendance and increasing the students' interest in learning. Building classrooms, separate washrooms for boys and girls, providing books for the library, and improving overall infrastructure of the schools in different CSR locations across India are some of the activities that are executed under the School Infrastructure initiative. Strengthening school infrastructure for creating a better learning environment Management Achievement: His idea of a 'Pushing Stand Trolley Wheelchair' as a participant of MANAK was featured in the 39,263 ideas shortlisted by the Department of Science and Technology across the country. An idea can touch many lives • In the national level competition – MANAK Science Awards, conducted by Department of Science and Technology, Govt of India, 198 project ideas from 83 STEM schools were submitted, of which 12 ideas got selected and were awarded 10,000 for developing their prototype • 17,158 (100%) parents gave feedback on the remote learning experience and encouraged children to participate in the project 7,555 (44%) students who do not have access to smartphones were reached out through community visits and worksheets • • 4,852 (30%) students were able to perform STEM activities • 9,603 (56%) students participated in the remote learning programme Name: J. Subash, part of the Engineering Futures Programme • Location: Kolkata • Conducted 183 free specialised clinics for women reported to have symptoms based on BSE (Breast Self- Examination) and recommended necessary cases for Mammography test 193 Impact: Encouraging self-employment among women by introducing various skill development programmes like tailoring, embroidery etc. EDUCATION Self-employment thought Self-development Name: Initiative DAWN Case Study L&T-ites volunteered to reach more than 12,800 people, clocking more than 37,119 volunteering hours. 4,900 L&T-eering: Employee volunteering initiative L&T-eers continued to engage with children and youth through virtual means - teaching, mentoring, reading out stories, building life skills, conducting educational quizzes, support with sessions on psycho-social care and awareness sessions on environment, sanitation, safety and other issues. L&Teers worked towards mentoring 6th-8th grade children in rural schools to create Science Technology Engineering Math (STEM) models for state level competitions. Several environment related activities included tree plantations, cleanliness drives and creation of artificial nest boxes installed at public gardens and parks were undertaken. Blood donation is part of the L&T heritage and this year 18,474 units of blood was donated. In FY 2021-22, the centre has had 125 students and successfully provided basic training to 74 unique beneficiaries of which 34 are women (46%). While out of the 51 advance batch trainees, 23 (45%) got placed with various employers. Multi Skilling Training Centre (MSTC) at Vizag MSTC is a skill-building Centre established by L&T under its CSR initiatives for actively bridging the gap between vocational education and industry needs. The centre helps in improving the employability of fresh ITI technicians, by providing structured skill training by L&T qualified trainers. MAHE Impact: Presently appointed as Site Supervisor of rebars with a salary of 18,000+ CSTI for 3 Months Intervention: Introduced to financial difficulties Integrated Annual Report 2021-22 RELATIONSHIP CAPITAL We have always laid emphasis on building enduring bonds of trust with our stakeholders. These include customers, shareholders, employees, bankers, business partners, Central and State Governments and the communities we interact with. We believe that enduring relationships with all stakeholders provide us with insights that help us review and progressively refine our strategies to create long-term value for all. Shareholders and investors GIC India 1.8 Fidelity Investments 1.8 ICICI Prudential Mutual Fund 1.8 NPS Trust (India) higher education due to 2.3 GIC Singapore 2.5 11.9 Sum of % Equity LIC Investors We follow a policy of engaging with all stakeholders regularly and keep them informed of evolving developments in the organisation. Our objective is to gain insights into their perspectives, get clarity on 'pain points' and craft the way forward collaboratively. Our institutional investors include: HDFC Mutual Fund Specialised free breast examination clinics organised at three locations at Kannur Challenge: Could not pursue Farmer's son to Site Supervisor SKILL DEVELOPMENT Covid Vaccination camps were also held at three health centres with public private partnership model benefitting 47,910 beneficiaries Through Blood donation camps, 18,474 blood units were donated to various blood banks across L&T locations. Health camps held at remand homes and orphanges ROSI RENATALERO LIMITED BLOD NATION CA OOD BHUBANESWAR BLOOD LARSEN & TOUBRO Integrated Annual Report 2021-22 191 • 5,515 women benefitted • Conducted four village-level specialised camps involving Mobile Tele-Medicine unit with facilities of Mammogram, USG, X-ray, Laboratory, etc. In L&T's endeavour to achieve inclusive growth, it provides vocational training courses and other skill building activities to provide uneducated youth with wage-earning skills. L&T's Construction Skills Training Institutes (CSTIs) in different parts of the country, provide free-of-cost training in skills like bar bending, formwork carpentry, masonry, scaffolding, welding, and electrical wiring, etc., to rural and urban youth. With an emphasis on technology and innovation, new technology- based skill-training courses are introduced in Solar PV Technician skills, OFC & CCTV installation and maintenance. Training programmes are conducted at nine CSTIS operational at Kancheepuram and Pulicat in Tamil Nadu, Panvel in Maharashtra, Pilkhuwa in Uttar Pradesh, Jadcherla in Telangana, Cuttack in Orrisa, Attibelle in Karnataka, Chacharwadi in Gujarat and Serampore in West Bengal. Industry-oriented training: L&T has collaborated with 27 Industrial Training Institutes (ITIS) across the country. Empowering the differently-abled: L&T's 'Project Neev' initiative enriches the lives of the differently-abled by offering specially-designed training programmes. 6,897 rural and urban youth, along with women and physically challenged persons from underprivileged communities, are being imparted skills that will improve their employability 14,587 Vocational training for women: L&T introduced vocational training programmes in the areas of tailoring, beautician skills, home-nursing and food processing for women from underprivileged communities. Discussion and Analysis Report Statements Reports LARSEN & TOUBRO Name: Mr. Somnath Financial Integrated Management Corporate Overview 192 of enrollees were employed 63% youth completed various courses at L&T's CSTIS Statutory परियोजना "अपना पुस्तकालय 1.7 Resource centres LARSEN & TOUBRO KEY HIGHLIGHTS OF FY 2021-22 28% 1 PAT GROWTH 62% INTERNATIONAL ORDER INFLOW GROWTH STRATEGIES IMPACTED SO-I SE-3 SO-II SO-III SO-IV SO-V SDGS IMPACTED KEY MATERIAL ISSUES IMPACTED – Customer Experience and Satisfaction - Corporate Governance Statements Reports Report Discussion and Analysis 10.JHARNET 2.0 (Government of Jharkhand) 11.Early Warning Dissemination System (EWDS) helped Odisha and Andhra Pradesh Governments during Cyclone Yaas Aerospace Manufacturing shops for space launch vehicles at Powai and Coimbatore 195 196 Integrated Annual Report 2021-22 - Business Ethics FINANCIAL CAPITAL S = - Corporate Overview Management Integrated Statutory Financial L&T's financial capital helps it create a solid foundation. The Company has created a strong balance sheet with strong linkages to economic growth that can help India reduce external dependencies and enhance self-reliance. L&T has judiciously managed its capital structure, helping the Company to counter risks effectively. Despite the size of its business, L&T has been able to maintain growth. Financial prudence has helped the Company navigate its way through the challenging period of the COVID-19 pandemic. 9. BBNL (Bharat Broadband Network) Bharat Net Project [High speed internet connectivity in rural Maharashtra] - Talent Management-Attraction, Retention & Development · Data Security, Privacy, and Cyber Security Dividend4 12.23% Return on Net worth L&T's standalone financials reflect the performance of businesses like Infrastructure, Hydrocarbon, Power, Heavy Engineering, Defence Engineering and others. The 'others' segment consists of Realty, Construction & Mining Machinery, Rubber Processing Machinery, Smart World & Communication and Digital Businesses. During the financial year, L&T Hydrocarbon Engineering Limited, a wholly-owned subsidiary company was merged with the Company pursuant to approval of the Scheme of Arrangement from National Company Law Tribunal, Mumbai Bench (NCLT) with the appointed date of April 1, 2021. Financials for FY 2021-22 are consequent to the merger and previous year's figures have accordingly been regrouped. 2 Including Exceptional item 3 Including ROU assets 4 For FY 2021-22 198 Key highlights of FY 2021-22: • Order Inflow achieved, basis robust growth in international orders ~62%. • Revenue growth of 16% reflects progress achieved on execution of robust Order Book. • PAT from continuing operations (excluding exceptional items) registered a substantial growth of 28%. Besides revenue growth, higher dividend from Subsidiaries coupled with lower interest cost on reduced borrowings, facilitated the growth. • The Board of Directors has recommended a final dividend of 22 per equity share for the approval of shareholders - an increase of 22% per share over the previous year. • The margin remains stable notwithstanding the headwinds faced from increasing commodity prices. Opening a Community Learning Resource centre has been one of the key interventions of Saajhi Shikshas' after COVID-19. The project, in collaboration with the Rajasthan State Commission for Protection of Child Rights, launched a helpline number in the name of 'UMEED' to provide psycho- social care to the children and parents of the community. With the aim of reducing mental stress and providing proper psychological care, the project team linked children and parents on the UMEED helpline platform. In the initial six months of FY 2022, about 300+ parents and children have been able to connect and benefit from the UMEED helpline. *30.91 Bn PAT² Turnover *1,010.00 Bn - Quality of Products and Project Delivery - Brand Management - Social Engagement & Impact 1 Excluding Exceptional items and Discontinued operations 197 Integrated Annual Report 2021-22 Input Metrics - Climate Action *3,155.67 Bn *344.50 Bn Net Current Assets *96.96 Bn Net Fixed Assets³ 0.3x Gross Debt to Equity ratio Output Metrics Order Book 8. Jhansi Smart City *78.79 Bn 6. Moradabad Smart City SBI Life Insurance Nippon Mutual Fund *1,019 Bn Value distributed in FY 2021-22 Customers ////// Our constant endeavour is to provide our customers with a superior experience at every stage of their association with us. Innovation - across products, projects, processes and customer servicing - enables us to create value that can set a benchmark for the industry to emulate. Some of our major clients include State and Central Government departments, ministries, and local municipal bodies as well. We engage with our customers regularly through various modes of communication to get their feedback and suggestions and understand their requirements. Our Customer Satisfaction Score is 89% during FY 2021-2022. Further details have also been provided in BRSR Principle 4-Q2 and Principle 9. Suppliers and contractors At L&T, our focus is on maintaining and enhancing our relationships with suppliers, contractors and service providers to drive mutual growth. These include raw material vendors, machine suppliers and contract workers. We engage with them regularly through partner meets. We have established an e-procurement model for paperless buying and an e-tendering system is used for information flow and reverse auctioning. We trained more than 5 lakh vendors, dealers, sub-contractors and workers in FY 2021-2022. Our Code of Conduct has been revamped and includes compliance with environmental regulations, health and safety, labour practices, human rights, ethical behaviour and transparency in business processes. As at March 31, 2022, around 65,000 vendors have signed the Code of Conduct (CoC). Suppliers are assessed based on their environment and social performance during vendor registration and on- boarding. Further details have also been covered in BRSR Principle 5 and 6. Government We work closely with the Government of India as well as local governments during the regular course of our operations. We abide by the laws of the land and compliance is non-negotiable. With several international associations, we participate in national and international policy formulation and economic forums. We also participate in several Government schemes to help enhance the lives of the communities we work with. 194 Corporate Overview Management 1.0 1.0 1.0 Franklin Mutual Fund Institutionalising Community Learning L&T continued to support interventions that aimed at enhancement of education and health services in the same locations to further improve the quality of people's lives. 7. Patna Smart City Enhancing quality of life LARSEN & TOUBRO Statutory Financial Reports Statements Integrated Report Integrated Discussion and Analysis Management 1.6 SBI Mutual Fund ICICI Prudential Life Insurance 1.3 Kotak Mutual Fund 1.2 Overview Discussion and Analysis Corporate Statutory Financial Reports Statements • National Family planning Programme: Contraceptive services made available at L&T Health Centres • Integrated Child Development scheme: Improving quality of services at Anganwadi and capacity building of anganwadi workers National Skill Development Mission • National Skill Development Mission- L&T CSTI and Skill Development Academy (SDA) at Madh • Sarva Shiksha Abhiyan (SSA) - Community pre school programmes and community learning centres preventing dropouts and ensuring enrolment • Revised National TB Control Programme (RNTCP) at L&T TB Centre at Andheri • STEM Initiative of National Science and Technology Communication Council and the Department of Science and Technology, Government of India- STEM Education Programme-Engineering Futures The Smart World & Communication business leverages its technical prowess to solve problems through smart, scalable solutions for security, urban services, traffic, transportation, utilities and digital connectivity. 1. Hyderabad City Surveillance and ITMS project 2. Vizag Smart City 5. Raipur Smart City Report 4. Mumbai City Surveillance 3. Prayagraj Smart City Interventions during the year include: • National AIDS Control Programme (NACP), L&T ART centre at Andheri National Smart Cities Mission • In FY 2022, we have sourced materials from 2,615 MSME suppliers Major Government programmes we are associated with: LARSEN & TOUBRO • Local sourcing of products and services • Our Defence Engineering business collaborates extensively with the Government Make in India Swachh Bharat Abhiyan •⚫3,611 household toilets constructed under ICDP from 2017-18 using local skills and materials • Community-based monitoring committees ensured that these villages became open defecation free ⚫855 school toilets constructed from 2015-16 •27,000+ children trained in using toilets, cleanliness and hygiene from 2015-16 • Swajal Yojana under Rural Development Ministry: Water shed development programme under ICDP • National Rural Livelihood Mission (NRLM): SHG programme under ICDP Pradhan Mantri Krishi Sinchayee Yojana: Accelerated Irrigation Benefit Programme- Drip irrigation in ICDP National Health Mission - 196-199 158-167, - Construction Skills Training Institutes for skilling youth Focus on 'Make in India' initiatives to create employment opportunities and import substitution - Merit-based hiring with emphasis on equal opportunities 168-177, 178-195 Established policies to empower employees irrespective of gender, age, disability, race and religion Reduce inequality within Resilient infrastructure creation and sustainable industrialisation for our clients, through our offerings i.e. green product and service portfolio Embolden automation with focus on application for patents/Intellectual Property Rights (IPR) to 148-157, inspire innovation 178-195, 196-199 REDUCED INEQUALITIES 10 infrastructure, promote inclusive and sustainable industrialisation and foster innovation Build resilient 168-177, Page number(s) - Empowering workforce through learning, development and welfare initiatives - Television and digital media workshops for youth empowerment - Certified computer courses for students - Skilling youth through training institutes and among countries Transform fresh ITI candidates to multi-skilled workers - Training rural youth in ethno-veterinary care and Natural Resource Management Make cities and human ALL PRODUCTION - Encouraging participation of vulnerable groups like women and the deprived in rural development committees of developmental projects supported by the Company Fairness in distribution of resources within villages under ICDP to circulate the benefit to vulnerable communities Statutory Financial Reports Statements - Employable skill training and placements for youth from underprivileged communities, physically and mentally-challenged persons Integrated Report Management Discussion and Analysis Corporate Overview 202 - Multi-cropping among farmers on increase - Discouraging plantation of water-intensive crops, use of indigenous pesticides, seed treatment, balanced dose of fertilisers Ensure sustainable consumption and production patterns We proactively utilise flash granular blast furnace slag and crushed sand in our construction projects and recycled steel wherever permissible. - Our cumulative energy conservation over the years is more than 400,000 GJ. 136-147, 148-157 settlements inclusive, safe, resilient and sustainable - Implement material conservation initiatives, energy efficiency advancement projects and sustainable production practices - Promoting climate resilient and sustainable agricultural practices, reducing the input cost of crops and increasing the yield by promoting organic methods of cultivation. Sustainable ICD Programme for water-stressed rural settlements 12 136-147, 158-167 - Garden maintenance in cities and flood relief interventions Road barricades and guards to control traffic areas around project sites, especially busy junctions in the city, along with road safety awareness campaigns Offer specialised turnkey GIS-based network management solutions for city surveillance, traffic monitoring and analysis Create comprehensive and smart technology solutions for critical infrastructure, spanning airports, power plants, metro rail and IT parks Prioritise needs of marginal and poor farmers in rural development programmes - - - - TIMEAUTEN Initiatives -Specific interventions to integrate children at risk of dropping-out and out-of-school children into school Promote inclusive and sustainable economic growth, full and - Making water available to doorstep and drudgery reduction initiatives · Mitigating digital divide by providing digitally-enabled devices to the underprivileged children or visiting students at their homes to provide study material in print form Prepare indigenous students for admission to various public schools - - Community-based learning centres with parental involvement to prevent dropouts and prepare children for Board exams - Life skills and extra-curricular activities for overall development of students - Promoting girl child education - Enhancing curriculum and impacting classroom learning through nurturing talent Teacher training programme to impart effective pedagogy - Introducing and strengthening STEM (Science, Technology, Engineering and Math) Education programme in Government schools to unlock scientific and technological potential of children and encourage their curiosity, scientific vigour and creativity. Mini science centres and laboratories to develop interest in science subjects - Making Government schools accessible by providing technology-enabled education (e-learning facilities) School infrastructure development for creating a conducive learning environment, including construction of school sanitation facilities Initiatives sanitation for all management and and sustainable water Ensure availability GAD SANITATION and empower all women and girls Achieve gender equality CEMBER сл Ensure inclusive and quality education, and promote lifelong learning opportunities for all QUALITY EDUCATION Goals LARSEN & TOUBRO Awareness on women's health and menstrual hygiene productive employment and decent work for all Toilet facilities in schools for girls - Creating livelihood opportunities and encouraging entrepreneurship among women through DECENT WORK AND ECONOMIC GROWTH Goals Integrated Annual Report 2021-22 201 sustainable energy for all - Promoting bio-gas plants - Promoting solar agricultural fences in villages Green products and services portfolio for customers - Increasing renewable energy use within campuses and project sites Ensure access to affordable, reliable, 136-147, 148-157 - Providing solar lamps to the underprivileged communities and with back-up for communities and schools - Supporting Swachh Bharat Abhiyan - Sanitation awareness campaigns followed with construction of household toilets and school toilets, to make rural India 'open-defecation-free' - - Training Farmers' Groups in water estimation and budgeting, and to measure water levels and in GIS-based water management Demonstration of rainwater harvesting system in schools and households - Developing community-based groups like Village Development Committees and Farmers' Groups for maintaining the water structures, judicial use of common water resources and ensuring the villages remain open defecation-free - Constructing water harvesting structures with contribution from the community and ensuring their maintenance - - Supplementing water bodies to increase ground water level with participation from communities · Achieving water adequacy for drinking, sanitation and agriculture through watershed projects, 136-147, as part of Integrated Community Development Programmes (ICDP) 178-195 168-177, 178-195 178-195 Page number(s) Formation of women's Self-help Groups (SHGs), ensuring participation and decision making in village development and school management committees across villages skill development, vocational training programmes and market linkages - Motivate parents to encourage girls to participate in STEM activities and exposure visits Goals 142 CLAR 141 305-6 Emissions of ozone-depleting substances (ODS) 132 305-5 Reduction of GHG emissions GRI 305: Emissions 2016 141 305-4 GHG emissions intensity 141 305-3 Other indirect (Scope 3) GHG emissions 141 305-2 Energy indirect (Scope 2) GHG emissions 141 305-1 Direct (Scope 1) GHG emissions 138,142 LARSEN & TOUBRO 142 138, 139, 140 138, 139, 140 140 138, 139, 143, 144 138, 139, 143 196-199 180-193 Page No 196-199 303-3 Water withdrawal 303-5 Water consumption 303-2 Management of water discharge-related impacts 302-4 Reduction of energy consumption 302-3 Energy intensity 305-7 Nitrogen oxides (NOx), sulphur oxides (SOX), and other 302-1 Energy consumption within the organization 141 306-3 Waste generated Integrated Statutory Financial Reports Discussion and Analysis Report Management Corporate Overview 204 180-193 174 169 405-2 Ratio of basic salary and remuneration of women to men 413-1 Operations with local community engagement, impact assessments, and development programs 404-1 Average hours of training per year per employee GRI 413: Local Communities 2016 GRI 405: Diversity and Equal Opportunity 2016 GRI 404: Training and Education 2016 175 175-177 175-177 403-2 Hazard identification, risk assessment, and incident investigation 403-7 Prevention and mitigation of occupational health and safety impacts directly linked by business relationships 403-9 Work-related injuries GRI 403: Occupational Health and Safety 2018 175-177 403-1 Occupational health and safety management system 174 401-1 New employee hires and employee turnover GRI 401: Employment 2016 142 306-4 Waste diverted from disposal GRI 306: Waste 2020 142 significant air emissions 13 301-2 Recycled input materials used 201-1 Direct economic value generated and distributed 203-1 Infrastructure investments and services supported 203-2 Significant indirect economic impacts - In-house guidelines on scientific tree plantation and maintenance Planted 700,000+ saplings in last five years and 150,000+ fully-grown trees are nurtured across major campuses Lake clean-up and reserve forest clean-up drives alongside de-silting of water bodies - - - Village level committee to regulate the use of common resources Rainwater harvesting in schools and households - Building soil conservation to prevent soil erosion in the ICD programme Protect, restore and promote sustainable use of terrestrial ecosystems, manage forests, combat desertification, and halt land degradation and biodiversity loss ON LAND 15 resources for sustainable development Conserve the oceans, seas and marine 136-147 148-157 136-147, Page number(s) Evaluate business process risk to ensure that negative impacts are avoided / minimised /controlled - Alignment with National Action Plan on Climate Change (NAPCC), Government of India - Building capacity of communities to address climate change and its impact - Minimising or avoiding use of chemical fertilisers and preventing degradation of soil quality - Discourage over-exploitation of ground water Measurable targets for reducing energy and carbon intensity at campuses and project sites Carbon footprint mapping at the organisational level - Climate change mitigation and adaptation initiatives: GHG intensity reduction projects, promoting the use of renewable energy, green buildings and tree plantation Initiatives LIFE 14 Take urgent action to combat climate change and its impacts Felicitation of guests with a Tree Certificate, instead of a floral bouquet - planting a tree for each certificate 301-1 Materials used by weight or volume - Optimising the use of natural resources 16 Disclosure GRI 303: Water and Effluents 2018 GRI 302: Energy 2016 GRI 301: Materials 2016 GRI 203: Indirect Economic Impacts 2016 GRI 201: Economic Performance 2016 GRI Standard This Integrated Report is aligned to the GRI Standards and the mapping is as follows: | GRI CONTENT INDEX Integrated Annual Report 2021-22 203 178-195 - Collaboration and partnership with state and national Governments, NGOs and ITIS - Sharing best practices with stakeholders - Associating with industry forums and Government bodies for promoting sustainable development Encourage democratic functioning and financial transparency in conduct of SHG business 136-147, 178-195 - Village level committee and democratic process formulated for maintenance, usage and monitoring the sustainability of ICDP interventions 136-147, 158-167 sustainable development associations for and revitalize global of implementation Strengthen the means PARTNERSHAPS 17 Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective as well as accountable institutions at all levels AND STRONG INSITUTIONS - Afforestation by creating fast-growing sustainable forest Statutory Financial Reports Statements 2021-22 Management Discussion and Analysis Verification of sample data to check accuracy and reliability for a limited level of customised verification through interaction with data owners. Conclusions In our opinion, on the basis of limited level of verification undertaken and mutually agreed scope of work, nothing has come to our attention that would cause us not to believe that the data verified as listed in Annexure - 1, is not a reliable and accurate representation of L&T's selected performance data. Some of the data inaccuracies identified during the verification process were found to be attributable to transcription, interpretation and aggregation errors, and the errors have been communicated for correction and corrected. Project No.: PRJN-375518 Page 2 of 4 Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial Reports Statements LARSEN & TOUBRO Our Competence and Independence - DNV applies its own management standards and compliance policies for quality control, in accordance with ISO IEC 17021:2015 Conformity Assessment Requirements for bodies providing audit and certification of management systems, and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. We have complied with the DNV Code of Conduct² during the assurance engagement and maintain independence where required by relevant ethical requirements. This engagement work was carried out by an independent team of sustainability assurance professionals. We were not involved in the preparation of any statements or data included in the BRSR except for this Assurance Statement and Management Report. DNV maintains complete impartiality toward stakeholders interviewed during the assurance process. We did not provide any services to L&T and its subsidiaries in the scope of assurance for the reporting period that could compromise the independence or impartiality of our work. For DNV Business Assurance India Private Limited, Radhakrish Digitally signed by nan, Kiran Kiran Radhakrishnan Lead Verifier Radhakrishnan, Kiran Date: 2022.07.08 13:32:56 +05'30' DNV Business Assurance India Private Limited, India. 8th July 2022, Bengaluru, India Digitally signed by Vadakepatth Vadakepatth, Review of systems and procedures for data collection and aggregation, that is, the calculation methodology, assumptions of the selected consolidated sustainability performance data (Annexure-1) prepared for the Company's internal reporting purposes and to be included in the BRSR which forms part of its Annual Integrated Report. Assessed the robustness of the data management systems, data accuracy, data flow and controls for the reported sustainability performance data, as well as the processes for data consolidation in context to the principle of Completeness as per DNV's VeriSustain. Nandkumar Review of the data management processes that L&T has in place to report the identified sustainability data. We examined and reviewed supporting evidence such as supporting documents, secondary data and other information made available by L&T to us. Carried out online and on-site verification for sample ICs of the Company - (i) Buildings and Factories, (ii) Transportation Infrastructure, (iii) Heavy Civil Infrastructure (iv) Power Transmission and Distribution, (v) Water and Effluent Treatment, (vi) Minerals and Metals, (vii) Energy Hydrocarbon, (viii) Energy Power, (ix) Heavy Engineering, (x) Defence, (xi) L&T Realty, and, (xii) Smart World and Communication and offices (Chennai Office Campus, Leadership Development Academy at Lonavala, AMN Tower, L&T House, and Knowledge City) to review the processes and systems for preparing site level sustainability data and implementation of sustainability strategy. DNV was free to choose sites for conducting our sustainability performance data verification. • - 303-3 Water withdrawal and 303-5 - Water consumption from GRI 303: Water and Effluents 2018; • 306-3 Waste generated from GRI 306: Waste 2020; • • • • 307-1 Non-compliance with environmental laws and regulations from GRI 307: Environmental Compliance 2016; 403-9 Work-related injuries from GRI 403: Occupational Health and Safety 2018, and number of safety training hours; Number of permanent employees (male and female); and, number of corporate social responsibility (CSR) beneficiaries, and CSR expenditure. for disclosure in the Business Responsibility and Sustainability Report of its Annual Integrated Report of FY 2021-22. Our engagement has been carried out based on DNV's assurance methodology VeriSustain™¹, (customised verification procedure) as mutually agreed with L&T for the performance data detailed in Annexure 1 and provides a limited level of verification while applying a ±5% materiality threshold for errors and omissions. The intended user of this Verification Statement is the management of the Company (the 'Management'). The team is responsible for all data as well as related assumptions and calculation methodologies as information provided to us for verification, as well as the processes for collecting, analysing and reporting the sustainability performance data in its BRSR as part of its Annual Integrated Report. Our verification engagement is based on the assumption that the data and information provided to us is complete and true and free from material misstatement. We expressly disclaim any liability or co-responsibility for any decision a person or entity would make based on this verification statement. This exercise was carried out during April 2022 - July 2022 by a team of sustainability professionals of DNV. Scope, Boundary and Limitations of Verification The scope of the verification includes the identified sustainability performance data (detailed in Annexure 1) for the selected boundary of L&T and its twelve (12) Independent Companies (`ICs') in India for the period 1st April 2021 to 31st March 2022 as indicated in the BRSR, in - 1 The VeriSustain protocol is based on the principles of various assurance standards including International Standard on Assurance Engagements 3000 (ISAE 3000) Revised (Assurance Engagements other than Audits or Reviews of Historical Financial Information) and the GRI Principles for Defining Report Content and Quality, international best practices in verification and our professional experience; and is available on request from www.dnv.com Project No.: PRJN-375518 Page 1 of 4 205 Integrated Annual Report 2021-22 206 accordance with the scope of work agreed upon with the management of the Company including the sampling plan to arrive at our conclusion. During the verification process, we did not come across limitations to the scope of the agreed verification engagement. This verification engagement did not involve any engagement with external stakeholders. The verification was conducted based on desk reviews, site visits to sample ICs, interactions with data owners and other publicly available data made available to us. The review of management approach and other qualitative disclosures was not carried out as part of this engagement. The verification of reported data on expenditure towards CSR activities is not within the scope of our verification exercise as a separate audit is carried out by L&T's statutory financial auditors and reported in L&T's Annual Integrated Report. Verification Methodology During the verification, we adopted a risk-based approach, and a sample-based verification was carried out for a limited level of verification as per DNV VeriSustain and as agreed with L&T. We undertook the following activities: • 302-1 - Energy consumption within the organization from GRI 302: Energy 2016; 305-1 Direct (Scope 1) GHG emissions, 305-2 Energy indirect (Scope 2) GHG emissions, and GRI 305-3; Other indirect (Scope 3) GHG emissions from GRI 305: Emissions 2016; Nandkumar Date: 2022.07.08 Vadakepatth Nandkumar 889.063 Τ 615,035 T 274,028 T 0.93 T 4,976,909 CO2e Scope 3 (Cat-1: Purchased goods and services, Cat-5: Waste generated in operations {solid waste}, Cat-6: Business travel and Cat-7: Employee commute) Water Water Withdrawal - Total Water Withdrawal - From river / lakes Water Withdrawal - From municipal sources Water Withdrawal - From rain water Water Withdrawal – From ground water Σ Σ Σ Σ M3 9,602,372 M³ 2,001,310 M³ 1,369,437 M3 KT 13:36:39 +05'30' 1,281,464 8,365,802 Technical Reviewer DNV Business Assurance India Private Limited, India. DNV Business Assurance India Private Limited is part of DNV - Business Assurance, a global provider of certification, verification, assessment and training services, helping customers to build sustainable business performance. www.dnv.com 2 The DNV Code of Conduct is available on request from www.dnv.com (https://www.dnv.com/about/in-brief/corporate-governance.html) Project No.: PRJN-375518 Page 3 of 4 207 Integrated Annual Report 2021-22 208 Annexure 1: Verified Performance Data · - 2021 - 22 Environmental Compliance Environmental Regulatory Non-Compliances Resulting in Fines or Prosecutions Energy (Renewable) Indirect energy consumption Energy (Non Renewable) Direct energy consumption (1) CO2e - Total CO2e Scope 1 CO2 - Scope 2 N2O Scope 1 No. of cases GJ 2 (Transportation Infrastructure IC) 127,129 GJ GJ - - • - Encouraging entrepreneurship among youth, women and differently-abled through training and promoting Self Help Groups (SHGs) - Skilling programmes for youth and migrant labour enables higher wage-earning capacity Vocational, life skills training and job placements for skilled youth, women and differently-abled Initiatives sustainable agriculture End hunger, achieve food security, improve nutrition and KINGS 2 End poverty in all its forms POVERTY ON Goals SDGs define global priorities and aspirations for 2030, with objectives to achieve conservation and ecological balance. The following demonstrate our alignment with SDGs and our initiatives towards climate change mitigation, environmental conservation and corporate social responsibility. GOALS (SDGs) | SUSTAINABLE DEVELOPMENT Integrated Annual Report 2021-22 199 37.61 42.45 Economic Value Retained 1.57 1.32 Community investments (CSR spend) 53.41 54.36 Payments to exchequer 25.286 30.91 - Increased agricultural income and multi-cropping due to water adequacy Dividend - Created agro-based livelihood, increasing household incomes Formation of farmer's groups and market linkages for better crop prices - Encouraging sustainable agricultural practices by use of zero budget natural farming, drip irrigation, indigenous pesticides, seed treatment, balanced dose of fertilisers, discouraging plantation of water-intensive crops, and introducing horticulture through farm field schools and demonstrations. Corporate Overview Welfare teams at the workplace - Health infrastructure strengthening during the COVID-19 pandemic Integration with national health programmes - Infrastructure support to Anganwadis, PHCs and Hospitals - Training of frontline healthcare workers Blood donation camps Care and counselling programmes for differently-abled children Health awareness for adolescents Mobile health vans and camps for school children, women and elderly from underprivileged communities Health centres offering mental health services, child- guidance clinic and counselling - 178-195 168-177, – Multi-specialty community health centres providing access to maternal, family welfare, paediatric and general healthcare 200 Ensure healthy lives and promote wellbeing of people of all ages 136-147, 178-195 178-195 148-157, 158-167, 168-177, Page number(s) Provide food and ration in disasters and crisis situations Livestock management and training in dairy and poultry business - Supplementary multi-vitamins / milk at Anganwadis/schools - Promoting low-cost backyard nutrition gardens and recipe demonstration in rural communities; training households in incorporating traditional millets and locally-available low-cost nutritive foods in everyday meals - Addressing malnutrition among children by providing services related to education of mothers, prevention, early detection and treatment Nutrition awareness campaign and counselling for women, pre-school teachers and school children from the community - Training communities in better nutrition practices 23.82 17.54 Interest FY 2020-21 841.21 1.32 54.36 73.91 17.54 30.91 FY 2021-22 Value Distributed 927.09 FY 2020-21 1,061.71 FY 2021-22 Value Generated Economic value generated and distributed [in \ Bn] Statements LARSEN & TOUBRO Statutory Financial Reports Discussion and Analysis Report Integrated Management Corporate Overview Independent Verification Statement LARSEN & TOUBRO Introduction DNV Business Assurance India Private Limited ('DNV') has been commissioned by the management of L&T Limited ('L&T' or the 'Company', Corporate Identity Number: L99999MH1946PLC004768) to carry out an independent customised verification of selected sustainability performance data related to Energy and Greenhouse Gas Emissions, Water, Waste, Occupational Health and Safety, Employees, and Corporate Social Responsibility. These performance datasets have been prepared by L&T using topic-specific Standards from the Global Reporting Initiative ('GRI) Standards ('GRI Standards'), that is, • 53.41 1.57 721.50 25.286 Payments to providers of capital 63.88 73.91 Employee wages and benefits operating expenses 721.50 841.21 Manufacturing, construction and 927.09 1061.71 Economic Value Generated 2020-21 Description Integrated Report 6 FY 2020-21 excludes special dividend 37.61 FY 2020-21 42.45 FY 2021-22 = Value Retained Value Generated - Value Distributed Community investments (CSR spend) Payments to exchequer Interest Employee wages and benefits Manufacturing, construction and operating expenses Dividend 63.88 23.82 5 Excluding Exceptional items and Discontinued operations Indirect energy consumption (2) Greenhouse Gases (3) | ASSURANCE STATEMENT M³ Employees Number of permanent male employees No. of cases 1,154,859,499 161,946 8,769 No. of cases Hours 37,674 4,969,092 Number Number of permanent female employees Number of beneficiaries impacted Number of safety training hours Number CSR Expenditure Number Crore INR 1,127,544 136 Note 1: Direct energy: Consumption is reported based on amount of fuel procured and not consumed as required under GRI topic-specific standard 302-1. L&T assumes that procurement = consumption. Note 2: Indirect energy: In case of certain ICs (Smart World and Communications, and Building and Factories) amount of indirect energy consumed is calculated by the cost of total grid electricity consumed divided by an average unit cost decided by each IC. Note 3: Emissions due to SF6 and CH4 are not monitored and reported. Types of Ozone Depleting Substances have not been reported by type (HFC, CFC). Note 4: Hazardous and non-hazardous waste classification are not carried out based on types (solid and liquid) as required under GRI topic-specific Standard 306-3. Note 5: Reporting on Occupational Health and Safety covers entire workforce covering permanent employees and on-contract workers. Note 6: CSR amount spent is not within the scope of our verification exercise as a separate verification is carried out by L&T's statutory financial auditors and reported in the Annual Integrated Report. Note 7: Detailed comments on assumptions, methodologies and estimations reviewed as part of DNV's verification are provided in DNV's Management Report. Statements 82,364 42,618 2,997 Number of near miss accidents CSR(6) Days Days 3,251,265 Number of first aid cases Water Withdrawal – From other sources (Tankers) Water (fresh) consumed - Total M3 2,897,996 M³ 9,410,093 Waste(4) Hazardous waste - Generated T - T Non-hazardous waste - Generated Number of man days lost 25 No. of cases Number of fatalities Number of man days worked No. of cases Number of reportable accidents Occupational Health and Safety (5) 2,464 48,995 132 Integrated Products/Services Statutory Financial LARSEN & TOUBRO Reports Statements Management Discussion and Analysis Report II. 14. Details of business activities (accounting for 90% of the turnover): Engineering, Procurement & Construction of Residential Buildings, Factories, Public spaces, Airports, IT Parks, Hospitals, Roads, Railways, Metros, Elevated Corridors, Transmission lines, Renewable projects, Water Supply & Distribution, Industrial Desalination, Sewage treatment plants, Irrigation projects, Hydel power, Nuclear plants, Marine projects, Minerals & Metals process plants and related customized equipment etc. 1 Description of Main Activity Infrastructure Description of Business Activity 2 Hydrocarbon 3 Power Engineering, Procurement & Construction for Hydrocarbon Upstream, Midstream and Downstream projects Engineering, Procurement, Construction for Coal and Gas based power plants 15. Products/Services sold by the entity (accounting for 90% of the entity's turnover): Overview S. No. Corporate 7. Telephone- +91 22 67525656 The Business Responsibility and Sustainability (BRS) initiatives of the Company are extended to the Subsidiary/Associate Companies, and they are also encouraged to participate in these initiatives of the parent organisation. In addition, companies like L&T Finance Holdings Limited, Larsen & Toubro Infotech Limited, L&T Technology Services Limited, Mindtree Limited (Listed entities) have their separate Business Responsibility Report (BRR)/ Business Responsibility & Sustainability Report (BRSR) as a part of the Annual Report. This report is for Larsen & Toubro Limited (L&T) and the reporting scope encompasses L&T's manufacturing locations, project sites & offices across India and overseas. E-mail- infodesk@larsentoubro.com 8. Website- www.larsentoubro.com 9. Financial year for which reporting is being done 1st April 2021 - 31st March 2022 10. Name of the Stock Exchange(s) where shares are listed a. National Stock Exchange of India Limited (NSE) b. BSE Limited (BSE) 11. Paid-up Capital- 281.01 crore 12. Name and contact details (telephone, email address) of the person who may be contacted in case of any queries on the BRSR report S. No 210 Particulars 1. 2. 3. Telephone Number 4. Email ID Details Dr. Pradeep Panigrahi Head-Corporate Sustainability +91 22 61238504 sustainability-ehs@Larsentoubro.com 13. Reporting boundary - Are the disclosures under this report made on a standalone basis (i.e. only for the entity) or on a consolidated basis (i.e. for the entity and all the entities which form a part of its consolidated financial statements, taken together). Name Designation NIC Code 4210 Group Construction and maintenance of railways and rail-bridges 4 422 4220 42201 Construction and maintenance of power plants 42202 Construction / erection and maintenance of power, 4.4% 11.9% telecommunication and transmission lines 42102 42204 42205 connection, water reservoirs including irrigation system (canal) Construction and repair of sewer systems including sewage disposal plants and pumping stations 12.8% 5 429 4290 42901 Construction and maintenance of industrial facilities such as refineries, chemical plants, etc. 17.2% III. Operations 16. Number of locations where plants and/or operations/offices of the entity are situated: Construction and maintenance of water main and line S. No 28.5% 42101 Class Sub Class 1 282 2824 28246 Product/Services Manufacture of parts and accessories for machinery / equipment used by construction and mining industries % of Turnover of the entity 68.5% 17.2% Construction and maintenance of motorways, streets, roads, other vehicular and pedestrian ways, highways, bridges, tunnels and subways 4.4% contributed 4.8% 2 410 4100 41001 Construction of buildings carried out on own-account basis or on a fee or contract basis 10.8% 3 421 6. % of total Turnover 5. Corporate address- L&T House, Ballard Estate, Mumbai, 400 001, India 136-147, 240-248 Year of Incorporation- 1946 No No No No No z z zz zzz 100.0 Subsidiary L&T Hydrocarbon Saudi Company LLC 63 30.0 No Subsidiary 62 Corporate Overview Management Integrated Discussion and Analysis Report Statutory Financial Reports Statements I LARSEN & TOUBRO | UNITED NATIONS GLOBAL COMPACT Larsen & Toubro (East Asia) Sdn. Bhd. Communication on progress No Management 70.0 Subsidiary Larsen & Toubro Heavy Engineering LLC 65 No Does the entity indicated at column A, participate in the Business Responsibility initiatives of the listed entity? (Yes/No) entity % of shares held by listed 70.0 Subsidiary Larsen & Toubro Electromech LLC Corporate Overview 64 Indicate whether Subsidiary/ (A) No. Name of the subsidiary/ associate companies S. LARSEN & TOUBRO Statements Reports Statutory Financial Integrated Report Discussion and Analysis Associate 4. Registered office address- L&T House, Ballard Estate, Mumbai, 400 001, India Principle Category Page 7 8 Environment Businesses should undertake initiatives to promote greater environmental responsibility. 136-147, 240-248 9 Environment 10 10 Anti-Corruption Businesses should encourage the development and diffusion of environmentally friendly technologies. Businesses should work against corruption in all its forms, including extortion and bribery. Location 145 NK 209 Integrated Annual Report 2021-22 Business Responsibility & Sustainability Reporting BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORTING SECTION A: GENERAL DISCLOSURES I. Details of the listed entity 1. Corporate Identity Number (CIN) of the Listed Entity- L99999MH1946PLC004768 2. Name of the Listed Entity- Larsen & Toubro Limited 3. 128, 129, 224 Description 6 128-129, 225, 237, 238, 239 1 Human Rights Businesses should support and respect the protection of internationally proclaimed human rights. 128-129, 225, 237, 238, 239 128-129, 225, 237, 238, 239 2 Human Rights 3 Labour st 4 128, 130, 228 Labour Labour Labour Environment Businesses should make sure that they are not complicit in human rights abuses. Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining. Businesses should uphold the elimination of all forms of forced and compulsory labour. Businesses should uphold the effective abolition of child labour. Businesses should uphold the elimination of discrimination in respect of employment and occupation. Businesses should support a precautionary approach to environmental challenges. 239, 248 128-129, 225, 237, 238, 239 5 National 18. Details as at the end of Financial Year: 17. Markets served by the entity: Key Management Personnel 1 0 5.8% 0% *The CFO and CEO are included in the Board of Directors. Corporate Overview Management Integrated Discussion and Analysis Report Statutory Financial Reports % (B/A) Statements LARSEN & TOUBRO FY21-22 FY20-21 (Turnover rate in current FY) % (Turnover rate in previous FY) % FY19-20 (Turnover rate in the year prior to the previous FY) % Male Female 20. Turnover rate for permanent employees and workers Permanent No. (B) 1 Board of Directors* 4 Permanent (F) 15 15 100% 0 0% 5 Other than permanent (G) 9 9 17 100% 0% 6 Total differently abled workers (F + G) 24 24 100% 0 0% 19. Participation/Inclusion/Representation of women 212 No. and percentage of Females Total (A) 0 DIFFERENTLY ABLED WORKERS 14.3% Total 14.7% (A) Subsidiary/ Associate entity 1 Bhilai Power Supply Company Limited Subsidiary 99.9 Does the entity indicated at column A, participate in the Business Responsibility initiatives of the listed entity? (Yes/No) No 2 Chennai Vision Developers Private Limited % of shares held by listed Subsidiary 3 Kesun Iron and Steel Company Private Limited # Subsidiary 95.0 4 Esencia Technologies India Private Limited Subsidiary 73.9 5 Graphene Semiconductors Services Private Limited Subsidiary 100.0 20.6% ** whether S. No. Male 12.0% Female 13.7% Total 12.1% Male Female Total 11.1% Employees Permanent NA ΝΑ Name of the subsidiary/ associate companies ΝΑ ΝΑ NA ΝΑ ΝΑ ΝΑ Workers* *Turnover rate of permanent workers is not calculated ** Personal reasons (including family related, marriage & relocation), further studies and career prospects account for higher attrition rate in female employees. NA: Data not available V. Holding, Subsidiary and Associate Companies (including joint ventures) 21. (a) Names of holding / subsidiary / associate companies/joint ventures Indicate ΝΑ 10% 5 90% Male Female Total (A) No. (B) % (B / A) No. (C) % (C/A) EMPLOYEES 1. Permanent (D) 45,615 No 42,618 2,997 7% 2. Other than Permanent (E) 6,540 6,299 96% 241 4% 3. Total employees (D + E) 93% 52,155 Particulars a. Employees and workers (including differently abled): a. Number of locations Locations National (No. of States) Number of plants 19 3 Number of offices Total 19 38 50 53 International (No. of Countries) S. * Includes 25 states and 8 UTs (excluding Mizoram, Manipur, Nagaland and Lakshadweep) 33* 53 211 Integrated Annual Report 2021-22 Business Responsibility & Sustainability Reporting b. C. What is the contribution of exports as a percentage of the total turnover of the entity? 19.9 % A brief on types of customers The Company's business is construction of infrastructure and manufacturing of products for industrial uses. Some of its major clients include State and Central Government departments, Ministries, and local municipal bodies as well. IV. Employees No Number 48,917 94% 3,238 No. (B) % (B/A) No. (C) % (C/A) DIFFERENTLY ABLED EMPLOYEES 1 Permanent (D) 2 Other than Permanent (E) 3 Total differently abled employees (D + E) Total (A) 48 37 33 89% 4 11% 11 10 91% 1 9% 43 88 Female Male No 6% WORKERS 4. Permanent (F) 3,307 3,304 99.9% 3 0.1% 5. Other than Permanent (G) 196,755 194,376 99% 2,379 1% 6. Total workers (F + G) 200,062 197,680 99% 2,382 1% b. Differently abled Employees and workers: S. Particulars International 66 Subsidiary Subsidiary Corporate Overview 216 (iii) Net worth (in): 67,114 crore (ii) Turnover (in): 101,000 crore Whether CSR is applicable as per section 135 of Companies Act, 2013: Yes 22. (i) VI. CSR Details @under liquidation # under strike-off process Notes: they have separate BRR/BRSR No Management No No No z z z z z 50.0 Associate 125 Gujarat Leather Industries Limited @ 39.2 Associate 124 Magtorq Engineering Solutions Private Limited 42.8 Associate No 50.0 Integrated Discussion and Analysis Report Financial Statements Remarks Number of complaints resolution pending complaints filed during the year policy)# received Number of complaints (If Yes, then provide web- link for grievance redress complaint is Statutory Reports whom Number of group from Stakeholder FY20-21 Previous Financial Year FY21-22 Current Financial Year Mechanism in Place (Yes/No) Grievance Redressal Conduct: 23. Complaints/Grievances on any of the principles (Principles 1 to 9) under the National Guidelines on Responsible Business VII. Transparency and Disclosures Compliances LARSEN & TOUBRO Number of Associate Larsen & Toubro Qatar & HBK Contracting LLC 123 Magtorq Private Limited 122 zzzz No 74.0 Subsidiary 114 Cuelogic Technologies Private Limited No 74.0 Subsidiary LTI Middle East FZ-LLC 113 No 115 Cuelogic Technologies Inc. 73.9 Orchestra Technology Inc. 112 No 99.0 Subsidiary LTR SSM Private Limited 111 No 100.0 Subsidiary L&T Parel Project Private Limited Subsidiary Subsidiary 74.0 No 50.0 Associate 121 L&T-Chiyoda Limited No 49.0 Associate L&T Camp Facilities LLC 120 No 14.2 Associate International Seaports (Haldia) Private Limited 119 No 50.0 Indiran Engineering Projects and Systems Kish (LLC) Associate 118 No 17.2 Associate 117 Grameen Capital India Private Limited No 51.0 Subsidiary 116 Watrak Infrastructure Private Limited at close of 110 the year complaints pending resolution Health & Safety 5. Engagement, Wellbeing Employee & Workforce 4. R Business Ethics 3. (R/O) risk or opportunity Material issue identified* R S. No. Indicate 218 Integrated Annual Report 2021-22 217 Negative Positive Financial implications of the risk or opportunity (Indicate positive or negative implications) Policy revision/ upgradation/ Board review (Refer to Principle-1) R Corporate Governance 2. whether Customer Experience & Satisfaction Business Responsibility & Sustainability Reporting risk / opportunity Positive/ negative Positive/negative is embedded in its various corporate policies like Environment, Health & Safety (EHS) Policy, Whistle-Blower policy, Protection of Women's Rights at Workplace Policy and the Code of Conduct. Training on various issues related to human rights are covered under new employee induction, EHS training, POSH, code of conduct etc. For more details, refer to Principle 3. Skill based trainings (Nine CSTIs spread across the country train over 10,000 youth in construction and allied skills per year. For further details refer to Principle 3.8 on training given to employees for skill upgradation. Also, refer to chapter on Social & Relationship Capital) Supplier/vendor Code of Conduct (COC) covers EHS and Human Rights parameters to be adhered and supply chain partners must sign the COC as a part of the contract documents. of caring and trust. This O/R 8. Sustainable Supply Chain O/R - Skilled Manpower 7. committed to foster a culture Negative Rationale for identifying the L&T has always been Human Rights & Labour Conditions 6. Negative For more details refer to Principle-3 technological upgradation/ review at senior level and Board committee. L&T is committed to its Zero Harm to life. Training/ awareness/ Positive Negative Financial implications of the risk or opportunity (Indicate positive or negative implications) Whistle blower policy and its deployment. The Company has a whistle blower policy for its employees, vendors and channel partners, for further details refer to Principle-1 In case of risk, approach to adapt or mitigate R - 1. In case of risk, approach to adapt or mitigate Rationale for identifying the risk/ opportunity 50 Yes Customers* workers* 16 26 WI 3 13 Yes Employees and Value Chain I Shareholders shareholders) (other than Yes Investors Communities 3 9 3 - - at close of the year Remarks Yes Yes 56 22 risk or opportunity (R/O) No. Material issue identified* S. Indicate whether Please indicate material responsible business conduct and sustainability issues pertaining to environmental and social matters that present a risk or an opportunity to your business, rationale for identifying the same, approach to adapt or mitigate the risk along-with its financial implications, as per the following format. 24. Overview of the entity's material responsible business conduct issues Customer satisfaction score of 89% in FY22. # The policies guiding L&T's conduct with all its stakeholders including grievance mechanism are available on the company's website. The link to the policies: https://www.larsentoubro.com/corporate/about-lt-group/corporate-policies/ * Data for employees, workers and customers is partially reported. The Company will strengthen its systems for complete coverage in FY23 | | email / letters) (Anonymous 1 6 4 -- Yes Other partners) (supply chain Partners 2 7 1 303 filed during the year Larsen & Toubro Infotech Canada Limited No Subsidiary Nielsen+Partner Unternehmensberater GmbH 83 100.0 Subsidiary 82 Nabha Power Limited 66.2 Subsidiary Mudit Cement Private Limited 81 51.0 Subsidiary Subsidiary LTIDPL INDVIT Services Limited 56.6 Subsidiary LTH Milcom Private Limited 79 75.0 Subsidiary Larsen Toubro Arabia LLC 78 80 ∞ ∞ ∞ ∞ ∞ ∞ ∞ ∞ ∞ ∞ No No 80 No 74.0 No PT. Larsen & Toubro Hydrocarbon Engineering Indonesia 89 37.7 Subsidiary 74.0 Subsidiary 74.0 Subsidiary Nielsen+Partner Unternehmensberater AG Nielsen&Partner Co. Ltd. PNG Tollway Limited 88 87 은은 은은 은은 86 Subsidiary 85 Nielsen+Partner Pte Ltd. No 74.0 Subsidiary 84 Nielsen&Partner Pty Ltd No No No No No 74.0 No z z z z z 51.5 73.9 Larsen & Toubro International FZE 71 74.0 Subsidiary Larsen & Toubro Infotech Norge AS 70 No 74.0 Subsidiary Larsen & Toubro Infotech LLC 100.0 69 74.0 Subsidiary Larsen & Toubro Infotech Limited 68 No 74.0 Subsidiary Larsen & Toubro Infotech Gmbh 67 No 74.0 No* 72 Larsen & Toubro Kuwait Construction General Subsidiary Subsidiary Larsen And Toubro Infotech South Africa (Pty) Limited 77 72.5 Subsidiary Larsen & Toubro T&D SA (Pty) Limited 76 100.0 Subsidiary Larsen & Toubro Saudi Arabia LLC 75 65.0 Subsidiary Larsen & Toubro Oman LLC 74 98.7 Subsidiary Larsen & Toubro LLC 73 Contracting Company, With Limited Liability No No No 은은 은 49.0 Subsidiary 100.0 95.0 No Does the entity indicated at column A, participate in the Business Responsibility initiatives of the listed entity? (Yes/No) Associate % of shares held by listed entity whether Subsidiary/ (A) Name of the subsidiary/ associate companies S. No. Indicate Business Responsibility & Sustainability Reporting Integrated Annual Report 2021-22 215 103 Bluefin Solutions Sdn. Bhd. No 20 19 20 60.9 Subsidiary 102 Mindtree Software (Shanghai) Company Limited No⭑ 60.9 Subsidiary Mindtree Limited 101 100.0 Subsidiary No L&T Valves Arabia Manufacturing LLC Subsidiary No L&T Geostructure Private Limited 109 No 49.0 Subsidiary Larsen & Toubro Qatar LLC @ 108 No 74.0 Subsidiary Larsen & Toubro Infotech UK Limited 60.9 107 74.0 Subsidiary 106 Powerup Cloud Technologies Private Limited No 74.0 Subsidiary 105 Lymbyc Solutions Inc No 74.0 Subsidiary 104 Lymbyc Solutions Private Limited No 100 No 100.0 은은 은은 73.9 Subsidiary Seastar Labs Private Limited 93 No 74.0 Subsidiary Ruletronics Systems Inc 92 No No 74.0 Ruletronics Limited, UK 91 No 75.5 Subsidiary Raykal Aluminium Company Private Limited 90 No No No No Subsidiary 94 Syncordis Limited, UK Subsidiary Subsidiary L&T Valves USA LLC 99 No 51.0 Subsidiary Vadodara Bharuch Tollway Limited 98 No 74.0 Subsidiary Syncordis PSF S.A. 97 No 74.0 Subsidiary Syncordis SARL, France 96 No 74.0 Subsidiary Syncordis S.A. Luxembourg 95 No 74.0 은은 은 은은 zzzz Subsidiary No L&T Transportation Infrastructure Limited Subsidiary 63.8 58 L&T Valves Limited Subsidiary 100.0 59 L&T-MHI Power Boilers Private Limited Subsidiary 51.0 60 L&T-MHI Power Turbine Generators Private Limited Subsidiary 51.0 61 57 L&T-Sargent & Lundy Limited No Subsidiary 73.9 54 L&T Technology Services (Shanghai) Co. Ltd. Subsidiary 73.9 55 L&T Technology Services (Canada) Limited Subsidiary 73.9 29 2 2 2 No No No 56 L&T Thales Technology Services Private Limited 54.6 Subsidiary Subsidiary 100.0 51.0 Subsidiary L&T Infrastructure Development Projects Limited 34 Limited No 66.2 Subsidiary L&T Infra Investment Partners Trustee Private 33 Limited No No 은은 은 은은 66.2 35 50.0 L&T Infrastructure Engineering Limited 100.0 Subsidiary L&T Metro Rail (Hyderabad) Limited 39 51.0 Subsidiary L&T MBDA Missile Systems Limited 38 66.2 Subsidiary L&T Investment Management Limited 37 51.0 Subsidiary L&T Interstate Road Corridor Limited 36 Subsidiary L&T Technology Services LLC 53 No* Subsidiary 51.0 No 43 L&T Power Development Limited Subsidiary 100.0 No 44 L&T Power Limited Subsidiary 99.9 No 45 L&T Rajkot-Vadinar Tollway Limited Panipat Elevated Corridor Limited Subsidiary 42 66.2 No 40 L&T Modular Fabrication Yard LLC 70.0 z z zzzzz No No No No No No No 41 L&T Mutual Fund Trustee Limited Subsidiary No 51.0 No 46 51 L&T Special Steels and Heavy Forgings Private Subsidiary 74.0 은은 은 은은 No No No No No Limited 52 L&T Technology Services Limited Subsidiary 73.9 100.0 Subsidiary L&T Seawoods Limited 50 L&T Samakhiali Gandhidham Tollway Limited Subsidiary 51.0 No 47 L&T Sambalpur - Rourkela Tollway Limited Subsidiary Subsidiary 51.0 L&T Sapura Offshore Private Limited Subsidiary 60.0 49 L&T Sapura Shipping Private Limited Subsidiary 60.0 48 L&T Infra Investment Partners Advisory Private Subsidiary 66.2 Subsidiary L&T Chennai-Tada Tollway Limited 16 No No No 은은 은은 100.0 Subsidiary L&T Capital Company Limited 15 100.0 Subsidiary 14 L&T Aviation Services Private Limited 100.0 51.0 Subsidiary No L&T Realty Developers Limited L&T Innovation Campus (Chennai) Limited 20 No 52.8 Subsidiary L&T Deccan Tollways Limited 19 No 100.0 Subsidiary L&T Construction Equipment Limited 18 No 100.0 Subsidiary 17 Subsidiary L&T Arunachal Hydropower Limited No 73.9 Subsidiary Graphene Solutions Taiwan Ltd. 8 No 73.9 Subsidiary Graphene Solutions Pte Ltd 7 No 73.9 Subsidiary Graphene Solutions Sdn. Bhd No 32 No 13 9 Subsidiary 51.0 Subsidiary Ahmedabad-Maliya Tollway Limited 12 No 50.0 Subsidiary L&T Hydrocarbon Caspian LLC 11 No 51.0 Kudgi Transmission Limited 10 No 100.0 Hi-Tech Rock Products & Aggregates Limited 100.0 6 No Co., Ltd. No 은은 No entity? (Yes/No) initiatives of the listed the Business Responsibility at column A, participate in Does the entity indicated 74.0 50.1 % of shares held by listed entity Indicate whether Subsidiary/ Subsidiary L&T Information Technology Services (Shanghai) 28 27 L&T Information Technology Spain SL 74.0 Subsidiary NO L&T Infra Credit Limited 31 No 74.0 Subsidiary L&T Infotech S. DE. RL. DE. CV. 30 No 74.0 Subsidiary L&T Infotech Financial Services Technologies Inc 29 No Subsidiary Subsidiary No 26 L&T Global Holdings Limited 24 66.2 Subsidiary L&T Financial Consultants Limited 23 66.2 Subsidiary L&T Finance Limited 22 No* 66.2 Subsidiary L&T Finance Holdings Limited L&T Howden Private Limited Subsidiary 100.0 21 L&T Himachal Hydropower Limited Associate (A) 25 Name of the subsidiary/ associate companies S. Business Responsibility & Sustainability Reporting 214 Integrated Annual Report 2021-22 No. No No No No Subsidiary 100.0 은은 은은 213 Yes. DNV India conduct audit in various ICs on different subjects such as ISO 14001, ISO 45001, ISO 50001 and sustainability assurance. During the audit process they check working of the related policies of the company. They do it through checking policy elements, procedures, action plans etc. P 9 P8 P7 P6 P3 P4 P2 P1 Has the entity carried out independent assessment/ evaluation of the working of its policies by an external agency? (Yes/No). If yes, provide name of the agency. 12. If answer to question (1) above is "No" i.e. not all Principles are covered by a policy, reasons to be stated: 11. The Company complies with the extant regulations and principles as are applicable. P5 Questions ΝΑ P1 NA ΝΑ NA 금금금금 ΝΑ NA It is planned to be done in the next financial year (Yes/No) Any other reason (please specify) resources available for the task (Yes/No) ΝΑ The entity does not have the financial or/human and technical The entity is not at a stage where it is in a position to formulate and implement the policies on specified principles (Yes/No) ΝΑ NA The entity does not consider the Principles material to its business (Yes/No) P2 2 During the review, the effectiveness of the policies is evaluated and necessary amendments to policies and procedures are implemented. of relevance to P1 Business Responsibility & Sustainability Reporting Integrated Annual Report 2021-22 222 221 While BRSR is mandatory from FY23, as a responsible corporate citizen, the Company has decided to report on its business responsibility and sustainability practices from FY22 onwards. This BRSR is a testimony of the Company's commitment to sustainability in all its dimensions and the Company will constantly endeavour to strengthen this further on a continuing basis. On the governance front, the Management and the Board are involved in active review of the Company's ESG performance on a regular basis. The Company periodically reassesses all key policies such as Sustainability Policy, Supplier Code of Conduct Policy etc. To strengthen the policy framework further, two additional policies namely, Equal Opportunity Policy and 'Public Policy Advocacy' Policy have been recently adopted by the Company. Across industries, cybersecurity has also become a key concern for the business continuity. Vulnerabilities such as targeted attacks, ransomware threats and phishing have raised the importance of protecting the IT infrastructure and sensitive data of the Company. The Company has developed a robust 5-year cyber security & resiliency roadmap and made investments in state of art security platforms. It has implemented a groupwide Cyber Risk Assurance Framework and operationalised one of the most advanced Security Operations center to monitor developments 24X7 and respond effectively when required to any cyber incidents. The Company's CSR programmes are focused on strengthening the country's social infrastructure with its thrust in areas such as water and sanitation, education, health and skill building. The success of these initiatives lies in delivering impact with optimum use of resources, leveraging strengths and collaborating on areas where capacities need to be built. The Company's Integrated Community Development Programmes (ICDP) being aligned closely to the Sustainable Development Goals (SDGs), is an example of one such effort. The ICDP was initiated 6 years back, specifically in remote water-scarce locations of Maharashtra, Tamil Nadu and Rajasthan. The program was designed with a focus on improving the quality of life of the community by achieving water sufficiency and further expanding into various aspects of sanitation, health, education and livelihood. The ICDP consists of a unique mix of civil interventions (water harvesting structures, farm field structures, sanitation units etc.) as well as targeted programs to build community-based institutions, to provide ownership, accountability, self-management and sustainability of the interventions. These locations have become self- sustaining now, and the Company is replicating this model in other locations. In an economy facing shortage of skilled workforce, the Construction Skills Training Institutes (CSTIs) run by the Company's CSR department in India are worthy of mention. Setup in 1995 and currently with a network of 9 CSTIS spread across the country, CSTIs trains over 10,000 youth in construction and allied skills every year. These skill training institutes have grown over the years with a unique industry connect leveraging on the Company's rich experience and deep knowledge of contemporary as well as new-age practices of the construction industry. Energy transition from fossil fuels to green energy is an established mega trend globally and some of the businesses of the Company like thermal power has already felt the impact of this over the last few years. Another business which could experience an impact over the next 5-10 years is the hydrocarbon business. The Company is therefore evaluating its prospects in green energy areas including green hydrogen, battery storage and offshore wind among others. Overall, the Company intends to reduce its presence across the fossil fuel space and build new businesses around green energy. The EPC business is very labour intensive, and post-Covid the availability of skilled labour has become a challenge. This constraint could magnify over time as India increases its thrust on infrastructure development, an area that the Company seeks to grow in. Recognizing this, the Company has increased its off-site fabrication and its thrust on pre-cast technology. In addition, the Company is augmenting its mechanization and automation capabilities for on-site work. These initiatives are intended to reduce manual component of work, increase worker productivity, reduce wastages and thereby, improve the cost competitiveness of the business. In the short term, the Company's aim, even as it grows, is to flatten the emission curve in the next five years, through improved efficiency in the use of energy and increased use of renewable energy across its operations. This apart, the Company also aims to improve its share of green business offerings over the years, which currently stands at around 38%. L&T is a conglomerate with dominant presence in EPC, High Tech manufacturing, IT Services, and Financial Services. These businesses, the EPC and manufacturing in particular, have a significant impact on the environment in terms of GHG emission, energy and water consumption. Given the strong growth aspiration of the Company, the challenge is to balance the growth pursued while minimising its impact on the environment, and also achieve net zero position for both water consumption and carbon footprint by 2035 and 2040 respectively. LARSEN & TOUBRO Integrated Statutory Financial Discussion and Analysis Report Reports Statements Management 8. P1 P2 P3 P4 P5 P6 P7 P8 P9 P2 P3 P4 P5 P6 P7 P8 P9 All the policies of the Company are approved by the Board and reviewed periodically or on a need basis by Executive Committee as a part of ESG review. 9. Details of the highest authority responsible for implementation and oversight of the Business Responsibility policy (ies). Name: Mr. R. Shankar Raman Frequency (Annually/ Half yearly/Quarterly/ Any other - please specify) Indicate whether review was undertaken by Director/Committee of the Board/ Any other Committee non-compliances rectification of any the principles, and statutory requirements Compliance with above policies and follow up action¹ Performance against Subject for Review Details of Review of NGRBCs by the Company: Yes, the Company's CSR and Sustainability Committee is responsible for sustainability related issues Does the entity have a specified Committee of the Board/ Director responsible for decision making on sustainability related issues? (Yes / No). If yes, provide details. NA- Data not available Designation: Whole-time Director & Chief Financial Officer 10 DIN: 00019798 ΝΑ ΝΑ Workers KMPS Employees other than BOD and Key Managerial Personnel Board of Directors Segment Total Number of training and awareness programmes held 1. Percentage coverage by training and awareness programmes on any of the principles during the financial year: Principle 1: Businesses should conduct and govern themselves with integrity and in a manner that is Ethical, Transparent and accountable. This section is aimed at helping entities demonstrate their performance in integrating the Principles and Core Elements with key processes and decisions. The information sought is categorized as "Essential" and "Leadership". While the essential indicators are expected to be disclosed by every entity that is mandated to file this report, the leadership indicators may be voluntarily disclosed by entities which aspire to progress to a higher level in their quest to be socially, environmentally and ethically responsible. SECTION C: PRINCIPLE WISE PERFORMANCE DISCLOSURE LARSEN & TOUBRO Statutory Financial Reports Statements Discussion and Analysis Report Essential Indicators Topics/principles covered under the training and its impact Business, strategy, risk and update of laws Responsible Organisation Code Corporate Overview 100% (EHS Induction Training of Conduct and principles of Corporate Governance EHS training 929,901 manhours (Trainings and Awareness) 5,539 no of programmes 20 manhours 20 manhours 97.4% 100% 100% % age of persons in respective category covered by the awareness programmes Business Principles for update of laws Business, strategy, risk and Integrated Management Corporate Overview ΝΑ P9 ΝΑ ΝΑ ΝΑ ΝΑ ΝΑ ΝΑ P8 P7 P6 P5 P4 3 3 3 3 w ΝΑ ΝΑ NA ΝΑ ΝΑ NA ΝΑ 1 Details of performance against some of the targets are available in the Integrated report section. ΝΑ ΝΑ ΝΑ NA ΝΑ ΝΑ NA ΝΑ ΝΑ NA } } ΝΑ 금금금금 ΝΑ ΝΑ 3 3 3 3 ΝΑ ΝΑ NA NA ΝΑ ΝΑ Disclosure Questions Statement by director responsible for the business responsibility report, highlighting ESG related challenges, targets and achievements (listed entity has flexibility regarding the placement of this disclosure). Positive/ Negative Positive Positive Negative Positive Positive Positive *For more details, refer to chapter on Materiality Assessment in the Integrated Report section. For details, refer to chapter on Manufactured Capital in the Integrated Report section. Policy and deployment, audits/ Cyber Security Assurance Framework (L&T has developed a robust 5-year cyber security & resiliency roadmap and made investments in state of art security platforms. The Company has implemented a groupwide Cyber Risk Assurance Framework and operationalised one of the most advanced Security Operations Centre to monitor 24X7 & respond to any cyber incidents.) о Social engagement & Impact 16. Materials Management For details, refer to chapter on Natural Capital in the Integrated Report section. 219 Integrated Annual Report 2021-22 SECTION B: MANAGEMENT AND PROCESS DISCLOSURES Businesses should promote inclusive growth and equitable development. Businesses, when engaging in influencing public and regulatory policy, should do so in a manner that is responsible and transparent. P7 Businesses should respect and make efforts to protect and restore the environment. P6 Businesses should respect and promote human rights. P 5 Businesses should respect and promote the well-being of all employees, including those in their value chains. Businesses should respect the interests of and be responsive to all its stakeholders. P4 P 3 Businesses should provide goods and services in a manner that is sustainable and safe. P2 Businesses should conduct and govern themselves with integrity, and in a manner that is Ethical, Transparent and Accountable. P1 Business Responsibility & Sustainability Reporting O/R Water, Waste & Hazardous 15. ○ Financial implications of the risk or opportunity (Indicate positive or negative implications) For details, refer to chapter on Human Capital in the Integrated Report section. In case of risk, approach to adapt or mitigate Rationale for identifying the risk / opportunity whether risk or opportunity Indicate LARSEN & TOUBRO Statements Reports Integrated Statutory Financial Report Material issue identified* S. No. Discussion and Analysis Management 2. Positive/Negative P 8 (R/O) Talent Management, Attraction, Retention and Development Brand Management 14. O/R Quality of Products and Project delivery 13. R Data Security, Privacy, and Cybersecurity 12. Opportunity Diversity, Inclusion & Equal 11. ○ Climate Action 10. O/R 9. 220 P 9 P1 IIRC IR Principle Indian ISO14001 labour codes Principle ISO 14001 ISO 45001 IIRC IR and ISO 45001 Y Y IIRC IR Principle Y Y Y Y Y Y YYYYYYYYY Y (a) (b) (c) 7. Governance, leadership, and oversight e) Number of lives to be impacted by CSR projects: 1.5 million by FY26, achieved 1.13 million in FY22. d) Achieve carbon neutrality by 2040 and water neutrality by 2035. Emission reduction intensity up to 25% by FY26. b) Zero Harm Vision to life, environment and property. a) 40% Green Business by FY26, achieved 38.2% for FY22. specific commitments, goals and targets along-with reasons in case the same are not met. (d) (c) (b) (a) 6. Performance of the entity against the (e) (d) https://www.larsentoubro.com/corporate/about-lt-group/corporate-policies/ targets set by the entity with defined timelines, if any. 5. Specific commitments, goals and 4. Name of the national and international codes/certifications/labels/ standards (e.g. Forest Stewardship Council, Fairtrade, Rainforest Alliance, Trustea) standards (e.g. SA 8000, OHSAS, ISO, BIS) adopted by your entity and mapped to each principle. SEBI (Listing obligation and Disclosure Requirements) Regulations, 2015 Y Y Y Y Whether your entity's policy/ policies cover each principle and its core elements of the NGRBCs. (Yes/ No) 1. a. Policy and management processes P 9 P 8 P7 P6 P5 P4 P3 P2 Y Businesses should engage with and provide value to their consumers in a responsible manner. Y Y 3. Do the enlisted policies extend to your value chain partners? (Yes/No) 2. Whether the entity has translated the policy into procedures. (Yes/No) available C. Web Link of the Policies, if Y Y Y Y Y Y Y Y Y b. Has the policy been approved by the Board? (Yes/No) Y Y is mandatory for all the workers who resume work) Integrated The Company had no monetary and non-monetary fines / penalties /punishment/ award/ compounding fees/ settlement amount paid in proceedings (by the entity or by directors / KMPs) with regulators/ law enforcement agencies/ judicial institutions, in the financial year FY22 based on materiality thresholds. 3% 1,318 3% 1,338 100% 3% 1,654 211 0 20% 1,338 100% 3% 1,443 0% 3% Other than employees 26% 65 26% 42% 67 59% 2,166 107 4,252 0 0% 0 30% 60% 2,099 4,145 6,954 254 7,208 Total Female Male 3% 1,318 0% 0 (C) A) Day Care facilities Benefits Paternity % of employees covered by Accident Maternity benefits insurance Health insurance Total (A) Number (B) Category 1. a. Details of measures for the well-being of employees: Essential Indicators Principle 3: Businesses should respect and promote the well-being of all employees, including those in their value chains LARSEN & TOUBRO Statements Statutory Financial Reports % (B Number % (C/ Number A) 0 (D) Number 100% 45,615 100% 100% 6,540 100% 52,155 45,615 45,615 6,540 6,540 52,155 52,155 Total Female Male employees Permanent A) (F) A) (E) Number % (F / % (E/ % (D/ A) Discussion and Analysis Report 30% 1% 67% 100% 2,190 66% 2 0% 2 2 0% 37% Other than Permanent workers Male 194,376 1,217 67% 2 67% 100% Total 3,307 3 3,307 100% 2,187 3 66% 0 0% 0 0% 1,215 37% 100% 2 Female Total 2,379 196,755 58,834 2,049 86% 2,139 60,883 31% 109,096 Female Category Details of measures for the well-being of workers: 2. b. 0% 31 0 2% 0% 65 0 26 0 ooo 0 Health insurance Total (A) Number 65 (B) Accident insurance Male workers A) (F) A) Number % (F/ Day Care facilities Permanent (E) A) (D) A) (C) % (B Number % (C/ Number % (D/ Number % (E/ A) Paternity Benefits % of workers covered by Maternity benefits Details of fines/ penalties /punishment/ award/ compounding fees/ settlement amount paid in proceedings (by the entity or by directors / KMPs) with regulators/ law enforcement agencies/ judicial institutions, in the financial year, in the following format: Management ΝΑ 1. LEADERSHIP INDICATORS Provide details of any corrective action taken or underway on issues related to fines/ penalties / action taken by regulators/ law enforcement agencies/ judicial institutions, on cases of corruption and conflicts of interest. Not applicable Number of complaints received in relation to issues of Conflict of Interest of the KMPS Number of complaints received in relation to issues of Conflict of Interest of the Directors 7. Awareness programmes conducted for value chain partners on any of the principles during the financial year: Remarks Remarks (Current Financial Year) Number FY20-21 FY21-22 (Previous Financial Year) FY20-21 (Previous Financial Year) Number Total number of awareness programmes Topics/principles covered under the held 2,618 participants training Does the entity have processes in place to avoid/ manage conflict of interests involving members of the Board? (Yes/No) If yes, provide details of the same. 2. LARSEN & TOUBRO Statements Statutory Financial Reports Integrated Report Discussion and Analysis Management Corporate Overview *The top 25 value chain partners (supply chain partners) and also many other suppliers have been covered by the awareness sessions. These supply chain partners comprise 40% to 65% (by value) across the various business verticals. The Company has excluded government entities from the list of its value chain partners (supply chain partners) for these awareness training. and awareness, awareness sessions on BRSR and 9 principles therein 224 Varying from 40% to 65%* % age of value chain partners covered (by value of business done with such partners) under the awareness programmes Environment, health and safety trainings (Current Financial Year) FY21-22 6. Details of complaints with regards to conflict of interest: Employees Workers regulatory/ Non-Monetary Name of the NIL NIL NIL NGRBC Principle institutions Has an appeal been preferred? (Yes/No) agencies/ judicial Amount (in INR) Brief of the Case Name of the regulatory/ enforcement NGRBC Principle Monetary Imprisonment Punishment Settlement Compounding Fee Penalty/ Fine enforcement agencies/ The Company has processes on management of conflict of interests involving members of the Board which may arise due to Directors joining the Boards of other companies and even conflicts which would take place during the course of normal business activities. The process allows the Directors to recuse themselves from the discussions pertaining to the conflict of interest. The Directors have to exercise their responsibilities in a bonafide manner in the interest of the Company, should not allow any extraneous considerations that may vitiate their exercise of objective independent judgment in the paramount interest of the Company and not abuse their position to the detriment of the Company for the purpose of gaining direct or indirect personal advantage. Any conflict of interest arising with the Board Members needs to be reported to the Chairman of the Audit Committee/Chairman of the Board. judicial institutions Has an appeal been preferred? (Yes/No) Directors KMPS There have been no cases involving disciplinary action taken by any law enforcement agency on the charges of bribery/ corruption against directors / KMPs / employees / workers that have been brought to the Company's attention. Number of Directors/KMPs/employees/workers against whom disciplinary action was taken by any law enforcement agency for the charges of bribery/ corruption: Yes, The Company has 'zero tolerance' of any practice that may be classified as corruption, bribery or giving or receipt of bribes and the same has been mentioned in its Code of Conduct. The objective of this policy is to serve as a guide for all directors, executives, employees and associated persons for ensuring compliance with applicable anti-bribery laws, rules and regulations. This policy is applicable to all individuals working at all levels and grades, including Board Members and Senior Managerial Personnel, other employees, consultants, interns, contractors, agency staff, agents or any other person associated with the Company and such person acting on behalf of the Company. Does the entity have an anti-corruption or anti-bribery policy? If yes, provide details in brief and if available, provide a web-link to the policy. 5. 4. Name of the regulatory/ enforcement agencies/ judicial institutions Case Details Not applicable Of the instances disclosed in Question 2 above, details of the Appeal/ Revision preferred in cases where monetary or non-monetary action has been appealed: Business Responsibility & Sustainability Reporting 3. Integrated Annual Report 2021-22 223 Brief of the Case Corporate Overview Principle 2: Businesses should provide goods and services in a manner that is sustainable and safe 1. Percentage of R&D and capital expenditure (capex) investments in specific technologies to improve the environmental and social impacts of product and processes to total R&D and capex investments made by the entity, respectively. Of the products and packaging reclaimed at end of life of products, amount (in metric tonnes) reused, recycled, and safely disposed, as per the following format: 11.9% 29.4% 4. FY 20-21 14.2% Fly ash and Ground Granulated Blast-furnace Slag in place of Cement Crushed sand in place of Natural Sand Recycled or re-used input material to total material FY 21-22 33.4% Indicate input material It has been recommended to look for green steel or recycled steel for the manufacturing of this product without compromising the quality of raw material. Also, it has been advised to consider usage of renewable source of energy in the manufacturing process. Management is evaluating this recommendation on feasibility of adoption. Action Taken The LCA study concludes that maximum environmental impact is associated with procurement of primary raw material (steel) and the energy consumption (grid source) associated with the manufacturing process. Other than these, there is almost negligible impacts in the manufacturing process. Description of the risk/concern Diamond Green Diesel Reactor Name of Product / Service 3. Percentage of recycled or reused input material to total material (by value) used in production (for manufacturing industry) or providing services (for service industry). Not applicable as the Company does not have any specific consumer product except heavy construction machinery, valves and defence products and there is no product reclamation at the end of the product life. However, the waste material generated at the operation and project sites are reused, recycled and disposed as per the applicable regulatory requirements. FY20-21 (Previous Financial Year) Re-used Plastics (including packaging) E-waste NA: Data not available Reclaimed products and their packaging materials as % of total products sold in respective category Indicate product category Reclaimed products and their packaging materials (as percentage of products sold) for each product category. 226 5. Other Waste 1785 Tons Safely disposed Recycled 0 Tons - 30 Tons 1002.1 Tons 1541.4 Tons Safely Disposed 0.1 Tons FY21-22 (Current Financial Year) Re-used Re-cycled 5 Tons - 112 Tons 732.9 Tons Hazardous Waste If there are any significant social or environmental concerns and/or risks arising from production or disposal of your products/services, as identified in the Life Cycle Perspective / Assessments (LCA) or through any other means, briefly describe the same along-with action taken to mitigate the same. No If yes, provide the web-link. Results communicated in public domain (Yes/ No) Whether Extended Producer Responsibility (EPR) is applicable to the entity's activities (Yes / No). If yes, whether the waste collection plan is in line with the Extended Producer Responsibility (EPR) plan submitted to Pollution Control Boards? If not, provide steps taken to address the same. The Company does not have any specific product to reclaim at the end of life. However, at the project and operation sites, there are systems in place to recycle, reuse and dispose in line with regulatory requirement for the above waste being generated during course of construction and operation. Describe the processes in place to safely reclaim your products for reusing, recycling and disposing at the end of life, for (a) Plastics (including packaging) (b) E-waste (c) Hazardous waste and (d) other waste. It is mandatory to furnish the evaluation questionnaire (EHS and sustainability parameters) before onboarding as value chain partners (supply chain partners) and it has 100% coverage. b. If yes, what percentage of inputs were sourced sustainably? The Company has a procedure for sustainable sourcing where all the new and existing supply chain partners are mandatorily evaluated on environment, health & safety and sustainability parameters before onboarding. Also, supplier/vendor Code of Conduct (COC) covers EHS and Human Rights parameters to be adhered and value chain partners (supply chain partners) must sign the COC as a part of the contract documents. a. Does the entity have procedures in place for sustainable sourcing? L&T conducts R&D linked to environmental and social initiatives, however currently the expenditures are not tracked. 4. 3. 2. Details of improvements in environmental and social impacts Previous F Y FY20-21 (Cr) Current F Y FY21-22 (Cr) R&D Capex EPR is not applicable as the major business of the Company is construction and associated services and the Company does not manufacture any consumer products. The Company manufactures few heavy construction machineries, specialised industrial units and defence products. There is no specific plastic, electrical and electronic product manufactured where EPR is applicable under E-Waste Management. ESSENTIAL INDICATORS 225 30% 106,957 Yes (Yes/No) Whether conducted by independent external agency Cradle to Gate Boundary for which the Life Cycle Perspective/ Assessment was conducted Not available % of total Turnover contributed Diamond Green Diesel Reactor 281 NIC Code Name of Product/Service 2. Yes, the Company has conducted one LCA study for one of its products (Diamond Green Diesel Reactor) from the Heavy Engineering business vertical in FY22 period. 1. Has the entity conducted Life Cycle Perspective / Assessments (LCA) for any of its products (for manufacturing industry) or for its services (for service industry)? If yes, provide details in the following format? Leadership Indicators Business Responsibility & Sustainability Reporting Integrated Annual Report 2021-22 Permanent 3,304 3 0 employees/ worker in respective category (A) Total - Male Total Permanent Employees Category 228 FY 20-21 (Previous Financial Year) No. of employees/ FY 21-22 (Current Financial Year) 7. Membership of employees and worker in association(s) or Unions recognised by the listed entity: The Company has HR Connect application on L&T Intranet (My Zone) which is accessible to all employees (except other than permanent employees). On this platform, they can raise their complaints and grievances which are addressed by HR. The grievances can be also raised through whistle-blower system through dedicated mail and toll-free number. Yes. Grievance redressal mechanism is available at factory & project site establishments. Complaints can be raised through the toll-free number provided at project site and manufacturing/factory set up or directly reported to the admin and industrial relation personnel. Also, grievances can be raised through e-mails and all the grievances that are received through different platforms are directed to the respective function owner and resolved through the respective IR and Admin function. Yes/No (If Yes, then give details of the mechanism in brief) Other than Permanent Employees Permanent Employees Other than Permanent Workers Permanent Workers Is there a mechanism available to receive and redress grievances for the following categories of employees and worker? If yes, give details of the mechanism in brief. # The Company is putting a process in place to compile the above data for Permanent workers for FY23. * Gender wise breakup for permanent employees and workers not available. 6. 96% 89% Retention rate Permanent workers# Retention rate (%) Return to work rate Return to work rate (%) Permanent employees Total Female Male No. of employees/ Workers in respective category, who are part of % (B / A) Total Employee/ workers in workers in 55% 3,304 Corporate Overview 100% 3 3 100% 3 3 - Female 82% 82% 2,351 2,348 2,849 Gender* 2,852 2,291 2,288 3,307 3,304 - Male Total Permanent Workers - Female (D) (s) or Union or Union (B) association(s) category (C) of association who are part % (D/C) category, respective 69% 69% Return to work and Retention rates of permanent employees and workers that took parental leave. respective Does the entity have an equal opportunity policy as per the Rights of Persons with Disabilities Act, 2016? If so, provide a web-link to the policy. Deducted and deposited with Current Financial Year of total workers a % of total No. of workers covered as a % No. of employees covered as Benefits FY 20-21 FY 21-22 Details of retirement benefits, for Current FY and Previous Financial Year. 0% 165 0% 124 210 55% 7% 165 5% 124 9% 210 90% 0% 0 0% 0 Yes, the Company has Equal Opportunity Policy as per the Rights of Persons with Disabilities Act, 2016. This policy can be accessed through the link https://larsentoubro.com/corporate/about-It-group/corporate-policies/. 0% the authority (Y/N/N.A) employees 0% No.of workers covered as a % of total workers Are the premises / offices of the entity accessible to differently abled employees and workers, as per the requirements of the Rights of Persons with Disabilities Act, 2016? If not, whether any steps are being taken by the entity in this regard. Yes, most of the Company's permanent office buildings and manufacturing locations are accessible to differently abled employees and workers, as per the requirements of the Rights of Persons with Disabilities Act, 2016. 5. No. of employees covered as a % of total employees 4. 3. Accessibility of workplaces Business Responsibility & Sustainability Reporting Integrated Annual Report 2021-22 227 Y 100% Y 100% 100% Y 100% 100% 100% the authority 100% (Y/N/N.A.) PF Gratuity ESI 100% Y Deducted and deposited with 100% 100% Y 100% 100% Y Previous Financial Year Developed standardized template of HSE Lessons Learnt (EHS Alert) and these alerts are shared in the centralized knowledge sharing platform which can be accessed by all employees. 2. 1. LEADERSHIP INDICATORS Implementation of senior management audits based on standard checklist developed by the EHS Council. The outcome of the efforts has been to capture the high-risk hazardous activities ubiquitous in various L&T's Business verticals. This helps to devise an action plan to enhance the competency among stakeholders in managing such activities with higher degree of awareness and suitable training using technology such as AR/VR from competent external agencies as well as subject matter experts. Each employee of the organisation strives to achieve EHS excellence in their respective functions and align their actions and business decisions. Enrolled Subject Matter Experts (SMEs) into the HSES Management Community of central knowledge sharing module. In view of this collective approach, efforts have been made in understanding the Company's high-risk profile holistically as well as in general. EHS risk management culture has been inculcated across the Company. Various steps have been taken including: The Company's EHS Council undertakes a review of all accidents and incidents, and formulate procedures based on risk analysis of data gathered through respective IC. It makes use of advanced technology such as vison analytics/Al to detect any health & safety hazards and gather data. This data is used for predictive analysis, measurement of incidents and unsafe behaviours. This enables identification of the key areas of risk which in turn guides the projects to proactively manage and focus resources to prevent any accidents or incidents. Such analysis is shared throughout the group IC structure, to support L&T Mission ZERO HARM objective. • • Developed HSE Training Modules on high-risk activities. • Implementation of HSE Surveillance Rating • Does the entity extend any life insurance or any compensatory package in the event of death of (A) Employees (B) Workers • The Company extends life insurance coverage for work related death of its employees and workers. 0 Adherence to the applicable statutory provisions including payment and deduction of statutory dues is incorporated in the contract agreement with the value chain partners. The Company makes sure that all the relevant clauses dealing with statutory compliance are validated and honoured by both sides. No. of employees/workers that are rehabilitated and placed in suitable employment or whose family members have been placed in suitable Employment 15. Provide details of any corrective action taken or underway to address safety-related incidents (if any) and on significant risks / concerns arising from assessments of health & safety practices and working conditions. 25 28 1 FY20-21 (Previous FY) FY21-22 (Current FY) Provide the measures undertaken by the entity to ensure that statutory dues have been deducted and deposited by the value chain partners. Total no. of affected employees/workers* Employees Benefits Provide the number of employees / workers having suffered high consequence work-related injury / ill-health/fatalities (as reported in Q11 of Essential Indicators above), who have been rehabilitated and placed in suitable employment or whose family members have been placed in suitable employment: 3. Business Responsibility & Sustainability Reporting Integrated Annual Report 2021-22 231 Workers L&T has robust Internal audit process in line with ISO 45001:2018 requirement and it covers all construction projects, offices and manufacturing units. At least one internal audit is conducted in a financial year for all such operations/sites/ manufacturing units/offices. 230 % of your plants and offices that were assessed (by entity or statutory authorities or third parties) Filed during FY 20-21 Previous Financial Year Current Financial Year FY 21-22 Others Health & safety Working Conditions the year Benefits To support this further, there is a systematic risk management process in place to identify and control all the hazards in projects/units which requires verification of conformity. The EHS management system has various procedures and EHS norms. Therefore, a process has been established for carrying out Internal EHS audits. This process mandates to organise internal audits for all active projects and it is verified by each IC head office audit team at least once in six months. Certain projects were selected for frequent auditing, depending on their status, importance, and risk profile. This was in addition to any external audits carried out by accredited auditors. The Management provides strong demonstrable visible leadership and commitment towards EHS through personal examples and actions. This is the first principle of L&T L.I.F.E (Live Injury Free Each Day) leadership commitment. Management has participated in EHS meetings, conducted site Inspections and EHS Audits, to encourage and develop a positive attitude towards EHS within L&T projects and operations. Management ensured that sufficient EHS resources were available and allocated responsibilities for implementing the L&T LIFE framework. Roles & responsibilities, targets & objectives, goals, training needs & required behaviours had been clearly defined, agreed & communicated throughout the entire organisation & structure. As a part of the EHS Management system, a project specific EHS plan is prepared at the inception of every new project that determines the broad parameters of EHS management. This EHS plan identifies the hazardous operations and the risks arising from such hazards which are within the scope of the work. It even specifies the required integrated preventive measures (Controls) to mitigate the same. 12. Describe the measures taken by the entity to ensure a safe and healthy workplace. Workers Employees Workers Employees FY21-22 (Current FY) 13. Number of Complaints on the following made by employees and workers: Pending resolution at the end of year Remarks Filed during the year Health and safety practices Working Conditions 14. Assessments for the year: LARSEN & TOUBRO Integrated Statutory Financial Report Reports Statements Discussion and Analysis Management Corporate Overview POSH ΝΑ 3 POSH Data not available, to be tracked in FY23 Data not available, to be tracked in FY23 2 ΝΑ Remarks Pending resolution at the end of year 100% - No FY20-21 Whether identified as Stakeholder Group List stakeholder groups identified as key for your entity and the frequency of engagement with each stakeholder group. Business Responsibility & Sustainability Reporting 234 2. Integrated Annual Report 2021-22 Vulnerable & 233 Media acts as important channel of communication of Company's performance, policies and plans. They also help in reverse loop in highlighting concerns or issues related to the Company. In order to ensure that there are no gaps in communication, engagement with media entities is a continuous process. Various business units of the Company operate in variety of sectors, each of which are governed by specific regulatory bodies. In addition to this, there are bodies which oversee different steps in EPC and manufacturing air pollution control. It becomes important to understand priorities of these agencies and address their concerns, if any, to maintain compliance levels and establish benchmark performance levels. Shareholders and investors make an important contribution to the growth of the company by providing financial resources for short term i.e., working capital and long term i.e., capital expenditure and investments. They also play an important role through exercise of their voting rights with respect to important plans of the Company. Construction is a labour-intensive activity, and L&T employs over 200,062 workers in addition to >50,000 of its own employees (including manufacturing). Hence, their skills development, health and well-being are important for the Company's ongoing and future operations. Private sector makes up ~16% of the orderbook and plays an important role in business plans of the company. Many of them are long-term clients which offer repeat business over period of years and also act as partners in developing new solutions or business offerings. Government (central and state) orders make up ~40% of the Company's current orderbook. Additionally, orders from Government owned enterprises contribute to ~44% of the orderbook and therefore, they are the largest clients for the businesses. In addition to providing the business, they also determine policies for various areas as well as determine the future plans for various sectors. To maintain sustainable growth, these partners are key elements in meeting the delivery and cost objectives for various contracts. ii) Outsourcing of business activities e.g., low-end civil works in construction projects and low-end manufacturing L&T helps catalyse socio-economic development of communities around its premises and at various locations across the country. Focus is on under-privileged and marginalized sections to enable them to bring them on-par with others. Sourcing of key raw materials e.g., cement, aggregates, steel and other materials for construction projects, and high-grade metals, subcomponents and other inputs for manufacturing business. Channels of Communication Shareholders and No Customers interactions Performance reporting, good practices, show cases, awards and achievements, initiatives etc are discussed and reported As and when required Press Releases, Quarterly Results, Annual Reports, Sustainability / Integrated Reports, AGM (shareholders interaction), Access information and media Press Releases, Info desk - an online service, dedicated email ID for Investor Grievances, Quarterly Results, Annual Reports, Integrated Reports, AGM (Shareholders interaction), Quarterly investor presentation, Investors meets, stock exchange filings and corporate website. Marginalized Group (Yes/No) etc. Purpose and scope of engagement including key topics and concerns raised during such engagement As and when required Frequency of engagement No Media investors Workers To understand their need and expectation which are material to the Company. Key topics are company's financial performance, ESG performance i) EPC and high-tech manufacturing have significant dependence on supply chain partners for Basis of Identification The Company, based on all EHS analysis data gathered, has developed several procedures aligned to Sub-contractor procurement and management. The Health, Safety & Environment Management system has been reviewed and aligned to be a part of and fully incorporated into the contract between sub-contractor and the Company. Its purpose is to set forth the areas of EHS concerns and requirements routinely. This subcontractor system is intended to supplement any contractual requirements, including EHS Management System manual, guidelines, Standard Operating Procedures, any requirements of client, as well as sub-contractor's own EHS Programme. As per the internal EHS audit procedure and assessment carried out, all the observations and non-conformances are properly recorded and notified for closeout. Once closeouts are done, they are recorded with details of closeouts. These details can be retrieved from respective sites, manufacturing units and operations. Provide details of any corrective actions taken or underway to address significant risks / concerns arising from assessments of health and safety practices and working conditions of value chain partners. (The top 25 suppliers and large number of other suppliers are assessed through a detailed checklist of more than 40 questions on EHS parameters. The top 25 suppliers account for 40% to 65% by value of business done with such partners.) % of value chain partners (by value of business done with such partners) that were assessed Varying from 40% to 65% Health and safety practices Working Conditions Details on assessment of value chain partners (Supply chain partners): All the suppliers and contractors of the Company are evaluated on their safety infrastructure processes and strengths before awarding a contract. The continued monitoring and measuring of suppliers and contractors ensure a comprehensive safe environment. This is further enhanced with regular refresher training sessions and capacity-building programmes. In addition, periodic site visits by the senior management and site audits improve the EHS performance. The Company provides transition assistance programmes to facilitate continued employability and the management of career endings resulting from retirement. *All the deceased workers and employees resulting from work related injuries have received the insurance money. 6. 5. 4. 1 1 (Previous FY) Does the entity provide transition assistance programmes to facilitate continued employability and the management of career endings resulting from retirement or termination of employment? 232 Corporate Overview Management Communities Media Shareholders and Investors Regulatory bodies Employees and Workforce Customers Government Stakeholder Group Suppliers/Contractors L&T's business is primarily EPC - engineering, procurement, construction, and high-tech manufacturing. Hence, in line with its business models, the Company has identified the following as key stakeholder groups: Describe the processes for identifying key stakeholder groups of the entity. 1. Essential Indicators Principle 4: Businesses should respect the interests of and be responsive to all its stakeholders LARSEN & TOUBRO Statements Statutory Financial Reports Integrated Discussion and Analysis Report 2 High consequence work-related injury or ill-health (excluding fatalities) Employees 1 Male Workers 37% 18,655 18% 8,988 37% 197,680 1,180 561 3,158 51,012 27% 12,489 19% 8,880 45,615 18% 173,248 88% 8,813 2% 24 58% 559 3% 6,850 44% 114,333 258,910 962 11% 270 15% 369 2,382 200,062 Total Female 4% Total 173,617 33% 37% On Skill upgradation On Health and Category Previous Financial Year FY 20-21 Current Financial Year LARSEN & TOUBRO Total (A) FY 21-22 Statements Statutory Financial Reports Report Integrated Discussion and Analysis Management Corporate Overview 8. Details of training given to employees and workers: safety measures Total (D) On Health and safety measures 17,475 18% 8,427 47,854 27% 11,505 19% 20% 609 2,997 Female 8,271 42,618 Male Employees No. (E) % (ED) No. (F) % (F / D) No. (B) % (BA) No. (C) % (C/A) On Skill upgradation 984 0 87% 5% 259,872 FY20-21 FY21-22 11. Details of safety related incidents, in the following format: d. Do the employees/workers of the entity have access to non-occupational medical and healthcare services? Yes, medical centres and first aid facilities are available for both employees and workers. Business Responsibility & Sustainability Reporting Integrated Annual Report 2021-22 229 Safety Incident/Number Yes, the Company has processes for workers to report work related hazards and to remove themselves from such risks. The Company has in place systematic risk management process to identify and control all the hazards in construction project sites, manufacturing units, industrial production facilities and offices. The Company's risk management process is applied through five steps (Identification, Assessment, Mitigation, Monitoring and Reporting) and is the key driver for controlling the risk of EHS in business. All relevant stakeholders including construction engineers, design and planning engineers, production in charges and EHS team members are involved in risk assessments and the risk management process, Risk Assessments & Safe Work Method Statement are developed and approved prior to starting any work activity. All identified risks and risk mitigation plans are required to be documented, approved and communicated to all relevant parties involved in the activity. Yes, occupational health and safety management system has been implemented by the entity. It covers the entire operations covering all construction project sites, manufacturing units, industrial production facilities and offices. In line with L&T's vision, philosophy, and EHS Policy, management systems have been implemented in accordance with the International Standards ISO 45001:2018 (Occupational Health and Safety Management System Standard). EHS Management System defines the mandatory requirements for the systematic management and execution within the organisation. The Company's Integrated EHS Management System is accredited by international certification bodies. b. What are the processes used to identify work-related hazards and assess risks on a routine and non-routine basis by the entity? Whether an occupational health and safety management system has been implemented by the entity? (Yes/No). If yes, the coverage of such system? a. 10. Health and safety management system: For FY22 the review process is still in progress and will be completed by FY24 100% C. Whether you have processes for workers to report work related hazards and to remove themselves from such risks. Category Current Financial Year Previous Financial Year 0 3 23 25 2 0 75 122 8 10 No. of fatalities Employees Total recordable work-related injuries Workers 0.1 0.1 Employees Lost Time Injury Frequency Rate (LTIFR) (per one million-person hours worked) 3 9,083 100% 3,805 3 Business interactions, client satisfaction surveys % (D/C) (Previous Financial Year) No. (D) Total (C) % (B/A) No. (B) Total (A) Male (Current Financial Year) FY20-21 FY21-22 9. Details of performance and career development reviews of employees and worker: 3% 6,874 44% 114,892 Category 38,644 33,354 86% 80% 33% 2,640 1 3,304 3 Female Male Workers only) (Permanent Workers 100% 3,158 100% 47,854 47,854 3,158 71% 1,931 2,709 Female 3,805 Biannually 4,000+ Toliets constructed and made 67 villages ODF No 1,535 99% 195,220 196,755 Other than 100% 3 1% 3 100% 3,304 3,304 Male 100% 3,307 3,307 Female Permanent | | | | |||| Female Male Board of Directors (BOD) (Whole-time Directors) Key Managerial Personnel Benefits *100% coverage of employees and workers towards payment of equal to/more than minimum wages; Breakup is not available FY21. Details of remuneration/salary/wages, in the following format: Female 1% 1% |||| 1,518 17 99% 192,858 2,362 2,379 194,376 Male Permanent |||| 99% Workers 100% 241 6,540 Permanent Employees % (F / D) % (ED) No. (F) No. (E) % (C/A) 6,540 % (BA) No. (C) More than Minimum Wage Previous Financial Year FY 20-21* Wage Total (D) Equal to Minimum More than Minimum Wage No. (B) 100% Male 6,299 241 Female 100% 6,299 6,299 Male Permanent 100% 6,540 6,540 Other than 100% 241 241 Female 100% 6,299 Number Median remuneration/ salary/ wages of respective category Number (In Rupees) Mechanisms to prevent adverse consequences to the complainant in discrimination and harassment cases. The Company has a Whistle Blower Policy wherein the employees report, without fear of retaliation, any wrong practices, unethical behaviour or noncompliance which may have a detrimental effect on the organisation, including financial damage and impact on brand image. Also, the Code of Conduct of the Company requires employees to behave responsibly in their action and conduct. Apart from that, the Company has Committees at every location for the protection of women at workplace to ensure their rights, receive grievances, conduct investigation and to take actions. Do human rights requirements form part of your business agreements and contracts? Remarks .² = 3. year Pending resolution at the end of 3 Filed during the year Yes. The Company adheres to the UNGC (United Nation Global Compact) principles which include Human Rights clauses. These clauses are part of the contracts with suppliers, partners, and NGOs, and are extended across the supply chain in the form of Supplier/Vendor Code of Conduct. Remarks the year Filed during Previous Financial Year FY 20-21 Rights related issues Other human Wages Pending resolution at the end of year Assessments for the year % of your plants and offices that were assessed (by entity or statutory authorities or third parties) 100% 238 The Company adheres to the UNGC (United Nation Global Compact) principles which include Human Rights clauses. These clauses are part of the Company's contracts in the form of Supplier/Vendor Code of Conduct (CoC) and is extended across entire value chain. Fostering a culture of caring and trust are embedded in various corporate policies like Environment, Health & Safety (EHS) Policy, Whistle-Blower policy, Protection of Women's Rights at Workplace Policy Details of the scope and coverage of any Human rights due-diligence conducted. No complaint received in FY22 for human rights violation. The Company revised its Supplier/Vendor Code of Conduct including human rights compliance requirements for value chain partners. 2. 1. Details of a business process being modified / introduced as a result of addressing human rights grievances/complaints. Leadership Indicators No significant risks/concerns. 10. Provide details of any corrective actions taken or underway to address significant risks / concerns arising from the assessments at Question 9 above. Others please specify - The Company undertook internal assessment through its EHS, HR and IR function. Wages Discrimination at workplace Sexual harassment Forced/involuntary labour Child labour Forced Labour/ Involuntary Labour Wage Child Labour Sexual Harassment Workers BoD and KMP Employees other than 11.3 Lakhs appx. 6 9.1 Lakhs appx. 1,957 Note - 7.8 Lakhs appx. 1.9 Cr appx. 9.2 Lakhs appx. 48,544 1 6 Cr appx. 8 (In Rupees) Median remuneration/ salary/ wages of respective category 2,821 a) CEO & CFO are Directors and included in Board of Directors. b) Benefits 9. 8. 7. FY 21-22 Current Financial Year 6. Number of Complaints on the following made by employees and workers: Business Responsibility & Sustainability Reporting Integrated Annual Report 2021-22 237 All grievances are addressed as and when received by the respective Manufacturing Unit Heads/Project Managers/Business Unit Heads through Admin/IR in coordination with HR. All the grievances received are duly investigated and appropriate actions are taken to resolve the issue/complaint. Whenever required, disciplinary actions are initiated as deemed fit and assistance from regulatory authority is sought. 5. Describe the internal mechanisms in place to redress grievances related to human rights issues. The Company does not have a single focal point for addressing the human rights issues. However, the HR head of the respective IC is responsible for addressing the same. Do you have a focal point (Individual/ Committee) responsible for addressing human rights impacts or issues caused or contributed to by the business? 4. Salary Amount given above is the Median salary in the respective category. c) Directors Salary includes Commission. Discrimination at workplace Government Total (A) Category Maintenance of water structures by the VDC along with Panchayat Community awareness regarding making villages open defecation free (ODF) • Water made available with watershed and water conservation interventions Capacity buiding in sustainable agricultural practices Organised farmers community to form village development committees (VDC) and Farmers Producer Organisation (FPO) Open defecation leading to health issues and social disgrace Rural Population not having access to sanitation facilities (Men and Women) Drought Prone Locations Construction of toilets after ensuring water availability • Concerns Drought, Poverty, Migration Farmer community in water stressed and Vulnerable group The engagement with vulnerable groups is through Integrated Community Development Project (ICDP) and health initiatives. Some of the instances are given below: Provide details of instances of engagement with, and actions taken to, address the concerns of vulnerable/ marginalized stakeholder groups. Yes, outcome of the materiality assessment and stakeholder engagement exercise are taken forward to identify material topic of concern on sustainability for the Company. Based on these material topics of significance to the Company, further strategy development, policy setting, if required, objectives and goal setting with monitoring mechanism are developed and implemented. Whether stakeholder consultation is used to support the identification and management of environmental, and social topics (Yes/No). If so, provide details of instances as to how the inputs received from stakeholders on these topics were incorporated into policies and activities of the entity. Action Taken The Company has set up various committees on economic and ESG governance and performance monitoring. These committees are CSR & Sustainability Committee, ERM Committee, Stakeholder's Relationship Committee, Investor Cell, EHS Council, Green Campus Steercom etc. The CSR Committee is a committee constituted by the Board and is chaired by an Independent Director. The Board Risk Management Committee is constituted by the Board and is chaired by an Independent Director. The Stakeholders' Relationship Committee is constituted by the Board and is chaired by an Independent Director. The other Committees mentioned here are internally constituted committees. Quarterly performance update and reviews were conducted by the respective committees on these topics and consolidated performance report and outcome were presented to the Board in their quarterly meetings. Also, the Company has been conducting stakeholder engagement exercise from time to time on ESG topics. This stakeholder engagement exercise proceeds on a structural approach on frequency, delegation and reporting of outcome including stakeholders' feedback to the Board. As per their respective terms of reference, the various Committees (statutory as well as internal) meet periodically to review the performance of the Company in various areas. Village level monitoring committee formed to ensure ODF status of the village Rise in ground water table and water made available to population of 96,812 and 191 Ha land brought under cultivation in nine ICDP locations • Action Taken Unaffordable and inaccessible health services and peri-urban areas community from urban Gender related issues - no decision making power in household and community related issues Concerns Impact Underprivileged Vulnerable group Disadvantaged rural Business Responsibility & Sustainability Reporting Integrated Annual Report 2021-22 235 Women felt safe to use household toilet and saved social disgrace Reverse migration Increase in household agricultural income women 3. 2. 1. Provide the processes for consultation between stakeholders and the Board on economic, environmental, and social topics or if consultation is delegated, how is feedback from such consultations provided to the Board. Customer satisfaction and feedback. Project delivery, timeline, challenges that are faced during execution. As and when required As and when required A large bouquet of print and on-line in-house magazines (some location- specific, some business-specific), a CSR Programme newsletter Online news bulletins to convey topical developments their families • Reporting requirement, statutory compliance, support from authority and resolution. of issues. • Welfare initiatives for employee and corporate and line management Circular and messages from Employee satisfaction surveys, engagement surveys • No Employees Press Releases, Quarterly Results, Annual Reports, Sustainability / Integrated Reports, Stock Exchange filings, issue specific meetings, representations • Corporate social initiatives Employees' growth and benefits, their expectation, volunteering, career growth, professional development and continuing education and skill training etc. Suppliers/ contractors Community LARSEN & TOUBRO Leadership Indicators Statutory Financial Reports Statements Integrated Discussion and Analysis Report Management Corporate Overview Their expectation and feedback on impact/success of CSR project. Also review scale up potentials and further engagement scope. etc. Need and expectation, schedule, supply chain issue, need for awareness and other training, their regulatory compliance, EHS performance As and when required As and when required Direct engagement and through the Company's CSR project implementation partners (NGO) Beneficiaries) CSR Project Yes (Some of the Company's L&T Helpdesk, toll-free number Regular supplier and dealer meets No • Women were part of needs assessment and their critical concerns were prioritised Village level women groups formed and organised in SHGS Ensured equal representation of women in VDCs and Communty level Decision making 6% 12,217 196,755 68% 2,124 3,120 63% 232,075 2,070 Total Workers Other than permanent Permanent Workers 13% 6,571 51,012 3,307 11,451 5% 200,062 FY 21-22 LARSEN & TOUBRO Details of minimum wages paid to employees and workers, in the following format: 2. Statements Statutory Financial Reports Report Discussion and Analysis Integrated Management Corporate Overview Training on various issues related to human rights are covered under new employee induction, EHS training, POSH, code of conduct etc. 6% 13,575 235,195 7% 14,287 20% Current Financial Year Equal to Minimum 10,434 Total Employees Total (A) FY 20-21 (Previous Financial Year) (Current Financial Year) FY 21-22 Category 236 1. Employees and workers who have been provided training on human rights issues and policy(ies) of the entity, in the following format: No. of employee/ workers covered (B) Essential Indicators 178,239 population accessing the services - e.g. President of VDC Women are assuming community leadership positions • 483 SHGs formed with *65.6 Lakh savings Impact Affordable general health services along with consultations in specialised clinics provided through nine health centres across India and mobile health vans Principle 5: Businesses should respect and promote human rights No. % (B / A) Total (C) 42% 1,327 3,158 50% 3,256 6,540 Other than permanent 11% 5,244 47,854 16% 7,178 45,615 Permanent Employees % (D/C) employee/ workers covered (D) 52,155 3. FY 21-22* 4 Source: https://www.newfood magazine.com/article/153960/food-waste-climate/ NA Other Hazardous waste. Please specify, if any. (G) 2,447.5 2,215 Other Non-hazardous waste generated (H). Please specify, if any. (Break-up 46,457 44,484 by composition i.e. by materials relevant to the sector) Total (A+B + C + D + E + F + G + H) 51,459 48,044 For each category of waste generated, total waste recovered through recycling, re-using or other recovery operations (in metric tonnes) Category of waste (i) Recycled (ii) NA NA 1,002.2 (Hazardous); 36,548 (Non-Hazardous) 45,644.9 NA ΝΑ 44,912 (Non-Hazardous) 1.4 732.9 (Hazardous); (i) Category of waste For each category of waste generated, total waste disposed by nature of disposal method (in metric tonnes) Total (iii) Other recovery operations Re-used Incineration 37,500.2 NA 1,328 Metric tonnes of CO2 Equivalent Per Bn 893 864 #Scope excludes transit houses, guest houses, holiday homes and company owned residential facilities for both FY21-22 and FY20-21 *GHG emissions intensity have been derived as per the Scope of Reporting and as per ISO 14064-1 standard. The Company has also calculated intensity (tCO2e Bn). Note: Indicate if any independent assessment/ evaluation/assurance has been carried out by an external agency? (Y/N) If yes, name of the external agency. Yes- The assurance has been conducted by DNV India. Does the entity have any project related to reducing Green House Gas emission? If yes, then provide details. Yes, the Company undertakes projects and initiatives to reduce the Scope 1 and Scope 2 emissions and the Company has set a target of reduction of energy intensity by 2.5% per annum for Scope-1 and 2% per annum for Scope-2 over 2021 as baseline. The Company has also declared its commitment to become carbon neutral by 2040 and water neutral by 2035. For more details, refer to chapter on Natural Capital in the Integrated Report section. 241 Integrated Annual Report 2021-22 Business Responsibility & Sustainability Reporting Parameter Total Waste generated (in metric tonnes) Plastic waste (A) E-waste (B) Bio-medical waste (C) Construction and demolition waste (D) 2,439 NA 0.1 17 9 ΝΑ 6 99 (Current Financial Year) FY20-21# FY21-22# 8. Provide details related to waste management by the entity, in the following format: Radioactive waste (F) Battery waste (E) (Previous Financial Year) 210,763 (ii) Landfilling 0 (Non-hazardous); 138.8 (TOTAL) 4569 7 High Speed Rail Project (Package C4 and C6) L&T Heavy Engineering, Ranoli Plant Kattupalli Ship Building Facility MFF Hazira Proposed residential, I.T & Commercial building, Saki Vihar Road, Powai East, Mumbai - 400 072. Construction projects Yes Industrial Facility Yes Industrial Facility Yes 248 Yes Construction Yes 8 Proposed Mixed use development of residential, I.T, School & Commercial building Village Paspoli, Saki Vihar Road, Powai West, Mumbai - 400 072. Yes Industrial Facility TLT Factory Pithampur 11 Yes Construction 3 Dwarka Expressway Project, Package 3 Yes Construction DIAL Phase-3 A Expansion Project 9 Yes Construction 10 138.8 (Hazardous); Yes Yes 2,190 (Non-hazardous); 815.8 (Hazardous); 3,005.8 (TOTAL) ΝΑ 3,144.6 72.5 (Hazardous); 0 (Non-hazardous); 72.5 (TOTAL) 1,924 (Non-hazardous); 685.4 (Hazardous); 2,609.49 (TOTAL) NA 2,681.9 (iii) Other disposal operations Total Some of the waste data have been captured for the first time in FY22 #Scope excludes transit houses, guest houses, holiday homes and company owned residential facilities for both FY21-22 and FY20-21 NA: Data not available Note: Indicate if any independent assessment/ evaluation/assurance has been carried out by an external agency? (Y/N) If yes, name of the external agency. Yes, the assurance has been conducted by DNV India. 9. Briefly describe the waste management practices adopted in your establishments. Describe the strategy adopted by your company to reduce usage of hazardous and toxic chemicals in your products and processes and the practices adopted to manage such wastes. L&T is certified under ISO 14001:2015 and the scope covers its entire operations including offices, headquarters, construction projects and temporary facilities, manufacturing units and industrial facilities. Under the environmental management system, the Company has guidelines for comprehensive waste management (which is under revision now) for the identification, segregation, collection, recycling and final disposal. Wherever applicable the company follows 6R principles (Rethink, Reduce, Reuse, Recycle, Refuse and Repair) for waste management. Awareness sessions are undertaken for the employees who have a role and responsibility towards waste management. Performance is monitored and waste data is collected quarterly through the sustainability data management platform (SoFi). 242 Corporate Overview Management Discussion and Analysis Construction projects Mumbai Coastal Road Project (package 1 and 4) Mumbai Trans Harbour Link Project (Package 1 and 3) 2 1 Whether the conditions of environmental approval / clearance are being complied with? (Y/N) If no, the reasons thereof and corrective action taken, if any. No. Construction projects Type of Operations S. 10. If the entity has operations/offices in/around ecologically sensitive areas (such as national parks, wildlife sanctuaries, biosphere reserves, wetlands, biodiversity hotspots, forests, coastal regulation zones etc.) where environmental approvals / clearances are required, please specify details in the following format: LARSEN & TOUBRO Statements Statutory Financial Reports Integrated Report Location of operations/offices 274,028 Metric tonnes of CO2 Equivalent 533,423 Total energy consumption (A+B+C) Energy intensity per rupee of turnover (Total energy consumption/ turnover in rupees) Energy intensity (optional) – the relevant metric may be selected by the entity FY 21-22# FY 20-21# (Current Financial Year) (Previous Financial Year) 1,281,464 GJ 8,365,802 GJ 984,692 GJ 7,251,162 GJ 9,647,266 GJ 9,693 GJ/Bn 8,235,854 GJ 9,564 GJ/Bn #Scope excludes transit houses, guest houses, holiday homes and company owned residential facilities for both FY21-22 and FY20-21 Note: Indicate if any independent assessment/ evaluation/assurance has been carried out by an external agency? (Y/N) If yes, name of the external agency. Yes, the sustainability data assurance is carried out by DNV India. Does the entity have any sites / facilities identified as designated consumers (DCs) under the Performance, Achieve and Trade (PAT) Scheme of the Government of India? (Y/N) If yes, disclose whether targets set under the PAT scheme have been achieved. In case targets have not been achieved, provide the remedial action taken, if any. The Company does not have any sites / facilities identified as designated consumers (DCs) under the Performance, Achieve and Trade (PAT) Scheme of the Government of India. 3,251,265 2,001,310 (Current Financial Year) (Previous Financial Year) FY20-21# FY21-22# (iii) Third party water Energy consumption through other sources (C) (ii) Groundwater Water withdrawal by source (in kilolitres) Parameter Provide details of the following disclosures related to water, in the following format: 240 4. 3. (i) Surface water 1,369,437 Total fuel consumption (B) Parameter Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial Reports Statements LARSEN & TOUBRO 3. 4. and the CoC. The Company has laid down its CoC, which is applicable to Board members, senior management and employees. The objective is to be committed and vigilant towards the ethical conduct of business processes and instil a sense of ownership within the Company. All designated employees, including Board Members, adhere to the CoC and provide an annual declaration of their compliance. The Code covers all aspects of functioning, including anti-trust behaviour, information security, insider trading rules, professional engagements, use of Company assets and brand logo, intellectual property, human rights etc. A separate CoC has been extended to vendors and service providers which covers the need for compliance with environmental regulations, health and safety, labour practices, ethical behaviour, human rights aspects, minimum wages, freedom of association, collective bargaining, prohibition of child labour and forced and compulsory labour. The Company is committed to treating every employee with dignity and respect. The Company has formulated a policy on 'Protection of Women's Rights at Workplace' as per the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and Rules, 2013. The policy is applicable to all L&T establishments located in India. Further, the Company conducts regular audit and inspection through internal audit protocols by EHS and IR department on EHS and human rights issues. The scope of audit covers all project sites, manufacturing units and offices including the value chain partners (supply chain partners) that are active in the Company's construction projects. Quarterly compliance report is prepared by all business verticals and submitted to corporate compliance department for further review, record and action plan. Additionally, the top 25 suppliers and large number of other suppliers are assessed through a detailed checklist of more than 40 questions on EHS parameters. Is the premise/office of the entity accessible to differently abled visitors, as per the requirements of the Rights of Persons with Disabilities Act, 2016? Most of the permanent facilities and office buildings are accessible to differently abled visitors, as per the requirements of the Rights of Persons with Disabilities Act, 2016. Details on assessment of value chain partners: Child labour Forced/involuntary labour Sexual harassment Discrimination at workplace % of Value chain partners (by value of business done with such partners) that were assessed Currently, this is not being assessed. 2. 1. Details of total energy consumption (in Joules or multiples) and energy intensity, in the following format: Essential Indicators Principle 6: Businesses should respect and make efforts to protect and restore the environment Business Responsibility & Sustainability Reporting Integrated Annual Report 2021-22 Total electricity consumption (A) 239 Provide details of any corrective actions taken or underway to address significant risks / concerns arising from the assessments at Question 4 above. Others please specify - Wages 5. However, the Company's Suppliers CoC addresses many of these aspects. All suppliers have to necessarily sign the CoC for dealing with the Company and are expected to comply with its requirements. Not applicable 1,637,695 4,087,726 980,433 Tonnes Persistent organic pollutants (POP) Volatile organic compounds (VOC) Hazardous air pollutants (HAP) Others - (ODS) Tonnes *The data is partially reported for both the years (Current Financial Year)* (Previous Financial Year)* 0.9 1.0 0.1 8.3 0.2 9.4 0.6 2.6 615,035 Metric tonnes of CO2 Equivalent FY20-21*# (Previous Financial Year) FY21-22*# (Current Financial Year) Unit Total Scope 1 and Scope 2 emissions per rupee of turnover Tonnes Total Scope 2 emissions (Break-up of the GHG into CO2, CH4, N2O, HFCS, PFCs, SF6, NF3, if available) Parameter 7. Provide details of greenhouse gas emissions (Scope 1 and Scope 2 emissions) & its intensity in the following format: 6. Yes, the assurance is carried out by DNV India. Note: Indicate if any independent assessment/ evaluation/assurance has been carried out by an external agency? (Y/N) If yes, name of the external agency. Total Scope 1 emissions (Break-up of the GHG into CO2, CH4, N2O, HFCS, PFCs, SF6, NF3, if available) Tonnes Unit Particulate matter (PM) Water intensity (optional) - the relevant metric may be selected by the entity 11,237 9,454 Water intensity per rupee of turnover (Water consumed / turnover) 9,677,094 9,410,093 #Scope excludes transit houses, guest houses, holiday homes and company owned residential facilities for both FY21-22 and FY20-21 Note: Indicate if any independent assessment/ evaluation/assurance has been carried out by an external agency? (Y/N) If yes, name of the external agency. Total volume of water consumption (in kilolitres) 9,602,372 Total volume of water withdrawal (in kilolitres) (i + ii + iii + iv + v) 3,291,630 2,980,360 (v) Others (iv) Seawater desalinated water 9,997,484 12 Yes, the sustainability data assurance is carried out by DNV India. The Company has implemented a mechanism of Zero Liquid Discharge in 19 manufacturing units and office campuses out of its 20 units where the Company reuses and recycles all the wastewater generated after treatment. All the wastewater SOX NOx Parameter FY20-21 FY21-22 Please provide details of air emissions (other than GHG emissions) by the entity, in the following format: Has the entity implemented a mechanism for Zero Liquid Discharge? If yes, provide details of its coverage and implementation. is collected and treated in STP/ETPs and treated wastewater is completely recycled or reused as appropriate. The Company is in the process of conducting comprehensive water audits of these facilities. LARSEN & TOUBRO Statements Statutory Financial Reports Integrated Report Management Discussion and Analysis Corporate Overview 5. - Industrial Facility Industrial Facility - With treatment – please specify level of treatment Total water discharged (in kilolitres) FY 21-22* FY 20-21* (Current Financial Year) (Previous Financial Year) *Currently, the Company does not have an assessment of operations that could be in water stressed area, same would be done by FY24 Note: Indicate if any independent assessment/ evaluation/assurance has been carried out by an external agency? (Y/N) If yes, name of the external agency. Yes, the assessment has been conducted by DNV, India. Please provide details of total Scope 3 emissions & its intensity, in the following format: | | 246 Parameter Total Scope 3 emissions (Break-up of the GHG into CO2, CH4, N2O, HFCS, PFCs, SF6, NF3, if available) Total Scope 3 emissions per rupee of turnover Total Scope 3 emission intensity (optional) – the relevant metric may be selected by the entity Unit Discussion and Analysis Management Corporate Overview Yes, the assessment has been conducted by DNV, India. Note: Indicate if any independent assessment/ evaluation/assurance has been carried out by an external agency? (Y/N) If yes, name of the external agency. *In FY20-21 the data was not captured by the Company - #Excluding transit houses, guest houses, holiday homes and company owned residential facilities as part of the scope for both FY21-22 and FY20-21 Metric tonnes of CO2 Equivalent/ Billion INR (Previous Financial Year) (Current Financial Year) 4,976,909 Metric tonnes of CO2 equivalent FY20-21#* FY21-22# 5,000 Integrated Statutory Financial Report Reports Statements - No treatment - With treatment - please specify level of treatment Parameter Water withdrawal by source (in kilolitres) (i) Surface water (ii) Groundwater (iii) Third party water (iv) Seawater desalinated water (v) Others Total volume of water withdrawal (in kilolitres) Total volume of water consumption (in kilolitres) Water intensity per rupee of turnover (Water consumed / turnover) FY 21-22* FY 20-21* (Current Financial Year) (Previous Financial Year) ||||| 245 Integrated Annual Report 2021-22 Business Responsibility & Sustainability Reporting - No treatment (iv) Sent to third-parties - With treatment - please specify level of treatment - No treatment - With treatment - please specify level of treatment (iii) Into Seawater · No treatment (v) Others (ii) Into Groundwater - No treatment (i) Into Surface water Water discharge by destination and level of treatment (in kilolitres) Water intensity (optional) - the relevant metric may be selected by the Entity TLT Factory Puducherry 4. - With treatment - please specify level of treatment 3. LARSEN & TOUBRO 6. (i) Savings through reduction in raw material usage: ₹ 1.31 Cr. (ii) Emission Impact: 111 tCO2e (iii) Water Impact: 2525.6 KL (iv) Waste impact: 1.15 tonnes (v) Saving through reduction of water usage: 0.08 Cr (vi) Energy saving cost: 0.15 Cr. (i) Emission Impact: 4874 MT/year (ii) Energy saving cost: 1.5 million USD (iii) 30% higher travel speed (No load) 2 Source: https://timeforchange.org/plastic-bags-and-plastic-bottles-co2-emissions-during-their-lifetime/ 3 Source: https://foodprint.org/blog/plastic-water-bottle/ 247 Integrated Annual Report 2021-22 Business Responsibility & Sustainability Reporting 7. 8. Sr. Initiative undertaken No 5. Details of the initiative (Web-link, if any, Outcome of the initiative may be provided along-with summary) Promoting sustainable construction (i) Reduction in CO2 impact by using 6. Food waste composting All supply chain partners are required to sign a CoC which covers the need for compliance including environmental regulations. In FY23, the Company intends to assess some supply chain partners for environmental impacts as pilot projects. 9. Percentage of value chain partners (by value of business done with such partners) that were assessed for environmental impacts. No significant adverse impact reported from any value chain partners. A separate Code of Conduct (CoC) has been extended to vendors and service providers which covers the need for compliance with environmental regulations, health and safety, labour practices, human rights aspects, minimum wages, freedom of association, collective bargaining, prohibition of child labour and forced and compulsory labour, ethical behaviour, transparency in business processes and environment conservation. All new vendors/service providers need to sign the CoC as part of the initial empanelment process. Timely internal environmental management system audit for ISO 14001:2015 and external audits are conducted to evaluate compliance which also includes the Company's value chain partners (supply chain partners) too. Disclose any significant adverse impact to the environment, arising from the value chain of the entity. What mitigation or adaptation measures have been taken by the entity in this regard. Does the entity have a business continuity and disaster management plan? Give details in 100 words/ web link. The Company has established emergency preparedness plans at each project site to deal with the emergency situations. It also provides response procedures for preventing and mitigating the hazard & risk and environmental impacts arising from emergency situations including the provision for first aid. In the event of any occurrence of an emergency, the same shall be investigated and appropriate preventive measures would be initiated to avoid recurrence in future. Relevant information and training related to emergency preparedness and response shall be provided to the interested parties. The duties and responsibilities of all the workers are being communicated periodically. (ii) Impact on employee or society: 50 employees are trained & 135 people are benefited from the fertilizer. L&T Modular fabrication is into fabrication of modular structures for onshore and offshore installation. Fabrication of such structures involve extensive handling of individual steel members with weight ranging from 200 Kilograms to a higher range of 8,000 kilogram. (i) 1kg of food waste is equivalent to 2.5kg of CO2 emission, composting of 4 tonnes of food waste results in avoiding emissions around 10 tCO2e/year4 (ii) Water Impact: (a) Curing Compound: 2,020.8 KL (b) Superplasticizers: 44,479.2 KL (i) Emission Impact: Supplementary Cement Materials: 119,946 tCO2e (ii) Improving Hygiene in the workplace (iii) Reducing stagnation of food waste at Drains. (i) Recycling food waste. (ii) Reduction in the water usage by replacing conventional water curing with curing compound supplementary cementitious materials in concrete (iii) Savings through reduction in raw material usage: * 160 crores 5. Use of Crusher Dust (CRF-Crushed Rock Fines) and TBM (Tunnel Boring Machine) Excavated Muck instead of M-Sand in CLSM (Controlled Low strength Material) for Backfilling and Temporary Works reuse With respect to the ecologically sensitive areas reported at Question 10 of Essential Indicators above, provide details of significant direct & indirect impact of the entity on biodiversity in such areas along-with prevention and remediation activities. All the projects and industrial facilities listed in Question 10 of the Essential Indicators above, are either operating near coastal areas coming under CRZ Notification 2011 or forest and other sensitive zones as identified within the respective EIA studies conducted earlier (not in FY22) where Environmental Clearance (EC)/approval and permits as applicable are in place. The significant direct impact as identified in EIA study was on marine biodiversity for the Company's marine projects and pollution load to the nearby settlements, water bodies and forest. All the requisite environmental management plans including marine biodiversity conservation plan are in place and implemented. All the regulatory compliance reports are being submitted as mentioned in the EC/Approval terms and conditions. Further, all the applicable Consent to Establish (CTE) and Consent to Operate (CTO) are in place for Batching Plants, Precast Yards, Fabrication Yard, and Industrial Facilities as applicable. If the entity has undertaken any specific initiatives or used innovative technology or solutions to improve resource efficiency, or reduce impact due to emissions / effluent discharge / waste generated, please provide details of the same as well as outcome of such initiatives, as per the following format: Sr. Initiative undertaken No 1. Plastic Waste Management Details of the initiative (Web-link, if any, Outcome of the initiative may be provided along-with summary) The waste collection & segregation is conducted daily to minimize the waste generated at the site, minimize environmental impact, keep workplace, aisles hazard free. With the help of a third-party manufacturer & supplier-PGS enterprises India LTD., Pune, WET IC sends its plastic waste to be recycled into plastic granules, polyfuel, etc. (i) Waste Impact: 331.6 kg/Yr Plastic Waste recycled into Polyfuel/Granules (ii) 108 Staff and 194 Workmen participated in the initiative, and they were also trained by the IC. (iii) Emission Impact: 665 kgCO2e per annum emissions avoided (Per kg of plastic, about 6 kg of carbon dioxide is emitted during production and incineration)² (iv) Water Impact: Water footprint is about 5.3 litres of water to produce typical single-use water³. 2. (iii) Using AC condensate water for domestic (iii) Waste Impact: 135 tonnes/Year (b) Sewage Treatment Plant (STP): 96,000 KL/yr (ii) Usage of organic waste for treating kitchen & organic waste Storm Water Drain for Groundwater recharge Extension of electrically powered gantry cranes Alternate material for Backfilling and Temporary works in Underground Metro Station (iv) Highly efficient HVAC equipment lifts with Regen drive for energy savings 4. (a) Rainwater Tanks: 60 KL/year Water Impact: (ii) Emission Impact: 700 tCO2e/year (i) LEED Platinum Certification for AM (i) Used percolation pits along the periphery Naik Tower 3. (iii) Water withdrawal, consumption and discharge in the following format: Parameter (i) Name of the area 12. Is the entity compliant with the applicable environmental law/ regulations/ guidelines in India; such as the Water (Prevention and Control of Pollution) Act, Air (Prevention and Control of Pollution) Act, Environment protection act and rules thereunder (Y/N). All the Company projects and industrial facilities follow the applicable environmental law/ regulations/ guidelines in India, such as the Water (Prevention and Control of Pollution) Act, Air (Prevention and Control of Pollution) Act, Environment Protection Act and rules thereunder. However, two cases of noncompliance have been raised by respective authority in its construction vertical in Delhi NCR region which are presented here. 243 Integrated Annual Report 2021-22 Business Responsibility & Sustainability Reporting If not, provide details of all such non-compliances, in the following format: S. No. 1 Specify the law / regulation / guidelines which was not complied with DPCC/NGT-AIR Pollution/ CMC-IV/2021/1005 dated 02/07/2021 (ii) Nature of operations Dust generation leading to air pollution at the Company's Pragati Maidan Construction Project Any fines / penalties / action taken by regulatory agencies such as pollution control boards or by courts Yes, a penalty of 5 Lakhs was imposed by Delhi Pollution Control Committee (DPCC) Corrective action taken, if 2. of 10 lakh was imposed by Regional Office, Gurugram (N) Haryana State Pollution Control Board 1. Regular water sprinkling Yes, a penalty Dust generation leading to air pollution at Dwarka Expressway Project of Air Act, 1981 & Environmental compensation. Relevant Web link Air Pollution under the Provisions materials using Green cloth. 3. Covering of excavated 2. Deployed dedicated water sprinkling tankers to control dust. 1. Installed 4 Anti-Smog guns around the project area. As instructed by DPCC (Delhi Pollution Control Board), the following steps were implemented: any 2 Removal of dust on live roads Results communicated in public domain (Yes/No) None Yes 13 TLT -TLTRS Kancheepuram Industrial Facility Yes 14 ISP PARWATI PHASE III & IV Construction Yes 15 L&T Defence Vizag facility Industrial Facility Yes 16 L&T Defence Coimbatore Facility Industrial Facility Yes No. Date EIA Notification Name and brief details of project The Company has not conducted any environmental impact assessments (EIA) of projects or industrial facility in FY22. For the construction projects, it is under the scope of the proponents, and the Company ensures that all regulatory permits and approvals are in place before starting of the construction work. For the ongoing construction projects, all the applicable EIAs are carried out by the proponent before the construction project is awarded to the Company. The above selected projects mentioned herein are the Company's major construction projects and industrial facilities. 11. Details of environmental impact assessments of projects undertaken by the entity based on applicable laws, in the current financial year: Whether conducted by independent external agency (Yes/No) Yes A.M. Naik Heavy Engineering Complex 18 Yes Industrial Facility L&T Defence Talegaon Facility 17 Industrial Facility 3. Provide details of the non-compliance 4. Report Statutory Financial Reports Statements 2. Provide the following details related to water discharged: No wastewater is discharged from any office or plant locations. LARSEN & TOUBRO FY 20-21* Parameter (Current Financial Year) (Previous Financial Year) Water discharge by destination and level of treatment (in kilolitres) (i) To Surface water | | - No treatment - With treatment - please specify level of Treatment (ii) To Groundwater - No treatment - With treatment - please specify level of Treatment (iii) To Seawater Currently mapping is in progress for the Company's permanent facilities and offices. The data will be provided for FY23. For each facility / plant located in areas of water stress, provide the following information: Water withdrawal, consumption and discharge in areas of water stress (in kilolitres): Yes, the assessment has been conducted by DNV, India. Note: Indicate if any independent assessment/ evaluation/assurance has been carried out by an external agency? (Y/N) If yes, name of the external agency. *Data for the above are not captured for both FY21-22 and FY20-21. Total water discharged (in kilolitres) Discussion and Analysis - With treatment - please specify level of Treatment (v) Others - With treatment - please specify level of treatment - No treatment (iv) Sent to third-parties Tree plantation - No treatment - No treatment Integrated - With treatment - please specify level of Treatment Corporate Overview From non-renewable sources Total energy consumed from renewable sources (A+B+C) Energy consumption through other sources (C) Total fuel consumption (B) Total electricity consumption (A) From renewable sources FY21-22# Parameter 244 1. Leadership Indicators 5. Use of anti-smog gun Management Covering of loose materials, waste and loads during transportation FY20-21# (Current Financial Year) GJ (Previous Financial Year) GJ Provide break-up of the total energy consumed (in Joules or multiples) from renewable and non-renewable sources, in the following format: 97,044 Yes, the assessment has been conducted by DNV India. 127,129 Note: Indicate if any independent assessment/ evaluation/assurance has been carried out by an external agency? (Y/N) If yes, name of the external agency. #Scope excludes transit houses, guest houses, holiday homes and company owned residential facilities for both FY21-22 and FY20-21 9,520,137 Total energy consumed from non-renewable sources (D+E+F) Energy consumption through other sources (F) 8,138,810 887,648 7,251,162 8,365,802 1,154,335 Total fuel consumption (E) Total electricity consumption (D) 97,044 127,129 Provide the following information relating to data breaches: Integrated Annual Report 2021-22 257 NIL (b) Percentage of data breaches involving personally identifiable information of customers - There were no data breaches during the year. (a) Number of instances of data breaches along-with impact LARSEN & TOUBRO LIMITED 5. The Company's business offerings can be found on the website: https://www.larsentoubro.com/corporate/our-businesses/ 2. Steps taken to inform and educate consumers about safe and responsible usage of products and/or services. The Company does not operate in B2C model except for few heavy machines and machine parts for industrial and defence use. For aforementioned products, regular interaction with the client/customers are conducted during the execution phase of a project. The Company extends an opportunity to explain about its products, innovations, new technology and techniques that are implemented to enhance product quality and work methodology. Not applicable, as the Company operates in B2B model. Does the entity display product information on the product over and above what is mandated as per local laws? (Yes/No/ Not Applicable) If yes, provide details in brief. Did your entity carry out any survey with regard to consumer satisfaction relating to the major products / services of the entity, significant locations of operation of the entity or the entity as a whole? (Yes/No) During execution of construction projects and transport of heavy machinery, the clients and concerned departmental authorities are informed through transmittal letters and their permissions are sought for road closure, traffic diversion and isolation of essential services. 4. 3. Mechanisms in place to inform consumers of any risk of disruption/discontinuation of essential services. available). Channels/platforms where information on products and services of the entity can be accessed (provide web link, if Regd. Office L&T House, Ballard Estate, Mumbai 400 001. CIN L99999MH1946PLC004768 The average customer satisfaction score during FY22 was 89%. Email: igrc@larsentoubro.com • Website: www.larsentoubro.com Tel No: 022-67525656 • Fax No: 022-67525858 7) To consider and, if thought fit, to pass as an ORDINARY RESOLUTION the following: "RESOLVED THAT pursuant to the provisions of Regulation 23(4) of the SEBI (Listing Obligations Notice 1. 258 8) To consider and, if thought fit, to pass as an ORDINARY RESOLUTION the following: "RESOLVED THAT pursuant to the provisions of Regulation 23(4) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the applicable provisions RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorised to delegate all or any of the powers conferred on it to any Committee of Directors and/or Managing/Whole-time Director(s) of the Company and to do all such acts and take all such steps as may be considered necessary or expedient to give effect to the aforesaid resolution. RESOLVED FURTHER THAT all actions taken by the Board in connection with any matter referred to or contemplated in this resolution, be and are hereby approved and confirmed in all respects." and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the applicable provisions of the Companies Act, 2013 alongwith the Rules made thereunder and other applicable laws including any amendments, modifications, variations or re-enactments thereof, the Company's Policy on Related Party Transactions and as per the recommendation/approval of the Audit Committee and the Board of Directors of the Company, approval of the Members of the Company be and is hereby accorded for entering into and/or continuing to enter into transaction(s) with Larsen Toubro Arabia LLC, L&T Modular Fabrication Yard LLC, Larsen & Toubro Electromech LLC, Larsen & Toubro Heavy Engineering LLC, Larsen & Toubro Kuwait General Contracting Co WLL, subsidiaries of the Company and Related Parties within the meaning of Section 2(76) of the Companies Act, 2013 and Regulation 2(1)(zb) of the Listing Regulations for providing Parent Company Guarantees or Corporate Guarantees or Comfort Letters or Undertakings, on behalf of the above subsidiaries, from this Meeting till the next Annual General Meeting of the Company or for a period of fifteen months, whichever is earlier, upto an amount not exceeding * 6,000 crore or US$ 800 Mn, whichever is higher, on such terms and conditions as may be decided by the Board of Directors/Audit Committee of the Company as they may deem fit. 11 RESOLVED FURTHER THAT Mr. S.N. Subrahmanyan in his capacity as Chief Executive Officer and Managing Director, be paid remuneration as may be fixed by the Board, from time to time, as prescribed under the Companies Act, 2013 and within the limits approved by the Members as per the details given in the explanatory statement. 2027. To consider and, if thought fit, to pass as an ORDINARY RESOLUTION the following: "RESOLVED THAT pursuant to Sections 196, 197, 203 and other applicable provisions, if any, of the Companies Act, 2013 read with Schedule V of the said Act and the Rules made thereunder, approval be and is hereby granted to the re-appointment of Mr. S.N. Subrahmanyan (DIN: 02255382) as the Chief Executive Officer and Managing Director of the Company with effect from July 1, 2022 upto and including June 30, To appoint a Director in place of Mr. T. Madhava Das (DIN: 08586766), who retires by rotation and is eligible for re-appointment; (DIN: 07648203), who retires by rotation and is eligible for re-appointment; 6) 5) 4) To appoint a Director in place of Mr. S. V. Desai 3) To appoint a Director in place of Mr. Subramanian Sarma (DIN: 00554221), who retires by rotation and is eligible for re-appointment; To declare a dividend on equity shares; 2) 1) To consider and adopt the audited financial statements of the Company for the year ended March 31, 2022 and the Reports of the Board of Directors and Auditors thereon and the audited consolidated financial statements of the Company and the report of the auditors thereon for the year ended March 31, 2022; NOTICE IS HEREBY GIVEN THAT the Seventy Seventh Annual General Meeting of LARSEN & TOUBRO LIMITED will be held through VIDEO CONFERENCING OR OTHER AUDIO-VISUAL MEANS on Thursday, August 04, 2022 at 03.30 P.M. IST to transact the following business:- Notice Leadership Indicators State Statutory Financial Reports Statements 10,888 23,590 66 5556 HIV Aids Awareness Prevention & Support System 60 Blood Donation Awareness & Camp, Kolkata 'Aadhaar' Skill Building for Community Women 57 Health & Hygiene Programme for Adolescent Health Awareness 83,028 58 Awareness and Engagement with Community 2,805 2,015 420 % of beneficiaries from vulnerable and marginalized groups No. of persons benefitted from CSR Projects 891 253 Integrated Annual Report 2021-22 254 Business Responsibility & Sustainability Reporting 51 52 53 Providing Educational Kits 54 Rural Health Support Sr. CSR Project No Vocational Training for Women 59 136 Support to Community Development Centre at Mora Providing Educational Kits 1,284 68 Repairs to Infrastructure Facilities in School 69 Skills Development Training for Rural Youth, Kanchipuram 70 Skills Development Training for Rural Youth, Panvel 71 586 Skills Development Training for Rural Youth, Pilkhuwa 72 Repairs to Infrastructure Facilities in School 80 73 Renovation of Community Center at Belpada Village 120 9,925 100 % of the Projects serve the beneficiaries who are from the 571 under privileged, marginalised, 496 vulnerable and backward 760 community of the society. 812 Skills Development Training for Rural Youth, Jadcherla Skills Development Training for Rural Youth, Ahmedabad Awareness and Cancer Detection 67 6,518 61 Alternate Energy for Schools 9,127 62 Maintenance of Public Green Spaces Cannot be ascertained 63 Providing Digital Classrooms in Schools 7,739 64 Awareness Programme and Engagement with Community 105 65 66 3,800 115 25 Skill Development Programme 3,402 1,500 436 29,227 Cannot be ascertained 44,239 410 1,430 1,268 4,175 Support to Study Centers for Urban Children from Vulnerable Communities 36 Educational Support for Special Children 37 1,405 178,239 16,297 3,571 Enhancing Education And Infrastructure Support, Bhim Covid Response - Provision of Oxygen Generating Plants Support to Health & Dialysis Centers and Mobile Medical Units Educate and Empower Children at Risk of Dropping out in Pathardi Women Health and Child Nutrition Programme, Kumbhalgarh Infrastructure Support and Education Enhancement Programme, Kumbhalghar Skill Training Academy, Madh Community Health Centre, Thane 29 Maintenance of Public Green Spaces 30 31 www www N N N Educational Support to Vulnerable Children Skills Development Training for Rural Youth, Serampore 32 Providing Educational Support to Tribal Communities No. of persons benefitted from CSR Projects % of beneficiaries from vulnerable and marginalized groups 75,000 17,158 9,000 Support to Evening School For Children from Vulnerable Communities 44 590 100% of the Projects serve the 415 beneficiaries who are from the under privileged, marginalised, 44 Skill Upgradation Training for Women Construction Workers 45 Oxygen Concentrator Machines to Government Hospitals, Chennai (Covid Relief) 73 500 46 46 E-Content Development for Skills Development Training Institutes for Rural Youth Cannot be ascertained 47 Providing Skill Training to Youth on Data Entry 48 Support for Education to Vulnerable Children 49 Mobility Aids and Mainstreaming 50 Cannot be ascertained 74 'Green Hands' - Building Awareness for Greenery Development in Nearby Communities Cannot be ascertained vulnerable and backward community of the society. 38 Every Child a Scientist Project 39 41 NA W School Infrastructure Development 40 School Infrastructure Development Support for Special Education for Abandoned Children with Intellectual Disability 95 322 4,456 109 42 Infrastructure Support for Blood Storage 43 Skills Development Training for Rural Youth, Cuttack 998 75 103 Plastic Recyclothon 202,560 104 Village Development Programme 889 10,442 100% of the Projects serve the 4,510 beneficiaries who are from the under privileged, marginalised, 24,007 vulnerable and backward 577 community of the society. 500 105 100 106 Infrastructure for COVID relief Cannot be ascertained 107 Oxygen Augmentation - PSA O2 Unit Civil & electric work Infrastructure support for skilling Providing drinking water facilities 102 Wastewater Treatment, Alva village 95 Primary health care programme 3,164 96 Early diagnostic career guidance for school children 5,561 Infrastructure support for PHC, Minjur Cannot be ascertained 98 Community development for water and sanitation Programme 99 Village Development Programme 100 Water Management Initiatives 101 Cannot be ascertained 108 Health infrastructure support 300 Planning 255 Integrated Annual Report 2021-22 2. 3. Business Responsibility & Sustainability Reporting • • • Construction Capability Project Quality Management Customer complaints are received through email, transmittal letter communications and verbal communications directly to project management teams. A complaint register is maintained for customers to record their complaints as per the established QMS documented information. The customers can also lodge complaint through the toll-free number and email address provided on the Company website. Turnover of products and/ services as a percentage of turnover from all products/service that carry information about: As a percentage to total turnover Environmental and social parameters relevant to the product Safe and responsible usage • 70 Designing / Detail Engineering The Company does not have any specific consumer products except few heavy machines and machine parts for Industrial and Defence use. The Company collects feedback forms from client/customer every six months as per the Company's established QMS documented information. Customers evaluate the performance and provide rating on the following parameters: 109 Oxygen Augmentation - PSA Oxygen Generation Unit Cannot be ascertained 110 Covid-19 Vaccination 11,663 111 L&T Public Charitable Trust Total 143,638 1,127,544 The Company's projects are designed to serve the beneficiaries from the under privileged, marginalised, vulnerable and backward communities of the society. Principle 9: Businesses should engage with and provide value to their consumers in a responsible manner Essential Indicators 1. Describe the mechanisms in place to receive and respond to consumer complaints and feedback. • Integrated Community Development Programme, Sewantri Health & Nutrition at Child Care Centre 200 83 84 82 Maintenance of Public Green Spaces Multi Skill Training Center for Rural Youth Water Conservation Initiatives for Community 800 800 80 00 00 Wash Facilities for Schools 85 86 Maintenance of Public Green Spaces 87 Awareness Programme and Engagement with Community Cannot be ascertained 125 Education Support for Special Children 81 10,599 Infrastructure and Learning Enhancement Programme in Government Schools Construction Skill Training Institute for Rural Youth, Attibelle 908 76 Infrastructure Development at Government Schools 14,714 77 Infrastructure Development (Solar Power System) in Community 3,000 78 Basic Infrastructure Upgradation in Government School 3,295 79 Skills Development Training for Rural Youth, Hyderabad 349 80 8,000 2,247 178 7,800 89 Education Development Programme, Vadodara 5,076 90 Engineering Futures Programme - STEM intervention 1,595 91 Personality development and life skills Programme for children 'Just for Kicks', Mumbai 789 92 97 23000 2 School on Wheels' Education support for children 260 93 Infrastructure support to school 3,197 94 Education Development Programme, Mumbai No. of persons benefitted from CSR Projects 101 Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial Reports Statements LARSEN & TOUBRO 88 20% Sr. CSR Project No % of beneficiaries from vulnerable and marginalized groups STEM Education Project in Urban Schools Women Health and Child Nutrition, Gudiyatham 28 NA: Data not available 2. 3. 250 Provide information on project(s) for which ongoing Rehabilitation and Resettlement (R&R) is being undertaken by your entity, in the following format: Not applicable. No rehabilitation and resettlement were undertaken by the entity during this reporting period. stakeholder participation. Sr. No District No. of Projects Affected families % of PAFS covered by R&R Amount paid to PAFs in the FY (in INR) Describe the mechanisms to receive and redress grievances of the community. Name of the project for which R&R is going Listing-Compliance.aspx https://investors.larsentoubro.com/ Web Link if available Business Responsibility & Sustainability Reporting Principle 8: Businesses should promote inclusive growth and equitable development Essential Indicators 1. Details of Social Impact Assessments (SIA) of projects undertaken by the entity based on applicable laws, in the current financial year. Name and brief detail of the project SIA Notification Number Date of Notification Whether conducted by independent external agency A third-party social audit was conducted, covering L&T's key CSR thematic areas of education, health, EHS, skill development and water & sanitation. Projects across geographical locations were evaluated on key parameters of efficiency, effectiveness and ΝΑ ΝΑ Yes (Thinkthrough Consulting, New Delhi) Results communicated in public domain Yes At the Company's construction sites, public complaints are collected through suggestion box and mail. The complaints or grievances received from community is addressed by the site management involving the industrial and administration department and also the clients, as applicable. Any issue which is unresolved or needs management intervention is escalated to the respective business heads. Any community member can raise complaint on Company's toll-free number and email address provided at Company's website which is monitored, addressed and proper record is maintained under Whistle Blower Policy. For CSR Projects In the Community based CSR projects, L&T representative from CSR team facilitates the interaction between the beneficiary groups, addresses concerns and resolves issues if any. Process followed is as under: * 2,149 Cr Not Available *This percentage value is based on the seven mega projects with project value over 5,000 crore and the calculation is done for material sourced directly within the district and neighbouring districts to the total project cost of these seven projects. Leadership Indicators 1. Provide details of actions taken to mitigate any negative social impacts identified in the Social Impact Assessments (Reference: Question 1 of Essential Indicators above): 2. Details of negative social impact identified No negative social impact has been identified in social impact assessment. NA: Not available Corrective action taken NA Provide the following information on CSR projects undertaken by your entity in designated aspirational districts as identified by government bodies: 3. Sr. No. 1 Aspirational District 18.8% * Integrated Annual Report 2021-22 Previous Financial Year FY 21-22 Current Financial Year 4 % (2,559 Cr) (i) During monthly or quarterly review meetings community conflicts that impact the implementation or outcomes of the project are discussed. (ii) During the quarterly review visit by L&T representative, concerns and issues are discussed with the community-based groups e.g. Farmer's Association, Self Help Groups or Village Development Committees. (iii) L&T along with other stakeholders analyse the conflicts, discuss the alternatives, pros and cons and identify the probable strategies/solutions. Community-groups are encouraged to resolve the issues by negotiating with the concerned persons or groups in the community. Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial Reports Statements LARSEN & TOUBRO (iv) Community Groups are empowered by disseminating relevant knowledge, information, conducting skills training and encouraging them to assume leadership in conflict management. (v) If the community themselves are unable to resolve a certain conflict, L&T representatives intervene and facilitate negotiations between different groups in the community and stakeholders. 4. Percentage of input material (inputs to total inputs by value) sourced from suppliers: Directly sourced from MSMEs/small producers Sourced directly from within the district and neighbouring districts FY 20-21 Vishakhapatnam (AP) Skills training, Education, Environment and Covid relief 249 Frequency of review by Board National National 3. Bombay Chamber of Commerce & Industry (BCCI) State 4. Bureau of Indian Standards Associated Chambers of Commerce and Industry of India (ASSOCHAM) National Construction Industry Development Council (CIDC) National 6 Confederation of Indian Industry (CII-CESD and CII - GBC) National 7 5. 2. Association of Business Communicators of India 1. Corporate Overview Management Integrated Statutory Financial Discussion and Analysis Report Reports Statements LARSEN & TOUBRO Principle 7: Businesses, when engaging in influencing public and regulatory policy, should do so in a manner that is responsible and transparent 1. A. Number of affiliations with trade and industry chambers/ associations. 2. B. List the top 10 trade and industry chambers/ associations (determined based on the total members of such body) the entity is a member of/ affiliated to. S. Name of the trade and industry chambers/ associations No. Reach of trade and industry chambers/ associations (State/National) Federation of Indian Chambers of Commerce and Industry (FICCI) National 8 Indian Institute of Chemical Engineers (IIChE) 15 Society of Indian Defence Manufacturers (SIDM) National Provide details of corrective action taken or underway on any issues related to anti- competitive conduct by the entity, based on adverse orders from regulatory authorities: During the year, there were no such cases. Name of authority Brief of the case Corrective action taken Leadership Indicators 1. Details of public policy positions advocated by the entity: Given L&T's expertise, the Company proactively engages with various stakeholders including industry chambers, associations, governments and regulators and provides its inputs on various areas such as infrastructure development and construction, renewable energy, space, health and safety, amongst others. Over the years, L&T executives have played a key role in helping shape public policy and been invited to several committees and task forces. The Company is committed to engage in the public policy advocacy process in a responsible and ethical manner. Sr. No. Public Policy Covered Method restored for Whether information in such advocacy public Domain National Web Link if available India Lead Zinc Development Association (ILZDA) National National 9 National Safety Council National 10 National Fire Protection Institution National 11 Indian Electrical and Electronics Manufacturers' Association (IEEMA) National 12 India Smart Grid Forum (ISGF) National 13 Central Board of Irrigation and Power (CBIP) 14 Recycling and/or safe disposal 2 3 504 100% of the Projects serve the beneficiaries who are from the 9 Early Childhood Intervention through Pre-School Readiness Programme 504 under privileged, marginalised, vulnerable and backward community of the society. Support to Community Learning Centers for Urban Children from Vulnerable Communities 10 1,308 11 Early Childhood Intervention through Pre-School Readiness Programme 861 12 Infrastructure Improvement of Schools and Anganwadi Centers, Mobile Toy Van Outreach 8 310 Support to Community Learning Centers Through Study Centers & Balwadis Cannot be ascertained 3 Covid-19 Emergency Response (Ventilators) Cannot be ascertained 4 Covid-19 Emergency Response 9,200 5 Repair and Renovation of Day Care Center, for Children 1,000 10 6 STEM Programme In Mumbai For Schools 50 7 3,571 Bhim Community Development Activities 3156 Autocad Training for Underprivileged Youth 34 Infrastructure Development Support at School 35 18 19 20 21 22 1 2 3 4 5 23 24 25 26 27 33 Maintenance of Public Green Spaces (Saki Vihar Median & Nashik Flyover garden) No Sr. 14 Integrated Community Development Programme, Devgaon Integrated Community Development Programme, Nagzari Integrated Community Development Programme, Gudiyatham 17 Community Sanitation and Awareness, Gudiyatham 20,037 8,355 7,853 30,376 Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial Reports Statements LARSEN & TOUBRO CSR Project Begusarai (Bihar) Covid relief 2 No. of persons benefitted from CSR Projects 12,880 Naupara (Odisha) Covid Relief Rayagada (Odisha) Covid Relief Virudhunagar (Tamil Nadu) Covid Relief Telangana (Adilabad) Covid Relief TOTAL Amount spent (In INR) Nabarangpur (Odisha) Covid Relief 26,624,897 178,416 773,000 443,000 7,640,050 330,000 7,136,211 990,000 Balangir (Odisha) Covid Relief Gadchiroli (Maharashtra) Covid Relief 14 Bastar (Chhattisgarh) Education 4 Hazaribag (Jharkhand) Education 5 Ranchi (Jharkhand) Education 69 6 Kalburgai (Karnataka) Covid Relief Singrauli (MP) Covid Relief 8 9 10 11 0 1 2 3 4 12 29,972 330,000 300,000 335,000 Owned/ Acquired (Yes/ No) Benefit (Yes/No) Benefits of calculating benefit share Details of corrective actions taken or underway, based on any adverse order in intellectual property related disputes wherein usage of traditional knowledge is involved: Name of authority 6. Details of beneficiaries of CSR Projects: 252 Brief of the case Corrective action taken Sr. CSR Project No 1 Awareness Programmes and Engagement with Community traditional knowledge % of beneficiaries from vulnerable and marginalized groups Intellectual Property based upon 5. 2,323,775 7,590,784 55,025,105 (a) Do you have a preferential procurement policy where you give preference to purchase from suppliers comprising marginalized /vulnerable groups? L&T Limited is in construction and engineering business, and majority of the Company's procurement is of industrial origin and procured in bulk. The Company does not have a preferential procurement policy to purchase from suppliers comprising marginalized /vulnerable groups. (b) From which marginalized /vulnerable groups do you procure? Not Applicable. 251 Integrated Annual Report 2021-22 Business Responsibility & Sustainability Reporting 4. (c) What percentage of total procurement (by value) does it constitute? Not applicable. Although the Company engages some of the marginalised and vulnerable groups (Women self-help group, local farmers, small businessman) for its canteen operation for food supplies, it is very negligible as compared to the total procurement. The food supplies procured for three canteen operations (Talegaon, Knowledge Campus Vadodara and AMN Hazira Campus) amounts to 43.4 L for FY22. Details of the benefits derived and shared from the intellectual properties owned or acquired by your entity (in the current financial year), based on traditional knowledge: Not applicable as the Company does not have any intellectual properties owned or acquired by the entity (in the current financial year), based on traditional knowledge. Sr. No. Number of consumer complaints in respect of the following: 60 Pending resolution at end of year Unfair Trade Practices Restrictive Trade Practices Services Delivery of essential Data privacy Advertising year year Remarks Other Pending resolution at end of Remarks year Received during the (Previous Financial Year) FY20-21 (Current Financial Year) FY21-22* Not applicable as the Company does not have specific consumer product or product range except few heavy machines and machine parts for industrial and Defence use. Received during the | | | Cyber-security *The Company is putting a process to compile the above data for FY23 LARSEN & TOUBRO Management Integrated Discussion and Analysis Report Corporate Overview 256 | | | Provide details of any corrective actions taken or underway on issues relating to advertising, and delivery of essential services; cyber security and data privacy of customers; re-occurrence of instances of product recalls; penalty / action taken by regulatory authorities on safety of products/services. Yes, the Company has a framework/ policy on cyber security and risks related to data privacy, available at https://www.larsentoubro.com/corporate/privacy-policy/. Does the entity have a framework/policy on cyber security and risks related to data privacy? If available, provide a web-link of the policy 6. None. Reason for call Number Voluntary recalls Forced recalls The Company does not have any specific consumer products except few heavy machines and machine parts for industrial and defence use. No product recalls (voluntary or forced) were made on grounds of safety in FY22. |||| | | | Details of instances of product recalls on account of safety issues: 4. 5. [r] E-voting LARSEN & TOUBRO Statutory Financial Reports Statements Integrated Report Discussion and Analysis Members who would like to express their views or ask questions during the AGM may register themselves as a speaker by sending their request from their registered email address mentioning their name, DP ID and Client ID/folio number, PAN, mobile number to LNTGOGREEN@larsentoubro.com on or before Monday, August 1, 2022. Those Members who have registered themselves as a speaker and have received a confirmation from the Company will be allowed to express their views/ask questions during the AGM. The Company reserves the right to restrict the number of speakers depending on the availability of time for the AGM. Corporate Overview 266 Members who are not able to join this Meeting over VC/OAVM will be able to view the live webcast of proceedings of AGM by logging on the e-voting website of NSDL by following remote e-voting instructions mentioned in this Notice. The businesses as set out in this Notice may be transacted through electronic voting system and the Company will provide a facility for voting by electronic means. In compliance with the provisions of Section 108 of the Act, read with Rule 20 of the Companies (Management and Administration) Rules, 2014, Standard 2 of the Secretarial Standards on General Meetings and Reg. 44 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company is pleased to offer the facility of voting through electronic means. The said facility of casting the votes by the members using electronic means (remote e-voting) will be provided by NSDL. Please note that participants connecting from Mobile Devices or Tablets or through Laptop via Mobile Hotspot may experience Audio/Video loss due to fluctuation in their respective network. It is therefore recommended to use Stable Wi-Fi or LAN Connection to mitigate any kind of aforesaid glitches. Members seeking any information with regard to the accounts or any matter to be placed at the AGM, are requested to write to the Company on or before Thursday, July 28, 2022 through email to IGRC@larsentoubro.com. The same will be replied by the Company suitably. Please note that, members' queries/questions will be responded to only if the shareholder continues to hold the shares as on the cut-off date i.e Thursday, July 28, 2022. Management A person whose name is recorded in the Register of Members or in the Register of Beneficial Owners maintained by the Depositories as on the cut-off date of Thursday, July 28, 2022 shall be entitled to avail the facility of remote e-voting or e-voting on the day of the Meeting. Persons who are not members as on the cut-off date should treat this Notice for information purposes only. "RESOLVED THAT pursuant to the provisions of Regulation 23(4) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the applicable provisions of the Companies Act, 2013 along with the Rules made thereunder and other applicable laws including any amendments, modifications, variations or re-enactments thereof, the Company's Policy on Related Party Transactions and as per the recommendation/approval of the Audit Committee and the Board of Directors of the Company, approval of the Members of the Company be and is hereby accorded for entering into and/or continuing to enter into contract(s)/transaction(s) with L&T Special Steels and Heavy Forgings Private Limited, subsidiary of the Company and a Related Party within the meaning of Section 2(76) of the Companies Act, 2013 and Regulation 2(1)(zb) of the Listing Regulations in the nature of a) sale, purchase, lease or supply of goods or business assets or equipment; b) availing or rendering of services; c) transfer of any resources, services or obligations to meet its business objectives/ requirements ("Related Party Transactions") from this Meeting till the next Annual General Meeting of the The remote e-voting period commences on Monday, August 01, 2022 at 9.00 A.M and ends on Wednesday, August 03, 2022 at 05.00 P.M. During this period, members of the Company holding shares either in physical or dematerialised form, as on the cut-off date of Thursday, July 28, 2022 may cast their vote by remote e-voting. The remote e-voting module shall be disabled by NSDL for voting thereafter. Instructions for e-voting during the AGM: The e-Voting window shall be activated upon instructions of the Chairman during the AGM proceedings. Only those shareholders, who are present in the AGM and have not casted their vote on the Resolutions through remote e-Voting and are otherwise not barred from doing so, shall be eligible to vote through e-Voting system available during the e-AGM. Member(s), whose names appear in the Register of Members/Beneficial Owners as on Thursday, July 28, 2022, are entitled to vote on the Resolutions set forth in this Notice. Any person holding shares in physical form and non-individual shareholders, who acquire shares of the Company and becomes a member of the Company after this Notice is sent through e-mail and continues to hold shares as of the cut-off date i.e. Thursday, July 28, 2022, may obtain the login ID and password by sending a request to NSDL at evoting@nsdl.co.in or the Company at IGRC@larsentoubro.com. However, if you are already registered with NSDL for remote e-voting, then you can use your existing user ID and password for casting your vote. If you forgot your password, you can reset your password by using "Forgot User Details/ Password" or "Physical User Reset Password" option available on www.evoting.nsdl.com or call on toll free no. 1800 1020 990 and 1800 22 44 30. In case of Individual Shareholders who have acquired shares of the Company and becomes a Member of the Company after sending of this Notice and holding shares as of the cut-off date i.e. Thursday, July 28, 2022 may follow steps mentioned in this Notice of the AGM under "Access to NSDL e-Voting system". Members are requested to follow the instructions given in this Notice to cast their votes through e-voting. The detailed steps on the process and manner for remote e-voting/e-voting at the AGM and to access the VC/OAVM facility at the AGM are as follows: I. Login method for remote e-Voting and joining virtual meeting for Individual shareholders holding securities in demat mode. Pursuant to SEBI Circular No. SEBI/HO/CFD/CMD/ CIR/P/2020/242 dated December 9, 2020 on "e-Voting facility provided by Listed Companies", e-Voting process has been enabled to all the individual demat account holders, by way of single login credential, through their demat accounts/ websites of Depositories/Depository Participants (DPS) in order to increase the efficiency of the voting process. Individual demat account holders would be able to cast their vote without having to register again with the e-Voting service provider (ESP) thereby not only facilitating seamless authentication but also ease and convenience of participating in e-Voting process. Shareholders are advised to update their mobile number and e-mail ID with their DPs in order to access e-Voting facility. 267 Integrated Annual Report 2021-22 Further, Members will be required to use Internet with a good speed to avoid any disturbance during the meeting. The Notice will be displayed on the website of the Company at www.larsentoubro.com and on the website of NSDL at https://www.evoting.nsdl.com. The members who have cast their vote through remote e-voting prior to the AGM may also attend the AGM through VC/OAVM but shall not be entitled to cast their vote again. Please note that the members who do not have the User ID and Password for e-Voting or have forgotten their User ID and Password may retrieve the same by following the instructions mentioned in this Notice. Members can participate in AGM through smart phone/laptop. However, for better experience and smooth participation it is advisable to join the Meeting using Google Chrome, through Laptops connected through broadband. Self-declaration by the non-resident shareholder as to: Members will be provided with a facility to attend the AGM through VC/OAVM through the NSDL e-Voting system. Members may access by following the steps mentioned in this Notice for Access to NSDL The following payees are also not subject to TDS in view of the provisions of Sections 196, 197A of the Income Tax Act, 1961 and CBDT Notification: (a) Government [section 196(i)] (b) Reserve Bank of India [section 196(ii)] (c) a Corporation established by or under a Central Act which is, under any law for the time being in force, exempt from income-tax on its income [section 196(iii)] (d) Mutual Fund [section 196(iv)] Tax residency certificate from the jurisdictional tax authorities confirming residential status for FY 2022-23; Declaration by the non-resident in prescribed Form 10F; 268 • • Eligibility to claim tax treaty benefits based on the tax residential status of the shareholder, including having regard to the Principal Purpose Test (if any), introduced in the applicable tax treaty with India; No Permanent Establishment/fixed base in India in accordance with the applicable tax treaty; e-Voting system. After successful login, you can see the link of VC/OAVM placed under Join General Meeting menu against the Company name. You are requested to click on the VC/OAVM link placed under Join General Meeting menu. Shareholder being the beneficial owner of the dividend income to be received on the equity shares. Integrated Annual Report 2021-22 Notice In case of non-resident shareholder, having permanent establishment in India, if they are classified as "specified person" as per the provision of Section 206AB of the Income Tax Act, 1961, tax will be deducted at rate higher of (a) twice the rate as per the provisions of Act; or (b) twice the rate in force; or (c) 5%. General: In order to enable us to determine the appropriate tax rate at which tax has to be deducted at source under the respective provisions of the Income Tax Act, 1961, we request Resident shareholders and Non-Resident shareholders to upload the details and documents referred to in this Notice in the format provided by us and as applicable to you on the link https://ris.KFintech.com/form15/. No communication on the tax determination/deduction shall be entertained beyond 5.00 p.m on Thursday, July 21, 2022. Deduction of tax at a rate lower than statutory rate or no deduction of tax shall depend upon the completeness of the documents and the satisfactory review of the forms and the documents, submitted by Resident shareholders, to the Company/KFintech. Please note that the Company is not obligated to apply the beneficial DTAA rates at the time of tax deduction/withholding on dividend amounts. Application of beneficial DTAA rate shall depend upon the completeness and satisfactory review by the Company/KFintech, of the documents submitted by Non-Resident shareholder/FPI. Tax deducted by the Company is final and the Company shall not refund/adjust the tax so deducted subsequently. [q] Instruction for attending the meeting through VC: Convenience of different persons positioned in different time zones has been kept in mind before scheduling the time for this Meeting. The Company has appointed National Securities Depository Limited (NSDL) to provide VC/OAVM for the AGM and are the attendant enablers for conducting the e-AGM. 265 Notice 4. After successful authentication, you will be redirected to NSDL website wherein you can see e-Voting page. Click on company name or e-Voting service provider - NSDL and I you will be redirected to e-Voting website of NSDL for casting your vote during the remote e-Voting period or joining virtual meeting and e-Voting during the meeting. Login Method 1. 2. Once logged-in, you will be able to see e-Voting option. Once you click on e-Voting option, you will be redirected to NSDL/ CDSL Depository site after successful authentication, wherein you can see e-Voting feature. 3. Click on company name or e-Voting service provider NSDL and you will be redirected to e-Voting website of NSDL for casting your vote during the remote e-Voting period or joining virtual meeting and e-Voting during the meeting. Important note: Members who are unable to retrieve User ID/Password are advised to use Forgot User ID and Forgot Password option available at respective websites. Helpdesk for Individual Shareholders holding securities in demat mode for any technical issues related to login through Depository i.e. NSDL and CDSL. Login type NSDL Helpdesk details Securities held with Please contact NSDL helpdesk by sending a request at evoting@nsdl.co.in or call at toll free no.: 1800 1020 990 and 1800 22 44 30 RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorized to delegate all or any of the powers conferred on it to any Committee of Directors and/or Managing/Whole-time Director(s) of the Company and to do all such acts and take all such steps as may be considered necessary or expedient to give effect to the aforesaid resolution. RESOLVED FURTHER THAT all actions taken by the Board of Directors/Audit Committee in connection with any matter referred to or contemplated in this resolution, be and are hereby approved and confirmed in all respects." 4. Alternatively, the user can directly access e-Voting page by providing Demat Account Number and PAN from a link in www.cdslindia.com home page. The system will authenticate the user by sending OTP on registered Mobile and e-mail as recorded in the Demat Account. After successful authentication, user will be provided links for the respective ESP i.e. NSDL where the e-Voting is in progress. You can also login using the login credentials of your demat account through your DP registered with NSDL/CDSL for e-Voting facility. Turbine Generators Private Limited, subsidiary of the Company and a Related Party within the meaning of Section 2(76) of the Companies Act, 2013 and Regulation 2(1)(zb) of the Listing Regulations in the nature of a) sale, purchase, lease or supply of goods or business assets or equipment; b) availing or rendering of services; c) transfer of any resources, services or obligations to meet its business objectives/ requirements ("Related Party Transactions") from this Meeting till the next Annual General Meeting of the Company or for a period of fifteen months, whichever is earlier, upto an amount not exceeding 2,600 crore on such terms and conditions as may be decided by the Board of Directors/Audit Committee of the Company as they may deem fit. To consider and, if thought fit, to pass as an ORDINARY RESOLUTION the following: RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorized to delegate all or any of the powers conferred on it to any Committee of Directors and/or Managing/Whole-time Director(s) of the Company and to do all such acts and take all such steps as may be considered necessary or expedient to give effect to the aforesaid resolution. RESOLVED FURTHER THAT all actions taken by the Board of Directors/Audit Committee in connection with any matter referred to or contemplated in this resolution, be and are hereby approved and confirmed in all respects." of the Companies Act, 2013 along with the Rules made thereunder and other applicable laws including any amendments, modifications, variations or re-enactments thereof, the Company's Policy on Related Party Transactions and as per the recommendation/approval of the Audit Committee and the Board of Directors of the Company, approval of the Members of the Company be and is hereby accorded for entering into and/or continuing to enter into contract(s)/transaction(s) with L&T-MHI Power Boilers Private Limited, subsidiary of the Company and a Related Party within the meaning of Section 2(76) of the Companies Act, 2013 and Regulation 2(1)(zb) of the Listing Regulations in the nature of a) sale, purchase, lease or supply of goods or business assets or equipment; b) availing or rendering of services; c) transfer of any resources, services or obligations to meet its business objectives/ requirements ("Related Party Transactions") from this Meeting till the next Annual General Meeting of the Company or for a period of fifteen months, whichever is earlier, upto an amount not exceeding * 6,500 crore on such terms and conditions as may be decided by the Board of Directors/Audit Committee of the Company as they may deem fit. LARSEN & TOUBRO 9) Statutory Financial Reports Statements Report Discussion and Analysis Integrated Management Corporate Overview 10) To consider and, if thought fit, to pass as an ORDINARY RESOLUTION the following: 'RESOLVED THAT pursuant to the provisions of Regulation 23(4) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the applicable provisions of the Companies Act, 2013 along with the Rules made thereunder and other applicable laws including any amendments, modifications, variations or re-enactments thereof, the Company's Policy on Related Party Transactions and as per the recommendation/approval of the Audit Committee and the Board of Directors of the Company, approval of the Members of the Company be and is hereby accorded for entering into and/or continuing to enter into contract(s)/transaction(s) with L&T-MHI Power Type of 2. After successful login of Easi/Easiest the user will be also able to see the e-Voting Menu. The Menu will have links of ESP i.e. NSDL. Click on NSDL to cast your vote. 1. shareholders Individual Shareholders holding securities in demat mode with NSDL A. NSDL IDEAS facility If you are already registered, follow the below steps: 1. Visit the e-Services website of NSDL. Open web browser and type the following URL: https://eservices.nsdl.com/ either on a Personal Computer or on a mobile. 2. Once the home page of e-Services is launched, click on the "Beneficial Owner" icon under "Login" which is available under "IDEAS" section. 3. A new screen will open. You will have to enter your User ID and Password. After successful authentication, you will be able to see e-Voting services under Value Added Services. 4. Click on "Access to e-Voting" under e-Voting services and you will be able to see e-Voting page. 5. Click on company name or e-Voting service provider i.e NSDL and you will be re-directed to NSDL e-Voting website for casting your vote during the remote e-Voting period or joining virtual meeting and e-Voting during the meeting. If you are not registered, follow the below steps: 1. Option to register is available at https://eservices.nsdl.com. Existing users who have opted for Easi/ Easiest, can login through their user id and password. Option will be made available to reach e-Voting page without any further authentication. The URL for users to login to Easi/Easiest is https://web.cdslindia.com/ myeasi/home/login or www.cdslindia.com. Click on New System Myeasi. 2. Select "Register Online for IDEAS" 3. Please follow steps given in points 1-5. B. e-Voting website of NSDL 1. Open web browser and type the following URL: https://www.evoting.nsdl.com/ either on a personal computer or on a mobile phone. 2. Once the home page of e-Voting system is launched, click on the icon "Login" which is available under 'Shareholder/Member' section. 3. A new screen will open. You will have to enter your User ID (i.e. your sixteen digit demat account number held with NSDL), Password/OTP and a Verification Code as shown on the screen. 4. 5. Shareholders/Members can also download NSDL Mobile App "NSDL Speede" facility by scanning the QR code mentioned below for seamless voting experience. NSDL Mobile App is available on App Store Google Play Type of shareholders Individual Shareholders holding securities in demat mode with CDSL Individual Shareholders (holding securities in demat mode) logging through their depository participants Login Method Portal or click at https://eservices.nsdl.com/ SecureWeb/IdeasDirectReg.jsp 3. 3. If the user is not registered for Easi/ Easiest, option to register is available at https://web.cdslindia.com/myeasi/ Registration/EasiRegistration. 1. Self-attested copy of the PAN allotted by the Indian Income Tax authorities; of the Companies Act, 2013, in respect of the business under items 6 to 13 set out above are annexed hereto. [i] The record date for the purpose of payment of dividend will be Friday, July 22, 2022. LARSEN & TOUBRO Statutory Financial Reports Statements Report Discussion and Analysis Integrated Management [j] Members holding shares in physical form are requested to furnish bank details, email address, change of address etc. to KFin Technologies Limited ("KFintech"), Selenium, Tower B, Plot 31-32, Gachibowli, Financial District, Nanakramguda, Hyderabad 500 032, who are the Company's Registrar and Share Transfer Agents (RTA) so as to reach them latest by Friday, July 22, 2022, in order to take note of the same. In respect of members holding shares in electronic mode, the details as would be furnished by the Depositories as at the close of the aforesaid date will be considered by the Company. Hence, members holding shares in demat mode should update their records with their Depository Participants at the earliest. Corporate Overview [h] The information required to be provided under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Secretarial Standards on General Meetings, regarding the Directors who are proposed to be appointed/re-appointed and the relative Explanatory Statement pursuant to Section 102 [g] In line with the MCA Circulars and SEBI Circular NO SEBI/HO/CFD/CMD2/CIR/P/2022/62 dated May 13, 2022, this Notice along with the Integrated Annual Report for FY 2021-22 is being sent by electronic mode to those Members whose e-mail addresses are registered with the Company/ Depositories/Depositary Participants/KFintech, unless any Member has requested for a physical copy of the same. Members may note that the Notice and Integrated Annual Report 2021-22 will also be available on the Company's website at www.larsentoubro.com, websites of the Stock Exchanges i.e. BSE Limited and National Stock Exchange of India Limited at www.bseindia.com and www.nseindia.com respectively and on the website of NSDL at https://www.evoting.nsdl.com. The Company will also be publishing an advertisement in the newspaper containing the details about the AGM i.e., the conduct of AGM through VC/OAVM, date and time of AGM, availability of Notice of AGM on the Company's website, manner of registering the email IDS of those shareholders who have not registered their email addresses with the Company/KFintech, manner of providing mandate for dividends and other matters as may be required. [f] Members attending the Meeting through VC/OAVM will be counted for the purposes of reckoning of Quorum under Section 103 of the Companies Act, 2013. [e] The attendance through VC/OAVM is restricted and hence members will be allowed on first come first serve basis. However, attendance of Members holding more than 2% of the shares of the Company, Institutional Investors as on Thursday, July 28, 2022 and Directors and Key Managerial Personnel, the Chairpersons of the Audit Committee, Nomination and Remuneration Committee, the Stakeholders Relationship Committee and Auditors will not be restricted on first come first serve basis. [d] Members who are shareholders as on Thursday, July 28, 2022 can join the AGM 30 minutes before the commencement of the AGM i.e at 03.00 P.M and till the time of the conclusion of the Meeting by following the procedure mentioned in this Notice. [c] No attendance slip/route map has been sent along with this Notice of the Meeting as the meeting is held through VC/OAVM. [b] Since this General Meeting is held through VC/OAVM the physical attendance of members is dispensed with and no proxies would be accepted by the Company pursuant to the relevant MCA Circulars and SEBI Circular dated May 13, 2022. Hence, no proxy form has been sent along with this Notice. 262 [a] In view of the COVID-19 pandemic and the need for ensuring social distancing, the Government of India, Ministry of Corporate Affairs ("MCA") allowed conducting Annual General Meeting through video conferencing (VC) or other audio-visual means (OAVM) without the physical presence of Members at a common venue. Accordingly, MCA issued Circular No. 14/2020 dated April 08, 2020, Circular No. 17/2020 dated April 13, 2020, Circular No. 20/2020 dated May 05, 2020, Circular No. 02/2021 dated January 13, 2021, Circular No. 20/2021 dated December 8, 2021 and Circular No. 2/2022 dated May 5, 2022 ("MCA Circulars"), prescribing the procedures and manner of conducting the Annual General Meeting through VC/OAVM. MCA Circular No. 2/2022 dated May 5, 2022 extended the time line for holding of Annual General Meetings through VC/OAVM till December 31, 2022. In compliance with the applicable provisions of the Companies Act, 2013 and MCA Circulars, the 77th Annual General Meeting (AGM) of the Members will be held through VC/OAVM. Hence, Members can attend and participate in the AGM through VC/OAVM only. [k] Those Members who have not yet registered their email address are requested to get their email addresses registered by following the procedure given below: 2. c) b) service request from KFintech only after furnishing the complete documents/details as aforesaid. a) The shareholders whose folios are frozen shall be: eligible to lodge grievance or avail It is mandatory vide SEBI Circular No. SEBI/HO/ MIRSD/MIRSD_RTAMB/P/CIR/2021/655 dated November 3, 2021 to update PAN, Address, Email ID, Bank account details (KYC details) and Nomination details of shareholders, who have not updated the same with RTA in case of physical shareholding and with Depository Participants (DPs) in case of Demat shareholding. Henceforth, RTA will attend to all service requests of the shareholders with respect to transmission, dividend, etc., only after updating the above details in the records. Non-updation of KYC details in Folios, wherein any one of the cited details/documents (i.e. PAN, Bank Details, Nomination) are not available on or after April 01, 2023, shall be frozen by the RTA as per above SEBI Circular. copy of the signed request letter providing the email address, mobile number, self-attested PAN copy and Client Master copy in case of electronic folio and copy of share certificate in case of physical folio. 1. 6. Members may also visit the website of the Company at www.larsentoubro.com or the website of NSDL at www.evoting.nsdl.com for downloading the Annual Report and Notice of the AGM. Members who have not registered their email address can get their email address and mobile number registered with KFintech, by clicking the link: https://ris.kfintech.com/ clientservices/mobilereg/mobileemailreg.aspx. Members are requested to follow the process as guided to capture the email address and mobile number for sending the soft copy of the Notice. In case of any queries, shareholders may write to einward.ris@KFintech.com. Members who have already registered their email addresses are requested to get their email addresses validated with their Depository Participants/KFintech to enable servicing of notices/documents/Annual Reports electronically to their email address. Those Members who have not registered their email address and mobile nos. including address and bank details may please contact and validate/update their details with the Depository Participant(s) in case of shares held in electronic form and with Registrar and Transfer Agents, KFintech in case the shares are held in physical form. 5. 4. 3. Members may send an e-mail request to einward.ris@KFintech.com along with scanned By Order of the Board of Directors For LARSEN & TOUBRO LIMITED SIVARAM NAIR A COMPANY SECRETARY M.NO - F3939 Mumbai, May 12, 2022 "RESOLVED THAT pursuant to Section 148 and other applicable provisions, if any, of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, the Company hereby ratifies the remuneration of 17 lakhs plus applicable taxes and out of pocket expenses at actuals for travelling and boarding/lodging for the Financial Year ending March 31, 2023 to M/s R. Nanabhoy & Co., Cost Accountants (Regn. No. 000010), who are appointed as Cost Auditors to conduct the audit of cost records maintained by the Company for the Financial Year 2022-23." Integrated Discussion and Analysis Report Management Corporate Overview 260 "RESOLVED THAT in supersession of the resolution no. 13 passed by the Members at the 76th Annual General Meeting of the Company held on August 5, 2021 in this regard and in accordance with the provisions of Sections 41, 42, 62 and other applicable provisions, if any, of the Companies Act, 2013 (including any statutory modifications or re-enactments thereof for the time being in force) as amended from time to time, Foreign Exchange Management Act, 1999, Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 ('SEBI Regulations'), Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, enabling provisions in the Memorandum and Articles of Association of the Company as also provisions of any other applicable laws, rules and regulations (including any amendments thereto or re-enactments thereof for the time being in force) and subject to such approvals, consents, permissions and sanctions of the Securities and Exchange Board of India (SEBI), Government of India (GOI), Reserve Bank of India (RBI) and all other appropriate and/or concerned authorities, or bodies and subject to such conditions and modifications, as may be prescribed by any of them in granting such approvals, consents, permissions and sanctions which may be agreed to by the Board of Directors of the Company ('Board') (which term shall be deemed to include any Committee which the Board may have constituted or hereafter constitute for the time being, exercising the powers conferred on the Board by this resolution), the Board be and is hereby authorized to offer, issue and allot in one or more tranches, to Investors whether Indian or Foreign, including Foreign Institutions, Foreign Institutional Investors, Foreign Portfolio Investors, Foreign Venture Capital Fund Investors, Venture Capital Funds, Non-resident Indians, Corporate Bodies, Mutual Funds, Banks, Insurance Companies, Pension Funds, Individuals or otherwise, whether shareholders of the Company or not, through an issue of convertible bonds and/or equity shares 12) To consider and, if thought fit, to pass as a SPECIAL RESOLUTION the following: RESOLVED FURTHER THAT all actions taken by the Board of Directors/Audit Committee in connection with any matter referred to or contemplated in this resolution, be and are hereby approved and confirmed in all respects." Statutory Committee of Directors and/or Managing/Whole-time Director(s) of the Company and to do all such acts and take all such steps as may be considered necessary or expedient to give effect to the aforesaid resolution. RESOLVED FURTHER THAT all actions taken by the Board of Directors/Audit Committee in connection with any matter referred to or contemplated in this resolution, be and are hereby approved and confirmed in all respects." RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorized to delegate all or any of the powers conferred on it to any Committee of Directors and/or Managing/Whole-time Director(s) of the Company and to do all such acts and take all such steps as may be considered necessary or expedient to give effect to the aforesaid resolution. Company or for a period of fifteen months, whichever is earlier, upto an amount not exceeding 2,000 crore on such terms and conditions as may be decided by the Board of Directors/Audit Committee of the Company as they may deem fit. Notice Integrated Annual Report 2021-22 2. 259 11) To consider and, if thought fit, to pass as an ORDINARY RESOLUTION the following: "RESOLVED THAT pursuant to the provisions of Regulation 23(4) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the applicable provisions of the Companies Act, 2013 along with the Rules made thereunder and other applicable laws including any amendments, modifications, variations or re-enactments thereof, the Company's Policy on Related Party Transactions and as per the recommendation/approval of the Audit Committee and the Board of Directors of the Company, approval of the Members of the Company be and is hereby accorded for entering into and/or continuing to enter into contract(s)/transaction(s) with L&T Modular Fabrication Yard LLC, subsidiary of the Company and a Related Party within the meaning of Section 2(76) of the Companies Act, 2013 and Regulation 2(1)(zb) of the Listing Regulations in the nature of a) sale, purchase, lease or supply of goods or business assets or equipment; b) availing or rendering of services; c) transfer of any resources, services or obligations to meet its business objectives/requirements ("Related Party Transactions") from this Meeting till the next Annual General Meeting of the Company or for a period of fifteen months, whichever is earlier, upto an amount not exceeding 2,300 crore or US $ 300 Mn, whichever is higher, on such terms and conditions as may be decided by the Board of Directors/Audit Committee of the Company as they may deem fit. RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorized to delegate all or any of the powers conferred on it to any Reports Financial Statements LARSEN & TOUBRO Notice Integrated Annual Report 2021-22 261 RESOLVED FURTHER THAT the Board be and is hereby authorised to create necessary charge on such of the assets and properties (whether present or future) of the Company in respect of Securities and to approve, accept, finalize and execute facilities, sanctions, undertakings, agreements, promissory notes, credit limits and any of the documents and papers in connection with the issue of Securities. RESOLVED FURTHER THAT the Board be and is hereby authorised to delegate all or any of the powers in such manner as they may deem fit." RESOLVED FURTHER THAT the Company do apply to the National Securities Depository Limited and/ or Central Depository Services (India) Limited for admission of the Securities. RESOLVED FURTHER THAT the Board be and is hereby authorised to appoint Lead Manager(s) in offerings of Securities and to remunerate them by way of commission, brokerage, fees or the like and also to enter into and execute all such arrangements, agreements, memoranda, documents, etc. with Lead Manager(s) and to seek listing of such Securities. RESOLVED FURTHER THAT the Company do apply for listing of the new Equity Shares as may be issued with BSE Limited and National Stock Exchange of India Limited or any other Stock Exchange(s). RESOLVED FURTHER THAT the Equity Shares to be offered and allotted shall be in dematerialized form. RESOLVED FURTHER THAT for the purpose of giving effect to any offer, issue or allotment of Securities, the Board, be and is hereby authorised on behalf of the Company to do all such acts, deeds, matters and things as it may, in absolute discretion, deem necessary or desirable for such purpose, including without limitation, the determination of the terms thereof, for entering into arrangements for managing, underwriting, marketing, listing and trading, to issue placement documents and to sign all deeds, documents and writings and to pay any fees, commissions, remuneration, expenses relating thereto and with power on behalf of the Company to settle all questions, difficulties or doubts that may arise in regard to such offer(s) or issue(s) or allotment(s) as it may, in its absolute discretion, deem fit. RESOLVED FURTHER THAT the Equity Shares so issued shall rank pari passu with the existing Equity Shares of the Company in all respects. in case of allotment of eligible convertible securities, either the date of the meeting in which the Board decides to open the issue of such convertible securities or the date on which the holders of such convertible securities become entitled to apply for the equity shares, as may be determined by the Board. in case of allotment of equity shares, the date of meeting in which the Board decides to open the proposed issue ii) i) RESOLVED FURTHER THAT in case of QIP issue the relevant date for determination of the floor price of the Equity Shares to be issued shall be - RESOLVED FURTHER THAT in case of QIP issue it shall be completed within 12 months from the date of passing of this resolution. RESOLVED FURTHER THAT for the purpose of giving effect to the above, the Board be and is hereby also authorised to determine the form, terms and timing of the issue(s), including the class of investors to whom the Securities are to be allotted, number of Securities to be allotted in each tranche, issue price, face value, premium amount in issue/conversion/exercise/ redemption, rate of interest, redemption period, listings on one or more Stock Exchanges in India or abroad, as the Board may in its absolute discretion deem fit and to make and accept any modifications in the proposals as may be required by the authorities involved in such issue(s) in India and/or abroad, to do all acts, deeds, matters and things and to settle any questions or difficulties that may arise in regard to the issue(s). 4,500 through depository receipts, including by way of Qualified Institutions Placement ('QIP'), to Qualified Institutional Buyers ('QIB') in terms of Chapter VI of the SEBI Regulations, through one or more placements of Equity Shares (hereinafter collectively referred to as "Securities"), whether by way of private placement or otherwise as the Board may determine, where necessary in consultation with the Lead Managers, Underwriters, Merchant Bankers, Guarantors, Financial and/or Legal Advisors, Rating Agencies/Advisors, Depositories, Custodians, Principal Paying/Transfer/ Conversion agents, Listing agents, Registrars, Trustees, Auditors, Stabilizing agents and all other Agencies/ Advisors so that the total amount raised through the issue of the Securities shall not exceed Crore (Rupees Four Thousand Five Hundred Crore) or US $600 Mn (US Dollars Six Hundred Million), if the value is higher. eligible for any payment including dividend, only through electronic mode, subject to verification and confirmation by KFintech. referred by KFintech/the Company to the administering authority under the Benami Transactions (Prohibitions) Act, 1988 and/ or Prevention of Money Laundering Act, 2002, if they continue to remain frozen as on December 31, 2025. 13) To consider and ratify the remuneration payable to Cost Auditors and for that purpose to pass, as an ORDINARY RESOLUTION the following: a) Integrated Management Corporate Overview 264 For Resident Shareholders, who have provided PAN, tax shall be deducted at source under Section 194 of Resident shareholders: shareholders and the Company is required to deduct tax at source from dividend paid to shareholders at the prescribed rates. For the prescribed rates for various categories, the shareholders are requested to refer to the Income Tax Act, 1961. The shareholders are requested to update their PAN with the Company/ KFintech (in case of shares held in physical mode) and with the Depositories/Depository Participants (in case of shares held in demat mode). Discussion and Analysis [p] Dividend income is taxable in the hands of [n] Adhering to the various requirements set out in the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended, the Company has during the Financial Year 2021-22 transferred to the IEPF Authority all shares in respect of which dividend has remained unpaid or unclaimed for seven consecutive years or more as on the due date of transfer. Details of shares transferred to IEPF Authority are available on the website of the Company and the same can be accessed through the link: http://investors.larsentoubro.com/resources.aspx. The said details have also been uploaded on the website of the IEPF Authority and the same can be accessed through the link: www.iepf.gov.in. The Company has designated an exclusive e-mail id viz. IGRC@Larsentoubro.com to enable Investors to register their complaints, if any. [m] Investor Grievance Redressal: Final Dividend if approved by the Members at this Meeting will be directly credited to the bank accounts of the shareholders as on the Record Date i.e Friday, July 22, 2022. In case of shareholders who have not registered their bank details with the Company, dividend warrants/demand drafts will be sent to them in due course of time. Members who have not encashed their dividend warrants pertaining to the aforesaid years may approach the Company/KFintech, for obtaining payments thereof atleast 20 days before they are due for transfer to the said fund. ཆཙ 22.08.2017 31.03.2017 27.09.2024 23.08.2018 31.03.2018 28.09.2025 01.08.2019 31.03.2019 06.09.2026 18.03.2020 31.03.2020 24.04.2027 13.08.2020 31.03.2020 18.09.2027 28.10.2020 31.03.2021 02.12.2027 05.08.2021 31.03.2021 09.09.2028 [o] SEBI has decided that securities of listed companies can be transferred only in dematerialized form with effect from April 1, 2019. In view of the above and to avail various benefits of dematerialisation, Members are advised to dematerialize shares held by them in physical form. Statutory Financial Reports Statements LARSEN & TOUBRO the Income Tax Act, 1961 at 10% on the amount of dividend. To avail the benefit of rate of deduction of tax at source under DTAA, such non-resident shareholders/ FPIs will have to provide the following: FPI and the non-resident shareholder have the option to be governed by the provisions of the Double Tax Avoidance Agreement (DTAA) between India and the country of tax residence of the shareholder, if they are more beneficial to them. KFintech shall reverse the frozen folios to normal status upon: For other Non-resident Shareholders, taxes are required to be deducted in accordance with the provisions of Section 195 of the Income Tax Act, 1961, at the rates in force. As per the relevant provisions of the Income Tax Act, 1961, the tax shall be deducted at the rate of 20% (plus applicable surcharge and cess) on the amount of dividend payable to them. For Foreign Portfolio Investor (FPI) category Shareholders, taxes shall be deducted at source under Section 196D of the Income Tax Act, 1961 at 20% (plus applicable surcharge and cess). Non-resident shareholders: (f) Category I or a Category II Alternative Investment Fund (registered with SEBI as per section 115UB) as per Notification 51/2015 (e) any person for, or on behalf of, the New Pension System Trust referred to in section 10(44) [sub-section 1E to section 197A] (d) Dividend income credited/paid to a "business trust", as defined in clause (13A) of section 2, by a special purpose vehicle referred to in the Explanation to clause (23FC) of section 10; [clause (d) to 2nd proviso to section 194] (c) any other insurer in respect of any shares owned by it or in which it has full beneficial interest [clause (c) to 2nd proviso to section 194] (b) General Insurance Corporation of India/The New India Assurance Company Ltd/United India Insurance Company Ltd/The Oriental Insurance Company Ltd/National Insurance Company Ltd [clause (b) to 2nd proviso to section 194] (a) Life Insurance Corporation of India [clause (a) to 2nd proviso to section 194] Apart from above cases, following categories of shareholders are exempt from tax deduction at source: No tax shall be deducted on the dividend payable to a resident individual if the total dividend to be received by the resident shareholders during Financial Year 2022-23 does not exceed 5,000. In cases where the shareholder provides Form 15G/Form 15H and meets all the required eligibility conditions, no tax will be deducted at source. (b) shareholders are classified as specified persons under Section 206AB (a) shareholders do not have PAN/have not registered their valid PAN details (including linking Aadhaar with PAN) in their account/with the Company/ KFintech under Section 206AA Tax shall be deducted at source at 20% wherein- 94 93 Report 91 Notice Integrated Annual Report 2021-22 263 and transposition. Accordingly, members are of securities certificates/folios; transmission receipt of all the aforesaid documents/details processing service requests viz. Issue of duplicate securities in dematerialized form only while mandated the listed companies to issue CIR/2022/8 dated January 25, 2022 has Circular No. SEBI/HO/MIRSD/MIRSD_RTAMB/P/ Members may please note that SEBI vide its 7. folios. 92 dematerialization of all the securities in such b) 8. requested to make service requests by submitting a duly filled and signed Form ISR – 4, the format of which is available on the Company's website at https://investors.larsentoubro.com/ DownloadableForms.aspx# and on the website of KFintech at https://ris.kfintech.com/clientservices/ isc/default.aspx#isc_download hrd. It may be noted that any service request can be processed only after the folio is KYC Compliant. securities certificate; claim from unclaimed suspense account; renewal/exchange of securities certificate; endorsement; sub-division/ split of securities certificate; consolidation SEBI vide its Notification dated January 24, 2022 has mandated that all requests for transfer of securities including transmission and transposition requests shall be processed only in dematerialized form. In view of the same and to eliminate all risks associated with physical shares and avail various benefits of dematerialisation, Members are advised to dematerialise the shares held by them in physical form. Members can contact the Company or KFintech, for assistance in this regard. 90 89 88 02.10.2023 26.08.2016 31.03.2016 Due for Transfer on 15.10.2022 09.09.2015 31.03.2015 87 For the year ended Date of Declaration No. Dividend Pursuant to Section 124 of the Companies Act, 2013 the unpaid dividends that are due for transfer to the Investor Education and Protection Fund are as follows: The Register of Directors and Key Managerial Personnel and their shareholding maintained under Section 170 of the Companies Act, 2013, the Register of Contracts or Arrangements in which the directors are interested and maintained under Section 189 of the Act, and the relevant documents referred to in this Notice will be available electronically for inspection by the Members during the AGM. [I] All matters included in this Notice are unavoidable and hence are proposed for seeking approval at this AGM. All shareholders will be able to inspect all documents referred to in this Notice electronically without any fee from the date of circulation of this Notice up to the date of AGM. Members seeking to inspect such documents can send an email to LNTGOGREEN@larsentoubro.com. 86 SIVARAM NAIR A COMPANY SECRETARY M.No - F3939 ANNUAL GENERAL MEETING 277 Integrated Annual Report 2021-22 Notice (ANNEXURE TO NOTICE DATED MAY 12, 2022) DETAILS OF DIRECTORS SEEKING APPOINTMENT/RE-APPOINTMENT AT THE FORTHCOMING [Pursuant to Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard 2 on General Meetings] July 5, 1960 Mr. Subramanian Sarma Mr. Sudhindra Vasantrao Desai Mr. T. Madhava Das Mr. S.N. Subrahmanyan July 1, 2011 Date of Birth February 4, 1958 January 25, 1963 July 11, 2020 August 19, 2015 March 16, 1960 July 11, 2020 Name of the Director By Order of the Board of Directors For LARSEN & TOUBRO LIMITED Report None of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 13. Integrated Management Date of Appointment on the Board Corporate Overview Statutory Discussion and Analysis Reports Financial Statements LARSEN & TOUBRO Mumbai, May 12, 2022 or the date on which the holders of such convertible securities become entitled to apply for the equity shares, as may be determined by the Board. The Shareholders through a resolution passed at their meeting held on August 5, 2021, had approved issue of Securities for an aggregate sum up to US$ 600 Million (or its rupee equivalent) or 4,500 Crore, if higher. The Company has not raised any funds under the said approval. However, Shareholders' resolution for QIP issuance is valid for a period of 12 months from the date of passing of the resolution. The Directors recommend this Resolution for approval of the Shareholders. None of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the resolution set out at Item No. 12. Item No. 13: In accordance with the provisions of Section 148 of the Companies Act, 2013 ("the Act") and the Companies (Audit and Auditors) Rules, 2014 ("the Rules") the Company is required to appoint a cost auditor to audit the cost records of the Company, for products and services, specified under Rules issued in pursuance to the above section. On the recommendation of the Audit Committee, the Board of Directors had approved the appointment of M/s. R. Nanabhoy & Co, Cost Accountants (Regn. No. 000010), as the Cost Auditors of the Company to conduct audit of cost records maintained by the Company for the Financial Year 2022-23, at a remuneration of ₹ 17 lakhs plus applicable taxes and out of pocket expenses at actuals for travelling and boarding/ lodging. M/s. R. Nanabhoy & Co., Cost Accountants, have furnished certificates regarding their eligibility for appointment as Cost Auditors of the Company. In accordance with the provisions of Section 148 of the Act read with the Rules, the remuneration payable to the cost auditor has to be ratified by the shareholders of the Company. Accordingly, consent of the shareholders is sought for the aforesaid purpose. The Directors recommend this resolution for approval of the shareholders. The Stock Exchange for the same purpose is BSE Limited/ National Stock Exchange of India Limited. Qualifications Number of Directorships held in other public companies 3. L&T Infrastructure Engineering Limited 4. International Seaport Dredging Private Limited Member Indian Electricals and Electronics Manufacturers Association NA Corporate Social Responsibility Committee Larsen & Toubro Limited L&T Infrastructure Engineering Limited 8 of 8 8 of 8 Meetings B.Sc, Engg. (Civil) & MBA Finance Vast Experience in Design and Build (D&B) contracts, PPP Projects, Engineering and Construction Industry 1. Larsen & Toubro Infotech Limited 276 2. L&T Technology Services Limited 3. L&T Metro Rail 2. L&T Himachal Hydropower Limited Expertise 1. L&T Arunachal Hydropower Limited B.E from NIT Calicut, Post Graduate in Management from Xavier Institute, Bhubaneshwar including private companies which are subsidiaries of public companies (excluding foreign companies) Memberships/ Chairmanships Master's Degree in Chemical Engineering from IIT Bombay Expertise in managing Masters in Civil Engineering from IIT large business portfolios in Infrastructure Space energy sector. 1. L&T Valves Limited 2. L&T Power Limited of committees across all companies Member Risk Management Committee Vast Experience in Heavy Civil and Expertise in managing and nurturing business portfolios of global utility projects especially in power transmission and distribution and renewables ii) in case of allotment of eligible convertible securities, either the date of the meeting in which the Board decides to open the issue of such convertible securities Not Applicable as no indebtness shall be incurred by the Company purpose, shall be While bidding for a project, the technical qualifications of MHI adds to the pre- qualifications of the Company. The Company is charged a price comparable with what LMB/ LMTG charges to its other customers. Hence the transaction is at arm's length. The Company also avails infrastructure and business support services with respect to boilers and turbine generators from LMB and LMTG respectively. These entities operate from common campus(es) across the country and expenses related to the same are apportioned by the Company to LMB and LMTG. The Heavy Engineering business manufactures and supplies custom designed equipment & critical piping to process industries such as fertilizer, chemical, refinery, petrochemical and oil & gas, as well as to sectors such as thermal & nuclear power and aerospace. The Defence Engineering business provides indigenous, design-to-delivery solutions across the defence spectrum - from surveillance to strike capabilities, and mobility platforms essential to enhance their effectiveness. The Company is in the business of bidding for various EPC contracts in India as well as overseas. Most of the EPC projects involve use of customized fabricated structures as per the contract specifications. As far as Indian projects are concerned, the Company has its own fabrication facility(ies) in India. In case of overseas projects, the Company generally uses such facilities outside India to save on logistics costs. Thus, availing fabrication services is an activity in the normal course of business. 274 Corporate Overview Management Discussion and Analysis Integrated Statutory Financial Report Reports Statements LARSEN & TOUBRO Particulars Resolution No. 7 Resolution No. 8 Resolution No. 9 LMB/LMTG is a joint venture between the Company and Mitsubishi Heavy Industries (MHI) and is part of the technical collaboration in construction and commissioning of power plants. The Power business of the Company is into construction and commissioning of power plants. Boilers/Turbines are a critical component of the power plant and hence procurement of boilers/turbines is in the ordinary course of business for the Company. 1.47% 1.28% (Hyderabad) Limited incurred to make or give such loans/ advances/securities for loan and Nature of Indebtness/Cost of Funds/Tenure Applicable terms, including covenants, tenure, interest rate, repayment schedule, whether secured (nature of security) or unsecured Purpose for which funds will be utilised Any advance paid or received for the transaction Percentage of the Company's annual consolidated turnover for the immediately preceding financial Rationale/Benefit of the transaction and why this transaction is in the interest of the Company year (i.e FY 22) that is represented by The Parent Company Guarantee or Corporate Guarantee will be provided at an arm's length basis and a fee will be charged. The charges would be upto 0.50% per annum which is benchmarked with the existing bank guarantee charges. 3.83% 4.15% As the proposal relates to providing Parent Company Guarantees or Corporate Guarantees or Letter of Comforts or Undertakings on behalf of international subsidiaries the question of valuation does not arise. The charges would be upto 0.50% per annum which is benchmarked with the existing bank guarantee charges Not Applicable Not Applicable NIL 1.66% the value of the proposed transaction Details about valuation, arm's length and ordinary course of business in case of allotment of equity shares, the date of the meeting in which the Board decides to open the proposed issue Any other information relevant or important for the shareholders to take an informed decision All international subsidiary companies have local partners. However, 100% beneficial interest in the international subsidiaries is held by the Company. Integrated Annual Report 2021-22 Notice Any subsequent material modification in the proposed transactions, as defined by the Audit Committee as a part of Company's Policy on Related Party Transactions, shall be placed before the shareholders for approval, in terms of Regulation 23(4) of the SEBI Listing Regulations. SEBI vide its Circular dated April 8, 2022 has clarified that a related party transaction approved by the shareholders shall be valid from one AGM till the next AGM of the Company or for a period of fifteen months, whichever is earlier. The Board recommends the Resolution set out at Item Nos. 7 to 11 for approval of the Shareholders. None of the Directors and Key Managerial Personnel (KMP) of the Company and their respective relatives are, in any way, concerned or interested, in the Resolution set out at Item Nos. 7 to 11. The members may note that as per the provisions of the SEBI Listing Regulations, all related parties (whether such related party is a party to the above-mentioned transaction or not), shall not vote to approve the Resolutions set out at Item Nos. 7 to 11. Item No. 12 The Company requires adequate capital to meet the needs of growing business. While it is expected that the internal generation of funds would partially finance the need for capital, debt raising would be another source of funds and hence it is thought prudent for the Company to have enabling approvals to raise a part of the funding requirements for the said purposes as well as for such other corporate purposes as may be permitted under applicable laws through the issue of appropriate securities as defined in the resolution, in Indian or International markets. The fund raising may be through a mix of equity/equity- linked instruments, as may be appropriate. Members' approval is sought for the issue of equity shares, securities linked to or convertible into equity shares or depository receipts of the Company. SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 also provides that the Company shall, in the first instance, offer all Securities for subscription pro-rata to the Shareholders unless the Shareholders in a general meeting decide otherwise. Members' approval is sought for issuing any such instrument as the Company may deem appropriate to parties other than the existing shareholders. Whilst no specific instrument has been identified at this stage, in the event the Company issues any equity linked instrument, the issue will be structured in a manner such that the additional share capital that may be issued would not be more than 5% of the paid-up capital of the Company (as at the date when the Board recommended passing of the Special Resolution). The equity shares, if any, allotted on issue, conversion of Securities shall rank in all respects pari passu with the existing equity shares of the Company. The Company may also opt for issue of securities through Qualified Institutions Placement (QIP). A QIP of the shares of the Company would be less time consuming and more economical than other modes of raising capital. Accordingly, the Company may issue securities by way of a QIP in terms of Chapter VI of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 ('SEBI Regulations'). These securities will be allotted only to Qualified Institutional Buyers (QIBS) as per the SEBI Regulations and there will be no issue to retail individual investors and existing retail shareholders. The resolution proposed is an enabling resolution and the exact price, proportion and timing of the issue of the securities will be decided by the Board based on an analysis of the specific requirements after necessary consultations. Therefore, the proposal seeks to confer upon the Board the absolute discretion to determine the terms of issue in consultation with the Lead Managers to the Issue. As per Chapter VI of the SEBI Regulations, an issue of securities on QIP basis shall be made at a price not less than the average of the weekly high and low of the closing prices of the related shares quoted on the stock exchange during the two weeks preceding the "relevant date." The Board may, at its absolute discretion, issue equity shares at a discount of not more than five percent or such other discount as may be permitted under applicable regulations to the 'floor price' as determined in terms of the SEBI Regulations, subject to Section 53 of the Companies Act, 2013. As the pricing of the offer cannot be decided except at a later stage, it is not possible to state the price of shares to be issued. However, the same would be in accordance with the provisions of the SEBI Regulations, the Companies Act, 2013, or any other guidelines/regulations/consents as may be applicable or required. In case of issue of convertible bonds and/or equity shares through depository receipts, the price will be determined on the basis of the then current market price and other relevant guidelines. The "relevant date" for the above i) 275 Since it is not possible to predict the exact amount of the contract(s), enabling approval of shareholders is being sought. The above related party contract(s)/arrangement(s) will materialize only if the Company succeeds in the bids being participated. Such activities are normally done through MFY which has the technical expertise, facilities and execution capabilities. The Power business of the Company bids for execution of a power plant project after taking into consideration various costs involved. Procurement of boilers/turbines is an integral part of the installation of a power plant. While bidding for the project, the Company states that the boilers/turbine generators and other infrastructure support service will be procured from LMB and LMTG which are pre-qualified as per the contractual conditions. Resolution No. 10 Both these businesses require customized forging. Hence procurement of forgings is in the ordinary course of business of the Company. The businesses procure forgings from LTSSHF as well as external vendors and hence arm's length is decided based on comparable quotes. Factors such as timeliness and quality are also considered before deciding on the procurement. The Company also sells scrap materials as well as avails engineering services for its Heavy Engineering and Defence Engineering businesses. This will enable international subsidiaries to bid and execute contracts in foreign countries This entity operates campus in Hazira and expenses related to the same are apportioned by the Company to LTSSHF. The Heavy Engineering & Defence Engineering business of the Company bids for various projects (including defence contracts of the Government) Some of these contracts require procurement of forgings. LTSSHF is a pre- qualified supplier for most of the clients. The Company is expected to bid for various projects during FY 2023. Resolution No. 11 The Company obtains quotations from various parties for its fabrication activities and based on the price, quality, timelines, etc., the contract gets finalized. MFY also quotes for such contracts and gets selected only if the quote is competitive. The Company also sells material such as steel plates, pipes, etc to MFY at competitive prices. The Energy & Hydrocarbon business of the Company bids for various EPC contracts. Customized fabrication activities are an essential part of execution of such contracts. from a common 4. L&T Realty Developers Limited Members who need assistance before or during the AGM, can contact NSDL on evoting@nsdl.co.in/ 1800 1020 990 and 1800 22 44 30 or contact Amit Vishal at amitv@nsdl.co.in or Pallavi Mhatre at pallavid@nsdl.co.in. 6. Mindtree Foundation 271 Integrated Annual Report 2021-22 Notice The Company has entered into an Agreement with Mr. S.N. Subrahmanyan re-appointing him as a Chief Executive Officer and Managing Director for a period of five years from July 1, 2022 upto and including June 30, 2027. During the period of this agreement and so long as the Chief Executive Officer and Managing Director performs his services as per the terms and conditions provided by this agreement, he shall be entitled to the following: Salary: 27,00,000 (Rupees Twenty Seven Lakh only) per month in the scale of 27,00,000 - ₹3,00,000 - 42,00,000 with the annual increment due on April 1 every year. Commission: The commission will be paid as per the parameters fixed by the Nomination and Remuneration Committee and the Board of Directors within the overall limits approved by the Shareholders of the Company. Perquisites: 20 lakh per annum excluding free furnished accommodation or house rent in lieu thereof. The above perquisites will exclude value of Stock Option benefits, if any, computed as per Income Tax Act/Rules, tax on which will be borne by the Company. Others: Company's contribution to retirement funds, official use of car/driver and communication facilities for Company's business, as per rules of the Company. Disclosures as required under Secretarial Standard 2 on General Meetings are provided as an Annexure to this Notice. The agreement entered into by the Company with Mr. S. N. Subrahmanyan, in respect of his re-appointment as Chief Executive Officer and Managing Director, contains terms and conditions of his appointment including remuneration. Accordingly, the Resolution at Item No. 6 is proposed for approval of the members for re-appointment of Mr. S. N. Subrahmanyan, as the Chief Executive Officer and Managing Director as contemplated by Part III of Schedule V of the Companies Act, 2013 and other applicable provisions, if any. Pursuant to Article 136(C) of the Articles of Association of the Company, Mr. S.N. Subrahmanyan in his capacity as Chief Executive Officer and Managing Director will not be liable to retire by rotation. The agreement entered into with Mr. S. N. Subrahmanyan will be open for inspection by members in the manner as specified in this Notice up to the date of the Annual General Meeting. The Board recommends approval of the re-appointment and remuneration of Mr. S. N. Subrahmanyan, as Chief Executive Officer and Managing Director of the Company. Except Mr. S.N. Subrahmanyan, being the appointee, none of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, in the Resolution set out at Item No. 6. At the Annual General Meeting of the Company held on August 26, 2016, the shareholders had fixed the maximum limits within which the Board was delegated authority to decide the remuneration of the Chief Executive Officer and Managing Director of the Company. Pursuant to this, the Board has fixed the remuneration payable to Mr. S. N. Subrahmanyan during his tenure as Chief Executive Officer and Managing Director. Item No. 7 to 11: With effect from April 1, 2022, Regulation 23 of SEBI Listing Regulations, mandates prior approval of the Shareholders through ordinary resolution for all 'material' Related Party Transactions. For this purpose, a Related Party Transaction will be considered 'material' if the transaction(s) to be entered into individually or taken together with previous transactions during a financial year exceeds 1,000 Crore or 10% of the annual consolidated turnover of the Company as per the last audited financial statements of the Company, whichever is lower. The Company has various subsidiaries which are formed in accordance with the requirement of local laws for the purpose of bidding and execution of Engineering, Procurement and Construction (EPC) contracts. Contracts entered into by these international subsidiaries usually have a clause which requires issuance of Parent Company Guarantees (PCGs) for execution of these projects. The value of these PCGs is equivalent to the full value of the contract. Such PCGs are to be issued upfront and are to be valid till the completion of all obligations under the contract. Considering the above, the Company is required to provide Parent Company Guarantees or Corporate Guarantees or Letters of Comfort or Undertakings, on behalf of its subsidiary companies, to achieve business objectives including meeting client requirements under the terms of the contract, consortium or other agreements. Considering the increasing localization requirements in the Middle East, it had become imperative for the Company to bid for projects through its local subsidiaries. Larsen Toubro Arabia LLC, L&T Modular Fabrication Yard LLC, Larsen & Toubro Electromech LLC, Larsen & Toubro Heavy Engineering LLC, Larsen & Toubro Kuwait General Contracting Co WLL ("international subsidiaries") were incorporated as subsidiaries in the Middle East. The value of the Parent Company Guarantees or Corporate Guarantees or Letters of Comfort or Undertakings proposed to be issued to customers on behalf of the international subsidiaries is 6,000 crore or US $ 800 Mn, whichever is higher. The Company had in the past provided similar Parent Company Guarantees or Corporate Guarantees or Letters of Comfort or 272 Corporate Overview Management Integrated Discussion and Analysis Report Statutory Financial Reports As per the provisions of Section 188 of the Companies Act, 2013 ("Act"), transactions with related parties which are at arm's length and in the ordinary course of business, are exempted from the obligation of obtaining prior approval of shareholders. However, as per the provisions of Regulation 23(4) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"), such transactions, if material, require the approval of shareholders through a resolution, notwithstanding the fact that the same are on an arm's length basis and in the ordinary course of business. Statements Recognising L&T's leadership in climate and infrastructure finance, he has been appointed one of nine founding members of Climate Finance Leadership Initiative (CFLI) India to bring global scale and influence to the initiative. Mr. Subrahmanyan is the Non-Executive Vice Chairman of Larsen & Toubro Infotech Limited, L&T Technology Services Limited and Mindtree Limited and the Non-Executive Chairman of L&T Metro Rail (Hyderabad) Limited and L&T Finance Holdings Limited. Largely responsible for establishing L&T Construction as a significant EPC player in the Middle East, Mr. Subrahmanyan has spearheaded and won several large projects in Oman, Qatar, Abu Dhabi and Saudi Arabia. The Riyadh Metro project is one of the largest international orders bagged by L&T thus far; while the Doha Metro, the AL-Wakrah Road Project both in Qatar and the Abu Dhabi Airport airside works have been won in the face of stiff international competition. He has also led the spread into Africa and L&T Construction is making its presence felt especially in North and East Africa. The Company has appointed Mr. S. N. Ananthasubramanian, Practicing Company Secretary, (Membership No. 4206, COP No. 1774) or failing him Mrs. Aparna Gadgil, Practicing Company Secretary, (Membership No. 14713, COP No. 8430), to act as the Scrutinizer for conducting the voting and remote e-voting process in a fair and transparent manner. Institutional shareholders (i.e. other than individuals, HUF, NRI, etc.) are required to send scanned copy (PDF/JPG format) of the relevant Board Resolution/ Authority letter etc., together with attested specimen signature of the duly authorized signatory(ies) who are authorized to vote, to the Scrutinizer through e-mail to scrutinizer@snaco.net, with a copy marked to evoting@nsdl.co.in. In case of any queries, please visit Help and Frequently Asked Questions (FAQs) section available at evoting website at https://evoting.nsdl.com. Members will be able to attend the AGM through VC/ OAVM or view the live webcast of AGM provided by NSDL at https://www.evoting.nsdl.com following the steps mentioned above for login to NSDL e-voting system. After successful login, you can see VC/OAVM link placed under "Join Meeting" menu against company name. You are requested to click on VC/OAVM link placed under "Join Meeting" menu. Based on the report received from the Scrutinizer, the Company will submit within 2 working days to the Stock Exchanges details of the voting results as required under Reg. 44(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Corporate Overview Management Discussion and Analysis Integrated Statutory Report Reports Financial Statements He holds positions of pre-eminence on various industry bodies, construction institutions and councils. In February 2021, he was appointed Chairman of the National Safety Council (NSC) for three years by the Union Ministry of Labour & Employment. In this role Mr. Subrahmanyan would guide the NSC, which has a major part to play to ensure safety in workplaces under the new Occupational Safety, Health and Working Conditions Code, 2020 (OSH Code, 2020). LARSEN & TOUBRO The Scrutinizer will submit his report to the Chairman after completion of the scrutiny. The result of the voting on the Resolutions at the Meeting shall be announced by the Chairman or any other person authorized by him immediately after the results are declared. Facility to cast vote through e-voting will be made available on the Video Conferencing screen and will be activated once the same is announced by the Chairman during the Meeting. The results declared along with the Scrutinizer's report, will be hosted on the website of the Company at www.larsentoubro.com and on the website of NSDL at https://evoting.nsdl.com and will be displayed on the Notice Board of the Company at its Registered Office as well as Corporate Office immediately after the declaration of the result by the Chairman or any person authorised by him in writing and communicated to the Stock Exchanges. EXPLANATORY STATEMENT As required by Section 102 of the Companies Act, 2013, the following Explanatory Statement sets out material facts relating to the business under items 6 to 13 of the accompanying Notice dated May 12, 2022. 5. Mindtree Limited Shareholders had approved the appointment of Mr. S.N. Subrahmanyan (DIN: 02255382) as Chief Executive Officer and Managing Director of the Company for a period of five years, with effect from July 1, 2017 upto and including June 30, 2022. On the recommendation of the Nomination & Remuneration Committee, the Board of Directors of the Company at its Meeting held on May 12, 2022, re-appointed Mr. S. N. Subrahmanyan (DIN: 02255382), as Chief Executive Officer and Managing Director of the Company with effect from July 1, 2022, upto and including June 30, 2027, subject to the approval of the members in the Annual General Meeting. Mr. S. N. Subrahmanyan, 62, is a civil engineer with post graduate qualification in business management. He joined L&T in 1984 starting off as project planning engineer and was soon handpicked for senior responsibilities. He is responsible for leading the Company's considerable business interests to new growth levels, riding on the enormous benefits of digitalisation, big data, and predictive analysis that he drives internally with exceptional zeal. He places a premium on innovation, project management and talent development, particularly in leadership roles. Under his leadership, he has transformed L&T into a Company that executes a wide range of projects at speed and scale. Apart from completing several challenging infrastructure projects across verticals over the years, he has played a crucial role in securing and managing EPC contracts for the construction of four major international airports in India at Bengaluru, Hyderabad, Delhi and Mumbai. Among his list of accomplishments are the mandates to build the tallest statue in the world - the Statue of Unity - and the development of dedicated freight corridors that will realign the dynamics of freight movement in the country. The construction division is among the top 30 global contractors and by far the largest construction organisation in the country. A Member can opt for only one mode of voting i.e. either through remote e-voting or at the Meeting. If a Member has cast his vote by remote e-voting then he will not be eligible to vote at the Meeting. LARSEN & TOUBRO Undertakings in favour of these international subsidiaries. However, post the amendment in the definition of material related party transactions, the aforesaid proposal now requires prior approval of the shareholders. Given the nature and scope of the business, the Company works closely with its related parties (including subsidiaries) to achieve its business objectives and enters into various operational transactions with its related parties, from time to time, in the ordinary course of business and on arm's length. Amongst the transactions that Company enters into with its related parties, the estimated value of the contract(s)/arrangement(s)/transaction(s) with L&T-MHI Power Boilers Private Limited, L&T-MHI Power Turbine Generators Private Limited, L&T Special Steels and Heavy Forgings Private Limited and L&T Modular Fabrication Yard LLC, subsidiaries of the Company ("Related Parties"), are likely to exceed the threshold of material Related Party Transactions. MFY* Amount (Crore) 6,500 2,600 2,000 2,300 * US $ 300 million whichever is higher Not Applicable party 273 Integrated Annual Report 2021-22 LTSSHF Notice Resolution No. 7 Resolution No. 8 Details of the Resolution No. 9 Not Applicable Resolution No. 10 Resolution No. 11 source of funds in connection with the proposed transaction If any financial indebtness is Particulars LMTG LMB Name of the Company The Company has been undertaking transactions of similar nature in the past in the ordinary course of business and on arm's length after obtaining requisite approvals of the Audit Committee of the Company. The maximum annual value of the proposed transactions with the aforesaid Details w.r.t Material Related Party Transactions: Particulars Name of the Related Parties Resolution No. 7 Larsen Toubro Arabia LLC, L&T Modular Fabrication Yard LLC, Larsen & Toubro Electromech LLC, Larsen & Toubro Heavy Engineering LLC, Larsen & Toubro Kuwait General Contracting Co WLL ("international subsidiaries") Resolution No. 8 L&T-MHI Power Boilers Private Limited (LMB) related parties is estimated on the basis of the Company's current transactions with them and the future business prospects. The proposed transactions, being operational and critical in nature, play a significant role in the Company's business. Therefore, in order to secure continuity of operations, the Company is proposing to seek approval of shareholders for the potential quantum of transactions with the aforesaid related parties. The Company has in place a balanced and structured policy and process for approval of Related Party Transactions. The Policy provides the details required to be provided to the Audit Committee for the purpose of review of such transactions and grant their approval for the proposed transactions. A justification for each and every related party transaction is provided to the Audit Committee which enables them to arrive at the right decisions. Additionally, an update on the actual related party transactions entered during every quarter is provided to the Audit Committee. The Audit Committee of the Company comprises of only Independent Directors as Members which helps in providing an objective judgement to all transactions proposed for approval. Resolution No. 9 L&T-MHI Power Turbine Generators Private Limited (LMTG) Resolution No. 10 L&T Special Steels and Heavy Forgings Private Limited (LTSSHF) Resolution No. 11 L&T Modular Fabrication Yard LLC (MFY) Nature of Relationship Nature, duration, tenure, material terms, monetary value and particulars of the contract or arrangement Transaction related to providing loan(s)/ advance(s) or securities for loan taken by a related Providing Parent Company Guarantees or Corporate Guarantees or Letters of Comfort or Undertakings on behalf of International subsidiaries from this AGM till the next Annual General Meeting or for a period of fifteen months, whichever is earlier, and for an amount not exceeding 6,000 crore or US $ 800 Mn, whichever is higher, in accordance with the terms and conditions of the contract/agreement to be executed by international subsidiaries with their customers. Subsidiary Company(ies) a) b) Sale, purchase, lease or supply of goods, business assets or equipment; Availing or rendering of services; c) Transfer or exchange of any resources, services or obligations to meet its business objectives/ requirements The approval will be valid from this AGM till the next Annual General Meeting or for a period of fifteen months, whichever is earlier, in accordance with the terms and conditions of the contract/ agreement for the below mentioned amounts: of Consolidated Account statement, PAN (self attested scanned copy), AADHAR (self-attested scanned copy). If you are an Individual shareholder holding securities in demat mode, you are requested to refer to the login method explained above. evoting@nsdl.co.in for procuring user id and password for e-voting by providing demat account number/Folio number, client master or copy Item No. 6 https://www.evoting.nsdl.com or call on toll free no.: 1800 1020 990 and 1800 22 44 30 or send a request at evoting@nsdl.co.in. Report Reports Statements II. Members may send a request to Login type Helpdesk details Securities held with Please contact CDSL helpdesk by CDSL sending a request at helpdesk evoting@cdslindia.com or contact at 022-23058738 or 022-23058542-43 Login method for e-Voting and joining virtual meeting for shareholders other than Individual shareholders holding securities in demat mode and shareholders holding securities in physical mode. 1. Visit the e-Voting website of NSDL. Open web browser and type the following URL: https://www.evoting.nsdl.com/ either on a personal computer or on a mobile. Discussion and Analysis 2. 4. Once the home page of e-Voting system is launched, click on the icon "Login" which is available under "Shareholders/Member" section. A new screen will open. You will have to enter your User ID, your Password/OTP and a Verification Code as shown on the screen. Alternatively, if you are registered for NSDL e-services i.e. IDEAS, you can login at https://eservices.nsdl.com/ with your existing IDEAS login. Once you login to NSDL e-services after using your login credentials, click on e-Voting and you can proceed to cast your vote electronically. Your User ID details are given below: Manner of holding Your User ID is: shares i.e. Demat (NSDL or CDSL) or Physical 278 For Members who hold shares in demat account with NSDL 3. Financial Statutory Integrated 7. L&T Finance Holdings Limited Member Nomination and Remuneration Committee Mindtree Limited 8 of 8 8 of 8 attended during the year Shareholding of NA ΝΑ ΝΑ ΝΑ Non-Executive Directors Relationships None None None None between directors inter-se Corporate Overview Management For Members who hold shares in demat account with CDSL For Members holding shares in Physical Form LARSEN & TOUBRO EVEN Number followed by 7. After entering your password, tick on Agree to "Terms and Conditions" by selecting on the check box. 8. Now, you will have to click on "Login" button. 9. After you click on the "Login" button, home page of e-Voting will open. How to cast your vote electronically 1. 2. 3. 4. You will be able to see all the companies "EVEN" in which you are holding shares and whose voting cycle and General Meeting is in active status. Select "EVEN 120346" to cast your vote during the remote e-Voting period and casting your vote during the General Meeting. For joining virtual meeting, you need to click on "VC/OAVM" link placed under "Join General Meeting". Now you are ready for e-Voting as the Voting page opens. d) Members can also use the one-time password (OTP) based login for casting the votes on the e-Voting system of NSDL. Cast your vote by selecting appropriate options i.e. assent or dissent, verify/modify the number of shares for which you wish to cast your vote and click on "Submit" and also "Confirm" when prompted. 6. 7. You can also take the printout of the votes cast by you by clicking on the print option on the confirmation page. Once you confirm your vote on the resolution, you will not be allowed to modify your vote. General Guidelines for shareholders 1. 8 Character DP ID followed by 8 Digit Client ID For example, if your DP ID is IN300✶✶✶ and Client ID is 12****** then your user ID is IN300***12****** 16 Digit Beneficiary ID For example, if your Beneficiary ID is 12************** then your user ID is 12************** It is strongly recommended not to share your password with any other person and take utmost care to keep your password confidential. Login to the e-Voting website will be disabled upon five unsuccessful attempts to key in the correct password. In such an event, you will need to go through the "Forgot User Details/Password?" or "Physical User Reset Password?" option available on https://www.evoting.nsdl.com to reset the password. In case of any queries relating to e-Voting you may refer to the FAQs for Shareholders 3. and e-Voting user manual for Shareholders available at the download section of 5. Upon confirmation, the message "Vote cast successfully" will be displayed Notice 2. Integrated Annual Report 2021-22 Folio Number registered 270 with the Company. 123456 and folio number is 001 then user ID is 123456001*** 5. 6. Password details for shareholders other than individual shareholders are given below: a) If you are already registered for e-Voting, then you can use your existing password to login and cast your vote. b) If you are using NSDL e-Voting system for the first time, you will need to retrieve the 'initial password' which was communicated to you by NSDL. Once you retrieve your 'initial password', you need to enter the 'initial password' and the system will force you to change your password. How to retrieve your 'initial password'? c) For example, if EVEN is If your e-mail ID is registered in your demat account or with the Company, your 'initial password' is communicated to you on your e-mail ID. Trace the e-mail sent to you from NSDL in your mailbox from evoting@nsdl.com. Open the e-mail and open the attachment i.e. a .pdf file. Open the .pdf file. The password to open the .pdf file is your 8-digit client ID for NSDL account, last 8 digits of client ID for CDSL account or folio number for shares held in physical form. The .pdf file contains your 'User ID' and your 'initial password'. 269 i) Password?" (If you are holding shares Click on "Physical User Reset Click on "Forgot User Details/ Password?" (If you are holding shares in your demat account with NSDL or CDSL) option available on www.evoting.nsdl.com. in physical mode) option available on www.evoting.nsdl.com. b) a) If you are unable to retrieve or have not received the 'initial password' or have forgotten your password: In case you have not registered your e-mail address with the Company/Depository, please follow instructions mentioned below in this Notice. c) If you are still unable to get the password by aforesaid two options, you can send a request at evoting@nsdl.co.in mentioning your demat account number/folio number, your PAN, your name and your registered address. Speaker Registration before AGM Members may register themselves as a speaker by sending their request from their registered email address mentioning their name, DP ID and Client ID/folio number, PAN, mobile number to LNTGOGREEN@larsentoubro.com on or before Monday, August 1, 2022. 7 Recorded Transcript 8 Thursday, August 4, 2022, 3.30 P.M Video Conference (VC) and Other Audio Visual Means (OAVM) Members can login from 03.00 P.M. (IST) on the date of the AGM at https://www.evoting.nsdl.com. 1800 1020 990/1800 22 44 30 Members seeking any information with regard to the accounts or any matter to be placed at the AGM, are requested to write to the Company on or before Thursday, July 28, 2022 through email on IGRC@larsentoubro.com. The same will be replied by the Company suitably. Please note that members' queries/questions will be responded to only if the shareholder continues to hold the shares as on the cut-off date i.e Thursday, July 28, 2022. 10 Dividend for FY 2022 recommended by 22 per equity share of the face value of ₹2 each the Board 9 Record Date Dividend Payment Date 11 Cut-off date for e-voting 12 Remote e-voting start time and date Submission of Questions/Queries before AGM Will be made available post AGM at www.larsentoubro.com Helpline Number for VC/OAVM participation INFORMATION AT A GLANCE: 13 Corporate Management Integrated Statutory Financial Overview Discussion and Analysis Report Reports Statements Participation through VC/OAVM LARSEN & TOUBRO Details 1 Day, Date and Time of AGM 2 Mode 3 4 5 6 Sr. No Particulars Remote e-voting end time and date Trade World, A Wing, 4th Floor, Kamala Mills Compound, 15 Corporate Overview 284 ADEQUACY OF INTERNAL FINANCIAL CONTROLS: The Company has designed and implemented a process driven framework for Internal Financial Controls ("IFC") within the meaning of the explanation to section 134(5)(e) of the Companies Act, 2013. For the year ended 31st March 2022, the Board is of the opinion that the Company has sound IFC commensurate with the nature and size of its business operations and operating effectively and The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and were operating effectively. f) e) The Directors have laid down an adequate system of Internal Financial Controls to be followed by the Company and such Internal Financial Controls are adequate and operating efficiently; Management d) The Directors have prepared the Annual Accounts on a going concern basis; b) The Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period; DIRECTORS' RESPONSIBILITY STATEMENT: The Board of Directors of the Company confirms: a) In the preparation of Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; The information in respect of employees of the Company pursuant to Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended from time to time, is provided in Annexure 'G' forming part of this report. In terms of section 136(1) of the Companies Act, 2013 and the rules made thereunder, the Report and Accounts are being sent to the Shareholders excluding the aforesaid Annexure. Any Shareholder interested in obtaining a copy of the same may write to the Company Secretary at the Registered Office of the Company. None of the employees listed in the said Annexure is related to any Director of the Company. The details of remuneration as required to be disclosed under the Companies Act, 2013 and the rules made thereunder, are given in Annexure 'D' forming part of this Board Report. DISCLOSURE OF REMUNERATION: For the year under review, the questionnaire was updated suitably based on the comments and suggestions received from Independent Directors. As in the previous years, an external consultant was engaged to receive the responses of the Directors and consolidate/ analyze the responses. The same external consultant's IT platform was used from initiation and till conclusion of the entire board evaluation process. This ensured that the process was transparent and independent of involvement of the Management or the Company's IT system. This has enabled unbiased feedback. The Board Performance Evaluation inputs, including areas of improvement for the Directors, Board processes and related issues for enhanced Board effectiveness were discussed in the meetings of the Nomination and Remuneration Committee and the Board of Directors held on May 12, 2022. c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; Discussion and Analysis Integrated Statutory Financial Report Reports Statements LARSEN & TOUBRO The Corporate Social Responsibility (CSR) Committee comprises of Mr. M. M. Chitale, Mr. R. Shankar Raman and Mr. D. K. Sen as the Members. Mr. Chitale is the Chairman of the Committee. CORPORATE SOCIAL RESPONSIBILITY: The Company sends specific advance communication to the concerned shareholders at their address registered with the Company and also publishes notice in newspapers providing the details of the shares due for transfer to enable them to take appropriate action. All corporate benefits accruing on such shares viz. bonus shares, etc. including dividend except rights shares shall be credited to IEPF. In accordance with the provisions of the section 124(6) of the Companies Act, 2013 and Rule 6(3)(a) of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ('IEPF Rules'), the Company has transferred 3,17,463 equity shares of 2 each (0.02% of total number of shares) held by 1,530 shareholders (0.10% of total shareholders) to IEPF. The said shares correspond to the dividend which had remained unclaimed for a period of seven consecutive years from the financial year 2013-14. Subsequent to the transfer, the concerned shareholders can claim the said shares along with the dividend(s) by making an application to IEPF Authority in accordance with the procedure available on www.iepf.gov.in and on submission of such documents as prescribed under the IEPF Rules. Cumulatively, the amount transferred to the said fund was * 46,79,35,382 as on 31st March 2022. Despite these efforts, an amount of 9,12,62,638 which I was due and payable and remained unclaimed and unpaid for a period of seven years, was transferred to Investor Education and Protection Fund (IEPF) as provided in section 125 of the Companies Act, 2013 and the rules made thereunder. co-ordination with the RTA to locate the shareholders who have not claimed their dues. The Company has been regularly sending communications to members whose dividends are unclaimed requesting them to provide/update bank details with Registrar and Transfer Agents (RTA)/Company, so that dividends paid by the Company are credited to the investor's account on time. Efforts are also made by the Company in TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND: In adherence to SEBI's circular to enhance the due-diligence for dematerialization of the physical shares, the Company has provided the static database of the shareholders holding shares in physical form to the depositories which would augment the integrity of its existing systems and enable the depositories to validate any dematerialization request. In view of the numerous advantages offered by the Depository system as well as to avoid frauds, members holding shares in physical form are advised to avail of the facility of dematerialization from either of the Depositories. Pursuant to amendments in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, with effect from January 24, 2022, requests for effecting transfer of securities in physical form, shall not be processed by the Company and all requests for transmission, transposition, issue of duplicate share certificate, claim from unclaimed suspense account, renewal/exchange of securities certificate, endorsement, sub-division/split of securities certificate and consolidation of securities certificates/folios need to be processed only in dematerialized form. In such cases the Company will issue a letter of confirmation, which needs to be submitted to Depository Participant(s) to get credit of the securities in dematerialized form. Shareholders desirous of availing these services are requested to refer to the detailed procedure for availing these services provided on the website of the Company at https://investors.larsentoubro.com/shareholder-services.aspx. As the members are aware, the Company's shares are compulsorily tradable in electronic form. As on 31st March 2022, 98.89% of the Company's total paid up capital representing 138,93,93,268 shares are in dematerialized form. DEPOSITORY SYSTEM: no material weakness exists. The Company has a process in place to continuously monitor the same and identify gaps, if any, and implement new and/or improved controls wherever the effect of such gaps would have a material effect on the Company's operations. The Nomination and Remuneration Committee and the Board have laid down the manner in which formal annual evaluation of the performance of the Board, Committees, Individual Directors, CEO & MD and the Chairman has to be made. All Directors responded through a structured questionnaire giving feedback about the performance of the Board, its Committees, Individual Directors, CEO & MD and the Chairman. The CSR policy framework and Annual Action Plan for FY 2023 is available on the Company's website at https://investors.larsentoubro.com/corporate-governance. The Independent Directors of the Company have registered themselves with the data bank maintained by Indian Institute of Corporate Affairs (IICA). In terms of section 150 of the Companies Act, 2013 read with Rule 6(4) of the Companies (Appointment and Qualification of Directors) Rules, 2014, all Independent Directors, except Mr. Pramit Jhaveri, are exempted from undertaking the online proficiency self-assessment test conducted by IICA. Mr. Pramit Jhaveri shall complete the online proficiency self-assessment test within the prescribed timelines. PERFORMANCE EVALUATION: Board Report LARSEN & TOUBRO Financial Statements Reports Report Discussion and Analysis Statutory held on March 24, 2022 has approved the appointment of Mr. Pramit Jhaveri as an Independent Director for a period of five years with effect from April 1, 2022 till March 31, 2027, subject to the approval of shareholders through special resolution. The approval has been sought by means of a Postal Ballot and the results will be declared on or before 18th May 2022. The NRC considered the appointment of Mr. Jhaveri as an Independent Director after evaluating the skills, knowledge and experience required on the Board as per the approved skill matrix. The Board pursuant to the recommendation of the NRC and report of his performance evaluation, re-appointed Mr. S.N Subrahmanyan as Chief Executive Officer and Managing Director of the Company for a period of five years from July 1, 2022 upto and including June 30, 2027. His appointment shall be subject to the approval of the shareholders. Integrated Corporate Overview 282 Mr. Subodh Bhargava ceased to be an Independent Director of the Company with effect from March 29, 2022 on account of completion of his tenure. The Board places on record its appreciation towards valuable contribution made by him during his tenure as Director of the Company. Pursuant to the recommendation of the Nomination and Remuneration Committee (NRC), the Board at its Meeting DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL APPOINTED/ RESIGNED: For further details on risk management, please refer to page 306 of this Annual Report. The Charter of the Committee is to assist the Board in fulfilling its oversight responsibilities of reviewing the existing Risk Management Policy, Framework, Risk Management Structure and Risk Management Systems. The Committee periodically reviews the risk status to ensure that executive management mitigates the risks by means of a properly designed framework. Management Mr. Subramanian Sarma, Mr. S. V. Desai and Mr. T. Madhava Das, retire by rotation at the ensuing Annual General Meeting (AGM) and being eligible, offer themselves for re-appointment. The notice convening the AGM includes the proposal for re-appointment of Directors. Integrated Annual Report 2021-22 283 The Company has received Declarations of Independence as stipulated under section 149(7) of the Companies Act, 2013 and Regulation 25(8) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 from Independent Directors confirming that he/she is not disqualified from being appointed/re-appointed/ continue as an Independent Director as per the criteria laid down in section 149(6) of the Companies Act, 2013 DECLARATION OF INDEPENDENCE: The Committee has formulated a policy on Directors' appointment and remuneration including recommendation of remuneration of the key managerial personnel and senior management personnel, and the criteria for determining qualifications, positive attributes and independence of a Director. Nomination and Remuneration Policy is provided as Annexure 'F' forming part of this Board Report and also disclosed on the Company's website at https://www.larsentoubro.com/corporate/about-lt-group/ corporate-policies/. The Committee has also formulated a separate policy on Board Diversity. The Company has in place a Nomination and Remuneration Committee in accordance with the requirements of the Companies Act, 2013 read with the rules made thereunder and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details relating to the same are given in Annexure 'B' - Report on Corporate Governance forming part of this Board Report. Members are requested to refer to pages 300 to 303 of this Annual Report. COMPANY POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION: The Company has in place a Stakeholders Relationship Committee in terms of the requirements of the Companies Act, 2013 read with the rules made thereunder and Regulation 20 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details relating to the same are given in Annexure 'B' - Report on Corporate Governance forming part of this Board Report. Members are requested to refer to page 304 of this Annual Report. Regulations, 2015. The details relating to the same are given in Annexure 'B' - Report on Corporate Governance forming part of this Board Report. Members are requested to refer to pages 298 to 300 of this Annual Report. STAKEHOLDERS RELATIONSHIP COMMITTEE: The Company has in place an Audit Committee in terms of the requirements of the Companies Act, 2013 read with the rules made thereunder and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) AUDIT COMMITTEE: This information is given in Annexure 'B' - Report on Corporate Governance forming part of this Report. Members are requested to refer to pages 293 and 294 of this Annual Report. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS: The Company has also disclosed on its website http://investors.larsentoubro.com/Listing-Compliance.aspx details of the familiarization programs to educate the Independent Directors regarding their roles, rights and responsibilities in the Company and the nature of the industry in which the Company operates, the business model of the Company, etc. The terms and conditions of appointment of the Independent Directors are in compliance with the provisions of the Companies Act, 2013 and are placed on the website of the Company http://investors.larsentoubro.com/Listing- Compliance.aspx. and Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The same are also displayed on the website of the Company http://investors.larsentoubro.com/Listing-Compliance.aspx. The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Companies Act, 2013. Mr. Adil Zainulbhai, Mr. Sanjeev Aga and Mr. Subramanian Sarma, Directors of the Company. Mr. Adil Zainulbhai is the Chairman of the Committee. aspx. 285 The Audit Committee reviews the independence and objectivity of the Auditors and the effectiveness of the Audit process. The Auditors have confirmed that they have subjected themselves to the peer review process of Institute of Chartered Accountants of India (ICAI) and hold valid certificate issued by the Peer Review Board of ICAI. M/s. Deloitte Haskins & Sells LLP were re-appointed as Statutory Auditors for a period of 5 continuous years from the conclusion of 75th Annual General Meeting till the conclusion of 80th Annual General Meeting of the Company. AUDITORS: The Secretarial Audit Report issued by M/s. S. N. Ananthasubramanian & Co., Company Secretaries is attached as Annexure 'E' forming part of this Board Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. SECRETARIAL AUDIT REPORT: The Auditors attend the Annual General Meeting of the Company. Also see page 308 forming part of Annexure 'B' of this Board Report. The Auditors' report to the Shareholders does not contain any qualification, observation or adverse comment. Your Directors are pleased to attach the Consolidated Financial Statements pursuant to section 129(3) of the Companies Act, 2013 and Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, prepared in accordance with the provisions of the Companies Act and the Indian Accounting Standards (Ind AS). CONSOLIDATED FINANCIAL STATEMENTS: or tribunals impacting the going concern status and the Company's operations in future. During the year under review, there were no material and significant orders passed by the regulators or courts DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS: Also see pages 307 and 308 forming part of Annexure 'B' of this Board Report. AUDIT REPORT: COST AUDITORS: The provisions of section 148(1) of the Companies Act, 2013 are applicable to the Company and accordingly the Company has maintained cost accounts and records in respect of the applicable products for the year ended March 31, 2022. Pursuant to the provisions of section 148 of the Companies Act, 2013 and as per the Companies (Cost Records and Audit) Rules, 2014 and amendments thereof, the Board, on the recommendation of the Audit Committee, at 14 Remote e-voting website of KFintech 288 (DIN: 00001514) A.M. NAIK Group Chairman For and on behalf of the Board Date 12th May 2022 Place Mumbai Banks, Central and State Government authorities, Regulatory Authorities, Stock Exchanges and all other stakeholders for their continued co-operation and support to the Company. Your Directors also wish to record their appreciation for the continued co-operation and support received from the Joint Venture Partners/Associates. The Directors take this opportunity to thank the Customers, Supply Chain Partners, Employees, Financial Institutions, ACKNOWLEDGEMENT: The Report of the Cost Auditors for the financial year ended 31st March 2022 is under finalization and shall be filed with the Ministry of Corporate Affairs within the prescribed period. A proposal for ratification of remuneration of the Cost Auditor for FY 2023 is placed before the Shareholders. its meeting held on 12th May 2022, has approved the appointment of M/s R. Nanabhoy & Co., Cost Accountants, as the Cost Auditors for the Company for the financial year ending 31st March 2023 at a remuneration of 17 lakhs plus taxes and out of pocket expenses. Board Report Integrated Annual Report 2021-22 287 The Company has a Whistle-blower Policy in place since 2004. The Policy has been modified to meet the requirements of Vigil Mechanism under the Companies Act, 2013. The Whistle Blower Policy is available on the Company's website https://www.larsentoubro.com/ corporate/about-It-group/corporate-policies/. A brief note regarding the Company's initiatives with respect to CSR is given in Annexure 'B' - Report on Corporate Governance forming part of this Board Report. Please refer to pages 304 to 306 of this Annual Report. Remuneration received by Whole-time Director from subsidiary company: Mr. D. K. Sen, Whole- time Director of the Company is also the Managing Director of L&T Infrastructure Development Projects Limited (L&T IDPL), a subsidiary of the Company. During FY 2022, part of the remuneration paid to Mr. Sen was charged to L&T IDPL. Accordingly, the Company has recovered an amount of ₹ 1,81,18,283 from L&T IDPL for remuneration paid to Mr. Sen. VIGIL MECHANISM: IBC: There is no Corporate Insolvency Resolution Process initiated under the Insolvency and Bankruptcy Code, 2016 (IBC). Training programs and workshops for employees are organised throughout the year. The orientation programs for new recruits include awareness sessions on prevention A detailed procedure for making a Complaint, initiating an enquiry, redressal process and preparation of report within a stipulated timeline is laid out in the Policy document. The Policy also covers Disciplinary Action for Sexual Harassment. The Policy is uploaded on the Company's website at https://www.larsentoubro.com/corporate/about- It-group/corporate-policies/. To provide the procedure for the resolution and redressal of complaints of Sexual Harassment. To lay down the guidelines for reporting acts of Sexual Harassment at the workplace; and • • To define Sexual Harassment; of sexual harassment and upholding the dignity of employees. Specific programs have been created on the digital platform to sensitize employees to uphold the dignity of their colleagues and prevention of sexual harassment. During FY 2022, about 11,100 employees have undergone training through the programs/ workshops including the awareness sessions held on digital platform. There were 2 complaints received during the FY 2022. Both the complaints were redressed as per the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules, 2013. OTHER DISCLOSURES: The Company believes that every employee should have the opportunity to work in an environment free from any conduct which can be considered as Sexual Harassment. The Company is committed to treating every employee with dignity and respect. The Company has formulated a policy on 'Protection of Women's Rights at Workplace' as per the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules, 2013. The policy is applicable to all L&T establishments located in India. The policy has been widely disseminated. The Company has constituted Internal Complaints Committees to ensure implementation and compliance with the provisions of the aforesaid Act and the Rules. The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings. COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS: The Chief Financial Officer of the Company has certified that CSR funds so disbursed for the projects have been utilized for the purposes and in the manner as approved by the Board. The disclosures required to be given under section 135 of the Companies Act, 2013 read with Rule 8(1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014 are given in Annexure 'C' forming part of this Board Report. Board Report Integrated Annual Report 2021-22 PROTECTION OF WOMEN AT WORKPLACE: ESOP Disclosures: There has been no change in the Employee Stock Option Schemes (ESOP schemes) during the current financial year. The disclosure relating to ESOPs required to be made under the provisions of the Companies Act, 2013 and the rules made thereunder and the Securities and Exchange Board of India (Share Based Employee Benefit and Sweat Equity) Regulations, 2021 ("SBEB Regulations") is provided on the website of the Company https://investors.larsentoubro.com/Listing-Compliance.aspx. A certificate obtained from the Secretarial Auditors, confirming that the ESOP Schemes of the Company are in compliance with the SBEB Regulations and that the Company has complied with the provisions of the Companies Act, 2013 and the SBEB Regulations is also provided in Annexure 'B' forming part of this Report. MSME: The Company has registered itself on Trade Receivables Discounting System platform (TReDS) through the service providers Receivables Exchange of India Limited. The Company complies with the requirement of submitting a half yearly return to the Ministry of Corporate Affairs within the prescribed timelines. Annual Return: The Annual Return of the Company for the FY 2022 is available on our website https://investors.larsentoubro.com/Listing-Compliance.aspx. Statutory Compliance: The Company complies with all applicable laws and regulations, pays applicable taxes on time, ensures statutory CSR spend and initiates sustainable activities. showcasing how the Company is adding value to its stakeholders. The Integrated Report forms a part of this Annual Report. LARSEN & TOUBRO Statements Statutory Financial Reports Report Discussion and Analysis Integrated Management Corporate Overview 286 Integrated Reporting: The Company is complying with the applicable requirements of the Integrated Reporting Framework. The Integrated Report tracks the sustainability performance of the organization and its interconnectedness with the financial performance, Business Responsibility and Sustainability Reporting: As per Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on Business Responsibility and Sustainability Reporting forms a part of this Annual Report (refer pages 210 to 257). Corporate Governance: Pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Report on Corporate Governance and a certificate obtained from the Statutory Auditors confirming compliance with Corporate Governance requirements provided in the aforesaid Regulations, are provided in Annexure 'B' forming part of this Report. Reporting of fraud: The Auditors of the Company have not reported any instances of fraud committed against the Company by its officers or employees as specified under section 143(12) of the Companies Act, 2013. The Board Risk Management Committee comprises This Policy encompasses the following objectives: Information as required to be given under section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is provided in Annexure 'A' forming part of this Board Report. 1172.50 9288.06 10913.91 2020-21 2021-22 Profit before tax from discontinued operations 1150.68 Profit for the period from continuing operations Profit before tax Add: Exceptional Items Profit before exceptional items and tax Less: Depreciation, amortization, impairment and obsolescence Profit before depreciation, exceptional items and tax Particulars Less: Provision for tax 9741.41 8137.38 290.06 11797.79 7879.45 Net profit after tax from continuing operations and discontinued operations 8650.48 Net profit after tax from discontinued operations 2548.75 Less: Tax expense of discontinued operations 11199.23 3147.31 7879.45 2171.42 2152.02 5318.73 10031.47 (2818.65) crore Add: Balance brought forward from the previous year FINANCIAL RESULTS: Dear Members, https://web.cdslindia.com/myeasi/home/login 1. Shareholders who have opted for Easi facility of CDSL: Shares held in Demat mode with CDSL: 2. Others: https://evoting.nsdl.com 1. Shareholders registered for NSDL IDEAS facility: https://eservices.nsdl.com/ Shares held in Demat mode with NSDL: 2. Others: www.cdslindia.com Wednesday, August 3, 2022, 05.00 P.M On or before Monday, August 08, 2022 Thursday, July 28, 2022 Friday, July 22, 2022 Email Registration and Contact Updation Process Name, address and contact details of e-voting service provider and registrar and transfer agent RISK MANAGEMENT: 16 Monday, August 1, 2022, 09.00 A.M Logging in through Depositary Participants: Members can also login using the login credentials of their demat account through your DP registered with NSDL/CDSL for e-voting facility. Registrar and Transfer Agent Board Report Integrated Annual Report 2021-22 279 KFintech Website: https://ris.kfintech.com/clientservices/mobilereg/mobileemailreg.aspx Physical Shareholders: Contact respective Depository Participant Demat Shareholders: Tel No: 18001020 990/1800 22 44 30 Lower Parel, Mumbai - 400013 National Securities Depositories Limited (NSDL) E-voting Service Provider Email: einward.ris@KFintech.com Tel No: 1800-425-8998/1800-345-4001 Selenium, Tower B, Plot 31-32, Gachibowli, Financial District, Nanakramguda, Hyderabad 500 032 KFin Technologies Limited ("KFintech"), The Directors have pleasure in presenting their 77th Annual Report and Audited Financial Statements for the year ended 31st March 2022. 25722.05 Board Report Add: Change on account of business combination 281 The Company has formulated a policy on identification of material subsidiaries in line with Regulation 16(c) of the SEBI (Listing Obligations and Disclosure Requirements) A statement containing the salient features of the financial statement of subsidiary / associate / joint venture companies and their contribution to the overall performance of the Company is provided on pages 611 to 622 of this Annual Report. Pursuant to an order passed by the National Company Law Tribunal, Mumbai bench, the equity share capital of L&T Seawoods Limited, a wholly owned subsidiary, was reduced to the extent of 30,00,00,000 equity shares aggregating to 300 crore by way of return of surplus cash on 7th April 2022. Kesun Iron and Steel Company Private Limited has applied to the Ministry of Corporate Affairs for strike off under the provisions of Companies Act, 2013 on 15th December 2021. The approval is awaited. During the year under review, the Company acquired 6,82,25,347 equity shares of L&T Finance Holdings Limited (LTFHL) and presently holds 163,92,29,920 equity shares representing 66.26% of the total share capital of LTFHL. L&T Uttaranchal Hydropower Limited (L&T UHPL) ceased to be a subsidiary of the Company pursuant to the sale of entire stake by the Company and L&T Power Development Limited (a wholly owned subsidiary) to ReNew Power Services Private Limited (ReNew) for a total consideration of 1,003 crore. The Company held 142,68,50,000 preference shares in L&T UHPL which were entirely sold to ReNew. SUBSIDIARY / ASSOCIATE / JOINT VENTURE COMPANIES: During the year under review, the Company has not accepted deposits from the public falling within the ambit of section 73 of the Companies Act, 2013 and the rules framed thereunder, and the requisite returns have been filed. The Company does not have any unclaimed deposits as of date. DEPOSITS: As at 31st March 2022, the gross value of property, plant and equipment, investment property and other intangible assets including leased assets, were at 16,837.38 crore and the net value of property, plant and equipment, investment property and other intangible assets, including leased assets, were at 9,695.93 crore. Capital Expenditure during the year amounted to ₹ 1,410.29 crore. CAPITAL EXPENDITURE: AMALGAMATION OF MINDTREE LIMITED WITH LARSEN & TOUBRO INFOTECH LIMITED: Subsequent to the year under review, the Board of Directors of Mindtree Limited (MT) and Larsen & Toubro Infotech Limited (LTI), listed subsidiaries of the Company, have approved a Scheme of Amalgamation of MT with LTI. The said scheme is subject to approval of the Shareholders and creditors of these subsidiaries and the approval of applicable regulators and the Hon'ble National Company Law Tribunals having jurisdiction over these subsidiary companies. The Scheme of Arrangement (the "Scheme") was approved by the Hon'ble National Company Law Tribunal, Mumbai Bench and became effective from 7th February 2022. The Appointed date for the Scheme is 1st April 2021. Subsequently all the subsidiaries of LTHE have become direct subsidiaries of the Company. SCHEME OF ARRANGEMENT BETWEEN THE COMPANY AND L&T HYDROCARBON ENGINEERING LIMITED: The Board of Directors of the Company had approved a Scheme for Amalgamation of L&T Hydrocarbon Engineering Limited (LTHE), a wholly owned subsidiary, with the Company. The rationale for the Scheme was to create cost effectiveness by integrating the Hydrocarbon business of LTHE and Engineering, Projects and Construction (EPC) power business of the Company. During FY 2022, the Company sold its digital transformation business, incubated and operated as L&T NXT, to Mindtree Limited, a listed subsidiary of the Company, for a consideration of 198 crore. Integrated Annual Report 2021-22 SALE OF DIGITAL BUSINESS (L&T NXT): Regulations, 2015 and the same is placed on the Company's website at https://www.larsentoubro.com/ corporate/about-It-group/corporate-policies/. The Company does not have any material subsidiaries as on the date of this report. The Company has disclosed the full particulars of the loans given, investments made or guarantees given or security provided as required under section 186 of the Companies Act, 2013, Regulation 34(3) and Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 in Notes 57 and 58 forming part of the financial statements. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO: Other than stated elsewhere in this report, there are no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this report. 16957.17 MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY, BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT: The Company is seeking an enabling approval for certain material related party transactions at the ensuing Annual General Meeting (AGM). Shareholders are requested to refer to the AGM notice at pages 258 to 279 of this Annual Report, for details of the proposed related party transactions. of the Postal Ballot will be declared on or before 18th May 2022. The Company proposes to enter into a material related party transaction with L&T Finance Limited for providing a line of credit of 2,000 crore for a period of 5 years from FY 2023 till FY 2027. The transaction is not a material related party transaction as per the provisions of the Companies Act, 2013. However, the said transaction exceeds the materiality threshold of ₹1,000 crore as provided under Regulation 23(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Company has sought an enabling approval from the Shareholders by means of a Postal Ballot. The results There were no related party transactions that have conflict with the interest of the Company. During the year under review, all related party transactions were in the ordinary course of business and at arm's length. The Audit Committee has approved the related party transactions for the FY 2022 and the estimated related party transactions for FY 2023. The Company has a process in place to periodically review and monitor Related Party Transactions. The Audit Committee and the Board of Directors have reviewed and approved the amended Related Party Transactions Policy and the same has been uploaded on the Company's website https://www.larsentoubro.com/ corporate/about-lt-group/corporate-policies/. Obligations and Disclosure Requirements) Regulations, 2015, the Company has revised its existing Related Party Transactions Policy to align it with the requirements of the said Regulations. Pursuant to the amendments to the SEBI (Listing WITH RELATED PARTIES: PARTICULARS OF CONTRACTS OR ARRANGEMENTS PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN OR SECURITY PROVIDED BY THE COMPANY: The Company's borrowing programmes have received the highest credit ratings from CRISIL, ICRA and India Ratings. The details of the same are given on page 313 in Annexure 'B' - Report on Corporate Governance forming part of this Board Report and is also available on the website of the Company. Board Report The Company has issued Commercial Papers amounting to 5,800 crore during FY 2022. As on date, the outstanding amount of Commercial Papers is 2,000 crore. AMOUNT TO BE CARRIED TO GENERAL RESERVE: The Company has not transferred any amount to general reserve during the current financial year. DIVIDEND: The total income for the financial year under review was 1,04,613.06 crore as against 90,615.77 crore for the previous financial year, registering an increase of 15.45%. The profit before tax from continuing operations including exceptional items was 10,031.47 crore for the financial year under review as against 5,318.73 crore for the previous financial year. The profit after tax from continuing operations including exceptional items was 7,879.45 crore for the financial year under review as against 3,147.31 crore for the previous financial year, registering an increase of 150.36%. PERFORMANCE OF THE COMPANY: 260.00 25722.05 31131.14 39.36 58.02 Add: Gain on remeasurement of the net defined benefits plans Less: Capital redemption reserve 2527.66 Less: Interim dividend paid during the year 1123.23 The Company has not defaulted on payment of any dues to the financial lenders. 2528.38 Less: Dividend paid for the previous year 838.62 The Directors recommend payment of dividend of ₹22/- (1,100%) per equity share of 2/- each on the share capital amounting to 3,091.06 crore. The Dividend payment is based upon the parameters mentioned in the Dividend Distribution Policy approved Balance to be carried forward by the Board of Directors of the Company which is in line with regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Policy is uploaded on the Company's website at https://www.larsentoubro.com/corporate/about-lt-group/ LARSEN & TOUBRO Statutory Financial Reports Statements The Company has exercised the first call on the partly paid up Debentures issued in the FY 2021 and raised 450 crore (2.5 lakh each on 18,000 debentures) during FY 2022. The funds raised through issuance of NCDs have been utilized for repayment of existing maturing NCDs. Report Discussion and Analysis Integrated Corporate Overview 280 Management During the year, the Company repaid Non-convertible Debentures (NCDs) of 450 crore and short-term External Commercial Borrowings (ECB) of USD 100 million as per the repayment schedule. The Company's Authorized Capital increased from crore to 8,037 crore pursuant to amalgamation of L&T Hydrocarbon Engineering Limited with the Company vide order dated 28th January 2022 passed by Hon'ble National Company Law Tribunal, Mumbai bench. 5,025 During the year under review, the Company allotted 473,826 equity shares of 2/- each upon exercise of stock options by eligible employees under the Employee Stock Option Schemes. CAPITAL AND FINANCE: corporate-policies/. These identified risks are monitored at regular intervals for resolution / mitigation. The Company views the transition to Green Energy as an opportunity. Legal, Taxation, Finance and Risk teams are involved in vetting the proposal at the bid stage. The Company maintains a strong documentation and follow up with clients / sub-contractors/ vendors for any claim that is submitted. The Company relies on strong internal processes, back-to-back arrangements with vendors/subcontractors, project and business level working capital monitoring policies, and pre-bid reviews as a risk mitigation strategy. Opportunities like Green Hydrogen, Clean Energy Technology, and Offshore Wind have been identified as new growth avenues. The majority of risks are identified during the Prebid stage and appropriate mitigation strategies are developed. The Company is committed to Energy Transition & Sustainability goals by setting targets to become Water neutral by 2035 and Carbon neutral by 2040. Its ESG roadmap is aligned with the 5-year strategic plan - 'Lakshya 2026' with a commitment to climate leadership, water stewardship, circular economy, green supply chain, biodiversity, and green offerings. (i) The weather of a location cannot be predicted accurately based on the meteorological data. (iv) High precipitation or high flooding of rivers pose significant risk to operations and movement of plant and machinery. The Company faces inherent risks throughout the execution phase of the project. Project challenges include employee / workmen mobilisation, adverse geological surprises, unavailability of work front, land acquisition and Right-of-Way (ROW), delay in approval and clearances, visa issues, etc. (iii) Extremely high daytime temperatures have a negative impact on health and safety of construction workers and impact productivity. (ii) Climate change is a risk multiplier and has also enhanced the instances of natural calamities, which cause problems in site operations, logistics of equipment/materials and safety of resources. There have been additional challenges due to pandemic like supply chain disruptions, scarcity of raw materials, inflation, counter party risk, etc. The world has seen high amount of climate variability and extreme weather events over the years due to global warming. The Company's primary operations in the construction and engineering sector may be impacted by climate change. Some of the major concerns include: The Company is undergoing a digital transformation, and cybersecurity has become a key concern for the continuity of business. Vulnerabilities like targeted attacks, ransomware threats, and phishing have enhanced the importance of protecting the information technology infrastructure and data of the Company. Some of the businesses like Financial Services, Hyderabad Metro, Realty were affected in varying degrees due to the pandemic. The Company implemented a number of safety measures like vaccination camps for staff and labour, enforcing safe distancing norms etc. to mitigate the effects of the COVID-19 pandemic. Credit worthiness of counterparties is being monitored regularly. (v) Extreme weather events cause significant disruptions in operations and supply chain and thereby have a direct impact on the costs. The Chief Information Security Officer of the Company, under the guidance of the Risk Management Committee, oversees the implementation of strong enterprise-wide cybersecurity practices. These practices are grouped into people, processes and technology control areas under a company-wide Cyber Security Assurance Framework. The maturity of security controls is continually being measured to maintain them at desired benchmarks. The Group has an evolved policy for foreign exchange risk management, with separate policies for project and manufacturing business and IT&TS business. With respect to project and manufacturing portfolio, the currency risks are evaluated from the tendering stage and are assessed for pass-through arrangements in contracts, coverage by way of natural hedge and the balance appropriately hedged. The Company also proactively monitors depeg risk in the GCC. 26 Sr No. The Company partners with multiple stakeholders in executing projects and the terms agreed upon with these parties have become more stringent over the years. Joint & several liabilities, long defects liability period, cost overruns, back-ended payment structure, working capital challenges, and claim management challenges will influence the performance and cash flows. Commodity Name % of such exposure hedged through commodity derivative For disclosure of commodity exposures as required under clause 9(n) of Part C of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 in the format specified vide SEBI Circular dated 15th November, 2018 is given below: The financial risks involving commodity prices are managed through price variation clauses embedded in the contracts, hedges in financial markets and pass-through price arrangements. In the case of contracts with price variation clauses, the Company runs a basis risk in terms of reimbursement tied to various price indices versus actual commodity prices. During financial year 2021-22, commodity prices had remained elevated, which is expected to continue in the financial year 2022-23, driven by supply constraints which have been further accentuated by geopolitical events. reports of attempts to develop alternate payment systems to support trade and capital flows. The rise of cryptocurrency may pose additional challenges in this regard. Foreign Exchange and Commodity Price Risks The businesses of the Company are exposed to fluctuations in foreign exchange rates and commodity prices. Additionally, it has exposures to foreign currency denominated financial assets and liabilities. With the increasing tendency to access sanctions to combat geo-political issues, there have been FINANCIAL RISKS The Enterprise Risk Management Framework is continuously reviewed and benchmarked with industry best practices. The Company emphasises on continuous learning and has taken initiatives to strengthen its processes. An e-Learning module of ERM is in place for employees to get acquainted with Risk Management processes and manage risks effectively and responsibly. Periodic training workshops on Risk Management are organised across the Company to spread awareness. The Risk Management processes are enabled through an ERM system that facilitates monitoring risks across projects in various geographies of operation, provides a risk-weighted portfolio view of businesses and shares learnings across the organisation. An integrated Knowledge Centre Portal is also available that provides a platform for assessment of financials of counterparty, geo-political and macro risks to support informed and fact-based decision-making. LARSEN & TOUBRO Discussion and Analysis Report Integrated Statutory Financial Reports Statements Management Corporate Overview The Company adheres to all environmental and safety compliances including ISO 14001 and ISO 45001. Occupational hazards and adherence to environmental management plan are carefully monitored at all project sites and manufacturing locations. Assessment of high precipitation/flooding periods is done at bidding stage for construction projects and same is factored in project execution plan to avoid heavy or at-risk work during those periods. Monsoon preparedness plans are a standard requirement now for all projects and cover plans for protection of equipment (covering, tying down or other suitable arrangements), backup for power/fuel, human safety and plans for restoring normal operations e.g. dewatering arrangements. For dealing with periods of extreme temperature, operations are adjusted to start earlier in the day and restart after taking a mid-day break. To de-risk movement of equipment in difficult conditions, appropriate arrangements (route assessment, ground reinforcement, special support team etc.) are made in advance. Initial Risk assessment and regular risk reviews aim to anticipate impact of climate risks and devise solutions or build contingencies to handle them accordingly. There is a renewed focus on Energy Transition across the world, with most of the Governments supporting Climate Action Plan. This transition involves risks in the form of switching to a new business model. Stakeholder activism on ESG has increased over the years demanding that corporations pursue sustainable business models. Statutory Financial Reports Statements Cyber Security The top enterprise-wide risks for the Company and their mitigation measures are summarised below: The Company also has a Chief Information Security Officer (CISO) who is responsible for forming and assuring implementation of IT security policies, frameworks to manage cybersecurity risk, and controls across the organisation. framework, processes, structure, and the mitigation systems. It also on a periodic basis, evaluates and monitors the key risks at a Company level. The Audit Committee, in compliance with The Companies Act and SEBI LODR, oversees the financial risk framework of the Company. The Company is predominantly into the Projects business and has a robust Project Risk Management process. The key processes of risk reviews include (a) country clearance process for the first-time geographies (b) pre-bid risk reviews based on authorisation level mapped to the range of bid values (c) execution risk reviews of the projects for tracking the movement of risks and course corrections and (d) close out reviews to capture key learnings from the projects completed and document the learnings for future bids. The Company's risk management processes ensure that the businesses accept risks as per the boundary conditions based on the risk appetite of the organisation. The entire risk management process is overseen by the office of the Chief Risk Officer of the Company. • The Board Risk Management Committee (BRMC) & Audit Committee is the Fourth Tier that provides risk governance and oversight as a component of strategic leadership. The BRMC reviews the existing risk management policy, • The Apex Risk Management Committee is the Third Tier that monitors & provides strategic decisions on risks. This Committee periodically evaluates the robustness and defensibility of the systems in place and suggests mitigation plans accordingly. • The Second Tier comprises corporate functions and dedicated Business Risk Management teams who are responsible for monitoring and reporting of risks and providing guidance to risk owners. • The operating businesses form the First Tier as risk owners and have primary responsibility for identifying and managing the risks. L&T has a comprehensive Enterprise Risk Management (ERM) framework in place for identification, assessment, treatment and reporting of risks. The Risk Management Framework consists of four tiers: Geopolitical Risk Risk Management Integrated Discussion and Analysis Report Management Corporate Overview 24 Human Capital (pg.no.168) Social & Relationship Capital (pg.no.178) Exposure towards the particular commodity Natural Capital (pg. no.136) LARSEN & TOUBRO Climate Risk Competition Risk Execution Challenges Inequitable Terms of Trade Energy Transition Integrated Annual Report 2021-22 25 The Company is also foraying into new geographies and new businesses. New Government initiatives like Atmanirbhar Bharat (Make in India) and impetus to National Infrastructure Pipeline provides lot of growth opportunities in the near future. Being a diversified conglomerate, the Company portfolio itself offsets the slowdown in some sectors with growth in other sectors. Underperformance in key sectors Bids are priced accordingly considering the risk appetite and management strategy to deal with competition. The Company engages periodically with external experts and Government Authorities to assess potential impacts of geopolitical conflicts on new investments, supply chain, logistics, and commodity prices. The Company has put in place, alternate strategic sourcing options to minimise the impact. The Company has in place mitigation strategies like country- clearance approval procedure, monitoring of changes in sanction regimes, diversification of Order Book, etc. Further, entity level sanctions are also monitored for counter party risk assessment. Mitigation Sectors such as Power, Nuclear, Defence - Shipbuilding, continued to show slow growth and underutilization of their capacities. Removal of Bid Bond and relaxation of Performance Bank Guarantee in Government contracts has led to increased competition, especially in Road Projects. It has been observed that competition from foreign and domestic players has considerably increased in the last few years. The recent geopolitical event - Russia-Ukraine - conflict has impacted the world directly or indirectly in terms of supply chain disruptions and inflation. The Company operates in numerous geographies and is exposed to risks on account of protectionist policies, political dynamics, trade barriers, sanctions, and geopolitical conflicts. The Projects Business derives its competitive strength from its excellence in execution, reputation for quality, technology, timely completion, cost-effectiveness, sourcing capability, project management expertise, strong safety record and lengthy experience with a wide range of services and technologies. (crore) With the post COVID-19 recovery, the attention is now focussed on the size of G4 central bank balance sheets and a rethink of the accommodative monetary policy. The Federal Reserve started hiking interest rates with a 25 bps increase in their March 2022 meeting. The RBI, also in order to combat the inflationary trends, has recently increased the repo rate leading to a hardening interest rate regime. terms towards the particular commodity (Tn) Nickel - Buy 11 66,36,849 4,209 Cement - Buy 10 29,66,407 19,762 Steel - Buy 9 73.76 73.76 57,020 71 Iron ore - Buy 8 17,570 177 1,099 80.07 80.07 For details refer to sections: 28 The Company has adopted the globally accepted framework issued by the Committee of Sponsoring Organisations (COSO) of the Treadway Commission for Internal Controls. The Internal Financial Controls are instituted at the entity and process levels and are aligned with the requirements of the Companies Act, 2013. The internal control teams at corporate and business levels serve as the second line of defence and assist the Management in setting up of sound internal controls and establishing, operating, and upgrading the internal controls system. The Corporate team shares best practices across the organisation, reviews and assesses the processes, formulates and updates the policies, guidance notes and advisories. The Board of Directors and Management at all levels exhibit the right tone at the top through their actions, behaviour, and directives. The 'Code of Conduct' emphasises the corporate culture and values of the Company which serves as a beacon for the employees and inculcates the importance of integrity and ethical values. Suppliers must conform to a separate 'Code of Conduct' as a part of the registration process to ensure that they align to the Company's commitment to seek sustainable growth by integrating Environment, Social and Governance (ESG) principles with its businesses. The 'Code of Conduct' and the 'Whistle-blower / Vigil Mechanism' policies are available to both employees and business partners, to enable them to raise genuine concerns about any actual or suspected ethical/legal violations or misconduct or fraud, with adequate safeguards against victimisation, fear of punishment or unfair treatment. One of the important pillars of corporate governance is a robust internal controls framework that assists the corporation to achieve predictable and desired outcomes. It helps in aligning controls with the dynamics of constant challenges and changes in risk profile, arising due to varying internal and external factors. The internal controls framework established by the Company is commensurate with the size of operations and complexity of its businesses. All internal controls are well aligned with the evolving business needs, objectives, and overall strategic direction. The Company ensures integrity in conducting its business, safeguarding of its assets, timely preparation of reliable financial information, accuracy and completeness in maintaining accounting records, and prevention and detection of frauds and errors through a set of detailed policies and procedures. Internal Controls & Safeguards While the Company has adequate banking facilities to cater to the business requirements, the Large Exposure Framework guidelines of RBI implemented from April 1, 2019, may constrain the availability of bank limits for the Group. At the same time, the Government's initiative to reduce the performance bank guarantee requirement in projects from 10% to 3% has positively impacted the resources availability for the businesses. The Company plans to maintain around the current level of liquidity reserve on the Balance Sheet to deal with continuing uncertainties in economic conditions. 83 Since business conditions have improved post the initial disruption, the Company ended the year with a reduction in its debt levels at 20,298 crore vis-à-vis 24,474 crore in FY 2020-21. Low standalone gearing levels (Gross Debt to Equity ratio at 0.30) and an adequate cash balance of ~25,000 crore equip the Company to deal with normal business uncertainties. FY 2021-22 started with another phase of uncertainty in terms of liquidity with renewed lockdowns and disruption of work at sites as well as in client offices. However, with the Company having raised significant amount of long-term liquidity in FY 2020-21, there was adequate liquidity reserve on the balance sheet. The capital allocation philosophy of the Company is geared to support business initiatives for the medium to long term growth of the Company, while retaining enough liquidity to support any short-term exigencies faced by the Group. Financial Resources & Capital Allocation The Company judiciously deploys its surplus funds in short- term investments in line with the Board approved policy. It constantly monitors the liquidity levels, economic and capital market conditions and maintains access to the lowest possible cost of sourcing liquidity through banking lines, trade finance and capital markets. The Company managed its higher than usual treasury investments to generate investment return to neutralise the higher interest cost due to borrowings raised in the previous financial year. The Company dynamically manages interest rate risks through a mix of fund-raising, investment products and derivatives across maturity profiles and currencies within a robust risk management framework. Liquidity and Interest Rate Risks Financial Risk Management is governed by the Risk Management framework and policy approved by the Audit Committee and authorised by the Board. Financial risks in each business portfolio are measured and managed by Corporate Treasury aided by the said framework. Integrated Annual Report 2021-22 27 The Company provided support to Group companies like L&T Metro Rail Hyderabad Ltd. while it was recovering from impact of COVID-19's second and third waves. The Company also supported the capital expenditure required to execute some of the large projects awarded in the previous financial year. Going forward, apart from regular capital expenditure, the Company plans to invest in new businesses of Green Energy & Data Centers and continue to focus on growing its IT&TS services business. Coking coal - Buy 7 100.00 3 52.81 52.81 14,496 372 Aluminium - Sell 2 50.11 Zinc - Buy 50.11 1,191 Aluminium - Buy 1 OTC Exchange OTC Exchange Total International market Domestic market 55,723 Exposure in Quantity 80 100.00 100.00 6,045 104 Lead - Buy 6 100.00 100.00 10,801 3,108 801 5 68.48 68.48 22,728 1,670 Copper - Buy 4 100.00 Copper - Sell FY 2021-22 is Data Center & Cloud Services (Business offering linked to data centers and related services). LTI L&T SuFin and L&T EduTech have been formally launched in FY 2021-22 and currently in scale-up stage. Affordable & Mass Housing (B&F) Water and Sewage Treatment systems (WET) Societal Challenges Climate change and resource scarcity driving need for solutions to balance growing needs with environment Green Hydrogen (GE) Water Recycling and Reuse solutions (WET) Climate Change LARSEN & TOUBRO Green buildings (B&F) Energy Storage (PT&D, HC) Renewables - Solar, Expressways & Rail Networks (TI) Electric, Autonomous and Connected systems (LTTS) World class airports (B&F, TI) Mass Rapid Transit Systems (TI, HC) 田 Safe, fast, affordable and environment friendly solutions for movement of people and goods Energy Efficient Power Systems and microgrids (PT&D) Financial services (LTFS) Universal coverage for basic amenities while keeping up with growing demands of global population SWC Treatment Mindtree MT Services L&T Technology LTTS Transportation Infra Heavy Civil WET Water & Effluent Mobility Growth Platforms (SuFin, EduTech) Technology and services offerings HC TI Data Storage and Computing (DC) L&T Infotech B&F Building & Factories Big Data, Al/ML, AR / VR, 5G, Cloud, Cybersecurity (LTI, LTTS, MT) Automation, Industry 4.0, Digital Engineering (LTTS, MT) Digital Transformation to transform businesses across various domains Smart World & congestion and call for better solutions Increasing population pressures in cities Integrated Annual Report 2021-22 19 The plan also envisages venturing into emerging businesses like Green Hydrogen development, Electrolyser & Battery manufacturing, Data Centers and also scale up new-age digital and e-commerce businesses over the plan period. The thrust on unlocking value by exiting non-core businesses continues. The Lakshya 2026 plan targets to achieve value accretive growth in the existing businesses through a multi- pronged approach like selective project bidding, targeting opportunities in line with global ESG trends, riding the momentum in existing and emerging technological trends for services, rejigging business offerings and driving profitability through operational excellence, value engineering and digitalisation initiatives. The Company's 5-year Strategic Plan, 'Lakshya', is developed through a collaborative and consultative process across the organisation. The Lakshya 2026 plan formulation was initiated in March 2021. The exercise was to be undertaken in 2020 for the period FY 2021-22 to FY 2025-26 but was deferred by a year owing to the exigencies created by the COVID-19 pandemic and the heightened uncertainty across economy and various sectors. The first year, which is FY 2021-22, was covered through the annual budgeting exercise, and Lakshya 2026 plan has been now developed for the four-year period FY 2022-23 to FY 2025-26. Business strategy formulation seeks to set long-term goals and strategies that help the Company in exploiting its strengths, identifying and realising new opportunities, and building new capabilities. This is enabled through three plans with time horizons ranging from long-term Perspective (7-10 years) to medium-term Strategic (5 years) to the short-term (the Annual Budget). Each plan dovetails into the next. Strategy Formulation Business Model and Strategy In this scenario, the themes to watch out for in the medium term would be a possible rearrangement of the global supply chain, consequent shift in export hubs, establishment of a 'new world order' and the gradual shift from globalisation to localisation. There are no easy policy choices in current times. Governments and Central Banks across the world continue to grapple with the prospect of stagflation, as low economic output and supply-side led inflation continues to linger. This is getting further aggravated with the resurgence of COVID-19 infections in some major economies, leading to lockdowns and thereby delaying the resumption of normalcy. The global economy witnessed swift recovery amidst continued progress with vaccination efforts, supportive macroeconomic policies in the major economies and favourable financial conditions. However, the global environment significantly worsened in the latter half of the financial year with the unfavourable geopolitical situation, adversely impacting food and energy prices, and supply chain disruption. Global Economy Statements LARSEN & TOUBRO Financial Management Integrated Statutory Discussion and Analysis Report Reports Corporate Overview Business Model Value creation by the Group is enabled by leveraging its distinct business models across projects, manufacturing and service lines: EPC Projects The Group focuses on its proven core competencies of conceptualising, designing, engineering, executing, and commissioning large, complex projects in the areas of transportation infrastructure, power transmission and distribution, thermal / hydel / solar/ nuclear power plants, green hydrogen, and derivatives, water and irrigation infrastructure, buildings and factories, oil and gas facilities, and metals and mining projects. Safe and Smart cities (SWC) High-capacity utility networks (PT&D, WET) Underground multi-level car parks (Geo) High-rise buildings (B&F) Urbanisation Boom Our businesses and offerings are closely linked to global megatrends Statutory Financial Reports Statements Report A new business which has been evaluated and incubated in Discussion and Analysis Management Corporate Overview 20 While the Group has also undertaken major development projects such as the Hyderabad Metro, toll-road operations (through L&T Infrastructure Development Projects Limited) and Nabha Power in the past, the focus going forward would be to unlock the value embedded in these investments and stay asset-light. The Services businesses cater to sectors of IT (through LTI and Mindtree), Technology Services (through LTTS, Smart World & Communication), Real Estate (through L&T Realty) and Financial Services (through LTFHL), B2B E-commerce (through L&T SuFin), Skilling & Assessment (through L&T EduTech) and Cloud Services (through Data Centers). Services Hi-Tech Manufacturing focuses on custom-built products catering to process industries, material handling equipment, electrolysers and advanced cell chemistry batteries, construction machinery & mining equipment, industrial valves and defence engineering including shipbuilding. Hi-Tech Manufacturing Integrated PT&D Power Transmission leading to various challenges e.g. & Distribution KPIs Value accretive growth of current businesses SO-I Objectives Performance in FY 2021-22 against objectives: Integrated Annual Report 2021-22 23 absorption of new technologies and partnerships through R&D, Capability development SE-5 leadership pipeline to enable growth and business continuity Talent and SE-4 when required Financial resources to enable growth of the businesses and strong financial health to facilitate access to capital markets, as and SE-3 • Revenue Growth •Composition of Services in Total Revenues • Businesses divested Completing the divestment of non- core businesses SO-III Communication The Board has approved entry into the 'Green Energy' business through Green Hydrogen & derivates and Advanced Chemistry Cells batteries. The business will be setup in FY 2022-23, including tie-ups for technology and business partnerships. These new businesses are proposed to be set up through joint ventures, with L&T having a dominant share. The size of Green Portfolio of businesses is 38,843 crore which is 38.2% of standalone revenues in FY 2021-22 (compared to 33.2% in FY 2020-21). In FY 2021-22, the Company divested Singoli-Bhatwari Hydroelectric Project (99 MW) and is actively pursuing divestments in L&T IDPL and exploring various alternatives to cap our current exposure in Hyderabad Metro. In FY 2021-22, despite continued impact of COVID-19 led disruptions, the Company achieved revenues of 156,521 crore (+15% y-o-y). Services business continued to show strong growth of 12% with a stable percentage share in revenues at 30% in FY 2021-22. Performance - Lost Time Incident - Training hours - Water consumption Industry leading capabilities in digital technologies and analytics for productivity, ESG effectiveness and strengthening revenue streams • Metrics linked to ESG performance based on materiality e.g: GHG Intensity • Size of Green Portfolio Enabling business sustainability through high focus on ESG & Stakeholder Value Creation SO-V Scaling up digital and E-commerce businesses SO-IV • New Business or Business offerings developed ride the Energy Transition wave Developing business offerings to • Growth of Digital & E-commerce Businesses SE-2 SO-II SE-1 Management Corporate Overview Supplementing the standalone offerings with partnerships. For the traditional businesses, the Company has partnered with several large global process and technology licensors, and for the IT and Technology Services businesses, the Group has extensive partnerships with established global software product and technology companies. Balancing the cyclical nature of the EPC business through a portfolio of Services businesses. With the aim of better profitability and a stable revenue profile, the Group intends to increase the share of the Services businesses, while pursuing growth in the traditional EPC Contracts and Hi-Tech Manufacturing businesses. Geographically diversified businesses. While India will continue to be the main market for EPC Projects over the next 5 years, select international markets i.e., Middle East, Africa and ASEAN would also be in focus. The Americas and Europe would continue to be the focus geographies for IT services businesses. 7 Complementing the mature businesses with growth- stage businesses. While established businesses continue to drive the growth of the Group, the focus is also on seeding and scaling up new businesses which have high growth potential, are tech-oriented and have high value-addition. The portfolio strategy aims to de-risk the revenue while improving profitability in the pursuit of growth. This strategy focuses on: Discussion and Analysis Portfolio Strategy 21 Green Energy GE Cloud Services Geo L&T Geostructures Data Center & Operational Excellence for leadership in cost- competitiveness and world-class execution DC Integrated Annual Report 2021-22 Integrated Report 22 Statutory Financial Reports Developing business offerings to ride the Energy Transition wave Completing the divestment These Strategic Objectives are supported through Strategic Enablers (SES): Scaling up digital and E-commerce businesses SO-IV SO-III ROE Growth SO-V SO-II of non-core businesses Enabling business sustainability through high focus on ESG & Stakeholder Value Creation of current businesses Value Accretive growth As part of the Lakshya 2026 plan, the Group has re-evaluated shareholder value creation, defined social obligations, and framed sustainability goals. The outcome of this assessment was the rearticulation of its Strategic Objectives (SOS), which would drive value creation over a long-term horizon. These are: LARSEN & TOUBRO Strategic Thrust & Direction SO-I Statements Developed SMS alert (Digital initiative) for monitoring the pressure at fire hydrant system. Adoption of advanced pneumatic valves which can control flow and pressure for lube spraying operation to automatically control spray width, flow and atomization. Partnered with IIT-B to jointly pursue research and development work in the Green Hydrogen value chain and development of next generation technologies. Introduction of Higher striping force BCM for 65.5" MTCP CEAT. Developed 56" MTCP with rope loader, parallel unloader and front bead lift arm developed for Petlas. • Development of OTR Cured tyre Handling system with Trimming and Inspection Machine. Implemented Antivibration pad in power press machine to reduce the vibration and noise thereby reducing noise pollution. Memorandum of Understanding entered with a Technology partner for electrolyser manufacturing. Development of 2nd Generation PCR HTCP and 3rd Generation PCR HTCP with Hollow Squeeze Cylinder and Ribbed construction. • Integrated Annual Report 2021-22 • Annexure to the Board Report 290 289 (i) Efforts made towards technology absorption: Online barcode reading system installed to automatically select recipes for GT Lube Spraying. Establishment of in-house expertise in areas such as Cathodic Protection (CP) system design and implementation. [B] TECHNOLOGY ABSORPTION: Installed express feeder uninterrupted power supply at AIT plant. The measures taken have resulted in savings in cost of production, power consumption and processing time at all locations. • Adopted HCL wet scrubber arrangement for fresh acid storage tank to remove acid fumes in the atmosphere. Developed Satellite Launch Vehicle ToT absorption. Adoption of concrete mix design with GGBS (Ground Granulated Blast-furnace Slag) and Flyash upto the maximum limit and thereby reducing the cement consumption in order to reduce further carbon emission. Replaced HVAC pump with efficient monoblock pump. Development of metal additive, advanced and modular clamping arrangement. Designed and developed universal 3D base plate Developed and implemented automated load testing system for Sarvatra bridge. Deployed pull off adhesive tester, proactive inspection module and stud wielding application. Developed and implemented special purpose machine for shell T-frame twin head SAW and web flange twin head Gas Metal Arc Welding. Deployed portable VR facility at the desktop level for carrying out regular review of 3D models at working level. • • • Developed calibration module, chatbot based helpdesk portal, Information Right Management (IRM) solution. • Developed skid loading optimization for monitoring the progress of Hull Fabrication and Hull Block Turn over time. Deployed digital library module with elastic search for capturing technical and commercial details of various equipment. Introduced Robotic Process Automation (RPA) to automate the repeated and long lead time in Design, IT, Finance and Subcontract processes. Implemented Infor Operating Services (IOS) in Enterprise Resource Planning. Designed P&M IoT and Workmen Management system to improve the productivity and minimise idleness. • • Designed RebarPro that provides end-to-end tracking of rebar from store to site after fabrication which enables minimum wastage, saves time and accelerates process efficiency. Designed ConPro for enabling end-to-end tracking of concrete supply chain across project sites by using QR codes. Indigenously designed the FSLM equipment of 1100MT Capacity. Introduction of LiDAR based Pre-bid engineering, survey and integration with BIM, laying of Bentley Rail Track and development of Open Rail Designer have improved efficiency. Installed VFD panel in place of ELGi compressor. Management Existing metal halide lamps in high mast replaced with 300W LED fittings. Installation of Variable Voltage Frequency Drive (VVFDs) in gantry cranes functional motors to reduce power consumption. Usage of LED fixtures in place of CFL and FTL Fixtures and Installation of daytime timers. • • • • • (i) Steps taken or impact on conservation of energy: Retrofitting diesel compressor to electrical based compressor. Usage of Inverter based welding machines instead of generator-based welding machines. [A] CONSERVATION OF ENERGY: Information as required to be given under Annexure 'A' to the Board Report LARSEN & TOUBRO Financial Statements Integrated Statutory Report Reports Discussion and Analysis Corporate Overview composites and other Aerospace manufacturing technologies. section 134(3)(m) read with rule 8(3) of the Companies (Accounts) Rules, 2014. Improved efficiency through implementation of Flux-cored Arc Welding-Gas Shielded (FCAW-GS) for automation and saving energy. Replacing existing Split AC units with inverter based energy efficient units. Replacing existing Pumps (Water, Sewage and HVAC) with energy efficient pumps. Usage of Thyristor controlled welding machines for fabrication and energy saved 176,010 kwh. • • • (iii) Capital investment on energy conservation equipments: Alternate curing solution has been implemented for all the vertical structures for conserving water. Installed carbon offsetting program through production of solar and wind power which compensated for non-renewable energy consumption and in-turn reduction in carbon footprint. Alternate usage of M-sand instead of Natural Sand at all project sites has helped in conserving the natural resources. Solar Power Plant have been installed for generation of 1747 KW solar electricity that is utilized to power batching plants and project camps. Usage of PNG, cleaner energy source, at DIAL project to power the Hot Mix Plants. Usage of Green Hydrogen as an alternative to natural gas in refineries and fertilizers. • (ii) Steps taken by the Company for utilizing alternate sources of energy: Usage of light pipes, transparent sheets and noorikool daylighting systems in shop floors for effective utilization of natural light for ventilation. Installation of programmable timer for Air Handling Unit (AHU) at dust free chamber. Installation of transparent sheets and turbo vents in Light Fabrication Shop in place of overhead lights and exhaust fans to provide sufficient illumination and ventilation. Adoption of Integrated Vehicle Management System has led to fuel saving. Digital tools used to track, trace and improve the working of systems and to achieve the Company's ESG goals of Carbon and Water Neutrality. Utilization of Chiller for Heating Ventilation and Air Conditioning (HVAC) System - Campus Facility Management Division (FMD) initiated and controlled the chiller running hours for HVAC during holidays and extended working hours. Power generation through Solar Roof top PV installation and utilization of solar lights for lighting around compound wall in factories. Replaced existing submersible pumps with hydropnuematic pumps. Development of Unmanned Surface Vessel 8 Development of multi-hierarchy command and control systems for integrated engagement across forces. Larsen & Toubro Infotech Limited Non-Executive Director L&T Finance Holdings Limited Non-Executive Director Mindtree Limited Non-Executive Director Mr. D. K. Sen 7 Mr. M. V. Satish 1 Mr. J. D. Patil 1 0 Mr. Subramanian Sarma Mr. S. V. Desai 3 Mr. T. Madhava Das 0 0 Mr. M. M. Chitale 5 4 2 Atul Limited 00 - 000 0 2 Nil 60 Mr. R. Shankar Raman 0 0 Larsen & Toubro Infotech Non-Executive Chairman Limited L&T Technology Services Non-Executive Chairman Limited Mindtree Limited Non-Executive Chairman Mr. S. N. Subrahmanyan 6 8 0 Larsen & Toubro Infotech Non-Executive Limited Vice-Chairman L&T Technology Services Limited Non-Executive Vice-Chairman Mindtree Limited Non-Executive Vice-Chairman L&T Finance Holdings Limited Non-Executive Chairman 0 1 0 0 Limited HT Media Limited Independent Director Apollo Tyres Limited Independent Director Mahindra & Mahindra Independent Director Limited Jubilant Foodworks Limited Independent Director Mr. Adil Zainulbhai 7 Independent Director 3 Reliance Industries Limited Network 18 Media & Chairman and Investment Limited Cipla Limited TV18 Broadcast Limited Chairman and Mr. Sanjeev Aga 4 3 2 Larsen & Toubro Infotech Limited 5 Colgate-Palmolive (India) 1 5 Nil Nil 0 Nil 0 Nil Nil Independent Director Macrotech Developers Independent Director Limited Bhageria Industries Limited Independent Director Mr. M. Damodaran 60 3 2 Interglobe Aviation Limited Chairman and Independent Director Hero Motocorp Limited Independent Director Biocon Limited Independent Director Mr. Vikram Singh Mehta וט 6 5 Mr. A. M. Naik Category of Directorship Names of other Listed entities where he holds Directorship ID Mr. Narayanan Kumar ID 8 Mr. Hemant Bhargava (Note 1) NED 8 Mrs. Preetha Reddy ID 8 Category No. of Board Meetings held during the year ID No. of Board Meetings AGM attended 8 8 ∞ ∞ ∞ ∞ ∞ ∞ ∞ ∞ ∞ ∞ ∞ ∞ ∞ ∞ ∞ ∞ 8 5 Yes 8 7 Yes 8 Attendance at last ID ID Mr. Sanjeev Aga The Company Secretary prepares the agenda and the explanatory notes, in consultation with the Group Chairman / Chief Executive Officer & Managing Director and circulates the same in advance to the Directors. Every Director is free to suggest inclusion of items on the agenda. The Board meets at least once every quarter, inter alia, to review the quarterly results. Additional meetings are held, whenever necessary. The meetings were conducted physically/through video conference during the year. Presentations are made on business operations to the Board by Independent Companies / Business Units. Senior management personnel are invited to provide additional inputs for the items being discussed by the Board of Directors as and when necessary. The respective Chairperson of the Board Committees apprise the Board Members of the important issues and discussions in the Committee Meetings. Minutes of Committee meetings are also circulated to the Board. The Minutes of the proceedings of the Meetings of the Board of Directors are noted and the draft minutes are circulated amongst the Members of the Board for their perusal. Comments, if any, received from the Directors are also incorporated in the Minutes, in consultation with the Chairman. The Minutes are approved and entered in the Minutes book within 30 days of the Board meeting. Thereafter, the Minutes are signed and dated by the Chairman of the Board at the next meeting. The following is the composition of the Board of Directors as on 31st March 2022. Their attendance at the Board Meetings during the year and at the last Annual General Meeting is as under: Name of Director Mr. A. M. Naik Mr. S. N. Subrahmanyan GC CEO & MD Mr. R. Shankar Raman ED Mr. D. K. Sen ED Mr. M. V. Satish ED Mr. J. D. Patil ED Mr. Subramanian Sarma ED Mr. S. V. Desai ED Mr. T. Madhava Das ED Mr. M. M. Chitale ID Mr. M. Damodaran Mr. Vikram Singh Mehta Mr. Adil Zainulbhai 8 Independent Director 8 8 8 Yes 8 Yes Group Chairman Meetings held during the year are expressed as number of meetings eligible to attend. Note 1: Representing equity interest of Life Insurance Corporation of India. GC ED - Executive Director CEO & MD - Chief Executive Officer & Managing Director NED Non-Executive Director - ID Independent Director 1. None of the above Directors are related inter-se. Yes 2. Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial Reports Statements LARSEN & TOUBRO Name of Director No. of Committee Membership As on 31st March 2022, the number of other directorships and the number of positions held as Member/Chairperson of Committees of the Board of Directors along with the names of the listed entities (whose equity shares are listed) wherein the Director holds directorships are as follows: No. of other company Directorships No. of Committee Chairmanship None of the Directors hold the office of Director in more than the permissible number of companies under the Companies Act, 2013 or Regulation 17A of the SEBI LODR Regulations. 8 Yes 8 8 8 8 8 8 8 ∞ ∞ ∞ ∞ ∞ ∞ ∞ ∞ ∞ ∞ ∞ ∞ ∞ ∞ Yes Yes 8 Yes 8 Yes 8 Yes 8 Yes 8 Yes 7 Yes 8 Yes 8 Yes 8 Yes 8 Independent Director Independent Director Independent Director Independent Director UFO Moviez India Limited X ✓ X √ ✗ √ X √ ✓ X ✓ ✗ X 297 Sr. Name of the Director Leadership No Skill Attribute Annexure to the Board Report Experience and Industry knowledge and experience Exposure in policy shaping and industry advocacy Governance including legal compliance Integrated Annual Report 2021-22 ✓ ✓ ✗ 10. Mr. M. M. Chitale X 11. Mr. Subodh Bhargava* X 12. Mr. M. Damodaran X Experience and Exposure in policy shaping and industry advocacy ✓ Governance including legal compliance Expertise/ Experience in Finance and Global Experience/ International Exposure Accounts/ Audit /Risk Management areas ✓ X ✓ ✓ X ✗ ง X Expertise/ Experience in Finance and Mr. T. Madhava Das Accounts/ Audit /Risk Management Global X * ceased to be a director w.e.f. 29th March 2022. Note: Absence of any skill does not necessarily mean that the Director does not possess that skill. F. BOARD COMMITTEES The Board currently has 5 Committees: 1) Audit Committee, 2) Nomination and Remuneration Committee, 3) Stakeholders' Relationship Committee, 4) Corporate Social Responsibility Committee and 5) Board Risk Management Committee. The terms of reference of the Board Committees are in compliance with the provisions of the Companies Act, 2013, SEBI LODR Regulations and are also reviewed by the Board from time to time. The Board is responsible for constituting, assigning and co-opting the members of the Committees. The meetings of each Board Committee are convened by the Company Secretary in consultation with the respective Committee Chairperson. The role and composition of these Committees including the number of meetings held during the financial year and the related attendance are provided in the subsequent paragraphs. 1) Audit Committee The Company constituted the Audit Committee in 1986, well before it was made mandatory by law. i) Terms of reference: The role of the Audit Committee includes the following: Oversight of the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible. Recommending to the Board, the appointment, re-appointment, terms of appointment and, if required, the replacement or removal of the statutory auditor and the fixation of audit fees. 18. Mrs. Preetha Reddy Approval of payment to statutory auditors for any other services rendered by the statutory auditors. concern. Reviewing, with the management, the annual financial statements and the audit report before submission to the Board for approval, with particular reference to: 1. Matters required to be included in the Directors' Responsibility Statement to be included in the Board's report in terms of sub- section (5) of Section 134 of the Companies Act, 2013 2. Changes, if any, in accounting policies and practices and reasons for the same 3. Major accounting entries involving estimates based on the exercise of judgment by management 4. Significant adjustments made in the financial statements arising out of audit findings 5. Compliance with listing and other legal requirements relating to financial statements 6. Disclosure of any related party transactions 298 Discussion with statutory auditors, before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of Mr. Hemant Bhargava 17. Mr. Narayanan Kumar Experience/ International Exposure ✓ ✓ X ✓ X ✓ ✓ ✗ ✓ X ✓ X ✓ X ✓ ✗ ✗ ✓ 13. Mr. Vikram Singh Mehta 14. Mr. Adil Zainulbhai 15. Mr. Sanjeev Aga 16. areas The Independent Directors met on 8th May 2021, 22nd May 2021 and 20th March 2022 to discuss, inter alia, the performance evaluation of the Board as a whole and assess the quality, quantity and timeliness of flow of information between the management and the Board of Directors that is necessary for the Board to effectively and reasonably perform their duties. 9. 8. 3 0 Indus Towers Limited The Tata Power Company Limited UGRO Capital Limited ITC Limited Independent Director Independent Director Mrs. Preetha Reddy 9 2 0 Apollo Hospitals Enterprise Limited Whole-time Director 3 Other Company Directorships includes directorships in all public limited companies and excludes private limited companies, foreign companies and Section 8 companies. The Board of Directors are provided information relating to the Company, which inter alia includes - Annual revenue budgets and capital expenditure plans • Quarterly results and results of operations of ICs and business segments Financing plans of the Company Minutes of meetings of Board of Directors, Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Board Risk Management Committee and Corporate Social Responsibility Committee Details of any joint venture, acquisitions of companies or collaboration agreement or sale of investments, subsidiaries, assets and quarterly report on fatal or serious accidents or dangerous occurrences Any materially relevant default, if any, in financial obligations to and by the Company or substantial non-payment for goods sold or services rendered, if any Any issue, which involves possible public or product liability claims of substantial nature, including any Judgment or Order, if any, which may have strictures on the conduct of the Company Developments in respect of human resources/industrial relations Compliance or Non-compliance of any regulatory, statutory nature or listing requirements and investor service such as non-payment of dividend, delay in share transfer, etc., if any d. Post-meeting internal communication system: The details of positions held as Member/Chairperson of Committees are disclosed as per Regulation 26 of the SEBI LODR Regulations which includes only Stakeholders' Relationship Committee and Audit Committee. Information to the Board: Mr. Hemant Bhargava Independent Director Nominee Director Independent Director Chairman and Independent Director Independent Director Chairman and Independent Director Pidilite Industries Limited Mahindra Holidays & Resorts India Limited Independent Director Independent Director 295 Integrated Annual Report 2021-22 296 C. No. of other Name of Director company Directorships No. of Committee Membership No. of Committee Chairmanship Mr. Narayanan Kumar 7 3 4 L&T Technology Services Limited Annexure to the Board Report Names of other Listed entities where he holds Directorship Mphasis Limited Take Solutions Limited Entertainment Network (India) Limited Category of Directorship Independent Director The important decisions taken at the Board / Committee meetings are communicated to the concerned departments / ICs promptly. An Action Taken Report is regularly presented to the Board. Mr. S. V. Desai Corporate Overview Discussion and Analysis Ability to understand financial policies, accounting statements and disclosure practices and contribute to the financial/ risk management policies/ practices of the Company across its business lines and geography of operations. 6 Global Experience / International Exposure Ability to have access and understand business models of global corporations, relate to the developments with respect to leading global corporations and assist the Company to adapt to the local environment, understand the geo political dynamics and its relations to the Company's strategies and business prospects and have a network of contacts in global corporations and industry worldwide. The mapping of the Skill Matrix for FY 2022 for all Directors is as follows: Skill Attribute Sr. Name of the Director Leadership Industry knowledge and No experience Commitment, belief and experience in setting Corporate Governance practices to support the Company's robust legal compliance systems and governance policies/practices. 1. 2. for ISR, ASW and MCM operations, close-in weapon system, fire control radar for air defence application. 3. Mr. R. Shankar Raman 4. Mr. D. K. Sen 5. Mr. M. V. Satish 6. Mr. J. D. Patil 7. Mr. Subramanian Sarma Mr. A. M. Naik Should possess ability to develop professional relationship with the Policy makers and Regulators for contributing to the shaping of Government policies in the areas of Company business. Should possess domain knowledge in businesses in which the Company participates viz. Infrastructure, Power, Heavy Engineering, Defence Engineering, Hydrocarbon, Financial Services, Information Technology and Technology Services. Must have the ability to leverage the developments in the areas of engineering and technology and other areas as appropriate for betterment of Company's business. Ability to envision the future and prescribe a strategic goal for the Company, help the Company to identify possible road maps, inspire and motivate the strategy, approach, processes and other such key deliverables and mentor the leadership team to channelize its energy/efforts in appropriate direction. Be a thought leader for the Company and be a role model in good governance and ethical conduct of business, while encouraging the organization to maximize shareholder value. Should have had hands on experience of leading an entity at the highest level of management practices. Integrated Report Statutory Financial Reports Statements e. Board Skill Matrix: LARSEN & TOUBRO The matrix setting out the skills/expertise/competence of the Board of Directors, as identified by the Board of Directors in the context of the Company's businesses, is given below: Expertise/Attribute Experience/ Sr. No 1 Leadership 2 3 4 5 Industry knowledge and experience Experience and Exposure in policy shaping and industry advocacy Governance including legal compliance Expertise/Experience in Finance and Accounts / Audit / Risk Management areas Comments Management Annexure to the Board Report Mr. S. N. Subrahmanyan Integrated Annual Report 2021-22 crore (iv) Expenditure incurred on Research and Development: Straddle carrier 2021-22 Fully absorbed f) Methodology Construction 2021-22 Fully absorbed Full Span e) (PoE) based devices Fully absorbed Power over Ethernet 2020-21 d) Design Capital Recurring Direct Current (DC) 2019-20 Fully absorbed Traction System c) 2021-22 4.26 87.99 Total R&D expenditure as a percentage of total turnover A. CORPORATE GOVERNANCE Annexure 'B' to the Board Report Annexure to the Board Report Integrated Annual Report 2021-22 291 Total 10,383.99 Foreign Exchange used System 11,806.60 85.47 Foreign Exchange saved / deemed exports 11,721.13 Foreign Exchange earned 2021-22 crore [C] FOREIGN EXCHANGE EARNINGS AND OUTGO: 0.08% Total B. 2019-20 Fully absorbed b) • Digital library module has helped reduce lead time during Request for Proposal/bid submission. 294 Robotic Process Automation has helped increase manpower productivity and reduction in man hours spent across various business activities. plant equipment through analysis of degradation mechanisms such as, Methanol Stress Corrosion Cracking, Hydrogen Embrittlement, Chloride Stress Corrosion Cracking, Sulphuric Acid Corrosion and Microbial Corrosion attack. Advanced troubleshooting of critical process Establishment of in-house capability for specialized engineering analysis, such as modeling and process simulation, Computational Fluid Dynamics (CFD), transient thermal analysis, Radiation and dispersion analysis and advanced stress analysis by Finite Element Method (FEM) for achieving self-sufficiency. Implemented suitable preservation/corrosion protection techniques to achieve successful longer life and adequate performance. • LARSEN & TOUBRO Statutory Financial Reports Statements Report Discussion and Analysis Integrated Management Corporate Overview Optimum selection, verification and characterization of materials for critical applications. (ii) Benefits derived like product improvement, cost reduction, product development or import substitution: • . • . 2019-20 Fully absorbed Verse Equipment a) Year of Import No. Imported Technology S. Status of absorption and reasons for non- absorption, if any Electrical Storage (iii) Information regarding technology imported during the last 3 years: Quick clamping of assemblies led to clamping time reduction. minimize design errors and enhancing the ergonomics of design. Deployment of portable VR facility has helped helped setup in-house quality check to establish soundness of paint coating system without depending on any external agency. Deployment of pull off adhesive tester has Stud wielding application has helped achieve higher productivity for block alignment and erection joints, electrical earthing points, cable trays and foundation bolts. It has also helped reduce overall wielding time and reduce heat input to avoid damage to internal structures and equipment. helped secure documents and provide data centric security across various stages of document life cycle. Information Right Management solution has Cost saving by eliminating use of welded attachments and non-value added activities like grinding, touchup, etc. Corporate Governance is a set of principles, processes and systems which govern a company. The elements of Corporate Governance are independence, transparency, accountability, responsibility, compliance, ethics, values and trust. 83.73 The Company believes that sound Corporate Governance is critical for enhancing and retaining stakeholder trust and always seeks to ensure that its performance goals are met accordingly. The Company has established systems and procedures to ensure that its Board of Directors is well informed and well equipped to fulfill its overall responsibilities and to provide management with the strategic direction needed to create long term shareholders value. The Company had adopted many ethical and transparent governance practices even before they were mandated by law. The Company has always worked towards building trust with shareholders, employees, customers, suppliers and other stakeholders based on the principles of good Corporate Governance. • Approval of common policies iv. Digitalization and Analytics initiatives iii. HR Update/ Talent Management / Service contract extensions for senior management personnel / Leadership development and succession planning IC synergies ii. i. International business expansion • Review and discuss strategic issues which impact the entire organization, viz., Review of Monthly / Quarterly/Yearly financial performance Review of consolidated financials including working capital, cash flow, capital structure, etc. LARSEN & TOUBRO Statements Statutory Financial Reports Report Discussion and Analysis Integrated • Review of Revenue, Capital & Manpower Budget and performance thereagainst Management Strategic plans and business portfolio reviews d. 293 The Meetings of the Board are generally held at the Registered Office of the Company at L&T House, Ballard Estate, Mumbai 400 001 and whenever necessary, in locations, where the Company operates. However, in view of the COVID 19 pandemic and the restrictions on movement imposed by the government authorities, during the initial part of FY 2022, Board Meetings were held through video conferencing. The Meetings of the Board have been held at regular intervals with a time gap of not more than 120 days between two consecutive Meetings. During the year under review, 8 meetings were held on 14th May 2021, 26th July 2021, 7th September 2021, 27th October 2021, 28th January 2022, 22nd March 2022, 23rd March 2022 and 24th March 2022. b. Meetings of the Board: The Company's policy is to have an appropriate mix of Executive, Non-Executive and Independent Directors. As on 31st March 2022, the Board comprised the Group Chairman, the Chief Executive Officer & Managing Director, 7 Executive Directors, 1 Non-Executive Director (representing a financial institution) and 7 Independent Directors, including one Independent Woman Director. The composition of the Board, as on 31st March 2022, is in conformity with the provisions of the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('SEBI LODR Regulations'). Composition of the Board: a. BOARD OF DIRECTORS As a part of Lakshya 2016, the Company had decided to have Hybrid Holdco Structure. Accordingly, a number of 'Independent Companies' (ICs) were created, each with their own quasi-board comprising 2 to 3 Independent Members akin to Independent Directors. During the process of evolving Lakshya 2026, the structure was reviewed and it was decided to continue with the IC structure. Corporate Governance enables an organization to perform efficiently and ethically, generate long term wealth and create value for all its stakeholders. g. Independent Company Board (IC Board): Non-Executive Directors (NED)/ Independent Directors: The Executive Directors, as members of the Board, along with the Senior Management Personnel in the Executive Committee, contribute to the strategic management of the Company's businesses within Board approved direction and framework. They assume overall responsibility for strategic management of business and corporate functions including its governance processes and top management effectiveness. Executive Directors (ED) / Senior Management Personnel: The CEO & MD is fully accountable to the Board for the Company's business development, operational excellence, business results, leadership development and other related responsibilities. The Chief Executive Officer and Managing Director (CEO & MD): Sharing of best practices, etc. f. e. The Non-Executive Directors / Independent Directors play a critical role in enhancing balance to the Board processes with their independent judgment on issues of strategy, performance, resources, standards of conduct, safety, etc., besides providing the Board with valuable inputs. Corporate Overview E. Review of major order prospects (Standalone/ Group) / "Integrated offerings" 292 COMPANY'S CORPORATE GOVERNANCE PHILOSOPHY The Company's essential character revolves around values based on transparency, integrity, professionalism and accountability. At the highest level, the Company continuously endeavors to improve upon these aspects on an ongoing basis and adopts innovative approaches for leveraging resources, converting opportunities into achievements through proper empowerment and motivation, fostering a healthy growth and development of human resources to take the Company forward. The Company has four tiers of Corporate Governance structure, viz.: (i) Strategic Supervision - by the Board of Directors comprising the Executive, Non-Executive and Independent Directors. (ii) Executive Management – by the Executive Committee (ECom) comprising of the Chief Executive Officer and Managing Director, all Executive Directors and a few senior leaders. (iii) Strategy and Operational Management – by the Independent Company Boards of each Independent Company (IC) (not legal entities) comprising of representatives from the Company's Board, Senior Executives from the IC and independent members. (iv) Operational Management - by the Business Unit (BU) Heads. C. THE GOVERNANCE STRUCTURE D. ROLES OF VARIOUS CONSTITUENTS OF CORPORATE GOVERNANCE IN THE COMPANY a. Board of Directors (the Board): The Directors of the Company are in a fiduciary position, empowered to oversee the management functions with a view to ensuring its effectiveness and enhancement of shareholder value. The Board also provides strategic direction, reviews and approves management's business objectives, plans and oversees risk management. b. The Group Chairman (GC): C. The GC is the Chairman of the Board. His primary role is to provide leadership to the Board and guidance and mentorship to the CEO & MD and Executive Directors for realizing the approved strategic plan and business objectives. He presides over the Board and the Shareholders' meetings. Executive Committee (ECom): The four-tier governance structure, besides ensuring greater management accountability and credibility, facilitates increased autonomy to the businesses, performance discipline and development of business leaders, leading to increased public confidence. The ECom provides a companywide operations review and plays a key role in strengthening linkages between the ICs and the Company's Board, as well as in rapidly realizing inter-IC synergies. In addition, the ECom deliberates upon strategic and tactical issues that cut across ICs and Corporate. The agenda includes: Benefits Sitting Fees for Board Committee Commission Others+ Total ESOP ESOP* Meeting 0.63 Mr. S. N. 2.78 29.93 6.53 Names 21.40 61.27 Meeting Sitting Fees for The details of remuneration paid / payable to the Non-Executive Directors for FY 2022 is as follows: related to LARSEN & TOUBRO vii) Details of remuneration paid / payable to Directors for the year ended 31st March 2022: (a) Executive Directors: The details of remuneration paid / payable to the Executive Directors for FY 2022 is as follows: on exercise of these options is considered as a part of the remuneration of these Directors. Commission Total (b) Non-Executive Directors: crore crore Perquisites Perquisites Retirement Names Salary other than Mr. A. M. Naik 0.05 1.95 3.25 3.00 6.32 1.47 Statements Mr. M. V. Satish 0.65 0.52 0.05 0.08 Mr. M. Damodaran Bhargava* 7.62 11.83 2.46 0.28 1.47 Mr. D. K. Sen 0.66 0.55 0.03 Subrahmanyan Mr. M. M. Chitale 0.07 0.06 0.54 0.67 0.02 Mr. R. Shankar 7.98 4.30 13.98 28.62 Raman Mr. Subodh 0.08 0.41 Statutory Financial Reports While evaluating the suitability of a Director for re-appointment, besides the above criteria, the NRC considers Board evaluation results, attendance and participation in and contribution to the activities of the Board by the Director. Discussion and Analysis 9 Member Mr. Sanjeev Aga 9 9 Member Mr. M. Damodaran 9 9 Chairman Mr. M. M. Chitale the year Attended No. of Meetings No. of meetings held during 9 Mr. Vikram Singh Mehta* Member Meetings held during the year are expressed as number of meetings eligible to attend. Formulate criteria for determining qualifications, positive attributes and independence of a Director; Recommend to the Board appointment and removal of such persons; accordance with the criteria laid down by the Committee; appointed in senior management in Identify persons who are qualified to become Directors and who may be i) Terms of reference: The Nomination and Remuneration Committee was constituted in 1999 even before it was mandated by law. Status 2) Nomination and Remuneration Committee (NRC) a project-oriented Company, CAS emphasizes a risk-based focus areas in project audits. It encourages its team members to obtain globally renowned CISA, CIA and CFE Certification, etc., which will add strength to the Department. Every year, CAS reviews the Audit Universe which is an exhaustive list of businesses, functions, activities and locations across the Company. The yearly plan, then details out the scope and coverage of audits proposed for the year and it is ensured that, on an average, all operations in the Audit Universe gets into an audit coverage, at least once in 2 years. The CAS team has its offices at Mumbai and Chennai and all overseas audits are shared between these two teams. From time to time, the Company's systems of internal controls covering financial, operational, compliance, IT applications, etc. are also reviewed by external experts. Presentations are made to the Audit Committee, on the findings of such reviews. The CAS team while drawing out their Audit Plan for the year, also plans for some theme-based audits (Revenue recognition, HR, Treasury, Insurance etc.) which is incorporated in the overall audit programme and also performs certain joint audits with other corporate departments for specific functions. The Company being predominantly The Company has an internal corporate audit team consisting of Chartered Accountants, Certified Internal Auditors and Engineers from various disciplines. Over a period, the Corporate Audit Services ("CAS") department has acquired in-depth knowledge about the Company, its businesses, its systems and procedures, the knowledge of which is now institutionalized. The Company's Internal Audit function is ISO 9001:2015 certified. The Head of CAS reports to the Audit Committee. The staff of CAS are rotated periodically to have a holistic view of the entire operations and share the findings and good practices. iv) Internal Audit: The Chief Executive Officer & Managing Director, Whole-time Director & Chief Financial Officer and Head - Corporate Audit Services are permanent invitees to the Meetings of the Audit Committee. The Company Secretary is the Secretary to the Committee. Majority of the members of the Audit Committee are financially literate and have accounting or related financial management expertise. * Inducted as a member of the Committee with effect from 24th March 2022 The CAS team of the Company also covers the internal audit of all ICs and Subsidiary Companies. An in-depth audit is conducted by the team and the major deviations are highlighted and discussed with the concerned IC and/or subsidiary company Boards and significant observations are placed before the Audit Committee of the Company once in every Quarter. Some subsidiaries have engaged external firms for conducting internal audit. Devise a policy on Board diversity; Name Annexure to the Board Report Discussion with internal auditors about any significant findings and follow up there on. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit. Reviewing, with the management, performance of statutory and internal auditors, and adequacy of the internal control systems. Reviewing, with the management, the quarterly financial statements before submission to the Board for approval. Reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document/prospectus/notice and the report submitted by the agency monitoring the utilisation of proceeds of public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter, if any. report. 7. Qualifications in the draft audit LARSEN & TOUBRO Discussion and Analysis Report Statements Reports Financial Statutory Integrated Management Corporate Overview Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors. To review the functioning of the Whistle Blower mechanism. Approval of appointment of CFO (i.e., the whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience and background, etc. of the candidate. 300 Integrated Annual Report 2021-22 299 During the year ended 31st March 2022, 9 meetings of the Audit Committee were held on 21st April 2021, 13th May 2021, 12th July 2021, 24th July 2021, 26th August 2021, 26th October 2021, 23rd November 2021, 27th January 2022 and 1st March 2022. iii) Meetings: As on 31st March 2022, the Audit Committee comprised four Independent Directors. ii) Composition: The attendance of Members at the Meetings was as follows: Carrying out any other function as is mentioned in the terms of reference of the Audit Committee. Valuation of undertakings or assets of the Company, wherever it is necessary. Evaluation of internal financial controls and risk management systems. Reviewing the utilization of loans and/or advances to/investment in the subsidiary companies exceeding rupees 100 crore or 10% of the asset size of the subsidiary, whichever is lower including existing loans advances / investments. Approval or any subsequent material modification of transactions of the Company with related parties. of operations. Review the management discussion and analysis of financial condition and results Review and monitor the auditor's independence and performance, and effectiveness of audit process. The recommendation for appointment, remuneration and terms of appointment of cost auditors of the Company. Monitoring the end use of funds raised through public offers and related matters. Corporate Overview Management Integrated The Company pays remuneration to Executive Directors by way of salary, perquisites and retirement benefits (fixed components) and commission (variable component), based on The remuneration of the Board members is based on the Company's size and global presence, its economic and financial position, industrial trends, compensation paid by the peer companies, etc. Compensation reflects each Board member's performance and accountability. The level of compensation to Executive Directors is competitive and matches industry standards. v) Remuneration Policy: Compliance.aspx on the website of the Company https://investors.larsentoubro.com/Listing- These certificates have been placed The Board has taken on record the declaration and confirmation submitted by the Independent Directors and after assessing the veracity of the same, the Board is of the opinion that the Independent Directors fulfill the conditions specified in the SEBI LODR Regulations and are independent of the management. Each Independent Director gives a certificate confirming that they meet the "independence criteria" as mentioned in Section 149(6) of the Companies Act, 2013 and SEBI LODR Regulations. The Independent Directors satisfy and fulfill the criteria of independence as provided under Section 149(6) of the Companies Act, 2013 and all the applicable provisions of the SEBI LODR Regulations. 0.37 wisdom, ability to read and understand financial statements, commitment to ethical standards and values of the Company. While appointing/re-appointing any Independent Director/Non-Executive Director on the Board, the NRC considers the criteria as laid down in the Companies Act, 2013 and the SEBI LODR Regulations. While screening, selecting and recommending to the Board new members, the Committee ensures that the Board is objective, there is no conflict of interest, availability of diverse perspectives, business experience, legal, financial and other expertise, integrity, leadership and managerial qualities, practical iv) Board Membership Criteria: #Ceased to be Member and Chairman of the Committee with effect from 29th March 2022. *Appointed as Chairman of the Committee with effect from 30th March 2022. 301 Integrated Annual Report 2021-22 302 Annexure to the Board Report Integrated Management Corporate Overview The organisation also conducts its Core Development programs with tie-ups with reputed Indian B-Schools like Narsee Monjee, NITIE, XLRI, IIM-Bangalore and Kolkata to provide inputs to its leaders and in the process build a strong pipeline at every level. Multiple instances of these programs were conducted in FY 2022 in the virtual mode. The organisation also provides managerial inputs to high potential employees through its famed 7-Steps leadership development program which culminates with mentoring by the Group Chairman and the CEO & MD. The 7-Steps leadership program is done in association with global premier B-Schools. In FY 2022, the step 1 in association with IIM Ahmedabad and step 3 in association with Michigan Ross were conducted using a virtual medium and suitable pedagogy associated with it. vi) Training and Succession Planning: The organisation has a robust process of building its talent pipeline which helps to feed in succession planning. The process starts with the Development Centre (DC) where high performing employees get assessed on defined competencies at four different levels in the organisation. The process identifies competency gaps which are developed with specific Individual Development Plans (IDP's) and competency programs organised for these levels. This helps the organisation to have a pool of leaders at every level who are "Competency Ready". The DC process and the subsequent development programs were conducted in virtual mode in FY 2022. Members are also requested to refer to page 284 of the Board Report. Meetings held during the year are expressed as number of meetings eligible to attend. participation, assessment of their independence, etc. It also contains specific criteria for evaluating the Chairman, CEO & MD and individual Directors. An external consultant is engaged to receive the responses of the Directors and consolidate/ analyze the responses. This is done through a software platform of the external consultant. The Chairman of the Company discusses the performance evaluation results with the Chairman of the NRC and interacts with all the Non-Executive Directors and Independent Directors. The NRC Chairman interacts with the Executive Directors. Performance Evaluation Criteria for Independent Directors: Compliance.aspx As required by the provisions of Regulation 46 of the SEBI LODR Regulations, the criteria for payment to Independent Directors / Non-Executive Directors is made available on the investor page of our corporate website https://investors.larsentoubro.com/Listing- In the case of nominees of Financial Institutions, the commission is paid to the Financial Institutions. The commission to the Independent Directors / Non-Executive Directors is distributed broadly on the basis of their attendance, contribution at the Board, the Committee meetings, Chairmanship of Committees and participation in IC meetings. The Independent Directors / Non-Executive Directors are paid remuneration by way of commission and sitting fees. The Company paid sitting fees of 1,00,000/- per meeting of the Board and ₹50,000/- for Audit Committee, Nomination and Remuneration Committee and Board Risk Management Committee meetings and 35,000/- for Stakeholders Relationship Committee and Corporate Social Responsibility Committee meetings, during the year, to the Independent Directors / Non-Executive Directors. The commission is paid in accordance with the provisions of section 197 of the Companies Act, 2013. recommendation of the NRC, approval of the Board and the shareholders. The commission payable is based on the overall performance of the Company, performance of the business / function as well as qualitative factors. The commission is calculated with reference to net profits of the Company in the financial year subject to overall ceilings stipulated under Section 197 of the Companies Act, 2013. The performance evaluation questionnaire covers qualitative/ subjective criteria with respect to the structure, culture, Board processes and selection, effectiveness of the Board and Committees, strategic decision making, functioning of the Board and Committees, Committee composition, information availability, remuneration framework, succession planning, adequate Kumar 5 5 iii) Meetings: As at 31st March 2022, the Committee comprised 2 Independent Directors and the Group Chairman. Administration of Employee Stock Option Scheme (ESOS). relating to remuneration for the Directors, Key Managerial Personnel (KMP) and senior management; Recommend to the Board a policy, Carry out evaluation of the Board and Directors; of Directors, Board and the Board Committees; During the year ended 31st March 2022, 5 meetings of the Nomination and Remuneration Committee were held on 14th May 2021, 26th July 2021, 27th October 2021, 28th January 2022 and 22nd March 2022. Formulation of criteria for evaluation LARSEN & TOUBRO Statements Reports Report Discussion and Analysis Financial Statutory • Report The attendance of Members at the Meetings was as follows: Status Member Mr. Narayanan 4 5 Member Mr. A. M. Naik Bhargava# Name Mr. Subodh 5 5 Chairman 5 5 the year No. of meetings No. of held Meetings during Attended Mr. Adil Zainulbhai* Chairman 2.30 ii) Composition: Mr. J. D. Patil 305 meetings eligible to attend. In view of the sustained impact of the second wave of the COVID -19 pandemic on the health infrastructure, education and livelihoods and the acute shortage of oxygen across the country, the Company responded by supplementing the health care system by providing oxygen concentrators, ventilators and portable X-ray units besides manufacturing PSA oxygen concentration Skill development: Enhancing employability of youth (enhancing training capacity, improved infrastructure of skill development centres). Health: Improvement in access to quality health care (expanding infrastructure of health centres, increased number of people availing quality health care) Education: To improve access to education (increased enrollment in pre- school, children attending neighborhood schools), improving quality of learning (better school infrastructure, better teaching-learning process) and learning STEM (Science Technology Engineering and Math) subjects with fun and hands on experiments Water and Sanitation: For the availability of safe drinking water and proper sanitation facilities The Company is leveraging its countrywide presence to reduce disparities through interventions in water and sanitation, healthcare, education and skill building. Close interactions with the local community members have enabled the Company to identify and address their most pressing needs and the social interventions for community development have been specifically aligned. The Company has launched programs towards holistic development in the following areas based on need assessment: iv) CSR Activities and Impact Assessment: The Company, through its CSR Committee, is committed to improve the social infrastructure / fabric of the Country. The Company's CSR programmes are well- entrenched, focusing on areas that align with the global and national matrices of development: water and sanitation, health, education and skill-building. Meetings held during the year are expressed as number of 3 3 Member Mr. D. K. Sen Raman Integrated Annual Report 2021-22 306 Annexure to the Board Report plants and providing them to hospitals across the Country. held No. of meetings Status Name The attendance of Members at the Meetings was as follows- During the year ended 31st March 2022, 2 meetings of the Board Risk Management Committee were held on 9th June 2021 and 3rd December 2021. iii) Meetings: 3 As on 31st March 2022, the Board Risk Management Committee comprised 2 Independent Directors and 1 Executive Director. Evaluate risks related to cyber security. The Company also has an Apex Risk Management Committee, comprising Executive Directors, which reviews the operational risks including client quality, manpower availability, logistic and other aspects which impact the Company and the Group. Review of the existing Risk Management Policy, framework and processes, Risk Management Structure and Risk Mitigation Systems. Broadly, the key risks will cover strategic risks of the Group at the domestic and international level including sectoral developments, risk related to market, financial, geographical, political and reputational issues, Environment, Social and Governance (ESG) risks, etc. The terms of reference of the Board Risk Management Committee are as follows: i) 5) Board Risk Management Committee: Terms of reference: The detailed disclosures of CSR spending during the year has been given in Annexure 'C' forming part of this Board Report. Please refer to pages 323 to 352 of this Annual Report. All CSR projects have defined goals and milestones which are tracked as per the periodicity defined for the project. The progress is compared with the baseline data that is gathered before the commencement of the project. This is carried out through an onsite evaluation as well as the reports generated from the project. The indirect impact that accrue are also factored and documented in the monthly reporting process. These are subsequently vetted / measured during the external Social Audit or Impact Assessment. The Social Audit/Impact Assessment report is discussed during the CSR Committee meetings and it forms a part of Annexure C to this Board Report. ii) Composition: No. of Meetings 3 3 ii. i. B. Sustainability: Identify and recommend to the Board the CSR projects that will qualify to be ongoing projects V. iv. Monitor the implementation of the CSR Action Plan of the Company from time to time; and iii. Recommend the CSR annual budget to the Board for approval Plan development of annual CSR Action ii. Provide guidance for the the Board a Corporate Social Responsibility Policy and suggest any changes thereto Formulate and recommend to i. A. Corporate Social Responsibility: The terms of reference of the Committee are as follows: Formulate and recommend to the Board a Sustainability Policy and suggest any changes thereto Provide guidance for the development of the long-term Sustainability Plan; and iii. Monitor the implementation of the Sustainability Plan of the Company from time to time ii) Composition: Chairman Member Mr. R. Shankar Mr. M. M. Chitale the year held Status during Attended 3 Meetings Name The Members at the Committee are as follows- 3 meetings of the CSR Committee were held on 27th April 2021, 27th September 2021 and 10th March 2022. During the year ended 31st March 2022, iii) Meetings: 2 Executive Directors. As on 31st March 2022, the CSR Committee comprised 1 Independent Director and No. of meetings No. of during the Attended year Mr. Adil Zainulbhai Mr. Sanjeev Aga Year Financial The last three Annual General Meetings of the Company were held as under: e) General Body Meetings: Date: 12th May 2022 Place: Mumbai Chief Executive Officer & Managing Director S. N. Subrahmanyan I hereby declare that all the Board Members and senior management personnel have affirmed compliance with the Code of Conduct as adopted by the Board of Directors and senior management personnel. To the Shareholders of Larsen & Toubro Limited Sub: Compliance with Code of Conduct is available on the website of the Company www.larsentourbo.com. The declaration of the Chief Executive Officer & Managing Director is given below: d) Code of Conduct: Also refer to page 287 of the Board Report. crore. For FY 2022, the total fees paid by the Company and its subsidiaries, on a consolidated basis, to Deloitte Haskins & Sells LLP, Statutory Auditor and all entities in the network firm/network entity of which the statutory auditors are a part thereof, for all the services provided by them is 11.13 Deloitte Haskins & Sells LLP ("DHS LLP" or "Firm") is registered with the Institute of Chartered Accountants of India (Registration No. 117366W/W-100018). The Firm has around 2,500 professionals and staff. DHS LLP has offices in Mumbai, Delhi, Kolkata, Chennai, Bangalore, Ahmedabad, Hyderabad, Coimbatore, Kochi, Pune, Jamshedpur and Goa. The registered office of the Firm is One International Center, Tower 3, 32nd Floor, Senapati Bapat Marg, Elphinstone Road (West), Mumbai - 400013, Maharashtra, India. Date 2020-2021 5th August 2021 Venue 2019-2020 13th August 2020 7.05 11.19 To approve raising of capital through QIP's by issue of shares / convertible debentures / securities upto an amount of USD 600 million or 4,500 crore. To re-appoint Mr. Narayanan Kumar as an Independent Director of the Company for a five-year term upto 26th May 2026. To re-appoint Mr. Sanjeev Aga as an Independent Director of the Company for a five-year term upto 24th May 2026. • Annual General Meeting held on 5th August 2021: The following Special Resolutions were passed by the members during the past 3 Annual General Meetings: In the case of appointment of new auditors, a Committee, comprising of the Chairman of the Audit Committee, the CFO and the Company Secretary, evaluates various audit firms based on approved criteria as given herein below. The audit firms shortlisted, are required to make a presentation to this Committee. The Committee considers factors such as compliance with the legal provisions, number / nature / size and variation in client base, skill sets available in the firm both at partner level and staff level, international experience, systems and processes followed by the firm, training and development by the firm to its partners and staff, etc. during the process of evaluation. Based on merit and the factors mentioned above, the Committee finalizes the firm to be appointed and recommends the same to the Audit Committee. The Audit Committee reviews the same before recommending to the Board and shareholders for approval. 3:00 p.m. 1st August 2019 2018-2019 3:30 p.m. 3:30 p.m. Time Meeting was held through Video Conferencing/ Meeting was held through Video Conferencing/ Other Audio- Visual Means Other Audio- Visual Means Birla Matushri Sabhagar Also refer to page 287 of the Board Report. c) Statutory Auditors: about-lt-group/corporate-policies/. website https://larsentoubro.com/corporate/ Integrated Discussion and Analysis Report Management Corporate Overview Independent Directors have the freedom to interact with the Company's Management. Interactions happen during Board / Committee Presentations are made regularly to the Board / NRC / Audit Committee (AC) (minutes of AC, NRC, SRC, RMC and CSR Committee are circulated to the Board), where Directors get an opportunity to interact with senior managers. Presentations, inter alia, cover business strategies, management structure, HR policy, management development and succession planning, quarterly and annual results, budgets, treasury policy, review of internal audit, risk management framework, operations of subsidiaries and associates, etc. The internal newsletters of the Company, the press releases, etc. are circulated to all the Directors so that they are updated about the operations of the Company. a) Directors' Familiarization Program: The Directors of the Company are updated on changes/developments in the domestic/ global markets and industry scenario through presentations made at Board, Committee, IC meetings and interactions with senior company personnel. The Directors are also updated about changes in statutes/legislations and economic environment, and on matters significantly affecting the Company, to enable them to take well informed and timely decisions. Statutory Financial Reports 2 2 2 Members are also requested to refer to page 282 of the Board Report. Meetings held during the year are expressed as number of meetings eligible to attend. Mr. Subramanian Sarma 2 2 2 Chairman Member Member G. OTHER INFORMATION LARSEN & TOUBRO Statements meetings, when senior company personnel are asked to make presentations about performance of their Independent Company (IC) / Business Unit to the Board. Annexure to the Board Report 308 Integrated Annual Report 2021-22 307 The Company also has a separate Whistle Blower Policy for its vendors and channel partners. This policy provides all stakeholders an opportunity to report genuine concerns about unethical behaviour, improper practices, misconduct, any violation of legal or regulatory requirements, actual or suspected fraud, without fear of punishment or unfair treatment. The details of the same are available on the Company's The Company has zero tolerance towards breach of Code of Conduct and to this extent, the Company has built a robust framework around the Whistle Blower mechanism to actively address all complaints received. The Audit Committee is periodically briefed about the various cases received, the status of the investigation, findings and action taken, if any and a comprehensive update is provided semi-annually which is presented and discussed at the Audit Committee Meeting. LARSEN & TOUBRO The policy provides for adequate safeguards against victimisation of persons who blow the whistle and also provides for direct access to the Chairperson of the Audit Committee. The Audit Committee of the Company oversees the implementation of the Whistle-Blower Policy. Complaints under the Whistle Blower Policy are received by the Corporate Audit Services of the Company from various sources. The Chief Internal Auditor reviews the same and after screening the complaint, decides on the further course of action which will include requesting the complainant to provide further details, internal investigation by the CAS department, investigation by external agencies, wherever necessary, opportunity to the defendant to present his/her case, etc. Based on the findings of the investigation, the Corporate Audit Services takes the approval of WBIC for the action recommended by them to be taken. are assured by the management of full protection from any kind of harassment, retaliation, victimization, or unfair treatment. Employees are encouraged to report any acts of unacceptable behaviour inconsistent with the Company's Code of Conduct, having an adverse effect on the Company's financials / image and instances of sharing of unpublished price sensitive information. An employee can report any such conduct in oral or written form. Whistle-blowers b) Vigil Mechanism / Whistle Blower Policy: The Company has a Whistle Blower Policy in place since April 2004. The said policy was modified in line with the requirements of the Vigil Mechanism under the Companies Act, 2013 and subsequently in 2018 to include reporting of instances of leakage of unpublished price sensitive information as per SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2018. The Company has a Whistle Blower Investigation Committee (WBIC) to manage complaints from "Identified" Whistle Blowers. In addition, WBIC considers "Anonymous" complaints which in their judgement are serious in nature and require investigation. The WBIC has five members viz. Chief Financial Officer, Company Secretary, Head-Corporate HR, Chief Internal Auditor and a senior Finance and Accounts person from business. The WBIC is responsible for end-to-end management of the investigations, from the time of receipt of complaints to bringing them to a logical conclusion, keeping in mind the interest of the Company. Suitable actions are taken against employees, wherever investigation confirms the allegations. This information is also available on the website of the Company http://investors.larsentoubro.com/ Listing-Compliance.aspx. As part of the appointment letter issued to Independent Directors, the Company has stated that it will facilitate attending seminars/programs/ conferences designed to train Directors to enhance their role as an Independent Director. Some of the Independent Directors are members of the IC Board. They share the learnings from these meetings with the remaining Non-Executive Directors / Independent Directors formally and informally. Such interactions also happen when these Directors meet senior management in IC meetings and informal gatherings. The WBIC is appraised periodically on the complaints received, current status, actions contemplated and closure of the cases. The WBIC reviews the complaints and their progress. Queries by the WBIC members are immediately attended to by CAS and the implementation of the recommended action are undertaken by the respective HR/Accounts Departments. Statements The Company has laid down a Code of Conduct for all Board members and senior management personnel. The Code of Conduct Report appointment of Chief Executive Officer & Managing Director and other Whole-time Directors is six months on either side. *Represents perquisite value related to ESOPs exercised during the year in respect of stock options granted over the past several years by the Company, Larsen & Toubro Infotech Limited and L&T Technology Services Limited and includes tax on ESOPs borne by the Company wherever applicable. Notice period for termination of 0.31 - 0.23 0.08 Mrs. Preetha Reddy Bhargava# 0.34 0.25 0.01 0.08 Das 0.47 0.35 No severance pay is payable on termination of appointment. Details of Options granted under Employee Stock Option Schemes are provided on the website of the Company www.larsentoubro.com. Mr. Subramanian Sarma has exercised 25,000 stock options of the Company, vested during the year. The perquisite amount on exercise of these options is considered as a part of his remuneration. Mr. S. N. Subrahmanyan has exercised 40,000 stock options each of Larsen & Toubro Infotech Limited and L&T Technology Services Limited, vested during the year. Mr. R. Shankar Raman has exercised 20,000 stock options of Larsen & Toubro Infotech Limited, vested during the year. The perquisite amount Mr. Adil Zainulbhai Mr. Sanjeev Aga 1,327 Mr. Vikram Singh Mehta 225 6,26,936 3,568 No. of Shares Mr. M. Damodaran 0.04 Mr. M. M. Chitale Name Details of shares and convertible instruments of the Company held by the Non-Executive Directors, as on 31st March 2022, are as follows: ^ Includes commission and sitting fees paid by L&T Hydrocarbon Engineering Limited (LTHE). LTHE has merged with the Company. # Payable to the Institution he represents. + others include pension. * Ceased to be an Independent Director with effect from 29th March 2022 on account of completion of his tenure. Mr. Hemant Mr. A. M. Naik 150 0.08 8.40 12.30 3.65 6.03 0.26 1.83 Mr. Subramanian Mehta 0.55^ 0.44 0.11 Mr. Vikram Singh 7.23 11.05 2.29 0.30 Reports 1.23 11.70 23.47 0.08 0.04 0.51 2.55 0.30 1.05 Mr. T. Madhava 0.54 0.40 0.06 Mr. Narayanan Kumar 0.08 8.56 12.55 2.60 0.34 1.05 Mr. S. V. Desai Sarma 0.63 Mr. Sanjeev Aga 100 Mr. Adil Zainulbhai 1,500 Related Dividend Shareholder Queries: Exchange 2 96 95 3 SEBI / Stock Received Resolved Pending* Opening Balance Particulars Complaints: During the year, the Company / its Registrar received the following complaints from SEBI / Stock Exchanges and queries from shareholders, which were resolved within the time frames laid down by SEBI. iv) Number of Requests / Complaints: During the year, the Company has resolved investor grievances expeditiously except for the cases constrained by disputes or legal impediments. Mr. Sivaram Nair Company Secretary is the Compliance Officer. 283 18,729 18,982 30 Transmission/ 87 Transfer Demat / Remat Statutory Financial Discussion and Analysis Mr. Narayanan Kumar Mr. Hemant Bhargava Mr. Hemant Bhargava Integrated Management Corporate Overview The Corporate Social Responsibility ("CSR") Committee has also been entrusted with the task of reviewing the sustainability initiatives of the Company. # appointed as a member of the Committee w.e.f. May 14, 2021. 4) Corporate Social Responsibility Committee: i) Terms of reference: Pursuant to SEBI press release dated 3rd December 2018 and 27th March 2019, except in case of transmission or transposition of securities, requests for effecting transfer of securities subsequent to 1st April 2019, have not been processed by the Company. SEBI vide its circular dated 7th September 2020 had provided a cut-off date of 31st March 2021 for re-lodgment of transfer requests which were lodged prior to 31st March 2019 but rejected/returned due to deficiency of paperwork. Accordingly, the Company has accepted such transfer requests till 31st March 2021 and the said requests were approved during the year. 5 531 529 7 162 4,369 4,294 The Board has delegated the powers to approve transfer of shares to Share Transfer Committee comprising four Senior Executives. This Committee held 3 meetings during the year and approved the transfer of shares lodged with the Company. appointed as Chairman of the Committee w.e.f. May 14, 2021. * Investor complaints / queries shown outstanding as on 31st March 2022 have been subsequently resolved to the satisfaction of the investors. The Company repeatedly sends reminders to shareholders regarding unclaimed shares and dividends. This results in an increase in the number of queries received. Meetings held during the year are expressed as number of meetings eligible to attend. Review of measures taken for effective exercise of voting rights by shareholders. Review of adherence to the service standards adopted by the Company in respect of various services being rendered by the Registrar and Share Transfer Agent. Resolving the grievances of the security holders of the Company including complaints related to transfer/ transmission of shares, non-receipt of annual report, non-receipt of declared dividends, issue of new/duplicate certificates, general meetings etc. The terms of reference of the Stakeholders' Relationship Committee are as follows: Terms of reference: i) 3) Stakeholders' Relationship Committee: Annexure to the Board Report Review of the various measures and initiatives taken by the Company for reducing the quantum of unclaimed dividends and ensuring timely receipt of dividend warrants/annual reports/ statutory notices by the shareholders of the company. 304 * held jointly with the Institution he represents. 180 Mrs. Preetha Reddy * * 90 100 303 ii) Composition: Integrated Annual Report 2021-22 iii) Meetings: Mr. Hemant Bhargava# Member 3 3 3 Member 3 Mr. J. D. Patil Mr. Narayanan Kumar* Chairman 3 No. of Meetings Attended No. of meetings held during Status Name The attendance of Members at the Meetings was as follows: During the year ended 31st March 2022, 3 meetings of the Stakeholders' Relationship Committee were held on 26th July 2021, 1st October 2021 and 28th January 2022. the year 3 As on 31st March 2022, the Stakeholders' Relationship Committee comprised 1 Non- Executive Director, 1 Independent Director and 1 Executive Director. 1100 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 21 21 21 21 21 21 21 21 21 22 22 22 Daily Closing Price 1000 45000 1500 1200 1300 50000 1400 52500 47500 BSE SENSEX Physical shares received for dematerialization are processed and completed within a period of 21 Unit: Larsen & Toubro Limited Selenium Tower B, Plot number 31 & 32 Financial District Gachibowli, Nanakramguda, Hyderabad, Telangana - 500 032. Management Pursuant to SEBI notification dated 24th January 2022, requests for effecting transfer of securities in physical form, shall not be processed by the Company. The share related information is available online. days from the date of receipt. As required under Regulation 40 of the SEBI LODR Regulations, a certificate on yearly basis confirming due compliance of share transfer formalities by the Company from Practicing Company Secretary has been submitted to Stock Exchanges within stipulated time. k) Distribution of Shareholding as on 31st March 2022: Month 2021 April 1600 L&T NSE Price (₹) High Low NIFTY KFin Technologies Limited (previously known as KFin Technologies Private Limited) 55000 j) 1800 Annexure to the Board Report Month May L&T BSE Price (*) BSE SENSEX 2021 High Low Month Close High Low Month Close November 1982.95 1735.25 1763.90 61036.56 56382.93 57064.87 December 1908.75 1763.00 1895.00 59203.37 55132.68 58253.82 2022 i) Registrar and Share Transfer Agents (RTA): 1700 January 2078.20 1850.80 1908.85 61475.15 56409.63 58014.17 February 2006.80 1750.55 1816.90 59618.51 54383.20 56247.28 March 1826.35 1595.00 1767.45 58890.92 52260.82 58568.51 Stock Performance 2400 L&T BSE (*) BSE SENSEX 65000 2300 2200 62500 2100 60000 2000 1900 57500 L&T-BSE (*) June July 1647.15 1475.50 1601.45 15962.25 15513.45 15763.05 August 1684.95 1562.75 1672.20 17153.50 15834.65 17132.20 September 1810.00 1655.20 1702.95 17947.65 17055.05 17618.15 October 1885.00 1684.05 1766.65 18604.45 17452.90 17671.65 November 1981.75 1735.15 1764.75 18210.15 16782.40 16983.20 December 1909.00 1762.05 1895.90 17639.50 16410.20 17354.05 2022 14,92,124 100.00 140,50,29,123 100.00 High Low T20000 TOTAL 1) Categories of Shareholders is as under: 2100 19100 2000 18200 Category 1900 % 17300 1800 L&T-NSE (*) L&T NSE (*) ―NSE NIFTY 16400 1600 15500 1500 14600 NSE NIFTY Financial Institutions Foreign Institutional Investors 31.03.2022 31.03.2021 No. of No. of Shares Shares 21,00,83,320 14.95 23,97,88,975 17.07 31,08,73,341 22.13 31,99,81,665 22.78 % 1400 13700 312 1300 1700 Month Month Close Close 1447.85 1306.00 1340.45 15044.35 14151.40 14631.10 1499.65 1319.15 1467.70 15606.35 14416.25 15582.80 1583.00 1447.25 1500.55 15915.65 15450.90 15721.50 2200 above Shareholders Shareholding No. of Shares upto 500 501-1000 1001-2000 Number % 13,94,521 93.46 47,983 3.22 Number % 9,25,14,365 6.58 3,51,38,388 2.50 26,708 1.79 3,72,87,482 2.65 2001 - 3000 3001-4000 Stock Performance 8,960 2,19,02,931 1.56 3,881 0.26 1,34,46,251 0.96 4001 - 5000 2,480 0.17 1,11,76,202 0.80 March January 2078.55 1850.10 1909.20 18350.95 16836.80 17339.85 February 2008.00 1751.00 1816.75 17794.60 16203.25 16793.90 1826.95 1595.00 1767.65 17559.80 15671.45 17464.75 5001 - 10000 10001 and 4,129 0.28 2,86,44,106 2.04 3,462 0.23 116,49,19,398 82.91 0.60 Integrated Annual Report 2021-22 Advertisements relating to IEPF, E-Voting, AGM related compliances, etc. are published in The Financial Express and Loksatta. High Low 7. Details of risk management including foreign exchange risk, commodity price risk and hedging activities form a part of the 309 Integrated Annual Report 2021-22 310 Annexure to the Board Report 8. 9. Management Discussion & Analysis. Please refer to page 25 to 28 of this Annual Report. As required under the provisions of SEBI LODR Regulations, a certificate confirming that none of the Directors on the Board have been debarred or disqualified by the Securities and Exchange Board of India or Ministry of Corporate Affairs or any such statutory authority, obtained from M/s S. N. Ananthasubramanian & Co., Company Secretaries, is a part of the Corporate Governance report. Details in relation to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 form a part of the Board Report. Please refer to page 286 of this Annual Report. 10. The Company has not provided any loans or advances in the nature of loans to firms/ companies in which Directors are interested. h) Means of communication: Financial Results and other Communications News Releases Website Quarterly and Annual Results are published in prominent daily newspapers viz. The Financial Express, The Hindu Business Line and Loksatta. The results are also posted on the Company's website: www.larsentoubro.com. Official news releases that carry material price sensitive information are sent to stock exchanges as well as displayed on the Company's website: www.larsentoubro.com. The Company's corporate website www.larsentoubro.com provides comprehensive information about its portfolio of businesses. Section on "Investors" serves to inform and service the Shareholders allowing them to access information at their convenience. The quarterly shareholding pattern of the Company is available on the website of the Company as well as the stock exchanges. The entire Annual Report of the Company and subsidiaries are available in downloadable formats. The entire Annual Report of the Company would also be made available on the websites of the Stock Exchanges. Filing with Stock Exchanges Annual Report and Annual General Meeting SEBI Complaints Redress System (SCORES) Management Discussion & Analysis Presentations made to Institutional Investors and Analysts H. UNCLAIMED SHARES Information to Stock Exchanges is 6. The policies for determining material subsidiaries and related party transactions are available on the Company's website https://www.larsentoubro.com/corporate/ about-lt-group/corporate-policies/. 5. There were no instances of non-compliance, penalties, strictures imposed on the Company by the Stock Exchanges on any matter related to the capital markets, during the last three years. Presentation-Archives.aspx 4. The Company makes presentations to Institutional Investors and Equity Analysts on the Company's performance on a quarterly basis. These presentations are provided to the Stock Exchanges and also available on our website https://investors.larsentoubro.com/Analyst- 12800 Discussion and Analysis Integrated Statutory Report Reports Financial Statements LARSEN & TOUBRO Annual General Meeting held on 13th August 2020: To re-appoint and continue the appointment of Mr. A. M. Naik as Non-Executive Director of the company who has attained the age of 75 years. To approve raising of capital through QIP's by issue of shares / convertible debentures / securities upto an amount of USD 600 million or 4,500 crore. Annual General Meeting held on 1st August 2019: To re-appoint Mr. M. M. Chitale as an Independent Director of the Company for a five-year term upto 31st March 2024. To re-appoint Mr. M. Damodaran as an Independent Director of the Company for a five-year term upto 31st March 2024. To re-appoint Mr. Vikram Singh Mehta as an Independent Director of the Company for a five-year term upto 31st March 2024. To re-appoint Mr. Adil Zainulbhai as an Independent Director of the Company for a five-year term upto 28th May 2024. To amend the object clause of the Memorandum of Association of the Company. now being also filed online on NEAPS and Digital Portal for NSE, BSE Online for BSE and RNS for London Stock Exchange. To approve raising of capital through QIP's by issue of shares / convertible debentures / securities upto an amount of USD 600 million or 4,000 crore. f) Resolution(s) passed through Postal Ballot: No postal ballot was conducted during FY 2022. The Company has sought the approval of shareholders through notice of the Postal Ballot dated 13th April 2022 for the following proposals: 1. Alteration of Object Clause of the Memorandum of Association of the Company. 2. Approval of Related Party Transaction to be undertaken by the Company with L&T Finance Limited. 3. Appointment of Mr. Pramit Jhaveri (DIN: 00186137) as an Independent Director w.e.f. 1st April 2022. The voting period for the said Postal Ballot commenced on 18th April 2022 at 9:00 a.m. IST and shall conclude on 17th May 2022 at 5:00 p.m. IST. The Company had appointed Mr. S. N. Ananthasubramanian, Practising Company Secretary, (M. No: FCS 4206, COP No. 1774) and failing him, Ms. Aparna Gadgil, Practising Company Secretary (M. No: ACS 14713, COP No. 8430), as Scrutinizer for conducting the Postal Ballot in a fair and transparent manner. The results of the Postal Ballot would be announced on or before 18th May 2022. g) Disclosures: 1. During the year, there were no transactions of material nature with the Directors or the Management or relatives or the subsidiaries that had potential conflict with the interests of the Company. 2. 3. Details of all related party transactions form a part of the accounts as required under IND AS 24 and the same are given in Note No. 47 forming part of the financial statements. The Company has followed all relevant Accounting Standards notified by the Companies (Indian Accounting Standards) Rules, 2015 while preparing the Financial Statements. Note: The resolution relating to raising of finances have been taken at each of the above AGMs since the validity of the resolution is one year. Annual Report is circulated to all the members and all others like auditors, equity analysts, etc. To enable a larger participation of shareholders for the Annual General Meeting (AGM), the Company has provided Webcast facility at its last three AGMS in co-ordination with NSDL/KFin Technologies. This year, like previous year, due to the continuing COVID-19 pandemic, the Company will be once again conducting the AGM through Audio Visual Means, as permitted by Ministry of Corporate Affairs and SEBI. The Annual Report is e-mailed to all members who have registered their email ids with the Company and to those shareholders who request for the same. The Annual Report would also be made available on the website of the Company. The Chairman suitably responds to the queries raised by the shareholders during the AGM. Investor complaints are processed at SEBI in a centralized web-based complaints redress system. The salient features of this system are centralised database of all complaints, online upload of Action Taken Reports (ATRS) by concerned companies and online viewing by investors of actions taken on the complaints and their current status. The Company submits ATR on timely basis with respect to the complaints received from SCORES. This forms a part of the Annual Report which is mailed to the shareholders of the Company. The schedule of analyst / institutional investor meets and presentations made to them on a quarterly basis are informed to the Stock Exchanges and also displayed on the Company's website. The audio recordings and transcripts of these meetings are also uploaded on the Company's website and link for the same is intimated to the Exchanges. The Company's equity shares / GDRs are listed on the following Stock Exchanges and admitted for trading in London Stock Exchange: BSE Limited (BSE) National Stock Exchange of India Limited (NSE) ISIN Reuters RIC Scrip Code 500510 Scrip Code - LT : INE018A01030 : LART.BO Luxembourg Exchange Stock : 005428157 Code London Exchange Stock Code : LTOD The Company's shares constitute a part of BSE 30 Index of the BSE Limited as well as NIFTY Index of the National Stock Exchange of India Limited. h) Stock market data for the year 2021-22: g) Stock Code / Symbol: Month During last week of October 2022 * 2021 7. Third Quarter results During last week of January 2023 * April May Tentative June c) Record Date: The Record date to determine the members entitled to the dividend for FY 2022 is Friday, 22nd July 2022. July L&T BSE Price (*) Month Month High Low Close Close 1447.80 1306.40 1340.20 50375.77 47204.50 48782.36 1499.80 1320.65 1465.55 52013.22 48028.07 51937.44 1582.65 1448.00 1501.25 53126.73 51450.58 52482.71 1647.00 1475.85 1601.40 53290.81 51802.73 52586.84 August 1684.80 1563.30 1671.40 57625.26 52804.08 57552.39 September 1810.00 1657.20 1703.15 60412.32 57263.90 59126.36 October 1884.90 1684.40 1766.80 62245.43 58551.14 59306.93 BSE SENSEX 6. Second Quarter results 311 The fees to National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) shall be paid on the receipt of their invoice. The Company has paid the Listing Fees for the year 2022-23 to BSE and NSE in April 2022. The fees to Luxembourg Stock Exchange has been paid in March 2022. The fees to London Stock Exchange will be paid on receipt of the invoice. The Company does not have any unclaimed shares lying with it from any public issue. However certain shares resulting out of the bonus shares issued by the Company are unclaimed by the shareholders. As required under Regulation 39(4) of the SEBI LODR Regulations, the Company has already sent reminders to the shareholders to claim these shares. These share Corporate Overview Management Integrated Discussion and Analysis Report Statutory Financial Reports Statements LARSEN & TOUBRO I. certificates are regularly released on requests received from the eligible shareholders after due verification. In accordance with the provisions of the Section 124(6) of the Companies Act, 2013 and Rule 6(3)(a) of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ('IEPF Rules'), the Company has transferred to IEPF equity shares on which dividend has remained unclaimed for a period of seven consecutive years from the financial year 2013-14. The details are given in the Board Report. Please refer to page 285 of this Annual Report. All corporate benefits on such shares viz. dividends, bonus shares, etc. shall be transferred in accordance with the provisions of IEPF Rules read with Section 124(6) of the Companies Act, 2013. The eligible shareholders are requested to note the same and make an application to IEPF Authority in accordance with the procedure available on www.iepf.gov.in and submit such documents as prescribed under the IEPF Rules to claim these shares. Mr. Sivaram Nair A has been appointed as the Nodal officer of the Company. GENERAL SHAREHOLDERS' INFORMATION a) Annual General Meeting: The Annual General Meeting of the Company has been convened on Thursday, 4th August 2022 at 3:30 p.m. through Video Conferencing ("VC") / Other Audio Visual Means ("OAVM") pursuant to the MCA Circular dated 5th May 2020. f) Custodial Fees to Depositories: b) Financial calendar: 2. Mailing of Annual Reports 3. First Quarter Results 4. Annual General Meeting 5. Payment of Dividend 12th May 2022 Second week of July 2022 During the last week of July 2022 * 4th August 2022 On or before 8th August 2022 d) Listing of equity shares / shares underlying GDRs on Stock Exchanges: The shares of the Company are listed on BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE). GDRs are listed on Luxembourg Stock Exchange and admitted for trading on London Stock Exchange. e) Listing Fees to Stock Exchanges: 1. Annual Results of 2021-22 1200 Mr. Sivaram Nair A, Company Secretary has been designated as the Compliance Officer. 11900 Corporate Overview Management Discussion and Analysis Integrated Statutory Financial Report Reports Statements LARSEN & TOUBRO engagement processes, circulars and messages from management, corporate social initiatives, welfare initiatives for employees and their families, online news bulletins for conveying topical developments, large bouquet of print and online in-house magazines, helpdesk facility, etc. Each of the businesses have their internal mechanisms to address the grievances of its stakeholders. In addition, at the corporate level, there are committees which can be approached if the stakeholders are not satisfied with the functioning of such internal mechanisms. As part of the vigil mechanism, the Whistle Blower Policy provides access to the Chairperson of the Audit Committee. The Whistle Blower Policy for Vendors and Channel Partners is displayed on the website of the Company https://www.larsentoubro.com/corporate/ about-lt-group/corporate-policies/. x) Awareness Sessions / Workshops on Governance practices: Employees across the Company as well as the group are being sensitized about the various policies and governance practices of the Company. The Company has designed in-house training workshops on Corporate Governance with the help of an external faculty covering basics of Corporate Governance as well as internal policies and compliances under Code of Conduct, Whistle Blower Policy, Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, SEBI (Prohibition of Insider Trading) Regulations, 2015, etc. The Company has established a scalable, multi-featured and externally integrated digital learning platform called ATLNext. It offers a gamut of online courses including competency courses, behavioural courses, and business-specific technical courses. ATLNext also provides for a course on Governance where employees can learn about Governance practices and give a self- assessment test after completion of the course. The Company has created a batch of trainers across businesses who in turn conduct training / awareness sessions within their business regularly. y) ISO 9001:2015 Certification: The Company's Secretarial Department which provides secretarial services and investor services for the Company and its Subsidiaries and Associate Companies is ISO 9001:2015 certified. z) Audit as per SEBI requirements: As stipulated by SEBI, a Qualified Practicing Company Secretary carries out Reconciliation of Share Capital Audit to reconcile the total admitted capital with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) with the total issued and listed capital. This audit is carried out every quarter and the report thereon is submitted to the Stock Exchanges. The Audit confirms that the total Listed and Paid-up capital is in agreement with the aggregate of the total number of shares in dematerialized form and in physical form. The Secretarial Department of the Company at Mumbai is manned by competent and experienced professionals. The Company has a system to review and audit its secretarial and other statutory compliances by competent professionals, who are employees of the Company. Appropriate actions are taken to continuously improve the quality of compliance. aa) Secretarial Audit as per Companies Act, 2013: Pursuant to the provisions of Section 204(1) of the Companies Act, 2013, M/s. S. N. Ananthasubramanian & Co., Company Secretaries, conducts the secretarial audit of the compliance of applicable statutory provisions and the adherence of good corporate practices by the Company. Pursuant to the SEBI circular no. CIR/CFD/ CMD1/27/2019 dated 8th February 2019, the Company has obtained an annual secretarial compliance report from M/s. S. N. Ananthasubramanian & Co., Company Secretaries and shall submit the same to the Stock Exchanges within the prescribed timelines. bb) Statutory Compliance System: The Company complies with applicable laws, rules and regulations impacting Company's business. These comprise of Central Acts / Rules and those of state governments where the Company generally carries on business. The applicable laws are reviewed and updated by an External Consultant along with the Corporate Legal and Legal departments of each Independent Company (IC). Each IC / Business head certifies compliance of all applicable laws by the IC on a quarterly basis. 315 Integrated Annual Report 2021-22 For internal stakeholders - Employee satisfaction surveys, employee engagement surveys for improvement in employee For external stakeholders - Stakeholder engagement sessions, client satisfaction surveys, shareholder satisfaction assessment, dealer and stockists meet, analyst / investors meet, periodic feedback mechanism, general meeting for shareholders, online service and dedicated e-mail service for grievances, corporate website and access to business media to respond to queries, etc. The Company has a dedicated Corporate Brand Management and Communications department which facilitates an on-going dialogue between the Company and its stakeholders. The communication channels include: The Company recognizes that its stakeholders form a vast and heterogeneous community. Our customers, shareholders, employees, suppliers, community, etc. have been guideposts of our decision-making process. The Company engages with its identified stakeholders on an ongoing basis through business level engagements and structured stakeholder engagement programs. The Company maintains its focus on delivering value to all its stakeholders, especially the disadvantaged communities. 314 Annexure to the Board Report including, Bengaluru, Chennai, Coimbatore, Faridabad, Hazira (Surat), Kattupalli (near Chennai), Kanchipuram, Mumbai, Pithampur, Puducherry, Rajpura, Kansbahal (Rourkela), Talegaon, Vadodara and Visakhapatnam. L&T's international manufacturing footprint covers Oman, Saudi Arabia and USA. The L&T Group also has an extensive network of offices in India and around the globe. See pages 14 and 15 of this Annual Report. t) Address for correspondence: Larsen & Toubro Limited, L&T House, Ballard Estate, Mumbai 400 001. Tel. No. (022) 6752 5656, Fax No. (022) 6752 5858 Shareholder correspondence may be directed to the Company's Registrar and Share Transfer Agent, whose address is given below: 1. KFin Technologies Limited Unit: Larsen & Toubro Limited Selenium Tower B, Plot 31 & 32, Gachibowli, 316 Financial District, Nanakramguda, Hyderabad, Telengana - 500 032 Tel: (040) 6716 2222 Email: einward.ris@kfintech.com Website: www.kfintech.com 2. KFin Technologies Limited Unit: Larsen & Toubro Limited 24-B, Raja Bahadur Mansion, Ground Floor, Ambalal Doshi Marg, Behind BSE Limited, Fort, Mumbai 400 023. Tel: (022) 6623 5454/5412/5427 u) Investor Grievances: The Company has designated an exclusive e-mail id viz. IGRC@LARSENTOUBRO.COM to enable investors to register their complaints, if any. v) Securities Dealing Code: The objective of the Securities Dealing Code ('Code') is to prevent purchase and / or sale of shares of the Company by an Insider based on unpublished price sensitive information. Under this Code, Designated Persons (Directors, Advisors, Officers and other concerned employees / persons) are prevented from dealing in the Company's shares during the closure of Trading Window. To deal in securities beyond specified limit, permission of Compliance Officer is also required. Directors and designated employees who buy and sell shares of the Company are prohibited from executing contra-trades during the next six months following the prior transactions. The Company has a policy for acting against Directors and employees who violate the SEBI PIT Regulations / Code. Pursuant to the enactment of the SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2018, the Company has suitably modified the provisions of the Code which are effective from 1st April 2019. The Company has appointed Mr. P. Ramakrishnan, Vice President (Corporate Accounts & Investor Relations), as Chief Investor Relations Officer. The Company also formulated Code of Practices and Procedures for Fair Disclosure of unpublished price sensitive information which is available on Company's Website https://www.larsentoubro. com/corporate/about-It-group/corporate-policies/. w) Stakeholder Engagement: Toll free number: 1-800-3094-001 Fax: (040) 2342 0814 Integrated Annual Report 2021-22 Annexure to the Board Report The Company has a process of verifying the compliances through a random review of the process/system/documentation of the location of the IC/Corporate function / Group Company. The review is placed before the Board of the respective IC / group company. Existing internal controls are also reviewed. The audit process includes planning the audit, discussion with auditee before audit commencement to explain the scope and purpose of the audit, verifying the compliances based on the supporting documentation, post audit meeting for explaining the observations, etc. 2. We, Deloitte Haskins & Sells LLP, Chartered Accountants, the Statutory Auditors of Larsen & Toubro Limited (the "Company"), have examined the compliance of conditions of Corporate Governance by the Company, for the year ended on March 31, 2022, as stipulated in regulations 17 to 27 and clauses (b) to (i) of regulation 46(2) and para C and D of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time (the "Listing Regulations"). MANAGEMENTS' RESPONSIBILITY 3. The compliance of conditions of Corporate Governance is the responsibility of the Management. This responsibility includes the design, implementation and maintenance of internal control and procedures to ensure the compliance with the conditions of the Corporate Governance stipulated in Listing Regulations. AUDITOR'S RESPONSIBILITY 4. 5. 6. Our responsibility is limited to examining the procedures and implementation thereof, adopted by the Company for ensuring compliance with the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. We have examined the books of account and other relevant records and documents maintained by the Company for the purposes of providing reasonable assurance on the compliance with Corporate Governance requirements by the Company. We have carried out an examination of the relevant records of the Company in accordance with the Guidance Note on Certification of Corporate 7. Governance issued by the Institute of the Chartered Accountants of India (the "ICAI"), the Standards on Auditing specified under Section 143(10) of the Companies Act 2013, in so far as applicable for the purpose of this certificate and as per the Guidance Note on Reports or Certificates for Special Purposes issued by the ICAI which requires that we comply with the ethical requirements of the Code of Ethics issued by the ICAI. We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related Services Engagements. OPINION 8. Based on our examination of the relevant records and according to the information and explanations provided to us and the representations provided by the Management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in regulations 17 to 27 and clauses (b) to (i) of regulation 46(2) and para C and D of Schedule V of the Listing Regulations during the year ended March 31, 2022. 9. We state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the Management has conducted the affairs of the Company. Place: Mumbai For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm's Registration No. 117366W/W100018) Date: May 12, 2022 Sanjiv V. Pilgaonkar (Partner) (Membership No. 039826) UDIN: 22039826AIVDOS1456 318 1. This certificate is issued in accordance with the terms of our engagement letter dated August 23, 2021. INDEPENDENT AUDITOR'S CERTIFICATE ON CORPORATE GOVERNANCE LARSEN & TOUBRO LIMITED TO THE MEMBERS OF cc) Group Governance Policy: Vide its circular dated 10th May 2018, SEBI has introduced the concept of Group Governance Unit. The circular expects listed companies to monitor their governance through a Governance Committee and establishment of a strong and effective group governance policy. "Corporate Governance" in the Company and its subsidiaries broadly includes strategic supervision by the Board and its Committees, compliance of Code of Conduct, Statutory Compliance including compliance of Companies Act / applicable SEBI Regulations, avoiding conflict of interest, Risk Management, Internal Controls and Audit. The Company has four listed subsidiaries within the Group. Each of these entities have their own Board and Board Committees in compliance with the Companies Act, 2013 and SEBI LODR Regulations. The oversight of their subsidiaries is as per Companies Act, 2013 and SEBI LODR Regulations. The Board Report and its annexures of these listed companies contains various disclosures dealing with subsidiary companies. Most of these listed entities has one Executive Director and one or more Independent Director(s) of the Company on its Board. Any financial assistance to the above companies or purchase/ sale by the Company of their shares, is dealt with by the Company's Board. These listed entities publish their Independent Auditor's certificate on Corporate Governance, Secretarial Audit Report of Practising Company Secretary and CEO/CFO's certificate for internal controls for financial reporting. Responsibility of the Company's corporate team in the areas of statutory compliance (including corporate laws), Risk Management, Internal Controls and Internal Audit, covers all unlisted subsidiaries. The four listed subsidiaries have their own teams to carry out these functions. The ICs have separate internal teams to oversee their legal and compliance functions. All Subsidiary Companies associated with the respective ICs are reviewed by their respective IC Boards. The subsidiary companies also function independently and have separate Boards which consists of representatives of the Company, who are senior executives of the Company, representatives of Joint Venture partners, representative of the Company's Board as well as Independent Directors as required by law. As per law, these companies, wherever required, also have Audit Committee, Nomination and Remuneration Committee, CSR Committee, Stakeholders' Relationship Committee and Risk Management Committee. Major unlisted subsidiaries have some Executive Directors of the Company on their Board. The subsidiary companies' performance is reviewed by the Company's Board periodically (included in quarterly results presented to the Company's Board). F&A heads of some of the subsidiary companies functionally report to select senior finance officers of the Company. Thus, the overall functioning of these Subsidiary companies is monitored by the Group directly or through their respective IC's. A voluntary Secretarial Audit is conducted for all subsidiary companies, including foreign companies and companies which are not covered under the purview of Companies Act, 2013. Thus, there is a complete audit of the compliance of applicable statutory provisions and adherence to good corporate practices. The Company's Code of Conduct (Code) is required to be adhered by all unlisted group companies covering employees, directors, suppliers, contractors, etc. In addition to this, the subsidiaries also have their own vigil mechanism, if they meet the thresholds given in the Companies Act. The Audit Committee/Board of these companies monitor this mechanism. The Vigil Mechanism Framework to report breach of Corporate Overview Based on these confirmations, the Company Secretary gives a compliance certificate to the Board of Directors. Management Integrated Statutory Report Reports Financial Statements LARSEN & TOUBRO code is a structured process, which encourages and facilitates all covered, to report without fear, wrongdoings or any unethical or improper practice which may adversely impact the image, credibility and/or the financials of the company, through an appropriate forum. The Secretarial Department of the Company has qualified Company Secretaries (CS) with vast experience in the field of compliance and law. It consists of fulltime professionals dedicated to performing corporate secretarial and subsidiary governance duties. Qualified CS in secretarial department monitor the compliance related to subsidiaries under Companies Act / Rules. The Company's Secretarial Department develops a broad Governance policy for the Company and its group of subsidiaries. The Company's Secretarial Department is involved in all major corporate actions of subsidiaries like IPO's, raising of capital, restructuring, major financial assistance to subsidiaries etc. Appropriate disclosures related to subsidiaries are made in Financial Statements / Directors' Report of the Company as well as its subsidiaries as per Companies Act, 2013 / applicable SEBI Regulations and applicable Accounting Standards. All companies are subject to Statutory Audit and applicable Secretarial Audit. 317 Integrated Annual Report 2021-22 Annexure to the Board Report Independent Auditor's Certificate on Corporate Governance Discussion and Analysis 313 'IND AAA/ Stable' Private 24.55% L&T Employees as on 31st March 2022 Financial Institutions 14.95% Foreign Institutional Investors 22.13% Trust 13.70% Directors & Shares Relatives Bodies Mutual underlying 0.13% GDRs Corporate Funds & Qualified 1.30% 17.44% Institutional Buyers 5.80% m) Dematerialization of shares and Liquidity: The Company's Shares are required to be compulsorily traded in the Stock Exchanges in dematerialized form. Others 19,25,58,158 13.71 34,50,42,982 24.55 33,91,39,419 24.16 140,50,29,123 100.00 140,45,55,297 100.00 Categories of Shareholders TOTAL 19,25,58,158 13.70 1000 11000 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 21 21 21 21 21 21 21 21 21 22 22 22 Daily Closing Price Shares underlying GDRs Mutual Funds Bodies Corporate & Qualified Institutional 1,81,96,992 1.30 2,02,61,741 1.44 24,50,08,723 17.44 21,25,49,034 15.13 8,14,83,173 5.80 7,85,44,719 5.59 Buyers Directors & Relatives 17,82,434 0.13 17,31,586 0.12 Corporate Overview Management The number of shares held in dematerialized and physical mode as on 31st March 2022 is as under: Integrated Discussion and Analysis Report Reports Statements LARSEN & TOUBRO 31.03.2022 31.03.2021 Category No. of Shares % No. of Shares % L&T Employees Trust Others Statutory Financial n) Outstanding GDRs / ADRs / Warrants or any Convertible Instruments, conversion date and likely impact on equity: The outstanding GDRs are backed up by underlying equity shares which are part of the existing paid-up capital. o) Listing of Debt Securities: Bank Loan Facilities Commercial Paper 'CRISIL AAA/Stable' 'CRISIL A1+' Total 140,50,29,123 100.00 ICRA Limited Non-Convertible '[ICRA] AAA (stable)' Shares held in Demat / Physical Form as on 31st March 2022 Debentures Programme Commercial Paper 1.11 '[ICRA] A1+' 5.40% Physical 1,56,35,855 1.11% NSDL 131,35,23,560 93.49% Limited s) Plant Locations: The L&T Group's facilities for design, engineering, manufacture, modular fabrication and production are based at multiple locations within India India Non-Convertible Ratings Debentures and Research CDSL 7,58,69,708 1100 1,56,35,855 5.40 The redeemable Non-Convertible debentures issued by the Company are listed on the Wholesale Debt Market (WDM) of National Stock Exchange of India Limited and / or BSE Limited. p) Listing of Commercial Paper: The Commercial Papers issued by the Company are listed on BSE Limited. q) Debenture Trustees (for privately placed debentures): IDBI Trusteeship Services Limited Ground Floor, Asian Building 17, R. Kamani Marg, Ballard Estate Mumbai 400 001 - r) Credit Rating: The Company has obtained rating from CRISIL Limited, ICRA Limited and India Ratings and Research Private Limited during FY 2022. There has been no revision in credit ratings during FY 2022. The ratings given by these agencies are as follows: % of total Physical No. of shares Rating Agency Type of Instrument Rating issued CRISIL Held in dematerialized form in NSDL 131,35,23,560 93.49 Limited Non-Convertible Debentures 'CRISIL AAA/Stable' Held in dematerialized form in CDSL 7,58,69,708 capital Corporate Overview Share Transfer System: 8. Excess amount spent for the financial year [(ii)-(i)] (iii) Total amount spent for the Financial Year (ii) Two percent of average net profit of the company as per section 135(5) (i) Particulars Sl. No. (g) Excess amount for set off, if any (f) Total amount spent for the Financial Year (8b+8c+8d+8e) 135.68 crore 0.21 crore (e) Amount spent on Impact Assessment, if applicable * 6.42 crore (d) Amount spent in Administrative Overheads 129.04 As per Exhibit - A to the Act registration number Name crore) District State CSR Mode of implementation - Direct (Yes/No) project (in (Yes/ No) schedule VII No. Name of the Project activities in (iv) (v) Surplus arising out of the CSR projects or programmes or activities of the previous financial years, if any Amount available for set off in succeeding financial years [(iii)-(iv)] M. M. Chitale DIN: 02255382 Managing Director Chief Executive Officer & S. N. Subrahmanyan 326 11. Specify the reason(s), if the company has failed to spend two per cent of the average net profit as per section 135(5). ΝΑ 3 As per Exhibit - B 2 1 (d) Provide details of the capital asset(s) created or acquired (including complete address and location of the capital asset). Details of the entity or public authority or beneficiary under whose name such capital asset is registered, their address etc. (c) Amount spent for the (b) Amount of CSR spent for creation or acquisition of capital asset (in) Capital Purchase FY 2022 10. In case of creation or acquisition of capital asset, furnish the details relating to the asset so created or acquired through CSR spent in the financial year (asset-wise details). Annexure to the Board Report Integrated Annual Report 2021-22 325 (b) Details of CSR amount spent in the financial year for ongoing projects of the preceding financial year(s): ΝΑ ΝΑ 6.14 crore ΝΑ * 6.14 crore 140.19 crore* Amount 134.05 crore 9. (a) Details of Unspent CSR amount for the preceding three financial years * includes excess amount of 4.51 crore spent in FY 2021 and set-off in the current financial year. (a) Date of creation or acquisition of the capital asset(s) area SI. Mode of implementation - Through implementing agency. Name of the Project area SI. Location of the project Local Item from the list of Amount (b) Details of CSR amount spent against ongoing projects for the financial year: Nil 135.68 crore towards various activities for the 4.51 crore spent by the Company in FY 2021. Amount Unspent Against the mandated spend of 134.05 crore, the Company spent benefit of the community and availed set off for an excess amount of Accordingly, the excess spend for FY 2022 is 6.14 crore. Total Amount Spent for the Financial Year. 8. (a) CSR amount spent or unspent for the financial year: No. LARSEN & TOUBRO Report Discussion and Analysis Integrated Management Corporate Overview The Company was required to spend an amount of 129.54 crore as CSR expenditure during FY 2022. (d) Total CSR obligation for the financial year (7a+7b-7c). 4.51 crore 324 (c) Amount required to be set off for the financial year, if any (b) Surplus arising out of the CSR projects or programmes or activities of the previous financial years. Nil 7. (a) Two percent of average net profit of the company of last three financial years as per section 135(5) 134.05 crore The average net profit of the Company for the last three financial years is ₹6,702.59 crore *The Company's contribution to PM CARES Fund during FY 2019-20 of 53.23 crore has not been considered as available for set-off against the Company's CSR obligations for FY 2020-21 and FY 2021-22 considering the clarification provided by MCA vide its circular dated 20th May 2021. 6. Average net profit of the company as per section 135(5). Statutory Financial Reports Statements Chairman CSR Committee activities in Schedule VII to the Act Project duration (8) (7) (6) (2) (1) (c) Details of CSR amount spent against other than ongoing projects for the financial year: Location of the project (5) (4) (3) Item from the list of NOT APPLICABLE TOTAL 1. CSR Registration number (Yes/ (in) Name Section 135(6) Mode of Implementation - Through Implementing Agency Mode of Implementation - Direct (Yes/No) project as per F.Y. project (in) No) State District current Account for the in the Amount transferred to Unspent CSR spent Amount allocated for the (in) - DIN: 00101004 Corporate Response CSR00004043 Vidya No 8,862,252 Delhi Delhi No Covid-19 Emergency 6 Children India Response CSR00000158 Save The Foundation No Mumbai Maharashtra No ¡ Covid-19 Emergency 5 Shimla and Delhi and Delhi Bangalore, Rajsamand, Ahmedabad, Himachal Pradesh Khandwa, Tikamgarh, Dharwad, Rajasthan, Gujarat, Oddanchattram, Virudhunagar, Sagar, Pradesh, Karnataka, 1,519,749 Coimbatore, Thoothukudi, 7 !! CSR00000158 Save The No 7,664,772 Mumbai Yes Maharashtra Support to Community 9 School Technical For Schools CSR00002656 St. Joseph's No Repair and Renovation 534,728 Maharashtra Yes ii STEM Program In Mumbai 8 Children Sangh of Day Care Center for Lokmanya Seva CSR00007632 No 2,000,000 Mumbai Maharashtra Yes Mumbai 4.51 crore Nadu, Madhya Yes (Yes/No). CSR Mode of Implementation - Through Implementing Agency Amount spent Mode of in the current Implementa financial Year tion - Direct (in ) Location of the project. LARSEN & TOUBRO Mumbai Maharashtra Yes the Act. District State No). Schedule VII to Name (NGO) Registration (Yes/ activities in Name of the Project. area SI. the list of Local Item from EXHIBIT - A Statements Reports Statutory Financial Integrated Report Management Discussion and Analysis Overview No. Response number Yes 56,710,370 Andaman, Tirunelveli, Madurai, Andaman, Tamil No i Covid-19 Emergency 4 Green Spaces Yes 5,861,612 Mumbai Maharashtra Yes iv 6,940,086 Maintenance of Public Community and Engagement with Yes 618,164 Mumbai Maharashtra Yes ¡¡ Awareness Programmes 2 Projects Implementation of Designing and 1 3 if any (in ) Nil 4.51 crore 4.51 crore 57.74 crore financial years (in) 53.23 crore* Mr. Vikram Singh Mehta 07 22-10-2012 02106990 Mr. Meleveetil Damodaran 06 01-10-2011 00019798 Mr. Ramamurthi Shankar Raman 05 01-07-2011 02255382 Mr. Sekharipuram Narayanan Subrahmanyan 04 00041197 29-03-2022 00035672 Mr. Subodh Kumar Bhargava 03 23-11-1989 06-07-2004 00101004 Mr. Mukund Manohar Chitale 02 00001514 Mr. Anilkumar Manibhai Naik 01 Date of Cessation Date of Appointment Director Identification Number (DIN) No. 03-07-2007 Name of Director 22-10-2012 Mr. Adil Siraj Zainulbhai Reports Report Discussion and Analysis Integrated Management Corporate Overview 320 25-05-2016 00022065 Mr. Sanjeev Aga 13 29-01-2016 06393156 Mr. Maddur Venkata Rao Satish 08 12 03554707 Mr. Dip Kishore Sen 11 19-08-2015 00554221 Mr. Subramanian Sarma 10 03-05-2021 01-04-2015 02949529 Mrs. Sunita Sharma 09 30-05-2014 06646490 01-10-2015 Statutory Financial Sr. Ensuring the eligibility for the appointment / continuity of every Director on the Board is the responsibility of the management of the Company. Our responsibility is to express an opinion based on our verification. 6. VERIFICATION issued by the Institute of Companies Secretaries of India. Regulations, 2021 and the ICSI Auditing Standards, We have conducted our examination and obtained the explanations in accordance with Referencer on SEBI (Share Based Employee Benefits and Sweat Equity) It is our responsibility to certify whether the Company has complied with the applicable provisions of the Regulations and the Resolutions, during the year ended 31st March 2022, in implementing the Schemes on the basis of information compiled or collated by the Management and the accounting and other relevant supporting records and documents provided to us for our examination. 5. 4. AUDITOR'S RESPONSIBILITY It is the responsibility of the Management of the Company to implement the Schemes including designing, maintaining records and devising proper systems to ensure compliance with the provisions of all applicable laws and regulations and to ensure that the systems are adequate and operate effectively. 3. MANAGEMENT RESPONSIBILITY 2. We, Secretarial Auditor of Larsen & Toubro Limited ("the Company") pursuant to Regulation 13 of the Securities Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("the Regulations") are required to certify that, for the Financial Year ended 31st March, 2022, the Employees Stock Option Schemes, L&T Limited ESOP Scheme 2003 and L&T Limited ESOP Scheme - 2006 (collectively referred to as "the Schemes") have been implemented in accordance with the Regulations and in accordance with the Special Resolutions passed at the General Meeting held on 26th August, 1999 & 22nd August, 2003 and 25th August, 2006, respectively (the "Resolutions") 1. This Certificate is issued in accordance with the terms of our engagement dated 07th March, 2022. We have verified the following: BACKGROUND L&T House, Ballard Estate, CIN: L99999MH1946PLC004768 Larsen & Toubro Limited The Members, To, [Pursuant to Regulation 13 of the Securities Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021] Secretarial Auditor's Certificate in respect of the Implementation of Employee Stock Option Schemes of the Company LARSEN & TOUBRO Statements Statutory Financial Reports Discussion and Analysis Report Integrated Management Corporate Overview Mumbai 400001 Based on our examination as aforesaid and such other verifications carried out by us as deemed necessary and adequate (including Directors Identification Number (DIN) status at the portal www.mca.gov.in), in our opinion and to the best of our information and knowledge and according to the explanations provided by the Company, its officers and authorized representatives, we hereby certify that during the Financial Year ended 31st March 2022, none of the Directors on the Board of the Company, as listed hereunder have been debarred or disqualified from being appointed or continuing as Directors of Companies by Securities and Exchange Board of India/ Ministry of Corporate Affairs or any such statutory authority. (a) the Schemes; (c) Note on Accounting Treatment followed by the Company. as submitted by the Directors of Larsen & Toubro Limited ('the Company') bearing CIN: L99999MH1946PLC004768 and having its registered office at L&T House, Ballard Estate, Mumbai 400001, to the Board of Directors of the Company ('the Board') for the Financial Year 2021-22 and Financial Year 2022-23 and relevant registers, records, forms and returns maintained by the Company and as made available to us for the purpose of issuing this Certificate in accordance with Regulation 34(3) read with Schedule V Para C Clause 10(i) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. We have considered non-disqualification to include non-debarment by Regulatory / Statutory Authorities. It is the responsibility of Directors to submit relevant documents with complete and accurate information in accordance with the provisions of the Act. ii) Disclosure of concern or interests as required under Section 184 of the Act; (hereinafter referred to as 'relevant documents') Declaration of non-disqualification as required under Section 164 of Companies Act, 2013 ('the Act'); i) We have examined the following documents: Mumbai 400001. Ballard Estate, L & T House, Larsen & Toubro Limited The Members of [Pursuant to Regulation 34(3) and Schedule V Para C Clause (10) (i) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015] Certificate of Non-Disqualification of Directors Annexure to the Board Report To, (b) the Resolutions; Integrated Annual Report 2021-22 FCS: 4206 | COP No.: 1774 ICSI UDIN: F004206D000267898 Partner S. N. Ananthasubramanian Peer Review Cert. No.: 606/2019 ICSI Unique Code: P1991MH040400 Company Secretaries Date: 04th May, 2022 For S. N. ANANTHASUBRAMANIAN & Co. Place: Thane This Certificate is addressed to and provided to the Members of the Company solely for the purpose of compliances with Clause 13 of the Regulations. This Certificate should not be circulated, copied, used / referred to for any other purpose, without our prior written consent. Accordingly, we do not accept or assume any liability or any duty of care of for any other purpose or to any other party to whom it is shown or into whose hands it may come without our prior consent in writing. RESTRICTION ON USE Based on our verification of the records and documents maintained by the Company as aforesaid and according to the information, explanations and written representations provided to us, we certify that the Company has complied with the applicable provisions of the Regulations and the Resolutions in implementing the Schemes during the year ended 31st March 2022. 7. CERTIFICATION 319 Learning Centers Through Statements Name of Director 1 No. Name of Director SI. Designation /Nature of Directorship The CSR Committee of the Board comprises of 2. Composition of CSR Committee. Integrated Annual Report 2021-22 323 Governance, Technology and Innovation would be the Key enabling factors across all these initiatives. Skill Development - Includes but not limited to vocational training such as skill building, computer training, women empowerment, support to ITI's, support to specially-abled (infrastructure support and vocational training), Construction Skills Training Centres and providing employability skills to women and youth. Health - Due to unprecedented challenges faced by the healthcare sector posed by the spread of Covid -19, focus and outlay on health was substantially increased. However, regular health activities including but not limited to community health centres, mobile medical vans, dialysis centres, general and specialized health camps and outreach programs, support to HIV/AIDS, Tuberculosis control programs continued in a restricted manner. This is achieved through support to Balwadis and Anganwadis strengthening the in-school interventions and providing after school study classes in the community. Ongoing community-based education programs are significantly impacted by Covid-19 induced lockdown. Efforts are being taken to remain digitally connected to the children, despite challenges. Education - Includes but not limited to education infrastructure support to educational Institutions, educational programs and nurturing talent at various levels. Promoting learning enhancement amongst children, both in schools and in communities through interventions in pre-school education, innovative teaching methodology and training teachers in formal schools, providing interesting "teaching learning material", with special focus on Science, Technology Engineering and Maths (STEM) subjects. Mr. M. M. Chitale Water and Sanitation - Includes but not limited to watershed development, access to potable water, promoting rain water harvesting, soil and moisture conservation, enhancing ground water levels by facilitating setting up of community-based institutions such as village development committees, self-help groups, farmer groups and community management of water resources for improving conditions related to sanitation, health, education and livelihoods of communities through an integrated approach. Significant efforts were deployed towards Covid-19 relief besides continuing commitment to existing projects. During the second wave of Covid-19, the focus of relief efforts was to address the acute oxygen shortage faced within the Country through timely supply of PSA oxygen plants, besides strengthening the health infrastructure. Educational activities, including implementation of STEM (Science, Technology, Engineering and Mathematics) programmes in schools. The impact of COVID-19 pandemic continued to ravage communities impacting livelihoods, education and health and called for innovative approaches to address the ground realities. The Company's CSR Policy framework details the mechanisms for undertaking various programmes in accordance with Section 135 of the Companies Act, 2013 (the Act) for the benefit of the community. The CSR projects of the Company are focused on communities that are disadvantaged, vulnerable and marginalized. The Company strives to contribute positively to improve their standard of living, through its interventions in water & sanitation, heath, education and skill development. 1. Brief outline on CSR Policy of the Company ANNUAL REPORT ON CSR ACTIVITIES FOR FINANCIAL YEAR ENDED 31ST MARCH 2022 Annexure 'C' to the Board Report LARSEN & TOUBRO Statutory Financial Statements Reports Discussion and Analysis Report Integrated Management Corporate Overview The Company's primary focus is on 'Building India's Social Infrastructure' as part of its CSR programme which include, amongst others, the following areas, viz. DIN: 02255382 2 3 Amount available for set-off from preceding TOTAL 2020-21 2 2019-20 1 No. Financial Year SI. 5. Details of the amount available for set off in pursuance of sub-rule (3) of rule 7 of the Companies (Corporate Social responsibility Policy) Rules, 2014 and amount required for set off for the financial year, if any Amount required to be setoff for the financial year, Impact assessment for projects concluded in FY 2019-20 was completed. The Independent auditor's report is provided on the Company's website at https://investors.larsentoubro.com/Listing-Compliance.aspx Provide the details of Impact assessment of CSR projects carried out in pursuance of sub-rule (3) of rule 8 of the Companies (Corporate Social responsibility Policy) Rules, 2014, if applicable (attach the report). Board are available in the Governance section on the website of the Company. Please see the link https://investors.larsentoubro.com/corporate-governance.aspx. The Composition of CSR committee, CSR Policy Framework and CSR Projects approved by the Mr. R. Shankar Raman Provide the web-link where Composition of CSR committee, CSR Policy and CSR projects approved by the board are disclosed on the website of the company. 4. 3. 3 3 3 3 3 3 Number of meetings of CSR Committee attended during the year Number of meetings of CSR Committee held during the year Annexure to the Board Report Chairman (Independent Director) Member (Whole-time Director) Member (Whole-time Director) Mr. D. K. Sen Mr. Sivaram Nair A acts as the Secretary of the Committee. Sr. Managing Director DIN: 00019798 00001871 11-07-2020 08586766 11-07-2020 07648203 28-05-2018 01922717 01-07-2017 01252184 27-05-2016 Date of Cessation Date of Appointment 00007848 Director Identification Number (DIN) 01-03-2021 LARSEN & TOUBRO 20 Mrs. Preetha Reddy 19 Mr. Tharayil Madhava Das 18 Mr. Sudhindra Vasantrao Desai 17 Mr. Hemant Bhargava 16 Mr. Jayant Damodar Patil 15 Mr. Narayanan Kumar 14 No. Mr. Pramit Jhaveri S. N. Subrahmanyan Chief Executive Officer and 00186137 This certificate is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the Company. R. Shankar Raman Whole-time Director and Chief Financial Officer 322 Date: May 12, 2022 Yours sincerely, (iii) that there were no instances of significant fraud of which we have become aware. (ii) that there were no significant changes in accounting policies made during the year; and (i) that there were no significant changes in internal controls over financial reporting during the year; and (d) We have indicated to the Auditors and the Audit Committee: (c) We accept responsibility for establishing and maintaining internal controls for financial reporting. We have evaluated the effectiveness of internal control systems of the Company pertaining to financial reporting and have disclosed to the Auditors and the Audit Committee, deficiencies, if any, in the design or operation of such internal controls of which we are aware and steps taken or proposed to be taken for rectifying these deficiencies. (b) There are no transactions entered into by the Company during the period which are fraudulent, illegal or in violation of the Company's code of conduct. (ii) these statements present a true and fair view of the Company's affairs and are in compliance with current accounting standards, applicable laws and regulations. (a) (i) these statements do not contain any materially untrue statement or omit any material fact or contain statements that may be misleading; We have reviewed the consolidated financial statements, read with the consolidated cash flow statement of Larsen & Toubro Limited for the year ended March 31, 2022 and that to the best of our knowledge and belief, we state that; [Issued in accordance with provisions of Regulation 17(8) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015] 01-04-2022 Annexure to the Board Report Dear Sirs, To the Board of Directors of Larsen & Toubro Limited Integrated Annual Report 2021-22 321 ICSI UDIN: F004206D000266677 FCS: 4206 | COP No. : 1774 Partner S. N. Ananthasubramanian Peer Review Cert. No. 606/2019 ICSI Unique Code P1991MH040400 Company Secretaries For S. N. ANANTHASUBRAMANIAN & Co. Date 4th May, 2022 Place: Thane This Certificate has been issued at the request of the Company to make disclosure in its Corporate Governance Report for the Financial Year ended 31st March, 2022. Sub: CEO / CFO Certificate Children India Local Balwadis 21 Women Health and Child No Tamil Nadu Vellore Nutrition, Gudiyatham 4,796,115 No Dhan CSR00000273 (Development Of Humane Action) Foundation Foundation 22 Yes Tamil Nadu, Haryana Chennai, Faridabad, Vadodara and 14,081,101 No American India CSR00001977 Urban Schools and Gujarat Hazira Foundation 23 Integrated Community X No STEM Education Project in Action) Of Humane (Development Development Programme, Organization Nagzari Trust 19 Integrated Community X No Tamil Nadu Vellore 9,243,976 No Dhan CSR00000273 Development Programme, (Development Gudiyatham CSR00000273 Dhan No 3,776,832 Vellore Tamil Nadu Rajasthan No Awareness, Gudiyatham Community Sanitation and 20 Foundation Action) Of Humane !! CSR00000518 Rajsamand No Yes West Bengal 27 Support to Health and i Yes Maharashtra, Andhra Dialysis Centers and Pradesh, Tamil Nadu Raigad, Pune, Kattupalli, Coimbatore, Chennai, Surat and Vadodara 110,899,099 No L&T Public Charitable Trust CSR00004501 238,212,459 Mobile Medical Units 28 Educate and Empower No Maharashtra Pathardi 2,138,614 No Light Of Life CSR00000156 Children at Risk of Trust 328 Dropping out in Pathardi Study Centers and and Gujarat Vadodara, Navsari, Ahmedabad, Surat, Delhi, Gorakhpur, Lucknow, Faridabad, Adilabad, Sehore, Hamirpur and Gadchiroli Ankapalle, North 24 Parganas, Seva Mandir CSR00000288 Development Programme, Sewantri 24 Enhancing Education And ¡¡ No Rajasthan Rajsamand Infrastructure Support, 5,337,834 No CSR00000065 Bhim 25 Construction of Skill Unnao, Malleshwaram, Hubbali, Belagavi, Gulbarga, Coimbatore, Erode, Kanchipuram, Kudamkulam, Chengelpet, Ajmer, Sundergarh, Delhi, Gujarat, Haryana, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Orissa, Rajasthan, Tamil Nadu, Telangana, Uttar Pradesh and Generating Plants Provision of Oxygen Andra Pradesh, No 21,690,544 i 26 Development Center 20,217,900 Yes Bondeli Gujarat Yes Covid Response - Watershed Bal Raksha Bharat 12,450,135 Foundation 13 Early Childhood ii Yes Maharashtra Mumbai 1,694,880 No Pratham CSR00000258 Intervention through Education Pre-School Readiness CSR00001187 Foundation 14 Providing Support i Yes Tamil Nadu Chennai and Kanchipuram 7,500,000 No to Cancer Institute Cancer Institute CSR00007235 (WIA) 15 (WIA) for civil work for Installation of Radiation Equipment and Care of Underprivileged Patients Infrastructure Improvement of Schools and Anganwadi Centers, Program Children Toy No 1,315,110 10 No Support to Community ii Yes Maharashtra Mumbai 3,222,057 No Learning Centers for Angel Xpress Foundation CSR00000120 11 Urban Children from Vulnerable Communities Early Childhood Intervention through !! Yes Maharashtra Mumbai Yes Maharashtra ¡¡ 12 Initiative Program Bhim Education Mumbai CSR00000751 Pratham No 2,261,983 Mumbai Pre-School Readiness !! Mobile Toy Van Outreach Rajasthan 12,421,781 No Prayas Trust CSR00003840 Orissa, Maharashtra, Mumbai, Nagpur, Faridabad, Haryana, Karnataka, Madhya Pradesh, Bangalore, Chandigarh, Bhopal and Kolkata Tamil Nadu and West Bengal 17 Integrated Community X No Aurangabad 22,858,745 Jalna Maharashtra No No X Integrated Community Chennai, Vadodara, Sundargarh, 18 Devgaon Organization Development Programme, CSR00000518 Watershed No Trust Tamil Nadu, Gujarat, Maharashtra !! No Yes Arpan Seva Sansthan Rajsamand CSR00000826 327 Integrated Annual Report 2021-22 Annexure to the Board Report 23,249,776 Local Location of the project. the list of SI. area Name of the Project. Item from No. 16 activities in number the Act. CSR Mode of Implementation - Through Implementing Agency Amount spent Mode of in the current Implementa financial Year tion - Direct (in) (Yes/No). Name (NGO) Registration State No). Schedule VII to (Yes/ District Community Development Activities Yes Yes Maharashtra i Health and Nutrition at 127 Thane 127 Infrastructure support to school Tiruvallur Tamil Nadu Yes !! 126 Name (NGO) Registration number the Act. 395,992 2,000,000 1,500,000 Children of the programme CSR 129 19 Foundation CSR00007444 Swasth No No Mumbai Yes i Primary health care 128 Trust World India Child Care Centre CSR00003131 Maharashtra Mode of Implementation - Through Implementing Agency School on Wheels (in ) NO 500,000 Vadodara Gujarat Yes ¡¡ 125 15 Kicks', Mumbai for children 'Just for Foundation CSR00002852 Pragatee No Early dignostic career 4,500,000 Mumbai and Chennai No VYOM CSR00000742 Education support for District State No). Schedule VII to (Yes/ No. activities in Name of the Project. Amount spent Mode of in the current Implementa financial Year tion - Direct (Yes/No). area the list of Location of the project. Local Item from Annexure to the Board Report Integrated Annual Report 2021-22 333 children Sl. ¡ Providing drinking water Maharashtra Yes 4,530,000 Vadodara Gujarat Yes iv Wastewater Treatment, 134 CSR00000826 Arpan Seva Sansthan Initiatives 4,324,530 No Barmer Rajasthan Yes X Water Management Alva village 135 135 i ¡¡ Maharashtra and Tamil Nadu Village Development Project Mumbai CSR00015484 No 2,000,000 Mumbai Maharashtra 133 Yes Plastic Recyclothon 13333 facilities Yes 1,086,721 Tiruvallur Tamil Nadu Yes iv 133 Program CSR00000742 131 131 PHC, Minjur Yes 1,940,309 Tiruvallur Tamil Nadu Yes Community development i 130 children guidance for school CSR00007755 Prafulta No 2,000,000 Mumbai Infrastructure support for Yes X Maharashtra VYOM No 3,576,000 Vadodara Gujarat Yes X Village Development Yes 132 Agnecy For Habitat India Program for water and sanitation CSR00001277 Aga Khan No 6,000,000 Palghar 132 and life skills programme 112 ¡¡ iv Maintenance of Public 114 Schools Programme in Government Learning Enhancement Yes 6,952,188 Coimbatore Tamil Nadu Yes ¡¡ Infrastructure and 13 113 Hyderabad Training for Rural Youth, Yes Maharashtra Pune 396,602 Yes i Water Conservation 116 16 for Rural Youth CSR00002739 TATA Strive Yes No Visakhapatnam Andhra Pradesh Yes ¡¡ Multi Skill Training Center 115 Green Spaces Yes 9,684,550 9,800,330 Ranga Reddy Telangana ¡¡ Basic Infrastructure Government Schools Development at Yes 276,000 Tiruvarur Tamil Nadu Yes Yes Infrastructure Yes 206,500 Jhunjhunu Rajasthan Sl. area Name of the Project. ¡¡ Tamil Nadu Tamil Nadu 3,500,000 Yes ii Skills Development Yes 112 Yes 2,500,000 Pune Namakkal Maharashtra !! Government School Upgradation in Basic Infrastructure Government School 111 Upgradation in Yes Yes Coimbatore 2,482,043 No Gujarat Yes ii Education Development Programme, Vadodara 122 123 CSR00000751 Pratham Mumbai Education Initiatives Vadodara No Mumbai Yes Maharashtra !! Education Development Programme Community and Engagement with 121 121 4,000,000 Yes 3,500,000 Pratham Personality development 224 124 Foundation urban schools American India CSR00001977 No 1,466,890 No Vadodara Yes ¡¡ STEM education project in 123 123 Foundation Education CSR00000258 Gujarat Yes 45,770 Tamil Nadu Yes ¡¡ Education Support for 118 Yes 4,476,454 Coimbatore Tamil Nadu Andhra Pradesh Yes Wash Facilities for Schools 117 and Depressed Upliftment for Oppressed Organisation Initiatives for Community CSR00001346 Community ¡¡ Coimbatore Visakhapatnam No Yes ¡¡ Awareness Programme 120 120 Green Spaces Yes 264,974 1,055,401 Visakhapatnam Yes iv Maintenance of Public 119 People Special Children CSR00007686 The Ability Andhra Pradesh the list of 17th January 2022 Item from 19. LG Hospital, Maninagar, Ahmedabad, Gujarat - 380008 20. Government Hospital, Anakapalle, Andhra Pradesh - 531001 21. State General Hospital Habra, Habra, West Bengal - 743263 22. IRT Perundurai, Government Erode Medical College, Kunnathur Road, Perundurai, Tamil Nadu - 638053 23. Atal Bihari Government Hospital, Haryana-121004 24. RIMS, Adilabad, Telangana - 504001 25. COVID Hospital, Budhni, Madhya Pradesh 466445 26. BMO Civil Hospital Hamirpur, Tauni Devi, Himachal Pradesh - 177023 27. Government Head Quarters Hospital, Railway Road, Kanchipuram, Tamil Nadu 607001 28. Women's Hospital, Gadchiroli, Maharashtra - 442605 1. L&T Andheri Health Center, Gundavali, Andheri East, Mumbai, Maharashtra - 400093 2. MSTC, Plot No. D-11, B - Block, Auto Nagar, Visakhapatnam, Andhra Pradesh 530012 1. Government Medical College Hospital, Tirunelveli, Tamil Nadu - 627011 2. Government Rajaji Hospital, Madurai, Tamil Nadu 625020 3. Government Hospital (Covid Care Center), Banda Belai, Sagar, Madhya Pradesh 470335 4. Primary Health Centre, Arisipalayam, Madukkarai Block, Coimbatore, Tamil Nadu 641032 Address Oxygen Concentrator(s) (5 LPM) Block Differential Chain 441,260 L&T Community Welfare Association - L & T House, NM Marg, Ballard Estate, Mumbai, Maharashtra - 400001 949,760 1. Government Medical College Hospital, Tirunelveli, Tamil Nadu - 627011 2. Government Rajaji Hospital, Madurai, Tamil Nadu 625020 3. Government Hospital (Covid Care Center), Banda Belai, Sagar, Madhya Pradesh 470335 4. Primary Health Centre, Arisipalayam, Madukkarai Block, Coimbatore, Tamil Nadu 641032 336 Details of the capital asset(s) created or acquired (including complete address and location of the capital asset) 1. Epson L805 Printer, Double Piston Compressor with accessories and microwave oven solo. 2. Haier Smart Television (43 Inch), HP Printer 329DW, Argon Cylinders, Oxygen Cylinders, DA Cylinders, Power Hacksaw (Model: Ashu), Double Ended Pedestral Grinder, Pipe Bending Machine and Asset Name Corporate Overview Management Discussion and Analysis 10. Ahmedabad Municipal Corporation, Central Medical Store, Ahmedabad, Gujarat - 380022 11. Andaman and Nicobar Administration, Secretariat, Port Blair -744101 12. Government Taluk Hospital, Oddanchatram, Tamil Nadu - 624619 Details of the capital asset(s) created or acquired (including complete address and location of the capital asset) Asset Name Oxygen Concentrator(s) (10 LPM) 9,660,000 1. District Government Hospital Dharwad, ICU Ventilator(s) 9. Superintendant of Police, Tenkasi, Tamil Nadu - 627811 Killa, Dharwad, Karnataka - 580008 Karnataka 585105 3. Military Hospital, Jutogh, Shimla, Himachal Pradesh - 171008 4. Government Rajaji Hospital, Medical College Bus Stop, Madurai, 625020 Tamil Nadu 5. Government Medical College Hospital, Ramamoorthy Road, Annanagar, Virudhunagar, Tamil Nadu - 626001 6. Thoothukudi Medical College Hospital, Behind Rajaji Park, Thoothukudi, Tamil Nadu - 628003 7. Government Medical College Hospital, Tirunelveli, Tamil Nadu - 627011 Address 2. GIMS Hospital, Gulbarga, 28. Women's Hospital, Gadchiroli, Maharashtra - 442605 8. Samudayik Swasthya Kendra, Bhim, Rajasthan - 305921 Corporation Limited, Hoodi, Bengaluru, Karnataka 560048 Integrated Report Statutory Financial Reports Statements LARSEN & TOUBRO Sr Date of No. creation or acquisition of the capital asset(s) 4 7. Chitaguppi Hospital, Lamington Road, Hubli, Karnataka - 580020 31st May 2021 14th May 2021 Amount of Details of the entity or public authority CSR spent for or beneficiary under whose name such creation or capital asset is registered, their address acquisition of etc. capital asset (in) 15,480,950 1. Government Medical College Hospital, Ramamoorthy Road, Annanagar, Virudhunagar, Tamil Nadu - 626001 2. Government Thoothukudi Medical College Hospital, Thoothukudi, Tamil Nadu 628008 3. Samudayik Swasthya Kendra, Khargapur, Tikamgarh, Madhya Pradesh 472115 4. Samudayik Swasthya Kendra, Palera, Tikamgarh, Madhya Pradesh - 472221 5. Chitaguppi Hospital, Lamington Road, Hubli, Karnataka - 580020 6. Karnataka Power Transmission 5 1. Government Medical College Hospital, Ramamoorthy Road, Annanagar, Virudhunagar Tamil Nadu - 626001 Tamil Nadu 607001 26. BMO Civil Hospital Hamirpur, Tauni Devi, Himachal Pradesh - 177023 Details of the capital asset(s) created or acquired (including complete address and location of the capital asset) Asset Name 238,212,459 1. SSG Hospital, Vadodara, Gujarat - 390001 Oxygen Generating Plants 2. MG General Hospital, Navsari, Gujarat - 396445 3. 1200 Bed Civil Hospital, Asarwa, Ahmedabad, Gujarat - 380016 4. Maharishi Valmiki Hospital, Puth Khurd Village, New Delhi, Delhi - 110039 5. Guru Gorak Nath Hospital, Gorakhpur, Uttar Pradesh - 273015 6. Acharya Shree Bhikshu Hospital, Moti Nagar, New Delhi, Delhi - 110015 7. KC General Hospital, Bengaluru, Karnataka 560003 8. ESI Hospital, Singanallur, Coimbatore - 641015 9. Nirali Hospital, Navsari, Gujarat - 396463 10. Karnataka Institute of Medical Sciences, KIMS Hospital, KIMS Campus, PB Road, Vidya Nagar, Hubli, Karnataka - 580022 11. BIMS Hospital, Belagavi, Karnataka - 590001 12. Gulbarga Institute of Medical Science, Veeresh Nagar Cross, Sedam Road, Behind MRMC, Kuvempu Nagar, Gulbarga, Karnataka 585101 13. Mahatma Gandhi Health Centre, Lucknow, Uttar Pradesh - 226028 14. Government Medical College and Hospital, Kundunkulam, Radhapuram, Tirunelveli, Tamil Nadu - 627106 15. Chengalpattu Medical College, VOC Nagar, Chengalpattu, Tamil Nadu - 603001 (in) capital asset Amount of Details of the entity or public authority CSR spent for or beneficiary under whose name such creation or capital asset is registered, their address acquisition of etc. September 2021 activities in 1,290,487,087 334 Corporate Management Overview Discussion and Analysis Integrated Report 16. Railway Hospital, Ajmer, Rajasthan Statutory Financial Reports Statements EXHIBIT - B Sr Date of No. creation or acquisition of the capital asset(s) 1 15th May 2021 to 27th LARSEN & TOUBRO - 305001 17. DCHC Government Hospital, Sundargarh, Odisha 770001 18. 100 Bed Hospital, Maurawan, Uttar Date of No. creation or acquisition of the capital asset(s) 2 27th October 2021 to 28th March 2022 3 Sr 22nd May 2021 19. LG Hospital, Maninagar, Ahmedabad, Gujarat - 380008 20. Government Hospital, Anakapalle, Andhra Pradesh 531001 21. State General Hospital Habra, Habra, West Bengal - 743263 22. IRT Perundurai, Government Erode Medical College, Kunnathur Road, Perundurai, Tamil Nadu - 638053 23. Atal Bihari Government Hospital, Haryana - 121004 24. RIMS, Adilabad, Telangana - 504001 25. COVID Hospital, Budhni, Madhya Pradesh 466445 Amount of Details of the entity or public authority CSR spent for or beneficiary under whose name such creation or capital asset is registered, their address acquisition of etc. capital asset (in) 27. Government Head Quarters Hospital, Railway Road, Kanchipuram, Annexure to the Board Report 335 Pradesh 209821 Address 1. SSG Hospital, Vadodara, Gujarat - 390001 2. MG General Hospital, Navsari, Gujarat - 396445 3. 1200 Bed Civil Hospital, Asarwa, Ahmedabad, Gujarat - 380016 4. Maharishi Valmiki Hospital, Puth Khurd Village, New Delhi, Delhi - 110039 5. Guru Gorak Nath Hospital, Gorakhpur, Uttar Pradesh - 273015 6. Acharya Shree Bhikshu Hospital, Moti Nagar, New Delhi, Delhi - 110015 Integrated Annual Report 2021-22 7. KC General Hospital, Bengaluru, Karnataka 560003 9. Nirali Hospital, Navsari, Gujarat - 396463 10. Karnataka Institute of Medical Sciences, KIMS Hospital, KIMS Campus, PB Road, Vidya Nagar, Hubli, Karnataka - 580022 11. BIMS Hospital, Belagavi, Karnataka - 590001 12. Gulbarga Institute of Medical Science, Veeresh Nagar Cross, Sedam Road, Behind MRMC, Kuvempu Nagar, Gulbarga, Karnataka - 585101 13. Mahatma Gandhi Health Centre, Lucknow, Uttar Pradesh - 226028 14. Government Medical College and Hospital, Kundunkulam, Radhapuram, Tirunelveli, Tamil Nadu - 627106 15. Chengalpattu Medical College, VOC Nagar, Chengalpattu, Tamil Nadu - 603001 16. Railway Hospital, Ajmer, Rajasthan - 305001 17. DCHC Government Hospital, Sundargarh, Odisha - 770001 18. 100 Bed Hospital, Maurawan, Uttar Pradesh 209821 8. ESI Hospital, Singanallur, Coimbatore - 641015 2. Government Thoothukudi Medical College Hospital, Thoothukudi, Tamil Nadu 628008 3. Samudayik Swasthya Kendra, Khargapur, Tikamgarh, Madhya Pradesh 472115 4. Samudayik Swasthya Kendra, Palera, Tikamgarh, Madhya Pradesh - 472221 Gujarat, Rajasthan Yes Oxygen Augmentation - 142 Gujarat support Yes 3,581,298 Tiruvallur and Surat Tamil Nadu and Yes Health infrastructure 141 141 electric work PSA Oxygen Unit Civil and Yes Surat, Barmer and Tiruvallur 30,948,356 Yes PSA Oxygen Generation 4. Government Higher Secondary School, Mettukuppam, Chennai - 600097 Indian Red Cross Society, Tamil Nadu State Branch, Red Cross Building, 32, Montieth Road, Egmore, Chennai, Tamil Nadu 600008 Greater Chennai Corporation, Rippon Bulding, Chennai, Tamil Nadu - 600003 Rajyadharpur Girls High School, Village Rajyadharpur, Serampore, Hooghly, West Bengal - 712201 Serampore Girls' College, 13 T. C. Goswami Street, Serampore, Hooghly, West Bengal 712201 Bora Girls' Primary School, Village Bora, Hoogly, West Bengal - 712306 338 Project Mumbai CSR00015484 549,779 No Total Mumbai Maharashtra Yes Covid-19 Vaccination 143 Unit and Tamil Nadu 1,000,000 Tiruvallur Tamil Nadu Yes Group-AWAG Women's Action Programme CSR00000709 Ahmedabad No 3,000,000 Vadodara 138 Gujarat Management Integrated Statutory Financial Discussion and Analysis Report Reports Statements LARSEN & TOUBRO Corporate Overview - 600116 Infrastructure support for skilling Yes i Oxygen Augmentation - 140 140 Gujarat relief Yes 5,626,319 !! Bathinda, Begusarai and Surat Yes i Infrastructure for COVID 139 Yes 509,999 Tiruvallur Tamil Nadu Punjab, Bihar and 3. Government Girls Higher Secondary School, Chinna Porur, Chennai 2. Villivakkam Panchayat Union Middle School, Poothapedu, Chennai - 600089 1. Government Higher Secondary School, Alapakkam, Chennai - 600116 No. creation or acquisition of the capital asset(s) 14th May 2021 6 to 15th May 2021 7 29th May 2021 8 Date of 1st November 6 1st July 2021 10 1st May 2021 11 12 14th December 2021 13 2021 17th January 2022 Sr Integrated Annual Report 2021-22 5. Chitaguppi Hospital, Lamington Road, Hubli, Karnataka - 580020 6. Karnataka Power Transmission Corporation Limited, Hoodi, Bengaluru, Karnataka 560048 - 7. Chitaguppi Hospital, Lamington Road, Hubli, Karnataka - 580020 8. Samudayik Swasthya Kendra, Bhim, Rajasthan 305921 9. Superintendant of Police, Tenkasi, Tamil Nadu - 627811 10. Ahmedabad Municipal Corporation, Central Medical Store, Ahmedabad, Gujarat - 380022 11. Andaman and Nicobar Administration, Secretariat, Port Blair -744101 Annexure to the Board Report 12. Government Taluk Hospital, 1. District Government Hospital Dharwad, Killa, Dharwad, Karnataka - 580008 2. GIMS Hospital, Gulbarga, Karnataka 585105 3. Military Hospital, Jutogh, Shimla, Himachal Pradesh - 171008 4. Government Rajaji Hospital, Medical College Bus Stop, Madurai, Tamil Nadu 625020 5. Government Medical College Hospital, Ramamoorthy Road, Annanagar, Virudhunagar, Tamil Nadu - 626001 6. Thoothukudi Medical College Hospital, Behind Rajaji Park, Thoothukudi, Tamil Nadu 628003 7. Government Medical College Hospital, Tirunelveli, Tamil Nadu - 627011 337 Oddanchatram, Tamil Nadu - 624619 Local Amount of Details of the entity or public authority CSR spent for or beneficiary under whose name such creation or capital asset is registered, their address acquisition of etc. capital asset 1,428,000 1. Government Rajaji Hospital, Medical College Bus Stop, Madurai, Tamil Nadu - 625020 2,500,000 Commissioner, Greater Chennai Corporation, Oxygen Concentrator Rippon Bulding, Chennai, Tamil Nadu - 600003 162,000 The Headmistress, Rajyadharpur Girls High School, Village Rajyadharpur, Serampore, Hooghly, West Bengal - 712201 433,000 The Principal, Serampore Girls' College, 13 T. C. Goswami Street, Serampore, Hooghly, West Bengal - 712201 Water purifier, ceiling fans and almirah Smart class room set up 115,000 Teacher In-charge, Bora Girls' Primary School, Computers and printer Village Bora, Hoogly, West Bengal - 712306 Deep freezer equipment Address Tamil Nadu 625020 2. Government Medical College Hospital, Ramamoorthy Road, Annanagar, Virudhunagar, Tamil Nadu - 626001 3. Thoothukudi Medical College Hospital, Behind Rajaji Park, Thoothukudi, Tamil Nadu - 628003 4. Government Medical College Hospital, Tirunelveli, Tamil Nadu - 627011 1. (a) Samudayik Swasthya Kendra, Khalwa District, Khandwa, Madhya Pradesh 450117 (b) Samudayik Swasthya Kendra, Harsud District, Khandwa, Madhya Pradesh 450116 2. Forest Department, Satpura Bhawan, Arera Hills, Bhopal, Madhya Pradesh - 462004 3. Vidya Foundation, B-16, Panchsheel Enclave, New Delhi - 110017 1. Government Rajaji Hospital, Medical College Bus Stop, Madurai, (in) Rain water harvesting structures 2. Force Trax Crusier Ambulance (AC) (Type B) 2. Government Medical College Hospital, Ramamoorthy Road, Annanagar, Virudhunagar, Tamil Nadu - 626001 3. Thoothukudi Medical College Hospital, Behind Rajaji Park, Thoothukudi, Tamil Nadu - 628003 4. Government Medical College Hospital, Tirunelveli, Tamil Nadu - 627011 15,733,899 1. (a) Samudayik Swasthya Kendra, Khalwa District, Khandwa, Madhya Pradesh - 450117 (b) Samudayik Swasthya Kendra, Harsud District, Khandwa, Madhya Pradesh - 450116 2. Forest Department, Satpura Bhawan, Arera Hills, Bhopal, Madhya Pradesh - 462004 3. Vidya Foundation, B-16, Panchsheel Enclave, New Delhi - 110017 3. Force Trax Cruiser Ambulance 2,700,000 1. Head Teacher, Government Higher Secondary School, Alapakkam, Chennai 600116 4. Government Higher Secondary School, Mettukuppam, Chennai - 600097 774,080 Chairman, Indian Red Cross Society, Tamil 55,198 Nadu State Branch, Red Cross Building, 32, Montieth Road, Egmore, Chennai, Tamil Nadu - 600008 Details of the capital asset(s) created or acquired (including complete address and location of the capital asset) Asset Name Mobile X-Ray Units 1. Force Traveller T1 Ambulance (Type B) 2. Villivakkam Panchayat Union Middle School, Poothapedu, Chennai - 600089 3. Government Girls Higher Secondary School, Chinna Porur, Chennai - 600116 No. Vadodara Schedule VII to Yes West Bengal Kolkata Yes !! Government Schools 110 110 19 109 Development at ¡¡ 108 Government Schools Shivpuri Madhya Pradesh Yes Development at Infrastructure 107 the Act. District State No). Infrastructure Skill Development 63 Parishad Orissa Bhubaneswar 160,529 Yes Support for Education to ii Yes New Delhi New Delhi 947,636 No Adharshila CSR00008054 Vulnerable Children 62 Mobility Aids and ¡ Yes Maharashtra Pune 1,200,000 No Bharat Vikash CSR00004408 Mainstreaming Schedule VII to (Yes/ No. activities in Sonepur Orissa Yes !! !! Yes 345,572 Belagavi Karnataka Yes ii Yes 879,997 Patna Bihar Yes Yes 269,800 New Delhi New Delhi Yes !! !! Yes 452,950 275,941 Yes Yes Medchal-Malkajgiri Name of the Project. area Sl. the list of Local Item from Yes 763,694 Name (NGO) Registration number CSR Mode of Implementation - Through Implementing Agency Amount spent Mode of in the current Implementa financial Year tion - Direct (Yes/No). (in ) Location of the project. LARSEN & TOUBRO Statements Reports Report Discussion and Analysis Statutory Financial Integrated Management Corporate Overview Yes 147,500 Yes Telangana Blood Donation Camp 60 1669 Surat Yes Gujarat HIV AIDS Awareness Prevention and Support 69 Yes 800,000 Surat Yes Gujarat Rural Health Support 68 Yes 9,450,970 Surat Gujarat Yes ¡¡ Providing Educational Kits 67 6%9 Donor Kolkata Voluntary Blood Awareness and Camp, Association of CSR00014736 No 697,002 484,992 No CSR00011799 District State No). Schedule VII to (Yes/ No. activities in Name of the Project. area Sl. the list of Local Item from LARSEN & TOUBRO Statements Reports Report Discussion and Analysis Statutory Financial Integrated Management Corporate Overview (Gsnp+) People Living With HIV+ 330 Gujarat State Network of Satara Kolkata Yes Anandan No 1,001,032 Yes and Engagement with Community 81 Skills Development ii Yes Telangana Mahbubnagar 33,662,731 Yes Training for Rural Youth, Jadcherla 82 Skills Development ¡¡ Yes Gujarat New Delhi 174,999 No NIIT Foundation CSR00000621 Youth on Data Entry CSR00012653 West Bengal Programme 64 i Blood Donation 99 66 Services Women Cathedral Relief CSR00011146 No 1,642,993 Kolkata West Bengal Yes ii Vocational Training for 65 Foundation Programme CSR00000237 Disha No 353,600 West Bengal Yes !! Skill Development 59 the Act. Yes Maharashtra 332 91 Facilities in School Yes 1,069,670 Raigad Yes Maharashtra ii Repairs to Infrastructure 90 Pilkhuwa Training for Rural Youth, Renovation of Community Yes Hapur Uttar Pradesh Yes ¡¡ Skills Development 89 Panvel Training for Rural Youth, Yes 42,612,437 Raigad 37,999,053 X Yes Maharashtra Raigad Amount spent Mode of in the current Implementa financial Year tion - Direct (in ) (Yes/No). Annexure to the Board Report Cuttack Orissa Yes the Act. District State No). Schedule VII to (Yes/ No. activities in Name of the Project. area SI. the list of Location of the project. Local Item from Integrated Annual Report 2021-22 331 Center at Belpada Village Yes 1,002,113 Maharashtra Yes ¡¡ Skills Development GB Nagar Facilities in School Yes 1,216,000 Saharanpur, Chandauli, Janupur and Uttar Pradesh Yes Repairs to Infrastructure 84 Malabar Cancer CSR00025434 Care Society Detection No 974,989 Kannur Kerala Yes i Awareness and Cancer 83 Ahmedabad Training for Rural Youth, Yes 32,400,000 Ahmedabad (Yes/ 55 32,720,312 98 85 88 Kanchipuram Training for Rural Youth, Skills Development 87 Yes 34,189,274 Kanchipuram Tamil Nadu Yes Yes 239,250 Gurgaon and Nuh Haryana Yes !! Yes 1,000,000 Kolkata West Bengal Yes Facilities in School Repairs to Infrastructure Facilities in School Repairs to Infrastructure 86 Yes 92 Skills Development 100 Name (NGO) Registration number CSR Mode of Implementation - Through Implementing Agency Yes 300,000 Faridabad Haryana Yes at Government Schools Facilities and Awareness) Development (Wash Infrastructure Government Schools and Awareness) at 99 99 System, Wash Facilities Development (Solar Power Yes 497,000 Singrauli Madhya Pradesh Yes Infrastructure 100 Schools Infrastructure Yes Chhattisgarh Infrastructure Development at Government Schools Infrastructure Development at Government Schools at Government Schools Facilities and Awareness) Development (Wash 106 105 105 104 Infrastructure Infrastructure Development at Government Schools Infrastructure Development (Solar Power System) in Community Schools Development (Solar Power System) at Government Infrastructure Schools 10 103 102 00 101 System) at Government Development (Solar Power Yes 178,416 Bastar ¡¡ ¡¡ System) at Government 96 95 at Government Schools Facilities and Awareness Development and Wash Yes 2,811,411 Nabarangupr Orissa Yes ¡¡ Infrastructure 94 Attibelle Institute for Rural Youth, Yes 40,063,796 Bangalore Karnataka Yes ¡¡ Construction Skill Training 93 93 Cuttack Training for Rural Youth, Infrastructure Facilities and Solar Power ii West Bengal 98 Development (Wash Yes 2,122,760 Tonk Rajasthan Yes !! Infrastructure 97 Government Schools Development at Yes 773,000 Hazaribagh Yes Jharkhand ¡¡ Infrastructure 96 96 Government Schools Development at Yes 979,637 Medinipur Yes 70 Kolkata ¡ No Bhumi CSR00001059 for Urban Children from Vulnerable Communities 45 Educational Support for ¡¡ Yes Tamil Nadu Chennai 4,599,834 No Vidyasagar Trust CSR00003082 Special Children 46 Support to Evening ii Yes New Delhi New Delhi 6,099,560 No School For Children from Seth Vidyalaya Trust (Prayatn) CSR00002655 Vulnerable Communities 47 Every Child a Scientist 3,000,000 Chennai Tamil Nadu Yes ¡¡ Yes Orissa Sundargarh 28,000,000 Yes Support to Tribal Communities 42 Autocad Training for ii Yes West Bengal Hooghly ¡¡ 2,200,000 Underprivileged Youth 43 Infrastructure !! Yes West Bengal Hooghly 1,000,000 Yes 44 Development Support at School Support to Study Centers !! Yes Providing Educational Yes Chennai activities in No. (Yes/ Schedule VII to No). State District the Act. Yes Tamil Nadu Chennai Annexure to the Board Report Amount spent Mode of in the current Implementa financial Year tion - Direct (in ) (Yes/No). Mode of Implementation - Through Implementing Agency CSR Name (NGO) Registration number 1,020,000 No Sri Arunodayam CSR00001030 Charitable Trust 50 Support for Special Education for Abandoned Children with Intellectual Disability 51 Infrastructure Support for i Yes Name of the Project. area SI. the list of 1,909,397 No MSSRF-MS CSR00000470 Project Swaminathan Research Foundation 48 49 School Infrastructure Development School Infrastructure !! Yes Tamil Nadu Tamil Nadu Chennai Yes Yes Tamil Nadu Chennai 2,700,000 HIV AIDS Awareness Development United Way Of Chennai CSR00000572 329 Integrated Annual Report 2021-22 Item from Local Location of the project. 2,254,409 41 Serampore Training for Rural Youth, Programme, Kumbhalghar 31 Skill Training Academy, ¡¡ Yes Maharashtra Mumbai 16,584,073 Yes Madh 32 Infrastructure Support for ¡¡ Yes Maharashtra Mumbai 97,409 No Community Development L&T Community CSR00015237 Welfare Association 33 Community Health Centre, i Yes Maharashtra Thane 43,299,550 Yes Thane Education Enhancement CSR00000288 Seva Mandir No No). State District the Act. 29 Women Health and Child ¡ No Rajasthan Rajsamand Location of the project. Amount spent Mode of in the current Implementa financial Year tion - Direct (in) Mode of Implementation - Through Implementing Agency CSR བ་ (Yes/No). number 9,181,235 No Seva Mandir CSR00000288 Nutrition Programme, Kumbhalgarh 30 Infrastructure Support and ii No Rajasthan Rajsamand 17,821,455 Name (NGO) Registration 34 Maintenance of Public iv Vulnerable Children School 38 38 Education Support to ii Yes Gujarat Vadodara 572,280 No Sai Angel CSR00000322 Vulnerable Children CSR00020728 39 Yes Gujarat Vadodara 127,680 Yes Vulnerable Children 40 Skills Development ii Yes West Bengal Hooghly 45,000,000 Yes Education Support to Tamil Nadu Roosevelt 2,130,385 Yes Gujarat Vadodara 3,517,900 Yes Green Spaces 35 Educational Support to Yes Haryana Faridabad 3,748,800 Yes Vulnerable Children 36 No Education Support to Gujarat Vadodara 1,169,485 No Swami CSR00008492 Vivekanand Vulnerable Children School 37 Education Support to !! Yes Gujarat Vadodara Yes Chennai No No Schools Yes 7,500,000 Surat Yes Gujarat iv 77 Alternate Energy for Yes 2,505,976 Surat Gujarat Yes !! Providing Educational Kits at Mora Development Centre 67 76 Yes 804,884 Surat Gujarat Yes 78 Support to Community Maintenance of Public Yes Providing Skill Training to ¡¡ Yes New Delhi Yes Gujarat ii Awareness Programme 80 50 Classrooms in Schools Yes 15,189,479 Surat Gujarat Yes ii Providing Digital 774,080 Green Spaces Yes 2,614,559 Surat Gujarat iv 75 Community Engagement with No 448,778 Surat Gujarat Yes ¡¡ 'Aadhaar'- Skill Building 71 System Prevention and Support Yes 876,998 Registration number Name (NGO) (Yes/No). (in ) CSR Mode of Implementation - Through Implementing Agency Amount spent Mode of in the current Implementa financial Year tion - Direct Location of the project. Surat Gujarat Yes Laxi Care CSR00011414 for Community Women Foundation Yes 177,576 Surat Yes Gujarat ¡¡ Awareness and 74 Health Awareness Programme for Adolescent Yes 603,747 59 Surat ¡ Health and Hygiene 73 Community Women Yes 1,216,373 Surat Yes Gujarat ii Skill Building for 72 Yes Gujarat Rural Youth 79 SEWA Trust Tamil Nadu Yes ii E-Content Development 56 Relief) Hospitals, Chennai (Covid CSR00000572 United Way Of Chennai Machines to Government No 2,500,000 Chennai Tamil Nadu Yes Chennai 22,485,548 Yes for Skills Development Tamil Nadu E-Content Development 50 58 Rural Youth Training Institutes for for Skills Development i Yes Chennai Tamil Nadu Yes E-Content Development 57 Rural Youth Training Institutes for 9,507,042 Oxygen Concentrator 55 Workers - 'Green Hands' Building 53 Community and Engagement with Yes 389,503 iv Chennai Yes ¡¡ Awareness Programme 52 CSR00004593 Indian Red Cross Society Blood Storage Tamil Nadu Chennai Yes Chennai for Women Construction CSR00002616 Yes 357,007 Ahmedabad Gujarat Yes Tamil Nadu ii 54 54 Communities Development in Nearby Awareness For Greenery Yes 282,059 Skill Upgradation Training 1,046,093 Yes Yes for Skills Development Training Institutes for Date of Sr Annexure to the Board Report Integrated Annual Report 2021-22 345 18. Upper Primary School, Aret Ki Bhagal, Gawar Panchayat, Kelwara Zone, Kumbhalgarh Block, Rajsamand, Rajasthan - 313325 17. Government Urdu Higher Primary School, Veerabhadra Nagar, Belagavi, Karnataka 500016. - Haryana 121001 16. Government Girls Senior Secondary School, NIT 3, Faridabad, Madhya Pradesh - 473446 15. Government M. S. Hatkapura School, Ashoknagar, Rajghat, 14. Rajkiya Madhyamik Vidyalaya, Krishna Nagar (Village Kishanpura), RIICO Road, Bharatpur, Rajasthan - 321001 13. Government Secondary School, Potaliya Bada, Kushalgarh pkg-3, Rajasthan -327801 11. Government Kasturba Ghandhi Girls Residential School, Chhoti Sarwa, Kushalgarh pkg-1, Rajasthan - 327602 12. Government Higher Secondary School, Dungra Bada, Sajjangarh pkg-2, Rajasthan 327604 - No. creation or acquisition of the capital asset(s) 4th August 2021 10. Government Upper Primary School, Village-Gandhigram-1, Deoli, Tonk, Rajasthan 304804 Corporate Overview Management Discussion and Analysis 6. Mukundapur Thakamoni High School, Durlavpur, Mejhia, Bankura, West Bengal -722133 Integrated Report 2,347,840 1. Benabad Junior High School, Benabad, Mejhia, Bankura, West Bengal - 722143 2. Pairasole Primary School, Pairasole, Mejhia, Bankura, West Bengal - 722143 3. Benabad Primary School, Benabad, Mejhia, Bankura, West Bengal - 722143 4. Natshala Primary School, Benabad, Bankura, West Bengal - 722143 5. Maraya Primary School, Amarkanan, Bankura, West Bengal - 722133 36,409 Head Teacher, Narayanpur Primary School, PO Ganja Narayanpur, Purba Medinipur, West Bengal - 721648 24. Government Primary School, Rod Ka Guda, Sukhar Panchayat, Antaliya Zone, Kumbhalgarh Block, Rajsamand, Rajasthan 313333 23. Upper Primary School, Rati Talai, Antaliya Panchayat, Antaliya Zone, Kumbhalgarh Block, Rajsamand, Rajasthan 313334 22. Government Primary School, Pavatiya, Thaladhari Panchayat, Kelwara Zone, Kumbhalgarh Block, Rajsamand, Rajasthan - 313325 Gawar Panchayat, Kelwara Zone, Kumbhalgarh Block, Rajsamand, Rajasthan 313325 21. Upper Primary School, Hatai Ki Bhagal, 20. Upper Primary School, Dasana Ki Bhagal, Majhera Panchayat, Kelwara Zone, Kumbhalgarh Block, Rajsamand, Rajasthan - 313321 19. Government Primary School, Beed Ki Bhagal, Gawar Panchayat, Kelwara Zone, Kumbhalgarh Block, Rajsamand, Rajasthan - 313333 Amount of Details of the entity or public authority CSR spent for or beneficiary under whose name such creation or capital asset is registered, their address acquisition of etc. capital asset (in) 21st September 2021 to 24th March 2022 22 21 Statutory Financial Reports Statements PS - Nandigram, Purba Medinipur, West Bengal - 721650 LARSEN & TOUBRO 10. Government Upper Primary School, Village- Gandhigram-1, Deoli, Tonk, Rajasthan - 304804 9. Amritnagar High School, Amritnagar, Hazaribagh, Jharkhand - 825301 7. Head Teacher, Mangalchak Primary School, PO - Terapekhia, Nandigram, Purba Medinipur, West Bengal - 721656 8. Khodhambari Union B.P.H.S School, Khodhambari, Nandigram Block - 2, PS- Nandigram, Purba Medinipur, West Bengal - 721650 6. Daijmahul Primary School, Karamdihi, Sundargarh, Odisha - 770002 5. Head Master, Darlimunda High School, At PO Darlimunda, Nuapada, Odisha - 766105 4. Bidyabhar Satrujit Bidyapitha, Sagar, Cuttack, Odisha - 754037 3. Shree Jagannath High School, Sagada, Boudh, Odisha - 762016 10,475,189 1. Government U.P. School, Dangariguda, Koksara, Kalahandi, Odisha - 766017 2. M. L. High School, Attabira, Lakhnapur, Jharsuguda, Odisha - 768027 (in ) Amount of Details of the entity or public authority CSR spent for or beneficiary under whose name such creation or capital asset is registered, their address acquisition of etc. capital asset 30th October 2021 to 19th January 2022 creation or acquisition of the capital asset(s) 20 No. Date of Sr 344 11. Principal, Government Kasturba Ghandhi Girls Residential School, Chhoti Sarwa, Kushalgarh pkg-1, Rajasthan - 327602 12. Principal, Government Higher Secondary School, Dungra Bada, Sajjangarh pkg-2, Rajasthan -327604 9. Amritnagar High School, Amritnagar, Hazaribagh, Jharkhand - 825301 13. Principal, Government Secondary School, Potaliya Bada, Kushalgarh pkg-3, Rajasthan 327801 15. Government M. S. Hatkapura School, Ashoknagar, Rajghat, 8. Khodhambari Union B.P.H.S School, Khodhambari, Nandigram Block - 2, PO - Terapekhia, Nandigram, Purba Medinipur, West Bengal - 721656 7. Mangalchak Primary School, 6. Daijmahul Primary School, Karamdihi, Sundargarh, Odisha - 770002 5. Darlimunda High School, At PO Darlimunda, Nuapada, Odisha - 766105 4. Bidyabhar Satrujit Bidyapitha, Sagar, Cuttack, Odisha - 754037 3. Shree Jagannath High School, Sagada, Boudh, Odisha - 762016 1. Government U.P. School, Dangariguda, Koksara, Kalahandi, Odisha - 766017 2. M. L. High School, Attabira, Lakhnapur, Jharsuguda, Odisha - 768027 Address Toilet blocks Asset Name Details of the capital asset(s) created or acquired (including complete address and location of the capital asset) 18. Upper Primary School, Aret Ki Bhagal, Gawar Panchayat, Kelwara Zone, Kumbhalgarh Block, Rajsamand, Rajasthan - 313325 Karnataka 500016. 17. Government Urdu Higher Primary School, Veerabhadra Nagar, Belagavi, 16. Government Girls Senior Secondary School, NIT 3, Faridabad, Haryana-121001 Madhya Pradesh - 473446 14. Rajkiya Madhyamik Vidyalaya, Krishna Nagar (Village Kishanpura), RIICO Road, Bharatpur, Rajasthan - 321001 6. L&T Health and Dialysis Centre, Smith Park Apartment, Near Yogiraj Complex, Adajan Road, Surat, Gujarat - 395009 18 Mumbai, Maharashtra - 400072 -431107) (Residents of Village - Antarwali Khandi, Paithan, Aurangabad, Maharashtra Vaijinath Namdev Doifode. Doifode, Laxman Ravsaheb Hande and Sarjerav Dighule, Sanjay Keshavrav Jadhav, Dwarakabai Baburav Parande, Bhaurav Kakasaheb Hande, Ankush Murlidhar 3. Kishor Shivaji Doifode, Raju Bhaurav Channe, Bhagwan Bhaurao Channe, Pralhad Baburao Shirase, Bhagubai Pandurang Auti, Sanjivani Bapurav Pokharkar, Subhash Jadhav, Kishor (Residents of Chambharwadi, Ambad Block, Jalna, Maharashtra - 431204) Asset Name 2. Jagannath Kondiba Gund, Tukaram Asruji Dukre, Gafur Shaikh Biban and Shaikh Matin Gafur Shaikh. 862,812 1. Rasul Chandkha Pathan, Sajed Babukha Pathan, Saber Babukha Pathan, Subhankha Mahebubkha Pathan, Moshinali Muktar Pathan, Taher Subhan Pathan, Abu Bakar Makbul Pathan, Fakir Imam Shaikh, Altaf Ayyubkha Pathan, Ramdas Janappa Jadhav, Shahenshaha Mohamad Sharif Shaikh, Abdul Wahed Nuruddin Shaikh, Daniyal Sudnyan Nirmal, Javed Subhan Pathan, Nisar Nijam Pathan and Khalil Yasin Pathan. 49. Amalsadi Aashram Shala, Amalsadi, Palsana, Surat, Gujarat - 394350 48. Puni Aashramshala, Puni, Palsana, Surat, Gujarat - 394352 45. Mor Tunda Primary School, Mor Tunda Village, Olpad, Surat, Gujarat - 394530 46. Sarvodaya Vidhyalaya, Segvachama, Olpad, Surat, Gujarat - 395009 47. Timba Aashramshala, Timba, Chhaprabhatha Road, Tadwadi, Surat, Gujarat - 394520 44. Damka Primary School, Damka, Hazira Road, Choryashi, Surat, Gujarat - 394517 Near Gram Panchayat, Choryashi, Surat, Gujarat - 394510 43. Mora Primary School, Mora Village, (Residents of Nagzari, Ambad Block, Jalna, Maharashtra 431204) Farm Pond Address 42. Ambetha Primary School, Ambhetha, Olpad, Surat, Gujarat - 395005 43. Mora Primary School, Mora Village, Near Gram Panchayat, Choryashi, Surat, Gujarat 394510 creation or acquisition of the capital asset(s) No. Date of Sr Annexure to the Board Report Integrated Annual Report 2021-22 343 3. Village Antarwali Khandi, Paithan, Aurangabad, Maharashtra - 431107 - 2. Chambharwadi, Ambad Block, Jalna, Maharashtra 431204 1. Nagzari, Ambad Block, Jalna, Maharashtra 431204 49. Amalsadi Aashram Shala, Amalsadi, Palsana, Surat, Gujarat - 394350 - Surat, Gujarat 394352 48. Puni Aashramshala, Puni, Palsana, 45. Mor Tunda Primary School, Mor Tunda Village, Olpad, Surat, Gujarat - 394530 46. Sarvodaya Vidhyalaya, Segvachama, Olpad, Surat, Gujarat - 395009 47. Timba Aashramshala, Timba, Chhaprabhatha Road, Tadwadi, Surat, Gujarat - 394520 44. Damka Primary School, Damka, Hazira Road, Choryashi, Surat, Gujarat - 394517 42. Ambetha Primary School, Ambhetha, Olpad, Surat, Gujarat - 395005 March 2022 2022 to 11th 25th January 3. Laboratory Software, American Power Conversion, Desktops 4. Phaco handpiece slim, Hospital Bed, Geyser, VATECH VR Sensor, Oxygen gas pipeline, Operating table, Auto Keratometer, Fundas Cameras, civil work of dismantling, cutting and removing of existing door, Brio Combination therapy unit and therapy Cart, Physiotherapy Equipment, Ventilator and Autoclave 5. Force Traveller 6. Fumigation machine, laptop, finger print scanner, LED TV, wireless router, chairs, sonography machine and water tank Address 4. Village Dabhrul, Paithan, Aurangabad, Maharashtra - 431107 - 5. Village Devgaon Tanda, Paithan, Aurangabad, Maharashtra - 431107 Grampanchayat, Devgaon, Paithan, Aurangabad, Maharashtra - 431107 1. L&T Health & Dialysis Centre, First Floor,TAM House, Tower B, Near Chhani Jakatnaka, Nava Yard Road, Vadodara, Gujarat - 390002 7. Office of the Head master, Government Sr. Primary School, Nokhadaiya, Kolayat, Bikaner, Rajasthan - 334001 23rd February 2022 to 16th 2. L&T Coimbatore Health Centre, No. 1/160 B, Eachanari - Chettipalayam Road, Seerapalayam Pudur, Coimbatore, Tamil Nadu - 641021 3. L&T ART Centre, 1st Floor, Koldongri Municipal Dispensary, Opposite Garware, Sahar Road, Andheri East, Mumbai, Maharashtra - 400069 4. Nirali | A M Naik Charitable Health-Care Facility, Saki Vihar Road, Opposite Tunga Village Bus Stop, Powai, 2. ECG Machine 5. Samparc Malvali Centre, Near Malvali Railway Station, Maval, Pune, Maharashtra 410405 1. Air cooler, Digital Radiography and Endo Mate TC2, Heart Start Onsite Asset Name 17 Details of the capital asset(s) created or acquired (including complete address and location of the capital asset) LARSEN & TOUBRO Amount of Details of the entity or public authority CSR spent for or beneficiary under whose name such creation or capital asset is registered, their address acquisition of etc. capital asset (in) creation or acquisition of the capital asset(s) No. Date of March 2022 19 21st April 2021 to 15th March 2022 Amount of Details of the entity or public authority CSR spent for or beneficiary under whose name such creation or capital asset is registered, their address acquisition of etc. capital asset (in) 4. Mirabai Ramesh Chavan, Tarabai Gorakh Chavan, Gautam Sandu Vahule, Shriram Hari Chavan and Gorakh Hari Chavan (Residents of Village - Dabhrul, Paithan, Aurangabad, Maharashtra - 431107) 5. Rohidas Balu Rathod, Village - Devgaon Tanda, Paithan, Aurangabad, Maharashtra -431107 1,358,273 Grampanchayat, Devgaon, Paithan, Aurangabad, Maharashtra - 431107 7,538,914 Larsen & Toubro Public Charitable Trust, Landmark A, 1st Floor, Suren Road, Opposite PVR Cinemas, Near Western Express Highway (WEH) Metro Station, Andheri East, Mumbai, Maharashtra 400093 Details of the capital asset(s) created or acquired (including complete address and location of the capital asset) Check Dam 8. Government Nodal Upper Primary School, Bishipada, Block - Ulunda, Subaranapur, Odisha 767062 2. Chasole High School, Chasole, Murbad, Thane, Maharashtra Details of the capital asset(s) created or acquired (including complete address and location of the capital asset) Borewell and water tank 1. Krushi Tantra Vidyalaya, Vare, Karjat, Maharashtra Sr 2. Chasole High School, Chasole, Murbad, Thane, Maharashtra Zilha Parishad School, Ajnup, Shahapur, Thane, Maharashtra Construction of shed 27 200,000 1. Krushi Tantra Vidyalaya, Vare, Karjat, Maharashtra 7th March 2022 Water tank 28 7th March 2022 604,000 Swami Vivekanand Adivasi Madhyamik Ashram School, Chindhyachi Wadi, Post Vashala, Shahapur, Thane, Maharashtra 29 29 60,000 Zilha Parishad School, Ajnup, Shahapur, Thane, Maharashtra 7th March 2022 26 46 Annexure to the Board Report Sr Date of creation or acquisition of the capital asset(s) 24 11th November 2021 Amount of Details of the entity or public authority CSR spent for or beneficiary under whose name such creation or capital asset is registered, their address acquisition of etc. capital asset (in) 167,000 Purva Madyamik Vidyalay, Bolthakaram, Amarwar, Duddhi, Sonbhadra, Uttar Pradesh Details of the capital asset(s) created or acquired (including complete address and location of the capital asset) Asset Name Address Solar panel with battery Purva Madyamik Vidyalay, Bolthakaram, Amarwar, Duddhi, Sonbhadra, Uttar Pradesh Toilet blocks and desks Government Middle School, Harnichak, Beur, Anishabad, Patna, Bihar - 800002 25 20th January 2022 879,997 District Education Officer, Patna, Koiritola, Rajendra Nagar, Near Moinul Haq Stadium Patna, Bihar 800004 29th November 2021 to 12th March 2022 35,620 1. Government Primary School, Mandiakudar 1. Almirah Sundargarh, Odisha 2. Table and chairs tank and solar pumping system Swami Vivekanand Adivasi Madhyamik Ashram School, Chindhyachi Wadi, Post Vashala, Shahapur, Thane, Maharashtra 1. Government Primary School, Mandiakudar, Sundargarh, Odisha 2. (a) Government UP School, Badnuagaon, Sundargarh, Odisha (b) Government Primary School, Kadambahal, PO - Kansbahal, Sundargarh, Odisha 1. Upper Primary School, Dasana Ki Bhagal, Majhera Panchayat, Kelwara Zone, Kumbhalgarh Block, Rajsamand, Rajasthan - 313321 2. (a) Government Primary School, Rodh Ka Guda, Sukhar Panchayat, Antaliya Zone, Kumbhalgarh Block, Rajsamand, Rajasthan - 313333 (b) Government Primary School, Shobhawato Ki Bhagal, Gram Panchayat Antaliya, Kumbhalgarh Block, Rajsamand, Rajasthan 313334 1. Upper Primary School, Aret Ki Bhagal, Gawar Panchayat, Kelwara Zone, Kumbhalgarh Block, Rajsamand, Rajasthan 313325 - 2. Government Primary School, Beed Ki Bhagal, Gawar Panchayat, Kelwara Zone, Kumbhalgarh Block, Rajsamand, Rajasthan 313333 3. Upper Primary School, Aret Ki Bhagal, Majhera Panchayat, Kelwara Zone, Kumbhalgarh Block, Rajsamand, Rajasthan 313325 - 348 Tube well, water storage Integrated Annual Report 2021-22 2. Resource room with furniture Majhera Panchayat, Kelwara Zone, Kumbhalgarh Block, Rajsamand, Rajasthan 313325 30 30 10th March 2022 31 10th March 2022 2. (a) Government UP School, Badnuagaon, Sundargarh, Odisha (b) Government Primary School, Kadambahal, PO - Kansbahal, Sundargarh, Odisha 2,952,381 1. Upper Primary School, Dasana Ki Bhagal, Majhera Panchayat, Kelwara Zone, Kumbhalgarh Block, Rajsamand, Rajasthan - 313321 2. (a) Government Primary School, Rodh Ka Guda, Sukhar Panchayat, Antaliya Zone, Kumbhalgarh Block, Rajsamand, Rajasthan 313333 (b) Government Primary School, Shobhawato Ki Bhagal, Gram Panchayat Antaliya, Kumbhalgarh Block, Rajsamand, Rajasthan - 313334 3,886,504 1. Upper Primary School, Aret Ki Bhagal, Gawar Panchayat, Kelwara Zone, Kumbhalgarh Block, Rajsamand, Rajasthan - 313325 2. Government Primary School, Beed Ki Bhagal, Gawar Panchayat, Kelwara Zone, Kumbhalgarh Block, Rajsamand, Rajasthan 313333 3. Upper Primary School, Aret Ki Bhagal, 1. Resource room with furniture and projector screens 347 5. Bhikusa High school, Sinnar, Nasik, Maharashtra - 422103 7, Kh No. 240, B - Block, Inder Enclave, Near Nitari Pulia, Kirari Suleman Nagar, Delhi - 110086 9. Government N.U.P. School, Dhanghara, Tusura, Balangir, Odisha - 767030 346 Corporate Overview Management Discussion and Analysis Integrated Statutory Financial Report Reports Statements LARSEN & TOUBRO Sr Date of No. creation or acquisition of the capital asset(s) Amount of Details of the entity or public authority CSR spent for or beneficiary under whose name such creation or capital asset is registered, their address acquisition of etc. capital asset (in) 10. Zilla Parishad High School, Neredmet, Malkajgiri Madal, Medchal, Hyderabad-500056 8. Government Nodal Upper Primary School, Bishipada, Block - Ulunda, Subaranapur, Odisha - 767062 11. Government Madhyamik School, Satanwada, Shivpuri, Madhya Pradesh - 6. Mukundapur Thakamoni High School, Durlavpur, Mejhia, Bankura, West Bengal -722133 Asset Name Desktop Benches and desks Address 19. Government Primary School, Beed Ki Bhagal, Gawar Panchayat, Kelwara Zone, Kumbhalgarh Block, Rajsamand, Rajasthan 313333 20. Upper Primary School, Dasana Ki Bhagal, Majhera Panchayat, Kelwara Zone, Kumbhalgarh Block, Rajsamand, Rajasthan 313321 21. Upper Primary School, Hatai Ki Bhagal, Gawar Panchayat, Kelwara Zone, Kumbhalgarh Block, Rajsamand, Rajasthan 313325 22. Government Primary School, Pavatiya, Thaladhari Panchayat, Kelwara Zone, Kumbhalgarh Block, Rajsamand, Rajasthan-313325 23. Upper Primary School, Rati Talai, Antaliya Panchayat, Antaliya Zone, Kumbhalgarh Block, Rajsamand, Rajasthan - 313334 24. Government Primary School, Rod Ka Guda, Sukhar Panchayat, Antaliya Zone, Kumbhalgarh Block, Rajsamand, Rajasthan 313333 - Narayanpur Primary School, PO - Ganja Narayanpur, Purba Medinipur, West Bengal - 721648 1. Benabad Junior High School, Benabad, Mejhia, Bankura, West Bengal - 722143 2. Pairasole Primary School, Pairasole, Mejhia, Bankura, West Bengal - 722143 3. Benabad Primary School, Benabad, Mejhia, Bankura, West Bengal - 722143 4. Natshala Primary School, Benabad, Bankura, West Bengal - 722143 5. Maraya Primary School, Amarkanan, Bankura, West Bengal - 722133 7. Government Sr. Primary School, Nokhadaiya, Kolayat, Bikaner, Rajasthan 334001 9. Government N.U.P. School, Dhanghara, Tusura, Balangir, Odisha - 767030 12. Government High School, Satanwada, Shivpuri, Madhya Pradesh 14. Principal of Government Sr. Secondary School Hamiri, Kalan, Jhunjhunu, Rajasthan 333001 Satanwada, Shivpuri, Madhya Pradesh 12. Government High School, Satanwada, Shivpuri, Madhya Pradesh 13. Government Primary School, Malagaon, Satwas, Dewas, Madhya Pradesh 14. Government Sr. Secondary School Hamiri, Kalan, Jhunjhunu, Rajasthan 333001 - 15. Government UP School, Kansbahal, Sundargarh, Odisha 16. Government Primary School, Bhagatpara, PO - Kansbahal, Sundargarh, Odisha 17. Government Primary School, Ranibandhtola, PO - Sagjore, Sundargarh, Odisha 18. Government Primary School, Gowalapara, PO - Kansbahal, Sundargarh, Odisha 19. Mission Primary School, Kalodihi, Sundargarh, Odisha 20. Government Upper Primary School, Kila Kumbhalgarh, Gawar Panchayat, Kelwara Zone, Kumbhalgarh Block, Rajsamand, Rajasthan - 313333 21. Mahesh Shri Ramakrishna Ashram, 40 Ramakrishna Road, PO Rishra, Hooghly, West Bengal 712248 1. Meera Girls College, Meera Marg, Opposite Hotel Meera, Madhuban, Udaipur, Rajasthan 313001 2. Village Patel para, Near Bacheli, Dantewada District, Chhattisgarh-494553 3. Government Ashram School, Rati Kasa, Surya Nagar, Vikramgarh, Palghar, Maharashtra - 401609 4. Government of NCT of Delhi, Plot No 11. Government Madhyamik School, 13. Principal, Government Primary School, Malagaon, Satwas, Dewas, Madhya Pradesh 10. Zilla Parishad High School, Neredmet, Malkajgiri Madal, Medchal, Hyderabad-500056 Solar lights 15. Government UP School, Kansbahal, Sundargarh, Odisha 16. Government Primary School, Bhagatpara, PO Kansbahal, Sundargarh, Odisha 17. Government Primary School, Ranibandhtola, PO - Sagjore, Sundargarh, Odisha 18. Government Primary School, Gowalapara, PO - Kansbahal, Sundargarh, Odisha 19. Mission Primary School, Kalodihi, Sundargarh, Odisha 20. Government Upper Primary School, Kila Kumbhalgarh, Gawar Panchayat, Kelwara Zone, Kumbhalgarh Block, Rajsamand, Rajasthan 313333 21. The Secretary, Mahesh Shri Ramakrishna Ashram, 40 Ramakrishna Road, PO Rishra, Hooghly, West Bengal - 712248 23 16th September 2021 1,149,486 1. Principal, Meera Girls College, Meera Marg, Opposite Hotel Meera, Madhuban, Udaipur, Rajasthan - 313001 2. Surpunch of Village Patelpara, Near Bacheli, Dantewada District, Chhattisgarh - 494553 3. Government Ashram School, Rati Kasa, Surya Nagar, Vikramgarh, Palghar, Maharashtra - 401609 4. Government of NCT of Delhi, Plot No 7, Kh No. 240, B Block, Inder Enclave, Near Nitari Pulia, Kirari Suleman Nagar, Delhi 110086 5. Bhikusa High school, Sinnar, Nasik, Maharashtra - 422103 Details of the capital asset(s) created or acquired (including complete address and location of the capital asset) Asset Name Address Statements No. Report 19. Amalsadi Aashram Shala, Amalsadi, Palsana, Surat, Gujarat - 394350 18. Puni Aashramshala, Puni, Palsana, Surat, Gujarat - 394352 Chhaprabhatha Road, Tadwadi, Surat, Gujarat - 394520 17. Timba Aashramshala, Timba, 16. Vaghecha Ashram Shala, Vaghecha, Near Shiv Mandir, Vaghecha Kadod, Bardoli, Surat, Gujarat 394355 15. L. D. High School, Patelnagar, Plot No. 9, Station Road, Raj Nagar, Sachin, Surat, Gujarat - 394230 14. MSV, Olpad, Karanj Road, Surat, Gujarat - 394540 13. MRC High School, Dihen, Olpad, Surat, Gujarat - 395005 12. Dandi Road, Lavachha, Olpad, Surat, Gujarat - 394540 11. Sarvodaya Vidhyalaya, Segvachama, Olpad, Surat, Gujarat - 395009 10. Sharda Vidhyalaya, Irchhapor, Second Bus Stop, Choryasi, Surat, Gujarat - 394510 9. Navchetan Vidhyalay, Junagam, Suvali, Choryasi, Surat, Gujarat - 394510 8. Tena ni Rang Primary School, Tena ni Rang, Olpad, Surat, Gujarat - 395005 20. Gandhighar, Kaccholi, Amalsad, Gandevi, Navsari, Gujarat 396370 7. Dhansher Primary School, Dhanser, Olpad, Surat, Gujarat 395005 creation or acquisition of the capital asset(s) No. Date of Sr Annexure to the Board Report Integrated Annual Report 2021-22 339 6. Mor Tunda Primary School, Mor Tunda Village, Olpad, Surat, Gujarat - 394530 5. Kudiyana Primary School, Kudiyana Village, Olpad, Surat, Gujarat - 394540 Gujarat - 394517 4. Damka Primary School, Damka, Hazira Road, Choryashi, Surat, 3. Mora Primary School, Mora Village, Near Gram Panchayat, Choryashi, Surat, Gujarat 394510 - Amount of Details of the entity or public authority CSR spent for or beneficiary under whose name such creation or capital asset is registered, their address acquisition of etc. capital asset (in) Surat, Gujarat 394510 21. Lok Bharti School, Opposite Terapanth Bhavan, Inside Ashok Pan Street, City light Road, Surat, Gujarat - 395007 23. L. D. Engineering College, 120, Circular Date of Sr LARSEN & TOUBRO Statutory Financial Reports Statements Integrated Report Discussion and Analysis Management Corporate Overview 340 23. L. D. Engineering College, 120, Circular Road, University Area, Ahmedabad, Gujarat - 380015 22. Government Girls School, Pali, Nana, Rajasthan Gandevi, Navsari, Gujarat - 396370 21. Lok Bharti School, Opposite Terapanth Bhavan, Inside Ashok Pan Street, City light Road, Surat, Gujarat - 395007 20. Gandhighar, Kaccholi, Amalsad, 22. Government Girls School, Pali, Nana, Rajasthan 19. Amalsadi Aashram Shala, Amalsadi, Palsana, Surat, Gujarat - 394350 17. Timba Aashramshala, Timba, Chhaprabhatha Road, Tadwadi, Surat, Gujarat - 394520 16. Vaghecha Ashram Shala, Vaghecha, Near Shiv Mandir, Vaghecha Kadod, Bardoli, Surat, Gujarat - 394355 - 15. L. D. High School, Patelnagar, Plot No. 9, Station Road, Raj Nagar, Sachin, Surat, Gujarat 394230 14. MSV, Olpad, Karanj Road, Surat, Gujarat - 394540 13. MRC High School, Dihen, Olpad, Surat, Gujarat - 395005 11. Sarvodaya Vidhyalaya, Segvachama, Olpad, Surat, Gujarat - 395009 12. Dandi Road, Lavachha, Olpad, Surat, Gujarat - 394540 9. Navchetan Vidhyalay, Junagam, Suvali, Choryasi, Surat, Gujarat - 394510 10. Sharda Vidhyalaya, Irchhapor, Second Bus Stop, Choryasi, Surat, Gujarat - 394510 7. Dhansher Primary School, Dhanser, Olpad, Surat, Gujarat - 395005 8. Tena ni Rang Primary School, Tena ni Rang, Olpad, Surat, Gujarat - 395005 Address Asset Name Details of the capital asset(s) created or acquired (including complete address and location of the capital asset) Road, University Area, Ahmedabad, Gujarat - 380015 18. Puni Aashramshala, Puni, Palsana, Surat, Gujarat 394352 Near Gram Panchayat, Choryashi, 2. Mayur Dhwaj Vidhaylaya, Mora Village, Olpad, Surat, Gujarat - 395005 10. Aashram Shala Tejlav, Tejlav, Chikhli, Navsari, Gujarat-396521 9. Aashram Shala Ajarai, Ajarai, Gandevi, Navsari, Gujarat - 396360 Gujarat - 394540 Near Government ITI, Surat, 7. Sharda Vidyalaya Ichhapore, Near 2nd Bus Stop, Hazira Road, Ichhapore, Surat, Gujarat - 394510 Gujarat - 394540 6. J. R. Patel Takarama High School, Takarama, Olpad, Surat, 5. Mor High School, Mor, Olpad, Surat, Gujarat - 394530 4. Gyandeep Vidhyalaya, Abhwa, Surat, Gujarat - 395007 3. Navjivan Vidhyalaya, Karanj, Olpad, Surat, Gujarat - 394530 2. Sanskar Bharti Vidhyalaya Bhadol, Bhadol, Olpad, Surat, Gujarat - 394540 6,490,645 1. L. D. High School, Patelnagar, Plot No. 9, Station Road, Raj Nagar, Sachin, Surat, Gujarat - 394230 Amount of Details of the entity or public authority CSR spent for or beneficiary under whose name such creation or capital asset is registered, their address acquisition of etc. capital asset (in ) 11. Aashram Shala Kalai, Kalai, Umergam, Valsad, Gujarat 396105 to 14th February 2022 15 17th February 2022 to 19th March 2022 creation or acquisition of the capital asset(s) 14 No. Date of Sr LARSEN & TOUBRO Statutory Financial Reports Statements Integrated Report Discussion and Analysis Management Corporate Overview 29th June 2021 12. Aashram Shala Karambela, Karambela, Umergam, Valsad, Gujarat - 396105 13. Aashram Shala Sonvada, Fakira Faliya via Dungri, Sonvada, Valsad, Gujarat - 396375 10,000,000 1. Ambetha Primary School, Ambhetha, Olpad, Surat, Gujarat - 395005 Digital System Interactive Flat Panel (IFP) 1. Ambetha Primary School, Ambhetha, 13. Aashram Shala Sonvada, Fakira Faliya via Dungri, Sonvada, Valsad, Gujarat - 396375 12. Aashram Shala Karambela, Karambela, Umergam, Valsad, Gujarat - 396105 11. Aashram Shala Kalai, Kalai, Umergam, Valsad, Gujarat 396105 10. Aashram Shala Tejlav, Tejlav, Chikhli, Navsari, Gujarat 396521 9. Aashram Shala Ajarai, Ajarai, Gandevi, Navsari, Gujarat - 396360 Gujarat - 394540 Olpad, Hathisa, Block No. 233, Near Government ITI, Surat, 8. Arts and Commerce College, 7. Sharda Vidyalaya Ichhapore, Near 2nd Bus Stop, Hazira Road, Ichhapore, Surat, Gujarat 394510 6. J. R. Patel Takarama High School, Takarama, Olpad, Surat, Gujarat - 394540 5. Mor High School, Mor, Olpad, Surat, Gujarat - 394530 4. Gyandeep Vidhyalaya, Abhwa, Surat, Gujarat - 395007 3. Navjivan Vidhyalaya, Karanj, Olpad, Surat, Gujarat 394530 Bhadol, Olpad, Surat, Gujarat - 394540 2. Sanskar Bharti Vidhyalaya Bhadol, Surat, Gujarat 394230 1. L. D. High School, Patelnagar, Plot No. 9, Station Road, Raj Nagar, Sachin, Address Solar Power Generation Systems Asset Name Details of the capital asset(s) created or acquired (including complete address and location of the capital asset) 6. Mor Tunda Primary School, Mor Tunda Village, Olpad, Surat, Gujarat - 394530 5. Kudiyana Primary School, Kudiyana Village, Olpad, Surat, Gujarat - 394540 4. Damka Primary School, Damka, Hazira Road, Choryashi, Surat, Gujarat - 394517 Near Gram Panchayat, Choryashi, Surat, Gujarat - 394510 3. Mora Primary School, Mora Village, 2. Mayur Dhwaj Vidhaylaya, Mora Village, Near Gram Panchayat, Choryashi, Surat, Gujarat - 394510 No. 16 8. Arts and Commerce College, Olpad, Hathisa, Block No. 233, 26th August 2021 to 7th Address Asset Name Details of the capital asset(s) created or acquired (including complete address and location of the capital asset) Choryashi, Surat, Gujarat - 394355 41. Kharvasa Asharam Shala, Kharvasa, 40. Godadhara High School, Godadhra, Surat, Gujarat - 395012 Gujarat - 396020 39. PKD Vidhyalaya, Atar, Valsad, Gujarat - 394355 38. The Varad Sarvjanik High School, Rayam, Bardoli, Surat, 37. Karamla Primary School, Karamla, Olpad, Surat, Gujarat 394130 36. Mandroi Primary School, Mandroi, Olpad, Surat, Gujarat 394540 35. Bhatgam Primary School, Bhatgam,Olpad, Surat, Gujarat 394540 21. Shree A.V.T Saraswati Vidhyalaya, 34. Junagam Primary School, Junagam, Hazira Road, Choryashi, Surat, Gujarat - 394510 32. Asharam Shala, Village - Limdha, Mandvi, Surat, Gujarat 394440 31. Asharam Shala, Village - Makanjar, Mandvi, Surat, Gujarat - 394160 30. Asharam Shala, Village - Sathvav, Mandvi, Surat, Gujarat 394160 Gujarat - 394445 29. Asharam Shala, Village - Bilvan, Umarpada, Mandvi, Surat, 28. Gandhighar, Kaccholi, Amalsad, Gandevi, Navsari, Gujarat- 396370 27. Pariya High School, Pardi, Udwada, Valsad, Gujarat 396180 26. Lok Bharti School, Opposite Terapanth Bhavan, Inside Ashok Pan Street, City light Road, Surat, Gujarat - 395007 25. Mayur Dhwaj Vidhaylaya, Mora Village, Near Gram Panchayat, Choryashi, Surat, Gujarat - 394510 24. Kudiyana Primary School, Kudiyana Village, Kudiyana, Olpad, Surat, Gujarat - 394540 Gujarat - 394540 23. Talad High School, Olpad, Surat, Surat, Gujarat 394517 33. Mor High School, Village - Mor, Olpad, Surat, Gujarat 394530 Vadadla, Aerthan Village, Palsana, Surat, Gujarat 394317 - creation or acquisition of the capital asset(s) Discussion and Analysis Statutory Financial Integrated Management Corporate Overview 342 Choryashi, Surat, Gujarat - 394355 41. Kharvasa Asharam Shala, Kharvasa, - 40. Godadhara High School, Godadhra, Surat, Gujarat 395012 39. PKD Vidhyalaya, Atar, Valsad, Gujarat - 396020 38. The Varad Sarvjanik High School, Rayam, Bardoli, Surat, Gujarat - 394355 35. Bhatgam Primary School, Bhatgam, Olpad, Surat, Gujarat - 394540 36. Mandroi Primary School, Mandroi, Olpad, Surat, Gujarat - 394540 37. Karamla Primary School, Karamla, Olpad, Surat, Gujarat - 394130 34. Junagam Primary School, Junagam, Hazira Road, Choryashi, Surat, Gujarat - 394510 - 33. Mor High School, Village - Mor, Olpad, Surat, Gujarat 394530 32. Asharam Shala, Village - Limdha, Mandvi, Surat, Gujarat - 394440 31. Asharam Shala, Village - Makanjar, Mandvi, Surat, Gujarat - 394160 30. Asharam Shala, Village - Sathvav, Mandvi, Surat, Gujarat - 394160 Gandevi, Navsari, Gujarat- 396370 29. Asharam Shala, Village - Bilvan, Umarpada, Mandvi, Surat, Gujarat - 394445 28. Gandhighar, Kaccholi, Amalsad, 26. Lok Bharti School, Opposite Terapanth Bhavan, Inside Ashok Pan Street, City light Road, Surat, Gujarat - 395007 27. Pariya High School, Pardi, Udwada, Valsad, Gujarat 396180 - 25. Mayur Dhwaj Vidhaylaya, Mora Village, Near Gram Panchayat, Choryashi, Surat, Gujarat 394510 24. Kudiyana Primary School, Kudiyana Village, Kudiyana, Olpad, Surat, Gujarat - 394540 Gujarat - 394540 Choryashi, Surat, Gujarat - 394517 23. Talad High School, Olpad, Surat, 22. Suvali Primary School, Suvali, 22. Suvali Primary School, Suvali, Choryashi, 21. Shree A.V.T Saraswati Vidhyalaya, Vadadla, Aerthan Village, Palsana, Surat, Gujarat - 394317 Reports creation or acquisition of the capital asset(s) 16. L. D. High School, Patelnagar, Plot No. 9, Station Road, Raj Nagar, Sachin, Surat, Gujarat - 394230 Vidhyasankul, Shivani Park, Althan, Surat, Gujarat - 395017 15. Shree Dayalji Kasanji Bhatarkar 14. Jawahar Vidhyalyay, Saniya Kande, Choryashi, Surat, Gujarat - 394210 13. Sondha Meetha Aashramshala, Sonda Meetha, Olpad, Surat, Gujarat - 394540 12. Barbodhan Primary School, Barbodhan, Olpad, Surat, Gujarat - 395005 11. MRC High School, Dihen, Olpad, Surat, Gujarat - 395005 10. Sanskar Bharti Vidhyalaya, Village - Bhadol, Olpad, Surat, Gujarat - 394530 9. Asnaad High School, Asnaad, Olpad, Surat, Gujarat 394540 8. Lavachha Primary School, Lavaccha Village, Dandi Road, Olpad, Surat, Gujarat - 394540 7. Bhandut Primary School, Bhandut, Olpad, Surat, Gujarat 395005 6. Tena ni Rang Primary School, Tena ni Rang, Olpad, Surat, Gujarat - 395005 5. Dhansher Primary School, Dhanser, Olpad, Surat, Gujarat - 395005 17. Nav Chetan Vidhyalaya, Junagam, Hazira Road, Choryashi, Surat, Gujarat - 394510 4. Sharda Vidyalaya Ichhapore, Near 2nd Bus Stop, Hazira Road, Ichhapore, Surat, Gujarat - 394510 Surat, Gujarat 394355 Shiv Mandir, Vaghecha Kadod, Bardoli, 3. Vaghecha Ashram Shala, Vaghecha, Near Gujarat - 394540 2. Z.M. Patel High school, Lavaccha Village, Mediapro Dandi Road, Olpad, Surat, Education Software Asset Name Details of the capital asset(s) created or acquired (including complete address and location of the capital asset) 4,059,746 1. MSV, Olpad, Karanj Road, Olpad, Surat, Gujarat - 394540 (in ) Amount of Details of the entity or public authority CSR spent for or beneficiary under whose name such creation or capital asset is registered, their address acquisition of etc. capital asset Amount of Details of the entity or public authority CSR spent for or beneficiary under whose name such creation or capital asset is registered, their address acquisition of etc. capital asset (in) March 2022 - 18. R N Naik High School, Udhna, 214, Ranchod Nagar, Opposite City Shopping Centre, Udhna, Surat, Gujarat - 934210 - Mynet School by 20. Shree Shidhh Shomeswar Vidhyalay, Date of 19. Shree JR Patel Takarma Vibhag Madhyamik Shala, Takaram, Olpad, Surat, Gujarat - 394540 No. Sr Annexure to the Board Report Integrated Annual Report 2021-22 20. Shree Shidhh Shomeswar Vidhyalay, Saras, Olpad, Surat, Gujarat - 394540 19. Shree JR Patel Takarma Vibhag Madhyamik Shala, Takaram, Olpad, Surat, Gujarat 394540 18. R N Naik High School, Udhna, 214, Ranchod Nagar, Opposite City Shopping Centre, Udhna, Surat, Gujarat - 934210 17. Nav Chetan Vidhyalaya, Junagam, Hazira Road, Choryashi, Surat, Gujarat - 394510 16. L. D. High School, Patelnagar, Plot No. 9, Station Road, Raj Nagar, Sachin, Surat, Gujarat 394230 - 15. Shree Dayalji Kasanji Bhatarkar Vidhyasankul, Shivani Park, Althan, Surat, Gujarat 395017 14. Jawahar Vidhyalyay, Saniya Kande, Choryashi, Surat, Gujarat - 394210 12. Barbodhan Primary School, Barbodhan, Olpad, Surat, Gujarat - 395005 13. Sondha Meetha Aashramshala, Sonda Meetha, Olpad, Surat, Gujarat - 394540 341 10. Sanskar Bharti Vidhyalaya, Village - 1. MSV, Olpad, Karanj Road, Olpad, Surat, Gujarat - 394540 Bhadol, Olpad, Surat, Gujarat - 394530 11. MRC High School, Dihen, Olpad, Surat, Gujarat - 395005 2. Z.M. Patel High school, Lavaccha Village, Dandi Road, Olpad, Surat, Gujarat - 394540 3. Vaghecha Ashram Shala, Vaghecha, Near Shiv Mandir, Vaghecha Kadod, Bardoli, Surat, Gujarat - 394355 Saras, Olpad, Surat, Gujarat - 394540 4. Sharda Vidyalaya Ichhapore, Near 2nd Bus Stop, Hazira Road, Ichhapore, Surat, Gujarat 394510 Address 5. Dhansher Primary School, Dhanser, Olpad, Surat, Gujarat - 395005 6. Tena ni Rang Primary School, Tena ni Rang, Olpad, Surat, Gujarat - 395005 7. Bhandut Primary School, Bhandut, Olpad, Surat, Gujarat - 395005 8. Lavachha Primary School, Lavaccha Village, Dandi Road, Olpad, Surat, Gujarat - 394540 9. Asnaad High School, Asnaad, Olpad, Surat, Gujarat 394540 - - 108.32% 129.40 11.19 Whole-time Director & Mr. M. V. Satish (Development Projects) Sr. Executive Vice President 137.77% 122.34 116.38% Whole-time Director & Mr. D. K. Sen Financial Officer 313.00 28.62 Whole-time Director & Chief Mr. R. Shankar Raman 1.85% 115.00% Sr. Executive Vice President Managing Director 11.83 (Buildings) Mr. S. V. Desai Whole-time Director & 134.55 670.02 12.30 Whole-time Director & Mr. T. Madhava Das Infrastructure) Sr. Executive Vice President (Civil 261.47% @ 137.19 12.55 Whole-time Director & (Energy) Sr. Executive Vice President 105.99% @ 256.68 23.47 Whole-time Director & Mr. Subramanian Sarma (Defence & Smart Technologies) Sr. Executive Vice President 106.13% 120.81 11.05 Mr. J. D. Patil 61.27 29th November 2021 Mr. S. N. Subrahmanyan 236.34% @ 51 635803 12. No. 86, Rajakuppam, Rajamandripatti, Periya Paravakkal, Gudiyatham, Tamil Nadu 11. Pogalur, Gudiyatham, Tamil Nadu - 635813 10. No. 66/21, Pananthoppu Colony, Rajakuppam (PO), Paravakkal, Gudiyatham, Tamil Nadu - 635803 9. No. 29/15A, B N Palayam, Settikuppam, Gudiyatham, Tamil Nadu - 635803 8. No. 21/1, Mel Theru, Mel Settikuppam, Gudiyatham, Tamil Nadu - 635803 7. No. 1/135, Rajakuppam (PO), Periya Paravakkal, Paravakkal, Gudiyatham, Tamil Nadu 635803 6. No. 2/66, Pananthoppu Colony, Rajakuppam (PO), Paravakkal, Gudiyatham, Tamil Nadu - 635803 21,200 Dhan Foundation, 1A Vaidyanathapuram Tamil Nadu 635803 Address Asset Name Details of the capital asset(s) created or acquired (including complete address and location of the capital asset) Tamil Nadu 635803 12. Mr. Purushothanam S/o Kannaaiya, No. 86, Rajakuppam, Rajamandripatti, Periya Paravakkal, Gudiyatham, 11. Mr. Dhanasekaran S/o Kesavan Mel Alangkuppam, Pogalur, Gudiyatham, Tamil Nadu 635813 10. Ms. Savitha W/o Sivakumar, No. 66/21, Pananthoppu Colony, Rajakuppam (PO), Paravakkal, Gudiyatham, Tamil Nadu 635803 635803 9. Ms. Dharani S/o Krishnaaiya, No. 29/15A, BN Palayam, Settikuppam, Gudiyatham, Tamil Nadu 8. Mr. Harish S/o Govindharaj No. 21/1, Mel Theru, Mel Settikuppam, Gudiyatham, Tamil Nadu 635803 5. Rajamandripatti, Dasmandripatti, Paravakkal, Gudiyatham, East, Kennet Cross Road, Madurai, Tamil Nadu - 625016 352 CANON MF 241 LASER PRINTER 69.11 6.32 Group Chairman Mr. A. M. Naik increase in Remuneration Percentage Ratio (times) of remuneration of director to the median remuneration * Remuneration Name of the Director/KMP Designation Total crore Ratio of the remuneration of each Director to the median remuneration of the employees of the Company for FY 2022 and the percentage increase in remuneration of each Director and Company Secretary during FY 2022: LARSEN & TOUBRO A. Annexure 'D' to the Board Report Financial Statements Reports Statutory Integrated Report Discussion and Analysis Management Corporate Overview Dhan Foundation, 1A Vaidyanathapuram East, Kennet Cross Road, Madurai, Tamil Nadu 625016 Chief Executive Officer & Sr. Executive Vice President (Utilities) 0.47 Independent Director Integrated Statutory Report Reports Discussion and Analysis Management Corporate Overview 354 It is hereby affirmed that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees. Affirmation that the remuneration is as per the remuneration policy of the company: The average percentage increase in the salaries of employees excluding key managerial personnel for the year 2021-22 was 17.42% whereas there is an increase in the key managerial remuneration by 66.01%. The increase in managerial remuneration is due to higher eligible profits, base adjustment and full year impact of remuneration to new Whole-time Directors who joined in the year 2020-21. thereof and point out if there are any exceptional circumstances for increase in managerial remuneration E. Financial D. Average percentile increase made in the salaries of the employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification Number of permanent employees on the rolls of the Company as on 31st March 2022: The median remuneration of employees of the Company during the financial year was 9.14 lakh. In the financial year, there was an increase of 6.67% in the median remuneration of employees. B. Percentage increase in the median remuneration of all employees in FY 2022: Annexure to the Board Report Integrated Annual Report 2021-22 353 Current year remuneration includes the commission and sitting fees paid by L&T Hydrocarbon Engineering Limited. $ Impact of full year remuneration of new director/KMP appointed during FY 2020-21 @ There were 49,921 permanent employees on the rolls of Company as on 31st March 2022. Part of the remuneration has been paid to the financial institution he represents LARSEN & TOUBRO Annexure 'E' to the Board Report 7. Mr. Govindhasamy S/o Veerasamy, No. 1/135, Rajakuppam (PO), Periya Paravakkal, Paravakkal, Gudiyatham, Tamil Nadu 635803 b. a. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 ('SEBI Act'): V. iv. Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings; iii. The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder; ii. The Securities Contracts (Regulation) Act, 1956 ('SCRA') and the rules made thereunder; The Companies Act, 2013 (the Act) and the rules made thereunder; i. Statements We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31st March, 2022 according to the provisions of: 400001 L&T House, Ballard Estate, Mumbai CIN: L99999MH1946PLC004768 Larsen & Toubro Limited The Members, To, [Pursuant to Section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014] FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2022 SECRETARIAL AUDIT REPORT Form No. MR-3 We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Larsen & Toubro Limited (hereinafter called 'the Company'). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts / statutory compliances and expressing our opinion thereon. Based on our verification of the Company's books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on 31st March 2022, complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter. Mr. M. M. Chitale Λ # 0.80% 6.88 0.63 Independent Director Mr. Adil Zainulbhai 43.28% $ 6.06 0.55 Independent Director Mr. Vikram Singh Mehta Mr. Sanjeev Aga Mr. Narayanan Kumar 0.78% 0.65 Independent Director Mr. M. Damodaran 7.25 0.66 Independent Director Mr. Subodh Bhargava # (7.27%) 7.32 0.67 7.07 Ceased to be an Independent Director with effect from 29th March 2022 on completion of his term. Independent Director 5.86 Ratio of remuneration of Director to the median remuneration is calculated on pro-rata basis for those Directors who served for only part of FY 2022. * 19.39% 21.63 300.00% @ 3.41 1.98 0.31 Company Secretary Mr. Sivaram Nair A 0.54 Independent Director Corporation of India 10.10% 3.76 0.34 Nominee of Life Insurance Mr. Hemant Bhargava ^ (1.98%) 5.13 Independent Director (3.51%) Mrs. Preetha Reddy C. 30th September Amount of Details of the entity or public authority CSR spent for or beneficiary under whose name such creation or capital asset is registered, their address acquisition of etc. capital asset (in) 30th September 2021 36 1,567,576 Principal, Senior Secondary School Kookra, 30th September 2021 35 735,153 Project Officer, ICDS, Aanganwadi Jalpa, Post Kookra, Bhim, Rajsamand, Rajasthan - 305921 Amount of Details of the entity or public authority CSR spent for or beneficiary under whose name such creation or capital asset is registered, their address acquisition of etc. capital asset (in ) 2021 30th September 34 37 creation or acquisition of the capital asset(s) Date of Sr Annexure to the Board Report Integrated Annual Report 2021-22 349 Block, Rajsamand, Rajasthan - 313321 (b) Anganwadi, Nichli Bhagal, Antaliya Panchayat and Zone, Kumbhalgarh (b) Upper Primary School, Aret Ki Bhagal, Gawar Panchayat, Kelwara Zone, Kumbhalgarh Block, Rajsamand, Rajasthan - 313325 (a) Upper Primary School, Rati Talai, Antaliya Panchayat, Antaliya Zone, Kumbhalgarh Block, Rajsamand, Rajasthan -313334 Antaliya Zone, Kumbhalgarh Block, Rajsamand, Rajasthan - 313334 3. No. 2. (a) Health Sub Centre, Antaliya, 30th September 2021 30th September 2021 Details of the capital asset(s) created or acquired (including complete address and location of the capital asset) 1,577,111 Head Master, Government Upper Primary School, Kathon Ka Talab, Kookra, Bhim, Rajsamand, Rajasthan - 305921 Kashya, Kookra, Bhim, Rajsamand, Rajasthan - 305921 1,226,982 Head Master, Government Primary School - 452,365 Project Officer, ICDS, Aanganwadi - Nichla Lasadiya, Kookra, Bhim, Rajsamand, Rajasthan 305921 1,358,448 Head Master, Primary School, Dungo Ka Wala, Kookra, Bhim, Rajsamand, Rajasthan - 305921 2. Head Master, Primary School, Godarel, Kookra, Bhim, Rajsamand, Rajasthan - 305921 380,924 1. Head Master, Primary School, Jassuj Ka Kheda, Kookra, Bhim, Rajsamand, Rajasthan 305921 204,591 Head Master, Primary School, Japla, Kookra, Bhim, Rajsamand, Rajasthan - 305921 - 305921 38 1,195,585 Head Master, Upper Primary School (Girls), Kookra, Bhim, Rajsamand, Rajasthan 28th February 2022 42 28th February 2022 41 28th February 2022 40 40 2021 The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; 39 Kookra, Bhim, Rajsamand, Rajasthan - 305921 Asset Name 1. Health Sub Centre, Antaliya, Antaliya Zone, Kumbhalgarh Block, Rajsamand, Rajasthan 313334 3. Government Primary School, Pavatiya, Thaladhari Panchayat, Kelwara Zone, Kumbhalgarh Block, Rajsamand, Rajasthan 313325 Ki Bhagal, Gram Panchayat Antaliya, Kumbhalgarh Block, Rajsamand, Rajasthan 313334 6. Government Primary School, Shobhawato 5. Government Primary School, Pavatiya, Thaladhari Panchayat, Kelwara Zone, Kumbhalgarh Block, Rajsamand, Rajasthan 313325 4. Upper Primary School, Dasana Ki Bhagal, Majhera Panchayat, Kelwara Zone, Kumbhalgarh Block, Rajsamand, Rajasthan - 313321 Amount of Details of the entity or public authority CSR spent for or beneficiary under whose name such creation or capital asset is registered, their address acquisition of etc. capital asset (in) 25th January 2022 33 33 3rd March 2022 32 407,060 1. Government Primary School, Rodh Ka Guda, Sukhar Panchayat, Antaliya Zone, Kumbhalgarh Block, Rajsamand, Rajasthan 313333 creation or acquisition of the capital asset(s) Date of Sr LARSEN & TOUBRO Statements Reports Statutory Financial Integrated Report Discussion and Analysis Management Corporate Overview No. 4. Government Primary School, Shobhawato Ki Bhagal, Gram Panchayat Antaliya, Kumbhalgarh Block, Rajsamand, Rajasthan - 313334 2. Upper Primary School, Dasana Ki Bhagal, Majhera Panchayat, Kelwara Zone, Kumbhalgarh Block, Rajsamand, Rajasthan - 313321 Kumbhalgarh Block, Rajsamand, Rajasthan 313325 2. Upper Primary School, Dasana Ki Bhagal, Majhera Panchayat, Kelwara Zone, Kumbhalgarh Block, Rajsamand, Rajasthan -313321 1. Government Primary School, Rodh Ka Guda, Sukhar Panchayat, Antaliya Zone, Kumbhalgarh Block, Rajsamand, Rajasthan 313333 6. Government Primary School, Shobhawato Ki Bhagal, Gram Panchayat Antaliya, Kumbhalgarh Block, Rajsamand, Rajasthan - 313334 5. Government Primary School, Pavatiya, Thaladhari Panchayat, Kelwara Zone, Kumbhalgarh Block, Rajsamand, Rajasthan - 313325 4. Upper Primary School, Dasana Ki Bhagal, Majhera Panchayat, Kelwara Zone, Kumbhalgarh Block, Rajsamand, Rajasthan 313321 Address through solar charger 3. Alternate electricity Motor pump operated through Solar charger 2. 3. Government Primary School, Pavatiya, Thaladhari Panchayat, Kelwara Zone, 1. Borewell Asset Name Details of the capital asset(s) created or acquired (including complete address and location of the capital asset) Rajasthan - 313321 Block, Rajsamand, (b) Anganwadi, Nichli Bhagal, Antaliya Panchayat and Zone, Kumbhalgarh 3. (a) Upper Primary School, Rati Talai, Antaliya Panchayat, Antaliya Zone, Kumbhalgarh Block, Rajsamand, Rajasthan 313334 (b) Upper Primary School, Aret Ki Bhagal, Gawar Panchayat, Kelwara Zone, Kumbhalgarh Block, Rajsamand, Rajasthan - 313325 2. (a) Health Sub Centre, Antaliya, Antaliya Zone, Kumbhalgarh Block, Rajsamand, Rajasthan 313334 1,673,673 1. Health Sub Centre, Antaliya, Antaliya Zone, Kumbhalgarh Block, Rajsamand, Rajasthan 313334 4. Government Primary School, Shobhawato Ki Bhagal, Gram Panchayat Antaliya, Kumbhalgarh Block, Rajsamand, Rajasthan 313334 Furniture 1. Construction of stage, drinking water tank platform, ramp and stairs 2. Construction of boundary wall and drinking water tank platform Construction of class room, drinking water tank platform, fencing wire of boundary wall, verandah and ramp Small pond Construction of drinking water tank platform, ramp and verandah Construction of class room, drinking water tank platform, boundary wall, fencing wire, verandah and ramp Construction of class room, drinking water tank platform, boundary wall and ramp Construction of drinking water tank platform, ramp and boundary wall Construction of class room, drinking water tank platform, boundary wall, fencing wire, ramp and drain Construction of drinking water tank platform, boundary wall, stage and classroom Construction of classroom, boundary wall, fencing wire, ramp, stairs, pathway and protection wall Asset Name Details of the capital asset(s) created or acquired (including complete address and location of the capital asset) 4. Ms. Lavanya W/o Dheenabandu, No. 41/14, Periya Rajakuppam, Rajakuppam (PO), Paravakkal, Gudiyatham, Tamil Nadu - 635803 3. Ms. Prema W/o Loganathan, No. 3/34, Rajakuppam, Dasrimandripatti, Paravakkal Gudiyatham, Tamil Nadu - 635803 Address 2. Mr. Karunakaran S/o Masilamani No. 78, Kowsiya Nagar, Ulli Village, Mettukollai, Gudiyatham, Tamil Nadu - 635813 557,880 1. Mr. Govindharaj S/o Krishnaaiya, No.21/1, Mel Settikuppam, Sarakuppam, Settikuppam, Gudiyatham, 1,395,026 Principal, Government Senior Secondry School Lasadiya, Kookra, Bhim, Rajsamand, Rajasthan - 305921 324,319 Head Master, Government Upper Primary School, Upperla Karkala, Kookra, Bhim, Rajsamand, Rajasthan - 305921 196,163 Head Master, Government Upper Primary School, Barla Choura, Kookra, Bhim, Rajsamand, Rajasthan - 305921 1,333,269 Head Master, Government Primary School, Rawat Ka Kheda, Kookra, Bhim, Rajsamand, Rajasthan - 305921 1,371,305 Head Master, Government Primary School, Pathwari Ka Baadiya, Kookra, Bhim, Rajsamand, Rajasthan - 305921 - 947,399 Head Master, Government Primary School, Nichla Karkala, Kookra, Bhim, Rajsamand, Rajasthan 305921 - 1,630,749 Head Master, Government Primary School, Mohariya, Kookra, Bhim, Rajsamand, Rajasthan 305921 Tamil Nadu 635803 (in ) Government Primary School, Mohariya, Rajasthan - 305921 creation or acquisition of the capital asset(s) No. Date of Sr Annexure to the Board Report Integrated Annual Report 2021-22 351 4. No. 41/14, Periya Rajakuppam, Rajakuppam (PO), Paravakkal, Gudiyatham, Tamil Nadu - 635803 Dasrimandripatti, Paravakkal Gudiyatham, Tamil Nadu - 635803 3. No. 3/34, Rajakuppam, Kookra, Bhim, Rajsamand, Tamil Nadu 635813 Tamil Nadu 635803 Gudiyatham, 1. No.21/1, Mel Settikuppam, Sarakuppam, Settikuppam, Government Senior Secondry School Lasadiya, Kookra, Bhim, Rajsamand, Rajasthan - 305921 Upperla Karkala, Kookra, Bhim, Rajsamand, Rajasthan - 305921 Government Upper Primary School, Government Upper Primary School, Barla Choura, Kookra, Bhim, Rajsamand, Rajasthan - 305921 Government Primary School, Rawat Ka Kheda, Kookra, Bhim, Rajsamand, Rajasthan - 305921 Government Primary School, Pathwari Ka Baadiya, Kookra, Bhim, Rajsamand, Rajasthan - 305921 Government Primary School, Nichla Karkala, Kookra, Bhim, Rajsamand, Rajasthan - 305921 2. No. 78, Kowsiya Nagar, Ulli Village, Mettukollai, Gudiyatham, Amount of Details of the entity or public authority CSR spent for or beneficiary under whose name such creation or capital asset is registered, their address acquisition of etc. capital asset 2021 to 30th August Corporate Overview 350 Government Upper Primary School, Kathon Ka Talab, Kookra, Bhim, Rajsamand, Rajasthan - 305921 Government Primary School - Kashya, Kookra, Bhim, Rajsamand, Rajasthan 305921 - Rajasthan 305921 2. Aanganwadi - Rawat Ka Kheda, Kookra, Bhim, Rajsamand, 1. Aanganwadi Nichla Lasadiya, Kookra, Bhim, Rajsamand, Rajasthan - 305921 Primary School, Dungo Ka Wala, Kookra, Bhim, Rajsamand, Rajasthan 305921 2. Primary School, Godarel, Kookra, Bhim, Rajsamand, Rajasthan - 305921 Management 1. Primary School, Jassuj Ka Kheda, Kookra, Bhim, Rajsamand, Rajasthan - 305921 Upper Primary School (Girls), Kookra, Bhim, Rajsamand, Rajasthan - 305921 Senior Secondary School Kookra, Kookra, Bhim, Rajsamand, Rajasthan - 305921 (b) Aanganwadi Kookra, Kookra, Bhim, Rajsamand, Rajasthan - 305921 2. (a) Aanganwadi Rajarel, Kookra, Bhim, Rajsamand, Rajasthan - 305921 1. Aanganwadi Jalpa, Kookra, Bhim, Rajsamand, Rajasthan - 305921 Address Construction of drinking water tank platform, boundary wall, plaster work and ramp Construction of class room, drinking water tank platform, boundary wall, stage and ramp Construction of drinking water tank platform and boundary wall Construction of stage, classroom and stairs Construction of drinking water tank platform, classroom and ramp Construction of stage, drinking water tank platform and verandah Construction of drinking water tank platform, stairs, ramp and platform Primary School, Japla, Kookra, Bhim, Rajsamand, Rajasthan - 305921 Discussion and Analysis Integrated Report Statutory Financial Reports Statements 30th June 2021 50 50 28th February 2022 49 28th February 2022 48 28th February 2022 47 28th February 2022 46 46 28th February 2022 45 28th February 2022 44 28th February 2022 43 creation or acquisition of the capital asset(s) No. Date of Sr LARSEN & TOUBRO 6. Mr. Dakshanamoorthy S/o Munisamy, No. 2/66, Pananthoppu Colony, Rajakuppam (PO), Paravakkal, Gudiyatham, Tamil Nadu - 635803 The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015; 5. Mr. Sundaramoorthy S/o Govindhan Rajakuppam, Rajamandripatti, Dasmandripatti, Paravakkal, Gudiyatham, Tamil Nadu - 635803 d. The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (up to 12th August, 2021) and The Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (with effect from 13th August, 2021); 2. • The Nomination and Remuneration Committee and this Policy shall be in compliance with Section 178 of the Act read along with the applicable rules thereto and Regulation 19 of LODR. The Key Objectives of the Committee would be: 1. OBJECTIVE: The Board of Directors of Larsen & Toubro Limited ("the Company") had constituted the "Nomination and Remuneration Committee" which is in compliance with the requirements of the Companies Act, 2013 ("Act") and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("LODR"). NOMINATION AND REMUNERATION POLICY (As per Companies Act, 2013) Annexure 'F' to the Board Report Annexure to the Board Report Integrated Annual Report 2021-22 357 Date 04th May, 2022 Place: Thane FCS: 4206 | COP No.: 1774 ICSI UDIN: F004206D000266600 S. N. Ananthasubramanian Partner To identify persons who are qualified to become Directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal and shall specify the manner for effective evaluation of performance of Board, its Committees and individual Directors to be carried out by the Board or the Nomination & Remuneration Committee or by an Independent External Agency and review its implementation and compliance; ICSI Unique Code: P1991MH040400 Peer Review Cert. No.: 606/2019 We have not verified the correctness and appropriateness of financial records and books of accounts of the Company. The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company. 8 7 Disclaimer etc. Management's representation about the compliance of laws, rules and regulations and happening of events, Wherever required, we have obtained the Audit, maintained by the Company, are free from misstatement. documents or Records, in relation to Secretarial 6 Wherever required, we have obtained reasonable assurance whether the statements prepared, adequate and appropriate for us to provide a basis for our opinion. For S. N. ANANTHASUBRAMANIAN & Co. Company Secretaries We believe that audit evidence and information obtained from the Company's management is To formulate the criteria for determining qualifications, positive attributes and independence of a Director and recommend to the Board a policy, relating to the remuneration for the Directors, Key Managerial Personnel and other employees; Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; Remuneration to Directors, Key Managerial Personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals; C. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 - Not Applicable as there was no reportable event during the financial year under review; 358 a) The Committee shall identify and ascertain the integrity, qualification, expertise and experience 3.2.1. Appointment criteria and qualifications 3.2. Policy for appointment and removal of Director, KMP and Senior Management removal of Director, KMP and Senior Management Personnel. Recommend to the Board, appointment and Identify persons who are qualified to become Director and persons who may be appointed in Key Managerial and Senior Management positions in accordance with the criteria laid down in this policy. Formulate the criteria for determining qualifications, positive attributes and independence of a Director. The Committee shall: 3.1. Matters to be dealt with, perused and recommended to the Board by the Nomination and Remuneration Committee 3. ROLE OF COMMITTEE: 2.6. Senior Management Personnel means all members of management one level below the Executive Directors including the Chief Financial Officer and Company Secretary. Presently, persons in Sr. Vice President grade and F&A heads of Independent Companies reporting to Whole-time Directors will be covered as Senior Management Personnel. To ensure that level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully; Such other officer as may be prescribed. • . Company Secretary; Chief Financial Officer; Whole-time Directors; Chief Executive Officer or the Managing Director or the Manager; . • 2.5. Key Managerial Personnel (KMP) means 2.4. Executive Directors means the Executive Chairman if any, Chief Executive Officer and Managing Director, Deputy Managing Director, if any and Whole-time Directors. 2.3. Directors mean Directors of the Company. 2.2. Board means Board of Directors of the Company. 2.1. Act means the Companies Act, 2013 or Companies Act, 1956 as may be applicable and Rules framed thereunder, as amended from time to time. Devising a policy on Board diversity; Senior Management Personnel designated as such by the Board; and We have conducted the Audit as per the applicable Auditing Standards issued by the Institute of Company Secretaries of India. DEFINITIONS: 4 10,000 crore (Rupees Ten Thousand Crore), including refinancing, through external commercial borrowings, term loans, non-convertible debentures or any other instrument as may be appropriate. The Board of Directors at its meeting held on 24th March 2022, approved long term borrowings upto Raised 450 crore (Rupees Four Hundred and Fifty Crore only), by way of receipt of call money pursuant to First Balance Payment notice of ₹2,50,000 each on the 18,000 Non - Convertible Debentures of 10 Lac each on 12th April 2021. In supersession of the Special Resolution passed at the 75th Annual General Meeting (AGM) held on 13th August, 2020, members at the 76th AGM held on 05th August 2021, passed a Special Resolution authorising the Board of Directors to raise funds through issuance of convertible bonds and/or equity shares through depository receipts, including by way of Qualified Institutions Placement, in one or more tranches upto an amount not exceeding 4500 Crore or US $600 Million, whichever is higher. The Company at its Board Meeting held on July 26, 2021, had considered and approved a Scheme of Arrangement for amalgamation of L&T Hydrocarbon Engineering Limited ("LTHE”) (a wholly-owned Subsidiary of the Company) with the Company. ("the Scheme"). The said Scheme was approved vide order of the National Company Law Tribunal, Mumbai bench dated 28th January 2022. on the Company's affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards etc: Non-Convertible Debentures amounting to 450 Crore (Rupees Four Hundred and Fifty Crore only) were duly redeemed on their respective due dates. We further report that based on review of compliance mechanism established by the Company and on the basis of the Compliance Certificate(s) issued by the Company Secretary and taken on record by the Board of Directors at their meeting(s), we are of the opinion that there are adequate systems and processes in place in the Company which is commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines. We further report that during the audit period the following events have occurred which had a major bearing All decisions of Board and Committee meetings were carried unanimously. The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors including Independent Directors and Women Directors. The changes in the composition of the Board of Directors which took place during the period under review were carried out in compliance with the provisions of the Act; Adequate notice is given to all Directors of the schedule of the Board and Committee Meetings and Agenda & detailed notes on agenda were sent at least seven days in advance and there exists a system for seeking and obtaining further information and clarifications on the agenda items before the meeting for meaningful participation at the meeting; • We further report that:- During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. (ii) Listing Agreements entered into by the Company with BSE Limited and National Stock Exchange of India Limited. This Report is to be read with our letter of even date which is annexed as Annexure A and forms an integral part of this report. vi. The Company has informed that there are no laws which are specifically applicable to the Company. We have also examined compliance with the applicable provisions of the following: The Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) Regulations, 2021 (with effect from 16th August, 2021); i. Annexure to the Board Report Integrated Annual Report 2021-22 355 h. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018 - Not Applicable as there was no reportable event during the financial year under review; The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 (up to 9th June, 2021) and The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021 (with effect from 10th June, 2021) - Not Applicable as the Company has not delisted/ proposed to delist its equity shares from any Stock Exchange during the financial year under review; The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client - Not Applicable as the Company is not registered as Registrar to Issue and Share Transfer Agent during the financial year under review; The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 (up to 15th August, 2021); g. f. e. 5 j. The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations, 2015; For S. N. ANANTHASUBRAMANIAN & Co. Company Secretaries (i) Secretarial Standards with regard to Meetings of Board of Directors (SS-1) and General Meetings (SS-2) issued by The Institute of Company Secretaries of India; S. N. Ananthasubramanian Partner 3 ICSI Unique Code: P1991 MH040400 Peer Review Cert. No.: 606/2019 2 Our responsibility is to express an opinion on these secretarial records, standards and procedures followed by the Company with respect to secretarial compliances. Auditor's Responsibility It is the responsibility of the management of the Company to maintain secretarial records, devise proper systems to ensure compliance with the provisions of all applicable laws and regulations and to ensure that the systems are adequate and operate effectively. 1 Management's Responsibility Our Secretarial Audit Report for the Financial Year ended 31st March, 2022, of even date is to be read along with this letter. Mumbai 400001. CIN: L99999MH1946PLC004768 Larsen & Toubro Limited The Members, To, LARSEN & TOUBRO Annexure-'A' L&T House, Ballard Estate, Statements FCS: 4206 | COP No.: 1774 ICSI UDIN: F004206D000266600 Date 04th May, 2022 Place: Thane 356 Management Overview Corporate Integrated Report Statutory Financial Reports Discussion and Analysis 10.3 Setting a formal and transparent procedure for selecting new Directors for appointment to the Board; 10.4 Developing a succession plan for the Board and Senior Management and regularly reviewing the plan; Integrated Annual Report 2021-22 10.5 Evaluating the performance of the Board members and Senior Management in the context of the Company's performance from business and compliance perspective; 10.6 Making recommendations to the Board concerning any matters relating to the continuation in office of any Director at any time including the suspension or termination of service of an Executive Director as an employee of the Company subject to the provision of the law and their service contract; 10.7 Delegating any of its powers to one or more of its members or the Secretary of the Committee; 361 Annexure to the Board Report 11.3 To delegate any of its powers to one or more of its members or the Secretary of the Committee. 10.9 Considering any other matters, as may be requested by the Board. 11. REMUNERATION DUTIES The duties of the Committee in relation to remuneration matters include: 11.2 To ensure the remuneration maintains a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the Company. 11.1 To consider and determine the Remuneration Policy, based on the performance and also bearing in mind that the remuneration is reasonable and sufficient to attract, retain and motivate members of the Board and such other factors as the Committee shall deem appropriate all elements of the remuneration of the members of the Board. 10.2 Determining the appropriate size, diversity and composition of the Board; 10.8 Recommend any necessary changes to the Board; and 10.1 Ensuring that on appointment to the Board, Non-Executive Directors receive a formal letter of appointment in accordance with the Guidelines provided under the Act; 6. FREQUENCY OF MEETINGS 10. NOMINATION DUTIES 5.3 In the absence of the Chairperson, the members of the Committee present at the meeting shall choose one amongst them to act as Chairperson. 11.4 To consider any other matters as may be requested by the Board. 5.4 Chairman of the Nomination and Remuneration Committee meeting could be present at the Annual General Meeting or may nominate some other member to answer the shareholders' queries. The meeting of the Committee shall be held atleast once in a year and at such regular intervals as may be required. 7. COMMITTEE MEMBERS' INTERESTS The duties of the Committee in relation to nomination matters include: 7.1 A member of the Committee is not entitled to be present/participate in discussion when his or her own remuneration is discussed at a meeting or when his or her performance is being evaluated. 8. 9. SECRETARY The Company Secretary of the Company shall act as Secretary of the Committee. VOTING Matters arising for determination at Committee meetings shall be decided by a majority of votes of Members present and voting and any such decision shall for all purposes be deemed a decision of the Committee. 7.2 The Committee may invite such executives, as it considers appropriate, to be present at the meetings of the Committee. 11.5 Professional indemnity and liability insurance for Directors and senior management. Key audit matter description Proceedings of all meetings must be minuted and signed by the Chairman of the Committee at the subsequent meeting. Minutes of the Committee meetings will be tabled at the subsequent Board and Committee meeting. 13. REVIEW & AMENDMENT: Report on the Audit of the Standalone Financial Statements Opinion We have audited the accompanying standalone financial statements of Larsen & Toubro Limited (the "Company"), which comprise the Balance Sheet as at March 31, 2022, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information, which includes 31 joint operations accounted on proportionate basis. In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of reports of the other auditors on separate financial statements of the joint operations referred to in the Other Matters section below, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (the "Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS"), and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2022, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date. Basis for Opinion We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing ("SA"s) specified under section 143(10) of the Companies Act, 2013 (the "Act"). Our responsibilities under those Standards are further described in the Auditor's Responsibility for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India ("ICAI") together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI's Code of Ethics. We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in the Other Matters section below, is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements. TO THE MEMBERS OF LARSEN & TOUBRO LIMITED Key Audit Matters Revenue recognition - accounting for construction contracts There are significant accounting judgements in estimating revenue to be recognised on contracts with customers, including estimation of costs to complete. The Company recognizes revenue on the basis of stage of completion in proportion of the contract costs incurred at balance sheet date, relative to the total estimated costs of the contract at completion. The recognition of revenue is therefore dependent on estimates in relation to total estimated costs of each such contract. Significant judgements are involved in determining the expected losses, when such losses become probable based on the expected total contract cost. Cost contingencies are included in these estimates to take into account specific risks of uncertainties or disputed claims against the Company, arising within each contract. These contingencies are reviewed by the Management on a regular basis throughout the life of the contract and adjusted where appropriate. The revenue on contracts may also include variable consideration (variations and claims). Variable consideration is recognised when the recovery of such consideration is highly probable. Refer to Note No. [1] (ii)(e) to the Standalone Financial Statements 363 as a member of the Committee but shall not be a Chairman of the Committee. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current financial year. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report. INDEPENDENT AUDITOR'S REPORT Maharashtra, India One International Center Tower 3, 32nd Floor, Senapati Bapat Marg Elphinstone Road (West) Mumbai - 400 013 The Policy shall be reviewed as and when required to ensure that it meets the objectives of the relevant legislation and remains effective. The Executive Committee has the right to change/amend the policy as may be expedient taking into account the law for the time being in force. 362 Corporate Management Integrated Statutory Financial LARSEN & TOUBRO Overview Discussion and Analysis Report Reports Statements DELOITTE HASKINS & SELLS LLP Chartered Accountants 12. MINUTES OF NOMINATION AND REMUNERATION COMMITTEE MEETING 5.2 Chairperson of the Company may be appointed The Company shall appoint or re-appoint any person as its Executive Director for a term not exceeding five years at a time. No re-appointment shall be made earlier than one year before the expiry of term. CHAIRPERSON a. b. Previous years observations and actions taken Proposed actions based on current year's observations C. 3.2.4. Removal Due to reasons for any disqualification mentioned in the Act or under any other applicable Act, rules and regulations thereunder, the Committee may recommend, to the Board with reasons recorded in writing, removal of a Director, KMP or Senior Management Personnel subject to the provisions and compliance of the said Act, rules and regulations. 3.2.5. Retirement The Director, KMP and Senior Management Personnel shall retire as per the applicable provisions of the Act or the prevailing policy of the Company, as applicable. The Board/Committee will have the discretion to retain the Director, KMP, Senior Management Personnel in the same position/ remuneration or otherwise even after attaining the retirement age, for the benefit of the Company. The Company may disclose in the Annual Report: Observation of the Board Evaluation for the year under review 359 Annexure to the Board Report 3.3. Policy relating to the Remuneration of Executive Director, KMP and Senior Management Personnel 3.3.1. General: a) The remuneration / compensation / commission etc. to the Executive Directors will be determined by the Committee and recommended to the Board for approval. The remuneration / compensation / commission etc. shall be subject to the approval of the shareholders of the Company and Central Government, wherever required. b) The remuneration and commission to be paid to the Executive Directors shall be in accordance with the percentage / limits / conditions laid down in the Articles of Association of the Company and as per the provisions of the Act. c) Increments to the existing remuneration/ compensation structure may be recommended by the Committee to the Board which should be within the limits approved by the Shareholders in the case of Executive Directors. Integrated Annual Report 2021-22 d) Where any insurance is taken by the Company on behalf of its Executive Directors, Chief Executive Officer, Chief Financial Officer, the Company Secretary and any other employees for indemnifying them against any liability, the premium paid on such insurance shall not be treated as part of the remuneration payable to any such personnel. Provided that if such person is proved to be guilty, the premium paid on such insurance shall be treated as part of the remuneration. The Committee shall by itself or through the Board or an independent external agency carry out evaluation of performance of the Board/Committee(s), Individual Directors and Chairman at regular interval (yearly) and review implementation and compliance. A person shall not be appointed as a Director in case he is a Director in more than eight listed companies after April 1, 2019 and seven listed companies after April 1, 2020. For the purpose of this clause listed companies would mean only those companies whose equity shares are listed. Corporate Overview Management Discussion and Analysis Integrated Statutory Financial Report Reports Statements LARSEN & TOUBRO of the person for appointment as Director and recommend to the Board his/her appointment. Appointment and Remuneration of KMP or Senior Management Personnel is in accordance with the HR Policy of the Company. The Company's policy is committed to acquire, develop and retain a pool of high calibre talent, establish systems and practises for maintaining transparency, fairness and equity and provides for payment of competitive pay packages matching industry standards. b) A person should possess adequate qualification, expertise and experience for the position he / she is considered for appointment. The Committee has discretion to decide whether qualification, expertise and experience possessed by a person is sufficient / satisfactory for the concerned position. c) The Company shall not appoint or continue the employment of any person as Director who has attained the retirement age fixed by the Board or as approved by the Shareholders pursuant to the requirement of the Act/LODR. 3.2.3. Evaluation 3.2.2. Term Tenure Integrated Annual Report 2021-22 b) Independent Directors: An Independent Director shall hold office for a term up to five consecutive years on the Board of the Company and will be eligible for re-appointment on passing of a special resolution by the Company and disclosure of such appointment in the Board's report. The rationale for such re-appointment shall also be provided in the Notice to Shareholders proposing such re-appointment. No Independent Director shall hold office for more than two consecutive terms, but such Independent Director shall be eligible for appointment after expiry of three years of ceasing to become an Independent Director. Provided that an Independent Director shall not, during the said period of three years, be appointed in or be associated with the Company in any other capacity, either directly or indirectly. At the time of appointment of Independent Director it should be ensured that number of Boards on which such Independent Director serves is restricted to seven listed companies as an Independent Director and three listed companies as an Independent Director in case such person is serving as a Whole-time Director of a listed company or such other number as may be prescribed under the Act. c) Maximum Number of Directorships: a) Executive Directors: e) Remuneration of other KMP or Senior Management Personnel, in any form, shall be as per the policy of the Company based on the grade structure in the Company. Integrated Report Statutory Financial Reports Statements LARSEN & TOUBRO 4. the Company computed as per the applicable provisions of the Act. The Board of Directors will fix the Commission payable to Directors on the basis of number of Board/Committee meetings attended during the year and Chairmanships of Committees. d) Stock Options: Management Discussion and Analysis An Independent Director shall not be entitled to any stock option of the Company. Non- Executive Directors are eligible for Stock options in accordance with Schemes formulated by the Company. Nominee Directors are not entitled to stock options as per their respective nomination letters received by the Company. 4.1 The Committee shall consist of a minimum 3 non- executive Directors, half of them being independent. 4.2 Minimum two (2) members or one-third of the members whichever is greater including atleast one Independent Director shall constitute a quorum for the Committee meeting. 4.3 Membership of the Committee shall be disclosed in the Annual Report. 4.4 Term of the Committee shall be continued unless terminated by the Board of Directors. 5. MEMBERSHIP Corporate Overview 360 Commission may be paid within the monetary limit approved by shareholders, subject to the limit not exceeding 1% of the profits of 3.3.2. Remuneration to Executive Directors/KMP and Senior Management Personnel: a) Fixed pay: The Executive Directors/ KMP and Senior Management Personnel shall be eligible for a monthly remuneration as may be approved by the Board on the recommendation of the Committee or policy of the Company. In case of remuneration to Directors, the breakup of the pay scale and quantum of perquisites including, employer's contribution to P.F, pension scheme, medical expenses, club fees etc. shall be decided and approved by the Board/ the Person authorized by the Board on the recommendation of the b) Minimum Remuneration: If, in any financial year, the Company has no profits or its profits are inadequate, the Company shall pay remuneration to its Executive Directors in accordance with the provisions of Schedule V of the Act and if it is not able to comply with such provisions, with the previous approval of the Central Government. c) Provisions for excess remuneration: If any Chairman/Managing Director/Whole-time Directors draws or receives, directly or indirectly by way of remuneration any such sums in excess of the limits prescribed under the Act or without the prior sanction of the Central Government, where required, he/she shall refund such sums to the Company and until such sum is refunded, hold it in trust for the Company. The Company shall not waive recovery of such sum refundable to it unless permitted by the Central Government. d) Stock Options in Subsidiary Companies: Executive Directors may be granted stock options in subsidiary companies as per their Schemes and after taking necessary approvals. Perquisites may be added to the remuneration of concerned Directors and considered in the limits applicable to the Company. 3.3.3. Remuneration to Non-Executive / Independent Director: a) Remuneration / Commission: The remuneration / commission shall be fixed as per the limits and conditions mentioned in the Articles of Association of the Company and the Act. b) Sitting Fees: The Non-Executive / Independent Director may receive remuneration by way of fees for attending meetings of Board or Committee thereof. Provided that the amount of such fees shall not exceed One Lac per meeting of the Board or Committee or such amount as may be prescribed by the Central Government from time to time. c) Commission: 5.1 Chairperson of the Committee shall be an Independent Director. Independent Auditors' Report Committee and approved by the shareholders and Central Government, wherever required. Our audit procedures related to the (1) identification of distinct performance obligations, (2) evaluation of the process for estimation of costs to complete (3) evaluation of implications of change orders on costs estimates of costs to complete and revenue and (4) evaluation of any variable consideration included the following: h) In our opinion, proper books of account as required by law have been kept by the Company and its joint operation company so far as it appears from our examination of those books and the reports of the other auditors. The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Cash Flows and Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account. In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act. On the basis of the written representations received from the directors as on March 31, 2022 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2022 from being appointed as a director in terms of Section 164(2) of the Act. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure A". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company's internal financial controls over financial reporting. With respect to the other matters to be included in the Auditor's Report in accordance with the requirements of section 197(16) of the Act, as amended. In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act. With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to g) us: ii. iii. iv. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company; a. b. i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements; The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts, including derivative contracts; C. f) d) 366 Corporate Overview Management Discussion and Analysis Integrated Report Statutory Reports e) Financial Statements Report on Other Legal and Regulatory Requirements 1. 2. As required by Section 143(3) of the Act, based on our audit and based on the consideration of the reports of the other auditors on the separate financial information of the joint operations referred to in Other Matters section above we report, to the extent applicable that: a) We have sought and obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit. b) c) LARSEN & TOUBRO Our opinion on the standalone financial statements and our report on Other Legal and Regulatory Requirements below is not modified in respect of the these matters with respect to our reliance on the work done and the reports of the other auditors and the financial information certified by the management. The Management has represented that, to the best of it's knowledge and belief, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; The Management has represented, that, to the best of it's knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and The amount of dividend is in accordance with Section 123 of the Act. Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (the "Act") We have audited the internal financial controls over financial reporting of Larsen and Toubro Limited (the "Company") as of March 31, 2022 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date which includes internal financial controls over financial reporting of one of the Company's 31 joint operations which is a company incorporated in India. Management's Responsibility for Internal Financial Controls The Company's Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India ("ICAI"). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to respective company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013. Auditor's Responsibility Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting of the Company and its joint operations company incorporated in India, based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the ICAI and the Standards on Auditing ("SA"s) prescribed under Section 143(10) of the Companies Act, 2013 (the "Act"), to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. (Referred to in paragraph 1(f) under "Report on Other Legal and Regulatory Requirements" section of our report of even date) Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained, and the audit evidence obtained by the other auditor of the joint operation which is a company incorporated in India, in terms of their reports referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the Company's internal financial controls system over financial reporting. A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Inherent Limitations of Internal Financial Controls Over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion In our opinion, to the best of our information and according to the explanations given to us and based on the consideration of the reports of the other auditor on internal financial controls system over financial reporting of the joint operation referred to in the Other Matters paragraph below, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2022, based on the criteria for internal financial control over financial reporting established by the respective Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. 368 Revenue recognition - accounting for construction contracts Principal Audit Procedures Meaning of Internal Financial Controls Over Financial Reporting Based on the audit procedures that has been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e) contain any material mis-statement; and ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT Integrated Annual Report 2021-22 V. b) The final dividend paid by the Company during the year in respect of the same declared for the previous year is in accordance with Section 123 of the Companies Act 2013 to the extent it applies to payment of dividend. As stated in note 17 to the financial statements, the Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The amount of dividend declared is in accordance with section 123 of the Act to the extent it applies to declaration of dividend. As required by the Companies (Auditor's Report) Order, 2020 ("the Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in "Annexure B" a statement on the matters specified in paragraphs 3 and 4 of the Order. For DELOITTE HASKINS & SELLS LLP Chartered Accountants Independent Auditors' Report (Firm's Registration No. 117366W/W-100018) Partner (Membership No. 39826) UDIN: 22039826AIVCQV7676 Place: Mumbai Date: May 12, 2022 367 Sanjiv V. Pilgaonkar We did not audit the financial information of 1 joint operation included in the standalone financial statements, whose financial information reflects total assets of 1,067.79 crore as at March 31, 2022, total revenues of 352.96 crore, total net profit after tax (net) of 11.91 crore, total comprehensive profit (net) of 11.91 crore and net cash inflows of 5.10 crore for the year ended March 31, 2022, respectively, as considered in the standalone financial statements. The financial information of this joint operation has not been audited by the auditor whose financial information has been furnished to us by the Management of the Company, and our opinion in so far as it relates to the amounts and disclosures included in respect of this joint operation, is based solely on the financial information certified by the management of the Company. According to the information and explanations given to us by the Management, the financial information of this entity is not material to the Company. a) • Integrated Statutory Reports Financial Statements Discussion and Analysis Report LARSEN & TOUBRO Management Impairment of Investment in a Subsidiary description Principal Audit Procedures As at March 31, 2022, the Company held investment with a carrying amount of ₹2,439.00 crore (excluding *3,726.70 crore in inter corporate deposits and ₹1,145.63 crore in debentures) in L&T Metro Rail (Hyderabad) Limited, a wholly owned subsidiary. This investment is carried at cost less impairment in the Company's standalone financial statements. Consequent to accumulation of losses incurred by the subsidiary, the Company's management has tested this investment for impairment in accordance with Ind AS 36 by comparing its recoverable amount with it carrying amount as at March 31, 2022. The recoverable amount of the investment in the subsidiary is assessed based on future discounted cash flows of the subsidiary. We considered this as a key audit matter due to significant judgement involved in estimating future cash flows of the subsidiary and in determining the discount rate to be used. Changes in inputs and assumptions could impact the results of the impairment assessment. Refer to Note Nos. [1] (ii)(m) to the Standalone Financial Statements. Our audit procedures related to forecasts of future traffic, revenue, free cash flows generated, selection of the method for estimating recoverable value and discount rate for the entity included the following: Key audit matter 364 In respect of the sample contracts, we compared previous estimates relating to recoverability of contract assets and compared it with actual collections during the year. We selected a sample of contracts assets with corresponding trade receivables that were overdue and evaluated the basis for management's conclusions regarding the (1) evidence supporting the execution of work for which the contract assets were recognised; (2) reasons for the delays in recovery of invoices and the basis on which recoverability of the contract assets was assessed; (3) impact on the allowance for expected credit losses; and (4) adjusting events after the reporting date i.e. March 31, 2022 and the date when the financial statements are approved by the Board of Directors and the impact thereof on the carrying amount of the related contract assets. We tested the effectiveness of controls relating to the (a) evaluation of performance obligations and identification of those that are distinct; (b) estimation of costs to complete each of the performance obligations including the contingencies in respect thereof, as work progresses and the impact thereon as a consequence of change orders; (c) the impact of change orders on the transaction price of the related contracts; and (d) evaluation of the impact of variable consideration on the transaction price. We selected a sample of contracts with customers and performed the following procedures: We did not audit the financial information of 29 joint operations included in the standalone financial statements, whose financial information reflects total assets of 2,972.06 crore as at March 31, 2022, total revenues of 3,217.48 crore, total net loss after tax (net) of 187.97 crore, total comprehensive loss (net) of 187.97 crore and net cash inflows of 97.18 crore for the year ended March 31, 2022, respectively, as considered in the standalone financial statements. The financial information of these joint operations has been audited by the other auditors whose reports have been furnished to us by the Management of the Company, and our opinion in so far as it relates to the amounts and disclosures included in respect of these joint operations, is based solely on the reports of such other auditors and the procedures performed by us as stated under Auditor's Responsibilities section above. a. b. C. d. Obtained and read contract documents for each selection, change orders, and other documents that were part of the agreement. Identified significant terms and deliverables in the contract to assess management's conclusions regarding the (i) identification of distinct performance obligations; (ii) changes to costs to complete as work progresses and as a consequence of change orders; (iii) the impact of change orders on the transaction price; and (iv) the evaluation of the adjustment to the transaction price on account of variable consideration. Compared costs incurred with Company's estimates of costs incurred to date to identify significant variations and evaluated whether those variations have been considered appropriately in estimating the remaining costs to complete the contract. Tested the estimate for consistency with the status of delivery of milestones and customer acceptance to identify possible delays in achieving milestones, which require changes in estimated costs or efforts to complete the remaining performance obligation. Measurement of contract assets in respect of overdue milestones and receivables in respect of overdue invoices. Key audit matter The Company, in its contract with customers, promises to transfer distinct services to its customers, which may description be rendered in the form of engineering, procurement, and construction ("EPC") services through design-build contracts, and other forms of construction contracts. The recognition of revenue is based on contractual terms, which could be based on agreed unit price or lump-sum revenue arrangements. At each reporting date, revenue is accrued for costs incurred against work performed that may not have been invoiced. Identifying whether the Company's performance has resulted in a service that would be billable and collectable where the works carried out have not been acknowledged by customers as of the reporting date, or in the case of certain Defence contracts, where the evidence of work carried out and cost incurred are covered by confidentiality arrangements, involves a significant amount of judgement. Assessing the recoverability of contract assets related to overdue milestones and amounts overdue against invoices raised which have remained unsettled for a significantly long period after the end of the contractual credit period also involves a significant amount of judgment. Refer to Note Nos. [1](ii)(e), [1](ii)(m) to the Standalone Financial Statements Principal Audit Procedures Our audit procedures related to the (1) evaluation of evidence supporting the execution of work; (2) evaluation of recoverability of the overdue amounts including the impact on the expected credit loss allowance; and (3) assessment of adjusting events after the reporting date i.e. March 31, 2022 and the date when the financial statements are approved by the Company's Board of Directors included the following: • We tested the effectiveness of controls relating to the (a) gathering and evaluation of evidence supporting the execution of work; (b) evaluation of recoverability of the overdue amounts including the impact on the expected credit loss allowance; and (c) assessment of adjusting events after the reporting date i.e. March 31, 2022 and the date when the financial statements are approved by the Board of Directors and the impact thereof on the carrying amount of the related contract assets. Measurement of contract assets in respect of overdue milestones and receivables in respect of overdue invoices. • We tested the effectiveness of controls over forecasts of future traffic, revenue, free cash flows and selection of the discount rate; • Corporate Overview • • • • • Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management. Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation. Obtain sufficient appropriate audit evidence regarding the financial information of the Company and its joint operations to express an opinion on the standalone financial statements. We are responsible for the direction, supervision and performance of the audit of the financial statements of such entities included in the standalone financial statements of which we are the independent auditors. For the other entities included in the standalone financial statements, which have been audited by the other auditors, such other auditors remain responsible for the direction, supervision and performance of the audits carried out by them. We remain solely responsible for our audit opinion. Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. We evaluated the reasons for variation between the management's previous estimate of traffic, revenue and cash flow forecasts and obtained our understanding of the manner in which revised forecasts were obtained; With the assistance of our fair value specialists who have specialised skill and knowledge, we evaluated the reasonableness of the methodology and discount rate by testing the source information underlying the determination of the discount rate and mathematical accuracy of the calculations; and From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Other Matters As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: Independent Auditors' Report • In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated. Information Other than the Financial Statements and Auditor's Report Thereon ('other information') The Boards of Directors of the Company is responsible for the preparation of other information. The other information comprise the information included in the Management Discussion and Analysis, Board's Report including Annexures to Board's Report, Business Responsibility Report, Corporate Governance and Shareholder's Information, but does not include the standalone financial statements and our auditor's report. Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. We performed a sensitivity analysis on the discount rate to assess the extent of change in discount rate that would be required for the investment to be impaired. If, based on the work we have performed, we conclude that there is material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Management's Responsibility for the Standalone Financial Statements The Company's Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (the "Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. In preparing the standalone financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. The Company's Board of Directors is also responsible for overseeing the Company's financial reporting process. Auditor's Responsibility for the Audit of the Standalone Financial Statements Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements. 365 This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error. Integrated Annual Report 2021-22 Statutory Financial Reports Integrated Report 0.15 LARSEN & TOUBRO Discussion and Analysis Name of Statute Statements Management DGFT 0.79 Deputy Commissioner 1.05 2016-17 2014-15 to 2017-18 0.15 The Central Sales Tax Act, Entry tax, Local Sales Tax Act, Works Contract Tax Act and Goods & Services Tax Act Corporate Overview The Mumbai Municipal Corporation Act, 1888 Demand for pending Forms Nature of Dues Subcontractor Turnover, ITC disallowed and Labor & Like Charges Disallowed Dispute regarding questions of law, classification dispute, sales in transit, high sea sales, non-submission of C forms & E1 forms, disallowance of ITC, valuation of goods and other matters 4.41 Dispute regarding questions of law, classification dispute, sales in transit, high sea sales, non-submission of C forms & E1 forms, disallowance of ITC, valuation of goods and other matters Sale in Transit disallowance & WCT TDS related disputes Non Submission of forms, subcontractor turnover and interest related disputes and CAG notice for interest on non-submission of C, E1 & F Forms Disallowance of sales-in-transit, Taxability High Court of subcontractor turnover, Disallowance of labour charges, Dispute regarding questions of law, classification dispute, local VAT and Works contract disputes Non submission of Forms, classification disputes, inter-state sale turnover, Rate of tax of declared goods, Labour & service charges disallowed, Disallowance of exemptions claimed for imports & Sales in transit, Sale mismatch & levy of tax on import of goods through Way bill, Road permit issue and other Sales Tax/VAT Tribunal 741.34 760.37 Unpaid Amount Amount Involved Period to which amount relates 2006-07 to 2015-16 Supreme Court of India Forum where Dispute is Pending crore Dispute of questions of law, Classification dispute, Tax levied on goods-in-transit, labour charges & disallowance of input tax credit on deemed export sales, Taxability of sub-contractor turnover, rate of tax for declared goods and non- submission of forms Income Tax Act, 1961 5.86 0.95 Commissioner (Appeals) 2006-07, 2012-13 Dispute regarding questions of law, classification dispute, Rate disputes and other matters Disallowance of Input Tax Credit The Central Excise Act, 1944, Service Tax under Finance Act, 1994 and Customs Act, 1962 Commissioner 14.86 16.25 2017-18 Assistant Joint Disallowance of credits claimed in Tran-1 2018-19 0.95 Unpaid Amount Amount Involved Period to which amount relates 2017-18 and Non-Submission of forms, subcontractor turnover related disputes and Arbitrary enhancement of turnover Property Tax for various development works at Powai, Mumbai, Property Tax on open land (Unutilised FSI) and Property Tax on Land under construction Demands arising out of Regular Assessment/ Reassessment Demands arising out of Regular Assessment/ Reassessment Demands arising out of Regular Assessment/ Reassessment Assistant Commissioner Dispute regarding questions of law, classification dispute and other matters Dispute regarding question of law, Disallowance of CENVAT credit, short payment of service tax, Valuation disputes, dispute regarding classification of services/goods, disallowances of excise duty exemption, Non-Maintenance of Separate Books of Accounts, Export rebate disallowance, and other matters. Dispute of question of law, Disallowance of CENVAT credit, short payment of service tax, pending forms, service tax rate dispute, valuation dispute and other matters. Disallowance of CENVAT credit, short payment of service tax, pending forms, service tax rate dispute, valuation dispute and other matter 1,169.49 1,219.40 to 2017-18 2003-04, 2005-06 to 2017-18 CESTAT 149.89 169.26 2012-13, 2014-15 2005-06 to to 2017-18 and 2021-22 High Court 0.09 2011-12 to Supreme Court 80.49 85.86 2018-19 Commissioner (Appeals) Differential Custom Duty 2015-16 CAG (xiii) In our opinion, the Company is in compliance with Section 177 and 188 of the Act, where applicable, for all transactions with the related parties undertaken during the year and the details of such related party transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards. 1993-94, 1994-95, 1999-00 to 2012- 13, 2015-16 The Company has not raised loans during the year on the pledge of securities held in its subsidiaries or joint ventures or associate companies. On an overall examination of the financial statements of the Company, the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries or associates. or joint ventures. (f) (e) (d) On an overall examination of the financial statements of the Company, funds raised on short-term basis have, prima facie, not been used during the year for long-term purposes by the Company. (c) The Company has not taken any term loan during the year and there are no unutilized term loans at the beginning of the year and hence, reporting under clause (ix)(c) of the Order is not applicable. (b) The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority. (a) In our opinion, during the year, the Company has not defaulted in the repayment of loans or other borrowings or in the payment of interest thereon to any lender during the year. (xi) (x) In respect of borrowings: (ix) (viii) There were no transactions relating to previously unrecorded income that were surrendered or disclosed as income in the tax assessments under the Income Tax Act, 1961 (43 of 1961) during the year. Independent Auditors' Report Integrated Annual Report 2021-22 373 to 2018-19 In respect of issue of securities: 2,428.08 2,245.21 (a) (b) During the year, the Company has not made any preferential allotment or private placement of shares or convertible debentures (fully or partly or optionally) and hence, reporting under clause (x)(b) of the Order is not applicable to the Company. In respect of fraud: Statutory Financial Reports Integrated Report Discussion and Analysis Management Corporate Overview 374 (b) The Group has more than one Core Investment Company (CIC) as part of the group. There are two CIC forming part of the group. (xvii) The Company has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year. (xviii) There has been no resignation of the statutory auditors of the Company during the year. (xvi) (a) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Hence, reporting under clause (xvi)(a), (b) and (c) of the Order is not applicable. (xv) In our opinion, during the year the Company has not entered any non-cash transactions with its Directors or persons connected to its Directors and hence provisions of section 192 of the Act are not applicable. (b) We have considered, the internal audit reports for the year under audit, issued to the Company during the year and till date, in determining the nature, timing and extent of our audit procedures. (a) In our opinion the Company has an adequate internal audit system commensurate with the size and the nature of its business. (xiv) In respect of internal audit: Goods and Services Disallowance of credits claimed in Tran-1 Tax Act, 2017 (xii) The Company is not a Nidhi Company. Therefore, reporting under clause (xii) of the Order is not applicable. (c) We have taken into consideration, the whistle blower complaints received by the company during the year and upto the date of this report and provided to us, when performing our audit. (b) No report under sub-section (12) of section 143 of the Companies Act has been filed in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government, during the year and upto the date of this report. (a) No fraud by the Company and no material fraud on the Company has been noticed or reported during the year. The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) during the year and hence reporting under clause (x)(a) of the Order is not applicable. 254.69 718.39 2004-05, 2009-10, 2011-12, 2012-13 2011-12, 2014-15 Joint commissioner Appeals/ Additional Commissioner Appeals/ Deputy Commissioner Appeals/Assistant Commissioner Appeals/ Commissioner Appeals Assistant Commissioner/ Deputy Commissioner/ Additional Commissioner/ 1,378.42 1,210.09 1989-90, 1996-97 to 2017-18 239.34 234.25 2006-07 to 2016-17 0.61 0.63 2012-13 to 2015-16 Special Objection Hearing Authority Rajasthan Tax Board 9.91 11.28 2010-11, 2015-16 658.38 827.48 1989-90, 1991- 92,1993-94 to 2017-18 197.94 211.62 Joint Commissioner/ Commissioner Special commissioner 1996-97 to 1999-00, 2001-02 to 2017-18 CIT(A) Income Tax Appellate Tribunal (ITAT) 7.98 7.98 1994-95 High court 70.84 136.12 1986-87, 1987-88, 14.73 2005-06, 2007-08, 2009-10 to 2017-18 2010-11 to 2021-22 Supreme Court of India 1999-00 to Assessing Officer 161.00 161.50 2008-09, 2010-11, 2012-13 to 2017-18 1,748.62 1,666.47 17.91 Forum where Dispute is Pending Security Name of Statute 1.01 Freehold Land - Hazira West Kolkata, West Bengal (Since 1993) SP Mukherjee Road, 29 years No 0.12 SVM Industries 0.15 Building 4 flats - 171, - sq ft) Bengal (Area- 3925 Road, Kolkata, West (Since 1992) 30 years appropriate 1.01 1. Magan Kuber * 2. Kashiben Patel 3. Ishwar Prema at 171, SP Mukherjee No crore Integrated Report Management Discussion and Analysis Corporate Overview (a) The inventories except for goods in transit, were physically verified during the year by the Management at reasonable intervals. In case of real estate inventory wherein, having regard to the nature of inventory, the physical verification by way of verification of title deeds, site visits by the Management and certification to the extent of work completion by competent persons, are at reasonable In respect of the Company's inventories: (e) No proceedings have been initiated or is pending against the company as at March 31, 2022 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder. (d) The Company has not revalued any of its property, plant and equipment (including Right of Use assets) and intangible assets during the year. * Irrevocable Power of Attorney given to L&T by the owners, possession is with L&T 370 (ii) The formalities are pending from the authorities side. Land acquired from farmers through Government Acquisition Route. Court of Calcutta Appeal is pending before the High Conveyance deed is pending to be executed. Also indicate if in dispute Reason for not being held in name of Company 10 years (Since 2012) Land No 0.13 SVM Industries Date: May 12, 2022 Place: Mumbai UDIN: 22039826AIVCQV7676 (Membership No. 39826) Partner Sanjiv V. Pilgaonkar (Firm's Registration No. 117366W/W-100018) Chartered Accountants For DELOITTE HASKINS & SELLS LLP Our opinion is not modified in respect of this matter. Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting insofar as it relates to one joint operation which is a company incorporated in India, is based on the corresponding report of the other auditor of such company incorporated in India. Other Matters LARSEN & TOUBRO Statements Statutory Financial Reports Integrated Report Statements 369 Integrated Annual Report 2021-22 Independent Auditors' Report ANNEXURE "B" TO THE INDEPENDENT AUDITORS' REPORT 0.13 Undivided Land Period held - indicate Whether promoter, director or their relative or employee Carrying value in the financial statements as at March 31, 2022 Gross carrying value as at March 31, 2022 Description of property range, where Statutory Financial Reports Held in name of (c) (b) The Company has a program of physical verification of its property, plant and equipment and investment properties so to cover all the items in a phased manner over a period of 3 years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, certain assets were due for verification during the year and were physically verified by the Management during the year. No material discrepancies were noticed on such verification. (B) The Company has maintained proper records showing full particulars of intangible assets. (a) (A) The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment, capital work-in progress, investment properties and relevant details of right-of-use assets. In respect of the Company's property, plant and equipment and intangible assets: (i) In terms of the information and explanations sought by us and given by the Company and the books of account and records examined by us in the normal course of audit and to the best of our knowledge and belief, we state that: (Referred to in paragraph 2 under 'Report on Other Legal and Regulatory Requirements' section of our report to the Members of Larsen & Toubro Limited of even date) With respect to immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the Company) disclosed in the financial statements as a part of property, plant and equipment, capital work-in progress and investment property and based on the examination of the registered sale deed / transfer deed / conveyance deed provided to us, we report that, the title deeds of such immovable properties are held in the name of the Company as at the balance sheet date, except for the following: Nature of Dues Statements intervals. In our opinion, the coverage and procedure of such verification by the Management is appropriate having regard to the size of the Company and the nature of its operations. In respect of goods in transit, the goods have been received subsequent to the year end. No discrepancies of 10% or more in the aggregate for each class of inventories were noticed on such physical verification of inventories when compared with books of account. crore (d) In respect of loans granted by the Company, there is no amount overdue for more than 90 days at the balance sheet date. (e) During the year loans aggregating to 193.14 crore fell due from certain parties have been renewed. The details of such loans that fell due and were renewed during the year are stated below: 1 day Interest accrued for the quarter ended March 2022 remains unpaid Interest accrued for the quarter ended December 2021 remains unpaid crore Refer to Note No. 63(b)(ii) to the Standalone Financial Statements. 1.79 March 31, 2022 Interest on Bridge Loan for Working Capital Extent of Delay Remarks, if any 90 days Amount Due Date 1.71 December 31, 2021 Interest on Bridge Loan for Working Capital Nature L&T Sapura Shipping Private Limited Name of the entity L&T Sapura Shipping Private Limited Management Discussion and Analysis (c) In respect of loans granted by the Company, the schedule of repayment of principal and payment of interest has been stipulated and the repayments of principal amounts and receipts of interest are regular as per stipulation, except for the following: (b) The investments made, guarantees provided and the terms and conditions of the grant of all the above-mentioned loans and guarantees provided, during the year are, in our opinion, prima facie, not prejudicial to the Company's interest. Name of the Party The Company has not provided any advances in the nature of loans to any other entity during the year. Aggregate amount of existing loans renewed 24.66 168.48 crore 372 (c) Details of statutory dues referred to in sub-clause (a) above which have not been deposited as on March 31, 2022 on account of disputes are given below: (b) There were no undisputed amounts payable in respect of Provident Fund, Employees' State Insurance, Income-tax, Goods and Service Tax, Sales Tax, duty of Custom, duty of Excise, Value Added Tax and corresponding cess and other material statutory dues in arrears as at March 31, 2022 for a period of more than six months from the date they became payable. (a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees' State Insurance, Income-tax, Goods and Service Tax, Sales Tax, duty of Custom, duty of Excise, Value Added Tax and corresponding cess and other material statutory dues applicable to it to the appropriate authorities. (vii) In respect of statutory dues: (vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Act. We have broadly reviewed the cost records maintained during the year by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended and prescribed by the Central Government under sub-section (1) of Section 148 of the Act, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained by the company. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete. The Company has not accepted any deposit or amounts which are deemed to be deposits. Hence, reporting under clause (v) of the Order is not applicable. (v) (iv) The Company has complied with the provisions of Sections 185 and 186 of the Act, to the extent applicable, in respect of grant of loans, making investments and providing guarantees and securities during the year, as applicable. Independent Auditors' Report Integrated Annual Report 2021-22 371 (f) The Company has not granted any loans either repayable on demand or without specifying any terms or period of repayment during the year. Hence, reporting under clause (iii)(f) is not applicable. Refer to Note No. 63(b) to the Standalone Financial Statements. 4.85% Percentage of the aggregate to the total loans or advances granted during the year 0.71% Hi-Tech Rock Products and Aggregates Limited L&T Sapura Shipping Private Limited *The amounts reported are at gross amounts (including interest accrued), without considering provisions made and includes investments made in debt instruments issued by subsidiaries. NIL NIL NIL NIL NIL 9,816.00 3,473.25 Guarantees Loans crore B. Balance Outstanding as at balance sheet date in respect of - Others - Associates - Joint Venture A. Aggregate amount granted / provided during the year: - Subsidiaries Particulars (a) The Company has provided loans and stood guarantee during the year and details of which are given below: (iii) The Company has made investments in, provided guarantee and granted loans, secured or unsecured, to companies or any other parties during the year, in respect of which: (b) The Company has been sanctioned working capital limits in excess of ₹5 crores, in aggregate, at points of time during the year, from banks or financial institutions on the basis of security of current assets. In our opinion, the quarterly returns filed by the Company with such banks or financial institutions are in agreement with the unaudited books of account of the Company of the respective quarters and no material discrepancies have been observed. NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL LARSEN & TOUBRO 12,616.00 - Others - Associates - Joint Venture - Subsidiaries above cases* NIL NIL NIL 5,255.52 LARSEN & TOUBRO For DELOITTE HASKINS & SELLS LLP (xx) The Company has fully spent the required amount towards Corporate Social Responsibility (CSR) and there are no unspent CSR amount for the year requiring a transfer to a Fund specified in Schedule VII to the Companies Act or special account in compliance with the provision of sub-section (6) of section 135 of the said Act. Accordingly, reporting under clause (xx) of the Order is not applicable for the year. Note EXPENSES: Total Income Other income[net] Revenue from operations INCOME: Continuing operations Statement of Profit and Loss for the year ended March 31, 2022 Integrated Annual Report 2021-22 377 M. M. CHITALE Independent Director (DIN 00101004) Company Secretary & Compliance Officer Membership No. FCS3939 SIVARAM NAIR A Mumbai, May 12, 2022 Whole-time Director & Chief Financial Officer (DIN 00019798) R. SHANKAR RAMAN (DIN 02255382) 2021-22 Chief Executive Officer & Managing Director 31 101000.41 3612.65 104613.06 31445.49 12293.75 12590.86 Purchase of stock-in-trade Construction materials consumed Cost of raw materials components consumed 33 Manufacturing, construction and operating expenses Profit before exceptional items and tax Depreciation,amortisation, impairment and obsolescence Sales, administration and other expenses 90615.77 3360.29 87255.48 crore 2020-21 Statement of Profit and Loss 32 22869.85 S. N. SUBRAHMANYAN Partner Sub-total - Current liabilities Current tax liabilities (net) Provisions Other current liabilities 51162.80 56157.29 2451.53 3317.63 26 Other financial liabilities 40321.48 44911.67 Due to others 448.30 473.67 Due to micro enterprises and small enterprises 25 TOTAL LIABILITIES Membership No. 39826 27 28888.84 SANJIV V. PILGAONKAR by the hand of Firm's Registration No. 117366W/W-100018 Chartered Accountants In terms of our report attached 1 to 65 29 30 NOTES FORMING PART OF THE FINANCIAL STATEMENTS 80704.68 87567.48 101388.23 168502.28 CONTINGENT LIABILITIES TOTAL EQUITY AND LIABILITIES 416.74 659.87 1650.38 1861.48 27474.76 28 1070.62 1226.68 Stores, spares and tools consumed 39(a)(i) 44(a) Tax expense of discontinued operations Profit before tax from discontinued operations Discontinued operations (2818.65) 3147.31 267.29 7879.45 Net profit after tax from continuing operations Exceptional items (net of tax) 22.77 Tax expense on exceptional items (2818.65) 290.06 59 Exceptional items before tax 5965.96 7612.16 Net profit after tax (before exceptional items) from continuing operations Net profit after tax from discontinued operations 2171.42 Net profit after tax from continuing operations & discontinued operations Other comprehensive income 159915.62 98177.80 39.36 39.36 58.02 58.02 (13.27) (19.51) 52.63 77.53 11797.79 8650.48 2548.75 11199.23 378 Carried forward - other comprehensive income Gain/(loss) on remeasurement of the defined benefits plan Income tax (expenses)/income on remeasurments of the defined benefits plan A Items that will not be reclassified to Profit or Loss: 7879.45 2129.25 323.70 (275.92) 6398.20 7396.88 Finance costs Employee benefits expense 69630.46 81565.35 9183.68 10517.85 Other manufacturing, construction and operating expenses 362.10 (1944.37) 21993.33 25166.38 Changes in inventories of finished goods, stock-in-trade and work-in-progress Sub-contracting charges 1701.07 2718.52 2982.68 2917.34 1754.24 2381.71 44(a) Deferred tax 1847.72 2405.17 44(a) Current tax Tax expenses 37 Trade payables: 36 34 8137.38 9741.41 82478.39 94871.65 Total Expenses 1150.68 1172.50 35 114.03 124.44 Lease liability 523.80 7 4084.58 27180.62 27049.50 440.07 420.59 48.01 11.26 70.83 147.29 47.29 47.29 408.36 589.64 238.71 571.50 2853.52 531.78 8198.54 31657.88 1140.30 Cash and cash equivalents 33331.60 36347.35 11 Trade receivables 22232.95 18478.22 10 Investments Financials assets 2877.57 3132.51 44670.29 46484.42 3898.29 3990.30 754.27 30565.92 7908.37 9 8 ASSETS: As at 31-3-2021 As at 31-3-2022 Note crore Balance Sheet Balance Sheet as at March 31, 2022 Integrated Annual Report 2021-22 375 Place: Mumbai Date: May 12, 2022 UDIN: 22039826AIVCQV7676 (Membership No. 39826) Partner Sanjiv V. Pilgaonkar (Firm's Registration No. 117366W/W-100018) Chartered Accountants For DELOITTE HASKINS & SELLS LLP Non-current assets Property, plant and equipment Capital work-in-progress Investment property 44(e) 569 4 54(b) 4 223 Inventories Current assets Sub-total - Non-current assets 12 Other non-current assets Other financial assets Loans Investments Financial assets Right-of-use assets Intangible assets under development Other Intangible assets Goodwill Deferred tax assets (net) (xix) On the basis of the financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the financial statements and our knowledge of the Board of Directors and Management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report indicating that Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due. 5718.23 Other bank balances 16646.73 12968.41 19 19: 61737.82 67114.05 280.91 61456.91 66833.04 18 281.01 17 As at 31-3-2021 As at 31-3-2022 Note crore LARSEN & TOUBRO Other non-current liabilities 53.98 Provisions 20 76.24 94.25 999.56 5232.49 24 Current maturities of long-term borrowings 6827.90 2097.39 23 Borrowings Financial liabilities Current liabilities Sub-total - Non-current liabilities 17473.12 13820.75 16817.22 655.90 13167.64 645.27 7.84 22 21 145.25 Other financial liabilities Lease liability Borrowings 16 TOTAL ASSETS Sub-total-Current assets Other current assets 62511.95 63756.12 2513.99 2182.44 15 Other financial assets 257.87 249.60 14 Loans 650.59 780.28 13 55129.23 49855.81 122017.86 115245.33 Financial liabilities Non- current liabilities Liabilities Total equity Other equity Equity share capital Equity EQUITY AND LIABILITIES: 3524.95 Balance Sheet as at March 31, 2022 (contd.) Statutory Financial Reports Discussion and Analysis Report Integrated Management Corporate Overview 376 159915.62 168502.28 Statements COMMITMENTS (capital and others) Corporate Overview Reserves and surplus Revenue is recognised when the control of the same is transferred to the customer and it is probable that the Company will collect the consideration to which it is entitled for the exchanged goods. Revenue from commissioning of complex plant and equipment is recognised either 'over time' or 'in time' based on an assessment of the transfer of control as per the terms of the contract. Revenue from construction/project related activity is recognised as follows: Cost plus contracts: Revenue from cost plus contracts is recognised over time and is determined with reference to the extent performance obligations have been satisfied. The amount of transaction price allocated to the performance obligations satisfied represents the recoverable costs incurred during the period plus the margin as agreed with the customer. Fixed price contracts: Contract revenue is recognised over time to the extent of performance obligation satisfied and control is transferred to the customer. Contract revenue is recognised at allocable transaction price which represents the cost of work performed on the contract plus proportionate margin, using the percentage of completion method. Percentage of completion is the proportion of cost of work performed to-date, to the total estimated contract costs. 385 Integrated Annual Report 2021-22 Notes forming part of the Financial Statements Revenue from sale of manufactured and traded goods including contracts for supply/commissioning of complex plant and equipment is recognised as follows: Notes forming part of the Financial Statements (contd.) Significant Accounting Policies (contd.) C. D. E. For contracts where the aggregate of contract cost incurred to date plus recognised profits (or minus recognised losses as the case may be) exceeds the progress billing, the surplus is shown as contract asset and termed as "Due from customers". For contracts where progress billing exceeds the aggregate of contract costs incurred to-date plus recognised profits (or minus recognised losses, as the case may be), the surplus is shown as contract liability and termed as "Due to customers". Amounts received before the related work is performed are disclosed in the Balance Sheet as contract liability and termed as "Advances from customer". The amounts billed on customer for work performed and are unconditionally due for payment i.e. only passage of time is required before payment falls due, are disclosed in the Balance Sheet as trade receivables. The amount of retention money held by the customers pending completion of performance milestone is disclosed as part of contract asset and is reclassified as trade receivables when it becomes due for payment. Impairment loss (termed as provision for foreseeable losses in the financial statements) is recognised in profit or loss to the extent the carrying amount of the contract asset exceeds the remaining amount of consideration that the Company expects to receive towards remaining performance obligations (after deducting the costs that relate directly to fulfill such remaining performance obligations). The Company recognises impairment loss (termed as provision for expected credit loss on contract assets in the financial statements) on account of credit risk in respect of a contract asset using expected credit loss model on similar basis as applicable to trade receivables. Revenue from property development activities is recognised when performance obligation is satisfied, customer obtains control of the property transferred and a reasonable expectation of collection of the sale consideration from the customer exists. Revenue from rendering of services is recognised over time as the customer receives the benefit of the Company's performance and the Company has an enforceable right to payment for services transferred. NOTE [1] (II) B. A. Revenue includes adjustments made towards liquidated damages and variation wherever applicable. Escalation and other claims, which are not ascertainable/acknowledged by customers are not taken into account. The Company transfers control of a good or service over time and therefore satisfies a performance obligation and recognises revenue over a period of time if one of the following criteria is met: (a) the customer simultaneously consumes the benefit of the Company's performance or (b) the customer controls the asset as it is being created/enhanced by the Company's performance or (c) there is no alternative use of the asset and the Company has either explicit or implicit right of payment considering legal precedents, In all other cases, performance obligation is considered as satisfied at a point in time. The revenue is recognised to the extent of transaction price allocated to the performance obligation satisfied. Transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer excluding amounts collected on behalf of a third party. The Company includes variable consideration as part of transaction price when there is a basis to reasonably estimate the amount of the variable consideration and when it is probable that a significant reversal of cumulative revenue recognised will not occur when the uncertainty associated with the variable consideration is resolved. Variable consideration is estimated using the expected value method or most likely amount as appropriate in a given circumstance. Payment terms agreed with a customer are as per business practice and the financing component, if significant, is separated from the transaction price and accounted as interest income. Costs to obtain a contract which are incurred regardless of whether the contract was obtained are charged-off in profit or loss immediately in the period in which such costs are incurred. Incremental costs of obtaining a contract, if any, and costs incurred to fulfil a contract are amortised over the period of execution of the contract in proportion to the progress measured in terms of a proportion of actual cost incurred to-date, to the total estimated cost attributable to the performance obligation. Significant judgments are used in: a. b. C. (i) Determining the revenue to be recognised in case of performance obligation satisfied over a period of time; revenue recognition is done by measuring the progress towards complete satisfaction of performance obligation. Determining the expected losses, which are recognised in the period in which such losses become probable based on the expected total contract cost as at the reporting date. Determining the method to be applied to arrive at the variable consideration requiring an adjustment to the transaction price. Revenue from operations Unbilled revenue represents value of services performed in accordance with the contract terms but not billed. Revenue from contracts for rendering of engineering design services and other services which are directly related to the construction of an asset is recognised on the same basis as stated in (B) supra. F. Commission income is recognised as the terms of the contract are fulfilled. NOTE [1] (II) LARSEN & TOUBRO Significant Accounting Policies (contd.) Own manufactured PPE is capitalised at cost including an appropriate share of overheads. Administrative and other general overhead expenses that are specifically attributable to construction or acquisition of PPE or bringing the PPE to working condition are allocated and capitalised as a part of the cost of the PPE. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost can be measured reliably. PPE not ready for the intended use on the date of the Balance Sheet are disclosed as "capital work-in-progress". (Also refer to the policies on leases, borrowing costs, impairment of assets and foreign currency transactions infra). Depreciation is recognised using straight-line method so as to write off the cost of the assets (other than freehold land and capital work-in-progress) less their residual values over their useful lives specified in Schedule II to the Act, or in the case of assets where the useful life was determined by technical evaluation, over the useful life so determined. Depreciation charge for impaired assets is adjusted in future periods in such a manner that the revised carrying amount of the asset is allocated over its remaining useful life. Depreciation method is reviewed at each financial year end to reflect the expected pattern of consumption of the future economic benefits embodied in the asset. The estimated useful life and residual values are also reviewed at each financial year end and the effect of any change in the estimates of useful life/residual value is accounted on prospective basis. Where cost of a part of the asset ("asset component") is significant to total cost of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part is determined separately and such asset component is depreciated over its separate useful life. Depreciation on additions to/deductions from, owned assets is calculated pro rata to the period of use. PPE is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition is recognised in the Statement of Profit and Loss in the same period. (h) Investment property Properties, including those under construction, held to earn rentals and/or capital appreciation are classified as investment property and are measured and reported at cost, including transaction costs and borrowing cost capitalised for qualifying assets, in accordance with the Company's accounting policy. Policies with respect to depreciation, useful life and derecognition are followed on the same basis as stated for PPE supra. (i) Intangible assets Intangible assets are recognised when it is probable that the future economic benefits that are attributable to the asset will flow to the Company and the cost of the asset can be measured reliably. Intangible assets are stated at original cost net of tax/duty credits availed, if any, less accumulated amortisation and cumulative impairment. All directly attributable costs and other administrative and other general overhead expenses that are specifically attributable to acquisition of intangible assets are allocated and capitalised as a part of the cost of the intangible assets. Research and development expenditure on new products: (i) Notes forming part of the Financial Statements (contd.) For performance obligation satisfied over time, the revenue recognition is done by measuring the progress towards complete satisfaction of performance obligation. The progress is measured in terms of a proportion of actual cost incurred to-date, to the total estimated cost attributable to the performance obligation. Statutory Financial Reports Statements Integrated (f) G. Course fees/subscription income is recognised over time as per the course/subscription duration and agreed terms. H. Other operational revenue represents income earned from the activities incidental to the business and is recognised when the performance obligation is satisfied and right to receive the income is established as per the terms of the contract. (ii) Other income A. Interest income on investments and loans is accrued on a time basis by reference to the principal outstanding and the effective interest rate including interest on investments classified as fair value through profit or loss or fair value through other comprehensive income. Interest receivable on customer dues is recognised as income in the Statement of Profit and Loss on accrual basis provided there is no uncertainty of realisation. B. C. D. Dividend income is accounted in the period in which the right to receive the same is established. Government grants, which are revenue in nature and are towards compensation for the qualifying costs incurred by the Company, are recognised as other income/reduced from underlying expenses in profit or loss in the period in which such costs are incurred. Government grants related to an asset are reduced from the cost of an asset until the asset is ready to use and the grant post that is presented as deferred income. Subsequently the grant is recognised as income in profit or loss on a systematic basis over the expected useful life of the related asset. Government grant receivable in the form of duty credit scrips is recognised as other income in the Statement of Profit and Loss in the period in which the application is made to the government authorities and to the extent there is no uncertainty towards its receipt. Other items of income are accounted as and when the right to receive such income arises and it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Exceptional items An item of income or expense which by its size, type or incidence requires disclosure in order to improve an understanding of the performance of the Company is treated as an exceptional item and disclosed as such in the financial statements. (g) Property, plant and equipment (PPE) 386 Corporate Overview Management Discussion and Analysis Report (ii) Significant Accounting Policies (contd.) Notes forming part of the Financial Statements (contd.) Dividends paid Interest paid (including cash flows from interest rate swaps) Net cash (used in)/from financing activities Cash and cash equivalents at beginning of the year [refer Note 14] Effect of exchange rate changes on cash and cash equivalents Cash and cash equivalents at end of the year [refer Note 14] Notes: 1. Statement of Cash Flows has been prepared under the indirect method as set out in the Indian Accounting Standard (Ind AS) 7 "Statement of Cash Flows" as specified in the Companies (Indian Accounting Standards) Rules, 2015. 2. Fixed assets include property, plant and equipment, investment property and intangible assets adjusted for movement of (a) capital work-in-progress for property, plant and equipment and investment property and (b) Intangible assets under development during the year. 3. Previous year's figures have been regrouped/reclassified wherever applicable. Principal repayment on lease liability [refer Note 43] In terms of our report attached Chartered Accountants Firm's Registration No. 117366W/W-100018 by the hand of SANJIV V. PILGAONKAR Partner Membership No. 39826 Mumbai, May 12, 2022 S. N. SUBRAHMANYAN Chief Executive Officer & Managing Director (DIN 02255382) For DELOITTE HASKINS & SELLS LLP 3524.95 5718.23 (57.27) 143.82 66.73 (13.24) (14.36) (96.33) (117.04) (2528.38) (3650.89) (1595.23) (1895.69) (8360.36) (6698.15) Net (decrease)/increase in cash and cash equivalents (A + B + C) 2164.30 3524.95 139.52 3442.70 28.98 R. SHANKAR RAMAN Whole-time Director & Chief Financial Officer (DIN 00019798) SIVARAM NAIR A Company Secretary & Compliance Officer Membership No. FCS3939 Level 2 inputs are inputs, other than quoted prices included in level 1, that are observable for the assets or liabilities, either directly or indirectly; and • Level 3 inputs are unobservable inputs for the valuation of assets or liabilities. Above levels of fair value hierarchy are applied consistently and generally, there are no transfers between the levels of the fair value hierarchy unless the circumstances change warranting such transfer. (c) Presentation of financial statements The Balance Sheet, the Statement of Profit and Loss and the Statement of Changes in Equity are prepared and presented in the format prescribed in the Schedule III to the Companies Act, 2013 (the Act). The Statement of Cash Flows has been prepared and presented in accordance with Ind AS 7 "Statement of Cash Flows". The disclosures with respect to items in the Balance Sheet and Statement of Profit and Loss, as prescribed in the Schedule III to the Act, are presented by way of notes forming part of the financial statements along with the other notes required to be disclosed under the notified Accounting Standards and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended. Amounts in the financial statements are presented in Indian Rupee in crore [1 crore = 10 million] rounded off to two decimal places as permitted by Schedule III to the Act. Per share data are presented in Indian Rupee to two decimals places. (d) Operating cycle for current and non-current classification Operating cycle for the business activities of the Company covers the duration of the specific project or contract or product line or service including the defect liability period wherever applicable and extends up to the realisation of receivables (including retention monies) within the agreed credit period normally applicable to the respective lines of business. (e) Revenue recognition Revenue from contracts with customers is recognised when a performance obligation is satisfied by transfer of promised goods or services to a customer. 384 Corporate Overview Management Integrated Discussion and Analysis Report Statutory Financial Reports Statements LARSEN & TOUBRO Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at measurement date; NOTE [1](ii) . observable and the significance of the inputs to the fair value measurement in its entirety: M. M. CHITALE Independent Director (DIN 00101004) 383 Integrated Annual Report 2021-22 Notes forming part of the Financial Statements Notes forming part of the Financial Statements NOTE [1](1) Company overview: Larsen & Toubro Limited ("the Company") is an Indian multinational engaged in EPC Projects, Hi-Tech Manufacturing and Services. The Company operates in over 50 countries worldwide. A strong, customer-focused approach and the constant quest for top-class quality have enabled the Company to attain and sustain leadership in its major lines of business for over eight decades. The Company is engaged in core, high impact sectors of the economy and its integrated capabilities span the entire spectrum of 'design to delivery'. Every aspect of Company's businesses is characterised by professionalism and high standards of corporate governance. Sustainability is embedded into its long-term strategy for growth. The Company's manufacturing footprint extends across eight countries in addition to India. The Company has several international offices and a supply chain that extends around the globe. NOTE [1] (II) Significant Accounting Policies (a) Statement of compliance The Company's financial statements have been prepared in accordance with the provisions of the Companies Act, 2013 and the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 and amendments thereto issued by Ministry of Corporate Affairs under section 133 of the Companies Act, 2013. In addition, the guidance notes/announcements issued by the Institute of Chartered Accountants of India (ICAI) are also applied except where compliance with other statutory promulgations require a different treatment. These financials statements have been approved for issue by the Board of Directors at its meeting held on May 12, 2022. (b) Basis of accounting The Company maintains its accounts on accrual basis following historical cost convention, except for certain assets and liabilities that are measured at fair value in accordance with Ind AS. Fair value measurements are categorised as below based on the degree to which the inputs to the fair value measurements are • Settlement of derivative contracts related to borrowings Expenditure on research is expensed under respective heads of account in the period in which it is incurred. A. the technical feasibility of completing the intangible asset so that it will be available for use or sale; 49 Basic earnings per equity share (*) Earnings per share (EPS) of ₹ 2 each from continuing operations: 8.83 394.69 12192.48 7843.24 Total comprehensive income for the year (36.21) 56.09 Other comprehensive income for the year (net of tax) (2.97) (0.77) Income tax (expenses)/income on cost of hedging reserve 11.80 3.06 Cost of hedging reserve 148.69 2.29 22.41 Diluted earnings per equity share (*) 49 84.02 56.09 229 49 Diluted earnings per equity share (*) 49 Basic earnings per equity share (*) Earnings per share (EPS) of 2 each from continuing operations & discontinued operations: 61.54 61.61 49 Diluted earnings per equity share (*) 49 Basic earnings per equity share (*) Earnings per share (EPS) of 2 each from discontinued operations: 22.39 56.03 60.58 (69.74) (8.59) Income tax (expenses)/income on effective portion of gains/(losses) on hedging instruments in a cash flow hedge 2020-21 2021-22 Note crore LARSEN & TOUBRO B Items that will be reclassified to Profit or Loss: Brought forward - other comprehensive income Statement of Profit and Loss for the year ended March 31, 2022 (contd.) Financial Statements Reports Report Discussion and Analysis Statutory Integrated Management Corporate Overview Items of Other Comprehensive Income 58.02 Face value per equity share (*) 39.36 (177.90) 218.43 69.17 Effective portion of gains/(losses) on hedging instruments in a cash flow hedge 13.14 (19.90) (4.42) 6.69 Income tax (expenses)/income on exchange differences in translating the financial statements of foreign operations 17.56 (26.59) Exchange differences in translating the financial statements of foreign operations 184.67 (137.20) (54.79) 40.70 Income tax (expenses)/income on debt instruments through other comprehensive income 239.46 Debt instruments through other comprehensive income Development expenditure on new products is capitalised as intangible asset, if all of the following can be demonstrated: 56.03 2.00 NOTES FORMING PART OF THE FINANCIAL STATEMENTS Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is determined: (i) in the case of an individual asset, at the higher of the fair value less costs to sell and the value-in-use; and (ii) in the case of a cash generating unit (the smallest identifiable group of assets that generates independent cash flows), at the higher of the cash generating unit's fair value less costs to sell and the value-in-use. The amount of value-in-use is determined as the present value of estimated future cash flows from the continuing use of an asset, which may vary based on the future performance of the Company and from its disposal at the end of its useful life. For this purpose, the discount rate (pre-tax) is determined based on the weighted average cost of capital of the company suitably adjusted for risks specified to the estimated cash flows of the asset. If recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, such deficit is recognised immediately in the Statement of Profit and Loss as impairment loss and the carrying amount of the asset (or cash generating unit) is reduced to its recoverable amount. When an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the revised estimate of its recoverable amount, such that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash generating unit) in prior years. A reversal of an impairment loss is recognised immediately in the Statement of Profit and Loss. As at the end of each financial year, the carrying amounts of PPE, investment property, intangible assets and investments in subsidiary, associate and joint venture companies are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If such indication exists, PPE, investment property and intangible assets are tested for impairment so as to determine the impairment loss, if any. Intangible assets with indefinite life are tested for impairment each year. (k) Employee Benefits (ii) Short-term employee benefits: Employee benefits such as salaries, wages, short-term compensated absences, bonus, ex-gratia and performance-linked rewards falling due wholly within twelve months of rendering the service are classified as short-term employee benefits and are expensed in the period in which the employee renders the service. Post-employment benefits: A. Defined contribution plans: The Company's superannuation scheme, state governed provident fund scheme, employee state insurance scheme and employee pension scheme are defined contribution plans. The contribution paid/payable under the schemes is recognised during the period in which the employee renders the service. B. Defined benefit plans: The employees' gratuity fund schemes and employee provident fund schemes managed by board of trustees established by the Company, the post-retirement medical care plan and the company pension plan represent defined benefit plans. The present value of the obligation under defined benefit plans is determined based on actuarial valuation using the Projected Unit Credit Method. (i) (j) Impairment of assets Amortisation on impaired assets is provided by adjusting the amortisation charge in the remaining periods so as to allocate the asset's revised carrying amount over its remaining useful life. Intangible assets are amortised on straight-line basis over the estimated useful life. The method of amortisation and useful life are reviewed at the end of each financial year with the effect of any changes in the estimate being accounted for on a prospective basis. B. the Company has intention to complete the intangible asset and use or sell it; C. the Company has ability to use or sell the intangible asset; D. E. F. the manner in which the probable future economic benefits will be generated including the existence of a market for output of the intangible asset or intangible asset itself or if it is to be used internally, the usefulness of intangible assets; the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and the Company has ability to reliably measure the expenditure attributable to the intangible asset during its development. Development expenditure that does not meet the above criteria is expensed in the period in which it is incurred. 387 Integrated Annual Report 2021-22 Notes forming part of the Financial Statements Notes forming part of the Financial Statements (contd.) NOTE [1] (II) Significant Accounting Policies (contd.) Intangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as "intangible assets under development". The obligation towards defined benefit plans is measured at the present value of the estimated future cash flows using a discount rate based on the market yield on government securities of a maturity period equivalent to the weighted average maturity profile of the defined benefit obligations at the Balance Sheet date. Re-measurement, comprising actuarial gains and losses, the return on plan assets (excluding amounts included in net interest on the net defined benefit liability or asset) and any change in the effect of asset ceiling (if applicable) is recognised in other comprehensive income and is reflected in retained earnings and the same is not eligible to be reclassified to profit or loss. 388 *crore M. M. CHITALE Independent Director (DIN 00101004) Company Secretary & Compliance Officer Membership No. FCS3939 SIVARAM NAIR A Whole-time Director & Chief Financial Officer (DIN 00019798) R. SHANKAR RAMAN Chief Executive Officer & Managing Director (DIN 02255382) S. N. SUBRAHMANYAN Mumbai, May 12, 2022 Membership No. 39826 Partner SANJIV V. PILGAONKAR by the hand of Firm's Registration No. 117366W/W-100018 Chartered Accountants For DELOITTE HASKINS & SELLS LLP In terms of our report attached 1 to 65 379 83.93 2.00 Integrated Annual Report 2021-22 A. Equity share capital 280.91 1,40,45,55,297 0.13 6,63,275 280.78 1,40,38,92,022 280.91 0.10 281.01 1,40,45,55,297 4,73,826 1,40,50,29,123 crore 2020-21 Number of shares crore 2021-22 Number of shares Statement of changes in Equity B. Other equity Issued, subscribed and fully paid up equity shares outstanding at the end of the year Issued, subscribed and fully paid up equity share outstanding at the beginning of the year Add: Shares issued on exercise of employee stock options during the year Particulars Statement of Changes in Equity for the year ended March 31, 2022 (6823.60) PPE is recognised when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. PPE is stated at original cost net of tax/duty credits availed, if any, less accumulated depreciation and cumulative impairment, if any. All directly attributable costs related to the acquisition of PPE and, borrowing costs in case of qualifying assets are capitalised in accordance with the Company's accounting policy. (Repayments of)/Proceeds from other borrowings (net) [refer Note 43] Corporate Overview Management Integrated Statutory Discussion and Analysis Report Reports Financial Statements Statement of Changes in Equity for the year ended March 31, 2022 (contd.) Particulars Balance as at 1-4-2021 380 Profit for the year (c) Total comprehensive income for the year (c+d) Issue of equity shares Transfer to non-financial assets/liabilities Transfer from/(to) general reserve LARSEN & TOUBRO crore Reserves and surplus Other comprehensive income (d) 61456.91 300.22 9.00 214.52 (1.86) (1.86) 6 5 (6.54) (394.88) 401.42 (5.76) (5.76) 260.00 (260.00) (2527.66) (2527.66) (1123.23) (1123.23) 10.84 (25.77) 260.00 8667.65 87.62 138.65 26072.13 25722.05 Capital Capital reserve on reserve business combination Capital Employee Debenture 87.62 138.65 26072.13 25722.05 9.00 214.52 300.22 61456.91 7879.45 7879.45 58.02 (19.90) 62.87 (137.20) (36.21) 7937.47 (19.90) 62.87 (137.20) 7843.24 51.09 51.09 8667.65 68.05 (25.77) 260.00 comprehen- sive income redemption reserve Securities premium share General options redemption reserve Foreign Retained currency earnings translation Items of Other Comprehensive Income Debt instruments Total other Hedging through equity reserve other reserve (net) reserve 10.84 1.12 68.05 184.67 instruments Total other through other (4713.97) reserve reserve comprehen- reserve sive income 10.52 (25.77) 8599.60 99.92 533.53 25669.50 16957.17 (4.14) (61.31) Balance as at 1-4-2020 translation Hedging currency Debt Capital Particulars reserve Capital reserve on business combination Capital redemption Securities premium share Employee Debenture Foreign General reserve options (net) redemption reserve Retained earnings 115.55 51894.57 Change on account of business combination 0.32 39.36 13.14 157.52 184.67 394.69 Total comprehensive income for the year (a+b) Issue of equity shares Transfer to non-financial assets/liabilities Transfer from/(to) general reserve Employee share options (net) Transfer to capital redemption reserve Special dividend Dividend paid for previous year Balance as at 31-3-2021 11837.15 13.14 157.52 I 12192.48 Other comprehensive income (b) 11797.79 1.21 838.62 120.17 960.32 Restated balance at 1-4-2020 10.84 (25.77) 8599.60 99.92 533.53 25670.71 17795.79 (4.14) 58.86 115.55 52,854.89 Profit for the year (a) I 11797.79 1.12 equity (7.30) 9.06 Net proceeds/(payments) for transfer of discontinued operations (net of tax) (Purchase)/sale of current investments (net) Change in other bank balances and cash not availabe for immediate use Long term deposits/loans (given) - subsidiaries, associates, joint venture companies and third parties Long term deposits/loans repaid - subsidiaries, associates, joint venture companies and third parties Short term deposits/loans (given)/repaid (net) - subsidiaries, associates, joint venture companies and third parties (2296.72) (1951.11) 5998.79 Net proceeds from transfer of NxT business undertaking 9560.84 (781.32) 60.45 (542.83) 631.80 (2272.05) 785.02 107.58 (49.24) 4012.85 (1410.29) Divestment of stake in subsidiary companies Investment in subsidiaries, associates and joint venture companies Sale of fixed assets (including advance received) 8601.05 Adjustments for: (Increase)/decrease in trade and other receivables (Increase)/decrease in inventories (8128.79) (219.84) 2519.02 26.90 Increase/decrease) in trade payables and customer advances 7253.98 364.98 Cash (used in)/generated from operations 8295.51 11511.95 Direct taxes refund/(paid) [net] Net cash (used in)/from operating activities B. Cash flow from investing activities: Purchase of fixed assets 10845.76 (13127.63) 62.41 (1677.12) 857.25 Financial Statements Statement of Cash Flows for the year ended March 31, 2022 (contd.) LARSEN & TOUBRO crore 2020-21 Interest paid on lease liability C. Cash flow from financing activities: Proceeds from fresh issue of share capital (including share application money) [net] 10.97 15.85 Proceeds from non-current borrowings [refer Note 43] 450.00 9117.73 Repayment of non-current borrowings [refer Note 43] (18.00) (3396.88) Employee share options (net) Reports 9390.16 Discussion and Analysis Report Integrated 12.32 (1743.04) 1698.96 Interest received Dividend received from subsidiaries and joint venture companies Dividend received from other investments Net cash (used in)/from investing activities (147.85) 848.71 158.58 822.08 1615.19 1016.03 3.74 4525.87 15.34 (2723.17) 382 Corporate Overview Management Statutory Operating profit before working capital changes 2021-22 Non-cash items related to discontinued operations Partner Membership No. 39826 Mumbai, May 12, 2022 S. N. SUBRAHMANYAN Chief Executive Officer & Managing Director (DIN 02255382) R. SHANKAR RAMAN Whole-time Director & Chief Financial Officer (DIN 00019798) SANJIV V. PILGAONKAR SIVARAM NAIR A M. M. CHITALE Independent Director (DIN 00101004) 381 Integrated Annual Report 2021-22 Statement of Cash Flows for the year ended March 31, 2022 A. Cash flow from operating activities: Statement of Cash Flows crore Company Secretary & Compliance Officer Membership No. FCS3939 by the hand of Firm's Registration No. 117366W/W-100018 Chartered Accountants 7.30 2.83 30 9.06 Dividend paid for previous year (2528.38) (2528.38) Balance as at 31-3-2022 (25.77) 260.00 8718.74 89.38 138.65 26079.43 31131.14 (10.90) 278.51 163.02 66833.04 In terms of our report attached For DELOITTE HASKINS & SELLS LLP 2021-22 2020-21 10.84 Continuing operations Interest income 1754.24 2381.71 (1045.82) (948.73) (Profit)/loss on sale of fixed assets (net) (14.78) (477.41) (Profit)/loss on sale of investments (net) [including fair valuation] (506.09) (1076.69) 0.29 277.71 Employee stock option-discount forming part of employee benefits expense 43.89 Profit before tax (excluding exceptional items) from: 49.11 Finance cost 51.27 Impairment of non-current investment Effect of exchange rate changes on cash and cash equivalents (18.95) Discontinued operations 11199.23 Profit before tax including discontinued operations (excluding exceptional items) Adjustments for: 19336.61 Gain on transfer of discontinued operations (11078.33) Dividend received 9741.41 Depreciation, amortisation, impairment and obsolescence (net) (28.09) (122.69) (1619.06) (1034.40) Exchange difference on items grouped under financing/investing activities 8137.38 1150.68 9741.41 1172.50 Particulars Operating activities Sale/(Purchase) of Other investments Treasury and dividend income ESOP Proceeds (net of buyback expenses) Sources of Funds crore 1,853 FY 20-21 FY 21-22 5,999 (13,115) 2,468 4,075 9,561 20.5% There was a net increase of 2,164 crore in the cash balances as at March 31, 2022 as compared to the beginning of the year. PAT 11,798 7,879 16 Net Worth RONW (%) Fund Flow Statement EPS (in ) 67,114 12.2% 84.02 56.09 Liquidity & Gearing Business operations generated cash flows of 5,999 crore during the year as compared to ₹9,561 crore in the previous year. The drop is mainly due to higher deployment of funds to support growing business volumes. The cash generated through the sale of short term investment at 4,075 crore, treasury income of 852 crore and dividend income from S&A companies at ₹1,615 crore has been utilised towards repayment of borrowings (incl. repayment of lease liability) of * 4,236 crore and net investment in S&A companies at *667 crore, in addition to capex payment of 1,350 crore, dividend payment of 2,528 crore and interest payment of 1,608 crore respectively. 61,738 11 1,608 12,553 (1,685) 12,553 Total borrowings as at March 31, 2022 reduced to ₹20,298 crore as compared to 24,474 crore in the previous year. The loan portfolio of the Company comprises a mix of Rupee and suitably hedged foreign currency loans. The gross debt-equity ratio reduced to 0.30:1 as at March 31, 2022 from 0.40:1 as at March 31, 2021. The Company has become debt free after considering cash and cash equivalent during the year. 33 Integrated Annual Report 2021-22 Mauritius LRT Phase 1 2164 | INFRASTRUCTURE BUSINESS Sector Performance in FY 2021-22 India continues to invest heavily in infrastructure development as the primary driver of growth. This is not only in terms of adopting a long-term integrated focus on large infrastructure projects but also facilitates quick implementation by providing the necessary regulatory and timely financial support. This has augured well for the country and as a multiplier effect, evidenced positive sentiment on private capex as well. Over the years, the Union Government continues to provide policy support for Infrastructure development in India. In the Union Budget 2021, to support initiatives such as 'Housing for All' and 'Smart Cities Mission', the Government allocated 13,750 crore to AMRUT and Smart Cities Mission. In March 2021, the Parliament passed a bill to set up the National Bank for Financing Infrastructure and Development (NaBFID) to fund infrastructure projects in India. 9,055 Additionally, in the Union Budget 2021, the Government announced the Pradhan Mantri Atmanirbhar Swasth Bharat Yojana (PMANSY), which will entail an outlay of ₹64,180 crore over six years to strengthen the existing 'National Health Mission'. The Government also announced 18,998 crore for metro projects. The Government announced 305,984 crore over the next five years for a revamped, reforms-based and result-linked new power distribution sector scheme. As a follow up, the Union Budget 2022 has focused on high impact areas and accelerating the capital expenditure cycle by providing for a sharp increase in capex outlay by 35.4% (from 5.54 lakh crore in FY 2021-22 to 7.50 lakh crore in FY 2022-23), to propel economic growth. 位置 (1,685) 140 1,910 Capital expenditure (net) 149 1,350 Repayment of Borrowings 1,153 4,236 Increase/(Decrease) in cash balance Utilisation of Funds (net of Additional Borrowings) (8,688) 667 Dividend paid 3,651 2,528 Interest paid Net investment/(divestment) 8,309 PBDIT as % of net revenue 19% (ii) 1.29 1.51 Gross Debt Equity Ratio (i) 2020-21 2021-22 % Change Sr. No. Particulars hereunder along with the explanation for the significant changes i.e. change of 25% or more as compared to the previous financial year: LARSEN & TOUBRO Financial Statements Reports Report Discussion and Analysis Statutory Integrated Management Corporate Overview 2,968 The Prime Minister announced a national master plan for multi-modal connectivity in October 2021, with the goal of developing infrastructure, to lower logistic costs and improve efficiency. The Government's PM Gati Shakti initiative is expected to bring together 16 Ministries and is expected to help in taking care of long-standing issues, such as disjointed planning, lack of standardisation, problems with clearances, and timely creation and utilisation of infrastructure capacities. This announcement follows two major steps taken by the Government towards advancing Indian infrastructure, namely, the National Infrastructure Pipeline and National Monetisation Pipeline, helping generate funds to support the capex. Payment to/(receipt from) minority interest (net) (796) 1,020 Increase/(Decrease) in cash balance Utilisation of Funds 11.5% 2,141 36,140 20,969 The total borrowings as at March 31, 2022 was lower at 123,468 crore as compared to 132,605 crore as at March 31, 2021. The major decrease is in borrowings of Parent entity, Financial Services, Nabha and Hyderabad Metro. The gross debt equity ratio decreased to 1.29:1 as at March 31, 2022 from 1.51:1 as at March 31, 2021. The net debt equity ratio improved to 0.81:1 as at March 31, 2022 from 1:1 as at March 31, 2021. Details of significant changes in key financial ratios along with explanation: In compliance with the requirement of listing regulations, the key financial ratios of the Group have been provided 32 314 11.6% (iii) Net Working Capital % of Share of International Order Inflow (%) 26% crore FY 20-21 FY 21-22 1,26,414 1,18,956 15% Revenue Order Inflow Share of International Revenue (%) 1,01,000 20% Order Book 3,08,101 3,15,567 Share of International Order Book (%) 18% 87,255 26% PBDIT Parameters During the year, L&T Hydrocarbon Engineering Limited, a wholly-owned subsidiary company was merged with the Company pursuant to the approval of the Scheme of Arrangement from National Company Law Tribunal, Mumbai Bench (NCLT) with appointed date of April 1, 2021. Accordingly, previous year's figures have been restated for comparative purpose. 22.3% 19.9% 14.2% 1.3% 10.7% Sales (Excluding Financial Services & Corporate) (iv) Brief Summary of Performance at Standalone level: Interest Coverage ratio* 5.14 36.8% (excludes Financial Services and Finance Lease Activity) *The significant change in the Interest Coverage Ratio for FY 2021-22 has been due to improvement in profits and reduction in average borrowings, especially at L&T Standalone level. II. L&T STANDALONE L&T's standalone financials reflect the performance of Infrastructure, Hydrocarbon, Power, Heavy Engineering, Defence Engineering and Others. The Others segment comprises Realty, Construction & Mining Machinery, Rubber Processing Machinery, Smart World & Communication and Digital Businesses. 3.76 The Government's thrust for bi-lateral co-operation bodes well for the construction industry. In November 2021, India, US, Israel and the UAE established a new quadrilateral economic forum to focus on infrastructure development projects in the region. To meet the objective of a USD 5 Trillion Economy by 2025, Infrastructure spend will be the key driver. The Buildings & Factories (B&F) business is an industry leader in Design & Engineering, Procurement and Construction (EPC) of projects ranging from airports, hospitals, stadiums, retail spaces, educational institutions, IT parks, office buildings, data centers, high-rise structures to mass housing complexes, cement plants, industrial warehouses, test tracks and other light factory structures. The business has a track record of building the tallest, largest, and most complex structures across India and overseas. Saudi Arabia, the GCC region's largest economy in 2021, has begun to ramp up tendering on its Public Investment Fund (PIF) A growing population and rising burden of new diseases boosts the demand for health care systems in the country. The Health BU saw prospects materializing for construction of hospitals. While the country requires enormous investments in the expansion and building of new airports to handle expanding traffic and boost regional connectivity, with the onset of the pandemic, the investment decisions got delayed. As COVID-19 restrictions were gradually lifted, many parts of the economy witnessed robust activity and private sector capex also showed signs of revival. India has emerged as the fastest-growing major economy in the world and is expected to be one of the top three economic powers in the world over the next 10-15 years, which augurs well for the B&F business vertical that is dependent equally on the public and the private sector investments. Business Environment Dedicated competency cells, advanced formwork systems, mechanised project execution, a wide network of consultants and vendors, digitised project control and a talented pool of employees help the business in sustaining its leadership position over the years. The Buildings & Factories business offers total turnkey solutions with in-house structural & architectural design using advanced systems like BIM 4D, 5D and BIM 360 field. The Engineering Design and Research Centre (EDRC), supports various business units with efficient engineering solutions and has proven capabilities in the Data Centre segment as well. Patna Medical College and Hospital Statements LARSEN & TOUBRO Financial Statutory Reports Report Discussion and Analysis Integrated Management Corporate Overview Shop and Dine 15 Hydearbad International Airport The Infrastructure segment clocked a gross revenue of *73,560 crore for FY 2021-22, registering growth of 18.7% over the previous year. Growth was mainly on account of pick up in execution momentum of a strong opening Order Book. Revenue from international operations constituted 23% of the total revenues, compared to 25% in the previous year, with some large value orders getting substantially completed. The segment's operating margin reduced from 8.5% to 8.2% mainly due to the impact of high commodity prices and increased provisions on contract assets and customer receivables. The funds employed by the segment at 24,234 crore as at March 31, 2022 registered a decline of 3.7% vis-à-vis March 31, 2021, with receipt of advances in large value projects and better vendor credit management. The increase in inventory levels to sustain the operations from headwinds in supply chain also impacted the funds employed to an extent. The Central Vista Redevelopment Infrastructure Plan involving multiple projects added prospects for the Public Spaces BU. BUILDINGS & FACTORIES The business is organised into following business units (BUS): Public Spaces: Provides design and execution of special structures like tall statues, metro stations, convention centres, marquee buildings, hotels, malls, integrated development and educational institutions. Airports: Offers design-and-build solutions for passenger & cargo buildings and allied service buildings, with integrated airport system solutions like baggage-handling systems, passenger-flow monitoring system, passenger boarding bridges, visual docking guidance systems and other facilities. Factories: This business unit is a one-stop solution for the EPC requirements for cement plants, automobile plants, EV manufacturing, glass & paint manufacturing, warehouses, automobile test tracks and food processing plants. Health: This BU handles the turnkey Design & Build solutions of hospitals, medical and nursing colleges. Healthcare infrastructure is delivered with end-to-end healthcare facilities, including medical equipment, right from concept to commissioning. Residential Buildings: This unit is a prime EPC solutions provider of elite, affordable and mass housing projects. ITOS & Datacentres: Focuses on providing concept- to-commissioning services for setting up Data Centers, leveraging its strong mechanical, electrical and plumbing (MEP) competencies. It also offers turnkey office space solutions for Information Technology and Office spaces. B&F Fast: Responsible for exploring and creating value from advanced construction technologies such as prefabricated prefinished volumetric construction, modular construction, structural steel construction, and 3D printing that will fast track project delivery. 36 Overview The ITOS segment looked subdued in the initial quarters with very few large prospects and most of the large ITOS majors deferring new investments. The year ended with the receipt of an international order by the BU. Indian real estate ended the fiscal on a very strong footing, registering one of the highest growth in recent times, positively impacting the business. However, Central & State Government prospects under 'Housing for All scheme' did not pick up as anticipated during the period. The Factories BU saw traction with improved private capex in the green energy and related segments like electric scooter factory. Cement manufacturing and industrial chemicals like paints are also gaining traction. Other key achievements: The business also achieved important milestones in the execution of major landmark projects: • Delhi International Airport - Ph 3A – T1, Arrival Part A opened for passenger movement in February 2022 • Chennai Airport- Commissioned the Arrival Lounge for public use • 1,30,000 Cum Engineered Fill completed in record time of 5 months at Shri Ram Temple Project, Ayodhya . Prestige Song of the South project in Bengaluru Completion handing over of FCS ADE Facility to DRDO in a record time of 45 days of Housing & Urban Affairs, Government of India towards Volumetric (3D) Concrete Printing Technology (VCPT). With the technology certification from the Government of India's Apex Body, L&T is planning to offer this innovative technology to all its prestigious customers and implement in its ongoing projects. A structured Lean Practices Implementation drive is carried out across major projects in the business. Some of the Lean Initiatives being implemented are Planned Percentage Complete (PPC), Last Planner System (LPS), Constraint Identification, Weekly Progress Tracking, Variance & Root Cause Analysis, Workmen Performance Measurement & Reward System, Work Sampling Technique and 5S system implementation to remove root cause of poor housekeeping. Extensive training programs are conducted for staff and workmen to adopt these practices. In addition to the existing set of digital tools to monitor project progress, quality, safety and workmen mobilisation, some more applications like Procurement Tracker, Material Wastage Control Solution, Integrated Gate Entry System, and Workforce Management Solutions were developed and implemented to improve procurement turn-around time, reduce wastage, track material movement, and enhance workmen productivity. The business has inhouse developed and introduced 'Safety Screen System' in all new high-rise residential structures to significantly enhance the safety of workers while working at high altitude. Various training programs, for staff and workmen, have been conducted throughout the year to inculcate a pro-safety culture in the organisation. 38 3,388 To provide impetus for India's ambitious 'Housing for All' initiative, the business has been extensively exploring 3D Concrete printing, which is significantly new and radically different from conventional construction methodology. With extensive research and after obtaining design validation and structural stability certification from Indian Institute of Technology, Madras (IIT-M), the business printed a G+1 reinforced concrete building in the previous year. It has received Performance Appraisal Certification from Buildings Materials & Technology Promotion Council (BMTPC), Ministry od • • AIIMS Guntur, Mangalagiri The B&F Fast division has started expanding into the market with jobs from Central Government agencies and other structural steel buildings with some private players. The business is now exploring to exploit its expertise in technologies like 3D printing, PPVC, etc. Investments in the GCC region remained muted during the financial year. Major Achievements Orders won: • SCB Medical College and Hospital, Cuttack •IT/Hi-Tech Park at Bangladesh • • NXTRA data center at Chennai Prestige City Project, Bengaluru Super Specialty Hospital at Warangal 37 Integrated Annual Report 2021-22 LnT Innovation Campus - Chennai Projects commissioned: • AllMS Hospital at Gorakhpur •Indira Gandhi Hospital at Dwarka • Post a six-year slowdown triggered by the crash in oil prices in 2014 and deepened by the impact of COVID-19, the Gulf Cooperation Council (GCC) construction industry is finally set for a strong recovery, as oil production and prices have risen and much of the non-oil sector rebounded from the impact of the pandemic. The Middle East is continuing to diversify into non-oil sectors and take advantage of its natural solar resources. The region also has robust plans around healthcare, transport, water and sewage, offering some prime opportunities to EPC players. Lounges Gates 61962 93515 19% 19641 100000 102702 80000- 18.7% 100000 *crore Gross Revenue from Operations (8.9%) Order Inflow 140000 *crore The share of international Order Inflow for the Infrastructure segment increased to 29%, from 19% in the previous year. The Infrastructure segment won orders worth 93,515 crore, lower by 8.9% over the previous year that had receipt of large-value, high-speed rail orders. During the current year, the Power Transmission & Distribution business registered significant growth with receipt of a mega order in the Middle East. The Buildings & Factories business registered growth with receipt of some prestigious orders in the Health and Public Space businesses. The Water & Effluent Treatment business also received numerous orders in the Rural Water Supply segment, majorly in Uttar Pradesh. De-growth was seen in the Heavy Civil Infrastructure, Transportation Infrastructure and Minerals & Metals businesses mainly due to deferral of targeted prospects. Financial Performance of the Segment 34 Corporate Overview Management Integrated Discussion and Analysis Report 73560 Statutory Reports LARSEN & TOUBRO Statements Mumbai Trans Harbour Link Project 'giga projects' program, particularly on the Neom, Red Sea, Diriyah Gate and Qiddiya developments, as it seeks to turn its ambitious tourism and real estate plans into action on the ground. While the pandemic affected the African economies, the IMF is predicting a strong recovery that will catalyse an increase in project investment. However, Africa's project plans are engulfed with challenges from political instability to poor infrastructure and lack of finance. Increasing construction activity around the globe is expected with global growth gaining momentum. The sharp rise in crude prices will remain a double-edged sword, raising expectations for the oil and gas sector and infrastructure development in the Middle East, which would augur well for the construction sector but simultaneously create inflationary pressures. Financial 16752 23% 60000. 2021-22 Domestic ■International 2020-21 Domestic International 2021-22 OPM% 35 2020-21 Integrated Annual Report 2021-22 WELCOME TO G.R HYD ALSFORT 个个个个 Gates 3-14 HYDERABAD 101-124 0 20000 27231 29% 25% 15709 56808 60000 40000- 8.5% 0 81% 77% 66284 71% 75% 20000 46253 8.2% 83061 Interest paid • Common Central Secretariat project at New Delhi 3,651 37% 50463 Hydrocarbon 8901 55783 36% 156521 135979 150000 ■Infrastructure 1%, (1%) 14420 4%, (4%) 4714 4%, (2%) 12537 * crore 15.1% 200000- * crore 120000 79% 258581 262368 73% 40000 0 As at 31-03-2021 2%, (4%) As at 31-03-2022 ■International Order Book Composition The Order Book registered a growth of 9.2%, mainly with receipt of some high value orders during the year. Around 21% of the Order Book comprises orders received from various State Governments, including local authorities. The Private sector is gathering momentum with its contribution increasing to 20% of the total Order Book as of March 2022 as against 17% as of March 2021. Of the domestic Order Book, 38% of the orders are funded by multi-lateral agencies. The share of the international Order Book increased from 21% to 27% with the share of Saudi Arabia in the overall international Order Book increasing to 63% from 32%. Consolidated Revenue from Operations Gross Revenue from Operations Domestic 100000 - ■Power ■Heavy As at March 31, 2022, the Order Book is at 357,595 crore providing a multi-year revenue visibility to the Company. The infrastructure segment continues to dominate with a share of 73% of the consolidated Order Book, vis-à-vis 75% as of March 2021. L&T Group recorded revenue of 156,521 crore during FY 2021-22, registering a growth of 15.1%. The growth was mainly achieved with the pickup of execution momentum in Project businesses and substantial growth in IT&TS business. The composition of international revenue at the Group level is at 36% in FY 2021-22 compared to 37% in the previous year. 30 Segment-wise Revenue crore 80,000 357595 crore as at March 31, 2022 [Figures in brackets relate to previous year] 70,000 50,000 40,000 30,000 20,000 10,000 0 IT & 60,000 200000 Total Order Book: 2021-22 56398 16%, (14%) Engineering 50000 100738 64% 63% ■International 85516 Engineering 0 ■ Others 260624 73% (75%) 2020-21 Domestic ■Defence 280000 21% 68773 95227 27% 10.0% 175497 150000- 27% 47951 100000- 73% 127546 Order Inflow 50000 0 2020-21 Domestic ■International Order Inflow Composition 2%, (2%) 4%, (3%) 11971 6%, (8%) * crore 32256 17%, (14%) 200000 Order Inflow and Order Book 2,528 Corporate Overview Management Integrated Discussion and Analysis Report Statutory Financial Reports Statements * crore 250000 LARSEN & TOUBRO The operating effectiveness of Internal Financial Controls are carried out by Corporate Audit Services team and Internal Controls for Financial Reporting by Statutory Auditors and no reportable material weaknesses either in their design or operations were observed. The evaluation included documentation review, enquiries, testing, and other procedures considered to be appropriate in the circumstances. I. L&T CONSOLIDATED The Group while prioritising the health and safety of its manpower, registered a good performance in FY 2021-22 despite all the challenges. The Company continued to focus on its goal of maximising shareholder value by an efficient execution of its large Order Book, leveraging technology to improve cost competitiveness, achieving operational excellence through digital initiatives, and containing working capital along with better funds management and divesting non-core assets identified for sale. During the year, the Company concluded the divestment of its 99 MW Singoli- Bhatwari Hydel Power Plant in the state of Uttarakhand. During the year, the Company launched new businesses: a) L&T EduTech - Which offers EdTech products and solutions to educational institutions, skilling bodies, working professionals, students, and learners across segments using a technology intensive user-friendly platform. b) L&T SuFin - A B2B E-Commerce online platform launched to provide SME/MSME buyers and sellers (mainly focused on construction and industrial products & services) to connect in an efficient manner, thereby enabling sellers to expand their sales reach, and for buyers to find their required products and services seamlessly. The platform also enables logistics services and credit facilities to support the e-commerce transactions. Further, during FY 2021-22, the Company initiated feasibility studies and pilot investments into new businesses planned under Strategic Plan i.e. Data Center and Green Hydrogen. As at March 31, 2022, the L&T Group comprises 93 subsidiaries, 5 associate companies, 27 joint ventures and 35 jointly held operations. Out of the total 160 entities, 54 companies belong to the 4 listed subsidiaries and 19 are related to Development Projects. The rest of the entities in the Group are mostly, strategic extensions of the traditional businesses viz. EPC Contracts and Hi-Tech Manufacturing, for enabling access to new geographies, technology, and nuanced business segments. The Corporate Audit Services Department carries out independent internal audits covering core business operations, corporate departments, and support functions. The annual audit plan of Corporate Audit Services is reviewed by the Audit Committee of the Board to ensure the adequacy of the coverage. The significant audit observations are presented to the Audit Committee every quarter along with update on the implementation of the recommended remedial measures and the agreed actions by the Management. Infrastructure Hydrocarbon 8079 4%, (1%) 1360 Others Total Order Inflow: 192997 crore during the year 2021-22 [Figures in brackets relate to previous year] L&T Group achieved Order Inflows of 192,997 crore during FY 2021-22, registering growth of 10% over the previous year, with growth largely driven by receipt of mega international orders in the Power Transmission & Distribution and Hydrocarbon business. This led to an increase in share of international Order Inflow to 44% from 27% in previous year. The year witnessed booking of some noteworthy orders in the rural water supply segment, few metro projects, a project in Health and Public space business, a large value order from Indian Navy in the Defence Engineering business, a mega order from the Middle East in Power Transmission & Distribution business and big-ticket orders in Offshore and Onshore verticals of Hydrocarbon. With improved order traction in Hydrocarbon and Defence Engineering, the contribution of the Infrastructure segment in the overall Order Inflow decreased to 48% from 59% in previous year. 29 Projects Integrated Annual Report 2021-22 440000 Order Book 9.2% 360000 327354 357595 crore 3223 2%, (2%) Financial Services ■Development Defence Engineering 4368 1%, (1%) 30912 16%, (10%) 7312 L93515 48%, (59%) 192997 ■IT & Technology Services 84111 108886 56% 2021-22 ■Infrastructure Hydrocarbon Power ■Heavy Engineering 44% Power OVERALL FINANCIAL REVIEW FY 2021-22 Technology Services Consolidated Profit after Tax (PAT) (including exceptional items and profit from discontinued operations) at ₹ 8,669 crore for the year 2021-22 decreased by 25.2% over the previous year at 11,583 crore. Consolidated Profit after Tax (PAT) (excluding exceptional items and profit from discontinued operations) at ₹ 8,572 crore for the year 2021-22 increased by 23.1% over the previous year at 6,965 crore. Consolidated Profit after Tax and EPS The previous year's Profit from Discontinued Operations includes gain from divestment of the Electrical & Automation business and profit from operations of the same up to the date of transfer. Profit from Discontinued Operations Exceptional items during the year mainly comprises divestment gain on sale of Singoli – Bhatwari Hydro project partly offset by tax on transfer of L&T Nxt to Mindtree Limited. The previous year mainly included impairment of funded exposure in the Heavy Forgings Joint Venture, impairment of asset in the power development business, net of gain on divestment of wealth management business of L&T Finance Holdings Limited. Exceptional Items Income Tax charge for FY 2021-22 (excluding tax charge on discontinued operations) increased to 4,217 crore compared to 4,011 crore in the previous year on increased profits. Tax Expense The interest expenses for the year 2021-22 at ₹3,126 crore was lower by 20.1% over 3,913 crore for the previous year. The decline was mainly attributable to reduction of borrowings in the Parent entity. Also, the average borrowing cost for FY 2021-22 decreased to 7.4% p.a. from 7.7% p.a. in the previous year due to refinancing of debt in Hyderabad Metro. Finance cost It mainly consists of profit on sale of liquid/short term investments and interest income. Other income at ₹ 2,267 crore, declined by 33.9% over 3,429 crore, mainly due to lower investible surplus. Other Income Integrated Annual Report 2021-22 31 The segment-wise PBIT registered improvement over previous year majorly in Infrastructure and IT&TS businesses. 939 Development Projects Others FY 2020-21 4522 FY 2021-22 5182 1369 1501 111 139 Consolidated Basic Earnings per Share (EPS) for the year 2021-22 at 61.71 declined over previous year at 82.49. 488 470 4823 6410 1286 (197) 1123 1470 (231) 617 533 As highlighted above, the reduction in PAT and EPS over the previous year is primarily due to the gain on divestment of the Electrical & Automation business in FY 2020-21. Return on Consolidated Net Worth The Net Worth, as on March 31, 2022, at 82,408 crore, reflects a net increase of 6,539 crore, as compared to the 11 Sources of Funds 36,140 20,969 Capital expenditure (net) 922 16 3,040 8,677 Purchase/(Sale) of investments 17,787 Dividend paid Heavy Defence Engineering Engineering 2,422 Repayment of Borrowings Financial Services 1,130 Treasury and dividend income ESOP Proceeds (net) position as on March 31, 2021. The Return on Net Worth (RONW) for the year 2021-22 was lower at 11%, compared to 16.2% in the previous year since it included the one-time divestment gains of the Electrical & Automation business. Liquidity & Gearing Cash flow from Operations (including change in loans and advances towards financing activities) decreased to 19,163 crore as compared to 23,074 crore in the previous year due to the build-up of customer outstanding with increase in business volumes. During the year, additional funds were generated mainly from the divestment of Singoli-Bhatwari Hydel Power Plant, treasury and dividend income. Funds were utilised mainly for repayment of borrowings *8,677 crore, capital expenditure of 3,040 crore and payment of dividend 2,528 crore. Further funds were applied for purchase of current investment of 2,422 crore and net interest payment of 2,968 crore during FY 2021-22. Consequently, there was a net increase of 314 crore in the cash balances as at March 31, 2022 as compared to the beginning of the year. Consolidated Fund Flow Statement 1,476 * crore FY 20-21 Operating activities 23,074 Net divestment/(investment) 11,574 FY 21-22 19,163 665 Particulars IT & Technology Services 9,047 Infrastructure Hydrocarbon Power 8903 15624 140000 180000- crore Operating Expenses and PBDIT During the year, most of the businesses registered a growth over the previous year. The revenues from the IT&TS segment continue to register industry leading growth. Operating Expenses and PBDIT LARSEN & TOUBRO Statutory Financial Reports Statements Integrated Report Discussion and Analysis Management Corporate Overview 6282 4368 11971 32474 3226 Others Heavy Defence Engineering Engineering Financial Services FY 2020-21 61962 FY 2021-22 73560 16964 3018 18217 8832 29734 3410 13404 3621 6093 19265 4448 3039 25619 100000 3193 60000- Profit Before Interest and Tax Segment-wise composition of PBIT for FY 2021-22 is represented below: Segment-wise PBIT crore 7000 6000 5000 4000 3000 2000 1000 24751 I. 0 -1000 Depreciation and amortisation charge for the year 2021-22 marginally increased to 2,948 crore from previous year. 2,904 crore in Development Projects The Group's operating profit at ₹ 18,217 crore for the year 2021-22 registered a growth of 16.6% y-o-y, largely due to higher revenue volumes. The EBITDA margins for the year improved by 10 bps at 11.6%. Operational excellence measures in Mindtree and L&T Technology Services and lower credit cost in Financial Services aided the margin improvement. However, impact of high commodity prices and higher provisions on contract assets and customer receivables exerted some pressure on the margin. Depreciation and Amortization charge 0 Mfg., Construction & Operating Expenses 99739 2020-21 2021-22 20000 Staff Expenses Manufacturing, Construction and Operating (MCO) expenses for FY 2021-22 at 99,739 crore increased by 15% over the previous year. These expenses mainly comprise cost of construction material, raw materials and components, subcontracting expenses and interest costs in the Financial Services business. This represents 63.7% of revenue in line with the previous year. Staff expenses for FY 2021-22 at 29,734 crore increased by 20.1% over the previous year and as a percentage to revenue increased by 80 bps, reflecting manpower ramp-up in the IT&TS segment and salary revision. The Group continues to focus on productivity improvements, digitalisation, and manpower optimisation across most of its businesses. Sales and administration expenses at ₹8,832 crore is almost in line with the previous year at 8,903 crore. Operating Profit (PBDIT) 86701 Sales, Administration & Other Expenses 49.66 58.83 265.02 0.24 95.44 103.18 6.83 0.03 (1.89) 16.43 26.00 Vehicles 0.24 8.47 0.04 272.63 22.40 (0.05) 0.29 5.72 289.55 181.52 33.85 (0.03) 153.08 0.30 0.01 0.01 79.28 91.10 0.33 154.50 9.19 (2.18) 5.38 210.26 Furniture & fixtures 100.80 113.79 151.23 213.66 193.22 Office equipment 265.82 71.02 0.09 4.75 10.48 195.22 37.38 5.01 226.00 31.44 679.69 233.90 31.92 20.68 50.34 33.70 257.65 264.24 Leasehold Improvements 195.22 Aircraft Breakwater Structures 679.69 Dredged Channel 0.24 264.00 Ships Other assets 156.85 23.11 0.31 28.42 4.75 226.00 7099.43 15.02 3413.71 3361.26 124.22 690.33 132.85 134.46 557.48 729.54 - Corporate Overview 1.79 653.78 11.16 11.16 553 0.53 (1.60) 7.37 3242.84 548.03 108.61 0.53 58.97 (5.18) 864.00 3195.89 1.60 9.56 701.49 11.69 (183.75) 873.55 Sub total -Land 1.60 9.56 144.01 144.01 Leasehold 413.87 445.78 557.48 11.69 (183.75) Buildings 137.21 87.35 87.35 2501.71 2560.51 Owned 19.51 417.57 0.08 71.10 365.90 21.28 541.79 0.08 59.88 503.11 Computers 15.02 125.26 4456.27 3.16 (0.35) 3885.87 692.85 Plant & equipment 164.25 7885.00 786.20 (2.29) 7262.15 equipment Sub total- Plant & 15.02 3411.67 3355.77 2.04 5.49 15.02 125.26 4295.59 160.68 3.16 164.25 7722.28 3728.64 689.40 (0.35) 162.72 157.23 3.45 162.72 Leased out 3.19 (2.29) 786.20 3.19 36.45 Office equipment 194.57 Category of Assets No Sr. Assets used in Heavy Engineering Business: A 18 7 20 8 Motor Cars Vehicles 2. Aircrafts 1. adopted (in years) Useful life Sub-category of Assets Useful life as per Schedule II (in years) Sr. No Category of Assets Estimated useful life of following assets is different than useful life as prescribed in schedule II of the Companies Act, 2013. b. 14 14 7. Ships 10 8 Vehicles 6. 10 10 Furniture & fixture 5. Sub-category of Assets 5 Useful life as per Schedule II (in years) 5-15 729.54 5 Carpeted roads-other than RCC Roads 2. 10-30 15 Cranes 3 15 Flushing facility 50 15 Useful life adopted (in Load bearing structures 15 Horizontal autoclaves 5-30 15 Other furnaces 5-15 15 Modular furnace 10-30 15 Boring/Rolling/Drilling/Milling machines Plant & equipment 1. years) 10-30 189.55 4 6 ₹ in various apartments: 8.82 crore. (previous year: 8.82 crore). C. B. (i) A. in various co-operative societies, shop-owners' associations and non-trading corporations: 68.21 crore, including 2610 shares of 50 each, 75 shares of 100 each. (previous year: in various co-operative societies, shop-owners' associations and non-trading corporations: 68.26 crore, including 2615 shares of 50 each, 75 shares of 100 each). Cost of buildings includes ownership accommodations: a) 571.50 238.71 8479.87 8437.25 Add: Capital work-in-progress [refer Note 2(k)] 8198.54 1011.85 421.24 948.66 181.88 6430.31 102.62 102.62 7908.37 226.64 5590.61 104.60 102.62 240.79 14441.30 5590.61 1021.04 (3.87) 4.41 379.72 13891.76 4881.33 962.27 (10.55) (15.80) (6.79) in various co-operative societies: 0.36 crore (previous year: 0.36 crore) for which share certificates are yet to be issued. 1709.34 (53.37) Previous year 4.46 979.32 (193.45) 13891.76 Total 1369.90 353.06 68.18 4.99 1364.91 Sub total Other assets 4.66 0.09 157.84 147.36 47.86 12622.30 4. D. in proposed co-operative societies 30.59 crore. (previous year: 30.59 crore). 397 3 Computer 3. 15 8 Plant & equipment 2. 60 3 Buildings 1. Estimated useful life of the following assets is in line with useful life prescribed in schedule II of the Companies Act, 2013: Sr. No Asset Class Minimum useful life (in years) Maximum useful life (in years) 398 a. (ii) ownership accommodations of 11.75 crore representing undivided share in properties at various locations. (previous year: 11.75 crore). Depreciation is provided based on useful life supported by the technical evaluation considering business specific usage, the consumption pattern of the assets and the past performance of similar assets. g) f) Cost as at April 1, 2021 of individual assets has been reclassified wherever necessary. e) Owned assets given on operating lease have been presented separately under respective class of assets as "Leased out" pursuant to Ind AS 116 "Leases". The rate used to determine the amount of borrowing costs eligible for capitalisation is 6.23% (previous year: 5.71%). Additions during the year and capital work-in-progress of buildings include 8.83 crore (previous year: 27.75 Crore) being borrowing cost capitalised in accordance with Accounting Standard (Ind AS) 23 "Borrowing Costs". d) b) Property, Plant and Equipment & Capital work-in-progress (contd.) NOTE [2] Notes forming part of the Financial Statements (contd.) Notes forming part of the Financial Statements Integrated Annual Report 2021-22 Out of its leasehold land at Hazira, the Company has given certain portion of land for the use to its joint venture company and the lease deed is under execution. Freehold (ab) Business Combination property Borrowing costs net of any investment income from the temporary investment of related borrowings that are attributable to the acquisition, construction or production of a qualifying asset are capitalised/inventorised as part of cost of such asset till such time the 392 Corporate Overview Management Integrated Discussion and Analysis Report Statutory Financial Reports Statements LARSEN & TOUBRO Notes forming part of the Financial Statements (contd.) NOTE [1] (II) Significant Accounting Policies (contd.) asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognised in profit or loss in the period in which they are incurred. (r) Share-based payment arrangements The stock options granted to employees in terms of the Company's Stock Options Schemes, are measured at the fair value of the options at the grant date. The fair value of the options is treated as discount and accounted as employee compensation cost over the vesting period on a straight-line basis. The amount recognised as expense in each year is arrived at based on the number of grants expected to vest. If a grant lapses after the vesting period, the cumulative discount recognised as expense in respect of such grant is transferred to the general reserve within equity. The fair value of the stock options granted to employees of the Company by the Company's subsidiaries is accounted as employee compensation cost over the vesting period and where such fair value is not recovered by the subsidiaries, the same is treated as dividend declared by them. The share-based payment equivalent to the fair value as on the date of grant of employee stock options granted to key managerial personnel is disclosed as a related party transaction in the year of grant. The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share. (s) Foreign currencies (i) The functional currency and presentation currency of the Company is Indian Rupee. (ii) Transactions in currencies other than the Company's functional currency are recorded on initial recognition using the exchange rate at the transaction date. At each Balance Sheet date, foreign currency monetary items are reported at the closing spot rate. Non-monetary items that are measured in terms of historical cost in foreign currency are not translated. Exchange differences that arise on settlement of monetary items or on reporting of monetary items at each Balance Sheet date at the closing spot rate are recognised in the Statement of Profit and Loss in the period in which they arise except for: Borrowing costs include finance costs calculated using the effective interest method, finance charges in respect of assets acquired on lease and exchange differences arising on foreign currency borrowings to the extent they are regarded as an adjustment to finance costs. In cases where hedging instruments are acquired for protection against exchange rate risk related to borrowings and are accounted as hedging a time-period related hedge item, the borrowing costs also include the amortisation of premium element of the forward contract and foreign currency basis spread as applicable, over the period of the hedging instrument. (q) Borrowing Costs (ii) The issue expenses of securities which qualify as equity instruments are written off against securities premium. The fair value of the stock options which are treated as expense, if any, in respect of shares allotted pursuant to Stock Options Scheme. Notes forming part of the Financial Statements (contd.) NOTE [1] (II) Significant Accounting Policies (contd.) Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. Any gain or loss recognised in other comprehensive income and accumulated in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognised in profit or loss. (iv) Compound financial instruments issued by the Company which can be converted into fixed number of equity shares at the option of the holders irrespective of changes in the fair value of the instrument are accounted by recognising the liability and the equity components separately. The liability component is initially recognised at the fair value of a comparable liability that does not have an equity conversion option. The equity component is initially recognised at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. The directly attributable transaction costs are allocated to the liability and the equity components in proportion to their initial carrying amounts. Subsequent to initial recognition, the liability component of the compound financial instrument is measured at amortised cost using the effective interest method. The equity component of a compound financial instrument is not remeasured subsequently. (n) Inventories Inventories are valued after providing for obsolescence, as under: (i) Raw materials, components, construction materials, stores, spares and loose tools at lower of weighted average cost or net realisable value. However, these items are considered to be realisable at cost if the finished products in which they will be used, are expected to be sold at or above cost. (ii) A. exchange differences on foreign currency borrowings relating to assets under construction for future productive use, are included in the cost of those assets when such exchange differences are regarded as an adjustment to finance costs on those foreign currency borrowings; and Manufacturing work-in-progress at lower of weighted average cost including related overheads or net realisable value. In some cases, manufacturing work-in-progress are valued at lower of specifically identifiable cost or net realisable value. In the case of qualifying assets, cost also includes applicable borrowing costs vide policy relating to borrowing costs. (iv) Completed property/work-in-progress (including land) in respect of property development activity at lower of specifically identifiable cost or net realisable value. Assessment of net realisable value is made at each reporting period end and when the circumstances that previously caused inventories to be written-down below cost no longer exist or when there is clear evidence of an increase in net realisable value because of changed economic circumstances, the write-down, if any, in the past period is reversed to the extent of the original amount written-down so that the resultant carrying amount is the lower of the cost and the revised net realisable value. (o) Cash and bank balances Cash and bank balances include fixed deposits, margin money deposits, earmarked balances with banks and other bank balances which have restrictions on repatriation. Short-term and liquid investments being subject to more than insignificant risk of change in value, are not included as part of cash and cash equivalents. (p) Securities premium (i) Securities premium includes: A. The difference between the face value of the equity shares and the consideration received in respect of shares issued. B. (iii) Finished goods and stock-in-trade (in respect of goods acquired for trading) at lower of weighted average cost or net realisable value. Cost includes costs of purchases, costs of conversion and other costs incurred in bringing the inventories to their present location. Taxes which are subsequently recoverable from taxation authorities are not included in the cost. B. exchange differences on transactions entered into to hedge certain foreign currency risks. (iii) exchange rate as of the date on which the non-monetary asset or non-monetary liability is recognised on payment or receipt of advance consideration is used for initial recognition of related asset, expense or income. viii) Segment assets and liabilities include those directly identifiable with the respective segments. Unallocable corporate assets and liabilities represent the assets and liabilities that relate to the Company as a whole. ix) Segment non-cash expenses forming part of segment expenses includes the fair value of the employee stock options which is accounted as employee compensation cost [Note 1 (ii)(r) supra] and is allocated to the segment. x) Segment revenue resulting from transactions with other business segments is accounted on the basis of transfer price which are either determined to yield a desired margin or agreed on a negotiated basis. (u) Taxes on income Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961 and using estimates and judgments based on the expected outcome of assessments/appeals and the relevant rulings in the areas of allowances and disallowances. Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the Company's financial statements and the corresponding tax bases used in computation of taxable profit and quantified using the tax rates as per laws enacted or substantively enacted as on the Balance Sheet date. Deferred tax liabilities are generally recognised for all taxable temporary differences including the temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets are generally recognised for all taxable temporary differences to the extent that is probable that taxable profits will be available against which those deductible temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. vii) Segment results have not been adjusted for any exceptional item. Transaction or event which is recognised outside profit or loss, either in other comprehensive income or in equity, is recorded along with the tax as applicable. The Company as a joint operator recognises in relation to its interest in a joint operation, its share in the assets/liabilities held/ incurred jointly with the other parties of the joint arrangement. Revenue is recognised for its share of revenue from the sale of output by the joint operation. Expenses are recognised for its share of expenses incurred jointly with other parties as part of the joint arrangement. Interests in joint operations are included in the segments to which they relate. (w) Provisions, contingent liabilities and contingent assets Provisions are recognised only when: (i) the Company has a present obligation (legal or constructive) as a result of a past event; and (ii) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and (iii) a reliable estimate can be made of the amount of the obligation. Provision is measured using the cash flows estimated to settle the present obligation and when the effect of time value of money is material, the carrying amount of the provision is the present value of those cash flows. Reimbursement expected in respect of expenditure required to settle a provision is recognised only when it is virtually certain that the reimbursement will be received. 394 (v) Interests in joint operations Notes forming part of the Financial Statements vi) Segment result includes the finance costs incurred on interest bearing advances with corresponding credit included in "unallocable corporate income/(expenditure)(net). iv) Income which relates to the Company as a whole and not allocable to segments is included in "unallocable corporate income/ (expenditure)(net)". (iv) Financial statements of foreign operations whose functional currency is different than Indian Rupees are translated into Indian Rupees as follows: A. assets and liabilities for each Balance Sheet presented are translated at the closing rate at the date of that Balance Sheet; B. C. Land all resulting exchange differences are recognised in other comprehensive income and accumulated in equity as foreign currency translation reserve for subsequent reclassification to profit or loss on disposal of such foreign operations. (t) Accounting and reporting of information for Operating Segments Operating segments are those components of the business whose operating results are regularly reviewed by the chief operating decision making body in the Company to make decisions for performance assessment and resource allocation. The reporting of segment information is the same as provided to the management for the purpose of the performance assessment and resource allocation to the segments. v) Segment result represents profit before interest and tax and includes margins on inter-segment capital jobs, which are reduced in arriving at the profit before tax of the Company. Segment accounting policies are in line with the accounting policies of the Company. In addition, the following specific accounting policies have been followed for segment reporting: ii) Expenses that are directly identifiable with/allocable to segments are considered for determining the segment result. iii) Most of the common costs are allocated to segments mainly on the basis of the respective segment revenue estimated at the beginning of the reporting period. 393 Integrated Annual Report 2021-22 Notes forming part of the Financial Statements Notes forming part of the Financial Statements (contd.) NOTE [1] (II) Significant Accounting Policies (contd.) i) Segment revenue includes sales and other operational revenue directly identifiable with/allocable to the segment including inter segment revenue. Corporate Overview Integrated Annual Report 2021-22 The cash flow hedges are allocated to the forecast transactions on gross exposure basis. Where the hedged forecast transaction results in the recognition of a non-financial asset, such gains/losses are transferred from hedge reserve (but not as reclassification adjustment) and included in the initial measurement cost of the non-financial asset. Assets given on lease are classified either as operating lease or as finance lease. A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset. Asset held under finance lease is initially recognised in Balance Sheet and presented as a receivable at an amount equal to the net investment in the lease. Finance income is recognised over the lease term, based on a pattern reflecting a constant periodic rate of return on Company's net investment in the lease. A lease which is not classified as a finance lease is an operating lease. The Company recognises lease payments in case of assets given on operating leases as income on a straight-line basis. The Company presents underlying assets subject to operating lease in its Balance Sheet under the respective class of asset. (Also refer to policy on depreciation, supra) 389 Integrated Annual Report 2021-22 Notes forming part of the Financial Statements Notes forming part of the Financial Statements (contd.) NOTE [1] (II) Significant Accounting Policies (contd.) (m) Financial instruments Financial assets and/or financial liabilities are recognised when the Company becomes party to a contract embodying the related financial instruments. All financial assets, financial liabilities and financial guarantee contracts are initially measured at transaction values and where such values are different from fair value, at fair value. Transaction costs that are attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from as the case may be, the fair value of such financial assets or liabilities, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised in profit or loss. In case of funding to subsidiary companies in the form of interest free or concession loans and preference shares, the excess of the actual amount of the funding over initially measured fair value is accounted as an equity investment. A financial asset and a financial liability is offset and presented on net basis in the balance sheet when there is a current legally enforceable right to set-off the recognised amounts and it is intended to either settle on net basis or to realise the asset and settle the liability simultaneously. 390 (i) Financial assets: A. All recognised financial assets are subsequently measured in their entirety either at amortised cost or at fair value as follows: 1. 2. Investments in debt instruments that are designated as fair value through profit or loss (FVTPL) - at fair value. Debt instruments at FVTPL is a residual category for debt instruments, if any, and all changes are recognised in profit or loss. Investments in debt instruments that meet the following conditions are subsequently measured at amortised cost (unless the same designated as fair value through profit or loss): (ii) Leases which are short-term. (i) Low value leases; and Lease payments associated with following leases are recognised as expense on straight-line basis: The right-of-use asset is measured by applying cost model i.e. right-of-use asset at cost less accumulated depreciation and cumulative impairment, if any. The right-of-use asset is depreciated using the straight-line method from the commencement date to the end of the lease term or useful life of the underlying asset whichever is earlier. Carrying amount of lease liability is increased by interest on lease liability and reduced by lease payments made. Management Integrated Discussion and Analysis Report Statutory Financial Reports Statements LARSEN & TOUBRO Notes forming part of the Financial Statements (contd.) NOTE [1] (II) Significant Accounting Policies (contd.) Defined benefit costs comprising current service cost, past service cost and gains or losses on settlements are recognised in the Statement of Profit and Loss as employee benefits expense. Interest cost implicit in defined benefit employee cost is recognised in the Statement of Profit and Loss under finance costs. Gains or losses on settlement of any defined benefit plan are recognised when the settlement occurs. Past service cost is recognised as expense at the earlier of the plan amendment or curtailment and when the Company recognises related restructuring costs or termination benefits. • In case of funded plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans to recognise the obligation on a net basis. The obligation recognised in respect of long-term benefits such as compensated absences, long service award etc. is measured at present value of estimated future cash flows expected to be made by the Company and is recognised in a similar manner as in the case of defined benefit plans vide (ii)(B) supra. Long-term employee benefit costs comprising current service cost and gains or losses on curtailments and settlements, re-measurements including actuarial gains and losses are recognised in the Statement of Profit and Loss as employee benefits expense. Interest cost implicit in long-term employee benefit costs is recognised in the Statement of Profit and Loss under finance costs. (iv) Termination benefits: Termination benefits such as compensation under employee separation schemes are recognised as expense when the Company's offer of the termination benefit can no longer be withdrawn or when the Company recognises the related restructuring costs whichever is earlier. (I) Leases Assets taken on lease are accounted as right-of-use assets and the corresponding lease liability is recognised at the lease commencement date. Initially the right-of-use asset is measured at cost which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, as reduced by any lease incentives received. The lease liability is initially measured at the present value of the lease payments, discounted using the Company's incremental borrowing rate. It is remeasured when there is a change in future lease payments arising from a change in an index or a rate, or a change in the estimate of the guaranteed residual value, or a change in the assessment of purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero. (iii) Long-term employee benefits: The asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and • The contractual terms of instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. 1. the right to receive cash flows from the asset has expired, or 2. LARSEN & TOUBRO D. the Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a pass-through arrangement; and (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. On derecognition of a financial asset in its entirety, the difference between the carrying amount at the date of derecognition and the consideration received is recognised in profit or loss. Impairment of financial assets: Impairment loss on trade receivables is recognised using expected credit loss model, which involves use of a provision matrix constructed on the basis of historical credit loss experience as permitted under Ind AS 109 and is adjusted for forward looking information. Impairment loss on investments is recognised when the carrying amount exceeds its recoverable amount. For all other financial assets, expected credit losses are recognised based on the difference between the contractual cashflows and all the expected cash flows, discounted at the original effective interest rate. ECLs are measured at an amount equal to 12-month expected credit losses or at an amount equal to lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. Financial liabilities: A financial asset is primarily derecognised when: A. Financial liabilities, including derivatives and embedded derivatives, which are designated for measurement at FVTPL are subsequently measured at fair value. Financial guarantee contracts are subsequently measured at the amount of impairment loss allowance or the amount recognised at inception net of cumulative amortisation, whichever is higher. All other financial liabilities including loans and borrowings are measured at amortised cost using Effective Interest Rate (EIR) method. A financial liability is derecognised when the related obligation expires or is discharged or cancelled. (iii) The Company designates certain hedging instruments, such as derivatives, embedded derivatives and in respect of foreign currency risk, certain non-derivatives, as either fair value hedges, cash flow hedges or hedges of net investments in foreign operations. Hedges of foreign exchange risk on firm commitments are accounted as cash flow hedges. A. B. Fair value hedges: Changes in fair value of the designated portion of derivatives that qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. The fair value adjustment to the carrying amount of the hedged item arising from the hedged risk is amortised to profit or loss from that date. Cash flow hedges: In case of transaction related hedges, the effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in other comprehensive income and accumulated in equity as 'hedging reserve'. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss. Amounts previously recognised in other comprehensive income and accumulated in equity relating to the effective portion, are reclassified to profit or loss in the periods when the hedged item affects profit or loss, in the same head as the hedged item. The effective portion of the hedge is determined at the lower of the cumulative gain or loss on the hedging instrument from inception of the hedge and the cumulative change in the fair value of the hedged item from the inception of the hedge and the remaining gain or loss on the hedging instrument is treated as ineffective portion. In case of time period related hedges, the premium element and the spot element of a forward contract is separated and only the change in the value of the spot element of the forward contract is designated as the hedging instrument. Similarly, wherever applicable, the foreign currency basis spread is separated from the financial instrument and is excluded from the designation of that financial instrument as the hedging instrument in case of time period related hedges. The changes in the fair value of the premium element of the forward contract or the foreign currency basis spread of the financial instrument is accumulated in a separate component of equity as "cost of hedging reserve". The changes in the fair value of such premium element or foreign currency basis spread are reclassified to profit or loss as a reclassification adjustment on a straight-line basis over the period of the forward contract or the financial instrument. B. 391 C. NOTE [1] (II) B. 3. Investment in debt instruments that meet the following conditions are subsequently measured at fair value through other comprehensive income [FVTOCI] (unless the same are designated as fair value through profit or loss) 4. 5. 6. 7. . • The asset is held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets; and Significant Accounting Policies (contd.) The contractual terms of instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Investment in preference shares of the subsidiary companies are treated as equity instruments if the same are convertible into equity shares or are redeemable out of the proceeds of equity instruments issued for the purpose of redemption of such investments. Investment in preference shares not meeting the aforesaid conditions are classified as debt instruments at FVTPL. Investments in equity instruments issued by other than subsidiaries are classified as at FVTPL, unless the related instruments are not held for trading and the Company irrevocably elects on initial recognition to present subsequent changes in fair value in other comprehensive income. Trade receivables, security deposits, cash and cash equivalents, employee and other advances - at amortised cost. For financial assets that are measured at FVTOCI, income by way of interest and dividend, provision for impairment and exchange difference, if any, (on debt instrument) are recognised in profit or loss and changes in fair value (other than on account of above income or expense) are recognised in other comprehensive income and accumulated in other equity. On disposal of debt instruments at FVTOCI, the cumulative gain or loss previously accumulated in other equity is reclassified to profit or loss. In case of equity instruments at FVTOCI, such cumulative gain or loss is not reclassified to profit or loss on disposal of investments. Corporate Overview Management Integrated Discussion and Analysis Report Statutory Financial Reports Statements Notes forming part of the Financial Statements (contd.) Investment in equity instruments issued by subsidiary, associate and joint venture companies are measured at cost less impairment. Management income and expenses for each income statement are translated at average exchange rate for the reporting period; and Discussion and Analysis Report Trf (to)/ from Class of assets Book value Impairment LARSEN & TOUBRO Property, Plant and Equipment & Capital work-in-progress NOTE [2] As at 1-4-2021 Notes forming part of the Financial Statements (contd.) Statutory Financial Reports Discussion and Analysis Report Integrated Management Corporate Overview 396 On March 23, 2022, Ministry of Corporate Affairs amended Ind AS 16 (specifying accounting of net sale proceeds generated while preparing the asset for its intended use), Ind AS 37 (specifying the composition of the cost of fulfilling the contract), Ind AS 103 (specifying the criteria for applying acquisition method for recognising assets and liabilities) and Ind AS 109 (specifying which fees to be included to apply 10 per cent test). These amendments are effective from April 1, 2022 and will not have material impact on Company's financial statements. Statements (ac) Recent Pronouncement: Foreign Additions investment Depreciation Integrated inventories fluctuation As at As at 31-3-2022 31-3-2021 As at Up to 31-3-2022 31-3-2022 31-3-2021 Up to Trf (to)/ currency Deductions property/ fluctuation from Foreign For the Up to 31-3-2021 As at 31-3-2022 currency Deductions year investment The gain/loss net of tax on transfer of business within common control entities is recognised in the statement of profit and loss account by the transferor entity. Cost/Valuation Common control business combination is accounted using the pooling of interest method where the Company is transferee. Assets and liabilities of the combining entities are reflected at their carrying amounts and no new asset or liability is recognised. Identity of reserves of the transferor company is preserved by reflecting them in the same form in the Company's financial statements in which they appeared in the financial statements of the transferor company. The excess between the amount of consideration paid over the share capital of the transferor company is recognised as a negative amount and the same is disclosed as capital reserve on business combination. (i) estimated amount of contracts remaining to be executed on capital account and not provided for; Commitments are future liabilities for contractual expenditure, classified and disclosed as follows: (x) Commitments Where the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under such contract, the present obligation under the contract is recognised and measured as a provision. Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date. Contingent assets are disclosed where an inflow of economic benefits is probable. a present obligation arising from past events, when no reliable estimate is possible. (ii) uncalled liability on shares and other investments partly paid; (ii) a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation; and Contingent liability is disclosed in case of: The financial information in the financial statements in respect of prior periods is restated from the beginning of the preceding period in the financial statements if the business combination date is prior to that date. However, if business combination date is after that date, the financial information in the financial statements is restated from the date of business combination. NOTE [1] (II) Notes forming part of the Financial Statements (contd.) LARSEN & TOUBRO Statutory Financial Reports Statements (i) (iii) funding related commitment to subsidiary, associate and joint venture companies; and Significant Accounting Policies (contd.) Discontinued operation is a component of the Company that has been disposed of or classified as held for sale and represents a major line of business. (iv) other non-cancellable commitments, if any, to the extent they are considered material and relevant in the opinion of management. Other commitments related to sales/procurements made in the normal course of business are not disclosed to avoid excessive details. (y) Discontinued operations and non-current assets held for sale crore Significant Accounting Policies (contd.) Notes forming part of the Financial Statements (contd.) Notes forming part of the Financial Statements Integrated Annual Report 2021-22 395 The preparation of financial statements in conformity with Ind AS requires that the management of the Company makes estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. The estimates and underlying assumptions made by management are explained under respective policies. Revisions to accounting estimates include useful lives of property, plant and equipment & intangible assets, allowance for expected credit loss, future obligations in respect of retirement benefit plans, expected cost of completion of contracts, provision for rectification costs, fair value/recoverable amount measurement, etc. Difference, if any, between the actual results and estimates is recognised in the period in which the results are known. NOTE [1] (II) Cash and cash equivalents (including bank balances) shown in the Statement of Cash Flows exclude items which are not available for general use as at the date of Balance Sheet. (iii) all other items for which the cash effects are investing or financing cash flows. (ii) non-cash items such as depreciation, provisions, unrealised foreign currency gains and losses; and Statement of Cash Flows is prepared segregating the cash flows into operating, investing and financing activities. Cash flow from operating activities is reported using indirect method, adjusting the profit before tax excluding exceptional items for the effects of: (i) changes during the period in inventories and operating receivables and payables, transactions of a non-cash nature; (z) Statement of Cash Flows (aa) Key sources of estimation Non-current assets and disposal groups classified as held for sale are measured at lower of their carrying amount and fair value less costs to sell. Non-current assets and disposal groups are classified as held for sale if their carrying amount is intended to be recovered principally through a sale (rather than through continuing use) when the asset (or disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sale of such asset (or disposal group) and the sale is highly probable and is expected to qualify for recognition as a completed sale within one year from the date of classification. 10 1-8 Electrical installation 10 1-21 refrigeration equipment 12 1-12 3. Laboratory equipment Computer Air conditioning and 5-8 Plant & equipment Photographic equipment 1-8 8 Canteen equipment 1-30 8-15 General 2. 2-60 3 -60 Non-Factory Buildings 0.12 4. 15 Office equipment No Furniture & fixture 5 3 2. Air conditioning and refrigeration equipment 3. Canteen equipment Assets deployed at project site Assets deployed at project site 4. Laboratory equipment Assets deployed at project site Photographic equipment Assets deployed at project site Assets deployed at project site 15 10 15 3 3 3 m 3 5. In addition to above any assets purchased for project site with acquisition value less than 50,000 for above 5 categories of Asset, full cost is depreciated in the same financial year. E Assets used in Hydrocarbon business Category Sub Class 15 5. Office equipment Useful life adopted (in years) 6. Vehicles Motor cars 3-6 1-8 4-5 1-15 10 1-20 8 7 1. 399 Notes forming part of the Financial Statements Notes forming part of the Financial Statements (contd.) NOTE [2] Property, Plant and Equipment & Capital work-in-progress (contd.) D 400 Assets used in Construction business: Sr. Category of Assets Sub-category of Assets Useful life as per Schedule II (in years) Integrated Annual Report 2021-22 11.14 1 Projects temporarily suspended 12 12 20 25 40 22222 15 Air-Conditioner & refrigeration 15 Diesel Generator 15 Rails Plant & equipment (iii) 30 [1] 15 Tower cranes Land berth and piled platforms 20 20 50 Revised Useful life adopted based on technical evaluation (in years) 30[1] 30 [1] equipment (iv) Buildings Production shops Internal roads Useful Life as per Schedule II (in years) 30 Useful life as per Schedule II (in years) 5-50 Useful life adopted (in years) [1] Represents licence period as per agreement executed with the Tamil Nadu Maritime Board, renewable on expiry. Factory Buildings Buildings 1. No Sub-category of Assets Useful life as per Schedule II (in years) Category of Assets Assets used in Defence Engineering Business: с 7 15 50 8 5 30 Motor Cars Vehicles (v) Sr. LARSEN & TOUBRO Ship lift structures, Control system, Chiller units, Condition monitoring system, Ship position system, Ship transfer system, other ship lift related structures Breakwater & Rock Bund 1 1 5 Maximum useful life (in years) 10 10 6 5 crore As at 31-3-2022 As at 31-3-2021 Less than Minimum useful life (in years) 1-2 years 2-3 years More than 3 years Total Less than 1 year 1-2 years 2-3 years More than 3 years Total 0.12 11.26 48.01 - 48.01 Projects in progress 1 year 11.14 Total capital work-in-progress Particulars Platforms and courses Sub-category of Assets Dredged Channel (ii) (i) Breakwater Structures Asset category Assets used in Shipbuilding Business: B Property, Plant and Equipment & Capital work-in-progress (contd.) NOTE [2] Notes forming part of the Financial Statements (contd.) Statements (c) Ageing of intangible assets under development Statutory Financial Reports Integrated Management Corporate Overview 1. Specialised software 2. Technical knowhow 3. New product design and development 4. Discussion and Analysis Report Useful life adopted Kolkata, West Buildings Reason for not being held in name of Company 30 years (Since 1992) 29 years (Since 1993) Conveyance deed is pending to be executed. Appeal is pending before the High Court of Calcutta. Conveyance deed is pending to be executed. Appeal is pending before the High Court of Calcutta. Land acquired from farmers through Government Acquisition Route. The formalities are pending from the authorities side. Building - 4 0.15 0.12 SVM Industries No flats - 171, SP Mukherjee Road, Bengal Freehold Land- 1.01 1.01 1. Magan Kuber * No Hazira West 2. Kashiben Patel 10 years (Since 2012) 3. Ishwar Prema * Irrevocable Power of Attorney given to L&T by the owner, possession is with L&T. 3925 sq ft) Bengal (Area- Land at 171, SP Mukherjee Road, Kolkata, West Land 33.45 0.77 238.71 Projects in progress Projects temporarily suspended Total capital work-in-progress 472.53 91.94 7.04 571.50 204.48 33.45 401 0.77 As on the date of balance sheet, there are no capital work-in-progress projects whose completon is overdue or has exceeded the cost, based on approved plan. Title deeds of Immovable Properties not held in name of the Company Description of property Gross carrying value as at March 31, 2022 (*crore) Carrying value in the financial statements as at March 31, 2022 (*crore) Whether title deed holder Title deeds held in is a promoter, name of director or their relative or employee Property held since which date Undivided 0.13 0.13 SVM Industries No 238.71 Total Integrated Annual Report 2021-22 Notes forming part of the Financial Statements (contd.) inventories inventories Land 47.68 146.37 194.05 194.05 47.68 Buildings 429.23 51.21 0.41 480.85 68.55 16.49 0.23 85.27 395.58 360.68 Total 476.92 51.21 146.78 As at 31-3-2021 31-3-2022 31-3-2022 PPE/(to) NOTE [3] Investment Property crore Cost Depreciation Book Value Transferred Transferred Class of assets As at from Notes forming part of the Financial Statements As at from As at As at Additions Deductions Additions Deductions 1-4-2021 PPE/(to) 31-3-2022 31-3-2021 As at 674.91 More than 3 years Less than 1 year 204.48 6 וס 3-6 Switches & Routers Inkjet/LaserJet Printers, Switchers Audio Video & Projectors Other Office Equipments Water Cooler Air-condition and Refrigeration Canteen Equipments Assets deployed at project sites Assets deployed at Office Assets deployed at project sites Assets deployed at Office 4555 4-30 4-30 4-30 4-30 12 4-30 Photographic Equipments Assets deployed at project sites Assets deployed at Office 8 4-30 Laboratory Equipments Assets deployed at project sites Assets deployed at Office 3-6 3 8-30 8-30 11.26 8-30 Piling Equipment 15 8-30 Pipeline Equipment 15 8-30 Computers Office Equipments Welding Equipment 15 Others Earth-moving Equipment Laptop/Deskop Servers & Storage & Network Fax/Printers/Scanner (MFD), Desktop 15 8-30 15 8-30 15 15 55 Plant & Machinery 1-2 years 2-3 years 4-30 8 10 5-10 5,000/- is depreciated in the same financial year. Cars Jeeps Motorcycles 1) Assets with Acquisition value less than 2) P&M and Office equipment at project sites costing below 50,000/- is depreciated in the same financial year. Carrying value of Property, plant and equipment hypothecated as collateral for certain borrowings and / or commitments as at March 31, 2022 1479.32 crore (as at March 31, 2021: 1476.49 crore) j) k) Ageing of Capital work-in-progress 1) Particulars crore As at 31-3-2022 As at 31-3-2021 Less than 1-2 years 2-3 years 1 year More than 3 years Total 472.53 91.94 7.04 571.50 5-10 7 5-10 7 4-30 Corporate Overview Management Integrated Discussion and Analysis Report Statutory Financial Reports Statements Notes forming part of the Financial Statements (contd.) NOTE [2] Property, Plant and Equipment & Capital work-in-progress (contd.) Sub Class Assets deployed at project sites LARSEN & TOUBRO Useful Life as per Schedule II (in years) Useful life adopted (in years) Electrical Installations Furniture and Fixtures Vehicles HT/LT Electric Sub-station Assets deployed at Office Buses & Trucks 22 4-30 10 2-10 8 5-10 Category (in years) 68.55 0.23 4.69 290.83 Add: Intangible assets under development [refer Note 4(c)] 11.26 48.01 158.55 118.84 (a) Additions during the year Class of assets Specialised software Technical knowhow New product design and development Platforms and courses Total (b) crore FY 2021-22 FY 2020-21 Internal Development Acquired - External 40.58 254.94 361.65 5.87 6.26 6.26 0.00 (0.00) Platforms and Courses 88.39 88.39 3.62 3.62 84.77 Total Total 361.65 0.10 461.75 290.83 23.72 0.09 314.46 147.29 70.83 Previous year 355.29 12.23 100.20 6.26 Internal Development Total Cranes 100 Tons 8-30 10 Equipments Tunneling and transmission Line 8-30 12 General Plant & equipment Software 6 Depending on life of Specialised software Software 15-25 20 Ships 5-60 50 Housing colony 5-60 60 Office building 15 8-30 Heavy Lift Equipment Concreting Equipment - External 2.11 9.70 11.81 8.28 8.28 2.78 2.78 ...1.17 88.39 90.50 9.70 Acquired 88.39 100.20 1.17 12.23 Depreciation is provided based on useful life supported by the technical evaluation considering business specific usage, the consumption pattern of the assets and the past performance of similar assets: Sr. No Class of assets 15 Crushing Equipment 8-30 15 Road Making Equipment 8-30 15 12.23 16.49 6.26 25.60 Sr. No. Particulars 1 Rental income derived from investment property 2021-22 103.31 2020-21 124.40 2 Direct operating expenses pertaining from investment property that generated rental income 49.14 58.21 3 Direct operating expenses pertaining from investment property that did not generate rental income 4.24 (ii) Details with respect to fair valuation of Investment property: Particulars Fair valuation by: crore 2021-22 2020-21 (i) independent registered valuers [1] (ii) independent unregistered valuers [1] crore 60 Maximum useful life (in years) 402 85.27 589.64 408.36 Previous year 509.49 49.55 82.12 476.92 55.37 17.48 7.57 (iii) internal architectural department 11.87 Add: Capital work-in-progress (a) 589.64 408.36 Depreciation is provided based on useful life supported by the technical evaluation considering business specific usage, the consumption pattern of the assets and the past performance of similar assets: Sr. No Class of assets 1. Buildings Minimum useful life (in years) 3 (b) Disclosure pursuant to Ind AS 40 "Investment Property" (i) Amount recognised in the Statement of Profit and Loss for investment property: 68.55 New Product Design and Development Total fair value 56.75 For the year Deductions to 31-3-2022 As at 31-3-2022 As at 31-3-2021 Specialised Software 255.54 11.81 0.10 267.25 210.31 12.90 0.09 223.12 44.12 45.23 Technical knowhow 99.85 99.85 74.25 7.20 81.45 18.40 31-3-2021 Up to As at 31-3-2022 1-4-2021 1159.66 865.66 2405.47 2082.07 [1] Independent valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017 Note: Above valuation is based on government rates, market research, market trend and comparable values as considered appropriate. Corporate Overview Management Integrated Discussion and Analysis Report Statutory Financial Reports 1225.00 70.12 1110.35 Statements NOTE [4] Other intangible assets & Intangible assets under development LARSEN & TOUBRO crore Cost Amortisation Book Value Class of assets As at Additions Deductions Notes forming part of the Financial Statements (contd.) 48.01 272.15 As on the date of balance sheet, there are no capital work-in-progress projects whose completion is overdue or has exceeded the cost, based on approved plan. L&T Special Steels & Heavy Forgings Private Limited - 6% Cumulative, non-convertible redeemable at par preference shares, December 8, 2026 [Net of provision * 56.28 crore (previous year: 56.28 crore)] 10 14,20,80,000 Total - (B) 27049.50 27180.62 17,76,00,000 Total Non current Investment =(A)+(B) Details of quoted/unquoted investments: Particulars (a) Aggregate amount of quoted investments and market value thereof; Book Value Market Value crore 10 15,54,00,000 10 300 10 40,00,000 69.32 63.23 229 10 2,700 10 10 4,45,803 100 4.98 6.88 74.40 27049.50 70.22 27180.62 (b) Aggregate amount of unquoted investments; 0.10 Book Value As at 31-3-2022 As at 31-3-2021 Subsidiary companies, considered good Subsidiary companies, considered doubtful Less: Allowance for expected credit loss As at 31-3-2022 LARSEN & TOUBRO As at 31-3-2021 crore 3923.29 Unsecured loan and advances to related parties: 2853.13 277.70 283.48 277.70 Joint venture companies, considered good 1891.60 1730.38 283.48 Particulars Non-current Assets: Financials Assets - Loans NOTE [6] 16417.71 176195.93 10631.79 3300.57 48.01 11305.74 4047.57 [1] L&T Seawoods Limited, a wholly owned subsidiary has received the approval from The National Company Law Tribunal, Mumbai Bench, for the reduction of its paid-up equity share capital from 1654.55 crore (1,65,45,50,000 shares of 10 each) to 1354.55 crore (1,35,45,50,000 shares of 10 each). As the approval is received on April 4, 2022, the cancellation of 30,00,00,000 equity shares of 10 each by returning cash of 300 crore to the Company is effected in financial year 2022-23. [2] Ceased to be a joint venture w.e.f. October 21, 2021 406 Corporate Overview Management Integrated Discussion and Analysis Report Statutory Financial Reports Statements Notes forming part of the Financial Statements (contd.) (c) Aggregate amount of Impairment in value of investments Less: Allowance for expected credit loss 0.10 10 2.24 2.24 9.13 7.12 11.37 9.36 L&T - MHI Power Turbine Generators Private Limited 405 Notes forming part of the Financial Statements Notes forming part of the Financial Statements (contd.) NOTE [5] Details of Non-current Assets: Financial Assets - Investments (contd.) Particulars (iii) Preference shares-(equity portion): Integrated Annual Report 2021-22 L&T - MHI Power Boilers Private Limited (ii) Other equity investments: 1630.73 100 Raykal Aluminium Company Private Limited 10 37,750 0.04 0.04 L&T MBDA Missile Systems Limited 10 5,10,000 0.51 0.51 L&T Halol-Shamlaji Tollway Limited [(previous year: 1000)] [2] 10 100 1630.73 L&T Special Steels & Heavy Forgings Private Limited - 6% Cumulative, non- convertible redeemable at par preference shares, December 8, 2024 [Net of provision 78.33 crore (previous year: 78.33 crore)] 15,899 1,00,000 Number of units per unit BBT Elevated Road Private Limited Utmal Multi purpose Service Co-operative Society Limited (B Class) [30,000 (previous year: 30,000)] ₹ Tidel Park Limited [refer Note 53(f)] VP Global Fibre and Yarns Private Limited [22,900 (previous year: 22,900)] New Vision Wind Power Private Limited [27,000 (previous year: 27,000)] ₹ 10000 The New India Assurance Company Limited Total (A)=(a)+(b)+(c)+(d) (B) Investment in preference shares of Joint Venture companies: (Fair value debt portion): L&T Special Steels & Heavy Forgings Private Limited - 6% Cumulative, non-convertible redeemable at par preference shares, December 8, 2024 [Net of provision 77.77 crore (previous year: 77.77 crore)] L&T Special Steels & Heavy Forgings Private Limited - 6% Cumulative, non-convertible redeemable at par preference shares, December 8, 2025 [Net of provision * 79.12 crore (previous year: 79.12 crore)] °° 808000 L&T Halol-Shamlaji Tollway Limited [Net of provision 1000] [2] International Seaport Dredging Limited [Net of provision 15.90 crore (previous year: 15.90 crore)] (d) Other companies: 1640.09 As at 31-3-2022 As at 31-3-2022 Z crore As at 31-3-2021 * crore 10 15,54,00,000 L&T Special Steels & Heavy Forgings Private Limited - 6% Cumulative, non- convertible redeemable at par preference shares, December 8, 2025 [Net of provision 97.91 crore (previous year: 97.91 crore)] 10 17,76,00,000 L&T Special Steels & Heavy Forgings Private Limited - 6% Cumulative, non- convertible redeemable at par preference shares, December 8, 2026 [Net of provision 84.41 crore (previous year: 84.41 crore)] 10 14,20,80,000 Total (c)(i)+(ii)+(iii) 1642.10 Face value 10 1730.38 Unsecured other loans, considered good 403.90 396.97 Components [includes goods-in-transit ₹ 7.80 crore (previous year: 1.48 crore)] Construction materials [includes goods-in-transit 116.74 crore (previous year: 39.17 crore)] Manufacturing work-in-progress 188.99 102.97 150.83 Raw materials [includes goods-in-transit 27.64 crore (previous year: 3.86 crore)] 59.78 Finished goods 16.65 3.57 Stock-in-trade [includes goods-in-transit 32.73 crore (previous year: 44.34 crore)] Stores and spares [includes goods-in-transit ₹ 1.76 crore (previous year: ₹ 4.60 crore)] Loose tools 319.61 361.31 212.23 As at 31-3-2021 As at 31-3-2022 Particulars Current Assets: Inventories crore As at 31-3-2022 As at 31-3-2021 0.92 0.61 107.37 31.02 1802.28 1807.49 2079.73 2059.17 3990.30 3898.29 crore 148.10 NOTE [9] 156.27 Property development project - completed property 2146.25 869.51 2228.72 698.81 2659.72 884.37 5024.60 As at 31-3-2021 5731.81 5961.14 9275.90 11787.56 1499.57 299.98 919.13 18478.22 22232.95 7952.13 As at 31-3-2022 crore 408 5.79 1620.82 5.67 3132.51 2.71 1567.90 13.86 2877.57 Note: During the year 28.06 crore (previous year: 5.19 crore) was recognised as expense towards write-down of inventories (net). NOTE [10] Current Assets: Financial Assets - investments Particulars (A) Government and trust securities (B) Debentures and bonds (i) Subsidiary companies (ii) Joint venture companies (iii) Other debentures & bonds (C) Mutual funds (D) Collateral borrowing and lending obligation (CBLO) (E) Commercial paper Property development related work-in-progress 1730.38 Current tax receivable (net) Unsecured 140.01 0.36 123.66 2.89 94.29 283.85 129.74 As at 31-3-2021 161.45 37.79 100.06 1.75 77.73 6.12 79.28 13.45 523.80 2.39 39.86 As at 31-3-2022 179.87 crore 161.22 0.07 4084.58 NOTE [7] Non current Assets: Financial Assets - Others Particulars Unsecured security deposits, considered good: Less: Allowance for expected credit loss Fixed deposits with banks (maturity more than 12 months) Cash and bank balances not available for immediate use [refer Note 7(a)] Forward contract receivables Embedded derivative receivables Premium receivable on financial guarantee contracts Other receivables Note 7(a) Particulars of cash and bank balances not available for immediate use 0.39 2853.52 531.78 Advance recoverable other than in cash Sr. Particulars 550.55 387.38 Amount reflected under other financial assets - non-current [refer Note 7] 94.29 283.85 407 Less: Amount reflected under current assets [refer Note 13] Integrated Annual Report 2021-22 Notes forming part of the Financial Statements (contd.) NOTE [8] Other non-current assets Particulars Capital advances: Secured Notes forming part of the Financial Statements 671.23 644.84 Total No. 31-3-2022 crore As at 31-3-2021 1 Amount received (including interest accrued thereon) from customers of property development business – to be handed over to housing society on its formation. 27.71 27.02 2 Contingency deposit (including interest accrued thereon) received from customers of property development business towards their sales tax liability - to be refunded / adjusted depending on the outcome of the legal case. 16.09 27.78 3 Other bank balances (including interest accrued thereon) not available for immediate use being security offered for bids submitted, loans availed, acquisition etc. 601.04 616.43 As at ₹ 15874.88 109342.27 0.82 1654.55 1654.55 Mindtree Limited (quoted) 10 L&T Modular Fabrication Yard LLC [171.7 (previous year: 171.7)] OMR 1 107.72 10,05,27,734 20,19,230 9567.93 L&T Innovation Campus (Chennai) Limited (formerly known as L&T Electricals and Automation Limited) 10 74,38,796 40.36 40.36 9567.93 107.72 2283.70 0.05 2444.70 0.05 2439.00 L&T Hydrocarbon Saudi Company LLC (Formerly Larsen & Toubro ATCO Saudi LLC) 130.39 (previous year: 130.39)] SAR 1000 1,000 L&T Power Development Limited [Net of provision 668.00 crore (previous year: * 829.00 crore)] L&T Power Limited 10 10 L&T Electromech LLC [171.7 (previous year: 171.7)] OMR 1 L&T Realty Developers Limited L&T Heavy Engineering LLC [ 183.89 (previous year: 183.89)] 10 OMR 1 L&T Seawoods Limited[1] 10 3,11,27,00,000 51,157 2,10,000 16,71,60,700 39,65,500 1,65,45,50,000 L&T Kuwait Construction General Contracting Company WLL [66.04 (previous year: 66.04)] 2439.00 KWD 1000 L&T Technology Services Limited (quoted) 318.50 150 0.29 50,000 0.23 0.23 318.50 19,91,42,091 22.27 Larsen & Toubro (Saudi Arabia) LLC SAR 1000 625 1.05 1.05 22.27 2,47,50,000 11.08 11.08 2 Larsen & Toubro Infotech Limited (quoted) Larsen & Toubro Arabia LLC L&T Geostructure Private Limited L&T Hydrocarbon International FZE 1 7,79,86,899 12,97,84,034 805.25 805.25 108.05 108.05 Larsen & Toubro LLC L&T Construction Equipment Limited SAR 1000 10 AED 1000 USD 1 10 7,500 980 L&T Infrastructure Engineering Limited 5375.82 1,63,92,29,920 2,43,89,99,999 25465.89 4.42 1640.09 70.22 27180.62 Number of units Face value 4.42 1642.10 74.40 27049.50 per unit As at 31-3-2022 As at 31-3-2021 ₹ crore PNG Tollway Limited [1000 (previous year: * 1000)] (A) Investments in fully paid equity instruments As at 31-3-2022 25328.58 As at 31-3-2021 As at 31-3-2022 403 Integrated Annual Report 2021-22 Notes forming part of the Financial Statements Notes forming part of the Financial Statements (contd.) NOTE [5] Non-current Assets: Financial Assets - Investments Particulars Investment in equity instruments (a) Subsidiary companies (b) Associate companies (c) Joint venture companies (d) Other companies Details of Non-current Assets: Financial Assets - Investments Particulars crore (a) Subsidiary companies: 5918.65 (i) Investments in fully paid equity instruments: L&T Valves Limited 100 4,56,00,000 45.60 45.60 10 50,000 0.05 10 0.05 10 50,000 L&T Finance Holdings Limited (quoted) 10 L&T Metro Rail (Hyderabad) Limited 10 L&T Cassidian Limited [Net of provision 0.05 crore] [previous year provision: 0.05 crore] 9,500 10 100 18,00,000 161.23 161.23 10 49,950 0.05 0.05 Hi-Tech Rock Products & Aggregates Limited 10 50,000 0.05 0.05 Kesun Iron & Steel Company Private Limited [Net of provision 95,000 (previous year: 95,000] L&T Aviation Services Private Limited L&T Capital Company Limited Bhilai Power Supply Company Limited 10 crore USD 100 4.50 4.50 AZM 10 9,250 0.36 0.36 45,00,000 L&T Sapura Shipping Private Limited 9,53,11,850 95.31 95.31 L&T Sapura Offshore Private Limited 10 6,000 10 10 L&T Hydrocarbon Caspian LLC L&T Chiyoda Limited 4.42 4.42 (c) Joint Venture companies: (i) Investments in fully paid equity instruments: Ahmedabad-Maliya Tollway Limited [ 1000 (previous year: 1000)] 10 100 L&T Chennai-TADA Tollway Limited [1000 (previous year: 1000)] 10 100 L&T Howden Private Limited 10 1,50,30,000 15.03 15.03 0.01 4.42 0.01 10 0.01 L&T Special Steels and Heavy Forgings Private Limited [Net of provision 419.28 crore (previous year: 419.28 crore)] 10 41,92,84,000 L&T Transportation Infrastructure Limited 10 0.01 1,08,64,000 10.86 L&T-Sargent & Lundy Limited 10 27,82,736 0.82 L&T Global Holdings Limited 10.86 13,000 L&T Samakhiali Gandhidham Tollway Limited 100 32,10,59,096 1021.48 1021.48 L&T - MHI Power Boilers Private Limited 10 11,93,91,000 119.39 119.39 L&T MHI Power Turbine Generators Private Limited 10 36,24,06,000 362.41 362.41 L&T Rajkot-Vadinar Tollway Limited [1000 (previous year: * 1000)] 10 L&T Infrastructure Development Projects Limited [Net of provision 1723 crore (previous year: 1723 crore)] 4.42 10 100 Face value per unit As at 31-3-2022 K As at 31-3-2022 crore As at 31-3-2021 Number of units crore L&T Seawoods Limited -10% Non-cumulative, optionally convertible redeemable preference shares, March 30, 2027. 2 82,60,00,000 826.00 826.00 L&T Seawoods Limited -10% Non-cumulative, optionally convertible redeemable preference shares, May 12, 2027 (ii) Preference share considered equity as per terms: LARSEN & TOUBRO Particulars Details of Non-current Assets: Financial Assets - Investments (contd.) 36,00,000 80,000 9,000 21.85 21.85 53.16 23721.38 53.16 23017.84 404 Corporate Overview Management Discussion and Analysis Report Statutory Financial Reports Statements Notes forming part of the Financial Statements (contd.) NOTE [5] 2 4,80,00,000 Integrated 48.00 2447.40 (iii) Other equity investments: L&T Aviation Services Private Limited Total (a)(i)+(ii)+(iii) 0.65 0.65 0.65 0.65 25465.89 (b) Associate companies: Gujarat Leather Industries Limited [Net of provision 0.56 crore (previous year: 0.56 crore)] 10 Magtorq Private Limited 48.00 7,35,000 648.30 648.30 1606.55 25328.58 L&T Seawoods Limited -10% Non-cumulative, optionally convertible redeemable preference shares, September 3, 2027 42.25 42.25 2 2 L&T Seawoods Limited -10% Non-cumulative, optionally convertible redeemable preference shares, July 14, 2027 4,22,50,000 42.00 4,20,00,000 42.00 L&T Uttaranchal Hydropower Limited - 10% Non-cumulative, optionally convertible redeemable preference shares, July 17, 2029 [previous year net of provision: 586.00 crore] 2 840.85 L&T Realty Developers Limited - 12% Non-cumulative and optionally convertible redeemable at par preference shares, May 26, 2025. 10 64,83,00,000 38.99 1000000 38.72 330 50.89 1000000 35.21 35.63 290 1000000 310 41.44 1000000 1000000 360 45.08 45.12 390 48.63 48.74 1000000 34.73 51.33 410 41.42 34.38 24.81 1000000 170 19.47 1000000 8.80% Kudgi Transmission Limited April 25, 2025 1000000 180 20.89 8.80% Kudgi Transmission Limited April 25, 2026 8.80% Kudgi Transmission Limited April 25, 2027 1000000 200 23.47 1000000 280 210 1000000 230 27.86 28.39 1000000 240 29.26 29.74 1000000 270 33.06 33.61 9.14% Kudgi Transmission Limited SR-K NCD April 25, 2028 9.14% Kudgi Transmission Limited SR-L NCD April 25, 2029 9.14% Kudgi Transmission Limited SR-M NCD April 25, 2030 9.14% Kudgi Transmission Limited SR-N NCD April 25, 2031 9.14% Kudgi Transmission Limited SR-O NCD April 25, 2032 9.50% Kudgi Transmission Limited SR-P NCD April 25, 2033 9.50% Kudgi Transmission Limited SR-Q NCD April 25, 2034 9.50% Kudgi Transmission Limited SR-R NCD April 25, 2035 9.50% Kudgi Transmission Limited SR-S NCD April 25, 2036 9.50% Kudgi Transmission Limited SR-T NCD April 25, 2037 9.50% Kudgi Transmission Limited SR-U NCD April 25, 2038 350 10098.38 43.90 10098.38 10145.41 10145.41 5961.14 2418.70 11787.56 299.98 NOTE [11] Current Assets: Financial Assets - Trade receivables Particulars Secured, considered good Less: Allowance for expected credit loss Unsecured, considered good Less: Allowance for expected credit loss Credit Impaired Less: Allowance for expected credit loss [a] Current assets: Financial assets - Trade receivables ageing Particulars Undisputed: - Considered good - Increase in credit risk - Credit impaired Disputed: 1000000 - Considered good As at 31-3-2022 As at 31-3-2021 crore Book Value Book Value (Accounted based on NAV) 9.50% Kudgi Transmission Limited SR-V NCD April 25, 2039 1000000 960 120.14 120.67 9.50% Kudgi Transmission Limited SR-W NCD April 25, 2040 1000000 250 31.40 31.50 8.60% L&T Infrastructure Development Project Limited NCD December 26, 2026 1000000 43.63 272.65 698.81 884.37 409 Integrated Annual Report 2021-22 Notes forming part of the Financial Statements Notes forming part of the Financial Statements (contd.) NOTE [10] (contd.) Details of quoted/unquoted investments: Particulars (a) Aggregate amount of quoted current investments and market value thereof; Book Value Market Value (b) Aggregate amount of unquoted current investments; Total- (ii) 16.80 Integrated 1000000 As at 31-3-2021 As at 31-3-2022 As at 31-3-2022 value per unit Face Number of units LARSEN & TOUBRO Particulars Details of current investments in Subsidiary companies and Joint venture companies NOTE [10] (contd.) Notes forming part of the Financial Statements (contd.) Statements Statutory Financial Reports Discussion and Analysis Report Management Corporate Overview 1000000 80.66 7.95% L&T Finance Limited NCD July 28, 2025 7.90% L&T Finance Limited NCD July 13, 2024 1000000 1,300 144.59 145.30 1000000 223.28 crore 7.30% L&T Finance Limited NCD September 8, 2023 8.50% L&T Finance Limited NCD January 17, 2023 8.50% L&T Finance Limited NCD February 17, 2023 8.55% L&T Finance Limited NCD November 29, 2022 7.15% L&T Finance Limited NCD September 16, 2024 6.75% L&T Finance Limited NCD November 3, 2024 7.85% L&T Finance Limited NCD July 9, 2025 6.55% L&T Finance Limited NCD November 3, 2028 crore (i) Subsidiary companies: - Increase in credit risk 8.50% L&T Finance Limited Sr.C NCD March 17, 2023 27.03 26.26 250 1000000 26.84 25.78 250 1000000 162.02 160.25 1,450 1000000 5.34 1000000 18.15 17.70 153,800 1000 21.06 20.12 200,000 1000 9.10% L&T Finance Limited NCD April 13, 2022 9.00% L&T Finance Limited NCD April 15, 2024 8.92% L&T Finance Limited NCD October 6, 2021 7.75% L&T Finance Limited NCD July 10, 2025 8.93% L&T Finance Limited NCD August 8, 2022 8.25% L&T Finance Limited NCD June 24, 2023 Debentures and Bonds (quoted): 1000000 541.76 1000000 1000000 1,570 189.60 30.27 1000000 4,220 433.29 9.50% L&T Metro Rail (Hyderabad) Limited SR-F NCD November 26, 2030 1000000 183.50 9.55% L&T Metro Rail (Hyderabad) Limited SR-F NCD September 28, 2030 Total- (i) 1000000 124.30 2228.72 2659.72 (ii) Joint Venture companies: 8.50% Kudgi Transmission Limited SR-D NCD April 25, 2021 1000000 15.16 8.50% Kudgi Transmission Limited SR-E NCD April 25, 2022 1000000 120 12.98 13.48 8.80% Kudgi Transmission Limited April 25, 2023 8.80% Kudgi Transmission Limited April 25, 2024 61.57 305.96 2,490 1000000 75.07 1000000 16.11 1000000 108.92 1000000 1,000 106.42 107.25 1000000 2,000 204.36 150 205.27 900 99.81 100.36 1000000 2,750 277.79 304.15 9.81% L&T Metro Rail (Hyderabad) Limited June 18, 2035 9.81% L&T Metro Rail (Hyderabad) Limited November 2, 2035 9.85% L&T Metro Rail (Hyderabad) Limited January 28, 2036 6.68% L&T Metro Rail (Hyderabad) Limited SR C April 30, 2027 1000000 1,780 216.79 91.51 1000000 Not due 1380.91 52.43 crore (i) Capital Management: The Company continues its policy of a conservative capital structure which has ensured that it retains the highest credit rating even amidst an adverse economic environment. Low gearing levels also enable the Company to navigate business stresses on one hand and raise growth capital on the other. This policy also provides flexibility of fund-raising options for future, which is especially important in times of global economic volatility. The gross debt equity ratio is 0.30:1 as at March 31, 2022 (as at March 31, 2021 0.40:1). During the year ended March 31, 2022, the Company paid the final dividend of 18 per equity share for the year ended March 31, 2021 amounting to 2528.38 crore. The Board of directors, at their meeting held on May 12, 2022 recommended the final dividend of 22 per equity share for the year ended March 31, 2022, subject to approval from shareholders. On approval, the total dividend outgo is expected to be 3091.06 crore based on number of shares outstanding as at March 31, 2022. 415 Integrated Annual Report 2021-22 Notes forming part of the Financial Statements Notes forming part of the Financial Statements (contd.) NOTE [18] Other equity Particulars Capital reserve [1] Capital reserve on business combination [2] Capital redemption reserve [3] crore As at 31-3-2022 As at 31-3-2021 10.84 10.84 (25.77) The balance in share options (net) account as at March 31, 2022 is ₹ 89.36 crore (previous year: 87.62 crore), including 31.70 crore (previous year: 38.78 crore) for which the options have been vested to employees as at March 31, 2022. 260.00 Expected volatility is based on the historical volatility of the Company's share price applicable to the total expected life of each option. 2.85 years 35.39% vii. Weighted average fair values of options granted during the year is 1113.62 (previous year: 834.24) per option. viii. The fair value has been calculated using the Black-Scholes Option Pricing Model and the significant assumptions and inputs to estimate the fair value of options granted during the year are as follows: Sr. Particulars 2021-22 2020-21 ix. No. (i) Weighted average risk-free interest rate (ii) Weighted average expected life of options (iii) Weighted average expected volatility (iv) Weighted average expected dividends over the life of the option (v) Weighted average share price (vi) Weighted average exercise price (vii) Method used to determine expected volatility 5.41 % 3.77 years 31.02% 67.82 per option 1311.86 per option 182.90 per option 4.81 % 51.22 per option 884.83 per option 7.80 per option 8718.74 (25.77) 260.00 25722.05 9.00 Cost of hedging reserve 283.23 (4.72) 221.53 (7.01) 278.51 214.52 Debt instruments through other comprehensive income 163.02 300.22 66833.04 61456.91 [1] Capital reserve: It represents the gains of capital nature which mainly include the excess of value of net assets acquired over consideration paid by the Company for business amalgamation transactions in earlier years. [2] [3] [4] Capital reserve on business combination: It arises on transfer of business between entities under common control. It represents the difference, between the amount recorded as share capital issued plus any additional consideration in the form of cash or other assets and the amount of share capital of the transferor [refer Note 1 (ii)(ab)]. 26072.13 (10.90) 31131.14 Cash flow hedging reserve 8667.65 Securities premium Employee share options (net) Employee share options outstanding 130.62 124.48 Deferred employee compensation expense (41.24) (36.86) During the year, the Company has recovered 2.15 crore (previous year: 1.25 crore) from its subsidiary companies towards the stock options granted to their employees, pursuant to the employee stock option schemes. 89.38 Debenture redemption reserve [4] 138.65 138.65 General reserve [5] 26079.43 Retained earnings Foreign currency translation reserve Hedging reserve 87.62 Capital redemption reserve: Created on redemption of preference shares out of profits in accordance with of Section 55(2)(c) the Companies Act, 2013. Expense on Employee Stock Option Schemes debited to the Statement of Profit and Loss during 2021-22 is 49.11 crore (previous year: 45.63 crore) net of recoveries of Nil (previous year: 0.40 crore) from its group companies towards the stock options granted to deputed employees, pursuant to the employee stock option schemes (Note 34). The entire amount pertains to equity-settled employee share-based payment plans. [expense related to held for sale business Nil (previous year: *2.14 crore)] B. 2,69,509 23,575 1,49,575 3,89,610 4,84,082 10,48,850 11,24,332 9 Weighted average remaining contractual life of options (in years) 5.67 5.74 4.29 4.23 Corporate Overview Management Integrated Discussion and Analysis Report Statutory Financial Reports Statements Notes forming part of the Financial Statements (contd.) NOTE [17] Options yet to vest Equity share capital (contd.) 10,450 14,38,460 1-7-2007 onwards 1-7-2008 onwards 5 Options lapsed 7,130 6 Options granted 1,78,839 1,45,935 4,875 1,04,000 16,08,414 23,75,454 7 Options exercised 64,900 71,910 1,32,958 3,71,930 4,08,926 1,75,675 5,91,365 8 Options granted and outstanding at the end of the year, of which Options vested 2,79,959 1,73,150 16,08,414 iii. The number and weighted average exercise price of stock options are as follows: LARSEN & TOUBRO 2021-22 1,40,088 253.90 1,80,550 260.10 (E) Options granted and outstanding at the end of the year 17,18,419 224.86 17,81,564 241.90 (F) Options exercisable at the end of the year out of (E) supra 4,00,060 260.33 5,07,657 255.06 iv. V. vi. Weighted average share price at the date of exercise for stock options exercised during the year is 1635.25 (previous year: 1001.47) per share. A. (D) Options lapsed 238.99 6,63,275 231.58 2020-21 Particulars No. of stock options (A) Options granted and outstanding at the beginning of the year 17,81,564 Weighted average exercise price (F) 241.90 No. of stock Weighted average options In respect of stock options granted pursuant to the Company's stock options schemes, the fair value of the options is treated as discount and accounted as employee compensation over the vesting period. exercise price 25,21,389 252.09 (B) Options granted 5,50,769 182.90 1,04,000 7.80 (C) Options allotted 4,73,826 (₹) Debenture redemption reserve (DRR): The Ministry of Corporate Affairs vide notification dated August 16, 2019, amended the Companies (Share capital and Debenture) Rules, 2014 by which the Company is no longer required to create DRR towards the debentures issued. Earlier to this amendment, the Company was required to maintain a DRR of 25% of the value of debentures issued, either by a public issue or on a private placement basis and the amounts credited to the DRR was not to be utilised by the Company except to redeem debentures. The above amount represents the DRR created out of profits of the Company prior to the said notification. [5] General reserve: The Company created a General Reserve in earlier years pursuant to the provisions of the Companies Act, 1956 where in certain percentage of profits were required to be transferred to General Reserve before declaring dividends. As per Companies Act 2013, the requirements to transfer profits to General Reserve is not mandatory. General Reserve is a free reserve available to the Company. 416 Corporate Overview Redeemable at face value at the end of 3rd year from the date of allotment. 9 10,00,000 January 24, 2020 1062.71 1062.47 6.72% p.a. payable annually Redeemable at face value at the end of 3rd year from the date of allotment. 10. 10,00,000 April 20,2020 1332.93 1330.66 7.20% p.a. Redeemable at face value at the end of 3rd year from the date of allotment. 11. 10,00,000 May 6,2020 1540.43 12. payable annually 10,00,000 2137.13 8.02% p.a. May 22, 2019 Date of allotment 31-3-2022 * crore As at 31-3-2021 crore Interest for the year 2021-22 Terms of repayment for debentures outstanding as at 31-3-2022 1 10,00,000 April 10,2012 273.63 273.49 9.75% p.a. payable annually 2 10,00,000 April 18, 2019 1612.53 1612.04 7.87% p.a. payable annually Redeemable at face value at the end of 10th year from the date of allotment. Redeemable at face value at the end of 3rd year from the date of allotment. 7 10,00,000 2137.88 April 28,2020 2665.30 13. 483.77 483.78 8.00% p.a. payable Redeemable at face value at the end of 10th year from the date of allotment. 17. 2,50,000 April 23,2021 483.83 Total Less: Less: annually 8.00% p.a. Redeemable at face value at the end of 9th year from the payable date of allotment. annually 14686.72 14667.86 5159.78 926.05 Current maturity of long-term borrowings [refer Note 24] 477.91 Short Term Unsecured Debentures [refer Note 23] 9526.94 13263.90 Borrowings -noncurrent [refer Note 19] 23905.65 April 23,2020 2,50,000 16. payable annually 10,00,000 April 23,2020 14. 10,00,000 April 23,2020 479.58 15. 10,00,000 April 23,2020 As at 2614.13 1538.23 7.25% p.a. Redeemable at face value at the end of 4th year from the date of allotment. payable annually 2661.09 7.70% p.a. Redeemable at face value at the end of 5th year from the date of allotment. payable annually 477.91 6.60% p.a. payable annually 479.55 7.00% p.a. Redeemable at face value at the end of 2nd year from the date of allotment. payable annually 2611.51 7.25% p.a. Redeemable at face value at the end of 3rd year from the date of allotment. payable annually Face value per debenture (*) No. Sr. 129.94 1982.64 12968.41 1328.48 126.15 1928.20 15318.25 126.15 1928.20 16646.73 19(a) (i) Secured redeemable non-convertible fixed rate debentures (privately placed): Sr. No. Face value per debenture (₹) As at Date of allotment 31-3-2022 crore As at 31-3-2021 crore Interest for the year 2021-22 1 10,00,000 October 25, 2012 301.92 301.84 9.10% p.a. payable annually 2 10,00,000 129.94 1982.64 11639.52 1328.89 Term loan from banks [refer Note 19(b)] [refer Note 19(a)(iii)] Management Integrated Discussion and Analysis Report Statutory Financial Reports Statements Notes forming part of the Financial Statements (contd.) NOTE [19] Non-current liabilities: Financial Liabilities- Borrowings LARSEN & TOUBRO October 25, 2012 crore Particulars Secured Unsecured Total As at 31-3-2021 Secured Unsecured Redeemable non-convertible fixed rate debentures [refer Note 19(a)(i)&(ii)] 1328.89 9526.94 10855.83 1328.48 13263.90 14592.38 Redeemable non-convertible inflation linked debentures As at 31-3-2022 267.10 269.77 10,00,000 The Company has call option to redeem debentures at the end of 10th year from the date of allotment. Redeemable at face value at the end of 11 years from the date of allotment or on exercise of call option. The Company has call option to redeem debentures at the end of 10th year from the date of allotment. 1381.32 52.43 1328.89 1328.48 Current maturity of long term borrowings [refer Note 24] Borrowings non-current [refer Note 19] Security: 13,310 fully paid redeemable non-convertible debentures having face value of 10,00,000/- each issued on private placement basis are secured by: (i) First pari-passu charge over certain assets of the Company with security asset cover of 1.25 times; and (ii) Charge on the designated account under the Debenture Trust Deed. 417 Integrated Annual Report 2021-22 Notes forming part of the Financial Statements Notes forming part of the Financial Statements (contd.) NOTE [19] Non-current liabilities: Financial Liabilities- Borrowings (contd.) 19(a) (ii) Unsecured redeemable non-convertible fixed rate debentures (privately placed): 418 Redeemable at face value at the end of 12 years from the date of allotment or on exercise of call option. The Company has call option to redeem debentures at the end of 10th year from the date of allotment. Redeemable at face value at the end of 13 years from the date of allotment or on exercise of call option. The Company has call option to redeem debentures at the end of 10th year from the date of allotment. October 25, 2012 269.81 4 10,00,000 October 25, 2012 269.88 5 10,00,000 October 25, 2012 3 269.94 Less: Terms of repayment for debentures outstanding as at 31-3-2022 269.69 9.10% p.a. payable annually 269.73 9.10% p.a. payable annually 269.79 9.10% p.a. payable annually 269.86 9.10% p.a. payable annually Redeemable at face value at the end of 15 years from the date of allotment or on exercise of call option. The Company has call option to redeem debentures at the end of 10th year from the date of allotment. Redeemable at face value at the end of 14 years from the date of allotment or on exercise of call option. Total 267.10 Total 7.80 23-5-2003 onwards 23-5-2004 onwards 1,73,150 Fixed deposits with banks (maturity less than 3 months) NOTE [13] Current Assets: Financials Assets - Other bank balances crore As at 31-3-2022 3831.27 278.04 As at 31-3-2021 2973.74 343.37 3.67 1605.25 3.70 204.14 5718.23 3524.95 crore Particulars Fixed deposits with banks Earmarked balances with banks-unclaimed dividend As at 31-3-2022 77.23 129.35 Cash on hand As at 31-3-2021 Cheques and draft on hand Particulars 916.76 1227.60 - Credit impaired 8.74 Gross trade receivables 21400.75 7155.27 2653.81 35.19 1743.86 845.11 146.74 2539.34 190.67 36338.14 Less: Allowance for expected credit loss 3006.54 Total 33331.60 NOTE [12] Current Assets: Financials Assets - Cash and cash equivalents Balance with banks 109.39 127.78 Earmarked balances with banks-Section4(2)(1)(D) of RERA [1] 82.79 5.45 5.45 crore As at 31-3-2021 95.08 166.71 0.10 249.60 162.53 0.26 257.87 crore As at 31-3-2021 356.11 0.45 0.57 339.66 355.54 Particulars Unsecured security deposits, considered good Less: Allowance for expected credit loss As at 31-3-2022 340.11 As at 31-3-2022 Current Assets: Financial Assets - Others NOTE [15] Other unsecured loans, considered good 3.46 Margin money deposits with banks 23.15 22.58 Cash and bank balances not available for immediate use [refer Note 7(a)] 550.55 387.38 780.28 650.59 107.46 [1] Real Estate (Regulation and Development) Act, 2016 Integrated Annual Report 2021-22 Notes forming part of the Financial Statements Notes forming part of the Financial Statements (contd.) NOTE [14] Current Assets: Financials Assets - Loans Particulars Unsecured loan and advances to related parties: Subsidiary companies, considered good Subsidiary companies, considered doubtful Less: Allowance for expected credit loss Associate/Joint venture companies, considered good 411 57.44 32.11 19.01 17.29 72.92 145.90 72.12 442.90 757.22 34.04 25.35 85.08 12.26 982.15 1138.88 - Credit impaired Gross trade receivables 23945.78 8153.24 1857.10 1776.70 6.09 1487.72 37750.27 916.40 1545.72 As at 31-3-2022 4.86 7.80 As at 31-3-2021 4.86 38884.29 2618.76 35452.34 2247.47 36265.53 33204.87 45.18 1045.96 939.94 862.98 76.96 36347.35 126.73 33331.60 crore As at 31-3-2022 Outstanding for the following periods from the due date of payment Less than 6 months - 1-2 years 2-3 years 6 months 1 year More than 3 years Total 8135.95 1758.83 885.80 759.07 Advances to related parties: 137.54 3050.31 Less: Allowance for expected credit loss As at 31-3-2021 Not due Less than 6 months - 6 months 1 year Outstanding for the following periods from the due date of payment More than 1-2 years 2-3 years 3 years Total 21294.87 7017.45 2560.33 1621.96 654.99 1075.14 34224.74 11.06 118.81 29.27 82.66 400.70 695.13 94.82 crore LARSEN & TOUBRO - Increase in credit risk - Considered good 3481.74 Total 36347.35 410 Corporate Overview Management Integrated Discussion and Analysis Report Statutory Financial Reports 182.72 39829.09 Statements NOTE [11] [a] Current assets: Financial assets - Trade receivables ageing (contd.) Particulars Undisputed: - Considered good - Increase in credit risk - Credit impaired Disputed: Notes forming part of the Financial Statements (contd.) Subsidiary companies 52.63 699.97 Notes forming part of the Financial Statements (contd.) NOTE [17] Equity share capital (contd.) (c) Terms/rights attached to equity shares: The Company has only one class of share capital, i.e., equity shares having face value of 2 per share. Each holder of equity share is entitled to one vote per share. (d) Shareholder holding more than 5% of equity shares as at the end of the year: Name of the shareholders As at 31-3-2022 Number of Shareholding shares % As at 31-3-2021 Number of Shareholding shares % 19,25,58,158 13.70 19,25,58,158 13.71 11.88 19,24,67,386 13.70 Notes forming part of the Financial Statements Integrated Annual Report 2021-22 413 280.91 Particulars Add: Shares issued on exercise of employee stock options during the year Issued, subscribed and fully paid up equity share outstanding at the beginning of the year 2021-22 2020-21 Number of shares crore Number of shares crore L&T Employees Trust 1,40,45,55,297 1,40,38,92,022 280.78 4,73,826 0.10 6,63,275 0.13 Issued, subscribed and fully paid up equity shares outstanding at the end of the year 1,40,50,29,123 281.01 1,40,45,55,297 280.91 (b) Reconciliation of the number of equity shares and share capital: Life Insurance Corporation of India Particulars The details of the grants under the aforesaid schemes are summarised below: Sr. 2003(B) 2006(A) Series reference No. 2021-22 2020-21 2021-22 2020-21 1 Grant price - (*) 2 Grant dates 3 Vesting commences on 4 634.80 Options granted and outstanding at the beginning of the year ii. 414 Options can be exercised anytime within a period of 7 years from the date of grant and would be settled by way of issue of equity shares. Management has discretion to modify the exercise period. The grant of options to the employees under the stock option schemes is on the basis of their performance and other eligibility criteria. The options are vested equally over a period of 4 years [5 years in the case of series 2006(A)], subject to the discretion of the management and fulfillment of certain conditions. As at 31-3-2022 Number of equity shares to be issued as fully paid Employee stock options granted and outstanding [1] [1] Note 17 (h) infra for terms of employee stock option schemes. 17,18,419 As at 31-3-2021 Number of crore (at face value) equity shares to be issued as fully paid crore (at face value) 16,69,42,875 0.34[2] 0.36[2] [2] The equity shares will be issued at a premium of 38.30 crore (previous year: 42.74 crore). (f) The aggregate number of equity shares allotted as fully paid up by way of bonus shares in immediately preceding five years ended March 31, 2022 are 46,67,64,755 (period of five years ended March 31, 2021: 46,67,64,755 shares). (g) The aggregate number of equity shares issued pursuant to contract, without payment being received in cash in immediately preceding last five years ended on March 31, 2022 - Nil (period of five years ended March 31, 2021: Nil). (h) Stock option schemes i. Terms: A. B. 17,81,564 [1] Pursuant to the approval of the Scheme of Arrangement of merger of L&T Hydrocarbon Engineering Limited with the Company, the authorised share capital of L&T Hydrocarbon Engineering Limited is added to the authorised share capital of the Company, w.e.f Appointed Date i.e. April 1, 2021. (e) Shares reserved for issue under options outstanding on un-issued share capital: 281.01 1,40,45,55,297 51.06 Doubtful advances: Deferred credit sale of ships Other loans and advances 27.11 232.49 259.60 Less: Allowance for expected credit loss 259.60 27.11 295.78 322.89 322.89 412 2182.44 2513.99 Corporate Overview Management Integrated 48.49 604.74 402.82 Forward contract receivable Less: Allowance for expected credit loss 6.03 628.77 280.91 Associate companies 4.83 699.97 0.30 Joint venture companies 115.68 Discussion and Analysis Report Less: Allowance for expected credit loss 53.18 5.08 109.64 48.10 Advances recoverable in cash 611.58 744.87 Premium receivable on financial guarantee contracts 36.65 9.41 6.04 Statutory Financial Reports Embedded derivative receivable Notes forming part of the Financial Statements (contd.) 11.72 11.72 NOTE [17] Equity share capital (a) Share capital authorised, issued, subscribed and paid up: Particulars Authorised: [1] Equity shares of 2 each Equity shares of 2 each 55129.23 1.60 1.60 49855.81 * crore shares As at 31-3-2021 Number of shares crore Statements 40,18,50,00,000 1,40,50,29,123 8037.00 25,12,50,00,000 5025.00 As at 31-3-2022 Number of 63.49 Issued, subscribed and fully paid up: 44393.05 5399.27 Other current assets Particulars LARSEN & TOUBRO crore As at 31-3-2022 As at 31-3-2021 NOTE [16] Due from customers (construction and project related activity) 33429.11 30631.64 Contract Assets [refer Note 41(d)] 15354.22 13761.41 48783.33 6319.19 26.71 Advance recoverable other than in cash Government grants receivable Retention money including unbilled revenue Less: Allowance for expected credit loss Other loans and advances Subsidiary and associate companies Net gain/(loss) on fair valuation of investments Others Dividend income: Subsidiary companies 733.74 Others Interest income: Joint venture companies Net gain/(loss) on sale of investments 2021-22 Net gain/(loss) on sale of property, plant and equipment Lease rentals Miscellaneous income (net of expenses) 426 780.09 crore 2020-21 275.42 Particulars 216.97 Net gain/loss on derivatives at fair value through profit or loss Other income Income from services to Group companies Notes forming part of the Financial Statements (contd.) 4.75 1055.51 7.16 Technical fees Lease rentals 65.51 74.20 89.58 73.02 Premium earned (net) on related forward exchange contracts NOTE [32] 46.59 Miscellaneous income 410.18 673.26 616.61 1304.35 101000.41 87255.48 425 Integrated Annual Report 2021-22 Notes forming part of the Financial Statements 50.50 950.71 Closing stock: 844.68 Statements Notes forming part of the Financial Statements (contd.) NOTE [33] Manufacturing, construction and operating expenses Particulars Cost of raw materials, components consumed: Raw materials and components Less: Scrap sales Construction materials consumed Purchase of stock-in-trade Stores, spares and tools consumed Sub-contracting charges Changes in inventories of finished goods, work-in-progress and stock-in-trade and property development : Finished goods Stock-in-trade Work-in-progress Less: Opening stock: Finished goods Work-in-progress 426.21 Stock-in-trade Statutory Financial Reports Discussion and Analysis Report Integrated Management 156.83 174.38 3.74 15.34 1619.06 1034.40 (9.04) 515.13 70.42 1006.28 506.09 1458.49 1076.70 (52.11) 14.78 51.19 95.83 88.75 250.50 210.65 3612.65 3360.29 Corporate Overview 70.88 Profit/(loss) on sale of investment properties 1650.38 85951.13 (f) Corporate and bank guarantees for performance given on behalf of subsidiary companies/ joint venture companies 29856.81 13899.75 (g) Contingent liabilities, incurred in relation to interests in joint operations 6520.74 (h) Share in contingent liabilities of joint operations for which the Company is contingently liable Contingent liabilities in respect of liabilities of other joint operators of joint operations 57.01 7042.11 61.95 (j) Indemnities for performance given on behalf of third parties 4405.09 324.60 4875.31 479.43 Notes: 1. 2. 3. 4. 5. 6. The Company does not expect any reimbursements in respect of the above contingent liabilities except in respect of matters at (j) It is not practicable to estimate the timing of cash outflows, if any, in respect of matters at (a) to (d) above pending resolution of the arbitration/appellate proceedings. Further, the liability mentioned in (a) to (d) above includes interest except in cases where the Company has determined that the possibility of such levy is remote. In respect of matters at (e), the cash outflows, if any, could generally occur up to five, being the period over which the validity of the guarantees extends except in a few cases where the cash outflows, if any, could occur any time during the subsistence of the borrowing to which the guarantees relate. 5534.67 12871.12 (e) Corporate and bank guarantees for debt given on behalf of subsidiary companies/joint venture companies 359.38 605.21 2021-22 25.93 29.09 13.38 13.30 752.36 730.68 1109.12 919.70 In respect of matters at (f), the cash outflows, if any, could generally occur up to nine, being the period over which the validity of the guarantees extends. 1861.48 As at 31-3-2022 As at 31-3-2021 3105.76 263.21 2989.58 292.64 (c) Excise duty/service tax/customs duty liability that may arise including those in respect of matters in appeal/challenged by the Company in Writ (d) Income tax liability that may arise in respect of which the Company is in appeal 341.37 179.47 2546.93 crore In respect of matters at (g) to (i), the cash outflows, if any, could generally occur up to completion of projects undertaken by the respective joint operations. In respect of matters at (j), the cash outflows, if any, is fully reimbursable by the third parties under an agreement entered in to with them 424 Servicing Commission 1892.06 3.44 1895.50 477.57 2021-22 1658.27 14.00 crore 2020-21 95458.20 Engineering and service fees 81906.37 2645.51 537.81 62.25 158.86 188.68 1233.93 1031.75 137.48 116.57 100383.80 2857.52 Other operational income: Property development activity Construction and project related activity Corporate Overview Management Integrated Discussion and Analysis Report Statutory Financial Reports Statements Notes forming part of the Financial Statements (contd.) NOTE [30] Commitments LARSEN & TOUBRO crore Manufacturing and trading activity Particulars As at 31-3-2021 (a) Estimated amount of contracts remaining to be executed on capital account (net of advances) on: (i) Property, plant & equipment 1658.27 (ii) Intangible assets (b) Funding committed by way of equity/loans to subsidiary companies NOTE [31] Revenue from operations Particulars Sales and service: As at 31-3-2022 LARSEN & TOUBRO 13.86 2020-21 (262.77) 7396.88 6398.20 crore 2021-22 2020-21 58.75 52.36 49.64 43.26 425.99 343.15 7.78 6.91 58.42 60.80 114.52 101.68 62.29 (1.17) 188.12 145.33 (264.92) 539.80 607.85 99.81 Repairs to buildings General repairs and maintenance Directors' fees Telephone, postage and telegrams Advertising and publicity Stationery and printing crore 2021-22 2020-21 6626.74 16.49 5736.54 154.01 29.83 11.41 85.93 75.51 281.16 240.93 49.11 43.89 96.94 165.40 Travelling and conveyance 21.39 207.13 375.97 22.49 Corporate social responsibility 131.67 157.49 Allowance for expected credit loss (net) 1056.35 703.96 Exchange (gain)/loss (net) Provision with respect to loans given to subsidiary companies Other provisions Recoveries from subsidiary and associates (142.09) 36.68 0.90 277.70 45.46 175.11 (65.47) 2982.68 (93.30) 615.38 156.66 389.83 179.15 Bad debts and advances written off(net of written back) Less: Allowance for expected credit loss written back 1.07 1.13 108.09 100.06 53.19 29.59 37.33 36.03 Commission: Distributors and agents 236.19 Others 16.95 1.92 2.20 Bank charges 24.22 77.98 19.15 77.43 Miscellaneous expenses 410.58 404.33 22.30 Rates and taxes Rent & hire charges Insurance 362.10 Other manufacturing, construction and operating expenses: Power and fuel 2054.12 1369.62 Royalty and technical know-how fees 4.38 57.50 Packing and forwarding 567.90 497.88 Rent hire charges 2623.82 2129.71 Engineering, professional, technical and consultancy fees 1612.56 1554.15 Insurance 450.92 435.34 Rates and taxes (1944.37) 6183.96 5821.86 5857.48 12755.52 164.66 12383.54 89.79 12590.86 31445.49 12293.75 22869.85 1070.62 1226.68 2718.52 1701.07 681.13 25166.38 16.65 324.10 3.57 360.03 7425.48 7766.23 5458.26 5821.86 3.57 18.12 360.03 308.36 5458.26 21993.33 583.66 Travelling and conveyance 779.91 427 Integrated Annual Report 2021-22 Notes forming part of the Financial Statements Notes forming part of the Financial Statements (contd.) NOTE [34] Employee benefits expense Particulars Salaries, wages and bonus Contribution to and provision for : Provident fund and pension fund 69630.46 Superannuation/employee pension schemes Gratuity funds Employee medical and other insurance premium expenses Staff welfare expenses Recoveries on account of deputation NOTE [35] Sales, administration and other expenses Particulars Power and fuel Packing and forwarding Professional fees Audit fees Expenses on employees stock option schemes crore 81565.35 10517.85 712.89 Repairs to plant and equipment 112.14 63.76 Repairs to buildings 24.33 21.28 General repairs and maintenance 566.64 546.17 9183.68 Bank guarantee charges 310.08 Provision/(reversal) for foreseeable losses on construction contracts (38.61) 37.16 Other provisions 164.64 136.79 Miscellaneous expenses 598.65 727.69 315.32 83.08 133.46 As at 31-3-2021 Non-current liabilities: Other financial liabilities Particulars Forward contract payables Embedded derivative payables Financial guarantee contracts Due to others (Mainly includes liabilities towards capital goods) NOTE [21] Non-current liabilities: Provisions Particulars Employee pension scheme Post-retirement medical benefits plan 420 crore As at 31-3-2022 As at 31-3-2021 15.37 32.84 13.17 13.84 78.76 6.23 NOTE [20] Amount of fine to be paid for the block, if applicable Fine = 0.2% of {(d)-(e)} Nil 2 FY 2020-21 & FY 2021-22 FY 2021-22 & FY 2022-23 450.00 crore [1] 3 = Mandatory borrowing to be done through debt securities in 2021-22 (T) [(b) 112.50 crore (25% of a)] 45 6 9 Actual borrowing done through debt securities in 2021-22 (T) (c) 450.00 crore Shortfall in the borrowing through debt securities, if any, for 2021-22 (T-1) carried forward to FY(T) (d) Nil 37.95 Quantum of (d), which has been met from (c) (e) Nil Shortfall, if any, in the mandatory borrowing through debt securities for 2021-22 (T) {after adjusting for any shortfall in borrowing for 2020-21 (T-1) which was carried forward to 2021-22 (T)} [1] Figure pertains to long-term borrowings with original maturity of more of than one year (excludes External Commercial Borrowings and inter-corporate borrowings between the Company and its subsidiaries) Details of penalty to be paid, if any, in respect to previous block (all figures in crore): 5. Sl. No. Particulars Details 1 2-years block period [(T-1), (T)] Nil Details 41.34 94.25 Particulars Loans repayable on demand from banks Short-term loan and advances from banks Short-term debentures [refer Note 19(a)(ii)] Commercial paper Loans from related parties: Subsidiary companies Joint venture companies 23(a) Loans guaranteed by directors Nil (previous year: Nil) crore As at 31-3-2022 Secured Unsecured 46.00 1773.67 Total 46.00 1773.67 As at 31-3-2021 Secured Unsecured Total 22.74 3494.54 22.74 3494.54 477.91 477.91 Current liabilities: Financial Liabilities - Borrowings NOTE [23] 7.84 7.84 crore As at 31-3-2022 345.63 As at 31-3-2021 299.64 348.86 307.04 645.27 655.90 Corporate Overview Management Integrated 145.25 Discussion and Analysis Report Statements Notes forming part of the Financial Statements (contd.) NOTE [22] Other non- current liabilities LARSEN & TOUBRO crore Particulars As at 31-3-2022 As at 31-3-2021 Other Payables (Deferred income on day one fair valuation of financial instrument) Statutory Financial Reports Incremental borrowings done in 2021-22 (T) (a) 2 2-year block period [(T), (T+1)] Redeemable at the end of 10th year from the date of allotment. Redemption value calculated as [{Average Ref WPI (on Maturity Date) / Average Ref WPI (on Issue Date)} x Face Value] with Floor Rate as 3% and Cap Rate as 12%. WPI here refers to Wholesale Price Index Current Liabilities: Financial Liabilities-Current maturities of Long term borrowings [refer Note 24] Non-Current liabilities: Financial Liabilities - Borrowings [refer Note 19] [1] The principal amount has been calculated as [{Average Ref WPI as at reporting period/Average Ref WPI (as at 23/5/2013)} x Face Value] 19(b) Details of term Loans (Unsecured): Sr. No. As at 31-3-2022 1 * crore 1128.86 2 3 4 5 541.93 133.46 41.22 22.26 As at 31-3-2021 * crore 1087.56 USD LIBOR + Spread [1] Rate of Interest for the year 2021-22 521.60 USD LIBOR + Spread [1] 128.46 USD LIBOR + Spread [1] 128.46 USD LIBOR + Spread [1] 52.99 9.00% p.a. payable monthly 28.61 8.40% p.a. payable monthly 730.86 6 7 Total Less: Terms of repayment for debentures outstanding as on 31.3.2022 Inflation Adjusted Principal as on the date of coupon payment payable on 126.15 Corporate Overview Management Integrated Discussion and Analysis Report Statutory Financial Reports Statements Notes forming part of the Financial Statements (contd.) NOTE [19] Non-current liabilities: Financial Liabilities- Borrowings (contd.) 19(a) (iii) Unsecured redeemable non-convertible inflation linked debentures: LARSEN & TOUBRO 2001.19 18.55 Face value per debenture (*) As at 31-3-2022 crore 10,00,000 May 23,2013 131.67 [1] As at 31-3-2021 * crore 127.75 [1] Interest for the year 2021-22 1.65% p.a. Less: 1.73 1.60 129.94 Date of allotment 2678.54 Less: Terms of repayment of term loan outstanding as at 31-3-2022 Larsen & Toubro Limited L9999MH1946PLC004768 15244 Crore [1] • CRISIL AAA (Stable) by CRISIL Limited • ICRA AAA (Stable) by ICRA Limited •IND AAA(Stable) by India Ratings and Research Private Limited National Stock Exchange of India Limited [1] Figure pertains to long-term borrowings with original maturity of more of than one year (excludes External Commercial Borrowings and inter-corporate borrowings between the Company and its subsidiaries) 419 Integrated Annual Report 2021-22 Notes forming part of the Financial Statements Notes forming part of the Financial Statements (contd.) NOTE [19] Details Non-current liabilities: Financial Liabilities- Borrowings (contd.) 1. Name of the Company: Larsen & Toubro Limited 2. CIN: L99999MH1946PLC004768 3. Report filed for FY (T): 2021-22 4. Details of the borrowings: Sl. No. Particulars 1 Annexure B 2737.40 be paid, in case of shortfall in the required borrowing under the framework Name of Stock Exchange in which the fine shall Repayable on April 14, 2025 Repayable on October 8, 2023 Repayable on April 8, 2023 Repayable on April 8, 2024 Repayable on October 19, 2023 Repayable on May 7, 2023 1982.64 19.48 Current maturity of long-term borrowings [refer Note 24] 730.86 Short Term Unsecured Loan [refer Note 23] 1928.20 Borrowings noncurrent [refer Note 19] [1] Represents unsecured term loans obtained in foreign currency. 19(c) Annual disclosure as Large Corporate pursuant to SEBI circular dated November 26, 2018. 5 Annexure A: Particulars Name of the Company 1 2 CIN 3 4 Outstanding borrowings of the Company as at 31st March 2022 Highest Credit Rating during the previous financial year along with name of the Credit Rating Agency Sr. No. 2737.40 83.98 193.74 83.98 ---0.14 Others Total 17563.76 16.76 15514.73 1.04 5835.50 0.14 424.94 525.93 2.66 904.92 20.46 40769.78 NOTE [26] Current liabilities - Other financial liabilities Particulars Unclaimed dividend Forward contract payable Embedded derivative payable Financial guarantee contracts Due to others [1] [2] [1] Due to others include due to directors 89.75 crore (previous year: * 36.96 crore) [2] Mainly includes liability towards employee benefits & capital goods Micro and small enterprises Disputed: 448.16 40301.02 0.83 901.29 [a] Current liabilities: Financial liabilities - Trade payables ageing (contd.) LARSEN & TOUBRO crore As at 31-3-2021 Particulars Unbilled Dues Outstanding for the following periods from the due date of payment Not due Total Less than 1 year NOTE [27] 1-2 years More than 3 years Undisputed: Micro and small enterprises 49.08 Others 17514.68 368.78 15129.19 27.88 5806.58 1.04 423.90 0.55 525.38 2-3 years Other current liabilities Particulars Contract liabilities [refer Note 41(d)] 28888.84 27474.76 423 Integrated Annual Report 2021-22 Notes forming part of the Financial Statements Notes forming part of the Financial Statements (contd.) NOTE [28] Current liabilities - provisions Particulars Provision for employee benefits: 25179.78 2294.98 Gratuity Employee pension scheme Post-retirement medical benefits plan Other Provisions [refer Note 50] NOTE [29] Contingent liabilities Particulars (a) Claims against the Company not acknowledged as debts (b) Sales tax/GST liability that may arise in respect of matters in appeal crore As at 31-3-2022 Compensated absences NOTE [25] 26571.06 2317.78 15264.06 Due to customers (Construction related activity) Advances from customers Other payables [1] [1] mainly includes liabilities towards joint ventures, statutory dues & employee benefits. crore As at 31-3-2022 129.35 As at 31-3-2021 127.78 346.90 319.51 14036.37 84.29 37.44 9.74 2719.65 3317.63 1939.12 2451.53 crore As at 31-3-2022 As at 31-3-2021 11307.00 11143.41 55.38 97.67 Notes forming part of the Financial Statements (contd.) Statutory Financial Reports 5159.78 926.05 18.55 19.48 Redeemable non-convertible floating rate debentures [refer Note 19(a)(iii)] 1.73 1.60 5232.49 999.56 24(a) Loans guaraneed by directors Nil (previous year: * Nil) NOTE [25] Current liabilities: Financial liabilities - Other trade Payables Particulars Acceptances Due to related parties: Subsidiary companies Associate companies Joint venture companies Due to others 25(a) Current liabilities: Financial liabilities - Trade payables ageing Particulars Undisputed: Redeemable non-convertible fixed rate debentures [refer Note 19(a)(ii)] Term loans from banks [refer Note 19(b)] 52.43 52.43 As at 31-3-2021 4.40 4.40 193.74 90.91 90.91 2097.39 2097.39 6827.90 6827.90 23(b) The Company has fund based and non-fund based facilities (viz. bank guarantees, letter of credits and derivatives) from banks. These facilities are secured by hypothecation of inventories and trade receivables. Amount of inventories and trade receivables that are pledged as collateral: 6932 crore as at March 31, 2022 (March 31, 2021: 10182 crore) crore 23(c) The Company has been sanctioned working capital limits in excess of 5 crores, in aggregate, at points of time during the year, from banks or financial institutions on the basis of security of current assets. The quarterly returns filed by the Company with such banks or financial institutions are in agreement with the Books of Account of the Company of the respective quarters. Integrated Annual Report 2021-22 Notes forming part of the Financial Statements Notes forming part of the Financial Statements (contd.) NOTE [24] Current liabilities: Financial liabilities - Current maturities of long-term borrowings Particulars Secured: Redeemable non-convertible fixed rate debentures [refer Note 19(a)(i)] Unsecured: crore As at 31-3-2022 421 As at 31-3-2022 As at 31-3-2021 162.80 18.32 4911.97 0.51 736.38 0.45 271.35 0.92 876.99 473.67 44901.71 Disputed: Micro and small enterprises Others 8440.19 1.33 9. Total 417.20 20245.47 17895.82 4930.29 736.89 271.99 879.24 9.96 45385.34 422 Corporate Overview Management Integrated Discussion and Analysis Report 20671.11 Statements 17859.55 36.27 343.99 745.40 1002.92 7.67 1771.17 14.01 1761.12 2524.24 42224.63 44911.67 2778.05 37199.44 40321.48 Others As at 31-3-2022 crore Unbilled Dues Total Not due Less than 1 1-2 years 2-3 years year More than 3 years Micro and small enterprises Outstanding for the following periods from the due date of payment 2917.34 428 (i) Items not to be reclassified to Profit or Loss in subsequent periods: Current tax expense/(income): 57716.68 362.53 Hydrocarbon 8863.43 7125.84 15989.27 15.48 Total as per Statement of Profit and Loss/ Segment reporting 58079.21 16004.75 Power 3003.68 148.25 12579.42 3151.93 3176.56 Heavy Engineering 1176.67 1491.86 2668.53 42.89 2711.42 Defence Engineering 2579.36 823.24 3402.60 7.39 3409.99 24.63 Electrical & Automation (discontinued 45137.26 Other Revenue 42.64 2723.94 Defence Engineering 2796.35 418.70 3215.05 2.95 3218.00 Others 3995.67 130.60 4126.27 4.30 Infrastructure 4130.57 80644.66 20047.33 100691.99 308.42 101000.41 ii. For the year ended March 31, 2021: crore Revenue as per Ind AS 115 Segment Domestic Foreign Total Total 2681.30 operations) 158.23 crore Provision on Contract Assets 2020-21 2871.49 2021-22 1142.75 2020-21 983.03 Changes in loss allowance for expected credit loss: Provision/(reversal) of allowance for expected credit loss 411.24 297.07 379.24 141.77 Additional provision (net) towards credit impaired receivables Written off as bad debts 185.62 3006.54 205.58 17.95 (121.66) (367.60) Balance as at March 31 3481.74 3006.54 1599.24 1142.75 Corporate Overview Management Integrated Discussion and Analysis Report Statutory Financial Reports 77.25 1050.25 2021-22 Provision on Trade Receivables 1208.48 9.45 1217.93 Others 3328.74 Total Less: Electrical & Automation 65139.39 1050.25 108.95 22435.79 158.23 3437.69 87575.18 1208.48 435.86 3873.55 898.23 Balance as at April 1 88473.41 1217.93 (discontinued operations) Revenue for continuing operations 64089.14 22277.56 86366.70 888.78 87255.48 (b) Out of the total revenue recognised under Ind AS 115 during the year, 95882.14 crore (previous year: 82646.59 crore) is recognised over a period of time and 4809.85 crore (previous year: 4928.59 crore) is recognised at a point in time. (c) Movement in Expected Credit Loss during the year: 434 Particulars 9.45 Statements 1084.26 Heavy Engineering 1658.85 2919.31 Other countries 10437.47 11452.59 Total foreign countries (ii) 20099.01 22457.96 Total (i+ii) 101000.41 88473.41 Less: Discontinued operations 1217.93 1620.11 Total 87255.48 Particulars Non-current assets As at 31-3-2022 India (i) 13455.49 Foreign countries (ii) 230.75 Total (i+ii) 13686.24 As at 31-3-2021 12999.29 101000.41 350.81 13350.10 2112.02 3632.35 49.11 46.03 - (264.01) (1020.78) 5034.12 2776.68 Note: There is no impairment in non-financial assets of the segments. Unallocable corporate expenses include impairment loss of Nil for the year ended March 31,2022 (previous year: 0.10 crore) (b) Geographical information 432 Particulars crore Revenue by location of project 4712.36 For the For the year ended India(i) Foreign countries: United Arab Emirates Saudi Arabia Qatar Kuwait 31-3-2022 80901.40 31-3-2021 66015.45 2258.32 1753.59 year ended 1597.04 Corporate Overview Integrated For the year ended March 31, 2022: crore Revenue as per Ind AS 115 Segment Domestic Foreign Total Other Revenue Infrastructure Hydrocarbon Power 55784.32 13177.66 i. 68961.98 Total as per Statement of Profit and Loss/ Segment reporting 69157.59 12320.82 4971.55 17292.37 59.10 17351.47 4150.46 264.56 4415.02 3.82 4418.84 195.61 Management (a) Disaggregation of revenue into Operating Segments and Geographical areas NOTE [41] Discussion and Analysis Report Statutory Financial Reports Statements LARSEN & TOUBRO Notes forming part of the Financial Statements (contd.) NOTE [40] Disclosure pursuant to Ind AS 108 "Operating Segment" (contd.) (c) Revenue contributed by any single customer in any of the operating segments, whether reportable or otherwise, does not exceed ten percent of the Company's total revenue. (d) The Company's reportable segments are organised based on the nature of products and services offered by these segments. (e) Basis of identifying operating segments, reportable segments, segment profit and definition of each reportable segment: Basis of identifying Operating segments: (i) ii) Operating segments are identified as those components of the Company (a) that engage in business activities to earn revenues and incur expenses (including transactions with any of the Company's other components; (b) whose operating results are regularly reviewed by the Company's executive management to make decisions about resource allocation and performance assessment; and (c) for which discrete financial information is available. Disclosure pursuant to Ind AS 115 "Revenue from Contracts with Customers" The Company has six reportable segments as described under "segment composition" below. The nature of products and services offered by these businesses are different and are managed separately given the different sets of technology and competency requirements. An operating segment is classified as reportable segment if reported revenue (including inter-segment revenue) or absolute amount of result or assets exceed 10% or more of the combined total of all the operating segments. iii) Segment profit Performance of a segment is measured based on segment profit (before interest and tax), as included in the internal management reports that are reviewed by the corporate executive management. iv) Segment composition Infrastructure segment comprises engineering and construction of (a) building and factories, (b) transportation infrastructure, (c) heavy civil infrastructure, (d) power transmission & distribution, (e) water & effluent treatment systems and (f) minerals & metals. Hydrocarbon segment comprises EPC solutions for the global Oil & Gas industry from front-end design through detailed engineering, modular fabrication, procurement, project management, construction, installation, and commissioning. Power segment comprises turnkey solutions for Coal-based and Gas-based thermal power plants including power generation equipment with associated systems and/or balance-of-plant packages. Heavy Engineering segment comprises manufacture and supply of custom designed, engineered critical equipment & systems to core sector industries like Fertiliser, Refinery, Petrochemical, Chemical, Oil & Gas and Thermal & Nuclear Power. Defence Engineering segment comprises (a) design, development, serial production and through life-support of equipment, systems and platforms for Defence and Aerospace sectors and (b) design, construction, and repair/refit of defence vessels. Electrical & Automation segment (upto the date of transfer and disclosed as discontinued operation) comprises manufacture and sale of low and medium voltage switchgear components, custom-built low and medium voltage switchboards, electronic energy meters/protection (relays) systems and control & automation products. Others segment includes realty, smart world & communication projects (including military communications), marketing and servicing of construction & mining machinery and parts thereof and manufacture, sale of rubber processing machinery and digital platforms - (i) SuFin for B2B e-commerce & (ii) EduTech, for higher education and professional skilling. 433 Integrated Annual Report 2021-22 Notes forming part of the Financial Statements Notes forming part of the Financial Statements (contd.) Reportable segments Notes forming part of the Financial Statements (contd.) NOTE [41] Disclosure pursuant to Ind AS 115 "Revenue from Contracts with Customers" (contd.) (d) Contract balances: Other current assets b. 15 16 2115.35 46426.90 41965.41 Current liabilities expected to be settled within twelve months and after twelve months from the reporting date: 7890.40 67.09 8702.33 2182.44 2512.75 1.23 55129.23 2513.99 49855.81 Other financial assets crore Particulars Note twelve months As at 31-3-2022 After twelve months As at 31-3-2021 Within After Total twelve months twelve Total months Trade payables: Within Due to micro enterprises and small enterprises 257.87 249.60 twelve twelve Total twelve twelve Total months months months months Inventories 9 1726.46 257.87 1406.05 2207.29 670.28 Trade receivables Loans 11 34436.45 1910.90 36347.35 32303.21 1028.40 2877.57 33331.60 14 249.60 3132.51 Note 378.96 473.67 1 Balance as at April 01, 2020 7990.00 13795.12 Current maturities of long term borrowings (Note 24) 3555.48 Lease liability Total 2 Additions to lease liability 208.14 109.15 3 Changes from financing cash flows 9117.73 Current borrowings (Note 23) (6823.60) (117.04) 25548.74 109.15 (1219.79) 4 Changes on lease termination/lease concessions (9.98) (9.98) 5 The effect of changes in foreign exchange rates 6 Interest accrued (63.20) 601.76 (3396.88) 94.72 (Note 19) No. 328.25 120.05 448.30 Due to others 25 42,800.99 Lease Liability Other financial liabilities 26 70.15 3295.44 Other current liabilities 27 24356.50 Non-current borrowings Provisions 1480.32 2110.68 54.29 22.19 4532.34 381.16 44911.67 124.44 3317.63 28888.84 1861.48 38008.99 75.37 2429.01 22808.98 1224.10 2312.49 38.66 22.52 4665.78 426.28 40321.48 114.03 2451.53 27474.76 1650.38 NOTE [43] Disclosure with regard to changes in liabilities arising from financing activities as required by Ind AS 7 "Statement of Cash Flows": crore Sr Particulars 28 Particulars After Within (3804.95) (495.55) (3309.40) i. ii. During the current year, increase in net contract balances is primarily due to higher revenue recognition as compared to progress bills raised. During the previous year, decrease in net contract balances is primarily due to higher progress bills raised as compared to revenue recognition. Revenue recognised from opening balance of contract liabilities amounts to 5589.58 crore (previous year: 5896.41 crore) iii. Revenue recognised from the performance obligation satisfied (or partially satisfied) upto previous year (arising out of contract modifications) amounts to ₹ 10.19 crore (previous year: 26.40 crore) (e) Cost to obtain the contract: Z (f) ii. i. 2999.00 Amortisation in Statement of Profit and Loss: Nil (previous year: Nil) Reconciliation of contracted price with revenue during the year: Particulars Opening contracted price of orders as at start of the year[1] crore 2021-22 701910.49 2020-21 675424.00 Add: Fresh orders/change orders received (net) 104359.55 131925.57 Increase due to additional consideration recognised as per contractual terms/(decrease) due to scope reduction (net) Increase/(decrease) due to exchange rate movements (net) Recognised as contract assets at March 31, 2022: Nil (previous year: Nil) 2620.01 585.84 1391.28 Net increase/(decrease) LARSEN & TOUBRO i. Movement in contract balances during the year. crore 2021-22 2020-21 Particulars Contract Assets Contract Net contract Liabilities Contract Contract Net contract balances Opening balance as at April 01 4390.28 44393.05 19213.27 Assets 48198.00 Liabilities balances 25675.33 22522.67 Closing balance as at March 31 48783.33 26571.06 22212.27 44393.05 25179.78 19213.27 25179.78 (20881.89) (1203.27) Less: Orders completed during the year Upto 1 Year 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years Beyond 5 As at March 31, 2022 315575.73 As at March 31, 2021 308209.45 130487.43 114926.17 96242.11 102087.76 56898.50 61709.27 18900.06 16998.38 4689.65 performance years 8357.98 6811.01 435 Integrated Annual Report 2021-22 Notes forming part of the Financial Statements Notes forming part of the Financial Statements (contd.) NOTE [42] Disclosure pursuant to Ind AS 1 "Presentation of financial statements": a. Current assets expected to be recovered within twelve months and after twelve months from the reporting date: crore As at 31-3-2022 As at 31-3-2021 Within After 5676.86 Total Outstanding Time for expected conversion to Revenue 55660.22 80749.97 On account of business transfer Closing contracted price of orders as at the end of the year[1] Total Revenue recognised during the year : 2603.95 a. Revenue out of orders completed during the year b. Revenue out of orders under execution at the end of the year (I) 753815.67 100691.99 6731.81 93960.18 701910.49 87575.18 6262.44 81312.74 Revenue recognised upto previous year (from orders pending completion at the end of the year) (II) 344714.14 312712.25 Increase/(decrease) due to exchange rate movements (III) (434.38) (323.95) Balance revenue to be recognised in future viz. Order book (IV) 315575.73 308209.45 Closing contracted price of orders as at the end of the year [1] (1+||+|||+|V) 753815.67 701910.49 [1] including full value of partially executed contracts. (g) Outstanding performance and Time for its expected conversion into Revenue: crore 1172.50 1151.37 (125.57) (18.05) Total (0.84) (ix) Other Comprehensive Income (b) Major classes of assets and liabilities of E&A business transferred: Particulars Group(s) of assets classified as held for sale: Property, plant and equipment Capital work-in-progress Intangible assets Intangible assets under development Loans Inventories Trade receivables Other assets Total (viii) Gain on transfer E&A business (net of tax) (vi)-(vii) Liabilities related to group(s) of assets classified as held for sale: Provisions Total Other liabilities Carrying amount of net assets sold (c) Summarised Statement of Cash Flows of discontinued operations: Particulars Cash flow from operating activities 430 Cash flow from investing activities [1] 11078.32 2521.54 8556.78 (2.63) Trade payables crore (vii) Tax on above (including related deferred tax reversal) 93.70 i. ii. The assets and liabilities of LTHE are reflected at their carrying amounts. No adjustment is made to reflect the fair values, or recognise any new asset or liability. The balance of the Retained earnings appearing in the financial statements of the LTHE is aggregated with the corresponding balance appearing in the financial statements of the Company. iii. Restating the financials of the Company from April 1, 2020. 429 Integrated Annual Report 2021-22 Notes forming part of the Financial Statements Notes forming part of the Financial Statements (contd.) NOTE [39] Disclosure pursuant to Ind AS 105 "Non-current assets held for sale and discontinued operations": During the year 2020-21, the Company completed the divestment of Electrical & Automation (E&A) business which was classified as discontinued operation. (vi) Gain on transfer of E&A business before tax (a) The operating profit from E&A business upto the date of divestment and the gain on divestment have been shown below: 2020-21 Particulars Revenue from operations (ii) Total expense 1262.74 1141.83 (iii) Profit before tax (i)-(ii) (iv) Tax expense 120.91 27.21 (v) Profit after tax (iii)-(iv) crore L&T Hydrocarbon Engineering Limited (LTHE), a wholly owned subsidiary, is merged with the Company under a Scheme of Arrangement approved by National Company Law Tribunal, Mumbai on January 28, 2022. The merger is effective from the appointed date April 1, 2021. LTHE has a registered office in Mumbai, India and is engaged in the business of EPC solutions for the global Oil & Gas industry from front-end design through detailed engineering, modular fabrication, procurement, project management, construction, installation, and commissioning. No fresh shares are issued to effect the merger as LTHE is a wholly owned subsidiary of the Company. Further the merger is accounted in accordance with the Scheme of Arrangement and accounting standards using pooling of interest method, involving the following: As at 655.04 11.22 Particulars For the year ended 31-3-2022 Inter- External segment For the year ended 31-3-2021 Total External Inter- segment Total Revenue Infrastructure 69157.59 427.74 69585.33 58079.21 crore 284.94 Hydrocarbon 17351.47 12.03 17363.50 16004.75 6.62 16011.37 Power 4418.84 29.35 4448.19 3176.56 16.08 58364.15 August 31, 2020 LARSEN & TOUBRO (a) 174.97 130.46 2.03 641.50 701.11 231.69 2548.02 591.74 91.32 347.67 1030.73 1517.29 crore Information about reportable segments: 2020-21 (60.37) Cash flow from financing activities Activities related to borrowings and investments of surplus funds were managed at Corporate and accordingly formed part of unallocable corporate assets/liabilities (refer Note 40). There were no borrowings or investments specifically allocable to E&A business. [1] represents additions & deletions to property, plant and equipment and intangible assets adjusted for movement of (a) capital work-in-progress for property, plant and equipment and (b) Intangible assets under development during the year. Corporate Overview Management Integrated Discussion and Analysis Report Statutory Financial Reports Statements Notes forming part of the Financial Statements (contd.) NOTE [40] Disclosure pursuant to Ind AS 108 "Operating Segment" (2.48) 3192.64 1150.68 7.25 1172.50 52.36 3 Insurance 450.92 96.94 4 Rent hire charges 2623.82 5 Rates and taxes 681.13 58.42 114.52 62.29 620.26 606.28 2738.34 2129.71 567.90 497.88 435.34 541.14 99.81 60.80 595.95 101.68 2231.39 6 Travelling and conveyance 779.91 188.12 743.42 968.03 583.66 -1.17 43.26 582.49 Packing and forwarding 1419.26 Integrated Discussion and Analysis Report Statutory Financial Reports Statements Notes forming part of the Financial Statements (contd.) NOTE [35] (a) LARSEN & TOUBRO - Aggregation of expenses disclosed vide Note 33 -Manufacturing, construction and operating expenses, Note 34 -Employee benefits expense and Note 35 Sales, administration and other expenses. crore Sr. 2021-22 2020-21 2 Nature of expenses Note 33 Note 34 Note 35 1 Power and fuel 2054.12 58.75 Total 2112.87 Note 33 1369.62 Note 34 Note 35 Total 49.64 No. 7.45 712.89 858.22 Property, plant and equipment Right of use assets Investment property Amortisation of intangible assets Impairment of property, plant and equipment Obsolescence on property, plant and equipment NOTE [38] Disclosure pursuant to Ind AS 103 "Business Combinations": 2021-22 crore 2021-22 1689.77 2020-21 2376.98 Depreciation on: 0.10 4.63 2381.71 crore 2020-21 1021.04 962.27 104.00 16.49 122.80 17.48 1141.53 23.72 1102.55 40.58 0.10 64.47 1754.24 145.33 Particulars NOTE [37] 7 Repairs to buildings 24.33 16.49 40.82 21.28 21.39 42.67 8 General repairs and maintenance 566.64 236.19 802.83 Depreciation, amortisation, impairment and obsolescence 546.17 9 Miscellaneous expenses 598.65 410.58 1009.23 727.69 753.30 404.33 1132.02 NOTE [36] Finance costs Particulars Interest expenses Other borrowing costs Exchange loss 207.13 Heavy Engineering 2723.94 314.52 impairment & obsolescence included in segment Other non-cash expenses included in segment expense Finance cost included in segment Interest income included in segment Additions to non-current assets expense expense Particulars expenses For the For the year amortisation, ended For the year ended For the year ended For the year ended year ended ended 31-3-2022 31-3-2021 31-3-2022 31-3-2021 31-3-2022 31-3-2021 31-3-2022 31-3-2021 31-3-2022 31-3-2021 For the year ended For the year ended For the year ended For the For the year Infrastructure 697.03 year ended 667.67 Depreciation, Disclosure pursuant to Ind AS 108 "Operating Segment" (contd.) Others Total Unallocable corporate assets/liabilities Inter- segment assets/liabilities Total assets/liabilities 7225.62 6616.69 110902.39 101522.49 3989.02 79493.27 3819.33 72512.82 58610.12 crore 59386.55 26658.40 (1010.23) 168502.28 (993.42) 159915.62 (1010.23) (993.42) 101388.23 98177.80 431 Integrated Annual Report 2021-22 Notes forming part of the Financial Statements Notes forming part of the Financial Statements (contd.) NOTE [40] 22905.19 Electrical & Automation (discontinued operations) 36.31 194.80 [Discontinued operations] 0.69 2.14 66.58 Others 41.82 41.88 2.18 2.39 740.76 600.10 Total 1047.17 Electrical & Automation 1056.75 44.08 Unallocated corporate 125.33 95.46 4.14 194.80 1.95 (194.80) 276.08 (276.08) 4.58 (4.58) 6.02 3274.87 1988.24 (6.02) 2023.26 1809.22 Inter-segment 44.97 33.53 56.83 36.32 276.08 4.58 Hydrocarbon 112.82 127.03 2.56 3.58 Power 32.33 35.58 0.91 0.48 Heavy Engineering 84.26 46.41 1.18 0.82 Defence Engineering 116.76 136.69 1.83 1.14 6.02 1863.02 1111.21 491.36 61.32 53.30 55.88 42.17 47.21 3766.94 3732.45 5843.61 (1262.74) Inter-segment revenue (815.50) (815.50) (680.38) (680.38) Total 101000.41 101000.41 87255.48 87255.48 Segment result [Profit /(loss) before interest and tax] Infrastructure (44.81) 4956.38 Hydrocarbon 1551.38 1267.68 Power 139.38 111.08 Heavy Engineering 470.11 489.02 Defence Engineering 533.48 616.98 120.91 4274.41 Others (1217.93) 89198.60 3038.46 2711.42 306.81 3018.23 Defence Engineering 3218.00 8.40 3226.40 3409.99 0.13 3410.12 Electrical & Automation (discontinued operations) 1217.93 Revenue of discontinued operations 44.81 Others 4130.57 23.46 4154.03 3873.55 65.80 3939.35 Sub-total 101000.41 815.50 101815.91 88473.41 725.19 1262.74 552.46 708.32 8203.19 Particulars Infrastructure As at 31-3-2022 As at 31-3-2021 As at 31-3-2022 Segment Liabilities As at 31-3-2021 78516.42 71165.97 56504.01 48169.76 Hydrocarbon 11618.71 Segment Assets 9212.21 10654.59 Power 5840.27 5518.52 4757.17 4672.13 Heavy Engineering 2894.59 3165.49 1314.82 1430.07 Defence Engineering 4806.78 9195.80 crore 11797.79 11199.23 (2548.75) 8650.48 7588.40 (120.91) Electrical & Automation (discontinued operations) Total Result of discontinued operations Inter-segment margins on capital jobs Unallocable corporate income net of expenditure Finance cost Exceptional items[Note 59] Profit before tax Current tax Deferred tax Net profit after tax from continuing operations Profit before tax from discontinued operations Tax expense of discontinued operations Net profit after tax from discontinued operations Net profit after tax from continuing operations & discontinued operations 3292.46 (1754.24) 290.06 10031.47 (2427.94) 275.92 7879.45 7879.45 (11.11) 3062.71 (2381.71) (2818.65) 5318.73 (1847.72) (323.70) 3147.31 - Management (1.29) (157.31) 7 (4) (i) Tax on expenses not tax deductible: (A) Corporate social responsibility (B) Tax on employee perquisites borne by the Company (ii) Tax effect on impairment recognised on which deferred tax asset is not recognised (iii) Effect of current tax related to earlier years (iv) Effect of lower tax rate on long term capital gains (v) Tax effect of losses in joint operation of current year on which no deferred tax benefit is recognised (vi) Effect of deduction with respect to dividend income (vii) Reversal of deferred tax on brought forward losses on utlisation as set off against gains (viii) Tax effect on various other items crore 2021-22 2020-21 10031.47 5318.73 11199.23 10031.47 16517.96 25.17% 25.17% 2524.72 4157.24 33.14 39.08 3.04 2.52 Tax on Accounting profit (3)=(1)*(2) 795.33 (3) (2) On foreign currency translation of joint operations Income tax expense reported in the OCI section [(i)+(ii)] (63.26) 72.19 0.77 2.97 (40.70) 54.79 (6.69) 4.42 (109.88) 134.37 (18.52) 145.19 437 Integrated Annual Report 2021-22 Notes forming part of the Financial Statements Notes forming part of the Financial Statements (contd.) [NOTE 44] Disclosure pursuant to Ind AS 12 "Income Taxes": (contd.) (b) Reconciliation of tax expense and the accounting profit multiplied by domestic tax rate applicable in India: Sr. No. Particulars (1) Profit before tax from: Continuing Operations (including exceptional items) Discontinued Operations Corporate tax rate as per Income Tax Act, 1961 3.08 (12.96) 5.73 (266.65) Sr. Particulars No. Base Amount Deferred Tax As at 31-3-2021 Base Amount Deferred Tax 1. Deductible temporary differences towards provision for diminution in value of investments on which DTA not created 5380.05 1278.86 6127.05 1449.77 2. Temporary differences arising out of revaluation of tax base of assets (on account of indexation benefit) 7965.30 1822.46 7026.37 1607.63 Total 13345.35 3101.32 13153.42 3057.40 (190.06) 426.40 As at 31-3-2022 crore (ii) Unrecognised deductible temporary differences for which no deferred tax asset (DTA) is recognised in Balance Sheet: 438 3.48 (407.49) 6.95 (260.34) 103.51 5.01 136.80 (372.70) 562.93 2152.02 4720.17 21.45% 28.58% Total effect of tax adjustments [(i) to (viii)] Net gain/(loss) on fair value of debt securities (5) (6) Effective tax Rate (6)=(5)/(1) (c) (i) Unused tax losses for which no deferred tax asset (DTA) is recognised in Balance Sheet: Particulars Capital loss Base Amount (* crore) 682.79 As at 31-3-2022 Deferred Tax (* crore) 156.22 Expiry date Base Amount (crore) As at 31-3-2021 Deferred Tax (*crore) Expiry date FY 2029-30 Tax expense recognised during the year (5)=(3)+(4) Net gain/(loss) on cost of hedge reserve Corporate Overview Deferred tax: 59.99 14 Other changes (transfer within categories) (5232.49) 15 Balance as at March 31, 2022 12968.41 2097.39 (981.56) 5232.49 5232.49 46.08 178.42 20476.71 436 Corporate Overview Management Integrated Discussion and Analysis Report Statutory Financial Reports Statements Notes forming part of the Financial Statements (contd.) NOTE [43] LARSEN & TOUBRO Disclosure with regard to changes in liabilities arising from financing activities as required by Ind AS 7 "Statement of Cash Flows": (contd.) Amounts reported in Statement of Cash Flows under financing activities: crore Particulars 2021-22 2020-21 20.05 (36.59) 1064.23 Interest accrued 13 Other changes (transfer within categories) On mark to market gain/(loss) on cash flow hedges (999.56) 999.56 8 Balance as at March 31, 2021 16646.73 6827.90 999.56 9 Additions to lease liability 190.27 86.30 24664.46 Proceeds from non-current borrowings 10 (4713.97) (18.00) (96.33) 86.30 (4378.30) 11 Changes on lease termination/lease concessions (1.82) (1.82) 12 The effect of changes in foreign exchange rates 39.94 Changes from financing cash flows 450.00 450.00 Repayment of non-current borrowings 771.12 Income tax expense reported in Profit or Loss [(i)+(ii)] 2152.02 4720.17 Income tax expense is attributable to: Profit from continuing operations (including exceptional items) Profit from discontinued operation 2152.02 2171.42 2548.75 2152.02 4720.17 2. Other comprehensive income (OCI) Section: On remeasurement of defined benefit plans 19.51 13.27 19.51 (ii) Items to be reclassified to Profit or Loss in subsequent periods: (A) Current tax expense/(income): On gain/(loss) on cash flow hedges other than mark to market 71.85 (2.45) 71.85 9117.73 (B) (2.45) (275.92) Tax expense on origination and reversal of temporary differences 13.27 (ii) (Repayments)/proceeds from other borrowings (net) Deferred tax: (18.00) (4713.97) (6823.60) Repayment of lease liability (117.04) Total changes from financing cash flows (refer to Sr.No 3 & 10 supra) (4378.30) (1219.79) NOTE [44] Disclosure pursuant to Ind AS 12 "Income Taxes": (a) Major components of tax expense/(income): (96.33) Sr. No. 3943.32 5.73 2424.86 3.08 Tax expense of earlier years Current income tax expense Current Income tax : (i) Profit or Loss section (3396.88) Particulars 2020-21 2021-22 crore 1. 20.23 2.93 18.40 (1.62) Amount included as part of "Finance cost" !! 79.79 88.70 4.03 20.03 12.79 13.54 75.50 28.54 Amount included in "Employee benefits expense" ¡ 82.90 88.70 32.90 13.20 85.92 Amount included in "Profit from discontinued 23.62 18.40 28.54 5.82 5.82 27.47 53.04 Total (i+ii+iii+iv) 3.11 0.44 23.52 2.20 iv 5.25 (18.32) (4.72) (27.95) (53.16) (31.26) comprehensive income" iii Amount included as part of "Other operations" 27.47 (268.87) Total (1 to 8) 4 (268.79) (35.71) (39.40) Interest income on plan assets 3 268.87 268.79 23.62 Actuarial losses/(gains) - others 23.52 20.23 38.63 37.77 Interest cost 2 82.90 88.70 4.03 32.90 20.03 (0.69) (5.00) (27.95) (4.72) (0.02) (0.01) from S&A Amount capitalised out of the above/recovered 8 111.85 (66.50) I Actuarial gain/(loss) not recognised in books 7 10.22 Past service cost 6 (111.85) 66.50 (48.16) (30.57) actual return on plan assets and interest income 5 Actuarial losses/(gains) - difference between 5.25 (18.32) 53.04 88.70 i) Employee Actual return on plan assets (0.28) (31.81) ii) financial assumptions i) demographic assumptions changes in: (4.83) 70.58 84.25 246.99 225.24 (0.95) Add/(less): Actuarial losses/(gains) arising from 2.98 Add: Contribution by plan participants 268.87 268.79 23.62 23.52 20.03 20.22 38.63 ii) Transfer-in/(out) 37.77 8.36 Less: Benefits paid 377.95 371.56 320.34 313.02 711.09 775.42 Closing balance of the present value of defined benefit obligation (0.70) (2.50) 1.86 iii) experience adjustments Add/(less): Translation adjustments (429.91) (0.75) (24.08) (465.97) 8.16 6.00 3.69 6.86 (29.54) (16.71) (5.27) (16.56) (1.62) (13.13) (24.39) (24.78) 10.22 Add: Past service cost 31.39 (12.49) (158.93) (60.53) Add: Business transfer Add: Interest cost 82.90 88.70 As at 31-3-2021 Trust-managed provident fund plan As at 31-3-2022 crore Particulars c) The changes in the present value of defined benefit obligation representing reconciliation of opening and closing balances thereof are as follows: Disclosure pursuant to Indian Accounting Standard (Ind AS) 19 "Employee Benefits" (contd.) NOTE [45] Notes forming part of the Financial Statements (contd.) LARSEN & TOUBRO Gratuity plan Statements Discussion and Analysis Report Integrated Management Corporate Overview 440 380.73 202.29 83.87 69.96 Statutory Financial Reports Post-retirement medical benefit plan Company pension plan As at 3178.15 3417.58 369.13 4.03 2.98 13.25 13.54 77.71 85.93 Add: Current service cost 377.95 316.16 320.34 766.78 711.09 Opening balance of the present value of defined benefit obligation As at 31-3-2021 As at 31-3-2022 As at 31-3-2021 As at 31-3-2022 As at 31-3-2021 31-3-2022 82.90 13.25 Amount to be recognised as liability/(asset) 77.71 2. Balance as at April 1 1. No. Particulars Sr. (754.27) (1140.30) 64.32 771.12 Tax (income)/expense during the period recognised in: 19.97 (275.92) 21.46 787.94 (e) Reconciliation of deferred tax (assets)/liabilities Net deferred tax (assets)/liabilities Deferred tax expense/(income) Other temporary differences 7. Deferred tax on capital losses 6. 48.89 (i) Statement of Profit and Loss in Profit or Loss section (ii) Statement of Profit and Loss under OCI section 3 Disclosure pursuant to Indian Accounting Standard (Ind AS) 19 "Employee Benefits" NOTE [45] Notes forming part of the Financial Statements (contd.) Notes forming part of the Financial Statements Integrated Annual Report 2021-22 439 (754.27) (1140.30) 0.36 (0.23) 134.37 (109.88) 771.12 (275.92) (1660.12) (754.27) 2020-21 2021-22 crore Balance as at March 31 (iii) Hedge reserve (other than through OCI) 70.59 Defined contribution plans: [Note [1] (k)(ii)(A)]: Amount of 100.65 crore (previous year: 94.32 crore out of which 5.88 crore pertains to discontinued operations) is recognised as an expense. 7.88 5. 2021-22 As at 31-3-2021 31-3-2022 As at Particulars Sr. No. Statement of Profit and Loss Balance Sheet crore 2020-21 (d) Components of deferred tax (assets) and liabilities recognised in the Balance Sheet and Statement of Profit and Loss [NOTE 44] Notes forming part of the Financial Statements (contd.) LARSEN & TOUBRO Statements Statutory Financial Reports Discussion and Analysis Report Integrated Management Corporate Overview Disclosure pursuant to Ind AS 12 "Income Taxes": (contd.) 1. Disputed statutory liability claimed on payment basis u/s 43B of the Income Tax Act, 1961 194.34 (140.20) (44.76) 327.06 282.30 Difference in book depreciation and income tax depreciation 4. (41.67) (219.67) (1105.37) (1325.05) Provision for doubtful debt and advances 3. 58.82 (50.61) (270.63) (321.23) Items disallowed u/s 43B of Income Tax Act, 1961 2. 41.91 19.15 175.19 Gain/(loss) on derivative transactions 13.54 ii a) The amount recognised in Balance Sheet are as follows: 25.36 25.93 13.30 13.38 84.42 116.13 Net liability/(asset) - current 26.62 28.46 28.46 [1] 377.95 320.34 313.02 84.42 116.13 Net liability/(asset) Assets 26.62 28.46 377.95 371.56 26.62 [1] Net liability/(asset) - Non current 299.64 85.93 Current service cost 1 2021-22 2020-21 2020-21 2021-22 2021-22 2020-21 2020-21 2021-22 Trust-managed provident fund plan Company pension plan Post-retirement medical benefit plan Particulars Gratuity plan crore The amounts recognised in Statement of Profit and Loss are as follows: b) [1] Employer's and employee's contribution due towards Provident Fund 352.59 345.63 307.04 371.56 Defined benefit plans: [Note [1] (k)(ii)(B)]: 320.34 84.42 -Wholly unfunded 3417.58 3618.59 628.00 677.74 -Wholly funded A) Present value of defined benefit obligation As at 31-3-2021 Trust-managed provident fund plan As at As at 31-3-2021 31-3-2022 97.67 As at 31-3-2022 As at 31-3-2022 As at 31-3-2021 31-3-2022 As at Particulars Company pension plan Post-retirement medical benefit plan Gratuity Plan crore As at 31-3-2021 83.08 313.02 320.34 116.13 Liabilities B) Amounts reflected in the Balance Sheet 3887.73 3727.53 377.95 (269.14) (309.95) 371.56 320.34 313.02 84.42 116.13 (0.00) 626.66 659.28 Less: Fair value of plan assets 377.95 3618.59 3417.58 371.56 320.34 313.02 711.08 775.41 377.95 371.56 313.02 (0.00) 186.78 3417.58 Effect of 1% increase 2021-22 (26.45) crore Impact of change in discount rate Particulars (B) A one percentage point change in actuarial assumptions would have the following effects on the defined benefit obligation of Company pension plan: 52.39 53.61 2020-21 (46.18) 2021-22 (47.59) 2020-21 (28.02) 2020-21 52.08 (45.55) Effect of 1% increase 2021-22 53.61 (46.78) crore Impact of change in salary growth rate Impact of change in discount rate Particulars viii) (A) One percentage point change in actuarial assumptions would have the following effects on the defined benefit obligation of gratuity plan: vii) The obligation of the Company under the post-retirement medical benefit plan is limited to the overall ceiling limits. At present, healthcare cost, as indicated in the principal actuarial assumption given supra, has been assumed to increase at 5.00% p.a. vi) The interest payment obligation of trust-managed provident fund is assumed to be adequately covered by the interest income on long-term investments of the fund. Any shortfall in the interest income over the interest obligation is recognised immediately in the Statement of Profit and Loss. The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. For post-retirement medical benefit plan, the attrition rate varies from 1% to 11% (previous year: 1% to 11%) for various age groups. Effect of 1% decrease c) Effect of 1% decrease 2021-22 30.37 (C) A one percentage point change in actuarial assumptions would have the following effects on the defined benefit obligation of post-retirement medical benefit plan: h) Characteristics of defined benefit plans and associated risks: Disclosure pursuant to Indian Accounting Standard (Ind AS) 19 "Employee Benefits" (contd.) NOTE [45] Notes forming part of the Financial Statements (contd.) Notes forming part of the Financial Statements Integrated Annual Report 2021-22 443 (18.39) 52.57 50.83 2020-21 32.31 (18.59) 2020-21 2021-22 2020-21 Effect of 1% decrease Effect of 1% increase 2021-22 22.66 (40.25) crore Impact of change in discount rate Impact of change in healthcare cost Particulars 22.49 (41.29) v) For Company pension plan, the attrition rate varies from 0% to 2% (previous year: 0% to 2%) for various age groups. b) Post-retirement medical benefit plan b) Company pension plan Gratuity plan a) Discount rate: Plans g) Principal actuarial assumptions at the Balance Sheet date (expressed as weighted averages): Disclosure pursuant to Indian Accounting Standard (Ind AS) 19 "Employee Benefits" (contd.) NOTE [45] ii) Notes forming part of the Financial Statements (contd.) Discussion and Analysis Report Integrated Management Corporate Overview 8.01 7.52 7.69 14.53 14.16 7.38 Statutory Financial Reports Statements Annual increase in healthcare costs (refer note vii infra) iii) Salary Growth rate: LARSEN & TOUBRO For gratuity plan the attrition rate varies from 1% to 10% (previous year: 1% to 11%) for various age groups. a) Attrition Rate: iv) 9.00% 9.00% 6.00% 6.00% b) Company pension plan Gratuity plan a) 5.00% 5.00% 6.47% 7.05% 6.47% 7.05% 6.47% 7.05% As at 31-3-2021 As at 31-3-2022 i) 1 2 NOTE [46] Larsen & Toubro Kuwait Construction General Contracting 13 PT Larsen & Toubro Hydrocarbon Engineering Indonesia 12 L&T Modular Fabrication Yard LLC 11 Larsen & Toubro Heavy Engineering LLC 10 L&T Global Holdings Limited Company WLL 9 WOS of L&T Global Holdings Limited Larsen & Toubro International FZE 8 No WOS of L&T Capital Company Limited L&T Infra Contractors Private Limited [2] 7 Yes Yes Yes WOS Subsidiary Subsidiary L&T Valves Limited Subsidiary WOS Subsidiary L&T Geo-L&T JV for Maharatangarh project 19 L&T Geostructure Private Limited 18 L&T Hydrocarbon International FZE (3] 17 Larsen & Toubro Electromech LLC 16 L&T Hydrocarbon Saudi Company 15 Larsen Toubro Arabia LLC 14 Yes No Yes Yes Yes WOS Subsidiary WOS WOS As at 31-3-2021 L&T Capital Company Limited L&T Aviation Services Private Limited Statutory Financial Reports Statements Integrated Discussion and Analysis Report Management Corporate Overview 444 (ii) The Company's defence manufacturing facility is eligible for certain incentives under Gujarat Aerospace and Defence Policy, 2016. Income accounted towards such incentives amounts to 13.05 crore (previous year: Nil). The Company's exports qualify for various export benefits offered in the form of duty credit scrips under foreign trade policy framed by Department General of Foreign Trade India (DGFT). Income accounted towards such export incentives and duty drawback amounts to 93.53 crore (previous year: 242.54 crore). Disclosure pursuant to Ind AS 20 "Accounting for Government Grants and Disclosure of Government Assistance": The Company will assess the impact of Code on Wages, 2019 and the Code on Social Security, 2020 and give effect in the financial statements when the date of implementation of these codes and the Rules/Schemes thereunder are notified. LARSEN & TOUBRO The Company manages provident fund plan through a provident fund trust for its employees which is permitted under the Employees' Provident Fund and Miscellaneous Provisions Act, 1952. The plan mandates contribution by employer at a fixed percentage of employee's salary. Employees also contribute to the plan at a fixed percentage of their salary as a minimum contribution and additional sums at their discretion. The plan guarantees interest at the rate notified by Employees' Provident Fund Organisation. The contribution by employer and employee together with interest are payable at the time of separation from service or retirement whichever is earlier. The benefit under this plan vests immediately on rendering of service. The interest payment obligation of trust-managed provident fund is assumed to be adequately covered by the interest income on long term investments of the fund. Any shortfall in the interest income over the interest obligation is recognized immediately in the Statement of Profit and Loss as actuarial loss. Any loss/gain arising out of the investment risk and actuarial risk associated with the plan is also recognized as expense or income in the period in which such loss/gain occurs. All the above defined benefit plans expose the Company to general actuarial risks such as interest rate risk and market (investment) risk. 4 In addition to contribution to state-managed pension plan (EPS scheme), the Company operates a post retirement pension scheme, which is discretionary in nature for certain cadres of employees. The quantum of pension depends on the cadre of the employee at the time of retirement. The plan is unfunded. Employees do not contribute to the plan. The Post-retirement medical benefit plan provides for reimbursement of health care costs to certain categories of employees post their retirement. The reimbursement is subject to an overall ceiling sanctioned based on cadre of the employee at the time of retirement. The plan is unfunded. Employees do not contribute to the plan. Company's pension plan: Post-retirement medical care plan: Unfunded gratuity represents a small part of gratuity plan which is not material. Further, the unfunded portion includes amounts payable in respect of the Company's foreign operations which result in gratuity payable to employees engaged as per local laws of country of operation. The defined benefit plan for gratuity of the Company is administered by separate gratuity funds that are legally separate from the Company. The trustees nominated by the Company are responsible for the administration of the plan. There are no minimum funding requirements of these plans. The funding of these plans are based on gratuity fund's actuarial measurement framework set out in the funding policies of the plan. These actuarial measurements are similar compared to the assumptions set out in (g) supra. Employees do not contribute to any of these plans. The Company operates gratuity plan through a trust wherein every employee is entitled to the benefit equivalent to fifteen days last salary drawn for each completed year of service. The same is payable on termination of service or retirement whichever is earlier. The benefit vests after five years of continuous service. The Company's scheme is more favorable as compared to the obligation under Payment of Gratuity Act, 1972. Gratuity plan: 3 Trust managed provident fund plan: Notes forming part of the Financial Statements (contd.) NOTE [47] Disclosure of related parties/related party transactions pursuant to Ind AS 24 "Related Party Disclosures" List of related parties over which control exist and status of transactions entered during the year: 5 Yes Subsidiary L&T Power Limited 4 No Subsidiary Kesun Iron and Steel Company Private Limited [1] Yes Subsidiary Bhilai Power Supply Company Limited 23 < Yes Wholly Owned Subsidiary [WOS] Transaction entered during the year (Yes/No) Nature of relationship L&T Construction Equipment Limited 1 No. Name of the Subsidiary Company Sr 6 3618.59 As at 31-3-2022 Post-retirement medical benefit plan 23.53 19.85 19.85 Debt instruments - PSU bonds 106.67 106.67 145.80 145.80 Debt instruments - State government bonds 23.53 186.78 169.90 Debt instruments - Central government bonds 262.10 0.31 261.80 215.05 215.05 Debt instruments - Corporate bonds 19.98 169.90 19.98 Mutual funds Equity 3.44 3.44 3.37 3.37 Fixed deposits Insurer managed funds 2.90 2.90 3.90 - 3.90 3.17 Mutual funds Others Mutual funds Debt 46.63 23.41 23.21 69.93 45.83 24.10 3.17 26.35 26.35 Equity instruments Closing balance of the plan assets Less: Benefits paid 48.16 (66.50) 111.85 111.41 81.52 83.53 (0.82) 84.25 70.59 258.11 259.81 Add: Contribution by plan participants Add/(less): Transfer in/(out) 1.01 Add: Contribution by the employer 30.57 Difference between actual return on plan assets and interest income [1] Basis used to determine interest income on plan assets: Add/(Less): Actuarial gains/(losses) Opening balance of the fair value of the plan assets 35.71 268.79 268.87 626.66 554.11 3727.53 3362.79 39.40 Trust-managed provident fund plan As at As at 31-3-2022 31-3-2021 Gratuity plan As at As at 31-3-2022 31-3-2021 crore Particulars Changes in the fair value of plan assets representing reconciliation of the opening and closing balances thereof are as follows: d) Add: Interest income on plan assets[1] (38.36) (121.91) (465.97) (429.90) 659.28 626.66 3887.73 3727.54 The Trust formed by the Company manages the investments of provident funds and gratuity fund. Interest income on plan assets is determined by multiplying the fair value of the plan assets by the discount rate determined at the start of the annual reporting period. The Company expects to fund 17.71 crore (previous year: 0.92 crore) towards its gratuity plan and 100.49 crore (previous year: 81.06 crore) towards its trust-managed provident fund plan during the year 2021-22. 48.70 48.70 2.90 2.90 Cash and cash equivalents Total As at 31-3-2021 Unquoted Quoted Total As at 31-3-2022 Unquoted Quoted Particulars Gratuity plan crore 442 Disclosure pursuant to Indian Accounting Standard (Ind AS) 19 "Employee Benefits" (contd.) The fair value of major categories of plan assets are as follows: NOTE [45] Notes forming part of the Financial Statements (contd.) Notes forming part of the Financial Statements Integrated Annual Report 2021-22 441 Special deposit schemes 1.48 1.48 1.48 Other (payables)/receivables Special deposit schemes Fixed deposits Mutual funds - Others 17.61 17.61 177.58 99.62 77.96 Closing balance of the plan assets 203.42 52.66 Mutual funds - Debt - Mutual funds Equity 455.15 455.15 395.46 395.46 Debt instruments - PSU bonds 150.76 30.19 30.19 2.78 2) 1) Gratuity plan Plans The average duration of the defined benefit plan obligations at the end of the reporting period is as follows: f) 3727.52 (0.00) (0.01) 379.64 3347.88 3887.73 0.01 0.17 (0.00) 355.03 0.17 3532.70 200.03 200.03 155.49 155.49 1.02 1.02 2.78 833.74 3) Company pension plan 833.74 1,054.53 Unquoted Quoted As at 31-3-2021 As at 31-3-2022 Particulars Trust-managed provident fund plan crore 626.66 4.69 Total 621.97 58.24 601.05 Closing balance of the plan assets (78.72) (78.72) 0.75 0.76 Other (payables)/receivables 1.48 659.28 Quoted Unquoted Cash and cash equivalents Debt instruments - State government bonds 828.84 828.84 696.10 696.10 Debt instruments - Central government bonds 1,105.53 23.77 1,081.76 1,187.32 1,187.32 Debt instruments - Corporate bonds 70.41 70.41 146.46 146.46 Equity instruments 34.82 34.82 18.59 18.59 1,054.53 Total Subsidiary of L&T Realty Developers Limited WOS LARSEN & TOUBRO 81 Esencia Technologies India Private Limited 82 L&T Technology Services LLC 83 Esencia Technologies Inc. [13] WOS of L&T Technology Services Limited WOS of L&T Technology Services Limited WOS of L&T Technology Services LLC LTR SSM Private Limited [8] 36 No Subsidiary of L&T Realty Developers Limited L&T Westend Project LLP 35 Yes Yes Subsidiary of L&T Realty Developers Limited 34 Yes WOS of L&T Realty Developers Limited Chennai Vision Developers Private Limited 33 Yes WOS of L&T Seawoods Limited L&T Parel Project Private Limited [6] 32 Yes WOS of L&T Seawoods Limited L&T Asian Realty Project LLP 31 Yes L&T Vision Ventures Limited [7] WOS Subsidiary of L&T Technology Services Limited 80 73 Ruletronics Systems Private Limited [10] 74 Lymbyc Solutions Inc. 75 Lymbyc Solutions Private Limited WOS of Nielsen+Partner Germany WOS of Larsen & Toubro Infotech GmbH WOS of Larsen & Toubro Infotech GmbH WOS of Larsen & Toubro Infotech Limited WOS of Lymbyc Solutions Private Limited WOS of Larsen & Toubro Infotech Limited No No No No No L&T Thales Technology Services Private Limited No Powerup Cloud Technologies Private Limited WOS of Larsen & Toubro Infotech Limited No 77 Larsen & Toubro Infotech UK Limited [11] WOS of Larsen & Toubro Infotech Limited Yes 78 LTI Middle East FZ-LLC [12] 79 L&T Technology Services Limited WOS of Larsen & Toubro Infotech Limited Subsidiary No Yes 76 L&T Seawoods Limited 30 Yes L&T Geo-L&T UJV CMRL CS 20 No Yes No Yes Yes ZÁÁÁ Yes WOS of L&T Geostructure Private Limited Subsidiary WOS Yes Yes 21 No Graphene Semiconductor Services Private Limited WOS of L&T Technology Services Limited Yes 85 Graphene Solutions PTE Ltd. WOS of L&T Technology Services Limited No 86 Graphene Solutions SDN. BHD. WOS of L&T Technology Services Limited No 87 Graphene Solutions Taiwan Limited WOS of L&T Technology Services Limited 84 L&T Infrastructure Engineering Limited WOS of L&T Geostructure Private Limited WOS No WOS L&T Innovation Campus (Chennai) Limited [5] 29 Yes WOS L&T Realty Developers Limited 28 Yes WOS Hi-Tech Rock Products and Aggregates Limited 27 Yes WOS of Larsen & Toubro International FZE Larsen & Toubro (East Asia) SDN. BHD. 26 No Subsidiary of Larsen & Toubro International FZE Yes 22 Larsen & Toubro (Oman) LLC Subsidiary of Larsen & Toubro International FZE Yes 23 Ruletronics Systems Inc. Larsen & Toubro Qatar LLC [4] Larsen & Toubro Saudi Arabia LLC WOS of Larsen & Toubro International FZE Subsidiary No Yes 25 Larsen & Toubro T&D SA (Proprietary) Limited 24 No 72 71 Yes 46 L&T Infra Investment Partners Trustee Private Limited WOS of L&T Finance Limited Yes 445 Integrated Annual Report 2021-22 Notes forming part of the Financial Statements Sr Name of the Subsidiary Company No. 47 L&T Financial Consultants Limited 48 WOS of L&T Finance Limited Mudit Cement Private Limited L&T Infra Investment Partners 50 Larsen & Toubro Infotech Limited 51 Syncordis Software Services India Private Limited [10] 52 Larsen & Toubro LLC 53 Larsen & Toubro Infotech GmbH 54 Larsen & Toubro Infotech Canada Limited 55 Larsen & Toubro Infotech LLC 56 49 L&T Infotech Financial Services Technologies Inc. L&T Infra Investment Partners Advisory Private Limited Yes 37 Notes forming part of the Financial Statements (contd.) No Yes 38 L&T Valves Arabia Manufacturing LLC WOS of L&T Valves Limited No 39 L&T Valves USA LLC WOS of L&T Valves Limited No 40 L&T Finance Holdings Limited 45 Yes L&T Finance Limited WOS of L&T Finance Holdings Limited Yes 42 L&T Investment Management Limited WOS of L&T Finance Holdings Limited Yes 43 L&T Mutual Fund Trustee Limited WOS of L&T Finance Holdings Limited Yes 44 L&T Infra Credit Limited [9] WOS of L&T Finance Limited 41 57 58 59 No 63 Syncordis France SARL WOS of Syncordis S.A. No 64 Syncordis Limited WOS of Syncordis S.A. No 65 Syncordis PSF S.A. WOS of Syncordis S.A. No 66 No Nielsen+Partners Germany No 67 Nielsen+Partners Switzerland WOS of Nielsen+Partner Germany No 68 Nielsen+Partners Singapore WOS of Nielsen+Partner Germany No 69 Nielsen+Partners Thailand WOS of Nielsen+Partner Germany No 70 Nielsen+Partners Australia WOS of Larsen & Toubro Infotech GmbH No No No L&T Information Technology Spain SL 60 61 Larsen & Toubro Infotech Norge AS 62 Syncordis S.A. Notes forming part of the Financial Statements (contd.) NOTE [47] Disclosure of related parties/related party transactions pursuant to Ind AS 24 "Related Party Disclosures" (contd.) Larsen and Toubro Infotech South Africa (Proprietary) Limited L&T Information Technology Services (Shanghai) Co., Ltd. L&T Infotech S. DE R.L. DE C.V. Nature of relationship WOS of L&T Finance Holdings Limited WOS of L&T Financial Consultants Limited Subsidiary of L&T Finance Limited Subsidiary WOS of Larsen & Toubro Infotech Limited Subsidiary WOS of Larsen & Toubro Infotech Limited WOS of Larsen & Toubro Infotech Limited WOS of Larsen & Toubro Infotech Limited WOS of Larsen & Toubro Infotech Limited Subsidiary of Larsen & Toubro Infotech Limited WOS of Larsen & Toubro Infotech Limited WOS of Larsen & Toubro Infotech Limited WOS of Larsen & Toubro Infotech Limited WOS of Larsen & Toubro Infotech Limited No No No No No No Ruletronics Limited No No Yes Yes (Yes/No) Transaction entered during the year WOS of Larsen & Toubro Infotech GmbH Yes 88 Subsidiary WOS of L&T Technology Services Limited Yes No Yes Yes Yes Yes No No No Yes No No No No Yes No Yes Yes Yes Yes Yes Yes (Yes/No) WOS of Larsen & Toubro International FZE WOS of Larsen & Toubro International FZE WOS of L&T Electrical & Automation FZE WOS of Tamco Switchgear (Malaysia) SDN. BHD WOS of Larsen & Toubro International FZE WOS of Tamco Switchgear (Malaysia) SDN. BHD WOS of Larsen & Toubro International FZE WOS of L&T Capital Company Limited WOS of Thalest Limited WOS of L&T Finance Holdings Limited WOS of L&T Finance Holdings Limited WOS of Nielsen+Partners Germany WOS of Larsen & Toubro International FZE Subsidiary No WOS of Larsen & Toubro International FZE Subsidiary of Larsen & Toubro Infotech Limited Subsidiary of Cuelogic Technologies Private Limited WOS Yes [7] Divested on December 1, 2020 Dissolved w.e.f. March 30, 2021 [27] [26] [25] [24] Merged with Syncordis PSF S.A. w.e.f. December 21, 2020 [23] Liquidated w.e.f. from December 17, 2020 Divested on April 24, 2020 Dissolved w.e.f. January 21, 2021 [22] [21] [20] Liquidated on May 16, 2020 [19] Dissolved w.e.f. January 28, 2021 The company through its subsidiary has acquired stake on July 7, 2021 [6] Formerly known as L&T Parel Project LLP One equity share (the Golden Share) is held by the Government of Telangana in pursuance of the Shareholders' Agreement Dissolved on September 7, 2021 [17] ངཚནEརྫ ་ ཀྱ ་ྕ 2 ཋ ཎྜ ཨྰཿནྡྲ ཊ བ བ བ ཟླ བ ཐ བ [16] The Company through its subsidiary has acquired stake on October 2, 2020 Divested on August 30, 2021 [15] [14] [13] Merged with L&T Technology Services LLC w.e.f. October 1, 2021 [12] Incorporated on November 25, 2020 [11] Incorporated on August 17, 2020 [10] Merged with Larsen & Toubro Infotech Limited w.e.f. April 1, 2021 In process of being struck off from the register of companies. Formerly known as L&T Infra Debt Fund Limited [9] [8] Divested on June 3, 2021 [18] WOS of L&T Power Development Limited Subsidiary WOS of L&T Power Development Limited WOS of L&T Power Development Limited WOS of L&T Power Development Limited 106 105 L&T Cassidian Limited [19] 104 Cuelogic Technologies Inc. [18] 103 Cuelogic Technologies Private Limited [18] 102 Thalest Limited [17] 101 L&T Metro Rail (Hyderabad) Limited [16] 100 Nabha Power Limited 99 L&T Overseas Projects Nigeria Limited [21] L&T Himachal Hydropower Limited L&T Arunachal Hydropower Limited 97 L&T Uttaranchal Hydropower Limited [15] 96 L&T Power Development Limited 95 No. Sr Larsen & Toubro Hydrocarbon International Limited LLC [20] Transaction entered during the year Nature of relationship Seastar Labs Private Limited Disclosure of related parties/related party transactions pursuant to Ind AS 24 "Related Party Disclosures" (contd.) NOTE [47] 98 107 L&T Capital Markets Limited [22] 108 WOS Struck off from the register of companies w.e.f. December 28, 2021 Liquidated on August 17, 2021 In process of being struck off from the register of companies Kana Controls General Trading & Contracting Company W.L.L. [27] PT. Tamco Indonesia [27] Henikwon Corporation SDN. BHD. [27] Tamco Switchgear (Malaysia) SDN. BHD. (2 L&T Electricals & Automation Saudi Arabia Company LLC [27] Sahibganj Ganges Bridge-Company Private Limited [25] Servowatch Systems Limited [26] Nielsen+Partners Luxembourg [24] Formerly know as L&T Electricals and Automation Limited [5] In process of liquidation [4] [3] [2] [1] L&T Capital Market (Middle East) Ltd [23] 109 110 111 112 113 Divested on August 31, 2020 [27] 115 Tamco Electrical Industries Australia Pty Limited [27] 116 117 L&T Electrical & Automation FZE [27] 118 114 447 Name of the Subsidiary Company Notes forming part of the Financial Statements 8 Mr. J. D. Patil (Whole-time Director) 7 Mr. M. V. Satish (Whole-time Director) 6 Mr. D. K. Sen (Whole-time Director) 5 Mr. Subramanian Sarma (Whole-time Director) [2] 4 Mr. Shailendra Roy (Whole-time Director) [1] 3 Mr. R. Shankar Raman (Whole-time Director & Chief Financial Officer) 2 Mr. S. N. Subrahmanyan (Chief Executive Officer & Managing Director) Mr. S.V. Desai (Whole-time Director) [3] 1 Sr. No (i) (iv) Name of key management Personnel and their relatives with whom transactions were carried out during the year: Executive Director Larsen & Toubro Limited Senior Officers' Superannuation Scheme 1 Sr. No Superannuation Trust L&T Hydrocarbon Engineering Limited Group Gratuity Scheme 4 L&T Shipbuilding Limited Employees Group Gratuity Assurance Scheme 3 Larsen & Toubro Gratuity Fund 2 Larsen & Toubro Officers & Supervisors Gratuity Fund 1 Sr. No Sr. No Gratuity Trust 9 Statements L&T Technology Services (Shanghai) Co. Ltd 89 Yes Integrated Annual Report 2021-22 WOS of L&T Technology Services Limited No L&T Technology Services (Canada) Ltd WOS of L&T Technology Services LLC No 91 Orchestra Technology, Inc. [14] 92 Mindtree Limited WOS of L&T Technology Services LLC Subsidiary Mr. T. Madhava Das (Whole-time Director) [3] No 93 Mindtree Software (Shanghai) Co. Limited WOS of Mindtree Limited No 94 Bluefin Solutions SDN. BHD. WOS of Mindtree Limited No 446 Corporate Overview Management Integrated Discussion and Analysis Report Statutory Financial Reports Yes L&T Kansbahal Staff & Workmen Provident Fund 90 L&T Kansbahal Officers & Supervisory Provident Fund 11 L&T Infrastructure Development Projects Limited 10 L&T Sapura Offshore Private Limited 9 L&T Sapura Shipping Private Limited 8 L&T Howden Private Limited 7 L&T - MHI Power Turbine Generators Private Limited [1] L&T Special Steels and Heavy Forgings Private Limited 6 Raykal Aluminium Company Private Limited 5 4 Panipat Elevated Corridor Limited L&T - MHI Power Boilers Private Limited [1] Sr. No Joint Venture Companies L&T-Chiyoda Limited 2 L&T-Sargent & Lundy Limited 1 Sr. No Joint Venture Companies Names of joint ventures with whom transactions were carried out during the year: Magtorq Engineering Solutions Private Limited Notes forming part of the Financial Statements (contd.) 2 Magtorq Private Limited 448 NOTE [47] 5 Disclosure of related parties/related party transactions pursuant to Ind AS 24 "Related Party Disclosures" (contd.) (b) (i) Name of associates and joint ventures with whom transactions were carried out during the year: 3 12 1 13 4 Larsen & Toubro Limited Provident Fund Vadodara Bharuch Tollway Limited 3 Larsen & Toubro Limited Provident Fund of 1952 2 Larsen & Toubro Officers & Supervisory Staff Provident Fund 1 Sr. No Provident Fund Trust (iii) Name of post-employment benefit plans with whom transactions were carried out during the year [2] The company ceased to be a joint venture w.e.f. October 21, 2021 [1] Renamed L&T MBDA Missile Systems Limited 22 L&T Rajkot-Vadinar Tollway Limited Sr. No Associate Companies L&T Sambalpur-Rourkela Tollway Limited 14 21 L&T Transportation Infrastructure Limited 16 Ahmedabad-Maliya Tollway Limited 17 L&T Halol-Shamlaji Tollway Limited [2] 18 L&T Interstate Road Corridor Limited L&T Samakhiali Gandhidham Tollway Limited 20 Kudgi Transmission Limited 15 19 L&T Deccan Tollways Limited Amounts for major parties 1323.21 Amounts for major parties 736.30 610.48 220.33 91.83 133.80 57.43 13.36 Amount 800.87 Total L&T - MHI Power Boilers Private Limited L&T Infrastructure Development Projects Limited Associates, including: Magtorq Private Limited L&T Camp Facilities LLC Joint ventures, including: L&T - MHI Power Boilers Private Limited L&T - MHI Power Turbine Generators Private Limited L&T Deccan Tollways Limited Total 1415.04 50.00 934.67 ii. 75.49 Amount Accounts receivable As at 31-3-2022 Total 108.71 Accounts payables, including other payables 29.68 138.39 57.80 22.41 10.20 8.39 98.80 [1] Post retirement benefits include gratuity * 6.60 crore [2] Represents encashment of past service accumulated leave [3] As at 31-3-2021 Represents pension Integrated Annual Report 2021-22 Notes forming part of the Financial Statements NOTE [47] Disclosure of related parties/related party transactions pursuant to Ind AS 24 "Related Party Disclosures" (contd.) (d) Amount due to/from related parties: 456 Sr. Category of balance/relationship/parties No. i. Subsidiaries, including: L&T Metro Rail (Hyderabad) Limited L&T Geostructure LLP crore 455 Notes forming part of the Financial Statements (contd.) Investment in debt securities [including preference shares (debt Larsen Toubro Arabia LLC L&T Finance Limited 1145.67 1083.05 491.14 2168.58 Joint ventures: 911.98 1097.54 L&T Special Steels and Heavy Forgings Private Limited Kudgi Transmission Limited (Secured) 213.17 698.81 213.17 611.72 L&T Infrastructure Development Private Limited 272.65 Total 3140.70 3757.26 iv Impairment loss on investment in debt securities Joint venture: 213.17 213.17 L&T Special Steels and Heavy Forgings Private Limited 213.17 213.17 Total 213.17 213.17 5.25 Corporate Overview Management L&T Metro Rail (Hyderabad) Limited Subsidiaries, including: 2659.72 Subsidiaries: L&T Geostructure Private Limited Larsen & Toubro Saudi Arabia LLC Larsen and Toubro (Oman) LLC Joint ventures, including: 751.20 1004.71 L&T Modular Fabrication Yard LLC 117.90 306.04 84.76 150.22 222.17 86.06 1775.55 1772.77 L&T - MHI Power Turbine Generators Private Limited 756.64 796.53 863.49 576.54 177.35 7.67 13.97 6.82 5.18 8.79 2791.45 2534.42 iii. portion)] 2228.72 5.25 (c) Mr. Shailendra Roy 4.81 2020-21 Key Management Personnel Short-term employee Post- Short-term Post- employment Total benefits benefits employee benefits employment Other Long term benefit 2021-22 Share based payment benefits Executive Directors: (a) Mr. S.N.Subrahmanyan 24.46 6.53 30.99 11.26 2.97 14.23 (b) Mr. R. Shankar Raman 16.12 4.30 20.42 Total crore "Major parties" denote entities accounting for 10% or more of the aggregate for that category of transaction during respective year. xxiv. Compensation paid to key management personnel: 6.81 LARSEN & TOUBRO Integrated crore 2021-22 2020-21 Sr. Nature of transaction/relationship/major parties No. Amount Amounts for major Amount parties Amounts for major parties (b) Towards employer's contribution to gratuity fund trusts, including: L&T Hydrocarbon Engineering Limited Group Gratuity Scheme Larsen & Toubro Gratuity Fund 0.92 114.32 0.92 86.47 16.54 Total (c) Towards employer's contribution to superannuation trust: 0.92 7.51 114.32 6.81 Larsen & Toubro Limited Senior Officers' Superannuation Scheme 7.51 6.81 Total 7.51 7.50 1.98 9.48 4.83 10.93 4.23 1.09 9.91 2.60 12.51 2.83 0.64 9.72 2.55 12.27 2.94 0.72 | | | |│ 5.32 5.32 3.47 3.66 3.32 3.00 [3] 6.32 3.21 3.00 [3] 6.21 3.10 1.26 4.36 Director till August 18, 2020) (c) Other Non-executive/Independent Directors 2.29 4.81 8.64 (a) Mr. A.M. Naik 7.64[1] 10.2012] 22.67 (d) Mr. Subramanian Sarma (Executive Director 13.71 3.65 17.36 4.48 1.02 8.39 13.89 w.e.f. August 19, 2020) (e) Mr. D. K. Sen 9.27 2.46 11.73 3.93 1.01 4.94 (f) Mr. M. V. Satish 8.75 2.30 11.05 4.24 1.08 (g) Mr. J.D. Patil (h) Mr. S.V. Desai (i) Mr. T. Madhava Das Non-executive/Independent Directors: (b) Mr. Subramanian Sarma (Non-executive Discussion and Analysis Report Mr. Subramanian Sarma Statements Post employment benefit plan (a) Due to provident fund trusts, including: 40.70 31.47 Larsen & Toubro Officers & Supervisory Staff Provident Fund 37.71 28.65 Total 40.70 31.47 (b) Due to gratuity trusts: xi. 17.71 Larsen & Toubro Officers & Supervisors Gratuity Fund 15.47 Larsen & Toubro Gratuity Fund 2.24 L&T Hydrocarbon Engineering Limited Group Gratuity Scheme 0.94 Total 17.71 0.94 (c) Due to superannuation trust: 12.89 4.48 0.94 Total 36.96 89.75 Mr. J.D. Patil Mr. S.V.Desai Mr. T. Madhava Das As at 31-3-2022 Amount Amounts for major parties Amount As at 31-3-2021 crore Amounts for major parties 89.75 36.96 21.40 8.40 13.98 5.49 0.92 7.62 2.40 7.05 2.66 7.23 2.91 11.70 5.31 8.56 2.29 8.40 2.43 Larsen & Toubro Limited Senior Officers' Superannuation Scheme Total Mr. M. V. Satish 12.89 12.89 - L&T Chiyoda Limited Associates, including: Magtorq Private Limited Total 2127.79 1815.42 1192.92 121.19 359.19 149.53 187.64 25.46 L&T - MHI Power Turbine Generators Private Limited 742.44 2551.02 820.89 305.67 1643.73 387.72 327.86 52.26 35.45 51.54 35.08 3601.57 4401.89 [1] Includes commission due to non-executive directors 3.81 cr crore (previous year: 4.15 crore). Disclosure of related parties/related party transactions pursuant to Ind AS 24 "Related Party Disclosures" (contd.) 1421.52 L&T - MHI Power Boilers Private Limited Joint ventures, including: Larsen & Toubro Electromech LLC 4.48 xii. (a) Capital commitment given Subsidiaries, including: L&T Construction Equipment Limited Larsen & Toubro Infotech Limited 5.45 140.36 0.88 136.98 0.83 Mindtree Limited Joint ventures: 3.51 0.11 - L&T Sargent & Lundy Limited 0.08 L&T - MHI Power Turbine Generators Private Limited 0.01 L&T Special Steels and Heavy Forgings Private Limited 0.02 Total 5.56 140.36 xii.(b) Revenue commitment given Subsidiaries, including: L&T Geostructure LLP L&T Modular Fabrication Yard LLC Larsen & Toubro (Oman) LLC 4.48 Mr. D. K. Sen Mr. Shailendra N Roy Mr. R. Shankar Raman 4.23 5.00 Total 7297.18 6096.79 vi. Impairment loss on loans & advances recoverable Subsidiaries, including: 294.96 277.70 L&T Hydrocarbon Saudi Company 173.93 167.70 Magtorq Private Limited Larsen & Toubro Heavy Engineering LLC 71.62 Larsen Toubro Arabia LLC 39.81 38.38 Joint ventures, including: 1736.43 1735.46 L&T Special Steels and Heavy Forgings Private Limited 1730.38 1730.38 Total 2031.39 1735.46 75.20 5.00 4.23 Associates: Notes forming part of the Financial Statements (contd.) NOTE [47] Disclosure of related parties/related party transactions pursuant to Ind AS 24 "Related Party Disclosures" (contd.) Sr. Category of balance/relationship/parties No. LARSEN & TOUBRO crore As at 31-3-2022 As at 31-3-2021 Amount Amounts for major parties Amount Amounts for major parties V. Loans & advances recoverable Subsidiaries, including: 4980.20 3928.87 L&T Metro Rail (Hyderabad) Limited 3735.72 2481.56 Joint ventures, including: 2312.75 2162.92 L&T Special Steels and Heavy Forgings Private Limited L&T Sapura Shipping Private Limited 1781.18 1746.17 328.43 vii. Provision towards constructive obligation Joint venture: 14.84 L&T Realty Developers Limited 24.84 56.64 Larsen & Toubro Infotech Limited 33.88 L&T Technology Services Limited 32.15 Joint venture: 17.34 20.46 L&T - MHI Power Boilers Private Limited 17.34 Total 139.39 134.02 457 Integrated Annual Report 2021-22 Notes forming part of the Financial Statements Notes forming part of the Financial Statements (contd.) NOTE [47] Disclosure of related parties/related party transactions pursuant to Ind AS 24 "Related Party Disclosures" (contd.) 458 Sr. Category of balance/relationship/parties No. X. Due to directors [1]. Key management personnel, including: Mr. S. N. Subrahmanyan 47.51 Statutory Financial Reports 29.84 113.56 14.84 L&T Special Steels and Heavy Forgings Private Limited 14.84 14.84 Total 14.84 14.84 viii. Unsecured loans (including lease finance) Subsidiaries: 83.98 L&T Capital Company Limited 4.40 4.40 Nabha Power Limited 83.98 Joint venture: 193.74 90.91 L&T MBDA Missile Systems Limited 193.74 90.91 Total 277.72 95.31 ix. Advances received in the capacity of supplier of goods/services classified as "Advances from customers" in the Balance Sheet Subsidiaries, including: 122.05 Nabha Power Limited NOTE [47] 20.46 Statements parties Amount Amounts for major Amount 2020-21 2021-22 crore LARSEN & TOUBRO vii. Sale/redemption of stake in business undertaking L&T Finance Limited Total Subsidiary: vi. Subscription debentures/bonds net of redemption No. Nature of transaction/relationship/major parties Sr. Disclosure of related parties/related party transactions pursuant to Ind AS 24 "Related Party Disclosures" (contd.) Amounts for major parties 2338.47 2338.47 2338.47 L&T Modular Fabrication Yard LLC L&T Hydrocarbon Saudi Company (350.96) Larsen Toubro Arabia LLC 1019.20 1057.00 L&T Metro Rail (Hyderabad) Limited (266.10) NOTE [47] 819.70 Net inter corporate deposits and loans given/(repaid by) viii. 198.00 Total 198.00 Mindtree Limited 198.00 Subsidiary: Subsidiaries, including: Notes forming part of the Financial Statements (contd.) Statements Statutory Financial Reports 0.61 0.03 0.05 Total Mr. Shailendra Roy Key management personnel: L&T Valves Limited 2.81 0.61 3.74 6.55 0.05 L&T Hydrocarbon Saudi Company L&T Geostructure Private Limited Subsidiaries: Sale of property, plant and equipment iv. 2.73 0.02 (209.75) 7.16 Investments including subscription to equity and preference shares Discussion and Analysis Report Integrated Management Corporate Overview 2272.05 2.02 Total 2.02 V. L&T - MHI Power Turbine Generators Private Limited Joint venture: 300.00 1907.65 2272.05 Hi-Tech Rock Products and Aggregates Limited L&T Finance Holdings Limited Subsidiaries, including: (equity portion) 2.02 134.18 (85.39) L&T Geostructure Private Limited 451 182.05 182.27 3.61 25.17 12.06 4.45 29.90 17.74 21.38 111.58 17.95 21.09 112.19 152.15 164.53 L&T Sargent & Lundy Limited L&T- Chiyoda Limited Total Integrated Annual Report 2021-22 Notes forming part of the Financial Statements Notes forming part of the Financial Statements (contd.) NOTE [47] 2.91 5.96 Subsidiaries, including: Rent paid, including lease rentals under leasing/hire purchase arrangements xi. Amounts for major parties parties Amount Joint ventures, including: Amounts for major No. Nature of transaction/relationship/major parties Sr. 2020-21 2021-22 crore 452 Disclosure of related parties/related party transactions pursuant to Ind AS 24 "Related Party Disclosures" (contd.) Amount L&T Technology Services Limited Mindtree Limited L&T Aviation Services Private Limited 27.31 ix. 967.73 Total L&T Special Steels and Heavy Forgings Private Limited 148.03 151.59 148.03 Subsidiaries, including: (158.75) L&T Sapura Shipping Private Limited Joint ventures: L&T Realty Developers Limited 122.95 Nabha Power Limited (267.59) Hi-Tech Rock Products and Aggregates Limited 29.50 (353.18) (184.32) Nabha Power Limited Joint venture: Larsen & Toubro Infotech Limited Subsidiaries, including: Charges paid for miscellaneous services X. (503.21) 180.32 32.00 100.75 L&T Seawoods Limited 32.00 (517.33) 83.97 (535.21) 79.57 (114.51) 151.59 L&T MBDA Missile Systems Limited Total 100.75 Total 0.05 L&T-Sargent & Lundy Limited Mr. Adil Zainulbhai 8 Mr. Thomas Mathew T [6] 10 Ms. Naina Lal Kidwai [8] 12 Mr. Narayanan Kumar 14 Ms. Preeta Reddy [9] LARSEN & TOUBRO [3] Appointed w.e.f. July 11, 2020 [5] Ceased w.e.f. May 3, 2021 on account of withdrawal of nomination by Life Insurance Corporation of India [2] Appointed as Whole-time Director w.e.f. August 19, 2020 (Non-executive Director till August 18, 2020) [4] Ceased w.e.f. March 29, 2022 on account of completion of term [6] Ceased w.e.f. April 2, 2020 on account of completion of term [7] Ceased w.e.f. May 29, 2020 on account of completion of term [8] Ceased w.e.f. February 28, 2021 on account of completion of [9] Appointed w.e.f. March 1, 2021 6 Mr. M. Damodaran 4 Mr. M. M. Chitale Mr. A.M. Naik (Group Chairman) 3 Mr. Subodh Bhargava [4] 5 Mr. Vikram Singh Mehta 7 Ms. Sunita Sharma [5] 9 (c) Mr. Ajay Shankar [7] Mr. Sanjeev Aga 13 Mr. Hemant Bhargava 15 Mr. Pramit Jhaveri [10] [1] Ceased w.e.f. July 7, 2020 on account of superannuation Sr. No 2 11 Disclosure of related party transactions: term [10] Appointed w.e.f. April 1, 2022 294.30 680.46 Joint ventures, including: 1531.41 1303.43 L&T - MHI Power Boilers Private Limited 697.31 694.76 L&T Modular Fabrication Yard LLC L&T- Chiyoda Limited 147.76 L&T - MHI Power Turbine Generators Private Limited 341.21 248.52 Associates, including: 28.34 17.44 Magtorq Private Limited 227.63 1 246.17 L&T Geostructure Private Limited crore 2021-22 2020-21 Sr. Nature of transaction/relationship/major parties No. Amount Amounts for major parties 436.27 Amounts for major parties i. Purchase of goods & services (including commission paid) Subsidiaries, including: 1796.68 1690.05 Larsen & Toubro Electromech LLC 603.71 211.42 Amount Sr. No (i) Disclosure of related parties/related party transactions pursuant to Ind AS 24 "Related Party Disclosures" (contd.) Non-executive/Independent Directors 47.48 52.62 69.01 96.27 82.46 208.61 128.55 171.07 40.53 202.45 780.69 1134.35 parties parties Amounts for major Amount Amounts for major Amount 484.76 2020-21 6.17 5.49 0.05 Joint venture: 2.06 0.38 L&T Technology Services Limited Larsen & Toubro (Oman) LLC Notes forming part of the Financial Statements (contd.) 104.84 15.99 12.73 12.29 134.13 L&T Construction Equipment Limited Mindtree Limited 15.73 14.54 15.73 833.31 1203.36 2.73 L&T Hydrocarbon Saudi Company 2021-22 Larsen & Toubro Infotech Limited Sr. 450 Disclosure of related parties/related party transactions pursuant to Ind AS 24 "Related Party Disclosures" (contd.) NOTE [47] Notes forming part of the Financial Statements (contd.) Notes forming part of the Financial Statements Integrated Annual Report 2021-22 449 Nature of transaction/relationship/major parties 3010.92 Total Corporate Overview Management Integrated Discussion and Analysis Report Statutory Financial Reports Statements Notes forming part of the Financial Statements (contd.) NOTE [47] 3356.43 crore No. Larsen & Toubro Infotech Limited Subsidiaries, including: Purchase/lease of property, plant and equipment L&T Parel Project Private Limited iii. Total Subsidiaries, including: ii. (b) Reversal of sale of goods/contract revenue & services L&T Special Steels and Heavy Forgings Private Limited ii. (a) Sale of goods/contract revenue & services Subsidiaries, including: Total L&T - MHI Power Boilers Private Limited Joint ventures, including: L&T Metro Rail (Hyderabad) Limited Nabha Power Limited Larsen & Toubro Saudi Arabia LLC Larsen & Toubro (East Asia) SDN. BHD. Nabha Power Limited L&T Realty Developers Limited L&T- Chiyoda Limited 5.80 Net inter corporate borrowing taken from/(repaid to) L&T Electrical & Automation FZE 11.78 8.68 Nabha Power Limited 13.47 11.50 L&T Seawoods Limited 31.41 43.36 Subsidiaries, including: xvii. Interest paid to 21.87 50.23 L&T Power Development Limited Total 0.64 L&T - MHI Power Turbine Generators Private Limited 0.47 0.64 Joint venture: 2.87 6.77 Larsen Toubro Arabia LLC 2.48 Larsen & Toubro Saudi Arabia LLC 7.91 17.84 0.47 12.86 5.58 15.57 65.12 113.69 128.45 132.95 317.56 294.35 468.10 L&T Sapura Shipping Private Limited Joint ventures, including: L&T Finance Limited L&T Metro Rail (Hyderabad) Limited Subsidiaries, including: L&T Realty Developers Limited xviii. Interest received from 52.46 Total 10.83 2.29 L&T - MHI Power Turbine Generators Private Limited 2.81 6.81 L&T MBDA Missile Systems Limited 13.64 9.10 Joint ventures: 4.79 45.05 13.40 21.40 49.59 164.01 269.11 396.34 649.00 844.68 1458.49 parties parties Amounts for major Amount Amounts for major Amount 95.60 2020-21 crore LARSEN & TOUBRO Joint ventures, including: Mindtree Limited L&T Realty Developers Limited Larsen & Toubro Electromech LLC L&T Technology Services Limited Larsen & Toubro Infotech Limited Subsidiaries, including: Dividend received χίν. No. 2021-22 199.87 276.45 175.92 7.77 8.17 7.77 8.17 7.77 8.17 L&T Metro Rail (Hyderabad) Limited L&T Hydrocarbon Saudi Company Nabha Power Limited Subsidiaries, including: Guarantee charges recovered from xvi. Total L&T Construction Equipment Limited Subsidiary: Commission received, including those under agency arrangements XV. 1615.32 Total L&T- Chiyoda Limited L&T - MHI Power Boilers Private Limited 1019.06 40.50 119.39 119.39 174.38 156.83 206.60 Nature of transaction/relationship/major parties 9.76 Kudgi Transmission Limited Larsen Toubro Arabia LLC Total Subsidiaries, including: Guarantee given on behalf of Xxii. Total Joint venture: L&T Special Steels and Heavy Forgings Private Limited Amount recognised in Profit and Loss on account of provision towards constructive obligation xxi. 3160.09 0.90 L&T Hydrocarbon Saudi Company 1467.38 586.00 829.00 Total L&T Special Steels and Heavy Forgings Private Limited Joint venture: L&T Uttaranchal Hydropower Limited L&T Power Development Limited 0.90 Larsen & Toubro Heavy Engineering LLC 1692.71 0.90 Subsidiaries: 1467.38 Amount recognised in Profit or Loss on account of impairment loss on investment and inter corporate deposit L&T Metro Rail (Hyderabad) Limited L&T Hydrocarbon Saudi Company Statutory Financial Reports Discussion and Analysis Report Integrated Management Corporate Overview 110.85 71.88 Total 100.44 62.47 Larsen & Toubro Officers & Supervisory Staff Provident Fund 110.85 Mindtree Limited 71.88 2192.99 1400.00 518.44 274.55 30778.64 8486.70 12227.39 8616.00 2192.99 30778.64 14.84 14.84 14.84 xxiii. Contribution to post-employment benefit plans Nabha Power Limited (a) Towards employer's contribution to provident fund trusts, including: XX. 5.36 57.15 Amounts for major parties Amount Amounts for major parties Amount 2020-21 2021-22 No. Nature of transaction/relationship/major parties Sr. crore 454 Disclosure of related parties/related party transactions pursuant to Ind AS 24 "Related Party Disclosures" (contd.) xix. NOTE [47] Notes forming part of the Financial Statements Integrated Annual Report 2021-22 453 500.95 533.22 21.44 9.84 45.93 45.52 134.52 Total L&T Infrastructure Development Projects Limited Notes forming part of the Financial Statements (contd.) Amount recognised/(reversed) in Profit or Loss as provision towards bad and doubtful debts (including expected credit loss on account of delay) Subsidiaries, including: 57.46 Total 0.39 (1.46) L&T - MHI Power Boilers Private Limited 0.18 L&T Sapura Offshore Private Limited 0.85 Raykal Aluminium Company Private Limited 0.11 L&T - MHI Power Turbine Generators Private Limited (0.09) 0.31 (0.80) 0.67 6.12 (0.31) L&T Special Steels and Heavy Forgings Private Limited Joint ventures, including: Larsen & Toubro Heavy Engineering LLC L&T Seawoods Limited 11.24 11.03 27.95 L&T Metro Rail (Hyderabad) Limited L&T Hydrocarbon Saudi Company Larsen Toubro Arabia LLC 5.05 L&T Special Steels and Heavy Forgings Private Limited 1.84 Sr. NOTE [47] L&T- Chiyoda Limited L&T Special Steels and Heavy Forgings Private Limited L&T Infrastructure Development Projects Limited L&T Sapura Shipping Private Limited Joint ventures, including: L&T Seawoods Limited L&T Geostructure Private Limited L&T Realty Developers Limited L&T Asian Realty Project LLP Total L&T Parel Project Private Limited xiii. (b) Charges recovered for deputation of employees to related parties 18.66 Total Kana Controls General Trading and Contracting Company WLL L&T Modular Fabrication Yard LLC 18.65 L&T Electrical and Automation FZE L&T Technology Services Limited 8.27 Subsidiaries, including: 3.58 0.89 1.57 75.49 0.76 1.14 0.73 2.94 3.85 7.64 5.34 7.32 11.05 13.16 17.34 11.47 10.69 6.79 11.50 7.12 7.77 64.70 70.15 8.27 18.66 xiii. (a) Charges incurred for deputation of employees from related parties Subsidiaries, including: 429.67 463.07 355.42 xii. Rent received, overheads recovered and miscellaneous income Subsidiaries, including: 2.92 6.27 Total 0.08 Magtorq Private Limited 0.08 0.06 L&T Special Steels and Heavy Forgings Private Limited Associate: 0.11 L&T - MHI Power Boilers Private Limited 0.01 0.06 L&T - MHI Power Turbine Generators Private Limited 0.01 0.23 Joint ventures: 0.38 Larsen Toubro Arabia LLC 0.36 328.33 2.83 Larsen & Toubro Infotech Limited 92.08 Total 25.39 23.97 L&T Chiyoda Limited 11.57 10.87 L&T - Sargent & Lundy Limited 31.86 41.32 L&T - MHI Power Boilers Private Limited 101.34 107.65 Joint ventures, including: 46.77 L&T Finance Limited 68.01 67.85 L&T Geostructure Private Limited 53.69 52.15 L&T Technology Services Limited 105.81 Disclosure of related parties/related party transactions pursuant to Ind AS 24 "Related Party Disclosures" (contd.) 17.44 Notes forming part of the Financial Statements (contd.) Statements Statutory Financial Reports Discussion and Analysis Report Integrated Management Corporate Overview 72.34 crore As at Nabha Power Limited 677.92 213.60 Larsen & Toubro Infotech Limited 457.82 398.04 Subsidiaries, including: 2143.92 1486.57 317.52 Revenue commitment received xiv. L&T Metro Rail (Hyderabad) Limited 15.97 67980.02 336.54 20,26 57.49 394.04 14.00 100.00 326.24 70.60 396.84 20,26 20,26 2298.50 67542.47 448.30 40321.48 473.67 44911.67 3065.36 68748.99 25 Total (I+II+II+IV) Financial guarantee contracts (ii) Embedded derivatives designated as cash flow hedges Sub-total (III) 116.20 69324.93 477.57 477.57 14.00 Corporate Overview Management Integrated Discussion and Analysis Report Statutory Financial Reports Statements Notes forming part of the Financial Statements (contd.) NOTE [47] Disclosure of related parties/related party transactions pursuant to Ind AS 24 "Related Party Disclosures" (contd.) LARSEN & TOUBRO Sr. Category of balance/relationship/parties No. Total crore As at 31-3-2021 Amount Amounts for major parties Amount Amounts for major parties xiii. Commitment to Fund [2] Subsidiary: 477.57 14.00 Nabha Power Limited IV. L&T Uttaranchal Hydropower Limited As at 31-3-2022 Derivative instruments designated as cash flow hedges (i) III. Derivative instruments (including embedded derivatives) through other comprehensive income: 43206.67 1256.55 1416.57 51721.54 Measured at fair value through Profit or Loss (FVTPL): 6593.16 7,12,13 III. Measured at fair value through Other Comprehensive Income (FVTOCI): (i) Investment in government securities, bonds and debentures 744.87 15 33331.60 36347.35 11 299.98 2418.70 611.58 10 10 7,15 7,15 31-3-2021 As at 31-3-2022 Note No. Particulars Sr. (ii) Derivative financial instruments designated as cash flow hedges (iii) Embedded Derivatives designated as cash flow hedges Sub-total (III) 468 Total (1+11+111) 19.13 9786.90 65967.47 26.40 9311.76 68438.90 605.33 9162.44 8820.71 464.65 (b) Category-wise classification for applicable financial liabilities: 3111.39 4334.18 6,14 Sub-total (I) 62.90 27.54 II. Measured at amortised cost: Borrowings 11.73 19,23,24 24474.19 (ii) Trade payables Due to micro enterprises and small enterprises Due to others (iii) Others Sub-total (II) 20298.29 26.86 20,26 Embedded derivatives not designated as cash flow hedges Sub-total (II) (vi) Other receivables (v) Cash and cash equivalents and bank balances (iv) Advances recoverable in cash (iii) Trade receivables Investment in CBLO and Commercial Paper (ii) Loans Measured at amortised cost: (i) Derivative instruments not designated as cash flow hedges 20,26 36.03 15.81 (ii) I. 4462.28 Nabha Power Limited 14 All the related party contracts / arrangements have been entered on arms' length basis. 1. Note: [2] The Company has provided a revolving line of credit facility of 1800 crore to L&T Finance Limited as a stand-by liquidity support arrangement (the "Facility"), renewable on a yearly basis. This Facility is in addition to the working capital lines that L&T Finance Limited has with its consortium of lending banks. The Facility shall be exercised by L&T Finance Limited only after exhausting all external bank funding lines. The utilisation against the Facility is NIL as at 31st March 2022. "Major parties" denote entities account for 10% or more of the aggregate for that category of transaction during respective year. 42.59 2. 92.73 2.04 19.29 23.28 21.82 23.30 22.02 14.51 2.00 11.03 The amount of outstanding balances as shown above are unsecured and will be settled/recovered in cash. The interest rate charged on loans given to related parties are as per market rates. Interest (%) Proportion of direct ownership (%) No. Principal place of business Name of the subsidiary Sr. 3. Subsidiaries: Disclosure pursuant to Ind AS 27 "Separate Financial Statements" NOTE [48] Notes forming part of the Financial Statements (contd.) Notes forming part of the Financial Statements Integrated Annual Report 2021-22 459 Investment in following subsidiaries, associates and joint ventures is accounted at cost. 27.95 25.75 70.71 8616.00 4716.00 4216.00 4115.57 8652.89 7128.36 300.23 19573.00 42427.70 Joint ventures, including: L&T Metro Rail (Hyderabad) Limited Nabha Power Limited Larsen Toubro Arabia LLC L&T Hydrocarbon Saudi Company 19070.57 363.85 L&T - MHI Power Turbine Generators Private Limited 255.12 Total L&T - MHI Power Boilers Private Limited L&T Hydrocarbon Saudi Company Joint ventures, including: Larsen Toubro Arabia LLC L&T Seawoods Limited L&T Metro Rail (Hyderabad) Limited II. Subsidiaries, including: Provision for doubtful debts related to the amount of outstanding balances xvi. 19434.42 42727.93 Total 312.67 As at 31-3-2022 Proportion of effective ownership Proportion of effective 95.00 95.00 95.00 Kesun Iron & Steel Company Private Limited [2] India 5 100.00 95.00 100.00 100.00 100.00 100.00 India L&T Seawoods Limited 4 100.00 95.00 95.00 6 100.00 100.00 100.00 100.00 India L&T Valves Limited 7 100.00 100.00 99.00 100.00 100.00 99.00 India L&T Geostructure Private Limited [3] 100.00 Subsidiaries, including: 100.00 100.00 99.90 India Bhilai Power Supply Company Limited 1 Indian subsidiaries of effective voting power held (%) 99.90 Proportion (%) of direct ownership ownership As at 31-3-2021 Proportion of effective Proportion voting power held (%) Interest (%) 99.90 99.90 99.90 100.00 100.00 India Hi-Tech Rock Products & Aggregates Limited 3 100.00 100.00 100.00 100.00 100.00 100.00 India L&T Innovation Campus Limited [1] 2 99.90 100.00 L&T Metro Rail (Hyderabad) Limited [4] Guarantee given on behalf of XV. 99.99 99.99 99.99 99.99 99.99 99.99 India 9 India 100.00 100.00 100.00 100.00 100.00 L&T Aviation Services Private Limited 100.00 L&T Power Limited Principal place of 460 Corporate Overview Management Integrated Discussion and Analysis Report Statutory Financial Reports 8 Statements NOTE [48] Disclosure pursuant to Ind AS 27 "Separate Financial Statements" (contd.) Foreign Subsidiaries: LARSEN & TOUBRO Sr. Name of the subsidiary Notes forming part of the Financial Statements (contd.) 10 Larsen & Toubro Infotech Limited India 100.00 100.00 100.00 100.00 100.00 13 100.00 L&T Power Development Limited 100.00 100.00 100.00 100.00 100.00 100.00 India India L&T Capital Company Limited 12 74.05 74.05 74.05 74.27 74.27 74.27 11 L&T Finance Holdings Limited India 66.26 66.26 66.26 63.62 63.62 63.62 [6] Formerly known as L&T Construction Equipment Limited. [5] Formerly known as L&T Construction Machinery Limited. [4] One equity share (the Golden Share) is held by the Government of Telangana in pursuance of the Shareholders' Agreement. [3] Became subsidiary on November 25, 2020. 100.00 100.00 100.00 100.00 100.00 15 100.00 L&T Technology Services Limited 73.90 73.90 73.90 74.24 74.24 74.24 India India 488.57 L&T Realty Developers Limited 2331.65 1611.73 20.00 17.53 L&T MBDA Missile Systems Limited 158.78 107.24 L&T - MHI Power Boilers Private Limited 187.73 125.16 Joint ventures, including: 180.20 Larsen & Toubro (East Asia) SDN. BHD. 221.70 352.88 16 Total L&T Construction Equipment Limited [5] 100.00 100.00 100.00 100.00 100.00 19 Mindtree Limited 100.00 India 60.99 60.99 61.03 61.03 61.03 [1] Formerly known as L&T Electricals and Automation Limited. [2] In process of being struck off from the register of companies. 60.99 100.00 India L&T Realty Developers Limited [6] 100.00 100.00 100.00 100.00 100.00 17 L&T Infrastructure Engineering Limited India 100.00 100.00 100.00 100.00 100.00 100.00 18 India 12973.90 crore Sub-total (I) 9 50.10 50.10 50.10 50.10 India L&T Howden Private Limited 8 24.98 [1] 24.98 [1] India L&T Halol-Shamlaji Tollway Limited [2] 7 51.00 [1] L&T-MHI Power Boilers Private Limited 51.00 India 51.00 12 75.50 75.50 75.50 75.50 India Raykal Aluminium Company Private Limited 11 51.00 51.00 51.00 51.00 India L&T-MHI Power Turbine Generators Private Limited 10 51.00 51.00 51.00 [1] India Ahmedabad Maliya Tollway Limited 51.00 [1] 51.00 [1] India L&T Rajkot-Vadinar Tollway Limited 2 51.00 [1] 51.00 [1] India L&T Chennai-Tada Tollway Limited 1 Proportion of effective ownership Interest (%) (%) ownership 3 L&T Samakhiali Gandhidham Tollway Limited India 0.02 6 63.86 26.24 63.86 26.24 India L&T Transportation Infrastructure Limited 5 L&T Special Steels and Heavy Forgings Private Limited 51.00 51.00 51.00 India L&T Infrastructure Development Projects Limited 4 51.01 0.02 51.01 51.00 of direct India 74.00 Statutory Financial Reports Discussion and Analysis Report Integrated Management Corporate Overview 462 [2] The company ceased to be a joint venture w.e.f. October 21, 2021 [1] Proportion of direct ownership is less than 0.01%. 50.00 50.00 50.00 50.00 India L&T-Sargent & Lundy Limited 19 50.00 50.00 Statements 50.00 Notes forming part of the Financial Statements (contd.) Basic and diluted Earnings per Share [EPS] computed in accordance with Ind AS 33 "Earnings per Share": Particulars 11797.79 7879.45 1,40,47,47,700 D Weighted average number of equity shares outstanding C=A+B Profit after tax from continuing and discontinued operations as per accounts ( crore) 8650.48 B Profit after tax from discontinued operations as per accounts ( crore) 3147.31 7879.45 A Profit after tax from continuing operations as per accounts (crore) Basic earnings per share 2020-21 2021-22 LARSEN & TOUBRO NOTE [49] 50.00 India L&T Chiyoda Limited 15 51.00 51.00 51.00 51.00 India L&T MBDA Missile Systems Limited 14 37.74 [1] 37.74 [1] India PNG Tollway Limited 13 74.00 74.00 L&T Hydrocarbon Caspian LLC Baku, 50.00 50.00 18 60.00 60.00 60.00 60.00 India L&T Sapura Offshore Private Limited 17 74.00 60.00 60.00 60.00 India L&T Sapura Shipping Private Limited 16 Azerbaijan 50.00 50.00 60.00 Proportion As at 31-3-2021 Proportion of effective ownership Interest (%) 100.00 100.00 100.00 100.00 Saudi Arabia Kindgom of L&T Hydrocarbon Saudi Company LLC 5 100.00 75.00 75.00 100.00 75.00 75.00 Saudi Arabia Kindgom of Larsen & Toubro Arabia LLC 100.00 4 100.00 L&T Modular Fabrication Yard LLC 70.00 70.00 100.00 70.00 70.00 Oman Sultanate of L&T Electromech LLC 7 100.00 70.00 70.00 100.00 70.00 70.00 Oman Sultanate of 6 100.00 100.00 100.00 (%) of direct ownership of effective voting power held (%) ownership As at 31-3-2021 Proportion of effective Proportion 98.76 95.24 USA Larsen & Toubro LLC 1 Proportion As at 31-3-2022 Proportion of effective ownership Interest (%) (%) Proportion of direct ownership No. business Interest (%) 98.76 95.24 98.77 100.00 100.00 100.00 UAE L&T Global Holdings Limited 3 100.00 100.00 100.00 4.35 100.00 4.35 Saudi Arabia Kindgom of Larsen & Toubro (Saudi Arabia) LLC 2 98.77 Proportion of effective voting power held (%) 100.00 8 L&T Hydrocarbon International FZE [1] UAE 2 50.00 50.00 50.00 50.00 50.00 50.00 India Gujarat Leather Industries Limited [1] 1 held (%) Interest (%) (%) held (%) ownership voting power ownership of effective Magtorq Private Limited India 42.85 42.85 As at 31-3-2022 Proportion of direct ownership (%) Principal place of business No. Name of the joint venture Sr. Joint Ventures: Disclosure pursuant to Ind AS 27 "Separate Financial Statements" (contd.) of effective NOTE [48] Notes forming part of the Financial Statements Integrated Annual Report 2021-22 461 [1] Under liquidation 42.85 42.85 42.85 42.85 Notes forming part of the Financial Statements (contd.) 1,40,41,46,937 of direct Proportion 70.00 Oman Sultanate of L&T Heavy Engineering LLC 10 100.00 49.00 49.00 100.00 49.00 49.00 Kuwait L&T Kuwait Construction General Contracting Company WLL 9 100.00 100.00 100.00 70.00 100.00 70.00 70.00 Proportion of effective voting power Proportion of effective ownership ownership (%) Interest (%) Proportion of direct Proportion Proportion No. Sr. Name of associate As at 31-3-2021 As at 31-3-2022 Associate Companies : [1] Liquidated on August 17, 2021 100.00 Principal place of business Basic EPS from continuing operations(*) A/D 56.09 The exposure of the Company's borrowing to interest rate changes at the end of the reporting period are as follows: In the cases mentioned above, the lenders and the Company are likely to agree on a neutral spread adjustment which does not impact the counterparties financially. The Company's Treasury team constantly tracks the developments related to this proposed transition and has also had interactions with the counterparty lenders to prepare for the transition. With the transition of LIBOR into another benchmark (SOFR), there will be a spread adjustment that will have to be applied to these loans. The loans are expected to be either refinanced and linked to a new benchmark or simply transitioned to the new benchmark before LIBOR ceases to be published. The Company has insignificant portion of the loan book which has a flowing rate linked to one month USD LIBOR. Disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": Market risk management (contd.) NOTE [52] Notes forming part of the Financial Statements (contd.) Notes forming part of the Financial Statements Integrated Annual Report 2021-22 465 The Company's exposure to changes in interest rates relates primarily to the Company's outstanding floating rate debt. While most of the Company's outstanding debt in local currency is on fixed rate basis and hence not subject to interest rate risk, a major portion of foreign currency debt is linked to international interest rate benchmarks like LIBOR. The Company also hedges a portion of these risks by way of derivatives instruments like Interest rate swaps and currency swaps. (ii) Interest rate risk: Actual future gains and losses associated with the Company's investment portfolio and derivative positions may differ materially from the sensitivity analysis performed as at March 31, 2022 due to the inherent limitations associated with predicting the timing and amount of changes in foreign currency exchanges rates and the Company's actual exposures and position. To provide a meaningful assessment of the foreign currency risk associated with the Company's foreign currency derivative positions against off-balance sheet exposures and unhedged portion of on-balance sheet financial assets and liabilities, the Company uses a multi-currency correlated value-at-risk ("VAR") model. The VAR model uses a Monte Carlo simulation to generate thousands of random market price paths for foreign currencies against Indian rupee taking into account the correlations between them. The VAR is the expected loss in value of the exposures due to overnight movement in spot exchange rates, at 95% confidence interval. The VAR model is not intended to represent actual losses but is used as a risk estimation tool. The model assumes normal market conditions and is a historical best fit model. Because the Company uses foreign currency instruments for hedging purposes, the loss in fair value incurred on those instruments are generally offset by increases in the fair value of the underlying exposures for on-balance sheet exposures. The overnight VAR for the Company at 95% confidence level is 69.70 crore as at March 31, 2022 and 61.09 crore as at March 31, 2021. (21.02) (14.43) Particulars 164.57 Floating rate borrowings As at 31-3-2022 3524.53 (1.01) (0.48) 0.48 As at 31-3-2021 As at 31-3-2022 2020-21 2021-22 Impact on Equity Impact on Profit and Loss after tax Interest rates-increase by 0.5% in USD interest rate Interest rates -decrease by 0.5% in USD interest rate Liquidity Risk Management: Interest rates -increase by 0.5% in INR interest rate Interest rates -decrease by 0.5% in INR interest rate US Dollar Indian Rupee Particulars crore A hypothetical 50 basis point shift in respective currency LIBORS and other benchmarks, holding all other variables constant, on the unhedged loans would result in a corresponding increase/decrease in interest cost for the Company on a yearly basis as follows: 466 (b) As at 31-3-2021 5287.49 crore 2337.79 Receivable/(payable) exposure with respect to forward contracts and embedded derivatives not designated as cash flow hedge 404.79 (38.45) (23.99) 32.10 3294.27 Receivable/(payable) exposure with respect to forward contracts and embedded derivatives not designated as cash flow hedge 696.42 473.12 (2308.25) 7710.74 commitments and highly probable transactions Derivatives including embedded derivatives for hedging receivable/ (payable) exposure with respect to firm (56.08) 86.57 Derivatives including embedded derivatives for hedging receivable/(payable) exposure with respect to non-financial assets/(liabilities) (358.10) 103.40 (221.42) crore As at 31-3-2021 Particulars US Dollars including pegged 1031.00 (4931.25) 6324.70 commitments and highly probable transactions Derivatives including embedded derivatives for hedging receivable/ (payable) exposure with respect to firm 65.82 291.65 (97.62) 1.01 (37.84) 55.90 (1216.76) Net exposure to foreign currency risk in respect of recognised financial assets/(recognised financial liabilities) Derivatives including embedded derivatives for hedging receivable/(payable) exposure with respect to non-financial assets/(liabilities) currencies Algerian Dinar Dinars EURO Japanese Yen Kuwaiti (554.10) (0.48) 0.48 (1.01) 1.01 I. As at 31-3-2021 As at 31-3-2022 Note crore No. Particulars Sr. (a) Category-wise classification for applicable financial assets: Other disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": NOTE [53] Notes forming part of the Financial Statements (contd.) Notes forming part of the Financial Statements Integrated Annual Report 2021-22 467 The table given in the Risk Management section of Management Discussion and Analysis lists out the commodity exposure for the year (only for projects that been awarded and are under execution). The Company bids for and executes EPC projects on turnkey basis. EPC projects entail procurement of various equipment and materials which may have direct or indirect linkages to commodity prices like steel (both long and flat steel), copper, aluminum, zinc, lead, nickel, cement etc. Accordingly, the Company is exposed to the price risk on these commodities. To mitigate the risk of commodity prices, the company relies on contractual provisions like pass through of prices, price variation provisions etc., and further uses hedging instruments where available (refer Note 53 (h)(ii)). There is certain residual risk carried by the company that cannot be hedged against. Measured at fair value through Profit or Loss (FVTPL): (i) Investment in equity instruments (ii) Investment in mutual funds 33.68 24.48 7,15 Embedded derivatives not designated as cash flow hedges (v) 99.47 67.91 7,15 3006.54 (iv) Derivative instruments not designated as cash flow hedges 1277.67 10 (iii) Investment in bonds 70.22 11787.56 5961.14 10 74.40 5 982.97 (166.91) (ii) Trade receivable written off during the year but still enforceable for recovery amounts to Nil (previous year: Nil) (d) Commodity price risk management: (121.66) (367.60) Statutory Financial Reports Statements Integrated Discussion and Analysis Report Management Corporate Overview (2.19) 2.19 59.32 (59.32) 4.52 (4.52) crore Increase/(decrease) in investment value As at 31-3-2022 As at 31-3-2021 76.39 (76.39) Debt funds and debt securities - decrease by 0.50% in fair market value Equity funds- increase by 5% in NAV Equity funds- decrease by 5% in NAV Debt funds and debt securities - increase by 0.50% in fair market value Particulars The Company manages liquidity risk by maintaining sufficient cash and marketable securities and by having access to funding through adequate committed credit lines. Given the need to fund diverse businesses, the Company maintains flexibility by need based drawing from committed credit lines. Management regularly monitors the position of cash and cash equivalents. The maturity profiles of financial assets and financial liabilities including debt financing plans and liquidity ratios are considered while reviewing the liquidity position. The Company's investment policy and strategy are focused on preservation of capital and supporting the Company's liquidity requirements. The Company uses a combination of internal and external management to execute its investment strategy and achieve its investment objectives. The Company typically invests in money market funds, large debt funds, Government of India securities, equity funds and other highly-rated securities under a exposure limit framework. The investment policy focuses on minimising the potential risk of principal loss. To provide a meaningful assessment of the price risk associated with the Company's investment portfolio, the Company performed a sensitivity analysis to determine the impact of change in prices of the securities on the value of the investment portfolio assuming a 0.5% movement in the fair market value of debt funds and debt securities and a 5% movement in the NAV of the equity funds as below: 18.78 (18.78) (12.70) 12.70 (18.78) 18.78 (12.70) 12.70 LARSEN & TOUBRO Notes forming part of the Financial Statements (contd.) NOTE [52] Disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": Market risk management (contd.) (c) Credit Risk Management: 205.58 185.62 297.07 411.24 2871.49 2020-21 2021-22 3006.54 crore 3481.74 Balance as at March 31 [refer Note 11] Additional provision (net) towards credit impaired receivables Provision/(reversal) of allowance for ECL Changes in loss allowance for ECL: Balance as at April 1 Particulars The Company is making provisions on trade receivables based on Expected Credit Loss (ECL) model. The reconciliation of ECL is as follows: (i) The Company's customer profile include public sector enterprises, state owned companies and large private corporates. Accordingly, the Company's customer credit risk is low. The Company's average project execution cycle is around 24 to 36 months. General payment terms include mobilisation advance, monthly progress payments with a credit period ranging from 45 to 90 days and certain retention money to be released at the end of the project. In some cases, retentions are substituted with bank/corporate guarantees. The Company has a detailed review mechanism of overdue customer receivables at various levels within the organisation to ensure proper attention and focus for realisation. Write off as bad debts 7405.60 (2949.42) Dinar contracts construction Total Others cost- Contractual rectification Litigation related obligations Expected tax liability in respect of indirect taxes Product warranties Particulars Sr. No. Class of provisions crore Movement in provisions: a) Disclosures pursuant to Ind AS 37 "Provisions, Contingent Liabilities and Contingent Assets" NOTE [50] 1 Face value per share (*) Balance as at April 1, 2021 338.81 Provision reversed during the year 4 (11.74) (2.64) Provision used during the year 3 422.51 370.20 0.67 36.43 15.21 Additional provision during the year 2 919.70 54.90 446.57 73.45 5.97 2 2 83.93 Profit after tax from continuing and discontinued operations as per accounts (crore) Weighted average number of equity shares outstanding 8650.48 B Profit after tax from discontinued operations as per accounts (crore) 3147.31 7879.45 A Profit after tax from continuing operations as per accounts (crore) Diluted earnings per share 84.02 56.09 C/D Basic EPS from continuing discontinued operations(*) 61.61 B/D Basic EPS from discontinued operations(*) 22.41 C=A+B 7879.45 11797.79 Add: Weighted average number of potential equity shares on account of employee stock options 56.03 C/F Diluted EPS from continuing discontinued operations() 61.54 B/F Diluted EPS from discontinued operations(*) 22.39 56.03 (1.37) A/F 14,20,264 15,40,580 1,40,62,88,280 F=D+E Weighted average number of equity shares outstanding for diluted EPS Diluted EPS from continuing operations(*) 1,40,41,46,937 1,40,47,47,700 D D E 1,40,55,67,202 (4.75) (0.08) (49.43) (163.08) 0.49 Disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": Market risk management (a) Foreign exchange rate and interest rate risk: NOTE [52] (b) intangible assets being expenditure on new product development (a) tangible assets 30.87 2020-21 2021-22 crore Capital Expenditure on: (ii) Recognised as expense in the Statement of Profit and Loss Particulars Sr. No. Of the above, expenditure on research and development activities of discontinued operations is as follows: 0.58 0.52 9.39 The Company regularly reviews its foreign currency and interest rate related exposures - both hedged and open exposures. The Company primarily follows cash flow hedge accounting for Highly Probable Forecasted Exposures (HPFE), hence, the movement in mark to market (MTM) of the hedge contracts undertaken for such exposures is likely to be offset by contra movements in the underlying exposures values. However, till the point of time that the HPFE becomes an on-balance sheet exposure, the changes in MTM of the hedge contracts will impact the Balance Sheet of the Company. Further, given the effective horizons of the Company's risk management activities which coincide with the durations of the projects under execution, which could extend across 3-4 years and given the business uncertainties associated with the timing and estimation of the project exposures, the recognition of the gains and losses related to these instruments may not always coincide with the timing of gains and losses related to the underlying economic exposures and, therefore, may affect the Company's financial condition and operating results. The Company monitors the potential risk arising out of the market factors like exchange rates, interest rates, price of traded investment products etc. on a regular basis. For on-balance Sheet exposures, the Company monitors the risks on net unhedged exposures. (i) Foreign exchange rate risk: Algerian Kuwaiti Dinars EURO Japanese Yen US Dollars including pegged currencies Particulars crore As at 31-3-2022 Disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": Market risk management (contd.) The net exposure to foreign currency risk (based on notional amount) in respect of recognised financial assets, recognised financial liabilities and derivatives for major categories is as follows: (c) other intangible assets NOTE [52] LARSEN & TOUBRO Statutory Financial Reports Statements Integrated Discussion and Analysis Report Management Corporate Overview 464 The Company may enter into foreign currency forward and option contracts with financial institutions to protect against foreign exchange risks associated with certain existing assets and liabilities, certain firmly committed transactions, forecasted future cash flows and net investments in foreign subsidiaries. In addition, the Company has entered, and may enter in future, into non- designated foreign currency contracts to partially offset the foreign currency exchange gains and losses on its foreign-denominated debt issuances. The Company's practice is to hedge a portion of its material net foreign exchange exposures with tenors in line with the project/business life cycle. The Company may also choose not to hedge certain foreign exchange exposures. The Company has both receivable and payable exposures in foreign currency. Accordingly, changes in exchange rates may affect the Company's revenues, cost and profitability. There is a risk that the Company may also have to adjust the pricing due to competitive pressures when there has been significant volatility in foreign currency exchange rates. Notes forming part of the Financial Statements (contd.) Net exposure to foreign currency risk in respect of recognised financial assets/(recognised financial liabilities) 9.39 3.74 Expected tax liability in respect of indirect taxes represents mainly the differential sales tax liability on account of non-collection of declaration forms. Product warranties: The Company gives warranties on certain products and services, undertaking to repair or replace the items that fail to perform satisfactorily during the warranty period. Provision made as at March 31, 2022 represents the amount of the expected cost of meeting such obligations of rectification/replacement. The timing of the outflows is expected to be within a period of 1 to 3 years from the date of Balance Sheet. iv. iii. ii. i. Nature of provisions: b) 1109.12 54.90 604.26 74.04 358.75 17.17 5 Balance as at March 31, 2022 (5=1+2+3+4) (169.28) (63.81) Provision for litigation related obligations represents liabilities that are expected to materialise in respect of matters in appeal. Contractual rectification cost represents the estimated cost the Company is likely to incur during defect liability period as per the contract obligations in respect of completed construction contracts accounted under Ind AS 115 "Revenue from Contracts with customers". V. Other provisions mainly includes onerous contracts. Disclosure in respect of contingent liabilities is given as part of Note 29 to the Balance Sheet. 463 (b) intangible assets being expenditure on new product development (a) tangible assets 122.33 83.73 2020-21 2021-22 Capital Expenditure on: (ii) 1.24 Recognised as expense in the Statement of Profit and Loss No. Particulars Sr. The expenditure on research and development activities is as follows: NOTE [51] Notes forming part of the Financial Statements (contd.) Notes forming part of the Financial Statements Integrated Annual Report 2021-22 (i) 100.00 (v) Embedded derivative Instruments not designated Management 11.03 (12.46) 151246.64 33.68 143.04 1030545.11 142207.55 47.04 8.13 169465.07 8.13 71.39 71.39 1346959.25 25.25 (99.81) (23.49) (99.81) 227305.24 25.25 12174.31 588420.44 (126.17) (556.94) (556.94) 743183.52 (crore) (* crore) (*crore) (crore) (*) months (126.17) months 7447.47 143.04 After twelve twelve Average Nominal amount (crore) (*) (*crore) months months rate Within 33.68 After twelve Average Nominal amount Within As at 31-3-2021 As at 31-3-2022 Aluminium Particulars Commodity options contract: [1] Negative nominal amount represents net sell position. 47.04 twelve rate rate twelve 189.04 9.46 Omani Riyal 3.51 58.77 3.51 3.63 60.69 3.63 Canadian Dollar 9.46 46.35 46.35 42.35 20.71 42.35 Arab Emirates Dirham 242.90 242.90 242.90 32.43 253.45 20.28 twelve (ii) Outstanding commodity price hedge instruments B. Average Nominal amount (* crore) (₹) (crore) months months rate amount After Within A. Commodity forward contract: After twelve Average Nominal Within As at 31-3-2021 As at 31-3-2022 Lead(Tn) Nickel(Tn) Iron Ore(Tn) Copper(Tn)[1] Aluminium (Tn)[1] Particulars twelve 32.43 months (₹) 0.04 322.19 (4.34) 30.93 (4.76) reserve reserve hedging hedging Cost of 190.60 Cash flow reserve (38.96) reserve hedging Cash flow As at 31-3-2021 As at 31-3-2022 crore 3.02 42.83 Cost of hedging 95.32 (2.67) Hedging reserve/Cost of hedging reserve NOTE [53] Notes forming part of the Financial Statements (contd.) Statements Statutory Financial Reports Discussion and Analysis Report Integrated Management Corporate Overview 242.30 (72.30) crore (137.51) 92.77 44.26 45.46 41.78 260.25 20.40 31.57 23.42 2020-21 2021-22 (76.02) months 27.71 61.40 Non-current: Liability Other financial liabilities Asset Other financial assets Current: Forward contracts Particulars Cash flow hedge: (i) Carrying amounts of hedge instruments for which hedge accounting is followed: Other disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": (contd.) NOTE [53] Asset Other financial assets Notes forming part of the Financial Statements (contd.) Integrated Annual Report 2021-22 473 [1] The options contracts include a combination of calls and puts with different maturities and strike prices. 11.30 [1] 11.30 (* crore) (crore) (*crore) (*crore) Notes forming part of the Financial Statements 119.42 Liability Other financial liabilities Particulars 286.79 29.18 154.01 375.12 67.59 304.03 339.94 Currency Commodity exposure price exposure crore As at 31-3-2021 As at 31-3-2022 Currency Commodity exposure price exposure Breakup of hedging reserve & cost of hedging reserve balance: Sales, administration and other expenses Revenue from operation Progress billing Hedged expected future cash flows affecting Profit or Loss: Sales, administration and other expenses Future cash flows are no longer expected to occur: Particulars 474 (k) Reclassification of hedging reserve & cost of hedging reserve to Profit or Loss Balance for which hedge accounting discontinued Balance towards continuing hedges Manufacturing,construction and operating expenses Finance costs Kuwaiti Dinar 26.41 101.30 1460.38 257.37 683.69 94.15 941.06 EURO 146.35 779.74 21.26 926.09 99.84 110.40 0.73 2537.18 249.32 958.09 20.72 1207.41 5.07 100.83 74.40 950.49 21.26 1024.89 2426.78 Arab Emirates Dirham 1195.09 Kuwaiti Dinar 214.70 Corporate Overview 105.14 191.87 British Pound 186.38 599.11 193.34 785.49 100.15 265.29 265.40 365.55 Omani Riyal 186.52 645.10 255.45 831.62 12.93 795.36 261.19 808.30 202.36 100.49 4198.03 78.35 After Within After twelve twelve Average Nominal amount (*crore) Particulars Within As at 31-3-2021 As at 31-3-2022 rate 472 (i) (h) Details of outstanding hedge instruments for which hedge accounting is followed: Outstanding currency exchange rate hedge instruments 362.74 69.74 432.48 35.74 35.74 327.00 69.74 396.74 465.19 29.67 435.52 366.76 98.43 Forward covers taken to hedge exchange rate risk and accounted as cash flow hedge: 8999.77 months (*) 13197.80 2607.45 79.32 10671.01 21.06 1734.08 0.69 1401.82 1502.65 Japanese Yen 1739.15 Qatari Riyal 13278.46 US Dollar (a) Receivable hedges months (crore) (crore) (*crore) (*) months months rate twelve twelve Average Nominal amount (*crore) (crore) 214.70 Malaysian Ringgit 38.98 12.04 500.30 Chinese Yuan 1325.46 0.72 1325.46 897.43 0.67 897.43 Japanese Yen 500.30 279.83 6409.40 41.56 3515.38 87.56 3556.94 EURO 311.60 10615.91 74.49 10927.51 87.40 100.03 85.99 85.98 26.41 127.11 105.93 127.11 British Pound 29.59 20.69 29.59 149.96 20.82 11.23 149.96 169.76 123.77 80.10 293.53 0.90 272.74 77.29 273.64 Swiss Franc 0.01 Qatari Riyal 9424.11 76.83 9524.14 Within As at 31-3-2021 As at 31-3-2022 Other disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": (contd.) NOTE [53] LARSEN & TOUBRO Notes forming part of the Financial Statements (contd.) Statements Statutory Financial Reports Discussion and Analysis Report After Integrated Corporate Overview 2.77 2.31 2.77 Thai Baht 91.85 19.40 91.85 38.98 18.28 Management Within After Nominal US Dollar (b) Payable hedges (*crore) (crore) (₹) months months rate twelve twelve Average Nominal amount (* crore) months (crore) (*crore) (*) (*crore) months rate amount twelve twelve Average Particulars Other disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": (contd.) Movement of hedging reserve & cost of hedging reserve 16.50 13.17 (1) crore 327.93 487.99 130.84 130.84 83.50 326.64 34.10 34.10 24.66 2450.49 162.53 4004.49 3726.70 1584.45 404.15 22.48 29.60 29.60 29.60 26.00 145.43 176.67 1730.38 1730.38 2450.49 1730.38 327.93 213.23 Notes forming part of the Financial Statements Integrated Annual Report 2021-22 477 [8] Subsidiary classification is in accordance with the Companies Act, 2013 [7] Loans to employees (including directors) under various schemes of the company (such as housing loan, furniture loan, education loan, etc.) have been considered to be outside the purview of disclosure requirements. [6] Above figures include interest accrued 1730.38 crore (previous year: 39.81 crore (previous year: 173.93 crore (previous year: 75.20 crore (previous year: 71.62 crore) 1730.38 crore) 38.38 crore) 167.70 crore) [1] Formerly known as L&T Construction Equipment Limited [2] Excluding impairment of [3] Excluding impairment of [4] Excluding impairment of [5] Excluding impairment of 5118.82 163.73 6353.32 75.20 71.62 75.20 86.71 83.12 83.12 0.28 601.48 403.66 403.66 144.49 Notes forming part of the Financial Statements (contd.) 1730.38 (xi) Notes forming part of the Financial Statements (contd.) LARSEN & TOUBRO Statements Statutory Financial Reports Discussion and Analysis Report Integrated Management Corporate Overview 476 There are no amounts due and outstanding to be credited to Investor Education & Protection Fund as at March 31, 2022. NOTE [57] NOTE [56] 0.28 14.01 14.43 1.09 11.46 Interest due and payable towards suppliers under MSMED Act for payments already made Interest accrued and remaining unpaid at the end of the year to suppliers under MSMED Act Amount of further interest remaining due and payable even in the succeeding years 0.55 2.89 193.36 318.82 9.73 L&T Modular Fabrication Yard LLC L&T Heavy Engineering LLC [5] Total Particulars in respect of loans and advances in the nature of loans to related parties as required by the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015: Sr. (x) (ix) L&T Hydrocarbon Saudi Company [4] (viii) L&T Sapura Shipping Private Limited (vii) Larsen & Toubro Arabia LLC [3] Hi-Tech Rock Products & Aggregates Limited (vi) L&T Metro Rail (Hyderabad) Limited (v) (iv) Nabha Power Limited (iii) L&T Geostructure Private Limited crore (ii) L&T Special Steels & Heavy Forgings Private Limited [2] (i) 31-03-2021 31-03-2022 2020-2021 2021-2022 No. As at Maximum outstanding during Balance as at As at Name of the company Loans and advances in the nature of loans given to subsidiaries: L&T Realty Developers Limited [1] 0.05 NOTE [58] Sr. (h) L&T Hydrocarbon Saudi Company LLC (i) 514.50 505.32 1262.12 253.41 Corporate guarantee for subsidiary's project performance 611.53 610.58 4115.57 8652.89 19573.00 250.00 4500.00 4000.00 Corporate guarantee given for subsidiary's Debt (g) Mindtree Limited (f) Larsen & Toubro (Saudi Arabia) LLC (e) L&T Technology Services Limited (d) Larsen & Toubro Arabia LLC (c) L&T Metro Rail (Hyderabad) Limited (b) Nabha Power Limited 312.67 8616.00 255.12 7128.36 (j) L&T Metro Rail (Hyderabad) Ltd 478 1730.38 crore) 38.38 crore) 167.70 crore) 71.62 crore) 1730.38 crore (previous year: 39.81 crore (previous year: 173.93 crore (previous year: 75.20 crore (previous year: [1] Excluding impairment of [2] Excluding impairment of [3] Excluding impairment of [4] Excluding impairment of Investments in fully paid equity instruments and Current Investments (C) [Note 5 and Note 10] 0.50 19434.43 0.50 42727.92 Corporate guarantee given to Maharashtra Pollution Control Board for CTO/CTE compliances L&T-MHI Power Boilers Private Limited 21.95 Guarantees issued by bank out of the Company's sanctioned limits on behalf of L&T Special Steel for project performance to NPCIL 216.00 216.00 472.00 29.23 29.21 (m) L&T Seawoods Ltd Guarantees issued by bank out of the Company's sanctioned limits to customer of L&T- MHI Power Boilers Private Limited for project performance Guarantee issued by bank out of the Company's sanctioned limits On behalf of LTMRHL towards DSRA ((Debt Service Reserve Account) to SBI Cap Trustee Guarantees issued by bank out of the Company's sanctioned limits on behalf of Nabha for project performance to PSPCL (I) L&T Special Steel & Heavy Forgings Pvt Ltd (k) Nabha Power Limited 15.89 Disclosure pursuant to section 186 of The Companies Act 2013: (a) L&T MHI Power Turbine Generators Private Limited 5118.82 2020-21 2021-22 Purpose for which the loan/guarantee/security is proposed to be utilised by the recipient crore Subsidiary Companies: Guarantees (i) L&T Modular Fabrication Yard LLC L&T Heavy Engineering LLC [4] (h) L&T Hydrocarbon Saudi Company [3] (g) L&T Sapura Shipping Private Limited (f) Larsen & Toubro Arabia LLC [2] Working capital and project funding (e) L&T Geostructure Private Limited (c) L&T Metro Rail (Hyderabad) Limited (b) Nabha Power Limited (a) L&T Special Steels & Heavy Forgings Private Limited [1] Total Subsidiary Companies: Loan and Advances Nature of the transaction (loans given/investment made/guarantee given/security provided) (B) (A) No. (d) Hi-Tech Rock Products & Aggregates Limited Working capital 1730.38 Project funding 6353.32 71.62 75.20 83.12 0.28 403.66 213.23 162.53 327.93 130.84 1730.38 83.50 26.00 Project funding 34.10 24.66 Investment in subsidiaries 2450.49 3726.70 Working capital and project funding 22.48 145.43 29.60 1.03 Interest accrued, due to suppliers under MSMED Act on the above amount, and unpaid Payment made to suppliers (other than interest) beyond the appointed day during the year Interest paid to suppliers under MSMED Act (Section 16) 87.78 Opening balance Cost of hedging reserve Gross (9.36) 2020-21 2021-22 crore (194.58) 221.53 65.67 (92.89) 314.42 283.23 Impact of business combination (101.46) (260.25) (17.88) 2.52 (20.40) Amount included in Progress Billing in balance sheet Closing balance (4.67) 1.95 (6.62) 0.13 (0.02) 384.69 0.15 Changes in the forward element of the forward (82.21) Tax Gross Net of Tax Tax NOTE [54] (7.01) 2.35 (9.36) (4.72) 1.58 contracts where changes in spot element of forward contract is designated as hedging instrument for time period related hedges (6.30) (103.55) 112.39 (37.80) 150.19 34.83 (138.38) (61.52) 63.81 (21.46) 85.27 Amount reclassified to Profit or Loss 20.69 Closing balance Net of Tax Amount included in non-financial asset/liability 119.60 period related hedges which is designated as hedging instrument for time Changes in the spot element of the forward contracts 121.55 (40.88) 162.43 (46.83) 17.75 (64.58) Net of Tax 59.16 Tax Net of Tax 221.53 (92.89) 314.42 Tax Gross 2020-21 2021-22 Impact of business combination Opening balance Hedging reserve Gross (305.19) (7.23) 202.71 (424.79) (40.75) 5.67 (46.42) Amount reclassified to Profit or Loss 21.29 (8.90) 30.19 (29.84) 4.15 51.93 (33.99) 486.99 (188.34) 675.33 98.11 (13.66) 111.77 as hedging instruments Changes in fair value of forward contracts designated 142.97 (59.74) Changes in fair value of swaps 2.35 (7.01) (19.34) 0.93 1.76 0.24 0.59 Computer 0.15 0.06 0.09 0.09 Vehicles 1.52 41.43 5.78 28.04 71.78 36.13 Plant & equipment 131.95 123.70 101.60 56.38 46.61 33.27 62.96 Total 122.80 18.42 2020-21 2021-22 Principal amount due to suppliers under MSMED Act, 2006 Particulars crore The Company has amounts due to suppliers under The Micro, Small and Medium Enterprises Development Act, 2006, [MSMED Act] as at March 31, 2022. The disclosure pursuant to the said Act is as under: Total cash out flow for leases amounts to 2558.41 crore during the year (previous year: 2119.36 crore) including cash outflow of short-term and low value leases. Short-term leases - 2589.36 crore (previous year: 2143.46 crore) and 104.00 35.41 crore (previous year: 7.66 crore) NOTE [55] iii. The expense relating to payments not included in the measurement of lease liability and recognised as expense in the Statement of Profit and Loss during the year are as follows: ii. Interest expense on lease liabilities amounts to 13.24 crore (previous year: 14.36 crore). i. 440.07 420.59 110.05 86.30 Low value leases - Buildings 265.03 262.64 0.28 6.69 As at 31-3-2021 27.99 Total Beyond 5 years 4-5years 3.29 3-4 years 4.56 2-3 years 5.65 1 - 2 years 7.23 0.28 Upto 1 year 7.27 Particulars crore Annual undiscounted lease payments receivable is as under: Operating leases: The Company has given buildings and plant & equipment under operating lease. The lease income received during the year is 161.35 crore (previous year: 162.96 crore). Leases are renewed only on mutual consent and at a prevalent market price and sub-lease is generally restricted. (a) Where the Company is a lessor: Disclosure pursuant to IndAS 116 "Leases" (14.48) (1.37) 0.46 (1.83) 4.86 As at 31-3-2022 0.28 0.16 7.68 0.91 1.88 4.07 4.23 Land 2020-21 Carrying amount 2021-22 Additions during the year 2020-21 2021-22 2020-21 2021-22 Class of asset Depreciation for the year crore Details with respect to right-of-use assets: Disclosure pursuant to IndAS 116 "Leases" (contd.) NOTE [54] Notes forming part of the Financial Statements (contd.) Notes forming part of the Financial Statements Integrated Annual Report 2021-22 475 The Company has taken various assets on lease such as, plant & equipment, buildings, office premises, vehicles and computer equipment. Generally, leases are renewed only on mutual consent and at a prevalent market price and sub-lease is restricted. (b) Where the Company is a lessee: LARSEN & TOUBRO 85.26 191.87 69.32 21939.85 69.42 16717.35 19.13 19.13 26.40 26.40 583.43 16064.50 Total 7,15 757.60 (iii) Embedded derivative instruments designated as cash flow hedges 9162.44 605.32 8820.71 9162.44 464.64 464.64 7,15 (ii) Derivative financial instruments designated as cash flow hedges 8820.71 10 605.32 (i) Debt instruments viz. government securities, bonds and debentures 63.34 22760.79 (i) Designated at FVTPL: (b) Embedded derivative financial instruments designated as cash flow hedges 336.55 336.55 326.22 326.22 20,26 (a) Derivative financial instruments designated as cash flow hedges (ii) Designated at FVTOCI: 11.73 Financial Liabilities: 11.73 26.86 20,26 (b) Embedded derivative instruments not designated as cash flow hedges 15.81 15.81 36.03 36.03 20,26 (a) Derivative instruments not designated as cash flow hedges 26.86 20,26 Financial assets at FVTOCI: 33.68 Financial assets at FVTPL: Total Level 3 As at 31-3-2021 Level 2 Level 1 Total Level 3 As at 31-3-2022 Level 2 Level 1 (i) Equity shares (other than those held in subsidiary, joint ventures and associate companies) Note LARSEN & TOUBRO Financial assets: Particulars (e) Fair value hierarchy of financial assets and liabilities measured at fair value: Other disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": (contd.) NOTE [53] Notes forming part of the Financial Statements (contd.) Statements Statutory Financial Reports crore 33.68 5 69.42 24.48 24.48 7,15 as cash flow hedges 99.47 99.47 67.91 67.91 7,15 4.98 (iv) Derivative instruments not designated as cash flow hedges 63.34 6.88 11787.56 982.97 74.40 5961.14 1277.67 1277.67 10 (iii) Bonds 5961.14 10 (ii) Mutual fund units 70.22 11787.56 982.97 70.60 70.60 57.49 8222.87 19,23,24 Borrowings A. Non-derivative liabilities: months months months months Total 14412.85 22635.72 twelve Total twelve twelve After Within After Within As at 31-3-2021 As at 31-3-2022 twelve Note 7950.14 Trade payables: 20,26 Total Embedded derivatives Forward contracts 2124.21 199.77 71749.38 448.30 40321.48 120.05 2312.51 69.76 119.47 23327.27 48422.11 328.25 38008.97 2054.45 80.30 20705.48 28655.62 473.67 44911.67 3003.15 181.03 71205.24 378.96 42801.00 2883.18 71.35 54357.36 B. Derivative liabilities: Total Lease liabilities 20,26 Other financial liabilities 25 Due to others Due to micro enterprises and small enterprises 94.71 2110.67 119.97 109.68 16847.88 crore Particulars 25 bps change in capitalisation rate would result in +/- 0.60 crore (post tax- 0.45 crore) crore Balance as at March 31, 2022 Gains/(losses) recognised in Profit or Loss during 2021-22 Balance as at March 31, 2021 Gains/(losses) recognised in Profit or Loss during 2020-21 Balance as at April 01, 2020 Particulars Movement of items measured using unobservable inputs (Level 3): (f) Equity Investment in Tidel Park Limited Derivative instrument - Mark to market on forward covers and embedded derivative instruments is based on forward exchange rates at the end of reporting period and discounted using G-sec rate plus applicable spread. 2. 1. Level-1 Mutual Fund, bonds, debentures and government securities- Quoted price in the active market Valuation technique and key inputs used to determine fair value - 421.58 421.58 459.71 459.71 Total 57.49 Level-2 68.30 (5.07) 63.23 1% change in net realisation would result in +/- 0.28 crore (post tax- 0.21 crore) Sensitivity 31-3-2022 and 31-3-2021 : (g) Maturity profile of Financial Liabilities (undiscounted values): 2. Capitalisation rate 11.50% 63.23 31-3-2022 and 31-3-2021: 1. Net realisation per month *31.827 per sqft. 69.32 Equity Investment crore inputs Significant unobservable Fair value as at 31-3-2022 31-3-2021 Particulars Significant unobservable inputs used in level 3 fair value measurements and sensitivity of the fair value measurement to changes in unobservable inputs: Other disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": (contd.) NOTE [53] Notes forming part of the Financial Statements (contd.) Notes forming part of the Financial Statements Integrated Annual Report 2021-22 471 6.09 Integrated Report 350.26 Discussion and Analysis Corporate Overview (ii) Unclaimed credit balances written back 255.31 (121.95) Exchange gains/(losses) on revaluation or settlement of items denominated in foreign currency (trade payables, borrowing availed etc.) (i) Financial liabilities measured at amortised cost: C (2630.66) (495.43) 106.04 Sub-total (B) (28.73) 2. Gains/(losses) on transfer of financial assets (on non-recourse basis) (13.86) (22.49) 1. Bad debts (written off)/written back (net) (iv) Gains/(losses) on derecognition: (1989.86) (199.54) (iii) Provision for impairment loss (other than expected credit loss) [net] (58.42) (297.07) 226.54 (15.91) 32.92 1125.33 (38.33) (52.02) Gains/(losses) on fair valuation or settlement of embedded derivative contracts designated as cash flow hedges 2. 736.93 93.06 Gains/(losses) on fair valuation or settlement of forward contracts designated as cash flow hedges 1. 355.48 Sub-total (C) (106.75) (i) Financial assets measured at fair value through other comprehensive income: Gains/(loses) recognised in other comprehensive income: A Net gains/(losses) on financial assets and financial liabilities measured at fair value through other comprehensive income: || (1521.82) 140.92 Total [I]=(A+B+C) 481.85 1. Gains/(losses) on fair valuation or sale of government securities, bonds, debentures etc. (ii) Derivative measured at fair value through other comprehensive income : B (411.24) (271.45) Financial assets or financial liabilities mandatorily measured at fair value through Profit or Loss: (i) A Net gains/(losses) on financial assets, financial liabilities measured at fair value through Profit or Loss and amortised cost | No. 2020-21 2021-22 Particulars 1. Sr. LARSEN & TOUBRO (c) Items of income, expense, gains or losses related to financial instruments: Other disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": (contd.) NOTE [53] Notes forming part of the Financial Statements (contd.) Statements Statutory Financial Reports Discussion and Analysis Report Integrated crore (ii) Allowance/(reversal) for expected credit loss during the year Gains/(losses) on fair valuation or sale of Investments 960.68 166.59 Exchange gains/(losses) on revaluation or settlement of items denominated in foreign currency (trade receivables, loans given etc.) (i) Financial assets measured at amortised cost: B Sub-total (A) C. On futures not designated as cash flow hedges On embedded derivative contracts not designated as cash flow hedges b. 434.94 626.99 (52.11) 70.88 (147.16) (44.32) (134.42) 190.76 a. On forward contracts not designated as cash flow hedges Gains/(losses) on fair valuation/settlement of derivative: 2. 652.26 Sub-total (A) Less: (i) (d) Fair value of financial assets and financial liabilities measured at amortised cost: Financial assets measured at amortised cost: Total [II] = (A+B+C) Sub-total (C) (c) (b) Financial liabilities that are measured at amortised cost (a) (963.61) (459.14) (2007.70) (i) (1508.24) Financial liabilities that are measured at fair value through Profit or Loss (1870.02) (1432.22) (137.51) (76.02) Derivative instruments (including embedded derivatives) that are measured at fair value through other comprehensive income (reclassified to Profit or Loss during the period) Interest expense: 1028.75 1045.34 (0.17) 24.51 The carrying amounts of trade receivables, loans, advances, investments in CBLO and Commercial Paper and cash and other bank balances are considered to be the same as their fair values due to their short-term nature. The carrying amounts of long-term loans given with floating rate of interest are considered to be close to the fair value. (ii) [1] Valuation technique L2: Future cash flows discounted using market rates. Note: The carrying amounts of trade and other payables are considered to be the same as their fair values due to their short-term nature. The carrying amounts of current borrowings at fixed rate and other borrowings at floating rate of interest are considered to be close to the fair value. 88.28 L2[1] 16498.88 16410.60 L2[1] 15570.86 81.60 15652.47 16561.90 65.44 16627.33 63.47 16131.51 Total 16068.04 470 Redeemable non-convertible fixed rate debentures Term loan from banks amount Fair value As at 31-3-2021 Carrying As at 31-3-2022 Carrying Particulars Fair value hierarchy Fair value crore Financial liabilities measured at amortised cost: amount 42.27 640.35 658.65 Other disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": (contd.) NOTE [53] Notes forming part of the Financial Statements (contd.) Notes forming part of the Financial Statements Integrated Annual Report 2021-22 469 3.72 528.13 597.20 (4.78) 108.32 (160.34) Net gains/(losses) recognised in other comprehensive income [II]= (A)-(B) Sr. Sub-total (B) 2. 408.39 41.95 1. On forward contracts upon hedged future cash flows affecting the Profit or Loss or related asset or liability 116.02 71.15 1. On government securities, bonds, debentures etc. upon sale Derivative measured at fair value through other comprehensive income: (ii) Gains/(losses) reclassified to Profit or Loss from other comprehensive income: Financial assets measured at fair value through other comprehensive income: On embedded derivative contracts upon hedged future cash flows affecting the Profit or Loss or related asset or liability Particulars No. III 363.89 344.42 (b) Financial assets measured at fair value through other comprehensive income Financial assets measured at fair value through Profit or Loss Financial assets measured at amortised cost (a) Sub-total (B) (c) C 15.34 3.74 15.34 3.74 2020-21 2021-22 crore Interest income: Sub-total (A) Dividend income from investments measured at FVTPL B A Dividend income: Other income/(expenses): Management 20,26 6129.57 For fixed price contracts: Management Integrated Discussion and Analysis Report Statutory Financial Reports Statements Notes forming part of the Financial Statements (contd.) NOTE [64] Following are the analytical ratios for the year ended March 31, 2022 and March 31, 2021 LARSEN & TOUBRO Ratio Numerator Denominator As at 31-3-2022 As at 31-3-2021 Variance % Reason of Variance [If change is more than 25%] Current Ratio (times) Current assets Current liabilities 1.39 1.43 (2.4) Debt Equity Ratio Total debt Shareholder's equity Corporate Overview 480 (ii) The Company renewed the loan of 168.48 crore to L&T Sapura Shipping Private Limited, a joint venture, as the vessel owned by it was under major repairs since its accident in March 2020 and the joint venture company was unable to generate revenue. The vessel is expected to be re-commissioned in 2022-23. The payment of interest of 3.50 crore on the Company's bridge loan, for repairs of the vessel, to the joint venture company, is overdue and would be settled out of insurance claim proceeds. (i) The Company renewed the loan of 24.66 crore to Hi-Tech Rock Product & Aggregates Limited, a subsidiary, as its business was affected majorly due to an inverted duty structure. The subsidiary company has initiated measures to become more cost competitive including redressal of the inverted duty structure through various forums. Alert Infraprojects Private Limited Accounts Payables Verified the revenue based on the hours charged on the projects and approved per hour rate. Considered the appropriateness of disclosures in relation to revenue recognition. 0.01 0.01 4 IS Earth Movers Private Limited Accounts Payables ΝΑ [1] _ [1] 5 (times) Victor Properties private Limited struck off company ΝΑ _ [1] _[1] 6 Kothari Intergroup Limited Shares held by struck off company ΝΑ _ [1] [1] [1] Less than 1 Lakhs. (b) Notes with respect to remarks in CARO Report: Shares held by 0.30 0.40 (23.7) Trade Payables Purchases [3] Average trade Turnover Ratio payables 1.89 1.73 9.6 Net Capital Turnover Revenue from operations Ratio Average working capital 2.93 7.7 3.52 Net Profit Ratio (%) Profit for the year after tax Revenue from operations 7.80% 13.52% Previous period included gain (42.3) on E&A business transfer. Return on Capital Profit after tax + Finance Capital employed [4] Employed (%) Cost (net off tax shield on Previous period included gain on E&A business transfer. (16.8) 3 2.46 receivables Debt Service Coverage Ratio Earnings available for debt Debt service [2] service [1] Previous period included higher repayment of NCDs on (times) 6.49 1.82 Return on Equity Profit for the year after tax Average Ratio (%) shareholders equity 2.65 12.2% 257.3 maturity Previous period included gain (40.5) on E&A business transfer. Inventory Turnover Ratio Cost of goods sold Average inventory NA [7] NA [7] ΝΑ Trade Receivables Revenue from operations Average gross trade Turnover Ratio 20.5% Finance Cost) _ [1] ΝΑ 154.87 4.51 [2] 129.54 154.87 135.68 159.94 (a) Balance sheet 5.63[1] 1.62[2] (b) Statement of Profit and Loss 130.05 158.32 (v) Excess spend shown as asset in previous year charged to Statement of Profit and Loss on its utilisation 1.62 (iv b)+(v) Total amount shown in Statement of Profit and Loss 131.67 158.32[3] i. Refer Annexure C to the Board Report for the nature of CSR activities of the Company. ii. Amount spent on CSR during the year 2021-22 includes contribution to PM CARES Fund NIL (previous year: 3.24 crore). [1] Total amount spent in excess of mandatory requirement for FY 21-22 and available for set off in succeeding financial years is * 6.14 crore (including the amount for which no asset is created). [2] Total amount spent in excess of mandatory requirement for FY 20-21 was 5.07 crore. The amount available for set off in succeeding financial years was 4.51 crore (including the amount for which no asset was created). 134.05 2020-21 2021-22 crore (iv) (iii) (i)-(ii) Spend obligation Excess spend of previous year utilised Required to be spent Particulars (ii) (i) Sr. No. Disclosure related to Corporate Social Responsibility (CSR): NOTE [60] The impairment was recognised considering the existing business operations and the outlook for the future performance. The present value of estimated future cash flows of the business (value-in-use) was considered as a recoverable amount (discount rates used 11.90% to 12.75%). For power development business, in addition to value-in-use, part of the recoverable value was based on the fair value determined based on benchmark multiple method. (ii) Impairment of investments in the power development business 1415.00 crore. [3] Includes CSR expense of discontinued operations * 0.83 crore. Impairment towards funded exposure of 1467.38 crore offset by interest income of 78.58 crore and provision towards constructive obligation to fund future losses ₹ 14.85 crore in the heavy forgings joint venture. (ii) Gain of 138.69 crore on transfer of NxT digital business to Mindtree Limited, a subsidiary, with effect from July 1, 2021. (i) LARSEN & TOUBRO Exceptional items (net of tax) for 2021-22 includes the following: NOTE [59] Notes forming part of the Financial Statements (contd.) Statutory Financial Reports Statements Discussion and Analysis Report Integrated Management Corporate Overview Gain of 128.60 crore on divestment of stake in L&T Uttaranchal Hydro Power Limited, a subsidiary on August 30, 2021. Exceptional items (net of tax) for 2020-21 included the following: 479 Integrated Annual Report 2021-22 Notes forming part of the Financial Statements 0.12 0.19 NOTE [62] Contribution to political parties during the year 2021-22 is Nil (previous year: Nil). NOTE [63] (a) Balance outstanding with struck off companies: crore Nature of S. No. Name of the Struck off Company Relationship with the struck off Balance outstanding For reimbursement of expenses Transaction as at 31-3-2022 Balance outstanding as at 31-3-2021 1 Walls Infra Solution Private Limited Accounts Payables ΝΑ -[1] [1] 2 Avn Green Technologies Private Limited Accounts Payables company _[1] e. 1.16 Notes forming part of the Financial Statements (contd.) NOTE [61] Auditors' remuneration (excluding GST): Sr. No. Particulars crore 2021-22 2020-21 a. Paid as Auditor (i) Statutory audit fees 2.75 1.43 2.45 Limited review of standalone and consolidated financial statements on a quarterly basis 2.49 2.10 b. For Taxation matters 0.76 0.74 C. For Company law matters 0.50 d. For Other services including certification work (ii) 10.32% ΝΑ (35.3) • As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. Auditor's Responsibility for the Audit of the Consolidated Financial Statements The respective Boards of Directors of the companies included in the Group and of its associates and joint ventures are also responsible for overseeing the financial reporting process of the Group and of its associates and joint ventures. In preparing the consolidated financial statements, the respective Boards of Directors of the companies included in the Group and of its associates and joint ventures are responsible for assessing the ability of the respective entities to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the respective Boards of Directors either intends to liquidate their respective entities or to cease operations, or has no realistic alternative but to do so. The respective Boards of Directors of the companies included in the Group and of its associates and joint ventures are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group and its associates and its joint ventures and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated financial statements by the Directors of the Parent Company, as aforesaid. The Parent Company's Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these consolidated financial statements that give a true and fair view of the consolidated financial position, consolidated financial performance including other comprehensive income, consolidated cash flows and consolidated changes in equity of the Group including its associates and joint ventures in accordance with Ind AS and other accounting principles generally accepted in India. Management's Responsibility for the Consolidated Financial Statements If based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. In connection with our audit of the consolidated financial statements, our responsibility is to read the other information, compare with the financial statements of the joint operations, subsidiaries, joint ventures and associates audited by the other auditors, to the extent it relates to these entities and, in doing so, place reliance on the work of the other auditors and consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated. Other information so far as it relates to the joint operations, subsidiaries, joint ventures and associates, is traced from their financial statements audited by the other auditors. Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. The Parent Company's Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Board's Report including Annexures to Board's Report, Business Responsibility Report, Corporate Governance and Shareholder's Information, but does not include the consolidated financial statements, standalone financial statements and our auditor's report thereon. Information Other than the Financial Statements and Auditor's Report Thereon Evaluated the appropriateness of key assumptions considered, including discount rate, growth rate, etc. considering the historical accuracy of the Company's estimates in the prior periods, consultations with internal specialists and comparison of the assumptions with public data wherever available. C. Compared the actual revenues and cash flows generated by the subsidiaries during the year as to the projections and estimates considered in the previous year; and b. Conducted discussions with component personnel to identify factors, if any, that should be taken into account in the analysis; a. Obtained the investment valuations (prepared by Management or as carried out by Management's external valuation specialist) pertaining to such subsidiaries and performed the following procedures; Impairment of Toll Collection Rights of certain operating projects who have incurred continuous losses and/or are undergoing restructuring due to continuous losses for a period more than 5 years. Auditors' Report on Consolidated Financial Statements Integrated Annual Report 2021-22 487 Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. 488 Obtained appropriate evidence based on the circumstances to conclude whether the rate charged per man hours on projects were appropriate; and Obtained appropriate evidence based on the circumstances to conclude whether the hours charged on projects were appropriate; Reviewed contracts terms to determine the transaction price including any variable consideration to determine the appropriate transaction price for computing revenue and to test the basis of estimation of the variable consideration; Samples in respect of revenue recorded for time and material contracts were tested through a review of approved time sheets including customer acceptances, subsequent invoicing and historical trend of collections and disputes; 485 Integrated Annual Report 2021-22 Auditors' Report on Consolidated Financial Statements Accuracy of recognition, measurement, presentation and disclosures of revenue and other related balances in view of the principles laid down under Ind AS 115 "Revenue from Contracts with Customers” in respect of component Larsen & Toubro Infotech Limited e. f. g. In respect of samples relating to fixed price contracts, progress towards satisfaction of performance obligation used to compute recorded revenue was verified with actual and estimated efforts from the time recording and contracting systems. We also tested the access and change management controls relating to these systems; Performed analytical procedures for reasonableness of revenue disclosed by type and service offerings; and Reviewed the collation of information and the logic of the report generated from the management system used to prepare the disclosure relating to the periods over which the remaining performance obligations will be satisfied after the Balance Sheet date. Evaluated the design and implementation of the relevant controls and the operating effectiveness of such internal controls which inter-alia includes the completeness and accuracy of the input data considered, reasonableness of assumptions considered in determining the future projections and the assumptions considered in preparing the impairment calculations. Revenue recognition in respect of component L&T Technology Services Limited Principal Audit Procedures The Group is in the business of providing technology and engineering services to third parties. The Group is having two models for the purpose of recognition of revenue from contracts for services rendered, which are time and material contracts and fixed price contracts. Refer to Note [1] (II)(i) to the Consolidated Financial Statements. The component's auditors (being other firms of chartered accountants) have performed the following audit procedures: • • Ensured that revenue recognition method applied was appropriate based on the terms of the agreement with the customer; obtained an understanding of the processes and tested relevant controls, which impact the revenue recognition; For time and material-based contracts: a. b. C. Key audit matter description • The component's auditors (being other firms of chartered accountants) have performed the following audit procedures: Refer to Note No. [1] (II) (o) to the Consolidated Financial Statements In addition to the output of the ECL models, macroeconomic overlays and adjustments are recognised by the Company in order to align historic LGD estimates with the current collection and recovery practices. Refer to Note [1] (II) (r)(i)(D) to the Consolidated Financial Statements. C. Principal Audit Procedures Measurement of loan assets for financial services segment LARSEN & TOUBRO Discussion and Analysis Report Statements Statutory Financial Reports Integrated Management Corporate Overview 486 The component's auditors (being other firms of chartered accountants) have performed the following audit procedures: b. The key areas where the component auditors' have identified greater levels of management judgement and therefore increased levels of audit focus in the Company's estimation of ECLs are: As part of risk assessment, component auditors' have determined that the allowance for ECL and fair valuation on loan assets has a high degree of estimation uncertainty, with a potential range of reasonable outcomes for the financial statements. Significant judgement is used in classifying these loan assets and applying appropriate measurement principles. The allowance for expected credit losses ("ECL") and fair valuation on such loan assets are critical estimates involving significant level of management judgement. Measurement of loan assets for financial services segment Key audit matter description Obtained appropriate evidence based on the circumstances to conclude whether the proportion of completion of projects was appropriate. e. Verified the revenue based on the stage of completion of the projects; and d. C. Evaluated management's estimates and assumptions in recognition of the revenue; 15.94% Agreed the total project revenue estimate with customer contracts agreements including amendments as appropriate; a. a. Each borrower is classified into Stage 1 to 3 based on the objective criteria of Day Past Due (DPD) status as of the reporting date and other loss indicators, as applicable. Such classification by borrower is done across all facilities provided to the borrower, i.e. maximum of the DPDs among the facilities ["Max DPD"]. Inherently, judgment is involved in the use models to estimate ECL which includes determining Exposures at Default ("EAD"), Probabilities of Default ("PD") and Loss Given Default ("LGD"). The PD and the LGD are the key drivers of estimation complexity and as a result are considered the most significant judgments in the Company's modelling approach. d. • • Due to the multitude of factors and assumptions involved in determining the forecasted revenues/cash flows and discount rate in the projection period, Significant judgments are required to estimate the recoverable values. Any adverse changes to these assumptions could result into reduction in the fair value determined resulting in a potential impairment to be recognised The Group has carried out detailed evaluations considering various factors and concluded that the carrying value of the toll collection rights are good and recoverable. Toll collection rights obtained in consideration for rendering construction services, represent the right to collect toll revenue during the concession period in respect of Build-Operate-Transfer ("BOT") and Design-Build-Operate- Transfer ("DBOT") projects. Toll collection rights are capitalised as intangible assets upon completion of the project at the cumulative construction costs plus the present value of obligation towards negative grants and additional concession fee payable to National Highways Authority of India ("NHAI")/State Authorities, if any. Principal Audit Procedures Key audit matter description Impairment of Toll Collection Rights of certain operating projects who have incurred continuous losses and/or are undergoing restructuring due to continuous losses for a period more than 5 years. assessed the disclosures made in relation to the ECL allowance and fair valuation to confirm compliance with Ind AS provisions. evaluated the methodology used for computation of the fair value of loans; and • evaluated the methodology used to determine macroeconomic overlays and adjustments to the output of the ECL model; evaluated the reasonableness of applicable assumptions, including LGD; tested the factual accuracy of information such as ratings and period of default and other related information used in estimating the PD; • tested appropriateness of staging of borrowers based on DPD and other loss indicators, as applicable; • Performed the following substantive procedures on sample of loan assets: reconciled the total loans considered for ECL assessment with the books of accounts to ensure the completeness; appropriateness of information used in the estimation of the Probability of Default ("PD") and Loss given Default ("LGD") for the different stages depending on the nature of the portfolio. completeness and accuracy of the Exposure at Default ("EAD") and the classification thereof into stages consistent with the definitions applied in accordance with the policy approved by the Board of Directors; • b. Audit procedures relating to the allowance for ECL and fair valuation included the following, among others: Performed end-to-end process walkthroughs to identify the controls used in the impairment loss allowance processes. Tested the design and effectiveness of relevant internal controls, including the general IT controls relevant to the impairment loss allowance process, as detailed below: a. Confirmed that adjustments to the output of the ECL model is consistent with the documented rationale and basis for such adjustments which has been approved by the Audit Committee of the Board of Directors. Verified the methodology adopted for computation of ECL and fair valuation for assessing and measuring lending exposures. Examined the policies approved by the Board of Directors of the Company that articulate the Company's business model for managing its financial assets to achieve its business objectives. • C. b. Assessed the reliability of management's estimates by comparing actual results of delivered projects to previous estimates; a. Read, analysed and identified the distinct performance obligations in these contracts; Financial LARSEN & TOUBRO Overview Discussion and Analysis Report Reports Statements DELOITTE HASKINS & SELLS LLP Chartered Accountants One International Center Tower 3, 32nd Floor, Senapati Bapat Marg Elphinstone Road (West) Mumbai - 400 013 Maharashtra, India Statutory INDEPENDENT AUDITORS' REPORT LARSEN & TOUBRO LIMITED Report on the Audit of the Consolidated Financial Statements Opinion We have audited the accompanying Consolidated Financial Statements of Larsen & Toubro Limited (the "Parent") and its subsidiaries, (the Parent and its subsidiaries together referred to as the "Group") which includes 35 joint operations of the Group accounted on proportionate basis and the Group's share of profit in its associates and joint ventures, which comprise the Consolidated Balance Sheet as at March 31, 2022, and the Consolidated Statement of Profit and Loss (including Other Comprehensive Income), the Consolidated Statement of Cash Flows and the Consolidated Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information. In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of reports of the other auditors on separate financial information of the joint operations, subsidiaries, associates and joint ventures referred to in the Other Matters section below, the aforesaid consolidated financial statements give the information required by the Companies Act, 2013 (the "Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended ("Ind AS"), and other accounting principles generally accepted in India, of the consolidated state of affairs of the Group as at March 31, 2022, and their consolidated profit, their consolidated total comprehensive income, their consolidated cash flows and their consolidated changes in equity for the year ended on that date. Basis for Opinion We conducted our audit of the consolidated financial statements in accordance with the Standards on Auditing specified under section 143 (10) of the Act ("SA"s). Our responsibilities under those Standards are further described in the Auditor's Responsibility for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group, its associates and joint ventures in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India ("ICAI") together with the ethical requirements that are relevant to our audit of the consolidated financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI's Code of Ethics. We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in the Other Matters section below, is sufficient and appropriate to provide a basis for our audit opinion on the consolidated financial statements. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current financial year. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report. Revenue recognition - accounting for construction contracts Key audit matter description There are significant accounting judgements in estimating revenue to be recognised on contracts with customers, including estimation of costs to complete. The Group recognizes revenue on the basis of stage of completion in proportion of the contract costs incurred at balance sheet date, relative to the total estimated costs of the contract at completion. The recognition of revenue is therefore dependent on estimates in relation to total estimated costs of each such contract. TO THE MEMBERS OF Significant judgements are involved in determining the expected losses, when such losses become probable based on the expected total contract cost. Cost contingencies are included in these estimates to take into account specific risks of uncertainties or disputed claims against the Group, arising within each contract. These contingencies are reviewed by the Management on a regular basis throughout the life of the contract and adjusted where appropriate. The revenue on contracts may also include variable consideration (variations and claims). Variable consideration is recognised when the recovery of such consideration is highly probable. Integrated Corporate b. Compared such performance obligations with those identified and recorded by the Company; Return on Treasury income [5] Investment (%) Average investment [6] 6.72% 8.56% (21.4) [1] Profit before interest, tax and exceptional items from continuing operations [2] [3] Management Interest expense + Principal repayments made during the period for long term borrowings+ Cash flow on settlement of derivatives contracts related to borrowings Includes Manufacturing,construction and operating expenses [5] Includes profit/loss on sale and fair valuation of current investments, dividend on current investment and interest income [6] Includes current investment, inter corporate deposits and fixed deposits [7] Not material considering the size and the nature of operations of the Company NOTE [65] (a) For better understanding of the Company's performance, line items have been added to show Profit after tax from continuing operations separately from exceptional items. This is in line with guidance available in Schedule III to the Act. (b) Figures for the previous year have been regrouped/reclassified to conform to the figures of the current year. 481 Consolidated Financial Statements [4] Average Equity and average loan funds (including interest bearing advances) Refer to Note No. [1] (II)(i) to the Consolidated Financial Statements Actual spent Integrated Annual Report 2021-22 Discussion and Analysis Report LARSEN & TOUBRO Impairment on Assets - Metro Rail Cash Generating Unit Key audit matter description Principal Audit Procedures As per the requirements of Ind AS 36, the Group assesses at the end of every reporting period, whether there is any indication that cash generating unit (CGU) may be impaired. If any such indication exists, the Group estimates the recoverable amount of the CGU. The determination of recoverable amount being value-in-use involves significant estimates, assumptions and judgements of the long-term financial projections. The Group is carrying Intangible asset, Property Plant & Equipment and Investment property relating to Metro Rail CGU (comprising of Hyderabad Metro operations). During the year, as the indication exists, the Group has reassessed its impairment assessment with respect to the above CGU. Impairment of assets is a key audit matter considering the significance of the carrying value, estimations and the significant judgement involved in impairment assessment. Refer to Note 1 (II)(o) to the Consolidated Financial Statements Our audit procedures related to forecasts of future traffic, revenue, free cash flows generated, selection of the method for estimating recoverable value and discount rate for the entity included the following: • • Financial Statements • We evaluated the reasons for variation between the management's previous estimate of traffic, revenue and cash flow forecasts and obtained our understanding of the manner in which revised forecasts were obtained; With the assistance of our fair value specialists who have specialised skill and knowledge, we evaluated the reasonableness of the methodology and discount rate by testing the source information underlying the determination of the discount rate and mathematical accuracy of the calculations; and We performed a sensitivity analysis on the discount rate to assess the extent of change in discount rate that would be required for the CGU to be impaired. Accuracy of recognition, measurement, presentation and disclosures of revenue and other related balances in view of the principles laid down under Ind AS 115 "Revenue from Contracts with Customers" in respect of component Larsen & Toubro Infotech Limited Key audit matter description Principal Audit Procedures The application of the revenue accounting standard (Ind AS 115) involves significant judgements/material estimates relating to identification of distinct performance obligations, determination of transaction price of the identified performance obligations, the appropriateness of the basis used to measure revenue recognised over a period. Additionally, the standard requires disclosures, which involve collation of information in respect of disaggregated revenue, and periods over which the remaining performance obligations will be satisfied subsequent to the Balance Sheet date. The Group has also assessed (i) the possibility of constraints to render services which may require revision of estimations of costs to complete the contract because of additional efforts, (ii) onerous obligations, (iii) penalties relating to breaches of service level agreements and (iv) termination or deferment of contracts by customers. Refer to Note No. [1] (II)(i) to the Consolidated Financial Statements. The component's auditors (being other firms of chartered accountants) have performed the following audit procedures: Evaluated the design and operating effectiveness of internal controls relating to the application of revenue accounting standard specifically, those relating to identification of the distinct performance obligations and determination of transaction price. Procedures performed included enquiry and observation, reperformance and inspection of evidence in respect of operation of these controls. Tested the relevant information technology systems' access and change management controls relating to contracts and related information used in recording and disclosing revenue in accordance with the revenue accounting standard. 483 We tested the effectiveness of controls over forecasts of future traffic, revenue, free cash flows and selection of the discount rate; Reports Selected a sample of continuing and new contracts and performed the following procedures: Integrated Auditors' Report on Consolidated Financial Statements Revenue recognition - accounting for construction contracts Principal Audit Procedures description Our audit procedures related to the (1) identification of distinct performance obligations, (2) evaluation of the process for estimation of costs to complete (3) evaluation of implications of change orders on costs estimates of costs to complete and revenue and (4) evaluation of any variable consideration included the following: We tested the effectiveness of controls relating to the (a) evaluation of performance obligations and identification of those that are distinct; (b) estimation of costs to complete each of the performance obligations including the contingencies in respect thereof, as work progresses and the impact thereon as a consequence of change orders; (c) the impact of change orders on the transaction price of the related contracts; and (d) evaluation of the impact of variable consideration on the transaction price. We selected a sample of contracts with customers and performed the following procedures: Statutory b. C. d. Obtained and read contract documents for each selection, change orders, and other documents that were part of the agreement; Identified significant terms and deliverables in the contract to assess management's conclusions regarding the (i) identification of distinct performance obligations; (ii) changes to costs to complete as work progresses and as a consequence of change orders; (iii) the impact of change orders on the transaction price; and (iv) the evaluation of the adjustment to the transaction price on account of variable consideration; a. Tested the estimate for consistency with the status of delivery of milestones and customer acceptance to identify possible delays in achieving milestones, which require changes in estimated costs or efforts to complete the remaining performance obligation. Compared costs incurred with Group's estimates of costs incurred to date to identify significant variations and evaluated whether those variations have been considered appropriately in estimating the remaining costs to complete the contract; and Corporate Overview 484 In respect of the sample contracts, we compared previous estimates relating to recoverability of contract assets and compared it with actual collections during the year. We selected a sample of contracts assets with corresponding trade receivables that were overdue and evaluated the basis for management's conclusions regarding the (1) evidence supporting the execution of work for which the contract assets were recognised; (2) reasons for the delays in recovery of invoices and the basis on which recoverability of the contract assets was assessed; (3) impact on the allowance for expected credit losses; and (4) adjusting events after the reporting date i.e. March 31, 2022 and the date when the financial statements are approved by the Board of Directors and the impact thereof on the carrying amount of the related contract assets. Management • Our audit procedures related to the (1) evaluation of evidence supporting the execution of work; (2) evaluation of recoverability of the overdue amounts including the impact on the expected credit loss allowance; and (3) assessment of adjusting events after the reporting date i.e. March 31, 2022 and the date when the financial statements are approved by the Parent's Board of Directors included the following: Of which amount recognised in: Principal Audit Procedures Measurement of contract assets in respect of overdue milestones and receivables in respect of overdue invoices. Key audit matter The Group, in its contract with customers, promises to transfer distinct services to its customers, which may be rendered in the form of engineering, procurement, and construction ("EPC") services through design-build contracts, and other forms of construction contracts. The recognition of revenue is based on contractual terms, which could be based on agreed unit price or lump-sum revenue arrangements. At each reporting date, revenue is accrued for costs incurred against work performed that may not have been invoiced. Identifying whether the Group's performance has resulted in a service that would be billable and collectable where the works carried out have not been acknowledged by customers as of the reporting date, or in the case of certain Defence contracts, where the evidence of work carried out and cost incurred are covered by confidentiality arrangements, involves a significant amount of judgement. Assessing the recoverability of contract assets related to overdue milestones and amounts overdue against invoices raised which have remained unsettled for a significantly long period after the end of the contractual credit period also involves a significant amount of judgment. Refer to Note No. [1](II)(i), [1] (II) (r) to the Consolidated Financial Statements. We tested the effectiveness of controls relating to the (a) gathering and evaluation of evidence supporting the execution of work; (b) evaluation of recoverability of the overdue amounts including the impact on the expected credit loss allowance; and (c) assessment of adjusting events after the reporting date i.e. March 31, 2022 and the date when the financial statements are approved by the Board of Directors and the impact thereof on the carrying amount of the related contract assets. Measurement of contract assets in respect of overdue milestones and receivables in respect of overdue invoices. DISTRIBUTION POWER TRANSMISSION & FY 2022-23 to 7.5 trillion, which is 24.4% higher than * 6.0 trillion in FY 2021-22 revised estimate. The above initiatives by Gol will benefit the business in the upcoming years. In terms of infrastructure investments, the Budget has factored in a significant increase in capital expenditure in Considering Mission 2070 Net Zero India, the country is to focus on green construction technologies in future infrastructure projects. Carbon-efficient design (modular design), adoption of low-carbon construction processes (low emission materials such as fly ash), enforcement of building energy codes are few initiatives suggested by World Economic Forum in the Mission 2070: A Green New Deal for a Net Zero India white paper. The thrust on renewable energy is expected to increase in the coming years, providing the necessary boost for sustainable infrastructure such as Metros, Hydel & Nuclear businesses. In India, metro networks operate only in 13 cities and to increase better urban mobility and metro being one of the low carbon emission transport systems, the Government is keen to expand metro services. It is also considering the implementation of Mass Transit Systems such as Metro/ Metro Lite / Metro Neo / Personal Rapid Transit System in Tier 1 and Tier 2 cities keeping in view the growing importance of the transport sector in the city's overall development. Medigadda Barrage project in Telangana bagged Formwork Award 2020 for best use of formwork in civil engineering from the Association of Consulting Civil Engineers, India Outlook 500kV Bang Saphan 2 to Surat Thani 2 Transmission Line • The Nuclear business is expected to continue its growth along with continued focus on 10 Pressurised Heavy Water Reactor (PHWR) projects. The growing energy demand in India will make nuclear power a major source of renewable power, as fossil fuels are scarce in the country. Overview The fast-expanding Africa business unit has executed several landmark projects in Algeria, Egypt, Morocco, Kenya, Ethiopia, Tanzania, Uganda, Botswana, Mozambique, and Malawi. It has made further inroads into Western & Central Africa with breakthrough projects in Ghana and Cameroon. With the regional offices strategically located in Nairobi, Cairo, Johannesburg & Accra to serve the vast continent, the business has earned a coveted position with a sizeable market share in the addressable segment. The domestic business is organised based on offerings and caters to various T&D utilities, developers and infrastructure customers such as metros, airports etc. The Substation Business Unit provides turnkey solutions for Extra High Voltage (EHV) air insulated / gas insulated substations, Flexible AC Transmission Systems (FACTS), Digital Substation related solutions and EHV cable systems. 45 Integrated Annual Report 2021-22 400 KV GIS Substation, Chennai, Tamil Nadu 132-11 kV Umm Besher and 132-11 kV Wakrah-4 Substation The Transmission Line Business Unit provides complete EPC solutions for overhead transmission lines. It is well integrated with the digitally-driven, green tower manufacturing units at Puducherry, Pithampur and Kancheepuram, which have a combined capacity to produce more than 1.5 lakh tonnes of tower components per annum. The Kancheepuram facility also houses the world- renowned Tower Testing and Research Station. The Power Distribution Business Unit has been at the forefront of taking electricity to all by providing a range of EPC services related to urban / rural electrification, augmenting, reforming, and strengthening of high voltage and low voltage distribution networks, power quality improvement works and advanced distribution management solutions. The Renewables arm of Power T&D business is a single-stop EPC service provider globally for GW-scale Solar PV, Energy Storage, Microgrid and Hybrid renewable projects. There are very few players with such strong experience and expertise in different module technologies, module mounting structures and storage types. The business unit has accumulated in-depth engineering and construction know-how to execute a vast range of renewable projects, be it hybrid, floating or linear, with the best suited technologies for terrain type and tracking. The container integration facility at Kancheepuram augments the capabilities of the business with an annual capacity to integrate 400 MWh of battery energy storage system with associated intelligent management and control systems. The initiatives in emerging areas such as Digital Solutions and Electric Vehicle Charging Infrastructure have made initial wins and are on track to ensure that the business is future ready. The international units of the business provide the entire spectrum of Power T&D related services in Middle East, Africa and ASEAN regions. Over the past three decades, the Middle East business unit has earned a strong reputation among the utilities and oil companies in Saudi Arabia, UAE, Oman, Qatar, Kuwait, and Bahrain, having executed several marquee projects. It enjoys an enviable track record and garners significant share of T&D projects awarded every year. L&T's Power Transmission & Distribution business vertical a leading EPC player, providing end-to-end solutions for transmission / distribution infrastructure, clean electricity starting from Solar PV plant EPC to last mile electrification. It offers integrated EPC offerings including Ground Mounted / Floating Solar Photovoltaic Plants, Battery Energy Storage Systems (BESS), Substations and Transmission Lines up to 1200 kV, Underground Cable Systems, Distribution Infrastructure both at Medium & Low Voltage levels, and related Digital Solutions. With 15 regional offices spread across the SAARC, Middle East, Africa, ASEAN and CIS regions, the Power T&D business has projects being executed in 30 countries. Statements . Financial In the ASEAN region, L&T is an established international T&D player to reckon with, holding a portfolio of prestigious projects spread across Thailand, Malaysia, and Philippines. The Government is focusing on building new capacities and upgrading existing defence infrastructure. This will lead to creation of opportunities in various defence infrastructure projects including naval infrastructure facilities. Major Achievements Orders won: • Chennai Metro Rail Ltd. Phase 2 Packages - » >>> » UG TU 02 for construction of approx. 12 km underground twin tunnel between Kellys and Taramani Road C5 ECV-02 for construction of approx. 12.4 km of elevated viaduct and 12 elevated stations between CMBT metro station and Puzhuthivakkam metro station CP10 ECV-03 for construction of approx. 10.2 km of elevated viaduct and 11 elevated stations from Assissi Nagar to CMBT Metro station • Patna Metro PC03 for construction of underground twin tunnel of 6.3 km length each and 6 stations between Rajendranagar and Akashvani • Delhi Metro Rail Corporation Package DC 09 for construction of twin TBM tunnel of 5 km length each and 4 underground stations between Chattarpur and Neb Sarai High Speed Rail Package C5 for construction of civil and building works for double line high speed rail involving Vadodara station between MAHSR 393.7 km and MAHSR 401.9 km in the state of Gujarat Key achievements: • Bangalore Metro RT-03 package achieved its second TBM breakthrough on 13th October 2021 after covering 866 m High Speed Rail Package 4 connecting Zaroli village - Maharashtra - Gujarat border to Vadodara erected the first 40 m full span box girder (weighing 970 MT) on 25th November 2021 at the Navsari casting yard • RVNL Package 2 connecting Shivpuri to Byasi in Uttarakhand completed 10 km of tunnelling using the new Austrian tunnelling method (NATM) technology in about twenty months (out of total 26.6 km) • India's largest TBM (MAVALA having 12.19 m dia.) at Mumbai Coastal Road Project, Package-4 achieved its first breakthrough on 10th January 2022, covering a total distance of 2.1 km • Bangalore Metro Rail Project, RT-02 package has achieved its First Tunnel Boring Machine (TBM) Breakthrough on 6th January 2022 at MG Road Station 44 Corporate Overview Management Integrated Discussion and Analysis Report Statutory Reports LARSEN & TOUBRO In the Maritime India Summit - 2021, the Government came up with the Maritime Vision 2030, which envisages the development of three mega ports of greater than 300 MTPA cargo handling capacity. Debottlenecking of existing port facilities is required to accommodate the increased cargo handling and trading sector. Also, the Government is keen on strengthening and modernising naval bases across the country. . Business Environment Integrated Annual Report 2021-22 Large scale solar cum storage project in Andaman •230 kV GIS in Nepal • A large Solar-cum-Energy Storage Project with 57 MWhr storage capacity, in Gujarat • STATCOM / Shunt Reactor / Dynamic Reactive Power Compensation orders in Saudi Arabia and UAE • 400 kV TLs in Cameroon, Tanzania, and the Mozambique - Malawi 400 kV Interconnector • 225 kV TL in Guinea • 500 kV Castillejos TL - a major transmission line project in Philippines Projects completed and commissioned: • Two 230 kV Gas Insulated Substations in Bengaluru • Power Supply Systems for Mumbai Metro Line 3 & Line 7 • 1250+ km of Transmission Lines completed in Madhya Pradesh, Kerala, etc. • Distribution Infrastructure improved by adding 2400+ RMUs and 1450 km of cable conversion in Northern part of India • 26 substations and 790 km of overhead / underground transmission corridors in the Middle East, including a 400 kV Substation in UAE and one of the longest 380 kV Overhead lines in GCC region • 275 kV Matang Substation in Sarawak, Malaysia Significant Initiatives • Advanced resource management, BIM integration and forecasting abilities were added to the mature project management digital ecosystem PRAPTI / BODHI. • Seamless integration of customer relationship and enterprise risk management modules, the migration to an advanced version of enterprise portal with added capabilities and fortified cybersecurity were some other milestones. Outlook Various measures proposed in the General Instructions on Procurement and Project Management guidelines by Ministry of Finance, Government of India may prove to be gamechangers if these get implemented by Central Public Sector Enterprises. The Revamped Distribution Sector scheme gaining traction with budget allocation and ministerial push, several packages are expected to get finalized in next year, especially the infrastructure works meant for Aggregate Technical & Commercial (AT&C) loss reduction. The Himalayan terrain being quite familiar for the business, the upcoming Leh Solar evacuation related prospects may offer substantial prospects, in addition to Green Energy Corridor Il and intrastate strengthening packages. The evacuation arrangements and electrics for nuclear power plants being developed in fleet mode is another good opportunity. Also, the power system packages of metro rail projects in major cities provide good substation and cabling opportunities. With oil prices remaining high due to geo-political tensions, the Middle East region now provides stable opportunities, though the individual countries are likely to witness cyclical variations due to various factors including demand growth. Challenges faced by the EPC players due to slow ramp-up of domestic module manufacturing capacity, price uncertainty coupled with aggressive tariffs is further aggravated by 48 47 Larsen & Toubro Saudi Arabia LLC (LTSA), a wholly- owned subsidiary, provides engineering, construction, and contracting services in the sphere of transmission & distribution in the Kingdom of Saudi Arabia. ⚫ EHV Cable System package in Bangladesh Switchyard package in Gorakhpur With the consolidation of ongoing distribution schemes under a new, yet to be operationalised Revamped Distribution Sector Scheme, the distribution jobs were limited to few packages. However, the business emerged successful 46 Corporate Overview Management Discussion and Analysis Integrated Statutory Report Financial LARSEN & TOUBRO Reports Statements 500 kV HVDC Transmission Line, Kenya in packages where the scope included advanced SCADA systems and Digital Solutions. The Substation and Transmission Line orders from state utilities were limited to few states like Karnataka and Rajasthan. The delays in Tariff Based Competitive Bidding for interstate T&D networks led to shrinking of orders from Power Grid Corporation and other developers. On the back of ongoing transmission line projects in Bangladesh, the business has made further inroads with Substation and EHV cabling orders. With the successful execution of Koshi corridor associated substations and transmission lines, Nepal also offers good T&D prospects. The customer-end delays in finalisation of funding arrangements and fulfilling bidding/contractual arrangements for Optical Fibre Cabling (OFC) projects in southern parts of the country led to lacklustre performance on the OFC front. The next phase of Bharat Net projects is yet to take off with PPP mode tenders receiving muted response. The Renewables arm of the business has emerged successful in more than 1 GWp projects in the western region of the country, from Central and State Public Sector Enterprises. This is in line with rising potential for hybrid plants with wind and BESS components. Current supply constraints of solar modules and batteries are envisaged to ease out in the medium to long term with the push given by the Government through the Production Linked Incentive Scheme. The opportunities for providing Reactive Power Compensation devices like STATCOMs, Static Var Compensators (SVCS), and Reactors have previously been limited only to India. However, such opportunities are on the rise in other operating geographies such as KSA, UAE and Qatar recently. The expansion of the 380 kV network in Saudi Arabia presented sizeable opportunities for Substations and Overhead Lines. A major Oil & Gas project win for the Group provided power system opportunities in the Kingdom. The GW scale renewable energy projects being built in the region gained significant momentum. In Africa, the lower vaccination rates, travel restrictions, internal conflict, etc. etc. has caused a lull in the momentum, with borrowing capacities of countries reduced drastically as per the Debt Service Suspension Initiative. However, the business gained successful entry into West Africa with breakthrough projects in Guinea and Cameroon. Addition of South Africa into the fold is another key milestone. Sustained lockdowns and severe restrictions impacted the order finalisations in the ASEAN region. The FY 2021-22 witnessed several headwinds viz. successive waves of COVID-19, supply chain disruptions worldwide causing unusual increase in commodity / solar module prices besides freight costs. These led not only to delayed order finalisations from the customer's end but also the measured pacing of progress in ongoing projects. Major Achievements Orders won: • 400 kV & 220 kV Substations & Transmission Line in Karnataka • 400 kV Substations & Transmission Line in Rajasthan India's installed nuclear capacity is 6,780 MW which is expected to reach to 22,480 MW by 2031 on completion of projects under construction. At present there are 11 reactors at various stages of construction totaling to 8,700 MW. • Power Supply System for Agra Metro capacity of 5,186 MW are under discussion at various levels for development in the next five years in Jammu & Kashmir. Corporate Overview Bangalore Metro - an underground section Business Environment The business has Engineering Design Centres located at Mumbai, Faridabad, and Chennai. It also has a Competency Development Centre at Kancheepuram and a Workmen Training Centre at Ahmedabad. The Road, Runways & Elevated Corridor Business Group is divided into Roads & Bridges (R&B) Business Unit and Formations & Structure (Railways) Segment (F&S). R&B provides EPC design and build construction services for all types of roads, bridges and elevated corridors including all associated structures, cross-drainage, toll booths, wayside amenities, etc. In the airport sector, the R&B BU is involved in the construction of complete airside infrastructure viz. runways, taxiways, aprons, airfield ground lighting, fuel hydrant systems, etc. The F&S Segment provides design and build construction services of civil works (Earthwork, Earth- retaining structures, Cross drainage, etc.) for all types of Railway projects including Dedicated Freight Corridors, High Speed Rail and Urban Railway Network. The Railways Business Group is recognised as a full range rail system integrator. The SBG has built capabilities in all 3 railway domains including track construction, overhead electrification and signalling & telecommunication. The SBG is further subdivided into Mainline Business Unit (MLBU) and Metro Business Unit (MTBU). MLBU addresses EPC construction works in the domains of civil and trackwork, electrification, system integration for all Mainline Railway Projects, Dedicated Freight Corridors, and Rail Links for Port, Mining & Power Plant facilities etc. MTBU addresses EPC construction works involving ballastless trackwork, electrification and system integration for all Mass Rapid Transit System Projects and Regional Rapid Transit System in India and abroad. Dhaka Metro MRT Line 6 Integrated Annual Report 2021-22 39 L&T's Transportation Infrastructure business is one of the leading contractors in India offering turnkey Design & Build / EPC solutions with single point responsibility for all kinds of transportation infrastructure such as Roads, Bridges, Railways, City Infra, Urban Transit and Airports. The business is broadly divided into two Strategic Business Groups (SBGs), namely, Railways Business Group (RBG) and Roads Runways & Elevated Corridors (RREC). Overview TRANSPORTATION INFRASTRUCTURE With the economy poised to grow in the coming year the business is well placed to benefit from the expected large investments across many sectors. Railway Business Group With manufacturing leaders trying to set their hubs in India, it is expected that the factories sector will get a significant boost. The Solar PV industry which is now under PLI is also expected to generate significant prospects in the future. Warehousing and Logistics are picking up pace. Industrial Chemicals like Paints are gaining significant investments. The Automobile and the Cement industries are also on an uptrend and will lead an increase in the setting up of new manufacturing facilities across the country. The Indian Data Centre Industry is witnessing meteoric growth. A large and growing internet user base coupled with the explosion of data and creation of a conducive atmosphere via the Government's Digital India Mission has transformed India into a fast-growing data centre hub. The State and the Central Governments and a few public sector units are coming up with buildings like the Central Vista, Museums, Statues and Educational Institutions. The awards under National High Speed Rail Corporation Ltd. (NHSRCL) projects are picking up pace and are likely to witness further tendering. The business is also expecting some traction in the development / redevelopment of railway stations across the country. The health sector has garnered significant attention from the Government after the pandemic. The Government has allocated about 64,000 crore for healthcare infrastructure over the next 6 years. Government spending is the biggest growth driver for this segment and the business is expected to focus on major healthcare prospects coming up from the Central Government and the State Governments. The total Health Sector allocation for FY 2021-22 stood at ₹223,846 crore. With 100% FDI allowance for green field airports, it is anticipated that India is set to become the 3rd largest aviation market by 2025. India's aviation industry is expected to witness *35,000 crore (USD 4.99 Bn) investment in the next four years. The Indian Government is planning to invest USD 1.83 bn for development of airport infrastructure along with aviation navigation services by 2026. Outlook Dhaka Metro Statements Reports Report Discussion and Analysis LARSEN & TOUBRO FY 2022-23 is poised to be a very promising year for the Indian housing market, supported by investments either from Government or private players in the Affordable Housing Segment. Increasing urbanisation, growing industrialisation, and the need to connect metros with growth centres has been driving the growth in the Railway sector in the past few years. The pace of infrastructure creation has been at an all-time high with new and innovative means of construction. Most of the projects during the year were awarded on a fragmented basis. As a part of Atmanirbhar Bharat, 2,000 km of network will be brought under Kavach, the indigenous technology for safety and capacity augmentation in FY 2022-23. A new Project Development Cell (PDC) has been created in the Railway Board to increase investments and encourage foreign direct investment. Roads, Runways & Elevated Corridor SBG The budgetary support for the Road and Bridges sector has seen a steady increase of more than 58% over the last 4 years. 18% of the National Infrastructure Pipeline announced by the Government is earmarked for roads & bridges. Projects completed: Bangalore Suburban Rail Project – Corridor 02 from Rail Infrastructure Development Company, Karnataka • • 4 Lane to 6 Lane Ghaziabad to Aligarh Road Project from CUBE Highways • Chennai Peripheral Ring Road Project EPC 02 of section Il from Tamil Nadu Road Infrastructure Development Corporation • Ganga Expressway Group 1, Package A from IRB Infrastructure Developers Ltd. • Third Rail Traction Project: Agra Metro (64 TKM) from Uttar Pradesh Metro Rail Corporation Limited • EPC Overhead Electrification Projects from IRCON • Slab Track Package T3 Package (258 TKM) from National High Speed Rail Corporation Ltd. Major projects received during the year: Orders won: Major Achievements The Airport sector did not see any major traction in the recent year. However, over the last couple of years, the number of projects awarded under the Hybrid Annuity Method is seeing an increase impacting the prospects for pure play EPC players. Ghoshpukur Salsalabari Road Project Statements LARSEN & TOUBRO Financial Integrated Statutory Report Reports Discussion and Analysis Management Corporate Overview 40 Also, in view of the exponential increase in traffic over the years in urban areas, the Government has shifted its focus on developing many new Elevated Corridor / Flyover projects across major cities, with the primary aim of decongesting urban roads and highways. Over the last 7 years, the length of National Highways has gone up by 50% - from 91,287 km (as of April 2014) to 1,46,440 km (as of March 2022). Construction of highways has increased to 39 km / day in 2021-22 from 27 km / day in 2019-20, with an increased focus on the timely delivery of projects. Statutory Financial Integrated Management equipment, the section corresponding to CTP 1 & 2 has been commissioned Discussion and Analysis Integrated Report Statutory Reports Financial LARSEN & TOUBRO Statements The Mumbai Coastal Road Project. L&T is executing Packages 1 and 4. International Front On the international front, while the business continues to focus on neighbouring countries like Bangladesh, it is also strongly looking at entering ASEAN, North and East Africa - regions where the Company already has a presence in the other businesses. HEAVY CIVIL INFRASTRUCTURE Overview The Heavy Civil Infrastructure business is a market leader in EPC projects in core civil infrastructure segments that are crucial to the Indian economy viz. Metro Rail System, High Speed Rail, Nuclear, Hydel & Tunnels, Marine Structures and Defence Infrastructure Facilities. The business has a strong presence in India, Middle East, and Bhutan. With dedicated design and technical centres, competency cells, specialised training centres, digital project management, and a talented pool of employees, the business sustains its leading position. The business is currently involved in the construction of the country's first High Speed Rail corridor connecting Mumbai to Ahmedabad. The latest construction technologies including in-house fabricated Full Span Launching Equipment, Straddle Carrier and Girder Transporter are being used in the marquee project as a part of the Make in India initiative. With an industry leading position in enhancing urban mass rail transit capabilities, the Company is involved in building metro rail systems in nearly all major Indian cities. The nuclear business segment offers turnkey services including seismic qualification, civil, mechanical, electrical, instrumentation and modular construction technology. Its expertise extends to both Pressurised Heavy Water Reactor (PHWR) and Light Water Reactor (LWR) technologies. The Company's Hydel & Tunnels segment is involved in road and railway tunnelling projects, which enhances nation building and offers EPC solutions for complete hydroelectric power projects, large-diameter transport / water tunnels and complex irrigation projects. The Marine Structures Vertical has extensive experience in greenfield ports, shipyard structures and seawater intake systems along the coastlines of India. It specialises in providing state-of-the-art ship lift structures and turnkey EPC solutions. L&T Geostructure, a wholly-owned subsidiary engages in foundation and ground improvement projects. With its expertise in building deep piling and diaphragm walls, multicellular intake wells for river-linking, and marinas with berths and jetties. It has a strong and professional foundation specialised team with knowledge of design, equipment, and methods to execute and supervise sophisticated foundation works. Business Environment The Government is keen to expand metro services to 50 Indian cities to accommodate the growing commuting requirements and for better mobility. With hydel power evolving as an alternate source for grid stability, the Government has taken various steps for the development of hydropower projects in J&K and the North- Eastern states. 21 Hydropower projects with an aggregate 43 Integrated Annual Report 2021-22 204-16 01 Management Rishikesh-Karnaprayag Rail Link Package 2 42 Road & Bridges • Odisha Power Generation Corporation - Fully commissioned 68 km rail connectivity and commercial operations started from Manoharpur Coal Mines to Thermal Power Plant for the OPGC project • Phase 2A of Mauritius Metro Express has been commissioned (Rose Hill to Quatre Bornes) and is in commercial operation since June 2021 • 18 TKM of Kanpur Metro priority section commissioned in Dec 2021 from IIT to Motijheel • Loco Trial for 133 TKM priority section of EDFC CP-204 Mughalsarai to New Bhaupur commenced in Feb 2022 from Kanpur to Sujatpur • Loco Trial for 118 TKM priority section of EDFC MGS- SEBN commenced in Nov 2021 from New Ganjkhwaja to Chiralapathu Station • 4 Lane 11 km Chandigarh-Khadar Elevated Corridor commissioned in June 2021 • 4 Lane 84 km Ghoshpukur-Salsalabari Road Project commissioned in Jul 2021 • 4 Lane 34 km Helwak-Patan-Karad Road Project commissioned in Jul 2021 • 4 Lane 111 km Baharagora-Singhara Road Project commissioned in Aug 2021 • 4 Lane 30 km Karodi-Aurangabad Road Project commissioned in Feb 2022 • Bidkin Industrial Area Development Project commissioned in Apr 2021 41 Integrated Annual Report 2021-22 Mumbai-Nagpur Expressway Outlook Railway Business As per the National Infrastructure Pipeline, investments worth 13.67 trillion are to be made in the railways sector during the period from 2019-20 to 2024-25 to enhance track capacity, improve freight efficiency, augment the speed of trains, enhancing safety and ensuring better connectivity. In FY 2022-23, the national transporter has received the highest ever total plan capex of 2.45 trillion vis-à-vis 2.15 trillion in FY 2021-22. The Indian Railways (IR) has announced multiple projects aimed at capacity augmentation and traffic decongestion in its network. The prospects in next 3 years include New Line 6,000 km (60,000 crore), Doubling / 3rd Line 4,000 km (40,000 crore). Also, through Mission Electrification, IR has completed the highest-ever Railway Electrification of 6,366 km in its history and further IR has commenced upgradation of the existing electrification system to 2x25 kV electrification to facilitate higher speeds (upto 160 km/h), haulage and improved system efficiency for High Density Network (HDN) and Highly Utilised Network (HUN) through Zonal Railways. Civil Packages and System Tenders expected under the four RRTS corridors being implemented by the National Capital Region Transport Corporation (NCRTC). - Further Track and Systems packages are expected to be awarded for the Mumbai – Ahmedabad High Speed Corridor during FY 2022-23. Rapid commissioning of Western & Eastern Freight Corridors will catalyse development of new freight corridors i.e., East Coast, North-South and East-West Corridors. Detailed project reports have been initiated for East Coast (1,114 km) and the East-West (2,328 km) Corridors. In total, Projects worth * 58,500 crore are expected to be finalised in the next 5 years. Systems orders are expected to be finalised across six Metros in FY 2022-23 viz. Chennai Metro Phase 2, Ahmedabad Metro Phase 2, Surat Metro, Indore and Bhopal Metro and Delhi Metro Phase 4. New Metros have been announced in several Tier 2 cities like Gorakhpur, Varanasi, Meerut, Vijayawada, Vizag, Dehradun, Bhubaneswar etc. Expansion of existing Metro Systems in major cities such as Mumbai, Delhi, Bangalore, Chennai, Kolkata is underway. The business outlook for the next 5 years includes 18 new projects (700 km) in the Track and Systems domain. The Government has planned to expand the National Highway network by ~60,000 km by 2025 in major economic corridors, strategic areas, and Elevated Corridor & Flyovers network in major cities such as Delhi, Chennai, Kolkata, Mumbai and Bengaluru, with an investment outlay of 20.33 lakh crore under the National Infrastructure Plan (NIP). While a daily average of constructing 39 km of road per day has been achieved in March 2022, the Government has set up an ambitious target of construction of 25,000 km of national highways in the next fiscal year under the PM Gati Shakti National Master Plan. Corporate Overview • Electrical and Mechanical Works at Western Dedicated Freight Corridor involving 2x25 kV, high rise over head The business has completed the following projects: 3125.70 Net profit after tax from discontinued operations Net profit after tax from continuing operations & discontinued operations Other comprehensive income 10419.24 A Items that will not be reclassified to profit or loss: Equity instruments through Other comprehensive income Income tax (expenses)/income on equity instruments through Other comprehensive income 55.05 4668.96 14.40 4683.36 10790.50 2552.58 8237.92 12921.28 55.05 Gain/(loss) on remeasurements of the net defined benefit plans 105.88 57.40 Income tax (expenses)/income on remeasurements of the net defined benefit plans 45(a) 51(a) Tax expense of discontinued operations Profit before tax from discontinued operations Discontinued operations 4010.82 8224.98 (3693.78) 51(a) 22.77 48.44 (186.20) 22.77 96.93 (137.76) (3556.02) Tax expense on exceptional items: Current tax Deferred tax Exceptional items (net of tax) 48 Net profit after tax from continuing operations 10291.05 Share in profit/(loss) after tax of joint ventures/associates (net) 43(f) 128.19 Profit for the year from continuing operations 10419.24 (25.53) (13.69) B Share in Other comprehensive income of joint ventures/associates (net) Items that will be reclassified to profit or loss: Note 2021-22 2020-21 Brought forward - Other comprehensive income 80.04 139.55 Exchange differences in translating the financial statements of foreign operations 25.58 99.70 Income tax (expenses)/income on exchange differences in translating the financial statements of foreign operations 6.69 (4.42) 32.27 95.28 Effective portion of gains/(losses) on hedging instruments in a cash flow hedge 426.78 1717.14 Income tax (expenses)/income on effective portion of gains/(losses) on hedging instruments in a cash flow hedge crore 4216.61 10194.12 119.70 Consolidated Statement of Profit and Loss for the year ended March 31, 2022 (contd.) Statements 80.35 56.18 43.71 (51.76) Debt instruments through Other comprehensive income (79.51) 123.69 Income tax (expenses)/income on debt instruments through Other comprehensive income 23.02 (31.14) Carried forward - Other comprehensive income (56.49) 80.04 92.55 139.55 496 Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial Reports LARSEN & TOUBRO 3923.39 87.43 4512.09 (295.48) 51(a) a. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Parent Company and its subsidiary companies, associate companies and joint venture companies incorporated in India; iv. iii. 490 Provision has been made in the consolidated financial statements, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts; ii. i. The consolidated financial statements disclose the impact of pending litigations on the consolidated financial position of the Group, its associates and joint ventures; With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us: In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Parent Company to its directors during the year is in accordance with the provisions of section 197 of the Act. With respect to the other matters to be included in the Auditor's Report in accordance with the requirements of section 197(16) of the Act, as amended, With respect to the adequacy of the internal financial controls over financial reporting and the operating effectiveness of such controls, refer to our separate Report in "Annexure A" which is based on the auditors' reports of the Parent company, subsidiary companies, associate companies and joint venture companies incorporated in India. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of internal financial controls over financial reporting of those companies. The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss including Other Comprehensive Income, the Consolidated Statement of Cash Flows and the Consolidated Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated financial statements. In our opinion, the aforesaid consolidated financial statements comply with the Ind AS specified under Section 133 of the Act. On the basis of the written representations received from the directors of the Parent Company as on March 31, 2022 taken on record by the Board of Directors of the Company and the reports of the statutory auditors of its joint operation companies, subsidiary companies, associate companies and joint venture companies incorporated in India, none of the directors of the Group companies, its associate companies and joint venture companies incorporated in India is disqualified as on March 31, 2022 from being appointed as a director in terms of Section 164 (2) of the Act. In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated financial statements have been kept so far as it appears from our examination of those books and the reports of the other auditors. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated financial statements. h) g) f) d) The respective Managements of the Company and its subsidiaries which are companies incorporated in India whose financial statements have been audited under the Act have represented to us and the other auditors of such subsidiaries respectively that, to the best of their knowledge and belief, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company or any of such subsidiaries to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the c) Corporate Overview Integrated Discussion and Analysis Report L&T Chennai Tada Tollway Larsen and Toubro Limited L&T Seawoods Limited L&T Sapura Shipping Private Limited Name of the company With respect to the matters specified in clause (xxi) of paragraph (3) and paragraph 4 of the Companies (Auditor's Report) Order, 2020 ("CARO"/ "the Order") issued by the Central Government in terms of Section 143(11) of the Act, according to the information and explanations given to us, and based on the CARO reports issued by us and the auditors of respective companies included in the consolidated financial statements to which reporting under CARO is applicable, as provided to us by the Management of the Parent, we report that in respect of those companies where audits have been completed under section 143 of the Act, there are no qualifications or adverse remarks by the respective auditors in the CARO reports of the said companies included in the consolidated financial statements except for the following: As stated in Note No. 20 to the Consolidated Financial Statements, the Board of Directors of the Parent Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The amount of dividend declared is in accordance with section 123 of the Act to the extent it applies to declaration of dividend. The final dividend paid by the Parent Company during the year in respect of the same declared for the previous year is in accordance with section 123 of the Companies Act 2013 to the extent it applies to payment of dividend. b. a. The amount of dividend is in accordance with Section 123 of the Act. Based on the audit procedures that has been considered reasonable and appropriate in the circumstances performed by us and those performed by the auditors of the subsidiaries which are companies incorporated in India whose financial statements have been audited under the Act, nothing has come to our or other auditor's notice that has caused us or the other auditors to believe that the representations under sub-clause (i) and (ii) of Rule 11(e) contain any material mis-statement. The respective Managements of the Company and its subsidiaries which are companies incorporated in India whose financial statements have been audited under the Act have represented to us and the other auditors of such subsidiaries respectively that, to the best of their knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company or any of such subsidiaries from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company or any of such subsidiaries shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and Company or any of such subsidiaries ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; C. b. V. 2. LARSEN & TOUBRO Statements Statutory Financial Reports Management (116.50) b) As required by Section 143(3) of the Act, based on our audit and on the consideration of the reports of the other auditors on the separate financial information of the joint operations, subsidiaries, associates and joint ventures referred to in the Other Matters section above we report, to the extent applicable that: • • • • LARSEN & TOUBRO Financial Statements Reports Report Discussion and Analysis Statutory Integrated Management Corporate Overview 2947.95 2904.21 144377.58 127172.58 14410.73 12235.80 Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Parent Company has adequate internal financial controls system in place and the operating effectiveness of such controls. a) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management. Materiality is the magnitude of misstatements in the consolidated financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the consolidated financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the consolidated financial statements. 1. Report on Other Legal and Regulatory Requirements Our opinion on the consolidated financial statements above and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and the financial information certified by the Management. We did not audit the financial information of 38 subsidiaries, whose financial information reflects total assets of 1,480.21 crore as at March 31, 2022, total revenues of 987.76 crore, total net loss after tax of 60.62 crore, total comprehensive loss (net) of 56.43 crore and net cash outflows amounting to ₹ 56.34 crore for the year March 31, 2022, as considered in the consolidated financial statements. The consolidated financial statements also include the Group's share of total net loss after tax of 1.41 crore and total comprehensive loss (net) of 1.46 crore for the year ended March 31, 2022, as considered in the consolidated financial statements, in respect of 3 associates and 2 joint ventures, whose financial information has not been audited by their respective auditors. This financial information is unaudited and has been furnished to us by the Parent's Management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, joint ventures and associates, is based solely on such unaudited financial information. In our opinion and according to the information and explanations given to us by the Management, these financial information are not material to the Group. to us by the Parent's Management, and our opinion in so far as it relates to the amounts and disclosures included in respect of this joint operation, is based solely on the financial information. According to the information and explanations given to us by the Parent's Management, the financial information of this entity are not material to the Group. Auditors' Report on Consolidated Financial Statements Integrated Annual Report 2021-22 489 We did not audit the financial information of 1 joint operation included in the standalone financial statements of the entities included in the Group, whose financial information reflects total assets of ₹1,067.79 crore as at March 31, 2022, total revenues of ₹352.96 crore, total net profit after tax (net) of 11.91 crore, total comprehensive profit (net) of 11.91 crore and net cash inflows of 5.10 crore for the year ended March 31, 2022, as considered in the respective standalone financial statements of the entities included in the Group. This financial information of this joint operations have not been audited by the auditor whose financial information has been furnished We did not audit the financial information of 61 subsidiaries, whose financial information reflects total assets of as at March 31, 2022, total revenues of 49,781.36 crore, total net profit after tax of 3,735.63 crore, total comprehensive income (net) of 3,931.93 crore and net cash outflows amounting to 2,035.19 crore for the year ended March 31, 2022, as considered in the consolidated financial statements. The consolidated financial statements also include the Group's share of total net profit after tax of 116.20 crore for the year ended March 31, 2022 and total comprehensive income (net) of 186.18 crore for the year ended March 31, 2022, as considered in the consolidated financial statements, in respect of 2 associates and 12 joint ventures, whose financial information has not been audited by us. This financial information has been audited by other auditors whose reports have been furnished to us by the Parent's Management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, joint ventures and associates, and our report in terms of subsection (3) of Section 143 of the Act, in so far as it relates to the aforesaid subsidiaries, joint ventures and associates is based solely on the reports of the other auditors. 1,85,352.10 crore We did not audit the financial information of 33 joint operations included in the standalone financial statements of the entities included in the Group, whose financial information reflects total assets of ₹3,130.29 crore as at March 31, 2022, total revenues of ₹3,381.64 crore, total net loss after tax of 193.76 crore, total comprehensive loss (net) of 193.76 crore and net cash inflows amounting to 101.55 crore for the year ended March 31, 2022, as considered in the respective standalone financial statements of the entities included in the Group. The financial information of these joint operations has been audited by the other auditors whose reports have been furnished to us by the Parent's Management, and our opinion in so far as it relates to the amounts and disclosures included in respect of these joint operations and our report in terms of subsection (3) of Section 143 of the Act, in so far as it relates to the aforesaid joint operations, is based solely on the report of such other auditors. • • • Other Matters From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. We communicate with those charged with governance of the Parent Company and such other entities included in the consolidated financial statements of which we are the independent auditors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Group and its associates and joint ventures to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group and its associates and joint ventures to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group and its associates and joint ventures to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the audit of the financial statements of such entities or business activities included in the consolidated financial statements of which we are the independent auditors. For the other entities included in the consolidated financial statements, which have been audited by the other auditors, such other auditors remain responsible for the direction, supervision and performance of the audits carried out by them. We remain solely responsible for our audit opinion. (479.18) 310.28 1237.96 498 crore Reserves and surplus Items of Other comprehensive income Debt Equity Capital Capital redemption reserve Securities premium reserves reserve Employee Foreign share Statutory Retained currency options earnings translation (net) Hedging through reserve reserve through Other Other comprehen- comprehen- instruments instruments Total other equity Non- controlling interests Balance as at 31-3-2021 Total Increase in non-controlling interests due to dilution/ divestment/acquisition/right issue Dividend paid (including special dividend) 280.91 1,40,38,92,022 280.78 Issued, subscribed and fully paid up equity shares outstanding at the end of the year 1,40,50,29,123 0.10 281.01 6,63,275 1,40,45,55,297 0.13 280.91 B. Other equity Particulars Balance as at 31-3-2020 Profit for the year (a) Other comprehensive income for the year (b) Total comprehensive income for the year (a+b) Issue of equity shares Transfer to non-financial assets/liabilities Transfer from/(to) retained earnings Employee share options (net) Net gain/loss on transactions with non-controlling interests 1,40,45,55,297 4,73,826 282.44 42.00 8599.60 4157.55 52731.64 582.56 222.21 (3650.89) 6.93 0.70 (9.26) 76.85 67.59 (3650.89) (303.03) (3953.92) 6.93 (6.93) 19.80 19.80 1100.58 1120.38 282.44 302.00 8667.65 383.60 3683.27 60955.94 665.45 485.10 162.40 (0.23) 75587.62 12051.53 87639.15 3913.44 (8.63) (474.28) (9.26) 401.49 260.00 (1.87) (436.92) 65.33 sive income sive income 16.75 11582.93 43.32 82.89 923.89 97.07 66442.44 9520.83 75963.27 11582.93 1338.35 12921.28 (17.68) 1129.49 324.88 1454.37 11626.25 82.89 923.89 97.07 (17.68) 12712.42 1663.23 14375.65 68.05 68.05 68.05 (1.87) (1.87) Issued, subscribed and fully paid up equity shares outstanding at the beginning of the year Add: Shares issued on exercise of employee stock options during the year crore 2020-21 Number of shares 108.97 324.88 438.35 1454.37 Total comprehensive income for the year attributable to: Owners of the Company 8998.71 12712.42 Non-controlling interests 1858.88 1663.23 10857.59 14375.65 Earnings per share (EPS) of 2 each from continuing operations: Basic earnings per equity share (*) 55 61.71 23.82 Diluted earnings per equity share (*) 55 1129.49 61.65 329.38 10419.24 Cost of hedging reserve 3.06 Income tax (expenses)/income on cost of hedging reserve (0.77) 11.12 (2.98) 2.29 Share in Other comprehensive income of joint ventures/associates (net) Other comprehensive income for the year (net of tax) Total comprehensive income for the year 13.47 438.35 10857.59 8.14 (26.56) 1454.37 14375.65 Profit for the year attributable to: Owners of the Company Non-controlling interests Other comprehensive income for the year attributable to: Owners of the Company Non-controlling interests 8669.33 11582.93 1749.91 1338.35 12921.28 23.80 Earnings per share (EPS) of 2 each from discontinued operations: Basic earnings per equity share (*) SANJIV V. PILGAONKAR Partner Membership No. 39826 Mumbai, May 12, 2022 S. N. SUBRAHMANYAN Chief Executive Officer & Managing Director (DIN 02255382) Whole-time Director & Chief Financial Officer (DIN 00019798) SIVARAM NAIR A Company Secretary & Compliance Officer Membership No. FCS3939 M. M. CHITALE Independent Director (DIN 00101004) 497 Integrated Annual Report 2021-22 Consolidated Statement of changes in Equity Consolidated Statement of Changes in Equity for the year ended March 31, 2022 A. Equity share capital Particulars 2021-22 Number of shares * crore by the hand of Firm's Registration No. 117366W/W-100018 Chartered Accountants For DELOITTE HASKINS & SELLS LLP Diluted earnings per equity share (*) 55 55 55 58.67 58.61 Earnings per share (EPS) of 2 each from continuing operations & discontinued operations: Basic earnings per equity share (*) Limited Diluted earnings per equity share (*) 61.71 82.49 Face value per equity share (₹) 61.65 2.00 82.41 2.00 NOTES FORMING PART OF THE FINANCIAL STATEMENTS 1 to 65 In terms of our report attached 55 55 L&T Special Steels and Heavy R. SHANKAR RAMAN CIN Due to others Due to micro enterprises and small enterprises Trade payables: 406.10 406.54 Lease liability 22719.39 31372.96 27 27765.83 30476.96 26 25 Current maturities of long-term borrowings Borrowings Financial liabilities 85945.64 65241.66 68.70 28 21.27 Other financial liabilities 22 159353.80 Sub-total - Current liabilities 1171.02 1309.82 Current tax liabilities (net) 2998.68 3355.86 31269.63 34644.10 31 30 Provisions Other current liabilities 101965.48 120044.02 45256.24 5328.93 6643.32 488.99 575.91 50568.33 29 137404.81 1178.66 773.78 87920.06 95373.73 TOTAL EQUITY 12051.53 75868.53 82407.66 12966.07 Non-controlling interests Equity attributable to owners of the Company 280.91 75587.62 281.01 82126.65 21 20 220 Other equity Equity share capital Equity EQUITY AND LIABILITIES: As at 31-3-2021 As at 31-3-2022 Liabilities 1039.33 Non-current liabilities Borrowings 83924.50 63363.29 817.77 25 51(d) 24 186.74 111.67 23 82120.04 1617.72 1633.31 61618.31 22 Current liabilities Sub-total-Non-current liabilities Other non-current liabilities Deferred tax liabilities (net) Provisions Other financial liabilities Lease liability Financial liabilities Liabilities associated with group(s) of assets classified as held for sale 45(e) 79.73 15562.05 17100.84 36 3429.35 139408.38 135979.03 156521.23 2267.08 158788.31 35 34 Net profit after tax (before exceptional items) from continuing operations Exceptional items before tax Deferred tax Current tax Tax expense: Profit before exceptional items and tax Total Expenses Depreciation, amortisation, impairment and obsolescence Finance costs Sales, administration and other expenses Employee benefits expense Finance cost of financial services business and finance lease activity 33506.21 Other manufacturing, construction and operating expenses 24558.23 1213.58 8903.49 39 Forgings Private Limited 8831.89 38 24750.54 29733.53 37 86700.90 99738.51 7691.04 5952.54 343.37 12983.56 16322.62 (2076.60) 22316.18 24772.33 2032.89 3091.07 1069.50 stock-in-trade and property development Changes in inventories of finished goods, work-in-progress, Sub-contracting charges R. SHANKAR RAMAN Membership No. 39826 Partner SANJIV V. PILGAONKAR by the hand of Firm's Registration No. 117366W/W-100018 Chartered Accountants For DELOITTE HASKINS & SELLS LLP In terms of our report attached 1 to 65 NOTES FORMING PART OF THE FINANCIAL STATEMENTS 32 33 COMMITMENTS (capital and others) CONTINGENT LIABILITIES 311273.71 3.20 223353.65 224675.19 320048.92 TOTAL EQUITY AND LIABILITIES TOTAL LIABILITIES S. N. SUBRAHMANYAN Chief Executive Officer & Managing Director (DIN 02255382) Whole-time Director & Chief Financial Officer (DIN 00019798) Stores, spares and tools consumed Purchase of stock-in-trade Cost of raw materials, components consumed Construction materials consumed Manufacturing, construction and operating expenses: EXPENSES: Other income (net) Total Income Revenue from operations Continuing operations INCOME: 2020-21 Note 2021-22 Consolidated Statement of Profit and Loss for the year ended March 31, 2022 Consolidated Statement of Profit and Loss Integrated Annual Report 2021-22 495 (DIN 00101004) M. M. CHITALE Independent Director Company Secretary & Compliance Officer Membership No. FCS3939 SIVARAM NAIR A Mumbai, May 12, 2022 crore crore Note Consolidated Balance Sheet as at March 31, 2022 (contd.) Note crore Consolidated Balance Sheet Consolidated Balance Sheet as at March 31, 2022 Integrated Annual Report 2021-22 493 Date: May 12, 2022 Place: Mumbai UDIN: 22039826AIVCZB5750 (Membership No. 39826) (Partner) Sanjiv V. Pilgaonkar (Firm's Registration No. 117366W/W-100018) Chartered Accountants For DELOITTE HASKINS & SELLS LLP Our opinion is not modified in respect of the above matters with respect to our reliance on the work done by and the reports of such other auditors and the financial information certified by the Management. Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting in so far as it relates to 1 associate company, which are companies incorporated in India, whose financial information is unaudited and whose efficacy of internal financial controls over financial reporting is based solely on the Management's certification provided to us and our opinion on the adequacy and operating effectiveness of the internal financial controls over financial reporting of the Group is not affected as the financial information of such entities is not material to the Group. Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting in so far as it relates to 34 subsidiary companies, 1 joint operation company and 11 joint ventures, which are companies incorporated in India, is based solely on the corresponding reports of the auditors of such companies incorporated in India. LARSEN & TOUBRO As at 31-3-2022 Other Matters As at 31-3-2021 Non-current assets 79.23 19197.76 18729.37 8066.96 7476.98 3646.78 3962.98 11386.29 388.37 1170.32 10578.87 61(b)(iii) Right-of-use assets 223 455 Intangible assets under development Other intangible assets Goodwill Investment property Capital work-in-progress Property, plant and equipment ASSETS: Statutory Financial Reports Statements Integrated Report Management Discussion and Analysis Chartered Accountants For DELOITTE HASKINS & SELLS LLP *Refer to Note No. 63(a) to the Consolidated Financial Statements Clause - xix Clause - ix (a) Clause -ix (a) Clause (c) and iii (d) - Clause iii (c) & iii (e) Clause number of the CARO report which is qualified or adverse* Joint Venture Joint Venture Parent Subsidiary Joint Venture Nature of relationship U27109MH2009PTC193699 L99999MH1946PLC004768 LARSEN & TOUBRO U45309TN2008PLC066938 U45203MH2008PLC 180029 U61100TN2010PTC077217 (Firm's Registration No. 117366W/W-100018) Sanjiv V. Pilgaonkar (Partner) (Membership No. 39826) Corporate Overview 492 In our opinion to the best of our information and according to the explanations given to us and based on the consideration of the reports of the other auditors referred to in the Other Matters paragraph below, the Parent, its subsidiary companies, its joint operation, its associate companies and joint ventures, which are companies incorporated in India, have, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2022, based on the criteria for internal financial controls over financial reporting established by the respective companies considering the essential components of internal control stated in the Guidance Note. Opinion Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Inherent Limitations of Internal Financial Controls Over Financial Reporting Meaning of Internal Financial Controls Over Financial Reporting Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained and the audit evidence obtained by other auditors of the subsidiary companies, joint operation, associate companies and joint ventures, which are companies incorporated in India, in terms of their reports referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting of the Parent, its subsidiary companies, its joint operation, its associate companies and its joint ventures, which are companies incorporated in India. Our responsibility is to express an opinion on the internal financial controls over financial reporting of the Parent, its subsidiary companies, its joint operation, its associate companies and its joint ventures, which are companies incorporated in India, based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued ICAI and the Standards on Auditing ("SA"), prescribed under Section 143(10) of the Companies Act, 2013 (the "Act"), to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. 1988.62 Auditor's Responsibility Management's Responsibility for Internal Financial Controls In conjunction with our audit of the consolidated financial statements of the Company as of and for the year ended March 31, 2022, we have audited the internal financial controls over financial reporting of LARSEN & TOUBRO LIMITED (hereinafter referred to as "Parent") and its subsidiary companies which includes one of the Group's 35 joint operations which is a company incorporated in India, its associate companies and joint ventures, which are companies incorporated in India, as of that date. ANNEXURE "A" TO THE INDEPENDENT AUDITORS REPORT Auditors' Report on Consolidated Financial Statements Integrated Annual Report 2021-22 491 Date: May 12, 2022 Place: Mumbai UDIN: 22039826AIVCZB5750 The respective Boards of Directors of the Parent, its subsidiary companies, its joint operation, its associate companies and joint ventures, which are companies incorporated in India, are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the respective companies considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India ("ICAI"). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the respective company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013. 112.02 (Referred to in paragraph "(f)" under 'Report on Other Legal and Regulatory Requirements' section of our report of even date) Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (the "Act") Financial assets 18 Other financial assets 235.35 280.34 17 Other loans 41379.03 42269.20 16 Loans towards financing activities 2867.98 5182.93 15 Other bank balances 13373.52 13770.24 14 Cash and cash equivalents 42229.78 3840.04 3251.68 141274.18 134348.57 Reports Discussion and Analysis Report Financial Statements 2021.53 Statutory Integrated Management Corporate Overview 494 46138.92 311273.71 6.24 830.78 45(e) Group(s) of assets classified as held for sale TOTAL ASSETS 54791.48 194960.59 207350.39 Sub-total Current assets 19 Other current assets 320048.92 13 60132.89 31011.23 1420.19 2162.97 9 Other financial assets 173.24 252.99 8 Other loans 46736.84 7 Loans towards financing activities 5945.14 7081.51 6 Investments in joint ventures and associates Trade receivables Other investments 2670.26 43(e) 58963.66 62840.50 52631.67 Other non-current assets 29792.51 12 Investments 5820.54 5943.32 Deferred tax assets (net) 11 Financial assets Inventories 116306.88 5949.67 2729.35 111867.75 10 6077.62 2697.00 51(d) Current assets 2840.10 Sub-total - Non-current assets When the Group has with other entities joint control of the arrangement and rights to the net assets of the joint arrangement, it recognises its interest as joint ventures. Joint control exists when the decisions about the relevant activities (i.e. activities that significantly affects the investee's returns) require unanimous consent of the parties sharing the control. When the Group has significant influence over the other entity, it recognises such interest as investment in associates. Significant influence is the power to participate in the financial and operating policy decisions of the entity but is not control or joint control over the entity. The results, assets and liabilities of joint ventures and associates are incorporated in the consolidated financial statements using equity method of accounting after making necessary adjustments to achieve uniformity in application of accounting policies, wherever required. An investment in joint venture or associate is initially recognised at cost and adjusted thereafter to recognise the Group's share of profit or loss and other comprehensive income of the joint venture or associate. Gain or loss in respect of changes in Other Equity of joint ventures or associates resulting from divestment or dilution of stake in the joint ventures and associates is recognised in the Statement of Profit and Loss. On acquisition of investment in a joint venture or associate, any excess of cost of investment over the fair value of the assets and liabilities of the joint venture and associate, is recognised as goodwill and is included in the carrying value of the investment in the joint venture and associate. The excess of fair value of assets and liabilities over the investment is recognised directly in equity as capital reserve. The unrealised profits/losses on transactions with joint ventures and associates are eliminated by reducing the carrying amount of investment. The carrying amount of investment in joint ventures and associates is reduced to recognise impairment, if any, when there is evidence of impairment. When the Group's share of losses of a joint venture or an associate exceeds the Group's interest in that joint venture or the associate (which includes any long-term interests that, in substance, form part of the Group's net investment in the joint venture or the associate), the Group discontinues recognising its share of further losses. Additional losses are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the joint venture or the associate. (f) Interests in joint operations When the Group has joint control of the arrangement based on contractually determined right to the assets and obligations for liabilities, it recognises such interests as joint operations. Joint control exists when the decisions about the relevant activities (i.e. activities that significantly affects the investee's returns) require unanimous consent of the parties sharing the control. In respect of its interests in joint operations, the Group recognises its share in assets, liabilities, income and expenses line-by-line in the standalone financial statements of the entity which is party to such joint arrangement, thereby forms part of the consolidated financial statements. Interests in joint operations are included in the segments to which they relate. (g) Business combination/Goodwill on consolidation The Group accounts for business combinations under acquisition method of accounting. Acquisition-related costs are recognised in the Statement of Profit and Loss as incurred. The acquiree's identifiable assets, liabilities and contingent liabilities that meet the condition for recognition are recognised at their fair values at the acquisition date. (e) Investments in joint ventures and associates (vi) The gains/losses in respect of divestment of stake resulting in ceding of control in subsidiary companies are recognised in the Statement of Profit and Loss. The investment representing the interest retained in a former subsidiary, if any, is initially recognised at its fair value with the corresponding effect recognised in the Statement of Profit and Loss as on the date the control is ceded. Such retained interest is subsequently accounted as investment in an associate or a joint venture or as a financial asset. (iv) Non-controlling interests represent that part of the total comprehensive income and net assets of subsidiaries attributable to the interest which is not owned, directly or indirectly, by the Parent Company. (v) 503 (iii) The consolidated financial statements of the Group combine financial statements of the Parent Company and its subsidiaries line-by-line by adding together the like items of assets, liabilities, income and expenses. All intra-group assets, liabilities, income, expenses and unrealised profits/losses on intra-group transactions are eliminated on consolidation. The accounting policies of subsidiaries are harmonised to ensure the consistency with the policies adopted by the Parent Company. The consolidated financial statements are presented to the extent possible, in the same manner as Parent Company's standalone financial statements. Profit or loss and other comprehensive income are attributed to the owners of the Parent Company and to the non-controlling interests, shown separately in the financial statements. 502 Significant Accounting Policies (contd.) NOTE [1] (II) LARSEN & TOUBRO Statements Statutory Financial Reports Integrated Discussion and Analysis Report Management (ii) Consolidation of a subsidiary begins when the Parent Company, directly or indirectly, obtains control over the subsidiary and ceases when the Parent Company, directly or indirectly, loses control of the subsidiary. Income and expenses of a subsidiary acquired are included in the Consolidated Statement of Profit and Loss from the date the Parent Company, directly or indirectly, gains control until the date when the Parent Company, directly or indirectly, ceases to control the subsidiary. Corporate Overview The consolidated financial statements incorporate the financial statements of the Parent Company and its subsidiaries. For this purpose, an entity which is, directly or indirectly, controlled by the Parent Company is treated as subsidiary. The Parent Company together with its subsidiaries constitute the Group. Control exists when the Parent Company, directly or indirectly, has power over the investee, is exposed to variable returns from its involvement with the investee and has the ability to use its power to affect its returns. The gains/losses in respect of part divestment/dilution of stake in subsidiary companies not resulting in ceding of control, are recognised directly in other equity attributable to the owners of the Parent Company in the Consolidated Financial Statements of the Group. Notes forming part of the Consolidated Financial Statements (contd.) (c) there is no alternative use of the asset and the company has either explicit or implicit right of payment considering legal precedents. In all other cases, performance obligation is considered as satisfied at a point in time. Notes forming part of the Consolidated Financial Statements (contd.) Statutory Financial Reports Integrated Discussion and Analysis Report (i) Statements Management Corporate Overview 504 Determining the expected losses, which are recognised in the period in which such losses become probable based on the expected total contract cost as at the reporting date. Determining the revenue to be recognised in case of performance obligation satisfied over a period of time. Revenue recognition is done by measuring the progress towards complete satisfaction of performance obligation. b. a. Costs to obtain a contract which are incurred regardless of whether the contract was obtained are charged off in profit & loss immediately in the period in which such costs are incurred. Incremental costs of obtaining a contract, if any, and costs incurred to fulfill a contract are amortised over the period of execution of the contract in proportion to the progress measured in terms of a proportion of actual cost incurred to date, to the total estimated cost attributable to the performance obligation. Significant judgments are used in: Variable consideration is estimated using the expected value method or most likely amount as appropriate in a given circumstance. Payment terms agreed with a customer are as per business practice and the financing component, if significant, is separated from the transaction price and accounted as interest income. The revenue is recognised to the extent of transaction price allocated to the performance obligation satisfied. Transaction price is the amount of consideration to which the Group expects it to be entitled in exchange for transferring goods or services to a customer excluding amounts collected on behalf of a third party. The Group includes variable consideration as part of transaction price when there is a basis to reasonably estimate the amount of the variable consideration and when it is probable that a significant reversal of cumulative revenue recognised will not occur when the uncertainty associated with the variable consideration is resolved. (b) the customer controls the asset as it is being created/enhanced by the company's performance or (a) the customer simultaneously consumes the benefit of the company's performance or The Group transfers control of a good or service over time and therefore satisfies a performance obligation and recognises revenue over a period of time if one of the following criteria is met: For performance obligation satisfied over time, the revenue recognition is done by measuring the progress towards complete satisfaction of performance obligation. The progress is measured in terms of a proportion of actual cost incurred to date, to the total estimated cost attributable to the performance obligation. Revenue from contracts with customers is recognised when a performance obligation is satisfied by transfer of promised goods or services to a customer. Revenue recognition Operating cycle for the business activities of the Group covers the duration of the specific project or contract or product line or service including the defect liability period wherever applicable and extends up to the realisation of receivables (including retention monies) within the agreed credit period normally applicable to the respective lines of business. (i) (h) Operating cycle for current and non-current classification Business combinations arising from transfers of interests in entities that are under common control are accounted using pooling of interest method. The difference between consideration given and the aggregate historical carrying amounts of assets and liabilities of the acquired entity are recorded in shareholders' equity. Goodwill arising on consolidation is tested for impairment annually and not amortised. In the event of cessation of operations of a subsidiary, the unimpaired goodwill is written off fully. Goodwill on consolidation is allocated to cash generating units or group of cash generating units that are expected to benefit from the acquisition. Goodwill arising on consolidation of acquisitions represents the excess of (a) consideration paid for acquiring control and (b) acquisition date fair value of previously held ownership interest, if any, in a subsidiary over the Group's share in the fair value of the net assets (including identifiable intangibles) of the subsidiary as on the date of acquisition of control. Where the fair value of the identifiable assets and liabilities exceed the cost of acquisition, the excess is recognised as Capital Reserve. Significant Accounting Policies (contd.) NOTE [1] (II) Notes forming part of the Consolidated Financial Statements (d) Basis of consolidation (1.86) The Balance Sheet, the Statement of Profit and Loss and the Statement of Changes in Equity are prepared and presented in the format prescribed in the Schedule III to the Companies Act, 2013 (the Act). The Statement of Cash Flows has been prepared and presented in accordance with Ind AS 7 "Statement of Cash Flows". The disclosures with respect to items in the Balance Sheet and Statement of Profit and Loss, as prescribed in the Schedule III to the Act, are presented by way of notes forming part of the financial statements along with the other notes required to be disclosed under the notified Accounting Standards and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended. Chartered Accountants For DELOITTE HASKINS & SELLS LLP In terms of our report attached 3. Previous year's figures have been regrouped/reclassified wherever applicable. 2. Fixed assets include property, plant and equipment, investment property and intangible assets adjusted for movement of (a) capital work-in-progress for property, plant and equipment and investment property and (b) Intangible assets under development during the year. 1. Statement of Cash Flows has been prepared under the indirect method as set out in the Indian Accounting Standard (Ind AS) 7 "Statement of Cash Flows" as specified in the Companies (Indian Accounting Standards) Rules, 2015. 13373.52 13770.24 (90.11) 11324.57 2140.92 314.42 13373.52 82.30 (15274.38) (15181.48) (3184.42) (2812.33) (203.57) (155.59) (381.64) (407.20) (3650.89) (2528.38) 66.73 143.82 796.02 (6151.20) LARSEN & TOUBRO (38839.86) (1019.59) Firm's Registration No. 117366W/W-100018 Amounts in the financial statements are presented in Indian Rupees in crore [1 crore = 10 million] rounded off to two decimal places as permitted by Schedule III to the Act. Per share data are presented in Indian Rupees to two decimal places. by the hand of Partner (c) Presentation of financial statements Above levels of fair value hierarchy are applied consistently and generally, there are no transfers between the levels of the fair value hierarchy unless the circumstances change warranting such transfer. (iii) Level 3 inputs are unobservable inputs for the valuation of assets or liabilities. (ii) Level 2 inputs are inputs, other than quoted prices included in level 1, that are observable for the assets or liabilities, either directly or indirectly; and (i) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at measurement date; Fair value measurements are categorised as below based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety: The Group maintains its accounts on accrual basis following historical cost convention, except for certain assets and liabilities that are measured at fair value in accordance with Ind AS. (b) Basis of accounting The Group's financial statements have been prepared in accordance with the provisions of the Companies Act, 2013 and the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 and amendments thereto issued by the Ministry of Corporate Affairs under section 133 of the Companies Act, 2013. In addition, the guidance notes/announcements issued by the Institute of Chartered Accountants of India (ICAI) are also applied except where compliance with other statutory promulgations require a different treatment. These financials statements have been approved for issue by the Board of Directors at its meeting held on May 12, 2022. (a) Statement of compliance Significant Accounting Policies NOTE [1] (II) The principal activities of the Group, its Joint Ventures and associates consist of providing Engineering and Construction solutions in key sectors such as Infrastructure, Hydrocarbon, Power, Process Industries and Defence Engineering, Information Technology and Financial Services. Further details of the business operations of the Group are mentioned in Note [46] Segment Information. The Consolidated Financial Statements comprise financial statements of "Larsen & Toubro Limited" ("L&T", the "Parent Company") and its subsidiaries (collectively referred to as "the Group") for the year ended March 31, 2022. Company Overview NOTE [1](1) Notes forming part of the Consolidated Financial Statements Notes forming part of the Consolidated Financial Statements Integrated Annual Report 2021-22 501 Company Secretary & Compliance Officer Membership No. FCS3939 SIVARAM NAIR A Mumbai, May 12, 2022 M. M. CHITALE Independent Director (DIN 00101004) Whole-time Director & Chief Financial Officer (DIN 00019798) R. SHANKAR RAMAN Chief Executive Officer & Managing Director (DIN 02255382) S. N. SUBRAHMANYAN Membership No. 39826 SANJIV V. PILGAONKAR Notes forming part of the Consolidated Financial Statements (contd.) C. Significant Accounting Policies (contd.) Fare collection rights obtained in consideration for rendering construction services represent the right to collect fare during the concession period in respect of Build-Operate-Transfer (BOT) projects undertaken by the Group. Fare collection rights are capitalised as intangible asset upon completion of the project at the cumulative construction costs including related margins. the Group has ability to reliably measure the expenditure attributable to the intangible asset during its development. Development expenditure that does not meet the above criteria is expensed in the period in which it is incurred. F. the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and the manner in which the probable future economic benefits will be generated including the existence of a market for output of the intangible asset or intangible asset itself or if it is to be used internally, the usefulness of intangible assets; E. D. the Group has ability to use or sell the intangible asset; the Group has intention to complete the intangible asset and use or sell it; B. the technical feasibility of completing the intangible asset so that it will be available for use or sale; A. (ii) Development expenditure on new products is capitalised as intangible asset, if all of the following can be demonstrated: Expenditure on research is expensed under respective heads of account in the period in which it is incurred (i) Research and development expenditure on new products: Intangible assets are recognised when it is probable that the future economic benefits that are attributable to the asset will flow to the enterprise and the cost of the asset can be measured reliably. Intangible assets are stated at original cost net of tax/duty credits availed, if any, including borrowing costs capitalised for qualifying assets and reduced by accumulated amortisation and cumulative impairment. All directly attributable costs and other administrative and other general overhead expenses that are specifically attributable to acquisition of intangible assets are allocated and capitalised as a part of the cost of the intangible assets. (n) Intangible assets Properties (including those under construction) held to earn rentals and/or capital appreciation are classified as investment property and are measured and reported at cost, including transaction costs and borrowing cost capitalised for qualifying assets, in accordance with the Group's accounting policy. Policies with respect to depreciation, useful life and derecognition are on the same basis as stated in PPE supra. (m) Investment property PPE is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising on derecognition is recognised in the Statement of Profit and Loss in the same period. Depreciation on additions to owned assets is calculated pro rata from the date it is ready for use. Where cost of a part of the asset ("asset component”) is significant to total cost of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part is determined separately and such asset component is depreciated over its separate useful life. Depreciation charge for impaired assets is adjusted in future periods in such a manner that the revised carrying amount of the asset is allocated over its remaining useful life. Depreciation is recognised using straight-line method so as to write off the cost of the assets (other than freehold land and capital work-in-progress) less their residual values over their useful life specified in Schedule II to the Act, or in case of assets where the useful life was determined by technical evaluation, over the useful life so determined. Depreciation method is reviewed at each financial year end to reflect the expected pattern of consumption of the future economic benefits embodied in the asset. The estimated useful life and residual values are also reviewed at each financial year end with the effect of any change in the estimates of useful life/residual value is accounted on prospective basis. PPE not ready for the intended use on the date of the Balance Sheet are disclosed as "capital work-in-progress". (Also refer to the policies on leases, borrowing costs, impairment of assets and foreign currency transactions Infra). Significant Accounting Policies (contd.) NOTE [1] (II) Notes forming part of the Consolidated Financial Statements (contd.) Intangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as "intangible assets under development". LARSEN & TOUBRO 507 Notes forming part of the Consolidated Financial Statements Post-employment benefits: (35806.44) 2739.13 Employee benefits such as salaries, wages, short term compensated absences, bonus, ex-gratia, and performance-linked rewards falling due wholly within twelve months of rendering the service are classified as short term employee benefits and are expensed in the period in which the employee renders the service. Short-term employee benefits: (ii) (i) (p) Employee benefits When an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit), except for allocated goodwill, is increased to the revised estimate of its recoverable amount, so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss is recognised for the asset (or cash generating unit) in prior years. A reversal of an impairment loss (other than impairment loss allocated to goodwill) is recognised immediately in the Statement of Profit and Loss. If recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, such deficit is recognised immediately in the Statement of Profit and Loss as impairment loss and the carrying amount of the asset (or cash generating unit) is reduced to its recoverable amount. For this purpose, the impairment loss recognised in respect of a cash generating unit is allocated first to reduce the carrying amount of any goodwill allocated to such cash generating unit and then to reduce the carrying amount of the other assets of the cash generating unit on a pro-rata basis. (The amount of value-in-use is determined as the present value of estimated future cash flows from the continuing use of an asset, which may vary based on the future performance of the entity and from its disposal at the end of its useful life. For this purpose, the discount rate (pre-tax) is determined based on the weighted average cost of capital of the company suitably adjusted for risks specified to the estimated cash flows of the asset). (ii) in the case of a cash generating unit (the smallest identifiable group of assets that generates independent cash flows), at the higher of the cash generating unit's fair values less costs to sell and the value-in-use. in the case of an individual asset, at the higher of fair value less costs to sell and the value-in-use; and (i) Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is determined: As at the end of each accounting year, the carrying amounts of PPE, investment property and intangible assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If such indication exists, the PPE, investment property and intangible assets are tested for impairment so as to determine the impairment loss, if any. Goodwill and the intangible assets with indefinite useful life are tested for impairment each year. (o) Impairment of assets (ix) Amortisation on impaired assets is provided by adjusting the amortisation charge in the remaining periods so as to allocate the asset's revised carrying amount over its remaining useful life. (viii) Fare collection rights are amortised using the straight-line method over the period of concession; and (vii) Intangible assets with indefinite useful life that are acquired separately are carried at cost less accumulated impairment losses; (vi) Rights under licensing agreement: over a period of six years; (v) Trade name: over a period of three months to five years; (iv) Customer contracts and relationship: over a period of the contract which generally is over three to ten years; (iii) New product design and development: over a period of five years; (ii) Technical know-how: over a period of three to seven years; (i) Specialised software: over a period of three to ten years; Intangible assets are amortised on straight-line basis over the estimated useful life. The method of amortisation and useful life are reviewed at the end of each accounting year with the effect of any changes in the estimate being accounted for on a prospective basis. The estimated useful life for major categories of the intangible assets are as follows: Significant Accounting Policies (contd.) NOTE [1] (II) Notes forming part of the Consolidated Financial Statements (contd.) Integrated Annual Report 2021-22 NOTE [1] (II) Statements Integrated Discussion and Analysis Report G. Significant Accounting Policies (contd.) NOTE [1] (II) Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements Integrated Annual Report 2021-22 505 Revenue from contracts for rendering of engineering design services and other services which are directly related to the construction of an asset is recognised on the same basis as stated in (i) B Supra. material basis is recognised over a period of time when relevant services are rendered and related costs are incurred. Revenue from fixed price contracts is recognised over a period of time using the proportionate completion method. In respect of information technology business and technology services business, revenue from contracts awarded on time and Unbilled revenue represents value of services performed in accordance with the contract terms but not billed. Revenue from rendering of services is recognised over time as the customer receives the benefit of the company's performance and the company has an enforceable right to payment for services transferred. In the case of the developmental project business and the realty business, revenue includes profit on sale of investment properties or sale of stake in the subsidiary and/or joint venture companies as the sale/divestments are inherent in the business model. Rendering of services Revenue from property development activities is recognised when performance obligation is satisfied, customer obtains control of the property transferred and a reasonable expectation of collection of the sale consideration from the customer exists. Revenue from construction/project contracts executed under joint operations [in terms of Ind AS 111 "Joint Arrangements"], is recognised on the same basis as adopted in respect of contracts independently executed by the Group. Impairment loss (termed as provision for foreseeable losses in the financial statements) is recognised in profit or loss to the extent the carrying amount of the contract asset exceeds the remaining amount of consideration that the company expects to receive towards remaining performance obligations (after deducting the costs that relate directly to fulfill such remaining performance obligations). The Group recognises impairment loss (termed as provision for expected credit loss on contract assets in the financial statements) on account of credit risk in respect of a contract asset using expected credit loss model on similar basis as applicable to trade receivables. For contracts where the aggregate of contract cost incurred to date plus recognised profits (or minus recognised losses as the case may be) exceeds the progress billing, the surplus is shown as contract asset and termed as "Due from customers". For contracts where progress billing exceeds the aggregate of contract costs incurred to date plus recognised profits (or minus recognised losses, as the case may be), the surplus is shown as contract liability and termed as "Due to customers". Amounts received before the related work is performed are disclosed in the Balance Sheet as contract liability and termed as "Advances from customer". The amounts billed on customer for work performed and are unconditionally due for payment i.e. only passage of time is required before payment falls due, are disclosed in the Balance Sheet as trade receivables. The amount of retention money held by the customers pending completion of performance milestone is disclosed as part of contract asset and is reclassified as trade receivables when it becomes due for payment. Fixed price contracts: Contract revenue is recognised over time to the extent of performance obligation satisfied and control is transferred to the customer. Contract revenue is recognised at allocable transaction price which represents the cost of work performed on the contract plus proportionate margin, using the percentage of completion method. Percentage of completion is the proportion of cost of work performed to date, to the total estimated contract costs. Cost plus contracts: Revenue from cost plus contracts is recognised over time and is determined with reference to the extent performance obligations have been satisfied. The amount of transaction price allocated to the performance obligations satisfied represents the recoverable costs incurred during the period plus the margin as agreed with the customer. Revenue from construction/project related activity is recognised as follows: Revenue is recognised when the control of the same is transferred to the customer and it is probable that the Group will collect the consideration to which it is entitled for the exchanged goods. Revenue from commissioning of complex plant and equipment is recognised either 'over time' or 'in time' based on assessment of the transfer of control as per the terms of the contract. Revenue from sale of manufactured and traded goods including contracts for supply/commissioning of complex plant and equipment is recognised as follows: F. E. D. C. B. A. C. Determining the method to be applied to arrive at the variable consideration requiring an adjustment to the transaction price. Revenue includes adjustments made towards liquidated damages and variation wherever applicable. Escalation and other claims, which are not ascertainable/acknowledged by customers are not taken into account. H. Statutory Financial Reports In respect of financial services business and finance lease activity, income from interest-bearing loans/lease is recognised on accrual basis over the life of the loans/lease based on the effective yield. Income from bill discounting, advisory and syndication services and other financing activities is accounted on accrual basis. I. Management Corporate Overview 506 Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost can be measured reliably. Own manufactured PPE is capitalised at cost including an appropriate share of overheads. Administrative and other general overhead expenses that are specifically attributable to construction or acquisition of PPE or bringing the PPE to working condition are allocated and capitalised as a part of the cost of the PPE. All directly attributable costs related to the acquisition of PPE and borrowing costs in case of qualifying assets are capitalised in accordance with the Group's accounting policy. PPE is recognised when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. PPE is stated at original cost net of tax/duty credits availed, if any, less accumulated depreciation and cumulative impairment, if any. Property, Plant and Equipment (PPE) An item of income or expense which by its size, type or incidence requires disclosure in order to improve an understanding of the performance of the Group is treated as an exceptional item and the same is disclosed in Statement of Profit and Loss and in the notes forming part of the financial statements. Exceptional items Other items of income are accounted as and when the right to receive such income arises and it is probable that the economic benefits will flow to the Group and the amount of income can be measured reliably. Government grants, which are revenue in nature and are towards compensation for the qualifying costs incurred by the Group, are recognised as other income/reduced from underlying expenses in profit or loss in the period in which such costs are incurred. Government grants related to an asset are reduced from the cost of an asset until the asset is ready to use and the grant post that is presented as deferred income. Subsequently the grant is recognised as income in profit or loss on a systematic basis over the expected useful life of the related asset. Government grant receivable in the form of duty credit scrips is recognised as other income in the Statement of Profit and Loss in the period in which the application is made to the government authorities and to the extent there is no uncertainty towards its receipt. Dividend income is accounted in the period in which the right to receive the same is established. D. C. B. A. Interest income on investments and loans is accrued on a time basis by reference to the principal outstanding and the effective interest rate including interest on investments classified as fair value through profit or loss or fair value through other comprehensive income. Interest receivable on customer dues is recognised as income in the Statement of Profit and Loss on accrual basis provided there is no uncertainty of realisation. (I) (k) (j) Other income N. Other operational revenue represents income earned from the activities incidental to the business and is recognised when the performance obligation is satisfied and the right to receive the income is established as per the terms of the contract. M. Revenue from operation and maintenance services of power plant receivable under the Power Purchase Agreement is recognised on accrual basis. Revenue from charter hire is recognised as per the terms of the time charter agreement. Income from investment management fees is recognised in accordance with the contractual terms and the SEBI regulations based on average Assets Under Management (AUM) of mutual fund schemes over the period of the agreement in terms of which services are performed. Portfolio management fees are recognised in accordance with the related contracts entered into with the clients over the period of the agreement. Trusteeship fees are accounted on accrual basis. Course fees/subscription income is recognised over time as per the course/subscription duration and agreed terms. L. K. J. Commission income is recognised when the terms of the contract are fulfilled. Revenue on account of construction services rendered in connection with Build-Operate-Transfer (BOT) projects undertaken by the Group is recognised during the period of construction using percentage of completion method. After the completion of construction period, revenue from fare/toll charges from users of facilities is accounted when they are collected. 15.85 36258.60 90.35 crore 2020-21 SANJIV V. PILGAONKAR by the hand of Firm's Registration No. 117366W/W-100018 Chartered Accountants For DELOITTE HASKINS & SELLS LLP In terms of our report attached 98.20 55.62 82126.65 12966.07 95092.72 718.53 696.00 335.10 8718.74 371.65 3710.47 67139.90 282.44 12.05 (535.93) (523.88) 12.05 ---- 3.77 (3.77) (2528.46) (494.99) (3023.45) 91.10 0.75 3.77 (2528.46) (47.60) 27.20 (12.70) 0.75 33.10 1.12 1.12 1.12 ' 51.09 1749.91 10419.24 108.97 438.35 1858.88 10857.59 Partner 8669.33 55.85 329.38 55.85 8998.71 51.09 Membership No. 39826 S. N. SUBRAHMANYAN 2947.95 Depreciation, amortisation, impairment and obsolescence (28.47) (4.12) Dividend received Adjustments for: 23026.30 14410.73 Profit before tax including discontinued operations (excluding exceptional items) 10790.50 Discontinued operations 12235.80 14410.73 Continuing operations Profit before tax (excluding exceptional items) from: 2020-21 2021-22 A. Cash flow from operating activities: crore Consolidated Statement of Cash Flows for the year ended March 31, 2022 Consolidated Statement of Cash Flows Integrated Annual Report 2021-22 499 M. M. CHITALE Independent Director (DIN 00101004) Company Secretary & Compliance Officer Membership No. FCS3939 SIVARAM NAIR A Whole-time Director & Chief Financial Officer (DIN 00019798) R. SHANKAR RAMAN Chief Executive Officer & Managing Director (DIN 02255382) Mumbai, May 12, 2022 2904.21 51.09 (64.20) 232.31 (64.20) Employee Capital redemption Capital Debt Equity instruments instruments Items of Other comprehensive income Reserves and surplus- crore Balance as at 31-3-2022 Decrease in non-controlling interest due to dilution/ divestment/acquisition Net gain/(loss) on transactions with non-controlling interests Dividend paid Employee share options (net) Transfer from/(to) retained earnings Transfer to non-financial assets/liabilities Issue of equity shares Total comprehensive income for the year (c+d) Other comprehensive income for the year (d) Profit for the year (c) Balance as at 31-3-2021 Particulars Consolidated Statement of Changes in Equity for the year ended March 31, 2022 (contd.) LARSEN & TOUBRO Statements Statutory Financial Reports Discussion and Analysis Report Integrated Management Corporate Overview A. Defined contribution plans: The Group's superannuation scheme, state governed provident fund scheme, employee state insurance scheme, social security contributions and employee pension scheme are defined contribution plans. The contribution paid/payable under the schemes is recognised during the period in which the employee renders the service. reserve I Securities premium share Statutory Retained reserves earnings translation 30.55 8744.20 232.31 30.55 74.87 8669.33 12051.53 87639.15 (0.23) 75587.62 162.40 3683.27 60955.94 665.45 485.10 282.44 302.00 8667.65 383.60 income income hensive hensive reserve compre- compre- (net) reserve reserve Total controlling interests Non- through Total other Other equity Other through Hedging Foreign currency options 10.97 24654.13 Exchange difference on items grouped under financing/investing activities (75.47) (87.85) 9.91 Cash and cash equivalents acquired pursuant to acquisition of subsidiaries Consideration paid on acquisition of subsidiaries 11530.82 295.78 28.47 4.12 1005.73 (59.52) Net proceeds/(payments) for transfer of discontinued operations (net of tax) Consideration received on disposal of subsidiaries Dividend received from other investments 174.38 156.83 Dividend received from joint ventures 1273.47 968.55 Interest received 688.10 (151.59) (148.03) Deposits/loans given to associates, joint ventures and third parties (2729.33) Change in other bank balance and cash not available for immediate use (16841.55) 1437.04 (Purchase)/sale of current investments (net) 240.19 1026.06 Sale of non-current investments (1873.24) 885.36 (121.77) 70.75 (2156.24) Cash and cash equivalents of subsidiaries discharged pursuant to (divestment)/classification to held for sale Net cash (used in)/from investing activities 7.07 13.69 2021-22 Notes: Cash and cash equivalents for discontinued operations (classified as held for sale) Cash and cash equivalents at end of the year [Note 14] Effect of exchange rate changes on cash and cash equivalents Cash and cash equivalents at beginning of the year [Note 14] Net (decrease)/increase in cash and cash equivalents (A + B + C) Net cash (used in)/from financing activities Interest paid (including cash flows on account of interest rate swaps) Interest paid on lease liability Repayment of lease liability [Note 50] Dividends paid Settlement of derivative contracts related to borrowings Payment (to)/from non-controlling interest (net) Proceeds from/(repayment of) other borrowings (net) [Note 50] Repayment of non-current borrowings [Note 50] Proceeds from non-current borrowings [Note 50] Proceeds from issue of share capital (including share application money) [net] C. Cash flow from financing activities: Consolidated Statement of Cash Flows for the year ended March 31, 2022 (contd.) LARSEN & TOUBRO Statements Statutory Financial Reports Discussion and Analysis Report Integrated Management Corporate Overview 500 (5658.52) (3667.68) (55.07) (108.09) (1807.70) Purchase of non-current investments 0.23 Impairment recognised on non-current assets held for sale 151.26 (1.65) 12.00 Impairment of investment in debt instruments (Gain)/loss on disposal of subsidiary 3.13 Non-cash items related to discontinued operations 137.67 135.31 (10707.92) (440.14) (1118.77) (528.81) (17.60) (1375.68) (1053.65) 3913.44 3125.70 (14.55) Employee stock option-discount (Gain)/loss on disposal of discontinued operations (Profit)/loss on sale/fair valuation of investments (net) (Profit)/loss on sale of fixed assets (net) Interest income Finance costs Unrealised (gain)/loss on finance leases 74.98 (41.25) Effect of exchange rate changes on cash and cash equivalents (Gain)/loss on de-recognition of lease liability/right-of-use assets (3110.63) (6.11) Interest expenses/(income) related to discontinued operations Sale of fixed assets Purchase of fixed assets B. Cash flow from investing activities: 23073.82 19163.58 Net cash (used in)/from operating activities (3471.01) (4552.13) Direct taxes refund/(paid) [net] 26544.83 23715.71 Cash generated from operations 4617.71 5004.65 (Increase)/decrease in loans and advances towards financing activities 21927.12 18711.06 Cash generated from operations before financing activities 2219.78 9659.71 Increase/decrease) in trade payables and customer advances 348.90 (74.33) 3011.51 (9833.40) (Increase)/decrease in trade and other receivables (Increase)/decrease in inventories 1.16 16346.93 18959.08 Operating profit before working capital changes Adjustments for: (15.78) 508 Integrated Annual Report 2021-22 42.33 and year Foreign Classified For the inventories Business Up to 31-3-2021 combination As at Deductions 31-3-2022 currency as held for sale fluctuation fluctuation and Foreign Classified Book value Impairment crore Depreciation Transfer (to) / from Cost Transfer (to) / from inventories Business As at 1-4-2021 combination Class of assets Additions Statements currency as held for sale Up to 31-3-2022 31-3-2021 11.29 146.65 146.65 Leasehold 1032.94 856.64 4.24 (183.75) 11.69 Deductions 1032.94 Land Property Investment Investment Property 31-3-2022 31-3-2021 As at As at Up to 31-3-2022 Up to Freehold Reports Report Discussion and Analysis Non-current assets and disposal groups are classified as held for sale if their carrying amount is intended to be recovered principally through a sale (rather than through continuing use) when the asset (or disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sale of such asset (or disposal group) and the sale is highly probable and is expected to qualify for recognition as a completed sale within one year from the date of classification. Discontinued operation is a component of the Group that has been disposed of or classified as held for sale and represents a major line of business. (ac) Discontinued Operations and non-current assets held for sale NOTE [1] (II) Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements Integrated Annual Report 2021-22 515 d) other non-cancellable commitments, if any, to the extent they are considered material and relevant in the opinion of management. Other commitments related to sales/procurements made in the normal course of business are not disclosed to avoid excessive details. Non-current assets and disposal groups classified as held for sale are measured at lower of their carrying amount and fair value less costs to sell. funding related commitment to associate and joint venture companies; and a) estimated amount of contracts remaining to be executed on capital account and not provided for; Commitments are future liabilities for contractual expenditure, classified and disclosed as follows: (ab) Commitments Where the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under such contract, the present obligation under the contract is recognised and measured as a provision. Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date. Contingent assets are disclosed where an inflow of economic benefits is probable. a present obligation arising from past events, when no reliable estimate is possible. (ii) a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation; and b) uncalled liability on shares and other investments partly paid; (ad) Statement of Cash Flows Statement of Cash Flows is prepared segregating the cash flows into operating, investing and financing activities. Cash flow from operating activities is reported using indirect method adjusting the profit before tax excluding exceptional items for the effects of: i. changes during the period in inventories and operating receivables and payables, transactions of a non-cash nature; Overview Financial Statutory Integrated Management Corporate Property, Plant and Equipment and Capital work-in-progress NOTE [2] Notes forming part of the Consolidated Financial Statements (contd.) 516 On March 23, 2022, Ministry of Corporate Affairs amended Ind AS 16 (specifying accounting of net sale proceeds generated while preparing the asset for its intended use), Ind AS 37 (specifying the composition of the cost of fulfilling the contract), Ind AS 103 (specifying the criteria for applying acquisition method for recognising assets and liabilities) and Ind AS 109 (specifying which fees to be included to apply 10 per cent test). These amendments are effective from April 1, 2022 and will not have material impact on Group's Consolidated Financial Statements. Recent Pronouncement NOTE [1](IV) Based on assessment of the impact of COVID-19 pandemic on the business/economic conditions, the Group expects to recover the carrying value of its assets. The Group will continue to evaluate the pandemic-related uncertainty and update its assessment. NOTE [1](III) The preparation of financial statements in conformity with Ind AS requires that the management of the Group makes estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. The estimates and underlying assumptions made by the management are explained under respective policies. Revisions to accounting estimates include useful life of property, plant and equipment & intangible assets, allowance for expected credit loss, future obligations in respect of retirement benefit plans, expected cost of completion of contracts, provision for rectification costs, fair value/recoverable amount measurement etc. Difference, if any, between the actual results and estimates is recognised in the period in which the results are known. (ae) Key sources of estimation Cash and cash equivalents (including bank balances) shown in the Statement of Cash Flows exclude items which are not available for general use as at the date of Balance Sheet. all other items for which the cash effects are investing or financing cash flows. iii. ii. non-cash items such as depreciation, provisions, unrealised foreign currency gains and losses; and 1.61 (i) 12.90 135.36 2.42 502.03 2.07 1613.85 Owned Computers 13.80 818.78 (0.35) 4572.05 Leased out 9283.72 17.49 26.06 983.69 10033.82 Sub total 107.94 118.65 204.94 15.85 1777.34 189.09 6.27 1620.12 29.55 743.41 5197.24 207.04 ' ' 6.27 6.27 1.56 272.35 Sub total 49 1117.30 2066.11 53.14 12 1.12 བྲཱ'བ 2.42 502.03 2.07 1.49 323.59 26.56 297.03 157.53 1168.30 990.39 12.90 1.61 | | | 878.56 4467.05 107.67 (5.31) 8.17 136.33 4435.40 Buildings 11.29 1003.29 4.24 11.69 (183.75) 1179.59 Sub total (5.18) 2.51 30.80 1002.49 Leased out 3938.28 4610.42 29.55 743.41 4992.30 207.04 13.80 (0.35) 802.93 8960.13 4382.96 1777.34 17.49 983.69 (0.50) I 9736.79 Owned Plant & equipment 3326.56 3258.22 206.34 230.28 133.75 Provision is measured using the cash flows estimated to settle the present obligation and when the effect of time value of money is material, the carrying amount of the provision is the present value of those cash flows. Reimbursement expected in respect of expenditure required to settle a provision is recognised only when it is virtually certain that the reimbursement will be received. Contingent liability is disclosed in case of: (iii) a reliable estimate can be made of the amount of the obligation. (ii) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and Statements Statutory Financial Reports Discussion and Analysis Report Integrated Management Corporate Overview The Group has elected to measure the investments in associates and joint ventures held through unit trusts at FVTPL. For financial assets that are measured at FVTOCI, income by way of interest and dividend, provision for impairment and exchange difference, if any, (on debt instrument) are recognised in profit or loss and changes in fair value (other than on account of above income or expense) are recognised in other comprehensive income and accumulated in other equity. On disposal of debt instruments at FVTOCI, the cumulative gain or loss previously accumulated in other equity is reclassified to profit or loss. In case of equity instruments at FVTOCI, such cumulative gain or loss is not reclassified to profit or loss on disposal of investments. Trade receivables, security deposits, cash and cash equivalents, employee and other advances - at amortised cost. Investments in equity instruments are classified as FVTPL, unless the related instruments are not held for trading and the Group irrevocably elects on initial recognition to present subsequent changes in fair value in other comprehensive income. LARSEN & TOUBRO Debt instruments at FVTPL is a residual category for debt instruments, if any, and all changes are recognised in profit or loss. The asset is held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets; and • Debt instruments that meet the following conditions are subsequently measured at fair value through other comprehensive income [FVTOCI] (unless the same are designated as fair value through profit or loss) The contractual terms of instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. • 7. 6. 5. 4. The contractual terms of instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. 3. Notes forming part of the Consolidated Financial Statements (contd.) Significant Accounting Policies (contd.) 511 (iii) The Group designates certain hedging instruments such as derivatives, embedded derivatives and in respect of foreign currency risk, certain non-derivatives as either fair value hedges, cash flow hedges, or hedges of net investments in foreign operations. Hedges of foreign exchange risk on firm commitments are accounted as cash flow hedges. B. A financial liability is derecognised when the related obligation expires or is discharged or cancelled. Financial liabilities, including derivatives and embedded derivatives, which are designated for measurement at FVTPL are subsequently measured at fair value. Financial guarantee contracts are subsequently measured at the amount of impairment loss allowance or the amount recognised at inception net of cumulative amortisation, whichever is higher. All other financial liabilities including loans and borrowings, trade and other payables are initially recognised at fair value and subsequently measured at amortised cost using Effective Interest Rate (EIR) method. A. (ii) Financial liabilities When making the assessment of whether there has been a significant increase in credit risk since initial recognition, the change in the risk of a default occurring over the expected life of the financial instrument is used instead of the change in the amount of expected credit losses. To make that assessment, the risk of a default occurring on the financial instrument as at the reporting date is compared with the risk of a default occurring on the financial instrument as at the date of initial recognition using reasonable and supportable information, that is available without undue cost or effort. The loss allowance for a financial instrument is measured at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition. If the credit risk on a financial instrument has not increased significantly since initial recognition, the loss allowance for that financial instrument is measured at an amount equal to 12-month expected credit losses. 12-month expected credit losses are portion of the lifetime expected credit losses and represent the lifetime cash shortfalls that will result if default occurs within the 12 months weighted by the probability of default after the reporting date and thus, are not cash shortfalls that are predicted over the next 12 months. Expected credit losses are the weighted average of credit losses with the respective risks of default occurring as the weights. Credit loss is the difference between all contractual cash flows that are due to the Group in accordance with the contract and all the cash flows that the Group expects to receive (i.e. all cash shortfalls), discounted at the original effective interest rate (or credit-adjusted effective interest rate for purchased or originated credit-impaired financial assets). The Group estimates cash flows by considering all contractual terms of the financial instrument (for e.g. prepayment, extension, call and similar options) through the expected life of that financial instrument. NOTE [1] (II) In respect of financial services business, the Group applies a separate model of the expected credit loss for recognising impairment loss on financial assets measured at amortised cost, debt instruments at FVTOCI, lease receivables, trade receivables and other contractual rights to receive cash or other financial asset and financial guarantees not designated as at FVTPL as follows: Impairment of financial assets: The Group recognises impairment loss on trade receivables using expected credit loss model which involves use of a provision matrix constructed on the basis of historical credit loss experience as permitted under Ind AS 109 and is adjusted for forward looking information. On derecognition of a financial asset in its entirety, the difference between the carrying amount at the date of derecognition and the consideration received is recognised in profit or loss. the group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a pass-through arrangement; and a) the group has transferred substantially all the risks and rewards of the asset, or b) the group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. 2. D. the right to receive cash flows from the asset has expired, or 1. A financial asset is primarily derecognised when: C. For all other financial assets, expected credit losses are recognised based on the difference between the contractual cashflows and all the expected cash flows, discounted at the original effective interest rate. ECLs are measured at an amount equal to 12-month expected credit losses or at an amount equal to lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. B. The asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and • (q) Leases Termination benefits such as compensation under employee separation schemes are recognised as expense when the company's offer of the termination benefit can no longer be withdrawn or when the Group recognises the related restructuring costs, whichever is earlier. (iv) Termination benefits: Long term employee benefit costs comprising current service cost and gains or losses on curtailments and settlements, re-measurements including actuarial gains and losses are recognised in the Statement of Profit and Loss as employee benefits expenses. Interest cost implicit in long term employee benefit costs is recognised in the Statement of Profit and Loss under finance cost. The obligation recognised in respect of long term benefits such as compensated absences, long service award etc. is measured at present value of estimated future cash flows expected to be made by the Group and is recognised in a similar manner as in the case of defined benefit plans vide (ii) B Supra. (iii) Long term employee benefits: In case of funded plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans to recognise the obligation on a net basis. Re-measurement, comprising actuarial gains and losses, the return on plan assets (excluding amounts included in net interest on the net defined benefit liability or asset) and any change in the effect of asset ceiling (if applicable) is recognised in other comprehensive income and is reflected in retained earnings and the same is not eligible to be reclassified to profit or loss. Defined benefit costs comprising current service cost, past service cost and gains or losses on settlements are recognised in the Statement of Profit and Loss as employee benefits expense. Interest cost implicit in defined benefit employee cost is recognised in the Statement of Profit and Loss under finance cost. Gains or losses on settlement of any defined benefit plan are recognised when the settlement occurs. Past service cost is recognised as expense at the earlier of the plan amendment or curtailment and when the Group recognises related restructuring costs or termination benefits. The obligation towards defined benefit plans is measured at the present value of the estimated future cash flows using a discount rate based on the market yield on government securities of a maturity period equivalent to the weighted average maturity profile of the defined benefit obligations at the Balance Sheet date. Assets taken on lease are accounted as right-of-use assets and the corresponding lease liability is recognised at the lease commencement date. Defined benefit plans: The employees' gratuity fund schemes and employee provident fund schemes managed by board of trustees established by the company, the post-retirement medical care plan and the Parent Company pension plan represent defined benefit plans. The present value of the obligation under defined benefit plans is determined based on actuarial valuation using the Projected Unit Credit Method. Significant Accounting Policies (contd.) NOTE [1] (II) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO Statements Statutory Financial Reports Integrated Discussion and Analysis Report Management Corporate Overview B. Initially the right-of-use asset is measured at cost which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, as reduced by any lease incentives received. The lease liability is initially measured at the present value of the lease payments, discounted using the Group's incremental borrowing rate. It is remeasured when there is a change in future lease payments arising from a change in an index or a rate, or a change in the estimate of the guaranteed residual value, or a change in the assessment of purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero. The right-of-use asset is measured by applying cost model i.e. right-of-use asset at cost less accumulated depreciation and impairment losses. The right-of-use asset is depreciated using the straight-line method from the commencement date to the end of the lease term or useful life of the underlying asset whichever is earlier. Carrying amount of lease liability is increased by interest on lease liability and reduced by lease payments made. Other investments in debt instruments - at amortised cost (unless the same are designated as fair value through profit or loss), subject to following conditions: 2. A. All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, as follows: Investments in debt instruments that are designated as fair value through profit or loss (FVTPL) - at fair value 1. Financial assets (i) 510 Financial assets and/or financial liabilities are recognised when the Group becomes party to a contract embodying the related financial instruments. All financial assets, financial liabilities and financial guarantee contracts are initially measured at transaction values and where such values are different from fair value, at fair value. Transaction costs that are attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from, as the case may be, the fair value of such financial assets or liabilities on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised in profit or loss. A financial asset and a financial liability is offset and presented on net basis in the balance sheet when there is a current legally enforceable right to set-off the recognised amounts and it is intended to either settle on net basis or to realise the asset and settle the liability simultaneously. (r) Financial instruments (Also refer to policy on depreciation, supra) The Group recognises lease payments in case of assets given on operating leases as income on a straight-line basis. The Group presents underlying assets subject to operating lease in its balance sheet under the respective class of asset. Assets given on lease are classified either as operating lease or as finance lease. A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset. Asset held under finance lease is initially recognised in balance sheet and presented as a receivable at an amount equal to the net investment in the lease. Finance income is recognised over the lease term, based on a pattern reflecting a constant periodic rate of return on Groups' net investment in the lease. A lease which is not classified as a finance lease is an operating lease. Significant Accounting Policies (contd.) NOTE [1] (II) Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements Integrated Annual Report 2021-22 509 (ii) Leases which are short term. (i) Low value leases; and Lease payments associated with following leases are recognised as expense on straight-line basis: Integrated Annual Report 2021-22 Notes forming part of the Consolidated Financial Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [1] (II) (iv) Income which relates to the Group as a whole and not allocable to segments is included in "unallocable corporate income/ (expenditure) [net]". (iii) Most of the common costs are allocated to segments mainly on the basis of the respective segment revenue estimated at the beginning of the reporting period. Expenses that are directly identifiable with/allocable to segments are considered for determining the segment result. In respect of (a) financial services segment and (b) Developmental Projects segment relating to power generation asset given on finance lease, the finance costs on borrowings are accounted as segment expenses. Segment revenue includes sales and other operational revenue directly identifiable with/allocable to the segment including (a) inter- segment revenue and (b) profit on sale of stake in the subsidiary and/or joint venture companies under developmental projects segment and realty business grouped under "Others" segment. (i) Operating segments are those components of the business whose operating results are regularly reviewed by the chief operating decision making body in the Group to make decisions for performance assessment and resource allocation. The reporting of segment information is the same as provided to the management for the purpose of the performance assessment and resource allocation to the segments. Segment accounting policies are in line with the accounting policies of the Group. In addition, the following specific accounting policies have been followed for segment reporting: (y) Accounting and reporting of information for Operating Segments all resulting exchange differences are recognised in other comprehensive income and accumulated in equity as foreign currency translation reserve for subsequent reclassification to profit or loss on disposal of such foreign operations. The portion of foreign currency translation reserve attributed to non-controlling interests is reflected as part of non-controlling interests. income and expenses are translated at average exchange rate for the reporting period; and (v) C. assets and liabilities are translated at the closing rate at the date of that Balance Sheet; A. (iv) Financial statements of foreign operations whose functional currency is different than Indian Rupee are translated into Indian Rupee as follows: (iii) Exchange rate as of the date on which the non-monetary asset or non-monetary liability is recognised on payment or receipt of advance consideration is used for initial recognition of related asset, expense or income. C. exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur or included in the net investment in foreign operation, and are recognised initially in other comprehensive income and reclassified from equity to profit or loss on repayment of the monetary items. exchange differences on transactions entered into to hedge certain foreign currency risks; and B. Significant Accounting Policies (contd.) NOTE [1] (II) B. Segment result represents profit before interest and tax and includes margins on inter-segment capital jobs, which are reduced in arriving at the profit before tax of the Group. It also includes the finance costs incurred on interest bearing advances with corresponding credit included in "unallocable corporate income/(expenditure) [net]". Segment results are not adjusted for any exceptional item. (vi) Segment assets and liabilities include those directly identifiable with the respective segments. In respect of (a) financial services segment, and (b) Developmental Projects segment relating to power generation asset given on finance lease, segment liabilities include borrowings as the finance costs on the borrowings are accounted as segment expenses. Investment in joint ventures and associates identified with a particular segment are reported as part of the segment assets of those respective segments. Unallocable corporate assets and liabilities represent the assets and liabilities that relate to the Group as a whole. (vii) Segment non-cash expenses forming part of segment expenses includes the fair value of the employee stock options which is accounted as employee compensation cost [Note 1(w) Supra] and is allocated to the segment. (i) the Group has a present obligation (legal or constructive) as a result of a past event; and Provisions are recognised only when: (aa) Provisions, contingent liabilities and contingent assets Transaction or event which is recognised outside profit or loss, either in other comprehensive income or in equity or in case of business combination, is recorded along with the tax as applicable. Deferred tax assets in respect of unutilised tax credits which mainly relate to minimum alternate tax are recognised, to the extent it is probable that such unutilised tax credits will get realised, in the period in which such determination is made. Deferred tax assets relating to unabsorbed depreciation/business losses/losses under the head "capital gains"/other temporary differences are recognised and carried forward to the extent of available taxable temporary differences or where there is convincing other evidence that sufficient future taxable income will be available against which such deferred tax assets can be realised. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax liabilities are generally recognised for all taxable temporary differences including the temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the Group's financial statements and the corresponding tax bases used in computation of taxable profit and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date. Tax on income for the current period is determined on the basis of taxable income (or on the basis of book profits wherever minimum alternate tax is applicable) and tax credits computed in accordance with the provisions of the applicable tax laws, and using estimates and judgments based on the expected outcome of assessments/appeals and the relevant rulings in the areas of allowances and disallowances. (z) Taxes on income Significant Accounting Policies (contd.) NOTE [1] (II) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO Statements Statutory Financial Reports Integrated Discussion and Analysis Report Management Corporate Overview 514 (viii) Segment revenue resulting from transactions with other business segments is accounted on the basis of transfer price which are either determined to yield a desired margin or agreed on a negotiated basis. Notes forming part of the Consolidated Financial Statements (contd.) 4056.93 Notes forming part of the Consolidated Financial Statements 513 Statutory Financial Reports Integrated Discussion and Analysis Report Management Corporate Overview 512 (iii) Finished goods and stock-in-trade (in respect of goods acquired for trading) at lower of weighted average cost or net realisable value. Cost includes costs of purchases, costs of conversion and other costs incurred in bringing the inventories to their present location. Taxes which are subsequently recoverable from taxation authorities are not included in the cost. Manufacturing work-in-progress at lower of weighted average cost including related overheads or net realisable value. In some cases, manufacturing work-in-progress are valued at lower of specifically identifiable cost or net realisable value. In the case of qualifying assets, cost also includes applicable borrowing costs vide policy relating to borrowing costs. (ii) (i) Raw materials, components, construction materials, stores, spares and loose tools at lower of weighted average cost or net realizable value. However, these items are considered to be realisable at cost if the finished products in which they will be used, are expected to be sold at or above cost. Statements Inventories are valued after providing for obsolescence, as under: (iv) Compound financial instruments issued by the Group which can be converted into fixed number of equity shares at the option of the holders irrespective of changes in the fair value of the instrument are accounted by recognising the liability and the equity components separately. The liability component is initially recognised at the fair value of a comparable liability that does not have an equity conversion option. The equity component is initially recognised at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. The directly attributable transaction costs are allocated to the liability and the equity components in proportion to their initial carrying amounts. Subsequent to initial recognition, the liability component of the compound financial instrument is measured at amortised cost using the effective interest method. The equity component of a compound financial instrument is not remeasured subsequently. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. Any gain or loss recognised in other comprehensive income and accumulated in equity at that time remains in equity and is recognised in profit or loss when the forecast transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognised in profit or loss. The cash flow hedges are allocated to the forecast transactions on gross exposure basis. Where the hedged forecast transaction results in the recognition of a non-financial asset, such gains/losses are transferred from hedge reserve (but not as reclassification adjustment) and included in the initial measurement cost of the non-financial asset. In case of time period related hedges, the premium element and the spot element of a forward contract is separated and only the change in the value of the spot element of the forward contract is designated as the hedging instrument. Similarly, wherever applicable, the foreign currency basis spread is separated from the financial instrument and is excluded from the designation of that financial instrument as the hedging instrument in case of time period related hedges. The changes in the fair value of the premium element of the forward contract or the foreign currency basis spread of the financial instrument is accumulated in a separate component of equity as 'cost of hedging reserve'. The changes in the fair value of such premium element or foreign currency basis spread are reclassified to profit or loss as a reclassification adjustment on a straight-line basis over the period of the forward contract or the financial instrument. Cash flow hedges: In case of transaction related hedges, the effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in other comprehensive income and accumulated in equity as 'hedging reserve'. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss. Amounts previously recognised in other comprehensive income and accumulated in equity relating to the effective portion are reclassified to profit or loss in the periods when the hedged item affects profit or loss, in the same head as the hedged item. The effective portion of the hedge is determined at the lower of the cumulative gain or loss on the hedging instrument from inception of the hedge and the cumulative change in the fair value of the hedged item from the inception of the hedge and the remaining gain or loss on the hedging instrument is treated as ineffective portion. Fair value hedges: Changes in fair value of the designated portion of derivatives that qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. The fair value adjustment to the carrying amount of the hedged item arising from the hedged risk is amortised to profit or loss from that date. B. A. Significant Accounting Policies (contd.) (s) Inventories LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [1] (II) A. exchange differences on foreign currency borrowings relating to assets under construction for future productive use, are included in the cost of those assets when such exchange differences are regarded as an adjustment to finance costs on those foreign currency borrowings; Transactions in currencies other than the Group's functional currency are recorded on initial recognition using the exchange rate at the transaction date. At each Balance Sheet date, foreign currency monetary items are reported at the closing spot rate. Non-monetary items that are measured in terms of historical cost in foreign currency are not translated. Exchange differences that arise on settlement of monetary items or on reporting of monetary items at each Balance Sheet date at the closing spot rate are recognised in the Statement of Profit and Loss in the period in which they arise except for: (ii) (i) The functional currency and presentation currency of the Group is Indian Rupee. Functional currency of the Group and foreign operations has been determined based on the primary economic environment in which the Group and its foreign operations operate considering the currency in which funds are generated, spent and retained. The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share. (x) Foreign currencies The stock options granted to employees in terms of the Group's Stock Options Schemes, are measured at the fair value of the options at the grant date. The fair value of the options is treated as discount and accounted as employee compensation cost over the vesting period on a straight-line basis. The amount recognised as expense in each year is arrived at based on the number of grants expected to vest. If a grant lapses after the vesting period, the cumulative discount recognised as expense in respect of such grant is transferred to the retained earnings. The share-based payment equivalent to the fair value as on the date of grant of employee stock options granted to key managerial personnel is disclosed as a related party transaction in the year of grant. Borrowing costs include finance costs calculated using the effective interest method, finance charges in respect of assets acquired on lease and exchange differences arising on foreign currency borrowings, to the extent they are regarded as an adjustment to finance costs. In cases where hedging instruments are acquired for protection against exchange rate risk related to borrowings and are accounted as hedging a time-period related hedge item, the borrowing costs also include the amortisation of premium element of the forward contract and foreign currency basis spread as applicable, over the period of the hedging instrument. Borrowing costs net of any investment income from the temporary investment of related borrowings that are attributable to the acquisition, construction or production of a qualifying asset are capitalised/inventoried as part of cost of such asset till such time the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognised in profit or loss in the period in which they are incurred. (w) Share-based payment arrangements The issue expenses of securities which qualify as equity instruments are written off against securities premium. Borrowing Costs The fair value of the stock options which are treated as expense, if any, in respect of shares allotted pursuant to Stock Options Scheme. B. A. The difference between the face value of the equity shares and the consideration received in respect of shares issued. Securities premium includes: (ii) (i) (v) (u) Securities premium Cash and bank balances include fixed deposits, margin money deposits, earmarked balances with banks and other bank balances which have restrictions on repatriation. Short term and liquid investments being subject to more than insignificant risk of change in value, are not included as part of cash and bank balances. (t) Cash and bank balances Assessment of net realisable value is made at each reporting period end and when the circumstances that previously caused inventories to be written-down below cost no longer exist or when there is clear evidence of an increase in net realisable value because of changed economic circumstances, the write-down, if any, in the past period is reversed to the extent of the original amount written-down so that the resultant carrying amount is the lower of the cost and the revised net realisable value. (iv) Completed property/work-in-progress (including land) in respect of property development activity at lower of specifically identifiable cost or net realisable value. Significant Accounting Policies (contd.) Integrated Annual Report 2021-22 4718.36 0.87 51.06 1340.77 Buildings 3 Plant & equipment 4 Computers 5 Office equipment 6 Furniture & fixtures 2 7 8 Aircraft 9 Ships 10 Shiplift, marine structures and related assets and Breakwater structures (f) Ageing of Capital work-in-progress Minimum useful life (in years) Maximum useful life (in years) Vehicles 2 3 3 2 3 3 3 2 5 20 1 Leasehold land Class of assets Integrated Annual Report 2021-22 Notes forming part of the Consolidated Financial Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [2] (contd.) (c) The cumulative impairment is as below: Particulars As at 1-4-2021 Add: Impairment during the year Add: Foreign currency fluctuation no. Less: Reversal of impairment on sale of assets 973.94 0.31 4.22 (742.33) As at 31-3-2022 236.14 (d) Owned assets given on operating lease have been presented separately under respective class of assets as "Leased out" pursuant to Ind AS 116 "Leases". (e) Range of useful life of property, plant and equipment is as below: Sr. crore 15 99 61 Total capital work-in-progress 983.95 388.37 As on the date of balance sheet, there is no capital work-in-progress project(s) whose completion is overdue or has exceeded the cost, based on the approved plan. 102.02 47.30 37.05 1170.32 271.83 79.59 Projects temporarily suspended 36.95 Investment property Cost Transfer Depreciation Transfer Impairment crore Book value Class of assets (to)/from NOTE [3] 388.37 Total More than 3 years 35 7 15 10 10 18 18 14 50 crore As at 31-3-2022 As at 31-3-2021 Particulars Less than Projects in progress 1-2 years 2-3 years 1 year 983.95 102.02 47.30 More than 3 years 37.05 1170.32 Total Less than 1 year 271.83 79.59 1-2 years 2-3 years 36.95 517 Notes: (a) Carrying value of property, plant and equipment pledged as collateral for liabilities and/or commitments as at March 31, 2022 is 1568.27 crore (previous year: 1609.66 crore). (b) Depreciation for the year includes impact of foreign currency fluctuation 1.04 crore (previous year: (0.88) crore) and depreciation capitalised 0.23 crore (previous year: 1.10 crore) LARSEN & TOUBRO 264.26 50.34 20.68 71.02 193.24 213.67 Shiplift, marine structures and related assets 683.07 186.62 683.07 Breakwater structures 233.43 233.43 39.36 Leasehold Improvements 406.27 0.28 42.02 0.41 237.25 172.75 71.70 13.87 2.91 | | | 38.57 256.84 147.80 161.10 0.68 0.49 0.18 0.68 39.25 257.33 147.98 161.78 Other assets Aircraft 244.45 Ships 264.01 0.25 || 244.45 57.83 0.35 (to)/from 29.58 419.05 0.08 0.20 0.32 0.08 111.76 0.20 0.32 2.08 1524.94 (7.58) 24.04 1408.03 (4.41) (21.09) 227 16.84 305.72 113.33 40.28 123.95 1082.28 1164.13 1.47 378.12 9386.76 973.94 236.14 334.26 8222.87 10578.87 11386.29 973.94 Add: Capital work-in-progress [Note 2(f)] 1170.32 11749.19 388.37 11774.66 16.84 761.98 194.07 189.06 44.37 Sub total 1831.23 0.28 42.27 0.41 0.35 29.58 1844.26 667.10 Total 20583.10 2.89 1812.71 (165.10) 35.75 1.88 Previous year 17516.36 3666.95 (4.17) (30.99) 2065.70 20201.77 8222.87 565.05 20583.10 7174.60 11888 31.92 269.17 413.90 445.82 5.01 282.32 405.31 251.34 As at 1-4-2021 property Deductions (2.18) 40.18 2.43 (2.18) 40.18 I I 480.08 Sub total 2.43 14.36 465.72 Owned Furniture & fixtures 0.01 481.84 12.87 0.26 167.08 148.47 Leased out 0.01 Vehicles 411.44 0.24 20.26 318.74 0.02 13 1.73 (1.89) 49.93 289.25 481.06 Owned 25.03 'ཤྲུ དྷུ'སྶ 3.21 44.30 413.12 Sub total 1.68 Leased out 3.21 44.30 0.06 0.01 481.84 12.87 1.62 (0.05) 52.22 0.54 589.72 Owned Office equipment 725.34 496.55 1347.04 Leased out 51.06 1.56 1.49 272.35 1123.57 2072.38 53.14 1.12 6.27 496.55 725.34 0.87 0.02 Sub total 589.74 0.26 313 1.33 (0.03) 70.53 0.51 422.63 630.34 13.38 0.35 0.02 1.33 0.51 70.53 (0.03) 422.63 630.32 13.38 0.35 616 1.62 52.22 (0.05) 0.54 14.36 7.08 0.12 ' Total 2585.00 277.16 146.78 Previous year 2155.03 470.63 125.44 166.10 2585.00 1867.94 104.75 3008.94 133.40 88.39 34.02 4.26 938.82 143.03 5.18 1719.73 1507.60 49.76 4.26 187.42 5.18 5.18 2816.34 2446.42 41.33 5.18 1096.61 44.39 15.74 As at 31-3-2022 Up to 31-3-2021 For the plant and period property Deductions As at plant and 31-3-2022 Up to 31-3-2021 As at 31-3-2022 As at 31-3-2022 As at 31-3-2021 equipment equipment Land Buildings 967.47 1617.53 250.00 27.16 146.37 0.41 1141.00 28.65 17.20 Additions 13.52 5.18 73 1.73 (1.89) 50.05 296.33 25.03 495.42 0.06 7.28 7.16 - - 162.08 0.24 167.10 148.49 0.01 0.02 0.02 ' ' 7.20 176.23 0.02 20.26 325.94 0.24 Add: Capital work-in-progress [Note 3(f)] 1146.64 1200.36 Notes: 3962.98 3646.78 (a) Carrying value of investment property pledged as collateral for liabilities and/or commitments and having restriction on title as at March 31, 2022: Nil (previous year: 0.16 crore). (b) Useful life of building included in investment property: 3 to 60 years. 518 55.32 I 0.17 1.00 0.67 1.01 2.91 42.16 250.34 404.64 54.31 183.51 169.24 0.24 133.40 856.64 Significant Accounting Policies (contd.) (*) Considered good - 43043.65 780.39 1246.06 466.56 727.28 86.55 1739.90 38.97 94.82 2964.19 57.19 11.06 27666.69 Total More than 3 years 2-3 years 1-2 years 8699.53 120.06 Less than 6 months - 6 months 1 year 26.51 Gross trade receivables Current assets: Financial assets - Cash and cash equivalents NOTE [14] 42229.78 3405.60 Less: Allowance for expected credit loss 190.66 45635.38 - Credit impaired 1620.68 929.59 115.76 64.75 35.18 1878.80 192.48 8.74 3222.60 8846.10 27772.57 1126.36 146.74 2985.72 Not due * crore 46138.92 Gross trade receivables 244.24 63.51 7.24 34.04 - Credit impaired 30436.22 Considered good Disputed: - Credit impaired 831.20 47452.50 1557.88 508.42 835.32 73.12 - 10463.25 2595.78 2162.74 Outstanding for following periods from due date of payment As at 31-3-2021 Disputed: - Credit impaired - Considered good Undisputed: Particulars 3892.51 Less: Allowance for expected credit loss 50031.43 183.02 137.84 3400.74 1564.71 1196.60 19.08 45.18 972.70 Particulars Balance with banks Cheques and drafts on hand Cash on hand 5.04 114.66 32721.18 As at 31-3-2021 As at 31-3-2022 26911.36 Less: Net fair value changes Less: Allowance for expected credit loss 59.60 316.34 Considered good - secured crore 393.32 2867.98 566.32 5182.93 944.01 1568.20 771.04 Particulars 26791.66 32345.24 Considered good - unsecured 6136.47 44.23 163.16 Less: Net fair value changes 1103.08 87.69 257.23 Less: Allowance for expected credit loss 6556.86 Having significant increase in credit risk 8062.63 8428.98 8534.40 444.65 27.12 46.56 9092.51 616.97 Less: Allowance for expected credit loss Less: Impairment 376.20 1766.97 151.53 6.69 136.43 Statements Statutory Financial Reports Integrated Management Corporate Overview 7161.18 13373.52 LARSEN & TOUBRO 11.84 5743.64 456.86 As at 31-3-2021 As at 31-3-2022 6673.01 395.10 crore 524 Fixed deposits with banks (maturity less than 3 months) 12.46 6689.67 13770.24 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [15] Current assets: Financial assets - Other bank balances 135.97 616.49 As at 31-3-2021 As at 31-3-2022 2462.20 crore Current Assets: Financial Assets - Loans towards financing activities NOTE [16] [1] Real Estate (Regulation and Development) Act, 2016 Cash and bank balances not available for immediate use Margin money deposits with banks Earmarked balances with banks - others Earmarked balances with banks - Section 4(2)(1)(D) of RERA[1] Earmarked balances with banks - unclaimed dividend Fixed deposits with banks Particulars 74.04 971.16 2457.96 74.31 6.09 90.22 180.56 320.71 387.03 849.22 As at 31-3-2021 Manufacturing work-in-progress As at 31-3-2022 701.61 Particulars crore Current assets: Inventories NOTE [11] Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO Raw materials [include goods-in-transit 82.31 crore (previous year: 76.78 crore)] Components [include goods-in-transit 15.24 crore (previous year: 9.58 crore)] Construction materials [include goods-in-transit 116.74 crore (previous year: 39.17 crore)] Statements 313.01 Finished goods 5943.32 3553.67 3645.49 10.28 12.47 287.75 261.37 290.19 Stores and spares [include goods-in-transit 1.76 crore (previous year: 4.60 crore)] Loose tools [include goods-in-transit 0.01 crore (previous year: 0.01 crore)] Property development projects (including land) 361.31 319.61 Stock-in-trade (in respect of goods acquired for trading) [include goods-in-transit 32.73 crore (previous year: 44.34 crore)] 86.01 93.35 ₹ Statutory Financial Reports Discussion and Analysis Report Integrated 2.39 518.91 715.50 228.07 832.02 283.91 1.75 357.91 37.90 40.00 395.81 469.69 As at 31-3-2021 As at 31-3-2022 429.69 94.34 89.03 2162.97 29.64 1420.19 Management Corporate Overview 5949.67 6077.62 2607.12 3262.10 3307.65 2624.20 80.45 145.77 0.61 79.84 144.85 0.92 As at 31-3-2021 As at 31-3-2022 crore 5820.54 Note: During the year 37.21 crore (previous year: 8.15 crore) was recognised as expense towards write-down of inventories (net). NOTE [12] Current assets: Financial assets - Investments 523 126.73 42229.78 46138.92 76.80 971.05 844.32 937.42 Integrated Annual Report 2021-22 Less: Allowance for expected credit loss Credit impaired 42078.56 46037.03 44639.84 2561.28 2955.09 Less: Allowance for expected credit loss 1014.22 Notes forming part of the Consolidated Financial Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [13][a] 30396.09 - Considered good Undisputed: Total More than 3 years 2-3 years 1-2 years - Less than 6 months 6 months 1 year Not due Particulars crore Outstanding for following periods from due date of payment As at 31-3-2022 Current assets: Financial assets - Trade receivables ageing 48992.12 10438.28 17.73 Considered good - unsecured 25.09 As at 31-3-2021 As at 31-3-2022 158.41 crore Current assets: Financial assets - Trade receivables NOTE [13] Other investments 97.91 Commercial paper Mutual funds Debentures and bonds Government and trust securities Preference shares Equity shares Particulars Collateral borrowing and lending obligation (CBLO) 0.68 3469.53 2336.16 As at 31-3-2021 As at 31-3-2022 Considered good - secured Particulars crore 31011.23 801.31 1359.94 29792.51 2495.29 299.98 1499.57 20143.53 12918.05 7331.66 7891.72 24.49 Credit Impaired Less: Net fair value changes 1342.94 430.85 The details of the grants under the aforesaid scheme are summarised below: (B) 528 Options can be exercised anytime within a period of 7 years from the date of grant and would be settled by way of issue of equity shares. Management has discretion to modify the exercise period. The grant of options to the employees under the stock option schemes is on the basis of their performance and other eligibility criteria. The options are vested equally over a period of 4 years for series 2003(B) and 5 years in the case of series 2006(A), subject to the discretion of the management and fulfillment of certain conditions. ii. Sr. i. (h) Stock option scheme of the Parent Company: NOTE [20] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements Integrated Annual Report 2021-22 527 (A) Terms: (g) The aggregate number of equity shares issued pursuant to contract, without payment being received in cash in immediately preceding five years ended on March 31, 2022 - Nil (period of five years ended March 31, 2021: Nil). 2003(B) Series reference lii. Vesting commences on Grant dates ii. 267.10 267.10 7.80 2006(A) 7.80 i. 2020-21 2021-22 2020-21 2021-22 No. Grant price (*) (f) The aggregate number of equity shares allotted as fully paid up by way of bonus shares in immediately preceding five years ended March 31, 2022 are 46,67,64,755 (period of five years ended March 31, 2021: 46,67,64,755 shares). [2] The equity shares will be issued at a premium of 38.30 crore (previous year: 42.74 crore) 0.36[2] 11.88 19,25,58,158 13.70 % shares % 19,24,67,386 As at 31-3-2021 Number of Shareholding As at 31-3-2022 Name of the shareholders (d) Shareholder holding more than 5% of equity shares as at the end of the year: The Company has only one class of share capital, i.e., equity shares having face value of 2 per share. Each holder of equity share is entitled to one vote per share. (c) Terms/rights attached to equity shares: 280.91 Number of Shareholding shares 19,25,58,158 13.71 13.70 L&T Employees Trust Life Insurance Corporation of India * crore (at face value) 17,81,564 0.34[2] as fully paid to be issued equity shares crore (at face value) Number of As at 31-3-2021 [1] Note 20(h) infra for terms of employee stock option schemes As at 31-3-2022 Number of equity shares to be issued as fully paid 17,18,419 Employee stock options granted and outstanding [1] Particulars (e) Shares reserved for issue under options outstanding on un-issued share capital: 16,69,42,875 23-5-2003 onwards 23-5-2004 onwards 1-7-2007 onwards 1-7-2008 onwards iv. Options granted and outstanding at the beginning of the year 6,63,275 231.58 4,73,826 (C) Options allotted 7.80 1,04,000 238.99 182.90 (B) Options granted 252.09 25,21,389 241.90 17,81,564 (A) Options granted and outstanding at the beginning of the year 5,50,769 (D) Options lapsed 1,40,088 253.90 (F) Weighted average fair values of options granted during the year is ₹1113.62 (previous year: 834.24) per option. The fair value of the options granted under the stock option scheme is treated as discount and accounted as employee compensation over the vesting period. (E) (F) Options exercisable at the end of the year out of (E) supra (D) Weighted average share price at the date of exercise for stock options exercised during the year is ₹ 1635.25 (previous year: 1001.47) per share. 255.06 5,07,657 260.33 4,00,060 241.90 17,81,564 224.86 17,18,419 (E) Options granted and outstanding at the end of the year 260.10 1,80,550 exercise price 1,40,45,55,297 Weighted average Weighted average exercise price (₹) viii. Options granted and outstanding at the end of the year, of which 71,910 64,900 vii. Options exercised 1,75,675 1,32,958 3,71,930 2,79,959 4,875 1,04,000 vi. Options granted 7,130 v. Options lapsed 16,08,414 23,75,454 1,45,935 1,73,150 1,78,839 1,73,150 4,08,926 5,91,365 14,38,460 16,08,414 Options vested No. of stock options Particulars 2020-21 2021-22 ix. Weighted average remaining contractual life of options (in years) (C) The number and weighted average exercise price of stock options are as follows: 4.23 11,24,332 4,84,082 3,89,610 10,48,850 4.29 1,49,575 5.74 5.67 2,69,509 Options yet to vest 23,575 10,450 No. of stock options 281.01 1,40,50,29,123 0.13 114.40 48.10 109.64 0.31 4.76 414.16 48.41 395.77 0.52 414.73 396.29 As at 31-3-2021 As at 31-3-2022 crore 0.57 844.34 958.08 1073.50 NOTE [19] 816.24 753.00 Less: Allowance for expected credit loss 816.24 753.00 789.13 725.89 27.11 27.11 51.06 48.49 837.93 1363.54 942.04 Other loans and advances Other current assets Deferred credit sale of ships Embedded derivative receivables 167.09 171.29 As at 31-3-2021 As at 31-3-2022 crore 41379.03 109.05 912.09 42269.20 Others loans Considered good - unsecured Loans and advances to related parties Particulars Current assets: Financial assets - Other loans NOTE [17] Considered good - unsecured 280.34 68.26 235.35 525 Unbilled Revenue Forward contract receivables Advances recoverable in cash Joint ventures Associates Advances to related parties: Less: Allowance for expected credit loss Considered good - unsecured Security deposits Particulars Current assets: Financial assets - Others NOTE [18] Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements Integrated Annual Report 2021-22 Doubtful advances: crore Particulars Due from customers (construction and project related activity) 1,40,50,29,123 Equity shares of 2 each Issued, subscribed and fully paid up: 5025.00 8037.00 25,12,50,00,000 40,18,50,00,000 281.01 crore shares crore As at 31-3-2022 Number of Equity shares of 2 each Authorised: [1] Particulars As at 31-3-2021 Number of shares 1,40,45,55,297 [1] Pursuant to the approval of the Scheme of Arrangement of Merger of L&T Hydrocarbon Engineering Limited with the Parent Company, the authorised share capital of L&T Hydrocarbon Engineering Limited is added to the authorised share capital of the Parent Company, w.e.f. Appointed Date i.e. April 1, 2021. (b) Reconciliation of the number of equity shares and share capital: 280.78 1,40,38,92,022 6,63,275 280.91 0.10 4,73,826 1,40,45,55,297 Issued, subscribed and fully paid up equity share outstanding at the beginning of the year Add: Shares issued on exercise of employee stock options during the year Issued, subscribed and fully paid up equity shares outstanding at the end of the year crore Number of shares * crore Number of shares 2020-21 2021-22 Particulars 280.91 (a) Share capital authorised, issued, subscribed and paid up: Contract assets [Note 47(d)(i)] Equity share capital Notes forming part of the Consolidated Financial Statements (contd.) 32448.31 35238.27 As at 31-3-2021 As at 31-3-2022 crore 3251.68 16805.40 3840.04 Others Less: Allowance for expected credit loss Other loans and advances Government grant receivable Advance recoverable other than in cash Retention money including unbilled revenue 526 15170.83 52043.67 8014.70 47619.14 6878.77 LARSEN & TOUBRO Statements Statutory Financial Reports Discussion and Analysis Report Integrated Management Corporate Overview 191.36 54791.48 60132.89 47.54 11.72 11.72 1.60 1.60 102.21 26.98 NOTE [20] 162.97 173.24 Discussion and Analysis Report 113.80 163.24 17.31 9.00 108.76 1395.07 341.69 300.71 8.03 59.40 0.17 New product design and development 9.31 0.13 0.31 0.46 7.95 Customer contracts and relationship 3350.50 17.67 8.36 96.65 24.01 25.67 6.24 172.08 8.98 133.51 15943.57 16088.53 276.61 Up to As at 31-3-2022 31-3-2022 As at 31-3-2021 Fare collection rights 16527.71 131.65 Specialised software 1632.68 715.79 0.32 18.31 11.21 109.00 Technical know-how 114.29 6.37 Trade names 311.66 0.17 6.24 16659.36 439.18 1736.76 1331.97 120.66 88.62 305.59 118.75 205.66 192.91 0.48 0.31 17.99 420.72 31.40 11.21 115.70 22413.64 2872.68 1.47 909.01 25.42 9.00 115.31 3684.27 18729.37 19197.76 22070.44 21563.56 52.18 46.49 50.19 22070.44 1966.58 906.53 42.98 Add: Intangible assets under development [Note 5(c)] 43.41 2872.68 79.23 112.02 18808.60 19309.78 (a) Amortisation for the year includes impact of foreign currency fluctuation ₹ 0.05 crore (previous year: ₹ 0.06 crore) and depreciation capitalised 0.37 crore (previous year: Nil) (b) Details of addition in other intangible assets: crore 458.40 Previous year Total 73.57 8.12 0.86 1.36 3376.53 882.86 1.16 376.80 7.45 1268.27 2108.26 2467.64 Rights under licensing agreement 124.29 4.56 128.85 3.35 21.11 0.49 24.95 103.90 120.94 Platforms and courses 76.91 76.91 3.34 3.34 Foreign Classified currency as held for Deductions fluctuation sale 2021-22 year 31-3-2022 (e) The fair values of investment property have been determined by internal architectural department or independent valuer, as appropriate. Fair value of property that are evaluated by registered independent valuers as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017, amounted to 2746.81 crore (previous year: 1616.64 crore). Valuation is based on government rates, market research, market trend and comparable values as considered appropriate. (f) Ageing of Capital work-in-progress Particulars Projects in progress crore As at 31-3-2022 As at 31-3-2021 Less than 1-2 years 2-3 years 1 year (d) Fair value of investment property as at March 31, 2022: 6679.74 crore (previous year: 5918.31 crore). 188.47 165.81 More than 3 years 699.39 1146.64 Total Less than 1-2 years 2-3 years 1 year 161.39 261.04 194.89 More than 3 years 583.04 1200.36 Total Projects temporarily suspended Total capital work-in-progress 188.47 92.97 92.97 0.64 8.14 85.37 252.99 Corporate Overview Management Integrated Discussion and Analysis Report Statutory Financial Reports Statements LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [3] (contd.) (c) Amounts recognised in the Statement of Profit and Loss in respect of investment property: 9.91 crore 2020-21 Sr. No. Particulars 1 Rental income derived from investment property 73.65 70.06 2 3 Direct operating expenses incurred on investment property that generated rental income Direct operating expenses incurred on investment property that did not generate rental income 2021-22 165.81 699.39 1146.64 161.39 261.04 583.04 1200.36 8066.96 Note: (a) Impairment recognised in the Statement of Profit and Loss during the year is Nil (previous year: 1.82 crore). 519 Integrated Annual Report 2021-22 Notes forming part of the Consolidated Financial Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [5] Other intangible assets and intangible assets under development crore 7476.98 8066.96 Cost Book value Class of assets Foreign Classified As at Business 1-4-2021 combination As at Additions currency as held for Deductions fluctuation sale Up to Business For the Amortisation 49.92 49.92 7526.90 8116.88 As at 31-3-2021 As on the date of balance sheet, there is no capital work-in-progress project(s) whose completion is overdue or has exceeded the cost, based on the approved plan. NOTE [4] Goodwill crore Cost Impairment Book value Class of assets As at Business 1-4-2021 combination Additions Foreign currency fluctuation Classified Goodwill on consolidation 8116.88 Previous year 8059.50 37.40 40.83 2.49 0.50 14.06 as held for Deductions sale 627.88 As at 31-3-2022 As at 31-3-2022 As at 31-3-2022 31-3-2021 combination 2020-21 194.89 Fare collection Rights 202.45 343.45 28601.56 36840.78 Considered good - unsecured Less: Allowance for expected credit loss 14348.10 377.86 13342.63 255.20 Less: Impairment Less: Allowance for expected credit loss 1942.08 12028.16 11427.73 Having significant increase in credit risk 6098.04 Less: Allowance for expected credit loss 733.03 3200.50 178.74 5365.01 3021.76 Credit impaired 1659.70 As at 31-3-2021 37184.23 As at 31-3-2022 28804.01 Considered good - secured Mutual funds Security receipts Units of fund Other investments NOTE [7] Non-current assets: Financial assets - Loans towards financing activities crore As at 31-3-2022 610.72 As at 31-3-2021 121.67 544.89 87.00 204.68 101.15 1008.97 1004.47 31.39 4886.22 4114.88 31.20 218.05 7081.51 61.36 5945.14 crore Particulars 2176.05 Debentures and bonds 5048.21 1433.94 Security deposits Considered good - unsecured Less: Allowance for expected credit loss Cash and bank balances not available for immediate use Fixed deposits with banks (maturity more than 12 months) Forward contract receivables Embedded derivative receivables Other receivables [1] [1] mainly includes lease receivables and recoverable from joint ventures and banks NOTE [10] Particulars Other non-current assets Capital advances: Secured Unsecured Advance recoverable other than in cash Current tax receivable (net) 522 199.17 276.77 Class of assets 113.80 Particulars Non-current assets: Financial assets - Others NOTE [9] Less: Allowance for expected credit loss 3706.81 742.11 46736.84 1341.40 52631.67 521 Integrated Annual Report 2021-22 Notes forming part of the Consolidated Financial Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [8] Non-current assets: Financial assets - Other loans Particulars crore As at 31-3-2022 As at 31-3-2021 Loans and advances to related parties Joint ventures and associates, considered good - unsecured 1306.65 Less: Allowance for expected credit loss 1139.03 1149.30 1139.03 167.62 10.27 Considered good - unsecured Less: Allowance for expected credit loss Government and trust securities Others loans Equity instruments Customer contracts and relationship 0.71 0.71 Rights under licensing agreement 124.29 124.29 Platforms and courses 76.91 170.78 76.91 249.94 1.87 420.72 406.22 458.40 Total (c) Ageing of Intangible assets under development 520 Particulars Projects in progress Projects temporarily suspended Total capital work-in-progress crore 52.18 As at 31-3-2022 1.87 0.13 Acquired - external 131.65 Internal development Preference shares Total Internal development Acquired external Total 131.65 144.68 144.68 0.13 Specialised software 111.92 205.66 49.60 134.46 Technical know-how 6.37 6.37 2.79 2.79 New product design and development 93.74 As at 31-3-2021 184.06 8.83 Statements LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [5] (contd.) (1) Borrowing cost capitalised in accordance with Ind AS 23 "Borrowing Costs" is as follows: Class of Assets Capital work-in-progress crore 2021-22 2020-21 Property, plant and equipment - building Total Investment property - building 12.63 27.75 13.11 21.46 40.86 (2) The average borrowing cost used for capitalisation is 7.29% (previous year: 6.56%). Non-current assets: Financial assets - Other investments NOTE [6] Less than Particulars Statutory Financial Reports Integrated Discussion and Analysis Report Notes: Management 1-2 years 2-3 years 1 year 72.12 More than 3 years Total Less than 1 year 1-2 years 2-3 years More than 3 years Total 79.23 88.70 21.29 2.03 7.11 72.12 7.11 Corporate Overview 79.23 88.70 21.29 2.03 112.02 112.02 As on the date of balance sheet, there is no Intangible assets under development whose completion is overdue or has exceeded the cost, based on the approved plan. 90.91 Short-term unsecured fixed rate debentures As at 31-3-2021 Secured Unsecured 7098.45 3797.92 10896.37 1953.81 4215.93 6169.74 477.90 Total 477.90 Loans from related parties 12733.89 193.74 193.74 11434.01 17743.07 12688.16 6161.05 10130.91 90.91 11434.01 30476.96 Commercial paper 2024.05 7.94 Short-term loans and advances from banks Integrated Discussion and Analysis Report Statutory Financial Reports 10130.91 Statements LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [26] Current liabilities: Financial liabilities - Borrowings crore As at 31-3-2022 Particulars Secured Unsecured Total Loans repayable on demand 8596.89 4091.27 4137.00 9052.26 (b) 27765.83 Loans guaranteed by directors Nil (previous year: Nil) Non-convertible debentures and bank borrowings are secured by charge on the specified movable and immovable assets of the respective entities. NOTE [28] Current liabilities: Financial liabilities - Other trade payables Acceptances Due to related parties: Associates (a) Joint ventures Particulars crore As at 31-3-2022 As at 31-3-2021 Management 164.52 382.35 Due to others 18713.57 Notes: 1.60 Note: The secured portion of loans payable on demand and bank borrowings are secured by charge on the specified movable and immovable assets of the respective entities. NOTE [27] Current liabilities: Financial liabilities - Current maturities of long term borrowings Particulars Redeemable non-convertible fixed rate debentures Redeemable non-convertible floating rate debentures Preference shares Term loans from banks 319.26 crore As at 31-3-2021 9405.63 22953.45 Secured Unsecured 13547.82 7707.33 1.73 1.73 170.09 170.09 540.36 9945.99 9419.55 8419.51 31372.96 19078.82 Total 21255.15 Secured Unsecured 9659.27 3230.04 1.60 319.26 89.67 9509.22 3640.57 22719.39 Total 12889.31 As at 31-3-2022 Corporate Overview Forward contract payables 68.70 14687.17 45632.79 129.94 129.94 215.65 215.65 1982.64 15639.93 29334.73 17015.40 61618.31 58497.68 Total Secured Unsecured 29162.95 20021.22 49184.17 126.15 126.15 1123.66 1123.66 2351.33 31686.06 23622.36 82120.04 Total Notes: (a) Loans guaranteed by directors Nil (previous year: Nil) (b) Non-convertible debentures and bank borrowings are secured by charge on the specified movable and immovable assets of the respective entities. 13657.29 44602.91 NOTE [23] Particulars Embedded derivative payables Financial guarantee contracts Due to others [1] [1] mainly includes security deposits and liabilities towards capital goods NOTE [24] Non-current liabilities: Provisions Non-current liabilities: Other financial liabilities Particulars Term loans from banks Redeemable non-convertible inflation linked debentures [3] Impairment reserve as per Reserve Bank of India: Created pursuant to circular issued by Reserve Bank of India where impairment allowance as per Ind AS 109 is lower than the provisioning required as per extant prudential norms. 14.54 [2] Debenture redemption reserve: Created on non-convertible debentures in accordance with the Companies (Share capital and Debenture) Rules, 2014 (as amended). 535 Integrated Annual Report 2021-22 Notes forming part of the Consolidated Financial Statements Notes forming part of the Consolidated Financial Statements (contd.) Preference shares NOTE [22] crore As at 31-3-2022 As at 31-3-2021 Particulars Secured Unsecured Redeemable non-convertible fixed rate debentures 30945.62 Non-current liabilities: Financial liabilities - Borrowings Employee pension scheme [Note 52(b)(i)] Post-retirement medical benefits plan [Note 52(b)(i)] Provision for other employee benefits As at 31-3-2021 345.63 348.86 333.93 338.42 19.97 18.12 As at 31-3-2022 118.24 817.77 773.78 As at 31-3-2022 21.27 21.27 crore As at 31-3-2021 68.38 crore 186.74 111.67 Other provisions [Note 56(a)] NOTE [25] Other non-current liabilities Particulars Other payables 536 crore As at 31-3-2022 As at 31-3-2021 27.46 59.78 13.17 13.84 1.03 0.12 70.01 113.00 68.70 1772.57 5328.93 1780.51 48623.30 crore As at 31-3-2022 As at 31-3-2021 12818.25 17963.32 Other payables [1] [1] mainly includes statutory dues and liabilities towards joint ventures, volume discount and employee benefits 538 55.38 4521.07 11943.66 30781.57 3862.53 34644.10 27819.73 3449.90 31269.63 vii. Weighted average remaining contractual life of options (in 2,16,60,227 1,81,71,874 15876.07 3,98,32,101 84.29 5659.33 6643.32 0.79 Due to others [1][2] [1] Due to others include due to directors: 112.87 crore (previous year: 43.19 crore) [2] Mainly includes security deposits and liability towards employee benefits and capital goods NOTE [30] Other current liabilities Particulars Contract liabilities [Note 47(d)(i)] 379.25 Due to customers (construction and project related activity) crore As at 31-3-2022 129.35 As at 31-3-2021 127.78 367.31 244.66 0.85 402.19 Advances from customers Embedded derivative payables 4,01,58,040 5,37,000 2,16,22,255 13,91,500 1,85,35,785 Options yet to vest 4,51,95,840 3,98,32,101 29,20,500 19,28,500 Options granted and outstanding at the beginning of the year ii. 10.001/Market Price iii. Options granted during the year * 44.20 i. 2020-21 2021-22 2020-21 2021-22 [1] Capital redemption reserve: Created by the subsidiaries on redemption of preference shares out of profits in accordance with Section 55(2)(c) of the Companies Act, 2013. No. Grant price 2,29,250 iv. Options lapsed/cancelled during the year 21,31,627 7,19,000 Options vested 19,28,500 9,48,250 of which: vi. Options granted and outstanding at the end of the year 26,02,573 1,07,89,685 42,72,784 3,17,000 Options exercised and shares allotted during the year V. 48,92,793 61,90,962 3,07,500 6,63,250 6,84,000 Forward contract payables Financial guarantee contracts Unclaimed interest on debentures Micro and small enterprises Others 36.26 19674.94 516.10 22237.09 21.32 6387.20 0.73 953.50 0.57 342.79 Undisputed: 0.93 962.86 Disputed: Micro and small enterprises Others 8.43 19711.20 22761.62 6408.52 575.91 50558.38 954.23 2-3 years Outstanding for following periods from due date of payment Less than 1 More than year 3 years 1775.66 43098.23 50568.33 45256.24 537 Integrated Annual Report 2021-22 Notes forming part of the Consolidated Financial Statements Total Notes forming part of the Consolidated Financial Statements (contd.) Current liabilities: Financial liabilities - Trade payables ageing crore As at 31-3-2022 Particulars Unbilled Dues Not due 1-2 years NOTE [28][a] 0.19 343.55 1.33 965.12 9.95 51144.24 488.86 45235.77 Disputed: Micro and small enterprises Others 16.76 19028.73 17276.81 0.81 934.63 1.04 7244.23 591.15 0.13 2.67 938.24 0.13 20.47 45745.23 NOTE [29] Current liabilities: Other financial liabilities Particulars Unclaimed dividend 666.07 0.65 590.50 1.26 664.81 33.48 7209.71 crore Particulars Unbilled Not due Dues As at 31-3-2021 Outstanding for following periods from due date of payment Less than 1 year 1-2 years 2-3 years More than 3 years Total Undisputed: Micro and small enterprises 49.09 Others 18979.64 403.57 16856.48 1761.12 75587.62 1,54,155 (0.23) Options granted and outstanding at the end of the year V. 10.00 3,255 iv. Options lapsed/forfeited during the year 10.00 1,45,700 8,435 10.00 iii. Options exercised during the year 10.00 10.00 1,17,241 Options granted during the year ii. 10.00 1,14,006 5,200 10.00 10.00 Lapsed units/shares (D) Vested units/shares Number of units/shares granted under letter of intent during the year (B) Outstanding units/shares as at the beginning of the year (A) 5,200 Sr. No. Particulars (B) Other Stock based compensation arrangements 10.00 5,200 10.00 8,435 Options vested at the end of the year out of (v) supra vi. The Company has granted phantom stock options and letter of intent to issue shares under ERSP 2012 plan to certain employees which is subject to certain vesting conditions. Details of the outstanding options/ units as at March 31, 2022 are given below: (E) Options granted and outstanding at the beginning of the year Weighted average exercise price (F) 2.70% 1.73 years 2020-21 10.00 per option 83.71 per option 2.60 per option 4.59% 2.68 years 39.50% 2021-22 25.26% Method used to determine expected volatility Weighted average share price (E) Weighted average expected dividends Weighted average expected volatility Weighted average expected life of options (B) Weighted average risk-free interest rate Weighted average exercise price i. 1.68 per option V. (₹) options options No. of stock Weighted average exercise price No. of stock No. 39.61 per option Particulars 2020-21 2021-22 ERSP 2012 was instituted with effect from July 16, 2012 to issue equity shares of nominal value of 10 each. Shares under this program are granted to employees at an exercise price of not less than ₹ 10 per equity share or such higher price as determined by the Nomination and Remuneration Committee. Shares shall vest over such term as determined by the Nomination and Remuneration Committee not exceeding ten years from the date of the grant. All shares will have a minimum lock in period of one year from the date of allotment. (A) Employee Restricted Stock Purchase Plan 2012 (ERSP 2012) (iv) Mindtree Limited Expected volatility is based on the historical volatility of the Company's shares price applicable to the expected life of each option. 5.82 per option Sr. (A) Cancelled units/shares Outstanding units/shares as at the end of the year 5.56% 1-2 year 1-2 year 10.00 0.42% * 10.00 0.42% * 873.36 2020-21 4.31% 2021-22 Volatility (F) Risk-free interest rate (E) Expected life (D) Dividend yield % (C) Employee Stock Option Plan 2021 (ESOP 2021) (B) Weighted average exercise price 35.15% ESOP 2021 was instituted with effect from May 22, 2021 for the issue of upto 20,00,000 options (including the unutilized options under ERSP 2012) to employees. The Nomination and Remuneration Committee ('NRC') administers the plan through a trust established specifically for this purpose, called the Mindtree Employee Welfare Trust ('ESOP Trust'). Particulars Options lapsed/forfeited during the year iv. iii. Options exercised during the year 10.00 3,28,128 Options granted during the year 48.33% ii. i. Weighted average exercise price (*) No. of stock options Sr. No. Particulars Series A 2021-22 Options under this program are granted to employees at an exercise price periodically determined by the NRC. All stock options have a four-year vesting term. The options vest and become fully exercisable at the rate of 25% each over a period of 4 years from the date of grant. Each option is entitled to 1 equity share of ₹10 each. These options are exercisable within 6 years from the date of vesting. The ESOP Trust shall subscribe to the equity shares of the Company using the proceeds from loans obtained from the Company, other cash inflows from allotment of shares to employees under the ESOP Plan, to the extent of number of shares as is necessary for transferring to the employees. The NRC shall determine the exercise price which will not be less than the face value of the shares. Options granted and outstanding at the beginning of the year (F) Weighted average grant date share price Sr. No. Particulars 1,54,155 1,17,241 1,44,466 2,40,450 1,92,166 2012 [1] Employee Restricted Stock Option Plan 5000 2020-21 [2] Based on Letter of Intent [1] Does not include direct allotment of shares Grant Price per share/unit [2] (1) Grant Date [2] (H) Contractual life 2021-22 (A) 9,702 65,223 10 per share The weighted average fair value of each unit under the above mentioned ERSP 2012 plan, granted during the previous year ended March 31, 2021 was ₹ 873.36 using the Black-Scholes Option Pricing Model with the following assumptions: NOTE [20] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO Statements Statutory Financial Reports Report 1-2 year Discussion and Analysis Management Corporate Overview 10 per share June 18, 2020, October 30, 2020, February 8, 2021 May 12, 2020, 1-2 year 33,595 1,92,166 Integrated Sr. No. Particulars (C) The fair value has been calculated using the Black-Scholes Option Pricing Model and the significant assumptions and inputs to estimate the fair value of options granted during the year are as follows: 532 Securities premium [Note 1(II)(u)] Employee share options (net) [Note 1(II)(w)] Employee share options outstanding Deferred employee compensation expense crore As at 31-3-2022 As at 31-3-2021 Capital redemption reserve [1] 10.52 10.52 271.92 282.44 282.44 335.10 302.00 8718.74 8667.65 271.92 502.09 Capital reserve on consolidation Capital reserve [Note 1(II)(g)] 4.94% 34.29% (I) Capital Management The Group continues its policy of a conservative capital structure. Low gearing levels also enable the Group to navigate business stress on one hand and raise growth capital on the other. This policy also provides flexibility of fund-raising options for future, which is especially important in times of global economic volatility. The gross debt equity ratio is 1.29:1 (as at 31-3-2021: 1.51:1). 534 Corporate Overview Management Capital reserve Integrated Statutory Financial Reports Statements LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [21] Other equity Particulars Discussion and Analysis Report 1-4 year 427.52 (43.92) 3683.27 60955.94 665.45 Hedging reserve [Note 1(II)(r)(iii)(B)] Cash flow hedging reserve 723.25 492.11 3710.47 67139.90 696.00 Cost of hedging reserve (7.01) 718.53 485.10 Debt instruments through Other comprehensive income [Note 1 (II)(r)(i)(B)] Equity instruments through Other comprehensive income [Note 1(II)(r)(i)(B)] 98.20 162.40 55.62 (4.72) (130.44) Foreign currency translation reserve [Note 1(II)(x)(iv)] 28.36 371.65 383.60 Statutory reserves Debenture redemption reserve [2] 546.62 776.76 Reserve u/s 45-IC of the Reserve Bank India Act, 1934 28.36 2162.13 Reserve u/s 29C of the National Housing Bank Act, 1987 11.09 11.09 Reserve u/s 36(1)(viii) of the Income-tax Act, 1961 Impairment reserve as per Reserve Bank of India [3] Retained earnings 962.27 911.01 1956.05 3411.29 * 3290.65 0.11% 2021-22 Volatility * 2984.23 i. Weighted average grant date share price ii. Exercise price iii. Dividend yield % 2021-22 iv. V. Risk-free interest rate vi. Volatility 10.00 0.10% 1-4 year 4.88% Expected life 34.68% Sr. No. Particulars Options vested at the end of the year out of (v) supra NOTE [20] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements Integrated Annual Report 2021-22 531 (B) The average fair values of options granted during the year is 72.69 (previous year: 33.15) per option. [1] w.e.f. July 10, 2019 The weighted average remaining contractual life of the option is 1.88 years as at March 31, 2022 (as at March 31, 2021: NA) The weighted average fair value of each option under the above mentioned Series A of ESOP 2021 plan was 2965.70 using the Black-Scholes model with the following assumptions: 4.81 4.02 Options granted and outstanding at the end of the year 16,160 10.00 3,11,968 10.00 vi. 5.64 533 Integrated Annual Report 2021-22 Notes forming part of the Consolidated Financial Statements 3,290.65 vi. Options vested at the end of the year out of (v) supra The weighted average remaining contractual life of the option is 1.99 years as at March 31, 2022 (as at March 31, 2021: NA) The weighted average fair value of each option under the above mentioned Series B of ESOP 2021 plan was 926.45 using the Black-Scholes Option Pricing Model with the following assumptions: Sr. No. Particulars i. Weighted average grant date share price 1,70,000 ii. iii. Dividend yield % iv. Expected life V. Risk-free interest rate vi. Exercise price 2,683.80 17,000 Options granted and outstanding at the end of the year Notes forming part of the Consolidated Financial Statements (contd.) NOTE [20] (contd.) Series B 2021-22 Sr. No. Particulars No. of stock options Weighted average exercise price (*) i. Options granted and outstanding at the beginning of the year ii. Options granted during the year 1,87,000 3,290.65 iii. Options exercised during the year iv. Options Lapsed/forfeited during the year V. 82126.65 Scheme 2013 25.17% Sr. 8,82,606 3,25,915 1,02,600 82,428 ix. Options granted & outstanding at the end of the year viii. Options lapsed/cancelled during the year 6,23,839 5,19,548 83,650 45,285 vii. Options exercised during the year vi. Options granted during the year Options reinstated during the year V. 15,25,395 8,82,606 10-06-2017 onwards 10-06-2016 onwards ₹ 1 1 2020-21 X. 2021-22 Options vested at the end of the year out of (ix) supra 1,22,208 (C) Weighted average expected life of options (B) Weighted average risk-free interest rate (A) 530 Sr. No. Particulars (E) The fair value has been calculated using the Black-Scholes Option Pricing Model and significant assumptions and inputs to estimate the fair value options granted during the year are as follows: NOTE [20] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements Integrated Annual Report 2021-22 529 (D) Weighted average fair value of options granted during the year is 4667.46 per share (previous year: 2348.93 per share). (C) Weighted average share price at the date of exercise for stock options exercised during the year is 4889.01 per share (previous year: 2691.00 per share). 3.3 3.5 xii Weighted average remaining contractual life of options (in years) 7,60,398 1,82,793 xi. Options unvested at the end of the year out of (ix) supra 1,43,122 ESOP scheme 2015 iv. Options granted & outstanding at the beginning of the year iii. Vesting commences on (C) Weighted average expected volatility (B) Weighted average expected life of options (A) Weighted average risk-free interest rate (j) (i) 2020-21 2021-22 No. Particulars Sr. (G) The fair value of the options granted during the year has been calculated using the Black-Scholes Option Pricing Model using the following significant assumptions and inputs: NOTE [20] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO Statements Statutory Financial Reports Integrated Discussion and Analysis Report Management Corporate Overview Scheme 2010 3.56 (D) Weighted average expected dividends over the life of the option (E) Weighted average share price (F) Weighted average exercise price ii. Grant dates Grant price i. No. Particulars Sr. (B) The details of the grant under the aforesaid scheme is summarised below: way of issue of equity shares. Management has discretion to modify the exercise period. (A) The options are vested equally over a period of 5 years subject to the discretion of the management and fulfilment of certain conditions. The options can be exercised anytime within a period of 7 years from the date of grant and would be settled by Employee Stock Ownership Scheme (ESOS Plan) Larsen & Toubro Infotech Limited Weighted average expected volatility (i) The Board of Directors, at their meeting held on May 12, 2022 recommended a final dividend of 22 per equity share for the year ended March 31, 2022, subject to approval of shareholders. On approval, the dividend outgo is expected to be 3091.06 crore based on number of shares outstanding as on March 31, 2022. During the year ended March 31, 2022, the Company paid the final dividend of 18 per equity share for the year ended March 31, 2021. Expected volatility is based on the historical volatility of the Company's share price applicable to the total expected life of each option. 7.80 per option 51.22 per option 884.83 per option 4.81% 2.85 years 35.39% 182.90 per option 67.82 per option 1311.86 per option 5.41% 3.77 years 31.02% (G) Method used to determine expected volatility (k) Stock option scheme of subsidiary companies: Weighted average expected dividends over the life of option years) Weighted average share price Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO Statements Statutory Financial Reports Integrated Discussion and Analysis Report Management Corporate Overview (C) In respect of stock options granted pursuant to the Company's stock options schemes, the fair value of the options is treated as discount and accounted as employee compensation over the vesting period. (B) Weighted average share price at the date of exercise for stock options exercised during the year is 4770.17 per share (previous year: 1763.19 per share). 1.99 0.24 xi. Weighted average remaining contractual life of options (in years) 5,85,540 1,49,120 Options unvested at the end of the year out of (viii) supra X. 1,46,929 66,605 ix. Options vested at the end of the year out of (viii) supra 7,32,469 2,15,725 NOTE [20] (contd.) viii. Options granted and outstanding at the end of the year Sr. No. (A) The details of the grants are summarised below: (E) The Company has formulated Employee Stock Option Schemes 2010 (Scheme 2010) and 2013 (Scheme 2013). The grant of options to the employees under the stock option schemes is on the basis of their performance and other eligibility criteria. The options allotted under the Scheme 2010 are vested over a period of four years in the ratio of 15%, 20%, 30% and 35% respectively from the end of 12 months from the date of grant, subject to the discretion of the management and fulfillment of certain conditions. The options granted under the Scheme 2013 are vested in a graded manner over a period of four years with 0%, 33%, 33% and 34% of grants vesting each year, commencing from the end of 24 months from the date of grant or w.e.f. July 10, 2019 vested in a graded manner over a period of four years with 25%, 25%, 25% and 25% of grants vesting each year, commencing from the end of 12 months from the date of grant. (iii) L&T Finance Holdings Limited The expected price volatility is based on the historic volatility (based on the remaining life of the options), adjusted for any expected changes to future volatility based on publicly available information. 5.12% 4.55% 30.42% 16-07-2020 16-07-2027 1441.70 per option * 2.00 No new ESOP grant during the year Method used to determine expected volatility (H) Weighted average expected price volatility of Company's share (F) Weighted average expected dividend yield over life of option (G) Weighted average risk-free interest rate (E) (D) Weighted average share price at grant date (C) Expiry date Grant date (B) (A) Weighted average exercise price 2020-21 2021-22 Particulars 5,34,265 (D) There are no new options granted during the year ended 31-3-2022. The fair value at grant date of options granted during the previous year: 1378.40 per option. The fair value of grant date is determined using the Black-Scholes Option Pricing Model which takes into account the exercise price, term of option, share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option. The model inputs for options granted during the year included: vii. Options exercised during the year (ii) L&T Technology Services Limited The expected volatility has been calculated entirely based on historic volatility of IT Index. has been calculated based on historic company share price. The expected volatility 1 * 2349.87 148.59 * 4668.46 189.16 27.67% 3 years 3 years 4.62% 5.00% 2020-21 2021-22 Method used to determine expected volatility (F) 4,86,344 Weighted average exercise price (G) (A) Employee stock option plan (ESOP) (i) The options are vested equally over a period of 5 years subject to the discretion of the management and fulfillment of certain conditions. 1 (ii) The exercise period for the options granted under the ESOP Scheme, 2016 would be seven years (84 months) from the date of grant of options or six years (72 months) from the date of first vesting or three years (36 months) from the date of retirement/death, whichever is earlier, subject to any change as may be approved by the Board. The exercise price may be decided by the Board, in such manner, during such period, in one or more tranches and on such terms and conditions as it may deem fit, provided that the exercise price per option shall not be less than the par value of the equity share of the Company and shall not be more than the market price as defined in the SEBI (Share Based Employee Benefits) Regulations, 2014 and shall be subject to compliance with accounting policies under the said regulation. The number of shares to be allotted on exercise of options should not exceed the total number of unexercised vested options that may be exercised by the employee. Details of grant under ESOP Scheme, 2016 is summarised below: vi. Options granted during the year 76,200 30,400 v. Options lapsed during the year 13,22,434 7,32,469 iv. Options granted and outstanding at the beginning of the year 20,500 iii. Vesting commences on 28-07-2016 onwards Grant dates 28-07-2017 onwards 2 2 Grant price i. 2020-21 2021-22 No. Particulars ii. ESOP Scheme, 2016 Sr. 100.00 100.00 545 Integrated Annual Report 2021-22 NOTE [40] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Sr. No. Indian subsidiaries Name of subsidiaries Notes forming part of the Consolidated Financial Statements 100.00 100.00 India L&T Realty Developers Limited 41 100.00 100.00 100.00 L&T Innovation Campus (Chennai) Limited (formerly India Principal place known as L&T Electricals and Automation Limited) 100.00 of business 44 As at 31-3-2022 68.00 99.90 99.90 India Bhilai Power Supply Company Limited 100.00 100.00 100.00 100.00 India L&T Valves Limited Proportion of effective ownership interest (%) 43 100.00 100.00 100.00 India L&T Construction Equipment Limited 42 held (%) Proportion of voting power As at 31-3-2021 Proportion of effective ownership interest (%) voting power held (%) Proportion of 100.00 68.00 India L&T Vision Ventures Limited [f] India Parel Project LLP) L&T Parel Project Private Limited (formerly known as L&T 35 100.00 100.00 100.00 100.00 India L&T Asian Realty Project LLP 34 100.00 100.00 100.00 100.00 99.90 Chennai Vision Developers Private Limited 33 100.00 100.00 100.00 100.00 India 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 India L&T Seawoods Limited 99.00 99.00 99.00 99.00 India India LTR SSM Private Limited 100.00 100.00 100.00 India L&T Westend Project LLP + www b 40 39 38 37 36 100.00 99.90 The company is in process of being struck off from the register of companies L&T Power Limited 100.00 100.00 100.00 Kingdom of Saudi Arabia Larsen & Toubro Saudi Arabia LLC 3 100.00 49.00 100.00 49.00 Qatar 100.00 Larsen & Toubro Qatar LLC [a] 65.00 65.00 65.00 65.00 Sultanate of Oman Larsen & Toubro (Oman) LLC 1 Foreign subsidiaries held (%) Proportion of voting power As at 31-3-2021 Proportion of effective ownership interest (%) 2 held (%) 4 South Africa 75.00 100.00 75.00 Kingdom of Saudi Arabia Larsen Toubro Arabia LLC 7 100.00 70.00 100.00 70.00 Sultanate of Oman Larsen & Toubro T&D SA (Proprietary) Limited L&T Modular Fabrication Yard LLC 100.00 70.00 100.00 70.00 Sultanate of Oman Larsen & Toubro Heavy Engineering LLC 5 72.50 72.50 72.50 72.50 6 45 interest (%) ownership 100.00 100.00 India L&T Capital Company Limited 48 100.00 100.00 100.00 100.00 India L&T Aviation Services Private Limited 100.00 47 95.00 95.00 95.00 India Kesun Iron and Steel Company Private Limited [9] 46 99.99 99.99 99.99 99.99 India 95.00 Proportion of voting power 100.00 L&T Infra Contractors Private Limited [h] As at 31-3-2022 Proportion of effective Principal place of business No. Name of subsidiaries Sr. The company is struck off from the register of companies w.e.f. December 28, 2021 [h] Nabha Power Limited [g] The Group has sold its stake on June 3, 2021 [f] 49 The Group has sold its stake on August 30, 2021 One equity share (the Golden Share) is held by the Government of Telangana in pursuance of the Shareholders' Agreement [d] The Group has acquired stake on July 7, 2021 [c] The company is merged with Larsen & Toubro Infotech Limited w.e.f. April 1, 2021 [b] The company is merged with Larsen & Toubro Limited w.e.f. April 1, 2021 [a] 100.00 100.00 India [e] 32 63.62 100.00 L&T Technology Services Limited 11 74.05 74.05 India Cuelogic Technologies Private Limited [c] 10 74.27 74.27 74.05 74.05 India Powerup Cloud Technologies Private Limited 9 74.27 74.27 74.05 74.05 India Lymbyc Solutions Private Limited 8 74.27 74.27 India 73.90 73.90 74.24 Esencia Technologies India Private Limited 15 74.24 74.24 73.90 73.90 India Seastar Labs Private Limited 14 74.24 74.24 India 73.90 India Graphene Semiconductor Services Private Limited 13 54.94 54.94 54.69 54.69 India L&T Thales Technology Services Private Limited 12 74.24 73.90 Ruletronics Systems Private Limited [b] 7 74.27 L&T Geostructure Private Limited 2 100.00 100.00 100.00 100.00 India Hi-Tech Rock Products and Aggregates Limited 1 Indian subsidiaries held (%) India Proportion of voting power Proportion of voting power held (%) Proportion of effective ownership interest (%) of business Principal place As at 31-3-2022 No. Name of subsidiaries Sr. The list of subsidiaries, associates, joint ventures and joint operations included in the Consolidated Financial Statements are as under: NOTE [40] Management As at 31-3-2021 Proportion of effective ownership interest (%) India 100.00 100.00 74.27 India Syncordis Software Services India Private Limited [b] 6 74.27 74.27 74.05 74.05 India Larsen & Toubro Infotech Limited 5 100.00 100.00 India L&T Hydrocarbon Engineering Limited (al 4 100.00 100.00 100.00 100.00 India L&T Infrastructure Engineering Limited 3 100.00 100.00 73.90 73.90 74.24 India L&T Metro Rail (Hyderabad) Limited [d] 27 34.94 34.94 36.38 36.38 India L&T Infra Investment Partners 26 63.62 100.00 63.62 66.26 India Mudit Cement Private Limited 25 63.62 66.26 66.26 India L&T Financial Consultants Limited 24 63.62 66.26 63.62 100.00 100.00 India L&T Uttaranchal Hydropower Limited [e] 31 100.00 100.00 100.00 100.00 India L&T Power Development Limited 30 100.00 100.00 100.00 100.00 India L&T Himachal Hydropower Limited 29 100.00 100.00 100.00 100.00 India L&T Arunachal Hydropower Limited 28 100.00 100.00 66.26 India Debt Fund Limited) L&T Infra Credit Limited (formerly known as L&T Infra 19 63.62 63.62 66.26 66.26 India L&T Finance Limited 18 63.62 India 66.26 India L&T Finance Holdings Limited 17 61.03 61.03 60.99 60.99 India Mindtree Limited 16 74.24 66.26 66.26 66.26 63.62 L&T Mutual Fund Trustee Limited 23 63.62 63.62 66.26 66.26 India L&T Investment Management Limited 22 63.62 63.62 66.26 66.26 India L&T Infra Investment Partners Trustee Private Limited 21 63.62 63.62 66.26 66.26 India L&T Infra Investment Partners Advisory Private Limited 20 63.62 66.26 63.62 Corporate social responsibility expenses LARSEN & TOUBRO 1216.63 699.54 (97.86) (259.39) 28.47 4.12 14.02 0.34 14.24 0.21 0.04 3.74 Changes in inventories of finished goods, stock-in-trade, work-in-progress and Sub-contracting charges Stores, spares and tools consumed Purchase of stock-in-trade Construction materials consumed Less: Scrap sales 85.56 Raw materials and components (42.46) 62.61 3091.07 1213.58 1069.50 24558.23 15562.05 17100.84 33506.21 15651.20 89.15 17268.17 167.33 2020-21 crore 2021-22 3429.35 2267.08 864.95 636.16 19.35 20.14 17.60 Cost of raw materials, components consumed: Particulars Manufacturing, construction and operating expenses crore 2021-22 Interest income on: [Note 46(a)] Particulars Other income NOTE [35] Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO Statements Statutory Financial Reports Discussion and Analysis Report Integrated Management Corporate Overview 135979.03 156521.23 1502.28 2020-21 Loans and advances to joint ventures and associates 9.94 60.84 NOTE [36] Miscellaneous income (net of expenses) Lease rentals Net gain/(loss) on sale of PPE and Intangible assets Net gain/(loss) on derivatives at fair value through profit or loss Net gain/(loss) on sale of investments Net gain/(loss) on fair valuation of investments Current investments Others 2032.89 Trade investments 1377.66 1063.35 678.25 321.59 Others 638.57 731.82 Investments Dividend income on: 24772.33 22316.18 property development: 237.80 Other manufacturing, construction and operating expenses: Inventorisation of investment property 105.57 (2076.60) 9357.85 9152.81 72.37 384.60 Completed property 3130.39 3069.60 Work-in-progress Cost of built-up space and property development land: 5748.17 308.36 98.56 (2076.60) 343.37 Power and fuel 2141.26 497.25 Insurance 2008.62 2302.10 Engineering, professional, technical and consultancy fees 310.09 317.17 Bank guarantee charges 5252.57 2265.80 Rent and hire charges 536.23 599.23 Packing and forwarding 57.50 4.38 Royalty and technical know-how fees 1458.30 3071.04 848.77 Work-in-progress Stock-in-trade 11229.41 384.60 366.49 Completed property 3169.07 3277.96 Work-in-progress Cost of built-up space and property development land: 5252.57 7171.57 Work-in-progress 86.01 360.03 324.10 Stock-in-trade 89.29 Finished goods Closing stock: 9252.28 Carried forward 11229.41 79539.95 9252.28 65682.93 86.01 Finished goods 65682.93 9252.28 79539.95 11229.41 2020-21 2021-22 360.03 crore Brought forward Particulars Manufacturing, construction and operating expenses (contd.) NOTE [36] Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements Integrated Annual Report 2021-22 541 Less: Opening stock: 471.08 829.06 Miscellaneous income 7042.11 6520.74 (h) Contingent liabilities in relation to interest in joint operations 51.18 45.10 312.67 255.12 (g) Bank guarantees given on behalf of joint venture (f) Corporate guarantees for debt given on behalf of joint ventures 340.16 529.17 676.62 2877.52 830.85 1007.85 (c) Excise duty/service tax/custom duty/entry tax/stamp duty/municipal cess liability that may arise, including those in respect of matters in appeal/challenged by the Group in Writ (d) Income tax liability that may arise in respect of which the Group is in appeal (e) Guarantees or letter of credit or letter of comfort given to third parties 3222.99 351.39 (i) Share in contingent liabilities of joint operations for which the Group is contingently liable (j) Contingent liabilities in respect of liabilities of other joint operators in respect of joint operations As at 31-3-2021 57.01 4405.09 Integrated Annual Report 2021-22 539 (viii) In respect of matters at (I), the cash outflows, if any, is fully reimbursable by the third parties under an agreement entered in to with them. (vii) In respect of matters at (k), the cash outflows, if any, could generally occur any time up to settlement of claims or during subsistence of the underlying agreements. (vi) In respect of matters at (h) to (j), the cash outflows, if any, could generally occur upto completion of projects undertaken by the respective joint operations. (v) In respect of matters at (g), the cash outflows, if any, could generally occur up to two years, being the period over which the validity of the guarantees extends. (iv) In respect of matters at (f), the cash outflows, if any, could generally occur up to four years, being the period over which the validity of the guarantees extends except in a few cases where the cash outflows, if any, could occur any time during the subsistence of the borrowing to which the guarantees relate. (iii) In respect of matters at (e), the cash flows, if any, could occur any time during the subsistence of the underlying agreement. (ii) It is not practicable to estimate the timing of cash outflows, if any, in respect of matters at (a) to (d) above pending resolution of the arbitration/appellate proceedings. Further, the liability mentioned in (a) to (d) above excludes interest and penalty in cases where the Group has determined that the possibility of such levy is remote. (i) The Group expects reimbursements of 13.82 crore (previous year: ₹14.24 crore) in respect of the above contingent liabilities except in respect of matters at (I). 479.43 169.94 324.60 175.42 (1) Indemnities for performance given on behalf of third parties Notes: (k) Share of joint ventures' contingent liabilities in respect of a legal claim lodged against the entity 4875.31 61.95 318.69 As at 31-3-2022 3239.98 crore 1387.54 Compensated absences 210.43 236.44 As at 31-3-2021 As at 31-3-2022 crore Gratuity [Note 52(b)(i)] Provision for employee benefits: Particulars Current liabilities: Provisions NOTE [31] Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO Statements Statutory Financial Reports Integrated Discussion and Analysis Report 1372.56 Employee pension scheme [Note 52(b)(i)] 25.93 29.09 (b) Sales tax/GST liability that may arise in respect of matters in appeal (a) Claims against the Group not acknowledged as debts Particulars Contingent Liabilities NOTE [32] 2998.68 3355.86 1364.12 Notes forming part of the Consolidated Financial Statements 1684.45 1634.56 1671.41 0.84 0.86 Others 21.64 20.64 Post-retirement medical benefits plan [Note 52(b)(i)] Other provisions [Note 56(a)] Notes forming part of the Consolidated Financial Statements (contd.) NOTE [33] Commitments crore 2267.90 2804.94 Fees for operation and maintenance of power plant 311.34 359.09 Investment/portfolio management and trusteeship fees 3.56 2.29 Charter hire income 110.27 129.31 Commission 1178.07 1345.32 Servicing fees 84.00 201.39 Revenue from sale of power Other operational income: 81.95 21.60 466.20 7.12 4.75 Technical fees Profit on sale of investment property 61.50 53.65 Premium earned (net) on related forward exchange contracts 1.65 Fare collection and related activity Profit on sale of a subsidiary classified under realty segment 81.96 49.63 Property maintenance recoveries 87.38 Lease rentals 540 134476.75 155672.46 56.44 651.71 606.14 Property development activity 10.80 (ii) Share of joint ventures' capital commitments 1026.95 (i) Undrawn/undisbursed commitments to other companies (in Financial Services segment) (b) Other funding commitments: (iii) Intangible assets 151.14 28.88 47.56 10.13 1774.32 2169.02 (ii) Investment property (a) Estimated amount of contracts remaining to be executed on capital account (net of advances): (i) Property, plant and equipment As at 31-3-2021 As at 31-3-2022 Particulars 1010.35 14.78 NOTE [34] Revenue from operations Particulars 14107.19 12630.81 Income from financing activity/annuity based projects 20088.56 25804.51 Software development products and services 5530.89 6561.80 1264.35 Engineering service fees 3882.61 Manufacturing and trading activity 100604.09 Construction and project related activity 2020-21 crore 2021-22 Sales & service: 86406.51 3760.72 Rates and taxes 764.91 686.11 932.35 131.47 329.80 471.08 1024.69 164.82 497.25 362.62 Insurance 3 610.89 74.66 536.23 690.50 91.27 599.23 Packing and forwarding 2 4 1581.33 Rent and hire charges 237.47 1459.62 445.84 1013.78 Travelling and conveyance 6 978.36 292.25 686.11 1025.00 260.09 764.91 Rates and taxes 5 2477.50 211.70 2265.80 3308.51 3071.04 123.03 Total Note 39 5.81 3904.54 3055.42 Exchange (gain)/loss [net] Other borrowing costs Interest expenses 2020-21 2021-22 Particulars crore Finance costs NOTE [39] Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements Integrated Annual Report 2021-22 543 8903.49 4.27 64.47 4.63 3125.70 Note 38 Note 36 Note 37 1458.30 Total 2267.26 126.00 2141.26 Power and fuel 1 Note 39 828.06 Note 38 No. Nature of expenses 2020-21 2021-22 Sr. crore 39(a) Aggregation of expenses disclosed vide Note 36 - Manufacturing, construction and operating expenses, Note 37 - Employee benefits expense, Note 38 - Sales, administration and other expenses and Note 39 - Finance costs 3913.44 Note 36 Note 37 317.25 1145.31 7 2021-22 544 Obsolescence on property, plant and equipment Goodwill Investment property Property, plant and equipment Impairment on: Amortisation of intangible assets Investment property Right of use assets Property, plant and equipment Depreciation on: Particulars 39(b) Depreciation, amortisation, impairment and obsolescence 1754.35 643.60 1110.75 crore 2020-21 1523.67 456.01 49.76 Statements Statutory Financial Reports Integrated Discussion and Analysis Report Management Corporate Overview 2904.21 2947.95 7.45 1637.82 9.62 0.30 1.82 5.18 76.28 0.30 1907.01 906.47 2029.44 908.59 1407.81 457.87 41.33 83.28 8831.89 794.95 Miscellaneous expenses maintenance General repairs and 9 125.19 102.45 22.74 132.16 106.41 25.75 Repairs to buildings 8 69.78 69.78 142.84 142.84 equipment Repairs to plant and 600.33 458.56 1058.89 581.74 12 2921.01 3913.44 11604.48 7691.04 9078.24 3125.70 5952.54 Finance costs 11 842.87 912.39 3515.13 1213.03 2302.10 fees technical and consultancy 10 Engineering, professional, 1016.91 435.17 2008.62 371.16 78.46 Other provisions Gratuity funds [Note 52(b)(ii)] 430.15 521.12 Superannuation/employee pension and social security schemes 519.07 584.13 Provident fund and pension fund Contribution to and provision for: 22321.33 2020-21 26887.75 2021-22 Salaries, wages and bonus Particulars crore Employee benefits expense NOTE [37] 209.22 180.30 1314.47 1129.52 Packing and forwarding Power and fuel Sales, administration and other expenses NOTE [38] 24750.54 29733.53 (181.31) (174.76) Notes forming part of the Consolidated Financial Statements (contd.) 1013.57 Recoveries on account of deputation charges Staff welfare expenses 329.76 362.62 Employee medical and other insurance premium expenses 137.67 135.31 Expenses on employee stock option scheme 1208.14 Insurance LARSEN & TOUBRO Statutory Financial Reports 177.96 Other provisions 23.66 (18.31) Provision/(reversal) for foreseeable losses on construction contracts 581.74 600.33 General repairs and maintenance 22.74 25.75 Repairs to buildings 69.78 142.84 Repairs to plant and equipment 828.06 1013.78 Travelling and conveyance 116.85 Expenses on construction job in realty business 771.74 236.81 Discussion and Analysis Report Integrated Management Corporate Overview 542 86700.90 99738.51 7691.04 Statements 5952.54 16322.62 1110.75 842.87 Finance cost of financial services business and finance lease activity Miscellaneous expenses 2199.44 3068.32 Software development expenses 12983.56 Notes forming part of the Consolidated Financial Statements (contd.) Rent and hire charges Travelling and conveyance Bad debts and advances written off (net of written back) 643.60 794.95 Miscellaneous expenses 302.74 435.70 Collection cost (Financial Services business) 225.20 232.39 100.00 2.35 301.82 Impairment on lease receivables 145.10 156.74 42.03 38.14 4092.37 3039.99 Less: Allowances for expected credit loss written back 3733.86 (37.31) (666.00) Exchange (gain)/loss [net] (39.48) (27.15) Recoveries from joint ventures and associates 158.76 347.37 8.47 Loss on fair valuation of loans towards financing activities (net) 3200.55 Allowances for expected credit loss 151.26 12.00 Impairment of debt instruments 558.33 358.51 2481.66 3400.09 Rates and taxes 33.56 49.10 91.27 123.03 126.00 2020-21 2021-22 Particulars crore Bank charges Distributors and agents Others Commission: Stationery and printing Advertising and publicity Telephone, postage and telegrams Directors' fees Professional fees General repairs and maintenance Repairs to buildings 74.66 164.82 131.47 237.47 50.84 101.32 169.88 220.90 238.28 7.97 5.92 912.39 31.12 7.02 1213.03 458.56 102.45 106.41 317.25 445.84 292.25 260.09 211.70 435.17 8 Corporate Overview Kingdom of Saudi Arabia India Magtorq Private Limited 3 49.00 49.00 49.00 49.00 UAE L&T Camp Facilities LLC 2 50.00 50.00 50.00 50.00 Qatar Larsen & Toubro Qatar & HBK Contracting Co. WLL 1 NOTE [40] (contd.) As at 31-3-2022 Sr. Name of associates No. Principal place 42.85 of business Proportion of voting power held (%) As at 31-3-2021 Proportion of effective ownership interest (%) Proportion of voting power held (%) Proportion of effective ownership interest (%) Notes forming part of the Consolidated Financial Statements (contd.) 42.85 42.85 51.00 India L&T MHI Power Boilers Private Limited 1 of effective ownership interest (%) Proportion ownership interest (%) of effective Proportion Principal place of business As at 31-3-2021 As at 31-3-2022 No. Name of joint ventures Sr. The company is under liquidation [a] 4 Magtorq Engineering Solutions Private Limited India 39.28 39.28 39.28 42.85 39.28 Gujarat Leather Industries Limited (al India 50.00 50.00 50.00 50.00 5 51.00 Notes forming part of the Consolidated Financial Statements 547 UAE Larsen & Toubro International FZE 50 100.00 30.00 100.00 30.00 Malaysia Larsen & Toubro (East Asia) Sdn.Bhd. 49 100.00 100.00 UK Thalest Limited [e] 48 61.03 61.03 74.24 74.24 46 Mindtree Software (Shanghai) Co. Limited China 60.99 100.00 60.99 61.03 47 Bluefin Solutions Sdn. Bhd. Malaysia 60.99 60.99 61.03 Integrated Annual Report 2021-22 100.00 100.00 The company is dissolved on September 7, 2021 [e] The company is merged with L&T Technology Services LLC w.e.f. October 1, 2021 [d] The Group has acquired stake on July 7, 2021 [c] The company is liquidated on August 17, 2021 [b] The company is in process of liquidation [a] 100.00 100.00 100.00 100.00 USA L&T Valves USA LLC 53 51 L&T Global Holdings Limited UAE 100.00 100.00 100.00 100.00 100.00 L&T Valves Arabia Manufacturing LLC Kingdom of Saudi Arabia 100.00 100.00 100.00 100.00 52 73.90 2 India 51.00 India Ahmedabad-Maliya Tollway Limited 22 51.00 51.00 India L&T Interstate Road Corridor Limited 21 63.86 63.86 India L&T Transportation Infrastructure Limited 20 51.00 51.00 India 51.00 51.00 17 L&T Sambalpur-Rourkela Tollway limited India 51.00 51.00 51.00 Panipat Elevated Corridor Limited India 51.00 51.00 19 Vadodara Bharuch Tollway Limited 18 India 23 India L&T Hydrocarbon Saudi Company 548 The entity is formed on May 24, 2021 [c] The company has been incorporated on November 18, 2021 [b] The company ceased to be a joint venture w.e.f. October 21, 2021 [a] 61.00 Maldives 50.00 50.00 Iran L&T Infrastructure Engineering Limited and LEA Associates South Asia Private Limited JV LLP [c] 28 Indiran Engineering Projects and Systems Kish PJSC 27 24.98 24 PNG Tollway Limited India 37.74 37.74 L&T Halol-Shamlaji Tollway Limited (al 25 India 51.00 Raykal Aluminium Company Private Limited India 75.50 75.50 Watrak Infrastructure Private Limited [b] L&T - MHI Power Turbine Generators Private Limited Kudgi Transmission Limited 51.01 60.00 India L&T Sapura Shipping Private Limited 8 60.00 60.00 India L&T Sapura Offshore Private Limited 7 51.00 51.00 India L&T MBDA Missile Systems Limited 6 74.00 74.00 India 51.00 51.00 3 L&T Howden Private Limited India 50.10 60.00 50.10 L&T-Sargent & Lundy Limited India 50.00 50.00 5 L&T Special Steels and Heavy Forgings Private Limited 4 16 9 India 51.01 India L&T Samakhiali Gandhidham Tollway Limited 15 52.89 52.89 India L&T Deccan Tollways Limited 14 51.00 51.00 India L&T Rajkot-Vadinar Tollway Limited 13 51.00 51.00 India 50.00 50.00 10 L&T Hydrocarbon Caspian LLC Azerbaijan 50.00 L&T-Chiyoda Limited 50.00 L&T Infrastructure Development Projects Limited India 51.00 51.00 12 L&T Chennai-Tada Tollway Limited 11 73.90 26 Orchestra Technology, Inc. Spain L&T Information Technology Spain SL 19 74.27 74.27 74.05 74.05 Germany Larsen & Toubro Infotech GmbH 18 Foreign subsidiaries held (%) ownership interest (%) held (%) Proportion of voting power voting power As at 31-3-2021 Proportion of effective Integrated Discussion and Analysis Report Statutory Financial Reports Statements LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) 74.05 NOTE [40] (contd.) Name of subsidiaries As at 31-3-2022 Principal place of business Proportion Proportion of of effective ownership interest (%) Sr. No. Management 74.05 74.27 France Syncordis France SARL 24 74.27 74.27 74.05 74.05 Luxembourg Syncordis S.A. 23 74.27 74.27 74.05 74.05 Mexico L&T Infotech S. DE R.L. DE C.V. 22 20 Larsen & Toubro Infotech Norge AS Norway 74.05 74.05 74.27 74.27 74.27 Larsen & Toubro LLC USA 98.76 98.76 98.77 98.77 21 74.05 Corporate Overview 51.68 13 100.00 100.00 UAE L&T Hydrocarbon International FZE [b] 12 100.00 70.00 100.00 70.00 Sultanate of Oman Larsen & Toubro Electromech LLC 11 95.00 95.00 95.00 95.00 USA 100.00 100.00 100.00 100.00 9 L&T Information Technology Services (Shanghai) Larsen & Toubro Kuwait Construction General Contracting Company WLL 49.00 100.00 49.00 100.00 PT Larsen & Toubro Hydrocarbon Engineering Indonesia Indonesia Kuwait 546 Co., Limited 14 51.68 51.52 51.52 South Africa (Proprietary) Limited Larsen & Toubro Infotech South Africa 17 74.27 74.27 74.05 74.05 74.27 74.27 74.05 74.05 74.27 74.27 L&T Infotech Financial Services Technologies Inc. Canada 15 Larsen & Toubro Infotech Canada Limited Canada 16 China Larsen & Toubro Infotech LLC 74.05 74.05 74.27 74.27 74.05 74.05 USA 74.05 10 74.27 74.24 73.90 73.90 Singapore Graphene Solutions PTE Limited 39 74.24 74.24 73.90 73.90 USA L&T Technology Services LLC 38 74.05 74.05 USA Cuelogic Technologies Inc. (c) LTI Middle East FZ-LLC UAE 74.05 74.05 74.27 74.27 74.24 36 USA 74.05 74.05 74.27 74.27 37 Lymbyc Solutions Inc. 35 40 Malaysia 45 74.24 74.27 74.24 73.90 73.90 Canada 44 74.24 74.24 73.90 73.90 China L&T Technology Services (Shanghai) Co. Limited 43 74.24 74.24 73.90 73.90 74.24 74.24 41 Graphene Solutions Taiwan Limited Graphene Solutions SDN. BHD. Taiwan 73.90 74.24 74.24 42 Esencia Technologies Inc. [d] USA 73.90 74.27 L&T Technology Services (Canada) Limited 74.05 Singapore Nielsen+Partner Pte Limited 29 74.27 74.27 74.05 74.05 Switzerland Nielsen+Partner Unternehmensberater AG 28 74.27 74.27 74.05 74.05 Germany Nielsen+Partner Unternehmensberater GmbH 27 UK Syncordis Limited 74.27 25 74.05 74.05 74.05 74.27 Syncordis PSF S.A. Luxembourg 74.05 74.05 74.27 74.27 26 74.05 74.27 74.27 74.27 34 UK 74.27 Larsen & Toubro Infotech UK Limited 74.05 74.05 USA Ruletronics Systems Inc. 33 74.27 74.27 74.05 74.05 UK 74.27 32 Ruletronics Limited Thailand 74.05 74.05 74.27 31 Nielsen&Partner Pty Limited 74.27 74.05 74.27 Australia 74.05 74.27 74.05 30 Nielsen&Partner Company Limited Net non-current assets (f)=(d)-(e) Non-current liabilities (e) 1787.40 482.60 2084.70 2981.00 449.80 3871.30 Non-current assets (d) Net current assets (c)=(a)-(b) 1592.20 2200.80 Particulars 6072.10 Current liabilities (b) Current assets (a) As at 31-3-2021 31-3-2022 As at crore Mindtree Limited 869.76 1051.78 1779.56 2140.89 Accumulated non-controlling interest 4573.20 1602.10 Notes forming part of the Consolidated Financial Statements (contd.) Net assets (g)=(c)+(f) 408.15 4761.01 1928.55 3340.08 2020-21 2021-22 2020-21 2021-22 Limited Cash flows from investing activities Cash flows from operating activities Particulars L&T Finance Limited L&T Finance Holdings crore (iii) Summarised Statement of cash flows NOTE [42] (contd.) LARSEN & TOUBRO Statements Statutory Financial Reports Discussion and Analysis Report Integrated Management Corporate Overview 2193.14 2609.82 Accumulated non-controlling interest 4318.60 5473.40 1337.60 3981.54 Current liabilities (b) 8402.87 31-3-2022 As at Particulars L&T Technology Services Limited Larsen & Toubro Infotech Limited crore 3916.45 3724.73 11010.28 10403.54 15621.44 2388.47 2517.52 16491.38 9016.60 9227.53 3640.17 11660.80 1074.82 43204.83 33597.85 10091.42 9227.53 46845.00 45258.65 1993.68 1176.01 (170.40) 11981.27 4830.58 As at 31-3-2021 6939.80 As at 31-3-2022 Current assets (a) Net assets (g)=(c)+(f) 1036.84 1191.84 1687.42 2681.58 Net non-current assets (f)=(d)-(e) 469.35 496.35 726.24 682.66 Non-current liabilities (e) 1506.19 1688.19 2413.66 3364.24 2303.24 2789.70 5252.38 5721.29 1010.68 1230.42 2321.66 2617.77 3313.92 4020.12 7574.04 8339.06 Non-current assets (d) Net current assets (c)=(a)-(b) As at 31-3-2021 (1726.55) L&T - MHI Power Boilers Private Limited (0.77) Total current assets 1082.99 1176.96 1605.66 1231.79 9.17 1302.59 6.27 1064.19 142.68 215.81 2631.37 2437.62 Other assets 0.80 (A) 38.29 510.08 Cash and bank balances As at 31-3-2021 As at 31-3-2022 As at 31-3-2021 L&T Infrastructure Development Projects Limited (consolidated) crore Limited As at 31-3-2022 As at 31-3-2021 As at 31-3-2022 As at 31-3-2021 As at 31-3-2022 L&T - MHI Power Turbine Generators Private 549.29 L&T Sapura Shipping Private Limited 2947.70 254.10 2031.78 754.58 1128.50 643.98 419.12 271.13 443.43 403.26 230.50 payables) Financial liabilities (excluding trade Current liabilities 10815.82 3180.66 8806.46 623.15 575.39 532.21 551.12 502.71 (B) (including Goodwill) Total non-current assets 2688.65 2408.75 1311.76 1070.46 143.48 673.45 Current assets Particulars Disclosures pursuant to Ind AS 112 "Disclosure of interest in other entities": Joint Ventures and Associates (a) Summarised Balance Sheet of material joint ventures: (1638.19) (668.70) Cash flows from investing activities 1267.13 899.30 2179.46 1606.90 Cash flows from operating activities 2020-21 2021-22 2020-21 2021-22 Limited (388.60) L&T Technology Services Particulars crore 1397.52 (1256.90) (945.47) (79.00) Net increase/(decrease) in cash and cash equivalents 1295.74 (1664.28) (3235.28) (281.00) Cash flows from financing activities 272.18 Larsen & Toubro Infotech Limited (964.62) Cash flows from financing activities (1046.90) NOTE [43] Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements Integrated Annual Report 2021-22 553 389.50 255.60 (595.70) (1183.30) (686.00) 1995.30 1537.30 2020-21 2021-22 Mindtree Limited crore Net increase/decrease) in cash and cash equivalents Cash flows from financing activities Cash flows from investing activities Cash flows from operating activities Particulars (51.29) 34.70 28.45 (108.70) Net increase/decrease) in cash and cash equivalents (353.80) (476.00) (512.82) (2471.20) 152.58 Summarised Statement of Profit and Loss 46082.61 c. L&T Electrical & Automation FZE W.L.L. b. Kana Controls General Trading & Contracting Company a. Henikwon Corporation SDN. BHD. Subsidiaries in Electrical and Automation business 4 L&T Capital Markets Limited 3 L&T Vision Ventures Limited 2 L&T Uttaranchal Hydropower Limited 1 Name of company d. L&T Electricals & Automation Saudi Arabia Company Limited LLC Sr. No. (b) The effect of divestment with ceding of control in subsidiaries during the year is as under: [1] Represents proportionate share of the net assets of subsidiaries. (77.66) 86.56 8.90 (80.65) 95.27 14.62 Total (6.84) 6.99 0.15 0.05% 550 e. PT. Tamco Indonesia f. Tamco Electrical Industries Australia Pty Limited g. Tamco Switchgear (Malaysia) SDN. BHD. 2021-22 Limited Particulars L&T Finance Limited L&T Finance Holdings crore (i) (c) Disclosure of subsidiaries having material non-controlling interest: NOTE [42] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO Statements Statutory Financial Reports Discussion and Analysis Report Integrated Management Corporate Overview (145.69) 121.32 Profit before tax from discontinued operations (370.41) 224.72 Exceptional items before tax Revenue from operations Exceptional items before tax Line item in Statement of Profit & Loss in which the gain/(loss) is recognised - Effect on consolidated profit/(loss) before non-controlling interest 2021-22 2020-21 119.70 1.62 crore h. Servowatch Systems Limited Total (7.04) 2020-21 7.15 0.04% (Dr)/Cr to (Dr)/Cr to Proceeds Non- received controlling interest [1] earnings (%) Retained Dilution (Dr)/Cr to (Dr)/Cr to Non- received controlling interest [1] (%) Proceeds Dilution Name of group companies 2020-21 Retained 2021-22 On account of dilution due to exercise of Employee Stock Options (without ceding control): 3.73 (546.56) 542.83 2.76% Holdings Limited L&T Finance interest [1] earnings earnings interest [1] Retained Other liabilities (including trade crore earnings L&T Finance Holdings Limited Mindtree Limited (17.98) 18.09 0.11 0.38% (19.13) 19.23 0.10 0.34% Services Limited L&T Technology (28.67) 28.73 0.06 0.27% (27.32) 27.37 0.05 0.22% Infotech Limited Larsen & Toubro (24.17) 32.75 8.58 0.10% (27.16) 41.52 14.36 0.12% 0.11 37390.19 2021-22 Revenue 1750.41 329.82 97.61 1110.30 1652.80 7967.80 10525.29 2020-21 2021-22 Mindtree Limited crore Dividend to non-controlling interest Profit/(loss) allocated to non-controlling interest (including consolidation adjustments) 1440.12 Effective % of non-controlling interest Other comprehensive income Profit/(loss) for the year Revenue Particulars 170.84 55.84 93.59 135.58 225.14 Dividend to non-controlling interest 236.68 455.44 541.80 consolidation adjustments) Total comprehensive income 39.01% 38.97% 547.88 2748.26 As at 31-3-2021 As at 31-3-2022 1328.59 As at 31-3-2021 49371.46 50913.19 As at 31-3-2022 L&T Finance Holdings Limited crore L&T Finance Limited Accumulated non-controlling interest Net assets (g)=(c)+(f) Net non-current assets (f)=(d)-(e) Non-current liabilities (e) Non-current assets (d) Net current assets (c)=(a)-(b) Current liabilities (b) Current assets Particulars Summarised Balance Sheet (ii) 552 NOTE [42] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements Integrated Annual Report 2021-22 551 112.12 176.57 340.18 Profit/(loss) allocated to non-controlling interest (including 2020-21 25.76% 25.73% (12.31) 226.45 303.19 Profit/(loss) allocated to non-controlling interest (including consolidation adjustments) 36.38% 33.74% 36.38% 33.74% Effective % of non-controlling interest 116.16 220.60 44.55 870.00 6.94 Total comprehensive income 2.42 43.19 62.02 Other comprehensive income 116.05 218.18 1.36 807.98 166.74 312.03 12125.67 10859.26 Profit/(loss) for the year 0.11 crore Larsen & Toubro Infotech L&T Technology Services 25.95% Effective % of non-controlling interest 927.13 999.12 2226.01 2325.20 Total comprehensive income 254.00 80.57 438.62 64.27 Other comprehensive income 673.13 918.55 1787.39 2260.93 4971.60 5873.68 11563.54 14406.43 Profit/(loss) for the year Revenue 2020-21 2021-22 2020-21 2021-22 Limited Limited Particulars 26.10% payables) (32.84) Total current liabilities Statutory Financial Reports Integrated Discussion and Analysis Report Management Corporate Overview 556 (viii) Trade receivables acquired have been substantially collected during the year. (vii) The transaction costs of 0.39 crore related to the acquisition have been expensed in the Statement of Profit and Loss for the year ended March 31, 2022. (vi) The entity has reported revenue of 43.10 crore and profit of 0.50 crore from the date of acquisition till March 31, 2022. Had the entity been acquired from April 1, 2021, it would have reported revenue of 57.50 crore and profit of ₹1.00 crore during 2021-22. (v) The Group has recognised contingent consideration in accordance with the terms of the share purchase agreement. The maximum contingent consideration of ₹14.13 crore is payable to the promoters of Cuelogic upon achievement of the specified financial targets. The fair value of the contingent consideration is determined by assigning probabilities to achievement of targets. (iv) Goodwill is attributable to future growth of business from this acquisition and assembled workforce. The goodwill is not deductible for income tax purposes. 37.40 63.86 26.46 12.86 Statements 5.97 Cuelogic crore 26.46 12.15 8.77 6.56 2.21 3.38 38.61 19.11 1.55 9.91 7.65 45.03 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [45] 2020-21 crore (xiv) Total comprehensive income [(ix)+(xii)+(xiii)] (xiii) Other comprehensive income (xii) Gain on sale of E&A business (net of tax) [includes reclassification of exchange differences on foreign currency translation 138.50 crore] Tax on above (including related deferred tax reversal) (xi) (x) Gain on sale of Electrical and Automation business before tax (ix) Profit for the year attributable to owners of the Company [(vii)-(viii)] (viii) Non-controlling interest - discontinued operations Profit/(loss) after tax [(v)-(vi)] Tax expenses (vii) (vi) Profit/(loss) before tax [(iii)-(iv)] (v) Total expenses (iv) Total income [(i)+(ii)] (iii) Other income (ii) Revenue from operations Particulars (i) No. Sr. (a) During the previous year 2020-21, the Group completed divestment of Electrical and Automation (E&A) business which was classified as discontinued operation. The operating profit from E&A business upto the date of divestment and the gain on divestment have been shown below. Disclosure pursuant to Ind AS 105 "Non-current Assets Held for Sale and Discontinued Operations": 19.50 1605.67 2.17 16.52 NOTE [44] Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements Integrated Annual Report 2021-22 555 14.40 128.19 48.78 84.27 (34.38) 43.92 Non- made controlling 44.52 Disclosures pursuant to Ind AS 103 "Business Combinations": (1.54) 2020-21 2021-22 crore 2670.26 2729.35 2473.71 2520.75 196.55 208.60 185.85 198.37 10.70 10.23 (0.60) Acquisition of Cuelogic Technologies Private Limited (i) On July 7, 2021, the Group has acquired 100% stake in Cuelogic Technologies Private Limited (Cuelogic), a Pune based company, operating in the IT & Technology Services. Cuelogic is a digital engineering company which builds and modernises digital products leveraging cloud native metholodologies across web and mobile. Cuelogic will help bolster Group's digital engineering practice. Cuelogic crore Goodwill Less: Fair value of net assets acquired Purchase consideration (D=A+B+C) Contingent consideration payable over three years (C) Deferred consideration (B) Cash (A) (iii) Calculation of Goodwill: Net assets acquired Total liabilities Other current liabilities Trade payables Current liabilities Deferred tax liabilty Non-current liabilities Liabilities Total assets Other current assets Cash and bank balances Trade receivables Current assets Other non-current assets Property, plant and equipment Intangible assets Non-current assets Assets Assets acquired and liabilities recognised on the date of acquisition are as follows: (ii) 0.81 31-3-2021 5.38 1528.47 Trade payables Borrowings Liabilities associated with group(s) of assets classified as held for sale: Total Other assets Tax assets Cash and cash equivalents Trade receivables Investments Other loans Right-of-use assets Other intangible assets Goodwill Provisions Property, plant and equipment Particulars 558 (e) The details of assets/disposal group classified as held for sale and liabilities associated thereto are as under: Others Current assets (L&T Vision Ventures Limited) As at 31-3-2021 Financial services Asset management business (L&T Investment Management Limited) As at 31-3-2022 Reportable segment Asset/disposal group (d) The Group has following non-current assets/disposal group recognised as held for sale: Net increase/(decrease) in cash and cash equivalents Group(s) of assets classified as held for sale: Other liabilities Total crore 3.20 79.73 0.01 73.96 1.60 4.17 3.19 6.24 830.78 5.39 11.17 3.32 18.98 160.01 6.24 0.01 1.40 2.21 627.88 0.41 31-3-2021 As at crore As at 31-3-2022 36.82 6.98 (57.17) 87.01 2020-21 Cash flows from financing activities 1611.05 Cash flows from investing activities Particulars Provisions Trade payables Borrowings Liabilities associated with group(s) of assets classified as held for sale: Total Other assets Tax assets Cash and cash equivalents Trade receivables Inventories Other loans Right-of-use assets Intangible assets under development Tax liabilities (net) Other intangible assets Capital work-in-progress Property, plant and equipment Group(s) of assets classified as held for sale: Particulars (b) Details of net assets of Electrical & Automation business divested: 14.90 8252.82 8185.46 2522.46 10707.92 52.46 52.46 30.12 82.58 Goodwill Other liabilities Total Carrying amount of net assets sold (c) Summarised Statement of Cash Flows of discontinued operations: NOTE [45] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements Integrated Annual Report 2021-22 557 2455.08 1753.48 574.71 6.84 169.44 943.43 59.06 4208.56 504.59 1.63 151.74 1195.14 840.18 3.35 17.50 130.46 205.55 335.11 11.22 812.09 August 31, 2020 As at crore Cash flows from operating activities 1474.69 As at crore 320.06 1728.88 1735.14 Closing net assets (0.09) 17.31 Other adjustments 3.95 instruments Equity component of other financial (102.92) 109.24 (8.72) 414.66 11.28 13.09 (23.04) (0.66) (130.07) 2142.95 1909.87 24.76 (8.53) (234.10) (234.10) 332.97 35.85 As at 31-3-2021 As at 31-3-2022 As at 31-3-2021 As at 31-3-2022 360.10 9.85 (16.45) 385.18 360.10 2052.65 183.65 196.44 248.80 192.04 881.72 884.92 Carrying amount Other adjustments companies Parent's investment in group 1128.81 1201.84 183.65 196.44 248.80 192.04 881.72 884.92 Group's share 51.00% 51.00% 51.00% 51.00% 60.00% 60.00% 51.00% 51.00% Group's share in % 1909.87 (96.68) 10.88 34.63 1247.35 (107.69) 414.66 Net assets (E) Non-controlling interest (NCI) 15.69 10.08 (D) Total non-current liabilities payables) Other liabilities (including trade 15.69 10.08 payables) Financial liabilities (excluding trade (A+B-C-D-E) Non-current liabilities 1482.26 1299.21 750.15 304.21 523.86 353.76 655.23 331.03 33.08 22.82 466.25 1583.95 1987.21 1705.19 (C) 2555.64 1735.14 -- 500.23 252.67 As at 31-3-2022 As at 31-3-2021 1732.94 253.08 241.02 Profit/(loss) for the year (net of NCI) Dividend distributed during the year Other comprehensive income (net of NCI) 1728.88 Opening net assets As at 31-3-2022 L&T Infrastructure Development Projects Limited (consolidated) Limited Particulars L&T - MHI Power Turbine Generators Private L&T Sapura Shipping Private Limited L&T - MHI Power Boilers Private Limited crore 554 (b) Reconciliation of carrying amounts of material joint ventures: 138.64 1909.87 8900.32 574.11 496.23 7596.56 83.75 2052.64 360.10 385.17 414.66 320.06 1728.88 73.23 325.90 58.06 558.29 8326.21 7100.33 As at 31-3-2021 527.79 As at 31-3-2022 10.88 Corporate Overview (232.99) 134.00 27.13 21.13 (113.13) (94.60) 230.04 240.36 Total comprehensive income (net of NCI) (102.92) 109.24 (8.72) 11.28 (d) Financial information in respect of individually not material joint ventures/associates: (16.45) (23.04) (0.66) Other comprehensive income (net of NCI) (130.07) 24.76 35.85 9.85 (96.68) (107.69) 253.08 241.02 Profit/(loss) for the year (net of NCI) (34.91) 13.09 crore As at As at Total Material joint ventures Sub-total Non-material joint ventures Non-material associates Particulars (f) Share in profit/(loss) of joint ventures/associates (net): Total Material joint ventures Sub-total Non-material joint ventures Non-material associates Particulars (e) Carrying amount of investments in joint ventures/associates: (48.47) 44.55 (14.09) 0.63 (34.38) 43.92 Total comprehensive income for the year Other comprehensive income for the year Profit/(loss) for the year 196.55 208.60 Aggregate carrying amount of investment in individually not material joint venture/associate Aggregate amounts of the Group's share of: 31-3-2021 31-3-2022 Particulars (35.84) 19.85 1159.54 (0.14) (83.34) 1763.44 2310.60 Interest income Revenue 2020-21 2021-22 2020-21 2021-22 2020-21 2021-22 2020-21 2021-22 L&T Infrastructure Development Projects Limited (consolidated) 0.70 Limited L&T Sapura Shipping Private Limited L&T - MHI Power Boilers Private Limited Particulars crore (c) Summarised Statement of Profit and Loss of material joint ventures: NOTE [43] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO Statements Statutory Financial Reports Discussion and Analysis Report Integrated Management L&T - MHI Power Turbine Generators Private 0.23 607.55 724.85 Tax expense (842.38) (893.51) (36.68) (50.11) (7.93) (12.94) (1.92) (0.30) Finance cost (491.09) (580.46) (52.64) (49.46) (61.04) (61.13) (67.17) (63.32) Depreciation and amortisation 54.53 38.29 10.83 2.29 0.13 0.25 42.76 24.92 1548.31 1711.68 (89.15) Payment (422.50) (Dr)/Cr to Arabia Kingdom of Saudi 22.00 22.00 Qatar 68.00 68.00 India 60.00 60.00 Metro Tunneling Delhi-L&T Shanghai Urban Construction (Group) Corporation Joint Venture India L&T-Shanghai Urban Construction (Group) Corporation Joint Venture CC27 Delhi Aktor-Larsen & Toubro-Yapi Merkezi-STFA-Al Jaber Engineering Joint Venture Civil Works Joint Venture 11 0123 75.00 75.00 India Metro Tunneling Chennai-L&T Shanghai Urban Construction (Group) Corporation Joint Venture 90.00 90.00 India L&T-Hochtief Seabird Joint Venture 29.00 29.00 14 L&T-Shanghai Urban Construction (Group) Corporation Joint Venture 100.00 100.00 India L&T-IHI Consortium 18 100.00 100.00 India L&T-ISDPL (JV) 17 8 65.00 India L&T-STEC JV Mumbai 16 50.00 50.00 India DAEWOO and L&T Joint Venture 51.00 51.00 India 65.00 19 Larsen and Toubro Limited-Scomi Engineering BHD Consortium-Residual Joint Works Joint Venture 26.00 India 49.00 India Desbuild L&T Joint Venture 1 Proportion of effective ownership interest (%) As at 31-3-2021 Proportion of effective ownership interest (%) Principal place Name of joint operations (with specific ownership interest in the arrangement) of business No. Sr. As at 31-3-2022 NOTE [40] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO Statements Statutory Financial Reports Integrated Discussion and Analysis Report Management Corporate Overview Acquisition (%) 49.00 2 Larsen and Toubro Limited-Shapoorji Pallonji & Co. Limited Joint Venture India Metro Tunneling Group 7 26.00 26.00 India International Metro Civil Contractors Joint Venture 43.00 43.00 India HCC-L&T Purulia Joint Venture 26.00 65.00 India L&T-AM Tapovan Joint Venture 456 1 ∞ 9 80.00 80.00 Qatar Al Balagh Trading & Contracting Co W.L.L- L&T Joint Venture 3 50.00 50.00 65.00 India 15 60.00 India L&T Infrastructure Engineering - LEA Associates South Asia JV 60.00 50.00 50.00 Arabia Larsen Toubro Arabia LLC - Subsea Seven Saudi Company Limited (formerly known as EMAS Kingdom of Saudi Saudi Arabia Limited) 33 50.00 50.00 61.00 India 32 99.00 99.00 India L&T - PCIPL JV 31 55.00 55.00 UAE L&T Powerchina JV Bauer- L&T Geo Joint Venture 30 61.00 L&T Infra Engineering JV United Consultancy (Dr)/Cr to Retained (Dr)/Cr to (Dr)/Cr to Non- made controlling Payment Acquisition (%) Name of group companies 2020-21 2021-22 crore (i) On account of acquisition of part stake (from open market): 35 (a) Change in the Group's ownership interest in a subsidiary: NOTE [42] Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements Integrated Annual Report 2021-22 549 The components of other equity shown in the Consolidated Balance Sheet include the Group's share in the respective reserves of subsidiaries, joint arrangements and associates. Retained earnings comprise Group's share in general reserve and balance of Profit and Loss. Non- controlling interest includes its share in the reserves. NOTE [41] 75.81 75.81 Bhutan Disclosure pursuant to Ind AS 112 "Disclosure of interest in other entities": Subsidiaries 60.00 34 India 24 75.00 75.00 Qatar L&T-AL-Sraiya LRDP 6 Joint Venture 23 100.00 100.00 UAE L&T-Delma Mafraq Joint Venture 100.00 100.00 India L&T- Inabensa Consortium 21 50.00 50.00 India 60.00 20 22222 Larsen & Toubro Limited & NCC Limited Joint Venture India Larsen and Toubro Limited-Scomi Engineering BHD Consortium-O&M Joint Venture 55.00 L&T - Tecton JV 55.00 56.67 56.67 India LTH Milcom Private Limited 28 90.00 90.00 Tanzania LNT-Shriram EPC Tanzania UJV 29 50.00 27 25 UAE 50.00 Besix - Larsen & Toubro Joint Venture 26 Larsen & Toubro Limited - Passavant Energy & Environment JV India 50.00 50.00 563 Infrastructure segment comprises engineering and construction of (a) building and factories, (b) transportation infrastructure, (c) heavy civil infrastructure, (d) power transmission & distribution, (e) water & effluent treatment and (f) minerals & metals. Hydrocarbon segment comprises EPC solutions for the global Oil & Gas Industry from front-end design through detailed engineering, modular fabrication, procurement, project management, construction, installation and commissioning. Power segment comprises turnkey solutions for Coal-based and Gas-based thermal power plants including power generation equipment with associated systems and/or balance-of-plant packages. Heavy Engineering segment comprises manufacture and supply of custom designed, engineered critical equipment & systems to core sector industries like Fertiliser, Refinery, Petrochemical, Chemical, Oil & Gas and Thermal & Nuclear Power. Defence Engineering segment comprises (a) design, development, serial production and through life-support of equipment, systems and platforms for Defence and Aerospace sectors and (b) design, construction and repair/refit of defence vessels. Electrical & Automation segment (upto the date of divestment and disclosed as discontinued operation) comprises (a) manufacture and sale of low and medium voltage switchgear components, custom-built low and medium voltage switchboards, electronic energy meters/protection (relays) systems and control & automation products and (b) marine control & automation systems. IT & Technology Services segment comprises information technology and integrated engineering services. Financial Services segment comprises rural finance, housing finance, infrastructure finance and asset management. Developmental Projects segment comprises (a) development, operation and maintenance of infrastructure projects, toll and fare collection and (b) power generation & development (i) thermal power and (ii) hydel power (upto the date of divestment). Others segment includes realty, manufacture and sale of industrial valves, smart world & communication projects (including military communications), manufacture, marketing and servicing of construction equipment and parts thereof, marketing and servicing of mining machinery and parts thereof, manufacture and sale of rubber processing machinery and and digital platforms (i) SuFin for B2B e-commerce & (ii) EduTech for higher education and professional skilling. None of the businesses reported as part of others segment meet any of the quantitative thresholds for determining reportable segments for the year ended March 31, 2022. • Disclosure pursuant to Ind AS 115 "Revenue from Contracts with Customers": Notes forming part of the Consolidated Financial Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [47] (a) Disaggregation of revenue into operating segments and geographical areas: 2021-22 Revenue as per Ind AS 115 Segment Domestic • Foreign Integrated Annual Report 2021-22 • Corporate Overview (iv) Segment composition: Other revenue (c) Revenue contributed by any single customer in any of the operating segments, whether reportable or otherwise, does not exceed 10% of the Group's total revenue. (d) The Group's reportable segments are organised based on the nature of products and services offered by these segments. (e) Segment reporting: basis of identifying operating segments, reportable segments and definition of each reportable segment: Basis of identifying operating segments: (i) Operating segments are identified as those components of the Group (a) that engage in business activities to earn revenues and incur expenses (including transactions with any of the Group's other components); (b) whose operating results are regularly reviewed by the Group's Corporate Executive Management to make decisions about resource allocation and performance assessment; and (c) for which discrete financial information is available. The Group has nine reportable segments [described under "segment composition"] which are the Group's independent businesses. The nature of products and services offered by these businesses are different and are managed separately given the different sets of technology and competency requirements. In arriving at the reportable segment, the six operating segments have been aggregated and reported as "infrastructure segment" as these operating segments have similar economic characteristics in terms of long term average gross margins, nature of the products and services, type of customers, methods used to distribute the products and services and the nature of regulatory environment applicable to them. (ii) Reportable segments: An operating segment is classified as reportable segment if reported revenue (including inter-segment revenue) or absolute amount of result or assets exceed 10% or more of the combined total of all the operating segments. 562 Management Integrated Discussion and Analysis Report Statutory Financial Reports Statements LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [46] (contd.) (iii) Performance of a segment is measured based on segment profit (before interest and tax), as included in the internal management reports that are reviewed by the Group's Corporate Executive Management. The performance of financial services segment and finance lease activities of power development segment are measured based on segment profit (before tax) after deducting the interest expense. • Total Segment Total as per 42.89 2668.78 1492.11 1176.67 Heavy Engineering 3174.15 21.67 3152.48 148.25 3004.23 Power 16924.54 15.48 16909.06 7985.88 8923.18 Hydrocarbon report 61431.32 302.29 61129.03 15689.25 45439.78 Infrastructure Loss/Segment of Profit and Total as per Statement crore 2711.67 Defence Engineering 2565.67 823.24 1056.47 521.45 14923.37 13403.55 12946.28 457.27 2564.96 5331.26 122576.29 648.53 50908.05 71668.24 Total 2564.96 4682.73 Others Developmental Projects 1.68 455.59 Financial Services Total 25463.36 23656.52 1806.84 IT & Technology Services 1520.63 9.45 1511.18 462.59 1048.59 operations) Electrical & Automation (discontinued 3396.30 7.39 3388.91 25463.36 crore Other revenue Domestic 2724.29 42.64 2681.65 1084.61 1597.04 Heavy Engineering 4418.00 3.00 4415.00 264.56 4150.44 19174.56 63.82 19110.74 6789.80 12320.94 report 72404.36 136.03 72268.33 16737.96 55530.37 Power Hydrocarbon Infrastructure Loss/Segment of Profit and Statement Defence Engineering 2796.28 418.70 3214.98 50769.38 Revenue as per Ind AS 115 2020-21 156521.23 5987.71 4367.52 1084.69 29.82 12851.19 143670.04 55725.83 87944.21 Total 5957.89 453.15 Foreign 5504.74 11971.10 11488.25 32255.77 32255.77 482.85 3282.83 3282.83 Developmental Projects 482.85 Financial Services 29977.05 2278.72 IT & Technology Services 3217.92 2.94 Others 50063.99 50935.49 2601.29 25618.76 Financial Services 11971.10 11971.10 13403.55 13403.55 Developmental Projects 4367.52 4367.52 3621.43 3621.43 Others 5987.71 294.13 6281.84 5852.71 240.04 155.40 25463.36 32473.82 218.05 314.52 3038.81 2711.67 306.81 3018.48 Defence Engineering 3217.93 8.47 6092.75 3226.40 13.82 3410.12 Electrical & Automation (discontinued operations) 1520.63 85.04 1605.67 IT & Technology Services 32255.77 3396.30 Total 156521.23 2111.75 2670.26 2729.35 4879.35 8107.81 (1207.12) (239.32) 1809.22 2024.21 561 1159.54 0.07 2670.26 4277.25 6322.92 Consolidated total Inter-segment Unallocable Segment total 735.65 984.87 0.06 2729.35 2724.29 Integrated Annual Report 2021-22 Notes forming part of the Consolidated Financial Statements (contd.) Revenue [1] crore Total (i+ii) Total foreign countries (ii) Other countries United Kingdom Kuwait Algeria Notes forming part of the Consolidated Financial Statements Qatar United Arab Emirates Sultanate of Oman United States of America Kingdom of Saudi Arabia Foreign countries (ii): India (i) Particulars (b) Geographical information NOTE [46] (contd.) Bangladesh Total Heavy Engineering 18.49 10378.04 995.39 1565.20 2930.32 1666.82 3019.13 1984.40 1670.39 2140.05 1456.73 2473.87 1981.85 2813.65 2333.69 2997.58 7641.83 7848.53 11099.95 55782.63 3621.43 156521.23 2181.15 Foreign countries 48168.09 47882.84 India As at 31-3-2021 31-3-2022 As at 17806.21 Particulars crore [1] Geography wise break up of revenue is based on location of project other than service industries where it is based on location of customer. 135979.03 156521.23 Total Less: Discontinued operations 1520.63 137499.66 Non-current assets 21914.49 86564.17 2020-21 72404.36 1155.73 73560.09 61431.32 530.32 61961.64 Hydrocarbon 19174.55 Infrastructure 90.66 16924.54 39.26 16963.80 Power 4418.00 30.19 4448.19 3174.15 19265.21 3192.64 Revenue For the year ended 31-3-2021 Inter- segment 2021-22 100738.60 Corporate Overview Management Integrated Discussion and Analysis Report Statutory Financial Reports Statements LARSEN & TOUBRO Total Notes forming part of the Consolidated Financial Statements (contd.) Disclosure pursuant to Ind AS 108 "Operating Segment": (a) Information about reportable segments: crore Particulars For the year ended 31-3-2022 External Inter- segment Total External NOTE [46] 5852.71 balances (A-B) 19799.41 21262.10 1462.69 Less: Revenue from discontinued (ii) Impairment of funded exposure in L&T Special Steels and Heavy Forgings Private Limited: impairment of 1139.03 crore, applying value-in-use method and using discount rate of 11.90% and provision towards constructive obligation to fund its future losses 14.85 crore, reduced by interest income of 78.58 crore from the joint venture. (iii) Impairment of following assets in power development business on assessment of recoverable value and management's long-term plan for the business: 2657.00 crore comprising: 1075.30 crore (net), comprising Gain on divestment of wealth management business: 176.28 crore. (i) (ii) Tax expense on transfer of NxT digital business from the Parent to Mindtree Limited, a subsidiary: 46.70 crore. (b) Exceptional items (net of tax) for 2020-21 include: (i) Gain on divestment of stake in a hydel power plant: 143.63 crore. (a) Exceptional items (net of tax) for 2021-22 include: 27.62 crore (previous year: 80.04 crore) [included in Note 47(a) supra] Intangible assets have been recognised towards rights to charge the users of the utility. (e) obligations relating to supply of electricity etc. (d) obligations relating to competing facilities (c) providing reasonable assistance in obtaining access to all necessary infrastructure facilities and utilities (b) providing reasonable support and assistance in procuring applicable permits required for construction (a) providing required constructible right of way for construction of rail system and land required for construction of depots and transit oriented development Major obligations of the Government are: (e) operation and maintenance of the rolling stock and equipment necessary and sufficient for handling users equivalent to 110% of the average PHPDT etc. NOTE [48] Property, plant and equipment including capital work-in-progress in a hydel power plant: 1053.00 crore, applying value-in- use method and using discount rate of 12.75%. Finance lease receivables in a thermal power project: 1604.00 crore, applying fair value method based on benchmark multiples (level 2 of the fair value hierarchy). 567 Integrated Annual Report 2021-22 crore Other current assets 5 Other financial assets 4 Other loans 3 Trade receivables Construction revenue recognised 2 1 Particulars Sr. No. (a) Current assets expected to be recovered within twelve months and after twelve months from the reporting date: Disclosure pursuant to Ind AS 1 "Presentation of financial statements": NOTE [49] Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements Inventories As at 31-3-2022 Classification of service arrangement (d) Remuneration Period of the concession (h) The Group has undertaken a project for construction, operation and maintenance of the Metro Rail System on Design-Build-Finance- Operate-Transfer (DBFOT) basis as per the concession agreement with the government authorities. The significant terms of the arrangement are as under: 6020.31 5596.80 23743.85 18652.99 67802.71 64675.40 7155.71 8488.29 5 years Beyond Time for expected conversion in revenue 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years 114741.81 111800.51 1 Year 158010.81 133445.56 378384.27 341750.48 Upto Total As at March 31, 2021 Funding from grantor Infrastructure return at the end of the concession period Renewal and termination options Initial period of 35 years and extendable by another 25 years at the option of the concessionaire subject to fulfilment of certain conditions under concession agreement. Considered further extension of initial concession period by 7 years in terms of Article 29 of Concession Agreement. Fare collection rights from the users of the Metro Rail System, license to use land provided by the government for constructing depots and for transit oriented development and earn lease rental income on such development and grant of viability gap fund. Viability Gap Funding of 1458 crore. issuance of Golden Share to the Government (c) (b) change in ownership (a) project agreements Major obligations of the concessionaire are relating to: Rights & Obligations NOTE [47] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) maintenance of aesthetic quality of the Rail System LARSEN & TOUBRO Statutory Financial Reports Discussion and Analysis Report Integrated Management Corporate Overview 566 Further extension of 25 years will be granted at the option of the concessionaire upon satisfaction of Key Performance Indicators laid under the concession agreement. This option is to be exercised by the concessionaire during the 33rd year of the initial concession period. Termination of the concession agreement can either be due to (a) Force Majeure (b) Non Political event (c) Indirect political event (d) Political event. On occurrence of any of the above events, the obligations, dispute resolution, termination payments etc. are as detailed in the concession agreement. Being DBFOT project, the project assets have to be transferred at the end of concession period. Statements As at 31-3-2021 Within After 1 406.10 Total twelve months 38.66 367.44 406.54 54.29 352.25 months months months twelve Total twelve twelve Note After Lease liability 2 Trade payables: Due to micro enterprises and small enterprises 21.90 5328.93 5506.97 31269.63 488.99 45256.24 120.05 2352.58 575.91 368.94 2321.53 50568.33 42903.66 22.20 6643.32 5307.03 5888.93 34644.10 25762.66 735.36 3355.86 2244.34 2620.50 31 Provisions 6621.12 28755.17 Within 30 29 Other financial liabilities 345 48246.80 28 Due to others 94.72 481.19 Other current liabilities After Within As at 31-3-2021 3606.22 46138.92 41202.04 5943.32 2898.41 1984.66 44154.26 13 3044.91 11 months 2214.32 months After twelve twelve Total twelve months months twelve Note Within Total As at March 31, 2022 5820.54 42229.78 As at 31-3-2022 crore No. Particulars Sr. 568 (b) Current liabilities expected to be settled within twelve months and after twelve months from the reporting date: 3251.68 54791.48 1027.74 8210.94 235.35 280.34 235.35 3840.04 3250.33 60132.89 46580.54 5.81 9248.40 3834.23 50884.49 19 18 280.34 17 1.35 Outstanding performance crore 757584.33 375.95 375.05 430.06 Provision/(reversal) of allowance for ECL Changes in allowance for ECL: 3405.59 2021-22 receivables Provision on trade 1012.05 1174.22 3181.21 2020-21 2021-22 2020-21 contract assets Provision on 144.83 Additional provision (net) 200.08 279.07 (d) Contract balances: 1174.22 1619.72 0.09 3405.60 3892.51 Provision as at March 31 0.20 Addition on account of business combination crore (0.61) (4.24) 3.10 Translation adjustment (425.58) (146.52) Written off as bad debts 17.95 69.28 0.27 Provision as at April 1 Particulars Movement in expected credit loss ("ECL") during the year: Discontinued operations Continuing operations Total Discontinued operations Continuing operations Year At a point in time Over a period of time Total crore 1520.63 135979.03 9.45 14913.92 1511.18 121065.11 1048.59 70619.65 (b) Break up of revenue (as per Ind AS 115) into over a period of time and at a point in time: 462.59 50445.46 Total operations 564 (i) Movement in contract balances during the year: 2021-22 2020-21 133075.90 (c) NOTE [47] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO Statements Statutory Financial Reports Discussion and Analysis Report Integrated 133075.90 Management 10382.72 1398.57 8984.15 112193.57 112.61 112080.96 10594.14 10594.14 Corporate Overview 137499.66 crore 2020-21 172612.76 185311.91 Outstanding performance and time for its expected conversion into revenue: (g) [1] including full value of partially executed contracts Closing contracted price of orders on hand as at March 31 [1] (i+ii+iii+iv) Balance revenue to be recognised in future viz. Order book (iv) Increase/decrease) due to exchange rate movements (net) (iii) Less: Revenue out of orders completed during the year Revenue out of orders under execution at the end of the year (i) Revenue recognised upto previous year (from orders pending completion at the end of the year) (ii) Total revenue recognised during the year Closing contracted price of orders on hand as at March 31 [1] Orders completed during the year Less: Addition/(deletion) on account of business combination/divestment Increase/(decrease) due to exchange rate movements (net) and others Increase due to additional consideration recognised as per contractual terms/(decrease) due to scope reduction (net) Fresh orders/change orders received (net) Add: 544.16 (19858.81) (5195.92) 1641.45 849547.00 341750.48 378384.27 585.64 (3447.08) 324114.92 364086.72 91133.29 726478.59 110523.09 33146.95 122576.29 143670.04 757584.33 849547.00 114481.26 95534.85 (1971.03) 31443.00 757584.33 Opening contracted price of orders on hand as at April 1 [1] 2020-21 balances (A-B) 23830.18 28019.45 27819.73 51849.63 47619.14 (B) Contract Net contract liabilities assets (A) 27819.73 30781.57 2961.84 4424.53 19799.41 Net increase/decrease) Balance as at March 31 47619.14 Balance as at April 1 (B) Contract Contract Net contract liabilities Contract assets (A) Particulars 52043.67 2021-22 (4230.49) (4030.77) 2021-22 Particulars crore Reconciliation of contracted price with revenue during the year: (f) NOTE [47] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements (199.72) Integrated Annual Report 2021-22 (ii) Recognised as contract assets as at March 31, 2022: 88.46 crore (as at March 31, 2021: 117.28 crore). Amortisation in Statement of Profit and Loss: 68.94 crore (previous year: 48.77 crore). (i) (e) Cost to obtain/fulfil the contract: Revenue recognised from opening balance of contract liabilities amounts to 6520.65 crore (previous year: 6529.93 crore). (iii) Revenue recognised from the performance obligation satisfied (or partially satisfied) upto previous year (arising out of contract modifications) amounts to 183.85 crore (previous year: 184.65 crore). During the previous year, decrease in net contract balances is primarily due to lower revenue recognition as compared to progress bills raised. During the current year, increase in net contract balances is primarily due to higher revenue recognition as compared to progress bills raised. Note: 565 2998.68 754.34 692.09 Statements Statutory Financial Reports Integrated Discussion and Analysis Report Management Corporate Overview Note: Impairment loss included in segment expense: Hydrocarbon segment: 0.30 crore (previous year: Nil), Financial Services segment: Nil (previous year: 5.18 crore), Developmental Projects segment: Nil (previous year: 76.17 crore) and Corporate Unallocable: Nil (previous year: 1.92 crore). 137.67 135.31 2904.21 2947.95 Consolidated total (21.89) (20.79) Inter-segment (2.14) (0.69) Relates to discontinued operations 1.95 4.14 77.51 125.31 LARSEN & TOUBRO Unallocable Notes forming part of the Consolidated Financial Statements (contd.) (a) Information about reportable segments: 194.80 6.80 2020-21 2021-22 2020-21 2021-22 2020-21 2021-22 Defence Engineering Heavy Engineering Power Hydrocarbon Infrastructure segment result and joint ventures accounted applying equity method not included in Profit/(loss) of associates crore Finance costs included in segment expense segment income Interest income included in Particulars NOTE [46] (contd.) 137.86 131.17 2849.28 116.76 Defence Engineering 0.82 1.18 47.21 46.41 Heavy Engineering 0.48 0.91 35.58 32.33 Power 3.58 2.56 179.36 170.45 Hydrocarbon 33.53 36.31 705.46 737.86 136.69 1.83 1.14 Electrical & Automation (discontinued operations) 2843.43 Segment total 2.39 2.29 104.26 101.95 Others 390.97 330.44 Developmental Projects 276.08 54.51 86.41 104.29 Financial Services 39.27 59.66 1162.65 1202.94 IT & Technology Services 2.14 0.69 26.43 0.40 (1.73) 0.63 105.93 516.16 Hydrocarbon 1177.39 1996.60 Infrastructure As at 31-3-2021 Investment in associates and joint ventures accounted applying equity method included in segment assets As at 31-3-2022 2020-21 2021-22 Particulars assets Additions to non-current crore 14.40 128.19 7691.04 5952.54 1377.66 1063.35 Consolidated total 4.88 241.11 Power 53.30 55.88 Others 1247.34 324.35 656.13 Developmental Projects 142.31 Financial Services 1024.00 1847.12 IT & Technology Services (142.67) 68.81 13.80 40.97 56.83 84.26 Defence Engineering 36.32 42.17 Heavy Engineering 4.23 319.28 1173.34 1194.99 Electrical & Automation (discontinued operations) Infrastructure (150.36) (515.10) 31.54 Developmental Projects 7206.59 5741.54 257.82 280.34 Financial Services 33.05 131.24 IT & Technology Services 0.63 (discontinued operations) Electrical & Automation 8.09 27.17 (86.68) 173.29 151.41 (50.03) (71.71) 3.24 394.47 361.36 627.12 20.93 Inter-segment (0.63) Relates to discontinued operations 35.53 (276.08) (194.80) 948.85 1055.17 Unallocable (21.13) (330.39) 128.19 6297.70 759.83 523.28 Segment total (0.14) (0.01) 63.82 67.33 Others (63.93) 8109.79 2020-21 12.20 2020-21 (87.43) 295.48 Deferred tax (3923.39) (4512.09) Current tax 12235.80 14410.73 Tax expense: Profit before exceptional items and tax 2031.49 1187.10 (3913.44) (3125.70) (24.95) (84.37) 14227.07 (65.32) 16414.65 1122.96 938.52 Net profit after tax (before exceptional items) from continuing operations 10194.12 8224.98 Profit from discontinued operations Discontinued operations 4683.36 10419.24 Profit for the year from continuing operations 14.40 128.19 (net) Share in profit/(loss) after tax of joint ventures/associates (3556.02) 4668.96 (196.55) 10291.05 96.93 Exceptional items (net of tax) (48.44) 186.20 Deferred tax (22.77) Current tax Tax expense on exceptional items: (3693.78) 119.70 Exceptional items before tax Net profit after tax from continuing operations 10790.50 (230.59) 1469.80 5182.41 Infrastructure Segment result [Profit/(loss) before interest and tax] 135979.03 135979.03 156521.23 156521.23 Total (1304.14) (1304.14) (2111.75) (2111.75) Inter-segment revenue (1605.67) (85.04) (1520.63) Revenue from discontinued operations 2021-22 137499.66 1389.18 138888.84 4521.54 Hydrocarbon 1500.64 1369.25 4823.20 6410.44 84.37 Unallocated corporate income net of expenditure Finance costs Inter-segment margins on capital jobs Result of discontinued operations Total Others Developmental Projects 1285.78 Financial Services Electrical & Automation (discontinued operations) 616.98 533.48 Defence Engineering 488.32 470.46 Heavy Engineering 111.22 139.49 Power IT & Technology Services Tax expense of discontinued operations 158632.98 Net profit after tax from discontinued operations 5984.01 6301.54 13636.87 14375.84 Others 8689.24 7416.60 30091.85 27552.27 Developmental Projects 89968.72 86746.21 107342.41 105459.21 6898.22 8088.49 30340.20 34529.13 3766.94 3732.45 5857.41 Segment total 295693.09 284592.69 190948.57 (2552.58) Non-cash expenses other than depreciation included in segment expense 2021-22 Depreciation, amortisation, impairment & obsolescence included in segment Particulars crore 223353.65 224675.19 311273.71 320048.92 4847.75 Consolidated total assets/liabilities (2651.53) (2009.97) (2651.53) Inter-segment assets/liabilities 40521.40 36378.15 28690.99 27007.36 Corporate unallocated assets/liabilities 184842.22 (2009.97) 1430.06 expense 3169.97 Particulars crore 560 (a) Information about reportable segments: NOTE [46] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements Integrated Annual Report 2021-22 11582.93 8669.33 profit/(loss) of joint ventures/associates Net profit after tax, non-controlling interests and share in (1338.35) (1749.91) Non-controlling interest for the year 12921.28 10419.24 discontinued operations 8237.92 Net profit after tax from continuing operations & 1314.82 Segment Assets As at 31-3-2022 559 Segment Liabilities As at 31-3-2022 2899.17 4672.13 As at 31-3-2021 6694.17 7037.69 11489.78 11632.20 10346.92 13799.14 51943.12 60959.09 4757.17 85192.89 77112.89 Infrastructure Power Heavy Engineering Hydrocarbon Defence Engineering IT & Technology Services Financial Services As at 31-3-2021 138.75 582.49 117.77 14.36 (329.17) (158.70) 488.34 521.64 Unused tax losses for which no deferred tax asset is recognised in Balance Sheet: (vii) Tax effect on various other items (f) (e) Tax expense recognised during the year [(e)=(c)+(d)] Total effect of tax adjustments [(i) to (vii)] (vi) Effect of current tax related to earlier years (iv) Tax effect of losses of current year on which no deferred tax benefit is recognised (v) Effect of tax paid on foreign source income which is exempt from tax in India (166.56) (31.90) (iii) Effect of previously unrecognised tax losses and unutilised tax credits used to reduce tax expense 875.18 582.37 Effective tax rate [(f)=(e)/(a)] 1560.03 (ii) Unrecognised deductible temporary differences for which no deferred tax asset is recognised in Balance Sheet: 6425.64 Sr. crore 8757.20 11466.36 5206.14 1280.40 FY 2021-22 to FY 2028-29 5363.93 2482.70 FY 2022-23 to FY 2029-30 2270.66 FY 2021-22 to FY 2028-29 3619.73 FY 2022-23 to FY 2029-30 Expiry year As at 31-3-2021 crore Expiry year As at 31-3-2022 * crore Total Tax losses (Capital loss) - Amount of losses having no expiry - Amount of losses having expiry Tax losses (Business loss and unabsorbed depreciation) Particulars (c) (i) 33.24% 29.18% 4239.39 (21.41) crore (ii) Statutory Financial Reports Discussion and Analysis Report Integrated Management Corporate Overview 531.41 113.09 Income tax expense/(income) [(i)+(ii)] 520.17 15.71 4.42 (6.69) On exchange differences in translating the financial statements of foreign operations 31.14 (23.02) On gain/(loss) on fair value of debt securities 481.63 44.65 2.98 As at On mark to market gain/(loss) on cash flow hedges Statements Tax effect on impairment/(reversal) and fair valuation losses recognised on which deferred tax asset is not recognised LARSEN & TOUBRO NOTE [51] (contd.) 52.83 58.78 Tax on Corporate Social Responsibility expenses, not tax deductible (d) (i) 4865.61 3657.02 25.17% 25.17% 19332.52 14530.43 8542.02 10790.50 14530.43 2020-21 2021-22 (c) Tax on accounting profit [(c)=(a)*(b)] (b) Corporate tax rate as per Income Tax Act, 1961 Continuing operations (including exceptional items) Discontinued operations Profit before tax from: Particulars Sr. No. (a) (b) Reconciliation of Income tax expense and accounting profit multiplied by domestic tax rate applicable in India: Notes forming part of the Consolidated Financial Statements (contd.) Particulars 19.15 31-3-2022 6 L&T Hydrocarbon Engineering Limited Group Gratuity Scheme 8 L&T-Gulf Employees Group Gratuity Assurance Scheme 1 Larsen & Toubro Limited Senior Officers' Superannuation Scheme 45.45 (5.48) (248.47) 4035.07 Deferred tax liabilities 1047.38 L&T Shipbuilding Limited Employees Group Gratuity Assurance Scheme (1.53) (6.83) (192.54) 1248.25 Other items giving rise to temporary differences 282.62 (0.23) 45.42 10.41 227.02 0.03 4 2 Larsen & Toubro Gratuity Fund Superannuation Trust 0.77 24 [1] The company ceased to be a joint venture w.e.f. October 21, 2021 L&T Infrastructure Engineering Limited and LEA Associates South Asia Private Limited JV LLP [2] [2] The entity is formed on May 24, 2021 (iii) Name of post-employment benefit plans with whom transactions were carried out during the year: Provident Fund Trusts: 1 Larsen & Toubro Officers & Supervisory Staff Provident Fund 3 Larsen & Toubro Limited Provident Fund 2 Larsen & Toubro Limited Provident Fund of 1952 4 L&T Kansbahal Officers & Supervisory Provident Fund 5 L&T Kansbahal Staff & Workmen Provident Fund 6 L&T Construction Equipment Employees Provident Fund Trust 7 L&T Valves Employees Provident Fund Gratuity Trusts: 1 Larsen & Toubro Officers & Supervisors Gratuity Fund 3 L&T Technology Services Limited Employee Group Gratuity Scheme 5 Nabha Power Limited Employees' Group Gratuity Assurance Scheme 7 Mindtree Limited Employees Gratuity Fund Trust settlement offered for tax purposes in the year of transfer/ Net gain/(loss) on derivative transactions to be 194.34 (d) Major components of deferred tax liabilities and deferred tax assets: NOTE [51] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements Integrated Annual Report 2021-22 571 7609.79 7238.39 Total 2597.66 2170.90 Other items giving rise to temporary differences (c) 2991.19 3467.76 Arising out of upward revaluation of tax base of assets (on account of indexation benefit) (b) As at 31-3-2021 2020.94 1599.73 Towards provision for diminution in value of investments (a) 572 No. Particulars crore 175.19 Disputed statutory liabilities paid and claimed as deduction for tax purposes but not debited to Statement of Profit and Loss 2300.68 0.21 1.35 (85.49) 2384.61 Difference between book base and tax base of property, plant & equipment, investment property and intangible assets Loss liabilities/ (assets) as at 31-3-2022 Exchange difference (other than through OCI) hedge reserve Deferred tax Debit/(credit) to Charge/(credit) to Other comprehensive income Classified as held for sale acquisition Effect due to Charge/ (credit) to Statement of Profit and Deferred tax liabilities/ (assets) as at 31-3-2021 Deferred tax liabilities: Net gain/(loss) on cost of hedging reserve Offsetting of deferred tax liabilities with deferred (2.45) 82120.04 Balance as at 31-3-2021 (ix = i to viii) ix disposal Liabilities classified as held for sale/realised on viii (111.31) (9.34) (19.56) (91.75) 22.03 27765.83 De-recognition of lease liability 9.34 14131.33 (345.00) (13786.33) Other changes (transfer within categories) vi 469.29 1350.88 (614.32) vii 22.03 22719.39 Additions to lease liability 104.28 (4.50) 17.46 444.69 (8820.38) 134629.08 406.10 111.83 (195.51) 1617.72 332.86 (211.69) (5873.78) (0.58) (1743.18) 16271.11 (16271.11) Other changes (transfer within categories) xiv 2739.13 51.19 (79.19) 1007.20 Interest accrued (net of interest paid) xiii 40.71 Effect of changes in foreign exchange rates xii (5278.53) Changes from financing cash flows xi (267.27) Interest accrued (net of interest paid) V (166.29) Total lease liability Current Non- current lease liability borrowings (Note 27) Current maturities of long term Current borrowings (Note 26) Non-current borrowings (Note 22) Particulars Sr. No. crore Disclosure with regard to changes in liabilities arising from financing activities as required by Ind AS 7 "Statement of Cash Flows": NOTE [50] Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO Statements Statutory Financial Reports Integrated Discussion and Analysis Report Management Corporate Overview L&T MBDA Missile Systems Limited i (815.17) Balance as at 31-3-2020 35021.02 0.62 (6.19) (31.87) (166.70) 37.85 Effect of changes in foreign exchange rates iv 355.79 (9114.10) (193.36) (188.28) (16385.72) (6151.20) 13804.46 Changes from financing cash flows 202.79 153.00 Additions to lease liability ii 424.95 143173.67 1741.60 23654.77 82331.33 (101.57) 101.57 XV Profit from discontinued operations Profit from continuing operations (including exceptional items) Income tax expense attributable to: (1.56) 348.65 6425.64 4239.38 Income tax expense/(income) [(i)+(ii)] (295.48) 0.06 Effect of previously unrecognised tax losses and tax offsets on which deferred tax benefit is recognised 350.21 (295.54) Tax expense on origination and reversal of temporary differences (ii) Deferred tax: 117.77 6076.99 4534.86 14.36 (164.99) 6124.21 4552.46 (31.96) Effect of previously unrecognised tax losses and tax offsets used during the current year Tax expense of earlier years Current income tax expense 4239.38 (i) Current income tax: 3873.06 4239.38 71.85 (2.45) 71.85 On gain/(loss) on cash flow hedges other than mark to market (A) Current tax expense/(income): (ii) Items to be reclassified to profit or loss in subsequent periods: 0.16 0.49 0.16 0.49 On re-measurement of defined benefit plans (B) Deferred tax expense/(income): 13.53 25.04 13.53 25.04 On re-measurement of defined benefit plans (A) Current tax expense/(income): (i) Items not to be reclassified to profit or loss in subsequent periods: (b) Other comprehensive income section: 6425.64 2552.58 (B) Deferred tax expense/(income): (a) Profit and Loss section: 2020-21 36258.60 2020-21 2021-22 24654.13 (35806.44) Repayment of non-current borrowings b Proceeds from non-current borrowings a Particulars Sr. No. crore Amounts reported in Statement of Cash Flows under financing activities: 406.54 125508.08 (34.42) (12.95) (21.47) 1633.31 31372.96 30476.96 61618.31 Balance as at 31-3-2022 (xvi = ix to xv) xvi De-recognition of lease liability (38839.86) Consolidated Statement of Profit and Loss: C 2739.13 2021-22 crore Particulars Sr. No. 570 (a) Major components of tax expense/(income): Disclosure pursuant to Ind AS 12 "Income Taxes": NOTE [51] Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements Integrated Annual Report 2021-22 569 (9114.10) (8820.38) Total changes from financing cash flows (e = a to d) e (381.64) (407.20) Repayment of lease liability d (6151.20) Proceeds from/(repayment of) other borrowings (net) 3825.02 22 21 23.62 23.52 22.31 22.67 12.20 5.58 costs" III. Amount included as part of "finance 0.87 0.76 operating expenses" "Manufacturing, construction and Amount included as part of II. 169.56 229.00 4.03 13.20 21.34 22.70 180.30 IV. 209.22 Amount included as part of "Other (50.44) 389.39 172.67 229.00 32.90 18.40 32.04 8.25 3.11 0.45 3.54 146.32 107.48 165.12 97.24 Actual return on plan assets Total (I+II+III+IV+V) discontinued operations" Amount included in "profit from V. 5.25 (18.32) (12.06) (37.12) (50.59) comprehensive income" 597.72 Amount included in "Employee benefits expense" Trust-managed provident fund plan 2021-22 2020-21 Total (1 to 11) (0.32) Amount capitalised out of the above 11 0.29 (0.55) Translation adjustments 10 ------ (0.59) Re-measurement - Effect of the limit in para 64(b) 9 0.19 Adjustment for earlier years 8 194.87 (36.84) books Actuarial gain/(loss) not recognised in 7 5.25 165.12 I. 146.32 (0.02) 32.04 2020-21 2021-22 2021-22 2020-21 2020-21 2021-22 Pension plan Post-retirement medical benefit plan Particulars Gratuity plan crore 574 NOTE [52] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements Integrated Annual Report 2021-22 573 172.67 229.00 32.90 18.40 | | | 8.25 (18.32) 10.22 (iii) The changes in the present value of defined benefit obligation representing reconciliation of opening and closing balances thereof are as follows: Gratuity plan (13.74) (223.37) (145.29) Add: Past Service Cost sale/divestment Less: Unfunded liablity classified as held for Less: Benefits paid [1] (0.75) (1.61) (23.58) (9.33) (31.41) 35.81 iii) Experience adjustments 6.00 (16.71) 9.07 (32.23) 38.95 (50.25) (0.23) (11.98) 2.44 (24.79) (1.04) 1428.28 defined benefit obligation Closing balance of the present value of (0.03) 0.38 (6.72) 6.28 Add/(less): Translation adjustments 4.68 (0.17) Add: Adjustment for earlier years 1.62 Add: Business combination/acquisition 79.50 147.94 (5.22) 0.25 employees Add: Liabilities assumed on transfer of 10.22 (0.28) (24.07) (769.57) (579.02) crore 4.44 (1.69) 377.95 2.98 21.81 22.70 183.77 209.67 Add: Current service cost 340.27 360.06 1285.39 1302.51 Opening balance of the present value of defined benefit obligation 2021-22 2020-21 2020-21 2021-22 2021-22 2020-21 2020-21 2021-22 Trust-managed provident fund plan Pension plan Post-retirement medical benefit plan Particulars 369.12 (5.08) 5238.92 4.03 i) Demographic assumptions from changes in - Add/(less): Actuarial losses/(gains) arising Transfer-in/(out) 483.25 576.95 ii) Employee Employer i) Add: Contribution by plan participants 402.85 426.23 23.62 23.52 22.31 22.67 67.41 69.37 Add: Interest cost 172.67 [3] 229.00 [3] 4675.02 1302.51 Past service cost (12.06) Defined contribution plans: Amount of 876.60 crore (previous year: 804.43 crore) has been incurred. Out of above, 876.60 crore (previous year: 790.91 crore) is included in "employee benefits expense" [Note 37] and Nil (previous year: 7.24 crore) pertains to discontinued operations in the Statement of Profit and Loss and Nil (previous year: 6.28 crore) has been capitalised. Disclosure pursuant to Ind AS 19 "Employee Benefits" [Note 1(II)(p)]: NOTE [52] Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO Statements Statutory Financial Reports Integrated Discussion and Analysis Report Management Corporate Overview (1800.77) (2.05) (0.23) 16.20 (4.25) 3.38 (295.48) (1518.34) Net deferred tax liability/(assets) (2840.10) (2697.00) (b) Defined benefit plans: Net deferred tax (assets) (i) The amounts recognised in Balance Sheet are as follows: Gratuity plan 0.39 Add: Amount not recognised as an asset [limit in para 64(b)] 5849.85 5238.92 6301.93 5727.47 377.95 371.56 360.06 354.57 377.95 371.56 360.06 354.57 5849.85 5238.92 1191.84 1092.08 236.44 210.43 1428.28 1302.51 1090.95 1026.31 Less: Fair value of plan assets - Wholly unfunded A) Present value of defined benefit obligation -Wholly funded As at As at 31-3-2022 31-3-2021 Trust-managed provident fund plan Pension plan Post-retirement medical benefit plan As at As at As at As at As at As at 31-3-2022 31-3-2021 31-3-2022 31-3-2021 31-3-2022 31-3-2021 Particulars crore 1.06 2785.69 liabilities (1214.24) (1.32) (1217.80) Unabsorbed depreciation (353.88) (57.43) (296.45) Unpaid statutory liabilities (2478.67) 0.02 44.76 (2523.45) and contract assets Provision for doubtful debts, loans & advances Deferred tax (assets): 1039.33 1178.66 Net deferred tax liabilities (2785.69) (2856.41) tax (assets) Carried forward tax losses 2856.41 (461.64) (454.15) Offsetting of deferred tax (assets) with deferred tax (5625.79) (0.73) (29.25) 1.23 3.38 (47.01) (5553.41) Deferred tax (assets) (939.10) (0.73) (29.27) 1.23 3.38 (76.62) (837.08) Other items giving rise to temporary differences (185.76) 31.23 (216.99) Unutilised MAT credit 7.49 6 6.13 Amount to be recognised as liability or (asset) 4.03 2020-21 2021-22 2020-21 2021-22 2.98 23.52 22.31 22.67 67.41 69.37 Interest cost 2 21.81 22.70 183.77 2021-22 2020-21 2020-21 provident fund plan Trust-managed Pension plan medical benefit plan Gratuity plan 2021-22 209.67 229.00 [3] Current service cost 172.67 [3] 426.23 3.05 (37.12) (16.13) (gains) - Others Re-measurement - Actuarial losses/ 5 (194.87) 36.84 (53.12) (34.31) on plan assets and interest income (gains) Difference between actual return - Re-measurement - Actuarial losses/ 4 (402.85) (426.23) (54.36) (62.93) Interest income on plan assets 3 402.85 23.62 7.14 1 Post-retirement (0.52) (0.21) Assets 51.62 65.91 377.95 371.56 360.06 354.57 277.78 337.93 Liabilities B) Amounts reflected in the Balance Sheet (481.41) (445.95) 377.95 371.56 360.06 354.57 277.26 337.72 Net liability/(asset) Particulars 337.72 354.57 crore The amounts recognised in Statement of Profit and Loss are as follows: 348.86 345.63 338.42 333.93 Net liability/(asset) - Non-current 51.62 65.91 29.09 25.93 21.64 20.64 277.26 337.72 Net liability/(asset) - Current 51.62 65.91 377.95 371.56 360.06 277.26 L&T Special Steels and Heavy Forgings Private Limited 23 Raykal Aluminium Company Private Limited 354.57 371.56 6.82% As at 31-3-2021 As at 31-3-2022 6.97 14.92 8.01 7.52 14.50 6.66 As at 31-3-2021 As at 31-3-2022 (D) Attrition rate for various age groups: Pension plan (b) (a) Gratuity plan (C) Salary growth rate: Annual increase in healthcare costs (see note below) (B) Post-retirement medical benefit plan (b) Pension plan (c) (a) Gratuity plan (A) Discount rate: 6.30% Plans 6.82% 6.82% NOTE [52] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO Statements Statutory Financial Reports Integrated Discussion and Analysis Report Management Corporate Overview (G) The obligation of the Group under the post-retirement medical benefit plan is limited to the overall ceiling limits. At present, healthcare cost, as indicated in the principal actuarial assumption given above, has been assumed to increase at 5% p.a. (F) The interest payment obligation of trust-managed provident fund is expected to be adequately covered by the interest income on long term investments of the fund. Any shortfall in the interest income over the interest obligation is recognised in the Statement of Profit and Loss as actuarial losses. The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. (c) For post-retirement medical benefit plan, the attrition rate varies from 1% to 40% (previous year: 1% to 23%). (E) (a) For gratuity plan, the attrition rate varies from 1% to 40% (previous year: 1% to 31%). (b) For pension plan, the attrition rate varies from 0% to 2% (previous year: 0% to 2%). 9.00% 9.00% 6.06% 6.20% 5.00% 5.00% 6.30% 6.30% (H) A one percentage point change in actuarial assumptions would have the following effects on defined benefit obligation: (vii) Principal actuarial assumptions at the Balance Sheet date (expressed as weighted average): Post-retirement medical benefit plan Fixed deposits Special deposit scheme 5.98 5.98 42.43 30.19 12.24 18.33 17.61 0.72 0.73 0.01 0.72 Mutual funds - Others Mutual funds - Debt 283.04 158.04 125.00 326.79 240.75 86.04 Others 3. Pension plan Closing balance of the plan assets 233.25 2. Gratuity 1. Plans (vi) The average duration (in number of years) of the defined benefit obligation at the end of the reporting period is as follows: 5727.47 548.63 5178.84 6301.93 42.97 18.82 24.15 27.68 26.66 562.44 1.02 5739.49 2.68 2.68 1.87 1.87 271.56 271.56 233.25 709.73 Effect of 1% increase Gratuity Name of joint venture entities with whom transactions were carried out during the year: Joint Venture Entities: L&T Camp Facilities LLC 4 2 Magtorq Engineering Solutions Private Limited 3 Larsen & Toubro Qatar & HBK Contracting Co. WLL 1 Magtorq Private Limited (i) Name of associate entities with whom transactions were carried out during the year: Associate Entities: Disclosure of related parties/related party transactions pursuant to Ind AS 24 "Related Party Disclosures": (a) List of related parties: NOTE [54] (iii) Tax credit for Research & Development in foreign jurisdiction(s) 5.10 5.67 48.80 13.85 311.27 89.65 2020-21 2021-22 crore Benefits towards employee benefits expenses for COVID-19 pandemic (ii) 578 Export incentives, duty drawback and other schemes 1 3 Ahmedabad - Maliya Tollway Limited L&T Sapura Offshore Private Limited 20 19 L&T Sapura Shipping Private Limited 18 L&T Howden Private Limited 17 L&T-Sargent & Lundy Limited 16 L&T MHI Power Turbine Generators Private Limited L&TMHI Power Boilers Private Limited L&T-Chiyoda Limited 14 13 L&T Transportation Infrastructure Limited 15 L&T Sambalpur-Rourkela Tollway limited 12 10 L&T Samakhiali Gandhidham Tollway Limited 8 Vadodara Bharuch Tollway Limited 6 Panipat Elevated Corridor Limited 4 L&T Halol-Shamlaji Tollway Limited [1] 2 L&T Interstate Road Corridor Limited 11 Kudgi Transmission Limited 9 L&T Deccan Tollways Limited 7 L&T Rajkot-Vadinar Tollway Limited 5 L&T Chennai-Tada Tollway Limited L&T Infrastructure Development Projects Limited Particulars (i) Disclosure pursuant to Ind AS 20 "Accounting for Government Grants and Disclosure of Government Assistance": During the year, the Group has recognised the following Government Grants as income/reduction from underlying expenses: (48.28) (46.48) 27.96 27.04 90.02 (83.36) 93.34 (79.91) As at 31-3-2021 crore As at 31-3-2022 Effect of 1% decrease As at 31-3-2021 89.01 (79.22) (82.42) 92.70 As at 31-3-2022 Company pension plan Impact of change in discount rate Impact of change in health care cost Post-retirement medical benefit plan Impact of change in salary growth rate Impact of change in discount rate (22.18) 58.96 Particulars (22.84) 61.81 (26.45) NOTE [53] Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements Integrated Annual Report 2021-22 577 (ix) The Group will assess the impact of Code on Wages, 2019 and the Code on Social Security, 2020 and give effect in the financial statements when the date of implementation of these codes and the Rules/Schemes thereunder are notified. All the above defined benefit plans expose the Group to general actuarial risks such as interest rate risk and market (investment) risk. The interest payment obligation of trust-managed provident fund is expected to be adequately covered by the interest income on long term investments of the fund. Any shortfall in the interest income over the interest obligation is recognised in the Statement of Profit and Loss as actuarial loss. Any loss/gain arising out of the investment risk and actuarial risk associated with the plan is also recognised as expense or income in the period in which such loss/gain occurs. The Parent Company and a few subsidiaries manage provident fund plan through a provident fund trust for its employees which is permitted under The Employees' Provident Funds and Miscellaneous Provisions Act, 1952. The plan mandates contribution by employer at a fixed percentage of employee's salary. Employees also contribute to the plan at a fixed percentage of their salary as a minimum contribution and additional sums at their discretion. The plan guarantees interest at the rate notified by the provident fund authority. The contribution by employer and employee together with interest are payable at the time of separation from service or retirement whichever is earlier. The benefit under this plan vests immediately on rendering of service. (D) Trust-managed provident fund plan: In addition to contribution to State-managed pension plan (EPS scheme), the Group operates a post retirement pension scheme, which is discretionary in nature for certain cadres of employees. The quantum of pension depends on the cadre of the employee at the time of retirement. The plan is unfunded. Employees do not contribute to the plan. (C) Pension plan: The post-retirement medical benefit plan provides for reimbursement of health care costs to certain categories of employees post their retirement. The reimbursement is subject to an overall ceiling sanctioned based on cadre of the employee at the time of retirement. The plan is unfunded. Employees do not contribute to the plan. (B) Post-retirement medical plan: The defined benefit plans for gratuity of the Parent Company and material domestic subsidiary companies are administered by separate gratuity funds that are legally separate from the Parent Company and the material domestic subsidiary companies. The trustees nominated by the Group are responsible for the administration of the plans. There are no minimum funding requirements of these plans. The funding of these plans is based on gratuity fund's actuarial measurement framework set out in the funding policies of the plan. These actuarial measurements are similar compared to the assumptions set out in (vii) supra. An insignificant portion of the gratuity plan of the Group attributable to subsidiary companies is administered by the respective subsidiary companies and is funded through insurer managed funds. A part of the gratuity plan is unfunded and managed within the Group. Further, the unfunded portion also includes amounts payable in respect of the Group's foreign operations which result in gratuity payable to employees engaged as per the local laws of country of operation. Employees do not contribute to any of these plans. The Parent Company operates gratuity plan through a trust whereby every employee is entitled to the benefit equivalent to fifteen days salary last drawn for each completed year of service. The same is payable to vested employees at retirement, death while in employment or on termination of employment. The benefit vests after five years of continuous service. The Company's scheme is more favourable as compared to the obligation under The Payment of Gratuity Act, 1972. (A) Gratuity plan: (viii) Characteristics of defined benefit plans and associated risks: 32.39 30.37 (28.08) Impact of change in discount rate 360.06 709.73 648.19 crore The fair value of major categories of plan assets are as follows: (v) [3] Employer's contribution to provident fund. The Group expects to fund 122.46 crore (previous year: 74.74 crore) towards its gratuity plan and 196.05 crore (previous year: 180.66 crore) towards its trust-managed provident fund plan during the year 2022-23. The Trust formed by the Parent Company and a few subsidiaries manage the investments of provident funds and gratuity fund. Interest income on plan assets is determined by multiplying the fair value of the plan assets by the discount rate stated in (vii) below both determined at the start of the annual reporting period. Basis used to determine interest income on plan assets: [2] Notes: The fair value of the plan assets under the trust managed provident fund plan has been determined at amounts based on their value at the time of redemption, assuming a constant rate of return to maturity. 5727.47 6301.93 1026.31 1090.95 Closing balance of the plan assets 4.54 Add: Adjustment for earlier years (579.02) (769.57) (154.99) (106.80) Less: Benefits paid Gratuity plan 134.49 Particulars As at 31-3-2022 Unquoted Debt instruments - Central government bonds 264.00 0.31 263.69 215.05 215.05 Debt instruments - Corporate bonds 19.98 19.98 26.35 26.35 Equity instruments 50.84 50.84 6.28 6.28 Cash and cash equivalents Total As at 31-3-2021 Unquoted Quoted Total Quoted 173.34 147.58 0.07 2020-21 2021-22 2020-21 2021-22 Trust-managed provident fund plan Particulars Gratuity plan crore (iv) Changes in the fair value of plan assets representing reconciliation of the opening and closing balances thereof are as follows: NOTE [52] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO Statements Statutory Financial Reports Integrated Discussion and Analysis Report Management Corporate Overview [1] Excluding amount pertaining to discontinued operations. 5238.92 5849.85 377.95 Opening balance of the fair value of the plan assets (0.84) 1026.31 5727.47 Add: Assets assumed on transfer of employees 437.87 590.76 Add: Contribution by plan participants 171.45 216.30 223.62 74.13 Add: Contribution by the employer 194.87 (36.84) 53.12 34.31 return on plan assets and interest income Add/(less): Actuarial gains/(losses) - Difference between actual 402.85 426.23 54.36 62.93 Add: Interest income on plan assets [2] 4960.42 851.04 648.19 173.34 191.62 Cash and cash equivalents Equity instruments Total As at 31-3-2021 Unquoted Quoted Total Unquoted Quoted As at 31-3-2022 Particulars Trust-managed provident fund plan crore 576 NOTE [52] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements Integrated Annual Report 2021-22 575 1026.31 391.31 (71.42) (76.02) 29.71 4.60 635.00 29.71 50.17 Debt instruments - Public sector unit bonds Mutual funds - Equity 1313.54 1313.54 1740.15 1740.15 Debt instruments - State government bonds 1264.76 1264.76 1112.23 1112.23 Debt instruments - Central government bonds 1664.48 23.77 1640.71 1901.76 1901.76 Debt instruments - Corporate bonds 100.23 100.23 237.14 237.14 50.17 191.62 10.38 1090.95 613.02 1.69 1.90 1.90 Mutual funds - Debt 46.62 23.41 23.21 69.92 45.83 24.09 Mutual funds - Equity 23.54 23.54 21.40 21.40 Debt instruments - Public sector unit bonds 106.67 106.67 146.59 146.59 Debt instruments - State government bonds 3.17 6.08 477.93 4.86 Special deposit scheme Closing balance of the plan assets 4.30 Other (payables)/receivables 381.78 381.78 410.99 410.99 Insurer managed fund 3.44 3.44 3.37 3.37 Fixed deposits 1.48 1.48 1.48 1.48 2.90 2.90 3.90 3.90 Mutual funds Others ii) Financial assumptions 3.56 698.81 0.64 Joint venture: (xiii) Guarantee charges recovered from 174.38 156.83 40.50 14.85 119.39 0.47 119.39 156.83 Total L&T - MHI Power Boilers Private Limited L&T-Chiyoda Limited Joint ventures, including: 7.64 5.34 2.83 (xii) Dividend received 174.38 L&T - MHI Power Turbine Generators Private Limited 0.64 0.47 L&T Special Steels and Heavy Forgings Private Limited L&T Infrastructure Development Projects Limited 65.12 Joint ventures: (xv) Interest received from 13.64 9.10 Total 10.83 2.29 L&T - MHI Power Turbine Generators Private Limited 2.81 L&T MBDA Missile Systems Limited 13.64 9.10 Joint ventures: (xiv) Interest paid to 0.47 0.64 Total L&T-Chiyoda Limited Kudgi Transmission Limited Total 3.85 LARSEN & TOUBRO Statements Statutory Financial Reports Integrated Discussion and Analysis Report Management Corporate Overview 101.34 107.66 Notes forming part of the Consolidated Financial Statements (contd.) 25.39 11.57 10.87 31.86 41.32 101.34 107.66 0.01 0.01 23.97 NOTE [54] (contd.) crore 2021-22 0.73 0.76 L&T Special Steels and Heavy Forgings Private Limited L&T Sapura Shipping Private Limited 1.14 0.73 L&T Infrastructure Development Projects Limited 7.64 5.34 (xi) Charges recovered for deputation of employees to related parties Joint ventures: parties parties Amounts for major Amount Amounts for major Amount No. Nature of transaction/relationship/major parties Sr. 2020-21 2.94 0.32 L&T Sapura Shipping Private Limited Total Amount Amounts Amounts for major Amount No. Nature of transaction/relationship/major parties Sr. 2020-21 for major 2021-22 582 NOTE [54] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements Integrated Annual Report 2021-22 581 14.84 14.84 crore parties parties (xix) Donation given Larsen & Toubro Officers & Supervisory Staff Provident Fund 199.05 210.90 (A) Towards Employer's contribution to provident fund trusts, including: (xxi) Contribution to post employment benefit plan 7.70 7.70 7.70 Total Entity with common Key Management Personnel: Mindtree Foundation (xx) Provision towards unspent CSR expenses 1.65 8.90 Total 1.65 8.90 1.65 8.90 Entity with common Key Management Personnel: Mindtree Foundation 14.84 Associate: 1139.03 1139.03 0.39 (0.09) 0.31 206.79 65.30 0.19 0.18 0.19 0.02 0.18 9.76 45.93 45.52 21.44 9.84 134.52 206.60 L&T Camp Facilities LLC 4.71 (xvi) Allowance/(reversal) for expected credit loss Joint ventures, including: (0.31) Total L&T Special Steels and Heavy Forgings Private Limited Joint venture: (xviii) Provision towards constructive obligation Total L&T Special Steels and Heavy Forgings Private Limited Joint venture: (xvii) Impairment on loans & advances 0.31 (0.31) Total 0.85 Raykal Aluminium Company Private Limited 0.18 L&T Sapura Offshore Private Limited 0.11 L&T - MHI Power Turbine Generators Private Limited (1.46) L&T Special Steels and Heavy Forgings Private Limited L&T - MHI Power Boilers Private Limited 1139.03 0.08 0.08 0.06 18.18 28.63 147.76 227.63 253.06 352.83 698.19 705.70 27.60 1312.21 Total Magtorq Private Limited Associates, including: L&T - MHI Power Turbine Generators Private Limited L&T-Chiyoda Limited L&T - MHI Power Boilers Private Limited Purchase of goods & services (including commission paid) Joint ventures, including: (i) Amounts for major parties 1564.42 18.18 1593.05 1330.39 579 58.96 74.28 7.74 2.69 0.05 8.63 5.49 12.73 40.53 47.78 58.96 74.28 L&T Special Steels and Heavy Forgings Private Limited L&T - MHI Power Turbine Generators Private Limited L&T-Chiyoda Limited L&T - MHI Power Boilers Private Limited Total Joint ventures, including: Sale of goods/contract revenue & services (ii) Amount Integrated Annual Report 2021-22 Amounts for major parties Nature of transaction/relationship/major parties Appointed as Whole-time Director w.e.f. August 19, 2020 (Non-executive Director till August 18, 2020) [2] Ceased w.e.f. July 7, 2020 on account of superannuation [1] [9] Ms. Preetha Reddy (9) 14 Mr. Narayanan Kumar [3] 12 Mr. Thomas Mathew T [6] 8 6 Mr. Adil Zainulbhai Mr. M. Damodaran 4 Mr. M. M. Chitale 2 15 Mr. Pramit Jhaveri [10] 10 Ms. Naina Lal Kidwai [8] Appointed w.e.f. July 11, 2020 [4] Ceased w.e.f. March 29, 2022 on account of completion of term No. Sr. 2020-21 2021-22 crore (b) Disclosure of related party transactions: 1 Mindtree Foundation (v) Entity with common Key Managerial Personnel with whom transactions were carried out during the year: Ceased w.e.f. February 28, 2021 on account of completion of term Appointed w.e.f. April 1, 2022 [10] Appointed w.e.f. March 1, 2021 [9] [8] Ceased w.e.f. May 29, 2020 on account of completion of term [7] Ceased w.e.f. April 2, 2020 on account of completion of term [6] Ceased w.e.f. May 3, 2021 on account of withdrawal of nomination by Life Insurance Corporation of India [5] Amount Notes forming part of the Consolidated Financial Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [54] (contd.) (x) Rent received, overheads recovered and miscellaneous income Total Magtorq Private Limited L&T Special Steels and Heavy Forgings Private Limited L&T - MHI Power Turbine Generators Private Limited Associate: L&T - MHI Power Boilers Private Limited Joint ventures, including: Rent paid, including lease rentals under leasing arrangements L&T-Chiyoda Limited Joint ventures, including: L&T-Sargent & Lundy Limited Joint ventures, including: (ix) (viii) Charges paid for miscellaneous services L&T MBDA Missile Systems Limited Total Joint venture: (vii) Net inter-corporate borrowing taken/(repaid) 151.59 Total L&T - MHI Power Boilers Private Limited L&T-Sargent & Lundy Limited L&T-Chiyoda Limited 0.06 0.11 0.01 0.24 29.90 17.74 25.17 12.06 3.61 4.45 29.90 17.74 32.00 100.75 32.00 100.75 32.00 100.75 Total 148.03 148.03 Total 151.59 26.38 26.38 L&T Infrastructure Development Projects Limited L&T-Sargent & Lundy Limited 0.05 (iii) Purchase/lease of property, plant and equipment Joint ventures: parties parties for major Amount Amounts Amounts for major Amount No. Nature of transaction/relationship/major parties Sr. 2020-21 2021-22 crore 580 Total 199.44 0.05 26.38 151.59 L&T Special Steels and Heavy Forgings Private Limited L&T Sapura Shipping Private Limited 148.03 (vi) Net inter-corporate deposits given/(repaid) Joint ventures: 2.11 Total 2.02 L&T - MHI Power Turbine Generators Private Limited 2.11 Joint ventures, including: Investments as other equity/equity (v) Total 0.61 0.61 0.61 Mr. Shailendra Roy Key management personnel: (iv) Sale of property, plant and equipment 0.05 186.25 Total 210.90 Provision towards constructive obligation (vi) 1144.11 1145.08 Total 1139.03 1139.03 L&T Special Steels and Heavy Forgings Private Limited Joint venture: 1144.11 Joint ventures, including: * Before set-off of losses under equity accounting and impairment (v) Impairment/provision of loans & advances recoverable 2182.75 2328.85 Total 14.44 5.00 10.61 4.23 Magtorq Private Limited 1145.08 14.84 14.84 L&T Special Steels and Heavy Forgings Private Limited Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements Integrated Annual Report 2021-22 583 90.91 193.74 90.91 193.74 90.91 193.74 Total L&T MBDA Missile Systems Limited Joint ventures: (vii) Unsecured loans taken 14.84 14.84 Total 14.84 14.84 L&T Camp Facilities LLC NOTE [54] (contd.) 19.44 Associates: 1787.30 1785.05 Total 8.79 5.75 7.09 0.60 L&T Camp Facilities LLC Magtorq Private Limited (iii) Investment in debt securities [including preference shares (debt portion)] 14.54 Associates, including: 177.35 63.19 L&T Infrastructure Development Projects Limited 576.54 796.53 L&T - MHI Power Turbine Generators Private Limited 863.49 7.94 Joint ventures: 911.98 1097.54 1746.17 162.61 1781.18 328.43 L&T Special Steels and Heavy Forgings Private Limited* L&T Sapura Shipping Private Limited 2163.31 2314.01 Joint ventures, including: Loans & advances recoverable (iv) # Secured * Before set-off of losses under equity accounting 1097.54 911.98 Total 611.72 Kudgi Transmission Limited# 272.65 213.17 213.17 L&T Special Steels and Heavy Forgings Private Limited* L&T Infrastructure Development Projects Limited 14.84 584 crore As at 31-3-2022 (xi) Post employment benefit plans 7.70 Total 7.70 7.70 Entity with common Key Management Personnel: Mindtree Foundation Provision towards unspent CSR expenses (x) (A) Total 93.81 2.43 8.40 2.29 8.56 5.31 11.70 2.91 41.04 Due to provident fund trusts, including: 78.10 56.45 48.81 Total 7.60 20.71 11.11 10.04 L&T Technology Services Limited Employee Group Gratuity Scheme Mindtree Limited Employees Gratuity Fund Trust 15.47 Larsen & Toubro Officers & Supervisors Gratuity Fund 19.77 48.81 Due to gratuity trusts, including: (B) 56.45 78.10 Total 52.92 74.44 Larsen & Toubro Officers & Supervisory Staff Provident Fund 7.23 2.66 7.05 2.40 20.46 17.34 Total 20.46 17.34 L&T - MHI Power Boilers Private Limited 20.46 17.34 Joint venture: (viii) Advances from customers Amounts for major parties parties Amount Amounts for major Amount No. Category of balance/relationship/major parties Sr. As at 31-3-2021 (ix) 757.16 Due to directors [a]. 41.04 7.62 0.92 5.49 13.98 Mr. T. Madhava Das Mr. S. V. Desai Mr. Subramanian Sarma Mr. J. D. Patil Mr. M. V. Satish Mr. D. K. Sen Mr. Shailendra Roy Mr. R. Shankar Raman 8.40 21.40 Mr. S. N. Subrahmanyan 3.60 3.35 Mr. A. M. Naik Key Management Personnel, including: 93.81 Mr. Hemant Bhargava L&T - MHI Power Boilers Private Limited 1777.11 17.36 3.65 13.71 w.e.f. August 19, 2020) (d) Mr. Subramanian Sarma (Executive Director 22.67 10.20 [2] 7.64 [1] 4.48 4.83 9.48 1.98 7.50 20.42 4.30 16.12 (b) Mr. R. Shankar Raman 14.23 (c) Mr. Shailendra Roy 1.02 8.39 131 13.89 4.23 10.93 2.29 8.64 (g) Mr. J. D. Patil 5.32 1.08 4.24 11.05 2.30 8.75 (f) Mr. M. V. Satish 4.94 1.01 3.93 11.73 2.46 9.27 (e) Mr. D. K. Sen 2.97 1.09 11.26 6.53 7.51 Larsen & Toubro Limited Senior Officers' Superannuation Scheme 6.81 7.51 (C) Towards Employer's contribution to superannuation trust: 188.49 27.98 Total 6.81 56.12 12.67 14.27 L&T Technology Services Limited Employee Group Gratuity Scheme Mindtree Limited Employees Gratuity Fund Trust 86.47 188.49 27.98 Towards Employer's contribution to gratuity fund trusts, including: Larsen & Toubro Officers & Supervisors Gratuity Fund (B) 199.05 18.06 Total 7.51 6.81 24.46 (a) Mr. S. N. Subrahmanyan Executive Directors: payment Total Share based Other long term benefit Post employment benefits benefits benefits Short term employee Total Post employment Short term employee benefits Key Management Personnel 2020-21 2021-22 crore "Major parties" denote entities accounting for 10% or more of the aggregate for that category of transaction during respective year. (xix) Compensation to Key Management Personnel (KMP): 30.99 5.32 (h) Mr. S. V. Desai (i) Mr. T. Madhava Das Amounts for major parties Amount Amounts for major parties Amount No. Category of balance/relationship/major parties Sr. As at 31-3-2021 (i) As at 31-3-2022 (c) Amount due to/from related parties (including commitments): NOTE [54] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO Statements Statutory Financial Reports Discussion and Analysis Report Integrated crore Accounts receivable Joint ventures, including: 92.55 Joint ventures, including: Accounts payable including other payable (ii) 135.77 92.76 Total 0.20 0.21 Larsen & Toubro Qatar & HBK Contracting Co. WLL 0.20 0.21 Associate: 50.00 1.18 75.49 57.76 13.39 L&T - MHI Power Turbine Generators Private Limited L&T Deccan Tollways Limited L&T - MHI Power Boilers Private Limited 135.57 Management Corporate Overview [5] Represents end of service benefit as per applicable local laws till August 18, 2020 141 Represents pension 12.14 3.00 [4] 9.14 3.66 0.72 2.94 12.27 2.55 9.72 3.47 0.64 2.83 12.51 2.60 9.91 Director till August 18, 2020) (b) Mr. Subramanian Sarma (Non-executive (a) Mr. A. M. Naik (Group Chairman) Non-executive/Independent Directors: 9.18 1772.76 3.00 [4] 3.10 131 Represents fair value of employee stock options granted during 2020-21 to be vested over a period of time 121 Represents encashment of past service accumulated leave [1] Post retirement benefits include gratuity * 6.60 crore 105.38 8.39 10.20 22.41 64.38 145.06 29.68 115.38 Total 5.86 5.86 5.66 5.66 (c) Other Non-executive/Independent Directors 4.36 1.26 [5] 12.18 13 6.81 11 1,40,41,46,937 Basic EPS from continuing operations (*) A/D 61.71 23.82 Basic EPS from discontinued operations (*) B/D 58.67 Basic EPS from continuing operations & discontinued operations (*) C/D 61.71 82.49 Diluted EPS Profit after tax from continuing operations (crore) A 8669.33 Profit after tax from discontinued operations (crore) 11582.93 8669.33 1,40,47,47,700 D Weighted average number of equity shares outstanding 2. 3. The amount of outstanding balances as shown above are unsecured and will be settled/recovered in cash. The interest rate charged on loans given to related parties are as per market rates. NOTE [55] Basic and Diluted Earnings per share [EPS] computed in accordance with Ind AS 33 "Earnings per Share" Particulars 2021-22 2020-21 B Basic EPS A 8669.33 3345.01 Profit after tax from discontinued operations (crore) B 8237.92 Profit after tax from continuing operations & discontinued operations (crore) C=A+B Profit after tax from continuing operations (crore) Profit after tax from continuing operations & discontinued operations ( crore) Weighted average number of equity shares outstanding C=A+B D 2 585 Integrated Annual Report 2021-22 Notes forming part of the Consolidated Financial Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [56] Disclosure pursuant to Ind AS 37 "Provisions, Contingent Liabilities and Contingent Assets": (a) 2 Movement in provisions: Class of provisions Sr. No. Particulars Product warranties Expected tax liability in respect of indirect Litigation- related obligations Contractual rectification crore All the related party contracts/arrangements have been entered into on arm's length basis. Face value per share (*) 61.65 8669.33 1,40,47,47,700 3345.01 8237.92 11582.93 1,40,41,46,937 Add: Weighted average number of potential equity shares on account of employee stock options E Weighted average number of equity shares outstanding for diluted EPS F=D+E 15,40,580 1,40,62,88,280 82.41 14,20,264 1,40,55,67,201 A/F 61.65 23.80 Diluted EPS from discontinued operations (*) B/F 58.61 Diluted EPS from continuing operations & discontinued operations (*) C/F Diluted EPS from continuing operations (*) Note: 1. "Major parties" denote entities accounting for 10% or more of the aggregate for that category of balance during respective year. 363.85 820.89 305.67 101.92 1643.73 387.72 327.86 Associates, including: 52.26 35.45 Magtorq Private Limited 51.54 L&T-Chiyoda Limited 35.08 1477.18 2586.47 [a] includes commission due to other Non-executive directors 4.52 crore (previous year: 4.63 crore) Corporate Overview Management Integrated Discussion and Analysis Report Statutory Financial Reports Statements Total LARSEN & TOUBRO L&T - MHI Power Turbine Generators Private Limited 2551.02 12.89 4.48 12.89 4.48 (xii) Capital commitment given Joint ventures: 0.11 L&T-Sargent & Lundy Limited L&T - MHI Power Boilers Private Limited 0.08 0.02 0.01 | | | Total 0.11 (xiii) Revenue commitment given Joint ventures, including: 1424.92 L&T Special Steels and Heavy Forgings Private Limited L&T - MHI Power Turbine Generators Private Limited cost- Notes forming part of the Consolidated Financial Statements (contd.) crore Joint ventures, including: Total (xvi) Guarantees given on behalf of Joint ventures, including: 22.02 23.30 L&T - MHI Power Boilers Private Limited 21.82 (xv) Provision for expected credit loss 23.28 23.30 L&T - MHI Power Turbine Generators Private Limited Total 300.23 363.85 255.12 312.67 300.23 22.02 NOTE [54] (contd.) 187.73 Total As at 31-3-2022 As at 31-3-2021 Sr. Category of balance/relationship/major parties No. Amount Amounts for major parties Amount 125.16 Amounts for major parties Joint ventures, including: 125.16 187.73 L&T - MHI Power Boilers Private Limited L&T MBDA Missile Systems Limited 107.24 158.78 17.53 20.00 (xiv) Revenue commitment received Larsen & Toubro Limited Senior Officers' Superannuation Scheme Total Others construction (b) Intangible assets being expenditure on new product development NOTE 58 Other intangible assets Disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": Market risk management (a) Foreign exchange rate and interest rate risk: 0.49 9.39 0.01 The Group regularly reviews its foreign currency and interest rate related exposures - both hedged and open exposures. The Group primarily follows cash flow hedge accounting for Highly Probable Forecasted Exposures (HPFE), hence, the movement in mark to market (MTM) of the hedge contracts undertaken for such exposures is likely to be offset by contra movements in the underlying exposures values. However, till the point of time that the HPFE becomes an on-balance sheet exposure, the changes in MTM of the hedge contracts will impact the Balance Sheet of the Group. Further, given the effective horizons of the Group's risk management activities which coincide with the duration of the projects under execution, which could extend across 3-4 years and given the business uncertainties associated with the timing and estimation of the project exposures, the recognition of the gains and losses related to these instruments may not always coincide with the timing of gains and losses related to the underlying economic exposures and, therefore, may affect the Group's financial condition and operating results. The Group monitors the potential risk arising out of the market factors like exchange rates, interest rates, price of traded investment products etc. on a regular basis. For on-balance sheet exposures, the Group monitors the risks on net unhedged exposures. (i) Foreign exchange rate risk: The Group has both receivable and payable exposure in foreign currency. Accordingly, changes in exchange rates, may adversely affect the Group's revenue, cost and profitability. There is a risk that the Group may also have to adjust the pricing due to competitive pressures when there have been significant volatility in foreign currency exchange rates. The Group may enter into foreign currency forward and option contracts with financial institutions to protect against foreign exchange risks associated with certain existing assets and liabilities, certain firmly committed transactions, forecasted future cash flows and net investments in foreign subsidiaries. In addition, the Group has entered, and may enter in the future, into non- designated foreign currency contracts to partially offset the foreign currency exchange gains and losses on its foreign-denominated debt issuances. The Group's practice is to hedge a portion of its material net foreign exchange exposures with tenors in line with the project/business life cycle. The Group may also choose not to hedge certain foreign exchange exposures. 587 Integrated Annual Report 2021-22 Notes forming part of the Consolidated Financial Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [58] (contd.) (a) Tangible assets 32.29 2020-21 2021-22 Sr. Particulars No. Mr. Sanjeev Aga (ii) Capital Expenditure on: crore 2021-22 The net exposure to foreign currency risk (based on notional amount) in respect of recognised financial assets, recognised financial liabilities and derivatives for major currencies is as follows: 2020-21 197.16 3.74 1.24 0.13 9.80 0.52 8.10 crore 186.05 crore As at 31-3-2022 As at 31-3-2021 13.46 473.12 696.42 29116.78 (4244.49) 37.78 1031.00 404.79 3294.27 32.10 (23.99) 38.45 2337.79 164.57 (14.43) 21.02 38860.98 (2817.23) To provide a meaningful assessment of the foreign currency risk associated with the Group's foreign currency derivative positions against off-balance sheet exposures and unhedged portion of on-balance sheet financial assets and liabilities, the Group uses a multi-currency correlated value-at-risk ("VAR") model. The VAR model uses a Monte Carlo simulation to generate thousands of random market price paths for foreign currencies against Indian Rupee taking into account the correlations between them. The VAR is the expected loss in value of the exposures due to overnight movement in spot exchange rates, at 95% confidence interval. The VAR model is not intended to represent actual losses but is used as a risk estimation tool. The model assumes normal market conditions and is a historical best fit model. Because the Group uses foreign currency instruments for hedging purposes, the loss in fair value incurred on those instruments are generally offset by increase in the fair value of the underlying exposures for on-balance sheet exposures. The overnight VAR for the Group at 95% confidence level is 201.00 crore as at March 31, 2022 and 203.08 crore as at March 31, 2021. The Group's exposure to changes in interest rates relates primarily to the Group's outstanding floating rate debt and lending. The Group's outstanding debt in local currency is a combination of fixed rate and floating rate. For the portion of local currency debt on fixed rate basis, there is no interest rate risk. For the portion of local currency debt on floating rate basis, there is a natural hedge with receivables in respect of financial services business. There is a portion of debt that is linked to international interest rate benchmarks like LIBOR. The Group also hedges a portion of these risks by way of derivative instruments like interest rate swaps and currency swaps. The Group has insignificant portion of the loan book which has a flowing rate linked to one month USD LIBOR. With the transition of LIBOR into another benchmark (SOFR), there will be a spread adjustment that will have to be applied to these loans. The loans are expected to be either refinanced and linked to a new benchmark or simply transitioned to the new benchmark before LIBOR ceases to be published. The Group's Treasury team constantly tracks the developments related to this proposed transition and has also had interactions with the counterparty lenders to prepare for the transition. In the cases mentioned above, the lenders and the Group are likely to agree on a neutral spread adjustment which does not impact the counterparties financially. The exposure of the Group's borrowing to interest rate changes is 25848.75 crore (previous year: 48077.49 crore). € 588 Actual future gains and losses associated with the Group's investment portfolio and derivative positions may differ materially from the sensitivity analysis performed as at March 31, 2022 due to the inherent limitations associated with predicting the timing and amount of changes in foreign currency exchange rates and the Group's actual exposures and position. Interest rate risk: Of the above, expenditure on research and development activities of discontinued operations is as follows: 357.96 65.82 232.84 (505.18) (52.56) Particulars US Dollar including pegged currencies EURO Algerian Canadian Japanese Dinar Dollar Yen Kuwaiti Dinar US Dollar including pegged currencies EURO 332.11 (56.08) Algerian Canadian Japanese Kuwaiti Dinar Dollar Yen Dinar Derivatives including embedded derivatives for hedging receivable/(payable) exposure with respect to non-financial assets/(non-financial liabilities) Derivatives including embedded derivatives for hedging receivable/(payable) exposures with respect to firm commitments and highly probable forecast transactions Receivable/(payable) exposures with respect to forward contracts and embedded derivatives not designated as cash flow hedge (1100.21) 747.08 (358.10) 573.06 (184.60) 109.56 (1207.93) 400.90 (97.62) Net exposure to foreign currency risk in respect of recognised financial assets/(recognised financial liabilities) Other intangible assets (c) (b) Intangible assets being expenditure on new product development (49.42) (63.80) 4 Unused provision reversed during the year (4.79) (4.75) (0.08) (168.15) (11.74) (8.34) 5 Translation adjustments 6 Balance as at 31-3-2022 (1 to 5) 27.82 358.73 578.71 0.42 753.83 (186.11) 0.42 (2.64) 3 taxes contracts 1 Balance as at 1-4-2021 13.19 338.80 471.79 536.29 Provision used during the year 72.43 2 Additional provision during the year 22.06 36.42 107.00 434.69 19.51 619.68 1432.50 Total 83.60 Breakup of provisions: Corporate Overview Management Integrated Discussion and Analysis Report Statutory Financial Reports Statements LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) 586 NOTE [57] The expenditure on research and development activities is as follows: Sr. Particulars No. (i) Recognised as expense in the Statement of Profit and Loss (ii) Capital expenditure on: (a) Tangible assets Research & Development 1802.69 (c) Disclosure in respect of contingent liabilities is given in Note 32. (iv) Contractual rectification cost represents the estimated cost the Group is likely to incur during defect liability period as per the contract obligations and in respect of completed construction contracts accounted under Ind AS 115 "Revenue from contracts with customers". Particulars Balance as at 1-4-2021 Balance as at 31-3-2022 Note 24 68.38 118.24 Note 31 1364.12 1684.45 (v) Other provisions mainly includes provision for onerous contracts. crore 1432.50 1802.69 (b) Nature of provisions: (i) Product warranties: The Group gives warranties on certain products and services, undertaking to repair or replace the items that fail to perform satisfactorily during the warranty period. Provision made as at March 31, 2022 represents the amount of the expected cost of meeting such obligations of rectification/ replacement. The timing of the outflows is expected to be within a period of three years from the date of Balance Sheet. Expected tax liability in respect of indirect taxes represents mainly the differential sales tax liability on account of non-collection of declaration forms and liability for goods and service tax, customs duty and excise duty. (iii) Provision for litigation-related obligations represents liabilities that are expected to materialise in respect of matters in appeal. Total 4.48 Recognised as expense in the Statement of Profit and Loss Due to superannuation fund: 9 Mr. Ajay Shankar [7] 7 Ms. Sunita Sharma [5] 5 Mr. Vikram Singh Mehta 3 Mr. Subodh Bhargava [4] Mr. A. M. Naik (Group Chairman) 1 (B) Non-executive/Independent Directors: 9 Mr. T. Madhava Das (Whole-time Director) [3] 7 Mr. J. D. Patil (Whole-time Director) Mr. S. V. Desai (Whole-time Director) [3] 8 6 Mr. M. V. Satish (Whole-time Director) Mr. D. K. Sen (Whole-time Director) 5 Mr. Subramanian Sarma (Whole-time Director) [2] 4 3 Mr. Shailendra Roy (Whole-time Director) [1] Mr. R. Shankar Raman (Whole-time Director & Chief Financial Officer) 2 Mr. S. N. Subrahmanyan (Chief Executive Officer & Managing Director) 1 (A) Executive Directors: (iv) Name of Key Management Personnel (of the Parent Company) and their relatives with whom transactions were carried out during the year: NOTE [54] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO Statements Statutory Financial Reports Integrated Discussion and Analysis Report 12.89 Management Corporate Overview (C) 19.77 • execution of large-scale, technologically complex EPC projects 56 Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial Reports LARSEN & TOUBRO Statements Cracker Furnace Package for HPCL-Mittal Energy Limited (HMEL) at Bathinda over several decades and collaborating with well-organised R&D centres and renowned institutions, the ADVENT vertical delivers comprehensive customer-centric solutions for the entire value chain of the Hydrocarbon industry. ADVENT's technical capabilities and agility enable it to offer associated tailored value engineering solutions such as product modular solutions, supporting customers in re-purposing study of existing assets and adoption to energy transition. ADVENT's offerings to clients encompass full spectrum engineering, technology co-development & commercialisation, strategic projects delivery through EPC & other contracting models, integrated modular solutions as well as emerging technology-driven solutions. ADVENT also focusses on technology backed chemical industries which are now ramping up the investment in the chemical sector, reducing dependence on imports. These chemicals are the building blocks of high-value industrial end products. Asset Management The Asset Management business is a newly formed vertical with a view to diversify revenue streams and deliver highly integrated, digitally-enabled value-added services to the oil & gas industry. These comprehensive asset management solutions extend the organisation's design, engineering, construction, and commissioning capabilities to cover operations, maintenance, performance enhancement and health assessment of critical assets. Asset Management complements EPC project offerings for mutually beneficial engagement with clients over the entire lifecycle of assets. Business Environment The FY 2021-22 began with a significant thrust across the developed world for energy transition from the Fossil Fuels to Renewables. However, energy transition to limit global warming to well below 2 degree Celsius as agreed in the 2015 Paris Climate Agreement, has been slower than anticipated due to the evolving nature of the technologies, their associated high costs as well as the geo-political risks. With this backdrop, the oil & gas fraternity engaged with EPC players for cleaner technologies in the conventional areas. With normalcy returning post the COVID-19 pandemic leading to a surge in demand resulting in hardening of oil prices, traction was seen in the GCC region with Saudi Arabia leading the way. Therefore, at least in the near future significant investments are likely in oil & gas projects. However, the business witnessed disruptive pricing by new entrants in the domestic market, particularly onshore, which caused loss of some market share. The business expects the situation to normalise soon. In the domestic offshore market, business has retained its strong foothold. The business has been able to withstand the challenges and recorded its highest ever Order Inflow in FY 2021-22 with the Order Book remaining healthy. The Business has successfully completed multiple large projects and outperformed most of its peers in terms of profitability despite inflationary pressures in commodities. Major Achievements Orders won: • Mega contract from Saudi Aramco for a Gas Compression Plant for Jafurah Basin Development Programme and laying Leveraging the expertise in high-end engineering and Advanced Value Engineering & Technology Services (ADVENT) The business is equipped to supply products like windfarm foundations and other modules for offshore windfarm projects and e-houses. All-weather waterfront facilities provide easy access to clients across the globe and have load- out jetties suitable for dispatch of large and heavy modules via ocean-going vessels and barges. The Piping shop and the proposed Pressure Vessel Manufacturing shop in KSA will mainly cater to the local market and for developing local skills to support the IKTVA programme. Statements New Water Injection South - R Project for ONGC | HYDROCARBON BUSINESS Overview The Hydrocarbon business provides integrated D&B turnkey solutions for the hydrocarbon industry, globally. The business executes projects for oil & gas extraction and processing, petroleum refining, chemicals & petrochemicals, fertilisers, cross-country pipelines & terminals, and has recently launched asset management as well as services for offshore wind. The business has integrated capabilities across the value chain, supported by in-house front-end design and detailed engineering, R&D, project management, procurement, modular fabrication facilities, Onshore construction, Offshore installation, and commissioning. Major fabrication facilities are in India and the Middle East. In India, the engineering, procurement & project management centres are at Mumbai, Vadodara & Chennai. Modular fabrication facilities are at Hazira (near Surat) and Kattupalli (near Chennai). Overseas presence is dominantly in the Middle East, i.e., in the UAE, KSA & Kuwait and in Algeria. The project management office with a training facility is in Al Khobar, KSA. The business has a state-of-the-art modular fabrication facility at Sohar in Oman, Piping shop at Jubail in KSA and an upcoming Heavy Wall Pressure Vessel Manufacturing shop at Jubail Industrial Zone in KSA. Pursuant to the Scheme of Amalgamation, approved by National Company Law Tribunal (NCLT) on January 28, 2022, L&T Hydrocarbon Engineering Limited (LTHE) has become a division of L&T with effect from April 1, 2021. This amalgamation will enable the Hydrocarbon business to leverage the superior pre-qualification and financial capability of L&T for securing large bids. The synergies from amalgamation will further improve operational efficiencies and organisational capabilities to sustain the growth momentum, while continuing to maintain operational autonomy. The business caters to clients across the hydrocarbon value- chain through following business verticals: The increase in prospects across the value chain of the business has transformed the industry from a niche segment to a highly commoditised market leading to entry of several competitors. Further, to aid participation of local agencies in Government contracts, a sharp dilution in prequalification criteria has been carried out for all new tenders, leading to increased competition. The business has been able to thrive and grow amidst stiff competition by leveraging advanced technologies, digitalisation and is on course to transform itself into a technology-led EPC player. Lumpsum Turnkey EPCIC solutions are offered to the global offshore oil & gas industry. The products encompass wellhead platforms, process platforms, process modules, subsea pipelines and systems, brownfield developments, offshore drilling rigs (upgrade and new builds), FPSO modules, deep-water subsea manifold & structures, living- quarters platforms, transportation & installation services, and decommissioning projects. 57 Leveraging its Offshore expertise, the business is carving out a part of the team to focus on the emerging business opportunities in Offshore Wind Farms, which will address renewable energy requirements and balance the portfolio. The offshore vertical has comprehensive in-house engineering capabilities offering customised 'Fit for Purpose' engineering solutions, covering the complete project life cycle, from concept to commissioning, for offshore projects. As a vertically integrated EPCIC player, it also has in-house fabrication and offshore installation capability. Marine assets comprise a self-propelled heavy-lift-cum-pipe-lay vessel – LTS 3000 - held in a joint venture, and a wholly-owned pipe-lay barge - LTB 300. Integrated Annual Report 2021-22 H5BH 647 One of the Three Gas PDMs installed in Hasbah Field, Saudi Arabia Onshore Two Oil PDMs and Associated Facilities in Zuluf Field, Saudi Arabia This business vertical provides EPCC solutions for a wide range of onshore hydrocarbon projects covering oil & gas processing, petroleum refining, petrochemicals, fertilisers (ammonia & urea complexes), thermal systems such as cracking furnaces, cryogenic storage tanks and LNG regasification terminals, cross-country pipelines & terminals as well as coal/pet-coke gasification, coal-to-chemicals, and crude-to-chemicals projects. The business has a track record of concurrent execution of multiple mega projects successfully both in domestic and international markets, with diverse technology process licensors. Design engineering centers for the Onshore vertical offer the complete spectrum of FEED, process, and detailed engineering. Construction Services This business vertical renders turnkey construction services for refineries, petrochemical, fertiliser projects, gas-gathering stations, cross-country oil & gas pipelines and terminals including LNG & oil storage tanks and underground cavern storage systems for LPG. Its major capabilities include heavy- lift equipment erection competency, application of advanced welding technologies with high levels of automation, management of manpower and material in large volumes at construction sites and Quality / HSE systems conforming to international practices. The business has also invested in strategic construction equipment viz., a range of pipeline- spread equipment, automatic welding machines and other plant and machinery for mechanical construction works. Modular Fabrication This vertical specialises in modular fabrication and supply of offshore & onshore structures and process modules, including free-standing static equipment for oil & gas fields, refineries, petrochemical plants, and fertiliser plants. Leveraging its modular capability, much of the on-site work for mega projects such as Onshore Process Modules (PAU) & Pre- assembled Piperacks (PAR) for a Residue upgradation Facility (RUF) in India, a Gasification plant in Singapore, a Hydrogen Plant in Netherlands, and a Refinery in Thailand are being executed at its fabrication yards. World-class modular fabrication facilities are strategically located at Hazira (India's West coast), Kattupalli (India's East coast), Sohar (Oman) and Jubail (KSA). The combined annual capacity for fabrication is estimated at about 60 million manhours or about 200,000 MT (depending on the product mix). 55 Integrated Annual Report 2021-22 • Onshore Process & Piperack Modules being loaded-out from MFF Hazira for a Refinery in Thailand Business Environment Industrial Area Sewage Treatment Works, Doha, Qatar Integrated Annual Report 2021-22 49 The Water International business vertical lays its focus on the international markets and continues to tap business opportunities in the regions of Middle East, East Africa, and SAARC region countries. The Irrigation, Industrial & Infrastructure business vertical constitutes Mega & Micro Irrigation, Industrial Water Systems & Effluent Treatment, Desalination and Smart Water Infrastructure, catering to the needs of agriculture and industries. The Water & Wastewater business vertical comprises of Rural Water Supply, Urban Water Supply, Water Management and Wastewater Treatment encompassing the entire spectrum of water and wastewater solutions. L&T's Water & Effluent Treatment business is organised into 3 verticals - (i) Water & Wastewater; (ii) Irrigation, Industrial & Infrastructure; (iii) Water International. L&T's Water & Effluent Treatment business develops water infrastructure offerings which serve to store, move, and treat water, thus delivering substantial social and economic benefits. The business has established itself as an industry leader by executing, commissioning, and operating mega water projects in the areas of drinking water supply, wastewater treatment, industrial water treatment, irrigation and development of smart water infrastructure across the length and breadth of the country. The business has successfully forayed into Middle East, East Africa and SAARC region countries. Overview WATER & EFFLUENT TREATMENT The Financial year 2021-22 was the second consecutive year that the nation had to bear the brunt of the COVID-19 pandemic, with Governments being forced to divert funds towards mitigating the healthcare emergency and consequently leading to deferment of prospects in irrigation and wastewater sectors. However, rural drinking water continued to receive support under the 'Har Ghar Nal Se Jal' Yojana in certain states. The scaling up of the Digital Solutions business, given its early successes proving its potential and prowess, provides another avenue for growth and profitability. The business is well poised to garner opportunities arising out of the Net Zero renewables race and provide a green technology path to clean energy transition in India and abroad, all this while enabling the customers and prosumers with the highest standards of reliability, availability and efficiency of power transmission and distribution networks. As the multilateral funding from institutions like JICA, Millennium Challenge Corporation are now gathering momentum and as the renewable energy projects are given a thrust, several opportunities including interconnector projects are now on the anvil in Africa. Countries such as Algeria, Mozambique, Tanzania, and Uganda also offer substantial potential. additional customs duty coming into effect from April 2022 on import of solar cells and modules. With India's ambitious target of generating 500 GW of renewable energy by 2030, prospects in renewable evacuation corridors look better. In KSA and Oman, GW scale plants characterised by substantial BESS and Grid components continue to provide huge opportunities, given the Net Zero commitments and Green Hydrogen prospects. Chattarpur Water Supply Project Haliba, Containerised Substation LARSEN & TOUBRO Statutory Financial Reports Statements Report Discussion and Analysis Integrated Management Corporate Overview The establishment of an Indonesian subsidiary of the business is expected to open up sizeable opportunities locally. The T&D network expansion plans of Thailand, Malaysia, and Philippines in addition to Floating Solar, BESS and SVC related opportunities have resulted in several prospects which are under various stages of bidding. The entry into Georgia with a 500 kV Transmission Line order should help build credentials and experience for further opportunities in the Transcaucasia region. LARSEN & TOUBRO The global spotlight on ESG led to an upsurge in technology intensive process-oriented orders with some of the established PSUs leading the way by transforming their process toward water neutrality. 58 · • • • 343 km gas transport pipelines between Jafurah Gas Plant and Juaymah Tank Farm • Mega contract for new facilities and integration with existing facilities and significant contracts for expansion of a marine terminal and replacement of electrical as well as refurbishment of PDMs from a prestigious client in Middle East Large contract for Pipeline Replacement Project (PRP-VII) from Oil & Natural Gas Corporation (ONGC) for installation of 350 km subsea pipelines and related offshore works spread across India's west coast Significant contract from Indian Oil Corporation Limited for Diesel Hydrotreating Project for its Panipat refinery Significant contract from Petronet LNG for 2 x 170,000 m3 LNG tanks for Phase IIIB of the Dahej Expansion Project, Gujarat Significant contracts for laying of Mumbai-Nagpur Gas Pipeline (24" x 224 km) including construction of terminals along with associated facilities from GAIL and construction of Steam Methane Reformer, Air Separation Plant and Pressure Swing Adsorption Units for Jubail Industrial Gas Network Project from Air Products Middle East Industrial Gases • Supply of PAU, PAR and Reformer modules for a Hydrogen plant in Rotterdam, the Netherlands The water infrastructure market in the Middle East is on an upward trajectory, aided by a rebound in the prices of crude oil. The water sector in the African subcontinent is seeing increasing thrust from multilateral agencies focused on social sector lending in areas of drinking water supply and wastewater treatment. Consequently, both these regions witnessed a surge in prospects during the last quarter of FY 2021-22. Projects completed: Development of Cluster 8 Marginal Field in Mumbai High for ONGC • 28 Offshore Jackets for Saudi Aramco in Zuluf, Marjan, Safaniya and Rubiyan Oil fields • Cracker Furnace Package for HPCL-Mittal Energy Limited (HMEL) • New 48" Crude Transit Line (TL-5) for Kuwait Oil Company (KOC) • SRT - III Ethylene Cracking Furnace at Panipat Refinery for Indian Oil Corporation Limited (IOCL) • Supply of several onshore modules, skids and static equipment for various refineries and petrochemical plants in India and Algeria Significant Initiatives The business has placed a significant reliance on processes and on operational excellence, covering productivity improvement and Advanced Work Packs based Project Management, data driven decision making, Smart SCM, value engineering, besides robust QHSE processes. In May 2021, when cyclone 'Tauktae' impacted the Arabian sea, all manpower along with marine assets were safely demobilised from the Mumbai High. Further, towards the journey in digital transformation, the business has rolled-out multiple initiatives, viz., drone-based progress monitoring and survey, product quality surveillance, augmented reality based remote inspection, robotic welding systems for fabrication, electrostatic painting application for waste minimization and resources monitoring and scaffolding management system. As part of Lakshya 2026, the business has identified various strategic initiatives to boost cost competitiveness and achieve growth aspirations. Strategic actions include building partnerships, developing markets for adjacencies in business offerings, nurturing new businesses like asset management, offshore windfarms . Orders won: Statutory Financial Reports Discussion and Analysis • Material Schedule Tracker (MST) is a predictive analytics tool that provides information on cycle time associated with the procurement of a wide variety of materials. MST, adopted across projects, aims to influence procurement decisions and minimise delays associated with procurement of major supplies • In order to mitigate the impact of steep volatility in prices of commodities due to pent up demand and geopolitical tension, the business is entering into pre-tender pricing agreements with reputed vendors and increasingly focusing on the Just In Time Model for material procurement based on the availability of work fronts • With the focus on accelerating innovation and maintaining technology leadership, the business has embarked upon the construction of a Water Technology Centre (WTC) at Kancheepuram. The WTC is committed to continuous R&D to innovate scalable solutions enabling the business to meet present and future water needs, to build safe, resilient and sustainable eco-systems globally • The business is also working with several renowned start- ups in the area of efficient and remote operation of plants with a potential to provide a significant cost advantage. These initiatives will go a long way in the transformation of the business into a technology driven EPC player Outlook The prospects for development of water infrastructure continue to remain bright. As per NITI Aayog Report 2019, India is in the midst of a water crisis with 600 million people facing extreme water stress. The Government is doing its bit to tackle water scarcity through a variety of schemes. The Jal Jeevan Mission with its ambitious target of providing tapped drinking water to 193 million households by 2024 is expected to provide opportunities for mega prospects in the arena of drinking water supply. With general elections scheduled for 2024 and several state elections around the corner, the Government is working on mission mode to monitor the progress and hence prospects in this sector look very encouraging. Urbanisation, population growth, and climate related water inequity will ensure good opportunities in the water and wastewater infrastructure area in the foreseeable future. Implementation of river interlinking projects announced in the Union Budget 2022 will add another dimension to the business prospects. Investment into irrigation infrastructure is expected to revive soon. With 51% of agricultural area being rain fed and with an overall irrigation efficiency of only 38%, a wide array of prospects are visible in macro and micro irrigation with the Government being focused on 'More Crop per Drop' through its 'Pradhan Mantri Krishi Sinchayee Yojana'. The emergence of ESG investing has enhanced the focus on sustainable corporate actions. As a result, the visibility of prospects has increased in the areas of specialised and process oriented industrial effluent solutions. On the international front, the rise in crude prices is driving more investments in the Middle East and enough prospects • In order to track the movement of workforce engaged in remote working areas, a mobile application LMNOP Raksha has been developed. The application sends timely alerts to the related supervisor pertaining to work happening in risk prone areas leading to better EHS performance 51 Stacker-Reclaimer are available in water and wastewater businesses. Priority funding from multilateral agencies for social infrastructure projects are opening new markets for the business in East Africa. The business is carefully reviewing each of the prospects in the international space and perusing projects in countries with a stable Government and sound economic linkages to mitigate any associated risks. MINERALS & METALS Overview L&T's Minerals & Metals (M&M) business offers complete EPC solutions for the Mining, Minerals & Metals sectors across the globe. The business undertakes end-to-end engineering, procurement, manufacturing, supply, construction, erection, and commissioning of the projects, covering the complete spectrum from mineral processing to finished metals. The business also offers comprehensive product solutions like an array of customised Mineral Crushing Equipment and Plants for varied applications such as surface miners, sand manufacturing plants, material handling and high-speed railway equipment, other custom-made critical equipment and complex assemblies catering to core industrial sectors including Mining, Steel, Ports, Fertilisers, Cement and Chemical Plants, etc. The complete range of our product solutions are backed by 5 decades of experience & knowledge, in-house design resources, state-of-the-art manufacturing capabilities and providing after sales product support, value-added and cost-effective services to ensure higher uptime. The manufacturing centres are in Kansbahal, Odisha and Kancheepuram, Tamil Nadu. Business Environment Domestic Business With the revival of economic activity post the disruption caused by COVID-19, the demand for steel has increased and a strong recovery in steel production was evident during FY 2021-22. During the latter half of the year, all non-ferrous metal prices have steadied near their peaks, while steel prices continue to rise unabated. Consequently, metal industry cash flow has been robust, resulting in a substantial reduction in their debt levels. Integrated Annual Report 2021-22 As part of the business strategy to become future-proof and build on the foundation of an agile culture, the following initiatives were undertaken during the financial year: Significant Initiatives Moga Water Supply Scheme Project, Punjab . Piped water supply schemes to various districts in Uttar Pradesh Rengali Right Bank underground pipeline project Odisha Sewerage works in K&C Valley, Karnataka • Zero Liquid Discharge and Demineralization works for IOCL Refineries at Baroda and Barauni • Integrated Infrastructure Development Works for Silvassa Smart City • Dubai Water Transmission Project • Water Supply Schemes in various towns of Tanzania Major projects commissioned: 6+ million people benefitted with the commissioning of 20 projects during FY 2021-22. • Industrial Area Sewage Treatment Works, Qatar • 318 MLD Sewage Treatment Plant at Coronation Pillar, Delhi • CDS Drinking Water Supply Schemes, Rajasthan . Bansujara Micro Irrigation Scheme, Madhya Pradesh • Kanpur Water Carriage System, Uttar Pradesh The business celebrated the UN Designated 'World Water Day' on March 22, 2022 for the 13th consecutive year with numerous events designed to inculcate the need for water conservation among employees and other stakeholders. The mega awareness campaign conducted by the employees covering 20,000+ students was declared a record by the India Book of Records for being the 'Largest Water Conservation Campaign for students across the nation on a single day'. 50 Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial LARSEN & TOUBRO Reports Statements All the major steel and non-ferrous metal producers are augmenting their current capacity by way of expansion and acquisitions, including setting up greenfield projects. Integrated Report International Business The Kingdom of Saudi Arabia has been a frontrunner in developing a non-oil economy - led by the mineral sector. Incidentally, the mineral sector has been earmarked to become the third pillar of the industrial thrust area with the establishment of a Mining Fund to provide sustainable finance for the sector. KSM304C KSM-304C Surface Miner • Booked orders for 19 Sand Plants from various quarry owners and construction companies across the country Major projects commissioned: • Coke Oven Battery, JSW Steel Dolvi • Blast Furnace, JSW Steel Dolvi • Coke Dry Quenching Project, JSW Steel Dolvi • First stream Commissioned for Steel Melt Shop, JSW Steel Dolvi • New Hot Strip Mill, SAIL, Rourkela Major Achievements • Stacker Reclaimer at JSW Paradip LIKEN STOUARE Other key achievements: • Successfully designed, manufactured, commissioned and load tested the 1100 MT Straddle Carrier & Transporter Girder and three of the Straddle Carrier Machines, which are in successful operation at High-Speed Rail Project Sites at Gujarat • A total of 8 Surface Miners (including 2 in international geographies), 11 Sand Plants, 3 Largest Capacity Skid- mounted Coal crushing plants, apart from multiple limestone crushing plants commissioned this year Significant Initiatives • Implemented Design Automation, Al enabled engineering, and Data Analytics Solution for continuous improvement on various processes in its domain area • Implemented the specialised software under iMPACT initiative to monitor progress from BOM to Erection in Piping & Structural with QR code-based progress monitoring and materials tracing and tracking Outlook Market sentiments continue to remain positive with strong demand, bullish commodity price forecasts in near terms and metal producers recording unprecedented margins which will provide solid impetus towards new capex cycle. This has strengthened the sentiments of investors and, will lead to a robust investment environment in the industry. Similarly, the economic scenario in Gulf countries is following a fresh capex cycle to industrialization, facilitating their strategic shift away from oil & gas. 54 Corporate Overview Management With its superior manufacturing capabilities and prowess in design to deliver equipment, the Product BU had the following major commissioning highlights this year: Integrated Annual Report 2021-22 53 • Maintained 100% market share in Cement sector and securing a total of 17 order wins in limestone crushing plants 52 Corporate Overview Management Discussion and Analysis Integrated Statutory Report Reports Financial LARSEN & TOUBRO Statements Kakrapar Atomic Power Plant 3 Steel, Aluminium, Copper, Gold, Phosphate and their allied industries are likely to present new EPC opportunities, especially in the KSA, UAE and West Africa. The downstream metal industry is becoming an attractive investment destination in UAE and KSA due to low power tariffs and flexible policies which is included in their Vision 2030 to be net exporter of value-added products. The first E&P Project of the business in Egypt is expected to help set a foothold in Africa. Product Business The Product Business is the domestic leader for many of its products and is actively pursuing international markets currently, more particularly in Indonesia, Australia and select countries in Africa for their product range. The core products (such as crushers, surface miners, sand plants, material handling equipment) growth is primarily driven by movement in following industrial sectors: Cement Sector: Major cement producers continued to embark on their expansion plans during FY 2021-22 showing strong revival in the sector. L&T's Crushing Systems & Material Handling Equipment continued to be the preferred choice for Indian cement players. Riding on the current momentum in the economy, business witnessed large order inflows from the Cement Sector in the current year and continues to see a strong order pipeline in the next year. It is estimated that the Indian cement industry is likely to add ~80 million tonnes (MT) capacity by FY 2023-24, riding on the growth in housing and infrastructure projects. Mining & Steel Sector: Continued augmentation of capacities in coal and iron ore to cater to the growing demand for steel has increased the business potential for its equipment range covering Surface Miners and Skid-mounted Coal Crushers, Stacker Reclaimers, Plough Feeders, etc. The thrust on increasing domestic coal production is expected to continue and reach 1000+ million tonnes by FY 2025-26. The current year also witnessed an increased Order Inflow for apron feeders, stacker reclaimers, coal crushing equipment from the above sectors and the momentum is expected to continue in the coming years with promising growth plans of the mining and steel players. Construction Sector: Growth in infrastructure projects, backed by a revival in economic activities, drives demand for sand plants as well as newly launched, new generation, high- capacity aggregate crushing solutions (jaw crushers, cone crushers and vertical shaft impactors). Major Achievements Orders won: With increased demand and growth in domestic industrial sectors, the business has received the following prestigious orders: • Steel Melt Shop at Tata Steel Kalinganagar • Coke Oven Battery at Tata Steel Kalinganagar • Dry Circuit System at NMDC Ltd. Kirandul • 2 MTPA Pellet Plant at NMDC Ltd. Nagarnar The Mineral and Metals sector is one of the thrust areas identified by most of the Middle East countries, as a strategic diversification beyond oil. GCC countries continue to invest in their mineral sectors with strategic long-term initiatives to exploit the untapped mineral deposits. • 1.5 MTPA to 2 MTPA Expansion of Alumina refinery at UAIL Rayagada Offshore 597 394.77 Impairment recognised in Profit or Loss 30.52 30.52 comprehensive income Gains/(losses) recognised in Other (668.93) (252.39) (348.08) (74.06) (0.48) 6.08 Gains/(losses) recognised in Profit or Loss (3.43) (3.43) Balance as at 31-3-2022 605.74 121.67 591.09 63.23 31-3-2022 and 31-3-2021: 1. Net realisation per month 31.83 per sq. ft. 69.31 Equity shares 596 474.78 Book value 536.43 crore Transferred to held for sale Sensitivity Fair value as at 31-3-2022 31-3-2021 Particulars Sensitivity disclosure for level 3 fair value measurements: (h) 394.77 28990.61 4918.33 22753.78 Significant unobservable inputs 2. Capitalisation rate 11.50% (8220.99) (7091.37) (127.57) 29269.25 2605.09 1913.27 5645.42 (214.55) (5799.93) 24877.64 3721.30 (5562.49) (158.79) (9.29) (125.61) 0.55 (5.24) Gains/(losses) recognised in Profit or Loss (13.60) Disposal during the year 10.85 Addition during the year Total Other investments shares instruments 1153.39 (416.66) Impairment recognised in Profit or Loss (151.28) (151.28) (627.35) (1.20) Disposal during the year 8911.87 1495.55 7315.57 35.67 (501.07) 65.08 28546.80 4176.24 22877.66 867.21 87.68 538.01 Balance as at 31-3-2021 Addition during the year 45.52 10.85 Book value Preference shares 379.50 212.84 (43.30) 15.56 18.70 150.24 4.32 (40.81) (49.95) 18.48 218.20 Contingent consideration crore Note: Balance as at 31-3-2022 $ 1.16 592.34 US Dollar/EURO $1.18 US Dollar/Indian Rupees 962.41 82.68 46.90 EURO/US Dollar 1213.94 $1.18 to Foreign exchange difference 661.17 81.76 90.50 962.41 $ 1.08 to 582.92 510.12 $1.27 915.51 1052.91 552.77 1093.04 Settled during the year Charge recognised in Statement of Profit and Loss Addition during the year Increase/(decrease) in the fair value by 5% would result in impact on profit or loss by 3.80 crore (previous year: 3.82 crore) Increase/(decrease) of 5% in the book value would result in impact on profit or loss by 2.28 crore (previous year: 0.54 crore) Increase/(decrease) of 25 bps in capitalisation rate would result in impact on profit or loss by 0.45 crore (previous year: 0.45 crore) Increase/(decrease) of 1% in net realisation would result in impact on profit or loss by 0.21 crore (previous year: 0.21 crore) Increase/(decrease) of 5% in the book value would result in impact on profit or loss by 21.87 crore (previous year: 19.57 crore) 4176.24 Net Assets Value (NAV) 4918.33 Increase/(decrease) in fair value by 0.25% would result in impact on profit or loss by 1.22 crore (previous year: 1.76 crore) Other Investments 22877.66 Expected yield 22753.78 867.21 Expected yield 591.09 Debt instruments 76.83 Expected yield 76.15 Loans 89.88 Increase/(decrease) in fair value by 0.25% would result in impact on profit or loss by 42.57 crore (previous year: 42.80 crore) Management Balance as at 31-3-2021 Foreign exchange difference Settled during the year Charge recognised in Statement of Profit and Loss Addition during the year Balance as at 31-3-2020 Particulars Corporate Overview Movement of financial liabilities measured using unobservable inputs (Level 3): NOTE [59] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO Statements Statutory Financial Reports Discussion and Analysis Report Integrated (i) (a) Receivable hedges: 543.25 Debt 4176.24 4177.18 22877.66 22877.66 22753.78 22753.78 16 (viii) Loans (Financial Services) 0.94 6494.48 1576.15 4918.33 6,12 (vii) Other investments 33.68 33.68 24.48 24.48 9,18 designated as cash flow hedges Financial assets at FVTOCI: (i) Debt instruments viz. government securities, bonds and debentures 6,12 6591.99 0.10 0.10 6 (iii) Equity shares 0.67 0.67 0.67 (vi) Embedded derivative instruments not 0.67 (ii) Preference shares 141.76 8749.31 2104.54 6503.01 9474.33 0.29 2882.05 6 0.10 116.07 73.22 642.70 537.91 104.79 769.03 605.64 163.39 6,12 (i) Equity shares Financial assets at FVTPL: Total Level 3 As at 31-3-2021 Level 2 Level 1 Total Level 3 (ii) Preference shares 6,12 121.00 (iii) Mutual fund 73.22 9,8 (v) Derivative instruments not designated as cash flow hedges 1739.80 725.45 1014.35 1899.90 116.07 590.80 6,12 (iv) Debt instruments viz. government securities, bonds and debentures 87.01 20174.92 87.01 121.00 12918.05 20174.92 12918.05 6,12 1309.10 0.10 (iv) Derivative financial instruments designated as cash flow hedges 9,18 508.25 670.52 143.41 527.11 Total 57.49 57.49 70.60 70.60 23,29 (ii) Embedded derivative financial instruments designated as cash flow hedges 416.22 416.22 393.21 393.21 150.24 658.49 Valuation technique and key inputs used to determine fair value: A. Equity Preference shares Balance as at 31-3-2020 Particulars crore (g) Movement of items measured using unobservable inputs (Level 3): NOTE [59] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) 23,29 Notes forming part of the Consolidated Financial Statements 595 Preference share and government securities, bonds and debentures - Future cash flows are discounted using G-sec rates as at reporting date. (b) Derivative Instruments - Present value technique using forward exchange rates as at reporting period. Level 2: (a) B. Level 1: Mutual funds, bonds, debentures and government securities - Quoted price in the active market. Integrated Annual Report 2021-22 (i) Derivative financial instruments designated as cash flow hedges (b) Designated at FVTOCI: 150.24 Financial liabilities: 3619.24 28546.80 59963.11 27797.07 6298.08 28990.61 56271.22 20982.53 Total 19.13 Financial liabilities at FVTPL: 19.13 26.40 9,18 (v) Embedded derivative financial instruments designated as cash flow hedges 1344.88 1344.88 1715.78 1715.78 26.40 Loans (a) Designated at FVTPL: Derivative instruments not designated as cash flow hedges 150.24 143.41 143.41 (iii) Others 11.73 11.73 26.86 (i) 26.86 designated as cash flow hedges (ii) Embedded derivative instruments not 22.81 22.81 36.44 36.44 23,29 23,29 Integrated Annual Report 2021-22 (*crore) (₹) 238.53 379.50 $1.18 EURO/US Dollar 264.83 $ 1.27 167.71 97.12 273.94 $1.08 106.23 48885.03 80.88 27681.16 21203.87 37310.77 $1.15 to 618.03 212.84 379.50 months months (*) (crore) (* crore) (a) Receivable hedges: US Dollar 79.03 618.03 238.53 379.50 $1.18 (b) Payable hedges: US Dollar/EURO 592.34 $ 1.16 $1.15 to rate 20391.92 16918.85 2.21 785.49 193.34 599.11 186.38 Arab Emirates Dirham 1024.89 21.26 950.49 74.40 926.09 21.26 779.75 146.34 Canadian Dollar 13.46 100.15 265.40 202.36 365.55 1330.72 91.80 829.41 501.31 1715.73 90.63 1450.44 EURO 265.29 38.98 18.28 38.98 91.85 19.40 91.85 Omani Riyal Malaysian Ringgit twelve twelve Average 120.05 2352.58 135.19 501.67 2123.87 2625.54 103611.36 111436.64 215048.00 368.94 42903.66 4871.37 94.72 575.91 2321.53 50568.33 73.27 6225.98 2120.69 2656.13 76190.54 197834.45 481.19 48246.80 6152.71 535.44 121643.91 23, 29 28 Total Lease Liability Other financial liabilities Due to others Due to micro enterprises and small enterprises 54965.72 106704.95 161670.67 71580.33 137808.10 66227.77 22,26,27 488.99 45256.24 5006.56 B. Derivative liabilities: Forward contracts 519.15 62.67 69.74 449.41 62.67 386.74 69.74 456.48 434.14 98.43 532.57 Total 41.76 Total 28.59 13.17 85.26 23,29 Embedded derivatives 405.55 23,29 490.81 twelve months months twelve (i) Outstanding currency exchange rate hedge instruments: (A) Forward covers taken to hedge exchange rate risk and accounted as cash flow hedge: 598 As at 31-3-2022 As at 31-3-2021 Nominal (k) Details of outstanding hedge instruments for which hedge accounting is followed: Average amount (* crore) rate (₹) Within After twelve twelve months months (*crore) (*crore) Within After Nominal amount (*crore) Particulars 59.84 NOTE [59] (contd.) Notes forming part of the Consolidated Financial Statements Total After Within After twelve months twelve months Note Within Notes forming part of the Consolidated Financial Statements (contd.) As at 31-3-2021 crore Trade payables: Borrowings A. Non-derivative liabilities: Particulars A 1% change in the unobservable inputs used in fair valuation of Level 3 liabilities does not have a significant impact on the value. Maturity profile of financial liabilities based on undiscounted cash flows: 143.41 As at 31-3-2022 (* crore) 13.46 57.24 1325.68 Kuwaiti Dinar Omani Riyal Swiss Franc 32.43 253.45 32.43 242.90 242.90 242.90 9.46 189.04 9.46 426.30 Chinese Yuan 0.72 1325.68 897.43 0.67 42.35 20.71 42.35 46.35 20.28 46.35 British Pound Canadian Dollar 127.11 127.11 26.41 101.30 Level 2 26.41 Japanese Yen 897.43 105.93 Arab Emirates Dirham 500.30 3.63 425.40 500.30 3.63 rate months (* crore) (₹) (*crore) After twelve months (* crore) Within After Nominal amount (*crore) Average twelve twelve rate months months amount twelve Particulars Average 0.90 355.03 80.29 185.27 169.76 85.99 11.23 79.43 12.04 60.69 85.99 58.77 3.51 (B) Options taken to hedge exchange rate risk and accounted as cash flow hedge: As at 31-3-2022 As at 31-3-2021 Within Nominal 3.51 29.59 20.69 29.59 795.36 12.94 831.62 255.45 645.10 186.52 Qatari Riyal 1739.15 21.06 1734.08 5.07 1207.41 20.72 958.10 249.31 261.19 808.30 Kuwaiti Dinar 110.40 37.78 British Pound 214.37 104.57 214.37 257.70 100.22 Australian Dollar 257.70 1502.65 0.69 1401.81 100.84 2537.18 0.73 2426.78 Japanese Yen 16.69 55.64 16.69 8.70 108.54 (b) Payable hedges: US Dollar 12538.47 EURO 5026.27 108.54 Qatari Riyals 74.88 11573.90 87.39 4916.55 20.82 149.96 964.57 109.72 14875.35 7293.72 87.63 73.39 11322.88 7013.89 3552.47 279.83 149.96 37.78 48.20 48.20 72.07 55.10 72.07 South African Rand 63.52 4.67 63.52 8.03 Danish Krone 11.94 38.91 Thai Baht 2.77 2.31 2.77 Swedish Krona 38.91 Level 1 Increase/(decrease) in the NAV by 5% would result in impact on profit or loss 183.99 crore (previous year: 156.25 crore) As at 31-3-2022 41.63 961.18 (522.81) 389.69 1091.03 1101.47 (1609.92) 1434.02 Particulars Provision as at April 1 Changes in allowance for ECL: Provision/(reversal) of allowance for ECL Additional provision (net) Written off as bad debts Translation adjustment Addition on account of business combination Provision as at March 31 (Note 13) 225.08 (22.29) 1163.97 (1743.04) 3626.52 (iv) Reconciliation of allowance for expected credit loss ("ECL") on trade receivables (other than financial services business): 926.69 Amount written off (1797.23) (1797.23) Transfers to Stage 1 22.80 (7.99) (v) Amounts written off: Transfers to Stage 2 130.61 (14.81) (12.94) Transfers to Stage 3 (34.35) (7.28) Impact of changes in credit risk on account of stage movements Increase/(decrease) provision on existing financial assets including recovery Loss allowance as at 31-3-2022 (117.67) 44.39 Particulars crore Corporate Overview Management Integrated Discussion and Analysis Report Statutory Financial Reports Statements LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [59] Other disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": (a) Category-wise classification for applicable financial assets: Sr. Particulars No. I. 590 The Group bids for and executes EPC projects on turnkey basis. EPC projects entail procurement of various equipment and materials which may have direct or indirect linkages to commodity prices like Steel (both long and flat steel), Copper, Aluminium, Zinc, Lead, Nickel, Cement etc. Accordingly, the Group is exposed to the price risk on these commodities. To mitigate the risk of commodity prices, the Group relies on contractual provisions like pass through of prices, price variation provisions, etc. and further uses hedging instruments where available [Note 59(k)(ii)]. There is certain residual risk carried by the Group that cannot be hedged against. The Group is also exposed to contingent risk on account of commodity price movements that may not be fully offset by contractual provisions in the projects that it has bid for but which are not awarded yet. Commodity prices are volatile and have witnessed sharp two-way movement during the financial year. This may impact margin on projects where the Group has submitted bids on a firm price basis. However, for projects where the Group is eligible for an adjustment based on price variation clause, the actual impact will depend on the exact project wins and the relative contractual provisions therein. (d) Commodity price risk management: 1972.77 2021-22 3405.60 2020-21 3181.21 430.06 200.08 375.05 279.07 (146.52) Amount of financial assets written off during the period but still enforceable (425.58) 0.20 3892.51 (4.24) 0.09 3405.60 crore 2021-22 2020-21 1860.23 3.09 25.76 856.54 New assets originated or purchased (c) Credit risk management: (i) Financial services business: Financial services business has a risk management framework that monitors and ensures that the business lines operate within the defined risk appetite and risk tolerance levels defined by the management. Risk management function is closely involved in management and control of credit risk, portfolio monitoring, market risks including liquidity risk and operational risks. The credit risk function independently evaluates proposals based on well-established sector specific internal frameworks, in order to identify, mitigate and allocate risks as well as to enable risk-based pricing of assets. Regulatory and process risks are identified, mitigated and managed by a separate group. Risk management policies are made under the guidance of Risk Management Committee and are approved by Board of Directors. (ii) Other than financial services business: The Group's customer profile include public sector enterprises, state owned companies and large private corporates. Accordingly, the Group's customer credit risk is low. The Group's average project execution cycle is around 24 to 36 months. General payment terms include mobilisation advance, monthly progress payments with a credit period ranging from 45 to 90 days and certain retention money to be released at the end of the project. In some cases retentions are substituted with bank/corporate guarantees. The Group has a detailed review mechanism of overdue customer receivables at various levels within organisation to ensure proper attention and focus for realisation. 589 Integrated Annual Report 2021-22 Notes forming part of the Consolidated Financial Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [58] (contd.) (iii) Reconciliation of loss allowance provision for financial services business - Loans: Particulars Loss allowance as at 1-4-2020 Stage 1 570.38 The investments in money market funds are for the purpose of liquidity management only and hence not subject to any material price risk. (6.10) 6.10 (119.74) (19.80) 19.80 (12.70) 12.70 (19.80) 19.80 (b) Liquidity risk management: The Group manages liquidity risk by maintaining sufficient cash and marketable securities and by having access to funding through an adequate committed credit lines. Given the need to fund diverse businesses, the Group maintains flexibility by needbased drawing from committed credit lines. Management regularly monitors the position of cash and cash equivalents. The maturity profiles of financial assets/liabilities including debt financing plans and liquidity ratios are considered while reviewing the liquidity position. Stage 2 268.65 The Group's investment policy and strategy are focused on preservation of capital and supporting the Group's liquidity requirements. The Group uses a combination of internal and external tools to execute its investment strategy and achieve its investment objectives. The Group typically invests in money market funds, large debt funds, Government of India securities, equity and equity marketable securities and other highly rated securities under an exposure limit framework. The investment policy focusses on minimising the potential risk of principal loss. To provide a meaningful assessment of the price risk associated with the Group's investment portfolio, the Group performed a sensitivity analysis to determine the impact of change in price of the securities on the value of the investment portfolio assuming a 0.50% movement in the fair market value of debt funds and debt securities and a 5% movement in the NAV of the equity and equity marketable securities as below: Particulars Debt funds and debt securities - increase by 0.50% in fair market value Debt funds and debt securities - decrease by 0.50% in fair market value Equity and equity marketable securities - increase by 5% in NAV Equity and equity marketable securities - decrease by 5% in NAV 102.95 (102.95) 6.31 (6.31) 119.74 crore Increase/(decrease) in investment value As at 31-3-2022 As at 31-3-2021 Stage 3 crore Total 171.41 Impact of changes in credit risk on account of stage movements (42.17) 331.10 1476.54 1765.47 Increase/(decrease) provision on existing financial assets including recovery (143.69) (66.11) 603.77 358.28 Loss allowance as at 31-3-2021 908.81 345.60 3821.72 5076.13 (179.38) Measured at Fair Value through Profit or Loss (FVTPL): (a) Mandatorily measured: (27.72) (4.40) 3785.93 4624.96 New assets originated or purchased 461.25 60.59 35.71 Amount written off Transfers to Stage 3 Transfers to Stage 1 557.55 (2230.13) 43.35 (26.24) (17.11) Transfers to Stage 2 (30.17) 34.57 (2230.13) (12.70) 12.70 crore As at 31-3-2022 6,12 0.10 0.10 0.10 0.10 11217.28 197508.49 10114.09 194518.81 591 Integrated Annual Report 2021-22 Notes forming part of the Consolidated Financial Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [59] (contd.) (b) Category-wise classification for applicable financial liabilities: Sr. No. Particulars 19.13 10113.99 11217.18 = Total (1+11+111) (i) Investment in government securities, debentures and bonds (ii) Investment in preference shares 6,12 6,12 9474.33 0.67 (iii) Derivative instruments designated as cash flow hedges (iv) Embedded derivative designated as cash flow hedges 9,18 I. 1715.78 9,18 26.40 Sub-total (c) (d) Designated: (i) Investment in equity instruments Sub-total (d) Sub-total (IIIc+d) 8749.31 0.67 1344.88 Measured at Fair Value through Other Comprehensive Income (FVTOCI): (c) Mandatorily measured: (i) crore Due to micro enterprises and small enterprises Due to others (iii) Lease liability (iv) Others Sub-total (II) III. Derivative instruments (including embedded derivatives) through Other Comprehensive Income: IV. (i) (ii) Derivative instruments designated as cash flow hedges Embedded derivatives designated as cash flow hedges Sub-total (III) Financial guarantee contracts Total (I+II+III+IV) 22,26,27 123468.23 (ii) Trade payables: Borrowings (i) Measured at amortised cost: Note As at 31-3-2022 As at 31-3-2021 Derivative instruments not designated as cash flow hedges 23,29 36.44 (ii) Embedded derivatives not designated as cash flow hedges (iii) Others Measured at Fair Value through Profit or Loss (FVTPL): 23,29 22.81 11.73 143.41 150.24 206.71 184.78 Sub-total (I) II. 26.86 III. 837.93 16753.48 850.12 134555.70 19879.53 1028.89 141237.27 Sub-total (a) (b) Designated: (i) Loans Sub-total (b) 9,18 73.22 116.07 9,18 24.48 6 4886.22 33.68 4114.88 6,12 1576.15 6,12 (ix) Other Investments (viii) Investment in commercial paper (v) Derivative instruments not designated as cash flow hedges (vi) Embedded derivatives not designated as cash flow hedges (vii) Investment in security receipts 1739.80 As at 31-3-2021 (i) Investment in equity instruments 6,12 769.03 642.70 (ii) Investment in preference shares 0.91 22300.16 6,12 (iii) Investment in mutual funds and units of fund 6,12 12949.25 87.01 20236.28 (iv) Investment in government securities, debentures and bonds 6,12 1899.90 121.00 0.94 26971.36 16 22753.78 6,12 1577.08 (v) Trade receivables 13 46138.92 800.37 42229.78 (vi) Advances recoverable in cash (iv) Other Investments 18 18 844.34 1363.54 958.08 (viii) Cash and bank balances 9,14,15 (ix) Other receivables Sub-total (II) (vii) Unbilled Revenue Note 919.14 (iii) Investment in commercial paper 22877.66 22753.78 22877.66 45053.94 49849.02 Sub-total (a+b) II. 6,12 Measured at amortised cost: 7,8,16,17 66785.59 71541.63 (ii) Investment in government securities, debentures, bonds and CBLO 6,12 2700.24 584.31 Loans (13.71) (42.41) (13.71) crore As at 31-3-2021 Carrying amount amount Fair value Carrying Note As at 31-3-2022 Particulars (d) Fair value of financial assets and financial liabilities measured at amortised cost: NOTE [59] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements Integrated Annual Report 2021-22 593 (137.51) (0.17) (11205.43) 4243.15 Fair value Financial assets: Loans 7,8,16,17 22,27 Total Borrowings Financial liabilities: 584.31 53243.86 52659.55 53243.86 4759.49 52659.55 584.31 49443.22 Total 2700.24 6,12 Government securities, debentures and bonds 46742.98 46742.98 2700.24 49443.22 67337.14 Total (III A+B+C) (8804.87) (i) Interest Income: B. 28.47 4.26 28.47 4.26 Sub-total (A) Dividend income from investments measured at FVTPL Dividend Income: A. Interest and Other income/expense: III. 1656.67 (151.26) (12.00) Financial assets measured at amortised cost 10199.48 (ii) Financial assets measured at fair value through Other Comprehensive Income (iii) Financial assets measured at fair value through Profit or Loss Sub-total (C) (76.02) (ii) Derivative instruments (including embeded derivatives) that are measured at fair value through Other Comprehensive Income (reclassified to Profit and Loss during the year) (iii) Financial liabilities measured at fair value through Profit or Loss (11067.75) (8728.85) Financial liabilities measured at amortised cost (i) = Interest expense: 15420.11 13560.10 Sub-total (B) 1820.54 2670.07 12984.43 615.14 690.55 C. 69463.66 63597.99 67013.47 582.62 Borrowings Financial liabilities: Discounted cash flow 52659.55 584.31 53243.86 45826.10 45826.10 6833.45 33.97 6867.42 550.34 Total 550.34 Government securities, debentures and bonds Loans Financial assets: level 3 items Total 582.62 21378.03 21378.03 45052.82 45052.82 crore Financial assets: Particulars Fair value hierarchy of financial assets and financial liabilities at fair value: (f) NOTE [59] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Total LARSEN & TOUBRO Statutory Financial Reports Discussion and Analysis Report Integrated Management Corporate Overview Valuation technique Level 2: Future cash flows discounted using market rates. 67013.47 Discounted cash flow 67013.47 Statements Level 3 Level 2 Level 1 Level 3 Level 2 Level 1 As at 31-3-2022 594 crore (e) Disclosure pursuant to Ind AS 113 "Fair Value Measurement" - Fair value hierarchy of financial assets and financial liabilities measured at amortised cost: Total The carrying amounts of trade and other receivables, cash and cash equivalents, trade and other payables are considered to be the same as their fair values due to their short term nature. The carrying amounts of loans given and borrowings taken for short term or at floating rate of interest are considered to be close to the fair value. Accordingly, these items have not been included in the above table. Carrying amount of loans are net of provision for expected credit losses. 1. Notes: 67013.47 63597.99 69463.66 67337.14 2. Impairment loss recognised in Statement of Profit and Loss Valuation technique for level 3 items Loans Valuation technique for crore As at 31-3-2021 69463.66 Discounted cash flow 69463.66 40046.65 40046.65 29417.01 29417.01 Total Financial assets: Borrowings Discounted cash flow 46742.98 2700.24 49443.22 6254.58 40488.40 137.81 223.61 6392.39 40712.01 2338.82 Total 2338.82 Government securities, debentures and bonds Financial liabilities: C. 214.77 Net gains recognised in Other Comprehensive Income (A-B) 3. 1002.28 (158.76) 393.27 (347.37) 2. Gains/(losses) on fair valuation or sale of loans (Financial Services) 592 Gains/(losses) on fair valuation or sale of investments 1. Financial asset or financial liabilities measured at fair value through Profit or Loss: A. Net gains/(losses) on financial assets and financial liabilities measured at Fair Value through Profit or Loss (FVTPL) and amortised cost: I. No. 2020-21 2021-22 Particulars Gains/(losses) on fair valuation/settlement of derivative: (a) Gains/(losses) on fair valuation or settlement of forward contracts not designated as cash flow hedges 256.76 (55.52) (Allowance)/reversal for expected credit loss during the year (ii) 476.13 Exchange difference gains/(losses) on revaluation or settlement of items denominated in foreign currency (trade receivables, loans given etc.) (i) Financial assets measured at amortised cost: B. Sr. 599.13 Sub-total (A) (42.46) 85.56 (c) Gains/(losses) on fair valuation or settlement of futures not designated as cash flow hedges (146.41) (44.32) (b) Gains/(losses) on fair valuation or settlement of embedded derivative contracts not designated as cash flow hedges 343.90 crore Items of income, expenses, gains or losses related to financial instruments: (c) LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) NOTE [58] (contd.) A hypothetical 50 basis point shift in respective currency LIBOR and other benchmarks, holding all other variables constant, on the unhedged loans would result in a corresponding increase/decrease in interest cost for the Group on a yearly basis as follows: crore Particulars INR loans (net of loans given) Statements Increase/(decrease) in Profit after tax 2021-22 2020-21 As at 31-3-2021 Interest rates - increase by 0.50% in INR interest rate Interest rates - decrease by 0.50% in INR interest rate USD (including pegged currencies) loans Interest rates increase by 0.50% in USD interest rate Interest rates - decrease by 0.50% in USD interest rate 42.41 13.71 42.41 13.71 (42.41) Increase/(decrease) in Equity As at 31-3-2022 (2567.56) Statutory Financial Reports Management 416.22 57.49 473.71 0.91 185889.98 183407.31 1.88 23,29 463.81 393.21 70.60 23,29 23,29 Integrated Discussion and Analysis Report 4856.27 185230.58 2023.82 2039.85 45256.24 488.99 167.71 575.91 50568.33 Corporate Overview 6082.59 182734.91 Note (314.22) (2865.02) (499.77) (38.33) 661.35 Sub-total (A) Less: Gains/(losses) on fair valuation or settlement of embedded derivative contracts designated as cash flow hedges 1911.09 732.32 (b) Gains/(losses) on fair valuation or settlement of forward contracts designated as cash flow hedges 239.70 (32.64) (a) Gains/(losses) on fair valuation or sale of government securities, bonds, debentures etc. Derivative measured at fair value through Other Comprehensive Income: (ii) Financial assets measured at fair value through Other Comprehensive Income: Gains recognised in Other Comprehensive Income: A. Net gains/(losses) on financial assets and financial liabilities measured at fair value through Other Comprehensive Income: II. 30.97 2181.76 B. Gains reclassified to Profit and Loss from Other Comprehensive Income (i) 525.09 446.58 Sub-total (B) 3.72 (4.78) On embedded derivative contracts upon hedged future cash flows affecting the Profit or Loss or related assets or liabilities 3. (5753.06) 405.36 2. On forward contracts upon hedged future cash flows affecting the Profit or Loss or related assets or liabilities Derivative measured at fair value through Other Comprehensive Income: (ii) 116.01 46.85 1. On government securities, bonds, debentures etc. upon sale Financial assets measured at fair value through Other Comprehensive Income: 404.51 (2620.03) Total (A+B+C) 517.01 Statutory Financial Reports Integrated Discussion and Analysis Report Management Corporate Overview (6869.20) (2978.77) Sub-total (B) Statements (295.75) (b) Gains/(losses) on transfer of financial assets (including non-recourse basis) (321.07) (73.50) (a) Bad debts written off (net) (2743.03) (iv) Impairment loss recognised in Statement of Profit and Loss [as exceptional items (net of tax)] (v) Gains/(losses) on derecognition: (330.11) (314.07) (iii) Provision for impairment loss (other than ECL) [net] LARSEN & TOUBRO NOTE [59] (contd.) 14.84 Sub-total (C) 232.51 106.17 (ii) Unclaimed credit balances written back 284.50 (91.33) Notes forming part of the Consolidated Financial Statements (contd.) Exchange difference gains/(losses) on revaluation or settlement of items denominated in foreign currency (trade payables, borrowing availed etc.) Financial liabilities measured at amortised cost: C. 2020-21 2021-22 crore Particulars Sr. No. (i) 132605.26 28 Magtorq Engineering Solutions NOTE [61] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO Statements Statutory Financial Reports Discussion and Analysis Report D. Integrated Corporate Overview C. Sub-lease income recognised on operating leases: 2.98 crore (previous year: 3.94 crore). Operating lease income recognised in the Statement of Profit and Loss: 107.52 crore (previous year: ₹ 101.31 crore). The Group has given, on non-cancellable lease, certain assets such as buildings, plant & equipment, furniture & fixtures and vehicles. Leases are renewed only on mutual consent and at a prevalent market price and sub-lease is generally restricted. B. A. Management Annual undiscounted lease payments receivable is as under: crore As at 4 22.82 17.61 Receivable later than 2 years and not later than 3 years 3 48.66 41.48 Receivable later than 1 year and not later than 2 years 2 As at 31-3-2021 70.29 52.46 Receivable not later than 1 year 1 31-3-2022 Sr. No. Particulars (ii) Operating leases: Receivable later than 3 years and not later than 4 years 7028.41 Closing balance (1+2+3+4+5) Opening balance 1 Sr. No. Particulars crore Reconciliation of carrying amount of net investment in finance lease receivables: F. 2021-22 7028.41 7028.41 7028.41 6558.43 Net lease receivables (10-11) 1687.42 1989.06 1687.42 6558.43 2020-21 8898.18 2 Finance income/sub-lease income recognised during the year 6 (1687.42) (301.64) recognised during the year Impairment [in Developmental Projects Segment (Note 48)]/ Expected credit loss 5 28.65 (1195.48) (1147.51) Lease rental received during the year 4 7.84 Addition to finance lease during the year 3 984.48 971.33 6558.43 1989.06 1.37 5 455.99 Total 0.59 Computers 0.45 0.25 0.24 457.87 0.34 0.21 Vehicles 5.14 3.48 1.67 1.67 0.16 1.76 0.93 1.52 Notes forming part of the Consolidated Financial Statements Integrated Annual Report 2021-22 603 Fixed payments of ₹7.38 crore (previous year: 8.39 crore) per year, for a lease term of 5.5 years (previous year: 10 years) (vii) The Group has entered into certain lease agreements, which had not commenced by the year end and as a result, a lease liability and right-of-use asset has not been recognised as at year end. The aggregate future cash flows to which the Group is exposed in respect of these contracts are: (vi) Total cash outflow for leases amounts to 3557.66 crore (previous year: 2792.92 crore) [including Nil (previous year: * 5.89 crore) pertaining to discontinued operations] during the year including cash outflow of short term and low value leases. B. Low value leases - 68.62 crore (previous year: 38.88 crore) A. Short term leases - 3102.47 crore (previous year: 2339.65 crore) [including Nil (previous year: 4.60 crore) pertaining to discontinued operations]; Amounts not included in the measurement of the lease liability and recognised as expense in the Statement of Profit and Loss during the year are as follows: (v) (iv) Interest expense on lease liabilities amounts to 155.59 crore (previous year: 203.57 crore) [including Nil (previous year: * 0.28 ₹ crore) pertaining to discontinued operations]. 2021.53 1988.62 368.15 454.94 Furniture & fixtures 7.41 42.82 5.78 Depreciation for the year crore (iii) Details with respect to right-of-use assets: The Group has taken on lease various assets such as plant & equipment, buildings, furniture & fixtures, vehicles and computers. Generally, leases are renewed only on mutual consent and at a prevalent market price. (i) (b) Where the Group is a lessee: Class of asset 150.19 0.64 0.40 0.37 0.50 Receivable later than 4 years and not later than 5 years Receivable later than 5 years Total (1+2+3+4+5+6) 6 113.82 2021-22 Land 19.70 1602.80 1606.87 368.80 As at 31-3-2022 As at 31-3-2021 343.82 Carrying amount Additions during the year 2020-21 5.64 354.63 423.10 28.04 73.57 36.13 Plant & equipment 3.80 2021-22 2020-21 19.03 363.20 397.69 Buildings 33.27 (Note 48)] Expected credit loss on lease receivables Less: Impairment [in Developmental Projects Segment 11 Other assets 34777.90 39256.71 Loans 345.59 4623.16 690.07 15290.95 Cash and cash equivalents Inventories and trade receivables Current: Particulars As at 31-3-2021 As at 31-3-2022 11409.83 522.27 Total inventories and current financial assets hypothecated as collateral 55979.77 (a) Where the Group is a lessor: Disclosure pursuant to Ind AS 116 "Leases": NOTE [61] Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements Integrated Annual Report 2021-22 601 47357.97 39027.52 47357.97 39027.52 Total non-current financial assets hypothecated as collateral Loans Non-current: 50936.71 crore 602 Value of financial assets and inventories hypothecated as collateral for liabilities and/or commitments and/or contingent liabilities: Closing balance 723.25 Closing balance (479.18) (116.50) (260.25) (20.40) 492.11 (6.62) Taxes related to above Amount included in progress billing in Balance Sheet Amount included in non-financial asset/liability (421.08) (408.11) 28.16 0.15 crore Cost of hedging reserve 2021-22 (7.01) (4.72) (2.98) (0.77) Taxes related to above 149.50 85.27 Amount reclassified to Profit or Loss (138.38) (82.21) Changes in the forward element of the forward contracts where changes in spot element of forward contract is designated as hedging instruments for time period related hedges (15.15) (7.01) Opening balance 2020-21 NOTE [60] (i) Finance leases: A. Assets given under leases mainly include power plant where the Group has agreed to manufacture/construct an asset and convey, in substance, a right to the beneficiary to use the asset over a major part of its economic life, for a pre-determined consideration. 5841.02 5578.63 12449.61 11440.94 Receivable later than 5 years 6 7 246.40 1017.77 1008.68 Receivable later than 4 years and not later than 5 years 5 478.38 246.71 265.92 Unguaranteed residual value 990.36 990.36 8715.83 8547.49 10 Present value of minimum lease payments receivable (8-9) 10937.45 9961.59 Less: Unearned finance income 9 8715.83 8547.49 19653.28 18509.08 Gross investment in leases (1+2+3+4+5+6+7) 8 990.36 990.36 1290.94 1017.80 Receivable later than 3 years and not later than 4 years 4 1 31-3-2022 As at No. Present value of minimum lease payments crore Particulars Sr. Minimum lease payments The gross investment in these leases and the present value of minimum lease payments receivable is as under: E. C. Selling profit on finance lease recognised in the Statement of Profit and Loss: 1.13 crore (previous year: 14.55 crore). D. Sub-lease income recognised on finance leases: 0.10 crore (previous year: 0.18 crore). 1023.64 crore). Out 50.39 crore (previous the net investment in Finance lease income recognised in the Statement of Profit and Loss: 1021.62 crore (previous year: of above, 971.23 crore (previous year: 984.30 crore) is on the net investment in finance lease and year: 39.34 crore) is income relating to variable lease payments not included in the measurement of finance leases. B. Receivable not later than 1 year Notes forming part of the Consolidated Financial Statements (contd.) 1241.74 As at 31-3-2022 642.15 478.98 1517.28 1291.33 Receivable later than 2 years and not later than 3 years 3 310.37 643.44 1235.89 1518.23 Receivable later than 1 year and not later than 2 years 2 207.15 343.45 As at 31-3-2021 As at 31-3-2021 1151.43 4.90 NOTE [62] Share in Other comprehensive income 67.70 0.75% 0.03 0.01% 67.67 0.78% Mudit Cement Private Limited 245.15 L&T Financial Consultants Limited 0.04 0.00% 0.04 0.00% 0.96 0.30% 0.03% L&T Finance Limited 20.01% (46.33) 870.01 9.67% (0.51%) (46.33) 62.02 18.83% 807.99 9.32% (0.53%) (6.26) (0.07%) (6.26) (0.07%) 22.28 16491.38 398.81 0.48% L&T Infra Investment Partners 0.00% Developmental Projects: L&T Mutual Fund Trustee Limited 1.67% 0.04% 21.52 0.03% Advisory Private Limited L&T Infra Investment Partners 4.77 3.58 0.06% 0.20% 4.11 0.05% 1340.38 1.63% Limited) 0.66 0.04% 3.58 L&T Infra Investment Partners (1.00) (0.30%) 151.38 1.75% 541.57 0.66% Limited L&T Investment Management 0.01 0.00% 0.01 0.00% 0.08 0.00% Trustee Private Limited 150.38 known as L&T Infra Debt Fund L&T Metro Rail (Hyderabad) Limited (1669.37) (20.14%) (1745.85) 2.43% 218.93 2.52% 2508.59 3.04% L&T Power Development Limited 218.93 2.43 2.43 0.03% (0.59) (0.00%) L&T Himachal Hydropower Limited 0.08 0.03% L&T Uttaranchal Hydropower Limited 0.45% Limited Chennai Vision Developers Private Realty: 301.16 3.35% (0.66) (0.20%) 301.82 3.48% 3951.21 4.79% Nabha Power Limited 39.16 0.44% 39.16 0.00% (2.03%) 0.08 (0.15) Net Assets, i.e., total assets minus total liabilities NOTE [62] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO Statements Statutory Financial Reports Share in profit or (loss) Discussion and Analysis Report Management Corporate Overview 604 (19.40%) (1745.34) 0.51 0.15% Integrated Name of the entity As % of consolidated Amount (crore) (0.00%) Limited L&T Arunachal Hydropower Power Development: comprehensive income (*crore) Total Amount Amount (crore) Other comprehensive income Amount (crore) Share in Total comprehensive income As % of consolidated Share in Other comprehensive income As % of consolidated As % of consolidated profit or loss net assets 0.00% L&T Infra Credit Limited (formerly 220.60 2.45% 2.06 0.02% 2.06 0.02% 47.53 0.06% IT & Technology Services: L&T Infrastructure Engineering Limited 0.54% (0.08) (0.02%) 48.36 0.56% 287.61 48.28 Larsen & Toubro Infotech Limited 10.20% 8402.87 999.12 11.10% 80.57 24.46% 918.55 10.60% 3981.54 4.83% L&T Technology Services Limited 2325.20 25.84% 64.27 19.51% 2260.93 26.08% 0.35% Mindtree Limited (Consolidated) L&T Geostructure Private Limited (0.01%) Amount (*crore) Total Amount (*crore) Other comprehensive income Amount (*crore) Share in Total comprehensive income As % of consolidated comprehensive income As % of consolidated net assets Amount (*crore) As % of consolidated Name of the entity Share in profit or (loss) Net Assets, i.e., total assets minus total liabilities As % of consolidated profit or loss Parent company Larsen and Toubro Limited 81.44% (1.33) (0.02%) (1.34) (0.00%) Aggregates Limited Hi-Tech Rock Products and Infrastructure: Indian Subsidiaries 7843.24 87.16% (36.21) (11.00%) 7879.45 90.89% 67114.05 (1.33) 6.64% 5473.94 19.07% (0.01%) 1.97 0.02% 6.48 0.01% Private Limited (0.02) Powerup Cloud Technologies (0.02%) (2.16) (0.02%) 0.52 0.00% Lymbyc Solutions Private Limited (2.16) 0.03% 1.95 Cuelogic Technologies Private 2.42 0.73% 218.18 2.52% 11271.13 13.68% L&T Finance Holdings Limited Financial Services: (0.13) (0.00%) (0.13) (0.00%) 13.63 0.02% Limited (0.01) (0.00%) (0.01) (0.00%) 13.64 0.15% 0.14 0.04% 13.50 0.16% 51.50 0.06% Private Limited L&T Thales Technology Services 1750.51 19.45% 97.61 29.63% 1652.90 Graphene Semiconductor Services Additional information pursuant to Schedule III to the Companies Act, 2013 as at and for the year ended 31-3-2022: Private Limited 10.98 0.59 0.00% Limited Esencia Technologies India Private (0.05) (0.00%) (0.05) (0.00%) 0.06 0.00% Seastar Labs Private Limited 0.14 0.00% 0.14 0.00% 0.01% (0.00%) Amount reclassified to Profit or Loss (6.94) Integrated Discussion and Analysis Report Statutory Financial Reports Statements LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements (contd.) Management NOTE [59] (contd.) As at 31-3-2022 As at 31-3-2021 Within Particulars Nominal amount Average (C) Forward covers taken to hedge exchange rate risk and accounted as fair value hedge: Corporate Overview 608 8998.71 0.03 0.00% 0.02 L&T Hydrocarbon Caspian LLC Total Joint Ventures CFS adjustment and elimination (39.30%) Total 487.32 (32375.77) 82407.66 (33.49%) 121.15 (2902.99) 8669.33 17.04% 69.69 56.16 329.38 (31.64%) 190.84 (2846.83) twelve 0.01% After twelve rate 2262.85 1444.18 73.26 1444.18 Canadian Dollar 4.55 76.32 60.69 3.48 58.01 3.48 British Pound 13.18 99.50 4.55 2262.85 US Dollar (a) Receivable hedges: Nominal amount Average rate twelve months months months After twelve months (crore) (*) (*crore) (₹) (* crore) (*crore) (* crore) ( crore) Within 13.18 (0.01) (0.04) 192.04 (0.75%) (64.62) 2.39% 7.86 (0.63%) 0.23% (56.76) 0.06% 48.18 (0.07%) (6.40) 0.15% 0.50 L&T-Chiyoda Limited Limited L&T Sapura Shipping Private 0.01 Limited 0.04% 33.68 0.30% 26.34 -- 0.29% 26.34 Hydrocarbon: L&T Sapura Offshore Private Limited 0.00% 0.30 0.00% 0.01 0.00% (0.07%) (0.00%) (5.90) L&T Infrastructure Development Construction L&T Infrastructure Engineering Limited and LEA Associates South Asia Private Limited JV LLP 0.00% 2.00 Foreign Joint Ventures 0.02% 0.02% 1.80 Hydrocarbon: Indiran Engineering Projects & Systems Kish PJSC (0.00%) 1.80 (0.01) (0.00%) (0.01) Projects Limited (Consolidated) 0.98% 808.58 0.15% 12.62 16.91% 55.71 0.76% 68.33 Others: Raykal Aluminium Company Private Limited 0.00% 0.06 (0.00%) Developmental Projects: 66.98 100.72 66.98 Nominal amount Average twelve rate months (*crore) Within (₹) After twelve months (crore) Within After Nominal amount (* crore) Average twelve (crore) As at 31-3-2021 As at 31-3-2022 Aluminium 151245.62 11.78 (23.49) 7447.47 33.68 9.51 170723.79 9.51 71.39 1346959.25 71.39 48.19 142370.06 143.04 1030545.11 48.19 143.04 [1] Negative nominal amount represents sell position (net). (B) Commodity option contract: Particulars twelve (11.71) 33.68 rate months Liability Other financial liabilities 383.79 29.18 329.79 165.25 61.35 (b) Non-current: 664.20 Asset Other financial assets 451.91 - Liability Other financial liabilities 27.82 44.22 3.02 627.16 117.38 882.85 Asset Other financial assets (₹) (*crore) (crore) 11.30 [1] 11.30 [1] The options contracts include a combination of calls and puts with different maturities and strike prices. Carrying amounts of hedge instruments for which hedge accounting is followed: (A) Cash flow hedge: Particulars (i) Forward contracts crore As at 31-3-2022 Currency exposure Commodity price exposure As at 31-3-2021 Currency exposure Commodity price exposure (a) Current: months 25.25 25.25 12174.31 99.84 EURO 63.43 84.58 63.43 86.29 86.29 1.62 86.29 115.83 20.87 115.83 112.90 20.34 112.90 Arab Emirates Dirham 8.78 1.62 Norwegian Krone Australian Dollar 10.82 56.92 10.82 3.34 55.64 3.34 South African Rand 1.95 4.86 1.95 Danish Krone 6.17 11.37 6.17 Swedish Krona 10.04 8.37 10.04 Nominal amount (crore) Average twelve After twelve rate months months (*) (crore) ( crore) (489.40) 743343.39 229.82 228503.75 (489.40) 129.98 (114.88) 587748.64 (114.88) (crore) L&T MBDA Missile Systems ( crore) months (ii) Outstanding commodity price hedge instruments: (A) Commodity forward contract: Particulars Copper (Tn) [1] Aluminium (Tn) [1] Iron Ore (Tn) Lead (Tn) Nickel (Tn) As at 31-3-2022 As at 31-3-2021 Within Nominal amount (*crore) Average rate (₹) twelve After twelve Within months Changes in fair value of swaps Defence Engineering: (2.18%) (m) Breakup of cash flow hedging reserve and cost of hedging reserve: Liability Other financial liabilities - Asset Other financial assets (a) Current: Forward contracts crore Particulars NOTE [59] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements Integrated Annual Report 2021-22 599 25.54 (B) Fair value hedge: As at 31-3-2022 As at 31-3-2021 Currency Cash flow Cost of hedging As at 31-3-2021 hedging As at 31-3-2022 Cash flow Particulars crore 3.06 7.65 3.99 Commodity price exposure exposure Currency Commodity price exposure exposure 11.98 Cost of Liability Other financial liabilities 78.02 (0.01%) (0.97) Cuelogic Technologies Inc. 0.00% 0.97 0.01% (0.02) 0.60 0.02 0.01% 0.62 Valves, Construction Equipment: L&T Valves Arabia Manufacturing LLC 0.01% (0.01%) (0.95) (0.01%) Asset Other financial assets (b) Non-current: 9.78 11.04 Liability Other financial liabilities 20.38 36.77 Asset Other financial assets (a) Current: (ii) Option contracts 16.58 L&T Technology Services (Canada) Limited (0.00%) (0.88) 62.26 (0.00%) hedging reserve Statements Statutory Financial Reports Discussion and Analysis Report Integrated Management Corporate Overview LARSEN & TOUBRO 242.30 (v) Sales, administration and other expenses (137.54) (75.37) (iv) Finance costs 90.86 44.78 47.30 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [59] (contd.) (o) Movement of cash flow hedging reserve and cost of hedging reserve: 7.24 Changes in intrinsic value of option contracts 1837.49 762.09 Changes in fair value of forward contracts designated as hedging instruments 222.30 1.77 Changes in the spot element of the forward contracts which is designated as hedging instruments for time period related hedges (421.77) 492.11 Opening balance 2020-21 2021-22 Cash flow hedging reserve crore (iii) Manufacturing, construction and operating expenses hedging 38.12 (ii) Revenue from operations Total (2.67) 207.34 0.04 405.17 Balance for which hedge accounting discontinued 723.25 (4.34) (4.76) 318.08 Balance towards continuing hedges reserve reserve reserve 284.77 (4.72) 492.11 (7.01) 260.25 20.40 Progress billing (i) 39.49 21.57 2020-21 2021-22 crore (B) Hedged expected future cash flows affecting Profit or loss: (i) Sales, administration and other expenses (A) Future cash flows are no longer expected to occur: Particulars 600 (n) Reclassification of hedging reserve and cost of hedging reserve to Profit or Loss: 284.56 (2.07) (0.04%) (3.33) L&T - MHI Power Turbine Generators Private Limited 0.24% 196.44 0.06% 5.02 122.60 1.75% 0.12% 10.77 L&T Howden Private Limited 0.09% 76.19 0.17% 5.75 1.36% (0.34) (0.10%) (0.02%) (1.48) Total Associates 5.21 (0.59) (0.08) (0.67) Indian Joint Ventures Power: L&T MHI Power Boilers Private Limited 1.07% 884.93 1.42% 122.94 14.10 (0.08) 0.16% L&T-Sargent & Lundy Limited As % of consolidated profit or loss Share in Other comprehensive income As % of consolidated Share in Total comprehensive income As % of consolidated Amount (crore) Other comprehensive income net assets Amount (*crore) Total comprehensive income (*crore) Heavy Engineering: L&T Special Steels and Heavy Forgings Private Limited [The Group's funded exposure (net of impairment) is nil and hence no further losses recognised] Amount Amount (*crore) As % of consolidated Name of the entity 0.05% 37.44 0.12% 9.36 0.05% 0.18 0.11% 9.54 607 Integrated Annual Report 2021-22 Notes forming part of the Consolidated Financial Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [62] (contd.) Net Assets, i.e., total assets minus total liabilities Share in profit or (loss) 14.10 (0.02%) (1.40) (0.02%) 4.12% 13.58 0.62% 55.93 L&T Global Holdings Limited 0.73% 42.35 601.54 Total Subsidiaries 60142.92 0.09 5322.22 6.46% 21.29 0.24% 0.00% 0.49% 403.05 0.49% (0.01%) L&T Valves USA LLC 0.00% 2.18 0.01% 0.82 0.02% (0.04) 0.06 (0.04%) 0.01% (3.37) 0.88 Electrical & Automation: Thalest Limited Others: L&T International FZE 21.38 348.79 5671.01 Non-controlling Interest in all 0.53 0.00% 0.04 0.01% 0.77 0.00% 0.04 Foreign Associates Larsen & Toubro Qatar & HBK Contracting Co. WLL (0.00%) (3.89) L&T Camp Facilities LLC 0.00% 3.03 0.00% (1792.48) Private Limited 0.01% subsidiaries (15.73%) (12966.07) (20.20%) (1749.91) (33.08%) (108.97) (20.66%) (1858.88) Associates Indian Associates Gujarat Leather Industries Limited Magtorq Private Limited 0.01% 5.54 0.77 (0.03) (ii) The Group during the year has leased out surplus capacity in leased assets and has accounted an income of 3.08 crore (previous year: 4.12 crore) on such sub-leases. (0.01) (0.22) (0.07%) 6.23 0.07% 9.03 0.01% Syncordis PSF S.A. (6.59) (0.07%) 0.40 0.12% (6.99) (0.08%) (24.91) (0.04%) Syncordis Limited (1.39) (0.02%) 0.15 0.05% (1.54) (0.02%) (7.48) (0.01%) Syncordis France SARL 8.35 0.09% (0.78) (0.24%) 0.07% 6.01 Nielsen+Partner Unternehmensberater GmbH (2.49) (0.00%) Nielsen&Partner Company Limited (7.03) (0.08%) 0.92 0.28% (7.95) (0.09%) 27.43 0.03% Nielsen+Partner Pte Limited (0.28) (0.00%) 9.13 0.22 (0.50) (0.01%) 3.20 0.00% Unternehmensberater AG Nielsen+Partner (1.62) (0.02%) (0.14) (0.04%) (1.48) (0.02%) 10.29 0.01% 0.07% (0.01%) 0.11% 0.05% 0.00% 0.47 0.00% Spain SL L&T Information Technology (14.65) (0.16%) 1.32 0.40% (15.97) (0.18%) 366.93 0.45% Larsen & Toubro Infotech GmbH 6.61 0.07% 0.89 0.27% 5.72 0.07% 17.76 0.02% Africa (Proprietary) Limited Larsen and Toubro Infotech South 0.49 0.01% 0.24 0.07% 0.25 0.16 (0.00%) (0.01) 0.00% Syncordis S.A. 2.64 0.03% 0.19 0.06% 2.45 0.03% 4.22 0.01% L&T Infotech S. DE R.L. DE C.V. 0.11 0.00% 0.10 0.03% 42.13 0.01 2.95 0.00% Larsen & Toubro LLC 5.79 0.06% 0.12 0.04% 5.67 0.07% 9.33 0.01% AS Larsen & Toubro Infotech Norge 0.15 0.00% (0.80) 0.01% 0.04 2.26 0.00% (Shanghai) Co. Limited L&T Technology Services (0.07) (0.00%) 0.01 0.00% (0.08) (0.00%) 0.23 0.00% Limited Graphene Solutions Taiwan (0.02) (0.00%) (0.02) (0.00%) 0.13 0.00% Graphene Solutions SDN. BHD. income comprehensive (*crore) Total Amount Amount (*crore) Other comprehensive income profit or loss 0.01% 1.02 0.03% 0.11 (0.00%) 0.18% 0.33 0.10% 16.25 0.19% 17.97 0.02% LTI Middle East FZ-LLC 12.49 0.14% (0.30) (0.09%) 12.79 net assets 0.15% 0.02% Limited Larsen & Toubro Infotech UK (6.12) (0.07%) 0.65 0.20% (6.77) (0.08%) 15.19 0.02% Orchestra Technology, Inc. 1.13 0.01% 12.71 (*crore) Amount Share in Total comprehensive income As % of consolidated (0.39) (0.00%) Lymbyc Solutions Inc. 0.24 0.00% 0.03 0.01% 0.21 0.00% 0.99 0.00% Ruletronics Systems Inc. (0.30) (0.00%) L&T Technology Services LLC (0.02) (0.28) (0.00%) Ruletronics Limited (4.29) (0.05%) (0.14) (0.04%) (4.15) (0.05%) (5.07) (0.01%) Nielsen&Partner Pty Limited (0.76) (0.01%) (0.01%) 0.00% 0.38% 0.50% Share in Other comprehensive income As % of consolidated As % of consolidated Amount (*crore) As % of consolidated Name of the entity Share in profit or (loss) Net Assets, i.e., total assets minus total liabilities NOTE [62] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO Statements Statutory Financial Reports Integrated Management 309.07 Corporate Overview (0.11) (0.00%) 0.02 0.01% (0.13) (0.00%) 0.53 0.00% Graphene Solutions PTE Limited 60.24 0.67% 16.86 5.11% 43.38 606 6.63 Discussion and Analysis Report Larsen & Toubro Infotech LLC L&T Infra Contractors Private Limited 3.70 0.00% L&T Capital Company Limited 2.00 ... 0.02% ---- 2.00 0.02% 37.13 0.05% L&T Aviation Services Private Limited Private Limited Kesun Iron and Steel Company 0.12 0.00% 0.12 0.00% 5.84 0.01% L&T Power Limited 0.05 0.00% Limited Bhilai Power Supply Company Others: 14.03 0.16% (0.07) I Foreign Subsidiaries Infrastructure: Larsen & Toubro (Oman) LLC 3.73 0.00% (Proprietary) Limited Larsen & Toubro T&D SA 109.16 1.21% 64.78 19.67% 44.38 0.51% 455.00 0.55% Larsen & Toubro Saudi Arabia LLC (0.58) (0.02%) (0.01%) (0.10%) (0.24) (0.00%) (0.50) (0.00%) Larsen & Toubro Qatar LLC 15.36 0.17% 9.25 2.81% 6.11 0.07% 425.11 0.52% (0.34) 14.10 0.16% 484.44 146.38 1.63% (0.04) (0.01%) 146.42 1.69% 927.59 1.13% L&T Realty Developers Limited 59.79 0.66% (0.03) (0.01%) 59.82 LTR SSM Private Limited 0.69% 0.25% Project LLP) (formerly known as L&T Parel L&T Parel Project Private Limited (23.38) (0.25%) (0.01) (0.00%) (23.38) (0.27%) (68.80) (0.08%) 0.01% L&T Asian Realty Project LLP 206.60 0.00% L&T Seawoods Limited 2801.36 0.59% 11.35 0.13% (0.10) (0.03%) 11.45 0.13% 204.38 0.25% L&T Valves Limited Limited L&T Construction Equipment Valves, Construction Equipment: L&T Westend Project LLP 3.40% (0.59) (0.59) (0.01%) (2.32) (0.00%) Limited) L&T Electricals and Automation Limited (formerly known as L&T Vision Ventures Limited 53.38 0.60% 0.02 0.01% 53.36 0.62% (0.01%) 0.13 L&T Innovation Campus (Chennai) 0.21 0.01% 0.48 0.00% FZE L&T Hydrocarbon International (119.39) (1.33%) 4.30 1.31% (123.69) (1.43%) (72.11) (0.09%) Larsen & Toubro Electromech LLC 0.48 Engineering Indonesia 1.09 0.01% 0.28 0.09% 0.81 0.01% 8.92 0.01% Company WLL Construction General Contracting Larsen & Toubro Kuwait (75.24) (0.84%) (82.88) PT Larsen & Toubro Hydrocarbon (25.16%) 0.01% IT & Technology Services: 13.28 0.15% 0.06% 1.74 0.53% 11.54 0.13% 49.32 0.06% Limited Larsen & Toubro Infotech Canada 106.08 1.18% (2.89) 0.48 (0.88%) 1.26% 312.83 0.38% Technologies Inc. L&T Infotech Financial Services 2.04 (0.20) (0.06%) 2.24 0.03% (1.66) (0.00%) Services (Shanghai) Co., Limited L&T Information Technology 108.97 7.64 0.02% (653.33) Amount (*crore) Share in Total comprehensive income As % of consolidated Total Amount (crore) Other comprehensive income Amount (crore) Share in Other comprehensive income As % of consolidated As % of consolidated profit or loss net assets Amount (*crore) As % of consolidated Name of the entity Share in profit or (loss) Net Assets, i.e., total assets minus total liabilities NOTE [62] (contd.) comprehensive income Notes forming part of the Consolidated Financial Statements (contd.) 605 0.39 0.00% 0.10 0.03% 0.29 0.00% 4.61 0.01% Bhd. 0.09% 0.01% Larsen & Toubro (East Asia) Sdn. 0.34 Notes forming part of the Consolidated Financial Statements Hydrocarbon: Integrated Annual Report 2021-22 Engineering LLC 0.30% L&T Hydrocarbon Saudi Company Larsen & Toubro Heavy (0.79%) (10.22) (3.10%) 37.11 0.43% (262.34) Larsen Toubro Arabia LLC (29.06) (0.31%) 6.95 2.11% (36.01) (0.32%) 179.07 (0.16%) (128.91) (0.10%) (8.69) (0.42%) (1.34%) (4.42) (0.15%) 26.89 (13.11) 0.22% L&T Modular Fabrication Yard LLC Limited L&T-Sargent & Lundy Limited L&T Howden Private Limited No. Particulars Sr. 14 44 8 43 95.00 99.99 Proposed dividend - equity Proposed dividend - preference % of share holding 15 13 Steels and Heavy Interim dividend preference Sr. No. L&T Sapura L&T MBDA 31-Mar-22 INR 31-Mar-22 INR 31-Mar-22 USD 12 Currency Limited 31-Mar-22 INR 31-Mar-22 INR 31-Mar-22 INR Financial year ending on Limited L&T Sapura L&T Special 48 47 46 45 51.00 51.00 100.00 100.00 Missile Systems Offshore Private Shipping Private Limited Forgings Private (234.10) 98.08 Interim dividend equity 7 61.63 0.00 6.11 Investments 6 1693.62 3450.41 3.83 Turnover 39.38 Total assets 5 1693.62 3450.41 3.83 Exchange rate on the last day of 39.38 Total equity and liabilities 5.89 5.89 20.08 2310.60 607.55 11 9.85 241.02 0.00 2.00 0.12 Profit after taxation 10 83.34 0.00 0.69 0.05 Provision for taxation 9 9.85 324.36 0.00 2.69 0.17 Profit before taxation 8 (1.50) financial year 37.79 Date of incorporation/ Date of 9 (107.56) 0.00 54.39 (183.94) 21.42 Profit before taxation 8 0.70 147.03 263.11 102.08 293.77 Turnover 7 65.92 Investments 6 786.31 Provision for taxation 9.64 2.70 2.74 15 14 Proposed dividend - preference 4 13 Proposed dividend - equity Interim dividend preference 12 (6.00) (6.75) Interim dividend equity 6.51 11 0.01 51.65 (183.94) 18.71 28.14 Profit after taxation 10 0.13 (0.00) (107.69) 331.25 501.78 110.74 122.07 applicable) Other equity/Reserves and surplus (as 2 158.85 0.01 1.00 566.60 5.57 69.30 30.00 Share capital (including share application 1 02-Sep-10* 02-Sep-10* 05-Apr-17* 01-Jul-09* 05-May-95* 17-Jun-10* Acquisition money pending allotment) 75.79 (2988.87) 0.49 338.12 Total assets 5 786.31 6.51 331.25 501.78 110.74 338.12 65.03 Total equity and liabilities 466.25 6.01 265.22 2924.05 35.87 186.05 Liabilities 3 161.21 4 1308.44 Liabilities 0.13 369.81 15.85 3599.23 Total equity and liabilities 4 1.06 503.01 165.43 18.17 797.89 3 466.44 5.24 (9.76) 955.14 (0.10) applicable) Other equity/Reserves and surplus (as 2 987.45 1.11 5 Total assets 19.84 11.76 (0.12) 85.32 Profit before taxation 8 971.97 402.41 48.14 0.05 Turnover 8.43 541.87 Investments 6 1.11 987.45 369.81 15.85 3599.23 7 11-Jul-95* 18.00 199.14 Bhilai Power Supply Company Limited L&T Valves Limited Equipment Limited (Chennai) Campus L&T Seawoods Limited Limited LTR SSM Private L&T Construction Financial year ending on No. Particulars L&T Innovation 36 35 34 33 32 31 % of share holding Sr. No. Sr. 9 31-Mar-22 INR 7.44 1846.20 0.10 money pending allotment) Share capital (including share application 1 23-Nov-61* 18-Dec-18* 12-Dec-07* Currency 13-Mar-08* Acquisition Date of incorporation/ Date of financial year Exchange rate on the last day of 31-Mar-22 INR 31-Mar-22 INR 31-Mar-22 INR Limited 31-Mar-22 INR 31-Mar-22 INR 24-Sep-18* Provision for taxation 31.98 0.48 06-Apr-00* 06-Nov-09* 16-Jan-09* 09-Mar-06* Acquisition Date of incorporation/ Date of financial year Exchange rate on the last day of 31-Mar-22 INR 09-Oct-06* 31-Mar-22 INR 31-Mar-22 31-Mar-22 INR INR 31-Mar-22 Private Limited L&T - MHI Power Turbine Generators Boilers Private Limited Limited L&T Capital L&T - MHI Power Company INR L&T Aviation Services Private Limited 27-Dec-06* Share capital (including share application 2.25 0.05 Liabilities 3 (325.42) 1501.04 3.65 (8.47) (0.01) 1 5.79 Other equity/Reserves and surplus (as 2 710.60 234.10 0.05 45.60 0.01 0.05 money pending allotment) applicable) 1715.27 Kesun Iron and Steel Company Private Limited L&T Power 100.00 811 100.00 99.00 % of share holding 15 14 Proposed dividend - preference 13 Proposed dividend - equity Interim dividend preference 18 12 11 14.10 11.45 (0.59) 53.34 Profit after taxation 10 5.73 0.31 Interim dividend equity Limited 100.00 99.90 42 41 38 37 INR Currency 31-Mar-22 Financial year ending on No. Particulars 100.00 Sr. 40 39 Sr. No. Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] (contd.) Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Salient Features of the Financial Statements of Subsidiaries/Associate Companies/Joint Ventures Integrated Annual Report 2021-22 613 Note: Date of incorporation crore 50.10 37.74 74.00 Proposed dividend - preference 14 13 Proposed dividend - equity Interim dividend preference 12 Interim dividend equity 11 167.21 (24.70) 95.06 (138.79) (127.53) (17.40) Profit after taxation 10 0.03 Provision for taxation 9 167.21 15 % of share holding 51.00 51.01 1 Date of incorporation/ Date of Acquisition Exchange rate on the last day of financial year Currency Financial year ending on L&T Rajkot- Vadinar Tollway 61 Sr. No. No. Particulars (24.70) Sr. Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Salient Features of the Financial Statements of Subsidiaries/Associate Companies/Joint Ventures Integrated Annual Report 2021-22 615 Note: Date of incorporation 100.00 51.00 51.00 52.89 Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] (contd.) 95.06 (138.76) (127.53) Total assets 5 0.89 993.29 2063.70 1886.74 1526.16 1289.01 Total equity and liabilities 1289.01 4 890.63 1494.48 2285.15 2006.89 1230.30 Liabilities 3 (168.22) (187.37) 0.01 Share capital (including share application 1526.16 2063.70 (17.40) Profit before taxation 8 0.01 163.85 242.49 191.54 199.25 227.19 1886.74 Turnover 0.34 48.44 152.34 73.01 70.52 Investments 6 0.89 993.29 7 2 money pending allotment) applicable) 13 Interim dividend preference 12 Interim dividend equity 11 75.97 (0.01) (0.31) 110.90 Proposed dividend - equity 25.38 101.35 (0.01) (0.10) 110.90 26.45 0.00 112.53 1.43 156.80 0.21 0.01 14 15 Larsen & Toubro (Oman) LLC Currency Financial year ending on Particulars No. Sr. Larsen & Larsen & 70 Proposed dividend - preference 69 67 66 65 Sr. No. 51.00 51.00 51.00 51.00 % of share holding 68 376.62 354.25 156.80 Limited 62 crore Profit after taxation 10 Provision for taxation 9 Profit before taxation 8 31-Mar-22 INR Turnover Investments 6 Total assets 5 Total equity and liabilities 4 Liabilities 3 Other equity/Reserves and surplus (as 7 749.68 L&T Chennai- Tada Tollway Limited 31-Mar-22 INR 64 0.01 354.25 749.68 38.30 0.01 318.47 809.22 104.55 (0.01) 63 Watrak Infrastructure Private Limited 31-Mar-22 INR (6.22) 13.95 0.01 42.00 110.00 20-May-99* 18-Nov-21 24-Mar-08* 08-Sep-08* 31-Mar-22 INR (169.54) 50.00 (683.75) (90.29) 2521.12 0.03 applicable) Other equity/Reserves and surplus (as 2 41.40 57.16 43.50 30.05 629.52 0.05 money pending allotment) Share capital (including share application 1 24-Sep-97* 02-Feb-06* 23-Dec-05* 21-Jul-05* 26-Feb-01* (373.50) 121.86 (10.03) 383.48 3225.02 0.94 Total assets 5 481.81 151.75 191.65 119.83 3225.02 23-Feb-99* 0.94 4 56.93 104.62 26.29 463.28 74.38 0.86 Liabilities 3 Total equity and liabilities Acquisition Date of incorporation/ Date of financial year Raykal crore 52 51 Sr. No. Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] (contd.) Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures 49 LARSEN & TOUBRO 50 L&T Statements Discussion and Analysis Report Integrated Management Corporate Overview 614 Note: Date of incorporation 60.00 60.00 51.00 Statutory Financial Reports 119.83 53 L&T Exchange rate on the last day of 31-Mar-22 INR INR INR INR 31-Mar-22 31-Mar-22 31-Mar-22 Limited 54 Transportation Infrastructure Vadodara Bharuch Tollway Limited Infrastructure Panipat Elevated Development Corridor Limited Limited Projects Limited 31-Mar-22 31-Mar-22 INR INR Currency Financial year ending on Company Private Aluminium No. Particulars Sr. L&T Interstate Road Corridor Limited 191.65 151.75 481.81 Kudgi L&T Sambalpur- Transmission Rourkela Tollway Limited Limited 31-Mar-22 31-Mar-22 INR INR L&T Deccan Tollways Limited 31-Mar-22 INR L&T Samakhiali Gandhidham Tollway Limited 31-Mar-22 INR Limited 31-Mar-22 INR Exchange rate on the last day of Currency Financial year ending on Ahmedabad- Maliya Tollway PNG Tollway No. Particulars 60 59 58 57 56 55 Sr. No. 63.86 51.00 Sr. 51.00 Limited financial year applicable) Other equity/Reserves and surplus (as 2 169.10 290.03 192.60 285.34 80.54 149.00 31-Mar-22 INR money pending allotment) 1 16-Feb-09* 18-Oct-13* 30-Aug-13 20-Dec-11* 05-Feb-10* 09-Sep-08* Acquisition Date of incorporation/ Date of Share capital (including share application (561.27) 51.00 75.50 133.59 (40.80) (41.81) (0.01) Profit before taxation 8 58.60 25.71 406.73 0.57 36.60 Turnover 7 88.22 65.53 2.01 2.12 2384.68 Investments 6 115.63 51.00 39.78 Provision for taxation % of share holding 15 14 Proposed dividend - preference 13 Proposed dividend - equity Interim dividend preference 12 Interim dividend equity 11 28.89 9 0.48 (40.80) (43.02) (0.01) Profit after taxation 10 10.87 0.09 23.42 1.21 110.17 100.00 L&T Financial 100.00 31-May-17 15-Oct-18 15-Oct-18 15-Feb-14 Acquisition Date of incorporation/ Date of financial year 31-Mar-22 INR Powerup Cloud Technologies Private Limited 31-Mar-22 INR Technologies Lymbyc Solutions India Private Private Limited Limited 31-Mar-22 INR 31-Mar-22 INR INR Seastar Labs Private Limited Services Private Limited 31-Mar-22 Semiconductor Esencia Graphene L&T Thales Technology Services Private Limited 31-Mar-22 INR 29-Aug-19 25-Oct-19 1 Share capital (including share application 0.17 23.67 Liabilities 3 6.46 (0.63) 0.58 0.01 9.55 Exchange rate on the last day of 49.44 Other equity/Reserves and surplus (as 2 0.02 1.15 0.01 0.05 1.43 2.06 money pending allotment) applicable) Currency Financial year ending on No. Particulars 12 (164.81) (210.95) (437.88) Interim dividend equity 11 1652.80 918.55 2260.93 Interim dividend preference 2.06 (1.33) Profit after taxation 10 557.80 332.29 749.54 1.01 22.03 Provision for taxation 48.36 0.14 13 (389.35) Sr. 12 11 10 9 8 7 Sr. No. 60.99 Proposed dividend - equity 73.90 100.00 100.00 100.00 % of share holding 15 Proposed dividend - preference 14 (271.42) (116.98) 74.05 0.01 2.95 2.12 Sr. Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] (contd.) Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Salient Features of the Financial Statements of Subsidiaries/Associate Companies/Joint Ventures Integrated Annual Report 2021-22 611 Note: Date of incorporation 74.05 74.05 No. Particulars 73.90 73.90 54.69 % of share holding 15 14 Proposed dividend - preference 13 Proposed dividend - equity Interim dividend preference 12 Interim dividend equity 73.90 11 Sr. No. Currency 31-Mar-22 31-Mar-22 INR Management Limited Investment Partners Trustee Private Limited L&T Investment L&T Infra L&T Infra Investment Partners Advisory Private Limited 31-Mar-22 INR 31-Mar-22 INR 31-Mar-22 INR Financial year ending on 31-Mar-22 INR Cuelogic Technologies Private Limited 17 16 15 14 13 18 crore Exchange rate on the last day of L&T Finance L&T Infra Credit Holdings Limited Limited 9 1.97 (0.01) 10.66 27.51 Investments 6 8.60 3.47 0.60 0.20 11.15 0.56 75.17 5 8.60 3.47 0.60 0.20 11.15 75.17 Total equity and liabilities 4 Total assets (2.16) 7 91.91 (0.05) 0.14 13.50 Profit after taxation 10 0.00 0.37 0.08 4.70 Turnover Provision for taxation 1.98 (1.79) (0.01) (0.05) 0.22 18.20 Profit before taxation 8 9.75 9 INR 2210.60 3010.47 NA Loan given to struck off company by subsidiary Inmech Engineering Private Limited 7 [1] _ [1] ΝΑ Shares held by struck off company Kothari Intergroup Limited 6 [1] - [1] NA Shares held by struck off company -[1] - [1] NA Accounts Payable 0.01 - [1] -[1] [1] Less than 1 Lakhs NOTE [64] 3 L&T Hi-Tech Rock 2 1 Sr. No. Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures LARSEN & TOUBRO Statements 0.01 Statutory Financial Reports Integrated Management Corporate Overview 610 b. Figures for the previous year have been regrouped/re-classified to conform to the figures of the current year. For better understanding of the Group's financial performance, line items have been added to show Profit after tax from continuing operations separately from exceptional items. This is in line with guidance available in Schedule III to the Act. a. NOTE [65] There are no amounts due and outstanding to be credited to Investor Education & Protection Fund as at March 31, 2022. Discussion and Analysis Report ΝΑ Accounts Payable Alert Infraprojects Private Limited IS Earth Movers Private Limited Victor Properties Private Limited Notes forming part of the Consolidated Financial Statements Integrated Annual Report 2021-22 609 (v) L&T Special Steels and Heavy Forgings Private Limited (LTSSHF), a joint venture, owes a loan of 1871.61 crore to L&T. The loan falls due in 2022-23. LTSSHF has estimated a cash shortfall to fulfil the repayment obligation and is, in discussion with its promoters, exploring options to restructure its balance sheet. (e) The SPV has sought remedy to link the debt servicing with the receipt of termination dues from NHAI. (d) With toll collections not available, the SPV could not service the interest payment. The lenders filed an application before the Debt Recovery Tribunal (DRT), Chennai seeking direction to issue recovery certificate against the SPV. As per the DRT order dated April 13, 2022, the SPV was asked to deposit 70.00 crore in two instalments which are not due yet. (c) The favourable arbitration award for determination and settlement of termination dues was received in 2019. NHAI, which hitherto was depositing the toll collections in the escrow account, discontinued the same w.e.f. November 8, 2020 and also appealed against the award with High Court of Delhi. (iv) L&T Chennai Tada Tollway Limited, a subsidiary and SPV of L&T Infrastructure Development Projects Limited, a joint venture, has not repaid the loan of 265.22 crore to banks as the company is yet to receive the dues on termination of the project as below: (a) Under the Concession agreement, NHAI was to arrange land for conversion of 66 km of 4 lane-road to 6 lanes. The SPV could construct 42 km and remaining 24 km could not be completed as NHAI could not make land available. Due to default by NHAI on this condition, the SPV terminated the project in 2015 and claimed the termination dues as per the concession agreement. (b) Pending settlement of the termination dues, SPV approached the Hon'ble Delhi High Court and obtained the directions for NHAI to deposit toll collections from the project in the SPV's escrow account till the arbitration award. (iii) The payment of interest of 35.83 crore on the loan given by L&T Seawoods Limited, a subsidiary, to Asian Realty Projects LLP, another subsidiary, is overdue. The loan would be repaid from the proceeds of the sale of inventory i.e. residential flats. Due to the sub-optimal bookings in the project, the borrower company could not service interest on the loan. The subsidiary companies have taken reasonable steps for regularisation of the account. Notes forming part of the Consolidated Financial Statements (contd.) (ii) The Parent Company renewed the loan of 168.48 crore to L&T Sapura Shipping Private Limited, a joint venture, as the vessel owned by it was under major repairs since its accident in March 2020 and the joint venture company was unable to generate revenue. The vessel is expected to be re-commissioned in 2022-23. The payment of interest of 3.50 crore on the Parent Company's bridge loan, for repairs of the vessel, is overdue and would be settled out of insurance claim proceeds. (a) Notes with respect to remarks in CARO Report: NOTE [63] Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO Statements Statutory Financial Reports Integrated Discussion and Analysis Report Management Corporate Overview (i) The Parent Company renewed the loan of 24.66 crore to Hi-Tech Rock Product & Aggregates Limited, a subsidiary, as its business was affected majorly due to an inverted duty structure. The subsidiary company has initiated measures to become more cost competitive including redressal of the inverted duty structure through various forums. 4 NOTE [63] (contd.) crore 3 4 5 -[1] - [1] NA Accounts Payable Avn Green Technologies Private Limited 2 [1] March 31, 2021 (b) Balance outstanding with struck off companies: Balance outstanding as at ΝΑ Accounts Payable Walls Infra Solution Private Limited 1 company Relationship with the struck off Nature of transaction Name of struck off company Sr. No. Balance outstanding as at March 31, 2022 - [1] crore 5 6 104.41 1378.83 91.20 Total assets 5 8156.80 5708.30 11703.30 104.41 11703.30 1378.83 Total equity and liabilities 4 2683.37 1726.69 3300.43 56.88 1091.22 92.54 Liabilities 91.20 3 5708.30 6 3.06 70.39 (1.33) Profit before taxation 8 10525.29 5873.68 14406.43 84.72 8156.80 1211.52 Turnover 7 2552.30 1647.37 4142.80 0.09 0.00 11.53 Investments 48.55 1250.84 5308.60 8385.34 Exchange rate on the last day of 31-Mar-22 INR 31-Mar-22 INR 31-Mar-22 INR INR INR INR Currency Mindtree Limited financial year L&T Technology Services Limited 31-Mar-22 31-Mar-22 Financial year ending on Geostructure Private Limited Aggregates Limited Products and L&T No. Particulars Sr. Infrastructure Larsen & Toubro Engineering Infotech Limited Limited 31-Mar-22 3960.50 Date of incorporation/ Date of 01-Jan-08* 43.93 262.61 (1.39) applicable) Other equity/Reserves and surplus (as 2 164.83 21.11 17.53 Acquisition 3.60 0.05 money pending allotment) Share capital (including share application 1 02-Jul-19 14-Jun-12* 23-Dec-96* 09-Dec-98* 25-Nov-20* 25.00 100.00 financial year Acquisition L&T Himachal Sr. 28 27 26 25 Sr. No. 30 crore Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] (contd.) Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures LARSEN & TOUBRO Statements Statutory Financial Reports Discussion and Analysis Report Integrated Management Corporate Overview 612 L&T Power No. Particulars Hydropower Limited Date of incorporation/ Date of financial year Exchange rate on the last day of INR Limited 31-Mar-22 31-Mar-22 INR 31-Mar-22 INR 31-Mar-22 INR INR Note: Date of incorporation INR 31-Mar-22 31-Mar-22 Financial year ending on L&T Realty Developers 29 L&T Parel Project Private Limited Chennai Vision Developers Private Limited Nabha Power Limited Development Limited Currency 100.00 81 100.00 45.39 Provision for taxation 9 0.08 (1746.21) 1091.87 (6.26) 113.06 0.04 283.89 Profit before taxation 456.87 11057.58 159.45 0.07 Turnover 7 9303.95 26.88 0.67 8 Acquisition (0.36) Profit after taxation 66.26 66.26 66.26 6 66.26 % of share holding 15 Proposed dividend - preference 14 10 13 Proposed dividend - equity 12 Interim dividend equity 11 0.08 (1745.85) 807.98 (6.26) 67.67 0.04 Interim dividend preference 22-Jun-10* 12-Sep-07* 09-Apr-07* 0.00 Provision for taxation 9 173.04 92.53 (0.01) 301.82 221.79 2.43 2.86 Profit before taxation 373.42 345.40 4128.88 2.25 Turnover 7 344.75 4.16 0.00 8 2508.58 32.72 10 100.00 100.00 % of share holding 15 Proposed dividend - preference 14 13 Proposed dividend - equity (51.86) Interim dividend preference 26.66 12 Interim dividend - equity 11 146.38 59.82 (0.01) 301.82 218.93 2.43 Profit after taxation (50.15) Investments Investments 1437.69 206.59 (0.04) 1553.60 (604.11) (201.14) applicable) Other equity/Reserves and surplus (as 2 815.46 112.13 0.01 2397.60 3112.70 200.55 money pending allotment) Share capital (including share application 1 29-Jul-97 25-01-22* 14-Aug-08* 0.01 6 3 0.64 643.87 0.00 9977.11 2512.41 0.05 Total assets 5 1437.69 643.87 Liabilities 0.00 2512.41 0.05 Total equity and liabilities 4 510.10 437.27 0.03 6025.91 3.82 9977.11 Date of incorporation/ Date of 6 17358.10 (0.21) Profit before taxation 8 390.68 0.03 6.50 728.93 350.46 43.08 Turnover 7 547.85 0.00 20.66 2508.07 9202.12 0.01 Investments 6 254.43 11.00 4.78 0.01 12 (251.82) Interim dividend equity 11 151.38 0.01 3.58 4.11 218.18 626.56 (0.13) 10 51.95 1.20 6.89 36.25 (0.08) Provision for taxation 9 203.33 Profit after taxation 0.09 22.09 9191.07 8797.09 13.62 applicable) Other equity/Reserves and surplus (as 2 251.82 0.10 5.00 490.18 850.20 2474.04 money pending allotment) Share capital (including share application 1 25-Apr-96* 12-Aug-11* 30-May-11* 19-Mar-13* 01-May-08* 07-Jul-21 0.01 Interim dividend preference 16.52 289.75 11424.02 29.06 Total assets 5 626.56 0.09 22.09 9191.07 11424.02 (0.02) 29.06 4 84.99 0.01 0.57 7850.69 152.89 15.43 Liabilities 3 Total equity and liabilities 13 Proposed dividend - equity (81.96) 13807.21 (61.82) 226.40 0.81 applicable) Other equity/Reserves and surplus (as 2 40.39 2439.00 (4108.37) 2684.17 18.75 0.15 money pending allotment) Share capital (including share application 1 24-Jun-10* 24-Aug-10* 31-Dec-12* 27-Dec-13 84.10 16-Jun-11* (40.54) Liabilities 96171.83 22.39 429.23 1.03 Total assets 5 0.03 17358.10 96171.83 3 22.39 1.03 Total equity and liabilities 4 0.18 19027.47 79680.45 0.11 184.08 0.07 429.23 0.03 30-Apr-96* Date of incorporation/ Date of L&T Metro Rail Larsen & Toubro Qatar LLC Sr. 24 23 22 21 20 19 L&T Arunachal Sr. No. 66.26 66.26 66.26 66.26 74.05 % of share holding 15 Proposed dividend - preference 14 66.26 Acquisition No. Particulars Consultants INR INR 31-Mar-22 31-Mar-22 31-Mar-22 INR 31-Mar-22 INR INR INR 31-Mar-22 L&T Mutual Fund Trustee Limited 31-Mar-22 Exchange rate on the last day of Currency Financial year ending on Limited Hydropower (Hyderabad) Limited Limited L&T Finance Limited Mudit Cement Private Limited financial year Larsen & LT IDPL INDVIT Services Limited 14.78 25-Apr-00 21-Jul-09* 25-Jul-12 14-Jun-99* 01-Feb-16* 1 Share capital (including share application money pending allotment) 151.23 0.00 0.21 1.05 0.42 2 Other equity/Reserves and surplus (as applicable) 166.01 49.90 6.63 17.55 345.21 0.70 3 Liabilities 30.82 47.03 6.98 12.87 140.97 01-Jan-11 4.71 Acquisition 84.22 L&T Infotech Larsen & Sr. No. Particulars Financial Services Technologies Toubro Infotech Canada Limited Larsen & Toubro Infotech LLC and Toubro Infotech South Africa (Proprietary) L&T Larsen & Toubro Infotech GmbH Information Technology Spain SL Inc. Financial year ending on Currency 31-Mar-22 CAD 31-Mar-22 CAD 31-Mar-22 USD Limited 31-Mar-22 ZAR 31-Mar-22 EURO 31-Mar-22 EURO Exchange rate on the last day of financial year 60.49 60.49 75.79 5.23 84.22 Date of incorporation/ Date of 4 Total equity and liabilities 348.06 39.39 4.38 2.31 (0.28) 10 Profit after taxation 109.73 12.03 0.25 5.64 (32.04) 0.22 11 Interim dividend - equity 12 Interim dividend preference 13 Proposed dividend - equity 14 Proposed dividend - preference 15 % of share holding 74.05 74.05 74.05 51.52 74.05 74.05 Note: Date of incorporation 617 Provision for taxation 9 0.22 (32.32) 96.93 13.61 30.63 487.23 5.83 5 Total assets 348.06 96.93 13.61 30.63 487.23 5.83 6 82 Investments 7 Turnover 355.74 350.30 22.25 38.60 168.52 17.89 8 Profit before taxation 149.12 16.41 0.25 7.95 426.70 Integrated Annual Report 2021-22 81 79 Acquisition 05-Jul-06* 01-Jul-12* 08-Jul-07* 29-Nov-06* 01-Jan-05 28-Jun-13* 1 Share capital (including share application money pending allotment) 55.70 19.80 1.98 49.15 5.79 1.26 2 Other equity/Reserves and surplus (as applicable) 199.55 (286.52) (618.41) (40.28) 31.91 (3.85) 34569 Liabilities 215.65 814.51 Date of incorporation/ Date of 1668.96 11.70 245.75 Yard LLC Hydrocarbon Saudi Company Construction General Contracting Larsen & Toubro Electromech Information Technology Services LLC (Shanghai) Co., Company WLL Ltd. Financial year ending on 31-Dec-21 31-Dec-21 31-Dec-21 31-Dec-21 Currency OMR SAR SAR KWD 31-Dec-21 OMR 31-Dec-21 CNY Exchange rate on the last day of financial year 193.08 19.80 19.80 193.08 17.41 275.40 11.45 3.71 1.44 10 Profit after taxation (30.39) 33.59 (0.69) 1.79 (14.98) (2.23) 11 Interim dividend - equity 12 Interim dividend preference 13 Proposed dividend - equity 14 Proposed dividend - preference 15 % of share holding 70.00 75.00 100.00 49.00 70.00 74.05 Sr. No. 77 78 9.72 (6.36) Provision for taxation 9 Total equity and liabilities 470.90 547.79 1052.53 26.28 313.10 8.86 Total assets 470.90 547.79 1052.53 26.28 313.10 8.86 80 Larsen Investments 480.81 463.93 618.54 18.29 720.26 32.19 8 Profit before taxation (36.75) 43.32 3.02 1.79 (14.98) (0.79) Turnover Salient Features of the Financial Statements of Subsidiaries/Associate Companies/Joint Ventures Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] (contd.) crore 01-Feb-19 01-Feb-19 1 Share capital (including share application money pending allotment) 3.37 0.08 0.81 0.55 0.22 0.00 2 Other equity/Reserves and surplus (as applicable) 0.13 0.48 0.64 32.47 (2.61) (4.82) 3 Liabilities 15.18 0.27 7.47 21.54 4.04 11.32 4 01-Feb-19 Total equity and liabilities 01-Feb-19 15-Dec-17 91 92 93 94 Sr. No. Particulars Syncordis PSF S.A. GmbH Financial year ending on Currency 31-Dec-21 EURO 31-Jan-22 EURO Nielsen+Partner Nielsen+Partner Unternehmensberater Unternehmensberater Nielsen+Partner Pte Ltd 31-Dec-21 SGD AG 31-Dec-21 CHF Nielsen&Partner Company Limited 31-Dec-21 THB Nielsen&Partner Pty Ltd 31-Dec-21 AUD Exchange rate on the last day of financial year 84.22 3.67 81.46 55.10 2.24 54.04 Date of incorporation/ Date of Acquisition 01-Feb-19 18.68 0.83 8.92 74.05 GIII 74.05 74.05 74.05 74.05 % of share holding 15 Proposed dividend - preference 14 Proposed dividend - equity 13 - Interim dividend preference 12 Interim dividend - equity 11 (3.40) (0.78) 3.87 (1.14) (0.06) (0.19) Profit after taxation 10 0.80 0.66 0.00 0.00 15 74.05 Note: Date of incorporation 618 54.56 1.65 6.50 5 Total assets 18.68 0.83 8.92 54.56 1.65 6.50 6 Investments 7 90 Turnover 0.92 26.03 66.27 2.16 7.01 8 Profit before taxation (0.14) (0.06) (1.14) 4.53 (0.78) (2.60) 9 30.39 89 Sr. No. 74.05 Acquisition 20-Nov-18* 02-Jan-01* 01-Mar-17* 15-Dec-17 15-Dec-17 15-Dec-17 1 Share capital (including share application money pending allotment) 0.03 0.40 0.00 0.47 0.13 0.01 2 Other equity/Reserves and surplus (as applicable) 9.30 2.55 2.76 26.45 (8.10) (19.82) 3 Liabilities 32.01 0.06 Date of incorporation/ Date of 100.42 84.22 84.22 87 88 Sr. No. Sr. No. Particulars 83 Larsen & Toubro 84 85 86 Infotech Norge Larsen & L&T Infotech S. Toubro LLC DE R.L. DE C.V. Syncordis S.A. Syncordis France SARL 12.02 Syncordis Limited Financial year ending on 31-Mar-22 Currency NOK 31-Mar-22 USD 31-Dec-21 MXN 31-Dec-21 EURO 31-Dec-21 EURO 31-Dec-21 GBP Exchange rate on the last day of financial year 8.69 75.79 3.64 AS Arabia LLC 112.01 4 1.30 0.01 0.90 0.14 0.26 0.05 10 Profit after taxation 4.60 0.01 1.92 9.76 3.59 (0.60) 11 Interim dividend - equity 12 Interim dividend - preference 13 Proposed dividend - equity 14 Proposed dividend - preference 15 % of share holding 74.05 98.76 74.05 74.05 74.05 Provision for taxation 9 (0.55) 3.85 Total equity and liabilities 41.34 3.01 14.78 138.93 11.95 (19.81) 5 Total assets 41.34 3.01 138.93 11.95 (19.81) 19.92 6 7 Turnover 118.18 1.40 50.32 173.82 31.55 44.73 8 Profit before taxation 5.90 0.02 2.82 9.90 Investments 0.05 Fabrication L&T 0.70 Provision for taxation 9 (11.64) 0.29 0.13 109.05 (0.32) 12.35 Profit before taxation 8 Larsen Toubro 101.45 21.37 2230.13 1426.96 Turnover 7 Investments 6 57.11 80.44 4.12 2273.99 0.14 2619.23 Total assets 5 (0.32) 0.00 10 Profit after taxation Discussion and Analysis Report Integrated Management Corporate Overview 616 Note: Date of incorporation 70.00 30.00 72.50 100.00 8 49.00 65.00 % of share holding 15 Proposed dividend - preference 14 Proposed dividend - equity 13 Interim dividend - preference 12 Interim dividend - equity 11 (11.64) 0.29 0.13 87.67 (0.32) 11.66 57.11 Statutory Financial Reports 80.44 2273.99 22-Jun-99* 31-Mar-04* 29-Jan-94* Acquisition Date of incorporation/ Date of 193.08 18.03 5.23 19.80 20.41 193.08 Exchange rate on the last day of financial year 31-Dec-21 OMR 06-Sep-10* 31-Mar-22 MYR LLC Limited 31-Mar-22 31-Dec-21 SAR 31-Dec-21 QAR 31-Dec-21 OMR Engineering Toubro Heavy Toubro (East Asia) Sdn.Bhd. Arabia LLC (Proprietary) Toubro Saudi Toubro T&D SA Larsen & ZAR 13-Jun-96* 07-Apr-08* 1 0.14 2619.23 Total equity and liabilities 4 107.93 75.83 0.39 1898.81 1.40 2129.47 Liabilities 3 (160.20) 3.75 (0.19) 346.72 (1.67) 461.63 applicable) Other equity/Reserves and surplus (as 2 109.38 0.86 3.92 28.46 0.41 28.13 application money pending allotment) Share capital (including share 4.12 Statements 5.82 Provision for taxation Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] (contd.) crore Sr. No. 71 72 73 74 75 76 Larsen & Toubro Kuwait L&T Sr. No. Particulars L&T Modular Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures LARSEN & TOUBRO Mumbai - 400 001. Refer Note 3 consolidated Reason why the associate/joint venture is not 5 Refer Note 1 Description of how there is significant influence 4 50.00% 50.00% 39.28% 42.85% 50.00% 49.00% 14.25% 50.00% Extent of holding % (Effective) Refer Note 3 1,750 24,000 6 21,003 Net worth attributable to shareholding as per 48.18 1. Significant influence is demonstrated by holding 20% or more of the total voting power, or control of or participation in business decisions under an agreement of the investee. Notes: [1] The company is associate of a subsidiary company under Companies Act, 2013. Not considered in consolidation (0.02) 0.10 1.80 (3.34) 15.77 (12.79) Considered in consolidation Profit/(Loss) for the year (crore) 7 (0.04) 0.53 5.54 (3.84) 3.12 12.65 latest audited balance sheet (crore) 2. The Incorporated joint venture is not required to be audited as per regulatory laws in Iran. Hence the management certified accounts have been considered for consolidation. 200 4,40,58,020 9.83 4.50 venture (crore) Amount of investment in associates/joint 7,35,000 L&T House, Ballard Estate, Mumbai - 400 001. Second Fold First Fold * In case your response to any question overleaf is "Poor", kindly share your experience and let us know the reason/ instances to enable us to investigate the matter. In case of any queries, kindly contact our Registrar: KFin Technologies Limited Unit: Larsen & Toubro Limited Selenium Tower B, Plot number 31 & 32, Financial District Gachibowli, Nanakramguda, Hyderabad, Telangana - 500 032 Tel: (040) 6716 2222 ⚫ Toll free number: 1-800-3094-001 Email: einward.ris@kfintech.com -> Fold here AWARDS & RECOGNITION Every year, L&T and its people receive a number of national and international awards that acknowledge its varied accomplishments. Presented by the media, industry associations, independent bodies and academia, they honour the Company's contribution in various spheres of business, technology, financial performance, growth and environmental protection. For details of recent awards, please visit www.Larsentoubro.com 1.09 4.96 5,000 0.18 0.22 90,00,000 Total No of shares (0.85) 1.10 12.72 (8.09) (3.75) 44.73 87.35 Reserves closing 0.78 0.24 0.21 0.41 10.12 44.06 9.00 Total share capital (crore) 0.39 4.42 Larsen & Toubro Limited 3. The associate company is under liquidation process and investment is fully provided in the accounts. S. N. SUBRAHMANYAN Chief Executive Officer & Managing Director (DIN 02255382) I. Overall quality of service provided by - Office of Registrars - Investors Relation Cell you interact with Please rate the hospitality and efficiency of the persons attending to you when -the Registrar -the Company No No No 은은은 Timeliness of response form - by Registrar H. G. - by Company Quality and accuracy of response to your queries and complaints: F. - the Company Please rate the contents and quality of Integrated Annual Report Please rate the contents and quality of the website of the Company Arrangements related to last year E-AGM - the Registrar J. Mumbai G.P.O. B. R. PERMIT No.: MBI GPO - 0049 India stamp necessary if posted in No Postage BUSINESS REPLY LETTER paid by addresssee will be Postage Fold here Fold here Fold here. Signature Not experienced Good Poor* Excellent No Yes Do you have any grievance which has not been redressed Kindly let us know your experience in space provided overleaf 622 E. D. Sivaram Nair A For LARSEN & TOUBRO LIMITED Yours faithfully, Thanking you, We are privileged to have you as our shareholder. It has been our constant endeavour to improve the services to our Investors and in this pursuit, we are once again sending you this Feedback Form, which is a self addressed prepaid Inland letter. We request you to kindly spare some time and return the same to us duly completed. We look forward to your feedback/valuable suggestions. Date: 11th July 2022 Dear Shareholder, Regd. Office L&T House, Ballard Estate, Mumbai 400 001. Tel. No.: (022) 6752 5656, Fax No.: (022) 6752 5858 Email: IGRC@Larsentoubro.com, Website: www.larsentoubro.com CIN L99999MH1946PLC004768 LARSEN & TOUBRO LIMITED Fold here Fold here Secretarial Department (DIN 00101004) M. M. CHITALE Independent Director Company Secretary & Compliance Officer Membership No. FCS3939 SIVARAM NAIR A Whole-time Director & Chief Financial Officer (DIN 00019798) R. SHANKAR RAMAN Company Secretary ח ד. M. No. F3939 Name and address of the shareholder C. Not aware No Are you satisfied with the growth strategy of the Company? Yes Yes Yes Yes B. (iii) Both Long Term or (ii) Short Term (i) A. Do you perceive the Company as creating shareholder value in the: Shareholders Satisfaction Survey Questionnaire (please the appropriate box) Folio No./DP ID & Client ID E-mail ID: Phone No: (with STD code) SHAREHOLDER'S FEEDBACK FORM Mumbai, May 12, 2022 15-Oct-18 (Canada) Ltd 19.51 (0.00) 0.97 9 Provision for taxation 0.02 3.32 0.29 10 Profit after taxation (0.20) (0.59) 13.57 19.51 (0.00) 0.68 11 Interim dividend - equity 12 Interim dividend preference 13 16.89 Proposed dividend - equity (0.58) Profit before taxation 1.34 0.17 0.30 197.14 application money pending allotment) Share capital (including share 1 02-Oct-20 06-Aug-19* 4.84 6 Investments 7 Turnover 1.83 10.77 336.48 369.36 | | | 10.79 8 (0.20) 14 Proposed dividend - preference 15 31-Mar-22 Currency USD 31-Mar-22 SGD 31-Mar-22 MYR 31-Dec-21 TWD 31-Dec-21 CNY 31-Mar-22 USD Exchange rate on the last day of financial year 75.79 55.97 18.03 2.70 11.70 75.79 Date of incorporation/ Date of Acquisition 26-Jun-14* 15-Oct-18 Financial year ending on Ltd Inc. Orchestra Technology, % of share holding 74.05 74.05 74.05 74.05 74.05 74.05 Sr. No. 101 102 3.85 103 105 106 L&T Sr. No. Particulars L&T Technology Services LLC Graphene Solutions PTE Ltd. Graphene Graphene Solutions SDN. Solutions BHD. Taiwan Limited Technology Services (Shanghai) Co. 104 15-Oct-18 51.29 Other equity/Reserves and surplus (as 73.90 73.90 % of share holding 15 Proposed dividend - preference 14 Proposed dividend - equity 13 Interim dividend - preference 12 Interim dividend equity 11 (6.34) 1.22 (0.06) (0.02) (0.13) 43.46 Profit after taxation 10 0.02 73.90 0.01 73.90 73.90 Larsen & Toubro International L&T Valves USA LLC L&T Valves Arabia Manufacturing Services Technology Particulars No. Sr. L&T 110 109 108 107 Sr. No. crore Part A: “Subsidiaries” [as per Section 2(87) of the Companies Act, 2013] (contd.) Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Salient Features of the Financial Statements of Subsidiaries/Associate Companies/Joint Ventures Integrated Annual Report 2021-22 619 Note: Date of incorporation 73.90 22.74 Provision for taxation 9 5.52 0.80 0.17 2.69 486.20 Total equity and liabilities 65.77 2.73 0.55 0.04 2.16 176.49 Liabilities 345 (36.10) (1.06) (1.09) (0.04) 0.23 112.57 applicable) 80.96 5 Total assets 486.20 (6.32) 1.23 (0.06) (0.02) (0.13) 66.19 Profit before taxation 8 167.66 3.07 2 0.58 Turnover 7 101.61 Investments 6 80.96 5.52 0.80 0.17 2.69 665.58 LLC 315.68 5 0.09 11 Interim dividend - equity 12 Interim dividend preference 13 Proposed dividend - equity 14 Proposed dividend - preference 15 % of share holding 100.00 60.99 60.99 Note: * Date of incorporation 620 Corporate Overview Management Integrated Discussion and Analysis Report Statutory Financial Reports Statements LARSEN & TOUBRO Profit after taxation Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures 10 9 0.04 0.15 0.17 4 Total equity and liabilities 601.58 1.97 0.34 5 Total assets 601.58 1.97 0.34 6 Investments 600.82 7 Turnover 0.47 8 Profit before taxation 0.09 0.09 Provision for taxation Liabilities Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] (contd.) A) Names of subsidiaries which are yet to commence operations: Part B: "Associates/Joint ventures" Sr. No. 1 2 3 4 5 6 7 8 International Larsen & Magtorq Indiran Gujarat Sr. No. Name of associates/joint ventures L&T-Chiyoda Seaports (Haldia) Toubro Magtorq L&T Camp Qatar & HBK Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Notes: Salient Features of the Financial Statements of Subsidiaries/Associate Companies/Joint Ventures 621 a) PT Larsen & Toubro Hydrocarbon Engineering Indonesia b) L&T Hydrocarbon Caspian LLC B) Names of subsidiaries which have been merged/sold/dissolved/struck-off. (1) Merged: a) Ruletronics Systems Private Limited (Merged with Larsen & Toubro Infotech Limited) b) Syncordis Software Services India Private Limited (Merged with Larsen & Toubro Infotech Limited) Esencia Technologies Inc. (Merged with L&T Technology Services LLC) d) L&T Hydrocarbon Engineering Limited (Merged with Larsen & Toubro Limited) (2) Sold: 89.75 a) L&T Vision Ventures Limited b) L&T Uttaranchal Hydropower Limited (3) Liquidated/Dissolved/struck-off/ceased: a) Thalest Limited b) L&T Hydrocarbon International FZE d) L&T Infra Contractors Private Limited L&T Halol-Shamlaji Tollway Limited Integrated Annual Report 2021-22 3 0.46 540.91 9.61 23.35 1111.83 5 Total assets 7.03 9.61 23.35 1111.83 6 Investments 84.41 7 Turnover 6.46 1.36 30.44 146.52 8 Profit before taxation (1.01) (4.17) 1.07 7.03 44.13 Total equity and liabilities 708.79 Total assets Date of incorporation/ Date of Acquisition 20-Aug-19* 30-May-19* 28-May-19* USD 75.79 25-Sep-01* 1 Share capital (including share application money pending allotment) 0.04 5.05 3.79 129.61 2 Other equity/Reserves and surplus (as applicable) (0.92) (7.12) (1.61) 273.43 3 Liabilities 7.91 11.68 21.17 4 9 Provision for taxation (0.83) Holdings Limited 112 Mindtree Software (Shanghai) Co. 113 Bluefin Solutions Sdn Bhd Ltd Financial year ending on 31-Mar-22 31-Mar-22 31-Mar-22 Currency Exchange rate on the last day of financial year USD 75.79 Date of incorporation/ Date of Acquisition 24-Feb-16* CNY 11.96 02-Jul-19 MYR 18.03 02-Jul-19 1 Share capital (including share application money pending allotment) 60.63 1.36 0.17 2 Other equity/Reserves and surplus (as applicable) L&T Global Particulars No. Sr. 0.25 1.78 10 Profit after taxation (1.01) (3.33) 0.82 42.35 11 Interim dividend - equity 12 Private Interim dividend - preference Proposed dividend - equity 14 Proposed dividend - preference 15 % of share holding 73.90 100.00 100.00 100.00 Sr. No. 111 13 Limited 0.09 Private 2 0.01 0.70 3.84 0.01 0.00 application money pending allotment) Share capital (including share 1 29-Aug-19 25-Nov-20* 17-Aug-20* 01-Feb-19 01-Feb-19 Acquisition Date of incorporation/ Date of 75.79 75.79 20.64 99.46 74.34 100.70 financial year Exchange rate on the last day of 31-Mar-22 USD 31-Mar-22 USD 31-Mar-22 AED Inc. Cuelogic Technologies Other equity/Reserves and surplus (as applicable) (0.00) 1.03 Facilities LLC USD 75.79 SAR 20.20 60.49 Exchange rate on the last day of financial year CAD Currency 31-Mar-22 31-Mar-22 31-Mar-22 31-Mar-22 Financial year ending on FZE Total equity and liabilities Lymbyc Solutions Inc. 1.09 315.68 4.84 4 3.91 0.45 293.58 76.00 0.06 Liabilities 3 0.92 (1.15) 18.26 13.74 89.75 LTI Middle East FZ-LLC 07-Jul-21 99 company at the year end Shares of associate/joint ventures held by the 3 31-Mar-22 Refer Note 2 31-Oct-09 02-Aug-10 02-Aug-10 28-Jul-04 13-Sep-07 11-Feb-05 26-Oct-94 was associated or acquired Date on which the associate or joint venture 100 Number 1 31-Mar-22 31-Mar-21 31-Dec-21 Contracting Co. WLL 31-Dec-21 Limited Engineering Solutions Private 2 Engineering Leather Projects and Limited Systems Kish PJSC Industries Limited 31-Mar-22 Latest audited balance sheet date 45,00,000 27-Jun-91 2,450 98 97 Larsen & Toubro Infotech UK Limited 31-Mar-22 GBP 31-Dec-21 USD GBP Currency 28-Feb-22 Financial year ending on Ruletronics Systems Inc. Limited No. Particulars Ruletronics Sr. 96 95 98,30,000 Sr. No. LARSEN & TOUBRO 100 9,000 22,000 875 Corporate Overview Management Integrated Discussion and Analysis Report Statutory Financial Reports crore Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] (contd.) Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Limited [1] Statements Integrated Annual Report 2021-22 Boiler manufacturing facility at Hazira, Gujarat crore 1500- 5000 LHS 6000- 39.3% Financial Performance of the Segment crore Gross Revenue from Operations 38.5% 2000 Order Inflow 1360 1000 265 2021-22 2020-21 63 ■International Domestic 2021-22 2020-21 0 0 3.9% 3045 933 95% 500- 95% 4448 1232 91% 2000- 4.6% 49 4183 5% 148 1000- 3000 982 3193 9% 128 4000- 6% 94% L&T-MHI Power Boiler JV and L&T-MHI Power Turbine Generator JV are also looking forward to leveraging upcoming spares and service opportunities in the domestic market and will continue to explore business opportunities in the international market for export orders. Statements It is estimated that the total installed capacity of power plants for which FGDs are to be installed is around 167 GW, involving 440 FGD units. About 80 GW of FGDs have been ordered till date. Tendering of balance units is expected to gain momentum in FY 2022-23 if the current deadlines stipulated by MOEFCC are to be adhered. Business Environment Turbine manufacturing facility at Hazira, Gujarat G15 Integrated Annual Report 2021-22 61 L&T - Sargent & Lundy Private Limited, a joint venture with Sargent & Lundy LLC, USA, which is engaged in the business of providing design, engineering, and project management services for the power sector. L&T Howden Private Limited, a joint venture with Howden Holdings B.V. L&T Howden, is in the business of regenerative air-preheaters and variable pitch axial fans (equipment, after- market spares and services) for power plants. L&T-MHI Power Turbine Generators Private Limited, a joint venture with Mitsubishi Heavy Industries (MHI), Japan and Mitsubishi Electric Corp. (MELCO), for manufacture of Steam Turbine Generator (STG) equipment of capacity ranging from 660 MW to 1,000 MW. The Company is engaged in the engineering, design, manufacture, erection and commissioning of ultra-supercritical / supercritical turbines and generators. The business has the following JVs within its fold: L&T-MHI Power Boilers Private Limited, a joint venture with Mitsubishi Heavy Industries (MHI), Japan - The world's leading power equipment maker, for the engineering, designing, manufacturing, erecting and commissioning of ultra-supercritical / supercritical boilers up to a single unit of 1,000 MW. The facility manufactures ultra-supercritical / supercritical boilers, turbines and generators, pulverisers, axial fans and air preheaters, components of FGD and electrostatic precipitators. The business has project management offices at Vadodara, Faridabad, Dhaka, and various other project sites. The business has an integrated manufacturing facility at Hazira, Gujarat. It is one of the world's most advanced facilities having a manufacturing capacity of 5,000 MW per annum. The business has built on its core competencies and capabilities and has emerged as a major player in new emissions control technologies such as Flue Gas Desulphurization (FGD) in the Indian thermal power plant industry. It now has a sizeable presence in the FGD business. The business executes combined cycle and cogeneration gas-based power projects on turnkey basis. It has an excellent track-record in implementing projects in India and overseas. It is the first company to execute a project with 'F-technology' gas turbine of 250 MW class. The business has developed its own capabilities for executing large and complex power projects, which include engineering, state-of-the-art manufacturing facilities, competent manpower and decades of experience earned in executing large and complex projects within and outside India. The business has a proven track record of delivering complete power plant solutions with scale and sophistication to meet India's growing energy needs. The Indian power sector is undergoing a significant change and that has redefined the industry outlook. Sustained economic growth continues to drive electricity demand in India. The Government of India's focus on attaining 'Power for All' has accelerated capacity addition in the country. At the same time, it is conscious of its goal for substantive reductions in emissions from the power sector. L&T has established itself as one of the leading EPC players in offering turnkey solutions for both Coal and Gas based power plants encompassing every aspect of design, engineering, manufacture, construction, and project management. In addition to undertaking turnkey projects, it also offers equipment and other services for power plants. | POWER BUSINESS 400 MW Bibiyana South Combined Cycle Power Plant, Bangladesh G51-ANK Domestic International Reports Report Discussion and Analysis LARSEN & TOUBRO Statutory Financial Integrated Management Corporate Overview International Domestic Overview The growth of the thermal power sector remained tepid in view of the Government's increasing focus on decarbonisation of the country's power generation mix and hampered economic activities owing to the COVID-19 pandemic. A panel constituted by the Ministry of Power, to update the National Electricity Policy has suggested in its recommendations that new coal-based units can be constructed to replace older units of similar capacities, only after it is convincingly established that it is not viable to meet the projected demand from alternate non-fossil sources. Tenders for FGD Units were delayed and retendered due to increase in input costs resulting in budget constraints for Power producers. Even during this phase of subdued tendering, the business won a FGD order of 1,000 MW from a prestigious Central Utility. Considering the CEA's projections of 267 GW thermal power capacity by FY 2029-30 and in view of retirals of old, inefficient, and polluting power plants, addition of new thermal power capacity is envisaged to continue in the near future, positively impacting the business prospects. expecting to witness an increase in new thermal projects to be tendered out with an aim to support the smooth transition towards clean energy, while maintaining the country's energy security amid rising demand. Several projects are expected to be finalised in the imminent future. An expanding economy, population, urbanisation, and industrialisation means that India sees the largest increase in energy demand compared to any other country. With the emphasis on clean energy and zero emission targets the business continues to face temporary headwinds in the prospects for thermal power. However, the business is Outlook To expand its international footprint, the business is laying emphasis on business development activities in select international geographies like GCC, Southeast Asia and CIS. It has taken steps to strengthen its presence in such geographies to capitalise on the opportunities available in this sector. The business aims actively towards 'Execution par Excellence' to improve competitiveness by continuing the journey of cost- saving and on-time project completion. The focus to achieve QEHS excellence remains of prime importance. It has also accelerated usage of digital levers to increase efficiency and productivity of operations. While the business is targeting the prospects in Coal based power plants and FGDs, it is exploring into various adjacencies such as Life-cycle Management of STG, efficiency improvement of existing plants, manufacturing of quenchers and absorbers, co-firing of Biomass, waste to energy etc. to contribute towards a cleaner environment. Significant Initiatives 2x660 MW Khargone Thermal Power Plant, Madhya Pradesh (India's first ultra-supercritical power plant) 唱 LARSEN & TOUBRO Statements Reports Financial Statutory Integrated Report Discussion and Analysis Though the import and pipeline infrastructure for LNG in India has been improving, domestic as well as imported natural gas continue to be economically unviable for power generation projects and hence near to mid-term opportunities remain lackluster. While the Government has set up a committee last year, to make natural gas available to power plants at a 'reasonably stable price', most of the 24 GW of installed/commissioned gas-based projects in India remain underutilised. Though there are challenges in the international markets such as greater focus on renewables, geo-political dynamics and uncertainty hovering around COVID-19, these markets still offer specific opportunities, and the business is pursuing certain targeted projects with reputed clients and OEMs. Major Achievements Some of the major achievements by the business during the year include: • Achieved Completion of Facilities of 2nd Unit of a Central Utility Project in Uttar Pradesh where the Supercritical boilers were supplied by the Boiler JV The business is also focusing on international markets for opportunities. The inherent advantages of gas-based power projects like fuel flexibility and fast ramp up and ramp down capabilities, make it most suitable for grid balancing along with renewable energy projects. • Received Operational Acceptance for Cooling Tower package of 2nd Unit of a Central Utility Project in Uttar Pradesh • Provisional Acceptance Certificate received from Client for 400 MW CCPP project in Bangladesh. This project has been conferred the Award of Merit by the prestigious US-based publication Engineering News-Record (ENR) . Supply of pressure parts by Boiler JV for its maiden order from the Ministry of Economy, Trade and Industry (METI) of Japan to a power project in Japan 62 Corporate Overview Management • Final Acceptance Certificate received from Client for 225 MW CCPP project in Bangladesh OPM% Domestic The segment's revenue improved y-o-y by 39.3% to 4,448 crore, with a higher execution momentum of opening Order Book. sector, LTSSHF has been certified as the only indigenous producer of large and heavy forgings and thick plates for the prestigious strategic program. The focus of the forgings business remains to fill the gap in the country with respect to manufacturing of critical heavy forgings. The business remains positive in its outlook for order prospects. However, in view of the recent geopolitical situation, the commodity price escalations have created cost pressures on the awarded contracts / tenders in PSU sector due to longer bid to award exposure. Digital and organisation excellence initiatives will result in higher value creation on a long term basis. Financial Performance of the Segment business and Fertiliser & Petrochemicals business. The share of international orders increased to 51% from 35% in the previous year with receipt of a large value international order in the Refinery sector. *crore 4500- 3500 Gross Revenue from Operations 3018 0.7% 3039 *crore Ethylene Oxide Reactor weighing 1157 MT for IOCL's Paradip Refinery 5000- (9.8%) 2500 1085 36% 49% 1492 19.7% 1500 19.0% 51% 1526 500- 0 Order Inflow LARSEN & TOUBRO BOREACTOR Integrated Annual Report 2021-22 Major Achievements 2020-21 In the international market, the business secured breakthrough orders for the supply of Purified Terephthalic Acid Plant Equipment for SASA, Turkey; Ethylene Oxide Reactors for PKN Orlean, Poland and Enter Corp / Fargana Refinery, Uzbekistan; LNG equipment for projects in Europe and Australia, Hydro-Processing Reactors for PEMEX, Mexico and Rodeo Refinery, USA and FCC Reactor Systems for JGC, Japan Basra, Iraq. The business ensured uninterrupted customer supplies throughout the pandemic year by dispatching six complex and heavy Tubular Reactors to various customers in China, six of the World's Heaviest Coke Drums to Mexico, and five Reactors & Heavy Vessels for a Green Diesel Project in USA. In the domestic market, the business secured breakthrough orders for an Oxidation Reactor for IOCL Paradip PTA Project, securing dominance in the Urea Reactor (10th Urea Reactor in a row), Titanium Piping Spool for NRL JV Bio Refinery under Green Initiative arena and Seismic Stopper for 1st High Speed Rail in India. 66 Corporate Overview Management Discussion and Analysis Integrated Statutory Report Reports Financial LARSEN & TOUBRO Statements End Shield The MRU business has seen spectacular growth in FY 2021- 22. The business has booked the largest order for a Gas Processing Unit in the Middle East and an FCC revamp order (IOCL Barauni). Moreover, the MRU team has executed the most complex HPCL Revamp Project 10 days ahead of schedule during the peak of COVID-19's 2nd wave in April/May 2021. The nuclear business team completed the assembly of the ITER Cryostat's (the world's largest stainless-steel, high- vacuum pressure chamber) top lid in the site workshop in France. This was an important milestone in the global nuclear fusion arena as well as a moment of pride for India. The business also created a new global benchmark in nuclear manufacturing by delivering the four 700 MWe steam generators for the Gorakhpur Haryana Anu Vidyut Pariyojana (GHAVP) 1 & 2 project (6-12 months ahead of contractual delivery date despite the COVID-19 pandemic) and dispatched the pair of end-shields for the GHAVP 1&2 project (3 months ahead of schedule). Significant Initiatives Digital and organisational excellence initiatives accelerated the journey to be the global best Heavy Engineering company. Improving competitiveness for products like Renewable Diesel Reactor, HP Screw Plug Heat Exchangers and Heavy Columns & Vessels has been identified as a major initiative to increase market share. Notable digitalisation initiatives include loT-enabled Industry 4.0 Smart Stations in welding & overlay operations, Virtual 3D Layout Simulation and Digi-Eye - for real-time project progress monitoring. Digitalisation in office areas includes automation of design & procurement, supply chain management and estimation system. The 'Quality at Root' initiative was embarked upon by the business to reduce the cycle time of manufacturing by eliminating non-value-added activities. This initiative will ensure a sustainable 'First Time Right' quality culture. LTSSHF has focussed on upgradation of manufacturing technology and achieved very low reject rates for Nuclear and Hydrocarbon sectors. Outlook FY 2022-23 is expected to provide a growth momentum in view of an improved global economic environment. It is expected that the investment in renewables projects, petrochemical and LNG sectors may continue to see an uptrend. The business expects higher investments in Renewable Fuel / Refining projects in USA & Southeast Asia, LNG projects in USA & Middle East and Fertiliser projects in Australia, USA & Middle East. In the domestic segment, the business expects launch of new projects in coal gasification, petrochemical, and specialty chemical industries. The MRU business expects sustainable increased demand. In the domestic nuclear projects, the customer is evaluating fleet procurement in lumpsum turnkey mode to speed up the implementation process. The projects relying on the foreign technology program continue to progress at a snail's pace. Internationally, nuclear energy is gaining traction based on the recent focus on net zero emission targets. The decommissioning and decontamination business opportunity is also picking up momentum due to retiring nuclear power plants in Europe / USA / Japan, etc. The demand for heavy forgings is largely dependent on the outlook of the Nuclear, Defence, Hydrocarbon, Thermal power, and Hydro power industry segments. In the Defence 67 64% The Power segment recorded an Order Inflow of 1,360 crore for the year ending March 31, 2022, registering growth of 38.5% as compared to the previous year with the receipt of an FGD order. Ordering activity has remained subdued during the year largely due to deferral of limited thermal power project opportunities and delay in tendering of FGD orders. 1954 2021-22 Integrated Annual Report 2021-22 65 • The business also has one of the world's largest Forge shops, L&T Special Steels and Heavy Forgings Private Limited (LTSSHF), a joint venture with Nuclear Power Corporation of India Limited. LTSSHF meets the critical custom-made heavy forging requirements of sectors like Special Fabrication Unit (SFU) fabricates critical Titanium Piping Spools, complex internals for Gasification Plants, Loop Reactor, Primary Quench Exchangers (PQE) for the petrochemicals sector. • • Process Plant Internals (PPI) PBU specialises in proprietary process plant internals for Reactors and Ammonia Converter baskets. A large variety of critical internals for advanced refining processes are manufactured using materials like Stainless Steel, Duplex/Super Duplex Stainless Steel, Inconel, Monel, Hastelloy, Titanium, etc. Modification, Revamp & Upgrade (MRU) PBU offers value-added end-to-end solutions for FCC revamps, Crude Distillation Unit/Vacuum Distillation Unit revamps, Multi- shutdown Facility revamps, Urea Reactor Life extension, Coke Drum repairs, Heat Exchanger revamp, Urea Energy saving projects and emergency repairs for the process plant industry. • Nuclear PBU specialises in key equipment for steam supply systems for nuclear power plants. It manufactures key components of the nuclear island like Steam Generators, End-Shields, Pressurisers, Safety Heat Exchangers, Reactor Header Assemblies, Calandria, End Fittings etc. It supplies critical components for Fusion Reactors (ITER), Fast Breeder Reactor, Handling spent fuel (Casks / Canisters) and critical equipment for strategic programmes. Converters, PO reactors, VAM reactors and Fired-tube Waste Heat Boiler packages. • Heat Transfer Equipment (HTE) PBU specialises in Acrylic Acid Reactor System, Ammonia & Urea plant exchangers, High Pressure Heat Exchangers, Methanol • Reactor & Pressure Vessels (RPV) PBU specialises in fabrication of Hydro-Processing Reactors, Tubular Reactors, Gasifiers, Ammonia Converters, Urea Reactors, Coke Drums, Fluid Catalytic Cracking (FCC) Reactor - Regenerator system, Oxidation Reactor, Titanium Cladded Equipment, LNG / Gas Processing Pressure Vessels and Heavy Columns. The business is organised into following Product Business Units (PBUS): The A. M. Naik Heavy Engineering complex at Hazira is a globally-benchmarked state-of-the-art fully integrated, digitally-enabled manufacturing complex. Its capability spectrum not only covers in-house engineering, R&D centres, and world class fabrication facilities, but also includes a highly talented team, committed to a safe and sustainable work culture. The business achieved international recognition through an impeccable track record of executing large complex projects and constantly creating new international benchmarks. L&T's Heavy Engineering business is the global leader in meeting the supply of engineered to order hi-tech equipment needs of Refinery, Oil & Gas, Fertiliser, Petrochemicals and Nuclear plants. The business has been at the forefront of introducing new techniques, products and materials in the manufacturing sector for over eight decades. Pertamina RR Package 4 Overview WASH Tower for IOCL Paradip Statements LARSEN & TOUBRO Statutory Financial Reports Report Discussion and Analysis Integrated Management Corporate Overview 64 The funds employed by the segment at ₹2,281 crore as at March 31, 2022 registered an increase of 12.8% over the previous year, mainly due to the delay in collection of retention moneys, coupled with the build-up in contract assets on account of pick-up in execution momentum. The operating margin decreased to 3.9% from 4.6%, mainly due to the mix of jobs under execution. | HEAVY ENGINEERING BUSINESS nuclear and hydrocarbon. Its custom-made, high-quality products are used across the industrial spectrum. Business Environment The global economic recovery faced significant headwinds with new variants of COVID-19 and geopolitical situations causing supply-chain and logistics disruptions and steep escalation in input costs, which in turn resulted in deferred business opportunities. Overall, the business was successful in navigating the industry-wide domestic and global challenges through organisation excellence initiatives. The business succeeded in reaching out to new customers and making inroads in new territories like Turkey, Poland, and Uzbekistan. OPM% 4000 - 3574 3000- 35% 1234 2000 - 65% 2340 1000- о 2020-21 3223 1658 51% 1565 49% 2021-22 ■International The Heavy Engineering segment recorded an Order Inflow of 3,223 crore for the year ending March 31, 2022, lower by 9.8% as compared to the previous year, mainly due to deferral of orders in the Nuclear Equipment System Domestic International The segment's gross revenue of ₹3,039 crore remained steady compared to the previous year. The share of revenue from international operations has reduced from 49% to 36% in FY 2021-22 since the previous year had a higher execution of overseas refinery orders. The segment's operating margin declined from 19.7% to 19%, mainly due to reduced export incentives under the revised scheme. Funds employed by the segment as at March 31, 2022, at 1,584 crore, was lower by 8.9% over the previous year, mainly attributed to better collections and receipt of GST refunds. 68 NPCIL's biggest expansion of the country's nuclear power capacity by building 10 nuclear power reactors in 'fleet mode' with an aim to reduce costs and speed up construction time is underway. Most of the purchase orders for bulk procurement of critical equipment such as Steam Generators, Pressurisers and Reactor Headers have been placed for the construction of the 10 proposed units of the new indigenous 700 MWe Pressurised Heavy Water Reactors (PHWRS). Further, Fleet procurement for this strategic sector is also expected in next 2 to 3 years and Nuclear PBU is well poised to tap this opportunity. and GCC countries. Increasingly, clients are opting for revamps and deferring greenfield investment projects. The Modification, Revamp, Upgrade (MRU) business, identified as a Lakshya growth initiative has taken off well, both in India The business has observed a surge in demand for Renewable Diesel and Bio Diesel plants (which are more eco-friendly). Enforcement of clean fuel standards - Renewable Energy Directive (RED) II, Renewable Fuel Standard (RFS) & Low Carbon Fuel Standard (LCFS) in developed countries, is providing sustainable growth in demand in this sector. Oil to Chemicals provide additional growth momentum in the mid to long-term in the petrochemical sector (especially in Asia) and LNG sector (especially in USA & Middle East). On the domestic front, the Government has approved multiple mega projects in the refinery and petrochemicals sector and further traction is seen in large scale private projects. The business continues to face foreign competition in domestic projects. To have a level playing field, it is proactively working through industry associations to influence the concerned ministries to mitigate the risks associated with the inconsistencies in the implementation of public procurement under 'Atmanirbhar Bharat' and also to ease / simplify certain processes applicable under BIS & GST. 2020-21 Funds employed by the segment as on March 31, 2022 at 2,167 crore increased substantially over March 2021, mainly due to increase in contract assets in some large value onshore projects. 5% OPM% 59 Integrated Annual Report 2021-22 DOLING WAY A rendering of the 3D Model for IOCL's 3G Ethanol Project Aggressive competition and increasing commodity prices are expected to continue in the near future. The business is geared up to respond to challenges through selective bidding, enhanced cost competitiveness and prudent management of risks. There is an increased thrust on localisation in KSA, UAE and Qatar and the business has taken up significant initiatives to address localisation requirements in KSA, which is the biggest market for the hydrocarbon business presently. With profit-driven growth at the core, the business continues to remain a customer-centric organisation with sustained focus on improved competitiveness to achieve mission of 'Execution Par Excellence'. There are visible opportunities in international markets for both onshore and offshore projects. The business will selectively target focussed geographies in GCC and Algeria and continue to look at product based modular opportunities in Africa and Iraq. Further, the business is building capabilities to address opportunities arising out of new businesses like asset management and offshore windfarms. Financial Performance of the Segment The Hydrocarbon segment achieved order inflows of *30,912 crore, registering robust growth of 74.4% over the previous year with receipt of two large value orders during the year from Saudi Arabia, which led to the share of international orders increasing to 79% from 17% in FY 2020-21. * crore 25000 20000 Gross Revenue from Operations 13.6% Consequent to L&T Hydrocarbon Engineering Limited being merged with the parent entity, the previous year's figures have been regrouped, wherever necessary. Gol intends to maximise production of fertilisers like urea, phosphates, and potash, mainly based on indigenous feedstocks and also decrease import dependency of specialty chemicals like ammonium nitrate and nitric acid to achieve self-sufficiency. India's existing refining capacity of about 250 MMTPA is expected to reach 298 MMTPA by 2025 for which Indian refiners have plans to invest ₹200,000 crore with an emphasis on setting up residue upgradation facilities. private investment in petrochemical and crude to chemicals projects in India, which augurs well for the business. The segment revenue at ₹19,265 crore for the year grew by 13.6% y-o-y, due to pickup in execution momentum, mainly in the Onshore vertical of the business. The share of international revenue in FY 2021-22 was lower at 36% of the total revenue of the segment as compared to 47% in the previous year, with a lower opening international Order Book. The segment's operating margin decreased to 8.7% from 9.2%, mainly due to input cost inflation and change in job mix. Corporate Overview Management Discussion and Analysis Integrated Statutory Report Financial LARSEN & TOUBRO Reports Statements HITACHI New 48" Crude Transit Line from North Kuwait to CMM (TL-5) Project for KOC, Kuwait and modular solutions, driving localisation efforts in key geographies where the business can have a long-term presence and digitally-enabled operational excellence. Outlook The ongoing geo-political conflict between Russia and Ukraine is leading to rebalancing of the world economic preferences. Consequent to the recent geo-political changes, the commodity prices which were already on a high, have spiralled further, resulting in a high inflationary trend across global economies. This resulted in sharp increase in the Brent and WTI crude oil prices. The US Energy Information Administration (EIA) expects the crude oil price to remain higher than USD 100 per barrel. With the rebound in oil prices and increased focus by the Governments to ensure energy security, Oil & Gas capex is expected to continue. ONGC has planned a capital expenditure of 29,950 crore during the financial year 2022-23. Development of the Deepwater fields in the East Coast of India will continue, which will provide opportunities for the business, in addition to the existing products like subsea structures and pipelines. With the hardening of global crude prices, the focus will be on the development of small and marginal fields by private players. This will offer Transportation & Installation (T&I) opportunities in India and Southeast Asia. The Government of India (Gol) has planned to spend about 750,000 crore in oil and gas infrastructure over five years. State-owned oil companies are planning to spend about 110,000 crore in the financial year 2022-23. After a gap of several years, there are strong indications of green shoots in 19265 6911 36% With an expected increase in the demand for petrochemical products, investments in integrated Refinery-Petrochemical as well as Oil to Chemical (02C)/ Crude-to-Chemicals (C2C) projects are expected to be triggered. The draft LNG policy announced by the Gol aims to create LNG regasification capacity of about 70 MMTPA by 2030 from the current level of 42.5 MMTPA. Further, Indian Government is planning to invest 70,000 crore to expand the gas pipeline network across the country. The Gol has also set up an ambitious target to gasify 100 million tonnes of coal into value added products like fertiliser / methanol by 2030 towards the announced net zero targets by 2070. 15000 15000 10000 83% 14785 5000 60 74.4% 30912 24353 79% 6559 21% 2021-22 2020-21 Domestic International 16964 2021-22 2994 17% 0 20000 47% 10000- 9.2% 8.7% 5000- 0 12354 64% 53% 8945 8019 crore 40000 35000 30000 25000 17729 Order Inflow 823 8079 3500 64 1% 24% 2500 20.2% 3226 419 13% 6000- 22.2% 87% 1500- 3410 (5.4%) Gross Revenue from Operations Reports >100% 76% Financial LARSEN & TOUBRO Statements Air Defence Fire Control Radar in India' visions. At the strategic level, the revised Draft Defence Production & Export Promotion Policy (DPEPP) has been published and extensively deliberated to incorporate specific inputs from industry stakeholders. This policy focuses on eight pillars of reforms and embeds the vision and roadmap towards achieving significant self-reliance in the Defence sector by FY 2025-26. Over 18 programmes have been identified for acquisition under the 'Make' route of DAP 2020 which focuses on indigenous design, development and realisation using Indian resources. The development and R&D is expected to take off with the formation of SPVs with the DRDO. The MoD also assures grant of a level playing field in naval shipbuilding and inflation linked escalation on long-term contracts of tenures beyond three years. Contracts worth 500,000 crore are expected to be placed on the Indian industry within the next five years for the procurement of systems / platforms covered in the Positive Indigenisation Lists. The Government has announced several reforms towards commercial exploitation of opportunities in the space sector. The autonomous promotion and regulatory body, IN-SPACE (Indian National Space Promotion and Authorisation), is working towards handholding and promoting private industry in the space sector. NSIL (New Space India Limited), a PSU under the DOS, is also striving towards working on areas of launch vehicles and satellite production as well as services through private consortiums. The Space Policy is under review by the Gol. It is designed to create a watershed moment for facilitating the role of the private industry and opening up of the space sector. This policy is expected to be released soon. The business has been a trusted industry partner to India Space Research Organisation (ISRO) and has contributed to indigenous capability of the Indian space sector for over five decades. The reforms announced in the space sector will enable private sector companies - like L&T, which has built, and enhanced their capabilities over the last few decades - to take on the complete manufacture and integration of launch vehicles as well as satellite bus manufacturing and associated services. 73 Integrated Annual Report 2021-22 Tactical Unmanned Aerial Vehicle L&T TUAV Financial Performance of the Segment crore *crore 10000 8000 Order Inflow 4500 4000- | IT & TECHNOLOGY SERVICES 99% Funds employed by the segment as on March 31, 2022, at 1,115 crore decreased by 46.6% y-o-y, on account of better collections on completion of deliveries across some key projects and receipt of customer advance on large value new orders. 74 Corporate Overview Management Integrated Statutory Discussion and Analysis Report Reports Financial Statements LARSEN & TOUBRO LTI 565 LTI Headquarters, Powai, Mumbai Integrated Statutory Report The IT&TS business segment consists of: a) Larsen & Toubro Infotech Limited and its subsidiaries (LTI): LTI is a global IT Services company positioned at the convergence of digital and physical worlds, with real-world expertise and client centricity. It was founded in 1997 as a subsidiary of Larsen & Toubro Limited and got publicly listed in 2016. b) Mindtree Limited and its subsidiaries: Mindtree provides end-to-end IT and Digital solutions for business transformation through cloud services, data, intelligence, and enterprise transformation & automation. L&T acquired controlling interest in Mindtree in June 2019. L&T Technology Services Limited and its subsidiaries (LTTS): It is a global leader in Engineering & R&D (ER&D) services. LTTS delivers value through Engineering & Technology via its offerings in product engineering, manufacturing engineering, operations engineering and engineering consultancy. The business was incorporated in 2012 and got publicly listed in 2016. The Boards of LTI and Mindtree have approved the scheme of merger of the two companies subject to receipt of respective shareholders, creditors and regulatory approvals. The operating margin declined to 20.2% from 22.2% in the previous year, since previous year had the benefit of release of cost savings in some key projects that got completed. 8015 The segment's gross revenue of 3,226 crore declined by 5.4% compared to the previous year with some large value jobs in the portfolio viz. K9 Vajra, nearing completion in FY 2020-21. Share of international revenues decreased to 13% from 24% in previous year with the tapering of an international order in shipbuilding. International 2587 2807 2468 0% 2000 8 500- 0 100% 2460 0+ 2020-21 Domestic 2021-22 International OPM% 2020-21 Domestic 2021-22 With receipt of some large value orders in the Shipbuilding business, the Defence Engineering segment has recorded a substantial growth by bagging orders worth 8,079 crore as compared to 2,468 crore in the previous year. Discussion and Analysis LARSEN & TOUBRO Corporate Overview • Modern shipyard at Kattupalli (near Chennai) Besides these dedicated facilities, the business also operates a facility at Visakhapatnam under the Government Owned Contractor Operated (GOCO) model. These Work Centres are complemented by R&D Centres at Powai and Bengaluru, Design & Engineering Centres for submarines and warships at Powai and Chennai respectively and a Design & Engineering Centre for weapon and engineering equipment at Powai. The business is headquartered at Powai, Mumbai. The business is structured into two strategic business groups (SBGs): 1. Defence & Aerospace 2. Defence Shipbuilding Defence & Aerospace Since its inception, the Defence and Aerospace (D&A) business has built a portfolio of wide ranging indigenously designed & developed products, systems, solutions, platforms and technologies through in-house efforts 69 Integrated Annual Report 2021-22 L&T has provided critical subsystems for most of India's space missions as well as by teaming up with the DRDO. It has also participated in the Indian Navy's indigenisation program for the development of a range of naval engineering systems and weapon systems within the country. Subsequently, L&T Defence built a wide-ranging portfolio of land-based weapon and engineering systems for the Indian Army. To date, the SBG has indigenously developed more than 250 defence products out of which more than 50 of them have been delivered in serial production mode. The business model is uniquely differentiated through its focus on in- house technology and product development, innovation for serial production, mature and equated partnerships with global majors and through-life support offerings. These enable the business to maintain its market leadership position (in the private sector) in an environment where the Government is aggressively pursuing the indigenisation agenda through 'Atmanirbhar Bharat Abhiyan'. The business also has a Joint Venture (JV) with MBDA, a global leader in missiles and missile systems. The JV is well positioned to indigenously offer advanced missile systems to the Indian Armed Forces. Defence Shipbuilding L&T's Shipbuilding business offers end-to-end solutions for design, construction of defence ships and refit services. The business owns and operates a greenfield mega defence shipyard at Kattupalli, near Chennai, located across a sprawling 980-acre complex. The Kattupalli Shipyard is India's largest shipyard, considering just the first phase spread across 150 acres that has been operational for nearly a decade. The design and construction of the yard is modelled to adapt global best practices, such as modular fabrication, construction under covered shops, use of a Ship-Lift with dry and wet berths, etc., to enable simultaneous construction of different classes of vessels until near completion on land, and then launching them on water through the Ship-Lift. It is the only Indian shipyard with Industry 4.0 practices embedded, enhancing construction efficiency, cycle time and build quality. A dedicated Warship Design Centre at Chennai is equipped with the latest integrated 3D design, analysis, and Product Lifecycle Management tools, and interfaced with project management and ERP systems, in line with global best practices. The Kattupalli Shipyard has been largely engaged in new builds and refits/repairs of defence ships of the Indian Navy and Indian Coast Guard. Since 2010, the business has designed and constructed 67 defence vessels and delivered them ahead of schedules, these include a floating dock for the Indian Navy, Interceptor Boats and Offshore Patrol Vessels for the Coast Guard as well as five high speed Border Guard boats for a friendly nation. The shipyard has also supplied design and material kits for seven vessels to be built there to empower that country with indigenous shipbuilding using latest shipbuilding practices and processes. The unique capability of the business to achieve on-time or ahead of contractual delivery performance in all the contracts for defence vessels is a benchmark in the Indian shipbuilding industry. The shipyard has a track record of delivering first-of-class OPV vessels on / ahead of schedule and with design and construction maturity and in-built quality. A global benchmark was attained by the Yard in the sea acceptance trials of a 2,130 MT class offshore patrol vessel by completing the entire acceptance trials in the maiden sea sortie of the vessel to affirm its design and build quality. • Strategic Electronics Centre at Bengaluru 70 Aerospace and Missile subsystems manufacturing at the Centre of Excellence for Advanced Composites at Coimbatore • Integrated Statutory Financial Corporate Overview Management Discussion and Analysis Report Reports LARSEN & TOUBRO Statements Short Span Bridging System | DEFENCE ENGINEERING BUSINESS Overview L&T entered the strategic Defence sector in the mid-80s leveraging its precision equipment capabilities. This was well ahead of the opening up of the sector for private industry participation in 2001. During the preceding one and a half decades, L&T has been associated with the Defence Research & Development Organisation (DRDO) and Indian Navy's indigenisation programme. With an offerings portfolio of technologies, products, systems, platforms and solutions, the business provides design-to-delivery solutions across chosen defence segments with a focus on indigenous design, development and production of naval (submarines and warships) and land platforms (armoured systems, howitzers), weapon systems, engineering systems, missile & space launch vehicle subsystems, sensors, radar systems and avionics. These are complemented by R&D and Design & Engineering Centres for targeted platforms, systems, and solutions development. The business operations extend across two R&D centres, three Design & Engineering Centres, and six production centres across India: • Submarine hull-building facility and an armoured systems manufacturing, integration & testing facility at L&T's A.M. Naik Heavy Engineering Complex at Hazira, Gujarat • . Aerospace Manufacturing shops for India's space launch vehicle subsystems at the Precision Manufacturing & Systems Complex, Coimbatore Management Corporate Overview Discussion and Analysis 71 Integrated Annual Report 2021-22 41 Offshore Patrol Vessel for Indian Coast Guard INDIAN COAST GUARD • Supplied 223 Medical Oxygen Generation Plants within 75 days of having been called upon to cater to the healthcare requirements during the COVID-19 pandemic • New benchmarks set up by work centres in terms of serial production of systems and equipment. Noteworthy ones include delivering Combat Engineering Systems (bridging systems, air drop platforms), Air Defence Systems, attaining operational efficiencies through innovation in manufacture and maintenance of safety in operations across work centres aided by digitalisation and automation • The R&D and Design & Engineering teams continue to focus on emerging technologies to develop a range of products and solutions that are intended to future proof the business. Unmanned systems across four domains (Under Water, Surface Warfare for Navy, Land, Air Domains), Augmented Reality (AR) and Virtual Reality (VR) based solutions and offerings are being emphasized to add a significant value to the business as a differentiator Significant Initiatives Evolving through collaboration, the business has identified and signed MoUs / agreements with strategic partners to enhance business opportunities both in domestic and international markets. R&D and innovation has been the backbone of the defence engineering business since inception, and the business continues to invest in R&D to develop new-age technologies and products. The business has been building a strong position in digital design since the early-90s and has attained proficiency in Industry 4.0 across its multiple R&D, Design & Engineering Centres and Production Work Centres that extend from equipment and systems to the building of complete platforms, such as Warships, Submarines and Armoured Systems. Focused digital initiatives that were innovated and implemented during the pandemic to overcome associated challenges were adapted to daily operations and the same have been institutionalised to gain higher operational efficiencies. These have also helped in achieving business continuity and meeting key deadlines, evolution of innovative technologies and processes that could adapt to provide through life support, training, digital quality assurance, trial evaluation and acceptance. Outlook Against the backdrop of recent global events, the reinforcement of the importance of self-reliance in a strategic sector like Defence has increased. This could result in enhanced spending on the Defence sector. The Government's series of reforms in the Defence sector to enhance indigenisation has been given a fillip by the 'Atmanirbhar Bharat' initiative to innovate and build differentiation in what the Armed Forces deploy. The budget allocation for domestic procurement has been identified by the Government and is expected to be realised in a time-bound manner through the acquisition of the platforms, systems, and equipment as mentioned in the Positive Indigenisation Lists. The recent experiences that have taken place at the country's borders have catalysed the innovative adaption of existing weapons / platforms for high-altitude operations as well as development of indigenous weapons/platforms to combat adverse environmental conditions. This has brought a renewed focus on expeditious completion of trials of systems and their accelerated induction into services. The MoD has announced significant reforms at different levels as a part of the 'Atmanirbhar Bharat' and 'Make 72 The shipbuilding business won the contract for Construction of Multi-Purpose Vessels (MPV) and conclusion of negotiations for Cadet Training Ships (CTS) as well as Special Pontoon for DRDO, amidst stiff competition Management six P-75 (1) Submarines by collaborating with a chosen Foreign Collaborator • Successful delivery of multiple land and naval weapon launch systems, engineering systems and missile systems to the Indian Armed Forces. The 10m Short Span Bridge and Medium Range Surface to Air System were inducted by the Armed Forces in July 2021 and September 2021 respectively • The business was selected as a 'Strategic Partner' to the Indian MoD and received RFP for Construction of Integrated Report Statutory Financial Business Environment Reports Statements 11012 FDN-2: Floating Dock built for the Indian Navy While being actively associated with the defence sector, the business has a policy of not manufacturing any explosives or ammunition of any kind, including cluster munitions or anti-personnel landmines or nuclear weapons or components for such munitions. The business also does not customise any delivery systems for such munitions. Business Environment With the Government of India initiating substantive policy reforms since past 3 years and allocating higher budgets for indigenous procurement, the macro picture has become more positive for the business. The determined push by the Gol under 'Make in India' initiative and 'Atmanirbhar vision' saw positive traction towards indigenous production by building a robust acquisition pipeline of potential orders with preferential categorisation in favour of indigenous acquisition by grant of Acceptance of Necessity and accelerating issuance of RFPs. The Defence capex budget witnessed a systematic increase (~12% y-o-y) in the budget year FY 2022-23 over the previous financial year and the allocation for procurement from domestic industry has witnessed an enhancement from 58% to 68% of the total capital procurement budget (71,000 crore in FY 2021-22 to 84,600 crore in FY 2022- 23). Also, the allocation for acquisition for the private sector has been enhanced from 16,000 crore to 21,150 crore (25% of domestic acquisition allocation). A major highlight announced in the Union Budget 2022 is the opening up of Defence Research & Development funding to the private sector, start-ups and academia with an earmarked allocation of 25% of the total R&D budget (1300 crore) for fresh cases. This would help create intellectual property (IP) within the country, helping reduce cost of indigenously developed and manufactured goods and solutions and also facilitate exports that can unconditionally be done with the Company's own IP. Given L&T's track record in R&D, the business would be in a best position to exploit this initiative and take up development of mega platform projects with large order value potential over coming years. The concluding part of the year witnessed widescale turbulence across the world on account of geopolitical challenges. However, the business has built in resilience in its supply chain to address the risks on account of these challenges. The 'Atmanirbhar Bharat' initiative of the Government also aids in becoming self-reliant with Indian resources and assets for the business. Major Achievements During the year, the business has achieved multiple successes and proud moments, uniquely reaffirming L&T's positioning as a 'nation-builder' through a series of Make-in-India programs. These include: . According to NASSCOM, the Indian IT Technology industry crossed the USD 200 Bn revenue mark in FY 2021-22 to touch a record USD 227 Bn. Technology was the panacea Strategic Systems Complex for weapon and engineering systems and sensors at Talegaon near Pune LTI Delivery Centre, Warsaw, Poland Revenue 2021-22 2020-21 0 5000 10000 15000 23.6% 23.5% 20000 OPM% 25000 30000 35000 40000- crore L&T INFOTECH March 31, 2021, mainly reflecting an increase in volumes by way of increase in customer receivables and higher investible surpluses. 32474 26.8% Gross Revenue and OPM % Financial Performance of the Segment 25619 OPM = EBIDTA The segment recorded a gross revenue of 32,474 crore for the year ended March 31, 2022, registering a growth of 26.8% over the previous year, reflecting the improved growth opportunities in the sector. International revenue constitutes a steady 92% of the total revenue of the segment. In USD terms, the revenue at USD 4,393 mn for FY 2021-22 reported an industry leading growth of 26% over the previous year. The business has a strong presence in each of the following verticals: Banking and Financial Services: LTI offers a full array of digital banking services that connects to end customers through multiple digital channels. It delivers business value through services, such as data driven transformation, risk and regulatory compliance, digital enablement, innovation partnerships and NexGen ADMS services across retail banking, payments, trade finance, capital markets, asset/wealth management, custody and settlements. Insurance: LTI helps insurers solve complex business problems such as digital adoption, customer experience management, speed-to-market, underwriting profitability, operational efficiency, distribution effectiveness and claims optimisation. Its domain expertise spans across the insurance value chain, including intermediaries, carriers, reinsurers, regulators, and Independent Software Vendors (ISVS). 77 Integrated Annual Report 2021-22 mosaic automution mosaic LTI Let's Solve The funds employed by the segment as on March 31, 2022 at 26,441 crore increased by 12.8% compared to Manufacturing: This sector includes Industrial Manufacturing, Automotive and Aerospace arenas. LTI leverages its rich domain knowledge in industrial machinery manufacturing to help Plant Equipment and Industrial Machinery (PEIM) companies spur innovation and reduce time-to-market. It provides customized IT solutions for PEIM companies in key areas, including supply chain management, shop-floor-to-top-floor integration, productivity improvement, serialisation and traceability, and production analytics. Energy and Utilities: LTI is at the forefront to help the traditional energy companies to not only improve operational efficiencies and sustainability but also break away into the newer green energy solutions by providing next generation Energy Industry IT Services and Solutions across Upstream, Midstream, Downstream and Renewables. With thorough industry know-how and technology expertise, it has delivered powerful real-time advanced analytics and decision support capabilities to several global clients. Consumer Packaged Goods (CPG), Retail and Pharma: LTI enables CPG companies to transform their businesses with robust IT services and solutions. By partnering with LTI, customers can effortlessly launch targeted, omni-channel offers and promotions for consumers, while streamlining operations to boost profitability. LTI enables retailers to streamline operations using technologies such as IIoT and Cloud and derive actionable consumer and business insights by harnessing advanced analytical tools. Hi-Tech, Media and Entertainment: LTI has helped high tech clients with IT solutions to realise substantial synergies from their M&A activities by structured IT portfolio rationalization, complex digital integration and digitisation of core processes. It further enables media entities to offer superior user experiences across platforms and helps them enhance content creation, distribution, and rights management. By partnering with LTI, customers can leverage multiple distribution models effectively for higher monetization of the content. Its proven expertise in new media and strong digital technology credentials can help achieve faster time-to-market and establish leaner operations. LTI has offerings across the following service lines: Application Development & Maintenance and Testing Enterprise Solutions . Cloud Infrastructure & Security • Analytics, Al & Cognitive Enterprise Integration & Mobility Major Achievements LTI has been ranked 22 among the top 25 most valuable IT services brands in the Brand Finance IT Services 25, 2022 ranking. It's brand value reached USD 1.1 Bn, an exceptional growth of 83% since 2020. 78 The OPM % was maintained at the previous year levels despite increase in employee costs. Mosaic Experience Centre, Powai, Mumbai Statements Reports LARSEN & TOUBRO that enabled corporations to not just keep the lights on, but also repivot their business models to an online / virtual mode, adapt to changing market dynamics and customer needs and enable collaboration in a distributed work model. During the year, the industry saw USD 30 Bn of incremental revenues and an overall growth rate of 15.5%, the fastest since 2011. All sub-sectors of the industry recorded double- digit growth. The performance of the IT sector was boosted in FY 2021-22 by the rapid pace of digitalisation and higher discretionary expenditure by enterprises. India continues to be one of the preferred destinations for setting up Global Capability Centres (GCCs). Larsen & Toubro Infotech (LTI) is a global technology consulting and digital solutions company helping more than 485 clients to succeed in a converging world. Each day across 33 countries, with workforce of over 46,000, LTI enables clients to improve the effectiveness of their business and technology operations and deliver value to their customers, employees, and shareholders. NASSCOM further reports that the current global pandemic has accelerated the growth of demand for digital transformation and other software-led business journeys. This has had a direct, positive impact on offshoring for key R&D destinations, including India. 75 Integrated Annual Report 2021-22 1 10 Servers Tactical UAT 3 0 India has also emerged as a global hub for digital talent with more than 5 mn tech workers and is the largest employer within the private sector. The industry's 'people first employee-centric approach saw tech firms quickly adapt to hybrid work models and scale up capability building programmes. The industry recorded nearly 10% estimated growth in direct employees in FY 2021-22, with the highest- ever net addition of approximately 450,000 personnel to its employee base. LTI's state-of-the-art delivery Center in Johannesburg, South Africa Servers Statutory Financial Integrated Report Discussion and Analysis Management Corporate Overview 76 Overview Compliance & Litigation risks are a given when businesses operate out of multiple regions and specially when the regulations across the globe are changing and evolving constantly. It is imperative to be compliant with these requirements, to avoid the possibility of legal liabilities and reputational damage. System-based controls are implemented to keep the organisation compliant with the regulations globally. The businesses also engage consultants across the globe who provide support in adhering to statutory requirements and complying with the changing regulations. Similarly, litigation is handled by experienced in-house legal teams along with external counsels. Cyber Security is a major risk as businesses move to newer areas of engagement such as social, mobile computing and cloud computing. Hacking, ransomware, social engineering, and other cyber-attacks represent ever present threats to data security and system availability. Tighter measures are put in place to ensure adherence to set policies and practices. Cybersecurity assessment from third parties provide enhanced confidence in cybersecurity measures. End point security controls are deployed to ensure levels of security are not compromised while working remotely. Employees remain the prime asset for any technology business. It is critical for the organisation to attract and retain skilled employees and manage the industry wide issue of attrition. The concern is contained with employee friendly policies, framework to reward high-potential employees, innovative programmes for employee engagement, learning & development plans and career growth options. Such holistic approaches and interventions are implemented to limit attrition. Client relationships are at the core of the IT Services business. The businesses enjoy a history of high client retention and continue to derive a significant proportion of revenue from repeat business built on the successful execution of prior engagements. This exposes the business to the risk of revenue concentration with top customers. Concentrated efforts are taken to expand the client base and geographies, to cross-sell and up-sell to incrementally achieve broad-based growth and increase the value-add of deliverables. Risks and Concerns A sense of heightened immediacy, calling for rapid delivery schedules measured in months as opposed to years earlier, translates to a growing focus on implementing new-age customer-centric solutions through robust, data-driven business models. The scenario further got strengthened by a rapid on-ground shift towards vehicle electrification, smart manufacturing practices, digital products and solutions, state- of-the-art healthcare options, streamlined connectivity, and a sustainable approach to business operations. These key trends will help shape the global ER&D ecosystem, direct investment decisions, and define growth plans for the future. Foreign Exchange risk is one of the key risks as major revenue is denominated in foreign currency. This risk is mitigated by a dynamic hedge management policy and strategies that are periodically reviewed in the light of macroeconomic changes. a) Selected by a European company providing digital marketing solutions for a global, end-to-end managed services deal spanning across the internal IT department. The scope includes business applications maintenance, development and support of cloud and data platforms, as well as end-user services b) Selected by one of the largest global veterinary care practices and chain of North American pet clinics, a new logo, for a managed services deal involving cyber security and modernisation of IT infrastructure including migration to cloud to gain operational efficiencies and transform clinic management and support c) Selected by a Global Fortune 500 financial services company for an end-to-end managed services engagement involving transformation, governance and support for middleware and data as part of their global technology function d) A Global Fortune 500 corporation, a leading provider of ratings, benchmarks, analytics, and financial data, has selected LTI as its primary partner for an engagement involving data and digital services to integrate its data platforms with its recent acquisition e) Selected by a Global Fortune 500 consumer goods company as their strategic partner for data and analytics work to transform and gain insights across their most critical business functions of manufacturing, supply chain, marketing, and creation of a metadata hub f) Engaged by a key Government body in the public healthcare space to develop an eco-system and technology infrastructure providing, storing, and improving access to relevant public data and supporting public health insurance programmes Significant Initiatives LTI acquired Cuelogic Technologies, a digital engineering and outsourced product development company with over 300 people headquartered in Pune, India. Founded in 2010, Cuelogic has built capabilities in digital engineering and primarily focuses on developing cloud native web and mobile applications, modernisation, and runs an innovation lab as a service for its clients in the USA and India. Cuelogic works with enterprise clients on multiple facets of digitalisation such as UX Consulting, DevOps, Al Consulting, IoT, Applications Modernisation, Cloud Architecture & Integration. LTI launched its hybrid model of working called Yin-Yang, embracing a next-generation hybrid workplace where Work from Home and Work from Office will coexist to help employees benefit from both work environments. Integrated Annual Report 2021-22 LTI is now a signatory to the Ten Principles of UN Global Compact. These principles lay down the operating guidelines for a company to meet their fundamental responsibilities in the areas of human rights, labour, environment and anti-corruption. 79 WITH IN IN IN IT IN Mindtree West Campus, Bengaluru Outlook Digital transformation continues to be a strategic priority and key area of focus for Banking and Financial Services firms. Technology investments are across large and medium sized banks and across sub-verticals such as capital markets, payments, retail banking, wealth management etc. Firms are investing in improving customer experience by shrinking the core and building a layer of service-oriented interfaces. This gives them the agility to launch a new product and offer a higher degree of straight-through processing. In the Insurance sector, major initiatives will be focused on enhancing online user experiences with an increased emphasis on hyper-personalisation and data-driven ecosystems as well as remote distribution networks, augmented reality and loT. The manufacturing industry is likely to continue to see an influx of investment in automation and digital solutions that support increased agility and better risk management. Tools that capitalise on the use of data will also be a key. The spend on energy transition and sustainability could go up even more in FY 2022-23. LTI launched Fosfor, the Data-to-Decisions Product Suite, an integrated suite of products across the data-to-decisions lifecycle signifying LTI's intensified focus into the multi-billion- dollar Al and data products market. As Fosfor, LTI brings together the synergies of erstwhile Mosaic and Leni products uncovering unlimited opportunities for enterprises with next- generation Al products. FY 2022-23 growth estimates for the technology industry reflects the optimism of FY 2021-22. According to NASSCOM Tech CEO Survey 2022, 72% of Tech CEOs indicate 2022 tech spend to be in line with 2021. Most respondents also expect to maintain or grow their hiring, in line with previous year. The industry has also set a target to touch USD 350 Bn revenues by FY 2025-26 with an annual growth rate of 11-14%. Tars Under the O The consumer-packaged goods, retail and pharma sector is likely to see continued investments in the data platforms and digitalisation initiatives with a focus on resilient supply chains and consumer experience led by direct-to-consumer strategies. With the increased demand for digitisation from companies around the world, the demand for talent having requisite skillsets has increased significantly. Campus hiring programmes and the flagship training program for fresh graduate hires have been rejuvenated to accelerate fresher Significant Initiatives Mindtree is an Elite partner of ServiceNow and was recognised as the 2022 ServiceNow Americas Emerging Service Provider Partner of the Year. Its dedicated ServiceNow practice has carried out large-scale transformational engagements. In addition to upskilling and reskilling resources across various ServiceNow certification streams and building competencies beyond ITSM, Mindtree has also invested heavily in establishing a dedicated ServiceNow engineering team and centre of excellence, developing a broad range of custom applications and accelerators to drive function-specific as well as enterprise ServiceNow solutions. • ServiceNow Integrated Annual Report 2021-22 • SAP partners that have demonstrated technical proficiency and proven success in specialised solution and service areas. Immersive Aurora, Mindtree East Campus, Bengaluru AUTOMOTIVE SPHERE RETAIL SPHERE WHERE POSSIBILITIES COME ALIVE Statements LARSEN & TOUBRO Statutory Financial Reports Report Discussion and Analysis Integrated deployment to client projects. Mindtree Edge, a unique learn- and-earn program for BSc and BCA graduates continues to progress as planned with a focus on investing in future-ready talent. Management The Future ways of working (FWOW) program is aimed at creating flexible, more sustainable workplace and working model centered on clients and Mindtree minds. The business has devised F-O-R (Flexi, Office or Remote) working model which is the core of the FMOW program. As part of 'Work of the Future' talent strategy, tapping into tier 2 and tier 3 cities and setting up delivery centres in Coimbatore, Warangal, etc., has assisted not only in terms of managing the demand, but also in managing attrition. Key deal wins L&T Technology Services Limited (LTTS) is a leading global pure-play Engineering Research and Development (ER&D) services company. It offers consultancy, design, development, and testing services across the product and process development life cycle. Overview L&T TECHNOLOGY SERVICES mergers and acquisitions will continue to navigate the business towards a more profitable growth path. To support the next phase of growth, Mindtree is making supply-side more efficient by driving a talent mindset across the organisation and making talent an integral part of the organisational fabric, thereby strengthening employee value proposition. The targeted global investments across partnerships, large deal solutioning, white space opportunities, innovative working and delivery models, Go- To-Talent strategy, gaining mindshare from key stakeholders, While the COVID-19 pandemic seems to have caused unimaginable and significant damage, the unprecedented collective policy efforts by Governments and central banks, paired with the resilience and innovations of private enterprises, have helped minimise lasting economic and physical damage across the world. The pandemic has accelerated the pace of digitalisation, with businesses ramping up technology and digital presence. This trend is likely to continue and will aid in chasing newer avenues of growth led by innovation, while enhancing efficiency. Outlook • A leading European producer of dairy and farming machinery awarded Mindtree a multiyear contract to transform, implement, and support digital workplace services across the globe • A leading US based managed healthcare and insurance company selected Mindtree as a preferred partner for digital transformation and modernisation work • A leading US flagship airline signed a multiyear contract with Mindtree. As part of the contract, Mindtree will support core airline systems, including commercial, operations and enterprise IT, through business verification testing services Headquartered at Knowledge City, Vadodara, L&T Technology Services Limited (LTTS) is a global leader in Engineering and R&D (ER&D) services. Integrated Annual Report 2021-22 83 A large global bank selected Mindtree for a multiyear deal to provide global support to the content and event operations of the marketing function of its asset and wealth management unit One of the world's largest technology companies selected Mindtree as a preferred supplier for product engineering and cloud professional services to enable it to scale up faster . Multiple annuity and multi-year large deals have been bagged across verticals and few of them are given below: Mindtree continuously endeavours to automate and digitise the activities embracing the advantages it carries. It employs BOTS for performing various tasks, it has launched 'Flexor' an internal platform for bottoms up approach for improving project level margin, a crisis communication system is being developed to send internal alerts and advisories and it is automating Business Continuity Management tools. Key deal wins Corporate Overview The business is also empanelled as a strategic vendor to Google's 'Professional Services Organisation' (PSO) and a part of the Google Cloud Partner Advantage Program that is designed to provide Google Cloud customers with qualified Mindtree helps BFSI customers to modernise their core, reimagine their go-to-market models, adopt cloud, leverage data and insights, and better engage with their customers through insightful analytics, personalised marketing, and tailored experiences. It also enables customers with their ESG journeys by creating strategies, providing intelligence services, managing risks, staying compliant, and generating green alpha. Banking, Financial Services and Insurance (BFSI) Mindtree enables banks, cards and payments networks, capital markets institutions, property and casualty (P&C) carriers, and life and annuity insurance firms to accelerate digital transformation. The offerings help media firms, broadcasters, publishers, gaming developers, advertising agencies, information service providers, professional service firms, and educational institutions to digitalise their content and scale their direct-to-consumer platforms. Mindtree also enables technology software, hardware, semiconductor, and networking companies to build innovative and intuitive products, increasingly offered as a service with subscription-based pricing. Communications, Media and Technology (CMT) Mindtree partners with CMT customers to help them reimagine their business models, optimise and automate key processes, and fully leverage digital technologies. It enables Communications Service Providers (CSPs) and Original Equipment Manufacturers (OEMs) to customise, implement and support their 5G products, IoT platforms, and edge devices. The business enables the customers across diverse industry sectors such as banking, capital markets, insurance, communications, media and entertainment, technology, education, retail, consumer packaged goods, manufacturing, travel, hospitality, logistics, and healthcare to achieve digital transformation. 24 countries, Mindtree is consistently recognised among the best places to work. Mindtree, Kolkata Statements LARSEN & TOUBRO Financial Management Integrated Statutory Discussion and Analysis Report Reports Corporate Overview 80 Mindtree is a global technology consulting and services company that enables enterprises across industries to drive superior competitive advantage, improve customer experiences and create positive business outcomes by harnessing digital and cloud technologies. A digital transformation partner to more than 270 of the world's leading corporations, Mindtree brings extensive domain, technology, and consulting expertise to help reimagine business models, accelerate innovation and maximise growth. As a socially and environmentally responsible business, Mindtree is focused on growth as well as sustainability in building long-term stakeholder value. Powered by more than 35,000 talented and entrepreneurial professionals across Overview MINDTREE LTI also sees an increasing trend in innovation in the 5G space, edge computing driven eco-system of connected devices and smart products, hardware firms moving to new business models and heightened focus on supply chain resilience. The Media and Entertainment industry continues to experience the influence of consumer behaviour dynamism, mergers and acquisitions fuelled by competitive intensity and industry reshaping due to technological innovation. The year has also seen the emergence of the Metaverse which is likely to see increased levels of spendings. Retail, CPG and Manufacturing (RCM) 82 Mindtree helps its RCM customers become future-ready and get to the market with better predictability and speed. It enables some of the world's largest food, beverages, household and personal care products, sports goods, footwear and apparel, consumer durables, and pharma consumer firms to drive hyper-personalisation in today's connected world. This is done by harnessing cutting-edge consumer-data platforms and hyper-analytics and reimagining supply chains along with manufacturing processes. It also helps retail customers deliver cohesive and compelling omnichannel experiences to their 'GLOCAL' customers. Data analytics and cloud modernisation expertise help customers achieve economic discipline, lean operations, and digitalisation to drive profitable growth. Mindtree is a Premier Google Partner for Google Cloud Platform (GCP) and offers its customers a complete spectrum of cloud services. • Google Mindtree has been a Platinum-level Adobe Business Partner for over 3 years. The partnership with Adobe and the domain experience brings together a full suite of customer experience transformation services to accelerate its clients' digital transformation journey. • Adobe Mindtree is an Advanced Consulting Partner in the Amazon Partner Network (APN) for Amazon Web Services (AWS). Together, they have helped several enterprises to successfully migrate to the cloud. • AWS Mindtree is an established premium consulting partner of Salesforce with 17+ years of experience on the platform. As a Platinum Partner, it specialises in Salesforce implementation strategies to drive digital growth through deep client engagement and offers services across the Salesforce success value chain - ranging from Strategy Consulting & Solution Design to Implementation and Application Value Maintenance. • Salesforce Mindtree is distinguished with the highest tier of Microsoft Azure partnerships and is one of the exclusive 70+ Managed Service Providers with exclusive access to all levels of support programmes and solutions. It also collaborates closely with Microsoft to develop next-generation cloud solutions for clients. • Microsoft To meet the rising demand, globally companies need to innovate and invest in disruptive technologies to better compete in the market. The technology ecosystem banks heavily on integrative solutions, which is why it is important for technology service providers and innovators to collaborate to create sustainable solutions. At Mindtree, the idea of collaboration and partnership is to deliver appropriate technology solutions to new and existing clients which result in better business outputs and outcomes for them. Mindtree's key partner relationships are: Alliances and Partnerships Mindtree's cross-industry experience helps customers across the health ecosystem including payers, providers, and medical device companies to accelerate growth, deliver superior experience to consumers, clinicians and employees, reduce the cost of care, and run digitally optimised operations. Mindtree also provides industry-focused platforms, value- driven engagement constructs, innovation labs, and cohesive partnerships built on the foundation of technology and talent. Healthcare Design Thinking Workshop, Mindtree Digital Pumpkin, New Jersey Integrated Annual Report 2021-22 81 Travel, Transportation and Hospitality (TTH) Mindtree partners with leading airlines, hotels, cruise lines, travel service providers, car rental firms, and real estate companies in their digital transformation initiatives to help them recover from the COVID-19 pandemic and deliver measurable business outcomes. Blockchain capability demonstration at Mosaic Experience Centre Mindtree and SAP have been strategic partners for more than a decade. Mindtree is currently the only integrated service provider in the world with expertise on the SAP HANA platform across all three major public cloud platforms: Amazon Web Services, Microsoft Azure and Google Cloud. Mindtree is also one of a handful of Lighthouse Partners, which offer customers SAP's re-imagined enterprise resource planning solution, SAP S/4HANA via the public cloud. CLIENTS Discussion and Analysis Management Corporate Overview 86 • LTTS was empanelled by a global aircraft manufacturer as a strategic supplier for its engineering and digital services for 5 years to help drive its next-generation programmes • Strategic Engineering Partner for a US-based automotive Tier 1 company, to provide engineering services for its Electric Vehicle (EV) product portfolio. As part of the programme, LTTS is setting up an R&D centre in Krakow, Poland • Jaunt Air Mobility (Jaunt) awarded LTTS a multi-year USD 100 million+ electric air mobility contract. LTTS will open an Engineering and R&D Centre in Québec Province to provide new product development engineering and design services for the Jaunt Journey eVTOL (electric Vertical Takeoff and Landing) air taxi Transportation Key deal wins LTTS' strength in Engineering and Technology is underscored in the ratings by key industry analysts, including, Zinnov, Everest, ISG, ARC, IDC and Nelson Hall, who have consistently rated LTTS as a leader across various categories. Integrated Statutory Report LTTS has had several major deal wins across all verticals. Large deal bookings touched a new high, led by a marquee USD 100 million+ deal with Jaunt Air Mobility for an electric air mobility program, a USD 45 million+ deal win in the EV segment, and several USD 25 million+ engagements. LTTS also provides pre-compliance testing and validation support. It also helps customers with product/compliance remediation frameworks, complaint management systems, and regulatory documentation support. LTTS is focusing on redefining legacy medical product design methodologies for ensuring the widest possible compliance with diverse regulatory regimes across territories and regions. LTTS helps medical device OEMs worldwide accelerate product development cycles, reduce time to market, deliver sustained value engineering, and ensure seamless multi- geography compliant product launches. The Company works closely with leading global medical device manufacturers and healthcare providers to offer solutions around remote medical care, regulatory compliances and approvals, in-vitro diagnostics, patient mobility solutions, surgical services, home healthcare, and Medical Internet of Things. Medical Devices The Company's digital solutions further enable manufacturers to upgrade and integrate their legacy systems with smart platforms to help drive state-of-the-art connectivity and synergy for transforming business outcomes. LTTS provides end-to-end solutions across designing, engineering, project management, handover operations, and delivery and maintenance of custom digital solutions. As a leading Engineering, Procurement, and Construction Management (EPCM) services specialist, LTTS supports all key stages across a plant's lifecycle – from conceptualisation to commissioning. Plant Engineering Electric Vehicle Lab Cost-Competitive Integrated Annual Report 2021-22 85 Major Achievements Financial LARSEN & TOUBRO Reports USING BLOCKCHAIN 87 •The Company has unveiled eVOLTTS, a first-of-its-kind EV technology demonstrator platform. It is also focusing on delivering state-of-the-art telematics and connectivity solutions, cutting-edge infotainment systems, powertrain design services, and end-to-end design and development of automotive components • NeXSens Lab at the LTTS, Bengaluru Campus was inaugurated. The lab will serve LTTS' global clientele and is equipped with state-of-the-art high-precision tools for catering to all sensorisation requirements • LTTS has been selected as an engineering partner by Mavenir and NVIDIA, to accelerate the adoption of the industry's first converged Al-on-5G. LTTS will support Mavenir with customisation, integration and deployment of Al applications on NVIDIA's Al-on-5G unified platform • LTTS released its first Sustainability Report for the year 2020-21, with a roadmap to achieve carbon and water neutrality by 2030. As part of its commitment to building a sustainable business, LTTS signed the Science Based Target Initiative pledge LTTS has continued to invest significant time and effort in strategic initiatives that will propel its technology footprint, engineering infrastructure and human resources, with the objective to provide a differentiated experience to its customers. Significant Initiatives • A multi-year plant engineering contract from a leading global food processing company to provide plant engineering design services for the client's upcoming facilities in Europe and North America • LTTS has been awarded a multi-year programme from a European Oil & Gas Company to create digital twins for all its upstream and downstream assets, to reduce operational costs Plant Engineering • A leading European Med-Tech company named LTTS as its engineering provider to offer best in class hardware and software product engineering services and help its 'build care as a service' business model by smart-enabling their products Medical Devices • A leading technology company has empanelled LTTS as a strategic engineering partner for a period of 5 years for its product and devices portfolio • A Hi-Tech 5G client selected LTTS as their strategic partner to establish an extended product development centre for the adoption of new-age technologies and to accelerate time-to-market Telecom and Hi-Tech technologies selected LTTS as a worldwide strategic transformation partner to implement and support its loT initiatives. This multi-year contract includes developing and managing its loT Condition Monitoring platform and integrating various products • A global manufacturer of motion and control system for the beverage plant of a leading food and beverage conglomerate. The sustainability-focused initiative will reduce water wastage and ensure adherence to local regulations Implementing a water and wastewater management • Industrial Products At LTTS' Imaging Lab, engineers develop various Innovative Al-based imaging solutions In Media & Entertainment, LTTS provides services across product engineering, conceptualisation, design and development, testing and certification, manufacturing support, maintenance, and value engineering. The Company is pursuing key partnerships with leading participants in the emerging OTT (Over The Top) space. LTTS partners with leading ISVs to deliver application engineering, VLSI, cloud engineering, product uplift, platform development and migration, product support, and testing and certification services. Statements For the consumer electronics segment, LTTS provides services in the areas of product conceptualisation, design and development, platform software development, testing and certification, manufacturing support, product maintenance, and product launch. The loT Innovation Hub in Bengaluru is where loT solutions come to life - from connected workers to smart fuel dispensers • LTTS is helping drive private 5G network rollouts for global organisations to achieve seamless connectivity and unlock business value. The Company has also unveiled a state- of-the-art lab as a service model to address the emerging requirements of its customers • Project Rendezvous was initiated within the Company to implement the learnings of the employee engagement survey, EMPulse '21. The Project Avatar teams helped restate the Vision, Mission, and Values of LTTS to prepare the Company for the journey ahead Outlook The Indian ER&D sector, valued at USD 31 Bn in 2019, is well-positioned to harness the favourable conditions and is projected to be worth over USD 63 Bn by 2025, as per NASSCOM. As a pure-play ER&D market leader, LTTS stands to benefit from leveraging its set of well-defined offerings. With established credentials as an innovation leader and deep cross-industry experience, the Company is set to strengthen its robust growth trajectory by providing a unique proposition to customers across industries and domains. LTTS is built on the twin pillars of engineering and technology. The Company continues to strengthen this foundation by leveraging emerging trends that it feels will drive relevance in the marketplace for years to come. the Six Last year, LTTS identified a set of key focus areas Big Bets: Electric Autonomous & Connected Vehicles (EACV), 5G, Med-Tech, Al & Digital Products, Digital Manufacturing, and Sustainability. Investments have been undertaken across each of these key technology areas, accelerating LTTS's core culture of innovation. New alliances are being explored to drive and strengthen this journey, as the Company reaffirms its commitment to becoming the partner of choice for customers, engineering sustainable digital transformation journeys which would make them competition-proof and future-ready. LTTS provides services and solutions in the areas of software and digital engineering, embedded systems, engineering analytics and plant engineering. The Company's customer base includes 69 Fortune 500 companies and 57 of the world's top ER&D companies, active across multiple segments. Its technologists work with global firms to offer smart solutions and services that drive new product development, facilitate remote asset management, and enable virtual product design and prototyping. With its multi-sectorial engineering prowess, LTTS is continually blending and integrating ideas and technologies to deliver differentiated engineering solutions that are uniquely designed to address complex business challenges. 88 Management Integrated Statutory Financial LARSEN & TOUBRO Discussion and Analysis Report Reports Statements LTTS supports its semiconductor customers with a range of services covering hardware system design, platform software development, modem services, verification and validation, multimedia, connectivity, and storage. SOLVING BUSINESS CHALLENGES FOR OUR Corporate Overview The Company's innovation and cutting-edge work includes the world's first autonomous welding robot, architecting the smartest campus in the world, block chaining real estate assets and solar connectivity drones, among others. The key differentiators for LTTS' business are its value-maximising customer-centric innovations, deep domain expertise, and a multi-vertical presence across major industry segments: - Corporate Overview LTTS' Telecom and Hi-Tech vertical provides engineering services and solutions across five key domains - Telecom, Consumer Electronics, Semiconductors, Independent Software Vendors (ISVS), and Media & Entertainment (M&E). Telecom & Hi-Tech 84 sourcing avenues in the post-pandemic global economy. With digital manufacturing emerging as a major focus area, LTTS is spearheading digital transformation initiatives for customers to help unlock the true potential of emergent technologies in the Industry 4.0 ecosystem. The Company is also involved in supply chain optimisation and standardisation to help customers explore alternate LTTS leverages its deep domain expertise in software, electronics, connectivity, mechanical engineering, industrial networking protocols, lloT, smart industry products, test frameworks, and enterprise control systems to support global customers. This translates into a robust presence across building automation, home and office product design, energy management, process control and machinery design. Industrial Products In Rail Transportation, the offerings include cutting edge signalling systems and full RAMS support for systems and fleet management. LTTS' Aerospace offerings cover the widest spectrum across aero engines, aerostructures and systems, avionics, air traffic management systems, new-age digital transformation solutions, urban air mobility and defence. aircraft systems, achieve a faster time-to-market, and drive innovation across the value chain. LTTS' Transportation Engineering Services enable OEMS worldwide to develop next-generation vehicles and Transportation LTTS' Creative Think Studio showcases design aspects of the product to create delightful customer experiences In the Automotive sector, LTTS partners with global customers through robust and reliable platform and solution offerings across key emerging areas, including, Electrical Vehicle (EV) technologies, Advanced Driver Assistance Systems (ADAS), and Autonomous Drive (AD) frameworks. It aids customers to meet and exceed global transport safety protocols, emission standards, and regulations. CLLDS COLD 424 шасот Statements Reports LARSEN & TOUBRO Statutory Financial Integrated Report Discussion and Analysis Management Your Company continues to focus on shareholder value creation by divesting non-core assets, capturing cost efficiencies, and leveraging technology for productivity gains. A strategically diversified business portfolio, geographical diversification, a healthy balance sheet and strong order book are definite markers to long-term value creation. In line with its stated strategy to grow the core and exit from concessions, your YOY Growth Company is pleased to inform 21% 25% you that on While Nifty 50 grew by 29% also concluded monetisation of a commercial property. Going forward, a combination of improved operations, capital restructuring, support from the State Government and Transit Oriented Development (TOD) monetisation will turn the Metro asset value accretive. In FY 2023-24, your Company outperformed the Nifty 50 growth index, achieving a stupendous growth of 77% compared to the index's 29%. April 10, 2024, it has successfully concluded the divestment of its 51% stake in L&T Infrastructure Development Projects Limited, a joint venture having multiple toll road concessions and a power transmission line. For Hyderabad Metro, in addition to receiving financial assistance from the Government of Telangana during the year, your Company has grew by 77% During FY 2024 L&T's Market Cap Revenues clocked in at 2,21,113 crore, while Profit After Tax reached ₹ 13,059 crore, registering a 21% and 25% growth respectively. A combination of improved productivity and reduced capital intensity, including return of capital to the shareholders during the year in the form of your Company's first Share Buyback programme, has resulted in improved return ratios as well. in Revenue in PAT international order wins in Hydrocarbon and Infrastructure businesses. A large, growing and diversified Order Book of * 4,75,809 crore as on March 31, 2024, with a growth of 20% over the previous year, provides clear revenue visibility in the medium term. L&T's legacy continues to shape industries worldwide. Together, your Company continues to build a stronger L&T one that transcends boundaries and leaves a lasting mark on generations to follow. This was achieved on the back of major 31% growth year-on-year. 3 lakh crore, and registered an impressive crore Order Inflow *3 lakh Crossed This year, your Company crossed a historic milestone: annual Group Order Inflow surpassed Group Performance Review Others: A global leader in tyre curing machinery, your Company is the #1 Off-the-Road tyre curing machinery manufacturer in the world. L&T's valves operate across 61 countries, which is a sheer testament to the product reliability. It gives me immense pleasure to inform you that the Board of Directors of the Company has recommended a final dividend of 28/- per share for FY 2023-24, in addition to the special dividend of 6/- per share paid during the year, thus making the total dividend 34/- per share. Construction and Mining Machinery: Your Company's in-house Product Development Centre drives cost- effective solutions, with over 40,000 active machines in the market. L&T Realty: Crafts integrated spaces, residential complexes, and commercial hubs. More than 50 million sq.ft. of properties are currently under development. Your Company's accolades such as 'Best Realty Brand 2024', 'Iconic Developer for the year 2023-24' affirm its commitment to quality. 02 Tech-tonic Shifts 03 The qualitative as well as quantitative benefits of digitalisation are now visible. Project execution has become faster, safer, cleaner, more accurate, less polluting, economical, and most importantly, the use of technology has L&T Semiconductor Technologies (focussed on fabless chip design), and L&T Edutech (bridging industry- academia skills gaps), showcase your Company's adaptability and foresight. 4. Other Businesses: To sum up, with all the thought leadership that your Company has demonstrated so far in delivering global solutions by leveraging technology, it is essentially a technology company -shaped, driven, and powered by technology, with engineering at its Statement CMD's LARSEN & TOUBRO Taking note of the evolving trends in a digital world and its ramifications, your Company is also incubating and scaling up new-age businesses like data centers and semiconductor chip design. L&T EduTech: To bridge the skill gap, your Company has developed L&T EduTech in collaboration with education institutes, corporations, channel partners and government agencies. Aimed at higher education students and working professionals, this platform provides high-quality hybrid education and facilitates skill upgradation in niche core engineering and IT domains. More than 4.2 lakh campus recruitments have been carried out, and over 66,000 students and faculty members have been trained, along with 16,000 working professionals on the platform, as on March 2024. L&T-SuFin: Your Company has created a digital marketplace, L&T-SuFin, to enable e-commerce for MSMEs involved in construction and industrial products, and also provides financial and logistical support. It has onboarded more than 42,000 sellers with a catalogue of more than 5 lakh Stock Keeping Units (SKUs) in 49 categories and has crossed a Gross Merchandise Value (GMV) of over *2,700 crore since inception. L&T develops and provides critical components and systems for India's Space Programme Keeping in mind the requirements of a digital future, your Company has created platforms to promote e-commerce solutions in two areas important for Viksit Bharat. Immersive experience in the form of simulated walk-throughs is also allowing L&T Realty to convert more potential customers into actual ones. The Central Eye - With a 24x7 monitoring system in place, real-time visibility of all the data on a one-stop dashboard allows the management to take instant reviews of the progress of work anywhere within the L&T universe and make timely and objective data- driven decisions. For both Projects and Manufacturing, the creation of digital twins has accelerated the delivery process by substantially crunching timelines for designing, modelling and testing, thereby enhancing quality and efficiency, and making the work environment safer. Hi-tech Manufacturing - Your Company's Precision Engineering & Systems business has been integral to the development of India's aerospace industry right from the beginning and has been a trusted partner of ISRO for over five decades. During the year under review, your Company played pivotal roles in the successful soft-landing of Chandrayaan-3's Vikram Lander near the south pole of the Moon and in the successful take-off of Aditya L-1, India's first solar mission. In both missions, your Company manufactured mission-critical launch segments, antennae, radars and tracking systems, and even had its team stationed at ISRO's Sriharikota launchpad for systems integration. RFID for material tracking. CCTV- enabled image and video analytics are constantly helping to track raw materials at project sites and assess worker productivity and identify their training needs. Projects - Under project execution, technologies like LiDAR and drone- based photometry have substantially improved the planning accuracy (as evident in projects like the creation of a 4.6 km tunnel under Tungareshwar Wildlife Sanctuary as part of the Surya Water Supply Project in Maharashtra and for the aerial survey of a total of 1 lakh hectares of cultivable command area under the Parwati Micro Lift Irrigation Project in Madhya Pradesh). During the year under review, L&T Construction made news by completing in just 45 days, India's first 3D concrete printed post office building in Bengaluru, Karnataka. While the technology has been approved by the Building Materials and Technology Promotion Council (BMTPC), the structural design of the post office has been validated by IIT Madras. Your Company built the Ayodhya Ram Temple in Uttar Pradesh with utmost fidelity to the intricate design, using advanced Shree Ram Mandir, Ayodhya, Uttar Pradesh Digital Governance - Today, your Company leverages a vast array of technologies across its various verticals, including AI, ML, VR/AR, Cloud, Big Data & Analytics, Drones, GPS, RFID & QR Codes, LiDAR, BIM, IoT, 3D printing. Adoption of more frontier technologies like advanced sensors, embedded software and robotics is in progress. Your Company has digitally connected over 15,000 assets across its global projects and manufacturing bases to a central loT platform. This generates a wealth of data, which is being leveraged by advanced analytics to optimise asset utilisation and resource planning, ensuring maximum efficiency. shaped a more sustainable growth path for your Company. Financial Statements Reports Statutory Integrated Report Discussion and Analysis Management Corporate Overview Integrated Annual Report 2023-24 Your Company had embarked on a journey to leverage technology for making progress which is sustainable, well ahead of its global peers. The journey which began long back with exploring how manual activities in the various businesses could get digitalised, ultimately paid rich dividends during the COVID pandemic. As India's leading infrastructure player, L&T was one of the first to realise the importance of digitalisation and began its digital acceleration journey as early as 2016. The proactive move to invest in digital technology and in Industrial Internet of Things (IoT) to automate the manufacturing processes paid off when remote working became the norm during the pandemic-induced lockdowns. Thus, when it comes to digital initiatives, your Company has consistently been a trend-setter and has constantly led the path in adapting to paradigm shifts. CMD's Statement Statutory 01 S.K.TOUBRO H HOLCK-LARSEN LARSEN & TOUBRO Buildings help reduce carbon emissions, energy and waste, and also conserve water. In FY 2023-24, your Company created Green Buildings infrastructure of 14.8 million sq.ft. (and cumulatively 42 million sq.ft. over last five years). Clean Mobility - Your Company is an active participant in clean mobility through execution of mass transit systems offering faster, affordable and greener modes of transport. In this cause, your Company completed electrification of more than 3,400 track km in FY 2023-24. Clean Energy - Your Company is in the business of building Clean Energy projects supporting the global megatrend towards low/no carbon energy generation. This includes renewable energy plants, primarily solar and hydro, as well as nuclear power plants. The Renewables business group offers comprehensive EPC services globally for GW-scale Solar PV, Energy Storage, Microgrid, and Hybrid Renewable Projects. This expertise allows your Company to handle diverse module technologies, mounting structures, and storage types, a capability offered by very few players. Solar Power - 5.8 GWp constructed globally, with an additional 12 GWp 2.2 GWP Solar Energy Capacity under execution. In FY 2023-24, your Company commissioned 2.2 GWp of solar capacity. Hydel Power - 3.5 GW constructed, with 6.2 GW under execution (including storage). 04 Integrated Annual Report 2023-24 Corporate Overview Management Integrated core. Financial Discussion and Analysis Report Reports Statements Nuclear Power -6.2 GW constructed, with 6.8 GW under execution. Your Company contributes to the mitigation of carbon footprint through the production of equipment for renewable diesel and bio-fuel and through emission control technologies such as flue gas desulphurisation, which removes sulphur dioxide (SO2) from the exhaust flue gases of fossil fuel-based power plants. Conscious Execution - Your Company strives to ensure that during project execution stage too, environmentally sustainable measures are undertaken, which are in sync with local ecological conditions. Taking care of Ecology - The actions span from translocation of coral patches and development of marine biodiversity plan in Mumbai Costal Road Project to preservation and planting of mangroves at Mumbai Ahmedabad High Speed Rail Package. VISION LARSEN & TOUBRO L&T shall be a professionally-managed Indian multinational, committed to total customer satisfaction and enhancing shareholder value. L&T shall foster a culture of caring, trust and continuous learning while meeting expectations of employees, stakeholders and society. Your Company's digital ventures, include L&T-SuFin (an integrated B2B marketplace), L&T Cloudfiniti (end- to-end data center and cloud services), L&T Technology Services (LTTS): India's leading Engineering and Technology Services company provides cutting-edge ER&D solutions globally. L&T Finance (LTF): Empowers millions of lives with diverse financial products in the retail sector. LTIMindtree: India's 6th largest IT player is a beacon of IT innovation, bridging physical and digital realms. Your Company's listed arms continue to play pivotal roles, creating shareholder value: 3. Services (IT, Engineering, Digital, and Financial): The Precision Engineering & Systems business focusses on indigenous design and has proudly contributed to India's lunar programme through Chandrayaan-3. 2. Hi-Tech Manufacturing (Heavy Engineering and Precision Engineering & Systems): Your Company's Heavy Engineering division remains a global leader, supplying bespoke industrial equipment. L&T is at the forefront of adapting to Industry 4.0 techniques, ensuring efficiency and quality. the 1.8 GWp Sudair Solar PV plant in Saudi Arabia, a gas compression facility in Algeria, contributed to blue hydrogen infrastructure in Rotterdam, Netherlands among various other projects. Notable recent achievements include the Mumbai Trans Harbour Link (MTHL), Mumbai Coastal Road Phase 1, and Shree Ram Mandir Ayodhya. Internationally, your Company delivered L&T's expertise in executing large- scale EPC projects is unparalleled. Your Company's indelible stamp of excellence graces iconic bridges, hydrocarbon facilities, large solar fields, and infrastructure across India and beyond. 1. EPC Projects (Construction & Energy): Your Company's journey has been one of resilience, innovation, and unwavering commitment to excellence. The diverse business portfolio comprises of: Group Businesses During the year under review, your Company has benefitted from all the positive policy interventions and that is evident from the Company's stellar financial performance. India stands tall as an oasis of opportunity amidst global turmoil and supply chain disruptions. The Government's continuous efforts towards strengthening the domestic economy through enhanced annual outlays for capital spending, policy shifts towards improving the ease of doing business and creation of a world-class digital infrastructure and payments platform have all contributed towards fuelling an annual GDP growth rate of minimum 7% for the last three years, and over 8% in the year under review. The motif of 'Aatmanirbharta' (self-reliance) pursued through innovative schemes like the Production Linked Incentive (PLI) scheme to provide an impetus to manufacturing, the Start-Up India scheme to create an ecosystem for entrepreneurship in digital and technology ventures and the creation of the National Infrastructure Pipeline have set a strong foundation to propel the realisation of a Viksit Bharat with a USD 35 trillion economy size by 2047. Dear Shareholders S. N. Subrahmanyan CHAIRMAN AND MANAGING DIRECTOR'S STATEMENT Statements Reports Report Discussion and Analysis Financial Statutory Integrated Management Corporate Overview L&T-ites shall be an innovative, entrepreneurial and empowered team constantly creating value and attaining global benchmarks. Tech-celerating Sustainable Progress 38% Leveraging Al for Tomorrow - Your Company recognises the power of Al across the entire project lifecycle, from contract management to design to execution and operation and maintenance. To fuel this innovation, Your Company has launched a collaborative platform. This initiative connects aspiring data scientists with domain experts and technology champions. Together, this team will develop cutting-edge future-proof solutions. LARSEN & TOUBRO 07 Jai Hind! This dedication to excellence has earned your Company the reputation as a Nation-builder, instrumental in shaping the landscape of a new, modern and aspiring India. L&T BUILDS THE THINGS THAT MAKES INDIA PROUD. Your Company takes immense pride in being the architect behind many of India's most iconic landmarks and critical infrastructure projects. From grand structures like the Statue of Unity to the intricate engineering marvels powering India's space missions, your Company consistently strives to deliver projects that not only serve a purpose but also inspire national pride. Your Company's commitment extends beyond brick and mortar, fostering innovation and technological advancements, continuously pushing boundaries to ensure India remains at the forefront of global progress. My special thanks to all our shareholders for the trust you have reposed in us. You remain an invaluable pillar of strength, and I look forward to your continued support in our journey towards achieving higher levels of excellence. For nearly eight decades, your Company has served as a cornerstone of India's infrastructure and industrial development. The unwavering commitment to 'Building India' is deeply embedded in the DNA of every L&T-ite. Your Company is not merely present in core sectors of the economy; it is consciously structured to anticipate and swiftly respond to the nation's evolving needs. I would like to thank our employees, our customers, supply chain partners, and the Government for their contributions, directly and indirectly, to our growth. I also thank my fellow Board members for their invaluable support in guiding the Company through volatile times when there are multiple variables at play. Among the transformational shifts happening throughout the world, your Company is well-positioned to ride the waves and reap the rewards. Its proven expertise in building world- class infrastructure and EPC projects across multiple sectors, readiness to participate in the energy transition opportunities, proven capabilities in Hi-Tech Manufacturing and Services, and its emphasis on leveraging technology to deliver top-quality output, place your Company in a sweet spot to take advantage of the opportunities as they unfold. Further, all the businesses are aligned with the larger goals of transitioning into a cleaner, greener economy. Your Company's relentless efforts to stay ahead of the competition by investing in frontier technologies and delivering excellent governance are ultimately aimed at enhanced customer delight through improved performance, better solutions and completing projects on time and within budget. The unwavering commitment to the customers remains your Company's guiding force as it is well aware that there can be no better advertisement of one's capabilities than a satisfied and delighted customer. Conclusion Customer Centricity During the year under review, your Company has hired 1,766 female employees. Female employees comprised 8.1% of your Company's employee strength as on March 31, 2024. Diversity, Equity & Inclusion Your Company's transformation into a tech-driven conglomerate has a direct bearing on its Diversity, Equity & Inclusion (DEI) quotient. There is empirical evidence on how women participation in both engineering and non-engineering roles has translated into improvements in efficiency across operations. With several exclusive career-assisting schemes for females and installation of women-friendly facilities in the offices, your Company is on course to achieve its Lakshya target of women employees comprising 10% of the total employee strength by 2026. Your Company's transformation to a technology powerhouse and creation of a team of digital natives has been possible because of the employees' willingness to embrace change, and the emergence of numerous young digital champions deserves a special mention in this transformation. Your Company's commitment to excel extends beyond traditional training methods. Your Company offers a multitude of online digital platforms with rich content on self-improvement courses, accessible to all employees. During the year under review, a staggering 36 lakh learning hours were clocked by nearly 42,000 employees on these various platforms - both online and offline. Statements Reports Financial Statutory Integrated Report Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 06 rewarding, and celebrating achievements, facilitating career transition and mobility, as well as promoting gender diversity. For the second consecutive year, your Company has been recognised as a Great Place to Work (GPTW). INDIA FEB 2024-FEB 2025 Certified CONTENTS Work. 01 09 ENGINEERING Integrated Annual Report 2023-24 08 SURVEY FORM - 2023-24 SHAREHOLDER'S SATISFACTION 661 648 Information Regarding Subsidiary Companies 511 Consolidated Financial Statements 381 Standalone Financial Statements FINANCIAL STATEMENTS 380 318 Board Report 295 AGM Notice 242 Business Responsibility & Sustainability Reporting (BRSR) STATUTORY REPORTS 242 INTEGRATED REPORT 128 MANAGEMENT DISCUSSION & ANALYSIS 18 16 10 year highlights L&T Nationwide Network & Global Presence 14 Group Business Structure 12 11 Executive Committee (Ecom) Company Information CORPORATE OVERVIEW The year witnessed a dual disruption. Generative Artificial Intelligence (GenAl) emerged as a game-changer, and the severity of climate change became undeniable. All of your Company's Al and GenAl initiatives leverage the strength of good data. From co-pilot enabling efficient note- taking in meetings, to using GenAl in tendering, generating technical queries, identifying contractual risks, and creating centralised alerts for every project site globally, your Company has been adapting to the GenAl wave in an innovative way. Το innovation, recognising, equipment to grid electricity or low carbon fuel. In addition, your Company is working to increase renewable energy sourcing. Options like on-site ground mounted Solar and Renewable Open Access are being implemented across manufacturing and office locations. These initiatives underscore your Company's commitment to driving sustainable development and facilitating the global transition towards clean energy solutions. Towards the goal of becoming Carbon Neutral by 2040, your Company has reduced energy intensity by 16% and emission intensity by 12%, during the year under review. This was achieved mainly by diesel consumption optimisation through digitalisation, switching from diesel-powered year under review. It commissioned its first indigenously manufactured 1 MW Hydrogen Electrolyser (expandable to 2 MW) at its Green Hydrogen Plant. L&T Electrolysers plans to leverage its upcoming giga-scale facility in Hazira to meet the growing demand for green hydrogen, maximise product localisation through an enhanced local supply chain, and serve export markets as well. Your Company created a major benchmark for 'Make in India' during the L&T Energy Green Tech, a wholly owned subsidiary of your Company, has a strategic vision to develop Green Hydrogen and Green Ammonia plants in India, catering to both domestic consumption and international markets. For domestic operations, your Company has entered into a Joint Venture (JV) agreement with Indian Oil Corporation Ltd. and ReNew, a move aimed at spearheading India's growing Green Hydrogen sector. globally renowned energy sector experts to provide expertise and strategic guidance on technology trends in green energy, analyse the evolving global policy framework in this space, evaluate emerging business models, and advise on possible collaborations. Green Energy Business - During the year under review, your Company has constituted a Green Energy Council with Overall, the Green Business contributed 50% to the revenue of the Company on standalone basis in FY 2023-24. INTEGRATED ANNUAL REPORT 2023-24 LARSEN & TOUBRO 88888 operations, Green and construction their design, certified. Through of Green Buildings Infrastructure Mn sq.ft. 14.8 Green Buildings - Your Company is in the business of constructing green buildings which are LEED/IGBC/GRIHA- Building of climate-friendly infrastructure is likely to be the next big global trend, and that can open up massive possibilities for your Company globally. Aligned to its sustainability vision 'For A Better World', your Company has developed strong capability in executing projects for its customers in Clean Energy, Clean Mobility, Water and Sanitation, Green Infra and other areas. Collectively termed as 'Green Business', such projects help in lowering carbon emissions, improving water availability, recycling and reuse, scaling up energy efficiency, reducing air pollution, and enhancing resource conservation. Going Green By championing Technology, Green practices, and Corporate Social Responsibility (CSR), your Company is well-positioned to navigate this evolving landscape and contribute to a sustainable future. Recognising the environmental impact of its actions, your Company's commitment to responsible corporate governance extends beyond shareholder value creation, prioritising the well-being of the world and the communities it serves. Worldover, the importance of embracing sustainable practices gained traction. How countries and organisations gear up to make sustainability central to their growth models in order to confront climate change is bound to have an impact on global macroeconomics. Its IT arm, LTIMindtree launched Canvas.ai, an enterprise-ready Al platform guaranteeing a 40-50% reduction in app modernisation and cloud migration efforts. By jumpstarting GenAl capabilities for customers, Canvas.ai is poised to disrupt the industry. Digitised Recruitment - Technology is also playing an important role in onboarding of workers. Your Company has created a digital skill inventory tool named Worker Induction & Skill Assessment (WISA), where around 5 million workers have been categorised as per 300 plus skill sets of the National Skill Development Council (NSDC). WISA helps managers track the location of each worker, gauge their daily productivity, and suggest training to upgrade their skills. Your Company believes in the following maxim- 'We have inherited this earth from our ancestors, we cannot afford to borrow it from our children too'. It is a collective responsibility to leave a habitable planet for future generations, and thus we must refrain from irresponsible use of natural resources. Your Company is not only translating this belief into action for itself, it is also helping others to do the same. Great Place Social Initiatives & Community Service Benefitted right talent, providing them with a conducive work environment, nurturing talent, i.e. offering opportunities for learning and self- development, empowering them by encouraging collaboration and Your Company is what it is today because of its people. Your Company's eight decades of success is attributable to the dedication, hard work and accomplishments of every member of Team L&T. Your Company's people policies revolve around the core principles of onboarding the People Power As part of its due diligence exercise, your Company carries out extensive analysis of sovereign and client financial strength at the time of bidding for projects. As per the MEED (Middle East Economic Digest) February 2024 report, L&T was the top contractor in terms of projects awarded in Saudi Arabia in 2023. In revenue terms at the Group level, apart from the share of 57% generated from India (mostly from EPC), USA and Europe jointly account for 17% of the revenues (generated mostly from technology businesses), the Middle East accounts for 22% (generated from EPC), and the balance 4% is generated from the rest of the world. At the Group level, apart from the 62% domestic share in the total Order Book, the Middle East is the other significant source of orders, accounting for 35%, while the rest of the world accounts for the balance 3%. for wider geographical dispersal aids broad-basing your Company's portfolio, continues to yield positive results, and de-risks exposure to a particular region. international, with Americas and Europe being the primary geographies. This policy of aiming of Order Book in FY 24 International Orders: In today's VUCA (Volatility, Uncertainty, Complexity and Ambiguity) world, the key to mitigate geopolitical risk is through geographical diversification. While India, the Middle East, Africa and ASEAN are the active markets for your Company's EPC businesses, Hi-Tech Manufacturing is a healthy mix of local and international exposure. Financial Services, on the other hand, is largely domestic on the retail side, whereas IT Services and Technology Services are predominantly Your Company is also making innovative use of technology to improve safety practices. Your Company has groomed more than 500 safety champions who have benefitted from digital training on safety protocol and then spread the lessons learnt among their peer and linguistic groups. International Business With safety-first approach, the image and video analytics have enabled your Company to maintain a strict vigil to spot violations of safety protocols and instant alerts are generated to inform the concerned site managers. Use of robotics has helped in making previously hazardous operations accident-free. Use of VR, AR and Mixed Reality HoloLens has provided an edge in training your Company's manpower to handle specialised equipment and in also getting accustomed to working in unfamiliar terrains and challenging situations. firmly committed to protecting lives of every employee both on-site and in office as every life matters. Safety remains a paramount concern for the leadership team. This commitment is reflected in your Company's 'Mission Zero Harm' principle and the 'L.I.F.E.' (Live Injury-Free Everyday) Framework. Leading by example to ensure a safe working environment for all employees and stakeholders, allocating significant resources and assigning clear responsibilities is a top priority. Your Company takes full responsibility for this and has thoroughly investigated all incidents. Enhanced supervision, more frequent safety briefings, expert consultations for high- risk projects, and stronger engagement with subcontractors are some of the initiatives that has been further strengthened. Your Company remains Workplace Safety Your Company believes responsible corporate governance is the foundation for long-term success. Committed to the highest ethical standards in all business dealings, fostering transparency and accountability throughout the organisation, your Company's robust governance framework ensures compliance with regulations and global best practices. Governance & Ethics Your Company planted 4 million saplings globally. Your Company's Integrated Community Development Programme (ICDP), initiated 10 years ago, has helped in building resilience in rural communities, especially in remote water-scarce locations of Maharashtra, Tamil Nadu, and Rajasthan, covering an area of ~43,091 hectares (the size of over 57,000 soccer fields). Furthermore, a total of 10,974 youth completed various courses at the nine Construction Skill Training Institutes (CSTIs) and the five sub-centres. Over the years, communities have seen tangible and durable benefits from your Company's presence. Change cannot happen overnight, but with every step, your Company gets closer to the social goals it has set for itself. CMD's Statement LARSEN & TOUBRO 05 Girls in STEM During the year under review, your Company has carried forward that tradition, and focussed on initiatives pertaining to health, education, skill development and water & sanitation. the community wherever it operates. Your Company has undertaken CSR initiatives, which have benefitted more than 16 lakh people. people through CSR initiatives 1.6+ Mn Your Company is a firm believer in fostering inclusive growth and in building long term relationships with all stakeholders based on mutual trust and respect. Thus, your Company identifies itself in spirit and deed with the members of A SUSTAINABLE FUTURE 90 MWp Floating Solar Project, Omkareshwar, Madhya Pradesh Selection of Materials - Your Company promotes the use of low- carbon materials such as fly ash and granular blast furnace slag to blend with cement at its construction sites. This results in concrete with lesser embodied carbon, which is good for the environment and a great way for safe disposal of fly ash. Share of fly ash and granular blast furnace slag in cementitious materials stood at 14% in FY 2023-24. Report By continuing to cater to diverse industries and maintaining a steady growth trajectory, LTTS solidified its competitive edge in FY 2023-24, showcasing resilience, innovation, and a customer-at-the-core mindset in navigating the challenges and opportunities of the evolving market landscape. As of March 31, 2024, LTTS boasted an impressive patent portfolio comprising 1,296 patents, reflecting the Company's focus and commitment towards innovation and collaborative development. The scenario was complemented by a growing alliance ecosystem with leading technology majors and hyperscalers, especially in emerging areas like Al and Gen Al. □ Zinnov rated LTTS in the leadership zone across 14 Engineering domains as leaders in Overall 2023 ER&D Services and in the leadership zone across Automotive, Aerospace, Electrification, Industrial, Telecom, Semiconductors, and Telehealth Manufacturing Solutions, North America and Agile Product Development and Design Services □ ISG rated LTTS as Leaders in Manufacturing Industry Services and Solutions 2023 - Digital Factory/ LTTS was rated as a Leader in Manufacturing Smart Industry Services 2023 RadarView by Avasant and was positioned as Leaders in Everest Group's ACES Automotive Engineering Services PEAK MatrixⓇ Assessment 2023 - Electric During the fiscal year, LTTS demonstrated a robust competitive positioning within the global dynamics of the engineering and technology services sector. The Company's financial performance and strategic initiatives underscored its resilience, a scenario that was further reflected across the ratings by leading analysts and industry bodies and a growing patents portfolio. Competitive Positioning million and USD 20 million). IT & Technology Services Segment Engineering in action at LTTS, Mysuru, Karnataka HOT DESK H LARSEN & TOUBRO PLE 91 During the year, LTTS had multiple major deal wins across all its verticals. Large deal bookings were led by a marquee USD 100 million win, a USD 50 million, and USD 40 million engagement, and more than twenty USD 10 million projects (including several in the range of over USD 15 Major Achievements Driven by its key differentiators around multi-vertical domain expertise, value-maximising customer-centric innovations across major industry segments, and a robust network of alliances across emerging technologies, including Al and SDx, LTTS continues to be well-poised to navigate the evolving landscape. As the dynamics of the global ER&D landscape evolve, LTTS will continue to reassess its key drivers, including the availability of talent, new partnerships and alliances, and revitalised compliance with laws and regulations. This would help ensure continued business success in a dynamic ecosystem. Further, estimates from Zinnov corroborate this trend and predict a 2X rise in Digital Engineering spending by 2026, at over USD 1.6 trillion. from 2023 to 2030 and drive the next frontiers of growth. Stickier ER&D spending, led by continued investments in future products and a sustained rise in demand for digital engineering and offshoring services, is expected to drive the growth of the Indian ER&D sector as well. While current Nasscom estimates indicate the US to be the largest ER&D spender at about USD 550 billion, trends suggest a sustained rise of markets across the EU and Asia-Pacific regions. The rise in the intensity of Engineering Research and Development (ER&D) across sectors is driving new growth opportunities. Nasscom estimates that total global ER&D spending could well exceed USD 3 trillion by 2030. With the Automotive, Software, and Healthcare & Medical Devices sectors set to account for about half of this spending, high growth areas like Telecom, Semiconductors, and Software will continue to register double-digit CAGR LTTS has continued to invest considerable time and effort in strategic initiatives that will propel its technology footprint, engineering infrastructure, and human resources, with the objective of providing a differentiated experience to its customers. These include: □ Expanding presence with delivery centres across India, including Vadodara, Chennai, and Bengaluru (new campus inaugurated with a capacity to host 4,000 engineers) □ Becoming a Palo Alto Networks Managed Security Services Partner (MSSP) for delivering a suite of security services to end customers across industrial verticals □ Strategic partnership with Bharat Sanchar Nigam Limited (BSNL) to drive and enable global enterprises in their private 5G network deployments L&T EduTech is an EdTech initiative of the Company, providing high-quality hybrid education for higher education students and working professionals. The Company partners with colleges, universities, corporations, channel partners, and government agencies to facilitate skills in niche core engineering and IT domains. L&T EduTech This business mainly includes new-age businesses incubated by the Company namely L&T EduTech, L&T-SuFin and Data Centers. These ventures are a part of L&T's plan to leverage digital technologies in some of its core domains in order to future-proof them and tap future growth opportunities. Digital Platforms and Data Centers LTTS remains a committed enabler of deep transformative journeys for our global customer base through engineering new frontiers of business success and sustainable excellence across domains. The forward momentum is further strengthened by the growing collaboration of the LTTS Global Engineering Academy (GEA) with leading centres of Learning and R&D, thereby driving depth and sustainability in its approach towards enabling a deep, reliable, and resilient talent paradigm. Its commitment to growth is further illustrated by an industry-leading portfolio of over 1300 patents across sectors and the focussed reskilling and upskilling of over 3000 engineers in Al and allied technologies during the year. As emerging technologies reshape the world, LTTS believes that the future will be defined by a twin-track approach to growth. This involves leveraging new partnerships and alliances while focussing on up-skilling and cross-skilling our talent pool to unlock new growth avenues. The Company is also working closely with leading global hyper scalers, including AWS, Google Cloud, Intel, Microsoft Azure, and NVIDIA, to develop new-age and future-proof technology solutions and offerings. During the year, LTTS has continued to strengthen its position as the nation's largest pure-play ER&D services provider. Having crossed the USD 1 billion mark annual run rate in the previous year, the Company has now set its sights on the next milestone of USD 1.5 billion. The Company's journey ahead is being enabled by a focussed realignment with new opportunities around AI, SDx, and Cyber Security. The emerging paradigm is supported by subsuming new capabilities from the Smart World and Communication acquisition, which closed successfully at the start of the fiscal year. By leveraging the new synergies, LTTS has registered several multi-million deal wins across segments, with a marquee USD 100 million engagement reaffirming the positive impact of the decision on the Company's digital-focussed growth trajectory. The Company expects that this trend of scaling new capabilities across markets will continue to strengthen over the coming years. Outlook □ Collaboration with the Nasscom Gen Al Foundry to stimulate the growth of Gen Al startups LTTS office, Airoli, Navi Mumbai, Maharashtra Business Environment Statements Financial Statutory Integrated Report Discussion and Analysis Management Corporate Overview Integrated Annual Report 2023-24 92 Alliance with Amazon Web Services (AWS) to help global automotive manufacturers accelerate the transition towards SDV, leveraging Gen Al Partnership with Google Cloud to harness the power of its Gen Al technologies and tools for the development of DevX, LTTS' Developer Experience Platform □ Collaboration with NVIDIA to unveil Gen Al and advanced Software-Defined Architecture for Medical Devices Reports At the start of the fiscal year, LTTS successfully closed the acquisition of the Smart World and Communication Business Unit from its parent L&T. The new capabilities unlocked from the merger, including industry-leading expertise in Sustainable Smart Spaces, NexGen Comms, and Cyber Security, have already registered considerable traction amongst LTTS' global customer base. The success was evident in the recent marquee USD 100 million deal win for the delivery of cutting-edge cyber security services. With its cutting-edge technology capabilities, multi- geography presence, and customer-first approach, LTTS continues to reaffirm its leadership of the growing ER&D services segment. LTTS continues to be at the forefront of cutting-edge innovation, partnering with leading technology majors and hyperscalers to enable next-gen solutions and offerings across emerging domains, including AI, Software Defined Everything (SDx), and Cyber Security. These collaborations focus on streamlining new product development, enhancing remote asset management, enabling robust sustenance paradigms, and advancing virtual product design as well as prototyping. As a part of incubating new technologies and demonstrating delivery success, LTIM is doing first-of- a-kind (FOAK) engagements that set up the capability for industrialisation. Additionally, the Company has a Technology Architecture Office with Unit Chief Technology Officers (CTOS) and Cluster CTOs, driven by the Global Technology Office (GTO), leading to forward-looking innovation and solution excellence in delivery with industries. At the forefront of Research & Development (R&D) efforts, the Company has curated a platform called LTIM Crystal that scouts 'Beyond-the-Horizon' technologies and empowers us with future-driven growth strategies and opportunities for research and incubation consideration. Using the above approach, LTIM has evangelised emerging technologies like Generative Al, Explainable Al, Zero Trust Architecture, Platforms at Scale, and Quantum technologies to establish capabilities and their offerings. Significant Initiatives □ A prestigious regulatory body has chosen LTIM for its Next- Generation Data Warehouse implementation □ One of the largest property & casualty insurance companies in the United States has chosen LTIM as a strategic partner for a multi-year application development and maintenance deal □ One of the largest semiconductor manufacturers in the world has chosen LTIM as their key digital transformation partner to modernise its SAP application landscape, enrich user experience, streamline business processes, and deliver contemporary digital operations across both SAP S/4HANA and SAP Cloud Solutions □ A utility company in the Middle East continues to strengthen its relationship with LTIM by signing another 3-year agreement where the Company will support their transformation journey by identifying areas of expansion and optimising the technology landscape A global financial services technology company has chosen LTIM for its Product Development initiatives □ A diversified multinational mass media corporation has chosen LTIM as its preferred ServiceNow transformation partner □ A US-based premier oil and gas producer selected LTIM as their strategic partner for end-to-end technology services A global leader in the design, engineering, and delivery of customised facilities for high-tech industries has selected LTIM as their preferred strategic partner for their Digital Transformation journey over the next five years Outlook Key Deal Wins Globa Learning Cevol Statements Reports Report Discussion and Analysis Overview Financial Statutory Integrated Management Corporate LTIMindtree, Kalinga Campus, Bhubaneswar, Odisha 93 In this environment of restrained client spending, the Company continues to expand its value proposition to become a partner of choice for the clients. By focussing on cross-selling to existing accounts and prioritising Focus 100 clients, the Company is observing multiple deal conversations and wins. 89 DIGITAL MANUFACTURING CENTER OF EXCELLENCE Statements Reports Discussion and Analysis Financial Statutory Integrated Management Overview Corporate Wire Harness Center - Peoria, USA With the completion of the merger integration, the Company is strategically placed to take advantage of the market recovery and further improve its position in the industry leaders' quadrant. A strong order Integrated Annual Report 2023-24 services throughout the product and process development lifecycle. LTTS leverages its deep multi-domain expertise across software and digital engineering, embedded systems, engineering analytics, and plant engineering to create transformative value propositions for clients globally. Headquartered in India, LTTS has over 23,800 employees spread across 22 global design centres, 28 global sales offices, and 104 innovation labs as of March 31, 2024. The Company's global footprint covers 20+ countries across all key geographies, catering to a global clientele of 69 Fortune 500 companies and 57 of the top ER&D firms. LTTS offers its services to customers across five key segments. The Company delivers specialised Transportation Engineering services to global OEMs and Tier 1s, helping accelerate market entry, foster cutting- edge innovation, and drive sustained business excellence. For Industrial Products, LTTS capitalises on its extensive multi-domain expertise across software, hardware, and mechanical engineering to cater to an expanding global customer base. The Company's Telecom & Hi-Tech offerings include services across Telecom, Consumer Electronics, Semiconductors, Independent Software Vendors (ISVS), and Media & Entertainment (M&E). Leveraging its comprehensive chip-to-cloud capabilities – from design and engineering to project management - LTTS helps drive delivery, maintenance, and sustenance of bespoke solutions for a global Plant Engineering clientele. Leveraging over three decades of Medical Device industry presence in combination with cross-vertical engineering expertise, LTTS also works closely with the Top 10 global healthcare providers and device manufacturers. L&T Technology Services Limited (LTTS) is a leading global Engineering Research and Development (ER&D) services provider. LTTS specialises in delivering a comprehensive range of consultancy, design, development, and testing Overview LTIM is stepping into the new financial year with renewed vigour and a stronger foundation to drive revenue synergies. As it reflects on its achievements and looks toward the future, the Company is confident that the insights gained and strategies implemented will enable it to execute better going forward. Finally, the Company is excited to see what the future holds and is committed to making the most of every opportunity that comes its way. L&T TECHNOLOGY SERVICES The positive outcomes of LTIM's positioning as an organisation with scale-expanded capabilities and stronger partnerships continue to reflect in the order inflow and pipeline. Through the year, the Company has pivoted its portfolio to align with the current spending areas and is positioned well to capture the discretionary spend wave when it returns. As the Company continues to negotiate the dynamic terrain of shifting market priorities, rapid technological advancements, and evolving customer expectations, it remains confident of its ability to align clients' operational strategies with their technological ambitions and help them reach a future without limit. inflow and healthy deal pipeline have set the stage for medium-term growth. IT & Technology Services Segment L&T Technology Sere L&T Technology Services - Module X Design Centre, Mysuru, Karnataka LARSEN & TOUBRO 90 LARSEN & TOUBRO Significant Initiatives ABOUT US COLLEGECONNECT PROFESSIONAL SKILLING Statements Reports Report Discussion and Analysis Financial Statutory Integrated Management Corporate Overview Integrated Annual Report 2023-24 96 has over a billion mobile phones and more than 800 million internet subscribers. This is further fuelled by the demand for AI/ML, which requires high computational capability, such as GPUs. India is witnessing a rapid adoption of digital technologies in the overall Governance and Business environment, thereby necessitating the need for a larger number of data centers. The country is experiencing exponential growth in Internet traffic fuelled by 5G, digital commerce, digital entertainment, and the use of social media. India L&T's Data Center is a new business unit of L&T that will offer Colocation Services (space, power, CCTV monitoring, etc.), to MSME and other enterprises. In addition, it shall also offer Cloud Services in Infrastructure as a Service - laaS (viz. application integration services) and Platform as a Service - PaaS (viz. operating systems and database management) models. The necessary ecosystems are in place to offer an integrated offering to customers, including Network and Monitoring services through the NOC. Specialised Colocation for AI/ML/GPU-based workloads for enterprises based on diverse cooling technologies will also be offered. The business, branded L&T-Cloudfiniti, has been launched to provide these services. The Company has committed investments to set up modern state-of-the-art Data Centers at multiple locations in India, starting with Mumbai and Chennai regions. Overview Data Center & Cloud Services Business In FY 2024-25, the business plans to scale up its GMV and revenue with a focus on subscription, market partnership, higher margin product offerings, and expanding financing solutions. Initiated steps to achieve ISO 27001 Compliance □ Providing finance to the Buyer and/or Seller for doing transactions on the platform through Partner Banks or NBFCs. This has helped the MSMEs on the platform in getting liquidity to overcome the working capital gap and has increased their loyalty to the platform for repeat transactions □ Original Equipment Manufacturers (OEMs)-led supply chain strategy for inducting reliable sellers with a good track record in business and ensuring the quality of goods Formulated a central RFQ team to aid the buyers Enabled WhatsApp-based RFQs to improve the response rate by Sellers Launched the SuFin App for buyers, leading to greater ease of usage & convenience The business has taken several new initiatives to catalyse growth and scale up further, such as: Hyperscale Data Center, Kancheepuram, Tamil Nadu IT & Technology Services Segment Business Environment LARSEN & TOUBRO Today, India is one of the fastest-growing data center markets globally, with about 130+ data centers and capacity of ~1000 MW by the end of FY 2023-24. Further, new data centers with 1200+ MW capacity are expected to come up by the end of 2026. Competitive Positioning Integrated Annual Report 2023-24 98 Going forward, the business will continue to leverage its deep rural network, digital customer value proposition and strong data-driven analytics to grow this business vertical further while maintaining superior asset quality vis-à-vis the industry. Rural Group Loans & Micro Finance (part of the product profile of Rural Business Finance) offers sustainable financing to women in rural India through the Joint Liability Group mechanism. The Rural Group Loans & Micro Finance business delivered a healthy growth of 32% y-o-y, achieving a book size of 24,716 crore while disbursing ₹21,495 crore during the year, reinforcing our position as a leading financier in this segment. Through this business, LTF added 15.4 lakh new customers during the year, empowering them to build sustainable livelihoods. LTF's 14K+ strong feet on the street through a wide network of 1,700+ meeting centres (branches) across 14 states help deliver doorstep banking services to these women entrepreneurs, thus fostering the formalisation of credit and financial inclusion in rural India. Over the past 15 years, the business has financed over 1.4 crore women. Business momentum in the industry was also positive, with the industry size crossing 4 lakh crore, supported by tailwinds from a favourable macro environment and stable rural demand. Rural Business Finance RETAIL FINANCE Customer Database Geo Footprint Rural: 1,800+ branches servicing ~2,00,000 villages | Urban: ~150 branches servicing 100+ Cities/Towns 2.3 crore+ 80,037 crore Retail Book LTF's Retail franchise and reach: L&T EduTech LTF is accorded the highest rating of 'AAA' by four credit rating agencies, viz. CRISIL, ICRA, CARE, and India Ratings and has also received leadership scores and ratings from global and national Environmental, Social, and Governance (ESG) agencies. Overview Financial Services Segment Rural business finance FINANCIAL SERVICES SEGMENT LARSEN & TOUBRO 97 The data center industry continues to grow at a fast pace due to technological advancements and market trends. Growing demand for computing and storage from enterprise customers, enhanced cloud adoption, rising rack densities (power consumption in KW), and competitive pricing dynamics present several challenges and opportunities as well. The emergence of use cases based on Generative Al and its applications across various business processes requires the setting up of next-gen Data Centers with resilient high compute workloads, enhanced power usage effectiveness, and blending renewable power in consumption. Such factors augur well for L&T to position itself as a reliable Data Center Service Provider with sustainable practices embedded across the entire life cycle of Data Centers from build to steady-state operations. Outlook The Panvel Data Center of 2 MW is currently operational. The first Hyperscale Data Center at Sriperumbudur, Chennai, will be built in stages with a total capacity of 30 MW. Further investments in new Data Centers at Mahape, Navi Mumbai and Bengaluru, Karnataka, of 20 MW each, will be made over time. With these, a total of 72 MW of DC capacity is being built. Various specialised Colocation services for enterprises are also being explored as an offering through these Data Centers by adopting resilient hybrid Data Center designs catering to medium to high- density compute workloads. Strategic Business Plan The Company is in a position to offer a complete range of IT, ITES, and Managed Services to its customers, including the hosting environment/colocation services. Further, L&T will leverage the expertise of its group companies, such as LTTS and LTIM, in providing value- added services. The Company has the capability to create the complete value chain of Build, Operate, and Manage Data Centers with initial offerings in the form of providing Colocation and Managed services to customers. L&T Finance Limited ('LTF') (earlier known as L&T Finance Holdings Ltd (LTFH)) is a leading diversified Retail NBFC headquartered in Mumbai. A 80,000 crore + strong pan-India Retail franchise built over the past 15 years, the Company is amongst a select cohort of NBFCs classified as Upper Layer (NBFC-UL) under the scale-based regulations of RBI. The business offers financing across the rural and urban ecosystem through Rural Business Finance, Farmer Finance, Urban Finance (which includes Two-Wheeler Finance, Personal Loans, Home Loans and Loan Against Property), and SME Finance. Over the years, LTF has created a 'Right to Win' and emerged as a leading player in Rural Group Loans and Micro Finance, Farm Equipment Finance, and Two-Wheeler Finance. 95 With the aim to achieve USD 1 trillion Digital Economy by 2025-26, the Government of India and the various state governments have come out with many schemes to support the ecosystem of the Telecommunication and Information Technology industries, thereby creating a conducive environment for data center business growth in India. There are a few concerns, like the lack of a unified single window clearance across the country, rising input costs, unavailability of redundant infra such as network and power connectivity from utility providers, and scarcity of skilled manpower resources. Challenges also exist across states for sourcing renewables through Third-Party Open Access (TPOA) as, besides inadequate surplus capacity, it also comes with certain added charges from the States, while third-party group captives (TPGC) require substantial investments in SPV format with developers. □ Getting competitive prices through the Request for Quotation (RFQ) mechanism and online transaction fulfilment Enterprise: This vertical offers upskilling and reskilling opportunities for corporate employees with several L&T EduTech also provides a discussion forum, the National Engineers Ensemble Forum for Knowledge Sharing, and the Microlearning Platform (supported by the All India Council for Technical Education [AICTE]), with free courses for its learners. The forum optimises students' educational efforts and further enhances their continuous learning journey. The two major verticals of L&T EduTech are as follows: College Connect: This vertical aims to narrow the gap between academic learning and practical industrial experience. It offers courses in core engineering, information technology, arts, and science with industry- specific application-oriented knowledge. Aligning to the National Education Policy (NEP) 2020, College Connect offers multidisciplinary programmes which can be integrated into the college curriculum to replace/add on to the credits required for degree programmes. Further, this business vertical organises career guidance sessions, conducts regular faculty development programmes, and offers industry immersion programmes to deliver superior learning experiences to both teachers and students. L&T EduTech has developed a robust Learning Management System, Assessment Engine, Recruitment Automation, and Skill Exchange platform with a wide bouquet of learning & assessment solutions with its learning programmes, assessments & certifications, virtual & hands-on labs, industry capstone projects, instructor-led training, and industry immersion. Blogs L&T EduTech | Transforming Learner's Journey: Hear From Our Students Discover The Incredible impact of Our Core Engineering Courses Student Testimony on L&T EduTech Community Speak IT & Technology Services Segment L&T Edutech, building value for learners, academia and industry Gallery National Talent Hunt 2024 Wraps Up With Enthusiastic Participation Across India in News OTHERS EMERGING TECH VOCATIONAL KNOW MORE Make your students employment ready. Theory & Practical Experience ASSESSMENTS Seairh Newsroom Contact Careers □ Financing support from partner banks and NBFCs □ Logistical support, including free transit insurance The business has catalogued 5 lakh+ Stock Keeping Units (SKUs) in 49 categories. Further, the business has onboarded 42,000+ sellers on the platform and has crossed a Gross Merchandise Value (GMV) of 2,700 crore since inception. Fill the gap between product packages, including .Net, Java, Data Analytics, Cybersecurity, and more. Along with industry-relevant courses, this vertical also focusses on assessments. Further, the robust auto-proctored assessment platform helps organisations in their recruitment process for fresh talent and workforce development. It measures workplace competency in multiple stages of a learner's life. Major Achievements The National Talent Hunt (NTH) 2024, An Initiative By L&T EduTech Aimed At... Over the past few years, India has emerged as the world's second-largest EdTech market. The dearth of industry- based education and the acute need for a skill upgrade among students and professionals in India will result in more industry-led curricula and cross-functional credits. Additionally, digitalisation has made it easier for people to learn at their own pace, anytime and anywhere. Such factors provide a positive outlook for the scalability of L&T EduTech in the medium-term. □ Successfully onboarded over 40,000 students and faculty members in FY 2023-24, along with 9,600 working professionals, onto our platforms In 2023, B2B e-commerce GMV (Gross Merchandise Value) was USD 15 billion in India and is expected to reach USD 55 billion by 2027. Similarly, the total transaction value in the Digital Payments segment in India is projected to reach USD 150-200 billion in the next 3-4 years from the current USD 65 billion. L&T is playing a pioneering role by foraying into digital B2B e-commerce through this platform with the objective of bringing about scale and speed in supply chains, procurement processes, trade financing, and logistics, thereby helping the Indian MSME sector, which is expected to benefit through this transformation. building & construction materials, electrical & electronics equipment, machinery tools & mechanical equipment, packaging, printing & office supplies, etc. L&T-SuFin is a B2B digital marketplace platform which was launched in March 2022 for buyers and sellers dealing in industrial and construction goods to connect in an efficient & transparent manner. The platform enables sellers to expand their sales reach and buyers to find the right products at an optimal cost and quality. The platform offers a wide product range in industrial supplies & consumables, L&T-SuFin □ Successfully facilitated the physical delivery of education to 15K+ students through the Naan Mudhalvan initiative Launched channel business initiatives with CADD Center (Chennai) and IITM Pravartak Technologies Foundation (Chennai). Similarly, the pilot course launched in Coursera has yielded positive feedback from global learners Initiated export order business for Enterprise business, with the first signup achieved with Vulcan Green Steel in Oman Integrated Gen Al into our assessment engine, enhancing the effectiveness and efficiency of our educational assessments L&T-SuFin, India's first online business platform for industrial and construction products, integrated with finance and logistics options Statements Reports Major features offered by L&T-SuFin include: Statutory Financial Integrated Report □ Conducted over 5,90,000 assessments, reflecting the efficacy and scalability of our educational offerings □ Secured major accounts, both domestically and internationally, including prominent institutions such as Manipal Group, University of Petroleum and Engineering Studies, Oman Education and Training Investments, Wolters Kluwer and work scope enhancements from Chitkara University □ Formed strategic partnerships with 17 institutions for integrated programmes, with over 20 more in the pipeline Witnessed rapid traction in enrollments in our Employability Skilling Programme □ Discovery of Industrial Products and Sellers through an efficient digital process 94 Secured significant orders through government channels, with Naan Mudhalvan (Tamil Nadu Skill Development Corporation) and Additional Skills Acquisition Programme (Kerala), with further prospects being created in UP and Gujarat as well Integrated Annual Report 2023-24 Corporate Management Overview Discussion and Analysis However, the NBFC sector remained resilient due to substantial capital buffers, improving asset quality and Despite the growth momentum, RBI targeted persistent high food inflation by remaining firm and maintaining the policy repo rate at 6.50% through FY 2023-24. Additionally, the average liquidity in the banking system was deep in the deficit zone between September 2023 and the end of March 2024, partly due to a sharp cut in government spending and partly due to a slower pace of banks' deposit growth vis-à-vis credit growth. (b) Strong twin balance sheets of banks and corporates (c) Front-loading of public CapEx 100 (a) Macro-financial stability b) Retail Growth >25% CAGR Business Environment The Wholesale Finance portfolio comprises Real Estate Finance and Infrastructure Finance. In line with the Lakshya 2026 strategy of Retailisation, LTF was able to accomplish an accelerated reduction of its Wholesale Finance portfolio. The book now stands at 5,528 crore, which includes the Real Estate book of 2,337 crore and the Infrastructure Finance book of 3,191 crore as of FY 2023-24, a steep reduction of 87% over the past two years. LTF expects this book to come down further over the near to medium-term. WHOLESALE FINANCE The SME sector continued its robust growth momentum in FY 2023-24. This augured well for LTF's SME Finance business (pilot launched in FY 2021-22), which grew to 3,905 crore with a customer base of 20,000+. During FY 2023-24, the Company disbursed 3,657 crore. LTF added new locations during the year, taking the total geo presence to 109. LTF also has strong channel partnerships, which it will leverage to grow this business while strengthening its digital journeys and product offerings going forward. Integrated Annual Report 2023-24 □ SME Finance Notwithstanding the uncertain global economic growth paradigm, the Indian economy continued its growth momentum in FY 2023-24 through: 75 Major Achievements Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial Reports Statements robust earnings. NBFC-ULS recorded healthy growth in H1-FY 2023-24, and their GNPA ratio gradually improved while their capital position remained robust. During H1- FY 2023-24, NBFC loan growth (y-o-y) was highest for housing (58.9%), followed by MSME (57.4%), agriculture (52.0%), and microloans (50.7%). This reflects the NBFC sector's thrust on 'financial inclusion'. According to RBI, the increase in risk weights (on personal & NBFC loans) in November 2023 is pre-emptive in nature and in the interest of macro-financial sustainability. □ Achieved Lakshya 2026 goals Two Years in Advance In May 2022, LTF had, in line with parent L&T's Lakshya strategy, outlined the following Lakshya 2026 goals: a) Retailisation >80% c) Retail Asset Quality with Gross Stage 3 <3% and Net Stage 3 <1% During FY 2023-24, LTF calibrated its growth in the portfolio to focus on revamping the digital journeys to provide best-in-class customer offerings. Going forward, LTF will further scale this business through 'cross sell' to its existing customers and large strategic partnerships to enhance customer acquisition while further sharpening our credit underwriting. Housing finance This business was started three years ago with the aim of leveraging its strong Two-Wheeler customer database. Over the years, LTF built a book size of 6,440 crore as of FY 2023-24 and disbursed 4,285 crore with a share of repeat customers at 51%. The average ticket size for our Personal Loans portfolio is ~ 1.5 lakh. Our D2C PLANET app (rated 4.4 on Playstore and 4.3 on App Store) acts as an important customer acquisition channel, providing digital geo-agnostic Do-It-Yourself (DIY) journeys to enhance customer experience. Corporate Overview Slatt Further, attracting the desired brands for the remaining space in the malls, in line with the updated positioning, remains a focus area for FY 2024-25. After the successful monetisation of the Raidurg TOD undertaking, other monetisation transactions are being proposed. d) Retail RoA 2.8% - 3% 108 Integrated Annual Report 2023-24 Farmer finance Management Discussion and Analysis Integrated Report Statutory Financial Reports Statements ⚫ Farmer Finance □ Personal Loans LTF, through its Farmer Finance vertical, is one of the dominant farm equipment/tractor financiers in the country, having financed close to one lakh tractors in FY 2023-24. Even in a year when the domestic tractor industry remained subdued, LTF leveraged its strong dealer and OEM network coupled with a best-in-class digital & data-driven platform to grow the book by 8% to 13,892 crore with disbursements of 6,848 crore in FY 2023-24. The business increased its focus on customer retention by leveraging its 11 lakh+ farmer database, resulting in a growth in 'upsell' disbursements. With its deep granular network and a 19-year legacy in the tractor financing business, going forward, LTF aims to leverage its strengths in order to gain market share in this business while also targeting the farmer ecosystem through launching new products addressing financing requirements at each stage of the Agri Value chain. Two-Wheeler Finance The two-wheeler industry made a strong comeback in FY 2023-24, recording an impressive growth rate of 9% in two-wheeler sales, buoyed by a sustained revival in demand in both urban and rural markets. LTF, an urban and semi-urban player, leveraged the tailwinds of this increased demand through higher finance penetration and grew the Two-Wheeler Finance book to 11,205 crore, a growth of 25% y-o-y. LTF financed around 9 lakh units of two-wheelers during the year with disbursements of 8,586 crore, reflecting its strong position and market share in the two-wheeler financing space. The strength of the business lies in its tie-ups with leading OEMs, its 10,500+ strong sourcing network across 109 locations in urban areas, coupled with our superior customer value proposition. The digital proposition backed by algorithm-driven centralised underwriting enables the company to deliver industry-leading TAT. LTF expects to continue growing this business through both horizontal and vertical deepening of its distribution network. LTF is strategically shifting its focus towards increasing its share of prime consumers and also gaining market share in the financing of electric Two-Wheelers. □ Home Loans and Loan Against Property (LAP) LTF's Home Loans and LAP financing business gained momentum during the year with 7,545 crore in disbursements. Supported by a growth in the mortgage market, its book grew 38% to 18,443 crore, with Home Loans and LAP at 14,550 crore and crore, respectively. The target customer segment is salaried individuals as well as self-employed non- professionals in major cities in India. 3,893 In FY 2023-24, LTF did significant work towards redesigning the digital journeys with an aim to provide best-in-class customer experience. This will strengthen its customer value proposition coupled with expanding its product offerings and deepening its channel partnerships, which will enable the portfolio to deliver strong growth in the future. 99 LARSEN & TOUBRO Financial Services Segment SME finance URBAN FINANCE In FY 2023-24, LTF achieved all its Lakshya 2026 goals two years in advance, thereby transitioning to become a Retail NBFC. 2022-23 forward, the aim is to make the achieved Lakshya goals sustainable through the convergence of Lakshya goals at the LTF consolidated level. Statutory Financial Reports Statements recruitment of a second line of leadership comprising national sales heads in growth businesses of Rural Group Loans & Micro Finance, Farm Equipment Finance, Two- Wheeler Finance, and Personal Loans. During the year, LTF received a sanction of USD 125 million each from multi-lateral institutions - the Asian Development Bank (ADB) and Japan International Co-operation Agency (JICA) for social and sustainable financing. Risk Management Framework LTF has a robust framework in place to effectively manage risks. The Risk Management Committee, which constituted by the Board, is responsible for overseeing the Risk Management Framework. The Framework covers the Company's risk appetite statement, risk limits, risk dashboards, and early warning signals. With the changing business landscape and the emergence of new risks such as digital and data privacy risks, reputational risks, and climate-related risks, LTF is building newer risk frameworks to pre-empt and manage such new and emerging risks. Credit Risk Credit risk constitutes the most significant risk for the company. To demonstrate strength in credit risk management, a new age underwriting architecture has been put in place which focusses on the creation of a robust and resilient portfolio. The customer-centric underwriting engine of LTF is equipped to effectively identify different customer segments and tailor the risk assessment and underwriting processes to each segment. LTF has also invested in improved digital analytics as well as new-age credit underwriting in order to ensure that multiple variables/parameters are considered to arrive at the optimal credit decision. Further, the company uses advanced dashboards, which provide real-time identification of trends and breaches, empowering it to manage risks proactively and take immediate action to mitigate any potential threat. By analysing behavioural patterns, alternative data sources, geopolitical data, and macroeconomic factors, LTF can make informed decisions and prevent customers from being delinquent in the future. Steps in this regard have been taken to build a new-age underwriting architecture, stringent adherence to the prudent risk norms, and diligently follow the institutionalised processes. All these measures have led to improved asset quality amid volatile times. Market/Liquidity Risk Adoption of a prudent approach helps protect the Company from market and liquidity risk. LTF maintains a positive liquidity gap on a cumulative basis in all the time buckets up to 1 year. A Contingency Funding Plan (CFP) has also been implemented by regular monitoring to respond to severe disruptions that might affect the ability to fund some or all activities in a timely manner and at a reasonable cost. A governance structure is defined within the CFP to invoke Crisis Management measures in case the need arises. LTF ensures a positive interest rate sensitivity gap over a one-year horizon. This acts as a mitigant against interest rate risk in the Balance Sheet. 103 LARSEN & TOUBRO Tree Plantation drive under Project Prakruti, Tumkur, Karnataka Financial Services Segment IT Security Risk LTF has set up an Information Security Management System (ISMS) for effective management & operations. The company is also certified as ISO 27001 compliant. The Company's Digital Platform has a 3-Tier Security Architecture with inbuilt disaster recovery along with multiple-layer security, protecting IT networks, websites & applications, databases, and end-user laptops/desktops for data leakage, Denial-of-Service attacks, and ransomware and malware. Further, access control and system health and availability monitoring are undertaken 24X7. The Company's security team conducts Vulnerability Assessments on all critical applications, system and network devices, and mobile applications to proactively find any security bugs, misconfiguration, or missing critical security patches that can be exploited. LTF also engages with third parties to conduct vulnerability assessments and penetration testing to ensure security against cyberattacks. As per India Ratings, the growth rate in AUM of NBFCs to moderate in FY 2024-25 compared to FY 2023-24. Following the increase in risk weights by the RBI, the cost of funds for NBFCs from banks has increased, and it is likely to remain elevated in FY 2024-25. The incremental funding requirement for the NBFC sector is expected to be 4.5 trillion in FY 2024-25, and the volume of public NCDs might go up in FY 2024-25. Financial performance of the segment The sustained focus on bringing employees back to work, as well as an increase in workforce at most corporates, is expected to support increased ridership in FY 2024-25. Implementation of OTS is expected to make Metro travel effortless and thereby enhance the passenger experience. The use of Business Intelligence tools for the analysis of business & passenger data is expected to drive improved decision-making and optimisation of operations. Integrated Report Discussion and Analysis Management Corporate Overview □ LTF becomes a Single Lending Entity Structure Simplification of corporate structure has been at the core of LTF's strategy since 2016. In FY 2023-24, LTF completed the merger of L&T Finance Holdings Ltd. and its wholly owned lending subsidiaries, L&T Finance Ltd. and L&T Infra Credit Ltd., resulting in the creation of a single lending entity - L&T Finance Holdings Ltd. Furthermore, the name L&T Finance Holdings Ltd. has been changed to L&T Finance Ltd. □ PLANET App crosses 91 Lakh Downloads In FY 2023-24, the PLANET app (rated 4.4 in Playstore & 4.3 in Appstore) crossed 91 lakh downloads, thereby achieving an important milestone within two years of its launch. Of this, over 11 lakh customers are rural. Through PLANET, LTF has sourced 5,700+ crore and collected 1,100+ crore. 75% of servicing is handled by PLANET, thereby providing a seamless servicing experience to its customers. □ Digital Finance Delivery in Rural India 100% of disbursements in Rural businesses are made through digital channels. The increased focus on enhancing collections through digital channels in Rural businesses has resulted in 25% of the Rural collections being made digitally in Q4 FY 2023-24 compared to 14% in Q1 FY 2023-24. 101 LARSEN & TOUBRO Financial Services Segment Personal finance Combining Growth with Sustainability ■ LTF as a business is aligned with Sustainability goals, with ~50% of the loan book financing sustainable livelihoods and 67% of the LTF workforce employed from Rural areas. On the ESG front, LTF has, through the 'Environment' goals, shifted to green power, covering 39% of green usage in its operations, achieved 'Social' goals through increase in the number of women Micro Loan borrowers to 64.20 lakh+ in FY 2023-24 and created One Single Lending Entity through the 'Governance' goals. Significant Initiatives Thus, as of March 31, 2024, it stands at a Retail portfolio mix (i.e. Retailisation) of 94% with Retail book size crossing a milestone of 80,000 crore. Going Having achieved Lakshya 2026 goals at the Retail level, going forward, the focus would be on reaching 2.8%-3% ROA by FY 2025-26 at a Consolidated level and building a sustainable & predictable Retail franchise. Towards this, LTF defined five pillars as below: LTF leverages the strengths of its presence, distribution franchise, digital delivery & TAT to grow its fulcrum businesses of Rural Group Loans & Micro Finance, Farmer Finance and Two-Wheeler Finance. This has led to a sustainable customer base of over 2.3 crore sourced through the rural and urban funnels. □ Sharpening Credit Underwriting LTF endeavours to create a next-gen integrated underwriting platform leveraging multi-axes underwriting through best-in-class technology with a combination of scorecards comprising credit bureau, account aggregator framework, and alternate data signals. Implementing Futuristic Digital Architecture LTF is re-architecting its tech stack to build a solid, future-ready digital backbone across the domains of customer experience, process engineering, IT infrastructure, and information security. This will enable LTF to provide innovative financial solutions, seamless customer journeys, a faster go-to-market for new products, and faster collaboration with partner ecosystems. □ Heightened Brand Visibility With an aim to establish the L&T Finance brand, the Company launched several branding campaigns across rural and urban areas through various initiatives, viz. print media, outdoor media including billboards, airport advertising, rural wall branding, digital media by sponsoring global sporting events, participation in leading industry forums & fests, etc. LTF also launched its sonic identity during the year to increase its brand recall & capture customer mindshare. □ Capability Building LTF strengthened leadership in critical functions by appointing seasoned industry professionals for the position of Chief Digital Officer. Further, the Company created two new positions and recruited a Chief Al & Data Officer and Chief Marketing Officer. LTF has strengthened its internal talent pool through the 102 Integrated Annual Report 2023-24 Two-wheeler loans □ Enhancing Customer Acquisition Outlook 85565 Robust and affordable last-mile connectivity for commuters clearly helps in enhancing ridership on the Metro system. In this regard, L&TMRHL has added exclusive shuttle services to and from metro stations to corporate offices. Also, it has enhanced its partnership with Telangana State Road Transport Corporation (TSRTC) for feeder services. The focus also remains on enhancing parking areas across the Metro network and enhancing the commuter experience by way of facilities such as escalators, elevators, feeder bays, etc. DEVELOPMENT PROJECTS SEGMENT LARSEN & TOUBRO 105 for the year registered a growth of 20% on a y-o-y basis, reflecting higher credit demand in the various retail 56,293 crore Disbursements of loans and advances at NIM + Fees% Loan Book 2023-24 0. 20000 8.7 40000 segments due to the overall improvement in economic activity. The Loan Book stood at 85,565 crore as of March 31, 2024, registering a growth of 6% over the previous year, consequent to higher retail disbursements. The Net Interest Margin (NIM), including fee income, improved from 8.7% to 10.7%, mainly due to the increase in the share of the retail portfolio coupled with higher fee income, partly offset by a marginal increase in the borrowing rates. The Gross Non-Performing Asset (GNPA) ratio improved to 3.15% as on March 31, 2024, from 4.74% as on March 31, 2023. The net NPA ratio has improved to 0.79% as on March 31, 2024, against 1.51% as on March 31, 2023. 10.7 Development Projects Segment The Development Projects Segment comprises: a) The Hyderabad Metro Rail project, executed through a wholly-owned subsidiary, L&T Metro Rail (Hyderabad) Limited b) The Thermal Power Plant project, executed through Nabha Power Limited, a subsidiary of L&T Power Development Limited 1000- 715 2000- 3000- 4000- 5000 5029 60000 6000 crore 1333 5628 11.9% Revenue from Operations and EBITDA Financial performance of the segment The Company, on April 10, 2024, concluded the sale of its entire stake in L&T Infrastructure Development Projects Limited (L&T IDPL), a joint venture primarily engaged in the development and operation of toll roads and power transmission assets, to Epic Concesiones Private Limited, an investee company of Edelweiss Infrastructure Yield Plus Strategy, managed by Edelweiss Alternative Asset Advisors Limited. The business is exploring additional non-fare revenue opportunities through various measures such as consultancy services to other metros, leasing out Optical Fiber networks, letting out spaces for erecting mobile towers and setting up EV charging stations (55 charging points already available), Royalty earnings from QR Ticketing and OTS partners, etc. L&TMRHL strongly believes in safety and has put mechanisms in place to achieve this objective. The Automatic Train Protection (ATP) system, the station equipment viz., the Computer-Based Interlocking (CBI) and wayside ATP are arranged to ensure safe and uninterrupted train operations. Further, Passenger Emergency Stop Plungers are provided on each platform and in station control rooms (SCR) to stop a train immediately in case of emergency. 0 80000 100000 - The segment's revenue improved by a modest 4.2% y-o-y at 13,109 crore for FY 2023-24 due to the sell- down of the wholesale loan book while scaling-up retail disbursements. The core strategy for the Financial Services 2023-24 2022-23 0 As per CRISIL Ratings, India's GDP growth is likely to moderate to 6.8% in FY 2024-25. It sees greater transmission of policy rate hikes, impact of regulatory actions on unsecured lending, reduced fiscal impulse to growth, and uneven economic growth for key trade partners as likely factors which may weigh in on the GDP growth for FY 2024-25. On the other hand, a gradual pick-up in private CapEx and the government's continued support towards infrastructure will be some of the positive factors. 4000 Outlook 13109 4.2% 8000 12000- 12575 Revenue from Operations 16000 crore 104 Integrated Annual Report 2023-24 Inclusion समावेशन) aul, Bihar) Finance crore Loan Book and NIM + Fees% business in the Lakshya 2026 strategic plan revolves around its transformation into a full-scale retail-oriented, digitally- enabled business. Several initiatives have been completed to exit the wholesale exposure, resulting in 94% of its loan book being retail credit as of March 31, 2024. 'Digital Sakhi' - Flagship CSR project to promote women entrepreneurship सखी डिजिटल Statements 80893 Reports Statutory Integrated Report Discussion and Analysis Overview Management Corporate L&T Finance Financial 2022-23 7000 EBIDTA Hyderabad Metro is the safest, cleanest, fastest, and most reliable urban transport system in the city of Hyderabad. Additional benefits like reserved seats for senior citizens and ladies, WhatsApp complaint services, and various promotional schemes are introduced regularly to incentivise commuters to shift their transport preferences to Metro rail. In addition to reduced noise pollution, the project is also facilitating a reduction in carbon footprint, being a non- fossil fuel mode of transport. The average daily ridership in FY 2023-24 was 4,42,000 as against 3,61,000 in FY 2022-23, with all-time peak traffic of 5,47,000 achieved in one of the days. This increase in average ridership at Hyderabad Metro is the best among all Indian Metro Rail Projects post-COVID. With a view to enhancing the vibrancy of L&TMRHL'S commercial spaces in the post-COVID scenario, the business has improved ambience and aesthetics at all four malls, viz. wall panelling, public seating, horticulture, convenient entry & exit areas, toilets, etc. Major Achievements QR ticketing (Digital & Paper), introduced first by L&TMRHL, has made travel contactless, easy, and hassle-free for commuters. Further, L&TMRHL was India's first metro rail to roll out WhatsApp E-Ticketing System. Most of the Metro tickets are now issued in a paperless format, thereby reducing paper consumption. The repositioning of two malls - Erramanzil Mall as a premium mall and HITEC City Mall as an electronic and entertainment destination - has attracted important retail brands. Advertisement space on the project assets offers good revenue potential by launching various innovative products and services, including digital advertisements. Non-fare revenue generation through cross-selling of products to commuters is being actively pursued. Telecom (i.e., Optical fibre & towers) requirements are a major contribution to revenue in this segment. 107 max Saomas Stop Next Galleria Punjagutta, Hyderabad, Telangana HYDERABALY NEXT EXILERGO Development Projects Segment The business has also created 3.5 lakh sq. ft. of retail/ commercial spaces across all its 57 stations for earning rental incomes from these areas. Station retail occupancy levels have crossed 60%, a significant jump from the below 20% levels during the COVID-19-affected years. Revenue As a next-level upgrade of its ticketing system, L&TMRHL is working towards introducing the Open-Loop Ticketing System (OTS) in FY 2024-25. This will aid digital payments by commuters. Significant Initiatives With a view to increasing the use of green energy, the business has replaced 11% of its grid power requirements for Metro operations with captive solar power of 9.0 MWp. Solar panels have been installed on the rooftops of Metro stations and in the depot areas. Another 3 MWp of Solar capacity is expected to be commissioned by December 2024. Further, the SPV has also created 155 rainwater harvesting pits at various stations & depots, in which approximately 58 million litres of water are harvested per year. Business Environment The Concession Agreement also includes real estate development rights of 18.5 million sq. ft. in the form of Transit Oriented Development (TOD), of which 3.625 million sq. ft. has been monetised to a third-party investor. In addition, L&TMRHL has developed and operationalised 1.20 million sq. ft. of leasable area across four retail malls. The occupancy in these malls is more than 80% at the end of FY 2023-24. L&TMRHL is targeting the maximisation of upfront revenues from its TOD rights by monetising these rights to third-party investors. A new business model of upfronting revenues from TOD is being worked upon with all the stakeholders involved. LARSEN & TOUBRO Hyderabad Metro Rail Project - the world's largest PPP project in the Metro Sector, Telangana The segment reported an operating profit of ₹1,333 crore for FY 2023-24, higher than the 715 crore reported in FY 2022-23. The increase is mainly on account of the monetisation of commercial property in Hyderabad Metro SPV. The Hyderabad Metro Rail system consists of three elevated corridors from Miyapur to L.B. Nagar, Jubilee Bus Station to Mahatma Gandhi Bus Station, and Nagole to Raidurg, covering a network of 69.2 km. The metro rail system was commissioned in phases, with the final stretch being put into commercial operation in February 2020. The segment recorded revenue of 5,628 crore for the year ended March 31, 2024, higher by 11.9% over the previous year. The growth in revenue is mainly due to increased Metro ridership in Hyderabad coupled with the monetisation of commercial property during the year. Hyderabad Metro extends ~70 km across three lines, easing commuting woes, Telangana 2023-24 The funds employed by the segment as on March 31, 2024, at 19,192 crore, was lower by 2.8% compared to March 31, 2023, mainly due to the annual amortisation of intangible assets and sale of commercial property. L&T METRO RAIL (HYDERABAD) LIMITED Overview 106 Integrated Annual Report 2023-24 L&T Metro Rail (Hyderabad) Limited (L&TMRHL) is a special purpose vehicle (SPV) created to undertake the business of constructing, operating and maintaining a Metro Rail System, including Transit Oriented Development (TOD) in Hyderabad on Design, Build, Finance, Operate and Transfer (DBFOT) basis under a Concession Agreement signed between the SPV and the Government of Telangana. The remaining period in the concession is approximately 48 years, with further extensions available as per the conditions set out in the Concession Agreement signed with the Government of Telangana. Corporate Overview Statements Reports Discussion and Analysis Financial Report Integrated Management Statutory Management On the fuel side, coal supply may continue to pose challenges. Anticipating the high demand, the Ministry of Power (MOP) extended the mandatory 6% blending of imported coal till June 2024 for all thermal power plants. The Ministry of Environment, Forest and Climate Change (MOEF&CC) has notified the Agro Residue Utilisation by Integrated Annual Report 2023-24 Thermal Power Plants (TPPS) Rules, 2023, on mandatory co-firing of crop residue pellets with coal in TPPS in the National Capital Region (NCR) and adjoining areas, with environmental compensation provision for non-compliance applicable from FY 2024-25 onwards. Recently, the Ministry of Power (MOP) has notified the Late Payment Surcharge Amendment Rules 2024, under which Generators will have to mandatorily offer un-requisitioned surplus power in exchange. This has been done to ensure that any unused surplus power is fed into the grid to meet shortages, especially during the high demand periods. NPL expects to commission Flue-Gas Desulphurisation (FGD) for both units during FY 2024-25, thereby complying with the new environmental norms ahead of the revised mandated deadline. Corporate Major focus areas for NPL during the coming year would be Health, Safety and Environment (HSE) compliance, maximising plant availability, improving operational efficiency, commissioning of FGD, securing adequate and the right coal, resolution of pending litigations, and digitalisation initiatives for higher productivity. 110 'OTHERS' SEGMENT Statements Management Discussion and Analysis Integrated Report Statutory Financial Reports Artist's Impression The Gateway, Sewri, Mumbai, Maharashtra The 'Others' Segment comprises: a) Realty Business b) Industrial Machinery, Products & Others comprising Construction & Mining Equipment, Rubber Processing Machinery, and Industrial Valves Overview Corporate Overview Discussion and Analysis Development Projects Segment Statutory c) Smart World & Communication (Residual portion) In FY 2024-25, the average power demand in Punjab is expected to rise to ~8800 MW (Peak 16,000 MW), and as a result, NPL is expected to operate at a high PLF of ~86% and remain at the top of the merit order among the thermal power producers within the state. Outlook □ NPL railway siding connected with the Dedicated Freight Corridor Corporation of India (DFCCIL) network □ Annual PLF: 84% vs all India thermal average: 69% Further, the highest ever monthly PLF of 97.6% was achieved in August 2023 Annual PAF: 94%, highest ever in the NPL history and ~99% during the critical paddy season Major Achievements Nabha Power Plant - Control Room, Rajpura, Punjab LARSEN & TOUBRO 109 Despite multiple challenges, NPL made every possible effort to secure coal from various CIL subsidiaries while minimising the reliance on costly imported coal, thereby ensuring adequate coal supply, further resulting in uninterrupted power supply at an affordable cost to the State of Punjab during the year. The electricity demand in Punjab remained stagnant during the year, largely on account of unprecedented rains in the state in Q1, during which the demand had dropped substantially. The average demand growth in Punjab has remained sluggish at ~1% in FY 2023-24 (~8040 MW- FY 2023-24 vs ~7978 MW- FY 2022-23). Integrated Report Business Environment is operated by an in-house team of experienced operations and maintenance professionals. under an allocation from the State Government. The plant The plant sources its fuel from the subsidiaries of Coal India Limited (CIL) under a 20-year Fuel Supply Agreement (FSA). The FSAs are for a total annual contracted quantity of 52.4 Lakh MT. The Company has secured approvals to arrange coal from alternate sources to make up for any shortfall in the supply of coal. The Bhakra-Nangal distributary is a perennial source of water for the plant NPL owns and operates a 2 X 700 MW supercritical thermal power plant at Rajpura, Punjab. The entire power generated from this plant is sold to Punjab State Power Corporation Limited (PSPCL) under a 25-year Power Purchase Agreement (PPA), which is effective till the year 2039. Overview Nabha Power Limited (NPL) The Hyderabad Metro Rail is recognised as an environment- friendly, safe, fast, and reliable mode of transport, incorporating the best industry practices. With the proposed Phase-2 expansion of Hyderabad Metro by the Government of Telangana in the medium-term, the reach of the metro rail system will increase across the city and significantly enhance the average ridership in the medium to long-term. The transaction documents for these deals have been submitted for approval by the Government. 2x700 MW Supercritical Thermal Power Plant, Rajpura, Punjab Statements Reports Financial The power plant has been running successfully for over ten years with an availability of over 85%. The plant has been the most reliable source of power for the State of Punjab and has supported its requirements with uninterrupted supply during peak season. NPL also happens to be the lowest cost coal-based power producer within Punjab with the best operational efficiency. L&T completed the divestment of the carved-out portion of Smart World & Communication business to L&T Technology Services Limited (LTTS) on April 01, 2023. The funds employed by the segment as on March 31, 2024, at 7,975 crore, have increased by 1.7% over the previous year, largely in line with the previous year. Revenue from Operations and OPM% 115 LARSEN & TOUBRO GD 705 Motor Grader Financial performance of the segment KOMATSU Others Segment Construction Equipment & Others Overview The Construction Equipment & Others (CE&O) business includes the manufacture and marketing of construction and mining equipment and equipment for the tyre manufacturing industry, broadly segregated into Construction & Mining Machinery (CMM) and Rubber Processing Machinery (RPM). CMM further comprises the Construction & Mining Equipment business unit (CMB) within L&T and L&T Construction Equipment Limited (LTCEL), a wholly owned subsidiary of L&T. The CMM division is engaged in the business of distribution and after-sales support for hydraulic excavators and dump trucks manufactured by Komatsu India Private Limited (KIPL) and other mining and construction equipment manufactured by Komatsu worldwide. It also handles the distribution and after-sales support for a range of construction equipment, including wheel loaders, vibratory compactors, and hydraulic excavators manufactured by LTCEL. In addition, the business handles distribution and after-sales support for other mining equipment, viz., surface miners, sand plants, crushing solutions, and apron feeders manufactured by L&T's Minerals & Metals business in Odisha. LTCEL, located in Doddaballapura, near Bengaluru, Karnataka, manufactures vibratory compactors, wheel loaders, hydraulic excavators, asphalt paver finishers, pneumatic tyred rollers, skid steer loaders, hydraulic power packs, cylinders, pumps, motors, and other components. The RPM business, located in Kancheepuram near Chennai, is engaged in building rubber processing machines and tyre automation systems for the global tyre industry and has supplied equipment to various tyre majors in over 46 countries across the globe. The division also supports certain customers in the tyre industry with 'build to print' products and customised machinery as well. The Product Development Centre (PDC), based in Coimbatore, with its highly skilled design team, renders engineering and product development support for CMM and RPM businesses. Business Environment Construction & Mining Machinery Business (CMM) The investment in the construction and mining sectors is one of the key demand drivers of the CMM business. In FY 2023-24, the Government's continued thrust on infrastructure building was evident from higher budgetary allocations for highway construction. However, due to factors such as state elections, erratic monsoons, and floods in parts of Northeast India, the road construction industry witnessed subdued activity during the year. 116 Integrated Annual Report 2023-24 AJA AVON PC 2000 Hydraulic Excavator and HD 785 Dump Truck India's commercial real estate is set for strong growth, driven by robust macroeconomic fundamentals, domestic consumption resilience, and cost-effective business operations that attract corporate offices. The emerging markets viz. Data Centers, Industrial Parks, and Flex Spaces (a hybrid of industrial and office spaces) are gaining traction and are likely to witness rapid growth. Environment, Sustainability, and Governance are the key variables for achieving success in the Indian real estate industry. Transparency and stakeholder interaction are becoming increasingly important. Such growing awareness places developers like L&T Realty in a strong position. Corporate Overview The reintroduction of back-to-office and redundancy of remote working have positively affected the residential real estate industry widely. Also, many corporates and offices that adopted the remote working model earlier will now be required to expand their employee accommodation base, leading to a surge in property demand. Despite price hikes, affordability is improving across Management Discussion and Analysis Integrated Report Statutory Financial Reports Statements Back-to-office policies of corporates and demand for Global Capability Centres (GCC) are expected to keep the momentum intact. This year's improved investor and developer sentiments have made the commercial and retail real estate categories more vibrant. The increasing number of Real Estate Investment Trusts (REITs) is an encouraging sign, further facilitating faster recycling of capital in an otherwise capital-intensive sector. Major Achievements □ Launched three new residential projects: The Gateway (Sewri), Island Cove (Mahim), and Avinya Enclave (Chennai Innovation Campus) □ Inauguration of Phase 1 comprising two towers, 'Ananda I' and 'Ananda Il' in Chennai Innovation Campus □ Hand over of Residential spaces: ■ Around 0.88 million sq. ft. in Seawoods, Navi Mumbai Approx 0.55 million sq. ft. in Raintree Boulevard, Bengaluru Leasing and Sale of Commercial Office spaces: ■ Leased Tech Park 1 at Bengaluru with an area of 1.13 million sq. ft. ■ In Seawoods, a commercial tower with an area of 1.02 million sq. ft. sold in March 2024 Outlook Strong sales momentum witnessed in FY 2023-24 is likely to be sustained during FY 2024-25 as well. Residential inventories are low, and mortgages have remained flat. Going forward, interest rate cuts will further add tailwinds to the momentum. markets as income growth outstrips price changes. A fear of increased rates in future is tempting home buyers to lock in the price today. Further, changing demographics, viz. rapid urbanisation, family nuclearisation, rising income levels, and renewed need for home ownership, are expected to drive growth in residential real estate. Homebuyers' preferences for bigger homes, large-gated communities, better amenities, and attractive pricing will sustain the demand for premium housing. Management Integrated Statutory Received the Best Service Partner of the Year award from Tata Steel Rubber Processing Machinery Business (RPM) □ Developed and exported the biggest Off The Road (OTR) Hydro Mechanical Tyre Curing Press (HMTCP) to Continental Tyres, Portugal □ Developed and supplied tyre Building Machines to Yokohama, India □ Successfully commissioned the first-ever Hydraulic Tyre Curing Press for Bridgestone, USA Product Development Centre (PDC) The PDC, along with LTCEL, designed and developed a solar-powered mobile cart (solar E-cart), which is environmentally friendly uses an alternate power source □ PDC, along with LTCEL, designed and developed Cam Injection Car for the Mumbai-Ahmedabad High-Speed Rail project □ Developed and rolled out prototype of wheel loader, vibratory compactor, excavator, pneumatic tyre roller, and skid steer loader as required under the new CEV-V emission norms Truck Bus Hydraulic Tyre Curing Press Significant Initiatives Construction & Mining Machinery Business (CMM) □ Launch of new variants of Komatsu excavators PC81 and PC136 □ Introduction of a long-term Machine Care Programme (MCP) of 5 years/12,500 hours for various Komatsu excavator models Launch of new Komatsu 3-ton excavator PC35MR 3T and entry into mini excavator segment □ Collaborated with Komatsu India to increase localisation content to a minimum of 50% in their 60T dump trucks Introduction of equipment performance system in mining equipment to help customers monitor their entire fleet performance on a daily basis Rubber Processing Machinery Business (RPM) □ Formation of Manufacturing Engineering & Systems (MES) to achieve uniform processes/practices on the shop floor and enhance safe working conditions Model Vendor concept, which ensures the process improvements through structured training programmes on planning, procurement, quality, inventory, tooling, safety, etc., is being extended to vendors 118 Integrated Annual Report 2023-24 □ Supply of 1000th apron feeder during the year The largest limestone crusher, 2000 TPH, was commissioned at JK Cement, Panna Off The Road Mechanical Tire Curing Press Segment LARSEN & TOUBRO Financial Discussion and Analysis Report Reports Statements PC 2000 KOMATSU In the mining sector, coal and iron ore production registered a growth of 11% and 7% respectively over the previous year. In the cement sector, the installed capacity increased from 590 MT to 620 MT, with overall production moving higher to 435 MT in FY 2023-24. The market demand for wheel loaders and vibratory compactors grew by 3% and 33% respectively whereas the demand for premium excavators dropped by 3% in FY 2023-24. Corporate Overview The business team created awareness amongst its customers and helped them evaluate equipment with regard to benefits of overall life cycle costs. This aided in warding off stiff competition from cheaper mining equipment manufacturers, especially in the dump truck, tipper, and wheel loader segments. The global automotive industry has been weighed down by slow consumer spending, high interest rates, and supply chain disruption. Technological shifts, changes in consumer behaviour, and disruptions in the global supply chain have prompted many automobile manufacturers to use innovation and technology to meet these emerging challenges. The Indian automobile industry has an enormous demand potential, supported by a large consumer base. Further, India is on track to become the largest EV market by 2030, with a total investment opportunity of more than USD 200 billion over the next ten years. Government measures such as imposing anti-dumping and countervailing duties, as well as promoting domestic manufacturing, have substantially reduced tyre imports from Southeast Asia and China. On the flip side, the increasing cost of raw materials is impacting profit margin, while dependence on imports for certain raw materials continues. As per the ATMA (Automotive Tyre Manufacturer's Association) report, the domestic tyre industry has made investments of over 35,000 crore in the last three years, aided by improved efficiency via debottlenecking and fresh capacity creation. Major Achievements Construction & Mining Machinery Business (CMM) Received the largest order from the Aditya Birla Group in the cement space for the supply of equipment along with a parts maintenance contract for ten years □ Supplied 7000th PC 130 excavator and 11000 th PC 210 excavator from Komatsu India Private Ltd (KIPL) Reached the milestone of completing 25 years of partnering with KIPL 117 Others Rubber Processing Machinery Business (RPM) The demand for tyre-making machinery is directly co- related to the growth momentum in the automobile, agriculture, and mining sectors. Raintree Boulevard, Bengaluru, Karnataka GD 705 114 L&T Realty is positioned amongst the top real estate developers in India, with a development potential of 70 million sq. ft. across the residential, commercial, and retail segments in Mumbai, Navi Mumbai, Bengaluru, NCR, and Chennai. The business model includes the development of own land, partnership with land/development right owners, and the sale & leasing of commercial spaces. Residential Segment 1. The Gateway, Mumbai The Gateway, Sewri, Mumbai, is a premium residential project launched during the year. It is the epitome of luxury, standing tall amidst the grandiose skyline of South Mumbai. The residence offers uninterrupted views of the Arabian Sea as well as the world-renowned Sewri mudflats. 111 Others LARSEN & TOUBRO Segment Artist's Impression Elixir Reserve, Powai, Mumbai, Maharashtra 2. Island Cove, Mumbai A residential project, Island Cove, Mahim, launched during the year, is positioned as a gateway to the City of Dreams, adorned with a timeless charm. In the midst of the bustles of the Mahim suburb, Island Cove will be an aspirational destination for home buyers with the design of a sanctuary - an intersection of luxury, comfort, and connectivity. 3. Emerald Isle, Mumbai Nestled in the sprawling serenity of Powai, L&T Realty Emerald Isle is an oasis of luxury, offering its residents spacious and elegant homes spread over 90 acres and being developed in phases. It is a planning masterpiece - built on three levels of parking to afford a traffic-free podium and a host of amenities amidst its central greens. 4. Elixir Reserve, Mumbai This is a premium residential project in Powai that is enveloped in a picturesque setting. This project replete with state-of-the-art amenities, including an ICSE school, commercial offices, and retail spaces within close proximity. The project is nestled amidst lush greenery, a serene lake, and a picturesque hillock, positioned as a fusion of man's quest for the highest luxury and nature's bounty. 5. Crescent Bay, Mumbai With the Arabian Sea as the backdrop, Crescent Bay is a six-tower residential complex at Parel with the perfect setting for an exclusive lifestyle. The highlight of this project is a sky deck and other lifestyle amenities on level 21. The project is completed and occupied by 1300+ families. 6. Seawoods Residences, Navi Mumbai Overview Part of India's first Transit-Oriented Mixed-Use Development, the Seawoods Development is spread across over 40 acres. Seawoods Residences offers unmatched connectivity and is surrounded by breathtaking views. The project has garnered sufficient interest from consumers. Nearly 75% of Phase I and II were handed over in the current financial year. Phase Ill launch has brought in new customers to the large resident community and cemented L&T's name in the Navi Mumbai region. Realty Business Revenue for the segment registered a growth of 35.4%, from 6,271 crore in FY 2022-23 to 8,493 crore in FY 2023-24. The growth was largely in the Realty business due to the higher handover of flats. Additionally, there was 35.4% 8493 709 21.2% crore 12000 10000 8000- 6000- 6271 554 4336 4000- 19.8% 2000- 4106 1611 0 Integrated Annual Report 2023-24 3448 2023-24 Realty Industrial Machinery & Others SWC --OPM% an improvement in the Valves business revenues given the higher demand and in the Smart World & Communication business due to better execution. Lower consumer spending in the global automotive industry impacted the revenue of the Rubber Processing Machinery business. The operating margin for FY 2023-24 improved to 21.2% from 19.8% for the previous year, mainly due to higher revenue in the Realty business. 7. Rejuve 360, Mumbai 2022-23 112 4. L&T Innovation Campus, Chennai The 6.5 million sq. ft. L&T Innovation Campus, a mixed- use development sprawled over 40-acre located at Manapakkam, Chennai (IT Hub). Phase 1 comprises two towers, 'Ananda l' and 'Ananda II', with a built-up area of 1.7 million sq. ft., which was recently launched in March 2024. It brings together a world-class innovation business/IT hub and an eclectic mix of leisure and lifestyle amenities, with a lush central parkland at its core. The development offers the convenience of Walk to Work. 113 LARSEN & TOUBRO SEAWOODS Seawoods Grand Central, Navi Mumbai, Maharashtra Others Segment 5. Other Commercial Developments Other commercial developments of L&T Realty include those in Faridabad, which is the only LEED gold-rated building in the entire Faridabad region, serving several multinational marquee clients. The other is in Mahape, Navi Mumbai, which, besides being LEED gold-certified, offers a range of premium amenities. Another development is the upcoming state-of-the-art office space in Whitefield - the entertainment hub of Bengaluru. New Growth Opportunities L&T Realty and Housing Development Finance Corporation's (HDFC) real estate arm, HDFC Capital Advisors, will be entering into an agreement to set up a residential development and investment platform. The joint platform shall be structured as an Alternative Investment Fund (AIF) and will invest in mid-market residential projects. Both L&T Realty and HDFC Capital Advisors will make sponsorship investments into this platform, and L&T Realty will be responsible for the execution of the projects. Commercial L&T Realty and the Singapore-listed CapitaLand India Trust Management Pvt. Ltd., trustee-manager of CapitaLand India Trust (CLINT), have entered into a non-binding agreement for a commercial platform to develop ~6 million sq. ft. of prime office spaces across Bengaluru, Chennai, and Mumbai. Under this platform, L&T will build and develop office spaces, while CLINT will market the office spaces. CLINT will gradually acquire the ownership of these properties in a phased manner from FY 2024-25 onwards. Business Environment The business environment continues to remain robust as residential sales surged across the top 7 cities by 30%+ in 2023 despite the rise in both interest rates and housing prices. Affluent housing (Premium and Luxury properties priced above 4 crore) has grown 75% in 2023 over the previous year. The shift was also witnessed towards Tier 2 cities, which was not only spurred by aspirational living but also due to infrastructure upgradation and seamless connectivity, indicating fundamental swings that will navigate the sector towards new horizons. Industry reports indicate that a total of 59.6 million sq. ft. was transacted across the leading eight markets in the country, constituting a 15% y-o-y growth in the year 2023. Further, the office market witnessed 42.9 million sq. ft. of new office space additions in 2023. Office leasing volumes were marginally lower than the all-time high of 60.6 million sq. ft. achieved in 2019. Bengaluru was the leader in the leasing market with a volume of 12 million sq. ft.+ in 2023, followed by Chennai and NCR as the top three markets. Similarly, Chennai also recorded strong growth during the year. Further, the vacancy levels decreased by 94 basis points over last year to 16% in 2023. Designed on the wellness thought, this residential complex is focussed on the theme - rejuvenation of mind, body, and soul. Conveniently located in Mulund West, the project has sustained its position among premium developments in this micro-market. Located in the rapidly growing micro market of Hebbal, the project has the scope of development of 3.4 million sq. ft. of commercial office spaces. Tech Park-1 (Phase 1) office space, having an area of 1.2 million sq. ft., is completed. The offices with unmatched connectivity and well-designed spaces are set to become the most favoured address for many technology companies. 3. Technology Park, Bengaluru Residential 2. Commercial Towers at Powai, Mumbai Designed to provide superior workspaces, it is part of a larger integrated development promoting the 'Walk to Work' concept. It is one of the coveted corporate addresses in Powai, Mumbai with proximity to excellent social infrastructure. Much of this development has already been completed, and some of it has been divested as well. Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Report Financial Reports Statements L&T's Innovation Campus, Powai, Mumbai, Maharashtra Statutory 8. 77 Crossroads, Mumbai It is a gated community situated in Ghatkopar and has functional residences with unmatched comforts and conveniences. The location provides easy access to every corner of the city. 9. Raintree Boulevard, Bengaluru Conceptualised on the live-work-play theme, Raintree Boulevard is a 65-acre mixed-use development project located in the high-growth micro-market of Hebbal, Bengaluru. Situated just 20 minutes away from the airport, the project offers fine living and best-in-class amenities. Further, L&T Tech Park and a large format mall are within walking distance from the project. 10. Avinya Enclave, Chennai Launched during the year, this project is spread over a 40-acre mixed-use development in Manapakkam, Chennai, and is located opposite the main L&T campus. From exceptional amenities on the premises to the best retail outlets, commercial hubs, and top social infrastructure in proximity, the residences are crafted to grant a timeless living experience in every sense. Commercial Segment 1. Seawoods Grand Central, Navi Mumbai Artist's Impression The Seawoods Grand Central offers 2.6 million sq. ft. of Grade A development with a unique combination of commercial and retail business spaces. It is one of the most successful transit-oriented developments in the country. Financial Statements ng Cor L&T CO! MINING MI Theme: Goverr d's Tryst with ESG and GOLD COUNCIL Work Reports New Woonomy © Report NCE Statutory Integrated Management Corporate Overview 20 SAP Ace Award AWAF GN SAP ACE INDUS Presents TION WALDIE Discussion and Analysis e Sustainability nel versity don kart W Integrated Annual Report 2023-24 128 innovation, and thereby contribute towards a better world. of sustainability and L&T shall pursue eco-friendly growth, promoting a culture For a Better World! Vision REPORT INTEGRATED LARSEN & TOUBRO 127 Received Top Honors for 'Sustainable Reporting Practices' at the ICAI Sustainability Reporting Awards 2023 1" CA Women Excellence Awards Reporting Awards 2022-23 Sustainability 75 □ Recognised as the 'Fastest Growing Indian IT brand in 2023' by Brand Finance □ Won 'Golden Peacock Award for Sustainability' in 2023 Received Top Honors for 'Sustainable Reporting Practices' at the ICAI Sustainability Reporting Awards 2023 - honoured 'Silver' award in Sustainability Reporting under the Sustainability Reporting Leadership (Service Sector) category and special recognition for Gender Equality Awarded the 'Best Supply Chain Solution in APAC' at Triple A Asset Awards under the Supply Chain Solutions E-Commerce - Media - Technology category LTIMindtree Received the 'Certificate of Merit' for achievements in Energy Conservation in the TPP Sector for the year 2023 during the 'National Energy Conservation Awards' organised by the Bureau of Energy Efficiency (BEE), Ministry of Power (MOP), Government of India ■ 1st runner-up in Best Energy Efficient Case Study for the 'RAPH Basket Replacement' project ■ Best Innovation in Energy Efficiency Award by Cll for 'Energy Saving by Innovation and Process Optimisation for CW & ACW System' Multiple Awards from CII: ■ Winner of 'National Environment Excellence Awards 2023' for excellence in utilisation of fly ash Nabha Power Twin awards from The Council of Enviro Excellence: ■ Winner of the 'Best Performing Unit' under the category IPP Coal above 500 MW LTIMindtree team with the Golden Peacock Award for Sustainability in 2023 ess School DUCATI Integrated Annual Report 2023-24 Management COME L&T's innovative Any Time Learning (ATL) platform, now renamed ATLVarsity, revolutionises the way employees engage with professional development. With on-the-go learning as its USP, the platform boasts a wealth of easily accessible resources in the form of videos, e-books, and journals. Partnerships with vendors like Percipio, Coursera, and Harvard Manage Mentor enable the Company to present a wide array of certification courses, addressing the diverse upskilling needs of its workforce. This programme consists of three independent modules, each focussing on key aspects of project planning, cost management, monitoring, and the practical application of tools such as Primavera/MSP. Since launch, we have had 4057 learners undergo different modules under the EPPC programme as of March 31, 2024. Launched in FY 2023-24, the Essentials of Project Planning & Control (EPPC 2.0) Programme is specifically designed to elevate the project execution capabilities of our engineers, aligning with our theme: 'Year of Project Controls'. The Seven-Step Leadership Pipeline Programme is designed to cultivate leadership qualities at every stage of an individual's career journey within the organisation. Emerging leaders are mentored by senior leaders, thereby ensuring the continuity of leadership thought processes and value systems. The 'ASCENT Series' and 'People Leadership Programmes' delve deeper, offering competency development tailored to the complex challenges of leadership roles. The unveiling of 'The People Leadership Excellence Framework' in FY 2023-24 marks a significant milestone in the Company's journey towards reinforcing a culture of performance and excellence. This strategic framework, built upon thorough diagnostics and extensive data collection, reflects the commitment to promoting growth and enhancing efficiency through effective leadership. By identifying five key dimensions of People Leadership— Personal Excellence, Relationship Excellence, Performance Excellence, Developmental Excellence, and Leadership Excellence—the Company has created a blueprint for cultivating leadership capabilities at all levels of the organisation. These dimensions encompass essential aspects such as promoting individual growth, fostering positive relationships, driving performance, nurturing talent development, and embodying exemplary leadership qualities. The Company continues to implement various initiatives to create a better employee experience, people leadership development, diversity, equity and inclusion (DEI), and an alternate talent model. Learning & Development Initiatives L&T's commitment to fostering a culture of innovation, inclusion, and talent development shines through its comprehensive array of initiatives. The Company takes pride in having a multi-generational workforce drawn from diverse ethnic and cultural backgrounds, who contribute to a vibrant and dynamic work environment. By fostering a fair, performance-driven, and collaborative culture, the Company ensures that every employee feels valued and empowered to contribute their best. By nurturing a pipeline of talent that reflects this diversity and is equipped with the necessary skills and competencies, the Company has positioned itself to meet the evolving needs of its businesses. Statements Reports Financial Statutory Integrated Report The AI/ML technology-based coaching programme at ATLVarsity provides a cutting-edge learning experience. To address role-specific needs, niche academies with blended learning have been created. Notable among these are the Academy of Digital Transformation, the Academy of ESG, the Academy of Quality Excellence, the Academy of Safety, and the newly introduced Academy of GenAI. In FY 2023- 24, ATLVarsity witnessed an impressive milestone, with 5.2 lakh training hours logged by 38,500 L&T employees utilising digital learning modes. Discussion and Analysis Corporate Overview HUMAN RESOURCES Integrated Annual Report 2023-24 122 With Environmental, Social, and Governance (ESG) considerations becoming central to business strategy, a central ESG Platform will be developed that will align with stakeholders' expectations and forthcoming regulations These endeavours of the Company in the domains of Al, logistics, compliance, and security are emblematic of digital innovation and strategic foresight. The Company will continue to reinforce its industry-leading position across businesses, besides ensuring that the IT function remains at the vanguard of technological advancements and continues to deliver exceptional value to all its stakeholders. □ Periodic enhancements to its own Generative Al Platform over time, besides advancing its capabilities to keep up with the enhanced demands of artificial intelligence in business At L&T, IT is poised to continue its trajectory of growth and innovation, with a sharp focus on the following areas: Outlook and Investments The Company implemented multiple solutions to enhance cyber security and created online training programmes to increase user awareness since it is the employees who are the first layer of defence against cyber-attacks. The journey towards creating a cyber- safe organisation where businesses can operate with confidence is progressing well. 5. Enhanced Cyber Vigilance: To augment the Company's compliance posture, a comprehensive Compliance Portal was launched, which in addition to serving as a central repository for regulatory documents, also acts as a hub for tracking and streamlining compliance management in the vast regulatory landscape. A portal has been developed to automate the internal disclosure process, ensuring timely and accurate public dissemination of information to ensure compliance with the comprehensive disclosure requirements under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. 4. Compliance and Governance: Management L&T Business Excellence Model During FY 2023-24, the Company launched the L&T Business Excellence Model (LTBEM). The development of LTBEM draws inspiration and adoption of the globally recognised framework, the EFQM (European Foundation for Quality Management), to suit the Company's unique organisational context. The launch of the LTBEM heralds a new era of organisational excellence, underlining the Company's commitment to continuous improvement and innovation. With 89 active Certified Assessors, the objective is to strengthen the management systems, practices, and capabilities to enhance the competitiveness of ICS/ Businesses to become world-class in their own sectors. Statutory Integrated Management Corporate Overview TITUSE Integrated Annual Report 2023-24 Our impressive social media followership on LinkedIn, reaching 4 million in FY 2023-24, highlights our strong presence and influence in the digital sphere. Besides our continued efforts in employer branding on social media, we have reinforced our position as an employer of choice by participating in various industry forums and awards. This year's accomplishments include re-certification by 'Great Place to Work®, recognition as the Company with Great Managers Award for the third consecutive time, CII HR Excellence Award, Golden Peacock Awards 2023, ET HR Awards 2023, and prestigious international awards such as Brandon Hall HCM Excellence Awards and Gold Stevie Best Employer 2023. Employer Branding & Accolades At L&T, we nurture candidate engagement through our programme GRACE (Get Ready for an Awesome Career in Engineering), which encompasses pre-joining initiatives such as radio podcasts, gamified content on our business achievements, with leader boards, quizzes, webinars, micro- learning platforms, and competitions. These efforts not only prepare candidates for their careers at L&T but also foster a sense of community and excitement among our future employees. The Company remains committed to nurturing talent through its Young Professional Talent Acquisition. In FY 2023-24, we stayed anchored to our core philosophy of 'Growing our own Timber,' by attracting, recruiting, and onboarding over 2600 young engineering professionals in the GET (Graduate Engineer Trainee) and PGET (Post- Graduate Engineer Trainee) categories across various Business Verticals, of which 30% have been women. In addition, we have also onboarded more than 1600 young professionals comprising MBA Graduates, Chartered Accountants, Cost Accountants, Diploma Engineers, and other trainees. Young Professional Talent Acquisition The HR conclave this year, based on the theme 'HR Transformation - Navigating the Future,' provided powerful insights from both external & internal speakers. L&T Radio serves as a valuable tool for keeping employees connected and informed, with over 90 podcasts providing a platform for communication, updates, and knowledge sharing. Initiatives like Appreciation Week further contribute to a culture of recognition and gratitude, with 8,000 messages exchanged on the Hi5 Wall Page across 6 locations, fostering a sense of appreciation and camaraderie among employees. Annual health check-ups and financial planning address physical and financial aspects of well-being. Fun and frolic through regular contests add a competitive element to the workplace. Employee Engagement The introduction of the Allyship Awards provided a platform for 1,600+ women employees to recognise their Allies at work. 124 The DEI Awards Ceremony was organised for the first time to recognise the efforts of businesses to support and promote a diverse and inclusive work culture. L&T's initiatives to support working mothers and create an enabling work environment demonstrate a commitment to fostering work-life balance and inclusivity within the organisation. By introducing maternity leave policies for adoption and surrogacy, as well as providing additional leave for mothers of twins, the Company acknowledges the diverse circumstances and needs of its employees during the transition to parenthood. The option for women to work from home or adopt a hybrid roster post- pregnancy for up to six months reflects an understanding of the importance of flexibility in accommodating the evolving needs of working mothers. The flexibility in work arrangements, travel allowances, creche facility and allowance, further enhance the support system for women employees. By handpicking 495 women employees to undergo the WINSPIRE series of Leadership Development Programmes over the last 2.5 years, the Company has demonstrated its dedication to nurturing talent and promoting gender equality. The effectiveness of these programmes, coupled with strategic hiring efforts, has resulted in a record Gender Diversity rate of 8.1% in the FY 2023-24. The remarkable 142% rise in participation rates in the WINSPIRE series of programmes in FY 2023-24 underscores the growing interest and engagement among women employees in leadership development opportunities. One key initiative established to promote the DEI culture was the establishment of a community of 36 DEI Champions tasked with driving DEI efforts across the organisation. These champions play a crucial role in fostering awareness, understanding, and action around DEI-related issues within their respective business units. The launch of the DEI Academy on the digital learning platform provides access to training modules & certification opportunities. Today, there are over 100 employees certified as DEI allies. In addition, the first-ever virtual DEI Showcase has been an active enabler in spreading the DEI initiatives to more than 17,000 employees. Diversity, Equity, and Inclusion (DEI) Initiatives and New Policies for Women their performance management techniques, resulting in an impressive 95% on-time employee goal completion rate this year. Furthermore, the 'People Leadership - Art & Science of Leading People in Organisation' programme empowered 75 managers to become internal catalysts and share their insights and techniques with their teams. Additionally, the 'Let's Talk' e-campaign promoted open communication through one-on-one conversations between managers and team members, with the 'Any Time Conversation' and 'Continuous Feedback' modules strengthening the continuous dialogue culture. Human Resources LARSEN & TOUBRO 123 In a push to cultivate a high-performing work environment, the Company implemented Project NEEV (Nurture, Educate, and Empower to Create Value), which focusses on equipping leaders and managers with the skills to drive goal-setting and provide continuous feedback. Through workshops and training programmes, 500 leaders honed Project NEEV ensuring that the Company is not only aligned with industry standards but also driving innovation. 50+ Digital solutions in multiple domains are implemented across the Company and deliver positive outcomes. 3. Marching on Digital Enablement Journey: The digital landscape continues to evolve at an accelerated pace, marked by rapid advancements in technologies and a shifting regulatory environment. The Information Technology (IT) team at the Company has remained vigilant and responsive to these changes, Marking a first step towards embracing generative Al, the L&T IT team has successfully worked on building a native Enterprise GPT Platform. This platform has been working towards revolutionising the way our business units interact with vast amounts of data and has unlocked new potential in knowledge generation besides facilitating decision-making processes. 2. Embracing Cutting-Edge Technology for Busi- ness Benefits: L&T Valves Limited Special Projects Cell at L&T Valves Kancheepuram, Tamil Nadu Segment LARSEN & TOUBRO Others 119 The business has a great advantage as compared to the European competitors due to its wide product range across all segments and also being a market leader in machinery for the Off-The-Road, Agriculture, and Mining sectors. In addition, the wide acceptance of new- generation Hydraulic Curing Presses by the global tyre majors has further strengthened the business position with a continued focus on maintenance contracts, value- added programming services, and upgradation kits as per customer requirements. For India, ICRA has forecasted a CAGR growth of 6-9% across automotive segments over the medium to long- term. Supporting underlying factors such as rising per capita income, moderate interest rates, favourable policy environment, and improving infrastructure are factors expected to aid demand. New raw materials and design technologies will enable tyre makers to increase revenue despite challenging market conditions. According to Smithers' 'The Future of Global Tyres to 2028', the tyre market is expected to record a CAGR growth of 5.2% over the next five years to reach USD 337 billion in 2028. Rubber Processing Machinery Business (RPM) The global tyre demand is likely to be robust, and tyre companies are poised for investments in selected segments. In the Parts and Services segment, the business plans to capture a higher market share by providing long- term service contracts to its customers. Further, various sales promotion activities are being organised to improve the sale of parts. Construction & Mining Machinery Business (CMM) With the Government's continued thrust on investments in infrastructure, the construction activity is expected to pick up pace during the coming year and the construction equipment market is expected to grow by 6%. The development of roads, railways, ports, metro rail projects, airports, irrigation infrastructure, etc., is expected to drive demand in the cement and metal sectors, which, in turn, will create sustained demand for excavators, dump trucks, dozers, and other road construction and mining equipment. The business plans to strengthen its position in the premium segment by increasing its focus on large contractors, large irrigation projects, and coal OB (overburden) removal contractors. Outlook Statements Ranked No. 1 in the 'Capital Goods Sector' and No. 17 in the 'Top 50 Most Sustainable Companies' in India by Business World Financial Statutory 이이이 Wolol Report Integrated Discussion and Analysis Management Overview Corporate Single Stage Tyre Building Machine 2 Overview Financial L&T Valves (LTVL), a wholly-owned subsidiary of L&T, is a leader in flow control solutions with a global customer base. The business leverages sixty-plus years of manufacturing excellence to serve key sectors such as oil & gas, defence, nuclear & aerospace, power, petrochemicals, chemicals, water, and pharmaceuticals across the globe. LTVL manufactures a wide range of products such as Gate, Globe, Check, Ball, Butterfly, Double Block Bleed Valves, and automation solutions. The portfolio includes products monogrammed API600, API594, API6D, API609 & API603, valves with CE, ATEX, and Safety integrity level (SIL) certifications, as well as loT-ready digital solutions. With a large installed base across countries, L&T Valves also runs a global aftermarket business to support its customers in valve repair and rectification services, onsite training, project management consulting, and maintenance contracts. Business Environment Systems were rolled out to empower employees with the tools they need to be more productive and collaborative, leading to streamlined operations and improved benefits for internal stakeholders. The Company has just launched an advanced Integrated Logistics Management System, which offers a unified view of the logistics landscape across the entire L&T group. This unique approach fosters transparency and paves the way for improved decision-making capabilities. Multiple business processes have been enhanced to take a leap forward by incorporating Robotics Process Automation (RPA), effectively automating the Company's backend financial operations, consequently resulting in reduced manual intervention, increased processing speed, and minimising errors. 1. Modernisation & Efficiency and Enabling User Productivity: At L&T, the Information Technology (IT) function has made strategic investments in information technology and infrastructural improvements throughout the year, reflecting the Company's dedication to operational excellence and preparedness for the future. In FY 2023- 24, the IT function played a critical role in supporting the organisation's strategic goals. The focus was on the following key areas: Empowering Growth Through Technology Innovation Information Technology INFORMATION TECHNOLOGY LARSEN & TOUBRO 121 Within the given business environment, the targeted market share gains through a diverse portfolio of products and industries, initiatives focussing on geographical expansion, supply chain resilience, digitisation, operational excellence, and a strengthened aftermarket team. These would help the business build a strong order book whilst delivering higher customer satisfaction in the years to come. Green Hydrogen generation emerges as a viable alternative to reduce emissions where significant investments are currently being made. The Green Hydrogen revolution presents exciting opportunities for the valve industry. In the Indian market, the business outlook is positive for petrochemicals, water treatment, speciality chemicals, iron & steel plants, and power sectors, in which major investments are expected. One of the 40 large-size valves installed at a major lift irrigation system The global valve industry in oil & gas and petrochemicals faces a dynamic future shaped by a mix of challenges. These include the introduction of the Inflation Reduction Act (IRA) by the US government, 'Panchamrit' by the Indian government to increase the non-fossil fuel capacity, and targets undertaken by various other countries towards Net Zero emission, impact investments in exploration and production, and oil prices, leading to demand volatility for valves. The oil & gas sector is responding to these regulations by way of enhanced investments in LNG and Carbon Capture and Storage (CCS). While renewable energy is key, it might not be able to completely replace fossil fuels in every sector in the medium-term. The business is closely monitoring key demand indicators such as crude oil prices, capacity additions across industries, client leverage and liquidity, project CapEx spending, GDP trends, and environmental regulations in the relevant geographies. Outlook Large-size Triple-offset Butterfly Valve supplied to a greenfield refinery project Statements Reports Financial Statutory Integrated Report Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 120 The market for industrial valves is characterised by significant fragmentation. With an increased focus by customers on faster deliveries and lower costs, the market environment is highly competitive. However, given the geographical spread of its demand base, channel and product expansion strategies, the company has established a good reputation amongst its peers. During the financial year, the business witnessed challenges in terms of the Red Sea shipping crisis, which has disrupted global trade and supply chains. Stringent environmental and safety regulations also posed challenges for the manufacturers in meeting compliance standards. Investments continued in the oil and gas sector in the International and Indian markets, which led to higher demand for valves. This demand growth was mainly driven by rising global energy consumption and geopolitical tensions, leading to higher spending in oil & gas exploration and production activities. The shift towards cleaner energy sources like Liquefied Natural Gas (LNG) created additional demand for valves used in its transportation, storage, and regasification. The rapidly evolving Green Hydrogen market aids the demand for specialised valves. The business has a global manufacturing presence with a state-of-the-art facility in Kancheepuram (Tamil Nadu, India) and two facilities set up in the USA and Saudi Arabia through its wholly-owned subsidiaries. In addition, the business has its own internal engineering department and a research and development centre staffed with a technically empowered team. LTVL's products demonstrate safety, reliability, and quality for diverse industries. Discussion and Analysis Reports Reports 2012 125 The business was honoured with the prestigious CII AI Award 2023, recognising Outstanding Achievement in the 'Best Use of Al Technology/Products/Solution' category in EHS management The business was bestowed with the Gold Prize of the 1st FICCI Awards for Excellence in Plant Maintenance Systems - the only company in the construction sector to be awarded this recognition Two projects were recognised at the Excellence in Bridge Engineering Awards: The Durgam Cheruvu Bridge was declared winner for the 'Innovation in Bridge Engineering' category, and the Mandovi River bridge was declared runner-up for 'Best Special Bridge (Cable supported)' category Heavy Civil Infrastructure Meerut Aligarh Ghaziabad Road Project received the Global Sustainability Award 2023 from the Environment and Energy Foundation, India Mumbai-Ahmedabad High-Speed Rail (Package C6) - MAHSR C6 received the Green Feather Award from Green Maple Foundation Mumbai-Ahmedabad High-Speed Rail (Package C6) - MAHSR C6 received the International HSE Award-2023 from the World Safety Forum - UK Transportation Infrastructure 'Great Place to Work® Certified □ Ranked No. 1 in the 'Capital Goods Sector' and No. 17 in the 'Top 50 Most Sustainable Companies' in India by Business World □ Recognised in Forbes' list of 'World's Best Employers 2023' Featured as one of 'India's Leading Listed ESG Entities 2024' in Dun & Bradstreet's 'ESG Champions of India 2024' Talent Development Received Gold in 'Best Advance Leadership Development for Women' and Bronze in 'Best Advance in Creating Learning Strategy' from the Brandon Hall Group Received the 'ATD BEST Award 2024' in Received the CII National Award for 'Excellence in Water Management' in 2023 in the 'Beyond the Fence' category for integrated community development CSR programme Certified 'Great Place to Work® in FY 2023-24 Ranked 3rd, for the second year in a row, in the global 'Top 200 Environmental Firms' 2023 list by Engineering News- Record (ENR), New York - L&T was the only Indian firm to feature in this list Corporate During the year, multiple projects across multiple businesses received awards for Environment, Health and Safety from ROSPA (The Royal Society for the Prevention of Accidents), the British Safety Council, the National Safety Council of India (NSCI), and many other reputed organisations. L&T's businesses have also won many awards and accolades. Some noteworthy awards and accolades are mentioned below: CII National Award for 'Excellence in Water Management' in the 'Beyond the Fence' category Work. Certified To Place Great LARSEN & TOUBRO elh LARSEN & TOUBRO Awards & Accolades FIPI Report ww GAIL (India www.WORL BUSINESSWORLD 126 UITP (International Association of Public Transportation) - Special Recognition in Elevating Multimodal Transit Experience in Hyderabad for 2023 Hyderabad Metro Received special recognition in Diversity, Equity and Inclusion (DEI) Awards (Induct Category) for the 'All- Women Panel shop' for manufacturing Electrical Panels in-house on March 8, 2024 Won Gold Award from IRIM in the India Green Manufacturing Challenges - 2023 Assessment and won Diamond Trophy for Sustainable Business Growth enabled through Green Manufacturing Construction Equipment Boiler Manufacturing received NSCI Suraksha Puraskar for NUPPL 3x660 MW Ghatampur TPP Boiler Manufacturing received Gold in the construction sector at the 10th FICCI Awards for Excellence in Safety Systems CH □ EPC Company of the Year at FIPI Awards 2023 '21st Annual National Greentech Safety Award 2023' under the category 'Safety Excellence' Power Hydrocarbon 10th edition of Global EPC Company of the Year by EPC World EPC Company of the Year at FIPI Awards 2023 ON ORLDARDS LAPOLLO ESS LARSEN & TOU Event Partners Presents EPC World RDS20 Federation of Indian Petroleum Industry 10th edition of Global EPC Company of the Year by EPC World ATION SUMMIT 23 OPE W AWARDS AND ACCOLADES Statements 9WATER Mato THCW L&T's businesses are primarily EPC projects (Engineering, Procurement, Construction) and Hi-Tech Manufacturing. Aligned with the activities of the businesses, the Company has identified the following key stakeholders and channels of communication: Government Governments (sovereign, sub-national, local) and related entities (public sector enterprises) are the largest clients of the Company, comprising ~78% of the total Order Book. They are the key determinants of policies (sectoral as well as cross-cutting), long and short-term plans for various sectors, and the country at large. The Government is the most crucial driver in policy development, which ultimately impacts the ease of doing business and shapes the business environment. Press releases QUALITY □ Quarterly results □ Integrated Annual Report □ Stock Exchange filings □ Issue-specific meetings □ Representations As and when required □ Project Review Meetings STAKEHOLDER ENGAGEMENT Stakeholder Engagement 9 Across all stakeholders, for breakup refer to Section A in Business Responsibility and Sustainability Reporting (BRSR). 133 □ Address concerns related to project execution 8 Revenue in FY 2023-24 from businesses started in the preceding three financial years. AND INFRASTRUCTURE NDUSTRY, INNOVATION ECONOMIC GROWTH DECENT WORK AND 7 Initiatives for improving processes, products and services to reduce cost, improve project delivery and increase customer satisfaction. Dividend Payout: * 46.9 Bn Return on Net Worth: 13.7% PBIT: 132.7 Bn 1,262.4 Bn Turnover: Engineering, Precision Engineering & Systems, L&T Energy-Hydrocarbon. Distribution, Minerals & Metals, Heavy LARSEN & TOUBRO □ Regulatory compliances and reporting requirements □ Seek support to enable on-time completion and delivery according to agreed parameters Working with the Government to develop/provide inputs for policies and legislations □ Advocating for relevant policy issues at the central and state level Integrated Report Statutory Financial Reports Statements Customers Management Discussion and Analysis Other key customers are private sector clients, which comprise -22% of the total Order Book. While □ Website, L&T Infodesk, toll-free number □ Meetings and interactions □ Client satisfaction surveys and feedback □ Grievance redressal As and when required, satisfaction surveys carried out biannually □ Transparent and timely communication to provide updates on the status of contracts/supplies Address issues related to the delivery of the Company actively seeks new clients, it also enjoys a long-term relationship with many of them. These lead to repeat business and also create the conditions encouraging development of new solutions and technologies. Corporate Overview Integrated Annual Report 2023-24 Purpose and scope of engagement, including key topics and concerns raised during such engagement Employees and Workforce Human Capital is key to project management and execution for the Company. Around 59,000 employees and 3,50,000 workers across the Company's project sites, offices, manufacturing plants, and different locations are contributing towards sustained growth and performance. Hence, the management, development, and well-being of the workforce are vital for the Company to continue its value creation journey. □ Employee satisfaction and engagement surveys □ Circulars and messages from corporate and line management □ Welfare initiatives for employees and their families and Employee Assistance Programme (EAP) News bulletins to convey topical developments, print and online in-house magazines, and newsletters □ HEERA □ Various engagement platforms and events: Hi5, L&T Radio, Art Beats and so on □ As and when required □ Support the growth, learning, development and well-being of employees Transparent and timely communication of organisational updates □ Feedback on Company's policies and actions, and address concerns linked to them Legend Channels of communication 134 Frequency of Engagement & Factories, Power Transmission & 6 Total production for businesses: Buildings FOR THE GOALS 5 AND WELL-BEING QO GENDER 4 EDUCATION II+ CLIMATE 13 ACTION 6 AND SANITATION EQUALITY DECENT WORK AND ECONOMIC GROWTH M 17 PARTNERSHIPS FOR THE GOALS Patents Granted: 19 Value Engineering Projects: 296 NDUSTRY, INNOVATION AND INFRASTRUCTURE 4 EDUCATION GENDER EQUALITY Contribution to Exchequer: 89.7 Bn Complaints Received: 653 CLEAN WATER HUNGER 3 GOOD HEALTH AND PRODUCTION 2 ZERO CSR Beneficiaries: 1.6 Mn * 1,27,018 Mn Revenue from Emerging Businesses³: 17 FOR THE GOALS PARTNERSHIPS SUSTAINABLE CITIES AND COMMUNITIES 1 POVERTY Launch Vehicles 12 CONSUMPTION ECONOMIC GROWTH PARTNERSHIPS 10 INEQUALITIES REDUCED M ECONOMIC GROWTH Complaints Resolved: 597 DECENT WORK AND 7 AFFORDABLE AND CLEAN ENERGY GLOBAL SOURCING Bridges & Tunnels: 35 km Power Infra Created: - - Transmission Lines: 3,010 ckm Solar Power Capacity: 2,192 MWp Water & Sanitation Infra Created": - HOUSTRY, INHONKON AND INFRASTRUCTURE DECENT WORK AND A QUALITY AND COMMUNITIES agreed contracts RESPONSIBLE 11 SUSTAINABLE CRES 7 AFFORDABLE AND Average Training Days per Employee: 7.9 Accident-free Man Hours: 1,262 Mn Revenue per Employee: ₹ 21.5 Mn Attrition Rate: 10% Factory Output: 3,75,452 tonnes Green Business (Revenue): * 63,426 Cr Water Storage Capacity: 228 Mn ltr Treatment Capacity: 2,239 MLD - CLEAN ENERGY □ Partnerships for innovation □ Seek feedback on Company's plans and strategy ◉Address concerns (if any) with respect to Company's policies and actions Businesses have a high dependence on supply chain partners for sourcing key input materials (commodities, fabricated items, sub-components, and other raw materials), logistics and services. At L&T, the supply chain is vast and complex, registered partners across and outside the country. These supply chain partners are assessed on a regular basis to enable performance-based tiering and aid in vendor development. The Company believes that supply chain partners play a crucial role in responsible sourcing, upholding quality and standards, adhering to human rights standards, and maintaining ethical business practices. 138 Identify Potential Material > Shortlist Potential > Topics Stakeholder Identification > Topics and Prioritisation Stakeholder Engagement, Survey and Feedback Key Internal Stakeholders Senior Management Employees Workers/ Representatives Finalisation and Prioritisation of Material Topics and Matrix Key External Stakeholders Government and Regulatory Bodies □ Quarterly results □ Integrated Annual Report (Integrated Report, BRSR, Financial disclosure) □ Annual General Meeting □ Media interactions □ Event-based Assessment Process Wider dissemination of plans, achievements Integrated Annual Report 2023-24 Media Community and NGO Partners Supply Chain Partners Investors and Shareholders Customers/ Clients Mobility Infra Created 4: 5,037 □ Press releases GRI: Global Reporting Initiative, SASB: Sustainability Accounting Standards Board, CDP: Carbon Disclosure Project Surveys administered; concerns/ feedback received through and initiatives □ Create awareness of the Company's businesses, offerings and initiatives □ Enhance brand value □ Engaging with media to increase awareness of sustainability issues and promote business practices Legend Channels of communication Frequency of Engagement | Purpose and scope of engagement, including key topics and concerns raised during such engagement 137 LARSEN & TOUBRO Material Topics UNDERSTANDING MATERIALITY The Company is committed to proactively identifying and responding to the concerns of stakeholders and its business to create long-term value for all. Materiality is one of the inputs to the Company's sustainability strategy, which enables prioritising of the key focus areas. The Company has been constantly working on improving and delivering on ESG dimensions, identified through the findings of the materiality assessment conducted in FY 2022. The sensitivity of a topic to stakeholders and to the Stakeholders' views External Surveys administered; inputs/ feedback received from senior management during the year Stakeholders' views Internal Benchmarking Indian and international companies periodic interactions Peer SASB Material topics, GRI, Framework, Frameworks Reporting Methodology Company, in terms of importance, forms the basis of a materiality assessment. It considers both the impact of the Company's activities on ESG dimensions and the way in which these dimensions can impact the Company. UN SDGs, BRSR, CDP Supply Chain Partners □ Website Media L&T strives to promote socio-economic development in the communities around its operations and other underserved regions. The approach involves need assessment, development, and execution and handover of projects to the local community in most cases. The Company prioritises supporting the vulnerable, underprivileged and marginalised sections of society to empower them and improve their standard of living. Communities and NGO Partners □ Showcase sustained value creation through Company's performance As and when required, quarterly investor meets □ Stock Exchange filings □ Investor meets □ Investor presentation □ Annual General Meeting (Shareholders' Interaction) (Integrated Report, BRSR, Financial disclosure) □ Integrated Annual Report □ Quarterly results □ Dedicated email ID and toll-free number Press releases □ Website Shareholders and investors enable the Company's growth by providing the requisite financial resources as well as guiding the Company through their approval/disapproval of the Company's plans (through voting, voicing concerns, feedback). The Company actively engages with them to communicate its plans, design the way forward, as well as address their concerns. and Investors Shareholders □ Regular vendor and supplier meet □ Grievance redressal mechanism □ Contract related meetings □ As and when required for large suppliers, fortnightly for MSMEs □ Payment, vendor management platform related queries, deliveries, and technical discussions MSME: Exchange of information, vendor deliverables and payment issues, and partner portal-related queries □ Direct engagement and/or through NGO partners implementing CSR projects □ Awareness sessions for supply chain partners and assessment of top 200 partners on ESG parameters Channels of communication Frequency of Engagement Purpose and scope of engagement, including key topics and concerns raised during such engagement 135 LARSEN & TOUBRO Stakeholder Engagement Legend Media is one of the important channels of communication for the Company's reputation capital (a sum of other people's perception), share price performance, brand and pricing power, plans, and policies. It helps engage with a larger audience and provides a critical link in the feedback loop on issues related to the Company and the Brand. This stakeholder group also plays an instrumental role in providing insights into the Company, business, and industry performance. Additionally, the Company engages with the media to share management's perspectives and encourage healthy discussions on various topics. □ Grievance redressal □ Community visits □ Inputs on new policies and regulations □ Compliance with laws and regulation □ Issue specific □ As and when required Multi-stakeholder forums Through industry associations and business chambers □ Integrated Annual Report ⚫ Quarterly results Briefings and direct meetings Various businesses fall under the purview of specific regulatory bodies, not only sectoral but also in some common areas, e.g., environment and labour. It is pertinent to understand the priorities and concerns of these agencies to enable the Company to ensure compliance with mandated levels. Regulatory Bodies Statements Reports Report Discussion and Analysis Financial Statutory □ Meetings with community representatives □ Impact Assessment Studies □ Quarterly meet with NGO Partners □ Facilitate in providing infrastructure, health, and education services and skill-building opportunities based on need assessment □ Improving the quality of life of underprivileged and vulnerable communities Legend □ Need Assessments Channels of communication Frequency of Engagement Purpose and scope of engagement, including key topics and concerns raised during such engagement Integrated Annual Report 2023-24 Corporate Overview Management Integrated 136 Building Infra Created³: 20.2 Mn sq. ft. Government - Process Value Creation Integrated Annual Report 2023-24 GOVERNANCE: POLICIES, PROCESSES, RISK MANAGEMENT STAKEHOLDER ENGAGEMENT MATERIAL TOPICS innovation, R&D and partnerships SE-5 Capability enhancement through Talent and Leadership pipeline SE-4 strong financial health SE-3 Financial resources and Industry leading capabilities in digital and advanced technologies SE-2 Operational Excellence SE-1 and Stakeholder Value Creation Enabling business sustainability through a high focus on ESG non-core businesses Divestment of Developing business offerings to ride the Energy Transition wave VALUE Corporate Overview Management Discussion and Analysis Shareholders Customers The six Capitals are utilised through business processes and models to create assets and products linked to infrastructure, energy, oil & gas, metals, process plants and other sectors, and create value for the stakeholders. Hi-Tech Manufacturing FINANCIAL CAPITAL CAPITAL SOCIAL AND RELATIONSHIP CAPITAL INTELLECTUAL CAPITAL HUMAN e-commerce businesses CAPITAL NATURAL CAPITAL EPC Projects Creating Value for Business Models VALUE CREATED VALUE CREATION Statements Reports Financial Statutory Integrated Report MANUFACTURED Employees SO-V SO-III FINANCIAL RELATIONSHIP CAPITAL ► Pg. 210 SOCIAL AND ► Pg. 198 INTELLECTUAL CAPITAL ► Pg. 180 HUMAN CAPITAL CAPITAL MANUFACTURED ► Pg. 152 CAPITAL NATURAL The Company has been making concerted efforts towards achieving resource efficiency, decarbonising its businesses and sharpened its focus on improving performance across Environmental, Social and Governance (ESG) parameters. This Integrated Report includes the financial and non-financial performance of L&T Limited (Standalone entity) and is aligned to the principles developed by the International Integrated Reporting Council. The Report expands the target audience from the primary provider of financial capital to include employees, customers, suppliers, local communities, regulators, and policy-makers. About the Report Statements Reports Report Financial Statutory Integrated Management Discussion and Analysis Corporate Overview Crushed Sand: 4 Mn CAPITAL ► Pg. 238 Other Chapters Value Creation Process SO-II Scaling up digital and current businesses SO-I Value-accretive growth of Strategic Objectives VISION AND VALUES STRATEGY VALUE CREATION PROCESS LARSEN & TOUBRO Strategic Enablers SO-IV 130 150 Sustainability Highlights FY 2023-24 148 Sustainability Governance 138 Understanding Materiality 134 Stakeholder Engagement 132 Value Creation Model 130 129 Suppliers ► Pg. 174 12 RESPONSIBLE Management Corporate Overview Ferrous and Non-ferrous Plants Refining and Petchem Plants DIGITALISATION Nuclear Power Plants Solar Power Plants Airports Commercial Spaces SPEED & SCALE Offerings Integrated Annual Report 2023-24 5 Also includes Irrigation Capacity (0.87 lakh ha) and Water Pipelines (61,130 km). 4 Mobility Infra created includes Roads (809 lane km), Electrification (3,432 track km), Track construction (710 track km) and Mass Transit-viaducts (86 km). Process Plant Equipment (14.8 Mn sq. ft.). 3 Also includes Green Building 2 Partnerships with universities, educational and research institutes, start-ups. 132 monitoring, waste management, wastewater treatment cost, etc. pollution control, environmental 1 Spend on environmental management: Net Fixed Assets: 124.6 Bn Discussion and Analysis Integrated Report Statutory Financial Productive Assets for Clients Steel: 2,526 - 17 FOR THE GOALS PARTNERSHIPS ON LAND 15 N CONSUMPTION AND PRODUCTION CLEAN ENERGY AFFORDABLE AND SDG Linkage Net Current Assets: 254.6 Bn ACTION Y AND SANITATION CLEAN WATER 6 Eco-Friendly and Recycled Material Used (tonnes): GHG Emission Intensity: 7.8 tCO₂e/* Cr GHG Emissions: 0.99 Mn tCO₂e Output INNOVATION Statements Reports 13 CLIMATE Order Book: 3,713.8 Bn Zinc: 71 Oil & Gas Facilities Manufactured Active Project Sites: 716 Ferrous: 2.3 - Sand: 7.4 Cement: 4.4 Material Consumed (Mn tonnes): Spend on Environment¹: 369 Mn Energy from Renewable Sources: 0.19 Mn GJ Energy from Non-renewable Sources: 10.3 Mn GJ Capital Natural Capital Water Consumption: 12.9 Mn kL VALUE CREATION MODEL LARSEN & TOUBRO 131 and Livelihoods Communities Payment to Exchequer Business for Suppliers and Capability Development Employee Benefits Financial Capital Dividends and Buyback Input Manufacturing Facilities: 18 Community Assets Capital Human Water Treatment Plants Data Centers Mass Transit and Railways Hydro Power Plants VALUE ENGINEERING EXCELLENCE MODEL L&T BUSINESS Business Processes and Value Creation Model LEAN OPERATIONS INTEGRATED ENGINEERING Residential Spaces Relationship CSR Partners: 61 Memberships of Industry Chambers: 75 Employees: 59,344 Workmen: 3,48,094 Women covered in Leadership R&D Spend (cumulative of 3 years): ₹ 3,905 Mn Patents Filed: 13 R&D Engineers and Scientists: 321 Journey Programmes: 495 Social & CSR Spend: 1.5 Bn Capital Active Collaborations and Partnerships²: 21 Intellectual Capital Relationship Capital Social and Risk or Opportunity Financial Capital Capital Financial Implications + Positive (-) Negative + Both Owing to the nature of operations and the large number of contractual workmen, human rights violations pose a risk despite complying with all applicable regulations and putting systems in place to avoid such violations. Non-adherence to labour regulations and any kind of violation, even in the supply chain, might lead to a loss of reputation and increased compliance costs. Opportunity Human Rights and Labour Conditions Human and labour rights mean protecting, respecting, upholding, and promoting the basic rights and freedom of the workforce. The Company aims to proactively address and manage such risks by strengthening policies, systems, procedures, and grievance mechanisms. Human Rights Due Diligence of own locations is also conducted to understand the risks and gaps in the existing processes. The key manufacturing facilities are SA8000 certified. The Company's operations adhere to local and national regulations. As part of awareness sessions, the supply chain partners are also being sensitised to human rights-related risks and violations to ensure adherence across the supply chain. During the year, the grievance redressal mechanism for the contractual workmen has been strengthened. Refer to 'Human Capital' for more details. Skilled Manpower EPC Projects segment of the Company highly relies on contract workmen due to temporary shifting and the distributed nature of the business. Achieving contract completion as per agreed timelines and ensuring high- quality work require skilled workmen. Skillsets in focus are bar bending, formwork, electrical work, tiling, masonry, welding, carpentry, and solar electrical work, among others. With increasing competition for skilled manpower and industry-wide labour shortage, getting the right skill set is a challenge. At the same time, retention may be relatively easy for permanent workmen. However, for contract workmen, the high churn is a risk. Risk Intellectual 141 Human Relationship Capital Financial Capital The Company tries to overcome the hurdles through onsite training to upskill workers based on the project sites' requirements, a database to capture and track skilled workmen, and continuous engagement with the contracting Financial Implications + Positive Negative Both SO-V + Risk or Opportunity Risk Opportunity 142 LARSEN & TOUBRO Material Topics Legend Material topic identified Description and rationale for identifying risk/ opportunity In case of risk, approach to adapt or mitigate Natural Capital Manufactured Capital Capital agencies to ensure the right manpower is available at the site. In case of risk, approach to adapt or mitigate - Manufactured Capital Human Capital Intellectual Capital Social and Relationship Capital Financial Capital Financial Implications + Positive (-) Negative Natural Capital + Both SO-III SO-IV SO-V SO-V + + Risk or Opportunity Risk Opportunity Social and 143 SO-I SO-V Description and rationale for identifying risk/ opportunity Legend SO-V + Pi Integrated Annual Report 2023-24 Corporate Overview Management Integrated Statutory Financial Material topic identified Discussion and Analysis Reports Statements Talent Management - Attraction, Retention, and Development Talent drives the success of the Company, and ensuring the right talent within the Company requires attracting, developing, and retaining the talent. Key aspects with respect to talent management are hiring right, reducing attrition, improving productivity, developing industry- specific capabilities/skills, and enhancing leadership pipeline. With Human Capital at the core of the business, the inability to attract, manage, develop, and retain talent may adversely impact the business. Historically, the sector has a reputation for lacking workforce diversity and the right talent. The Company has customised learning and development programmes that cater to various skill requirements and organisation levels. The Company also leverages various digital applications for training delivery, capturing feedback, and driving engagement with the employees. Refer to 'Human Capital' for more details Diversity, Inclusion, and Equal Opportunity A diverse workplace means a wider range of ideas, perspectives, and experiences, which, therefore, leads to better innovation and effective problem-solving - ultimately improving productivity and performance. Diversity is complemented by inclusivity, which means that each one feels that they are heard and that they matter, thus instilling a sense of belongingness and trust. This includes not only hiring without any prejudice or discrimination, but also inculcating the right set of attitudes and behaviours within the employees through awareness and training and building a culture of trust and commitment. Report Integrated Report Intellectual Human Capital Data Security, Privacy, and Cyber Security 139 LARSEN & TOUBRO Overview of the Material Topics The material topics, if addressed and strengthened, can become opportunities, and if not, can pose a risk. For certain material topics, the focus is more on the potential risk and the approach taken by the Company to ensure that the risk does not materialise. 140 Material Topics Legend $ Material topic identified Description and rationale for identifying risk/ opportunity In case of risk, approach to adapt or mitigate Natural Capital Manufactured Capital Human Capital Capital Social and Relationship Capital Sustainable Supply Chain Social Engagement and Impact Equal Opportunity Diversity, Inclusion, and 144 Statutory Financial Reports Statements Thirty-two potential material topics that directly or indirectly impacted the business were identified initially. Out of these, 14 material topics, which are more pertinent for short-term, medium-term, and long-term value creation from both internal and external stakeholders' perspectives, were finalised. During the year, these material topics, their relevance, and their progress are monitored and reviewed at various levels across the Company. The material topics are as follows (not ranked): Environment Social Climate Action Financial Capital Water, Waste, and Hazardous Materials Management Employee and Workforce | Customer Experience Engagement, Well-Being, and Satisfaction Health, and Safety Governance Business Ethics Human Rights and Labour Conditions Quality of Products and Project Delivery Brand Management Skilled Manpower Talent Management - Attraction, Retention, and Development Economic Financial Implications + Positive Negative Integrated Statutory Financial Report Reports Statements Well-being, Health, and Safety Human Resources is a critical capital for the Company. Ensuring their health, safety, and well-being is key to optimal productivity and sustained growth of the Company. The nature of operations often exposes the workforce to occupational risks and hazards which impact health, safety, and productivity. Management Discussion and Analysis Along with physical well-being, mental well-being has also emerged as a health-related risk that can impact productivity. The Company encourages its workforce to prioritise stress management techniques such as mindfulness, exercise, and seeking support when needed. Counselling, coaching, and sensitisation workshops are also being organised for employees to enable them to handle challenging situations. Furthermore, keeping in mind the importance of maintaining a healthy work-life balance and enhancing the employee experience, a mandatory leave of 10 days in a year has been introduced to ensure employees have dedicated time to rejuvenate and recharge. Refer to 'Human Capital' for more details. Legend Material topic identified Description and rationale for identifying risk/ opportunity In case of risk, approach to adapt or mitigate Natural Capital Manufactured Capital Implementation of health and safety management systems adhering to known standards, e.g., ISO 45001:2018 (Health and Safety Management Standard), is a key focus area. This is enabled through SOPs, right processes, procedures, and digital applications. The Company focusses on improving preventive measures related to better risk management. Intellectual Capital Corporate Overview Integrated Annual Report 2023-24 + Both ■ Climate Action Physical and transition risks related to Climate Change have the potential to cause challenges for the Company. Concerns are primarily related to GHG emissions reduction, decarbonising energy use, water sourcing security, natural materials sourcing, ambient operating conditions, and extreme weather events. On the other side, initiatives being undertaken to address emission reduction and water use efficiency may have a direct impact on cost and improve overall productivity. Climate risk management is integrated into the Company's Enterprise Risk Management. The Company has set ambitious targets for Carbon and Water Neutrality and devised a strategy to achieve them. Other areas are also being addressed through specific initiatives. Refer to 'Natural Capital' for more details. Water, Waste, and Hazardous Materials Management Encompasses increased resource efficiency, recycling and reuse of material and waste, and minimising resource consumption wherever feasible. Waste generated from business operations, if not managed properly, can negatively impact the environment as well as communities around the work locations. The risk is higher in the case of hazardous materials and wastes. However, in the past few years, the approach has been shifting as waste is being looked at from the perspective of generating value instead of burden. Employee and Workforce Engagement, Water consumption reduction is a key focus area for the Company to achieve Water Neutrality status, and various initiatives linked to it are being operationalised. Waste management is an integral part of the EHS Management System. The Company adheres to the laws and regulations in the areas of operation. Risk or Opportunity SO-III Risk Opportunity + SO-IV SO-I SO-V + Refer to 'Natural Capital' for more details. LARSEN & TOUBRO Risk or Opportunity Legend Report Reports Statements | Sustainable Supply Chain A sustainable supply chain includes responsible behaviour of the supply chain partners in accordance with the highest standards of ethics and integrity, respect for the law, human and labour rights, and environmental protection. A sustainable supply chain not only reduces environmental and adverse social impact but also builds resilience, supports business continuity, and increases competitiveness. However, the risk of HSE incidents, human rights violations, and unethical business practices may lead to disruption in business activities and reputation loss as well. Other events, such as natural disasters, extreme weather, and geopolitical incidents, can also adversely impact the deliverables and timely project execution. The supplier base of the Company has grown substantially over the years across the globe. To ensure adherence and compliance, the Company has put in place a set of policies, processes, and a Code of Conduct for the supply chain partners. Signing the Code of Conduct is a mandatory requirement in the onboarding process of any supply chain partner. Also, the Company has initiated an assessment of suppliers on ESG parameters to understand their performance. Additionally, the Company is organising awareness sessions to apprise them of requirements and new developments in ESG and expectations of the Company. Refer to 'Social and Relationship Capital' for more details. Financial Legend Description and rationale for identifying risk/ opportunity In case of risk, approach to adapt or mitigate Natural Capital Manufactured Capital Human Capital Intellectual Capital Material topic identified Social and Relationship Capital Statutory Management Discussion and Analysis - Negative + Both Brand Management The Company's brand management is important to build equity, loyalty, and confidence among the stakeholders. This enables customer engagement and business growth, helps attract talent, instils respect in shareholders and investors, and builds a positive image of the Company. Data Security, Privacy, and Cyber Security Protecting the Company's own workforce as well as customer data is a highly sensitive and critical area to ensure reliable and incident-free business operations. While the focus of the Company continues to be on digitisation, there are concerns around cyber security with the use of new technologies, software, and cloud services, and makes the Company susceptible to attacks and leaks. Any such incident can jeopardise the credibility of the Company and may impact reputation and lead to financial damage. The Company has developed a multi-year cyber security and resiliency roadmap and invested in state-of-the-art security platforms. Policies and practices have been put in place to meet the requirements of ISO/IEC 27001:2022. The Company has one of the most advanced Security Operations Centres to monitor developments 24X7 and respond effectively to any cyber incidents. Integrated Management Discussion and Analysis Opportunity SO-I SO-II SO-III SO-IV SO-V SO-IV + Integrated Annual Report 2023-24 Corporate Overview Risk + Positive Financial Capital SO-V □ Water Neutrality □ Biodiversity □ Material Recycling and Reuse □ Waste Management □ Green Supply Chain □ Green Business #WeAreLnT Social Value Creation □ Workforce Safety Training and Development Diversity and Inclusion □ Carbon Neutrality □ Human Rights □ Supply Chain #Building TheNation Towards Future-Ready and Resilient Business □ Board Structure, Diversity, and Remuneration □ Governance Mechanism □ Ethical Behaviour □ Stakeholder Engagement □ Risk Management 148 □ Community Welfare SO-I the Environment #LnTCares I+ Financial Implications + Positive (-) Negative + Both Risk or Opportunity Risk Opportunity 147 Restore and Rejuvenate LARSEN & TOUBRO SUSTAINABILITY GOVERNANCE Strategy As part of the Lakshya 2026 plan, the Company re-evaluated shareholder value creation, defined social obligations, and framed sustainability goals. The outcome of this assessment was the re-articulation of its Strategic Objectives (SOS), which drive value creation over a long-term horizon. The sustainability agenda is guided by the CSR & Sustainability Committee and driven by Executive Committee members across the businesses. The scope and membership of the Committee have been detailed in Annexure 'B' to the Board Report of this Report. Sustainability Framework Policy The policies of the Company demonstrate commitment towards sustainability, and guide in framing as well as implementing long-term strategy and action plans. The key focus areas are articulated in the Sustainability Policy, which is complemented by other policies such as Corporate Social Responsibility, EHS, Anti-Bribery and Anti- Corruption, Green Supply Chain, Human Resources, and Code of Conduct. These policies strengthen integrated thinking by aligning ESG with business goals and support value creation through the six capitals, viz. Natural, Manufactured, Intellectual, Human, Social and Relationship, and Financial. Most of these policies are reviewed and updated based on evolving and emerging trends, regulatory changes, global standards, and stakeholder concerns. At the business level, SOPs, guidelines, and procedures translate these policies into standard processes and action plans, e.g., waste management, health and safety, and risk management, among others. The working of the policies is evaluated by third-party agencies on various standards such as ISO 9001:2015, ISO 14001:2018, ISO 45001:2018, and SA8000. During the process, these agencies also check policy elements, procedures, action plans, review processes, monitoring and reporting. In addition to the above, relevant third-party certifications and assessments are also conducted across business units periodically. Sustainability Governance Financial Implications Financial Capital Relationship Capital For the Company's businesses in EPC Projects and Hi-Tech Manufacturing, high-quality projects executed, products manufactured, and on-time delivery are critical, not only for meeting the contractual commitments but also for creating customer delight through differentiation from competitors. Risk or Opportunity Risk Opportunity SO-V SO-I SO-III SO-IV SO-V Quality of Products and Project Delivery SO-I SO-V + + + Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Statutory SO-III Financial Optimal customer experience has a significant material impact on the brand, reputation, and financial performance of the Company. Customer Experience and Satisfaction Material topic identified Description and rationale for identifying risk/ opportunity In case of risk, approach to adapt or mitigate Natural Capital Manufactured Capital Human Capital In an increasingly competitive environment, delivering great customer experience and satisfaction is essential, not only for project success but also for securing long-term growth and relationships. Hence, it is important for the Company to strengthen and maintain its customer-centric approach by focussing on timely execution, first-time-right quality, and adherence to all applicable norms across all business segments. Intellectual Capital Relationship Capital Financial Capital Financial Implications + Positive (-) Negative + Both Social Engagement and Impact Social engagement for the Company means initiatives that focus on social welfare, community development, and environmental sustainability, as well as creating an impact on society at large. Effective social engagement and initiatives not only bolster the brand but also create goodwill among the stakeholders. CSR can act as a differentiator, as well as a means of attracting and retaining talent by instilling a sense of purpose and pride among the employees at the workplace. Social and Report Reports Statements SO-III SO-IV SO-V Opportunity 145 146 LARSEN & TOUBRO Material Topics Legend SO-II Material topic identified In case of risk, approach to adapt or mitigate Natural Capital Manufactured Capital Human Capital Intellectual Capital Social and Description and rationale for identifying risk/ opportunity SO-I Risk Risk or Opportunity Business Ethics Ethics and integrity are the key values that have enabled the Company to acquire trust and build a strong brand. These values are important to ensure that the organisation conducts business in an ethical and transparent manner. Upholding L&T's core values requires crafting, implementing, and strengthening the policies and procedures. The Company has strong and robust policies, processes, and SOPs in place. However, driving compliance can be a challenge due to the nature and wide expanse of the businesses, large workforce, and frequent changes to regulatory requirements. Clear rules, policies, and procedures have been enforced across the Company. For example, the Code of Conduct defines the behaviour expected from all the employees and stakeholders and lays down the policies and systems for effective implementation. The Company has mandatory courses to help employees understand the norms required to work in a safe, compliant, and ethical manner. The Company has formulated a Whistle Blowing Policy and mechanism and constituted the Whistle Blowing Investigation Committee. The objective is to establish a vigil mechanism for employees to report concerns about unethical behaviour, actual or suspected fraud or violation of the Company's Code of Conduct or ethics policy. The Audit Committee is responsible for reviewing the functioning of the Whistle Blower mechanism. From time to time, the Company's systems of internal controls, covering financial, operational, compliance, IT applications, etc., are also reviewed by external experts. The governance is led by the Board and supported by the Board Committees. Policies, Code of Conduct, and Management Systems have been developed and deployed across all businesses and functions to ensure adherence and implementation. These are also reviewed on a periodic basis and updated as required. Details available at https:// investors.larsentoubro.com/corporate-governance.aspx Please refer to Annexure' B' - Report on Corporate Governance for further details. Legend Material topic identified Description and rationale for identifying risk/ opportunity In case of risk, approach to adapt or mitigate Natural Capital Manufactured Capital Human Capital Intellectual Capital Social and Relationship Capital Financial Capital Financial Implications + Positive (-) Negative + Both Material Topics Corporate Overview Integrated Annual Report 2023-24 Corporate Overview Energy Intensity Reduction Path Emission and energy intensity reduction target w.r.t baseline FY 2020-21 Energy Intensity Reduction 11 % Renewable (% of Electricity Consumption) 50% Emissions Intensity Reduction 25 % The Company has set interim targets for carbon, water neutrality and other areas, which are a part of the current Lakshya 2026 strategy plan. These are: Lakshya 2026 Targets on Natural Capital LARSEN & TOUBRO 155 While the Company is focussing on reducing water consumption intensity, the Company's CSR programmes also significantly contribute to positive impact through water conservation and groundwater recharge. The Company has partnered with an independent third party to assess CSR initiatives for water recharge and their impact on achieving Water Neutrality status at the Company level. In addition to the above, various business units are implementing initiatives relevant to their context. For EPC projects, some businesses are focussing on sourcing treated wastewater from municipal corporations. In a few cases, the quality obtained is at par with freshwater and has been utilised even in concrete mixes. In addition to chemicals, one of the businesses has also experimented with innovative solutions, e.g., steam curing for concrete. Increasing water harvesting Increasing wastewater recycling and use for non- potable purposes, e.g., toilet flushing, gardening, dust suppression, landscaping Improving water use efficiency through reducing losses in the equipment and processes and adopting methods e.g., curing compounds and plasticisers for concrete curing works and admixtures for concrete production The Company's water footprint is driven by industrial consumption, primarily due to the use of water in civil work for EPC projects. The consumption pattern is determined by the type of structures or works and technical requirements of the project. Further, numerous standards and codes prescribe the water quality required in such works. The Company is focussing on reducing water consumption intensity, emphasising the following: Water Neutrality 95.4 97.5 98.8 92.4 2025-26 2024-25 2021-22 2022-23 2023-24 6.4 7.8 Natural Capital Current/Projected Energy Intensity (GJ/* Cr) 2020-21 2024-25 2025-26 Use of renewable fuel, e.g., biodiesel 8.3 8.9 8.9 Emission Intensity Reduction Path 76.6 156 → Target Energy Intensity (GJ/ Cr) 2021-22 2022-23 2023-24 2020-21 83.1 8.7 Switching from diesel- powered equipment to low carbon fuel, e.g., CNG and electricity powered equipment Diesel budgeting and control, including reducing losses Diesel consumption optimisation through digitisation, sensors, and other actions □ Electric Plant and Machinery □ Higher energy efficient machines □ Control losses □ Optimise utilisation of equipment Offset (-10%) 154 Bars indicate approximate % range for emission reduction from different levers Decarbonising Energy Use (~55%) Energy Efficiency (~35%) Higher energy efficiency equipment and appliances Corporate Sustainability FY40 BAU Net Zero Path Decarbonising Energy Consumption Improving Energy Efficiency ✓ The Company's strategy for achieving carbon neutrality is based on two levers: Based on the current projections, GHG emissions are expected to peak around FY 2025-26 and decline thereafter. The slower pace of increase in the short term would be primarily driven by the improvement in energy efficiency and the reduction in fossil fuel consumption intensity. For the long term, a shift to renewable electricity and fuels would be the primary driver in reducing GHG emissions. Technically, it may not be feasible to reduce emissions to zero, and therefore, offsets incurred from plantations will be considered for achieving carbon neutrality. The Company targets to plant 1.5 - 2 Mn saplings each year to create the stock, which will enable carbon sequestration. The Company's carbon footprint (Scope 1+2) is primarily due to diesel and electricity consumption. Diesel has a high share in the overall energy mix (>75%), while electricity comprises -16% of the energy mix. Diesel is significantly consumed in powering construction machinery used for EPC projects and partially for electricity generation. Further, plants, equipment, offices, and campuses consume electricity. As the Company keeps expanding and growing, energy consumption and related emissions are also expected to rise. Carbon Neutrality Emissions ➡ Target Emission Intensity (tCO2e/ Cr) Current/Projected Emission Intensity (tCO2e/* Cr) □ Optimise energy use Renewable electricity to grid electricity (DG) set Diesel Generator Switching from Key initiatives identified for reducing diesel consumption: The other task force is implementing options for reducing diesel consumption. Based on the analysis of current initiatives, scaling up and replication of these initiatives across different businesses was undertaken. Further, these initiatives were prioritised based on the impact and feasibility of implementation. site locations. While there are many options available for sourcing renewable electricity, there are significant challenges in getting renewable power through the grid at project site locations due to issues related to local regulations as well as concerns of renewable energy service providers. The options identified for increasing renewable electricity sourcing are PPAs, on site solar through third-party, group captive open access, green open access, and green tariff. One of the task forces has been working on identifying initiatives to increase renewable electricity sourcing. Through the task force actions, the Company has been able to sign a Hybrid Power Purchase Agreement (PPA) for renewable power and has been able to source renewable power through open access for a few project The Company's target for Carbon Neutrality has cascaded to all businesses. While each business has identified and undertaken a set of initiatives for the short-term, there were challenges in achieving the targets. The Company has formed two task forces in FY 2023-24 to counter these roadblocks. These task forces have been formed as cross-functional teams with representation from various business units and are aimed at proposing solutions that could be implemented across all the locations of the Company. □ Switch to low carbon fuel Green Campus Task Force Reports Financial Statutory Integrated Report Discussion and Analysis Management Corporate Overview Integrated Annual Report 2023-24 □ Carbon sequestration from tree plantation Statements Integrated Annual Report 2023-24 PPA: Power Purchase Agreement 2021-22 2022-23 2021-22 6.4 62 6.2 (tCO₂e/ Cr) Scope 1 Emission Intensity² Scope 3 emissions has been estimated based on the GHG Protocol. More than 95% of Scope 3 emissions comes from purchase of goods and within that category, 90% is contributed by consumption of steel and cement used at project sites. 70,73,536 tco,e 2023-24 3,49,682 tco,e Emissions from purchased goods, upstream transportation and distribution, employee commuting, and business travel. Scope 3 Emissions from consumption of grid electricity, sourced from DISCOMs, in various plants, machinery, manufacturing facilities, and offices. Scope 2 Emissions from consumption of fuels such as petrol, high-speed diesel, furnace oil, natural gas, LPG, CNG, and acetylene in various construction machinery, diesel generators, and furnaces. Scope 1 Emissions attributed to the Company's operations arise primarily from the use of fuel, electricity, and material in its operations and processes. As part of its Net Zero strategy, the Company is working on reducing its GHG footprint across the three scopes. GHG Emissions LARSEN & TOUBRO 6,35,646 tco,e 158 5.0 (tCO₂e/ Cr) Capital Natural 7.8 Integrated Annual Report 2023-24 2Emission factor for diesel has been revised to 2.68 from 2.73 tCO₂e/kL, aligned to latest emission factors in IPCC AR5. Emission factor for grid electricity revised from 0.00081 to 0.000823 tCO,e/kWh based on the latest report of CEA, the central authority for power sector in India; https://cea.nic.in/wp-content/uploads/baseline/2024/01/User Guide Version 19.0.pdf ~1,37,000 tco₂e Emissions avoided in FY 2023-24 due to reduction in emissions intensity of the Company. 2023-24 2022-23 Scope 2 Emission Intensity² 2021-22 8.9 8.9 Scope 1+2 Emission Intensity² (tCO₂e/Cr) 2.8 2023-24 2022-23 2021-22 2.5 2.7 Emissions (Scope 1+2) intensity has decreased by 12.2% in FY 2023-24 compared to FY 2022-23 mainly due to a reduction in direct energy consumption intensity. The Company has committed to achieve Carbon Neutrality by 2040 and Water Neutrality by 2035. The road map to help achieve these targets is based on the FY 2020-21 baseline of emissions and water consumption and business growth assumptions. This road map has been divided into short-term, medium-term, and long-term and aligns with the Company's 5-year strategy plan. 83.1 97.4 Solar (Captive and PPA) Quantity Sourced (Mn kWh) Source The Company has utilised 43.1 Mn kWh of renewable electricity, which consists of 9.2% of its total electricity consumption (468 Mn kWh) in FY 2023-24. Renewable Energy In FY 2023-24, the Company's total energy consumption was 10.5 Mn GJ, comprising direct energy consumption of 8.8 Mn GJ and indirect energy consumption of 1.7 Mn GJ. Total energy intensity has decreased by 15.9% compared to FY 2022-23 and 13% compared to FY 2020-21 (baseline). Energy Statements Reports 10.3 Report Statutory Integrated Management Discussion and Analysis Corporate Overview 84.2 (GJ/ Cr) Direct Energy Intensity 2023-24 2022-23 Financial 98.8 Wind (Captive and PPA) Others (Hybrid PPA and open access) (GJ/ Cr) Total Energy Intensity 2023-24 2022-23 2021-22 157 Additionally, closure or tapering down of certain projects, e.g., Mumbai Trans Harbour Link (MTHL), Mumbai Coastal Road Project (MCRP) Package 01, Delhi International Airport Ltd. (DIAL) Runway, and Dwarka Expressway, and reduction in on site civil construction activities in a few projects, e.g., Mumbai Ahmedabad High-Speed Rail (MAHSR) C4 Package and Chennai Metro Rail Ltd. (CMRL) project, contributed to lower diesel consumption compared to FY 2022-23. Total energy intensity decreased by 15.9% in FY 2023-24 compared to FY 2022-23, primarily due to a reduction in direct energy intensity by 19.3%. Many project sites, e.g., Rail Vikas Nigam Limited (RVNL) Package 02 and 04 and Chennai Metro Rail Ltd. (CMRL) ECV02, have switched to grid electricity from DG. New project sites have begun with electricity connections from the initial stage. 13.3 20.1 12.4 (GJ/ Cr) Indirect Energy Intensity 2023-24 2022-23 2021-22 69.7 86.4 Energy (electricity) from renewable energy sources was 0.16 Mn GJ in FY 2023-24, which has increased around 20% compared to FY 2022-23. The total electricity consumption has increased from 1.3 Mn GJ in FY 2022-23 to 1.7 Mn GJ in FY 2023-24. Compared to FY 2022-23, renewable as a percentage of electricity has decreased slightly due to lower sourcing through PPA. The unavailability of adequate land for installing solar modules, challenges in obtaining green open access for temporary connections, developers' preference for long-term PPAs were the main hurdles faced at project site location. 12.7 13.2 Natural Capital Based on FY 2020-21 baseline LARSEN & TOUBRO 50% 150 * Improvement over FY 2022-23 Green Business Recycled and eco-friendly material used 32% +31%* Water consumption intensity 102 KL/ Cr Materials Revenue from Water CO₂ Saplings planted ~4 Mn -12%* 7.8 +CO₂e/ Cr Emissions +200%* from renewables Electricity GHG emission intensity +20%* +54%* Integrated Annual Report 2023-24 Workforce Skilling and Own facilities and offices assessed 100% LTIFR 0.07 Key facilities SA8000 certified 2 Human Rights Safety training man hours Green Business 6.9 Mn Reports Financial Statutory Integrated Report Discussion and Analysis Management Corporate Overview Health and Safety SOCIAL Net Zero Strategy Talent Management 9.2% Energy Corporate Secretarial, Key functions Key Councils and Unit/Project Level Responsibility Sustainability Coordinators across businesses Business Level Responsibility Corporate Centre/EHS/Business Heads Executive Committee CSR & Sustainability Committee Unit Heads, and Heads of various Corporate Functions supported by Corporate Sustainability. Various Councils, Committees and Task Forces designated with specific responsibilities have also been constituted for operationalising sustainability across the Company. Sustainability Function and Business Sustainability Governance Structure Human Resources, CSR, Supply The overall responsibility for ensuring the implementation resides with the Corporate With the evolving landscape and regulatory requirements, the Company has put the necessary tools, systems, processes, and resources in place to incorporate ESG in business strategy and operations. The Company also conducts materiality assessment, which is a process to capture stakeholder concerns on ESG and its importance to the Company. Materiality is one Implementation Statements Reports Financial Statutory Integrated Report Discussion and Analysis Management of the inputs to the Company's Sustainability Strategy, which enables prioritising key focus areas. The material issues and related ESG KPIs are reviewed through various stakeholder engagement processes, and by senior leadership. -16%* Chain Management, Industrial Admin, Finance 淤 consumption intensity Energy 83.1 GJ Cr ENVIRONMENT To report sustainability highlights at an overall level, at least one KPI has been selected for each material topic based on the importance attached by investors, rating agencies and regulators and these are given below. The Company conducts materiality assessment (refer to Materiality Assessment section) to identify and prioritise the key material topics pertaining to ESG, based on the relative importance of these topics to the stakeholders and in the context of L&T's business imperatives. The assessment identified 14 important material topics, and detailed performance is stated in the respective chapters on the six capitals. OF FY 2023-24 SUSTAINABILITY HIGHLIGHTS Relations, Sustainability Highlights 149 For details, please refer to the Assurance Statement in BRSR. in the preparation of the disclosures, testing of data, records and relevant documentation, analysis and review of key data management systems, processes, and procedures relating to collation, aggregation, validation and reporting of the sustainability information. Social, and Governance (ESG). SEBI has also mandated that the top 150 listed entities undergo reasonable assurance by a third party. BRSR Core parameters comprise environmental, social, and financial KPIs. Reasonable assurance involves understanding systems and controls in place for capturing sustainability performance data used In July 2023, the Securities and Exchange Board of India (SEBI) introduced mandatory disclosure under 'BRSR Core' for certain listed companies in India. The Business Responsibility and Sustainability Report (BRSR) format was initially introduced in May 2021, which included reporting of more than 100 KPIs across Environmental, Sustainability Data Assurance Policies and Processes EHS Council, Material Council, Green Campus Task Force Task Forces LARSEN & TOUBRO Diversity and Inclusion Statements Employees covered CLEAN ENERGY AND SANITATION AFFORDABLE AND CLEAN WATER 6 SDGs Impacted SE-3 SE-2 SE-1 12 24,000+ SO-I Strategy Linkage¹ Recycled and Eco-Friendly Material used of Total Material 32% Emission Intensity Reduction 12% Energy Consumption Intensity Reduction 16% Renewable Electricity consumption SO-III 1,55,046 GJ 15 PARTNERSHIPS 153 Note: For KPIs related to intensity, the denominator considered is standalone revenue in crore. 1 For details, refer to 'Business Model and Strategy' section. Saplings Planted ~4 Mn Supply Chain Sustainable Management Management LIFE ON LAND Hazardous Material Water, Waste and Business Ethics CLIMATE ACTION 13 RESPONSIBLE CONSUMPTION AND PRODUCTION Action Climate Material Topics 17 FOR THE GOALS Brand Key Highlights of FY 2023-24 SO-V The impact of climate change has exacerbated over the years, as evident in recent heat waves, forest fires, and extreme rainfall events across the world. The Company has been taking steps consistently towards decarbonisation, resource efficiency, biodiversity protection, Data Privacy & Cyber Security Ranked 3rd in 'Top 200 Environmental Firms' in 2023 Engineering News-Record ENR Brand Management & ESG Ratings Customer Satisfaction Score out of 10 9 Customer Centricity New joinees trained on CoC Sustainable Supply Chain 100% GOVERNANCE Women in senior management 99 Workers covered 90,000+ CSR beneficiaries 1.6Mn Diversity ratio 8.1% sustainable supply chain. Zero Governance & Ethics 32% Cases of data breaches Statements Reports Report Discussion and Analysis Financial Statutory Integrated Management Corporate Overview Social Impact 152 Natural Capital NATURAL CAPITAL LARSEN & TOUBRO 151 of top 200 supply chain partners assessed on ESG 100% Rated 'B-' for Climate Change 2023 CDP Sustainable sourcing by value Integrated Annual Report 2023-24 TIVATE A GREENER WORLD, RY DAY IS A CHAN LET L&T planted ~4 million saplings in FY 2023-24, with over 99% planted by Water & Effluent Treatment (WET) business. Over the years (2008-2024), L&T has planted around 13 million saplings. During 15-17 August 2023, a massive plantation drive 'Project GreenHands' was undertaken with more than 2.5 million saplings planted across 559 project sites. Natural Capital 167 Biodiversity LARSEN & TOUBRO AKE A DIFFEREN design. Leadership Development Academy (LDA), Lonavala, was re-certified as IGBC Platinum in FY 2021-22, and A. M. Naik Tower, Mumbai, was certified as Leadership in Energy and Environmental Design (LEED) Platinum in FY 2020-21. There are 12 other buildings across various locations certified at different periods. Tree Plantation Chennai HQ Lower Sutkel project, Odisha Ad Dakhiliyah project, Oman Boudh and Kandhamal project, Odisha bog mo mode Cosoa pengope Jeprow MALAYS DEL RESEAL S00OL DUMENBAHAL Indore water project, Indore 24x7 water project, Pune Water Technology Centre, Kancheepuram Bargarh project, Odisha 168 Integrated Annual Report 2023-24 Green Buildings of the Company to: 15 to 17 Aug IRTS CULTIVATE A GREENER WORL EVERY DAY SA CHANCEIC MAKE A DONCE The Company has been at the forefront of promoting and creating Green Buildings both for itself as well as its clients. In FY 2023-24, L&T Data Center-1 in Kancheepuram, received Indian Green Building Council (IGBC) Platinum rating while one of the buildings in Chennai campus received IGBC Net Zero rating for Under Carbon Neutrality initiatives, the Company has also started exploring options to replace fossil fuels with biofuels and identified an agency for sourcing renewable diesel. The key differentiator for this supplier is the use of agri and agro-industrial waste as feedstock compared to vegetable oils or animal fats typically used for generating biodiesel. The Company has successfully conducted pilot studies with up to 30% blending of this renewable diesel with traditional diesel and has started implementation at some project sites. This initiative would be gradually scaled up, both in terms of coverage across sites and increased blending. Integrated Annual Report 2023-24 CH Corporate Overview Management Integrated Statutory Financial Discussion and Analysis Report Reports Statements Awards and Accolades APEX WOU FOUNDATION 8th Apex India Conference on QHSE & Awards 2023 Green Leaf Award | CSR Excellence Award Safety Award | HR Excellence Award Quality Excellence Award Talegaon facility is an important manufacturing unit for the Company. The business team has been implementing initiatives over the years to improve the environment performance of the unit. In FY 2023-24, the unit implemented measures to reduce water consumption. Key measures taken were: digital meters installation to monitor consumption on a per-building basis, MBR technology-based STP (Sewage Treatment Plant) installed to replace the old STP, pipelines to segregate touch and non-touch water from the storage tank, and use of treated water for flushing, topping up cooling towers, and gardening purposes. As a result of the initiatives taken, the facility has been able to reduce freshwater consumption per capita by ~70%. 4th May 2034 at Shangri La Eres, New Delh Recycling Wastewater In some underground metro projects, dewatering is required to enable proper working conditions. Typically, the water extracted in the dewatering process is sent to a stormwater drain. In the Chennai Metro Rail Ltd (CMRL) TU02 Project, the project team came up with a design to process the water from the dewatering process and then recharge groundwater through borewells. This enabled not only safe discharge of the water but also helped replenish groundwater. Approximately 21 kL per day of dewatered quantity was sent to recharge wells. In FY 2023-24, the site was able to recharge ~3,520 kL of water. 12.9 111.4 2021-22 2022-23 2023-24 101.5 102.0 020 The Company has made improvement in FY 2023-24 for capturing data related to water withdrawal, consumption, and discharge. However, the Company has more than 700 project sites in operation, and which are by definition temporary and with open boundaries. Water is taken from multiple sources, as per site conditions and discharged through multiple points. These issues create significant challenge in putting direct measurement systems and therefore, indirect estimation has to be made which presents difficulty in completeness and traceability of the data as required for reasonable assurance standards. To improve data collection and reporting, the Company is redesigning the Standard Operating Procedures (SOPs) which will based on reasonable assurance requirements, and this will be rolled out to all the sites/locations. Additionally, the Company is finalising the digital solutions which would enable direct measurement without manual intervention. Improving Rainwater Harvesting In Mumbai Ahmedabad High-Speed Rail (MAHSR) project, one of the sections has implemented a rainwater harvesting system with a conservation capacity of ~6500 kL, conceptualised at the design stage itself. Water conserved is stored in a storage tank for use in site activities and provided to the community for irrigation and other uses. Additionally, the energy spent in sourcing water is also avoided. 161 LARSEN & TOUBRO Natural Capital Using Steam Curing to Reduce Water Consumption Underground metro rail and main line rail tunnel projects require tunnel rings to provide stability and strength to the structure. Traditionally, the tunnel ring segments are pre-casted using a water curing process. However, the cycle time and water requirement are high in this process. The steam curing method was implemented at two projects - Chennai Metro Rail Ltd (CMRL) TU02 and Rail Vikas Nigam Limited (RVNL) 04 Project. This involved a special setup to apply high temperature steam to freshly casted segments in a controlled environment. This method accelerates the curing process, leading to faster strength development and reduced curing time and water consumption compared to the traditional method. Segment curing time was reduced by 50%, enabling faster tunnel construction and water requirement for the curing process was reduced by ~60%. Recharging Groundwater 162 11.0 10th Edition of CII National Award for Environmental Best Practices 2023 Chennai & X SEM G CH CII DX Award for Best Practice in Digital Transformation - Equipment monitoring 163 2,331 LARSEN & TOUBRO Waste and Circular Economy Waste management is a material topic and a key focus area for the Company due to the volume and type of material used in EPC projects and manufacturing. The strategy to manage waste is aligned with the principles of Circular Economy and focusses on the 3Rs, i.e., Reduce, Reuse, and Recycle. Waste management is integrated into the EHS management system with comprehensive guidelines and procedures to ensure proper waste management. Measures include waste identification, segregation, collection, recycling, and disposal. The Company has tied up with registered waste processors and waste handling agencies and ensures that all regulatory compliances are met. Waste Management Measures Hazardous waste is stored and transported as per the statutory requirements • Hazardous waste, such as used oil, oil-soaked cotton waste, used chemical/paint/oil containers, batteries, paint residues, ETP sludge; Electronic waste (e-waste); and Biomedical Waste, are disposed of through Government- approved recyclers/re-refiners/re-processors and according to the statutory requirements • There is no import, export, transport, or treatment of any hazardous waste covered under the Basel Convention □ Non-hazardous waste is either reused, recycled, or disposed according to the relevant procedures Hazardous waste (tonnes) 4,239 2029 AWARDS Larsen & Toubro Limited (Construction), National Environment Award - Industrial Construction Sector at Global Safety Summit NEW DELM INNO ATVE PROJECT Green Leaf Award in Energy Efficiency category for MAHSHR C4 Project Cll National Award for Environmental Best Practices SS NEXT Jid-1 GSS AWARDS & ESG COFFICE L&T Construction **** NATIONAL INVIRONMENT AWAR ME ENTERPRISES-INDUSTRIAL SENSTRUCTION SECTO AMITY UNIVERSITY S MERIDIEN 22 DEC 2023 GSS MERIDIEN 22 DEC 2023 2023-24 2022-23 2021-22 The principal source of air emissions is chimney stacks at the manufacturing facilities. The Company ensures that these emissions stay within permissible limits and has been taking initiatives to reduce them. The table shows stack emissions across different manufacturing facilities of the Company. SOX, NOx and PM Emissions (mg/m³) FY 2022-23 FY 2023-24 Location Sox NOX PM Sox NOX PM Hazira 18 26 15 24 19 Stack Emissions 45 For other initiatives on energy conservation and renewable energy, please refer to Annexure 'A' to the Board Report. Emissions avoided in FY 2023-24: 12,952 tCO₂e Corporate Overview Management Discussion and Analysis Integrated Statutory Financial Report Reports Statements Emissions Reduction Initiatives The Company is implementing various initiatives across the project sites and manufacturing facilities to reduce emissions. Some initiatives and the benefits derived are: Fossil Fuel Consumption Reduction through Operational Improvements Construction machinery used at project sites is typically powered by diesel. As part of cost optimisation initiatives, project teams constantly look for means to maximise the utilisation of such machinery as well as optimise the deployment. These initiatives are enabled using sensor-based technologies and digital tools. Switching from Diesel Generators to Grid Electricity for Power Various construction project sites are powered by DG sets due to remote locations and hurdles in obtaining grid connections. The Company has taken initiatives across various project sites to obtain grid electricity connections and reduce reliance on DG set. Increasing Renewable Electricity Sourcing Increasing the Company's renewable share of electricity is one of the areas of focus. In addition to the installation of rooftop solar and third-party PPAs, a few project sites were successfully able to source renewable electricity through Green Tariffs offered by the Distribution Company (DISCOM) during the year. This has enabled these sites to transition to 100% renewable electricity, and similar efforts are being explored and scaled up as much as possible. Emissions avoided in FY 2023-24: 22,207 tCO₂e Emissions avoided in FY 2023-24: 1,675 tCO₂e Pithampur 22 21 OC ON Integrated Annual Report 2023-24 Natural Capital 717 11.1 Corporate Overview Management Discussion and Analysis Integrated Statutory Financial Report Reports Statements Water EPC projects and Hi-Tech Manufacturing do not have water intensive processes compared to other industries. Water consumption for the Company is primarily driven by water required in civil works in EPC projects. The Company has identified various initiatives to reduce water consumption and increase wastewater recycling at project sites and manufacturing facilities. The manufacturing facilities and even a few projects are Zero Liquid Discharge locations, mostly recycling and reusing the wastewater generated for various purpose. For example, gardening, toilet flushing, and ancillary activities in construction sites, such as dust suppression, equipment washing, and other areas. Water Consumption (Mn KL) Water Consumption Intensity (KL/* Cr) GRE 160 Piloting Biofuels Emissions avoided in FY 2023-24: 2,490 tCO₂e. 61 16 14 26 Kancheepuram 11 44 38 2021-22 10 37 159 LARSEN & TOUBRO Adopting Cleaner Fuels Hot Mix Plants (HMPs) are required for flexible pavement construction and typically use furnace oil or High Speed Diesel (HSD) as fuel in the burners. Project teams at the DIAL expansion project and Meerut Aligarh Road project explored options to decarbonise the energy consumed in HMPs and identified a solution to replace traditional burners with duel fuel burners which were powered with Compressed Natural Gas. CNG is a comparatively cleaner fuel than furnace oil or HSD and thereby, the teams were able to reduce the emissions from HMP operations. Emissions avoided in FY 2023-24: 1,017 tCO₂e Replacing LPG with CBG The Company's Pithampur factory (capacity. ~1 lakh TPA) produces galvanised steel components for a range of power transmission line towers. The factory is equipped with the latest CNC lines for the fabrication of towers and microprocessor-based temperature-controlled systems for the galvanisation of tower members. Galvanising operations were powered by LPG, which itself is a relatively clean fuel compared to diesel. To further lower the carbon footprint, the team initiated replacing LPG with Compressed Biogas (CBG) and redesigned the production facility, along with the control systems. CBG was sourced from Indore Municipal Corporation, which has one of India's largest Bio-CNG plants. This plant generates CBG from the processing of municipal solid waste and agri waste and has almost zero carbon emissions due to feedstock being waste products. 46 2022-23 164 7,474 2021-22 2023-24 2022-23 2021-22 2023-24 2022-23 2021-22 10% 12% materials of total bulk materials % of Eco-Friendly and Recycled Share of Fly ash and GGBS in cementitious materials % of Manufactured Sand used in place of sand GGBS (Mn tonnes) 0.3 2 0.2 Steel, cement, aggregates, and sand are major materials used in the operation. The Company is striving to increase the use of sustainable and eco-friendly materials as well as the recycling of materials within its production facilities. At the Company's transmission tower production facility, sustained efforts are being made to recycle steel and zinc that are consumed in the operations. However, design standards and customer specifications are limiting factors in increasing the use of non-virgin or waste materials, e.g., fly ash and GGBS. The Company actively promotes and tries to maximise the use of such materials for various applications across construction projects. Material Management LARSEN & TOUBRO 54% 2022-23 2023-24 2023-24 14% 2023-24 Presence in Eco-Sensitive Areas Statements Reports Financial Statutory Integrated Report Management Discussion and Analysis Corporate Overview Natural Capital 4.0 Manufactured Sand (Mn tonnes) 3.1 0.5 32% 2023-24 2022-23 2021-22 1.3 24% 18% Integrated Annual Report 2023-24 2022-23 The Company has operations in a few eco-sensitive areas (such as national parks, coastal regulation zones) that are subject to the nature of the business. The Company complies with all applicable rules and regulations for such locations and ensures that 'Do No Harm' approach is followed during the operations. Further, the Company has taken additional steps to mitigate the impact on the environment. A list of projects in these eco-sensitive locations is provided in Essential Indicator No. 11, and prevention and remediation measures taken are indicated in Leadership Indicator No. 3 in Principle 6 of the BRSR. 2023-24 Discussion and Analysis Financial Statutory Integrated Management Corporate Overview Natural Capital Integrated Annual Report 2023-24 The significant increase in waste generation is due to enhancement in waste data capturing/reporting across different businesses and on account of higher material consumption linked to significantly higher execution. Report 2023-24 2021-22 49.6 Construction and Demolition waste generated 2.4 lakh tonnes Waste Recycled/Reused of > 50% 446.6 322.6 2021-22 2022-23 Reports Non-hazardous waste ('000 tonnes) Recycling and Reusing the Waste 2022-23 Statements 0.3 ༣ 0.3 Fly ash (Mn tonnes) 0.2 45% 29% 166 165 2021-22 In 2022, the Ministry of Environment, Forest, and Climate Change (MOEFCC) made amendments to EPR Rules related to plastic waste, e-waste, and battery waste. As a result, the coverage of the Rules was extended to importers, who could generate plastic waste from packaging of imported materials; e-waste, which could be generated from imported electronic or electrical items; and battery waste, which could be generated from imported batteries or equipment containing batteries. The Company has obtained registration as an importer under the EPR Rules for all three waste categories. To comply with EPR Rules and improve the waste management systems, the Company has created processes and undertaken awareness sessions for the concerned departments. Extended Producers Responsibility (EPR) Concrete waste is generated in civil works related to infrastructure projects. Typically, this is disposed through authorised agencies or sent to landfills. The concrete waste also consumes space at the Reuse of Concrete Waste - structure pedestal, building floor, canteen benches Support structure using steel scrap Benches and chairs for labour colony from wooden waste Paver Blocks from concrete waste Approach road using steel slag different sizes. This was reused in making solid blocks and aggregates for use in construction and infrastructure works in workmen colony at the site. project site. In the Kudankulam Nuclear Power Project, the project team established a crusher plant to process this concrete waste. Concrete waste of ~160 tonnes was crushed and processed into aggregates of 31% 25% 18% □ Surface Miners/Sand Plants, 17% etc. (Except for Coal) Clean Mobility 9% □ Mass Transit Systems □ Conventional Railway High-speed Rail, Semi-High-speed Rail □ Network (Wastewater) Water & Sanitation □ Water Supply □ Irrigation □ Treatment Plants (Water, Wastewater, Effluent) Biodiesel/Clean Fuels 2 Globally accepted FTSE Green Revenues Classification System is a taxonomy used to define and measure industrial transition to a Green Economy. It captures environmental products and services covering 10 green sectors, 64 subsectors and 133 micro sectors; https://www.lseg. com/en/ftse-russell/green-revenues-data-model (Metro Rail, Light Rail Transit) □ Process Equipment for Green Business revenue Modular Fabrication Facility, Kattupalli, Tamil Nadu AND INFRASTRUCTURE Water, Waste, and Hazardous Materials Management 178 Sustainable Supply Chain CLIMATE ACTION Data Security, Privacy, and Cyber Security Quality of Products and Project Delivery Skilled Manpower Strategically located, state-of-the-art, all-weather waterfront Modular Fabrication Facility. Human Rights and Labour Conditions Management * 63,426 cr 1 For details, refer to 'Business Model and Strategy' section. 175 LARSEN & TOUBRO Manufactured Capital Hi-Tech Manufacturing The Company has created manufacturing facilities that are globally recognised capabilities for producing engineered- to-order equipment solutions for process plants, nuclear power plants, aerospace and other sectors. A. M. Naik Heavy Engineering Complex, Hazira, Gujarat World-class manufacturing complex with cutting-edge technology adopting Industry 4.0. Brand Integrated Annual Report 2023-24 Water & Effluent Treatment The entire spectrum of solutions for water treatment and distribution, wastewater treatment and collection, desalination plants, irrigation, industrial effluent treatment, water management, and smart water. Green Infrastructure Buildings & Factories This segment comprises businesses that are recognised for their end-to-end design-to-deliver capabilities to create assets linked to infrastructure, energy, and metals. These businesses have established credentials in conceptualising, designing, executing, and commissioning large and complex projects for various industries and segments. EPC Projects Statements Reports Financial Statutory Integrated Report Management Discussion and Analysis Corporate Overview Shipbuilding Facility, Integrated Annual Report 2023-24 176 A detailed description of the business capabilities, achievements, and sector outlook is covered in the 'Management Discussion and Analysis' section of this Report. Manufacturing Units, Kancheepuram, Tamil Nadu Manufacturing units related to businesses in areas of transmission tower manufacturing and rubber processing machinery are located at Kancheepuram (~70 km from Chennai). It has a Transmission Tower Testing and Research Station as well, which provides design and testing services to clientele from 33 countries. A recognised facility for prototyping and manufacturing precision engineering and sensor systems. Strategic Systems Complex, Talegaon, Maharashtra There are other smaller manufacturing units in Coimbatore, Tamil Nadu and Mumbai, Maharashtra. Globally recognised shipbuilding facility near the waterfront. INDUSTRY, INNOVATION Kattupalli, Tamil Nadu The entire spectrum of solutions for urban infrastructure, hospitals, IT infrastructure and data centers, and industrial plants. □ Green Buildings Transportation Infrastructure Heavy Civil Infrastructure Complex projects related to high- speed rail, mass transit systems, nuclear power plants, hydroelectric power plants, tunnels, ports, and marine structures. □ Nuclear (Solar, Hydro) □ Renewable Energy Clean Energy A third-party assessment was conducted in the previous year to understand the positive impact of Green Business on the environment. It was estimated that the projects commissioned in FY 2021-22 and FY 2022-23 would help avoid emissions annually to the tune of 1 million tCO₂e. The Company's green commitment has also been acknowledged globally by Engineering News-Record (ENR), which is one of the globally recognised construction industry publications. L&T has been ranked third in the Top 200 Environment Firms Survey by ENR for the second year in a row (2022, 2023). The Green Business contributed *634 billion (50%) to the revenue of the Company as compared to 37% in FY 2023. The Company had aimed to increase its share of Green Business to 40% of revenue as part of its Lakshya 2026 strategy plan. The Company has referred to the 'FTSE Green Revenues Classification System 2.0 (GRCS) 2, which is comprehensively aligned to the EU Taxonomy, for mapping revenues from products and services that have a positive impact on the environment. conservation through recycling or repurposing through its Green Business offerings. Linked to two Strategic Objectives of the Company, i.e., SO-III (Developing business offerings to ride the Energy Transition) and SO-V (Enabling business sustainability through a high focus on ESG and Shareholder Value Creation), the Company offers a bouquet of solutions to create sustainable and green assets for its customers. These solutions, termed 'Green Business', are centred around clean energy, clean mobility, water and sanitation, green infrastructure, and other areas linked to a greener future. The Company enables its customers improve energy efficiency, lower carbon emissions, enhance water use efficiency, increase wastewater recycling, reduce air pollution, and enable resource Green Business Capital Manufactured LARSEN & TOUBRO 177 A detailed description of the business capabilities, achievements, and sector outlook is covered in the 'Management Discussion and Analysis' section of this Report. Large and complex projects related to thermal power plants, nuclear steam and turbine islands and environment solutions for power plants. L&T Energy - Power L&T Energy - Hydrocarbon Large and complex projects related to oil and gas extraction, upstream oil and gas processing, mid and downstream processing, pipelines, storage tanks and terminals, and coal/pet-coke gasification. Solutions for iron and steel plants, non-ferrous smelters and refineries, mineral beneficiation plants, speciality conveyors, and mining and bulk material handling equipment. Minerals & Metals Power Transmission & Distribution Solutions for power transmission lines, substations, cable networks, solar PV plants, mini/microgrids, and digital solutions for power systems. Full spectrum of solutions for highways, bridges, elevated corridors, runways, railways, and mass transit systems. □ Efficient Power Transmission and Distribution Systems Others Company's Plans and Actions Weather conditions experienced at work locations may be significantly different from historical or predicted meteorological data. This may impact the preparedness of the work location and could impact the operating costs. Company's Plans and Actions The Company's work locations, particularly the project site locations, track the current weather pattern through information obtained from the Meteorological Department. Deviations observed against the original information are factored into the project schedule, as well as additional actions to ensure the safety of resources/assets. Along with climate change, water stress has increasingly become a global risk. As a result, new regulations related to water use and withdrawal are being formulated and enforced. This may impose an additional burden on operations to find alternate assured sources of water. The Company is focussing on reducing groundwater withdrawal, particularly in water-stressed areas. Initiatives are being taken to reduce water consumption through use of curing compounds and plasticisers for concrete curing works and admixtures for concrete production. Other initiatives are focussed on improving wastewater recycling and the use of treated wastewater from municipal corporations and rainwater harvesting. 171 LARSEN & TOUBRO Natural Capital Mitigating Effect of Heatwaves Extreme summer heat in India and Middle East, exacerbated by frequent heat waves, impacts productivity as well as health and wellbeing of the workforce. The impact is more severe for project sites operating in open environment. The Company takes proactive measures to safeguard the workforce from adverse effects of the intense heat through additional health measures, working time adjustments and advisories/awareness sessions. The Company holds frequent medical check-ups and makes a doctor available fulltime for identifying the symptoms of heat stress in the workforce. Health advisories have been issued by the Corporate Medical team as well as respective business EHS teams to 13 Customer Experience and Satisfaction Risk Material Topics 12 RESPONSIBLE ECONOMIC GROWTH 8 DECENT WORK AND AND COMMUNITIES SUSTAINABLE CITIES AFFORDABLE AND CLEAN ENERGY 11 7 SDGs Impacted SE-5 SE-4 CONSUMPTION AND PRODUCTION SE-3 Chronic The frequency and intensity of extreme precipitation events are increasing extensively. It poses a significant risk to the operations of the Company as well as damage to the assets. Technology Risk EPC projects are heavily dependent on construction machinery, which are typically powered by fossil fuels, and in some cases, by electricity. Most technology options available in the market are not viable for use at project sites. Replacing the existing assets or modifying the current site setup may require a significant amount of capital expenditure. Company's Plans and Actions The Company has initiated actions related to reducing fossil fuel consumption, e.g., replacing diesel-powered equipment with electricity-powered ones. Additionally, exploring options such as electric P&M to enable a smooth transition. Market Risk The Company has a presence in the value chain linked to fossil fuels, e.g., thermal power and oil & gas. Also, any demand reduction is a business risk. Resources and investment devoted to these segments may pose risk of becoming irrelevant or impaired. Company's Plans and Actions The Company assesses the outlook for the businesses at risk and identifies opportunities for reallocating resources. Options are being explored for repurposing the investment already made. 'Frameworks e.g., Task Force on Climate-Related Financial Disclosures (TCFD) 170 As a part of risk management, the impact of such events is assessed, and mitigative actions are taken. Monsoon preparedness plans are a standard condition nowadays for all project sites and cover not only the protection of equipment and backup facilities but also the plan for restoring normal operations. Integrated Annual Report 2023-24 Acute Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial Reports Statements Risk Extremely high temperatures pose a danger to the health and safety of the workforce and could impact productivity, and in turn, project schedules and deliverables. Company's Plans and Actions The Company assesses the measures to handle such situations, and appropriate measures are taken to reschedule working hours, provide proper breaks, ensure availability of drinking water, adopt additional measures for the health and safety of the workforce, and conduct awareness sessions. Physical Risks SE-2 SE-1 SO-V Demand for 'green' and 'sustainable' products and services is increasing across the world. Also, clients are diversifying to build sustainable infrastructure assets. Opportunity Products and Services The Company actively pursues substituting traditional material, e.g., cement, with non-virgin or environment-friendly materials such as fly ash and GGBS. Ferrous, non-ferrous and construction and demolition waste are being reused to the maximum extent. Company's Plans and Actions Reducing natural resource consumption in operations is one of the key pillars of sustainability for the Company. Opportunities are available not only to reduce direct costs but also to provide such services for clients, which, in turn, enables them to chart their journey in climate change mitigation. Opportunity Resource Efficiency The Company has initiated interventions to increase the sourcing of renewable electricity. Also, initiated of biodiesel blending with diesel. Company's Plans and Actions Several possibilities are emerging to source renewable energy, and in most cases, these lead to a reduction in the direct cost of operation. Opportunity all employees and workmen. Special awareness sessions on heat stress are also held across projects sites and manufacturing facilities. The Company is providing first-aid training, as well as arranging regular supplies of ORS, lemon water, glucose water and buttermilk to workers. Additional shelters and restrooms are provided across site locations and air coolers are installed in workmen habitats. The working schedule is adjusted to prevent exposure to peak daytime temperatures and extended lunch breaks, from noon to 3 PM and even 11 AM to 5 PM in extreme cases, are given to workmen engaged in outdoor work. Statements Financial Statutory Integrated Report Management Discussion and Analysis Corporate Overview Energy Source Climate Change Opportunities Integrated Annual Report 2023-24 172 हानिक Stay safe and healthy Heat illess can be prevented Reports The Company offers a bouquet of solutions under 'Green Business', which enables clients to reduce their environmental footprint. These businesses comprise clean energy, clean mobility, water and sanitation, green infrastructure, and other areas. Market Opportunity SO-III SO-I Strategy Linkage¹ Manufacturing facilities 18 Active project sites 716 Key Highlights of FY 2023-24 Manufactured capital for L&T comprises businesses in EPC Projects and Hi-Tech Manufacturing. The Company strives to maintain its leadership position across various industry segments through delivery excellence, technology-enabled solutions, and innovation. This helps support business growth and value creation by the Company by enhancing its offerings to the clients as well as opportunities to improve on various parameters, e.g., resource productivity and equipment utilisation. Outlook for various industry segments is positive on the back of high public investments. However, challenges continue to remain due to macro factors as well as industry specific issues. The Company aims to maintain a strong Order Book position, which provides a firm foundation to continue the growth momentum in the forthcoming years. Statements Reports Financial Statutory Integrated Report Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 Capital Manufactured 174 CAPITAL MANUFACTURED LARSEN & TOUBRO 173 The Company has incubated a business linked to green hydrogen. This involves the manufacturing of electrolysers as well as the supply of green hydrogen as a fuel. Company's Plans and Actions One of the levers of energy transition is green hydrogen, and many industries are exploring opportunities to adopt this energy source. The Company tracks the changes in legal and regulatory requirements and accordingly strengthens internal systems and processes. This includes the use of technology and digital applications to assist in data management and reporting. Company's Plans and Actions Sustainability performance and disclosure requirements are increasing each year. The Company is operating in more than 700 locations. This increases complexity in compliance with changing regulatory requirements, e.g., new KPIs introduced in BRSR Core and may lead to higher operating costs. Risk Be prepared for an urgency Corporate Overview Management Discussion and Analysis Integrated Report Statutory Reports Financial Statements Blue Carbon Initiatives Mangroves are salt-tolerant plants growing in the coastal zone in the tidal areas and estuaries of rivers. Mangroves play a very significant role in maintaining the coastal environment, reducing the impact of wave action and erosion in the coastal areas, preventing salinity and seawater ingress into the inland agricultural areas, and protecting the coastline from the impact of cyclones. Apart from these ecological functions, mangroves play a very significant economic role in the lives of the coastal village communities. The villagers are dependent on mangroves for fodder, fuelwood, and fishing. PRECAUTIONARY ACTIONS FOR WORKING IN HOT CLIMATIC CONDITION Health effects al hest to maintain coastal environmental integrity and compensatory eco-restoration in a time-phased mangrove plantation programme over 150 hectares at Katpor village in Hansot block of Bharuch district. The plantation activities were completed in 2014-15 with community participation. The plantation is maintained by the village-level community-based organisation in association with Gujarat Ecology Commission (GEC) through gap-filling activities and protecting the plantation through social fencing. To improve the biodiversity of the area, and particularly, Bharuch coast, new species like Rhizophora mucronata and Ceriops tagai were also planted on an experimental basis. The Company is working towards planting mangroves in other locations along coastal area. Before Plantation Current state 169 LARSEN & TOUBRO Natural Capital Strategy for Climate Change Mitigation and Adaptation As the effects of climate change intensify, establishing a pre-emptive strategy to respond to the risks and opportunities has become a significant factor for a company's long-term competitiveness and business growth. Based on the international framework', climate change risks can be classified into transition and physical risk. Transition risk represents the risk that may arise during the transition to a low-carbon economy - categorised into risks resulting from law and policy, technology, market, and reputation. Physical risk represents the risk arising from physical impacts such as flooding and rising temperatures - categorised into acute and chronic risk. On one hand, managing climate change- related risks is crucial for the Company, and on the other, it also provides opportunities for growth for current and new businesses. A brief overview of risks and opportunities is presented below: Transition Risks Regulatory L&T's A. M. Naik Heavy Engineering Complex is located near the coastal region of Hazira (Surat), Gujarat. The Company has undertaken initiatives <30 yrs Compensation Philosophy L&T's Compensation Philosophy is governed by a 3P model based on fairness, meritocracy, and compliance to attract, retain, motivate, and reward employees. grading structure, □ Internal and external market benchmarking to ensure parity □ Developing an equitable 30-50 yrs pay equity, and Pay for Position >50 yrs <30 yrs 0 10,000 career development 30-50 yrs >50 yrs Grand Total 0 1,182 3,000 Grand Total Pay for Performance □ Potential of an Pay for Potential Integrated Annual Report 2023-24 C 188 In FY 2023-24, L&T unveiled the People Leadership Excellence Framework, a testament to its reinforced culture of performance. Through rigorous diagnostics, task force formation, and extensive data collection via FGDs and surveys, L&T identified five key dimensions of People Leadership: Personal Excellence, Relationship Excellence, Performance Excellence, Developmental Excellence, and Leadership Excellence. This strategic framework serves as a pivotal blueprint for spearheading initiatives that drive L&T towards Leadership Excellence. Building on its People Leadership Excellence Framework, L&T initiated several training programmes targeting employees at various levels. The programmes launched under the People Leadership Framework were Managing Gen Z, Managing Upwards, Leading with Emotional Intelligence, and Nurturing High-Performance Work Culture. People Leadership designed to bolster the organisation by equipping its talent and leadership pipeline for future growth. The Seven Step Leadership Pipeline Programme enhances leadership skills in high-potential employees across management levels through selective, advanced training by top-tier faculty from Harvard University, London Business School, INSEAD Singapore, University of Michigan, and IIM Ahmedabad. In parallel, ASCENT, a series of competency development programmes delivered by esteemed faculty from prominent B-Schools in India, empower L&T's high achievers to reach their utmost potential. L&T's Leadership Development initiatives are Leadership Development At the heart of L&T's Human Resources strategy is Learning and Development (L&D), dedicated to continuously enhancing employee capabilities through strategic learning interventions. These initiatives are designed to align with the Company's business needs and adapt to the dynamic business environment. Embracing innovations, various digital instruments, AR/VR simulations, and web-based platforms have been employed. The corporate L&D group works in tandem with internal business HR divisions across different platforms, nurturing continuous conversation on people development. The Company also engages with external industry circles for benchmarking, insight gathering, and networking. Human Capital □ Considers employees' performance measured through achievement of Key Responsibility Areas (KRAs) and performance thrust areas of the organisation/ business entities Corporate Learning and Development 187 *Note - total employees comprise permanent and non-permanent employees and permanent workers (as reported in BRSR) "Art & Science of Leading People in Organisation People Leadership Train the Trainer Program on SATION Development Centres (DC) using tools under L&T Competency Framework employee measured in 6,000 □ Considers capabilities and experience in setting an equitable and competitive pay level LARSEN & TOUBRO 6,579 Female 9,000 ght and stomer Quality uality Sum LARSEN TOUBRO KING ITE DIRECTION LARSEN & OUT L&T Business Excellence Model (LTBEM) 186 Launch of L&T Business Excellence Model Qummit LARSEN & TOUBRO it 2023 OMES YOU TO & TOUBRO career stage. The emerging leaders who move up to the Seven Step Leadership Pipeline Development Programme are mentored by senior leaders, ensuring robustness in the continuity of the leadership thought process and value system. 'The ASCENT Series' and 'People Leadership Programmes' delve deeper, offering competency development tailored to the complex challenges of leadership roles. Significantly, L&T places a high value on diversity and inclusiveness, with programmes like 'Women Leadership (DEI)' reflecting a dedication to fostering female leadership within its ranks. Leadership Development is the cornerstone of L&T's L&D framework. Through the Leadership Development Academy, L&T charts a clear path for potential leaders with its Seven Step Leadership Pipeline Programme, designed to nurture leadership qualities at every objective selection process using a bouquet of tools. The process helps identify the strengths and developmental needs of employees in terms of required competencies. In FY 2023-24, the Company had 900+ talent assessed through Development Centres and utilised the Individual Development Plan module to facilitate their respective developmental journey. The Leadership Development Centres, pivotal to the Company's core philosophy of grooming internal talent, ensure the right leadership talent is identified through an Integrated Annual Report 2023-24 7,761 Employee Profile: Age and Gender 50,000 12,000 15,000 Female Male Male ■Grand Total ■Grand Total Statements Reports Report Discussion and Analysis Financial Statutory Integrated Management Corporate Overview T T 20,000 30,000 40,000 60,000 New Joinees profile: Age and Gender DECENT WORK AND ECONOMIC GROWTH The Company is not only responding to the trends but also laying the groundwork towards a resilient and adaptive future. Talent identification and evaluation happen through L&T's Performance Management System FAIR (Framework for Linking Appraisals with Incentives and Rewards). It ensures recognition of talent and meritocracy. FAIR is integrated with the Career Development and Succession Planning Module to facilitate the succession planning process. Human Rights and Labour Conditions Talent Management - Attraction, Retention and Development Workforce Engagement, Well-being, Health and Safety Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial Reports Statements The Company's Green Business offerings fall under two common strategies to handle climate change. Strategy Climate Change Mitigation - Reduce the impact of current processes/systems on the environment Climate Change Adaptation - Building resilience to manage the consequence of changes Offerings Brand Renewable Energy Plants, Nuclear Energy Plants, Mass Transit Systems, Railway Networks, and Others (Process Equipment for Clean Fuels) Management FOR THE GOALS Integrated Report Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 182 SITE OFFIC 05090 START START Counted CHRO Tr L&T continues to implement various strategic and developmental initiatives to promote growth and enhance efficiency at the organisational level. The approach is at two broad levels - Lakshya Strategic Plan (medium-term) and Annual Plan (short-term). HR Strategy is a derivative of the Lakshya 2026 business strategy plan. Lakshya 2026 Corporate HR Steering Committee, comprising senior leaders across functions, identified five strategic themes to be a future-ready organisation. Human Capital HR Strategy LARSEN & TOUBRO 181 1 For details, refer to 'Business Model and Strategy' section. Business Ethics Diversity, Inclusion and Equal Opportunity Skilled Manpower 17 PARTNERSHIPS Statutory Water and Sanitation Infrastructure, Green Buildings, and others (Smart City Systems, Sand Plants) Snapshot of Company's Green Business Total employee strength 6.9 Mn Safety training man hours 33 Years Median age of employees 0.07 Lost Time Injury Frequency Rate (LTIFR) Strategy Linkage¹ SO-I SO-II SO-III SO-IV SO-V SE-2 SE-4 SDGs Impacted QUALITY EDUCATION 5 GENDER EQUALITY 59,344 Infrastructure/assets created under mitigation also help in adaptation through second-order effects. Key Highlights of FY 2023-24 Statements Water Treatment Plant Railways Nuclear Power Plant Hydro Power Plant Mass Transit System Solar Power Plant 179 LARSEN & TOUBRO HUMAN CAPITAL Human Capital 180 Employee and Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial Reports From driving innovation to delivering exceptional customer experience, the workforce of L&T plays a pivotal role in shaping the trajectory of the Company. L&T has a multi-generational workforce drawn from diverse ethnic and cultural backgrounds and brings a rich mix of educational and professional experience. The Company fosters a fair, inclusive, performance-driven, and collaborative work culture. L&T aspires to create a pipeline of talent that can deliver for diverse businesses while conforming to L&T's values and ethos. The Human Resources function plays a key role in developing, reinforcing, and transforming the organisation. Material Topics Financial Statements Reports Financial Statutory Integrated Report Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 184 Beyond recruitment, the focus is on crafting a distinctive employer brand through strategic sponsorship programmes at various engineering institutes, social media engagement, and other branding initiatives. L&T continues to be the employer of choice among budding Engineering professionals. These accomplishments not only reflect our relentless pursuit of excellence but also the Company's commitment towards enhancing gender diversity. Additionally, more than 1,600 young professionals have been onboarded, comprising MBA Graduates, Chartered Accountants, Cost Accountants, Diploma Engineers, and other trainees. GET: Graduate Engineering Trainee PGET: Post Graduate Engineering Trainee GETS and PGETS hired were women over the last two years 30% Young Talent Professional Acquisition is a commitment of the Company to nurture talent. In FY 2023-24, the Company continued to stay anchored to the core philosophy of 'Growing our own timber,' by attracting, recruiting, and onboarding over 2,600 young engineering professionals across various business verticals within L&T Group as GETS and PGETS. The Strategic Leadership Talent Acquisition function regularly augments its leadership hiring strategies to identify, select, and onboard high-calibre talent across various businesses in line with strategic plans. The team continues to support the expanding portfolio of businesses such as Semiconductor, Green Energy, SuFin, Data Center, and Corporate, enabling functions across the globe, in addition to meeting the needs of leadership talent in our businesses. Talent Strategy The launch of ATLVarsity has brought a plethora of L&T's learning and development offerings under one platform. As a step towards democratising learning opportunities, this multi-faceted learning platform offers a variety of rich learning resources (behavioural, technical, and functional) in collaboration with globally renowned course providers like Skillsoft, Coursera, EBSCO, and so on. MS Teams, aiding in conducting quick engagement surveys across the organisation. HEERA provides a window for employee queries and resolutions with a resolution effectiveness of 99%. The Company implemented an online compensation management platform in 2023. This platform is implemented across all businesses, thereby bringing efficiency to traditional compensation management methodology. The Company is also in the preliminary stage of launching a new Learning Management System and a Workforce Analytics module. The Company has a robust Talent Acquisition module integrated into the ERP system. HEERA, an Al-enabled bot, is integrated with Statements L&T's HR Digitalisation journey began in 2019 with the incorporation of an advanced ERP system in the form of Success Factors. The Company extended the platform in 2023 with further enhancements by introducing Performance Management, Career Development, and Succession Planning modules. Subsequently, the Company launched the 270- degree feedback module as well. At L&T, the candidates are nourished through the engagement programme GRACE (Get Ready for an Awesome Career in Engineering), which encompasses pre-joining initiatives such as radio podcasts and gamified content on business achievements through leader boards, quizzes, webinars, micro-learning platforms, and competitions. Building a Powerful Employer Brand: FY 2023-24 Highlights Talent Identification and Succession Planning Talent Development Human Capital LARSEN & TOUBRO 185 THE INDIA FEB 2024-FEB 2025 Certified To Work. on Linked in Million Strong Place Great LARSEN & TOUBRO Thank you four the support forums and awards. This year's accomplishments include achieving the 'Great Place to Work 2023' certification (second time in a row), recognised as India's Best Employer among Nation Builders 2023 by Great Place to Work India, recognised as a Company with Great Managers Award for the third time consecutively, CII HR Excellence Award, Golden Peacock Awards 2023, ET HR Awards 2023, and the prestigious awards at the international scale such as Brandon Hall HCM Excellence Awards and Gold Stevie Best Employer 2023. Besides the continued efforts on social media, the position of the Company has been reinforced as an employer of choice by participating in various industry The Company's branding strategies are deeply rooted in the organisation's Employee Value Proposition (EVP). The content across various channels, such as LinkedIn and YouTube, is aligned with EVP and has successfully increased brand awareness and fostered deeper engagement with our audience. Young Professional Talent Acquisition holds strategic significance for the organisation as it pertains to the onboarding of new talent and their subsequent development into future leadership positions. It also contributes to maintaining a youthful workforce and shaping a well-balanced manpower structure. Accelerating HR Digitalisation Human Capital LARSEN & TOUBRO The annual action items initiated in alignment with the five strategic themes identified are as follows: Strategic Themes and Key initiatives in FY 2023-24 Project NEEV Employee Experience Talent Council Employee-centric policies and schemes Reports People Leadership at Core (along with Talent Mobility) Launch of People Leadership Excellence Framework Roll out multiple training programmes anchored around five dimensions of the People Leadership Excellence Framework 270-degree feedback for people managers People Leadership Development Programme Integrated Annual Report 2023-24 HR competency framework aligned to be future ready; mapped across HR roles, and a role- proficiency matrix designed to set capability expectations and support development of team members in HR Agile Leadership Introduction of enhanced facilities for women employees in terms of flexibility, travel allowances, and childcare Institutionalised first-of-its-kind DEI Awards Ceremony and Allyship Awards Alternate Talent Model Various choices of consideration with respect to the Alternate Talent Models way of working - gig workers/part-time/freelance being studied Implementation of a progressive maternity leave policy 183 Diversity Ratio 8.1% Diversity, Equity, and Inclusion Organisation Structure - Developed a structured process and guidebook to facilitate discussions on organisation redesign, ensuring agility and responsiveness to evolving needs By exploring these alternatives, organisations can better adapt to the evolving workforce landscape with the consideration of regulatory guidelines and compliances 468.59 55.85 56.09 84.02 Book value per equity share (*) [8] Dividend per equity share (*) [8][11] 47.59 439.55 371.65 356.79 350.90 36.00 18.00 16.00 508.92 477.67 24.00 22.00 53.43 38.46 39.00 35.81 36.31 328.79 18.00 14.00 12.17 10.83 34.00 301.57 265.85 Statutory No. of employees 11.63 11.49 11.23 11.34 11.40 10.18 10.35 12.24 PAT as % of (net revenue from operations [1]) [5] 7.03 6.83 6.66 9.50 7.49 7.56 6.69 5.93 4.49 5.40 RONW % [6] 14.87 12.19 10.95 16.25 14.80 11.32 10.63 operations [4][1] PBDIT as % of net revenue from 6826 5201 3564 2893 4999 Borrowings 114040 118513 123468 132605 141007 125555 15.35 107524 88135 90571 Capital employed 216589 222080 218842 220525 217251 194756 167629 147735 135208 136479 Ratios and statistics 93954 14.12 12.80 9.91 391.78 358.83 316.20 293.29 Dividend per equity share (*) [8] [9] [10] 34.00 24.00 22.00 36.00 18.00 18.00 16.00 444.67 14.00 10.83 [1] From Continuing Operations in 2020-21, 2019-20 and 2018-19 [2] Profit before depreciation, interest and tax [PBDIT] is excluding exceptional items wherever applicable and other income. [3] Profit from discontinued operations in the year 2020-21, 2019-20 and 2018-19 has been considered as exceptional item. [4] PBDIT as % of net revenue from operations =[PBDIT/(gross revenue from operations less excise duty upto June 30, 2017)]. [5] PAT as % of net revenue from operations = [PAT/(gross revenue from operations less excise duty upto June 30, 2017)]. [6] RONW = [(Profit attributable to the Owners of the Company including exceptional items)/(average net worth excluding revaluation reserve)]. [7] Basic earnings per equity share has been calculated including exceptional items and adjusted for all the years for issue of bonus shares. [8] After considering adjustment for issue of bonus shares during respective years. [9] Dividend for the year 2020-21 includes special dividend of 18.00 per share and final dividend of * 18.00 per share. [10] Dividend for the year 2023-24 includes special dividend of ₹ 6.00 per share and final dividend of ₹ 28.00 per share. [11] Figures for 2015-16 to 2023-24 are as per Ind AS and for 2014-15 are as per IGAAP and hence not directly comparable. 17 LARSEN & TOUBRO MANAGEMENT DISCUSSION AND ANALYSIS 18 12.17 9521 475.27 586.52 12.13 Gross Debt: Equity ratio 1.11:1 1.14:1 1.29:1 1.51:1 1.85:1 1.81:1 1.79:1 1.75:1 1.87:1 2.21:1 540.16 Basic earnings per equity share (*) [7] 74.51 61.71 82.49 68.04 63.51 52.62 43.20 30.32 34.22 Book value per equity share (*) [8] 628.22 635.55 93.96 12052 12966 14241 10 YEAR HIGHLIGHTS Particulars Ind AS [11]. crore IGAAP [11] 2023-24 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 CONSOLIDATED FINANCIALS- Statement of Profit and Loss 221113 66.95 183341 156521 135979 145452 135220 119862 110011 101975 92762 PBDIT [1][2] Gross revenue from operations [1] 23494 Statements Financial 15,64,085 14,25,064 14,92,124 13,71,535 12,51,569 10,21,275 8,99,902 59,344 55,202 50,267 49,107 45,467 45,205 42,924 9,23,628 10,28,541 8,53,824 41,466 43,354 44,081 Building India's Social Infrastructure Access to Clean Water | Sustainable and Climate Resilient Agriculture | Building Hygienic and Dignified Sanitation Facilities | Water Harvesting Structures | School Infrastructure | Community Learning Centres | 'Engineering Futures' through STEM Education Programmes | Digitizing Schools | Community Health Centres | Mobile Medical Units | Health Awareness and Health Camps | Supporting National Health Missions | Technology Based Skill Training for Youth | Skilling Of Women | Skill Trainers Academy www.Larsentoubro.com [1] For Continuing Operations in 2020-21, 2019-20 and 2018-19. [2] Profit before depreciation, interest and tax (PBDIT) is excluding exceptional items wherever applicable and other income. [3] Profit from discontinued operations in the year 2020-21, 2019-20 and 2018-19 has been considered as exceptional item. [4] PBDIT as % of net revenue from operations = [(PBDIT)/(gross revenue from operations less excise duty up to June 30, 2017)]. Reports [5] Profit After Tax (PAT) as % of net revenue from operations = [(PAT including exceptional items)/(gross revenue from operations less excise duty up to June 30, 2017)]. [7] Basic earnings per equity share has been calculated including exceptional items and adjusted for all the years for issue of bonus shares. [8] After considering adjustments for issue of bonus shares during the respective years. [9] Figures from 2020-21 include the impact of the merger of L&T Hydrocarbon Engineering Limited with the Company. [10] Figures from 2018-19 include the impact of the merger of L&T Shipbuilding Limited with the Company. [11] Dividend for 2020-21 includes special dividend of 18.00 per share and final dividend of 18.00 per share. Dividend for 2023-24 includes special dividend of *6.00 per share and final dividend of 28.00 per share. [12] Figures from 2015-16 are as per Ind AS and for 2014-15 are as per IGAAP and hence not directly comparable. Regd. Office: Larsen & Toubro Limited, L&T House, N. M. Marg, Ballard Estate, Mumbai - 400 001. CIN: L99999MH1946PLC004768 16 Integrated Annual Report 2023-24 Corporate Overview Integrated Report Statutory [6] RONW [(PAT including exceptional items)/(average net worth excluding revaluation reserve)]. No. of equity shareholders 20753 15624 the Company (including exceptional items [3]) 13059 10471 8669 11583 9549 8905 7370 6041 4233 4765 Balance Sheet Profit attributable to the Owners of Net worth attributable to the Owners 86359 89326 82408 75869 66723 62375 54904 50217 44180 40909 Non-controlling interest 16190 of the Company 18205 4470 5920 16329 15330 13641 11130 10463 11258 Profit for the year [PAT] 15547 12531 10419 12921 10894 4154 10217 6486 4545 4966 Profit attributable to the Owners of the Company (excluding exceptional items [3]) 12966 10374 8572 6965 8894 8144 7151 8004 Basic earnings per equity share (*) [7] Management Discussion and Analysis 0.33:1 Energy - Green Mfg & Development T. Kumaresan Minerals & Metals Group Business Structure Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Report Derek M. Shah Statutory Reports Statements S. N. Subrahmanyan Chairman & Managing Director Hi-Tech Manufacturing IT & Technology Services Debashis Chatterjee LTIMindtree Anil V. Parab Heavy Engineering and Financial L&T Valves Energy - Power Water & Effluent Treatment (L&T Realty) As on 08. 05. 2024 11 LARSEN & TOUBRO GROUP BUSINESS STRUCTURE 12 Infrastructure Projects EPC Projects Energy Projects Satish Palekar S. V. Desai Subramanian Sarma Energy Hydrocarbon T. Madhava Das Power Transmission & Distribution Shrinath Rao Transportation Infrastructure Sthaladipti Saha Buildings & Factories E. P. Sajit Heavy Civil Infrastructure Advisor to the Chairman & MD Arun Ramchandani Development Projects 13 LARSEN & TOUBRO NATIONWIDE NETWORK 14 Udaipur Amritsar Chandigarh Rajpura New Delhi Faridabad M Jaipur Bhopal Indore Pithampur Jamnagar ④ Vadodara Hazira 食鼠 Madh Mumbai Navi Mumbai Ahmedabad Precision Engineering and Systems L&T Finance Financial Services Amit Chadha L&T Technology Services K. V. B Reddy Hyderabad Metro Digital Services & E-Commerce Platforms L&T-SuFin L&T EduTech L&T Cloudfiniti L&T Semiconductor Technologies Sudipta Roy S. K. Narang Other Businesses Anupam Kumar L&T Realty Arvind Garg Construction, Mining, and Industrial Machinery Rubber Processing Machinery Hydraulics Nabha Power Limited Shrikant Joshi Advisor to the Chairman & MD (Precision Engineering and Systems, and L&T Semiconductor Technologies) J. D. Patil Whole-time Director & Sr. Executive Vice President (Heavy Engineering & L&T Valves) Company Secretary & Compliance Officer Mr. Sivaram Nair A Registered Office L&T House, Ballard Estate, Mumbai - 400 001 Auditors M/s. Deloitte Haskins & Sells LLP Registrar & Share Transfer Agents KFin Technologies Limited MR. ANIL V PARAB MR. ADIL ZAINULBHAI Independent Director MR. NARAYANAN KUMAR Independent Director MR. HEMANT BHARGAVA Nominee of Life Insurance Corporation of India (upto May 27, 2024) MRS. PREETHA REDDY Independent Director MR. PRAMIT JHAVERI Independent Director MR. RAJNISH KUMAR Independent Director MR. JYOTI SAGAR Independent Director MR. AJAY TYAGI Independent Director MR. SANJEEV AGA Independent Director Independent Director Whole-time Director & Sr. Executive Vice President (Utilities) Whole-time Director & Sr. Executive Vice President (Civil Infrastructure) Corporate Overview Management Integrated Statutory Financial Discussion and Analysis Report Reports Statements MR. T. MADHAVA DAS COMPANY INFORMATION Chairman Emeritus BOARD OF DIRECTORS (AS ON MAY 8, 2024) MR. S. N. SUBRAHMANYAN Chairman & Managing Director MR. R. SHANKAR RAMAN President, Whole-time Director & CFO MR. SUBRAMANIAN SARMA Whole-time Director & President (Energy) MR. S. V. DESAI MR. A. M. NAIK MR. SIDDHARTHA MOHANTY Nominee of Life Insurance Corporation of India (from May 28, 2024) 79th Annual General Meeting through Video Conferencing or Other Audio-Visual Means on Thursday, July 4, 2024 at 3:00 p.m. IST EXECUTIVE COMMITTEE (ECOM) S. N. Subrahmanyan Chairman & Managing Director R. Shankar Raman President, Whole-time Director & Chief Financial Officer Subramanian Sarma Whole-time Director & President (Energy) S. V. Desai Whole-time Director & Sr. Executive Vice President Statements (Civil Infrastructure) Sr. Executive Vice President (Utilities) Anil V. Parab Whole-time Director & Sr. Executive Vice President (Heavy Engineering and L&T Valves) M. V. Satish Advisor to the Chairman & MD (Buildings) D. K. Sen Advisor to the Chairman & MD (Development Projects, Minerals & Metals, L&T Special Steels & Heavy Forgings, L&T-SuFin and L&T Aviation) T. Madhava Das Whole-time Director & Reports Financial Statutory 09 The The world is on fast-forward. The climate is flashing red. Future Curiosity is accelerating innovation. It's not enough to just keep up. It's time to take the lead. Isn't We are forging a path to a cleaner future, one innovation at a time. Built on the bedrock of engineering, fuelled by technology. Waiting. This isn't just about keeping the lights on. It's about lighting the way forward. Find us on: in X LARSEN & TOUBRO www.Larsentoubro.com Regd. Office: Larsen & Toubro Limited, L&T House, N. M. Marg, Ballard Estate, Mumbai - 400 001. CIN: L99999MH1946PLC004768 Corporate Overview Management Discussion and Analysis Integrated Report Panvel Lonavala MR. P R RAMESH Pune 50048 49174 46013 42135 37085 22540 18151 20298 24474 52175 25785 10561 10558 13924 12936 86956 89679 87412 86212 77960 11990 62038 61738 71528 5466 4861 4560 4454 4699 Profit after tax (including exceptional items[3]) 9304 7849 7879 67114 11798 7491 5387 5454 5000 5056 Balance Sheet Net worth Borrowings 64416 6679 59735 56571 56059 8.87 RONW % 16] 13.69 11.32 12.23 20.54 13.07 15.74 11.32 7.91 12.37 14.30 Gross Debt: Equity ratio 0.35:1 0.25:1 0.30:1 0.40:1 0.49:1 0.24:1 0.21:1 0.23:1 Talegaon 12.39 8.30 7.23 9.10 50021 Capital employed Ratios and statistics PBDIT as % of net revenue from operations [1][4] 7.67 8.41 8.97 9.52 8.30 9.30 10.34 9.86 9.23 11.38 PAT as % of (net revenue from operations[1])[5] 7.37 7.10 7.80 13.52 8.11 5414 5966 0.35:1 7849 Visakhapatnam Guwahati Registered Office Campus* Manufacturing / Fabrication Facility Power Plant Network Shipyards Offices This pictorial representation does not purport to be the political map of India. Knowledge City Leadership Development Academy Corporate Technology and Engineering Academy Construction Skills Training Institutes* Campus denotes facilities for design and manufacture * Part of L&T's Corporate Social Initiatives Integrated Annual Report 2023-24 GLOBAL NETWORK Corporate Overview Management Data Centers Puducherry Kancheepuram 會 Chennai Lucknow 7612 Varanasi Ranchi Durgapur Serampore Jamshedpur Kolkata Kansbahal Rourkela * Cuttack Nagpur Raipur Bhubaneswar Bengaluru Mysuru醞合 Coimbatore 苔 Kochi 台 Vijayawada *Pulicat Kattupalli Integrated Financial *Hyderabad Report 126236 9685 110501 9295 101000 87255 82384 82287 74612 66301 63813 Gross revenue from operations [1] PBDIT[1][2] 57558 8309 7653 7701 6481 5829 6488 Profit after tax (excluding exceptional items[3]) Discussion and Analysis 8856 9055 [10] 6838 2015-16 Reports 2014-15 Statements 15 Offices Find us on: LARSEN & TOUBRO LARSEN & TOUBRO STANDALONE FINANCIALS- 10 YEAR HIGHLIGHTS CELEBRATING Engineering & Construction Projects Manufacturing/Fabrication Facilities IndAS [12] Larsen & Toubro is leading the change by creating happier, brighter tomorrows for 1.6 million lives through our CSR initiatives on Water & Sanitation, Education, Health, Greening, and Skill Building. Description Statement of Profit and Loss 10 Year Highlights 2019-20 2018-19 2017-18 2016-17 crore 2023-24 2022-23 2021-22 2020-21 IGAAP [12] THE JOY OF GIVING (SISP) Learning e-books, Academies for Specialised Skill Self Paced Coursera Courses, audiobooks EBSCO - Digital Library RaPL - Quiz- based Learning Harvard Manage Mentor (mini MBA programme) Education 189 LARSEN & TOUBRO Self Inspired Learning Infrastructure and Initiatives Percipio Training hours clocked by Management Development Programmes (in association with institutions such as XLRI, NMIMS, IIM-B, IIM-C, and more) Technology Development Programmes DDI Development (Leadership Programme programme) Management Technical Orientation and Multi-Engineering Skill-Building Modules Development Programmes Management Development Accreditation Accreditation Programme in Corporate Law Executive Diploma in Human Resource Management General There are dedicated academies for business-specific skill development requirements like the Tunnel Academy for road construction, the Railways Academy for railway business, the Power Training Institute for power business, and Building Information Management (BIM) Academy for buildings and factories business. The goal is to enable focus on specific core business areas to be developed. CTEA Mysore launched 15 niche technology programmes delivered by top experts covering contemporary topics. Some of these topics include Power System Analysis, Steel Connection Design and Detailing, Segmental Construction, BIM Revit API with Python, Technical Competency for Women, Bearing Vibration and Analysis, ChatGPT, and more. L&T Institute of Project Management Recognising the critical role of project management in the Company's growth, L&T established its Institute of Project Management (IPM) in 2008 at Vadodara. The institute addresses the need for adept project managers to lead large, complex projects in competitive and intricate markets. L&T IPM stimulates and leverages its young intellectual capital by offering a portfolio of learning opportunities such as PRAGATI - Project Leadership Development Programme for developing megaproject leaders, Specific Competency Development Modules (SCDMs), and Master Classes (MCS) in the core areas of project management such as planning, cost management, contracts, and risks, and business-specific programmes to address the unique project management challenges pertaining to specific businesses. In FY 2023-24, IPM increased its coverage by 90% to over 3,800 employees. In the fast-paced industries L&T operates in, specialised centres like CTEA Madh and CTEA Mysore focus on equipping professionals with specific technical competencies. 'Technical Development Programmes' and 'Engineering Academies,' which are instrumental in upskilling employees in the latest technologies and methodologies, play a key role in the development of specific technical skills. Employee development initiatives such as Coffee Sessions on 'Advancement in Surveying and Mapping Pile Foundation', Learning Premier League, Technology Day, and 'CADFEST' for designers received a broad reach across various businesses. CTEA empowers and transforms PGETS, GETs, and First Line Supervisors (FLS) through immersive hands-on experiences in specialised labs. During FY 2023-24, CTEA trained 1,080 (PGET/GET/DET) and 685 FLS, improving their confidence and employability through comprehensive training in domain knowledge and hands-on lab experiences across various disciplines. 3,400 engineers were upskilled in a wide range of engineering, software, and other professional competencies for both construction and non-construction businesses. CTEA Mysore 9 191 LARSEN & TOUBRO ATLVarsity L&T's innovative Any Time Learning (ATL) platform, now renamed ATLVarsity, revolutionises the way employees engage with professional development. With on-the-go learning as its USP, the platform boasts a wealth of resources in the form of videos, e-books, and journals. Partnerships with vendors like Percipio, Coursera, and Harvard Manage Mentor enable L&T to present a wide array of certification courses that align with the Company's competency framework, addressing the diverse upskilling needs of its workforce. AI/ML technology-based coaching programme at ATLVarsity has enhanced the experience of inculcating communication skills. Leveraging GenAl's virtual coaches, the programme offers a cutting-edge learning experience. In FY 2023-24, the creation of niche academies offering blended learning, addresses role- specific needs. Notable among these are the Academy of Digital Transformation, Academy of ESG, Academy of Quality Excellence, Academy of Safety, and the newly introduced Academy of GenAl. The Skill Benchmarking tool effectively identifies learners' skill deficiencies, offering precise course recommendations and resources. This tool simplifies the course selection process for learners, enabling them to enhance their skills in congruence with their job roles efficiently. Management 5.2 lakh Corporate Technology and Engineering Academy (CTEA), Madh and Mysore Human Capital Statements Financial Launched during FY 2023-24, the Essentials of Project Planning and Control (EPPC 2.0) Programme is specifically designed to elevate the project execution capabilities of our engineers, aligning with the designation of FY 2023-24 as the 'Year of Project Controls'. This programme consists of three independent modules, each focusing on key aspects of project planning, cost management, monitoring, and the practical application of tools such as Primavera/ MS Project. This initiative not only promises to enhance our project delivery efficiency but also foster a culture of continuous learning and development among our engineers. Since its launch, 4,057 learners have undergone different modules under the EPPC programme as of March 31, 2024. ISO CTEA Madh, Mumbai IPM We are pleased to inform you that L&T Institute of Project Management (L&T IPM) Vadodara and Chennai campuses have implemented the Education Organization Management System (EOMS) in accordance with 150 21001:2018 and achieved the coveted 150 21001:2018 certificate. CERTIFICATE CERTIFICATE This certification endorses the quality parameters of the design, development, and delivery of project management training programs to L&T project professionals. 190 Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Report Statutory Reports Knowbie (N2K) Step 6 Newbie to Development L&T into a Global Programme Programme Programme Corporation Step 4 Transforming Programme 38,500 Global CEOs International Step 7 Mentoring Programme Executive Step 5 Global Leadership Step 3 Step 2 Leadership Development Management Discussion and Analysis Integrated Report Statutory Financial Reports Statements Summary of Corporate L&D Offerings Category Programmes Leadership Pipeline Step 1 Development - Seven Step Management Education Programme Education Programmes Competency Development Programmes Project Portfolio Programme Leadership Leadership (Specialisation in Project Management) Programme Programme WINSPIRE (Women Rise Propel Leadership) Young Talent Development Post Graduate Leadership Executive Project Advanced Project Project Management Leadership Excellence Development Programmes (Pragati) ASCENT Series (Across Management Tiers) Level 1 Programme for Excellence in Project Delivery Think, Act, Engage Clusters (Across Management Tiers) Level 1+ International Executive Master in Business Level 2 Level 3 Level 4 International Employees during FY 2023-24 The HREM model has been conceived out of a need felt by Corporate HR to establish high-calibre professional standards purely for HR function. The model will hold tremendous significance in the coming days as sustaining excellence in business is positively correlated to excellence in managing Human Resources. We have developed 71 active HREM assessors as of March 31, 2024. Training Person-days Promoting Mental Health and Well-Being in the Workplace Mental well-being has emerged as a crucial determinant at the workplace, directly impacting morale, productivity, and other related physical ailments. In recent years, mental health and well-being have become increasingly recognised as important factors for overall employee wellness and productivity in the workplace. The Company encourages its workforce to prioritise stress management techniques such as mindfulness, exercise, and seeking support when needed. Counselling, coaching, and sensitisation workshops are also being organised for employees to equip themselves to handle challenging situations. Medical Health Services function at L&T looks after preventive, occupational, curative, and rehabilitative health needs of its employees and their family members. The aim is to contribute towards medical health and welfare through various initiatives and activities. The objective is to plan preventive measures and invest in health and wellness programmes to promote a healthy lifestyle for the employees and their families. L&T believes that healthy employees constitute a healthy workforce that adheres to WHO guidelines. 196 Integrated Annual Report 2023-24 Corporate Overview The EHS Council monitors, measures and reviews EHS performance and compliance with procedures. For further details on health and safety performance, practices, and management systems, please refer to BRSR Principle 3, i.e., Businesses should respect and promote the well-being of all employees, including those in their value chains. Management Discussion and Analysis Statutory Financial Reports Statements Given below is a snapshot of the initiatives during the year. 1 Integrated Report The Company is committed to Mission Zero Harm and working on various strategies to continuously enhance the health and safety standards within the organisation as well as that of contractors, workers, and suppliers working on behalf of the Company at project sites or premises. This includes using continuous sensitisation, toolbox talks, providing protective gear, and special training in the safe handling of equipment and material. The Company adheres to international standards and guidelines such as ISO 45001:2018. Commitment towards Health, Safety, and Well-Being Human Capital Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial Reports Statements Commitment Towards Human Rights L&T is committed to respecting, protecting, and upholding the human rights of the workforce and across our value chain. The Code of Conduct is a comprehensive document guiding its employees to conduct businesses in conformity with professional standards of personal integrity, honesty and ethical conduct, one of the core principles being 'Respect for Human Rights'. The Company is committed to put in place, strengthen and improve systems and processes wherever necessary, undertake due diligence or conduct risk assessment, monitor, provide remedy and take corrective actions to ensure protection of human rights. The Company adheres to the regulatory requirements as applicable in the country or countries of operation and respects the international frameworks such as United Nations Global Compact (UNGC), International Labour Organization (ILO) and any other global standard. In FY 2023-24, internal due diligence was conducted by the Company across the manufacturing plants and offices to understand potential human rights risks related to child labour, forced labour, sexual harassment, wages, discrimination, health and safety, working conditions, etc. and practices to mitigate/avoid violations for the contractual workforce. This is based on various international standards such as ILO, UNGC, and the law of the land. Additionally, the key manufacturing facilities of the Company are certified by SA8000, globally recognised social certification standard on human and labour rights. L&T is committed to ensuring a cordial work environment for its workforce to foster trust and collaboration. One of the good practices is to have a robust Grievance Redressal Mechanism in place to resolve grievances in a systematic, timely and fair manner. This year, we have strengthened the mechanisms into more structured and formal processes across the Company, especially for the contractual workforce. With more than 3,50,000 workers, they are critical as well as vulnerable stakeholders for the business. Over 500 Grievance Redressal Officers (GRO) have been appointed across project sites to ensure grievance registering, resolving, meeting timelines, managing escalations, closing cases, generating reports, and facilitating regular reviews and audits in a systematic way. Grievance may cover issues related to health and safety, working conditions, wages, living conditions, and so on. A toll-free number has been initiated for recording grievances of the workers operational 24x7 over and above the oral and/or written complaints which were already being recorded. This provides a fair and transparent process for resolving complaints and ensuring equal and fair treatment. 195 LARSEN & TOUBRO Mental Health Awareness Sessions: Regular workshops and training sessions on mental health awareness, stress management, and self-care techniques are conducted to educate employees on how to maintain good mental health and well-being. 41 Webinars on Mental Health 2 World Mental Health Day is celebrated every year on 10th October with the objective of raising awareness of mental health and mobilising efforts to support it. In October, various articles, assessments, infographics, and podcasts were shared with pan-India employees. The podcast included a brief about counselling, myths and facts about the process, confidentiality, the role of L&T, and existing services. The effectiveness of these programmes has resulted in increased awareness and understanding of mental health among employees. L&T RADIO LAISEN & TOUBRY Let's Talk Therapy What makes a conversation challenging Why do we fear difficult conversations? Click here to HEALTH L&T RADIO our world 197 LARSEN & TOUBRO INTELLECTUAL CAPITAL Intellectual Corporate Overview Capital Group Maitree: The group has been created to support and contribute to the personal development of employees in the work environment. It helps to spread awareness about mental health services. 194 5 4 7,324 Total Participants In-house and External Counselling Services: Mental health counselling services, both in-house and external services, are provided to the employees with confidential access to resources and support for personal and work-related challenges. 12,537 1,007 1,275 363 Total Registrations for External Services Total Counselling Cases Wellness Coaching Self assessments by employees 3 Bereavement Counselling Services: These services are provided to the families of deceased employees. This includes home visits, counselling, follow-up for the due settlement, guiding the family further for educational reimbursement schemes for children, and vocational training support for spouses. Support Group for Differently-abled children of employees: Continuous mental health support is provided to employees with differently-abled children through financial reimbursement of treatment and counselling. Learning hours clocked under major categories of programmes* conducted by L&D Rise in participation rates Women underwent Leadership Journey Programmes in last 2.5 years, showcasing 192 41,919 Number of Unique Learners Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis *Does not cover safety training hours, which is reported in Principle 3 of BRSR. Integrated Financial Report Reports Statements Enhancing Employee Experience Several new initiatives were rolled out during FY 2023-24 and can be broadly bucketed into Enhanced Communication, Addressing Fairness, Talent Management, Capability Building, Employee Engagement, and DEI. Statutory Digital Learning 20.0% Continuing Education Technical Programmes 21.6% 22.4% Project Management 14.3% 7.5% 7.89 Average Person Days Human Capital ■Functional Programmes Leadership & Competency Development 36,14,615 Number of Hours of Learning 3.0% 10.8% Project NEEV The Company launched Project NEEV (Nurture, Educate, Empower to Create Value), focussing on goal setting and continuous feedback to instil a culture of high performance. Workshops on effective performance management and feedback involving 500 leaders and managers in 12 leadership workshops and 8 Train-the-Trainers sessions were organised, achieving a 95% on-time completion of goal setting for employees this year. Train-the-Trainer programmes like 'People Leadership - Art and Science of Leading People in Organisation' for People Managers were rolled out. 75 Trained Managers are now poised as catalysts to disseminate insights and techniques across the ICs. The 'Let's Talk' e-Campaign was rolled out, emphasising one-on-one conversation between managers and team members. 'Any Time Conversation' and 'Continuous Feedback' modules have been introduced, and various sensitisation programmes are being held at business level. Talent Council Stay, Say and Strive Fostering an inclusive culture and broadening perspectives Enable Supporting ecosystem Creating an ecosystem of enabling policies and practices WOW Various campaigns around Pride month and Persons With Disabilities (PWD) were carried out throughout the year to increase awareness of diverse groups beyond gender. Guest speakers were invited to generate awareness about LGBTQIA+, Neurodiversity, PWD, etc. A well-knit community of 36 DEI Champions was built to drive DEI efforts across businesses. 'DEI Academy' was launched on ATLVarsity, to increase awareness and sensitisation. More than 100 employees were certified as DEI Allies under this Academy. Furthermore, this year, various initiatives have been launched to support working mothers and create an enabling work environment. Maternity leave for adoption and surrogacy and three extra months of maternity leave for the mother of twins have been introduced. Post-pregnancy, a woman can opt to work from home or adopt a hybrid roster for up to six months. New facilities for women employees in terms of flexibility, travel allowances, creche facilities, and creche allowance have been introduced. The DEI Awards Ceremony was organised for the first time to recognise the efforts of businesses to support and promote a diverse and inclusive work culture. The introduction of the Allyship Awards provided a platform for 1,600+ women employees to recognise their Allies at work. Differently abled 45 Employees 28 Workmen 495 Engage 142% Creating a strong women talent pipeline for leadership roles A focussed approach to induct the diverse workforce at all levels Recognising the importance of having a robust leadership pipeline, a Talent Council was formed, initiating talent reviews for Tier-1 to Tier-4 employees. A user-friendly Talent Review software module has been launched, enabling the Council members, guided by business heads, to discuss and plan actions. Annual HR Awards (AHA) An initiative aimed to recognise practices/initiatives wherein HR adds maximum value to business and concentrates on various ways HR can continuously raise the bar by improving processes and experiences. HR Conclave A two-day HR Conclave, based on the theme, 'HR Transformation – Navigating the Future,' was organised, packed with insightful speaker sessions and panel discussions by the industry stalwarts from the business and HR fraternity. Engagement Activities More than 90 podcasts were released through L&T Radio. 'Appreciation Week' celebrations were conducted across six major locations, resulting in 8,000 appreciative messages on the Hi5 Wall Page. Promotional campaigns held toward employee wellness at various locations emphasising on Annual Health Check-Up and Financial Tax Planning. Additionally, the Company introduced various contests leveraging digital tools such as ArtBeats and QuizWiz, witnessing overwhelming response across the Company. L&T's Business Excellence Model (LTBEM) and Human Resources Excellence Model (HREM) Development of LTBEM draws inspiration and adoption of the globally recognised framework, European Foundation for Quality Management (EFQM), to suit the Company's unique organisational context. With 89 active certified assessors, the objective is to strengthen the management systems, practices, and capabilities to enhance the competitiveness of businesses to become world-class in their own sectors. 193 LARSEN & TOUBRO Human Capital Diversity Equity and Inclusion (DEI) Today, L&T has operations in over 50 countries, with employees of various nationalities, and 36 domiciles across states and UTs within India. Fostering diversity and inclusion in the workplace remains a key priority for the organisation, with a focus on hiring diverse talent and creating an equitable environment. Actions have been implemented across all four pillars of the DEI Charter - Induct, Engage, Develop, and Enable. Induct Improving the input Develop Leadership Pipeline Health, safety, and well-being of the workforce is one of the key focus areas of the Company, which is not just limited to our employees but also the contractual workers. HR and medical teams are continuously undertaking initiatives to promote health and wellness. From fitness programmes and ergonomic assessments to mental health support services, the Company is dedicated to fostering a workplace culture that prioritises holistic well-being. At L&T, the Company believes that preventive care is the key to maintaining optimal health. The employees are encouraged to undertake health checkups organised by the Company. There are frequent health checkups and medical camps to ensure the physical well- being of the workers. Integrated Annual Report 2023-24 198 methods by 50% Wrench VR-based tool for review of engineering 3D model for efficient constructability and maintainability review VR Immersive Walkthrough Management System Collaborative supply chain platform for enhancing the visibility and tracking of critical milestones from PO to delivery at the site The solution enables construction-driven project management by defining construction areas into manageable work packages ProWPack Post Order NLP-based module for logistics, offering spending trends and insights on KPIs to enable data-backed decision-making NLP-based Logistics Analytics Codification System for parametric comparisons, benchmarking, data mining, and analytics for various material categories to drive procurement cost optimisation Unified Material mCode Quality Project Management Procurement Statements Reports Financial Statutory Centralised platform with automated live S-Curves and progress dashboards; enables document management and communication control across all stakeholders IPBS NEW Application to track, manage, and monitor project invoicing based on billing milestones and schedules, providing invoice generation based on defined criteria and tracking plan, actual, and forecast status on project invoicing P-FAB comprehensive quality checks and customer and executive feedback Conquer - Quality Application for enable experts to work virtually side-by-side with site personnel collaboration services that Quality tool to raise NC Observation, RFI inspection, Quality Audit, and Laboratory Management TORQ NEW AR-enabled remote assistance application, including video Integrated Report Help Lighting easy search and systems to enable GPT 4.0 deployed on knowledge management Generative Al (GenAl) in Projects A centralised digital system to support client invoicing and subcontractor billing activities, enabling resource optimisation and prompt delivery of services PRONTO Application for construction management of Civil, Structural, and Piping disciplines, managing engineering inputs, detailed planning, material allocation, quality inspection, and status monitoring NEW eALPSNxt information retrieval Discussion and Analysis Management Corporate Overview MatNxT Digital Weighbridges Weighbridges integrated with ERP with no manual intervention for data recording/process flow Digital application for real- time tracking of precast segment casting and erection PWCC Material Management NEW NEW Project monitoring and progress tracker application integrating various team schedules and central MIS PROMPT TAG VR-based constructability simulation aids in better detailing and reviews by clients Online catalogue to select the right product based on technical specifications and parameters ProdoSpec Desk Design Suite Automated tool to generate uniform design documents with high precision Engineering and Design GPS-based app for simplified survey along with BOQ for the project Dhruv 360° Risk Perspective Digitalised system to capture risk perspectives from all departments Al For Contracts NLP-based module for key clause identification, risk quantification, document and datasheet extraction Bidding and Pre-Construction Constructability Simulation QR code based system to track the structural steel from steel service centres to the erection ConPro Application for tracking the entire concrete supply chain, including integration of batching plants and transit mixers Integrated Annual Report 2023-24 New initiative started in FY 2023-24 NEW 202 NEW NEW VR-based immersive video for safety training during induction or refresher courses VR-Based Safety Induction/Training report HSE KPI across different projects HSE ProACT Unified application to capture and for submission and verification SOPs and forms Mobile app to access ViewEHS Al Vision Analytics Al-enabled platform to monitor the unsafe act 24/7 by utilising CCTV video analytics unsafe behaviour and unsafe conditions tracking application for workforce to report safe/ Behavioural Safety HSE-Mitr Safety NEW Application for ensuring quality compliance in every stage of pipe fabrication Pre-Stress Insights Special application for monitoring quality estimation, procurement, NEW systems from design to various independent Solution to integrate ¡RUDRA Vendor Load Assignment Application for tracking the current load and the average cycle time taken for different vendors, enables better planning and vendor analysis Project Management Statements fabrication, quality Reports Discussion and Analysis Financial Statutory Integrated Management Corporate Overview Integrated Annual Report 2023-24 204 in conducting scenario analysis to select the optimal production plan on the shop floor Report Enables simulation of the entire process of platform manufacturing; aids assurance, enabling robust valuable insights non-destructive testing (NDT) ultrasonic testing; reduces developed for time of flight, diffraction and phased array NEW Special applications Automation of NDT Methods features of internal QMS in ERP over a secured internet- hosted system, ensures the supplier quality compliances with internal QMS The platform extends Supplier QMS analytics and offering Quality allocation for project use Improves office efficiency by automating repetitive work and provides a single source of truth for project data IEMQS 4.0 Planning Analytics Application for capacity management and resource levelling by analysing real- time data; offers insights on resource allocation and loading and aids decision- making for in-house utilisation or outsourcing NEW to provide advance information of their dispatches to L&T along with supporting documents, reduces inspection time, and facilitates faster material Enables suppliers Advanced Shipment Notice (ASN) Capacity NEW Digitalisation remains a key thrust area for L&T to transform the way EPC Projects are delivered. L&T started with sensorisation, digitisation, and integration initiatives and is now moving towards the deployment of AI, ML, and other high-end technologies to improve project delivery, reduce cost, and achieve a high level of quality and safety. Digital Twin Vertical Load out of Jackets Advanced Analytics business partners, with IP protection and revision control, comprises RPA Bots meshed with ERP and PLM Automation of delivering the appropriate drawing and documents to IDMS components digitally validation of ship AR-based solution for designing and AR for Ship Construction PLM CAD Integration Integration of PLM platform with native CAD software to improve design and engineering efficiency and handle change management better NEW RPA with AutoCAD Automation of as-built drawing generation consisting of the latest 2D drawing, BoM, weld details, and drawing changes NEW Intellectual Capital The Company's manufacturing facilities have also leveraged various digital technologies to create Industry 4.0-enabled units. Additionally, these initiatives have helped transform various processes involved in the delivery of engineered-to-order products and achieve benchmark delivery performance and safety levels. Digital Transformation of Manufacturing LARSEN & TOUBRO 203 of precast segment parameters in pre-stressing NEW Engineering Jackets for water depth >14m and <34m are to be loaded out vertically. However, fabrication will be done horizontally and upended, reducing fabrication time by 10-20% Advanced analytics use cases like rolling feasibility and distortion prediction Automatic generation of cable layouts (2D drawings) from the 3D model helps reduce manual effort in drawing generation by 60-70% NEW welding and laser welding simultaneous use of arc productivity through the Improving welding Hybrid Welding water, fire, HVAC, and Electrical substations; enables monitoring and predictive maintenance IoT implemented for critical utilities like IoT for Utilities Drawing Generation from 3D Model identify early failure, reduce spare consumption, and improve Overall Equipment Effectiveness (OEE) PDM multiple smart welding stations leveraging wireless technology; developed as part of the Autonomous Welding Project One-Man Multiple Stations One man operating Smart loT stations for various equipment in heavy engineering business IoT Stations Equipment Productivity and Utilisation NEW Navisworks to Excel Automation of report generation from 3D model reviews in Navisworks NEW Predictive Maintenance module, which helps Digital Transformation of EPC Projects Enhanced application for material tracking/common material solution LARSEN & TOUBRO Concrete Mass Slab for RRTS Integrated Make-to-Order module to track across eight stages covering engineering, PMT, SCM, vendor, logistics, site receipt, and inspection Digital MTO The modular design used for mud mat to enable fabrication at the yard instead of onsite fabrication reduced construction time by 20-30% Modular Design of Mud Mat Dynamics (CFD) for Airflow and Ventilation Design Computational Fluid Dynamics tools used to analyse and optimise design to reduce cooling requirements in buildings Computational Fluid Containerised Fire Pump Room Special design for containerised fire pump room and skid-mounted fire pumps GIS Analysis of Stormwater Runoff Analysis of stormwater runoff flow direction and runoff area using GIS to examine flow patterns and catchment areas MEP Cradle Modular MEP design, which is prefabricated at the factory, reduces construction time, and improves the quality of work Long Span Beam with Special Design Tapered composite beam with web openings and without stiffeners, reduces fabrication and erection time RC Wall with Aluminium Formwork RC wall with high repeatability formwork instead of typical brick wall, reduces construction time as well as improves work quality Cost and space effective solution to help reduce cooling requirements of buildings Heat Reflective Coating on RC Walls In-house Designing for Health Infrastructure Development of in-house capability to handle designing and planning of health-related infrastructure e.g., medical colleges; benefits from better productivity, schedule compression and quality control Large Diameter Piles Increasing pile diameter to range 900-1800 mm, economical design for high lateral loads and gives better quality control and productivity Toe-Pin for D-wall An economical method of diaphragm wall construction in places with rock at shallow depths In-house design of Design report and 3D Finite element model of the concrete mass slab for RRTS project; enhances design agility, reduces reliance on external consultants, and optimises the cost Auto Generation of Plan and Profile Sheets Generation of plan and profile sheets from AutoCAD drawings directly, reducing manhours and errors Increasing Slab Casting Productivity WATER TECHNOLOGY CENTRE Hybrid Operating Room Design A hybrid operating room is an advanced design that combines a traditional operating room with an image-guided interventional suite, e.g., MRI, CT; enables advanced surgical procedures to be done along with tracking progress as required in special cases, e.g., neuro-surgery Flexible Moulds for Precast Drains Specially designed mould to accommodate different sizes of drain elements by providing flexibility to vary width and depth; helped reduce the number of moulds required for precast Precast Design of Substation Buildings and Electrical Rooms Unique precast design and construction of utility buildings for high volume (~50,000 sq.mtr.) work, enabled through an innovative precast structural system and advanced joints with no shear walls for lateral load resisting system; helped reduce construction time by 25% Valve Placement Design Change Relocation of the pneumatic closure valve in slop pump discharge lines from the main deck to the cellar deck on the access platform, reducing the cost of the design The jacket design was revised to a single member, thereby reducing multiple joints due to the small section length in the earlier design Redesigned Jacket Offsite fabrication of pier cap instead of in-situ casting; reduces construction time and minimises traffic disruptions Direct planning and progress monitoring on BIM models by site execution teams Precast Pier Cap Intellectual Capital LARSEN & TOUBRO 207 Improvised VG40 Grade Bitumen Collaborated with a specialist vendor to formulate VG40 super bitumen with high viscosity (4000-4800 poise), resulting in increased resilience modulus, and hence, increased load-bearing ability of pavement PSC Slab for Underpass A pre-stressed concrete slab was designed to eliminate in-situ construction of Light Vehicle Underpass single box structures, reducing construction time and material requirements Anaerobic Digestion technology was adopted for Sequential Batch Reactors in wastewater treatment plants, reducing dependency on external automation vendors SBR with TPAD Technology Temperature-Phased Concrete Distribution System customisation to efficiently dispense concrete and minimise concreting time, Flying Bucket with fish-mouthed opening, and Concrete Spreader operation with three gates were adopted to reduce the casting time Intellectual Capital 208 BIM Model-Based Site Execution Statements End-to-end tracking RebarPro Digital application to track the history and degree of use of all enabling structures across project sites by using QR codes ETAP formwork panel and its repetitions A solution to track Form Fit reinforcement bars, with the support of Real Cut 1D Optimisation Software Ensures Bar Bending Schedule preparation in a standard format; also enables optimised usage of offcut Bar Bending Schedule (BBS) tool Automated generation of drawings after completion of design, primarily for columns and beams; helped reduce drafting manhours by 60% Draftwin Tools developed to automate design and BIM workflow BIM Automation through Revit Other Digital Initiatives LARSEN & TOUBRO 205 of rebar from store to site after fabrication, enabling wastage minimisation, saving time, and accelerating process efficiency ML for Legal Documents ML-based solution to extract important clauses and attributes from legal documents ICAM Internal control audit module for scheduling audits and recording audit findings against technical and commercial points Reports Financial Statutory Integrated Report Discussion and Analysis Management Corporate Overview Integrated Annual Report 2023-24 Value Engineering Initiatives Capital 206 organisation Knowledge Management System to provide situational guidance; capture, store, and extract required information for efficient knowledge transfer across the Enterprise Level Drishti taxation losses RPA bot, along with ERP customisation, provides automated GST reconciliation capabilities to avoid indirect GST Auto Reconciliation Intellectual Integrated Annual Report 2023-24 Advanced Analysis Tools for the Design of Airside Structures Midas Civil Plane Load Application was used to analyse the load dispersion and optimise the design of box and pipe culverts, reducing manual effort and improving design optimisation 1 For details, refer to 'Business Model and Strategy' section. LARSEN & TOUBRO 199 Business Ethics Management Brand Data Security, Privacy, and Cyber Security Talent Management - Attraction, Retention, and Development Quality of Products and Project Delivery FOR THE GOALS Material Topics Intellectual Capital 17 PARTNERSHIPS AND INFRASTRUCTURE 11 INDUSTRY, INNOVATION SDGs Impacted SE-5 SE-2 SE-1 SO-V SO-IV SO-I SUSTAINABLE CITIES AND COMMUNITIES Strategy Linkage¹ R&D Initiatives at L&T Construction Research and Testing Centre Special Cement Asphalt Mortar Mix 201 Reinforced concrete has a high carbon footprint due to the embodied carbon of the material used. Various materials are being experimented across the world. For e.g., fly ash is a common strategy to reduce carbon footprint, substituting the traditional material used in concrete with non-virgin or industrial by- products. Textile Reinforced Concrete (TRC) uses technical textiles in place of steel for reinforcement, which reduces the embodied carbon (of reinforcement material) from 2.55 tCo₂e/kg to ~2.2 kgCO₂e/kg. This facilitates the fabrication of thin structural elements with improved strength and durability. LTCRTC has developed an optimised fine-grained concrete mix incorporating glass fibre textile as reinforcement and has made a prototype of a precast structure with TRC enclosure panels. TRC will be useful in applications where structural flexibility and corrosion resistance are required, such as sacrificial formwork for metro piers, wall or enclosure panels, and foldable portable structures. The tested TRC mix design has been proposed for implementation in a lift irrigation project in Odisha. Textile Reinforced Concrete India is estimated to generate around 150 million tons of Construction and Demolition (C&D) waste annually, but only ~1% of it is recycled. There is a significant opportunity to enhance the use of C&D waste in construction. LTCRTC has conducted extensive studies on aggregates generated by processing C&D waste in different grades of concrete and found them to be effective in comparison to conventional concrete in terms of mechanical, durability, and shrinkage properties. LTCRTC has also carried out technical evaluation of recycled material for use in processes such as backfill, mechanical modification, and partial replacement of Granular Sub Base (GSB) layer. Testing has also been done on a concrete mix to be used for the roof screed and grade slab required for a building project. Recycled Aggregates Certain locations have soft soil and soil stabilisation is required to enable construction in such locations. Stabilising clayey soils helps improve their engineering properties, e.g., compressive strength and load- bearing, and typically, the materials used are lime and Portland cement. LTCRTC has experimented with the use of waste materials that could replace conventional stabilising materials. Also, it formulated a mix of lime with Ground Granulated Blast furnace Slag (GGBS). The sustainable stabilising mix was found to reduce the plasticity of the clay, reduce swelling pressure, and eventually increase the strength. The mix designed reduces lime requirement from 10% to 2% to be used for stabilising mix and has been proposed to be considered for future requirements at the site level. Sustainable Soil Stabilising Material for Soft Soil Statements Reports Financial L&T Construction Research and Testing Centre (LTCRTC) is a Department of Scientific and Industrial Research (DSIR) recognised and National Accreditation Board for Testing and Calibration Laboratories (NABL) accredited facility. It is the only such facility for the construction sector in India housed within a private company. It is authorised to conduct quality tests on all types of materials used in the construction sector as well as undertake research on new materials and mix compositions. Statutory Discussion and Analysis Management Corporate Overview Integrated Annual Report 2023-24 200 2Indian Roads Congress is the Apex Body of Road Sector Engineers and Professionals set up in 1927 by the Government of India. It provides a national forum for sharing of knowledge and experience dealing with construction and maintenance of roads, bridges, tunnels and road transportation. Cement-Treated Base and Sub-Base with Soil Aggregate Blend Cement-treated base/subbase layers in a pavement (road) are traditionally designed with natural aggregates stabilised with conventional stabilisers such as cement, lime, lime/fly ash blend, or chemical stabilisers to produce a mix of requisite strength. Replacement of natural aggregates with good quality natural soil could be an eco-friendly alternative to the conventional method. Preliminary laboratory trials at LTCRTC have shown that soil aggregate in the ratio of 30:70 with cement dosage of 6% and some special chemical additives can produce mixes satisfying the strength requirements specified in the Indian Roads Congress². The ratio can be increased to 70:30 with cement of only 2.5% for sub-base mixes. This specially designed mix has been used in the construction of a trial stretch of the Ghaziabad-Aligarh Expressway in 2023, and performance has been found to be satisfactory to date. Utilisation of industrial by-products or waste materials in road construction is an emerging trend globally. This can significantly reduce the burden on natural resources as well as improve waste utilisation. One such material is steel slag, which differs from blast furnace slag. LTCRTC has also undertaken studies to improve mix design using steel slag, and these have shown that dense bituminous macadam with up to 50% coarse steel slag aggregates is more durable and less prone to fatigue, rutting, and moisture- related damages. The use of steel slag aggregates can also reduce the cost of construction by 20-30%. Asphalt Mix with Steel Slag Aggregates Cement Asphalt Mortar (CAM) is an interlayer injected in the spaces between the track slab and the concrete roadbed in ballastless tracks. It is particularly used for high-speed and semi-high-speed rail networks. CAM is used as a stress relief and damping material in these rail systems and comprises cement matrix, asphalt emulsion, fine aggregates, and a variety of admixtures. LTCRTC, in partnership with M/S Nichireki from Japan, has developed a special CAM mix for use in track works in the Mumbai Ahmedabad High-Speed Rail project. The mix has been designed to meet stringent Japanese standards for high-speed rail projects. Integrated Report Revenue from new and emerging businesses SO-III R&D Engineers/Scientists €1,27,018 Mn Corporate Overview Integrated Statutory Financial Discussion and Analysis inspection cycle time for Report Reports Statements Management innovation are related to reducing material consumption, increasing the use of non-virgin and eco-friendly materials, enhancing resource (manpower, machine) productivity, reducing delivery timelines, strengthening climate resilience of structures, and improving product design/features. These innovation efforts are driven by R&D, engineering and design function, competency cells, and execution teams across the various businesses. Key Highlights of FY 2023-24 * 3,905 Mn Total R&D spend (cumulative over last 3 years) The Company's focus areas for 321 Beneficiaries across Thrust Areas 4,98,303 Water and Sanitation 3,51,870 Education 7,50,168 Health यः Skill Building YY and Impact Yes! Material Topics FOR THE GOALS implementation is through partnerships with NGOs, government agencies, and through the Company's own onsite teams. As a responsible corporate citizen, the Company contributes towards inclusive growth by empowering communities and accelerating development. PARTNERSHIPS 44,347 L&T's commitment to social responsibility is demonstrated through its CSR programme, focussing on inclusive growth in areas like water, sanitation, health, education, and skill development. Working under the guidance of the CSR & Sustainability Committee, the project Brand The Company's social and relationship capital comprises intangible assets from its network of stakeholders, such as employees, customers, supply chain partners, and the community. This capital is nurtured through transparent communication and ethical practices, and continuous engagement, collaboration, and innovation. Instilling sustainability and resilience in the value chain is one of the core elements to meet the expectations of the stakeholders. The Company strives to impact the larger community across the country through its CSR interventions. The Company believes in engaging with the customers and clients in a fair, transparent, and ethical manner while meeting their diverse and changing needs and expectations. The Company is handholding and sensitising its supply chain partners to build a sustainable and resilient supply chain. EQUALITY Human Rights and Labour Conditions Supply Chain Customer Experience and Satisfaction Diversity, Building India's Social Infrastructure Inclusion & Equal Opportunity Management Sustainable 1 For details, refer to 'Business Model and Strategy' section. 211 LARSEN & TOUBRO Social and Relationship Capital Business Ethics GENDER NO REDUCED INEQUALITIES Integrated Report Statutory Financial Reports Statements At L&T, building long-term relationships based on mutual trust, respect and benefits for business growth and profitability is a way of life. The Company has created meaningful social and relationship capital while pursuing progress, meeting customers' needs and demands, working with suppliers, and driving inclusive growth for communities. Key Highlights of FY 2023-24 Discussion and Analysis 1.6 Mn 9 Strategy Linkage¹ SO-III SO-IV SE-2 SDGs Impacted 1 CSR beneficiaries Management Corporate Overview Integrated Annual Report 2023-24 10 5 сл QUALITY EDUCATION Customer Satisfaction Score 212 POVERTY M DECENT WORK AND ECONOMIC GROWTH AFFORDABLE AND CLEAN ENERGY 4 AND WELL-BEING GOOD HEALTH SSS ZERO HUNGER AND SANITATION CLEAN WATER 17 Integrated Annual Report 2023-24 Social Engagement Corporate Overview Harvesting Change: Mr. Devendiran's Sustainable Farming Shift at Pachapalayam, Coimbatore Capital Social and Relationship In the project area, 338 crop demonstration plots were established under the 'Seeing is Believing' principle, focussing on Kharif and Rabi crops like soybean, wheat, and gram, which led 694 farmers to adopt systematic crop intensification practices, supported by demo kits for integrated pest, fertiliser, and disease management. Crop Demonstration LARSEN & TOUBRO 215 In Devgaon, Mr. Sarjerao, 49, and his family rely on agriculture, cultivating cotton, sorghum, and millet on 2 acres of land. Facing water scarcity, Sarjerao adopted drip irrigation through ICDP, thus boosting cotton yields to 7-8 quintals per acre. Encouraged by this success, 54 farmers in Nagzari and Devgaon adopted drip and sprinkler irrigation. Drip of Success: From Drought to Harvest Promoting climate-resilient agricultural practices is a focus area of ICDP, aiming to boost crop production sustainably. This includes diversifying crops, adopting dryland horticulture, and using efficient irrigation methods like drip and sprinkler systems. Climate-Resilient Agricultural Practices Water harvesting structures to enhance soil moisture content 04/03/2004 18:3 Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial Reports Statements Net Zero Buildings The building sector in India continues to grow at a rapid pace, and the energy requirement has significantly contributed to the country's energy consumption as well as GHG emissions. While green buildings have demonstrated resource savings of up to 30-40% compared to conventional ones, achieving the next level of resource efficiency requires the construction of Net Zero buildings. A new building on the Company's campus in Chennai has already been registered as 'IGBC Net Zero Energy Platinum' with more buildings in progress for certification. 1GBC CHI Cont of Indian Green Building Council शिवस्वराशेडकरी कंपनी लि. अंब Larsen & Toubro Technology Centre - 4 Manapakkam, Chennai Registration No.: IGBCNZ230060 In Ponnakani hamlet, Mr. Devendiran encountered water scarcity in Bogampatti village, Pachapalayam ICDP location, due to excessive extraction of groundwater and failed monsoons with only one functional borewell out of three. Under one of the project interventions, his plot was selected for a crop demonstration. He adopted a new package of practices consisting of planting tomato saplings, biofertilisers, nutrients, and pest traps. has successfully demonstrated intent to design and construct building(s) in accordance with the IGBC Net Zero Energy Rating System The promotion of organic formulation, fostering beneficial microorganisms for enhanced crop growth, has led to 950 farmers from Devgaon and Nagzari preparing and utilising organic formulations. 123 farmers in Devgaon and Nagzari are set to enjoy year-round fresh produce from their fields, conserving soil and optimising environmental factors, thereby leveraging multi-layer farming benefits. Among them, 30 are demo projects, and additionally, 37 women from Nagzari and 26 women from Devgaon have independently developed multi-layer farming setups. Women's Empowerment: A cornerstone of Community Development and Sustainability In Alamgaon, Nagzari, a group of ten women from a local 'Farmer Group' invested * 10,000 each to initiate a transformative journey towards empowerment. Previously engaged in low-profit farming or as labourers, these women, with project support, transitioned to organic farming. They built a Farmer Producer Organisation (FPO) shop including milk and soyabean collection, thus boosting their income significantly. Their FPO expanded to include over 350 members from nine villages, assisting 30 farmers in purchasing cows to increase milk production. Thanks to these efforts, their annual income grew from ₹ 22 lakh in 2022-23 to 40 lakh in 2023-24, with members acknowledging the crucial role played by the project in their success. Sanitation The Company implemented community-led total sanitation initiatives across Nagzari and Devgaon in Maharashtra and Sevantri in Rajasthan in 2023-24, constructing 570 household toilets using volunteer labour and forming monitoring committees to create and maintain open defecation-free villages. Towards Dignity: Story of Shahubai At 75, Mrs. Shahubai from Sadesavangi village faced hardships from drought and health issues, compounded by having no toilet. Through L&T's ICDP sanitation project, a toilet was constructed, significantly improving her family's health and dignity by promoting regular usage and highlighting the crucial need for proper sanitation. The villages in the ICDP locations have witnessed significant changes through various activities, including water availability, sanitation, and sustainable agricultural and livestock-rearing practices. 218 Integrated Annual Report 2023-24 LARSEN & TOUBRO Drivers of CSR Interventions 217 Milking Success: Mr. Subbaiyan's Fodder Revolution and Cattle Transformation - From Pasture to Prosperity Mr. Subbaiyan, an elderly farmer from Periyakuyili hamlet, primarily earns from his three dairy cattle and two calves, previously managing a modest monthly income of ₹19,020. His reliance on dry fodder limited his earnings, but participation in the Fodder Demonstration project-utilising fodder seeds, biofertiliser, cattle feed, and mineral lick-boosted milk production and cattle health, leading to an increase in his net monthly income to 22,000, while reducing costs on feed. In the project area, cattle rearing is a significant agri- allied activity, but low productivity in the dairy business is often due to a shortage of quality feed and fodder. Farmers rely on seasonal crops like maize, sorghum, and millet during off-seasons, leading them to sell low- producing cows at the start of summer to avoid losses. Fodder demonstrations were introduced to address this, providing nutrient-rich feed for better milk yield. Fodder crop seeds were distributed to 54 farmers, encouraging them to cultivate fodder on their land and make cattle rearing more profitable. Livestock Development Statements Reports Report Financial Statutory Integrated Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 growing cotton, tur dal, and vegetables using harmful chemicals on her four-acre plot. She shifted gradually from chemical-intensive farming to multi- layered orchard farming through the Integrated Community Development Programme (ICDP). Latabai adopted organic methods, cultivating a variety of vegetables and trees without chemical inputs. This shift led to significant savings on market expenses and yielded surplus produce, enhancing her income within the village. Drought has been persistent since 2012 in Chambharwadi village, Marathwada. Mrs. Latabai Otade, a 40-year-old resident, was reliant on Latabai's Journey: From Drought to Perennial Harvest 216 Multi-Layer Farming Ashish Rahiga by certifier Net Zero Energy 213 LARSEN & TOUBRO Social and Relationship Infrastructure for Water Conservation Water and sanitation interventions under ICDP were planned by identifying priorities - drinking water, sanitation and agriculture – and making it a community-led process. Structures like check dams, anicuts, contour trenches, farm bunds, and farm ponds were constructed for soil and water conservation and rainwater harvesting, with community participation. Revitalising Nagzari: L&T's ICDP turns the tide on drought From 2019 to 2024, the ICDP implemented soil and water conservation measures, resulting in a 7.3-meter increase in average well water level by 2023-24. This encouraged farmers to explore horticulture and improve agricultural prospects. Water and Soil conservation Flowing Forward: Clearing Noyyal River Waterways at Pachapalayam In Coimbatore's Pachapalayam cluster, part of the Noyyal River catchment area, the total river streamline length is around 27 km. Initially desilted but obstructed by wild vegetation, channels underwent step-by-step excavation as part of the ICDP's water and soil conservation efforts. 214 Integrated Community Development Programme (ICDP) targets water scarce regions in selected stressed areas through structured approaches. This includes need assessment, community mobilisation, infrastructure construction, sanitation, and sustainable agriculture promotion. It empowers residents to responsibly use resources, ensuring continuity, sustainability, and at the end of the project, proper handover of assets to community institutions to ensure project sustainability. The project was launched in 2014-15 in Rajasthan, Maharashtra and Tamil Nadu in 5 locations. It benefitted 10,737 households and treated over 15,465 hectares of land. The expansion in 2022-23 reached 12,545 additional households and treated over 20,746 hectares area. In 2023-24, 3,405 households were added and over 6,880 hectares area was treated. Since inception, this initiative has reached out to 26,687 households and treated over 43,091 hectares of land. Capital Integrated Community Development Programme L&T's employee volunteering programme, L&T-eering, engages employees in community development activities. Management Discussion and Analysis Integrated Report Statutory Financial Reports Statements Corporate CSR Team The Corporate CSR Team is dedicated to maximising social impact by developing, implementing, and overseeing CSR programmes aligned with Board-approved guidelines and frameworks, collaborating with NGOs as necessary. CSR Coordinator and Teams at Campuses, Area Offices, and Sites L&T's CSR teams at campuses, area offices, and sites conduct assessments, identify local projects and NGO partners, and implement and monitor CSR initiatives. This localised support ensures that L&T achieves its CSR goals and effectively addresses community-specific needs. L&T Health Centres Trained medical professionals at L&T's multi-specialty health centres serve underprivileged communities, offering accessible and affordable healthcare. By addressing health disparities, L&T enhances the well-being of those in need. Prayas Trust Comprises female spouses of employees, and female employees. The main objective is to serve underprivileged communities around L&T facilities. Volunteers L&T Public Charitable Trust (LTPCT) A non-profit entity in L&T ecosystem that implements CSR activities, especially in health, aligned with the Company's CSR framework. Integrated Annual Report 2023-24 Corporate Overview Management 210 SOCIAL AND RELATIONSHIP CAPITAL LARSEN & TOUBRO 209 Girder transporter is specialised equipment used in the Mumbai Ahmedabad High Speed Rail (MAHSR) project to transport girders from the bridge gantry at the casting yard to the launching location and powered by a diesel genset. The equipment had two operator cabins without any air conditioning in the cabins. Package C4 project team modified the cabin to install solar power ACs. This enabled operators to work in a healthy environment and avoid emissions. Solar-Powered Operator Cabins Building sewage treatment capacity to meet the demand of a thriving, urbanised country requires significant investments. Typical sewage treatment technologies have long processing times and large land requirements. The Company's Water and Effluent Treatment business, in collaboration with Anna University Chennai, has developed and patented the 'Attached Growth Bio-Reactor'. This design requires less space, reduces sludge quantities, and lowers power requirements for the sludge treatment. Recently, the technology has been used to upgrade 100 KLD STP located in Thiagarajar Arts College, Madurai and operating successfully till date. Bio-Reactor Technology Attached Growth L&T Construction KS Venkatagiri Exative DC-GGC Garmit Singh Are Clams IGIC (The Certification is valid for three years from the date of award) December 2023 (Design) Social and Relationship Capital Social and Relationship Capital Additionally, water harvesting trenches, absorption pits, and check dams were constructed in Pachapalayam, Bogampatti, and Panapatti villages to facilitate groundwater recharge and collect excess run-off, aiming to harvest 62,390 cubic metres of water in the project area. Integrated Statutory Financial Discussion and Analysis Report Reports Statements Che CDC Net Zereg Jul-23 57% 56% 53% 51% 40% 46% 30% Month-wise Average Score Aug-23 Number of Schools/Centres 40% Students Benefitted 191 Number of Schools/Centres Skills in Schools Learning Enhancement and Life 1,573 Students Benefitted 45 Sep-23 Pre-School Interventions 1,02,638 Students Benefitted 308 Number of Schools/Centres Digitalisation of Schools 44,189 Students Benefitted 243 Number of Schools/Centres 35,879 Community Learning Centres Number of Schools/Centres 80 40% 45% 50% 55% 60% LARSEN & TOUBRO The intervention includes training for teachers, ongoing assessments of learning levels, and personalised home visits, resulting in improved attendance and increased parental engagement while ensuring joyful learning in a safe and conducive environment. This has resulted in a remarkable 42% average enhancement in children's cognitive, emotional, language, and motor abilities. communities to be Balwadi teachers with the requisite knowledge, skill, and attitude to function effectively. L&T's pre-school programme in Mumbai's underprivileged communities aims to create a nurturing environment for children's holistic development. Through 10-month interventions in 64 community centres known as 'Balwadis', catering to 1,426 children, the initiative focusses on preparing children for primary school enrolment. The programme emphasises bolstering the emotional, cognitive, language, and gross motor skills of the children. The programme also empowers women from the 35% Pre-School Programme LARSEN & TOUBRO 223 1,35,703 Students Benefitted 372 Number of Schools/Centres Strengthening School Infrastructure 14,785 Students Benefitted Social and Relationship Capital Oct-23 LARSEN & TOUBRO Dec-23 20% 74% 40% 60% 80% Subject-wise average percentage by location 100% ડિંગ રાઈ ઉ A recent endline assessment showed encouraging results where a considerable increase in students' learning levels and understanding of concepts was observed, compared to the baseline. The graph shows a clear uptick in Science and Mathematics scores for the students who underwent the intervention as a whole and specifically for the students who were part of the Super 30 Science clubs formed in their respective schools. Mathematics teachers, and School Management Committee (SMC) members, apart from students of grades 6-8 who receive learning inputs. The project reaches out to 243 Government schools, tapping the potential of 44,189 young minds in grades 6-8 to enable them to learn Science and Mathematics in a practical way. Whereas, 713 government teachers trained in using techno pedagogy, digital media, and hands-on experiments in regular Mathematics and Science classes. 35% of students in intervention schools are making STEM models on their own and have created models of a room heater, tubelight making, water level indicator, integer fractional numbers, Math clock, DC circuit with light, buzz and bulb, and remote reading of face expressions. The key stakeholders of STEM Projects are State Education Departments, School Principals, Science and Education Project was initiated in 63 government schools in 2019 and is currently implemented around seven L&T campuses with the objective of enhancing the quality of STEM education by providing digital infrastructure, teachers training, hands-on models, and activity-based learning pedagogy in Government schools. The methodology is designed to increase the levels of fun and engagement in children in the classroom, creating an environment of curiosity and inquisitiveness towards scientific concepts. The project aims to tap potential and scientific rigour among students in select Government schools in Gujarat and Tamil Nadu. STEM (Science, Technology, Engineering, Mathematics) STEM Education Initiative 'Engineering Futures' Statements Reports Report Financial Statutory Integrated Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 0% 226 Super 30 Non-super 30 Integrated Annual Report 2023-24 1st Prize winner Mr. Joshwa A. and Mr. Sivakarthikeyan N. with their science teacher Mrs. Thenmughil Ramakrishnan from Government High School Gerugambakkam, Chennai 3 Februg M ona TEM challe 228 The top three winning ideas consisted of an 'Agricultural Tricycle' which covers the plantation cycle - ploughing, sowing and watering. A 'Modern Waste Segregation System' - an app-based solution developed by the students through Scratch Coding for segregating dry and wet waste, also an 'Alternative Magic Road' where the students developed a model to use alternate energy for streetlights and providing alarm system to prevent accidents at hairpin bends. The three winning schools received reward money for upgrading their science labs. Additionally, all three winning teams received a DIY Robotics Kit for further exposure to STEM and an opportunity to visit L&T's tech projects and interact with the leadership team. Chennai, Coimbatore, Hazira, Vadodara, Talegaon, and Mumbai made it to the L&T National STEM Challenge. Approximately 6,000 students of grades 6-8 participated in the intra and inter-school level competitions, out of which 24 teams (50 children) from L&T announced the National STEM Challenge held in February 2024 with the objective of funnelling STEM talent in L&T-supported STEM projects by showcasing students' innovative ideas and creating opportunities to connect children to higher-level STEM learning. The L&T National STEM Challenge unfolded through three exciting levels, engaging students at different stages of the competition conducted in six cities across India to promote STEM among school children. The challenge marked the high point of fostering STEM education through L&T's 'Engineering Futures' initiative. It showcased the incredible talent and innovativeness of young minds from across India. First L&T National STEM Challenge - Celebrates Young Talent Social and Relationship Capital LARSEN & TOUBRO 27% 227 | Gujarat (L&T Energy-Hydrocarbon) Gujarat Chennai Average Mathematics Score Non-super 30 Average Science Score Super 30 70% Nov-23 Capital for Lesser Privileged children ged by Angel Xpress Foundation 49% 49% 60% 70% 80% 90% Children's Learning Levels Percentage of Children Endline assessment conducted in March 2024 showed significant improvement in children's learning levels, as shown in the graph: The programme emphasised shifting teachers' focus from a teacher-led to a learner-led process to ensure qualitative teaching deliverables. The programme included the provision of interactional teaching and learning. It reached out to 1755 children during the year. The programme also introduced the Reading Promotion Programme and the Home Lending Initiative, which has helped to improve the linguistic skills of children. The mobile library further covered 654 children from grades 1-10. L&T started a School Partnership programme in five schools in Powai, Mumbai, in FY 2023-24, with the aim of developing foundational literacy and numeracy skills of the children attending Municipal Primary schools. According to the Annual Status of Education Report (ASER) 2023 and the National Achievement Survey 2017, there is a considerable gap in the learning levels of students across different states and subjects, especially in reading and numeracy skills. Addressing the issues of quality of education, teacher training, curriculum reforms, and infrastructure development is essential for improving learning outcomes and ensuring that all children have access to quality education. Learning Enhancement through the School Partnership Programme Financial Statements Reports Statutory Integrated Report Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 The graph shows consistent growth in the month-wise average classroom learning score for children in 25 Community Balwadis at Powai in Mumbai, Maharashtra. 224 Jan-24 78% Social and Relationship %LL 40% Free Learning centre A CSR Initative of Larsen & Toubro LANSION & TOU angelxpress DEL GU HAMARA SHEHER (Asalpha) A CSR Itave of Lan & Tr L&T runs 41 Community Learning Centres in Mumbai and 10 Centres in Chennai, reaching out to 2,305 children in Mumbai and 728 children in Chennai. L&T's Community Learning Centres provide remedial learning support to primary school children (7 to 12 years) to reduce the gap between their current level of learning and grade-level learning expectations in Language and Mathematics. The Centres are run in government schools or public places/parks outside of school hours in partnership with the local Municipal Corporations. Students at lower levels of learning than their grade level are identified through a baseline assessment and enrolled in small batches of 5-15 at the remedial centre. Trained teachers or volunteers at the centre help children explore language skills and understand basic arithmetic operations and concepts in Mathematics. This focussed 2 hours of daily interaction with children in a fear-free, positive learning environment has helped the children build their foundations of learning, and they are better able to cope with grade-level learning in their classrooms. Community Learning Centres STEM 'Engineering Futures' Programme 225 Endline Baseline Basic Arithmetic Functions Reading Sentences Identifying Alphabets 0% 10% 11% 11% 20% 30% 50% STEM (Science, Technology, Engineering, Mathematics) Education Project 'Engineering Futures', particularly aims to reduce the urban-rural gap in education. It aims to introduce Science and Mathematics to underprivileged students in Government and under-resourced schools, piquing their interest in STEM fields. This initiative is crucial for fostering a more equitable distribution of educational opportunities and empowering students from marginalised backgrounds to pursue careers in science, technology, engineering, and mathematics. Area under Horticulture (hectares) Education FY 2021-22 FY 2022-23 FY 2023-24 638 NAGZARI This year, Water and Sanitation Interventions have impacted 4,98,303 lives Improving Quality Education and Health Services in ICDP locations Water sufficiency in the ICDP project areas and the resultant increase in agricultural income led to increased aspirations among the local population seeking a better future for their children. Thus, L&T extended its support to work on other social needs, such as health, education, and livelihoods in the ICDP locations, which were initiated in 2019-20. 219 FY 2023-24 Target 220 LARSEN & TOUBRO Saajhi Shiksha Saajhi Shiksha has been implemented in two Gram Panchayats, Kookra and Lasadiya of Bhim block in Rajsamand district in Rajasthan, where ICDP was implemented between 2014 and 2019. After water sufficiency and 'Open Defecation Free Villages' status were achieved, an education initiative 'Saajhi Shiksha' was introduced in 2022 in these two locations. Saajhi Shiksha focusses on the capacity building of caregivers (parents and guardians) and mother mentors to promote school readiness of young children and ensure children aged 3-6 years acquire foundation literacy and numeracy skills. The strategies include providing early learning kits with play items and learning materials to the parents and training them regularly on how to use this material with their children. Active mothers have been identified and engaged as mentor mothers for the use of Early Learning Material (ELM) and the revival of defunct Monitoring and Support Committees for monitoring of Anganwadi services. The interventions resulted in 97% of parents engaging children in various learning activities at home and improvement in children's overall performance in numeracy, literacy, and language by 30%. H 거 Social and Relationship Capital FY 2020-21 FY 2019-20 Baseline I FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 ' 461 DEVGAON 1,076- 12 Baseline ev I 22 FY 2019-20 18 FY 2020-21 10 FY 2021-22 11 FY 2022-23 11 NAGZARI 20 Baseline 98 Community-led Early Education: Empowering Parents for Children's Success 10,074 25,208 FY 2022-23 FY 2023-24 19,887 9.24 95% 51,727 12.88 98% Percentage of Households with Drinking Water Agriculture No. of Crop Demonstrations 95 338 Additional Area protected from Direct Run-Off (hectares) 2,620 Increase in the Area under Cultivation/Irrigation 60% 56% Fallow Land converted to Agricultural Land (hectares) 202 218 619 5,345 Capital Social and Relationship Increase in Water Table Level (metres - average) Recognising the pivotal role of parents and communities as the primary support system for children, the intervention embarked on an endeavour to involve parents actively in early education. The project team understood that parents had busy lives, so they planned their meetings at times and locations convenient to the parents, sometimes even at construction sites. During these sessions, parents learned how to use early education materials to teach their children at home. Notably, during one of the sessions, all participating women pledged to not only bring children from their community to the Anganwadi centre but also ensure their safe return home daily. The dedication of some parents was commendable who took up the responsibility for mobilising other parents and co- organising the training sessions. Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Statutory Financial Report Reports 20 Statements A Healthy Beginning At the onset of the programme, women, including pregnant and lactating mothers, their families and communities were sensitised on the importance of maternal health, early childcare, and nutrition. 'Balsakhi', a cadre of trained women health workers, reached out to 806 women through mothers' meetings and home visits, including pregnant, lactating women and mothers of young children. There was a significant emphasis on regular dialogue with stakeholders such as family members, supervisors from the health department, staff from Anganwadi centres, and representatives of Panchayati Raj Institution (PRI) to ensure quality service delivery, fostering a sense of ownership and collective responsibility towards improving healthcare services in the communities. This resulted in appropriate care at home, a balanced diet, and ultimately, safe childbirth. 111151111 221 LARSEN & TOUBRO Coverage under ICDP in Three Locations - Devgaon, Nagzari, and Sevantri Households covered under ICDP Area of Land under the Project Area (hectares) People Covered Water Availability Water Harvested (lakh litres) Integrated Development by Enhancing Nutrition for Mothers and Children at Sewantri L&T has been working since 2015 in 10 villages of Kumbhalgarh block through an Integrated Community Development Programme (ICDP) in restoring the land and water resource regime, enhancing farm-based livelihoods and introducing Water Sanitation and Hygiene (WASH) facilities and practices along with community institution development. Once the water interventions and provision of sanitation facilities were sufficient and sustainable, the focus shifted to enhancing the nutrition of mothers and children at Sewantri, a block consecutive to Kumbhalgarh. The Company's education initiatives are focussed on promoting social advancement and inclusive development in the education system. This is achieved by providing infrastructure in under-resourced schools, establishing community learning centres, enhancing teachers' capacity, and promoting community monitoring systems. This year, L&T's Education interventions were implemented in 679 schools across India. 485 914 66 31 Village Development Committees Institution Building 22* 24* 14*^ 40 Pastureland Area under Protection (hectares) 195*^ 237* 180 240 No. of Veterinary Camps Livestock Livelihood No. of Children in Balwadis supported No. of Kitchen Gardens Health and Nutrition 521^ 600 5 - No. of Active SHGS 235 237 SHG Savings Fund created for Inter-Loaning (lakh) Statements Reports Financial Statutory Integrated Report Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 222 ^ Interventions till September 2023 Baseline In ICDP Devgaon and Nagzari Location * In ICDP Sevantri Location 1,643 2,104 No. of Farmers attended Farm-Field Training Capacity Building 8#^ 26# No. of Farmer Groups formed 126 125 # 944 6 Depth of water from land surface (metre) Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial Reports Statements Baseline FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 8. 6 8 10 DEVGAON 612 654 14 14 13- 606 80 4 5 5 FY 2019-20 FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 SEWANTRI Increase in irrigated area (hectare) 9 Baseline FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 420 435 ! 445 ¡549 583 638 SEWANTRI FY 2019-20 FUTIONS 2,620 Grievance Redressal Mechanism L&T CSTI and Skill Trainers Academy (STA) at Madh Sarva Shiksha Abhiyan (SSA) - Community pre- school programmes and community learning centres preventing dropouts and ensuring enrolment □ STEM Initiative of National Science and Technology Communication Council and the Department of Science and Technology, Government of India - L&T's STEM Education Programme - 'Engineering Futures' L&T-eering: Employee Volunteering Initiative National Health Mission: □ National AIDS Control Programme (NACP), L&T ART centre at Andheri □ National TB Control Programme (RNTCP) at L&T TB Centre at Andheri □ National Family Planning Programme: National Skill Development Mission: Contraceptive services made available at L&T Health Centres Improving the quality of services at Anganwadi and capacity building of Anganwadi workers □ Mother and Child Health Programme: ANC PNC care and immunisation services provided at the health centres are linked to this programme Linking patients visiting L&T health centres to this scheme □ Pradhan Mantri Jan Arogya Yojana: Linking patients availing dialysis services at L&T centre to this scheme Pradhan Mantri Bhartiya Janaushadhi Pariyojana: Linking patients visiting L&T health centres to this scheme Integrated Child Development Scheme: Farm bunding activity in ICDP Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA): Pradhan Mantri Krishi Sinchayee Yojana: Drip irrigation in ICDP During the four-month training, the stipend proved invaluable in sustaining her stay in Vizag. It was this support that enabled her to continue the training, especially considering her relocation from another state. After completing the training, Durgabati secured a job at Hyderabad, with an annual salary of ₹ 1.80 lakh. Her perseverance and determination, clubbed with access to quality training and support from programmes like MSTC, helped her succeed. MSTC thus continues to transform the lives of many aspiring individuals, enabling them to support themselves and their families. Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Report Statutory Reports Financial Statements Linking CSR Interventions with Government Schemes and Programmes: Swachh Bharat Abhiyan: □ 4,216 household toilets constructed since 2017- 18 using local skills and materials □ 877 school toilets constructed since 2015-16 □ 37,914 children provided WASH awareness since 2015-16 □ Community-based monitoring committees ensured that these villages became open- defecation-free Swajal Yojana under Rural Development Ministry: Watershed development programme under ICDP National Rural Livelihood Mission (NRLM): SHG programme under ICDP □ Mahatma Jyotiba Phule Jan Arogya Yojana in Maharashtra: Ms. Durgabati Das, hailing from a modest family background with her father working as a farmer and her mother as a homemaker, had financial constraints that led her to discontinue formal education. However, her determination led her to pursue ITI in Electrical Trade at Government ITI, Balasore. Seeking better opportunities, she relocated to Vizag and joined L&T Multi Skill Training Centre (MSTC). The training proved to be highly educative and practical, providing a conducive learning environment. Durgabati acquired not only technical skills but also gained confidence through soft skill training, essential for facing life's challenges. Linking patients visiting L&T health centres with this scheme Linking HIV impacted widows at ART Centre Discussion and Analysis Report Reports Statements PARTNER MEET 2024 COLLABORATION FOR SHA CCESS Stakeholders and ESG With a heightened focus and demand from the stakeholders on ESG, the roles, relationships, and perspectives of the stakeholders have also evolved. The Company is also engaging with its stakeholders on ESG matters, the details of which are elaborated in Principle 4 of the BRSR section of this Report. Financial There is a wide range of stakeholders, each with their own needs, expectations, and requirements. The grievance redressal mechanism provides a platform for these stakeholders to voice their concerns. An efficient grievance redressal mechanism is imperative to effective stakeholder management. The mechanism related to investors, shareholders, and supply chain partners is explained in Section A of the BRSR section of this Report. The mechanism for workers, communities, and customers are explained in Principles 3, 8, and 9, respectively, of the BRSR section of this Report. LARSEN & TOUBRO Financial Capital FINANCIAL CAPITAL LATHUR 238 Integrated Annual Report 2023-24 237 Statutory Integrated Management □ Adhar Poshan Yojana: Provide nutritional support to HIV-affected patients at the ART centre L&T prides itself on a strong culture of employee volunteering, encouraging its workforce to actively engage in meaningful social causes. Our employees contribute their time, skills, and resources to various community development projects, embodying our commitment to social responsibility. During FY 2023-24, 7,188 L&T volunteers gave their time towards organising creativity camps, STEM-based workshops, educational excursions, and supporting disadvantaged groups through craft and NGO melas, participating in Daan Utsav. Many of our programmes involve mentoring and teaching underprivileged children, aiming to bridge educational gaps and empower the next generation with knowledge and skills. Our healthcare initiatives see employees participating in medical camps, blood donation drives, and health awareness campaigns, contributing to the well-being of local communities. Environmental sustainability is another key focus, with employees participating in tree plantation drives, clean-up campaigns, and promoting renewable energy usage. 235 LARSEN & TOUBRO Social and Relationship Capital RELATIONSHIP CAPITAL The Company has an unwavering focus on nurturing its relationships with clients, customers, supply chain partners, investors, and shareholders for sustainable growth. The business model and strategy have further cultivated long-term relationships with its clients, supply chain partners, and skilled workforce, resulting in market share growth and enhanced brand value, alongside transforming the sector through a proven track record. Brand value is about trust, reputation, value, and credibility for the Company. It has stood the test of time. This has been facilitated by investing in and nurturing one of the most crucial and intangible assets, viz., the Social and Relationship Capital of the Company. 236 Key External Stakeholders Government (as clients, regulators, policymakers), private sector clients/customers, supply chain partners, and shareholders. The basis of identification of these stakeholders has been elucidated in the 'Stakeholder Engagement' chapter. Details of Engagement The stakeholders provide insights that help the Company to review and progressively refine the strategies to create long-term value for all. The 'Stakeholder Engagement' section also talks about the mode of engagement, frequency, and topics covered in these engagements. Integrated Annual Report 2023-24 Corporate Overview □ Widow Pension Yojana: From Farm to Fortune: Durgabati Das' Electric Journey □ Ayushman Bharat Yojana: Capital Capital L&T has also collaborated with government schemes such as the Pradhan Mantri Jan Arogya Yojana and Jan Aushadhi Yojana, which provide monetary aid in the form of insurance and subsidised costs on medicines that significantly impact out-of-pocket expenses. The ART Centre at Koldongri, Andheri, Mumbai has collaborated with the Mumbai District AIDS Control Society (MDACS), National AIDS Control Organisation (NACO), and Revised National TB Control Programme (RNTCP) under the Ministry of Health and Family Welfare, Govt. of India, supplementing the government's efforts to control the spread of communicable diseases such as HIV/ AIDS and TB. Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial Reports Statements Cancer Care Services L&T focusses on promoting preventive education and early diagnosis of cancer by implementing cancer- related interventions that target both men and women. The primary goal is to raise awareness that cancer is a treatable disease and to encourage people to undergo regular screening for early detection. This year, 60 specialised check-up camps for cancer were conducted in Mumbai, Thane, and Palghar. 3,378 individuals, comprising 1,128 men and 2,250 women, participated in the camps. L&T supports a shelter programme that provides temporary residential facilities for caregivers and children from across India undergoing cancer treatment in Mumbai. 121 children and 244 caregivers were provided shelter facilities, and 496 counselling and motivational sessions were conducted with children during the year. इंडियन भोगा विनाशुल्क कैन्सर तपासणी शिबिर 7,50,168 Social and Relationship Individuals were provided better access to affordable health care and preventive and promotive information 230 □ Health promotional activities are carried out in and around CHCs, communities, and institutions that are far from CHC through medical camps or health education and awareness talks for vulnerable populations such as children, adolescents, differently abled children, pregnant women, parents, and senior citizens or specific cohorts with similar needs. Health awareness for adolescents, blood donation camps, and care and counselling for differently abled children are also provided at some of the centres Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial D DURGA Statements Enhancing Infrastructure at Schools L&T builds Government schools, provides furniture, sets up and equips laboratories and libraries, digitises the classrooms, refurbishes classrooms and playgrounds, repairs buildings, and builds compound walls, toilet blocks and drinking water stations in resource-poor public schools to ensure a conducive learning environment. Supplies like uniforms, textbooks, notebooks, and sports kits are provided to underprivileged students in Government and unaided low-income schools in rural and tribal villages. HEALTH L&T's CSR initiative in health focusses on improving community health by delivering preventive, curative, and promotive healthcare services to the underprivileged. Operating through Community Health Centres (CHCs) and Mobile Health Units (MHUS) in urban and rural areas of Gujarat, Maharashtra, and Tamil Nadu, L&T reaches out to marginalised population, enhancing access, infrastructure, and quality of care. Primary healthcare interventions include three verticals: Community Health Centres, Specialty services (operative care, dialysis and Antiretroviral Therapy [ART]), and Outreach Programmes. Coimbatore Health Centr LARSEN & TOUBRO 229 LARSEN & TOUBRO □ Community Health Centres provide access to maternal, child, and family welfare, pediatric and general healthcare, and Dialysis & Antiretroviral Therapy (ART) □ Mobile Health Units (MHUS) and health camps for school children, women, and the elderly from underprivileged communities, the aim of which is to provide easy and better access to people in remote villages WEZEE 1800 22 1951 Reports LARSEN & TOUBRO technology and innovation, new technology-based skill- training courses are introduced in solar PV technician skills, OFC, and CCTV installation and maintenance. Digital training, digital study material, micro-learning modules on mobile apps, augmented reality/virtual reality training, safety training, quality standards training, and soft skills training are all essential components of the skill-training offerings. Additionally, all courses undergo periodic online assessments. Nine CSTIs operational at: Kancheepuram, Tamil Nadu; Panvel, Maharashtra; Pilkhuwa, Delhi; Jadcherla, Telangana; Cuttack, Odisha; Attibelle, Karnataka; Chacharwadi, Gujarat; Hyderabad, Telangana; and Serampore, West Bengal. Two new Skills Hubs added at Siddipet in Telangana and Mayurbhanj in Odisha. 10,974 Youth completed various courses at these CSTIs State-of-the-Art Skill Training Hub in Odisha Marking the beginning of a new chapter in L&T's CSR Skilling initiatives, a state-of-the-art Skill Training Hub was inaugurated by the Honourable President of India, Smt. Droupadi Murmu, at her hometown Pahadpur, Mayurbhanj in Odisha, in November 2023. The objective of the Skills Hub is to equip the underprivileged youth in the region with new-age construction skills like use of AR/VR for safety, simulators (haptic technology) and impart training on life skills and personality development, thus empowering them to become self-reliant, as well as exposing them to a canvas of opportunities far beyond their immediate surroundings. DISCOVER YOUR M LEARN A S This facility, built by L&T across a land parcel of five acres, is equipped with contemporary infrastructure, featuring an administrative-cum-institute building, a multipurpose hall, an e-learning hall, a digital training room (equipped with AR/VR technology to enhance the learning experience), separate hostels for boys and girls (each accommodating 120 individuals), dining facilities, practice yards for various trades, and a dedicated workshop for learning pipe welding. The facility has a capacity to train 800-1000 people annually. 233 234 Powering Up: Abhishek Kumar Ojha's Rise from Unemployment to Supervision Mr. Abhishek Kumar Ojha hails from Saran, Bihar. His family's primary source of income was from farming, earning around ₹ 1.5 lakh annually. Before his training, Abhishek was struggling to find stable work in his hometown. He learned about CSTI Pilkhuwa from his friend, who had successfully completed training there and was earning well. Motivated by his friend's success, Abhishek enrolled in the Electrician Training Programme at CSTI Pilkhuwa and completed his two-month training. Through CSTI's placement assistance, he secured a regular job at a construction site at Saharanpur, and soon, he was promoted to Supervisor in the Execution department. Currently, he earns a fixed salary of 16,625, a significant improvement from his previous unemployment status. Abhishek believes that CSTI's comprehensive training and support have transformed his life and opened doors to a brighter future. Social and Relationship 231 L&T's CSR initiatives have long emphasised skill development to foster inclusive growth. The Company provides vocational training and skill-building activities to equip unemployed youths with employable skills. Through its Construction Skills Training Institutes (CSTIs) and Skills Hubs located across India, L&T offers free residential training in high-demand trades in the construction industry, such as formwork, carpentry, masonry, and plumbing. With an emphasis on Skill Development LARSEN & TOUBRO Reports Statements Arun (name changed), a 15-year- old boy, relocated to Mumbai from Uttar Pradesh with his family following his mother's untimely passing. He was diagnosed with Tuberculosis (TB) and HIV, transmitted during his birth from his mother. Despite initial reluctance, compounded by family misinformation about HIV status, the boy eventually embraced treatment, thanks to the dedicated efforts of community health workers and counsellors at the ART Centre. Through persistent education and support, he now adheres to his Antiretroviral Therapy (ART), underscoring the role of compassionate healthcare in overcoming adversity and promoting well-being for people living with HIV. 232 MOBILE HEALTH UNIT GENERAL MEDICAL CAMP WESTRIC TRUST Social and Relationship Capital From Adversity to Adherence: A Teen's Journey with TB and HIV Vision Restored: Angammal's Journey from Darkness to Light Mrs. Angammal, a 64-year-old woman, residing in Malumichampatti village, Coimbatore, is under immense financial strain. During one of her visits to Mobile Health Unit (MHU) camps for routine check-ups, Angammal expressed concerns about her deteriorating vision to the MHU doctor. Recognising the severity of her condition, she was referred to the Vision Centre at L&T Health Centre, where she was diagnosed with cataracts in both eyes and followed by free cataract surgery. With her sight regained, Angammal now leads a fulfilling life, actively contributing to her family's well-being. Her story stands as a testament to the transformative impact of accessible healthcare, providing hope and opportunity to those in need. Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial 11 2. Name of the Stock Exchange(s) where shares are listed 1. BSE Limited Prior To Previous Year 10 31-03-2022 01-04-2021 31-03-2024 End Date Start Date 01-04-2022 Previous Year 12 Financial Year 31-03-2023 01-04-2023 Email of Contact Person National Stock Exchange of India Limited +91 22 61238639 Date of start of Financial Year pradeep.panigrahi@larsentoubro.com Dr. Pradeep Panigrahi, Head Corporate Sustainability Type of assurance obtained 15 Name of assurance provider 14 disclosures under this report made on a standalone basis (i.e. only for the entity) or on a consolidated basis (i.e. for the entity and all the entities which form a part of its consolidated financial statements, taken together). Reporting boundary - Are the Contact Number of contact person Name of contact person Name and contact details (telephone, email address) of the person who may be contacted in case of any queries on the BRSR report 274.93 Crore Paid-up Capital 13 9 3 www.larsentoubro.com 1 DETAILS OF THE LISTED ENTITY I. SECTION A: GENERAL DISCLOSURES BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORTING Business Responsibility & Sustainability Reporting Listed Entity LARSEN & TOUBRO 41.24 16.97 Economic Value Retained 1.37 1.51 The disclosure under this report is made on a standalone basis. 241 2 Name of the Listed Entity Year of incorporation +91 22 67525656 L&T House, Ballard Estate, Mumbai- 400001, Maharashtra L&T House, Ballard Estate, Mumbai- 400001, Maharashtra infodesk@larsentoubro.com 07-02-1946 Larsen & Toubro Limited Corporate address Registered office address Corporate Identity Number (CIN) of the Website 8 Telephone 7 E-mail 6 5 4 L99999MH1946PLC004768 Deloitte Haskins & Sells LLP % (B/A) 242 75 turnover % of Construction and maintenance of motorways, streets, roads, other vehicular and pedestrian ways, highways, bridges, tunnels and subways Construction of buildings carried out on own-account basis or on a fee or contract basis 42101 15 4210 4 41001 4100 410 3 Manufacture of parts and accessories for machinery/equipment used by construction and mining industries 421 6 % of total turnover contributed 3 Community Investments (CSR) telecommunication and transmission lines 14 2 Construction/erection and maintenance of power, Construction and maintenance of power plants 42201 42202 4220 422 5 Construction and maintenance of railways and rail-bridges 42102 29 13 6 28246 Reasonable Assurance for Core KPIs 2824 2 Infrastructure Projects 1 Description of Main Activity S. No. 16. Details of business activities (accounting for 90% of the turnover): Statements 2 Reports Statutory Integrated Report Management Discussion and Analysis Corporate Overview II. PRODUCTS/SERVICES Integrated Annual Report 2023-24 Financial Energy Projects 3 Hi-Tech Manufacturing Manufacture of nuclear reactors, except isotope separators and auxiliary plant for use with steam generators Product/Services 25132/33/39 2513 251 1 Sub Class Class Group S. No NIC Code 17. Products/Services sold by the entity (accounting for 90% of the entity's turnover): Design, manufacture/construct, supply, revamp/retrofit of (a) Heavy Engineering business covering custom designed, engineered critical equipment and systems to the process plant, nuclear energy and green hydrogen sectors and (b) Precision Engineering & Systems covering marine and land platforms including related equipment & systems; aerospace products & systems; precision and electronic products and systems for defence, security, space and industrial sectors Engineering and Construction of (a) Building and Factories, (b) Transportation Infrastructure, (c) Heavy Civil Infrastructure, (d) Power Transmission & Distribution, (e) Water & Effluent Treatment and (f) Minerals and Metals EPC/turnkey solutions in (a) Hydrocarbon business covering Oil and Gas industry from front-end design through detailed engineering, modular fabrication, procurement, project management, construction, installation and commissioning, (b) Power business covering Coal-based and Gas-based thermal power plants including power generation equipment with associated systems and/or balance-of-plant packages and (c) EPC solutions in Green Energy space Description of Business Activity 282 59.50 18 Payments to Exchequer 58 L&T Technology Services Poland SpoÅ‚ka Z Subsidiary 73.74 92 No 73.74 No 59 L&T Technology Services Pte. Ltd. (Formerly known Subsidiary 73.74 9. No as Graphene Solutions Pte. Ltd.) OgraniczonÄ... OdpowiedzialnoÅ›ciÄ... 60 Subsidiary 57 L&T's standalone financials reflect the performance of the Infrastructure Projects segment, the Energy Projects segment (comprising Hydrocarbon, Power and Green Energy), the Hi-Tech Manufacturing segment (comprising Heavy Engineering and Precision Engineering & Systems), and the 'Others' segment (includes Realty, Construction & Mining Machinery, Rubber Processing Machinery, Smart World & Communication [reflects residual portion], E-commerce/Digital platforms and Data Centers). L&T Aviation Services Private Limited Subsidiary 100.00 No 42204 L&T Technology Services LLC L&T Capital Company Limited Capital 56 L&T Technology Services Limited Subsidiary 73.74 No & Subsidiary 60 L&T Technology Services (Shanghai) Co. Ltd. Subsidiary Report 100.00 21 L&T Construction Equipment Limited Subsidiary 100.00 Subsidiary 22 Joint Venture 51.00 23 L&T Electrolysers Limited Subsidiary 100.00 L&T Deccan Tollways Limited * 20 L&T Community Welfare Association ^ 51.00 Joint Venture 73.74 No Integrated Annual Report 2023-24 S. Name of the Company (A) No. Corporate Overview Management Integrated Statutory Discussion and Analysis 100.00 No 19 L&T Chennai Tada Tollways Limited * Key Highlights of FY 2023-24 The Company successfully completed the first-ever buyback of 3,12,50,000 equity shares at a price of 3,200 per equity share through the tender route, with a total cash outflow of ~12,280 crore (including tax on buyback and expenses), resulting in extinguishment of 2.2% of the equity share capital The sale of the carved-out business of the Smart World and Communication (SWC) business unit of the Company to L&T Technology Services Limited (LTTS) was concluded on April 01, 2023 L&T concluded the sale of its stake in L&T IDPL on April 10, 2024, to an infrastructure fund, managed by Edelweiss Alternative Asset Advisors Limited Total Income Economic Value Generated Description Community Investments (CSR) Interest 922.27 FY 2023-24 1,336.40 Payments to Exchequer 41.24 FY 2022-23 16.97 FY 2023-24 Data Value generated - Value distributed = Value retained 'Excluding exceptional items FY 2022-23 1,162.30 Manufacturing, Construction 1,068.65 33.74 46.92 Dividend 21.25 24.06 Interest Distributed of Capital Economic Value Payments to Providers 82.93 88.59 Employee Wages and Benefits and Operating Expenses 922.27 Dividend 89.71 Employee Wages and Benefits 82.93 Report Discussion and Analysis Financial Statutory Integrated Management Reports Corporate Overview A. M. Naik Heavy Engineering Complex, Hazira, Gujarat 240 The Board of Directors has recommended a final dividend of 28 per equity share for the approval of the shareholders. In addition, during the year, the Company paid a special dividend of 6 per equity share ◉The buoyancy in customer collections and advances improved operational cash flows □ Revenue registered growth of 14%, reflecting improved execution momentum from the opening order book □ Order Inflow achieved a healthy growth of 14% y-o-y basis, driven by the increased proportion of international orders (at 35%), mainly due to higher ordering activity witnessed in GCC countries Performance Summary for FY 2023-24 Integrated Annual Report 2023-24 Statements Economic Value Generated and Distributed¹ [in Bn] Value Generated 1,068.65 88.59 24.06 33.74 21.25 46.92 59.50 1.37 89.71 1.51 FY 2022-23 FY 2023-24 Value Distributed 1,162.3 FY 2022-23 1,336.4 FY 2023-24 Total Income Manufacturing, Construction and Operating Expenses Construction and maintenance of water main and line 2,079 connection, water reservoirs including irrigation system (canal) Construction and repair of sewer systems including sewage disposal plants and pumping stations 1.8 0 1.8 Not tracked V. HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES (INCLUDING JOINT VENTURES) 23. (a) Names of holding / subsidiary / associate companies / joint ventures 9.5 S. No. Venture 1 Ahmedabad-Maliya Tollway Limited * Joint Venture 51.00 Name of the Company (A) Holding/ Subsidiary/ 0 Permanent Workers Total Male Female Total Permanent Employees 11.5 9.5 14.0 11.8 20.1 12.5 14.3 20.6 14.7 11.7 Associate/Joint % of shares held by the listed entity Does the entity indicated at column (A), participate in the Business Responsibility initiatives of the listed entity? (Yes/No) 100.00 No 6 Bhilai Power Supply Company Limited Subsidiary 99.90 Subsidiary No Bluefin Solutions Sdn. Bhd. Subsidiary 68.60 No 8 Business Park (Powai) Private Limited 7 Bangalore Spectrum Techpark Private Limited 5 No No 2 Avenue Techpark (Bangalore) Private Limited Subsidiary 100.00 No 3 Bangalore Fortune Techpark Private Limited Subsidiary 100.00 No 4 Bangalore Galaxy Techpark Private Limited Subsidiary 100.00 Female Male Total Female 6.7 DIFFERENTLY ABLED WORKERS 4. Permanent (F) 15 15 3 100 0 5. Other than Permanent (G) 13 13 100 0 93.3 42 45 Permanent (D) 45 42 93.3 3 6.7 2. Other than Permanent (E) 0 0 0 0 0 3. Total differently abled employees (D + E) 0 Subsidiary 0 Total differently abled workers (F + G) Key Management Personnel 2 The Chairman & MD and CFO are included in the Board of Directors. 22. Turnover rate for permanent employees and workers No. and percentage of Females No. (B) 1 0 Board of Directors 2 % (B/A) 0 FY 2023-24 [values in %] FY 2022-23 [values in %] FY 2021-22 [values in %] Particulars Male 5.9 1 17 Total (A) 28 28 100 0 0 Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Report Statutory Reports Financial Statements 21. Participation/Inclusion/Representation of women Particulars 6. 100.00 No 9 EMPLOYEES % (C/A) Female No. (C) % (B/A) No. (B) No 1. Total (A) Male S. a. 244 Employees and workers (including differently abled): 20. Details as at the end of Financial Year: Particulars 1 Permanent (D) 52,224 48,019 92.2 52,812 57,265 Total employees (D + E) 3. 4.9 248 95.1 4,793 5,041 Other than Permanent (E) 2. 8.1 4,205 91.9 IV. EMPLOYEES 4,453 The Company's primary businesses are EPC projects in infrastructure and energy and hi-tech manufacturing of equipment and process for industries. Government (sovereign, sub-national, local) and related entities (govt. owned/ controlled corporations) are the largest clients of the Company. Other clients are private companies, including foreign companies, in various sectors and industries. What is the contribution of exports as a percentage of the total turnover of the entity? 21% 19. Markets served by the entity: International Location National 18. Number of locations where plants and/or operations/offices of the entity are situated: III. OPERATIONS LARSEN & TOUBRO a. 243 Construction and maintenance of industrial facilities such as refineries, chemical plants, etc. 42901 4290 429 60 13 13 Number of locations Location National (No. of States) International (No. of Countries) C. b. Pan India 64 Number 13 13 46 28 Total Number of offices Business Responsibility & Sustainability Reporting 0 18 Number of plants A brief on types of customers 42205 7.8 4. 13 Graphene Solutions Taiwan Limited Subsidiary 73.74 No 14 No Hydrocarbon Arabia Limited Company 60.00 No 15 Hi-Tech Rock Products & Aggregate Limited Subsidiary 100.00 Joint Venture 73.74 Subsidiary Graphene Solutions Sdn. Bhd. Chennai Nova Techpark Private Limited Subsidiary 100.00 No 10 Chennai Vision Developers Private Limited Subsidiary 100.00 No 11 Corporate Park (Powai) Private Limited Subsidiary 100.00 No 12 No WORKERS 16 Joint Venture 2,807 99.2 3,45,287 3,48,094 0.3 6 0.8 99.7 24 Total workers (F + G) 6. Other than Permanent (G) 5. Permanent (F) 2,073 3,50,173 3,47,360 99.2 51.00 No 17 % (C/A) No. (C) No. (B) Total (A) S. No Particulars Female Male Differently abled employees and workers: 1 Other than permanent employees comprise Fixed Term Employees (FTEs). 'Permanent' workers include only those workers who are employed for full-time or part-time work for an indeterminate period with the Company. 'Other than Permanent' workers include workers on third-party roll and contractual categories. b. 0.8 2,813 Kudgi Transmission Limited * L&T Energy Green Tech Limited (Formerly known as Subsidiary 36 100.00 Nielsen & Partner Pty. Ltd. Subsidiary 68.60 2 2 2 2 22 은은 은은 No No No No No 100 Nielsen+Partner Pte. Ltd. Subsidiary 68.60 No 101 Nielsen+Partner Unternehmensberater GmbH Subsidiary 104 Prime Techpark (Chennai) Private Limited No 37.74 Joint Venture PNG Tollway Limited * 99 103 51.00 Joint Venture 102 Panipat Elevated Corridor Limited * No 68.60 Subsidiary No 100.00 Subsidiary Nabha Power Limited 93 Nielsen+Partner Unternehmensberater AG) 68.60 Subsidiary LTIMindtree Switzerland AG (Formerly known as 22 LTIMindtree (Thailand) Limited (Formerly known as Subsidiary Nielsen & Partner Company Limited) 92 Subsidiary LTIMindtree Spain SL (Formerly known as L&T Information Technology Spain SL) 91 (Pty) Limited] No Does the entity indicated at column (A), participate in the Business Responsibility initiatives of the listed entity? (Yes/No) 68.60 100.00 68.60 LTI Mindtree UK Limited (Formerly known as Larsen Subsidiary & Toubro Infotech UK Limited) 98 100.00 Subsidiary Millennium Techpark (Chennai) Private Limited 97 56.67 94 Subsidiary 96 68.60 Subsidiary LTIMindtree USA Inc. (Formerly known as Lymbyc Solutions Inc.) 95 68.60 LTH Milcom Private Limited 47.73 No PT. Larsen & Toubro Associate 17.12 No 115 International Seaports (Haldia) Private Limited % Associate 14.25 No 116 L&T Camp Facilities LLC Associate 49.00 No 117 Magtorq Private Limited Associate 42.85 No 118 Magtorq Engineering Solutions Private Limited Associate Subsidiary by virtue of control over composition of Board of Directors. &These subsidiaries have a separate BRSR. + % Associate of a subsidiary company under Companies Act, 2013. # Wholly owned subsidiary of the Company w.e.f. December 27, 2023. $ L&T Finance Limited, L&T Infra Credit Limited and L&T Mutual Fund Trustee Limited was merged with L&T Finance Holdings Limited. Thereafter, the name of L&T Finance Holdings Limited was changed to L&T Finance Limited w.e.f. March 28, 2024. ^ Subsidiary as per Companies Act, 2013. 114 Grameen Capital India Private Limited % *Sold off w.e.f. April 10, 2024. No 은은 No 50.00 119 Larsen & Toubro Qatar & HBK Contracting Co. WLL® Associate 39.28 In process of Liquidation. No 50.00 Associate 109 Syncordis Sarl, France 108 Syncordis Limited, UK No 51.00 Joint Venture Rewin Infrastructure Limited * Subsidiary 107 75.50 Joint Venture 106 Raykal Aluminium Company Private Limited No 100.00 Subsidiary No 105 68.60 Subsidiary 113 Gujarat Leather Industries Limited Ⓡ No 50.00 112 Indiran Engineering Projects and Systems Kish (LLC) Joint Venture No 51.00 No Joint Venture No 51.00 Joint Venture 110 Vadodara Bharuch Tollway Limited * No 68.60 111 Watrak Infrastructure Private Limited * % of shares held by the listed entity Associate/Joint Subsidiary/ Subsidiary 65.00 72 Larsen & Toubro Saudi Arabia LLC Subsidiary 100.00 73 Larsen & Toubro T&D SA (Pty) Limited Subsidiary 72.50 74 GH4India Private Limited Joint Venture 33.33 75 Larsen & Toubro Qatar LLC @+ Subsidiary LH Residential Housing Private Limited 77 No No No No Larsen & Toubro Oman LLC No 은은 은은 은은 75.00 Subsidiary Larsen Toubro Arabia LLC 76 49.00 No 71 Contracting Company (With Limited Liability)+ No Larsen & Toubro Electromech LLC 67 No 30.00 Subsidiary Larsen & Toubro (East Asia) Sdn. Bhd.+ Subsidiary 66 100.00 Subsidiary L&T Valves USA LLC 65 No 100.00 No Subsidiary 70.00 68 No 은은 49.00 Subsidiary Larsen & Toubro Kuwait Construction General 70 No 100.00 Larsen & Toubro International FZE 69 No 70.00 Subsidiary Larsen & Toubro Heavy Engineering LLC Subsidiary 100.00 No 78 68.60 LTI Mindtree S.A. (Formerly known as Syncordis S.A. Subsidiary Luxembourg) 88 68.60 LTIMindtree PSF S.A. (Formerly known as Syncordis Subsidiary PSF S.A.) 87 89 68.60 86 as LTI Middle East FZ-LLC) 68.60 Subsidiary LTIMindtree Middle East FZ-LLC (Formerly known 85 LTI Mindtree Norge AS (Formerly known as Larsen & Subsidiary Toubro Infotech Norge AS) 68.60 LTIMindtree, Sociedad De Responsabilidad Limitada Subsidiary De Capital Variable (Formerly known as L&T 2 2 2 2 2 2 Holding/ Subsidiary LTI Mindtree South Africa (Pty) Limited [Formerly known as Larsen and Toubro Infotech South Africa 90 Venture Name of the Company (A) 68.60 S. No. LARSEN & TOUBRO 248 247 Infotech S. De. Rl. De. Cv.) No No Business Responsibility & Sustainability Reporting Integrated Annual Report 2023-24 Subsidiary 84 68.60 Subsidiary LTI Mindtree Financial Services Technologies Inc. (Formerly known as L&T Infotech Financial Services Technologies Inc.) 80 No No No 은은 Subsidiary LTI Mindtree Canada Limited (Formerly known as Larsen & Toubro Infotech Canada Limited) 79 100.00 Subsidiary LH Uttarayan Premium Realty Private Limited 68.60 LTIMindtree LLC (Formerly known as Larsen & Toubro Infotech LLC) 81 Subsidiary No & 68.60 Subsidiary LTIMindtree Limited (Formerly known as Larsen & Toubro Infotech Limited) 83 Information Technology Services (Shanghai) Co. Ltd.] LTI Mindtree GmbH (Formerly known as Larsen & Toubro Infotech GmbH) (Shanghai) Co. [Formerly known as L&T 68.60 Subsidiary LTI Mindtree Information Technology Services 82 No 68.60 No L&T Power Limited) DIFFERENTLY ABLED EMPLOYEES 51.00 51.00 Joint Venture L&T Samakhiali Gandhidham Tollway Limited * 48 100.00 Subsidiary L&T Realty Developers Limited 47 51.00 Joint Venture L&T Rajkot-Vadinar Tollway Limited * 46 100.00 Subsidiary L&T Power Development Limited 45 100.00 Subsidiary L&T Parel Project Private Limited 44 L&T Sapura Offshore Private Limited) No No 은은 은 100.00 Subsidiary L&T Offshore Private Limited # (Formerly known as zzzzz No No No L&T Special Steels and Heavy Forgings Private 54 100.00 Subsidiary L&T Semiconductor Technologies Limited 53 No 100.00 Subsidiary L&T Seawoods Limited 52 No 50.01 43 Joint Venture 51 No 60.00 Joint Venture L&T Sapura Shipping Private Limited 50 No L&T Howden Private Limited Joint Venture L&T Sambalpur - Rourkela Tollway Limited * 49 No No L&T-Sargent & Lundy Limited 100.00 Subsidiary L&T Network Services Private Limited 51.00 Joint Venture L&T Infrastructure Development Projects Limited * 35 Limited No 65.86 Subsidiary L&T Infra Investment Partners Trustee Private 34 No 9. 65.86 1. Subsidiary 33 known as Larsen & Toubro Atco Saudi LLC) No No No No No No 은은 은은 은은 100.00 Subsidiary L&T Hydrocarbon Saudi Company LLC (Formerly 32 L&T Infra Investment Partners Advisory Private Limited Joint Venture L&T Interstate Road Corridor Limited * 51.00 42 70.00 Subsidiary L&T Modular Fabrication Yard LLC 41 No 51.00 Joint Venture L&T-MHI Power Turbine Generators Private Limited 40 No 51.00 Joint Venture Joint Venture L&T-MHI Power Boilers Private Limited No 99.99 Subsidiary L&T Metro Rail (Hyderabad) Limited 38 No No No 은은 은 51.00 Joint Venture L&T MBDA Missile Systems Limited 37 39 74.00 은은 No Subsidiary 65.86 28 L&T Geostructure Private Limited Subsidiary 100.00 29 L&T Global Holdings Limited Subsidiary 100.00 30 L&T Himachal Hydropower Limited Subsidiary L&T Financial Consultants Limited 100.00 Management Discussion and Analysis Integrated Report Statutory Financial Reports Statements Financial capital provides a strong foundation that facilitates risk mitigation in unavoidable/unforeseen circumstances and macro-economic unpredictability. With a record high Order Book, a strong Balance Sheet, a well-diversified business portfolio, and a proven track record of successful execution, the Company is in a position to navigate the current volatile business landscape and maintain a healthy equilibrium between risk and growth. Further, the Company's expansion into various emerging sectors as well as growth in the core business will contribute to the attainment of Lakshya 2026 goals and generate value for all the stakeholders. Key Highlights of FY 2023-24 14% Order inflow growth Strategy Linkage¹ SO-I SO-II Corporate Overview SO-III 27 No & 2 2 2 2 2 2 No No No No No No 245 246 LARSEN & TOUBRO Business Responsibility & Sustainability Reporting S. No. Name of the Company (A) Finance Holdings Limited) Venture L&T Energy Hydrocarbon Engineering Limited Subsidiary Holding/ Subsidiary/ Associate/Joint % of shares held by the listed entity 100.00 Does the entity indicated at column (A), participate in the Business Responsibility initiatives of the listed entity? (Yes/No) No (Formerly known as L&T-Chiyoda Limited) 26 L&T Finance Limited $ (Formerly known as L&T Subsidiary 65.86 25 50.10 SO-IV SE-1 No 51.00 Joint Venture L&T Transportation Infrastructure Limited* 62 No 54.57 Subsidiary L&T Thales Technology Services Private Limited 61 Venture entity? (Yes/No) initiatives of the listed 63 Does the entity indicated at column (A), participate in the Business Responsibility 31 % of shares Associate/Joint Subsidiary/ Holding/ Financial Statements Reports 73.74 Subsidiary L&T Technology Services (Canada) Limited 55 Limited No held by the listed entity SO-V L&T Valves Arabia Manufacturing LLC 100.00 No SE-3 SDGs Impacted 8 DECENT WORK AND ECONOMIC GROWTH 9 INDUSTRY. INNOVATION M AND INFRASTRUCTURE Material Topics Business Ethics Climate Subsidiary Action Social Engagement and Impact 14% Revenue growth 50% Dividend Payout Ratio (incl. special dividend) 1 For details, refer to 'Business Model and Strategy' section. 239 LARSEN & TOUBRO Financial Subsidiary L&T Valves Limited 64 No Data Security, Privacy and Cyber Security Joint Venture Principle 2: Businesses should provide goods and services in a manner that is sustainable and safe ESSENTIAL INDICATORS Investments (Investments in related parties / Total Investments made) 2. including employees, workmen, vendor partners, clients and other personnel need to undergo compulsory safety training before entering the project site/plant/any other location. Safety related trainings are not covered in the table above. For details of trainings provided to the workers, refer to Q1 of this Principle. b) Sustainability and Responsible Business Practices: In FY 2023-24, the Company scaled up its awareness and training programmes for its supply chain partners on sustainability. Three online sessions were targeting the top 500 supply chain partners and around 410 participants joined these sessions. A two-hour module has been created covering topics such as fundamentals of sustainability, emerging regulatory landscape, BRSR principles, how the Company is incorporating sustainability in supply chain, ESG assessment being conducted by the Company and lastly, preparedness for the forthcoming years. Additionally, during ESG assessment conducted for the top 200 supply chain partners, handholding sessions were conducted to align them with the purpose, parameters, evidence required to complete the assessment. 4. 3. Business Responsibility & Sustainability Reporting LARSEN & TOUBRO 257 Commitment to Human Rights, Labour and the Society: Suppliers to support, respect and protect human and labour rights and make sure their organisation/entity is not complicit in any kind of abuses and/or violations. C. Ethical Integrity and Legality: Suppliers to demonstrate the highest standard of integrity, ethics and business conduct. Promote Environmental Sustainability: All suppliers to support a precautionary approach to environmental issues and undertake initiatives to promote better environmental responsibility. B. A. Does the entity have processes in place to avoid/ manage conflict of interests involving members of the Board? (Yes/No). If Yes, provide details of the same. Details of improvements in environmental and social impacts Replacing old equipment with new or higher energy efficiency or productivity; Trucks/vehicles using low emission fuel e.g., CNG trucks; solar PV modules for rooftop solar, solar powered equipment e.g., light masts, equipment for recycling waste or non-virgin materials into usable materials e.g., manufactured sand plants, RO treatment plant, sewage treatment plant, water flowmeters for monitoring, bio-digestor for canteen waste, facilities for skill training institutes 2.3% [3 Cr] 3.6% [68.7 Cr] FY 2022-23 FY 2023-24 5.7% [9.6 Cr] 3.3% [76.5 Cr] R&D Capex a. 2. 1. Percentage of R&D and capital expenditure (capex) investments in specific technologies to improve the environmental and social impacts of product and processes to total R&D and capex investments made by the entity, respectively. Statements The Company has processes for management of conflicts of interests involving members of the Board which may arise due to Directors joining the Boards of other companies, and even conflicts which could take place during normal business activities. The process allows the Directors to recuse themselves from the discussions pertaining to the conflict of interest. The Directors must exercise their responsibilities in a bona fide manner in the interests of the Company. They should not allow any extraneous considerations that may vitiate their exercise of objective independent judgment in the paramount interest of the Company and not abuse their position to the detriment of the Company for the purpose of gaining direct or indirect personal advantage. Any conflict of interest arising with the Board Members needs to be reported to the Chairman of the Audit Committee/Chairman of the Board. Reports Financial 67.58% 62.87% 6 Currently not estimated since purchases from trading houses are not tracked. LEADERSHIP INDICATORS 1. Awareness programmes conducted for value chain partners on any of the Principles during the FY: 256 Total number of awareness programmes Sr.no 1 held 3 Topics/principles covered under the training Basics of Sustainability, regulatory landscape and BRSR, L&T's policies and Code of Conduct focusing on health and safety, human rights and environment parameters, ESG maturity assessment conducted by the Company and its results, sharing of good practices on ESG % age of value chain partners covered (by value of business done with such partners) under the awareness programmes ~410 participants representing various supply chain partners; comprises -37% of L&T's purchase and work order by value The Company undertakes several initiatives to create awareness amongst its supply chain partners, contractors and sub-contractors on key issues related to the nine Principles of the National Guidelines for Responsible Business Conduct. The awareness programmes conducted can be broadly classified into two segments i.e. Safety and Sustainability: a) Safety: There are several training and sensitization sessions conducted for the contractual workmen working in the premises and project sites. This includes EHS induction, toolbox talks, training on use of protective gear, EHS training for front line supervisors, sub-contractors, any job specific trainings such as working at height, excavation, marine safety, emergency response, occupational health, material handling, tunnel safety, hot work, fire. Any individual Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Statutory Report Does the entity have procedures in place for sustainable sourcing? (Yes/No) L&T is committed to incorporating sustainability that encompasses its supply chain partners viz. vendors, contractors, service providers and distributors through a dedicated Green Supply Chain Policy and its Code of Conduct. Furthermore, L&T expects and urges its suppliers to introduce suitable processes, functions and management systems within their organisations that support such compliance and drive continuous improvement with regards to the requirements included in the Code of Conduct. This Code of Conduct guides all supply chain partners to engage in ethical, responsible and legal business practices in their operations and adhere to ESG standards. L&T expects the suppliers to comply with all applicable regulatory requirements and implement policies and procedures, and provide training, as deemed necessary within their organisation. The Code of Conduct is built on three pillars: P1 31.85% P2: SA8000 (key manufacturing facilities), ISO 14001, ISO 45001 P3: Factories Act, 1948, Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996, SA8000 (key manufacturing facilities), ISO 45001 P5: Factories Act, 1948, Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996, SA8000 (key manufacturing facilities) P6: ISO 14001, ISO 50001 P8: CSR disclosures pursuant to Section 135 of the Companies Act, 2013 P9: ISO 27001:2013 250 Integrated Annual Report 2023-24 Corporate Overview Management P1: SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 Discussion and Analysis Statutory Financial Reports Statements Disclosure Questions Policy and management processes 6. Performance of the entity against the Principles b. P2 Integrated Report Some of the standards, certifications, codes adopted by the Company are as follows: Yes, the Code of Conduct for the supply chain partners cover key aspects of the Company's policies applicable to the value chain partners. Furthermore, some of the other Company policies such as Whistleblowing Policy for Vendor and Channel partners as relevant are also extended to the supply chain partners. Most of the policies are implemented through procedures which are either incorporated in the policies or available as separate documents/SOPs/processes. SECTION B: MANAGEMENT AND PROCESS DISCLOSURE Disclosure Questions Policy and management processes 1. a. P 1 P2 P 3 Principles P4 P5 P6 P7 P 8 P 9 b. Whether your entity's policy/policies cover Yes, each principle and its core elements are covered by one or more policies of the Company. each principle and its core elements of the NGRBCs. (Yes/No) Has the policy been approved by the Board? (Yes/No) C. Web Link of the Policies, if available 2. Whether the entity has translated the policy into procedures. (Yes/No) 3. Do the enlisted policies extend to your value chain partners? (Yes/No) 4. Name of the national and international codes/certifications/labels/ standards (e.g. Forest Stewardship Council, Fairtrade, Rainforest Alliance, Trustea) standards (e.g. SA8000, OHSAS, ISO, BIS) adopted by your entity and mapped to each principle. Yes, the policies are approved by the Board/Board Committee/Executive Committee as applicable The policies are available at https://www.larsentoubro.com/corporate/about-It-group/corporate-policies/ P 3 The Company conducts materiality assessment to identify and prioritize the key material topics pertaining to ESG and understand the relative importance of these topics to the stakeholders and businesses. In FY 2021-22, the Company engaged with a diverse set of internal and external stakeholders to update its materiality matrix. The material topics, if addressed and strengthened can become a strength and if not, can pose a risk. For certain material topics, the focus is more on the potential risk and the approach taken by the Company to ensure that the risk does not materialize. This is outlined in the table in 'Understanding Materiality' section of Integrated Annual Report FY 2023-24. P4 P6 (g) Mission Zero Harm Target FY 2025-26 40% 50% [baseline year FY 2020-21] -25% [baseline year FY 2020-21] 1.5-2 million/yr 1.7 million 10% Achieved FY 2023-24 50% 9.2% -10% ~4 million 1.6 million 8.1% LTIFR for FY24: 0.04 (Employees) | 0.07 (Workers) Diversity ratio 5 The target was to impact 1.6 million beneficiaries by FY 2025-26. Since, the Company already attained its FY 2025-26 target during FY 2023-24, the target has been pushed further and the new target is to impact 1.7 million beneficiaries by FY 2025-26. Governance, leadership and oversight 7. Statement by director responsible for the business responsibility report, highlighting ESG related challenges, targets and achievements. L&T is progressing on various dimensions of ESG by strengthening policies and processes, improving systems, translating plans into action towards achieving targets, continuous monitoring and review and building capacity of the workforce through various channels. The Company has committed to achieve Carbon Neutrality by 2040 and Water Neutrality by 2035, and in-line with long term targets, the Company has taken interim targets up to FY 2025-26. The Company's overall GHG emission intensity reduced by 12.2% in FY 2023-24 (7.8 tCO₂e/ Cr in FY 2023-24 compared to 8.9 tCO2e/ Cr of the previous FY 2022-23) and this is in line with the reduction path up to FY 2025-26. Reduction in emission intensity was primarily driven by decrease in energy intensity by 15.9% in FY 2023-24. Emissions reduction would have been higher, had it not been for the challenges faced in increasing sourcing of renewable power, which stood at 9.2% (of electricity consumption) during the year. The Company's strategy towards achieving Carbon Neutrality is based on two key pillars - reducing fossil fuel consumption and increasing use of renewable energy in electricity consumption. With more than 700 sites, EPC projects present significant challenges in implementing these strategies owing to their temporary operations (typically 3-4 years) at any project site, open boundaries, and extensive spatial coverage, especially in the context of linear projects. The business units of the Company have identified and are implementing several initiatives to progress towards the targets. Furthermore, the Company has formed two high-level taskforces during the year to help increase renewable electricity sourcing and reduce diesel consumption. Biodiversity promotion is another vital area and the Company has set a target of 1.5-2 million saplings per annum. During the year, the Company planted around 4 million saplings through large scale plantation drives across the country. In recent past, the Company had planted 150 hectares of mangroves near the A. M. Naik Heavy Engineering Complex, Hazira, Surat in Gujarat, which continue to protect coastal villages from incursion of salt water and facilitate storage of blue carbon. The Company is exploring different options for tracking survival and growth of saplings. 251 252 LARSEN & TOUBRO Renewable energy (% of total electricity) is significantly lower than the short-term target due to the challenges faced in sourcing renewable energy by the Company. Issues faced for sourcing at project sites are unavailability of adequate area for installing solar modules, difficulties in getting green open access for temporary connections, developers' preference for long term power purchase agreements (10-15 years) and varying regulations and charges across the states. (f) CSR beneficiaries 5 (e) P7 P 8 P9 (a) (f) (g) (g) (a)(b)(c)(d) (a) (f) (g) (g) (a)(b)(c)(d) (e) specific commitments, goals, and targets along-with reasons in case the same are not met. # Parameter/Metric (a) Green Business portfolio (% of revenue) (b) Renewable energy (% electricity) (c) Emissions Intensity Reduction (d) Tree plantation P5 Business Responsibility & Sustainability Reporting 26. Overview of the entity's material responsible business conduct issues. Please indicate material responsible business conduct and sustainability issues pertaining to environmental and social matters that present a risk or an opportunity to your business, rationale for identifying the same, approach to adapt or mitigate the risk along-with its financial implications, as per the following format Supply Chain Partners: The grievances are primarily registered and redressed through a dedicated vendor management platform called Partner portal for contractual and Whistleblowing Policy for other than contractual grievances. Partner portal captures the contractual grievances such as administrative and statutory compliances, payment, invoicing, contractual clauses, material and services schedule and delivery, quality non-conformances, global geo-political concerns beyond the contract but affecting contract performance. Typically, in most cases, based on the priority, complexity and severity of the grievance, the resolution time may range from 30-45 working days. In cases of major disputes, the resolution time may be more than 45 days. The entire process entails continuous dialogue and feedback. For grievances other than contractual, the Company has formulated Whistleblower Policy for Vendors & Channel Partners with a view to provide a mechanism for vendors of the Company to express genuine concerns about unethical behaviour, improper practice, any misconduct, any violation of legal or regulatory requirements, actual or suspected fraud, without fear of punishment or unfair treatment. The Policy was also circulated to all registered vendors across the Company and is available at https://www.larsentoubro.com/corporate/about-It-group/corporate-policies/ complaints pending resolution Remarks web-link for grievance during the filed during the Number of complaints FY 2022-23 Number of complaints pending resolution Remarks filed at close of redress policy year the year year the year Communities Yes 0 0 0 at close of if Yes, then provide complaint is received whom VI. CSR DETAILS 24. CSR Details Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial Reports Statements Whether CSR is applicable as per Section 135 of Companies Act, 2013 Turnover (in Crore) Net worth (in Crore) Yes 1,26,236 64,416 VII. TRANSPARENCY AND DISCLOSURES COMPLIANCES 25. Complaints/Grievances on any of the principles (Principles 1 to 9) under the National Guidelines on Responsible Business Conduct: Grievance Redressal FY 2023-24 Stakeholder group from Mechanism in Place (Yes/No) Number of Number of complaints 0 The grievance redressal mechanism for employees and workers, community and customers are explained in Principle 3, 8 and 9 respectively. Investors 0 115 7 252 95 Partners Others Yes 62 52 23 18 Whistleblower complaints 18 3 Whistleblower complaints 3 Higher reported cases due to streamlining of complaints and grievances registration system viz HEERA, a bot based system incorporated in MS teams. Includes complaints related to salary, benefits, policies, portals, mediclaim, leave, work facilities. Complaints related to sexual harassment are addressed through the mechanism stated in the POSH Policy and respective Internal Complaints Committee. 4 Higher reported cases due to increased awareness amongst stakeholders. Though the Company does not have a formal grievance redressal policy/ies, there are detailed procedures in place for addressing the grievances across different stakeholders. Details of the grievance redressal mechanism are elucidated below: Investors and Shareholders: The Company has designated an exclusive e-mail id IGRC@Larsentoubro.com, to enable investors and shareholders to register their grievances, if any. Other mechanisms to receive the grievances are physical letters to the registered office address, e-mails to the Registrar and Transfer Agent (RTA), KFin Technologies Ltd. (KFintech) on their designated email id einward.ris@kfintech.com, physical letters or telephone call or physical visit to RTA, designated grievance redressal facilitation platform of SEBI - SCORES, from Stock Exchanges i.e. BSE & NSE through their online portals, letters received from Registrar of Companies (ROC) and complaints received on Smart ODR Portals of BSE and NSE. Each email received through IGRC ID is responded to wherever the details are readily available with the Company. All grievances received by RTA are forwarded to the Company and the Company can view scanned copies of these emails and replies in Karisma system (KFintech software portal). The Company regularly monitors Inward Report which is available on Karisma Portal of KFintech to ensure that Service Level Agreement (SLA) timelines are properly followed for closure of queries/complaints received. Complaints received through stock exchanges, regulators, ROC are monitored and the responses are uploaded on the respective regulators' portal. The Company regularly checks the status of closure of these complaints. SLA for resolving all the queries as well as complaints is 30 days. On a quarterly basis, the Company submits a report to Stock Exchanges providing details of complaints received and redressed. These details also placed with the Stakeholders Relationship Committee and the Board on a quarterly basis, for their information. 249 LARSEN & TOUBRO Business Responsibility & Sustainability Reporting 4 59 Yes Value Chain 0 0 0 (other than shareholders) Shareholders Yes 0 Employees and Yes 510 05 0 0 0 5 211 0 workers 3 Customers Yes 32 10 Yes The Company is focusing on reducing water consumption intensity for achieving Water Neutrality. This is driven through initiatives such as water use efficiency, recycling of wastewater, rainwater harvesting and use of treated wastewater from municipal corporations. The Company also undertakes significant water conservation and ground water recharge through projects under the Company's CSR programmes across different locations of the country. The Company has initiated steps for a third-party assessment to estimate the positive impact of these CSR initiatives. Recognizing the importance of Circular Economy on the businesses and the environment, the Company is taking numerous steps, including use of recycled or non-virgin material. In FY 2023-24, approximately 32% of input material was eco-friendly and non-virgin material. L&T Construction Research and Testing Centre (LTCRTC) in Chennai, which is recognized by the Department of Scientific and Industrial Research (DSIR) and accredited by the National Accreditation Board for Testing and Calibration Laboratories (NABL), continues to experiment with new material for replacing traditional material used in construction work. In FY 2023-24, Research & Testing Centre has achieved some encouraging results with design of mixes with low embodied carbon materials e.g., glass fibre textiles and with use of industrial by-products e.g., steel slag. (Further details are provided in Intellectual Capital section of the Integrated Annual Report FY 2023-24.) During the year, the Company has taken substantial effort and actions to handhold and build awareness of the supply chain partners on ESG. The Company has started assessing its supply chain partners on ESG parameters starting with 25 in FY 2022-23 and 200 in FY 2023-24. The assessment in the coming years will be more comprehensive and structured for improving ESG orientation as well as performance of the suppliers. The Company had set a target to achieve 40% of total revenue from Green Business by FY 2025-26 and has already exceeded by achieving 50% in FY 2023-24. Green Business is centred around clean mobility, clean energy, water and sanitation infrastructure and other related areas. The Company has been ranked third globally in 'Top 200 Environmental Firms' list consecutively in 2022 and 2023 by Engineering News Record (ENR), a reputed publication for the construction industry worldwide. KMPS Employees Workers FY 2023-24 0 0 0 0 FY 2022-23 0 Directors 0 0 255 6. LARSEN & TOUBRO Details of complaints with regard to conflict of interest: Number of complaints received in relation to issues of Conflict of Interest of the Directors Number of complaints received in relation to issues of Conflict of Interest of the KMPS 7. Business Responsibility & Sustainability Reporting 0 5. Number of Directors/KMPs/employees/workers against whom disciplinary action was taken by any law enforcement agency for the charges of bribery/ corruption: Yes, the Company has a policy on anti-bribery and anti-corruption ('ABAC' policy) available at https://www.larsentoubro.com/corporate/about-lt-group/corporate-policies/. The Company is committed to complying with all applicable laws and regulations which govern the Company's operations across every location. It provides a guiding framework and covers various aspects such as, but not limited to, expected standard of behaviour, having appropriate controls, monitoring, reporting, training and awareness. This Policy is applicable to all employees working at all levels and grades of the Company, including the Board Members and Senior Managerial Personnel (Senior officers), employees, managers, executives, supervisors, workers and other equivalent grades of employees of the Company and fixed term contract employees. This Policy has also been extended to any other person associated with the Company and such person acting on behalf of the Company through the Code of Conduct for Suppliers (which includes Intermediaries including Consultants/Agents/Business Partners/Vendors). Furthermore, the Company has already adopted a Code of Conduct for Board of Directors and Senior Management, Code of Conduct for Supervisory, Executive and Officers, Code of Conduct for Suppliers (which includes intermediaries including Consultants/Agents/ Business Partners/Vendors), Whistle Blower Policy, Whistle-Blowers Policy for Vendor and Channel Partners' and other detailed procedures to ensure compliance and uphold the principles of ABAC policy. All forms of bribery and corruption are prohibited, and adequate measures are in place to prevent such instances. The Company maintains a policy of 'Zero Tolerance' of any practice that may be deemed to be corruption, either active or passive. Does the entity have an anti-corruption or anti-bribery policy? If yes, provide details in brief and if available, provide a web-link to the policy. NGRBC Principle Name of the regulatory/ enforcement Monetary Amount (In INR) Brief of the Case agencies/ judicial Has an appeal been preferred? (Yes/No) institutions No cases reported during the year Non-Monetary Name of the regulatory/ NGRBC Principle enforcement agencies/ judicial Brief of the Case Has an appeal been preferred? (Yes/No) institutions No cases reported during the year 3. 4. Imprisonment Punishment Of the instances disclosed in Question 2 above, details of the Appeal/ Revision preferred in cases where monetary or non-monetary action has been appealed. No cases have been reported during FY 2023-24. FY 2023-24 Number Compounding fee FY 2022-23 Number Purchases from top 10 trading houses as % of total purchases from trading houses Concentration of a. Sales to dealers / distributors as % of total sales Sales b. Number of dealers / distributors to whom sales are made Not applicable C. Sales to top 10 dealers/distributors as % of total sales to dealers / distributors C. Share of RPTS in Purchases (Purchases with related parties / Total Purchases) 3.26% 3.11% b. Sales (Sales to related parties / Total Sales) 1.23% 1.14% C. Loans & advances (Loans & advances given to related parties / Total loans & advances) 16.68% a. Not estimated Number of trading houses where purchases are made from b. Remarks 0 0 0 0 Provide details of any corrective action taken or underway on issues related to fines / penalties / action taken by regulators/ law enforcement agencies/ judicial institutions, on cases of corruption and conflicts of interest. No cases or complaints received in the above matters. 8. Number of days of accounts payables ((Accounts payable *365) / Cost of goods/services procured) in the following format: Number of day of accounts payables FY 2023-24 142 FY 2022-23 166 9. Open-ness of business Provide details of concentration of purchases and sales with trading houses, dealers, and related parties along-with loans and advances & investments, with related parties, in the following format: Parameter Metrics FY 2023-24 FY 2022-23 Concentration of Purchases 6 a. Purchases from trading houses as % of total purchases Remarks Settlement Penalty/ Fine Details of fines/ penalties /punishment/ award/ compounding fees/ settlement amount paid in proceedings (by the entity or by directors / KMPs) with regulators/ law enforcement agencies/ judicial institutions, in the financial year, in the following format (Note: the entity shall make disclosures on the basis of materiality as specified in Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and as disclosed on the entity's website): Performance against above policies and follow up action Compliance with statutory requirements of relevance to the principles, and rectification of any non-compliances Yes, the performance against policies is reviewed by the Board/Board Committees/Executive Committee on periodic basis. The Company complies with the extant regulations and principles as are applicable. Frequency (Annually/ Half yearly/ Quarterly/Any other - please specify) P 8 P 9 11. Has the entity carried out independent assessment/ evaluation of the working of its policies by an external agency? (Yes/No). If yes, provide name of the agency. P2 P3 P4 P5 P6 P7 P8 P9 The Company has over 350 global certifications across the businesses provided by third party audit agencies such as Deloitte Haskins & Sells LLP, DNV India, TUV-Nord, LRQA. These agencies conduct audits across businesses on standards such as ISO/IEC 27001 (Information Security Management System-ISMS), ISO 14001 (Environment Management System), ISO 45001 (Occupational Health and Safety Management System), ISO 9001 (Quality Management System), AS 9100 (Aerospace), SA8000 (Social Accountability Standard), ISO 29001 (Quality Management System for Oil & Gas Industry), ISO 50001 (Energy Management System), American Society of Mechanical Engineers (ASME), ISO 20000 (IT Service Management), HR Management-ISO 30400 Series, Innovation Management- ISO 50501, ISO 56000 Series, Project Management-ISO 10006, ISO 21500 Series, Risk Management-ISO 31000 Series, Governance-ISO 19600, ISO 37000 Series, Anti-Bribery Management-ISO 37001, ESG assurance – SSAE 3000. During these audits, components such as policies, processes, procedures, records, monitoring and review process are checked and verified by the third party. 12. If answer to question (1) above is "No" i.e. not all Principles are covered by a policy, reasons to be stated: P1 P7 P6 P5 The Company is focussed on providing equal opportunity, ensuring diversity and inclusion, safe workplace and wellbeing of its workforce. The Company has implemented multiple initiatives for safeguarding their health and safety. Skill upgradation as well as developing capabilities of the workforce for the future is a continuous thrust area for the Company. During the year, around 24,000 employees and 3,50,000 contract workmen have undergone training on health and safety. Several new initiatives were rolled out during FY 2023-24 to instil a high-performance work culture. For example, the Company launched Project NEEV (Nurture, Educate, Empower to create Value) to inculcate a culture of effective performance and continuous feedback. The gender diversity stands at 8.1% with a target to reach 10% by FY 2025-26. Over the last two years, the Company has maintained hiring of 30% women Graduate Engineer Trainee (GET) and Post Graduate Engineer Trainee (PGET) and is continuously ramping up the efforts towards diverse and inclusive workplace. Various campaigns were organized, celebrating PRIDE month and people with different abilities, to increase awareness on diversity beyond gender. With the intention of developing a pipeline of women leaders, 495 women employees were handpicked to participate in WINSPIRE series of Leadership Development Programs during the last few years, with a 142% rise in participation rate. Corporate Social Responsibility has been a primary focus of the Company, much before it became part of the legislation. The overarching theme for our CSR programme is to develop India's Social Infrastructure by focusing on water and sanitation, education, health and skill building. In FY 2023-24, CSR initiatives impacted 1.6 million lives, with a target to reach 1.7 million beneficiaries by FY 2025-26. The Company's Integrated Community Development Programmes (ICDP) initiated 10 years ago, helps in building resilience in rural communities, especially in remote water-scarce locations of Maharashtra, Tamil Nadu and Rajasthan covering an area of ~43,091 hectares. The Company is scaling up and replicating these models in other locations. In all ICDP locations, the water table has risen by an average of 8 meters from the baseline benefitting nearly 25,000 households. Through these consistent efforts, the Company aims to improve quality of life, reduce social inequalities, promote self-sufficiency, and empower individuals in vulnerable and marginalised communities. The Company is striving to ensure sustainable and inclusive growth. The Company believes in taking a balanced approach for creating enduring long-term value for its multiple stakeholders - customers, suppliers, business partners, shareholders, community, the society, and the planet. The Company is pursuing the path of purposeful progress with enthusiasm and optimism. Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Statutory Financial Report Reports Statements 8. 9. Details of the highest authority responsible for implementation and oversight of the Business Responsibility policy(ies). The Chairman & MD and the Board are the highest authority responsible for implementation and oversight of the Business Responsibility policy(ies). Does the entity have a specified Committee of the Board/Director responsible for decision making on sustainability related issues? (Yes/No). If yes, provide details. Yes, the Company's CSR & Sustainability Committee is responsible for decision making on sustainability related issues. For details of the composition, role and terms of reference, please refer to Annexure 'B' to the Board Report of the Integrated Annual Report FY 2023-24. 10. Details of Review of NGRBCs by the Company: Subject for Review P2 Indicate whether review was undertaken by Director / Committee of the Board / Any other Committee P1 P 3 P4 Questions P1 P2 P3 P4 Business, strategy, risk, regulatory 100 discussions, ESG, visit to site/operative plants and update of laws Employees other than BoD and KMPS Workers 5,766 1,32,843 The Company conducts numerous online and offline training led by internal or external faculty/expert throughout the year on key topics such as Safety, Code of Conduct, Prevention of Sexual Harassment, cybersecurity, diversity and inclusion, sustainability for employees across the Company. In addition, employees are provided need-based training as per their job and role requirement, covering aspects such as behavioural competency, leadership development, project management. The Company is also focussed on skill upgradation such as engineering/ designing software, artificial intelligence, machine learning, Behaviour Based Safety, data analysis and visualization, IoT, IS Standards and Codes. The contractual workforce undergoes numerous trainings which includes but not limited to, health and safety, equipment operation, handling of tools. and material, behaviour based safety, waste management, first aid, work at heights. 100 100 Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Statutory Financial Report Reports Statements 2. 6 d. Key Managerial Personnel 91 P5 P6 P7 P8 P9 The entity does not consider the Principles material to its business (Yes/No) The entity is not at a stage where it is in a position to formulate and implement the policies on specified principles (Yes/No) The entity does not have the financial or/human and technical resources available for the task (Yes/No) It is planned to be done in the next financial year (Yes/No) Any other reason (please specify) Not applicable 253 LARSEN & TOUBRO SECTION C: PRINCIPLE WISE PERFORMANCE DISCLOSURE Business Responsibility & Sustainability Reporting Principle 1: Businesses should conduct and govern themselves with integrity, and in a manner that is Ethical, Transparent and Accountable. ESSENTIAL INDICATORS 1. Percentage coverage by training and awareness programmes on any of the Principles during the financial year: Segment Board of Directors Total number of training and awareness programmes held 4 Topics/principles covered under the training and its impact Business, strategy, risk, Induction, ESG, visit to site/operative plants and update of laws % age of persons covered by the awareness programmes 254 The Company has adopted various methodologies for sustainable sourcing. Some are stated below: 5. Specific commitments, goals and targets set by the entity with defined timelines, if any. The supply chain partners were evaluated for sustainable sourcing wherein the Company checked their adherence to ISO 14001:2015, 45001:2018, SA8000 and any other related standards and frameworks. It is mandatory for supply chain partners to acknowledge the clauses and sign the Code of Conduct of Company, which includes commitment to environmental protection and conservation such as reduction of resource consumption, waste generation, pollution prevention; social aspects such as commitment to human rights, community engagement, ethics and various governance parameters. This is a mandatory step during vendor registration and onboarding process. • Integrated Annual Report 2023-24 258 Yes, in 2022, the Ministry of Environment, Forest and Climate Change (MOEFCC) made amendments to EPR Rules related to plastic waste, e-waste and battery waste. As a result, the coverage of the Rules was extended to importers who could generate plastic waste from packaging of imported materials, e-waste which could be generated from imported electronic or electrical items as well as battery waste which could be generated from imported batteries or equipment containing batteries. The Company has obtained registration as an importer under the EPR Rules for all three waste categories. To comply with EPR Rules as well as to improve the waste management system, the Company has improved its processes including conducting awareness sessions for the relevant departments/functions and onboarded service providers for meeting compliance requirement. Whether Extended Producer Responsibility (EPR) is applicable to the entity's activities (Yes/No). If yes, whether the waste collection plan is in line with the Extended Producer Responsibility (EPR) plan submitted to Pollution Control Boards? If not, provide steps taken to address the same. (d) Other waste: NA (c) Hazardous waste: NA (b) E-waste: NA The Company does not manufacture or sells any products which could be reclaimed at the end of life. However, at project sites and manufacturing facilities, the Company has put in place systems and processes for waste management i.e., segregation, recycling, reuse and disposal as applicable for category of waste and complying to the relevant regulatory requirements. Describe the processes in place to safely reclaim your products for reusing, recycling and disposing at the end of life, for Accounts for 32% of L&T procurement spend by value. what percentage of inputs were sourced sustainably? yes, The assessment in the coming years will be more comprehensive and structured for improving ESG orientation as well as the performance of the suppliers. Additionally, the awareness sessions will also be ramped up to bring the partners up to speed keeping in mind the increased scrutiny and regulatory requirements on the subject. The overall governance, oversight and review of the supply chain initiatives is undertaken by Material Council along with the supply chain management functions led by senior leadership and supported by Corporate Sustainability. Three awareness sessions were conducted targeting the top 500 supply chain partners during the year to orient them towards ESG requirements and expectation of the Company. The Company has also started assessing its supply chain partners on ESG parameters. It was initiated in FY 2022-23 with 25 partners and scaled up to top 200 (186 unique) in FY 2023-24. The assessment is based on the response and evidence provided to the Company on parameters related to the environment, human rights, CSR, health, safety and governance. (a) Plastics (including packaging): NA Number (C) % (F /A) % (E/A) % (D/A) % (C/A) % (B/A) Number Total Number Day Care facilities 8 Benefits 7 Benefits^ insurance Health insurance (A) Number (B) (D) Category Number (E) 100 Permanent Employees 52,224 Total 100 4,205 100 4,205 4,205 Female 17.2 (F) 8,255 0 Not applicable Paternity 48,019 100 48,019 48,019 Male 0 Maternity 259 % of employees covered by Re-Used Particulars FY 2022-23 FY 2023-24 Of the products and packaging reclaimed at end of life of products, amount (in metric tonnes) reused, recycled, and safely disposed, as per the following format: The data reported above is based on the procurement value as a percentage of total bulk material procured (fly ash, GGBS and cement). In projects related to infrastructure sector (contracts from the clients), IS or other relevant codes prescribe limits of using fly ash and GGBS based on concrete use and requirements of the structure. While the Company tries to maximize use of recycled (waste) materials, the design mix of concrete and approval for use of the same in the project is controlled by the clients. Note: Previously reported as 10.2% in FY 2022-23 was based on consumption quantity of fly ash and GGBS as a % of total bulk material (fly ash, GGBS and cement) 6.5 Recycled 8.7 FY 2023-24 Recycled or re-used input material to total material Fly ash and Ground Granulated Blast-furnace Slag (GGBS) in place of Cement by value Indicate input material Percentage of recycled or reused input material to total material (by value) used in production (for manufacturing industry) or providing services (for service industry). Not applicable. If there are any significant social or environmental concerns and/or risks arising from production or disposal of your products/services, as identified in the Life Cycle Perspective/Assessments (LCA) or through any other means, briefly describe the same along-with action taken to mitigate the same. Product portfolio constitutes ~6% of the Company's revenue. In the past, the Company has conducted LCA for certain products, please refer to BRSR of Integrated Annual Report FY 2022-23. FY 2022-23 Accident Safely Disposed Recycled 260 1. a. Details of measures for the well-being of employees: ESSENTIAL INDICATORS Principle 3: Businesses should respect and promote the well-being of all employees, including those in their value chains Business Responsibility & Sustainability Reporting LARSEN & TOUBRO 52,224 'Not applicable' for the Company; reason stated above in Q4. Re-Used Indicate product category The Company operates on the B2B model, and the product portfolio is ~6% of total turnover. Some of the key products include reactors and pressure vessels, heat transfer equipment, process plant internals, etc; primarily made from stainless steel, titanium and have a long life-cycle, in few cases, may be up to 35 years. The products or packaging of these products do not generate any material which could be reclaimed at the end of life. 5. Hazardous waste Not Applicable Not Applicable E-waste Plastics (including packaging) Safely Disposed Reclaimed products and their packaging materials (as percentage of products sold) for each product category. Reclaimed products and their packaging materials as % of total products sold in respective category 100 0 100 % (D/A) Number Number Number (D) % (C/A) Number (C) % (B/A) Day Care facilities % (E/A) Paternity Benefits Accident insurance Health insurance Total (A) Number (B) Category % of workers covered by b. Details of measures for the well-being of workers: Percentage calculated is based on the coverage of female employees only. Λ 8 Data is based on the coverage of creche facility i.e. available to the employees in a particular location and not as per usage of creche facility. Maternity Benefits^ 7 The Company does not have a paternity leave policy. % (F/A) (F) The Company continuously engages with its stakeholders to strengthen relationships, foster trust and thus enable the Company to be informed of their expectations, concerns as well as opportunities for value creation. A structured approach and process is in place for engaging with the stakeholders for identifying, prioritising and addressing their needs and concerns in a consistent and systematic manner. Below are a few instances of how stakeholder inputs have been incorporated into policies and activities: A. Communities: CSR projects are chosen based on social and developmental needs in the regions where the Company is operating, with the overall goal of promoting inclusive growth by empowering communities and accelerating development especially the vulnerable and marginalized communities. This is being accomplished by providing access to water and sanitation facilities, education and healthcare services, and skill building for underprivileged youth. L&T works along with the communities around its factories, campuses and establishments for health and education services. Water-stressed blocks are selected for water and sanitation projects. Skills development centres are located across India to mobilize youth from different states. The Company may partner with the government and communities to create multiplier effect of its social programmes. The mode of implementation of CSR programmes will include a combination of direct implementation and/or through partners such as NGOs, trusts, academic institutions, business associates, registered societies. After identifying a location, a need assessment is conducted, and a detailed project report is prepared. The project report specifies socio economic status of the location viz. number of villages or urban slum pockets, number of students or trainees, the schools/households to be covered, current facilities, and specific vulnerable community groups such as the SC/ST population and their needs and concerns. The need assessment involves participatory rural appraisal (PRA), wherein beneficiaries participate in identifying specific issues, vulnerable populations, stakeholders, and potential challenges in implementing the interventions. The project report includes proposed interventions, 267 268 LARSEN & TOUBRO Business Responsibility & Sustainability Reporting (E) outcomes and measurable indicators. Based on the project report, proposals are invited from reputed NGOs with a presence in the selected location and the implementation partner is carefully selected after thorough due diligence. During implementation, stakeholder groups are formed, such as Self-Help Groups, Village Development Committees, School Management Committees, and Health Committees, to participate in decision-making and implementation. These groups guide and monitor the interventions at the community level, such as monitoring the use of water from a common source created by the project, regulating the use of water under the water distribution system, measuring and recording water levels in intervention wells, encouraging communities to use household toilets, and monitoring and regulating the use of common pasture lands. There is continuous dialogue between the implementation partners, communities and CSR teams to ensure clear understanding of the issues the communities face and the possible solutions. The initiatives are re-aligned, if the need be, for the best interests of the community. B. Employees and Workmen: There are structured systems for employee communication and engagement that starts from project director/business heads/senior management visits and interactions with employees, HR manager visits and townhalls are held from time-to-time for interactions with employees and the workers. There are Employee Relation Officers at the project sites and with support of the Workmen Development Centres, they oversee and interact, take workers' feedback from time-to-time on various aspects of living, work conditions, health and welfare. Depending on the feedback received from the channels as stated above, including the survey findings, HR heads of individual businesses, with the support of their cluster/project HR managers, also undertake surveys as per the need on various topics related to employee development, engagement and effectiveness. The findings are discussed with project/business heads and corrective actions are taken to enhance the organisational effectiveness. Additionally, there are designated Grievance Redressal Officers (GRO), Industrial Relation, Admin functions who oversee the health, safety, wellbeing, working conditions, living conditions of the workmen. These GROS are also responsible for communication with all workers at the time of Screening/Induction/Onboarding and at regular intervals such as pep-talk about channels (toll free number, WhatsApp, verbal, registers) to raise grievances, and the mechanism for settlement of grievances and similar communication with the sub-contractors working at the project site. Remediation and corrective action are taken as deemed necessary to resolve the grievances. C. Shareholders: In addition to its ongoing interactions with analysts representing institutional equity investors, the Company conducted an investor feedback survey to build into its long-term strategic plan - 'Lakshya 2026'. As part of this exercise, several suggestions from key investors and analysts were received on ESG related aspects such as energy transition, diversity and inclusion, governance. The Company also received suggestions from ESG rating agencies and funds as well as improving granularity of ESG disclosures. This has resulted in improvement of processes wherever necessary and feasible. The quality and granularity of ESG disclosures have also enhanced in the past couple of years especially after the introduction of BRSR and Core KPIs. Recognising the growing interest in this area and factoring in feedback from investor interactions, the Company has been conducting regular interactions with relevant stakeholders including global funds, institutional investors, rating agencies, etc., to keep them updated about activities and progress on various initiatives being undertaken to achieve its carbon and water neutrality goals. Integrated Annual Report 2023-24 Total Female Male Workers Permanent For details of CSR intervention, please refer to 'Social and Relationship Capital' section of the Integrated Annual Report FY 2023-24. 52,224 30.6 0 100 4,793 100 4,793 4,793 Male Employees Permanent Not applicable Other than 10,082 Has the entity conducted Life Cycle Perspective/Assessments (LCA) for any of its products (for manufacturing industry) or for its services (for service industry)? If yes, provide details in the following format. If NA, provide details. 0 43.4 1,827 Not applicable 100 100 4,205 4,205 19.3 1,542 0 1,328 0 0 0 100 100 5,041 86.3 214 Not applicable 0 0 100 248 100 248 5,041 248 5,041 Total Female 27.7 0 4. Financial 2. Yes, the Policy is available at https://www.larsentoubro.com/corporate/about-lt-group/corporate-policies/. The Company is committed to providing equal opportunities in employment and creating an inclusive work environment. The Policy clearly sets out the guiding principles which drive the Company to ensure equal and equitable opportunity for all and uphold the highest standards of ethics, values and governance across the people practices. Does the entity have an equal opportunity policy as per the Rights of Persons with Disabilities Act, 2016? If so, provide a web-link to the policy. Most of the Company's permanent premises are accessible to differently abled people with wheelchairs (viz. through ramps, toilets, lifts). The Company is taking steps to provide the right infrastructure to support the needs of individuals with disabilities and preparing the remaining premises for accessibility infrastructure. Are the premises/offices of the entity accessible to differently abled employees and workers, as per the requirements of the Rights of Persons with Disabilities Act, 2016? If not, whether any steps are being taken by the entity in this regard? 5. 4. 3. Accessibility of workplaces Yes Return to work and Retention rates of permanent employees and workers that took parental leave. 100 Yes 100 100 Yes 100 100 employees (Y/N/N.A.) 100 Deducted and deposited with the authority 6. Male Female Yes If Yes, then give details of the mechanism in brief Yes/No Particulars Permanent Workers Registration and redressal are done through Union and standing orders/Joint Management Council/ Complaints and Grievance Committee. Is there a mechanism available to receive and redress grievances for the following categories of employees and workers? If yes, give details of the mechanism in brief. Not tracked 85.9 Gender 85.9 Retention rate Return to work rate Permanent workers 89.6 89.6 Retention rate Return to work rate Permanent employees Total Not applicable Other than of total workers No. of workers Statements Reports Report Financial Statutory Integrated Discussion and Analysis Management 2. Corporate Overview Well-being measures considered are expenditure towards life insurance, health insurance, medical insurance, workmen compensation, staff welfare. The Company spends considerable amount towards protective gear and safety related items; currently not estimated separately. 819.0 Cr 0.74% FY 2022-23 FY 2023-24 0.73% 927.3 Cr Cost incurred on well-being measures as a % of total revenue of the Company Particulars Spending on measures towards well-being of employees and workers (including permanent and other than permanent) in the following format - Integrated Annual Report 2023-24 covered as a % Details of retirement benefits, for Current Financial Year and Previous Financial Year. FY 2022-23 No. of employees covered as a % of total Yes 100 100 Yes 100 100 Yes FY 2023-24 100 PF Gratuity ESI employees (Y/N/N.A.) Deducted and deposited with the authority covered as a % of total workers No. of workers No. of employees covered as a % of total Benefits 100 3. Yes Workers 3.3 100 1,530 54.5 100 Not applicable 515 18.3 0 11,228 0 11,743 3487 0 0 4,205 - Female 0 0 43,448 3.4 0 0 Not applicable 1,530 1. LEADERSHIP INDICATORS Statements Reports Report Whether stakeholder consultation is used to support the identification and management of environmental and social topics (Yes/No). If so, provide details of instances as to how the inputs received from stakeholders on these topics were incorporated into policies and activities of the entity. Statutory Integrated 0 Management Discussion and Analysis 17.5 3,45,287 100 Female Total 2,807 3,48,094 794 61,184 28.3 17.6 3,48,094 2,807 100 Corporate Overview Permanent 0 - Male employees/ workers in respective category (A) Category Total Grievances should first be addressed by employees with their Immediate Supervisor seeking resolution. In the absence of an assigned Immediate Supervisor, employees may escalate the matter to the next level supervisor. If the employee remains dissatisfied then alternately, they can initiate a grievance ticket via HEERA chatbot. The designated HR officer is responsible for resolution of the grievance and based on the severity and complexity, the timelines and escalation (with a maximum of three level) may vary. Grievances are submitted to respective HR coordinators who are responsible for resolution. The digital platform HEERA serves as the primary channel for addressing employee grievances. The grievances may be related to concerns regarding work, working relation, workplace and working conditions, salary-related matters, disputes related to claims settlement, reimbursement, and recovery of dues and leaves, issues pertaining medical insurance and policy, inconsistencies in policy implementation, violation of Code of Conduct, miscellaneous issues such as system portal functionality or any other issue affecting the employment of an employee. Over 500 GROS have been appointed across project sites to ensure grievance registering, resolving, meeting timelines, managing escalations, closing cases, generating reports, and facilitating regular reviews and audits in a systematic way. Grievance may cover issues related to health and safety, working conditions, wages, living conditions, and so on. A toll-free number is available for recording grievances of the workers, operational 24x7 over and above the oral and/or written complaints which were already being recorded. This provides a fair and transparent process for resolving complaints and ensuring equal and fair treatment. Business Responsibility & Sustainability Reporting Yes 7. Membership of employees and workers in association(s) or Unions recognised by the listed entity: Other than Permanent Employees Permanent Employees If Yes, then give details of the mechanism in brief Yes/No Particulars LARSEN & TOUBRO 261 Any project location/establishments with 20 or more workers should have a Grievance Redressal Officer (GRO), appointed by the Project Manager from any of the personnel from the functions (Project Accounts and Admin In charge, Project Safety In charge) and communicated to the relevant stakeholders (Admin/Industrial Relations/Accounts head). The mechanism includes registration of grievance, resolution, timeline for resolution, escalation, feedback and closure, record-keeping and reporting and periodic review and audits. During the year, the redressal mechanism has been more formalized and structured especially for the construction business. Any grievance may be raised by the worker oneself or on behalf of the group. It may be related to working conditions, living conditions at the workmen habitat/labour colony, wage- related issues or any other issues related to their employment. Yes 48,019 FY 2023-24 No. of employees/ workers in respective category, 0 0 46,935 0 0 52,224 Permanent Employees or Union (D) FY 2022-23 or Union (B) % (D/C) employees/ workers in respective category (C) % (B/A) Total No. of employees/ workers in respective category, who are part of association(s) part of who are association(s) 9 Earlier called CSR Committee Λ 2. 46,935 44,773 95 Workers Male Female 2,073 6 2,073 6 100 2,098 1,766 84.2 100 6 100 6 Total 2,079 2,079 100 2,104 1,772 84.2 10. Health and Safety Management Systems: a. b. C. Whether an occupational health and safety management system has been implemented by the entity? (Yes/No). If yes, the coverage of such system. Yes, the occupational health and safety management system has been implemented by the Company and the work locations i.e., project sites, manufacturing facilities, campuses and offices are covered. In line with L&T's EHS vision of Zero Harm and Corporate Environment, Health & Safety Policy, management systems have been implemented in accordance with ISO 45001:2018. The EHS Management System outlines a structured approach necessary to manage risks and performance improvement in a consistent manner. The management system is assessed by third party assurance agencies e.g., DNV, TUV and certified according to the requirements of applicable standards viz. ISO 45001:2018. What are the processes used to identify work-related hazards and assess risks on a routine and non- routine basis by the entity? 100 52,224 52,224 Total 2,77,857 3,07,926 100 45,354 16 9. *The number of trainings conducted are higher than the number of employees and workers due to the attrition and new joinees. Details of performance and career development reviews of employees and workers: FY 2023-24 FY 2022-23 Category Total (A) No. (B) % (B/A) Total (C) No. (D) % (D/C) Employees 100 3,487 3,487 100 4,205 4,205 The Company's EHS Management System has risk evaluation and management as one of its key components. The work locations are required to undertake to implement the EHS risk management as an integral part of their business operations. EHS risk management process covers five steps: hazard identification, risk evaluation and assessment, risk mitigation and control measures, monitoring and documentation, and periodic reporting and update. Hazard identification and risk assessment is one of the crucial processes followed across work locations. The relevant stakeholders including construction engineers, design and planning engineers, production-in-charge personnel and EHS team members as well as workmen are involved in the risk assessment and risk management process. Safe Work Method Statements, as relevant for processes, have been developed and deployed prior to the start of any work. Whether you have processes for workers to report the work-related hazards and to remove themselves from such risks. (Y/N) Female 41,286 43,448 100 48,019 48,019 Male 95 26 Yes, the Company has implemented systems and processes for workers to report work and health related hazards and remove themselves from such risks. EHS-conscious workmen are identified and deployed at workplaces to LARSEN & TOUBRO 1 15 *Mission Zero Harm is the guiding principle for the Company with respect to safety performance, and it is extremely unfortunate to report an increase in fatalities in FY 2023-24 (13 in FY 2022-23). The Company has taken this as a matter of significant concern and all the incidents were investigated in depth. Key reasons which contributed to the increase were poor strength of supporting structure resulting in cave-ins/landslides and inadequate safety protocols while working at heights. The issue has been compounded by significant jump in number of contract workmen, and high degree of churn. The Company has taken corrective actions such as enhanced supervision, more intensive toolbox talks, different coloured helmets for newly inducted workers, expert consultation for high-risk activities (specially for remote areas), more engagement with larger subcontractors. The Company is fully committed to improving safety performance and ensuring a safer workplace. 12. Describe the measures taken by the entity to ensure a safe and healthy work place. The Company is committed to ensuring that all employees and workers are working in a safe environment and have the necessary support to lead a healthy life. EHS, HR, Admin and Medical teams are the key functions undertaking initiatives on a continuous basis to ensure all needs for a safe and healthy workplace are met. Safety is a priority for the Management due to nature of the business i.e., projects executed with use of substantial involvement of workers and encapsulated in L&T's Mission Zero Harm as well as driving force behind L&T's L.I.F.E. (Live Injury-Free Everyday) Framework. The Management provides strong, demonstrable, and visible leadership and commitment towards implementation of this framework through allocation of adequate resources, assigning responsibilities and through personal examples and actions. As a part of the EHS Management System, each project site is required to prepare a project specific EHS plan before commencing the execution. This plan identifies the hazardous operations in the scope of work, assesses risks from such hazards and management of risks through proactive measures and controls. Similar process is followed for the manufacturing facilities/campuses. To strengthen the processes and systems, internal audits are conducted at various levels both by the businesses themselves as well as inter-businesses and external audits are carried out through accredited third-party agencies. For certain high importance/priority project sites, frequency and depth of audit is increased depending on the risk profile of such projects. Digital systems/applications play a significant role in identifying hazards as well as enabling capturing of risks as well as learnings from execution. Use of advanced technology such as vison analytics/Al in enhancing these applications. Digital technologies e.g., AR/VR are also leveraged to enhance training and awareness of employees and workers. To enhance the standard practices recommended, the Company has taken other measures which include Implementation of HSE Surveillance Rating, Knowledge management through capturing of lessons learnt and special sessions by SMEs (Subject Matter Experts), Implementation of Behaviour Based Safety systems, and specialized training modules for high-risk activities. 11 project teams of the Company demonstrated the strong commitment to EHS management and performance by winning the coveted Sword of Honour by British Safety Council. 264 Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial Reports Statements 1 13. Number of Complaints on the following made by employees and workers: FY 2022-23 Benefits Filed during the year Working Conditions 117 Pending resolution at the end of year NIL Remarks Filed during the year Pending resolution at the end of year Remarks 11 NIL Health & Safety 135 FY 2023-24 1 13 23 Business Responsibility & Sustainability Reporting d. identify hazards and report them for immediate corrective action. Worker representatives are also part of the Project EHS Committee. Monthly EHS Committee meetings are conducted where workmen's representatives participate to report the work and health related hazards, risks, concerns at the workplace and discuss the mitigation measures. Do the employees/workers of the entity have access to non-occupational medical and healthcare services? (Yes/No) Yes, medical centres and first aid facilities are available for both employees and workers. In addition, there are location specific tie-ups with hospitals and nursing homes proximal to the project sites to ensure a prioritized access to medical facilities. Work locations such as project sites, manufacturing locations also have ambulances on standby to handle any emergencies. 11. Details of safety related incidents, in the following format: Safety Incident/Number Category Lost Time Injury Frequency Rate (LTIFR) (per one Employees million-person hours worked) Workers Total recordable work-related injuries Employees Number of fatalities* High consequence work-related injury or ill-health (excluding fatalities) Workers Employees 1 0 70 79 8 6 263 0.06 0.04 0.04 FY 2022-23 FY 2023-24 Employees Workers Workers 0.07 90,937 14 174 0 Permanent Workers 2,079 2,079 100 2,104 2,104 100 - Male 2,073 2,073 100 2,098 2,098 0 100 6 6 100 6 6 100 262 Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Report Statutory Reports - Female Percentage calculated is based on the coverage of female employees only. 2,073 2,073 6 2,079 100 3,45,287 Male Workers Permanent Other than C. 63 1,307 0 67 4 Not applicable 0 100 6 100 2,079 100 2,073 100 Not applicable 0 0 1,303 Financial Statements 63 100 6 100 6 100 2,079 6 8. Details of training given to employees and workers: FY 2023-24 57,265 23,889 42 58,299 100 53,098 37,171 70 28,431 54 Workers Male Female 3,47,360 3,91,715 100 90,802 26 92 1,125 1,224 5 135 46 100 Total 1,284 3,92,999 Total 16 45,180 100 3,06,801 2,76,633 2,813 3,50,173 NIL 41 51 On Health and FY 2022-23 Category Total (A) safety measures* No. (B) % (B/A) No. (C) On Skill upgradation* % (C/A) Total (D) On Health and safety measures* No. (E) On Skill upgradation % (ED) No. (F) % (F / D) Employees Male 52,812 21,692 41 52,462 3,125 6,163 100 5,837 49 2,197 2,503 4,453 55 25,928 73 34,046 46,935 99 Female Provide the processes for consultation between stakeholders and the Board on economic, environmental, and social topics or if consultation is delegated, how is feedback from such consultations provided to the Board? The Company has set up various committees for managing and monitoring ESG related areas. Few of these are: CSR & Sustainability Committee 9, Risk Management Committee, Stakeholders' Relationship Committee, Investor Relations, EHS Council, Material Council, Green Campus Steering Committee. The CSR & Sustainability Committee, Board Risk Management Committee and Stakeholders' Relationship Committee are constituted by the Board and are chaired by an Independent Director. Other Committees have been internally constituted. As per their respective terms of reference, the various Committees (statutory as well as internal) meet periodically to review the performance of the Company in relevant areas. Performance, concerns and issues related to ESG related topics are extracted from these reviews and a consolidated performance report/outcome is presented to the Board in their quarterly meeting. The Company has also been conducting stakeholder engagement exercises from time to time on ESG topics. These stakeholder engagement exercises follow a structured approach with respect to the frequency, delegation and reporting of outcome, including stakeholders' feedback to the Board. 14 14. Assessments for the year: Degree of Dependency: groups who are directly dependent on the Company's activities, products, services, performance, or on whom the Company is dependent to operate. For example, customers, government as clients, employees including workmen, supply chain partners, investors. • L&T's businesses are in EPC projects (Engineering, Procurement, Construction) and Hi-Tech Manufacturing. The Company aims to balance the needs, interests and expectations of various stakeholders with those of the business and deliver long-term value. The Company undertakes a structured materiality assessment process through an independent third party, to identify key stakeholder groups and take the inputs from these stakeholders to finalize the material topics for the Company. As a part of the exercise, the stakeholders were identified based on the following parameters: Describe the processes for identifying key stakeholder groups of the entity. 1. ESSENTIAL INDICATORS Principle 4: Businesses should respect the interests of and be responsive to all its stakeholders No significant risks or concerns arose from the assessment during the year. It is ensured that the supply chain partners engaged with the Company understand and sign the Code of Conduct of the Company, a mandatory requirement during vendor registration and onboarding process. During the year, the sessions conducted for the supply chain partners on ESG covered the Company policies viz. Green Supply Chain Policy, Sustainability Policy, Whistleblower Policy and Code of Conduct. In case any concern/observations/risks are arising, may not be limited to during assessment, the Company takes suitable corrective and preventive action as necessary. 6. Provide details of any corrective actions taken or underway to address significant risks / concerns arising from assessments of health and safety practices and working conditions of value chain partners. Percentage of value chain partners (by value of business done) that were assessed The Company identified top 200 (unique 186) supply chain partners comprising 38% of FY 2022- 23 spend. During the year, the Company assessed these supply chain partners on certain ESG parameters that includes environmental management, performance, human rights, CSR, health and safety practices, corporate governance, and ethical business practices through a questionnaire. This questionnaire was developed keeping in mind the regulatory compliances, BRSR disclosures, global standards and so on. The remote/desktop assessment was based on interactions with the supply chain partners, documents and evidence shared. Post assessment, the gaps identified during the assessment were shared with the supply chain partners along with suggestions on the course of action for improving overall sustainability performance. Health and safety practices Working Conditions Details on assessment of value chain partners: Does the entity provide transition assistance programs to facilitate continued employability and the management of career endings resulting from retirement or termination of employment? (Yes/No) Yes, the Company provides transition assistance programmes to facilitate continued employability and the management of career endings resulting from retirement based on merit. 5. 4. Degree of Responsibility: groups or individuals to whom the organization has, or in the future may have, legal, commercial, operational or ethical/moral responsibilities. For example, community, shareholders. 10 266 1. NIL Corporate Overview Management Discussion and Analysis Integrated Statutory Financial Report Reports Statements 2. • Sphere of Influence: groups or individuals who can have an impact (direct or indirect) on the Company's strategic decision-making and operations. For example, senior management and leadership, regulatory bodies. Diverse perspectives: groups or individuals with different perspectives who facilitate understanding the state of affairs, national and global. For example: media, NGO partners. List of stakeholder groups identified as key for your entity and the frequency of engagement with each stakeholder group. The key stakeholders of the Company are Government, customers including private sector and public sector entities, employees and workers, suppliers, shareholders, investors, communities and NGO partners, Regulatory bodies and media. The detail of engagement is covered in the 'Stakeholder Engagement' section of the Integrated Annual Report FY 2023-24. Integrated Annual Report 2023-24 0 LEADERSHIP INDICATORS 0 Provide the measures undertaken by the entity to ensure that statutory dues have been deducted and deposited by the value chain partners. The Company extends life insurance coverage through a comprehensive health insurance policy which covers death of its employees and workers. b. Workers (Y/N): Yes Employees (Y/N): Yes a. 2. LEADERSHIP INDICATORS The Company leverages technology and use digital tools for real-time monitoring, drone surveillance, VR training, Al-powered predictive risk mapping, digitalized permit-to-work systems, inspection and audit processes, and data management. These initiatives reflect the dedication of the Company to improve safety performance and create a safer workplace. The Company invests in ongoing training to enhance employee competency in identifying and mitigating HSE risks. Initiatives like HSE observations, interventions, and proactive knowledge sharing enable to address potential hazards. Continuous reinforcement of HSE mechanisms, along with effective supervision and safety leadership, further ensure a safe working environment. The leadership's commitment to HSE considerations fosters a robust safety culture. To enhance the existing HSE risk control measures, the permit-to-work system has been strengthened and reinforced controls for scaffolding, work at height, material handling, excavations, hot works, and lifting operations. These measures are complemented by increased cross functional audits and inspections, intensive toolbox talks, and the use of distinctively coloured helmets for new workers to ensure they receive special attention. Comprehensive Behavioural Based Safety (BBS) training has been conducted to reduce at-risk behaviour, and we have engaged experts for high-risk activities, especially in remote areas, to mitigate risks. 15. Provide details of any corrective action taken or underway to address safety-related incidents (if any) and on significant risks/concerns arising from assessments of health & safety practices and working conditions. The Company's commitment to safety is encapsulated in 'Mission Zero Harm', driving the safety performance initiatives. Health, Safety, and Environment (HSE) in the Company is based on the ISO 45000 and 14000, ensuring continual improvement. In response to recent incidents, thorough investigations have been conducted to identify root causes and corrective actions have been implemented. Majority of the locations are either certified by an independent third party or complying with ISO 45001:2018. The units undergo periodic external audits to ensure adherence and verify compliance with the applicable standards and guidelines. Also, the key manufacturing facilities are certified by an independent third party on SA8000 standards, a globally recognized social certification programme on human rights and labour management. Furthermore, an internal assessment was conducted for manufacturing facilities, offices to understand potential human rights risks through Admin/IR/Project/ HR/EHS in charge. FY 2022-23 Percentage of your plants and offices that were assessed (by entity or statutory authorities or third parties) Health and safety practices Working Conditions The Company ensures that statutory dues payable are deposited on time. Proof of payment, deposit of statutory dues e.g., records for PF deposit for workmen is maintained, GST payment by the suppliers is matched through GST portal to ensure compliance, amongst other controls. 265 1. Does the entity extend any life insurance or any compensatory package in the event of death of Business Responsibility & Sustainability Reporting 28 FY 2023-24 LARSEN & TOUBRO 2 60,390 FY 2022-23 FY 2023-24 Workers 1 24 Employees No. of employees/workers that are rehabilitated and placed in suitable employment or whose family members have been placed in suitable employment Total no. of affected employees/ workers Benefits Provide the number of employees/workers having suffered high consequence work-related injury/ill-health/ fatalities (as reported in Q11 of Essential Indicators above), who have been rehabilitated and placed in suitable employment or whose family members have been placed in suitable employment: 3. 0 tCO₂e emissions / Revenue from operations adjusted Parity (PPP) (Total Scope 1 and Scope 2 GHG rupee of turnover adjusted for Purchasing Power for PPP) Total Scope 1 and Scope 2 emission intensity per tCO2e/Mn USD Total Scope 1 and Scope 2 emissions per Rupee tCO₂e/* Cr of turnover Total Scope 2 emissions (Break-up of the GHG into CO2, CH4, N2O, HFCs, PFCs, SF 6, NF 3, if available) Provide details of greenhouse gas emissions (Scope 1 and Scope 2 emissions) & its intensity, in the following format: Total Scope 1 emissions (Break-up of the GHG into CO2, CH4, N2O, HFCs, PFCs, SF 6, NF 3, i if available) UOM Parameter 276 Yes, stack emissions from chimney stacks at respective manufacturing facilities are analyzed by government approved laboratories and the reports are reviewed by the internal team to ensure compliance to the consent to operate (CTO) conditions. Testing reports are submitted to State Pollution Control Boards as per compliance. Note: Indicate if any independent assessment/evaluation/assurance has been carried out by an external agency? (Y/N). If yes, name of the external agency. Increase in air emissions for Hazira is due to increase in consumption of natural gas. However, the emissions are within the permissible limit. FY 2023-24 7. tCO2e 6,35,646 Statements 6,93,115 Hazardous air pollutants Others 9. Does the entity have any project related to reducing Green House Gas emission? 8. Yes, independent data assurance has been carried out by Deloitte Haskins & Sells LLP. Note: Indicate if any independent assessment/evaluation/assurance has been carried out by an external agency? (Y/N). If yes, name of the external agency. Reports Report Financial FY 2022-23 Statutory Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 19.7 17.5 8.9 7.8 2,73,719 3,49,682 Integrated Volatile organic compounds 6. 38 Hazira UOM Parameter FY 2022-23 FY 2023-24 Yes, the A. M. Naik Heavy Engineering Complex, Hazira is a ZLD certified facility, and 100% of wastewater generated is either recycled and reused or stored for future use. Other manufacturing facilities at Kattupalli, Powai, Talegaon, Coimbatore, Kancheepuram, Kansbahal have also implemented Zero Liquid Discharge systems at respective locations. The wastewater generated from business processes and domestic uses is collected, treated, and reused for non-potable purposes such as gardening, toilet flushing, firefighting, topping up the cooling tower, road washing, dust suppression. Please provide details of air emissions (other than GHG emissions) by the entity: Data disclosed for the following manufacturing facilities: Has the entity implemented a mechanism for Zero Liquid Discharge (ZLD)? If yes, provide details of its coverage and implementation. Yes, independent data assurance has been carried out by Deloitte Haskins & Sells LLP. Note: Indicate if any independent assessment/evaluation/assurance has been carried out by an external agency? (Y/N). If yes, name of the external agency. Pithampur Kancheepuram Details of some initiatives linked to GHG emissions reduction have been included in Principle-6 Leadership Indicator- Question 4 as the answer provided in Principle-6 Leadership Indicator-Question 4 also include other initiatives related to resource efficiency and waste reuse. Business Responsibility & Sustainability Reporting LARSEN & TOUBRO 275 Sent to third parties and others-without treatment is water discharged through municipal sewer connections or given to approved vendors for wastewater treatment. 12,59,341 (Primary) 1,64,681 26,522 0 5. Persistent organic pollutants Hazira mg/m³ 61 15 37 26 45 mg/m³ Particulate Matter (PM) 11 44 21 SOx 26 14 19 mg/m³ NOx Pithampur Kancheepuram 22 18 10 16 24 46 Provide details related to waste management by the entity, in the following format: by composition i.e. by materials relevant to the sector) FY 2023-24 1 No. Location of operations/offices SI. 11. If the entity has operations/offices in/around ecologically sensitive areas (such as national parks, wildlife sanctuaries, biosphere reserves, wetlands, biodiversity hotspots, forests, coastal regulation zones etc.) where environmental approvals/clearances are required, please specify details: Waste management is an integral part of the EHS management system. Each location (project site, manufacturing facilities and campuses) has a location specific waste management plan, which is based on types of waste generated and applicable disposal methods. Waste management guidelines and procedures focus on Reduce, Reuse, Recycle principles and ensure proper waste identification, segregation, recycling (if applicable) and disposal. All businesses assess the waste generated from operations for reuse potential and after exhausting the feasible options, opt for relevant disposal methods. For hazardous waste, waste management is done complying to the requirements of applicable hazardous waste management rules e.g., Battery Waste Management Rules, 2022 and as per the guidelines issued by Central and State Pollution Control Boards. Hazardous waste is stored at specially designated areas/locations at project sites or manufacturing facilities and the disposal is done through govt approved/registered waste handling agencies. The Company also conducts regular training and awareness programmes on waste management for employees and workers focusing on waste minimization and proper waste handling. The Company also ensures suitable storage requirements e.g., fire-fighting equipment, spill kits, drip trays for safe storage of waste before disposal. The Company manufactures certain products which are meant for industrial and defence use and no hazardous or toxic chemicals are used in these products. 10. Briefly describe the waste management practices adopted in your establishments. Describe the strategy adopted by your company to reduce usage of hazardous and toxic chemicals in your products and processes and the practices adopted to manage such wastes. Business Responsibility & Sustainability Reporting LARSEN & TOUBRO 278 277 Yes, independent data assurance has been carried out by Deloitte Haskins & Sells LLP. Note: Indicate if any independent assessment/evaluation/assurance has been carried out by an external agency? (Y/N). If yes, name of the external agency. The Company has made improvements in FY 2023-24 for capturing data related to waste generation, reuse and disposal. However, the Company has more than 700 project sites in operation, and which are by definition temporary and with open boundaries. Waste gets generated at multiple locations, depending on type of activities at sites and reused and disposed at varying times through the project lifecycle. These issues create significant challenge in putting direct measurement systems and therefore, indirect estimation has to be made which presents difficulty in completeness and traceability of the data as required for reasonable assurance standards. To improve data collection and reporting, the Company is redesigning the Standard Operating Procedures (SOPs) which will be based on reasonable assurance requirements, and this will be rolled out to all the sites/locations. Additionally, the Company is exploring some digital solutions which could be used to enable direct measurement without manual intervention. Note: Purchasing Power Parity (PPP)-total income is adjusted as per International Monetary Fund Implied PPP conversion rate. 2,492 140 3,633 77,168 Total ((i) Other disposal operations 2,352 73,535 Landfilling Type of Operations Manufacturing facility Whether the conditions of environmental approval/clearance are being complied with? (Y/N) If no, the reasons thereof and corrective action taken, if any. Yes Integrated Annual Report 2023-24 comprising viaducts and tunnels falling in forest area and coastal regulation zones Yes EPC Project site Mumbai Ahmedabad High Speed Rail Package C3 (Maharashtra) - Contracted project for construction of high-speed rail corridor 7 ཚུ་ཚེ་ཚེ་ཚེ་ཚེ - Contracted project for construction 8-lane expressway from Marine Drive to Worli abutting the seacoast of Mumbai Mumbai Coastal Road, Mumbai (Maharashtra) EPC Project site 6 (ii) EPC Project site 5 EPC Project site Thane Creek Bridge, Thane (Maharashtra) - Contracted project for expansion of existing road bridge on Sion-Panvel Road across Thane creek 4 EPC Project site Company's manufacturing facility located 40 kms from Chennai, adjoining the Bay of Bengal Kachchi Dargah Bridge (Bihar) - Contracted project for construction of a bridge which spans the Ganges, connecting Kacchi Dargah in Patna and Bidupur in Hajipur 3 Manufacturing facility Modular Fabrication Facility (Kattupalli)- 2 A. M. Naik Heavy Engineering Complex, Hazira (Gujarat)- Company's manufacturing facility, located along the banks of River Tapi, 8 kms from the Arabian Sea New Dry Dock, Kochi (Kerala) - Contracted project for construction of a dock along the Ernakulam Channel Parameter 0 Incineration 4,201 7,326 Other Hazardous waste. Please specify, if any. (G) 0 5 11 56 2,22,748 2,36,846 0.3 0.5 26 86 Radioactive waste (F) Battery waste (E) Construction and demolition waste (D) Bio-medical waste (C) E-waste (B) 126 506 FY 2022-23 Plastic Waste (A) Total Waste generated (in metric tonnes) Other Non-hazardous waste generated (H). Please specify, if any. (Break-up 2,09,271 99,762 Total (A + B + C + D + E + F + G + H) (i) For each category of waste generated, total waste disposed by nature of disposal method (in metric tonnes) 184,852 3,63,412 Total 0 0 (iii) Other recovery operations 0 184,852 2,05,822 1,57,590 0 (ii) Re-used (i) For each category of waste generated, total waste recovered through recycling, re-using or other recovery operations (in metric tonnes) 6.7 8.1 Waste intensity per rupee of turnover adjusted for Purchasing Power Parity (PPP) (Total waste generated/Revenue from operations adjusted for PPP) (in tonnes/Mn USD) from operations) 3.0 3.6 Waste intensity per rupee of turnover (Total waste generated / Revenue 3,26,875 4,54,097 Recycled Note: Purchasing Power Parity (PPP)-total income is adjusted as per International Monetary Fund Implied PPP conversion rate. 2,74,535 1,218 Others please specify 2,104 0 0 2,104 100 Male 2,073 0 0 2,073 100 100 0 0 2,098 100 Female 6 0 0 6 100 2,098 6 2,079 0 0 4,793 100 5,893 271 4.6 5,622 95.4 Female 248 0 0 248 100 270 8 2.9 262 97 Workers Permanent 2,079 0 0 0 6 (Secondary) 16,448 Total water discharged (in kilolitres) (i + ii + iii + iv + v) - With treatment - please specify level of treatment - No treatment Others - With treatment - please specify level of treatment - No treatment (v) (iv) Sent to third partiesⓇ 2,36,188 60,336 @ 0 0 0 2,73,052 (Primary) (Primary) 10,91,480 0 0 2,53,587 (Primary) 0 - With treatment - please specify level of treatment 0 (Primary) 4,18,234 100 Other than 3,48,094 3,04,005 87.3 44,088 12.7 2,75,753 2,71,035 98.3 8,94,733 4,718 permanent Male Female 3,45,287 2,807 3,01,677 2,328 87.4 83 43,609 479 5,41,499 32,44,110 (Primary) 1.7 4,793 Male permanent 100 3,48,094 3,48,094 100 2,75,753 2,75,753 100 3,50,173 3,50,173 100 2,104 2,77,857 100 2. 10 As on 31st March'24, the number of trainings conducted are higher than the number of employees and workers considering the attrition and new joinees. Human rights awareness is covered through various informal processes for the workmen. Induction is a mandatory requirement for any workmen joining at any site/location/project. Induction includes, but not limited to, topics such as wage breakup, PF deduction, health and safety, account creation for wage deposit, KYC. Additionally, there are systems in place to ensure that there is no child labour (submission of Aadhar card as proof of age), no forced labour through proof of employment (wage slip, issuance of gate pass/ID card). Also, there are daily toolbox talks which covers few of the above aspects, apart from job role. The key locations of the Company are also certified by SA8000 by an independent third party which covers elements such as child labour, forced labour, discrimination, working hours, remuneration, freedom of association, grievance redressal mechanism. Details of minimum wages paid to employees and workers, in the following format: 270 FY 2023-24 Equal to Minimum Category Total (A) Wage No. (B) 2,77,857 % (B/A) 2,104 2,079 47,757 12,082 25 Other than permanent 5,041 5,873 100 5,489 3,292 60 100 Total Employees 27,519 48 53,246 15,374 29 Workers Permanent Other than permanent Total Workers 2,079 57,265 More than Minimum Wage No. (C) Total (D) % (C/A) 4,205 100 3,487 0 O O O 0 46,935 100 0 43,448 0 100 100 0 0 5,041 100 6,163 279 4.5 5,884 95.5 3,487 0 0 43,448 FY 2022-23 Equal to Minimum Wage No. (E) % (E/D) More than Minimum Wage No. (F) % (F/D) Employees Permanent 52,224 Male 48,019 Female 4,205 Other than 5,041 O O O O 0 0 52,224 100 46,935 0 0 0 48,019 100 5,26,691 (Primary) 41 0 FY 2023-24 0 O O O O O 0 0 O O O O O 0 0 and redressed Details on assessment of value chain partners: Most of the Company's permanent premises are accessible to differently abled people with wheelchairs (viz. through ramps, toilets, lifts). The Company is taking steps to provide the right infrastructure to support the needs of individuals with disabilities and preparing the remaining premises for accessibility infrastructure. 0 Is the premise/office of the entity accessible to differently abled visitors, as per the requirements of the Rights of Persons with Disabilities Act, 2016? Details of the scope and coverage of any human rights due-diligence conducted. Though no complaints received in FY 2023-24 related to human rights, the grievance redressal mechanism has been strengthened and modified during the year for the contractual workmen. The details of the grievance redressal mechanism for contractual workmen have already been discussed in Section A 'VII. Transparency and disclosures compliances.' 4. 3. 2. 1. Details of a business process being modified/introduced as a result of addressing human rights grievances/ complaints. No significant risks/concerns arose that required any corrective actions with respect to human rights related issues. LEADERSHIP INDICATORS 11. Provide details of any corrective actions taken or underway to address significant risks/concerns arising from the assessments at Question 9 above. Others please specify - The scope and coverage of human rights due diligence extends to the Company's own manufacturing facilities and offices covering its contractual workers. This assessment covers aspects such as child labour, forced/involuntary labour, wages, sexual harassment, discrimination at workplace, health and safety, working conditions and grievance mechanism. Additionally, the top 200 supply chain partners have also been evaluated on various ESG parameters including human rights. Wages 0 Wages Details of total energy consumption (in Joules or multiples) and energy intensity, in the following format: 1. ESSENTIAL INDICATORS Principle 6: Businesses should respect and make efforts to protect and restore the environment No significant risks or concerns arose from the assessment during the year. It is ensured that the supply chain partners engaged with the Company understand and sign off the Code of Conduct of the Company, a mandatory requirement during vendor registration and onboarding process. During the year, the sessions conducted for the supply chain partners on ESG covered the Company policies viz. Green Supply Chain Policy, Sustainability Policy, Whistleblower Policy and Code of Conduct. In case any concern or risk arising during the year, may not be limited to during assessment, the Company takes suitable corrective and preventive action as necessary. Provide details of any corrective actions taken or underway to address significant risks/concerns arising from the assessments at Question 4 above. 5. Business Responsibility & Sustainability Reporting LARSEN & TOUBRO 273 Other human rights related issues The Company identified top 200 (unique 186) supply chain partners comprising 38% of FY 2022-23 spend. During the year, the Company assessed these supply chain partners on certain ESG parameters that includes environmental management, performance, human rights, CSR, health and safety practices, corporate governance, and ethical business practices through a questionnaire. This questionnaire was developed keeping in mind the regulatory compliances, BRSR disclosures, global standards and so on. The remote/desktop assessment was based on interactions with the supply chain partners and documents shared with the Company. Post assessment, the gaps identified during the assessment were shared with the supply chain partners along with suggestions on the course of action for improving overall sustainability performance. - Complaints Wages Forced/involuntary labour Sexual harassment Discrimination at workplace Child labour Particulars registered Discrimination at workplace Child Labour Forced Labour Involuntary Labour Percentage of value chain partners (by value of business done with such partners) that were assessed Parameter Discrimination at workplace guidelines. Furthermore, an internal assessment was conducted for manufacturing facilities, offices to understand any potential human rights risks through the Admin/IR/Project/HR/EHS in charge. Percentage of your plants and offices that were assessed (by entity or statutory authorities or third parties) 12 Include all females from employee and worker category, both permanent and other than permanent. 13 'Upheld' is interpreted by the Company as the complaints concluded and redressed. 1 0.04 3 FY 2023-24 13 Total Complaints reported under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH) Complaints on POSH as a % of female employees / workers 12 Complaints on POSH upheld Particulars Complaints filed under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, in the following format: POSH Act FY 2022-23 under the 0 0 O O O O 0 0 0 0 O o O O O 0 0 0 and redressed The key manufacturing facilities are certified by an independent third party on SA8000 standards, world's leading social certification programme on human rights and labour management. The units undergo periodic audits to ensure adherence and verify compliance with the applicable standards and 2 2 Sexual harassment Forced/involuntary labour Child labour Particulars 10. Assessments for the year: Statements Reports Report Discussion and Analysis Financial 0.04 Statutory Management Corporate Overview Integrated Annual Report 2023-24 272 Yes, commitment to Human Rights, Labour and the Society is one of the pillars in the Code of Conduct for suppliers. The supply chain partners are expected to understand, acknowledge and adhere to the norms of the Code. Signing the Code of Conduct is a mandatory step during vendor onboarding process. The Code of Conduct covers fair working conditions, health & safety, child labour, forced labour, non-discrimination, wages, zero tolerance for harassment. Also, adherence to regulatory compliances such as health and quality, payment of wages, PF deduction forms a part of the agreements and contracts. Do human rights requirements form part of your business agreements and contracts? (Yes/No). Mechanisms to prevent adverse consequences to the complainant in discrimination and harassment cases. The mechanism is same as mentioned above in Question 5. The Code of Conduct for employees, senior management and Board members sets the standard of behaviour and professional conduct expected by the Company. The Company has Committee for the protection of women at workplace to ensure their rights, receive grievances, conduct investigations, and redressal. The Company has a Whistle Blower Policy wherein the employees can report any wrong practices, unethical behaviour or non-compliance, which may have a detrimental effect on the organisation, including financial damage and impact on brand image. Violations of the Code of Conduct should be reported as per the Reporting Matrix which is an integral part of our policy document. The Code of Conduct policy covers the procedure of complaint redressal and necessary preventive actions being taken by the Company. There are three cases reported in FY 2023-24 under the POSH Act. One complaint has been concluded and redressed as per the provisions of the Act and Rules. The remaining two complaints were received during Q4 FY 2023-24 and are under inquiry within the timelines as per the Act and the Rules. 9. 8. Integrated FY 2023-24 FY 2022-23 From renewable sources (in Gigajoules) 43,48,015 38,76,733 Others (v) 0 7,344 (iv) Seawater / desalinated water 14,57,540 20,53,537 (iii) Third party water Total volume of water withdrawal (in kilolitres) (i + ii + iii + iv + v) Total volume of water consumption (in kilolitres) 29,91,910 23,14,470 78,73,240 Groundwater (ii) Surface water (i) FY 2022-23 FY 2023-24 Water withdrawal by source (in kilolitres) Parameter Provide details of the following disclosures related to water, in the following format: 23,79,231 Financial Statements 1,61,25,324 Water intensity per rupee of turnover (Total water consumption/ Revenue from operations) (in kilolitres/* Cr) - No treatment (iii) To Seawater - With treatment - please specify level of treatment - No treatment (ii) To Groundwater - With treatment - please specify level of treatment - No treatment To Surface water (i) Water discharge by destination and level of treatment (in kilolitres) 1,28,76,481 Parameter 4. Yes, independent data assurance has been carried out by Deloitte Haskins & Sells LLP. Note: Indicate if any independent assessment/evaluation/assurance has been carried out by an external agency? (Y/N). If yes, name of the external agency. The Company has made improvements in FY 2023-24 for capturing data related to water withdrawal, consumption and discharge. However, the Company has more than 700 project sites in operation, and which are by definition temporary and with open boundaries. Water is taken from multiple sources, as per site conditions and discharged through multiple points. These issues create significant challenge in putting direct measurement systems and therefore, indirect estimation has to be made which presents difficulty in completeness and traceability of the data as required for reasonable assurance standards. To improve data collection and reporting, the Company is redesigning the Standard Operating Procedures (SOPs) which will be based on reasonable assurance requirements, and this will be rolled out to all the sites/locations. Additionally, the Company is finalizing the digital solutions which would enable direct measurement without manual intervention. Note: Purchasing Power Parity (PPP)-total income is adjusted as per International Monetary Fund Implied PPP conversion rate. 225.1 228.5 Water intensity per rupee of turnover adjusted for Purchasing Power Parity (PPP) (Total water consumption / Revenue from operations adjusted for PPP) (in kilolitres/Mn USD) 1,11,76,696 1,10,38,686 101.5 102 Provide the following details related to water discharged: Reports Report Discussion and Analysis 87,64,602 12,17,321 15,29,592 Energy intensity per rupee of turnover (Total energy consumed/ Total energy consumed (A+B+C+D+E+F) (in Gigajoules) Total energy consumed from non-renewable sources (D+E+F) Energy consumption through other sources (F) Total fuel consumption (E) Total electricity consumption (D) From non-renewable sources (in Gigajoules) 93,95,966 1,29,410 Total energy consumed from renewable sources (A+B+C) 0 0 Energy consumption through other sources (C) 0 38,552 Total fuel consumption (B) 1,29,410 1,55,046 Total electricity consumption (A) 1,93,598 0 0 1,02,94,194 Statutory Integrated Management Corporate Overview 3. Integrated Annual Report 2023-24 274 No, the Company does not have any sites/facilities identified as designated consumers (DCs) under the Performance, Achieve and Trade (PAT) Scheme of the Government of India. Does the entity have any sites/facilities identified as designated consumers (DCs) under the Performance, Achieve and Trade (PAT) Scheme of the Government of India? (Y/N) Yes, independent data assurance has been carried out by Deloitte Haskins & Sells LLP. Note: Indicate if any independent assessment/evaluation/assurance has been carried out by an external agency? (Y/N). If yes, name of the external agency. Energy consumption and energy intensity has decreased due to reduction in diesel consumption driven by switching to electricity grid supply and optimization initiatives across different businesses. Additionally, closure or tapering down of certain projects e.g., Mumbai Trans Harbour Link (MTHL), Mumbai Coastal Road Project (MCRP) Package 01, Dwarka Expressway, building projects in Delhi, international water treatment plant projects and reduction in onsite civil construction activities in a few projects e.g., Mumbai Ahmedabad High-Speed Rail (MAHSR) C4 Package, Chennai Metro Rail Ltd (CMRL) project contributed to lower diesel consumption compared to last year. Energy reported for fuel consumption from renewable sources is for the energy consumed from use of compressed bio-gas (CBG) sourced by the Company's manufacturing unit at Pithampur from Indore Municipal Corporation. Note: Purchasing Power Parity (PPP)-total income is adjusted as per International Monetary Fund Implied PPP conversion rate. 2. 219.1 186.1 Energy intensity per rupee of turnover adjusted for Purchasing Power Parity (PPP) (Total energy consumed / Revenue from operations adjusted for PPP) (in GJ/Mn USD) Revenue from operations) (in GJ/* Cr) 98.8 83.1 1,06,13,287 1,07,42,697 1,04,87,792 FY 2022-23 0 21,646 Permanent • Constructed toilet blocks in the schools for students National STEM Challenge was conducted to funnel STEM talent by showcasing students' Innovative Ideas, and create opportunities to connect children to higher level STEM learning Unemployed youth trained in L&T's Construction Skills Training Institutes and facilitation for job placements Providing Science, Technology, Engineering and Math (STEM) Kits for hands on learning in science and math and digital infrastructure, digital content mapped to the curriculum and training to teachers to conduct classes using digital media Affordable general health services along with consultations in specialised clinics provided through nine health centres across India and mobile health vans Provision of dialysis services at a concessional rate Village level women groups formed and organised in Self Help Groups (SHGs) Ensured equal representation of women in VDCs and Community level decision making Women were part of need assessment, and their critical concerns were prioritised • School Toilets dilapidated or not functional • • • • • • • • Village level monitoring committee formed to ensure ODF status of the village Construction of toilets after ensuring water availability • Reverse migration • 4,821 toilets constructed and 41 • 2,69,855 1,180 Key Managerial Personnel (KMP) Board of Directors (BOD) - Whole Time Directors Particulars Median remuneration/wages: a. 3. Details of remuneration/salary/wages, in the following format: Statements Reports Financial • Community awareness regarding making villages open defecation free (ODF) Statutory Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 3.1 38 97 1.7 4,680 98.3 Integrated Report Employees other than BoD and KMP Workers 52,224 • Organised farmers community to form Village Development Committees (VDC) and Farmers Producer Organisation (FPO) • Action Taken Poverty, Migration Drought, Concerns and drought prone locations Vulnerable group Farmer community in water stressed The engagement with vulnerable groups is through Integrated Community Development Project (ICDP) and health initiatives. Some are given below: 3. Provide details of instances of engagement with, and actions taken to, address the concerns of vulnerable/ marginalized stakeholder groups. Statements Reports Report Financial Statutory Integrated Management Discussion and Analysis Corporate Overview 12.6 17 • Water made available with waste water and conservation intervention • Capacity building in sustainable Students have difficulties in learning science and maths subjects and no access to digital and hands on education youth Patients cannot afford the dialysis treatment in private hospitals Unskilled-Unemployed Unaffordable and inaccessible health services and community related issues viz. no decision making power in household clean toilets School students without access to Students in tribal/ rural schools or urban resource poor schools agricultural practices Underprivileged community from urban and peri-urban areas Disadvantaged rural Gender related issues Open defecation leading to health issues and social disgrace facilities Rural population without access to proper sanitation Increase in household agricultural income Rise in ground water table and water made available to population of 1,16,637 from 9 ICDP Locations and 980 hectares land protected from direct run-off in three ICDP locations • • Impact women Number Maintenance of water structures by the VDC along with Panchayat Median remuneration/ FY 2022-23 Remarks Filed during the year Pending resolution at the end of Remarks year FY 2023-24 Pending resolution at the end of year 2 Complaints registered 2 0 • villages are made ODF and 26 are under construction 3 Women felt safe to use household toilet and saved from embarrassment and social disgrace Filed during the year Particulars FY 2023-24 5.4 FY 2022-23 4.9 11 Wage data reported is based on the salary paid to the staff which includes permanent and other than permanent employees, and permanent workers. It comprises total salary, perquisite, employer PF and does not include gratuity and other benefits claimed as reimbursement. Wages paid to other than permanent workers is not considered. The Company employs around 3,50,000 other than permanent workers across more than 700 project sites and locations within India and abroad. Wages to other than permanent workers are directly paid by the third party contractors. The Company monitors the wages and statutory compliances based on the wage register submitted by the third party contractors along with the monthly invoice at project site level manually. The Company is capturing the total payment made to contractors but the wages included therein is not tracked / collated separately. Going forward in the coming years, the Company will explore options to capture, track and report the wages paid to other than permanent workers. Do you have a focal point (Individual/Committee) responsible for addressing human rights impacts or issues caused or contributed to by the business? (Yes/No) The Chief Human Resources Officer is the focal point for human rights related issues at the Company level. For implementation across the sites and manufacturing facilities, designated personnel from IR/Admin/EHS functions are responsible for human rights and labour management. At business level, IR/Admin Heads of respective businesses are the focal point supported by HR heads. Sexual Harassment Describe the internal mechanisms in place to redress grievances related to human rights issues. Whistleblowing is a structured process, which encourages and facilitates employees to report without fear, any wrongdoings or unethical or improper practice which may adversely impact the reputation and/or the financials of the Company, through an appropriate forum. The Company has also formulated Whistleblower Policy for its employees and 271 LARSEN & TOUBRO Business Responsibility & Sustainability Reporting vendors to provide a mechanism for expressing concerns about any unethical behaviour, improper practice, misconduct, violation of legal or regulatory requirement, unfair treatment that could adversely impact the Company's operations, business performance and/or reputation. The Company investigates such reported incidents in an impartial manner and takes appropriate action to ensure that the requisite standards of professional and ethical conduct are always upheld. 6. Number of Complaints on the following made by employees and workers: 7. Respect and commitment to human rights is one of the elements of the Code of Conduct for employees. As a practice, any violation of Code of Conduct can be reported to the 1st Level Reporting Authority, who will investigate and take necessary action. However, if the violation is by the 1st Level Reporting Authority itself, then it is to be reported to the 2nd Level Reporting Authority. In case the Reporting Authority concludes that the violation is of a grave nature, the same shall be reported to the Whistleblower Investigation Committee for further action within a reasonable time frame. L&T is committed to foster and create a workplace which is safe and free from any act of sexual harassment. The Policy for protection of women's rights at workplace has been formulated to guide the Company for redressal of sexual harassment related complaints. This Policy is based on the laws of India and therefore the Policy is applicable to all L&T establishments located in India including all employees, workmen, contract workers. This Policy also protects anyone visiting the establishments of the Company, that may include clients, customers, third party contractors, vendors, suppliers, business representatives. When sexual harassment has occurred because of an act of any third party, the Company takes necessary and reasonable steps to assist the affected person/victim. To adhere with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH Act) and ensure coverage across the locations in India, there are several Internal Complaints Committee (ICC) constituted as per the provision of the POSH Act with different administrative units under their jurisdiction. These ICCs are responsible for registering, investigating, concluding and redressing complaints received. Furthermore, the ICCs also organize workshops and awareness sessions at regular intervals and take necessary actions needed to implement the provisions of the Act. Additionally, two Apex Committees have also been constituted, the highest body to ensure implementation and compliance with the Act. The Apex Committees comprise representatives of few ICCs and other senior leaders of the Company. Gross wages paid to females as % of total wages11 • 237 SHGs formed in three ICDP locations with 125.6 lakh savings Women are assuming community leadership positions e.g. President of VDC, FPO formed with all women board members 1,78,239 population accessing the services Principle 5: Businesses should respect and promote human rights ESSENTIAL INDICATORS 1. Employees and workers who have been provided training on human rights issues and policy(ies) of the entity, in the following format: Category FY 2023-24 FY 2022-23 Business Responsibility & Sustainability Reporting Total (A) % (B/A)10 Total (C) No. of employees/ workers covered (D) % (D/C) Male Employees No. of employees/ workers covered (B) • LARSEN & TOUBRO • Increase in attendance of girls • Dialysis patients taking regular treatment at the L&T health centre • 10,000 youth trained every year of which 60-70% get job placements • 269 41,000 students took part in science exhibitions • • models and presenting solutions to everyday problem by using technology Approximately 6,000 students of Grades VI-VIII participated in the intra and inter-school level competitions. From among them, 300 teams (600 children) were chosen to participate at regional level, of which 24 teams (50 children) from Chennai, Coimbatore, Hazira, Vadodara, Talegaon and Mumbai made it to the L&T National STEM Challenge. Three winning teams and their schools were awarded prizes that included advanced STEM kits and support to upgrade Science lab Students making their own STEM b. Gross wages paid to females as % of total wages paid by the entity, in the following format: under the POSH Act 0 salary/wages of respective category Number 7 13,62,83,963 1,71,76,859 9,77,099 9,77,315 0 4,453 5. 1 52,804 2,073 Female Median remuneration/ salary/ wages of respective category 0 0 6,76,867 12,21,632 4. 6 ESSENTIAL INDICATORS Principle 7: Businesses, when engaging in influencing public and regulatory policy, should do so in a manner that is responsible and transparent The Company identified top 200 (unique 186) supply chain partners comprising 38% of FY 2022-23 spend. During the year, the Company assessed these supply chain partners on certain ESG parameters that includes environmental management, performance, human rights, CSR, health and safety practices, corporate governance, and ethical business practices through a questionnaire. This questionnaire was developed keeping in mind the regulatory compliances, BRSR disclosures, global standards. The remote/desktop assessment was based on interactions with the supply chain partners, response to the questionnaire and evidence shared with the Company. Post assessment, the gaps identified during the assessment were shared with the supply chain partners along with suggestions on the course of action for improving overall sustainability performance. 7. Percentage of value chain partners (by value of business done with such partners) that were assessed for environmental impacts. No significant risks/concerns have been raised during the year. The Company ensures that the contractors, vendors, suppliers comply with policies and guidelines including need for compliance with various regulations and ethical practices including environmental regulations. LARSEN & TOUBRO Overall, the Company's disaster management and emergency preparedness plans aim to ensure business continuity in face of emergencies or disasters and ensure safety of all personnel, assets and other resources. 6. Business Responsibility & Sustainability Reporting 281 1. Disclose any significant adverse impact to the environment, arising from the value chain of the entity. What mitigation or adaptation measures have been taken by the entity in this regard? The Company employs around 3,50,000 other than permanent workers across more than 700 project sites and locations within India and abroad. Wages to other than permanent workers are directly paid by the third party contractors. The Company monitors the wages and statutory compliances based on the wage register submitted by the third party contractors along with the monthly invoice at project site level manually. The Company is capturing the total payment made to contractors but the wages included therein is not tracked / collated separately. Going forward in the coming years, the Company will explore options to capture, track and report the wages paid to other than permanent workers. FY 2023-24 (%) a. Number of affiliations with trade and industry chambers/associations: 75 List the top 10 trade and industry chambers/associations (determined based on the total members of such body) the entity is a member of/affiliated to. International British Safety Council (BSC) 8 International American Society of Concrete Contractors (ASCC) 7 National Quality Circle Forum of India (QCFI) 6 National Construction Industry Development Council (CIDC) 5 National Associated Chambers of Commerce and Industry of India (ASSOCHAM) 4 National National Safety Council (NSC) 3 National Federation of Indian Chambers of Commerce & Industry (FICCI) 2 National Confederation of Indian Industry (CII) 1 International) Reach of trade and industry chambers/ associations (State/National/ No. Name of the trade and industry chambers/associations S. b. Does the entity have a business continuity and disaster management plan? Give details in 100 words/web link. Disaster management is an important component of EHS management system. At the EPC Project sites and Manufacturing facilities/campuses, the Company has implemented disaster management and emergency preparedness plans (EPPs) that address emergencies such as flooding, earthquake, major fires, disease outbreaks etc. These plans are focussed on Mitigation, Preparedness, Response, Recovery to ensure minimal disruptions to the business operations in face of emergencies. Key locations are equipped with emergency sirens, first aid, medical treatment facilities, and identification of assembly points. To maintain a high level of preparedness, relevant training, and capacity-building programmes, including mock drills, are undertaken for employees and workers. Disaster management plans are readily available and easily accessible to all relevant stakeholders, including contractors and emergency services personnel. Other significant initiatives are covered in 'Natural Capital' and 'Intellectual Capital' sections of the Integrated Annual Report FY 2023-24. Concrete waste of ~160 tonnes was crushed and processed into aggregates of different sizes and thereby, avoiding sourcing of equivalent volume from other sources. Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 Preservation and planting of mangroves, controlled lighting during night-time to minimize impact on wildlife, noise and vibration minimization through proper machinery maintenance Creation of rock intertidal habitat, translocation of coral patches, noise and vibration minimization through proper machinery maintenance, development and implementation of a marine biodiversity plan, regular marine environment monitoring Plantation of mangroves, use of equipment compliant with noise emission limits and monitoring of movement of machineries to protect marine life, lighting arrangement to direct light away from sea Location and spacing of bridge piers are designed in a manner to avoid key habitat areas such as breeding and feeding grounds, migration routes of animals, etc., Construction activity is avoided to the extent possible during key seasonal wildlife activities and breeding seasons Monitoring of implementation of Environment Management Plan by third-party agencies, construction of piers in the creek without disturbing the tidal flow comprising viaducts and tunnels falling in forest area and coastal regulation zones Mumbai Ahmedabad High Speed Rail Package C3 (Maharashtra) - Contracted project for construction of high-speed rail corridor Mumbai Coastal Road, Mumbai (Maharashtra) - Contracted project for construction 8-lane expressway from Marine Drive to Worli abutting the seacoast of Mumbai Thane Creek Bridge, Thane (Maharashtra) - Contracted project for expansion of existing road bridge on Sion-Panvel Road across Thane creek New Dry Dock, Kochi (Kerala) - Contracted project for construction of a dock along the Ernakulam Channel 7 6 5 Integrated 4 3 280 Implementation of Zero Liquid Discharge (ZLD) system; Phosphating & Galvanizing activities are carried out beyond Coastal Regulation Zone boundaries Implementation of Zero Liquid Discharge (ZLD) system, planting of mangroves, restoration of biodiversity by converting turf to meadow Actions taken Modular Fabrication Facility, Kattupalli and Shipbuilding Facility, Kattupalli- Company's manufacturing facilities located 40 kms from Chennai, adjoining the Bay of Bengal A. M. Naik Heavy Engineering Complex, Hazira- Company's manufacturing facility, located along the banks of River Tapi, 8 kms from the Arabian Sea Location of operations/offices 2 1 Sl. No. With respect to the ecologically sensitive areas reported at Question 10 of Essential Indicators above, provide details of significant direct & indirect impact of the entity on biodiversity in such areas along-with prevention and remediation activities. 65.6 Scope 3 emissions for the Company is being reported for 4 categories i.e., purchase of goods and services, upstream transportation and distribution, business travel and employee commuting. The methodology to estimate these emissions is according to the Scope 3 Calculation Guidance of GHG Protocol. More than 95% of Scope 3 emissions comes from purchase of goods and within that category, 90% is contributed by consumption of steel and cement used at project sites. Kachchi Dargah Bridge (Bihar) - Client contracted project for construction of a bridge which spans the Ganges, connecting Kachhi Dargah in Patna and Bidupur in Hajipur 9 Statutory Report ~6,500 kL water was conserved, avoiding extraction from other sources. Additionally, the energy spent in sourcing water is also avoided. 21 KL per day of dewatered. quantity was sent to recharge wells. In FY 2023-24, the site was able to recharge ~3,520 KL of water. FY 2023-24: 12,952 CO₂e Emissions avoided in FY 2023-24: 22,207 CO₂e Emissions avoided in Outcome of initiative Concrete waste gets generated in civil works related to infrastructure projects. Typically, this is disposed through assigned agencies, and which use it typically for landfilling. Additionally, the concrete waste also consumes space at project site. In Kundankulam Nuclear Power Project, the project team established a crusher plant to process this concrete waste into aggregates of different sizes. This was reused in making solid blocks for construction as well as for aggregate use in workmen colony PCC works, infra works, fill-crete at site. In MAHSR project, one section has implemented a large Rainwater Harvesting system. The facility was incorporated at design stage itself during construction of a temporary facility (Noise Barrier factory). Water conserved is stored in a storage tank for further use in site activities as well as provided to the community for irrigation and other uses. In some underground metro projects, dewatering is required to enable proper working conditions. Typically, the water extracted in the dewatering process is sent to storm water drain. In CMRL TU02 project, site faced a challenge in not having proper facility for safe discharge of this water. The project team came up with a design to process the water from dewatering process and then feed it back to groundwater through recharge borewells. This enabled not only safe discharge of the water but also helped in replenishing the ground water. Construction project sites have historically been powered by Diesel Generator sets due to remote locations as well as hurdles in getting the grid connection. The Company has taken initiatives across various project sites to get grid electricity connections and help reduce diesel consumption. Construction Machinery, used at project sites, are typically powered by diesel. As part of cost optimization initiatives, all project teams constantly look for ways to maximize the utilization of these machinery as well as optimize the deployment. These initiatives are enabled through use of sensor-based technologies and digital tools. Details of the initiative (web-link, if any, may be provided along with summary) C&D Waste Recycling Financial 5 4 Groundwater Recharge Reduction in Diesel Consumption by Switching to Grid electricity Reduction in Diesel Consumption through optimization initiatives 3 2 1 No. SI. Initiatives undertaken If the entity has undertaken any specific initiatives or used innovative technology or solutions to improve resource efficiency, or reduce impact due to emissions/effluent discharge/waste generated, please provide details of the same as well as outcome of such initiatives, as per the following format: 5. 4. Statements Reports Rainwater Harvesting International Chamber of Commerce (ICC) 282 10 1. Provide details of actions taken to mitigate any negative social impacts identified in the Social Impact Assessments (Reference: Question 1 of Essential Indicators above). 2. No actions required by the Company. Provide the following information on CSR projects undertaken by your entity in designated aspirational districts as identified by government bodies: S. No. State 1 Chhattisgarh 2 Jharkhand 3 Jharkhand 4 Jharkhand 5 Odisha 6 Punjab The implementation of services is through collaboration and partnerships with NGOs, Government agencies and L&T teams from campuses, sites and operations. The aim is to improve the quality of life for individuals, communities and facilitate a positive and sustainable change. The grievance redressal mechanism provides a platform for the community to highlight their concerns with a view to addressing the issues in a manner that safeguards the interests of the individual as well as the larger community. The endeavour will continue to be to seek ongoing feedback from stakeholders regarding CSR projects. Aspirational District Bastar Hazaribagh Ranchi Dumka Balangir 4 70 Amount spent (In ) Not estimated 4 The wage data comprises the salary paid to the staff which includes permanent and other than permanent employees, and permanent workers. The jobs created and respective location have been mapped for the aforementioned categories of employees and workers and does not include other than permanent workers. cost Job creation in smaller towns - Disclose wages paid to persons employed (including employees or workers employed on a permanent or non-permanent/on contract basis) in the following locations, as % of total wage 5. 71 7 8 68 FY 2022-23 (%) FY 2023-24 (%) Directly sourced from MSMEs/small producers Directly from within India Particulars 4. Percentage of input material (inputs to total inputs by value) sourced from suppliers: also be submitted via email/letter to Corporate CSR at grievance.csr@larsentoubro.com. Feedback on status of action may be provided within 20 days of receipt of the email. Suggestions regarding scope of projects, additional activities to be undertaken, request for support for projects and initiating activities in new locations and geographies will not be within the scope of the grievance redressal mechanism. Business Responsibility & Sustainability Reporting LARSEN & TOUBRO 283 Grievances may be submitted in writing through an email/letter addressed to the concerned Project Head Coordinator at the local CSR site. The Project Head will record the grievance, examine the issues involved and prepare an action plan for resolution. Feedback on status of action may be provided within 20 days of receipt of the grievance. Grievances may FY 2022-23 (%) Rural Semi-urban Urban Metropolitan Around 20% of the jobs are created outside India. LEADERSHIP INDICATORS 2 International 2,10,000 5,87,906 1. ESSENTIAL INDICATORS Principle 8: Businesses should promote inclusive growth and equitable development (iv) Direct Tax Avoidance Treaty with Algeria. (iii) Policy aspects related to Small Modular Reactors (SMR). (ii) Incentives for chip design to be available for all companies. (i) Amendment to RBI's guideline for green taxonomy to include nuclear energy, hydropower more than 25 MW, biomass based energy. health and safety etc. Over the years, the Company executives have played a key role in helping shape public policy and have been invited to join (in certain cases also lead) several committees and task forces. A few examples from FY 2023-24: Statements Reports Report Financial Statutory Integrated Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 Location The Company proactively engages with different stakeholders including industry chambers, associations, government ministries and regulators and provides its inputs on various areas such as infrastructure sector, renewable energy, space, 1. Details of public policy positions advocated by the entity: There was no issue related to anti-competitive conduct by the entity during the year. LEADERSHIP INDICATORS Provide details of corrective action taken or underway on any issues related to anti-competitive conduct by the entity, based on adverse orders from regulatory authorities. 2. International Saudi Standards Organization (SASO) Details of Social Impact Assessments (SIA) of projects undertaken by the entity based on applicable laws, in the current financial year. 9,94,325 Name and brief details of project Date of notification 1,05,728 3,79,742 2,37,000 25,14,701 Moga Total 3. (a) Do you have a preferential procurement policy where you give preference to purchase from suppliers comprising marginalized/vulnerable groups? (Yes/No) Though the Company does not have any preferential procurement policy, but it encourages and engages with suppliers from marginalised and vulnerable groups wherever possible. Due to the nature of business and bulk 284 Integrated Annual Report 2023-24 Corporate Overview For CSR Projects Amounts paid to PAFs in the FY (In INR) No. of Project Affected % of PAFS covered Families (PAFS) by R&R Not applicable District State Name of Project for which R&R is ongoing No. S. SIA for the projects, executed by the Company as a contract from the clients, is under the scope of the client. Provide information on project(s) for which ongoing Rehabilitation and Resettlement (R&R) is being undertaken by your entity, in the following format: Not applicable 2. domain (Yes/No) Relevant Web Link Results communicated in public Whether conducted by independent external agency (Yes/No) SIA notification No. R&R for the projects executed by the Company, is under the contractual scope of the client. 3. Describe the mechanisms to receive and redress grievances of the community. Complaints and grievances of the community are collected at work locations i.e., project sites, manufacturing facilities, campuses, and offices by the respective Admin and/or Industrial Relations teams. At EPC project sites, a Public Relations Officer is also deployed to engage with the local community and address their concerns, if any. Grievances are collected through complaint/suggestion boxes at these locations. The Company also has a toll-free number (18002094545), email id (infodesk@larsentoubro.com), social media handles (LinkedIn: https://www.linkedin.com/company/larsen-&-toubro- limited/, X: @larsentoubro) to collect such inputs. Complaints or grievances received are forwarded to the relevant person or department for resolution and they also monitor the resolution of the complaint/grievance. Issues, which remain unresolved or require management intervention, are escalated to the respective business heads. No. (i) 0 0 (iv) Sent to third parties@ - No treatment 1,61,597 1,44,011 - With treatment - please specify level of treatment - With treatment - please specify level of treatment 21,358 (Primary) (v) Others@ - No treatment 2,12,141 - With treatment - please specify level of treatment 1,41,274 22,619 44,962 (Primary) 0 (Primary) 0 - No treatment Water intensity per rupee of turnover (Water consumed / turnover) Water discharge by destination and level of treatment (in kilolitres) To Surface water 12.6 12.5 - No treatment - With treatment - please specify level of treatment 0 0 0 0 1,72,767 (Primary) - No treatment 0 - With treatment - please specify level of treatment 46,616 (Primary) 0 3,650 (Primary) (iii) To Seawater To Groundwater 13,61,127 13,61,127 7,55,753 2,15,242 The Company's business offerings can be found at https://www.larsentoubro.com/corporate/our-businesses/ Channels/platforms where information on products and services of the entity can be accessed (provide web link, if available). 4. 3. 2. 1. LEADERSHIP INDICATORS 3. There were no data breaches during the year. b. Percentage of data breaches involving personally identifiable information of customers a. Number of instances of data breaches along-with impact Provide the following information relating to data breaches: 7. Note: Indicate if any independent assessment/evaluation/assurance has been carried out by an external agency? (Y/N). Statements Reports C. Impact, if any, of the data breaches Total water discharged (in kilolitres) (i + ii + iii + iv + v) FY 2022-23 71,28,687 tCO₂e/ Cr. @ Sent to third parties and others-without treatment is water discharged through municipal sewer connections or given to approved vendors for wastewater treatment. Though the data related to water is still partial, the Company has improved capture of data related to water stressed areas in FY 2023-24. 279 LARSEN & TOUBRO Note: Indicate if any independent assessment/evaluation/assurance has been carried out by an external agency? (Y/N). If yes, name of the external agency. No. 2. 56 Please provide details of total Scope 3 emissions & its intensity, in the following format: UOM FY 2023-24 Total Scope 3 emissions (Break-up of GHG into CO2, CH, N2O, HFCs, PFCs, SF6, NF 3, available) tCO₂e 70,73,536 if Total Scope 3 emissions per rupee of turnover Parameter Financial 15,93,189 23,48,941 We have undertaken to perform reasonable assurance engagement, for LARSEN AND TOUBRO LIMITED (the "Company") vide our engagement letter dated January 15, 2024 in respect of the agreed Sustainability Information listed below (the "Identified Sustainability Information” or “BRSR Core indicators") in accordance with the Criteria stated in paragraph 3 below. This Sustainability Information is included in the Business Responsibility and Sustainability Report (the "BRSR" or the "Report") of the Integrated Annual Report (the "IAR") of the Company for the year ended March 31, 2024. This engagement was conducted by our multidisciplinary team including assurance practitioners, environmental engineers, and specialists. 1. of LARSEN AND TOUBRO LIMITED To the Board of Directors INDEPENDENT PRACTITIONER'S REASONABLE ASSURANCE REPORT ON IDENTIFIED SUSTAINABILITY INFORMATION IN LARSEN AND TOUBRO LIMITED'S BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT Phone: +91 22 6185 4000 Fax: +91 22 6185 4101 Chartered Accountants One International Centre, Tower 3, 27th-32nd Floor, Senapati Bapat Marg, Elphinstone Road (West), Mumbai - 400 013, Maharashtra, India HASKING Reasonable Assurance Report Deloitte LARSEN & TOUBRO 287 Does the entity display product information on the product over and above what is mandated as per local laws? (Yes/No/Not applicable) If yes, provide details in brief. If NA, provide details. Did your entity carry out any survey with regard to consumer satisfaction relating to the major products/services of the entity, significant locations of operation of the entity or the entity as a whole? (Yes/No) If NA, provide details. The Company does not manufacture or sell products which are covered under such laws. Various business verticals conduct customer satisfaction surveys and feedback in a systematic manner and is a process included in Quality Management System. The feedback is collected through a structured questionnaire based relevant parameters and based on 10-point Likert scale. The feedback is usually collected on a half-yearly or annual basis. Key points related to areas of improvement are captured in the feedback report which is reviewed by the senior management of the relevant business on a regular basis. Mechanisms in place to inform consumers of any risk of disruption/discontinuation of essential services. The Company does not have any direct presence or role in provision of essential services. However, during execution of projects and transportation of machinery/equipment, the clients and concerned public departments/authorities are informed in advance through transmittal letters and their permissions are sought for road closure, traffic diversion, isolation of utility supplies etc. Steps taken to inform and educate consumers about safe and responsible usage of products and/or services. The Company does not operate in B2C space and products manufactured are made according to client/customer specifications. The products' business manufactures heavy machines and machine parts for industrial and defence use. The Company engages with its clients/customers on a regular basis to explain about its products, innovations, new technologies and techniques that are implemented or proposed to be implemented to enhance product quality and features. Corporate Overview Haskins & Sells LLP Management Discussion and Analysis 2. Our scope of reasonable assurance consists of the BRSR Core indicators listed in the Appendix I to our report. The reporting boundary of the Report is as disclosed in Question 13 and Question 23(a) of Section A: General Disclosure of the BRSR with exceptions disclosed by way of note under respective questions of the BRSR, where applicable. Integrated Annual Report 2023-24 Regd. Office: One International Center, Tower 3, 27th - 32nd Floor, Senapati Bapat Marg, Elphinstone Road (West), Mumbai - 400 013, Maharastra, India. (LLP Identification No. AAB-8737) LLA • 288 The absence of a significant body of established practice on which to draw to evaluate and measure non-financial information allows for different, but acceptable, measures and measurement techniques and can affect comparability between companies. 5. Inherent limitations Identified Sustainability Information The Company's management is responsible for selecting or establishing suitable criteria for preparing the Sustainability Information including the reporting boundary of the Report, taking into account applicable laws and regulations, if any, related to reporting on the Sustainability Information, identification of key aspects, engagement with stakeholders, content, preparation and presentation of the Identified Sustainability Information in accordance with the Criteria. This responsibility includes design, implementation and maintenance of internal control relevant to the preparation of the Report and the measurement of Identified Sustainability Information, which is free from material misstatement, whether due to fraud or error. • • Business Responsibility and Sustainability Reporting Requirements for listed entities per Master Circular No. SEBI/HO/CFD/POD2/CIR/P/2023/120 dated July 11, 2023; and Regulation 34(2)(f) of the Securities and Exchange Board of India (the "SEBI") (Listing Obligations and Disclosure Requirements), Regulations, 2015 as amended; • The Criteria used by the Company to prepare the Identified Sustainability Information is as under: 3. Criteria Our reasonable assurance engagement was with respect to the year ended March 31, 2024 information only and we have not performed any procedures with respect to earlier periods, and, therefore, do not express any opinion thereon. SEBI Circular SEBI/HO/CFD/CFD-SEC-2/P/CIR/2023/122 dated July 12, 2023 and clarifications thereto issued by SEBI. 4. Management's Responsibility Total volume of water consumption (in kilolitres) Integrated Financial Water withdrawal by source (in kilolitres) Surface water Groundwater Third party water Seawater/desalinated water Others FY 2022-23 Parameter 5,116 2,12,684 9,13,602 10,367 5,30,724 2,43,695 0 0 15,64,155 2,29,725 Total volume of water withdrawal (in kilolitres) FY 2023-24 Statutory (iii) Water withdrawal, consumption, and discharge in the following format: (i) Name of the area(s): Water-stressed areas in parts of western Uttar Pradesh, central Maharashtra, Bangalore, Tamil Nadu, Rajasthan, Punjab and Haryana. Report Reports Statements 12. Details of Environmental Impact Assessments (EIA) of projects undertaken by the entity based on applicable laws, in the current financial year: S. No. Location of operations/ offices Type of operations (ii) Nature of operations: EPC projects related to highways, railways, metro rail, water supply, irrigation, and oil & gas facilities Whether the conditions of environmental approval/clearance are being complied with? (Y/N) If no, the reasons thereof and corrective action taken, if any. 13. Is the entity compliant with the applicable environmental laws/regulations/guidelines in India, such as the Water (Prevention and Control of Pollution) Act, Air (Prevention and Control of Pollution) Act, Environment Protection Act and rules thereunder (Y/N)? Yes, the Company is compliant with applicable Acts and rules. LEADERSHIP INDICATORS 1. Water withdrawal, consumption, and discharge in areas of water stress (in kilolitres): For each facility/plant located in areas of water stress, provide the following information: EIA for the projects, given as a contract by the clients, is under the scope of the clients. Statutory Business Responsibility & Sustainability Reporting Management Discussion and Analysis 3,95,743 Total Community Health Initiatives 6 Environment Conservation Initiatives 5 100 100 ㅎㅎ 1,29,680 Water conservation initiatives and Integrated Community Development Programme for Rural Areas 4 44,611 Promoting STEM Education in Schools & Improving quality of education 100 3 7,22,383 16,44,688 Not applicable Environmental and social parameters relevant to the product As a percentage to total turnover Particulars Turnover of products and/or services as a percentage of turnover from all products/services that carry information about: through a structured feedback form on a periodic basis (semi-annually or annually as the case may be). Formats to record the complaints/feedback as well as SOPs to handle them are part of the Quality Management System. Inputs received from the customers are categorized and forwarded to the relevant teams or departments, which take the necessary action to resolve the complaints and respond to the customers. Each business unit maintains a record of complaints received and resolutions provided. These are reviewed at regular intervals at different management levels, starting from project teams and up to Business Head and Executive Committee level. 100 2. LARSEN & TOUBRO 285 Describe the mechanisms in place to receive and respond to consumer complaints and feedback. Consumers for the Company are clients (referred to hereafter as customers) for its businesses in EPC Projects and Hi-Tech Manufacturing. Customer complaints are received through email, transmittal letters, customer complaint registers and even verbally directly by project teams or facility admins. The Company also has a toll-free number and email address (infodesk@larsentoubro.com) for collecting the customer inputs/feedback. Feedback from the customers is collected 1. ESSENTIAL INDICATORS Principle 9: Businesses should engage with and provide value to their consumers in a responsible manner Business Responsibility & Sustainability Reporting 100 3,13,796 Enhancing educational infrastructure in Schools I. List of identified marginalized and vulnerable groups: (b) From which marginalized/vulnerable groups do you procure? material requirement, there are very limited options to procure from these groups and has to be sourced from large scale companies. 6. 5. Gender based: women/transgenders 4. Reports Report Financial Statutory Integrated Management Discussion and Analysis Statements II. Person with disability (c) What percentage of total procurement (by value) does it constitute? The Company engages with a few marginalized and vulnerable groups (women SHGs, local farmers, small businessmen) for food supplies to canteens in the manufacturing facilities. However, the overall value is negligible as compared to the total purchase by the Company. Due to the nature of business and bulk material requirement, there are very limited options to procure from these groups and mostly sourced from large and mid-sized companies. The material mostly comprises items such as cement, steel, fuel, pipes, cables, ready mix concrete and services may include logistics, IT, ITES, subcontracting for manpower. 2 100 Integrated Report 38,475 No. of persons benefitted from CSR projects Construction Skills Training Institutes and Other skilling programs for women & youth 1 No Project Name Sr. Details of beneficiaries of CSR Projects: The Company does not have any intellectual property owned, created, or acquired based on traditional knowledge during the year. Details of corrective actions taken or underway, based on any adverse order in intellectual property related disputes wherein usage of traditional knowledge is involved. The Company does not have any intellectual property owned, created, or acquired based on traditional knowledge during the year. Details of the benefits derived and shared from the intellectual properties owned or acquired by your entity (in the current financial year), based on traditional knowledge. Safe and responsible usage Recycling and/or safe disposal % of beneficiaries from vulnerable and marginalized groups 3. Number of consumer complaints in respect of the following: 0 Forced recalls 0 Voluntary recalls Number Particulars 0 Details of instances of product recalls on account of safety issues: 0 0 0 000 Other Unfair Trade Practices 4. 0 0 0 The Company does not manufacture or sell consumer products. The products manufactured by the Company are equipment, modules, sub-systems etc. which are for industrial and defence use. Relevant operating parameters and other required information are provided for these products. Corporate Overview Integrated Annual Report 2023-24 286 No cases/complaints received in above matters. Provide details of any corrective actions taken or underway on issues relating to advertising, and delivery of essential services; cyber security and data privacy of customers; re-occurrence of instances of product recalls; penalty/action taken by regulatory authorities on safety of products/services. Yes, it is available at https://www.larsentoubro.com/corporate/privacy-policy/ 6. Does the entity have a framework/policy on cyber security and risks related to data privacy? (Yes/No). If available, provide a web-link of the policy. If NA, provide details. 5. The Company manufactures products which are for industrial and defence use. There were no product recalls (voluntary or forced) made on ground of safety in FY 2023-24. ΝΑ Reasons for recall | | | 0 Restrictive Trade Practices services 0 Cyber-security year year Remarks Pending resolution at end of Received during the Remarks 0 year FY 2022-23 FY 2023-24 Advertising Data privacy Delivery of essential Particulars Received during the 0 Pending resolution at end of year 0 0 0 0 0 0 O O O O 0 0 0 0 0 0 0 o O o O Statutory Risks from large, complex projects are mitigated by having guardrails at the pre-bid review stage as well as by measures such as having experienced project managers, good client relationship management, and suitable mitigation of counterparty and payment risks. However, if there are issues in the execution of large/marquee orders, risks to reputation need to be guarded against. In the Projects business, normal risks like right-of-way, resource availability, utilities shifting, etc., are typically encountered. These are managed by proper planning at the pre-bid stage and continuous monitoring at the execution stage. Risks arising from the financial position of clients, JV partners, suppliers, etc., are also analysed and appropriately mitigated. Risk Registers are maintained and updated regularly. Further, all ongoing projects are also suitably insured. Climate Change - Climate change increases the impact and likelihood of some physical risks, which could lead to execution disruption and losses. These risks manifest both as acute physical risks, e.g., extreme weather conditions, heavy precipitation, etc., as well as chronic physical risks, e.g., higher ambient temperatures, increase in sea levels, etc. While business operations typically face a higher impact of such risks, now even assets and the built environment are increasingly facing such threats. The Company's major business segments, i.e., EPC projects and Hi-Tech Manufacturing, are exposed to such physical risks from climate change, requiring risk mitigation strategies. Some of the major challenges are: Supply Chain Risks - These risks have risen due to the volatile geopolitical environment, especially in the Middle East. These are being closely monitored. While they are not likely to have a significant impact on operations in the short-term, the long-term persistence of these challenges may result in adverse outcomes. Despite this, commodity- related inflation has remained subdued, with the overall environment for commodity prices remaining manageable. Cyber Security - The Company has a Cyber Security Assurance Framework encompassing Processes & Standards and Technology. These risks are monitored/managed at the level of individual businesses/domains as well as by various Committees, including the Company's Risk Management Committee. Operational Risks i. Increasing frequency and intensity of extreme weather events or natural calamities pose significant threats to safety as well as the availability and utilisation of resources Legal and contractual risks are also thoroughly reviewed at the pre-bid stage to ensure that these stay within the Company's overall risk appetite. Efforts are being undertaken to absorb risk-related learnings from an individual business and spread across the Company using forums such as 'Annual Risk Awards' and regular meetings of Business Level Risk Heads. These initiatives help in the dissemination of learnings across the Company, with respect to Specific Risks, Clients, Geographies, etc. Apart from internal learnings, efforts are also made to absorb best practices from outside the Company by participating in industry bodies/forums, etc. Report Integrated Risk Management includes identification, measurement, and mitigation of risks. This includes judgements on the probability as well as severity of risk events. The Company has a 3-pronged approach to Risk Management - Operational, Tactical, and Strategic. These risks, at the level of individual projects as well as the portfolio level, are managed by robust processes, including statutorily mandated and various other internal processes. The Risk Management framework involves Business Heads and Risk Teams at various businesses working in close coordination with the Company-level teams. In addition to project- level risks, risks arising from Corporate Functions such as IT (including Cyber Security) and HR are also mapped and mitigated appropriately. The overall aim of the Risk Management function is to improve project outcomes, and thereby, aid financial performance. Risk Management Framework Statements Reports Discussion and Analysis Financial ii. Extremely high daytime temperatures pose a danger to the health and safety of the workforce, which, in turn, impacts productivity The Chief Risk Officer closely monitors the overall Risk Management Process, which includes Project Pre- Bid, Execution, and Close-out Risk Reviews. Further, significant risks are presented to the Company's Risk Management Committee (twice a year) as well as the Apex Risk Management Committee, which lays down the essential guardrails such as Country Risk exposures, etc. The outcomes/learnings of Risk Reviews are captured in the ERM system, which helps track project-related and portfolio-related risks. Efforts are being made to use Al on the system to produce actionable insights. iii. Heavy precipitation or flooding poses a significant risk to project schedules Talent Risks - The large volume of projects underway in India, as well as in key markets like Saudi Arabia, has increased the demand for key skill sets. As such, talent risks are likely to persist, given the focus on CapEx by both the Central and State Governments of India, as well as Saudi Arabia's ongoing plan to diversify its economy away from oil. v. Changing weather patterns have the potential to cause disruptions in logistics and transportation of materials vi. In addition to loss of productivity and threat to safety, climate events pose an additional burden in terms of higher contingencies and insurance costs Financial risk management is governed by the Risk Management Framework and Policy approved by the Company's Audit Committee under the guidance of the Board. Financial risks in each business portfolio are collated, measured, and managed by the Corporate Finance Department. Management The global economy proved to be resilient in 2023 despite high inflation, significantly tight monetary policy, supply chain disruptions, volatile commodity prices, and a fragile Chinese economy. However, 2024 is likely to have comparatively slower growth due to the lagged impacts of monetary policy tightening. Political and geopolitical risks will be more pronounced in 2024, with an election-packed events calendar. More than 60 countries, representing half the world's population, will go to the polls in 2024. For G10, the main event is likely to be the US election. Inflation dynamics will look quite similar across developed and emerging economies, as most countries are experiencing gradual disinflation driven by the dissipating effects of supply-side shocks combined with tightening financial conditions. Disinflation in goods is proving to be faster than 26 Financial Risks Overall, the Company strives to maintain its robust Risk Management Process, which is far ahead of the statutory stipulation. Despite this, tail risks (potential large impact from a very low probability event) can manifest themselves and will need to be appropriately managed when they arise. The Company also sees significant business opportunities from energy transition linked to the decarbonisation of the energy sector. These are in areas of renewable energy (solar, hydel), clean energy (nuclear, natural gas), renewable fuels (green diesel), green hydrogen, battery energy storage, offshore wind, etc. Risks from Energy Transition - The current megatrend of Energy Transition is fundamentally reshaping several industries across the globe. This affects the businesses at the operational level by increasing 'green specifications' in tenders, building codes, etc. It has also facilitated opportunities such as Green EPC in the Middle East, domestic Pump Hydro Storage Projects (PSP), new business areas such as Green Hydrogen/Electrolyser manufacturing, and more Transmission & Distribution opportunities due to evacuation requirements/grid reconfiguration for renewables. However, risks could arise from the potential failure of any of these new initiatives. iv. Actual weather patterns at project sites/manufacturing facilities may be significantly different from historical or predicted meteorological data and can impact business performance Business Continuity Plan (BCP) - The Company has a process by which BCPs for various risk scenarios are prepared and tested. BCPs are reviewed at several levels and updated suitably, keeping in mind project/portfolio level changes in the Order Book. For the Projects Business, the risks arising from high debt levels in various emerging markets (Asia/Africa) have to be addressed while bidding for/executing projects in these regions. This is done using an appropriate approval matrix for Country Risk and focussing on multilaterally funded projects to mitigate sovereign risk. Monsoon preparedness plans, cover plans for the protection of equipment (covering, tying down, or other suitable arrangements), backup for power/fuel, human safety, and plans for restoring normal operations, e.g., dewatering arrangements are a standard requirement now for all projects. For dealing with periods of extremely high temperature, measures are taken to reschedule the work- rest cycle, additional measures are taken for shelters and hydration of the workforce, and awareness sessions and advisories are organised to apprise the workforce of risks, reporting issues, and preventive measures to be taken. Tactical and Strategic Risks at the bidding stage and during the execution stage. Manufacturing facilities also undertake such assessments on a periodic basis. The Company has adopted and implemented Environment Management Systems based on ISO 14001 and Occupational Health & Safety Management Systems based on ISO 45001. This helps not only in meeting regulatory compliance, but also improves operational performance by identifying and addressing business operations risks. Risk Management Framework LARSEN & TOUBRO 25 To mitigate the impact of such risks, the Company proactively assesses the likelihood and impact of such risks. For EPC projects, this assessment is done both vii. Resource scarcity, e.g., availability of water due to changing rainfall patterns Both Manufacturing and Projects businesses have faced additional risks due to the ongoing geopolitical tensions and a shifting Sanctions regime. Appropriate measures, such as end-to-end Sanction checks, are in place to manage these risks. Apart from Sanctions, every country's foreign policy can also impact business to some extent. This year, post-election outcomes (in India and overseas) are additional risks to be mitigated when required. Technology/Business Model Risks - Changes in technologies/business models can affect the performance of clients and thus impact the type of projects that the Company executes. As such, the Company closely monitors these changes with respect to its clients. Trends in Business Model changes for the EPC business (e.g. the trends towards localisation, reduced site work/greater modularisation, and digitalisation) are also tracked. Concentration Risks - The increase in the order book share of the Middle East has increased the concentration risk. This risk is monitored regularly at various levels and suitably mitigated by measures such as rigorous Sovereign Analysis and Client Financial Strength reviews. Corporate Overview Value-accretive growth of current businesses 24 Performance Measures SE-5 Capability development through R&D, absorption of new technologies and partnerships 23 LARSEN & TOUBRO Economy and Business Strategy Performance in FY 2023-24 against Strategic Objectives: Objectives □ Revenue Growth □ Composition of Services in Total Revenues SO-I Scaling up digital and e-commerce businesses SO-III Developing business offerings to ride the Energy Transition wave SO-IV Divestment of non-core businesses Integrated Annual Report 2023-24 SO-V Enabling business sustainability through a high focus on ESG and stakeholder value creation SO-II □ Growth of digital & e-commerce businesses □ Size of Green Business New Business or Business offerings developed □ Businesses Divestment □ Human Capital □ Social and Relationship Capital For details, refer to the following in the Integrated Report section: □ Natural Capital The Group continues to actively pursue divestments from other non-core assets and is also exploring various alternatives to de-risk the current exposure in Hyderabad Metro. The entire stake in L&T IDPL (a joint venture with investments in road projects and a power transmission asset) was divested on April 10, 2024. The Group progressed towards electrolyser manufacturing by making the first indigenously manufactured electrolyser. The Group has instituted a Green Hydrogen Council comprising stalwarts from academia and business to provide guidance in building a global green energy business. In parallel, it has also joined The Hydrogen Council, a CEO-led coalition of 140+ MNCS for advancing Hydrogen in the global energy transition and energy mix. The Group invested ~ 110 crore during FY 2023-24 in the Green Business against the overall commitment of ~500 crore. The Group increased the share of Green Business to which is 50% of standalone revenues in FY 2023-24 (as compared to 37% in FY 2022-23). 634 billion, L&T-SuFin and L&T EduTech have continued to grow during FY 2023-24. L&T Semiconductor Technologies was incorporated in FY 2023-24 with an initial focus on a fabless design approach. In FY 2023-24, L&T-Cloudfiniti (Business offering linked to data centers and related services) saw its operations start at the Panvel Data Center with ~1.4 MW capacity. The business is also in the process of launching its Kancheepuram Data Center with 30 MW capacity in the near-term. Further, two new data centers in Mahape, Navi Mumbai and Whitefield, Bangalore, are under active consideration. The Services businesses reported modest growth of 9% y-o-y with a stable percentage share in revenues at 28% in FY 2023-24. In FY 2023-24, the Group achieved revenues of ₹ 2,21,113 crore (21% growth y-o-y). Performance Training hours LTIFR Metrics linked to ESG performance are based on materiality. e.g. Carbon Footprint Resource consumption Integrated Annual Report 2023-24 Corporate Overview 28 Integrated Iron ore - Buy 8 9.99 9.99 30,030 71.04 Coking coal - Buy 7 53.55 100.00 5,000 78.11 Lead - Buy 6 100.00 100.00 (5,654) (283.80) 100.00 Copper - Sell 57,290 58.65 27 Thermal Coal - Buy 12 88.38 88.38 1,458 292.67 Nickel - Buy 58.65 11 5,502.16 Cement - Buy 10 53,67,394 19,410.19 Steel - Buy Talent and leadership pipeline to drive business continuity and growth 9 85,61,148 62.59 62.59 38,952 Exposure in INR towards the particular commodity No Commodity Name Sr Domestic market Exchange % of such exposure hedged through commodity derivatives International market OTC Exchange India's foreign exchange reserves stood at an all-time high of USD 646 billion as of March 29, 2024. The relative stability of the INR reflects India's sound macroeconomic fundamentals, financial stability and improvements in the external position. The slowing trajectory of inflation and improving CAD position would also allow the RBI to ease rates, maybe towards the end of the financial year. Foreign Exchange and Commodity Price Risks The Company's businesses are exposed to fluctuations in foreign exchange rates and commodity prices. Additionally, it has exposures to foreign currency-denominated financial assets and liabilities. Net foreign exchange risk on revenues, costs, assets, and liabilities are managed through a combination of forwards and options wherein the counterparties are regulated banking entities. The financial risks involving commodity prices are managed through a combination of price variation clauses embedded in customer contracts, hedges in financial markets, and price pass- through arrangements. In the case of contracts with price variation clauses, the Company may run a Basis Risk between the actual price of the commodity and the reference indices. The disclosure of commodity exposures as required under clause 9(n) of Part C, Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, in the format specified vide Chapter VI-E of SEBI Master Circular No. SEBI/HO/CFD/POD2/CIR/P/2023/120 dated July 11, 2023 is given below: There is a broad consensus on economic stability over the short- to medium-term post-general election results, which is positive for the continuation of the reform agenda and the structural outlook for the Indian economy. One can also expect fiscal consolidation to pick up pace, with the centre's fiscal deficit likely to narrow to 5.1% of GDP in FY 2024-25 and finally to 4.5% of GDP in FY 2025-26, as per the medium-term macro framework. Total Exposure in Quantity terms towards the particular The Indian economy has exhibited remarkable resilience. Output has expanded at a faster pace compared to major economies in 2023, and the outlook remains positive in the medium-term. The country is on track to emerge as the third largest economy in the world within this decade after overtaking the United Kingdom to become the fifth-largest in the world on a nominal GDP (USD) basis last year. An expanding growth pie is expected to lift per capita GDP, which trails most emerging market peers at this juncture. Going by the Government's CapEx emphasis in the Interim Budget of FY 2024-25, we expect public spending to remain strong and consequently, drive growth. Private CapEx could pick up incrementally in FY 2024-25 post- general elections, with improvement in capacity utilisation. However, private consumption is likely to remain modest as the lagged impact of past rate hikes filters through the real economy. NPAs in the banking system have reduced sharply. Hence, banks are well-positioned to fund the next CapEx cycle. Real GDP growth is likely to average around 7.0-7.5 % in FY 2024-25. With oil prices expected to be in a range of USD 80-90 per barrel, the Middle Eastern countries are likely to continue their investments in the energy transition journey. The Company had a record order inflow from the Middle East in FY 2023-24 in the hydrocarbon and renewable segments, and the positive momentum may continue in FY 2024-25 as well. in services, but as it continues normalising, it is expected that the Fed & ECB would start their easing cycles by the middle of 2024. Statements Reports Report Financial Statutory Unlike advanced countries, India does not face a big risk from wage-price inflation, which is supported by the recent trend of moderation in core inflation (currently at 3.5% vs. 6%+ in 2022). Headline CPI inflation is expected to moderate to 4.7% in the calendar year 2024. OTC (crore) commodity (Tn) 1 2,774.60 Copper - Buy 100.00 100.00 3,400 69.11 Zinc - Buy 345 75.11 75.11 (1,406) (23.30) Aluminium - Sell 2 73.33 73.33 1,10,094 2,314.98 Aluminium - Buy Management Discussion and Analysis SE-4 Financial Industry-leading capabilities in digital technologies and analytics for productivity, ESG effectiveness and strengthening revenue streams Statutory Integrated Management Corporate Overview Integrated Annual Report 2023-24 20 In the past, the Group had made investments in concession projects such as Toll Roads, Airports, Ports, Hyderabad Metro, and power generation (Nabha Power). However, in recent years, the focus has been on reducing its exposure to such public-private partnerships (PPPs) through divestment. Further, the Group recently concluded its divestment of the 51% holding in L&T Infrastructure Development Projects Limited, an intermediate Holdco for Roads and Transmission Line concession. The Services businesses cater to sectors of IT (through LTIMindtree), Engineering R&D (through LTTS), financial services (through L&T Finance), real estate development (through L&T Realty), B2B E-commerce (through L&T-SuFin), skilling and assessment (through L&T EduTech), data/cloud services (through L&T-Cloudfiniti) and fabless chip design (through L&T Semiconductor Technologies). Financial Services Hi-Tech Manufacturing ****** EPC Projects focus on the proven core competencies of conceptualising, designing, executing, and commissioning large, complex projects in the areas of mobility infrastructure, power transmission and distribution, water and irrigation infrastructure, buildings and factories, metals and mining, energy generation & storage solutions, oil & gas, and energy transition. Lakshya 2026 has completed its third year in FY 2023-24 and is progressing towards achieving the targets set in the plan. With the aim of being future-ready, the Group has recently incubated L&T Semiconductor Technologies, which focusses on fabless chip design and the delivery of smart products globally. This is in addition to the scaling up of Green Hydrogen and its derivatives, Data Centers, and E-commerce Platform businesses, viz. L&T EduTech and L&T-SuFin. The Group also continues to pursue its goal of unlocking value by exiting non-core businesses and staying asset-light. momentum in existing and emerging technology trends for IT services, reorganise the business offerings to serve customers better, and drive profitability through operational excellence, value engineering, and various digitalisation-led productivity improvement initiatives. EPC Projects Value creation is enabled through a portfolio comprising: Business Model Hi-Tech Manufacturing focusses on custom-designed and built equipment catering to process plants for various sectors (including nuclear), precision engineering and systems for the defence & aerospace sectors, electrolysers for hydrogen production, industrial and bulk material handling, construction machinery and mining equipment, and industrial valves. Business strategy formulation aims to set long-term goals for the Group and identify areas to leverage its strengths, explore new business opportunities, and enhance its existing capabilities and offerings. This is enabled through plans with three different time horizons, viz., a long-term perspective plan (7-10 years), medium-term strategy (5 years), and short-term (annual) budget targets. Directions and Objectives determined in the Perspective Plan become guideposts for medium-term and short-term plans. 'Lakshya', the Group's 5-year strategic plan, is developed through a collaborative process across the organisation. Lakshya 2026 seeks to achieve value-accretive growth in the existing business portfolio through a multi-pronged approach of targeting opportunities arising out of global trends, with a focus on ESG and Sustainability. The underlying emphasis of Lakshya 2026 is to ride the Discussion and Analysis Reports Mobility Growth Climate change and resource scarcity driving need for solutions to balance growing needs with the environment Climate Change Water Recycle and Reuse (WET) Green Hydrogen (LTEG) Clean Fuels (HE, LTEH) Green Buildings (B&F) and Energy Storage (HCI, PT&D) Report Renewables - Solar, Hydel Safe and Smart Cities (LTTS) (PT&D, WET) High-capacity Utility Networks Multi-model Transportation Network (TI, HCI) High-rise Buildings (B&F) Urbanisation Boom The Group's businesses and offerings are closely linked to global megatrends. Statements Increasing population pressures in cities leading to various challenges e.g., congestion and call for better solutions Mass Rapid Transit Systems (HCI, TI) Strategy Formulation Economy and Business Strategy Total exposure 6,440 8.43 Risk Management Framework Liquidity and Interest Rate Risks The Company constantly monitors the liquidity levels and economic & capital market conditions and maintains access to sources of liquidity with competitive cost structure through a combination of approved banking lines, trade finance and capital markets. The Company judiciously deploys its surplus funds in short-term investments, which is in line with its Treasury Policy. The Company dynamically manages interest rate risks through a mix of fund-raising, investment products, and derivatives across maturity profiles and currencies within the robust Risk Management Framework. Financial Resources and Capital Allocation Corporate Overview The capital allocation philosophy of the Company is geared to support business initiatives for the profitable growth of the Company, while retaining adequate liquidity to support any sudden short-term requirements of the Group. After facing uncertainties in past periods due to the pandemic and geopolitics, which resulted in liquidity and supply chain disruptions, the Company has built appropriate cash buffers to meet both opportunities and challenges. In line with its stated strategy to monetise non-core assets, the Company concluded the divestment of its roads concessions and transmission line business (L&T IDPL), which resulted in the release of capital to the tune of 1300 crore. Given the recovery in the business environment and financial markets and with reduced working capital requirements in the Company's businesses and a healthier economic scenario in FY 2023-24, the Company rewarded its shareholders by executing its first-ever equity share buyback that consumed approximately 12,300 crore, ₹ including taxes. Further, this transaction has a positive impact on the Group return ratios as well. In FY 2024-25, the Company proposes to raise long-term debt to refinance about 5,000 crore of maturing debt and to partly fund its proposed capital expenditure. Low gearing levels (Gross Debt to Equity ratio at 0.35x) at the parent entity level and a healthy cash buffer equips the Company with enough flexibility to deal with normal business uncertainties. The Company has seen a significant volume of large- value contracts in the Middle East, especially from Saudi Arabia, which requires large banking facilities, primarily non-fund based. The Company is confident of tying up the required banking facilities during the year to address the upcoming requirements. Internal Controls and Safeguards Corporate governance is the foundation for the Company to achieve predictable growth and desired outcomes, and robust internal controls are one of the important pillars of corporate governance. The Company has adopted the globally accepted framework issued by the Committee of Sponsoring Organisations (COSO) of the Treadway Commission for Internal Controls. This framework assists in the alignment of controls with the dynamics of recent challenges and changes in risk profiles arising due to varying internal and external factors. The Company ensures integrity in conducting its business, safeguarding its assets, timely preparation of reliable financial information, accuracy & completeness in maintaining accounting records, and prevention & detection of frauds & errors through a set of detailed policies and procedures. The Board of Directors and Management at all levels exhibit the right tone through their actions, behaviour, and directives. The 'Code of Conduct', which serves as a beacon for employees, defines the Company culture and values, and emphasises the importance of integrity and ethical values. Besides, the suppliers also have to conform to a separate 'Code of Conduct' to ensure that they align with the Company's commitment to seek sustainable growth by integrating Environment, Social and Governance (ESG) principles with its businesses. 'Whistle-blower/Vigil Mechanism' policies are available to both employees and business partners to enable them to raise genuine concerns about any actual or suspected ethical/legal violations, misconduct or fraud, with adequate safeguards against victimisation, fear of punishment or unfair treatment. The Company has well-documented policies, procedures, and authorisation guidelines commensurate with the level of responsibility, besides standard operating procedures specific to respective businesses. This ensures the propriety of the transactions, besides authorisation at an appropriate level of Management. The Corporate Manuals on Accounting & Internal Controls prescribes the Accounting and Internal Controls Policies. Internal Financial Controls (IFC) at the entity and process level are aligned with the requirements of the Companies Act 2013. The Internal Controls teams at the corporate and business levels assist the Management in setting up appropriate internal controls and establishing and upgrading the system/procedures. Business teams ensure adherence to the documented policies, procedures, authorisation guidelines and IFC framework. The effectiveness of Internal Controls is tested by the Statutory Auditor as well as by the Company's Corporate Audit Services (CAS) Department. CAS develops an audit plan for the Company, which covers core business operations and corporate & support functions. The Audit Committee of the Board reviews the annual internal audit plan. Significant audit observations from the independent internal audits are presented quarterly to the Audit Committee of the Board, along with the status of the Management actions and the progress of the implementation of recommended remedial measures. The Company also periodically engages independent professional firms to carry out reviews of the effectiveness of control in businesses and support functions. In the financial year, the Company supported the capital expenditure required to execute projects awarded in the Projects and Manufacturing business segment. Going forward, the Company will continue to support the growth of new businesses, including green energy, data centers, and semiconductors. Business Model and Strategy Management Integrated Report LARSEN & TOUBRO 19 The Middle East region is also feeling the pressure on account of the Israel conflict. An escalation or spread of the conflict beyond Gaza and Israel, as well as an intensification of the disruptions in the Red Sea, could have an economic impact on the region. Structural reforms remain critical to boosting growth in the Middle East region by way of diversification into clean energy and other industrial sectors besides oil. Despite all the turmoil, India is on track to become the third-largest economy by 2027, overtaking Japan and Germany. It is also the fastest-growing large economy with the tailwinds of young demographics, improving institutional strength and strong governance. The medium-term outlook has worsened for many developing economies amid slowing growth, sluggish global trade, and tighter financial conditions. Additionally, the volatility in crude oil prices and the ongoing shipping disruptions through the Red Sea may further pose challenges to global supply chains and aid inflation. The US economy has shown elasticity so far, but inflation being higher than expected has postponed rate cuts by the Fed. The US Presidential election in November is expected to contribute to the economic volatility. Further, the UK and Europe economies are still fragile. Also, concerns about the real estate bubble in China could further dampen economic revitalisation. The global economy has been in better shape than anticipated at the start of the year, having demonstrated some signs of growth, as reflected in the various high-frequency indicators. However, elevated debt levels and continuing geopolitical hostilities aggravate risks to global growth and inflation outlook in the medium-term. Global Economy However, headwinds from geopolitical tensions, volatility in international financial markets, geoeconomic fragmentation, continuing sea route trade disruptions, and extreme weather events pose risks to the otherwise optimistic outlook. India, given its structural reforms, strengthening physical and digital infrastructure, as well as upbeat business and consumer confidence, is in a better position to overcome these multiple challenges and emerge stronger. Discussion and Analysis While private industrial capital spending has been measured in FY 2023-24, it is expected to pick up in the next fiscal year with the ongoing global supply chain diversification trends and investors' response to the government's Production Linked Incentive (PLI) scheme to boost key targeted manufacturing industries. Amidst global headwinds, the Indian economy has displayed strength and has grown by 8.2% for FY 2023-24, mainly driven by sustained investment through an infrastructure-driven policy by the government. Better capacity utilisation in the manufacturing sector, buoyancy in auto and real estate, healthy corporate balance sheets, strong credit momentum, higher tax collections, and acceptable levels of inflation are aptly aiding the growth prospects of the Indian economy. The Financial Year 2023-24 remained a mixed bag of opportunities and challenges. On one hand, domestic activity exhibited resilience on the back of strong domestic demand, whilst on the other, global geopolitical uncertainty continued to impact inflation, interest rates, and the supply chain. Indian Economy Economy Statements Reports Integrated Annual Report 2023-24 Statutory India's growth story momentum is likely to continue in the next fiscal year with sustained strength in domestic demand, easing of inflationary pressures, focussed fiscal outlay by the government, and a strong manufacturing revival. However, due to the general elections in India, public CapEx could witness a temporary slowdown in the very near-term. Financial resources to enable growth of the businesses and strong financial health to facilitate access to capital markets, when required World-class Airports (B&F, TI) Expressways and Rail Networks (TI) Discussion and Analysis Financial Statutory Integrated Management Corporate Overview Integrated Annual Report 2023-24 22 Report 30,267.73 Economy and Business Strategy For Hi-Tech Manufacturing and EPC Projects businesses, the Group has partnered with several large global processes, technology licensors, and EPC contractors to improve the scope of its business offerings. For the IT and Technology Services businesses, the Group has strategic partnerships with established global software product and technology companies. Supplementing the standalone offerings with partnerships To have a better revenue profile and improved profitability, the Group intends to increase the share of the IT&TS Services business while pursuing growth in the traditional EPC and Hi-Tech Manufacturing businesses. Balancing the cyclical nature of the EPC business through a portfolio of Services businesses India continues to remain the primary market for EPC Projects, Hi-Tech Manufacturing, and Financial Services businesses. This is complemented by a focus on select international geographies, i.e., the Middle East, Africa, and ASEAN. The Americas and Europe will continue to be the primary geographies for the IT services businesses. Geographically diversified businesses generation and steady growth, the focus is also on seeding and scaling up new businesses with high growth potential that are tech-oriented and can deliver superior financial returns. IT Services business, with a focus on the Americas and Europe, is currently witnessing some sectorial headwinds. This, however, has been balanced by robust growth in the EPC Projects and Hi-Tech Manufacturing portfolio, aided by Infra CapEx-led focus in India and oil & gas investments in the Middle East, reflecting the resilience of the portfolio strategy. While the Group relies on mature businesses for cash Reports Strategic Thrust & Direction SE-3 SE-2 SE-1 Operational Excellence for leadership in cost-competitiveness and world-class execution Strategic Enablers Strategic Objectives are supported through: Enabling business sustainability through a high focus on ESG and stakeholder value creation SO-V Divestment of non-core businesses Statements SO-IV SO-III Scaling-up digital and e-commerce businesses SO-II Value-accretive growth of current businesses SO-I ROE Growth Strategic Objectives The Group re-evaluated its Strategic Objectives in FY 2021-22 as part of the assessment done in the Lakshya 2026 exercise. These objectives illustrate how the Group creates value for its stakeholders, fulfils social obligations, and meets sustainability goals. These are: Developing business offerings to ride the Energy Transition wave Electric, Autonomous and Connected Systems (LTTS) Complementing the mature businesses with growth-stage businesses Portfolio Strategy HCI Buildings & Factories B&F Technology and services offerings to transform businesses across various domains Platforms (L&T-SuFin, L&T EduTech) Data Storage and Computing (L&T-Cloudfiniti) Chip design (LTSCT) Big Data, AI/ML, AR/VR, 5G, Cloud, Cyber Security (LTIM, LTTS) Automation, Industry 4.0, Digital Engineering (LTIM, LTTS) Heavy Civil Infrastructure 312 Universal coverage for basic amenities while keeping up with growing demands of global population Financial Services (LTF) Energy Efficient Power Systems and Microgrids (PT&D) Housing (B&F, LTR) Water and Sewage Treatment Systems (WET) Societal Challenge for movement of people and goods Safe, fast, affordable and environment-friendly solutions Digital Transformation The portfolio strategy aims to pursue growth by de-risking revenue streams, exploring new adjacencies, and improving profitability with the aim of creating value for all stakeholders: HE LTTS LARSEN & TOUBRO 21 LTIMindtree LTIM Water & Effluent Treatment WET L&T Finance LTF Power Transmission & Distribution Transportation Infrastructure Heavy Engineering L&T Technology Services L&T Realty LTR TI L&T Energy Hydrocarbon LTEH PT&D L&T Energy GreenTech LTEG LTSCT L&T Semiconductor Technologies LARSEN & TOUBRO Integrated Report Statutory Reasonable Assurance Report BELLE Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis 10 P-6 [E]-4 # 9 P-6 [E]-3 # 8 - Total Scope 1 and Scope 2 emission intensity per rupee of turnover (Total Scope 1 and Scope 2 GHG emissions / Revenue from operations) - Total Scope 2 emissions (Break-up of the GHG into CO2, CH4, N2O, HFCs, PFCs, SF6, NF3, if available) Details of greenhouse gas emissions (Scope 1 and Scope 2 emissions) and its intensity: Total Scope 1 emissions (Break-up of the GHG into CO2, CH4, N2O, HFCs, PFCs, SF6, NF3, if available) Water Discharge by destination and level of treatment (in kiloliters) - Water intensity per rupee of turnover adjusted for Purchasing Power Parity (PPP) (Total Water consumed / Revenue from operations adjusted for PPP) Water intensity per rupee of turnover (Total water consumed / Revenue from operations) - Total water consumption (in kiloliters) - Total volume of water withdrawal (in kiloliters) High consequence work-related injury or ill-health (excluding fatalities) (employees and workers) Gross wages paid to females as % of total wages paid by the entity. Complaints filed under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013: - Total Complaints on Sexual Harassment (POSH) reported - Complaints on POSH as a % of female employees/workers - Complaints on POSH upheld As described in the Note to BRSR Section C 'Principle 6 "Business should respect and make efforts to protect and restore the environment" - Essential Indicator 3 and 4 "Details related to Water" and Essential Indicator 9" Details related to Waste Management" of the Report, the Company has used indirect estimation instead of the approach provided under the BRSR guidance note to determine complete and accurate disclosures for "Details related to Water " and "Details related to Waste Management" indicators. In the absence of sufficient appropriate evidence to check the completeness and accuracy of the values disclosed under "Details related to Water" and "Details related to Waste Management" as at and for the year ended March 31, 2024, we were unable to determine whether any adjustments to the reported figures with respect to "Details related to Water" and "Details related to Waste Management" were necessary or not as at and for the year ended March 31, 2024. Details of total energy consumption (in Joules or multiples) and energy intensity; -Total Energy consumed - Energy intensity per rupee of turnover (Total energy consumed / Revenue from operations) - Energy intensity per rupee of turnover adjusted for Purchasing Power Parity (PPP) (Total energy consumed / Revenue from operations adjusted for PPP) Disclosures related to water withdrawal and consumption: -Water withdrawal by source (in kiloliters) - Total energy consumed from renewable sources (% of energy consumed from renewable sources) • 11. Basis for Qualified Opinion If, based on the work we have performed, we conclude that there is a material misstatement of this Other information, we are required to report that fact. We have nothing to report in this regard. Haskins & Sells LLP Deloitte DELO ASKING HASKIN LARSEN & TOUBRO • 290 Obtained an understanding and performed an evaluation of the design of the key systems, processes and controls for recording, processing and reporting on the Identified Sustainability Information at the corporate office and at other project locations/offices on a sample basis. This included evaluating the design of those controls relevant to the • • Made inquiries of Company's management, including sustainability team, compliance team, human resource team amongst others and those with the responsibility for preparation of the Report; Obtained an understanding of the assessment criteria and their suitability for the evaluation and/or measurements of the Identified Sustainability Information; Obtained an understanding of the Identified Sustainability Information and related disclosures; • 289 - Number of fatalities (employees and workers) • engagement and determining whether they have been implemented by performing procedures in addition to inquiry In connection with our assurance engagement of the Identified Sustainability Information, our responsibility is to read the Other information and, in doing so, consider whether the Other information is materially inconsistent with the Identified Sustainability Information or otherwise appears to be materially misstated. Our opinion on the Identified Sustainability Information does not cover the Other information and we do not express any form of assurance thereon. The Company's Management is responsible for the Other information. The Other information comprises the information included within the BRSR and the IAR, other than Identified Sustainability Information and our independent assurance report dated June 06, 2024 thereon. 10. Other information The statements that describe expression of opinion, belief, aspiration, expectation, aim, or future intentions provided by the Company. • • • Aspects of the Reports and the data/information (qualitative or quantitative) other than the Identified Sustainability Information; and 9. Exclusions We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our reasonable assurance opinion. Tested the consolidation for project locations/offices on a sample basis and corporate office under the reporting boundary for ensuring the completeness of data being reported. Tested the Company's process for collating the sustainability information through agreeing or reconciling the Identified Sustainability Information with the underlying records on a sample basis; and Based on the above understanding and the risks that the Identified Sustainability Information may be materially misstated, determined the nature, timing and extent of further procedures; of the personnel responsible for the Identified Sustainability Information; Our assurance scope excludes the following and therefore we do not express an opinion on: - Total recordable work related injuries (LTI) (employees and workers) - Loss Time Injury Frequency Rate (LTIFR) (per one million person hours worked) (employees and workers) Details of safety related incidents: SELLS LLA 291 LARSEN & TOUBRO Deloitte Haskins & Sells LLP Reasonable Assurance Report DELOITTE 14. Restriction on use Place: Mumbai Date: 06 June 2024 For Deloitte Haskins & Sells LLP Chartered Accountants (Firm's Registration No. 117366W/W-100018) Insu Pratiq Shah Our Reasonable Assurance report has been prepared and addressed to the Board of Directors of the Company at the request of the Company solely, to assist the Company in reporting on Company's sustainability performance and activities. Accordingly, we accept no liability to anyone, other than the Company. Our Reasonable Assurance report should not be used for any other purpose or by any person other than the addressees of our report. We neither accept nor assume any duty of care or liability for any other purpose or to any other party to whom our report is shown or into whose hands it may come without our prior consent in writing. Partner HASKING Select BRSR Core indicators of the Company for the year ended March 31, 2023 were assured by the previous assurance practitioner who had expressed an unmodified opinion on June 27, 2023. Financial Reports Statements Deloitte Haskins & Sells LLP • Our opinion is not modified in respect of this matter. As described in the Note to BRSR Section C 'Principle 5' "Businesses should respect and promote human rights” – Essential Indicator 3(b) and Principle 8 "Businesses should promote inclusive growth and equitable development" - Essential Indicator 5, the Company has not considered the wages paid to other-than-permanent workers for purpose of disclosures and calculation of "Gross wages paid to females as % of total wages paid by the entity" reported under Principle 5 and "Job Creation in smaller towns" reported under Principle 8 as stated above. In the absence of sufficient appropriate evidence to check the completeness and accuracy of the values disclosed under "Gross wages paid to females as % of total wages paid by the entity" and "Job Creation in smaller towns" as at and for the year ended March 31, 2024, we were unable to determine whether any adjustments to the reported figures with respect to "Gross wages paid to females as % of total wages paid by the entity" and "Job Creation in smaller towns" were necessary or not as at and for the year ended March 31, 2024. Except for the possible effect of the matters described in the Basis for Qualified Opinion section of our report, the Identified Sustainability information as mentioned in Appendix I is fairly presented, in all material respects, in accordance with Criteria mentioned below: • Regulation 34(2)(f) of the Securities and Exchange Board of India (the “SEBI”) (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended; • Business Responsibility and Sustainability Reporting Requirements for listed entities per Master Circular No. SEBI/HO/CFD/POD2/CIR/P/2023/120 dated July 11, 2023; and • SEBI Circular SEBI/HO/CFD/CFD-SEC-2/P/CIR/2023/122 dated July 12, 2023 and clarifications thereto issued by SEBI. 13. Other matter 12. Qualified Reasonable Assurance Opinion Given the circumstances of the engagement, in performing the procedures listed above, we: Membership No. 111850 UDIN: 24111850BKJLKA9907 Integrated Annual Report 2023-24 P-3 [E]-1(c) 4 P-3 [E]-11 5 P-5 [E]-3(b) # 6 3 P-5 [E]-7 P-6 [E]-1 Description Section C: Principle [P] Wise Performance Disclosures- Essential Indicators [E] Number of days of accounts payables ((Accounts payable *365) / Cost of goods/services procured). Details of concentration of purchases and sales with trading houses, dealers, and related parties along-with loans and advances and investments, with related parties. Spending on measures towards well-being of employees and workers (including permanent and other than permanent) 7 292 P-1 [E]-9 P-1 [E]-8 Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial 2 Reports Deloitte Haskins & Sells LLP APPENDIX I Identified Sustainability Information in BRSR subject to Reasonable Assurance Sr. No Indicator No. 1 Statements The procedures we performed were based on our professional judgment and included inquiries, observation of processes performed, inspection of documents, evaluating the appropriateness of quantification methods and reporting policies, analytical procedures and agreeing or reconciling with underlying records. . 8. Reasonable Assurance 11) Entering into material Related Party Transactions with L&T Modular Fabrication Yard LLC: To consider and, if thought fit, to pass as an ORDINARY RESOLUTION the following: "RESOLVED THAT pursuant to the provisions of Regulation 23(4) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the applicable provisions of the Companies Act, 2013 ("the Act") along with the Rules made thereunder and other applicable laws including any amendments, modifications, variations or re-enactments thereof, Related Party Transactions Policy of the Company and as per the recommendation/ approval of the Audit Committee and/or the Board of Directors of the Company, approval of the Members of the Company be and is hereby accorded to the Company for entering into and/or continuing to enter into contracts/transactions RESOLVED FURTHER THAT all actions taken by the Board of Directors and/or Audit Committee in connection with any matter referred to or contemplated in this resolution, be and are hereby approved and confirmed in all respects." a subsidiary of the Company and Related Party within the meaning of Section 2(76) of the Act and Regulation 2(1)(zb) of the Listing Regulations, in the nature of a) sale, purchase, lease or supply of goods or business assets or property or equipment; b) availing or rendering of services; c) transfer of any resources, services or obligations to meet the Company's business objectives/requirements; d) Providing inter-corporate deposits; e) providing parent company guarantees ("Related Party Transactions"), aggregating upto an amount not exceeding 4,800 crore on such terms and conditions as may be decided by the Board of Directors (including any Committee of Directors thereof) of the Company as they may deem fit. RESOLVED FURTHER THAT the Board of Directors and/or the Audit Committee of the Company be and is hereby authorized to delegate all or any of the powers conferred on it as they may deem fit and to do all such acts and take all such steps as may be considered necessary or expedient to give effect to the aforesaid resolution. variations or re-enactments thereof, Related Party Transactions Policy of the Company and as per the recommendation/approval of the Audit Committee and/or the Board of Directors of the Company, approval of the Members of the Company be and is hereby accorded to the Company for entering into and/or continuing to enter into contracts/transactions with L&T Metro Rail (Hyderabad) Limited, 10) Entering into material Related Party Transactions with L&T Metro Rail (Hyderabad) Limited: To consider and, if thought fit, to pass as an ORDINARY RESOLUTION the following: "RESOLVED THAT pursuant to the provisions of Regulation 23(4) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the applicable provisions of the Companies Act, 2013 ("the Act") along with the Rules made thereunder and other applicable laws including any amendments, modifications, RESOLVED FURTHER THAT all actions taken by the Board of Directors and/or the Audit Committee in connection with any matter referred to or contemplated in this resolution, be and are hereby approved and confirmed in all respects." crore or USD 1,500 Mn, whichever is higher, on such terms and conditions as may be decided by the Board of Directors (including any Committee of Directors thereof) of the Company as they may deem fit. RESOLVED FURTHER THAT the Board of Directors and/or the Audit Committee of the Company be and is hereby authorised to delegate all or any of the powers conferred on it as they may deem fit and to do all such acts and take all such steps as may be considered necessary or expedient to give effect to the aforesaid resolution. 12,500 "RESOLVED THAT pursuant to the provisions of Regulation 23(4) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the applicable provisions of the Companies Act, 2013 ("the Act") alongwith the Rules made thereunder and other applicable laws including any amendments, modifications, variations or re-enactments thereof, Related Party Transactions Policy of the Company and as per the recommendation/approval of the Audit Committee and/or the Board of Directors of the Company, approval of the Members of the Company be and is hereby accorded to the Company for entering into and/or continuing to enter into transactions with Larsen Toubro Arabia LLC, a subsidiary of the Company and Related Party within the meaning of Section 2(76) of the Act and Regulation 2(1)(zb) of the Listing Regulations, for providing Parent Company Guarantees on behalf of the said subsidiary, aggregating upto an amount not exceeding To consider and, if thought fit, to pass as an ORDINARY RESOLUTION the following: Issuance of Parent Company Guarantees on behalf of Larsen Toubro Arabia LLC: 9) Notice LARSEN & TOUBRO 295 "The qualification of a Director, other than a Director exofficio or alternate Director, shall be the holding of at least one hundred Ordinary Shares of 2 each in the Company. A Director may act before acquiring his qualification shares, but must acquire the same within two months after his appointment or election. A Director ex-officio or alternate Director shall not be required to hold qualification shares in the Company." RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorized to do all such acts, deeds, matters and things as may be necessary, proper or expedient for giving effect to the aforesaid Resolution." relevant rules made thereunder, including any statutory modification or re-enactment thereof for the time being in force as amended from time to time, the Articles of Association (the "AOA") of the Company be and is hereby altered by deletion of Article No. 107 of the AOA which is reproduced under: 1) To consider and adopt the audited standalone financial statements of the Company for the year ended March 31, 2024 and the Reports of the Board of Directors and Auditors thereon; 2) To consider and adopt the audited consolidated financial statements of the Company for the year ended March 31, 2024 and the report of the Auditors thereon; 3) To declare a Final Dividend of 28/- per share of face value of 2/- each for FY 2023-24; 4) To appoint a Director in place of Mr. R. Shankar Raman (DIN: 00019798), who retires by rotation and is eligible for re-appointment; 5) 296 To appoint a Director in place of Mr. Subramanian Sarma (DIN: 00554221), who retires by rotation and is eligible for re-appointment; RESOLVED FURTHER THAT the Board of Directors or Audit Committee, be and is hereby authorized to decide and finalise the terms and conditions of appointment, including the remuneration of the Statutory Auditors." 7) Appointment of Mr. Siddhartha Mohanty (representing equity interest of Life Insurance Corporation of India), as Director of the Company. To consider and, if thought fit, to pass as an ORDINARY RESOLUTION the following: "RESOLVED THAT Mr. Siddhartha Mohanty (DIN: 08058830) who was appointed as a Director in casual vacancy and holds office upto the date of this Annual General Meeting and is eligible for appointment and in respect of whom the Company has received a notice in writing from a member under the provisions of Section 160 of the Companies Act, 2013 proposing his candidature for the office of Director, be and is hereby appointed as a Director, liable to retire by rotation." 8) Amendment to Articles of Association of the Company by deleting Article 107 pertaining to qualification shares. A reasonable assurance engagement involves identifying and assessing the risks of material misstatement of the Identified Sustainability Information whether due to fraud or error, responding to the assessed risks as necessary in the circumstances. "RESOLVED THAT pursuant to the applicable provisions of the Companies Act, 2013 and the 6) Appointment of M/s. MSKA & Associates as Statutory Auditors and fix their remuneration. To consider and, if thought fit, to pass as an ORDINARY RESOLUTION the following: "RESOLVED THAT pursuant to Sections 139 and 142 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 and other applicable provisions, if any, M/s. MSKA and Associates, Chartered Accountants (Firm Registration No. 105047W issued by the Institute of Chartered Accountants of India), be and are hereby appointed as Statutory Auditors of the Company, for a period of 5 consecutive years, to hold office from conclusion of 79th Annual General Meeting till conclusion of 84th Annual General Meeting. Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis LARSEN & TOUBRO Notice of Directors (including any Committee of Directors thereof) of the Company as they may deem fit. RESOLVED FURTHER THAT the Board of Directors and/or the Audit Committee of the Company be and is hereby authorized to delegate all or any of the powers conferred on it as they may deem fit and to do all such acts and take all such steps as may be considered necessary or expedient to give effect to the aforesaid resolution. RESOLVED FURTHER THAT all actions taken by the Board of Directors and/or Audit Committee in connection with any matter referred to or contemplated in this resolution, be and are hereby approved and confirmed in all respects." 14) Entering into material Related Party Transactions with LTIMindtree Limited: To consider and, if thought fit, to pass as an ORDINARY RESOLUTION the following: "RESOLVED THAT pursuant to the provisions of Regulation 23(4) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the applicable provisions of the Companies Act, 2013 ("the Act") along with the Rules made thereunder and other applicable laws including any amendments, modifications, variations or re-enactments thereof, Related Party Transactions Policy of the Company and as per the recommendation/approval of the Audit Committee and/or the Board of Directors of the Company, approval of the Members of the Company be and is hereby accorded to the Company for entering into and/or continuing to enter into contracts/transactions with LTIMindtree Limited, a subsidiary of the Company and Related Party within the meaning of Section 2(76) the Act and Regulation 2(1)(zb) of the Listing Regulations, in the nature of a) sale, purchase, lease or supply of goods or business assets or property or equipment; b) availing or rendering of services; c) transfer of any resources, services or obligations to meet the Company's business objectives/requirements ("Related Party Transactions"), aggregating upto an amount not exceeding 2,000 crore, on such terms and conditions as may be decided by the Board of Directors (including any Committee of Directors thereof) of the Company as they may deem fit. RESOLVED FURTHER THAT the Board of Directors and/or the Audit Committee of the Company be and is hereby authorized to delegate all or any of the powers conferred on it as they may deem fit and to do all such acts and take all such steps as may be considered 297 necessary or expedient to give effect to the aforesaid resolution. 15) Entering into material Related Party Transactions with Nuclear Power Corporation of India Limited: To consider and, if thought fit, to pass as an ORDINARY RESOLUTION the following: Integrated Annual Report 2023-24 298 RESOLVED FURTHER THAT all actions taken by the Board of Directors and/or the Audit Committee in connection with any matter referred to or contemplated in this resolution, be and are hereby approved and confirmed in all respects." RESOLVED FURTHER THAT the Board of Directors and/or the Audit Committee of the Company be and is hereby authorised to delegate all or any of the powers conferred on it as they may deem fit and take all such steps as may be considered necessary or expedient to give effect to the aforesaid resolution. "RESOLVED THAT pursuant to the provisions of Regulation 23(4) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the applicable provisions of the Companies Act, 2013 ("the Act") along with the Rules made thereunder and other applicable laws including any amendments, modifications, variations or re-enactments thereof, Related Party Transactions Policy of the Company and as per the recommendation/approval of the Audit Committee and/or the Board of Directors of the Company, approval of the Members of the Company be and is hereby accorded for entering into and/or continuing to enter into contracts/arrangements/transactions with Nuclear Power Corporation of India Limited, a 'Related Party' of the Company's subsidiary viz. L&T Special Steels and Heavy Forgings Private Limited within the meaning of Section 2(76) of the Act, in the nature of a) sale, purchase, lease or supply of goods or assets or property or equipment; b) rendering of services; c) transfer of any resources, services or obligations to meet the Company's business objectives/requirements ("Related Party Transactions"), aggregating upto an amount not exceeding 2,800 crore, on such terms and conditions as may be decided by the Board of Directors (including any Committee of Directors thereof) of the Company as they may deem fit. RESOLVED FURTHER THAT all actions taken by the Board of Directors and/or the Audit Committee in connection with any matter referred to or contemplated in this resolution, be and are hereby approved and confirmed in all respects." NOTICE IS HEREBY GIVEN THAT the Seventy Ninth Annual General Meeting of LARSEN & TOUBRO LIMITED will be held through VIDEO CONFERENCING OR OTHER AUDIO-VISUAL MEANS on Thursday, July 4, 2024 at 3:00 P.M. IST to transact the following business :- 'RESOLVED THAT pursuant to the provisions of Regulation 23(4) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the applicable provisions of the Companies Act, 2013 ("the Act") along with the Rules made thereunder and other applicable laws including any amendments, modifications, variations or re-enactments thereof, Related Party Transactions Policy of the Company and as per the recommendation/approval of the Audit Committee and/or the Board of Directors of the Company, approval of the Members of the Company be and is hereby accorded to the Company for entering into and/or continuing to enter into contracts/transactions with L&T-MHI Power Boilers Private Limited, a subsidiary of the Company and Related Party within the meaning of Section 2(76) of the Act and Regulation 2(1)(zb) of the Listing Regulations, in the nature of a) sale, purchase, lease or supply of goods or business assets or property or equipment; b) availing or rendering of services; c) transfer of any resources, services or obligations to meet the Company's business objectives/requirements; d) availing inter corporate borrowings ("Related Party Transactions"), aggregating upto an amount not exceeding 1,200 crore on such terms and conditions as may be decided by the Board To consider and, if thought fit, to pass as an ORDINARY RESOLUTION the following: Integrated Statutory Report Reports Financial Statements with L&T Modular Fabrication Yard LLC, a subsidiary of the Company and Related Party within the meaning of Section 2(76) of the Act and Regulation 2(1)(zb) of the Listing Regulations, in the nature of a) sale, purchase, lease or supply of goods or business assets or property or equipment; b) availing or rendering of services; c) transfer of any resources, services or obligations to meet the Company's business objectives/ requirements ("Related Party Transactions"), aggregating upto an amount not exceeding ₹4,300 crore on such terms and conditions as may be decided by the Board of Directors (including any Committee of Directors thereof) of the Company as they may deem fit. "I RESOLVED FURTHER THAT the Board of Directors RESOLVED FURTHER THAT all actions taken by the Board of Directors/Audit Committee in connection with any matter referred to or contemplated in this resolution, be and are hereby approved and confirmed in all respects." 12) Entering into material Related Party Transactions with L&T Special Steels and Heavy Forgings Private Limited: To consider and, if thought fit, to pass as an ORDINARY RESOLUTION the following: "RESOLVED THAT pursuant to the provisions of Regulation 23(4) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the applicable provisions of the Companies Act, 2013 ("the Act") along with the Rules made thereunder and other applicable laws including any amendments, modifications, variations or re-enactments thereof, Related Party Transactions Policy of the Company and as per the recommendation/approval of the Audit Committee and/or the Board of Directors of the Company, approval of the Members of the Company be and is hereby accorded to the Company for entering into and/or continuing to enter into contracts/transactions with L&T Special Steels and Heavy Forgings Private Limited, a subsidiary of the Company and Related Party within the meaning of Section 2(76) of the Act and Regulation 2(1)(zb) of the Listing Regulations, in the nature of a) sale, purchase, lease or supply of goods or business assets or property or equipment; b) availing or rendering of services; c) transfer of any resources, services or obligations to meet the Company's business objectives/requirements ("Related Party Transactions"), aggregating upto an amount not exceeding 1,500 crore on such terms and conditions as may be decided by the Board of Directors (including any Committee of Directors thereof) of the Company as they may deem fit. RESOLVED FURTHER THAT the Board of Directors and/or the Audit Committee of the Company be and is hereby authorized to delegate all or any of the powers conferred on it as they may deem fit and to do all such acts and take all such steps as may be considered necessary or expedient to give effect to the aforesaid resolution. RESOLVED FURTHER THAT all actions taken by the Board of Directors and/or the Audit Committee in connection with any matter referred to or contemplated in this resolution, be and are hereby approved and confirmed in all respects." 13) Entering into material Related Party Transactions with L&T-MHI Power Boilers Private Limited: and/or the Audit Committee of the Company be and is hereby authorized to delegate all or any of the powers conferred on it as they may deem fit and to do all such acts and take all such steps as may be considered necessary or expedient to give effect to the aforesaid resolution. Notice To consider and, if thought fit, to pass as a SPECIAL RESOLUTION the following: • Sr. No Indicator No. HASKINE Reasonable Assurance Report Haskins & Sells LLP Deloitte LARSEN & TOUBRO 293 LL & HASKING P-6 [E]-7 DITTE Email: igrc@larsentoubro.com Website: www.larsentoubro.com Tel No: 022-67525656 • Fax No: 022-67525858 LLP Corporate Overview Management Discussion and Analysis Integrated Report As part of reasonable assurance engagement in accordance with the Standards, we exercise professional judgment and maintain professional skepticism throughout the engagement. These Standards require that we plan and perform our engagement to obtain reasonable assurance about whether the Identified Sustainability Information listed in Appendix I and included in the Report are prepared, in all material respects, in accordance with the Criteria stated under paragraph 3 above. We conducted our engagement in accordance with the Standard on Sustainability Assurance Engagements (SSAE) 3000, "Assurance Engagements on Sustainability Information", and Standard on Assurance Engagements (SAE) 3410 Assurance Engagements on Greenhouse Gas Statements (together the "Standards"), both issued by the Sustainability Reporting Standards Board (the "SRSB") of the ICAI. Our responsibility is to express a reasonable assurance opinion on the Identified Sustainability Information listed in Appendix I based on the procedures we have performed and evidence we have obtained. 7. Our Responsibility We apply Standard on Quality Control (the "SQC") 1, "Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related Services Engagements", and accordingly maintain a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards, and applicable legal and regulatory requirements. 11 We have maintained our independence and confirm that we have met the requirements of the Code of Ethics issued by the Institute of Chartered Accountants of India (the "ICAI") and the SEBI Circular No. SEBI/HO/CFD/CFD-SEC- 2/P/CIR/2023/122 dated July 12, 2023, and its clarifications thereto and have the required competencies and experience to conduct this assurance engagement. Haskins & Sells LLP Deloitte Statements Reports Financial Statutory 6. Our Independence and Quality Control P-6 [E]-9 # HASKING P-8 [E]-4 # Refer paragraph 11 of this report LLP 294 Integrated Annual Report 2023-24 Corporate Management - Percentage of data breaches involving personally identifiable information of customers - Impact, if any, of the data breaches Overview Integrated Report Statutory Reports Financial Statements 12 Regd. Office L&T House, Ballard Estate, Mumbai 400 001. CIN L99999MH1946PLC004768 Discussion and Analysis -Number of instances of data breaches LARSEN & TOUBRO LIMITED -Directly from within India Job creation wages paid to persons employed (including employees or workers employed on a permanent or non-permanent / on contract basis), as % of total wage cost. Information relating to data breaches: 12 P-8 [E]-5 # 14 P-9 [E]-7 Description Total Scope 1 and Scope 2 emission intensity per rupee of turnover adjusted for Purchasing Power Parity (PPP) 13 -Total weight of waste generated (in metric tons) Waste intensity per rupee of turnover (Total waste generated / Revenue from operations) - Waste intensity per rupee of turnover adjusted for Purchasing Power Parity (PPP) (Total waste generated / Revenue from operations adjusted for PPP) - For each category of waste generated, total waste recovered through recycling, re-using or other recovery operations (in metric tons) - For each category of waste generated, total waste disposed by nature of disposal method (in metric tons) Percentage of input material (inputs to total inputs by value) sourced from suppliers. -Directly sourced from MSMEs/small producers (Total Scope 1 and Scope 2 GHG emissions / Revenue from operations adjusted for PPP) Details related to waste management by the entity: Terms and Conditions of appointment of MSKA: Tenure: Both the Auditors, DHS and MSKA would jointly conduct the audit from the conclusion of 79th Annual General Meeting of the Company till the conclusion of the 80th Annual General Meeting and will be jointly and severally responsible for the audit. This would provide the new audit firm adequate time to get familiar with the Company's operations and processes. Joint Audit: The Firm primarily provides Audit & Assurance services, tax and advisory services, to its clients. The Firm's Audit & Assurance practice has significant experience across various industries, markets and geographies. Established in 1978, M SKA & Associates is an Indian partnership firm registered with the Institute of Chartered Accountants of India (ICAI) and the US Public Company Accountancy Oversight Board (PCAOB) having offices across 12 cities in India at Mumbai, Gurugram, Chandigarh, Kolkata, Ahmedabad, Chennai, Goa, Pune, Bengaluru, Kochi, Hyderabad and Coimbatore. The audit firm has a valid peer review certificate. MSKA & Associates is a member firm of BDO International. Basis of recommendation: The Board and the Audit Committee considered various parameters while recommending the appointment of MSKA as Statutory Auditors of the Company including but not limited to their capability to serve a diverse and complex business landscape as that of the Company, existing experience in the Company's business verticals and segments, market standing of the firm, clientele and technical knowledge. MSKA was found suitable to handle the scale, diversity and complexity associated with the audit of the financial statements of the Company. Notice LARSEN & TOUBRO 307 5 years from the conclusion of the 79th Annual General Meeting till the conclusion of the 84th Annual General Meeting. Accordingly, the Board of Directors ("Board") of the Company on the recommendation of the Audit Committee, has recommended the appointment of M/s. MSKA and Associates ('MSKA') (Firm registration number 105047W) as Statutory Auditors for a period of 5 continuous years i.e. from the conclusion of 79th Annual General Meeting till the conclusion of 84th Annual General Meeting of the Company in accordance with the provisions of Section 139 of the Act and the Companies (Audit and Auditors) Rules, 2014. Credentials of MSKA: Remuneration: The Directors recommend this resolution for approval of the shareholders. addition to the audit fee as above and will be decided by the Management in consultation with the Auditors and will be subject to approval by the Board of Directors and/or the Audit Committee. Further, the remuneration for the remaining tenure of MSKA as Statutory Auditors for the FY 2025-26 to FY 2028-29 will be approved by the Board of Directors and/ or the Audit Committee. The remuneration of existing auditors i.e. DHS for FY 2023-24 is 7 crore. The scope of DHS includes Statutory Audit, limited review, audit of Internal control over Financial Reporting, tax audit and transfer pricing. Audit fee of DHS for the year 2024-25 will be decided by Audit committee considering the scope of work and time & efforts involved. The fees are fixed after discussion with the respective Auditors considering the scope of work, team size, systems and process in place at their respective firms. MSKA has given their consent to act as Statutory Auditors of the Company and have confirmed that the said appointment if made will be in accordance with the conditions prescribed under Sections 139 and 141 of the Act. Accordingly, the consent of the members is sought for appointment of MSKA as Statutory Auditors of the Company. None of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, financially or otherwise, in the resolution set out at Item No. 6. Item No. 7: Appointment of Mr. Siddhartha Mohanty (representing equity interest of LIC), as Director of the Company. On the recommendation of the Nomination & Remuneration Committee, Mr. Siddhartha Mohanty (DIN: 08058830) was appointed by the Board of Directors as a Director in casual vacancy caused due to withdrawal of nomination of Mr. Hemant Bhargava by Life Insurance Corporation of India (LIC). Pursuant to Section 161(4) of the Act, Mr. Siddhartha Mohanty will hold office up to the date of the forthcoming Annual General Meeting. The Company has received a notice in writing from a member under the provisions of Section 160 of the Act proposing the candidature of Mr. Siddhartha Mohanty as Director. 308 Integrated Annual Report 2023-24 Corporate Overview In accordance with provisions of Section 139 of the Act and the Companies (Audit and Auditors) Rules, 2014, the Auditors post completion of 2 consecutive terms of total 10 years, need to step down from Auditorship from the conclusion of Annual General Meeting. Fixed Remuneration for Statutory Audit, limited review and audit of Internal control over Financial Reporting - 1 crore for FY 2024-25 plus applicable taxes, travelling and other out of pocket expenses incurred by them in connection with the statutory audit. The proposed fees is based on the scope of work, team size, industry experience, expertise and the time & efforts required to be put by MSKA for FY 2024-25. The fees for services in the nature of statutory certifications and other professional work will be in The Company's current auditors M/s. Deloitte Haskins and Sells LLP ('DHS') would be completing their tenure as Statutory Auditors of the Company on conclusion of the 80th Annual General Meeting of the Company to be held in the year 2025. Management Discussion and Analysis Appointment of M/s. MSKA & Associates as Statutory Auditors and fix their remuneration. Members who have not encashed their dividend warrants pertaining to the aforesaid years may approach the Company/its 25.07.2023 31.03.2024 30.08.2030 09.08.2023 31.03.2023 14.09.2030 Registrar, for obtaining payments thereof atleast 20 days before they are due for transfer to the IEPF. 301 LARSEN & TOUBRO Notice [j] 2. Adhering to the various requirements set out in the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended, the Company has during FY 2023-24 transferred to the IEPF Authority all shares in respect of which dividend has remained unpaid or unclaimed for seven consecutive years or more as on the due date of transfer. Details of shares transferred to IEPF Authority are available on the website of the Company and the same can be accessed through the link: https://investors.larsentoubro.com/ shareholder-services.aspx. The said details have also been uploaded on the website of the IEPF Authority and the same can be accessed through the link: www.iepf.gov.in. Investor Queries and Grievance Redressal: The Company has designated an exclusive e-mail id viz. IGRC@Larsentoubro.com to enable Investors to register their grievances, if any. Members seeking any information with regard to the accounts or any matter mentioned in the AGM Notice, are requested to write to the Company on or before the Cut-off Date i.e. Thursday, June 27, 2024 at IGRC@larsentoubro.com. The same will be replied by the Company suitably. Members may note that in case they have any dispute against the Company and/or its Registrar and Share Transfer Agent, as per SEBI Circular SEBI/HO/OIAE/ OIAE_IAD-3/P/CIR/2023/195 dated July 31, 2023, they can file for Online Resolution of Dispute which harnesses online conciliation and online arbitration for resolution of disputes arising in the Indian Securities Market. Members can use this mechanism only after they have lodged their grievance with the Company and SEBI SCORES system and are not satisfied with the outcome. For more details, please see the following weblinks of the Stock Exchanges: BSE: https://bsecrs.bseindia.com/ecomplaint/ frmInvestorHome.aspx 97 96 31.03.2022 10.09.2029 04.08.2022 23.08.2018 31.03.2018 90 01.08.2019 91 18.03.2020 31.03.2020 31.03.2019 06.09.2026 24.04.2027 NSE: https://www.nseindia.com/complaints/ 92 93 28.10.2020 31.03.2021 02.12.2027 94 05.08.2021 31.03.2021 11.09.2028 95 13.08.2020 31.03.2020 18.09.2027 online-dispute-resolution [k] Instruction for attending the meeting through VC/OAVM: Convenience of different persons positioned in different time zones has been kept in mind before scheduling the time for this Meeting. The members who have cast their vote through remote e-voting prior to the AGM may also attend the AGM but shall not be entitled to cast their vote again. The remote e-voting period commences on Sunday, June 30, 2024 at 9.00 A.M and ends on Wednesday, July 3, 2024 at 5.00 P.M. During this period, members of the Company holding shares either in physical or dematerialised form, as on the cut-off date of Thursday, June 27, 2024 may cast their vote by remote e-voting. The remote e-voting module shall be disabled by NSDL for voting thereafter. Instructions for e-voting during the AGM: The e-voting window shall be activated upon instructions of the Chairman during the AGM proceedings. Only those shareholders, who are present in the AGM and have not cast their vote on the Resolutions through remote e-voting and are otherwise not barred from doing so, shall be eligible to vote through e-voting system available during the AGM. Member(s), whose names appear in the Register of Members list of Beneficial Owners as on the Cut-off Date i.e. Thursday, June 27, 2024 are entitled to vote on the Resolutions set forth in this Notice. Any person who acquires shares of the Company and becomes a member of the Company after the notice is sent through e-mail and continues to hold shares as of the Cut-off Date i.e. Thursday, June 27, 2024, may obtain the login ID and password by sending a request to NSDL at evoting@nsdl.com or the Company at IGRC@larsentoubro.com or follow the steps mentioned in the Notice of the AGM under "Access to NSDL e-voting system". However, if you are already registered with NSDL for remote e-voting, then you can use your existing user ID and password for casting your vote. If you forgot your password, you can reset your password by using "Forgot User Details/Password" or "Physical User Reset Password" option available on www.evoting.nsdl.com or call at 022 4886 7000. A person whose name is recorded in the register of members or in the register of beneficial owners maintained by the depositories as on the Cut-off Date of Thursday, June 27, 2024 shall be entitled to avail the facility of remote e-voting or e-voting during the AGM. Persons who are not members as on the Cut-off Date should treat this Notice for information purposes only. Members are requested to follow the instructions given in this notice to cast their votes through e-voting. Step 1: Access to NSDL e-voting system I. Login method for remote e-voting and joining virtual meeting for Individual shareholders holding securities in demat mode. In terms of SEBI circular dated December 9, 2020 on e-voting facility provided by Listed Companies, Individual shareholders holding securities in demat mode are allowed to vote through their demat account maintained with Depositories and Depository Participants. Shareholders are advised to update their mobile number and email Id in their demat accounts in order to access e-voting facility. Login method for Individual shareholders holding securities in demat mode is given below: Type of shareholders Individual Shareholders holding securities in demat mode with NSDL. The detailed steps on the process and manner for remote e-voting/e-voting at the AGM and to access the VC facility at the AGM are as follows: 89 2014, Secretarial Standard 2 on General Meetings and Regulation 44 of the Listing Regulations, the Company is pleased to offer the facility of voting through electronic means. The said facility of casting the votes by the members using electronic means (remote e-voting and e-voting during the AGM) will be provided by NSDL. Reports The Company has appointed NSDL, to provide VC facility for conducting of the AGM. Members will be provided with a facility to attend the AGM through VC/OAVM using the NSDL e-voting system. Members may follow the steps mentioned in this Notice for access to NSDL e-voting system. After successful login, you can see the link of VC/OAVM placed under "Join General Meeting" menu against the Company name. You are requested to click on the VC/OAVM link placed under "Join General Meeting" menu. Please note that the members who do not have the User ID and Password for e-voting or have forgotten their User ID and Password may retrieve the same by following the instructions mentioned in this Notice. Members can participate in AGM through smart phone/laptop. However, for better experience and smooth participation it is advisable to join the Meeting using Google Chrome, with Laptops connected through broadband. Further Members will be required to use Internet with a good speed to avoid any disturbance during the meeting. Please note that participants connecting from Mobile Devices or Tablets or through Laptop via Mobile Hotspot may experience Audio/Video loss due to fluctuation in their respective network. It is therefore recommended to use Stable Wi-Fi or LAN Connection to avoid any disturbances. Members who would like to express their views or ask questions during the AGM may register themselves as a speaker by sending a request from their registered email address mentioning their name, DP ID and Client ID/folio number, PAN, mobile number to LNTGOGREEN@larsentoubro.com on or before the Cut-off Date i.e. Thursday, June 27, 2024. Those Members who have registered themselves as a speaker and receive a confirmation from the Company will be allowed to express their views/ask questions during the AGM. The Company reserves the right to restrict the number of speakers depending on the availability of time for the AGM. Financial Statements [I] E-voting: 302 Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Report Statutory The businesses as set out in the Notice will be transacted through electronic voting system and the Company will provide the facility for voting by electronic means. In compliance with the provisions of Section 108 of the Act read with Rule 20 of the Companies (Management and Administration) Rules, Login Method 27.09.2024 22.08.2017 [c] Final Dividend for FY 2023-24: The Board of Directors, at its meeting held on May 8, 2024, has recommended a Final Dividend of 28/- per share, in addition to the Special Dividend of 6 per share paid to the shareholders on August 14, 2023. The record date for the purpose of payment of Final Dividend will be Thursday, June 20, 2024 ("Record Date"). Final Dividend, if approved by the Members at this Meeting, will be directly credited to the bank accounts of the shareholders as on the Record Date. SEBI vide its Master Circular No. SEBI/HO/MIRSD/ POD-1/P/CIR/2024/37 dated May 7, 2024, has mandated that with effect from April 1, 2024, dividend to security holders who are holding securities in physical form, shall be paid only through electronic mode. Such payment shall be made only after the shareholders furnish their PAN, contact details (postal address with PIN and mobile number), bank account details & specimen signature ("KYC") and choice of Nomination. Further, relevant FAQs published by SEBI on its website can be viewed at the following link: https://www.sebi.gov.in/sebi data/faqfiles/jan- 2024/1704433843359.pdf 299 LARSEN & TOUBRO Notice Members holding shares in physical form are requested to furnish Form ISR-1, Form ISR-2 and SH-13 (available on the Company's website at https://investors.larsentoubro.com/ DownloadableForms.aspx#) to update KYC and choice of Nomination (in case the same are not already updated), to KFin Technologies Limited ("KFintech"), Selenium Tower B, Plot Nos. 31 & 32, Financial District, Nanakramguda, Serilingampally, Hyderabad - 500032, who are the Company's Registrar and Share Transfer Agents, so as to reach them latest by the Record Date i.e. Thursday, June 20, 2024. Alternatively, members may send the documents by email to KFintech at einward.ris@kfintech.com or upload on their webportal https://ris.kfintech.com, provided in both cases the documents furnished shall have digital signature of the holders. In respect of members holding shares in demat mode, the details as would be furnished by the Depositories as on the Record Date will be considered by the Company. Hence, members holding shares in demat mode are requested to update their details with their Depository Participants at the earliest. [d] TDS on Dividend: 300 Dividend income is taxable in the hands of shareholders and the Company is required to deduct tax at source from dividend paid to shareholders at the prescribed rates. Also, please note that the TDS rate would vary depending on the residential status, category of the shareholder, compliant/ non-compliant status in terms of Section 206AB of the Income Tax Act, 1961 and is subject to submission of all the requisite declarations/documents to the Company. For the prescribed rates for various categories, the shareholders are requested to refer to the Income Tax Act, 1961. The Company will be sending a communication to the shareholders with the details of applicable tax rates to different categories of shareholders and the documents/details required to be submitted by the shareholders. These details would also be also available on the website of the Company at https://investors.larsentoubro.com/ listing-compliance-agm.aspx. Members are requested to provide the documents/ details to KFintech within the time prescribed in the communication being sent to the shareholders in order to enable us to determine the appropriate rate at which tax has to be deducted at source under the respective provisions of the Income-tax Act, 1961. [e] Dispatch of AGM Notice and Integrated Annual Report through electronic mode: Members attending the Meeting through VC/OAVM will be counted for the purposes of Quorum under Section 103 of the Act. The attendance through VC/OAVM is restricted and hence members will be allowed on first come first serve basis. However, as per the MCA Circulars, attendance of Members holding more than 2% of the shares of the Company, Institutional Investors as on the Cut-off Date, Directors, Key Managerial Personnel and Auditors will not be restricted on first come first serve basis. Members who are shareholders as on Thursday, June 27, 2024 ("Cut-off Date”) can join the AGM 30 minutes before the commencement of the AGM i.e at 2:30 P.M. and till the time of the conclusion of the Meeting by following the procedure mentioned in this Notice. No attendance slip/route map has been sent along with this Notice as the meeting is held through VC/ OAVM. Statutory Reports Financial Statements 16) Ratification of remuneration payable to Cost Auditors for FY 2024-25: To consider and, if thought fit, to pass as an ORDINARY RESOLUTION the following: Integrated Report This explanatory statement is in terms of Regulation 36(5) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"). In line with the MCA Circulars and SEBI Circulars, this Notice along with the Integrated Annual Report for FY 2023-24 is being sent by electronic mode to those Members whose email addresses are registered with the Company/Depositories/ Depositary Participants/KFintech. Members may note that the Notice and Integrated Annual Report for FY 2023-24 will also be available on the Company's website www.larsentoubro.com, websites of the Stock Exchanges i.e. BSE Limited and National Stock Exchange of India Limited at www.bseindia.com and www.nseindia.com respectively and on the website of National Securities Depository Limited (NSDL) at www.evoting.nsdl.com. Hard copy of the full Integrated Annual Report will be sent to shareholders who request for the same. 'RESOLVED THAT pursuant to Section 148 and other applicable provisions, if any, of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, the Company hereby ratifies the remuneration of 18 lakhs plus applicable taxes and out of pocket expenses at actuals for travelling and boarding/ lodging for the financial year ending March 31, 2025 to M/s R. Nanabhoy & Co. Cost Accountants (Regn. No. 000010), who are appointed as Cost Auditors to conduct the audit of cost records maintained by the Company for the Financial Year 2024-25." By Order of the Board of Directors For LARSEN & TOUBRO LIMITED SIVARAM NAIR A COMPANY SECRETARY & COMPLIANCE OFFICER M.NO - F3939 [a] The information required to be provided under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") and Secretarial Standard - 2 on General Meetings, regarding the Directors who are proposed to be appointed/re-appointed and the relative Explanatory Statement pursuant to Section 102 of the Companies Act, 2013 ("the Act"), in respect of the business under items 6 to 16 set out above are annexed hereto. [b] Meeting through VC/OAVM Ministry of Corporate Affairs ("MCA") vide its Circular No. 9/2023 dated September 25, 2023 (In continuation with the Circulars issued earlier in this regard) ("MCA Circulars") has allowed conducting Annual General Meeting (AGM) through Video Conferencing (VC) or Other Audio-Visual Means (OAVM) without the physical presence of Members at a common venue till September 30, 2024. The MCA Circulars prescribe the procedures and manner of conducting the AGM through VC/OAVM. In compliance with the applicable provisions of the Act and MCA Circulars, the 79th AGM of the Members will be held through VC/OAVM. Hence, Members can attend and participate in the AGM through VC/OAVM only. Since this AGM is being held through VC/OAVM the physical attendance of members is dispensed with and no proxies would be accepted by the Company pursuant to the MCA Circulars and SEBI Circular No. SEBI/HO/CFD/CFD-POD-2/P/CIR/2023/167 dated October 7, 2023 (in continuation with the Circulars issued earlier in this regard) ("SEBI Circulars"). Hence, no proxy form has been sent alongwith this Notice. Mumbai, May 8, 2024 NOTES: The Company will also be publishing an advertisement in newspapers containing the details about the AGM i.e., the conducting of AGM through VC/OAVM, date and time of AGM, availability of notice of AGM at the Company's website, manner of registering the email IDs of those shareholders who have not registered their email addresses, manner of providing mandate for dividends, and other matters as may be required. [f] Procedure for registration of email address by shareholders: 1. Those Members who have not yet registered their email address are requested to get their email addresses registered by following the procedure given below: 2. 3. DownloadableForms.aspx# and on the website of the KFintech at https://ris.kfintech.com. It may be noted that any service request can be processed only after the folio is KYC compliant. SEBI on January 24, 2022 has amended SEBI Listing Regulations and has mandated that transfer of securities should be done in dematerialized form only. In view of the same and to eliminate all risks associated with physical shares and to avail various benefits of dematerialisation, Members are advised to dematerialise the shares held by them in physical form. [h] Inspection of Documents: The Register of Directors and Key Managerial Personnel and their shareholding maintained under Section 170 of the Act, the Register of Contracts or Arrangements in which the directors are interested, maintained under Section 189 of the Act, and the relevant documents referred to in the Notice will be available electronically for inspection by the members during the e-voting period and the AGM. All shareholders will also be able to inspect all documents referred to in the Notice electronically without any fee from the date of circulation of this Notice up to the date of AGM. Members seeking to inspect such documents may send an email request to LNTGOGREEN@larsentoubro.com. [i] Transfer of unclaimed dividend and shares to IEPF: 2. Members may please note that SEBI vide its Circular No. SEBI/HO/MIRSD/MIRSD_RTAMB/P/ CIR/2022/8 dated January 25, 2022 has mandated listed companies to issue securities in dematerialized form only while processing service requests viz. Issue of duplicate securities certificate; claim from unclaimed suspense account; renewal/ exchange of securities certificate; endorsement; sub-division/ splitting of securities certificate; consolidation of securities certificates/folios; transmission and transposition. Accordingly, Members are requested to make service requests by submitting a duly filled and signed Form ISR - 4, the format of which is available on the Company's website at https://investors.larsentoubro.com/ 1. Dividend No. Date of Declaration For the year ended Due for Transfer on 88 Pursuant to Section 124 of the Act the unpaid dividends that are due for transfer to the Investor Education and Protection Fund (IEPF) are as follows: 31.03.2017 einward.ris@kfintech.com or upload on their webportal https://ris.kfintech.com, provided in both cases the documents furnished shall have digital signature of the holders. For the purpose of updation of KYC and choice of Nomination, members are requested to send the necessary forms (ISR-1, ISR-2 and SH-13) along with the necessary attachments mentioned in the said Forms to KFintech, Selenium Tower B, Plot Nos. 31 & 32, Financial District, Nanakramguda, Serilingampally, Hyderabad - 500032. a) Members holding shares in physical form are requested to furnish Form ISR-1, Form ISR-2 and SH-13 (available on the Company's website at https://investors.larsentoubro.com/ DownloadableForms.aspx) along with the necessary attachments mentioned in the said Forms to KFintech, Selenium Tower B, Plot Nos. 31 & 32, Financial District, Nanakramguda, Serilingampally, Hyderabad - 500032. Members may also email the duly filled forms to einward.ris@kfintech.com. This will enable the shareholders to receive electronic copies of the Integrated Annual Report for FY 2023-24 and this Notice. b) Members holding shares in demat form may update their email address and other details with their respective Depository Participants. Members who have already registered their email addresses are requested to get their Integrated Annual Report 2023-24 Corporate Overview Alternatively, members may send the documents by email to KFintech at Management Discussion and Analysis Statutory Reports Financial Statements 1. email addresses validated with their Depository Participants/ KFintech to enable servicing of notices/documents / Annual Reports electronically to their email address. [g] Important Information for Shareholders: Members may note that as per SEBI Master Circular No. SEBI/HO/MIRSD/POD-1/P/CIR/2024/37 dated May 7, 2024, it is mandatory for all holders of physical securities in listed entities to update their KYC and choice of Nomination with the Registrar and Share Transfer Agent ('RTA'), in case they have not updated the same. As per the SEBI Circular, effective from April 1, 2024, RTA i.e. KFintech will attend to all service requests of the shareholders with respect to transmission, dividend, etc., only after updating the above details in the records. As per the aforesaid SEBI Circular, members holding securities in physical form may note that any future dividend payable against their shareholding would be withheld if their KYC and choice of Nomination are not updated with the RTA. Integrated Report 1. Existing IDeAS user can visit the e-Services website of NSDL Viz. https://eservices.nsdl.com either on a Personal Computer or on a mobile. On the e-Services home page click on the "Beneficial Owner" icon under "Login" which is available under 'IDEAS' section, this will prompt you to enter your existing User ID and Password. After successful authentication, you will be able to see e-voting services under Value added services. Click on "Access to e-voting" under e-voting services and you will be able to see e-voting page. Click on company name 28.09.2025 303 After you click on the "Login" button, home page of e-voting will open. Step 2: Cast your vote electronically and join General Meeting on NSDL e-voting system. 1. 2. 3. 4. After successful login at Step 1, you will be able to see all the companies "EVEN" in which you are holding shares and whose voting cycle and General Meeting is in active status. 9. Select "EVEN 128746" to cast your vote during the remote e-voting period and casting your vote during the AGM. For joining virtual meeting, you need to click on "VC/OAVM" link placed under "Join General Meeting". Cast your vote by selecting appropriate options i.e. assent or dissent, verify / modify the number of shares for which you wish to cast your vote and click on "Submit" and also "Confirm" when prompted. 5. Upon confirmation, the message "Vote cast successfully" will be displayed. 2. 3. 4. 5. "Physical User Reset Password?" option available on www.evoting.nsdl.com to reset the password. Now you are ready for e-voting as the Voting page opens. In case of any queries relating to e-voting you may refer to the FAQs for Shareholders and e-voting user manual for Shareholders available at the download section of www.evoting.nsdl.com or call on 022 4886 7000 or send a request at evoting@nsdl.com. button. After entering your password, tick on Agree to "Terms and Conditions" by selecting on the check box. b) If you are using NSDL e-voting system for the first time, you will need to retrieve the 'initial password' which was communicated to you by NSDL. Once you retrieve your 'initial password', you need to enter the 'initial password' and the system will force you to change your password. If How to retrieve your 'initial password'? i) If your e-mail ID is registered in your demat account or with the company, your 'initial password' communicated to you on your e-mail ID. Trace the e-mail sent to you from NSDL in your mailbox. Open the e-mail and open the attachment i.e. a .pdf file. The password to open the .pdf file is your 8-digit client ID for NSDL account, last 8 digits of client ID for CDSL account or folio number for shares held in physical form. The .pdf file contains your 'User ID' and your 'initial password'. ii) If your email ID is not registered, please follow steps mentioned below in process for those shareholders whose email ids are not registered. you are unable to retrieve or have not received the 'initial password' or have forgotten your password: a) Click on "Forgot User Details/ Password?" (If you are holding shares in your demat account with NSDL or CDSL) option available on www.evoting.nsdl.com. 8. Now, you will have to click on "Login" b) Click on "Physical User Reset Password?" (If you are holding shares in physical mode) option available on www.evoting.nsdl.com. 305 306 LARSEN & TOUBRO Notice number, your PAN, your name and your registered address. d) Members can also use the one-time password (OTP) based login for casting the votes on the e-voting system of NSDL. 7. c) If you are still unable to get the password by aforesaid two options, you can send a request at evoting@nsdl.com mentioning your demat account number / folio a) If you are already registered for e-voting, then you can use your existing password to login and cast your vote. Members who need assistance before or during the AGM, can contact NSDL on evoting@nsdl.com/ or call at 022 4886 7000. Institutional shareholders (i.e. other than individuals, HUF, NRI, etc.) are required to send scanned copy (PDF/JPG format) of the relevant Board Resolution/Authority letter etc., together with attested specimen signature of the duly authorized signatory(ies) who are authorized to vote, to the Scrutinizer through e-mail to scrutinizer@snaco.net, with a copy marked to evoting@nsdl.com. Institutional shareholders (i.e. other than individuals, HUF, NRI etc.) can also upload their Board Resolution / Power of Attorney / Authority Letter etc. by clicking on "Upload Board Resolution / Authority Letter" displayed under "e-voting" tab in their login. Process for those shareholders whose email ids are not registered with the depositories for obtaining user id and password and registration of email ids for e-voting on the resolutions set out in this Notice: The instructions for members for e-voting on the day of the AGM are as under:- 1. The procedure for e-voting on the day of the AGM is same as the instructions mentioned above for remote e-voting. 2. Only those Members/ shareholders, who will be present in the AGM through VC/OAVM facility and have not cast their vote on the Resolutions through remote e-voting and are otherwise not barred from doing so, shall be eligible to vote through e-voting system in the AGM. 3. Members who have voted through remote e-voting will be eligible to attend the AGM. However, they will not be eligible to vote at the AGM. 4. The contact details for any grievances connected with respect to the facility for e-voting on the day of the AGM shall be the same as mentioned for remote e-voting. [m] Live Webcast of the AGM: 3. Alternatively, shareholder/members may send a request to evoting@nsdl.com for procuring user id and password for e-voting by providing above mentioned documents. Members will be able to view the live webcast of AGM provided by NSDL at www.evoting.nsdl.com following the steps mentioned above for login to NSDL e-voting system. or e-voting service provider i.e. NSDL and you will be re-directed to e-voting website of NSDL for casting your vote during the remote e-voting period or joining virtual meeting & voting during the meeting. The Company has appointed Mr. S. N. Ananthasubramanian, Practicing Company Secretary, (Membership No. 4206, COP No. 1774) or failing him Mrs. Aparna Gadgil, Practicing Company Secretary, (Membership No. 14713, COP No. 8430), to act as the Scrutinizer for conducting the voting and remote e-voting process in a fair and transparent manner. The Scrutinizer will submit his report to the Chairman or any person authorised by him, after completion of the scrutiny. The result of the voting on the Resolutions moved at the Meeting shall be announced by the Chairman or any other person authorized by him, immediately after the results are declared. Based on the report received from the Scrutinizer, the Company will submit details of the voting results within 2 working days to the stock exchanges as required under Regulation 44(3) of the Listing Regulations. The results declared alongwith the Scrutinizer's report, will be hosted on the website of the Company www.larsentoubro.com and on the website of NSDL at https://evoting.nsdl.com and will be displayed on the Notice Board of the Company at its Registered Office as well as Corporate Office immediately after the declaration of the result by the Chairman or any person authorised by him in writing and communicated to the Stock Exchanges. EXPLANATORY STATEMENT As required by Section 102 of the Companies Act, 2013 ("the Act"), the following Explanatory Statement sets out material facts relating to the business under items 6 to 16 of the accompanying Notice dated May 8, 2024. Item No. 6 After successful login, you can see Webcast link placed under "Join Meeting" menu against the Company name. You are requested to click on Webcast link- placed under "Join Meeting" menu. A Member can opt for only one mode of voting i.e. either through remote e-voting or at the Meeting. If a Member has cast his vote by remote e-voting then he will not be eligible to vote at the Meeting. explained at point I above i.e. Login method for e-voting and joining virtual meeting for Individual shareholders holding securities in demat mode. Reports 1. 6. You can also take the printout of the votes cast by you by clicking on the print option on the confirmation page. 7. Once you confirm your vote on the resolution, you will not be allowed to modify your vote. General Guidelines for shareholders 1. Financial Statements It is strongly recommended not to share your password with any other person and take utmost care to keep your password confidential. Login to the e-voting website will be disabled upon five unsuccessful attempts to key in the correct password. In such an event, you will need to go through the "Forgot User Details/Password?" or In case shares are held in physical mode please provide Folio No., Name of shareholder, scanned copy of the share certificate (front and reverse), PAN (self attested scanned copy of PAN card), AADHAR (self attested scanned copy of Aadhar Card) through email to igrc@larsentoubro.com. In case shares are held in demat mode, please provide DPID-CLID (16 digit DPID + CLID or 16 digit beneficiary ID), Name, client master or copy of Consolidated Account statement, PAN (self attested scanned copy of PAN card), AADHAR (self attested scanned copy of Aadhar Card) to igrc@larsentoubro.com. If you are an individual shareholder holding securities in demat mode, you are requested to refer to the login method Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Report Statutory 2. Password details for shareholders other than individual shareholders are given below: [n] Information regarding Scrutinizer and declaration of Voting results: 5. 6. You can also login using the login credentials of your demat account through your Depository Participant registered with NSDL/ CDSL for e-voting facility. Upon logging in, you I will be able to see e-voting option. Click on e-voting option, you will be redirected to NSDL/CDSL Depository site after successful authentication, wherein you can see e-voting feature. Click on company name or e-voting service provider i.e. NSDL and you will be redirected to e-voting website of NSDL for casting your vote during the remote e-voting period or joining virtual meeting & voting during the meeting. Important note: Members who are unable to retrieve User ID / Password are advised to use Forgot User ID and Forgot Password option available at respective websites. Helpdesk for Individual Shareholders holding securities in demat mode for any technical Integrated Annual Report 2023-24 Corporate Overview Management Integrated Statutory Financial Discussion and Analysis Report Reports 3. If the user is not registered for Easi/ Easiest, option to register is available at CDSL website www.cdslindia.com. Shareholders are requested to click on 'login' & 'New System Myeasi' Tab and then click on 'registration' option. information provided by the Company. On clicking the evoting option, the user will be able to see e-voting page of the e-voting service provider for casting your vote during the remote e-voting period or joining virtual meeting & voting during the meeting. Additionally, there is also link provided to access the system of all e-voting Service Providers, so that the user can visit the e-voting service providers' website directly. Login Method (holding securities in demat mode) login through their depository participants 304 LARSEN & TOUBRO Notice Type of shareholders Individual Shareholders holding securities in demat mode with CDSL Login Method 2. If you are not registered for IDEAS e-Services, option to register is available at https://eservices.nsdl.com. Select "Register Online for IDEAS Portal" or visit URL https://eservices.nsdl.com/SecureWeb/ IdeasDirectReg.jsp Statements 3. Visit the e-voting website of NSDL. Open web browser and type the following URL: https://www.evoting.nsdl.com/ either on a Personal Computer or on a mobile. Once the home page of e-voting system is launched, click on the icon "Login" which is available under 'Shareholder/Member' section. A new screen will open. You will have to enter your User ID (i.e. your sixteen digit demat account number held with NSDL), Password/ OTP and a Verification Code as shown on the screen. After successful authentication, you will be redirected to NSDL Depository site wherein you can see e-voting page. Click on company name or e-voting service provider i.e. NSDL and you will be redirected to e-voting website of NSDL for casting your vote during the remote e-voting period or joining virtual meeting & voting during the meeting. NSDL Mobile App is available on App Store Google Play 1. Users who have opted for CDSL Easi / Easiest facility, can login through their existing user id and password. Option will be made available to reach e-voting page without any further authentication. The users to login Easi /Easiest are requested to visit CDSL website www.cdslindia.com and click on login icon & New System Myeasi Tab and then use your existing my easi username & password. 2. After successful login the Easi / Easiest user will be able to see the e-voting option for eligible companies where the evoting is in progress as per the Type of shareholders Individual Shareholders 4. Shareholders/Members can also download NSDL Mobile App "NSDL Speede" facility by scanning the QR code mentioned below for seamless voting experience. issues related to login through Depository i.e. 4. Alternatively, the user can directly access e-voting page by providing Demat Account Number and PAN No. from a e-voting link available on www.cdslindia.com home page. The system will authenticate the user by sending OTP on registered Mobile & Email as recorded in the Demat Account. After successful authentication, user will be able to see the e-voting option where the evoting is in progress and also able to directly access the system of all e-voting Service Providers. Login type hold shares in demat account with CDSL For Members holding shares in Physical Form Your User ID is: 8 Character DP ID followed by 8 For example, if your DP ID is IN300 and Client ID is 12****** then your user ID is IN300***12****** 16 Digit Beneficiary ID For example, if your Beneficiary ID is 12** then your user ID is 12************** EVEN Number followed by Folio Number registered with the company. NSDL and CDSL. user ID is 123456001** For example, if EVEN is 123456 *** and folio number is 001*** then For Members who account with NSDL Digit Client ID For Members who Individual Shareholders holding securities in demat mode with NSDL Individual Shareholders holding securities in demat mode with CDSL Helpdesk details Members facing any technical issue in login can contact NSDL helpdesk by sending a request at evoting@nsdl.com or call at 022- 4886 7000 Members facing any technical issue in login can contact CDSL helpdesk by sending a request at helpdesk.evoting@cdslindia.com or contact at toll free no. 1800 22 55 33 II. Login method for e-voting for shareholders other than Individual shareholders holding securities in demat mode and shareholders holding securities in physical mode. hold shares in demat 2. 3. 1. Visit the e-voting website of NSDL. Open web browser and type the following URL: www.evoting.nsdl.com either on a personal computer or on a mobile. Once the home page of e-voting system is launched, click on the icon "Login" which is available under "Shareholders / Member" section. (NSDL or CDSL) or Physical shares i.e. Demat 4. Your User ID details are given below: 2 i.e. cast your vote electronically. Manner of holding A new screen will open. You will have to enter your User ID, your Password / OTP and a Verification Code as shown on the screen. Alternatively, if you are registered for NSDL e-services i.e. IDeAS, you can log-in at https://eservices.nsdl.com/ with your existing IDEAS login. Once you log-in to NSDL e-services after using your log-in credentials, click on e-voting and you can proceed to Step Integrated Annual Report 2023-24 Corporate Overview Management Notice company. by the value of the proposed transaction obligations under the terms of its agreement with the banks, the Company will be required to provide funds to the subsidiary Integrated Statutory Financial Discussion and Analysis Report Reports Statements Particulars 0.90% Resolution No. 10 turnover for the immediately preceding financial year (i.e FY 2023-24) that is represented consolidated Company's annual 1.27% 0.54% 0.68% 1.94% 2.17% 5.65% Percentage of the NIL Any advance paid or received for the transaction Resolution No. 15 Resolution No. 14 Resolution No. 13 Resolution No. 12 Resolution No. 11 Resolution No. 9 is unable to meet its Not Applicable as no indebtedness shall be incurred the eventuality LTMRHL The PCGS will be provided on an arm's length The tenure, interest rate, security and repayment schedule of the ICD will be determined based on the requirement of funds and will be done in compliance with the provisions of the Act. The PCGS will be provided at an arm's length basis and a fee would be charged. The present charges are 0.30% per annum for Performance Guarantees, which is benchmarked with the Company's existing bank guarantee charges. Not Applicable Not Applicable Not Applicable Not Applicable basis and a fee would Not Applicable by the Company Details about If any financial indebtedness is incurred to make or give such loans/ advances/securities for loan and Nature of Indebtedness/ Cost of Funds/Tenure Applicable terms, including covenants, tenure, interest rate, repayment schedule, whether secured (nature of security) or unsecured connection with the proposed transaction source of funds in Not Applicable Not Applicable NIL, since funding, if any, will be through internal accruals. 312 be charged which will the Company's existing bank guarantee charges (presently the charges are 0.35% p.a. for Financial Guarantees). The PCGS will be valid till the maturity facilities from banks. In Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable LTMRHL has availed be benchmarked with Not Applicable availed by LTMRHL Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable of the borrowings to be Purpose for which funds will be utilised As the proposal relates to in the business of providing IT services. The Company, in the ordinary course of its business, generally procures various software and customized software solutions form LTIM. valuation, arms Resolution No. 11 Resolution No. 10 Resolution No. 9 Particulars Notice LARSEN & TOUBRO 313 of the Company are arising out of contracts received by the Company from NPCIL through competitive bidding. The commercial terms of transaction(s) are in line with usual business practices. Thus, the transactions can be deemed to be at arm's length. The transactions being executed by different verticals LTSSHF operates from a common campus in Hazira and expenses related to the same are apportioned by the Company to LTSSHF. The Heavy Engineering and Precision Engineering & Systems business of the Company bids for various projects (including defence contracts of the Government). The Company has been carrying out similar activities for several years in the past for these sectors and hence these transactions are in the ordinary course of business. The Heavy Engineering vertical of the Company manufactures and supplies custom designed critical equipment for Nuclear Power Plants. segment of the Heavy Civil Infrastructure vertical of the Company offers turnkey services, civil, mechanical, electrical, instrumentation and modular construction technology and also manufactures and supplies custom designed critical equipment for Nuclear Power Plants. The nuclear business B&F vertical of the Company proposes to construct commercial buildings/IT Parks for the use of LTIM. Rationale/Benefit of the transaction and why this transaction is in the interest of the Company Any other information relevant or important for the shareholders Not Applicable as sale of plant and machinery, scrap material, charges for lease of fabrication yard area, etc. with LTSSHF. Resolution No. 12 The Company also has other transactions such done through MFY which has the technical expertise, facilities and execution capabilities. The Energy & Hydrocarbon business of the Company bids for various EPC contracts. Customized fabrication activities are an essential t of execution part of such contracts. Such activities are normally LTMRHL requires working capital to fund its operations. It proposes to raise funds through bank borrowings. Considering its financial position, LTMRHL may not be able to raise funds without the support of the Company. The amount of funds raised will depend on the requirement of LTMRHL. Since the exact timing and amount of borrowing is not known at this point of time, an enabling approval is being sought from the shareholders. will enable the subsidiary company to get the funds at competitive rates which will benefit the group as a whole. Procurement and Construction of all types of building and factory structures. It provides concept to commissioning solutions for IT parks, office spaces, high rise towers and green buildings, metro stations, etc. The PCG is an essential part for enabling raising of funds by LTMRHL. This name of the customers. The Company is bound by confidentiality clause in the customer contract(s) and hence not in a position to disclose the exact particulars of the contracts including the country of operations. This will benefit the group as a whole. Issuance of such PCGS enables LTA to bid for and execute more EPC contracts in its The PCGS are an essential part of EPC contracts. LTA will not be awarded contracts without this requirement being fulfilled. decisio to take an informed The ICD would enable LTMRHL to service the interest component of the bank borrowings availed by LTMRHL. As the proposal relates domain knowledge, requisite expertise and wide-ranging experience to undertake Engineering, LTIM also provides the support required on the software subsequently. The Precision Engineering & Systems business provides concept-to-design to-delivery customised solutions across chosen strategic segments with a focus on indigenous design and emphasis on creating Indian Intellectual Property (IP). The business is structured to provide direction to various The Heavy Engineering business manufactures and supplies custom designed equipment & critical piping to process industries such as fertilizer, chemical, refinery, petrochemical, and oil & gas, as well as to sectors such as thermal & nuclear power and aerospace. The Company obtains quotations from various parties for its fabrication fabricated structures as per the contract specifications. far as Indian projects are concerned, the Company has its own fabrication facilities in India. In case of overseas projects, the Company generally uses such facilities outside India to save on logistics costs. Thus, availing fabrication services is an activity in the normal course of business. As The Company is in the business of bidding for various EPC contracts in India as well as overseas. Most of the EPC projects involve use of customized The PCGS will be provided at an arm's length basis and a fee would be charged. The present charges are 0.35% per annum for Financial Guarantees which is benchmarked with the Company's existing bank guarantee charges. The ICD will be provided an arm's length basis and interest will be charged in accordance with provisions of the Act. at on behalf of LTMRHL the question of valuation does not arise. The PCGS will be provided at an arm's length basis and a fee would be charged. The present charges are 0.30% per annum for Performance Guarantees, which is benchmarked with the Company's existing bank guarantee charges. length and ordinary_Guarantees on behalf of LTA course of business the question of valuation does not arise. providing Parent Company Company Guarantees to providing ICDs/Parent The Power business of the Company is into construction and commissioning of power plants. Boilers are a critical component of the power plant and hence procurement of Boilers is in the ordinary course of business for the Company. LMB is a joint venture of the Company with Mitsubishi Heavy Industries Limited (MHI) and is part of the technical collaboration which is engaged in construction and commissioning of power plants. While bidding for a project, the technical qualifications of MHI adds to the pre- qualifications of the activities and based on the segments of operations, as Company. The Company is price, quality, timelines, subsidiary of the Company engaged LTIMindtree is a listed LMB operates from common campuses across the country and expenses related to the same are apportioned by the Company to LMB. The Company also avails infrastructure and business support services with respect to Boilers from LMB. charged a price comparable with what LMB charges to its other customers. Hence the transaction is at arm's length. quality are also considered before deciding on the procurement. comparable quotes. Factors such as timeliness and Buildings & Factories (B&F) business vertical of the Company is equipped with the is decided based on course of business of the Company. c) Aerospace Systems Both these businesses require customized forging. Hence procurement of forgings is in the ordinary b) Land Platforms, Equipment, and Systems a) Marine Platforms, Equipment, and Systems under: MFY also quotes for such contracts and gets selected only if the quote is competitive. etc., the contract gets finalized. The businesses procure forgings from LTSSHF as well as external vendors and hence arm's length Not Applicable Reports Internal accruals Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 310 The shareholders of the Company at the previous AGM held on August 9, 2023 had approved a similar proposal for entering/continuing to enter into material related party transactions with these Related Parties, which is valid till this AGM. The proposed transactions, being operational and critical in nature, play a significant role in the Company's business. Therefore, in order to secure continuity of operations, the Company is proposing to seek approval of shareholders for the potential quantum of transactions with the aforesaid related parties. The Company has been undertaking transactions of similar nature in the past in the ordinary course of business and on arm's length after obtaining requisite approvals of the Audit Committee of the Company. The maximum annual value of the proposed transactions with the aforesaid related parties is estimated on the basis of the Company's current transactions with them and the future business prospects. Given the nature and scope of the business, the Company works closely with its related parties (including subsidiaries) to achieve its business objectives and enters into various operational transactions with its related parties, from time to time, in the ordinary course of business and on arm's length. Amongst the transactions that Company enters into with its related parties, the estimated value of the contracts/arrangements/transactions with L&T-MHI Power Boilers Private Limited, L&T Special Steels and Heavy Forgings Private Limited, L&T Modular Fabrication Yard LLC and LTIMindtree Limited, subsidiaries of the Company ("Related Parties"), are likely to exceed the threshold of material Related Party Transactions. Transactions with Other Subsidiaries: The shareholders through a resolution passed by Postal Ballot on January 18, 2024, approved a proposal for entering into material related party transactions upto an amount not exceeding 3,600 crore with LTMRHL. The Company is seeking renewal of approval as well as approval for certain additional transactions at this AGM to ensure continuity of business. Accordingly, approval of the shareholders is sought for issuance of PCGs on behalf of LTMRHL, providing ICDs and entering into other transactions in the ordinary course of business, for an amount not exceeding 4,800 crore. Further, the Company also proposes to avail/render services from/to LTMRHL and also lease property to/from LTMRHL in the ordinary course of business. Company will be required to provide funding support by way of an Inter Corporate Deposit (ICD) to LTMRHL. Additionally, LTMRHL has availed facilities from banks. In the eventuality LTMRHL is unable to meet its obligations under the terms of its agreement with the banks, the LTMRHL has raised debt in the form of Non-Convertible Debentures and Commercial Papers. LTMRHL is contemplating setting up bank borrowing limits in case the market conditions are not favourable for borrowings through Non-Convertible Debentures and Commercial Papers. These borrowings would be utilized to pay off the existing Non-Convertible Debentures and Commercial Papers as per the respective maturities. The Company will be required to issue Parent Corporate Guarantee(s) for the bank borrowing of LTMRHL. Integrated Statutory Report Reports L&T Modular Fabrication Name of the Related Larsen Toubro Arabia LLC (LTA) L&T Metro Rail (Hyderabad) Parties Resolution No. 11 Resolution No. 10 Resolution No. 9 Particulars The shareholders of the Company at the previous AGM held on August 9, 2023 had approved a similar proposal for entering/continuing to enter into material related party transaction(s) upto an amount not exceeding ₹ 3,000 crore with NPCIL which is valid till this AGM. The Company is seeking a renewal of the approval at this AGM to ensure continuity of business with NPCIL. LTMRHL is a subsidiary of the Company formed for the development of Hyderabad Metro Rail Project. The Project spans 69.20 Km across three elevated corridors in Hyderabad City. The Project has been developed on DBFOT (Design, Build, Finance, Operate and Transfer) basis under a Public Private Partnership model. The proposed transactions, being operational and critical in nature, play a significant role in the Company's business and are equally critical for the Government of India. The said contracts/arrangements/transactions are commercially beneficial and in the interest of the Company. plants of NPCIL. The estimated value of the contracts/ arrangements/transactions with NPCIL, over the next one year is 2,800 crore, which shall exceed the threshold of material Related Party Transactions. ADDITIONAL DETAILS OF ALL RELATED PARTY TRANSACTIONS The Heavy Engineering vertical of the Company sells steam generators, end shields and fittings, etc. for the various Nuclear Power Plants of NPCIL. The Heavy Civil Infrastructure vertical of the Company carries out various civil and construction works and provides service package equipment, components, systems, etc for atomic power Transactions between a listed entity and related parties of its subsidiaries are considered as a Related Party Transaction pursuant to amendment in the definition of related party transactions under the Listing Regulations. Hence, transactions between the Company and Nuclear Power Corporation of India Limited (NPCIL) (Related Party of a subsidiary viz. L&T Special Steels and Heavy Forgings Private Limited) shall be treated as Related Party Transactions. NPCIL is a public sector undertaking owned by the Government of India and is responsible for design, construction, commissioning and operation of Nuclear Power Plants. Transactions with Nuclear Power Corporation of India Limited: The Company is seeking renewal of approval at this AGM to ensure continuity of business. Financial Statements The Company has been undertaking transactions of similar nature in the past which were entered in the ordinary course of business and at arm's length. The value of the proposed transactions with NPCIL is estimated on the basis of the Company's current transactions and the future business prospects. The Company is seeking renewal of approval at this AGM to ensure continuity of business. This will enable LTA to procure EPC contracts and benefit the group as a whole. Transactions with L&T Metro Rail (Hyderabad) Limited (LTMRHL): 12,500 Accordingly, an enabling approval of the shareholders is sought for issuance of PCGs on behalf of LTA upto 12,500 crore or USD 1500 Mn, whichever is higher. The shareholders through a resolution passed by Postal Ballot on January 18, 2024, approved issuance of PCGS on behalf of LTA upto an amount not exceeding crore or USD 1500 Mn, whichever is higher. same, it is proposed to amend the AOA of the Company by deleting Article 107 pertaining to qualification shares. Article 107 of the Articles of Association (AOA) of the Company mandates Directors to hold 100 qualification shares at the time of appointment or acquire them within a period of two months from the date of appointment. There is no regulatory requirement which mandates Directors to hold qualification shares. Considering the Amendment to Articles of Association of the Company by deleting Article 107 pertaining to qualification shares. Item No. 8: Except Mr. Siddhartha Mohanty, being the appointee, none of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, financially or otherwise, in the resolution set out at Item No. 7. Disclosure as required under Secretarial Standard 2 on General Meetings is provided as an Annexure to the Notice. The Board considers that his association would be of immense benefit to the Company and it is desirable to avail services of Mr. Siddhartha Mohanty as a Director. Accordingly, the Board recommends the resolution in relation to appointment of Mr. Siddhartha Mohanty as a Director representing equity interest of LIC, for the approval by the shareholders of the Company. He chairs the Boards of various National and International Subsidiaries and Associate Companies of LIC. In addition, he is the Chairperson of the Council of Insurance Ombudsman, Chairman of the Governing Board of National Insurance Academy and a member of the Council of the Institute of Actuaries of India. The amended draft AOA is available for inspection of the members in the manner specified in this Notice. He joined LIC as a Direct Recruit Officer in 1985. During his tenure of almost four decades, he has gained a 360 degree knowledge and experience in every domain of Life Insurance. He has worked in Marketing, HR, Legal and Investments. Among the positions he held, most notable were Sr. Divisional Manager In charge, Regional Manager of Marketing Vertical, Chief of Investment, Executive Director (Legal) and CEO of LIC Housing Finance Ltd, a listed Associate Company of LIC and one of the largest Housing Finance Companies in India. Immediately before becoming Chairperson, Mr. Mohanty had worked as Managing Director of LIC. Brief Profile: Financial Statements Statutory Integrated Report Management Discussion and Analysis Corporate Overview Some of these contracts Mr. Siddhartha Mohanty is Chairperson of LIC which with its more than $500 billion reserves, is the fourth largest insurer globally. He is a post-graduate in Political Science, having Bachelor's degree in Law and a Post Graduate Certification in Business Management. Mr. Mohanty is an avid reader and embraces technological advances with enthusiasm. Limited (LTMRHL) As per the provisions of the Act, alteration of the Articles of Association of the Company requires approval of the shareholders of the Company by means of a Special Resolution. The Board of Directors at its meeting held on May 8, 2024, has accorded its approval to the proposed alteration of the Articles of Association, subject to approval of the shareholders. Accordingly, approval of the shareholders is sought for amendment of the Articles of Association. None of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, financially or otherwise, in the resolution set out at Item No. 8 except to the extent of qualification shares held/to be acquired by Directors of the Company. 12,500 crore or USD 1500 Mn, whichever is higher, in favour of LTA as per the requirements of the customers with respect to the projects. Based on the expected probability of winning the bid, the Company will be required to provide PCGs of value upto Considering the increasing localization requirements in the Middle East, it has become imperative for the Company to bid for projects through its local subsidiaries. The Company had in the past provided similar PCGs in favour of various subsidiaries operating in the Middle East. However, post the amendment in the definition of material related party transactions, the aforesaid proposal now requires prior approval of the shareholders. contract. to the full value of the In Kingdom (IK) portion of the contract. Such PCGs are to be issued upfront and remain valid till completion of all obligations under the awarded Notice LARSEN & TOUBRO The Directors recommend this resolution for approval of the shareholders. 309 Larsen Toubro Arabia LLC (LTA) was incorporated to bid and execute projects in the Kingdom of Saudi Arabia (KSA). The Company holds 75% stake in LTA with the remaining 25% being held by a local partner. Issuance of Parent Company Guarantees (PCGs) on behalf of Larsen Toubro Arabia LLC: 22,111.30 crore, the materiality threshold for seeking shareholders' approval is 1,000 crore. For this purpose, a Related Party Transaction will be considered 'material' if the transaction(s) to be entered into individually or taken together with previous transactions during a financial year exceeds 1,000 Crore or 10% of the annual consolidated turnover of the Company as per the last audited financial statements of the Company, whichever is lower. Considering that 10% of consolidated turnover of the Company as on March 31, 2024 was Pursuant to the provisions of Regulation 23(4) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), material related party transactions require approval of the shareholders through a resolution. Material Related Party Transactions Item Nos. 9 to 15: LTA has bid for certain large value contracts for engineering, procurement, construction and installation for various new offshore facilities and integration with existing installations in KSA. Generally, these bids have a condition which require issuance of PCGs for execution of the awarded projects. The value of these PCGs is equivalent Not Applicable Yard LLC (MFY) Resolution No. 12 L&T Special Steels and Heavy Forgings Private Limited (LTSSHF) Subsidiary Company(ies) Resolution No. 12 Resolution No. 11 Resolution No. 10 since the Company has been The transaction is in the ordinary course of business The PCGS will be valid till the completion of all statutory obligations under the relevant Engineering, Procurement and Construction (EPC) contract which is generally 3-5 years from the date of issuance. Resolution No. 9 party taken by a related securities for loan to providing loan(s)/ advances(s) or Transaction related Particulars LARSEN & TOUBRO 311 Resolution No. 13 Resolution No. 14 Resolution No. 15 issuing such PCGS for the past Not Applicable Details of the of 4,000 crore. Guarantee upto an amount and Parent Company (ICD) upto ₹750 crore Inter Corporate Deposit 2,800 required to give an Not Applicable Not Applicable Not Applicable Not Applicable The Company may be Not Applicable several years. Not Applicable 2,000 1,200 1,500 ** e) Providing parent company guarantees.* d) Inter-corporate deposits** c) Transfer or exchange of any resources, services or obligations to meet the Company's business objectives/requirements; b) Availing or rendering of services; a) Sale, purchase, lease or supply of goods, assets or property or equipment; is earlier and for an amount not exceeding 12,500 crore or USD 1500 Mn, whichever f) Availing inter-corporate borrowings.^ of fifteen months, whichever Guarantees (PCGS) on behalf Providing Parent Company terms, monetary value and particulars of the contract or arrangement Nature, duration, tenure, material Resolution No. 15 Nuclear Power Corporation of India Limited (NPCIL) Resolution No. 14 LTIMindtree Limited (LTIM) Resolution No. 13 L&T-MHI Power Boilers Private Limited (LMB) of LTA from this Annual General Meeting (AGM) till the next AGM or for a period Nature of Relationship ** ^ Only for LMB 4,300 4,800 NPCIL LTIM LMB LTSSHF MFY Only for LTMRHL LTMRHL Name of the Company The approval will be valid from this AGM till the next AGM or for a period of fifteen months, whichever is earlier in accordance with the terms and conditions of the contract/ agreement for the below mentioned amounts: be executed by LTA with its customers. the contract/agreement to the terms and conditions of NPCIL is Related Party of L&T Special Steels and Heavy Forgings Private Limited (Company's Subsidiary) as per Section 2(76) of the Act and hence transactions between the Company and NPCIL are Related Party Transactions pursuant to Regulation 2(1) (zc) of Listing Regulations is higher, in accordance with Amount (Crore) require procurement of forgings. LTSSHF is a prequalified supplier for most of the clients The above related party contracts/arrangements will materialize only if the Company succeeds in the tenders being participated. Since it is not possible to predict the exact amount of the contract(s), enabling approval of shareholders is being sought. The Power business of the Company bids for execution of a power plant project after taking into consideration various costs involved. Procurement of Boilers is an integral part of the installation of a power plant. Members may register themselves as a speaker by sending a request from their registered email address mentioning their name, DP ID and Client ID/folio number, PAN, mobile number to LNTGOGREEN@larsentoubro.com on or before the Cut-off Date i.e. Thursday, June 27, 2024. Will be made available post AGM at www.larsentoubro.com Final Dividend of 28 per equity share of face value of 2 each Special Dividend for FY 2023-24 of 6 per equity share has been paid to the shareholders on August 14, 2023. Thursday, June 20, 2024 Tentatively on Tuesday, July 9, 2024 Thursday, June 27, 2024 Sunday, June 30, 2024, 09.00 A.M 9. Record Date 10. Dividend Payment Date 11. Cut-off date for e-voting 12. 13. 14. Remote e-voting start time and date Remote e-voting end time and date Remote e-voting website of NSDL https://web.cdslindia.com/myeasitoken/home/login Shareholders who have opted for Easi facility of CDSL: 2. 1. Shares held in Demat mode with CDSL: Shareholders registered for NSDL IDEAS facility: https://eservices.nsdl.com Others: www.evoting.nsdl.com Members seeking any information with regard to the accounts or any matter mentioned in the AGM Notice, are requested to write to the Company on or before the Cut-off Date i.e. Thursday, June 27, 2024 via email at IGRC@larsentoubro.com. The same will be replied by the Company suitably. Shares held in Demat mode with NSDL: Email Registration and Contact Updation Process Name, address and contact details of e-voting service provider and registrar and transfer agent 16. 15. 2. 1. Wednesday, July 3, 2024, 05.00 P.M Members can login from 02.30 P.M. (IST) on the date of the AGM at www.evoting.nsdl.com. NSDL Helpline No. 022 4886 7000 Video Conference (VC) or Other Audio Visual Means (OAVM) Thursday, July 4, 2024, 3:00 P.M. INFORMATION AT A GLANCE: Statements Reports Financial Statutory Integrated Report Sr. no Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 316 None Relationships between directors inter-se Shareholding in the Company Management Others: www.cdslindia.com 1. 3. Details recommended by the Board Dividend for FY 2023-24 8. Transcript 7. 2. Speaker Registration before AGM Participation through VC/OAVM Helpline Number for VC/OAVM participation Day, Date and Time of AGM Mode Particulars 6. 5. 4. Submission of Questions/Queries before AGM Logging in through Depositary Participants: Members can also login using the login credentials of their demat account through your DP registered with NSDL/CDSL for e-voting facility. Registrar and Transfer Agent 1983.73 2150.46 9832.70 11454.79 586.47 9832.70 9304.33 10868.32 1751.01 11204.34 12619.33 2022-23 2023-24 crore 1371.64 The Company completed its maiden buyback during FY 2023-24. The Board of Directors at its meeting held on July 25, 2023, approved the buyback of equity shares through the Tender Offer route through stock exchange mechanism, amounting to 10000 crore (excluding tax and transaction costs). After seeking shareholders' approval through postal ballot, the Company bought back 3,12,50,000 equity shares representing 2.22% of the total issued and paid-up equity share capital of the Company as on March 31, 2023, at a price of 3200 per share. The buyback was offered to all eligible equity shareholders of the Company. Tendering period for the said buyback commenced on September 18, 2023 and concluded on 7848.97 31131.14 Resolution No. 13 AMOUNT TO BE CARRIED TO GENERAL RESERVE: The Company has not transferred any amount from profit and loss to general reserve during FY 2023-24. GREAT PLACE TO WORKⓇ The Company has been certified by Great Place to Work® Institute, as a "Great Place to Work® in India", for the second year running. This prestigious recognition, valued by employees and employers globally, reflects the Company's unwavering commitment to fostering a culture of trust and care. Building on last year's employee survey, each business unit held in-depth action planning workshops led by senior leaders. These collaborative sessions identified key areas for improvement, resulting in well-defined action plans to strengthen our workplace. The leadership team in the businesses led the action plan based on the last year's survey results to connect and engage with employees, underscoring the Company's dedication to creating a truly exceptional work environment. This recognition is a testament to the Company's 8-decade legacy of prioritizing a positive work experience, a source of immense pride for the L&T family. 318 Integrated Annual Report 2023-24 35863.32 September 25, 2023 and the payment was made on September 28, 2023. 40961.13 (25.37) 10.43 843.39 3091.42 3373.56 35863.32 None BUYBACK OF SHARES: The total income for the financial year under review was 131576.45 crore as against 114535.93 crore for the previous financial year, registering an increase of 14.88%. The Profit before exceptional items and tax was 10868.32 crore for the financial year under review as against Board Report LARSEN & TOUBRO 317 Please furnish Form ISR-1, Form ISR-2 and SH-13 (available on the Company's website at https://investors.larsentoubro.com/DownloadableForms.aspx) along with the necessary attachments mentioned in the said Forms to KFin Technologies Limited, Selenium Tower B, Plot Nos. 31 & 32, Financial District, Nanakramguda, Serilingampally, Hyderabad - 500032. Members may also email the duly filled forms to einward.ris@kfintech.com. Physical Shareholders: Contact respective Depository Participant Board Report Demat Shareholders: Trade World, A Wing, 4th Floor, Kamala Mills Compound, Lower Parel, Mumbai - 400013 Tel No: 022 4886 7000 National Securities Depositories Limited (NSDL) E-voting Service Provider Tel No: 1800-425-8998/1800-345-4001 Email: einward.ris@KFintech.com Serilingampally, Hyderabad - 500032 Selenium Tower B, Plot Nos. 31 & 32, Financial District, Nanakramguda, Email: evoting@nsdl.com * 9832.70 crore for the previous financial year. The profit after tax was 9304.33 crore for the financial year under review as against ₹7848.97 crore for the previous financial year, registering an increase of 18.54%. Dear Members, FINANCIAL RESULTS: PERFORMANCE OF THE COMPANY: Add/(Less): Gain/(loss) on remeasurement of the net defined benefits plans Balance to be carried forward Less: Special dividend paid Less: Dividend paid for the previous year Add: Balance brought forward from the previous year Net profit after tax The Directors have pleasure in presenting their 79th Integrated Annual Report and Audited Financial Statements of Larsen & Toubro Limited for the year ended March 31, 2024. Less: Provision for tax (including tax on exceptional items) Add: Exceptional Items Profit before exceptional items and tax Less: Depreciation, amortization, impairment, and obsolescence Profit before depreciation, exceptional items & tax Particulars The Company's financial performance for the year ended March 31, 2024 is summarised below: Profit before tax None KFin Technologies Limited Please refer to page no. 345 of this Integrated Annual Report. M.No- - F3939 315 LARSEN & TOUBRO Notice (ANNEXURE TO NOTICE DATED MAY 8, 2024) DETAILS OF DIRECTORS SEEKING APPOINTMENT/RE-APPOINTMENT AT THE FORTHCOMING ANNUAL GENERAL MEETING [Pursuant to Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard 2 on General Meetings] Name of the Director Date of Birth Mr. R. Shankar Raman December 20, 1958 Date of Appointment on October 1, 2011 the Board Qualifications B. Com, ACA and ACMA Directorships held in 1. Life Insurance Corporation of in various positions in marketing, HR, Investment and Legal functions. Expertise in managing large business portfolios Vast experience in Insurance sector in energy sector. Graduate in Political Science and Post Graduate Certification in Business Management. Masters' Degree in Chemical Engineering from Bachelor's degree in Law, Post IIT Bombay SIVARAM NAIR A COMPANY SECRETARY & COMPLIANCE OFFICER Vast experience in the Finance, Taxation, Risk Management, Legal and Investor Relations June 8, 1963 Mr. Siddhartha Mohanty August 19, 2015 February 4, 1958 Mr. Subramanian Sarma Expertise May 28, 2024 Mumbai, May 8, 2024 None of the Directors and Key Managerial Personnel of the Company and their relatives are concerned or interested, financially or otherwise, in the resolution set out at Item No. 16. The Directors recommend this resolution for approval of the shareholders. Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 314 Execution of projects for NPCIL will broaden the revenue base of the Company and lead to effective utilization of the business resources that the Company has created to cater to the requirements of customers including NPCIL. This will ultimately lead to enhanced shareholder value creation. The transactions proposed with NPCIL is purely commercial in nature and approval is being sought on account of the change in definition of RPTS as stipulated under Listing Regulations. The Heavy Engineering and Heavy Civil Infrastructure verticals of the Company bid for various projects floated by NPCIL. Both these verticals have specific business segments that cater to the specialized needs of NPCIL. Considering that the Company has executed similar projects for NPCIL in the past, the technical qualification of the Company adds to the pre- qualification requirements stipulated by NPCIL for such projects. Integrated payments, while LTIM will be assured of timely completion of the project and superior quality of construction. While bidding for the project, the Company states that the Boilers and other infrastructure support services will be procured from LMB which is pre-qualified as per the contractual conditions. LTIM is an authorized supplier for various softwares and gets the benefit of bulk purchases. It also provides service support for such softwares. The Company is able to leverage these benefits for its business. With respect to construction of commercial buildings/ IT Park for LTIM, The Company will get the benefit of more business prospects and timely assured The contracts will be awarded on competitive bidding basis and hence the transaction is at arm's length and in the ordinary course of business of the Company. Resolution No. 15 Resolution No. 14 The Company is expected to bid for various projects during the year. NIL 1. Statutory Report Accordingly, consent of the members is sought for the aforesaid purpose. M/s. R. Nanabhoy & Co., Cost Accountants, have furnished certificates regarding their eligibility for appointment as Cost Auditors of the Company. In accordance with the provisions of Section 148 of the Act read with the Rules, the remuneration payable to the cost auditor has to be ratified by the shareholders of the Company. In accordance with the provisions of Section 148 of the Act and the Companies (Audit and Auditors) Rules, 2014 ("the Rules") the Company is required to appoint a Cost Auditor to audit the cost records of the Company, for products and services specified under Rules issued in pursuance to the above section. On the recommendation of the Audit Committee, the Board of Directors had approved the appointment of M/s. R. Nanabhoy & Co, Cost Accountants (Regn. No. 000010), as the Cost Auditors of the Company to conduct audit of cost records maintained by the Company for the Financial Year 2024-25, at a remuneration of 18 lakhs plus applicable taxes and out of pocket expenses at actuals for travelling and boarding/ lodging. Ratification of remuneration payable to Cost Auditors for FY 2024-25: Item No. 16 The members may note that as per the provisions of the Listing Regulations, all related parties (whether such related party is a party to the above-mentioned transactions or not), shall not vote to approve the resolutions set out at item Nos. 9 to 15. Financial None of the Directors and Key Managerial Personnel (KMP) of the Company and their respective relatives are, in any way, concerned or interested, financially or otherwise, in the resolutions set out at item Nos. 9 to 15, except to the extent of their shareholding in the Company/subsidiary and Directorship in the respective subsidiaries. Any subsequent material modification in the proposed transactions, as may be defined by the Audit Committee as a part of Company's Policy on Related Party Transactions, shall be placed before the shareholders for approval, in terms of Regulation 23(4) of the Listing Regulations. The Audit Committee of the Company comprises of only Independent Directors which helps in providing an objective judgement to all transactions proposed for approval. The Company has in place a balanced and structured policy and process for approval of Related Party Transactions (RPT) which is reviewed periodically and was last revised on December 14, 2023. The Policy provides the details required to be provided to the Audit Committee for the purpose of review of such transactions and grant their approval for the proposed transactions. A justification for each and every related party transaction is provided to the Audit Committee which enables them to arrive at the right decisions. Additionally, an update on the actual related party transactions entered during every quarter is provided to the Audit Committee. Company's RPT Framework: Statements Reports SEBI vide its circular dated April 8, 2022 has clarified that a related party transaction approved by the shareholders shall be valid from one AGM till the next AGM of the Company or for a period of fifteen months, whichever is earlier. The Directors recommend the resolutions set out at Item Nos. 9 to 15 for approval of the Shareholders. LTIMindtree Limited By Order of the Board of Directors For LARSEN & TOUBRO LIMITED L&T Valves Limited Member: 1. L&T Finance Limited Risk Management Committee 1. Larsen & Toubro Limited CSR & Sustainability Committee 1. L&T Finance Limited 6 out of 6 Nomination and Remuneration Committee 2. L&T Metro Rail (Hyderabad) Limited 1. L&T Finance Limited Audit Committee Member: Memberships/ Chairmanships of committees across all companies years. 3. LTIMindtree Limited 2. 1. Larsen & Toubro Limited Services Limited 6 out of 6 Number of Meetings attended during the year (appointed effective from May 28, 2024) Larsen & Toubro Limited 1. 1. Mahindra & Mahindra Financial Stakeholders Relationship Committee Nomination & Remuneration Committee Member: nomination by LIC.) pursuant to withdrawal of resigned from the above companies (Note: Mr. Siddhartha Mohanty 1. Life Insurance Corporation of India The India Cements Limited Risk Management Committee 1. other public companies 2. L&T Realty Developers Limited 2. India including private 3. L&T Seawoods Limited 3. L&T Electrolysers Limited 2. LIC Card Services Limited companies which are 4. L&T Finance Limited L&T Energy Green Tech Limited LIC Housing Finance Limited None during the last three None 3. Details of Listed entities from which he resigned LIC Pension Fund Limited 5. NA Management Limited 5. L&T Metro Rail (Hyderabad) Limited foreign companies) 4. LIC Mutual Fund Asset subsidiaries of public companies (excluding Mr. M. V. Satish ceased to be a Whole-time Director of the Company with effect from April 7, 2024, on account of superannuation from the services of the Company. Financial Statements The Company has a process in place to periodically review and monitor Related Party Transactions. All related party transactions entered into during FY 2023-24 were in the ordinary course of business and at arm's length. The Audit Committee has approved the related party transactions for FY 2023-24 and the estimated related party transactions for FY 2024-25. Sale of stake in L&T Infrastructure Engineering Limited There were no Related Party Transactions that have conflict of interest with the Company. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY, BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT: Other than stated elsewhere in this report, there are no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this report. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO: Information as required to be given under section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is provided in Annexure 'A' forming part of this Board Report. DETAILS OF CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL: Mr. A. M. Naik stepped down as Non-Executive Chairman of the Company with effect from September 30, 2023. He has been conferred the status of "Chairman Emeritus" by the Board. The Company is seeking an enabling approval for certain material related party transactions at the ensuing Annual General Meeting (AGM). Shareholders are requested to refer to the AGM notice at pages 295 to 317 of this Integrated Annual Report, for details of the proposed related party transactions. Statutory Reports Integrated Management Discussion and Analysis conditions precedent, agreed under the Share Purchase Agreement dated November 2, 2023. b. Sale of stake in L&T Infrastructure Development Projects Limited The Company has concluded sale of its entire equity stake in L&T Infrastructure Development Projects Limited ('LTIDPL') to Epic Concesiones Private Limited on April 10, 2024. LTIDPL was a joint venture between Larsen & Toubro Limited and Canada Pension Plan Investment Board (CPP Investments) holding 51% and 49% shares respectively. LTIDPL and all its subsidiaries have ceased to be subsidiaries of the Company. SCHEME OF AMALGAMATION OF L&T ENERGY HYDROCARBON ENGINEERING LIMITED (LTEHE) AND L&T OFFSHORE PRIVATE LIMITED (LTOPL) WITH THE COMPANY ("THE SCHEME"): During the year under review, the Board of Directors of the Company approved a Scheme of Amalgamation of LTEHE and LTOPL with the Company. The said Scheme is subject to the approval of the Hon'ble National Company Law Tribunals having jurisdiction over these subsidiary companies. The rationale for the Scheme is to improve synergies and optimize administrative and other operational costs. Upon the Scheme becoming effective all shares held by the Company in LTEHE and LTOPL shall stand cancelled. PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN OR SECURITY PROVIDED BY THE COMPANY: During the year, the Company has completed the sale of its entire stake in L&T Infrastructure Engineering Limited to STUP Consultants Private Limited, a subsidiary of Assystem SA of France consequent to completion of customary Report The Company has disclosed the full particulars of the loans given, investments made or guarantees given or security provided during the year, as required under section 186 of the Companies Act, 2013, Regulation 34(3) and Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 in Note 57 forming part of the financial statements. WITH RELATED PARTIES: Pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated a Related Party Transactions Policy with clear threshold limits for related party transactions. During the year under review, the policy was reviewed by the Audit Committee and the Board and the thresholds for related party transactions were revised. The updated Related Party Transactions Policy has been uploaded on the Company's website https://www.larsentoubro.com/corporate/about-lt-group/ 320 Integrated Annual Report 2023-24 Corporate Overview PARTICULARS OF CONTRACTS OR ARRANGEMENTS corporate-policies/. The Independent Directors of the Company have registered themselves with the data bank maintained by Indian Institute of Corporate Affairs (IICA). In terms of section 150 of the Companies Act, 2013 read with Rule 6(4) of the Companies (Appointment & Qualification of Directors) Rules, 2014, all Independent Directors are exempted from undertaking the online proficiency self-assessment test conducted by the IICA. The Board places on record its appreciation towards valuable contribution made by them during their tenure as Directors of the Company. The disclosures required to be given under section 135 of the Companies Act, 2013 read with Rule 8(1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014 are given in Annexure 'C' forming part of this Board Report. The Chief Financial Officer of the Company has certified that CSR funds so disbursed for the projects have been utilized for the purposes and in the manner as approved by the Board. COMPANY POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION: The NRC has formulated a policy on Directors' appointment and remuneration including recommendation of remuneration of the key managerial personnel and senior management personnel, and the criteria for determining qualifications, positive attributes, and independence of a Director. Nomination and Remuneration Policy is provided as Annexure 'F' forming part of this Board Report and also disclosed on the Company's website at https://investors.larsentoubro.com/Listing-Compliance.aspx. The NRC has also formulated a separate policy on Board Diversity. DECLARATION OF INDEPENDENCE: The Company has received Declaration of Independence as stipulated under section 149(7) of the Companies Act, 2013 and Regulation 25(8) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 from Independent Directors confirming that he/she is not disqualified from being appointed/re-appointed/ continue as an Independent Director as per the criteria laid down in section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The same are also displayed on the website of the Company https://investors.larsentoubro.com/Listing-Compliance.aspx. The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Companies Act, 2013. A brief note regarding the Company's initiatives with respect to CSR and the composition of the CSR Committee is given in Annexure 'B' - Report on Corporate Governance forming part of this Board Report. Please refer to pages 346 and 347 of this Integrated Annual Report. 322 Corporate Overview Management Integrated Statutory a. Discussion and Analysis Integrated Annual Report 2023-24 disclosuresunderstatutes.aspx The CSR policy framework is available on the Company's website at https://www.larsentoubro.com/corporate/ about-lt-group/corporate-policies/ and the Annual Action Plan is available on the Company's website at https://investors.larsentoubro.com/listing-compliance- The Company has in place a CSR & Sustainability (CSR) Committee in terms of the requirements of section 135 of the Companies Act, 2013 read with the rules made thereunder. Pursuant to the recommendation of the Nomination and Remuneration Committee (NRC), Mr. S.N Subrahmanyan was appointed as Chairman and designated as Chairman & Managing Director of the Company with effect from October 1, 2023. During the FY 2023-24, based on the recommendation of the NRC and the Board, the shareholders have approved the appointment of Mr. Ajay Tyagi and Mr. P. R. Ramesh as Independent Directors of the Company for a term of 5 years with effect from October 31, 2023 upto October 30, 2028. The NRC considered the appointment of Mr. Ajay Tyagi and Mr. P. R. Ramesh as Independent Directors after evaluating the skills, knowledge and experience required on the Board as per the approved skill matrix. Mr. R. Shankar Raman and Mr. Subramanian Sarma retire by rotation at the ensuing Annual General Meeting (AGM) and being eligible, offer themselves for re-appointment. The notice convening the AGM includes the proposal for re-appointment of Directors. The terms and conditions of appointment of the Independent Directors are in compliance with the provisions of the Companies Act, 2013 and are placed on the website of the Company https://investors.larsentoubro.com/ Listing-Compliance.aspx. The Company has also disclosed on its website https://investors.larsentoubro.com/Listing-Compliance.aspx details of the familiarization programs to educate the Independent Directors regarding their roles, rights and responsibilities in the Company and the nature of the industry in which the Company operates, the business model of the Company, etc. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS: This information is given in Annexure 'B' - Report on Corporate Governance forming part of this Report. Members are requested to refer to page no. 334 of this Integrated Annual Report. AUDIT COMMITTEE: The Company has constituted an Audit Committee in terms of the requirements of the Companies Act, 2013 read with the rules made thereunder and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details relating to the same are given in Annexure 'B' - Report on Corporate Governance forming part of this Board Report. Members are requested to refer to pages 338 to 341 of this Integrated Annual Report. 321 Board Report STAKEHOLDERS RELATIONSHIP COMMITTEE: The Company has constituted a Stakeholders Relationship Committee in terms of the requirements of the Companies Act, 2013 read with the rules made thereunder and Regulation 20 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details relating to the same are given in Annexure 'B' - Report on Corporate Governance forming part of this Board Report. Members are requested to refer to pages 345 and 346 of this Integrated Annual Report. NOMINATION AND REMUNERATION COMMITTEE: The Company has constituted a Nomination and Remuneration Committee in accordance with the requirements of the Companies Act, 2013 read with the rules made thereunder and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details relating to the same are given in Annexure 'B' - Report on Corporate Governance forming part of this Board Report. Members are requested to refer to pages 341 to 345 of this Integrated Annual Report. RISK MANAGEMENT COMMITTEE: The Company has constituted a Board Risk Management Committee in terms of the requirements of Regulation 21 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and other applicable provisions, if any. The details relating to the same are given in Annexure 'B' - Report on Corporate Governance forming part of this Board Report. Members are requested to refer to pages 347 and 348 of this Integrated Annual Report. CSR & SUSTAINABILITY COMMITTEE: Mr. M. M. Chitale, Mr. M. Damodaran and Mr. Vikram Singh Mehta ceased to be the Independent Directors of the Company on completion of their tenure on March 31, 2024. C) Equity shares sold / transferred / reduced during the year: SUBSIDIARY / ASSOCIATE / JOINT VENTURE COMPANIES: B) Companies Struck off/liquidated: The Company has issued and allotted on private placement basis, Unsecured, Rated, Listed, Redeemable Non-convertible Debentures (NCDs) aggregating * 7000 crore during FY 2023-24. These NCDs are listed on the Wholesale Debt Market Segment of National Stock Exchange of India Limited. During FY 2023-24, the Company also received 450 crore (2.5 lakh each on 18,000 Debentures) towards the third and final call on partly paid-up Debentures issued by the Company in FY 2020-21. The funds raised through issuance of NCDs were utilized as per the objects stated in the Information Memorandum of the respective NCDs. The Company has been regular in making payments of principal and interest on the NCDs. During FY 2023-24, the Company repaid Non-convertible Debentures amounting to 4800 crore as per the repayment schedule. During FY 2023-24, the Company allotted 4,36,429 equity shares of 2/- each upon exercise of vested stock options by the eligible employees under the Employee Stock Option Schemes. CAPITAL & FINANCE: corporate-policies/. The Dividend payment is based upon the parameters mentioned in the Dividend Distribution Policy approved by the Board of Directors of the Company which is in line with regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Policy is uploaded on the Company's website at https://www.larsentoubro.com/corporate/about-lt-group/ During FY 2023-24, the Company paid special dividend of 6/- (300%) per equity share amounting to ₹ 843.39 crore. The Directors recommend payment of final dividend of 28 per equity share of 2/- each on the share capital amounting to 3849.07 crore, working out to a payout ratio of 41.37%. Dividend is subject to approval of members at the ensuing Annual General Meeting and deduction of income tax at source. The final dividend, if approved by the members, would be paid to those members whose name appear in the Register of Members as on the Record Date mentioned in the Notice convening the AGM. DIVIDEND: Financial Statements Reports Report Discussion and Analysis Statutory Integrated Management The Company has issued Commercial Papers amounting to * 46975 crore during FY 2023-24. As on March 31, 2024, Corporate Overview the outstanding amount of Commercial Papers is ₹2700 crore. These Commercial Papers are listed on the Wholesale Debt Market Segment of BSE Limited. The Company's borrowing programmes have received the highest credit ratings from CRISIL Ratings Limited, ICRA Limited and India Ratings and Research Private Limited. The details of the same are given on page 355 in Annexure 'B' - Report on Corporate Governance forming part of this Board Report and is also available on the website of the Company. Report Name of the Company A) Shares subscribed/ acquired during the year: subscribed to acquired equity shares in various subsidiary / associate / joint venture companies. The details of investments / divestments in subsidiary / associate / joint venture companies during the year are as under: During the year under review, the Company Board Report LARSEN & TOUBRO 319 The Company has formulated a policy on identification of material subsidiaries accordance with Regulation 16(1)(c) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the same is placed on the Company's website at https://www.larsentoubro.com/ corporate/about-It-group/corporate-policies/. The Company I did not have any material subsidiary during FY 2023-24. A statement containing the salient features of the financial statement of subsidiary / associate / joint venture companies and their contribution to the overall performance of the Company is provided on pages 648 to 659 of this Integrated Annual Report. During the year under review, the Company has not accepted any deposits falling within the ambit of section 73 of the Companies Act, 2013 and the rules framed thereunder. The requisite return for FY 2022-23 with respect to amount(s) not considered as deposits has been filed. The Company does not have any unclaimed deposits as of date. DEPOSITS: 21993.62 crore and the net value of property, plant and equipment, investment property and other intangible assets, including leased assets, were at 12463.33 crore. Capital Expenditure during FY 2023-24 amounted to 2916.46 crore. As at March 31, 2024, the gross value of property, plant and equipment, investment property and other intangible assets, including leased assets, were at CAPITAL EXPENDITURE: The Company has not defaulted on payment of any dues to the financial lenders. During the year under review, Kesun Iron and Steel Company Private Limited was struck off by the Registrar of Companies on August 16, 2023. L&T Hydrocarbon Caspian LLC, a Joint Venture of the Company based in Azerbaijan was liquidated on October 5, 2023. No. of shares Shares Equity 20,50,000 Private Limited L&T Finance Limited Equity L&T Electrolysers Equity Limited L&T Metro Rail Equity (Hyderabad) Limited 205 50,000 2,77,40,00,000 Amalgamation of L&T Innovation Campus (Chennai) Limited ("LTICCL") with L&T Seawoods Limited ("LTSL"): The Board of Directors of LTICCL and LTSL approved the Scheme of Arrangement for merger of LTICCL with LTSL (wholly owned subsidiaries of the Company). The Scheme of Amalgamation was approved by the Hon'ble National Company Law Tribunal, Mumbai Bench and became effective from March 22, 2024. The Appointed date for the Scheme was April 1, 2023. The Company was allotted 74,38,796 equity shares of LTSL as consideration pursuant to the aforesaid Scheme. Business Park (Powai) Type of Private Limited Corporate Park (Powai) Equity L&T Semiconductor Equity Technologies Limited L&T Offshore Private Equity 4,000 Limited L&T Energy Green Tech Equity 5,10,00,007 Limited GH4India Private Equity 10,00,000 Limited 20,50,000 Reports LARSEN & TOUBRO PERFORMANCE EVALUATION: 326 Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Statutory Report Reports Financial Statements A proposal for ratification of remuneration of the Cost Auditor for the FY 2024-25 is placed before the Shareholders for approval in the ensuing Annual General Meeting. The Report of the Cost Auditors for the financial year ended March 31, 2024 is under finalization and shall be filed with the Ministry of Corporate Affairs within the prescribed period. ACKNOWLEDGEMENT: The Directors take this opportunity to thank the Members, Customers, Supply Chain Partners, Employees, Financial Institutions, Banks, Central and State Government authorities, Regulatory Authorities, Stock Exchanges and various other stakeholders for their continued co-operation and support to the Company. Your Directors also wish to record their appreciation for the continued co-operation and support received from the Joint Venture Partners and Associates. Pursuant to the provisions of section 148 of the Companies Act, 2013 and as per the Companies (Cost Records and Audit) Rules, 2014 and amendments thereof, the Board, on the recommendation of the Audit Committee, at its meeting held on May 8, 2024, has approved the appointment of M/s R. Nanabhoy & Co., Cost Accountants, as the Cost Auditors for the Company for the financial year ending March 31, 2025 at a remuneration of 18 lakhs plus taxes and out of pocket expenses. The provisions of section 148(1) of the Companies Act, 2013 are applicable to the Company and accordingly the Company has maintained cost accounts and records in respect of the applicable products for the year ended March 31, 2024. COST AUDITORS: The Auditors attend the Annual General Meeting of the Company. Also see pages 349 and 350 forming part of Annexure 'B' of this Board Report. corporate-policies/. Also see page 348 and 349 forming part of Annexure 'B' of this Board Report. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS: During the year under review, there were no material and significant orders passed by the regulators or courts or tribunals impacting the going concern status and the Company's operations in future. CONSOLIDATED FINANCIAL STATEMENTS: Your Directors are pleased to attach the Consolidated Financial Statements pursuant to section 129(3) of the Companies Act, 2013 and Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, prepared in accordance with the provisions of the Companies Act, 2013 and the Indian Accounting Standards (Ind AS). AUDIT REPORT: Date May 8, 2024 Place Mumbai The Auditors' report to the shareholders does not contain any qualification, observation or comment or adverse remark. The Secretarial Audit Report issued by M/s. S. N. Ananthasubramanian & Co., Company Secretaries is attached as Annexure 'E' forming part of this Board Report. The Secretarial Audit Report does not contain any qualification, reservation or disclaimer or adverse remark. AUDITORS: M/s. Deloitte Haskins & Sells LLP are the Statutory Auditors of the Company and shall hold office till the conclusion of 80th Annual General Meeting of the Company. In view of the mandatory requirement of rotation of auditors, the Board of Directors in its meeting held on March 26, 2024, appointed M/s. MSKA & Associates ("MSKA") as the Statutory Auditors of the Company for a term of 5 years i.e. from the conclusion of 79th Annual General Meeting till the conclusion of 84th AGM of the Company, subject to approval of the shareholders. A proposal for their appointment from the conclusion of the 79th AGM till the conclusion of the 84th AGM has been included in the Notice of the ensuing AGM. In order to ensure a smooth transition, both the Auditors would jointly conduct the audit from the conclusion of 79th AGM of the Company till the conclusion of the 80th AGM. The Auditors have confirmed that they have subjected themselves to the peer review process of Institute of Chartered Accountants of India (ICAI) and hold valid certificate issued by the Peer Review Board of the ICAI. The Audit Committee reviews the independence and objectivity of the Auditors and the effectiveness of the Audit process. SECRETARIAL AUDIT REPORT: The Company has a Whistle-blower Policy in place since 2004. The Policy has been modified to meet the requirements of Vigil Mechanism under the Companies Act, 2013 and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Whistle Blower Policy is available on the Company's website https://www.larsentoubro.com/corporate/about-It-group/ For and on behalf of the Board S. N. SUBRAHMANYAN Chairman & Managing Director (DIN:02255382) Cranes with Variable Voltage Variable Frequency (VVVF) Drive technology at few Manufacturing Facilities has resulted in considerable reduction in energy usage. (g) Awareness campaigns: Our organization actively promotes environmental stewardship through campaigns and training focused on energy saving and water conservation, complemented by the celebration of Earth Day and Environment Day to heighten awareness and commitment to energy conservation among our stakeholders. (h) Digital initiatives: Investment in digital solutions to enhance energy management across major projects, utilizing digitally enabled fuel browsers and smart meters for precise tracking and optimization of fuel and electrical consumption. Deployment of loT technologies for monitoring High Speed Diesel (HSD) consumption and digital fuel sensors on plant and machinery equipment ensured effective utilization and conservation of resources. (i) Improvements in equipment efficiency and energy savings: Upgrading industrial processes by enhancing furnace insulation, transitioning to induction and electric plate heating instead of gas preheating, and installing energy-efficient column-mounted boards. Streamlining welding operations by shifting to inverter-based machines and replacing conventional transformers, thereby reducing emissions, and improving energy utilization. (j) Fuel consumption reduction and conversion to electrically operated equipment: Significant fuel savings with productivity improvement in DG sets and concrete chain. Converting air compressors and concrete pumps to electrically operated equipment compared to traditionally fossil fuel based equipment. (ii) Steps taken by the Company for utilizing alternate sources of energy: (a) Renewable Energy Adoption: Installation of solar panels at multiple Project sites and use of solar electric vehicles lead to a 328 Integrated Annual Report 2023-24 Implementation of VFD in rolling machines and upgradation of Electric Overhead Traveling (EOT) (f) Variable frequency drives (VFD): Enhancement of system integrity by identifying and addressing air leakages in flow lines using the ultrasonic detection method. Optimized energy efficiency by adopting inverter- based power sources and installing magnetic resonators in all furnaces. 327 LARSEN & TOUBRO Annexure to the Board Report Annexure 'A' to the Board Report Information as required to be given under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 [A] CONSERVATION OF ENERGY (i) Steps taken or impact on conservation of energy: (a) Upgradation of Electrical Equipment: Financial Statements Upgrading and modernizing electrical equipment and appliances to enhance energy efficiency, which includes converting and retrofitting ceiling fans; updating Flux baking and holding ovens as well as Computer Numerical Control (CNC) machines. (b) Use of LED lights and energy efficient fans: Usage of LED Lights as a replacement of conventional lighting systems complemented by adoption of energy efficient fans with Variable Frequency Drives (VFD) has reduced the energy consumption significantly. (c) Motion sensors: Strategic Integration of advanced motion sensors at project sites to ensure adequate consumption of electricity, leading to substantial energy savings. Installation of timers at over 2000 streetlights to curtail their operational hours resulting in reduced energy consumption. (d) Natural lighting integration: Installed translucent roofing panels and sheets at project sites to capitalize natural daylight as energy resource to illuminate store areas and sheds. (e) Process redesign: Replacing conventional Air Conditioner (AC) units with inverter-type energy-efficient ACs and substituting old motors with energy-efficient models. VIGIL MECHANISM: 95,50,000 of the Company at https://investors.larsentoubro.com/ DownloadableForms.aspx ADEQUACY OF INTERNAL FINANCIAL CONTROLS: The Company has designed and implemented a process driven framework for Internal Financial Controls ("IFC") within the meaning of the explanation to section 134(5)(e) of the Companies Act, 2013. For the year ended March 31, 2024, the Board is of the opinion that the Company has sound IFC commensurate with the nature and size of its business operations and operating effectively and no material weakness exists. The Company has a process in place to continuously monitor the same and identify gaps, if any, and implement new and/or improved controls wherever the effect of such gaps would have a material effect on the Company's operations. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and were operating effectively. f) e) The Directors have laid down an adequate system of Internal Financial Controls to be followed by the Company and such Internal Financial Controls are adequate and operating efficiently; d) The Directors have prepared the Annual Accounts on a going concern basis; The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; c) b) The Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period; In the preparation of Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to any material departures; a) The Board of Directors of the Company confirms: The information in respect of employees of the Company pursuant to Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended from time to time, is provided in Annexure 'G' forming part of this report. In terms of section 136(1) of the Companies Act, 2013 and the rules made thereunder, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary at the Registered Office of the Company. None of the employees listed in the said Annexure is related to any Director of the Company. DIRECTORS' RESPONSIBILITY STATEMENT: The details of remuneration as required to be disclosed under the Companies Act, 2013 and the rules made thereunder, are given in Annexure 'D' forming part of this Board report. DISCLOSURE OF REMUNERATION: The Board Performance Evaluation inputs, including areas of improvement for the Directors, Board processes and related issues for enhanced Board effectiveness were discussed in the meetings of the Nomination and Remuneration Committee and the Board of Directors held on May 8, 2024. DEPOSITORY SYSTEM: As the members are aware, the Company's shares are compulsorily tradable in electronic form. As on March 31, 2024, 99.14% of the Company's total paid up capital representing 136,28,46,427 shares are in dematerialized form. Pursuant to amendments in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, requests for effecting transfer of securities in physical form, shall not be processed by the Company and all requests for transmission, transposition, issue of duplicate share 323 The Company is committed to treating every employee with dignity and respect. The Company has formulated a policy on 'Protection of Women's Rights at Workplace' as per the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and Rules thereunder ('POSH Act & Rules'). The policy is applicable to all L&T establishments located in India. The policy has been widely disseminated. The Company has constituted Internal Complaints Committees to ensure implementation and compliance with the provisions of the aforesaid Act and the Rules. The Company believes that all the women employees should have the opportunity to work in an environment free from any conduct which can be considered as Sexual Harassment. Reporting of fraud: There were no frauds committed against the Company during FY 2023-24 by its officers or employees which are required to be disclosed as per Section 143(12) of the Companies Act, 2013. COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS: IEPF. The Company sends specific advance communication to the concerned shareholders at their address registered with the Company and also publishes notice in newspapers providing the details of the shares due for transfer to enable them to take appropriate action. All corporate benefits accruing on such shares viz. bonus shares, etc. including dividend except rights shares shall be credited to In accordance with the provisions of the section 124(6) of the Companies Act, 2013 and Rule 6(3)(a) of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ('IEPF Rules'), the Company has transferred 4,04,158 equity shares of 2 each (0.03% of total number of shares) held by 2,749 shareholders (0.18% of total shareholders) to IEPF. The said shares correspond to the dividend which had remained unclaimed for a period of seven consecutive years from the financial year 2015-16. Subsequent to the transfer, the concerned shareholders can claim the said shares along with the dividend(s) by making an application to IEPF Authority in accordance with the procedure available on www.iepf.gov.in and on submission of such documents as prescribed under the IEPF Rules. The detailed procedure for claiming shares/dividend transferred to IEPF is made available on the Company's website at https://investors.larsentoubro.com/Investor-FAQ.aspx. As in the previous years, an external consultant was engaged to receive the responses of the Directors and consolidate/ analyze the responses. The same external consultant's IT platform was used from initiation till conclusion of the entire board evaluation process. This ensured that the process was transparent and independent of involvement of the Management or the Company's IT system. This has enabled unbiased feedback. Cumulatively, the amount transferred to the said fund was 70.11 crore as on March 31, 2024. The Company has been regularly sending communications to members whose dividends are unclaimed requesting them to provide/update bank details with Registrar and Transfer Agents (RTA)/Company, so that dividends paid by the Company are credited to the investor's account on time. Efforts are also made by the Company in co-ordination with the RTA to locate the shareholders who have not claimed their dues. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND: In adherence to SEBI's circular to enhance the due diligence for dematerialization of the physical shares, the Company has provided the static database of the shareholders holding shares in physical form to the depositories which would augment the integrity of its existing systems and enable the depositories to validate any dematerialization request. The Company has availed a special contingency insurance policy towards the risks arising out of the requirements of relating to issuance of duplicate securities, pursuant to SEBI Circular dated May 25, 2022, which is renewed yearly. In view of the numerous advantages offered by the Depository system as well as to avoid frauds, members holding shares in physical form are advised to avail of the facility of dematerialization from either of the Depositories. certificate, claim from unclaimed suspense account, renewal/exchange of securities certificate, endorsement, sub-division/split of securities certificate and consolidation of securities certificates/folios need to be processed only in dematerialized form. In such cases, the Company will issue a letter of confirmation, which needs to be submitted to Depository Participant(s) to get credit of the securities in dematerialized form. Shareholders desirous of availing these services are requested to refer to the detailed procedure for availing these services provided on the website of the Company at https://investors.larsentoubro.com/InvestorKit.aspx. Board Report LARSEN & TOUBRO Despite these efforts, an amount of 12.47 crore towards dividend and bonus fractional entitlement which were due and payable and remained unclaimed and unpaid for a period of seven years, were transferred to Investor Education and Protection Fund (IEPF) as provided in section 125 of the Companies Act, 2013 and the rules made thereunder. The Nomination and Remuneration Committee and the Board have laid down the manner in which formal annual evaluation of the performance of the Board, Committees, Individual Directors and the Chairman & Managing Director has to be made. All Directors responded through a structured questionnaire giving feedback about the performance of the Board, its Committees, Individual Directors and the Chairman & Managing Director. The Company has complied with Secretarial Standards on Board Meetings and General Meetings issued by the Institute of Company Secretaries of India. PROTECTION OF WOMEN AT WORKPLACE: Integrated Annual Report 2023-24 The disclosure relating to ESOPs required to be made under the provisions of the Companies Act, 2013 and the rules made thereunder and the Securities and Exchange Board of India (Share Based Employee Benefit and Sweat Equity) Regulations, 2021 (SBEB Regulations) is provided on the website of the Company https://investors.larsentoubro.com/listing- compliance-agm.aspx. A certificate obtained from the Secretarial Auditors, confirming that the ESOP Schemes of the Company are in compliance with the SBEB Regulations and that the Company has complied with the provisions of the Companies Act, 2013 is also provided in Annexure 'B' forming part of this Report. • 324 Corporate Governance: Pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Report on Corporate Governance and a certificate obtained from the Statutory Auditors confirming compliance with Corporate Governance requirements provided in the aforesaid Regulations, are provided in Annexure 'B' forming part of this Report. Business Responsibility and Sustainability Reporting: As per Regulation 34 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, a separate section on Business Responsibility and Sustainability Reporting forms a part of this Integrated Annual Report (refer pages 242 to 294). Integrated Reporting: The Company is complying with the applicable requirements of the Integrated Reporting Framework. The Integrated Report tracks the sustainability performance of the organization and its interconnectedness with the financial performance, showcasing how the Company is adding value to its stakeholders. The Integrated Report forms a part of this Integrated Annual report. Annual Return: The Annual Return of the Company for the FY 2023-24 is available on our website https://investors.larsentoubro.com/listing-compliance- agm.aspx. Statutory Compliance: The Company has adequate systems and processes in place to comply with all applicable laws and regulations, pay applicable taxes on time, and ensures statutory CSR spend. MSME: The Company has registered itself on Trade Receivables Discounting System platform (TREDS) through the service providers Receivables Exchange of India Limited. The Company complies with the requirement of submitting a half yearly return to the Ministry of Corporate Affairs within the prescribed timelines. Insolvency and Bankruptcy Code (IBC): There are no proceedings admitted against the Company under the Insolvency and Bankruptcy Code, 2016. KYC registration for holders of physical shares: All shareholders of the Company holding shares in physical form are requested to update their PAN, Address, Email ID, Bank account details (KYC details) and Nomination details with the Company's Registrar and Share Transfer Agent (RTA) at the earliest, in case the same are not updated. The relevant forms for updating the KYC information and Nomination details are provided on the website LARSEN & TOUBRO Board Report . ESOP Disclosures: There has been no material change in the Employee Stock Option Schemes (ESOP schemes) during the current financial year. OTHER DISCLOSURES: • about-lt-group/corporate-policies/. Corporate Overview Management Training programs and workshops for employees are organised throughout the year. The orientation programs for new recruits include awareness sessions on prevention of sexual harassment and upholding the dignity of employees. Specific programs have been created on the digital platform to sensitize employees to uphold the dignity of their colleagues and prevention of sexual harassment. During FY 2023-24, about 17,426 employees have undergone training through the programs/ workshops including the awareness sessions held on digital platform. There were 3 complaints received during FY 2023-24. One complaint has been redressed as per provision of POSH Act and Rules. The balance two complaints received during Q4 of FY 2023-24 are under inquiry. These complaints are being redressed within the timelines prescribed in POSH Act and Rules. Integrated Statutory Discussion and Analysis Report Reports 325 This Policy encompasses the following objectives: • To define Sexual Harassment; • . To lay down the guidelines for reporting acts of Sexual Harassment at the workplace; and A detailed procedure for making a Complaint, initiating an enquiry, redressal process and preparation of report within a stipulated timeline is laid out in the Policy document. The Policy also covers Disciplinary Action for Sexual Harassment. The Policy is uploaded on the Company's website at https://www.larsentoubro.com/corporate/ Financial Statements To provide the procedure for the resolution and redressal of complaints of Sexual Harassment. 6 ED Yes 6 6 Integrated Management Statutory Financial Discussion and Analysis Report Statements Corporate Overview Reports Mr. Vikram Singh Mehta$ 6 ID reduction in reliance on grid and Diesel Generator (DG) set electricity and reduction in greenhouse gas emissions. 6 ID Mr. M. Damodaran $ 6 ID Mr. M. M. Chitale$ 6 ED Mr. Anil V Parab 6 ED 6 ED ED Replacement of traditional DG light masts with Hybrid Solar light masts at project sites helped to reduce carbon emissions. (iii) Capital investment on energy conservation equipment: The strategic use of solar lighting around compound walls of Kanchipuram manufacturing facility of Rubber Processing Machinery (RPM) business of the Company lead to significant energy savings. (i) Development of technology for design and supply of Cryogenic Vaporiser for petrochemical industry. Development of Chemical process technology in the area of Aqueous Phase Reforming, residue up-gradation (Petroleum Refining) and Coal/ Petcoke Gasification. Design development for Multi-tubular Reactor Systems and slug catcher. Usage of advanced manufacturing simulation technology for optimisation of heat input and distortion reduction through selection of appropriate number of welding guns for site repair. 329 Installation of VFD based cranes, Inverter based ACs and energy efficient water coolers at a cost of 0.70 crore at Hazira based Manufacturing facility of Energy- Hydrocarbon business of the Company. [B] TECHNOLOGY ABSORPTION: Efforts made towards technology absorption: 330 Annexure to the Board Report • Utilization of 3D concrete printing technology for the construction of the post office building in Bengaluru and other buildings in Tamil Nadu. Development of VFD (Variable Frequency Drive) concrete pump, aiming to reduce diesel consumption and carbon emissions while 6 LARSEN & TOUBRO Energy - Power business of the Company has installed 450TR (Ton of Refrigeration) energy efficient water cooler chiller at a cost of 1.35 Crore. Capital investment of 0.23 Crore on Solar Installations, Pallet Burners, Solar Electric Vehicles and Hybrid Solar light masts by the Transportation Infrastructure business of the Company. During FY 2023-24, Heavy Engineering business of the Company has made a Capex investment of 4 Crore on energy conservation and renewable energy. (b) Wind energy: During the FY 2023-24, Wind energy has been utilized at various project sites of the Company, contributing to reduced reliance on traditional energy sources. (c) Use of alternate fuels: Usage of Compressed Biogas (CBG) in place of Liquified Petroleum Gas (LPG) for Galvanizing Furnace in Tower parts manufacturing plant resulted in reduced emissions. Usage of Piped Natural Gas (PNG) and cleaner energy source at few projects to power the Hot Mix Plants. Replacing Fossil fuel-based burners with Pallet burners at multiple project sites helped reduce Greenhouse Gas emissions. Usage of renewable biological resources based Biofuel for few project as an alternative to conventional fossil fuels. Usage of CNG based vehicles and water tankers at various project sites of Transportation Infrastructure business of the Company. (d) Green energy: Usage of natural skylight polycarbonate sheets on the roofs for augmenting lighting in manufacturing plants leading to reduced electricity consumption during daytime. Adoption of Green Energy Tariff is helping us reduce Scope-2 emissions at project sites of the Company. Integration of a green hydrogen plant for furnace operations in shop areas and secured Green Power Purchase Agreements to ensure eco-friendly power consumption. Power Purchase Agreement for establishing 2.5 Megawatt Peak (MWp) Solar Plant to replace 45% of energy usage with renewable energy at Kansbahal Works. The initiative is poised to reduce 3200 MT Co2 emissions per year by lower thermal power consumption. Additionally, Talegaon unit of Precision Engineering Systems (PES) business has signed an agreement to establish a 500 KWp onsite Solar plant. Heavy Engineering business of the Company entered into a hybrid power purchase agreement for renewable energy and installed solar rooftop plants. Mr. Adil Zainulbhai Yes Mr. Sanjeev Aga Mr. S. N. Subrahmanyan No. of Committee Membership No. of other company Directorships Name of Director As on March 31, 2024, the number of other directorships and the number of positions held as Member/Chairperson of Committees of the Board of Directors along with the names of the listed entities (whose equity shares are listed) wherein the Director holds directorships are as follows: None of the Directors hold the office of director in more than the permissible number of companies under the Companies Act, 2013 or Regulation 17A of the SEBI LODR Regulations. 6 2. 1. 3 Yes Yes Yes Yes None of the above Directors are related inter-se. 0 No. of Committee Chairpersonships 0 Non-Executive Chairman Vice-Chairman Holdings Limited) (Formerly L&T Finance Holdings Limited) LTIMindtree Limited L&T Finance Limited (Formerly L&T Finance L&T Finance Limited 0 4 6 Mr. R. Shankar Raman Non-Executive Vice-Chairman Non-Executive Category of Directorship L&T Technology Services Limited Names of other Equity Listed entities where he/ she holds Directorship LTIMindtree Limited No Yes Yes improving energy efficiency in concrete pumping operations. Mr. Jyoti Sagar^ Mr. Rajnish Kumar^ ID ID ID ID ID Mr. Pramit Jhaveri ID Mrs. Preetha Reddy NED Mr. Hemant Bhargava (Note 1) ID Mr. Narayanan Kumar ID Mr. Ajay Tyagi* ID Mr. P. R. Ramesh* & Ceased as Executive Director of the Company w.e.f. April 7, 2024. Yes Yes Yes Yes Yes Yes Yes Yes 66666655533 66666666565656553 m ED & CFO - Executive Director and Chief Financial Officer NED - Non-Executive Director ED Executive Director ID Independent Director $ Ceased as Independent Director of the Company w.e.f. March 31, 2024. ^Appointed as an Independent Director of the Company w.e.f. May 10, 2023. *Appointed as an Independent Director of the Company w.e.f. October 31, 2023. Note 1: Representing equity interest of Life Insurance Corporation of India. CMD - Chairman & Managing Director Meetings held during the year are expressed as number of meetings eligible to attend. Usage of magnetic wire rope tester to detect potential faults in tower crane wire ropes, ensuring safety and reliability. Management Discussion and Analysis Development of Pie Arm Erector with lifting capacity of upto 55 Metric Ton (MT) for Elevated Metros in order to find an alternative to the portal frame arrangement. d. e. The Chairman & Managing Director (CMD): The CMD is fully accountable to the Board for the Company's business development, operational excellence, business results, leadership development and other related responsibilities. Executive Directors / Senior Management Personnel: The Executive Directors, as members of the Board, along with the Senior Management Personnel in the Executive Committee, contribute to the strategic management of the Company's businesses within Board approved direction and framework. They assume overall responsibility for strategic management of business and corporate functions including its governance processes and top management effectiveness. The profiles and expertise of all Executive Directors who are responsible for various business of the Company are available on the Company's website at https://larsentoubro.com/corporate/about-It-group/leadership/. Senior Management Personnel means all members of management one level below the Executive Directors including the Chief Financial Officer and Company Secretary. Presently, persons in Sr. Vice President grade and F&A heads of Independent Companies reporting to Whole-time Directors are covered as Senior Management Personnel. During the year, Mr. Sthaladipti Saha was elevated as Senior Vice President & IC Head (designate), Buildings & Factories IC with effect from April 7, 2023, Mr. Shrinath Rao was elevated as Senior Vice President & IC Head Transportation Infrastructure IC with effect from July 17, 2023 and Mr. E. P. Sajit was elevated as Senior Vice President & Head, Water & Effluent Treatment IC with effect from October 2, 2023. Non-Executive Directors / Independent Directors: The Non-Executive Directors / Independent Directors play a critical role in enhancing balance to the Board processes with their independent judgment on issues of strategy, performance, resources, standards of conduct, safety, etc., besides providing the Board with valuable inputs. The profiles and expertise of all Independent Directors/Non-executive Directors of the Company are available on the Company's website at https://larsentoubro.com/corporate/about-lt-group/leadership/. f. Independent Company Board (IC Board): The Company has a Hybrid Holdco Structure comprising 'Independent Companies' (ICs) (not legal entities). 6 6 CMD Mr. T. Madhava Das Mr. S. V. Desai Mr. Subramanian Sarma C. Mr. M. V. Satish & Sharing of best practices, etc. • Integrated Statutory Financial Discussion and Analysis Report Reports Statements Review of consolidated financials including working capital, cash flow, capital structure, etc. • Review of Monthly / Quarterly/Yearly financial performance • Review of Revenue, Capital & Manpower Budget and performance thereagainst Review and discuss strategic issues which impact the entire organization, viz., (i) International business expansion (ii) IC synergies (iii) HR Update/ Talent Management / Service contract extensions for senior management personnel / Leadership development and succession planning (iv) Digitalization & Analytics initiatives (v) ESG Matters • Approval of Company policies Strategic plans and business portfolio reviews Management Mr. R. Shankar Raman attended • ESG matters and Risk assessments as necessary • Assist in solving problems pertaining to specific issues. E. BOARD OF DIRECTORS a. Composition of the Board: The Company's policy is to have an appropriate mix of Executive, Non-Executive and Independent Directors. As on March 31, 2024, the Board comprised the CMD, 6 Executive Directors, 1 Non-Executive Director (representing a financial institution) and 9 Independent Directors, including one Independent Woman Director. This excludes 3 Independent Directors who completed their tenure on March 31, 2024. The composition of the Board, as on March 31, 2024, is in conformity with the provisions of the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('SEBI LODR Regulations'). Details of changes in composition of the Board forms part of Board Report. b. Meetings of the Board: The Meetings of the Board are generally held at the Registered Office of the Company at L&T House, Ballard Estate, Mumbai 400 001 and whenever necessary, in locations, where the Company operates. During the year under review, 6 meetings were held on May 10, 2023, July 25, 2023, September 30, 2023, October 31, 2023, January 30, 2024 and March 26, 2024. The Independent Directors met on May 9, 2023, July 24, 2023 and September 30, 2023 to discuss, inter alia, the performance evaluation of the Board as a whole, succession planning and assess the quality, quantity and timeliness of flow of information between the management and the Board of Directors that is necessary for the Board to effectively and reasonably perform their duties. The Independent Directors further met on May 8, 2024 and discussed inter alia the Board Evaluation Report for FY 2023-24. The topics, inter alia, discussed were with regard to need for making presentation on Human Resource Strategy and detailed discussions on new businesses of the Company. The Company Secretary prepares the agenda and the explanatory notes, in consultation with the CMD and circulates the same in advance to the Directors. Every Director is free to suggest inclusion of items on the agenda. The Board meets at least once every quarter, inter alia, to review the quarterly results. Additional meetings are held, whenever necessary. Presentations are made on business operations to the Board by Independent Companies/ Business Units. Senior management personnel are invited to provide additional inputs for the items being discussed by the Board of Directors as and when necessary. The respective Chairperson of the Board Committees apprise the Board Members of the important issues and discussions in the Committee Meetings. Minutes of Committee meetings are also circulated to the Board. The Minutes of the proceedings of the Meetings of the Board of Directors are approved and the draft minutes are circulated amongst the Members of the Board for their perusal. Comments, if any, received from the Directors are also incorporated in the Minutes, in consultation with the Chairman. The minutes are approved and entered in the minutes book within 30 days of the Board meeting. Thereafter, the minutes are signed and dated by the Chairman of the Board at the next meeting. 334 Integrated Annual Report 2023-24 Corporate Overview Revenue, capital & manpower Budget Mr. S. N. Subrahmanyan • Implementation of Lakshya i.e. the Company's strategic plan previous AGM Attendance at No. of Board Meetings Meetings held during the year Category Name of Director The following is the composition of the Board of Directors as on March 31, 2024. Their attendance at Board Meetings during the year and at the previous Annual General Meeting is as under: Statements Reports Report Financial Statutory Integrated Management Discussion and Analysis 333 LARSEN & TOUBRO Annexure to the Board Report Each IC is governed by an IC Board comprising 2 to 3 Independent Members akin to Independent Directors and senior executive members. The IC Board, inter alia, oversees: • • Leadership pipeline/ succession planning Introduction of in-house developed Electric Vehicle (EV) trolley for transporting finishing materials like gypsum and sandbags. Corporate Overview Integrated Annual Report 2023-24 Usage of AGBR Technology offers advantages wherein technical and environmental sustainability is intertwined viz. power savings and footprint reduction, lesser sludge production and assured removal of Nitrogen and Phosphorus in sewage nutrient removal process. (iii) Information regarding technology imported during the last 3 years: (iv) Expenditure incurred on Research & Development: Capital Recurring Total crore 2023-24 5.86 163.15 169.01 Total R&D expenditure as a percentage of total 0.13% turnover Sr. Technology No. Imported Year of Import Status of absorption & reasons for non- absorption, if any [C] FOREIGN EXCHANGE EARNINGS AND OUTGO: Financial Statements crore Reports Statutory Implementation of the Tunnel Segment Monitoring System (TSMS) enabling end-to-end tracking and digital documentation of precast segments, enhancing quality control, and streamlining the supply chain process for efficient production and delivery to the construction site. Implementation of Al-based vision analytics across few projects focusing on ensuring data privacy and security, addressing ethical considerations, and enhancing algorithm robustness to optimize safety monitoring and surveillance. Development of bladder type T-ring for 2-wheeler tyre building machines for continental tyres. Development of an algorithm to calculate the winding coordinates automatically to wind the steel around various drum profiles in 2-wheeler tyre building Machine. Attached Batch Growth Bio-Reactor (AGBR) technology developed by Water & Effluent Treatment (WET) business of the Company in collaboration with CES - Anna University, Chennai, combines attached and suspended growth processes with zonal separation for enhanced organics and nutrients removal. It utilizes specially customized polymeric material with high surface area, reducing footprint and achieving lower sludge production and power consumption. Development of "Hybrid Tandem Tippler" and "Long Arm Side Arm Charger" for one of the projects for Metallurgical & Material Handling business, capable of unloading both bottom discharge wagons and top open wagons. This machine features unique tailor-made capabilities, allowing it to unload 50 wagons within one hour. Development of straddle carrier, launching Girder controlling algorithms and data dashboards for the purpose of better monitoring and improving machine performance. Improvement in Drum Cooler design for better life and reliability. Capability development in new energy transition technologies viz. Blue/Green Ammonia, Sustainable Aviation Fuels, Ammonia Cracking, Biomass Gasification, Atmospheric Carbon Capture. (ii) Benefits derived like product improvement, cost reduction, product development or import substitution: Increased self-reliance and savings in Foreign Exchange in process plant and refinery equipment sector. Reduction in production cycle time, cost, and rework due to implementation of advanced manufacturing simulation technology. Enhanced and refined on-site fabrication capabilities through continuous improvement initiatives. Implementation of erectors has improved pier arm segment erection, reducing the cycle time from 50 days to 23 days and enhancing safety. Implementation of the Tunnel Segment Monitoring System (TSMS) has led to considerable time savings and reduced reliance on third-party applications, resulting in improved operational efficiency and cost savings. Engineering optimization by implementing concept of combined building for Wet Ball mill and Gypsum Dewatering system enabling reduction in overall footprint and concrete quantity. Redefining operation of Flue-gas desulfurization (FGD) systems to suit Indian conditions and thereby facilitate achieving performance of FGD. Integrated Annual Report 2023-24 Corporate Overview Integrated Report • 2023-24 Full Span COMPANY'S CORPORATE GOVERNANCE PHILOSOPHY The Company's essential character revolves around values based on transparency, integrity, professionalism and accountability. At the highest level, the Company continuously endeavors to improve upon these aspects on an ongoing basis and adopts innovative approaches for leveraging resources, converting opportunities into achievements through proper empowerment and motivation, fostering a healthy growth and development of human resources to take the Company forward. The Company strives to adopt policies and practices that meet the highest ethical standards. Commitment to good governance has a distinctive competitive advantage, enhances trust and creates long-term sustainability. The Company has been guided by the belief that the strong relationship between culture and strategy will consistently produce improved financial performance, better employee engagement, ethical behaviour and stakeholder satisfaction. THE GOVERNANCE STRUCTURE The Company has four tiers of Corporate Governance structure, viz.: - (i) Strategic Supervision – by the Board of Directors comprising the Executive Directors, Non-Executive Directors and Independent Directors. - (ii) Executive Management – by the Executive Committee (ECom) comprising the Chairman & Managing Director, all Executive Directors and senior leaders. (iii) Strategy & Operational Management - by the Independent Company Boards of each Independent Company (IC) (not legal entities) comprising representatives from the Company's Board, Senior Executives from the IC and independent members. (iv) Operational Management - by the Business Unit (BU) Heads. The four-tier governance structure, besides ensuring greater management accountability and credibility, facilitates increased autonomy to the businesses, performance discipline and development of business leaders, leading to increased public confidence. D. ROLES OF VARIOUS CONSTITUENTS OF CORPORATE GOVERNANCE IN THE COMPANY a. Board of Directors (the Board): b. The Directors of the Company are in a fiduciary position, empowered to oversee the management functions with a view to ensuring its effectiveness and enhancement of shareholder value. The Board also provides strategic direction, reviews and approves management's business objectives, plans and oversees risk management. Executive Committee (ECom): The ECom provides a companywide operations review and plays a key role in strengthening linkages between the ICs and the Company's Board, as well as in rapidly realizing inter-IC synergies. In addition, the ECom deliberates upon strategic and tactical issues that cut across ICs and Corporate. The agenda includes: Review of major order prospects (Standalone/ Group) / "Integrated offerings" 332 The Company believes that sound Corporate Governance is critical for enhancing and retaining stakeholder trust and always seeks to ensure that its performance goals are met accordingly. The Company has established systems and procedures to ensure that its Board of Directors is well informed and well equipped to fulfill its overall responsibilities and to provide management with the strategic direction needed to create long term shareholders value. The Company had adopted many ethical and transparent governance practices even before they were mandated by law. The Company has always worked towards building trust with shareholders, employees, customers, suppliers and other stakeholders based on the principles of good corporate governance. 1 Corporate Governance enables an organization to perform efficiently and ethically generate long term wealth and create value for all its stakeholders. C. 2021-22 Fully absorbed Foreign Exchange earned 16131.44 Construction Methodology Foreign Exchange saved / deemed exports 2491.72 Total 18623.16 2 2021-22 Fully absorbed Foreign Exchange used 18448.48 331 LARSEN & TOUBRO Annexure to the Board Report Annexure 'B' to the Board Report A. CORPORATE GOVERNANCE B. Corporate Governance is a set of principles, processes and systems which govern a company. The elements of Corporate Governance are independence, transparency, accountability, responsibility, compliance, ethics, values and trust. Straddle carrier Yes No 1 2 L&T Technology Services Independent Director Limited Entertainment Network 3 Independent Director Mr. Hemant Bhargava 3 3 1 UGRO Capital Limited Independent Director (India) Limited ITC Limited Mr. Narayanan Kumar Independent Director Cipla Limited Independent Director TV18 Broadcast Limited Chairman and Independent Director Mr. Sanjeev Aga India Limited 3 2 LTIMindtree Limited Independent Director Pidilite Industries Limited Independent Director Mahindra Holidays & Resorts 2 Independent Director SMC Global Securities Limited Ambuja Cements Limited Independent Director Hero Motocorp Limited Independent Director Mr. Jyoti Sagar 0 1 Mr. Ajay Tyagi Mr. P. R. Ramesh 8 003 0 1 4 1 Independent Director Independent Director 0 Mr. Rajnish Kumar Mrs. Preetha Reddy 8 2 0 Apollo Hospitals Enterprise Limited Whole-time Director 3 Mr. Pramit Jhaveri 2 0 Bajaj Finance Limited Independent Director Bajaj Finserv Limited Independent Director 2 Nestle India Limited Investment Limited Network 18 Media & Approval of payment to statutory auditors for any other services rendered by the statutory auditors. Discussion with statutory auditors, before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern. Reviewing, with the management, the annual financial statements and the audit report before submission to the Board for approval, with particular reference to: 1. Matters required to be included in the Directors' Responsibility Statement to be included in the Board report in terms of sub-section (5) of section 134 of the Companies Act, 2013 Recommending to the Board, the appointment, re-appointment, terms of appointment and, if required, the replacement or removal of the statutory auditor and fixation of remuneration of statutory auditors. Integrated Annual Report 2023-24 335 336 LARSEN & TOUBRO Annexure to the Board Report No. of other Name of Director ED & CFO company Directorships that the financial statement is correct, sufficient and credible. • Industry knowledge and experience X ✓ X X ^ Appointed as an Independent Director with effect from October 31, 2023. • Note: Absence of any skill does not necessarily mean that the Director does not possess the skill. BOARD COMMITTEES 1) Audit Committee The Company constituted the Audit Committee in 1986, well before it was mandated by law. i) Terms of reference: The role of the Audit Committee includes the following: Oversight of the Company's financial reporting process and the disclosure of its financial information to ensure The Board currently has 5 Committees: 1) Audit Committee, 2) Nomination and Remuneration Committee, 3) Stakeholders' Relationship Committee, 4) CSR & Sustainability Committee and 5) Board Risk Management Committee. The terms of reference of the Board Committees are in compliance with the provisions of the Companies Act, 2013, SEBI LODR Regulations and are also reviewed by the Board from time to time. The Board is responsible for constituting, assigning and co-opting the members of the Committees. The meetings of each Board Committee are convened by the Company Secretary in consultation with the respective Committee Chairperson. The role and composition of these Committees including the number of meetings held during the financial year and the related attendance are provided in the subsequent paragraphs. Chairman and No. of Committee Names of other Equity Mr. T. Madhava Das 0 1 0 None Mr. Anil V Parab None 2 Mr. Adil Zainulbhai 7 2 05 None 5 1 No. of Committee 0 2 Chairpersonships Membership Listed entities where he/ she holds Directorship Category of Directorship Mr. M. V. Satish 1 0 0 None Mr. Subramanian Sarma 3 0 0 None 0 Independent Director Mr. S. V. Desai Independent Director LARSEN & TOUBRO Skill Attribute Experience and Sr. Name of the Director Leadership 338 Exposure Experience in Finance and Accounts/ Audit /Risk Management areas Governance including legal compliance Annexure to the Board Report Expertise/ Appointed as an Independent Director with effect from May 10, 2023. Global Experience / International * F. Exposure Experience and Exposure in policy shaping and industry advocacy √ Governance including legal compliance Expertise/ Experience in Finance and Accounts/ Audit /Risk Management areas 337 ✓ ✗ X X X ✗ Global Experience / International X Skill Attribute # Ceased to be a Director with effect from April 7, 2024. 17. Mr. Sanjeev Aga X 10. Mr. Narayanan Kumar ✓ 11. 9. Mr. Hemant Bhargava Mrs. Preetha Reddy X 13. Mr. Pramit Jhaveri 14. Mr. Rajnish Kumar* 12. Mr. P. R. Ramesh^ √ 15. X X Mr. Ajay Tyagi^ 16. Mr. Jyoti Sagar* Non-Executive Director Non-Executive Director ✗ Crompton Greaves Consumer Electricals Limited policy shaping and industry advocacy 8. Mr. Adil Zainulbhai ✓ Exposure in ✓ X X 7. • Annual revenue budgets and capital expenditure plans d. Post-meeting internal communication system: The Board of Directors are provided information relating to the Company, which inter alia includes - Information to the Board: The details of positions held as Member/Chairperson of Committees are disclosed as per Regulation 26 of the SEBI LODR Regulations and covers only Stakeholders' Relationship Committee and Audit Committee of public companies. Other Company Directorships includes directorships in all public limited companies and excludes private limited companies, foreign companies and Section 8 companies. • Quarterly results and results of operations of ICs and business segments Independent Director Tejas Networks Limited Cipla Limited The important decisions taken at the Board/Committee meetings are communicated to the concerned departments/ ICs promptly. An Action Taken Report is regularly presented to the Board. e. Board Skill Matrix: The matrix setting out the skills/expertise/competence of the Board of Directors, as identified by the Board of Directors in the context of the Company's businesses, is given below: Sr. No Experience / Expertise / Attribute Independent Director 1 • Financing plans of the Company Minutes of meetings of Board of Directors, Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee, Board Risk Management Committee and CSR & Sustainability Committee Details of any joint venture, acquisitions of companies or collaboration agreement or sale of investments, subsidiaries, assets and quarterly report on fatal or serious accidents or dangerous occurrences Compliance or Non-compliance of any regulatory, statutory nature or listing requirements and investor service such as non-payment of dividend, delay in share transfer, etc., if any Mr. Anil V Parab Any issue, which involves possible public or product liability claims of substantial nature, including any Judgment or Order, if any, which may have strictures on the conduct of the Company Developments in respect of human resources/industrial relations Any materially relevant default, if any, in financial obligations to and by the Company or substantial non- payment for goods sold or services rendered, if any • Statements • Reports Financial Statutory Integrated Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 Report 2 C. Leadership Name of the Director Leadership No Industry knowledge and experience 1. Mr. S. N. Subrahmanyan 2. Sr. Mr. R. Shankar Raman Mr. Subramanian Sarma 4. Mr. M. V. Satish # 5. Mr. S. V. Desai 6. Mr. T. Madhava Das 3 The mapping of the Skill Matrix for all Directors is as follows: 3. Ability to have access and understand business models of global corporations, relate to the developments with respect to leading global corporations and assist the Company to adapt to the local environment, understand the geo political dynamics and its relations to the Company's strategies and business prospects and have a network of contacts in global corporations and industry worldwide. Industry knowledge and experience Experience and Exposure in policy shaping and industry advocacy 4 5 Expertise/Experience in Finance & Accounts / Audit / Risk Management Governance including legal compliance 6 Global Experience / International Exposure Comments Ability to envision the future and prescribe a strategic goal for the Company, help the Company to identify possible road maps, inspire and motivate the strategy, approach, processes and other such key deliverables and mentor the leadership team to channelize its energy/efforts in appropriate direction. Be a thought leader for the Company and be a role model in good governance and ethical conduct of business, while encouraging the organization to maximize shareholder value. Should have had hands on experience of leading an entity at the highest level of management practices. Should possess domain knowledge in businesses in which the Group participates viz. Infrastructure, Power, Heavy Engineering, Precision Engineering, Hydrocarbon, Financial Services, Information Technology and Technology Services. Must have the ability to leverage the developments in the areas of engineering and technology and other areas as appropriate for betterment of Company's business. Should possess ability to develop professional relationship with the Policy makers and Regulators for contributing to the shaping of Government policies in the areas of Company business. Commitment, belief and experience in setting corporate governance practices to support the Company's robust legal compliance systems and governance policies/practices. Ability to understand financial policies, accounting statements and disclosure practices and contribute to the financial/risk management policies/ practices of the Company across its business lines and geography of operations. areas Member Chairman Member Member 4 2 4 4 Member Mr. Narayanan Kumar Mr. S. N. Mr. Pramit Jhaveri Mr. Adil Zainulbhai Mr. A. M. Naik^ was as follows: No. of meetings eligible to attend during the year Status No. of Name Administration of Employee Stock Option Scheme (ESOS). ii) Composition: The attendance of Members at the Meetings During the year ended March 31, 2024, 4 meetings of the Nomination & Remuneration Committee were held on May 10, 2023, July 25, 2023, October 31, 2023 and January 30, 2024. iii) Meetings: As at March 31, 2024, the Committee comprised 3 Independent Directors and the Chairman & Managing Director. 2 Meetings Attended Subrahmanyan* The role, responsibilities and duties of Independent Directors are set out in the letter of appointment issued to them. Copy of the draft letter of appointment issued to Independent Directors is available on the Company's website at https://investors.larsentoubro.com/listing- compliance-disclosuresunderstatutes.aspx 324 The performance evaluation questionnaire covers qualitative/ subjective criteria with respect to the structure, culture, Board processes and selection, effectiveness of the Board and Committees, strategic decision making, functioning of the Board and Committees, Committee composition, information availability, remuneration framework, succession planning, adequate participation, assessment of their independence, etc. It also contains specific criteria for evaluating the CMD and individual Directors. An external consultant is engaged to receive the responses of the Directors and consolidate/analyze the responses. This is done through a software platform of the external consultant. Integrated Annual Report 2023-24 Corporate Overview Management Statutory Financial Discussion and Analysis Report Reports Statements As required by the provisions of Regulation 46 of the SEBI LODR Regulations, the criteria for payment to Independent Directors / Non-Executive Directors is made available on the investor page of our Company's website https://investors.larsentoubro.com/listing- compliance-disclosuresunderstatutes.aspx Performance Evaluation Criteria for Independent Directors: The Chairman of the NRC discusses the performance evaluation results with the CMD of the Company and the CMD of the Company interacts with all the Non-Executive Directors and Independent Directors. The NRC Chairman interacts with the Executive Directors. Members are also requested to refer to page 323 of the Board Report. vi) Training & Succession Planning: The company places significant emphasis on the continuous growth of its workforce. It is committed to developing internal talent and capable leaders. To achieve this, the Company has established robust processes for creating and sustaining a leadership and talent pipeline through Development Centres, its Leadership Development initiatives, and Talent Review Process. The Development Centres, pivotal to the Company's core philosophy of grooming internal talent, ensure the right leadership talent is identified through an objective selection process. The Development Centres supports the development of company's high performing talent by seamlessly conducting an objective assessment through a structured process. This is followed up with the process creation of individualised development plans as a map to enable talent to navigate their unique development journey. The company's Leadership Development initiatives are designed to cater development needs of its talent at three stages. The company enhances managerial capabilities at all levels through Management Development Programs, nurtures potential of its high performers through Leadership Competency Development Programs, and prepares its talent with proven track record & recognized potential through its signature Seven-Step Leadership Pipeline Programs. The Company's Seven-Step Leadership Pipeline Programs is an established best practice in talent development which serves to provide leadership inputs to high potential employees. These programs are carefully curated in association with prominent International & Indian institutions such as Harvard Business School, London Business School, INSEAD, Ross School of Business, and IIM Ahmedabad. These programs are regularly reviewed and aligned with the evolving landscape of business. The leaders who move up the Seven-Step Leadership Pipeline Program are mentored by the Chairman Emeritus and Chairman and MD of the Company. The company has initiated Leadership Competency Development Programs for senior managers with the Great Lakes Institute of Management, Chennai, and launched similar programs for early and middle managers in collaboration with IIM Vishakhapatnam and KREA University, conducted at their Leadership Development Academy in Lonavala. Recommend to the Board a policy, relating to remuneration for the Directors, Key Managerial Personnel (KMP) and senior management; The Company also conducts its Management Development programs in tie-up with reputed Indian B-Schools like Narsee Monjee, IIM Mumbai, XLRI and IIM-Bangalore to provide inputs to our current and potential leaders and in the process builds a strong pipeline of managers at every level. Key suggestions made by the Directors as part of the Board evaluation exercise of FY 2022-23 included holding Board meeting at/visits to places were the Company has operations, assessment of board composition, optimisation of time involvement between mandatory board requirements and strategic directional involvement and compensation benchmarking of Independent Directors. The Company has taken necessary actions on the suggestions given by the Board members viz. Board visits were arranged to Varanasi & Ayodhya during FY 2023-24, strategic sessions were part of board meetings held in March & May 2024 and the compensation of Independent Directors was benchmarked with the industry during FY 2023-24. In the case of nominees of Financial Institutions, the commission is paid to the Financial Institutions. The commission to the Independent Directors / Non-Executive Directors is distributed broadly on the basis of their attendance, contribution at the Board, the Committee meetings, Chairmanship of Committees and participation in IC meetings. Risk Management Committee (BRMC) meetings and 35,000/- for Stakeholders Relationship Committee (SRC) and CSR & Sustainability (CSR) Committee meetings, till June 30, 2023, to the Independent Directors/ Non-Executive Directors. Effective July 1, 2023, the sitting fees have been revised to * 75,000 for AC, NRC and BRMC meetings and 50,000 for SRC and CSR Committee meetings. The Board meeting sitting fee remains the same at 1,00.000 per meeting. The commission is paid in accordance with the provisions of section 197 of the Companies Act, 2013. 4 # 2 *Appointed as a member of the Committee with effect from October 1, 2023. iv) Board Membership Criteria: While screening, selecting and recommending to the Board new members, the Committee ensures that the Board is objective, there is no conflict of interest, availability of diverse perspectives, business experience, legal, financial and other expertise, integrity, leadership and managerial qualities, practical wisdom, ability to read and understand financial statements, commitment to ethical standards and values of the Company. While appointing/re-appointing any Independent Director/Non-Executive Director on the Board, the NRC considers the criteria as laid down in the Companies Act, 2013 and the SEBI LODR Regulations. While evaluating the suitability of a Director for re-appointment, besides the above criteria, the NRC considers Board evaluation results, attendance and participation in and contribution to the activities of the Board by the Director. The Independent Directors satisfy and fulfill the criteria of independence as provided under section 149(6) of the Companies Act, 2013 and all the applicable provisions of the SEBI LODR Regulations. Each Independent Director gives a certificate confirming that they meet the "independence criteria" as mentioned in section 149(6) of the Companies Act, 2013 and SEBI LODR Regulations. 341 LARSEN & TOUBRO 342 Annexure to the Board Report The Board has taken on record the declaration and confirmation submitted by the Independent Directors and after assessing the veracity of the same, the Board is of the opinion that the Independent Directors fulfill the conditions specified in the SEBI LODR Regulations and are independent of the management. These certificates have been placed on the website of the Company http://investors.larsentoubro.com/ corporate governance.aspx v) Remuneration Policy: The remuneration of the Board members is based on the Company's size and global presence, its economic and financial position, industrial trends, compensation paid by the peer companies, etc. Compensation reflects each Board member's performance and accountability. The level of compensation to Executive Directors is competitive and matches industry standards. The Company pays remuneration to Executive Directors by way of salary, perquisites and retirement benefits (fixed components) and commission (variable component), stock options based on recommendation of the NRC, approval of the Board and the shareholders. The commission payable is based on the overall performance of the Company, performance of the business / function as well as qualitative factors. The commission is calculated with reference to net profits of the Company in the financial year subject to overall ceilings stipulated under section 197 of the Companies Act, 2013. The Independent Directors / Non-Executive Directors are paid remuneration by way of commission and sitting fees. The Company paid sitting fees of ₹1,00,000/- per meeting of the Board and 50,000/- for Audit Committee (AC), Nomination and Remuneration Committee (NRC) and Board A Ceased to be a member of the Committee with effect from September 30, 2023 Carry out evaluation of the Board, its Committees, individual Directors and the CMD; Apart from the quarterly meetings for discussing the financial results, additional Audit Committee meetings are held wherein matters like Internal Audit findings, Internal Audit plan, Statutory Audit plan, treasury framework, material vendor complaints, Insider trading compliances, major litigations, related party transactions, cost audit, etc are discussed. The Audit Committee also reviews and approves the permitted non- audit services proposed to be availed by the Company or its subsidiaries from the statutory auditors. Formulation of criteria for evaluation internal control systems of a material nature and reporting the matter to the Board. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors. • To review the functioning of the Whistle Blower mechanism. • • • Approval of appointment of CFO (i.e., the Whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience & background, etc. of the candidate, if any. The recommendation for appointment, remuneration and terms of appointment of cost auditors of the Company. Review and monitor the auditor's independence and performance, and effectiveness of audit process. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of Review the management discussion and analysis of financial condition and results of operations. Reviewing the utilization of loans and/ or advances from/investment in the subsidiary companies exceeding rupees 100 crore or 10% of the asset size of the subsidiary, whichever is lower including existing loans/ advances / investments. Valuation of undertakings or assets of the company, wherever it is necessary. Evaluation of internal financial controls and risk management systems. Monitoring the end use of funds raised through public offers and related matters. Consider and comment on rationale, cost benefit and impact of Schemes involving mergers, demerger, amalgamation etc. on the entity and its shareholders. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee. 339 340 LARSEN & TOUBRO Annexure to the Board Report ii) Composition: Approval or any subsequent material modification of transactions of the Company with related parties. Discussion with internal auditors about any significant findings and follow up there on. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit. Reviewing, with the management, performance of statutory and internal auditors, and adequacy of the internal control systems. The Company, recognizing the importance of increasing visibility of its top talent for continuous development and succession planning, has established a Talent Review Process. This process enables the businesses to identify, deliberate, and plan the development and deployment of its top talent in strategic roles. To ensure the success of this initiative, a Talent Management Council led by Business & HR heads has been established dovetailing the Talent Review discussions with annual appraisal process. Corporate Overview Management Integrated Statutory Financial Discussion and Analysis Report Reports Statements 2. Changes, if any, in accounting policies and practices and reasons for the same 3. Major accounting entries involving estimates based on the exercise of judgment by management 4. Significant adjustments made in the financial statements arising out of audit findings 5. Compliance with listing and other legal requirements relating to financial statements 6. 7. Disclosure of any related party transactions Modified Opinion(s) in the draft audit report. Reviewing, with the management, the quarterly financial statements before submission to the Board for approval. Reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document/prospectus/notice and the report submitted by the agency monitoring the utilisation of proceeds of public or rights issue or Qualified Institutional Placement, and making appropriate recommendations to the Board to take up steps in this matter, if any. As on March 31, 2024, the Audit Committee comprised of four Independent Directors. iii) Meetings: During the year ended March 31, 2024, 8 meetings of the Audit Committee were held on April 18, 2023, May 9, 2023, July 24, 2023, August 23, 2023, October 30, 2023, November 29, 2023, January 29, 2024 and March 11, 2024. The attendance of Members at the Meetings was as follows: Name The Company has an internal corporate audit team consisting of Chartered Accountants, Certified Internal Auditors and Engineers from various disciplines. Over a period, the Corporate Audit Services department ("CAS") has acquired in-depth knowledge about the Company, its businesses, its systems & procedures, the knowledge of which is now institutionalized. The Company's Internal Audit function is ISO 9001:2015 certified. The Head of CAS reports to the Audit Committee. The staff of CAS are rotated periodically to have a holistic view of the entire operations and share the findings and good practices. The CAS team while drawing out their Audit Plan for the year, also plans for some theme-based audits (Revenue recognition, HR, Treasury, Insurance etc.) which is incorporated in the overall audit programme and also performs certain joint audits with other corporate departments for specific functions. The Company being predominantly a project-oriented Company, CAS emphasizes a risk-based focus areas in project audits. It encourages its team members to obtain globally renowned Certified Information Systems Auditor (CISA), Certified Internal Auditor (CIA) and Certified Fraud Examiner (CFE) Certification, etc., which will add strength to the Department. Every year, CAS reviews the Audit Universe which is an exhaustive list of businesses, functions, activities and locations across the Company. The yearly plan details out the scope and coverage of audits proposed for the year and it is ensured that, on an average, all operations in the Audit Universe gets into an audit coverage, at least once in 2 years. The CAS team has its offices at Mumbai and Chennai and all overseas audits are shared between these two teams. From time to time, the Company's systems of internal controls covering financial, operational, compliance, IT applications, etc. are also reviewed by external experts. Presentations are made to the Audit Committee, on the findings of such reviews. The CAS team of the Company also covers the internal audit of all ICs and Subsidiary Companies. An in-depth audit is conducted by the team. The major deviations are Integrated Annual Report 2023-24 Corporate Overview Management Integrated Statutory Financial Discussion and Analysis Report Reports Statements highlighted and discussed with the concerned IC and/or subsidiary company Board and significant observations are also placed before the Audit Committee of the Company once in every quarter. Internal Audits of few subsidiaries and few other service functions have been out sourced to external firms. 2) Nomination & Remuneration Committee (NRC) The Nomination & Remuneration Committee was constituted in 1999 even before it was mandated by law. i) Terms of reference: • • Identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down by the Committee; Recommend to the Board appointment and removal of such persons or extension of term of Independent Directors; Formulate criteria for determining qualifications, positive attributes and independence of a director; Devise a policy on Board diversity; iv) Internal Audit: of directors, Board and the Board Committees; The Whole-time Director & Chief Financial Officer and Head - Corporate Audit Services are permanent invitees to the Meetings of the Audit Committee. The Company Secretary is the Secretary to the Committee. Effective from April 1, 2024, Mr. P. R. Ramesh, Independent Director, has been appointed as Chairman of the Audit Committee and Mr. Rajnish Kumar, Independent Director has been appointed as member of the Committee. Mr. M. M. Chitale$ Status No. of meetings eligible to attend during the year Chairman 8 Mr. M. Damodaran $ Member Mr. Sanjeev Aga Member Mr. Vikram Singh Member Mehta$ 8 ∞ ∞ ∞ ∞ No. of Meetings Attended 8 8 ∞ ∞ ∞ ∞ 8 8 8 8 $ Ceased to Member of the Committee with effect from March 31, 2024. Majority of the members of the Audit Committee are financially literate and have accounting or related financial management expertise. 343 No. of Meetings attend during Attended LARSEN & TOUBRO 2 SEBI / Stock Complaints: B. Sustainability: Received Resolved Pending* Opening Balance Particulars qualify to be ongoing projects Board the CSR projects that will Identify and recommend to the V. iv. Monitor the implementation of the CSR Action Plan of the Company from time to time; and iii. Recommend the CSR annual budget to the Board for approval development of annual CSR Action Plan Provide guidance for the ii. During the year, the Company / its Registrar received the following complaints from SEBI / Stock Exchanges and queries from shareholders, which were resolved within the time frames laid down by SEBI. iv) Number of Requests / Complaints: During the year, the Company has resolved investor grievances expeditiously except for the cases constrained by disputes or legal impediments. the Board Report Annexure to LARSEN & TOUBRO 346 345 156 157 1 Exchange 7,113 7,117 7 Demat / Remat Others 100 9,684 9,497 Transmission/ 287 Related 5 9,490 9,520 Mr. Sivaram Nair A, Company Secretary is the Compliance Officer. 35 ii. Shareholder Queries: suggest any changes thereto Board a Sustainability Policy and Formulate and recommend to the i. 4 503 504 3 Shareholders Dividend *100 shares held jointly with the Institution he represents. Ceased to be Independent Directors with effect from March 31, 2024 on account of completion of tenure. Appointed as a member of the Committee with effect from April 8, 2023 Mr. Ajay Tyagi Mr. Jyoti Sagar Mr. Rajnish Kumar Mr. Pramit Jhaveri Meetings attend during Attended 0.00 180 Mrs. Preetha Reddy eligible to Status Name 20,550 0.00 * Mr. Hemant Bhargava No. of No. of meetings 0.00 1,500 Mr. Narayanan Kumar 0.00 100 Mr. Sanjeev Aga 0.00 188 3 0.00 100 # 0.00 10,384 0.00 100 Mr. Sivaram Nair A Mr. P. R. Ramesh 2 2 Member Mr. T Madhava Das# the year 0.00 2 2 Member Mr. Hemant Bhargava 0.00 100 2 2 Chairman Mr. Narayanan Kumar 0.00 100 * Investor complaints / queries shown outstanding as on March 31, 2024 have been subsequently resolved to the complete satisfaction of the investors. The Company repeatedly sends reminders to shareholders regarding unclaimed shares and dividends. This results in an increase in the number of queries received. Pursuant to the amendments in SEBI LODR Regulations, transfer of securities in physical form are not being processed by the Company. Further, all requests for transmission, transposition, issue of duplicate share certificate, claim from unclaimed suspense account, renewal/exchange of securities certificate, endorsement, sub- division/splitting of securities certificate and consolidation of securities certificates/folios are being processed only in demat form. In such cases the Company issues a letter of confirmation, which needs to be submitted to Depository Participant to get credit of these securities in dematerialized form. 4) CSR & Sustainability Committee: i) Terms of reference: attended during the meetings No. of meetings held Status No. of Name The attendance of Members at the Meetings was as follows- Annexure to the Board Report LARSEN & TOUBRO 348 year G. 2 meetings of the Board Risk Management Committee were held on April 19, 2023 and October 16, 2023. During the year ended March 31, 2024, iii) Meetings: 2 Independent Directors and 1 Executive Director. As on March 31, 2024, the Board Risk Management Committee comprised of ii) Composition: The Company also has an Apex Risk Management Committee, comprising of Executive Directors, which reviews the operational risks including client quality, manpower availability, logistic and other aspects which impact the Company and the Group. The Committee periodically reviews the risk status to ensure that executive management mitigates the risks by means of a properly designed framework. Evaluate risks related to cyber security. Review of the existing Risk Management Policy, framework and processes, Risk Management Structure and Risk Mitigation Systems. Broadly, the key risks will cover strategic risks of the group at the domestic and international level including sectoral developments, risk related to market, financial, geographical, political and reputational issues, Environment, Social and Governance (ESG) risks, etc. The terms of reference of the Board Risk Management Committee are as follows: 347 i) Mr. Adil Zainulbhai 2 Integrated Annual Report 2023-24 c) Vigil Mechanism / Whistle Blower Policy: The Company has a Whistle Blower Policy in place since April 2004. The said policy was modified in line with the requirements of the Vigil Mechanism under the Companies Act, 2013 and subsequently in 2018 to include reporting of instances of leakage of unpublished price sensitive information as per SEBI (PIT) Amendment Regulations, 2018. The Company has a Whistle Blower Investigation Committee (WBIC) to manage complaints from "Identified" Whistle Blowers. In addition, WBIC considers "Anonymous" complaints which in their judgement are serious in nature and require investigation. The WBIC has five members viz. Chief Financial Officer, Company Secretary, Head-Corporate HR, Chief Internal Auditor and a senior Finance & Accounts person from business. The WBIC is responsible for end-to-end management of the investigations, from the time about-lt-group/corporate-policies/. The Company has a policy for determination of materiality of events or information for disclosure to the stock exchanges. The policy has clearly defined guidelines and materiality thresholds for determination of materiality of certain events or transaction or information with respect to the Company, its Subsidiaries and Associate Companies. During FY 2023-24, the Policy was reviewed and revised to align the same with the amendments made to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Company has also implemented a software application to assist employees to report potential material event / information to authorised Key Managerial Personnel. The Policy is available on the Company's website at https://www.larsentoubro.com/corporate/ b) Policy for determination of materiality of events or information listing-compliance-disclosuresunderstatutes.aspx. This information is also available on the website of the Company https://investors.larsentoubro.com/ As part of the appointment letter issued to Independent Directors, the Company has stated that it will facilitate attending seminars/programs/ conferences designed to train directors to enhance their role as an Independent Director. of the IC Board. They share the learnings from these meetings with the remaining Non-Executive Directors/Independent Directors formally and informally. Such interactions also happen when these Directors meet senior management in IC meetings and informal gatherings. Some of the Independent Directors are members Presentations are made regularly to the Board, NRC, AC, BRMC, SRC and CSR & Sustainability Committee, where Directors get an opportunity to interact with senior managers. Minutes of AC, NRC, SRC, BRMC and CSR Committees are circulated to the Board. Presentations, inter alia, cover business strategies, management structure, HR policy, management development and succession planning, quarterly and annual results, budgets, treasury policy, review of internal audit, risk management framework, operations of subsidiaries and associates, etc. Independent Directors have the freedom to interact with the Company's Management. Interactions happen during Board/Committee meetings, when senior company personnel are asked to make presentations about performance of their Independent Company (IC)/Business Unit, to the Board. Chairman The internal newsletters of the Company, the press releases, etc. are circulated to all the Directors so that they are updated about the operations of the Company. a) Directors' Familiarization Program: OTHER INFORMATION Members are also requested to refer to page 322 of the Board Report. 2 2 2 Member Mr. Subramanian Sarma 2 Member Mr. Sanjeev Aga 2 The Directors of the Company are updated on changes/developments in the domestic/ global markets and industry scenario through presentations made at Board, Committee, IC meetings and interactions with senior company personnel. The Directors are also updated about changes in statutes/legislations and economic environment, and on matters significantly affecting the Company, to enable them to take well informed and timely decisions. The Board meetings are also held in locations where the Company has operations to apprise the Directors about its operations. 150 5) Board Risk Management Committee: Terms of reference: documented in the monthly reporting process. These are subsequently vetted / measured during the external Social Audit or Impact Assessment. The Social Audit/Impact Assessment report is discussed during the CSR & Sustainability Committee meetings and it forms a part of Annexure C to this Board Report. 3 3 3 Chairman Member Mr. R. Shankar Mr. M. M. Chitale# the year eligible to Status No. of meetings Name 3 The Members at the Committee are as follows- During the year ended March 31, 2024, iii) Meetings: As on March 31, 2024, the CSR Committee comprised 1 Independent Director and 2 Executive Directors. ii) Composition: iv. Review of Business Responsibility and Sustainability Report of the Company. iii. Monitor the implementation of the Sustainability Plan of the Company from time to time Provide guidance for the development of the long-term Sustainability Plan; and the Board a Corporate Social Responsibility Policy and suggest any changes thereto i. A. Corporate Social Responsibility: Formulate and recommend to The CSR & Sustainability ("CSR") Committee has been entrusted with the task of reviewing the sustainability and Corporate Social Responsibility initiatives of the Company. 3 meetings of the CSR Committee were held on April 29, 2023, October 7, 2023 and March 15, 2024. The detailed disclosures of CSR spending during the year has been given in Annexure 'C' forming part of this Board Report. Please refer to page 365 of this Integrated Annual Report. Raman Member All CSR projects have defined goals and milestones which are tracked as per the periodicity defined for the project. The progress is compared with the baseline data that is gathered before the commencement of the project. This is carried out through an onsite evaluation as well as the reports generated from the project. The indirect impact that accrued are also factored and Skill development: Enhancing employability of youth (enhancing training capacity, improved infrastructure of skill development centres). Health: Improvement in access to quality health care (expanding infrastructure of health centres, increased number of people availing quality health care) education (increased enrollment in pre- school, children attending neighborhood schools), improving quality of learning (better school infrastructure, better teaching-learning process) and learning STEM (Science Technology Engineering and Math) subjects with fun and hands on experiments Education: To improve access to Water & Sanitation: For the availability of safe drinking water and proper sanitation facilities • The Company is leveraging its countrywide presence to reduce disparities through interventions in Water and Sanitation, Healthcare, Education and Skill Building. Close interactions with the local community members have enabled the Company to identify and address their most pressing needs and the social interventions for community development have been specifically aligned. The Company has launched programs towards holistic development in the following areas based on need assessment: Sagar, Independent Director, has been appointed as member of the Committee. iv) CSR Activities & Impact Assessment: The Company, through its CSR & Sustainability Committee, is committed to improve the social infrastructure / fabric of the Country. The Company's CSR programmes are well-entrenched, focusing on areas that align with the global and national matrices of development: water & sanitation, health, education and skill-building. Financial Statements Reports Mr. S. V. Desai* Report Statutory Integrated Management Corporate Overview Integrated Annual Report 2023-24 Effective April 1, 2024, Mr. Ajay Tyagi, Independent Director, has been appointed as the Chairman of the Committee and Mr. Jyoti * Appointed as member of the Committee with effect from April 8, 2023 * # Ceased as Chairman & member of the Committee with effect from March 31, 2024 3 3 Discussion and Analysis Mr. Adil Zainulbhai 0.00 1,327 Committee Total Commission Sitting Fees for Sitting Fees for Board Meeting crore The details of remuneration paid / payable to the Non-Executive Directors for FY 2023-24 is as follows: (b) Non-Executive Directors: Mr. Subramanian Sarma has exercised 25,000 stock options in the Company vested during the year. The perquisite amount on exercise of these options is considered as a part of his remuneration. compliance-agm.aspx. Details of Options granted under Employee Stock Option Schemes are provided on the website of the Company https://investors.larsentoubro.com/listing- Meetings No severance pay is payable on termination of appointment. Names *Represents perquisite value related to ESOPS exercised during the year in respect of stock options granted over the past several years by the Company and includes tax on ESOPS borne by the Company wherever applicable. $ Ceased to be Whole-time Director with effect from April 7, 2024. @ Ceased to be Whole-time Director with effect from April 7, 2023. ^ Appointed as Chairman & Managing Director with effect from October 1, 2023 8.62 12.52 2.61 0.24 1.05 Mr. Anil V Parab 13.06 18.74 Notice period for termination of appointment of Chairman & Managing Director and other Whole-time Directors is six months on either side. 3.86 Mr. A. M. Naik^ 0.01 Board Total Commission Names Fees for Fees for Sitting Sitting crore Financial Statements Reports 0.03 Statutory Discussion and Analysis Management Corporate Overview Integrated Annual Report 2023-24 0.72 0.59 0.07 0.06 Mr. M. M. Chitale$ 1.69 1.65 Integrated Report Committee 0.59 T. Madhava Das Subrahmanyan^ 35.28 51.05 10.50 1.67 3.60 Mr. S. N. ESOP* Benefits Commission Total Salary Perquisites related to Names Mr. R. Shankar Retirement crore The details of remuneration paid / (a) Executive Directors: to Directors for the year ended March 31, 2024: vii) Details of remuneration paid / payable For more details on training and succession planning, please refer to the Human Capital section of the Integrated Report. The Nomination and Remuneration Committee discussed matters relating to succession planning of Directors and senior officials of the Company. Moving to the Company's digital initiatives in the learning space, the Company has taken further strides in its digitalization by launching a new Learning Management System (LMS) on SAP Success Factors platform. The LMS hosts an extensive array of training programmes and integrates external resources from platforms like Coursera, Percipio, and Harvard Manage Mentor offering a rich & adaptable learning environment for all employees, thus, making learning democratised and learner centric. Additionally, the Company has established niche learning academies, such as the Academy of Digital Transformation and Academy of GenAl, to address domain- specific needs. The Company's digital learning solutions provide role-specific and skill-focused learning, using platform-based skill benchmarking. In 2023-24, the Company logged 5.20 lakh training hours from 38,500 L&T employees via digital learning modes. The Company's own HR Excellence Model ensures that the above practices are continuously evaluated and kept in alignment with contemporary people dimensions, thus enhancing people strategy and practices aiding organizational performance. In the fiscal year 2023-24, the Company's commitment to its workforce was recognized by Great Place to Work for the second consecutive year. The company recognizes the shifts taking place in the workforce due to changing macro-economic conditions, talent demographics & aspiration, and emphasis on Diversity, Equity & Inclusion. These changes require a renewed form of leadership that can integrate high-performance with changing talent needs. To address this need, the Company has launched its own People Leadership Excellence Framework. This is a five-dimension framework which will guide several initiatives for assessing and nurturing people leadership capabilities across the Company. Annexure to the Board Report Perquisites 1.23 2.25 6.50 13.41 19.21 3.95 0.62 1.23 S. V. Desai Sarma 18.56 37.03 5.57 9.99 0.84 2.07 1.08 Mr. Subramanian 2.78 0.74 1.71 Mr. M. V. Satish$ 0.18 22.93 22.26 0.46 0.03 Mr. D. K. Sen @ Raman 21.83 31.66 8.57 13.80 344 Meeting Mr. M. Damodaran$ Shareholding Percentage No. of Shares The attendance of Members at the Meetings was as follows- During the year ended March 31, 2024, 2 meetings of the Stakeholders' Relationship Committee were held on June 14, 2023 and January 10, 2024. iii) Meetings: As on March 31, 2024, the Stakeholders' Relationship Committee comprised 1 Non- Executive Director, 1 Independent Director and 1 Executive Director. ii) Composition: Review of adherence to the service standards adopted by the Company in respect of various services being rendered by the Registrar & Share Transfer Agent. Review of the various measures and initiatives taken by the Company for reducing the quantum of unclaimed dividends and ensuring timely receipt of dividend warrants/annual reports/ statutory notices by the shareholders of the Company. Review of measures taken for effective exercise of voting rights by shareholders. Resolving the grievances of the security holders of the Company including complaints related to transfer/ transmission of shares, non-receipt of annual report, non-receipt of declared dividends, issue of new/duplicate certificates, general meetings etc. Relationship Committee are as follows: Mr. S. N. Subrahmanyan The terms of reference of the Stakeholders' i) 3) Stakeholders' Relationship Committee: Details of shares of the Company held by the Directors and Key Managerial Personnel, as on March 31, 2024, are as follows: Name $ Ceased to be an Independent Director with effect from March 31, 2024. Appointed as an Independent Director of the Company with effect from October 31, 2023. * @ Appointed as an Independent Director of the Company with effect from May 10, 2023. ^ Ceased to be a Director of the Company with effect from September 30, 2023 # Payable to the Institution he represents. Note Remuneration of Mr. A. M. Naik excludes 1.5 crore paid to him during the financial year towards pension. Terms of reference: 0.13 2,65,584 Mr. R. Shankar Raman Mr. Vikram Singh MehtaⓇ 0.00 225 Mr. M. DamodaranⓇ 0.00 3,568 Mr. M. M. ChitaleⓇ 0.01 1,11,040 Mr. Anil V. Parab 0.00 0.02 16,265 0.00 25,810 Mr. S. V. Desai 0.01 1,84,053 Mr. Subramanian Sarma 0.00 46,457 Mr. M. V. Satish 0.02 2,96,616 Mr. T. Madhava Das Meetings 0.10 Mr. P. R. Ramesh* 0.44 0.04 0.05 Mr. Narayanan Kumar 0.53 0.40 0.07 0.06 Mr. Sanjeev Aga 0.58 0.50 0.53 0.03 Mr. Adil Zainulbhai 0.57 0.45 0.06 0.06 Mehta$ Mr. Vikram Singh 0.65 0.53 0.06 0.06 0.05 0.03 Mr. Hemant Bhargava 0.06 0.13 0.10 0.03 Mr. Ajay Tyagi* 0.22 0.17 0.05 Mr. Jyoti Sagar 0.22 0.17 0.05 # Mr. Rajnish KumarⓇ 0.28 0.03 0.06 Mr. Pramit Jhaveri 0.22 0.17 0.05 Mrs. Preetha Reddy 0.29 0.22 0.01 0.37 payable to the Executive Directors for FY 2024 is as follows: Integrated Company were held as under: The ICs have separate internal teams to oversee their legal and compliance functions. All Subsidiary Companies associated with the respective ICs are reviewed by their respective IC Boards. Responsibility of the Company's corporate team in the areas of statutory compliance (including corporate laws), Risk Management, Internal Controls and Internal Audit, covers all unlisted subsidiaries. The three listed entities have their own teams to carry out these functions. The Company has entered into brand/trademark licensing agreement with its equity listed subsidiaries and fees are charged based on turnover/profits/assets. All these listed entities have one Executive Director of the Company and L&T Technology Services Limited and LTIMindtree Limited have one Independent Director of the Company on its Board. Any financial assistance to the above companies or purchase/sale by the Company of their shares, is dealt with by the Company's Board. These listed entities publish their Independent Auditor's certificate on Corporate Governance, Secretarial Audit Report of Practising Company Secretary and CEO/CFO's certificate for internal controls for financial reporting. Companies Act, 2013 and SEBI LODR Regulations. The Board Report and its annexures of these listed companies contains various disclosures dealing with subsidiary companies. The Company has three listed entities within the group. Each of these entities have their own Board and Board Committees in compliance with the Companies Act, 2013 and SEBI LODR Regulations. The oversight of their subsidiaries is as per "Corporate Governance" in the Company and its subsidiaries broadly includes strategic supervision by the Board and its Committees, compliance of Code of Conduct, Statutory Compliance including compliance of Companies Act, 2013 / applicable SEBI Regulations, avoiding conflict of interest, Risk Management, Internal Controls and Audit. Vide its circular dated May 10, 2018, SEBI has introduced the concept of Group Governance Unit. The circular expects listed companies to monitor their governance through a Governance Committee and establishment of a strong and effective group governance policy. ee) Group Governance Policy: The Company also engages external consultants to prepare as well as review compliance checklists for the new geographies and update the existing checklist(s) of compliances. Compliance tasks are mapped in iCompliance portal to process owners who update the status with supporting evidence. Identified key stakeholders across functions ensure and confirm compliance with the provisions of all applicable laws on a regular basis. To strengthen & make the compliance monitoring process more robust, the Company has implemented a web-based portal known as "iCompliance portal", which enables us to monitor the regulatory compliance performance, remediation plans for non-conformities. This portal also helps us maintain updated list of applicable laws and compliance checklist(s) which are monitored & tracked through the portal. The subsidiary companies also function independently and have separate Boards which consists of representatives of the Company, who are senior executives of the Company, representatives of Joint Venture partners, representative of the Company's Board as well as Independent Directors as required by law. As per law, these companies, wherever required, also have Audit Committee, Nomination & Remuneration Committee, CSR & Sustainability Committee, Stakeholders' Relationship Committee and Risk Management Committee. State Acts/Rules where the Company carries on business. The list of applicable laws are reviewed by an External Consultant along with the Legal & Finance & Accounts functions of each Business. Each Business head certifies compliance of all applicable laws on a quarterly basis. Based on these confirmations, the Company Secretary gives a compliance certificate to the Board of Directors. The Company verifies the compliances through a random review of the process / system / documentation with the Business / Corporate function. LARSEN & TOUBRO 358 357 The Company has in places system to ensure compliance with applicable laws, rules and regulations. These comprise of Central and dd) Statutory Compliance System: Pursuant to the provisions of Section 204(1) of the Companies Act, 2013 and Regulation 24A of SEBI LODR Regulations, M/s. S. N. Ananthasubramanian & Co., Company Secretaries, conducts the secretarial audit of the compliance of applicable statutory provisions and the adherence of good corporate practices by the Company. Pursuant to Chapter IV-A of SEBI Master Circular No. SEBI/HO/CFD/POD2/CIR/P/2023/120 dated July 11, 2023, the Company has obtained an annual secretarial compliance report from M/s. S. N. Ananthasubramanian & Co., Company Secretaries and submitted the same to the Stock Exchanges within the prescribed timelines. cc) Secretarial Audit to review and audit its secretarial and other statutory compliances by competent professionals. Appropriate actions are taken to continuously improve the quality of compliance. The Secretarial Department of the Company at Mumbai is manned by competent and experienced professionals. The Company has a system As stipulated by SEBI, M/s. S. N. Ananthasubramanian & Co., Company Secretaries, Secretarial Auditors of the Company carries out Reconciliation of Share Capital Audit to reconcile the total admitted capital with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) with the total issued and listed capital. This audit is carried out every quarter and the report thereon is submitted to the Stock Exchanges. The Audit has provided a reconciliation of total Listed and Paid-up capital is in agreement with the aggregate of the total number of shares in dematerialized form and in physical form. bb) Audit as per SEBI requirements: Annexure to the Board Report Integrated Annual Report 2023-24 Major unlisted subsidiaries have some Executive Directors of the Company on their Board. The subsidiary companies' performance is reviewed by the Company's Board periodically (included in quarterly results presented to the Company's Board). F&A heads of some of the subsidiary April 3. Arabia LLC 4. Approval of 99.91% 0.09% July 25, Buyback of Equity 2023 August 25, 2023 Shares : INE018A01030 : LART.BO ISIN Reuters RIC Luxembourg Exchange Stock : 005428157 Code London Exchange Stock Code : LTOD The Company's shares constitute a part of BSE 30 Index of the BSE Limited as well as NIFTY Index of the National Stock Exchange of India Limited. BSE SENSEX High Low h) Stock market data for the FY 2023-24: L&T BSE Price (*) Month Month Close Close 2,368.75 2,155.55 2,364.75 61,209.46 58,793.08 61,112.44 2,416.00 2,168.65 2,206.45 63,036.12 61,002.17 62,622.24 2,482.95 2,202.20 2,474.50 64,768.58 62,359.14 64,718.56 2,687.90 2,419.95 2,679.90 67,619.17 64,836.16 66,527.67 Month 2023 High Low The Company's Secretarial Department which provides secretarial services and investor services for the Company and its Subsidiaries and Associate Companies is ISO 9001:2015 certified. aa) ISO 9001:2015 Certification: The Policy is also available on the Company's website at https://www.larsentoubro.com/ corporate/about-It-group/corporate-policies/. The Company has adopted the Anti-Bribery and Anti-Corruption (ABAC) Policy which acts as a guiding framework for ensuring compliance with various legislations and standards of behaviour to which the Company and all its officials must adhere to. This Policy is applicable to all employees of the Company working at all levels and is widely disseminated across the Company. The Company has appointed Mr. P. Ramakrishnan, Executive Vice President (Corporate Accounts, Taxation & Investor Relations), as Chief Investor Relations Officer. The Company also formulated Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information which is available on Company's Website https://www.larsentoubro.com/ corporate/about-It-group/corporate-policies/. Mr. Sivaram Nair A., Company Secretary has been designated as the Compliance Officer. The objective of the Securities Dealing Code ('Code') is to prevent purchase and / or sale of shares of the Company by an Insider based on Unpublished Price Sensitive Information. Under this Code, Designated Persons (Directors, Advisors, Officers and other concerned employees / persons) are prevented from dealing in the Company's shares during the closure of Trading Window. To deal in securities beyond specified limit, permission of Compliance Officer is also required. Directors and designated employees who buy and sell shares of the Company are prohibited from executing contra-trades during the next six months following the prior transactions. The Company has a policy for acting against Directors and employees who violate the SEBI PIT Regulations / Code. Pursuant to the enactment of the SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2018, the Company has suitably modified the provisions of the Code which are effective from April 1, 2019. v) Securities Dealing Code: The Company has designated an exclusive e-mail ID viz. IGRC@LARSENTOUBRO.COM to enable investors to register their complaints, if any. u) Investor Grievances: Tel: (022) 6623 5454/5412/5427 Fort, Mumbai - 400 023. Ground Floor, Ambalal Doshi Marg, Behind BSE Limited, 24-B, Raja Bahadur Mansion, Unit: Larsen & Toubro Limited KFin Technologies Limited 2. Annexure to the Board Report LARSEN & TOUBRO 356 355 Website: www.kfintech.com Email: einward.ris@kfintech.com Toll free number: 1-800-3094-001 Fax: (040) 2342 0814 Tel: (040) 6716 2222 Telengana 500 032 Hyderabad, Nanakramguda, Plot 31 & 32, Gachibowli, Financial District, w) Stakeholder Engagement: 0.01% The Company recognizes that its stakeholders form a vast and heterogeneous community. Our customers, shareholders, employees, suppliers, community, etc. have been guideposts of our decision-making process. The Company engages The communication channels with the Company's stakeholders include: z) Anti-bribery and Anti-corruption policy: The Company has established a scalable, multi-featured and externally integrated digital learning platform called ATLNext. It offers a gamut of online courses including competency courses, behavioural courses, and business-specific technical courses. ALTNext also provides for a course on Governance where employees can learn about Governance practices and give a self- assessment test after completion of the course. The Company has created a batch of trainers across businesses who in turn conduct training / awareness sessions within their business regularly. Employees across the Company as well as the group are being sensitized about the various policies and governance practices of the Company. The Company has designed in-house training workshops on Corporate Governance with the help of an external faculty covering basics of Corporate Governance as well as internal policies and compliances under Code of Conduct, Whistle Blower Policy, Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, SEBI (Prohibition of Insider Trading) Regulations, 2015, etc. y) Awareness Sessions/Workshops on Governance practices: For more information regarding supplier/ contractor management please refer to Relationship Capital section of the Integrated Report. Conducting awareness programmes for vendors and suppliers. Evaluation of key suppliers on ESG parameters. Mandatory signing of Code of Conduct as apart of vendor onboarding process, laying down minimum requirements for ESG compliance. undertaken by the Company in this regard are given below: Financial Statements Reports Report Discussion and Analysis Statutory Integrated Management Corporate Overview Integrated Annual Report 2023-24 The Company strives to foster responsible behaviour in the supply chain in accordance with the highest standards of ethics and integrity, respect for the law, human and labour rights, and environmental protection. Various initiatives X) Supplier/Contractor management: For more information regarding the initiatives undertaken by the Company to engage with its stakeholders please refer to the Relationship Capital section of the Integrated Report and disclosures given under Principle 4 of the Business Responsibility and Sustainability Report. corporate/about-It-group/corporate-policies/. Each of the businesses have their internal mechanisms to address the grievances of its stakeholders. In addition, at the corporate level, there are committees which can be approached if the stakeholders are not satisfied with the functioning of such internal mechanisms. As part of the vigil mechanism, the Whistle Blower Policy provides access to the Chairperson of the Audit Committee. The Whistle Blower Policy for Vendors & Channel Partners is displayed on the website of the Company https://www.larsentoubro.com/ For internal stakeholders - Employee satisfaction surveys, employee engagement surveys for improvement in employee engagement processes, circulars and messages from management, corporate social initiatives, welfare initiatives for employees and their families, online news bulletins for conveying topical developments, large bouquet of print and online in-house magazines, helpdesk facility, etc. For external stakeholders - Stakeholder engagement sessions, client satisfaction surveys, shareholder satisfaction assessment, dealer and stockists meet, analyst / investors meet, periodic feedback mechanism, general meeting for shareholders, online service and dedicated e-mail service for grievances, corporate website, etc. with its identified stakeholders on an ongoing basis through business level engagements and structured stakeholder engagement programs. The Company maintains its focus on delivering value to all its stakeholders, especially the disadvantaged communities. 99.99% Larsen Toubro Transaction(s) with The Company has laid down a Code of Conduct for all Board members and senior management personnel. The Code of Conduct is available on the website of the Company https://www.larsentoubro.com/. The declaration of the CMD is given below: To the Shareholders of Larsen & Toubro Limited Sub: Compliance with Code of Conduct hereby declare that all the Board Members and Senior Management Personnel have affirmed compliance with the Code of Conduct for Board Members and Senior Management. Date: May 8, 2024 Place: Mumbai S. N. Subrahmanyan Chairman & Managing Director f) General Body Meetings: The last three Annual General Meetings of the Foreign Institutional Financial Year Date Venue Time 2022-2023 August 9, 2023 Birla Matushri Sabhagar, 3.00 p.m. 19, Marine Lines, Mumbai 400 020 and through Video Conferencing/Other Audio-Visual Means 3:30 p.m. 2021-2022 August 4, 2022 Meeting was held through Video Conferencing/Other e) Code of Conduct: Audio-Visual Means Also refer to page 326 of the Board Report. network entity of which the statutory auditors are Discussion and Analysis Integrated Report Statutory Reports Financial Statements of receipt of complaints to bringing them to a logical conclusion, keeping in mind the interest of the Company. Suitable actions are taken against employees, wherever investigation confirms the allegations. Employees are encouraged to report any acts of unacceptable behaviour inconsistent with the Company's Code of Conduct, having an adverse effect on the Company's financials/image and instances of sharing of unpublished price sensitive information. An employee can report any such conduct in oral or written form. Whistle-blowers are assured by the Management of full protection from any kind of harassment, retaliation, victimization, or unfair treatment. Complaints under the Whistle Blower Policy are received by the Corporate Audit Services of the Company from various sources. The Chief Internal Auditor reviews the same and after screening the complaint, decides on the further course of action which will include requesting the complainant to provide further details, internal investigation by the CAS department, investigation by external agencies, wherever necessary, opportunity to the defendant to present his/her case, etc. Based on the findings of the investigation, the Corporate Audit Services takes the approval of WBIC for the action recommended by them to be taken. The WBIC is appraised on the complaints received, current status, actions contemplated and closure of the cases. The WBIC reviews the complaints and their progress. Queries by the WBIC members are immediately attended to by CAS and the implementation of the recommended actions are undertaken by the respective HR/Accounts Departments. The policy provides for adequate safeguards against victimisation of Whistle Blowers and provides for direct access to the Chairperson of the Audit Committee. The Audit Committee of the Company oversees the implementation of the Whistle-Blower Policy. The Audit Committee is periodically briefed about the various cases received, the status of the investigation, findings and action taken, if any and a comprehensive update is provided semi-annually which is presented and discussed at the Audit Committee Meeting. During the year, no person has been denied access to the Audit Committee, wherever desired. The Company has a zero-tolerance policy towards breach of Code of Conduct and to this extent, the Company has built a robust framework around the Whistle Blower mechanism to actively address all complaints received. The Company also has a separate Whistle Blower Policy for its vendors and channel partners. This policy provides all stakeholders an opportunity to report genuine concerns about unethical behaviour, improper practices, misconduct, any violation of legal or regulatory requirements, actual or suspected fraud without fear of punishment or unfair treatment. The details of the same are available on the Company's website https://larsentoubro.com/corporate/ about-lt-group/corporate-policies/. Also refer to page 326 of the Board Report. d) Statutory Auditors: In the case of appointment of new auditors, an internal team is formed to carry out the selection process. The internal team works under the guidance of the Chairman of the Audit Committee. The criteria for shortlisting / selection are identified and firms are evaluated based on those criteria. The internal team considers factors such as experience, expertise, size, availability of time of a senior partner and reach etc. during the process of evaluation. Based on merit and the factors mentioned above, the Internal team shortlists the firm to be appointed and recommends the same to the Audit Committee. The Audit Committee reviews the same before recommending to the Board and shareholders for approval. The Auditing Partners are rotated periodically to ensure objectivity in the audit processes. The Company also appoints joint auditors prior to end of the term of the existing auditors to ensure smooth transition and enable the new auditors to understand the systems and processes of the Company. Deloitte Haskins & Sells LLP ("DHS LLP" or "Firm") is registered with the Institute of Chartered Accountants of India (Registration No. 117366W/ W-100018). DHS LLP has offices in Mumbai, Delhi, Kolkata, Chennai, Bangalore, Ahmedabad, Hyderabad, Coimbatore, Kochi, Pune, Jamshedpur and Goa. The registered office of the Firm is One International Center, Tower 3, 32nd Floor, Senapati Bapat Marg, Elphinstone Road (West), Mumbai-400013, Maharashtra, India. M/s. MSKA & Associates ("MSKA") were appointed as the Statutory Auditors of the Company for a term of 5 years i.e. from the conclusion of 79th Annual General Meeting till 349 350 LARSEN & TOUBRO Annexure to the Board Report the conclusion of 84th Annual General Meeting of the Company, subject to approval of the shareholders. DHS LLP would be completing their tenure as Statutory Auditors of the Company on conclusion of the 80th Annual General Meeting of the Company to be held in the calendar year 2025. In order to provide the new auditors adequate time to get familiar with the Company's operations & processes and to ensure a smooth transition, both, DHS LLP and MSKA would jointly conduct the audit from the conclusion of 79th Annual General Meeting of the Company till the conclusion of the 80th Annual General Meeting. MSKA & Associates is an Indian Partnership Firm registered with the Institute of Chartered Accountants of India (ICAI) and the US Public Company Accountancy Oversight Board (PCAOB) having offices across 12 cities in India at Mumbai, Gurugram, Chandigarh, Kolkata, Ahmedabad, Chennai, Goa, Pune, Bengaluru, Kochi, Hyderabad and Coimbatore. The head office of the firm is at 602, Floor 6, Raheja Titanium, Western Express Highway, Geetanjali Railway Colony, Ram Nagar, Goregaon (E), Mumbai 400063, India. For FY 2023-24, the total fees paid by the Company and its subsidiaries, on a consolidated basis, to Deloitte Haskins & Sells LLP, Statutory Auditor and all entities in the network firm/ a part thereof for all the services provided by them is 12 crore. Unit: Larsen & Toubro Limited Selenium Tower B, 2020-2021 Meeting was held Voting Pattern Votes in Votes favour against Appointment of 97.76% 2.24% Mr. Jyoti Sagar (DIN:00060455) as an Independent Director of the Company w.e.f. COP No. 8430), was appointed as Scrutinizer for conducting the Postal Ballots in a fair and transparent manner. There were no invalid votes cast in any of the Postal Ballots conducted during FY 2023-24. h) Disclosures: 1. May 10, 2023 2. Appointment of 97.06% 2.94% Mr. Rajnish Kumar May 10, (DIN:05328267) 2023 June 22, 2023 as an Independent Director of the Company w.e.f. May 10, 2023 Approval of Related Party Date of publication of voting results August 5, 2021 Postal Ballot Notice date were passed with requisite majority of votes. Details of the Resolutions passed through postal ballot during FY 2023-24 are given below. 3:30 p.m. through Video Conferencing/Other Audio-Visual Means The following Special Resolutions were passed by the members during the past 3 Annual General Meetings: Annual General Meeting held on August 9, 2023: None. Annual General Meeting held on August 4, 2022: . To approve raising of capital through QIP's by issue of shares / convertible debentures/ securities upto an amount of USD 600 million or 4,500 crore. Annual General Meeting held on August 5, 2021: To re-appoint Mr. Sanjeev Aga as an Independent Director of the Company for a five-year term upto May 24, 2026. To re-appoint Mr. Narayanan Kumar as an Independent Director of the Company for a five-year term upto May 26, 2026. To approve raising of capital through QIP's by issue of shares / convertible debentures / securities upto an amount of USD 600 million or 4,500 crore. Note: There were no invalid votes cast in any of the previous 3 Annual General Meetings. g) Resolution(s) passed through Postal Ballot: There were 3 Postal Ballots conducted by the Company during FY 2023-24. All the resolutions Integrated Annual Report 2023-24 Corporate Overview Management Integrated Statutory Discussion and Analysis Report Reports Financial Statements Description of the resolution Management 1. KFin Technologies Limited Fax No. (022) 6752 5858 The Company's corporate website www.larsentoubro.com provides comprehensive information about its portfolio of businesses. Section on "Investors" serves to inform and service the Shareholders allowing them to access information at their convenience. The quarterly shareholding pattern of the Company is available on the website of the Company as well as the stock exchanges. The entire Annual Report including Accounts of the Company and subsidiaries are available in downloadable formats. Information to Stock Exchanges is now being also filed online on NEAPS for NSE, BSE Online for BSE and RNS for London Stock Exchange. Annual Report is circulated to all the members and all others like auditors, equity analysts, etc. To enable a larger participation of shareholders for the Annual General Meeting, the Company has provided Webcast facility at its last three Annual General Meetings in co-ordination with NSDL. This year, the Company will be conducting the Annual General Meeting through Audio Visual Means, as permitted by Ministry of Corporate Affairs. The Annual Report is e-mailed to all members who have registered their email IDs with the Company and to those shareholders who request for the same. The Annual Report would also be made available on the website of the Company. The Chairman suitably responds to the queries raised by the shareholders during the AGM. Investor complaints are processed at SEBI in a centralized web-based complaints redress system. The salient features of this system are centralised database of all complaints, online upload of Action Taken Reports (ATRS) by concerned companies and online viewing by investors of actions taken on the complaints and their current status. The Company submits ATR on timely basis with respect to the complaints received from SCORES. In case any investor is still not satisfied with the outcome of the resolution, they can initiate dispute resolution through the ODR Portal. The ODR Portal has the necessary features and facilities to, inter alia, enrol the investor to file the complaint/ dispute. Your Company has done necessary enrolment on the ODR Portal. Integrated Annual Report 2023-24 Corporate Overview Management Integrated SEBI Complaints Redress System (SCORES)/Online Dispute Resolution (ODR) Portal: Statutory Report Reports Financial Statements J. Management Discussion & Analysis Presentations made to Institutional Investors and Analysts Investor FAQs This forms a part of the Annual Report which is mailed to the shareholders of the Company. The schedule of analyst / institutional investor meets and presentations made to them on a quarterly basis are informed to the Stock Exchanges and also displayed on the Company's website. The audio recordings and transcripts of these meetings are also uploaded on the Company's website and weblink for the same is intimated to the Exchanges. FAQS regarding rights and benefits entitled to Shareholders are available on the Company's website at https://investors.larsentoubro.com/ Investor-FAQ.aspx Discussion and Analysis Annual Report and Annual General Meeting Filing with Stock Exchanges Website 2,11,63,905 1.54 3,789 0.24 1,31,21,326 2,391 0.15 1,07,74,130 0.79 4,069 0.26 2,81,05,651 2.04 3,529 0.23 1,14,26,12,956 83.12 0.95 above TOTAL Month LARSEN & TOUBRO 352 i) Annexure to the Board Report 8. 9. Management Discussion & Analysis. Please refer to pages 18 to 127 of this integrated Annual Report. As required under the provisions of SEBI LODR Regulations, a certificate confirming that none of the Directors on the Board have been debarred or disqualified by the Securities and Exchange Board of India or Ministry of Corporate Affairs or any such statutory authority, obtained from M/s S. N. Ananthasubramanian & Co., Company Secretaries, is a part of the Corporate Governance report. Details in relation to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 form a part of the Board Report. Please refer to pages 324 to 325 of this integrated Annual Report. 10. The Company has not provided any loans or advances in the nature of loans to firms/ companies in which directors are interested. 11. The are no agreements which impact the management or control of the Company or impose any restriction or create any liability upon the Company as specified under Regulation 30A read with clause 5A to para A of part A of schedule III of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Means of communication: Financial Results and other Communications News Releases Quarterly & Annual Results are published in prominent daily newspapers viz. The Financial Express, Hindu Business Line & Loksatta. The results are also posted on the Company's website: www.larsentoubro.com. Advertisements relating to IEPF, E-Voting, AGM related compliances, etc. are published in The Financial Express & Loksatta. Official news releases that carry material information as per the Company's policy for determination of materiality of events or information, are sent to stock exchanges as well as displayed on the Company's website: www.larsentoubro.com. H. Unclaimed Shares The Company does not have any unclaimed shares lying with it from any public issue. However certain shares resulting out of the bonus shares issued by the Company are unclaimed by the shareholders. As required under Regulation 39(4) of the SEBI LODR Regulations, the Company has already sent reminders to the shareholders to claim these shares. These shares are regularly released on requests received from the eligible shareholders after due verification. In accordance with the provisions of the section 124(6) of the Companies Act, 2013 and Rule 6(3)(a) of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ('IEPF Rules'), the Company has transferred to IEPF equity shares on which dividend has remained unclaimed for a period of seven consecutive years upto the FY 2015-16. The details are given in the Board Report. Please refer to page 324 of this integrated Annual Report. All corporate benefits on such shares viz. dividends, bonus shares, etc. shall be transferred in accordance with the provisions of IEPF Rules read with Section 124(6) of the Companies Act, 2013. The eligible shareholders are requested to note the same and make an application to IEPF Authority in accordance with the procedure available on www.iepf.gov.in and submit such documents as prescribed under the IEPF Rules to claim these shares. Mr. Sivaram Nair A Company Secretary has been appointed as the Nodal officer of the Company. I. 353 354 LARSEN & TOUBRO Annexure to the Board Report g) Stock Code / Symbol: The Company's equity shares / GDRs are listed on the following Stock Exchanges and admitted for trading in London Stock Exchange: BSE Limited (BSE) India Limited (NSE) i) Registrar and Share Transfer Agents (RTA): Scrip Code - 500510 National Stock Exchange of Scrip Code - LT j) 2023 April May June L&T NSE Price (*) Month Month High Low Close Close 2,369.00 2,155.00 2,364.40 18,089.15 17,312.75 18,065.00 2,416.35 2,168.50 2,205.65 18,662.45 18,042.40 18,534.40 2,483.50 2,202.15 2,475.55 19,201.70 18,464.55 19,189.05 July 2,690.00 2,420.00 2,681.35 19,991.85 19,234.40 19,753.80 August 2,766.80 2,586.30 2,702.70 19,795.60 19,223.65 19,253.80 September 3,058.35 2,688.30 3,023.55 20,222.45 19,255.70 19,638.30 October 3,114.95 2,856.15 2,929.05 19,849.75 18,837.85 19,079.60 November 3,124.55 2,871.05 3,109.20 20,158.70 18,973.70 20,133.15 December 3,559.95 3,121.05 3,526.00 21,801.45 20,183.70 21,731.40 2024 3,737.90 3,387.05 3,479.75 22,124.15 21,137.20 21,725.70 January February 3,513.00 3,263.05 3,477.55 22,297.50 21,530.20 21,982.80 March 3,813.35 3481.00 3763.90 22,526.60 21,710.20 22,326.90 NIFTY I) 15,64,085 100.00 1,37,46,68,619 100.00 Categories of Shareholders is as under: High Low Category Financial Institutions The Company has paid the custodial fees to National Securities Depository Limited. The fees to Central Depository Services (India) Limited (CDSL) shall be paid on the receipt of their invoice. 0.56 f) Custodial Fees to Depositories: e) Listing Fees to Stock Exchanges: GENERAL SHAREHOLDERS' INFORMATION a) Annual General Meeting: The Annual General Meeting of the Company has been convened on Thursday, July 4, 2024 at 3:00 p.m. through Video Conferencing ("VC")/ Other Audio-Visual Means ("OAVM") pursuant to the MCA Circular dated September 25, 2023. Members can attend the AGM virtually at www.evoting.nsdl.com. b) Financial calendar: 1. Annual Results of FY 2023-24 2. Mailing of Annual Reports 3. First Quarter Results 4. Annual General Meeting 5. Payment of Dividend 6. Second Quarter results 7. Third Quarter results * Tentative c) Record Date: May 8, 2024 Second week of June 2024 During the last week of July 2024* July 4, 2024 July 9, 2024* During last week of October 2024* During last week of January 2025* The Record date to determine the members entitled to the final dividend for FY 2023-24 is Thursday, June 20, 2024. d) Listing of equity shares / shares underlying GDRs on Stock Exchanges: The shares of the Company are listed on BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE). GDRs are listed on Luxembourg Stock Exchange and admitted for trading on London Stock Exchange. The Company has paid the Listing Fees for FY 2024-25 to BSE and NSE in April 2024. The fees to London Stock Exchange has been paid in March 2024 and to Luxembourg Stock Exchange has been paid in May 2024. 8,662 2001-3000 3001 - 4000 4001 - 5000 5001 - 10000 10001 and 2.62 100.00 137,46,68,619 5.75 93.39 128,37,72,465 7,90,73,962 1,18,22,192 0.86 Physical Total Held in dematerialized form in CDSL Held in dematerialized form in NSDL Limited issued capital Private No. of shares 'IND A1+' Commercial Paper Research % of total Debentures 'IND AAA/ Stable' Non-Convertible India Ratings and '[ICRA] A1+' Commercial Paper Debentures Programme '[ICRA] AAA (stable)' n) Outstanding GDRs/ ADRs/ Warrants or any Convertible Instruments, conversion date and likely impact on equity: Non-Convertible The outstanding GDRs are backed up by underlying equity shares which are part of the existing paid-up capital. The redeemable Non-Convertible Debentures issued by the Company are listed on the Wholesale Debt Market (WDM) of National Stock Exchange of India Limited and/or BSE Limited. Tel. No. (022) 6752 5656, t) Address for correspondence: Larsen & Toubro Limited, L&T House, Ballard Estate, Mumbai 400 001. The L&T Group's facilities for design, engineering, manufacture, modular fabrication and production are based at multiple locations within India including, Bengaluru, Chennai, Coimbatore, Faridabad, Hazira (Surat), Kattupalli (near Chennai), Kancheepuram, Mumbai, Pithampur, Puducherry, Rajpura, Kansbahal (Rourkela), Talegaon, Vadodara and Visakhapatnam. L&T's international manufacturing footprint covers Oman, Saudi Arabia and USA. The L&T Group also has an extensive network of offices in India and around the globe. See page 14 of this integrated Annual Report. s) Plant Locations: Further, S&P Global Ratings vide its letter dated May 8, 2024 has assigned 'BBB+ with Stable Outlook' long term issuer credit rating to the Company 'CRISIL A1+' Commercial Paper 'CRISIL AAA/Stable' Bank Loan Facilities 'CRISIL AAA/Stable' Non-Convertible Debentures Limited CRISIL Rating Type of Instrument Rating Agency The Company has obtained rating from CRISIL Ratings Limited, ICRA Limited and India Ratings and Research Private Limited during FY 2023-24. There has been no revision in credit ratings during FY 2023-24. The ratings given by these agencies are as follows: Credit Rating: r) Fort, Mumbai - 400001 Ground Floor, Sir P. M. Road, IDBI Trusteeship Services Limited Universal Insurance Building, q) Debenture Trustees (for privately placed debentures): The Commercial Papers issued by the Company are listed on BSE Limited. p) Listing of Commercial Paper: o) Listing of Debt Securities: Shareholder correspondence may be directed to the Company's Registrar and Share Transfer Agent, whose address is given below: ICRA Limited Rating June July August 2,767.00 2,586.75 2,706.00 66,658.12 64,723.63 64,831.41 September 3,057.00 2,688.55 3,021.95 67,927.23 64,818.37 65,828.41 October 3,114.00 2,856.85 2,928.80 66,592.16 63,092.98 63,874.93 November 3,122.00 2,872.00 3,111.65 67,069.89 63,550.46 66,988.44 December 3,559.75 3,125.05 3,527.05 72,484.34 67,149.07 72,240.26 2024 January 3,738.90 3,387.40 3,480.15 73,427.59 70,001.60 71,752.11 February 3,511.95 3,264.00 3,481.60 73,413.93 70,809.84 72,500.30 March 3,812.00 3,481.00 3,774.10 74,245.17 71,674.42 73,651.35 KFin Technologies Limited Unit: Larsen & Toubro Limited Selenium Tower B, Plot number 31 & 32 Financial District Gachibowli, Nanakramguda, Hyderabad, Telangana - 500 032. Share Transfer System: Pursuant to SEBI notification dated January 24, 2022, requests for effecting transfer of securities in physical form, shall not be processed by the Company. Physical shares received for dematerialization are processed and dematerialization is completed within a period of 21 days from the date of receipt. As required under Regulation 40 of the SEBI LODR Regulations, a certificate on yearly basis confirming due compliance from Practicing Company Secretary has been submitted to Stock Exchanges within stipulated time. k) Distribution of Shareholding as on March 31, 2024: Shareholders Shareholding No. of Shares upto 500 501-1000 1001-2000 Number % 14,69,775 93.97 46,153 2.95 Number % 8,92,29,541 6.49 3,37,01,309 2.45 25,717 1.64 3,59,59,801 May Agency 31.03.2023 No. of Shares 19,71,96,424 14.03 33,97,97,270 24.18 Type of Instrument Rating The number of shares held in dematerialized and physical mode as on March 31, 2024 is as under: The Company's Shares are required to be compulsorily traded in the Stock Exchanges in dematerialized form. m) Dematerialization of shares & Liquidity: Statements Reports Report Financial Integrated Statutory Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 30,84,98,566 22.44 30,80,98,457 21.92 1,37,46,68,619 100.00 140,54,82,190 100.00 TOTAL 19,48,87,516 14.18 19,25,58,158 13.70 L&T Employees Trust Others 17,84,805 0.13 10,80,537 0.08 Directors & Relatives Buyers 176,47,986 1.26 24,42,12,576 17.37 10,41,86,514 7.41 1,88,37,260 1.37 24,20,78,635 17.61 9,48,47,826 6.90 Investors Shares underlying GDRs Mutual Funds Bodies Corporate & Qualified Institutional % % Corporate Overview 31.03.2024 No. of Shares 18,41,59,970 13.40 33,02,78,309 24.02 (DIN:00187429) December January 18, 14, 2023 2024 97.42% 2.58% 96.29% 3.71% 96.63% 3.37% During the year, there were no transactions of material nature with the Directors or the Management or relatives or the subsidiaries that had potential conflict with the interests of the Company. Limited Details of all related party transactions form a part of the accounts as required under IND AS 24 and the same are given in Note No. 47 forming part of the financial The Company makes presentations to Institutional Investors and Equity Analysts on the Company's performance on a quarterly basis. These presentations are provided to the Stock Exchanges and also available on our website https://investors.larsentoubro.com/ Analyst-Presentation-Archives.aspx. 5. There were no instances of non-compliance, penalties, strictures imposed on the Company by the Stock Exchanges on any matter related to the capital markets, during the last three years except as mentioned below: 96.64% 3.36% 6. Mr. S. N. Ananthasubramanian, Practising Company Secretary, (M. No: FCS 4206, COP No. 1774) and failing him, Ms. Aparna Gadgil, Practising Company Secretary (M. No: ACS 14713, statements. Rail (Hyderabad) with L&T Metro Party Transaction(s) Appointment of Mr. Ajay Tyagi as an Independent Director of the Company w.e.f. October 31, 2023 Appointment of Mr. P. R. Ramesh (DIN:01915274) as an Independent Director of the Company w.e.f. October 31, 2023 Approval of material Related Party Transaction(s) with Larsen Toubro Arabia LLC Approval of material Related 7. National Stock Exchange of India Limited and BSE Limited vide their notices dated April 15, 2024, levied a fine of 10,000 each for delayed submission of intimation of Board meeting held on March 26, 2024 where the proposal of fund raising was approved. The Company has paid the said fine. The Company has also made waiver application to the Stock Exchanges towards the same. The Company has followed all relevant Accounting Standards notified by the Companies (Indian Accounting Standards) Rules, 2015 while preparing the Financial Statements. corporate/about-lt-group/corporate-policies/. Details of risk management including foreign exchange risk, commodity price risk and hedging activities form a part of the 351 The policies for determining material subsidiaries and related party transactions are available on the Company's website https://www.larsentoubro.com/ 11-07-2020 07648203 Mr. Sudhindra Vasantrao Desai 06 19-08-2015 06646490 00554221 Mr. Subramanian Sarma 30-05-2014 13 Mr. Sanjeev Aga 25-05-2016 14 Mr. Narayanan Kumar 00007848 27-05-2016 362 Integrated Annual Report 2023-24 Sr. Name of Director No. 15 00022065 07 08586766 11-07-2020 Mr. Adil Siraj Zainulbhai 12 31-03-2024 22-10-2012 00041197 Mr. Hemant Bhargava Mr. Vikram Singh Mehta 11 31-03-2024 22-10-2012 Mr. Tharayil Madhava Das 02106990 10 31-03-2024 06-07-2004 00101004 Mr. Mukund Manohar Chitale 09 05-08-2022 06913351 Mr. Anil Vithal Parab 08 Mr. Meleveetil Damodaran Corporate Overview crore) Mrs. Preetha Reddy 00186137 01-04-2022 05328267 10-05-2023 00060455 10-05-2023 00187429 31-10-2023 01915274 31-10-2023 01-03-2021 This Certificate is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the Company. Date: April 29, 2024 Place: Thane For S. N. ANANTHASUBRAMANIAN & Co. Company Secretaries ICSI Unique Code P1991MH040400 Peer Review Cert. No. 5218/2023 S. N. Ananthasubramanian Founding Partner FCS: 4206 | COP No. : 1774 ICSI UDIN: FO04206F000270450 363 LARSEN & TOUBRO To the Board of Directors of Larsen & Toubro Limited This Certificate has been issued at the request of the Company to make disclosure in its Corporate Governance Report for the Financial Year ended March 31, 2024. 16 00001871 01922717 17 Mr. Pramit Jhaveri 18 Mr Rajnish Kumar 19 Mr. Jyoti Sagar 20 Mr Ajay Tyagi 21 Mr. P.R. Ramesh 28-05-2018 Corporate Overview Integrated Statutory Discussion and Analysis 05 Report Reports Financial Statements Director Identification Number (DIN) Date of Appointment Date of Cessation Management Dear Sirs, 07-04-2024 06393156 UDIN: 24066926BKBMZV8178 (Membership No. 066926) Rishabh Sanghvi (Partner) Place: Mumbai Date: May 8, 2024 (Firm's Registration No. 117366W/W100018) For DELOITTE HASKINS & SELLS LLP Chartered Accountants 360 We state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the Management has conducted the affairs of the Company. 8. Based on our examination of the relevant records and according to the information and explanations provided to us and the representations provided by the Management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in regulations 17 to 27 and clauses (b) to (i) of regulation 46(2) and Para C and D of Schedule V of the Listing Regulations during the year ended March 31, 2024. OPINION We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related Services Engagements. Guidance Note on Certification of Corporate Governance issued by the Institute of the Chartered Accountants of India (the "ICAI"), the Standards on Auditing specified under Section 143(10) of the Companies Act 2013, in so far as applicable for the purpose of this certificate and as per the Guidance Note on Reports or Certificates for Special Purposes issued by the ICAI which requires that we comply with the ethical requirements of the Code of Ethics issued by the ICAI. 7. We have carried out an examination of the relevant records of the Company in accordance with the 9. We have examined the books of account and other relevant records and documents maintained by the Company for the purposes of providing reasonable assurance on the compliance with Corporate Governance requirements by the Company. Integrated Annual Report 2023-24 Management Discussion and Analysis Mumbai - 400001 L&T House, Ballard Estate, CIN: L99999MH1946PLC004768 Larsen & Toubro Limited The Members, To, Corporate Overview [Pursuant to Regulation 13 of the Securities Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021] Statements Reports Report Financial Statutory Integrated Secretarial Auditor's Certificate in respect of the Implementation of Employee Stock Option Schemes of the Company BACKGROUND Our responsibility is limited to examining the procedures and implementation thereof, adopted by the Company for ensuring compliance with the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. 5. The Company's Secretarial Department is involved in all major corporate actions of subsidiaries like IPO's, raising of capital, restructuring, major financial assistance to subsidiaries etc. The Secretarial Department of the Company has qualified Company Secretaries (CS) with vast experience in the field of compliance and law. It consists of fulltime professionals dedicated to performing corporate secretarial and subsidiary governance duties. Qualified CS in secretarial department monitor the compliance related to subsidiaries under Companies Act / Rules. The Company's Secretarial Department develops a broad Governance policy for the Company and its group of subsidiaries. financials of the Company, through an appropriate forum. The Company's Code of Conduct (Code) is required to be adhered by all unlisted group companies covering employees, directors, suppliers, contractors, etc. In addition to this, the subsidiaries also have their own vigil mechanism, if they meet the thresholds given in the Companies Act, 2013. The Audit Committee/Board of these companies monitor this mechanism. The Vigil Mechanism Framework to report breach of code is a structured process, which encourages and facilitates all covered, to report without fear, wrongdoings or any unethical or improper practice which may adversely impact the image, credibility and/or the A voluntary Secretarial Audit is conducted for all subsidiary companies, including foreign companies and companies which are not covered under the purview of Companies Act, 2013. Thus, there is a complete audit of the compliance of applicable statutory provisions and adherence to good corporate practices. Thus, the overall functioning of these Subsidiary companies is monitored by the Group directly or through their respective IC's. Appropriate disclosures related to subsidiaries are made in Financial Statements / Directors' Report of the Company as well as its subsidiaries as per Companies Act, 2013 / applicable SEBI Regulations and applicable Accounting Standards. All companies are subject to Statutory Audit and applicable Secretarial Audit. companies functionally report to select senior finance officers of the Company. Reports Report Discussion and Analysis Financial Statutory Integrated Statements 6. 359 Annexure to the Board Report 4. AUDITOR'S RESPONSIBILITY Governance is the responsibility of the Management. This responsibility includes the design, implementation and maintenance of internal control and procedures to ensure the compliance with the conditions of the Corporate Governance stipulated in Listing Regulations. 3. The compliance of conditions of Corporate MANAGEMENT'S RESPONSIBILITY We, Deloitte Haskins & Sells LLP, Chartered Accountants, the Statutory Auditors of Larsen & Toubro Limited (the "Company"), have examined the compliance of conditions of Corporate Governance by the Company, for the year ended on March 31, 2024, as stipulated in regulations 17 to 27 and clauses (b) to (i) of regulation 46(2) and Para C and D of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time (the "Listing Regulations"). LARSEN & TOUBRO This certificate is issued in accordance with the terms of our engagement letter dated September 12, 2023. 1. CORPORATE GOVERNANCE INDEPENDENT AUDITOR'S CERTIFICATE ON LARSEN & TOUBRO LIMITED TO THE MEMBERS OF Independent Auditor's Certificate on Corporate Governance 2. 29-01-2016 1. This Certificate is issued in accordance with the terms of our engagement dated May 16, 2023. No. Name of Director Sr. Based on our examination as aforesaid and such other verifications carried out by us as deemed necessary and adequate (including Directors Identification Number (DIN) status at the portal www.mca.gov.in), in our opinion and to the best of our information and knowledge and according to the explanations provided by the Company, its officers and authorized representatives, we hereby certify that during the Financial Year ended March 31, 2024, none of the Directors on the Board of the Company, as listed hereunder, have been debarred or disqualified from being appointed or continuing as Directors of Companies by Securities and Exchange Board of India/ Ministry of Corporate Affairs or any such statutory authority. Ensuring the eligibility for the appointment / continuity of every Director on the Board is the responsibility of the management of the Company. Our responsibility is to express an opinion based on our verification. as submitted by the Directors of Larsen & Toubro Limited ('the Company') bearing CIN: L99999MH1946PLC004768 and having its registered office at L&T House, Ballard Estate, Mumbai 400001, to the Board of Directors of the Company ('the Board') for the Financial Year 2023-24 and Financial Year 2024-25 and relevant registers, records, forms and returns maintained by the Company and as made available to us for the purpose of issuing this Certificate in accordance with Regulation 34(3) read with Schedule V Para C Clause 10(i) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. We have considered non-disqualification to include non-debarment by Regulatory / Statutory Authorities. It is the responsibility of Directors to submit relevant documents with complete and accurate information in accordance with the provisions of the Act. Director Identification Number (DIN) ii) Disclosure of concern or interest as required under Section 184 of the Act; (hereinafter referred to as 'relevant documents') i) We have examined the following documents: Mumbai 400001 L&T House, Ballard Estate, Larsen & Toubro Limited The Members of Declaration of non-disqualification as required under Section 164 of the Companies Act, 2013 ('the Act'); [Pursuant to Regulation 34(3) and Schedule V Para C Clause (10) (i) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015] Date of Appointment Date of Cessation 01 Mr. Maddur Venkata Rao Satish 04 01-10-2011 00019798 Mr. Ramamurthi Shankar Raman 03 58ཀྱ 8 ཤྩ 01-07-2011 Mr. Sekharipuram Narayanan Subrahmanyan 02 30-09-2023 23-11-1989 00001514 Mr. Anilkumar Manibhai Naik 02255382 2. Certificate of Non-Disqualification of Directors LARSEN & TOUBRO (a) the Schemes; 6. We have verified the following: VERIFICATION (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and the ICSI Auditing Standards, issued by the Institute of Companies Secretaries of India. We have conducted our examination and obtained the explanations in accordance with Referencer on SEBI It is our responsibility to certify whether the Company has complied with the applicable provisions of the Regulations and the Resolutions, during the year ended March 31, 2024, in implementing the Schemes on the basis of information compiled or collated by the Management and the accounting and other relevant supporting records and documents provided to us for our examination. (b) the Resolutions; 5. AUDITOR'S RESPONSIBILITY It is the responsibility of the Management of the Company to implement the Schemes including designing, maintaining records and devising proper systems to ensure compliance with the provisions of all applicable laws and regulations and to ensure that the systems are adequate and operate effectively. 3. MANAGEMENT RESPONSIBILITY - We, Secretarial Auditor of Larsen & Toubro Limited ("the Company"), pursuant to Regulation 13 of the Securities Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("the Regulations") are required to certify that, for the Financial Year ended March 31, 2024, the Employees Stock Option Schemes, Larsen & Toubro Limited Employee Stock Ownership Scheme - 2003 and Larsen & Toubro Limited Employee Stock Option Scheme 2006 (collectively referred to as "the Schemes") have been implemented in accordance with the Regulations and in accordance with the Special Resolutions passed at the General Meetings held on August 26, 1999 & August 22, 2003 and August 25, 2006, respectively (the "Resolutions") 4. Annexure to the Board Report (c) Note on Accounting Treatment followed by the Company. 7. To, 361 FCS: 4206 | COP No.: 1774 ICSI UDIN: F004206F000322381 Founding Partner S. N. Ananthasubramanian ICSI Unique Code: P1991MH040400 Peer Review Cert. No.: 5218/2023 CERTIFICATION Company Secretaries For S. N. ANANTHASUBRAMANIAN & Co. Place: Thane This Certificate is addressed to and provided to the Members of the Company solely for the purpose of compliances with Regulation 13 of the Regulations. This Certificate should not be circulated, copied, used / referred to for any other purpose, without our prior written consent. Accordingly, we do not accept or assume any liability or any duty of care of for any other purpose or to any other party to whom it is shown or into whose hands it may come without our prior consent in writing. 8. RESTRICTION ON USE Based on our verification of the records and documents maintained by the Company as aforesaid and according to the information, explanations and written representations provided to us, we certify that the Company has complied with the applicable provisions of the Regulations and the Resolutions in implementing the Schemes during the year ended March 31, 2024. Date: May 8, 2024 Sub: CEO / CFO Certificate Annexure to the Board Report [Issued in accordance with provisions of Regulation 17(8) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015] Construction Skills Training Institute (CSTI) achieved a 71% placement rate for 6,400 participants. Skill Training Academy (STA) benefited 436 trainers with an NPS (Net Promoter Score - which Indicates the likelihood of stakeholders recommending the programme to others) of 87, indicating high satisfaction. Construction of Residential School and Skill Institute project provided well-equipped facilities and focused skill training for school dropout tribal children. E-content Development project ensured standardized, reliable, and consistent delivery of technical information to bridge the gap between conventional training methods and technical learning. Effectiveness and Efficiency Relevance and coherence were evident in all CSR projects, which effectively addressed the needs of marginalized communities such as rural youth, tribal groups, and disadvantaged women. These initiatives are aligned with Schedule VII of the Companies Act 2013, particularly Sections 1 and 2, and contributed to Sustainable Development Goals 1 (No Poverty), 4 (Quality Education), 5 (Gender Equality), 9 (Industry, Innovation, and Infrastructure) and 10 (Reduced Inequalities), highlighting their alignment with broader societal objectives. Relevance and Coherence 4th Wheel Social Impact assessed the impact and sustainability of the projects implemented in the FY 2021-22, using the criteria outlined by OECD/DAC (Relevance, Coherence, Efficiency, Effectiveness, Impact and Sustainability) to delve into the measurable, concrete outcomes and the less tangible, qualitative effects on the beneficiaries and the broader community. A mixed-methods approach was employed to ensure a holistic understanding of the projects. Key findings from 4th Wheel Social Impact Under the STEM Education project, all schools received smart class tools, with 88% of teachers trained in science, math, and STEM model-making displaying a high acceptance and inclination towards utilizing digital tools in classrooms. L&T's School Support Program improved the school infrastructure, facilitated digital learning access, and ensured teacher salaries, reflecting efficient resource allocation. Equipped with computer labs and digital tools, teachers underwent comprehensive training, and digital classes were integrated into the curriculum for all subjects, indicating effective use of technology in education. Education initiatives in Mumbai and Chennai improved health and hygiene by constructing toilets and enhanced student proficiency through remedial classes. Statements Report Financial Statutory Integrated Management Discussion and Analysis Corporate Overview Reports Integrated Annual Report 2023-24 Health projects in Mumbai provided comprehensive support to mentally challenged women and children with cancer, including medical, psychological, educational and vocational assistance. For vocational skill centers, 271 women candidates were trained in West Bengal, Gujarat, Odisha, Karnataka, and Tamil Nadu. Skill Development initiatives like CSTIs and STA significantly enhanced technical skills and soft skills among trainees, ensuring their readiness for the workforce. E-content provision across CSTIs effectively addressed language barriers, leading to improved learning outcomes for trainees. 74% of alumni acknowledged its benefits. Infrastructure support in tribal communities such as Bodeli and Kansbahal boosted school attendance and laid a robust foundation for providing enhanced learning opportunities. Total Amount transferred to Unspent CSR Account as per sub-section (6) of section 135 Annexure to the Board Report LARSEN & TOUBRO 367 142.17 8.81 Impact and Sustainability if any. 150.98 (b) Two percent of average net profit of the company as per sub-section (5) of section 135. (c) Surplus arising out of the CSR Projects or programmes or activities of the previous financial years. Crore 7,548.78 (a) Average net profit of the company as per sub-section (5) of section 135. 5. Digital and STEM support to schools bolstered student proficiency in mathematics and science while nurturing 21st-century skills and STEM aspirations. Prayas Trust's Community Development Activities resulted in establishing solid educational foundations in low-resourced government schools, enhanced health and well-being among disadvantaged communities, and self-employment among women through vocational training. (d) Amount required to be set-off for the financial year, (e) Total CSR obligation for the financial year [(b)+(c)-(d)]. 6. a) Amount spent on CSR Projects (both Ongoing Project and other than Ongoing Project). b) Amount spent in Administrative Overheads 366 Regarding sustainability, the programs have been structured to actively involve local communities, empowering them to champion positive practices for the future. 3 3 3 3 3 3 3. Number of meetings of CSR Committee attended during the year Annexure to the Board Report Member (Whole-time Director) Mr. S. V. Desai$ 3 Member (Whole-time Director) Mr. R. Shankar Raman Number of meetings of CSR Committee held during the year Overall, it can be concluded that together all these elements formed the backbone of successful programs, driving positive change and societal development. 4. $ Appointed as a member of the committee with effect from 8th April, 2023. The projects have created impact on the lives of the project participants/beneficiaries. The projects have led to an enhanced quality of life by fostering improved livelihood opportunities, increased income and savings, and better access to essential services such as healthcare, education, and knowledge for sustainable living. The projects have been found to be effective. Findings from the report reveal the meticulous planning, overall target achievement within the planned timeline and capacity building of relevant stakeholders ensuring efficiency of the programs and its implementation. In terms of relevance, the analysis of both qualitative and quantitative data indicates that health programs and integrated community development initiatives are in alignment with Section 135 and Schedule VII of Companies Act 2013 and several Sustainable Development Goals (SDGs) namely SDG 1: No poverty, SDG 3: Ensure healthy lives and promote well-being for all at all ages, SDG 4: Quality education, SDG 6: Clean water and sanitation, and SDG 10: Reduced inequalities. Furthermore, these programs resonate with state and national priorities and schemes, while also addressing the specific needs of the communities where they have been implemented. Thinkthrough Consulting utilized the Organization for Economic Co-operation and Development (OECD) Development Assistance Committee's (DAC) framework to evaluate the relevance, effectiveness, impact, and sustainability of the CSR programs. The study was done by using mixed methodology wherein both quantitative and qualitative data was collected. Key findings from Thinkthrough Consulting: The Impact Assessment reports are made available on the website of the Company at https://investors.larsentoubro.com/ listing-compliance-agm.aspx. An executive summary of the same is provided below: * Ceased to be a member of the committee effective closure of March 31, 2024. 25 CSR projects which were implemented in FY 2021-22, qualified for the 3rd party social impact assessment. Out of these, 15 projects were assessed by 4th Wheel Social Impact and 10 projects were assessed by Thinkthrough Consulting during FY 2023-24. CSR Policy - https://www.larsentoubro.com/corporate/about-It-group/corporate-policies/ . • The Composition of CSR Committee, CSR Policy Framework and CSR Annual Action Plan for FY 2023-24 approved by the Board are available in the Corporate Governance section on the website of the Company. Please see the following links: Composition of CSR Committee - https://investors.larsentoubro.com/governance-architecture.aspx Mr. Sivaram Nair A., Company Secretary & Compliance Officer of the Company, acts as the Secretary of the Committee. Provide the web-link where Composition of CSR committee, CSR Policy and CSR Annual Action Plan for FY 2023-24 approved by the Board are disclosed on the website of the Company. Mr. Ajay Tyagi (Independent Director) has been appointed as the Chairman of the Committee and Mr. Jyoti Sagar (Independent Director) has been appointed as member of the Committee with effect from April 1, 2024. CSR Annual Action Plan for FY 2023-24 - https://investors.larsentoubro.com/listing-compliance-disclosuresunderstatutes.aspx Provide the executive summary along with web-link(s) of Impact Assessment of CSR Projects carried out in pursuance of sub-rule (3) of rule 8, if applicable. 2 c) Amount spent on Impact Assessment, if applicable d) Total amount spent for the Financial Year [(a)+(b)+(c)]. Total Amount Spent for the Financial Year (in crore) Amt. Spent Schedule VII as per second proviso to Sub-section (5) of Section 135, if any Amount Sub-section (6) Sub-section (6) Year (in) in the Financial of Section 135 of Section 135 (in crore) Amount remaining to be spent in succeeding Financial Years Amount transferred to a Fund as specified under Account under Amount transferred to Unspent CSR Preceding Financial Year(s) SI. No. @ this includes 8.81 crore excess CSR amount spent during FY 2022-23 and adjusted against the required CSR spend for FY 2023-24. Details of Unspent Corporate Social Responsibility amount for the preceding three Financial Years: 7. Balance Amount in Unspent CSR Account under 12.66 Deficiency, if any If Yes, enter the number of capital assets created/ acquired: 1387 (in crore) Date of Transfer (in crore) 1 2 FY-1 FY-2 Integrated Annual Report 2023-24 3 8. 368 NOT APPLICABLE Whether any capital assets have been created or acquired through Corporate Social Responsibility amount spent in the Financial Year: ✓ YES NO FY-3 e) CSR amount spent or unspent for the Financial Year: Amount available for set off in succeeding Financial Years [(iii)-(iv)] NIL NIL NIL 154.83 Date of transfer Amount Amount transferred to any fund specified under Schedule VII as per second proviso to sub-section (5) of section 135 Name of the Fund f) Date of transfer Amount Unspent (in crore) 154.83 0.49 7.37 146.97 Crore Amount (v) Excess amount for set-off, if any: (1) 12.66 163.64 150.98 (3) Amount (in crore) Surplus arising out of the CSR projects or programmes or activities of the previous Financial Years, if any Sl. No (iv) (iii) Total amount spent for the Financial Year @ (ii) Two percent of average net profit of the Company as per sub-section (5) of section 135 (i) Particulars (2) Excess amount spent for the Financial Year [(ii)-(i)] (in Mr. M. M. Chitale* No. The Company's CSR Policy framework details the mechanisms for undertaking various programmes in accordance with Section 135 of the Companies Act, 2013 (the Act) for the benefit of the community. L&T strives to promote initiatives that enhance the quality of life for communities to achieve inclusive growth through empowerment and work towards social equity. L&T CSR has been working towards the social and economic development of communities at various locations across the country. The Company has a well-entrenched CSR program that contributes to inclusive growth and accelerating development through interventions in Water and Sanitation, Health, Education and Skill Development. 1. Brief outline on CSR Policy of the Company ANNUAL REPORT ON CSR ACTIVITIES FOR FINANCIAL YEAR ENDED MARCH 31, 2024 Annexure 'C' to the Board Report Statements Reports Financial Statutory Integrated Report Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 The Company's primary focus is on 'Building India's Social Infrastructure' as part of its CSR programme which will include, amongst others, the following areas, viz. 364 S. N. Subrahmanyan Chairman & R. Shankar Raman Whole-time Director & Chief Financial Officer DIN: 00019798 Date: May 8, 2024 Yours sincerely, (iii) that there were no instances of significant fraud of which we have become aware. (ii) that there were no significant changes in accounting policies made during the year; and (i) that there were no significant changes in internal controls over financial reporting during the year; (d) We have indicated to the Auditors and the Audit Committee: (c) We accept responsibility for establishing and maintaining internal controls for financial reporting. We have evaluated the effectiveness of internal control systems of the Company pertaining to financial reporting and have disclosed to the Auditors and the Audit Committee, deficiencies, if any, in the design or operation of such internal controls of which we are aware and steps taken or proposed to be taken for rectifying these deficiencies. (b) There are no transactions entered into by the Company during the year which are fraudulent, illegal or in violation of the Company's code of conduct. (ii) these statements present a true and fair view of the Company's affairs and are in compliance with current accounting standards, applicable laws and regulations. (a) (i) these statements do not contain any materially untrue statement or omit any material fact or contain statements that may be misleading; We have reviewed the consolidated financial statements, read with the consolidated cash flow statement of Larsen & Toubro Limited for the year ended March 31, 2024 and that to the best of our knowledge and belief, we state that; Managing Director DIN: 02255382 1 Management Health - Activities including but not limited to community health centres, mobile medical vans, dialysis centres, general and specialized health camps and outreach programs, support to HIV / AIDS, Tuberculosis control programs continued with renewed focus in the post COVID scenario. A renewed impetus was provided to improve health awareness and promote health seeking behaviour in communities. • Water & Sanitation - includes but not limited to watershed development - access to water, promoting rainwater harvesting, soil and moisture conservation, enhancing ground water levels by facilitating setting up of community- based institutions such as village development committees, Self-help groups, farmer groups and community management of water resources for improving conditions related to sanitation, health, education, and livelihoods of communities through an integrated approach. Education - includes but not limited to education infrastructure support to educational Institutions, educational programs & nurturing talent at various levels. Promoting learning enhancement amongst children, both in schools and in communities through interventions in pre-school education, innovative teaching methodology and training teachers in schools, providing interesting "teaching learning material", with special focus on Science, Technology Engineering and Maths (STEM) subjects. This is achieved through support to Balwadis and Anganwadis, strengthening the in-school interventions and providing after school study classes in the community. A renewed focus on kindling curiosity and scientific temper amongst students through experiential learning is deployed through the STEM programme which also focuses on training teachers to deploy imaginative pedagogy in the classroom. Skill Development - includes but not limited to vocational training such as skill building, computer training, women empowerment, support to ITI's, support to specially-abled (infrastructure support & vocational training), Construction Skills Training Centres and providing employability skills to women and youth. In line with the 'Skill India Mission', initiatives such as digitization of curriculum, deploying hands-on-teaching learning methodology and providing platform skills training to Master Trainers through the Skill Training Institute provided an impetus to the skilling ecosystem within the country. Governance, Technology, and Innovation would be the Key enabling factors across all these verticals. LARSEN & TOUBRO 2. Composition of CSR & Sustainability Committee. The CSR & Sustainability Committee of the Board comprised of: Designation/Nature of Directorship Chairman (Independent Director) SI. Name of Director 365 17.98 3.25 7.91% 5.25% Appointed as Chairman and re-designated as Chairman & Managing Director with effect from October 1, 2023. %% 1.72 Remuneration of Mr. A. M. Naik excludes 1.5 crore paid to him during the financial year towards pension. Mr. Naik ceased to be the Non-executive Chairman with effect from September 30, 2023 0.13 Company Secretary & Compliance Officer remuneration *** Remuneration Percentage Ratio of remuneration of director to the median Total crore $ increase in Remuneration Ceased to be a Whole-time Director with effect from April 7, 2024 on account of superannuation. 6.09% Ceased to be Whole-time Director with effect from April 7, 2023 on account of superannuation. Executive Vice President (Heavy Engineering and Valves) Mr. M. M. Chitale @ Independent Director 0.72 7.49 4.00% Mr. M. Damodaran Independent Director 0.65 6.75 Independent Director Mr. Vikram Singh MehtaⓇ Independent Director @ Part of the remuneration has been paid to the financial institution he represents Λ # * Mr. P. R. Ramesh** Mr. Sivaram Nair A Designation 0.22 Independent Director Mrs. Preetha Reddy Corporation of India -6.37% 2.99 0.29 Nominee of Life Insurance Mr. Hemant Bhargava ^ 132.15%+ -5.30% 2.27 5.53 Independent Director 5.21% 5.48 0.52 Independent Director Mr. Sanjeev Aga Mr. Narayanan Kumar 2.84% 6.10 0.58 Independent Director Mr. Adil Zainulbhai 0.53 -20.51% Mr. Pramit Jhaveri Independent Director Name of the Director/KMP Financial Statements Reports Statutory Integrated Report Discussion and Analysis Management Corporate Overview % Integrated Annual Report 2023-24 3.25 0.13 Independent Director Mr. Ajay Tyagi** 0.56 0.22 Independent Director Mr. Rajnish Kumar* 2.54 0.22 Independent Director Mr. Jyoti Sagar* 1.57% 3.86 0.37 5.87 2.54 Commission may be paid within the monetary limit approved by shareholders, subject to the limit not exceeding 1% of the profits of the Company computed as per the applicable provisions of the Act. The Board of Directors will fix the Commission payable to Directors on the basis of number of Board/Committee meetings attended during the year and Chairmanships of Committees. + LARSEN & TOUBRO Annexure to the Board Report b) c) of the person for appointment as Director and recommend to the Board his/her appointment. Appointment and Remuneration of KMP or Senior Management Personnel is in accordance with the HR Policy of the Company. The Company's policy is committed to acquire, develop and retain a pool of high calibre talent, establish systems and practises for maintaining transparency, fairness and equity and provides for payment of competitive pay packages matching industry standards. A person should possess adequate qualification, expertise and experience for the position he / she is considered for appointment. The Committee has discretion to decide whether qualification, expertise and experience possessed by a person is sufficient / satisfactory for the concerned position. The Company shall not appoint or continue the employment of any person as Director who has attained the retirement age fixed by the Board or as approved by the Shareholders pursuant to the requirement of the Act / LODR. 3.2.2. Term / Tenure a) Executive Directors: The Company shall appoint or re-appoint any person as its Executive Director for a term not exceeding five years at a time. No re-appointment shall be made earlier than one year before the expiry of term. b) Independent Directors: An Independent Director shall hold office for a term up to five consecutive years on the Board of the Company and will be eligible for re-appointment on passing of a special resolution by the Company and disclosure of such appointment in the Board's report. The rationale for such re-appointment shall also be provided in the Notice to Shareholders proposing such re-appointment. No Independent Director shall hold office for more than two consecutive terms, but such Independent Director shall be eligible for appointment after expiry of three years of ceasing to become an Independent Director. Provided that an Independent Director shall not, during the said period of three years, be appointed in or be associated with the c) Company in any other capacity, either directly or indirectly. 375 At the time of appointment of Independent Director it should be ensured that number of Boards on which such Independent Director serves is restricted to seven listed companies as an Independent Director and three listed companies as an Independent Director in case such person is serving as a Whole-time Director of a listed company or such other number as may be prescribed under the Act. Maximum Number of Directorships: 3.2.3. Evaluation The Committee shall by itself or through the Board or an independent external agency carry out evaluation of performance of the Board / Committee(s), Individual Directors and Chairman at regular interval (yearly) and review implementation and compliance. The Company may disclose in the Annual Report: a. b. C. Observation of the Board Evaluation for the year under review Previous years observations and actions taken Proposed actions based on current year's observations 3.2.4. Removal Due to reasons for any disqualification mentioned in the Act or under any other applicable Act, rules and regulations thereunder, the Committee may recommend, to the Board with reasons recorded in writing, removal of a Director, KMP or Senior Management Personnel subject to the provisions and compliance of the said Act, rules and regulations. 3.2.5. Retirement The Director, KMP and Senior Management Personnel shall retire as per the applicable provisions of the Act or the prevailing policy of the Company, as applicable. The Board/Committee will have the discretion to retain the Director, KMP, Senior Management Personnel in the same position / remuneration or 376 Integrated Annual Report 2023-24 Corporate Overview A person shall not be appointed as a Director in case he is a Director in more than eight listed companies after April 1, 2019 and seven listed companies after April 1, 2020. For the purpose of this clause listed companies would mean only those companies whose equity shares are listed. Management a) The Committee shall identify and ascertain the integrity, qualification, expertise and experience 3.2. Policy for appointment and removal of Director, KMP and Senior Management (As per Companies Act, 2013) The Board of Directors of Larsen & Toubro Limited ("the Company") had constituted the "Nomination & Remuneration Committee" which is in compliance with the requirements of the Companies Act, 2013 ("Act") and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("LODR"). 1. OBJECTIVE: The Nomination & Remuneration Committee and this Policy shall be in compliance with Section 178 of the Act read along with the applicable rules thereto and Regulation 19 of LODR. The Key Objectives of the Committee would be: To identify persons who are qualified to become Directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal and shall specify the manner for effective evaluation of performance of Board, its Committees and individual Directors to be carried out by the Board or the Nomination & Remuneration Committee or by an Independent External Agency and review its implementation and compliance; 2. To formulate the criteria for determining qualifications, positive attributes and independence of a Director and recommend to the Board a policy, relating to the remuneration for the Directors, Key Managerial Personnel and other employees; To ensure that level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully; Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; Remuneration to Directors, Key Managerial Personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals; Devising a policy on Board diversity; DEFINITIONS: 2.1. Act means the Companies Act, 2013 or Companies Act, 1956 as may be applicable and Rules framed thereunder, as amended from time to time. 2.2. Board means Board of Directors of the Company. 2.3. Directors mean Directors of the Company. 2.4. Executive Directors means the Executive Chairman if any, Chief Executive Officer and Managing Director, Deputy Managing Director, if any and Whole-time 3.2.1. Appointment criteria and qualifications Directors. Chief Executive Officer or the Managing Director or the Manager; Whole-time Directors; Chief Financial Officer; Company Secretary; Senior Management Personnel designated as such by the Board; and Such other officer as may be prescribed. 2.6. Senior Management Personnel means all members of management one level below the Executive Directors including the Chief Financial Officer and Company Secretary. Presently, persons in Sr. Vice President grade and F&A heads of Independent Companies reporting to Whole-time Directors will be covered as Senior Management Personnel. 3. ROLE OF COMMITTEE: 3.1. Matters to be dealt with, perused and recommended to the Board by the Nomination and Remuneration Committee The Committee shall: Formulate the criteria for determining qualifications, positive attributes and independence of a Director. Identify persons who are qualified to become Director and persons who may be appointed in Key Managerial and Senior Management positions in accordance with the criteria laid down in this policy. Recommend to the Board, appointment and removal of Director, KMP and Senior Management Personnel. 2.5. Key Managerial Personnel means Integrated Statutory Discussion and Analysis 4.2 Minimum two (2) members or one-third of the members whichever is greater including atleast one Independent Director shall constitute a quorum for the Committee meeting. 4.3 Membership of the Committee shall be disclosed in the Annual Report. 4.4 Term of the Committee shall be continued unless terminated by the Board of Directors. 5. CHAIRPERSON 5.1 Chairperson of the Committee shall be an Independent Director. 5.2 Chairperson of the Company may be appointed as a member of the Committee but shall not be a Chairman of the Committee. 5.3 In the absence of the Chairperson, the members of the Committee present at the meeting shall choose one amongst them to act as Chairperson. 5.4 Chairperson of the Nomination and Remuneration Committee meeting could be present at the Annual General Meeting or may nominate some other member to answer the shareholders' queries. 6. 7. FREQUENCY OF MEETINGS The meeting of the Committee shall be held atleast once in a year and at such regular intervals as may be required. 4.1 The Committee shall consist of a minimum three (3) non-executive Directors, half of them being independent. COMMITTEE MEMBERS' INTERESTS 7.2 The Committee may invite such executives, as it considers appropriate, to be present at the meetings of the Committee. 8. SECRETARY The Company Secretary of the Company shall act as Secretary of the Committee. 9. VOTING Matters arising for determination at Committee meetings shall be decided by a majority of votes of Members present and voting and any such decision shall for all purposes be deemed a decision of the Committee. 10. NOMINATION DUTIES The duties of the Committee in relation to nomination matters include: 10.1 Ensuring that on appointment to the Board, Non-Executive Directors receive a formal letter of appointment in accordance with the Guidelines provided under the Act; 10.2 Determining the appropriate size, diversity and composition of the Board; 10.3 Setting a formal and transparent procedure for selecting new Directors for appointment to the Board; 10.4 Developing a succession plan for the Board and Senior Management and regularly reviewing the plan; 10.5 Evaluating the performance of the Board members and Senior Management in the context of the Company's performance from business and compliance perspective; 10.6 Making recommendations to the Board concerning any matters relating to the continuation in office of any Director at any time including the suspension or 7.1 A member of the Committee is not entitled to be present/participate in discussion when his or her own remuneration is discussed at a meeting or when his or her performance is being evaluated. An Independent Director shall not be entitled to any stock option of the Company. Non- Executive Directors are eligible for Stock options in accordance with Schemes formulated by the Company. Nominee Directors are not entitled to stock options as per their respective nomination letters received by the Company. MEMBERSHIP d) Stock Options: 131.11 Report Reports Financial Statements otherwise even after attaining the retirement age, for the benefit of the Company. 3.3. Policy relating to the Remuneration of Executive Director, KMP and Senior Management Personnel 3.3.1. General: a) The remuneration / compensation / commission etc. to the Executive Directors will be determined by the Committee and recommended to the Board for approval. The remuneration / compensation / commission etc. shall be subject to the approval of the shareholders of the Company and Central Government, wherever required. b) The remuneration and commission to be paid to the Executive Directors shall be in accordance with the percentage / limits / conditions laid down in the Articles of Association of the Company and as per the provisions of the Act. c) Increments to the existing remuneration/ compensation structure may be recommended by the Committee to the Board which should be within the limits approved by the Shareholders in the case of Executive Directors. d) Where any insurance is taken by the Company on behalf of its Executive Directors, Chief Executive Officer, Chief Financial Officer, the Company Secretary and any other employees for indemnifying them against any liability, the premium paid on such insurance shall not be treated as part of the remuneration payable to any such personnel. Provided that if such person is proved to be guilty, the premium paid on such insurance shall be treated as part of the remuneration. e) Remuneration of other KMP or Senior Management Personnel, in any form, shall be as per the policy of the Company based on the grade structure in the Company. 3.3.2. Remuneration to Executive Directors/KMP and Senior Management Personnel: a) Fixed pay: The Executive Directors / KMP and Senior Management Personnel shall be eligible for a monthly remuneration as may be approved by the Board on the recommendation of the Committee or policy of the Company. In case of remuneration to Directors, the breakup of the pay scale and quantum of perquisites including, employer's contribution to P.F, pension scheme, medical expenses, club fees etc. shall be decided and approved by the Board / the Person authorized by the Board on the recommendation of the Committee and approved by the shareholders and Central Government, wherever required. b) Minimum Remuneration: If, in any financial year, the Company has no profits or its profits are inadequate, the Company shall pay remuneration to its Executive Directors in accordance with the provisions of Schedule V of the Act and if it is not able to comply with such provisions, with the previous approval of the Central Government. c) Commission: 4. Annexure to the Board Report LARSEN & TOUBRO 377 One Lac per meeting of the Board or Committee or such amount as may be prescribed by the Central Government from time to time. NOMINATION & REMUNERATION POLICY The Non-Executive / Independent Director may receive remuneration by way of fees for attending meetings of Board or Committee thereof. Provided that the amount of such fees shall not exceed The remuneration / commission shall be fixed as per the limits and conditions mentioned in the Articles of Association of the Company and the Act. a) Remuneration / Commission: 3.3.3. Remuneration to Non-Executive / Independent Director: d) Stock Options in Subsidiary Companies: Executive Directors may be granted stock options in subsidiary companies as per their Schemes and after taking necessary approvals. Perquisites may be added to the remuneration of concerned Directors and considered in the limits applicable to the Company. If any Chairman/Managing Director/Whole-time Directors draws or receives, directly or indirectly by way of remuneration any such sums in excess of the limits prescribed under the Act or without the prior sanction of the Central Government, where required, he/she shall refund such sums to the Company and until such sum is refunded, hold it in trust for the Company. The Company shall not waive recovery of such sum refundable to it unless permitted by the Central Government. c) Provisions for excess remuneration: b) Sitting Fees: Ceased to be Independent Directors with effect from March 31, 2024 on account of completion of tenure Annexure 'F' to the Board Report Reports i. The Companies Act, 2013 (the Act) and the rules made thereunder; ii. The Securities Contracts (Regulation) Act, 1956 ('SCRA') and the rules made thereunder; iii. The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder; iv. Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings; V. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 ('SEBI Act'): a. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; b. C. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015; The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 - Not Applicable as there was no reportable event during the financial year under review; d. The Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021; We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on March 31, 2024 according to the provisions of: e. g. The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client - Not Applicable as the Company is not registered as Registrar to Issue and Share Transfer Agent during the financial year under review; The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021 - Not Applicable as the Company has not delisted/ proposed to delist its equity shares from any Stock Exchange during the financial year under review; The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018; h. The Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) Regulations, 2021 ; i. The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations, 2015; vi. The Company has informed that there are no laws which are specifically applicable to the Company. We have also examined compliance with the applicable provisions of the following: (i) Secretarial Standards with regard to Meetings of Board of Directors (SS-1) and General Meetings (SS-2) issued by The Institute of Company Secretaries of India; 372 Integrated Annual Report 2023-24 f. Corporate Overview We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Larsen & Toubro Limited (hereinafter called 'the Company'). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts / statutory compliances and expressing our opinion thereon. Based on our verification of the Company's books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on March 31, 2024, complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter. L&T House, Ballard Estate, Impact of full year remuneration of new director/KMP appointed during FY 2022-23 * Appointed as Independent Directors with effect from May 10, 2023 ** Appointed as Independent Directors with effect from October 31, 2023 *** Ratio of remuneration of director to the median remuneration is calculated on pro-rata basis for those directors who served for only part of FY 2023-24 Details not given as the Director was there for part of the year. B. Percentage increase in the median remuneration C. of all employees in FY 2023-24: The median remuneration of employees of the Company during the financial year was 9.55 lakh. In the financial year, there was an increase of 1.32% in the median remuneration of employees. Number of permanent employees on the rolls of the Company as on March 31, 2024: There were 59,018 permanent employees on the rolls of the Company as on March 31, 2024. D. Average percentile increase made in the salaries of the employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in Mumbai - 400001 E. Average percentage increase made in the salaries of employees other than the managerial personnel for the FY 2023-24 was 1.74% whereas there is an increase in the managerial remuneration by 20.38%. Increase in managerial remuneration is mainly on account of higher profits and increase in commission rates. Affirmation that the remuneration is as per the remuneration policy of the Company: It is hereby affirmed that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees. 371 LARSEN & TOUBRO Annexure to the Board Report Annexure 'E' to the Board Report Form No. MR-3 SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED MARCH 31, 2024 [Pursuant to Section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014] To, The Members, Larsen & Toubro Limited CIN: L99999MH1946PLC004768 the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in managerial remuneration Management Discussion and Analysis Integrated Statutory It is the responsibility of the management of the Company to maintain secretarial records, devise proper systems to ensure compliance with the provisions of all applicable laws and regulations and to ensure that the systems are adequate and operate effectively. Auditor's Responsibility 2 Our responsibility is to express an opinion on these secretarial records, standards and procedures followed by the Company with respect to secretarial compliances. 3 4 We have conducted the Audit as per the applicable Auditing Standards issued by the Institute of Company Secretaries of India. We believe that audit evidence and information obtained from the Company's management is adequate and appropriate for us to provide a basis for our opinion. 5 Wherever required, we have obtained reasonable assurance whether the statements prepared, documents or Records, in relation to Secretarial Audit, maintained by the Company, are free from misstatement. 6 Wherever required, we have obtained the Management's representation about the compliance of laws, rules and regulations and happening of events, etc. Disclaimer 1 7 The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company. We have not verified the correctness and appropriateness of financial records and books of accounts of the Company. For S. N. ANANTHASUBRAMANIAN & Co. Company Secretaries ICSI Unique Code: P1991MH040400 Peer Review Cert. No.: 5218/2023 S. N. Ananthasubramanian Founding Partner FCS: 4206 | COP No.: 1774 ICSI UDIN: FO004206F000322293 Date May 8, 2024 Place: Thane 374 Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Report Statutory 8 Management's Responsibility Our Secretarial Audit Report for the Financial Year ended March 31, 2024, of even date is to be read along with this letter. - Report Reports Financial Statements (ii) Listing Agreements entered into by the Company with BSE Limited and National Stock Exchange of India Limited. During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. We further report that: the The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors including Independent Directors and a Woman Director. The changes composition of the Board of Directors which took place during the period under review were carried out in compliance with the provisions of the Act; Adequate notice is given to all Directors of the schedule of the Board and Committee Meetings and Agenda & detailed notes on agenda were sent at least seven days in advance and there exists a system for seeking and obtaining further information and clarifications on the agenda items before the meeting for meaningful participation at the meeting; All decisions of Board and Committee meetings were carried unanimously. We further report that based on review of compliance mechanism established by the Company and on the basis of the Compliance Certificate(s) issued by the Company Secretary and taken on record by the Board of Directors at their meeting(s), we are of the opinion that there are adequate systems and processes in place in the Company which is commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines. We further report that during the audit period the following events have occurred which had a major bearing on the Company's affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards etc: The Company has: redeemed Non-Convertible Debentures of 1,250 crore on April 20, 2023, 3,450 crore on April 24, 2023 and 100 crore on May 24, 2023, respectively on their due dates; raised 450 crore by way of receipt of call money pursuant to Third Balance Payment (Final) notice of 2,50,000 each towards 18,000 partly paid Non- Convertible Debentures on April 24, 2023; raised 7,000 crore by issue and allotment of 7,00,000 Non-Convertible Debentures of 1 Lac each aggregating to a) ₹3,500 Crore on June 8, 2023, b) 1,500 Crore on November 2, 2023 and c) 2,000 Crore on November 9, 2023; completed Buy-back of 3,12,50,000 fully paid up equity shares of the Company of face value of 2/- (Rupees Two only) each at a price of ₹3,200/- (Rupees Three Thousand Two Hundred Only) per equity share aggregating 10,000 crore on a proportionate basis from the Equity Shareholders of the Company, through the tender offer process on September 30, 2023; The Board at its meeting held on January 30, 2024 has approved Merger of L&T Energy Hydrocarbon Engineering Limited and L&T Offshore Private Limited, wholly owned subsidiaries, with the Company. The Company has made application(s) with necessary statutory and regulatory Authorities for the approval of Merger Scheme including to National Company Law Tribunal (NCLT). This Report is to be read with our letter of even date which is annexed as Annexure A and forms an integral part of this report. Mumbai 400001. L&T House, Ballard Estate, CIN: L99999MH1946PLC004768 Larsen & Toubro Limited The Members, To, Financial Statements Annexure - A LARSEN & TOUBRO 373 FCS: 4206 | COP No.: 1774 ICSI UDIN: F004206F00322293 Date May 8, 2024 Place: Thane S. N. Ananthasubramanian Founding Partner ICSI Unique Code: P1991 MH040400 Peer Review Cert. No.: 5218/2023 For S. N. ANANTHASUBRAMANIAN & Co. Company Secretaries Annexure to the Board Report 12.52 Integrated Annual Report 2023-24 Mr. Anil V Parab Name Registered address Number, if applicable Details of capital assets created or acquired through Corporate Social Responsibility amount is available on the Company's website https://investors.larsentoubro.com/listing-compliance-agm.aspx. 9. Specify the reason(s), if the company has failed to spend two per cent of the average net profit as per sub- section (5) of section 135. NOT APPLICABLE S. N. Subrahmanyan Chairman & Managing Director DIN: 02255382 Date: May 8, 2024 Place Mumbai Ajay Tyagi Chairman - CSR Committee DIN: 00187429 369 LARSEN & TOUBRO Annexure to the Board Report Annexure 'D' to the Board Report A. Ratio of the remuneration of each director to the median remuneration of the employees of the Company for FY 2023-24, the percentage increase in remuneration of each Director & Company Secretary during FY 2023-24 and comparison of the remuneration of each of the Director/Key Managerial Personnel (KMP) against the performance of the Company: crore 370 (6) CSR Registration (5) (4) Whole-Time Director & Senior 378 Corporate Overview Management Discussion and Analysis Integrated Statutory Report Reports Financial Statements Furnish the details relating to such asset(s) so created or acquired through Corporate Social Responsibility amount spent in the Financial Year: Total SI. Short particulars of the property or asset(s) [including complete address Pin code of the property Date of creation Amount of CSR amount Details of entity / Authority / beneficiary of the registered owner or asset(s) (1) and location of the property] (2) (3) No. Name of the Director/KMP spent Remuneration 13.80 144.47 11.79% Executive Vice President (Buildings) Mr. Subramanian Sarma Whole-time Director & President (Energy) 37.04 387.83 46.50% Mr. S. V. Desai Whole-time Director & Senior Whole-Time Director & Senior 43.82% Executive Vice President (Civil Infrastructure) Mr. T. Madhava Das Whole-Time Director & Senior 18.73 196.13 63.22% Designation Executive Vice President (Utilities) 19.22 Mr. M. V. Satish$ 201.24 Executive Vice President Ratio of remuneration of director to the median remuneration *** Percentage (Development Projects) increase in Remuneration Mr A.M. Naik % Non-executive Chairman 1.69 Mr. S. N. Subrahmanyan% %% Chairman & Managing Director 51.05 35.44 43.11% 22.92 Mr. R. Shankar Raman President, Whole-time Director & 31.66 331.52 42.84% CFO Whole-time Director & Senior 534.57 Mr. D. K. Sen# Information Other than the Financial Statements and Auditor's Report Thereon ('other information') The Board of Directors of the Company is responsible for the other information. The other information comprise the information included in the Management Discussion and Analysis, Board's Report including Annexures to Board's Report, Business Responsibility & Sustainability Report, Corporate Governance and Shareholder's Information, but does not include the Standalone Financial Statements and our auditor's report thereon. Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. In preparing the Standalone Financial Statements, management and Board of Directors is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. The Company's Board of Directors is also responsible for overseeing the Company's financial reporting process. The Company's Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (the "Act") with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including Ind AS specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor's Responsibility for the Audit of the Standalone Financial Statements Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements. • We performed sensitivity analysis of the discount rate to assess the extent of change in discount rate that would be required for the investment to be impaired. As part of an audit in accordance with SAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements With the assistance of our fair value specialists who have specialised skill and knowledge, we evaluated the reasonableness of the methodology and discount rate by testing the source information underlying the determination of the discount rate and mathematical accuracy of the calculations; and Integrated Annual Report 2023-24 Statements Reports Report Financial Statutory Integrated Management Discussion and Analysis Corporate Overview 382 We evaluated the reasons for variation between the management's previous estimate of traffic, revenue and cash flow forecasts and obtained our understanding of the manner in which revised forecasts were obtained; We tested the effectiveness of controls over forecasts of future traffic, revenue, free cash flows and selection of the discount rate; Our audit procedures related to forecasts of future traffic, revenue, free cash flows generated, selection of the method for estimating recoverable value and discount rate for the entity: • Refer to Note Nos. [1] (II)(m) and 5 to the Standalone Financial Statements. Impairment of Investment in a Subsidiary • f) Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to Standalone Financial Statements in place and the operating effectiveness of such controls. We considered this as a key audit matter due to significant judgement involved in estimating future cash flows of the subsidiary and in determining the discount rate to be used. Changes in inputs and assumptions could impact the results of the impairment assessment. In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act. With respect to the other matters to be included in the Auditor's Report in accordance with the requirements of section 197(16) of the Act, as amended: With respect to the adequacy of the internal financial controls with reference to Standalone Financial Statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure A". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company's internal financial controls with reference to Standalone Financial Statements. In our opinion, the aforesaid Standalone Financial Statements comply with the Ind AS specified under Section 133 of the Act. On the basis of the written representations received from the directors as on March 31, 2024 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2024 from being appointed as a director in terms of Section 164(2) of the Act. The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Cash Flows and Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account. In our opinion, proper books of account as required by law have been kept by the Company and its joint operation companies so far as it appears from our examination of those books and the reports of the other auditors. h) g) e) d) b) As required by Section 143(3) of the Act, based on our audit and based on the consideration of the reports of other auditors on the separate financial information of the joint operations, referred to in Other Matters section above we report, to the extent applicable that: a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. 1. Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Report on Other Legal and Regulatory Requirements We did not audit the financial information of 30 joint operations included in the Standalone Financial Statements of the company whose financial information reflects total assets of 3509.61 crore as at March 31, 2024, total revenues of 4434.70 crore and net cash flows of (377.92) crore for the year ended March 31, 2024, respectively, as considered in the Standalone Financial Statements. The financial information of these joint operations has been audited by the other auditors whose reports have been furnished to us by the Management of the Company, and our opinion in so far as it relates to the amounts and disclosures included in respect of these joint operations and our report in terms of subsection (3) of Section 143 of the Act, in so far as it relates to the aforesaid joint operations, is based solely on the reports of such other auditors and the procedures performed by us as stated under Auditor's Responsibilities section above. Other Matters From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal financial controls that we identify during our audit. Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Standalone Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Standalone Financial Statements. Obtain sufficient appropriate audit evidence regarding the financial information of the Company and its joint operations to express an opinion on the Standalone Financial Statements. We are responsible for the direction, supervision and performance of the audit of the financial statements of such entities or business activities included in the Standalone Financial Statements of which we are the independent auditors. For the other entities or business activities included in the Standalone Financial Statements, which have been audited by the other auditors, such other auditors remain responsible for the direction, supervision and performance of the audits carried out by them. We remain solely responsible for our audit opinion. • Independent Auditor's Report LARSEN & TOUBRO 383 Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation. Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management. Our opinion on the Standalone Financial Statements and our report on Other Legal and Regulatory Requirements below is not modified in respect of the these matters. As at March 31, 2024, the Company held investment with a carrying amount of 7412.99 crore (excluding investment of 436.36 crore in debentures) in L&T Metro Rail (Hyderabad) Limited, a wholly owned subsidiary. This investment is carried at cost less impairment in the Company's Standalone Financial Statements. Consequent to accumulation of losses incurred by the subsidiary, the Company's management has tested this investment for impairment in accordance with Ind AS 36 by comparing its recoverable amount with it carrying amount as at March 31, 2024. The recoverable amount of the investment in the subsidiary is assessed based on future discounted cash flows of the subsidiary. 11.4 To consider any other matters as may be requested by the Board. description Reports Financial Statutory Integrated Report Management Discussion and Analysis Corporate Overview Standalone Financial Statements 379 The Policy shall be reviewed as and when required to ensure that it meets the objectives of the relevant legislation and remains effective. The Executive Committee has the right to change/amend the policy as may be expedient taking into account the law for the time being in force. 13. REVIEW & AMENDMENT: Proceedings of all meetings must be minuted and signed by the Chairman of the Committee at the subsequent meeting. Minutes of the Committee meetings will be tabled at the subsequent Board and Committee meeting. 12. MINUTES OF NOMINATION AND REMUNERATION COMMITTEE MEETING With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to 11.3 To delegate any of its powers to one or more of its members or the Secretary of the Committee. Statements long term performance objectives appropriate to the working of the Company. 11.1 To consider and determine the Remuneration Policy, based on the performance and also bearing in mind that the remuneration is reasonable and sufficient to attract, retain and motivate members of the Board and such other factors as the Committee shall deem appropriate all elements of the remuneration of the members of the Board. The duties of the Committee in relation to remuneration matters include: 11. REMUNERATION DUTIES 10.8 Recommend any necessary changes to the Board; and 10.9 Considering any other matters, as may be requested by the Board. 10.7 Delegating any of its powers to one or more of its members or the Secretary of the Committee; termination of service of an Executive Director as an employee of the Company subject to the provision of the law and their service contract; Financial Statements Reports Report Discussion and Analysis Statutory Integrated Management Corporate Overview 11.2 To ensure the remuneration maintains a balance between fixed and incentive pay reflecting short and INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF LARSEN & TOUBRO LIMITED Report on the Audit of the Standalone Financial Statements Opinion Key audit matter Impairment of Investment in a Subsidiary In respect of the sample contracts, we compared previous estimates relating to recoverability of contract assets and compared it with actual collections during the year. We selected a sample of contracts assets with corresponding trade receivables that were overdue and evaluated the basis for management's conclusions regarding the (1) evidence supporting the execution of work for which the contract assets were recognised; (2) reasons for the delays in recovery of invoices and the basis on which recoverability of the contract assets was assessed; (3) impact on the allowance for expected credit losses; and (4) adjusting events after the reporting date i.e. March 31, 2024 and the date when the financial statements are approved by the Board of Directors and the impact thereof on the carrying amount of the related contract assets. We tested the design, implementation and operating effectiveness of internal controls relating to the (a) gathering and evaluation of evidence supporting the execution of work; (b) evaluation of recoverability of the overdue amounts including the impact on the expected credit loss allowance; and (c) assessment of adjusting events after the reporting date i.e. March 31, 2024 and the date when the financial statements are approved by the Board of Directors and the impact thereof on the carrying amount of the related contract assets, measurement of contract assets in respect of overdue milestones and receivables in respect of overdue invoices. Our audit procedures related to the (1) evaluation of evidence supporting the execution of work; (2) evaluation of recoverability of the overdue amounts including the impact on the expected credit loss allowance; and (3) assessment of adjusting events after the reporting date i.e. March 31, 2024 and the date when the financial statements are approved by the Company's Board of Directors included the following amongst others: Principal Audit Procedures Measurement of contract assets in respect of overdue milestones and receivables in respect of overdue invoices. Key audit matter The Company, in its contract with customers, promises to transfer distinct services to its customers, which may description be rendered in the form of engineering, procurement, and construction ("EPC") services through design-build contracts, and other forms of construction contracts. The recognition of revenue is based on contractual terms, which could be based on agreed unit price or lump-sum revenue arrangements. At each reporting date, revenue is accrued for costs incurred against work performed that may not have been invoiced. Identifying whether the Company's performance has resulted in a service that would be billable and collectable where the works carried out have not been acknowledged by customers as of the reporting date, or in the case of certain Defence contracts, where the evidence of work carried out and cost incurred are covered by confidentiality arrangements, involves a significant judgement. Assessing the recoverability of contract assets related to overdue milestones and amounts overdue against invoices raised which have remained unsettled for a significantly long period after the end of the contractual credit period also involves a significant amount of judgment. Refer to Note Nos. [1] (II)(e), [1](II)(m), 11 and 16 to the Standalone Financial Statements Tested the estimate for consistency with the status of delivery of milestones and customer acceptance to identify possible delays in achieving milestones, which require changes in estimated costs or efforts to complete the remaining performance obligation. Compared costs incurred with Company's estimates of costs incurred to date to identify significant variations and evaluated whether those variations have been considered appropriately in estimating the remaining costs to complete the contract. d. C. Revenue recognition - accounting for construction contracts Independent Auditor's Report LARSEN & TOUBRO 381 Identified significant terms and deliverables in the contract to assess management's conclusions regarding the (i) identification of distinct performance obligations; (ii) changes to costs to complete as work progresses and as a consequence of change orders; (iii) the impact of change orders on the transaction price; and (iv) the evaluation of the adjustment to the transaction price on account of variable consideration. We have audited the accompanying Standalone Financial Statements of Larsen & Toubro Limited (the "Company"), which comprise the Balance Sheet as at March 31, 2024, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year ended on that date, and notes to the financial statements, including a summary of material accounting policies and other explanatory information, and which includes 31 joint operations accounted on proportionate basis. In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of reports of the other auditors on separate financial statements of the joint operations referred to in the Other Matters section below, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 (the "Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2024, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date. Basis for Opinion We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing ("SAS") specified under section 143(10) of the Companies Act, 2013 (the "Act"). Our responsibilities under those Standards are further described in the Auditor's Responsibility for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India ("ICAI") together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI's Code of Ethics. We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in the Other Matters section below, is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Financial Statements. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Financial Statements of the current financial year. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report. Revenue recognition - accounting for construction contracts Key audit matter description Principal Audit Procedures Principal Audit Procedures There are significant accounting judgements in estimating revenue to be recognised on contracts with customers, including estimation of costs to complete. The Company recognises revenue on the basis of stage of completion in proportion of the contract costs incurred at balance sheet date, relative to the total estimated costs of the contract at completion. The recognition of revenue is therefore dependent on estimates in relation to total estimated costs of each such contract. Refer to Note No. [1] (II)(e) and 31 to the Standalone Financial Statements Our audit procedures related to the (1) identification of distinct performance obligations, (2) evaluation of the process for estimation of costs to complete (3) evaluation of implications of change orders on costs estimates of costs to complete and revenue and (4) evaluation of any variable consideration included the following, amongst others: We tested the effectiveness of controls relating to the (a) evaluation of performance obligations and identification of those that are distinct; (b) estimation of costs to complete each of the performance obligations including the contingencies in respect thereof, as work progresses and the impact thereon as a consequence of change orders; (c) the impact of change orders on the transaction price of the related contracts; and (d) evaluation of the impact of variable consideration on the transaction price. We selected a sample of contracts with customers and performed the following procedures: a. b. Obtained and read contract documents for each selection, change orders, and other documents that were part of the agreement. Significant judgements are involved in determining the expected losses, when such losses become probable based on the expected total contract cost. Cost contingencies are included in these estimates to take into account specific risks of uncertainties or disputed claims against the Company, arising within each contract. These contingencies are reviewed by the Management on a regular basis throughout the life of the contract and adjusted where appropriate. The revenue on contracts may also include variable consideration (variations and claims). Variable consideration is recognised when the recovery of such consideration is highly probable. us: Our responsibility is to express an opinion on the Company's internal financial controls with reference to Standalone Financial Statements of the Company and its joint operations company incorporated in India, based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the ICAI and the Standards on Auditing ("SA"s) prescribed under Section 143(10) of the Companies Act, 2013 (the "Act"), to the extent applicable to an audit of internal financial controls with reference to Standalone Financial Statements. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to Standalone Financial Statements was established and maintained and if such controls operated effectively in all material respects. 384 as at March at March statements Held in name of financial value as Description of property carrying Carrying value in the Gross crore With respect to immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the Company) disclosed in the financial statements as a part of property, plant and equipment, capital work-in progress and investment property and based on the examination of the registered sale deed / transfer deed / conveyance deed provided to us, we report that, the title deeds of such immovable properties are held in the name of the Company as at the balance sheet date, except for the following: The Company has a program of physical verification of its property, plant and equipment and investment properties so to cover all the items in a phased manner over a period of 3 years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, certain assets were due for verification during the year and were physically verified by the Management during the year. No material discrepancies were noticed on such verification. (B) The Company has maintained proper records showing full particulars of intangible assets. (c) 31, 2024 (b) In respect of the Company's property, plant and equipment and intangible assets: In terms of the information and explanations sought by us and given by the Company and the books of account and records examined by us in the normal course of audit and to the best of our knowledge and belief, we state that: (Referred to in paragraph 2 under 'Report on Other Legal and Regulatory Requirements' section of our report to the Members of Larsen & Toubro Limited of even date) ANNEXURE "B" TO THE INDEPENDENT AUDITORS' REPORT Independent Auditor's Report LARSEN & TOUBRO 387 Date: May 08, 2024 Place: Mumbai UDIN: 24046930BKEZVP9659 (Membership No. 046930) Partner Rupen K. Bhatt (Firm's Registration No. 117366W/W-100018) (a) (A) The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment, capital work-in progress, investment properties and relevant details of right-of-use assets. 31, 2024 (*crore) Freehold Land - Hazira West Integrated Annual Report 2023-24 388 (b) The Company has been sanctioned working capital limits in excess of 5 crores, in aggregate, at points of time during the year, from banks or financial institutions on the basis of security of current assets. In our opinion, the quarterly returns filed by the Company with such banks or financial institutions are in agreement with the unaudited books of account of the Company of the respective quarters and no material discrepancies have been observed. (a) The inventories except for goods in transit, were physically verified during the year by the Management at reasonable intervals. In case of real estate inventory wherein, having regard to the nature of inventory, the physical verification by way of verification of title deeds, site visits by the Management and certification to the extent of work completion by competent persons, are at reasonable intervals. In our opinion, the coverage and procedure of such verification by the Management is appropriate having regard to the size of the Company and the nature of its operations. In respect of goods in transit, the goods have been received subsequent to the year end. No discrepancies of 10% or more in the aggregate for each class of inventories were noticed on such physical verification of inventories when compared with books of account. (ii) In respect of the Company's inventories: No proceedings have been initiated or is pending against the company as at March 31, 2024 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder. (e) (d) The Company has not revalued any of its property, plant and equipment (including Right of Use assets) and intangible assets during the year. * Irrevocable Power of Attorney given to L&T by the owners, possession is with L&T are pending from the authorities side. Route. The formalities Government Acquisition Land acquired from farmers through Also indicate if in dispute Company Reason for not being held in name of (Since 2012) 1.01 (*crore) 1.01 1. Magan Kuber No 2. Kashiben Patel 3. Ishwar Prema Chartered Accountants Whether promoter, director or their - indicate relative or employee range, where appropriate 12 years Period held i. The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements (Refer Note No 29 to the Standalone Financial Statements); For DELOITTE HASKINS & SELLS LLP Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls with reference to Standalone Financial Statements insofar as it relates to one joint operation which is a company incorporated in India, is based on the corresponding report of the other auditor of such company incorporated in India. For DELOITTE HASKINS & SELLS LLP As required by the Companies (Auditor's Report) Order, 2020 ("the Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in "Annexure B" a statement on the matters specified in paragraphs 3 and 4 of the Order. As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from April 1, 2023, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 on preservation of audit trail as per the statutory requirements for record retention is not applicable for the financial year ended March 31, 2024. As stated in note 17 to the financial statements, the Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The amount of dividend declared is in accordance with section 123 of the Act to the extent it applies to declaration of dividend. Based on our examination which included test checks, the Company has used accounting software(s) for maintaining its books of account for the financial year ended March 31, 2024, which have a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software(s). Further, during the course of our audit, we did not come across any instance of audit trail feature being tampered with. The final dividend paid by the Company during the year in respect of the same declared for the previous year and the interim dividend declared and paid by the Company during the year is in accordance with Section 123 of the Companies Act 2013 to the extent it applies to payment of dividend. b) a) The amount of dividend is in accordance with Section 123 of the Act. Based on the audit procedures that has been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e) contain any material mis-statement; and The Management has represented, that, to the best of it's knowledge and belief, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and C. b. a. The Management has represented that, to the best of it's knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company; Chartered Accountants The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts, including derivative contracts; V. iv. iii. ii. 2. Statements Reports Report Financial Statutory Integrated Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 vi. (Firm's Registration No. 117366W/W-100018) Rupen K. Bhatt Partner Other Matters In our opinion, to the best of our information and according to the explanations given to us and based on the consideration of the reports of the other auditors on internal financial controls with reference to Standalone Financial Statements of the joint operation referred to in the Other Matters paragraph below, the Company has, in all material respects, an adequate internal financial controls with reference to Standalone Financial Statements and such internal financial controls with reference to Standalone Financial Statements were operating effectively as at March 31, 2024, based on the criteria for internal financial control with reference to Standalone Financial Statements established by the respective Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. Opinion Statements Reports Report Financial Statutory Integrated Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 386 Because of the inherent limitations of internal financial controls with reference to Standalone Financial Statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to Standalone Financial Statements to future periods are subject to the risk that the internal financial control with reference to Standalone Financial Statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Inherent Limitations of Internal Financial Controls with reference to Standalone Financial Statements A company's internal financial control with reference to Standalone Financial Statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control with reference to Standalone Financial Statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that I could have a material effect on the financial statements. We believe that the audit evidence we have obtained, and the audit evidence obtained by the other auditor of the joint operation which is a company incorporated in India, in terms of their reports referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the Company's internal financial controls with reference to Standalone Financial Statements. Meaning of Internal Financial Controls with reference to Standalone Financial Statements (Membership No. 046930) UDIN: 24046930BKEZVP9659 Place: Mumbai Date: May 08, 2024 385 LARSEN & TOUBRO Our opinion is not modified in respect of this matter. Independent Auditor's Report Report on the Internal Financial Controls with reference to Standalone Financial Statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (the "Act") We have audited the internal financial controls with reference to Standalone Financial Statements of Larsen and Toubro Limited (the "Company") as of March 31, 2024 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date which includes internal financial controls with reference to Standalone Financial Statements of one of the Company's 31 joint operations which is a company incorporated in India. Management's Responsibility for Internal Financial Controls The Company's management is responsible for establishing and maintaining internal financial controls with reference to Standalone Financial Statements based on the internal control with reference to Standalone Financial Statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India ("ICAI"). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to respective company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013. Auditor's Responsibility Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to Standalone Financial Statements and their operating effectiveness. Our audit of internal financial controls with reference to Standalone Financial Statements included obtaining an understanding of internal financial controls with reference to Standalone Financial Statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT (Referred to in paragraph 1(f) under "Report on Other Legal and Regulatory Requirements" section of our report of even date) (i) 11.5 Professional indemnity and liability insurance for Directors and senior management. 22% 19194 117119 150000 180000 crore The share of international orders for the Infrastructure segment increased to 38% from 22% in the previous year, with the share of the Middle East in overall international order inflow for the segment remaining at 93% in line with the previous year. receipt of some residential as well as IT park orders. The Transportation Infrastructure business registered growth with the receipt of a prestigious order for electrification work in the High-Speed Rail project as well as for a few road projects. The Heavy Civil Infrastructure business registered growth on receipt of a few high-value orders for Urban Transportation. Power Transmission & Distribution business benefitted from the receipt of multiple orders for renewable energy projects. Water & Effluent Treatment business and Minerals & Metals business registered de- growth over the previous year due to deferment/delay in finalisation of orders. 120000 54641 38% 21.7% Order Inflow Financial performance of the segment f) Minerals & Metals e) Water & Effluent Treatment d) Power Transmission & Distribution 142589 c) Heavy Civil Infrastructure 22% 26184 crore International 2023-24 Domestic 2022-23 29.8% Revenue from Operations and OPM% 90000 0 30000 87948 62% 90935 78% 150000 60000 120000- b) Transportation Infrastructure a) Buildings & Factories The Infrastructure Projects Segment comprises the engineering and construction of: 5,378 Utilisation of Funds cash balance 133 (1,930) Increase/(Decrease) in 21,871 buyback expenses and tax) 55.85 EPS (in Rs.) 12,280 Buyback of shares (Including 13.7% 11.3% 66.95 Liquidity & Gearing Business operations generated cash flows of 8,294 crore during the year, compared to ₹7,264 crore in the previous year. The increase is attributable to improved working capital management. During the year, additional funds were borrowed to support an increase in business volumes. The proceeds from cash generated through the sale of investments ₹ 4,645 crore, treasury income of 2,041 crore, and dividend income from S&A companies at 2,649 crore have been utilised towards Share Buyback (including expenses and tax) of 12,280 crore, CapEx payment of 2,822 crore, a dividend payment of ₹ 4,217 crore, and interest payment of 2,268 crore. Artist's Impression AIIMS Rewari, Haryana PROJECTS SEGMENT INFRASTRUCTURE Statements Reports Financial Statutory Integrated Report Discussion and Analysis Management Corporate Overview Integrated Annual Report 2023-24 34 Total borrowings as at March 31, 2024, increased to 22,540 crore, compared to 18,151 crore in the previous year. The loan portfolio of the Company comprises a mix of Rupee and suitably hedged foreign currency loans. The gross debt-to-equity ratio increased to 0.35:1 as at March 31, 2024, from 0.25:1 as at March 31, 2023. The net debt ratio as at March 31, 2024, is 0.02:1 after netting off cash and cash equivalents. The Infrastructure segment secured orders worth 1,42,589 crore in FY 2023-24, higher by 21.7% over the previous year, with the receipt of multiple orders across various sub-segments. During the current year, the Buildings & Factories business registered growth with the 87823 114008 33845 30% LARSEN & TOUBRO 37 In the hospital infrastructure industry, private investments are proceeding cautiously, leading to delayed expansions. Notably, many Indian Institutes of Technology (IITs) are establishing postgraduate medical research institutes along with super speciality Hospitals. Additionally, the Government's plan to set up infectious disease hospital blocks in all districts has expanded the scope of new hospital projects. These developments signal a dynamic landscape with potential for growth and innovation in healthcare infrastructure. Health The factory construction business is experiencing sustained growth driven by orders from private players in response to the Government's impetus to manufacturing through the Production Linked Incentive (PLI) Scheme. Factories YASHOBHOOMI The Airport sector is experiencing a dynamic business landscape with several key trends. First, passenger traffic has crossed pre-COVID levels, signalling a positive trajectory for airport infrastructure development. Second, there is a growing demand for air travel in tier II and tier III cities as well, thereby presenting multiple lucrative opportunities for greenfield airports and expansion/modernisation of existing airports. The Private customer segment has demonstrated robust growth across multiple sectors, including MUD (Mixed Use Development), Hotels, and Malls. However, in large-size state-sponsored projects, the Government has strategically opted to split high-volume tenders for better price discovery. Also, some marquee public projects were delayed because of lower initial estimates that were not adequately aligned with the proposed scope of work. Public Spaces Business Environment The IT Office Spaces & Data Centers business specialises in end-to-end services, from conceptualisation to commissioning, for establishing innovative data centers. It also provides turnkey Design & Build solutions for Information Technology and office spaces. The business also strategically embraces innovative construction technologies, including prefabricated prefinished volumetric construction (PPVC), modular construction, and 3D printing Health, Residential & Commercial Buildings SBG: The Health business provides world-class healthcare infrastructure development, right from concept to commissioning in EPC mode, including medical and paramedical services as well as medical equipment The Residential business is a prime EPC solutions provider of elite, affordable, and mass-housing projects. The business has expertise in executing high-rise towers and developing mass-dwelling units Statements Airports YASHOBHOOM INDIA INTERNATIONAL CONVEN India International Convention Centre, Dwarka, New Delhi □ AIIMS hospital and allied infrastructure at Rewari, Haryana □ AIIMS hospital and allied infrastructure at Madurai, Tamil Nadu □ Airport at Bhogapuram, near Visakhapatnam, for GMR Airports Infrastructure Limited □ Commercial tower for TAISEI Corporation at BKC (Bandra Kurla Complex), Mumbai □ Commercial development for Raheja Group in Hyderabad □ Commercial building at four locations in Bangladesh □ Mass Housing development for CIDCO at Navade, Navi Mumbai □ Commercial and residential development for Prestige Group in Mumbai and Bengaluru □ Construction of two residential towers for Oberoi Realty in Thane Major Orders Won: Major Achievements The business has strategically expanded its presence in the Middle East, capitalising on the economic upswing in Oman. Furthermore, selective opportunities are being pursued in Saudi Arabia. With the cessation of the Work-from-Home (WFH) culture over time, the business is seeing growth from many real estate developers wanting to develop premium office spaces. The B&F Fast segment is witnessing significant interest in 3D concrete printing technology. Noteworthy is that the business is executing the world's largest 3D concrete printed facility in Chandigarh and also received an order for constructing villas in Bengaluru using the technology. The Data Center business is also gaining traction, not only in India but also in the GCC region. International IT OS and Data Center Real estate has seen exponential growth in the previous year, with residential property sales scaling new highs amidst rising customer confidence, stable interest rates, and improved affordability. The surge in demand was witnessed in the upper middle class and luxury segments. New launches and sales in the top 7 cities have registered a growth of 25% and 31%, respectively, on a y-o-y basis. Residential Infrastructure Projects Segment Reports RONW (%) Financial Integrated Report 2-20 LARSEN & TOUBRO 35 6.2% 2023-24 OPM% International Domestic Hyderabad International Airport, Hyderabad, Telangana 2022-23 30000 70% 80163 7.0% 60000 90000 78% 68629 Infrastructure Projects Segment The Infrastructure segment registered revenue of 1,14,008 crore for FY 2023-24 - a growth of 29.8% over the previous year. The growth was mainly driven by the ramp-up of execution across multiple project sites. Revenue from international operations constituted 30% of the total compared to 22% in the previous year. The segment's operating margin for FY 2023-24 declined to 6.2% from 7.0% in the previous year. The decline is largely reflective of time and cost overruns in multiple jobs coupled with increased provision on contract assets and customer receivables. Discussion and Analysis Management Corporate Overview Phoenix H10, Hyderabad, Telangana Integrated Annual Report 2023-24 36 The Factories business offers comprehensive EPC solutions with single-point accountability, catering to the needs of sectors like automobile plants & test tracks, semiconductor electronics & solar PV manufacturing, glass & paint manufacturing, vaccine manufacturing, warehouses, and FMCG products The Airports business specialises in designing and constructing airport terminal buildings, along with their associated service structures. The business also provides integrated airport system solutions, including baggage- handling systems, passenger-flow monitoring, passenger boarding bridges, visual docking guidance systems, and other essential facilities Public Spaces, Airports & Factories SBG: This SBG consists of the following three businesses: The Public Space business undertakes design & execution of iconic projects like statues, museums, stadia, metro stations/depots, convention centres, malls, integrated multi-modal developments, etc., right from concept to commissioning on an engineering, procurement and construction (EPC) basis innovative formwork systems. The business' commitment to innovation is further amplified by the mechanised project execution, a robust network of seasoned consultants and reliable vendors, and a meticulously digitised project control framework. Its talented workforce, adept at navigating complex challenges, contributes significantly to the realisation of iconic structures both in India and overseas. The business is organised into the following Strategic Business Groups (SBGs): Driving the success of the business are dedicated engineering design centres, various competency cells, and The Buildings & Factories (B&F) business stands at the forefront of building urban infrastructure, offering end- to-end design-and-build turnkey solutions that seamlessly traverse the entire project lifecycle, from concept to commissioning. Its expertise extends across sectors such as airports, hospitals, stadia, retail establishments, educational campuses, IT parks, office towers, data centers, high-rise structures, industrial warehouses, test tracks, and other light factory structures. Overview Buildings & Factories The funds employed by the segment at 24,048 crore as on March 31, 2024, registered a decline of 2.2% vis-à-vis March 31, 2023, mainly on account of improved working capital management. Statutory □ AI NAMAA General Hospital at Oman 2,268 Interest paid buyback) 12,280 (Incl. tax and expenses on Buyback of equity shares (net) 808 Utilisation of Funds 613 3,605 and Finance 3,047 Interest Paid Services 4,217 Payment to minority interest 3,091 15,376 The total Group borrowings as at March 31, 2024, was lower at 1,14,040 crore compared to ₹1,18,513 crore as at March 31, 2023. The major decrease is in borrowings of the Financial Services, Hyderabad Metro and Nabha Particulars balances as at March 31, 2024, compared to the beginning of the year. There was a net increase of 133 crore in the cash Overall Financial Review crore Brief Summary of Performance at Standalone Level: 29,633 LARSEN & TOUBRO & Mining Machinery, Rubber Processing Machinery, E-commerce/digital platforms, and Data Centers. of Infrastructure Projects, Energy Projects, Hi-Tech Manufacturing, and Others. The Others segment comprises Realty, Smart World & Communication, Construction L&T's standalone financials reflect the performance II. L&T STANDALONE *The significant change in the Net Working Capital % of Sales for FY 2023-24 has been due to better collections and efficient working capital management. Lease Activity) 33 Dividend Paid Financial (excludes (2893) Decrease/(Increase) in cash Financial 10 10 ESOP Proceeds (Net) 4,984 (Excluding investments Capital % of 2739 (8955) Sale/(Purchase) of 25.9% Sales* Services & balance Corporate) 4,513 4,832 Repayment of borrowings ratio 4,210 3,793 Capital expenditure (Net) 6.2% 5.79 5.45 Interest Coverage (iv) 29,633 15,376 Source of Funds FY 2022-23 FY 2023-24 % Growth Fund Flow Statement crore Order Inflow 2,236 Capital expenditure (Net) Order Book 21,871 5,378 Sources of Funds 2,822 International 15% Share of 10 10 ESOP Proceeds 12% 23% PBDIT 9,295 9,685 (10)% 64,416 71,528 Net Worth 4,217 3,091 Dividend paid 19% 9,304 7,849 PAT 151 (352) Net investment/(Divestment) 4% 3,71,381 2,333 3,30,555 income Borrowings/(Repayment of Order Inflow International 8,294 7,264 Operating activities (2,027) 35% FY 2022-23 Particulars 14% 1,71,663 1,49,984 20% Share of FY 2023-24 4,232 Borrowings) Revenue 4,690 3,035 Treasury and dividend Revenue International investments 21% 17% Share of 4,645 (2,904) Sale/(Purchase) of Other 14% 1,26,236 1,10,501 Order Book 12.0% □ MAHSR C3 High-Speed Railway Stations & Depot □ Paint Manufacturing Plant in Kharagpur for Birla Paints 9000 crore Segment-wise PBIT Segment-wise composition of PBIT for FY 2023-24 is represented below: Profit Before Interest and Tax LARSEN & TOUBRO 8000 31 The Group's operating profit at ₹ 23,494 crore for FY 2023-24 registered a growth of 13.2% y-o-y, largely due to higher business volumes. The EBITDA margin for the year, however, declined by 70 bps and is at 10.6%. Sales and administration expenses at 10,419 crore increased by 19.0% over the previous year. This represents 4.7% of revenue, which is almost in line with the previous year. Staff expenses for FY 2023-24 at 41,171 crore increased by 10.6% over the previous year, reflecting a combination of manpower ramp-up and salary revisions. Although, as a percentage of revenue, it decreased by ~170 bps during FY 2023-24, consequent upon higher revenue. The Group continues to focus on productivity improvements, digitalisation, and manpower optimisation across its businesses. Manufacturing, Construction and Operating (MCO) expenses for FY 2023-24 at 1,46,029 crore increased by 25.2% over the previous year. These expenses mainly comprise the cost of construction materials, raw materials and components, sub-contracting expenses, and interest costs in the Financial Services business. This represents 66.0% of revenue as compared to 63.6% in the previous year, mainly on account of cost overruns encountered in a few projects and changes in job mix. Operating Profit (PBDIT) ■Staff Expenses The impact of additional execution costs incurred in the Infrastructure segment and higher provisions on contract assets and customer receivables impacted the Company's overall margin. At the same time, cost savings in projects of the Energy segment, higher NIM in Financial Services, and sale of commercial property along with improved ridership in Hyderabad Metro, partially mitigated the impact. Depreciation and Amortisation Charge Depreciation and amortisation charges for FY 2023-24 increased to 3,682 crore from 3,502 crore in the previous year, registering an increase of 5.1%, mainly reflective of higher CapEx spending in recent years. Mfg., Construction & Operating Expenses Sales, Administration & Other Expenses 7000 5000 Services IT & Technology Hi-Tech Manufacturing 995 Energy Projects 2067 2701 Infrastructure Projects 5140 5721 FY 2023-24 6000 FY 2022-23 Overall Financial Review 0 1000 2000 3000 4000 …..I... 2023-24 2022-23 0 44916 8765 29571 6271 Others Development Projects 5029 13109 Financial Services 12575 IT & Technology Services Hi-Tech Manufacturing 7161 Energy Projects 24956 Infrastructure Projects 87823 114008 FY 2023-24 FY 2022-23 41789 5628 8493 During the year, all the segments registered growth over the previous year, with the Infrastructure segment leading the pack. 50000 116615 146029 100000 37214 150000 8758 41171 20753 10419 200000 23494 250000 crore Operating Expenses and PBDIT Operating Expenses and PBDIT 7215 Financial Services 2259 Development Projects 392 Others 2.8% 1.11 1.14 Gross Debt (i) FY 2022-23 FY 2023-24 Equity Ratio Particulars crore FY 2022-23 FY 2023-24 % Growth In compliance with the requirement of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the key financial ratios of the Group have been provided hereunder along with the explanation only for the significant changes, i.e., change of 25% or more as compared to the previous financial year: Details of significant changes in key financial ratios along with explanation: Power, partly offset by a higher level of borrowing at the Parent level. At a group level, the gross debt-to-equity ratio decreased to 1.11:1 as at March 31, 2024, from 1.14:1 as at March 31, 2023. However, the net debt-to-equity ratio marginally increased to 0.64:1 as at March 31, 2024, from 0.62:1 as at March 31, 2023. Consolidated Fund Flow Statement Sr. No Particulars Operating Activities 22,777 18,266 (iii) Income revenue 2,634 1,767 Treasury and Dividend % of net 1,000 2,670 Net Divestment -6.1% 10.6% 11.3% PBDIT as (ii) Consequently, there was a net decrease of ₹4,984 crore in the cash balances as of March 31, 2024, compared to the beginning of the financial year. 0 Borrowing) during FY 2023-24. in business volumes. During the year, additional funds were generated mainly from the divestment of commercial property in Hyderabad Metro, treasury and dividend income and investment sales. were higher by 10.6% over 3,207 crore for the previous year. The increasing average borrowing at a group level was partly offset by the reduction in the borrowing in Hyderabad Metro. The interest cost for FY 2023-24 was higher by 30 bps as compared to the previous year. 3,546 crore The interest expenses for FY 2023-24 at Finance Cost from treasury operations. Other income at 4,158 crore improved by 42.0% over 2,929 crore for the previous year, reflective of gain on sale/fair valuation of investments and efficient treasury operations. This mainly consists of interest, dividend, and gains Tax Expense Other Income 1508 1015 3028 7659 1140 1103 The segment-wise PBIT registered improvement over the previous year across all businesses. The PBIT of Development Projects is higher during the year primarily due to a non-recurring gain on the sale of commercial property in Hyderabad Metro. Income Tax charge for FY 2023-24 was higher at 4,947 crore by 10.3% compared to 4,484 crore in the previous year on higher taxable income. Exceptional Items Exceptional items during the year mainly comprise gain on the divestment of stake in L&T Transportation Infrastructure Limited, a subsidiary of L&T IDPL and reversal of impairment of investment in L&T IDPL. The previous year mainly included a gain on divestment of the Mutual Fund business Statements Reports Report Discussion and Analysis Financial Statutory Integrated Management Corporate Overview Integrated Annual Report 2023-24 32 Cash flow from Operations (including change in loans and advances towards financing activities) for FY 2023-24 decreased to 18,266 crore as compared to 22,777 crore in the previous year, mainly due to build-up of customer outstanding and higher contract assets from an increase Liquidity & Gearing The Consolidated Net Worth, as on March 31, 2024, at 86,359 crore, reflects a net decrease of 2,967 crore, as compared to the position as on March 31, 2023. The Return on Net Worth (RONW) for FY 2023-24 was higher at 14.9%, compared to 12.2% in the previous year, mainly on account of higher profits and share buyback. of the Financial Services, partially offset by a one-time charge on remeasurement of the wholesale loan assets of the Financial Services segment at fair value. Consolidated Profit after Tax and EPS Consolidated Profit after Tax (PAT) at 13,059 crore for FY 2023-24 increased by 24.7% over the previous year at 10,471 crore. The increase is mainly due to growth in revenues and improved treasury operations. Consolidated Basic Earnings per Share (EPS) for FY 2023-24 at 93.96 improved over the previous year at ₹ 74.51. Return on Consolidated Net Worth Funds were utilised mainly for repayment of borrowings of 4,513 crore, capital expenditure of 4,210 crore, and payment of dividend of 4,217 crore. Further, funds were utilised for the buyback of equity shares 12,280 crore (including tax and expenses on buyback) and net interest payment of 3,605 crore (attributable to the level of □ Paint Polymer Manufacturing Plant in Gujarat for Asian Paints 20000 60000 73788 8956 3%, (4%) 5620 2%, (2%) Order Inflow Composition Domestic ■International 5%, (7%) 24%, (13%) 14278 4%, (5%) 13109 2022-23 0 44473 crore 15%, (18%) 60000- L142589 2023-24 19.8% Order Book crore The year witnessed the booking of some noteworthy orders in the Urban Transit space, including another package for Mumbai-Ahmedabad High-Speed Rail in the Heavy Civil business, a few orders in the residential vertical of Buildings & Factories business, multiple renewable energy projects from the Middle East under the Power Transmission & Distribution business, Electrification Work package for Mumbai-Ahmedabad High-Speed Rail, and a road project in Mumbai in Transportation Infrastructure, a couple of orders in ferrous metal space, a major order from Ministry of Defence in the Precision Engineering & Systems business, a mega order in the Offshore vertical, and few ultra-mega orders in the Onshore vertical of the Hydrocarbon business. With higher ordering in the Energy segment primarily due to CapEx acceleration in the Middle East region, the contribution of the Infrastructure segment in the overall order inflow has decreased to 47% from 51% in the previous year, while continuing to remain the largest segment in the Company's business portfolio. Review Overall Financial 47% (51%) LARSEN & TOUBRO L&T Group achieved order inflows of ₹3,02,812 crore during FY 2023-24, registering a growth of 31.4% over the previous year. Growth was largely driven by the strong investment momentum in the Middle East region, further complemented by the Government of India's CapEx push. The buoyancy in Middle East orders led to an increase in the share of international order inflow to 54% from 38% in the previous year. Total Order Inflow: *3,02,812 crore during the year 2023-24 [Figures in brackets relate to previous year] ■Financial Services ■Development Projects ■Others ■ IT & Technology Services ■Hi-Tech Manufacturing ■Infrastructure Projects ■Energy Projects 29 46% 139700 62% 144005 OVERALL FINANCIAL REVIEW 2023-24 Statements Reports Report Discussion and Analysis Financial I. L&T CONSOLIDATED Statutory Management Corporate Overview Integrated Annual Report 2023-24 38 □ Food Processing Plant in Ahmedabad for JR Simplot India Paint Manufacturing Plants for Birla Paints at Panipat, Ludhiana and Cheyyar, Tamil Nadu Key Projects Commissioned: Integrated Against the backdrop of domestic economic resurgence amidst global volatility, the Group has recorded a healthy performance across its businesses, spread across diverse sectors and geographies. The Company has continued its focus towards the goal of maximising shareholder value by utilising technology towards improving productivity and efficiency, timely & profitable execution of its record order book, containing working capital along with better funds management, and divesting assets identified for sale. During the year, the Company successfully completed its first-ever buyback of equity shares in alignment with the long-term Lakshya 2026 plan to enhance shareholder value. Additionally, as part of the strategy to exit non-core businesses, on April 10, 2024, the Company completed the divestment of its entire shareholding in L&T Infrastructure Development Projects Limited, a joint venture primarily engaged in the development and operation of toll roads and a power transmission asset. Further, the Company also sold its entire stake in L&T Infrastructure Engineering Limited (LTIEL) to STUP Consultants Private Limited, a subsidiary of Assystem SA of France, to remain focussed on its core offerings. During the year, the Company successfully commissioned its first indigenously manufactured electrolyser at the Green Hydrogen Plant at A. M. Naik Heavy Engineering Complex in Hazira, Gujarat. This pioneering accomplishment signifies L&T Electrolysers Limited's foray into domestic electrolyser manufacturing, underscoring the Company's steadfast dedication to propelling sustainable energy solutions. The Company also launched its first Data Center Pilot project at Panvel, Mumbai, with a capacity of ~1.4 MW. The Group has also forayed into fabless semiconductor chip design during the year by incorporating L&T Semiconductor Technologies Limited (LTST), a wholly- owned subsidiary. A fabless semiconductor company specialises in the design and creation of semiconductor chips without owning or operating semiconductor manufacturing facilities. The financial services business of the Group, during the year, also concluded the merger of L&T Finance Holdings Ltd. and its wholly owned subsidiaries, viz. L&T Finance Ltd., L&T Infra Credit Ltd. and L&T Mutual Fund Trustee Ltd., resulting in the creation of a single lending entity - L&T Finance Holdings. Further, the name of L&T Finance Holdings Ltd. has been changed to L&T Finance Ltd. This merger leads to the creation of a simplified 'Single Lending Entity' and will create internal synergies, superior governance, and newer avenues for growth. 120000 38% 86523 180000 54% 163112 230528 240000 300000- 302812 31.4% Order Inflow 360000 crore Order Inflow and Order Book As at March 31, 2024, the L&T Group comprised 86 subsidiaries, 5 associate companies, 26 joint ventures, and 33 jointly held operations. Out of the total 150 entities, 36 companies belong to the listed subsidiaries, and 20 are associated with Development Projects. The rest of the entities in the Group are mostly strategic extensions of the traditional businesses, viz. EPC Contracts and Hi-Tech Manufacturing, to enable access to new geographies, technology, and nuanced business segments. As at March 31, 2024, the order book is at a record level of 4,75,809 crore, thereby providing a multi- year revenue visibility for the Group. The infrastructure segment continues to dominate with a share of 65% of the consolidated order book. The order book registered a growth of 19.8% on a y-o-y basis, mainly with the receipt of some high-value orders during the year. Around 77% of the total order book comprises orders received from Indian Central and State Governments (including local authorities) and State-owned Enterprises (both domestic and international). The private sector has marginally declined and has a share of 23% of the total order book as on March 2024, as against 25% as on March 2023. Of the domestic order book, 29% of the orders are funded by multilateral agencies. The share of the international order book increased from 28% to 38% on account of the intake of higher international orders during the year. Consolidated Revenue from Operations L 65%, (72%) 311665 L&T Group recorded revenue of 2,21,113 crore during FY 2023-24, registering a growth of 20.6%. The growth was mainly achieved with the pick-up of execution momentum in project and manufacturing businesses. The composition of international revenue at the group level is at 43% in FY 2023-24 compared to 38% in the previous year. Manufacturing ■ Hi-Tech ■Energy Projects ◉ Others ■Infrastructure Projects 31975 7%, (7%) International 2023-24 Domestic 2022-23 0 13981 3%, (3%) Total Order Book: 4,75,809 crore as at March 31, 2024 [Figures in brackets relate to previous year] 80000 Segment-wise Revenue Statements Reports Report Discussion and Analysis Financial Statutory Integrated Management Corporate Overview 100000 120000 crore Integrated Annual Report 2023-24 40000 40000 62% 114554 126027 183341 221113 20.6% 200000 300000 28% 111779 95086 43% 240000 400000 397033 crore 475809 500000 Revenue from Operations 180861 38% 160000- 38% 68787 294948 62% 80000 Order Book Composition 30 25%, (18%) 118189 crore International Domestic As at 31-03-2024 As at 31-03-2023 0 100000 72% 285254 200000 120000- 57% Net Working 16.1% 2008-09 to 2011-12, 2017-18 31 2022-23 2023-24 Note EXPENSES: Total Income Other income (net) Revenue from operations INCOME: Particulars crore Standalone Statement of Profit and Loss for the year ended March 31, 2024 Standalone Statement of Profit and Loss LARSEN & TOUBRO 395 (DIN 01915274) Independent Director P. R. RAMESH Company Secretary & Compliance Officer Membership No. FCS3939 SIVARAM NAIR A (DIN 00019798) 126235.85 Whole time Director & Chief Financial Officer 32 110500.98 4034.95 114535.93 Other manufacturing, construction and operating expenses (2930.73) 411.83 Changes in inventories of finished goods, stock-in-trade and work-in-progress 24353.62 30750.87 Sub-contracting charges 4260.17 3613.78 Stores, spares and tools consumed 1076.29 1078.54 Purchase of stock-in-trade 38098.69 43031.68 Construction materials consumed 13163.05 11621.48 Cost of raw materials components consumed 33 Manufacturing,construction and operating expenses 5340.60 131576.45 13724.86 R. SHANKAR RAMAN Chairman & Managing Director 1305.62 1832.37 1651.57 32277.37 39383.81 28 27 Current tax liabilities (net) Provisions Other current liabilities 54795.85 55686.05 4117.92 4071.50 26 Other financial liabilities 41028.66 39975.11 Due to others 751.71 871.22 799.07 (DIN 02255382) Sub-total - Current liabilities TOTAL LIABILITIES S. N. SUBRAHMANYAN Mumbai, May 8, 2024 Membership No. 046930 Partner RUPEN K. BHATT by the hand of Firm's Registration No. 117366W/W-100018 Chartered Accountants For DELOITTE HASKINS & SELLS LLP In terms of our report attached 1 to 64 NOTES FORMING PART OF THE FINANCIAL STATEMENTS 30 COMMITMENTS (capital and others) 29 172424.49 89704.66 998.48 100896.54 110866.65 175282.69 CONTINGENT LIABILITIES TOTAL EQUITY AND LIABILITIES 98027.05 Liabilities associated with the group(s) of assets classified as held for sale Due to micro enterprises and small enterprises 12373.24 90394.33 Statutory Integrated Report Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 396 (25.37) (25.37) 10.43 10.43 Carried forward - Other comprehensive income (33.90) 8.53 (3.51) Income tax (expenses)/income on remeasurments of the defined benefits plan 13.94 Gain (loss) on remeasurement of the defined benefits plan Items that will not be reclassified to Profit or Loss: A 7848.97 9304.33 1983.73 2011.98 Financial (351.03) Reports Standalone Statement of Profit and Loss for the year ended March 31, 2024 (contd.) Income tax (expenses)/income on exchange differences in (14.12) (6.93) Exchange differences in translating the financial statements of foreign operations (293.93) 132.58 87.20 (39.34) Income tax (expenses)/income on debt instruments through Other comprehensive income (381.13) 171.92 Debt instruments through Other comprehensive income B Items that will be reclassified to Profit and Loss: (25.37) 10.43 2022-23 2023-24 Note crore Brought forward - Other comprehensive income Particulars Statements 104233.04 2334.76 44(a) 44(a) 10868.32 Profit before exceptional items and tax 104703.23 120708.13 Total Expenses 1371.64 1751.01 2125.23 2405.83 36 2513.81 3453.84 8298.22 8864.41 35 34 mmmm Depreciation, amortisation, impairment and obsolescence Finance costs Sales, administration and other expenses Employee benefits expense 9832.70 2205.00 (193.02) Exceptional items before tax (net) [gain/(loss)] 59 9832.70 Other comprehensive income Net profit after tax Total tax expenses Deferred tax Current tax Tax expenses: 11316.31 Profit before tax 447.99 Exceptional items (net of tax) 138.48 Total tax expense on exceptional items 117.65 44(a) Deferred tax 20.83 44(a) Current tax Tax expense on exceptional items: 586.47 59 translating the financial statements of foreign operations 45 Trade payables: Interest overdue 341.15 overdue 1730.38 1. Principal amount No. of cases. (d) In respect of following loans granted by the Company, which have been overdue for more than 90 days at the balance sheet date, as explained to us, the Management has taken reasonable steps for recovery of the principal and interest. Refer to Note No. 63(a)(ii) to the Standalone Financial Statements. 641 days Interest on Working Capital and Project Funding Loan remains outstanding as on March 31, 2024 641 days Principal on Working Capital and Project Funding Loan remains outstanding as on March 31, 2024 168.05 June 30, 2022 Interest on Working Capital and Project Funding Loan L&T Special Steel & Heavy Forgings Pvt. Ltd. 1730.38 June 30, 2022 Principal on Working Capital and Project Funding Loan L&T Special Steel & Heavy Forgings Pvt. Ltd. Extent of Delay Remarks, if any Amount Due Date in crore Nature Name of the entity In respect of loans granted by the Company, the schedule of repayment of principal and payment of interest has been stipulated and the repayments of principal amounts and receipts of interest are regular as per stipulation, except for the following: (c) Total overdue Remarks, if any (b) The investments made, guarantees provided and the terms and conditions of the grant of all the above-mentioned loans and guarantees provided, during the year are, in our opinion, prima facie, not prejudicial to the Company's interest. 2071.53 Principal and Interest on Working Capital and Project Funding Loan remains outstanding as on March 31, 2024 The Company has not accepted any deposit or amounts which are deemed to be deposits. Hence, reporting under clause (v) of the Order is not applicable. (v) (iv) The Company has complied with the provisions of Sections 185 and 186 of the Act, to the extent applicable, in respect of grant of loans, making investments and providing guarantees and securities during the year, as applicable. The Company has not granted any loans either repayable on demand or without specifying any terms or period of repayment during the year. Hence, reporting under clause (iii)(f) is not applicable. (f) 17.46% 176.94 Refer to Note No. 63(a)(i) to the Standalone Financial Statements. *The same has been repaid before the due date. 12.49% Percentage of the aggregate to the total loans or advances granted during the year Aggregate amount of existing loans renewed. 126.56 L&T Sapura Shipping Private Limited (Shareholder's Loan) due on December 31, 2023 extended upto December 31, 2024 (USD 21,260,000) L&T Sapura Shipping Private Limited (Bridge Loan) due on September 30, 2023 extended upto March 31, 2024 (USD 15,240,000)* Name of the Party crore (e) During the year loans aggregating to 303.50 crore fell due has been renewed. The details of such loans that fell due and were renewed during the year are stated below: Independent Auditor's Report LARSEN & TOUBRO 389 crore Refer to Note No. 63(a)(ii) to the Standalone Financial Statements. (vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Act. We have broadly reviewed the cost records maintained during the year by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended and prescribed by the Central Government under sub-section (1) of Section 148 of the Act, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained by the company. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete. The Company has not provided any advances in the nature of loans to any other entity during the year. NIL NIL 400.00 1013.26 Others Associates Joint Venture Subsidiaries Aggregate amount granted / provided during the year: Security crore Guarantees Loans Particulars (a) The Company has provided loans during the year and details of which are given below: (iii) The Company has made investments in, provided guarantee and granted loans, secured or unsecured, to companies or any other parties during the year, in respect of which: Statements Reports Report Financial Statutory Integrated NIL *The amounts reported are at gross amounts (including interest accrued), without considering provisions made and includes investments made in debt instruments issued by subsidiaries. NIL NIL NIL NIL Others NIL NIL NIL NIL NIL NIL Joint Venture Associates NIL NIL 623.89 Subsidiaries above cases* Balance Outstanding as at balance sheet date in respect of NIL NIL NIL NIL NIL NIL 25 (vii) In respect of statutory dues: (b) There were no undisputed amounts payable in respect of Provident Fund, Employees' State Insurance, Income-tax, Goods and Service Tax, Sales Tax, duty of Custom, duty of Excise, Value Added Tax, cess and other material statutory dues in arrears as at March 31, 2024 for a period of more than six months from the date they became payable. 20 Other financial liabilities 112.25 Lease liability 11931.14 19 Borrowings 71527.95 64416.04 281.10 71246.85 64141.11 18 274.93 17 As at 31-3-2023 As at 31-3-2024 Note crore Financial liabilities Non-current liabilities Liabilities 75.81 Total equity 9390.85 50.12 108.41 Other non-current liabilities 137.32 158.89 5580.88 3179.36 4864.65 5744.68 24 23 22 Lease liability Current maturities of long-term borrowings 10193.40 12839.60 9549.38 636.97 7.05 22.67 12119.20 697.73 22 21 Borrowings Financial liabilities: Current liabilities Sub-total - Non-current liabilities Provisions (a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees' State Insurance, Income-tax, Goods and Service Tax, Sales Tax, duty of Custom, duty of Excise, Value Added Tax, cess and other material statutory dues applicable to it to the appropriate authorities. Other equity Equity 16 Other current assets Commissioner (Appeals) Unpaid 31.31 40.98 2017-18 to 2020-21, 2022-24 Involved amount relates Amount Amount Period to which Forum where Dispute is Pending Appellate authority crore Dispute regarding question of law, Disallowance of CENVAT credit, short payment of service tax, Valuation disputes, dispute regarding classification of services/goods, disallowances of excise duty exemption, Non-Maintenance of Separate Books of Accounts, Export rebate disallowance, and other matters. Dispute of questions of law, Classification dispute, Tax levied on goods-in-transit, labour charges & disallowance of input tax credit on deemed export sales Disallowance of input tax credits, credits claimed in Tran-1, Mismatch of Return, GST rate dispute and other matters Disallowance of input tax credits, credits claimed in Tran-1, Mismatch of Return, GST rate dispute and other matters The Central Excise Act, 1944, Service Tax under Finance Act, 1994 and Customs Act, 1962 Goods and Services Tax Act, 2017 Nature of Dues Name of Statute 390 (c) Details of statutory dues referred to in sub-clause (a) above which have not been deposited as on March 31, 2024 on account of disputes are given below: 16 Equity share capital 57096.24 Sub-total-Current assets EQUITY AND LIABILITIES: Particulars Standalone Balance Sheet as at March 31, 2024 (contd.) Financial Statements Reports Report Statutory Integrated Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 394 172424.49 175282.69 TOTAL ASSETS 2341.02 1177.91 Dispute regarding questions of law, classification dispute, sales in transit, high sea sales, non-submission of C forms & E1 forms, disallowance of ITC, valuation of goods, Group(s) of assets classified as held for sale 122199.57 123491.34 57128.31 Management Discussion and Analysis 1.74 (5.19) 152.81 3119.35 2409.78 Demand arising out of order under section 201(1)/201(1A) of the Income Tax Act (viii) There were no transactions relating to previously unrecorded income that were surrendered or disclosed as income in the tax assessments under the Income Tax Act, 1961 (43 of 1961) during the year. (ix) In respect of borrowings: (a) In our opinion, during the year, the Company has not defaulted in the repayment of loans or other borrowings or in the payment of interest thereon to any lender during the year. (b) The Company has not been declared willful defaulter by any bank or financial institution or government or any government authority. (c) The Company has not taken any term loan during the year and there are no unutilized term loans at the beginning of the year and hence, reporting under clause (ix)(c) of the Order is not applicable. (d) On an overall examination of the financial statements of the Company, funds raised on short-term basis have, prima facie, not been used during the year for long-term purposes by the Company. (e) On an overall examination of the financial statements of the Company, the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries or associates or joint ventures. (f) The Company has not raised loans during the year on the pledge of securities held in its subsidiaries or joint ventures or associate companies. 392 Integrated Annual Report 2023-24 (x) In respect of issue of securities: Corporate Overview Management Discussion and Analysis 719.64 Integrated 2009-10, 2011-12, 2012-13, 2019-20 2011-12, 2014-15 to 2021-22 Income Tax Appellate Tribunal (ITAT) CIT(A) Amount amount relates 1989-00, 2001-18 Involved Unpaid 3316.95 3124.99 2006-09, 2010-17, 2015-16 113.28 98.37 Additional Commissioner/ Joint Commissioner/ Commissioner/ Assessing Officer CAG 2015-16 1.10 1.10 Special Objection Hearing Authority 2012-13 0.05 0.05 Income Tax Act, 1961 Demands arising out of Regular Assessment/Reassessment Amount Statutory Report UDIN: 24046930BKEZVP9659 Place: Mumbai Date: May 08, 2024 393 LARSEN & TOUBRO Standalone Balance Sheet as at March 31, 2024 Particulars ASSETS: Non-current assets Property, plant and equipment Capital work-in-progress Investment property Standalone Balance Sheet crore Note As at 31-3-2024 As at 31-3-2023 223 Goodwill Other Intangible assets 4 Intangible assets under development (Membership No. 046930) Financial Partner (Firm's Registration No. 117366W/W-100018) Reports Statements (a) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) during the year and hence reporting under clause (x)(a) of the Order is not applicable. (b) During the year, the Company has not made any preferential allotment or private placement of shares or convertible debentures (fully or partly or optionally) and hence, reporting under paragraph (x)(b) of the Order is not applicable to the Company. (xi) In respect of fraud: (a) No fraud by the Company and no material fraud on the Company has been noticed or reported during the year. (b) No report under sub-section (12) of section 143 of the Companies Act has been filed in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government, during the year and upto the date of this report. We have taken into consideration, the whistle blower complaints received by the company during the year and upto the date of this report and provided to us, when performing our audit. (xii) The Company is not a Nidhi Company. Therefore, reporting under clause 3(xii) of the Order is not applicable. (xiii) In our opinion, the Company is in compliance with Section 177 and 188 of the Act, where applicable, for all transactions with the related parties undertaken during the year and the details of such related party transactions have been disclosed in the Standalone Financial Statements as required by the applicable accounting standards. (xiv) In respect of internal audit: (a) In our opinion the Company has an adequate internal audit system commensurate with the size and the nature of its business. (b) We have considered, the internal audit reports for the year under audit, issued to the Company during the year and till date, in determining the nature, timing and extent of our audit procedures. (xv) In our opinion, during the year the Company has not entered any non-cash transactions with its Directors or persons connected to its Directors and hence provisions of section 192 of the Act are not applicable. (xvi) (a) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Hence, reporting under clause (xvi)(a), (b) and (c) of the Order is not applicable. (b) The Group has more than one Core Investment Company (CIC) as part of the group. There are two CIC forming part of the group. (xvii) The Company has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year. (xviii) There has been no resignation of the statutory auditors of the Company during the year. (xix) On the basis of the financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the financial statements and our knowledge of the Board of Directors and Management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report indicating that Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due. (xx) The Company has fully spent the required amount towards Corporate Social Responsibility (CSR) and there are no unspent CSR amount for the year requiring a transfer to a Fund specified in Schedule VII to the Companies Act or special account in compliance with the provision of sub-section (6) of section 135 of the said Act. Accordingly, reporting under clause (xx) of the Order is not applicable for the year. For DELOITTE HASKINS & SELLS LLP Chartered Accountants Rupen K. Bhatt Right-of-use assets Period to which Assistant Commissioner/ Deputy Commissioner/ Assistant Joint Commissioner/ Assistant Commissioner/ Deputy Commissioner/ Joint Commissioner 234.30 248.96 2017-23 Integrated Annual Report 2023-24 398 224.01 (130.91) 71246.85 (21.47) 20.42 26201.60 35863.32 74.62 (25.77) 260.00 8770.19 10.84 30.41 (3091.42) (3091.42) 30.41 (3.94) (118.23) 122.17 68.13 68.13 10.22 41.23 (41.23) Dispute regarding questions of law, classification dispute, sales in transit, high sea sales, non-submission of C forms & E1 forms, disallowance of ITC, valuation of goods and other matters Supreme Court of India Dispute regarding questions of law, sales in transit, high sea sales, non-submission of C forms & E1 forms, disallowance of ITC, valuation of goods, non submission of Forms, classification disputes, inter-state sale turnover, Rate of tax of declared goods, Labour & service charges disallowed, Disallowance of exemptions claimed for imports & Sales in transit, Road permit issue and other matter 2017-23 128.23 Dispute regarding questions of law, classification dispute, sales in transit, high sea sales, non-submission of C forms & E1 forms, disallowance of ITC, valuation of goods and other matters Dispute regarding question of law, Disallowance of CENVAT credit, short payment of service tax, Valuation disputes, dispute regarding classification of services/goods, disallowances of excise duty exemption, Non-Maintenance of Separate Books of Accounts, Export rebate disallowance, Service tax demand import of service for GDR, and other matters. Dispute regarding question of law, Disallowance of CENVAT credit, short payment of service tax, Valuation disputes, dispute regarding classification of services/goods, disallowances of excise duty exemption, Non-Maintenance of Separate Books of Accounts, Export rebate disallowance, and other matters. Differential Custom Duty Dispute regarding question of law, Disallowance of CENVAT credit, short payment of service tax, Valuation disputes, dispute regarding classification of services/goods, disallowances of excise duty exemption, Non-Maintenance of Separate Books of Accounts, Export rebate disallowance, and other matters. Nature of Dues The Central Sales Tax Act, Entry tax, Local Sales Tax Act, Works Contract Tax Act and Goods & Services Tax Act under Finance Act, 1994 and Customs Act, 1962 Act, 1944, Service Tax The Central Excise Name of Statute Statements Reports Report Discussion and Analysis Financial Statutory Integrated Management Corporate Overview Integrated Annual Report 2023-24 10.89 1999-00, 2011-12 to 2015-16 137.96 crore crore Period to which Appellate Board 2008-15 0.21 0.21 Sales Tax/VAT Tribunal 1991-2018, 1994-99, 2003-16 717.64 556.44 391 LARSEN & TOUBRO Independent Auditor's Report Name of Statute The Central Sales Tax Act, Entry tax, Local Sales Tax Act, Works Contract Tax Act and Goods & Services Tax Act Nature of Dues Dispute regarding questions of law, sales in transit, high sea sales, non-submission of C forms & E1 forms, disallowance of ITC, valuation of goods, non submission of Forms, classification disputes, inter-state sale turnover, Rate of tax of declared goods, Labour & service charges disallowed, Disallowance of exemptions claimed for imports, Road permit issue and other matter Dispute regarding question of law, Disallowance of CENVAT credit, short payment of service tax, Valuation disputes, dispute regarding classification of services/goods, disallowances of excise duty exemption, Non-Maintenance of Separate Books of Accounts, Export rebate disallowance, sales in transit, high sea sales, non-submission of C forms & E1 forms, disallowance of ITC, valuation of goods, and other matters Dispute regarding questions of law, classification dispute, sales in transit, high sea sales, non-submission of C forms & E1 forms, disallowance of ITC, valuation of goods and other matters Dispute regarding questions of law, classification dispute, sales in transit, high sea sales, non-submission of C forms & E1 forms, disallowance of ITC, valuation of goods and other matters Demands arising out of Regular Assessment/Reassessment Forum where Dispute is Pending Joint commissioner Appeals/ Additional Commissioner Appeals/ Deputy Commissioner Appeals/Assistant Commissioner Appeals/ Commissioner Appeals 1999-2016, 2000-16 Forum where Dispute is Pending High Court 164.81 1986-99, 1999-01, Amount Amount amount relates --- 10.22 Involved 50.01 Unpaid 11.00 CESTAT/Department 2002-09, 2011-20 1485.01 1406.85 Additional Commissioner Appeal, Appellate DC, Commissioner Appeals, Deputy Commissioner Appeals, Deputy Commissioner DGFT 2006-10, 2013-18, 2021-22 137.63 136.54 Supreme Court of India 2016-17, 2021-22 2006-18 1.05 720.74 0.79 699.74 High Court 180.51 3.55 4 54(b) Investments 281.10 6.25 274.93 1,40,54,82,190 1,37,46,68,619 Issued, subscribed and fully paid up equity shares outstanding at the end of the year 0.09 281.01 * crore 2022-23 Number of shares 1,40,50,29,123 4,53,067 281.10 0.08 4,36,429 3,12,50,000 shares 1,40,54,82,190 * crore 2023-24 Number of Particulars A. Equity share capital Standalone Statement of Changes in Equity for the year ended March 31, 2024 Standalone Statement of changes in Equity LARSEN & TOUBRO 397 P. R. RAMESH Independent Director (DIN 01915274) Company Secretary & Compliance Officer Membership No. FCS3939 B. Other equity SIVARAM NAIR A Issued, subscribed and fully paid up equity share outstanding at the beginning of the year Add: Shares issued on exercise of employee stock options during the year Less: Shares extinguished on buy-back Balance as at 1-4-2022 premium share Securities Employee Capital redemption Capital reserve on business combination reserve Capital Debt Items of Other comprehensive income Reserves and surplus- crore Balance as at 31-3-2023 Dividend paid for previous year Employee share options (net) Transfer from/to general reserve/retained earnings during the year Transfer on account of exercise of employee share options Transfer to non-financial assets/liability Issue of equity shares on exercise of employee share options Total comprehensive income for the year (a+b) Other comprehensive income (b) Profit for the year (a) Particulars reserve Whole time Director & Chief Financial Officer (DIN 00019798) (DIN 02255382) Other comprehensive income for the year (net of tax) 7396.47 9258.08 (452.50) (46.25) (0.04) 0.09 (0.06) 0.02 0.12 (0.03) (122.59) (184.16) 10.30 50.26 Income tax (expenses)/income on cost of hedging reserve Cost of hedging reserve gains/(losses) on hedging instruments in a cash flow hedge Income tax (expenses)/income on effective portion of (132.89) (234.42) Effective portion of gains/(losses) on hedging instruments in a cash flow hedge (10.57) Total comprehensive income for the year R. SHANKAR RAMAN Earnings per share (EPS) of 2 each: Diluted earnings per equity share (*) S. N. SUBRAHMANYAN Chairman & Managing Director Mumbai, May 8, 2024 Membership No. 046930 Partner RUPEN K. BHATT by the hand of Firm's Registration No. 117366W/W-100018 Chartered Accountants For DELOITTE HASKINS & SELLS LLP In terms of our report attached 1 to 64 NOTES FORMING PART OF THE FINANCIAL STATEMENTS 2.00 2.00 55.81 66.89 49 55.85 66.95 49 Face value per equity share (*) Basic earnings per equity share (*) Financial assets: options (net) General Retained reserve earnings 596.84 27036.97 3306.81 407.22 31904.67 30751.00 44(d) 1587.12 1539.14 3241.03 2290.16 8 1417.29 1592.87 50613.44 47883.90 9 3520.97 3428.56 Financials assets Investments 10 579.06 16813.34 30728.77 422.59 Loans Other financial assets Deferred tax assets (net) Current tax receivable (net) Other non-current assets Sub-total - Non-current assets Current assets Inventories 9203.17 8570.70 1397.04 1938.38 1161.26 568.57 47.29 47.29 152.33 146.81 26.63 16.39 475.61 5 6 7 Debenture redemption 20224.29 11 .......- (25.37) 7848.97 7848.97 66833.04 163.02 278.51 31131.14 (10.90) 89.38 138.65 26079.43 (25.77) 260.00 8718.74 10.84 sive income comprehen- reserve reserve Other reserve equity Hedging through Total other instruments Foreign currency translation (10.57) 7823.60 (10.57) (122.63) (293.93) Trade receivables (122.63) (452.50) 36961.55 33152.58 Cash and cash equivalents 12 3939.21 3802.49 Other bank balances 13 829.98 767.15 Loans 14 63.04 168.29 Other financial assets 15 4267.01 3527.90 62874.13 61642.70 7396.47 (293.93) Corporate Overview 39 Non submission of Forms, inter-state sale turnover, Rate of tax of declared goods, Labour & service charges disallowed, Disallowance of exemptions claimed for imports & Sales in transit, Road permit issue and other matter Chartered Accountants Firm's Registration No. 117366W/W-100018 by the hand of RUPEN K. BHATT Partner Membership No. 046930 For DELOITTE HASKINS & SELLS LLP Mumbai, May 8, 2024 Chairman & Managing Director (DIN 02255382) R. SHANKAR RAMAN Whole time Director & Chief Financial Officer (DIN 00019798) SIVARAM NAIR A S. N. SUBRAHMANYAN In terms of our report attached 64141.11 1.67 23.28 94.93 Special dividend paid during the year (843.39) (843.39) Dividend paid for previous year (3373.56) (3373.56) Balance as at 31-03-2024 10.84 (25.77) 266.25 50.56 125.69 22715.19 40961.13 (26.66) 62.21 Company Secretary & Compliance Officer Membership No. FCS3939 (2.86) (20.42) 94.93 P. R. RAMESH Independent Director (DIN 01915274) LARSEN & TOUBRO (2.06) 7.92 (DIN 02255382) S. N. SUBRAHMANYAN Chairman & Managing Director Membership No. 046930 Partner Effect of exchange rate changes on cash and cash equivalents RUPEN K. BHATT Firm's Registration No. 117366W/W-100018 Chartered Accountants For DELOITTE HASKINS & SELLS LLP In terms of our report attached 3. Previous year's figures have been regrouped/reclassified wherever applicable. 2. Property, plant and equipment, Investment property and Intangible assets are adjusted for movement of (a) capital work-in-progress for Property, plant and equipment and Investment property and (b) Intangible assets under development during the year. by the hand of (12.70) (43.23) Exchange difference on items grouped under financing/investing activities Standalone Statement of Cash Flows Standalone Statement of Cash Flows for the year ended March 31, 2024 Particulars A. Cash flow from operating activities: Profit before tax (excluding exceptional items) Adjustments for: Dividend received 2023-24 crore 2022-23 10868.32 9832.70 (2655.67) (1713.39) Depreciation, amortisation, impairment and obsolescence 1751.01 1371.64 399 Statement of Cash Flows has been prepared under the indirect method as set out in the Indian Accounting Standard (Ind AS) 7 "Statement of Cash Flows" as specified in the Companies (Indian Accounting Standards) Rules, 2015. Employee share options (net) 22.27 Transfer from/to general reserve/retained earnings during the year crore Reserves and Surplus- Items of Other comprehensive income Capital Transfer to non-financial assets/liability reserve Capital redemption Securities share Employee Debenture premium reserve Capital reserve on business combination Transfer on account of exercise of employee share options Issue of equity shares on exercise of employee share options Amount transferred to capital redemption reserve upon Buyback Integrated Statutory Financial Report Reports Statements Standalone Statement of Changes in Equity for the year ended March 31, 2024 (contd.) Particulars Balance as at 1-4-2023 Profit for the year (c) Other comprehensive income (d) Total comprehensive income for the year (c+d) Buyback of equity shares Tax on Buyback of equity shares Expenses for Buyback of equity shares (net of tax) options redemption (net) 22.27 reserve Debt instruments Hedging through (184.07) 132.58 9258.08 (8770.19) (9993.75) (2253.33) (2253.33) (26.55) (46.25) (26.55) 225 (6.25) 9.56 41.00 (41.00) 9.56 6.25 132.58 (184.07) 10.43 (5.19) 9314.76 (5.19) Total other equity reserve reserve reserve Other comprehen- sive income 10.84 (25.77) 260.00 8770.19 74.62 20.42 26201.60 35863.32 (21.47) 224.01 9304.33 (130.91) 71246.85 9304.33 Foreign Retained currency earnings translation 1. 3802.49 3939.21 (2396.90) 161.18 (1447.02) (3719.66) 94.55 (2916.46) Purchase of Property, plant and equipment, Investment property and Intangible assets 7263.96 186.67 8293.55 (2629.14) 9594.46 10922.69 581.62 6078.46 (290.99) (2330.50) 522.95 Purchase of non-current investments Sale of non-current investments (110.21) (21.01) (146.31) (2845.35) 4757.26 (113.19) 98.18 46.36 34.23 800.00 (84.17) Long term deposits/Loans (given) - subsidiaries, associates, joint venture companies and third parties Long term deposits/loans repaid - subsidiaries, associates, joint venture companies and third parties Short term deposits/loans (given)/repaid (net) - subsidiaries, associates, joint venture companies and third parties Change in other bank balances and cash not availabe for immediate use (Purchase)/sale of current investments (net). Net payments for transfer of discontinued operations (net of tax) Net proceeds from transfer of business undertaking (74.95) (296.10) Divestment of stake/capital reduction in subsidiary companies Sale of Property, plant and equipment, Investment property and Intangible assets (1612.25) (Profit)/loss on sale of Property, plant and equipment, Investment property and Intangible assets (net) (Profit)/loss on sale of investments (net) [including fair valuation] (58.67) (130.65) (284.78) (160.17) (1648.20) Reversal of provision with respect to loans given to subsidiary companies (891.86) Loss on cancellation of equity shares on capital reduction by subsidiary 602.95 Employee stock option-discount forming part of employee benefits expense 91.25 28.16 (70.24) Interest income 2125.23 2405.83 B. Cash flow from investing activities: Net cash (used in)/from operating activities Direct taxes paid [net] Cash (used in)/generated from operations Increase/decrease) in trade payables and customer advances (Increase)/decrease in inventories (143.75) (5434.80) 9447.58 0.42 10353.98 (Increase)/decrease in trade and other receivables Operating profit before working capital changes Other adjustments Adjustments for: Finance costs Investment in subsidiaries, associates and joint venture companies 2499.27 1573.03 192.71 (98.70) (12.02) (17.56) 87.93 49.65 1078.98 (95.18) 1676.96 Net (decrease)/increase in cash and cash equivalents (A + B + C) Net cash (used in)/from financing activities Interest paid (including cash flows from interest rate swaps) Expenses for buyback of equity shares (net of tax) Tax on buyback of equity shares Buyback of equity shares Cash and cash equivalents at beginning of the year (4216.95) (3091.42) (10000.00) (0.01) 14.41 3.34 Notes: Cash and cash equivalents classified as asset held for sale Cash and cash equivalents at end of the year Effect of exchange rate changes on cash and cash equivalents 5718.23 (1930.14) 133.38 3802.49 (7441.39) (14522.06) (2320.99) (2250.23) (26.55) (2253.33) Dividends paid Principal repayment on Lease Liability Interest paid on Lease Liability Settlement of derivative contracts related to borrowings Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 400 0.97 (1752.71) 6361.89 6.37 1712.43 1321.86 2034.17 2649.30 Net cash (used in)/from investing activities Dividend received from other investments Dividend received from subsidiaries and joint venture companies Interest received 14.07 Integrated Management Discussion and Analysis Statutory Report (Repayments)/proceeds from other borrowings (net) 10.31 2450.00 (5549.00) (4845.00) Repayment of non-current borrowings 7450.00 Proceeds from non-current borrowings 9.65 Proceeds from fresh issue of share capital (including share application money)[net] crore 2022-23 2023-24 C. Cash flow from financing activities: Particulars Standalone Statement of Cash Flows for the year ended March 31, 2024 (contd.) Statements Reports Financial Corporate Overview (1223.56) Notes forming part of the Standalone Financial Statements (contd.) Depreciation is recognised using straight-line method so as to write off the cost of the assets (other than freehold land and capital work-in-progress) less their residual values over their useful lives specified in Schedule II to the Companies Act, 2013, or in the case of assets where the useful life was determined by technical evaluation, over the useful life so determined. Depreciation charge for impaired assets is adjusted in future periods in such a manner that the revised carrying amount of the asset is allocated over its remaining useful life. Depreciation method is reviewed at each financial year end to reflect the expected pattern of consumption of the future economic benefits embodied in the asset. The estimated useful life and residual values are also reviewed at each financial year end and the effect of any change in the estimates of useful life/residual value is accounted on prospective basis. Where cost of a part of the asset ("asset component") is significant to total cost of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part is determined separately and such asset component is depreciated over its separate useful life. Depreciation on additions to/deductions from, owned assets is calculated pro-rata to the period of use. PPE is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition is recognised in the Statement of Profit and Loss in the same period. (h) Investment property Properties, including those under construction, held to earn rentals and/or capital appreciation are classified as investment property and are measured and reported at cost, including transaction costs and borrowing cost capitalised for qualifying assets, in accordance with the Company's accounting policy. Policies with respect to depreciation, useful life and derecognition are followed on the same basis as stated for Property, Plant and Equipment vide 1(ii)(g) above. (i) Intangible assets Intangible assets are recognised when it is probable that the future economic benefits that are attributable to the asset will flow to the Company and the cost of the asset can be measured reliably. Intangible assets are stated at original cost net of tax/duty credits availed, if any, less accumulated amortisation and cumulative impairment. All directly attributable costs and other administrative and other general overhead expenses that are specifically attributable to acquisition of intangible assets are allocated and capitalised as a part of the cost of the intangible assets. Research and development expenditure on new products: (i) (ii) Expenditure on research is expensed under respective heads of account in the period in which it is incurred. Development expenditure on new products is capitalised as intangible asset, if all of the following can be demonstrated: A. the technical feasibility of completing the intangible asset so that it will be available for use or sale; B. the Company has intention to complete the intangible asset and use or sell it; PPE not ready for the intended use on the date of the Balance Sheet are disclosed as "capital work-in-progress". (Also refer to the policies on leases, borrowing costs, impairment of assets and foreign currency transactions below). Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost can be measured reliably. Own manufactured PPE is capitalised at cost including an appropriate share of overheads. Administrative and other general overhead expenses that are specifically attributable to construction or acquisition of PPE or bringing the PPE to working condition are allocated and capitalised as a part of the cost of the PPE. PPE is recognised when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. PPE is stated at original cost net of tax/duty credits availed, if any, less accumulated depreciation and cumulative impairment, if any. All directly attributable costs related to the acquisition of PPE and borrowing costs in case of qualifying assets are capitalised in accordance with the Company's accounting policy. C. D. Dividend income is accounted in the period in which the right to receive the same is established. Government grants, which are revenue in nature and are towards compensation for the qualifying costs incurred by the Company, are recognised as other income/reduced from underlying expenses in profit or loss in the period in which such costs are incurred. Government grants related to an asset are reduced from the cost of an asset until the asset is ready to use and the grant post that is presented as deferred income. Subsequently the grant is recognised as income in profit or loss on a systematic basis over the expected useful life of the related asset. Government grant receivable in the form of duty credit scrips is recognised as other income in the Statement of Profit and Loss in the period in which the export is done or the application is made to the government authorities and to the extent there is no uncertainty towards its receipt. Other items of income are accounted as and when the right to receive such income arises and it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. (f) Exceptional items An item of income or expense which by its size, type or incidence requires disclosure in order to improve an understanding of the performance of the Company is treated as an exceptional item and disclosed as such in the financial statements. 404 Integrated Annual Report 2023-24 C. Corporate Overview Integrated Statutory Financial Report Reports Statements NOTE [1](ii) Material Accounting Policy Information (contd.) (g) Property, plant and equipment (PPE) Management Discussion and Analysis the Company has ability to use or sell the intangible asset; D. the manner in which the probable future economic benefits will be generated including the existence of a market for output Short-term employee benefits: Employee benefits such as salaries, wages, short-term compensated absences, bonus, ex-gratia and performance-linked rewards falling due wholly within twelve months of rendering the service are classified as short-term employee benefits and are expensed in the period in which the employee renders the service. Post-employment benefits: A. Defined contribution plans: The Company's superannuation scheme, state governed provident fund scheme, employee state insurance scheme and employee pension scheme are defined contribution plans. The contribution paid/payable under the schemes is recognised during the period in which the employee renders the service. B. Defined benefit plans: The employees' gratuity fund schemes and employee provident fund schemes managed by board of trustees established by the Company, the post-retirement medical care plan and the company pension plan represent defined benefit plans. The present value of the obligation under defined benefit plans is determined based on actuarial valuation using the Projected Unit Credit Method. 406 Integrated Annual Report 2023-24 Corporate Overview (ii) Management Discussion and Analysis Statutory Financial Report Reports Statements Notes forming part of the Standalone Financial Statements (contd.) NOTE [1](ii) Material Accounting Policy Information (contd.) (I) Integrated B. (i) When an impairment loss recognised earlier is subject to full or partial reversal, the carrying amount of the asset (or cash generating unit), except impairment loss allocated to goodwill, is increased to the revised estimate of its recoverable amount, such that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss is recognised for the asset (or cash generating unit) in prior years. A reversal of an impairment loss (other than impairment loss allocated to goodwill) is recognised immediately in the Statement of Profit and Loss. of the intangible asset or intangible asset itself or if it is to be used internally, the usefulness of intangible assets; 405 LARSEN & TOUBRO Notes forming part of the Standalone Financial Statements Notes forming part of the Standalone Financial Statements (contd.) NOTE [1](ii) Material Accounting Policy Information (contd.) (j) (k) Employee Benefits E. the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and the Company has ability to reliably measure the expenditure attributable to the intangible asset during its development. Development expenditure that does not meet the above criteria is expensed in the period in which it is incurred. Intangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as "Intangible assets under development". Intangible assets are amortised on straight-line basis over the estimated useful life. The method of amortisation and useful life are reviewed at the end of each financial year with the effect of any changes in the estimate being accounted for on a prospective basis. Amortisation on impaired assets is provided by adjusting the amortisation charge in the remaining periods so as to allocate the asset's revised carrying amount over its remaining useful life. Impairment of assets As at the end of each financial year, the carrying amounts of PPE, investment property, intangible assets and investments in subsidiary, associate and joint venture companies are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If such indication exists, PPE, investment property, intangible assets and investments in subsidiary, associate and joint venture companies are tested for impairment so as to determine the impairment loss, if any. Goodwill is tested for impairment each year. Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is determined: in the case of an individual asset, at the higher of the fair value less costs of disposal and the value-in-use; and (i) (ii) in the case of a cash generating unit (the smallest identifiable group of assets that generates independent cash flows), at the higher of the cash generating unit's fair value less costs of disposal and the value-in-use. (The amount of value-in-use is determined as the present value of estimated future cash flows from the continuing use of an asset, which may vary based on the future performance of the Company and from its disposal at the end of its useful life. For this purpose, the discount rate (post-tax) is determined based on the weighted average cost of capital of the Company suitably adjusted for risks specified to the estimated cash flows of the asset). If recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, such deficit is recognised immediately in the Statement of Profit and Loss as impairment loss and the carrying amount of the asset (or cash generating unit) is reduced to its recoverable amount. F. Re-measurement, comprising actuarial gains and losses, the return on plan assets (excluding amounts included in net interest on the net defined benefit liability or asset) and any change in the effect of asset ceiling (if applicable) is recognised in other comprehensive income and is reflected in retained earnings and the same is not eligible to be reclassified to profit or loss. Defined benefit costs comprising current service cost, past service cost and gains or losses on settlements are recognised in the Statement of Profit and Loss as employee benefits expense. Interest cost implicit in defined benefit employee cost is recognised in the Statement of Profit and Loss under finance costs. Gains or losses on settlement of any defined benefit plan are recognised when the settlement occurs. Past service cost is recognised as expense at the earlier of the plan amendment or curtailment and when the Company recognises related restructuring costs or termination benefits. A. Interest income on investments and loans is accrued on a time basis by reference to the principal outstanding and the effective interest rate including interest on investments classified as fair value through profit or loss or fair value through other comprehensive income. Interest receivable on customer dues is recognised as income in the Statement of Profit and Loss on accrual basis provided there is no uncertainty of realisation. H. Other operational revenue represents income earned from the activities incidental to the business and is recognised when the performance obligation is satisfied and right to receive the income is established as per the terms of the contract. • Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at measurement date; Level 2 inputs are inputs, other than quoted prices included in level 1, that are observable for the assets or liabilities, either directly or indirectly; and • Level 3 inputs are unobservable inputs for the valuation of assets or liabilities. Above levels of fair value hierarchy are applied consistently and generally, there are no transfers between the levels of the fair value hierarchy unless the circumstances change warranting such transfer. (c) Presentation of financial statements The Balance Sheet, the Statement of Profit and Loss and the Statement of Changes in Equity are prepared and presented in the format prescribed in the Schedule III to the Companies Act, 2013 (the Act). The Statement of Cash Flows has been prepared and presented in accordance with Ind AS 7 "Statement of Cash Flows". The disclosures with respect to items in the Balance Sheet and Statement of Profit and Loss, as prescribed in the Schedule III to the Act, are presented by way of notes forming part of the financial statements along with the other notes required to be disclosed under Ind AS and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended. Amounts in the financial statements are presented in Indian Rupee in crore [1 crore = 10 million] rounded off to two decimal places as permitted by Schedule III to the Act. Per share data are presented in Indian Rupee to two decimals places. (d) Operating cycle for current and non-current classification Operating cycle for the business activities of the Company covers the duration of the specific project or contract or product line or service including the defect liability period wherever applicable and extends up to the realisation of receivables (including retention monies) within the agreed credit period normally applicable to the respective lines of business. (e) Revenue recognition Revenue from contracts with customers is recognised when a performance obligation is satisfied by transfer of promised goods or services to a customer. 402 Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Statutory • observable and the significance of the inputs to the fair value measurement in its entirety: Fair value measurements are categorised as below based on the degree to which the inputs to the fair value measurements are The Company maintains its accounts on accrual basis following historical cost convention, except for certain assets and liabilities that are measured at fair value in accordance with Ind AS. Mumbai, May 8, 2024 R. SHANKAR RAMAN Whole time Director & Chief Financial Officer (DIN 00019798) SIVARAM NAIR A Company Secretary & Compliance Officer Membership No. FCS3939 P. R. RAMESH Independent Director (DIN 01915274) 401 LARSEN & TOUBRO Notes forming part of the Standalone Financial Statements Financial Notes forming part of the Standalone Financial Statements Company overview: Larsen & Toubro Limited ("the Company") is an Indian multinational engaged in EPC Projects, Hi-Tech Manufacturing and Services. The Company operates in over 50 countries worldwide. A strong, customer-focused approach and the constant quest for top-class quality have enabled the Company to attain and sustain leadership in its major lines of business for over eight decades. The Company is engaged in core, high impact sectors of the economy and its integrated capabilities span the entire spectrum of 'design to delivery'. Every aspect of Company's businesses is characterised by professionalism and high standards of corporate governance. Sustainability is embedded into its long-term strategy for growth. The Company's manufacturing footprint extends across eight countries in addition to India. The Company has several international offices and a supply chain that extends around the globe. NOTE [1](ii) Material Accounting Policy Information (a) Statement of compliance The Company's financial statements have been prepared in accordance with the provisions of the Companies Act, 2013 and the Indian Accounting Standards ("Ind AS") notified under the Companies (Indian Accounting Standards) Rules, 2015 and amendments thereto issued by Ministry of Corporate Affairs under section 133 of the Companies Act, 2013. In addition, the guidance notes/announcements issued by the Institute of Chartered Accountants of India (ICAI) are also applied except where compliance with other statutory promulgations require a different treatment. These financials statements have been approved for issue by the Board of Directors at its meeting held on May 8, 2024. (b) Basis of accounting NOTE [1](i) Report Reports Statements • Cost plus contracts: Revenue from cost plus contracts is recognised over time and is determined with reference to the extent performance obligations have been satisfied. The amount of transaction price allocated to the performance obligations satisfied represents the recoverable costs incurred during the period plus the margin as agreed with the customer. Fixed price contracts: Contract revenue is recognised over time to the extent of performance obligation satisfied and control is transferred to the customer. Contract revenue is recognised at allocable transaction price which represents 403 LARSEN & TOUBRO Notes forming part of the Standalone Financial Statements Notes forming part of the Standalone Financial Statements (contd.) NOTE [1](ii) Material Accounting Policy Information (contd.) • C. E. the cost of work performed on the contract plus proportionate margin, using the percentage of completion method. Percentage of completion is the proportion of cost of work performed to-date, to the total estimated contract costs. With respect to contracts, where the outcome of the performance obligation cannot be reasonably measured, but the costs incurred towards satisfaction of performance obligation are expected to be recovered, the revenue is recognised only to the extent of costs incurred. For contracts where the aggregate of contract cost incurred to date plus recognised profits (or minus recognised losses as the case may be) exceeds the progress billing, the surplus is shown as contract asset and termed as "Unbilled revenue". For contracts where progress billing exceeds the aggregate of contract costs incurred to-date plus recognised profits (or minus recognised losses, as the case may be), the surplus is shown as contract liability and termed as "Excess of billing over revenue". Amounts received before the related work is performed are disclosed in the Balance Sheet as contract liability and termed as "Advances from customer". The amounts billed on customer for work performed and are unconditionally due for payment i.e. only passage of time is required before payment falls due, are disclosed in the Balance Sheet as trade receivables. The amount of retention money held by the customers pending completion of performance milestone is disclosed as part of contract asset and is reclassified as trade receivables when it becomes due for payment. Impairment loss (termed as provision for foreseeable losses in the financial statements) is recognised in profit or loss to the extent the carrying amount of the contract asset exceeds the remaining amount of consideration that the Company expects to receive towards remaining performance obligations (after deducting the costs that relate directly to fulfill such remaining performance obligations). The Company recognises impairment loss (termed as provision for expected credit loss in the financial statements) on account of credit risk in respect of a contract asset using expected credit loss model on similar basis as applicable to trade receivables. Revenue from property development activities is recognised when performance obligation is satisfied, customer obtains control of the property transferred and a reasonable expectation of collection of the sale consideration from the customer exists. Revenue from rendering of services is recognised over time as the customer receives the benefit of the Company's performance and the Company has an enforceable right to payment for services transferred. Revenue from contracts for rendering of engineering design services and other services which are directly related to the construction of an asset is recognised on the same basis as stated in (B) above. F. Commission income is recognised as the terms of the contract are fulfilled. G. Course fees/subscription income is recognised over time as per the course/subscription duration and agreed terms. D. (ii) Other income Revenue from construction/project related activity is recognised as follows: B. Notes forming part of the Standalone Financial Statements (contd.) NOTE [1](ii) Material Accounting Policy Information (contd.) For performance obligation satisfied over time, the revenue recognition is done using input method by measuring the progress towards complete satisfaction of performance obligation. The progress is measured in terms of a proportion of actual cost incurred to-date, to the total estimated cost attributable to the performance obligation as it best depicts the transfer of control that occurs as costs are incurred. The Company transfers control of a good or service over time and therefore satisfies a performance obligation and recognises revenue over a period of time if one of the following criteria is met: (a) the customer simultaneously consumes the benefit of the Company's performance or (b) the customer controls the asset as it is being created/ enhanced by the Company's performance or (c) there is no alternative use of the asset and the Company has either explicit or implicit right of payment considering legal precedents, In all other cases, performance obligation is considered as satisfied at a point in time. Revenue is recognised when the control of the same is transferred to the customer and it is probable that the Company will collect the consideration to which it is entitled for the exchanged goods. Revenue from commissioning of complex plant and equipment is recognised either 'over time' or 'in time' based on an assessment of the transfer of control as per the terms of the contract. The revenue is recognised to the extent of transaction price allocated to the performance obligation satisfied. Transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer excluding amounts collected on behalf of a third party. The Company includes variable consideration as part of transaction price when there is a basis to reasonably estimate the amount of the variable consideration and when it is probable that a significant reversal of cumulative revenue recognised will not occur when the uncertainty associated with the variable consideration is resolved. Variable consideration is estimated using the expected value method or most likely amount as appropriate in a given circumstance. Payment terms agreed with a customer are as per business practice and the financing component, if significant, is separated from the transaction price and accounted as interest income. a. b. C. (i) Determining the revenue to be recognised in case of performance obligation satisfied over a period of time; revenue recognition is done by measuring the progress towards complete satisfaction of performance obligation. Determining the expected losses, which are recognised in the period in which such losses become probable based on the expected total contract cost as at the reporting date. Determining the method to be applied to arrive at the variable consideration requiring an adjustment to the transaction price. Revenue from operations Revenue includes adjustments made towards liquidated damages and variation wherever applicable. Escalation and other claims, which are not ascertainable/acknowledged by customers are not taken into account. A. Revenue from sale of manufactured and traded goods including contracts for supply/commissioning of complex plant and equipment is recognised as follows: Costs to obtain a contract which are incurred regardless of whether the contract was obtained are charged-off in profit or loss immediately in the period in which such costs are incurred. Incremental costs of obtaining a contract, if any, and costs incurred to fulfil a contract are amortised over the period of execution of the contract in proportion to the progress measured in terms of a proportion of actual cost incurred to-date, to the total estimated cost attributable to the performance obligation. Significant judgments are used in: In case of funded plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans to recognise the obligation on a net basis. The obligation towards defined benefit plans is measured at the present value of the estimated future cash flows using a discount rate based on the market yield on government securities of a maturity period equivalent to the weighted average maturity profile of the defined benefit obligations at the Balance Sheet date. The obligation recognised in respect of other long-term benefits is measured at present value of estimated future cash flows expected to be made by the Company and is recognised in a similar manner as in the case of defined benefit plans vide (ii)(B) above. Financial assets and/or financial liabilities are recognised when the Company becomes party to a contract embodying the related financial instruments. All financial assets, financial liabilities and financial guarantee contracts are initially measured at fair value excepting for trade receivables not containing a significant financing component are initially measured at transaction price. Transaction costs that are attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from as the case may be, the fair value of such financial assets or liabilities, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised in profit or loss. In case of funding to subsidiary companies in the form of interest free or concession loans and preference shares, the excess of the actual amount of the funding over initially measured fair value is accounted as an equity investment. A financial asset and a financial liability is offset and presented on net basis in the balance sheet when there is a current legally enforceable right to set-off the recognised amounts and it is intended to either settle on net basis or to realise the asset and settle the liability simultaneously. Financial assets: A. All recognised financial assets are subsequently measured in their entirety either at amortised cost or at fair value as follows: 1. Investments in debt instruments that are designated as fair value through profit or loss (FVTPL) - at fair value. Debt instruments at FVTPL is a residual category for debt instruments, if any, and all changes are recognised in profit or loss. Investments in debt instruments that meet the following conditions are subsequently measured at amortised cost (unless the same designated as fair value through profit or loss): 2. 3. 4. 5. • The asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and The contractual terms of instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. (iii) Other long-term employee benefits: The asset is held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets; and The contractual terms of instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Investment in equity instruments issued by subsidiary, associate and joint venture companies are measured at cost less impairment. Investment in preference shares of the subsidiary companies are treated as equity instruments if the same are convertible into equity shares or are redeemable out of the proceeds of equity instruments issued for the purpose of redemption of such investments. Investment in preference shares not meeting the aforesaid conditions are classified as debt instruments at FVTPL. 408 Integrated Annual Report 2023-24 General (m) Financial instruments In case of sale and leaseback transactions, the Company first considers whether the initial transfer of the underlying asset to the buyer- lessor is a sale by applying the requirements of Ind AS 115. If the transfer qualifies as a sale and the transaction is at market terms, the Company effectively derecognises the asset, recognises a ROU asset (and lease liability) and recognises in Statement of Profit and Loss, the gain or loss relating to the buyer-lessor's rights in the underlying asset. (Also refer to policy on Property, Plant and Equipment vide 1(ii) (g), above). Investment in debt instruments that meet the following conditions are subsequently measured at fair value through other comprehensive income [FVTOCI] (unless the same are designated as fair value through profit or loss) the lease term, based on a pattern reflecting a constant periodic rate of return on Company's net investment in the lease. A lease which is not classified as a finance lease is an operating lease. costs. Long-term employee benefit costs comprising current service cost and gains or losses on curtailments and settlements, re-measurements including actuarial gains and losses are recognised in the Statement of Profit and Loss as employee benefits expenses. Interest cost implicit in long-term employee benefit cost is recognised in the Statement of Profit and Loss under finance Leases Assets taken on lease are accounted as right-of-use assets and the corresponding lease liability is recognised at the lease commencement date. The Company recognises lease payments in case of assets given on operating leases as income on a straight-line basis. The Company presents underlying assets subject to operating lease in its balance sheet under the respective class of asset. Initially the right-of-use asset is measured at cost which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, as reduced by any lease incentives received. The lease liability is initially measured at the present value of the lease payments, discounted using the Company's incremental borrowing rate. It is remeasured when there is a change in future lease payments arising from a change in an index or a rate, or a change in the estimate of the guaranteed residual value, or a change in the assessment of purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero. (iv) Termination benefits: Lease payments associated with following leases are recognised as expense on straight-line basis: The right-of-use asset is measured by applying cost model i.e. right-of-use asset at cost less accumulated depreciation and cumulative impairment, if any. The right-of-use asset is depreciated using the straight-line method from the commencement date to the end of the lease term or useful life of the underlying asset whichever is earlier. Carrying amount of lease liability is increased by interest on lease liability and reduced by lease payments made. (ii) Leases which are short-term. Assets given on lease are classified either as operating lease or as finance lease. A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset. Asset held under finance lease is initially recognised in balance sheet and presented as a receivable at an amount equal to the net investment in the lease. Finance income is recognised over 407 LARSEN & TOUBRO Notes forming part of the Standalone Financial Statements Notes forming part of the Standalone Financial Statements (contd.) NOTE [1](ii) Material Accounting Policy Information (contd.) (i) Low value leases; and Termination benefits such as compensation under employee separation schemes are recognised as expense when the Company's offer of the termination benefit can no longer be withdrawn or when the Company recognises the related restructuring costs whichever is earlier. 762.25 108.39 0.62 3585.53 2629.31 2.59 868.87 8570.70 Plant and equipment (0.09) Owned 0.20 4.36 Buildings 0.20 14.36 9194.36 128.78 Sub-total 700.06 0.71 (33.91) 0.01 666.85 12.86 1.59 (0.09) 14.36 652.49 3335.56 252.95 1.18 20 1789.09 150.89 192.03 10792.05 343.09 10803.71 5203.16 1228.24 0.62 311.71 6120.31 13.26 4670.14 Computers 595.30 87.13 (i) estimated amount of contracts remaining to be executed on capital account and not provided for; Commitments are future liabilities for contractual expenditure, classified and disclosed as follows: (x) Commitments 0.63 0.63 1789.09 Sub-total 5040.61 1228.24 0.62 750 160.82 6108.65 13.26 4670.14 Leased out 162.72 151.06 11.66 162.55 1.59 11.66 9357.08 12.86 Up to 31-3-2023 - (aa) Earnings per share Basic earnings per share is computed using the net profit or loss after tax and weighted average number of shares outstanding during the year. Diluted earnings per share is computed using the net profit or loss after tax and weighted average number of equity and potential equity shares outstanding during the year, except where the result would be anti-dilutive. (ab) Key sources of estimation The preparation of financial statements in conformity with Ind AS requires that the management of the Company makes estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. The estimates and underlying assumptions made by management are explained under respective policies. Revisions to accounting estimates include useful lives of property, plant and equipment & intangible assets, allowance for expected credit loss, future obligations in respect of retirement benefit plans, expected cost of completion of contracts, provision for rectification costs, fair value/recoverable amount measurement, etc. Difference, if any, between the actual results and estimates is recognised in the period in which the results are known. 414 Integrated Annual Report 2023-24 Notes forming part of the Standalone Financial Statements (contd.) NOTE [2] Property, Plant and Equipment & Capital work-in-progress Corporate Management Integrated (ii) uncalled liability on shares and other investments partly paid; Overview Cash and cash equivalents (including bank balances) shown in the Statement of Cash Flows exclude items which are not available for general use as at the date of Balance Sheet. Discussion and Analysis (iii) all other items for which the cash effects are investing or financing cash flows. (i) changes during the period in inventories and operating receivables and payables; Where the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under such contract, the present obligation under the contract is recognised and measured as a provision. (iii) funding related commitment to subsidiary, associate and joint venture companies; and (iv) other non-cancellable commitments, if any, to the extent they are considered material and relevant in the opinion of management. Other commitments related to sales/procurements made in the normal course of business are not disclosed to avoid excessive details. (y) Discontinued operations and non-current assets held for sale Discontinued operation is a component of the Company that has been disposed of or classified as held for sale and represents a major line of business. Non-current assets and disposal groups are classified as held for sale if their carrying amount is intended to be recovered principally through a sale (rather than through continuing use) when the asset (or disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sale of such asset (or disposal group) and the sale is highly probable and is expected to qualify for recognition as a completed sale within one year from the date of classification. Non-current assets and disposal groups classified as held for sale are measured at lower of their carrying amount and fair value less costs to sell. 413 LARSEN & TOUBRO Notes forming part of the Standalone Financial Statements Notes forming part of the Standalone Financial Statements (contd.) NOTE [1](ii) Material Accounting Policy Information (contd.) (z) Statement of Cash Flows Statement of Cash Flows is prepared segregating the cash flows into operating, investing and financing activities. Cash flow from operating activities is reported using indirect method, adjusting the profit before tax excluding exceptional items for the effects of: (ii) non-cash items such as depreciation, provisions, unrealised foreign currency gains and losses; and 143.14 Report Financial Book value crore As at 31-3-2024 Land Freehold 556.11 0.71 (33.10) 0.01 523.71 523.71 Leasehold 143.95 (0.81) As at 31-3-2024 Reports Statutory Up to 31-3-2024 Transfer * Statements Cost/Valuation Depreciation Impairment Foreign Foreign Class of assets As at Additions Transfer x 1-4-2023 currency fluctuation Deductions As at 31-3-2024 For the year currency Deductions fluctuation Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date. Integrated Annual Report 2023-24 the amount of the obligation cannot be measured with sufficient reliability. The stock options granted to employees in terms of the Company's Stock Options Schemes, are measured at the fair value of the options at the grant date. The fair value of the options is treated as discount and accounted as employee compensation cost over the vesting period on a straight-line basis. The amount recognised as expense in each year is arrived at based on the number of grants expected to vest. If a grant lapses after the vesting period, the cumulative discount recognised as expense in respect of such grant is transferred to the general reserve within equity. (s) (r) Share-based payment arrangements Borrowing costs net of any investment income from the temporary investment of related borrowings that are attributable to the acquisition, construction or production of a qualifying asset are capitalised/inventorised as part of cost of such asset till such time the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognised in profit or loss in the period in which they are incurred. Borrowing costs include finance costs calculated using the effective interest method, finance charges in respect of assets acquired on lease and exchange differences arising on foreign currency borrowings to the extent they are regarded as an adjustment to finance costs. In cases where hedging instruments are acquired for protection against exchange rate risk related to borrowings and are accounted as hedging a time-period related hedge item, the borrowing costs also include the amortisation of premium element of the forward contract and foreign currency basis spread as applicable, over the period of the hedging instrument. (q) Borrowing Costs The fair value of the stock options granted to employees of the Company by the Company's subsidiaries is accounted as employee compensation cost over the vesting period and where such fair value is not recovered by the subsidiaries, the same is treated as dividend declared by them. The share-based payment equivalent to the fair value as on the date of grant of employee stock options granted to key managerial personnel is disclosed as a related party transaction in the year of grant. Material Accounting Policy Information (contd.) Notes forming part of the Standalone Financial Statements (contd.) A. Financial liabilities, including derivatives and embedded derivatives, which are designated for measurement at FVTPL are subsequently measured at fair value. Financial guarantee contracts are subsequently measured at the amount of impairment loss allowance or the amount recognised at inception net of cumulative amortisation, whichever is higher. All other financial liabilities including loans and borrowings are measured at amortised cost using Effective Interest Rate (EIR) method. B. A financial liability is derecognised when the related obligation expires or is discharged or cancelled. (iii) The Company designates certain hedging instruments, such as derivatives, embedded derivatives and in respect of foreign currency risk, certain non-derivatives, as either fair value hedges, cash flow hedges or hedges of net investments in foreign operations. Hedges of foreign exchange risk on firm commitments are accounted as cash flow hedges. A. NOTE [1](ii) The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share. Foreign currencies The functional currency and presentation currency of the Company is Indian Rupee. (ii) Transactions in currencies other than the Company's functional currency are recorded on initial recognition using the exchange rate at the transaction date. At each Balance Sheet date, foreign currency monetary items are reported at the closing spot rate. Non-monetary items that are measured in terms of historical cost in foreign currency are not translated. Exchange differences that arise on settlement of monetary items or on reporting of monetary items at each Balance Sheet date at the closing spot rate are recognised in the Statement of Profit and Loss in the period in which they arise except for: Material Accounting Policy Information (contd.) NOTE [1](ii) Notes forming part of the Standalone Financial Statements (contd.) Notes forming part of the Standalone Financial Statements LARSEN & TOUBRO 411 The reporting of segment information is the same as provided to the management for the purpose of the performance assessment and resource allocation to the segments. Operating segments are those components of the business whose operating results are regularly reviewed by the chief operating decision making body in the Company to make decisions for performance assessment and resource allocation. (t) Accounting and reporting of information for Operating Segments C. all resulting exchange differences are recognised in other comprehensive income and accumulated in equity as foreign currency translation reserve for subsequent reclassification to profit or loss on disposal of such foreign operations. A. assets and liabilities for each Balance Sheet presented are translated at the closing rate at the date of that Balance Sheet; B. income and expenses for each income statement are translated at average exchange rate for the reporting period; and (iv) Financial statements of foreign operations whose functional currency is different than Indian Rupees are translated into Indian Rupees as follows: (iii) exchange rate as of the date on which the non-monetary asset or non-monetary liability is recognised on payment or receipt of advance consideration is used for initial recognition of related asset, expense or income. B. exchange differences on transactions entered into to hedge certain foreign currency risks. A. exchange differences on foreign currency borrowings relating to assets under construction for future productive use, are included in the cost of those assets when such exchange differences are regarded as an adjustment to finance costs on those foreign currency borrowings; and B. Fair value hedges: Changes in fair value of the designated portion of derivatives that qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. The fair value adjustment to the carrying amount of the hedged item arising from the hedged risk is amortised to profit or loss from that date. Cash flow hedges: In case of transaction related hedges, the effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in other comprehensive income and accumulated in equity as 'hedging reserve'. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss. Amounts previously recognised in other comprehensive income and accumulated in equity relating to the effective portion, are reclassified to profit or loss in the periods when the hedged item affects profit or loss, in the same head as the hedged item. The effective portion of the hedge is determined at the lower of the cumulative gain or loss on the hedging instrument from inception of the hedge and the cumulative change in the fair value of the hedged item from the inception of the hedge and the remaining gain or loss on the hedging instrument is treated as ineffective portion. (p) Securities premium (i) Securities premium includes: A. The difference between the face value of the equity shares and the consideration received in respect of shares issued. 410 B. The fair value of the stock options which are treated as expense, if any, in respect of shares allotted pursuant to Stock Options Scheme. Statements Reports Report Financial Statutory Integrated Management Discussion and Analysis Corporate Overview Cash and bank balances include fixed deposits, margin money deposits, earmarked balances with banks and other bank balances which have restrictions on repatriation. Short-term and liquid investments being subject to more than insignificant risk of change in value, are not included as part of cash and cash equivalents. Segment accounting policies are in line with the accounting policies of the Company. In addition, the following specific accounting policies have been followed for segment reporting: (o) Cash and bank balances (iv) Completed property/work-in-progress (including land) in respect of property development activity at lower of specifically identifiable cost or net realisable value. 409 LARSEN & TOUBRO Notes forming part of the Standalone Financial Statements Notes forming part of the Standalone Financial Statements (contd.) NOTE [1](ii) Material Accounting Policy Information (contd.) In case of time period related hedges, the premium element and the spot element of a forward contract is separated and only the change in the value of the spot element of the forward contract is designated as the hedging instrument. Similarly, wherever applicable, the foreign currency basis spread is separated from the financial instrument and is excluded from the designation of that financial instrument as the hedging instrument in case of time period related hedges. The changes in the fair value of the premium element of the forward contract or the foreign currency basis spread of the financial instrument is accumulated in a separate component of equity as "cost of hedging reserve". The changes in the fair value of such premium element or foreign currency basis spread are reclassified to profit or loss as a reclassification adjustment on a straight-line basis over the period of the forward contract or the financial instrument. The cash flow hedges are allocated to the forecast transactions on gross exposure basis. Where the hedged forecast transaction results in the recognition of a non-financial asset, such gains/losses are transferred from hedge reserve (but not as reclassification adjustment) and included in the initial measurement cost of the non-financial asset. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. Any gain or loss recognised in other comprehensive income and accumulated in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognised in profit or loss. (iv) Compound financial instruments issued by the Company which can be converted into fixed number of equity shares at the option of the holders irrespective of changes in the fair value of the instrument are accounted by recognising the liability and the equity components separately. The liability component is initially recognised at the fair value of a comparable liability that does not have an equity conversion option. The equity component is initially recognised at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. The directly attributable transaction costs are allocated to the liability and the equity components in proportion to their initial carrying amounts. Subsequent to initial recognition, the liability component of the compound financial instrument is measured at amortised cost using the effective interest method. The equity component of a compound financial instrument is not remeasured subsequently. (n) Inventories Inventories are valued after providing for obsolescence, as under: (i) Raw materials, components, construction materials, stores, spares and loose tools at lower of weighted average cost or net realisable value. However, these items are considered to be realisable at cost if the finished products in which they will be used, are expected to be sold at or above cost. (ii) Manufacturing work-in-progress at lower of weighted average cost including related overheads or net realisable value. In some cases, manufacturing work-in-progress are valued at lower of specifically identifiable cost or net realisable value. In the case of qualifying assets, cost also includes applicable borrowing costs vide policy relating to borrowing costs. (iii) Finished goods and stock-in-trade (in respect of goods acquired for trading) at lower of weighted average cost or net realisable value. Cost includes costs of purchases, costs of conversion and other costs incurred in bringing the inventories to their present location. Taxes which are subsequently recoverable from taxation authorities are not included in the cost. Assessment of net realisable value is made at each reporting period end and when the circumstances that previously caused inventories to be written-down below cost no longer exist or when there is clear evidence of an increase in net realisable value because of changed economic circumstances, the write-down, if any, in the past period is reversed to the extent of the original amount written-down so that the resultant carrying amount is the lower of the cost and the revised net realisable value. Contingent assets are disclosed where an inflow of economic benefits is probable. i) Segment revenue includes sales and other operational revenue directly identifiable with/allocable to the segment including inter- segment revenue. Expenses that are directly identifiable with/allocable to segments are considered for determining the segment result. Financial Statutory Integrated Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 Report 412 (v) Interests in joint operations Transaction or event which is recognised outside profit or loss, either in other comprehensive income or in equity, is recorded along with the tax as applicable. 0.03 Corporate Overview Management Discussion and Analysis Integrated The Company as a joint operator recognises in relation to its interest in a joint operation, its share in the assets/liabilities held/ incurred jointly with the other parties of the joint arrangement. Revenue is recognised for its share of revenue from the sale of output by the joint operation. Expenses are recognised for its share of expenses incurred jointly with other parties as part of the joint arrangement. Interests in joint operations are included in the segments to which they relate. Reports Statements Notes forming part of the Standalone Financial Statements (contd.) it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or • a present obligation arising from past events where: (ii) The issue expenses of securities which qualify as equity instruments are written off against securities premium. a possible obligation arising from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity; or (ii) (i) Provision is measured using the cash flows estimated to settle the present obligation and when the effect of time value of money is material, the carrying amount of the provision is the present value of those cash flows. Reimbursement expected in respect of expenditure required to settle a provision is recognised only when it is virtually certain that the reimbursement will be received. Contingent liability is disclosed in case of: (iii) a reliable estimate can be made of the amount of the obligation. (ii) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and (i) the Company has a present obligation (legal or constructive) as a result of a past event; and Provisions are recognised only when: (w) Provisions, contingent liabilities and contingent assets Material Accounting Policy Information (contd.) NOTE [1](ii) Statutory Financial Report Reports Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the Company's financial statements and the corresponding tax bases used in computation of taxable profit and quantified using the tax rates as per laws enacted or substantively enacted as on the Balance Sheet date. Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961 and using estimates and judgments based on the expected outcome of assessments/appeals and the relevant rulings in the areas of allowances and disallowances. (u) Taxes on income Segment revenue resulting from transactions with other business segments is accounted on the basis of transfer price which are either determined to yield a desired margin or agreed on a negotiated basis. x) ix) Segment non-cash expenses forming part of segment expenses also includes the fair value of the employee stock options which is accounted as employee compensation cost [Note 1 (ii)(r) above] and is allocated to the segment. viii) Segment assets and liabilities include those directly identifiable with the respective segments. Unallocable corporate assets and liabilities represent the assets and liabilities that relate to the Company as a whole. vii) Segment results are not adjusted for any exceptional item. Segment result includes the finance costs incurred on interest bearing advances with corresponding credit included in "Unallocable corporate income net of expenditure". Segment result represents profit before interest and tax and includes margins on inter-segment capital jobs, which are reduced in arriving at the profit before tax of the Company. Income not allocable to segments is included in "Unallocable corporate income net of expenditure". Most of the common costs are allocated to segments mainly on the basis of the respective segment revenue estimated at the beginning of the reporting period. vi) iv) iii) Deferred tax liabilities are generally recognised for all taxable temporary differences including the temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. ii) Deferred tax assets are generally recognised for all taxable temporary differences to the extent that is probable that taxable profits will be available against which those deductible temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Impairment of financial assets: Impairment loss on trade receivables is recognised using expected credit loss model, which involves use of a provision matrix constructed on the basis of historical credit loss experience as permitted under Ind AS 109 and is adjusted for forward looking information. Impairment loss on investments is recognised when the carrying amount exceeds its recoverable amount. For all other financial assets, expected credit losses are recognised based on the difference between the contractual cashflows and all the expected cash flows, discounted at the original effective interest rate. ECLs are measured at an amount equal to 12-month expected credit losses or at an amount equal to lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. Statements Notes forming part of the Standalone Financial Statements (contd.) NOTE [1](ii) Material Accounting Policy Information (contd.) B. 6. Investments in equity instruments issued by other than subsidiaries are classified as at FVTPL, unless the related instruments are not held for trading and the Company irrevocably elects on initial recognition to present subsequent changes in fair value in Other Comprehensive Income. 7. Trade receivables, security deposits, cash and cash equivalents, employee and other advances - at amortised cost. For financial assets that are measured at FVTOCI, income by way of interest and dividend, provision for impairment and exchange difference, if any, (on debt instrument) are recognised in profit or loss and changes in fair value (other than on account of above income or expense) are recognised in other comprehensive income and accumulated in other equity. On disposal of debt instruments at FVTOCI, the cumulative gain or loss previously accumulated in other equity is reclassified to profit or loss. In case of equity instruments at FVTOCI, such cumulative gain or loss is not reclassified to profit or loss on disposal of investments. C. A financial asset is primarily derecognised when: 1. the right to receive cash flows from the asset has expired, or 2. D. the Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a pass-through arrangement; and (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. On derecognition of a financial asset in its entirety, the difference between the carrying amount at the date of derecognition and the consideration received is recognised in profit or loss. (ii) Financial liabilities: 23.59 1938.38 458.99 Non-Factory buildings 2. Plant & Equipment General Photographic equipment Laboratory equipment Electrical installation 3. Office Equipment 4. Furniture & Fixture 5. Vehicles Motor cars (Including Electrical Factory buildings vehicle) 3 -60 2-60 8-15 3-30 15 5-8 10 8 10 10-20 4-5 4-15 10 10-20 30 Buildings 1. 418 (b) Diesel generator Buildings (c) Air-Conditioner & refrigeration equipment 222 15 20 15 12 15 12 555 (a) Production shops 30 50 (b) Internal roads 5 15-60 (in years) Revised useful life adopted based on technical evaluation Useful life as per Schedule II (in years) Sub-category of assets Category of assets 8 Sr. No. C. 557 8 Vehicles Motor cars (5) 15 Represents licence period as per agreement executed with the Tamil Nadu Maritime Board, renewable on expiry. Assets used in Precision Engineering System (a part of Hi-Tech Manufacturing segment): 7-14 Integrated Annual Report 2023-24 658.87 383.32 296.37 194.25 92.12 10.48 47.86 195.22 195.22 Aircraft 5.01 36.45 226.00 226.00 Breakwater Structures 30.55 265.82 679.69 27.53 0.79 29.26 155.87 103.59 Other assets 41.46 Ships 22.13 286.37 71.02 21.10 Dredged Channel 679.69 264.24 (a) Rails 184.54 136.88 102.62 7436.02 202.60 4.53 8.99 0.83 1203.07 16109.34 6430.26 224.98 13.58 9.04 17.62 1879.99 14441.25 Total 903.12 488.91 Leasehold Improvements 4.75 4.75 0.09 0.53 58.34 0.62 Sub-total 1369.90 22.13 1392.03 421.24 67.67 4.13 (4) 25 15 8 3 656 60 15 3. Computer 4. Office equipment 4 5 5. Furniture & fixture 10 10 6. Vehicles Assets used in Heavy Engineering Business (Hi-Tech Manufacturing segment): A Aircrafts Vehicles 2. 1. Sr. No. Category of assets Plant and equipment Estimated useful life of following assets is different than useful life as prescribed in schedule II of the Companies Act, 2013. 14 14 Ships 7. 10 8 b. Sub-category of assets 2. Buildings Add: Capital work-in-progress [refer Note 2(g)] * Transfer (to)/from Investment property Integrated Annual Report 2023-24 Standalone Financial Statements Notes forming part of the Corporate Overview Management Discussion and Analysis Integrated Statutory Financial Report Reports Statements Notes forming part of the Standalone Financial Statements (contd.) NOTE [2] Property, Plant and Equipment & Capital work-in-progress (contd.) a) 1. Maximum useful life (in years) (in years) Sr. No. Asset class Minimum useful life Estimated useful life of the following assets is in line with useful life prescribed in schedule II of the Companies Act, 2013: 3 a. Out of its leasehold land at Hazira, the Company has given certain portion of land for the use to its joint venture company and the lease deed is under execution. Owned assets given on operating lease have been presented separately under respective class of assets as "Leased out" pursuant to Ind AS 116 "Leases". The rate used to determine the amount of borrowing costs eligible for capitalisation is 7.29% (previous year: 6.68%). Additions during the year and capital work-in-progress include 52.30 crore (previous year: 19.47 crore) being borrowing cost capitalised in accordance with Accounting Standard (Ind AS) 23 on "Borrowing Costs". d) b) Depreciation is provided based on useful life supported by the technical evaluation considering business specific usage, the consumption pattern of the assets and the past performance of similar assets. 156.81 Useful life as per Schedule II (in years) 20 8 Roads Carpeted roads-other than RCC 5 5-15 417 LARSEN & TOUBRO Notes forming part of the Standalone Financial Statements Notes forming part of the Standalone Financial Statements (contd.) NOTE [2] Property, Plant and Equipment & Capital work-in-progress (contd.) B. Assets used in Shipbuilding Business: (a part of Precision Engineering System under the Hi-Tech Manufacturing segment): Asset category Useful life as per Schedule II (in years) Revised useful life adopted based on technical evaluation (1) Breakwater structures (2) 40 30* 20 20 15 50 2. 50 30* Plant and equipment (3) (c) Tower cranes (a) Ship lift structures, Control system, Chiller units, Condition monitoring system, Ship position system, Ship transfer system, other ship lift related items (b) Land berth and piled platforms (a) Breakwater & Rock bund & Finger Jetties Dredged channel (in years) Motor cars 10-30 Cranes Revised useful life adopted based on technical evaluation (in years) 18 7 Sr. Category of assets Sub-category of assets No. 1. Plant & equipment Boring/Rolling/Drilling/Milling machines Modular furnace Schedule II (in years) Useful life as per Revised useful life adopted based on technical evaluation (in years) 15 10-30 3 15 Flushing facility 50 15 Load bearing structures 15 10-30 Horizontal autoclaves 5-30 15 Other furnaces 5-15 15 15 259.46 87.35 0.79 Book value crore Property, Plant and Equipment & Capital work-in-progress (contd.) NOTE [2] Notes forming part of the Standalone Financial Statements (contd.) 416 415 * Transfer (to)/from Investment property 10600.21 1397.04 Add: Capital work-in-progress [refer Note 2(g)] 9203.17 100.67 8613.43 367.02 Class of assets 1.14 As at Transfer held for sale Deductions Classified as Impairment Depreciation Foreign currency fluctuation Transfer * For the year 31-3-2022 Up to As at 31-3-2023 held for sale Deductions Classified as Cost/Valuation Foreign currency fluctuation 1-4-2022 Additions 0.53 1542.76 7436.02 Leasehold Improvements 126.40 68.82 10.48 58.34 195.22 195.22 Aircraft 179.53 46.47 5.01 41.46 226.00 226.00 Breakwater Structures 4.75 8.06 12.81 0.62 17917.27 407.50 1.15 16109.34 2247.01 (32.73) Total 879.97 557.26 Up to 31-3-2023 68.35 1437.23 45.20 1392.03 Sub-total 1643.30 10.18 2.01 488.91 353.78 As at 31-3-2023 As at 9194.36 4292.34 152.36 2.40 6.14 (4.08) 1643.30 7703.76 Owned Plant and equipment 2485.96 87.35 762.25 5.49 0.04 687.20 890.18 12.86 (1.65) 0.56 36.24 7866.48 Sub-total 0.17 - 162.55 1.87 160.68 162.72 162.72 Leased out 4138.73 15.02 5040.61 145.82 6.12 131.09 12.86 556.11 63.42 3261.43 Buildings 0.06 (0.06) 701.49 Sub-total (0.06) 144.01 Leasehold 0.06 557.48 Freehold Land 10509.08 31-3-2023 22.16 1.23 1.79 179 123 1.23 2.86 106.67 657.02 3335.56 10.89 LARSEN & TOUBRO 1.70 700.06 1.43 1.70 11.16 143.95 556.11 1.43 11.16 325.91 2.63 296.37 289.47 Office equipment 136.31 458.99 19.16 2.61 0.18 (0.08) 63.09 417.57 595.30 19.89 6.38 0.18 23.65 (0.08) 541.79 Computers 4138.90 29.54 5203.16 145.82 0.56 6.12 (1.65) 892.05 4453.02 9357.08 152.36 2.40 79.68 (0.02) 0.66 2.37 37.30 257.61 Vehicles 45.95 0.24 114.54 1.65 0.10 0.03 (0.28) 13.36 103.18 160.73 1.90 0.64 0.04 (0.30) 2.27 309.12 210.26 31.00 (0.02) 0.64 6.14 1.22 239.44 0.01 69.67 Furniture and fixtures 153.08 10.45 1.22 (4.08) 15.02 0.03 158.64 Office equipment 309.12 30.29 0.15 8.04 331.52 239.44 31.81 0.15 7.62 263.78 500.23 259.46 Furniture and fixtures 160.73 10.36 0.02 4.22 166.89 114.54 13.15 0.02 2.99 124.72 0.06 67.74 22.65 Vehicles 63.86 679.69 679.69 Dredged Channel 210.08 113.43 21.31 92.12 323.51 37.14 42.11 Ships 286.37 102.77 163.90 19.46 0.12 27.37 155.87 266.67 24.19 Other assets 0.12 31.28 113.79 Total Less than 1 year 9.02 1397.04 1781 .17 66.05 More than Maximum useful life (in years) More than 3 years 1-2 years 2-3 years 467.43 2-15 Equipment Road making equipment, Crushing 15 2-15 Equipment Piling, welding and pipeline 15 2-15 Equipment Earth-moving equipment 15 1-2 years 2-3 years 30.84 Computers Servers & Storage & Network Carrying value of Property, plant and equipment hypothecated as collateral for certain borrowings and/or commitments as at March 31, 2024: Nil (as at March 31, 2023 -Nil ) g) Ageing of Capital work-in-progress: h) 420 Particulars Projects in progress crore As at 31-3-2024 As at 31-3-2023 Less than 1 year 854.54 Laptop/Desktop Total 15 12.58 1938.38 Direct operating expenses pertaining from investment property that did not generate rental income 3 30.27 36.33 Direct operating expenses pertaining from investment property that generated rental income 2 113.37 2022-23 2023-24 136.68 Rental income derived from investment property 1 Particulars Sr. No. crore 60 421 3 years (b) Disclosure pursuant to Ind AS 40 "Investment Property" Buildings As on the date of the balance sheet, there are no capital work-in-progress projects whose completion is overdue or has exceeded the cost, based on approved plan. Title deeds of Immovable Properties not held in name of the Company Description of property Freehold Land- Hazira West Gross carrying value as at March 31, 2024 (*crore) 1.01 (i) Amount recognised in the Statement of Profit and Loss for investment property: Carrying value in the financial statements as at March 31, 2024 (*crore) 568.57 Add: Capital work-in-progress [refer Note 3 (iii)] 568.57 Transfer (to)/from Property plant & equipment / Inventory (a) Depreciation is provided based on useful life supported by the technical evaluation considering business specific usage, the consumption pattern of the assets and the past performance of similar assets: Sr. No Class of assets 1. Minimum useful life (in years) 3 Cranes 100 tons & Heavy lift Sub class 2-15 As at As at Assets held for sale Additions Transfer * As at 1-4-2023 Class of assets Book Value Depreciation Cost crore Investment Property NOTE [3] Notes forming part of the Standalone Financial Statements (contd.) Statements Reports Report Financial Property held since which date 1.01 Heirs of Magan Prema and Magan Kuber* No 12 years (Since 2012) Reason for not being held in name of Company For the Land acquired from farmers through Government Acquisition Route. * Irrevocable Power of Attorney given to L&T by the owners, possession is with the Company. Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Statutory The formalities are pending from the authorities side. Whether title deed holder Title deeds held in is a promoter, name of director or their relative or employee Deductions 31-3-2024 681.80 0.08 15.29 0.87 665.72 369.77 113.77 0.02 (0.62) 17.26 97.15 483.54 0.08 (1.18) 0.87 483.93 198.16 31-3-2023 year Assets held for sale As at 31-3-2024 As at 31-3-2024 Land Transfer * Buildings 181.79 16.47 198.26 0.01 0.09 0.10 Total P&M & Office Equipment at project sites costing below 50000 will be depreciated fully in the financial year of acquisition. ii) Assets with acquisition value less than 5000 will be depreciated fully in the financial year of acquisition years) Schedule II (in Sub class Category Useful life as per Property, Plant and Equipment & Capital work-in-progress (contd.) NOTE [2] Notes forming part of the Standalone Financial Statements (contd.) Notes forming part of the Standalone Financial Statements LARSEN & TOUBRO 419 site 3-12 12 Assets deployed at office and project Air-condition and Refrigeration equipments 5 3 6 2-15 3-6 3-6 switches & Routers Office equipments Canteen equipments Fax/Printers/Scanner (MFD), Desktop 4 3-6 audio video & Projectors Water cooler and other office 5 3-6 inkjet/LaserJet printers, Switches Assets deployed at office and project sites 8 Revised useful life adopted Assets deployed at office 10 2-10 Buses & Trucks 8 5-10 Furniture and Fixtures Vehicles Cars Jeeps Motorcycles 5-10 7 5-10 10 5-10 i) 7 97.15 3-6 Others based on technical evaluation (in years) 8 Photographic equipments Assets deployed at office and project sites 15 3 10 Laboratory equipments 15 8-12 Electrical installations HT/LT ELECTRIC SUB-STATION IN MFF II 10 6-22 Assets deployed at office and project sites 17.27 (0.53) 0.02 Buildings Category Plant and equipment which are project specific and deployed at project sites, with useful life of 15 years as per Schedule II, are depreciated over the project duration of 2-4 years. 1. In addition to above: 3 3 3 3 15 Assets deployed at project site Photographic equipment 5. 10 Assets deployed at project site Laboratory equipment 4. Assets deployed at project site (in years) 5 evaluation (in years) 3 2. 2. Air conditioning and Assets deployed at project site 15 3. Canteen equipment Assets deployed at project site 15 refrigeration equipment Any asset purchased for project site with acquisition value less than 50000 for above 5 categories of asset, full cost is depreciated in the same financial year. E. Assets used in Energy Hydrocarbon business (a part of Energy project segment): Jetty construction Land development 12 Minor Plant & Machinery 2222 12 Crane 250 Tonnes 20 30 30 12 2-15 Tunnelling and transmission line 10 12 Office equipment Plant and equipment 15-25 Office building Useful life as per Schedule II (in years) 60 Revised useful life adopted based on technical evaluation (in years) 5-60 2-6 Housing colony Software Specialised software 6526 50 5-60 20 Ships Equipments 1. Useful life as Revised useful life adopted per Schedule II 14.03 11.09 (25.46) 41.39 674.91 (24.35) 41.39 480.86 11.09 (1.11) 194.05 Total Buildings Land Deductions Assets held for sale 1-4-2022 113.87 567.93 Add: Capital work-in-progress [refer Note 3 (iii)] 593.33 1161.26 Transfer (to)/from Property plant & equipment / Inventory As at 31-3-2023 0.06 181.79 13.97 483.93 665.72 crore Depreciation Book Value Class of assets As at Additions Transfer * Cost As at 31-3-2022 For the year Transfer * Assets held for sale Integrated Statutory Financial Report Reports Statements Management Discussion and Analysis Notes forming part of the Standalone Financial Statements (contd.) Property, Plant and Equipment & Capital work-in-progress (contd.) Assets used in Infrastructure business: D. Sr. No. Category of assets Sub-category of assets NOTE [2] based on technical Corporate Overview 1.53 As at As at Deductions 31-3-2023 31-3-2023 181.79 97.15 85.27 85.27 (3.40) 1.53 97.15 386.78 16.81 (3.40) 16.81 Deductions 71.24 Advance recoverable other than in cash 425 LARSEN & TOUBRO Notes forming part of the Standalone Financial Statements Notes forming part of the Standalone Financial Statements (contd.) Particulars (iii) Preference shares-(equity portion): L&T Special Steels & Heavy Forgings Private Limited - 6% Cumulative, non- convertible redeemable at par preference shares, December 8, 2024 [Net of provision 78.33 crore (previous year provision 78.33 crore)] Number of units Face value per unit As at 31-3-2024 ₹ As at 31-3-2024 * crore As at 31-3-2023 * crore 10 15,54,00,000 L&T Special Steels & Heavy Forgings Private Limited - 6% Cumulative, non- convertible redeemable at par preference shares, December 8, 2025 [Net of provision 97.91 crore (previous year provision 97.91 crore)] 10 17,76,00,000 L&T Special Steels & Heavy Forgings Private Limited - 6% Cumulative, non- convertible redeemable at par preference shares, December 8, 2026 [Net of provision 84.41 crore (previous year provision 84.41 crore)] 10 11.37 14,20,80,000 11.37 9.13 L&T - MHI Power Boilers Private Limited L&T MHI Power Turbine Generators Private Limited 10 27,82,736 0.82 0.82 10 37,750 0.04 0.04 10 5,10,000 0.51 0.51 10 10,00,000 1.00 594.51 593.88 2.24 2.24 9.13 (ii) Other deemed equity investment: L&T Infrastructure Development Projects Limited -Series 1 Compulsorily Convertible Preference Shares - January 11, 2033 (Bonus shares) 25,500 100 300 Tidel Park Limited 10 40,00,000 86.59 78.69 VP Global Fibre and Yarns Private Limited [13,600 (previous year: 17,300)] New Vision Wind Power Private Limited [23,420 (previous year: 38,560)] The New India Assurance Company Limited (quoted) 100 136 10 2,342 10 4,45,803 10.14 4.34 Kalyan Halol-Shamlaji Tollway Limited [Net of provision ₹ 1000 (previous year provision 1000)] 10 100 Life Insurance Corporation of India Limited (quoted) 10 Utmal Multi purpose Service Co-operative Society Limited (B Class) [30,000 (previous year: 30,000)] 10 0.10 15,899 1,00,000 L&T Infrastructure Development Projects Limited -(Series 2 Compulsorily Convertible Preference Shares - January 11 2033) (Bonus shares) 10 25,500 L&T Infrastructure Development Projects Limited -(Series 3 Compulsorily Convertible Preference Shares - January 11, 2033) (Bonus shares) 10 1 25,500 L&T Infrastructure Development Projects Limited -(Series 4 Compulsorily Convertible Preference Shares - January 11, 2033) 10 37,000 0.04 0.04 0.04 Total (c)(i)+(ii)+(iii) 605.92 0.04 605.29 (d) Other companies: International Seaport Dredging Limited [Net of provision 15.90 crore (previous year provision 15.90 crore)] 10000 BBT Elevated Road Private Limited 10 0.10 19.35 GH4India Private Limited L&T-Sargent & Lundy Limited 64,83,00,000 648.30 648.30 1606.55 1606.55 (iii) Other deemed equity investment: L&T Aviation Services Private Limited Total (a)(i)+(ii)+(iii) (b) Associate companies: Gujarat Leather Industries Limited [Net of provision 0.56 crore (previous year provision *0.56 crore)] Magtorq Private Limited (c) Joint Venture companies: (i) Investments in fully paid equity instruments: 0.65 0.65 0.65 0.65 30021.59 26324.78 100 2023-24 10 crore L&T Realty Developers Limited - 12% Non-cumulative optionally convertible redeemable at par preference shares, May 26, 2025 42.00 As at 31-3-2023 crore (ii) Preference share considered equity as per terms: L&T Seawoods Limited -10% Non-cumulative, optionally convertible redeemable preference shares, March 30, 2027 2 82,60,00,000 826.00 826.00 L&T Seawoods Limited -10% Non-cumulative, optionally convertible redeemable preference shares, May 12, 2027 2 4,80,00,000 48.00 48.00 L&T Seawoods Limited -10% Non-cumulative, optionally convertible redeemable preference shares, July 14, 2027 2 4,22,50,000 42.25 42.25 L&T Seawoods Limited -10% Non-cumulative, optionally convertible redeemable preference shares, September 3, 2027 2 4,20,00,000 42.00 L&T MBDA Missile Systems Limited Total fair value (ii) independent unregistered valuers[1] 10 9,53,11,850 95.31 95.31 L&T Sapura Offshore Private Limited (Reclassified as subsidiary w.e.f December 27, 2023) 10 0.01 L&T - MHI Power Boilers Private Limited 10 11,93,91,000 119.39 119.39 L&T - MHI Power Turbine Generators Private Limited 10 36,24,06,000 362.41 362.41 L&T Special Steels and Heavy Forgings Private Limited [Net of provision 419.28 crore (previous year provision 419.29 crore)] 10 41,92,84,000 Raykal Aluminium Company Private Limited L&T Sapura Shipping Private Limited (iii) internal architectural department 0.36 L&T Hydrocarbon Caspian LLC independent registered valuers[1] (i) Fair valuation by: Particulars (ii) Details with respect to fair valuation of Investment property: Investment Property (contd.) NOTE [3] Notes forming part of the Standalone Financial Statements (contd.) 180 10 7,35,000 9,000 4.42 4.42 4.42 4.42 L&T Howden Private Limited 10 1,50,30,000 15.03 15.03 AZM 10 96.84 30728.77 102.48 27036.97 Total (A)=(a)+(b)+(c)+(d) Unsecured NOTE [9] Current Assets: Inventories crore As at 31-3-2024 As at 31-3-2023 4.21 44.64 1368.44 1417.29 1.47 23.58 1567.82 1592.87 crore Particulars As at 31-3-2024 As at 31-3-2023 Raw materials [includes goods-in-transit 10.04 crore (previous year: 3.82 crore)] 402.09 337.25 Components [includes goods-in-transit 6.50 crore (previous year: ₹ 8.81 crore)] Construction materials [includes goods-in-transit 119.58 crore (previous year: 275.00 crore)] Manufacturing work-in-progress Secured 220.86 Capital advances: Other non-current assets Contingency deposit (including interest accrued thereon) received from customers of property development business towards their sales tax liability - to be refunded/adjusted depending on the outcome of the legal case. 17.76 16.97 3 Other bank balances (including interest accrued thereon) not available for immediate use being security offered for bids submitted, loans availed, acquisition etc. 563.84 423.06 Total 611.77 468.62 Less: Amount reflected under current assets [refer Note 13] 416.90 339.84 Amount reflected under other financial assets - non-current [refer Note 7] 194.87 128.78 427 LARSEN & TOUBRO Notes forming part of the Standalone Financial Statements Notes forming part of the Standalone Financial Statements (contd.) NOTE [8] Particulars 2 178.98 310.55 (B) Debentures and bonds (i) Subsidiary companies (ii) Joint venture companies (iii) Other debentures & bonds (C) Mutual funds (D) Collateral borrowing and lending obligation (CBLO) (E) Commercial paper (F) Certificate of deposits (G) InviTs 428 crore Notes forming part of the Standalone Financial Statements Integrated Annual Report 2023-24 20224.29 16813.34 802.08 2694.57 2080.59 1026.85 1871.46 195.79 (A) Government and trust securities 148.37 Particulars Note: During the year 18.56 crore (previous year: 2.28 crore) was recognised as expense towards write-down of inventories (net). NOTE [10] 279.33 267.73 Finished goods [includes goods-in-transit 0.59 crore (previous year: 0.12)] Stock-in-trade [includes goods-in-transit 53.45 crore (previous year: 39.62 crore)] Stores and spares [includes goods-in-transit 2.56 crore (previous year: 3.17 crore)] Loose tools Property development related work-in-progress Property development project - completed property 0.87 16.77 228.30 364.92 145.98 164.81 4.70 4.10 2032.37 1753.16 58.10 3520.97 30.29 3428.56 Current Assets: Financial Assets - investments 28.59 30.17 Amount received (including interest accrued thereon) from customers of property development business - to be handed over to housing society on its formation. 16417.71 169041.56 16452.05 136523.30 14311.06 10584.92 909.56 909.57 Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Statutory Financial Report Reports Statements Notes forming part of the Standalone Financial Statements (contd.) NOTE [6] Non-current Assets: Financials Assets - Loans crore As at 31-3-2023 401.50 As at 31-3-2024 As at 31-3-2023 3131.38 426 Book Value (B) Investment in preference shares of Joint Venture companies: (Fair value debt portion): L&T Special Steels & Heavy Forgings Private Limited - 6% Cumulative, non-convertible redeemable at par preference shares, December 8, 2024 [Net of provision * 77.77 crore (previous year provision 77.77 crore)] L&T Special Steels & Heavy Forgings Private Limited - 6% Cumulative, non-convertible redeemable at par preference shares, December 8, 2025 [Net of provision 79.12 crore (previous year provision 79.12 crore)] 10 15,54,00,000 10 17,76,00,000 L&T Special Steels & Heavy Forgings Private Limited - 6% Cumulative, non-convertible redeemable at par preference shares, December 8, 2026 [Net of provision * 56.28 crore (previous year provision 56.28 crore)] 10 14,20,80,000 Total -(B) Total Non Current Investment =(A)+(B) 30728.77 27036.97 crore Details of quoted/unquoted investments: Particulars (a) Aggregate amount of quoted investments and market value thereof; Book Value Market Value (b) Aggregate amount of unquoted investments; (c) Aggregate amount of Impairment in value of investments 75.60 75.60 Particulars Unsecured loan and advances to related parties: Subsidiary companies, considered good. Subsidiary companies, considered doubtful Less: Allowance for expected credit loss 148.99 17.38 194.87 128.78 168.83 51.97 11.94 27.40 24.90 50.03 0.44 596.84 0.05 407.22 crore Sr. As at Particulars 31-3-2024 As at 31-3-2023 No. 1 178.48 As at 31-3-2023 190.67 41.68 As at 31-3-2024 211.58 33.10 crore Joint venture companies, considered good Less: Allowance for expected credit loss Unsecured others loans, considered good As at 31-3-2024 1907.74 1730.38 NOTE [7] Non current Assets: Financial Assets - Others Particulars Unsecured security deposits, considered good: Less: Allowance for expected credit loss Fixed deposits with banks (maturity more than 12 months) As at 31-3-2024 crore Cash and bank balances not available for immediate use [refer Note 7(a)] Embedded derivative receivables Premium receivable on financial guarantee contracts Other receivables Note 7(a) Particulars of cash and bank balances not available for immediate use 1905.11 1730.38 177.35 0.21 579.06 174.73 0.71 3306.81 Forward contract receivables 899.67 As at 31-3-2024 Face value 505.35 314.46 45.68 1.60 358.54 146.81 Add: Intangible assets under development [refer Note 4(c)] 16.39 163.20 422 Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Statutory Financial Report Reports Statements Notes forming part of the Standalone Financial Statements (contd.) NOTE [4] 1.89 Intangible assets & Intangible assets under development (contd.) 45.49 Sub-total 45.39 Technical know-how 99.85 99.85 81.45 6.59 88.04 11.81 New Product Design and Development 6.26 6.26 6.26 6.26 Platforms and Courses 88.39 28.47 116.86 3.62 23.63 27.25 89.61 461.75 236.99 (a) crore 17.54 28.47 74.59 28.47 17.02 28.47 45.49 (b) Depreciation is provided based on useful life supported by the technical evaluation considering business specific usage, the consumption pattern of the assets and the past performance of similar assets: Sr. No Class of assets 1. Specialised software 2. Technical know-how 3. Platforms and courses (c) Ageing of Capital work-in-progress: Particulars Projects in progress Minimum useful life (in years) 2 5 3 2022-23 Additions during the year 1.32 58.37 Total FY 2023-24 FY 2022-23 2788.12 75.00 Class of assets Internal development Acquired Total external Internal development Acquired Total external Specialised software 21.37 21.37 17.02 17.02 Technical know-how 35.68 35.68 Platforms and courses 16.22 16.22 Maximum useful life (in years) 1.60 223.13 Book Value As at 1-4-2023 Additions Deductions As at 31-3-2024 Up to 31-3-2023 For the year Deductions Up to 31-3-2024 As at 31-3-2024 Intangible assets Specialised software 282.38 21.37 303.75 236.99 17.33 254.32 49.43 Technical know-how 99.85 Amortisation 35.68 Cost Class of assets 2181.94 5045.06 3353.18 4182.72 [1] Independent valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017 Note: Above valuation is based on government rates, market research, market trend and comparable values as considered appropriate. (iii) Ageing of Capital work-in-progress: Particulars Projects in progress crore As at 31-3-2024 As at 31-3-2023 Less than 1 year 356.91 1-2 years 2-3 years 170.82 32.83 More than 3 years 32.77 593.33 Total Less than 1 year 1-2 years 2-3 years More than 3 years Total NOTE [4] As on the date of the balance sheet, there are no capital work-in-progress projects whose completion is overdue or has exceeded the cost, based on approved plan. Other Intangible assets & Intangible assets under development crore 15.46 135.53 20.68 178.96 crore Cost Amortisation Book Value As at 1-4-2022 Additions Deductions As at 31-3-2023 Up to 31-3-2022 For the year Deductions Up to 31-3-2023 As at 31-3-2023 Class of assets Intangible assets Specialised software 267.25 17.02 1.89 282.38 26.63 88.04 Add: Intangible assets under development [refer Note 4(c)] 427.61 108.72 26.81 New Product Design and Development 6.26 6.26 6.26 6.26 Platforms and Courses 116.86 17.54 134.40 27.25 31.06 58.31 76.09 Sub-total 505.35 74.59 579.94 358.54 69.07 152.33 8 8 4 1354.55 10 40.36 KWD 1000 980 2 1 7,79,86,899 20,31,69,279 805.25 805.25 9675.98 9675.98 SAR 1000 7,500 11.08 11.08 10 10 2,47,50,000 19,91,42,091 318.50 318.50 1394.91 22.27 107.72 0.05 45.60 10 50,000 0.05 0.05 10 10 1,63,92,30,125 5918.65 5918.65 10 7,41,29,99,999 7412.99 3759.00 SAR 1000 1,000 10 10 OMR 1 10 OMR 1 10 OMR 1 2,28,96,63,205 5,10,51,164 2,10,000 16,71,60,700 39,65,500 1,40,39,79,846 20,19,230 2289.66 2289.66 51.05 107.72 45.60 22.27 625 10 95,50,000 9.55 10 10,000 0.01 28414.39 24717.58 Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial Reports Statements Notes forming part of the Standalone Financial Statements (contd.) NOTE [5] Details of Non-current Assets: Financial Assets - Investments (contd.) Number of units Particulars 53.16 SAR 1000 53.16 USD 100 1.05 1.05 10 10 21.85 90,00,000 9.00 9.00 IDR 1000000 25,700 16.46 16.46 10 20,50,000 2.05 10 20,50,000 2.05 10 90,00,000 79.51 79.51 80,000 4,56,00,000 10 10 Investment in equity instruments (a) Subsidiary companies (b) Associate companies (c) Joint venture companies (d) Other companies Details of Non-current Assets: Financial Assets - Investments Particulars (A) Investments in fully paid equity instruments (a) Subsidiary companies: (i) Investments in fully paid equity instruments: L&T Valves Limited Bhilai Power Supply Company Limited Hi-Tech Rock Products & Aggregates Limited Kesun Iron & Steel Company Private Limited (previous year * 95,000) L&T Aviation Services Private Limited L&T Capital Company Limited L&T Cassidian Limited (previous year provision: 0.05 crore) L&T Finance Limited (quoted) (formerly known as L&T Finance Holdings Limited) L&T Metro Rail (Hyderabad) Limited L&T Hydrocarbon Saudi Company LLC [130.39 (previous year: 130.39)] L&T Power Development Limited L&T Energy Green Tech Limited Particulars L&T Electromech LLC [171.70 (previous year: 171.70)] Non-current Assets: Financial Assets- Investments Notes forming part of the Standalone Financial Statements (contd.) crore As at 31-3-2024 As at 31-3-2023 Less than 1 year 21.66 1-2 years 2-3 years More than 3 years Total 4.97 26.63 Less than 1 year 15.27 More than 1-2 years 2-3 years Total 3 years 1.12 16.39 As on the date of the balance sheet, there are no capital work-in-progress projects whose completion is overdue or has exceeded the cost, based on approved plan. 423 LARSEN & TOUBRO Notes forming part of the Standalone Financial Statements NOTE [5] L&T Realty Developers Limited L&T Heavy Engineering LLC [ 183.89 (previous year: 183.89] L&T Seawoods Limited 96.84 30728.77 102.48 27036.97 Number of units Face value per unit As at 31-3-2024 As at 31-3-2024 As at 31-3-2023 crore * crore 100 18,00,000 161.23 161.23 10 49,950 0.05 0.05 10 2,65,50,000 26.55 26.55 4.42 605.29 4.42 605.92 26324.78 30021.59 L&T Modular Fabrication Yard LLC [171.70 (previous year: 171.70)] L&T Innovation Campus (Chennai) Limited (merged with L&T Seawoods Limited on April 1, 2023) Larsen & Toubro Kuwait Construction General Contracting Company W.L.L. [66.04 (previous year: 66.04)] 424 L&T Technology Services Limited (quoted) LTI Mindtree Limited (quoted) Larsen & Toubro Arabia LLC L&T Geostructure Private Limited L&T Construction Equipment Limited Larsen & Toubro (Saudi Arabia) LLC per unit L&T Infrastructure Engineering Limited (Divested w.e.f. January 3, 2024) PT Larsen & Toubro Corporate Park (Powai) Private Limited Business Park (Powai) Private Limited L&T Energy Hydrocarbon Engineering Limited L&T Global Holdings Limited L&T Semiconductor Technologies Limited L&T Offshore Private Limited (formerly known as L&T Sapura Offshore Private Limited) crore As at 31-3-2024 As at 31-3-2023 L&T Network Services Private Limited 199.96 LARSEN & TOUBRO 1499.59 2224.35 As at 31-3-2024 As at 31-3-2023 4393.72 4115.10 758.90 758.30 736.26 2038.24 6802.86 8231.04 5307.70 742.39 5450.41 (4.68) 71246.85 64141.11 [4] [3] [2] [1] 224.01 (130.89) 1.67 62.21 (4.77) 228.78 20.42 (21.47) 35863.32 26201.60 40961.13 (26.66) 22715.19 Capital reserve: It represents the gains of capital nature which mainly include the excess of value of net assets acquired over consideration paid by the Company for business amalgamation transactions in earlier years. 74.62 125.69 (18.58) (129.03) 93.20 254.72 66.89 Capital reserve on business combination: It arises on transfer of business between entities under common control. It represents the difference, between the amount recorded as share capital issued plus any additional consideration in the form of cash or other assets and the amount of share capital of the transferor. Integrated Report [5] General reserve: The Company created a General Reserve in earlier years pursuant to the provisions of the Companies Act, 1956 where in certain percentage of profits were required to be transferred to General Reserve before declaring dividends. As per Companies Act 2013, the requirements to transfer profits to General Reserve is not mandatory. General Reserve is a free reserve available to the Company. Redeemable non-convertible inflation linked debentures [refer Note 19(a)(ii)] 7286.80 7286.80 9792.22 9792.22 Redeemable non-convertible fixed rate debentures [refer Note 19(a)(i)] Total As at 31-3-2023 Secured Unsecured Total Secured Unsecured Particulars As at 31-3-2024 crore Non-current liabilities: Financial Liabilities - Borrowings NOTE [19] Notes forming part of the Standalone Financial Statements (contd.) Statements Reports Financial Statutory 8770.19 Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 436 Capital redemption reserve: Created on: (a) Buyback of equity shares out of free reserves and securities premium in accordance with Section 69 of the Companies Act, 2013 (b) Redemption of preference shares out of profits in accordance with Section 55(2)(c) of the Companies Act, 2013. Debenture redemption reserve (DRR): The Ministry of Corporate Affairs vide notification dated August 16, 2019, amended the Companies (Share capital and Debenture) Rules, 2014 by which the Company is no longer required to create DRR towards the debentures issued. Earlier to this amendment, the Company was required to maintain a DRR of 25% of the value of debentures issued, either by a public issue or on a private placement basis and the amounts credited to the DRR was not to be utilised by the Company except to redeem debentures. The above amount represents the DRR created out of profits of the Company prior to the said notification. 260.00 As at 31-3-2023 50.56 The Board of directors, at their meeting held on May 8, 2024 recommended the final dividend of 28 per equity share for the year ended March 31, 2024 subject to approval from shareholders. On approval, the total dividend outgo is expected to be 3849.07 crore based on number of shares outstanding as at March 31, 2024. During the year ended March 31, 2024, the Company paid the final dividend of 24 per equity share for the year ended March 31, 2023 amounting to 3373.56 crore and a special dividend of 6 per equity share amounting to 843.39 crore. reserves. Accordingly, the Company has bought back 3,12,50,000 equity shares of face value of 2 each, representing 2.22% of the number of equity shares in the paid-up share capital, at a price of 3,200 per share aggregating to 10,000 crore. Consequently, the equity share capital stands reduced by 6.25 crore. The premium on buyback of 9993.75 crore, transaction cost (net of tax) with respect to the buyback of 26.37 crore and the tax on buyback of 2253.33 crore have been adjusted against securities premium account and free The Company continues its policy of a conservative capital structure which has ensured that it retains the highest credit rating even amidst an adverse economic environment. Low gearing levels also enable the Company to navigate business challenges on one hand and raise growth capital on the other. This policy also provides flexibility of fund-raising options for future, which is especially important in times of global economic volatility. The gross debt equity ratio is 0.35:1 as at March 31, 2024 (as at March 31, 2023 0.25:1). During the year ended March 31, 2024, the shareholders approved the proposal of buyback of equity shares of the Company, as recommended by its Board of Directors. The settlement of all valid bids and extinguishment of equity shares bought back were completed on September 28, 2023. The balance in share options (net) account as at March 31, 2024 is 125.66 crore (previous year: 74.62 crore), including 20.78 crore (previous year: 30.86 crore) for which the options have been vested to employees as at March 31, 2024. Capital Management: Expected volatility is based on the historical volatility of the Company's share price applicable to the total expected life of each option. *7.80 per option 62.26 per option 1553.63 per option 25.03% 6.77% 2.83 Years 2022-23 135.63 per option 2479.86 per option 65.90 per option 18.64% 2.75 Years 7.05% 2023-24 (vii) Method used to determine expected volatility (vi) Weighted average exercise price (v) Weighted average share price (iv) Weighted average expected dividends over the life of the options (iii) Weighted average expected volatility (ii) Weighted average expected life of options 435 (25.77) LARSEN & TOUBRO Notes forming part of the Standalone Financial Statements (contd.) 266.25 (25.77) 10.84 10.84 Term loan from banks [refer Note 19(b)] As at 31-3-2024 crore Debt instruments through other comprehensive income [refer Note 1(II)(m)(i)] Cost of hedging reserve Cash flow hedging reserve Hedging reserve [refer Note 1(II)(m)(iii)] Foreign currency translation reserve [refer Note 1 (II)(s)(iv)] Retained earnings General reserve [5] Debenture redemption reserve [4] Deferred employee compensation expense Employee share options outstanding Employee share options (net) [refer Note 1(II)(r)] Securities premium [refer Note 1(II)(p)] Capital redemption reserve [3] Capital reserve on business combination [2] Capital reserve [1] Particulars Other equity NOTE [18] Notes forming part of the Standalone Financial Statements 2138.92 9390.85 2104.05 Less: Allowance for expected credit loss 0.87 6.05 107.03 152.26 Other recoverable 2200.17 1588.91 Premium receivable on financial guarantee contracts 25.13 26.85 Forward contract receivable Embedded derivative receivable Doubtful advances: Deferred credit sale of ships Other loans and advances 238.14 325.19 158.39 228.40 27.11 182.98 210.09 Less: Allowance for expected credit loss 210.09 158.31 27.11 107.90 757.62 As at 31-3-2024 crore As at 31-3-2023 36.10 5.90 5.90 26.94 63.04 168.29 168.29 crore As at 31-3-2023 449.12 0.76 0.45 496.96 448.67 Particulars Unsecured security deposits, considered good Less: Allowance for expected credit loss As at 31-3-2024 497.72 Receivable from related parties: Subsidiary companies 1047.69 Less: Allowance for expected credit loss 6.50 762.90 5.28 1041.19 Joint venture companies 316.56 343.67 343.67 April 23, 2,50,000 2. Redeemable at face value at the end of 8th year from the date of allotment. payable annually 2022 Terms of repayment for debentures outstanding as on 31-3-2024 Interest for the year 2023-24 483.83 8.00% p.a. As at 31-3-2023 crore As at 31-3-2024 * crore 483.93 April 25, 2,50,000 1. (*) Date of allotment debenture Face value per Sr. No. Unsecured redeemable non-convertible fixed rate debentures (privately placed): 19(a) (i) Weighted average risk-free interest rate 9390.85 11931.14 11931.14 2104.05 483.93 8.00% p.a. 2023 payable annually 4267.01 3527.90 432 Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated 2023 1999.71 7.725% 2142.15 March 28, 1,00,000 2138.92 5. 2020 483.69 April 23, 2,50,000 4. 2021 483.63 8.00% p.a. 483.73 April 23, 2,50,000 3. Redeemable at face value at the end of 7th year from the date of allotment. payable annually No. vii. Weighted average fair values of options granted during the year is 2314.37 (previous year: 1496.52) per option. Sr. As at 31-3-2023 Number of Shareholding shares As at 31-3-2024 Number of Shareholding Name of the shareholders (d) Shareholders holding more than 5% of equity shares as at the end of the year: - Equity share capital (contd.) NOTE [17] Notes forming part of the Standalone Financial Statements (contd.) Notes forming part of the Standalone Financial Statements LARSEN & TOUBRO 433 The Company has only one class of share capital, i.e., equity shares having face value of 2 per share. Each holder of equity share is entitled to one vote per share. (c) Terms/rights attached to equity shares: 281.10 274.93 1,40,54,82,190 1,37,46,68,619 Issued, subscribed and fully paid up equity shares outstanding at the end of the year 281.01 0.09 4,53,067 6.25 0.08 4,36,429 3,12,50,000 Add: Shares issued on exercise of employee stock options during the year Less: Shares extinguished on buy-back 281.10 1,40,50,29,123 1,40,54,82,190 % Issued, subscribed and fully paid up equity share outstanding at the beginning of the year 14.18 % (f) The aggregate number of equity shares allotted as fully paid up by way of bonus shares in immediately preceding five years ended March 31, 2024 are NIL (previous period of five years ended March 31, 2023: 46,67,64,755 shares) [2] The equity shares will be issued at a premium of 27.41 crore (previous year: 25.57 crore) 0.23[2] crore (at face value) 11,74,574 0.33[2] as fully paid equity shares to be issued crore (at face value) Number of As at 31-3-2023 16,29,198 [1] Note 17 (h) below for terms of employee stock option schemes Employee stock options granted and outstanding [1] As at 31-3-2024 Number of equity shares to be issued as fully paid Particulars (e) Shares reserved for issue under options outstanding on un-issued share capital: 15,17,12,116 19,48,87,516 Life Insurance Corporation of India L&T Employees Trust 11.42 16,04,73,308 11.04 13.70 shares 19,25,58,158 crore As at 31-3-2023 Number of shares shares 14.22 11.65 48924.97 8189.12 49327.88 7756.71 12516.49 11886.84 36408.48 37441.04 crore As at 31-3-2023 As at 31-3-2024 Less: Allowance for expected credit loss Other loans and advances Government grants receivable Advance recoverable other than in cash Retention money Unbilled Revenue Contract Assets [refer Note 41(d)] Particulars Other current assets NOTE [16] Notes forming part of the Standalone Financial Statements (contd.) Statements Reports Report 0.99 0.99 0.67 0.67 NOTE [17] Equity share capital crore As at 31-03-2024 Number of 281.10 1,40,54,82,190 274.93 1,37,46,68,619 8037.00 40,18,50,00,000 8037.00 40,18,50,00,000 * crore Number of shares (g) The aggregate number of equity shares issued pursuant to contract, without payment being received in cash in immediately preceding last five years ended on March 31, 2024 - NIL (previous period of five years ended March 31, 2023: NIL) * crore 57128.31 57096.24 Particulars (b) Reconciliation of the number of equity shares and share capital: Equity shares of 2 each Issued, subscribed and fully paid up: Equity shares of 2 each Authorised: shares As at 31-3-2024 Number of Particulars (a) Share capital authorised, issued, subscribed and paid up: As at 31-3-2023 Particulars (h) Stock option schemes Terms: 4,36,429 (C) Options allotted 7.80 21,424 135.63 9,70,968 (B) Options granted (*) 224.86 17,18,419 exercise price Weighted average No. of stock options Weighted average exercise price (₹) 219.74 11,74,574 (A) Options granted and outstanding at the beginning of the year options No. of stock Particulars 2022-23 2023-24 iii. The number and weighted average exercise price of stock options are as follows: Equity share capital (contd.) NOTE [17] Notes forming part of the Standalone Financial Statements (contd.) Statements 221.13 Reports 4,53,067 (D) Options lapsed ix. (i) viii. The fair value has been calculated using the Black-Scholes Option Pricing Model and the significant assumptions and inputs to estimate the fair value of options granted during the year are as follows: Current Assets: Financial Assets - Others vi. During the year, the Company has recovered ₹2.41 crore (previous year: 1.12 crore) from its subsidiary companies towards the stock options granted to their employees, pursuant to the employee stock option schemes. Expense on Employee Stock Option Schemes debited to the Statement of Profit and Loss during 2023-24 is 91.25 crore (previous year: 28.16 crore)[Note 34]. The entire amount pertains to equity-settled employee share-based payment plans. The expenses includes 0.09 crore (previous year: 0.19 crore) charged by subsidiary companies towards the stock options granted to Company's employees. B. A. In respect of stock options granted pursuant to the Company's stock options schemes, the fair value of the options is treated as discount and accounted as employee compensation over the vesting period. V. iv. Weighted average share price at the date of exercise for stock options exercised during the year is ₹2945.59 (previous year: 1779.07) per share. 253.70 3,62,281 253.80 2,51,018 (F) Options exercisable at the end of the year out of (E) above 219.74 11,74,574 170.25 16,29,198 (E) Options granted and outstanding at the end of the year 225.94 1,12,202 198.98 79,915 227.60 Report Financial Statutory 2023-24 2022-23 267.10 08-07-2023 onwards 08-07-2024 onwards 2023-24 2022-23 267.10 267.10 1-7-2007 onwards 1-7-2008 onwards 9,60,021 14,38,460 7.80 7.80 23-5-2003 onwards 23-5-2004 onwards 2,14,553 2,79,959 4 Options granted and outstanding at the beginning of the year Vesting commences on 3 Grant dates 2 Grant price (*) 1 2023-24 2022-23 No. Series reference 2006(B) 2006(A) 2003(B) Sr. The details of the grants under the aforesaid schemes are summarised below: ii. 434 Options can be exercised anytime within a period of 7 years from the date of grant and would be settled by way of issue of equity shares. Management has discretion to modify the exercise period. The grant of options to the employees under the stock option schemes is on the basis of their performance and other eligibility criteria. During the year, the Company has issued the new ESOP series 2006(B) in which options are vested equally over a period of 4 years. The options are vested equally over a period of 4 years for series 2003(B) and 2006(B), 5 years in the case of series 2006(A), subject to the discretion of the management and fulfillment of certain conditions. B. A. 5 Options lapsed 6 Options granted 20,995 4,92,308 7 Integrated Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 6.31 3.59 2.97 4.88 5.78 4,73,060 6,16,459 3,09,514 i. 1,95,834 9 Weighted average remaining contractual life of options (in years) Options yet to vest 2,14,553 5,47,652 9,60,021 4,73,060 18,719 2,38,138 3,43,562 12,880 Options vested 6,08,486 8 Options granted and outstanding at the end of the year, of which 5,600 4,78,660 53,320 94,393 17,809 21,424 69,021 3,59,049 3,84,046 77,380 Options exercised 5,95,606 NOTE [15] Notes forming part of the Standalone Financial Statements (contd.) Subsidiary companies, considered good Subsidiary companies, considered doubtful Less: Allowance for expected credit loss NOTE [10] (contd.) Details of quoted/unquoted investments: crore Particulars (a) Aggregate amount of quoted current investments and market value thereof; Book Value p.a. payable payable annually 483.58 8.00% p.a. Redeemable at face value at the end of 9th year from the date of allotment. Redeemable at face value at the end of 10th year from the date of allotment. Redeemable at face value at the end of 5th year from the date of allotment. annually 6. 1,00,000 November 9, 2023 2059.23 7.66% p.a. payable Redeemable at face value at the end of 2nd year from the date of allotment. annually 7. 1,00,000 November 2, 2023 1546.39 7.58% p.a. payable annually Notes forming part of the Standalone Financial Statements (contd.) 8. Notes forming part of the Standalone Financial Statements 429 360 43.97 42.95 10,00,000 390 47.47 46.29 10,00,000 410 49.66 48.36 10,00,000 350 42.14 41.02 10,00,000 960 114.86 112.77 10,00,000 1,040 124.78 122.43 736.26 742.39 LARSEN & TOUBRO 10,00,000 April 28, 2020 2673.77 Non-current liabilities: Financial Liabilities - Borrowings (contd.) 19(a) (ii) Sr. No. Face value per debenture Date of allotment As at 31-3-2024 * crore As at 31-3-2023 crore (*) Interest for the year 2023-24 12. 10,00,000 May 6, 2020 1544.85 1542.63 7.25% p.a. payable annually 2616.75 7.25% p.a. Terms of repayment for debentures outstanding as on 31-3-2024 Redeemable at face value at the end of 4th year from the date of allotment. 13. 10,00,000 April 23, 2020 payable annually 14. 10,00,000 NOTE [19] Notes forming part of the Standalone Financial Statements (contd.) Notes forming part of the Standalone Financial Statements LARSEN & TOUBRO 2669.51 7.70% p.a. payable annually Redeemable at face value at the end of 1st year from the date of allotment. 9. 1,00,000 June 8, 2023 1534.27 10. 1,00,000 June 8, 2023 1040.80 - - Redeemable at face value at the end of 5th year from the date of allotment. 10,00,000 7.33% p.a. payable annually 7.335% Redeemable at face value at the end of 1st year from the date of allotment. 11. 1,00,000 June 8, 2023 1058.67 - p.a. payable annually 7.38% p.a. payable annually Redeemable at face value at the end of 1st year from the date of allotment. 437 Redeemable at face value at the end of 1st year from the date of allotment. April 20, 2020 39.52 330 153,800 16.72 16.87 10,00,000 1,450 152.70 152.47 10,00,000 1,300 137.30 137.30 10,00,000 102.47 10,00,000 193.10 10,00,000 150 50 15.82 94.90 10,00,000 262.80 9.81% L&T Metro Rail (Hyderabad) Limited NCD June 18, 2035 9.81% L&T Metro Rail (Hyderabad) Limited NCD November 2, 2035 9.85% L&T Metro Rail (Hyderabad) Limited NCD January 28, 2036 6.68% L&T Metro Rail (Hyderabad) Limited SR C 30 NCD April 30, 2027 Total- (i) 10,00,000 189.03 1,000 10,00,000 6.55% L&T Finance Limited NCD November 3, 2028 7.15% L&T Finance Limited NCD September 16, 2024 Corporate Overview Management Discussion and Analysis Integrated Statutory Financial Report Reports Statements Notes forming part of the Standalone Financial Statements (contd.) NOTE [10] (contd.) Details of current investments in Subsidiary companies and Joint venture companies Particulars Number of units Face value per unit As at 31-3-2024 As at 31-3-2024 As at 31-3-2023 crore crore Debentures and Bonds (quoted): (i) Subsidiary companies: 9.00% L&T Finance Limited NCD April 15, 2024 7.75% L&T Finance Limited NCD July 10, 2025 7.95% L&T Finance Limited NCD July 28, 2025 6.75% L&T Finance Limited NCD November 3, 2028 7.85% L&T Finance Limited NCD July 9, 2025 290.47 10,00,000 166.47 10,00,000 230 26.13 26.29 10,00,000 240 27.57 27.58 10,00,000 270 31.29 31.23 10,00,000 280 32.74 32.56 10,00,000 290 34.18 33.90 10,00,000 310 37.65 37.22 10,00,000 23.46 23.33 210 10,00,000 10,00,000 Statutory 4,220 436.36 432.35 758.90 2038.24 (ii) Joint Venture companies: 8.80% Kudgi Transmission Limited NCD April 25, 2023 8.80% Kudgi Transmission Limited NCD April 25, 2024 8.80% Kudgi Transmission Limited NCD April 25, 2025 8.80% Kudgi Transmission Limited NCD April 25, 2026 8.80% Kudgi Transmission Limited NCD April 25, 2027 9.14% Kudgi Transmission Limited SR-K NCD April 25, 2028 9.14% Kudgi Transmission Limited SR-L NCD April 25, 2029 9.14% Kudgi Transmission Limited SR-M NCD April 25, 2030 9.14% Kudgi Transmission Limited SR-N NCD April 25, 2031 9.14% Kudgi Transmission Limited SR-O NCD April 25, 2032 9.50% Kudgi Transmission Limited SR-P NCD April 25, 2033 9.50% Kudgi Transmission Limited SR-T NCD April 25, 2034 9.50% Kudgi Transmission Limited SR-R NCD April 25, 2035 9.50% Kudgi Transmission Limited SR-S NCD April 25, 2036 9.50% Kudgi Transmission Limited SR-T NCD April 25, 2037 9.50% Kudgi Transmission Limited SR-U NCD April 25, 2038 9.50% Kudgi Transmission Limited SR-V NCD April 25, 2039 9.50% Kudgi Transmission Limited SR-W NCD April 25, 2040 Total- (ii) 40.39 10,00,000 10,00,000 170 18.41 18.57 10,00,000 180 19.66 19.82 10,00,000 200 22.03 22.18 16.24 Associate/Joint venture companies, considered good 1335.19 7.20% p.a. annually Undisputed: crore As at 31-3-2023 Not due Less than 6 months - 6 months 1 year Outstanding for the following periods from the due date of payment 1-2 years 2-3 years More than 3 years Total 8093.69 2593.31 1.23 2362.04 9.30 1057.02 9.14 2158.34 99.51 35525.60 119.18 - · Considered good 19261.20 - Credit impaired Disputed: - Considered good 104.49 21.57 60.35 Particulars 42.28 [a] Current assets: Financial assets - Trade receivables ageing (contd.) Notes forming part of the Standalone Financial Statements (contd.) - Credit impaired Gross trade receivables 21000.08 10707.34 2438.08 1951.01 1280.05 953.64 164.58 3733.77 1407.57 164.58 41110.33 Less: Allowance for expected credit loss 4148.78 Total 36961.55 430 Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Statutory Financial Report Reports Statements NOTE [11] - Credit impaired Gross trade receivables As at 31-3-2023 3.42 3437.56 361.39 3.54 500.06 3939.21 3802.49 crore As at 31-3-2024 As at 31-3-2023 282.43 297.50 129.90 129.10 0.75 0.71 416.90 339.84 829.98 767.15 431 LARSEN & TOUBRO Notes forming part of the Standalone Financial Statements NOTE [14] Current Assets: Financials Assets - Loans Particulars Unsecured loans and advances to related parties: As at 31-3-2024 3026.17 409.56 crore [1] Real Estate (Regulation and Development) Act, 2016 Cash and bank balances not available for immediate use [refer Note 7(a)] 19365.69 8115.26 2594.54 2431.69 1108.44 1033.97 213.91 3505.73 1262.66 213.91 37121.35 Less: Allowance for expected credit loss 3968.77 Total 0.20 33152.58 Current Assets: Financials Assets - Cash and cash equivalents Particulars Balance with banks Cheques and draft on hand Cash on hand Fixed deposits with banks (maturity less than 3 months) NOTE [13] Current Assets: Financials Assets - Other bank balances Particulars Fixed deposits with banks Earmarked balances with banks-unclaimed dividend Earmarked balances with banks-Section 4(2)(1)(D) of RERA[1] NOTE [12] payable 94.10 105.90 Current maturity of long-term borrowings [refer Note 24] (1) The principal amount has been calculated as [{Average Ref WPI as at reporting period/Average Ref WPI (as at 23/5/2013)} x Face Value] 19(b) Details of term Loans (Unsecured): 23 As at 31-3-2023 crore Rate of Interest for the year 2023-24 878.18 USD SOFR + Spread [1] USD SOFR + Spread [1] Sr. As at 31-3-2024 No. * crore 1 2 892.07 1248.34 1226.91 3 4 Total 2140.41 2150.43 Less: 1.49 2138.92 29.44 9.00% p.a. payable monthly 15.90 8.40% p.a. payable monthly Terms of repayment of term loan outstanding as on 31-3-2024 143.51 Repayable on November 30, 2025 payment Principal as on the 15. 10,00,000 January 24, 2020 1062.95 6.72% p.a. Total Less: payable annually 15535.41 5743.19 9792.22 12677.79 5390.99 Current maturity of long-term borrowings [refer Note 24] 7286.80 Non-current borrowings [refer Note 19] Unsecured redeemable non-convertible inflation linked debentures: Face value per debenture (*) Date of allotment As at 31-3-2024 * crore As at 31-3-2023 * crore Interest for the year 2023-24 Terms of repayment for debentures outstanding as on 31-3-2024 10,00,000 May 23,2013 143.51(1) 1.65% p.a. Less: payable on Inflation Adjusted date of coupon Repayable on April 14, 2025 46.38 Current maturity of long-term borrowings [refer Note 24] 2104.05 Non-current borrowings [refer Note 19] 333.10 325.78 8.44 36961.55 7.32 33152.58 crore Particulars Undisputed: - Considered good 20894.18 - Credit impaired As at 31-3-2024 Not due Outstanding for the following periods from the due date of Less than 6 months - 1-2 years 2-3 years 6 months 1 year payment More than 3 years Total 10453.61 2437.28 0.80 1854.39 2.52 1271.25 8.60 2577.29 38.26 39488.00 50.18 Disputed: - - Considered good 214.76 206.32 33145.26 36953.11 3643.00 [1] Represents unsecured term loans obtained in foreign currency. 438 Integrated Annual Report 2023-24 Market Value (b) Aggregate amount of unquoted current investments; Book Value (Accounted based on NAV) Market Value As at 31-3-2024 As at 31-3-2023 13891.15 13891.15 13148.22 13148.22 1499.59 1422.60 253.73 2224.35 NOTE [11] Current Assets: Financial Assets - Trade receivables Particulars Unsecured, considered good Less: Allowance for expected credit loss Credit Impaired Less: Allowance for expected credit loss [a] Current assets: Financial assets - Trade receivables ageing crore As at 31-3-2024 40895.57 As at 31-3-2023 36788.26 3942.46 4851.72 Financial In respect of matters at (f), the cash outflows, if any, could generally occur up to six years, being the period over which the validity of the guarantees extends. Integrated Annual Report 2023-24 246.89 282.41 43.66 74.94 143.97 114.26 62.06 68.97 8.03 8.70 503.14 644.55 20.31 62.31 81.59 57.58 2022-23 2023-24 crore 446 Recoveries from subsidiary and associates Other provisions/(reversal of provisions) Loss on cancellation of equity shares on capital reduction by subsidiary Provision/(reversal of provision) on loans given to/investments in subsidiary Exchange (gain)/loss (net) Allowance for expected credit loss (net) Corporate social responsibility 80.34 Less: Allowance for expected credit loss written back 21.19 279.55 (417.25) (99.93) 729.13 969.03 137.19 150.98 22.96 45.89 135.24 546.44 158.20 592.33 335.78 577.75 76.01 81.53 24.56 19.62 45.44 45.29 73.46 79.67 121.92 115.35 0.99 1.06 606.46 (70.24) Bad debts and advances written off (net of written back) Bank charges 98.32 91.54 25.60 26.76 180.27 197.74 7409.77 7847.40 2022-23 2023-24 crore Recoveries on account of deputation 316.04 Staff welfare expenses Expenses on employees stock option schemes Superannuation/employee pension schemes Gratuity funds Provident funds and pension fund Contribution to and provision for: Salaries, wages and bonus Particulars Employee benefits expense NOTE [34] Notes forming part of the Standalone Financial Statements (contd.) Notes forming part of the Standalone Financial Statements LARSEN & TOUBRO 445 Employee medical and other insurance premium expenses Miscellaneous expenses 304.19 28.16 Commission Stationery and printing Advertising and publicity Telephone, postage and telegrams Directors' fees General repairs and maintenance Repairs to buildings Travelling and conveyance Rates and taxes Rent & hire charges Insurance Audit fees 91.25 Professional fees Power and fuel Particulars Sales, administration and other expenses NOTE [35] 8298.22 8864.41 (262.96) (317.63) 697.17 797.03 121.89 130.32 Packing and forwarding 90394.33 (891.86) (116.87) 121.89 587.09 906.66 68.97 130.32 707.37 Insurance 3 926.39 62.31 864.08 771.23 62.06 57.58 Packing and forwarding 2 2648.52 80.34 Total Note 35 Note 34 Total Note 33 2522.35 2568.18 81.59 2440.76 Power and fuel 1 713.65 Note 35 771.04 Rent hire charges 842.12 43.66 798.46 842.29 1255.72 37.00 1028.31 1040.53 606.46 434.07 Miscellaneous expenses 9 3543.93 143.97 3399.96 4089.50 4 114.26 74.94 282.41 20.31 335.78 General repairs and maintenance 8 16.69 Repairs to buildings 7 973.31 Travelling and conveyance 6 767.35 Rates and taxes 5 3975.24 692.53 602.95 Note 34 No. Right-of-use assets Property plant and equipment Depreciation on: Particulars Depreciation, amortisation, impairment and obsolescence NOTE [37] Exchange loss Interest expenses Particulars Finance costs NOTE [36] Notes forming part of the Standalone Financial Statements (contd.) Investment property Statements Report Financial Statutory Integrated Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 2513.81 3453.84 (74.87) (63.09) 34.29 Reports Note 33 Amortisation of intangible assets NOTE [38] Nature of expenses 2022-23 2023-24 Sr. crore Aggregation of expenses disclosed vide Note 33 - Manufacturing, construction and operating expenses, Note 34 - Employee benefits expense and Note 35 - Sales, administration and other expenses. 1371.64 4.15 45.68 69.07 7.60 1751.01 1321.81 1674.34 Obsolescence on property, plant and equipment 16.79 114.31 17.27 1203.05 1542.76 2022-23 crore 29.09 2125.23 9.34 2405.83 2096.14 2022-23 2023-24 2396.49 crore 2023-24 101.97 12373.24 13724.86 104233.04 385.15 Other income NOTE [32] Notes forming part of the Standalone Financial Statements (contd.) Notes forming part of the Standalone Financial Statements LARSEN & TOUBRO 443 110500.98 126235.85 1296.95 1167.34 1001.14 931.61 Particulars Miscellaneous Income 27.82 Premium earned (net) on related forward exchange contracts 92.12 104.95 Income from services to Group companies 56.16 102.96 Lease rentals 82.62 Net gain/(loss) on sale of investment properties Other operational income: 109204.03 64.91 125068.51 Interest income: Others 35.08 1713.39 2655.67 144.34 0.97 6.42 129.83 1568.08 2519.42 1612.25 1722.74 641.88 970.37 1333.65 Subsidiary and associate companies 389.09 crore 2023-24 Miscellaneous income (net of expenses) Lease rentals Net gain/(loss) on sale of property, plant and equipment Net gain/loss on derivatives at fair value through profit or loss Net gain/(loss) on sale of investments Net gain/(loss) on fair valuation of investments Others Joint venture companies Subsidiary companies Dividend income: 2022-23 (72.04) 136.87 1421.59 (c) Uncalled liability on shares and other investments partly paid (b) Funding committed by way of equity/loans to subsidiary companies (iii) Intangible assets (ii) Investment property 1080.83 (i) Property, plant and equipment (a) Estimated amount of contracts remaining to be executed on capital account (net of advances) on: Particulars As at 31-3-2023 As at 31-3-2024 crore Commitments NOTE [31] NOTE [30] Statements Reports Report Financial Statutory Integrated Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 442 In respect of matters at (j), the cash outflows, if any, is fully reimbursable by the third parties under an agreement entered in to with them. In respect of matters at (g) to (i), the cash outflows, if any, could generally occur up to completion of projects undertaken by the respective joint operations. Notes forming part of the Standalone Financial Statements (contd.) 141.81 Revenue from operations Sales and service: 1614.03 108.28 115.34 444.67 509.35 3582.80 3852.08 103509.82 118835.90 2022-23 crore 2023-24 Particulars 880.00 1091.62 1045.39 239.25 10.79 16.73 219.85 808.81 Commission Servicing Engineering and service fees Property development activity Manufacturing and trading activity Construction and project related activity 349.47 249.70 232.21 284.78 2352.00 Engineering, professional, technical and consultancy fees 3399.96 3975.24 Rent hire charges 864.08 713.65 Packing and forwarding 30.66 127.08 Royalty and technical know-how fees 2568.18 1685.51 2440.76 (2930.73) 411.83 7761.74 10689.69 7425.48 10308.00 319.61 364.92 16.65 16.77 10692.47 10277.86 Other manufacturing, construction and operating expenses: Power and fuel 364.92 10310.78 Insurance 587.09 434.07 Miscellaneous expenses (119.71) 19.32 Other provisions/(reversal of provisions) 187.46 86.00 Provision/(reversal) for foreseeable losses on construction contracts 302.67 298.95 Bank guarantee charges 633.03 707.37 692.53 24.58 16.69 Repairs to buildings 90.78 120.54 Repairs to plant and equipment 935.34 973.31 Travelling and conveyance 798.46 767.35 Rates and taxes General repairs and maintenance 10048.69 16.77 0.87 228.30 Cost of raw materials, components consumed: Particulars Manufacturing, construction and operating expenses NOTE [33] Notes forming part of the Standalone Financial Statements (contd.) Statements Reports Report Financial Statutory Integrated Management Discussion and Analysis Raw materials and components Corporate Overview 444 4034.95 5340.60 312.65 583.76 95.75 58.05 48.03 58.67 92.71 (23.07) 160.17 Integrated Annual Report 2023-24 Less: Scrap sales Construction materials consumed Purchase of stock-in-trade 24353.62 30750.87 4260.17 3613.78 1076.29 1078.54 38098.69 43031.68 13163.05 11621.48 13342.47 179.42 172.58 11794.06 2022-23 crore 2023-24 Work-in-progress Stock-in-trade Finished goods Less Opening stock: Work-in-progress Stock-in-trade Finished goods Closing stock: Changes in inventories of finished goods, work-in-progress and stock-in-trade and property development: Sub-contracting charges Stores, spares and tools consumed 935.34 In respect of matters at (e), the cash outflows, if any, could generally occur up to three years, being the period over which the validity of the guarantees extends except in a few cases where the cash outflows, if any, could occur any time during the subsistence of the borrowing to which the guarantees relate. 246.89 24.58 633.03 912.58 279.55 45.77 21.19 Corporate Overview Management Discussion and Analysis Integrated Statutory Financial Report Reports Statements 385.15 Notes forming part of the Standalone Financial Statements (contd.) Non-current liabilities: Other financial liabilities Particulars Forward contract payables Embedded derivative payables Financial guarantee contracts Due to others (mainly includes liabilities towards capital goods) NOTE [21] Non-current liabilities: Provisions Particulars Employee pension scheme Post-retirement medical benefits plan NOTE [22] NOTE [20] Other non-current liabilities 577.75 NOTE [39] Segment result [Profit/(loss) before interest and tax] Total Inter-segment revenue Sub-total Others Hi-Tech Manufacturing Energy Projects Infrastructure Projects Revenue Particulars 448 (a) Information about reportable segments: 962.90 Disclosure pursuant to Ind AS 108 "Operating Segment" Notes forming part of the Standalone Financial Statements (contd.) Notes forming part of the Standalone Financial Statements LARSEN & TOUBRO 447 Land of 28.35 crore situated at Mumbai, Maharashtra. The asset forms part of Realty business which is reported under "Others" segment (refer Note 40). (c) (b) Investment of 1032.35 crore in L&T Infrastructure Development Projects Limited and its subsidiaries, primarily engaged in the development and operation of toll roads and power transmission assets, consequent to the Company entering into a Share Purchase Agreement to sell its entire shareholding, subject to regulatory approvals on December 16, 2022. (a) Assets of 1280.31 crore and liabilities of 998.48 crore of Carved-out Business of Smart World and Communication (SWC) Business unit of the Company. The transfer of Carved-out Business to L&T Technology Services Limited (LTTS), a listed subsidiary is completed on April 1, 2023 for cash consideration of 800.00 crore. Assets and liabilities held for sale as at March 31, 2023 includes: (b) Land of 172.55 crore situated at Mumbai, Maharashtra. The asset forms part of Realty business which is reported under "Others" segment (refer Note 40). (a) Investment of 1005.36 crore in L&T Infrastructure Development Projects Limited (L&T IDPL), a joint venture, primarily engaged in the development and operation of toll roads and power transmission assets. The stake sale is concluded on April 10, 2024. Disclosure pursuant to Ind AS 105 "Non-current assets held for sale and discontinued operations": Assets held for sale as at March 31, 2024 includes: NOTE [40] crore Particulars NOTE [23] crore As at 31-3-2024 As at 31-3-2023 22.67 7.05 22.67 7.05 crore As at 31-3-2024 Secured Unsecured As at 31-3-2023 Total 0.29 636.97 813.75 2668.53 Secured Unsecured 0.36 Total 0.54 1743.91 1231.28 0.90 1743.91 1231.28 1149.41 207.67 25.00 25.00 1149.41 207.67 25.00 1.23 202.04 1.23 202.04 0.29 813.75 2668.53 Other Payables (Deferred income on day one fair valuation of financial instrument) 697.73 345.86 Current liabilities: Financial Liabilities - Borrowings Particulars Loans repayable on demand from banks Short term loan and advances from banks Commercial paper Loans from related parties: Subsidiary companies Joint venture companies Collateralized borrowing and lending obligation 23(a) Loans guaranteed by directors Nil (previous year: Nil) crore As at 31-3-2024 290.53 As at 31-3-2023 16.02 4.89 24.93 50.38 40.65 37.12 75.81 108.41 crore As at 31-3-2024 351.87 As at 31-3-2023 346.44 10.23 4839.65 For the year ended 31-3-2024 External Inter- segment 14355.46 11482.13 17845.43 16265.77 Energy Projects 55913.06 62203.70 78431.66 83848.63 Infrastructure Projects As at 31-3-2024 As at 31-3-2023 Hi-Tech Manufacturing 31-3-2024 As at 31-3-2023 crore Segment Liabilities 7848.97 9832.70 (2334.76) 351.03 As at Segment Assets 193.02 9304.33 11316.31 (2205.00) 447.99 Net profit after tax Deferred tax Particulars Current tax 10071.97 8,865.36 100896.54 110866.65 172424.49 175282.69 Total assets/liabilities (1218.73) (1215.72) (1218.73) (1215.72) Inter-segment assets/liabilities 20813.67 25571.77 9159.89 59756.60 Unallocable corporate assets/liabilities 81301.60 86510.60 113886.62 118517.78 Total 4420.84 3959.41 8449.64 8331.41 Others 6612.24 57980.63 For the year ended 31-3-2023 Profit before tax (2125.23) 1413.59 4895.44 24.14 4871.30 4263.71 127998.03 110500.98 22.48 1762.18 1762.18 126235.85 7160.88 625.97 6534.91 8765.31 569.32 111914.57 20034.40 726.67 36.81 19997.59 19383.39 26.34 79097.18 95585.62 1144.04 94441.58 19357.05 8195.99 4241.23 Total Inter- segment External Total 79823.85 Exceptional items (net of tax) [Note 59] 1762.18 1413.59 (2405.83) Finance costs 3898.09 5004.85 Unallocable corporate income net of expenditure (41.81) (108.53) Inter-segment margins on capital jobs 8101.65 8377.83 Total 695.46 1413.59 511.64 995.25 1169.50 Hi-Tech Manufacturing 1589.25 2240.67 Energy Projects 4821.69 4456.02 Infrastructure Projects 110500.98 126235.85 110500.98 126235.85 Others 4864.65 0.36 3179.00 3603.76 3753.82 4071.50 4117.92 crore As at 31-3-2024 As at 31-3-2023 14487.32 13513.76 22133.60 16926.77 36620.92 27.53 30440.53 1836.84 39383.81 32277.37 441 LARSEN & TOUBRO Notes forming part of the Standalone Financial Statements Notes forming part of the Standalone Financial Statements (contd.) NOTE [28] Current liabilities - provisions Particulars Provision for employee benefits: Gratuity 2762.89 crore 25.46 41.64 0.66 1364.12 8.14 41780.37 NOTE [26] Current liabilities - Other financial liabilities Particulars Unclaimed dividend Forward contract payable Embedded derivative payable Financial guarantee contracts Due to others [1][2] [1] Due to others include due to directors 123.61 crore (previous year 92.20 crore) [2] Mainly includes liability towards employee benefits and capital goods 43.78 NOTE [27] Particulars Contract liabilities [refer Note 41(d)] Excess of billing over revenue Advances from customers Other payables [1] [1] Mainly includes liabilities towards joint operations, statutory dues and employee benefits crore As at 31-3-2024 129.90 As at 31-3-2023 129.10 270.74 163.69 Other current Liabilities 154.54 As at 31-3-2024 118.93 (d) Income tax liability that may arise in respect of which the Company is in appeal (e) Corporate guarantees given for financial obligations of Subsidiary companies/joint venture companies 3380.37 2652.73 8826.56 8892.58 (f) Corporate and bank guarantees for performance obligations of Subsidiary companies/joint venture companies 120947.97 68828.25 (g) Contingent liabilities incurred in relation to interests in joint operations 3006.66 2976.71 (h) Share in contingent liabilities of joint operations for which the Company is contingently liable (i) Contingent liabilities in respect of liabilities of other joint operators of joint operations 384.30 123.84 4364.24 56.79 4407.38 96.41 (j) Indemnities for performance given on behalf of third parties Notes: 1. 2. 3. 4. 5. 6. The Company does not expect any reimbursements in respect of the above contingent liabilities except in respect of matters at (j) It is not practicable to estimate the timing of cash outflows, if any, in respect of matters at (a) to (d) above pending resolution of the arbitration/appellate proceedings. Further, the liability mentioned in (a) to (d) above includes interest except in cases where the Company has determined that the possibility of such levy is remote. 87.48 As at 31-3-2023 426.36 4276.96 561.64 103.00 Compensated absences 571.79 672.71 Employee pension scheme 30.39 28.83 Post-retirement medical benefits plan 17.76 13.91 738.87 818.45 (b) Sales tax/GST liability that may arise in respect of matters in appeal (c) Excise duty/service tax/customs duty liability that may arise in respect of matters in appeal/ challenged by the Company in WRIT Other Provisions [refer Note 50] 1013.92 1651.57 1832.37 NOTE [29] Contingent liabilities Particulars (a) Claims against the Company not acknowledged as debts As at 31-3-2024 4569.64 1169.36 crore As at 31-3-2023 912.70 429.86 5812.67 11434.06 5390.99 1.49 46.38 5744.68 143.51 5580.88 crore As at 31-3-2024 As at 31-3-2023 93.89 175.47 1307.52 5.61 1262.66 5743.19 848.57 6.00 2575.79 37305.43 39975.11 2310.05 38543.14 41028.66 As at 31-3-2024 Outstanding for the following periods from the due date of payment crore Unbilled Dues Total Not due Less than 1 year 1-2 years 2-3 years 1455.48 More than 3 years As at 31-3-2023 crore 3179.36 23(b) The Company has fund based and non-fund based facilities (viz. bank guarantees, letter of credits and derivatives) from banks. These facilities are secured by hypothecation of inventories and trade receivables. Amount of inventories and trade receivables that are pledged as collateral to the extent of: 6932.00 crore as at March 31, 2024 (March 31,2023: 6932.00 crore) 23(c) The Company has been sanctioned working capital limits in excess of 5 crore, in aggregate, at points of time during the year, from banks or financial institutions on the basis of security of current assets. The quarterly returns filed by the Company with such banks or financial institutions are in agreement with the Books of Account of the Company of the respective quarters. 439 LARSEN & TOUBRO Notes forming part of the Standalone Financial Statements Notes forming part of the Standalone Financial Statements (contd.) NOTE [24] Current liabilities: Financial liabilities - Current maturities of long-term borrowings Particulars Unsecured: Redeemable non-convertible fixed rate debentures [refer Note 19(a)(i)] Term loans from banks [refer Note 19(b)] As at 31-3-2024 Redeemable non-convertible floating rate debentures [refer Note 19(a)(ii)] NOTE [25] Current liabilities: Financial liabilities - Other trade payables Particulars Acceptances Due to related parties: Subsidiary companies Associate companies Joint venture companies Due to others 25(a) Current liabilities: Financial liabilities - Trade payables ageing Particulars Undisputed: 24(a) Loans guaranteed by directors Nil (previous year: Nil) Micro and small enterprises 16.11 Others As at 31-3-2023 crore Particulars Unbilled Dues Outstanding for the following periods from the due date of payment Not due Total Less than 1 year 1-2 years 2-3 years More than 3 years Undisputed: [a] Current liabilities: Financial liabilities - Trade payables ageing (contd.) Micro and small enterprises Others 11375.85 619.75 21957.89 64.88 5747.79 4.94 424.92 2.27 152.27 1.66 1361.80 751.71 41020.52 Disputed: Micro and small enterprises Others Total 58.21 NOTE [25] Notes forming part of the Standalone Financial Statements (contd.) Statements 10699.91 822.51 21993.09 26.71 5397.22 1.96 347.92 2.06 290.59 1.87 1239.29 871.22 39968.02 Disputed: Micro and small enterprises Others Total 440 10716.02 7.09 22822.69 7.09 5423.93 349.88 292.65 1241.16 40846.33 Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Statutory Financial Report Reports 1182.23 7.48 22585.12 As at 31-3-2024 After twelve Add/(less): Transfer in/(out) 4. (1556.37) (104.45) (1451.92) advances Provision for doubtful debt and 3. (296.30) 33.33 (329.63) Tax Act, 1961 Items disallowed u/s 43B of Income 2. 200.71 1.77 Difference in book depreciation and income tax depreciation 246.93 (81.43) 25.13 (136.63) Other temporary differences 7. (67.37) 50.28 (117.65) 198.94 Deferred tax on capital losses 40.61 (4.50) (5.71) 50.82 Gain/(Loss) on derivative transactions 5. 165.50 6. Tax Act, 1961 payment basis u/s 43B of the Income Disputed statutory liability claimed on 455 2876.05 12381.41 3131.64 13505.67 Total 1801.90 LARSEN & TOUBRO 7875.43 Management Discussion and Analysis Integrated Statutory Financial Report Reports Statements Corporate Overview 37.60 Notes forming part of the Standalone Financial Statements NOTE [44] 1. through OCI) As at 31-3-2024 (other than Debit/(credit) to hedge reserve Charge/(credit) to Other Comprehensive Income (OCI) of Profit and Loss Notes forming part of the Standalone Financial Statements (contd.) Charge/(credit) to Statement crore Particulars Sr. No. 456 i. (d) Components of deferred tax (assets) and liabilities recognised in the Balance Sheet and Statement of Profit and Loss: As at March 31, 2024 Disclosure pursuant to Ind AS 12 "Income Taxes": (contd.) As at 31-3-2023 Notes forming part of the Standalone Financial Statements (contd.) (73.90) (1539.14) Other temporary differences 7 (117.65) (117.65) Deferred tax on capital losses 6. 50.82 (13.70) 56.64 7.88 Gain/(Loss) on derivative transactions 5. 246.93 (35.37) 282.30 21.46 (67.35) (90.75) (136.63) Notes forming part of the Standalone Financial Statements (contd.) Statements Reports Report Financial Statutory Integrated income tax depreciation Management Discussion and Analysis Integrated Annual Report 2023-24 (1539.14) (13.70) (34.11) (351.03) (1140.30) Net deferred tax (assets)/liabilities Corporate Overview Difference in book depreciation and 4. (1451.92) Debit/(credit) to hedge reserve Charge/ (credit) to Other (credit) to Charge/ Statement of Profit and Loss As at 31-3-2022 No. Comprehensive Income (OCI) Particulars crore As at March 31, 2023 ii. (1587.12) (4.50) 31.89 (75.37) Sr. Net deferred tax (assets)/liabilities (other than through OCI) 1. (329.63) (126.88) (1325.05) advances Provision for doubtful debt and 3. (8.39) As at 31-3-2023 (321.23) Items disallowed u/s 43B of Income 2. 198.94 4.61 194.34 Tax Act, 1961 Disputed statutory liability claimed on payment basis u/s 43B of the Income Tax Act, 1961 NOTE [45] NOTE [40] crore India (i) Foreign countries (ii) Total (i+ii) crore Revenue by location of project For the year ended 31-3-2024 100103.26 For the year ended 31-3-2023 91895.55 12621.44 3747.79 2816.67 Particulars Total (i+ii) Total foreign countries (ii) Other Countries 1751.01 1371.64 91.25 28.16 4673.53 5276.85 Note: There is no impairment/reversal of impairment in non-financial assets of the operating segments. 2094.22 (b) Geographical information India (i) Foreign countries: Saudi Arabia United Arab Emirates Qatar Bangladesh Kuwait Particulars 2352.42 2261.50 1495.57 (d) The identification of operating segments is consistent with performance assessment and resource allocation by the management. 449 LARSEN & TOUBRO Notes forming part of the Standalone Financial Statements Notes forming part of the Standalone Financial Statements (contd.) NOTE [40] Disclosure pursuant to Ind AS 108 "Operating Segment" (contd.) (c) Revenue contributed by any single customer in any of the operating segments, whether reportable or otherwise, does not exceed ten percent of the Company's total revenue. (e) Basis of identifying operating segments, reportable segments, segment profit and definition of each reportable segment: (i) Basis of identifying Operating segments: The Company has four reportable segments as described under "segment composition" below. The nature of products and services offered by these businesses are different and are managed separately given the different sets of technology and competency requirements. (ii) Reportable segments An operating segment is classified as reportable segment if reported revenue (including inter-segment revenue) or absolute amount of result or assets exceed 10% or more of the combined total of all the operating segments. (iii) Segment profit Performance of a segment is measured based on segment profit (before interest and tax), as included in the internal management reports that are reviewed by the corporate executive management. (iv) The Segment Composition:- • Operating segments are identified as those components of the Company (a) that engage in business activities to earn revenues and incur expenses (including transactions with any of the Company's other components); (b) whose operating results are regularly reviewed by the Company's executive management to make decisions about resource allocation and performance assessment; and (c) for which discrete financial information is available. Total 15593.76 370.14 1662.27 659.22 731.81 6187.27 8107.84 26132.59 18605.43 17121.65 126235.85 Non-current Assets As at 31-3-2024 As at 31-3-2023 16919.86 15223.62 201.79 110500.98 Disclosure pursuant to Ind AS 108 "Operating Segment" (contd.) (44.34) Inter-segment 31-3-2024 31-3-2023 31-3-2024 31-3-2023 31-3-2024 31-3-2023 31-3-2024 31-3-2023 31-3-2024 31-3-2023 For the year ended For the year ended For the For the year year ended Infrastructure Projects 1,219.02 882.46 48.14 21.18 231.60 202.35 17.51 14.94 2044.69 3759.90 Energy Projects ended For the year ended For the year ended For the year ended Depreciation, amortisation, Particulars impairment & obsolescence included in segment Other non-cash expenses included in segment expense Finance cost included in segment expense 146.68 Interest income included in segment income expenses For the For the year ended year ended For the year ended Additions to non-current assets 135.34 11.98 2.94 27.00 231.60 202.35 17.51 Unallocated corporate 109.21 114.30 70.85 20.40 (231.60) (202.35) (17.51) 14.94 (14.94) 4068.85 5171.18 1007.36 150.01 1.16 (402.68) 1257.34 Total 733.63 643.33 Hi-Tech Manufacturing 196.41 178.98 7.50 1.99 1641.80 525.86 Others 79.69 60.56 3.23 0.89 764.67 606.70 161.25 • Disclosure pursuant to Indian Accounting Standard (Ind AS) 19 "Employee Benefits" ii As at 31-3-2023 31-3-2024 As at Particulars Post-retirement medical benefit plan Gratuity plan 458 crore The changes in the present value of defined benefit obligation representing reconciliation of opening and closing balances thereof are as follows: Disclosure pursuant to Indian Accounting Standard (Ind AS) 19 "Employee Benefits" (contd.) NOTE [45] Notes forming part of the Standalone Financial Statements (contd.) Notes forming part of the Standalone Financial Statements LARSEN & TOUBRO 457 As at 31-3-2024 As at 31-3-2023 Company pension plan As at 31-3-2024 As at 31-3-2023 3618.59 3927.84 371.56 375.27 3.14 13.07 12.13 83.85 81.49 91.54 313.02 305.50 775.41 860.66 Opening balance of the present value of defined benefit obligation As at 31-3-2023 Trust-managed provident fund plan As at 31-3-2024 Add: Current service cost 384.53 16.64 89.25 26.92 21.60 22.14 (0.51) 4.97 Amount included as part of "Finance cost" !! 25.28 103.26 11.49 3.14 13.19 59.51 98.32 91.54 expense' 117.07 3.26 ¡¡¡ Amount included as part of "Other comprehensive income" 67.98 103.26 117.07 29.56 34.78 7.93 75.43 165.79 (12.45) 84.06 Total (i+ii+iii+iv) operations" iv Amount included in "Profit from discontinued (7.21) 4.72 (26.86) (6.22) Actual return on plan assets i Amount included in "Employee benefits 117.07 Add: Interest cost benefit obligation Closing balance of the present value of defined 0.78 Add/(less): Translation adjustments Add: Past service cost 8.23 0.12 47.38 14.47 5.27 - (444.14) (534.99) (25.85) 4.36 (2.86) (27.79) 938.11 860.66 363.62 305.50 133.64 Add: Contribution by the employer 43.04 (27.63) 72.03 (208.75) Difference between actual return on plan assets and interest income Add/(less): Actuarial gains/(losses) Trust-managed provident fund plan As at As at As at As at 31-3-2024 31-3-2023 31-3-2024 31-3-2023 623.27 659.29 4014.74 3887.73 46.21 44.27 312.49 290.25 Gratuity plan (15.45) Add: Interest income on plan assets[1] Particulars crore The changes in the fair value of plan assets representing reconciliation of the opening and closing balances thereof are as follows: d) 3927.84 375.27 4176.22 382.26 Opening balance of the fair value of the plan assets (102.46) (15.98) (92.17) 0.08 64.39 257.73 289.43 (1.33) (4.46) ii) Transfer-in/(out) i) Employee 102.15 Add: Contribution by plan participants 312.49 25.28 26.92 21.60 22.14 43.76 51.18 290.25 103.26 Add/(less): Actuarial (gains)/losses arising from i) Demographic assumptions 15.39 31.03 (10.48) (11.57) 7.58 (17.52) 9.24 changes in: 4.65 (9.42) (30.85) 4.67 2.89 Less: Benefit paid iii) Experience adjustments ii) Financial assumptions 38.18 i Defined contribution plans: [Note [1] (k)(ii)(A)]: Amount of ₹134.95 crore (previous year: 108.57 crore) is recognized as an expenses. Defined benefit plans: [Note [1] (k)(ii)(B)]: 103.26 29.56 382.26 305.50 363.62 237.39 167.24 Liabilities B) Amounts reflected in the Balance Sheet: (86.90) [2] 375.27 (183.20) [2] 382.26 305.50 363.62 237.39 167.24 Amount to be recognised as liability/(asset) 375.27 34.44 31.73 Assets 28.83 30.39 13.91 17.76 237.39 167.24 Net liability/(asset) current 4014.74 31.73 375.27 382.26 305.50 363.62 237.39 167.24 Net liability/(asset) 34.44 4359.42 623.27 770.87 A) Present value of defined benefit obligation As at 31-3-2023 As at 31-3-2024 As at 31-3-2023 Trust-managed provident fund plan Company pension plan As at 31-3-2024 As at 31-3-2023 -Wholly funded As at 31-3-2024 31-3-2024 As at Particulars Post-retirement medical benefit plan Gratuity plan crore a) The amount recognised in Balance Sheet are as follows: As at 31-3-2023 34.44 [1] 819.18 4176.22 Less: Fair value of plan assets 3927.84 375.27 4176.22 382.26 305.50 363.62 860.66 757.66 938.11 382.26 305.50 363.62 103.00 118.93 -Wholly unfunded 3927.84 375.27 117.07 31.73 [1] 345.86 (72.03) 27.63 (43.04) actual return on plan assets and interest income 5 Actuarial (gains)/losses - difference between (7.21) 4.72 (26.86) (6.22) 40.35 30.59 4 Actuarial (gains)/losses - others (312.49) (290.25) (44.27) (46.21) 208.75 6 Past service cost 14.47 34.78 7.93 75.43 165.79 84.06 Total (1 to 8) from S&A Interest income on plan assets Amount capitalized out of the above/recovered (208.75) 72.03 Actuarial gain/(loss) not recognised in books 7 8.23 0.12 47.38 8 3 290.25 103.26 2023-24 Trust-managed provident fund plan Company pension plan Post-retirement medical benefit plan Particulars Gratuity plan crore 2022-23 The amounts recognised in Statement of Profit and Loss are as follows: [2] Restricted to NIL in terms of para 58 of Ind AS 19 [1] Employer's and employee's contribution due towards Provident Fund (1.06) Net liability/(asset) classified as Held for sale 346.44 351.87 291.59 b) Net liability/(asset) - Non current 2023-24 2022-23 Current service cost 117.07 312.49 25.28 26.92 21.60 22.14 43.76 51.18 1 Interest cost 2023-24 2022-23 2022-23 3.26 2023-24 3.14 13.07 12.13 83.85 91.54 2 17.71 114.81 • Infrastructure Projects segment comprises engineering and construction of (a) building and factories, (b) transportation infrastructure, (c) heavy civil infrastructure, (d) power transmission & distribution, (e) water & effluent treatment and (f) minerals and metals. 10 Changes from financing cash flows 7450.00 1676.97 (4845.00) (98.70) 4183.27 11 Changes on lease termination/lease concessions (2.86) (2.86) 12 The effect of changes in foreign exchange rates 185.21 18338.53 187.44 185.21 Additions to lease liability The effect of changes in foreign exchange rates 157.85 7 9 6819 Interest accrued (net of interest paid) 34.15 726.47 Other changes (transfer within categories) (5580.88) Balance as at March 31, 2023 9390.85 3179.36 (0.08) (1014.41) 5580.88 5580.88 157.77 (284.95) 2.99 0.04 34.19 13 Particulars Proceeds from non-current borrowings Repayment of non-current borrowings 2023-24 2022-23 7450.00 2450.00 crore (4845.00) (Repayments)/Proceeds from other borrowings (net) 1676.97 1078.98 Repayment of lease liability (98.70) (95.18) Total changes from financing cash flows (refer to Sr. No 3 & 10 above) (5549.00) 5 Disclosure with regard to changes in liabilities arising from financing activities as required by Ind AS 7 "Statement of Cash Flows": (contd.) Amounts reported in statement of cash flows under financing activities: Notes forming part of the Standalone Financial Statements (contd.) Interest accrued (net of interest paid) 800.82 8.32 14 15 Other changes (transfer within categories) Balance as at March 31, 2024 (5744.68) NOTE [43] 11931.14 (735.88) 5744.68 5744.68 73.26 271.14 22811.61 453 LARSEN & TOUBRO Notes forming part of the Standalone Financial Statements 4864.65 4183.27 (1.13) concessions 89.23 751.71 enterprises Due to others 25 Lease liability Other financial liabilities 26 Other current liabilities 27 Provisions 28 678 39438.32 124.83 4049.31 30517.65 Total 662.48 871.22 12.25 858.97 As at 31-3-2023 Within After Particulars Note twelve months twelve 1428.87 76417.94 Total Within twelve months After twelve Total months Trade payables: Due to micro enterprises and small months 536.80 39975.11 34.06 158.89 22.19 4071.50 8866.16 39383.81 222.71 1651.57 9694.16 86112.10 38286.03 85.84 4094.01 26985.85 2742.63 51.48 23.91 Current maturities of long term borrowings (Note 24) 5232.49 Lease Liability Total crore Current borrowings (Note 23) 2097.39 234 No. Additions to lease liability Changes from financing cash flows 1119.00 1078.98 (4218.00) (95.18) 20476.71 105.33 (2115.20) Changes on lease termination/lease 178.42 105.33 (1.13) Particulars Disclosure with regard to changes in liabilities arising from financing activities as required by Ind AS 7 "Statement of Cash Flows": 41028.66 137.32 4117.92 5291.52 32277.37 1555.21 277.16 1832.37 71669.42 Sr 8475.93 Non-current borrowings (Note 19) 1 Balance as at April 01, 2022 12968.41 NOTE [43] 80145.35 As at 31-3-2024 (2115.20) Disclosure pursuant to Ind AS 12 "Income Taxes" (23.05) 61.20 (iv) Effect of lower tax rate on capital gains (10.59) (6.46) (v) Effect of deduction with respect to dividend income (668.38) (431.23) (vi) Tax effect on various other items (13.51) (33.09) Total effect of tax adjustments [(i) to (vii)] (732.48) (490.96) (5) (iii) Effect of current tax related to earlier years (117.65) (67.37) (ii) Effect of deferred tax asset created on unused tax losses 2022-23 11454.79 9832.70 25.17% 25.17% 2882.94 2474.69 Tax expense recognised during the year (5)=(3)+(4) (4) Tax on expenses not tax deductible: (A) Corporate social responsibility 38.00 34.53 (B) Tax on employee perquisites borne by the company 12.42 1.74 (i) 2150.46 1983.73 (6) As at 31-3-2023 Sr. Particulars No. Base Amount Deferred Tax Base Amount As at 31-3-2024 Deferred Tax Deductible temporary differences towards provision for diminution in value of investments/loans on which DTA not created 4481.36 1066.88 4505.98 1074.15 2. Temporary differences arising out of revaluation of tax base of assets (on account of indexation benefit) 1. 2023-24 crore Expiry date Effective tax Rate (6)=(5)/(1) 18.77% 20.17% (c) (i) Unused tax losses for which no deferred tax asset (DTA) is recognised in Balance Sheet: Particulars Capital loss FY 2030-31 Base Amount (*crore) 936.25 As at 31-3-2023 Deferred Tax (crore) 317.67 (ii) Unrecognised deductible temporary differences for which no deferred tax asset (DTA) is recognised in Balance Sheet As at 31-3-2024 Deferred Tax (* crore) 214.21 Expiry date FY 2030-31 Base Amount (crore) 1388.43 NOTE [44] crore Corporate tax rate as per Income Tax Act, 1961 (351.03) 2150.46 1983.73 2. Other Comprehensive Income (OCI) Section: (i) Items not to be reclassified to Profit or Loss in subsequent periods: Current tax expense/(income): On remeasurement of defined benefit plans 3.51 3.51 (8.53) (8.53) (ii) Items to be reclassified to Profit or Loss in subsequent periods: (A) Current tax expense/(income): On gain/(loss) on cash flow hedges other than mark to market (44.52) (66.96) (75.37) Tax expense on origination and reversal of temporary differences Income tax expense reported in Profit or Loss [(i)+(ii)] (ii) Deferred Tax: 61.20 (a) Major components of tax expense/(income): 454 Sr. No. 1. Particulars Profit or Loss section crore (44.52) 2023-24 (i) Current Income tax : Current income tax expense 2248.88 2273.56 Tax expense of earlier years (23.05) 2022-23 (66.96) (B) Deferred Tax: Integrated Statutory Financial Report Reports Statements Notes forming part of the Standalone Financial Statements (contd.) Management Discussion and Analysis NOTE [44] (b) Reconciliation of tax expense and the accounting profit multiplied by domestic tax rate applicable in India: Sr. No. Particulars (1) Profit before tax (2) (3) Disclosure pursuant to Ind AS 12 "Income Taxes": (contd.) Tax on Accounting profit (3) = (1) * (2) Corporate Overview (109.60) On mark to market gain/(loss) on cash flow hedges Net gain/(loss) on cost of hedge reserve (5.74) 56.66 0.03 (0.02) Net gain/(loss) fair value of debt securities Integrated Annual Report 2023-24 On foreign currency translation of joint operations 39.34 (87.20) (1.74) (3.55) 31.89 (34.11) (9.12) Income tax expense reported in the OCI section [(i)+(ii)] • crore 49241.23 87242.77 (b) Out of the total revenue recognised under Ind AS 115 during the year, recognised over a period of time and 5782.99 crore (previous year: (c) Movement in Expected Credit Loss during the year: 119642.27 crore (previous year: 103907.68 crore) is 5995.49 crore) is recognised at a point in time. Particulars crore Provision on Trade Provision on Contract Assets Receivables 2023-24 2022-23 3968.78 3481.74 2023-24 1588.17 2022-23 1599.24 Balance as at April 1 110500.98 4871.30 6534.91 19997.59 41.38 4919.02 1551.84 6470.86 64.05 4483.62 267.91 Changes in loss allowance for expected credit loss: 4751.53 91337.15 18566.02 109903.17 597.81 crore Total as per Statement of Profit and Loss/ Segment reporting 79097.18 119.77 Provision/(reversal) of allowance for expected credit loss 323.78 324.57 i. Movement in contract balances during the year. crore 2023-24 2022-23 Particulars Contract Disclosure pursuant to Ind AS 115 "Revenue from Contracts with Customers" (contd.) (d) Contract balances: Assets Contract Contract Net contract balances Opening balance as at April 01 48924.97 30440.53 18484.44 Contract Net contract Liabilities 19956.21 NOTE [41] Notes forming part of the Standalone Financial Statements Additional provision (net) towards credit impaired receivables 402.66 293.66 373.92 (4.48) 36.37 (46.43) Written off as bad debts (546.44) Notes forming part of the Standalone Financial Statements (contd.) (130.62) Balance as at March 31 4148.78 0.57 3968.78 1957.61 1.01 1588.17 451 LARSEN & TOUBRO Less: Balance classified as held for sale Closing balance as at March 31 4754.31 372.61 Revenue as per Ind AS 115 Other Segment Domestic Foreign Total Revenue Infrastructure Projects 77779.56 16315.73 94095.29 346.29 crore Total as per Statement of Profit and Loss/ Segment reporting For the year ended March 31, 2024: i. Disaggregation of revenue into Operating Segments and Geographical areas (a) Energy Projects segment comprises EPC/ turnkey solutions in (a) Hydrocarbon business covering Oil & Gas industry from front-end design through detailed engineering, modular fabrication, procurement, project management, construction, installation and commissioning and (b) Power business covering Coal-based and Gas-based thermal power plants including power generation equipment with associated systems and/or balance-of-plant packages and (c) EPC solutions in Green Energy space. Hi-Tech Manufacturing segment comprises design, manufacture / construct, supply, revamp/retrofit of (a) custom designed, engineered critical equipment & systems to the process plant, nuclear energy and green hydrogen sectors (b) marine and land platforms including related equipment & systems; aerospace products & systems; precision and electronic products & systems for the defence, security, space and industrial sectors. Others segment includes (a) realty, (b) smart world & communication projects, (c) marketing and servicing of construction equipment & mining machinery and parts thereof, (d) manufacture and sale of rubber processing machinery and (e) E-commerce/digital platforms & data centres. 450 Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis 94441.58 Integrated Financial Report Reports Statements Notes forming part of the Standalone Financial Statements (contd.) NOTE [41] Disclosure pursuant to Ind AS 115 "Revenue from Contracts with Customers" Statutory Energy Projects 12078.72 6944.86 ii. For the year ended March 31, 2023: Segment Infrastructure Projects Energy Projects Hi-Tech Manufacturing Others 126235.85 Total Domestic Foreign Total Other Revenue 66732.61 11991.96 78724.57 Revenue as per Ind AS 115 15201.90 810.59 4241.23 19023.58 333.47 19357.05 Hi-Tech Manufacturing 5636.42 2530.94 8167.36 125425.26 28.63 Others 3827.14 Total 99321.84 311.89 26103.42 4139.03 102.20 8195.99 57128.31 97405.64 49327.88 12706.96 Statements Notes forming part of the Standalone Financial Statements (contd.) NOTE [42] Disclosure pursuant to Ind AS 1 "Presentation of financial statements": a. Current assets expected to be recovered within twelve months and after twelve months from the reporting date: crore Within Particulars Note twelve As at 31-3-2023 Within After Total twelve Reports Report Financial Statutory 330213.96 Upto 1 Year 153657.53 120551.05 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years Beyond 5 114940.41 113676.90 45337.64 56487.65 twelve 25327.68 17752.19 years 19049.65 9679.15 12067.01 Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated 12100.11 Total months months 35589.28 63.04 1372.27 4124.87 42103.67 83676.55 Current liabilities expected to be settled within twelve months and after twelve months from the reporting date: 7887.08 10162.87 142.13 14992.58 18232.26 1456 36961.55 63.04 4267.01 57096.24 101908.80 968.03 33152.58 168.29 168.29 3487.12 40.78 3527.90 32184.55 As at March 31, 2023 15 16 Total months months Inventories 9 1795.69 1725.28 3520.97 b. 2161.58 3428.56 Trade receivables Loans 11 14 Other financial assets Other current assets 1266.98 36620.92 370413.01 performance (e) i. Amortisation in Statement of Profit and Loss: Nil (previous year: Nil) ii. Recognised as contract assets at March 31, 2024: Nil (previous year: Nil) (f) Reconciliation of contracted price with revenue during the year: Particulars Opening contracted price of orders as at start of the year[1] Add: Fresh orders/change orders received (net) 452 Increase due to additional consideration recognised as per contractual terms/(decrease) due to scope reduction (net) Increase/(decrease) due to exchange rate movements (net) Less: Cost to obtain the contract: Revenue recognised from the performance obligation satisfied (or partially satisfied) upto previous year (arising out of contract modifications) amounts to 50.02 crore (previous year: 9.62 crore) Decrease in net contract balances is primarily due to higher progress bills raised as compared revenue recognition in both the years. Revenue recognised from opening balance of contract liabilities amounts to 9505.03 crore (previous year: 7174.53 crore) iii. Assets 48783.33 48924.97 Liabilities balances 26571.06 22212.27 30440.53 18484.44 Orders completed during the year Net increase/(decrease) 6180.39 (5777.48) 141.64 3869.47 (3727.83) i. ii. 402.91 On account of business transfer Closing contracted price of orders as at the end of the year[1] Total Revenue recognised during the year: 125425.30 8276.59 109903.17 117148.71 6665.83 103237.34 419404.56 390461.61 203.25 824532.51 619.60 330213.96 907169.53 824532.51 crore Time for expected conversion to Revenue Outstanding Total 370413.01 As at March 31, 2024 907169.54 80265.34 5083.68 a. Revenue out of orders completed during the year b. Revenue recognised upto previous year (from orders pending completion at the end of the year) (II) Revenue out of orders under execution at the end of the year (1) Increase/(decrease) due to exchange rate movements (III) Balance revenue to be recognised in future viz. Order book (IV) Closing contracted price of orders as at the end of the year [1] (I+II+III+IV) 54230.99 [1] including full value of partially executed contracts. crore 2023-24 824532.51 2022-23 753815.67 159628.00 6414.22 116111.02 5988.55 1943.83 2848.26 Outstanding performance and Time for its expected conversion into Revenue: 9024.31 2064.76 Add: Contribution by plan participants (4.46) The Company expects to fund 47.56 crore (previous year: 133.64 crore) towards its gratuity plan and 132.84 crore (previous year: 117.90 crore) towards its trust-managed provident fund plan during the year 2023-24. The Trust formed by the Company manages the investments of provident funds and gratuity fund. Interest income on plan assets is determined by multiplying the fair value of the plan assets by the discount rate determined at the start of the annual reporting period. [1] Basis used to determine interest income on plan assets: Integrated Annual Report 2023-24 (70.83) 770.87 Closing balance of the plan assets Less: Benefits paid 99.15 64.39 102.15 315.95 288.36 (70.37) (534.99) (444.14) 623.27 4359.42 4014.74 L&T Rajkot-Vadinar Tollway Limited [1] [2] Liquidated w.e.f September 25, 2023 [3] Incorporated on August 25, 2023. [1] Divested w.e.f. April 10, 2024 L&T Hydrocarbon Caspian LLC [2] 20 19 L&T Deccan Tollways Limited [1] 18 Kudgi Transmission Limited [1] 17 (iii) Name of post-employment benefit plans with whom transactions were carried out during the year 16 L&T Samakhiali Gandhidham Tollway Limited [1] 15 L&T Sambalpur-Rourkela Tollway Limited [1] Sr. No Provident Fund Trust 3 Larsen & Toubro Officers & Supervisory Staff Provident Fund Larsen & Toubro Limited Senior Officers' Superannuation Scheme 1 Sr. No Superannuation Trust Larsen & Toubro Gratuity Fund 2 Larsen & Toubro Officers & Supervisors Gratuity Fund 1 1 Sr. No Gratuity Trust 5 L&T (Kansbahal) Officers & Supervisory Staff Provident Fund 4 Larsen & Toubro Limited Provident Fund Ahmedabad-Maliya Tollway Limited [1] Larsen & Toubro Limited Provident Fund of 1952 2 L&T (Kansbahal) Staff & Workmen Provident Fund 14 L&T Interstate Road Corridor Limited [1] 13 L&T - MHI Power Boilers Private Limited 2 L&T-Sargent & Lundy Limited 1 Sr. No Joint Venture Companies Sr. No Joint Venture Companies (ii) Names of joint ventures with whom transactions were carried out during the year: Magtorq Private Limited 1 Name of associates and joint ventures with whom transactions were carried out during the year: Sr. No Associate Companies (b) (i) Disclosure of related parties/related party transactions pursuant to Ind AS 24 "Related Party Disclosures" (contd.) NOTE [47] Notes forming part of the Standalone Financial Statements (contd.) Statements 3 L&T - MHI Power Turbine Generators Private Limited 4 Raykal Aluminium Company Private Limited L&T Transportation Infrastructure Limited [1] 12 (i) 11 GH4 India Private Limited [3] 10 Panipat Elevated Corridor Limited [1] L&T MBDA Missile Systems Limited 9 8 L&T Sapura Shipping Private Limited 7 L&T Howden Private Limited 6 L&T Special Steels and Heavy Forgings Private Limited 5 L&T Infrastructure Development Projects Limited [1] (iv) Name of key management personnel and close member of their family with whom transactions were carried out during the year: Executive Director: 2 Sr. No 466 (c) Mr. P. R. Ramesh (Independent Director) [4] 14 Mr. Rajnish Kumar (Independent Director) [3] 12 Mr. Pramit Jhaveri (Independent Director) 10 Mr. Hemant Bhargava (Nominee of Life Insurance Corporation of India) 8 Mr. Sanjeev Aga (Independent Director) 6 Mr. Vikram Singh Mehta (Independent Director) [2] 4 Mr. M. M. Chitale (Independent Director) [2] [1] Ceased to be Non-executive Chairman w.e.f. September 30, 2023 [3] Appointed w.e.f. May 10, 2023 (iii) Company secretary [2] Ceased w.e.f. March 31, 2024 on account of completion of tenure. 4 Mr. Ajinkya Anil Parab 3 Ms. Vasanti Narayanan 2 Ms. Meena Subrahmanyan 1 2 Name Name Sr. No (iv) Close member of Key Management Personnel's (KMP's) family with whom transactions were carried out during the year: Mr. Sivaram Nair A 1 Sr. No Name [4] Appointed w.e.f. October 31, 2023 Sr. No Sr. No Sr. No Name 13 Mr. Anil Parab (Whole-time Director) [4] 8 Mr. T. Madhava Das (Whole-time Director) 7 Mr. S.V. Desai (Whole-time Director) 6 Mr. D. K. Sen (Whole-time Director) [2] 4 Mr. Subramanian Sarma (Whole-time Director) Mr. M. V. Satish (Whole-time Director) [3] 5 3 Mr. R. Shankar Raman (Whole-time Director & Chief Financial Officer) Reports Mr. S. N. Subrahmanyan (Chairman & Managing Director) [1] 1 [1] Designated as Chairman w.e.f. October 1, 2023 [3] Ceased to be Whole-time Director w.e.f. April 7, 2024 [4] Appointed w.e.f. August 5, 2022 [2] Ceased to be Whole-time Director w.e.f. April 7, 2023 Mr. Jyoti Sagar (Independent Director) [3] 11 Ms. Preetha Reddy (Independent Director) 9 Mr. A.M. Naik (Non-executive Chairman) [1] Mr. M. Damodaran (Independent Director) [2] Mr. Adil Siraj Zainulbhai (Independent Director) Mr. Narayanan Kumar (Independent Director) 3 57 1 Mr. Ajay Tyagi (Independent Director) [4] Sr. No Name (ii) Disclosure of related parties/related party transactions pursuant to Ind AS 24 "Related Party Disclosures" (contd.) NOTE [47] Notes forming part of the Standalone Financial Statements (contd.) Notes forming part of the Standalone Financial Statements LARSEN & TOUBRO 465 Non-executive/Independent Directors Report Corporate Overview Statutory L&T Electrolysers Limited [32] 101 100 Corporate Park (Powai) Private Limited [30] 99 Bangalore Fortune Techpark Private Limited [30] Business Park (Powai) Private Limited [31] 98 Avenue Techpark (Bangalore) Private Limited [29] 96 95 94 93 92 No. Nature of relationship LH Residential Housing Private Limited [33] 102 L&T Semiconductor Technologies Limited [34] 103 WOS L&T Energy Green Tech Limited [38] 107 WOS PT Larsen and Toubro 106 WOS of L&T Technology Limited Name of the Subsidiary Company L&T Technology Services Poland spółka z ograniczoną odpowiedzialnością [37] WOS of L&T Realty Developers Limited WOS of L&T Energy Green Tech Limited WOS of L&T Realty Developers Limited WOS WOS Subsidiary of L&T Seawoods Limited Subsidiary of L&T Seawoods Limited WOS of L&T Realty Developers Limited WOS of L&T Realty Developers Limited WOS of L&T Realty Developers Limited WOS of L&T Realty Developers Limited WOS WOS Millennium Techpark (Chennai) Private Limited [25] Chennai Nova Techpark Private Limited[26] Bangalore Galaxy Techpark Private Limited [27] Bangalore Spectrum Techpark Private Limited [28] LH Uttarayan Premium Realty Private Limited [36] 104 L&T Offshore Private Limited [35] 105 [1] Sr 2 2 2 2 2 2 4 4 4 4 4 4 2 2 WOS L&T Energy Hydrocarbon Engineering Limited 91 No WOS Prime Techpark (Chennai) Private Limited 90 WOS L&T Network Services Private Limited 89 No Subsidiary of Cuelogic Technologies Private Limited Cuelogic Technologies Inc. [24] 88 No Á ZÁ Z ZÁÁZZÁ Yes Yes 463 No No Yes Yes Yes Yes Yes No Yes year Transaction entered during the (Yes/No) Disclosure of related parties/related party transactions pursuant to Ind AS 24 "Related Party Disclosures" (contd.) NOTE [47] Notes forming part of the Standalone Financial Statements (contd.) Notes forming part of the Standalone Financial Statements LARSEN & TOUBRO No Struck off from register of companies w.e.f August 08, 2023 [2] Liquidated w.e.f July 10, 2023 Incorporated on April 20,2023 [31] Incorporated on May 01, 2023 [30] Incorporated on April 10,2023 [29] Incorporated on April 12,2023 [28] Incorporated on April 13,2023 [27] Incorporated on April 17,2023 [26] Incorporated on April 30,2023 [25] One equity share (the Golden Share) is held by the Government of Telangana in pursuance of the Shareholders' Agreement Liquidated w.e.f. April 26, 2023 [32] Incorporated on June 27,2023 [33] Incorporated on July 31,2023 and formerly known as LH Residential Housing Limited Integrated Management Discussion and Analysis Ms. Sulabha Anil Parab Integrated Annual Report 2023-24 Yes Yes 464 [24] During the year balance stake is purchased and entity became a wholly-owned subsidiary Incorporated on October 30,2023 [37] [36] Incorporated on February 17,2024 Reclassified as subsidiary w.e.f December 27, 2023 and formerly known as L&T Sapura Offshore Private Limited [35] Incorporated on November 29,2023 [34] [38] [23] Struck off from register of companies w.e.f July 21,2023 [22] [12] [11] [10] [9] Renamed as L&T Finance Limited [8] Divested w.e.f April 17, 2023 ཎྱཎྜཔྲཞྲིཛྲཞྲི ཋ ང ་ ཧ ཊྛརྫཀྑཀླུ་ཀླུ ཐུ ཌ ཡུ གླ ཊྛརྐྱཊྛཀྐན་ ཞ ཊྛ སྐ [7] [6] Merged with L&T Seawoods Limited on April 1, 2023 [5] In process of liquidation [4] Divested w.e.f January 3,2024 [3] Formerly known as L&T Avenue Realty LLP Financial Merged with L&T Finance Holdings Limited w.e.f. April 1, 2023 and post-merger the resultant entity is renamed as L&T Finance Limited. The Group divested w.e.f. September 26,2023 Formerly known as L&T Information Technology Spain SL Liquidated w.e.f. August 26, 2023 [21] Merged with L&T Technology Services LLC on February 1, 2024 [20] Merged with L&T Technology Services Limited w.e.f. April 1, 2022 [19] Merged with LTIMindtree Limited w.e.f April 1,2023 Formerly known as L&T Information Technology Services (Shanghai) Co., Ltd. [18] [17] Formerly known as Nielsen&Partner Company Limited [16] Formerly known as Nielsen+Partner Unternehmensberater AG [15] [14] Formerly known as Syncordis PSF S.A. [13] Formerly known as Syncordis S.A. Formerly known as Lymbyc Solutions Inc. 5 7 6 parties Amount Amounts Amounts for major Amount 2022-23 2023-24 L&T Seawoods Limited L&T Power Development Limited Subsidiaries, including: Divestment of stake to/capital reduction in: vi. No. Nature of transaction/relationship/major parties Sr. for major parties 0.05 1126.05 823.04 800.00 800.00 L&T Technology Services Limited Subsidiaries Business Transfer to: vii. 1126.05 crore 129.31 128.88 L&T Infrastructure Development Projects Limited 129.26 Joint venture: 0.05 L&T Energy Green Tech Limited 300.00 Total viii. 468 NOTE [47] portion) Investments including subscription to equity and preference shares (equity V. 0.80 22.25 Total 20.36 L&T Geostructure Private Limited Larsen & Toubro Saudi Arabia LLC 22.25 Subsidiaries, including: Sale of property, plant and equipment iv. 54.87 132.57 Subsidiaries, including: 3718.70 L&T Metro Rail (Hyderabad) Limited Joint venture: Notes forming part of the Standalone Financial Statements (contd.) Notes forming part of the Standalone Financial Statements LARSEN & TOUBRO 467 0.04 0.04 1320.00 Disclosure of related parties/related party transactions pursuant to Ind AS 24 "Related Party Disclosures" (contd.) 1372.00 Total 1.00 GH4India Private Limited L&T Infrastructure Development Projects Limited 1.00 3654.00 1371.96 3719.70 Inter corporate deposits and loans given to Subsidiaries, including: 709.75 7047.70 L&T Seawoods Limited L&T Realty Developers Limited Subsidiaries, including: Inter corporate borrowing repaid to xi. 5263.57 8752.65 Total 528.50 755.15 224.16 333.00 L&T MBDA Missile Systems Limited L&T - MHI Power Turbine Generators Private Limited 1283.65 4062.68 2620.50 2894.72 1296.50 1251.71 Integrated Annual Report 2023-24 5334.58 7599.26 Total 556.75 715.15 220.56 331.00 557.16 L&T MBDA Missile Systems Limited 1271.90 551.56 Joint venture: 780.50 L&T Parel Project Private Limited L&T Power Development Limited 908.70 L&T - MHI Power Turbine Generators Private Limited Joint venture: 914.50 L&T Parel Project Private Limited 5307.67 1094.97 3059.03 L&T Metro Rail (Hyderabad) Limited Nabha Power Limited 6655.67 3139.80 Subsidiaries, including: Joint ventures: Inter corporate deposits and loans repaid by 5603.77 709.75 Total 5435.77 564.00 110.21 L&T Metro Rail (Hyderabad) Limited Nabha Power Limited 5603.77 ix. Total 151.72 L&T Sapura Shipping Private Limited L&T Power Development Limited 908.70 1251.71 1296.50 2880.50 3334.72 3979.92 8195.49 14.07 L&T Seawoods Limited Inter corporate borrowing taken from Subsidiaries, including: X. 6669.74 3291.52 Total 14.07 151.72 L&T Realty Developers Limited Ms. Smita Narayan Sarang 0.42 L&T-Sargent & Lundy Limited 282.31 L&T Energy Hydrocarbon Engineering Limited 150.38 150.53 Larsen & Toubro (Oman) LLC L&T Valves Limited 186.57 Larsen & Toubro Electromech LLC 225.89 371.51 1059.01 240.98 L&T Geostructure Private Limited L&T Modular Fabrication Yard LLC 1440.82 2253.72 Joint ventures, including: 867.78 1167.22 L&T - MHI Power Boilers Private Limited Integrated Annual Report 2023-24 2633.52 3146.91 Total 25.06 25.41 Magtorq Private Limited Purchase of goods & services (including commission paid) Subsidiaries, including: 25.48 124.97 172.01 L&T Energy Hydrocarbon Engineering Limited L&T - MHI Power Turbine Generators Private Limited Associates, including: 338.01 479.31 332.03 457.43 L&T Special Steels and Heavy Forgings Private Limited 25.41 Corporate Overview i. Amount Mr. M.V. Srinath 13 Mr. Sushrut Mukund Chitale 12 Mr. Saurabh Mukund Chitale 11 Ms. Madhuri Subhash Gadre 10 Mr. Raghavendra V Desai 9 Ms. Kalavathi S Desai 8 Mr. Anand V Desai Subsidiary of LTIMindtree Limited Ms. Bhagyasree Joshi 14 Ms. Vasanti Satish 15 Ms. Hamida Zainulbhai Amounts Amounts for major parties Amount No. Nature of transaction/relationship/major parties Sr. 2022-23 for major parties 2023-24 Disclosure of related party transactions: Mr. Uday Singh Mehta 18 Mr. Harshad Reddy 17 Ms. Mukeeta Pramit Jhaveri 16 crore Management Discussion and Analysis Integrated Statutory Purchase/lease of property, plant and equipment L&T Metro Rail (Hyderabad) Limited L&T Seawoods Limited iii. Total Subsidiaries: ii. (b) Reversal of sale of goods/contract revenue & services 818.85 935.00 Total 9.99 L&T Special Steels and Heavy Forgings Private Limited 17.53 4.69 L&T MBDA Missile Systems Limited Subsidiaries, including: L&T Construction Equipment Limited L&T Geostructure Private Limited LTIMindtree Limited Joint venture: 0.78 0.80 0.05 0.05 0.42 6.69 74.96 18.86 113.06 54.82 132.15 9.72 3.13 6.59 9.72 25.82 23.56 L&T - MHI Power Boilers Private Limited 101.34 Amount Amounts for major Amount 2022-23 2023-24 crore No. parties Nature of transaction/relationship/major parties Disclosure of related parties/related party transactions pursuant to Ind AS 24 "Related Party Disclosures" (contd.) NOTE [47] Notes forming part of the Standalone Financial Statements (contd.) Statements Reports Report Financial Sr. L&T - MHI Power Turbine Generators Private Limited Amounts for major parties Subsidiaries, including: 38.24 129.00 84.83 116.01 176.90 237.98 717.51 ii. (a) Sale of goods/contract revenue & services 265.05 896.76 Joint ventures, including: Larsen & Toubro International FZE Larsen & Toubro (East Asia) SDN. BHD. L&T Realty Developers Limited Nabha Power Limited LTIMindtree Limited 196.07 Cuelogic Technologies Private Limited [18] L&T Metro Rail (Hyderabad) Limited [23] Yes 54.09 2023-24 (48.61) 52.45 2022-23 (47.23) 2022-23 52.30 (46.39) Effect of 1% decrease Effect of 1% increase 2023-24 53.44 (48.12) crore Impact of change in salary growth rate Impact of change in discount rate Particulars vii) The obligation of the Company under the post-retirement medical benefit plan is limited to the overall ceiling limits. viii) (A) One percentage point change in actuarial assumptions would have the following effects on the defined benefit obligation of gratuity plan: The interest payment obligation of trust-managed provident fund is assumed to be adequately covered by the interest income on long-term investments of the fund. Any shortfall in the interest income over the interest obligation is recognized immediately in the Statement of Profit and Loss. The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. For Company pension plan, the attrition rate varies from 0% to 2% (previous year: 0% to 2%) for various age groups. For post-retirement medical benefit plan, the attrition rate varies from 1% to 14% (previous year: 1% to 13%) for various age groups. b) (B) A one percentage point change in actuarial assumptions would have the following effects on the defined benefit obligation of Company pension plan: Particulars Impact of change in discount rate crore 45.83 50.73 2022-23 (16.71) (7.85) 2023-24 2022-23 20.10 (36.60) Effect of 1% decrease vi) Effect of 1% increase 2023-24 7.53 (40.87) Impact of change in Health care cost Impact of change in discount rate Particulars (C) A one percentage point change in actuarial assumptions would have the following effects on the defined benefit obligation of post-retirement medical benefit plan: 2022-23 29.35 Effect of 1% decrease 2023-24 29.46 2022-23 (25.69) Effect of 1% increase 2023-24 (25.84) crore Integrated Annual Report 2023-24 v) a) c) Post-retirement medical benefit plan b) Gratuity plan a) Discount rate: i) Plans 460 g) Principal actuarial assumptions at the Balance Sheet date (expressed as weighted averages): Disclosure pursuant to Indian Accounting Standard (Ind AS) 19 "Employee Benefits" (contd.) NOTE [45] Notes forming part of the Standalone Financial Statements (contd.) Notes forming part of the Standalone Financial Statements LARSEN & TOUBRO Company pension plan ii) Annual increase in healthcare costs (refer Note vii below) iii) Salary Growth rate: a) 9.00% 9.00% 6.50% 7.00% 5.00% 0.00% 7.46% For gratuity plan the attrition rate varies from 2% to 12% (previous year: 2% to 12%) for various age groups. 7.18% 7.18% 7.46% 7.18% As at 31-3-2024 As at 31-3-2023 iv) Attrition Rate: b) Company pension plan Gratuity plan 7.46% Corporate Overview Management Discussion and Analysis Integrated L&T Aviation Services Private Limited 4 Yes Subsidiary Kesun Iron and Steel Company Private Limited[1] 3 Yes Yes Wholly Owned Subsidiary [WOS] Subsidiary Bhilai Power Supply Company Limited 2 L&T Construction Equipment Limited 1 (Yes/No) No. WOS Yes 5 L&T Capital Company Limited L&T Modular Fabrication Yard LLC 9 Yes Subsidiary Larsen & Toubro Heavy Engineering LLC 8 Yes Transaction entered during the year WOS 7 Yes WOS of L&T Global Holdings Limited Larsen & Toubro International FZE 6 Yes WOS L&T Global Holdings Limited Name of the Subsidiary Company Sr 462 Unfunded gratuity represents a small part of gratuity plan which is not material. Further, the unfunded portion includes amounts payable in respect of the Company's foreign operations which result in gratuity payable to employees engaged as per local laws of country of operation. The defined benefit plan for gratuity of the Company is administered by separate gratuity funds that are legally separate from the Company. The trustees nominated by the Company are responsible for the administration of the plan. There are no minimum funding requirements of these plans. The funding of these plans are based on gratuity fund's actuarial measurement framework set out in the funding policies of the plan. These actuarial measurements are similar compared to the assumptions set out in (g) above. Employees do not contribute to any of these plans. The Company operates gratuity plan through a trust wherein every employee is entitled to the benefit equivalent to fifteen days last salary drawn for each completed year of service. The same is payable on termination of service or retirement whichever is earlier. The benefit vests after five years of continuous service. The Company's scheme is more favorable as compared to the obligation under Payment of Gratuity Act, 1972. 3 2 1 Gratuity plan: Characteristics of defined benefit plans and associated risks: Post-retirement medical care plan: h) NOTE [45] Notes forming part of the Standalone Financial Statements (contd.) Statements Reports Report Financial Statutory Disclosure pursuant to Indian Accounting Standard (Ind AS) 19 "Employee Benefits" (contd.) 459 The Post-retirement medical benefit plan provides for reimbursement of health care costs to certain categories of employees post their retirement. The reimbursement is subject to an overall ceiling sanctioned based on cadre of the employee at the time of retirement. The plan is unfunded. Employees do not contribute to the plan. In addition to contribution to state-managed pension plan (EPS scheme), the Company operates a post retirement pension scheme, which is discretionary in nature for certain cadres of employees. The quantum of pension depends on the cadre of the employee at the time of retirement. The plan is unfunded. Employees do not contribute to the plan. Nature of relationship (a) List of related parties over which control exist and status of transactions entered during the year: Disclosure of related parties/related party transactions pursuant to Ind AS 24 "Related Party Disclosures" NOTE [47] Notes forming part of the Standalone Financial Statements (contd.) Notes forming part of the Standalone Financial Statements LARSEN & TOUBRO Company's pension plan: 461 (i) The Company's exports qualify for various export benefits offered in the form of duty credit scrips under foreign trade policy framed by Department General of Foreign Trade India (DGFT). Income accounted towards such export incentives and duty drawback amounts to 72.50 crore (previous year 86.06 crore). Disclosure pursuant to Ind AS 20 "Accounting for Government Grants and Disclosure of Government Assistance" NOTE [46] All the above defined benefit plans expose the Company to general actuarial risks such as interest rate risk and market (investment) risk. The Company manages provident fund plan through a provident fund trust for its employees which is permitted under the Employees' Provident Fund and Miscellaneous Provisions Act, 1952. The plan mandates contribution by employer at a fixed percentage of employee's salary. Employees also contribute to the plan at a fixed percentage of their salary as a minimum contribution and additional sums at their discretion. The plan guarantees interest at the rate notified by Employees' Provident Fund Organisation. The contribution by employer and employee together with interest are payable at the time of separation from service or retirement whichever is earlier. The benefit under this plan vests immediately on rendering of service. The interest payment obligation of trust-managed provident fund is assumed to be adequately covered by the interest income on long term investments of the fund. Any shortfall in the interest income over the interest obligation is recognized immediately in the Statement of Profit and Loss as actuarial loss. Any loss/gain arising out of the investment risk and actuarial risk associated with the plan is also recognized as expense or income in the period in which such loss/gain occurs. Trust managed provident fund plan: 4 (ii) The Company's manufacturing facility is eligible for certain incentives under the Investment Promotion Scheme 2014. Income accounted towards such incentives amounts to 1.38 crore (Previous year Nil). Subsidiary 7.25 13.15 110.46 73.85 36.61 19.02 19.02 17.85 17.85 Mutual funds Equity Debt instruments - PSU Bonds 171.41 171.41 207.03 207.03 Debt instruments - State Government Bonds 106.87 25.41 50.89 76.30 Mutual funds - Debt 1.01 0.40 0.40 Others 1.48 1.48 1.48 106.87 1.48 3.58 3.58 3.84 3.84 Fixed Deposits 4.01 4.01 Special Deposit Scheme 1.01 125.73 Debt instruments - Central Government Bonds Cash and cash equivalents Particulars Gratuity plan crore Disclosure pursuant to Indian Accounting Standard (Ind AS) 19 "Employee Benefits" (contd.) e) The fair value of major categories of plan assets are as follows: NOTE [45] Notes forming part of the Standalone Financial Statements (contd.) Statements Reports Report Financial Statutory Integrated Management Discussion and Analysis Corporate Overview Equity instruments Quoted As at 31-3-2024 Unquoted Total 216.55 216.55 249.22 249.22 Debt instruments - Corporate Bonds 23.23 23.23 125.73 46.51 3.81 3.81 4.35 4.35 Total As at 31-3-2023 Unquoted Quoted 46.51 Closing balance of the plan assets 682.95 87.93 27.41 74.14 74.14 1.15 3935.50 146.99 146.99 123.86 4.70 332.08 249.36 82.72 372.19 284.10 4.70 123.86 88.09 257.22 257.22 27.41 1.57 423.91 2.72 (0.47) 12.28 6.51 6.23 As at 31-3-2023 As at 31-3-2024 3) Company pension plan Post-retirement medical benefit plan 144.70 2) Plans The average duration (in number of years) of the defined benefit plan obligations at the Balance Sheet date is as follows: f) 410.37 3604.37 4359.42 (0.47) 1) Gratuity plan 144.70 1,320.13 1,320.13 Invit Instruments Special Deposit Scheme Mutual funds Debt Mutual funds Equity Debt instruments - PSU Bonds Debt instruments State Government Bonds Debt instruments - Central Government Bonds Other (Payables)/Receivables Debt instruments - Corporate Bonds Cash and cash equivalents Particulars crore 623.27 60.77 562.49 770.87 Equity instruments 7.26 Closing balance of the plan assets Quoted 1,497.43 1,497.43 497.76 497.76 1,284.87 134.26 134.26 1,284.87 Trust-managed provident fund plan 14.49 Total As at 31-3-2023 Quoted Unquoted Total 9.68 216.31 1,451.74 461.94 461.94 1,451.74 216.31 As at 31-3-2024 Unquoted 9.68 14.49 87 Yes PT Larsen & Toubro Hydrocarbon Engineering Indonesia[2] LTIMindtree (Thailand) Limited [16] 62 Nielsen+Partner Pte Ltd 61 LTIMindtree Swizerland AG [15] 60 Nielsen+Partner Unternehmensberater GmbH 59 LTIMindtree PSF S.A.[14] 58 Syncordis Limited 57 WOS of Syncordis S.A. Syncordis France SARL 56 63 Nielsen&Partner Pty Ltd 64 LTIMindtree USA Inc. [17] No No 2 2 2 2 2 ≥ ≥ ≥ ≥ ≥ ≥ ≥ ≥ ≥ WOS of LTIMindtree Limited LTIMindtree UK Limited 67 WOS of LTIMindtree Limited WOS of LTIMindtree GmbH Powerup Cloud Technologies Private Limited [18] WOS of LTIMindtree Limited Lymbyc Solutions Private Limited [18] 65 WOS of Nielsen+Partner Unternehmensberater GmbH WOS of Nielsen+Partner Unternehmensberater GmbH WOS of Nielsen+Partner Unternehmensberater GmbH WOS of Nielsen+Partner Unternehmensberater GmbH WOS of Lymbyc Solutions Private Limited WOS of LTIMindtree GmbH WOS of Syncordis S.A. WOS of Syncordis S.A. 66 No LTIMindtree S.A.[13] WOS of LTIMindtree Limited 51 Subsidiary of LTIMindtree Limited WOS of LTIMindtree Limited WOS of LTIMindtree Limited LTIMindtree South Africa (Pty) Limited 50 LTIMindtree Financial Services Technologies Inc. 49 LTIMindtree LLC 48 (Yes/No) Transaction entered during the year WOS of LTIMindtree Limited WOS of LTIMindtree Limited Nature of relationship LTIMindtree Information Technology Services (Shanghai) Co, Ltd.[11] WOS of LTIMindtree Limited 52 LTIMindtree Spain, S.L [12] LTIMindtree Norge AS 54 Variable No No No No 55 No No No 을을을을을을을을 WOS of LTIMindtree Limited LTIMindtree, Sociedad De Responsibilidad Limitada De Capital 53 WOS of LTIMindtree Limited No No No No No No No No No No 2 2 2 2 2 2 2 2 WOS of L&T Technology Services LLC WOS of LTIMindtree Limited Mindtree Software (Shanghai) Co., Limited ('MSSCL'), Republic of 81 Orchestra Technology, Inc. [20] 80 No Yes WOS of L&T Technology Services Limited WOS of L&T Technology Services Limited WOS of L&T Technology Services Limited WOS of L&T Technology Services Limited WOS of L&T Technology Services Limited WOS of L&T Technology Services Limited WOS of L&T Technology Services Limited WOS of L&T Technology Services LLC No No China[21] 82 Yes WOS of L&T Power Development Limited Subsidiary 86 Nabha Power Limited 85 No WOS of L&T Power Development Limited L&T Technology Services (Canada) Ltd L&T Himachal Hydropower Limited No WOS of L&T Power Development Limited L&T Arunachal Hydropower Limited [22] 83 Yes WOS L&T Power Development Limited 84 79 L&T Technology Services (Shanghai) Co. Ltd. 78 Yes Subsidiary L&T Technology Services Limited 69 No WOS of LTIMindtree Limited LTIMindtree Middle East FZ-LLC 70 68 No No No No No No No No LTIMindtree Canada Limited 71 Esencia Technologies India Private Limited [19] Seastar Labs Private Limited [19] 77 Graphene Solutions Taiwan Limited 76 Graphene Solutions SDN. BHD. 75 L&T Technology Services Pte. Ltd. L&T Thales Technology Services Private Limited 74 73 L&T Technology Services LLC 72 No WOS of L&T Technology Services Limited Yes Subsidiary of L&T Technology Services Limited Graphene Semiconductor Services Private Limited [19] 10 47 46 WOS of L&T Seawoods Limited Elevated Avenue Realty LLP[6] 28 WOS L&T Seawoods Limited 27 WOS L&T Innovation Campus (Chennai) Limited [5] 26 WOS L&T Realty Developers Limited 25 WOS Hi-Tech Rock Products and Aggregates Limited 24 29 L&T Parel Project Private Limited 30 Chennai Vision Developers Private Limited WOS of L&T Valves Limited L&T Finance Holdings Limited [8] 36 L&T Valves USA LLC 35 L&T Valves Arabia Manufacturing LLC 34 WOS of Larsen & Toubro International FZE Subsidiary of L&T Realty Developers Limited Subsidiary of L&T Realty Developers Limited WOS WOS of L&T Seawoods Limited L&T Valves Limited 33 Think Tower Developers Private Limited [7] 32 L&T Westend Project LLP 31 WOS of L&T Realty Developers Limited WOS of L&T Valves Limited Larsen & Toubro (East Asia) SDN.BHD. Subsidiary of Larsen & Toubro International FZE Larsen & Toubro Electromech LLC 14 WOS L&T Hydrocarbon Saudi Company 13 Subsidiary Larsen Toubro Arabia LLC 12 Company W.L.L. Yes Subsidiary Larsen & Toubro Kuwait Construction General Contracting 11 No Subsidiary 15 L&T Geostructure Private Limited 16 L&T Geo-L&T JV for Maharatangarh project WOS of Larsen & Toubro International FZE Subsidiary Larsen & Toubro T&D SA Proprietary Limited 22 Larsen & Toubro Saudi Arabia LLC 21 Larsen & Toubro Qatar LLC [4] 20 23 Larsen & Toubro (Oman) LLC WOS of L&T Geostructure Private Limited WOS WOS of L&T Geostructure Private Limited Subsidiary Subsidiary L&T Infrastructure Engineering Limited [3] 18 L&T Geo-L&T UJV CMRL CS 17 19 Subsidiary 37 L&T Finance Limited [9] Yes Yes Yes Yes Yes No Yes Yes No No No Yes Yes Yes Yes Yes Yes Yes No No. Name of the Subsidiary Company Sr Disclosure of related parties/related party transactions pursuant to Ind AS 24 "Related Party Disclosures" (contd.) NOTE [47] Notes forming part of the Standalone Financial Statements (contd.) Statements Yes Reports Financial Statutory Integrated Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 Yes Report Yes Yes No WOS of L&T Finance Limited L&T Financial Consultants Limited 42 WOS of L&T Finance Limited L&T Infra Investment Partners Trustee Private Limited 41 WOS of L&T Finance Limited 43 L&T Infra Investment Partners Advisory Private Limited WOS of L&T Finance Limited L&T Infra Credit Limited [9] 39 WOS of L&T Finance Limited L&T Mutual Fund Trustee Limited [9] 38 Subsidiary 40 LTIMindtree GMBH Mudit Cement Private Limited [10] 44 Yes No Yes Subsidiary of Larsen & Toubro International FZE Yes No No WOS of L&T Financial Consultants Limited Yes Yes Yes Subsidiary LTIMindtree Limited 45 Subsidiary of L&T Finance Limited L&T Infra Investment Partners Yes 97 4014.74 7.76 (h) Mr. T. Madhava Das 14.47 3.86 18.33 8.92 2.36 11.28 (i) Mr. Anil Parab 9.85 2.61 12.46 4.28 1.11 5.39 Non-executive Directors: (a) Mr. A.M. Naik 1.69 1.50 [3] 3.19 3.36 3.00 [3] 13.17 2.76 10.41 28.03 10.53 2.78 13.31 9.55 2.51 12.06 (e) Mr. J.D. Patil 2.12 18.3114] 10.98 121 6.36 31.41 20.81 5.57 26.38 14.57 3.89 18.46 (g) Mr. S.V.Desai 14.82 3.95 9.26 (f) Mr. Subramanian Sarma (d) Mr. M. V. Satish (b) Other Non-executive Directors 5.12 No. i. Accounts receivable crore As at 31-3-2024 As at 31-3-2023 Amount Amounts for major parties Amount Amounts for major parties Subsidiaries, including: L&T Metro Rail (Hyderabad) Limited 1350.88 1383.77 L&T Geostructure Private Limited 729.66 241.50 728.14 239.11 Joint ventures, including: 29.28 93.42 L&T - MHI Power Boilers Private Limited Category of balance/relationship/parties Sr. (d) Amount due to/from related parties: [5] Represents fair value of ESOPs granted during the year which will be vested equally over a period of 4 years. 4.39 4.39 (c) Sivaram Nair A (Company Secretary) 1.70 0.02 1.72 1.57 0.02 1.59 Total 5.12 142.61 6.94 41.66 243.81 113.33 48.41 10.98 172.72 [1] Post employment benefits include gratuity 15.25 crore [2] Represents encashment of past service accumulated leave [3] Represents pension [4] Post employment benefits include gratuity 17.75 crore 52.60 12.04 2.52 9.52 116.39 100.63 105.60 90.79 116.39 133.64 100.63 17.71 123.95 14.20 9.69 3.51 133.64 16.09 17.71 15.84 16.09 15.84 16.09 15.84 "Major parties" denote entities accounting for 10% or more of the aggregate for that category of transaction during respective year. Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis 39586.86 52856.46 40531.36 7732.06 Total 47.03 Total (23.20) (891.86) xxvi Guarantee given on behalf of Subsidiaries, including: 52856.46 Larsen & Toubro International FZE Larsen & Toubro Saudi Arabia LLC 39586.86 Integrated 20343.96 14210.16 L&T Hydrocarbon Saudi Company Larsen Toubro Arabia LLC xxvii Contribution to post employment benefit plans (a) Towards employer's contribution to provident fund trusts, including: Larsen & Toubro Officers & Supervisory Staff Provident Fund Total (b) Towards employer's contribution to gratuity fund trusts: Laresen & Toubro Officers & Supervisors Gratuity Fund Larsen & Toubro Gratuity Fund Total (c) Towards employer's contribution to superannuation trust: Larsen & Toubro Limited Senior Officers' Superannuation Scheme Total Statutory Financial Report term benefit Executive Directors: (a) Mr. S.N.Subrahmanyan 39.15 10.50 32.40 82.05 27.54 7.36 34.90 Total (b) Mr. R. Shankar Raman 6.50 30.76 17.10 4.57 21.67 (c) Mr. D. K. Sen 0.21 15.3111 6.94 121 22.46 24.26 17.78 employee employment benefits benefits year Reports Statements Notes forming part of the Standalone Financial Statements (contd.) NOTE [47] Disclosure of related parties/related party transactions pursuant to Ind AS 24 "Related Party Disclosures" (contd.) xxviii. Compensation/benefits to key management personnel: crore 2023-24 2022-23 Key Management Personnel Short-term [5] Post- ESOP granted Short-term Post- employee employment benefits term benefit during the Other Long Total benefits Other Long L&T Infrastructure Development Projects Limited 83.68 3.19 Reports Statements Notes forming part of the Standalone Financial Statements (contd.) NOTE [47] Disclosure of related parties/related party transactions pursuant to Ind AS 24 "Related Party Disclosures" (contd.) Sr. Category of balance/relationship/parties No. vi. Impairment loss on loans & advances recoverable Subsidiaries, including: L&T Offshore Private Limited crore As at 31-3-2024 As at 31-3-2023 Amount Amounts for major parties Amount Amounts for major parties 6.50 86.78 Report Financial Statutory Integrated 385.96 Larsen & Toubro Saudi Arabia LLC 268.54 Joint ventures, including: 2035.90 2316.94 L&T Special Steels and Heavy Forgings Private Limited L&T Sapura Shipping Private Limited 1790.93 208.23 1829.14 345.96 5.08 Associates, including: 5.26 Magtorq Private Limited 3.86 5.05 Total 3566.93 6335.26 Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis 4.10 Nabha Power Limited Larsen & Toubro Heavy Engineering LLC Joint venture, including: L&T Parel Project Private Limited L&T Realty Developers Limited Joint venture: L&T MBDA Missile Systems Limited L&T - MHI Power Turbine Generators Private Limited Total ix. Advances received in the capacity of supplier of goods/services classified as "Advances from customers" in the Balance Sheet 1.23 1.23 270.10 440.16 134.05 260.09 207.67 202.04 164.06 43.62 162.03 40.01 1357.08 203.27 L&T Seawoods Limited L&T Valves Limited L&T Energy Green Tech Limited 1149.41 1731.25 1736.44 L&T Special Steels and Heavy Forgings Private Limited 1730.38 1730.38 Total 1737.75 1823.22 vii. Provision towards constructive obligation 81.50 Joint venture: 14.84 L&T Special Steels and Heavy Forgings Private Limited 14.84 14.84 Total 14.84 14.84 viii. Unsecured loans taken (including lease finance) Subsidiaries: 14.84 228.82 L&T Geostructure Private Limited 2861.92 Amount Amounts for major parties Amount Amounts for major parties 1329.05 893.90 248.23 140.54 168.35 91.89 164.04 (668.00) (182.31) 172.17 171.72 90.41 L&T - MHI Power Boilers Private Limited L&T - MHI Power Turbine Generators Private Limited L&T Special Steels and Heavy Forgings Private Limited Associates, including: Magtorq Private Limited Total As at 31-3-2023 As at 31-3-2024 crore Joint ventures, including: Total 1380.16 1477.19 473 LARSEN & TOUBRO Notes forming part of the Standalone Financial Statements Notes forming part of the Standalone Financial Statements (contd.) NOTE [47] Disclosure of related parties/related party transactions pursuant to Ind AS 24 "Related Party Disclosures" (contd.) 474 2599.08 Sr. No. ii. Accounts payables, including other payables Subsidiaries, including: L&T Modular Fabrication Yard LLC Larsen Toubro Arabia LLC L&T Geostructure Private Limited Larsen & Toubro Saudi Arabia LLC Larsen and Toubro (Oman) LLC L&T Technology Services Limited Category of balance/relationship/parties 148.23 1264.42 1459.61 736.26 742.39 Total 1708.33 2993.80 iv Impairment loss on investment in debt securities Joint venture: 213.17 213.17 213.17 L&T Special Steels and Heavy Forgings Private Limited 213.17 Total 213.17 213.17 V. Loans & advances recoverable Subsidiaries, including: 1526.93 L&T Metro Rail (Hyderabad) Limited 4013.06 213.17 L&T Special Steels and Heavy Forgings Private Limited 213.17 955.56 750.42 266.85 760.83 453.44 210.84 5.61 6.00 5.22 5.61 2359.51 iii. L&T Special Steels and Heavy Forgings Private Limited Kudgi Transmission Limited Investment in debt securities [including preference shares (debt portion)] 758.90 2038.24 L&T Metro Rail (Hyderabad) Limited 436.36 1078.31 L&T Finance Limited 322.55 959.92 Joint ventures: 949.43 Subsidiaries: Subsidiaries, including: Corporate Overview Integrated 0.79 0.67 L&T - MHI Power Turbine Generators Private Limited 0.79 0.67 Joint venture: 62.98 Larsen & Toubro International FZE 30.74 45.41 Larsen Toubro Arabia LLC 53.40 30.16 30.31 55.64 67.98 148.26 263.34 Larsen & Toubro Saudi Arabia LLC L&T Metro Rail (Hyderabad) Limited L&T Hydrocarbon Saudi Company Total 264.01 149.05 xxi L&T Parel Project Private Limited 60.06 2.36 10.02 11.64 12.38 12.82 8.92 18.44 9.80 Subsidiaries, including: 26.15 L&T Power Development Limited 10.57 15.39 28.53 47.68 77.42 L&T Valves Limited L&T Seawoods Limited Subsidiaries, including: Interest paid to L&T Realty Developers Limited Joint ventures: Guarantee charges recovered from parties Total 11.03 11.43 L&T Construction Equipment Limited 11.03 11.43 Subsidiary: Commission received, including those under agency arrangements xix 3.89 5.25 Total 0.19 0.25 Ms. Meena Subrahmanyan 0.23 0.32 Close member of KMP's family, including: 0.53 Mr. Subramanian Sarma 0.58 11.43 11.03 Integrated Annual Report 2023-24 Corporate Overview parties for major Amount Amounts Amounts for major Amount 2022-23 2023-24 crore No. XX Nature of transaction/relationship/major parties Disclosure of related parties/related party transactions pursuant to Ind AS 24 "Related Party Disclosures" (contd.) NOTE [47] Notes forming part of the Standalone Financial Statements (contd.) Statements Reports Report Financial Statutory Integrated Management Discussion and Analysis Sr. L&T MBDA Missile Systems Limited L&T - MHI Power Turbine Generators Private Limited Total (0.49) L&T Innovation Campus (Chennai) Limited 4.96 L&T Offshore Private Limited (3.31) Elevated Avenue Realty LLP 1.79 L&T Modular Fabrication Yard LLC 5.04 10.90 3.38 1.77 6.59 (13.45) L&T Metro Rail (Hyderabad) Limited L&T Hydrocarbon Saudi Company Larsen Toubro Arabia LLC 12.55 1.96 Subsidiaries, including: xxiv Amount recognised/(reversed) in Profit or Loss as provision towards bad and doubtful debts (including expected credit loss) L&T Technology Services Limited (0.21) Joint ventures, including: (27.32) L&T Hydrocarbon Saudi Company L&T Power Development Limited (70.24) Larsen & Toubro Heavy Engineering LLC (891.86) (70.24) Subsidiaries, including: Amount recognised in Profit or Loss on account of impairment/(reversal of impairment) loss on investment and inter corporate deposit XXV 15.68 Amounts for major parties 0.45 1.73 (25.36) Total L&T Infrastructure Development Projects Limited (22.41) L&T - MHI Power Boilers Private Limited L&T Deccan Tollways Limited (5.08) L&T Sapura Offshore Private Limited 3.13 0.79 parties Amount Amounts for major 86.87 33.92 72.42 42.41 375.69 223.52 541.40 307.86 Total L&T - MHI Power Boilers Private Limited 81.22 Joint venture: Total L&T Special Steels and Heavy Forgings Private Limited Kudgi Transmission Limited L&T Sapura Shipping Private Limited Joint ventures: Nabha Power Limited L&T Finance Limited L&T Metro Rail (Hyderabad) Limited Subsidiaries, including: xxii Interest received from 90.24 xxiii Amount written off as bad debts 0.80 100.48 15.60 Amount No. Nature of transaction/relationship/major parties Sr. 2022-23 2023-24 crore 472 Disclosure of related parties/related party transactions pursuant to Ind AS 24 "Related Party Disclosures" (contd.) NOTE [47] 18.07 Notes forming part of the Standalone Financial Statements (contd.) LARSEN & TOUBRO 471 20.37 20.37 20.37 641.88 389.08 57.68 58.31 27.19 Notes forming part of the Standalone Financial Statements Management Discussion and Analysis Mr. S. N. Subrahmanyan 0.99 Rent received, overheads recovered and miscellaneous income xiv. 39.29 33.70 Total 8.93 9.24 L&T - MHI Power Turbine Generators Private Limited 28.45 18.29 38.22 31.64 0.29 1.50 L&T Sapura Shipping Private Limited Joint ventures, including: L&T Metro Rail (Hyderabad) Limited L&T Valves Limited L&T Hydrocarbon Saudi Company 0.35 0.72 Subsidiaries, including: 527.88 345.43 LTIMindtree Limited 9.42 12.60 xv.(a) Charges incurred for deputation of employees from related parties Total 13.66 L&T Infrastructure Development Projects Limited L&T - MHI Power Turbine Generators Private Limited L&T Sargent & Lundy Limited L&T Energy Hydrocarbon Engineering Limited 37.62 1.07 28.83 74.04 L&T - MHI Power Boilers Private Limited Joint ventures, including: 126.39 L&T Finance Limited 54.64 75.78 L&T Technology Services Limited 116.53 159.54 97.02 7.84 L&T Geostructure Private Limited Rent paid, including lease rentals under leasing/hire purchase arrangements Subsidiaries, including: crore L&T- Chiyoda Limited Joint ventures, including: L&T Energy Hydrocarbon Engineering Limited L&T Aviation Services Private Limited L&T Technology Services Limited LTIMindtree Limited Subsidiaries, including: Charges paid for miscellaneous services xii. No. Nature of transaction/relationship/major parties Sr. Disclosure of related parties/related party transactions pursuant to Ind AS 24 "Related Party Disclosures" (contd.) NOTE [47] Notes forming part of the Standalone Financial Statements (contd.) Statements Reports Report Financial Statutory 2023-24 2022-23 Amount Amounts for major xiii. 303.48 290.63 Total 1.15 L&T - MHI Power Boilers Private Limited 7.83 L&T Sargent & Lundy Limited 6.30 18.69 2.06 26.45 35.73 29.40 215.18 29.90 199.34 277.03 281.59 for major parties parties Amount Amounts 9.04 601.92 442.45 11.66 112.24 L&T Infrastructure Development Projects Limited 119.39 144.34 129.83 327.85 1067.12 233.96 1219.02 366.54 1568.08 2519.42 L&T - MHI Power Boilers Private Limited Joint ventures, including: L&T Finance Limited L&T Technology Services Limited LTIMindtree Limited Subsidiaries, including: Dividend received xvi. 89.55 120.12 Total Total 2649.25 1712.42 xvii. Buyback of shares Mr. R. Shankar Raman 1.38 1.88 Mr. A.M Naik 3.66 4.93 Key Management Personnel, including: xviii. Dividend Paid 22.76 Total 0.93 2.61 2.62 Close member of KMP's family, including: 3.20 Mr. Anil Parab 5.47 Mr. Subramanian Sarma 10.20 Mr. R. Shankar Raman 20.14 Key Management Personnel, including: Ms. Meena Subrahmanyan 1.03 L&T Special Steels and Heavy Forgings Private Limited 0.98 Amounts for major parties Amount No. Nature of transaction/relationship/major parties Sr. 2022-23 2023-24 crore 470 Disclosure of related parties/related party transactions pursuant to Ind AS 24 "Related Party Disclosures" (contd.) Amounts NOTE [47] Notes forming part of the Standalone Financial Statements LARSEN & TOUBRO 469 0.51 0.51 0.51 Total L&T Realty Developers Limited Subsidiaries, including: 10.20 Notes forming part of the Standalone Financial Statements (contd.) 0.72 Amount parties L&T Infrastructure Development Projects Limited 5.59 47.03 L&T Sapura Shipping Private Limited 7.50 9.71 Joint ventures: 12.28 15.54 14.62 for major 18.65 22.38 L&T Seawoods Limited L&T Realty Developers Limited Elevated Avenue Realty LLP 19.02 19.98 L&T Geostructure Private Limited 82.05 110.41 xv.(b) Charges recovered for deputation of employees to related parties Subsidiaries, including: 17.96 91.63 Joint ventures, L&T Realty Developers Limited 100.00 239.25 100.00 3 Hi-Tech Rock Products & Aggregates Limited India 100.00 100.00 100.00 100.00 4 L&T Seawoods Limited India India 100.00 100.00 100.00 5 Kesun Iron & Steel Company Private Limited [2] India 95.00 95.00 6 L&T Geostructure Private Limited India 99.00 100.00 100.00 L&T Innovation Campus (Chennai) Limited [1] 99.90 Notes forming part of the Standalone Financial Statements Notes forming part of the Standalone Financial Statements (contd.) NOTE [48] Disclosure pursuant to Ind AS 27 "Separate Financial Statements" Investment in following subsidiaries, associates and joint ventures is accounted at cost. Subsidiaries: Sr. Name of the subsidiary No. As at 31-3-2024 As at 31-3-2023 Principal place of business 2 Proportion of direct ownership (%) Proportion of direct Proportion of effective ownership ownership (%) interest/voting power(%) Indian subsidiaries 1 Bhilai Power Supply Company Limited India 99.90 99.90 99.90 Proportion of effective ownership interest /voting power(%) LARSEN & TOUBRO 99.00 7 xiv. Commitment to Fund[2] xiii. 2403.32 4280.65 Total 40.94 31.76 Magtorq Private Limited 41.38 31.76 Associates, including: Subsidiary: 556.15 569.94 370.22 L&T Special Steels and Heavy Forgings Private Limited L&T - MHI Power Boilers Private Limited 1285.83 1023.63 Joint ventures, including: 785.67 L&T Energy Hydrocarbon Engineering LTD 1500.57 Larsen & Toubro Saudi Arabia LLC 144.13 167.69 652.15 100.00 Total Revenue commitment received L&T Valves Limited India 100.00 100.00 100.00 100.00 8 L&T Energy Green Tech Limited India 100.00 100.00 99.99 Nabha Power Limited 99.99 L&T Aviation Services Private Limited India 100.00 100.00 100.00 100.00 10 LTIMindtree Limited India 68.64 LTIMindtree Limited Subsidiaries, including: 9 496.85 477 3. 7.68 7.68 2030.46 1852.00 Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Statutory Financial Report Reports Total Statements NOTE [47] Disclosure of related parties/related party transactions pursuant to Ind AS 24 "Related Party Disclosures" (contd.) Sr. Category of balance/relationship/parties No. XV. Guarantee given on behalf of xvi. Subsidiaries, including: L&T Hydrocarbon Saudi Company Larsen Toubro Arabia LLC Larsen & Toubro Saudi Arabia LLC L&T Metro Rail (Hyderabad) Limited Notes forming part of the Standalone Financial Statements (contd.) Larsen & Toubro International FZE Close Member of KMP's family: Ms. Meena Subrahmanyan 4.80 239.25 169.78 349.47 349.47 239.25 349.47 2007.30 1808.54 671.49 407.01 Nabha Power Limited 210.73 34.04 9.38 L&T Realty Developers Limited Larsen & Toubro (East Asia) SDN. BHD. 660.54 466.09 LTFZE - Infrastructure Contracts 257.58 L&T Innovation Campus (Chennai) Limited 220.12 Joint ventures, including: 15.48 43.46 L&T - MHI Power Boilers Private Limited L&T MBDA Missile Systems Limited 10.68 308.11 The interest rate charged on loans given to related parties are as per market rates. Joint ventures, including: As at 31-3-2024 L&T Infrastructure Development Projects Limited L&T Deccan Tollways Limited Total 85.06 84.13 41.82 30.89 21.09 34.54 16.18 14.41 2.74 L&T - MHI Power Turbine Generators Private Limited 25.15 87.80 0.36 0.45 1.73 109.28 "Major parties" denote entities account for 10% or more of the aggregate for that category of balance during respective year. [2] During the year, the Company had provided a revolving line of credit facility of 1000 crore to L&T Finance Limited as a stand-by liquidity support arrangement (the "Facility"), valid upto March 31, 2024. The utilisation against the Facility is NIL as at March 31, 2024. Notes: 1. All the related party contracts / arrangements have been entered on arms' length basis. 2. The amount of outstanding balances as shown above are unsecured and will be settled/recovered in cash. 22.61 crore L&T - MHI Power Boilers Private Limited L&T Hydrocarbon Saudi Company Amount Amounts for major parties Amount Amounts for major parties 129527.23 77408.90 60762.23 31895.83 18587.34 11071.24 18946.29 8616.00 Joint ventures, including: 21154.05 243.22 311.92 210.56 276.58 77720.82 L&T - MHI Power Turbine Generators Private Limited Total 129770.45 Provision towards expected credit loss related to the amount of outstanding balances Subsidiaries, including: L&T Metro Rail (Hyderabad) Limited Larsen Toubro Arabia LLC 20840.82 1076.11 As at 31-3-2023 L&T Modular Fabrication Yard LLC India 73.74 73.74 73.85 73.85 16 L&T Construction Equipment Limited India 100.00 100.00 100.00 100.00 L&T Technology Services Limited 17 India 100.00 100.00 18 L&T Realty Developers Limited India 100.00 100.00 100.00 100.00 19 L&T Energy Hydrocarbon Engineering Ltd L&T Infrastructure Engineering Limited [4] India 15 99.99 11 L&T Finance Limited India 65.86 65.86 66.11 66.11 12 L&T Capital Company Limited India 100.00 100.00 99.99 100.00 13 L&T Power Development Limited India 100.00 100.00 100.00 100.00 14 L&T Metro Rail (Hyderabad) Limited [3] India 99.99 99.99 100.00 68.68 100.00 100.00 Struck off from register of companies w.e.f August 08, 2023 [3] Integrated Annual Report 2023-24 478 Reclassified as subsidiary w.e.f December 27, 2023 and formerly known as L&T Sapura Offshore Private Limited [8] Incorporated on November 29, 2023 [7] Incorporated on April 20, 2023 [6] Incorporated on May 01, 2023 [5] [2] 5600 [4] One equity share (the Golden Share) is held by the Government of Telangana in pursuance of the Shareholders' Agreement. 9.58 Larsen & Toubro International FZE 28.00 18.73 LTIMindtree Limited 48.57 40.36 L&T Technology Services Limited 3225.26 64.62 Divested w.e.f January 3, 2024 100.00 [1] Merged with L&T Seawoods Limited on April 1, 2023 100.00 100.00 20 L&T Network Services Private Limited India 100.00 100.00 100.00 100.00 21 Corporate Park (Powai) Private Limited [5] India 100.00 | | | 100.00 Business Park (Powai) Private Limited [6] India 100.00 100.00 23 L&T Semiconductor Technologies Limited [7] India 100.00 100.00 24 L&T Offshore Private Limited [8] 100.00 22 68.68 India 17.82 Larsen & Toubro Gratuity Fund 44.12 Larsen & Toubro Officers & Supervisors Gratuity Fund 133.64 47.56 Due to gratuity trusts: (b) 47.49 51.30 Total 44.34 47.99 3.45 Larsen & Toubro Officers & Supervisory Staff Provident Fund 51.30 Due to provident fund trusts, including: (a) Post employment benefit plan xi. Amounts for major parties Amount Amounts for major parties Amount No. Category of balance/relationship/parties Sr. 47.49 As at 31-3-2023 107.15 26.49 47.56 L&T Valves Limited L&T Geostructure Private Limited xii. (b) Revenue commitment given Subsidiaries, including: 68.64 Total 119.00 31.70 9.92 112.03 20.60 119.00 31.70 Total LTIMindtree Limited Subsidiaries, including: xii. (a) Capital commitment given 10.65 Total 10.65 17.93 Larsen & Toubro Limited Senior Officers' Superannuation Scheme 10.65 17.93 Due to superannuation trust: (c) 133.64 L&T Construction Equipment Limited As at 31-3-2024 17.93 476 Mr. S.V.Desai 14.82 21.83 Mr. R. Shankar Raman 24.10 35.28 Mr. S. N. Subrahmanyan 92.20 123.61 Key management personnel, including: Due to directors [1]: X. Mr. Anil Parab 175.48 Total 0.11 0.11 Close member of KMP's family: 5.70 2.39 L&T - MHI Power Boilers Private Limited crore 5.70 17.03 2.39 Joint venture: 94.13 Mr. D. K. Sen Ms. Meena Subrahmanyan Mr. J.D. Patil Notes forming part of the Standalone Financial Statements NOTE [47] Mr. M. V. Satish Disclosure of related parties/related party transactions pursuant to Ind AS 24 "Related Party Disclosures" (contd.) LARSEN & TOUBRO 475 92.20 123.61 Total 7.60 13.06 9.07 13.41 [1] Includes commission due to non-executive directors 4.10 crore (previous year: 3.47 crore). Notes forming part of the Standalone Financial Statements (contd.) 8.62 12.44 Mr. Subramanian Sarma 0.18 Larsen & Toubro (East Asia) SDN. BHD. 3.50 8.57 7.72 1.73 18.56 7.75 Mr. T. Madhava Das 50.00 51.00 Baku, Azerbaijan L&T Hydrocarbon Caspian LLC (3) 14 51.00 51.00 12 India 13 37.74 37.74 India India 50.00 PNG Tollway Limited 51.00 L&T MBDA Missile Systems Limited 60.00 L&T Sapura Shipping Private Limited GH4India Private Limited [5] 74.00 18 50.00 50.00 50.00 50.00 India L&T-Sargent & Lundy Limited 17 60.00 India L&T Sapura Offshore Private Limited [4] 16 60.00 60.00 60.00 60.00 India 15 74.00 L&T-MHI Power Boilers Private Limited 74.00 50.10 50.10 50.10 50.10 India L&T Howden Private Limited 7 51.00 [1] 51.00 [1] India Ahmedabad - Maliya Tollway Limited [2] 6 63.86 26.24 33.33 51.00 26.24 8 74.00 India 51.00 India L&T Special Steels and Heavy Forgings Private Limited 11 75.50 75.50 75.50 75.50 India Raykal Aluminium Company Private Limited 10 51.00 51.00 51.00 51.00 India L&T-MHI Power Turbine Generators Private Limited 9 51.00 51.00 51.00 33.33 Movement in provisions: [2] Divested w.e.f. April 10, 2024 warranties liability in Product Particulars Contractual rectification Litigation Sr no Expected tax respect of Class of provisions a) Disclosures pursuant to Ind AS 37 "Provisions, Contingent Liabilities and Contingent Assets" NOTE [50] Face value per share (*) 55.81 2 2 66.89 A/D crore related obligation cost- Others Provision used during the year India 3 420.22 389.45 30.23 0.54 Additional Provision during the year 2 1013.92 54.90 construction contracts 479.84 74.04 394.79 10.35 Balance as at April 1, 2023 1 indirect taxes Total Diluted EPS() [1] Proportion of direct ownership is less than 0.01%. 1,40,64,39,151 D=B+C Basic earnings per share 2022-23 2023-24 Particulars Basic and diluted Earnings per Share [EPS] computed in accordance with Ind AS 33 "Earnings per Share": NOTE [49] Notes forming part of the Standalone Financial Statements (contd.) Statements Net profit after tax (crore) Reports Financial Statutory Integrated Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 [4] Reclassified as subsidiary w.e.f December 27, 2023 and post-reclassification renamed as L&T Offshore Private Limited [5] Incorporated on August 25, 2023 [3] Liquidated w.e.f September 25, 2023 Report Weighted average number of equity shares outstanding Basic EPS(*) A Weighted average number of equity shares outstanding for diluted EPS 1,40,52,58,885 11,80,266 12,33,876 C Add: Weighted average number of potential equity shares on account of employee stock options 1,38,98,17,026 7848.97 9304.33 AB Weighted average number of equity shares outstanding Net profit after tax ( crore) Diluted earnings per share 55.85 66.95 A/B 7848.97 1,40,52,58,885 1,38,98,17,026 B 9304.33 1,39,10,50,903 L&T Transportation Infrastructure Limited [2] Reports 51.00 Report Statements Notes forming part of the Standalone Financial Statements (contd.) NOTE [48] Disclosure pursuant to Ind AS 27 "Separate Financial Statements" (contd.) Foreign Subsidiaries : Sr. Name of the subsidiary Financial No. As at 31-3-2023 Proportion Principal place of business Proportion of direct ownership (%) of effective Proportion of Proportion of effective ownership direct ownership interest/voting As at 31-3-2024 Statutory Integrated Management Discussion and Analysis Sultanate of Larsen & Toubro Heavy Engineering LLC 8 Company W.L.L. 49.00 49.00 49.00 49.00 Larsen & Toubro Kuwait Construction General Contracting Kuwait 7 Oman 70.00 70.00 70.00 70.00 Sultanate of Larsen & Toubro Electromech LLC 6 Corporate Overview ownership 70.00 (%) power(%) Arabia 4 L&T Hydrocarbon Saudi Company LLC Kindgom of Saudi 100.00 100.00 100.00 100.00 75.00 Arabia L&T Modular Fabrication Yard LLC Sultanate of 70.00 70.00 70.00 70.00 Oman (0.55) 5 75.00 75.00 75.00 power(%) 100.00 4.35 100.00 1 Larsen & Toubro Saudi Arabia LLC Kindgom of Saudi 4.35 Arabia 2 L&T Global Holdings Limited UAE 100.00 100.00 100.00 100.00 3 Larsen & Toubro Arabia LLC Kindgom of Saudi interest/voting 70.00 70.00 70.00 [1] India L&T Chennai-Tada Tollway Limited [2] 1 Proportion of effective ownership interest (%) ownership (%) of direct Proportion 51.00 As at 31-3-2023 As at 31-3-2024 Proportion of direct ownership (%) Principal place of business No. Name of the joint venture Sr. Disclosure pursuant to Ind AS 27 "Separate Financial Statements" (contd.) Joint Ventures: NOTE [48] Proportion of effective ownership interest (%) [1] 51.00 2 51.00 51.00 51.00 India L&T Infrastructure Development Projects Limited [2] 4 51.01 0.02 51.00 0.02 India L&T Samakhiali Gandhidham Tollway Limited [2] 3 51.00 [1] 51.00 [1] India L&T Rajkot-Vadinar Tollway Limited [2] Notes forming part of the Standalone Financial Statements (contd.) Notes forming part of the Standalone Financial Statements LARSEN & TOUBRO 479 Proportion of of effective Proportion of direct ownership Principal place of business Proportion As at 31-3-2023 As at 31-3-2024 No. Sr. Name of associate Associate Companies : 100.00 100.00 100.00 100.00 Indonesia PT Larsen and Toubro 9 Oman ownership direct ownership 5 Proportion of effective ownership interest/voting [1] Under liquidation India Magtorq Private Limited 2 India Gujarat Leather Industries Limited [1] 1 42.85 42.85 42.85 42.85 50.00 50.00 50.00 50.00 power(%) power(%) interest/voting (%) (%) (42.42) 480 (98.52) Sr. crore (c) Items of income, expense, gains or losses related to financial instruments: Other disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": (contd.) NOTE [53] Notes forming part of the Standalone Financial Statements (contd.) Statements Reports Report Financial Statutory Integrated Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 77.91 64345.23 31.53 178.08 III. Measured at Fair Value through Other Comprehensive Income (FVTOCI): (i) Derivative instruments designated as cash flow hedges (ii) Embedded derivatives designated as cash flow hedges Particulars 20,26 20,26 Sub-total (III) Financial guarantee contracts Total (I+II+III+IV) 20,26 255.57 21.09 276.66 50.40 67805.25 146.55 IV. 4107.48 64038.94 2023-24 No. (323.78) (ii) Allowance/(reversal) for expected credit loss during the year 455.45 (15.48) Exchange gains/(losses) on revaluation or settlement of items denominated in foreign currency (trade receivables, loans given etc.) (i) Financial assets measured at amortised cost: B 384.57 295.47 Sub-total (A) 92.71 (23.07) 188.47 18.72 On embedded derivatives contracts not designated as cash flow hedges C. On futures not designated as cash flow hedges b. | Net gains/(losses) on financial assets, financial liabilities measured at fair value through Profit or Loss and amortised cost A (i) Financial assets or financial liabilities mandatorily measured at fair value through Profit or Loss: 1. Gains/(losses) on fair valuation or sale of Investments 2022-23 242.03 2. Gains/(losses) on fair valuation/settlement of derivative: a. On forward contracts not designated as cash flow hedges 57.79 (71.69) 175.08 4045.45 67432.25 751.71 41028.66 871.22 39975.11 (b) Category-wise classification for applicable financial liabilities: Total (1+11+111) 337.19 87.41 12009.93 65459.21 11585.33 10848.85 388.66 56.86 11294.37 64146.85 7,15 7,15 (ii) Derivative financial instruments designated as cash flow hedges (iii) Embedded Derivatives designated as cash flow hedges Sub-total (III) 10 Measured at fair value through Other comprehensive income (FVTOCI): Investment in government securities, bonds and debentures (i) III. 49351.20 48081.99 Sub-total (II) 1584.47 1874.13 4851.72 (iii) Trade receivables 11 36961.55 33152.58 (iv) Other recoverable 486 15 1588.91 (v) Cash and cash equivalents and bank balances 7,12,13 4981.44 4698.42 (vi) Other receivables 2200.17 Sr. As at crore As at 50.30 II. (i) Borrowings Measured at amortised cost: (ii) Trade payables 45.94 19,23,24 18151.09 Due to micro enterprises and small enterprises Due to others (iii) Others Sub-total (II) 25 22540.47 (324.57) Sub-total (I) 20.55 Particulars Note No. 31-3-2023 I. Measured at fair value through Profit or Loss (FVTPL): 17.14 (i) 20,26 25.39 33.16 (ii) Embedded derivatives not designated as cash flow hedges 20,26 Derivative instruments not designated as cash flow hedges 1422.60 (iii) (Reversal of provision) for impairment loss (other than expected credit loss) [net] (iv) Gains/(losses) on derecognition: (153.42) (23.80) (b) Derivative instruments that are measured at fair value through Profit or Loss Financial liabilities that are measured at amortised cost (185.40) (a) Derivative instruments (including embedded derivatives) that are measured at fair value through Other comprehensive income (reclassified to Profit or Loss during the period) Interest expense: C 1611.97 1722.37 Sub- total (B) 184.29 277.60 943.22 1046.94 (b) Financial assets measured at fair value through Other comprehensive income (c) Financial assets measured at fair value through Profit or Loss 484.46 397.83 Financial assets measured at amortised cost A Dividend income: Dividend income from investments measured at FVTPL crore 2023-24 2022-23 (c) B Interest income: 6.43 0.97 (55.55) 0.97 (a) Sub- total (A) Other income/(expenses): Sub-total (C) (d) Fair value of financial assets and financial liabilities measured at amortised cost: Financial assets measured at amortised cost: Integrated Annual Report 2023-24 [1] Valuation technique L2: Future cash flows discounted using market rates. Note: The carrying amounts of trade and other payables are considered to be the same as their fair values due to their short-term nature. The carrying amounts of current borrowings at fixed rate and other borrowings at floating rate of interest are considered to be close to the fair value. 46.19 L2[1] 12738.50 45.34 12723.13 15559.20 15535.42 Total Term loan from banks amount 12677.79 15559.20 15535.41 Redeemable non-convertible fixed rate debentures Fair value As at 31-3-2023 Carrying As at 31-3-2024 Carrying amount Particulars (i) The carrying amounts of trade receivables, loans, advances, investments in CBLO, Commercial Paper and Certificate of Deposit and cash & other bank balances are considered to be the same as their fair values due to their short-term nature. The carrying amounts of long-term loans given with floating rate of interest are considered to be close to the fair value. (ii) Financial liabilities measured at amortised cost: (2035.59) (1663.89) (2059.39) Total [II]=(A+B+C) (1849.29) (236.35) 488 crore Fair value Fair value hierarchy 12692.31 L2[1] (330.59) ||| No. Particulars 1. Gains/(losses) on fair valuation or sale of government securities, bonds, debentures etc. (ii) Derivative measured at fair value through Other comprehensive income: Financial assets measured at fair value through Other comprehensive income: (i) Gains/(loses) recognised in Other comprehensive income: A Net gains/(losses) on financial assets and financial liabilities measured at fair value through Other comprehensive income: || 246.10 203.01 Total [I]=(A+B+C) (72.50) 481.16 Sub-total (C) 259.12 561.06 (ii) Unclaimed credit balances written back (331.62) 1. Bad debts (written off)/written back (net) (45.89) (22.96) 2. Gains/(losses) on transfer of financial assets (on non-recourse basis) (3.35) (20.47) 178.96 Sub-total (B) (65.97) C Financial liabilities measured at amortised cost: (i) Exchange gains/(losses) on revaluation or settlement of items denominated in foreign currency (trade payables, borrowing availed etc.) (79.90) (573.62) (398.67) 1. Gains/(losses) on fair valuation or settlement of forward contracts designated as cash flow hedges 2. On embedded derivative contracts upon hedged future cash flows affecting the Profit or Loss or related asset or liability 16.89 Sub-total (B) Net gains/(losses) recognised in Other comprehensive income [II]= (A)-(B) 80.34 (38.82) 436.15 0.06 418.67 (853.34) LARSEN & TOUBRO Notes forming part of the Standalone Financial Statements Notes forming part of the Standalone Financial Statements (contd.) NOTE [53] Other disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": (contd.) Sr. 487 (185.12) 56.42 (ii) Derivative measured at fair value through Other comprehensive income: (123.72) (141.09) 2. Gains/(losses) on fair valuation or settlement of embedded derivative contracts designated as cash flow hedges (13.72) 41.52 105.09 (434.67) 1. On forward contracts upon hedged future cash flows affecting the Profit or Loss or related asset or liability B Less: Gains/(losses) reclassified to Profit or Loss from Other comprehensive income: (i) Financial assets measured at fair value through Other comprehensive income: 1. On government securities, bonds, debentures etc. upon sale 7.03 (17.54) Sub-total (A) 10 6.43 3475.10 1221.52 490.23 - (108.56) 1442.30 2539.63 (14100.96) (11.01) (331.95) 208.69 Derivatives including embedded derivatives for hedging receivable/ (payable) exposure with respect to firm commitments and highly probable transactions Net exposure to foreign currency risk in respect of recognised financial assets/(recognised financial liabilities) Derivatives including embedded derivatives for hedging receivable/(payable) exposure with respect to non-financial assets/(liabilities) Particulars Derivatives including embedded derivatives for hedging receivable/ (payable) exposure with respect to firm commitments and highly probable transactions Receivable/(payable) exposure with respect to forward contracts and embedded derivatives not designated as cash flow hedge Derivatives including embedded derivatives for hedging receivable/(payable) exposure with respect to non-financial assets/(liabilities) (26.92) (48.16) 135.55 (198.48) (616.54) As at 31-3-2024 Particulars US Dollars including Japanese EURO pegged (424.23) Yen Algerian Dinar British Pound currencies Net exposure to foreign currency risk in respect of recognised financial assets/(recognised financial liabilities) (3504.52) Kuwaiti Dinar crore 10.27 crore NOTE [52] Notes forming part of the Standalone Financial Statements (contd.) Notes forming part of the Standalone Financial Statements LARSEN & TOUBRO 483 Actual future gains and losses associated with the Company's investment portfolio and derivative positions may differ materially from the sensitivity analysis performed as at March 31, 2024 due to the inherent limitations associated with predicting the timing and amount of changes in foreign currency exchanges rates and the Company's actual exposures and position. To provide a meaningful assessment of the foreign currency risk associated with the Company's foreign currency derivative positions against off-balance sheet exposures and unhedged portion of on-balance sheet financial assets and liabilities, the Company uses a multi-currency correlated value-at-risk ("VAR") model. The VAR model uses a Monte Carlo simulation to generate thousands of random market price paths for foreign currencies against Indian rupee taking into account the correlations between them. The VAR is the expected loss in value of the exposure due to overnight movement in spot exchange rates, at 95% confidence interval. The VAR model is not intended to represent actual losses but is used as a risk estimation tool. The model assumes normal market conditions and is a historical best fit model. Because the Company uses foreign currency instruments for hedging purposes, the loss in fair value incurred on those instruments is generally offset by increases in the fair value of the underlying exposures for on-balance sheet exposures. The overnight VAR for the Company at 95% confidence level is 89.03 crore as at March 31, 2024 and 31.93 crore as at March 31, 2023. (485.62) (305.13) -- 7.89 (43.19) 2501.89 Receivable/(payable) exposure with respect to forward contracts and embedded derivatives not designated as cash flow hedge 507.44 164.96 (1822.53) As at 31-3-2023 US Dollars including pegged currencies EURO Japanese Yen Kuwaiti Dinar Algerian Dinar - 2.36 British (3537.74) (1693.77) (419.58) (212.09) (349.30) (55.09) 552.81 (677.01) 4639.53 Pound The net exposure to foreign currency risk (based on notional amount) in respect of recognised financial assets, recognised financial liabilities and derivatives for major categories is as follows: Disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": Market risk management (contd.) NOTE [52] The expenditure on research and development activities is as follows: NOTE [51] Notes forming part of the Standalone Financial Statements (contd.) Notes forming part of the Standalone Financial Statements LARSEN & TOUBRO 481 Disclosure in respect of contingent liabilities is given as part of Note 29 to the Balance Sheet. V. Other provisions mainly includes onerous contracts. Provision for litigation related obligations represents liabilities that are expected to materialise in respect of matters in appeal. Contractual rectification cost represents the estimated cost the Company is likely to incur during defect liability period as per the contract obligations in respect of completed construction contracts accounted under Ind AS 115 "Revenue from Contracts with customers" Expected tax liability in respect of indirect taxes represents mainly the differential sales tax liability on account of non-collection of declaration forms. Product warranties: The Company gives warranties on certain products and services, undertaking to repair or replace the items that fail to perform satisfactorily during the warranty period. Provision made as at March 31, 2024 represents the amount of the expected cost of meeting such obligations of rectification/replacement. The timing of the outflows is expected to be within a period of 1 to 3 years from the date of Balance Sheet. iv. iii. ii. i. 912.70 54.90 (ii) Investment in CBLO, Commercial Paper and Certificate of Deposit 4 Provision reversed during the year (1.12) (63.71) (41.00) Sr. (317.09) b) 5 Balance as at March 31, 2024 (5=1+2+3+4) Nature of provisions: 9.22 318.89 33.04 496.65 (422.92) Particulars No. (i) (i) Foreign exchange rate risk: The Company has both receivable and payable exposures in foreign currency. Accordingly, changes in exchange rates may affect the Company's revenues, cost, and profitability. There is a risk that the Company may also have to adjust the pricing due to competitive pressures when there has been significant volatility in foreign currency exchange rates. The Company may enter foreign currency forward and option contracts with financial institutions to protect against foreign exchange risks associated with existing assets and liabilities, firm commitments, forecasted future cash flows and net investments in foreign subsidiaries. In addition, the Company has entered, and may enter in future, into non-designated foreign currency contracts to partially offset the foreign currency exchange gains and losses on its foreign-denominated debt issuances. The Company's practice is to hedge a portion of its material net foreign exchange exposures with tenors in line with the project/business life cycle. The Company may also choose not to hedge certain foreign exchange exposures. 482 Integrated Annual Report 2023-24 Corporate Overview The Company regularly reviews its foreign currency and interest rate related exposures - both hedged and open. The Company primarily follows cash flow hedge accounting for Highly Probable Forecasted Exposures (HPFE), hence, the movement in mark to market (MTM) of the hedge contracts undertaken for such exposures is likely to be offset by contra movements in the underlying exposures values. However, till the point of time that the HPFE becomes an on-balance sheet exposure, the changes in MTM of the hedge contracts will impact the Balance Sheet of the Company. Further, given the effective horizons of the Company's risk management activities which coincide with the durations of the projects under execution, which could extend across 3-4 years and given the business uncertainties associated with the timing and estimation of the project exposures, the recognition of the gains and losses related to these instruments may not always coincide with the timing of gains and losses related to the underlying economic exposures and, therefore, may affect the Company's financial condition and operating results. The Company monitors the potential risk arising out of the market factors like exchange rates, interest rates, price of traded investment products etc. on a regular basis. For on-balance Sheet exposures, the Company monitors the risks on net unhedged exposures. Management Discussion and Analysis Statutory Financial Report Reports Statements Notes forming part of the Standalone Financial Statements (contd.) Integrated Disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": Market risk management (contd.) 1.07 9.36 Recognised as expense in the Statement of Profit and Loss crore 2023-24 2022-23 163.15 123.08 1.32 (ii) Capital Expenditure on: (b) intangible assets being expenditure on new product development (c) other intangible assets NOTE [52] Disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": Market risk management (a) Foreign exchange rate and interest rate risk: 4.54 (a) tangible assets (ii) Interest rate risk: 31-3-2024 The Company has completed transition of its LIBOR linked loans to SOFR linked loans. Note No. Particulars Sr. crore (a) Category-wise classification for applicable financial assets: Other disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": NOTE [53] Notes forming part of the Standalone Financial Statements (contd.) Notes forming part of the Standalone Financial Statements LARSEN & TOUBRO 485 year The table given in the Risk Management section of Management Discussion and Analysis lists out the commodity exposure for the (only for projects that been awarded and are under execution). The Company bids for and executes EPC projects on a turnkey basis. EPC projects entail procurement of various equipment and materials which may have direct or indirect linkages to commodity prices like steel (both long and flat steel), copper, aluminum, zinc, lead, nickel, cement etc. Accordingly, the Company is exposed to the price risk on these commodities. To mitigate the risk of commodity prices, the company relies on contractual provisions like pass through of prices, price variation provisions etc., and further uses hedging instruments where available (refer Note 53 (h)(ii)). There is a certain residual risk carried by the Company that cannot be hedged against. (d) (ii) Trade receivable written off during the year but still enforceable for recovery amounts to Nil (previous year: Nil) Commodity price risk management: 3481.74 323.78 324.57 Additional provision (net) towards credit impaired receivables 402.66 293.66 As at 31-3-2024 Write off as bad debts (546.44) (130.62) 0.57 Balance as at March 31 [refer Note 11] 4148.78 3968.78 Less: Balance reported under held for sale As at 31-3-2023 I. Measured at fair value through Profit or Loss (FVTPL): 39.97 (vi) Embedded derivatives not designated as cash flow hedges Sub-total (I) 7,15 113.47 168.39 4770.49 7,15 4098.08 Measured at amortised cost: (i) Loans 6,14 The Company's exposure to changes in interest rates relates primarily to the Company's outstanding floating rate debt. While most of the Company's outstanding debt in local currency is on fixed rate basis and hence not subject to interest rate risk, a major portion of foreign currency debt is linked to international interest rate benchmarks like SOFR. The Company may hedge a portion of these risks by way of derivatives instruments like interest rate swaps and currency swaps. 642.10 II. 2022-23 (v) Derivative instruments not designated as cash flow hedges 2694.57 (i) Investment in equity instruments 5 96.82 (ii) Investment in mutual funds 10 802.08 1499.59 (iii) Investment in bonds 10 347.73 760.81 (iv) Investment in InvITs 10 102.48 2224.35 2023-24 3968.78 18.31 Provision/(reversal) of allowance for expected credit loss 10.18 (12.66) (10.18) (12.66) 12.66 10.18 (10.18) Interest rates -increase by 0.5% in USD interest rate Interest rates -decrease by 0.5% in USD interest rate (b) Liquidity Risk Management: 1.05 (1.05) 0.03 (0.03) 1.05 (0.03) (1.05) 0.03 Interest rates -increase by 0.5% in INR interest rate Interest rates -decrease by 0.5% in INR interest rate US Dollar At at 31-3-2023 At at 31-3-2024 Particulars The exposure of the Company's borrowing to interest rate changes at the end of the reporting period are as follows: crore Floating rate borrowings crore As at 31-3-2024 2711.93 12.66 As at 31-3-2023 3664.96 Indian Rupee crore Impact on Profit and Loss after tax Impact on Equity 2023-24 2022-23 A hypothetical 50 basis point shift in respective currency LIBORS and other benchmarks, holding all other variables constant, on the unhedged loans would result in a corresponding increase/decrease in interest cost for the Company on a yearly basis as follows: 484 Particulars Particulars Financial Report Reports Statements Notes forming part of the Standalone Financial Statements (contd.) NOTE [52] Statutory Disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": Market risk management (contd.) Balance as at April 1 (i) The Company is making provisions on trade receivables based on Expected Credit Loss (ECL) model. The reconciliation of ECL is as follows: Changes in loss allowance for expected credit loss: The Company manages liquidity risk by maintaining sufficient cash and marketable securities and by having access to funding through adequate committed credit lines. Given the need to fund diverse businesses, the Company maintains flexibility by need based drawing from committed credit lines. Management regularly monitors the position of cash and cash equivalents. The maturity profiles of financial assets and financial liabilities including debt financing plans and liquidity ratios are considered while reviewing the liquidity position. The Company's investment policy and strategy are focused on preservation of capital and supporting the Company's liquidity requirements. The Company uses a combination of internal and external management to execute its investment strategy and achieve its investment objectives. The Company typically invests in money market funds, large debt funds, Government of India securities, equity funds and other highly-rated securities under a exposure limit framework. The investment policy focuses on minimising the potential risk of principal loss. To provide a meaningful assessment of the price risk associated with the Company's investment portfolio, the Company performed a sensitivity analysis to determine the impact of change in prices of the securities on the value of the investment portfolio assuming a 0.5% movement in the fair market value of debt funds and debt securities and a 5% movement in the NAV of the equity funds as below: Particulars (c) Credit Risk Management: Integrated The Company's customer profile include public sector enterprises, state owned companies and large private corporates. Accordingly, the Company's customer credit risk is low. The Company's average project execution cycle is around 24 to 36 months. General payment terms include mobilisation advance, monthly progress payments with a credit period ranging from 45 to 90 days and certain retention money to be released at the end of the project. In some cases, retentions are substituted with bank/corporate guarantees. The Company has a detailed review mechanism of overdue customer receivables at various levels within the organisation to ensure proper attention and focus for realisation. Corporate Overview - Management Discussion and Analysis Debt funds and debt securities - decrease by 0.50% in fair market value crore Increase/(decrease) in investment value As at 31-3-2024 44.89 (44.89) Equity funds increase by 5% in NAV Equity funds decrease by 5% in NAV As at 31-3-2023 53.32 (53.32) 5.21 (5.21) 1.49 (1.49) Debt funds and debt securities - increase by 0.50% in fair market value Integrated Annual Report 2023-24 c) Hydel & Tunnels Integrated Report Discussion and Analysis Management 44 Integrated Annual Report 2023-24 Urban Transit: As a frontrunner in augmenting urban transit infrastructure in India, this segment is currently involved in the construction of various metro rail packages, both elevated and underground, in Mumbai, Bengaluru, Chennai, Kolkata, Patna, New Delhi, and in Riyadh, KSA. e) Defence Infrastructure d) Ports & Harbours Corporate Overview Statutory The segment is also executing multiple mega packages in India's first High-Speed Rail Corridor, connecting Mumbai to Ahmedabad. It has deployed the latest high- end construction techniques for the construction of Full Span Launching Girders, which is a first-of-its-kind being implemented in India. With a view to promoting the 'Aatmanirbhar Bharat' initiative, in-house fabricated equipment like Straddle Carrier, Launching Girders, and Girder Transporter are being used in the construction of this prestigious project. Reports Statements Kudankulam Nuclear Power Plant, Tamil Nadu The business also undertakes Semi High-Speed Rail construction and has successfully completed a portion of the Delhi-Meerut RRTS project during the year. Hydel & Tunnels: The Hydel sub-segment offers comprehensive turnkey construction solutions for hydroelectric dam projects, barrages, pumped storage plants, and complex irrigation projects. Presently, the business is executing projects in Madhya Pradesh, Assam, Arunachal Pradesh, Uttarakhand, and Jammu & Kashmir. In the Tunnels segment, the business is executing two major rail tunnel packages connecting Rishikesh- Karnaprayag, Uttarakhand. Nuclear: The Nuclear sub-segment undertakes civil construction works for nuclear power plants. It has expertise in the construction of Pressurised Heavy Water Reactors (PHWRs) and Light Water Reactors (LWRS) in addition to Natural Draft Cooling Towers (NDCTs). Currently, the business is engaged in the construction of nuclear power plants and associated facilities in Tamil Nadu, Maharashtra, and Rajasthan. Ports & Harbours: This sub-segment has extensive expertise in constructing greenfield ports, shipyard structures, and seawater intake systems along the country's coastline. It specialises in offering comprehensive construction solutions for various marine infrastructure elements that include breakwaters, berths, jetties, wharfs, dry docks, and shore protection structures. Currently, the business has a presence in Tamil Nadu, Kerala, Andhra Pradesh, and Maharashtra. Defence Infrastructure: L&T has established a pre- eminent position in shoring up the country's defences. The Defence Segment offers single-point EPC solutions, from concept to commissioning, for various defence establishment infrastructure facilities in India. L&T GeoStructure Private Limited, a wholly-owned subsidiary, is a pioneer in the ground engineering space and is engaged in foundation and ground improvement- related projects. It has a strong, professional, and specialised team with knowledge of design, equipment, and methods to execute and supervise sophisticated foundation works. The business has expertise in deep piling and diaphragm walls, multi-cellular intake wells for river-linking, marine terminals with berths, jetties, and deep cut-off walls. Business Environment The Government is keen on developing core infrastructure that is crucial for economic advancement, as evidenced by the enhanced budgetary allocation in the Union Budget. The capital expenditure outlay for the FY 2024- 25 has increased by 11.1% to 11.1 trillion, equivalent to 3.4% of GDP. 45 Financial a) Urban Transit Infrastructure consisting of Metros, Semi & High-Speed Rail, Urban tunnels b) Nuclear LARSEN & TOUBRO Further, the business derives a competitive edge due to its dedicated in-house design and technical capabilities, competency cells, fabrication facilities, specialised training centres, and strong resource base consisting of a huge fleet of Plant & Machinery, skilled workforce and a talented pool of employees. □ Kanpur & Agra Metro Track package 12 TKM from Fatehabad to Jama Masjid was inaugurated for public operation in March 2024 LARSEN & TOUBRO □ A portion of EDFC projects CP 304 & CP 305 - 558 TKM (World Bank funded) was commissioned in March 2024 □ Signalling & Telecom STP-17 (JICA funded) - 488 TKM between New Makarpura to New Gholvad in Gujarat was completed and in commercial operation since March 2024 Outlook Railways Business Group As envisaged under the National Infrastructure Pipeline, Railway investments revolve around improving track capacity and freight efficiency, augmenting the speed of trains, enhancing safety, and ensuring better connectivity. Indian Railways (IR) has been actively focussing on network expansion in the past few years. In the Interim Union Budget for FY 2024-25, the railways sector has received the highest ever CapEx allocation of 2.6 trillion, with many projects aimed at capacity augmentation and traffic decongestion in the IR network. The Government is targeting Rail Line Construction of 20 km/day in FY 2024-25 to add 45,000 km of rail route in the next 8 years, with an estimated cost of 12 lakh crore, thereby increasing railways share in overall passenger/ freight movement from 25% to 50% by 2030. In recent years, there has been a thrust for the development of Semi-HSR Corridor projects, for which Track and Systems packages worth 25,000 crore are expected to be finalised in the next five years. Further, as part of the development of the Regional Rapid Transit System (RRTS), civil packages and system tenders in the next round are expected under the four RRTS corridors being implemented by the National Capital Region Transport Corporation (NCRTC). There is continued thrust on building new and expanding Metro/MRT Systems to facilitate ease of movement and reduce carbon footprint. Systems orders are expected to be finalised across four Metros in the upcoming two years. The business outlook for the next five years includes 12 new projects (450 Km) in the Track and Systems domain. Roads, Bridges & Formations The Government of India has identified roads and highways as the 'go to sector' for spurring infrastructure investment in India. It is believed that investments in infrastructure yield a direct multiplier of over 2.5x on the economy and the roads sector in India has presented itself as a priority recipient of these investments. Over the last decade, there has been more than a 50% increase in the total length of highways in the country. The Government's budget support for road infrastructure has also rapidly increased, leading to a budget of approximately USD 31.5 billion for FY 2023-24. The Ministry of Road Transport and Highways has requested a budgetary allocation of 3.25 lakh crore for FY 2024-25, marking a 25% y-o-y increase. 43 Mumbai Coastal Road (Package 1 & 4), Maharashtra Infrastructure Projects Segment The National Highways Authority of India spent a record 2,07,000 crore in the construction of national highways in 2023-24, the highest ever capital expenditure so far, and a jump of 20% compared to ₹1,73,000 crore spent in 2022-23 and 1,72,000 crore in 2021-22. The largest portion of the capital expenditure - equivalent to 24.5% or 2.7 Tn (USD 33.2 Bn) - has been allocated to the Ministry of Road Transport and Highways (MORTH) in the Interim Budget of FY 2024-25. The Government increased its allocation to the MORTH by 2.8% in the FY 2024-25 Budget. Higher budgetary allocations will help the ministry develop more highways and expressways amid difficulties such as rising interest rates and increasing land acquisition costs. A fair risk sharing between Government and private sectors, as well as an improved dispute resolution mechanism, will encourage public-private participation in infrastructure projects. International Front While the business continues to focus on neighbouring countries like Bangladesh, it is also strongly examining entry into ASEAN, the Middle East, and North & East African countries, where L&T has a strong presence and footprint. Most importantly, the business is targeting only those projects that are funded through secured sources like the Government of India - Lines of Credit or through Bilateral/ Multilateral funding agencies such as JICA, EBRD, ADB, etc. Heavy Civil Infrastructure Overview The Heavy Civil Infrastructure business is a market leader in EPC projects in the core civil infrastructure segments that are crucial for the country's sustainable economic growth and development. The business has a strong domestic presence to undertake projects of mega scale and complexity, with an ability to provide both EPC and turnkey solutions to suit customer requirements. The domestic market contributes more than 95% of the total revenue of the business. The business segments include: Infrastructure Projects Segment Other Key Achievements: Urban Transit □ Mumbai Trans Harbour Link (MTHL 1) - India's longest sea bridge (connects South Mumbai with Navi Mumbai), spanning nearly 22 km, was inaugurated in January 2024 Mumbai Coastal Road Project Phase 1 (MCRP) - This ambitious project was inaugurated in March 2024 Delhi Meerut RRTS Lot 1 – A leap in India's urban transit infrastructure. The project was inaugurated in March 2024 □ Successful completion of 100 km of superstructure erection in Mumbai-Ahmedabad High-Speed Rail (MAHSR) C4 project with cumulative concrete pouring of 50 lakh cubic metre India's first 30 m U-Girder span in metro construction placed successfully in Chennai Metro Rail Ltd. (CMRL RT-01) □ Record tunnelling of 37.4 m in a single day and an average of 450 m/month per TBM of 9.1 m dia. in RVNL Package 4 Head Race Tunnel breakthrough three months ahead of schedule at 120 MW Lower Kopili HEP in Assam Outlook According to CRISIL, India is expected to spend nearly 143 lakh crore on infrastructure in the next seven fiscals through 2030, more than twice the ~67 lakh crore spent in the previous seven fiscal 2017 to 2023, with a primary focus on Urban Transit, Renewable Energy, and Ports. The upcoming phase of infrastructure development is set to witness an increase in the average project size and a notable increase in mega-scale projects. The Government is also striving to encourage private and foreign investment through various initiatives such as a liberalised FDI policy, fiscal incentives, and measures such as PM Gati Shakti and the National Single Window System (NSWS) to improve ease of doing business. With India's aim to achieve Net Zero by 2070, the country has to focus on green construction technologies in future infrastructure projects. Faced with rapid urbanisation, the Government is considering the implementation of 47 LARSEN & TOUBRO 90 MW Floating Solar Project, Omkareshwar, Madhya Pradesh Infrastructure Projects Segment Mass Transit Systems such as Metro/Metro Lite/Metro Neo/Personal Rapid Transit System in Tier 1 and Tier 2 cities as an initiative, part of the green mobility drive to reduce the country's carbon footprint in the fight against climate change. With a strong push towards green energy initiatives, including favourable policies and incentives, the business has unprecedented opportunities in the Hydro, Nuclear, and Pumped Storage Sectors and an opportunity to contribute meaningfully to India's sustainable energy transition. Power Transmission & Distribution Overview L&T's Power Transmission & Distribution business vertical is a major EPC player, providing technology-focussed, end-to-end solutions for enabling access to clean, reliable electricity. It offers integrated EPC services and related digital solutions, starting from the establishment of Solar PV plants to smart & efficient transmission and distribution networks to last-mile electrification. It serves Renewable Energy Developers, Utilities, Industrial, and Infrastructure customers in 30 countries across the SAARC, ASEAN, the Middle East, Africa, North America, and CIS regions. The business is broadly organised into four major groups, viz., Renewables SBG, Transmission & Distribution (Domestic) SBG, International Transmission & Distribution Business Units, and the Digital Energy Solutions business. The Renewables business group is a single-stop EPC service provider globally for GW-scale Solar PV, Energy Storage, Microgrid, and Hybrid Renewable Projects. There are very few players with such strong experience and expertise in handling different module technologies, module mounting structures, and storage types. The business group has accumulated in-depth engineering and construction know-how to execute a vast range of renewable projects, be it hybrid, floating or linear, with best-suited technologies for terrain type and tracking. The round-the-clock renewable energy required by emerging load centres such as Data Centers and Green Hydrogen plants can be effectively provided by the business, with its wide-ranging capabilities in Solar PV Plants, Battery Energy Storage Systems, Energy Management Systems/SCADA, Wind Balance of Plant, and grid elements. Integrated Annual Report 2023-24 48 The Substation business unit provides turnkey solutions for Extra High Voltage (EHV) air-insulated/gas-insulated substations up to 1200kV, Flexible AC Transmission Systems (FACTS) devices such as Static Synchronous Compensator (STATCOMS) and Static VAR Compensator (SVCS), Digital Substation related solutions, and EHV cable systems. The Transmission & Distribution (Domestic) business group caters to various T&D utilities and developers, along with the bulk power supply consumers like metros, airports etc. Meerut Aligarh Ghaziabad Road Project in Uttar Pradesh, completed in March 2024 Key Projects Completed: Mumbai-Ahmedabad High-Speed Rail Project □ Patna Subway Tunnel - Construction of a 1.5 km pedestrian tunnel connecting Patna Museum and Bihar Museum, between Bailey Road and Chajju Bagh in Patna, Bihar Mumbai-Ahmedabad High-Speed Rail (MAHSR) C3 project Construction of 135.45 km stretch of the prestigious Mumbai-Ahmedabad High-Speed Rail Project, including construction of viaducts, stations, major river bridges, depots, tunnels, earth structures, stations, and other auxiliary works India's metro network is expanding at an unprecedented pace, with construction work currently in progress covering about 990 km across various cities. With the focus on sustainable development, continual expansion of our cities, and the realisation of greater first-mile and last-mile connectivity, India's metro systems have the necessary prioritisation from the Government. With over 12 corridors proposed in the National Rail Plan, High-Speed Rail projects are also being prioritised. Newer technology of hyperloop, more sustainable high-speed transportation, is also being considered in the country, with an MoU being signed between India and Switzerland. With the aim of alleviating city traffic congestion and improving connectivity between cities, many tunnel projects are also being prioritised by the Government. Hydel India's commitment at COP26 held at Glasgow in 2021 was for the creation of 500 GW non-fossil power generating capacity by 2030 and the Government is taking steps to increase investment towards offshore wind, pumped storage, hydel power, nuclear power, etc. Pumped Storage Plant (PSP) projects are considered as one of the first priorities amongst all energy storage systems to facilitate the achievement of this goal. The Government's prioritisation of mega hydel projects in Northeastern states and J&K also signals a promising business landscape. Nuclear As part of the country's efforts to achieve a cleaner energy transition, Nuclear Power Corporation of India Limited (NPCIL) is currently on a mission to commission a nuclear power reactor every year. The nuclear power capacity is expected to increase from 7,480 MW to 22,480 MW by 2032. Even though large-scale plants remain the main focus for the country, the Government is also exploring options for Small Modular Reactors (SMRS), with effectiveness and feasibility studies and collaboration with other countries. Ports & Harbours SagarMala, a flagship programme of the Ministry of Ports, Shipping and Waterways, aims to promote port-led development of the country. According to the Ministry, as many as 800 projects have been identified as a part of the programme, including Port Modernisation & New Port Development and Port Connectivity Enhancement, which will result in increased capacity and world-class infrastructure at Indian ports. With Indian regulation encouraging private sector involvement in the sector, the Ministry has identified around 80 Public Private Partnership (PPP) Projects, valued at 42,300 crore, set to unfold by FY 2024-25. Defence The Government is focussing on building new capacities and upgrading existing defence infrastructure with an increased budget allocation to the Ministry of Defence. This will lead to the creation of opportunities in various Defence Infrastructure projects. International The business is exploring opportunities in the Middle East and SAARC countries with prospects visible in the Urban Transit, Ports, and Harbours businesses. 46 Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial Reports Statements Mumbai Coastal Road (Package 1 & 4), Maharashtra Major Achievements Major Orders Won: - Orange Gate Tunnel - Design and construction of an Underground Road Tunnel Project between Orange Gate, Eastern Free Way to Marine Drive Coastal Road at Mumbai Kolkata Metro - Design and Construction of an Underground Metro Project connecting the Joka - Esplanade Metro Corridor in the city of Kolkata Delhi International Airport (Phase 3A) was inaugurated in March 2024 Overview KMTC. Infrastructure Projects Segment Health: Mega healthcare projects are on the rise with the Government accelerating healthcare infrastructure development across India. The Central Government's initiative to establish one medical college in each district (with a population of 10 lakh people +) has led to competition among state governments and private players to develop medical infrastructure. The Government's focus is on improving the bed-to-population ratio in order to align with WHO norms. Further, many large hospital redevelopment projects are shaping up across the country. Residential: In the Indian residential building sector, post-COVID, there has been a consistent year-on-year increase in project launches and property sales across the top 7 cities. Simultaneously, the average inventory has reached an all-time low of 15 months by the end of the previous year. This, coupled with improved affordability, stable interest rates, and wealth effect, are contributors to medium-term growth. IT OS and Data Center Business: The IT OS and Data Center Business is well-positioned to capitalise on the growing demand for Data Center construction in India and abroad, leveraging its experience, expertise, and strategic partnerships to tap into this lucrative market segment while continuing to serve its clients in the commercial and retail segments as well. International Opportunities: Projects within the GCC countries present substantial prospects in the international markets as well. Notably, Saudi Arabia offers promising opportunities in sectors like airports, data centers, and stadia. Further, in Oman, the business is focussed on projects in the hospitality industry, encompassing both hotels and hospitals. With healthy investment opportunities across public and private space anticipated in the medium-term across geographies, the business is well-placed to benefit from the improved momentum. Transportation Infrastructure a major presence in Saudi Arabia and the United Arab Emirates. L&T's Transportation Infrastructure business is one of the leading contractors in India, offering turnkey Design & Build/EPC solutions with single-point responsibility for all kinds of transportation infrastructure such as Roads, Runways, Bridges, Elevated Corridors, Railways, City Infra, Urban Transit, and Airports. The business is divided into two Strategic Business Groups (SBGs), namely, Railways Business Group (RBG) and Roads, Bridges & Formations (RBF) Business Group. The Railways Business Group (RBG) is subdivided into Mainline Business Unit (MLBU) and Metro Business Unit (MTBU). MLBU addresses EPC construction works in the domains of civil & trackwork, electrification and system integration, including signalling & telecommunication for all Mainline Railway Projects, Dedicated Freight Corridors, Rail Links for Port, Mining and Power Plant facilities, etc. MTBU carries out EPC construction works involving ballastless trackwork, electrification, and system integration for all Mass Rapid Transit System Projects and Regional Rapid Transit Systems in India and abroad. The Roads, Bridges & Formations (RBF) Business Group provides EPC Design & Build Construction services. RBF comprises a Roads & Runways (R&R) Business Unit, 40 Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Report Western Dedicated Freight Corridor (Civil & Track Package 14), Haryana-Uttar Pradesh Financial Reports Statements Eastern Dedicated Freight Corridor (Contract Package 303), Uttar Pradesh Meerut Aligarh Ghaziabad Road Project, Uttar Pradesh a Bridges Business Unit, and a Formations & Structure Business unit (F&S) with projects currently spanning across India, the UAE, and Mauritius. The R&R business is involved in the roads sector, viz. associated structures, cross- drainage, toll plaza, wayside amenities, etc.; in the airport sector, viz. construction of complete airside infrastructure (runways, taxiways, aprons, airfield ground lighting, fuel hydrant systems for international airports, both greenfield & brownfield); and to decongest urban areas, it provides design and construction solutions for elevated corridors. The Bridges Business deals with the construction of bridges, both in India and overseas, using ingenious and cutting- edge bridge construction techniques like incremental launching, segmental construction, full span, cable stay, precast & pre-stressed concrete, as well as steel & concrete composite construction. The F&S business provides construction services for all types of railway civil work in dedicated freight corridors, high-speed rail, and urban railway network projects. LARSEN & TOUBRO Airports: Supportive Government policies such as UDAN (Ude Desh ka Aam Nagrik) and the Air Cargo Policy are driving investments in various airport projects. While the business envisages an uptick in investments from the Central Government, large airports/expansions from private Airport Operators could be deferred. The business is also looking at opportunities in this sector in the GCC region. Factories: Backed by schemes like the 'National Policy on Electronics 2019', the Electronics and Semiconductor industry is expected to grow significantly in FY 2024- 25. Major players are looking to set up manufacturing facilities for batteries and semiconductor chips. With major automobile players actively expanding their existing production and venturing into Green Energy vehicles, this business is seeing healthy prospects in the medium-term. Flacq Teaching Hospital, Mauritius Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial Reports Statements □ Assam Cancer Care Foundation, Guwahati & Silchar, Assam □ AIIMS Guntur, Andhra Pradesh Delhi International Airport T1 Expansion and Hyderabad International Airport Expansion from GMR Airports Infrastructure Limited India International Convention & Expo Centre (IICC) Dwarka, IIT Hyderabad Ph2 and IIT Bhilai projects □ Statue Of Oneness in Omkareshwar, Madhya Pradesh Kalinga Stadium in Bhubaneshwar, Odisha Other Key Achievements: The business successfully designed and built the Shri Ram Janmabhoomi Temple and was instrumental in the timely consecration ceremony of Ram Mandir in Ayodhya, Uttar Pradesh. The construction industry has taken significant strides towards sustainability. Spearheading this transformation, CIDCO Kharkopar, CIDCO Bamandongri, and the CIDCO Precast yard at Bamandongri have teamed with the Maharashtra Electricity Board to operate entirely on renewable energy sources. These initiatives, in addition to reducing carbon footprint, also set a precedent for other construction projects to follow suit. Furthermore, the Prestige Serenity Project at Bengaluru recently implemented a Power Purchase Agreement - a first in the construction industry for the use of renewable energy for site operations. These milestones underscore the business' commitment to environmental stewardship. B&F is pioneering 3D concrete printing in India by constructing the country's first post office building using this cutting-edge technology. The Halasuru Post Office in Bengaluru spans 1000 sq. feet and was built within an impressive 45 days. The project encompasses the entire spectrum of construction, including structures, MEP (mechanical, electrical, and plumbing), and finishes. Outlook Public Spaces: Central Government initiatives such as the Target Olympic Podium Scheme (TOPS) and the improved scenario in the hospitality industry, contribute to existing traction in the Public Spaces business. The business is also actively tracking the expansions of global retailers like IKEA. Further, prospects from the Central Government in Central Vista projects, Mixed-Use Development, and other sports redevelopment projects signal a healthy outlook for this business. 39 The business has Engineering Design Centres located in Mumbai, Faridabad, and Chennai. It also has a Competency Development Centre at Kancheepuram and a Workmen Training Centre at Ahmedabad. Statutory Railways Business Group □ Commercial Operation commenced in the entire section of 283 TKM in the WDFC CP 303 Project (Khurja to Pilkhani in Uttar Pradesh - 283 TKM) in November 2023 The complete stretch of the 902 TKM section in EDFC CP-204, New Bhaupur to Mugalsarai in Uttar Pradesh, was commissioned in December 2023 □ EDFC CP-105, Dadri to Khurja in Uttar Pradesh, was Business Environment The Indergarh to Mej River Expressway Project in Rajasthan was inaugurated in February 2024 □ CTP 14, a portion of the Dedicated Freight Corridor project, was inaugurated in March 2024 □ Dwarka Package 3 (Delhi-Haryana Border to Gurugram (Haryana)) was inaugurated in March 2024 □ Dwarka Package 4 (NH248 BB ROB to NH-8 SPR Intersection (Haryana)) was inaugurated in March 2024 42 Integrated Annual Report 2023-24 87 Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial Reports Statements STICO □ Dhaka Metro (Phase 2 - Agragaon to Motijheel - 18 TKM) was inaugurated in November 2023 □ RRTS - Priority stretch (Sahibabad to Duhai - 34 TKM) in Uttar Pradesh was inaugurated in October 2023 inaugurated in January 2024 □ Bar Bilara Jodhpur Road Project in Rajasthan was inaugurated in May 2023 The Railway sector has been on a high growth trajectory for the past few years. The pace of investment has been at an all-time high with adequate financial support from the Government. The Finance Minister, in the interim budget speech of FY 2024-25, announced the Government's focus on implementing three major railway economic corridors - Energy, Port Connectivity, and High Traffic Density. The budget allocation in the interim budget FY 2024- 25 saw the largest ever capital expenditure allocation of *2.52 lakh crore in various areas like rolling stock, track augmentation works, electrification, passenger amenities, High-Speed Rail, and the Dedicated Freight Corridors. With an emphasis on the introduction of High-Speed and Semi High-Speed Corridors, Regional Rapid Transport Systems, Suburban Rail Systems, first & last mile connectivity projects, modernisation of railway stations, implementation of Automatic Train Protection System 'KAVACH', manufacturing of Vande Bharat trainsets, and Electric Locomotives, the sector has been abuzz with activities, thereby opening up various opportunities for the business. □ Mukkola Junction to Kerala/Tamil Nadu Border Road Project was completed and received PCOD (Provisional Commercial Operations Date) in June 2023 The total budgetary outlay for infrastructure-related ministries increased from around 3.7 lakh crore in FY 2022-23 to 5 lakh crore in FY 2023-24, offering investment prospects for the private sector across the various transport sub-segments. The Government has also set ambitious targets for the transport sector, including the development of a two lakh-km national highway network and expanding airports to 220 by 2025. The aviation sector has seen increased activity in the past ten years. The number of airports has doubled to 149 during this period. 41 LARSEN & TOUBRO Dwarka Expressway, Haryana Infrastructure Projects Segment The Government is also focussing on developing new elevated corridor/flyover projects across major cities, with the primary aim of decongesting urban roads and highways. Roads, Bridges & Formations Major Orders Won: Major Achievements The business has completed/commissioned the following projects: Key Projects Completed: □ Bengaluru Suburban Rail project (Package C4) in Bengaluru, Karnataka, from Rail Infrastructure Development Company (Karnataka) Limited (K-RIDE) □ Bhogapuram Airport in the state of Andhra Pradesh, from GMR Visakhapatnam International Airport Limited (GVIAL) The container integration facility at Kancheepuram augments the capabilities of the business with an annual capacity to integrate ~ 400MWh of battery energy storage system with associated intelligent management and control systems. In addition to India, the Renewables SBG has Dahisar Bhayandar Bridge in Mumbai, from Municipal Corporation of Greater Mumbai (MCGM) □ Palasbari to Sualkuchi Cable-Stayed Bridge across the river Brahmaputra in Assam, from Public Works Roads Department (PWRD), Assam Jakarta Mass Rapid Transit (MRT) Project (Phase 2A) (Contract Package CP205) for MRT Jakarta through L&T's long-term Japanese partner, Sojitz Corporation Mumbai-Ahmedabad High-Speed Rail - Traction Power Supply Package (EW1) from National High-Speed Rail Corporation Limited (NHSRCL) Versova Dahisar Bridge in Mumbai, from Municipal Corporation of Greater Mumbai (MCGM) Balance as at April 01, 2022 Gains/(losses) recognised in Profit or Loss during 2022-23 Balance as at March 31, 2023 Gains/(losses) recognised in Profit or Loss during 2023-24 Balance as at March 31, 2024 crore 69.32 9.37 78.69 7.90 86.59 LARSEN & TOUBRO Notes forming part of the Standalone Financial Statements Equity Investment in Tidel Park Limited 489 10848.85 11585.33 Management Discussion and Analysis 25 bps change in capitalization rate would result in +/- 0.66 crore (post tax-0.50 crore) [PY: +/- 0.60 crore (post tax- 0.45 crore)] Particulars A. Non derivative liabilities: crore As at 31-3-2024 As at 31-3-2023 Within After Within After Note twelve twelve Total twelve twelve Total months months months months Borrowings 19, 23, 24 1% change in net realization would result in +/- 0.31 crore (post tax-0.23 crore) [PY: +/- 0.28 crore (post tax-0.21 crore)] Sensitivity 31-3-2024 and 31-3-2023: (g) Maturity Profile of Financial Liabilities (undiscounted values): 31.53 Total 322.60 322.60 228.38 228.38 Valuation technique and key inputs used to determine fair value - 1. Level-1 Equity shares, mutual funds, bonds, InvITs, debentures and government securities- Quoted price in the active market. 2. Level-2 Derivative instrument - Mark to market on forward covers and embedded derivative instruments is based on forward exchange rates at the end of reporting period and discounted using G-sec rate plus applicable spread. (f) Movement of items measured using unobservable inputs (Level 3): 11022.78 Particulars NOTE [53] Other disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": (contd.) Significant unobservable inputs used in level 3 fair value measurements and sensitivity of the fair value measurement to changes in unobservable inputs. Particulars Fair value as at 31-3-2024 31-3-2023 Significant unobservable inputs crore 86.58 78.69 31-3-2024 and 31-3-2023: 1. Net realization per month 35 per sqft. (PY: 31.827 per sqft) 2. Capitalisation rate 11.50% Notes forming part of the Standalone Financial Statements (contd.) 14849.90 25872.68 8808.49 Forward contracts Embedded derivatives Total 20, 26 20, 26 272.94 41.64 11.11 314.58 11.11 284.05 41.64 325.69 166.76 201.50 66255.87 43.81 184.35 49.23 210.57 23.01 233.58 (h) Details of outstanding hedge instruments for which hedge accounting is followed: Outstanding currency exchange rate hedge instruments (i) A. 490 Forward covers taken to hedge exchange rate risk and accounted as cash flow hedge: As at 31-3-2024 17.59 5.42 31.53 3997.96 2742.63 111.41 108.63 14519.45 11467.55 20276.04 Trade payables: 25 Due to micro enterprises and small enterprises 858.97 12.25 871.22 Due to others 39438.31 536.80 751.71 41028.66 Other financial liabilities 3720.45 104.25 Lease liabilities 128.95 Total B. Derivative liabilities: 55169.46 154.08 15657.28 39975.11 3824.70 283.03 70826.74 662.48 38286.03 3886.55 92.87 51736.42 89.23 20, 26 21.09 21.09 20,26 10.14 86.68 (ii) Mutual fund units 10 1499.59 96.82 1499.59 2224.35 23.68 78.80 102.48 2224.35 (iii) Bonds 10 5 347.73 760.81 760.81 (iv) InviTs 10 2694.57 2694.57 802.08 802.08 (v) Derivative instruments not designated as cash flow hedges 7,15 18.31 347.73 18.31 companies) Level 3 Integrated Statutory Financial Report Reports Statements Notes forming part of the Standalone Financial Statements (contd.) NOTE [53] Other disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": (contd.) (e) Fair value hierarchy of financial assets and liabilities measured at fair value: Particulars Total Financial assets: (i) Equity shares (other than those held in subsidiary, joint ventures & associate crore As at 31-3-2024 Note Level 1 Level 2 Level 3 Total Level 1 As at 31-3-2023 Level 2 (a) Designated at FVTPL: Corporate Overview 39.97 (vi) Embedded derivative Instruments not designated as cash flow hedges (a) Designated at FVTPL: (i) Derivative instruments not designated as cash flow hedges 20,26 25.39 25.39 33.16 33.16 (ii) Embedded derivative instruments not designated as cash flow hedges 20,26 20.55 Financial Liabilities: 20.55 17.14 (b) Designated at FVTOCI: (i) Derivative financial instruments designated as cash flow hedges 20,26 255.57 255.57 146.55 146.55 (ii) Embedded derivative financial instruments designated as cash flow hedges 17.14 39.97 87.41 16108.01 15396.25 632.96 7,15 113.47 113.47 168.39 168.39 (b) Designated at FVTOCI: (i) Debt instruments viz. government securities, bonds and debentures 10 10848.85 11585.33 (ii) Derivative financial instruments designated as cash flow hedges 7,15 78.80 388.66 337.19 337.19 (iii) Embedded derivative financial instruments designated as cash flow hedges 7,15 56.86 Total 15400.88 577.30 86.68 56.86 16064.86 87.41 388.66 Equity Investment 18.03 As at 31-3-2023 2.87 12.5% Turnover Ratio operations Trade Receivables Trade Payables Turnover Ratio Net Capital Turnover Ratio Purchases [3] 3.23 Average Trade 2.07 21.6% Payables Revenue from operations Average Working Capital 4.36 3.30 2.52 Average Gross Revenue from sold 17.5% Return on Equity Ratio (%) Profit for the year after tax Average 13.69% 11.32% 20.9% Shareholders Equity Inventory Turnover Ratio Trade Receivables Cost of goods Average Inventory NA[7] NA[7] ΝΑ 32.0% Higher revenue and lower working capital in current year Net Profit Ratio (%) Return on Capital Employed (%) Profit for the year after tax Profit after tax + Finance Cost (net off tax on Finance Cost) (190.37) as hedging instruments Changes in fair value of forward contracts designated 126.01 (23.83) 149.84 42.74 (13.27) 56.01 period related hedges which is designated as hedging instrument for time Changes in the spot element of the forward contracts 283.23 (101.46) Net of Tax Tax Gross 384.69 45.12 1.56 (145.25) (5.24) Revenue from Operations 7.37% 7.10% 3.8% Average Capital Employed [4] 12.23% 10.41% 17.5% Return on Investment (%) Treasury Income [5] Average investment [6] 9.23% (42.85) 8.10 (50.95) Changes in intrinsic value of option contracts 27.74 32.98 1.83 Debt Service [2] Earnings available for debt service [1] (xii) L&T Seawoods Limited Guarantees issued by bank out of the Company's sanctioned limits for CTO and CTE compliances to Maharashtra Pollution Control Board and for performance obligations 3.75 3.75 (xiii) L&T Geostructure Private Limited Guarantees issued by bank out of the Company's sanctioned limits for performance obligations 4.70 (xiv) Larsen & Toubro International FZE Corporate guarantees issued by bank out of the Company's sanctioned limits for performance obligation 21154.05 20840.82 (xv) LTH Milcom Private Limited (xvi) L&T Electrolysers Limited Total (B) 15.89 Corporate Guarantee given for subsidiary's performance obligations Guarantees issued by bank to-Solar Energy Corporation of India Limited, New Delhi-SIGHT scheme (PLI) 13.27 L&T Special Steel & Heavy Forgings Private Limited LTIMindtree Limited (viii) (ix) (x) L&T Hydrocarbon Saudi Company LLC L&T -MHI Power Boilers Private Limited Corporate Guarantee given for subsidiary's performance obligations Corporate Guarantee given for subsidiary's performance obligations Guarantees issued by bank out of the Company's sanctioned limits for subsidiary's performance obligations 539.27 536.66 60762.23 20909.89 19.39 19.44 Nabha Power Limited Guarantees issued by bank out of the Company's sanctioned limitsor subsidiary's performance obligations 216.00 216.00 (xi) Guarantees issued by bank out of the Company's sanctioned limits for performance obligations 228.77 Investments in fully paid equity instruments and Current Investments 44.40 As at 31-3-2023 Variance % Reason of Variance [If change is more than 25%] Current Ratio (times) Current Assets Current Liabilities 1.26 1.36 -7.5% Debt Equity Ratio (times) Total debt Shareholder's 0.35 0.25 Equity 37.9% Higher borrowings during current year Debt Service Coverage Ratio (times) As at 31-3-2024 4.09 Denominator Ratio 129774.54 77720.82 [Note 5 and Note 10] 496 Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Statutory Financial Report Reports Statements Notes forming part of the Standalone Financial Statements (contd.) NOTE [58] Following are the analytical ratios for the year ended March 31, 2024 and March 31, 2023 crore Numerator (vii) (91.16) Opening balance As at 31-3-2024 Currency crore Current: (i) Forward contracts Particulars B. 492 Commodity exposure price exposure A. Cash flow hedge: (i) [1] The options contracts include a combination of calls and puts with different maturities and strike prices. 283.04 123.01 123.01 [1] 283.04 112.48 301.25 Carrying amounts of hedge instruments for which hedge accounting is followed: As at 31-3-2023 Currency Commodity exposure price exposure Asset Other financial assets 208.95 Current: (ii) Option contracts 19.60 79.37 5.83 Liability Other financial liabilities 170.98 Asset Other financial assets Non current: 15.40 125.47 36.86 233.97 Liability Other financial liabilities 36.39 281.14 51.98 [1] [1] 112.48 301.25 (crore) As at 31-3-2024 Copper (Tn) Aluminium (Tn) Particulars B. Commodity options contract: Other disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": (contd.) NOTE [53] Notes forming part of the Standalone Financial Statements (contd.) Notes forming part of the Standalone Financial Statements LARSEN & TOUBRO 491 [1] Negative nominal amount represents sell position. 7.55 171565.00 7.55 55.58 39.76 As at 31-3-2023 Asset Other financial assets Within Average (*crore) months months rate (*) twelve twelve Average Nominal amount (crore) After Within After twelve months crore) (*crore) (₹) (*crore) months rate twelve Nominal amount Liability Other financial liabilities - Net Investment Hedge: * crore Movement of hedging reserve & cost of hedging reserve (I) Sales, administration and other expenses Finance costs Manufacturing, construction and operating expenses Revenue from operation Progress billing Hedged expected future cash flows affecting Profit or Loss: Sales, administration and other expenses Future cash flows are no longer expected to occur: Particulars (k) Other disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": (contd.) Reclassification of hedging reserve & cost of hedging reserve to Profit or Loss NOTE [53] Notes forming part of the Standalone Financial Statements (contd.) Statements Hedging reserve/Cost of hedging reserve Reports 2023-24 0.64 Net of Tax Tax Gross Hedging reserve 2022-23 2023-24 crore 181.79 118.16 (185.03) 229.56 (42.77) 20.13 (2.71) (207.80) 5.78 3.89 2022-23 319.93 Report Statutory 1.29 1.87 As at 31-3-2023 Currency exposure As at 31-3-2024 Currency exposure crore Balance for which hedge accounting discontinued Balance towards continuing hedges Particulars Breakup of hedging reserve & cost of hedging reserve balance: Liability Other financial liabilities Asset Other financial assets Current: (i) Forward contracts Particulars 15.74 24.74 1.67 13.60 crore Financial As at 31-3-2024 reserve Integrated Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 151.98 92.21 (4.77) reserve 76.79 (4.68) (25.33) Cost of hedging hedging reserve Cash flow Cost of hedging As at 31-3-2023 reserve Cash flow hedging 14557.21 18946.29 164.34 Class of asset 2023-24 2022-23 2023-24 Additions during the year 2022-23 Carrying amount As at 31-3-2024 As at 31-3-2023 Depreciation for the year Land 4.15 0.56 3.36 257.95 261.85 Buildings 90.64 4.45 crore The Company has taken various assets on lease such as, plant and equipment, land, buildings, office premises, vehicles and computer equipment. Generally, leases are renewed only on mutual consent and at a prevalent market price and sub-lease is restricted. Details with respect to right-of-use assets: 494 3-4 years 83.32 80.61 4-5 years 49.53 Beyond 5 years Total 384.95 822.97 As at 31-3-2023 88.52 53.46 49.10 51.46 48.47 429.16 720.17 (b) Where the Company is a lessee: 70.15 157.75 80.00 201.02 105.49 475.61 422.59 i. Interest expense on lease liabilities amounts to 17.64 crore (previous year: 12.02 crore). ii. The expense relating to payments not included in the measurement of lease liability and recognized as expense in the Statement of Profit and Loss during the year are as follows: iii. • Low value leases - 49.78 crore (previous year: 47.33 crore) Short-term leases -3690.36 crore (previous year: 3309.97 crore) and Total cash out flow for leases amounts to 3067.64 crore during the year (previous year: 3413.55 crore) including cash outflow of short-term and low value leases. iv. Gain arising from sale and lease back transaction * 23.47 crore (Previous year Nil) Integrated Annual Report 2023-24 Corporate Overview 165.45 2-3 years 101.98 Total 132.03 Plant & equipment 18.73 27.03 1.06 22.13 10.71 28.37 Vehicles 0.14 0.06 6.08 5.93 Computer 0.34 0.59 0.34 114.30 1-2 years 102.55 122.01 As at 31-3-2024 (33.04) 174.76 Closing balance 107.76 (40.88) 66.88 319.93 (91.16) 228.77 crore 2023-24 2022-23 Gross (6.37) Cost of hedging reserve Opening balance Changes in the forward element of the forward 207.80 contracts where changes in spot element of forward (4.41) (5.78) (2.87) 15.16 Amount reclassified to Profit or Loss (76.52) 18.13 (58.39) (437.02) 69.50 (367.52) Amount included in non-financial asset/liability 4.48 (1.06) 3.42 14.56 (2.32) 12.24 Amount included in Progress Billing in balance sheet 1.37 Management Discussion and Analysis contract is designated as hedging instrument for time (3.09) Net of Tax (6.30) 1.58 (4.72) (139.11) 139.06 (4.77) 493 LARSEN & TOUBRO Notes forming part of the Standalone Financial Statements Notes forming part of the Standalone Financial Statements (contd.) NOTE [54] Disclosure pursuant to Ind AS 116 "Leases" (a) Where the Company is a lessor: Operating leases: The Company has given land, buildings and plant & equipment under operating lease. The lease income received during the year is 161.02 crore (previous year: 152.18 crore). Leases are renewed only on mutual consent and at a prevalent market price and sub-lease is generally restricted. Annual undiscounted lease payments receivable is as under: crore Particulars Upto 1 year Tax period related hedges Gross 1.60 0.78 (2.31) (185.90) 46.79 Amount reclassified to Profit or Loss 3.21 (0.81) 2.40 185.83 (46.77) Closing balance (6.25) 1.57 (4.68) (6.37) 1.60 Tax Net of Tax (4.77) Integrated Statutory Financial Working Capital (I) Business Park (Powai) Pvt Ltd Working Capital Total 81.50 82.37 81.50 8.25% 12.00% 18.16 17.92 18.16 17.92 2372.03 5286.07 [1] Excluding impairment of 1730.38 crore (previous year: 1730.38 crore) [2] Excluding impairment of Nil (previous year: 81.50 crore). 495 L&T Energy Green Tech Limited LARSEN & TOUBRO (k) L&T Heavy Engineering LLC [2] 204.05 342.82 347.47 342.82 for refinancing of loan taken for vessel (h) L&T Hydrocarbon Saudi Working Capital 223.19 Company Changes in fair value of swaps L&T Modular Fabrication Yard Working Capital 0.28 LLC (j) Working Capital 5.50% Notes forming part of the Standalone Financial Statements NOTE [57] (contd.) (iii) Larsen & Toubro Arabia LLC L&T MHI Power Turbine Generators Private Limited (iv) L&T Technology Services Limited 3 L&T Technology Services LLC Larsen & Toubro (Saudi Arabia) LLC Corporate Guarantee given for subsidiary's financial obligations Corporate Guarantee given for subsidiary's financial obligations Corporate Guarantee given for subsidiary's performance obligations Corporate Guarantee given for subsidiary's performance obligations Corporate Guarantee given for subsidiary's performance obligations Corporate Guarantee given for subsidiary's performance obligations 210.56 276.58 8616.00 8616.00 18587.34 11071.24 491.09 488.30 166.81 L&T Metro Rail (Hyderabad) Ltd Notes forming part of the Standalone Financial Statements (contd.) (ii) 31-3-2023 Notes: I. Above loans are unsecured II. Above figures include interest accrued III. Loans to employees (including directors) under various schemes of the company (such as housing loan, furniture loan, education loan, etc.) have been considered to be outside the purview of disclosure requirements. IV. Subsidiary classification is in accordance with the Companies Act, 2013 (vi) Guarantees given to Subsidiary & Joint venture Sr. No. Nature of the transaction (investment made/ guarantee given/security provided) (A) Purpose for which the loan/guarantee/security is proposed to be utilised by the recipient Companies: Balance as at 31-3-2024 (i) 7.08 Working Capital and Support (g) 15.19 16.42 25.78 16.61 0.41 0.34 There are no amounts due and outstanding to be credited to Investor Education & Protection Fund as at March 31, 2024. NOTE [57] Disclosure pursuant to regulation 34 (3) of Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulation, 2015 and Section 186 of the Companies Act, 2013. Sr. Nature of the transaction No. (loans given) Purpose for which the loan Rate of Interest is proposed to be utilised by the recipient Balance as at (a) L&T Special Steels & Heavy Forgings Private Limited [1] Working Capital and Project funding Interest due and payable towards suppliers under MSMED Act for payments already made Interest accrued and remaining unpaid at the end of the year to suppliers under MSMED Act Amount of further interest remaining due and payable even in the succeeding years NOTE [56] for loan outstanding as at 31-3-2024 7.00% 0.75 572.13 Report Reports Statements Notes forming part of the Standalone Financial Statements (contd.) NOTE [55] The Company has amounts due to suppliers under The Micro, Small and Medium Enterprises Development Act, 2006, [MSMED Act] as at March 31, 2024. The disclosure pursuant to the said Act is as under: crore Particulars Principle amount due to suppliers under MSMED Act, 2006 2023-24 2022-23 23.42 66.60 Interest accrued, due to suppliers under MSMED Act on the above amount, and unpaid Payment made to suppliers (other than interest) beyond the appointed day during the year Interest paid to suppliers under MSMED Act (Section 16) 1.72 1.48 633.97 0.79 L&T Sapura Shipping Pvt Ltd 31-3-2024 2023-2024 (d) Hi-Tech Rock Products & Investments in subsidiaries 26.31 Aggregates Limited (e) L&T Geostructure Private Limited Project funding 7.00% 17.77 22.00 23.04 27.23 (f) Larsen & Toubro Arabia LLC Working Capital 86.98 funding 31-3-2023 Limited 3399.84 Maximum outstanding during 2022-2023 1730.38 1730.38 1730.38 1730.38 (b) Nabha Power Limited Working capital and project funding 10.50% 383.75 273.53 383.75 2586.21 (c) L&T Metro Rail (Hyderabad) Working capital and project 2835.84 3894.70 14.59 (i) (5.60) 906.40 339.41 Arab Emirates Dirham 705.19 22.68 605.11 100.08 1018.03 22.66 1018.03 0.65 Kuwaiti Dinar 275.25 790.64 EURO 768.41 93.84 607.89 4.66 160.53 862.35 269.82 862.35 795.30 130.16 1496.29 22.61 (crore) (crore) (crore) (*crore) (a) Receivable hedges US Dollar 13390.81 84.48 11634.39 1756.41 12782.32 83.70 10347.59 2434.73 Qatari Riyal 1816.12 22.89 1777.63 Japanese Yen 2674.33 0.56 1411.98 38.50 1262.35 1626.45 1245.81 560.20 months 92.53 67.44 Management Discussion and Analysis Integrated Statutory Financial Report Reports Statements Notes forming part of the Standalone Financial Statements (contd.) NOTE [53] Other disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": (contd.) Corporate Overview As at 31-3-2024 Within Nominal Particulars Average twelve After twelve Within After amount rate As at 31-3-2023 Integrated Annual Report 2023-24 2.97 2.41 Saudi Riyal 192.21 22.02 192.21 Omani Riyal 10.91 219.16 10.91 93.84 214.40 93.84 Malaysian Ringgit 190.06 18.03 190.06 57.30 19.26 57.30 Thai Baht 22.93 2.43 22.93 2.97 492.76 months twelve twelve a) 2022-23 2023-24 crore Sr. No. Particulars Auditors' remuneration (excluding GST): NOTE [61] i. Refer Annexure C to the Board Report for the nature of CSR activities of the Company. 5.63 137.19 150.98 Paid as Auditor Total amount shown in Statement of Profit and Loss 8.80 Excess spend shown as asset in previous year charged to Statement of Profit and Loss on its utilisation (v) 131.56 142.18 (b) Statement of Profit and Loss 8.80 12.66 (a) Balance sheet Of which amount recognised in: (ivb)+(v) (i) Statutory audit fees 3.60 8.25 Integrated Annual Report 2023-24 498 There are no standards of accounting or any addendum thereto, prescribed by Ministry of Corporate Affairs under section 133 of the Companies Act, 2013, which are issued and not effective as at March 31, 2024. Recent pronouncements: NOTE [62] 0.20 0.24 For reimbursement of expenses d) 1.33 1.46 For other services including certification work c) 0.76 0.80 For Taxation matters b) 2.49 2.60 Limited review of standalone and consolidated financial statements on a quarterly basis (ii) 3.25 140.36 154.84 131.56 142.18 497 [6] Includes current investment, Inter corporate deposits, Fixed deposits and Collaterised Borrowing and Lending Obligation [7] Not material considering the size and the nature of operations of the Company [4] Includes average equity and average loan funds (including interest bearing advances) [3] Includes Manufacturing, construction and operating expenses [2] Finance cost + Principal repayments (net of refinancing) made during the year for long term borrowings [1] Profit before interest, tax and exceptional items year 54.8% Improved yields on current investments during current 5.96% Within Particulars Nominal amount (*crore) Average twelve After twelve Within After rate months months (₹) Nominal amount (crore) Average rate (*) LARSEN & TOUBRO months Notes forming part of the Standalone Financial Statements NOTE [59] 6.14 8.80 137.70 150.98 2022-23 2023-24 crore Actual spent (iv) Spend obligation (iii) (i)-(ii) Excess spend of previous year utilised (ii) Required to be spent Particulars (i) Sr. No. Disclosure related to Corporate Social Responsibility (CSR): NOTE [60] (iii) Reduction in the carrying value of investment in L&T IDPL to its net realisable value after considering customary closing adjustments: 47.03 crore. (ii) Gain on divestment of stake in L&T Transportation Infrastructure Limited, a subsidiary of L&T IDPL: 97.05 crore. (i) Gain of 397.97 crore on transfer of Carved-out Business of Smart World and Communication (SWC) Business unit of the Company to L&T Technology Services Limited (LTTS), a listed subsidiary with effect from April 1, 2023. Exceptional items (net of tax) include the following: Notes forming part of the Standalone Financial Statements (contd.) months [5] Includes profit/loss on sale and fair valuation of current investments, dividend on current investment and interest income (₹) US Dollars As at 31-3-2024 As at 31-3-2023 Within After Within After Nominal amount Average twelve Receivable hedges: twelve Nominal amount months months (crore) (*) (*crore) Average rate (*) twelve twelve months rate Particulars Options contract: C. Average twelve twelve rate months months (F) (crore) (*crore) ( crore) (crore) Receivable: Arab Emirates Dirham 32.57 22.82 32.57 152.19 22.32 152.19 Saudi Riyal 194.58 22.28 194.58 months (* crore) (*crore) (crore) (crore) months (* crore) (crore) (crore) (* crore) Copper(Tn) Aluminium(Tn)[1] Iron Ore(Tn) Coking Coal(Tn) 14.29 625.48 710211.45 659.90 192407.39 7309.80 625.48 649.97 9.93 178.67 372.45 6.95 7.34 Nickel(Tn) Lead(Tn) 130.21 1778778.54 55.58 173424.85 130.21 722240.47 200711.94 22.84 7465.00 7.08 23586.00 39.76 1893321.70 178.67 (* crore) 378.05 months Nominal amount (crore) rate (₹) twelve 446.07 [1] 446.07 476.79 [1] 476.79 [1] The options contracts include a combination of calls and puts with different maturities and strike prices. (ii) Outstanding commodity price hedge instruments Commodity forward contract: As at 31-3-2024 As at 31-3-2023 Within Particulars Nominal amount (crore) Average rate (*) twelve months After twelve months Within After Nominal amount (crore) Average twelve (₹) A. After 3996.35 162.79 Japanese Yen 1152.07 0.56 1130.91 21.16 912.41 0.65 899.47 12.94 Swiss Franc 188.90 89.23 187.69 1.20 366.68 90.89 366.68 British Pound 158.29 104.59 146.59 90.93 11.70 4159.14 14907.34 Nominal amount (crore) Average rate (*crore) twelve twelve months months (₹) (crore) (*crore) (*crore) (*crore) (b) Payable hedges US Dollar 14007.75 85.73 9499.57 4508.18 10092.09 82.47 9644.92 447.17 EURO 16366.04 1458.71 255.36 92.11 255.36 12.09 78.95 Canadian Dollar 1.80 61.55 1.80 2.23 60.96 2.23 B. As at 31-3-2024 As at 31-3-2023 Within Nominal Average Particulars twelve amount rate 101.45 Within months After twelve months 78.95 17.86 Forward covers accounted as Net Investment Hedge: 17.86 22.85 562.70 11.75 219.97 22.43 219.97 Qatari Riyal 562.70 120.39 22.87 120.39 183.24 Arab Emirates Dirham 22.54 183.24 Kuwaiti Dinar 171.79 273.47 171.79 173.20 268.72 Chinese Yuan 173.20 Accounts Payables Knight Engineers Contractors & 114 Accounts Payables 111 Accounts Payables 113 Accounts Payables Kissan Land Promoters Private Limited 112 Kishley Constructions Private Limited Kiwi Projects Private Limited Consultants Private Limited Accounts Payables Accounts Payables Kolkata Industrial Security Service Accounts Payables Private Limited 116 Ktek Level Engg Private Limited 117 Lakshman Singh Construction Private Limited 118 Lanster Developer Private Limited 119 120 Accounts Payables Laxmi Infra Eng Private Limited Accounts Payables Accounts Payables 115 Kegan Constructions Private Limited - [1] Accounts Payables NA L-Upd-Saubha-Auraiya Dehat And - [1] - [1] [1] - [1] [1] - [1] - [1] [1] - [1] - [1] 104 Jatra Services India Private Limited Accounts Payables 105 Jbs Estcon Private Limited Accounts Payables 106 Jodhpur Infra-Con Private Limited Accounts Payables 107 Jps Engineering Private Limited Accounts Payables 108 Jrc Biuildcon Private Limited Accounts Payables 109 Kazmi And Sons Builders Private Limited 110 Accounts Payables - [1] ΝΑ - [1] - [1] ΝΑ - [1] - [1] NA - [1] [1] NA - [1] -[1] ΝΑ - [1] [1] ΝΑ - [1] Kanpurnagar Dvvnl 121 Ganga Mechanical Works Private Limited Accounts Payables 122 123 Mangalam Consultancy Private Limited Manha Earthcon Private Limited 124 Manish Duggal Telecom Private Limited Accounts Payables Accounts Accounts Payables Payables NA 3 3 3 3 NA 3 3 3 3 3 3 33333 333333 0.02 NA - [1] - [1] ΝΑ 0.13 0.13 NA - [1] [1] ΝΑ 0.06 0.06 ΝΑ -[1] [1] ΝΑ 0.07 0.07 NA 0.03 0.03 ΝΑ - [1] [1] ΝΑ [1] -[1] ΝΑ 0.03 0.03 0.02 [1] 0.03 - [1] - [1] - [1] 1 ΝΑ - [1] [1] 0.03 0.03 ΝΑ - [1] [1] ΝΑ - [1] - [1] NA 0.04 0.04 501 LARSEN & TOUBRO Notes forming part of the Standalone Financial Statements Notes forming part of the Standalone Financial Statements (contd.) NOTE [63] (b) Balances with Struck off Companies (contd.) 502 crore Relationship Balance S. No. Name of the Struck off Company Nature of Transaction - [1] with the struck off company NA NA ΝΑ NA NA - [1] - [1] ΝΑ - [1] - [1] ΝΑ -[1] -[1] ΝΑ - [1] - [1] NA - [1] - [1] - [1] [1] - [1] - [1] 0.01 0.01 0.02 0.02 0.03 - [1] 0.05 - [1] 0.05 - [1] ΝΑ outstanding as at March 31, 2024 ཅམs ΝΑ - [1] - [1] 40 97 59 101 102 103 Janatha Readymix Concrete India Private Limited Infisoft India Technology Private Limited Inl-Intech India Automation (P) Limited 98 Infra American India Private Limited 99 100 Innovations Events And Entertainment Private Limited Inox India Private Limited Isha Heights And Silos Private Limited Accounts Payables Accounts Payables Accounts Payables Accounts Payables Accounts Payables Accounts Payables Accounts Payables ΝΑ ΝΑ ΝΑ 금금금금금금금금금 ΝΑ - [1] - [1] Balance outstanding as at March 31, 2023 - [1] Accounts Payables 91 Hsb Projects Private Limited Accounts Payables ΝΑ _ [1] [1] 92 Hudor Projects India Private Limited Accounts Payables NA 0.03 0.03 93 IS Earth Movers Private Limited Accounts Payables ΝΑ - [1] - [1] 94 Ifensys Software Solutions Private Limited Accounts Payables NA - [1] - [1] 95 Imperium Infratech Private Limited Accounts Payables 96 Indco Engineers & Contractors Private Limited ΝΑ - [1] outstanding as at March 31, 2024 _ [1] NA 0.01 0.05 0.05 0.01 0.01 ΝΑ - [1] - [1] - [1] 0.03 ΝΑ - [1] - [1] 0.03 - [1] - [1] [1] - [1] - [1] [1] 0.01 - [1] E I [1] ΝΑ - [1] [1] 503 LARSEN & TOUBRO Notes forming part of the Standalone Financial Statements Notes forming part of the Standalone Financial Statements (contd.) 0.02 NOTE [63] [1] 7.02 - [1] NA -0.04 ΝΑ - [1] [1] - [1] - [1] 0.01 0.01 0.07 0.07 ΝΑ - [1] 0.03 - [1] 0.03 - [1] ΝΑ - [1] - [1] 0.04 0.04 0.03 0.04 ΝΑ - [1] - [1] ΝΑ 7.47 - [1] (b) Balances with Struck off Companies (contd.) crore RBC Bearings Private Limited Accounts Payables 164 R Square E Service Private Limited Accounts Payables 165 Raas Infratech Private Limited Accounts Payables 166 Ramakrishna Power Tech Private Accounts Payables Limited 167 Rani Aishwarya Infracon Private Limited Accounts Payables 168 Rattiputra Construction Private Limited Accounts Payables 169 Real Construction Private Limited Accounts Payables 170 Real Tech Engineering And Accounts Payables Construction Private Limited 171 Realsharp Infraatech Services Private Limited 172 163 504 Accounts Payables Purma Plast Private Limited Relationship Balance Balance S. No. Name of the Struck off Company Nature of Transaction with the struck off company 158 Pioneer Tech Engineering Services Private Limited Accounts Payables ΝΑ NA outstanding as at March 31, 2023 [1] 159 Posorbis Infrastucture Private Limited Accounts Payables ΝΑ 160 Priyanka Managment Solution (India) Accounts Payables NA 0.02 0.03 0.50 0.50 Private Limited 161 Probus Infratech Private Limited 162 Accounts Payables [1] - [1] NA Accounts Payables 127 Mass Ventures Limited Accounts Payables 128 Maurya Devbuild Private Limited Accounts Payables 129 Maxtel Constructions Private Limited Accounts Payables 130 Maxx Ultra Conchem Opc Private Limited Accounts Payables 131 Mecavo (R&D) Private Limited Accounts Payables 132 Mecvil Infracon Private Limited Accounts Payables 133 Mei Engineers Private Limited 134 MSP Develco Private Limited 135 Muskan Techno Engineering Construction Private Limited 136 Nap Energy And Infratech Private Limited 137 Narshimha Buildtech Private Limited Marvel Technicals Sales And Service Privte Limited 138 126 [1] - [1] - [1] ΝΑ - [1] _ [1] ΝΑ - [1] Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Statutory Financial Report Reports Statements Notes forming part of the Standalone Financial Statements (contd.) NOTE [63] (b) Balances with Struck off Companies (contd.) crore S. No. Name of the Struck off Company Nature of Transaction Relationship with the struck off company Balance outstanding as at March 31, 2024 Balance outstanding as at March 31, 2023 125 Mars Dsp Waves Private Limited Accounts Payables ΝΑ [1] Nevil Consultancy Services Accounts Payables Accounts Payables Accounts Payables Accounts Payables 150 PAF Infrastructure Private Limited Accounts Payables 151 Paradisegarden Infraproject Private Limited Accounts Payables 152 Paramshiv Infra Private Limited 153 Parim Infocomm Private Limited 154 Peass Infra Private Limited 155 Perfect Office Systems Private Limited 156 Petrichor Emerging Technologies India Accounts Payables Accounts Payables Accounts Payables Accounts Payables Accounts Payables Private Limited 157 Pinak Security & Management Private Limited Accounts Payables 3 3 3 3 3 3 333 33 3 333333 3 3 3 3 33ZZZ ZZZZ Z - [1] -[1] - [1] - [1] - [1] -[1] Accounts Payables Accounts Payables Accounts Payables Accounts Payables Accounts Payables Accounts Payables Private Limited 139 New Proponent Security Services Private Limited Accounts Payables 140 Nexgen Transcom Private Limited Accounts Payables 141 Nirmal Aircon Private Limited Accounts Payables 142 143 Normet India Private Limited [1] Nirmal Sai Construction Private Limited Accounts Payables 144 Nstech International Private Limited Accounts Payables 145 Om Pranav Infrastructure Engineering Private Limited 146 Om Sai Project Developers And Engineers Private Limited 147 Onella Visions Private Limited 148 Opti Tech Infra Projects India Opc Private Limited 149 Orsang Infotech Private Limited Accounts Payables } } } } } } } } 3333333 333 3 Aircon System Engineers Private Limited Accounts Payables [1] 0.28 [1] 0.28 - [1] 0.01 0.01 Private Limited. 56 Devine Devbuild Private Limited Accounts Payables ΝΑ - [1] - [1] 57 Dhanamjay Infra Private Limited 58 Dhiren Construction India Private Limited Accounts Payables Accounts Payables NA - [1] [1] } ΝΑ 0.02 0.02 59 Dimensions India Private Limited Accounts Payables - [1] ΝΑ 0.02 [1] NA 0.01 0.01 0.01 0.01 ΝΑ - [1] [1] ΝΑ NA 0.24 0.27 0.07 0.02 NA - [1] - [1] ΝΑ - [1] NA - [1] - [1] -[1] NA 0.03 0.03 NA - [1] 0.12 _ [1] 0.02 NA - [1] Integrated Annual Report 2023-24 (b) Balances with Struck off Companies (contd.) NOTE [63] Notes forming part of the Standalone Financial Statements (contd.) Notes forming part of the Standalone Financial Statements LARSEN & TOUBRO 499 [1] - [1] - [1] ΝΑ - [1] 0.02 0.15 0.15 [1] [1] ΝΑ 0.02 0.01 0.02 -[1] [1] ΝΑ [1] - [1] - [1] 0.01 = 1 - [1] 500 [1] crore S. No. Name of the Struck off Company Corporate Overview Management Discussion and Analysis Integrated Statutory Financial Report Reports Statements Notes forming part of the Standalone Financial Statements (contd.) NOTE [63] (b) Balances with Struck off Companies (contd.) 99 66 Accounts Payables 67 40 Elena Management & Services Private Limited Accounts Payables 68 Energie Shine Engineering Solution Private Limited Accounts Payables 69 Er Infra Innovative Private Limited Accounts Payables 70 Escalador Geo-Systems And Accounts Payables crore Relationship Nature of Transaction ΝΑ - [1] ΝΑ Limited 38 Bindra Evolutiion Enterprises Private Limited 39 Blueman Construction Projects Private Limited 40 Brahmaputra Engitech Private Limited 41 Bramhands Infrastructure Private Limited 42 Brightom Hospitality & Events Private Limited 43 Brjs Contractors Private Limited 44 Bulsar Construction And Consulting Opc Private Limited 45 Calorifique Renewable Energie India Private Limited 46 Care Infra Engineers Limited 47 Chandrawati Power Construction Accounts Payables Accounts Payables Accounts Payables Accounts Payables Accounts Payables Accounts Payables Accounts Payables Accounts Payables Accounts Payables Accounts Payables Accounts Payables Accounts Payables Bennett Coleman And Company Accounts Payables 37 36 RGK Infracon Private Limited Relationship Balance Balance S. No. Name of the Struck off Company Nature of Transaction with the struck off company outstanding as at March 31, 2024 outstanding as at March 31, 2023 28 Ashok Balyan Infra Project Private Limited Accounts Payables ΝΑ [1] [1] 29 AT & LS Private Limited. 30 Atlantic Works Private Limited 31 Aura Metlab Private Limited 32 Auskini Infraqp Private Limited 33 Avn Green Technologies Private Limited 34 Ayurda Millennium Ventures Private Limited 35 BK Equipments Private Limited Baba Balaknathji Entertainment Private Limited - [1] Accounts Payables Accounts Payables 3333 3333 33 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 NA NA ΝΑ NA 0.02 ☐ [1] -[1] 0.12 ΝΑ - [1] ΝΑ 0.02 [1] - [1] 0.12 - [1] 0.04 0.04 NA ΝΑ [1] - [1] - [1] NA 0.02 ΝΑ - [1] - [1] ΝΑ Accounts Payables Accounts Payables Accounts Payables Accounts Payables Accounts Payables Accounts Payables Private Limited 48 Cheyuta Infrasturcture Private Limited Accounts Payables 49 Cmi Limited Accounts Payables 51 STU 50 Creo Projects Private Limited Accounts Payables ΝΑ Csk Engineering And Construction Accounts Payables NA Private Limited 53 2345 52 Csp Constructions Private Limited D.B. Constructions Private Limited Accounts Payables Accounts Payables NA ΝΑ 54 55 Ddsabi Global Services Private Limited Deepak Singh Chouhan Construction ΝΑ Accounts Payables [1] ΝΑ Dv Procon Private Limited Accounts Payables 64 Dwarkesh Buildcom Private Limited 65 Dynastyraj Infrastructure Private Limited Accounts Payables Accounts Payables Edgecon Engineering Projects Private Limited 3 3 3 3 3 3333 3 ΝΑ - [1] - [1] ΝΑ - [1] ΝΑ - [1] _ [1] -[1] ΝΑ 0.06 NA - [1] 0.06 - [1] ΝΑ 0.13 0.13 ΝΑ - [1] [1] NA 63 0.01 Accounts Payables Accounts Payables crore (b) Balances with Struck off Companies [1] Subsidiary classification is in accordance with the Companies Act, 2013 L&T Special Steels and Heavy Forgings Private Limited (LTSSHF), a subsidiary [1], has not repaid the loan and net interest thereon aggregating to 2071.53 crore to the Company due to insufficient funds. LTSSHF is in discussion with its promoters viz. the Company and Nuclear Power Corporation of India Limited, for exploring options to restructure its balance sheet. (ii) (i) During the year, the Company renewed both shareholder & bridge loans of 303.50 crore to L&T Sapura Shipping Private Limited (LTSSPL), a subsidiary [1] due to delay in generation of sufficient cash from operations. However, LTSSPL subsequently fully repaid the bridge loan of 126.56 crore with a delay. (a) Notes with respect to remarks in CARO Report: NOTE [63] Notes forming part of the Standalone Financial Statements (contd.) Statements Reports Report Financial Statutory Integrated Management Discussion and Analysis Corporate Overview with the struck off company Balance outstanding as at March 31, 2024 Balance outstanding as at March 31, 2023 61 65 60 Dipl Construction Private Limited Accounts Payables ΝΑ 0.10 0.10 Divaah Adya Facility Solutions (P) Limited S. No. Name of the Struck off Company 0.01 0.01 Accounts Payables Services Private Limited 84 30% 83 Gnxt Energy Private Limited Gogreen Facility Management Private Limited 86 98 88 888 87 Ham Constructions & Engineering Works Private Limited 89 Harhar Mahadev Infra Developer Private Limited 00 90 OPC 85 Goldentree Facility Management Private Limited Gulba Topographical Surveyors Private Limited H M Brothers Limited Honeyed Engineering Private Limited Accounts Payables Accounts Payables Accounts Payables Accounts Payables Accounts Payables Accounts Payables Global Engineering & Marketing NA 82 Genius Security Services Private Limited 0.01 NA - [1] [1] Engineering Survey Private Limited 12371 71 72 Essa Infrabuild Private Limited Expeditive Infotech Private Limited Accounts Payables Accounts Payables 73 Fairmans Construction Private Limited Accounts Payables 74 Faithful Creator Infra Private Limited Accounts Payables 75 Farhad Interior And Exterior Private Limited Accounts Payables 76 77 78 79 80 Filtm Online Services Private Limited Friends Civil Works Private Limited Fundamental Infratech Private Limited G-5 Construction Private Limited Genesis Infosolutions Private Limited Accounts Payables Accounts Payables Accounts Payables Accounts Payables Accounts Payables 81 Accounts Payables [1] Nature of Transaction 1 Alpana Buildtech Private Limited 20 Limited Accounts Payables Accounts Payables Accounts Payables Alias Management Marketing Private 19 Alert Infraprojects Private Limited 18 Alakshya Infracon Private Limited 17 Accounts Payables Accounts Payables Akonn Infra Tech (India) Private Limited Akashdeep Infratech Private Limited 56 16 15 Accounts Payables Aghasthya Infratech Mangalore Private Accounts Payables 14 Limited 13 Private Limited 0.03 [1] - [1] ΝΑ -[1] - [1] ΝΑ 21 - [1] Alufascia Private Limited Amaravati Rcc Pipes India Private 0.01 0.03 0.03 0.01 NA [1] [1] 0.04 NA ΝΑ 3 3 3 3 3 333 333 } } } } Artisans Design & Build Private Limited Accounts Payables 27 Accounts Payables Arj Infra Private Limited 26 225 Accounts Payables Antilia Facility Management Private Limited 25 Accounts Payables Angelina Infratech Private Limited 24 Accounts Payables Accounts Payables Accounts Payables Accounts Payables Amritlaxmi Properties Private Limited 321 23 Limited 22 Relationship with the struck off company - [1] [1] Limited 0.15 0.15 ΝΑ Accounts Payables Aayansh Securities Systems Private 5 0.02 0.02 NA Accounts Payables Aarib Constructions Private Limited 0.02 0.02 ΝΑ Accounts Payables Aahsin India Private Limited 34 [1] - [1] ΝΑ Accounts Payables 0.02 Balance outstanding as at March 31, 2023 Balance outstanding as at March 31, 2024 0.02 NA Accounts Payables A K Infrasolutins Private Limited Aadhiraj Projects Private Limited 2 6 NA Abhiraksha Constructions Private Limited - [1] NA NA - [1] - [1] ΝΑ 0.03 0.03 ΝΑ 3 3 3 3 3 3 3 Accounts Payables Aeroglobal Infrastructure Engineers 12 Accounts Payables Advance Mep Solutions Private Limited 11 Accounts Payables Adm Infracon India Private Limited 10 Accounts Payables Active Brain Infra Engg Private Limited 9 Accounts Payables Acrp Infracon Private Limited 8 Limited Accounts Payables Ace Offshore And Engineering Private 7 Accounts Payables 173 Accounts Payables Accounts Payables Reports Statements Notes forming part of the Standalone Financial Statements (contd.) NOTE [63] (b) Balances with Struck off Companies (contd.) crore S. No. Name of the Struck off Company Nature of Transaction Relationship with the struck off company 253 254 White Vibes Private Limited Wipo Teleservices Private Limited Accounts Payables NA Balance outstanding as at March 31, 2024 0.19 Balance outstanding as at March 31, 2023 0.19 Accounts Payables 255 Yashas Frp Manufacturing Private Limited Report Financial Statutory Integrated } } } } } } NA - [1] - [1] ΝΑ - [1] - [1] NA - [1] _ [1] Accounts Payables ΝΑ 0.02 ΝΑ Riccardo Readymixs And Infra Projects 0.17 ΝΑ - [1] [1] Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis 0.02 금금 ΝΑ 0.03 ΝΑ 3333 3 ΝΑ - [1] - [1] ΝΑ 0.02 0.02 ΝΑ 0.03 Accounts Payables 0.03 - [1] - [1] - [1] Private Limited Total Payables (A) 14.17 15.18 1 NCR Aggregate Solutions Private Limited Advance given to - [1] Accounts Payables Zippy Facility Management & Services ΝΑ 0.03 ΝΑ 0.05 0.05 256 Ye Power Transmission Private Limited Accounts Payables NA - [1] - [1] 261 257 Accounts Payables 258 Zaaharveer Projects Private Limited Accounts Payables 259 Zafcon Engineering Private Limited Accounts Payables 260 Zain Thermal Solutions Private Limited Accounts Payables Z Rose Constructions & Interiors Private Limited Walls Infra Solution Private Limited 252 Private Limited 0.15 ΝΑ - [1] - [1] NA [1] [1] ΝΑ 0.02 0.02 0.15 NA - [1] - [1] - [1] NA 0.04 NA - [1] 0.04 - [1] ΝΑ - [1] ΝΑ - [1] ΝΑ Accounts Payables Accounts Payables Accounts Payables ΝΑ 241 Varad Infra Projects (P) Limited Accounts Payables NA 242 Vardhman Trading Co. Private Limited Accounts Payables ΝΑ 3 3 3 3 333333 3 3 3 3 3 3 3 3 3 3 3 3 3 243 Accounts Payables NA 244 Veekay Engineering India Private Limited Accounts Payables ΝΑ 245 Vertex Realtech Infra Private Limited 246 Victory Engineering India Private Vee Gee Yem Engineers India Privite Limited NA NA 0.02 0.50 0.50 ΝΑ 0.10 0.10 Limited 247 Victra Constructions Private Limited Accounts Payables 248 ΝΑ Vishnuvedanga Infra-Tech Private Limited 249 Vishwa Infratech & Projects Private Limited Accounts Payables 250 Vissa Engineering Private Limited Accounts Payables 251 Vk Management Services Accounts Payables Accounts Payables 0.02 - [1] - [1] NA - [1] [1] ΝΑ [1] [1] ΝΑ 0.03 0.03 NA - [1] - [1] [1] ΝΑ 0.13 0.10 0.13 0.10 - [1] [1] - [1] -[1] - [1] [1] 1.79 1.79 Total advances given (B) Nature of Transaction Relationship with the struck off company 1 Upgrade Management Services Private Limited Dividend payable ΝΑ Balance outstanding as at March 31, 2024 _ [1] Balance outstanding as at March 31, 2023 [1] 2 S. No. Name of the Struck off Company Amersey Brothers Private Limited ΝΑ 3 Omni Market Research Services Private Limited Dividend payable NA - [1] - [1] 45 Safna Consultancy Private Limited Dividend payable Dividend payable Fairtrade Securities Limited crore NOTE [63] - [1] ΝΑ - [1] [1] [1] - [1] - [1] _[1] [1] - [1] - [1] (b) Balances with Struck off Companies (contd.) - [1] - [1] [1] - [1] [1] _ [1] [1] 507 LARSEN & TOUBRO Notes forming part of the Standalone Financial Statements Notes forming part of the Standalone Financial Statements (contd.) - [1] [1] 6 7 - [1] [1] [1] [1] 15.98 17.03 [1] Less than 1 Lakhs. (c) i. ii. ΝΑ The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall: B. provide any guarantee, security or the like on behalf of the ultimate beneficiaries. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall: A. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or B. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries. NOTE [64] Figures for the previous year have been regrouped/reclassified to conform to the figures of the current year. 508 Integrated Annual Report 2023-24 62 A. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or Kothari Intergroup Limited [1] ΝΑ Jabac Consultancies Private Limited Dividend payable Dividend payable Dividend payable 88 Alike Trading Private Limited Dividend payable Satvik Financial Services Limited Dividend payable 금금금금금금 ΝΑ NA - [1] - [1] Total dividend payable (E) Grand Total (A+B+C+D+E) NA - [1] - [1] [1] [1] ΝΑ - [1] - [1] [1] Accounts Payables - [1] - [1] Amersey Brothers Private Limited L&T's shareholder Avni Financial Advisors Private Limited L&T's shareholder 7 Demuric Holdings Private Limited Fairtrade Securities Limited L&T's shareholder L&T's shareholder Jabac Consultancies Private Limited L&T's shareholder Components Private Limited NA Omni Market Research Services Private Limited L&T's shareholder 12 123 13 14 11 Safna Consultancy Private Limited Satvik Financial Services Limited Siddha Papers Private Limited Upgrade Management Ser Private Limited L&T's shareholder NA L&T's shareholder 10 ΝΑ L&T's shareholder L&T's shareholder 1 Pranavam Constructions Private Accounts Receivables Limited 2 The Rubber Products Limited Accounts Receivables 345 Profusion Engineering Accounts Receivables Aloke Speciality Machines and Angelina Infratech Private Limited Sai Ashray Infratech Private Limited Accounts Receivables -234 56988 1 Total Receivables (C) Kothari Intergroup Limited Alike Trading Private Limited Alley Fisheries Private Limited L&T's shareholder L&T's shareholder Accounts Receivables NA L&T's shareholder L&T's shareholder 0.02 0.06 NA - [1] [1] NA [1] [1] ΝΑ - [1] 0.01 -[1] - [1] - [1] ΝΑ - [1] - [1] NA - [1] - [1] ΝΑ - [1] NA NA 0.01 0.01 NA 15 16 VMS Consultants Private Limited Yogesh Investment Private Limited Total equity shares held (D) L&T's shareholder NA L&T's shareholder NA 33 3333 333333 3333 33 33 3 1.79 NA 1.79 _ [1] [1] NA - [1] - [1] NA - [1] 0.04 ΝΑ 0.01 ΝΑ Vams Construction Private Limited Vansh Infrasolution Private Limited - [1] 239 ΝΑ - [1] 0.02 ΝΑ 0.02 0.02 ΝΑ - [1] [1] Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Statutory Financial Report Reports Statements Notes forming part of the Standalone Financial Statements (contd.) NOTE [63] (b) Balances with Struck off Companies (contd.) [1] - [1] NA [1] Samrat Fabrication And Construction Private Limited. Accounts Payables 188 Savitri Infrastrcuture Private Limited Accounts Payables 189 Sbh Shoring Systems Private Limited Accounts Payables 33 333Z Z Z Z NA crore NA - [1] ΝΑ [1] 0.04 [1] 0.04 ΝΑ - [1] - [1] NA - [1] - [1] S. No. Name of the Struck off Company Nature of Transaction 190 Shree Kranti Infracon Private Limited Accounts Payables 198 Shreeji Home Infra Private Limited Accounts Payables 199 Shreya Infra Venture Private Limited 200 201 Shri Vedika Engineering Private Limited Sieat Consultancy Private Limited 197 Accounts Payables Accounts Payables 202 Sikar Trading And Contracting Private Limited Accounts Payables 203 Silk Route Infrastructure Private Limited 204 Soul And Mind Concrete System Private Limited Accounts Payables Accounts Payables 205 Accounts Payables 187 Private Limited Shravani Environment Technology Sce Global Steel And Facade Private Limited Accounts Payables Relationship with the struck off company ΝΑ Balance outstanding as at March 31, 2024 _ [1] Balance outstanding as at March 31, 2023 [1] 191 Scotnix Solution Private Limited 192 Set Sanayi Elektrik-Tesisat Taahhut Ve Accounts Payables Accounts Payables Accounts Payables 193 Shahid Engineers & Contractors Private Accounts Payables Limited 194 Sharma Infrabuild Private Limited Accounts Payables 195 Sheoveena Construction Private Accounts Payables Limited 196 Ticaret India Private Limited Accounts Payables Sampada Infratech Private Limited 186 Accounts Payables NA NA 3 3 3 3 3 33 33 3 3 3 3 3 3333Z Z Z ΝΑ - [1] - [1] NA - [1] [1] Accounts Payables NA [1] ΝΑ - [1] - [1] ΝΑ - [1] [1] NA 0.33 0.33 [1] NA Accounts Payables 180 Accounts Payables Accounts Payables Private Limited 174 Rk Build Solutions Private Limited Accounts Payables 175 RK Gautam Construction Private Accounts Payables ΝΑ Limited S K Modern Construction & 176 Accounts Payables 177 Roshan Tradevision Private Limited Accounts Payables ΝΑ 178 Roy Management And Information Technology Private Limited 179 Rpnr Concrete Solutions Private Limited Rockhard Infrastructure Private Limited Sri Abs Lakshn Projects Private Limited 0.01 ΝΑ - [1] - [1] - [1] [1] - [1] NA 0.10 240 Engineering Private Limited 181 - [1] S SD N Infratech Private Limited SV Infraproperties Private Limited 183 Safety And Environment Education For Development Private Limited Accounts Payables Accounts Payables Accounts Payables 184 Sahu Infrastructure Private Limited Accounts Payables 185 Sai Ashray Infratech Private Limited Accounts Payables 182 0.01 [1] ΝΑ NA 0.01 0.01 - [1] [1] NA - [1] - [1] NA 0.01 - [1] 0.01 0.18 0.18 NA - [1] [1] ΝΑ -[1] - [1] - [1] - [1] ΝΑ Accounts Payables 0.10 Star Wire (India) Limited crore S. No. Name of the Struck off Company Nature of Transaction Relationship with the struck Balance Balance off company 221 Telmax Construction Private Limited Accounts Payables 506 NA outstanding as at March 31, 2023 0.02 222 Terra Firma Promoters & Developers Private Limited Accounts Payables NA 0.07 0.07 223 Texsa India Limited outstanding as at March 31, 2024 0.02 Accounts Payables (b) Balances with Struck off Companies (contd.) Notes forming part of the Standalone Financial Statements (contd.) 0.06 NA 0.03 0.03 NA - [1] [1] ΝΑ - [1] [1] NOTE [63] ΝΑ 0.01 NA 0.08 NA - [1] ΝΑ [1] 505 LARSEN & TOUBRO Notes forming part of the Standalone Financial Statements 0.01 NA - [1] [1] Tumbi Office Systems Private Limited 233 Ukr Infra Private Limited 234 Ultra-Tech Concretes Works Private Limited 235 Umansh Infracon Private Limited 236 Unique Fabricators & Erectors Private 232 Accounts Payables Accounts Payables Accounts Payables Limited 237 Utech Infracon Private Limited Accounts Payables 238 Vaigunthaa Infra Private Limited Accounts Payables NA 206 Accounts Payables Accounts Payables Accounts Payables Private Limited Trunk Facility Management Services 231 224 Thakurai Engineering Private Limited Accounts Payables 225 Thought Zone Consulting Private Limited Accounts Payables 226 Threess Innovative Tech India Private Accounts Payables Limited 227 Timely Developers Consultants Private Accounts Payables Limited 228 TMM Industries Private Limited Accounts Payables 229 Torobuild Constructions Opc Private Limited Accounts Payables 230 Triplex Builders Private Limited Accounts Payables 0.06 ΝΑ Dne Infra Private Limited - [1] Swadesh Energy Private Limited Accounts Payables 216 217 218 Swadeshi Buildtrade Private Limited Swift Equipments Private Limited Techcon Chemicals Private Limited Accounts Payables Accounts Payables Accounts Payables 219 215 Techno Power Constructions Private Limited 220 Tej Infrapromoters Private Limited Accounts Payables 3 3333} } } } } } } } 333 33 333333 3 3} } } } ΝΑ NA - [1] [1] 0.02 0.02 Accounts Payables NA Accounts Payables Private Limited - [1] Accounts Payables 207 Stellent Engineering Solutions Private Limited Accounts Payables 208 209 Sublime Contractors Private Limited Sudha Rehabs And Hospitality Private Limited Accounts Payables Accounts Payables Sv Engineering And Contracting Services Private Limited 210 Accounts Payables 211 Sukita Security And Services Private Limited Accounts Payables 212 Sumera Builders & Developers Private Limited Accounts Payables 213 Supreme Housekeeping Services Accounts Payables Suhashini Infra Engineering Private Limited 0.02 214 ΝΑ ΝΑ 0.03 0.10 ΝΑ 0.02 0.03 ΝΑ - [1] - [1] - [1] 0.07 -[1] 0.01 0.01 ΝΑ - [1] - [1] NA - [1] 0.02 NA _ [1] ΝΑ 0.07 ΝΑ 0.05 NA 0.05 0.05 -[1] - [1] NA 0.03 0.03 0.23 0.26 0.03 0.03 - [1] [1] 0.09 0.02 0.04 0.04 0.04 0.04 NA 0.05 ΝΑ • Revenue recognition of fixed price contracts where the percentage of completion is identified as Key Audit Matter since - Principal Audit Procedures Revenue from fixed price contracts including software development and system integration contracts is recognized using a percentage of completion method. Use of the percentage of completion method requires the Company to determine the actual costs expended to date as a proportion of the estimated total costs to be incurred. Costs expended have been used to measure progress towards completion as there is a direct relationship between input and productivity. This required a high degree of auditor judgment in evaluating the audit evidence and a higher extent of audit effort to evaluate the reasonableness of the total estimated amount of revenue and unbilled revenue recognized on these fixed-price contracts. High inherent risk around accuracy of revenue, given the customized and complex nature of these contracts. High inherent uncertainty and requires consideration of progress of the contract, costs incurred to-date and estimates of costs required to complete the remaining contract performance obligations over the term of the contract. At year-end, significant amount of work in progress (Unbilled revenue), related to these contracts is recognised on the balance sheet. description Refer to Note No. [1] (II)(i) and 34 to the Consolidated Financial Statements. The components' auditors (being other firms of chartered accountants) have performed the following audit procedures: • Key audit matter Statements We performed sensitivity analysis of the discount rate to assess the extent of change in discount rate that would be required for the investment to be impaired. We evaluated the reasons for variation between the Management's previous estimate of traffic, revenue and cash flow forecasts and obtained our understanding of the manner in which revised forecasts were obtained; With the assistance of our fair value specialists who have specialised skill and knowledge, we evaluated the reasonableness of the methodology and discount rate by testing the source information underlying the determination of the discount rate and mathematical accuracy of the calculations; and We tested the effectiveness of controls over forecasts of future traffic, revenue, free cash flows and selection of the discount rate; • Our audit procedures related to forecasts of future traffic, revenue, free cash flows generated, selection of the method for estimating recoverable value and discount rate for the entity: Principal Audit Procedures Impairment on Assets - Metro Rail Cash Generating Unit Reports Report Statutory Tested the effectiveness of controls relating to: Financial Revenue recognition - Fixed price contracts using the percentage of completion method in respect of IT Segment - LTIMindtree Limited ("the Company") i. recording of costs incurred and estimation of efforts or costs required to complete the remaining contract performance obligations; and Involved Information technology ('IT') specialists to assess the design and operating effectiveness of the key IT controls relating to revenue recognition and in particular; access and application controls pertaining to time recording, allocation and budgeting systems which prevents unauthorized changes to recording of efforts incurred. iii. Assessed the appropriateness of actual cost incurred on contracts including the testing of the IT general controls and specific IT application controls over information systems used for capturing these costs; and Integrated Tested the IT controls over appropriateness of cost and revenue reports generated by the system; Assessed the IT environment in which the business systems operate and tested system controls over computation of revenue recognised; ii. i. Obtained an understanding of the systems, processes and controls implemented by the Company with respect to recognition of actual cost incurred on each contract, estimation of future cost to completion, measurement of unbilled revenue, unearned revenue and the total contract revenue on its completion; The component's auditors (being other firms of chartered accountants) have performed the following audit procedures: Refer to Note [1] (II)(i) and 34 to the Consolidated Financial Statements. at the period end a significant amount of contract assets (unbilled revenue) or contract liabilities (unearned revenue) related to each contract is to be identified. these contracts require estimation of future cost for completion of each contract; and these contracts involve identification of actual cost incurred on each contract; • Amount of revenue recognition in respect of fixed price contracts has been identified as a Key Audit Matter considering that: This involves computation of actual cost incurred and estimation of total cost on each contract to measure progress towards completion. The Company engages in fixed price contracts with its customers wherein revenue from such contracts are recognized over time. The Company uses input method to recognise revenue, as it represents efforts expended towards satisfying a performance obligation relative to the total expected efforts or inputs to satisfy the performance obligation. Principal Audit Procedures Key audit matter description Revenue recognition- Fixed price contracts in respect of technology services segment - L&T Technology Services Limited ("the Company") Auditor's Report on Consolidated Financial Statements LARSEN & TOUBRO 513 Tested the estimate for consistency with the status of delivery of milestones and customer acceptances and sign off from customers to identify possible delays in achieving milestones, which require changes in estimated costs or efforts to complete the remaining performance obligations. iii. ii. Compared costs incurred with Company's estimate of efforts or costs incurred to date to identify significant variations and evaluate whether those variations have been considered appropriately in estimating the remaining costs or efforts to complete the contract. i. Read the contract and based on the terms and conditions evaluated whether recognizing revenue over time using percentage of completion method was appropriate, and the contract was included in Management's calculation of revenue over time; Selected a sample of fixed price contracts with customers measured using the percentage-of-completion method and performed the following: ii. Management Discussion and Analysis Financial Integrated Annual Report 2023-24 Significant judgements are involved in determining the expected losses, when such losses become probable based on the expected total contract cost. Cost contingencies are included in these estimates to take into account specific risks of uncertainties or disputed claims against the Group, arising within each contract. These contingencies are reviewed by the Management on a regular basis throughout the life of the contract and adjusted where appropriate. The revenue on contracts may also include variable consideration (variations and claims). Variable consideration is recognised when the recovery of such consideration is highly probable. There are significant accounting judgements in estimating revenue to be recognised on contracts with customers, including estimation of costs to complete. The Group recognizes revenue on the basis of stage of completion in proportion of the contract costs incurred at balance sheet date, relative to the total estimated costs of the contract at completion. The recognition of revenue is therefore dependent on estimates in relation to total estimated costs of each such contract. Principal Audit Procedures Revenue recognition – accounting for construction contracts Key audit matter description Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Consolidated Financial Statements of the current financial year. These matters were addressed in the context of our audit of the Consolidated Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report. Key Audit Matters We are independent of the Group, its associates and joint ventures in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India ("ICAI") together with the ethical requirements that are relevant to our audit of the Consolidated Financial Statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAl's Code of Ethics. We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in the sub-paragraphs (a) and (b) of the Other Matters section below, is sufficient and appropriate to provide a basis for our audit opinion on the Consolidated Financial Statements. We conducted our audit of the Consolidated Financial Statements in accordance with the Standards on Auditing ("SAS") specified under section 143 (10) of the Act. Our responsibilities under those Standards are further described in the Auditor's Responsibility for the Audit of the Consolidated Financial Statements section of our report. Basis for Opinion In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of reports of the other auditors on separate financial statements of the joint operations, subsidiaries, associates and joint ventures referred to in the Other Matters section below, the aforesaid Consolidated Financial Statements give the information required by the Companies Act, 2013 (the "Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act and other accounting principles generally accepted in India, of the consolidated state of affairs of the Group as at March 31, 2024, and their consolidated profit, their consolidated total comprehensive income, their consolidated cash flows and their consolidated changes in equity for the year ended on that date. We have audited the accompanying Consolidated Financial Statements of Larsen & Toubro Limited (the "Parent") and its subsidiaries, (the Parent and its subsidiaries together referred to as the "Group") which includes 35 joint operations of the Group accounted on proportionate basis and the Group's share of loss in its associates and joint ventures, which comprise the Consolidated Balance Sheet as at March 31, 2024, and the Consolidated Statement of Profit and Loss (including Other Comprehensive Income), the Consolidated Statement of Cash Flows and the Consolidated Statement of Changes in Equity for the year ended on that date, and notes to the financial statements, including a summary of material accounting policies and other explanatory information. Report on the Audit of the Consolidated Financial Statements Opinion TO THE MEMBERS OF LARSEN & TOUBRO LIMITED INDEPENDENT AUDITOR'S REPORT Statements Reports iv. Tested the controls pertaining to allocation of resources and budgeting systems which prevent the unauthorized recording/changes to costs incurred on sample basis. Statutory Integrated Report Management Discussion and Analysis Corporate Overview Consolidated Financial Statements Regd. Office: Larsen & Toubro Limited, L&T House, N. M. Marg, Ballard Estate, Mumbai - 400 001. CIN: L99999MH1946PLC004768 www.Larsentoubro.com The best roads can lead you to some of the most important destinations in life. So, whether you're commuting or traveling, the transport infrastructure we build, help you reach your loved ones during the times that really matter. Afterall, when you smile, we know it's a job well done. WE LOVE CONNECTING YOUR SMILES. LARSEN & TOUBRO Refer to Note No. [1] (II)(i) and 34 to the Consolidated Financial Statements Corporate Overview Our audit procedures related to the (1) identification of distinct performance obligations, (2) evaluation of the process for estimation of costs to complete (3) evaluation of implications of change orders on costs estimates of costs to complete and revenue and (4) evaluation of any variable consideration included the following, amongst others: 511 512 Refer to Note [1] (II)(o), 2 and 5 to the Consolidated Financial Statements assessment. The Group is carrying Intangible asset, Property Plant & Equipment and Investment property relating to Metro Rail CGU (comprising of Hyderabad Metro operations). During the year, as the indication exists, the Group has reassessed its impairment assessment with respect to the above CGU. Impairment of assets is a key audit matter considering the significance of the carrying value, estimations and the significant judgement involved in impairment As per the requirements of Ind AS 36, the Group assesses at the end of every reporting period, whether there is any indication that cash generating unit (CGU) may be impaired. If any such indication exists, the Group estimates the recoverable amount of the CGU. The determination of recoverable amount being value-in-use involves significant estimates, assumptions and judgements of the long-term financial projections. Key audit matter description Impairment on Assets - Metro Rail Cash Generating Unit In respect of the sample contracts, we compared previous estimates relating to recoverability of contract assets and compared it with actual collections during the year. We selected a sample of contracts assets with corresponding trade receivables that were overdue and evaluated the basis for Management's conclusions regarding the (1) evidence supporting the execution of work for which the contract assets were recognised; (2) reasons for the delays in recovery of invoices and the basis on which recoverability of the contract assets was assessed; (3) impact on the allowance for expected credit losses; and (4) adjusting events after the reporting date i.e. March 31, 2024 and the date when the financial statements are approved by the Board of Directors and the impact thereof on the carrying amount of the related contract assets. We tested the effectiveness of controls relating to the (a) gathering and evaluation of evidence supporting the execution of work; (b) evaluation of recoverability of the overdue amounts including the impact on the expected credit loss allowance; and (c) assessment of adjusting events after the reporting date i.e. March 31, 2024 and the date when the financial statements are approved by the Board of Directors and the impact thereof on the carrying amount of the related contract assets. Measurement of contract assets in respect of overdue milestones and receivables in respect of overdue invoices. Our audit procedures related to the (1) evaluation of evidence supporting the execution of work; (2) evaluation of recoverability of the overdue amounts including the impact on the expected credit loss allowance; and (3) assessment of adjusting events after the reporting date i.e. March 31, 2024 and the date when the financial statements are approved by the Parent's Board of Directors included the following amongst others: Refer to Note No. [1](II)(i), [1] (II) (r), 13 and 19 to the Consolidated Financial Statements. Principal Audit Procedures Measurement of contract assets in respect of overdue milestones and receivables in respect of overdue invoices Key audit matter The Group, in its contract with customers, promises to transfer distinct services to its customers, which may be rendered in the form of engineering, procurement, and construction ("EPC") services through design-build contracts, and other forms of construction contracts. The recognition of revenue is based on contractual terms, which could be based on agreed unit price or lump-sum revenue arrangements. At each reporting date, revenue is accrued for costs incurred against work performed that may not have been invoiced. Identifying whether the Group's performance has resulted in a service that would be billable and collectable where the works carried out have not been acknowledged by customers as of the reporting date, or in the case of certain defence contracts, where the evidence of work carried out and cost incurred are covered by confidentiality arrangements, involves a significant amount of judgement. Assessing the recoverability of contract assets related to overdue milestones and amounts overdue against invoices raised which have remained unsettled for a significantly long period after the end of the contractual credit period also involves a significant amount of judgment. Tested the estimate for consistency with the status of delivery of milestones and customer acceptance to identify possible delays in achieving milestones, which require changes in estimated costs or efforts to complete the remaining performance obligation. Compared costs incurred with Group's estimates of costs incurred to date to identify significant variations and evaluated whether those variations have been considered appropriately in estimating the remaining costs to complete the contract; and Identified significant terms and deliverables in the contract to assess Management's conclusions regarding the (i) identification of distinct performance obligations; (ii) changes to costs to complete as work progresses and as a consequence of change orders; (iii) the impact of change orders on the transaction price; and (iv) the evaluation of the adjustment to the transaction price on account of variable consideration; Obtained and read contract documents for each selection, change orders, and other documents that were part of the agreement; iv. iii. ii. i. We selected a sample of contracts with customers and performed the following procedures: description Revenue recognition - accounting for construction contracts Auditor's Report on Consolidated Financial Statements LARSEN & TOUBRO We tested the effectiveness of controls relating to the (a) evaluation of performance obligations and identification of those that are distinct; (b) estimation of costs to complete each of the performance obligations including the contingencies in respect thereof, as work progresses and the impact thereon as a consequence of change orders; (c) the impact of change orders on the transaction price of the related contracts; and (d) evaluation of the impact of variable consideration on the transaction price. Verified on test check basis that the revenue recognized is in accordance with the applicable Indian Accounting Standard, including: ii. ii. Information Other than the Financial Statements and Auditor's Report Thereon Tested the design and operating effectiveness of certain automated controls that were considered as key internal controls over the financial reporting system. Tested design and operating effectiveness of key controls over user access Management (including user access provisioning, de-provisioning, user access review, password configuration review and privilege access), change Management (including compliance of change release in production environment to the defined procedures), program development (including review of data migration activity), computer operations (including testing of key controls pertaining to, backup, batch processing, incident Management and data centre security. Also tested entity level controls pertaining to IT policy and procedure and business continuity plan assessment; and Obtained an understanding of IT applications landscape implemented by the Company, including an understanding of the process, mapping of applications and understanding financial risks posed by people-process and technology; iii. ii. i. Information Technology ("IT") Systems and Controls in respect of Financial Services segment - L&T Finance Limited ("the Company") On such "In-scope IT systems" performed the following procedures: Statements Reports Report Financial The Parent's Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Board's Report including Annexures to Board's Report, Business Responsibility and Sustainability Report, Corporate Governance and Shareholder's Information, but does not include the Consolidated Financial Statements, standalone financial statements and our auditor's report thereon. Statutory Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 516 With respect to the "In-scope IT systems" identified as relevant to the audit of the financial statements and financial reporting process of the Company, evaluated and tested relevant IT general controls; Involved IT specialists as part of the audit for the purpose of testing the IT general controls and application controls (automated and semi-automated controls) to determine the accuracy of the information produced by the Company's IT systems; The component's auditors (being other firms of chartered accountants) have performed the following audit procedures: Component auditor identified 'IT systems and controls' as a key audit matter because of the high-level automation, significant number of systems being used by the Management and the complexity of the IT architecture and its impact on the financial reporting system. Appropriate IT general controls and application controls are required to ensure that such IT systems are able to process the data, as required, completely, accurately and consistently for reliable financial reporting. Principal Audit Procedures Information Technology ("IT") Systems and Controls in respect of Financial Services segment - L&T Finance Limited ("the Company") Key audit matter The Company has a complex IT architecture to support its day-to-day business operations. High volume of description transactions are processed and recorded on single or multiple applications. The reliability and security of IT systems plays a key role in the business operations of the Company. Since large volume of transactions are processed daily, IT controls are required to ensure that applications process data as expected and that changes are made in an appropriate manner. Obtained written representations from management and those charged with governance on whether they believe significant assumptions used in calculation of expected credit losses are reasonable. Integrated Our opinion on the Consolidated Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the Consolidated Financial Statements, our responsibility is to read the other information, compare with the financial statements of the joint operations, subsidiaries, joint ventures and associates audited by the other auditors, to the extent it relates to these entities and, in doing so, place reliance on the work of the other auditors and consider whether the other information is materially inconsistent with the Consolidated Financial Statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated. Other information so far as it relates to the joint operations, subsidiaries, joint ventures and associates, is traced from their financial statements audited by the other auditors. If based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. ☑ Integrated Annual Report 2023-24 518 We did not audit the financial information of 63 subsidiaries, whose financial information reflects total assets of 1,74,770.36 crore as at March 31, 2024, total revenues of 66,961.37 crore and net cash flows amounting to 4,600.27 crore for the year ended March 31, 2024, as considered in the Consolidated Financial Statements. The Consolidated Financial Statements also include the Group's share of total net loss after tax of 28.76 crore for the year ended March 31, 2024 and total comprehensive loss (net) of 24.07 crore for We did not audit the financial information of 32 joint operations included in the standalone financial statements of the entities included in the Group, whose financial information reflects total assets of 3,579.32 crore as at March 31, 2024, total revenues of ₹ 4,469.64 crore and net cash flows amounting to (471.70) crore for the year ended March 31, 2024, as considered in the respective standalone financial statements of the entities included in the Group. The financial information of these joint operations has been audited by other auditors whose reports have been furnished to us by the Parent's management, and our opinion in so far as it relates to the amounts and disclosures included in respect of these joint operations and our report in terms of subsection (3) of Section 143 of the Act, in so far as it relates to the aforesaid joint operations, is based solely on the report of such other auditors. • Other Matters From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Consolidated Financial Statements of the current financial year and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. We communicate with those charged with governance of the Parent and such other entities included in the Consolidated Financial Statements of which we are the independent auditors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal financial controls that we identify during our audit. Materiality is the magnitude of misstatements in the Consolidated Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Consolidated Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Consolidated Financial Statements. Conclude on the appropriateness of Management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Group and its associates and joint ventures to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the Consolidated Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group and its associates and joint ventures to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the Consolidated Financial Statements, including the disclosures, and whether the Consolidated Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group and its associates and joint ventures to express an opinion on the Consolidated Financial Statements. We are responsible for the direction, supervision and performance of the audit of the financial statements of such entities or business activities included in the Consolidated Financial Statements of which we are the independent auditors. For the other entities included in the Consolidated Financial Statements, which have been audited by the other auditors, such other auditors remain responsible for the direction, supervision and performance of the audits carried out by them. We remain solely responsible for our audit opinion. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management. Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Parent has adequate internal financial controls with reference to Consolidated Financial Statements in place and the operating effectiveness of such controls. Identify and assess the risks of material misstatement of the Consolidated Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • • • As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: LARSEN & TOUBRO 517 Our objectives are to obtain reasonable assurance about whether the Consolidated Financial Statements as a whole are free from material misstatement, whether due to fraud or error and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Consolidated Financial Statements. Auditor's Responsibility for the Audit of the Consolidated Financial Statements In preparing the Consolidated Financial Statements, the respective Management and Board of Directors of the companies included in the Group and of its associates and joint ventures are responsible for assessing the ability of the respective entities to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the respective Boards of Directors either intends to liquidate their respective entities or to cease operations, or has no realistic alternative but to do so. The respective Boards of Directors of the companies included in the Group and of its associates and joint ventures are also responsible for overseeing the financial reporting process of the Group and of its associates and joint ventures. The respective Boards of Directors of the companies included in the Group and of its associates and joint ventures are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group and its associates and its joint ventures and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the Consolidated Financial Statements by the Directors of the Parent, as aforesaid. The Parent's Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Consolidated Financial Statements that give a true and fair view of the consolidated financial position, consolidated financial performance including other comprehensive income, consolidated cash flows and consolidated changes in equity of the Group including its associates and joint ventures in accordance with the accounting principles generally accepted in India, including Ind AS specified under section 133 of the Act. Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements Verified the manner of preparation of information w.r.t. to provisions and disclosures in the Financial Statements. i. Assessed whether the disclosures on key judgements, assumptions and quantitative data with respect to impairment of loans (including restructuring related disclosures) in the Financial Statements are appropriate and sufficient. evaluated the reasonableness of applicable assumptions included in LGD computation. Key audit matter description Allowance for Expected Credit Loss on Retail Loan Assets in respect of Financial Services segment - L&T Finance Limited ("the Company") Assessed the adequacy and appropriateness of disclosures made in the financial statements in compliance with applicable Indian Accounting Standards and applicable financial reporting framework. Assessed the appropriateness of work in progress (contract assets and contract liabilities) as at the balance sheet date by evaluating the underlying documentation to identify possible delays in achieving milestones which require changes in estimated costs to complete the remaining performance obligations; and d) Revenue recognition- Fixed price contracts in respect of technology services segment - L&T Technology Services Limited ("the Company") Statements Reports Report Financial Statutory Integrated Principal Audit Procedures Management Discussion and Analysis Integrated Annual Report 2023-24 514 Recomputed the amount of revenue recognised on these contracts and compared the same with the actual revenue recorded; Verified the reasonableness of Management's estimation of cost projections by comparing actual cost incurred with Management initial/updated estimation of total cost for that project; Verified Management's process relating to the estimation of contract costs required to complete the respective projects and assessed that the estimates of costs to complete were reviewed and approved by appropriate designated Management personnel and are appropriate; b) a) Verification of the Company's computation of revenue to be recognized over a period of time on a sample basis, where the component's auditors have performed the following; Inspection of the underlying agreements and other forms of supporting documentation to ensure that various performance obligations within a contract have been properly identified by Management; Inspection of the underlying agreements and other forms of supporting documentation to ensure that transaction price has been properly determined and allocated to relevant performance obligations on an appropriate basis; and Verification of the underlying agreements and other forms of supporting documentation to ensure that each party's rights and obligations regarding the goods or services to be transferred and payment terms are identified and contracts have commercial substance; iv. iii. Corporate Overview Significant judgement is used in classifying these loan assets and applying appropriate measurement principles. ECL on such loans carried at amortised cost is a critical estimate involving greater level of management judgement. As part of their risk assessment, the component auditors (being other firm of Chartered Accountants) determined that the ECL on such loan assets has a high degree of estimation uncertainty, with a potential range of reasonable outcomes for the standalone financial statements. The significant assumptions that they focused in their audit included those with greater levels of management judgement and for which variations had the most significant impact on ECL. The key areas where they identified greater levels of management judgement and therefore increased levels of audit focus in the Company's estimation of ECLs are: Each borrower is classified into Stage 1, 2, 3 based on the objective criteria of Day Past Due (DPD) status as of the reporting date and other loss indicators, as applicable. Such classification by borrower is done across all facilities provided to the borrower, i.e., maximum of the DPDs from among the different facilities ["Max DPD"] provided to that borrower. Inherently, significant judgment is involved in the use of models to estimate ECL which includes determining Exposures at Default ("EAD"), Probabilities of Default ("PD") and Loss Given Default ("LGD"). The PD and the LGD are the key drivers of estimation complexity and as a result are considered the most significant judgments in the Company's modelling approach. tested the factual accuracy of information such as period of default and other related information used in estimating the PD. vi. V. tested appropriateness of staging of borrowers based on DPD and other loss indicators. iv. performed test of details over model calculations testing through re-performance, where possible. checked the appropriateness of information used in the estimation of the Probability of Default ("PD") and Loss given Default ("LGD") for the different stages depending on the nature of the portfolio reconciled the total retail considered for ECL assessment with the books of accounts to ensure the completeness. verified the completeness and accuracy of the Exposure at Default ("EAD") and the classification thereof into stages consistent with the definitions applied in accordance with the policy approved by the Board of Directors. iii. i. Tested controls placed over key inputs, data and assumptions impacting ECL calculations to assess the completeness, accuracy and relevance of data and reasonableness of economic forecasts, weights, and model assumptions applied as detailed below: Involved Information system resource to obtain comfort over data integrity and process of report generation through interface of various information systems. Reviewed the critical assumptions and input data used in the estimation of expected credit loss for specific key credit risk parameters, such as the movement between stages, Exposure at default, (EAD), probability of default (PD) or loss given default (LGD). Testing key controls relating to selection and implementation of material macro-economic variables and the controls over the scenario selection and application of probability weights and computation of probability of default and loss given default percentages. Allowance for Expected Credit Loss on Retail Loan Assets in respect of Financial Services segment - L&T Finance Limited ("the Company") Auditor's Report on Consolidated Financial Statements LARSEN & TOUBRO 515 Evaluated the appropriateness of the Company's determination of Significant Increase in Credit Risk ("SICR") in accordance with the applicable accounting standard and the basis for classification of various exposures into various stages. Assessing the design, implementation and operating effectiveness of key internal financial controls including monitoring process of overdue loans (including those which became overdue after the reporting date), measurement of provision, stage-wise classification of loans, identification of NPA accounts, assessing the reliability of management information. Obtained an understanding of the modelling techniques adopted by the Company including the key inputs and assumptions. Reviewed the Board Approved Policy and procedures & associates design/controls and expected credit loss memo concerning the assessment of credit and other risks. • The component's auditors (being other firm of chartered accountants) have performed the following audit procedures: Refer to Note [1] (II) (r)(i)(D) to the Consolidated Financial Statements. Accordingly, the Allowance for Expected Credit Loss on Retail Loan Assets has been determined as Key Audit Matter because it requires a high degree of judgement and estimation uncertainty, with a potential range of reasonable outcomes for the financial statements. The modelling methodologies used to estimate ECL are developed using historical experience. The impact of the prevailing macroeconomic conditions has also resulted in certain limitations in the reliability of these methodologies to forecast the extent and timing of future customer defaults or potential credit risks and therefore in estimates of ECL. In addition, modelling methodologies do not necessarily incorporate all factors that are relevant to estimating ECL, such as differentiating the impact on industry sectors and economic conditions. These limitations are attempted to be addressed with management overlay, the measurement of which is inherently judgemental and subject to a high level of estimation uncertainty. vii. evaluated the methodology used to determine macroeconomic overlays and adjustments to the output of the ECL model. Auditor's Report on Consolidated Financial Statements Find us on: in Items that will be reclassified to profit or loss: Financial Report Reports Statements Opinion In our opinion to the best of our information and according to the explanations given to us and based on the consideration of the reports of the other auditors referred to in the Other Matters paragraph below, the Parent, its subsidiary companies, its joint operation, its associate companies and joint ventures, which are companies incorporated in India, have, in all material respects, an adequate internal financial controls system with reference to Consolidated Financial Statements and such internal financial controls with reference to Consolidated Financial Statements were operating effectively as at March 31, 2024, based on the criteria for internal financial controls with reference to Consolidated Financial Statements established by the respective companies considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. Other Matters Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls with reference to Consolidated Financial Statements in so far as it relates to 36 subsidiary companies, 1 joint operation company, 8 joint ventures and 2 associates, which are companies incorporated in India, is based solely on the corresponding reports of the auditors of such companies incorporated in India. Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls with reference to Consolidated Financial Statements in so far as it relates to 2 subsidiary companies and 1 associate company, which are companies incorporated in India, whose financial information is unaudited and whose efficacy of internal financial controls with reference to Consolidated Financial Statements is based solely on the Management's certification provided to us and our opinion on the adequacy and operating effectiveness of the internal financial controls with reference to Consolidated Financial Statements of the Group is not affected as the financial information of such entities is not material to the Group. Our opinion is not modified in respect of the above matters. For DELOITTE HASKINS & SELLS LLP Chartered Accountants (Firm's Registration No. 117366W/W-100018) Rupen K. Bhatt (Partner) (Membership No. 046930) UDIN: 24046930BKEZVQ4819 Place: Mumbai crore Goodwill Investment property Capital work-in-progress Property, plant and equipment Non-current assets Statutory ASSETS: Balance Sheet Consolidated Consolidated Balance Sheet as at March 31, 2024 LARSEN & TOUBRO 523 Date: May 08, 2024 Particulars Note Integrated Corporate Overview (Membership No. 046930) UDIN: 24046930BKEZVQ4819 Place: Mumbai Date: May 08, 2024 Nature of relationship Clause number of the CARO report which is qualified or adverse* Parent Subsidiary Subsidary Joint Venture Clause-iii (c), iii (e) Clause-iii (c) and ix (a) Clause iii (c) Clause ix (a) and xix 521 LARSEN & TOUBRO Auditor's Report on Consolidated Financial Statements Integrated Annual Report 2023-24 522 Because of the inherent limitations of internal financial controls with reference to Consolidated Financial Statements, including the possibility of collusion or improper Management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to Consolidated Financial Statements to future periods are subject to the risk that the internal financial control with reference to Consolidated Financial Statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Inherent Limitations of Internal Financial Controls with reference to Consolidated Financial Statements A company's internal financial control with reference to Consolidated Financial Statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control with reference to Consolidated Financial Statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of Management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Meaning of Internal Financial Controls with reference to Consolidated Financial Statements Management Discussion and Analysis We believe that the audit evidence we have obtained and the audit evidence obtained by other auditors of the subsidiary companies, joint operation, associate companies and joint ventures, which are companies incorporated in India, in terms of their reports referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls with reference to Consolidated Financial Statements of the Parent, its subsidiary companies, its joint operation, its associate companies and its joint ventures, which are companies incorporated in India. Our responsibility is to express an opinion on the internal financial controls with reference to Consolidated Financial Statements of the Parent, its subsidiary companies, its associate companies and its joint ventures, which are companies incorporated in India, based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the Institute of Chartered Accountants of India and the Standards on Auditing ("SA"), prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls with reference to Consolidated Financial Statements. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to Consolidated Financial Statements was established and maintained and if such controls operated effectively in all material respects. Auditor's Responsibility The respective Board of Directors of the Parent, its subsidiary companies, associate companies and joint ventures, which are companies incorporated in India, are responsible for establishing and maintaining internal financial controls with reference to Consolidated Financial Statements based on the internal control with reference to Consolidated Financial Statements criteria established by the respective Companies considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India ("ICAI"). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the respective company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013. Management's Responsibility for Internal Financial Controls In conjunction with our audit of the Consolidated Financial Statements of the Group as of and for the year ended March 31, 2024, we I have audited the internal financial controls with reference to Consolidated Financial Statements of LARSEN & TOUBRO LIMITED (hereinafter referred to as "Parent") and its subsidiary companies which includes one of the Group's 35 joint operations which is a company incorporated in India, its associate companies and joint ventures, which are companies incorporated in India, as of that date. ANNEXURE “A” TO THE INDEPENDENT AUDITOR'S REPORT (Referred to in paragraph “(f)” under 'Report on Other Legal and Regulatory Requirements' section of our report of even date) Report on the Internal Financial Controls with reference to Consolidated Financial Statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act") Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to Consolidated Financial Statements and their operating effectiveness. Our audit of internal financial controls with reference to Consolidated Financial Statements included obtaining an understanding of internal financial controls with reference to Consolidated Financial Statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. (Partner) As at 31-3-2024 Other intangible assets 356.00 9 1952.08 1965.78 65272.49 52467.59 Deferred tax assets (net) 51(d) 3863.72 3984.79 Current tax receivable (net) 4245.78 3611.66 Other non-current assets 10 2156.55 2377.38 Cash and cash equivalents 13 Trade receivables 12 Investments Financial assets 475.46 6828.78 11 Inventories Current assets 108147.99 121547.37 Sub-total Non-current assets 6620.19 As at 31-3-2023 88 Other loans Intangible assets under development 2234550 Right-of-use assets 61(b)(iii) 13297.64 11336.28 2897.04 2949.09 2191.37 3360.22 7800.88 7798.65 17384.52 18007.98 147.97 2289.41 116.48 40920.92 52154.76 7 Loans towards financing activities 7920.03 9425.94 Other financial assets 6 1304.86 1264.25 43(e) Investments in joint ventures and associates Financial assets 2137.87 Other investments 14 Rupen K. Bhatt Chartered Accountants 120.31 Brought forward - Other comprehensive income 2022-23 2023-24 Note Particulars crore Consolidated Statement of Profit and Loss for the year ended March 31, 2024 (contd.) Statements Reports Financial Statutory Integrated Report Discussion and Analysis Management Corporate Overview Integrated Annual Report 2023-24 Statutory Integrated Management Discussion and Analysis Corporate Overview Debt instruments through Other comprehensive income 126.80 (194.82) (246.80) (26.97) 53.21 Carried forward - Other comprehensive income 99.83 120.31 (193.59) (194.82) 526 Income tax (expenses)/income on debt instruments through Other comprehensive income Financial Exchange differences in translating the financial statements of foreign operations 101.83 Non-controlling interests Other comprehensive income for the year attributable to: Owners of the Company Owners of the Company Non-controlling interests Profit for the year attributable to: 11572.08 (958.54) 15954.51 407.41 25.60 4.41 Share in Other comprehensive income of joint ventures/associates (net) Other comprehensive income for the year (net of tax) Total comprehensive income for the year (0.04) 0.09 (0.06) 0.02 (0.03) Income tax (expenses)/income on cost of hedging reserve 0.12 Income tax (expenses)/income on exchange differences in translating the financial statements of foreign operations 1.74 3.55 15.55 105.38 Effective portion of gains/(losses) on hedging instruments in a cash flow hedge 13.81 388.41 Income tax (expenses)/income on effective portion of gains/(losses) on hedging instruments in a cash flow hedge (121.36) 321.95 267.05 (894.66) Cost of hedging reserve (1216.61) (Firm's Registration No. 117366W/W-100018) Report Statements The respective Managements of the Parent and its subsidiaries, associates and joint ventures which are companies incorporated in India whose financial statements have been audited under the Act, have represented to us and to the other auditors of such subsidiaries, associates and joint ventures respectively that, to the best of their knowledge and belief, no funds have been received by the Parent or any of such subsidiaries, associates and joint ventures from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Parent or any of such subsidiaries, associates and joint ventures shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances performed by us and that performed by the auditors of the subsidiaries, associates and joint ventures which are companies incorporated in India whose financial statements have been audited under the Act, nothing has come to our or other auditor's notice that has caused us or the other auditors to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above contain any material misstatement. The amount of dividend is in accordance with Section 123 of the Act. a. b. C. The final dividend proposed in the previous year, declared and paid by the Parent and its subsidiaries, associates and joint ventures which are companies incorporated in India, whose financial statements have been audited under the Act, where applicable, during the year is in accordance with section 123 of the Act, as applicable. The interim dividend declared and paid by the subsidiaries and joint ventures of the Parent which are companies incorporated in India, whose financial statements have been audited under the Act, where applicable, during the year and until the date of this report is in compliance with section 123 of the Act. As stated in note no. 20 to the Consolidated Financial Statements, the Board of Directors of the Parent and its subsidiaries, associates and joint ventures which are companies incorporated in India, whose financial statements have been audited under the Act, where applicable, have proposed final dividend for the year which is subject to the approval of the members of the Parent and such subsidiaries and joint ventures at the ensuing respective Annual General Meetings. Such dividend proposed is in accordance with section 123 of the Act, as applicable. Based on our examination which included test checks and based on the other auditor's reports of its subsidiary companies, associate companies and joint venture companies incorporated in India whose financial statements have been audited under the Act, the Parent Company, its subsidiary companies, associate companies and joint venture companies incorporated in India have used accounting software(s) for maintaining their respective books of account for the financial year ended March 31, 2024, which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software(s). Further, during the course of audit, we and respective other auditors, whose reports have been furnished to us by the Management of the Parent Company, have not come across any instance of audit trail feature being tampered with. As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from April 1, 2023, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 on preservation of audit trail as per the statutory requirements for record retention is not applicable for the financial year ended March 31, 2024. Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Statutory For DELOITTE HASKINS & SELLS LLP *Refer to Note No. 63(a) to the Consolidated Financial Statements U27109MH2009PTC193699 U45203MH2008PLC 180029 U29119MH1997PLC 109700 L99999MH1946PLC004768 CIN The respective Managements of the Parent and its subsidiaries, associates and joint ventures which are companies incorporated in India, whose financial statements have been audited under the Act, have represented to us and to the other auditors of such subsidiaries, associates and joint ventures respectively that, to the best of their knowledge and belief, no funds (which are material either individually or in aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Parent or any of such subsidiaries, associates and joint ventures to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Parent or any of such subsidiaries, associates and joint ventures ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; Larsen and Toubro Limited L&T Seawoods Limited L&T Realty Developers Limited L&T Special Steels and Heavy Forgings Private Limited With respect to the matters specified in clause (xxi) of paragraph 3 and paragraph 4 of the Companies (Auditor's Report) Order, 2020 ("CARO"/ "the Order") issued by the Central Government in terms of Section 143(11) of the Act, according to the information and explanations given to us, and based on the CARO reports issued by us and the auditors of respective companies included in the Consolidated Financial Statements to which reporting under CARO is applicable, as provided to us by the Management of the Parent, we report that in respect of those companies where audits have been completed under section 143 of the Act, there are no qualifications or adverse remarks by the respective auditors in the CARO reports of the said companies included in the Consolidated Financial Statements except for the following: 2. Statements Reports Report Financial Name of the company Reports C. a. • the year ended March 31, 2024, as considered in the Consolidated Financial Statements, in respect of 2 associates and 8 joint ventures, whose financial information has not been audited by us. This financial information has been audited by other auditors whose reports have been furnished to us by the Parent's management and our opinion on the Consolidated Financial Statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, joint ventures and associates, and our report in terms of subsection (3) of Section 143 of the Act, in so far as it relates to the aforesaid subsidiaries, joint ventures and associates is based solely on the reports of other auditors. We did not audit the financial information of 2 joint operations included in the standalone financial statements of the entities included in the Group, whose financial information reflects total assets of 1.67 crore as at March 31, 2024, total revenues of NIL and net cash flows of 0.00 crore for the year ended March 31, 2024, respectively, as considered in the respective standalone financial statements of the entities included in the Group. This financial information of these joint operations have not been audited by the auditor whose financial information has been furnished to us by the Parent's Management, and our opinion in so far as it relates to the amounts and disclosures included in respect of these joint operations, is based solely on such financial information. According to the information and explanations given to us by the Parent's Management, the financial information of this entity are not material to the Group. We did not audit the financial information of 31 subsidiaries, whose financial information reflects total assets of 838.29 crore as at March 31, 2024, total revenues of ₹909.77 crore and net cash flows amounting to (63.58) crore for the year March 31, 2024, as considered in the Consolidated Financial Statements. The Consolidated Financial Statements also include the Group's share of total net loss after tax of 0.60 crore and total comprehensive loss (net) of ₹1.00 crore for the year ended March 31, 2024, as considered in the Consolidated Financial Statements, in respect of 3 associates and 4 joint ventures, whose financial information has not been audited by their respective auditors. This financial information is unaudited and has been furnished to us by the Parent's Management and our opinion on the Consolidated Financial Statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, joint ventures and associates, is based solely on such unaudited financial information. In our opinion and according to the information and explanations given to us by the Management, these financial information are not material to the Group. Our opinion on the Consolidated Financial Statements above and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and the financial information certified by the Management. Report on Other Legal and Regulatory Requirements 1. As required by Section 143(3) of the Act, based on our audit and on the consideration of the reports of the other auditors on the separate financial information of the joint operations, subsidiaries, associates and joint ventures referred to in the Other Matters section above we report, to the extent applicable that: a) b) f) g) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid Consolidated Financial Statements. In our opinion, proper books of account as required by law relating to preparation of the aforesaid Consolidated Financial Statements have been kept so far as it appears from our examination of those books and the reports of the other auditors. The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss including Other Comprehensive Income, the Consolidated Statement of Cash Flows and the Consolidated Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the Consolidated Financial Statements. In our opinion, the aforesaid Consolidated Financial Statements comply with the Ind AS specified under Section 133 of the Act. On the basis of the written representations received from the directors of the Parent as on March 31, 2024 taken on record by the Board of Directors of the Parent Company and the reports of the statutory auditors of its joint operation companies, subsidiary companies, associate companies and joint venture companies incorporated in India, none of the directors of the Group companies, its associate companies and joint venture companies incorporated in India is disqualified as on March 31, 2024 from being appointed as a director in terms of Section 164 (2) of the Act. With respect to the adequacy of the internal financial controls with reference to Consolidated Financial Statements and the operating effectiveness of such controls, refer to our separate Report in "Annexure A" which is based on the auditors' reports of the Parent, subsidiary companies, associate companies and joint venture companies incorporated in India. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of internal financial controls with reference to Consolidated Financial Statements of those companies. With respect to the other matters to be included in the Auditor's Report in accordance with the requirements of section 197(16) of the Act, as amended, in our opinion and to the best of our information and according to the explanations given to us and based on the auditor's reports of subsidiary companies, associate companies and joint venture companies incorporated in India, the remuneration paid by the Parent and such subsidiary companies, associate companies and joint venture companies to their respective directors during the year is in accordance with the provisions of section 197 of the Act. 519 There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Parent and its subsidiary companies, associate companies and joint venture companies incorporated in India; vi. V. iv. iii. Provision has been made in the Consolidated Financial Statements, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts; b. Group, its associates and joint ventures (Refer Note No 32 to the Consolidated Financial Statements); The Consolidated Financial Statements disclose the impact of pending litigations on the consolidated financial position of the i. h) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us: Auditor's Report on Consolidated Financial Statements LARSEN & TOUBRO 520 ii. Other bank balances 15 Loans towards financing activities 34 35 221112.91 4158.03 225270.94 2022-23 183340.70 2929.17 186269.87 Total Income EXPENSES: Manufacturing, construction and operating expenses: 36 Cost of raw materials, components consumed 19442.25 18995.11 Construction materials consumed Purchase of stock-in-trade (3156.64) 1021.07 and property development Changes in inventories of finished goods, work-in-progress, stock-in-trade 25624.45 35054.35 2023-24 Sub-contracting charges 4432.02 Stores, spares and tools consumed 1052.86 1063.77 43237.35 54813.97 4814.89 Other manufacturing, construction and operating expenses Note Revenue from operations COMMITMENTS (capital and others) NOTES FORMING PART OF THE FINANCIAL STATEMENTS In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm's Registration No. 117366W/W-100018 by the hand of 33 1 to 65 S. N. SUBRAHMANYAN Chairman & Managing Director (DIN 02255382) RUPEN K. BHATT Partner Membership No. 046930 R. SHANKAR RAMAN Whole time Director & Chief Financial Officer INCOME: Particulars crore Consolidated Statement of Profit and Loss for the year ended March 31, 2024 Consolidated Statement of Profit and Loss LARSEN & TOUBRO Other income (net) 525 Independent Director P. R. RAMESH Company Secretary & Compliance Officer Membership No. FCS3939 SIVARAM NAIR A (DIN 00019798) Mumbai, May 8, 2024 (DIN 01915274) 32 24486.49 Finance cost of financial services business and finance lease activity 4947.39 5055.17 (571.01) 5127.70 (180.31) 51(a) 135.99 17109.03 (227.96) 20.83 93.61 20517.11 48 (676.31) 448.35 20.83 51(a) (91.97) 16973.04 169296.83 204847.44 20423.50 114.44 3502.25 Profit before tax Tax expense: Current tax Deferred tax 39 40 15569.72 + www 37214.11 10419.42 8758.04 3545.85 3207.16 3682.33 41171.02 20020.81 (22.62) (94.25) 5714.90 6026.44 146028.82 116615.27 Employee benefits expense 37 Sales, administration and other expenses 38 Finance costs Depreciation, amortisation, impairment and obsolescence Total Expenses Profit before exceptional items and tax Exceptional items before tax (net) [gain/(loss)] Tax expense on exceptional items: Current tax B (16.81) 15.58 12530.62 Profit after tax Share in profit/(loss) after tax of joint ventures/associates (net) Profit for the year 43(f) 15547.10 Other comprehensive income 4484.16 12624.87 A Items that will not be reclassified to profit or loss: 28.82 (23.60) (8.61) 6.79 Share in Other comprehensive income of joint ventures/associates (net) 20.21 0.27 Gain/(loss) on remeasurements of the net defined benefit plans Income tax (expenses)/income on remeasurements of the net defined benefit plans CONTINGENT LIABILITIES 330352.31 339627.24 Corporate Overview Management Integrated Statutory Discussion and Analysis Report Reports Financial Statements Consolidated Balance Sheet as at March 31, 2024 (contd.) Particulars EQUITY AND LIABILITIES: Equity Equity share capital Other equity Equity attributable to owners of the Company Non-controlling interests TOTAL EQUITY 102549.66 89325.95 14241.27 16190.42 86359.24 281.10 89044.85 274.93 86084.31 Integrated Annual Report 2023-24 21 220 As at 31-3-2023 As at 31-3-2024 Note crore Liabilities 20 103567.22 524 339627.24 16 Other loans 17 Other financial assets 18 234567∞ 34957.63 35573.42 48770.95 44731.53 11958.50 16926.69 3399.89 5592.91 34814.59 40460.55 106.54 5563.92 TOTAL ASSETS 988.80 65920.39 221215.52 1005.36 45(b) Group(s) of assets classified as held for sale 330352.31 217074.51 70882.30 19 Other current assets 148466.35 139572.02 251.15 4930.10 Sub-total-Current assets Non-current liabilities Financial liabilities Borrowings Trade payables: Due to micro enterprises and small enterprises 1018.71 Due to others 28 52274.17 851.70 48932.42 Other financial liabilities 29 7575.67 7441.94 118949.02 115012.51 Other current liabilities Provisions Current tax liabilities (net) Sub-total-Current liabilities 226785.09 237077.58 162065.99 176600.73 1393.46 1860.47 490.75 3493.47 42166.55 52333.73 31 30 TOTAL EQUITY AND LIABILITIES TOTAL LIABILITIES 3457.51 547.67 30896.32 26399.38 29698.53 Current liabilities Sub-total - Non-current liabilities Other non-current liabilities Deferred tax liabilities (net) Provisions 63136.95 Financial liabilities 58337.82 96.07 23 Other financial liabilities 56506.97 1734.78 Lease liability 22 61217.68 1646.31 272.96 Total comprehensive income for the year attributable to: Borrowings 51(d) 27 27834.27 26 Lease liability Current maturities of long term borrowings 64719.10 24 60476.85 618.02 630.43 533.63 869.99 987.38 25 81.73 Exceptional items (net of tax) Owners of the Company Earnings per share (EPS) of * 2 each comprehen- comprehen- sive income sive income 98.20 55.62 82126.65 12966.07 95092.72 10470.72 (19.06) 81.53 (644.88) reserve (188.02) 81.53 (644.88) (188.02) 15.66 15.66 10470.72 2059.90 12530.62 (754.77) (203.80) (958.57) 9715.95 1856.10 11572.05 Issue of equity shares on exercise of employee share options 10.22 10451.66 Total controlling interests Other share Statutory Retained premium reserve options (net) Foreign currency reserves earnings translation 282.44 335.10 8718.74 371.65 3710.47 67139.90 696.00 718.53 Items of Other comprehensive income Debt Equity instruments instruments Total other Non- Hedging through through equity reserve Other 10.22 10.22 Transfer on account of exercise of employee share options 41.23 60.16 --- - 60.16 (60.16) divestment/acquisition Balance as at 31-3-2023 (0.70) ----(0.70) 26.10 25.40 282.44 328.86 8770.19 467.09 3775.58 74519.94 777.53 141.76 (89.82) 71.28 89044.85 14241.27 103286.12 528 Integrated Annual Report 2023-24 Non-controlling interests Decrease in non-controlling interests due to dilution/ Securities Net gain/loss on transactions with non-controlling 66.75 222.63 (613.59) (3705.01) (41.23) I Transfer to non-financial assets/liabilities Transfer from/(to) retained earnings 68.11 68.11 68.11 (6.24) (19.21) 65.11 (39.66) Employee share options (net) Dividend paid 155.88 155.88 (3091.42) (3091.42) interests Employee Deferred tax reserve 171.71 (203.80) 407.41 (958.54) 13294.81 9715.98 2659.70 (754.74) 1856.10 11572.08 55 55 93.96 74.51 93.88 74.45 15954.51 235.70 12530.62 15547.10 Capital redemption Basic earnings per equity share (*) Diluted earnings per equity share (*) Face value per equity share (*) NOTES FORMING PART OF THE FINANCIAL STATEMENTS In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm's Registration No. 117366W/W-100018 by the hand of RUPEN K. BHATT Partner Membership No. 046930 Mumbai, May 8, 2024 13059.11 10470.72 2487.99 2.00 2.00 2059.90 S. N. SUBRAHMANYAN Chairman & Managing Director 281.01 0.09 6.25 Issued, subscribed and fully paid up equity shares outstanding at the end of the year 1,37,46,68,619 274.93 1,40,54,82,190 B. Other equity * crore Particulars Profit for the year (a) Other comprehensive income for the year (b) Total comprehensive income for the year (a+b) crore 1 to 65 Capital Reserves and surplus- Balance as at 1-4-2022 2022-23 Number of shares 1,40,50,29,123 4,53,067 281.10 281.10 Whole time Director & Chief Financial Officer (DIN 00019798) 0.08 (DIN 02255382) SIVARAM NAIR A Company Secretary & Compliance Officer Membership No. FCS3939 P. R. RAMESH Independent Director (DIN 01915274) LARSEN & TOUBRO Consolidated Statement of changes in Equity 527 Consolidated Statement of Changes in Equity for the year ended March 31, 2024 shares 1,40,54,82,190 4,36,429 3,12,50,000 Issued, subscribed and fully paid up equity shares outstanding at the beginning of the year Add: Shares issued on exercise of employee stock options during the year Less: Shares extinguished on buy-back * crore R. SHANKAR RAMAN Particulars A. Equity share capital 2023-24 Number of Determining the expected losses, which are recognised in the period in which such losses become probable based on the expected total contract cost as at the reporting date. Reports C. Determining the method to be applied to arrive at the variable consideration requiring an adjustment to the transaction price. Revenue includes adjustments made towards liquidated damages and variation wherever applicable. Escalation and other claims, which are not ascertainable/acknowledged by customers are not taken into account. Material Accounting Policy Information (contd.) NOTE [1](II) Notes forming part of the Consolidated Financial Statements (contd.) Statements b. Integrated Annual Report 2023-24 Financial Statutory Integrated Management Discussion and Analysis Corporate Overview 534 Determining the revenue to be recognised in case of performance obligation satisfied over a period of time. Revenue recognition is done by measuring the progress towards complete satisfaction of performance obligation. A. a. Costs to obtain a contract which are incurred regardless of whether the contract was obtained are charged off in profit & loss immediately in the period in which such costs are incurred. Incremental costs of obtaining a contract, if any, and costs incurred to fulfill a contract are amortised over the period of execution of the contract in proportion to the progress measured in terms of a proportion of actual cost incurred to date, to the total estimated cost attributable to the performance obligation. Significant judgments are used in: Report B. Notes forming part of the Consolidated Financial Statements D. Variable consideration is estimated using the expected value method or most likely amount as appropriate in a given circumstance. Payment terms agreed with a customer are as per business practice and the financing component, if significant, is separated from the transaction price and accounted as interest income. G. F. In respect of financial services business and finance lease activity, income from interest-bearing loans/lease is recognised on accrual basis over the life of the loans/lease based on the effective yield. Income from bill discounting, advisory and syndication services and other financing activities is accounted on accrual basis. Material Accounting Policy Information (contd.) NOTE [1](II) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 535 Revenue from contracts for rendering of engineering design services and other services which are directly related to the construction of an asset is recognised on the same basis as stated in (i) B above. In respect of information technology business and technology services business, revenue from contracts awarded on time and material basis is recognised over a period of time when relevant services are rendered and related costs are incurred. Revenue from fixed price contracts is recognised over a period of time using the proportionate completion method. Revenue from rendering of services is recognised over time as the customer receives the benefit of the company's performance and the company has an enforceable right to payment for services transferred. Rendering of services E. In the case of the development project business and the realty business, revenue includes profit on sale of investment properties or sale of business undertaking/stake in the subsidiary and/or joint venture companies as the sale/divestments are inherent in the business model. Revenue from property development activities is recognised when performance obligation is satisfied, customer obtains control of the property transferred and a reasonable expectation of collection of the sale consideration from the customer exists. Impairment loss (termed as provision for foreseeable losses in the financial statements) is recognised in profit or loss to the extent the carrying amount of the contract asset exceeds the remaining amount of consideration that the company expects to receive towards remaining performance obligations (after deducting the costs that relate directly to fulfill such remaining performance obligations). The Group recognises impairment loss (termed as provision for expected credit loss in the financial statements) on account of credit risk in respect of a contract asset using expected credit loss model on similar basis as applicable to trade receivables. For contracts where the aggregate of contract cost incurred to date plus recognised profits (or minus recognised losses as the case may be) exceeds the progress billing, the surplus is shown as contract asset and termed as "Unbilled revenue". For contracts where progress billing exceeds the aggregate of contract costs incurred to date plus recognised profits (or minus recognised losses, as the case may be), the surplus is shown as contract liability and termed as "Excess of billing over revenue". Amounts received before the related work is performed are disclosed in the Balance Sheet as contract liability and termed as "Advances from customer". The amounts billed on customer for work performed and are unconditionally due for payment i.e. only passage of time is required before payment falls due, are disclosed in the Balance Sheet as trade receivables. The amount of retention money held by the customers pending completion of performance milestone is disclosed as part of contract asset and is reclassified as trade receivables when it becomes due for payment. Fixed price contracts: Contract revenue is recognised over time to the extent of performance obligation satisfied and control is transferred to the customer. Contract revenue is recognised at allocable transaction price which represents the cost of work performed on the contract plus proportionate margin, using the percentage of completion method. Percentage of completion is the proportion of cost of work performed to date, to the total estimated contract costs. With respect to contracts, where the outcome of the performance obligation can not be reasonably measured, but the costs incurred towards satisfaction of performance obligation are expected to be recovered, the revenue is recognised only to the extent of costs incurred. Cost plus contracts: Revenue from cost plus contracts is recognised over time and is determined with reference to the extent performance obligations have been satisfied. The amount of transaction price allocated to the performance obligations satisfied represents the recoverable costs incurred during the period plus the margin as agreed with the customer. Revenue is recognised when the control of the same is transferred to the customer and it is probable that the Group will collect the consideration to which it is entitled for the exchanged goods. Revenue from commissioning of complex plant and equipment is recognised either 'over time' or 'in time' based on assessment of the transfer of control as per the terms of the contract. Revenue from construction/project related activity is recognised as follows: Revenue from sale of manufactured and traded goods including contracts for supply/commissioning of complex plant and equipment is recognised as follows: C. The revenue is recognised to the extent of transaction price allocated to the performance obligation satisfied. Transaction price is the amount of consideration to which the Group expects it to be entitled in exchange for transferring goods or services to a customer excluding amounts collected on behalf of a third party. The Group includes variable consideration as part of transaction price when there is a basis to reasonably estimate the amount of the variable consideration and when it is probable that a significant reversal of cumulative revenue recognised will not occur when the uncertainty associated with the variable consideration is resolved. Notes forming part of the Consolidated Financial Statements (contd.) (b) the customer controls the asset as it is being created/enhanced by the company's performance or The unrealised profits/losses on transactions with joint ventures and associates are eliminated by reducing the carrying amount of investment. The results, assets and liabilities of joint ventures and associates are incorporated in the consolidated financial statements using equity method of accounting after making necessary adjustments to achieve uniformity in application of accounting policies, wherever required. An investment in joint venture or associate is initially recognised at cost and adjusted thereafter to recognise the Group's share of profit or loss and other comprehensive income of the joint venture or associate. Gain or loss in respect of changes in Other Equity of joint ventures or associates resulting from divestment or dilution of stake in the joint ventures and associates is recognised in the Statement of Profit and Loss. On acquisition of investment in a joint venture or associate, any excess of cost of investment over the fair value of the assets and liabilities of the joint venture and associate, is recognised as goodwill and is included in the carrying value of the investment in the joint venture and associate. The excess of fair value of assets and liabilities over the investment is recognised directly in equity as capital reserve. When the Group has with other entities joint control of the arrangement and rights to the net assets of the joint arrangement, it recognises its interest as joint ventures. Joint control exists when the decisions about the relevant activities (i.e. activities that significantly affects the investee's returns) require unanimous consent of the parties sharing the control. When the Group has significant influence over the other entity, it recognises such interest as investment in associates. Significant influence is the power to participate in the financial and operating policy decisions of the entity but is not control or joint control over the entity. (e) Investments in joint ventures and associates (vi) The gains/losses in respect of divestment of stake resulting in ceding of control in subsidiary companies are recognised in the Statement of Profit and Loss. The investment representing the interest retained in a former subsidiary, if any, is initially recognised at its fair value with the corresponding effect recognised in the Statement of Profit and Loss as on the date the control is ceded. Such retained interest is subsequently accounted as investment in an associate or a joint venture or as a financial asset. (v) The gains/losses in respect of part divestment/dilution of stake in subsidiary companies not resulting in ceding of control, are recognised directly in other equity attributable to the owners of the Parent Company in the Consolidated Financial Statements of the Group. (iv) Non-controlling interests represent that part of the total comprehensive income and net assets of subsidiaries attributable to the interest which is not owned, directly or indirectly, by the Parent Company. subsidiaries are harmonised to ensure the consistency with the policies adopted by the Parent Company. The consolidated financial statements are presented to the extent possible, in the same manner as Parent Company's standalone financial statements. Profit or loss and other comprehensive income are attributed to the owners of the Parent Company and to the non-controlling interests, shown separately in the financial statements. Material Accounting Policy Information (contd.) NOTE [1](II) Revenue on account of construction services rendered in connection with Build-Operate-Transfer (BOT) projects undertaken by the Group is recognised during the period of construction using percentage of completion method. After the completion of construction period, revenue from fare/toll charges from users of facilities is accounted when they are collected. Statements Reports Report Financial Statutory Integrated Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 532 The carrying amount of investment in joint ventures and associates is reduced to recognise impairment, if any, when there is evidence of impairment. (c) there is no alternative use of the asset and the company has either explicit or implicit right of payment considering legal precedents. In all other cases, performance obligation is considered as satisfied at a point in time. When the Group's share of losses of a joint venture or an associate exceeds the Group's interest in that joint venture or the associate (which includes any long-term interests that, in substance, form part of the Group's net investment in the joint venture or the associate), the Group discontinues recognising its share of further losses. Additional losses are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the joint venture or the associate. (f) Interests in joint operations (a) the customer simultaneously consumes the benefit of the company's performance or The Group transfers control of a good or service over time and therefore satisfies a performance obligation and recognises revenue over a period of time if one of the following criteria is met: For performance obligation satisfied over time, the revenue recognition is done using input method by measuring the progress towards complete satisfaction of performance obligation. The progress is measured in terms of a proportion of actual cost incurred to date, to the total estimated cost attributable to the performance obligation as it best depicts the transfer of control that occurs as costs are incurred. Revenue from contracts with customers is recognised when a performance obligation is satisfied by transfer of promised goods or services to a customer. (i) Revenue recognition Operating cycle for the business activities of the Group covers the duration of the specific project or contract or product line or service including the defect liability period wherever applicable and extends up to the realisation of receivables (including retention monies) within the agreed credit period normally applicable to the respective lines of business. (h) Operating cycle for current and non-current classification Business combinations arising from transfers of interests in entities that are under common control are accounted using pooling of interest method. The difference between consideration given and the aggregate historical carrying amounts of assets and liabilities of the acquired entity are recorded in equity. After initial recognition, goodwill arising on consolidation is tested for impairment annually and measured at cost less accumulated impairment losses, if any. In the event of cessation of operations of a subsidiary, the unimpaired goodwill is written off fully. Goodwill on consolidation is allocated to cash generating units or group of cash generating units that are expected to benefit from the acquisition. Goodwill arising on consolidation, of acquisitions represents the excess of (a) consideration paid for acquiring control and (b) acquisition date fair value of previously held ownership interest, if any, in a subsidiary over the Group's share in the fair value of the net assets (including identifiable intangibles) of the subsidiary as on the date of acquisition of control. Where the fair value of the identifiable assets and liabilities exceed the cost of acquisition, the excess is recognised as Capital Reserve. for recognition are recognised at their fair values at the acquisition date. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments, are adjusted retrospectively with corresponding adjustments to goodwill or capital reserve as the case maybe, else recognised in the Statement of Profit and Loss. Material Accounting Policy Information (contd.) NOTE [1](II) Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements LARSEN & TOUBRO 533 The Group accounts for business combinations under acquisition method of accounting. Acquisition-related costs are recognised in the Statement of Profit and Loss as incurred. The acquiree's identifiable assets, liabilities and contingent liabilities that meet the condition (g) Business combination/Goodwill on consolidation When the Group has joint control of the arrangement based on contractually determined right to the assets and obligations for liabilities, it recognises such interests as joint operations. Joint control exists when the decisions about the relevant activities (i.e. activities that significantly affects the investee's returns) require unanimous consent of the parties sharing the control. In respect of its interests in joint operations, the Group recognises its share in assets, liabilities, income and expenses line-by-line in the standalone financial statements of the entity which is party to such joint arrangement, thereby forms part of the consolidated financial statements. Interests in joint operations are included in the segments to which they relate. Upon classification of investment in joint ventures and/or associates as held for sale, equity accounting is discontinued in respect of that interest. H. 537 I. Financial Report Reports Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [1](II) Material Accounting Policy Information (contd.) PPE not ready for the intended use on the date of the Balance Sheet are disclosed as "capital work-in-progress". (Also refer to the policies on leases, borrowing costs, impairment of assets and foreign currency transactions below). Depreciation is recognised using straight-line method so as to write off the cost of the assets (other than freehold land and capital work-in-progress) less their residual values over their useful life specified in Schedule II to the Act, or in case of assets where the useful life was determined by technical evaluation, over the useful life so determined. Depreciation method is reviewed at each financial year end to reflect the expected pattern of consumption of the future economic benefits embodied in the asset. The estimated useful life and residual values are also reviewed at each financial year end with the effect of any change in the estimates of useful life/residual value is accounted on prospective basis. Depreciation charge for impaired assets is adjusted in future periods in such a manner that the revised carrying amount of the asset is allocated over its remaining useful life. Where cost of a part of the asset ("asset component") is significant to total cost of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part is determined separately and such asset component is depreciated over its separate useful life. Depreciation on additions to owned assets is calculated pro rata from the date it is ready for use. PPE is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising on derecognition is recognised in the Statement of Profit and Loss in the same period. (m) Investment property Properties (including those under construction) held to earn rentals and/or capital appreciation are classified as investment property and are measured and reported at cost, including transaction costs and borrowing cost capitalised for qualifying assets, in accordance with the Group's accounting policy. Policies with respect to depreciation, useful life and derecognition are on the same basis as stated in PPE above. (n) Intangible assets Intangible assets are recognised when it is probable that the future economic benefits that are attributable to the asset will flow to the Group and the cost of the asset can be measured reliably. Intangible assets are stated at original cost net of tax/duty credits availed, if any, including borrowing costs capitalised for qualifying assets and reduced by accumulated amortisation and cumulative impairment, if any. All directly attributable costs and other administrative and other general overhead expenses that are specifically attributable to acquisition of intangible assets are allocated and capitalised as a part of the cost of the intangible assets. Research and development expenditure on new products: (i) Expenditure on research is expensed under respective heads of account in the period in which it is incurred Statutory (ii) Development expenditure on new products is capitalised as intangible asset, if all of the following can be demonstrated: Integrated Corporate Overview assets. (j) Other income A. Interest income on investments and loans is accrued on a time basis by reference to the principal outstanding and the B. C. D. effective interest rate including interest on investments classified as fair value through profit or loss or fair value through other comprehensive income. Interest receivable on customer dues is recognised as income in the Statement of Profit and Loss on accrual basis provided there is no uncertainty of realisation. Dividend income is accounted in the period in which the right to receive the same is established. Government grants, which are revenue in nature and are towards compensation for the qualifying costs incurred by the Group, are recognised as other income/reduced from underlying expenses in profit or loss in the period in which such costs are incurred. Government grants related to an asset are reduced from the cost of an asset until the asset is ready to use and the grant post that is presented as deferred income. Subsequently the grant is recognised as income in profit or loss on a systematic basis over the expected useful life of the related asset. Government grant receivable in the form of duty credit scrips is recognised as other income in the Statement of Profit and Loss in the period in which the export is done or the application is made to the government authorities and to the extent there is no uncertainty towards its receipt. Other items of income are accounted as and when the right to receive such income arises and it is probable that the economic benefits will flow to the Group and the amount of income can be measured reliably. (k) Exceptional items (I) An item of income or expense which by its size, type or incidence requires disclosure in order to improve an understanding of the performance of the Group is treated as an exceptional item and the same is disclosed in Statement of Profit and Loss and in the notes forming part of the financial statements. Property, Plant and Equipment (PPE) PPE is recognised when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. PPE is stated at original cost net of tax/duty credits availed, if any, less accumulated depreciation and cumulative impairment, if any. All directly attributable costs related to the acquisition of PPE and borrowing costs in case of qualifying assets are capitalised in accordance with the Group's accounting policy. Own manufactured PPE is capitalised at cost including an appropriate share of overheads. Administrative and other general overhead expenses that are specifically attributable to construction or acquisition of PPE or bringing the PPE to working condition are allocated and capitalised as a part of the cost of the PPE. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost can be measured reliably. 536 Integrated Annual Report 2023-24 Management Discussion and Analysis A. the technical feasibility of completing the intangible asset so that it will be available for use or sale; B. (o) Impairment of assets As at the end of each financial year, the carrying amounts of PPE, investment property, intangible assets and investments in joint ventures and associates are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If such indication exists, the PPE, investment property, intangible assets and investments in joint ventures and associates are tested for impairment so as to determine the impairment loss, if any. Goodwill and intangible assets not available for use are tested for impairment each year. Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is determined: in the case of an individual asset, at the higher of fair value less costs of disposal and the value-in-use; and (i) (ii) in the case of a cash generating unit (the smallest identifiable group of assets that generates independent cash flows), at the higher of the cash generating unit's fair value less costs of disposal and the value-in-use. (The amount of value-in-use is determined as the present value of estimated future cash flows from the continuing use of an asset, which may vary based on the future performance of the entity and from its disposal at the end of its useful life. For this purpose, the discount rate (post-tax) is determined based on the weighted average cost of capital of the company suitably adjusted for risks specified to the estimated cash flows of the asset). If recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, such deficit is recognised immediately in the Statement of Profit and Loss as impairment loss and the carrying amount of the asset (or cash generating unit) is reduced to its recoverable amount. For this purpose, the impairment loss recognised in respect of a cash generating unit is allocated first to reduce the carrying amount of any goodwill allocated to such cash generating unit and then to reduce the carrying amount of the other assets of the cash generating unit on a pro-rata basis. When an impairment loss recognised earlier is subject to full or partial reversal, the carrying amount of the asset (or cash generating unit), except impairment loss allocated to goodwill, is increased to the revised estimate of its recoverable amount, so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss is recognised for the asset (or cash generating unit) in prior years. A reversal of an impairment loss (other than impairment loss allocated to goodwill) is recognised immediately in the Statement of Profit and Loss. (p) Employee benefits (i) Short-term employee benefits: Employee benefits such as salaries, wages, short term compensated absences, bonus, ex-gratia, and performance-linked rewards falling due wholly within twelve months of rendering the service are classified as short-term employee benefits and are expensed in the period in which the employee renders the service. 538 Integrated Annual Report 2023-24 Other operational revenue represents income earned from the activities incidental to the business and is recognised when the performance obligation is satisfied and the right to receive the income is established as per the terms of the contract. Revenue from operation and maintenance services of power plant receivable under the Power Purchase Agreement is recognised on accrual basis. L. K. Revenue from charter hire is recognised as per the terms of the time charter agreement. J. Course fees/subscription income is recognised over time as per the course/subscription duration and agreed terms. (ix) Amortisation on impaired assets is provided by adjusting the amortisation charge in the remaining periods so as to allocate the asset's revised carrying amount over its remaining useful life. (viii) Fare collection rights are amortised using the straight-line method over the period of concession; and (vii) Rights under licensing agreement: over a period of six years; (vi) Platforms and courses: over a period of five years; the Group has intention to complete the intangible asset and use or sell it; C. the Group has ability to use or sell the intangible asset; D. E. the manner in which the probable future economic benefits will be generated including the existence of a market for output of the intangible asset or intangible asset itself or if it is to be used internally, the usefulness of intangible assets; the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and F. the Group has ability to reliably measure the expenditure attributable to the intangible asset during its development. Development expenditure that does not meet the above criteria is expensed in the period in which it is incurred. Fare collection rights obtained in consideration for rendering construction services represent the right to collect fare during the concession period in respect of Build-Operate-Transfer (BOT) projects undertaken by the Group. Fare collection rights are capitalised as intangible asset upon completion of the project at the cumulative construction costs including related margins. Intangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as "intangible assets under development". Commission income is recognised when the terms of the contract are fulfilled. (iii) The consolidated financial statements of the Group combine financial statements of the Parent Company and its subsidiaries line-by-line by adding together the like items of assets, liabilities, income and expenses. All intra-group assets, liabilities, income, expenses and unrealised profits/losses on intra-group transactions are eliminated on consolidation. The accounting policies of Notes forming part of the Consolidated Financial Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [1](II) Material Accounting Policy Information (contd.) Intangible assets are amortised on straight-line basis over the estimated useful life. The method of amortisation and useful life are reviewed at the end of each accounting year with the effect of any changes in the estimate being accounted for on a prospective basis. The estimated useful life for major categories of the intangible assets are as follows: (i) Specialised software: over a period of two to ten years; (ii) Technical know-how: over a period of three to eight years; (iii) New product design and development: over a period of five years; (iv) Customer contracts and relationship: over a period of the contract which generally is over three to ten years; (v) Trade name: over a period of three months to six years; LARSEN & TOUBRO (ii) Consolidation of a subsidiary begins when the Parent Company, directly or indirectly, obtains control over the subsidiary and ceases when the Parent Company, directly or indirectly, loses control of the subsidiary. Income and expenses of a subsidiary acquired are included in the Consolidated Statement of Profit and Loss from the date the Parent Company, directly or indirectly, gains control until the date when the Parent Company, directly or indirectly, ceases to control the subsidiary. In terms of our report attached (d) Basis of consolidation 2803.49 827.15 2127.87 Consideration received on disposal of subsidiaries/joint venture Dividend received from other investments Dividend received from joint ventures/associates Interest received Deposits/loans repaid by associates, joint ventures and third parties Change in other bank balance and cash not available for immediate use Sale of non-current investments (Purchase)/sale of current investments (net) 350.37 (3036.34) (4889.46) 306.06 Sale of property, plant and equipment, investment property and intangible assets Purchase of non-current investments (4143.79) (4516.53) Purchase of property, plant and equipment, investment property and intangible assets B. Cash flow from investing activities: 22776.96 18266.28 (6083.66) Net cash generated from operating activities 2697.75 151.72 2408.16 530 6.66 (14.87) (8311.70) 2163.04 (4.97) Cash and cash equivalents of subsidiaries discharged pursuant to divestment/classification to held for sale Net cash generated from/(used in) investing activities 0.01 Cash and cash equivalents acquired pursuant to acquisition of subsidiaries (131.22) (13.14) Consideration paid on acquisition of subsidiaries (including contingent consideration) (96.99) Net payments for transfer of discontinued operations 651.33 Consideration received on transfer of business undertaking in Development Projects business 2887.30 214.67 6.28 151.14 129.83 96.25 1608.99 19.05 (661.77) Integrated Annual Report 2023-24 (5127.16) 27904.12 (Gain)/loss on de-recognition of lease liability/right-of-use assets (511.73) (Profit)/loss on transfer of business undertaking in Development Projects business 716.20 1055.47 Impairment of investment in financial instruments (2.65) (Gain)/loss on disposal of subsidiary 249.51 297.63 Employee stock option-discount (52.87) (734.20) (167.65) (95.44) (Profit)/loss on sale of property, plant and equipment, investment property and intangible assets (net) (Profit)/loss on sale/fair valuation of investments (net) (1817.47) (2447.07) Interest income 3207.16 The Group accounts for provision of warranty, return, refund and other similar obligations in accordance with Ind AS 37 "Provisions, Contingent Liabilities and Contingent Assets". Refer Note [1(ab)] below for policy on provisions, contingent liabilities and contingent (52.27) (5280.05) (10.16) 1.38 23546.33 4937.44 (5587.89) (Increase)/decrease in loans and advances towards financing activities 22966.68 29134.22 5412.71 14506.53 (475.75) (4495.26) (10548.40) 244.68 Direct taxes refund/(paid) [net] Cash generated from operations Cash generated from operations before financing activities Increase/decrease) in trade and other payables (Increase)/decrease in inventories (Increase)/decrease in trade and other receivables Adjustments for : 22524.98 24931.41 Operating profit before working capital changes Capital subsidy from Government Corporate Overview Management Discussion and Analysis Integrated SIVARAM NAIR A Whole-time Director & Chief Financial Officer (DIN 00019798) R. SHANKAR RAMAN Mumbai, May 8, 2024 S. N. SUBRAHMANYAN Chairman & Managing Director (DIN 02255382) Membership No. 046930 Partner RUPEN K. BHATT by the hand of Firm's Registration No. 117366W/W-100018 Chartered Accountants For DELOITTE HASKINS & SELLS LLP 3. Previous year's figures have been regrouped/reclassified wherever applicable. 2. Property, plant and equipment, investment property and intangible assets adjusted for movement of (a) capital work-in-progress for property, plant and equipment and investment property and (b) Intangible assets under development during the year. Statement of Cash Flows has been prepared under the indirect method as set out in the Indian Accounting Standard (Ind AS) 7 "Statement of Cash Flows" as specified in the Companies (Indian Accounting Standards) Rules, 2015. 16926.69 11958.50 263.68 15.85 2892.77 13770.24 16926.69 Company Secretary & Compliance Officer Membership No. FCS3939 (4984.04) P. R. RAMESH 531 Amounts in the financial statements are presented in Indian Rupees in crore [1 crore = 10 million] rounded off to two decimal places as permitted by Schedule III to the Act. Per share data are presented in Indian Rupees to two decimal places. The Balance Sheet, the Statement of Profit and Loss and the Statement of Changes in Equity are prepared and presented in the format prescribed in the Schedule III to the Companies Act, 2013 (the Act). The Statement of Cash Flows has been prepared and presented in accordance with Ind AS 7 "Statement of Cash Flows". The disclosures with respect to items in the Balance Sheet and Statement of Profit and Loss, as prescribed in the Schedule III to the Act, are presented by way of notes forming part of the financial statements along with the other notes required to be disclosed under Ind AS and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended. (c) Presentation of financial statements Above levels of fair value hierarchy are applied consistently and generally, there are no transfers between the levels of the fair value hierarchy unless the circumstances change warranting such transfer. (iii) Level 3 inputs are unobservable inputs for the valuation of assets or liabilities. (ii) Level 2 inputs are inputs, other than quoted prices included in level 1, that are observable for the assets or liabilities, either directly or indirectly; and (i) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at measurement date; Fair value measurements are categorised as below based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety: The Group maintains its accounts on accrual basis following historical cost convention, except for certain assets and liabilities that are measured at fair value in accordance with Ind AS. (b) Basis of accounting The Group's financial statements have been prepared in accordance with the provisions of the Companies Act, 2013 and the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 and amendments thereto issued by the Ministry of Corporate Affairs under section 133 of the Companies Act, 2013. In addition, the guidance notes/announcements issued by the Institute of Chartered Accountants of India (ICAI) are also applied except where compliance with other statutory promulgations require a different treatment. These financials statements have been approved for issue by the Board of Directors at its meeting held on May 8, 2024. (a) Statement of compliance Material Accounting Policy Information NOTE [1](II) The Group is an Indian multinational engaged in EPC Projects, Hi-Tech Manufacturing and Services, operating across multiple geographies. Further details of the business operations of the Group are mentioned in Note [46] Segment Information. The Consolidated Financial Statements comprise financial statements of "Larsen & Toubro Limited" ("L&T", the "Parent Company") and its subsidiaries (collectively referred to as "the Group") for the year ended March 31, 2024. Company Overview NOTE [1](1) Notes forming part of the Consolidated Financial Statements Notes forming part of the Consolidated Financial Statements LARSEN & TOUBRO Independent Director (DIN 01915274) (11572.49) (25413.36) (2888.63) Interest paid on lease liability Repayment of lease liability [Note 50] Settlement of derivative contracts related to borrowings Payment (to)/from non-controlling interest (net) Proceeds from/ (repayment of) other borrowings (net) [Note 50] Repayment of non-current borrowings [Note 50] Proceeds from non-current borrowings [Note 50] Expenses on buy-back of equity shares Tax on buy-back of equity shares Buyback of equity shares Proceeds from issue of share capital (including share application money) [net] C. Cash flow from financing activities: crore 2022-23 2023-24 Particulars Consolidated Statement of Cash Flows for the year ended March 31, 2024 (contd.) Statements Reports Report Financial Statutory Interest paid (including cash flows on account of interest rate swaps) Net cash used in financing activities Net (decrease)/increase in cash and cash equivalents (A + B + C) Cash and cash equivalents at beginning of the year [Note 14] Effect of exchange rate changes on cash and cash equivalents Cash and cash equivalents at end of the year [Note 14] Notes: (3438.27) (158.10) (167.21) (423.34) (459.89) (3091.42) (4216.95) 87.93 49.65 (612.58) (i) The consolidated financial statements incorporate the financial statements of the Parent Company and its subsidiaries. For this purpose, an entity which is, directly or indirectly, controlled by the Parent Company is treated as subsidiary. The Parent Company together with its subsidiaries constitute the Group. Control exists when the Parent Company, directly or indirectly, has power over the investee, is exposed to variable returns from its involvement with the investee and has the ability to use its power to affect its returns. (808.09) (2871.15) (32794.99) (24356.65) 27940.93 23125.43 (26.55) (2253.33) 10.31 9.65 (10000.00) 1. 357.40 Dividends paid M. Warranty and other related obligation Exchange difference on items grouped under financing/investing activities 41.00 (41.00) 22.24 22.24 22.24 (12.17) 455.98 (443.81) 136.62 9.56 136.62 ---- (4216.95) (855.16) (5072.11) 66.81 66.81 7.46 74.27 282.44 335.11 (4216.95) 50.56 9.56 (6.25) 13.14 110.34 97.94 14241.27 103286.12 13059.11 2487.99 15547.10 235.70 171.71 407.41 13294.81 2659.70 15954.51 (8770.19) - (1223.56) 9.56 - (2253.33) (2253.33) (26.55) (26.55) - (9993.75) (2253.33) (26.55) 6.25 25 (9993.75) 13073.39 550.54 4231.56 79489.69 274.34 Particulars A. Cash flow from operating activities: Profit before exceptional items and tax Adjustments for: Dividend received Depreciation, amortisation, impairment and obsolescence 2023-24 crore 2022-23 20423.50 16973.04 Consolidated Statement of Cash Flows for the year ended March 31, 2024 (208.49) 3682.33 3502.25 (20.53) (1.83) Effect of exchange rate changes on cash and cash equivalents (2.37) (66.92) Finance costs 3545.85 (6.28) 790.67 Consolidated Statement of Cash Flows 529 8.12 71.28 86084.31 16190.42 102274.73 In terms of our report attached For DELOITTE HASKINS & SELLS LLP Chartered Accountants Firm's Registration No. 117366W/W-100018 by the hand of RUPEN K. BHATT LARSEN & TOUBRO Partner Mumbai, May 8, 2024 S. N. SUBRAHMANYAN Chairman & Managing Director (DIN 02255382) R. SHANKAR RAMAN Whole time Director & Chief Financial Officer (DIN 00019798) SIVARAM NAIR A Company Secretary & Compliance Officer Membership No. FCS3939 P. R. RAMESH Independent Director (DIN 01915274) Membership No. 046930 97.94 137.15 273.77 13.14 Items of Other comprehensive income Reserves and surplus crore Balance as at 31-3-2024 divestment/acquisition Increase in non-controlling interest due to dilution/ Dividend paid (including special dividend) Employee share options (net) Transfer from/(to) retained earning Transfer to non-financial assets/liabilities Transfer on account of exercise of employee share options Issue of equity shares on exercise of employee share options Amount transferred to capital redemption reserve upon buyback Expenses for buyback of equity shares (net of tax) Debt Equity instruments instruments Tax on buyback of equity shares Total comprehensive income for the year (c+d) Other comprehensive income for the year (d) Profit for the year (c) Balance as at 1-4-2023 Particulars Statements Reports Financial Statutory Integrated Report Discussion and Analysis Management Corporate Overview 110.34 Buyback of equity shares Capital Consolidated Statement of Changes in Equity for the year ended March 31, 2024 (contd.) Employee 14.28 Capital redemption 13059.11 71.28 89044.85 (89.82) 141.76 467.09 8770.19 282.44 328.86 income income hensive hensive reserve compre- 3775.58 74519.94 777.53 Total compre- reserve Securities share Statutory premium Retained options (net) reserves Foreign currency earnings translation reserve through Other through Total other Other equity reserve Non- controlling interests Hedging 0.36 405.31 Leased out Sub-total 0.51 0.02 0.49 0.67 0.67 158.24 256.84 63.03 0.36 6.69 43.48 0.32 402.54 74.51 445 7.45 64.60 64.60 244.30 || Ships 75.18 I 404.64 164.29 85.54 13.84 71.70 249.83 1383 22.13 264.26 7.45 5.38 Aircraft Other assets 158.24 244.30 63.54 6.69 43.50 0.32 257.33 402.54 244.45 Owned 481.06 145.09 171.34 Furniture and fixtures Owned 0.13 39.77 (0.30) 5.49 Leased out ༄' 34.69 14.36 491.46 0.12 63.02 (0.28) 4.21 32.52 353.29 0.24 137.93 14.36 286.39 318.74 0.02 171.32 ཎྱ' 0.24 360.49 32.52 4.21 (0.28) 63.02 0.12 325.94 505.82 34.69 5.49 (0.30) 39.77 0.13 495.42 Sub-total 7.16 7.20 7.20 3.50 12.67 544.28 0.01 Vehicles 71.02 1.93 92.12 0.13 0.13 49.91 358.23 0.16 183.77 49.91 955.65 1076.28 Total Integrated Annual Report 2023-24 127.35 * Transfer within property, plant and equipment and Transfer (to) / from investment property 2949.09 Add: Capital work-in-progress 11336.28 242.22 10876.72 411.88 1044.16 878.08 1.92 118.20 14285.37 351.32 878.08 54.76 299.72 29.54 329.26 353.81 Breakwater structures 233.43 233.43 49.38 5.01 54.39 2031.93 179.04 469.52 125.28 1.96 54.76 542.00 56.69 Sub-total 1922.24 162.49 1.96 Leasehold Improvements 1.92 184.05 49.38 17.62 2598.76 21.85 20200.81 Total 0.99 1.93 0.99 ידהה 78.92 75.77 1844.26 51.41 419.05 Leasehold Improvements 233.43 Breakwater structures 683.07 related assets Shiplift, marine structures and 194.27 I Sub-total 459.59 1338 683.07 383.35 299.72 88811 52.96 1.16 1828.30 0.58 117.44 0.58 46.94 5.01 6111 19.49 9386.69 22455.22 761.98 1922.24 305.72 469.52 44.37 233.43 30.55 269.17 21.10 70.56 5194.01 481.84 10.34 750.19 12379.63 208.34 13297.64 Add: Capital work-in-progress 2897.04 16194.68 NOTE [2] * Transfer within property, plant and equipment and Transfer (to) / from investment property 0.79 547 Report Reports Statutory Financial Statements 548 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [2] (contd.) LARSEN & TOUBRO Consolidated Financial Statements Notes forming part of the Integrated Cost 2241.97 873.83 25885.61 217.90 34.92 (4.23) 1752.42 0.02 8941.57 Owned Plant & equipment 3248.63 215.34 10876.72 1159.55 5.79 3.19 160.66 1005.73 4623.52 22.32 22455.22 4300.74 (9.81) 13.29 15.82 10506.80 Depreciation crore 145.69 (0.06) 145.63 12.82 1.70 14.52 131.11 Sub-total 1002.33 0.06 leasehold (0.06) 1000.90 12.82 1.70 14.52 986.38 Buildings 4485.56 119.38 22.16 18.74 1.43 Impairment 855.27 1.43 Book value Foreign Foreign Class of assets As at 1-4-2022 Business combination Additions Transfer* currency Deductions fluctuation As at 31-3-2023 Up to 31-3-2022 855.27 Business combination Transfer* currency Deductions fluctuation Up to 31-3-2023 Up to 31-3-2023 As at 31-3-2023 Land Freehold 856.64 0.06 For the year 4989.06 0.02 1014.14 0.16 94.29 1.05 630.37 Owned Office equipment 832.99 1620.56 87.77 2.61 910 (0.11) 18.14 1347.04 2453.55 91.83 4.13 (0.11) 448.69 20.29 2072.38 Sub-total 340.65 6.27 4.05 14.31 715.63 14.31 105 4.05 0.16 94.29 1.05 630.39 Sub-total - 105 0.02 Leased out 0.01 544.28 12.67 3.50 0.16 70.56 0.89 481.84 715.61 0.02 6.27 6.27 6.27 10831.02 217.90 34.92 (4.23) 1753.05 0.02 9265.16 Sub-total 102.64 221.58 683.07 16.63 324.22 0.63 323.59 Leased out 4646.81 26.63 5833.36 197.64 29.58 (1.80) 204.95 0.02 1030.77 (1.80) Leased out 832.99 1614.29 87.77 2.61 (0.11) 340.65 18.14 1340.77 2447.28 91.83 4.13 (0.11) 448.69 20.29 2066.11 Owned Computers 4749.45 26.63 6054.94 197.64 29.58 0.89 683.07 351.32 Shiplift, marine structures period on a straight-line basis. The amount recognised as expense in each year is arrived at based on the number of grants expected to vest. If a grant lapses after the vesting period, the cumulative discount recognised as expense in respect of such grant is transferred to the retained earnings. The share-based payment equivalent to the fair value as on the date of grant of employee stock options granted to key managerial personnel is disclosed as a related party transaction in the year of grant. The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share. (y) Foreign currencies (i) (ii) The functional currency and presentation currency of the Group is Indian Rupee. Functional currency of the Group and foreign operations has been determined based on the primary economic environment in which the Group and its foreign operations operate considering the currency in which funds are generated, spent and retained. Transactions in currencies other than the Group's functional currency are recorded on initial recognition using the exchange rate at the transaction date. At each Balance Sheet date, foreign currency monetary items are reported at the closing spot rate. Non- monetary items that are measured in terms of historical cost in foreign currency are not translated. Exchange differences that arise on settlement of monetary items or on reporting of monetary items at each Balance Sheet date at the closing spot rate are recognised in the Statement of Profit and Loss in the period in which they arise except for: A. exchange differences on foreign currency borrowings relating to assets under construction for future productive use, are included in the cost of those assets when such exchange differences are regarded as an adjustment to finance costs on those foreign currency borrowings; B. exchange differences on transactions entered into to hedge certain foreign currency risks; and C. exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur or included in the net investment in foreign operation and are recognised initially in other comprehensive income and reclassified from equity to profit or loss on repayment of the monetary items. (iii) Exchange rate as of the date on which the non-monetary asset or non-monetary liability is recognised on payment or receipt of advance consideration is used for initial recognition of related asset, liability, expense or income. (iv) Financial statements of foreign operations whose functional currency is different than Indian Rupee are translated into Indian Rupee as follows: Material Accounting Policy Information (contd.) A. B. income and expenses are translated at average exchange rate for the reporting period; and C. all resulting exchange differences are recognised in other comprehensive income and accumulated in equity as foreign currency translation reserve for subsequent reclassification to profit or loss on disposal of such foreign operations. The portion of foreign currency translation reserve attributed to non-controlling interests is reflected as part of non-controlling interests. (z) Accounting and reporting of information for Operating Segments Operating segments are those components of the business whose operating results are regularly reviewed by the chief operating decision making body in the Group to make decisions for performance assessment and resource allocation. The reporting of segment information is the same as provided to the management for the purpose of the performance assessment and resource allocation to the segments. Segment accounting policies are in line with the accounting policies of the Group. In addition, the following specific accounting policies have been followed for segment reporting: Segment revenue includes sales and other operational revenue directly identifiable with/allocable to the segment including (a) inter-segment revenue and (b) profit on sale of business undertaking/stake in the subsidiary and/or joint venture companies under development projects segment and realty business grouped under "Others" segment. (ii) Expenses that are directly identifiable with/allocable to segments are considered for determining the segment result. In respect of (a) Financial Services segment and (b) Development Projects segment relating to power generation asset given on finance lease, the finance costs on borrowings are accounted as segment expenses. (iii) Most of the common costs are allocated to segments mainly on the basis of the respective segment revenue estimated at the beginning of the reporting period. (iv) Income not allocable to segments is included in "Unallocable corporate income net of expenditure". 544 Integrated Annual Report 2023-24 and related assets assets and liabilities are translated at the closing rate at the date of that Balance Sheet; NOTE [1](II) Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements NOTE [1](II) Material Accounting Policy Information (contd.) (s) Inventories Inventories are valued after providing for obsolescence, as under: (i) Raw materials, components, construction materials, stores, spares and loose tools at lower of weighted average cost or net realisable value. However, these items are considered to be realisable at cost if the finished products in which they will be used, are expected to be sold at or above cost. (ii) Manufacturing work-in-progress at lower of weighted average cost including related overheads or net realisable value. In some cases, manufacturing work-in-progress are valued at lower of specifically identifiable cost or net realisable value. In the case of qualifying assets, cost also includes applicable borrowing costs vide policy relating to borrowing costs. (iii) Finished goods and stock-in-trade (in respect of goods acquired for trading) at lower of weighted average cost or net realisable value. Cost includes costs of purchases, costs of conversion and other costs incurred in bringing the inventories to their present location. Taxes which are subsequently recoverable from taxation authorities are not included in the cost. (iv) Completed property/work-in-progress (including land) in respect of property development activity at lower of specifically identifiable cost or net realisable value. Assessment of net realisable value is made at each reporting period end and when the circumstances that previously caused inventories to be written-down below cost no longer exist or when there is clear evidence of an increase in net realisable value because of changed economic circumstances, the write-down, if any, in the past period is reversed to the extent of the original amount written-down so that the resultant carrying amount is the lower of the cost and the revised net realisable value. (t) Cash and bank balances Cash and bank balances include fixed deposits, margin money deposits, earmarked balances with banks and other bank balances which have restrictions on repatriation. Short term and liquid investments being subject to more than insignificant risk of change in value, are not included as part of cash and bank balances. (u) Securities premium (i) Securities premium includes: A. The difference between the face value of the equity shares and the consideration received in respect of shares issued. B. The fair value of the stock options which are treated as expense, if any, in respect of shares allotted pursuant to Stock Options Scheme. (ii) The issue expenses of securities which qualify as equity instruments are written off against securities premium. (v) Earnings per share Basic earnings per share is computed using the net profit or loss after tax for the year attributable to the equity shareholders and weighted average number of shares outstanding during the year. Diluted earnings per share is computed using the net profit or loss after tax for the year attributable to the shareholders and weighted average number of equity and potential equity shares outstanding during the year, except where the result would be anti-dilutive. (w) Borrowing Costs Borrowing costs include finance costs calculated using the effective interest method, finance charges in respect of assets acquired on lease and exchange differences arising on foreign currency borrowings, to the extent they are regarded as an adjustment to finance costs. In cases where hedging instruments are acquired for protection against exchange rate risk related to borrowings and are accounted as hedging a time-period related hedge item, the borrowing costs also include the amortisation of premium element of the forward contract and foreign currency basis spread as applicable, over the period of the hedging instrument. Borrowing costs net of any investment income from the temporary investment of related borrowings that are attributable to the acquisition, construction or production of a qualifying asset are capitalised/inventorised as part of cost of such asset till such time the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognised in profit or loss in the period in which they are incurred. (x) Share-based payment arrangements The stock options granted to employees in terms of the Group's Stock Options Schemes, are measured at the fair value of the options at the grant date. The fair value of the options is treated as discount and accounted as employee compensation cost over the vesting 543 LARSEN & TOUBRO Management Discussion and Analysis Notes forming part of the Consolidated Financial Statements (contd.) Integrated Financial (ii) a present obligation arising from past events where: • it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or the amount of the obligation cannot be measured with sufficient reliability. Contingent assets are disclosed where an inflow of economic benefits is probable. Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date. Where the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under such contract, the present obligation under the contract is recognised and measured as a provision. (ac) Commitments Commitments are future liabilities for contractual expenditure, classified and disclosed as follows: a) estimated amount of contracts remaining to be executed on capital account and not provided for; b) uncalled liability on shares and other investments partly paid; c) Material Accounting Policy Information (contd.) funding related commitment to associate and joint venture companies; and other non-cancellable commitments, if any, to the extent they are considered material and relevant in the opinion of management. Other commitments related to sales/procurements made in the normal course of business are not disclosed to avoid excessive details. (ad) Discontinued Operations and non-current assets held for sale Discontinued operation is a component of the Group that has been disposed of or classified as held for sale and represents a major line of business. Non-current assets and disposal groups are classified as held for sale if their carrying amount is intended to be recovered principally through a sale (rather than through continuing use) when the asset (or disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sale of such asset (or disposal group) and the sale is highly probable and is expected to qualify for recognition as a completed sale within one year from the date of classification. Non-current assets and disposal groups classified as held for sale are measured at lower of their carrying amount and fair value less costs to sell. (ae) Statement of Cash Flows Statement of Cash Flows is prepared segregating the cash flows into operating, investing and financing activities. Cash flow from operating activities is reported using indirect method adjusting the profit before tax excluding exceptional items for the effects of: i. changes during the period in inventories and operating receivables and payables, transactions of a non-cash nature; ii. non-cash items such as depreciation, provisions, unrealised foreign currency gains and losses; and iii. all other items for which the cash effects are investing or financing cash flows. Cash and cash equivalents (including bank balances) shown in the Statement of Cash Flows exclude items which are not available for general use as at the date of Balance Sheet. (af) Key sources of estimation d) NOTE [1](II) Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements Report Reports Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [1](II) Material Accounting Policy Information (contd.) (v) Segment result represents profit before interest and tax and includes margins on inter-segment capital jobs, which are reduced in arriving at the profit before tax of the Group. It also includes the finance costs incurred on interest bearing advances with corresponding credit included in "Unallocable corporate income net of expenditure". Segment result are not adjusted for any exceptional item. (vi) Segment assets and liabilities include those directly identifiable with the respective segments. In respect of (a) Financial Services segment, and (b) Development Projects segment relating to power generation asset given on finance lease, segment liabilities include borrowings as the finance costs on the borrowings are accounted as segment expenses. Investment in joint ventures and associates identified with a particular segment are reported as part of the segment assets of those respective segments. Unallocable corporate assets and liabilities represent the assets and liabilities that relate to the Group as a whole. (vii) Segment non-cash expenses forming part of segment expenses also includes the fair value of the employee stock options which is accounted as employee compensation cost [Note 1(x) above] and is allocated to the segment. (viii) Segment revenue resulting from transactions with other business segments is accounted on the basis of transfer price which are either determined to yield a desired margin or agreed on a negotiated basis (aa) Taxes on income Tax on income for the current period is determined on the basis of taxable income (or on the basis of book profits wherever minimum alternate tax is applicable) and tax credits computed in accordance with the provisions of the applicable tax laws, and using estimates and judgments based on the expected outcome of assessments/appeals and the relevant rulings in the areas of allowances and disallowances. Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the Group's financial statements and the corresponding tax bases used in computation of taxable profit and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date. Deferred tax liabilities are generally recognised for all taxable temporary differences including the temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets relating to unabsorbed depreciation/business losses/losses under the head "capital gains"/other temporary differences are recognised and carried forward to the extent of available taxable temporary differences or where there is convincing other evidence that sufficient future taxable income will be available against which such deferred tax assets can be realised. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets in respect of unutilised tax credits which mainly relate to minimum alternate tax are recognised, to the extent it is probable that such unutilised tax credits will get realised, in the period in which such determination is made. Transaction or event which is recognised outside profit or loss, either in Other comprehensive income or in equity or in case of business combination, is recorded along with the tax as applicable. (ab) Provisions, contingent liabilities and contingent assets Provisions are recognised only when: (i) the Group has a present obligation (legal or constructive) as a result of a past event; and (ii) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and (iii) a reliable estimate can be made of the amount of the obligation. Provision is measured using the cash flows estimated to settle the present obligation and when the effect of time value of money is material, the carrying amount of the provision is the present value of those cash flows. Reimbursement expected in respect of expenditure required to settle a provision is recognised only when it is virtually certain that the reimbursement will be received. Contingent liability is disclosed in case of: (i) a possible obligation arising from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity; or 545 LARSEN & TOUBRO Statutory Statements Reports Report NOTE [1](II) Material Accounting Policy Information (contd.) Lease payments associated with following leases are recognised as expense on straight-line basis: (i) Low value leases; and (ii) Leases which are short term. Assets given on lease are classified either as operating lease or as finance lease. A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset. Asset held under finance lease is initially recognised in balance sheet and presented as a receivable at an amount equal to the net investment in the lease. Finance income is recognised over the lease term, based on a pattern reflecting a constant periodic rate of return on Groups' net investment in the lease. A lease which is not classified as a finance lease is an operating lease. The Group recognises lease payments in case of assets given on operating leases as income on a straight-line basis. The Group presents underlying assets subject to operating lease in its balance sheet under the respective class of asset. When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sublease separately. The sublease is classified as a finance or operating lease by reference to the right-of-use asset arising from the head lease. In case of sale and leaseback transactions, the Group first considers whether the initial transfer of the underlying asset to the buyer- lessor is a sale by applying the requirements of Ind AS 115. If the transfer qualifies as a sale and the transaction is at market terms, the Group effectively derecognises the asset, recognises a ROU asset (and lease liability) and recognises in Statement of Profit and Loss, the gain or loss relating to the buyer-lessor's rights in the underlying asset. (Also refer to policy on Property, Plant and Equipment above) (r) Financial instruments Financial assets and/or financial liabilities are recognised when the Group becomes party to a contract embodying the related financial instruments. All financial assets, financial liabilities and financial guarantee contracts are initially measured at fair value excepting for trade receivables not containing a significant financing component are initially measured at transaction price. Transaction costs that are attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from, as the case may be, the fair value of such financial assets or liabilities on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised in profit or loss. Notes forming part of the Consolidated Financial Statements (contd.) A financial asset and a financial liability is offset and presented on net basis in the balance sheet when there is a current legally enforceable right to set-off the recognised amounts and it is intended to either settle on net basis or to realise the asset and settle the liability simultaneously. (i) Financial assets A. All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, as follows: 1. Investments in debt instruments that are designated as fair value through profit or loss (FVTPL) - at fair value 2. Other investments in debt instruments – at amortised cost (unless the same are designated as fair value through profit or loss), subject to following conditions: • The asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and 3. 4. The contractual terms of instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Debt instruments that meet the following conditions are subsequently measured at fair value through other comprehensive income [FVTOCI] (unless the same are designated as fair value through profit or loss) 540 Notes forming part of the Consolidated Financial Statements LARSEN & TOUBRO 539 Corporate Overview Management Discussion and Analysis Integrated Statutory Financial Report Reports Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [1](II) Material Accounting Policy Information (contd.) (ii) Post-employment benefits: A. Defined contribution plans: The Group's superannuation scheme, state governed provident fund scheme, employee state insurance scheme social security contributions and employee pension scheme are defined contribution plans. The contribution paid/payable under the schemes is recognised during the period in which the employee renders the service. B. Defined benefit plans: The employees' gratuity fund schemes and employee provident fund schemes managed by board of trustees established by the Group, the post-retirement medical care plan and the Parent Company pension plan represent defined benefit plans. The present value of the obligation under defined benefit plans is determined based on actuarial valuation using the Projected Unit Credit Method. The obligation towards defined benefit plans is measured at the present value of the estimated future cash flows using a discount rate based on the market yield on government securities of a maturity period equivalent to the weighted average maturity profile of the defined benefit obligations at the Balance Sheet date. Re-measurement, comprising actuarial gains and losses, the return on plan assets (excluding amounts included in net interest on the net defined benefit liability or asset) and any change in the effect of asset ceiling (if applicable) is recognised in other comprehensive income and is reflected in retained earnings and the same is not eligible to be reclassified to profit or loss. Defined benefit costs comprising current service cost, past service cost and gains or losses on settlements are recognised in the Statement of Profit and Loss as employee benefits expense. Interest cost implicit in defined benefit employee cost recognised in the Statement of Profit and Loss under finance costs. Gains or losses on settlement of any defined benefit plan are recognised when the settlement occurs. Past service cost is recognised as expense at the earlier of the plan amendment or curtailment and when the Group recognises related restructuring costs or termination benefits. In case of funded plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans to recognise the obligation on a net basis. (iii) Other long-term employee benefits: The obligation recognised in respect of other long-term benefits is measured at present value of estimated future cash flows expected to be made by the Group and is recognised in a similar manner as in the case of defined benefit plans vide (ii) B above. Long term employee benefit costs comprising current service cost and gains or losses on curtailments and settlements, re-measurements including actuarial gains and losses are recognised in the Statement of Profit and Loss as employee benefits expenses. Interest cost implicit in long term employee benefit cost is recognised in the Statement of Profit and Loss under finance cost. (iv) Termination benefits: Termination benefits such as compensation under employee separation schemes are recognised as expense when the Group's offer of the termination benefit can no longer be withdrawn or when the Group recognises the related restructuring costs, whichever is earlier. (q) Leases Assets taken on lease are accounted as right-of-use assets and the corresponding lease liability is recognised at the lease commencement date. Initially the right-of-use asset is measured at cost which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, as reduced by any lease incentives received. The lease liability is initially measured at the present value of the lease payments, discounted using the Group's incremental borrowing rate. It is remeasured when there is a change in future lease payments arising from a change in an index or a rate, or a change in the estimate of the guaranteed residual value, or a change in the assessment of purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero. The right-of-use asset is measured by applying cost model i.e. right-of-use asset at cost less accumulated depreciation and impairment losses, if any. The right-of-use asset is depreciated using the straight-line method from the commencement date to the end of the lease term or useful life of the underlying asset whichever is earlier. Carrying amount of lease liability is increased by interest on lease liability and reduced by lease payments made. The asset is held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets; and The contractual terms of instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Debt instruments at FVTPL is a residual category for debt instruments, if any, and all changes are recognised in profit or loss. Integrated Annual Report 2023-24 541 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [1](II) Material Accounting Policy Information (contd.) (ii) Financial liabilities A. B. Financial liabilities, including derivatives and embedded derivatives, which are designated for measurement at FVTPL are subsequently measured at fair value. Financial guarantee contracts are subsequently measured at the amount of impairment loss allowance or the amount recognised at inception net of cumulative amortisation, whichever is higher. All other financial liabilities including loans and borrowings, trade and other payables are initially recognised at fair value and subsequently measured at amortised cost using Effective Interest Rate (EIR) method. A financial liability is derecognised when the related obligation expires or is discharged or cancelled. (iii) The Group designates certain hedging instruments such as derivatives, embedded derivatives and in respect of foreign currency risk, certain non-derivatives as either fair value hedges, cash flow hedges, or hedges of net investments in foreign operations. Hedges of foreign exchange risk on firm commitments are accounted as cash flow hedges. A. Fair value hedges: Changes in fair value of the designated portion of derivatives that qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. The fair value adjustment to the carrying amount of the hedged item arising from the hedged risk is amortised to profit or loss from that date. B. Cash flow hedges: In case of transaction related hedges, the effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in other comprehensive income and accumulated in equity as 'hedging reserve'. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss. Amounts previously recognised in other comprehensive income and accumulated in equity relating to the effective portion are reclassified to profit or loss in the periods when the hedged item affects profit or loss, in the same head as the hedged item. The effective portion of the hedge is determined at the lower of the cumulative gain or loss on the hedging instrument from inception of the hedge and the cumulative change in the fair value of the hedged item from the inception of the hedge and the remaining gain or loss on the hedging instrument is treated as ineffective portion. In case of time period related hedges, the premium element and the spot element of a forward contract is separated and only the change in the value of the spot element of the forward contract is designated as the hedging instrument. Similarly, wherever applicable, the foreign currency basis spread is separated from the financial instrument and is excluded from the designation of that financial instrument as the hedging instrument in case of time period related hedges. The changes in the fair value of the premium element of the forward contract or the foreign currency basis spread of the financial instrument is accumulated in a separate component of equity as 'cost of hedging reserve'. The changes in the fair value of such premium element or foreign currency basis spread are reclassified to profit or loss as a reclassification adjustment on a straight-line basis over the period of the forward contract or the financial instrument. The cash flow hedges are allocated to the forecast transactions on gross exposure basis. Where the hedged forecast transaction results in the recognition of a non-financial asset, such gains/losses are transferred from hedge reserve (but not as reclassification adjustment) and included in the initial measurement cost of the non-financial asset. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. Any gain or loss recognised in other comprehensive income and accumulated in equity at that time remains in equity and is recognised in profit or loss when the forecast transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognised in profit or loss. (iv) Compound financial instruments issued by the Group which can be converted into fixed number of equity shares at the option of the holders irrespective of changes in the fair value of the instrument are accounted by recognising the liability and the equity components separately. The liability component is initially recognised at the fair value of a comparable liability that does not have an equity conversion option. The equity component is initially recognised at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. The directly attributable transaction costs are allocated to the liability and the equity components in proportion to their initial carrying amounts. Subsequent to initial recognition, the liability component of the compound financial instrument is measured at amortised cost using the effective interest method. The equity component of a compound financial instrument is not remeasured subsequently. 542 Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Statutory Financial When making the assessment of whether there has been a significant increase in credit risk since initial recognition, the change in the risk of a default occurring over the expected life of the financial instrument is used instead of the change in the amount of expected credit losses. To make that assessment, the risk of a default occurring on the financial instrument as at the reporting date is compared with the risk of a default occurring on the financial instrument as at the date of initial recognition using reasonable and supportable information, that is available without undue cost or effort. The preparation of financial statements in conformity with Ind AS requires that the management of the Group makes estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. The estimates and underlying assumptions made by the management are explained under respective policies. Revisions to accounting estimates include useful life of property, plant and equipment & intangible assets, allowance for expected credit loss, future obligations in respect of retirement benefit plans, expected cost of completion of contracts, provision for rectification costs, fair value/recoverable amount measurement etc. Difference, if any, between the actual results and estimates is recognised in the period in which the results are known. The loss allowance for a financial instrument is measured at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition. If the credit risk on a financial instrument has not increased significantly since initial recognition, the loss allowance for that financial instrument is measured at an amount equal to 12-month expected credit losses. 12-month expected credit losses are portion of the lifetime expected credit losses and represent the lifetime cash shortfalls that will result if default occurs within the 12 months weighted by the probability of default after the reporting date and thus, are not cash shortfalls that are predicted over the next 12 months. • Corporate Overview Management Discussion and Analysis Integrated Statutory Financial Report Reports Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [1](II) Material Accounting Policy Information (contd.) B. C. 5. 6. 7. Investments in equity instruments are classified as FVTPL, unless the related instruments are not held for trading and the Group irrevocably elects on initial recognition to present subsequent changes in fair value in other comprehensive income. Trade receivables, security deposits, cash and cash equivalents, employee and other advances - at amortised cost. The Group has elected to measure the investments in associates and joint ventures held through unit trusts at FVTPL. For financial assets that are measured at FVTOCI, income by way of interest and dividend, provision for impairment and exchange difference, if any, (on debt instrument) are recognised in profit or loss and changes in fair value (other than on account of above income or expense) are recognised in other comprehensive income and accumulated in other equity. On disposal of debt instruments at FVTOCI, the cumulative gain or loss previously accumulated in other equity is reclassified to profit or loss. In case of equity instruments at FVTOCI, such cumulative gain or loss is not reclassified to profit or loss on disposal of investments. A financial asset is primarily derecognised when: D. 1. the right to receive cash flows from the asset has expired, or 2. the group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a pass-through arrangement; and a) the group has transferred substantially all the risks and rewards of the asset, or b) the group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. On derecognition of a financial asset in its entirety, the difference between the carrying amount at the date of derecognition and the consideration received is recognised in profit or loss. Impairment of financial assets: The Group recognises impairment loss on trade receivables using expected credit loss model which involves use of a provision matrix constructed on the basis of historical credit loss experience as permitted under Ind AS 109 and is adjusted for forward looking information. For all other financial assets, expected credit losses (ECL) are recognised based on the difference between the contractual cashflows and all the expected cash flows, discounted at the original effective interest rate. ECLs are measured at an amount equal to 12-month expected credit losses or at an amount equal to lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. In respect of financial services business, the Group applies a separate model of the expected credit loss for recognising impairment loss on financial assets measured at amortised cost, debt instruments at FVTOCI, lease receivables, trade receivables and other contractual rights to receive cash or other financial asset and financial guarantees not designated as at FVTPL as follows: Expected credit losses are the weighted average of credit losses with the respective risks of default occurring as the weights. Credit loss is the difference between all contractual cash flows that are due to the Group in accordance with the contract and all the cash flows that the Group expects to receive (i.e. all cash shortfalls), discounted at the original effective interest rate (or credit-adjusted effective interest rate for purchased or originated credit-impaired financial assets). The Group estimates cash flows by considering all contractual terms of the financial instrument (for e.g. prepayment, extension, call and similar options) through the expected life of that financial instrument. NOTE [1] (III) Corporate Overview There are no standards of accounting or any addendum thereto, prescribed by Ministry of Corporate Affairs under section 133 of the Companies Act, 2013, which are issued and not effective as at March 31, 2024. 569.05 784.93 784.93 192.55 Leased out 0.02 0.02 0.02 Sub-total 715.63 105.76 (18.61) 43.23 1.05 761.62 544.28 76.37 (9.22) 0.85 43.23 569.05 192.57 Furniture and fixtures Owned 491.46 178.88 42.21 0.85 (9.22) 76.37 Leased out 6.27 6.27 6.27 - 6.27 Sub-total 2453.55 291.97 1.55 169.15 2577.92 1620.56 338.20 1.09 166.86 1792.99 I Office equipment Owned 715.61 105.76 (18.61) 1.05 42.21 761.60 544.28 0.91 I 53.05 353.29 381.89 0.06 250.61 1.06 59.42 231.05 176.50 Other assets Aircraft 249.83 0.09 Ships 44.02 286.39 | | 249.92 85.54 14.80 323.51 92.12 21.31 | | 100.34 149.58 113.43 210.08 37.12 0.82 7.16 7.20 64.60 Recent Pronouncement 14.36 14.36 7.20 Sub-total 505.82 178.88 0.91 53.05 632.56 360.49 64.60 Vehicles 402.54 72.74 1.27 69.00 407.55 244.30 45.11 | | | | 0.82 44.02 374.69 0.06 243.45 618.20 1786.72 Leased out 1.09 Freehold 855.27 0.71 (1.67) 0.08 854.23 854.23 leasehold 145.63 145.63 14.52 1.59 Land 16.11 Sub-total 1000.90 0.71 (1.67) 0.08 999.86 14.52 1.59 16.11 983.75 Buildings 4623.52 129.52 31-3-2024 Up to 31-3-2024 Up to 31-3-2024 166.86 546 Integrated Annual Report 2023-24 Notes forming part of the Consolidated Financial Statements (contd.) Property, Plant and Equipment and Capital work-in-progress crore Corporate Overview Management Discussion and Analysis Cost Depreciation Impairment Book value Foreign Foreign Class of assets As at Additions Transfer* 1-4-2023 currency Deductions fluctuation As at 31-3-2024 Up to For the Transfer* 31-3-2023 year currency Deductions fluctuation 1,319.07 1.51 As at 39.95 10831.02 2169.12 8.96 6.11 445.63 12569.58 221.58 6054.94 13.38 154.75 80.21 1,386.56 8.70 5.27 378.78 7076.69 22.64 5470.26 Computers Owned 2447.28 291.97 1.55 169.15 2571.65 1614.29 0.44 338.20 Sub-total 146.60 66.39 177.62 5904.59 1159.55 202.17 1.31 1.12 7.95 1356.20 185.64 4362.75 Plant & equipment 10506.80 2169.12 8.96 6.11 Owned 12422.98 324.22 Leased out 268.01 22.64 6996.48 224.04 5403.86 8.70 1,373.18 5833.36 5.27 2119.03 109.20 47259.84 132.86 104.49 21.87 2.52 101.19 54.58 Credit impaired 48749.46 1104.20 10.39 48785.63 4075.09 44710.54 2796.48 10.30 As at 31-3-2023 1.74 10655.35 27634.95 Total More than 3 years 2-3 years 1-2 years Less than 6 months - 6 months 1 year Not due Outstanding for following periods from due date of payment Disputed: 53103.21 4353.75 - Considered good - Credit impaired 2949.83 1.23 Less: Allowance for expected credit loss As at 31-3-2024 13.67 NOTE [13] - Considered good Current assets: Financial assets - Trade receivables crore As at 31-3-2023 16.14 40.31 6747.58 6210.69 6713.72 7339.40 11387.59 11608.92 699.87 899.67 937.25 2515.31 2694.57 802.08 5760.91 6157.04 34957.63 35573.42 crore Particulars Considered good - secured As at 31-3-2024 As at 31-3-2023 13.05 Considered good - unsecured Undisputed: 7.32 Particulars 1360.25 8.62 2007.31 2.90 2748.51 11.20 12893.57 10.72 Total More than 3 years 2-3 years 1-2 years Less than 6 months - 6 months 1 year Not due crore Outstanding for following periods from due date of payment As at 31-3-2024 Undisputed: Particulars Current assets: Financial assets - Trade receivables ageing NOTE [13][a] Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements LARSEN & TOUBRO 555 44731.53 48770.95 8.44 347.07 339.75 239.90 Less: Allowance for expected credit loss Treasury bills and other investments 248.34 2481.88 50.02 51386.79 83.46 - crore 48770.95 4593.65 Less: Allowance for expected credit loss 53364.60 3914.27 1379.78 2151.21 2760.04 13158.13 30001.17 Gross trade receivables 164.88 164.88 - Credit impaired 1729.47 1217.49 10.91 141.00 0.33 253.84 105.90 · Considered good - Disputed: - Credit impaired - 29895.27 · Considered good - InvITs Particulars Collateral borrowing and lending obligation (CBLO) Advance recoverable other than in cash 554 crore As at 31-3-2024 As at 31-3-2023 1319.17 1139.08 1316.50 1139.76 180.09 176.74 511.75 216.38 311.20 131.94 295.37 475.46 179.26 356.00 crore As at 31-3-2024 As at 31-3-2023 529.65 41.66 499.42 41.82 487.99 457.60 194.91 128.82 478.52 1049.35 757.59 300.43 11.94 Unsecured 27.40 Secured Particulars 478.91 52154.76 454.17 40920.92 553 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [8] Non-current assets: Financial assets - Other loans Particulars Loans and advances to related parties Joint ventures and associates, considered good - unsecured Less: Allowance for expected credit loss Others loans Considered good - unsecured Less: Allowance for expected credit loss NOTE [9] Non-current assets: Financial assets - Others Particulars Security deposits Considered good - unsecured Less: Allowance for expected credit loss Cash and bank balances not available for immediate use Fixed deposits with banks (maturity more than 12 months) Forward contract receivables Embedded derivative receivables Other receivables [1] [1] Mainly includes deferred receivables, lease receivables and recoverable from banks. NOTE [10] Other non-current assets Capital advances: 21.13 1952.08 2.18 1965.78 382.25 347.81 326.81 Finished goods 85.13 98.29 Stock-in-trade (in respect of goods acquired for trading) [include goods-in-transit 53.45 crore (previous year: 39.62 crore)] 228.30 364.92 Stores and spares [include goods-in-transit 2.56 crore (previous year: 3.17 crore)] 299.41 311.90 Loose tools [include goods-in-transit Nil crore (previous year: Nil crore)] ₹ 9.36 10.43 Property development projects (including land) 3932.90 4269.79 6620.19 6828.78 Note: During the year 24.76 crore (previous year 10.74 crore) was recognised as expense towards write-down of inventories (net). NOTE [12] Current assets: Financial assets - Investments Particulars Equity shares Government and trust securities Debentures and bonds Mutual funds 409.75 Construction materials [include goods-in-transit 119.58 crore (previous year: 275.00 crore)] Manufacturing work-in-progress 425.62 466.95 crore As at 31-3-2024 As at 31-3-2023 4.21 76.20 1.47 36.22 80.41 2076.14 2156.55 37.69 2339.69 2377.38 Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Statutory Financial Report Commercial Paper Reports Notes forming part of the Consolidated Financial Statements (contd.) NOTE [11] Current assets: Inventories crore Particulars Raw materials [include goods-in-transit 65.39 crore (previous year: 16.48 crore)] As at 31-3-2024 As at 31-3-2023 1792.00 - Equity instruments 840.58 638.77 Components [include goods-in-transit 12.48 crore (previous year: 10.67 crore)] Statements Credit impaired 2196.86 1742.69 27739.44 Book value As at 31-3-2024 Goodwill on consolidation 7848.57 6.05 5.64 7848.98 48.10 7800.88 crore Cost Class of assets Goodwill on consolidation As at 1-4-2022 Business Combination 7735.09 74.57 Foreign currency fluctuation 38.91 As at 31-3-2023 7848.57 Impairment As at 31-3-2023 49.92 Book value As at 31-3-2023 7798.65 Note: Impairment recognised in the Statement of Profit and Loss during the year: Nil (previous year: Nil). Segment wise Goodwill Particulars Impairment As at 31-3-2024 As at 31-3-2024 Deductions currency fluctuation Total 254.93 Less than 1-2 years 2-3 years 1 year 37.85 More than Total 3 years 172.14 91.82 504.24 806.05 As on the date of balance sheet, there is no capital work-in-progress project(s) whose completion is overdue or has exceeded the cost, based on the approved plan. Integrated Annual Report 2023-24 Corporate Overview Infrastructure Projects Management Discussion and Analysis Statutory Financial Reports Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [4] Goodwill crore Cost Foreign Class of assets As at 1-4-2023 Integrated Report Energy Projects Hi-Tech Manufacturing IT & Technology Services As at 31-3-2024 Fare collection rights 16675.53 12.55 24.02 16664.06 994.53 278.95 Specialised software 1942.79 201.96 9.63 5.83 Book value 2148.55 230.75 9.53 4.74 1273.48 15390.58 1829.84 318.71 Technical know-how 120.66 53.66 174.33 104.34 22.11 126.45 47.87 1594.29 More than 3 years 173.72 Up to 31-3-2024 For the year Development Projects Others Total crore As at 31-3-2024 As at 31-3-2023 121.86 3.82 121.86 4.49 7362.10 208.19 104.24 7800.88 Amortisation Foreign currency Deductions fluctuation 4.49 208.19 104.23 7798.65 The goodwill impairment testing is performed at the level of the cash generating unit which represents the smallest identifiable group of assets that generates independent cash flows. The impairment testing is performed annually or whenever there is an indication that the cash generating unit to which the goodwill has been allocated may be impaired. Refer Note 1 [II](o) for policy on impairment of assets. In determining the value-in-use, cash flow projections approved by appropriate level of management are considered. Key assumptions on which management has based its determination of value-in-use includes estimated growth rates (including terminal growth rates) and discount rates. In circumstances where a reliable value-in-use estimate is difficult to make and market value of the asset or the cash generating unit is readily available, the latter is used for the determination of recoverable amount with appropriate adjustments, as applicable. Cash flow projections are usually considered for next five years except in case of service concession arrangement covering the concession period. Cash flows projections beyond the five-year period are extrapolated using terminal growth rates. NOTE [5] Other Intangible assets and Intangible assets under development crore Cost Foreign Class of assets As at 1-4-2023 Additions currency Deductions fluctuation As at 31-3-2024 Up to 31-3-2023 7356.06 8.32 12.21 60.68 2191.37 crore Cost Depreciation Class of assets Land Buildings Total As at 1-4-2022 1141.00 As at Additions Transfer* Deductions 31-3-2023 254.93 Up to 31-3-2022 As at Impairment As at Book value As at Transfer* Deductions year 31-3-2023 31-3-2023 31-3-2023 0.06 52.28 1088.78 For the 44.39 * Transfer (to)/from property, plant and equipment/inventories 1936.44 Deductions 31-3-2024 31-3-2023 year 31-3-2024 Impairment As at 31-3-2024 Book value As at 31-3-2024 2819.07 (15.84) 36.50 (1.51) 36.50 (17.35) 273.47 372.88 1392.40 646.35 2191.87 799.47 59.98 Add: Capital work-in-progress 12.66 57.77 741.70 199.74 28.04 (0.98) 29.14 197.66 1194.74 259.72 40.70 (0.98) 44.01 255.43 14.87 Trade names 22.55 59.98 (c) Sr. no. Amounts recognised in the Statement of Profit and Loss in respect of investment property: Particulars crore 2023-24 2022-23 1 Rental income derived from investment property 144.64 131.46 2 3 Direct operating expenses arising from investment property that generated rental income Direct operating expenses arising from investment property that did not generate rental income (b) Useful life of building included in investment property: 3 to 60 years 14.12 (d) Fair value of investment property as at March 31, 2024 * 6024.49 crore (previous year: 8157.81 crore). (e) (f) The fair values of investment property have been determined by internal architectural department or independent valuer, as appropriate. Fair value of property that are evaluated by registered independent valuers as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017, amounted to 2855.87 crore. (previous year 968.02 crore). Valuation is based on government rates, market research, market trend and comparable values as considered appropriate. Impairment on capital work-in-progress recognised in the Statement of Profit and Loss during the year is Nil (previous year 112.69 crore). (g) Ageing of Capital work-in-progress crore 550 Particulars Projects in progress As at 31-3-2024 As at 31-3-2023 Less than 1-2 years 2-3 years 1 year 13.05 6.96 (a) Carrying value of Investment property pledged as collateral for liabilities and/or commitments and having restriction on title as at March 31, 2024: Nil (previous year: Nil) * Transfer (to) / from property, plant and equipment/inventories 1028.80 1867.94 8.76 (38.92) 107.49 1730.29 143.03 69.73 (3.40) 9.62 199.74 5.18 1525.37 Notes: 3008.94 (38.86) 159.77 2819.07 187.42 92.28 (3.40) 16.58 259.72 5.18 2554.17 806.05 3360.22 Add: Capital work-in-progress 8.76 Transfer* 306.06 306.14 21.28 10.96 992.10 24.62 80.76 19.01 25.00 4681.34 18007.98 Add: Intangible assets under development 116.48 Notes: 18124.46 (a) Amortisation for the year includes impact of foreign currency fluctuation 0.10 crore (previous year: Nil) and depreciation capitalised 0.30 crore (previous year: 0.30 crore) (b) Details of addition in other intangible assets: Class of assets Fare collection Rights Specialised Software Technical Know-how New Product Design and Development Platforms and Courses Total crore 2023-24 2022-23 Internal development Acquired - external Total Internal development 82.46 12.55 119.50 12.55 3.34 3684.27 25.53 22689.32 30.55 105.38 0.37 Customer contracts and relationship 3376.53 - - 14.45 3390.98 1268.27 319.57 11.67 1599.51 1791.47 Rights under licensing agreement 201.96 128.85 139.70 24.95 22.77 2.62 50.34 89.36 Platforms and Courses 76.91 Total 22413.64 11.45 28.47 259.21 10.85 49.20 Acquired - external 16.17 165.37 Total As on the date of balance sheet, there is no Intangible assets under development whose completion is overdue or has exceeded the cost, based on the approved plan. Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Statutory Financial Report Reports Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [5] (contd.) Notes: 116.48 (1) Borrowing cost capitalised in accordance with Ind AS 23 "Borrowing Cost" is as follows: Capital work-in-progress crore 2023-24 2022-23 Property, plant and equipment - building 52.30 19.47 Total 52.30 19.47 (2) The average borrowing cost used for capitalisation is 7.29% (previous year: 6.68%). NOTE [6] Non-current assets: Financial assets - Other investments Class of Assets 7.85 Total As at 31-3-2023 1-2 years 2-3 years 30.77 16.17 214.57 53.66 53.66 0.73 0.73 16.22 1.21 17.43 98.68 187.65 286.33 28.47 77.67 More than 3 years 181.54 (c) Ageing of Intangible assets under development 552 Particulars Projects in progress crore As at 31-3-2024 Less than 1 year 98.24 1-2 years 2-3 years More than 3 years Total 49.73 147.97 Less than 1 year 85.71 28.47 259.21 0.59 0.32 8.12 22689.32 286.33 15.48 31.35 141.82 122.81 22959.78 50.34 23.46 0.94 24.62 28.03 4681.34 883.95 16.03 Total 6.06 74.74 67.08 52.65 70.17 5575.26 17384.52 Add: Intangible assets under development 147.97 17532.49 551 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [5] (contd.) 21 crore 17.43 Platforms and Courses 305.86 0.28 306.14 New Product Design and Development 8.22 0.73 1.50 7.45 7.85 0.17 1.32 6.70 105.38 0.75 and relationship 3390.98 3.64 3394.62 1599.51 300.48 5.28 1905.27 1489.35 Rights under licensing agreement 139.70 2.12 Customer contracts 0.08 Cost Book value 15681.00 Gross trade receivables 208.08 4.59 24.41 1594.29 348.50 Technical know-how 120.66 120.66 96.65 7.69 104.34 994.53 16.32 305.59 0.47 306.06 172.08 133.65 0.13 305.86 0.20 New Product Design and Development 8.98 0.76 8.22 Trade names Amortisation 278.74 16675.53 1942.79 1395.07 Foreign Foreign Class of assets As at 1-4-2022 Business combination Additions currency fluctuation Deductions As at 31-3-2023 Up to 31-3-2022 Business For the Up to 715.79 As at year currency Deductions fluctuation 31-3-2023 31-3-2023 Fare collection rights 16659.36 16.17 Specialised software 1736.76 11.45 214.57 4.78 24.77 combination Transfer* Deductions 10.96 As at 145.04 137.16 1937.19 1716.13 As at 31-3-2023 As at 31-3-2024 crore Current Assets: Financial Assets - Loans towards financing activities 12.85 NOTE [16] Cash and bank balances not available for immediate use Margin money deposits with others Earmarked balances with banks - others Margin money deposits with banks Earmarked balances with banks - Section 4(2)(1)(D) of RERA[1] Earmarked balances with banks - unclaimed dividend Fixed deposits with banks Particulars Current assets: Financial assets - Other bank balances [1] Real Estate (Regulation and Development) Act, 2016 11.66 175.23 426.44 Less Allowance for expected credit loss Considered good - unsecured 22816.18 14956.91 35.53 1008.63 33.28 330.42 Less Allowance for expected credit loss As at 31-3-2023 23860.34 As at 31-3-2024 15320.61 Less Net fair value changes Considered good - secured Particulars crore 5592.91 351.96 416.91 3399.89 4.23 2716.39 941.61 NOTE [15] 19225.57 726.08 Notes forming part of the Consolidated Financial Statements (contd.) Reports Particulars Current assets: Financial assets - Cash and cash equivalents NOTE [14] 4414.84 Less: Allowance for expected credit loss 214.21 49146.37 1539.46 1254.81 214.21 3697.25 Balance with banks 1169.17 2953.58 10678.96 Contract assets [Note 47(d)(i)] Unbilled revenue Retention money Advance recoverable other than in cash crore As at 31-3-2024 2907.97 Cheques and drafts on hand Cash on hand Fixed deposits with banks (maturity less than 3 months) Report Financial Statutory Integrated Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 16926.69 11958.50 6470.20 2894.45 14.86 7.17 9990.60 451.03 As at 31-3-2023 As at 31-3-2024 8536.70 520.18 crore 44731.53 556 Statements 14836.92 Less Impairment 56.25 As at 31-3-2023 168.31 79.60 106.54 82.84 251.15 557 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements crore Notes forming part of the Consolidated Financial Statements (contd.) Current assets: Financial assets - Others Particulars Security deposits Considered good - unsecured Less: Allowance for expected credit loss Receivables from related parties: Joint ventures Other recoverables NOTE [18] 26.94 As at 31-3-2024 Considered good - unsecured Additions 94.55 Less Net fair value changes 91.83 3425.70 99.79 532.58 1232.50 2793.33 Credit Impaired Less Net fair value changes 427.07 245.13 1633.87 911.09 181.94 34814.59 722.78 40460.55 NOTE [17] Current assets: Financial assets - Other loans Particulars Loans and advances to related parties Considered good - unsecured Others loans Forward contract receivables Unbilled Revenue Embedded derivative receivables Doubtful advances: 158.39 228.45 27.11 192.16 219.27 219.27 5563.92 27.11 327.06 354.17 354.17 4930.10 Particulars Less Allowance for expected credit loss 1418.88 Having significant increase in credit risk 14128.26 18443.24 652.41 56.25 1684.35 As at 31-3-2023 1416.41 407.38 Deferred credit sale of ships Other loans and advances NOTE [19] Other current assets crore As at 31-3-2024 As at 31-3-2023 685.25 541.53 0.76 0.52 684.49 541.01 107.03 152.26 107.03 152.26 2790.22 1759.63 564.40 45930.90 Less: Allowance for expected credit loss 60125.33 4 Computers 5 Office equipment (f) 6 Furniture and fixtures 7 Vehicles Plant and equipment 8 Ships 10 Shiplift, marine structures and related assets and Breakwater structures Ageing of Capital work-in-progress Minimum useful life (in years) Maximum useful life (in years) 1 3 3 2 3 3 3 2 5 2 20 15 99 Aircraft 3 Buildings 2 Less: Reduction on sale of assets Closing Balance crore 2023-24 2022-23 242.22 236.14 6.08 (1.94) (31.94) 208.34 242.22 (d) Owned assets given on operating lease have been presented separately under respective class of assets as "Leased out" in accordance with Ind AS 116 "Leases". (e) Range of useful life of property, plant and equipment is as below: Sr. Class of assets no. 1 Leasehold land 60 Less: Reversal of impairment 35 500 549 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [3] Investment Property crore Cost based on the approved plan. Depreciation Land Buildings Total As at 1-4-2023 1088.78 1730.29 As at Up to 14194.43 For the Class of assets 485.95 Total More than 3 years 15 10 10 18 18 14 50 crore As at 31-3-2024 Particulars Projects in progress Less than 1 year 2209.22 1-2 years 2-3 years 572.91 96.01 More than 3 years Total 93.01 2949.09 As on the date of balance sheet, there is no capital work-in-progress project(s) whose completion is overdue or has exceeded the cost, 18.90 2897.04 As at 31-3-2023 Less than 1-2 years 2-3 years 1 year 2329.75 40.38 7 Add: Foreign currency fluctuation 9 Particulars 27.37 29.49 100.04 9425.94 150.00 7920.03 crore Particulars 6321.07 Considered good - secured As at 31-3-2023 21605.35 Less Allowance for expected credit loss 46.82 51.03 28213.03 21554.32 As at 31-3-2024 28259.85 6769.51 549.16 477.76 Government and trust securities Debentures and bonds Security receipts Units of fund Other investments NOTE [7] Non-current assets: Financial assets - Loans towards financing activities crore As at 31-3-2024 124.31 As at 31-3-2023 316.16 165.24 180.69 1761.71 373.46 Considered good - unsecured 24369.91 Less Allowance for expected credit loss 518.06 4.41 558 Others 0.67 0.67 Opening Balance Less: Allowance for expected credit loss Other loans and advances 14.61 12.12 Government grant receivable 55536.81 10355.98 13367.18 42169.63 10740.44 70882.30 Preference shares 12.99 Integrated Annual Report 2023-24 Less Impairment 1932.39 19617.46 438.35 1932.39 21919.46 17246.72 Having significant increase in credit risk 1870.76 Less Allowance for expected credit loss 327.40 1931.92 266.21 1543.36 1665.71 Credit impaired 2270.91 Less Allowance for expected credit loss 65920.39 Corporate Overview 0.99 0.99 Integrated (b) The cumulative impairment is as below: (c) Depreciation for the year includes impact of foreign currency fluctuation 0.64 crore (previous year: 1.54 crore) and depreciation capitalised 0.16 crore (previous year: 0.06 crore) NOTE [2] (contd.) Notes: Notes forming part of the Consolidated Financial Statements (contd.) Management Discussion and Analysis Statements Reports Report Financial Statutory (a) Carrying value of property, plant and equipment pledged as collateral for liabilities and/or commitments as at March 31, 2024 37.43 crore (previous year: 27.83 crore) i. No. Particulars Sr. The details of the grant under the aforesaid scheme is summarised below: (i) ESOS 2015 2023-24 (A) Employee Stock Option Scheme 2015 (ESOS 2015) Shares are granted to employees at an exercise price of not less than 1 per equity share or such higher price as determined by the Board but shall not exceed the market price as defined in the Regulations. Shares shall vest over such term as determined by the Nomination and Remuneration Committee not exceeding 5 years from the date of the grant. Grant price LTI Mindtree Limited (i) (I) Stock option scheme of subsidiary companies: reserves. Accordingly, the Company has bought back 3,12,50,000 equity shares of face value of 2 each, representing 2.22% of the number of equity shares in the paid-up share capital, at a price of 3,200 per share aggregating to 10000 crore. Consequently, the equity share capital stands reduced by 6.25 crore. The premium on buyback of 9993.75 crore, transaction cost (net of tax) with respect to the buyback of 26.37 crore and the tax on buyback of 2253.33 crore have been adjusted against securities premium account and free (k) Further, during the year ended March 31, 2024, the shareholders approved the proposal of buyback of equity shares of the Company, as recommended by its Board of Directors. The settlement of all valid bids and extinguishment of equity shares bought back were completed on September 28, 2023. On November 30, 2023, the special resolution dated May 22, 2021 passed by erstwhile Mindtree Limited relating to grant of loan to the 'LTIMindtree Employee Welfare Trust' (formerly known as Mindtree Employee Welfare Trust) ('ESOP Trust') with a view to enable the ESOP Trust to subscribe equity shares of the Company for implementation and administration of ESOP 2021 plan, has been partially modified and the shareholders of the Company, through postal ballot, have approved the grant of loan to the ESOP Trust to subscribe equity shares of the Company for administration of ESOP Scheme 2015 along with ESOP 2021 plan, the aggregate value of loan shall not exceed the statutory ceiling of five (5%) percent of the paid-up capital and free reserves of the Company. ₹ 1 iv. Options granted & outstanding at the beginning of the year ii. Grant dates 73,565 1,32,537 ix. Options vested at the end of the year out of (viii) above 9,27,942 6,41,976 29,772 1,60,172 viii. Options granted & outstanding at the end of the year vii. Options lapsed/cancelled during the year 1,35,016 1,56,666 vi. Options exercised during the year 7,66,815 30,872 3,25,915 9,27,942 10-6-2017 onwards 10-6-2016 onwards V. Options granted during the year The Board of Directors, at their meeting held on May 8, 2024 recommended a final dividend of 28 per equity share for the year ended March 31, 2024, subject to approval of shareholders. On approval, the total dividend outgo is expected to be ₹3849.07 crore based on number of shares outstanding as on March 31, 2024. iii. Vesting commences on 2022-23 ₹ 1 (j) Notes forming part of the Consolidated Financial Statements (contd.) NOTE [20] (contd.) i. Weighted average risk-free interest rate No. 2022-23 2023-24 Particulars Sr. Weighted average fair values of options granted during the year is 2314.37 (previous year: 1496.52) per option. (G) The fair value of the options granted during the year has been calculated using the Black-Scholes Option Pricing Model using the following significant assumptions and inputs: (F) The fair value of the options granted under the stock option scheme is treated as discount and accounted as employee compensation over the vesting period. vi. Options exercisable at the end of the year out of (v) above (D) Weighted average share price at the date of exercise for stock options exercised during the year is ₹2945.59 (previous year: 1779.07) per share. (E) 253.70 3,62,281 253.80 2,51,018 219.74 11,74,574 170.25 16,29,198 v. Options granted and outstanding at the end of the year 225.94 ii. Weighted average expected life of options iii. Weighted average expected volatility iv. Weighted average expected dividends over the life of the options V. X. Options unvested at the end of the year out of (viii) above Statements Reports Financial Statutory Integrated Report Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 Expected volatility is based on the historical volatility of the company's share price applicable to the total expected life of each option. (i) During the year ended March 31, 2024, the company paid the final dividend of 24 per equity share for the year ended March 31, 2023 amounting to 3373.56 crore and a special dividend of 6 per equity share amounting to ₹ 843.39 crore. 62.26 per option 1553.63 per option 7.80 per option 2.83 years 6.77% 135.63 per option 65.90 per option 2479.86 per option 2.75 Years 18.64% 7.05% Method used to determine expected volatility vii. vi. Weighted average exercise price Weighted average share price 25.03% 5,09,439 LARSEN & TOUBRO xi. Weighted average remaining contractual life of options (in years) (ii) Weighted average share price at the date of exercise for stock options exercised during the year is 5298 per share (previous year: 4761 per share). Options granted during the year vi. Options exercised during the year vii. Options lapsed/cancelled during the year viii. Options granted & outstanding at the end of the year ix. Options vested at the end of the year out of (viii) above 7,409 41,347 V. 5,015 7,409 X. xi. Options unvested at the end of the year out of (viii) above Weighted average remaining contractual life of options (in years) 0.0 [1] Based on letter of intent (C) Employee Stock Option Plan 2021 (ESOP 2021) ESOP 2021 was instituted with effect from May 22, 2021 for the issue of upto 20,00,000 options (including the unutilised options under ERSP 2012) to employees. The Nomination and Remuneration Committee administers the plan through a trust established specifically for this purpose, called the LTI Mindtree Employee Welfare Trust - formerly known as Mindtree Employee Welfare Trust ('ESOP Trust'). The ESOP Trust shall subscribe to the equity shares of the company using the proceeds from loans obtained from the company, other cash inflows from allotment of shares to employees under the ESOP Plan, to the extent of number of shares as is necessary for transferring to the employees. The Nomination and Remuneration Committee shall determine the exercise price which will not be less than the face value of the shares. Options under this program are granted to employees at an exercise price periodically determined by the Nomination and Remuneration Committee. All stock options have a four-year vesting term. The options vest and become fully exercisable at 7,409 Integrated Annual Report 2023-24 53,771 Outstanding units/shares granted as at the beginning of the year (B) Employee Restricted Stock Purchase Plan 2012 (ERSP 2012) Expected volatility is based on the historical volatility of the company's share price ERSP 2012 was instituted with effect from July 16, 2012 to issue equity shares of nominal value of 1 each. Shares under this program are granted to employees at an exercise price of not less than 10 per equity share or such higher price as determined by the Nomination and Remuneration Committee. Shares shall vest over such term as determined by the Nomination and Remuneration Committee not exceeding ten years from the date of the grant. All shares will have a minimum lock in period of one year from the date of allotment. (i) The details of the grant under the aforesaid scheme is summarised below: Sr. No. Particulars ERSP 2012 [1] 2023-24 i. Grant price 7,409 10 ii. Grant dates 1,12,202 24-7-2019 onwards iii. Vesting commences on 24-7-2020 onwards iv. 1 2022-23 10 Corporate Overview Management Discussion and Analysis Integrated vi. Weighted average share price V. Weighted average expected dividends over the life of the options iv. Weighted average expected volatility iii. Weighted average expected life of options ii. Weighted average exercise price Weighted average risk-free interest rate 562 Sr. No. Particulars (iii) The fair value of the options granted during the year has been calculated using the Black-Scholes Option Pricing Model using the following significant assumptions and inputs: NOTE [20] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements 561 6.0 5.3 i. vii. Method used to determine expected volatility 2023-24 7.12% 2.5 years 32.98% Statutory Financial Report Reports Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [20] (contd.) the rate of 25% each over a period of four years from the date of grant. Each option is entitled to 1 equity share of 1 each. These options are exercisable within 6 years from the date of vesting. Series A Sr. No. Particulars 2023-24 2022-23 i. * 4776 181.54 37.71% 2.5 years 6.79% 2022-23 * 4970 1 * 205.59 8,54,377 198.98 2022-23 iv. Options lapsed As at 31-3-2024 Number of equity shares [1] Note 20(h) below for terms of employee stock option schemes Employee stock options granted and outstanding [1] Particulars 15,17,12,116 13.70 11.42 % As at 31-3-2023 Number of Shareholding shares 19,25,58,158 16,04,73,308 Grant price to be issued as fully paid 16,29,198 14.18 11.04 shares 19,48,87,516 Number of Shareholding As at 31-3-2024 Life Insurance Corporation of India L&T Employees Trust Name of the shareholders (d) Shareholders holding more than 5% of equity shares as at the end of the year: The company has only one class of share capital, i.e., equity shares having face value of 2 per share. Each holder of equity share is entitled to one vote per share. (c) Terms/rights attached to equity shares: % 281.10 [2] The equity shares will be issued at a premium of 27.41 crore (previous year: 25.57 crore) As at 31-3-2023 Number of NOTE [20] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements LARSEN & TOUBRO 559 Options can be exercised anytime within a period of 7 years from the date of grant and would be settled by way of issue of equity shares. Management has discretion to modify the exercise period. of 4 years. The options are vested equally over a period of 4 years for series 2003(B), 2006(B) and 5 years in the case of series 2006(A), subject to the discretion of the management and fulfillment of certain conditions. The grant of options to the employees under the stock option schemes is on the basis of their performance and other eligibility criteria. During the year company has issued the new ESOP series 2006(B) in which options are vested equally over a period ii. crore (at face value) i. (h) Stock option scheme of the Parent Company: (g) The aggregate number of equity shares issued pursuant to contract, without payment being received in cash in immediately preceding five years ended on March 31, 2024 - NIL (previous period of five years ended March 31, 2023: NIL). (f) The aggregate number of equity shares allotted as fully paid up by way of bonus shares in immediately preceding five years ended March 31, 2024 are NIL (previous period of five years ended March 31, 2023: 46,67,64,755 shares). to be issued as fully paid 11,74,574 0.33[2] equity shares 0.23[2] value) * crore (at face (A) Terms: 560 1,40,54,82,190 0.09 Issued, subscribed and fully paid-up equity share outstanding at the beginning of the year Particulars (b) Reconciliation of the number of equity shares and share capital: Equity shares of 2 each Issued, subscribed and fully paid up: Equity shares of 2 each Authorised: Particulars (a) Share capital authorised, issued, subscribed and paid up: Add: Shares issued on exercise of employee stock options during the year Equity share capital Notes forming part of the Consolidated Financial Statements (contd.) Statements Reports Report Financial Statutory Integrated Management Discussion and Analysis Corporate Overview NOTE [20] 274.93 Less: Shares extinguished on buy-back As at 31-3-2024 Number of 281.01 1,40,50,29,123 4,53,067 281.10 0.08 6.25 3,12,50,000 1,37,46,68,619 1,40,54,82,190 4,36,429 crore As at 31-3-2023 Number of shares shares * crore Issued, subscribed and fully paid-up equity shares outstanding at the end of the year As at 31-3-2024 Number of 8037.00 274.93 1,40,54,82,190 8037.00 40,18,50,00,000 1,37,46,68,619 40,18,50,00,000 crore As at 31-3-2023 Number of shares shares crore 281.10 (B) The details of the grants under the aforesaid schemes are summarised below: Sr. 2003(B) 6.31 3.59 2.97 4.88 5.78 ix. Weighted average remaining contractual life of options (in years) 4,73,060 6,16,459 3,09,514 (C) The number and weighted average exercise price of stock options are as follows: 1,95,834 Options yet to vest 3,43,562 2,38,138 18,719 12,880 Options vested 4,73,060 9,60,021 5,47,652 5,95,606 2,14,553 2023-24 Particulars 227.60 4,53,067 221.13 4,36,429 iii. Options allotted 7.80 21,424 135.63 9,70,968 2022-23 ii. Options granted 17,18,419 219.74 11,74,574 i. Options granted and outstanding at the beginning of the year (*) Weighted average exercise price No. of stock options Weighted average exercise price (*) No. of stock options 224.86 6,08,486 year, of which viii. Options granted and outstanding at the end of the 1-7-2007 onwards 23-5-2003 onwards Grant dates ii. 267.10 267.10 267.10 7.80 7.80 8-7-2023 onwards Grant price-(*) 2022-23 2023-24 2023-24 2022-23 2023-24 No. Series reference 2006(B) 2006(A) i. lii. Vesting commences on 23-5-2004 onwards 1-7-2008 onwards 3,84,046 3,59,049 69,021 77,380 vii. Options exercised 4,78,660 21,424 4,92,308 vi. Options granted 5,600 94,393 53,320 17,809 20,995 14,38,460 9,60,021 2,79,959 2,14,553 iv. Options granted and outstanding at the beginning of the year v. Options lapsed 8-7-2024 onwards 79,915 10 28-7-2016 onwards ii. [2] Debenture redemption reserve: Created on non-convertible debentures in accordance with the Companies (Share capital and Debenture) Rules, 2014 (as amended). a. Buyback of equity shares out of free reserves and securities premium in accordance with Section 69 of the Companies Act, 2013 b. Redemption of preference shares out of profits in accordance with Section 55(2)(c) of the Companies Act, 2013. [1] Capital redemption reserve: Created on: 89044.85 71.28 71.28 86084.31 (89.82) 141.76 274.34 8.12 (4.77) (4.67) 146.53 279.01 777.53 3775.58 74519.94 4231.56 79489.69 790.67 32.39 32.39 11.09 1031.27 1051.27 11.09 2676.44 3133.69 24.39 3.12 Integrated Annual Report 2023-24 568 48932.42 52274.17 42.20 464.33 23107.26 6591.27 14839.87 464.33 29698.53 Secured Unsecured 8373.71 5768.69 14142.40 143.51 143.51 169.45 11508.74 604.73 Total 6081.65 26399.38 (b) Non-convertible debentures and borrowings from banks and financial institutions are secured by charge on the specified movable and immovable assets of the respective entities. NOTE [28] Current liabilities: Financial liabilities - Other trade payables Acceptances Due to related parties: 467.09 Associates Due to others Particulars crore As at 31-3-2024 As at 31-3-2023 93.89 15.69 5.97 1286.39 9.20 1458.16 1292.36 50887.92 1467.36 47449.37 Joint ventures 550.54 (418.06) (288.61) Particulars Other equity NOTE [21] Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements LARSEN & TOUBRO 565 Expected volatility is based on the historical volatility of the company's shares price applicable to the expected life of each option. 10.00 per option 79.87 per option 2.66 per option 2.75 years 39.16% Capital reserve [Note 1(II)(g)] 6.65% 131.38 per option 5.54 per option 2.77 years 36.53% 7.20% Method used to determine expected volatility vii. Weighted average exercise price (₹) vi. Weighted average share price (*) V. iv. Weighted average expected dividends (*) Weighted average expected volatility 10.00 per option 14797.67 Capital reserve Capital redemption reserve [1] 885.15 839.15 8770.19 50.56 328.86 335.11 282.44 282.44 10.52 271.92 10.52 271.92 As at 31-3-2023 As at 31-3-2024 Capital reserve on consolidation crore Cost of hedging reserve Cash flow hedging reserve Hedging reserve [Note 1 (II)(r)(iii)(B)] Foreign currency translation reserve [Note 1 (II)(y)(iv)] Retained earnings Reserve u/s 36(1)(viii) of the Income-tax Act, 1961 [5] Impairment reserve as per Reserve Bank of India [6] Reserve u/s 45-IC of the Reserve Bank India Act, 1934 [3] Reserve u/s 29C of the National Housing Bank Act, 1987 [4] Debenture redemption reserve [2] Statutory reserves Deferred employee compensation expense Employee share options outstanding Securities premium [Note 1 (II)(u)] Debt instruments through Other comprehensive income [Note 1 (II)(r)(i)(B)] Equity instruments through Other comprehensive income [Note 1(II)(r)(i)(B)] iii. Total 14394.33 As at 31-3-2023 Notes: (a) Loans guaranteed by directors: Nil (previous year: Nil) (b) Non-convertible debentures and borrowings from banks and financial institutions are secured by charge on the specified movable and immovable assets of the respective entities. NOTE [23] Non-current liabilities: Other financial liabilities Particulars Forward contract payables Embedded derivative payables Financial guarantee contracts Due to others [1] [1] Mainly includes security deposits and liabilities towards capital goods NOTE [24] Non-current liabilities: Provisions Particulars Employee pension scheme [Note 52(b)(i)] Post-retirement medical benefits plan [Note 52(b)(i)] Provision for other employee benefits Other provisions [Note 56(a)] NOTE [25] Other non-current liabilities Particulars Deferred Income in respect of Government Grants Other payables crore As at 31-3-2024 3914.95 3914.95 49204.00 12013.68 61217.68 35.37 37770.33 19497.03 Total [3] Reserve u/s-45 IC of the Reserve Bank of India Act, 1934: Created by subsidiary(ies) by transferring amount not less than twenty per cent of its net profit every year. [4] Reserve u/s 29C of the National Housing Bank Act, 1987: Created by subsidiary(ies) by transferring amount not less than twenty per cent of its net profit every year. [5] Reserve u/s 36(1)(viii) of Income tax Act, 1961: Created by subsidiary(ies) by transferring an amount not exceeding twenty percent of the profits derived from eligible business every year. [6] Impairment reserve as per Reserve Bank of India: Created pursuant to circular issued by Reserve Bank of India where impairment allowance as per Ind AS 109 is lower than the provisioning required as per extant prudential norms. 566 Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial Reports 18.30 Statements NOTE [22] Non-current liabilities: Financial liabilities - Borrowings crore As at 31-3-2024 As at 31-3-2023 Particulars Secured Unsecured Redeemable non-convertible fixed rate debentures Term loans from banks Term loans from others Loans from financial institutions Total Secured Unsecured 26242.71 11577.02 37819.73 27896.07 9874.26 12757.14 2138.92 14896.06 17392.98 2104.05 318.09 318.09 35.37 3473.09 3473.09 42472.94 14034.03 56506.97 Notes forming part of the Consolidated Financial Statements (contd.) As at 31-3-2023 202.89 4.89 0.03 As at 31-3-2024 As at 31-3-2023 Particulars Secured Unsecured Loans repayable on demand Short-term loans and advances from banks Loans from related parties Commercial paper 13350.67 Total Secured Unsecured 5785.00 3550.00 9335.00 6980.22 3665.02 7565.67 814.58 8380.25 5187.23 1846.03 7033.26 207.67 207.67 9911.35 9911.35 14483.60 27834.27 12167.45 Total 10645.24 crore 202.04 202.04 13015.78 13015.78 18728.87 30896.32 NOTE [27] Current liabilities: Financial liabilities - Current maturities of long term borrowings Particulars Redeemable non-convertible fixed rate debentures Redeemable non-convertible floating rate debentures Term loans from banks Loans from financial institutions Notes: (a) Loans guaranteed by directors: Nil (previous year: Nil) crore As at 31-3-2024 Note: The secured portion of loans payable on demand and bank borrowings are secured by charge on the specified movable and immovable assets of the respective entities. Secured Unsecured 7845.26 6549.07 Current liabilities: Financial liabilities - Borrowings Notes forming part of the Consolidated Financial Statements (contd.) 0.36 77.74 96.07 64.82 272.96 crore As at 31-3-2024 351.87 As at 31-3-2023 375.92 346.44 337.66 13.90 11.22 245.69 NOTE [26] 174.67 869.99 crore As at 31-3-2024 585.00 As at 31-3-2023 64.64 33.02 17.09 618.02 81.73 567 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements 987.38 ii. Weighted average expected life of options. Weighted average risk-free interest rate i. 3,256 5,014 Options lapsed/cancelled during the year vii. Options exercised during the year vi. year Options granted during the V. 1,24,100 1,01,141 Options granted & outstanding at the beginning of the year iv. 9-8-2022 onwards Vesting commences on iii. 9-8-2021 onwards Grant dates ii. Weighted average grant price i. * 3268 * 3268 2022-23 Series B 2023-24 9,168 19,703 viii. Options granted & outstanding at the end of the year 86,959 Sr. (ii) The exercise period for the options granted under the ESOP Scheme, 2016 would be seven years from the date of grant of options or six years from the date of first vesting or three years from the date of retirement/death, whichever is earlier, subject to any change as may be approved by the Board. The exercise price may be decided by the Board, in such manner, during such period, in one or more tranches and on such terms and conditions as it may deem fit, provided that the exercise price per option shall not be less than the par value of the equity share of company and shall not be more than the market price as defined in the SEBI (Share Based Employee Benefits) Regulations, 2021 and shall be subject to compliance with accounting policies under the said regulation. The number of shares to be allotted on exercise of options should not exceed the total number of unexercised vested options that may be exercised by the employee. Details of grant under ESOP Scheme, 2016 is summarised below: ESOP Scheme 2016, include Series A, in which the options are vested equally over a period of 5 years and Series B, in which the options are vested equally over period of 4 years, subject to the discretion of the management and fulfillment of certain conditions. (i) (A) Employee stock option plan (ESOP) L&T Technology Services Limited (ii) 564 NOTE [20] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements LARSEN & TOUBRO The expected volatility has been calculated based on historic company share price 563 6.0 Weighted average remaining contractual life of options (in years) xi. 74,577 45,831 Options unvested at the end of the year out of (viii) above X. 26,564 41,128 Options vested at the end of the year out of (viii) above ix. 1,01,141 7.0 36.39% 6.28% 2.5 years Options vested at the end of the year out of (viii) above ix. 1,71,624 91,948 Options granted & outstanding at the end of the year viii. 56,924 46,412 Options lapsed/cancelled during the year vii. 28,292 33,264 23,707 Options exercised during the year 29,104 Options granted during the year V. 2,27,736 1,71,624 Options granted & outstanding at the beginning of the year iv. 9-8-2022 onwards Vesting commences on iii. 9-8-2021 onwards Grant dates vi. Particulars 41,004 Options unvested at the end of the year out of (viii) above 10.00 0.20% Sr. No. Particulars Method used to determine expected volatility vii. Weighted average expected volatility vi. Weighted average risk-free interest rate V. Weighted average Expected life iv. Dividend yield % iii. X. Weighted average Exercise price Weighted average grant date share price i. * 4518 2022-23 2023-24 Sr. No. Particulars Weighted average remaining contractual life of options (in years) The weighted average fair value of each option under the above mentioned Series A of ESOP 2021 plan was NIL (previous year: 4508) using the Black-Scholes model with the following assumptions: 7.0 6.0 xi. 1,30,620 68,241 ii. No. i. Grant price 5,63,750 ii. Options granted & outstanding at the beginning of the year 10.001/Market Price 44.20 Grant Price i. 2022-23 Scheme 2013 2023-24 2022-23 Scheme 2010 2023-24 Particulars Sr. No. 9,48,250 (A) The details of the grants are summarised below: (iii) L&T Finance Limited (formerly known as L&T Finance Holdings Limited) NOTE [20] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Statements Reports Report Financial Statutory Integrated Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 The company has formulated Employee Stock Option Schemes 2010 (Scheme 2010) and 2013 (Scheme 2013). The grant of options to the employees under the stock option schemes is on the basis of their performance and other eligibility criteria. The options allotted under the Scheme 2010 are vested over a period of four years in the ratio of 15%, 20%, 30% and 35% respectively from the end of 12 months from the date of grant, subject to the discretion of the management and fulfillment of certain conditions. The options granted under the Scheme 2013 are vested in a graded manner over a period of four years with 0%, 33%, 33% and 34% of grants vesting each year, commencing from the end of 24 months from the date of grant or w.e.f. July 10, 2019 vested in a graded manner over a period of four years with 25%, 25%, 25% and 25% of grants vesting each year, commencing from the end of 12 months from the date of grant. The expected price volatility is based on the historic volatility (based on the remaining life of the options), adjusted for any expected changes to future volatility based on publicly available information. 2,75,38,744 iii. Options granted during the year 2022-23 2023-24 Sr. No. Particulars (C) The fair value has been calculated using the Black-Scholes Option Pricing Model and the significant assumptions and inputs to estimate the fair value of options granted during the year are as follows: (B) Weighted average fair values of options granted during the year is ₹118.74 (Previous year: 69.48) per options. [1] w.e.f. from July 10, 2019 4.78 4.18 2.81 0.75 91,92,852 1,83,45,892 4,01,58,040 1,13,32,467 1,09,27,536 65,000 54,39,129 87,70,443 1,96,500 4,98,750 V. Options exercised & shares allotted during the year vi. Options granted & outstanding at the end of the year vii. Options vested at the end of the year out of (vi) above viii. Options unvested at the end of the year out of (vi) above ix. Weighted average remaining contractual life of options (in years) 80,02,047 32,49,742 1,88,000 iv. Options lapsed/cancelled during the year 8,21,880 67,41,444 4,85,000 78,750 10 Method used to determine expected volatility 5.86% 50,350 47,150 5,14,250 3,60,550 75,975 1,45,700 3,97,200 16,400 22,700 24,400 2,15,725 5,14,250 3,13,400 28-7-2017 onwards 72 ESOP Scheme, 2016 2023-24 X. Options unvested at the end of the year out of (viii) above xi. Weighted average remaining contractual life of options (in years) ix. Options vested at the end of the year out of (viii) above viii. Options granted & outstanding at the end of the year vii. Options exercised during the year vi. Options granted during the year Options lapsed during the year V. iv. Options granted & outstanding at the beginning of the year iii. Vesting commences on ii. Grant dates 2022-23 72 viii. 4,63,900 3.84 2.07% 40.52% 39.00% 2.65% 6.96% Weighted average expected price volatility of company's share Weighted average expected dividend yield over life of option vii. Weighted average risk-free interest vi. V. 4244.30 per option 3447.00 per option Weighted average share price at grant date iv. 32 21-Apr-22 20-Apr-29 26-Apr-23 25-Apr-30 2.89 Expiry date Grant date ii. 32 i. 2023-24 Sr. No. 2022-23 Weighted average exercise price Particulars (D) There were 16,400 new options granted during the year ended March 31, 2024. The fair value at grant date of options granted during the year: 3369.50. The fair value at grant date is determined using the Black-Scholes Option Pricing Model which takes into account the exercise price, term of option, share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option. The model inputs for options granted during the year included: (C) In respect of stock options granted pursuant to the company's stock options schemes, the fair value of the options is treated as discount and accounted as employee compensation over the vesting period. (B) Weighted average share price at the date of exercise for stock options exercised during the year is 4320.68 per share (previous year: 3692.66 per share). iii. 11339.29 604.73 20317.73 (e) Shares reserved for issue under options outstanding on un-issued share capital: Employee share options (net) [Note 1 (II)(x)] 135.31 8 Repairs to buildings 19.74 125.52 145.26 26.09 122.49 148.58 9 General repairs and maintenance 759.27 784.64 1543.91 699.94 579.00 1278.94 10 Engineering, professional, 135.31 155.23 155.23 equipment 323.06 4239.19 5 Rates and taxes 955.76 478.86 1434.62 857.25 359.22 technical and consultancy 1216.47 Travelling and conveyance 1704.92 711.54 2416.46 1602.08 565.22 2167.30 7 Repairs to plant and 6 3916.13 fees 1550.32 Property, plant and equipment Right-of-use assets Investment property Amortisation of Intangible assets Impairment on Investment property Obsolescence on Property, plant and equipment 2023-24 crore 2022-23 2241.97 508.08 40.70 1828.30 471.52 92.28 2790.75 883.95 2392.10 992.10 112.69 5.36 3502.25 Depreciation on: Particulars Depreciation, amortisation, impairment and obsolescence NOTE [40] 5776.89 2618.85 1512.25 4131.10 11 Finance Costs 5714.90 3545.85 9260.75 6026.44 4226.57 3207.16 12 Miscellaneous expenses 1054.65 1108.90 2163.55 1013.55 849.74 - 1863.29 9233.60 6058.28 333.89 5724.39 72.70 8758.04 Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Statutory Financial Report Reports Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [39] Finance costs Interest expenses Interest on lease liabilities Other borrowing costs Exchange (gain)/loss [net] Particulars crore 7.16 10419.42 (550.08) (145.20) (32.20) 23.34 271.29 257.97 520.30 419.61 1108.90 849.74 2129.70 2592.71 2023-24 1567.90 561.80 886.71 2350.80 1908.53 1106.66 716.20 (675.20) (509.54) (26.65) 1706.00 2022-23 3369.30 3019.58 Total 2745.19 830.15 Note 36 Note 37 2655.76 2022-23 Note 38 Note 39 Total 167.85 2823.61 901.27 88.04 80.20 989.31 Insurance 821.43 347.07 135.27 1303.77 616.65 447.54 120.15 1184.34 4 Rent and hire charges 3 575 749.95 2 167.21 158.10 0.39 9.34 29.09 3545.85 3207.16 39(a) Aggregation of expenses disclosed vide Note 36 - Manufacturing, construction and operating expenses, Note 37 - Employee benefits expense, Note 38 - Sales, administration and other expenses and Note 39 - Finance costs crore Packing and forwarding Sr. Nature of expenses No. Note 36 Note 37 Note 38 Note 39 1 Power and fuel 2526.75 218.44 2023-24 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements Notes forming part of the Consolidated Financial Statements (contd.) India 36.17 36.31 26 L&T Metro Rail (Hyderabad) Limited [h] India 99.99 99.99 27 L&T Arunachal Hydropower Limited lil India 100.00 28 L&T Himachal Hydropower Limited India 100.00 100.00 29 L&T Power Development Limited L&T Infra Investment Partners 25 66.11 India 20 L&T Mutual Fund Trustee Limited[e] India 66.11 21 L&T Financial Consultants Limited India 65.86 66.11 India 22 India 100.00 100.00 23 L&T Offshore Private Limited (formerly known as L&T Sapura Offshore Private Limited) [f] India 100.00 24 Mudit Cement Private Limited[g] L&T Energy Hydrocarbon Engineering Limited 100.00 100.00 30 35 Think Tower Developers Private Limited il India 99.00 36 L&T Seawoods Limited India 100.00 100.00 100.00 37 India 100.00 38 L&T Realty Developers Limited India 100.00 100.00 39 Prime Techpark (Chennai) Private Limited L&T Innovation Campus (Chennai) Limited[k] 66.11 100.00 L&T Westend Project LLP Nabha Power Limited India 100.00 100.00 31 Chennai Vision Developers Private Limited India 100.00 100.00 India 32 India 100.00 100.00 33 L&T Parel Project Private Limited India 100.00 100.00 34 Elevated Avenue Realty LLP (formerly known as L&T Avenue Realty LLP) 211.84 65.86 L&T Infra Investment Partners Trustee Private Limited 100.00 100.00 India 100.00 100.00 India 100.00 India 68.64 68.68 India 68.68 India 68.68 India 68.68 8 L&T Technology Services Limited India India Cuelogic Technologies Private Limited[b] Powerup Cloud Technologies Private Limited [b] Lymbyc Solutions Private Limited [b] NOTE [41] The list of subsidiaries, associates, joint ventures and joint operations included in the Consolidated Financial Statements are as under: Sr. Name of subsidiaries No. Principal place of business As at 31-3-2024 Proportion 73.74 of effective ownership As at 31-3-2023 Proportion of effective ownership interest /voting power(%) power(%) 1234561 7 Indian subsidiaries Hi-Tech Rock Products and Aggregates Limited L&T Geostructure Private Limited L&T Infrastructure Engineering Limited[a] LTIMindtree Limited interest/voting 73.85 9 L&T Thales Technology Services Private Limited 100.00 15 L&T Finance Limited (formerly known as L&T Finance Holdings Limited) India 65.86 66.11 16 L&T Finance Limited[e] India India 66.11 L&T Infra Credit Limited[e] India 66.11 18 L&T Infra Investment Partners Advisory Private Limited India 65.86 66.11 19 17 India L&T Semiconductor Technologies Limited[d] 100.00 252.69 India 54.57 54.65 10 Graphene Semiconductor Services Private Limited [<] India 73.85 11 14 Seastar Labs Private Limited [c] 73.85 12 Esencia Technologies India Private Limited [c] India 73.85 13 L&T Network Services Private Limited India 100.00 India 251.42 43.09 42.80 0.97 55.74 3.09 31.40 2.22 208.49 242.63 6.28 (478.15) 491.57 531.02 (6.18) 135.08 73.51 2023-24 8.44 692.50 4158.03 61.37 14.46 6.37 114.98 Changes in inventories of finished goods, stock-in-trade, work-in-progress and property development: Sub-contracting charges 1817.47 Dividend income on: Joint venture Trade investments Current investments Others Net gain/(loss) on fair valuation of investments Net gain/(loss) on sale of investments Net gain/(loss) on derivatives at fair value through profit or loss 841.64 2929.17 Net gain/(loss) on sale of property, plant and equipment Lease rentals NOTE [36] Manufacturing, construction and operating expenses Particulars Cost of raw materials, components consumed: Raw materials and components Less: Scrap sales Construction materials consumed Purchase of stock-in-trade Stores, spares and tools consumed Miscellaneous income (net of expenses) crore 2022-23 19625.81 183.56 222.13 13714.27 271.50 14735.34 Carried forward 13714.27 114806.36 14735.34 93724.66 572 Integrated Annual Report 2023-24 Corporate Overview Completed property Management Discussion and Analysis Statutory Financial Reports Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [36] Manufacturing, construction and operating expenses (contd.) Particulars Brought forward Integrated Report 2447.07 3998.29 Work-in-progress 19178.65 183.54 19442.25 54813.97 18995.11 43237.35 1063.77 1052.86 4432.02 4814.89 35054.35 3710.77 25624.45 Finished goods 82.09 Stock-in-trade 228.30 94.95 364.92 Work-in-progress 9470.98 10005.68 Cost of built-up space and property development land: Closing stock: Less: Opening stock: 42.93 1257.81 516.73 Others 8940.19 7982.07 Software development products and services 35119.11 32846.03 Income from financing activity/annuity based projects 14074.87 13375.96 Property development activity 2804.71 1316.14 Fare collection and related activity 602.98 458.20 Servicing fees 1868.83 1522.46 Commission 130.37 Engineering service fees 116096.12 4572.86 4828.33 Manufacturing and trading activity 4.22 43.41 36.85 (iii) Intangible assets (b) Other funding commitments: (i) Undrawn/undisbursed commitments to other companies (in Financial Services segment) 972.34 847.52 (ii) Share of joint ventures' capital commitments 125.84 5.38 NOTE [34] Revenue from operations Particulars Sales & service: 2023-24 crore 2022-23 Construction and project related activity 147603.49 4.49 Charter hire income 2.48 0.65 1301.85 1997.22 1679.28 221112.91 183340.70 571 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements Notes forming part of the Consolidated Financial Statements (contd.) 1182.18 NOTE [35] Particulars 2023-24 crore 2022-23 Interest income on: [Note 46(a)] Loans and advances to joint ventures and associates 22.91 Investments 1540.43 Other income 883.73 Miscellaneous income 21.93 Investment/portfolio management and trusteeship fees Fees for operation and maintenance of power plant 217.47 3140.33 3147.62 219115.69 181661.42 Other operational income: Lease rentals 106.28 166.11 86.44 148.45 57.56 Gain on sale of subsidiary/business undertaking 511.73 Premium earned (net) on related forward exchange contracts 28.83 65.14 Net gain/(loss) on sale of investment property Property maintenance recoveries India crore 2022-23 1287.71 1067.24 (175.99) (159.79) 41171.02 37214.11 Power and fuel Packing and forwarding Insurance Rent and hire charges crore Particulars 2023-24 2022-23 218.44 167.85 80.20 88.04 135.27 447.54 347.07 Employee medical and other insurance premium expenses 249.51 2022-23 33565.22 Salaries, wages and bonus Contribution to and provision for: Provident fund and pension fund 883.75 772.66 Superannuation/employee pension and social security schemes Gratuity funds [Note 52(b)(ii)] 1202.48 120.15 1011.14 260.59 2371.75 2044.39 Expenses on employee stock option scheme Staff welfare expenses Recoveries on account of deputation charges NOTE [38] Sales, administration and other expenses 297.63 285.52 333.89 323.06 478.86 Advertising and publicity Stationery and printing Commission: Distributors and agents Others Bank charges Impairment on lease receivables Corporate social responsibility expenses Collection cost (Financial Services business) Miscellaneous expenses Telephone, postage and telegrams Bad debts and advances written off (net of written back) Allowances for expected credit loss Loss on fair valuation/sale of investments towards financing activities (net) Loss on fair valuation of loans towards financing activities (net) Recoveries from joint ventures and associates Exchange (gain)/loss [net] Other provisions 574 34.86 7.94 37.39 5.70 Less: Allowances for expected credit loss written back crore Directors' fees General repairs and maintenance 359.22 711.54 565.22 125.52 122.49 784.64 579.00 1550.32 1512.25 Professional fees 7.18 193.76 233.93 345.49 304.84 80.23 75.32 Rates and taxes Travelling and conveyance Repairs to buildings 8.76 2023-24 37042.85 Particulars 353.78 (3156.64) Other manufacturing, construction and operating expenses: Power and fuel 2526.75 2655.76 Royalty and technical know-how fees 127.09 30.70 Packing and forwarding 749.95 901.27 Rent and hire charges 5724.39 3916.13 Bank guarantee charges 309.75 304.62 Engineering, professional, technical and consultancy fees (3510.42) 1021.07 Inventorisation of investment property 1021.07 13714.27 114806.36 14735.34 93724.66 Finished goods 94.95 Stock-in-trade 364.92 Work-in-progress 10005.68 89.29 4226.57 319.61 Cost of built-up space and property development land: Work-in-progress 3998.29 3277.96 Completed property 271.50 366.49 14735.34 11224.92 7171.57 2618.85 Insurance 821.43 707.80 Software development expenses 4130.13 3912.39 Miscellaneous expenses 1054.65 1013.55 24486.49 20020.81 994.82 Finance cost of financial services business and finance lease activity 6026.44 146028.82 116615.27 573 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [37] Employee benefits expense 5714.90 2023-24 Expenses on construction job in realty business 18.18 616.65 Rates and taxes 955.76 857.25 Travelling and conveyance 1704.92 1602.08 Repairs to plant and equipment 155.23 (125.90) 135.31 19.74 26.09 General repairs and maintenance 759.27 699.94 Provision/(reversal) for foreseeable losses on construction contracts 207.86 148.32 Other provisions/(reversal of provisions) Repairs to buildings 100.00 7.63 3682.33 power(%) 3370.71 42166.55 38795.84 18371.09 20424.75 [1] Mainly includes statutory dues and liabilities towards joint operations, volume discount and employee benefits 52333.73 47522.14 1.06 4810.53 Other payables [1] Deferred income in respect of Government Grants 20647.38 26874.76 As at 31-3-2023 As at 31-3-2024 crore 7441.94 43.78 6702.07 41.64 6912.13 7575.67 384.61 325.49 1.18 0.17 181.20 166.34 129.10 As at 31-3-2023 As at 31-3-2024 129.90 crore 569 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements Notes forming part of the Consolidated Financial Statements (contd.) 1506.65 Other provisions [Note 56(a)] 1943.46 1950.86 0.29 0.28 Others 15.08 19.84 Post-retirement medical benefits plan [Note 52(b)(i)] 28.83 30.39 49784.12 Employee pension scheme [Note 52(b)(i)] 1598.68 253.80 301.67 As at 31-3-2023 As at 31-3-2024 crore Compensated absences Gratuity [Note 52(b)(i)] Provision for employee benefits: Particulars Current liabilities: Provisions NOTE [31] 1645.46 1550.01 8.14 Excess of billing over revenue 73.66 9273.61 709.68 24110.32 13331.70 Others 58.19 Micro and small enterprises Undisputed: 2-3 years Total 1-2 years Outstanding for following periods from due date of payment Less than More than 1 year 3 years As at 31-3-2023 Dues Not due Unbilled Particulars crore 7.10 53292.88 1297.94 382.88 441.61 0.04 8690.03 7.06 26137.98 16342.44 Others 5.82 554.01 2.47 201.45 1.88 1453.19 Contract liabilities [Note 47(d)(i)] Particulars Other current liabilities NOTE [30] [2] Mainly includes security deposits and liability towards employee benefits and capital goods [1] Due to others include due to directors: 125.36 crore (previous year: * 95.41 crore) Due to others [1] [2] 1455.73 203.92 559.83 9347.27 Embedded derivative payables Advances from customers Forward contract payables Unclaimed interest on debentures Unclaimed dividend Particulars Current liabilities: Other financial liabilities NOTE [29] 24827.48 13389.89 7.48 0.66 Others Micro and small enterprises Disputed: 851.70 48924.28 Financial guarantee contracts Micro and small enterprises 3457.51 NOTE [32] 70.00 Sultanate of Oman 70.00 70.00 Kingdom of Saudi Arabia 75.00 75.00 Kingdom of Saudi Arabia 100.00 100.00 Kuwait 49.00 49.00 Indonesia 95.00 Sultanate of Oman 70.00 70.00 68.64 68.68 LTIMindtree Information Technology Services (Shanghai) Co, Ltd. (formerly known as China 1217.03 984.57 (ii) Investment property (a) Estimated amount of contracts remaining to be executed on capital account (net of advances): (i) Property, plant and equipment 70.00 Sultanate of Oman 72.50 72.50 Larsen Toubro Arabia LLC 8 L&T Hydrocarbon Saudi Company 9 Larsen & Toubro Kuwait Construction General Contracting Co. W.L.L. 10 PT Larsen & Toubro Hydrocarbon Engineering Indonesia [b] 11 Larsen & Toubro Electromech LLC 12 Principal place of business As at 31-3-2024 Proportion of effective ownership As at 31-3-2023 interest /voting power(%) Proportion of effective ownership interest/voting power(%) Sultanate of Oman 65.00 65.00 Qatar 49.00 49.00 Kingdom of Saudi Arabia 100.00 100.00 South Africa As at 31-3-2023 3493.47 Particulars Commitments 35.34 32.66 3006.66 (h) Contingent liabilities in relation to interest in joint operations 276.58 210.56 (g) Bank guarantees given on behalf of joint venture (f) Corporate guarantees for financial obligations of joint ventures 266.05 56.00 3110.91 3929.85 1138.80 1118.68 arise, including those in respect of matters in appeal/challenged by the Group in Writ (d) Income tax liability (including penalty) that may arise in respect of which the Group is in appeal (e) Guarantees or letter of credit or letter of comfort given to third parties (c) Excise duty/service tax/custom duty/entry tax/stamp duty/municipal cess liability that may 619.15 As at 31-3-2023 4421.78 1430.04 4624.58 As at 31-3-2024 crore (b) Sales tax/GST liability that may arise in respect of matters in appeal (a) Claims against the Group not acknowledged as debts Particulars Contingent Liabilities 2976.71 (i) Share in contingent liabilities of joint operations for which the Group is contingently liable (j) Contingent liabilities in respect of liabilities of other joint operators in respect of joint operations (k) Share of joint ventures' contingent liabilities in respect of a legal claim lodged against the entity 123.84 4364.24 NOTE [33] Notes forming part of the Consolidated Financial Statements (contd.) Statements Reports Report Financial Statutory Integrated Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 570 crore (viii) In respect of matters at (I), the cash outflows, if any, is fully reimbursable by the third parties under an agreement entered in to with them. (vi) In respect of matters at (h) to (j), the cash outflows, if any, could generally occur upto completion of projects undertaken by the respective joint operations. (v) In respect of matters at (g), the cash outflows, if any, could generally occur up to two years, being the period over which the validity of the guarantees extends. (iv) In respect of matters at (f), the cash outflows, if any, could generally occur up to four years, being the period over which the validity of the guarantees extends except in a few cases where the cash outflows, if any, could occur any time during the subsistence of the borrowing to which the guarantees relate. (iii) In respect of matters at (e), the cash flows, if any, could occur any time during the subsistence of the underlying agreement. (ii) It is not practicable to estimate the timing of cash outflows, if any, in respect of matters at (a) to (d) above pending resolution of the arbitration/appellate proceedings. Further, the liability mentioned in (a) to (d) above excludes interest and penalty except in cases where the Group has determined that the possibility of such levy is remote. (i) The Group expects reimbursements of 1.91 crore (previous year: 5.77 crore) in respect of the above contingent liabilities except in respect of matters at (I) (I) Indemnities for performance given on behalf of third parties Notes: 96.41 56.79 74.06 33.95 87.48 4407.38 (vii) In respect of matters at (k), the cash outflows, in any, could generally occur any time up to settlement of claims or during subsistence of the underlying agreements. Disputed: 1018.71 52267.07 2.45 1295.49 34 L&T Technology Services LLC USA 73.74 73.85 35 L&T Technology Services Pte. Ltd. Singapore 73.74 73.85 36 Graphene Solutions SDN. BHD. Malaysia 73.74 73.85 37 Graphene Solutions Taiwan Limited Taiwan 73.74 73.85 38 L&T Technology Services (Shanghai) Co. Ltd China 73.74 73.85 68.68 USA Cuelogic Technologies Inc. [c 33 28 LTI Mindtree (Thailand) Limited (formerly known as Nielsen&Partner Company Limited) Thailand 68.64 68.68 29 220 Nielsen&Partner Pty Ltd Australia 68.64 68.68 30 39 LTIMindtree UK Limited 68.64 68.68 31 LTI Mindtree Middle East FZ-LLC UAE 68.64 68.68 32 LTI Mindtree USA Inc. (formerly known as Lymbyc Solutions Inc.) USA 68.64 68.68 UK 68.68 L&T Technology Services (Canada) Ltd 73.74 100.00 100.00 47 L&T Valves Arabia Manufacturing LLC Kingdom of Saudi Arabia 100.00 100.00 48 L&T Valves USA LLC USA 100.00 100.00 [a] Under liquidation [b] Liquidated w.e.f July 10, 2023 [c] Liquidated w.e.f. April 26, 2023 [d] Merged with L&T Technology Services LLC w.e.f February 1, 2024 [e] Incorporated on October 30, 2023 [f] Liquidated w.e.f. August 26, 2023 578 Integrated Annual Report 2023-24 UAE L&T Global Holdings Limited 46 100.00 73.85 40 Orchestra Technology, Inc. [d] USA 73.85 41 L&T Technology Services Poland spółka z ograniczoną odpowiedzialnością le Poland 73.74 42 Mindtree Software (Shanghai) Co., Limited ('MSSCL'), Republic of China [f] China Canada 68.68 Larsen & Toubro (East Asia) Sdn.Bhd. 44 PT Larsen and Toubro Malaysia Indonesia 30.00 30.00 100.00 100.00 45 Larsen & Toubro International FZE UAE 100.00 43 68.64 Singapore Nielsen+Partner Pte Ltd L&T Information Technology Services (Shanghai) Co., Ltd.) 577 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [41] (contd.) Sr. No. Name of subsidiaries Principal place of business As at 31-3-2024 Proportion of effective ownership interest /voting As at 31-3-2023 Proportion of effective ownership interest/voting power(%) Foreign subsidiaries 13 LTI Mindtree Financial Services Technologies Inc. Canada 68.64 68.68 14 LTI Mindtree Canada Limited Canada 68.64 68.68 15 LTI Mindtree LLC Corporate Overview Management Discussion and Analysis Integrated Statutory 2.91 379.97 5.49 436.12 51.05 8638.94 938.76 25192.16 16324.39 18.05 Micro and small enterprises Others Undisputed: Total More than 3 years 2-3 years 1-2 years USA Less than 1 year Unbilled Dues Particulars crore Outstanding for following periods from due date of payment As at 31-3-2024 Current liabilities: Financial liabilities - Trade payables ageing NOTE [28][a] Notes forming part of the Consolidated Financial Statements (contd.) Statements Reports Report Financial Not due 68.64 68.68 16 Syncordis France SARL France 68.64 68.68 23 Syncordis Limited UK 68.64 68.68 24 LTI Mindtree PSF S.A. (formerly known as Syncordis PSF S.A.) Luxembourg 22 68.64 25 Nielsen+Partner Unternehmensberater GmbH Germany 68.64 68.68 26 LTIMindtree Switzerland AG (formerly known as Nielsen+Partner Switzerland 68.64 68.68 Unternehmensberater AG) 27 68.68 7 68.68 Luxembourg LTIMindtree South Africa (Pty) Limited South Africa 47.77 47.80 17 LTI Mindtree GMBH Germany 68.64 68.68 18 LTIMindtree Spain, S.L (formerly known as L&T Information Technology Spain SL) Spain 68.64 68.64 19 LTI Mindtree Norge AS Norway 68.64 68.68 20 LTIMindtree, Sociedad De Responsibilidad Limitada De Capital Variable Mexico 68.64 68.68 21 LTI Mindtree S.A. (formerly known as Syncordis S.A.) 68.68 L&T Modular Fabrication Yard LLC As at 31-3-2024 Larsen & Toubro Heavy Engineering LLC Principal place Name of subsidiaries Sr. No. NOTE [41] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Statements Reports Report Financial Statutory Integrated Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 576 of business As at 31-3-2024 Proportion of effective ownership 100.00 100.00 India L&T Valves Limited 51 100.00 100.00 100.00 India 50 Indian subsidiaries power(%) interest/voting power(%) Proportion of effective ownership interest/voting As at 31-3-2023 L&T Construction Equipment Limited 52 India LH Residential Housing Private Limited (formerly known as LH Residential Housing Limited) [s] India LH Uttarayan Premium Realty Private Limited [t] 43 100.00 India Bangalore Galaxy Techpark Private Limited [n] 42 100.00 India Bangalore Spectrum Techpark Private Limited [m] 41 100.00 India Avenue Techpark (Bangalore) Private Limited [] 40 100.00 6 Chennai Nova Techpark Private Limited[o] India 100.00 44 49 48 100.00 Corporate Park (Powai) Private Limited[r] 47 100.00 India 100.00 Bangalore Fortune Techpark Private Limited[r] 100.00 India Millennium Techpark (Chennai) Private Limited [q] 45 100.00 India Business Park (Powai) Private Limited [p] 46 L&T Energy Green Tech Limited (formerly known as L&T Power Limited) [u] India Merged with L&T Seawoods Limited on April 1, 2023 Struck off from register of companies w.e.f July 21, 2023 One equity share (the Golden Share) is held by the Government of Telangana in pursuance of the Shareholders' Agreement Merged with L&T Finance Holdings Limited w.e.f April 1, 2023 and post-merger the resultant entity is renamed as L&T Finance Limited Reclassified as subsidiary w.e.f December 27, 2023 and post-reclassification the company is renamed as L&T Offshore Private Limited Divested w.e.f September 26, 2023 [u] [t] [s] [r] Divested w.e.f April 17, 2023 [q] [0] [n] [k] [h] [g] [f] [e] [p] Incorporated on April 10, 2023 Incorporated on April 12, 2023 Incorporated on April 13, 2023 Incorporated on April 17, 2023 Incorporated on April 20, 2023 Incorporated on April 30, 2023 Incorporated on May 01, 2023 Incorporated on July 31, 2023 Incorporated on February 17, 2024 5 Larsen and Toubro T&D SA Proprietary Limited 4 Larsen & Toubro Saudi Arabia LLC 3 Larsen & Toubro Qatar LLC [a] 2 Larsen & Toubro (Oman) LLC 1 Foreign subsidiaries Name of subsidiaries Sr. No. Struck off from register of companies w.e.f August 08, 2023 [w] Incorporated on June 27, 2023 [v] During the year balance stake is purchased and entity became a wholly-owned subsidiary Merged with L&T Technology Services Limited w.e.f April 1, 2022 Incorporated on November 29, 2023 Merged with LTI Mindtree Limited w.e.f April 1, 2023 [m] 100.00 India 100.00 99.99 53 L&T Electrolysers Limited [v] India 100.00 [a] Divested w.e.f January 3, 2024 Bhilai Power Supply Company Limited India 99.90 99.90 [b] [c] [d] 54 100.00 L&T Capital Company Limited 57 100.00 SUN ¯ @ = σ € = = Z = € € Q Q Q = = z ¯ > India India L&T Aviation Services Private Limited 95.00 India Kesun Iron and Steel Company Private Limited [w] 55 56 100.00 As at 31-3-2023 385.18 (40.72) 340.10 Particulars 1546.77 320.06 (21.30) (53.26) Other comprehensive income 4.59 (133.95) 209.76 As at 31-3-2023 Dividend distributed during the year As at 31-3-2024 As at 31-3-2023 As at 31-3-2024 As at 31-3-2024 13.48 Profit/(loss) for the year (30.91) Opening net assets 1735.14 32.25 (234.10) 2.84 472.94 1.18 2292.45 1964.35 1300.10 984.40 Effective % of non-controlling interest 788.86 775.43 Group's share 51.00% 51.00% L&T - MHI Power Turbine Generators Private Limited 23.65 60.00% 51.00% 51.00% Group's share in % 340.10 319.98 209.76 171.88 1546.77 1520.45 Closing net assets 8.18 60.00% L&T Sapura Shipping Private Limited 1668.39 L&T - MHI Power Boilers Non-current liabilities 567.23 475.88 513.80 384.73 342.05 961.50 (C) Total current liabilities 295.17 356.46 40.86 42.68 Total comprehensive income Current liabilities 1461.04 Financial liabilities (excluding trade payables) 178.09 207.35 783.41 Other liabilities (including trade payables) 272.06 119.42 Financial liabilities (excluding trade payables) 0.18 0.51 0.17 crore (b) Reconciliation of carrying amounts of material joint ventures: 340.10 319.98 209.76 171.88 1546.77 1520.45 (A+B-C-D) Net assets 473.74 Private Limited 207.37 0.17 0.51 0.18 (D) Total non-current liabilities 67.00 69.77 Other liabilities (including trade payables) 406.74 137.60 0.47 0.47 (168.80) 0.11% 44.48 (28.63) 0.05% 0.02 23.10 (23.08) L&T Technology Services Limited 576.79 0.03 16.82 (16.79) 0.05% 0.02 4.39 Total 9.32 136.39 (127.07) 10.33 78.63 (4.37) (68.30) [1] Represents proportionate share of the net assets of subsidiaries. (b) The effect of divestment with ceding of control in subsidiaries during the year is as under: 28.65 0.02 0.04% LTIMindtree Limited Dilution Proceeds (Dr)/Cr to Non- (Dr)/Cr to Retained (%) interest [1] earnings received controlling Retained interest [1] crore earnings (formerly known as L&T Finance Holding Limited) 0.25% 9.27 90.92 (81.65) 0.15% 10.29 51.14 (40.85) L&T Finance Limited Sr. Name of company No. NOTE [42] (contd.) (c) Disclosure of subsidiaries having material non-controlling interest: (i) Summarised Statement of Profit and Loss 582 Particulars crore L&T Finance Limited (formerly known as L&T Finance Holding Limited) 2023-24 L&T Technology Services Limited 2022-23 2023-24 Notes forming part of the Consolidated Financial Statements (contd.) 2022-23 Profit/(loss) for the year 13107.78 12532.20 8678.90 7910.00 2286.23 1919.87 1258.50 1153.20 Other comprehensive income 6.22 Revenue 41.60 Notes forming part of the Consolidated Financial Statements 581 2023-24 2022-23 1 Think Tower Developers Private Limited - [1] 2 Mudit Cement Private Limited 5.88 3 L&T Infrastructure Engineering Limited (3.24) LARSEN & TOUBRO 4 Effect on consolidated profit before non- controlling interest Line item in Statement of Profit & Loss in which the gain is recognised Revenue from Operations Other income Other income 2595.20 Exceptional items before tax Total 2.64 2595.20 [1] Less than 1 Lakh L&T Investment Management Limited 447.43 (505.44) 452.97 Net assets (h)=(c)+(f)+(g) 1350.60 1635.20 5171.35 24265.49 Net non-current assets (f)=(d)-(e) 406.00 579.50 40664.66 33078.06 Non-current liabilities (e) 1756.60 2214.70 45836.01 57343.55 2853.70 3415.90 16147.49 (1070.53) 3161.40 2374.00 44043.59 46077.81 23194.96 21318.84 5051.10 4204.30 Net assets (g)=(c)+(f) Net non-current assets (f)=(d)-(e) Non-current liabilities (e) Non-current assets (d) Net current assets (c)=(a)-(b) Current liabilities (b) Current assets (a) Particulars NOTE [42] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Statements 6015.10 Reports Financial Statutory Integrated Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 1219.22 1430.26 7005.45 7900.69 Accumulated non-controlling interest Report 5789.90 60191.08 45007.28 4485.90 Profit/(loss) for the year 31975.50 34253.40 Revenue 2022-23 2023-24 Particulars LTIMindtree Limited crore 82.66 4248.20 41.76 Dividend to non-controlling interest 289.83 322.10 572.66 776.36 consolidation adjustments) Profit/(loss) allocated to non-controlling interest (including 26.15% 26.26% 33.89% (Dr)/Cr to 168.77 Accumulated non-controlling interest Other comprehensive income (683.40) Non-current assets (d) Net current assets (c)=(a)-(b) Current liabilities (b) Current assets (a) As at 31-3-2023 As at 31-3-2024 L&T Technology Services Limited L&T Finance Limited (formerly known as L&T Finance Holding Limited) As at As at 31-3-2024 31-3-2023 Particulars crore Summarised Balance Sheet 484.90 (ii) 556.54 Dividend to non-controlling interest 1291.25 1319.03 Profit/(loss) allocated to non-controlling interest (including consolidation adjustments) 31.32% 31.36% Effective % of non-controlling interest 3564.80 4970.80 Total comprehensive income 489.37 508.89 (iii) Summarised statement of cash flows LTIMindtree Limited As at As at 31-3-2024 As at 31-3-2023 L&T - MHI Power Turbine Generators Private Limited L&T Sapura Shipping Private Limited As at 31-3-2024 As at 31-3-2023 L&T - MHI Power Boilers Private Limited As at 31-3-2024 crore Particulars (a) Summarised Balance Sheet of material joint ventures: Disclosures pursuant to Ind AS 112 "Disclosure of interest in other entities": Joint Ventures and Associates NOTE [43] Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements LARSEN & TOUBRO 583 657.50 (465.50) (1980.20) (2162.60) (248.80) (3832.50) 2886.50 5529.60 As at 31-3-2023 Current assets Cash and bank balances Other assets 450.74 353.60 (B) Total non-current assets 804.28 555.80 215.14 103.81 2764.93 2128.53 (A) 2022-23 Total current assets 548.86 200.07 95.92 2497.75 1763.13 11.25 6.94 15.07 7.89 267.18 365.40 793.03 2023-24 LTIMindtree Limited crore Limited L&T Technology Services L&T Finance Limited (formerly known as L&T Finance Holding Limited) 34.14% Particulars crore 5290.68 6230.41 15977.00 19298.50 4555.50 2023-24 6586.10 1690.00 5910.60 8276.10 11421.50 12712.40 5104.90 5469.20 16526.40 18181.60 As at 31-3-2023 31-3-2024 1355.10 crore 2022-23 2022-23 Net increase/(decrease) in cash and cash equivalents Cash flows from financing activities Cash flows from investing activities Cash flows from operating activities Particulars 272.50 463.30 4195.73 (5544.27) Net increase/decrease) in cash and cash equivalents (434.20) 2023-24 (646.60) (7040.50) Cash flows from financing activities (560.20) (231.40) 858.79 Cash flows from investing activities 1266.90 1341.30 6360.44 637.44 Cash flows from operating activities (1659.27) (Dr)/Cr to Non- received controlling 18 Proceeds 13 Civil Works Joint Venture Kingdom of Saudi 29.00 29.00 Arabia 14 L&T-Shanghai Urban Construction (Group) Corporation Joint Venture India 51.00 51.00 15 DAEWOO and L&T Joint Venture India 50.00 50.00 16 L&T-STEC JV MUMBAI India 65.00 65.00 17 L&T-ISDPL (JV) 22.00 22.00 Qatar Aktor-Larsen & Toubro-Yapi Merkezi-STFA-Al Jaber Engineering Joint Venture Metro Tunneling Group India 26.00 26.00 8 L&T-Hochtief Seabird Joint Venture India 90.00 90.00 9 Metro Tunneling Chennai-L&T Shanghai Urban Construction (Group) Corporation Joint Venture India India 75.00 2123 10 11 Metro Tunneling Delhi-L&T Shanghai Urban Construction (Group) Corporation Joint Venture India L&T-Shanghai Urban Construction (Group) Corporation Joint Venture CC27 Delhi 60.00 60.00 India 68.00 68.00 12 75.00 7 100.00 18 India L&T Deccan Tollways Limited[c] 14 51.00 51.00 India L&T Rajkot-Vadinar Tollway Limited[c] 13 51.00 51.00 India L&T Chennai-Tada Tollway Limited [c] 12 51.00 51.00 India Rewin Infrastructure Limited [c] 11 51.00 51.00 India L&T Infrastructure Development Projects Limited[c] 10 51.00 52.89 15 L&T Samakhiali Gandhidham Tollway Limited [c] L&T-IHI Consortium India 100.00 100.00 19 Larsen and Toubro Limited-Scomi Engineering BHD Consortium-Residual Joint Works Joint Venture India 60.00 60.00 20 Larsen and Toubro Limited-Scomi Engineering BHD Consortium-O&M Joint Venture 100.00 India India L&T Sambalpur-Rourkela Tollway limited [c] 17 51.00 51.00 India Kudgi Transmission Limited (c 16 51.01 51.00 India 51.00 26.00 26.00 India 37.74 24 Watrak Infrastructure Private Limited [c] India 51.00 51.00 25 Raykal Aluminium Company Private Limited India 75.50 75.50 26 Indiran Engineering Projects and Systems Kish PJSC Iran 50.00 50.00 27 GH4India Private Limited[d] India 33.33 28 Hydrocarbon Arabia Limited Company[e] Kingdom of Saudi 37.74 India PNG Tollway Limited [c] 23 Panipat Elevated Corridor Limited[c] India 51.00 51.00 19 Vadodara Bharuch Tollway Limited [c] India 51.00 51.00 20 L&T Transportation Infrastructure Limited [c] 60.00 India 63.86 21 L&T Interstate Road Corridor Limited [c] India 51.00 51.00 22 Ahmedabad - Maliya Tollway Limited[c] India 51.00 51.00 51.00 29 L&T Infrastructure Engineering Limited and LEA Associates South Asia Private Limited JV LLP[f] Arabia 49.00 49.00 2 Larsen and Toubro Limited-Shapoorji Pallonji & Co. Ltd. Joint Venture India 50.00 50.00 3 Al Balagh Trading & Contracting Co W.L.L- L&T Joint Venture Qatar 80.00 India 80.00 L&T-AM Tapovan Joint Venture India 65.00 65.00 5 HCC-L&T Purulia Joint Venture India 43.00 43.00 6 International Metro Civil Contractors Joint Venture 4 50.00 Desbuild L&T Joint Venture As at 31-3-2023 Proportion of effective ownership interest (%) Maldives 61.00 [a] Reclassified as subsidiary w.e.f December 27, 2023 and post-reclassification the company is renamed as L&T Offshore Private Limited [b] Liquidated w.e.f September 25, 2023 [c] Divested w.e.f April 10, 2024 [d] Incorporated on August 25, 2023 [e] Incorporated on June 19, 2023 1 [f] 579 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [41] (contd.) Sr. Name of joint operations (with specific ownership interest in the arrangement) No. Principal place of business As at 31-3-2024 Proportion of effective ownership interest (%) Divested w.e.f January 3, 2024 Azerbaijan L&T Hydrocarbon Caspian LLC [b] 9 60.00 30 L&T Powerchina JV UAE 55.00 55.00 31 L&T - PCIPL JV India 99.00 99.00 32 Bauer- L&T Geo Joint Venture India 50.00 50.00 33 Larsen Toubro Arabia LLC - Subsea Seven Saudi Company Ltd. Kingdom of Saudi 50.00 50.00 Arabia 34 60.00 India L&T - Tecton JV 29 Larsen & Toubro Limited & NCC Limited Joint Venture India 55.00 55.00 25 Besix - Larsen & Toubro Joint Venture UAE 50.00 50.00 26 Larsen & Toubro Ltd - Passavant Energy & Environment JV L&T Infrastructure Engineering - LEA Associates South Asia JV [a] India 50.00 27 LNT-Shriram EPC Tanzania UJV Tanzania 90.00 90.00 28 LTH Milcom Private Limited India 56.67 56.67 50.00 India 61.00 35 Dilution of (Dr)/Cr to (Dr)/Cr to Dilution of (Dr)/Cr to (Dr)/Cr to stake on Non-controlling merger (%) Retained stake on Non-controlling Retained interest [1] 2022-23 earnings interest [1] earnings (1.93) 1.93 [1] Represents proportionate share of the net assets of subsidiaries. On account of dilution due to exercise of Employee Stock Options (without ceding control): crore 2023-24 2022-23 Name of Group companies Dilution merger (%) 5.32% 24 2023-24 LTIMindtree Limited L&T Infra Engineering JV United Consultancy [a] Bhutan 75.81 [a] Divested w.e.f January 3, 2024 580 Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated crore Statutory Report Reports Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [42] Disclosure pursuant to Ind AS 112 "Disclosure of interest in other entities": Subsidiaries (a) Change in the Group's ownership interest in a subsidiary: (i) On account of merger between non-wholly owned listed entities: (ii) Name of Group companies Financial (%) 75.00 Qatar 51.00 India L&T - MHI Power Turbine Generators Private Limited L&T MHI Power Boilers Private Limited 1234567 power(%) power(%) interest/voting of effective ownership Proportion As at 31-3-2023 Proportion of effective ownership interest /voting Principal place of business As at 31-3-2024 50.00 50.00 39.28 39.28 42.85 42.85 49.00 49.00 50.00 51.00 India 51.00 51.00 60.00 60.00 India L&T Sapura Shipping Private Limited 8 60.00 India L&T Sapura Offshore Private Limited[a] 51.00 51.00 India 50.00 L&T MBDA Missile Systems Limited 74.00 India L&T Special Steels and Heavy Forgings Private Limited 50.00 50.00 India L&T-Sargent & Lundy Limited 50.10 50.10 India L&T Howden Private Limited 74.00 power(%) power(%) interest /voting Statements Reports Report Financial Statutory Integrated Management Discussion and Analysis Corporate Overview 103.13 50.00 50.00 Notes forming part of the Consolidated Financial Statements (contd.) 21 India 100.00 100.00 22 L&T-Delma Mafraq Joint Venture 51.00 UAE 100.00 100.00 23 L&T-AL-Sraiya LRDP 6 Joint Venture L&T- Inabensa Consortium 75.00 NOTE [41] (contd.) Name of associates Proportion of effective ownership As at 31-3-2023 of effective ownership interest /voting Proportion As at 31-3-2024 Name of joint ventures Sr. No. [a] Under liquidation India Gujarat Leather Industries Limited [a] 5 Sr. India 4 India Magtorq Private Limited 3 UAE Qatar Larsen & Toubro Qatar & HBK Contracting Co. WLL L&T Camp Facilities LLC lal 2 1 Principal place of business No. Magtorq Engineering Solutions Private Limited 125.86 129.92 173.45 25.65 37.85 113.38 114.77 195.67 168.01 1276.72 1402.73 1.99 7.60 178.97 318.67 196.84 12.29 209.59 245.64 21.18 48.14 924.02 1262.73 Segment total Others Financial Services Developmental Projects IT & Technology Services 2.94 Hi-Tech manufacturing 323.62 90.98 Particulars 588 (a) Information about reportable segments: NOTE [46] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO 587 Note: There is no impairment/reversal of impairment in non-financial assets of the operating segments. 249.51 297.63 3502.25 110.41 3682.33 (23.35) (71.15) Inter-segment 0.92 248.35 1.16 20.40 408.32 101.69 Unallocable 3.34 277.23 3117.28 3651.79 Consolidated total Interest income included in segment income Infrastructure Projects Energy Projects 2023-24 6546.25 7239.09 14386.27 15214.32 7020.88 7020.30 26774.69 26212.32 84718.92 79165.68 104501.99 Segment total 100863.03 10548.67 39028.20 43582.80 6612.24 8875.58 9263.35 10228.88 19581.52 18772.84 23880.49 24564.66 9640.18 2022-23 317565.30 204473.44 2022-23 2023-24 than depreciation included in segment expense Non-cash expenses other expense Depreciation, amortisation, impairment & obsolescence included in segment Particulars crore 226785.09 237077.58 330352.31 304363.19 339627.24 (2973.58) (5084.77) (2973.58) (5084.77) Inter-segment assets/liabilities 33687.34 37688.91 28962.70 27146.71 Corporate unallocated assets/liabilities 196071.33 Consolidated total assets/liabilities Finance costs included in segment expense crore Profit/(loss) of associates and joint ventures accounted applying equity method not included in segment result 2023-24 3.08 1203.45 98.33 1161.72 102.90 161.25 558.96 Hi-Tech manufacturing 980.06 1266.25 Energy Projects 3803.20 2914.42 Infrastructure Projects IT & Technology Services 2022-23 As at 31-3-2023 Investment in associates and joint ventures accounted applying equity method included in segment assets As at 31-3-2024 Additions to non-current assets Particulars crore (94.25) (22.62) 6026.44 5714.90 1817.47 2447.07 2023-24 Consolidated total 3845.40 Financial Services 1264.25 7867.03 10492.54 Consolidated total (82.26) (1437.77) Inter-segment 149.64 2228.96 Unallocable 1304.86 2043.96 1264.25 9701.35 Segment total 572.84 926.33 Others (0.37) 49.38 44.00 Developmental Projects 188.96 145.99 7799.65 (183.91) (86.26) (605.20) 467.80 Financial Services 260.76 392.04 IT & Technology Services 58.05 3.93 0.49 Hi-Tech manufacturing (80.31) (29.14) 360.70 39.73 Energy Projects 4.51 3.97 2022-23 2022-23 202.35 2023-24 231.60 40.47 68.86 Infrastructure Projects 2022-23 2023-24 26.04 5377.19 5799.87 Developmental Projects (396.60) Inter-segment (202.35) (231.60) 1,607.92 1719.00 Unallocable (94.25) (22.62) 6412.70 6032.76 814.75 1124.67 Segment total (0.71) (0.01) 83.52 145.92 Others (75.79) (1.37) 410.48 423.97 29.57 23.52 61951.34 72851.28 86528.20 96899.29 87823.15 1105.79 86717.36 114008.21 1457.45 31.99 29538.91 Energy Projects 112550.76 Infrastructure Projects Total Inter- segment 29570.90 External Inter- segment External 2022-23 2023-24 crore Revenue Particulars 586 (a) Information about reportable segments: Disclosure pursuant to Ind AS 108 "Operating Segment": NOTE [46] Total Notes forming part of the Consolidated Financial Statements (contd.) 24907.15 24956.26 5024.36 5628.01 7.72 5620.29 Development Projects 12574.92 12574.92 13108.62 13108.62 Financial Services 41789.25 49.11 251.08 44916.31 443.63 44472.68 IT & Technology Services 7160.87 625.96 6534.91 8765.29 569.34 8195.95 Hi-Tech Manufacturing 41538.17 Notes forming part of the Consolidated Financial Statements LARSEN & TOUBRO 585 Acquisitions during the year: NOTE [44] Total Material joint ventures Sub-total Non-material joint ventures Non-material associates Particulars (f) Share in profit/(loss) of joint ventures/associates (net): 1304.86 1264.25 2023-24 Total 1041.75 Material joint ventures 216.69 222.50 Sub-total 208.62 213.54 8.07 8.96 31-3-2023 31-3-2024 1088.17 crore 2022-23 0.90 (2.33) 988.80 Development projects Investment in L&T Infrastructure Development Projects Limited and its subsidiaries As at 31-3-2023 1005.36 Development projects Investment in L&T Infrastructure Development Projects Limited Amount Reportable segment As at 31-3-2024 Particulars crore (b) The Group has following non-current assets recognised as held for sale: (a) The Company entered into a Share Purchase Agreement dated December 16, 2022 to sell its stake in L&T Infrastructure Development Projects Limited, a joint venture, primarily engaged in the development and operation of toll roads and power transmission assets. As on March 31, 2024, the investment in the joint venture is classified as "Held for Sale". Subsequently, the Company completed the sale on April 10, 2024, consequent to completion of customary conditions precedent as per the Share Purchase Agreement. Disclosure pursuant to Ind AS 105 "Non-current Assets Held for Sale and Discontinued Operations": NOTE [45] Acquisition of L&T Offshore Private Limited (formerly known as L&T Sapura Offshore Private Limited) On December 27, 2023, the Parent Company acquired balance 40% stake in L&T Offshore Private Limited (LTOPL). Post this transaction, the joint venture company has become a wholly owned subsidiary of the Group. It operates in the Energy Projects segment with the objective of carrying out installation of offshore structure. The net assets acquired by the Parent Company is 0.04 crore. The assets and liabilities are accounted for in accordance with the applicable Indian Accounting Standard. (94.25) (22.62) (166.87) (51.06) 72.62 28.44 74.95 27.54 4.41 1304.86 5028.77 7625.70 Profit for the year attributable to Owners of the (2059.90) (2487.99) Non-controlling interest 12530.62 15547.10 Profit for the year (94.25) (22.62) (net) Share in profit/(loss) after tax of joint ventures/associates Company 12624.87 (5055.17) 15569.72 Profit after tax 180.31 Deferred tax (5127.70) Current tax Tax expense: 17109.03 20517.11 Profit before tax 571.01 135.99 13059.11 Integrated Annual Report 2023-24 Others Development Projects Financial Services IT & Technology Services Hi-Tech Manufacturing Energy Projects Infrastructure Projects As at 31-3-2023 Segment liabilities As at 31-3-2024 As at 31-3-2023 31-3-2024 10470.72 Segment assets As at crore (a) Information about reportable segments: NOTE [46] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Statements Reports Financial Statutory Integrated Report Management Discussion and Analysis Corporate Overview Particulars 93.61 Exceptional items (net of tax) 16973.04 2700.63 5140.18 5720.93 Hi-Tech Manufacturing Energy Projects Infrastructure Projects Segment result [Profit/(loss) before interest and tax] 183340.70 183340.70 6270.78 226.95 2263.30 185604.00 (2263.30) (2263.30) 2066.69 (3377.32) 221112.91 Total (3377.32) Inter-segment revenue 183340.70 224490.23 3377.32 221112.91 Total 6043.83 8492.89 867.19 221112.91 1139.77 995.24 IT & Technology Services 20423.50 Profit before exceptional items and tax 1078.87 1447.00 Unallocated corporate income net of expenditure (3207.16) (3545.85) Finance costs (69.43) (248.61) Inter-segment margins on capital jobs 19170.76 22770.96 Total 1103.02 1507.70 Others 391.77 1014.73 2258.78 3028.41 7215.08 7658.79 Development Projects Financial Services Others Integrated Annual Report 2023-24 Notes forming part of the Consolidated Financial Statements 163.19 Report Financial Statutory Integrated Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 584 (45.08) (20.12) Reports 8.18 23.65 (110.30) (37.88) 45.73 (26.32) Total comprehensive income 2.84 13.48 4.59 Other comprehensive income (53.26) 1.18 Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [43] (contd.) Non-material joint ventures Non-material associates Particulars As at As at crore (e) Carrying amount of investments in joint ventures/associates: 72.89 28.36 0.27 (0.08) 72.62 28.44 Total comprehensive income for the year Other comprehensive income for the year Profit/(loss) for the year As at 31-3-2023 216.69 222.50 Aggregate carrying amount of investment in individually not material joint venture/associate Aggregate amounts of the Group's share of: 31-3-2024 Particulars As at (d) Financial information in respect of individually not material joint ventures/associates: (21.30) 0.04 (133.95) crore 32.25 351.43 2022-23 2023-24 275.78 58.45 2022-23 2023-24 162.50 2022-23 2121.13 1182.72 Revenue 2023-24 Interest income L&T Sapura Shipping Private Limited Particulars (c) Summarised Statement of Profit and Loss of material joint ventures: 173.45 163.19 125.86 103.13 788.86 775.43 Carrying amount (40.72) L&T - MHI Power Boilers Private Limited 20.05 L&T - MHI Power Turbine Generators Private Limited 1.86 (30.91) 21.33 Profit/(loss) for the year (0.05) (13.27) 8.34 Tax expense (53.99) (18.99) (23.03) (0.09) (0.60) 50.20 Finance cost (47.36) (46.34) (66.16) (68.64) (50.43) (37.95) Depreciation and amortisation 2.37 1.23 0.60 □ 380kV Substations and Overhead Line packages in Saudi Arabia 525kV HVDC Transmission Line package in Saudi Arabia □ Substation packages from the ongoing network expansion phase in Qatar □ 400kV Transmission Line packages in UAE and Kuwait □ 8 Nos. 132kV Substations in Kuwait □ A 400kV Substation and 3 Nos. 132kV Substation packages in UAE □ 400kV Transmission Line orders in Jharkhand and Chhattisgarh □ Distribution Infrastructure improvement projects in Rajasthan and Gujarat □ Receiving and Auxiliary Substations with SCADA for Chennai Metro Corridors 3 & 5 75MW Floating Solar order in India 765kV Transmission Lines related to the integration of Renewable Energy Zone in Karnataka 275kV Substation and Underground Cable laying order in Malaysia □ Upgradation of SCADA (Supervisory Control and Data Acquisition) at Transmission Asset Managing Centres for monitoring and control of 275 EHV Substations in India □ Certain Advanced Grid Services and Energy 400kV JNHPP Chalinze Transmission Line, Tanzania 50 Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial Reports Statements Projects completed and commissioned: 1.8GWp Sudair Solar Plant in KSA □ 2.8GWp Solar PV Plant EPC orders in the Middle East An integrated order involving Renewable Generation, Power, and Water Utilities for an ultra-luxury tourism destination in Saudi Arabia 15 Substations and 1409 CKM of overhead transmission lines in the Middle East Consulting Services in the USA for the Digital Energy Solutions business Major Orders Won: Integrated Report As the domestic power distribution space was fraught with aggressive customer estimates and a fragmented contractor base, the addressable opportunities were relatively lesser, for which the business was very particular. The recent revival of the order finalisation of transmission line packages for renewable energy evacuation provided a welcome relief. □ 5 Substations and 420 CKM of transmission lines in Africa Discussion and Analysis Corporate Overview Management Discussion and Analysis Statutory Financial Reports Statements 500kV Pulah Indah Olek Lempit Transmission Line, Malaysia The Transmission Line business unit provides complete EPC solutions for overhead transmission lines. It is well integrated with the digitally driven, sustainability-focussed tower manufacturing units, which have a combined capacity to produce more than 1 lakh tonnes of tower components per annum. The Kancheepuram manufacturing facility also houses the world-renowned Tower Testing and Research Station, which provides its design and testing services to clientele from 33 countries. The Power Distribution business unit has been at the forefront of distributing electricity in an efficient manner to all, by providing a range of EPC services related to urban/rural electrification, augmenting, reforming, and strengthening of high voltage and low voltage distribution networks, power quality improvement works, and advanced distribution management solutions. The International T&D business units provide the entire spectrum of power T&D-related services in the Middle East, Africa, and ASEAN regions. Over the past three decades, the Middle East business unit has earned a strong reputation among the utilities and oil companies in Saudi Arabia, UAE, Oman, Qatar, Kuwait, and Bahrain, having executed several marquee projects. It enjoys an enviable track record and garners a significant share of T&D projects awarded every year. Larsen & Toubro Saudi Arabia LLC (LTSA), a wholly- owned subsidiary, provides engineering, construction, and contracting services in the sphere of transmission & distribution in Saudi Arabia. The Africa business unit has executed several landmark projects in Algeria, Egypt, Morocco, Kenya, Ethiopia, Tanzania, Uganda, Botswana, Mozambique, and Malawi. It has made further inroads into Western & Northern Africa with ongoing projects in Guinea, Cameroon, and Tunisia. With the regional offices strategically located in Nairobi and Casablanca to serve the vast continent, the business has earned a coveted position with a sizeable market share in the addressable segment. In the ASEAN region, L&T is an established international T&D player, holding a portfolio of prestigious projects spread across Malaysia, Thailand, Myanmar, and the Philippines. The offices in Kuala Lumpur, Bangkok, and Jakarta serve as the touchpoints for the electricity companies in the region. The Digital Energy Solutions arm of L&T's Power T&D business provides electricity-related consulting and digital solutions globally through its 'Spark' platform, and a multitude of software products and solutions. Its cutting- edge offerings include hybrid energy management systems, energy storage controllers, substation data platforms, power system cyber security needs, etc. Driven by powerful algorithms and simulations, the solutions offered by this unit enable customers across India, the Middle East, and the USA to build resilient future-ready systems. The Power Transmission & Distribution business vertical aims to provide a green technology path to clean energy transition in India and abroad while providing customers and prosumers with the highest standards of reliability, availability, and efficiency of power transmission and distribution networks. 49 LARSEN & TOUBRO Infrastructure Projects Segment 400kV Ottapidaram, Tamil Nadu Business Environment A vibrant renewable energy market in the Middle East provides ample opportunities coinciding with a plethora of Power Transmission & Distribution related projects. This makes up for the relatively subdued environment in India and Africa. Further, these opportunities come with significantly higher package sizes, thereby aiding effective resource utilisation and facilitating volume growth. Due to ongoing disturbances in the Red Sea, the supply chain was impacted to an extent. However, the execution of projects has largely continued unhindered. The domestic Renewable Energy space is characterised by self-EPC execution by developers, land acquisition requirements, and e-reverse auctions. Selected opportunities were pursued with specific customers in niche areas, such as Floating Solar Plants. Major Achievements ㅁ Integrated Report region, including the Tallest Transmission Tower in Malaysia Outlook □ Steel frame Plastic Shutter panels to replace plywood & hardwood to improve productivity and quality besides being environmentally friendly □ Smart Health Station [An IOMT (Internet of Medical Things)-based Health Station] to enhance health monitoring of employees, including workmen □ Developed in-house Steel Structural Software System for managing 2 lakh metric tonnes of Structural Fabrication & Erection per annum Implemented Wrench Software, a central system which enables live project management Significant Initiatives: Freight Handling Package for Etihad Rail in UAE Three Drum Coolers supplied to Hindustan Zinc Limited as a successful import substitute on a repeat basis Mansourah-Massarah Gold Project in the Kingdom of Saudi Arabia Three Sets of High-Speed Rail equipment supplied in a record time of 9 months Largest capacity 1100TPH Aggregate Crushing export order supplied to JSW-Fujairah in UAE The developed countries in Europe, the USA, and Japan are relocating their steel production capacity to Asian countries due to economic and environmental concerns. India, with huge iron ore reserves, will be the major beneficiary of this diversification strategy, coupled with increased domestic production and consumption needs due to its rapid economic expansion. □ Aluminium refinery expansion for Hindalco at Tikri, Odisha Achieved a historic milestone of the 1000th Apron Feeder supplied to Shree Cement General Cargo Berth II for Kamarajar Port, Chennai, Tamil Nadu LARSEN & TOUBRO 57 1st Slab Caster for Tata Steel at Kalinganagar, Odisha □ Inaugurated CHP Dudhichua Phase-III in Madhya Pradesh, 10 MTPA CHP for Bhubaneswari Coal Mining Limited in Odisha, 7.5 MTPA CHP for North Urimari Birsa Coal Mine in Jharkhand, and 15 MTPA Lajkura Projects in Odisha ◉Alumina Refinery Expansion Project at Lanjigarh, Odisha, has been commissioned Key Projects Commissioned: □ An order for a Crushing Plant from Dalmia Cement First 300T Goliath Gantry Crane from Hindustan Shipyard Limited Highest-ever orders for twenty Stacker Reclaimers in a year □ Limestone crushing plant orders from Adani Cement □ Order from Mahanadi Coalfields Limited (MCL) for six Surface Miners A large order from ArcelorMittal Nippon Steel India (AM/ NS) for ten Stacker cum Reclaimers Infrastructure Projects Segment □ Upgradation of Blast Furnace 'G' at Tata Steel, Jamshedpur 160 KTPA Zinc Roaster 6 Package at HZL Debari, Rajasthan Auctioning and privatisation of mines drive more investments in mineral beneficiation & pelletisation of iron ore, which provides value-added and environment-friendly products to Iron & Steel plants both in India and facilitates exports. Iron & Steel capacity expansions by all major Indian companies are on track, buoyed by domestic consumption demand and elevated margins. 58 Zanzibar Water Supply Project, Tanzania 53 LARSEN & TOUBRO Gangadhar Meher Lift Irrigation Scheme, Bargarh, Odisha Infrastructure Projects Segment Significant Initiatives Multiple strategic initiatives were implemented during the financial year with an enhanced focus on digitalisation, mechanisation, and technology to make the business more future-ready in its quest to stay ahead in the competitive market. With a focus on operational excellence, the business implemented precast/hybrid construction methods (Intake, Pumphouses, Elevated Storage Reservoirs, and House Service Connections) across various projects to address the shortages in skilled manpower □ Predictive analytics incorporated in tendering based on historical data to estimate optimised tender Bills of Quantity (BOQ) with accuracy & speed, which has substantially reduced manual efforts and improved tendering efficiency Aerial survey using drones, extensive usage of ArcGIS software for auto-zoning of villages & volumetric calculations for large areas, Gap Information Monitoring App (GIMS), and House Service Connection app are some other key initiatives undertaken on the engineering & execution front Aluminium and Zinc in the non-ferrous sector are witnessing capacity expansions in all the existing plans by the major players like Hindalco, Vedanta, and HZL. The Minerals and Metals sector in the Middle East is emerging as a major investment destination due to low energy costs and investment-friendly policies and financing options, which coincides with their vision of expansion to non-oil areas. Expansion in freight handling and related infrastructure across the countries in the Middle East is also witnessing increased investments, mainly in the UAE and Oman. The Incident Potential Rate (IPR) dashboard helps monitor project execution and facilitates risk evaluation in real- time. This AI/NLP-enabled platform has fast-tracked management intervention that facilitated quick decision- making, resource planning, and mobilisation, culminating in a better EHS environment at the projects The business has piloted the 'Integrated Project Management System (IPMS)' in a few projects to foster Outlook The business is predominantly a B2G company with many state government departments as its clientele. The growth of the business is highly dependent on the policies of the central and state governments. In the Interim Government Budget for FY 2024-25, the Central Government has once again emphasised its vision of making India 'Viksit Bharat' by 2047, thereby underscoring the importance of the various welfare schemes for its citizens, which, in turn, is expected to further drive opportunities in the Water, Wastewater, and Irrigation sectors. Additionally, the Jal Jeevan mission (Har Ghar Jal) that aims to provide piped water to every rural household will continue to provide opportunities in the arena of potable water infrastructure and ancillary services. On the International Business front, the Middle East (especially the Kingdom of Saudi Arabia) presents new business horizons with ongoing mega-development projects. The business will collaborate with strategic partners to leverage opportunities that are aligned with regional priorities and economic growth initiatives. Domestic competition remains fierce with a low entry barrier and emergence of new entrants, due to which innovation and technological advancements become critical for sustained business growth. Amidst these opportunities, challenges like commodity price volatility and increased cost pressures persist 54 Integrated Annual Report 2023-24 Corporate Management Overview Integrated Annual Report 2023-24 seamless collaboration across departments, enhance visibility into all aspects of project management, and mitigate risks proactively 5 MTPA Steel Melt Shop augmentation at Dolvi, Maharashtra, for JSW Steel New 5 MTPA Blast Furnace at Dolvi, Maharashtra, for JSW Steel With increased demand and growth in industrial sectors domestically, the following are a few highlights & prestigious orders received: 138 CKM of 500kV transmission lines in the ASEAN Bucket Wheel Stacker reclaimer for JSW Dolvi, Maharashtra LARSEN & TOUBRO 55 With all these positives, major metal manufacturers are in the process of CapEx expansion, which should augur well for the business. The discovery of lithium deposits for the first time in the country is likely to fuel industry growth. Further, with the Central Government approving the lithium mining auction proposal, private companies will be able to participate in such tenders. The same is expected to enhance business prospects in the non-ferrous segment as well. Similarly, India's annual steel consumption was ~130 MT for FY 2023-24, recording a growth of 8% over the previous year. The Government's impetus on infrastructure development and the 'Make in India' initiative have played a significant role in boosting metal consumption. Improved volumes coupled with better realisations have helped the metal industry to substantially de-leverage its balance sheets and have paved the way for a fresh CapEx investment cycle. Currently, India is the second-largest crude steel producer in the world. Domestic steel consumption has witnessed consistent robust growth, driven by sectors like infrastructure, automotive, construction, and consumer goods. In FY 2023-24, the cumulative production of crude steel was above 140 MT, registering a growth of 11% on y-o-y basis. Domestic Business Business Environment International Business The complete range of product solutions is backed by five decades of knowledge & experience, in-house design capabilities, and state-of-the-art manufacturing facilities, providing after-sales product support and value-added & cost-effective services to ensure higher uptime. The manufacturing centres are in Kansbahal, Odisha and Kancheepuram, Tamil Nadu. L&T's Minerals & Metals (M&M) business offers complete EPC solutions for the Minerals & Metals sector across targeted geographies. The business undertakes end-to- end engineering, procurement, manufacturing, supply, construction, erection, and commissioning of projects, covering the complete spectrum from mineral processing to finished metals. Overview Minerals and Metals planning and improved risk management practices to counter these challenges. across the industry. The business will focus on strategic Alumina Refinery Expansion Project at Vedanta Lanjigarh, Odisha Statements Reports Financial Statutory The business also offers comprehensive product solutions with an array of customised Mineral Crushing Equipment and Plants for varied applications, surface miners, material handling, high-speed railway construction equipment, steel plant machinery, and other custom-made critical equipment & complex assemblies catering to core industrial sectors including mining, steel, ports, fertilisers, cement, chemical plants, etc. Minerals & Metals has found renewed focus in the Middle East as countries keep funnelling investments to new mineral exploration & conversion to metal as part of their long-term strategy. Driven by the need to diversify beyond oil, investments in mega-to-giga infrastructure projects/ factories are on the anvil as the GCC region is embarking on an actionable road map to exploit its other mineral resources, led by the Kingdom of Saudi Arabia. The Middle East is emerging as a major transit centre for setting up low-carbon emission Iron & Steel hubs and is attracting investments by offering low gas prices, lower power tariffs, and flexible policies. New opportunities are expected in aluminium, gold, phosphate, copper, and new-age minerals as sponsors evaluate the likely approach to embark on setting up new plants, as well as expanding existing facilities to cater to increasing demand. Major Orders Won: Major Achievements Port Sector: The port segment in India is expected to experience significant growth due to various Government initiatives aimed at promoting port-led development, like the SagarMala initiative and Maritime India Vision 2030. Steady growth of 7% y-o-y basis is evaluated in container traffic expected till 2030, with Government and private players investing in the expansion of container terminals. The business has signed a license agreement with Konecranes, Finland, to manufacture and supply technologically advanced cranes for Indian ports and shipyards. The business has started the supplies of the first order of ELLs (Electric Level Luffing Cranes) for Cochin Shipyard Limited in the current year. With good prospects in the pipeline from all major players in Ports and Shipyards, FY 2024-25 holds good potential for locally manufactured equipment. Construction Sector: Growth in infrastructure projects drives growth in Aggregate Crushing solutions. Enhanced budget allocation for roads and highway projects in FY 2024-25 will further ensure tremendous growth opportunities for Aggregate Crushing solutions. The current year also witnessed increased order inflow for Surface Miners, Apron Feeders, Stacker Reclaimers, Wagon Tipplers, Paddle Feeders, and Coal-Crushing Equipment from the above sectors. The momentum is expected to continue in the coming years, with promising growth plans for the mining and steel players. Freight Handling Facilities for Etihad Rail, UAE Statements Reports Financial Statutory Integrated Report Discussion and Analysis Management Corporate Overview Integrated Annual Report 2023-24 56 Mining & Steel Sector: The spurt in capacity augmentation of steel plants and continued augmentation of capacities in coal and iron ore to cater to the growing steel and power demand have increased the business potential for Surface Miners and Skid Mounted Coal Crushers. New investments in coal-based thermal power plants have also led to an increase in the business potential for equipment ranges covering crushers, stacker reclaimers, plough feeders, etc. It is estimated that the Indian cement industry is likely to add ~30 MT capacity in FY 2024-25, majorly due to the growth in housing, industrial, commercial and infrastructure projects. The business has some unique solutions in mining and stockyard equipment, which will be pursued across the African continent and other international markets as well. The demand for core products (like Crushing Systems, Surface Miners, Material Handling Equipment, High-Speed Rail Equipment, and Port Cranes) is primarily driven by movement in the following industrial sectors: Cement Sector: The cement segment in India is expected to grow at a CAGR of 5%-6% over the medium-term, with large investments in greenfield and brownfield projects. Major cement players in the country are undertaking ambitious expansion plans to capitalise on this growth potential. and has successfully secured repeat orders for Surface Miners from African markets, and expects the momentum to continue in the medium-term. The outlook for the Product business is positive, with the user industry poised for growth, driven by the Government's focus on the development of infrastructure and housing construction activities. The business has been actively pursuing prospects in select international markets Product Business In Africa, investments in Minerals & Metals continue to be a mainstay, since many of the countries are rich in a wide variety of valuable minerals/resources. However, challenges around the speed and scale of implementation limit the entry of the business to offer complete services. □ 30 MLD Common Effluent Treatment Plant, Gujarat □ Sauni L3P8, Gujarat Infrastructure Projects Segment Water & Effluent Treatment In specific countries of Africa and ASEAN, the business will leverage its proven track record, established relationships with various stakeholders, and ability to access the project finance market in order to pursue select opportunities arising from Just Transition initiatives, grid interconnection requirements, and renewable proliferation. The GCC countries have set ambitious renewable energy addition plans for 2030, which are backed by action on the ground. Besides diversification of fuel mix, renewable energy for Green Hydrogen is another major driver. Our reputation and relationships with the major developers in the region are expected to fuel the growth of the business in the adjacent regions as well. Renewable electricity has emerged as the preferred source of energy in varied applications and industries. Significant investments for enhancing renewable energy capacity are witnessed in both developed and emerging economies. Novel solutions involving a spectrum of renewable technologies, including wind and energy storage, are being integrated for solar generation. This proliferation of renewable energy goes hand in hand with the multi-fold expansion of transmission grid infrastructure. Outlook Initiated a global strategic partnership with Dell Technologies for synergistic use of high-end computing power with software solutions for energy utilities □ Memorandum of Understanding (MOU) signed with IIT Indore for Advanced Research & Development in renewable energy integration and control technologies Innovation in anchoring & mooring methods for floating solar projects Significant Initiatives □ 35MW Solar Plant with 57MWh Battery Energy Storage System in Gujarat 220kV Substation & Transmission Line in West Bengal Improved Distribution Infrastructure by adding 1531 Ring Main Units and 1450+KM of cable conversion in Uttar Pradesh, West Bengal, Haryana, and Jammu □ 400kV Substations & Transmission Lines in Tamil Nadu and Uttar Pradesh In India, a significant increase in the capacity of solar module manufacturing in the past year will improve input costs and delivery timelines, given the compulsory requirement to meet Approved List of Models and Manufacturers (ALMM) stipulations. Further, the tendering of the on-the-ground and floating solar plants by the Central and State Public Sector Enterprises will be the mainstay in the coming years. 220kV Transmission Line and two Substations in Nepal at high altitudes that entered the 'Malaysia Book of Records' for smart cities. Desalination projects are also undertaken by this vertical. The Water International business vertical focusses on providing complete water solutions in the markets of the Middle East, East Africa, and SAARC (South Asian Association for Regional Cooperation) countries. Business Environment With the Government's focus on water infrastructure development, the business foresees significant market opportunities in the Urban Water & Water Management, Wastewater, Industrial & Desalination, and Irrigation sectors. The business faces industry-specific challenges, including intense competition from established players and new entrants, workforce shortages, commodity price fluctuation, and cost escalations. Despite these challenges, the business remains resilient and actively addresses these headwinds through improved productivity and timely project implementation with exceptional quality and safety standards, thereby meeting stakeholder expectations. In the Middle East region, the water demand is expected to grow significantly as huge spending is envisaged in the areas of desalination and treatment of wastewater & industrial effluents. The conscious pursuit of value-accretive opportunities in the Middle East is a risk mitigation to a high-growth but commoditised domestic market. Major Achievements Major Orders Won: Ballia Water Supply Project, Uttar Pradesh Firozabad Water Supply Project, Uttar Pradesh 50 GIS bays in Thailand 51 LARSEN & TOUBRO Water Treatment Plant at Nashik, Maharashtra Statements Statutory Integrated Report Discussion and Analysis Management Corporate Overview Integrated Annual Report 2023-24 52 The Water & Wastewater business vertical provides water solutions to the municipal water sector. In the potable water arena, it undertakes projects that encompass sourcing, treatment, transmission, storage, and distribution for the entire value chain, from intake to households. In the municipal wastewater segment, projects involve the collection and conveyance of sewage, pumping stations, and wastewater treatment, including the treatment of sludge to the highest standards and generation of power. The Irrigation, Industrial, and Infrastructure business vertical caters to the needs of the irrigation and industrial sector by providing a wide variety of water solutions, including mega & micro irrigation, treatment of industrial effluent, plant water systems, and water infrastructure (ii) Irrigation, Industrial, and Infrastructure (iii) Water International (i) Water & Wastewater L&T's Water & Effluent Treatment business is structured into three verticals: The business has a unique Water Technology Centre (WTC) in Kancheepuram, near Chennai, which has state-of-the-art laboratories to develop solutions for the ongoing/emerging challenges in the Water sector. India and at various international geographies. The business is recognised for its successful implementation of large- scale projects nationally and globally, delivering clean water, sanitation facilities, and efficient treatment processes for the community. These efforts not only enhance public health and quality of life but also promote economic growth and sustainable development. L&T's Water & Effluent Treatment (WET) business is a technology-driven EPC business dedicated to delivering comprehensive solutions in the water space, through best- in-class project management, technological capabilities, and treatment process know-how. The business caters to varied customer segments for municipal water (potable & waste), irrigation, industrial water, desalination, and smart water infrastructure by implementing treatment plants, storage & pipeline networks for water supply & wastewater, irrigation, and industrial applications across Overview Varanasi Sewage Treatment Plant, Uttar Pradesh The influx of orders coupled with ramped-up execution and efficient working capital cycle provide a strong ground for improved return ratios in the business. The ability to provide a range of advanced physical and digital solutions, including Dynamic Reactive Power Compensation, Hybrid Energy Management Systems, and EV Charging Infrastructure at scale, gives the business an edge over competitors. 765kV Transmission Line and Substation opportunities, mainly for the purpose of renewable energy evacuation, will continue to provide stable order inflow in the medium- term, besides HVDC corridors and Metro Rail projects. From select DISCOMs, distribution modernisation opportunities such as Loss Reduction Works and Supervisory Control and Data Acquisition (SCADA)/Advanced Distribution Management System (ADMS) packages are expected to gain momentum. Infrastructure Projects Segment □ AMAALA Utilities Water Package, KSA □ Chittorgarh Package I Water Supply Project, Rajasthan Mega Lift Irrigation Project Cluster XXII & XXV in various Districts, Odisha □ Southwest Guwahati Water Supply Project, Assam Effluent Treatment Plant for Talcher TPP Stage III, NTPC, Odisha Major Projects Commissioned: Financial □ Chhatarpur Water Supply Scheme, Madhya Pradesh Jawai Water Supply Project, Rajasthan □ Coimbatore Sewage Treatment Plant, Tamil Nadu □ Diggian Sewage Treatment Plant, Chandigarh Reports □ Gangadhar Meher Lift Irrigation Project, Odisha Shivhar Water Supply Scheme, Uttar Pradesh □ Ranchi Smart City, Jharkhand More than 10 million people benefitted from the commissioning of 32 projects during FY 2023-24. Some of the major projects commissioned during the year are: Tax losses (Capital loss) 4667.98 2629.33 ΝΑ FY 2024-25 to FY 2031-32 5086.29 2590.06 NA FY 2023-24 to FY 2030-31 (40.35) 12452.36 12515.72 (ii) Unrecognised deductible temporary differences for which no deferred tax asset is recognised in Balance Sheet: crore Sr. As at Particulars No. - Amount of losses having no expiry Total FY 2031-32 FY 2023-24 to (200.77) 7.57 4968.22 4256.20 24.19% 25.21% (c) (i) 598 Particulars As at 31-3-2024 crore Expiry year As at 31-3-2023 crore Expiry year Tax losses (Business loss and unabsorbed depreciation) - Amount of losses having expiry 4839.37 FY 2030-31 5155.05 FY 2024-25 to (230.15) 31-3-2024 20537.94 2022-23 2023-24 (c) Tax on accounting profit [(c)=(a)*(b)] (b) Corporate tax rate as per Income Tax Act, 1961 Profit before tax (including exceptional items): Particulars (a) Sr. No. crore (b) Reconciliation of Income tax expense and accounting profit multiplied by domestic tax rate applicable in India: NOTE [51] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements LARSEN & TOUBRO 597 (385.52) 155.23 Income tax expense/(income) [(i)+(ii)] (311.77) 191.14 (3.55) (1.74) On exchange differences in translating the financial statements of foreign operations (53.21) 26.97 On gain/(loss) on fair valuation of debt instruments 16881.07 53.64 25.17% 5168.99 66.14 (106.01) (207.23) (15.06) (206.41) (254.70) (309.63) Unused tax losses for which no deferred tax asset is recognised in Balance Sheet: Tax expense recognised during the year [(e)=(c)+(d)] Effective tax rate [(f)=(e)/(a)] Total effect of tax adjustments [(i) to (viii)] (viii) Tax effect on various other Items (vii) Tax expense of earlier years (vi) Effect of lower tax rate on capital gains (v) Effect of deferred tax due to change in income tax rate (iv) Effect of previously unrecognised tax losses used to reduce tax expense (e) 413.97 248.08 (iii) Tax effect of losses of current year on which no deferred tax asset is recognised 170.39 (140.82) (ii) Tax effect on impairment/(reversal) and fair valuation losses/(gains) recognised on which deferred tax asset is not recognised 65.76 69.03 Tax effect on Corporate Social Responsibility expenses, not tax deductible (d) (i) 4248.63 25.17% (a) Towards provision for diminution in value of investments/loans 1929.03 Infrastructure return at the end of the concession period Funding from grantor Remuneration Period of the concession (h) The Group has undertaken a project for construction, operation and maintenance of the Metro Rail System on Design-Build-Finance- Operate-Transfer (DBFOT) basis as per the concession agreement with the government authorities. The significant terms of the arrangement are as under: 9978.95 27805.89 18710.62 Initial period of 35 years and extendable by another 25 years at the option of the concessionaire subject to fulfilment of certain conditions under concession agreement. Considered further extension of initial concession period by 7 years in terms of Article 29 of Concession Agreement. 12107.68 4 to 5 years 12857.99 Beyond Time for expected conversion in revenue 1 to 2 years 2 to 3 years 3 to 4 years 158114.25 67877.58 145550.78 66675.00 1 Year 219544.63 170444.59 505688.11 423467.62 Upto Total 5 years 19487.78 As at March 31, 2023 Fare collection rights from the users of the Metro Rail System, license to use land provided by the government for constructing depots and for transit oriented development and earn lease rental income on such development and grant of viability gap fund. Being DBFOT project, the project assets have to be transferred at the end of concession period. (c) issuance of Golden Share to the Government (b) change in ownership (a) project agreements Major obligations of the concessionaire are relating to: Further extension of 25 years will be granted at the option of the concessionaire upon satisfaction of Key Performance Indicators laid under the concession agreement. This option is to be exercised by the concessionaire during the 33rd year of the initial concession period. Termination of the concession agreement can either be due to (a) force majeure (b) non political event (c) Indirect political event (d) political event. On occurrence of any of the above events, the obligations, dispute resolution, termination payments etc are as detailed in the concession agreement. (a) NOTE [48] Viability Gap Funding of 1458 crore. Construction revenue recognised Rights & Obligations Renewal and termination options NOTE [47] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements LARSEN & TOUBRO 593 Classification of service arrangement As at March 31, 2024 Outstanding performance crore 4015.43 278518.15 Outstanding performance and time for its expected conversion into revenue: [1] including full value of partially executed contracts Closing contracted price of orders on hand as at March 31 [1] (i+ii+iii+iv) Balance revenue to be recognised in future viz. Order book (iv) Increase/(Decrease) due to exchange rate movements (net) (iii) 228776.72 Less: Revenue out of orders completed during the year Revenue out of orders under execution at the end of the year (i) Revenue recognised upto previous year (from orders pending completion at the end of the year) (ii) Orders completed during the year Less: Addition/(deletion) on account of business combination/divestment Increase/decrease) due to exchange rate movements (net) and others Increase due to additional consideration recognised as per contractual terms/(decrease) due to scope reduction (net) Fresh orders/change orders received (net) 849547.00 978212.48 Closing contracted price of orders on hand as at March 31 [1] Total revenue recognised during the year 5056.73 (306.26) 3829.87 423467.62 978212.48 1139986.52 505688.11 (2413.84) (1339.81) 425947.50 131211.20 176194.88 459443.34 38063.73 29418.23 169274.93 205613.11 978212.48 1139986.52 114209.87 124283.14 9041.90 (d) maintenance of aesthetic quality of the Rail System (254.99) (e) operation and maintenance of the rolling stock and equipment necessary and sufficient for handling users equivalent to 110% of the Average PHPDT etc. (a) providing required constructible right of way for construction of rail system and land required for construction of depots and transit oriented development 47423.40 13 2364.51 4255.68 11 months months 1347.55 Total twelve Note Within After Within As at 31-3-2023 As at 31-3-2024 twelve crore 17 18 As at 31-3-2023 2316.05 (b) Arising out of upward revaluation of tax base of assets (on account of indexation benefit) 4156.49 3734.53 (c) Other items giving rise to temporary differences 106.54 1371.25 Total 7456.77 7737.40 Integrated Annual Report 2023-24 148.51 5415.41 54371.16 19 1686.82 Other current assets 5 Other financial assets Integrated Annual Report 2023-24 594 One-time charge of 2010.86 crore (net of tax) on remeasurement of the wholesale loan assets of Financial Services segment at fair value instead of at amortised cost, pursuant to the strategic decision to reduce the said portfolio through accelerated sell down. (ii) (i) Gain of 2146.85 crore (net of tax) on divestment of the Mutual Fund business of the Financial Services segment. (b) Exceptional Items (net of tax) for 2022-23 include: (ii) Reversal of impairment of investment in L&T IDPL net off customary closing adjustments: 33.05 crore. Corporate Overview Gain on divestment of stake in L&T Transportation Infrastructure Limited, a subsidiary of L&T Infrastructure Development Projects Limited ("L&T IDPL"): 60.56 crore. Exceptional Items (net of tax) for 2023-24 include: 8.50 crore (previous year: 20.67 crore) [included in Note 47(a) above] The service arrangement has been classified as a Service Concession Arrangement for a PPP project as per Appendix C to Ind AS 115 - Revenue from contracts with customers. Accordingly, construction revenues and expenses are accounted during construction phase and intangible asset is recognised towards rights to charge the users of the system. (e) obligations relating to supply of electricity etc. (d) obligations relating to competing facilities (c) providing reasonable assistance in obtaining access to all necessary infrastructure facilities and utilities (b) providing reasonable support and assistance in procuring applicable permits required for construction (i) Management Discussion and Analysis Integrated Statutory 4 Other loans 3 Trade receivables 2 Inventories 1 Particulars Sr. No. (a) Current assets expected to be recovered within twelve months and after twelve months from the reporting date: Disclosure pursuant to Ind AS 1 "Presentation of Financial Statements": NOTE [49] Notes forming part of the Consolidated Financial Statements (contd.) Statements Reports Report Financial Major obligations of the Government are: 165.88 Income tax expense/(income) [(i)+(ii)] (0.02) 3493.47 595 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [50] Disclosure with regard to changes in liabilities arising from financing activities as required by Ind AS 7 "Statement of Cash Flows": crore Non-current Current Sr. No. Particulars borrowings borrowings (Note 22) (Note 26) Current maturities of long- term borrowings (Note 27) Non- current lease liability Current lease liability Total i Balance as at 1-4-2022 61618.31 30476.96 31372.96 !!! !! Additions to lease liability Changes from financing cash flows 23567.88 851.70 48932.42 7441.94 42166.55 iv Effect of changes in foreign exchange rates 5732.66 654.86 3457.51 twelve months twelve months Total twelve months After twelve months Total 513.61 34.06 547.67 439.27 51.48 490.75 995.75 28 51532.67 22.96 741.50 29 30 7553.13 42102.75 1018.71 52274.17 22.54 7575.67 10230.98 52333.73 761.17 45918.99 7418.01 36433.89 90.53 3013.43 23.93 31 3195.44 262.07 2838.61 Note 157.82 Interest accrued (net of interest paid) xi Additions to lease liability xii Changes from financing cash flows 22084.03 xiii Effect of changes in foreign exchange rates χίν Interest accrued (net of interest paid) 34.16 819.62 (2871.15) 6.12 (195.29) (23315.25) XV Other changes (transfer within categories) (27131.24) 0.01 (516.85) 27131.24 xvi De-recognition on termination/divestment (1.73) 1646.31 686.21 (275.10) 21.32 0.18 (116.43) (227.71) 490.75 98.84 (184.79) 120650.44 785.05 (4562.26) 27.33 88.94 (0.18) 116.43 107.48 (0.71) 26399.38 V 30896.32 Balance as at 31-3-2023 (x = i to ix) 844.05 357.40 71.50 (9.54) (28421.94) 1633.31 449.87 (225.62) 406.54 86.47 125508.08 (197.72) 536.34 (4920.00) vi Other changes (transfer within categories) (24905.75) 0.11 (1457.50) 24905.75 9.17 26.33 264.93 (622.99) vii De-recognition of lease liability viii Addition on account of business combination (176.79) (46.55) 2.92 176.79 (10.43) 2.77 ix Classified as deferred government grant (64.63) (56.98) 5.69 (64.63) X 61217.68 Within After Within 5503.52 5148.53 66.14 (106.01) Tax expense of earlier years (259.69) (311.90) Effect of previously unrecognised tax losses and tax offsets used during the year 5697.07 5566.44 Current income tax expense (i) Current income tax: (a) Profit and Loss section: Consolidated Statement of Profit and Loss: 2022-23 2023-24 Particulars Sr. No. crore (a) Major components of tax expense/(income): Disclosure pursuant to Ind AS 12 "Income Taxes": NOTE [51] Notes forming part of the Consolidated Financial Statements (contd.) Statements Reports Opening contracted price of orders on hand as at April 1 [1] Add: Financial Statutory Integrated (ii) Deferred tax: Management Discussion and Analysis Tax expense on origination and reversal of temporary differences (1252.32) 0.03 On gain/(loss) on cost of hedging reserve (B) Deferred tax expense/(income): (66.96) (44.52) (66.96) (44.52) On gain/(loss) on cash flow hedges other than mark to market (A) Current tax expense/(income): (ii) Items that will be reclassified to profit or loss: 0.69 0.99 0.69 0.99 (7.48) 7.62 (7.48) 7.62 On remeasurement of net defined benefit plans (B) Deferred tax expense/(income): On remeasurement of net defined benefit plans (A) Current tax expense/(income): (i) Items that will not be reclassified to profit or loss: (b) Other comprehensive income section: 5.00 (1247.32) 4256.20 (180.31) 4968.22 xvii 2.27 Effect of previously unrecognised tax losses and tax offsets on which deferred tax benefit is recognised (182.58) Corporate Overview Integrated Annual Report 2023-24 596 xviii (517.28) (517.28) Classified as deferred government grant Total 251.15 4889.12 251.15 40.98 8854.63 4930.10 65920.39 (b) Current liabilities expected to be settled within twelve months and after twelve months from the reporting date: Sr. No. Particulars 1 Lease liability 2 Trade payables: Due to micro enterprises and small enterprises Due to others 3 Other financial liabilities 4 Other current liabilities 5 Provisions crore As at 31-3-2024 As at 31-3-2023 Balance as at 31-3-2024 (xviii = x to xvii) 56506.97 27834.27 29698.53 (4920.00) (4562.26) Total changes from financing cash flows (e = a to d) e (423.34) (459.89) Repayment of lease liability d 357.40 (2871.15) Proceeds from/(repayment of) other borrowings (net) с (32794.99) (24356.65) On mark to market gain/(loss) on cash flow hedges Report b 27940.93 23125.43 Proceeds from non-current borrowings a 2022-23 2023-24 Particulars Sr. No. crore Amounts reported in Statement of Cash Flows under financing activities: 116322.22 547.67 1734.78 Repayment of non-current borrowings After twelve twelve months months 4533.84 2294.94 6828.78 43565.31 1166.22 44731.53 2023-24 1602.44 16511.14 Year (b) Break up of revenue (as per Ind AS 115) into over a period of time and at a point in time: 183340.70 6043.83 5024.36 1111.97 164.54 14065.77 12574.92 12331.78 6534.91 41538.17 64.05 6470.86 41538.17 243.14 3912.39 5879.29 169274.93 532.69 68745.94 5346.60 100528.99 Total Others 2023-24 2022-23 crore Over a period of time crore 4414.84 2023-24 Provision on trade receivables Provision as at April 1 Particulars (c) Movement in expected credit loss ("ECL") during the year: 3912.39 NOTE [47] (contd.) Notes forming part of the Consolidated Financial Statements LARSEN & TOUBRO 591 12551.67 13932.79 191680.32 156723.26 At a point in time Notes forming part of the Consolidated Financial Statements (contd.) Provision on contract assets Development Projects Financial Services Foreign Revenue as per Ind AS 115 2022-23 Domestic Segment crore 7625.70 221112.91 5620.29 1582.65 84.33 15499.80 13108.62 13107.78 44472.68 44472.68 0.84 4037.64 7541.37 205613.11 95039.31 110573.80 Other revenue Total Infrastructure Projects 67200.02 37831.27 3706.90 IT & Technology Services 1551.84 4919.02 Hi-Tech Manufacturing report 86717.36 24907.15 243.14 Loss/Segment Total as per Statement 40.58 352.85 86364.51 24866.57 9665.65 Energy Projects 19164.49 of Profit and Total 2022-23 6620.19 48770.95 106.54 5563.92 70882.30 57065.76 (e) Cost to obtain/fulfil the contract: Revenue recognised from opening balance of contract liabilities amounts to ₹ 11846.91 crore (previous year: 8316.01 crore). (iii) Revenue recognised from the performance obligation satisfied (or partially satisfied) upto previous year (arising out of contract modifications) amounts to ₹940.22 crore (previous year: 35.32 crore). Decrease in net contract balances is primarily due to lower revenue recognition as compared to progress bills raised in both the years. (ii) (4719.80) 8014.27 16740.97 balances (A-B) 21460.77 30781.57 38795.84 52242.34 55536.81 3294.47 16740.97 12603.19 (4137.78) 38795.84 47522.14 8726.30 60125.33 4588.52 55536.81 (B) (i) Amortisation in Statement of Profit and Loss: 31.84 crore (previous year: 48.96 crore). (ii) Recognised as contract assets as at March 31, 2024: 80.78 crore (as at March 31, 2023: 56.28 crore). 592 2022-23 2023-24 Particulars crore Reconciliation of contracted price with revenue during the year: (f) NOTE [47] (contd.) Contract Net contract liabilities Notes forming part of the Consolidated Financial Statements (contd.) Reports Financial Statutory Integrated Report Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 Statements 3892.11 assets (A) (B) (207.26) (561.45) Writen off as bad debts (46.43) (4.48) 310.61 402.46 Additional provision (net) 27.76 427.52 410.65 332.45 Provision/(reversal) of allowance for ECL Changes in allowance for ECL: 2022-23 1619.72 Translation adjustment Provision as at March 31 5.35 4593.65 8.73 Contract Contract Net contract liabilities Contract assets (A) 2022-23 2023-24 crore Note: balances (A-B) Net increase/(decrease) Balance as at April 1 Particulars (i) Movement in contract balances during the year: (d) Contract balances: 1.39 1602.44 (0.79) 2024.69 4414.84 Balance as at March 31 746.90 15200.92 Others 6794.47 95085.87 11615.29 12069.62 735.97 660.86 1919.59 664.19 2359.59 1342.51 1662.40 1495.57 1864.41 2172.29 2322.06 221112.91 183340.70 [1] Geography wise break up of revenue is based on location of project other than service industries where it is based on location of customer. crore (d) Revenue contributed by any single customer in any of the operating segments, whether reportable or otherwise, does not exceed 10% of the Group's total revenue. (c) 51695.61 52411.16 Total 2404.58 2472.64 2283.85 49291.03 50127.31 India As at 31-3-2023 31-3-2024 Non-current assets As at Particulars Foreign countries (e) 2421.78 15379.74 Particulars crore Revenue [1] Geographical information (b) NOTE [46] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Statements Reports Report Financial Statutory Integrated Management Discussion and Analysis Corporate Overview India (i) Foreign countries (ii): United States of America Kingdom of Saudi Arabia United Arab Emirates 40166.35 28506.03 30881.10 114553.84 2022-23 126027.04 2023-24 3160.74 Total (i+ii) Other countries Kuwait Algeria Sultanate of Oman Bangladesh United Kingdom Qatar Total foreign countries (ii) The identification of operating segments is consistent with performance assessment and resource allocation by the management. Segment reporting: basis of identifying operating segments, reportable segments and definition of each reportable segment: 68786.86 Basis of identifying operating segments: 112188.25 33813.10 78375.15 Infrastructure Projects Loss/Segment Statement of Profit and Total as per crore Total Other revenue Domestic Segment Foreign Revenue as per Ind AS 115 2023-24 362.51 Energy Projects 12074.71 17130.31 4037.64 Development Projects 0.84 Financial Services 40818.06 3654.62 IT & Technology Services Disaggregation of revenue into operating segments and geographical areas: 8195.95 8167.31 2530.94 5636.37 Hi-Tech Manufacturing report 112550.76 29538.91 (i) 29205.02 28.64 (a) 333.89 NOTE [47] • • • The Revised Segment Composition: (iv) Consequent to transfer of the Carved-out Business of Smart World and Communication (SWC) to L&T Technology Services Limited (LTTS), a listed subsidiary w.e.f. April 1, 2023, the business which was hitherto a part of Others segment has now been included in IT & Technology Services segment. Concurrently, the military communications business has been transferred from Others segment to Hi-Tech Manufacturing segment. (iii) Performance of a segment is measured based on segment profit (before interest and tax), as included in the internal management reports that are reviewed by the Group's Corporate Executive Management. The performance of financial services segment and finance lease activities of power development segment are measured based on segment profit (before tax) after deducting the interest expense. NOTE [46] (contd.) • Notes forming part of the Consolidated Financial Statements (contd.) 589 An operating segment is classified as reportable segment if reported revenue (including inter-segment revenue) or absolute amount of result or assets exceed 10% or more of the combined total of all the operating segments. Reportable segments: The Group has seven reportable segments [described under "segment composition"] which are the Group's independent businesses. The nature of products and services offered by these businesses are different and are managed separately given the different sets of technology and competency requirements. In arriving at the reportable segment, the six operating segments have been aggregated and reported as "infrastructure segment" as these operating segments have similar economic characteristics in terms of long term average gross margins, nature of the products and services, type of customers, methods used to distribute the products and services and the nature of regulatory environment applicable to them. Operating segments are identified as those components of the Group (a) that engage in business activities to earn revenues and incur expenses (including transactions with any of the Group's other components); (b) whose operating results are regularly reviewed by the Group's Corporate Executive Management to make decisions about resource allocation and performance assessment; and (c) for which discrete financial information is available. (ii) Disclosure pursuant to Ind AS 115 "Revenue from Contracts with Customers": LARSEN & TOUBRO • Notes forming part of the Consolidated Financial Statements Energy Projects segment comprises EPC/turnkey solutions in (a) Hydrocarbon business covering Oil & Gas industry from front-end design through detailed engineering, modular fabrication, procurement, project management, construction, installation and commissioning, (b) Power business covering Coal-based and Gas-based thermal power plants including power generation equipment with associated systems and/or balance-of-plant packages and (c) EPC solutions in Green Energy space. Hi-Tech Manufacturing segment comprises design, manufacture/construct, supply and revamp/retrofit of (a) custom designed, engineered critical equipment & systems to the process plants, nuclear energy & green hydrogen sectors. (b) marine and land platforms including related equipment & systems; aerospace products & systems; precision and electronics products & systems for defence, security, space and industrial sectors and (c) electrolysers. Notes forming part of the Consolidated Financial Statements (contd.) Infrastructure Projects segment comprises engineering and construction of (a) building and factories, (b) transportation infrastructure, (c) heavy civil infrastructure, (d) power transmission & distribution, (e) water & effluent treatment and (f) minerals and metals. Statements Reports Report Statutory Integrated Management Discussion and Analysis Financial Corporate Overview Integrated Annual Report 2023-24 590 Others segment includes (a) realty, (b) manufacture and sale of industrial valves, (c) manufacture, marketing and servicing of construction equipment and parts thereof, (d) marketing and servicing of mining machinery and parts thereof and (e) manufacture and sale of rubber processing machinery. None of the businesses reported as part of others segment meet any of the quantitative thresholds for determining reportable segments for the year ended March 31, 2024. Development Projects segment comprises (a) development, operation and maintenance of infrastructure projects, toll and fare collection and (b) power generation & development - (i) thermal power and (ii) green energy Financial Services segment comprises retail finance, wholesale finance and asset management (upto the date of divestment). IT & Technology Services segment comprises (a) information technology and integrated engineering services (including smart world and communication projects), (b) E-commerce/digital platforms & data centres and (c) semiconductor chip design. GH4India Private Limited 0.04 0.04 1.66 (iv) Investment as equity/other equity Joint ventures, including: Hydrocarbon Arabia Limited Company L&T Infrastructure Development Projects Limited Total L&T Infrastructure Development Projects Limited 0.66 1.66 0.04 (v) Sale/Redemption of investments Joint ventures, including: 129.26 128.88 Total 0.05 129.26 1.00 0.42 Sr. 0.42 (vi) Inter-corporate deposits repaid by NOTE [54] (contd.) 608 crore 2023-24 2022-23 Nature of transaction/relationship/major parties No. Amount Amounts for major Amounts Amount for major parties parties (iii) Purchase/lease of property, plant and equipment Joint venture: 0.42 L&T-Sargent & Lundy Limited 0.05 0.05 L&T - MHI Power Turbine Generators Private Limited Total 9 Mr. Anil Parab (Whole-time Director)[4] Mr. T. Madhava Das (Whole-time Director) Total (iv) Incentives under the Investment Promotion Scheme for manufacturing facility (iii) Tax credit for Research & Development in foreign jurisdiction(s) 1.38 4.06 4.46 0.57 1.59 Benefit towards employee benefit expenses for COVID-19 pandemic NOTE [54] (ii) 98.38 Income/reduction from underlying expenses recognised towards export incentives, duty drawback and other schemes 2022-23 2023-24 (i) Particulars crore Disclosure pursuant to Ind AS 20 "Accounting for Government Grants and Disclosure of Government Assistance": During the year, the Group has recognised the Government Grants as below: 97.97 NOTE [53] Disclosure of related parties/related party transactions pursuant to Ind AS 24 "Related Party Disclosures": (a) List of related parties: 606 8 Vadodara Bharuch Tollway Limited [5] 7 L&T Rajkot-Vadinar Tollway Limited [5] 6 4 Hydrocarbon Arabia Limited Company [1] L&T Interstate Road Corridor Limited [5] 2 (i) Name of associate entities with whom transactions were carried out during the year: Associate entities: 5 Panipat Elevated Corridor Limited [5] L&T Infrastructure Development Projects Limited [5] 1 (ii) Name of joint venture entities with whom transactions were carried out during the year: Joint Venture entities: 4 L&T Camp Facilities LLC[1] 3 Larsen & Toubro Qatar & HBK Contracting Co. WLL [1] Under liquidation Magtorq Engineering Solutions Private Limited 2 1 Magtorq Private Limited 3 Ahmedabad - Maliya Tollway Limited [5] Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements LARSEN & TOUBRO (9.10) 25.70 8.24 100.21 102.29 (88.34) (92.23) (89.37) (21.27) (93.05) 101.44 Impact of change in discount rate Pension plan Impact of change in health care cost Impact of change in discount rate Impact of change in salary growth rate Impact of change in discount rate Post-retirement medical benefit plan Gratuity As at 31-3-2023 Effect of 1% decrease As at 31-3-2024 99.41 (44.42) (43.63) 55.12 [1] Designated as Chairman w.e.f October 1, 2023 605 All the above defined benefit plans expose the Group to general actuarial risks such as interest rate risk and market (investment) risk. Any loss/gain arising out of the investment risk and actuarial risk associated with the plan is also recognised as expense or income in the period in which such loss/gain occurs. The Parent Company and a few subsidiaries manage provident fund plan through a provident fund trust for its employees which is permitted under The Employees' Provident Funds and Miscellaneous Provisions Act, 1952. The plan mandates contribution by employer at a fixed percentage of employee's salary. Employees also contribute to the plan at a fixed percentage of their salary as a minimum contribution and additional sums at their discretion. The plan guarantees interest at the rate notified by the provident fund authority. The contribution by employer and employee together with interest are payable at the time of separation from service or retirement whichever is earlier. The benefit under this plan vests immediately on rendering of service. (D) Trust-managed provident fund plan: In addition to contribution to State-managed pension plan (EPS scheme), the Group operates a post-retirement pension scheme, which is discretionary in nature for certain cadres of employees. The quantum of pension depends on the cadre of the employee at the time of retirement. The plan is unfunded. Employees do not contribute to the plan. (C) Pension plan: The post-retirement medical benefit plan provides for reimbursement of health care costs to certain categories of employees post their retirement. The reimbursement is subject to an overall ceiling sanctioned based on cadre of the employee at the time of retirement. The plan is unfunded. Employees do not contribute to the plan. (B) Post-retirement medical care plan: The defined benefit plans for gratuity of the Parent Company and material domestic subsidiary companies are administered by separate gratuity funds that are legally separate from the Parent Company and the material domestic subsidiary companies. The trustees nominated by the Group are responsible for the administration of the plans. There are no minimum funding requirements of these plans. The funding of these plans is based on gratuity fund's actuarial measurement framework set out in the funding policies of the plan. These actuarial measurements are similar compared to the assumptions set out in (vii) above. An insignificant portion of the gratuity plan of the Group attributable to subsidiary companies is administered by the respective subsidiary companies and is funded through insurer managed funds. A part of the gratuity plan is unfunded and managed within the Group. Further, the unfunded portion also includes amounts payable in respect of the Group's foreign operations which result in gratuity payable to employees engaged as per the local laws of country of operation. Employees do not contribute to any of these plans. The Parent Company operates gratuity plan through a trust whereby every employee is entitled to the benefit equivalent to fifteen days salary last drawn for each completed year of service. The same is payable to vested employees at retirement, death while in employment or on termination of employment. The benefit vests after five years of continuous service. The Company's scheme is more favourable as compared to the obligation under The Payment of Gratuity Act, 1972. (A) Gratuity plan: (viii) Characteristics of defined benefit plans and associated risks: 29.35 29.46 (25.69) (25.84) 54.92 L&T Deccan Tollways Limited [5] 9 L&T Samakhiali Gandhidham Tollway Limited [5] 10 Integrated Report Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 1 Larsen & Toubro Limited Senior Officers' Superannuation Scheme (C) Superannuation Trust: 7 L&T Chiyoda Officers and Supervisors Gratuity Fund L&T Valves Workmen Gratuity Trust Statutory 8 LTIMindtree Limited Employees Gratuity Fund Trust 5 Nabha Power Limited Employees' Group Gratuity Assurance Scheme 4 Larsen & Toubro Gratuity Fund 2 Gratuity Scheme 3 L&T Technology Services Limited Employee Group 6 LTIMindtree Employees' Group Gratuity Assurance Scheme Financial Reports Statements 8 Mr. S. V. Desai (Whole-time Director) 7 Mr. J. D. Patil (Whole-time Director)[3] 6 Mr. M.V. Satish (Whole-time Director)[5] 5 Mr. D. K. Sen (Whole-time Director)[2] 4 Mr. Subramanian Sarma (Whole-time Director) 3 Financial Officer) 2 Mr. R. Shankar Raman (Whole-time Director & Chief Mr. S. N. Subrahmanyan (Chairman & Managing Director) [1] 1 (A) Executive Directors: (iv) Name of Key Management Personnel (of the Parent Company) and close member of their family with whom transactions were carried out during the year: NOTE [54] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) 1 Larsen & Toubro Officers & Supervisors Gratuity Fund As at 31-3-2023 (B) Gratuity Trusts: 8 23 L&T Infrastructure Engineering Limited and LEA Associates South Asia Private Limited JV LLP[4] Rewin Infrastructure Limited [5] 21 L&T MBDA Missile Systems Limited 19 L&T Offshore Private Limited (formerly known as L&T Sapura Offshore Private Limited) [3] 15 L&T - MHI Power Turbine Generators Private Limited 17 L&T Howden Private Limited 13 L&T Energy Hydrocarbon Engineering Limited [7] L&T Special Steels and Heavy Forgings Private Limited 20 L&T Sapura Shipping Private Limited 25 18 16 L&T - MHI Power Boilers Private Limited 14 L&T Transportation Infrastructure Limited [5] 12 L&T Sambalpur-Rourkela Tollway limited [5] 11 Kudgi Transmission Limited [5] L&T-Sargent & Lundy Limited [1] Incorporated on June 19, 2023 [3] Reclassified as subsidiary w.e.f December 27, 2023 [5] Divested w.e.f April 10, 2024 L&T Valves Employees Provident Fund 7 6 L&T Construction Equipment Employees Provident Fund Trust L&T Kansbahal Officers & Supervisory Provident Fund 4 5 L&T Kansbahal Staff & Workmen Provident Fund 3 Larsen & Toubro Limited Provident Fund 2 Larsen & Toubro Limited Provident Fund of 1952 Larsen & Toubro Officers & Supervisory Staff Provident Fund 1 (A) Provident Fund Trusts: (iii) Name of post-employment benefit plans with whom transactions were carried out during the year: [6] Liquidated w.e.f September 25, 2023 [4] Divested w.e.f January 3, 2024 [2] Incorporated on August 25, 2023 26 L&T Hydrocarbon Caspian LLC[6] 24 22 Raykal Aluminium Company Private Limited GH4India Private Limited [2] [7] Reclassified as subsidiary w.e.f January 19, 2023 L&T Chiyoda Staff Provident Fund 31-3-2024 As at Particulars LARSEN & TOUBRO Integrated Annual Report 2023-24 38.22 182.27 Total 8.93 13.58 L&T - MHI Power Turbine Generators Private Limited 607 28.45 L&T Sapura Shipping Private Limited 38.22 182.27 Joint ventures, including: Rent paid, including lease rentals under leasing arrangements (x) 26.48 9.04 164.58 103.01 40.10 Total 28.30 25.06 Total 898.67 1214.93 (ii) Sale of goods/contract revenue & services Joint ventures, including: 40.10 103.01 L&T - MHI Power Boilers Private Limited 23.56 75.18 L&T Special Steels and Heavy Forgings Private Limited 9.99 8.36 L&T MBDA Missile Systems Limited 4.69 17.53 1.23 Magtorq Private Limited 1.15 6.33 557.16 Total 528.50 333.00 L&T MBDA Missile Systems Limited 755.15 224.16 L&T-MHI Power Turbine Generators Private Limited 1283.65 1283.65 Joint ventures: (vii) Inter-corporate borrowing taken from 14.07 151.72 14.07 151.72 14.07 151.72 557.16 (viii) Inter-corporate borrowing repaid to Joint ventures: 551.56 7.83 26.48 9.04 Total L&T - MHI Power Boilers Private Limited L&T Energy Hydrocarbon Engineering Limited L&T-Sargent & Lundy Limited Joint ventures, including: (ix) Charges paid for miscellaneous services 1271.90 551.56 Total 556.75 331.00 L&T MBDA Missile Systems Limited 715.15 220.56 L&T-MHI Power Turbine Generators Private Limited 1271.90 18.69 L&T Sapura Shipping Private Limited 25.48 Associates, including: 5 Mr. Adil Zainulbhai 7 Mr. Narayanan Kumar 9 Ms. Preetha Reddy 11 Mr. Rajnish Kumar[4] Mr. M. Damodaran [2] 13 Mr. Ajay Tyagi[5] [3] Appointed w.e.f April 1, 2022 [4] Appointed w.e.f May 10, 2023 (C) Company Secretary 1 Mr. Sivaram Nair A 14 Mr. P. R. Ramesh [5] [2] Ceased w.e.f March 31, 2024 on account of completion of term [5] Appointed w.e.f October 31, 2023 Ms. Sulabha Anil Parab 6 Ms. Bhagyasree Joshi 8 Ms. Kalavathi S Desai [1] Ceased to be Non-executive Chairman w.e.f. September 30, 2023 3 Mr. Jyoti Sagar [4] 12 Effect of 1% increase crore (H) A one percentage point change in actuarial assumptions would have the following effects on defined benefit obligation: NOTE [52] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Statements [3] Ceased w.e.f June 30, 2022 on account of completion of term [5] Ceased w.e.f April 7, 2024 on account of completion of term (B) Non-executive/Independent Directors: 1 Mr. A. M. Naik[1] [2] Ceased w.e.f April 7, 2023 on account of completion of term [4] Appointed w.e.f August 5, 2022 2 Mr. M. M. Chitale[2] 4 Mr. Vikram Singh Mehta[2] 6 Mr. Sanjeev Aga 8 Mr. Hemant Bhargava 10 Mr. Pramit Jhaveri [3] (D) Close Member of Key Management Personnel's (KMP's) family 28.30 1 2 Sr. Nature of transaction/relationship/major parties No. Amount Amounts for major parties Amount Amounts for major parties (i) 2022-23 Purchase of goods & services (including commission paid) Joint ventures, including: 1189.45 L&T - MHI Power Boilers Private Limited L&T - MHI Power Turbine Generators Private Limited L&T Special Steels and Heavy Forgings Private Limited L&T Energy Hydrocarbon Engineering Limited 332.06 32.48 457.43 480.57 131.41 338.01 172.01 870.37 2023-24 crore (b) Disclosure of related party transactions: Ms. Vasanti Narayanan 3 Mr. Ajinkya Anil Parab 4 5 Ms. Smita Narayan Sarang 7 Mr. Anand V Desai 9 Mr. Raghavendra V Desai 11 Mr. Saurabh Mukund Chitale 13 Mr. M.V. Srinath 15 Ms. Hamida Zainulbhai 17 Mr. Harshad Reddy 10 Ms. Madhuri Subhash Gadre 12 Mr. Sushrut Mukund Chitale 14 Ms. Vasanti Satish 16 Ms. Mukeeta Pramit Jhaveri Mr. Uday Singh Mehta (v) Entity with common Key Managerial Personnel with whom transactions were carried out during the year: 18 1 LTIMindtree Foundation (Formerly known as Mindtree Foundation) Ms. Meena Subrahmanyan Joint venture: 252.62 Report 498.68 6.60 0.25 0.16 Amount to be recognised as liability/(asset) Add: Amount not recognised as an asset [limit in para 64(b)] 9596.45 7165.44 375.27 375.27 9173.37 6992.32 382.26 382.26 352.74 395.76 352.74 395.76 9173.37 6992.32 1572.21 1369.78 301.67 253.80 1873.88 1623.58 1375.36 1094.48 Trust-managed provident fund plan As at As at 31-3-2024 31-3-2023 As at As at As at As at As at As at 31-3-2024 31-3-2023 31-3-2024 31-3-2023 31-3-2024 31-3-2023 Pension plan Post-retirement medical benefit plan Gratuity plan Less: Fair value of plan assets -Wholly unfunded A) Present value of defined benefit obligation -Wholly funded 529.35 Particulars 395.76 382.26 375.27 382.26 352.74 395.76 529.35 498.68 Net liability/(asset) (0.06) (0.38) Assets 113.60 119.63 375.27 382.26 352.74 395.76 529.41 499.06 Liabilities B) Amounts reflected in the Balance Sheet: 4.31 (168.81) (416.48) 375.27 352.74 119.63 crore (b) Defined benefit plans: (7567.91) (0.67) 9.15 26.41 6.81 (439.50) (7170.11) Deferred tax (assets) (1457.11) (0.41) 3.89 26.41 2.49 (975.95) (513.54) Other items giving rise to temporary differences (212.86) --- 5.26 (41.92) (176.20) Unutilised MAT credit (2.77) ....- (0.26) 24.22 Offsetting of deferred tax (assets) with deferred tax liabilities (i) The amounts recognised in Balance Sheet are as follows: Net deferred tax (assets) 3185.32 (a) Defined contribution plans: 1579.73 crore (previous year: 1424.68 crore) has been incurred and is included in "Employee benefits expense" [Note 37]. Disclosure pursuant to Ind AS 19 "Employee Benefits" [Note 1(II)(p)]: NOTE [52] Notes forming part of the Consolidated Financial Statements (contd.) Statements Reports Report Financial Statutory Integrated Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 (3330.09) 0.95 9.15 (4.48) 192.13 6.83 (3354.36) (180.31) (3863.72) (3984.79) 3704.19 Net deferred tax liability/(assets) (26.73) 113.60 Net liability/(asset) - Non-current Amount capitalised out of the above 9 (0.38) Translation adjustments 8 (243.76) ---- - 243.28 ( in books Actuarial gains/(losses) not recognised 7 (7.21) 8.23 4.72 35.48 (15.23) (35.95) 14.47 27.18 0.12 5.13 Past service cost 6 30.02 Actuarial (gains)/losses - Others 5 243.76 (243.28) 31.14 (48.31) Total (1 to 9) interest income 287.89 60.04 Amount included in "Employee benefits expense" I. 2023-24 2022-23 2022-23 2023-24 provident fund plan Pension plan Trust-managed Post-retirement medical benefit plan 2023-24 2022-23 2023-24 2022-23 Particulars Gratuity plan crore 602 NOTE [52] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements LARSEN & TOUBRO 601 373.99 29.56 534.16 34.78 14.17 (0.77) 0.04 337.94 Net liability/(asset) - Current between actual return on plan assets and 4 2023-24 provident fund plan medical benefit plan 2023-24 2022-23 2022-23 2023-24 Particulars Pension plan Gratuity plan Trust-managed Post-retirement crore (ii) The amounts recognised in Statement of Profit and Loss are as follows: 346.44 113.60 119.63 28.83 30.39 351.87 337.66 375.92 15.08 19.84 529.35 498.68 2022-23 Actuarial (gains)/losses - Difference 2023-24 1 Current service cost (489.91) (641.14) (73.07) (80.13) Interest income on plan assets 3 489.91 641.14 25.28 26.92 24.36 25.72 83.89 100.83 Interest cost 2 373.99 [1] 534.16 [1] 3.26 3.14 25.64 22.37 280.73 246.76 2022-23 285.52 Brought forward tax losses (235.97) (3185.32) (3075.84) Offsetting of deferred tax liabilities with deferred tax (assets) 3815.75 (5.98) (13.70) (255.03) 15.13 (39.84) 4115.17 Deferred tax liabilities 732.15 (6.00) (0.03) 8.32 (485.39) 1215.25 Other items giving rise to temporary differences (1.72) (13.70) (255.00) (15.74) 282.72 Net deferred tax liabilities settlement 1039.33 Deferred tax (assets): (176.20) 15.55 (3.77) (2.22) (185.76) Unutilised MAT credit (26.73) ----- 5.52 (32.25) Brought forward tax losses (2688.82) (2235.69) (453.13) Unabsorbed depreciation (331.76) (8.30) (323.46) Unpaid statutory liabilities (2970.65) (0.07) (492.08) (2478.50) Provision on expected credit loss (ECL) 630.43 Other items giving rise to temporary differences offered for tax purposes in the year of transfer/ 198.95 (assets) as at 1-4-2022 to Other Effect due to (credit) to Deferred tax liabilities/ Charge/ crore Difference between book base and tax base of property, plant and equipment, investment property and intangible assets Deferred tax liabilities: - Particulars (d) Major components of deferred tax liabilities and deferred tax assets: NOTE [51] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Statements Reports Report Financial Statutory Integrated Management Discussion and Analysis Corporate Overview Statement Net gain/(loss) on derivative transactions to be of Profit and acquisition 4.61 194.34 Disputed statutory liabilities paid and claimed as deduction for tax purposes but not debited to Statement of Profit and Loss --- 0.02 2886.37 6.81 456.68 2422.86 OCI) 31-3-2023 Sheet than through Exchange difference (assets) as at Balance liabilities/ Deferred tax through Recognised reserve (other to hedge (credit) Charge/ Debit/(credit) ==₁£F=== comprehensive income (OCI) Loss (2924.79) (660.28) (257.27) (55.98) 259.19 3815.75 Deferred tax liabilities 804.45 1.53 (0.19) 70.96 732.15 Other items giving rise to temporary differences 159.52 (4.48) 165.91 (0.19) (1.72) Net gain/(loss) on derivative transactions to be offered for tax purposes in the year of transfer/ settlement 200.72 1.77 198.95 3073.13 - - - 0.09 0.02 186.65 2886.37 0.02 OCI) 165.72 1.62 (2688.82) Unabsorbed depreciation (297.26) (2673.12) - --- ---- 0.88 33.62 Notes forming part of the Consolidated Financial Statements (331.76) Unpaid statutory liabilities 3.44 294.09 (2970.65) Provision on expected credit loss (ECL) Deferred tax (assets): 533.63 (3704.19) 630.43 Net deferred tax liabilities (3185.32) Offsetting of deferred tax liabilities with deferred tax (assets) 4237.82 (4.48) (3.69) (assets) as at 31-3-2024 liabilities/ 19.44 (13.70) (311.08) 7.67 (1800.77) (1247.32) (3984.79) (2840.10) 3075.84 3185.32 Net deferred tax liability/(assets) Net deferred tax (assets) Offsetting of deferred tax (assets) with deferred tax liabilities (7170.11) (2.62) 19.44 (56.05) (7.46) (1207.48) (5915.94) Deferred tax (assets) (975.95) (2.62) 3.89 (8.60) Sheet (3354.36) LARSEN & TOUBRO through Exchange difference Balance reserve (other than through comprehensive income (OCI) disposal Deferred tax Recognised Charge/ Debit/(credit) (credit) to hedge to Other Statement of Profit and Loss Effect due to liabilities/ (assets) as at 31-3-2023 Charge/ (credit) to Deferred tax crore Disputed statutory liabilities paid and claimed as deduction for tax purposes but not debited to Statement of Profit and Loss Difference between book base and tax base of property, plant and equipment, investment property and intangible assets Deferred tax liabilities: - Particulars 600 NOTE [51] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements 599 Reports 260.59 25.76 Notes forming part of the Consolidated Financial Statements LARSEN & TOUBRO 603 1094.48 12.88 7.05 509.58 5.83 584.90 13.79 1375.36 13.21 672.52 702.84 Closing balance of the plan assets 0.58 Others 440.49 440.49 571.78 571.78 Insurer managed fund 3.58 3.58 3.84 3.84 Fixed deposits Notes forming part of the Consolidated Financial Statements (contd.) 1.48 NOTE [52] (contd.) crore 2291.32 3175.01 3175.01 - Debt instruments Corporate bonds 135.58 135.58 485.07 485.07 25.69 25.69 12.22 12.22 Equity instruments Cash and cash equivalents Total As at 31-3-2023 Quoted Unquoted Total Unquoted Quoted As at 31-3-2024 Particulars Trust-managed provident fund plan 604 2291.32 1.48 1.48 134.93 Debt instruments - Central Government bonds 220.74 220.74 252.62 Debt instruments - Corporate bonds 23.23 23.23 46.51 46.51 6.09 6.09 4.35 4.35 Total As at 31-3-2023 Unquoted Quoted Total As at 31-3-2024 Unquoted Quoted Equity instruments Cash and cash equivalents Particulars 134.93 1.48 116.33 Debt instruments - State Government bonds Special deposit scheme 1.10 1.10 6.26 4.01 2.25 Mutual funds - Debt 76.30 50.89 25.41 110.46 73.85 36.61 Mutual funds Equity 20.10 20.10 19.16 19.16 Debt instruments - Public Sector Unit bonds 172.16 172.16 210.18 210.18 116.33 Gratuity plan Debt instruments - Central Government bonds 963.00 12.13 7.26 6.05 5.57 As at 31-3-2023 As at 31-3-2024 Attrition rate for various age groups: (b) Pension plan (a) Gratuity plan (C) Salary growth rate: Annual increase in healthcare costs (see note below) (B) (c) Pension plan (b) Post-retirement medical benefit plan (a) Gratuity plan (A) Discount rate: Plans (vii) Principal actuarial assumptions at the Balance Sheet date (expressed as weighted average): 3. Pension plan Post-retirement medical benefit plan 2. Plans Gratuity 1. 13.64 (vi) The average duration (in number of years) of the defined benefit obligation at the Balance Sheet date is as follows: 7.25 As at 31-3-2023 Financial Statutory Integrated Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 (G) The obligation of the Group under the post-retirement medical benefit plan is limited to the overall ceiling limits. (F) The interest payment obligation of trust-managed provident fund is expected to be adequately covered by the interest income on long term investments of the fund. Any shortfall in the interest income over the interest obligation is recognised in the Statement of Profit and Loss as actuarial losses. (E) The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. (b) For post-retirement medical benefit plan, the entity wise attrition rate varies from 1% to 30% (previous year: 1% to 40%). (c) For pension plan, the entity wise attrition rate varies from 0% to 2% (previous year: 0% to 2%). (a) For gratuity plan, the entity wise attrition rate varies from 1% to 48% (previous year: 1% to 46%). 9.00% 9.00% 6.53% 6.71% 5.00% 0.00% 7.36% 7.15% 7.36% 7.15% 7.36% 7.15% As at 31-3-2024 963.00 7165.44 6463.33 33.98 6.68 27.30 Mutual funds Debt 702.51 436.72 265.79 805.29 611.72 193.57 Mutual funds Equity 466.85 466.85 334.97 334.97 Debt instruments - Public Sector Unit bonds 2408.20 2408.20 3358.65 3358.65 Debt instruments - State Government bonds 851.78 851.78 0.72 702.11 0.72 7.51 9596.45 2.67 2.67 22.24 19.82 883.52 43.09 43.09 165.43 165.43 2.42 8712.93 Closing balance of the plan assets Others InvIT instruments 1.56 1.56 1.36 1.36 Fixed deposits 235.47 235.47 231.72 231.72 Special deposit scheme 7.51 Mutual funds - Others 49.55 crore The Group expects to fund 193.49 crore (previous year: 265.02 crore) towards its gratuity plan and 282.75 crore (previous year: *239.56 crore) towards its trust-managed provident fund plan during the year 2024-25. 24.36 25.72 83.89 100.83 Add: Interest cost 373.99 [1] 534.16 [1] 3.26 3.14 25.64 22.37 246.76 280.73 Add: Current service cost 5849.85 6992.32 371.56 375.27 354.57 352.74 1428.28 1623.58 defined benefit obligation 26.92 Opening balance of the present value of 25.28 489.91 10.56 51.18 3.22 iii) Experience adjustments (11.57) 7.58 (19.28) 9.83 (12.82) 35.51 (6.45) (35.62) (2.87) (8.71) ii) Financial assumptions i) Demographic assumptions - from changes in Add/(less): Actuarial (gains)/losses arising 697.17 920.17 - Employee Add: Contribution by plan participants 641.14 (10.22) 2023-24 2022-23 2023-24 (15.23) 66.67 (18.29) Amount included as part of "Other comprehensive income" IV. 25.28 26.92 24.36 25.72 10.19 19.86 Amount included as part of "Finance costs" III. 0.49 0.80 operating expenses" "Manufacturing, construction and Amount included as part of II. 373.99 534.16 11.49 3.14 (35.95) 2022-23 4.72 Total (I+II+III+IV) 2023-24 2022-23 2022-23 2023-24 Trust-managed provident fund plan Pension plan Post-retirement medical benefit plan Particulars Gratuity plan crore (iii) The changes in the present value of defined benefit obligation representing reconciliation of opening and closing balances thereof are as follows: 246.15 884.42 41.93 128.44 Actual return on plan assets 373.99 534.16 29.56 34.78 14.17 60.04 337.94 287.89 (7.21) (v) The fair value of major categories of plan assets are as follows: (2.86) (166.94) 528.76 102.24 273.85 Add: Contribution by the employer (243.76) 243.28 (31.14) 48.31 actual return on plan assets and interest income Add/(Less): Actuarial gains/(losses) - Difference between 489.91 641.14 73.07 80.13 Add: Interest income on plan assets [2] 6301.96 7165.44 1090.95 1094.48 Opening balance of the fair value of the plan assets 2022-23 2023-24 2022-23 351.27 2023-24 Add: Contribution by plan participants 686.55 The Trust formed by the Parent Company and a few subsidiaries manage the investments of provident funds and gratuity fund. Interest income on plan assets is determined by multiplying the fair value of the plan assets by the discount rate stated in (vii) below both determined at the start of the annual reporting period. Basis used to determine interest income on plan assets: [2] Notes: The fair value of the plan assets under the trust managed provident fund plan has been determined at amounts based on their value at the time of redemption, assuming a constant rate of return to maturity. 7165.44 (0.39) (871.82) (1081.79) 0.05 9596.45 1094.48 1375.36 Closing balance of the plan assets Add: Adjustment for earlier years (141.71) (119.88) Less: Benefits paid 72.63 1.07 (0.79) Add: Business combination/disposal (net) 379.09 1165.03 (0.74) Add: Assets assumed/(transferred) 934.54 Less: Benefits paid Trust-managed provident fund plan Gratuity plan Add/(less): Translation adjustments 1.75 Add: Adjustment for earlier years 74.11 1.58 (2.84) Add: Business combination/disposal 379.06 1165.03 (0.26) 0.29 Add: Liabilities assumed/(transferred) (871.82) 4.36 (25.85) (1081.79) 8.23 0.12 27.18 14.47 5.13 Add: Past service cost (27.79) (16.00) (16.76) (203.62) 3.08 Particulars 16.73 0.05 crore (iv) Changes in the fair value of plan assets representing reconciliation of the opening and closing balances thereof are as follows: NOTE [52] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Statements Reports Report Financial Statutory Integrated Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 [1] Employer's contribution to provident fund. 6992.32 9173.37 375.27 382.26 352.74 395.76 1623.58 1873.88 Closing balance of the present value of defined benefit obligation 0.59 Notes forming part of the Consolidated Financial Statements (contd.) Management Discussion and Analysis 36.88 No. Sr. crore 610 NOTE [54] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements LARSEN & TOUBRO 609 Nature of transaction/relationship/major parties 12.38 Total 2.36 1.18 L&T - MHI Power Turbine Generators Private Limited 10.02 11.64 L&T MBDA Missile Systems Limited 12.38 12.82 12.82 Joint ventures: 2023-24 Amount 0.13 Associate: 15.60 18.07 L&T Sapura Shipping Private Limited 57.68 58.31 27.19 4.84 2022-23 L&T Special Steels and Heavy Forgings Private Limited Kudgi Transmission Limited 81.22 Joint ventures: (xviii) Interest received from parties parties for major Amount Amounts Amounts for major 100.48 (xvii) Interest paid to 0.79 0.67 Mr. R. Shankar Raman 1.38 1.88 Mr. A.M Naik 3.66 4.93 Key Management Personnel, including: (xv) Dividend paid to 22.76 0.99 Total 2.61 Ms. Meena Subrahmanyan 2.62 Close member of KMP's family, including: 3.20 Mr. Anil Parab 5.47 Mr. Subramanian Sarma 10.20 |||| 0.72 Mr. S. N. Subrahmanyan Mr. Subramanian Sarma Total 0.79 0.67 L&T - MHI Power Turbine Generators Private Limited 0.79 0.67 Joint venture: (xvi) Guarantee charges recovered from Total 3.89 5.25 0.19 0.25 Ms. Meena Subrahmanyan 0.23 0.32 Close member of KMP's family, including: 0.33 0.53 0.58 0.80 L&T Camp Facilities LLC Mr. R. Shankar Raman 0.13 81.22 37.89 94.57 LTIMindtree Employees' Group Gratuity Assurance Scheme (Formerly Larsen & Toubro Infotech Employees' Group Gratuity Assurance Scheme) L&T Technology Services Limited Employee Group Gratuity Scheme Total 21.09 14.20 123.95 90.46 261.98 321.24 30.50 533.53 (B) 309.26 516.34 321.24 533.53 (A) Towards Employer's contribution to provident fund trusts, including: Larsen & Toubro Officers & Supervisory Staff Provident Fund (xxiii) Contribution to post employment benefit plan 24.10 81.70 Total Towards Employer's contribution to gratuity fund trusts, including: Larsen & Toubro Officers & Supervisors Gratuity Fund LTIMindtree Limited Employees Gratuity Fund Trust (Formerly Mindtree Limited Employees Gratuity Fund Trust) Total 12.39 90.46 (xxiv) Compensation/benefits to Key Management Personnel (KMP): NOTE [54] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Statements Reports Financial Statutory Integrated Report Management Discussion and Analysis 261.98 Corporate Overview "Major parties" denote entities accounting for 10% or more of the aggregate for that category of transaction during respective year. 15.84 16.09 15.84 16.09 Larsen & Toubro Limited Senior Officers' Superannuation Scheme Total 15.84 16.09 (C) Towards Employer's contribution to superannuation trust: Integrated Annual Report 2023-24 24.10 81.70 LTIMindtree Foundation (Formerly known as Mindtree Foundation) 3.13 (5.08) L&T Offshore Private Limited (formerly known as L&T Sapura Offshore Private Limited) 0.12 L&T-MHI Power Turbine Generators Private Limited (22.41) L&T - MHI Power Boilers Private Limited L&T Infrastructure Development Projects Limited (27.32) 1.73 L&T Deccan Tollways Limited (xx) Allowance/(reversal) for expected credit loss 20.37 Total 20.37 L&T - MHI Power Boilers Private Limited 20.37 Joint venture: (xix) Amount written off as bad debts 100.61 Joint ventures, including: 0.45 0.79 0.11 24.10 81.70 Entity with common Key Management Personnel: (xxii) Donation given (33.05) Total (33.05) L&T Infrastructure Development Projects Limited (33.05) Joint venture: (xxi) Amount recognised in Profit or Loss on account of impairment/(reversal of impairment) loss on investment 3.13 (27.32) Total 0.03 0.02 L&T-Sargent & Lundy Limited 0.01 0.01 Raykal Aluminium Company Private Limited 0.01 Total crore 20.14 (xiv) Buyback of shares from cost- Others Total construction 1 Balance as at 1-4-2023 19.70 taxes 396.49 2 Contractual rectification Additional provision during the year 30.71 534.63 29.12 contracts 688.58 472.12 85.28 39.33 1724.68 578.41 3 Provision used during the year 7.13 (1.08) Expected tax liability Litigation- in respect related of indirect obligations Particulars 74.45 2.00 614 Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Statutory Financial Product warranties Report Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [56] Disclosure pursuant to Ind AS 37 "Provisions, Contingent Liabilities and Contingent Assets": (a) Movement in provisions: * crore Class of provisions Sr. No. Reports (42.42) (56.87) (14.67) (115.04) Note 31 1550.01 1506.65 crore Total 1724.68 1752.34 (b) Nature of provisions: (i) 245.69 (ii) Provision made as at March 31, 2024 represents the amount of the expected cost of meeting such obligations of rectification/ replacement. The timing of the outflows is expected to be within a period of three years from the date of Balance Sheet. Expected tax liability in respect of indirect taxes represents mainly the differential sales tax liability on account of non-collection of declaration forms and liability for goods and services tax, customs duty and excise duty. (iii) Provision for litigation-related obligations represents liabilities that are expected to materialise in respect of matters in appeal. (iv) Contractual rectification cost represents the estimated cost the Group is likely to incur during defect liability period as per the contract obligations and in respect of completed construction contracts accounted under Ind AS 115 "Revenue from contracts with customers". (v) Other provisions mainly includes provision for onerous contracts. (c) Disclosure in respect of contingent liabilities is given in Note 32. 615 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements Product warranties: The Group gives warranties on certain products and services, undertaking to repair or replace the items that fail to perform satisfactorily during the warranty period. 174.67 Note 24 Balance as at 31-3-2024 4 Unused provision reversed during the year (4.88) (63.66) (41.00) (326.57) 5 Translation adjustments 0.40 (436.11) 0.40 6 Balance as at 31-3-2024 (1 to 5) 20.87 321.12 522.75 777.66 109.94 1752.34 Breakup of provisions: Particulars Balance as at 1-4-2023 93.88 2.00 Key Management Personnel, including: Face value per share (*) 12,33,876 1,39,10,50,903 Total Ms. Meena Subrahmanyan (xiv) Provision for expected credit loss Joint ventures, including: L&T - MHI Power Boilers Private Limited L&T - MHI Power Turbine Generators Private Limited L&T Infrastructure Development Projects Limited L&T Deccan Tollways Limited Total Close Member of KMP's family: (xv) Guarantees given on behalf of L&T - MHI Power Turbine Generators Private Limited Total 15.48 57.52 10.68 4.80 47.84 9.38 7.68 7.68 Joint ventures, including: 23.16 L&T MBDA Missile Systems Limited Joint ventures, including: 144.34 132.57 Total 119.39 613 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [54] (contd.) L&T - MHI Power Boilers Private Limited crore As at 31-3-2023 Sr. Category of balance/relationship/major parties No. Amount Amounts for major parties Amount Amounts for major parties (xiii) Revenue commitment received As at 31-3-2024 57.52 2.74 25.15 Basic EPS (*) Diluted EPS Profit after tax (crore) Weighted average number of equity shares outstanding A B А 13059.11 1,38,98,17,026 A/B Weighted average number of equity shares outstanding 93.96 74.51 Add: Weighted average number of potential equity shares on account of employee stock options ABC 13059.11 1,38,98,17,026 10470.72 1,40,52,58,885 Weighted average number of equity shares outstanding for diluted EPS Diluted EPS (*) D=B+C A/D 10470.72 1,40,52,58,885 Profit after tax (crore) 2022-23 2023-24 0.12 22.61 0.36 0.24 0.45 0.45 1.73 1.73 2.74 25.15 243.22 311.92 210.56 276.58 243.22 311.92 Major parties" denote entities accounting for 10% or more of the aggregate for that category of balance during respective year. Note: 1. All the related party contracts/arrangements have been entered into on arm's length basis. 2. The amount of outstanding balances as shown above are unsecured and will be settled/recovered in cash. 3. The interest rate charged on loans given to related parties are as per market rates. NOTE [55] Basic and Diluted Earnings per share [EPS] computed in accordance with Ind AS 33 "Earnings per Share": Particulars Basic EPS 11,80,266 1,40,64,39,151 Notes forming part of the Consolidated Financial Statements (contd.) 2023-24 Key Management Personnel Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 5.80 2.50 0.11 0.11 5.70 2.39 Integrated Report 5.80 Total Ms. Meena Subrahmanyan Close member of KMP's family: L&T - MHI Power Boilers Private Limited Joint ventures, including: (viii) Advances from customers 202.04 207.68 Total 2.39 162.03 40.01 Statutory Reports Mr. S. N. Subrahmanyan Mr. A. M. Naik Total Key Management Personnel, including: (ix) Due to Key Management Personnel [a]: 95.41 125.36 Amounts for major parties crore Financial As at 31-3-2023 Amounts for major parties Amount No. Category of balance/relationship/major parties Sr. As at 31-3-2024 NOTE [54] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Statements Amount 164.06 43.62 L&T - MHI Power Turbine Generators Private Limited L&T MBDA Missile Systems Limited 2043.42 Total 5.05 2.52 2.58 4.55 Magtorq Private Limited L&T Camp Facilities LLC 7.57 7.13 2325.27 Associates: 1790.93 208.23 L&T Special Steels and Heavy Forgings Private Limited* L&T Sapura Shipping Private Limited 2317.70 2036.29 Joint ventures, including: (iv) Loans & advances recoverable # Secured * Before set-off of losses under equity accounting and impairment 955.56 1829.14 345.96 * Before set-off of losses under equity accounting and impairment (v) Impairment/provision of loans & advances recoverable Joint ventures, including: 202.04 207.68 Joint ventures: (vii) Unsecured loans taken 14.84 14.84 Total 14.84 14.84 L&T Special Steels and Heavy Forgings Private Limited 14.84 14.84 (vi) Provision towards constructive obligation Joint venture: 1145.09 1139.91 Total 1139.03 1139.03 L&T Special Steels and Heavy Forgings Private Limited 1145.09 1139.91 Mr. R. Shankar Raman 949.43 Mr. D. K. Sen Mr. J. D. Patil (C) 182.73 Total 26.49 3.45 Larsen & Toubro Gratuity Fund 57.69 94.37 LTIMindtree Employees' Group Gratuity Assurance Scheme Due to superannuation fund: [a] includes commission due to other Non-executive directors 4.63 crore (previous year: 3.94 crore) 30.50 39.42 L&T Technology Services Limited Employee Group Gratuity Scheme 107.15 44.12 Larsen & Toubro Officers & Supervisors Gratuity Fund 259.82 182.73 Due to gratuity trusts, including: LTIMindtree Limited Employees Gratuity Fund Trust (B) 17.93 Larsen & Toubro Limited Senior Officers' Superannuation Scheme Total 40.94 31.76 Magtorq Private Limited 41.38 31.76 Associates, including: 652.15 556.15 570.11 370.22 259.82 10.65 L&T Special Steels and Heavy Forgings Private Limited 1287.63 1028.34 Joint ventures, including: (xii) Revenue commitment given 10.65 17.93 Total 10.65 17.93 L&T - MHI Power Boilers Private Limited 100.29 138.71 Total 13.06 9.07 13.41 12.44 18.56 1.73 7.72 8.57 7.75 7.60 0.18 21.83 24.10 35.28 2.74 1.22 Mr. Anil Parab Mr. T. Madhava Das Mr. S. V. Desai Mr. Subramanian Sarma 14.82 8.62 3.50 125.36 95.40 134.57 Larsen & Toubro Officers & Supervisory Staff Provident Fund 100.29 138.71 Due to provident fund trusts, including: (A) Post employment benefit plans (xi) 4.20 0.90 Total 4.20 0.90 LTIMindtree Foundation (Formerly known as Mindtree Foundation) 4.20 0.90 Entity with common Key Management Personnel: Provision towards unspent CSR expenses (x) 95.41 Mr. M. V. Satish 2022-23 Total 213.17 736.26 4.28 12.46 13.17 2.76 10.41 28.03 9.26 31.41 10.98 [2] 1.11 18.314] (g) Mr. S. V. Desai (f) Mr. J. D. Patil 12.06 2.51 9.55 13.31 12.04 2.52 9.52 2.12 22.46 5.39 8.92 (b) Other Non-executive/Independent 12.16 3.00 131 9.16 5.64 1.50 131 4.14 (a) Mr. A. M. Naik (j) Remuneration 18.33 Non-executive/Independent Directors: 14.47 (i) Mr. T. Madhava Das 2.61 9.85 (h) Mr. Anil Parab 3.95 14.82 11.28 2.36 3.86 18.46 3.89 14.57 (a) Mr. S. N. Subrahmanyan Executive Directors: benefits benefits [5] year term benefit Total Other long 39.15 employee employment during the term benefit employee employment benefits benefits Post Short term ESOP granted Other Long Post Short term Total 10.50 (b) Mr. R. Shankar Raman 24.26 26.38 21.67 4.57 17.10 30.76 34.90 7.36 27.54 82.05 32.40 2.78 10.53 (e) Mr. M. V. Satish 6.94 [2] 15.31 11 0.21 (d) Mr. D. K. Sen 5.57 20.81 (c) Mr. Subramanian Sarma 6.50 5.76 213.17 742.39 5.76 4.96 5.51 9.21 5.89 112.14 210.84 454.30 761.11 750.63 268.01 1462.27 8.82 1288.16 Magtorq Private Limited L&T Special Steels and Heavy Forgings Private Limited Associates, including: L&T - MHI Power Turbine Generators Private Limited L&T - MHI Power Boilers Private Limited Joint ventures, including: Accounts payable including other payable (ii) 94.02 29.60 Total Total 1294.05 611 L&T Special Steels and Heavy Forgings Private Limited* Kudgi Transmission Limited# 955.56 949.43 Amounts for major parties Amount Amounts for major parties Amount As at 31-3-2023 As at 31-3-2024 1471.48 crore (iii) Investment in debt securities [including preference shares (debt portion)] No. Category of balance/relationship/major parties Sr. 612 NOTE [54] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements LARSEN & TOUBRO Joint ventures: 0.22 0.23 Larsen & Toubro Qatar & HBK Contracting Co. WLL 48.41 119.70 246.90 1.59 0.02 1.57 1.72 6.94 Amount due to/from related parties (including commitments): 10.98 [5] Represents fair value of ESOPs granted during the year which will be vested equally over a period of 4 years. 41.66 [1] Post employment benefits include gratuity 15.25 crore [3] Represents pension 52.60 0.02 1.70 145.70 Total (a) Mr. Sivaram Nair A Company Secretary Directors [2] Represents encashment of past service accumulated leave [4] Post employment benefits include gratuity 17.75 crore 179.09 Sr. Category of balance/relationship/major parties 0.22 0.23 0.67 3.19 L&T Special Steels and Heavy Forgings Private Limited Associate: 83.98 17.79 93.80 29.37 Amounts for major parties Amount Amounts for major parties Amount As at 31-3-2023 As at 31-3-2024 crore L&T - MHI Power Boilers Private Limited Joint ventures, including: Accounts receivable (i) No. 4.96 1060.10 1329.01 3.72 (3.72) 7.47 7.84 L&T Infrastructure Development Projects Limited 10.20 9.42 L&T - MHI Power Turbine Generators Private Limited 11.66 L&T Energy Hydrocarbon Engineering Limited 12.61 37.62 28.83 L&T - MHI Power Boilers Private Limited 97.02 74.18 Joint ventures, including: Rent received, overheads recovered and miscellaneous income L&T-Sargent & Lundy Limited (xi) 13.66 74.18 (xiii) Dividend received from 7.50 9.71 Total 5.59 7.76 0.93 Total 1.03 0.98 0.92 L&T Infrastructure Development Projects Limited 7.50 9.71 (xii) Charges recovered for deputation of employees to related parties Joint ventures: 97.02 L&T Special Steels and Heavy Forgings Private Limited L&T Sapura Shipping Private Limited for major parties parties Amount Algerian US Dollar including pegged currencies Net exposure to foreign currency risk in respect of recognised financial assets/ (recognised financial liabilities) Particulars As at 31-3-2023 crore 10.27 EURO British Pound 2.36 1221.52 Receivable/(payable) exposures with respect to forward contracts and embedded derivatives not designated as cash flow hedge 490.23 54) -- 1442.30 (55.54) (15828.85) 43047.38 (424.23) Dinar Canadian Dollar Japanese Yen Kuwaiti Dinar for major Amount Amounts Amounts 2022-23 2023-24 No. Nature of transaction/relationship/major parties Sr. crore NOTE [54] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Statements Reports Financial Statutory Integrated Report Joint ventures, including: (11.01) 132.57 L&T Infrastructure Development Projects Limited A hypothetical 50 basis point shift in respective currency SOFR and other benchmarks, holding all other variables constant, on the unhedged loans would result in a corresponding increase/decrease in interest cost for the Group on a yearly basis as follows: crore Particulars INR loans given (net of INR borrowings) Interest rates - increase by 0.50% in INR interest rate Interest rates decrease by 0.50% in INR interest rate USD (including pegged currencies) borrowings Interest rates increase by 0.50% in USD interest rate Interest rates decrease by 0.50% in USD interest rate - (b) Liquidity risk management: NOTE [58] (contd.) 2023-24 Increase/(decrease) in Equity As at 31-3-2024 As at 31-3-2023 863.58 15.49 3.72 15.49 (15.49) Increase/(decrease) in Profit after tax 2022-23 (3.72) Notes forming part of the Consolidated Financial Statements (contd.) LARSEN & TOUBRO (2855.70) (175.71) Receivable/(payable) exposures with respect to forward contracts and embedded derivatives not designated as cash flow hedge 2501.89 (43.19) (485.62) 164.96 Notes forming part of the Consolidated Financial Statements 507.44 To provide a meaningful assessment of the foreign currency risk associated with the Group's foreign currency derivative positions against off-balance sheet exposures and unhedged portion of on-balance sheet financial assets and liabilities, the Group uses a multi-currency correlated value-at-risk ("VAR") model. The VAR model uses a Monte Carlo simulation to generate thousands of random market price paths for foreign currencies against Indian Rupee taking into account the correlations between them. The VAR is the expected loss in value of the exposure due to overnight movement in spot exchange rates, at 95% confidence interval. The VAR model is not intended to represent actual losses but is used as a risk estimation tool. The model assumes normal market conditions and is a historical best fit model. Because the Group uses foreign currency instruments for hedging purposes, the loss in fair value incurred on those instruments is generally offset by increase in the fair value of the underlying exposures for on-balance sheet exposures. The overnight VAR for the Group at 95% confidence level is 140.87 crore as at March 31, 2024 and 184.30 crore as at March 31, 2023. Actual future gains and losses associated with the Group's investment portfolio and derivative positions may differ materially from the sensitivity analysis performed as at March 31, 2024 due to the inherent limitations associated with predicting the timing and amount of changes in foreign currency exchange rates and the Group's actual exposures and position. (ii) Interest rate risk: The Group's exposure to changes in interest rates relates primarily to the Group's outstanding floating rate debt and lending. The Group's outstanding debt in local currency is a combination of fixed rate and floating rate. For the portion of local currency debt on fixed rate basis, there is no interest rate risk. For the portion of local currency debt on floating rate basis, there exists a natural hedge with receivables in respect of financial services business. There is a portion of debt that is linked to international interest rate benchmarks like SOFR/LIBOR. The Group also hedges a portion of these risks by way of derivative instruments. The Group has completed transition of its LIBOR linked loans to SOFR linked loans. The exposure of the Group's borrowing to interest rate changes is ₹ 24652.62 crore (as at 31-3-202328755.80 crore). 617 7.89 (15.49) (12.73) 12.73 (10.20) 10.20 Financial services business has a risk management framework that monitors and ensures that the business lines operate within the defined risk appetite and risk tolerance levels defined by the management. Risk management function is closely involved in management and control of credit risk, portfolio monitoring, market risks including liquidity risk and operational risks. The credit risk function independently evaluates proposals based on well-established sector specific internal frameworks, in order to identify, mitigate and allocate risks as well as to enable risk-based pricing of assets. Regulatory and process risks are identified, mitigated and managed by a separate group. Risk management policies are made under the guidance of Risk Management Committee and are approved by Board of Directors. (ii) Other than financial services business: The Group's customer profile include public sector enterprises, state owned companies and large private corporates. Accordingly, the Group's customer credit risk is low. The Group's average project execution cycle is around 24 to 36 months. General payment terms include mobilisation advance, monthly progress payments with a credit period ranging from 45 to 90 days and certain retention money to be released at the end of the project. In some cases, retentions are substituted with bank/corporate guarantees. The Group has a detailed review mechanism of overdue customer receivables at various levels within organisation to ensure proper attention and focus for realisation. Integrated Annual Report 2023-24 Derivatives including embedded derivatives for hedging receivable/(payable) exposure with respect to non-financial assets/(non-financial liabilities) Derivatives including embedded derivatives for hedging receivable/(payable) exposures with respect to firm commitments and highly probable forecast transactions Corporate Overview (209.37) 618 (378.20) (349.30) 260.77 (569.13) 274.34 L&T - MHI Power Boilers Private Limited 4.92 112.24 75.06 Financial services business: (i) (c) Credit risk management: (12.73) 12.73 (10.20) 10.20 The Group manages liquidity risk by maintaining sufficient cash and marketable securities and by having access to funding through adequate committed credit lines. Given the need to fund diverse businesses, the Group maintains flexibility by need based drawing from committed credit lines. Management regularly monitors the position of cash and cash equivalents. The maturity profiles of financial assets/liabilities including debt financing plans and liquidity ratios are considered while reviewing the liquidity position. The Group's investment policy and strategy are focused on preservation of capital and supporting the Group's liquidity requirements. The Group uses a combination of internal and external tools to execute its investment strategy and achieve its investment objectives. The Group typically invests in money market funds, large debt funds, Government of India securities, equity and equity marketable securities and other highly rated securities under an exposure limit framework. The investment policy focusses on minimising the potential risk of principal loss. To provide a meaningful assessment of the price risk associated with the Group's investment portfolio, the Group performed a sensitivity analysis to determine the impact of change in price of the securities on the value of the investment portfolio assuming a 0.50% movement in the fair market value of debt funds and debt securities and a 5% movement in the NAV of the equity and equity marketable securities as below: Particulars Debt funds and debt securities - increase by 0.50% in fair market value Debt funds and debt securities - decrease by 0.50% in fair market value Equity and equity marketable securities - increase by 5% in NAV Equity and equity marketable securities - decrease by 5% in NAV crore Increase/(decrease) in investment value As at 31-3-2024 As at 31-3-2023 101.58 (101.58) 8.90 (8.90) 104.02 (104.02) 4.44 (4.44) The investments in money market funds are for the purpose of liquidity management only and hence not subject to any material price risk. 144.34 42186.54 (331.95) Derivatives including embedded derivatives for hedging receivable/(payable) exposure with respect to non-financial assets/(non-financial liabilities) Derivatives including embedded derivatives for hedging receivable/(payable) exposures with respect to firm commitments and highly probable forecast transactions Foreign exchange rate risk: (i) 616 The Group regularly reviews its foreign currency and interest rate related exposures - both hedged and open. The Group primarily follows cash flow hedge accounting for Highly Probable Forecasted Exposures (HPFE), hence, the movement in mark to market (MTM) of the hedge contracts undertaken for such exposures is likely to be offset by contra movements in the underlying exposures values. However, till the point of time that HPFE becomes an on-balance sheet exposure, the changes in MTM of the hedge contracts will impact the Balance Sheet of the Group. Further, given the effective horizons of the Group's risk management activities which coincide with the duration of the projects under execution, which could extend across 3-4 years and given the business uncertainties associated with the timing and estimation of the project exposures, the recognition of the gains and losses related to these instruments may not always coincide with the timing of gains and losses related to the underlying economic exposures and, therefore, may affect the Group's financial condition and operating results. The Group monitors the potential risk arising out of the market factors like exchange rates, interest rates, price of traded investment products etc. on a regular basis. For on-balance sheet exposures, the Group monitors the risks on net unhedged exposures. 1.07 1.32 58.79 9.36 5.61 (a) Foreign exchange rate and interest rate risk: Disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": Market risk management NOTE [58] (c) other intangible assets (b) intangible assets being expenditure on new product development (a) tangible assets (ii) Capital expenditure on: 207.29 187.43 2022-23 2023-24 crore Recognised as expense in the Statement of Profit and Loss (i) Particulars Sr. No. The expenditure on research and development activities is as follows: Research & Development NOTE [57] 208.69 The Group has both receivable and payable exposure in foreign currency. Accordingly, changes in exchange rates, may adversely affect the Group's revenue, cost and profitability. There is a risk that the Group may also have to adjust local currency product pricing due to competitive pressures when there has been significant volatility in foreign currency exchange rates. The Group may enter foreign currency forward and option contracts with financial institutions to protect against foreign exchange risks associated with existing assets and liabilities, firmly committed transactions, forecasted future cash flows and net investments in foreign subsidiaries. In addition, the Group has entered, and may enter in the future, into non-designated foreign currency contracts to partially offset the foreign currency exchange gains and losses on its foreign-denominated debt issuances. The Group's practice is to hedge a portion of its material net foreign exchange exposures with tenors in line with the project/business life cycle. The Group may also choose not to hedge certain foreign exchange exposures. (677.01) Corporate Overview 137.81 Integrated Annual Report 2023-24 (134.53) (433.05) (48.16) 627.16 982.08 Net exposure to foreign currency risk in respect of recognised financial assets/ (recognised financial liabilities) Dinar Kuwaiti Japanese Yen Dollar Canadian As at 31-3-2024 Algerian Dinar Pound 88.55 British Integrated EURO Management Discussion and Analysis Statutory Report Reports Financial Notes forming part of the Consolidated Financial Statements (contd.) NOTE [58] (contd.) The net exposure to foreign currency risk (based on notional amount) in respect of recognised financial assets, recognised financial liabilities and derivatives for major currencies is as follows: crore Particulars US Dollar including pegged currencies Statements crore 23,29 Items of income, expenses, gains or losses related to financial instruments: (c) 178149.46 177286.84 31.53 583.07 1.54 0.20 551.54 23,29 Total (I+II+II+IV) Financial guarantee contracts Sub-total (III) IV. Embedded derivatives designated as cash flow hedges (ii) 23,29 Derivative instruments designated as cash flow hedges (i) Sr. 310.93 21.09 332.02 Particulars (431.46) 2022-23 188.47 18.72 (b) Gains/(losses) on fair valuation or settlement of embedded derivative contracts not designated as cash flow hedges (101.47) 97.76 (a) Gains/(losses) on fair valuation or settlement of forward contracts not designated as cash flow hedges Gains/(losses) on fair valuation/settlement of derivative: 3. (2893.82) Measured at Fair Value through Other comprehensive income (FVTOCI): Gains/(losses) on fair valuation or sale of investments and loans (Financial Services) (including exceptional items) 2. 89.91 698.90 Gains/(losses) on fair valuation or sale of investments 1. Financial asset or financial liabilities measured at FVTPL: A. Net gains/(losses) on financial assets and financial liabilities measured at Fair Value through Profit or Loss (FVTPL) and amortised cost: I. No. 2023-24 III. 114039.77 7275.89 176890.99 17.14 20.55 23,29 (ii) 35.96 32.86 23,29 Derivative instruments not designated as cash flow hedges (i) (iii) Others Measured at Fair Value through Profit or Loss (FVTPL): As at 31-3-2023 As at 31-3-2024 No. Note Particulars Sr. crore Category-wise classification for applicable financial liabilities: (b) I. 10.22 35.12 Sub-total (I) Sub-total (II) (iv) Others 2137.06 2282.45 (iii) Lease liability 48932.42 52274.17 28 Due to others 851.70 1018.71 Due to micro enterprises and small enterprises 118513.38 22,26,27 (ii) Trade payables: Measured at amortised cost: Borrowings (i) II. 88.22 63.63 7042.07 177476.63 Embedded derivatives not designated as cash flow hedges Borrowings 169.08 410.65 332.45 402.46 (561.45) 5.35 4593.65 2022-23 3892.11 2023-24 4414.84 crore Amount of financial assets written off during the year but still enforceable Commodity price risk management: Particulars (v) Amounts written off: Provision as at March 31 (Note 13) Translation adjustment Write off as bad debts Additional provision (net) Provision/(reversal) of allowance for ECL 310.61 Changes in allowance for ECL: Particulars (iv) Reconciliation of allowance for expected credit loss ("ECL") on trade receivables (other than financial services business): (1113.88) 3538.19 (30.73) (258.71) 422.03 1791.86 (824.44) 1324.30 Loss allowance as at 31-3-2024 recovery) 1087.15 1008.72 103.60 (25.17) 87.50 (72.22) Provision as at April 1 (15.28) (207.26) 8.73 4414.84 2023-24 947.78 (ii) Investment in preference shares 356.38 140.35 6,12 Investment in equity instruments (i) As at 31-3-2023 As at 31-3-2024 Note crore (a) Mandatorily measured: Measured at Fair Value through Profit or Loss (FVTPL): I. crore No. Sr. 620 (a) Category-wise classification for applicable financial assets: Other disclosure pursuant to Ind AS 107 "Financial Instruments: Disclosures": NOTE [59] Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements LARSEN & TOUBRO 619 The Group is also exposed to contingent risk on account of commodity price movements that may not be fully offset by contractual provisions in the projects that it has bid for but which are not awarded yet. Commodity prices have been volatile and have witnessed substantial two-way movements during the financial year. This may impact the margin on projects where the Group has submitted bids on a firm price basis. However, for projects where the Group is eligible for an adjustment, based on price variation clause, the actual impact will depend on the exact project wins and the relative contractual provisions therein. The Group bids for and executes EPC projects. These projects entail procurement of various equipment and materials which may have direct or indirect linkages to commodity prices like steel (both long and flat steel), copper, aluminium, zinc, lead, nickel, cement etc. Accordingly, the Group is exposed to the price risk on these commodities. To mitigate the risk of commodity prices, the Group relies on contractual provisions like pass through of prices, price variation provisions and further uses hedging instruments where available [Note 59 (k)(iii)]. There is a certain residual risk carried by the Group that cannot be hedged. 1450.70 2022-23 Particulars 6 Impact on year end ECL of exposure transferred between stages during the year Transfers to Stage 3 67.57 (64.40) 337.08 (315.79) (21.29) Impact on year end ECL of exposure transferred between stages during the year Transfers to Stage 3 (9.49) (19.51) (46.71) 16.21 (6.72) Transfers to Stage 2 66.22 1365.66 Transfers to Stage 1 (1404.77) Amount written off 111.59 61.16 1088.17 New assets originated or purchased Total 3626.52 Stage 3 1434.02 Stage 2 1101.47 Stage 1 1091.03 Loss allowance as at 1-4-2022 Particulars crore 1260.92 (1404.77) Increase/ (Decrease) in provision on existing financial assets (Net of 1368.83 (927.55) (7.06) 13.30 (6.24) Transfers to Stage 2 (12.40) (13.13) 25.53 Transfers to Stage 1 (960.86) (947.49) (13.37) Amount written off 1239.77 Increase/ (Decrease) provision on existing financial assets (Net of recovery) Transfer to fair value through Profit or Loss on account of reclassification from amortised cost 177.98 993.25 New assets originated or purchased 3286.01 1743.32 366.04 1176.65 Loss allowance as at 31-3-2023 (85.29) (391.78) (257.68) (48.81) (1173.71) 14.03 (260.19) 68.54 130.25 145.70 (iii) Investment in mutual funds and units of fund Sub-total (c) 9,18 (v) Embedded derivative designated as cash flow hedges 9,18 (iv) Derivative instruments designated as cash flow hedges 34.99 0.90 6 (iii) Investment in units of funds 12296.86 12925.39 34.99 6 Investment in preference shares (ii) (d) Designated: 6,12 (i) Measured at Fair Value through Other comprehensive income (FVTOCI): (c) Mandatorily measured: III. == 148877.49 1153.05 1300.64 162720.25 23697.77 16031.82 9,14,15 1684.35 1416.41 18 Investment in government securities, debentures and bonds 1759.63 (i) Investment in equity instruments Sub-total (Ic+d) Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial Reports Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [58] (contd.) NOTE [59] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Statements Reports Sub-total (d) Report Statutory Integrated Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 0.09 13236.16 199629.08 0.09 0.10 0.10 14161.65 203580.26 6 815.94 87.38 13236.07 1144.31 56.86 14161.55 = Total (1+11+111) Financial 2790.22 18 44731.53 17056.78 4861.56 16 20458.65 21836.80 802.08 2694.57 12 Sub-total (b) Loans (b) Designated: Sub-total (a) (viii) Investment in InvITs 4861.56 6321.07 6 48.89 168.47 113.47 9,18 20.66 9,18 978.55 553.03 6,12 (iv) Investment in government securities, debentures and bonds (v) Derivative instruments not designated as cash flow hedges (vi) Embedded derivatives not designated as cash flow hedges (vii) Investment in security receipts 11637.51 11414.96 6,12 6769.51 17056.78 26698.36 37515.43 48770.95 13 (vi) Other recoverable (v) Trade receivables 6307.04 5860.95 6,12 (iv) Treasury Bills and other investments 2515.31 937.25 12 (iii) Investment in commercial paper 2096.97 2922.22 6,12 Investment in government securities, debentures, bonds and CBLO (ii) 64931.84 82689.79 7,8,16,17 Loans (i) Measured at amortised cost: II. Sub-total (a+b) Sub-total (II) (ix) Other receivables (viii) Cash and cash equivalents and bank balances (vii) Unbilled revenue (c) Gains/(losses) on fair valuation or settlement of futures not designated as cash flow hedges (6.18) crore 377.74 23,29 20.55 20.55 17.14 17.14 (iii) Others 10.22 10.22 35.12 35.12 (b) Designated at FVTOCI: (i) Derivative instruments designated as cash flow hedges 23,29 designated as cash flow hedges 310.93 551.54 551.54 (ii) Embedded derivative instruments designated as cash flow hedges 23,29 - 21.09 21.09 31.53 31.53 Total 385.43 10.22 395.65 310.93 636.17 (ii) Embedded derivative instruments not 35.96 9,18 1144.31 1144.31 815.94 815.94 (v) Embedded derivative instruments designated as cash flow hedges 9,18 56.86 56.86 (vi) Units of fund 6 87.38 0.90 Discounted cash flow 87.38 Total 24529.13 4187.45 12143.43 40860.01 22803.34 3871.07 24077.18 50751.59 Financial liabilities: Financial liabilities at FVTPL: (a) Designated at FVTPL: (i) Derivative instruments not designated as cash flow hedges 23,29 32.86 32.86 0.90 35.12 671.29 Valuation technique and key inputs used to determine fair value: 71.02 Disposal during the year (0.05) 22753.78 14601.32 (25115.93) 4918.33 2494.75 28990.61 17167.18 (689.18) (25805.16) Reclassification from Amortised cost to FVTPL 6508.91 6508.91 Gains/(losses) recognised in Statement of Profit and Loss (313.30) 0.09 (12.00) 292.48 180.69 Addition during the year Disposal during the year (224.00) (393.52) 197.57 113.84 (249.88) (1691.30) (374.24) (2784.36) 17056.78 6349.66 24077.18 2025.85 2504.10 Balance as at 31-3-2023 Addition during the year 591.09 121.67 A. Level 1: Mutual funds, bonds, debentures and government securities - Quoted price in the active market. B. Level 2: (a) Derivative Instruments – Present value technique using forward exchange rates as at balance sheet date. (b) Preference share and government securities, bonds and debentures - Future cash flows are discounted using G-sec rates as at balance sheet date. Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial Reports Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [59] (contd.) (g) Movement of items measured using unobservable inputs (Level 3): crore Particulars Equity Preference shares Debt Other Loans Total shares instruments Investments Balance as at 1-4-2022 605.74 (iv) Derivative instruments designated as cash flow hedges 0.09 0.09 0.10 Notes forming part of the Consolidated Financial Statements (contd.) NOTE [59] (contd.) (f) Fair value hierarchy of financial assets and financial liabilities at fair value: 624 Particulars Financial assets: crore As at 31-3-2024 As at 31-3-2023 Note Level 1 Level 2 Level 3 Notes forming part of the Consolidated Financial Statements Total Level 2 Level 3 Total Financial assets at FVTPL: (i) Equity shares 6,12 26.29 114.06 140.35 63.99 292.39 356.38 (ii) Preference shares Level 1 LARSEN & TOUBRO 623 Valuation technique Level 2: Future cash flows discounted using market rates. Total 24290.93 24290.93 27770.69 27770.69 52061.62 52061.62 Discounted cash flow As at 31-3-2023 crore Valuation technique for Level 1 Level 2 Level 3 Total level 3 items Financial assets: Loans Government securities, debentures and bonds 1853.41 Total 1853.41 5600.83 105.67 5706.50 35320.59 137.89 35458.48 40921.42 2096.97 43018.39 Discounted cash flow Financial liabilities: Borrowings Total 21584.82 21584.82 30081.09 30081.09 51665.91 Discounted cash flow 51665.91 6 (16005.39) 130.25 145.70 - - 6321.07 6321.07 (viii) InvITs 12 2694.57 2694.57 802.08 802.08 (ix) Loans (Financial Services) 16 4861.56 4861.56 17056.78 6769.51 17056.78 (i) Debt instruments viz. government securities, bonds and debentures 6,12 10072.95 2852.15 (ii) Preference shares (iii) Equity shares 69 34.99 0.10 0.29 12925.39 34.99 9547.08 2749.49 0.29 12296.86 34.99 34.99 Financial assets at FVTOCI: |- - 6769.51 6 (vii) Security receipts 145.70 (iii) Mutual funds and units of fund 6,12 11387.59 27.37 11414.96 11608.92 28.59 11637.51 (iv) Debt instruments viz. government securities, bonds and debentures 6,12 347.73 205.30 553.03 781.27 197.28 978.55 (v) Derivative instruments not designated as cash flow hedges 9,18 20.66 20.66 48.89 48.89 (vi) Embedded derivative instruments not designated as cash flow hedges 9,18 113.47 113.47 168.47 168.47 130.25 Sub-total (A) (725.39) Exchange Differences 6.28 208.49 Sub-total (A) 112.24 6.28 96.25 Dividend income from investments measured at FVTPL Dividend income from Joint Venture (classified as held for sale) (ii) (i) Dividend income: A. 0.06 372.79 (1552.91) 141.46 388.09 B. Net gains recognised in Other comprehensive income (A-B) Interest and other income/expense: Sub-total (B) 16.89 (c) On embedded derivative contracts upon hedged future cash flows affecting the Profit and Loss or related assets or liabilities 409.76 91.94 (b) On forward contracts upon hedged future cash flows affecting the Profit and Loss or related assets or liabilities (ii) Derivative measured at FVTOCI: (37.03) 32.63 (a) On government securities, bonds, debentures etc. upon sale Financial assets measured at FVTOCI: (i) B. III. Gains reclassified to Profit and Loss from Other comprehensive income Interest income: Financial assets measured at amortised cost Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 6242.98 (0.36) (8930.80) (8865.45) 7862.64 Total (A+B+C) Sub-total (C) (23.80) (iii) Financial liabilities measured at FVTPL (8745.41) (185.03) (ii) Derivative instruments (including embeded derivatives) that are measured at FVTOCI (reclassified to Profit and Loss during the year) (8841.65) (i) Financial liabilities measured at amortised cost C. 15167.50 16519.60 3043.44 1581.12 1042.08 1192.11 11081.98 13746.37 Interest expense: Sub-total (B) (iii) Financial assets measured at FVTPL (ii) Financial assets measured at FVTOCI (i) Less: Sub-total (A) 130.82 (1180.12) 622 NOTE [59] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements LARSEN & TOUBRO 621 (2196.86) (2542.87) Sub-total (B) (385.35) (473.42) (b) Gains/(losses) on transfer of financial assets (including non-recourse basis) (527.02) Sr. (104.09) (iv) Gains/(losses) on derecognition: 50.30 (306.42) (iii) (Provision)/reversal for impairment loss (other than ECL) [net] (1962.19) (1650.85) (ii) (Allowance)/reversal for expected credit loss (ECL) during the year 627.40 (8.09) (i) Exchange difference gains/(losses) on revaluation or settlement of items denominated in foreign currency (trade receivables, loans given etc.) Financial assets measured at amortised cost: B. 135.08 (2581.83) (a) Bad debts written off (net) Particulars Financial liabilities: 2023-24 (13.72) 529.55 (c) Gains/(losses) on fair valuation or settlement of embedded derivative contracts designated as cash flow hedges (1027.11) 383.83 (b) Gains/(losses) on fair valuation or settlement of forward contracts designated as cash flow hedges (283.83) 159.44 (a) Gains/(losses) on fair valuation or sale of government securities, bonds, debentures etc. (ii) Derivative measured at FVTOCI: Financial assets measured at FVTOCI: (i) Gains recognised in Other comprehensive income: A. Net gains/(losses) on financial assets and financial liabilities measured at fair value through Other comprehensive income (FVTOCI): II. (43.55) (4822.24) (1669.63) Total (A+B+C) 495.50 Sub-total (C) 259.27 575.54 (ii) Unclaimed credit balances written back (302.82) (80.04) (i) Exchange difference gains/(losses) on revaluation or settlement of items denominated in foreign currency (trade payables, borrowing availed etc.) Financial liabilities measured at amortised cost: C. No. 2022-23 Integrated Statutory Financial Report Debt instruments 4861.56 17056.78 Expected yield Loans Other 6796.88 6349.66 Net Assets Value (NAV) Investments Increase/(decrease) of 5% in the book value would result in impact on profit or loss by 0.89 crore (previous year: 7.99 crore) ₹ Increase/(decrease) of 1% in net realisation would result in impact on profit or loss by 0.31 crore (previous year: 0.28 crore) Increase/(decrease) of 0.25% in capitalisation rate would result in impact on profit or loss by 0.66 crore (previous year: 0.60 crore) Increase/(decrease) of 5% in the book value would result in impact on profit or loss by 3.34 crore (previous year: 4.11 crore) Increase/(decrease) in the fair value by 5% would result in impact on profit or loss by 3.20 crore (previous year: 3.51 crore) 197.57 Expected yield Increase/(decrease) in fair value by 0.25% would result in impact on profit or loss by 0.31 crore (previous year: 0.37 crore) Increase/(decrease) in the NAV by 5% would result in impact on profit or loss by 221.09 crore (previous year: 237.59 crore) 625 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [59] (contd.) (i) Movement of financial liabilities measured using unobservable inputs (Level 3): (j) Particulars Balance as at 1-4-2022 Charge recognised in Statement of Profit and Loss Settled during the year Increase/(decrease) in fair value by 0.25% would result in impact on profit or loss by 7.91 crore (previous year: 24.06 crore) 205.59 98.48 Expected yield 98.47 0.98 0.98 Gains/(losses) recognised in Statement of Profit and Loss Balance as at 31-3-2024 45.68 114.16 (16.43) 165.24 144.06 205.59 1784.32 4861.56 (1331.49) 6796.88 626.14 12143.43 (h) Sensitivity disclosure for level 3 fair value measurements: Particulars Fair value as at 31-3-2024 31-3-2023 Significant unobservable inputs crore 27.59 213.79 Book value Sensitivity Equity shares 86.57 78.69 31-3-2024 and 31-3-2023: 1. Net realisation per month * 35 per sq/ft. 2. Capitalisation rate 11.50% 66.77 82.21 Book value Preference shares Foreign exchange difference 4643.79 (17204.66) Balance as at 31-3-2023 47012.57 148.96 5142.68 47161.53 2096.97 43018.39 43018.39 55077.47 55077.47 Total 2096.97 2922.22 2922.22 Government securities, debentures and bonds 40921.42 40921.42 52155.25 52155.25 Financial liabilities: Loans Fair value crore As at 31-3-2023 Carrying amount amount Fair value Carrying As at 31-3-2024 Particulars (d) Fair value of financial assets and financial liabilities measured at amortised cost: NOTE [59] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Statements Reports Financial assets: Borrowings Total 52214.07 2773.26 Total - 2773.26 Government securities, debentures and bonds 5142.68 Loans Financial assets: As at 31-3-2024 Valuation technique for level 3 items Total Level 3 Level 2 Level 1 crore Fair value hierarchy of financial assets and financial liabilities measured at - (e) Disclosure pursuant to Ind AS 113 "Fair Value Measurement" amortised cost: The carrying amounts of trade and other receivables, cash and cash equivalents, trade and other payables are considered to be the same as their fair values due to their short term nature. The carrying amounts of loans given, borrowings taken for short term or borrowings taken on floating rate of interest are considered to be close to the fair value. Accordingly, these items have not been included in the above table. 2. 1. Carrying amount of loans are net of provision for expected credit losses. Notes: 51665.91 51958.08 52061.62 52214.07 51665.91 51958.08 52061.62 52155.25 2922.22 55077.47 35.96 [1] (iii) Reconciliation of loss allowance provision for financial services business - Loans: 22.85 562.70 Arab Emirates Dirham 183.24 22.54 183.24 562.70 120.39 120.39 Qatari Riyal 335.82 6952.47 89.53 7288.29 22.87 1458.71 219.97 219.97 0.65 21.16 1130.91 0.56 1152.07 Japanese Yen 22.43 255.36 255.36 11.70 146.59 104.59 158.29 British Pound 101.45 1311.72 9644.92 81.25 130.16 1496.29 22.61 862.35 339.41 906.40 Saudi Riyal 0.65 269.82 38.50 1777.62 22.89 1816.12 Qatari Riyal 4.66 862.35 1626.45 192.21 22.02 192.21 10956.64 6471.98 84.48 9582.47 91.86 18515.09 19973.80 EURO 16054.45 US Dollar (b) Payable hedges: 2.97 2.41 2.97 22.93 2.43 22.93 Thai Baht 899.47 12.94 Kuwaiti Dinar 171.79 (* crore) (* crore) (₹) months months rate (crore) After twelve Average Nominal amount (crore) Within After twelve months months (*crore) rate (*) twelve (a) Receivable hedges: US Dollar/Indian Rupees 848.63 666.05 [1] 1244.45 190.48 605.14 [1] 795.62 EURO/US Dollar 879.34 512.95 [1] 1392.29 446.07 402.56 [1] (crore) 790.64 amount Particulars 90.81 625.18 1.20 457.81 92.41 459.01 454.10 Canadian Dollar Swiss Franc 173.20 268.72 173.20 171.79 273.47 Chinese Yuan 171.08 17.86 1.80 Average Nominal Within As at 31-3-2023 As at 31-3-2024 (B) Options taken to hedge exchange rate risk and accounted as cash flow hedge: 2.23 60.96 2.23 1.80 78.95 12.09 78.95 17.86 11.75 61.55 twelve 275.25 795.30 Kuwaiti Dinar Particulars A. Non-derivative liabilities: Borrowings Trade payables: Due to micro enterprises and small enterprises Due to others A 1% point change in the unobservable inputs used in fair valuation of Level 3 liabilities does not have a significant impact on the value. Maturity profile of financial liabilities based on undiscounted cash flows: Other financial liabilities Total crore Within As at 31-3-2024 After As at 31-3-2023 Within Lease Liability 10.22 0.24 (13.09) 204.46 5.42 387.68 43.81 431.49 Charge recognised in Statement of Profit and Loss Settled during the year Foreign exchange difference Balance as at 31-3-2024 Note: crore Contingent consideration 143.41 (51.71) (56.93) 0.35 35.12 (12.05) After 592.14 Note months 90.53 3013.43 88.77 7077.20 2077.52 2691.41 77488.66 192741.29 851.70 48932.42 B. Derivative liabilities: Forward contracts 23, 29 327.69 761.17 45918.99 6988.43 613.89 115252.63 19.35 23, 29 41.64 Total 369.33 19.35 347.04 41.64 388.68 Embedded derivatives 1018.71 52274.17 22.96 741.50 134.67 7286.45 1839.90 2406.14 69147.54 190169.16 995.75 51532.67 7151.78 566.24 121021.62 twelve months Total twelve twelve Total months months 22,26,27 60775.18 66408.51 127183.69 60970.15 72218.41 133188.56 28 23, 29 twelve 578.40 49.23 641.37 24469.91 84.54 27679.70 52149.61 86.59 29715.54 26880.97 93.16 1090.98 463.80 18.03 190.06 219.16 10.91 605.11 22.68 705.19 1115.30 Arab Emirates Dirham Omani Riyal Malaysian Ringgit 1554.78 EURO 56596.51 US Dollar 190.06 10.91 91.19 892.35 222.95 1245.81 1262.35 1411.98 0.56 2674.33 Japanese Yen 22.66 1018.03 1018.03 100.08 93.84 214.40 93.84 57.30 19.26 57.30 (a) Receivable hedges: 209.88 (*crore) (crore) rate (₹) (i) (k) Details of outstanding hedge instruments for which hedge accounting is followed: Outstanding currency exchange rate hedge instruments: NOTE [59] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Statements Reports (A) Forward covers taken to hedge exchange rate risk and accounted as cash flow hedge: Report Statutory Integrated Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 626 Financial As at 31-3-2024 As at 31-3-2023 Nominal (*crore) amount twelve twelve Average Nominal After Within After twelve Within twelve months months (crore) (*crore) rate (₹) (crore) amount Particulars Average months months US Dollar/EURO 912.41 [1] Nominal amount (crore) As at 31-3-2023 Average Within After twelve twelve rate months months (*) (crore) (crore) (a) Receivable hedges: British Pound US Dollar Canadian Dollar Australian Dollar Norwegian Krone EURO 2347.53 83.39 2347.53 3637.97 82.57 3637.97 169.08 rate amount Average Nominal After twelve months ( crore) Within (crore) rate (*) Floating interest rate borrowings - INR (B) Interest rate swaps taken to hedge interest rate risk and accounted as fair value hedge: 500.00 6.25 500.00 400.00 6.23 400.00 (*crore) (crore) (%) (crore) months months rate After twelve twelve Average Nominal amount Within After twelve twelve months months (crore) (crore) (%) (*crore) (C) Forward covers taken to hedge exchange rate risk and accounted as fair value hedge: As at 31-3-2024 Within Nominal Average twelve amount (* crore) months Particulars As at 31-3-2023 Particulars Nominal Average Particulars Nominal After Within After Within As at 31-3-2023 As at 31-3-2024 (D) Forward covers taken to hedge exchange rate risk and accounted as net investment hedge: 104.79 89.19 104.79 285.74 90.71 285.74 3.15 7.86 3.15 20.12 55.12 20.12 21.09 105.46 21.09 6.63 60.26 6.63 Average As at 31-3-2024 twelve twelve (ii) Outstanding interest rate hedge instruments: (A) Interest rate swaps taken to hedge interest rate risk and accounted as cash flow hedge: 194.58 22.28 194.58 Saudi Riyal 152.19 22.32 152.19 32.57 22.82 32.57 Arab Emirates Dirham (a) Receivable hedges: (crore) (crore) (crore) ( crore) (₹) months months rate amount (crore) (₹) (crore) months months rate amount twelve twelve As at 31-3-2024 Particulars Nominal amount Notes forming part of the Consolidated Financial Statements LARSEN & TOUBRO 627 [1] The options contracts include a combination of calls and puts with different maturities and strike prices. 92.93 146.08 As at 31-3-2023 795.68 39.91 69.69 76.99 199.59 173.69 449.33 Notes forming part of the Consolidated Financial Statements (contd.) E E E E 92.93 [1] 92.93 US Dollar/British Pound 39.91 [1] 39.91 British Pound/US Dollar 276.58 73.29 [1] 73.29 EURO/US Dollar 623.02 109.60 239.01 169.08 NOTE [59] (contd.) US Dollar/British Pound US Dollar/EURO Integrated Annual Report 2023-24 I Negative nominal amount represents sell position (net). [1] 39.76 7.55 7.08 14.59 8.25 7465.00 22.84 7.08 23586.00 7.55 171565.00 39.76 1893321.70 130.21 130.21 1778778.54 Nickel (Tn) 173.69 63.70 Lead (Tn) Coking Coal (Tn) 7.34 6.95 7309.80 14.29 Iron Ore (Tn) (5.60) 146.08 [1] 239.01 92.93 [1] 92.93 63.70 174699.52 (d) 449.33 [1] Average rate (₹) (* crore) Nominal amount Particulars Within As at 31-3-2023 As at 31-3-2024 (A) Commodity forward contract: (iii) Outstanding commodity price hedge instruments: Floating interest rate borrowings - INR 300.00 6.41 300.00 (crore) twelve ( crore) months months rate twelve twelve Average Nominal amount (*crore) After Within Within After twelve twelve months months (crore) (crore) (%) (* crore) rate Average (%) (b) Payable hedges: months After twelve months ( crore) 623.02 169.08 281402.89 790.08 9.93 930.05 628 538.65 713489.38 538.65 ( crore) 711972.13 939.98 191859.90 Aluminium (Tn) [1] 919.23 Copper (Tn) Within After 919.23 Average rate (₹) twelve Nominal amount (crore) months months (crore) (crore) twelve 92.93 (0.24) (0.00%) (0.24) (0.00%) (1.78) (0.00%) 0.23% (554.99) 0.19% 379.85 0.44% L&T Financial Consultants Limited 0.00 0.00% 0.00 0.00% 0.10 0.00% 25.28 Trustee Private Limited 3.66 0.03% (0.01) (0.00%) 3.67 0.03% 28.82 0.03% Advisory Private Limited L&T Power Development Limited L&T Infra Investment Partners L&T Himachal Hydropower Limited 0.01% 0.19% (4.17%) 0.05 0.02% (555.04) (4.25%) 1433.64 1.66% L&T Metro Rail (Hyderabad) Limited Developmental Projects: (7.42) 0.02 (0.06%) (0.06%) 198.62 (The Fund) L&T Infra Investment Partners (0.27) (0.00%) (0.27) (0.00%) Mudit Cement Private Limited 25.30 (7.42) 3.11% (1.69%) (0.02%) (0. (0.00) (0.00%) 0.05 0.00% Private Limited Bangalore Spectrum Techpark (0.02) -- (0.00%) (0.02) (0.00%) 0.03 0.00% L&T Infra Investment Partners Private Limited (0.03) -- (0.00%) (0.03) (0.00%) 0.02 0.00% Limited Prime Techpark (Chennai) Private L&T Westend Project LLP L&T Seawoods Limited 330.77 2.49% 0.07 Avenue Techpark (Bangalore) Amount (crore) (0.00%) 0.00% (0.00%) (0.00) Bangalore Galaxy Techpark Private Limited 0.00% 0.05 (0.00%) (0.00) (0.00%) (0.00) Chennai Nova Techpark Private Limited 0.00% 0.04 0.04 (0.01) (0.00%) (0.01) Business Park (Powai) Private Limited 0.00% 1.89 (0.00%) (0.16) (0.00%) (0.16) Millennium Techpark (Chennai) Private Limited (0.00%) Total comprehensive income Amount (*crore) Other comprehensive income 0.03% L&T Parel Project Private Limited (220.05) (1.66%) (220.05) 372.94 0.43% Elevated Avenue Realty LLP [d] (0.01) (0.00%) (0.01) (0.00%) (0.04) (0.00%) 0.34% Limited Realty: 400.12 3.01% 0.59 0.25% 399.53 3.06% 4784.22 5.54% Nabha Power Limited (2.39) (0.02%) (2.39) Chennai Vision Developers Private 297.53 0.27% 34.64 330.70 2.53% 2600.19 3.01% Amount (*crore) Share in Total comprehensive income As % of consolidated As % of consolidated As % of consolidated profit or loss net assets Amount (*crore) As % of consolidated Name of the entity Share in Other comprehensive income Share in profit or (loss) Net Assets, i.e., total assets minus total liabilities NOTE [62] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements LARSEN & TOUBRO 633 34.64 238.73 0.26% 1.80% 0.05 0.02% 238.68 1.83% 1090.49 1.26% L&T Realty Developers Limited 2689.98 2292.45 - [1] 6.22 NA - [1] [1] NA - [1] [1] ΝΑ 0.02 0.01 ΝΑ 0.02 0.02 NA - [1] - [1] 0.15 0.15 (0.01) - [1] 0.01 [1] - [1] ΝΑ ΝΑ - [1] - [1] NA - [1] [1] NA 0.03 ΝΑ 0.04 - [1] NA - [1] 0.01 0.01 ΝΑ 0.03 0.03 ΝΑ - [1] [1] - [1] [1] - [1] -[1] 106.27 0.12% Engineering Limited L&T Energy Hydrocarbon Energy: (5.16) --(0.04%) (5.16) (0.04%) 0.21% Limited 70.52 0.53% 0.34 0.14% 0.34 0.00% 0.34 70.18 0.54% 443.61 L&T Infrastructure Engineering ΝΑ 27.00 (0.33) 0.02 - [1] [1] - [1] 0.12 - [1] 0.12 [1] 0.04 [1] 0.04 (0.14%) 0.02 Integrated Annual Report 2023-24 (0.00%) (0.03) (0.00%) 0.00 0.00% L&T Offshore Private Limited [a] 26.67 0.20% Limited - [1] - [1] ΝΑ 0.08% 0.27 0.11% 9.95 0.08% 78.10 0.09% Private Limited L&T Thales Technology Services 10.22 1300.10 41.60 17.65% 1258.50 9.64% 5051.10 5.85% L&T Technology Services Limited 4970.81 37.39% 9.78% 484.95 L&T Network Services Private 0.01% 2.64% 2286.23 17.51% 23194.96 26.86% L&T Finance Limited [c] Financial Services: (23.32) (0.18%) Limited (23.32) (13.77) (0.02%) Limited L&T Semiconductor Technologies 0.23 0.00% 0.23 0.00% 9.09 (0.18%) 17.24% 205.75% 34.35% Aura Metlab Private Limited 32 Auskini Infraqp Private Limited Accounts Payables Accounts Payables Accounts Payables Accounts Payables Accounts Payables Accounts Payables 33 34 Avn Green Technologies Private Limited Ayurda Millennium Ventures Private Accounts Payables 31 Accounts Payables ΝΑ 0.03 0.03 NA - [1] - [1] ΝΑ [1] [1] 333333 333 333 333 33333 3 3 3333} } } 4485.86 Atlantic Works Private Limited AT & LS Private Limited. 19298.47 22.35% LTIMindtree Limited IT & Technology Services: (29.91) (0.22%) 0.01 0.00% (29.92) 30 (0.23%) 0.02% L&T Electrolysers Limited Hi-Tech Manufacturing: 0.22 0.00% 0.22 0.00% 52.44 0.06% 21.14 (0.00%) 397.64 Bangalore Fortune Techpark L&T Valves USA LLC (6.20) (0.05%) 0.09 0.04% (6.29) (0.05%) 2.80 0.00% L&T Valves Arabia Manufacturing LLC and Others: Valves, Construction Equipment Poland spółka z ograniczoną odpowiedzialnością L&T Technology Services comprehensive income (*crore) Total Amount Amount (crore) Share in Total comprehensive income As % of consolidated As % of consolidated Other comprehensive income Amount (crore) As % of consolidated profit or loss 0.01% net assets 7.98 0.29 (2487.99) (19.05%) (16190.42) (18.75%) subsidiaries Non-controlling Interest in all 192.02 10486.89 503.16 1.44% 9.80 4.16% 182.22 9983.73 66893.82 Total Subsidiaries 1.40% 662.12 0.77% L&T Global Holdings Limited Others: 0.41 0.00% 0.12 0.05% 0.00% (72.85%) Amount (*crore) Name of the entity 0.56 0.00% 33.60 0.04% LTI Mindtree Middle East FZ-LLC 21.20 0.16% 1.22 0.52% 19.98 0.15% 52.03 0.06% LTIMindtree UK Limited 0.29 0.00% (0.13) (0.06%) 0.42 0.00% 4.49 0.01% (Shanghai) Co. Ltd. 0.21% As % of consolidated 0.50 1.06 Share in Other comprehensive income Share in profit or (loss) Net Assets, i.e., total assets minus total liabilities NOTE [62] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements LARSEN & TOUBRO 635 (0.04) (0.00%) (0.04) (0.00%) Cuelogic Technologies Inc. (1.43) (0.01%) (0.01) (0.00%) (1.42) (0.01%) (2.28) (0.00%) Ltd L&T Technology Services (Canada) 0.01% (171.71) (20.01%) (2659.70) 0.07% 0.07 0.03% 9.11 0.07% 37.25 0.04% L&T-Sargent & Lundy Limited 13.66 0.10% (0.00) (0.00%) 13.66 0.10% 82.35 0.10% L&T Howden Private Limited (10.26) (0.08%) 0.60 0.25% (10.86) (0.08%) 9.18 163.19 L&T Offshore Private Limited [al (0.27) 0.02% 3.02 0.02% 93.94 0.11% L&T MBDA Missile Systems Limited (1954.73) (2.26%) further losses recognised] L&T Special Steels and Heavy Forgings Private Limited [The Group's funded exposure (net of impairment) is nil, and hence no Hi-Tech Manufacturing: (22.73) (0.17%) 1.70 0.72% (24.43) (0.19%) 103.13 0.12% Limited L&T Sapura Shipping Private (0.27) (0.00%) (0.00%) 0.19% Generators Private Limited L&T MHI Power Turbine (0.09%) (4.30) (0.00%) Contracting Co. WLL Larsen & Toubro Qatar & HBK Foreign Associates (0.10) -- (0.00%) (0.10) (0.00%) 0.37 0.00% Private Limited Magtorq Engineering Solutions 1.01 0.01% 1.01 0.01% 7.40 0.01% Magtorq Private Limited Gujarat Leather Industries Limited Indian Associates (0.22) (0.00%) (0.22) L&T Camp Facilities LLC (13.43) (0.10%) 2.34 0.99% (15.77) (0.12%) 775.43 0.90% Limited L&T MHI Power Boilers Private Energy: L&T Technology Services Indian Joint Ventures (0.23) (0.02) (0.00%) (0.01) (0.00%) (0.01) 0.90 2.88 Total Associates (0.00%) (0.59) (0.00%) 0.67 3.02 (0.11) (0.11) (0.03%) (4.14) Syncordis Limited (0.08%) (70.13) (0.15%) (19.76) (0.76%) (1.80) (0.16%) (21.56) LTIMindtree PSF S.A. [i] 0.04% 35.57 (0.05%) (6.80) 0.08% 0.20 (0.05%) (6.60) Nielsen+Partner Unternehmensberater GmbH 0.01% (0.03) 5.25 (0.01%) (0.03%) 0.02% 2.12 LTIMindtree S.De.RL.De.C.V. 0.02% 13.59 0.03% 3.94 0.40% 0.94 0.04% 4.88 LTIMindtree S.A. [h] 0.03% 29.43 0.08% 10.26 0.03% 0.08 0.08% 10.34 Syncordis France SARL (0.01%) (8.01) (4.11) (0.33) (0.02%) (0.05%) 0.24 (0.01%) (0.95) Nielsen&Partner Pty Ltd (0.01%) (10.94) (0.02%) (3.14) 0.06% 0.15 (0.02%) (2.99) LTIMindtree USA Inc [I (0.00%) (0.52) (0.00%) (0.01) (0.02%) (0.04) (0.00%) (0.05) L&T Technology Services LLC 0.46% 0.10% (2.25) (1.19) (3.64) (0.11) (0.02%) (2.36) LTIMindtree Swizerland AG [i] (0.05%) (44.38) (0.35%) (45.58) 0.31% 0.72 (0.34%) (44.86) Nielsen+Partner Pte Ltd (0.05%) (40.27) (0.18%) (23.76) (0.02%) (0.05) (0.18%) (23.81) LTIMindtree (Thailand) Limited [k] (0.00%) (0.01%) (0.14%) 2.45 0.02% 23.99 0.80% 105.12 0.12% 0.29 0.79% 105.41 IT & Technology Services: LTIMindtree Information Technology Services (Shanghai) Co., Ltd f 0.00% 3.42 0.02% 3.10 (0.01%) (0.03) 0.02% 3.07 LTIMindtree Financial Services Technologies Inc. 0.64% 550.00 0.26% 0.99% 33.66 1.26 (0.00%) 0.05 0.00% Limited Graphene Solutions Taiwan (0.05) (0.00%) (0.01) (0.00%) (0.04) (0.00%) 0.07 0.00% Graphene Solutions SDN. BHD. (0.11) (0.00%) (0.11) (0.00%) 0.33 0.00% L&T Technology Services Pte. Ltd. 34.92 0.26% 0.53% 129.77 1.63% 3.85 0.05% 7.10 LTIMindtree GmbH 0.47% 403.79 0.00% 0.44 (0.04%) (0.09) 0.00% 0.35 LTIMindtree Spain S.L. [g] 0.00% 2.12 0.01% 0.86 0.00% 0.01 0.01% 0.87 LTIMindtree Norge AS 0.02% 14.17 (1.29) (0.55%) 8.39 0.06% 1.01% 133.62 LTIMindtree Canada Limited 0.11% 98.36 0.21% 27.16 0.27% 0.64 0.21% 27.80 (0.00%) LTIMindtree LLC 6.45 (0.00%) (0.33) 0.04% 0.10 (0.00%) (0.23) LTI Mindtree South Africa (Pty) Limited 0.03% 29.31 0.01% (0.01) Developmental Projects: Projects Limited (Consolidated) 729.78 2.33% 5.49 5.53% 735.27 634 Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial Reports Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [62] (contd.) Net Assets, i.e., total assets minus total liabilities Share in profit or (loss) Share in Other comprehensive income Name of the entity As % of consolidated Amount (*crore) net assets 5.59% As % of consolidated profit or loss (5.08) (0.56) 0.26 (0.08%) (0.19) 0.00% 0.07 Larsen & Toubro (East Asia) Sdn. Bhd. 0.02% 15.84 0.08% 11.10 (0.18%) (0.43) 0.08% 10.67 PT Larsen and Toubro 0.01% Larsen & Toubro International FZE 1.21% 11.38 1042.68 (0.03%) (4.52) (0.24%) (0.04%) 0.00% Amount (*crore) Amount (*crore) 76.59 (0.53%) (1.24) 0.57% 75.35 L&T Hydrocarbon Saudi Company (0.62%) (534.94) 0.65% 84.80 (17.29%) (40.74) 0.33% 44.06 Larsen & Toubro Kuwait Construction General Contracting Co. W.L.L. 0.01% 10.13 0.00% 0.05 0.05% 0.12 0.59% As % of consolidated Other comprehensive income (69.36) Larsen Toubro Arabia LLC Share in Total comprehensive income As % of consolidated Total comprehensive income Amount (*crore) Energy: Larsen & Toubro Heavy Engineering LLC (0.18%) (159.18) (0.13%) (16.33) (0.95%) (2.24) (0.14%) (18.57) L&T Modular Fabrication Yard LLC 0.32% 280.04 0.32% 42.02 1.40% 3.30 0.34% 45.32 (0.08%) 3.50 0.00% (Proprietary) Limited (0.00%) (0.00) (0.00%) (0.00) Valves, Construction Equipment L&T Construction Equipment Limited 0.28% 244.09 0.27% 35.09 (0.85%) (2.01) 0.25% 33.08 L&T Valves Limited 0.62% 534.67 0.40% 52.79 (0.07%) (0.16) 0.40% 0.05 52.63 0.00% LH Uttarayan Premium Realty Private Limited 0.00% 0.03 (0.00%) (0.02) (0.00%) (0.02) Corporate Park (Powai) Private Limited 0.00% 2.04 (0.00%) (0.01) (0.00%) (0.01) LH Residential Housing Private Limited [e] (0.01%) (10.31) (0.08%) (10.41) (0.08%) (10.41) Private Limited Others: Bhilai Power Supply Company Limited 6.80% 16.02 0.45% 59.51 Larsen & Toubro Qatar LLC (0.00%) (0.87) (0.00%) (0.05) (0.00%) (0.01) (0.00%) (0.06) Larsen & Toubro Saudi Arabia LLC 0.84% 728.46 1.50% 195.97 (10.31%) (24.31) 1.29% 171.66 Larsen & Toubro T&D SA 43.49 0.33% 414.99 0.48% 0.00% 0.05 (0.00%) (0.00) L&T Aviation Services Private Limited 0.04% 38.06 0.01% 1.64 L&T Capital Company Limited 0.00% 0.00% 0.01% 0.88 (0.00%) (0.00) 0.01% 1.64 0.01% 0.88 Foreign Subsidiaries Infrastructure: Larsen & Toubro (Oman) LLC 4.22 L&T Infrastructure Development 0.17 0.03% 0.03% 3.98 (23.52) 1.22 (28764.30) 86359.24 (33.29%) 0.03% (0.70) -- (0.01%) 0.14 0.00% 0.02 (0.01) (0.00%) Total CFS adjustment and elimination Total Joint Ventures Asia Private Limited JV LLP Limited and LEA Associates South L&T Infrastructure Engineering Infrastructure: (0.70) (0.01%) (0.04) (0.00%) (28.46%) Company (3718.34) 13059.11 4.73 (54.00) 235.70 b) a) (ii) In respect of L&T Seawoods Limited: (i) During the year, the Parent Company renewed both shareholder and bridge loans of Limited (LTSSPL), a subsidiary [1], due to delay in generation of sufficient cash from operations. However, LTSSPL subsequently fully repaid the bridge loan of 126.56 crore with a delay. 303.50 crore to L&T Sapura Shipping Private Notes with respect to remarks in CARO Report: a) NOTE [63] [] formerly known as Lymbyc Solutions Inc. [k] formerly known as Nielsen & Partner Company Limited [j] formerly known as Nielsen+Partner Unternehmensberater AG [i] formerly known as Syncordis PSF S.A. [h] formerly known as Syncordis S.A. [g] formerly known as L&T Information Technology Spain SL [f] formerly known as L&T Information Technology Services (Shanghai) Co., Ltd [e] formerly known as LH Residential Housing Limited [d] formerly known as L&T Avenue Realty LLP [c] formerly known as L&T Finance Holdings Limited [b] formerly known as L&T Power Limited [a] formerly known as L&T Sapura Offshore Private Limited 13294.81 3.98 (18.79) (3772.34) (28.37%) (22.89%) The payment of interest of 1.53 crore on the loan given by L&T Seawoods Limited, a subsidiary, to Elevated Avenue Realty LLP, a subsidiary, has been paid with a delay. There was no overdue as at March 31, 2024. Hydrocarbon Arabia Limited 0.12 Others: NOTE [62] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Statements Reports Financial Statutory Integrated Report Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 636 (1.37) (0.01%) (1.37) (0.01%) 701.67 (0.37) (0.00%) GH4India Private Limited 0.81% Note 45(a)] post classification as Held for Sale, [Equity accounting discontinued Net Assets, i.e., total assets minus total liabilities 0.01% Share in profit or (loss) Name of the entity 0.00% 0.05 0.00% Systems Kish PJSC Indiran Engineering Projects & Energy: Foreign Joint Ventures (0.01) (0.00%) (0.65) (0.00%) Private Limited Raykal Aluminium Company Amount (*crore) Total comprehensive income Amount (crore) Share in Total comprehensive income As % of consolidated As % of consolidated Other comprehensive income Amount (*crore) As % of consolidated profit or loss net assets Amount (*crore) As % of consolidated Share in Other comprehensive income Erstwhile L&T Innovation Campus (Chennai) Limited (merged with L&T Seawoods Limited), a subsidiary, has not repaid the loan given by L&T Realty Developers Limited (LTRDL), a subsidiary, of 55.11 crore and interest thereon of 1.53 crore on its due date due to delay in generation of internal accruals and it remained unpaid as on March 31, 2024. Further, during the year, interest of 4.84 crore has been paid with a delay. (iii) During the year, the LTRDL renewed the loans aggregating to ₹ 73.51 crore given to erstwhile L&T Innovation Campus (Chennai) Limited (merged with L&T Seawoods Limited) of ₹55.11 crore and LH Residential Housing Limited, a subsidiary of 18.40 crore due to insufficient funds. (iv) L&T Special Steels and Heavy Forgings Private Limited (LTSSHF), a subsidiary [1], has not repaid the loan and net interest thereon aggregating to 2210.03 crore to its promoters, viz Larsen & Toubro Limited of 2071.53 crore and Nuclear Power Corporation of India Limited of 138.50 due to insufficient funds. LTSSHF is in discussion with its promoters for exploring options to restructure its balance sheet. Accounts Payables Alpana Buildtech Private Limited 20 Accounts Payables Accounts Payables Accounts Payables Alias Management Marketing Private Limited Alakshya Infracon Private Limited Alert Infraprojects Private Limited Accounts Payables Akonn Infra Tech (India) Private Limited Accounts Payables Akashdeep Infratech Private Limited 569 80 0 19 18 17 16 15 Accounts Payables Aghasthya Infratech Mangalore Private Accounts Payables Aircon System Engineers Private Limited 14 Limited 13 Accounts Payables 21 Aeroglobal Infrastructure Engineers Private Limited Alufascia Private Limited 22 29 Limited Ashok Balyan Infra Project Private 28 Artisans Design & Build Private Limited 27 Accounts Payables Arj Infra Private Limited 26 NA Accounts Payables Antilia Facility Management Private Limited 25 Accounts Payables Angelina Infratech Private Limited 24 Accounts Payables Amritlaxmi Properties Private Limited 23 222 Limited Accounts Payables Amaravati Rcc Pipes India Private Accounts Payables 12 Accounts Payables Accounts Payables Balance outstanding as at March 31, 2023 Balance outstanding as at March 31, 2024 0.02 ΝΑ Accounts Payables Accounts Payables Accounts Payables Accounts Payables Accounts Payables Accounts Payables Abhiraksha Constructions Private 6 A K Infrasolutins Private Limited Aadhiraj Projects Private Limited Aahsin India Private Limited Aarib Constructions Private Limited Aayansh Securities Systems Private Limited 2 3 4 5 1 Relationship with the struck off company Nature of transaction Name of struck off company Sr. No. crore 638 Miscellaneous expenses under the heading Sales, administration and other expenses [Note 38] during the year include contribution paid to a Trust: 200.00 crore (previous year: Nil). Balance outstanding with struck off companies: b) NOTE [63] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements LARSEN & TOUBRO 637 [1] Subsidiary classification is in accordance with the Companies Act, 2013 0.02 3 3 3 3 ΝΑ - [1] Adm Infracon India Private Limited Advance Mep Solutions Private Limited 11 10 Accounts Payables Active Brain Infra Engg Private Limited 9 Accounts Payables Acrp Infracon Private Limited 8 Limited Accounts Payables Larsen & Toubro Electromech LLC Ace Offshore And Engineering Private Limited 0.15 0.15 NA 0.02 0.02 ΝΑ 0.02 0.02 NA -[1] 7 and Others: Aggregates Limited (0.03) Amount included in non-financial asset/liability (1.58) 14.56 Amount included in progress billing in Balance Sheet (5.78) 207.79 Translation adjustment 0.05 (0.01) Taxes related to above (121.36) 321.95 Closing balance 279.01 146.53 crore Cost of hedging reserve 2023-24 2022-23 Opening balance (4.77) (4.72) Changes in the forward element of the forward contracts where changes in spot element of forward contract is designated as hedging instruments for time period related hedges (3.08) (185.91) Amount reclassified to Profit or Loss 3.21 (410.63) 185.84 (112.04) 82.94 0.64 3.89 5.78 50.12 (207.79) 63.27 (60.09) 195.94 (185.03) 146.72 (o) Movement of cash flow hedging reserve and cost of hedging reserve: crore Cash flow hedging reserve 2023-24 Opening balance 146.53 2022-23 723.25 Changes in the spot element of the forward contracts which is designated as hedging instruments for time period related hedges 21.09 142.46 Changes in fair value of forward contracts designated as hedging instruments 344.80 (909.65) Changes in intrinsic value of option contracts 13.51 (26.13) Changes in fair value of swaps (6.21) Amount reclassified to Profit or Loss Taxes related to above (0.03) 0.02 34390.91 43416.17 35399.08 630 Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Statutory Financial Report Reports Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [61] Disclosure pursuant to Ind AS 116 "Leases": (a) Where the Group is a lessor: (i) Finance leases: A. Assets given under leases mainly include power plant where the Group has agreed to manufacture/construct an asset and convey, in substance, a right to the beneficiary to use the asset over a major part of its economic life, for a pre-determined consideration. B. Finance lease income recognised in the Statement of Profit and Loss: 966.49 crore (previous year: above, 895.71 crore (previous year: 945.83 crore) is on the net investment in finance lease and 1019.45 crore). Out of 70.78 crore (previous year: 73.62 crore) is income relating to variable lease payments not included in the measurement of the net investment in finance leases. C. Sub-lease income recognised on finance leases: Nil (previous year: 0.02 crore). D. The gross investment in these leases and the present value of minimum lease payments receivable are as under: crore 42268.67 1008.17 1147.50 Total non-current financial assets hypothecated as collateral Closing balance NOTE [60] (4.67) (4.77) Value of financial assets and inventories hypothecated as collateral for liabilities and/or commitments and/or contingent liabilities: crore Particulars As at 31-3-2024 As at 31-3-2023 Current: Investments Inventories and trade receivables Cash and cash equivalents crore 2022-23 25.01 9743.23 63.08 4423.91 Loans 30881.61 38288.80 Other assets 1510.36 680.45 Total inventories and current financial assets hypothecated as collateral 42223.29 54369.71 Non-current: Investments Loans 509.34 10467.21 2023-24 (v) Sales, administration and other expenses (iv) Finance costs (ii) Option contracts (a) Current: Asset Other financial assets 40.10 - 13.60 42.53 25.05 - Liability Other financial liabilities 1.95 10.11 (b) Non-current: Asset Other financial assets Liability Other financial liabilities 2.67 27.67 4.85 (B) Fair value hedge: Particulars Forward contracts (a) Current: crore As at 31-3-2024 Currency Interest rate exposure exposure As at 31-3-2023 Currency Interest rate exposure exposure 201.61 13.90 Liability Other financial liabilities 1.29 283.04 123.01 [1] 123.01 [1] The options contracts include a combination of calls and puts with different maturities and strike prices. Carrying amounts of hedge instruments for which hedge accounting is followed: (A) Cash flow hedge: Particulars crore As at 31-3-2024 Currency Interest rate exposure exposure Commodity price exposure As at 31-3-2023 Currency Interest rate exposure exposure Commodity price exposure (i) Forward contracts Asset Other financial assets (a) Current: 323.57 64.14 443.65 Liability Other financial liabilities 278.93 36.86 333.49 62.97 15.40 (b) Non-current: Asset Other financial assets 750.61 6.47 298.87 Asset Other financial assets Minimum lease payments 1.90 4.28 Balance towards continuing hedges 197.17 (4.67) (0.73) (4.77) Balance for which hedge accounting discontinued 81.84 147.26 Total 279.01 (4.67) 146.53 (4.77) 629 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [59] (contd.) (n) Reclassification of hedging reserve and cost of hedging reserve to Profit or Loss: Particulars (A) Future cash flows are no longer expected to occur: (i) Sales, administration and other expenses (B) Hedged expected future cash flows affecting Profit or loss: (i) Progress billing (ii) Revenue from operations (iii) Manufacturing, construction and operating expenses reserve reserve reserve reserve (C) Net investment hedge: Particulars Forward contracts (a) Current: Asset Other financial assets Liability Other financial liabilities (m) Breakup of cash flow hedging reserve and cost of hedging reserve: 8.16 1.67 0.77 crore As at 31-3-2024 As at 31-3-2023 Currency exposure Currency exposure Liability Other financial liabilities 0.01 0.38 1.87 crore As at 31-3-2024 Cash flow As at 31-3-2023 Cost of Cash flow Cost of Particulars hedging hedging hedging hedging 1.29 [1] Sr. No. 13.72 106.16 426.33 435.39 Buildings 464.36 420.65 776.29 529.52 1846.44 1671.96 Plant & equipment 18.73 27.03 1.06 22.13 10.71 28.37 Furniture & fixtures 0.83 1.67 1.81 Vehicles 0.14 0.07 6.08 5.93 2022-23 As at 31-3-2024 As at 31-3-2023 Computers 2023-24 23.68 44.01 4 Receivable later than 3 years and not later than 4 years 64.67 45.31 5 6 Receivable later than 4 years and not later than 5 years Receivable later than 5 years Total (1+2+3+4+5+6) 58.12 45.00 384.95 423.70 753.52 713.06 (b) Where the Group is a lessee: (i) The Group has taken on lease various assets such as plant & equipment, buildings, furniture & fixtures, vehicles and computers. Generally, leases are renewed only on mutual consent and at a prevalent market price. (ii) The Group during the year has leased out surplus capacity in leased assets and has accounted an income of 1.90 crore (previous year: 5.05 crore) on such sub-leases. (iii) Details with respect to right-of-use assets: 632 * crore Depreciation for the year Additions during the year Carrying amount Class of asset 2023-24 Land 2022-23 21.51 0.34 0.59 Total As % of consolidated profit or loss Share in Other comprehensive income As % of consolidated Share in Total comprehensive income As % of consolidated Amount (crore) Other comprehensive income Amount (*crore) Total comprehensive income Amount (*crore) Parent company Larsen and Toubro Limited 74.59% 64416.04 71.25% 9304.33 (19.62%) (46.25) 69.64% 9258.08 Indian Subsidiaries Infrastructure: Hi-Tech Rock Products and L&T Energy Green Tech Limited [b] 0.03% 23.77 0.00% L&T Geostructure Private Limited 0.51% Amount (*crore) As % of consolidated net assets Name of the entity Share in profit or (loss) 508.08 471.52 797.15 657.81 2289.41 0.34 2137.87 (iv) Interest expense on lease liabilities amounts to ₹ 167.21 crore (previous year: 158.10 crore) (v) Amounts not included in the measurement of the lease liability and recognised as expense in the Statement of Profit and Loss during the year are as follows: A. Short term leases - 5634.83 crore (previous year: 3858.54 crore); B. Low value leases - 75.90 crore (previous year: 79.90 crore) (vi) Total cash outflow for leases amounts to 5496.32 crore (previous year: 4454.14 crore) during the year including cash outflow of short term and low value leases. 71.07 (vii) The Group has entered into certain lease agreements, which had not commenced by the year end and as a result, a lease liability and right-of-use asset has not been recognised. The aggregate future cash flows to which the Group is exposed in respect of these contracts are: Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Statutory Financial Report Reports Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [62] Additional information pursuant to Schedule III to the Companies Act, 2013 for the year ended 31-3-2024: Net Assets, i.e., total assets minus total liabilities Fixed payments of 16.20 crore (previous year: 8.85 crore) per year, for a lease term of 5 years (previous year: 5.25 years) Receivable later than 2 years and not later than 3 years 3 60.73 1002.33 296.39 288.43 6 Receivable later than 5 years 9470.75 10438.59 4973.20 5269.57 7 Unguaranteed residual value 990.36 990.36 990.36 990.36 8 Gross investment in leases (1+2+3+4+5+6+7) 15759.20 17267.99 7600.34 8223.21 9 Less: Unearned finance income 8158.86 9044.78 10 Present value of minimum lease payments receivable (8-9) 7600.34 977.77 Receivable later than 4 years and not later than 5 years 5 264.14 As at 31-3-2024 As at 31-3-2023 As at 31-3-2024 Present value of minimum lease payments As at 31-3-2023 1 Receivable not later than 1 year 1291.51 1518.72 542.84 688.38 2 Receivable later than 1 year and not later than 2 years 8223.21 1017.80 244.98 477.36 3 Receivable later than 2 years and not later than 3 years 1008.68 1017.80 264.14 244.97 4 Receivable later than 3 years and not later than 4 years 1002.33 1008.68 288.43 1291.51 Particulars 11 Expected credit loss on lease receivables 5611.70 6234.57 (ii) Operating leases: A. The Group has given, on non-cancellable lease, certain assets such as buildings, plant & equipment, furniture & fixtures and vehicles. Leases are renewed only on mutual consent and at a prevalent market price and sub-lease is generally restricted. B. Operating lease income recognised in the Statement of Profit and Loss: 174.55 crore (previous year: 162.19 crore). C. Sub-lease income recognised on operating leases: 1.90 crore (previous year: 5.03 crore). 631 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [61] (contd.) D. Annual undiscounted lease payments receivable is as under: crore As at As at Sr. No. Particulars 31-3-2024 31-3-2023 1 Receivable not later than 1 year 95.13 94.31 2 Receivable later than 1 year and not later than 2 years 79.58 Closing balance (1+2+3+4+5) 6 0.42 (Impairment)/(Expected credit loss)/reversal during the year 1988.64 1988.64 1988.64 Net lease receivables (10-11) 5611.70 6234.57 5611.70 1988.64 6234.57 E. Reconciliation of carrying amount of net investment in finance lease receivables: Sr. No. Particulars 2023-24 crore 2022-23 Less: Impairment [in Developmental Projects Segment] 1 6234.57 6558.43 2 Finance income/sub-lease income recognised during the year 3 Addition/(Deletion) to finance lease during the year 895.71 0.17 945.85 4 Lease rental received during the year (1518.75) (28.40) (1241.73) 5 Opening balance 283.04 118.16 [1] Nominal After Within After Within As at 31-3-2023 As at 31-3-2024 Copper (Tn) Aluminium (Tn) Average Particulars NOTE [59] (contd.) Notes forming part of the Consolidated Financial Statements (contd.) Statements Reports Financial Statutory Integrated Report Corporate Overview 112.48 301.25 (B) Commodity option contract: Nominal Management Discussion and Analysis twelve Average (crore) (crore) (₹) (* crore) (* crore) ( crore) (*) (*crore) months 112.48 301.25 months twelve months twelve twelve [1] rate amount rate months amount Lakshman Singh Construction Private Accounts Payables Accounts Payables Limited 116 Lanster Developer Private Limited Accounts Payables 117 Laxmi Infra Eng Private Limited 118 L-Upd-Saubha-Auraiya Dehat And Accounts Payables 119 Ganga Mechanical Works Private Limited Accounts Payables 120 Mangalam Consultancy Private Limited 115 Accounts Payables Accounts Payables Kanpurnagar Dvvnl Kiwi Projects Private Limited 114 ΝΑ Limited 108 Kegan Constructions Private Limited Accounts Payables 109 110 Kishley Constructions Private Limited Kissan Land Promoters Private Limited Accounts Payables Accounts Payables 111 Accounts Payables 112 Knight Engineers Contractors & Accounts Payables Consultants Private Limited 113 Kolkata Industrial Security Service Private Limited Accounts Payables Ktek Level Engg Private Limited 121 127 Accounts Payables 128 Maxx Ultra Conchem Opc Private Limited Accounts Payables 3333 33333 3 333 33 3 33333 33333 3 3 3 3 ΝΑ Balance outstanding as at March 31, 2024 - [1] Balance outstanding as at March 31, 2023 [1] Accounts Payables ΝΑ - [1] NA - [1] - [1] ΝΑ - [1] - [1] 0.13 - [1] Maxtel Constructions Private Limited Accounts Payables Accounts Payables ΝΑ 122 Manish Duggal Telecom Private Limited Accounts Payables ΝΑ 123 Mars Dsp Waves Private Limited Accounts Payables ΝΑ 124 Marvel Technicals Sales And Service Accounts Payables ΝΑ Private Limited 125 Mass Ventures Limited Accounts Payables 126 Maurya Devbuild Private Limited Manha Earthcon Private Limited Kazmi And Sons Builders Private Balance outstanding as at March 31, 2023 Management Discussion and Analysis Accounts Payables Care Infra Engineers Limited 47 46 Accounts Payables Calorifique Renewable Energie India Private Limited 55 45 47 Accounts Payables Accounts Payables Bulsar Construction And Consulting Opc Private Limited 44 Brjs Contractors Private Limited 43 Brightom Hospitality & Events Private Limited 42 42 Accounts Payables Chandrawati Power Construction Accounts Payables Private Limited Accounts Payables Accounts Payables Accounts Payables Accounts Payables Accounts Payables Accounts Payables Accounts Payables 55 Deepak Singh Chouhan Construction Private Limited Csp Constructions Private Limited D.B. Constructions Private Limited Ddsabi Global Services Private Limited 52 2345 Private Limited Accounts Payables Csk Engineering And Construction 51 Accounts Payables Accounts Payables Creo Projects Private Limited 50 Cmi Limited Accounts Payables Cheyuta Infrasturcture Private Limited 825 49 48 Accounts Payables Accounts Payables Bramhands Infrastructure Private Limited 41 Brahmaputra Engitech Private Limited Accounts Payables BK Equipments Private Limited 35 Relationship with the struck off company No. Nature of transaction Name of struck off company Sr. crore Balance outstanding with struck off companies: (contd.) c) NOTE [63] Notes forming part of the Consolidated Financial Statements (contd.) Statements Reports Report Financial Statutory Integrated NA Corporate Overview Balance outstanding as at March 31, 2024 [1] [1] 40 Accounts Payables Blueman Construction Projects Private Limited 39 Accounts Payables Bindra Evolutiion Enterprises Private Limited 38 Limited 0.02 ΝΑ Accounts Payables Bennett Coleman And Company 37 Limited [1] ΝΑ Accounts Payables Baba Balaknathji Entertainment Private 36 - [1] 0.13 ΝΑ 0.06 NA [1] - [1] ΝΑ 금금금금금금금금금 름 Accounts Payables Accounts Payables Accounts Payables 0.02 Accounts Payables Accounts Payables Accounts Payables Accounts Payables Umansh Infracon Private Limited 233 Ultra-Tech Concretes Works Private Limited 232 Ukr Infra Private Limited Accounts Payables 0.02 ΝΑ - [1] Balance outstanding with struck off companies: (contd.) 642 crore Sr. No. Name of struck off company Nature of transaction Relationship with the struck off company 135 Narshimha Buildtech Private Limited ΝΑ 0.04 [1] - [1] NA 0.04 ΝΑ _ [1] NA - [1] 231 Tumbi Office Systems Private Limited 230 Private Limited ΝΑ 금금금 NA Accounts Payables Thought Zone Consulting Private 223 Accounts Payables Thakurai Engineering Private Limited 222 Accounts Payables Texsa India Limited 221 0.07 0.07 ΝΑ 0.02 0.02 ΝΑ - [1] - [1] c) - [1] 0.15 Trunk Facility Management Services 229 Triplex Builders Private Limited 228 Limited Torobuild Constructions Opc Private 227 TMM Industries Private Limited 226 Limited Accounts Payables Timely Developers Consultants Private 225 Accounts Payables Threess Innovative Tech India Private Limited 224 Limited 0.15 [1] - [1] ΝΑ NOTE [63] Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements NA [1] - [1] ΝΑ - [1] - [1] ΝΑ - [1] [1] NA - [1] [1] NA - [1] -[1] - [1] -[1] - [1] [1] - [1] - [1] - [1] - [1] 0.06 - [1] - [1] 0.07 0.07 ΝΑ 0.03 0.03 - [1] [1] [1] [1] 0.03 0.03 ΝΑ 0.02 0.02 ΝΑ - [1] 555 [1] - [1] - [1] MSP Develco Private Limited Muskan Techno Engineering Construction Private Limited Nap Energy And Infratech Private Limited Accounts Payables Accounts Payables Accounts Payables 3 3333 New Proponent Security Services Private Limited - [1] - [1] NA [1] ΝΑ 0.01 NA 0.07 - [1] 0.01 0.07 NA - [1] 641 LARSEN & TOUBRO 134 - [1] 133 Accounts Payables - [1] - [1] - [1] -[1] - [1] - [1] - [1] - [1] [1] 129 Mecavo (R&D) Private Limited Accounts Payables NA -0.04 130 Mecvil Infracon Private Limited Accounts Payables 131 Mei Engineers Private Limited 132 56 Divaah Adya Facility Solutions Private Limited Devine Devbuild Private Limited Dhanamjay Infra Private Limited ΝΑ -[1] - [1] ΝΑ - [1] - [1] NA 33 33 3 3 3 3 3 3 3 3 3 333333 0.01 Accounts Payables 94 ΝΑ Accounts Payables Imperium Infratech Private Limited 93 Accounts Payables Ifensys Software Solutions Private Limited 92 Indco Engineers & Contractors Private 0.01 ΝΑ 0.02 0.03 ΝΑ [1] [1] ΝΑ NA [1] - [1] NA [1] - [1] NA 0.05 0.05 NA 0.03 0.03 ΝΑ 0.02 Accounts Payables Hudor Projects India Private Limited Accounts Payables Hsb Projects Private Limited 84 Accounts Payables Gogreen Facility Management Private Limited 83 Accounts Payables Gnxt Energy Private Limited 82 88 Services Private Limited Accounts Payables Global Engineering & Marketing 81 Accounts Payables Genesis Infosolutions Private Limited 80 Accounts Payables G-5 Construction Private Limited 79 Accounts Payables Goldentree Facility Management NA Private Limited Gulba Topographical Surveyors Private Limited 90 85ས 91 OPC Accounts Payables Honeyed Engineering Private Limited 89 Private Limited Accounts Payables Accounts Payables Accounts Payables Accounts Payables Accounts Payables Harhar Mahadev Infra Developer 88 Works Private Limited Ham Constructions & Engineering 87 H M Brothers Limited 86 85 Accounts Payables NA 0.03 [1] Name of struck off company No. Sr. crore Balance outstanding with struck off companies: (contd.) c) NOTE [63] Notes forming part of the Consolidated Financial Statements (contd.) Nature of transaction Statements Report Financial Statutory Integrated Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 [1] Reports Relationship with the struck off company 99 Inox India Private Limited 107 Accounts Payables Accounts Payables Accounts Payables Accounts Payables Accounts Payables Accounts Payables Jrc Biuildcon Private Limited 106 Jps Engineering Private Limited 105 Jodhpur Infra-Con Private Limited 104 Jbs Estcon Private Limited 103 Jatra Services India Private Limited 102 Janatha Readymix Concrete India Private Limited 101 Accounts Payables Isha Heights And Silos Private Limited 100 Accounts Payables [1] ΝΑ Accounts Payables Innovations Events And Entertainment Private Limited - [1] NA - [1] - [1] - [1] 0.03 - [1] - [1] ΝΑ 0.03 NA - [1] ΝΑ 0.04 0.04 ΝΑ [1] - [1] NA [1] - [1] Limited Infisoft India Technology Private 98 Limited [1] - [1] ΝΑ Accounts Payables Inl-Intech India Automation Private 97 - [1] -[1] ΝΑ Accounts Payables Infra American India Private Limited 96 Limited - [1] - [1] ΝΑ Accounts Payables 95 57 Accounts Payables 78 - [1] NA - [1] - [1] NA 3 33 33 333 333 3333 3333 33 3 3 3 3 3 3 3 3 Limited 0.13 [1] 0.13 Accounts Payables Edgecon Engineering Projects Private 66 99 Limited 0.06 - [1] - [1] ΝΑ ΝΑ ΝΑ 0.01 0.01 NA [1] - [1] NA [1] - [1] NA 0.02 0.07 NA 0.27 0.24 ΝΑ -[1] - [1] ΝΑ 0.01 0.01 NA Accounts Payables 0.06 NA Accounts Payables ΝΑ Accounts Payables Dipl Construction Private Limited 60 - [1] ΝΑ Accounts Payables Dimensions India Private Limited 59 866 61 0.02 - [1] 0.02 - [1] Dhiren Construction India Private Limited 58 [1] - [1] 0.10 - [1] Accounts Payables - [1] Dwarkesh Buildcom Private Limited Dynastyraj Infrastructure Private [1] _ [1] ΝΑ Accounts Payables Dv Procon Private Limited - [1] - [1] NA Accounts Payables Dne Infra Private Limited 62 23 15 65 64 63 [1] 0.10 - [1] NA Filtm Online Services Private Limited Friends Civil Works Private Limited Fundamental Infratech Private Limited -[1] 0.03 - [1] NA 금금금금금금금금 Accounts Payables Accounts Payables Accounts Payables Accounts Payables Fairmans Construction Private Limited Faithful Creator Infra Private Limited Farhad Interior And Exterior Private Limited 74 Expeditive Infotech Private Limited 72 [1] Accounts Payables 12345 75 73 71 Accounts Payables Escalador Geo-Systems And 70 Accounts Payables Engineering Survey Private Limited Essa Infrabuild Private Limited NA ΝΑ 0.01 77 76 -[1] - [1] [1] [1] - [1] ΝΑ [1] ΝΑ - [1] NA - [1] NA - [1] -[1] 0.01 0.01 NA 0.01 Er Infra Innovative Private Limited 69 Private Limited Accounts Payables 639 0.01 - [1] 0.28 - [1] 0.02 0.01 - [1] 0.28 - [1] 0.02 ΝΑ - [1] - [1] ΝΑ 0.12 - [1] ΝΑ 0.03 LARSEN & TOUBRO ΝΑ Notes forming part of the Consolidated Financial Statements NOTE [63] Energie Shine Engineering Solution 89 68 [1] outstanding as at March 31, 2023 outstanding as at March 31, 2024 _ [1] Balance Balance Relationship with the struck off company NA Accounts Payables Elena Management & Services Private Limited 67 Nature of transaction Name of struck off company Sr. No. crore 640 Balance outstanding with struck off companies: (contd.) c) Notes forming part of the Consolidated Financial Statements (contd.) [1] 137 0.08 L&T Finance Limited [a] L&T Network Services Private 8 7 100.00 100.00 No. Particulars Sr. Sr. No. % of share holding 15 Proposed dividend - preference 14 (348.99) (1332.74) Limited Financial year ending on 31-Mar-24 31-Mar-24 money pending allotment) Share capital (including share application 1 Date of Acquisition 24-Aug-10 16-Jun-11 12-Aug-11 Proposed dividend - equity 30-May-11 07-Dec-22 Date of incorporation financial year Exchange rate on the last day of INR INR Currency 01-May-08 13 Interim dividend preference 12 13.39 1739.14 5879.44 31.55 94.45 0.34 Profit before taxation 9 8 8678.87 34253.44 281.14 970.38 17.92 Turnover 7 68.46 9.00 Provision for taxation 4.55 (179.73) (1219.02) - Interim dividend equity 11 9.95 1258.50 24.27 4485.86 70.18 0.34 Profit after taxation 10 3.44 480.64 1393.58 27.00 2488.94 5.00 0.10 Provision for taxation 9 (555.04) 35.54 0.01 4.90 2986.64 0.08 0.32 8 1397.64 53.56 0.03 5.67 13574.43 Turnover Profit before taxation 7 700.41 10.26 15 Proposed dividend - preference 14 13 Proposed dividend - equity Interim dividend preference 12 (496.61) 1.23 Interim dividend equity (555.04) 25.28 3.67 2286.23 0.23 Profit after taxation 10 11 36.40 59.96 12374.78 0.10 2.41 79155.87 0.35 Liabilities 3 (5979.36) 53.04 352.10 20706.02 0.09 applicable) Other equity/Reserves and surplus (as 2 7413.00 27.75 23.82 25.80 15088.51 Total equity and liabilities Investments 6 16522.15 432.89 0.20 31.23 102350.83 4 9.44 5 16522.15 432.89 0.20 31.23 102350.83 9.44 Total assets 1645.56 9203.26 11.53 ii. provide any guarantee, security or the like on behalf of the ultimate beneficiaries. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or i. The Group has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) (other than subsidiaries) with the understanding (whether recorded in writing or otherwise) that the Group shall: b. a. d) The Group has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities [1] Less than 1 Lakh. 19.61 _ [1] 3.16 0.64 ΝΑ 2.52 NA 17.15 [1] (Intermediaries) (other than subsidiaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary i. Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Group (Ultimate Beneficiaries) or 6 crore 4 Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures 1 Sr. No. Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] shall: Salient Features of the Financial Statements of Subsidiaries/Associate Companies/Joint Ventures 647 Figures for the previous year have been regrouped/re-classified to conform to the figures of the current year. NOTE [65] There are no amounts due and outstanding to be credited to Investor Education & Protection Fund as at March 31, 2024. NOTE [64] Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries. ii. LARSEN & TOUBRO 2 ΝΑ Loan given by subsidiary - [1] - [1] ΝΑ [1] - [1] ΝΑ 금금금금금 NA Accounts Receivables Accounts Receivables Accounts Receivables Shopforprop Realty Private Limited Total receivables (E) Sai Ashray Infratech Private Limited The Rubber Products Limited Profusion Engineering Private Limited Angelina Infratech Private Limited Accounts Receivables Pranavam Constructions Private Limited Accounts Receivables 금금금 [1] ΝΑ Grand total (A+B+C+D+E+F) Total loan given by subsidiary (F) Loan given by subsidiary Virtuoso Offshore IT And Management Services Private Limited 3 Loan given by subsidiary 2 0.04 Inmech Engineering Private Limited 0.06 0.02 0.01 0.01 NA 0.01 0.01 1 % of share holding 3 Hi-Tech Rock 7159.19 116.57 953.60 63.91 Liabilities 3 76.05 2953.50 5029.95 97.27 418.61 (2.78) applicable) Other equity/Reserves and surplus (as 2 2.05 19268.87 21.15 10.47 Total equity and liabilities Investments 6 88.57 8004.60 26457.66 222.84 1397.21 4 87.68 5 88.57 8004.60 26457.66 222.84 1397.21 87.68 Total assets 5 29.60 25.00 INR 31-Mar-24 Financial year ending on Currency Limited L&T Thales Technology Services Private Services Limited L&T Technology 31-Mar-24 INR LTIMindtree Limited Geostructure Private Limited Aggregates No. Particulars L&T Energy Hydrocarbon Products and L&T Sr. Engineering 9.00 Limited 31-Mar-24 INR INR 26.55 money pending allotment) Share capital (including share application 1 15-Feb-14 Date of Acquisition 14-Jun-12 31-Mar-24 23-Dec-96 25-Nov-20 01-Jan-08 NA financial year Exchange rate on the last day of Limited 31-Mar-24 INR 31-Mar-24 INR 26-Oct-94 5 100.00 (622.24) Accounts Payables Private Limited 155 Pinak Security & Management Private Limited Accounts Payables 156 Pioneer Tech Engineering Services Private Limited Accounts Payables 157 Posorbis Infrastucture Private Limited Accounts Payables 158 Priyanka Managment Solution (India) Accounts Payables Private Limited Petrichor Emerging Technologies India 154 Accounts Payables Perfect Office Systems Private Limited NA 0.03 0.03 ΝΑ _ [1] [1] 150 159 Paramshiv Infra Private Limited 151 Parim Infocomm Private Limited Accounts Payables 152 Peass Infra Private Limited Accounts Payables 153 Accounts Payables Probus Infratech Private Limited Accounts Payables 160 167 Real Construction Private Limited 168 Real Tech Engineering And Accounts Payables Accounts Payables Accounts Payables 3 3 3 3 333333 3 3 3 3 33333 NA Rattiputra Construction Private Limited - [1] ΝΑ - [1] [1] NA [1] 0.01 NA - [1] [1] 166 Accounts Payables Purma Plast Private Limited Accounts Payables 161 RBC Bearings Private Limited Accounts Payables 162 R Square E Service Private Limited Limited Accounts Payables Raas Infratech Private Limited Accounts Payables 164 Ramakrishna Power Tech Private Limited Accounts Payables 165 Rani Aishwarya Infracon Private 163 - [1] ΝΑ [1] Nstech International Private Limited Accounts Payables 143 Om Pranav Infrastructure Engineering Private Limited Accounts Payables 144 Om Sai Project Developers And 142 Accounts Payables ΝΑ - [1] - [1] ΝΑ - [1] - [1] ΝΑ 3 33333 } } } 0.04 Accounts Payables 141 Accounts Payables Nevil Consultancy Services Private Limited 136 0.03 outstanding as at March 31, 2023 Balance Balance outstanding as at March 31, 2024 0.03 Nirmal Sai Construction Private Limited Accounts Payables Normet India Private Limited ΝΑ 138 Nexgen Transcom Private Limited Accounts Payables 139 Nirmal Aircon Private Limited Accounts Payables 140 Accounts Payables [1] 0.04 0.03 Opti Tech Infra Projects India Opc Private Limited Accounts Payables 147 Orsang Infotech Private Limited 148 149 PAF Infrastructure Private Limited Paradisegarden Infraproject Private Limited 146 Accounts Payables Accounts Payables 금금금금금 NA 0.01 0.01 ΝΑ - [1] Accounts Payables ΝΑ Accounts Payables 145 0.04 ΝΑ - [1] - [1] ΝΑ 7.02 7.47 Onella Visions Private Limited NA NA 0.02 0.01 ΝΑ 0.05 0.05 Engineers Private Limited [1] ΝΑ - [1] NA Accounts Payables Accounts Payables Accounts Payables Accounts Payables Accounts Payables Accounts Payables Accounts Payables Accounts Payables 185 Samrat Fabrication And Construction Private Limited. Accounts Payables Sai Ashray Infratech Private Limited Sampada Infratech Private Limited 186 187 Sbh Shoring Systems Private Limited Accounts Payables Accounts Payables 188 Sce Global Steel And Facade Private Limited Accounts Payables 189 Savitri Infrastrcuture Private Limited Scotnix Solution Private Limited 184 Sahu Infrastructure Private Limited 175 176 Roshan Tradevision Private Limited Roy Management And Information Technology Private Limited Accounts Payables Accounts Payables Accounts Payables 177 Rpnr Concrete Solutions Private Limited 178 183 S K Modern Construction & 179 S SD N Infratech Private Limited 180 SV Infraproperties Private Limited 181 Safety And Environment Education For Development Private Limited 182 Engineering Private Limited Rockhard Infrastructure Private Limited Accounts Payables Set Sanayi Elektrik-Tesisat Taahhut Ve Ticaret India Private Limited L&T Infra Investment Partners Trustee Private Limited Advisory Private L&T Infra Investment Partners 12 11 10 9 L&T Financial 54.57 68.64 100.00 99.99 65.86 65.86 65.86 65.86 73.74 190 L&T Metro Rail (Hyderabad) Limited Accounts Payables 191 Shahid Engineers & Contractors Private Accounts Payables Accounts Payables Accounts Payables Limited 192 Consultants Limited Sharma Infrabuild Private Limited Sheoveena Construction Private Integrated Annual Report 2023-24 648 31-Mar-24 INR 31-Mar-24 INR 31-Mar-24 INR Limited 31-Mar-24 INR 193 81 174 Rk Build Solutions Private Limited RK Gautam Construction Private Limited ΝΑ - [1] [1] NA - [1] [1] ΝΑ - [1] 0.33 NA 0.01 0.01 NA 0.01 0.01 ΝΑ 0.33 - [1] - [1] - [1] [1] ΝΑ - [1] [1] ΝΑ 0.02 0.03 NA ΝΑ 0.50 - [1] ΝΑ - [1] _ [1] ΝΑ - [1] 0.50 Accounts Payables Accounts Payables Accounts Payables Accounts Payables - [1] - [1] Relationship with the struck off company 169 Realsharp Infraatech Services Private Limited Accounts Payables NA Balance outstanding as at March 31, 2024 0.01 Balance No. outstanding as at March 31, 2023 170 RGK Infracon Private Limited 171 Riccardo Readymixs And Infra Projects Private Limited 172 173 0.01 ΝΑ Nature of transaction Sr. - [1] Construction Private Limited Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Statutory Name of struck off company Financial Reports Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [63] c) Balance outstanding with struck off companies: (contd.) crore Report 4 Date of incorporation 2 Shravani Environment Technology Accounts Payables NA 0.03 3 Private Limited 195 Shree Kranti Infracon Private Limited Accounts Payables NA 0.23 0.26 196 Shreeji Home Infra Private Limited Accounts Payables 194 Limited 0.05 [1] Corporate Overview Integrated Annual Report 2023-24 [1] - [1] ΝΑ [1] - [1] NA NA 0.02 ΝΑ [1] - [1] NA 0.05 - [1] 0.02 0.03 0.03 197 201 Silk Route Infrastructure Private Limited Accounts Payables 3 33 33 33 3 3 3 3 3 3 333 3333 3 3 3 3 3 333 33 금금 ΝΑ 0.18 0.18 0.04 NA - [1] - [1] - [1] [1] - [1] NA - [1] - [1] Management Discussion and Analysis 0.04 Sikar Trading And Contracting Private Limited 198 199 Shreya Infra Venture Private Limited Shri Vedika Engineering Private Limited Sieat Consultancy Private Limited Accounts Payables NA - [1] [1] Accounts Payables Accounts Payables 0.09 0.02 Accounts Payables NA 0.04 0.04 200 ΝΑ Integrated Statutory Financial [1] ΝΑ - [1] - [1] ΝΑ - [1] - [1] - [1] NA 0.10 ΝΑ 금금금금 0.13 0.13 NA Accounts Payables 0.10 Accounts Payables ΝΑ [1] Vishwa Infratech & Projects Private 247 Limited Accounts Payables Accounts Payables Vishnuvedanga Infra-Tech Private 246 [1] Victra Constructions Private Limited Accounts Payables Victory Engineering India Private Limited 244 Vertex Realtech Infra Private Limited 243 Veekay Engineering India Private Limited 242 245 [1] Accounts Payables Accounts Payables Accounts Payables Accounts Payables Accounts Payables 241 ΝΑ Accounts Payables Unique Fabricators & Erectors Private 234 Relationship with the struck off company Nature of transaction Name of struck off company Balance outstanding as at March 31, 2024 0.03 Sr. No. Balance outstanding with struck off companies: (contd.) c) NOTE [63] Notes forming part of the Consolidated Financial Statements (contd.) Statements Reports Report crore Vams Construction Private Limited Vansh Infrasolution Private Limited Varad Infra Projects Private Limited Vardhman Trading Co. Private Limited Vee Gee Yem Engineers India Privite Limited Balance 0.03 240 239 238 237 - [1] ΝΑ Accounts Payables outstanding as at March 31, 2023 Vaigunthaa Infra Private Limited -[1] - [1] ΝΑ Accounts Payables Utech Infracon Private Limited 235 Limited 236 [1] ☐ [1] -[1] [1] Swift Equipments Private Limited Techcon Chemicals Private Limited Accounts Payables Accounts Payables 217 Techno Power Constructions Private Limited Accounts Payables 218 216 Tej Infrapromoters Private Limited 219 Telmax Construction Private Limited Accounts Payables 220 Terra Firma Promoters & Developers Private Limited Accounts Payables 333 33333 3 3 3 3 3 33 333 Accounts Payables ΝΑ 215 Swadeshi Buildtrade Private Limited 209 Sukita Security And Services Private Limited Accounts Payables 210 Sumera Builders & Developers Private Limited Accounts Payables 211 Accounts Payables Supreme Housekeeping Services Private Limited 212 213 Sv Engineering And Contracting Services Private Limited Swadesh Energy Private Limited Accounts Payables Accounts Payables 214 Accounts Payables Accounts Payables 0.03 NA NA 0.06 0.06 NA 0.03 0.03 ΝΑ - [1] - [1] ΝΑ - [1] - [1] NA 0.01 0.01 ΝΑ - [1] 0.10 - [1] - [1] 0.02 0.03 ΝΑ - [1] - [1] ΝΑ - [1] NA [1] 0.01 0.01 ΝΑ - [1] - [1] NA - [1] ΝΑ Accounts Payables Suhashini Infra Engineering Private Limited Accounts Payables - [1] [1] 0.02 NA 0.02 0.02 - [1] - [1] - [1] - [1] - [1] ΝΑ [1] [1] 0.02 0.02 ΝΑ 0.02 - [1] -[1] NA - [1] [1] NA 0.10 0.10 Accounts Payables - [1] ΝΑ - [1] 0.04 - [1] - [1] 0.04 - [1] - [1] ΝΑ 208 0.02 0.05 outstanding as at March 31, 2023 0.07 Private Limited 203 204 Sri Abs Lakshn Projects Private Limited Star Wire (India) Limited Accounts Payables Balance Accounts Payables Stellent Engineering Solutions Private Limited Accounts Payables 206 Sublime Contractors Private Limited Accounts Payables 207 Sudha Rehabs And Hospitality Private Limited 205 0.05 Balance outstanding as at March 31, 2024 0.07 Accounts Payables 643 LARSEN & TOUBRO Notes forming part of the Consolidated Financial Statements Notes forming part of the Consolidated Financial Statements (contd.) NOTE [63] c) Balance outstanding with struck off companies: (contd.) ΝΑ 644 Sr. Name of struck off company Nature of transaction No. Relationship with the struck off company 202 Soul And Mind Concrete System crore Limited 0.03 Vissa Engineering Private Limited - [1] - [1] - [1] - [1] - [1] [1] -[1] [1] -[1] [1] - [1] - [1] - [1] - [1] - [1] - [1] - [1] [1] - [1] Integrated Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 [1] _ [1] [1] - [1] [1] _ [1] [1] _ [1] [1] - [1] NA [1] [1] - [1] } } } } } } } } } } } } } } } Holding Parent Company's equity shares Holding Parent Company's equity shares 11 shares Company's equity Omni Market Research Services Private Holding Parent Limited Holding Parent Company's equity shares shares Holding Parent Company's equity Safna Consultancy Private Limited shares shares Company's equity 10 Jabac Consultancies Private Limited 9 Fairtrade Securities Limited 8 Holding Parent Company's equity Statutory 12 Holding Parent Company's equity Total equity shares held (B) Yogesh Investment Private Limited 16 VMS Consultants Private Limited 15 shares Company's equity Satvik Financial Services Limited Limited 14 Holding Parent Company's equity shares Siddha Papers Private Limited 13 shares Holding Parent Company's equity shares Upgrade Management Services Private Holding Parent Financial Report Reports - [1] ΝΑ - [1] - [1] NA - [1] - [1] [1] NA - [1] ΝΑ - [1] - [1] NA ΝΑ 금금금금금금금금 — [1] Dividend payable Dividend payable ΝΑ [1] 1 1.79 1.79 Total advance given to (D) 1.79 1.79 ΝΑ - [1] Advance given to 1 [1] [1] Total dividend payable (C) - [1] - [1] NA NCR Aggregate Solutions Private Limited Demuric Holdings Private Limited Satvik Financial Services Limited Alike Trading Private Limited NA Dividend payable Upgrade Management Services Private Limited 1 off company No. Relationship with the struck Balance outstanding as at March 31, 2024 _ [1] Nature of transaction Sr. crore Balance outstanding with struck off companies: (contd.) c) NOTE [63] Notes forming part of the Consolidated Financial Statements (contd.) Statements Name of struck off company 9 Balance outstanding as at March 31, 2023 2 8 Dividend payable Dividend payable Dividend payable Jabac Consultancies Private Limited 7 Kothari Intergroup Limited 6 Fairtrade Securities Limited [1] 5 Safna Consultancy Private Limited 248 Dividend payable Omni Market Research Services Private Limited 3 Dividend payable Amersey Brothers Private Limited Dividend payable 7 4 Holding Parent Company's equity shares 0.10 ΝΑ 0.50 0.50 ΝΑ 333 3333 3333 33 3333 33 3 3 3 3 3 3 Accounts Payables 0.10 Accounts Payables Accounts Payables Santosh Infrastructure Private Limited Shiv Gauri Developers Private Limited Transferet Relocation Services (India) Private Limited 266 265 264 Accounts Payables Sendur Industrial Services Private Limited ΝΑ 263 ΝΑ ΝΑ 0.19 ΝΑ - [1] - [1] NA 0.02 0.17 - [1] - [1] ΝΑ NA [1] - [1] ΝΑ -[1] - [1] - [1] 0.02 0.19 Accounts Payables 262 Accounts Payables Yashas Frp Manufacturing Private 253 Accounts Payables Accounts Payables Wipo Teleservices Private Limited 252 White Vibes Private Limited Limited 251 Walls Infra Solution Private Limited 250 Accounts Payables Vk Management Services Private Limited 249 Accounts Payables Avni Financial Advisors Private Limited Holding Parent Accounts Payables Shukla Devcon Private Limited 254 255 Accounts Payables IS Earth Movers Private Limited 261 Accounts Payables Genius Security Services Private Limited 260 Accounts Payables Ye Power Transmission Private Limited Accounts Payables Zaaharveer Projects Private Limited Zafcon Engineering Private Limited Zain Thermal Solutions Private Limited Zippy Facility Management & Services Private Limited 259 258 257 256 Accounts Payables Accounts Payables Z Rose Constructions & Interiors Private Limited Accounts Payables Accounts Payables ΝΑ ΝΑ 0.03 Kothari Intergroup Limited 1 Relationship with the struck off company No. Nature of transaction Name of struck off company Sr. ΝΑ crore c) NOTE [63] Notes forming part of the Consolidated Financial Statements (contd.) Notes forming part of the Consolidated Financial Statements LARSEN & TOUBRO 646 645 Balance outstanding with struck off companies: (contd.) 15.27 Balance outstanding as at March 31, 2024 _ [1] 2 0.03 shares Holding Parent Company's equity shares Holding Parent Company's equity shares Holding Parent Company's equity Balance outstanding as at March 31, 2023 [1] shares 6 Amersey Brothers Private Limited 5 Aloke Speciality Machines and Components Private Limited Alley Fisheries Private Limited 4 3 Holding Parent Company's equity 14.62 Alike Trading Private Limited - [1] NA 0.03 0.03 ΝΑ 0.02 0.02 ΝΑ - [1] - [1] - [1] - [1] ΝΑ 0.05 Total payables (A) NA 0.05 NA -[1] - [1] - [1] [1] ΝΑ ΝΑ 0.01 - [1] - [1] [1] ΝΑ - [1] - [1] 0.05 0.10 ΝΑ [1] ΝΑ - [1] NA - [1] ΝΑ Share capital (including share application money pending allotment) Date of incorporation 28-May-19 Date of Acquisition 83.41 24-Feb-16 SAR 22.19 19-Jun-23 1 83.41 25-Sep-01 83.41 31-Mar-24 31-Dec-23 31-Mar-24 USD USD USD Currency 31-Mar-24 Company Hydrocarbon Arabia Limited L&T Global Holdings Limited 4.17 Larsen & Toubro International FZE Exchange rate on the last day of financial year 142.62 662.15 1.11 LLC 3.76 662.15 5045.72 29.99 Total assets 5 3.76 5045.72 29.99 Total equity and liabilities 66.72 4 0.04 4003.04 22.01 Liabilities 3 (0.43) 595.39 900.06 3.81 Other equity/Reserves and surplus (as applicable) 2 3.08 Financial year ending on 20.54 L&T Valves USA 13 Proposed dividend - equity Interim dividend preference 12 Interim dividend equity 11 (6.29) (1.42) 7.39 6 1.06 (1.22) 5.07 0.06 (7.51) (1.42) 7.39 25.61 1.12 7.17 1.66 246.10 596.22 2.84 14 Proposed dividend - preference No. Particulars 15 73.74 Sr. 106 105 104 107 crore Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Sr. No. Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] (contd.) Financial Statements Reports Report Discussion and Analysis Statutory Integrated Management Corporate Overview Integrated Annual Report 2023-24 656 100.00 73.74 68.64 68.64 % of share holding Investments B) 661.17 a) d) Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] (contd.) Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Salient Features of the Financial Statements of Subsidiaries/Associate Companies/Joint Ventures LARSEN & TOUBRO 657 (iii) Cuelogic Technologies Private Limited (ii) Powerup Cloud Technologies Private Limited Lymbyc Solutions Private Limited (i) Following entities merged with LTIMindtree Limited w.e.f. April 1, 2023- (iii) L&T Infra Credit Limited (ii) L&T Mutual Fund Trustee Limited Following entities merged with L&T Finance Limited (formerly known as L&T Finance Holdings Limited) w.e.f. April 1, 2023- (i) L&T Finance Limited b) L&T Innovation Campus (Chennai) Limited -Merged with L&T Seawoods Limited on April 1, 2023. a) Merged: Names of subsidiaries which have been merged/sold/dissolved/struck-off: formerly known as Lymbyc Solutions Inc. [h] formerly known as Nielsen&Partner Company Limited (i) Following entities merged with L&T Technology Services Limited w.e.f. April 1, 2022- C) (i) Graphene Semiconductor Services Private Limited (iii) Esencia Technologies India Private Limited Integrated Annual Report 2023-24 658 a) L&T Technology Services Poland spółka z ograniczoną odpowiedzialnością Names of subsidiaries which are yet to commence operations: a) L&T Sapura Offshore Private Limited - Reclassified as subsidiary w.e.f December 27, 2023 and post-reclassification the company is renamed as L&T Offshore Private Limited E) D) Name of the Joint Venture which has been converted to subsidiary during the year: L&T Hydrocarbon Caspian LLC f) Cuelogic Technologies Inc. Mindtree Software (Shanghai) Co. Limited PT Larsen & Toubro Hydrocarbon Engineering Indonesia c) Arunachal Hydropower Limited b) Kesun Iron and Steel Company Private Limited a) (iii) Liquidated/Dissolved/struck-off/ceased: d) Interise Investment Managers Limited (formerly known as LT IDPL INDVIT Services Limited) Think Tower Developers Private Limited b) Mudit Cement Private Limited L&T Infrastructure Engineering Limited Orchestra Technology, Inc. - Merged with L&T Technology Services LLC w.e.f February 1, 2024 (ii) Seastar Labs Private Limited 1707.38 [i] [g] 12 Interim dividend equity 11 (1.61) 183.61 735.36 0.30 Profit after taxation 10 1.99 0.08 Provision for taxation. 9 (1.61) 183.61 737.35 0.38 Profit before taxation 8 6942.58 53.75 Turnover 7 Interim dividend preference formerly known as Nielsen+Partner Unternehmensberater AG 13 14 formerly known as Syncordis PSF S.A. [f] formerly known as Syncordis S.A. [e] formerly known as L&T Information Technology Spain SL. [d] formerly known as L&T Information Technology Services (Shanghai) Co., Ltd. [c] formerly known as LH Residential Housing Limited [b] formerly known as L&T Finance Holdings Limited [a] Name changed: For entities having functional currency other than INR, all parameters have been converted using exchange rate on the last day of financial year. A) Notes: 60.00 100.00 100.00 100.00 % of share holding 15 Proposed dividend - preference Proposed dividend - equity (ii) Sold: Profit after taxation 0.06 1628.53 Total equity and liabilities 4 0.38 82.89 3.52 6244.45 1.88 1170.32 Liabilities 3 (4.40) 14.52 0.23 706.24 0.15 6972.92 7.03 98.73 1160.32 Turnover 7 486.88 0.23 Investments 6 (2.19) 11.76 7.03 6972.92 0.15 1628.53 Total assets 5 11.76 98.73 426.72 applicable) Other equity/Reserves and surplus (as Exchange rate on the last day of IDR 31-Mar-24 31-Mar-24 MYR ZAR PT Larsen and Toubro Larsen & Toubro (East Asia) Sdn. Bhd. financial year (Proprietary) Limited 31-Mar-24 QAR OMR Currency 31-Dec-23 31-Dec-23 Financial year ending on Larsen & Toubro T&D SA 31-Dec-23 SAR 10011.99 216.14 21-Jan-94 2 15.78 1.32 3.28 22.23 0.46 31.49 Date of incorporation money pending allotment) 1 Date of Acquisition 0.01 17-Dec-21 17.62 13-Jun-96 4.37 06-Sep-10 22.19 22-Jun-99 22.83 31-Mar-04 Share capital (including share application 0.40 297.91 0.33 Particulars No. Sr. 75 74 Larsen & Toubro Kuwait 73 72 Larsen & Toubro Heavy Engineering LLC 71 Sr. No. crore Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] (contd.) Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Salient Features of the Financial Statements of Subsidiaries/Associate Companies/Joint Ventures LARSEN & TOUBRO 653 70 100.00 L&T Modular Fabrication Yard LLC L&T Hydrocarbon Saudi Company 216.14 financial year Exchange rate on the last day of 31-Dec-23 OMR SAR 31-Dec-23 31-Dec-23 SAR Larsen Toubro Arabia LLC 31-Dec-23 OMR 31-Dec-23 Financial year ending on Currency Electromech LLC Contracting Company WLL 31-Dec-23 KWD General Larsen & Toubro Construction OMR Larsen & Toubro Saudi Arabia LLC 118 72.50 (93.16) Profit after taxation 10 0.09 50.27 8.57 Provision for taxation (0.05) 9 10.95 0.35 246.24 (0.05) (84.59) Profit before taxation 8 (4.40) 30.00 195.97 10.95 100.00 81 49.00 65.00 % of share holding 15 Proposed dividend - preference 0.26 14 13 Interim dividend preference 12 - Interim dividend equity 11 (4.40) Proposed dividend - equity Date of incorporation Qatar LLC Larsen & Toubro Watrak Infrastructure Private Limited 31-Mar-24 INR INR L&T Chennai- Tada Tollway Limited 31-Mar-24 31-Mar-24 INR Currency Financial year ending on Limited L&T Rajkot- Vadinar Tollway No. Particulars Sr. 61 60 59 Sr. No. 63 62 Rewin LTH Milcom Infrastructure Limited 31-Mar-24 Private Limited 42.00 110.00 money pending allotment) Share capital (including share application 1 Date of Acquisition 17-Aug-15 crore 21-Mar-23 24-Mar-08 20-May-99 Date of incorporation Exchange rate on the last day of financial year INR INR 31-Mar-24 18-Nov-21 Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] (contd.) Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Financial Statements 13 Interim dividend preference 12 - Interim dividend equity 11 (1.91) Proposed dividend - equity 87.50 (297.69) (116.05) Profit after taxation 10 18.49 Provision for taxation 9 82.86 22.39 14 15 Reports Report Discussion and Analysis Statutory Integrated Management Corporate Overview Proposed dividend - preference Integrated Annual Report 2023-24 37.74 51.00 8 51.00 51.00 51.00 % of share holding 652 100.00 0.20 2 Proposed dividend - equity 13 Interim dividend preference 12 Interim dividend equity 11 3.92 14 0.29 (43.55) Profit after taxation 10 1.52 0.33 Provision for taxation 9 (0.18) 5.44 Proposed dividend - preference % of share holding Larsen & Toubro 69 68 67 66 65 64 15 56.67 51.00 51.00 51.00 Particulars No. Sr. Sr. No. 51.00 (Oman) LLC 0.62 (43.55) 586.03 Total equity and liabilities 4 0.01 1.56 5.59 2.59 3.87 707.84 3 (0.20) 3.92 74.32 (40.72) (231.81) Other equity/Reserves and surplus (as applicable) Liabilities (0.18) 102.30 0.01 Profit before taxation 8 156.85 Turnover 7 70.00 24.01 105.48 Investments 0.01 105.48 102.30 3.87 586.03 Total assets 5 6 07-Apr-08 216.14 05-Jul-06 22.19 01-Jul-12 14 13 Proposed dividend - equity - Interim dividend preference 12 Interim dividend equity 11 0.45 8.27 (0.33) 26.85 126.81 2.72 10 Profit after taxation 4.35 Proposed dividend - preference 15 % of share holding 68.64 Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Financial Statements Reports Report Discussion and Analysis Statutory Integrated 3.04 Management Integrated Annual Report 2023-24 654 68.64 47.77 68.64 68.64 68.64 Corporate Overview 9.96 46.16 (0.60) 6 504.70 39.40 9.27 148.70 614.14 17.76 Investments Total assets 504.70 39.40 9.27 148.70 614.14 17.76 Total equity and liabilities 5 Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] (contd.) 422.60 Turnover Provision for taxation 9 4.80 11.31 (0.33) 36.81 172.97 7 2.12 8 196.77 58.92 6.38 735.00 442.90 45.95 Profit before taxation crore Sr. No. Sr. 6.61 Liabilities 3 (62.86) (8.75) 4.01 13.41 32.03 14.14 applicable) Other equity/Reserves and surplus (as 2 0.01 0.14 0.51 0.00 1.67 0.02 10.87 31.03 (62.85) 22.42 322.73 24.28 46.19 8.73 Total assets 318.21 5 22.42 322.73 24.28 46.19 8.73 Total equity and liabilities 4 (62.85) 4 0.45 Share capital (including share application MXN NOK Syncordis LTIMindtree 87 86 85 S.A. [e] 31-Dec-23 EURO 84 LTIMindtree LTIMindtree S. Norge AS DE R.L. DE C.V. 31-Mar-24 31-Dec-23 31-Mar-24 Financial year ending on Currency LTIMindtree Spain S.L. [d] 83 82 Particulars No. EURO money pending allotment) France SARL Syncordis Limited 31-Dec-23 1 15-Dec-17 15-Dec-17 15-Dec-17 Date of Acquisition 105.72 91.95 31-Dec-23 EURO 91.95 7.69 20-Nov-18 01-Feb-16 Date of incorporation 89.88 financial year Exchange rate on the last day of GBP 4.90 01-Mar-17 100.90 10.14 2.82 2750.39 1385.52 523.73 1112.68 Profit after taxation Provision for taxation 8 Profit before taxation 6357.17 Turnover 10 9 38.40 10.56 2900.25 2739.43 0.13 Investments 50.76 60.77 36.85 - Interim dividend equity 11 71.15 (0.29) 130.53 103.66 (17.22) 27.94 29.21 24.29 8.91 71.15 (0.29) 159.74 127.95 (17.22) 12 Total assets 10.56 Other equity/Reserves and surplus (as 2 6.48 54.14 2.22 22.19 applicable) applicable) 122.44 Share capital (including share application 1 01-Jan-05 Date of Acquisition 216.14 270.71 29-Nov-06 22.19 08-Jul-07 money pending allotment) 38.40 (277.17) (92.49) 2900.25 2739.43 0.13 50.76 Total equity and liabilities 41.15 1.15 182.95 3340.23 (182.88) 205.49 Liabilities 34569 (9.23) (44.73) (442.20) 2809.73 (1.91) Interim dividend preference 14 1 25-Jul-12 25-Apr-00 01-Jan-11 Date of Acquisition 89.88 14-Jun-99 4.37 Share capital (including share application 83.41 21-Jul-09 Date of incorporation 61.27 61.27 11.71 financial year Exchange rate on the last day of 31-Mar-24 EURO 28-Jun-13 31-Mar-24 ZAR money pending allotment) 153.17 50.30 61.88 15.44 Liabilities 3 402.90 29.11 1.26 6.45 399.09 1.06 applicable) Other equity/Reserves and surplus (as 2 0.90 0.16 98.40 13 Proposed dividend - equity 31-Mar-24 USD 31-Mar-24 CAD 81 80 79 78 77 76 Sr. No. LTIMindtree 70.00 100.00 75.00 70.00 70.00 % of share holding 15 Proposed dividend - preference 49.00 31-Mar-24 CAD Sr. Particulars CNY Currency 31-Dec-23 Financial year ending on Co., Ltd [c] Limited Technologies Inc. No. Services (Shanghai) LTIMindtree LLC LTIMindtree Canada Limited Financial Services Technology LTIMindtree LTIMindtree Information South Africa (PTY) LTIMindtree GmbH 6 105.99 (297.69) 17-Feb-24 29-Nov-23 Date of incorporation financial year Exchange rate on the last day of 31-Mar-24 INR 31-Mar-24 INR L&T-Sargent & Lundy Limited L&T Howden Private Limited 42 41 40 L&T - MHI Power Turbine Generators Private Limited 31-Mar-24 INR INR 31-Mar-24 31-Mar-24 INR 09-Oct-06 27-Dec-06 17-Jun-10 05-May-95 134.36 (390.63) 1286.35 (23.32) applicable) 2 Other equity/Reserves and surplus (as 5.57 INR 30.00 234.10 0.05 9.55 money pending allotment) Share capital (including share application 1 Date of Acquisition 710.60 Currency 31-Mar-24 Financial year ending on Integrated Management Corporate Overview Integrated Annual Report 2023-24 650 100.00 100.00 Statutory 100.00 (10.41) (29.92) (0.01) 6g 811 100.00 100.00 100.00 68.94 Discussion and Analysis Reports Limited L&T - MHI Power Boilers Private Limited LH Uttarayan Premium Realty Private Limited Technologies No. Particulars Semiconductor Sr. Report L&T 38 37 Sr. No. Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] (contd.) crore Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Financial Statements 39 345 Liabilities 27.69 27.26 (21.30) (30.91) 2.83 10.34 (8.34) 21.06 18.23 37.60 (39.25) 104.60 272.30 275.78 1182.72 58.59 128.39 (21.30) 80.87 (24.00) (8.90) L&T Special Steels and Heavy Forgings Private No. Particulars Sr. 48 47 46 45 (5.01) 44 Sr. No. 50.00 50.10 51.00 51.00 100.00 100.00 43 % of share holding % of share holding 14 2482.13 0.05 13.92 Investments Total assets 108.11 317.24 1003.22 1003.22 0.05 13.92 Total equity and liabilities 33.60 152.88 683.25 961.68 2482.13 15 317.24 Turnover 13 Proposed dividend - equity Interim dividend preference 12 Interim dividend equity 11 (23.32) Profit after taxation 108.11 10 9 (23.32) 8 7 6 Proposed dividend - preference Profit before taxation Provision for taxation Raykal 15 13 Proposed dividend - equity % of share holding 15 Proposed dividend - preference 14 13 Proposed dividend - equity Interim dividend preference 12 Interim dividend equity 11 (0.01) (0.01) 0.88 1.65 Profit after taxation 10 Sr. No. Sr. No. Particulars Financial year ending on 36 35 34 33 Business Park (Powai) Private Limited 31-Mar-24 INR 31-Mar-24 INR 31-Mar-24 INR 32 Bangalore (Bangalore) Fortune Techpark Private Limited 0.34 Private Limited 31 100.00 100.00 100.00 100.00 100.00 100.00 Avenue Techpark 0.55 Provision for taxation 9 40.46 Total assets 0.05 0.05 0.05 4.23 40.46 4.23 Total equity and liabilities 0.01 0.01 2.40 Liabilities 345 (0.01) (0.01) 0.01 Corporate Park (Powai) Private Limited 31-Mar-24 INR 0.05 0.05 (0.01) (0.01) 1.22 2.20 Profit before taxation 8 1.10 0.05 27.57 Turnover Investments 7 6 0.05 0.05 GGET 0.00 LH Residential L&T Electrolysers Limited Housing Private 7 Investments 6 169.03 49.54 2.05 22.97 Turnover 0.03 Total assets 5 169.03 49.54 2.05 22.97 0.03 0.03 0.03 8 (0.02) Interim dividend preference 12 Interim dividend equity 11 (0.16) (0.02) (0.02) Profit before taxation Profit after taxation Provision for taxation 9 (10.41) (29.92) (0.01) (0.16) (0.02) 10 14 Proposed dividend - preference Total equity and liabilities 179.34 1 Date of Acquisition 31-Jul-23 27-Jun-23 01-May-23 20-Apr-23 01-May-23 Share capital (including share application 10-Apr-23 financial year Exchange rate on the last day of Currency INR INR Limited[b] 31-Mar-24 31-Mar-24 Date of incorporation 4 money pending allotment) 0.05 28.40 21.08 Liabilities 3 (10.41) (29.91) (0.16) 0.05 (0.02) applicable) Other equity/Reserves and surplus (as 2 0.10 51.05 2.05 2.05 (0.02) L&T L&T MBDA Missile Systems Limited L&T Offshore Private Limited [D] 0.68 (87.10) 62.18 (3.50) 4.07 52.28 280.91 63.55 15.70 108.27 51.71 1.91 1826.61 575.26 65.55 16.22 52.28 3.39 (3.50) Currency Financial year ending on No. Particulars Sr. No. Sr. % of share holding 15 174.88 14 Proposed dividend - preference Interim dividend preference 12 - Interim dividend equity 11 (87.10) 45.96 13 Proposed dividend - equity 70.50 1826.61 575.26 Provision for taxation. 9 Profit before taxation 8 Turnover 7 Investments 10 6 5 Total equity and liabilities 4 Liabilities applicable) 3 Other equity/Reserves and surplus (as Total assets Exchange rate on the last day of financial year Profit after taxation 43.50 65.55 174.88 70.50 1802.34 485.57 18.31 127.08 30.05 321.34 48.29 (9.92) 4.30 (280.89) 149.00 41.40 57.16 (124.73) Date of incorporation 51.00 51.00 5 0.69 1015.42 2140.30 1620.43 1330.34 Total equity and liabilities Total assets 4 796.16 1730.53 2526.85 2099.86 Liabilities 3 (170.24) 1.83 (70.77) 1330.34 2140.30 (116.05) Profit before taxation 8 0.01 283.03 188.58 242.26 1620.43 261.47 7 0.36 161.20 Investments 6 0.69 1015.42 Turnover 2 217.17 (850.06) INR 31-Mar-24 Limited PNG Tollway 58 57 56 Kudgi L&T Sambalpur- Transmission Rourkela Tollway Limited Limited 31-Mar-24 31-Mar-24 INR 31-Mar-24 L&T Deccan Tollways Limited L&T Samakhiali Gandhidham Tollway Limited 55 54 51.00 51.00 51.00 31-Mar-24 INR (1191.76) INR - applicable) Other equity/Reserves and surplus (as 2 169.10 290.03 192.60 285.34 INR 80.54 1 30-Aug-13 Date of Acquisition 16-Feb-09 18-Oct-13 20-Dec-11 05-Feb-10 Share capital (including share application money pending allotment) money pending allotment) Share capital (including share application 1 0.01 556.78 5.91 187.34 648.34 Total equity and liabilities 4 3208.76 48.23 384.90 5.91 3.14 3289.87 Liabilities 3 2531.01 0.88 (0.92) 5 648.34 Profit before taxation 8 119.25 162.50 5.37 503.99 Turnover Total assets 7 Investments 6 3208.76 0.01 556.78 5.91 187.34 2166.72 (69.09) 13.03 183.20 Date of incorporation financial year Exchange rate on the last day of Currency Financial year ending on Projects Limited 31-Mar-24 INR Limited 31-Mar-24 INR 01-Jul-09 INR 31-Mar-24 INR INR 31-Mar-24 Limited 31-Mar-24 INR Infrastructure Development Aluminium Company Private L&T Sapura Shipping Private Limited 31-Mar-24 (0.01) 05-Apr-17 02-Sep-10 (3208.13) applicable) Other equity/Reserves and surplus (as 2 629.52 0.05 158.85 02-Sep-10 0.01 566.60 money pending allotment) Share capital (including share application 1 Date of Acquisition 26-Feb-01 23-Feb-99 1.00 82.86 7.08 (40.68) Infrastructure Maliya Tollway Transportation Ahmedabad- L&T Interstate Road Corridor Limited Vadodara Bharuch Tollway Limited Panipat Elevated Corridor Limited Limited No. Particulars L&T 52 51 50 49 53 crore Sr. Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Limited Currency Date of Acquisition 09-Sep-08 24-Sep-97 02-Feb-06 23-Dec-05 21-Jul-05 Date of incorporation Financial year ending on Exchange rate on the last day of financial year INR INR 31-Mar-24 31-Mar-24 31-Mar-24 31-Mar-24 INR 31-Mar-24 INR INR (0.48) Sr. No. Salient Features of the Financial Statements of Subsidiaries/Associate Companies/Joint Ventures - Interim dividend equity 11 (0.48) 5.93 (69.11) Profit after taxation 12 10 0.05 1.15 0.02 Provision for taxation 9 37.49 (0.01) 11.60 Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] (contd.) Interim dividend preference 14 Proposed dividend - preference LARSEN & TOUBRO 651 51.00 75.50 81 60.00 100.00 13 Proposed dividend - equity 25.89 (40.73) ☎g 8 51.00 74.00 % of share holding 15 (0.01) 4.17 Investments Turnover 0.22 52.79 35.09 (0.03) 330.70 Profit after taxation 10 0.07 18.03 11.50 48.75 Provision for taxation 9 0.29 70.82 46.59 (0.03) 11 Interim dividend equity (168.98) (6.00) 100.00 99.90 100.00 100.00 (18.00) 811 100.00 100.00 379.45 % of share holding (8.78) Proposed dividend - preference 14 (112.32) 13 Proposed dividend - equity (10.38) Interim dividend preference 12 15 Profit before taxation 8 0.77 366.83 0.03 3554.45 Total equity and liabilities 4 25.08 1.06 629.08 1163.75 122.74 954.27 Liabilities 3 1.39 516.67 44.95 (0.03) 1196.21 0.01 100.00 1.11 5 10 1064.00 489.61 1639.43 Turnover 7 51.05 24.75 77.52 1108.28 6 77.52 1.11 1163.75 366.83 0.03 3554.45 Total assets Investments applicable) 100.00 100.00 0.05 0.05 45.60 Share capital (including share application money pending allotment) 1 Date of Acquisition 12-Apr-23 13-Apr-23 17-Apr-23 30-Apr-23 06-Apr-00 06-Nov-09 Date of incorporation financial year Exchange rate on the last day of Limited 31-Mar-24 INR 31-Mar-24 INR 0.05 0.05 0.05 2 Other equity/Reserves and surplus (as 252.93 299.10 5.58 19.53 6.87 252.93 299.10 5.58 31-Mar-24 INR 19.53 Investments 7 Turnover 8 Profit before taxation 9 Provision for taxation 7 6 Bangalore Spectrum Techpark Private Galaxy Techpark Private Limited Bangalore Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] (contd.) Salient Features of the Financial Statements of Subsidiaries/Associate Companies/Joint Ventures LARSEN & TOUBRO 649 INR Limited 31-Mar-24 Limited 31-Mar-24 INR INR crore Green tech 24 23 Bhilai Power Supply Company L&T Valves Limited 31-Mar-24 Equipment Limited 31-Mar-24 INR 22 21 20 Prime Techpark L&T Construction (Chennai) Private 100.00 L&T Energy 100.00 Sr. No. 26 Chennai Nova Techpark Private Limited Millennium Techpark (Chennai) Private Limited 31-Mar-24 INR INR INR Currency 31-Mar-24 31-Mar-24 Financial year ending on 25 Company Limited L&T Capital L&T Aviation Services Private No. Particulars Sr. 30 29 28 27 Limited 6.87 Other equity/Reserves and surplus (as 51.05 0.01 0.01 2325.00 2289.66 200.55 money pending allotment) Share capital (including share application 1 Date of Acquisition 29-Jul-97 25-Jan-22 14-Aug-08 09-Apr-07 12-Sep-07 22-Jun-10 Date of incorporation financial year 167.16 2 Other equity/Reserves and surplus (as applicable) 2693.76 0.05 Total equity and liabilities 4 1026.62 93.02 0.05 4986.79 Exchange rate on the last day of 3.78 Liabilities 3 923.33 297.52 (0.05) 2459.22 400.32 (202.33) 1.83 Limited Developers INR 17 16 15 Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] (contd.) Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures L&T Power L&T Himachal Sr. L&T Parel Project 13 Financial Statements Reports Report Discussion and Analysis Statutory Integrated Management Corporate Overview Sr. No. 9771.01 crore 14 31-Mar-24 31-Mar-24 INR Private Limited 31-Mar-24 INR INR 31-Mar-24 L&T Realty Chennai Vision Developers Private Limited 18 Limited 31-Mar-24 INR Currency 31-Mar-24 Financial year ending on Limited Nabha Power Limited Development Hydropower No. Particulars INR 2 390.55 5 Limited L&T Seawoods 19 100.00 Limited 31-Mar-24 INR No. Particulars Sr. Sr. No. % of share holding 15 (15.56) Proposed dividend - preference 14 (66.86) 13 Proposed dividend - equity (33.43) Interim dividend preference Financial year ending on 31-Mar-24 Currency INR 0.05 18.00 199.14 0.05 1403.98 money pending allotment) Share capital (including share application 1 12 Date of Acquisition 11-Jul-95 23-Nov-61 18-Dec-18 24-Mar-23 13-Mar-08 Date of incorporation financial year Exchange rate on the last day of 09-Mar-06 (62.24) (5.00) - 8 839.41 175.35 4313.17 Turnover 7 87.75 22.16 Profit before taxation 539.16 Investments 6 2117.11 390.55 9771.01 2693.76 0.05 Total assets 2688.00 2117.11 (0.24) 399.53 Interim dividend equity 11 238.68 34.64 (0.01) 399.53 (2.39) (0.24) (2.39) Profit after taxation 49.03 11.92 0.00 Provision for taxation 9 287.71 46.56 (0.01) 10 16.72 (7.54) 255.48 0.37 216.94 7.86 0.77 money pending allotment) Share capital (including share application 1 15-Oct-18 15-Oct-18 15-Oct-18 29-Aug-19 Date of Acquisition 26-Jun-14 Date of incorporation 2.72 TWD Limited 31-Dec-23 0.18 1.36 2 Other equity/Reserves and surplus (as applicable) 0.10 0.41 623.24 2.87 Total equity and liabilities 4 0.55 0.02 98 Graphene Solutions SDN. Solutions Taiwan BHD. 31-Mar-24 MYR 17.62 0.08 3.36 Liabilities 3 (1.20) (0.10) (0.04) 183.13 (1.26) 223.17 0.71 L&T Technology Services Pte. Ltd. 31-Mar-24 SGD 61.74 83.41 68.64 68.64 68.64 68.64 68.64 % of share holding 15 Proposed dividend - preference 14 Proposed dividend - equity 13 Interim dividend preference 12 Interim dividend - equity 11 (3.76) 0.50 68.64 655 LARSEN & TOUBRO Salient Features of the Financial Statements of Subsidiaries/Associate Companies/Joint Ventures Exchange rate on the last day of financial year 31-Mar-24 USD USD Currency 31-Mar-24 Financial year ending on LTIMindtree L&T Technology Services LLC. USA Inc 83.41 No. Particulars 96 95 94 Sr. Sr. No. crore Part A: "Subsidiaries" [as per Section 2(87) of the Companies Act, 2013] (contd.) Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures 97 Graphene 5 Total assets 2.87 06-Aug-19 GBP 105.03 17-Aug-20 AED 22.71 25-Nov-20 CAD 61.27 20-Aug-19 SAR 22.24 25-Sep-01 Date of Acquisition 1 Share capital (including share application money pending allotment) 2 Other equity/Reserves and surplus (as applicable) 73.74 73.74 73.74 68.64 Particulars LLC 31-Mar-24 31-Mar-24 31-Mar-24 31-Mar-24 100 101 102 103 L&T Technology Services (Shanghai) Co. L&T Valves LTIMindtree L&T Technology No. LTIMindtree UK Limited Middle East FZ-LLC Services (Canada) Ltd Manufacturing Financial year ending on Currency Exchange rate on the last day of financial year Date of incorporation Ltd. 31-Dec-23 CNY 11.71 Arabia Sr. Sr. No. % of share holding (0.04) (0.11) 46.70 0.05 Profit before taxation 8 0.01 1197.27 (0.05) 2.82 7 0.04 Investments 6 0.71 0.10 0.41 623.24 Turnover (38.17) 9 0.03 15 Proposed dividend - preference 14 13 Proposed dividend - equity Interim dividend preference 12 Interim dividend equity 11 Provision for taxation (0.03) (0.11) 34.80 3 0.02 Profit after taxation 10 (0.02) 11.90 (0.04) (25.40) (1.62) 2.43 68.64 68.64 68.64 68.64 68.64 % of share holding 15 Proposed dividend - preference 14 Proposed dividend - equity 13 Interim dividend preference 12 Interim dividend equity 11 (23.52) (4.17) 68.64 Sr. No. 88 89 Nielsen&Partner Nielsen+Partner Pte Ltd 31-Dec-23 SGD LTI Mindtree LTIMindtree Switzerland AG [9] 31-Dec-23 CHF GmbH 31-Jan-24 EURO EURO Currency 31-Dec-23 3.12 Financial year ending on LTI Mindtree PSF S.A. [f] Particulars No. Sr. 93 92 91 90 Nielsen+Partner Unternehmensberater 4.04 2.41 0.86 18.18 Liabilities 4 Total equity and liabilities 5 Total assets 3.85 0.01 77.06 4.22 21.18 2.84 52.33 39.40 (2.32) (18.37) 0.18 200.59 0.04 (Thailand) Limited [h] 31-Dec-23 91.81 32.70 Profit after taxation 10 (9.64) 1.30 1.49 1.33 (0.38) Provision for taxation 276.84 9 (4.17) 4.42 5.53 3.74 0.48 Profit before taxation 8 41.30 (33.16) 99 THB Exchange rate on the last day of Turnover 7 Investments 6 1.59 7.28 32.69 61.04 18.22 165.89 Total assets 5 1.59 7.28 32.69 61.04 18.22 176.75 8.65 44.82 25.33 Profit after taxation 10 0.04 0.01 0.00 0.17 Provision for taxation 9 165.89 (3.76) (38.17) (25.39) (1.62) 2.60 Profit before taxation 8 2.14 11.48 0.54 Total equity and liabilities 4 13.97 money pending allotment) Share capital (including share application 1 01-Mar-19 01-Mar-19 01-Mar-19 01-Mar-19 01-Mar-19 3.68 15-Dec-17 Date of incorporation 56.62 2.42 63.00 99.02 90.00 91.95 financial year Date of Acquisition Pty Ltd 31-Dec-23 AUD 1.85 0.63 9.60 70.90 80.07 10.53 161.00 Liabilities 3 (12.38) 0.99 (2.56) (20.02) 5.84 1.21 applicable) Other equity/Reserves and surplus (as 2 0.00 0.24 (38.84) 73.74 ->- Every year, L&T and its people receive a number of national and international awards that acknowledge its varied accomplishments. Presented by the media, industry associations, independent bodies and academia, they honour the Company's contribution in various spheres of business, technology, financial performance, growth and environmental protection. 17.12% 50.00% 39.28% 42.85% 50.00% 49.00% 33.33% 14.25% 30,00,000 Refer Note 3 81,77,887 1,750 24,000 21,003 200 Extent of holding % (Effective) 5,000 50.00% Description of how there is significant 7.40 (4.29) 3.12 10.66 as per latest audited balance sheet (Crore) Net worth attributable to shareholding 4 6 5 Refer Note 3 Refer Note 4 Reason why the associate/joint venture Refer Note 1 influence is not consolidated 4,40,58,020 Total No of shares (4.10) 0.22 4.42 0.18 4.96 9.83 joint venture (Crore) 0.39 Amount of investment in associates/ 875 22,000 9,000 100 2,450 98,30,000 21,26,000 10,00,000 7,35,000 1.00 Total share capital (Crore) 44.06 (5.72) (0.67) 0.70 17.06 (9.05) (3.75) 30.76 Reserves closing 3.00 12.05 0.78 0.24 0.21 0.46 10.12 0.37 Number 0.05 Profit/(Loss) for the year (Crore) SHAREHOLDER'S FEEDBACK FORM B. M. No. F3939 Company Secretary & Compliance Officer Sivaram Nair A For LARSEN & TOUBRO LIMITED Name and address of the shareholder Yours faithfully, We are privileged to have you as our shareholder. It has been our constant endeavour to improve the services to our Investors and in this pursuit, we are once again sending you this Feedback Form, which is a self addressed prepaid Inland letter. We request you to kindly spare some time and return the same to us duly completed. We look forward to your feedback/valuable suggestions. Date: June 11, 2024 Dear Shareholder, Tel. No.: (022) 6752 5656, Fax No.: (022) 6752 5858 Email: IGRC@Larsentoubro.com, Website: www.larsentoubro.com Regd. Office L&T House, Ballard Estate, Mumbai 400 001. CIN L99999MH1946PLC004768 Thanking you, LARSEN & TOUBRO LIMITED Phone No: (with STD code) Folio No./DP ID & Client ID No No For details of recent awards, please visit www.Larsentoubro.com No Yes (iii) Both E-mail ID: Yes Yes Short Term (i) Do you perceive the Company as creating shareholder value in the: A. Shareholders Satisfaction Survey Questionnaire (please the appropriate box) (ii) Long Term or -Fold here : Fold here то 3. The associate company is under liquidation process and investment is fully provided in the accounts. 2. The Incorporated joint venture is not required to be audited as per regulatory laws in Iran. Hence the management certified accounts have been considered for consolidation. 1. Significant influence is demonstrated by holding 20% or more of the total voting power, or control of or participation in business decisions under an agreement of the investee. Notes: [1] The company is associate of a subsidiary company under Companies Act, 2013. Not considered in consolidation 4. No Significant influence as per Ind AS 28. (4.10) (0.24) 2.34 (0.37) (3.34) 24.19 Considered in consolidation 0.23 S. N. SUBRAHMANYAN Chairman & Managing Director (DIN 02255382) R. SHANKAR RAMAN Whole time Director & Chief Financial Officer Regd. Office: Larsen & Toubro Limited, L&T House, N. M. Marg, Ballard Estate, Mumbai - 400 001. CIN: L99999MH1946PLC004768 www.Larsentoubro.com LARSEN & TOUBRO ☑ Find us on: in After all, when you smile, we know it's a job well done. So, you can smile wider. The perfect smile can brighten up the entire room. That's why at L&T we bring you technology-led solutions that give you more power while caring for the environment. WE LOVE POWERING YOUR SMILES. 659 Mumbai, May 8, 2024 P. R. RAMESH Independent Director (DIN 01915274) Company Secretary & Compliance Officer Membership No. FCS3939 SIVARAM NAIR A (DIN 00019798) 7 by the company at the year end 6.00 3 * Kindly let us know your experience in space provided overleaf J. Do you have any grievance which has not been redressed Yes No Excellent - the Registrar Good Poor* Signature Fold here Fold here Fold here Postage will be Not experienced -the Company I. Shares of associate/joint ventures held D. E. Please rate the contents and quality of Integrated Annual Report Please rate the contents and quality of the website of the Company Arrangements related to last year AGM F. Quality and accuracy of response to your queries and complaints: - by Company G. H. - by Registrar Timeliness of response form the Company - the Registrar Please rate the hospitality and efficiency of the persons attending to you when you interact with - Investors Relation Cell - Office of Registrars paid by C. addresssee No Postage stamp necessary That's why we've dedicated ourselves to building projects by using cutting-edge technologies to enhance their efficiency, safety and eco-friendliness. Because when you smile, we know it's a job well done. www.Larsentoubro.com Regd. Office: Larsen & Toubro Limited, L&T House, N. M. Marg, Ballard Estate, Mumbai - 400 001. CIN: L99999MH1946PLC004768 LARSEN & TOUBRO Saving for a better future, powers joy. WE LOVE BUILDING YOUR SMILES. At L&T, our green energy solutions are helping clients, communities and the country access Helping build happier, brighter tomorrows. Find us on: in ☑ www.Larsentoubro.com Regd. Office: Larsen & Toubro Limited, L&T House, N. M. Marg, Ballard Estate, Mumbai - 400 001. CIN: L99999MH1946PLC004768 AWARDS & RECOGNITION cleaner power with minimum wastage. LARSEN & TOUBRO ☑ Find us on: in if posted in India B. R. PERMIT No.: MBI GPO - 0049 Mumbai G.P.O. Mumbai - 400 001. Larsen & Toubro Limited Secretarial Department L&T House, Ballard Estate, Mumbai 400 001. Second Fold First Fold * In case your response to any question overleaf is "Poor", kindly share your experience and let us know the reason/ instances to enable us to investigate the matter. In case of any queries, kindly contact our Registrar: KFin Technologies Limited Unit: Larsen & Toubro Limited Selenium Tower B, Plot number 31 & 32, Financial District Gachibowli, Nanakramguda, Serilingampally, Hyderabad, Telangana - 500 032 Tel: (040) 6716 2222 ⚫ Toll free number: 1-800-3094-001 Email: einward.ris@kfintech.com Fold here BUSINESS REPLY LETTER UD Overall quality of service provided by No 31-Mar-24 Private Solutions Leather Capital GH4India Limited 31-Mar-24 Refer Note 2 Engineering Magtorq Private Limited Contracting Co. WLL 31-Dec-23 Are you satisfied with the growth strategy of the Company? Yes 31-Dec-21 31-Mar-23 Latest audited balance sheet date Engineering 1 Not aware Private Limited 27-Jun-91 05-Jun-15 25-Aug-23 02-Aug-10 31-Oct-09 02-Aug-10 28-Jul-04 13-Sep-07 India Private 11-Feb-05 Date on which the associate or joint 2 31-Mar-23 31-Mar-24 Limited Limited Industries venture was associated or acquired Limited [1] Projects and Systems Kish PJSC Facilities LLC 2 1 Sr. No. Part B: "Associates/Joint ventures" Statements Reports 3 Report Financial Statutory Integrated Management Corporate Overview Private Discussion and Analysis 4 Statement containing salient features of the financial statements of subsidiaries/associate companies/joint ventures (Haldia) Toubro Qatar & HBK 5 No. Name of Associates L&T Camp Seaports Sr. Grameen Indiran Gujarat Larsen & International 9 8 7 6 Magtorq 28000 21000 Financial performance of the segment 24956 17159 58% 39% 15265 Order Inflow 10.0% 14000 crore >100% 61% 29571 9691 c) Green Energy Business ENERGY PROJECTS SEGMENT Revenue from Operations and OPM% 90000 Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial Reports Statements Modularised Reformer for a Blue Hydrogen project in Rotterdam, Netherlands The Energy Projects Segment comprises: a) Hydrocarbon Business b) Power Business crore 35000 18.5% 75000 Modular fabrication facilities of the business are located primarily in India and the Middle East; at Hazira (near Surat), Kattupalli (near Chennai), and Sohar in Oman to serve the respective adjacent markets. 45000 With dynamic market conditions, the business remains steadfast in its commitment to a customer-centric approach, prioritising innovation, driving sustainable growth, and fostering competitiveness to achieve the mission of 'Execution Par Excellence.' Financial performance of the business *crore Order Inflow >100% 90000 80000 70901 OPEC expects an increase in oil demand over the next two years, which will be met by crude supply from non-OPEC+ producers. 70000 60000 50000 40000 64140 90% 29080 30000 20000 64% 18608 10000 36% 0 10472 2022-23 6761 10% 2023-24 Commitment to offshore wind energy with the formation of Offshore Wind Business, the business is participating in global tenders for key developers. In Global Offshore Wind Capacity, the European market has renewed urgency to replace fossil fuels with renewables. There is a strong demand for renewable energy in the US as well (Inflation Reduction Act). Globally, new wind power installations are projected to exceed 100 GW in 2026, with an additional 680 GW of new capacity expected to be added in the next five years. Additionally, there are business opportunities in Far East Domestic countries like Korea and Taiwan. Offshore Wind is also gaining momentum in India with the announcement of 30 GW capacity by 2030. Government initiatives for the allocation of offshore wind blocks are setting the ecosystem in motion. ■International Qatar Energy intends to boost its LNG production capacity from the current 77 MTPA to 126 MTPA by 2026 and plans to contribute 40% of global LNG demand by 2029. It is continuing with expansion under its USD 12 billion North Field Production Sustainability programme. Segment 100-T-02 Corporate Overview Management Integrated Statutory Financial Discussion and Analysis Report Reports Statements LNG Storage Tanks for Adani Dhamra LNG Terminal, Odisha 100-T-01 business strategy. Good value engineering entails standardisation, templatisation, rework avoidance, surplus management, and resource optimisation to drive efficiency and minimise costs. Digitalisation and Automation Recognising the pivotal role of technology, the business is making substantial investments in digitalisation and automation initiatives. These encompass 4D visualisation, critical path integration, construction ability simulation, material handling studies, interactive VR simulations, AI/ML- based video analytics, predictive analytics, and increased yard automation to enhance operational efficiency and accuracy. Generative Al will be used over time to enhance productivity. Smart Procurement The business is adopting smarter procurement practices to optimise resource utilisation and enhance cost- effectiveness. This involves the implementation of e-procurement platforms, data-driven decision-making processes, vendor consolidation, spend analysis, and fostering strategic supplier partnerships to drive value and efficiency across the procurement chain. Outlook The opportunity landscape of India's refining capacity currently stands at approximately 250 MMTPA, with ongoing additions of 40 MMTPA capacity, coupled with value-added petrochemical units. Anticipated investments in Refinery-Petrochemical integration and the pursuit of achieving targeted Net Zero emissions in India and the Middle East underscore a promising market trajectory for the business in the medium-term. The Indian government's focus on the 'National Coal Gasification Mission' aims to curtail dependence on imports by utilising coal to create value-added products, further supported by an incentive allocation of 8,500 crore. Additionally, initiatives aimed at increasing the share of Gas in India's energy mix to 15% by 2030, coupled with the development of a robust National Gas Grid, present avenues for growth and diversification. For the Offshore industry, the Indian government's recent focus on enhancing energy security has unlocked 99% of previously restricted areas within India's Exclusive Economic Zone (EEZ) for oil exploration and production (E&P). Previously, 42% of the EEZ was off-limits, but now only 1% remains restricted, presenting significant opportunities. ONGC continues to press ahead with its deepwater exploration and production plans, buoyed by sustained high oil prices. It intends to develop more than 25 offshore facilities and lay more than 1000 Km of subsea pipelines in the next three years with investments of USD 7.3 billion spread across both the West and East coasts. There is a considerable demand for Value-Added Services like Consulting, Shutdown and Turn-around Management, Performance Improvement, Asset Integrity Services, etc. With a strategic focus on asset monetisation and value maximisation, coupled with increased capital expenditure in upstream projects, the Middle East region is poised for growth, especially in the downstream processing of crude to chemicals. 65 LARSEN & TOUBRO New Strategic Gas Export Pipeline for Kuwait Oil Company, Kuwait Energy Projects The business expects Saudi Aramco to continue its investment spending in the medium-term. Due to supply- side capacity constraints, which were affecting the completion schedule of various projects, Saudi Aramco has temporarily paused investment in the increment programme. Once a few of the ongoing programmes achieve significant progress, the increment CapEx programme should be revived. Overall, as per the guidance released by Aramco, even in this revised scenario, there is an increase of up to 20% CapEx growth to USD 58 billion expected for 2024, with 60% of this investment in the Upstream sector. The Hydrocarbon business achieved order inflows of 70,901 crore in FY 2023-24, registering a growth of more than 100% over the previous year with the receipt of two ultra-mega orders from Saudi Arabia and a mega 66 Integrated Annual Report 2023-24 Domestic The Hydrocarbon business recorded revenue of 26,526 crore for the year, registering a growth of 27.1% y-o-y, due to a pick-up in execution momentum, mainly in the Offshore vertical of the business. The share of international revenue in FY 2023-24 was higher at 65% of the total revenue as compared to 45% in the previous year, with a higher opening international order book. The operating margin of the business increased to 10.3% from 9.9%, mainly due to cost savings arising out of improved execution in a few international and domestic jobs, further aided by the reversal of provisions on the receipt of a favourable arbitration award in a legacy project. Power Business Overview L&T is one of the leading EPC players offering turnkey solutions for both Coal and Gas-based power plants. These solutions encompass every aspect of design, engineering, manufacturing, construction, and project management. In addition to undertaking turnkey projects, it also offers equipment and other services for power plants. The business has developed its own capabilities in executing large and complex power projects. These include engineering, state-of-the-art manufacturing facilities, a competent manpower pool, and decades of experience earned in executing large & complex projects within and outside India. The business has a proven track record of delivering complete power plant solutions with scale and sophistication to meet India's growing energy needs. The business also executes combined cycle and cogeneration power projects based on LNG, Natural Gas and/or liquid fuel on a turnkey basis. It has an excellent track record in implementing projects for utilities, refineries, and Independent Power Producers (IPPs) in India and overseas. With extensive experience of over three decades in executing EPC contracts for Combined Cycle Power Plants (CCPP) and Cogen plants, the business has numerous references, deploying gas turbines sourced from major leading Original Equipment Manufacturers with Gas Turbine (GT) sizes ranging from 30 MW up to the most advanced GTs to date. The business has built on its core competencies and capabilities and has emerged as a major player in emission 67 LARSEN & TOUBRO 2x660 MW Shree Singaji Thermal Power Plant (Stage-II), Madhya Pradesh Energy Projects Segment control technologies such as Flue-gas Desulphurisation (FGD) in the Indian thermal power plant industry. It now has a sizeable presence in the FGD business. The business has an integrated manufacturing facility at Hazira, Gujarat. It is one of the world's most advanced facilities, having a manufacturing capacity of 5,000 MW per annum. The facility manufactures ultra-supercritical/supercritical boilers, turbines & generators, pulverisers, axial fans and air preheaters, components of FGD, and electrostatic precipitators. The business has project management offices in Vadodara and various other locations. The business has the following Joint Venture (JV) companies within its fold: L&T-MHI Power Boilers Private Limited, a joint venture with Mitsubishi Heavy Industries (MHI), Japan, the world's leading power equipment maker, for the engineering, designing, manufacturing, erection, and commissioning of ultra-supercritical/supercritical boilers up to a single unit of 1,000 MW. L&T-MHI Power Turbine Generators Private Limited, a joint venture with Mitsubishi Heavy Industries (MHI), Japan and Mitsubishi Electric Corp. (MELCO), for the manufacture of Steam Turbine Generator (STG) equipment of capacity ranging from 660 MW to 1,000 MW. The Company is engaged in the engineering, design, manufacture, erection, and commissioning of ultra-supercritical/supercritical turbines and generators. L&T Howden Private Limited, a joint venture with Howden Holdings B.V, is in the business of regenerative air preheaters and variable pitch axial fans (equipment, after- market spares and services) for power plants. L&T-Sargent & Lundy Limited, a joint venture with Sargent & Lundy LLC, USA, is engaged in the business of providing design, engineering, and project management services for power projects. Business Environment The thermal power sector is witnessing a revival after around three years amidst the continuing transition of India's power generation mix. With increasing economic activity, high GDP growth, industrial expansion, and power demand growing to record levels, many utilities are feeling the need to fast-track the brownfield expansion of their existing coal-based thermal power projects. In FY 2023-24, EPC coal-based power projects with a cumulative capacity of around 7 GW were awarded. Currently, around 10 GW of projects are in various phases of tendering. This establishes that for sustained energy security, thermal power generation is going to co-exist with renewable energy for a longer period than envisaged - till India achieves its Net Zero Target by 2070. The gas-based power generation sector in India remains muted due to high fuel costs despite an improvement in the supply and distribution network for natural gas. Approximately 24 GW of installed/commissioned gas- based power plants in India are idling due to high costs 68 Integrated Annual Report 2023-24 OPM% International 2023-24 2022-23 Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial Reports Statements Flue Gas Desulphurisation (FGD) system at India's first ultra-supercritical thermal power plant, Khargone, Madhya Pradesh order from the domestic client. The share of international orders also improved from 64% in the previous year to 90% in March 2024 with the receipt of ultra-mega orders in Saudi Arabia. crore Revenue from Operations and OPM% 35000 Integrated Annual Report 2023-24 30000 20868 20000 9292 15000 9.9% 10000 5000- 55% 11576 0 27.1% 26526 17143 65% 10.3% 9383 35% 25000 64 Embracing value engineering practices is paramount to reducing quantities, leading to a competitive The business is implementing strategies geared towards streamlining processes, eliminating redundancies, and empowering its workforce to maximise productivity. Value Engineering Segment Hydrocarbon Business Overview The Company's Hydrocarbon business provides integrated 'design and build' turnkey solutions for the hydrocarbon industry across multiple geographies. The business executes projects encompassing all functions, such as engineering, procurement, fabrication, construction, installation, project management, and asset life management services. Backed by cutting-edge innovation, the business has integrated capabilities across the value chain, supported by in-house Front-End Engineering Design (FEED), project management, procurement, modular fabrication facilities, Onshore and Offshore construction, installation, and commissioning. In India, the Engineering, Procurement, and Project Management centres are located in Mumbai and Vadodara. Overseas, the business presence is predominantly in the Middle East-spanning Kuwait, Algeria, Qatar, and the UAE with a regional centre of excellence for Engineering and Project Management situated in the Kingdom of Saudi Arabia. The business has set up a Piping shop and a Heavy Wall Pressure Vessel Manufacturing shop at Jubail Industrial Zone to support the KSA In-Kingdom Total Value Add (IKTVA) services. The business caters to clients across the hydrocarbon value chain through the following business verticals and units: Offshore The Offshore business offers lump sum turnkey EPCIC (Engineering, Procurement, Construction, Installation, and Commissioning) solutions for wellhead platforms, riser platforms, process platforms, accommodation platforms, subsea pipelines, brownfield developments, decommissioning projects, deepwater structures, manifolds, as well as transportation and installation services to the global offshore oil & gas industry. The Offshore business has its dedicated comprehensive in-house engineering capabilities offering 'Fit for Purpose' engineering solutions, which cover the complete project life cycle, from concept to commissioning. As a one-stop solution EPCIC player, it also has in-house fabrication facilities which focus on quality and timely dispatches. Own marine assets comprise a self-propelled heavy-lift-cum- pipe-lay vessel - LTS 3000 – held through a joint venture and a wholly-owned pipe-lay barge - LTB 300 - that helps expedite offshore installations, besides ensuring on-time completion of projects. As a contractor of choice for both domestic & international markets, the Offshore project management team delivers complex offshore projects in a time-bound manner with the utmost quality standards in a safe and incident-free environment. 60 Integrated Annual Report 2023-24 Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial Reports Statements Dual Feed Cracker Block Unit (DFCU) for HRRL, Barmer, Rajasthan Onshore EPC This business provides end-to-end EPCC (Engineering, Procurement, Construction, and Commissioning) solutions for the oil & gas industry, offering turnkey solutions across the hydrocarbon value chain covering refining, oil & gas processing, petrochemicals, fertilisers, cryogenic storage, LNG, pipelines, and terminals, including storage tanks and underground cavern storage systems for LPG. It also offers innovative construction solutions, such as automated welding (double-sided tandem SAW for horizontal joints and Semi-Auto FCAW for vertical joints), NDT (Non-Destructive Testing), and Automated UT (Ultrasonic Testing) for LNG Tank construction yielding high quality and productivity, enhancement of high deposition submerged arc welding process for duplex stainless-steel material in pipelines, new line of gas regulators for reduced gas wastage, and automatic pipe fabrication shop with cutting edge technologies. The business has a track record of concurrent execution of multiple ultra-mega & mega projects successfully, both in domestic and international markets, with different technology process licensors. The world-class in-house Engineering Centres offer design and engineering services for onshore hydrocarbon plants, pipeline projects, and onshore oil & gas field development projects with a complete spectrum of FEED, process, detailed engineering, project management services, procurement assistance, and related services. The business will continue to provide engineering and related services to the hydrocarbon industry in the domestic and international markets. Onshore Petrochemicals and Fertilisers Energy Projects Oil Production Deck Module for Saudi waters MRJN 820/829 LARSEN & TOUBRO 64321 87% 30750 30000 61% 18676 15000 39% 12074 0 2022-23 Domestic 9467 2023-24 13% International 7000 - Recently, a separate SBU has been carved out from the Onshore vertical to significantly focus on emerging opportunities due to significant developments in the downstream petrochemical and fertiliser sectors, such as Liquid to Chemicals, Blue Ammonia, and Urea projects. Modular Fabrication 12412 73788 0+ 9.1% 2022-23 2023-24 Domestic International -OPM% 73,788 The Energy segment achieved order inflows of crore in FY 2023-24, registering a substantial growth of more than 100% over the previous year on robust ordering momentum from the Middle East region, leading to an increase in the share of international orders from 61% in the previous year to 87% in FY 2023-24. The receipt of multiple ultra-mega international orders in the Hydrocarbon business aided the order inflow. The Energy segment's revenue at 29,571 crore for the year grew by 18.5% y-o-y due to a pick-up in the execution momentum, mainly in the Hydrocarbon business. The Power business registered a decline due to a tapering order book. The share of international revenue in FY 2023-24 at the segment level was higher at 58% compared to 39% in the previous year on the execution of large international projects in the Hydrocarbon business. The segment's operating margin increased to 10.0% from 9.1%, mainly due to cost savings and favourable award of claims. Funds employed by the segment as on March 31, 2024, at 5,792 crore, increased by 34.7% over the corresponding number as on March 31, 2023, mainly due to an increase in contract assets in some large value projects. 59 42% 60000 The Modular Fabrication business specialises in supplying plants & modular systems built as solutions for the Offshore, Onshore Oil & Gas, and Offshore Wind Farm industries, with the capability to deliver modules up to 6,600 MT. World-class modular fabrication facilities are strategically located at Hazira (India's West coast), Kattupalli (India's East coast), Sohar (Oman), and Jubail (KSA). The combined annual capacity for fabrication is estimated at about 60 million manhours or 2,00,000 MT (depending on the product mix). The Heavy Wall Pressure Vessel manufacturing facility, along with an operational pipe fabrication shop in KSA, primarily caters to the local requirement of demand for clean energy, supportive governmental policies, technological breakthroughs, and an expanding global market. The growth is being fuelled by advancements in technology, improvement in infrastructure, and viability of projects. International competition for EPC primarily emanates from Korean and European EPC companies. The business has diversified its exposure to more regions like Australia and Europe, leveraging technological solutions, and enhancing productivity to mitigate risks while maintaining competitiveness as it takes on new competitors. The business remains proactive in deploying measures to ensure cost leadership and focus on improved productivity. Digital transformation in optimising operations, enhancing efficiency, improving safety, and increasing innovation is an ongoing effort with the adoption of Artificial intelligence (AI) and Machine Learning (ML). Major Achievements Major Orders Won: □ EPCI order for new offshore structures, secured from a prestigious client in the Middle East □ Contract from a prestigious client in the Middle East for engineering, procurement, and construction of large Gas Compression Plants consisting of Gas Inlet Facilities, Gas Compression Systems, Produced Water Handling, Propane Refrigeration Systems, Condensate Transfer, and Utilities for Gas Compression Facilities in new onshore facilities and its integration with existing Gas Compression Plants □ Saipem & Clough JV (SCJV), Australia, has awarded a contract for the fabrication and supply of process 63 63 LARSEN & TOUBRO Central Processing Facilities for Sonatrach project, Algeria Energy Projects Segment and piperack modules for a 2.3 MMTPA urea plant for Perdaman Chemicals and Fertilisers Pty Ltd □ Order from a prestigious client in the Middle East for EPC for an ultra-mega Gas Processing Plant consisting of Inlet Separation Facilities, Booster Compression System, Amine Gas Recovery Unit, Dehydration Unit, Mercury Removal Unit, NGL Recovery Unit, and Sales Gas Compression System in new onshore facilities and its integration with existing Gas Processing Plants □ EPCI contract for a new large offshore platform and brownfield integration work with existing facilities from a prestigious client in the Middle East □ Contract from Indian Oil Adani Ventures Limited, including engineering, procurement, construction, and commissioning of offsite tankages, bullets, and other associated facilities on a lumpsum Turnkey basis □ Order from Oil & Natural Gas Corporation (ONGC) for the MHN TCPP PGC BGC Project (MTPBP) off India's West Coast for engineering, procurement, construction, installation, and commissioning of new Process Gas Compressor (PGC) modules at ONGC's Mumbai High & Tapti offshore locations, along with the upgrade of existing facilities to enhance production □ EPC contract for an Enclosed Ground-Flare System and demolition of existing facilities, reducing flame and smoke visibility to the nearby ongoing large-scale residential developments from prestigious clients in the Middle East Gas Pipeline project from a prestigious client in the Middle East comprising engineering, procurement, and construction of two new 56" Pipelines along with associated scraper receivers and launchers and main line isolation valve (MLIV) stations running parallel to the existing pipeline corridor Projects completed □ Mechanical completion and gas-in achieved for Re-route Gas and Condensate Pipeline Midyan Duba Project Successful completion of Performance Guarantee Test Run (PGTR) for all three sites of the South-West Gas Fields Development (SWGFD) Project, Algeria □ Commissioning of New Strategic Gas Export Pipeline (NSGEP) for KOC, Kuwait □ Commissioning of Replacement of Hydraulic ESD Systems project for a client in the Middle East Mechanical completion of Replacement of 11 BERRI Pipelines project for a client in the Middle East □ Delivery of Linde Rotterdam HMU (Hydrogen Manufacturing Unit) Project □ Construction of Fuel (Hydrogen) and Utility facilities (Nitrogen/Oxygen) completed at Jubail, KSA for Air Products Significant Initiatives Productivity Enhancement Globally, the Offshore Wind market is poised to play a pivotal role in helping nations transition to Net Zero and decarbonise life. This sector is witnessing exponential growth, propelled by a confluence of factors viz. escalating GCC-based oil companies are investing heavily in gas compared to oil. Geopolitical events have affected businesses both positively and negatively. Oil & Gas prices have remained significantly buoyant, enabling the oil companies in the Middle East to maintain their investment appetites. However, challenges continue to persist with regard to supply chain disruptions resulting from the ongoing conflicts in the Red Sea and Russia/Ukraine. India's expertise in speciality chemicals and the potential extension of PLI schemes to the chemical and petrochemical sectors indicate promising growth prospects. Additionally, investments in coal gasification projects, viability gap funding for such projects, and the tripling of the Ammonia market by 2050 underscore significant opportunities in the sector. Integrated outsourcing of Operations & Maintenance gains momentum, with Vedanta Limited-Cairn and ONGC leading the change. India's energy demand is poised to increase significantly, fuelled by strategic investments and initiatives such as the USD 67 billion plan in the next 5-6 years to bolster the domestic gas sector. Furthermore, the impending transition towards green energy is evident through initiatives like the Green Hydrogen Standard, backed by substantial incentives and agreements for green hydrogen production in states like Maharashtra, Rajasthan, and Odisha. 61 LARSEN & TOUBRO Energy Projects Segment Residue Upgradation Facility (RUF) for HPCL, Vizag, Andhra Pradesh offshore and onshore projects while developing skills in the Kingdom of Saudi Arabia to support the country's localisation programme. Modular Engineering capability also includes tailored 'Print to Build' solutions for technology companies, particularly in renewables and decarbonisation. The business delivering modules globally, covering significant regions such as North America, Europe, Africa, the Middle East, Asia, and Australia. Advanced Value Engineering & Technology Services (ADVENT) Leveraging expertise in high-end engineering and execution of large-scale, technologically complex EPC projects over several decades, and collaborating with well-organised R&D centres and renowned institutions, the ADVENT business unit delivers customer-centric solutions for various elements of the value chain of the hydrocarbon industry. ADVENT's technical capabilities and agility enable it to offer associated tailored value engineering solutions. Its offerings to clients encompass full-spectrum engineering-from concept to commissioning. It also provides EPC Project Solutions, Integrated Modular Solutions, Refinery Technology Solutions, and Sustainable Waste-to-Energy Solutions. ADVENT also focusses on technology-backed chemical industries, which are now ramping up investments in the chemical sector and reducing dependence on imports. These chemicals are the building blocks of high-value industrial end products. Asset Management The Asset Management business delivers differentiated and value-added services across a wide spectrum of solutions to Hydrocarbon and allied Process Industries. These comprehensive Asset Management Solutions cover operation, maintenance, performance enhancement, and health assessment of critical assets. This business complements the organisation's EPC Project offerings for mutually beneficial engagement with clients over the entire lifecycle of assets. Its dedicated engineering & project management expertise is extensive and draws strength from the EPC businesses for both Offshore and Onshore projects. Offshore solutions encompass structures and modules for Oil & Gas and Wind Farm projects, including Deepwater Subsea structures, Oil & Gas manifolds, Jack-up rigs, and Mobile Offshore Production Units (MOPU). Onshore offerings cover Process & Piperack modules, skids, structures, Static Equipment/ Pressure Vessels and Columns, Modular Specialty Furnaces, and Prefabricated Control Rooms/Substation Buildings (E-houses). The comprehensive Operations & Maintenance Outsourcing model covers Consulting and Asset Integrity. It can also include Asset Performance Improvement & specialised services based on the needs of customers. The vision of accelerating sustainable energy solutions is the driving force behind the Offshore Wind Business, which offers one-stop EPCI (Engineering, Procurement, Construction, and Installation) solutions for HVAC/ HVDC substations, and Wind Turbine foundations in both fixed and floating structures across the globe-from Far East, to Europe, and the USA. The business has strong multidisciplinary teams, partnerships with key industry stakeholders, and a robust network of suppliers backed by state-of-the-art fabrication facilities in Oman and India operating on the principle of 'Think Global Act Local'. The business is also partnering with electrical technology companies and collaborating with floating foundation technology providers and other key stakeholders to offer a comprehensive solution. 62 Integrated Annual Report 2023-24 Jubail Industrial Gas Network, KSA Corporate Overview Management Discussion and Analysis Integrated Report Statutory Financial Reports Statements Business Environment Offshore Wind 45% Management iRUDRA is an end-to-end digital transformation Reports Financial Statutory Integrated Report Discussion and Analysis Management Corporate Overview LARSEN & TOUBRO Integrated Annual Report 2023-24 74 at Funds employed by the segment as on March 31, 2024, 1,353 crore declined over the corresponding figure on March 31, 2023, by 49.0%, mainly due to higher The segment's operating margin declined to 16.3% from 18.0%, mainly due to cost overruns in a few jobs and the change in job mix. The Hi-Tech Manufacturing segment achieved revenue of 8,765 crore for the year, registering a growth of 22.4% y-o-y due to a pick-up in execution momentum. The share of international revenue in FY 2023-24 was at 29% of the total revenue of the segment as compared to 22% in the previous year, on account of higher opening international order book. The Hi-Tech Manufacturing segment achieved order inflows 14,278 crore during FY 2023-24, registering a decline of 9.4% over the previous year, mainly on account of deferment of orders in Precision Engineering & Systems Statements International Oxo Reactor for BASF Guandong Integrated Project, China Heavy Engineering Business Manufacturing Segment Hi-Tech B Ammonia Converter and Basket for OCI Beaumont, USA LARSEN & TOUBRO 75 The Special Fabrication Unit (SFU) fabricates critical Titanium Piping Spools, complex internals for Gasification Plants, Loop Reactors, Primary Quench Exchangers (PQE), and filter vessels for the petrochemicals sector The Process Plant Internals (PPI) PBU specialises in proprietary internals for Reactors and Ammonia Converter Baskets, Chemical Vapor Deposition (CVD) reactors for polysilicon plants, which are manufactured using materials like Stainless Steel, Duplex/Super Duplex Stainless Steel, Inconel, Monel, Hastelloy, Titanium, Zirconium, etc. The Modification, Revamp & Upgrade (MRU) PBU offers value-added end-to-end solutions for FCC (Fluid Catalytic Cracking) revamps, Crude Distillation Unit/ Vacuum Distillation Unit revamps, Multi-Shutdown Facility revamps, Urea Reactor Life extension, Coke Drum repairs, Heat Exchanger revamp, Urea energy-saving projects, debottlenecking/capacity enhancement of Oil & Gas units, and emergency repairs for the process plant industry The Nuclear PBU specialises in key equipment for steam supply systems in nuclear power plants. It manufactures key components of the nuclear island like Steam Generators, End Shields, Pressurisers, Safety Heat Exchangers, Reactor Header Assemblies, Calandria, End Fittings, etc. The Heat Transfer Equipment (HTE) PBU specialises in Molten Salt Reactor System, Ammonia & Urea Exchangers, High-Pressure Screw Plug Heat Exchangers, Methanol Converters, Propylene (PO) Reactors, Vinyl Acetate Monomer (VAM) Reactors and Fired-Tube Waste Heat Boiler packages Equipment, LNG/Gas Processing Pressure Vessels and Heavy Columns □ The Reactor & Pressure Vessels (RPV) PBU specialises in the fabrication of Hydro-Processing Reactors, Tubular Reactors, Gasifiers, Ammonia Converters, Urea Reactors, Coke Drums, Fluid Catalytic Cracking (FCC) Reactor - Regenerator system, Oxidation Reactor, Titanium Cladded The business is organised into the following Product Business Units (PBUS): The A. M. Naik Heavy Engineering complex at Hazira is a globally benchmarked state-of-the-art, fully integrated, and digitally-enabled manufacturing complex. Its capability spectrum spans across in-house Engineering & Technology centres, besides having a highly talented team committed to a safe and sustainable work culture. The business is globally recognised for its impeccable track record of timely and quality deliveries while creating new international benchmarks. The business has implemented extensive digital Industry 4.0 technology in its manufacturing & operations. L&T Heavy Engineering business is a global leader in the manufacturing of Engineered-to-Order Hi-Tech Reactors and high-pressure & temperature Heat Exchangers for Refinery, Petrochemicals, Fertiliser, Oil & Gas, and Nuclear Power plants. Overview customer advances on receipt of large orders in the Precision Engineering & Systems business. The Heavy Engineering business also contributed through improved customer collections. LARDEN & TOLMAC 2023-24 2022-23 0 78% 5609 3000. 71% 6234 18.0% 6000 22% 1552 7161 2531 29% 8765 22.4% Revenue from Operations and OPM% 9000 12000 2022-23 Domestic International Domestic 16.3% OPM% 0 3000 83% 13038 6000 11982 84% 9000 12000 17% 2724 15000 15762 18000 21000- crore 14278 2296 16% of 2023-24 The business also has one of the world's largest Forge Shops. L&T Special Steels and Heavy Forgings Private Limited (LTSSHF) is a joint venture with the Nuclear Power Corporation of India Limited (NPCIL). It is one of a kind in Southeast Asia with all the operations for making heavy forgings under one roof Business Environment The current FY 2023-24 has continued to witness the fallout of the prolonged Russia-Ukraine war, the Israel- Hamas conflict, and the persistent U.S.-China tensions. These geopolitical events have led to overall economic uncertainty and higher operational risks, like rising freight costs and delayed deliveries. Despite these headwinds, the business has continued its progress across most of the segments. crore 3916 7.7% Order Inflow 3637 Financial performance of the business The digital as well as the various organisational excellence initiatives of the business are expected to result in improved productivity and higher value creation on a medium to long-term basis. The business remains positive in its outlook for order prospects despite as many as 60+ countries, including many in India and the European Union, going into elections, which may lead to a lot of uncertainties in decision-making on upcoming prospects. The business is targeting special projects like Laser Interferometer Gravitational-Wave Observatory (LIGO) and Medical Isotope Reactors. A successful historical track record in the Fusion Reactor project (ITER) has opened new business opportunities for the ITER organisation. The business is well poised to benefit from the momentum in the nuclear sector. The MRU business expects sustainable increased demand and a stronger foothold in GCC for energy efficiency, emission reduction, and crude-to-chemical projects. COP28 has been a historic event for the nuclear energy sector. India plans to triple its nuclear power generation capacity to 22.5 GWe by 2031. NITI Aayog and the Department of Atomic Energy (DAE) are exploring the possibility of repurposing retiring thermal power plants with small modular nuclear reactors. Anushakti Vidhyut Nigam Limited (ASHVINI), a JV between NTPC and NPCIL, will focus on fast-track construction of 6 X 700 MWe Pressurised Heavy Water Reactor (PHWRs) as a part of the Fleet Programme in support of climate change and towards achieving Net Zero emissions target. Standard (LCFS) in developed countries. Oil-to-Chemicals projects drive growth in the petrochemicals sector (especially in Asia) and LNG sector (especially in the USA and the Middle East). Hi-Tech Manufacturing Segment Coke drums each weighing 450 MT for Numaligarh Refinery Limited, Assam LARSEN & TOUBRO 77 5000 a viability gap funding scheme for Coal Gasification projects in January 2024 and multiple mega projects in the refinery and petrochemicals sector. The business expects a continuation of large-scale private projects in solar photovoltaic Giga Factories and petrochemical segments. Climate change is expected to provide sustainable growth in view of the demand for renewable diesel and biodiesel plants (which are more eco-friendly) and enforcement of clean fuel standards - Renewable Energy Directive (RED) II, Renewable Fuel Standard (RFS), and Low Carbon Fuel 4000- 2247 57% Integrated Annual Report 2023-24 78 The Heavy Engineering business recorded an order inflow of 3,916 crore for the year ending March 31, 2024, higher by 7.7% as compared to the previous year, mainly due to the receipt of a high-value international order in the Modification, Revamp & Upgradation (MRU) business. The share of international orders increased to 57% in the current year from 48% in the previous year. | International Domestic 2023-24 2022-23 43% 1669 0 1879 52% 1000 2000 48% 1758 3000- In the domestic market, the Union Cabinet approved Outlook □ Al-Based UT & Visual Inspection Corporate Overview Integrated Annual Report 2023-24 76 In the domestic sector, the business continues to dominate by winning a total of 10 Urea PEQS in a row in the current financial year. CVD (Chemical Vapor Deposition) Reactor and Offgas Coolers are breakthrough orders with large business potential for the Polysilicon Project of RIL Giga factories. PDH-PP (Propane Hydrogeneration - Polypropylene) Plant, Turkey - 1st order Ceyhan Polypropylene, Uretim A.S, Turkey □ PTT Glycol Company, Thailand - 1st direct order for 2 nos. Scientific Design Ethylene Oxide Rx □ Perdaman Australia - Complete package of Urea Equipment Fertiglobe - Harvest Ammonia Plant, UAE - Order for Ammonia Converter & Basket IEFCL (Indorama Eleme & Fertiliser Chemicals Ltd.) Train-3 Ammonia Plant, Nigeria – A first-ever complete package of PEQs (Proprietary Equipment), CEQs (Critical Equipment), and Steam Drum On the International front, Business has won major orders like: Major Achievements Volatility in the cost of input materials and high energy prices are having an impact on the margins of the Forging business, which are being neutralised partly by stepping up energy conservation. Global forging companies are able to compete better in prices due to relatively lower energy costs. In the nuclear power sector, fleet procurement for the Indian Pressurised Heavy Water Reactor (IPHWR) is in progress, albeit at a slower pace. The Modification, Revamp and Upgrade (MRU) business, identified as a Lakshya 2026 growth initiative, has taken off well both in India and GCC countries. Clients are increasingly opting for revamps and deferring greenfield investment projects. Euro-5 compliance norms in GCC, fertiliser energy-saving projects in India and revamping of ageing plants are key drivers for the MRU business. On the domestic front, the business has seen traction in large-scale private projects like solar photovoltaic GIGA factories & refinery revamps. Management Discussion and Analysis Integrated Report Statutory □ Overlay UT Automation □ Robotic External Welding Station □ Automated Circumferential Seam Setup Station The acceleration of automation initiatives, as mentioned below, continued during the year, contributing to significant improvement in productivity: Leveraging LTIMindtree's iNXT platform for IIoT, 112 critical machines have been connected, enhancing quality, productivity, and support for the 'Express Delivery Programme'. programme focussed on enhancing product reliability, cost competitiveness, and customer & employee experience. Foundational solutions like plant connectivity, cybersecurity, and middleware, are its strong backbone. Significant Initiatives crore LTSSHF team has completed 16 out of the 24 sets of forgings for Nuclear Steam Generators; 70% delivery of the critical forgings for a prestigious strategic programme; India's biggest Pelton Runner Forging (~49 MT) for Idukki Hydro project in Kerala, and 1st set of Titanium Forgings for the country's strategic programme named 'Samudrayaan - India's Deep Ocean Mission'. The business was granted four patents for its innovative designs and processes. The business has also successfully and timely delivered the World's Heaviest Ammonia Converter for OCI Beaumont, USA; the World's Heaviest Coke Drums for Pemex's Salina Cruz Refinery, Mexico; and SS Heaviest Removal Column for Pluto Train 2 Project, Australia. Further, the business also delivered Loop Rx of the IOCL P-25 project for the first time & Titanium spools for Assam Bio-Refinery. The MRU business secured the largest order from Petro Rabigh, KSA, for Ethane Cracker revamp and HOFCC (High Olefin Fluidised Catalytic Cracking Unit) debottlenecking. This will unlock new opportunities with Aramco JV companies in KSA. The MRU business has also secured a number of orders on a nomination basis in the domestic market, including the largest domestic order from Nayara Energy for Coke Drum replacement. HDS Reactor for IOCL Panipat DHDT project, Haryana Statements Reports Financial The Nuclear business has surpassed its earlier benchmark of 36 months to manufacture Steam Generators in 33 months. The business has also qualified to manufacture the forgings for Framatome's Pressuriser Design for the first time. business. The share of international orders decreased to 16% in the current year from 17% in FY 2022-23. TA Crystallizer and PTA Crystallizer for Mega PX-PTA project at IOCL Paradip Refinery, Odisha The operating margin improved to 8.7% from 6.5%, mainly due to the cost savings in certain international gas- based projects. 5000 6000 3044 (25.6%) Revenue from Operations and OPM% * crore The Power business recorded an order inflow of 2,870 crore for the year ending March 31, 2024, registering a growth of 71.8% as compared to the previous year, largely aided by the receipt of a few FGD orders. 0 500- 1602 96% 1000 2705 94% 4% 1500 4090 68 4000- 399 Domestic International 2023-24 2022-23 0. 6.5% 1000- 99% 3028 3691 90% 2000- 8.7% 3000 1% 16 10% 2000- 1670 2500- □ Reliability Test Run completed for three FGD units of Central Utility Projects in Chhattisgarh, Madhya Pradesh, and Uttar Pradesh □ Completion of facilities for three FGD units of Central Utility Projects in Chhattisgarh, Madhya Pradesh, and Odisha FGD orders received from State Utilities for a 2 x 300 MW + 2 x 500 MW Power project in West Bengal and a 1 x 800 MW Power project in Gujarat Flue Gas Desulphurisation System for a 2 x 500 MW Central Utility Project inaugurated in West Bengal Some of the major achievements by the business during the year include: Major Achievements However, to meet the anticipated surge in power demand during the upcoming summers, the government has mandated the activation of the existing gas-based power plants across the country and has issued directives to make these plants fully operational to meet the surge in power demand. of generation. The Government of India has no plans to increase gas-based power generation. Boiler manufacturing facility at Hazira, Gujarat Statements Reports Financial Statutory Integrated Report Discussion and Analysis □ Final Acceptance Certificate received for an International Combined Cycle Project in Bangladesh □ Auxiliary Boiler Light Up achieved for a 2 x 660 MW Power Project in Uttar Pradesh Significant Initiatives In line with the energy transition and sustainability requirements, the business formed a Technology Task Force (TTF) to identify, incubate, and implement new technology opportunities to make the organisation resilient. TTF has finalised a few focus areas like Carbon Capture Technology, Small Modular Reactors, Flexibilisation in Coal based power plants, Coal Gasification, Integrated Gasification Combine Cycle (IGCC), and Biofuel/Ammonia/Methanol firing in Supercritical Power Boilers, etc. The business is also expanding into adjacencies like providing Life Cycle Solutions (Spares and Services) to customers, which will cater to other OEM machines as well. 165 6% 2870 3000- 3500- 4000 71.8% crore OPM% Order Inflow India is continuing to see a surge in energy demand and an increase in the Plant Load Factor (PLF) of thermal power plants to maintain the country's energy security amid rising demand. As per estimates from the Ministry of Power, the capacity additions in thermal power will continue up to 2032. More than 49 GW of coal-based power projects are expected to be awarded in the next 3-4 years. Focus on execution and improvement in profitability of operations continue to remain critical for the continuity of the business. Outlook Turbine manufacturing facility at Hazira, Gujarat Energy Projects Segment LARSEN & TOUBRO 69 To improve profitability and on-time execution of projects, the business introduced various Operational Excellence initiatives. To improve productivity and reduce profit leakages, various digital and analytical levers such as Artificial Intelligence (including Machine Learning), IoT-isation, Immersive Technologies like Virtual Reality, BIM, Drones, Process Automation, and Business Intelligence & Analytics have been imbibed into the day-to-day operations. The focus on achieving QEHS (Quality, Environment, Health & Safety) excellence remains of prime importance. It has also accelerated the usage of digital levers to increase the efficiency and productivity of operations. Financial performance of the business The Power business revenue at 3,044 crore declined 25.6% on a y-o-y basis, with tapering of execution of jobs in the portfolio and a declining order book. Corporate Overview 70 The Green Energy business is initiating world-class quality systems per ISO and implementing L&T's Business Excellence Models at its manufacturing facility LTEL has taken definitive steps towards indigenisation by developing a local supplier ecosystem for electrolysers LTEL is establishing a Giga factory with manufacturing automation and Industry 4.0 solutions ensuring productivity, safety, efficiency, and traceability The R&D Lab is being enhanced, and the New Energy Technology Lab is being set up to develop various green & sustainable technologies Significant Initiatives LTEL has established an Electrochemical Testing Facility at A. M. Naik Heavy Engineering Complex at Hazira, Gujarat OLTEGL and GH4India have received pre-qualifications for developing Green Hydrogen & Derivative assets from domestic and overseas off-takers Statements Reports Report Financial Statutory Integrated Management Discussion and Analysis Corporate Overview Integrated Annual Report 2023-24 Set up an advisory 'L&T Green Energy Council' (GEC), a global think-tank comprising eminent thought leaders and experts from various facets of Green Energy, towards identification of technology trends, analyse global policy developments, evaluate emerging business models, and explore collaborations Outlook The global outlook on green hydrogen and its derivatives business seems encouraging and reflects a growing recognition of its potential to decarbonise industries and power systems. Most countries that have set ambitious targets towards carbon neutrality are exploiting the production of Green Hydrogen from renewable energy sources. Therefore, Green Hydrogen emerges as a key solution to reduce carbon emissions across various sectors, including transportation, manufacturing, and energy generation. Investments in Green Hydrogen infrastructure and technology are increasing, mainly driven by Government incentives, private sector initiatives, and international collaborations. Moreover, the development of hydrogen derivatives such as ammonia, methanol, and synthetic fuels further expands the potential applications of Green Hydrogen, offering scalable solutions for energy storage, transportation, and industrial processes. Order Inflow Financial performance of the segment The Defence Engineering business has been renamed as L&T Precision Engineering & Systems business with effect from April 01, 2024. This is in line with the vision to pursue opportunities in emerging deep-tech sectors like Precision Manufacturing and Electronic systems in Defence, Aerospace, and other industries. b) Precision Engineering & Systems Business The Hi-Tech Manufacturing Segment comprises: a) Heavy Engineering Business Hi-Tech Manufacturing Segment SEGMENT 72 MANUFACTURING LARSEN & TOUBRO 73 Overall, with the right strategies and investments, the outlook for this sector is highly optimistic, promising a substantial contribution to India's energy transition and sustainable development goals. However, challenges around financing and regulatory complexities need to be addressed to unlock the full potential of the Green Hydrogen and New Energy markets in India. In addition, India's vast renewable energy potential, particularly in solar and wind power, presents abundant opportunities for Green Hydrogen production through electrolysis. The integration of Green Hydrogen into various sectors such as industry (especially cement, steel, refineries, fertilisers, etc.), transportation, and power generation offers promising prospects for market penetration and revenue generation. Additionally, collaborations with government agencies, private enterprises, and research institutions will play a crucial role in driving innovation and scaling up production capacities. In India, the Green Hydrogen and New Energy Sectors are poised for significant growth and innovation. As the country aggressively pursues its renewable energy targets, the demand for clean and sustainable energy solutions is escalating rapidly. Besides, the Government's commitment to reducing carbon emissions is evident from various announcements around favourable policies and incentives. NGHM creates a conducive environment for the expansion of green hydrogen and new energy businesses. Despite challenges such as cost competitiveness and scaling up production, the global momentum towards a hydrogen economy is palpable, signalling a transformative shift towards sustainable energy systems amidst the pursuit of economic growth. HI-TECH (9.4%) LTEL engineered, developed, and commissioned the first Indigenous Electrolyser in its newly set up factory at A. M. Naik Heavy Engineering Complex at Hazira, Gujarat OLTEL is awarded a PLI benefit of 444 crore for manufacturing electrolysers with an allotted capacity of 300 MW and also a grant of 120 crore as a fiscal incentive under the Gujarat Electronics' Policy OLTEGL has bagged its first Front End Engineering & Design orders from global players making a foray into the Green EPC space The National Green Hydrogen Mission (NGHM) of India has come up with incentives to accelerate Green Hydrogen adoption in India through the Strategic Initiative for Green Hydrogen Transition (SIGHT). Over 19,500 crore is earmarked towards the adoption of Green Hydrogen. These incentives are mainly directed towards Electrolyser Manufacturers and Green Hydrogen Producers. Green Hydrogen Plant at L&T's A. M. Naik Heavy Engineering Complex in Hazira, Gujarat Statements Reports Financial Statutory Integrated Report Discussion and Analysis Overview Management Corporate Integrated Annual Report 2023-24 International Domestic 2023-24 2022-23 Green Manufacturing & Development Overview L&T's Green Energy business affirms the Greener Planet vision by aligning with the initiatives of global decarbonisation and the National Green Hydrogen Mission (NGHM). It focusses on a green energy portfolio to meet the domestic and global future energy needs while achieving the global climate goals. To achieve this vision, L&T Energy Green Tech Limited (LTEGL), a wholly-owned subsidiary of Larsen & Toubro Limited, focussing on Green and New Energy transition business segments, has been created. The Green Energy business shall focus on the entire Green Energy value stream, including Green Molecules and their derivatives (Hydrogen, Ammonia, Methanol, etc.). in promoting low-emission hydrogen production, backed by significant government funding initiatives like the US Inflation Reduction Act (IRA), Hydrogen Production Tax Credit, the EU Important Projects of Common European Interest, and the UK Low Carbon Hydrogen Business Model. The European Union Emissions Trading System - EU ETS is a cornerstone of the EU's policy to combat climate change and its key tool for reducing greenhouse gas emissions cost-effectively. In the global electrolyser market, China, after a slow beginning till 2022, added 30% to the global electrolyser capacity addition in 2023. North America and Europe lead green hydrogen production, potentially reshaping global energy trade dynamics. Countries such as India with abundant renewable energy resources, have a competitive advantage in The Green Hydrogen and New Energy sectors are experiencing a remarkable surge globally, driven by the urgent need to combat climate change and transition towards a low-carbon economy. Governments worldwide are recognising the importance of investing in renewable energy technologies, including Green Hydrogen, to achieve their climate targets outlined in the Paris Agreement. Competitive renewable energy sources, aided by advancements in electrolysis technology, low-cost financing, and government incentives, are accelerating the pace of achieving parity between green energy and conventional alternatives. This has led to a proliferation of projects and investments across various regions, ranging from Europe and the USA to Asia-Pacific and beyond. Over forty nations have hydrogen strategies, with early adopters revising their plans for higher ambitions. Low- emission hydrogen is seen as vital for decarbonising hard- to-abate sectors, highlighted by the energy crisis sparked by the global geopolitical situation. Additionally, major economies are integrating hydrogen technologies into their new industrial strategies. Business Environment Energy Projects Segment Major Achievements Electrolyser manufacturing plant at L&T's A. M. Naik Heavy Engineering Complex in Hazira, Gujarat 71 GH4India Pvt Ltd, a JV between L&T, ReNew Power, and IOCL, is formed to develop the nascent green hydrogen sector in India. GH4India will focus on developing Green Hydrogen & derivatives projects to supply Green Hydrogen at an industrial scale in a time-bound manner under various ownership and operatorship models. The company will use pressurised, alkaline technology under licensing arrangements with its European partner, M/s McPhy. The technology does not use noble materials and is competitive with a compact modular footprint. These devices have a fast start-up from hot standby to full load and demonstrate a quick response to intermittent renewable energy supply. L&T Electrolysers Limited (LTEL), a subsidiary of LTEGL, is the manufacturing arm for modular & mass manufacturing of smart, efficient, and reliable electrolysers. Electrolysers are hi-tech equipment that use electricity, water, and electrolytes to produce green hydrogen. The units consist of transformers, rectifiers, electrolyser stacks, electrolyser processing units (EPUs) for gas separation, and purification & distillation units (PDUs) for making fuel cell grade hydrogen with 99.999% purity. LTEGL aims to undertake complex and mega projects in the hydrogen value stream of renewable power, hydrogen, and derivatives (Ammonia, Methanol, DME, etc.) generation, storage, and transportation infrastructure. LTEGL would undertake extensive research and development (R&D) activities through its Technology & Innovation centres and assess the best global technologies, acquire strategic interests, licensing in technologies aligned with green and new energy opportunities. L&T Energy Green Tech Limited (LTEGL) will provide single-point integrated solutions in the hydrogen economy. The business is centred on three principal business segments, viz. Manufacturing, EPC, & Development. The Green Manufacturing unit at Hazira (Gujarat) would focus on end-to-end manufacturing of electrolysers as an OEM supplier, with value stacking and advanced technologies. The EPC arm would cater to domestic and global projects in the Green H2, Derivatives, and Carbon Capture Solutions. The Development division would focus on Integrated Development of Green H2 & Derivatives projects. The business has incorporated three companies that cater to these three lines of business. LARSEN & TOUBRO Corporate Overview Integrated Annual Report 2023-24 Integrated Report 0 9% 8000- 20.4% 20.4% 16000 20000 40828 91% 24000 91% 37846 32000 40000 48000 56000 *crore 3943 2022-23 44916 4088 2023-24 The segment recorded revenue of Banking and Financial Services (BFS) The business has a strong presence in each of the following business verticals: IT & Technology Services Segment LTIMindtree's state-of-the-art campus at Mahape, Navi Mumbai, Maharashtra C& LARSEN & TOUBRO 85 Domestic ■International ● OPM% LTIMindtree (LTIM) is a global technology consulting and digital solutions company that enables enterprises across industries to reimagine business models, accelerate innovation, and maximise growth by harnessing digital technologies. As a digital transformation partner to more than 700 clients, LTI Mindtree brings extensive domain and technology expertise to help drive superior competitive differentiation, customer experiences, and business outcomes in a converging world. Powered by nearly 81,000 talented professionals across more than 30 countries, the Company helps in solving the most complex business challenges and delivering transformation at scale. Overview LTIMindtree The funds employed by the segment as on March 31, 2024, at 33,034 crore, increased by 12.4% compared to March 31, 2023, largely due to higher Cash & Cash equivalents on the Balance Sheet. The segment's operating margin, at 20.4%, is in line with the previous year. the year ended March 31, 2024, registering a growth of 7.5% over the previous year, largely reflecting the overall challenging macro environment in the sector. International revenue continues to be at 91% of the total revenue of the segment. 44,916 crore for 9% LTIM's strong domain and technology capabilities, focussed sub-industry offerings, and a strong partner ecosystem across banking, financial services as well as enterprise partners enable true end-to-end transformation, helping BFS clients modernise their core, reimagine their go-to- market models, achieve their sustainability goals, enable cyber-resilience, transform using Al, data and insights, and better engage with their end consumers. 7.5% Revenue from Operations and OPM% International 2023-24 Domestic 2022-23 0 3000 92% 11159 100% 10292 6000 9000- 0% 10341 49 8% 966 12000 The Precision Engineering & Systems business recorded an order inflow of 10,341 crore, registering a decline of 14.7% y-o-y, mainly due to the deferment of a few orders and due to a higher base. During the year, the business secured a large value order from the Ministry of Defence. No major international orders were received during the year. 41789 Domestic International The operating margin declined to 15.9% from 20.0% in the previous year, largely reflecting the stage of execution and job mix. Financial performance of the segment b) L&T Technology Services Limited and its Subsidiaries c) E-commerce/Digital Platforms and Data Centers The Group has forayed into fabless semiconductor chip design during FY 2023-24 by incorporating L&T Semiconductor Technologies Limited (LTST), a wholly- owned subsidiary. A fabless semiconductor company specialises in the design and creation of semiconductor chips without owning or operating semiconductor manufacturing facilities. The IT & Technology Services Segment comprises: a) LTI Mindtree Limited and its Subsidiaries LTIMindtree campus, Bengaluru, Karnataka IT & TECHNOLOGY SERVICES SEGMENT Statements Reports Financial Statutory Integrated Report Discussion and Analysis Management Corporate Overview Integrated Annual Report 2023-24 84 Benefitting from a higher opening order book, the Precision Engineering & Systems business earned revenue of ₹ 4,692 crore during FY 2023-24, higher by 33.9% compared to the previous year. The share of international revenues increased to 12% from 7% in the previous year with the ramp-up in the execution of export orders. Insurance LTIM has been at the forefront of transforming leading Property & Casualty (P&C) insurers, life and annuity insurers, insurance brokers, employee benefits, and reinsurers, helping them lower costs, scale operations, personalise products, and thereby shape the future of insurance, faster. Using deep expertise with leading- edge technologies, including gen AI, ML, drones, digital twins, lot, cloud, and advanced data analytics, LTIM has partnered with customers to develop unique solutions to some of the most complex industry issues, such as claim/ fraud management, digital transformation, underwriting profitability, and distribution effectiveness. Hi-Tech & Services □ Digital Engineering □ Cybersecurity □ Cloud and Digital Infrastructure □ Enterprise Al □ Data and Analytics LTIM has offerings across the following service lines: □ Interactive Services Segment IT & Technology LTIMindtree's state-of-the-art Delivery Center in Johannesburg, South Africa 00 Servers 0.00% Servers 0 3 □ iNXT 8.576 □ Platform Operations □ Enterprise Cloud Applications 88 The Nasscom Annual Enterprise & Tech Services CXO Survey 2024 indicated an expectation of stronger growth momentum for the calendar year 2024, with the under- stressed sectors of BFSI, Telecom, Media & Entertainment and Hi-tech leading the digital spending. Generative Al remains a key priority for over 95% of the surveyed organisations over the next 6-12 months. Technology providers are also optimistic about growth expectations for FY 2024-25, with 79% expecting higher growth compared to last year. Hiring growth is also expected to improve, with 80% of the providers planning a higher level of hiring compared to FY 2023-24. In the midst of significant business caution towards investments and delayed decision-making, India's technology industry revenue (including hardware) is still expected to hit USD 254 billion. Despite the macroeconomic challenges throughout the year, the technology/IT Services industry demonstrated resilience as large-scale cost optimisation and automation deals helped maintain demand for enterprise software and IT services. Business Environment strategies, co-innovation, co-selling and global demand generation activities. It implemented multiple co-branding and co-marketing initiatives and signed up exclusive partner programmes with its key strategic partners. This helped the Company to augment its GTM strategy and co-investments across key priority areas. In the current year, LTIM has been able to deepen relationships with its partners and create combined value through the execution of joint Go-to-Market (GTM) The Business has built a strong ecosystem of partners that enables it to drive significant value for its clients in an ever-changing technology landscape. The Company's partner ecosystem comprises global tech majors in Cloud, Data & Al, Interactive, Digital Engineering, Low code and Integration, Enterprise Applications, Quality Engineering, Automation, Infrastructure and Security domains serving across multiple industry groups. Alliances & Partnerships □ Quality Engineering Services - Testing □ Hyper Automation □ Consulting Services □ Oracle □ SAP □ Salesforce □ INXT Geospatial Engineering 10 2839 1 Statutory Integrated Report Discussion and Analysis Management Corporate Overview Integrated Annual Report 2023-24 86 LTIM delivers a comprehensive set of next-generation solutions that are designed for the complete energy value chain across upstream, midstream, and downstream oilfield services, as well as renewables segments. LTIM also helps monitor, track, account for, and report carbon footprint and assists in trading carbon credits through holistic emissions management, decarbonisation of operations, and expansion into renewables. Energy LTIM is geared to address customers' priorities across the manufacturing value chain - across the front office (sales, marketing, commerce, commercial) & back office (procurement, manufacturing & supply chain). The Resources sub-vertical enables the domain-led digital transformation of manufacturing, mining, metals, building materials, utilities, oil & gas, oilfield, and renewable energy giants with technology solutions and services that help them achieve their goals of safety, reliability, efficiency, profitability, sustainability, and value chain transformation. Manufacturing and Resources LTIM works with the world's leading broadcasters, studios, OTT/streaming, publishers, information services, education, music, gaming, AdTech, telcos, and multiple-system operators. LTIM is enabling them with product innovation to drive new revenue streams, modernise content supply chains, and personalise viewer/audience experiences. Communications, Media, and Entertainment generation technology solutions and products catering to the industry's needs. LTIM powers innovation to leading Hi-Tech and Services enterprises across various sub-segments: semiconductors, software and platforms, hardware and OEMs, and professional services. LTIM combines domain, customer experience, and digital engineering prowess to deliver next- Financial Reports Statements LTIMindtree Aggregated No. of Servers: CPU Violations LARSEN & TOUBRO 87 LTIM's Public Services sub-vertical enables federal, state, local, provincial, municipal, defence, and government healthcare organisations to unlock the true potential of technology and digital, helping them to transform their service delivery to meet citizens' evolving needs. Public Services LTIM is driving collaboration in the life sciences industry, making healthcare more affordable and accessible while accelerating personalised medicine and patient-centric treatment journeys. The Company's digital and technology- enabled solutions focus on faster drug discovery, lower R&D costs, diverse & comprehensive trials, adaptive manufacturing, a transparent supply chain, and meeting regulatory stipulations. Life Sciences 12125 LTIM has delivered transformative consulting services and technology solutions to global healthcare giants across the payer, provider, healthcare product manufacturer, pharmacy, health insurance, and benefits manager landscape. The Company brings a unique healthcare platform operation approach to help clients adopt new processes and technologies quickly and easily. sales, provides actionable insights to enhance customer experience and loyalty as well as to improve employee productivity, modernises legacy infrastructure and applications by leveraging Hyperscale Clouds, and helps accelerate Sustainability initiatives. LTIM is propelling its clients from 'post-pandemic recovery' to 'fast-track growth' with innovative technology solutions, which have been successfully implemented by some of the world's largest and fastest-growing airline, hotel, car rental, travel technology, travel management, logistics and real estate companies, to accelerate revenue growth and optimise costs. The Company develops modern mobile and web applications, enables digital marketing and Travel, Transport, and Hospitality Retail and Consumer Packaged Goods (CPG) LTIM delivers hyper-personalised experiences at scale to the world's largest CPG and brands. The Company also helps CPG and retail clients to navigate increased competition and margin pressures from online retailers, ever-changing consumer behaviour, rising costs, supply chain disruptions, and ESG issues. With deep industry expertise, the Company's 6,500+ global associates lead by designing new 'Phygital' experiences, modernising legacy applications and infrastructure leveraging the cloud, helping automate, and reducing the time from data to decision. LTIM has experience in helping electric, gas and water utility firms reinvent themselves by delivering solutions and methodologies required to connect the physical and digital worlds through end-to-end IT/OT capabilities. LTIM's vision is aimed at addressing transformational challenges such as Distributed Energy Resources, Grid Modernisation, Production Asset Management, Transmission & Distribution Network Ops., expansion of EV Infrastructure, Customer Experience, and last but not least, Decarbonisation. Utilities LTIMindtree Headquarters, Powai, Mumbai, Maharashtra Healthcare OPM% 2023-24 2022-23 Since its inception, the business has built a portfolio of wide-ranging, indigenously designed and developed products, systems, solutions, platforms, and technologies. The business has indigenously conceptualised, engineered, built, and supplied over 250 systems and products, with more than 50 of them having been delivered in serial production mode. The business model is uniquely differentiated through its focus on in-house technology and product development, innovation for serial production, and mature and equated partnerships with domestic as well as global majors, both in the government and private sectors. Besides the supplies, the business offerings also include providing support during installation, commissioning, field evaluation trials, through-life support, and obsolescence management. These capabilities enable the business to maintain its market leadership position amongst the private sector defence industry and be future-ready, given the Government's push for higher indigenisation and autonomy through the 'Aatmanirbhar Bharat Abhiyan'. Systems at Powai, Talegaon, Hazira, and Coimbatore, as well as Design & Engineering Centres for Underwater Platforms and Warships at Powai and Chennai. These work centres are complemented by R&D Centres at Powai and Bengaluru, and Product Design, Development & Engineering Centres for Armoured Platforms & Weapon Systems, Sensors, Engineering Equipment and Aerospace Strategic Electronics Centre at Bengaluru □ Precision Manufacturing & Systems Complex (PMSC) for aerospace systems manufacturing, equipped with Centres of Excellence for Advanced Composites and Additive Manufacturing at Coimbatore □ Strategic Systems Complex for weapon launch systems, sensors, engineering equipment and control systems at Talegaon (near Pune) □ A. M. Naik Heavy Engineering Complex at Hazira (near Surat) for manufacturing, integration, and testing of armoured & allied land platforms and hulls, as well as pressure-proof structures for underwater platforms The shipyard at Kattupalli (near Chennai) caters to new builds and repair of marine platforms The business is headquartered in Powai, Mumbai and its operations extend across India. It also includes R&D centres, Product Design & Engineering Centres, and the following dedicated production centres: □ Aerospace Systems □ Land Platforms, Equipment, and Systems □ Marine Platforms, Equipment, and Systems The business is structured to provide direction to various segments of operations, as under: segments with a focus on indigenous design and emphasis on creating Indian Intellectual Property (IP). Hi-Tech Manufacturing Segment Close-In Weapon System (CIWS) L&T's participation in the defence sector stems from its ethos of being a builder of the Indian nation. Various sustainability and risk assessors of defence-related businesses do recognise the right of countries to defend themselves and the need to develop & produce defence- related products to fulfil security, peacekeeping, and humanitarian needs. This is well-acknowledged in the current era of multiple regional conflicts where nations have increased their spending on defence to be able to be equipped for self-defence and ensure national security. LARSEN & TOUBRO 80 Offshore Patrol Vessel □ Electronics Products and Systems: This segment will design, develop, and realise critical hardware and application software that would have wide applications across industries Precision Products: This segment will manufacture precision products that are characterised by their adherence to high reliability and critical specifications Leveraging its prowess in technology development for about four decades, the business is incubating the following new business segments in FY 2024-25: While maintaining its position as a leading player in the Indian Defence Sector, the business does not manufacture any explosives or ammunition of any kind, including cluster munitions or antipersonnel landmines or nuclear weapons or components for such munitions. The business also does not customise any delivery systems for such munitions. It is noteworthy that the business' sole customer & regulator, the Indian Government, is committed to non- proliferation under the 'Weapons of Mass Destruction and their Delivery Systems (Prohibition of Unlawful Activities) Act, 2005'. India is also a signatory to the Missile Technology Control Regime (MTCR), a multilateral export control regime, and a party to the Wassenaar Arrangement - a voluntary export control regime that limits the destabilising proliferation of sensitive technologies. Further, India has voluntarily adopted a 'No First Use' (NFU) Policy (PIB notification dated January 4, 2003) that is enshrined in the commitments of the Cabinet Committee on Security (CCS). India's application to join the Nuclear Suppliers Group (NSG) in 2016 is also under discussion. The Company recognises the need to act responsibly in carrying out its business related to the defence sector, implement internal controls and stay committed to respecting human rights. INDIAN COAST GUARD 41 Statements Reports Financial Statutory Integrated Report Discussion and Analysis Management Corporate Overview Integrated Annual Report 2023-24 79 Since the constitution of a separate business vertical in 2017, the business has grown from strength to strength and earned recognition in the aerospace and defence segments, as L&T Defence. Reflecting the Company's vision to pursue opportunities in emerging deep tech sectors like precision manufacturing, advanced electronics systems, Al, additive manufacturing, autonomous platforms, and digital technologies, including Industry 4.0 in Defence & other industries, the business has been renamed as L&T Precision Engineering & Systems with effect from April 01, 2024. Having built a portfolio of products, systems, platforms, and solutions, and correspondingly a basket of technologies, the business provides concept-to-design- to-delivery customised solutions across chosen strategic During the preceding one and a half decades, L&T was associated with the Defence Research & Development Organisation (DRDO) while concurrently contributing towards the Indian Navy's 'A Builders Navy' aspiration by developing platform-specific equipment and systems across classes of Naval platforms with in-country value addition. As for the Space sector, the business continued to be a trusted partner to ISRO across every segment of Space activities across Boosters and wide-ranging hardware for Space Launch Vehicles and Satellites, test facilities, material independence, Satcom infrastructure, and Deep Space Communication Network. 3000 49% 1985 4078 11.5% 3658 Revenue from Operations and OPM% 4000 5000 crore Naval vessel RFA Argus from Royal Fleet Auxiliary (RFA) UK, for repairs at L&T Shipbuilding's Kattupalli Shipyard, Tamil Nadu Statements Reports Financial Statutory 1322 36% 2000 16.0% seventies, and mid-eighties, respectively, as a part of the Company's focus on building a strong and self-reliant India by leveraging its precision and systems engineering capabilities. This was well ahead of the opening up of these sectors for private industry participation, beginning with Defence in 2001 and Space in 2020. L&T entered the various strategic sectors, such as nuclear power, aerospace, and defence, in the sixties, early Overview Precision Engineering and Systems Business The operating margin of the business improved from 16.0% to 17.7% due to execution cost savings and a better job mix. The Heavy Engineering business's revenue of 4,078 crore grew by 11.5% on a y-o-y basis, with higher execution of orders in the MRU business. The share of revenue from international operations has increased to 49% compared to 36% in FY 2022-23. Domestic International ● OPM% Business Environment 2023-24 0- 2336 64% 1000- 2093 51% 17.7% 2022-23 Discussion and Analysis With the Government of India initiating substantive policy reforms in the past years and allocating higher budgets for indigenous defence acquisition, the macro picture has improved for this sector. In FY 2023-24, Acceptance of Necessity (AoNs), which would trigger capital acquisition worth ~3.6 trillion, has been accorded, of which greater than 80% of this acquisition will be from Indian industries. The defence supply chain ecosystem continues to witness challenges on account of geopolitical dynamics. The prevailing wars and increased NATO spending have caused the overloading of global OEM capacities, mainly in the European region. The volatile geopolitical situation has also provided a new perspective on the impact of emerging and disruptive technologies and their deployment in combat. However, in this segment, the company has developed a robust and resilient supply chain over the years, with self-reliance as the primary focus and in- house design capabilities. The business is also constantly developing and diversifying its supply chain with an emphasis on indigenisation to assure autonomy to the Indian Armed Forces. 81 6000 Order Inflow Financial performance of the business partner to ISRO and has contributed to the indigenous capability of the Indian space sector for over five decades. The reforms announced in the space sector will enable private sector companies - like L&T, to take on the complete manufacture and integration of launch vehicles as well as satellite bus manufacturing and provide associated services. 33.9% crore Revenue from Operations and OPM% Launch Tracking C&S Band Radar Hi-Tech Manufacturing Segment LARSEN & TOUBRO 83 The Indian space sector is fast emerging as a sunshine sector and promises to see tremendous growth in the coming times. The business has been a trusted industry The business is well poised to leverage the Government's thrust on 'Aatmanirbharta' to gain strategic autonomy through domestic production and win new opportunities in shipbuilding, artillery equipment, combat engineering equipment, and long-range communication equipment in India as well as select regional markets. The indigenous defence production crossed 1 trillion in FY 2022-23. Additionally, the Government has set an ambitious target of 3 trillion of domestic production with 50,000 crore defence exports by FY 2028-29, coupled with over 150 programmes having been identified for acquisition under the 'Make' route of DAP 2020, which focusses on indigenous design, development and manufacturing, is all expected to gather steam over the next five years for the procurement of systems/platforms for domestic use with the government also facilitating exports of these products. The capital acquisition budget for Defence witnessed a moderate increase of ~5% y-o-y in the interim budget for FY 2024-25, resulting in an overall budget of 1.72 trillion, mainly for aircraft & aero engines, army vehicles, and naval fleet. The same is expected to be reset with the historical long-term average growth of 11-12% in the regular budget expected in July 2024. The budget for the FY 2024-25 has also proposed setting up a 1 trillion corpus fund in line with the country's aspiration to develop capabilities in the deep tech sector. crore Outlook 15000 5000- 0 3274 1000- 15.9% 88% 93% 20.0% 2000 4146 3000 230 7% 3504 12% 4000 4692 546 (14.7%) While providing a safe working environment for men and materials, the business continues to focus on the triple bottom line, viz. Social, Environmental and Financial, as well as green initiatives. It has achieved a significant y-o-y reduction in water and energy consumption at its campuses, in line with L&T's sustainability focus and carbon & water neutrality targets. The business has established its proficiency by leveraging Industry 4.0 practices across its operations. Focussed digital initiatives have accelerated productivity and business excellence. R&D and innovation have been the backbone of the Precision Engineering and Systems business since its inception, and the business continues to invest in R&D to develop technologies and products. Various R&D initiatives in the development of high-precision sensors, directed energy beam combiners, unmanned and autonomous system technologies, and the deployment of Al-based solutions have been undertaken during the year. □ Delivering mission-critical flight hardware for ISRO's Chandrayaan-3, Aditya-L1 Mission, and Human Spaceflight Gaganyaan Programme □ Develop and realise Air Independent Propulsion (AIP) energy modules for retro-fitment in the Indian Navy's Project P75 Kalvari class diesel-electric submarines Accord of Technical Evaluation Clearance for the bid for Indian Navy's Project P75-1 for the acquisition of 6 diesel-electric submarines with AIP under the strategic partnership model, in association with Navantia of Spain □ Award of a supply order to develop and trial evaluate Tactical Communication System to serve as a mobile communication backbone for the Indian Army under a 70% Government Funded Make-l scheme Unveiling India's first light tank developed indigenously with DRDO at its Armoured System Complex in an unprecedented time frame of 18 months The signing of a previously negotiated contract for the supply of indigenously developed Close-in Weapon Systems (CIWS) to the Indian Air Force, which provides the last layer of air defence to vital assets and vital points across the country □ A breakthrough in securing a contract from MoD - IAF for High Power Radars (HPR) that would provide long-range threat detection capabilities for the Air Force During the year, the business has achieved multiple successes, uniquely reaffirming L&T's positioning as a 'nation-builder' through a series of Make-in-India programmes. These include: Major Achievements activities, from building launch vehicles and satellites to downstream space data collection and dissemination. The launch services segment is also emerging as a business opportunity for the Indian Industry with the potential transfer of technology of ISRO's Small Satellite Launch Vehicle, which the company targets to operationalise on the back of industrialising the production of Polar Satellite Launch Vehicle (PSLV) for which the Company has teamed-up with Hindustan Aeronautics through a consortium. The launch of the first industry-built PSLV is expected in calendar year 2024. Today, the business is involved in the assembly and integration of launch vehicles for ISRO to build in-house capability to position and eventually begin to offer 'Launch on Demand' services as a business model. Hi-Tech Manufacturing Segment L&T's AMOGH - Autonomous Underwater Vehicle for surveillance AMOGH L&T अमोघ LARSEN & TOUBRO New benchmarks were established by all work centres in terms of accelerated realisation of systems and equipment (serial production category) by deploying Industry 4.0 techniques. Noteworthy ones include the supply of the first lot of Modular Bridging Systems in record time from bulk production clearance and the supply of Large Survey Vessels to Garden Research Shipbuilders & Engineers Ltd. (GRSE) from Kattuppalli Shipyard The Kattupalli Shipyard created history by signing a Master Ship Repair Agreement with the US Navy and undertaking repairs of two US Military Sealift Command. It also enhanced the longstanding collaboration between the UK and India in the maritime domain by undertaking and supporting the maintenance of two Royal Fleet Auxiliary ships □ Conduct extensive development and validation trials of Autonomous Underwater Systems Significant Initiatives Successful development and validation trials of medium- and high-speed unmanned aerial targets. This effort was also awarded the Society of Indian Defence Manufacturers (SIDM) Championship Award 2023 for import substitution □ Award of Green Channel Certificates for multiple land and marine systems and platforms by Quality Assurance agencies of the Indian MoD, based on the demonstrated levels of quality along with mature processes of quality assurance during the execution of major orders Courtesy ISRO L&T has provided critical subsystems for most of India's space missions Statements Reports Report On the Aerospace front, the opening of the sector in 2020 and the Indian Space Policy 2023 provide opportunities to the private sector for participation in end-to-end space Discussion and Analysis Financial Statutory Integrated Management Corporate Integrated Annual Report 2023-24 82 Overview Management